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PUBLIC DISCLOSURE

November 2, 2009

COMMUNITY REINVESTMENT ACT

PERFORMANCE EVALUATION

Midwest BankCentre

RSSD# 657459

2191 Lemay Ferry Road

St. Louis, Missouri 63125-2408

Federal Reserve Bank of St. Louis

P.O. Box 442

St. Louis, Missouri 63166-0442

NOTE: This document is an evaluation of this institution's record of meeting

the credit needs of its entire community, including low- and moderate-

income neighborhoods, consistent with safe and sound operation of the

institution. This evaluation is not, nor should it be construed as, an

assessment of the financial condition of this institution. The rating

assigned to this institution does not represent an analysis, conclusion or

opinion of the federal financial supervisory agency concerning the

safety and soundness of this financial institution.

Table of Contents

TABLE OF CONTENTS

I. Institution Rating

a. Overall Rating 1

b. Performance Test Ratings Table 1

c. Summary of Major Factors Supporting Rating 1

II. Institution

a. Description of Institution 2

b. Scope of Examination 4

c. Conclusions with Respect to Performance Tests 5

III. Missouri

a. Summary

i. State Rating 11

ii. Scope of Examination 11

iii. Description of Institution‟s Operations 12

iv. Conclusions with Respect to Performance Tests 17

IV. Illinois

a. Summary

i. State Rating 33

ii. Scope of Examination 33

iii. Description of Institution‟s Operations 34

iv. Conclusions with Respect to Performance Tests 37

V. Appendix

a. Scope of Examination Tables 40

b. Summary of State and Multistate Metropolitan Area Ratings 42

c. Geographic and Borrower Distribution Tables 43

d. Glossary 45

Midwest BankCentre CRA Performance Evaluation

Lemay, Missouri November 2, 2009

1

INSTITUTION’S CRA RATING

INSTITUTION'S CRA RATING: NEEDS TO IMPROVE

The following table indicates the performance level of Midwest BankCentre with respect to the

lending, investment and service tests.

Performance Levels Midwest BankCentre

PERFORMANCE TESTS

Lending Test* Investment Test Service Test

Outstanding

High Satisfactory

Low Satisfactory X X

Needs to Improve X

Substantial Noncompliance

* Note: The lending test is weighted more heavily than the investment and service tests when arriving at an

overall rating.

The major factors supporting the institution‟s rating include:

The geographic distribution of loans reflects poor penetration throughout the assessment

areas, as evidenced by disproportionally low levels of lending to borrowers in low- and

moderate-income (LMI) geographies and conspicuous lending gaps in LMI areas.

The distribution of loans by borrower‟s income/revenue profile reflects an adequate

penetration among individuals of different income levels, including LMI levels, and

businesses of different sizes.

Overall, the bank has an adequate level of qualified community development loans.

The bank‟s lending activity reflects adequate responsiveness to the credit needs of its

designated assessment areas.

A substantial majority of the bank‟s lending occurred inside its designated assessment areas.

The bank‟s overall level of community development investment and grant activity was

adequate.

The bank‟s delivery systems are unreasonably inaccessible due to portions of the assessment

areas (particularly LMI areas) being underserved by the bank, based on limited use of

alternative systems and a branch structure favoring middle- and upper-income areas.

Substantive violations of the Equal Credit Opportunity Act and the Fair Housing Act also

influenced the bank‟s overall rating of Needs to Improve.

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2

INSTITUTION

DESCRIPTION OF INSTITUTION1

Midwest BankCentre is a wholly-owned subsidiary of Midwest BankCentre, Inc., a one-bank

holding company located in Lemay, Missouri. The bank‟s main office is located in the St. Louis

Missouri-Illinois Multistate Metropolitan Statistical Area (St. Louis MSA) and is approximately

10 miles south of downtown St. Louis, Missouri. The bank operates in two assessment areas,

one in Missouri and one in Illinois. The bank currently maintains seven full-service branches in

the Missouri assessment area, including the main office. New since the previous examination is

a branch located in Rockford, Illinois, that was opened on March 21, 2008. The Rockford,

Illinois, branch is located in the Rockford, Illinois MSA (Rockford MSA), which is in the

northernmost portion of Illinois, adjacent to Wisconsin. With the exception of the Rockford

branch, all of the bank‟s full-service branches have a 24-hour full-service automated teller

machine (ATM). Additionally, the bank operates four limited-service branches,2 which are

located within retirement/skilled nursing care communities. (These limited service branches are

offered as a convenience to the residents only and are not promoted in any way to the general

public).

For this review period, the bank appeared capable of meeting assessment area credit needs based

on its available resources and financial products. As of September 30, 2009, the bank reported

total assets of $1.1 billion. As of the same date, gross loans and leases were $661.5 million (62.4

percent of total assets), and deposits totaled $756.0 million. The bank‟s loan portfolio

composition by credit category is displayed in the following table.

1 Any percentage row or column “TOTAL” figure displayed throughout this evaluation that does not equal exactly

100 percent is strictly due to rounding differences, which are considered immaterial to overall performance

conclusions. 2

These limited-service facilities primarily handle deposit-related services, do not have ATMs, and have limited

hours of operation.



3

Distribution of Total Loans

Credit Product Type Amount in $000s Percentage of

Total Loans

Construction and Development $ 64,413 9.7%

Commercial Real Estate $ 364,969 55.2%

Multifamily Residential $ 13,537 2.1%

1-4 Family Residential $ 103,071 15.6%

Secured by First Liens $ 59,104 9.0%

Secured by Junior Liens $ 14,780 2.2%

Revolving $ 29,187 4.4%

Farmland $ 0 0.0%

Agricultural $ 0 0.0%

Commercial and Industrial $ 88,720 13.4%

Loans to Individuals $ 14,570 2.2%

Credit Cards $ 0 0.0%

Other Revolving Plans $ 0 0.0%

Other Loans to Individual $ 14,570 2.2%

Total Other Loans $ 12,192 1.8%

TOTAL $ 661,472 100%

By dollar amount, the bank‟s primary lending focus continues to be loans secured by commercial

real estate, which represents 55.2 percent of the loan portfolio. Other significant products

include loans related to 1-4 family residential real estate collateral (15.6 percent) and commercial

and industrial loans, which represent 13.4 percent of the loan portfolio. Additionally, the bank

acts in a brokering capacity in order to offer certain 1-4 family residential mortgage loan

products that are ultimately sold into the secondary market.3

Midwest BankCentre received a satisfactory rating at the previous CRA evaluation conducted as

of October 15, 2007. For this review period, no legal impediments or financial constraints were

identified that would have hindered the bank from serving the credit needs within its defined

assessment areas.

3

Loans of this nature do not appear on the bank‟s balance sheet; therefore, this activity is not captured in the asset

figures displayed in the loan distribution table.



4

SCOPE OF EXAMINATION4, 5

Midwest BankCentre‟s CRA performance was reviewed using the Federal Financial Institutions‟

Examination Council‟s (FFIEC) Interagency CRA Procedures for Large Institutions.6 The large

bank CRA performance standards include three performance tests for lending, investments, and

services. For the lending test, Midwest BankCentre‟s lending activities were evaluated from

January 1, 2007, through December 31, 2008—including loans reported for data years 2007 and

2008 under the Home Mortgage Disclosure Act (HMDA),7 consumer purpose loans,

8 and small

business loans. For CRA community development lending, all qualified activity since the

previous examination was analyzed. For the investment test, all outstanding qualified

community development investments, including qualified donations and grants, were reviewed

and evaluated since the last examination (in addition, community development investments

initiated prior to this review period but still outstanding during this review period were also

considered as part of this evaluation). The service test considered the accessibility of the bank‟s

retail branches, products, and services offered in addition to the community development

services the bank has provided since the previous examination. All assessment areas reviewed

were done so using full-scope procedures.

Assessment Areas

Midwest BankCentre operates in two delineated assessment areas, one of which is located in

Missouri and the other is located in Illinois. Prior to this CRA review, the bank only operated in

the St. Louis, Missouri Assessment Area, but with the March 2008 acquisition of a branch office

in Rockford, Illinois, the bank added the Rockford, Illinois Assessment Area. Consequently, the

bank has only maintained operations in the Rockford, Illinois Assessment Area for a portion of

this review period. In addition, the vast majority of bank resources are located in the St. Louis,

Missouri Assessment Area. Of the 12 bank offices, the only facility operating in the Rockford,

Illinois Assessment Area during this review period was the one that recently opened, and nearly

all of the bank‟s loan and deposit activity is attributable to the St. Louis, Missouri Assessment

Area. In light of these circumstances, the bank‟s CRA evaluation is weighted almost entirely

upon performance in the St. Louis, Missouri Assessment Area.

4 The Scope of Examination information presented here pertains throughout this evaluation unless specifically noted

otherwise. 5 Statistical/demographic information cited in this evaluation, unless otherwise stated, is taken from 2000 U.S

Census Bureau Data. 6 Although Midwest BankCentre meets the asset size requirements to be evaluated under the CRA as an intermediate

small bank, bank management pursued their option to have Midwest BankCentre reviewed as a large bank under the

CRA. 7 The HMDA loan category includes loans for the purpose of home purchase, refinancing, and home improvement.

8 The consumer purpose loan category includes home equity lines of credit, motor vehicle loans, and consumer

purpose loans both other secured and unsecured.



5

CONCLUSIONS WITH RESPECT TO PERFORMANCE TESTS

LENDING TEST

Midwest BankCentre‟s overall performance under the lending test is rated Needs to Improve, as

drawn from performance conclusions made in both assessment areas and briefly summarized in

this paragraph. The bank‟s overall lending activity level reflects adequate responsiveness to

assessment area credit needs; further, a substantial majority of loans is made in the bank‟s

assessment areas. Alternatively, the geographic distribution of loans reflects poor penetration

throughout the assessment areas, particularly in LMI geographies—additional analysis of the

loan penetration revealed significant lending gaps in LMI tracts within the St. Louis Assessment

Area. The distribution of borrowers reflects adequate penetration among borrowers of different

income levels and businesses of different sizes. Midwest BankCentre made an adequate level of

qualified community development loans, and the bank makes limited use of innovative and/or

flexible lending practices in serving assessment area credit needs. As displayed in the following

table, the bank received Needs to Improve lending test ratings for both the state of Missouri and

the state of Illinois.

Assessment Area (full-scope review) Lending Test Performance

St. Louis, Missouri Needs to Improve

Rockford, Illinois Needs to Improve

OVERALL Needs to Improve

Lending test performance in Missouri was rated Needs to Improve, primarily due to a poor

geographic distribution of loans, as indicated by lending disparities by geographical income

category and conspicuous lending gaps in LMI areas. Lending test performance in Illinois was

rated Needs to Improve due to poor overall lending activity levels, as well as poor performance

by geographic distribution of loans and by borrowers‟ income profile.

Lending Activity

Overall lending levels reflect adequate responsiveness to assessment area credit needs. The

bank‟s performance under the lending test was evaluated using reported HMDA and CRA data

from 2007 and 2008. Also, the bank elected to collect consumer loan data, which was also

reviewed for the same period. Lending activity based on these primary lines of business is

detailed in following table.



6

Although loan activity detailed in the previous table is taken from loan operations in both states,

only seven loans are attributable to the Rockford, Illinois Assessment Area. Accordingly,

information presented here indicates lending volume commensurate with the bank‟s business

strategy and assessment area credit needs in the St. Louis, Missouri Assessment Area, which is

good performance. However, lending levels reflect poor responsiveness to the Rockford, Illinois

Assessment Area credit needs.

Loan Type # % $(000s) %

Home Equity 223 29.8% $17,423 12.1%

Motor Vehicle 2 0.3% $23 0.0%

Other - Secured 57 7.6% $5,975 4.2%

Other - Unsecured 19 2.5% $1,536 1.1%

Total Consumer Related 301 40.2% $24,957 17.4%

Home Improvement 52 7.0% $1,816 1.3%

Home Purchase 51 6.8% $13,993 9.7%

Multi-Family Housing 10 1.3% $14,077 9.8%

Refinancing 78 10.4% $12,317 8.6%

Total HMDA Related 191 25.5% $42,203 29.4%

Small Bus. - Secured by Real Estate 24 3.2% $8,373 5.8%

Small Business 232 31.0% $68,148 47.4%

Total Small Business Related 256 34.2% $76,521 53.3%

TOTAL LOANS 748 100% $143,681 100

Summary of Lending Activity



7

Assessment Areas Concentration

For the loan activity reviewed as part of this evaluation, the following table displays the number

and dollar volume of loans inside and outside the bank‟s assessment areas.

Lending Inside and Outside of Assessment Areas ($000s)

Loan Type Inside

Assessment Area

Outside

Assessment Area TOTAL

2007-08 HMDA

175 16 191

91.6% 8.4% 100%

$ 32,381 $ 9,822 $ 42,203

76.7% 23.3% 100%

2007-08 Consumer

Purpose

287 14 301

95.3% 4.7% 100%

$ 21,751 $ 3,206 $ 24,957

87.2% 12.8% 100%

2007-08 Small Business

226 30 256

88.3% 11.7% 100%

$ 64,673 $ 11,848 $ 76,521

84.5% 15.5% 100%

TOTAL

688 60 748

92.0% 8.0% 100%

$ 118,805 $ 24,876 $ 143,681

82.7% 17.3% 100%

Samples of the bank‟s loans revealed that Midwest BankCentre made a substantial majority of

loans across all categories reviewed inside the bank‟s assessment areas. In total, the bank made

92.0 percent by number and 82.7 percent by dollar volume of loans inside its assessment areas.



8

Geographic and Borrower Distribution

The geographic distribution performance criterion focuses on the bank‟s lending penetration

within its assessment area among geographies of different income levels, with a specific

emphasis placed on the banks‟ performance in LMI geographies. The bank‟s HMDA, small

business, and consumer purpose loans were analyzed according to the income level of the census

tract in order to evaluate the bank‟s lending in LMI census tracts. In this analysis, owner-

occupied housing, household population, Dun & Bradstreet data, and aggregate lending data9

were used for comparison purposes, as applicable. Overall, the geographic distribution of loans

analysis revealed poor performance in both assessment areas.

The borrower distribution performance criterion evaluates the bank‟s loan originations to

borrowers of different income levels and businesses of varying revenue sizes. Within each

assessment area, borrowers are classified into low-, moderate-, middle-, and upper-income

categories by comparing their reported income to the applicable median family income figure as

estimated by the U.S. Department of Housing and Urban Development (HUD). Businesses are

categorized by size depending on their gross annual revenues. This performance criterion places

special emphasis on loans originated to LMI individuals and small businesses.10

The samples of

loans used in the geographic distribution of loans analysis were also used to analyze the bank‟s

distribution of loans by borrower‟s income profile. Bank performance in the Rockford, Illinois

Assessment Area is poor; however, overall, the distribution of the bank‟s loans reflects adequate

penetration among individuals of different income levels and businesses of different revenue

sizes, based on adequate performance in the St. Louis, Missouri Assessment Area.

Community Development Lending Activities

Midwest BankCentre originated an adequate level of community development loans in both

assessment areas. The bank made nine qualified community development loans totaling $12.4

million in their assessment areas. This represents an improvement from the previous

examination when the bank made seven loans totaling $5.2 million.

Midwest BankCentre makes limited use of flexible and innovative lending products throughout

the combined assessment areas. Midwest BankCentre has participated in the America‟s

Recovery Capital Loan Program administered by the Small Business Administration, which

offers small business customers additional flexibility as part of the credit application process.

For this review period, the bank originated five loans for a total of $175,000.

9 HMDA/CRA Aggregate Data represent all lending activity collected and reported under the HMDA/CRA for this

assessment area(s), based upon all financial institutions required to report such data. 10

Under the CRA, a small business is considered to be one in which gross annual revenues for the preceding

calendar year are $1 million or less.



9

INVESTMENT TEST

Midwest BankCentre‟s performance under the investment test is rated Low Satisfactory. The

bank initiated qualified community development investments totaling $4.95 million. Almost all

of the investments were for school bonds within the St. Louis MSA, benefitting schools with a

majority enrollment of LMI students. In addition to these investments, the bank made an

adequate level of contributions totaling $100,613. There were no qualifying investments or

donations/grants made in the Rockford, Illinois Assessment Area. As displayed in the following

table, the bank‟s investment test performance is rated Low Satisfactory based primarily on

performance in the St. Louis, Missouri Assessment Area.

Assessment Area Investment Test Performance

St. Louis, Missouri Low Satisfactory

Rockford, Illinois Needs to Improve

OVERALL Low Satisfactory

SERVICE TEST

Overall, Midwest BankCentre‟s performance under the service test is Low Satisfactory.

Delivery systems are unreasonably inaccessible to portions of geographies and individuals of

different income levels in both assessment areas. The bank‟s record of opening and closing

branches has generally not adversely affected accessibility of its delivery systems since the

previous examination. During this review period, the bank has opened one new full-service

office, while not closing any branches. Retail services do not vary in a way that inconveniences

certain portions of the bank‟s assessment areas, particularly LMI geographies and/or LMI

individuals. Finally, bank personnel provide an adequate level of community development

services in both assessment areas. The following is a breakdown of the service test ratings for

both assessment areas.

Assessment Area Service Test Performance

St. Louis, Missouri Low Satisfactory

Rockford, Illinois Low Satisfactory

OVERALL Low Satisfactory



10

FAIR LENDING OR OTHER ILLEGAL CREDIT PRACTICES REVIEW

During the Consumer Affairs examination conducted concurrently with this CRA evaluation,

substantive violations of Regulation B - the Equal Credit Opportunity Act and the Fair Housing

Act were identified. These violations influenced the bank‟s Needs to Improve rating. The

institution‟s fair lending program did not adequately identify nor take steps to prevent the

violations. Bank management is taking steps to strengthen the bank‟s policies, procedures,

training programs, and internal assessment efforts.



11

MISSOURI

CRA RATING FOR MISSOURI: NEEDS TO IMPROVE

The Lending Test is rated: Needs to Improve.

The Investment Test is rated: Low Satisfactory.

The Service Test is rated: Low Satisfactory.

Major factors supporting this state rating include:

The overall geographic distribution of the bank‟s loans across all census tracts, including

LMI census tracts within the St. Louis, Missouri Assessment Area, is poor.

The borrower distribution of the bank‟s lending activity reveals adequate penetration among

individuals of different income levels, including LMI borrowers and businesses of varying

sizes.

The bank made an adequate level of community development loans in this assessment area.

The bank‟s lending activity levels reflect good responsiveness to the credit needs of its

assessment area.

The bank‟s level of community development investment and grant activity is considered

adequate.

The bank‟s delivery systems are unreasonably inaccessible due to portions of this assessment

area (particularly affecting LMI areas) being underserved by the bank, based on limited use

of alternative systems and a branch structure favoring middle- and upper-income areas.

The bank‟s level of community development services is considered adequate.

Substantive violations of the Equal Credit Opportunity Act and the Fair Housing Act also

influenced the bank‟s Needs to Improve rating in the state of Missouri.

SCOPE OF EXAMINATION

For this review period, Midwest BankCentre‟s CRA ratings in the state of Missouri were based

upon performance within its one Missouri assessment area, which was reviewed using full-scope

examination procedures. For the lending test, HMDA, small business, and consumer-purpose

loans originated during 2007 and 2008 were used in the evaluation of the bank‟s performance.

The review period used for the community development activities included community

development loans, investments, and services initiated during the period from the previous CRA

evaluation date to the current evaluation (October 15, 2007, through November 2, 2009). In

addition, certain community development activities initiated prior to this examination period but

still outstanding were also considered as part of the bank‟s overall community development

performance.

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12

DESCRIPTION OF INSTITUTION’S OPERATIONS IN THE ST. LOUIS, MISSOURI

ASSESSMENT AREA

For this review period, Midwest BankCentre delineated one assessment area for the state of

Missouri. The assessment area is comprised of a portion of the St. Louis Missouri-Illinois

Multistate MSA. The portion of this MSA included in the bank‟s assessment area is St. Louis

City, St. Louis County, St. Charles County, and Jefferson County.

Bank Structure

The bank maintains 11 branches, four of which offer limited services, within this assessment

area. The limited service facilities are located in private, skilled nursing/retirement communities.

The bank‟s limited service facilities in these retirement communities are offered as a

convenience to the residents, have limited hours of operations, and do not have ATMs. Finally,

banking services at these locations are not advertised to the general public. The bank‟s main

office, four of its full-service branches, and all four of its limited-service branches are located in

St. Louis County. Additionally, the bank has one branch each in Jefferson and St. Charles

counties. The bank does not have any branch locations in St. Louis City. Based on this branch

network and other service delivery systems, the bank is primarily accessible in the southern and

western portions of this assessment area, with secondary accessibility in the northern section.

General Demographics

As previously noted, the St. Louis Assessment Area is comprised of four counties, which are

located in the east central portion of the state and had a combined population of 1,846,486. In

comparison, the entire MSA includes eight counties (four in Missouri and four in Illinois) having

a total population of 2,698,687. This assessment area is serviced by numerous interstate

highways and is considered a destination spot in the Midwest. The city of St. Louis, which is the

largest city in the assessment area, had a population of 348,189. As part of a major metropolitan

center with an active community service sector, there is a high level of community development

opportunity in this assessment area, particularly within the city of St. Louis.

Based upon deposit market share information,11

there is a significant amount of banking

competition throughout the St. Louis Assessment Area. There are 73 institutions within this

assessment area operating 576 offices. Midwest BankCentre ranks 15th

in its assessment area

with a deposit share of 1.4 percent.

11

Source: Federal Deposit Insurance Corporation (FDIC) Deposit Market Share Report (data as of June 30, 2009)



13

Income and Wealth Demographics

This assessment area contains 375 census tracts which are displayed in the following table by

income level of geography and family population characteristics.

Assessment Area Demographics by Geography Income Category

Dataset Low- Moderate- Middle- Upper- Unknown TOTAL

Census Tracts 42 84 145 100 4 375

11.2% 22.4% 38.7% 26.7% 1.1% 100%

Family Population 25,106 87,490 211,232 158,817 0 482,645

5.2% 18.1% 43.8% 32.9% 0.0% 100%

The previous table reveals that there are 42 census tracts (11.2 percent) designated as low-

income and 84 census tracts (22.4 percent) designated as moderate-income in the St. Louis

Assessment Area. As a comparison, some 5.2 percent of the assessment area families reside in

low-income tracts and 18.1 percent of the assessment area families reside in moderate-income

tracts. The majority of families (76.7 percent) reside in middle- and upper-income geographies.

The table above demonstrates the mix of census tracts by income level. Many of the more

affluent parts of the assessment area are located in St. Louis County and St. Charles County.

There are also middle- and upper-income areas in St. Louis City and Jefferson County, but not to

the extent as other parts of the St. Louis Assessment Area. St. Louis City has the highest

concentration of LMI geographies in the St. Louis Assessment Area. These areas are generally

located in the north part of the city and are more economically challenged than other parts of the

assessment area. While fewer opportunities to lend may be present in those areas, analyses

discussed in the Conclusions With Respect to Performance Tests in the St. Louis, Missouri

Assessment Area section reveal that lending opportunities are still present in these areas.



14

Based upon the 2000 census data, the median family income for this assessment area was

$56,161, which is above the 2000 St. Louis MSA median family income figure of $53,435.

More recently, HUD estimates the 2008 St. Louis MSA median family income to be $65,000,

which represents a change of 21.6 percent since 2000. The following table displays population

percentages of assessment area families by income level, compared to the St. Louis MSA

population as a whole.

Family Population by Income Level


Assessment Area 87,796 83,919 104,794 206,136 0 482,645

18.2% 17.4% 21.7% 42.7% 0.0% 100%

St. Louis MSA 137,988 131,220 161,155 282,274 0 712,637

19.4% 18.4% 22.6% 39.6% 0.0% 100%

As shown in the previous table, the family population characteristics of the assessment area are

closely matched to that of the St. Louis MSA. Both the assessment area and the St. Louis MSA

have a significant percentage of LMI families, noted to be 35.6 and 37.8 percent, respectively.

Further, the percentage of assessment area families living below the poverty level (7.2 percent) is

slightly below that of the St. Louis MSA figure (7.5 percent).

Housing Demographics

Within the assessment area, 65.5 percent of housing units are owner-occupied; that figure is just

below the St. Louis MSA owner occupancy rate of 66.3 percent. Further, the level of owner-

occupied housing units is 28.2 percent and 49.9 percent in LMI census tracts, respectively. The

2000 median housing value for the assessment area was $103,906, which is higher than the 2000

median housing value for the St. Louis MSA of $94,895. These figures suggest housing is less

affordable in the assessment area, relative to the entire St. Louis MSA.

Supporting this is the affordability ratio12

for the assessment area of 42.0 percent, which is lower

than the St. Louis MSA figure of 46.0 percent. Lastly, the median gross rent figure for the

assessment area was $538, just above that of the St. Louis MSA figure of $522. Therefore, it

appears that housing options in the assessment area less affordable as compared to the St. Louis

MSA.

12

This figure is calculated by dividing the median household income by the median housing value; it represents the

amount of single family owner-occupied housing that a dollar of income can purchase for the median household in

the geography. Values closer to 100 percent indicate greater affordability.



15

Lastly, the median age of housing stock across the assessment area is vastly different. For the

assessment area as a whole, the median age of housing stock is 36 years. However, when viewed

more closely, the age of housing stock is quite different within the assessment area. For

example, the median age of housing in Jefferson County is 23 years, St. Charles County is 16

years, St. Louis County is 34 years, and St. Louis City is 59 years. The age of housing in St.

Louis City suggests a stronger need for home improvement lending.

Industry and Employment Demographics

Despite its broad and diverse employment base, the assessment area has not been insulated from

the economic instability that much of the country is experiencing. Job layoffs in the assessment

area in recent months have pushed unemployment rates to their highest levels in many years.

Contributing to the high unemployment levels are job losses in the top industries of healthcare,

retail trade, and manufacturing.

Location Most Recent (September 2009) 2008 Average

St. Louis City 12.4% 7.8%

St. Louis County 9.6% 6.0%

St. Charles County 8.9% 5.4%

Jefferson County 10.8% 6.8%

St. Louis MSA 10.3% 6.6%

As displayed in the previous table, current unemployment rates for the St. Louis Assessment

Area vary from a low of 8.9 percent (St. Charles County) to a high of 12.4 percent (St. Louis

City). All of the areas shown in the previous table have generally shown an increasing

unemployment trend in recent years.



16

Community Contact Information

As part of this CRA examination, three community contact interviews were conducted in order

to obtain information regarding the bank‟s performance in this assessment area, including

information relating to credit needs, community development opportunities, and the local

economy. It should be noted that additional community contacts recently performed in the

assessment area were also reviewed for this evaluation. Two of the interviews conducted were

with economic development organizations and one was with a local church. All of the

interviewees for this assessment area commented that the local economy has suffered as a result

of the recent recession. One contact mentioned that unemployment is very high in St. Louis City

and that foreclosure rates are increasing as well. The contact further stated that local businesses

have been closing without available jobs to fill those employment gaps. One of the other

contacts stated that the economic crisis has led to a financing shortage due to tightened credit

standards by financial institutions. Another contact mentioned that new home construction had

declined significantly in the past year, and that business lending was down due to tightened

credit quality standards.

Two of the contacts mentioned that banks are not very responsive to certain portions of St. Louis

City. One contact commented that banks generally tend to be located in certain pockets in St.

Louis City, but have not reached into the deeper urban areas. Another contact stated that

community members in north St. Louis felt mistrust toward financial institutions citing that

lenders are generally unwilling to lend or create extra burden when reviewing loan applications.

In summary, these contacts felt there was a great need for involvement, including lending, by

financial institutions within the blighted neighborhoods throughout north St. Louis City.



17

CONCLUSIONS WITH RESPECT TO PERFORMANCE TESTS IN THE ST. LOUIS

MISSOURI ASSESSEMENT AREA

LENDING TEST

The bank‟s lending test performance in the St. Louis Assessment Area is rated Needs to

Improve. Based upon activity from all three loan products reviewed, lending activity levels

reflect good responsiveness to assessment area credit needs. However, the overall geographic

distribution of loans reflects poor penetration throughout the assessment area, particularly to

LMI geographies. The overall distribution of loans to borrowers of different income levels and

businesses of different revenue sizes reflects adequate penetration throughout all income levels.

Finally, the bank makes an adequate level of community development loans in this assessment

area.

Lending Activity

The following table displays the bank‟s level of lending activity in the St. Louis Assessment

Area, for the loan products used in this evaluation.

In addition to the loan activity displayed in the preceding table, the bank also acts in a loan

brokering capacity, which further increases credit availability in this assessment area even

though the bank is not the actual creditor in these cases. Based on the loan activity detailed in

Loan Type # % $(000s) %

Home Equity 221 29.8% $17,238 12.1%

Motor Vehicle 2 0.3% $23 0.0%

Other - Secured 57 7.7% $5,975 4.2%

Other - Unsecured 19 2.6% $1,536 1.1%

Total Consumer Related 299 40.4% $24,772 17.4%

Home Improvement 52 7.0% $1,816 1.3%

Home Purchase 51 6.9% $13,993 9.8%

Multi-Family Housing 10 1.3% $14,077 9.9%

Refinancing 78 10.5% $12,317 8.7%

Total HMDA Related 191 25.8% $42,203 29.7%

Small Bus. - Secured by Real Estate 23 3.1% $8,133 5.7%

Small Business 228 30.8% $67,127 47.2%

Total Small Business Related 251 33.9% $75,260 52.9%

TOTAL LOANS 741 100% $142,235 100%

Summary of Lending Activity



18

the table and the bank‟s loan brokering activity, the bank‟s lending levels reflect good

responsiveness to St. Louis Assessment Area credit needs.

Geographic Distribution of Loans

The geographic distribution performance criterion focuses on the bank‟s lending penetration

within the assessment area among geographies of different income levels, with a specific

emphasis placed on the bank‟s performance in LMI geographies. As noted in the description of

the assessment area, this area includes 42 low-income geographies and 84 moderate-income

geographies, which represents 33.6 percent of the total geographies.

First, the bank‟s HMDA loans were analyzed according to the income level of the census tract in

order to evaluate the bank‟s lending in LMI geographies. In this analysis, the owner-occupied

housing data and aggregate lending activity were used for comparison purposes. The percentage

of loans originated by the bank within LMI census tracts was compared to the owner-occupancy

data and to the aggregate lending percentage. The following table displays the geographic

distribution of 2007 and 2008 HMDA loans in comparison to owner-occupied housing data for

the assessment area. (Please see Appendix C for additional information regarding the bank‟s

geographic distribution of HMDA loans, which includes performance detailed by individual

HMDA loan type).

Distribution of Loans (Number and Dollar Volume in $000s) Inside Assessment Area by

Income Level of Geography

Dataset Geography Income Classification

TOTAL

Low- Moderate- Middle- Upper- Unknown-

2008 HMDA

0 10 31 26 0 67

0.0% 14.9% 46.3% 38.8% 0.0% 100%

$ - $ 6,414 $ 6,560 $8,507 $ 0 $ 21,481

0.0% 29.9% 30.5% 39.6% 0.0% 100%

2007 HMDA

1 11 67 29 0 108

0.9% 10.2% 62.0% 26.9% 0.0% 100%

$ 189 $ 4,358 $ 3,689 $2,664 $ 0 $10,900

1.7% 40.0% 33.8% 24.4% 0.0% 100%

Owner

Occupied

Housing

3.1% 15.9% 46.3% 34.8% 0.0% 100%

As displayed in the previous table, census data indicate that 3.1 percent of owner occupied

housing units in the assessment area are within low-income census tracts. The bank did not

make any 2008 HMDA-reportable loans in low-income census tracts. In comparison, aggregate

HMDA data reported in 2008 indicate other lenders made 2.4 percent of home purchase loans in

low-income census tracts, as were 1.8 percent of refinance loans, 3.0 percent of home



19

improvement loans, and 11.3 percent of multi-family dwelling loans. Based on 2007 HMDA

lending activity, the bank made one refinance loan in a low-income census tract (2.2 percent of

refinance loans). This performance is also below aggregate performance levels, which indicate

that, for the year 2007, other lenders made 3.3 percent of home purchase loans in low-income

census tracts, as were 3.0 percent of refinance loans, 3.5 percent of home improvement loans,

and 9.7 percent of multi-family dwelling loans. In light of the comparison data, the bank‟s

geographic distribution of HMDA loans in low-income census tracts is poor.

Census data indicate the percentage of owner occupied housing units located within moderate-

income census tracts is 15.9 percent. Based on 2008 HMDA lending activity, the bank‟s

performance is generally within range of this statistic. The bank made 10 loans (14.9 percent of

combined HMDA lending) in moderate-income census tracts, which included four refinance

loans (14.3 percent of refinance loans), two home improvement loans (11.8 percent of home

improvement loans), and four multi-family dwelling related loans (66.7 percent of multi-family

dwelling loans); the bank did not make any home purchase loans in moderate-income census

tracts. Bank performance is also generally in line with 2008 aggregate lending data, which

indicate the following lending figures for moderate-income census tracts: 14.2 percent of home

purchase loans, 12.8 percent of refinance loans, 17.7 percent of home improvement loans, and

34.3 percent of multi-family dwelling loans. Lending performance in moderate-income census

tracts declined somewhat based on 2007 HMDA lending activity. For that period, the bank made

11 loans (10.2 percent of combined HMDA lending) in moderate-income census tracts, including

three home purchase loans (11.5 percent of home purchase loans), two refinance loans (4.4

percent of refinance loans), four home improvement loans (12.1 percent of home improvement

loans), and two multi-family dwelling loans (50.0 percent of multi-family dwelling loans). The

2007 aggregate lending figures in moderate-income census tracts are as follows: 15.3 percent of

home purchase loans, 16.3 percent of refinance loans, 17.5 percent of home improvement loans,

and 33.1 percent of multi-family dwelling loans. Considering lending activity by dollar volume,

the bank‟s performance improved somewhat for both years. By dollar amount of loans, 29.9

percent of the bank‟s 2008 HMDA lending activity was in moderate-income census tracts, as

was 40.0 percent of the bank‟s 2007 HMDA lending activity. This improved lending

performance by dollar amount of loans was driven primarily by multi-family dwelling loans.

Overall, the banks‟ geographic distribution of HMDA loans in moderate-income census tracts is

adequate, despite some performance issues.



20

Next, the geographic distribution of the bank‟s small business loans within the St. Louis

Assessment Area was reviewed in assessing the bank‟s lending penetration within LMI census

tracts. The following tables display the geographic distribution of small business loans in

comparison to the percentage of small business institutions operating within each census tract

income category.




TOTAL Low- Moderate- Middle- Upper- Unknown

2008 Small

Business

3 9 46 42 2 102

2.9% 8.8% 45.1% 41.2% 2.0% 100%

$ 774 $ 1,943 $ 16,838 $ 14,543 $ 1,405 $ 35,503

2.2% 5.5% 47.4% 41.0% 4.0% 100%

2007 Small

Business

2 13 60 44 0 119

1.7% 10.9% 50.4% 37.0% 0.0% 100%

$ 150 $ 4,195 $ 13,911 $ 9,653 0 $27,909

0.5% 15.0% 49.8% 34.6% 0.0% 100%

Business

Institutions 5.2% 17.0% 40.2% 37.2% 0.4% 100%

Analysis of small business lending activity indicated geographic distribution performance that

was not commensurate with that of comparison figures. Small business loan activity from 2008

reveals that only 2.9 percent of small business loans were made in low-income census tracts (2.2

percent of dollar volume), and 8.8 percent of small business loans were made in moderate-

income census tracts (5.5 percent of dollar volume). Similar performance was shown in the 2007

data; 1.7 percent of small business loans were made in low-income census tracts (0.5 percent of

dollar volume), and 10.9 percent of these loans were made in moderate-income census tracts

(15.0 percent of dollar volume). These performance figures are significantly below demographic

data, 13

which indicate that 5.2 percent of businesses are located in low-income census tracts and

17.0 percent are in moderate-income census tracts. The bank‟s performance is also below CRA

aggregate data, which indicate that 16.1 percent and 15.7 percent of small business loans made

by other lenders were in LMI census tracts, respectively, in 2007 and 2008. This low penetration

of LMI census tracts based upon 2007 and 2008 small business loan activity demonstrates poor

performance.

13

These statistics are derived from Business Geodemographic Data for the assessment area, as reported by Dun &

Bradstreet



21

Similar to the geographic distribution analysis conducted for small business and HMDA loans,

the bank‟s distribution of consumer-purpose loans was reviewed. The following table illustrates

the geographic distribution of the bank‟s consumer purpose loans, with a comparison to

assessment area household population percentages for the different income categories.





2008 Consumer

Purpose

0 7 87 82 0 176

0.0% 4.0% 49.4% 46.6% 0.0% 100%

$ 0 $ 343 $ 3,766 $ 9,630 $ 0 $ 13,739

0.0% 2.5% 27.4% 70.1% 0.0% 100%

2007 Consumer

Purpose

1 8 46 54 0 109

0.9% 7.3% 42.2% 49.5% 0.0% 100%

$ 25 $ 207 $ 2,869 $ 4,726 0 $7,827

0.3% 2.6% 36.7% 60.4% 0.0% 100%

Household

Population 5.9% 19.9% 44.7% 29.5% <0.1% 100%

Analysis of consumer-purpose lending activity indicated geographic distribution performance

significantly below comparison data. As shown in the table above for 2008, the bank made no

consumer-purpose loans in low-income census tracts, and only 4.0 percent (by number) of

consumer purpose loans were made in moderate-income census tracts. These figures are well

below household population statistics indicating that 5.9 percent of the household population

resides in low-income census tracts and 19.9 percent resides in moderate-income census tracts.

Similarly, 2007 performance was also below comparison data — 0.9 percent of the loans were

made in low-income census tracts and 7.3 percent were made in moderate-income tracts. Based

on these comparisons, the bank‟s geographic distribution of consumer purpose loans

demonstrates poor lending performance in LMI tracts.

Lending Gap Analysis by Geography Income Category

As described previously during the initial geographic distribution of loans analysis in the St.

Louis Assessment Area, Midwest BankCentre‟s lending to borrowers in LMI areas is deficient in

multiple categories. The initial analysis also suggested potential lending gaps throughout this

assessment area, warranting additional investigation in order to determine whether abnormally

low penetration rates disproportionally affected LMI areas. This section will discuss the bank‟s

ability to reach customers in all areas of the St. Louis Assessment Area, based on reported

HMDA and CRA loan activity. The results of this lending gap analysis revealed that the bank

did not make loans in many assessment area census tracts, but the absence of loan activity was

particularly prevalent in LMI census tracts, resulting in conspicuous LMI area lending gaps.



22

HMDA Loans

The lending gap analysis of the bank‟s HMDA lending activity revealed unexplained gaps of

lending in LMI census tracts within this assessment area. Within low-income census tracts,

Midwest BankCentre did not originate any HMDA loans in 41 out of 42 census tracts (2.4

percent penetration) in 2007 and had a 0.0 percent penetration rate based on 2008 HMDA data.

Within moderate-income census tracts in 2007, the bank did not originate any HMDA loans in

75 out of 84 moderate-income tracts (10.7 percent penetration) and 77 out of 84 moderate-

income tracts (8.3 percent penetration) in 2008. In comparison, the bank‟s penetration ratio for

middle- and upper-income census tracts was 18.8 percent (46 of 245 census tracts with loan

activity) in 2007, which is more than double the combined LMI census tract penetration ratio of

7.9 percent (10 of 126 census tracts with loan activity). Similarly, the middle- and upper-income

census tract penetration ratio was 13.9 percent (34 of 245 census tracts with loan activity) in

2008, which was again more than double the combined LMI census tract penetration ratio of 5.6

percent (7 of 126). Because these lending disparities suggest that the bank is not effectively

penetrating LMI census tracts in this assessment area, further analysis was conducted.

As lending opportunities tend to be more easily identified near branch locations, a loan

penetration analysis was performed using 2008 HMDA data, focusing on LMI concentrations

within a five-mile range of two bank branches. First, a concentration of 12 low-income and 24

moderate-income census tracts census tracts northeast of the Clayton office was identified. Of

these 36 LMI tracts, the bank had loan activity within only one moderate-income census tract;

there was no HMDA loan activity within any of the 12 low-income census tracts. The combined

LMI penetration ratio in this area is 2.8 percent, which is significantly below the bank‟s 5.6

percent HMDA penetration ratio in LMI geographies. The second area reviewed was near the

bank‟s main office in Lemay and contains 7 low-income and 15 moderate-income census tracts.

Within these 22 LMI tracts, the bank‟s 2008 HMDA loan penetration ratio was 13.7 percent,

which appears on par with overall HMDA penetration performance. Conversely, this LMI

penetration ratio is less than half of the comparable ratio for middle- and upper-income census

tracts within range of the Lemay office, 27.5 percent. While the performance in the LMI tracts

nearest the main office is better than that around the Clayton branch, the performance in both

appears to be low given the close proximity of these LMI tracts to bank branches.

CRA Reportable Small Business Loans

According to the 2000 U.S. Census, there are 73,074 businesses in the assessment area, of which

5.2 percent are located in low-income census tracts and 17.0 percent are located in moderate-

income census tracts. As mentioned in the Description of Institution’s Operations in the St.

Louis Missouri Assessment section, community contact interviewees noted a lack of lending,

particularly to small businesses, in LMI census tracts. Because small businesses are generally

recognized to be in need of lending, this lack of lending suggests that there are unmet lending

needs in LMI census tracts.

Similar to HMDA loan penetration ratios, small business loan analysis generally indicated loan

penetration rates in LMI geographies that were less than half that of middle- and upper-income

penetration rates. In 2007, the bank did not make any small business loans in 40 out of 42 low-



23

income census tracts (4.8 percent penetration), 75 out of 84 moderate-income tracts (10.7 percent

penetration), 114 out of 145 middle-income census tracts (21.4 percent penetration), and 80 out

of 100 upper-income tracts (20.0 percent penetration). The performance was substantially

similar in 2008. The bank did not make any small business loans in 39 out of 42 low-income

census tracts (7.1 percent penetration), 76 out of 84 moderate-income tracts (9.5 percent

penetration), 121 out of 145 middle-income tracts (16.6 percent penetration), and 81 out of 100

upper-income tracts (19.0 percent penetration). These figures support previous findings based on

HMDA data, indicating that the bank is not effectively penetrating LMI census tracts in this

assessment area, as compared to middle- and upper-income census tracts. These geography

penetration disparities are directly related to the existence of conspicuous lending gaps in LMI

areas.

Geographic Distribution of Loans and Lending Gap Analyses Summary

Based on lending activity from all products reviewed and both years of loan data, the bank‟s

distribution of loans to borrowers located in different census tract income categories appears

disproportionally weighted to middle- and upper income geographies. Further, lending gaps in

the bank‟s assessment area, as analyzed by geography income level, also appear to favor middle-

and upper-income geographies. These findings are further supported by the following summary

statistics.

In 2007, the bank originated a combined total of 336 HMDA, small business, and consumer

purpose loans within this assessment area. Of that total, 4 loans (1.2 percent) were made in low-

income census tracts, 32 loans (9.5 percent) were originated in moderate-income census tracts,

173 (51.5 percent) were originated in middle-income census tracts, and 127 (37.8 percent) were

originated in upper-income census tracts. Loan totals in 2008 reflected similar findings. Of 345

loans made within this assessment area, 3 loans (0.9 percent) were in low-income census tracts,

26 loans (7.5 percent) were made in moderate-income census tracts, 164 loans (47.5 percent)

were made in middle-income census tracts, and 150 loans (43.5 percent) were made in upper-

income census tracts.14

For the combined years, 90.2 percent of the bank‟s lending activity was

concentrated in middle- and upper-income census tracts within the St. Louis Assessment Area,

despite the fact that 33.6 percent of assessment area geographies are LMI. These combined

lending activity figures indicate that the bank that is not effectively reaching LMI areas within its

assessment area for any of the three loan products reviewed.

In summary, the analyses presented here support findings of significant lending disparities

between LMI areas and middle- and upper-income areas. Based on these findings, lending is

disproportionally skewed to borrowers in middle- and upper-income areas, and geographical

lending gaps are significantly more prevalent in LMI areas as compared to middle- and upper-

income areas, even after accounting for branch proximity. Therefore, the bank‟s geographic

distribution of loan performance in the St. Louis Assessment Area is poor.

14

Two loans were made in census tracts having an unknown income classification.



24

Loan Distribution by Borrower’s Profile

For this performance criterion, the bank‟s HMDA loans were analyzed to determine the

reasonableness of lending to borrowers of different income levels within the assessment area.

The table below shows the distribution of the bank‟s HMDA loans by the income level of the

borrower, compared to family population income characteristics for the assessment area. (Please

see Appendix C for additional information regarding the bank‟s distribution of HMDA loans by

borrower‟s profile, which includes performance detailed by individual HMDA loan type).


Income Level of Borrower

Dataset Borrower Income Classification

TOTAL Low- Moderate- Middle- Upper Unknown-

2008 HMDA

8 8 11 29 11 67

11.9% 11.9% 16.4% 43.3% 16.4% 100%

$ 292 $ 450 $ 625 $5,407 $ 14,707 $ 21,481

1.4% 2.1% 2.9% 25.2% 68.5% 100%

2007 HMDA

13

12.0%

20

18.5%

18

16.7%

36

33.3%

21

19.4%

108

100%

$ 425

3.9%

$ 766

7.0%

$ 929

8.5%

$2,382

21.9%

$ 6,398

58.7%

$10,900

100%

Family

Population 18.2% 17.4% 21.7% 42.7% 0.0% 100%

As displayed in the previous table, 18.2 percent of assessment area families are low-income

families. Based on 2008 HMDA data, the bank‟s performance is generally within range of this

statistic. The bank made eight loans (11.9 percent of combined HMDA lending) to low-income

borrowers, which included five refinance loans (17.9 percent of refinance loans) and three home

improvement loans (17.6 of home improvement loans);15

the bank did not make any home

purchase loans to low-income borrowers. The bank‟s loan distribution to low-income borrowers

appears generally favorable compared to 2008 aggregate performance, which indicates that other

lenders made 8.1 percent of home purchase loans to low-income borrowers, as were 5.9 percent

of refinance loans, and 11.6 percent of home improvement loans. Similar to 2008 performance,

the bank‟s 2007 HMDA lending figures are generally within range of the low-income family

population statistic, 18.2 percent. For the year 2007, the bank made 13 loans (12.0 percent of

combined HMDA lending) to low-income borrowers, which included seven refinance loans

(15.6 percent of refinance loans) and six home improvement loans (18.2 percent of home

improvement loans);16

the bank did not make any home purchase loans to low-income

borrowers. The bank‟s loan distribution to low-income borrowers appears generally favorable

compared to 2007 aggregate performance, which indicates that other lenders made 7.7 percent of

15

Applicant income information was unknown for all six multi-family dwelling loans made in 2008. 16

Applicant income information was unknown for all four multi-family dwelling loans made in 2007.



25

home purchase loans to low-income borrowers, as were 7.1 percent of refinance loans, and 10.2

percent of home improvement loans. In light of these findings, the bank‟s distribution of loans to

low-income borrowers is good, particularly when compared to aggregate performance data.

Census data reflect that 17.4 percent of assessment area families are moderate-income families.

Based on 2008 HMDA data, the bank‟s performance is somewhat lower than this statistic. The

bank made eight loans (11.9 percent of combined HMDA lending) to moderate-income

borrowers, which included one home purchase loan (6.3 percent of home purchase loans), four

refinance loans (14.3 percent of refinance loans) and three home improvement loans (17.6

percent of home improvement loans). The bank‟s loan distribution to moderate-income

borrowers is generally in line with 2008 aggregate performance, which indicates that other

lenders made 21.6 percent of home purchase loans to moderate-income borrowers, as were 15.8

percent of refinance loans, and 18.1 percent of home improvement loans. The bank‟s 2007

HMDA lending figures are better than 2008 performance and generally within range of the

moderate-income family population statistic, 17.4 percent. For the year 2007, the bank made 20

loans (18.5 percent of combined HMDA lending) to moderate-income borrowers, which

included three home purchase loans (11.5 percent of home purchase loans), 11 refinance loans

(24.4 percent of refinance loans) and six home improvement loans (18.2 percent of home

improvement loans). The bank‟s loan distribution to moderate-income borrowers appears in line

with 2007 aggregate performance, which indicates that other lenders made 21.2 percent of home

purchase loans to moderate-income borrowers, as were 18.3 percent of refinance loans, and 20.3

percent of home improvement loans. In light of these findings, the bank‟s distribution of loans to

moderate-income borrowers is adequate.

Small business loans were reviewed to determine the bank‟s lending level to small business

entities. The sample of loans was analyzed by the revenue size of the business and by the loan

amount. Dun & Bradstreet data was used for comparison to measure the bank‟s performance for

small business lending. The following tables show the distribution of small business loans in

2008 and 2007 by business revenue level and the loan origination amount.



26

2008 Lending Distribution by Business Revenue Level

Gross Revenue Loan Origination Amount (in $000s)

TOTAL <$100 >$100<$250 >$250<$1,000

$1 Million or Less 9 9 22 40

9.3% 9.3% 22.7% 41.2%

Greater Than $1 Million 14 15 28 57

14.4% 15.5% 28.9% 58.8%

TOTAL 23 24 50 97

17

23.7% 24.7% 51.5% 100%

As reflected in the preceding table, the bank made 41.2 percent of its small business loans to

entities with gross annual revenues of $1 million or less. According to Dun & Bradstreet data,

87.4 percent of the business entities operating within this assessment area are small businesses.

Although significantly less than the percentage of small business entities operating within this

assessment area, the bank‟s level of small business lending is above performance reflected in

2008 CRA aggregate data, which indicate that 34.3 percent of reported small business loans were

made to businesses with gross annual revenues of $1 million or less. Considering aggregate

lending performance, the bank‟s level of lending to small business entities in 2008 is considered

adequate.

17

This total does not include five small business loans where business revenue was not applicable to the credit

underwriting analysis.



27

2007 Lending Distribution by Business Revenue Level

Gross Revenue Loan Origination Amount (in $000s)

TOTAL <$100 >$100<$250 >$250<$1,000

$1 Million or Less 31 23 17 71

27.2% 20.2% 14.9% 62.3%

Greater Than $1 Million 19 7 17 43

16.7% 6.1% 14.9% 37.7%

TOTAL 50 30 34 114

43.9% 26.3% 29.8% 100.0%

As reflected in the previous table, the bank made 62.3 percent of its small business loans to

entities with gross annual revenues of $1 million or less. According to Dun & Bradstreet data,

87.4 percent of the business entities operating within this assessment area are small businesses.

Again, this performance is significantly less than the percentage of small business entities

operating within this assessment area; however, the bank‟s small business lending is significantly

above the CRA aggregate performance level. Based on 2007 CRA aggregate data, other lenders

reporting CRA data made 38.7 percent of small business loans to businesses with gross annual

revenues of $1 million or less. Considering aggregate lending performance, the bank‟s level of

lending to small business entities in 2007 is considered adequate. In summary, the bank‟s level

of lending to small business entities based on both years of small business loan activity is

considered adequate.

Similar to the borrower‟s profile analyses conducted for HMDA and small business loans, the

bank‟s distribution of consumer purpose loans was reviewed. The following table displays the

distribution of consumer purpose lending by borrower income level, compared to assessment

area household population income characteristics.



28


Income Level of Borrower

Dataset Borrower Income Classification


2008 Consumer

Purpose

12 23 20 87 34 176

6.8% 13.1% 11.4% 49.4% 19.3% 100%

$ 568 $ 818 $ 967 $ 9,477 $ 1,909 $ 13,739

4.1% 6.0% 7.0% 69.0% 13.9% 100%

2007 Consumer

Purpose

6 9 14 55 25 109

5.5% 8.3% 12.8% 50.5% 22.9% 100%

$ 240 $ 499 $ 1,097 $ 5,367 624 $7,827

3.1% 6.4% 14.0% 68.6% 8.0% 100%

Household

Population 21.6% 16.4% 18.8% 43.1% 0.0% 100%

The analysis of consumer purpose loan activity revealed that the bank‟s 2008 combined lending

percentage to LMI borrowers is less than the household population percentage, and 2007

performance to LMI borrowers is significantly below the LMI household population figure. In

2008 the bank made 6.8 percent by number of consumer purpose loans to low-income borrowers

(4.1 percent by dollar volume), which is significantly below the low-income household

population figure of 21.6 percent. Consumer purpose lending to moderate-income borrowers is

somewhat better, 13.1 percent (6.0 percent by dollar volume) compared to the moderate-income

household population figure of 16.4 percent. Based on 2008 consumer purpose lending activity,

the bank‟s performance to low-income borrowers is poor, while performance to moderate-

income borrowers is adequate.

Based on 2007 consumer purpose lending activity, the bank‟s combined performance to LMI

borrowers was lower than in 2008. For this period, the bank made 5.5 percent by number of

consumer purpose loans to low-income borrowers (3.1 percent by dollar volume) and 8.3 percent

by number to moderate-income borrowers (6.4 percent by dollar volume). This lending

performance is far below the LMI household population statistics, which indicate that 21.6

percent of assessment area households are classified as low-income and 16.4 percent are

classified as moderate-income. In summary, the bank‟s borrower distribution of consumer

purpose loans for both 2007 and 2008 is considered poor.

Despite poor performance based on consumer purpose loan activity, the bank‟s overall

distribution of loans in the St. Louis Assessment Area by borrowers‟ income/revenue profile is

adequate, based upon adequate performance in the more-heavily-weighted HMDA and small

business loan categories.



29


Midwest BankCentre made an adequate level of community development loans in the St. Louis

Assessment Area. The bank originated or renewed eight community development loans totaling

$11.9 million within this assessment area since the previous evaluation. This represents a

performance increase compared to performance noted at the bank‟s previous CRA evaluation.

The loans credited during this review period were for multi-family affordable housing projects.

Some of these projects were within St. Louis City; however, many were in other parts of the

assessment area. As there is generally a greater need for community development efforts in St.

Louis City, these activities are given more weight in the overall analysis.

INVESTMENT TEST

Midwest BankCentre‟s performance under the investment test is rated low satisfactory in the St.

Louis Assessment Area. The bank has an adequate level of qualified community development

investments and grants within the St. Louis assessment area. Further, this community

development investment activity exhibits adequate responsiveness to credit and community

development needs in the assessment area.

During this review period, the bank invested in four new financial instruments having a

community development purpose and benefitting the St. Louis Assessment Area; these

investments totaled $1.4 million. The bank also held eight other community development

investments totaling over $3.5 million, which were initiated before this review period but still

outstanding as of this examination date. All of these investments were in school district issued

bonds, where the majority of students were from LMI families and the schools were in LMI

areas. In addition to these investments, that bank also made numerous monetary

grants/donations to various entities serving community development needs in the St. Louis

Assessment Area. During this period, the bank made 37 donations for a total of just over

$100,000.

SERVICE TEST

The bank‟s service test performance in the St. Louis Assessment Area is rated Low Satisfactory.

The bank‟s service delivery systems are unreasonably inaccessible to geographies and

individuals of different income levels, particularly those in LMI categories. The bank‟s record of

opening and closing branches has generally not adversely affected accessibility of delivery

systems, particularly to LMI geographies and/or LMI individuals. Reasonableness of business

hours and services do not vary in a way that inconveniences LMI geographies and/or LMI

individuals. Lastly, the bank provides an adequate level of community development services in

the St. Louis Assessment Area.



30

Accessibility of Delivery Systems

The bank currently operates seven full-service branch offices and seven full-service ATMs

within the St. Louis Assessment Area. Additionally, the bank operates four limited-service

branches in this assessment area. The following table illustrates the location of the bank‟s

branches and ATMs, by income level of geography.

Branches and ATMs in Assessment Area

Facility Type Geography Income Category

TOTAL Low- Moderate- Middle- Upper-

Full Service Branches 0 0 3 4 7

0.0% 0.0% 42.9% 57.1% 100%

Full-Service ATMs 0 0 3 4 7

0.0% 0.0% 42.9% 57.1% 100%

Limited-Service Branches 0 0 1 3 4

0.0% 0.0% 25.0% 75.0% 100%

TOTAL 0 0 7 11 18

0.0% 0.0% 38.9% 61.1% 100%

Percentage of Geographies 11.2% 22.4% 38.7% 26.7% 100%18

Percentage of Population 6.1% 19.4% 43.2% 31.3% 100%

Three of the bank‟s branches could be considered within reasonable range of isolated LMI

geographies, although none of the bank‟s facilities are located within an LMI census tract. One

of these three branches is full-service, but does not offer Saturday hours. In addition, one of the

branches located near LMI tracts is a limited service branch within a nursing home and its

services are only available to residents of that facility. Further, none of the seven full-service

ATMs are located in an LMI tract. As noted above, 36.6 percent of assessment area census tracts

are classified as low- or moderate-income, and 25.5 percent of the population resides in LMI

geographies. The bank‟s branch and ATM distribution network compares negatively to

assessment area demographics and two of the three the branches within reasonable range of LMI

tracts have limited hours and availability.

In addition to the full-service ATMs noted above, the bank has 25 nonproprietary ATMs located

at convenience stores throughout the St. Louis MSA, which are cash dispensing-only. Of those

25 ATMs, none are located in low-income tracts, 3 are located in moderate-income tracts (12.0

percent), 10 are located in middle-income tracts (40.0 percent), and 11 are located in upper-

income tracts (48.0 percent). The bank‟s limited use of alternative service delivery systems to

augment the branch/ATM network does not materially increase accessibility for customers in

LMI areas. The bank‟s overall delivery systems are unreasonably inaccessible to areas and

18

Included in this figure are 1.1 percent of census tracts where the tract income classification is unknown.



31

individuals of different income levels in the St. Louis Assessment Area.

Changes in Branch Locations

Midwest BankCentre has not opened or closed any facilities in this assessment area since the

previous examination. Consequently, this record of opening and closing of branches has

generally not adversely affected the accessibility of the bank‟s delivery systems.

Reasonableness of Business Hours and Services in Meeting Assessment Area Needs

Full-service branch business hours are relatively consistent regardless of location. All but one of

the branches, offer Saturday business hours and extended hours on Friday. Similarly, six of the

seven branches with drive-up facilities are open until 6:00 p.m., Monday through Friday, and

until noon on Saturdays. The limited-service locations at the retirement communities play a

minimal role in the bank‟s overall branch network, as they are restricted to only servicing the

residents of the private communities in which they are located. Each of these restricted access

locations offers business hours two days a week, totaling between 6 and 13 hours per week.

The bank offers standard retail products, including low-cost checking and savings accounts,

certificates of deposit, real estate and consumer loans, and other services. In addition to retail

credit products offered and originated directly by the bank, the bank also provides additional

access to residential real estate loan products in the St. Louis Assessment Area by operating in a

broker capacity.19

During the review period, the bank brokered 425 mortgage loans under this

arrangement. Of these loans, 2 were made in low-income tracts (0.5 percent), 23 were made in

moderate-income tracts (5.4 percent), 171 were made in middle-income tracts (40.2 percent), and

229 were made in upper-income tracts (53.9 percent). While these brokered credit options are

offered uniformly as part of the bank‟s standard service delivery system, resulting in additional

loans made in LMI geographies, this brokered loan activity primarily benefitted borrowers in

middle- and upper-income census tracts.

In conclusion, business hours of operation and retail services do not vary in a way that

inconveniences customers in the St. Louis Assessment Area, particularly those in LMI

geographies and/or LMI individuals.

Community Development Services

Midwest BankCentre‟s employees participated in an adequate level of community development

services within the St. Louis Assessment Area. Many bank employees provided financial

expertise on an ongoing basis to numerous community development organizations. These

organizations focus on affordable housing, social services, and promoting economic

development. In total, the bank provided 53 different qualifying services to 24 organizations

within this assessment area.

19

Although not the creditor or initial funder for these transactions, the bank assists a third-party lender by providing

certain settlement services to credit applicants, for which the bank is compensated monetarily.



32

ILLINOIS

CRA RATING FOR ILLINOIS: NEEDS TO IMPROVE

The Lending Test is rated Needs to Improve.

The Investment Test is rated: Needs to Improve.

The Service Test is rated: Low Satisfactory.

Major factors supporting this state rating include:

The bank‟s lending activity levels reflect poor responsiveness to the credit needs of its

assessment area.

The overall geographic distribution of the bank‟s loans across all census tracts, including

LMI census tracts within the Rockford, Illinois Assessment Area, is poor.

The borrower distribution of the bank‟s lending activity reveals poor penetration among

individuals of different income levels, including LMI borrowers and businesses of varying

sizes.

The bank‟s level of community development loans is adequate.

The bank did not make any qualified community development investments and grants during

this period.

The bank has only one branch in Illinois and their delivery systems in this area are

unreasonably inaccessible to geographies and individuals of different income levels in the

Rockford, Illinois Assessment Area.

The bank provides an adequate level of qualified community development services in this

assessment area.


For this review period, Midwest BankCentre‟s CRA ratings in the state of Illinois were based

upon performance within its one Illinois assessment area, which was reviewed using full-scope

examination procedures. For the lending test, HMDA, small business, and consumer-purpose

loans originated during 2008 were used in the evaluation of the bank‟s performance. The review

period used for the community development activities, included community development loans,

investments, and services initiated during the period from the date the state‟s only branch was

opened to the current evaluation (March 21, 2008, through November 2, 2009).

•

•

•

•

•

•

•



33

DESCRIPTION OF INSTITUTION’S OPERATIONS IN ILLINOIS

As previously mentioned, Midwest BankCentre has delineated one assessment area for the state

of Illinois. The assessment area is comprised of a portion of the Rockford, Illinois MSA. The

portion of this area included in the bank‟s assessment area is Winnebago County.

Bank Structure

The bank maintains one full-service branch and no ATMs throughout the Rockford Assessment

Area. The bank‟s only branch office in this assessment area operates distinctly different from

other Midwest BankCentre branch facilities. Although it is a full-service branch, offering the

bank‟s full line of both deposit and loan products, it caters primarily to commercial customers

and has almost no focus on consumer loan activity. Based on the very limited branch presence in

this assessment area, the bank‟s recent entry into the Rockford, Illinois, market, and a business

focus restricted to commercial customers, the bank is in a significantly disadvantaged position to

reach/serve this entire assessment area.

General Demographics

The Rockford Assessment Area is comprised of one county, which is located in the north central

portion of Illinois and had a population of 278,418. In comparison, the entire MSA includes two

counties and has a total population of 320,204. This assessment area abuts the southern border

of Wisconsin and is serviced by Interstate Highways 90 and 39. Rockford, which is the largest

city in the assessment area, had a population of 151,388 and ranked second in the state according

to 2000 census data.

Based on FDIC Deposit Market Share Report information as of June 30, 2009, there is a good

level of banking competition throughout the Rockford Assessment Area. There are 26

institutions within the Rockford MSA operating 106 offices; Midwest BankCentre is ranked 25th

in the MSA with a deposit market share of 0.02 percent.



34

Income and Wealth Demographics

This assessment area contains 76 census tracts, which are displayed in the following table by

income level of geography and family population characteristics.

Assessment Area Demographics by Geography Income Category


Census Tracts 4 20 37 15 0 76

5.3% 26.3% 48.7% 19.7% 0.0% 100%

Family Population 2,481 14,797 39,134 17,587 0 73,999

3.4% 20.0% 52.9% 23.8% 0.0% 100%

The previous table reveals that there are 4 census tracts (5.3 percent) designated as low-income

and 20 census tracts (26.3 percent) designated as moderate-income in the Rockford Assessment

Area. As a comparison, 3.4 percent of the assessment area families reside in low-income tracts

and 20.0 percent of the assessment area families reside in moderate-income tracts. The vast

majority of families (76.7 percent) reside in middle- and upper-income tracts.

Based upon the 2000 census data, the median family income for the assessment areas was

$52,258, which is slightly lower than the 2000 Rockford MSA median family income figure of

$53,128. More recently, HUD estimates the 2008 Rockford MSA median family income to be

$60,500, which represents a change of 13.9 percent since 2000. The following table displays

population percentages of assessment area families by income level, compared to the Rockford

MSA population as a whole.

Family Population by Income Level


Assessment Area 13,924 14,086 17,896 28,093 0 73,999

18.8% 19.0% 24.2% 38.0% 0.0% 100%

Rockford MSA 15,584 15,915 20,674 33,234 0 85,407

18.2% 18.6% 24.2% 38.9% 0.0% 100%

As shown in the previous table, the population characteristics of the assessment area are closely

matched to that of the Rockford MSA. Both the assessment area and the Rockford MSA have a

significant percentage of LMI families, noted to be 37.8 and 36.8 percent, respectively. Further,

the percentage of assessment area families living below the poverty level (6.9 percent) is slightly

above that of the Rockford MSA figure (6.7 percent).



35

Housing Demographics

Within the assessment area, 66.1 percent of housing units are owner-occupied, just below the

Rockford MSA owner-occupancy rate of 67.1 percent. Further, the level of owner-occupied

housing units is 23.5 and 49.3 percent in LMI census tracts, respectively. The 2000 median

housing value for the assessment area was $90,887, which is below the 2000 median housing

value for the Rockford MSA of $94,280. These figures suggest more affordable housing in the

assessment area as compared to the Rockford MSA. However, the affordability ratios20

for both

the assessment area and the Rockford MSA are 47.0 percent. Median gross rents are also equally

matched at $514 for the assessment area and $515 for the Rockford MSA. Therefore, it appears

that overall housing affordability is similar in both areas.

Industry and Employment Demographics

The Rockford Assessment Area has a diverse employment base, but has suffered during the

recent economic downturn. Dun & Bradstreet data indicate that three of the top industries in the

assessment area are construction, manufacturing, and retail trade. Unemployment rates for this

assessment area are displayed in the following table:

Location September 2009 2008 Average

Winnebago County 15.8% 8.7%

Rockford, IL MSA 15.5% 8.8%

As displayed in the previous table, the September 2009 unemployment rate for the Rockford

Assessment Area was 15.8 percent, which is similar to the Rockford MSA unemployment rate of

15.5 percent.

Community Contact Information

As part of this CRA examination, two community contact interviews were conducted in order to

obtain information regarding the bank‟s performance in this assessment area, including

information relating to credit needs, community development opportunities, and the local

economy. The interviewees represented housing and economic development organizations.

Both contacts noted that the recession has taken a toll on the region. Especially hard hit is the

region‟s manufacturing sector, which accounts for approximately one-quarter of total

employment. One contact noted that there is a shortage of low-income housing in the area. The

contact further stated that low-income neighborhoods near downtown have a lack of financial

services from any bank. Finally, both contacts mentioned that there were plenty of opportunities

for involvement from financial institutions in the redevelopment of Rockford.

20

This figure is calculated by dividing the median household income by the median housing value; it represents the

amount of single family owner-occupied housing that a dollar of income can purchase for the median household in

the geography. Values closer to 100 percent indicate greater affordability.



36

CONCLUSIONS WITH RESPECT TO PERFORMANCE TESTS IN THE ROCKFORD,

ILLINOIS ASSESSMENT AREA

LENDING TEST

The bank‟s Lending Test performance in the Rockford, Illinois Assessment Area is rated Needs

to Improve. Despite the bank‟s relatively recent introduction into the Rockford, Illinois market,

the minimal level of lending in this assessment area seems unusually low and indicates a lack of

responsiveness to credit needs. Based on the minimal loan activity available for analysis, the

geographic distribution of loans reflects poor penetration throughout the assessment area, and

loan distribution by borrower‟s income profile reflects poor penetration among borrowers of

different income levels and businesses of different sizes. Lastly, in light of the fact the bank is

still in process of establishing a market presence in this assessment area, the minimal level of

community development loans qualified during this review period is still considered adequate.

Lending Activity

During the review period, the bank made two consumer purpose loans and five small business

loans in this assessment area; the bank did not make any HMDA loans in this assessment area.

Despite the fact that the bank is still relatively new to this market, this low level of lending

activity represents poor responsiveness to assessment area credit needs.

Geographic Distribution of Loans

As previously noted, the Rockford Assessment Area is comprised of the 76 census tracts located

within Winnebago County. This assessment area contains 4 low-income and 20 moderate-

income census tracts.

The bank made no HMDA loans in this assessment area; therefore a geographic distribution of

loans analysis was not able to be completed for this loan product.

While business lending is a primary focus of the bank in this assessment area, the bank only

made five small business loans in this assessment area during the review period. Of these five

small business loans, none were made in low-income tracts, one was made in a moderate-income

tract (20.0 percent), two were made in middle-income tracts (40.0 percent), and two were made

in upper-income tracts (40.0 percent). Dun & Bradstreet data indicate that 5.1 percent of small

businesses are located in low-income tracts and 18.5 percent are located in moderate-income

tracts. Further, 2008 HMDA aggregate data indicate that other lenders made 16.6 percent of

small business loans in LMI tracts. Therefore, the bank‟s geographic distribution of small

business loans is adequate.

The bank extended two consumer purpose loans in this assessment area during the review period.

Both of these loans were made in middle-income census tracts. Based on the minimal consumer

loan activity available for review, the geographic distribution of consumer loans is considered

poor.



37

Loan Distribution by Borrower’s Profile

The Lending Test performance standards evaluate the bank‟s lending to borrower of various

income levels for HMDA and consumer purpose loans. As mentioned previously, the bank made

no HMDA loans and only two consumer purpose loans in this assessment area. Both consumer

loans were made to upper-income borrowers. As a comparison, 39.9 percent of the assessment

area household population is categorized as LMI. Based on this minimal loan activity, the

bank‟s performance by borrower‟s income profile is considered poor.

As noted earlier, the bank made five small business loans in this assessment area, of which three

(60.0 percent) were to businesses with gross annual revenue of $1 million or less. This lending

performance is below the 2008 Dun & Bradstreet data, estimating that 89.1 percent of

assessment area businesses have gross annual revenue of $1 million or less. Conversely, the

bank‟s performance is above peer performance; 2008 CRA Aggregate Data indicate that 31.4

percent of small business loans were to businesses with gross annual revenue of $ $1 million or

less. Therefore, while difficult to draw meaningful conclusions on such a low level of lending

activity, it appears the bank‟s small business loan performance by borrower‟s profile is adequate.


During this evaluation, the bank made one community development loan for $425,000 for a

multi-family affordable housing project within the Rockford Assessment Area. This level of

community development lending in considered adequate given the bank‟s limited presence and

newness of operation within this assessment area.

INVESTMENT TEST

The bank‟s Investment Test performance in the Rockford Assessment Area is rated Needs to

Improve. Midwest BankCentre did not make any qualified community development investments

or grants within this assessment area. This lack of investment and grant activity exhibits poor

responsiveness to credit and community development needs in the assessment area.

SERVICE TEST

The bank‟s performance in the Rockford Assessment area is rated Low Satisfactory under the

Service Test. The bank has one branch located within this assessment area, which was opened

during this review period and accounts for 8.3 percent of the bank‟s 12 branches (total offices in

both states). This branch is not particularly accessible to the assessment area‟s LMI areas given

the size of the assessment area and the location of the branch; the bank‟s alternative delivery

systems have not adequately addressed the gap in service. However, as the bank has only

recently began operations in this assessment area (and not closed any offices), the bank‟s record

of opening and closing of branches has generally not adversely affected the accessibility of its

delivery systems, particularly to LMI geographies and/or LMI individuals. Finally, Midwest

BankCentre provided an adequate level of community development services within this

assessment area.



38

Accessibility of Delivery Systems

The bank operates one full-service branch within the Rockford Assessment Area. No ATMs are

located within this assessment area. As noted in the Description of Institution’s Operations in

Illinois section, this assessment area contains 76 census tracts, the largest percentage of which

are middle-income geographies (48.7 percent), followed by LMI census tracts (31.6 percent), and

lastly upper-income census tracts (19.7 percent). The bank‟s only branch in this assessment area

is located in an upper-income census tract, which is further surrounded by other upper-income

geographies. Based on the assessment area demographics, the bank‟s delivery systems are

unreasonably inaccessible to geographies and individuals of different income levels within this

assessment area, particularly LMI areas/individuals.

Changes in Branch Locations

Midwest BankCentre opened its only branch office in this assessment area during this review

period; no offices were closed. Therefore, the bank‟s record of opening and closing of branches

has generally not adversely affected the accessibility of its delivery systems, particularly to LMI

geographies and/or LMI individuals.

Reasonableness of Business Hours and Services in Meeting Assessment Area Needs

This assessment area‟s sole branch office is open Monday through Friday from 8:30 a.m. until

5:00 p.m. The bank does not offer extended hours or Saturday hours at this location. As

mentioned previously, this branch caters primarily to business customers and does not actively

seek consumer credit or deposit customers. Based primarily on the fact there is only one branch

office in this assessment area, bank services do not vary in a way that inconveniences customers,

particularly those in LMI geographies and/or LMI individuals.

Community Development Services

During the review period, bank employees were involved in two qualifying community

development services with two organizations. These services were targeted to economic

development organizations commensurate with the bank‟s focus in this assessment area. Based

on the bank‟s limited time to become established in this assessment area, this low level of

community development services is still considered adequate.



39

APPENDIX A

SCOPE OF EXAMINATION TABLES


TIME PERIOD REVIEWED

1/1/2007 TO 12/31/2008 (HMDA data, CRA data, and Consumer

Purpose loans)

11/16/2007 TO 11/1/2009 (community development investment and

services activity)

FINANCIAL INSTITUTION

Midwest BankCentre St. Louis, MO

PRODUCTS

REVIEWED

Small Business

Consumer Purpose

HMDA Reportable

AFFILIATE(S)

AFFILIATE

RELATIONSHIP

PRODUCTS

REVIEWED -

N/A N/A N/A



40

APPENDIX A (Continued)

LIST OF ASSESSMENT AREAS AND TYPE OF EXAMINATION

ASSESSMENT AREA

TYPE OF

EXAMINATION

BRANCHES

VISITED

OTHER

INFORMATION

MISSOURI

St. Louis City, St. Louis County, St.

Charles County, Jefferson County

Full-scope review

2

ILLINOIS

Winnebago County

Full-scope review

0

The scope of

examination for

Winnebago County

starts from the date

the sole branch in

this assessment are

began operation,

March 21, 2008.



41

APPENDIX B

SUMMARY OF STATE AND MULTISTATE METROPOLITAN AREA RATINGS

State or

Multistate

Metropolitan

Area Name

Lending Test

Rating

Investment

Test

Rating

Service Test

Rating

Overall State

Rating

Missouri

Needs to

Improve

Low

Satisfactory

Low

Satisfactory

Needs to

Improve Illinois

Needs to

Improve

Needs to

Improve

Low

Satisfactory

Needs to

Improve



42

APPENDIX C

GEOGRAPHIC AND BORROWER DISTRIBUTION TABLES

2008 Midwest BankCentre HMDA Loan Distribution

Income Categories

HMDA

By Tract Income By Borrower Income

# % $(000s) % # % $(000s) %

Home Purchase

Low 0 0.0% 0 0.0% 0 0.0% 0 0.0%

Moderate 0 0.0% 0 0.0% 1 6.3% 103 1.7%

Low/Moderate Total 0 0.0% 0 0.0% 1 6.3% 103 1.7%

Middle 8 50.0% 797 13.5% 3 18.8% 414 7.0%

Upper 8 50.0% 5,100 86.5% 10 62.5% 2,621 44.4%

Unknown 0 0.0% 0 0.0% 2 12.5% 2,759 46.8%

Tract Unknown 0 0.0% 0 0.0% 0 0.0% 0 0.0%

Total 16 100.0% 5,897 100.0% 16 100.0% 5,897 100.0%

Refinance

Low 0 0.0% 0 0.0% 5 17.9% 240 5.8%

Moderate 4 14.3% 247 6.0% 4 14.3% 283 6.8%


Middle 11 39.3% 605 14.6% 5 17.9% 166 4.0%

Upper 13 46.4% 3,295 79.5% 11 39.3% 2,570 62.0%

Unknown 0 0.0% 0 0.0% 3 10.7% 888 21.4%

Tract Unknown 0 0.0% 0 0.0% 0 0.0% 0 0.0%

Total 28 100.0% 4,147 100.0% 28 100.0% 4,147 100.0%

Home Improvement

Low 0 0.0% 0 0.0% 3 17.6% 52 13.8%

Moderate 2 11.8% 35 9.3% 3 17.6% 64 17.0%


Middle 10 58.8% 230 61.0% 3 17.6% 45 11.9%

Upper 5 29.4% 112 29.7% 8 47.1% 216 57.3%

Unknown 0 0.0% 0 0.0% 0 0.0% 0 0.0%

Tract Unknown 0 0.0% 0 0.0% 0 0.0% 0 0.0%

Total 17 100.0% 377 100.0% 17 100.0% 377 100.0%

Multi-Family

Low 0 0.0% 0 0.0% 0 0.0% 0 0.0%

Moderate 4 66.7% 6,132 55.4% 0 0.0% 0 0.0%

Low/Moderate Total 4 66.7% 6,132 55.4% 0 0.0% 0 0.0%

Middle 2 33.3% 4,928 44.6% 0 0.0% 0 0.0%

Upper 0 0.0% 0 0.0% 0 0.0% 0 0.0%

Unknown 0 0.0% 0 0.0% 6 100.0% 11,060 100.0%

Tract Unknown 0 0.0% 0 0.0% 0 0.0% 0 0.0%

Total 6 100.0% 11,060 100.0% 6 100.0% 11,060 100.0%

HMDA Totals

Low 0 0.0% 0 0.0% 8 11.9% 292 1.4%

Moderate 10 14.9% 6,414 29.9% 8 11.9% 450 2.1%


Middle 31 46.3% 6,560 30.5% 11 16.4% 625 2.9%

Upper 26 38.8% 8,507 39.6% 29 43.3% 5,407 25.2%

Unknown 0 0.0% 0 0.0% 11 16.4% 14,707 68.5%

Tract Unknown 0 0.0% 0 0.0% 0 0.0% 0 0.0%

Total 67 100.0% 21,481 100.0% 67 100.0% 21,481 100.0%



43

APPENDIX C (continued)

2007 Midwest BankCentre HMDA Loan Distribution

Income Categories

HMDA

By Tract Income By Borrower Income

# % $(000s) % # % $(000s) %

Home Purchase

Low 0 0.0% 0 0.0% 0 0.0% 0 0.0%

Moderate 3 11.5% 182 7.9% 3 11.5% 173 7.5%


Middle 14 53.8% 1,132 49.0% 4 15.4% 251 10.9%

Upper 9 34.6% 998 43.2% 9 34.6% 646 27.9%

Unknown 0 0.0% 0 0.0% 10 38.5% 1,242 53.7%

Tract Unknown 0 0.0% 0 0.0% 0 0.0% 0 0.0%

Total 26 100.0% 2,312 100.0% 26 100.0% 2,312 100.0%

Refinance

Low 1 2.2% 189 4.5% 7 15.6% 247 5.9%

Moderate 2 4.4% 1,295 30.9% 11 24.4% 449 10.7%


Middle 28 62.2% 1,289 30.8% 6 13.3% 347 8.3%

Upper 14 31.1% 1,417 33.8% 15 33.3% 1,183 28.2%

Unknown 0 0.0% 0 0.0% 6 13.3% 1,964 46.9%

Tract Unknown 0 0.0% 0 0.0% 0 0.0% 0 0.0%

Total 45 100.0% 4,190 100.0% 45 100.0% 4,190 100.0%

Home Improvement

Low 0 0.0% 0 0.0% 6 18.2% 178 12.9%

Moderate 4 12.1% 277 20.1% 6 18.2% 144 10.4%


Middle 23 69.7% 855 61.9% 8 24.2% 331 24.0%

Upper 6 18.2% 249 18.0% 12 36.4% 553 40.0%

Unknown 0 0.0% 0 0.0% 1 3.0% 175 12.7%

Tract Unknown 0 0.0% 0 0.0% 0 0.0% 0 0.0%

Total 33 100.0% 1,381 100.0% 33 100.0% 1,381 100.0%

Multi-Family

Low 0 0.0% 0 0.0% 0 0.0% 0 0.0%

Moderate 2 50.0% 2,604 86.3% 0 0.0% 0 0.0%


Middle 2 50.0% 413 13.7% 0 0.0% 0 0.0%

Upper 0 0.0% 0 0.0% 0 0.0% 0 0.0%

Unknown 0 0.0% 0 0.0% 4 100.0% 3,017 100.0%

Tract Unknown 0 0.0% 0 0.0% 0 0.0% 0 0.0%

Total 4 100.0% 3,017 100.0% 4 100.0% 3,017 100.0%

HMDA Totals

Low 1 0.9% 189 1.7% 13 12.0% 425 3.9%

Moderate 11 10.2% 4,358 40.0% 20 18.5% 766 7.0%

Low/Moderate Total 12 11.1% 4,547 41.7% 33 30.6% 1,191 10.9%

Middle 67 62.0% 3,689 33.8% 18 16.7% 929 8.5%

Upper 29 26.9% 2,664 24.4% 36 33.3% 2,382 21.9%

Unknown 0 0.0% 0 0.0% 21 19.4% 6,398 58.7%

Tract Unknown 0 0.0% 0 0.0% 0 0.0% 0 0.0%

Total 108 100.0% 10,900 100.0% 108 100.0% 10,900 100.0%

44

APPENDIX D

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.

Census tract: A small subdivision of metropolitan and other densely populated counties.

Census tract boundaries do not cross county lines; however, they may cross the boundaries of

metropolitan statistical areas. Census tracts usually have between 2,500 and 8,000 persons, and

their physical size varies widely depending upon population density. Census tracts are designed

to be homogeneous with respect to population characteristics, economic status, and living

conditions to allow for statistical comparisons.

Community development: All Agencies have adopted the following language. Affordable

housing (including multifamily rental housing) for low- or moderate-income individuals;

community services targeted to low- or moderate-income individuals; activities that promote

economic development by financing businesses or farms that meet the size eligibility standards

of the Small Business Administration‟s Development Company or Small Business Investment

Company programs (13 CFR 121.301) or have gross annual revenues of $1 million or less; or,

activities that revitalize or stabilize low- or moderate-income geographies.

Effective September 1, 2005, the Board of Governors of the Federal Reserve System, Office of

the Comptroller of the Currency, and the Federal Deposit Insurance Corporation have adopted

the following additional language as part of the revitalize or stabilize definition of community

development. Activities that revitalize or stabilize-

(i) Low-or moderate-income geographies;

(ii) Designated disaster areas; or

(ii) Distressed or underserved non-metropolitan middle-income geographies

designated by the Board, Federal Deposit Insurance Corporation, and Office of

the Comptroller of the Currency, based on-

a. Rates of poverty, unemployment, and population loss; or

b. Population size, density, and dispersion. Activities that revitalize and

stabilize geographies designated based on population size, density, and

dispersion if they help to meet essential community needs, including needs

of LMI individuals.

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.

45

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, which 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).

Full-scope review: Performance under the Lending, Investment, and Service Tests is analyzed

considering performance context, quantitative factors (for example, geographic distribution,

borrower distribution, and total number and dollar amount of investments), and qualitative

factors (for example, innovativeness, complexity, and responsiveness).

Geography: A census tract delineated by the United States Bureau of the Census in the most

recent decennial census.

Home Mortgage Disclosure Act (HMDA): The statute that requires certain mortgage lenders

that do business or have banking offices in a metropolitan statistical area to file annual summary

reports of their mortgage lending activity. The reports include such data as the race, gender, and

the income of applications, the amount of loan requested, and the disposition of the application

(for example, approved, denied, and withdrawn).

Home mortgage loans: Includes home purchase and home improvement loans as defined in the

HMDA regulation. This definition also includes multifamily (five or more families) dwelling

loans, loans for the purchase of manufactured homes and refinancing of home improvement and

home purchase loans.

Household: Includes all persons occupying a housing unit. Persons not living in households are

classified as living in group quarters. In 100 percent tabulations, the count of households always

equals the count of occupied housing units.

Limited-scope review: Performance under the Lending, Investment, and Service Tests is

analyzed using only quantitative factors (for example, geographic distribution, borrower

distribution, 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.

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.

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Metropolitan area (MA): A metropolitan statistical area (MSA) or a metropolitan division

(MD) as defined by the Office of Management and Budget. An MSA is a core area containing at

least one urbanized area of 50,000 or more inhabitants, together with adjacent communities

having a high degree of economic and social integration with that core. An MD is a division of

an MSA based on specific criteria including commuting patterns. Only an MSA that has a

population of at least 2.5 million may be divided into MDs.

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 percent 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 percent and less than 80

percent, in the case of a geography.

Multifamily: Refers to a residential structure that contains five or more units.

Other products: Includes any unreported optional category of loans for which the institution

collects and maintains data for consideration during a CRA examination. Examples of such

activity include consumer loans and other loan data an institution may provide concerning its

lending performance.

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 qualified investment is defined as any lawful investment, deposit,

membership share, or grant that has as its primary purpose community development.

Rated area: A rated area is a state or multi-state 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 multi-state metropolitan area, the institution will receive

a rating for the multi-state metropolitan area.

Small loan(s) to business (es): A loan included in 'loans to small businesses' as defined in the

Consolidated Report of Condition and Income (Call Report) and the Thrift Financial Reporting

(TFR) instructions. These loans have original amounts of $1 million or less and typically are

secured either by nonfarm or nonresidential real estate or are classified as commercial and

industrial loans. However, thrift institutions may also exercise the option to report loans secured

by nonfarm residential real estate as "small business loans" if the loans are reported on the TFR

as non-mortgage, commercial loans.

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Small loan(s) to farm(s): 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, or are classified as

loans to finance agricultural production and other loans to farmers.

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.

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