Community Reinvestment Act - Public File

November 2, 2022

COMMUNITY REINVESTMENT ACT PERFORMANCE EVALUATION

River City Bank
Certificate Number: 18983

2480 Natomas Park Drive
Sacramento, California 95833

Federal Deposit Insurance Corporation
Division of Depositor and Consumer Protection
San Francisco Regional Office

25 Jessie Street at Ecker Square, Suite 2300
San Francisco, California 94105

This document is an evaluation of this institution’s record of meeting the credit needs of its entire community, including low- and moderate-income (LMI) 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 federal financial supervisory agency concerning the safety and soundness of this financial institution.

INSTITUTION RATING

INSTITUTION’S COMMUNITY REINVESTMENT ACT (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 (AA), including LMI neighborhoods, in a manner consistent with its resources and capabilities.

PERFORMANCE LEVELS	PERFORMANCE TESTS
	Lending Test*	Investment Test	Service Test
Outstanding	-	-	-
High Satisfactory	-	-	X
Low Satisfactory	X	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.

The Lending Test is rated Low Satisfactory.

• Lending levels reflect good responsiveness to AA credit needs.
• A high percentage of loans are made in the institution’s AAs.
• The geographic distribution of loans reflects adequate penetration throughout the AAs.
• The distribution of borrowers reflects, given the product lines offered by the institution, adequate penetration among retail customers of different income levels and business customers of different revenue size.
• The institution exhibits a good record of serving the credit needs of the most economically disadvantaged areas of its AAs, low-income individuals, and very small businesses, consistent with safe and sound banking practices.
• The institution has made an adequate level of community development (CD) loans.
• The institution makes limited use of innovative or flexible lending practices in order to serve AA credit needs.

The Investment Test is rated Low Satisfactory.

• The institution has an adequate level of qualified CD investment and grants, although rarely leadership position, particularly those not routinely provided by private investors.
• The institution exhibits good responsiveness to credit and CD needs.
• The institution occasionally uses innovative or complex investments to support CD initiatives.

The Service Test is rated High Satisfactory.

• Delivery systems are accessible to essentially all portions of the institution’s AAs.
• To the extent changes have been made, the RCB’s opening and closing of branches has generally not adversely affected the accessibility of its delivery systems, particularly in LMI geographies and to LMI individuals.
• Services (including where appropriate, business hours) do not vary in a way that inconveniences portions of the AAs, particularly LMI geographies or individuals.
• RCB provides a relatively high level of CD services.

DESCRIPTION OF INSTITUTION

Established in December 16, 1963, River City Bank (RCB) is a state-chartered, non-member bank headquartered in Sacramento, California. RCB is predominately a commercial bank, while also offering home mortgage loans.

The previous FDIC CRA Evaluation, dated October 28, 2019, assigned the bank an overall “Satisfactory” rating using Interagency Large Institution Examination Procedures. The business focus remains unchanged since the previous evaluation. Similar to the prior examination, examiners considered the donations made by the Kelly Foundation, a charitable organization that is an affiliate of the bank. Since the prior evaluation, the bank has not engaged in any bank mergers or acquisitions.

RCB operates within El Dorado, Placer, Sacramento, and Yolo Counties. RCB operates nine full- service branches, including one main office throughout its AAs. RCB also operates one loan- production office in Sonoma County. During the evaluation period, the bank closed its one branch location in the Contra Costa AA. Additionally, RCB closed two branches, and relocated one branch in the Sacramento AA.

RCB provides customers with a full range of personal and business banking products, including but not limited to commercial loans, working capital, agriculture, federal and state government-assisted small business programs, construction, residential real estate, and consumer loans. RCB’s deposit products and services offered through the branch network include alternative delivery systems such as, walk-up automated teller machines (ATMs), cash management services, online and mobile banking, safe deposit, notary public services, and night depositories.

Based on the bank’s Consolidated Reports of Condition and Income (Call Report), dated September 30, 2022, RCB reported $4.0 billion in total assets, $3.4 billion in total deposits, and $340.2 million in total equity capital. RCB reflected a modest growth level during the review period. Since the previous evaluation, total assets, loans and deposits increased by 61.8 percent, 71.5 percent and 84.4 percent respectively. The following table depicts the institution’s loan portfolio distribution.

Loan Portfolio Distribution as of 9/30/2022
Loan Category	$(000s)	%
Construction, Land Development, and Other Land Loans	24,852	0.8
Secured by Farmland	19,622	0.7
Secured by 1-4 Family Residential Properties	205,108	6.8
Secured by Multifamily (5 or more) Residential Properties	878,091	29.3
Secured by Nonfarm Nonresidential Properties	1,674,198	55.8
Total Real Estate Loans	2,801,871	93.3
Commercial and Industrial Loans	173,818	5.8
Agricultural Production and Other Loans to Farmers	11,651	0.4
Consumer Loans	255	0.0
Obligations of State and Political Subdivisions in the U.S.	10,820	0.4
Other Loans	3,184	0.1
Lease Financing Receivable (net of unearned income)	0	0.0
Less: Unearned Income	0	0.0
Total Loans	3,001,599	100.0
Source: Call Report

Examiners did not identify any financial, legal, or other impediments that affect the institution’s ability to meet the credit needs of its AAs.

DESCRIPTION OF ASSESSMENT AREAS

The bank has delineated two AAs that include the Sacramento AA, and the Contra Costa AA. These AAs are described below:

• Sacramento AA – a contiguous area that consists of the following counties: El Dorado, Placer, Sacramento, and Yolo. These counties comprise the Sacramento-Roseville-Folsom, CA MSA #40900.
• Contra Costa AA – a contiguous area that consists of Contra Costa County, which comprises a portion of the Oakland-Berkeley-Livermore, CA MD #36084.

On April 30, 2020, the bank closed its deposit-taking branch in Contra Costa County and converted it into a limited-service loan production office, which was also closed on November 30, 2020. Therefore, effective May 1, 2020, the bank eliminated the Contra Costa AA from its AA designation. There have been no other changes to RCB’s AAs since the previous evaluation. Examiners determined that the institution’s AA complies with the specifications set forth in the CRA regulation. Refer to the individual Full-Scope AA sections for details regarding demographic and economic information.

SCOPE OF EVALUATION

General Information

Examiners used the Interagency Large Institution Examination Procedures to evaluate RCB’s CRA performance. This evaluation covers the period from the prior evaluation, dated October 28, 2019, to the current evaluation dated November 2, 2022.

Examiners evaluated the Sacramento and Contra Costa AAs using full-scope examination procedures based on the greatest volume of lending activity, deposit volume, and branch distribution. The Sacramento AA received the greatest weight due to the institution’s presence, and volume of lending. Refer to the individual AA sections for additional details.

Activities Reviewed

Examiners determined that the institution’s major product lines include small business, and home mortgage loans. This conclusion considers the institution’s business strategy, loan composition, and the number and dollar volume of loans originated during the evaluation period. While small farm loans are offered by the bank, they are not a major focus of the institution. Additionally, RCB did not request the inclusion of consumer loans, nor do consumer loans represent a significant portion of the lending distribution. Therefore, small farm and consumer loans are excluded from the review.

For the Lending Test in the Sacramento AA, examiners reviewed the universe of reported CRA small business loans, as well as home mortgage loans originated and purchased during 2019, 2020, and 2021. In the Contra Costa AA, examiners reviewed the universe of reported CRA small business loans, as well as home mortgage loans originated and purchased in 2019. During the 3 years review period, RCB originated 1,082 small business loans totaling approximately $244.4 million, and 382 home mortgage loans totaling approximately $653.1 million. Based on the larger volume of small business lending by number, examiners placed greater weight on the institution’s small business lending followed by home mortgage.

Although the review period for this examination is from October 29, 2019 to November 2, 2022, since the last examination did not review the 2019 small business and home mortgage loans, this examination included review of the two lending products for the full 2019 calendar year.

In the Sacramento AA, examiners presented the 2019, 2020, and 2021 small business, and home mortgage loans due to anomalies in lending data between years. In 2020 and 2021, the number of small business loans dramatically increased from previous years due to loans originated under the SBA Paycheck Protection Program (SBA PPP) as a result of the COVID-19 pandemic. During the same timeframe, the number of home mortgage loans increased dramatically due to the favorable interest rate environment. In the Contra Costa AA, examiners presented the 2019 small business and home mortgage lending data because it was the most recent full calendar year of data available before the bank exited the market.

In the Sacramento AA, examiners used the 2019, 2020, and 2021 D&B demographic data, and the 2019 and 2020 CRA aggregate data as comparisons for the institution’s small business lending performance. CRA aggregate data for 2021 was not available at the time of this evaluation. The bank did not report home mortgage lending data as it did not meet the reporting threshold pursuant to HMDA for 2020 and 2021. However, the bank did collect home mortgage lending data. Examiners validated the accuracy of the collected data and found no errors; and therefore, the universe of originated and purchased home mortgage loans was used during the review period. In the Sacramento AA, examiners used the 2015 American Community Survey (ACS) data as comparisons for the institution’s home mortgage lending performance in 2019, 2020, and 2021. In the Contra Costa AA, examiners used the 2019 D&B demographic data and the 2019 CRA aggregate data as comparisons for the institution’s small business lending performance. Additionally, examiners used the 2015 ACS data as a comparison for the institution’s lending performance in 2019.

The evaluation of CD loans, investments, and services in the Sacramento AA includes all qualified activities since the previous CRA Evaluation, dated October 28, 2019 through November 2, 2022. CD activities in the Contra Costa AA include all qualified activities from the date of the previous CRA Evaluation through April 30, 2020. Activities performed in the Contra Costa AA after the branch closure are considered under statewide activities in the overall CD service analysis. Examiners evaluated RCB’s CD loans, investments, and service activities quantitatively based on the institution’s financial capacity, as well as qualitatively based on the impact of those activities in RCB’s AAs. For the Service Test, examiners reviewed delivery systems for providing retail- banking services, including branches and alternative delivery systems, and the impact of any branch openings/closing during the evaluation period. Additionally, examiners reviewed retail banking products and services targeted toward LMI individuals, or small businesses.

CONCLUSIONS ON PERFORMANCE CRITERIA

LENDING TEST

RCB’s Lending Test rating is “Low Satisfactory.” The institution’s performance in the Sacramento AA is consistent with this conclusion. RCB’s performance in the Contra Costa AA is inconsistent with the overall performance conclusion.

Lending Activity

RCB’s lending levels reflect good responsiveness to AA credit needs. This conclusion is supported by consistent performance in the Sacramento AA. Performance in the Contra Costa AA is inconsistent with the overall performance conclusion. Refer to each AA analysis for details.

Assessment Area Concentration

A high percentage of loans are made in the institutions AAs. Small business loan volume increased significantly in 2020 and 2021, primarily due to SBA PPP lending. Small business lending within the AA is generally consistent across the review period, with a slight decrease in 2021. Home mortgage originations is partially attributed to the favorable interest rate environment during the years of analysis. In addition, in 2022 the bank began purchasing home mortgage loans. The percent of loans made in the AA shows a slight downward trend across the years of analysis; however, performance is still considered good. Refer to the following table.

Lending Inside and Outside of the Assessment Area
Loan Category	Number of Loans				Total #	Dollar Amount of Loans $(000s)				Total $(000s)
	Inside		Outside			Inside		Outside
	#	%	#	%		$	%	$	%
Small Business
2019	79	86.8	12	13.2	91	29,062	82.8	6,050	17.2	35,112
2020	579	86.3	92	13.7	671	111,079	81.4	25,302	18.6	136,381
2021	268	83.8	52	16.3	320	54,544	74.8	18,360	25.2	72,904
Subtotal	926	85.6	156	14.4	1,082	194,685	79.7	49,712	20.3	244,397
Home Mortgage
2019	66	84.6	12	15.4	78	50,648	47.2	56,739	52.8	107,387
2020	106	76.3	33	23.7	139	93,329	40.2	138,605	59.8	231,933
2021	117	70.9	48	29.1	165	114,627	36.5	199,175	63.5	313,802
Subtotal	289	75.7	93	24.3	382	258,603	39.6	394,519	60.4	653,122
Total	1,215	83.0	249	17.0	1,464	453,288	50.5	444,231	49.5	897,519
Source: Bank Data Due to rounding, totals may not equal 100.0%

Geographic Distribution

The geographic distribution of loans reflects adequate penetration throughout the AAs. Performance is consistent in the Sacramento AA, and inconsistent in the Contra Costa AA. Refer to each respective analysis sections for details.

Borrower Profile

The distribution of borrowers reflects, given the product lines offered by the institution, adequate penetration among retail customers of different income levels and business customers of different revenue size. Performance was consistent in both AAs. Refer to respective analysis section for details.

Innovative or Flexible Lending Practices

RCB makes limited use of innovative or flexible lending practices in order to serve AA credit needs. RCB originated 1,078 innovative or flexible loans totaling $265.2 million during the review period. Loans originated under the SBA PPP are included in this analysis, and largely contributed to the significant increase in innovative or flexible lending since the prior examination where the bank originated 52 innovative or flexible loans totaling $5.0 million. The following list shows examples of RCB’s innovative and flexible lending programs:

• SBA PPP – The program was created in 2020 and structured to help small businesses and other organizations during the COVID-19 pandemic by providing fully forgivable loans that can be used to help preserve jobs and cover other specific business expenses. RCB originated 1,032 SBA PPP loans totaling $263.8 million during the review period.
• Sole Proprietor Line of Credit – This self-developed program is a $5,000 revolving line of credit product marketed directly to very small Sole Proprietorships. This product has simple credit score qualification requirements. The product carries an interest rate that is much lower than the credit card products normally sold to very small businesses as their main credit facility. The bank made 36 loans totaling $165,000 during the review period.
• Habitat for Humanity Loans – RCB developed the direct lending program with Habitat for Humanity (HFH) after the Habitat for Humanity Home Loan Purchase Program was discontinued in February 2018. The direct lending program continues to support the mission of HFH to build simple and affordable homes for low-income working families who lack adequate shelter. During the evaluation period, RCB originated 6 loans totaling approximately $1.1 million
• California Capital Loan Guarantee – This program is offered through the California Capital Financial Development Corporation (CCFDC). CCFDC’s mission is to increase economic opportunities for underserved communities and persons by offering a wide range of flexible financial products and services. The loan guarantee helps secure financing for small businesses unable to access mainstream financing. CCFDC guarantees range from $4,000 to $2.7 million for businesses with one to 300 employees. The bank makes limited use of this program and provided only 1 loan totaling $100,000 during the review period.

• Workforce Initiative Subsidy for Homeownership Program – In partnership with the Federal Home Loan Bank of San Francisco, the bank provides down-payment assistance loans to increase affordable housing opportunities for LMI homebuyers. During the evaluation period, RCB originated 3 loans totaling $66,000 under this program.

Community Development Loans

RCB made an adequate level of CD loans during the evaluation period. By year, RCB’s CD loan activity consisted of 3 CD loans totaling $8.8 million in 2019, 57 CD loans totaling $78.8 million in 2020, 31 CD loans totaling $52.2 million in 2021 and 7 CD loans totaling $2.4 million in year-to- date (YTD) 2022.

This level of activity represents 4.3 percent of average total assets and 5.7 percent of average total loans, which increased compared to the previous evaluation of 2.2 percent and 3.0 percent respectively. Performance by both number and dollar amount of CD loans increased since the previous evaluation. The current evaluation’s review period was 37 months compared to the previous evaluation’s review period of 34 months. As a result, examiners analyzed the percentage increase in RCB’s dollar volume of CD loans on an annualized basis for consistency purposes. Examiners noted that the institution’s CD lending increased by 179 percent on an annualized basis since the previous evaluation. The primary driver of increased performance is participation in SBA PPP. During the review period, the bank originated 61 CD qualified PPP loans totaling $77.4 million. The institution’s performance is in line with other institutions that operate in the AA. The majority of RCB’s CD lending by number of activities targeted revitalization and stabilization efforts followed by community services. CD lending varied among the AAs. The following table presents the bank's CD loans by purpose and AA.

Community Development Lending
Assessment Area	Affordable Housing		Community Services		Economic Development		Revitalize or Stabilize		Totals
	#	$(000s)	#	$(000s)	#	$(000s)	#	$(000s)	#	$(000s)
Sacramento AA	15	42,335	19	7,107	1	1,450	58	78,319	93	129,211
Contra Costa AA	0	0	1	3,250	0	0	0	0	1	3,250
Statewide Activities	2	5,000	2	4,000	0	0	0	0	4	9,000
Regional Activities	0	0	1	745	0	0	0	0	1	745
Total	17	47,335	23	15,102	1	1,450	58	78,319	99	142,206
Source: Bank Data

Given that the bank was responsive to the CD needs of its AAs, examiners considered qualified CD loans that benefitted areas located in the broader statewide or regional area that included the AAs, even if the activity did not have a purpose, mandate, or function of benefitting the institution’s AAs. The following are notable examples of CD lending efforts at the statewide and regional levels:

• RCB originated a $2.5 million loan to an organization who specializes in multifamily projects that benefit affordable housing for LMI individuals and families. This loan benefitted the Los Angeles County.
• RCB originated a $745,000 loan to an organization that provides youth education services to LMI children in Northern California and Nevada.

INVESTMENT TEST

The Investment Test is rated “Low Satisfactory.” The institution’s performance in the Sacramento AA is consistent with this conclusion. RCB’s performance in the Contra Costa AA is inconsistent with the overall performance conclusion.

Investment and Grant Activity

The institution has an adequate level of qualified CD investments and grants, although rarely in a leadership position, particularly those that are not routinely provided by private investors. RCB’s investments and grants represent an increase by dollar amount from the previous evaluation total of 171 qualified investments, grants, and donations totaling approximately $12.8 million. Outstanding qualified investments and donations totaled $7.2 million from prior period, $220,000 in 2019, $5.0 million in 2020, $5.0 million in 2021, and $3.1 million in 2022.

Total qualified investments represents 0.7 percent of average total assets and 3.7 percent of average total securities since the previous evaluation. This performance represents a slight increase from previous evaluation where qualified investments represented 0.5 percent of average total assets and 2.4 percent of average total securities. RC’s level of investment and grant activity is comparable to similarly situated institutions.

The majority of qualified investments benefited economic development, followed by affordable housing. The following table details qualified investments, grants, and donations by AA and CD type.

Community Development Investments by Assessment Area
Assessment Area	Affordable Housing		Community Services		Economic Development		Revitalize or Stabilize		Totals
	#	$(000s)	#	$(000s)	#	$(000s)	#	$(000s)	#	$(000s)
Sacramento	8	6,637	0	0	4	13,837	0	0	12	20,474
Contra Costa	1	987	0	0	0	0	0	0	1	987
Investments Subtotal	9	7,624	0	0	4	13,837	0	0	13	21,461
Qualified Grants and Donations	12	176	137	1,388	0	0	1	50	150	1,614
Total	21	7,800	137	1,388	4	13,837	1	50	163	23,075
Source: Bank Data

Responsiveness to Credit and Community Development Needs

The institution exhibits good responsiveness to credit and CD needs. RCB’s new and existing investment activity primarily supports economic development, an identified need in the Sacramento AA. In addition, new and existing investments also support affordable housing needs of the AAs. Affordable housing was an identified need in both the Sacramento, and Contra Costa AAs.

Community Development Initiatives

The institution occasionally uses innovative and/or complex investments to support CD initiatives. This is evidenced by RCBs investment in Low Income Housing Tax Credits, and Commercial Mortgage Backed Securities (CMBS), each supporting affordable housing in the AAs. Moreover, the bank participates in investments to small business investment companies (SBIC).

SERVICE TEST

RCB is rated “High-Satisfactory” in the Service Test. The institution’s performance in the Sacramento AA is consistent with this conclusion. RCB’s performance in the Contra Costa AA is inconsistent with the overall performance conclusion. Refer to each AA section for specific details.

Accessibility of Delivery Systems

Delivery systems are accessible to essentially all portions of the institution’s AAs. RCB operates nine licensed deposit-taking branch offices throughout the AAs: one in low-, three in moderate-, one in middle-, and four in upper-income CTs. All branch locations in the Sacramento AA offer walk-up ATM services.

The institution offers a variety of alternative delivery systems that are available to all customers. The institution’s website allows customers to access information on banking products and services, including checking and savings accounts, pay bills online, and transfer money. Examiners were provided with address information to determine the extent that internet banking serves LMI CTs. Examiners utilized the data that could be readily geocoded. Within the institution’s AA, 4,450 customers use internet banking. Of those, 745, or 16.7 percent of customers are located in LMI geographies. Moreover, 482, or 64.7 percent of customers located in LMI geographies that use internet-banking services are currently active. Internet-banking services benefit LMI geographies.

RCB also offers mobile banking, which allows customer access to accounts online to check balances on checking and savings accounts; transfer funds; access bill pay; and deposit checks. Examiners were provided with address information to determine the extent that mobile banking serves LMI CTs. Examiners utilized the data that could be readily geocoded. Within the institution’s AA, 2,405 customers use mobile banking. Of those, 424, or 17.6 percent of customers are located in LMI geographies. Data was unavailable to determine those customers currently active within the past 30-days. Internet-banking services benefit LMI geographies.

The institution also offers a customer service line with live representatives, available Monday through Friday from 8:00 am to 6:00 pm and Saturday from 9:00 am to 1:00 pm.

Changes in Branch Locations

To the extent changes have been made, RCB’s record of opening and closing of branches has generally not adversely affected the accessibility of its delivery systems, particularly in LMI geographies or to LMI individuals. During the evaluation period, the bank closed two branches, and relocated their headquarters in the Sacramento AA. Additionally, the bank closed one branch in the Contra Costa AA. Refer to each respective rated area for additional details.

Reasonableness of Business Hours and Services

Services do not vary in a way that inconveniences portions of the AAs, particularly LMI geographies or individuals. All branch locations are open Monday thru Friday 10:00 am. to 4:00 pm. Full-service branches offer an array of business and consumer deposit and lending products; refer to the Description of Institution for details. All branch locations are open Monday- Friday 10:00 am to 4:00 pm. Refer to each AA analysis for additional details.

Community Development Services

RCB provides a relatively high level of CD services in its AAs. Of the total 1,359 hours, 81 hours of service were provided in 2019; 322 hours of service were provided in 2020; 441 hours of service were provided in 2021; and 400 hours of service were provided in 2022. RCB’s performance represents 10.4 hours per full-time employee (FTE) at the current examination. This level of service hours per FTE is comparable or in some cases higher than other institutions operating in the AAs. The volume of CD service hours decreased slightly since the previous evaluation of 1,565 service hours. While overall service hours decreased, COVID-19 had a significant impact on employees' ability to provide services during early part of the review period. Service hours primarily targeted community services and affordable housing. Affordable housing represents an identified need throughout the AAs.

Community Development Services by Assessment Area
Assessment Area	Affordable Housing	Community Services	Economic Development	Revitalize or Stabilize	Totals
	#	#	#	#	#
Sacramento AA	248	961	35	0	1,244
Contra Costa AA	0	0	0	0	0
Statewide Activities	0	115	0	0	115
Total	248	1,076	35	0	1,359
Source: Bank Data

The following are notable examples of CD service efforts at the statewide level:

• Employees taught courses totaling 115 hours on banking to LMI students in Alameda County.

DISCRIMINATORY OR OTHER ILLEGAL CREDIT PRACTICES REVIEW

The bank’s compliance with the laws relating to discrimination and other illegal credit practices was reviewed, including the Fair Housing Act and the Equal Credit Opportunity Act. Examiners did not identify any discriminatory or other illegal credit practices.

SACRAMENTO AA– Full-Scope Review

DESCRIPTION OF INSTITUTION’S OPERATIONS IN SACRAMENTO

The Sacramento AA consists of Sacramento, Yolo, Placer, and El Dorado Counties comprising the Sacramento- Roseville- Folsom, CA MSA #40900. There have been no changes to the AA during the evaluation period.

Economic and Demographic Data

Based on the 2015 ACS Census data, the Sacramento AA consists of 486 CTs, which includes 46 low-, 115 moderate-, 161 middle-, and 161 upper- income CTs. Three CTs have no income designation. The following table provides a summary of demographic, housing, and business information within the Sacramento AA.

Demographic Information of the Assessment Area Assessment Area: Sacramento AA
Demographic Characteristics	#	Low % of #	Moderate % of #	Middle % of #	Upper % of #	NA* % of #
Geographies (Census Tracts)	486	9.5	23.7	33.1	33.1	0.6
Population by Geography	2,221,525	9.3	23.5	33.2	33.9	0.1
Housing Units by Geography	881,401	9.0	22.9	34.9	33.0	0.2
Owner-Occupied Units by Geography	471,937	4.5	18.3	34.9	42.2	0.0
Occupied Rental Units by Geography	325,198	14.8	29.7	33.9	21.1	0.4
Vacant Units by Geography	84,266	11.9	22.5	38.3	26.8	0.5
Businesses by Geography	203,717	9.2	22.4	29.9	36.7	1.8
Farms by Geography	5,002	5.5	18.7	33.1	42.2	0.6
Family Distribution by Income Level	529,877	23.6	16.3	18.3	41.8	0.0
Household Distribution by Income Level	797,135	25.4	15.5	17.1	42.0	0.0
Median Family Income MSA - 40900 Sacramento-Roseville-Folsom, CA MSA		$71,829	Median Housing Value			$293,578
			Median Gross Rent			$1,103
			Families Below Poverty Level			11.5%
Source: 2015 ACS and 2021 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.

Designated Disasters

During the evaluation period, the institution's AA experienced the following designated disasters that affected the economic conditions in the areas of bank operations:

California COVID-19 Pandemic - FEMA- 4482-DR, California Disaster Declaration as of March 22, 2020: All counties in California.

California Caldor Fire- FEMA-4619-DR, California Disaster Declaration as of December 14, 2021: El Dorado County.

California Wildfires- FEMA-4610-DR, California Disaster Declaration as of September 24, 2021: Placer County.

Unemployment

The Bureau of Labor Statistics (BLS) provides data on changes in unemployment rates. Unemployment rates in CA and the United States increased from 2019 to 2020. The state unemployment rate reflected similar percentages compared to AA trends. In 2020, the AA, state, and nation experienced significant increases in unemployment rates due to the onset of the COVID- 19 pandemic. As pandemic conditions receded in 2021, unemployment rates reflected moderate improvement. The following table illustrates the unemployment rates for the AA, CA, and nationwide for 2019, 2020, and 2021.

Unemployment Rates
Area	2019	2020	2021
	%	%	%
Sacramento County	4.1	12.4	7.4
Yolo County	4.2	7.8	5.8
Placer County	3.2	7.5	5.0
El Dorado County	3.6	8.5	5.7
State of CA	4.1	10.2	7.3
National Average	3.7	8.1	5.3
Source: BLS

The Federal Financial Institutions Examination Council (FFIEC) updates median family income on an annual basis. The low-, moderate-, middle-, and upper-income levels for the AA are presented in the following table.

Median Family Income Ranges
Median Family Incomes	Low <50%	Moderate 50% to <80%	Middle 80% to <120%	Upper ≥120%
Sacramento-Roseville-Folsom, CA MSA Median Family Income (40900)
2019 ($84,000)	<$42,000	$42,000 to <$67,200	$67,200 to <$100,800	≥$100,800
2020 ($86,700)	<$43,350	$43,350 to <$69,360	$69,360 to <$104,040	≥$104,040
2021 ($90,900)	<$45,450	$45,450 to <$72,720	$72,720 to <$109,080	≥$109,080
Source: FFIEC

Sacramento-Roseville-Folsom, CA

According to Moody’s Analytics as of October 2022, the Sacramento AA is currently experiencing employment rates that are further ahead than the pre-pandemic levels, although the overall growth has slowed since the beginning of the year. The healthcare industry continues to have strong hiring, accounting for the largest employment gains in the recent months. Jobs will continue to be added due to high demand. The public sector hiring has eased following an early recovery but remains majority of jobs added compared with the pre-pandemic jobs provided. Sacramento’s government presence is more than triple than the national average, which has set aside a budget surplus provided from the strong income tax revenues from its wealthiest residents. Half of the surplus has been set aside for education, including a five-year funding increase for the UC system. The housing affordability is strained as higher interest rates begin to weigh on housing demand. The single- family housing prices have climbed more than 20 percent in the past year, slightly faster than California. Mortgage prices are continuing to rise, which is projected to curb demand. The region’s top employers include University of California, Davis and UC Davis Health, Sutter Health, Kaiser Permanente, Dignity Health, and Intel Corp. The cost of living and doing business is above average at 114.0 percent. The state government, high tech, and the medical field are the main drivers of economic growth in the area.

Competition

The AA is highly competitive for financial services. According to the June 30, 2022 FDIC Deposit Market Share Report, 38 banks operate 328 branches and share a total of $74.7 million in deposits within the AA. The top 5 institutions control 73.8 percent of the AA’s deposit market share with a combined $55.1 million in deposits. The five largest financial institutions are Wells Fargo Bank, U.S. Bank, Bank of America, JPMorgan Chase Bank, and River City Bank. According to the same data, RCB operates 9 branches that maintain $3.2 million in deposits, representing 4.3 percent of the AA’s deposits and ranking 5th based on deposit market share.

Community Contact(s)

Examiners used an existing small business contact that serves the Sacramento area. The contact indicated that living costs and businesses costs are high in Sacramento. Although the costs are not as high as compared to other surrounding areas, there is a need for more capital for small business assistance. The small businesses in the area have been struggling since the first wave of COVID-19 hit; however, small businesses have started to recover beginning in January 2022. The contact also indicated that there is a primary need for small business assistance from banks. The contact would like to see more involvement from local financial institutions particularly in conducting workshops as well as educational assistance to small business owners.

The second existing contact was an affordable housing contact. The contact mentioned that the increase in rent has caused an increasing number of residents experiencing evictions and unaffordability. There was an indication that there is a housing shortage in the area and the contact also indicated a need for local financial institutions to provide more assistance to non-profit organizations. Additionally, local institutions could provide support to low-income individuals in purchasing a home and be more active in their participation within the community.

Credit and Community Development Needs and Opportunities

Considering information obtained from the community contact, bank management, and demographic and economic data, examiners determined that small business loans and affordable housing loans are primary credit need for the AA. Additionally, examiners identified affordable housing, revitalization/stabilize, and community service (financial education) as CD needs.

CONCLUSIONS ON PERFORMANCE CRITERIA IN SACRAMENTO

LENDING TEST

Lending Test for the Sacramento AA is adequate. Lending levels reflect good responsiveness, the geographic distribution of loans reflects adequate penetration, the distribution of borrowers reflects adequate penetration, and RCB made an adequate level of CD loans.

Lending Activity

Lending levels reflect good responsiveness to AA credit needs. RCB originated or purchased 904 small business loans totaling $187.3 million; 241 home mortgage loans totaling $196.3 million; and 93 CD loans totaling $129.2 million during this evaluation period.

According to aggregate small business data, in 2019, RCB ranked 44th out of 146 lenders that reported 58,558 small business loans in the AA, giving the bank a market share of 0.13 percent by number, and 1.6 percent by dollar. In 2020, RCB ranked 19th out of 208 lenders that reported 60,963 small business loans in the AA, giving the institution a market share of 0.9 percent by number, and 3.6 percent by dollar.

The bank’s small business lending activity performance trended upward over the review period, with a slight decrease in 2021. RCB performance is comparable to, or on the higher end of peer institutions. The net total number of lenders reporting small business loans in the AA grew by 20.6 percent compared to previous evaluation numbers. The number of total loans made in the AA increased by 55.2 percent since the previous examination. The number of lenders competing for small business loans grew during the evaluation period. Bank performance since the prior examination increased.

According to peer home mortgage data, in 2019, RCB ranked 175th out of 671 lenders that reported 114,896 originated or purchased home mortgage loans in the AA, giving the bank a market share o0.05 percent by number and 0.1 percent by dollar. In 2020, RCB no longer met the threshold to report data; therefore, its lending levels were not included in the institution market share reports. Examiners considered market share lending levels of aggregate lenders as performance context to better understand the bank’s level of lending in the AA. In 2020, the bank increased its home mortgage lending performance to 95 originated loans totaling $59,824 compared to 61 loans totaling $43,355 in the prior year. RCB’s performance decreased in relation to the 733 lenders that reported 182,717 total loans in the market. In 2021, home mortgage lending levels decreased to 85 originated or purchased loans totaling $39,099; however, performance remained similar to the prior year in relation to the 750 lenders that reported 176,224 total loans in the market.

The bank's home mortgage lending activity performance trended upward across the evaluation period, with a slight decline in 2021. Performance in 2020 sharply increased by number and dollar when compared to the previous year. Since the previous evaluation, the total number of lenders in the market grew by 15.8 percent, while the total number of loans grew by 97.0 percent.

Geographic Distribution

The institution’s geographic distribution of loans reflects adequate penetration throughout the AA. Good penetration of small business and poor penetration of home mortgage loans support this conclusion.

Small Business Loans

The geographic distribution of small business loans reflects good penetration throughout the AA. RCB’s lending in low-income tracts exceeded both demographic and aggregate performance throughout the years of analysis with an upward trend across all years. The institution’s lending penetration of moderate-income tracts is comparable to aggregate performance.

Geographic Distribution of Small Business Loans Assessment Area: Sacramento AA
Tract Income Level	% of Businesses	Aggregate Performance % of #	#	%	$(000s)	%
Low
2019	9.1	7.9	7	9.2	5,610	20.5
2020	9.2	8.8	77	13.7	19,379	18.0
2021	9.2	--	37	14.1	9,886	18.8
Moderate
2019	20.4	19.7	15	19.7	6,176	22.6
2020	21.0	19.8	114	20.2	25,424	23.7
2021	22.4	--	45	17.1	10,700	20.4
Middle
2019	30.9	29.5	29	38.2	5,937	21.7
2020	30.6	29.2	153	27.1	23,811	22.2
2021	29.9	--	72	27.4	11,238	21.4
Upper
2019	37.8	42.0	20	26.3	7,114	26.0
2020	37.4	41.0	205	36.3	35,877	33.4
2021	36.7	--	104	39.5	18,705	35.6
Not Available
2019	1.8	1.0	5	6.6	2,500	9.1
2020	1.8	1.2	15	2.7	2,924	2.7
2021	1.8	--	5	1.9	1,995	3.8
Totals
2019	100.0	100.0	76	100.0	27,337	100.0
2020	100.0	100.0	564	100.0	107,415	100.0
2021	100.0	--	263	100.0	52,524	100.0
Source: 2019, 2020 & 2021 D&B Data; Bank Data; 2019 & 2020 CRA Aggregate Data, "--" data not available. Due to rounding, totals may not equal 100.0%

Home Mortgage

The geographic distribution of home mortgage loans reflects poor penetration throughout the AA. RCB’s performance in low-income geographies trailed the percent of owner-occupied housing each year, with an upward trend in 2021 that was comparable to demographic data. Examiners considered the performance level of aggregate lenders to better understand demand for loans. Aggregate lenders were able to achieve higher rates of lending to low-income areas in each year at 5.5, 4.5, and 5.1 percent in 2019, 2020, and 2021, respectively. Performance in moderate-income CTs increases across the years of analysis; however, significantly trails the percentage of owner occupied housing units in each year. Aggregate lending levels were 17.2, 14.9, and 16.7 percent in 2019, 2020, and 2021, respectively. Aggregate lenders achieved higher rates of lending in moderate-income CTs in 2019 and 2020; however, RCB has similar performance in 2021.

Geographic Distribution of Home Mortgage Loans Assessment Area: Sacramento AA
Tract Income Level	% of Owner- Occupied Housing Units	#	%	$(000s)	%
Low
2019	4.5	2	3.3	328	0.8
2020	4.5	2	2.1	2,012	3.4
2021	4.5	5	4.6	5,641	6.1
Moderate
2019	18.3	3	4.9	584	1.3
2020	18.3	7	7.4	7,803	13.0
2021	18.3	18	16.5	9,111	9.8
Middle
2019	34.9	13	21.3	12,533	28.9
2020	34.9	20	21.1	13,861	23.2
2021	34.9	37	33.9	44,092	47.4
Upper
2019	42.2	42	68.9	29,489	68.0
2020	42.2	66	69.5	36,149	60.4
2021	42.2	49	45.0	34,256	36.8
Not Available
2019	0.0	1	1.6	401	0.9
2020	0.0	0	0.0	0	0.0
2021	0.0	0	0.0	0	0.0
Totals
2019	100.0	61	100.0	43,335	100.0
2020	100.0	95	100.0	59,824	100.0
2021	100.0	109	100.0	93,099	100.0
Source: 2015 ACS; Bank Data, "--" data not available. Due to rounding, totals may not equal 100.0%

Borrower Profile

The distribution of borrowers reflects adequate penetration among business customers of different revenue sizes, and retail customers of different income levels. Adequate small business performance and poor home mortgage performance support this conclusion.

Small Business

The distribution of borrowers reflects adequate penetration to businesses with revenues of $1 million or less. The bank’s lending to small businesses in 2019 was below aggregate levels. In 2020, the bank’s performance slightly declined while aggregate performance significantly decreased to levels more comparable to bank performance. In 2021, the bank’s performance increased to its highest level of performance across the years of analysis. While bank performance is slightly below aggregate lenders during the review period, examiners considered additional performance context.

First, due to the bank’s participation in the SBA PPP lending program, there are a significant number of revenue not available loans. Although they were not required to, the bank did not report gross annual revenues for some of the loans originated under the SBA PPP. Of the 564 loans made to small businesses in 2020, 483 of them were made under the SBA PPP. Of the 263 loans made to small business in 2021, 202 of them were made under the SBA PPP. To neutralize the impact of SBA PPP lending, examiners adjusted the performance ratio by excluding these loans from the total lending. When SBA PPP loans were excluded from the analysis for 2020 and 2021, lending penetration declined to 29.6 percent and 31.1 percent, respectively. This analysis revealed that the bank’s participation in the SBA PPP where revenues were collected showed an increase in the bank’s performance.

In addition, as stated in the innovative and flexible product section, the bank developed a sole proprietor-lending program that grants smaller dollar loans to very small businesses with gross annual revenues of less than $1.0 million, enhancing their access to capital. During the review period, the bank originated 36 loans under this program totaling $165, 0000. With an average loan origination amount of less than $5,000, the bank demonstrated its willingness to lend a small dollar loan to small businesses. Considering this additional performance context and an upward trend in performance in 2021, the overall, performance is considered adequate.

Distribution of Small Business Loans by Gross Annual Revenue Category Assessment Area: Sacramento AA
Gross Revenue Level	% of Businesses	Aggregate Performance % of #	#	%	$(000s)	%
<=$1,000,000
2019	87.1	50.0	31	40.8	6,714	24.6
2020	87.4	41.3	216	38.3	12,959	12.1
2021	88.8	--	108	41.1	8,620	16.4
>$1,000,000
2019	4.1	--	45	59.2	20,623	75.4
2020	3.9	--	240	42.6	81,431	75.8
2021	3.3	--	119	45.2	40,378	76.9
Revenue Not Available
2019	8.8	--	0	0.0	0	0.0
2020	8.7	--	108	19.1	13,025	12.1
2021	7.9	--	36	13.7	3,526	6.7
Totals
2019	100.0	100.0	76	100.0	27,337	100.0
2020	100.0	100.0	564	100.0	107,415	100.0
2021	100.0	--	263	100.0	52,524	100.0
Source: 2019, 2020 & 2021 D&B Data; Bank Data; 2019 & 2020 CRA Aggregate Data; "--" data not available. Due to rounding, totals may not equal 100.0%

Home Mortgage

The distribution of borrowers reflects poor penetration among retail customers of different income levels. RCB’s performance to low-income borrowers significantly trailed the percent of low- income families in each year. Examiners considered the performance level of aggregate lenders to better understand demand for loans. Aggregate lending levels of 3.4, 3.2, and 4.2 percent in 2019, 2020, and 2021, respectively demonstrated limited ability to lend to low-income borrowers during the years of analysis. RCB’s performance in 2020, was comparable to aggregate. In 2021, RCB’s performance exceeded aggregate lending levels. Performance to moderate-income borrowers significantly trails the percentage of moderate-income families in 2019 and 2020; however, in 2021, the bank’s performance was comparable to percentage of moderate-income families. Aggregate lending levels were 13.1, 12.5, and 13.7 percent in 2019, 2020, and 2021, respectively. Aggregate lenders achieved higher rates of lending to moderate-income borrowers in each year until 2021 where bank performance achieved slightly higher level of lending.

Distribution of Home Mortgage Loans by Borrower Income Level Assessment Area: Sacramento AA
Borrower Income Level	% of Families	#	%	$(000s)	%
Low
2019	23.6	1	1.6	110	0.3
2020	23.6	3	3.2	537	0.9
2021	23.6	8	7.3	1,299	1.3
Moderate
2019	16.3	4	6.6	552	1.3
2020	16.3	5	5.3	931	1.6
2021	16.3	18	16.5	4,515	4.5
Middle
2019	18.3	11	18.0	2,111	4.9
2020	18.3	9	9.5	1,892	3.2
2021	18.3	11	10.1	2,514	2.5
Upper
2019	41.8	36	59.0	20,001	46.2
2020	41.8	70	73.7	40,570	67.8
2021	41.8	56	51.4	32,133	32.0
Not Available
2019	0.0	9	14.8	20,560	47.4
2020	0.0	8	8.4	15,895	26.6
2021	0.0	16	14.7	59,885	59.7
Totals
2019	100.0	61	100.0	43,335	100.0
2020	100.0	95	100.0	59,824	100.0
2021	100.0	109	100.0	100,347	100.0
Source: 2015 ACS; Bank Data, "--" data not available. Due to rounding, totals may not equal 100.0%

Community Development Loans

RCB made an adequate level of CD loans in the Sacramento AA. The institution’s performance in the AA increased since the previous evaluation, where RCB made 21 CD loans totaling $46.4 million. On an annualized basis, the institution’s CD lending increased by 153.5 percent, primarily driven by SBA PPP lending. The majority of CD loans targeted revitalization or stabilization efforts. Lending also benefitted affordable housing, an identified credit need within the AA. The following table illustrates the bank’s CD lending activity by year and CD category.

Community Development Lending Sacramento
Activity Year	Affordable Housing		Community Services		Economic Development		Revitalize or Stabilize		Totals
	#	$(000s)	#	$(000s)	#	$(000s)	#	$(000s)	#	$(000s)
2019	1	4,550	1	1,000	0	0	0	0	2	5,550
2020	2	1,850	4	1,000	1	1,450	48	69,948	55	74,248
2021	10	35,635	8	2,957	0	0	10	8,371	28	46,963
YTD 2022	2	300	6	2,150	0	0	0	0	8	2,450
Total	15	42,335	19	7,107	1	1,450	58	78,319	93	129,211
Source: Bank Data

The following are notable examples of CD loans in the Sacramento AA:

• In 2020 and 2021, RCB originated 54 loans totaling $71.2 million in loans to the SBA PPP program that met the primary purpose of CD under revitalization stabilization, community service, and affordable housing.

• In 2022, RCB originated a $300,000 loan to a nonprofit organization that offers both financial and non-financial services to help the homeless and those at risk of homelessness in the AA.

• In 2022, RCB originated a $250,000 loan to a non-profit organization that supports affordable housing to LMI families in the AA.

INVESTMENT TEST

RCB has an adequate level of qualified CD investments and grants, although rarely in a leadership position, particularly those that are not routinely provided by private investors. The institution exhibits good responsiveness to credit and CD needs. RCB occasionally uses innovative and/or complex investments to support CD initiatives.

Investment and Grant Activity

The institution has an adequate level of qualified CD investments and grants, although rarely in a leadership position, particularly those that are not routinely provided by private investors. During the evaluation period, RCB made 5 new investments totaling $13.3 million, retained 7 investments totaling $7.2 million, and made 141 grants and donations totaling $1.4 million. Performance increased compared to the previous evaluation where RCB made 9 investments totaling $8.6 million, and 159 grants and donations totaling $1.2 million. Similar to the previous evaluation, the majority of RCB’s investments benefited affordable housing by number, an identified AA need, followed by economic development initiatives. Performance was comparable to other institutions that operate in the market. The following table details RCB’s investments and donations by year and CD type.

Qualified Investments Sacramento AA
Activity Year	Affordable Housing		Community Services		Economic Development		Revitalize or Stabilize		Totals
	#	$(000s)	#	$(000s)	#	$(000s)	#	$(000s)	#	$(000s)
Prior Period	6	3,350	0	0	1	3,837	0	0	7	7,187
2019	1	220	0	0	0	0	0	0	1	220
2020	0	0	0	0	1	5,000	0	0	1	5,000
2021	0	0	0	0	2	5,000	0	0	2	5,000
YTD 2022	1	3,067	0	0	0	0	0	0	1	3,067
Subtotal	8	6,637	0	0	4	13,837	0	0	12	20,474
Qualified Grants & Donations	12	176	128	1,173	0	0	1	50	141	1,399
Total	20	6,813	128	1,173	4	13,837	1	50	153	21,873
Source: Bank Data

Listed below are some notable examples of qualified investments and donations made by the bank within this AA:

• In 2022, RCB made an investment in a mortgage-backed security pool totaling $3 million that benefitted LMI households in the AA.

• Throughout the review period, RCB donated a total of $118,000 to a nonprofit organization that is dedicated to eliminating substandard housing locally through constructing, rehabilitating and preserving homes; by advocating for fair and just housing policies; and by providing training and access to resources to help LMI families improve their shelter conditions. This donation benefits the identified CD need affordable housing.
• In 2020, RCB invested $5 million in a SBIC fund benefitting economic development, an identified CD need.

Responsiveness to Credit and Community Development Needs

The institution exhibits good responsiveness to credit and CD needs. Bank investments primarily benefitted economic development, an identified CD need in the AA. The bank primarily realized prior period investment commitments to SBIC funds, whose purpose is to make equity and debt investments in qualifying small businesses in the AA. In addition, the bank invested in three additional SBIC funds during the review period. RCB also supported affordable housing, which is a primary CD need for the AA. Specifically, RCB’s investment supported seven MBS benefitting LMI borrowers, and one CMBS that promotes affordable housing by setting aside units for LMI families in the AA.

Community Development Initiatives

The institution occasionally uses innovative and complex investments to support CD initiatives. Refer to the bank-wide AA analysis for further detail.

SERVICE TEST

Delivery systems are accessible to essentially all portions of the Sacramento AA. To the extent changes have been made, the institution’s opening and closing of branches has generally not adversely affected the accessibility of its delivery systems. Services, including business hours, do not vary in a way that inconveniences portions of the AA. RCB employees provided a relatively high level of CD services.

Accessibility of Delivery Systems

Delivery systems are accessible to essentially all portions of the Sacramento AA. The AA branch distribution and alternative delivery systems are consistent with the institution overall. RCB operates nine full-service branches in the Sacramento AA. The percentage of branches located in low-income CTs is above the 5.3 percent of branches other institutions operate. Performance is also above the percentage of households, families, and businesses located in low-income geographies. The percentage of branches located in moderate-income CTs is above the 25.4 percent of other institution branches that operate in the AA, as well as the percentage of households, families, and businesses located in moderate-income geographies. In addition, several of the branches in middle- and upper-income CTs have the ability to serve nearby LMI geographies. The following table shows the distribution of CTs, population, RCB branches, and RCB ATMs in the AA by income level.

Branch and ATM Distribution by Geography Income Level
Tract Income Level	Census Tracts		Population		Branches		ATMs
	#	%	#	%	#	%	#	%
Low	46	9.5	207,262	9.3	1	11.1	1	11.1
Moderate	115	23.7	521,223	23.5	3	33.3	3	33.3
Middle	161	33.1	737,182	33.2	1	11.1	1	11.1
Upper	161	33.1	753,681	33.9	4	44.4	4	44.4
NA	3	0.6	2,177	0.1	0	0.0	0	0.0
Total	486	100.0	2,221,525	100.0	9	100.0	9	100.0
Source: 2015 ACS Data; Bank Data

Changes in Branch Locations

To the extent changes have been made, RCB’s opening and closing of branches has generally not adversely affected the accessibility of its delivery systems, particularly in LMI geographies or to LMI individuals. During the evaluation period, RCB closed two branch locations in the AA; one in an upper-income CT, and one in a NA-income CT. While these branches also served LMI geographies, the closures are partially mitigated by active RCB branches between 2.3 and 4.3 miles away. In addition, the bank relocated its main headquarters; however, the new location is in the same moderate-income CT across the street from the former location. The bank did not open any branch in the AA during the evaluation period.

Reasonableness of Business Hours and Services

Services, including business hours, do not vary in a way that inconveniences portions of the AA, particularly LMI geographies and individuals. Products and services offered in the AA are consistent with the institution overall. Of the institution’s nine full-service branches, one is located in low-, and three are located in moderate-income geographies. Branch hours for all locations are Monday through Friday from 10:00 a.m. to 4:00 p.m. All branch locations offer walk-up ATM services. Hours of operation have changed significantly from the prior evaluation due to the COVID-19 pandemic. RCB services, including alternative delivery systems, are available at each full-service branch and are consistent with the discussion at the overall institution level.

Community Development Services

RCB provides a relatively high level of CD services in Sacramento. As described under the bank- wide AA, the Sacramento AA received the greatest weight and RCB’s CD service hours per FTE is comparable or in some instances higher than other institutions operating in the area. While service hours decreased compared to the prior evaluation of 1,531 hours, COVID-19 had a significant impact on the bank’s ability to provide CD services during early part of the evaluation period. Bank employees primarily provided qualified services to support community service and affordable housing, which were both identified AA needs. The following table details RCB’s CD service activity by year and CD purpose.

Community Development Services Sacramento AA
Assessment Area	Affordable Housing	Community Services	Economic Development	Revitalize or Stabilize	Totals
	#	#	#	#	#
2019	4	75	2	0	81
2020	17	287	18	0	322
2021	31	395	15	0	441
YTD 2022	196	204	0	0	400
Total	248	961	35	0	1,244
Source: Bank Data

The following are notable examples of CD services provided in the AA.

• A RCB employee serves on the board of an affordable housing organization that provides financial counseling to LMI individuals and increase opportunities available for low-income families and individuals in obtaining decent, safe, and sanitary affordable housing in Placer County.

• RCB employees serve on the board of a foundation that makes grants to various charitable organizations in the community including, but not limited to, education institutions, hospitals, cultural activities and groups for the benefit of LMI children.

CONTRA COSTA AA– Full-Scope Review

DESCRIPTION OF INSTITUTION’S OPERATIONS IN CONTRA COSTA

The Contra Costa AA consists solely of Contra Costa County and partially comprises the Oakland- Berkeley-Livermore MD #36084.

Economic and Demographic Data

Based on the 2015 ACS Census data, the Contra Costa AA consists of 208 CTs, which includes 23 low-, 50 moderate-, 58 middle-, and 76 upper-income CTs. One CT has no income designation. LMI CTs account for 11.1 percent and 24.0 percent, respectively, of the total number of CTs in the Contra Costa AA. The following table provides a summary of demographic, housing, and business information within the Contra Costa AA:

Demographic Information of the Assessment Area Assessment Area: Contra Costa AA
Demographic Characteristics	#	Low % of #	Moderate % of #	Middle % of #	Upper % of #	NA* % of #
Geographies (Census Tracts)	208	11.1	24.0	27.9	36.5	0.5
Population by Geography	1,096,068	11.4	22.2	30.1	36.3	0.0
Housing Units by Geography	405,001	10.5	22.8	29.6	37.0	0.0
Owner-Occupied Units by Geography	248,668	5.1	20.0	29.4	45.5	0.0
Occupied Rental Units by Geography	135,978	19.8	26.7	30.5	23.1	0.0
Vacant Units by Geography	20,355	15.0	31.2	27.1	26.6	0.0
Businesses by Geography	84,445	6.6	17.8	29.1	46.5	0.0
Farms by Geography	1,661	5.8	18.7	30.0	45.5	0.0
Family Distribution by Income Level	273,149	23.0	16.4	18.3	42.3	0.0
Household Distribution by Income Level	384,646	23.9	15.1	16.8	44.2	0.0
Median Family Income MSA - 36084 Oakland-Berkeley-Livermore, CA		$93,822	Median Housing Value			$472,294
			Median Gross Rent			$1,483
			Families Below Poverty Level			7.8%
Source: 2015 ACS and 2019 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.

Designated Disaster Areas

During the evaluation period, the institution's AAs experienced the following designated disasters, which impacted the economic conditions in the area of bank operations:

California COVID-19 Pandemic - FEMA- 4482-DR, California Disaster Declaration as of March 22, 2020: All counties in California

Unemployment

The BLS provides data on changes in unemployment rates. Unemployment rates for the Contra Costa County, state of CA, and national average, decreased in 2019 compared to 2018. The Contra Costa AA shows lower unemployment rates for both years compared to the state and national average. The following table illustrates the unemployment rates for the AA, state of CA, and nationwide for 2018 and 2019.

Area	2018	2019
	%	%
Contra Costa County	3.2	2.9
State of CA	4.3	4.1
National Average	3.9	3.7

The FFIEC updates median family income on an annual basis. The low-, moderate-, middle-, and upper-income levels for the AA are presented in the following table.

Median Family Income Ranges
Median Family Incomes	Low <50%	Moderate 50% to <80%	Middle 80% to <120%	Upper ≥120%
Oakland-Berkeley-Livermore, CA Median Family Income (36084)
2019 ($111,700)	<$55,850	$55,850 to <$89,360	$89,360 to <$134,040	≥$134,040
Source: FFIEC

Oakland-Berkeley-Livermore, CA

According to Moody’s Analytics as of November 2019, the Oakland-Hayward-Berkeley area (including the Contra Costa AA) was in the late expansion stage of the business cycle. Job growth in the AA reaccelerated in 2019 because of increase demand for tech jobs. The area remained an affordable option for firms seeking to be near Silicon Valley without paying the high prices of being in the city. There was an increase in tech firms moving into the area to escape the high costs of Silicon Valley as well as easy access to infrastructure for transportation and distribution facilities. The U.S. and China trade conflict led to cargo volumes slowing at the ports of the Oakland- Hayward-Berkeley area, which is among the nation’s largest seaports and is highly exposed to the Chinese market. The housing prices continued to be less affordable, as the area was one of the least affordable places in the country regardless of the business cycle. Lack of affordable housing supply led to higher housing prices. The housing affordability is comparable to California’s housing affordability but is still less affordable than the U.S.’s housing affordability. The region’s top employers include University of California, Berkeley, Safeway Inc., Kaiser Permanente, Tesla, and Chevron Corp. The cost of living and doing business is above average at 147.0 percent. The federal government, high tech, and the medical field were the main drivers of economic growth in the area.

Competition

The AA is highly competitive for financial services. According to the June 30, 2019 FDIC Deposit Market Share Report, 34 banks operate 218 branches and share a total of $52.8 million in deposits within the AA. The top 5 institutions control 78.0 percent of the AA’s deposit market share with a combined $41.2 million in deposits. The five largest financial institutions are Bank of the West, Wells Fargo Bank, Bank of America, JPMorgan Chase Bank, and Mechanics Bank. According to the same data, RCB operates 1 branch that maintain $0 in deposits, representing 0.0 percent of the AA’s deposits and ranking 34th based on deposit market share.

Community Contact

Examiners used an existing affordable housing community contact from 2019 that serves Contra Costa County. The contact indicated that the affordable housing situation in the area was worsening as gentrification has been increasing and those struggling to get by cannot qualify for homes. Since the State of California ceased operating local redevelopment agencies, the remaining funding sources for affordable housing have become extremely competitive and local organizations were struggling to receive that funding. There had been many instances where a client would complete the financial education requirements for a grant or subsidy loan only to find out that the funds had been depleted. The contact mentioned that he/she would like to see all institutions in the area actively participate and help nonprofit organization when they reach out for assistance with workshops and donations.

Credit and Community Development Needs and Opportunities

Considering information obtained from the community contact, bank management, and demographic and economic data, examiners determined that affordable housing funding and community services are primary credit needs for the AA.

CONCLUSIONS ON PERFORMANCE CRITERIA IN CONTRA COSTA

LENDING TEST

Lending levels within the Contra Costa AA reflect poor responsiveness. The geographic distribution of loans reflects very poor penetration. The distribution of borrowers reflects adequate penetration. RCB made few, if any CD loans in the AA.

Lending Activity

Lending levels reflect poor responsiveness to AA credit needs. RCB originated or purchased 3 small business loans totaling $1.7 million; 5 home mortgage loans totaling $7.3 million; and 1 CD loan totaling $3.25 million during this evaluation period.

According to aggregate small business data, in 2019 RCB ranked 77th out of 126 lenders that reported 31,071 small business loans in the AA, giving the bank a market share of 0.01 percent by number, and 0.2 percent by dollar.

The bank’s small business lending activity performance increased slightly from the prior evaluation where the bank originated or purchased one loan in 2017 and one loan in 2018. RCB performance is on the lower end of peer institutions. The net total number of lenders reporting small business loans in the AA grew by 10.5 percent compared to previous evaluation numbers. The number of total loans made in the AA increased by 18.6 percent since the previous examination. There was more loan growth in the AA than growth in competition.

According to peer home mortgage data, in 2019, RCB ranked 335th out of 578 lenders that reported 57,066 originated or purchased home mortgage loans in the AA, giving the bank a market share of 0.01 percent by number and 0.03 percent by dollar.

While home mortgage lending activity performance improved slightly from the prior evaluation where the bank originated or purchased two loans in 2017 and one loan in 2018, total lending levels remain low. RCB performance is also on the lower end of peer institutions. Since the previous evaluation, the total number of lenders in the market grew by 31.4 percent, while the total number of loans grew by 2.6 percent. The bank was able to capture some of the growth in loan opportunity in 2019.

Geographic Distribution

RCB’s geographic distribution of loans reflects very poor penetration throughout the AA, particularly to LMI geographies in the AA. This conclusion is supported by very poor performance in small business and home mortgage loans.

Small Business Loans

The geographic distribution of small business loans reflects very poor penetration throughout the AA, as depicted in the following table. RCB’s dispersion of loans did not benefit LMI CTs during the review period. The aggregate performance and the percentage of businesses show available lending opportunities within the LMI CTs in the AA.

Geographic Distribution of Small Business Loans Assessment Area: Contra Costa AA
Tract Income Level	% of Businesses	Aggregate Performance % of #	#	%	$(000s)	%
Low
2019	6.6	5.9	0	0.0	0	0.0
Moderate
2019	17.8	17.1	0	0.0	0	0.0
Middle
2019	29.1	28.9	2	66.7	815	47.2
Upper
2019	46.5	48.1	1	33.3	910	52.8
Not Available
2019	0.0	0.0	0	0.0	0	0.0
Totals
2019	100.0	100.0	3	100.0	1,725	100.0
Source: 2019 D&B Data; Bank Data; 2019 CRA Aggregate Data; "--" data not available. Due to rounding, totals may not equal 100.0%

Home Mortgage Loans

The geographic distribution of home mortgage loans reflects very poor penetration throughout the AA, as depicted in the following table. RCB’s dispersion of loans did not benefit LMI CTs during the review period, which compares unfavorably to the percentage of owner-occupied housing units.

Geographic Distribution of Home Mortgage Loans Assessment Area: Sacramento AA
Tract Income Level	% of Owner- Occupied Housing Units	#	%	$(000s)	%
Low
2019	4.5	2	3.3	328	0.8
2020	4.5	2	2.1	2,012	3.4
2021	4.5	5	4.6	5,641	6.1
Moderate
2019	18.3	3	4.9	584	1.3
2020	18.3	7	7.4	7,803	13.0
2021	18.3	18	16.5	9,111	9.8
Middle
2019	34.9	13	21.3	12,533	28.9
2020	34.9	20	21.1	13,861	23.2
2021	34.9	37	33.9	44,092	47.4
Upper
2019	42.2	42	68.9	29,489	68.0
2020	42.2	66	69.5	36,149	60.4
2021	42.2	49	45.0	34,256	36.8
Not Available
2019	0.0	1	1.6	401	0.9
2020	0.0	0	0.0	0	0.0
2021	0.0	0	0.0	0	0.0
Totals
2019	100.0	61	100.0	43,335	100.0
2020	100.0	95	100.0	59,824	100.0
2021	100.0	109	100.0	93,099	100.0
Source: 2015 ACS; Bank Data, "--" data not available. Due to rounding, totals may not equal 100.0%

Borrower Profile

The distribution of borrowers reflects adequate penetration among retail customers of different income levels and business customers of different revenue size. Excellent small business performance and very poor home mortgage support this conclusion.

Small Business Loans

The distribution of small business borrowers reflects excellent penetration among business customers of different revenue sizes, as depicted in the following table. RCB originated 3 loans totaling $1,725 million. All small business originations in the AA in 2019 were to businesses with revenues of $1 million or less.

Distribution of Small Business Loans by Gross Annual Revenue Category Assessment Area: Contra Costa AA
Gross Revenue Level	% of Businesses	Aggregate Performance % of #	#	%	$(000s)	%
<=$1,000,000
2019	88.4	51.5	3	100.0	1,725	100.0
>$1,000,000
2019	4.0	--	0	0.0	0	0.0
Revenue Not Available
2019	7.6	--	0	0.0	0	0.0
Totals
2019	100.0	100.0	3	100.0	1,725	100.0
Source: 2019D&B Data; Bank Data; 2019 CRA Aggregate Data; "--" data not available. Due to rounding, totals may not equal 100.0%

Home Mortgage Loans

The distribution of borrowers reflects very poor penetration among retail customers of different income levels, as depicted in the table below. RCB’s home mortgage lending did not benefit LMI borrowers.

Geographic Distribution of Home Mortgage Loans Assessment Area: Contra Costa AA
Tract Income Level	% of Owner- Occupied Housing Units	#	%	$(000s)	%
Low
2019	5.1	0	0.0	0	0.0
Moderate
2019	20.0	0	0.0	0	0.0
Middle
2019	29.4	1	20.0	3,125	42.7
Upper
2019	45.5	4	80.0	4,188	57.3
Not Available
2019	0.0	0	0.0	0	0.0
Totals
2019	100.0	5	100.0	7,313	100.0
Source: 2015 ACS; Bank Data, "--" data not available. Due to rounding, totals may not equal 100.0%

Community Development Loans

The institution has made few, if any, CD loans. During the evaluation period, the institution originated one CD loan in the AA. While this represents an increase in CD loans from the prior evaluation where the bank did not originate CD loans in the AA, this level still represents limited activity.

Community Development Lending Contra Costa
Activity Year	Affordable Housing		Community Services		Economic Development		Revitalize or Stabilize		Totals
	#	$(000s)	#	$(000s)	#	$(000s)	#	$(000s)	#	$(000s)
2019	0	0	1	3,250	0	0	0	0	1	3,250
1/1/2020 to 4/30/2020	0	0	0	0	0	0	0	0	0	0
Total	0	0	1	3,250	0	0	0	0	1	3,250
Source: Bank Data

The following is an example of a CD loan in the Contra Costa AA:

• In 2019, RCB originated a $3.3 million loan to fund a library located in a low-income CT. The library offers a variety of services to LMI residents.

INVESTMENT TEST

RCB has an adequate level of qualified CD investments and grants. The bank exhibits adequate responsiveness to credit and CD needs. RCB rarely uses innovative or complex investments to support CD initiatives.

Investment and Grant Activity

RCB has an adequate level of qualified CD investments and grants, although rarely in a leadership position, particularly those that are not routinely provided by private investors. In 2019, RCB made 1 investment totaling $987,000 benefiting affordable housing in the AA, an identified CD need.

RCB did not make any donations in the AA during the review period.

Qualified Investments Contra Costa AA
Activity Year	Affordable Housing		Community Services		Economic Development		Revitalize or Stabilize		Totals
	#	$(000s)	#	$(000s)	#	$(000s)	#	$(000s)	#	$(000s)
Prior Period	0	0	0	0	0	0	0	0	0	0
2019	1	987	0	0	0	0	0	0	1	987
1/1/2020 to 4/30/2020	0	0	0	0	0	0	0	0	0	0
Subtotal	1	987	0	0	0	0	0	0	1	987
Qualified Grants & Donations	0	0	0	0	0	0	0	0	0	0
Total	1	987	0	0	0	0	0	0	1	987
Source: Bank Data

Listed below is a qualified investment made by the bank within this AA:

• In 2019, RCB made a $986,557 investment in a CMBS multifamily housing project that supports affordable housing in the AA.

Responsiveness to Credit and Community Development Needs

RCB exhibits adequate responsiveness to credit and CD needs. The one investment made during the review period supported affordable housing, which is a primary CD need for the AA.

Community Development Initiatives

RCB rarely uses innovative or complex investments to support CD initiatives. As previously noted, RCB made one CMBS that supported affordable housing, while the investment was responsive to AA needs, the investment is not considered particularly innovative or complex.

SERVICE TEST

Delivery systems are accessible to limited portions of the AA. To the extent changes have been made, RCB’s opening and closing of branches has generally not adversely affected the accessibility of its delivery systems, particularly in LMI geographies or to LMI individuals. Services, including business hours, vary in a way that significantly inconveniences many portions of the AA, particularly LMI geographies and individuals. RCB provides few, if any, of CD services in Contra Costa.

Accessibility of Delivery Systems

Delivery systems are accessible to limited portions of the AA. The AA branch distribution and alternative delivery systems are inconsistent with the overall institution. RCB operated one full-service branch in Contra Costa in a middle-income tract; refer to the following table. Performance was below the demographics and distribution of branches that other institutions operate in the area; however, the location never had deposit customers to serve. While the branch location had a check

scanner, the bank never fully implemented their branching strategy to this location, and it was subsequently closed.

Branch and ATM Distribution by Geography Income Level
Tract Income Level	Census Tracts		Population		Branches		ATMs
	#	%	#	%	#	%	#	%
Low	23	11.1	125,069	11.4	0	0.0	0	0.0
Moderate	50	24.0	243,568	22.2	0	0.0	0	0.0
Middle	58	27.9	330,073	30.1	1	100.0	0	0.0
Upper	76	36.5	397,358	36.3	0	0.0	0	0.0
NA	1	0.5	0	0.0	0	0.0	0	0.0
Total	208	100.0	1,096,068	100.0	1	100.0	0	100.0
Source: 2015 ACS Data; Bank Data

Changes in Branch Locations

To the extent changes have been made, RCB’s opening and closing of branches has generally not adversely affected the accessibility of its delivery systems, particularly in LMI geographies or to LMI individuals. On April 30, 2020, RCB closed the only branch in the AA, which was located in a middle-income CT. Immediately after this branch closure, RCB converted the office into a loan production office, which was subsequently closed on November 30, 2020. This closure represents the bank’s exit from the Contra Costa County market. The branch closure had minimal impact to LMI accessibility. The bank did not open any branch locations in the AA during the evaluation period.

Reasonableness of Business Hours and Services

Services, including business hours, vary in a way that significantly inconveniences many portions of the AA, particularly LMI geographies and individuals. The Walnut Creek location prior to its closure was a limited-service branch located in a middle-income CT. Customers could make deposits, or discuss lending options; however, branch availability did not accommodate walk-in traffic and was by appointment only.

Community Development Services

RCB provides few, if any, of CD services in Contra Costa. During the review period, employees did not conduct any CD services in this AA. Bank performance decreased since the previous examination where employees provided 34 hours of qualified services.

APPENDICES

LARGE BANK PERFORMANCE CRITERIA

Lending Test

The Lending Test evaluates the bank’s record of helping to meet the credit needs of its assessment area(s) through its lending activities by considering a bank’s home mortgage, small business, small farm, and community development lending. If consumer lending constitutes a substantial majority of a bank’s business, the FDIC will evaluate the bank’s consumer lending in one or more of the following categories: motor vehicle, credit card, other secured, and other unsecured. The bank’s lending performance is evaluated pursuant to the following criteria:

1. The number and amount of the bank’s home mortgage, small business, small farm, and consumer loans, if applicable, in the bank’s assessment area;

2.  The geographic distribution of the bank’s home mortgage, small business, small farm, and consumer loans, if applicable, based on the loan location, including:

i.  The proportion of the bank’s lending in the bank’s assessment area(s);

ii. The dispersion of lending in the bank’s assessment areas(s); and

iii. The number and amount of loans in low-, moderate-, middle- and upper-income geographies in the bank’s assessment area(s);

3.  The distribution, particularly in the bank’s assessment area(s), of the bank’s home mortgage, small business, small farm, and consumer loans, if applicable, based on borrower characteristics, including the number and amount of:

i.  Home mortgage loans low-, moderate-, middle- and upper-income individuals

ii.  Small business and small farm loans to businesses and farms with gross annual revenues of $1 million or less;

iii. Small business and small farm loans by loan amount at origination; and

iv.  Consumer loans, if applicable, to low-, moderate-, middle- and upper-income individuals;

4.  The bank’s community development lending, including the number and amount of community development loans, and their complexity and innovativeness; and

5.  The bank’s use of innovative or flexible lending practices in a safe and sound manner to address the credit needs of low- and moderate-income individuals or geographies.

Investment Test

The Investment Test evaluates the institution’s record of helping to meet the credit needs of its assessment area(s) through qualified investments that benefit its assessment area(s) or a broader statewide or regional area that includes the bank’s assessment area(s). Activities considered under the Lending or Service Test may not be considered under the investment test. The bank’s investment performance is evaluated pursuant to the following criteria:

1. The dollar amount of qualified investments;
2. The innovativeness or complexity of qualified investments;
3. The responsiveness of qualified investments to available opportunities; and
4. The degree to which qualified investments are not routinely provided by private investors.

Service Test

The Service Test evaluates the bank’s record of helping to meet the credit needs of its assessment area(s) by analyzing both the availability and effectiveness of the bank’s systems for delivering retail banking services and the extent and innovativeness of its community development services.

The bank’s retail banking services are evaluated pursuant to the following criteria:

1. The current distribution of the bank’s branches among low-, moderate-, middle-, and upper- income geographies;
2. In the context of its current distribution of the bank’s branches, the bank’s record of opening and closing branches, particularly branches located in low- or moderate-income geographies or primarily serving low- or moderate-income individuals;
3. The availability and effectiveness of alternative systems for delivering retail banking services (e.g., RSFs, RSFs not owned or operated by or exclusively for the bank, banking by telephone or computer, loan production offices, and bank-at-work or bank-by-mail programs) in low- and moderate-income geographies and to low- and moderate-income individuals; and
4. The range of services provided in low-, moderate-, middle-, and upper-income geographies and the degree to which the services are tailored to meet the needs of those geographies.

The bank’s community development services are evaluated pursuant to the following criteria:

1. The extent to which the bank provides community development services; and
2. The innovativeness and responsiveness of community development services.

SCOPE OF EVALUATION

River City Bank
Scope of Examination: Full scope reviews were performed on the following assessment areas within the noted rated areas: Sacramento AA Contra Costa AA
Time Period Reviewed:	10/28/2019 to 11/01/2022 for Sacramento AA
	10/28/2019 to 4/30/2020 for Contra Costa AA
Products Reviewed: (list loan categories reviewed alphabetically): Small Business: [01/01/19 – 12/31/21] Home Mortgage: [01/01/19 – 12/31/21]

List of Assessment Areas and Type of Evaluation
Rated Area/ Assessment Area	Type of Evaluation	Branches Visited	Other Information
Sacramento AA Contra Costa AA	Full-scope Full-scope	None None	None None

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.

American Community Survey (ACS): A nationwide United States Census survey that produces demographic, social, housing, and economic estimates in the form of five year estimates based on population thresholds.

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 or equivalent entity. The primary purpose of census tracts is to provide a stable set of geographic units for the presentation of statistical data. Census tracts generally have a population size between 1,200 and 8,000 people, with an optimum size of 4,000 people. Census tract boundaries generally follow visible and identifiable features, but they may follow nonvisible legal boundaries in some instances. State and county boundaries always are census tract boundaries.

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.

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.

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 Area (CBSA): 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.

Distressed Middle-Income Nonmetropolitan Geographies: A nonmetropolitan middle-income 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).

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 (e.g., geographic distribution, borrower profile, and total number and dollar amount of investments), and qualitative factors (e.g., 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 Loans: Includes closed-end mortgage loans or open-end line of credits as defined in the HMDA regulation that are not an excluded transaction per the HMDA regulation.

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 (e.g., 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.

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 (also known as non-MSA): 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.

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 middle- income 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 120 percent or more of the area median income, or a median family income that is 120 percent or more 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.