Small banks trying to obtain an outstanding Community Reinvestment Act rating from their examiners might take a page -- make that 11 pages -- from the CRA statement prepared annually by Barbara B. Clougherty.
Mrs. Clougherty is vice president for compliance and CRA at Southwest National Bank, a $680 million-asset company based in Greensburg, Pa., about 25 miles east of downtown Pittsburgh.
Her bank has gotten outstanding ratings in its past two CRA exams, the most recent one in March 1993.
Expanded Statement
One thing she does is provide examiners with an expanded CRA statement so she has more space to tell them about her bank's extensive efforts to serve its community.
"A lot of banks overlook this opportunity, especially the smaller ones," says Mrs. Clougherty. She produces the document on a personal computer using standard desktop publishing and spreadsheet software.
The report lays the facts out concisely. A page headlined "At Southwest Bank, CRA means Caring" outlines 11 activities undertaken by the bank. One item, "Community Development," boasts, "We are committed to enhancing the appearance and vitality of our communities. During 1991, Southwest invested over $500,000 for the purchase and renovation of the vacant Murphy's Building on Main Street in Greensburg."
Program for Homebuyers
Under a page headed "At Southwest Bank CRA means Credit," the bank touts its first-time homebuyers program and Mortgage Assistance program:
"In 1990, Southwest set aside $1 million for mortgages to residents of low- to moderate-income census tracts in our community. During 1991, the board voted to extend our mortgage assistance program to all low- and moderate-income households in our community, regardless of census tract residency."
Mrs. Clougherty said the key to compiling the expanded document is getting employees in the bank's different departments to submit lending data and other information on time.
"You just can't ask people to submit the information. Unless you have a formalized documentation process, it won't happen," she said.
She has standardized reporting forms for the employees to fill out and an annual schedule with deadlines for getting them back to her. Most important is a commitment by management to enforce those deadlines.
At her bank, top management and directors know exactly how things are going throughout the year because they all sit on a CRA committee. In fact, the chairman of the CRA committee is David S. Dahlman, the chairman and CEO of the bank.
Tops in Its Market
Mrs. Clougherty meets quarterly with the CRA committee and several times a year with the bank's full board of directors. The full board must sign off on her annual CRA report.
The bank, which is the dominant player in its market area, has no urban locations. But only one census tract in its rural and suburban market is considered high income. Most tracts are composed of low- to moderate-income people, she says.
Blacks make up just 2.01% of the population, and other banks are competing for the business to help boost their CRA ratings.
"It's a struggle to attract them. We're always in a position of defending ourselves [on exams]," she says. Mrs. Clougherty say the bank pays very close attention to its mortgage lending.
"We watch our Home Mortgage Disclosure Act Data care fully, analyzing our loan portfolio by geographical area, sex income, and race. Once a year we also look at HMDA fro competitor banks," she says.
The bank has several mort gages for low- and moderate-income homebuyers. The Mortgage Assistance Program offers product with closing costs an other fees cut to the bone.
