Section 2 | CRA Performance Evaluation
CONTENT TO BE FORMATTED TO MATCH ACUTAL DOCUMENT
PUBLIC DISCLOSURE
April 20, 2021
COMMUNITY REINVESTMENT ACT
PERFORMANCE EVALUATION
Florence Bank
Certificate Number: 23293
85 Main Street
Florence, Massachusetts 01062
Division of Banks Federal Deposit Insurance Corporation
1000 Washington Street, 10th Floor 350 Fifth Avenue, Suite 1200
Boston, Massachusetts 02118 New York, New York 10118
This document is an evaluation of this institution’s record of meeting the credit needs of its entire
community, including low- and moderate-income neighborhoods, consistent with safe and sound
operation of the institution. This evaluation is not, nor should it be construed as, an assessment of
the financial condition of this institution. The rating assigned to this institution does not represent
an analysis, conclusion, or opinion of the Division of Banks or the Federal Deposit Insurance
Corporation concerning the safety and soundness of this financial institution.
TABLE OF CONTENTS
Institution Rating
Overall Rating ......................................................................................................................1
Performance Test Ratings Table .........................................................................................1
Summary of Major Factors Supporting Rating ....................................................................1
Institution
Scope of Evaluation ............................................................................................................ 3
Description of Institution .....................................................................................................5
Description of Assessment Area ..........................................................................................7
Conclusions on Performance Criteria ................................................................................12
Appendix
Scope of Evaluation ...........................................................................................................27
Division of Banks Fair Lending Policies and Procedures .................................................28
Glossary .............................................................................................................................30
1
INSTITUTION RATING
INSTITUTION’S CRA RATING: This institution is rated Satisfactory. An institution in this
group has a satisfactory record of helping to meet the credit needs of its assessment area,
including low- and moderate-income neighborhoods, in a manner consistent with its resources
and capabilities.
The following table indicates the performance level of Florence Bank with respect to the Lending,
Investment, and Service Tests.
PERFORMANCE
LEVELS
PERFORMANCE TESTS
Lending Test* Investment Test Service Test
Outstanding
High Satisfactory X X
Satisfactory** X
Needs to Improve
Substantial
Noncompliance
* The Lending Test is weighted more heavily than the Investment and Service Tests when arriving at
an overall rating.
** FDIC rules and regulations stipulate use of a “High Satisfactory” and “Low Satisfactory” rating
for the three tests. This jointly issued public evaluation uses the term “Satisfactory” in lieu of “Low
Satisfactory” for the Lending, Investment, and Service Test ratings, as the Division does not have a
“Low Satisfactory” rating.
The Lending Test is rated Satisfactory.
Lending levels reflect good responsiveness to assessment area credit needs.
The institution originated a substantial majority of loans within its assessment area.
The geographic distribution of loans reflects adequate penetration throughout the assessment
area.
The distribution of borrowers reflects adequate penetration among retail customers of
different income levels and business customersof different sizes.
The institution makes limited use of innovative and/or flexible lending practices in order to
serve assessment area credit needs.
The institution made an adequate level of community development loans.
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The Investment Test is rated High Satisfactory.
The institution has a significant level of qualified community development investments and
grants, occasionally in a leadership position, particularly those that are not routinely provided
by private investors.
The institution exhibits good responsiveness to credit and community economic development
needs.
The institution occasionally uses innovative and/or complex investments to support
community development initiatives.
The Service Test is rated High Satisfactory.
The institution’s delivery systems are accessible to essentially all portions of the institution’s
assessment area.
To the extent changes have been made, the institution’s record of opening and closing
branches has improved the accessibility of its delivery systems, particularly in low- and
moderate-income geographies and to low- and moderate-income individuals.
Services, including business hours, do not vary in a way that inconveniences portions of the
assessment area, particularly low- and moderate-income geographies and individuals.
The institution provides a relatively high level of community development services.
3
SCOPE OF EVALUATION
General Information
This performance evaluation, conducted jointly by the Federal Deposit Insurance Corporation
(FDIC) and the Commonwealth of Massachusetts Division of Banks (DOB), covers the period
from the prior evaluation, dated February 12, 2018, to the current evaluation dated April 20,
2021. Examiners used the Interagency Large Institution Community Reinvestment Act (CRA)
Examination Procedures. These procedures evaluate the institution’s CRA performance pursuant
to three tests: Lending, Investment, and Service.
The Lending Test considered the institution’s performance according to the following criteria.
Lending activity
Assessment area concentration
Geographic distribution
Borrower profile
Innovative and flexible lending practices
Community development loans
The Investment Test considered the following criteria.
Number and dollar amount of qualified investments
Responsiveness to credit and community development needs
Innovativeness or complexity of qualified investments
The Service Test considered the following criteria.
Accessibility of delivery systems
Changes in branch locations
Reasonableness of business hours and services
Community development services
An institution must achieve at least a Satisfactory rating on the Lending Test to obtain an overall
Satisfactory rating. This evaluation does not include any lending activity performed by affiliates.
Loan Products Reviewed
Examiners determined that the bank’s major product lines are home mortgage and small business
loans. This conclusion considered the institution’s business strategy and the number and dollar
volume of loans originated during the evaluation period. No other loan types, such as small farm
or consumer loans, represent a major product line; therefore, examiners did not present these
product lines in the evaluation.
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Examiners analyzed originated home mortgage and small business loans from January 1, 2018,
through December 31, 2020 reported on Florence Bank’s 2018, 2019, and 2020 Home Mortgage
Disclosure Act (HMDA) Loan Application Register (LARs) and CRA loan registers. Examiners
presented lending data for all years in the assessment area concentration section of the Lending
Test, but presented only 2019 and 2020 lending data in the geographic distribution and borrower
profile tables. The evaluation emphasized 2019 lending performance because it is the most
recent year for which aggregate data is available.
Florence Bank originated 433 home mortgage loans totaling $99.8 million in 2018; 450 loans
totaling $99.0 million in 2019; and 475 loans totaling $117.0 million in 2020. Examiners
compared the institution’s home mortgage lending performance from 2018, 2019, and 2020 to
2015 American Community Survey (ACS) demographic data and 2018 and 2019 HMDA
aggregate data. The bank originated 120 small business loans totaling $21.5 million in 2018; 127
loans totaling $28.9 million in 2019; and 165 loans totaling $32.7 million in 2020. Examiners
compared the bank’s small business lending performance from 2018, 2019, and 2020 to D&B
demographic data for each respective year and to CRA aggregate data for 2018 and 2019.
Examiners placed more weight on Florence Bank’s home mortgage lending due to higher
origination activity compared to small business lending during the evaluation period. However,
according to management, the bank has initially emphasized commercial lending at its new
Hampden County branches. Examiners also focused on the number of loans, rather than dollar
volume, when assessing the institution’s performance, as it better indicates the number of
individuals and businesses served.
Under the Lending Test, examiners also evaluated the bank’s community development lending
and innovative and flexible lending from February 12, 2018 through April 20, 2021. Under the
Investment and Service Tests, examiners considered qualified investments, community
development services, and retail services during the same period.
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DESCRIPTION OF INSTITUTION
Background
Incorporated in 1873, Florence Bank is a state-chartered savings bank owned by Florence
Bank Holding Co, Inc., a one-bank holding company also headquartered in Florence,
Massachusetts (MA). The FDIC and the DOB last evaluated the institution’s CRA
performance on February 12, 2018 and assigned a Satisfactory rating from the FDIC and a
High Satisfactory rating from the DOB using Intermediate Small Institution CRA
Examination Procedures.
Operations
Florence Bank has its main office at 85 Main Street in Florence, (MA) and 11 full-service
branches located in Amherst, Belchertown, Chicopee, Easthampton, Granby, Hadley,
Northampton (2), Springfield, West Springfield, and Williamsburg. Prior to opening the
West Springfield branch in late 2017, the bank’s branches were limited to Hampshire
County. The bank added the Springfield and Chicopee branches, both located in Hampden
County, since the previous examination. Both the Springfield and Chicopee branches are
located in moderate-income census tracts.
The bank offers traditional loan products including home mortgage, commercial, and
consumer loans. Additionally, it offers a variety of deposit products, including checking and
savings accounts for consumers and businesses.
Automated teller machines (ATM) are located at each banking office. The bank also has
seven stand-alone ATMs located in Amherst, Cummington, Northampton (3), Southampton,
and Springfield, and it operates a drive-up branch in Florence. Additional services include
online and mobile banking.
Ability and Capacity
Florence Bank reported total assets of $1.7 billion as of December 31, 2020, which includes total
loans of $1.0 billion. The bank reported total deposits of $1.5 billion as of December 31, 2020
and $280.0 million average total securities from December 31, 2017 to December 31, 2020. The
institution is primarily a residential lender, with loans secured by residential real estate
accounting for 69.4 percent of the loan portfolio. Commercial loans, consisting of loans secured
by nonfarm nonresidential real estate and commercial and industrial loans, make up 28.2 percent
of the portfolio.
The following table illustrates Florence Bank’s loan portfolio distribution as of December 31,
2020.
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Loan Portfolio Distribution as 12/31/2020
Loan Category $(000s) %
Construction, Land Development, and Other Land Loans 23,992 2.3
Secured by Farmland 0 0.0
Secured by 1-4 Family Residential Properties 674,458 65.6
Multifamily (5 or more) Residential Properties 39,345 3.8
Secured by Nonfarm Nonresidential Properties 248,771 24.2
Total Real Estate Loans 986,566 96.0
Commercial and Industrial Loans 41,081 4.0
Agricultural Production and Other Loans to Farmers 0 0.0
Consumer Loans 177 0.0
Obligations of State and Political Subdivisions in the U.S. 0 0.0
Other Loans 104 0.0
Lease Financing Receivable (net of unearned income) 0 0.0
Less: Unearned Income 0 0.0
Total Loans 1,027,928 100.0
Source Reports of Condition and Income
Examiners did not identify any financial or legal impediments that would limit the
institution’s ability to help meet its assessment area credit needs.
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DESCRIPTION OF ASSESSMENT AREA
The CRA requires financial institutions to define one or more assessment areas within which
examiners will evaluate its CRA performance. Florence Bank designated one single assessment
area to include the following cities and towns located in the Springfield, MA Metropolitan
Statitical Area (MSA):
Franklin County: Ashfield, Buckland, Deerfield, Greenfield, Montague, Shutsebury, and
Whately
Hampden County: Agawam Town, Chicopee, East Longmeadow, Hampden, Holyoke,
Longmeadow, Ludlow, Southwick, Springfield, West Springfield, Westfield, and Wilbraham
Hampshire County: Amherst, Belchertown, Chesterfield, Easthampton, Granby, Hadley,
Hatfield, Huntington, Northampton, Pelham, South Hadley, Southampton, Ware, Westhampton,
Williamsburg, and Worthington
Economic and Demographic Data
Florence Bank’s assessment area includes 143 census tracts. The following indicates these
census tracts by income designation according to 2015 ACS data.
25 low-income census tracts,
23 moderate-income census tracts,
44 middle-income census tracts,
47 upper-income census tracts, and
4 census tracts without an income designation.
Hampden County contains 45 of the assessment area’s 48 total low- and moderate-income
census tracts, and 42 are specifically within Springfield, Holyoke, and Chicopee. The
geographic distribution criterion of the Lending Test focuses on bank performance in lending
within the assessment area’s low- and moderate-income census tracts. With such a high
concentration of these census tracts in Hampden County, the bank’s historical branch network
and business focus on Hampshire County, having only recently opened branches in Hampden
County, affects its ability to lend in most of the area’s low- and moderate-income census tracts.
The following table illustrates select demographic characteristics of the assessment area.
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Demographic Information of the Assessment Area
Demographic Characteristics # Low
% of #
Moderate
% of #
Middle
% of #
Upper
% of #
NA*
% of #
Geographies (Census Tracts) 143 17.5 16.1 30.8 32.9 2.8
Population by Geography 640,390 14.5 15.7 32.1 34.9 2.8
Housing Units by Geography 260,764 14.2 16.4 35.1 34.2 0.1
Owner-Occupied Units by Geography 149,502 4.9 12.8 36.7 45.6 0.0
Occupied Rental Units by Geography 92,192 27.8 21.1 33.5 17.3 0.3
Vacant Units by Geography 19,070 21.5 22.0 30.1 25.9 0.4
Businesses by Geography 42,605 13.7 15.1 31.1 39.2 0.8
Farms by Geography 1,366 3.1 5.7 37.8 53.4 0.0
Family Distribution by Income Level 152,004 24.9 15.9 18.1 41.1 0.0
Household Distribution by Income
Level
241,694 27.4 14.8 15.6 42.3 0.0
Median Family Income MSA - 44140
Springfield, MA MSA
$67,203 Median Housing Value $210,265
Median Gross Rent $860
Families Below Poverty Level 12.1%
Source 2015 ACS and 2020 D&B Data. Due to rounding, totals may not equal 100.0%
(*) The NA category consists of geographies that have not been assigned an income classification.
The number of families below the poverty level is relatively high (12.1 percent), indicating a
need for community services targeted to low-income individuals. Low- and moderate-income
census tracts have limited owner-occupied units, as the majority of housing units are rented. In
addition, the median housing value is approximately three times the median family income.
Furthermore, there is a designated opportunity zone in Easthampton designated to help lowincome
individuals.
Examiners used the FFIEC-updated median family income level to analyze home mortgage loans
under the Borrower Profile criterion. The following table presents the low-, moderate-, middle-,
and upper-income categories based on 2018, 2019, and 2020 FFIEC-updated median family
incomes. Franklin County switched from a nonmetropolitan area in 2018 to becoming part of the
Springfield, MA MSA in 2019.
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Median Family Income Ranges
Median Family Incomes Low
<50%
Moderate
50% to <80%
Middle
80% to <120%
Upper
Springfield, MA MSA Median Family Income (44140)
2018 ($73,900) <$36,950 $36,950 to <$59,120 $59,120 to <$88,680
2019 ($76,700) <$38,350 $38,350 to <$61,360 $61,360 to <$92,040
2020 ($76,900) <$38,450 $38,450 to <$61,520 $61,520 to <$92,280
Source FFIEC
U.S. Bureau of Labor Statistics data indicated that the unemployment rate from 2018 to January
2021 for the Springfield, MA MSA averaged 6.2 percent, higher than the statewide and national
unemployment rate of 5.3 percent. Unemployment rates increased during the evaluation period
due to economic effects of the COVID-19 pandemic.
The service industry represents the largest portion of assessment area businesses at 40.2 percent;
followed by non-classifiable establishments (15.5 percent); retail trade (13.4 percent); finance,
insurance, real estate (9.3 percent); and construction (7.2 percent). The analysis of small business
loans under the Borrower Profile criterion in the Lending Test compares the distribution of small
business loans to the distribution of business by gross annual revenue (GAR) level. The
following are the GARs for the area’s businesses based on 2018 D&B data:
83.6 percent have GARs of $1.0 million or less;
5.4 percent have GARs of more than $1.0 million;
11.0 percent have unknown revenues.
Competition
Competition is high for deposits within the assessment area. According to the June 30, 2020
FDIC Deposit Market Share data, 18 institutions operate 198 branches within the Springfield,
MA MSA. The presence of large national institutions creates significant competition.
Specifically, the top three depository institutions were Bank of America, TD Bank, and People’s
United Bank, which operate a total of 50 offices with a combined deposit market share of 33.1
percent. Community banks with the largest deposit market share include Peoplesbank, Westfield
Bank, and Florence Bank. Peoplesbank operates 19 offices with a market share of 9.8 percent,
Westfield Bank operates 23 offices with a market share of 9.0 percent, and Florence Bank
operates 12 offices with a 7.0 percent market share.
FDIC Deposit Market Share data at the county level highlights the bank’s stronghold in
Hampshire County. Specifically, Florence Bank ranked 1st out of 14 institutions in Hampshire
County, holding 25.0 percent of all deposits as of June 30, 2020. In Hampden County; however,
the bank ranks 14th out of 16 institutions, holding only 0.4 percent of all deposits. Hampden
County has six institutions with more than an 11.0 percent deposit market share, highlighting the
higher level of competition Florence Bank faces in Hampden County relative to Hampshire
County.
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The institution also faces significant competition for home mortgage loans. According to 2019
HMDA aggregate data, 345 lenders originated or purchased 16,359 loans in the assessment area.
Florence Bank ranked 10th with a market share of 2.7 percent. The top three lenders were
Citizens Bank, N.A.; Quicken Loans; and Peoplesbank; but even these top lenders had market
shares under 5.0 percent, highlighting the high level of competition from numerous lenders.
A review of 2019 HMDA aggregate data by counties in the assessment area highlights Florence
Bank’s mortgage lending stronghold in Hampshire County and the substantial competition it
faces lending in Hampden County. The bank ranked 1st among 214 lenders that originated or
purchased loans in Hampshire County, with a 7.5 percent market share. In Hampden County,
however, the bank ranked 35th among 302 lenders, with a 0.9 percent market share. These
statistics reflect the bank’s competitive advantage in Hampshire County, where it has had a
significant physical branch presence for many years. Conversely, HMDA market share data also
highlights challenges faced by Florence Bank to lend in Hampden County, which has many
lenders, including larger community banks headquartered in the county, and in which the bank
has only recently opened branches.
The small business lending market is also highly competitive. According to 2019 CRA
aggregate data, large national institutions control a large portion of the small business lending
market. For example, the top three institutions, American Express, JPMorgan Chase, and
Citibank, have a combined market share of 42.1 percent in the full Springfield, MA MSA. The
top three community banks for small business lending are Westfield Bank, Florence Bank, and
Easthampton Savings Bank, with Florence Bank ranking 19th with a 0.8 percent market share out
of 100 reporting lenders.
Community Contact
As part of the evaluation process, examiners contact organizations active in the assessment area
to understand and assess the credit and community development needs and opportunities within
the assessment area. This information helps examiners determine the responsiveness of local
financial institutions to community development needs.
Examiners contacted a local organization that focuses on economic development and
revitalization of low- and moderate-income areas. The organization’s contact emphasized the
need for development in low- and moderate-income areas, in particular Holyoke. In addition, the
contact explained the importance of local institutions collaborating with area non-profits to build
trust in the banking system among low- and moderate-income individuals. The contact further
noted that financial institutions in the area have been responsive in supplying donations to
benefit economic development, but additional work can be done.
Credit and Community Development Needs and Opportunities
Based on information from the community contact, bank management, and demographic data,
examiners determined that affordable housing, economic development, revitalization of low- and
moderate-income portions of Springfield and Holyoke, and community services for low- and
moderate-income individuals are all needed in the assessment area. Relatively high levels of
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poverty and unemployment demonstrate a need for community services and economic
development. In addition, high property values demonstrate needs for affordable housing.
Furthermore, the large percentage of businesses with GARs of less than $1.0 million
demonstrates potential for economic development within the assessment area. Last, the cities of
Springfiled and Holyoke have opportunities for revitalization and stabilization; both cities
contain a fair number of low- and moderate-income census tracts.
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CONCLUSIONS ON PERFORMANCE CRITERIA
LENDING TEST
Florence Bank’s Lending Test rating is Satisfactory. Adequate performance in the Geographic
Distribution and Borrower Profile, along with an adequate level of Community Development Loans
supports the rating.
Lending Activity
The institution’s lending levels reflect good responsiveness to assessment area credit needs. Of all
state-chartered institutions, Florence Bank’s home mortgage market share ranked 3rd in 2019,
illustrating good responsiveness to assessment area credit needs. In 2019 and 2020, Florence Bank
originated or purchased 893 home mortgage loans totaling $203.6 million and 276 small business
loans totaling $57.7 million inside the assessment area.
The Description of Assessment Area section previously discussed the bank’s market share rankings
for home mortgage and small business lending. For home mortgage lending, the institutions ranked
above Florence Bank in overall market share in 2019 included large financial institutions and
mortgage companies. Similarly, for small business lending, many of the institutions that ranked
above Florence Bank in 2019 were large national banks and credit card companies.
In addition, the institution increased its origination activity for both product types in each successive
year of the evaluation period, further demonstrating good responsiveness to assessment area credit
needs. Notably, Florence Bank originated more than half of its small business loans in Hampden
County, reflecting its strategic focus on commercial lending after opening three branches in
Hampden County since late 2017. Approximately two-thirds of the bank’s HMDA loans were
made in Hampshire County. Franklin County contains the smallest share of both the bank’s
HMDA and small business loans, with market share reports reflecting a much smaller number of
loans by all lenders in Franklin County compared to Hampshire and Hampden Counties.
Assessment Area Concentration
The institution originated a substantial majority of loans within its assessment area. The table
below highlights Florence Bank’s lending inside and outside the assessment area by loan
category.
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Lending Inside and Outside of the Assessment Area
Number of Loans Dollar Amount of Loans $(000s)
Loan Category Inside Outside Total Inside Outside Total
# % # % # $ % $ % $(000s)
Home Mortgage
2018 412 95.2 21 4.9 433 90,510 90.7 9,290 9.3 99,800
2019 434 96.4 16 3.6 450 91,809 92.8 7,146 7.2 98,955
2020 459 96.6 16 3.4 475 111,749 95.5 5,218 4.5 116,967
Subtotal 1,305 96.1 53 3.9 1,358 294,068 93.1 21,654 6.9 315,722
Small Business
2018 115 95.8 5 4.2 120 20,150 93.5 1,399 6.5 21,549
2019 118 92.9 9 7.1 127 26,677 92.4 2,180 7.6 28,857
2020 158 95.8 7 4.2 165 31,005 94.9 1,671 5.1 32,676
Subtotal 391 94.9 21 5.1 412 77,832 93.7 5,250 6.3 83,082
Total 1,696 95.8 74 4.2 1,770 371,900 93.3 26,904 6.7 398,804
Source Bank Data. Due to rounding, totals may not equal 100.0%
Geographic Distribution
The geographic distribution of loans reflects adequate dispersion throughout the assessment area.
Despite poor home mortgage lending performance, examiners gave weight to the bank’s
adequate small business lending performance. With a vast majority of low- and moderateincome
census tracts in Hampden County, the bank’s recent branch expansion to Hampden
County mitigates the impact of home mortgage lending performance. Examiners focused on the
percentage by number of loans in low- and moderate-income census tracts.
Home Mortgage Loans
The geographic distribution of home mortgage loans reflects poor dispersion throughout the
assessment area. Examiners gave more weight to the comparison of 2019 bank performance to
2019 aggregate data, due to 2020 aggregate data not being available.
The following table shows that the bank’s 2019 performance in low-income census tracts trails
that of aggregate lending by 3.3 percentage points and the percentage of owner-occupied housing
units by 1.7 percentage points. In 2020, bank lending decreased slightly, trailing the percentage
of owner-occupied units in low-income census tracts by 2.5 percentage points. However, market
share data helps mitigate the lower percentage of bank loans in in low-income census tracts. In
2019 the institution ranked 25th out of 128 lenders for lending in low-income census tracts, with
a 1.3 percent market share.
In moderate-income census tracts, the bank trailed aggregate lending and the percentage of
owner-occupied units in 2019. In 2020, the bank lending again declined slightly, continuing to
trail the percentage of owner-occupied units in moderate-income census tracts. Market share
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data, however, helps mitigate the bank’s low percentage of loans to moderate-income census
tracts. In 2019, the institution ranked 41st out of 174 lenders for lending in moderate-income
census tracts, with a 0.7 percent market share.
As noted in the Description of Institution and Description of Assessment Area, Florence Bank
has historically only had branch locations in Hampshire County, and only recently opened
branches in Hampden County. Hampden County contains 45 of the assessment area’s 48 total
low- and moderate-income census tracts, but over 60 percent of the bank’s home mortgage
lending occurred in Hampshire County in both 2019 and 2020. As a result, any analysis looking
at the bank’s entire assessment area skews towards Hampshire County, where there are no lowand
just one moderate-income census tract in which the bank could lend.
When analyzing performance only in the Hampden County portion of the assessment area, the
bank’s level of lending in low- and moderate-income census tracts more closely matches
aggregate lending. In 2019, within the Hampden County portion of the assessment area, the
bank originated 12.4 percent of its loans in low-income census tracts and 16.2 percent of its
loans in moderate-income census tracts. This is comparable to aggregate performance, where
8.7 percent of loans were originated or purchased within low-income census tracts and 20.2
percent of loans were originated or purchased within moderate-income census tracts. The bank’s
performance in these geographies decreased in 2020, with 10.0 percent of loans from lowincome
census tracts and 9.0 percent of loans from moderate-income census tracts.
The bank’s market share in low- and moderate-income census tracts in the Hampden County
portion of the assessment area is comparable to its overall market ranking. In 2019, Florence
Bank ranked 35th overall within the Hampden County portion of its assessment area, with a
market share of 0.9 percent. Within the low- and moderate-income census tracts of Hampden
County, the bank ranked 25th and 39th with market shares of 1.3 percent and 0.7 percent,
respectively. Furthermore, the bank’s two branches opened since the previous examination are
located in moderate-income census tracts in Hampden County, indicating the institution’s efforts
to expand its lending in these areas. Considering all performance context, the bank’s poor home
mortgage lending in low- and moderate-income census tracts does not carry much weight when
determining the Lending Test rating and conclusions.
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Geographic Distribution of Home Mortgage Loans
Tract Income Level
% of Owner-
Occupied
Housing Units
Aggregate
Performance
% of #
# % $(000s) %
Low
2019 4.9 6.5 14 3.2 2,687 2.9
2020 4.9 -- 11 2.4 1,824 1.6
Moderate
2019 12.8 15.1 18 4.1 3,712 4.0
2020 12.8 -- 10 2.2 1,547 1.4
Middle
2019 36.7 35.7 182 41.9 34,458 37.5
2020 36.7 -- 166 36.2 35,494 31.8
Upper
2019 45.6 42.6 219 50.5 50,563 55.1
2020 45.6 -- 271 59.0 62,841 56.2
Not Available
2019 0.0 0.0 1 0.2 387 0.4
2020 0.0 -- 1 0.2 10,043 9.0
Totals
2019 100.0 100.0 434 100.0 91,809 100.0
2020 100.0 -- 459 100.0 111,749 100.0
Source 2015 ACS; Bank Data, 2019 HMDA Aggregate Data, "--" data not available.
Due to rounding, totals may not equal 100.0%
Small Business Loans
The geographic distribution of small business loans reflects adequate dispersion throughout the
assessment area. The following table shows that, in 2019, bank lending in low-income census
tracts trailed the aggregate by just 1.5 percentage points and the demographic comparator by 2.7
percentage points. In 2020, the institution’s performance declined by 2.8 percentage points.
In 2019, the institution’s lending performance in moderate-income census tracts was comparable
to both the aggregate and the demographic comparator. In 2020, the institution’s level of
lending in moderate-income census tracts increased by 1.8 percentage points. Considering
context previously noted about competition and the bank’s physical presence and historical focus
primarily in Hampshire County, these levels reflect positive performance.
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Geographic Distribution of Small Business Loans
Tract Income Level % of
Businesses
Aggregate
Performance
% of #
# % $(000s) %
Low
2019 13.7 12.5 13 11.0 2,026 7.6
2020 13.7 -- 13 8.2 4,739 15.3
Moderate
2019 15.1 15.5 18 15.3 3,430 12.9
2020 15.1 -- 27 17.1 8,202 26.5
Middle
2019 31.2 30.6 37 31.4 9,109 34.1
2020 31.1 -- 53 33.5 7,223 23.3
Upper
2019 39.2 41.2 49 41.5 12,077 45.3
2020 39.2 -- 62 39.2 9,969 32.2
Not Available
2019 0.8 0.2 1 0.8 35 0.1
2020 0.8 -- 3 1.9 872 2.8
Totals
2019 100.0 100.0 118 100.0 26,677 100.0
2020 100.0 -- 158 100.0 31,005 100.0
Source 2019 & 2020 D&B Data; Bank Data; 2019 CRA Aggregate Data, "--" data not available.
Due to rounding, totals may not equal 100.0%
Borrower Profile
The distribution of borrowers reflects adequate penetration among individuals of different
income levels and businesses of different sizes. The institution’s adequate performances in
home mortgage and small business lending support this conclusion. Examiners focused on the
percentage by number of home mortgage loans to low- and moderate-income borrowers and
small business loans to businesses with GARs of $1.0 million or less.
Home Mortgage Loans
The distribution of home mortgage loans to individuals of different income levels is adequate.
According to 2019 data, the institution trailed aggregate by 1.3 percentage points in home
mortgage loans to low-income borrowers and by 7.7 percent in home mortgage loans to
moderate-income borrowers; however, the high performing lenders in the assessment area ahead
of Florence Bank are national banks, credit unions, and mortgage companies. In 2019, the
institution ranked 16th of 118 lenders in lending to low-income borrowers with a market share of
2.2 percent. The institution ranked 19th in lending to moderate-income borrowers with a market
share of 1.7 percent.
17
The institution also trailed the total percentage of low-income borrowers; however, 12.1 percent
of families within the assessment level are below the poverty level and with a median housing
value of $210,265, and these families would likely not qualify for a mortgage. The 2020
aggregate data was not available at the time of the review; however, the percentage of loans to
low-income borrowers decreased by 2.7 percentage points.
Distribution of Home Mortgage Loans by Borrower Income Level
Borrower Income Level % of Families
Aggregate
Performance
% of #
# % $(000s) %
Low
2019 24.9 7.1 25 5.8 2,625 2.9
2020 24.9 -- 14 3.1 1,259 1.1
Moderate
2019 15.9 22.2 63 14.5 9,029 9.8
2020 15.9 -- 69 15.0 11,050 9.9
Middle
2019 18.1 23.7 106 24.4 19,550 21.3
2020 18.1 -- 120 26.1 21,811 19.5
Upper
2019 41.1 30.9 193 44.5 47,371 51.6
2020 41.1 -- 225 49.0 57,390 51.4
Not Available
2019 0.0 16.2 47 10.8 13,234 14.4
2020 0.0 -- 31 6.8 20,240 18.1
Totals
2019 100.0 100.0 434 100.0 91,809 100.0
2020 100.0 -- 459 100.0 111,749 100.0
Source 2015 ACS; Bank Data, 2019 HMDA Aggregate Data, "--" data not available.
Due to rounding, totals may not equal 100.0%
Small Business Loans
The distribution of small business loans reflects adequate penetration of loans to businesses with
GARs of $1.0 million or less. The following table shows that 38.1 percent of small business
loans originated in 2019 were to businesses with GARs of $1.0 million or less. This lending is
comparable to the aggregate performance.
In 2020, the percentage of small business loans originated by the institution decreased to 16.5
percent. Despite the percentage of loans being lower than the total percentage of businesses with
GARs of $1.0 million or less within the assessment area, the institution performance is
reasonable. The decrease in the institution’s performance between 2019 and 2020 can be
18
explained by the large amount of Paycheck Protection Program (PPP) loans, which do not
require GAR reporting and are reflected in the Revenue Not Available category.
Distribution of Small Business Loans by Gross Annual Revenue Category
Gross Revenue Level % of
Businesses
Aggregate
Performance
% of #
# % $(000s) %
<=$1,000,000
2019 82.8 41.6 45 38.1 8,119 30.4
2020 83.6 -- 26 16.5 5,027 16.2
>1,000,000
2019 5.8 -- 73 61.9 18,558 69.6
2020 5.4 -- 59 37.3 16,369 52.8
Revenue Not Available
2019 11.4 -- 0 0.0 0 0.0
2020 11.0 -- 73 46.2 9,609 31.0
Totals
2019 100.0 100.0 118 100.0 26,677 100.0
2020 100.0 -- 158 100.0 31,005 100.0
Source 2019 & 2020 D&B Data; Bank Data; 2019 CRA Aggregate Data; "--" data not available.
Due to rounding, totals may not equal 100.0%
Innovative and Flexible Lending
The institution makes limited use of innovative and flexible lending practices in order to serve
assessment area credit needs. Florence Bank offers several programs designed to assist low- and
moderate-income individuals and first-time homebuyers with low minimum down payments,
discounted interest rates, and no mortgage insurance requirements. The institution also offers
several loan programs designed to provide credit to small businesses, including programs
offering government guarantees.
The institution originated 115 innovative and flexible loans, totaling approximately $31.1
million, to individuals and businesses during the evaluation period. Of these innovative and
flexible loans, the institution originated 20 loans totaling approximately $4.0 million under
affordable housing programs. The institution originated the remaining 95 loans totaling
approximately $27.2 million under small business lending programs. Of the 95 loans under the
small business lending programs, 77 were PPP loans for approximately $11.9 million.
19
Innovative or Flexible Lending Programs
Type of Program
2018 2019 2020 Totals
# $(000s) # $(000s) # $(000s) # $(000s)
5/1 ARM FTHB 1 164 1 171 2 486 4 821
Home Possible 1 165 0 0 1 174 2 339
MassHousing Loans with No
Mortgage Insurance
1 165 0 0 0 0 1 165
MassHousing 3 533 0 0 5 886 8 1,419
USDA 1 293 2 400 2 525 5 1,218
Subtotal Residential Loans 7 1,320 3 571 10 2,071 20 3,962
SBA 7(a) 1 172 0 0 1 220 2 392
SBA 504 2 1,347 4 1,060 3 2,650 9 5,057
SBA Express 1 75 1 115 1 250 3 440
PPP 0 0 0 0 77 11,922 77 11,922
Tax-Exempt Bonds 0 0 0 0 4 9,374 4 9,374
Subtotal Commercial Loans 4 1,594 5 1,175 86 24,416 95 27,185
Totals 11 2,914 8 1,746 96 26,487 115 31,147
Source Bank Records
The following highlights the various innovative and flexible loan programs offered by the bank.
Home Mortgage Lending Programs
5/1 Adjustable Rate Mortgage (ARM) for First-Time Homebuyer (FTHB): This product is
designed to assist first-time homebuyers who may not qualify for a traditional mortgage by
offering a 5/1 ARM with lower initial rates, flexible down payment and income
qualifications, no points, and a credit towards closing costs.
Freddie Mac Home Possible: The Home Possible program facilitates home ownership
among low- and moderate-income individuals by offering loans with low down payments,
high loan-to-value limits, and reduced mortgage insurance costs.
MassHousing Loan program: Through the Massachusetts Housing Finance Agency, Florence
Bank offers 30-year, fixed-rate financing for the purchase on a one-to-four family properties
for first-time homebuyers that meet income and asset limitations. Borrowers may finance up
to 97.0 percent of the sales price or the appraised value, whichever is less, on a single-family
home.
U.S Department of Agriculture (USDA) Guaranteed: This program assists approved lenders
in providing low- and moderate-income households the opportunity to build, rehabilitate,
improve, or relocate a dwelling as their primary residence in eligible rural areas.
20
Small Business Lending Programs
Small Business Administration (SBA) 7(a): Florence Bank is a preferred lender for the SBA
7(a) loan program. This loan product is the SBA’s primary program for providing financing
to small businesses; it offers small businesses a maximum loan amount of $5.0 million.
SBA 504 Certified Development Company Program - The SBA 504 Program is an economic
development program offering small business financing while creating jobs and promoting
job growth. The program provides approved small businesses with long-term, fixed-rate
financing for major fixed assets.
SBA Express Loan Program: This program offers borrowers an accelerated turnaround time
of up to 36 hours for approval on loan amounts up to $350,000. The SBA provides a
maximum guaranty of 50.0 percent, and no collateral is required for loans of $25,000 or less.
Paycheck Protection Program: The PPP provides low-cost, forgivable loans to qualifying
small businesses to help cover payroll costs, mortgage interest, rent, and utilities during
periods of severe business disruption or temporary closure caused by the COVID-19
pandemic.
Tax-Exempt Bonds: The bank offers financing to businesses through the Massachusetts
Development Finance Agency’s revenue bonds. This flexible financing option is available
for non-profits, affordable housing developers, municipal entities, manufacturers, and
environmental enterprises. This program offers low rates and flexible terms to support
economic development.
Community Development Lending
Florence Bank made an adequate level of community development loans. The bank originated
23 community development loans, totaling approximately $28.1 million, inside the assessment
area during the evaluation period. This total includes eight loans for $7.8 million that benefit a
broader statewide and regional area including the bank’s assessment area. In addition, the bank
originated a loan totaling approximately $940,000 outside the assessment area. This represents a
significant decrease in community development loan activity by dollar amount but an increase in
the number of loans since the prior evaluation. At the prior evaluation, the bank originated 14
community development loans, totaling $43.1 million.
The current level of activity represents 1.9 percent of average total assets and 2.7 percent of
average total loans since the prior CRA evaluation. This level of activity is a decrease from the
last evaluation when the level of activity represented 3.5 percent of average total assets and 4.6
percent of average total loans. The following table details the bank’s community development
lending by community development purpose and by year.
21
Community Development Lending
Activity Year
Affordable
Housing
Community
Services
Economic
Development
Revitalize or
Stabilize Totals
# $(000s) # $(000s) # $(000s) # $(000s) # $(000s)
2018 (Partial) 0 0 6 4,945 0 0 0 0 6 4,945
2019 1 30 6 5,288 0 0 5 12,857 12 18,175
2020 0 0 4 4,275 0 0 0 0 4 4,275
YTD 2021 0 0 1 750 0 0 0 0 1 750
Total 1 30 17 15,258 0 0 5 12,857 23 28,145
Source Bank Data
The following originations represent community development loans made to organizations and
corporations that benefit towns inside the assessment area and the surrounding neighborhoods:
In 2019, the institution originated a $2.6 million loan to fund the renovation and restoration
of an abandoned mill building inside an opportunity zone located in Easthampton. The
building was converted into a commercial space. The loan supports revitalization and
stabilization.
In 2018, the institution originated a $2.1 million loan to provide bridge funding to facilitate
the procurement of New Market Tax Credits to construct a childcare learning facility in
Springfield. The facility is located in a low-income tract and primarily serves low- and
moderate-income families.
In 2020, the institution extended a line of credit for $600,000 to fund the renovation and
conversion of a single-family home in Holyoke. The property was converted into a 16-unit
substance abuse facility that is geared towards treating the Lesbian, Gay, Bisexual,
Transgender, and Queer (LGBTQ) community. The loan primarily supports the provision of
community services targeted to low- and moderate-income individuals.
In 2020 and 2021, the bank originated two PPP loans with a combined amount of $1.9
million to an organization that provides medical and supportive services to disabled
individuals in Western Massachusetts and parts of Connecticut. Individuals who qualify for
Mass Health receive services completely free. The organization primarily serves low- and
moderate-income individuals.
INVESTMENT TEST
Florence Bank’s Investment Test rating is High Satisfactory. The significant level of qualified
investments and good responsiveness to the needs of the community primarily support this
conclusion.
22
Investment Activity
The institution has a significant level of qualified community development investments and
grants, occasionally in a leadership position, particularly those that are not routinely provided by
private investors.
Florence Bank’s qualified investments during the evaluation period totaled $4.0 million, which is
1.4 percent of its average total securities and 0.3 percent of its average total assets. These ratios
have increased since the prior evaluation values of 1.3 percent and 0.2 percent respectively. This
performance is comparable to similarly situated institutions by asset size and location that
received the same performance conclusion in their most recent CRA evaluation. The majority of
the bank’s qualified donations and grants supported community services. The following table
illustrates the bank’s qualified investments, grants, and donations.
Qualified Investments
Activity Year
Affordable
Housing
Community
Services
Economic
Development
Revitalize or
Stabilize Totals
# $(000s) # $(000s) # $(000s) # $(000s) # $(000s)
Prior Period 12 2,590 0 0 0 0 0 0 12 2,590
2018 0 0 0 0 1 125 0 0 1 125
2019 0 0 0 0 1 375 0 0 1 375
2020 0 0 0 0 0 0 0 0 0 0
YTD 2021 0 0 0 0 0 0 0 0 0 0
Subtotal 12 2,590 0 0 2 500 0 0 14 3,090
Qualified Grants
& Donations 7 22 150 502 8 24 40 316 205 863
Total 19 2,612 150 502 10 524 40 316 219 3,953
Source Bank Data
The institution has approximately $3.1 million in qualified equity investments. Since the
previous evaluation, new investments represent $500,000. All prior period equity investments
helped provide affordable housing, and all current period equity investments helped economic
development. The following are notable examples of qualified investments and donations.
Equity and Debt Security Investments
Current Period Investments
The institution invested $500,000 in a loan fund, which included SBA loans to finance small
businesses that created jobs for low- and moderate-income individuals.
Prior Period Investments
The institution has $1.0 million outstanding invested in mortgage-backed securities
collateralized by home mortgage loans made to low- and moderate-income individuals.
23
The institution has $1.6 million outstanding invested in a mutual fund which identifies and
purchases securities that support community services that benefit low- and moderate-income
individuals and census tracts within the bank’s assessment area.
Charitable Contributions
The institution provided approximately $90,000 to a community development organization
that offers services and programs that benefit low- and moderate-income individuals through
affordable housing and economic opportunities.
The institution donated approximately $107,000 to two organizations that provide services
and support for those in poverty in Hampshire County.
The institution donated approximately $30,000 to provide affordable housing to low- and
moderate-income individuals within the Springfield, MA MSA.
Responsiveness to Credit and Community Development Needs
The institution exhibits good responsiveness to credit and community economic development
needs. The institution’s qualified investments, especially donations, have community
development purposes that benefit communities throughout the entire assessment area that
address key community development needs. The majority of the institution’s qualified
investments and donations by dollar amount and count benefit affordable housing and
community service respectively. Additionally, needs such as economic development and
revitalization and stabilization are also met by qualified investments.
Community Development Initiatives
The institution occasionally uses innovative and complex investments to support community
development initiatives. The institution used both grants and investments in loan funds to
support community development needs; however, it makes limited use of innovative or complex
investment vehicles. The institution primarily relies on mortgage backed securities and
donations to make qualified investments.
24
SERVICE TEST
Florence Bank’s Service Test rating is High Satisfactory. The institution’s accessibility of
delivery systems, changes in branch location, and level of community development services
primarily support this conclusion.
Accessibility of Delivery Systems
Florence Bank’s service delivery systems are accessible to essentially all portions of the
institution’s assessment area. The following table shows the institution’s branch structure and
ATM network by census tract income level.
Branch and ATM Distribution by Geography Income Level
Tract Income Level Census Tracts Population Branches ATMs
# % # % # % # %
Low 25 17.5 92,915 14.5 0 0.0 1 4.0
Moderate 23 16.1 100,403 15.7 3 23.1 3 12.0
Middle 44 30.8 205,791 32.1 4 30.8 11 44.0
Upper 47 32.9 223,217 34.9 5 38.5 9 36.0
NA 4 2.8 18,064 2.8 1 7.7 1 4.0
Totals 143 100.0 640,390 100.0 13 100.0 25 100.0
Source 2015 ACS & Bank Data. Due to rounding, totals may not equal 100.0%
The institution currently operates three branches in moderate-income census tracts, located in
Chicopee, Springfield, and West Springfield Town. Although the institution’s branch and ATM
distribution compares favorably to the number of census tracts and population of moderateincome
tracts, the institution operates only one ATM in a low-income tract.
With the exception of the Springfield branch, each branch has at least one ATM. Easthampton,
Florence, Hadley, and Northampton locations each have a walk-up and drive-up ATM. In
addition, the Florence location has another ATM in its lobby that is not deposit-taking for
employee use. Furthermore, the institution operates eight remote ATMs. The Basketball Hall of
Fame ATM is located in a low-income census tract and is accessible to the public. All deposittaking
ATMs are “smart” ATMs, which can perform most transactions tellers perform to give
consumers access to these functions even during branch closures, such as the instant capturing of
checks.
Additionally, Florence Bank’s alternative delivery systems help compensate for any lack of
immediate access to its branches or ATMs. Specifically, the institution provides online banking
at no cost to allow customers to pay bills, transfer funds, and view account balances. Seventyfive
percent of customers are enrolled in online banking, giving them ready access to their
accounts. Furthermore, Florence Bank allows customers to use mobile and telephone banking to
25
provide customers access to their accounts regardless of the time. Lastly, the institution has
expanded its access to bank functions by adding the use of online account opening during the
review period. Mobile banking has similar features to online banking further increasing
accessibility of funds.
Changes in Branch Locations
To the extent changes have been made, the institution’s record of opening and closing branches
has improved the accessibility of its delivery systems, particularly to low- and moderate-income
geographies and to low- and moderate-income individuals. Since the prior evaluation, the
institution opened two full-service branches. The new Springfield branch, opened in 2018, is in
a moderate-income census tract and the new Chicopee branch, opened in 2021, is also located in
moderate-income census tract. The institution has not closed any branches since the last CRA
evaluation. The addition of two branches in moderate-income census tracts reflects positively on
the bank’s Service Test performance.
Reasonableness of Business Hours and Services
Services, including business hours, do not vary in a way that inconveniences portions of the
assessment area, particularly low- and moderate-income geographies and individuals. Generally,
lobby hours in all branch locations do not vary materially on weekdays; however, the only three
branches not open on Saturdays (located in Springfield, West Springfield Town, and Chicopee)
are all located in moderate-income census tracts. Online and mobile banking, in addition to the
presence of 24-hour ATMs help offset limited hours because it provides customers access to
most banking services. In addition, services do not materially vary across branches.
Community Development Services
The institution provides a relatively high level of community development services. During the
evaluation period, the institution provided 113 instances of community service to 39 community
development organizations that support affordable housing, community service, economic
development, and neighborhood revitalization efforts.
The following table illustrates the institution’s community development services by year and
purpose.
Community Development Services
Activity Year Affordable
Housing
Community
Services
Economic
Development
Revitalize
or Stabilize
Totals
# # # # #
2018 (Partial) 1 26 2 10 39
2019 1 24 2 10 37
2020 0 25 2 10 37
Total 2 75 6 30 113
Source Bank Data
26
Examples of notable community development services provided by bank employees are listed
below.
The institution’s President/Chief Executive Officer (CEO) serves on the Board of Directors
of the Western Massachusetts Economic Development Council, which is a non-profit public
benefit organization that promotes economic development and low- and moderate-income
job creation and retention within the assessment area.
A Vice President serves on the Development Committee for Amherst Survival Center, an
organization that connects low-income individuals from Franklin and Hampshire Counties to
food, healthcare, and other basic services.
Two Vice Presidents serve as Board members on Revitalize Community Development
Center, an organization that performs critical repairs, modifications, and rehabilitation on the
homes of low-income families in Holyoke and Springfield.
DISCRIMINATORY OR OTHER ILLEGAL CREDIT PRACTICES REVIEW
Examiners did not identify any evidence of discriminatory or other illegal credit practices.
Therefore, this consideration did not affect the institution’s CRA rating.
27
APPENDIX
SCOPE OF EVALUATION
SCOPE OF EVALUATION
TIME PERIOD REVIEWED
February 12, 2018 through April 20, 2021
FINANCIAL INSTITUTION
PRODUCTS
REVIEWED
Florence Bank HMDA and Small
Business Loans
(2018, 2019, and
2020)
Community
Development Loans,
Investments, and
Services (February
12, 2018 – April 20,
2021)
AFFILIATE(S)
AFFILIATE
RELATIONSHIP
PRODUCTS
REVIEWED
NA NA NA
LIST OF ASSESSMENT AREAS AND TYPE OF EVALUATION
ASSESSMENT AREA TYPE OF
EXAMINATION
BRANCHES
VISITED
OTHER
INFORMATION
Springfield, MA MSA Full Scope None N/A
28
MASSACHUSETTS DIVISION OF BANKS - FAIR LENDING POLICIES AND
PROCEDURES
The Division of Banks provides comments regarding the institution’s fair lending policies and
procedures pursuant to Regulatory Bulletin 1.3-106. A review of the institution’s public
comment file indicated the institution received no complaints pertaining to the institution’s CRA
performance since the previous examination. The fair lending review was conducted in
accordance with the FFIEC Interagency Fair Lending Examination Procedures. Based on these
procedures, no evidence of disparate treatment was noted.
MINORITY APPLICATION FLOW
Examiners reviewed the institution’s 2019 and 2020 HMDA LARs to determine if the
institution’s application flow from different racial and ethnic groups reflected the assessment
area’s demographics.
According to 2015 ACS U.S. Census data, the institution’s assessment area contains a population
of 640,390 individuals, of which 29.6 percent are minorities. The assessment area’s minority
population is 6.4 percent Black/African American, 3.0 percent Asian, 0.1 percent American
Indian, 18.1 percent Hispanic or Latino, and 2.0 percent Other.
In 2019, the institution received 555 HMDA-reportable loan applications from within its
assessment area. Of these applications, the institution received 21 (3.8 percent) from racial
minorities, 12 of which were originated. These figures trail aggregate data, which indicates 8.8
percent of applications received were from racial minorities. For the same period, 6 applications
(1.1 percent) were received from Hispanic-only applicants and 10 (1.8 percent) were received
from joint Hispanic/non-Hispanic applicants, compared to aggregate data which indicates 10.3
and 1.8 percent of total applications were received from these ethnic groupings in the assessment
area, respectively.
In 2020, the institution received 684 HMDA-reportable loan applications from within its
assessment area. Of these, the institution received 40 (5.8 percent) from racial minorities, of
which 24 were originated. For the same period, the institution received 5 applications (0.7
percent) from Hispanic-only applicants, and 16 (2.3 percent) joint Hispanic/non-Hispanic
applicants. Aggregate data for 2020 was unavailable as of the date of this evaluation; therefore
examiners made no comparison to aggregate performance.
The institution’s performance in 2018 with respect to applications received from racial minorities
was below aggregate performance overall, and the institution performed below the aggregate
with Hispanic or Latino applicants. The institution showed an increasing trend with racial
minorities in 2020, though its performance with Hispanic and Latino applicants remained stable.
The following table details the institution’s minority application flow and aggregate data in its
assessment area.
April 20, 2021
COMMUNITY REINVESTMENT ACT
PERFORMANCE EVALUATION
Florence Bank
Certificate Number: 23293
85 Main Street
Florence, Massachusetts 01062
Division of Banks Federal Deposit Insurance Corporation
1000 Washington Street, 10th Floor 350 Fifth Avenue, Suite 1200
Boston, Massachusetts 02118 New York, New York 10118
This document is an evaluation of this institution’s record of meeting the credit needs of its entire
community, including low- and moderate-income neighborhoods, consistent with safe and sound
operation of the institution. This evaluation is not, nor should it be construed as, an assessment of
the financial condition of this institution. The rating assigned to this institution does not represent
an analysis, conclusion, or opinion of the Division of Banks or the Federal Deposit Insurance
Corporation concerning the safety and soundness of this financial institution.
TABLE OF CONTENTS
Institution Rating
Overall Rating ......................................................................................................................1
Performance Test Ratings Table .........................................................................................1
Summary of Major Factors Supporting Rating ....................................................................1
Institution
Scope of Evaluation ............................................................................................................ 3
Description of Institution .....................................................................................................5
Description of Assessment Area ..........................................................................................7
Conclusions on Performance Criteria ................................................................................12
Appendix
Scope of Evaluation ...........................................................................................................27
Division of Banks Fair Lending Policies and Procedures .................................................28
Glossary .............................................................................................................................30
1
INSTITUTION RATING
INSTITUTION’S CRA RATING: This institution is rated Satisfactory. An institution in this
group has a satisfactory record of helping to meet the credit needs of its assessment area,
including low- and moderate-income neighborhoods, in a manner consistent with its resources
and capabilities.
The following table indicates the performance level of Florence Bank with respect to the Lending,
Investment, and Service Tests.
PERFORMANCE
LEVELS
PERFORMANCE TESTS
Lending Test* Investment Test Service Test
Outstanding
High Satisfactory X X
Satisfactory** X
Needs to Improve
Substantial
Noncompliance
* The Lending Test is weighted more heavily than the Investment and Service Tests when arriving at
an overall rating.
** FDIC rules and regulations stipulate use of a “High Satisfactory” and “Low Satisfactory” rating
for the three tests. This jointly issued public evaluation uses the term “Satisfactory” in lieu of “Low
Satisfactory” for the Lending, Investment, and Service Test ratings, as the Division does not have a
“Low Satisfactory” rating.
The Lending Test is rated Satisfactory.
Lending levels reflect good responsiveness to assessment area credit needs.
The institution originated a substantial majority of loans within its assessment area.
The geographic distribution of loans reflects adequate penetration throughout the assessment
area.
The distribution of borrowers reflects adequate penetration among retail customers of
different income levels and business customersof different sizes.
The institution makes limited use of innovative and/or flexible lending practices in order to
serve assessment area credit needs.
The institution made an adequate level of community development loans.
2
The Investment Test is rated High Satisfactory.
The institution has a significant level of qualified community development investments and
grants, occasionally in a leadership position, particularly those that are not routinely provided
by private investors.
The institution exhibits good responsiveness to credit and community economic development
needs.
The institution occasionally uses innovative and/or complex investments to support
community development initiatives.
The Service Test is rated High Satisfactory.
The institution’s delivery systems are accessible to essentially all portions of the institution’s
assessment area.
To the extent changes have been made, the institution’s record of opening and closing
branches has improved the accessibility of its delivery systems, particularly in low- and
moderate-income geographies and to low- and moderate-income individuals.
Services, including business hours, do not vary in a way that inconveniences portions of the
assessment area, particularly low- and moderate-income geographies and individuals.
The institution provides a relatively high level of community development services.
3
SCOPE OF EVALUATION
General Information
This performance evaluation, conducted jointly by the Federal Deposit Insurance Corporation
(FDIC) and the Commonwealth of Massachusetts Division of Banks (DOB), covers the period
from the prior evaluation, dated February 12, 2018, to the current evaluation dated April 20,
2021. Examiners used the Interagency Large Institution Community Reinvestment Act (CRA)
Examination Procedures. These procedures evaluate the institution’s CRA performance pursuant
to three tests: Lending, Investment, and Service.
The Lending Test considered the institution’s performance according to the following criteria.
Lending activity
Assessment area concentration
Geographic distribution
Borrower profile
Innovative and flexible lending practices
Community development loans
The Investment Test considered the following criteria.
Number and dollar amount of qualified investments
Responsiveness to credit and community development needs
Innovativeness or complexity of qualified investments
The Service Test considered the following criteria.
Accessibility of delivery systems
Changes in branch locations
Reasonableness of business hours and services
Community development services
An institution must achieve at least a Satisfactory rating on the Lending Test to obtain an overall
Satisfactory rating. This evaluation does not include any lending activity performed by affiliates.
Loan Products Reviewed
Examiners determined that the bank’s major product lines are home mortgage and small business
loans. This conclusion considered the institution’s business strategy and the number and dollar
volume of loans originated during the evaluation period. No other loan types, such as small farm
or consumer loans, represent a major product line; therefore, examiners did not present these
product lines in the evaluation.
4
Examiners analyzed originated home mortgage and small business loans from January 1, 2018,
through December 31, 2020 reported on Florence Bank’s 2018, 2019, and 2020 Home Mortgage
Disclosure Act (HMDA) Loan Application Register (LARs) and CRA loan registers. Examiners
presented lending data for all years in the assessment area concentration section of the Lending
Test, but presented only 2019 and 2020 lending data in the geographic distribution and borrower
profile tables. The evaluation emphasized 2019 lending performance because it is the most
recent year for which aggregate data is available.
Florence Bank originated 433 home mortgage loans totaling $99.8 million in 2018; 450 loans
totaling $99.0 million in 2019; and 475 loans totaling $117.0 million in 2020. Examiners
compared the institution’s home mortgage lending performance from 2018, 2019, and 2020 to
2015 American Community Survey (ACS) demographic data and 2018 and 2019 HMDA
aggregate data. The bank originated 120 small business loans totaling $21.5 million in 2018; 127
loans totaling $28.9 million in 2019; and 165 loans totaling $32.7 million in 2020. Examiners
compared the bank’s small business lending performance from 2018, 2019, and 2020 to D&B
demographic data for each respective year and to CRA aggregate data for 2018 and 2019.
Examiners placed more weight on Florence Bank’s home mortgage lending due to higher
origination activity compared to small business lending during the evaluation period. However,
according to management, the bank has initially emphasized commercial lending at its new
Hampden County branches. Examiners also focused on the number of loans, rather than dollar
volume, when assessing the institution’s performance, as it better indicates the number of
individuals and businesses served.
Under the Lending Test, examiners also evaluated the bank’s community development lending
and innovative and flexible lending from February 12, 2018 through April 20, 2021. Under the
Investment and Service Tests, examiners considered qualified investments, community
development services, and retail services during the same period.
5
DESCRIPTION OF INSTITUTION
Background
Incorporated in 1873, Florence Bank is a state-chartered savings bank owned by Florence
Bank Holding Co, Inc., a one-bank holding company also headquartered in Florence,
Massachusetts (MA). The FDIC and the DOB last evaluated the institution’s CRA
performance on February 12, 2018 and assigned a Satisfactory rating from the FDIC and a
High Satisfactory rating from the DOB using Intermediate Small Institution CRA
Examination Procedures.
Operations
Florence Bank has its main office at 85 Main Street in Florence, (MA) and 11 full-service
branches located in Amherst, Belchertown, Chicopee, Easthampton, Granby, Hadley,
Northampton (2), Springfield, West Springfield, and Williamsburg. Prior to opening the
West Springfield branch in late 2017, the bank’s branches were limited to Hampshire
County. The bank added the Springfield and Chicopee branches, both located in Hampden
County, since the previous examination. Both the Springfield and Chicopee branches are
located in moderate-income census tracts.
The bank offers traditional loan products including home mortgage, commercial, and
consumer loans. Additionally, it offers a variety of deposit products, including checking and
savings accounts for consumers and businesses.
Automated teller machines (ATM) are located at each banking office. The bank also has
seven stand-alone ATMs located in Amherst, Cummington, Northampton (3), Southampton,
and Springfield, and it operates a drive-up branch in Florence. Additional services include
online and mobile banking.
Ability and Capacity
Florence Bank reported total assets of $1.7 billion as of December 31, 2020, which includes total
loans of $1.0 billion. The bank reported total deposits of $1.5 billion as of December 31, 2020
and $280.0 million average total securities from December 31, 2017 to December 31, 2020. The
institution is primarily a residential lender, with loans secured by residential real estate
accounting for 69.4 percent of the loan portfolio. Commercial loans, consisting of loans secured
by nonfarm nonresidential real estate and commercial and industrial loans, make up 28.2 percent
of the portfolio.
The following table illustrates Florence Bank’s loan portfolio distribution as of December 31,
2020.
6
Loan Portfolio Distribution as 12/31/2020
Loan Category $(000s) %
Construction, Land Development, and Other Land Loans 23,992 2.3
Secured by Farmland 0 0.0
Secured by 1-4 Family Residential Properties 674,458 65.6
Multifamily (5 or more) Residential Properties 39,345 3.8
Secured by Nonfarm Nonresidential Properties 248,771 24.2
Total Real Estate Loans 986,566 96.0
Commercial and Industrial Loans 41,081 4.0
Agricultural Production and Other Loans to Farmers 0 0.0
Consumer Loans 177 0.0
Obligations of State and Political Subdivisions in the U.S. 0 0.0
Other Loans 104 0.0
Lease Financing Receivable (net of unearned income) 0 0.0
Less: Unearned Income 0 0.0
Total Loans 1,027,928 100.0
Source Reports of Condition and Income
Examiners did not identify any financial or legal impediments that would limit the
institution’s ability to help meet its assessment area credit needs.
7
DESCRIPTION OF ASSESSMENT AREA
The CRA requires financial institutions to define one or more assessment areas within which
examiners will evaluate its CRA performance. Florence Bank designated one single assessment
area to include the following cities and towns located in the Springfield, MA Metropolitan
Statitical Area (MSA):
Franklin County: Ashfield, Buckland, Deerfield, Greenfield, Montague, Shutsebury, and
Whately
Hampden County: Agawam Town, Chicopee, East Longmeadow, Hampden, Holyoke,
Longmeadow, Ludlow, Southwick, Springfield, West Springfield, Westfield, and Wilbraham
Hampshire County: Amherst, Belchertown, Chesterfield, Easthampton, Granby, Hadley,
Hatfield, Huntington, Northampton, Pelham, South Hadley, Southampton, Ware, Westhampton,
Williamsburg, and Worthington
Economic and Demographic Data
Florence Bank’s assessment area includes 143 census tracts. The following indicates these
census tracts by income designation according to 2015 ACS data.
25 low-income census tracts,
23 moderate-income census tracts,
44 middle-income census tracts,
47 upper-income census tracts, and
4 census tracts without an income designation.
Hampden County contains 45 of the assessment area’s 48 total low- and moderate-income
census tracts, and 42 are specifically within Springfield, Holyoke, and Chicopee. The
geographic distribution criterion of the Lending Test focuses on bank performance in lending
within the assessment area’s low- and moderate-income census tracts. With such a high
concentration of these census tracts in Hampden County, the bank’s historical branch network
and business focus on Hampshire County, having only recently opened branches in Hampden
County, affects its ability to lend in most of the area’s low- and moderate-income census tracts.
The following table illustrates select demographic characteristics of the assessment area.
8
Demographic Information of the Assessment Area
Demographic Characteristics # Low
% of #
Moderate
% of #
Middle
% of #
Upper
% of #
NA*
% of #
Geographies (Census Tracts) 143 17.5 16.1 30.8 32.9 2.8
Population by Geography 640,390 14.5 15.7 32.1 34.9 2.8
Housing Units by Geography 260,764 14.2 16.4 35.1 34.2 0.1
Owner-Occupied Units by Geography 149,502 4.9 12.8 36.7 45.6 0.0
Occupied Rental Units by Geography 92,192 27.8 21.1 33.5 17.3 0.3
Vacant Units by Geography 19,070 21.5 22.0 30.1 25.9 0.4
Businesses by Geography 42,605 13.7 15.1 31.1 39.2 0.8
Farms by Geography 1,366 3.1 5.7 37.8 53.4 0.0
Family Distribution by Income Level 152,004 24.9 15.9 18.1 41.1 0.0
Household Distribution by Income
Level
241,694 27.4 14.8 15.6 42.3 0.0
Median Family Income MSA - 44140
Springfield, MA MSA
$67,203 Median Housing Value $210,265
Median Gross Rent $860
Families Below Poverty Level 12.1%
Source 2015 ACS and 2020 D&B Data. Due to rounding, totals may not equal 100.0%
(*) The NA category consists of geographies that have not been assigned an income classification.
The number of families below the poverty level is relatively high (12.1 percent), indicating a
need for community services targeted to low-income individuals. Low- and moderate-income
census tracts have limited owner-occupied units, as the majority of housing units are rented. In
addition, the median housing value is approximately three times the median family income.
Furthermore, there is a designated opportunity zone in Easthampton designated to help lowincome
individuals.
Examiners used the FFIEC-updated median family income level to analyze home mortgage loans
under the Borrower Profile criterion. The following table presents the low-, moderate-, middle-,
and upper-income categories based on 2018, 2019, and 2020 FFIEC-updated median family
incomes. Franklin County switched from a nonmetropolitan area in 2018 to becoming part of the
Springfield, MA MSA in 2019.
9
Median Family Income Ranges
Median Family Incomes Low
<50%
Moderate
50% to <80%
Middle
80% to <120%
Upper
Springfield, MA MSA Median Family Income (44140)
2018 ($73,900) <$36,950 $36,950 to <$59,120 $59,120 to <$88,680
2019 ($76,700) <$38,350 $38,350 to <$61,360 $61,360 to <$92,040
2020 ($76,900) <$38,450 $38,450 to <$61,520 $61,520 to <$92,280
Source FFIEC
U.S. Bureau of Labor Statistics data indicated that the unemployment rate from 2018 to January
2021 for the Springfield, MA MSA averaged 6.2 percent, higher than the statewide and national
unemployment rate of 5.3 percent. Unemployment rates increased during the evaluation period
due to economic effects of the COVID-19 pandemic.
The service industry represents the largest portion of assessment area businesses at 40.2 percent;
followed by non-classifiable establishments (15.5 percent); retail trade (13.4 percent); finance,
insurance, real estate (9.3 percent); and construction (7.2 percent). The analysis of small business
loans under the Borrower Profile criterion in the Lending Test compares the distribution of small
business loans to the distribution of business by gross annual revenue (GAR) level. The
following are the GARs for the area’s businesses based on 2018 D&B data:
83.6 percent have GARs of $1.0 million or less;
5.4 percent have GARs of more than $1.0 million;
11.0 percent have unknown revenues.
Competition
Competition is high for deposits within the assessment area. According to the June 30, 2020
FDIC Deposit Market Share data, 18 institutions operate 198 branches within the Springfield,
MA MSA. The presence of large national institutions creates significant competition.
Specifically, the top three depository institutions were Bank of America, TD Bank, and People’s
United Bank, which operate a total of 50 offices with a combined deposit market share of 33.1
percent. Community banks with the largest deposit market share include Peoplesbank, Westfield
Bank, and Florence Bank. Peoplesbank operates 19 offices with a market share of 9.8 percent,
Westfield Bank operates 23 offices with a market share of 9.0 percent, and Florence Bank
operates 12 offices with a 7.0 percent market share.
FDIC Deposit Market Share data at the county level highlights the bank’s stronghold in
Hampshire County. Specifically, Florence Bank ranked 1st out of 14 institutions in Hampshire
County, holding 25.0 percent of all deposits as of June 30, 2020. In Hampden County; however,
the bank ranks 14th out of 16 institutions, holding only 0.4 percent of all deposits. Hampden
County has six institutions with more than an 11.0 percent deposit market share, highlighting the
higher level of competition Florence Bank faces in Hampden County relative to Hampshire
County.
10
The institution also faces significant competition for home mortgage loans. According to 2019
HMDA aggregate data, 345 lenders originated or purchased 16,359 loans in the assessment area.
Florence Bank ranked 10th with a market share of 2.7 percent. The top three lenders were
Citizens Bank, N.A.; Quicken Loans; and Peoplesbank; but even these top lenders had market
shares under 5.0 percent, highlighting the high level of competition from numerous lenders.
A review of 2019 HMDA aggregate data by counties in the assessment area highlights Florence
Bank’s mortgage lending stronghold in Hampshire County and the substantial competition it
faces lending in Hampden County. The bank ranked 1st among 214 lenders that originated or
purchased loans in Hampshire County, with a 7.5 percent market share. In Hampden County,
however, the bank ranked 35th among 302 lenders, with a 0.9 percent market share. These
statistics reflect the bank’s competitive advantage in Hampshire County, where it has had a
significant physical branch presence for many years. Conversely, HMDA market share data also
highlights challenges faced by Florence Bank to lend in Hampden County, which has many
lenders, including larger community banks headquartered in the county, and in which the bank
has only recently opened branches.
The small business lending market is also highly competitive. According to 2019 CRA
aggregate data, large national institutions control a large portion of the small business lending
market. For example, the top three institutions, American Express, JPMorgan Chase, and
Citibank, have a combined market share of 42.1 percent in the full Springfield, MA MSA. The
top three community banks for small business lending are Westfield Bank, Florence Bank, and
Easthampton Savings Bank, with Florence Bank ranking 19th with a 0.8 percent market share out
of 100 reporting lenders.
Community Contact
As part of the evaluation process, examiners contact organizations active in the assessment area
to understand and assess the credit and community development needs and opportunities within
the assessment area. This information helps examiners determine the responsiveness of local
financial institutions to community development needs.
Examiners contacted a local organization that focuses on economic development and
revitalization of low- and moderate-income areas. The organization’s contact emphasized the
need for development in low- and moderate-income areas, in particular Holyoke. In addition, the
contact explained the importance of local institutions collaborating with area non-profits to build
trust in the banking system among low- and moderate-income individuals. The contact further
noted that financial institutions in the area have been responsive in supplying donations to
benefit economic development, but additional work can be done.
Credit and Community Development Needs and Opportunities
Based on information from the community contact, bank management, and demographic data,
examiners determined that affordable housing, economic development, revitalization of low- and
moderate-income portions of Springfield and Holyoke, and community services for low- and
moderate-income individuals are all needed in the assessment area. Relatively high levels of
11
poverty and unemployment demonstrate a need for community services and economic
development. In addition, high property values demonstrate needs for affordable housing.
Furthermore, the large percentage of businesses with GARs of less than $1.0 million
demonstrates potential for economic development within the assessment area. Last, the cities of
Springfiled and Holyoke have opportunities for revitalization and stabilization; both cities
contain a fair number of low- and moderate-income census tracts.
12
CONCLUSIONS ON PERFORMANCE CRITERIA
LENDING TEST
Florence Bank’s Lending Test rating is Satisfactory. Adequate performance in the Geographic
Distribution and Borrower Profile, along with an adequate level of Community Development Loans
supports the rating.
Lending Activity
The institution’s lending levels reflect good responsiveness to assessment area credit needs. Of all
state-chartered institutions, Florence Bank’s home mortgage market share ranked 3rd in 2019,
illustrating good responsiveness to assessment area credit needs. In 2019 and 2020, Florence Bank
originated or purchased 893 home mortgage loans totaling $203.6 million and 276 small business
loans totaling $57.7 million inside the assessment area.
The Description of Assessment Area section previously discussed the bank’s market share rankings
for home mortgage and small business lending. For home mortgage lending, the institutions ranked
above Florence Bank in overall market share in 2019 included large financial institutions and
mortgage companies. Similarly, for small business lending, many of the institutions that ranked
above Florence Bank in 2019 were large national banks and credit card companies.
In addition, the institution increased its origination activity for both product types in each successive
year of the evaluation period, further demonstrating good responsiveness to assessment area credit
needs. Notably, Florence Bank originated more than half of its small business loans in Hampden
County, reflecting its strategic focus on commercial lending after opening three branches in
Hampden County since late 2017. Approximately two-thirds of the bank’s HMDA loans were
made in Hampshire County. Franklin County contains the smallest share of both the bank’s
HMDA and small business loans, with market share reports reflecting a much smaller number of
loans by all lenders in Franklin County compared to Hampshire and Hampden Counties.
Assessment Area Concentration
The institution originated a substantial majority of loans within its assessment area. The table
below highlights Florence Bank’s lending inside and outside the assessment area by loan
category.
13
Lending Inside and Outside of the Assessment Area
Number of Loans Dollar Amount of Loans $(000s)
Loan Category Inside Outside Total Inside Outside Total
# % # % # $ % $ % $(000s)
Home Mortgage
2018 412 95.2 21 4.9 433 90,510 90.7 9,290 9.3 99,800
2019 434 96.4 16 3.6 450 91,809 92.8 7,146 7.2 98,955
2020 459 96.6 16 3.4 475 111,749 95.5 5,218 4.5 116,967
Subtotal 1,305 96.1 53 3.9 1,358 294,068 93.1 21,654 6.9 315,722
Small Business
2018 115 95.8 5 4.2 120 20,150 93.5 1,399 6.5 21,549
2019 118 92.9 9 7.1 127 26,677 92.4 2,180 7.6 28,857
2020 158 95.8 7 4.2 165 31,005 94.9 1,671 5.1 32,676
Subtotal 391 94.9 21 5.1 412 77,832 93.7 5,250 6.3 83,082
Total 1,696 95.8 74 4.2 1,770 371,900 93.3 26,904 6.7 398,804
Source Bank Data. Due to rounding, totals may not equal 100.0%
Geographic Distribution
The geographic distribution of loans reflects adequate dispersion throughout the assessment area.
Despite poor home mortgage lending performance, examiners gave weight to the bank’s
adequate small business lending performance. With a vast majority of low- and moderateincome
census tracts in Hampden County, the bank’s recent branch expansion to Hampden
County mitigates the impact of home mortgage lending performance. Examiners focused on the
percentage by number of loans in low- and moderate-income census tracts.
Home Mortgage Loans
The geographic distribution of home mortgage loans reflects poor dispersion throughout the
assessment area. Examiners gave more weight to the comparison of 2019 bank performance to
2019 aggregate data, due to 2020 aggregate data not being available.
The following table shows that the bank’s 2019 performance in low-income census tracts trails
that of aggregate lending by 3.3 percentage points and the percentage of owner-occupied housing
units by 1.7 percentage points. In 2020, bank lending decreased slightly, trailing the percentage
of owner-occupied units in low-income census tracts by 2.5 percentage points. However, market
share data helps mitigate the lower percentage of bank loans in in low-income census tracts. In
2019 the institution ranked 25th out of 128 lenders for lending in low-income census tracts, with
a 1.3 percent market share.
In moderate-income census tracts, the bank trailed aggregate lending and the percentage of
owner-occupied units in 2019. In 2020, the bank lending again declined slightly, continuing to
trail the percentage of owner-occupied units in moderate-income census tracts. Market share
14
data, however, helps mitigate the bank’s low percentage of loans to moderate-income census
tracts. In 2019, the institution ranked 41st out of 174 lenders for lending in moderate-income
census tracts, with a 0.7 percent market share.
As noted in the Description of Institution and Description of Assessment Area, Florence Bank
has historically only had branch locations in Hampshire County, and only recently opened
branches in Hampden County. Hampden County contains 45 of the assessment area’s 48 total
low- and moderate-income census tracts, but over 60 percent of the bank’s home mortgage
lending occurred in Hampshire County in both 2019 and 2020. As a result, any analysis looking
at the bank’s entire assessment area skews towards Hampshire County, where there are no lowand
just one moderate-income census tract in which the bank could lend.
When analyzing performance only in the Hampden County portion of the assessment area, the
bank’s level of lending in low- and moderate-income census tracts more closely matches
aggregate lending. In 2019, within the Hampden County portion of the assessment area, the
bank originated 12.4 percent of its loans in low-income census tracts and 16.2 percent of its
loans in moderate-income census tracts. This is comparable to aggregate performance, where
8.7 percent of loans were originated or purchased within low-income census tracts and 20.2
percent of loans were originated or purchased within moderate-income census tracts. The bank’s
performance in these geographies decreased in 2020, with 10.0 percent of loans from lowincome
census tracts and 9.0 percent of loans from moderate-income census tracts.
The bank’s market share in low- and moderate-income census tracts in the Hampden County
portion of the assessment area is comparable to its overall market ranking. In 2019, Florence
Bank ranked 35th overall within the Hampden County portion of its assessment area, with a
market share of 0.9 percent. Within the low- and moderate-income census tracts of Hampden
County, the bank ranked 25th and 39th with market shares of 1.3 percent and 0.7 percent,
respectively. Furthermore, the bank’s two branches opened since the previous examination are
located in moderate-income census tracts in Hampden County, indicating the institution’s efforts
to expand its lending in these areas. Considering all performance context, the bank’s poor home
mortgage lending in low- and moderate-income census tracts does not carry much weight when
determining the Lending Test rating and conclusions.
15
Geographic Distribution of Home Mortgage Loans
Tract Income Level
% of Owner-
Occupied
Housing Units
Aggregate
Performance
% of #
# % $(000s) %
Low
2019 4.9 6.5 14 3.2 2,687 2.9
2020 4.9 -- 11 2.4 1,824 1.6
Moderate
2019 12.8 15.1 18 4.1 3,712 4.0
2020 12.8 -- 10 2.2 1,547 1.4
Middle
2019 36.7 35.7 182 41.9 34,458 37.5
2020 36.7 -- 166 36.2 35,494 31.8
Upper
2019 45.6 42.6 219 50.5 50,563 55.1
2020 45.6 -- 271 59.0 62,841 56.2
Not Available
2019 0.0 0.0 1 0.2 387 0.4
2020 0.0 -- 1 0.2 10,043 9.0
Totals
2019 100.0 100.0 434 100.0 91,809 100.0
2020 100.0 -- 459 100.0 111,749 100.0
Source 2015 ACS; Bank Data, 2019 HMDA Aggregate Data, "--" data not available.
Due to rounding, totals may not equal 100.0%
Small Business Loans
The geographic distribution of small business loans reflects adequate dispersion throughout the
assessment area. The following table shows that, in 2019, bank lending in low-income census
tracts trailed the aggregate by just 1.5 percentage points and the demographic comparator by 2.7
percentage points. In 2020, the institution’s performance declined by 2.8 percentage points.
In 2019, the institution’s lending performance in moderate-income census tracts was comparable
to both the aggregate and the demographic comparator. In 2020, the institution’s level of
lending in moderate-income census tracts increased by 1.8 percentage points. Considering
context previously noted about competition and the bank’s physical presence and historical focus
primarily in Hampshire County, these levels reflect positive performance.
16
Geographic Distribution of Small Business Loans
Tract Income Level % of
Businesses
Aggregate
Performance
% of #
# % $(000s) %
Low
2019 13.7 12.5 13 11.0 2,026 7.6
2020 13.7 -- 13 8.2 4,739 15.3
Moderate
2019 15.1 15.5 18 15.3 3,430 12.9
2020 15.1 -- 27 17.1 8,202 26.5
Middle
2019 31.2 30.6 37 31.4 9,109 34.1
2020 31.1 -- 53 33.5 7,223 23.3
Upper
2019 39.2 41.2 49 41.5 12,077 45.3
2020 39.2 -- 62 39.2 9,969 32.2
Not Available
2019 0.8 0.2 1 0.8 35 0.1
2020 0.8 -- 3 1.9 872 2.8
Totals
2019 100.0 100.0 118 100.0 26,677 100.0
2020 100.0 -- 158 100.0 31,005 100.0
Source 2019 & 2020 D&B Data; Bank Data; 2019 CRA Aggregate Data, "--" data not available.
Due to rounding, totals may not equal 100.0%
Borrower Profile
The distribution of borrowers reflects adequate penetration among individuals of different
income levels and businesses of different sizes. The institution’s adequate performances in
home mortgage and small business lending support this conclusion. Examiners focused on the
percentage by number of home mortgage loans to low- and moderate-income borrowers and
small business loans to businesses with GARs of $1.0 million or less.
Home Mortgage Loans
The distribution of home mortgage loans to individuals of different income levels is adequate.
According to 2019 data, the institution trailed aggregate by 1.3 percentage points in home
mortgage loans to low-income borrowers and by 7.7 percent in home mortgage loans to
moderate-income borrowers; however, the high performing lenders in the assessment area ahead
of Florence Bank are national banks, credit unions, and mortgage companies. In 2019, the
institution ranked 16th of 118 lenders in lending to low-income borrowers with a market share of
2.2 percent. The institution ranked 19th in lending to moderate-income borrowers with a market
share of 1.7 percent.
17
The institution also trailed the total percentage of low-income borrowers; however, 12.1 percent
of families within the assessment level are below the poverty level and with a median housing
value of $210,265, and these families would likely not qualify for a mortgage. The 2020
aggregate data was not available at the time of the review; however, the percentage of loans to
low-income borrowers decreased by 2.7 percentage points.
Distribution of Home Mortgage Loans by Borrower Income Level
Borrower Income Level % of Families
Aggregate
Performance
% of #
# % $(000s) %
Low
2019 24.9 7.1 25 5.8 2,625 2.9
2020 24.9 -- 14 3.1 1,259 1.1
Moderate
2019 15.9 22.2 63 14.5 9,029 9.8
2020 15.9 -- 69 15.0 11,050 9.9
Middle
2019 18.1 23.7 106 24.4 19,550 21.3
2020 18.1 -- 120 26.1 21,811 19.5
Upper
2019 41.1 30.9 193 44.5 47,371 51.6
2020 41.1 -- 225 49.0 57,390 51.4
Not Available
2019 0.0 16.2 47 10.8 13,234 14.4
2020 0.0 -- 31 6.8 20,240 18.1
Totals
2019 100.0 100.0 434 100.0 91,809 100.0
2020 100.0 -- 459 100.0 111,749 100.0
Source 2015 ACS; Bank Data, 2019 HMDA Aggregate Data, "--" data not available.
Due to rounding, totals may not equal 100.0%
Small Business Loans
The distribution of small business loans reflects adequate penetration of loans to businesses with
GARs of $1.0 million or less. The following table shows that 38.1 percent of small business
loans originated in 2019 were to businesses with GARs of $1.0 million or less. This lending is
comparable to the aggregate performance.
In 2020, the percentage of small business loans originated by the institution decreased to 16.5
percent. Despite the percentage of loans being lower than the total percentage of businesses with
GARs of $1.0 million or less within the assessment area, the institution performance is
reasonable. The decrease in the institution’s performance between 2019 and 2020 can be
18
explained by the large amount of Paycheck Protection Program (PPP) loans, which do not
require GAR reporting and are reflected in the Revenue Not Available category.
Distribution of Small Business Loans by Gross Annual Revenue Category
Gross Revenue Level % of
Businesses
Aggregate
Performance
% of #
# % $(000s) %
<=$1,000,000
2019 82.8 41.6 45 38.1 8,119 30.4
2020 83.6 -- 26 16.5 5,027 16.2
>1,000,000
2019 5.8 -- 73 61.9 18,558 69.6
2020 5.4 -- 59 37.3 16,369 52.8
Revenue Not Available
2019 11.4 -- 0 0.0 0 0.0
2020 11.0 -- 73 46.2 9,609 31.0
Totals
2019 100.0 100.0 118 100.0 26,677 100.0
2020 100.0 -- 158 100.0 31,005 100.0
Source 2019 & 2020 D&B Data; Bank Data; 2019 CRA Aggregate Data; "--" data not available.
Due to rounding, totals may not equal 100.0%
Innovative and Flexible Lending
The institution makes limited use of innovative and flexible lending practices in order to serve
assessment area credit needs. Florence Bank offers several programs designed to assist low- and
moderate-income individuals and first-time homebuyers with low minimum down payments,
discounted interest rates, and no mortgage insurance requirements. The institution also offers
several loan programs designed to provide credit to small businesses, including programs
offering government guarantees.
The institution originated 115 innovative and flexible loans, totaling approximately $31.1
million, to individuals and businesses during the evaluation period. Of these innovative and
flexible loans, the institution originated 20 loans totaling approximately $4.0 million under
affordable housing programs. The institution originated the remaining 95 loans totaling
approximately $27.2 million under small business lending programs. Of the 95 loans under the
small business lending programs, 77 were PPP loans for approximately $11.9 million.
19
Innovative or Flexible Lending Programs
Type of Program
2018 2019 2020 Totals
# $(000s) # $(000s) # $(000s) # $(000s)
5/1 ARM FTHB 1 164 1 171 2 486 4 821
Home Possible 1 165 0 0 1 174 2 339
MassHousing Loans with No
Mortgage Insurance
1 165 0 0 0 0 1 165
MassHousing 3 533 0 0 5 886 8 1,419
USDA 1 293 2 400 2 525 5 1,218
Subtotal Residential Loans 7 1,320 3 571 10 2,071 20 3,962
SBA 7(a) 1 172 0 0 1 220 2 392
SBA 504 2 1,347 4 1,060 3 2,650 9 5,057
SBA Express 1 75 1 115 1 250 3 440
PPP 0 0 0 0 77 11,922 77 11,922
Tax-Exempt Bonds 0 0 0 0 4 9,374 4 9,374
Subtotal Commercial Loans 4 1,594 5 1,175 86 24,416 95 27,185
Totals 11 2,914 8 1,746 96 26,487 115 31,147
Source Bank Records
The following highlights the various innovative and flexible loan programs offered by the bank.
Home Mortgage Lending Programs
5/1 Adjustable Rate Mortgage (ARM) for First-Time Homebuyer (FTHB): This product is
designed to assist first-time homebuyers who may not qualify for a traditional mortgage by
offering a 5/1 ARM with lower initial rates, flexible down payment and income
qualifications, no points, and a credit towards closing costs.
Freddie Mac Home Possible: The Home Possible program facilitates home ownership
among low- and moderate-income individuals by offering loans with low down payments,
high loan-to-value limits, and reduced mortgage insurance costs.
MassHousing Loan program: Through the Massachusetts Housing Finance Agency, Florence
Bank offers 30-year, fixed-rate financing for the purchase on a one-to-four family properties
for first-time homebuyers that meet income and asset limitations. Borrowers may finance up
to 97.0 percent of the sales price or the appraised value, whichever is less, on a single-family
home.
U.S Department of Agriculture (USDA) Guaranteed: This program assists approved lenders
in providing low- and moderate-income households the opportunity to build, rehabilitate,
improve, or relocate a dwelling as their primary residence in eligible rural areas.
20
Small Business Lending Programs
Small Business Administration (SBA) 7(a): Florence Bank is a preferred lender for the SBA
7(a) loan program. This loan product is the SBA’s primary program for providing financing
to small businesses; it offers small businesses a maximum loan amount of $5.0 million.
SBA 504 Certified Development Company Program - The SBA 504 Program is an economic
development program offering small business financing while creating jobs and promoting
job growth. The program provides approved small businesses with long-term, fixed-rate
financing for major fixed assets.
SBA Express Loan Program: This program offers borrowers an accelerated turnaround time
of up to 36 hours for approval on loan amounts up to $350,000. The SBA provides a
maximum guaranty of 50.0 percent, and no collateral is required for loans of $25,000 or less.
Paycheck Protection Program: The PPP provides low-cost, forgivable loans to qualifying
small businesses to help cover payroll costs, mortgage interest, rent, and utilities during
periods of severe business disruption or temporary closure caused by the COVID-19
pandemic.
Tax-Exempt Bonds: The bank offers financing to businesses through the Massachusetts
Development Finance Agency’s revenue bonds. This flexible financing option is available
for non-profits, affordable housing developers, municipal entities, manufacturers, and
environmental enterprises. This program offers low rates and flexible terms to support
economic development.
Community Development Lending
Florence Bank made an adequate level of community development loans. The bank originated
23 community development loans, totaling approximately $28.1 million, inside the assessment
area during the evaluation period. This total includes eight loans for $7.8 million that benefit a
broader statewide and regional area including the bank’s assessment area. In addition, the bank
originated a loan totaling approximately $940,000 outside the assessment area. This represents a
significant decrease in community development loan activity by dollar amount but an increase in
the number of loans since the prior evaluation. At the prior evaluation, the bank originated 14
community development loans, totaling $43.1 million.
The current level of activity represents 1.9 percent of average total assets and 2.7 percent of
average total loans since the prior CRA evaluation. This level of activity is a decrease from the
last evaluation when the level of activity represented 3.5 percent of average total assets and 4.6
percent of average total loans. The following table details the bank’s community development
lending by community development purpose and by year.
21
Community Development Lending
Activity Year
Affordable
Housing
Community
Services
Economic
Development
Revitalize or
Stabilize Totals
# $(000s) # $(000s) # $(000s) # $(000s) # $(000s)
2018 (Partial) 0 0 6 4,945 0 0 0 0 6 4,945
2019 1 30 6 5,288 0 0 5 12,857 12 18,175
2020 0 0 4 4,275 0 0 0 0 4 4,275
YTD 2021 0 0 1 750 0 0 0 0 1 750
Total 1 30 17 15,258 0 0 5 12,857 23 28,145
Source Bank Data
The following originations represent community development loans made to organizations and
corporations that benefit towns inside the assessment area and the surrounding neighborhoods:
In 2019, the institution originated a $2.6 million loan to fund the renovation and restoration
of an abandoned mill building inside an opportunity zone located in Easthampton. The
building was converted into a commercial space. The loan supports revitalization and
stabilization.
In 2018, the institution originated a $2.1 million loan to provide bridge funding to facilitate
the procurement of New Market Tax Credits to construct a childcare learning facility in
Springfield. The facility is located in a low-income tract and primarily serves low- and
moderate-income families.
In 2020, the institution extended a line of credit for $600,000 to fund the renovation and
conversion of a single-family home in Holyoke. The property was converted into a 16-unit
substance abuse facility that is geared towards treating the Lesbian, Gay, Bisexual,
Transgender, and Queer (LGBTQ) community. The loan primarily supports the provision of
community services targeted to low- and moderate-income individuals.
In 2020 and 2021, the bank originated two PPP loans with a combined amount of $1.9
million to an organization that provides medical and supportive services to disabled
individuals in Western Massachusetts and parts of Connecticut. Individuals who qualify for
Mass Health receive services completely free. The organization primarily serves low- and
moderate-income individuals.
INVESTMENT TEST
Florence Bank’s Investment Test rating is High Satisfactory. The significant level of qualified
investments and good responsiveness to the needs of the community primarily support this
conclusion.
22
Investment Activity
The institution has a significant level of qualified community development investments and
grants, occasionally in a leadership position, particularly those that are not routinely provided by
private investors.
Florence Bank’s qualified investments during the evaluation period totaled $4.0 million, which is
1.4 percent of its average total securities and 0.3 percent of its average total assets. These ratios
have increased since the prior evaluation values of 1.3 percent and 0.2 percent respectively. This
performance is comparable to similarly situated institutions by asset size and location that
received the same performance conclusion in their most recent CRA evaluation. The majority of
the bank’s qualified donations and grants supported community services. The following table
illustrates the bank’s qualified investments, grants, and donations.
Qualified Investments
Activity Year
Affordable
Housing
Community
Services
Economic
Development
Revitalize or
Stabilize Totals
# $(000s) # $(000s) # $(000s) # $(000s) # $(000s)
Prior Period 12 2,590 0 0 0 0 0 0 12 2,590
2018 0 0 0 0 1 125 0 0 1 125
2019 0 0 0 0 1 375 0 0 1 375
2020 0 0 0 0 0 0 0 0 0 0
YTD 2021 0 0 0 0 0 0 0 0 0 0
Subtotal 12 2,590 0 0 2 500 0 0 14 3,090
Qualified Grants
& Donations 7 22 150 502 8 24 40 316 205 863
Total 19 2,612 150 502 10 524 40 316 219 3,953
Source Bank Data
The institution has approximately $3.1 million in qualified equity investments. Since the
previous evaluation, new investments represent $500,000. All prior period equity investments
helped provide affordable housing, and all current period equity investments helped economic
development. The following are notable examples of qualified investments and donations.
Equity and Debt Security Investments
Current Period Investments
The institution invested $500,000 in a loan fund, which included SBA loans to finance small
businesses that created jobs for low- and moderate-income individuals.
Prior Period Investments
The institution has $1.0 million outstanding invested in mortgage-backed securities
collateralized by home mortgage loans made to low- and moderate-income individuals.
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The institution has $1.6 million outstanding invested in a mutual fund which identifies and
purchases securities that support community services that benefit low- and moderate-income
individuals and census tracts within the bank’s assessment area.
Charitable Contributions
The institution provided approximately $90,000 to a community development organization
that offers services and programs that benefit low- and moderate-income individuals through
affordable housing and economic opportunities.
The institution donated approximately $107,000 to two organizations that provide services
and support for those in poverty in Hampshire County.
The institution donated approximately $30,000 to provide affordable housing to low- and
moderate-income individuals within the Springfield, MA MSA.
Responsiveness to Credit and Community Development Needs
The institution exhibits good responsiveness to credit and community economic development
needs. The institution’s qualified investments, especially donations, have community
development purposes that benefit communities throughout the entire assessment area that
address key community development needs. The majority of the institution’s qualified
investments and donations by dollar amount and count benefit affordable housing and
community service respectively. Additionally, needs such as economic development and
revitalization and stabilization are also met by qualified investments.
Community Development Initiatives
The institution occasionally uses innovative and complex investments to support community
development initiatives. The institution used both grants and investments in loan funds to
support community development needs; however, it makes limited use of innovative or complex
investment vehicles. The institution primarily relies on mortgage backed securities and
donations to make qualified investments.
24
SERVICE TEST
Florence Bank’s Service Test rating is High Satisfactory. The institution’s accessibility of
delivery systems, changes in branch location, and level of community development services
primarily support this conclusion.
Accessibility of Delivery Systems
Florence Bank’s service delivery systems are accessible to essentially all portions of the
institution’s assessment area. The following table shows the institution’s branch structure and
ATM network by census tract income level.
Branch and ATM Distribution by Geography Income Level
Tract Income Level Census Tracts Population Branches ATMs
# % # % # % # %
Low 25 17.5 92,915 14.5 0 0.0 1 4.0
Moderate 23 16.1 100,403 15.7 3 23.1 3 12.0
Middle 44 30.8 205,791 32.1 4 30.8 11 44.0
Upper 47 32.9 223,217 34.9 5 38.5 9 36.0
NA 4 2.8 18,064 2.8 1 7.7 1 4.0
Totals 143 100.0 640,390 100.0 13 100.0 25 100.0
Source 2015 ACS & Bank Data. Due to rounding, totals may not equal 100.0%
The institution currently operates three branches in moderate-income census tracts, located in
Chicopee, Springfield, and West Springfield Town. Although the institution’s branch and ATM
distribution compares favorably to the number of census tracts and population of moderateincome
tracts, the institution operates only one ATM in a low-income tract.
With the exception of the Springfield branch, each branch has at least one ATM. Easthampton,
Florence, Hadley, and Northampton locations each have a walk-up and drive-up ATM. In
addition, the Florence location has another ATM in its lobby that is not deposit-taking for
employee use. Furthermore, the institution operates eight remote ATMs. The Basketball Hall of
Fame ATM is located in a low-income census tract and is accessible to the public. All deposittaking
ATMs are “smart” ATMs, which can perform most transactions tellers perform to give
consumers access to these functions even during branch closures, such as the instant capturing of
checks.
Additionally, Florence Bank’s alternative delivery systems help compensate for any lack of
immediate access to its branches or ATMs. Specifically, the institution provides online banking
at no cost to allow customers to pay bills, transfer funds, and view account balances. Seventyfive
percent of customers are enrolled in online banking, giving them ready access to their
accounts. Furthermore, Florence Bank allows customers to use mobile and telephone banking to
25
provide customers access to their accounts regardless of the time. Lastly, the institution has
expanded its access to bank functions by adding the use of online account opening during the
review period. Mobile banking has similar features to online banking further increasing
accessibility of funds.
Changes in Branch Locations
To the extent changes have been made, the institution’s record of opening and closing branches
has improved the accessibility of its delivery systems, particularly to low- and moderate-income
geographies and to low- and moderate-income individuals. Since the prior evaluation, the
institution opened two full-service branches. The new Springfield branch, opened in 2018, is in
a moderate-income census tract and the new Chicopee branch, opened in 2021, is also located in
moderate-income census tract. The institution has not closed any branches since the last CRA
evaluation. The addition of two branches in moderate-income census tracts reflects positively on
the bank’s Service Test performance.
Reasonableness of Business Hours and Services
Services, including business hours, do not vary in a way that inconveniences portions of the
assessment area, particularly low- and moderate-income geographies and individuals. Generally,
lobby hours in all branch locations do not vary materially on weekdays; however, the only three
branches not open on Saturdays (located in Springfield, West Springfield Town, and Chicopee)
are all located in moderate-income census tracts. Online and mobile banking, in addition to the
presence of 24-hour ATMs help offset limited hours because it provides customers access to
most banking services. In addition, services do not materially vary across branches.
Community Development Services
The institution provides a relatively high level of community development services. During the
evaluation period, the institution provided 113 instances of community service to 39 community
development organizations that support affordable housing, community service, economic
development, and neighborhood revitalization efforts.
The following table illustrates the institution’s community development services by year and
purpose.
Community Development Services
Activity Year Affordable
Housing
Community
Services
Economic
Development
Revitalize
or Stabilize
Totals
# # # # #
2018 (Partial) 1 26 2 10 39
2019 1 24 2 10 37
2020 0 25 2 10 37
Total 2 75 6 30 113
Source Bank Data
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Examples of notable community development services provided by bank employees are listed
below.
The institution’s President/Chief Executive Officer (CEO) serves on the Board of Directors
of the Western Massachusetts Economic Development Council, which is a non-profit public
benefit organization that promotes economic development and low- and moderate-income
job creation and retention within the assessment area.
A Vice President serves on the Development Committee for Amherst Survival Center, an
organization that connects low-income individuals from Franklin and Hampshire Counties to
food, healthcare, and other basic services.
Two Vice Presidents serve as Board members on Revitalize Community Development
Center, an organization that performs critical repairs, modifications, and rehabilitation on the
homes of low-income families in Holyoke and Springfield.
DISCRIMINATORY OR OTHER ILLEGAL CREDIT PRACTICES REVIEW
Examiners did not identify any evidence of discriminatory or other illegal credit practices.
Therefore, this consideration did not affect the institution’s CRA rating.
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APPENDIX
SCOPE OF EVALUATION
SCOPE OF EVALUATION
TIME PERIOD REVIEWED
February 12, 2018 through April 20, 2021
FINANCIAL INSTITUTION
PRODUCTS
REVIEWED
Florence Bank HMDA and Small
Business Loans
(2018, 2019, and
2020)
Community
Development Loans,
Investments, and
Services (February
12, 2018 – April 20,
2021)
AFFILIATE(S)
AFFILIATE
RELATIONSHIP
PRODUCTS
REVIEWED
NA NA NA
LIST OF ASSESSMENT AREAS AND TYPE OF EVALUATION
ASSESSMENT AREA TYPE OF
EXAMINATION
BRANCHES
VISITED
OTHER
INFORMATION
Springfield, MA MSA Full Scope None N/A
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MASSACHUSETTS DIVISION OF BANKS - FAIR LENDING POLICIES AND
PROCEDURES
The Division of Banks provides comments regarding the institution’s fair lending policies and
procedures pursuant to Regulatory Bulletin 1.3-106. A review of the institution’s public
comment file indicated the institution received no complaints pertaining to the institution’s CRA
performance since the previous examination. The fair lending review was conducted in
accordance with the FFIEC Interagency Fair Lending Examination Procedures. Based on these
procedures, no evidence of disparate treatment was noted.
MINORITY APPLICATION FLOW
Examiners reviewed the institution’s 2019 and 2020 HMDA LARs to determine if the
institution’s application flow from different racial and ethnic groups reflected the assessment
area’s demographics.
According to 2015 ACS U.S. Census data, the institution’s assessment area contains a population
of 640,390 individuals, of which 29.6 percent are minorities. The assessment area’s minority
population is 6.4 percent Black/African American, 3.0 percent Asian, 0.1 percent American
Indian, 18.1 percent Hispanic or Latino, and 2.0 percent Other.
In 2019, the institution received 555 HMDA-reportable loan applications from within its
assessment area. Of these applications, the institution received 21 (3.8 percent) from racial
minorities, 12 of which were originated. These figures trail aggregate data, which indicates 8.8
percent of applications received were from racial minorities. For the same period, 6 applications
(1.1 percent) were received from Hispanic-only applicants and 10 (1.8 percent) were received
from joint Hispanic/non-Hispanic applicants, compared to aggregate data which indicates 10.3
and 1.8 percent of total applications were received from these ethnic groupings in the assessment
area, respectively.
In 2020, the institution received 684 HMDA-reportable loan applications from within its
assessment area. Of these, the institution received 40 (5.8 percent) from racial minorities, of
which 24 were originated. For the same period, the institution received 5 applications (0.7
percent) from Hispanic-only applicants, and 16 (2.3 percent) joint Hispanic/non-Hispanic
applicants. Aggregate data for 2020 was unavailable as of the date of this evaluation; therefore
examiners made no comparison to aggregate performance.
The institution’s performance in 2018 with respect to applications received from racial minorities
was below aggregate performance overall, and the institution performed below the aggregate
with Hispanic or Latino applicants. The institution showed an increasing trend with racial
minorities in 2020, though its performance with Hispanic and Latino applicants remained stable.
The following table details the institution’s minority application flow and aggregate data in its
assessment area.
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GLOSSARY
Aggregate Lending: The number of loans originated and purchased by all reporting lenders in
specified income categories as a percentage of the aggregate number of loans originated and
purchased by all reporting lenders in the metropolitan area/assessment area.
Area Median Income: The median family income for the MSA, if a person or geography is
located in an MSA; or the statewide nonmetropolitan median family income, if a person or
geography is located outside an MSA.
Assessment Area: A geographic area delineated by the bank under the requirements of the
Community Reinvestment Act.
Census Tract: A small, relatively permanent statistical subdivision of a county. Census tract
boundaries normally follow visible features, but they may follow governmental unit boundaries
and other non-visible features in some instances. They always nest within counties. Census
tracts average about 4,000 persons, and their physical size varies widely depending upon
population density. Census tracts are designed to be homogenous for population characteristics,
economic status, and living conditions to allow for statistical comparisons.
Combined Statistical Area (CSA): A combination of several adjacent metropolitan statistical
areas or micropolitan statistical areas or a mix of the two, which are linked by economic ties.
Community Development: For loans, investments, and services to qualify as community
development activities, their primary purpose must:
(1) Support affordable housing for low- and moderate-income individuals;
(2) Target community services toward low- and moderate-income individuals;
(3) Promote economic development by financing small businesses or farms; or
(4) Provide activities that revitalize or stabilize low- and moderate-income geographies,
designated disaster areas, or distressed or underserved nonmetropolitan middle-income
geographies; or
(5) Enable or facilitate projects or activities that address needs regarding foreclosed or
abandoned residential properties in designated target areas.
Community Development Corporation (CDC): A CDC allows banks and holding companies
to make equity type of investments in community development projects. Bank CDCs can
develop innovative debt instruments or provide near-equity investments tailored to the
development needs of the community. Bank CDCs are also tailored to their financial and
marketing needs. A CDC may purchase, own, rehabilitate, construct, manage, and sell real
property. Also, it may make equity or debt investments in development projects and in local
businesses. The CDC activities are expected to directly benefit low- and moderate-income
groups, and the investment dollars should not represent an undue risk on the banking
organization.
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Community Development Financial Institutions (CDFIs): CDFIs are private intermediaries
(either for profit or nonprofit) with community development as their primary mission. A CDFI
facilitates the flow of lending and investment capital into distressed communities and to
individuals who have been unable to take advantage of the services offered by traditional
financial institutions. Some basic types of CDFIs include community development banks,
community development loan funds, community development credit unions, micro enterprise
funds, and community development venture capital funds.
A certified CDFI must meet eligibility requirements. These requirements include the following:
Having a primary mission of promoting community development;
Serving an investment area or target population;
Providing development services;
Maintaining accountability to residents of its investment area or targeted population
through representation on its governing board of directors, or by other means;
Not constituting an agency or instrumentality of the United States, of any state or
political subdivision of a state.
Community Development Loan: A loan that
(1) Has as its primary purpose community development; and
(2) Except in the case of a wholesale or limited purpose bank:
(i) Has not been reported or collected by the bank or an affiliate for consideration in the
bank’s assessment area as a home mortgage, small business, small farm, or consumer
loan, unless it is a multifamily dwelling loan (as described in Appendix A to Part 203 of
this title); and
(ii) Benefits the bank’s assessment area(s) or a broader statewide or regional area
including the bank’s assessment area(s).
Community Development Service: A service that
(1) Has as its primary purpose community development;
(2) Is related to the provision of financial services; and
(3) Has not been considered in the evaluation of the bank’s retail banking services under
§ 345.24(d).
Consumer Loan(s): A loan(s) to one or more individuals for household, family, or other
personal expenditures. A consumer loan does not include a home mortgage, small business, or
small farm loan. This definition includes the following categories: motor vehicle loans, credit
card loans, home equity loans, other secured consumer loans, and other unsecured consumer
loans.
Core Based Statistical Areas (CBSAs): The county or counties or equivalent entities
associated with at least one core (urbanized area or urban cluster) of at least 10,000 population,
plus adjacent counties having a high degree of social and economic integration with the core as
measured through commuting ties with the counties associated with the core. Metropolitan and
Micropolitan Statistical Areas are the two categories of CBSAs.
32
Distressed Middle-Income Nonmetropolitan Geographies: A nonmetropolitan middleincome
geography will be designated as distressed if it is in a county that meets one or more of
the following triggers:
(1) an unemployment rate of at least 1.5 times the national average;
(2) a poverty rate of 20 percent or more; or,
(3) a population loss of 10 percent or more between the previous and most recent
decennial census or a net migration loss of 5 percent or more over the 5-year period
preceding the most recent census.
Family: Includes a householder and one or more other persons living in the same household
who are related to the householder by birth, marriage, or adoption. The number of family
households always equals the number of families; however, a family household may also include
non-relatives living with the family. Families are classified by type as either a married-couple
family or other family. Other family is further classified into “male householder” (a family with
a male householder and no wife present) or “female householder” (a family with a female
householder and no husband present).
Family Income: Includes the income of all members of a family that are age 15 and older.
FFIEC-Estimated Income Data: The Federal Financial Institutions Examination Council
(FFIEC) issues annual estimates which update median family income from the metropolitan and
nonmetropolitan areas. The FFIEC uses American Community Survey data and factors in
information from other sources to arrive at an annual estimate that more closely reflects current
economic conditions.
Full-Scope Review: A full-scope review is accomplished when examiners complete all
applicable interagency examination procedures for an assessment area. Performance under
applicable tests is analyzed considering performance context, quantitative factors (for example,
geographic distribution, borrower profile, and total number and dollar amount of investments),
and qualitative factors (for example, innovativeness, complexity, and responsiveness).
Geography: A census tract delineated by the United States Bureau of the Census in the most
recent decennial census.
Home Mortgage Disclosure Act (HMDA): The statute that requires certain mortgage lenders
that do business or have banking offices in a metropolitan statistical area to file annual summary
reports of their mortgage lending activity. The reports include such data as the race, gender, and
the income of applicants; the amount of loan requested; and the disposition of the application
(approved, denied, and withdrawn).
Home Mortgage Disclosure Loan Application Register (HMDA LAR): The HMDA LARs
record all applications received for residential purchase, refinance, home improvement, and
temporary-to-permanent construction loans.
33
Home Mortgage Loans: Includes home purchase and home improvement loans as defined in
the HMDA regulation. This definition also includes multi-family (five or more families)
dwelling loans, loans to purchase manufactured homes, and refinancings of home improvement
and home purchase loans.
Household: Includes all persons occupying a housing unit. Persons not living in households are
classified as living in group quarters. In 100 percent tabulations, the count of households always
equals the count of occupied housing units.
Household Income: Includes the income of the householder and all other persons that are age
15 and older in the household, whether related to the householder or not. Because many
households are only one person, median household income is usually less than median family
income.
Housing Unit: Includes a house, an apartment, a mobile home, a group of rooms, or a single
room that is occupied as separate living quarters.
Limited-Scope Review: A limited scope review is accomplished when examiners do not
complete all applicable interagency examination procedures for an assessment area.
Performance under applicable tests is often analyzed using only quantitative factors (for
example, geographic distribution, borrower profile, total number and dollar amount of
investments, and branch distribution).
Low-Income: Individual income that is less than 50 percent of the area median income, or a
median family income that is less than 50 percent in the case of a geography.
Low Income Housing Tax Credit: The Low-Income Housing Tax Credit Program is a housing
program contained within the Internal Revenue Code of 1986, as amended. It is administered by
the U.S. Department of the Treasury and the Internal Revenue Service. The U.S. Treasury
Department distributes low-income housing tax credits to housing credit agencies through the
Internal Revenue Service. The housing agencies allocate tax credits on a competitive basis.
Developers who acquire, rehabilitate, or construct low-income rental housing may keep their tax
credits. Or, they may sell them to corporations or investor groups, who, as owners of these
properties, will be able to reduce their own federal tax payments. The credit can be claimed
annually for ten consecutive years. For a project to be eligible, the developer must set aside a
specific percentage of units for occupancy by low-income residents. The set-aside requirement
remains throughout the compliance period, usually 30 years.
Market Share: The number of loans originated and purchased by the institution as a percentage
of the aggregate number of loans originated and purchased by all reporting lenders in the
metropolitan area/assessment area.
Median Income: The median income divides the income distribution into two equal parts, one
having incomes above the median and other having incomes below the median.
34
Metropolitan Division (MD): A county or group of counties within a CBSA that contain(s) an
urbanized area with a population of at least 2.5 million. A MD is one or more main/secondary
counties representing an employment center or centers, plus adjacent counties associated with
the main/secondary county or counties through commuting ties.
Metropolitan Statistical Area (MSA): CBSA associated with at least one urbanized area
having a population of at least 50,000. The MSA comprises the central county or counties or
equivalent entities containing the core, plus adjacent outlying counties having a high degree of
social and economic integration with the central county or counties as measured through
commuting.
Micropolitan Statistical Area: CBSA associated with at least one urbanized area having a
population of at least 10,000, but less than 50,000.
Middle-Income: Individual income that is at least 80 percent and less than 120 percent of the
area median income, or a median family income that is at least 80 and less than 120 percent in
the case of a geography.
Moderate-Income: Individual income that is at least 50 percent and less than 80 percent of the
area median income, or a median family income that is at least 50 and less than 80 percent in the
case of a geography.
Multi-family: Refers to a residential structure that contains five or more units.
Nonmetropolitan Area: All areas outside of metropolitan areas. The definition of
nonmetropolitan area is not consistent with the definition of rural areas. Urban and rural
classifications cut across the other hierarchies. For example, there is generally urban and rural
territory within metropolitan and nonmetropolitan areas.
Owner-Occupied Units: Includes units occupied by the owner or co-owner, even if the unit has
not been fully paid for or is mortgaged.
Qualified Investment: A lawful investment, deposit, membership share, or grant that has as its
primary purpose community development.
Rated area: A rated area is a state or multistate metropolitan area. For an institution with
domestic branches in only one state, the institution’s CRA rating would be the state rating. If an
institution maintains domestic branches in more than one state, the institution will receive a
rating for each state in which those branches are located. If an institution maintains domestic
branches in two or more states within a multistate metropolitan area, the institution will receive a
rating for the multistate metropolitan area.
Rural Area: Territories, populations, and housing units that are not classified as urban.
35
Small Business Investment Company (SBIC): SBICs are privately-owned investment
companies which are licensed and regulated by the Small Business Administration
(SBA). SBICs provide long-term loans and/or venture capital to small firms. Because money
for venture or risk investments is difficult for small firms to obtain, SBA provides assistance to
SBICs to stimulate and supplement the flow of private equity and long-term loan funds to small
companies. Venture capitalists participate in the SBIC program to supplement their own private
capital with funds borrowed at favorable rates through SBA’s guarantee of SBIC debentures.
These SBIC debentures are then sold to private investors. An SBIC’s success is linked to the
growth and profitability of the companies that it finances. Therefore, some SBICs primarily
assist businesses with significant growth potential, such as new firms in innovative
industries. SBICs finance small firms by providing straight loans and/or equity-type
investments. This kind of financing gives them partial ownership of those businesses and the
possibility of sharing in the companies’ profits as they grow and prosper.
Small Business Loan: A loan included in “loans to small businesses” as defined in the
Consolidated Report of Condition and Income (Call Report). These loans have original amounts
of $1 million or less and are either secured by nonfarm nonresidential properties or are classified
as commercial and industrial loans.
Small Farm Loan: A loan included in “loans to small farms” as defined in the instructions for
preparation of the Consolidated Report of Condition and Income (Call Report). These loans
have original amounts of $500,000 or less and are either secured by farmland, including farm
residential and other improvements, or are classified as loans to finance agricultural production
and other loans to farmers.
Underserved Middle-Income Nonmetropolitan Geographies: A nonmetropolitan middleincome
geography will be designated as underserved if it meets criteria for
Population size, density, and dispersion indicating the area’s population is sufficiently
small, thin, and
Distant from a population center that the tract is likely to have difficulty financing the
fixed costs of meeting essential community needs.
Upper-Income: Individual income that is more than 120 percent of the area median income, or
a median family income that is more than 120 percent in the case of a geography.
Urban Area: All territories, populations, and housing units in urbanized areas and in places of
2,500 or more persons outside urbanized areas. More specifically, “urban” consists of territory,
persons, and housing units in places of 2,500 or more persons incorporated as cities, villages,
boroughs (except in Alaska and New York), and towns (except in the New England states, New
York, and Wisconsin).
“Urban” excludes the rural portions of “extended cities”; census designated place of 2,500 or
more persons; and other territory, incorporated or unincorporated, including in urbanized areas.
PERFORMANCE EVALUATION DISCLOSURE GUIDE
Massachusetts General Laws Chapter 167, Section 14, as amended, and the Uniform Interagency
Community Reinvestment Act (CRA) Guidelines for Disclosure of Written Evaluations, and Part
345 of the Federal Deposit Insurance Corporation’s Rules and Regulations, require all financial
institutions to take the following actions within 30 business days of receipt of the CRA evaluation of
their institution:
1) Make its most current CRA performance evaluation available to the public;
2) At a minimum, place the evaluation in the institution's CRA public file located at the
head office and at a designated office in each assessment area;
3) Add the following language to the institution's required CRA public notice that is
posted in each depository facility:
"You may obtain the public section of our most recent CRA Performance Evaluation,
which was prepared by the Massachusetts Division of Banks, at (Address at main
office)."
"You may obtain the public section of our most recent CRA Performance Evaluation,
which was prepared by the Federal Deposit Insurance Corporation, at (Address at main
office)."
[Please Note: If the institution has more than one assessment area, each office (other
than off-premises electronic deposit facilities) in that community shall also include the
address of the designated office for that assessment area.]
4) Provide a copy of its current evaluation to the public, upon request. In connection with
this, the institution is authorized to charge a fee which does not exceed the cost of
reproduction and mailing (if applicable).
The format and content of the institution's evaluation, as prepared by its supervisory agencies,
may not be altered or abridged in any manner. The institution is encouraged to include its
response to the evaluation in its CRA public file.
GLOSSARY
Aggregate Lending: The number of loans originated and purchased by all reporting lenders in
specified income categories as a percentage of the aggregate number of loans originated and
purchased by all reporting lenders in the metropolitan area/assessment area.
Area Median Income: The median family income for the MSA, if a person or geography is
located in an MSA; or the statewide nonmetropolitan median family income, if a person or
geography is located outside an MSA.
Assessment Area: A geographic area delineated by the bank under the requirements of the
Community Reinvestment Act.
Census Tract: A small, relatively permanent statistical subdivision of a county. Census tract
boundaries normally follow visible features, but they may follow governmental unit boundaries
and other non-visible features in some instances. They always nest within counties. Census
tracts average about 4,000 persons, and their physical size varies widely depending upon
population density. Census tracts are designed to be homogenous for population characteristics,
economic status, and living conditions to allow for statistical comparisons.
Combined Statistical Area (CSA): A combination of several adjacent metropolitan statistical
areas or micropolitan statistical areas or a mix of the two, which are linked by economic ties.
Community Development: For loans, investments, and services to qualify as community
development activities, their primary purpose must:
(1) Support affordable housing for low- and moderate-income individuals;
(2) Target community services toward low- and moderate-income individuals;
(3) Promote economic development by financing small businesses or farms; or
(4) Provide activities that revitalize or stabilize low- and moderate-income geographies,
designated disaster areas, or distressed or underserved nonmetropolitan middle-income
geographies; or
(5) Enable or facilitate projects or activities that address needs regarding foreclosed or
abandoned residential properties in designated target areas.
Community Development Corporation (CDC): A CDC allows banks and holding companies
to make equity type of investments in community development projects. Bank CDCs can
develop innovative debt instruments or provide near-equity investments tailored to the
development needs of the community. Bank CDCs are also tailored to their financial and
marketing needs. A CDC may purchase, own, rehabilitate, construct, manage, and sell real
property. Also, it may make equity or debt investments in development projects and in local
businesses. The CDC activities are expected to directly benefit low- and moderate-income
groups, and the investment dollars should not represent an undue risk on the banking
organization.
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Community Development Financial Institutions (CDFIs): CDFIs are private intermediaries
(either for profit or nonprofit) with community development as their primary mission. A CDFI
facilitates the flow of lending and investment capital into distressed communities and to
individuals who have been unable to take advantage of the services offered by traditional
financial institutions. Some basic types of CDFIs include community development banks,
community development loan funds, community development credit unions, micro enterprise
funds, and community development venture capital funds.
A certified CDFI must meet eligibility requirements. These requirements include the following:
Having a primary mission of promoting community development;
Serving an investment area or target population;
Providing development services;
Maintaining accountability to residents of its investment area or targeted population
through representation on its governing board of directors, or by other means;
Not constituting an agency or instrumentality of the United States, of any state or
political subdivision of a state.
Community Development Loan: A loan that
(1) Has as its primary purpose community development; and
(2) Except in the case of a wholesale or limited purpose bank:
(i) Has not been reported or collected by the bank or an affiliate for consideration in the
bank’s assessment area as a home mortgage, small business, small farm, or consumer
loan, unless it is a multifamily dwelling loan (as described in Appendix A to Part 203 of
this title); and
(ii) Benefits the bank’s assessment area(s) or a broader statewide or regional area
including the bank’s assessment area(s).
Community Development Service: A service that
(1) Has as its primary purpose community development;
(2) Is related to the provision of financial services; and
(3) Has not been considered in the evaluation of the bank’s retail banking services under
§ 345.24(d).
Consumer Loan(s): A loan(s) to one or more individuals for household, family, or other
personal expenditures. A consumer loan does not include a home mortgage, small business, or
small farm loan. This definition includes the following categories: motor vehicle loans, credit
card loans, home equity loans, other secured consumer loans, and other unsecured consumer
loans.
Core Based Statistical Areas (CBSAs): The county or counties or equivalent entities
associated with at least one core (urbanized area or urban cluster) of at least 10,000 population,
plus adjacent counties having a high degree of social and economic integration with the core as
measured through commuting ties with the counties associated with the core. Metropolitan and
Micropolitan Statistical Areas are the two categories of CBSAs.
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Distressed Middle-Income Nonmetropolitan Geographies: A nonmetropolitan middleincome
geography will be designated as distressed if it is in a county that meets one or more of
the following triggers:
(1) an unemployment rate of at least 1.5 times the national average;
(2) a poverty rate of 20 percent or more; or,
(3) a population loss of 10 percent or more between the previous and most recent
decennial census or a net migration loss of 5 percent or more over the 5-year period
preceding the most recent census.
Family: Includes a householder and one or more other persons living in the same household
who are related to the householder by birth, marriage, or adoption. The number of family
households always equals the number of families; however, a family household may also include
non-relatives living with the family. Families are classified by type as either a married-couple
family or other family. Other family is further classified into “male householder” (a family with
a male householder and no wife present) or “female householder” (a family with a female
householder and no husband present).
Family Income: Includes the income of all members of a family that are age 15 and older.
FFIEC-Estimated Income Data: The Federal Financial Institutions Examination Council
(FFIEC) issues annual estimates which update median family income from the metropolitan and
nonmetropolitan areas. The FFIEC uses American Community Survey data and factors in
information from other sources to arrive at an annual estimate that more closely reflects current
economic conditions.
Full-Scope Review: A full-scope review is accomplished when examiners complete all
applicable interagency examination procedures for an assessment area. Performance under
applicable tests is analyzed considering performance context, quantitative factors (for example,
geographic distribution, borrower profile, and total number and dollar amount of investments),
and qualitative factors (for example, innovativeness, complexity, and responsiveness).
Geography: A census tract delineated by the United States Bureau of the Census in the most
recent decennial census.
Home Mortgage Disclosure Act (HMDA): The statute that requires certain mortgage lenders
that do business or have banking offices in a metropolitan statistical area to file annual summary
reports of their mortgage lending activity. The reports include such data as the race, gender, and
the income of applicants; the amount of loan requested; and the disposition of the application
(approved, denied, and withdrawn).
Home Mortgage Disclosure Loan Application Register (HMDA LAR): The HMDA LARs
record all applications received for residential purchase, refinance, home improvement, and
temporary-to-permanent construction loans.
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Home Mortgage Loans: Includes home purchase and home improvement loans as defined in
the HMDA regulation. This definition also includes multi-family (five or more families)
dwelling loans, loans to purchase manufactured homes, and refinancings of home improvement
and home purchase loans.
Household: Includes all persons occupying a housing unit. Persons not living in households are
classified as living in group quarters. In 100 percent tabulations, the count of households always
equals the count of occupied housing units.
Household Income: Includes the income of the householder and all other persons that are age
15 and older in the household, whether related to the householder or not. Because many
households are only one person, median household income is usually less than median family
income.
Housing Unit: Includes a house, an apartment, a mobile home, a group of rooms, or a single
room that is occupied as separate living quarters.
Limited-Scope Review: A limited scope review is accomplished when examiners do not
complete all applicable interagency examination procedures for an assessment area.
Performance under applicable tests is often analyzed using only quantitative factors (for
example, geographic distribution, borrower profile, total number and dollar amount of
investments, and branch distribution).
Low-Income: Individual income that is less than 50 percent of the area median income, or a
median family income that is less than 50 percent in the case of a geography.
Low Income Housing Tax Credit: The Low-Income Housing Tax Credit Program is a housing
program contained within the Internal Revenue Code of 1986, as amended. It is administered by
the U.S. Department of the Treasury and the Internal Revenue Service. The U.S. Treasury
Department distributes low-income housing tax credits to housing credit agencies through the
Internal Revenue Service. The housing agencies allocate tax credits on a competitive basis.
Developers who acquire, rehabilitate, or construct low-income rental housing may keep their tax
credits. Or, they may sell them to corporations or investor groups, who, as owners of these
properties, will be able to reduce their own federal tax payments. The credit can be claimed
annually for ten consecutive years. For a project to be eligible, the developer must set aside a
specific percentage of units for occupancy by low-income residents. The set-aside requirement
remains throughout the compliance period, usually 30 years.
Market Share: The number of loans originated and purchased by the institution as a percentage
of the aggregate number of loans originated and purchased by all reporting lenders in the
metropolitan area/assessment area.
Median Income: The median income divides the income distribution into two equal parts, one
having incomes above the median and other having incomes below the median.
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Metropolitan Division (MD): A county or group of counties within a CBSA that contain(s) an
urbanized area with a population of at least 2.5 million. A MD is one or more main/secondary
counties representing an employment center or centers, plus adjacent counties associated with
the main/secondary county or counties through commuting ties.
Metropolitan Statistical Area (MSA): CBSA associated with at least one urbanized area
having a population of at least 50,000. The MSA comprises the central county or counties or
equivalent entities containing the core, plus adjacent outlying counties having a high degree of
social and economic integration with the central county or counties as measured through
commuting.
Micropolitan Statistical Area: CBSA associated with at least one urbanized area having a
population of at least 10,000, but less than 50,000.
Middle-Income: Individual income that is at least 80 percent and less than 120 percent of the
area median income, or a median family income that is at least 80 and less than 120 percent in
the case of a geography.
Moderate-Income: Individual income that is at least 50 percent and less than 80 percent of the
area median income, or a median family income that is at least 50 and less than 80 percent in the
case of a geography.
Multi-family: Refers to a residential structure that contains five or more units.
Nonmetropolitan Area: All areas outside of metropolitan areas. The definition of
nonmetropolitan area is not consistent with the definition of rural areas. Urban and rural
classifications cut across the other hierarchies. For example, there is generally urban and rural
territory within metropolitan and nonmetropolitan areas.
Owner-Occupied Units: Includes units occupied by the owner or co-owner, even if the unit has
not been fully paid for or is mortgaged.
Qualified Investment: A lawful investment, deposit, membership share, or grant that has as its
primary purpose community development.
Rated area: A rated area is a state or multistate metropolitan area. For an institution with
domestic branches in only one state, the institution’s CRA rating would be the state rating. If an
institution maintains domestic branches in more than one state, the institution will receive a
rating for each state in which those branches are located. If an institution maintains domestic
branches in two or more states within a multistate metropolitan area, the institution will receive a
rating for the multistate metropolitan area.
Rural Area: Territories, populations, and housing units that are not classified as urban.
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Small Business Investment Company (SBIC): SBICs are privately-owned investment
companies which are licensed and regulated by the Small Business Administration
(SBA). SBICs provide long-term loans and/or venture capital to small firms. Because money
for venture or risk investments is difficult for small firms to obtain, SBA provides assistance to
SBICs to stimulate and supplement the flow of private equity and long-term loan funds to small
companies. Venture capitalists participate in the SBIC program to supplement their own private
capital with funds borrowed at favorable rates through SBA’s guarantee of SBIC debentures.
These SBIC debentures are then sold to private investors. An SBIC’s success is linked to the
growth and profitability of the companies that it finances. Therefore, some SBICs primarily
assist businesses with significant growth potential, such as new firms in innovative
industries. SBICs finance small firms by providing straight loans and/or equity-type
investments. This kind of financing gives them partial ownership of those businesses and the
possibility of sharing in the companies’ profits as they grow and prosper.
Small Business Loan: A loan included in “loans to small businesses” as defined in the
Consolidated Report of Condition and Income (Call Report). These loans have original amounts
of $1 million or less and are either secured by nonfarm nonresidential properties or are classified
as commercial and industrial loans.
Small Farm Loan: A loan included in “loans to small farms” as defined in the instructions for
preparation of the Consolidated Report of Condition and Income (Call Report). These loans
have original amounts of $500,000 or less and are either secured by farmland, including farm
residential and other improvements, or are classified as loans to finance agricultural production
and other loans to farmers.
Underserved Middle-Income Nonmetropolitan Geographies: A nonmetropolitan middleincome
geography will be designated as underserved if it meets criteria for
Population size, density, and dispersion indicating the area’s population is sufficiently
small, thin, and
Distant from a population center that the tract is likely to have difficulty financing the
fixed costs of meeting essential community needs.
Upper-Income: Individual income that is more than 120 percent of the area median income, or
a median family income that is more than 120 percent in the case of a geography.
Urban Area: All territories, populations, and housing units in urbanized areas and in places of
2,500 or more persons outside urbanized areas. More specifically, “urban” consists of territory,
persons, and housing units in places of 2,500 or more persons incorporated as cities, villages,
boroughs (except in Alaska and New York), and towns (except in the New England states, New
York, and Wisconsin).
“Urban” excludes the rural portions of “extended cities”; census designated place of 2,500 or
more persons; and other territory, incorporated or unincorporated, including in urbanized areas.
PERFORMANCE EVALUATION DISCLOSURE GUIDE
Massachusetts General Laws Chapter 167, Section 14, as amended, and the Uniform Interagency
Community Reinvestment Act (CRA) Guidelines for Disclosure of Written Evaluations, and Part
345 of the Federal Deposit Insurance Corporation’s Rules and Regulations, require all financial
institutions to take the following actions within 30 business days of receipt of the CRA evaluation of
their institution:
1) Make its most current CRA performance evaluation available to the public;
2) At a minimum, place the evaluation in the institution's CRA public file located at the
head office and at a designated office in each assessment area;
3) Add the following language to the institution's required CRA public notice that is
posted in each depository facility:
"You may obtain the public section of our most recent CRA Performance Evaluation,
which was prepared by the Massachusetts Division of Banks, at (Address at main
office)."
"You may obtain the public section of our most recent CRA Performance Evaluation,
which was prepared by the Federal Deposit Insurance Corporation, at (Address at main
office)."
[Please Note: If the institution has more than one assessment area, each office (other
than off-premises electronic deposit facilities) in that community shall also include the
address of the designated office for that assessment area.]
4) Provide a copy of its current evaluation to the public, upon request. In connection with
this, the institution is authorized to charge a fee which does not exceed the cost of
reproduction and mailing (if applicable).
The format and content of the institution's evaluation, as prepared by its supervisory agencies,
may not be altered or abridged in any manner. The institution is encouraged to include its
response to the evaluation in its CRA public file.