Factors for Loans: Bank Lending Practices in Real Estate & Community Development, Slides of Geography

Download Factors for Loans: Bank Lending Practices in Real Estate & Community Development and more Slides Geography in PDF only on Docsity! Baker Boyer Bank Community Reinvestment Act 2021 Public File §25.43 Content and availability of Public File (a) Information available to the public: A bank shall maintain a public file that includes the following information: 1) All written comments received from the public for the current year and each of the prior two calendar years that specifically relate to the bank’s performance in helping meet the community credit needs, and any response to the comments by the bank, if neither the comments nor the responses contain statements that reflect adversely on the good name or reputation of any persons other than the bank or publication of which would violate specific provisions of law. No written comments were received. 2) A copy of the public section of the bank’s most recent CRA Performance Evaluation prepared by the Office of the Comptroller of the Currency (OCC). The bank shall place this copy in the public file within 30 business days after its receipt from the Office of the Comptroller of the Currency; Please See Attached Copy of 2019 Performance Evaluation 3) A list of the bank’s branches, their street addresses, and geographies; *All Lobbies are temporarily closed due to COVID-19 restrictions Washington: State Code 53 County County Code MSA Code Walla Walla 071 47460 Benton 005 28420 Franklin 021 28420 Yakima 077 49420 Updated March 2,2021 Location Address Lobby Hours Drive-thru hours Census Tract Walla Walla Main Office 7 W. Main St, Walla Walla, WA Monday-Thursday: 9am-5pm; Friday: 9am-6pm Monday-Thursday: 9am-5:30pm; Friday: 9am-6pm 9206.00 Eastgate Branch 1931 E Isaacs, Walla Walla, WA Monday-Thursday: 9am-5pm; Friday: 9am-6pm Monday-Thursday: 9am-5:30pm; Friday: 9am-6pm 9208.01 Plaza Branch 1530 Plaza Way, Walla Walla, WA Monday-Thursday: 9am-5pm; Friday: 9am-6pm Monday-Thursday: 9am-5:30pm; Friday: 9am-6pm 9206.00 Wheatland Branch 1500 Catherine St, Walla Walla, WA By appointment 9207.01 Tri-Cities Branch 1149 N Edison St, Suite A, Kennewick WA Monday-Friday: 9am-5pm Monday-Friday: 11am-2:00pm; 0109.01 Yakima Branch 921 Seattle Slew Run, Yakima, WA Monday-Friday: 9am-4pm 0004.00 Oregon: State Code 41 Location Address Lobby Hours Drive-thru hours Census Tract Milton Freewater Branch 320 N. Columbia, Milton-Freewater, OR Monday-Thursday: 9am-5pm; Friday: 9am-6pm Monday-Thursday: 9am-5:30pm; Friday: 9am-6pm 9502.00 ATM Locations Walla Walla Main Office Branch 16 S 2nd Walla Walla, WA 99362 Eastgate Branch 1931 E. Isaacs Walla Walla, WA 99362 Plaza Branch 1530 Plaza Way Walla Walla, WA 99362 Milton-Freewater Branch 320 N. Columbia Milton-Freewater, OR 97862 County County Code MSA Code Umatilla 059 9999 Updated March 2,2021 Baker Boyer Bank COMMUNITY REINVESTMENT ACT STATEMENT Affirmed by Board of Directors December 2020 CRA Statement Baker Boyer National Bank, headquartered in Walla Walla, Washington. Baker Boyer has seven banking locations in Washington and Oregon consisting of four branches in Walla Walla, one branch each in Yakima and Kennewick, Washington and in Milton-Freewater, Oregon. Baker Boyer National Bank is a full-service bank which is firmly committed to providing our community with a full range of quality products and services. It is the policy of Baker Boyer National Bank to ensure proper adherence to the provisions and intent of the Community Reinvestment Act (CRA) in order that the goals of meeting the credit needs of the communities the Bank serves, including low and moderate income neighborhoods, are met. We are committed to serve our communities to the best of our abilities within the limits of our financial, physical, and staffing; paying heed to sound banking practices and our obligation to depositors and stockholders. The bank focuses on lending deposits locally to the people and communities within our lending area. In order to ensure proper adherence to the provisions of the CRA, it is important to understand the methodology used by the Comptroller of the Currency, our bank regulator, for assessments of our performance. The bank receives positive consideration for home loans that we make to low- or moderate-income individuals within our primary market area (assessment area). In addition to the direct lending to individuals described above, the bank also receives positive consideration for community development loans, investments, and services. In the context of CRA, “community development” means loans, investments, or services that the bank provides to • organizations or individuals that in turn provide affordable housing or other community services targeted to low- or moderate- income individuals • small businesses or small farms (with gross revenues under $1 million generally) Nondiscrimination Policy Statement It is the policy of Baker Boyer National Bank to comply with the letter and spirit of all applicable federal and state consumer protection, civil rights, and fair housing laws and regulations fully and completely. Each lending officer and bank employee is required to be knowledgeable of the requirements of all such laws and regulations affecting his or her job responsibilities, and it is the Updated March 2,2021 affirmative duty of each officer and employee to carry out their responsibilities at all times in a manner that complies with the requirements of all such applicable laws and regulations. Baker Boyer National Bank's lending policies, procedures, and practices will not in any way discriminate against any person on the basis of race, color, religion, national origin, sex, marital status, age (providing the applicant has the capacity to enter into a contract) or other prohibited basis. This policy of nondiscrimination covers all aspects of bank services including, in particular, the application for, consideration of, granting, servicing, and collection of extensions of credit. Assessment Areas Baker Boyer has 4 assessment areas consisting of 7 banking locations. • Walla Walla County, WA; MSA 47460 (4 locations) o Main Branch –Downtown - offers retail banking, consumer lending services and D.S. Baker Advisor services, which includes trust, investment, family advising and commercial lending services o Plaza, Eastgate and Wheatland - retail banking branches • Yakima County, WA; MSA 49420 (1 location) o Yakima DS Baker Advisor location • Benton and Franklin Counties, WA; MSA 28420 (1 location) o Kennewick DS Baker Advisor location • Umatilla County, OR; MSA 99999 (1 location) o Milton Freewater- retail banking branch Technical Compliance The Bank is in compliance with the Community Reinvestment Act. The Bank maintains a program to document its efforts to determine the community development, credit, investment, and service needs of our delineated communities. The Executive Vice President, Chief Banking Officer is charged with the management and documentation of the bank’s CRA lending efforts and is responsible for the results of the CRA Lending Test score. The Executive Vice President, Chief Operating Officer is charged with the management and documentation of the bank’s CRA investment efforts and is responsible for the results of the CRA Investment portion of the Community Development test. The CRA Officer provides consultation, guidance and assists in coordinating and documenting efforts to carry out the program. Updated March 2,2021 The bank’s lending area is defined generally as Walla Walla, Yakima, Benton and Franklin Counties, Washington, and Umatilla County, Oregon; as illustrated by the maps attached in Exhibit A. Occasionally, the Bank will extend credit to borrowers who do not reside in its established market areas; but such extensions of credit is limited. This file, the bank’s master Community Reinvestment Act public file is maintained by the Bank’s CRA Officer. It is available on the bank’s intranet, (“the vault”) and accessible by all employees as well the bank’s website and accessible to the public. CRA Strategic Program Mission Baker Boyer is a 152-year-old an independent community bank that is headquartered in Walla Walla, Washington. Our mission statement is “Family Legacies Grown Locally”. The bank believes in supporting the communities in which we operate through Community Development activities and through useful products and services. Our goal is to help grow, protect, and secure family legacies for generations. We originate loans, provide donations, purchase investments and render services that promote the betterment of our economies, community infrastructures, opportunities and education. Objective Baker Boyer’s objective is to focus our community development activities that benefit the low-to- moderate income population within our assessment areas. We strive to work with community partners to identify opportunities that provide affordable housing or community services to low- to-moderate income individuals, as well as look for activities that promote economic development, stabilization or revitalization. Additionally Baker Boyer seeks to empower individuals to break the cycle of low to moderate subsistence. It is a long term goal that will take careful investment into the education, health, and economic infrastructure in order to both create a new educated and healthy workforce while pairing them with careers in industries of the future that are attracted to our communities. Vision It is the vision of Baker Boyer to continually increase the economic vitality of the communities we serve in order to help everyone in the community increase their quality of life and economic circumstances. Baker Boyer’s CRA Strategic Program focuses on identifying the immediate needs of our communities as well as to focus on long term solutions to current socio-economic disparities. This includes working with our community partners to find solutions for the immediate needs and to develop long term solutions such as education of low to moderate income individuals in order to raise their long-term economic potential. Baker Boyer also looks to alleviate health burdens of low to moderate income individuals that hinder their economic escalation. Updated March 2,2021 4. The level of equity in the property; 5. Any secondary sources of repayment; 6. Any additional collateral or credit enhancements (such as guarantees, mortgage insurance or take-out commitments). 7. The maximum loan amount by type of property; 8. Maximum loan maturities by type of property; 9. Amortization schedules; 10. Pricing structure for different types of real estate loans; 11. Loan-to-value limits by type of property. Interim Real Estate Loans Our bank's policy is to establish a portfolio which will assure fulfillment of the bank's responsibilities in (1) keeping its depositors' money safe, (2) earning sufficient income to provide adequate return on its capital, and (3) enabling our community and trade area to grow and prosper. The extension of interim loans is considered a proper form of commercial lending. Because this type of loan is generally very short and is paid when the project is completed, the Bank attempts to make loans of this type within the bounds of sound banking practice. Land Loans Land loans for purposes of developing property. Generally, the customer has to demonstrate that construction will go forward on the land within one year. Land loans are not made to speculators on the basis of hopes for future appreciation. Second Mortgage Loans Second mortgage loans are a proper loan for the Bank and often take the form of the home improvement loan discussed above. Business Loans Business loans are divided into four categories: operating lines of credit, loans for equipment purchased, for other capital improvement, and loans to new businesses partially guaranteed by the Small Business Administration. Ready Credit/ODP (Overdraft Protection) Ready Credit or ODP is a line of credit tied directly to a customer's checking account. This type of loan is available through the Installment Loan Department. It saves the customer overdraft charges by automatically transferring funds into their checking account to cover checks if their own funds do not. It has also become an excellent tool in helping the lower income and retired borrowers who may qualify for a small loan and can afford only a small minimum monthly payment. Profile of Participation in Special Loan Categories: Updated March 2,2021 Loan Analysis As of December 31, 2020, the total Bank deposits were $647,595 and total net loans were $340,802; for a loan-to-deposit ratio of 52.63%. The loan portfolio mix for each quarter end of 2020 is as follows: Quarter 1 3/31/20 Quarter 2 6/30/20 Quarter 3 9/30/20 Quarter 4 12/31/20 Real Estate Loans 74.93% 66.42% 67.60% 71.58% Commercial and other loans 20.50% 28.40% 27.24% 24.29% Agricultural Loans 4.56% 5.94% 5.93% 4.78% Installment Loans 2.30% 1.20% 1.19% 1.22% LESS: Allowance for Loan Loss (2.30%) (1.96%) (1.96%) (1.86%) 100.00% 100.00% 100.00% 100.00% Loan to Deposit Ratio 49.15% 53.77% 54.29% 52.63% Updated March 2,2021 EXHIBIT A BAKER BOYER NATIONAL BANK - ASSESSMENT AREA CENSUS TRACTS Walla Walla MSA 47460 Umatilla MSA 99999 Yakima MSA 49429 Benton MSA 28420 Franklin MSA 28420 9200.00 9400.00 0001.00 0019.01 0101.00 0110.02 0201.00 9201.00 9202.00 9203.00 9501.00 9502.00 9503.00 0002.00 0003.00 0004.00 0019.02 0020.01 0020.02 0102.01 0111.00 0102.02 0112.00 0103.00 0113.00 0202.00 0203.00 0204.00 9204.00 9504.00 0005.00 0021.01 0104.00 0114.01 0205.01 9205.00 9505.00 0006.00 0021.02 0105.00 0114.02 0205.02 9206.00 9506.00 0007.00 0022.00 0106.00 0115.01 0206.01 9207.01 9507.00 0008.00 0027.01 0107.01 0115.03 0206.03 9207.02 9508.00 0009.01 0028.01 0107.03 0115.04 0206.05 9208.01 9509.00 0009.02 0028.02 0107.05 0116.00 0206.06 9208.02 9209.00 9510.00 9511.00 0010.00 0011.00 0029.00 0030.01 0107.07 0117.00 0107.08 0118.00 0207.00 0208.00 9512.00 0012.01 0030.02 0108.03 0119.00 9801.00 9513.00 9514.00 0012.02 0013.00 0014.00 0015.01 0015.02 0016.01 0016.02 0017.01 0017.02 0018.00 0031.00 0032.00 0034.00 9400.01 9400.02 9400.03 9400.04 9400.05 9400.06 0108.05 0120.00 0108.07 0108.09 0108.10 0108.11 0108.13 0108.14 0109.01 0109.02 0110.01 State: 53 County: 71 State: 41 County: 59 State: 53 County: 77 State: 53 County: 5 State: 53 County: 21 Updated March 2,2021 Community Reinvestment Act Baker Boyer Bank Employee Services 2020 CRA Qualified Services Jan Darrington, Family Advisor – Kennewick Kiwanis Foundation Board. The Foundation provides annual college scholarships to high school students that are in need of funding to get to college. Serving Benton Franklin Counties 1 hour volunteered in 2020. Vesna Dodge, EVP Asset Management – TRIDEC Board member. Established in 1963, The Tri-City Nuclear Industrial Council, today known as Tri-City Development Council (TRIDEC) was organized for the purpose of promoting and advancing the economic strength and diversity in Benton and Franklin counties.TRIDEC is managed by a 39-member Board of Directors, comprised of representatives from the local business community, private sector leaders, and organizations committed to creating and supporting jobs in our region. Serving Benton Franklin Counties 8 hours volunteered in 2020. Mitch Roach, VP Business Banking Advisor – Habitat for Humanity Tri-County Partners, Family Selection Committee member. Family Selection Committee member since August 2002. Habitat partners with low-income working families to provide affordable housing and our committee reviews the application files, does family visits to the homes of qualifying applicants, and then makes a recommendation to the Habitat board regarding the decision of the applicant family. Habitat works in partnership with low-income working families, sponsors, and communities to build and renovate decent, affordable housing. Serving Benton, Franklin and Walla Walla Counties 13.25 hours volunteered in 2020. Mistee Verhulp, Family Advisor – Heads Up Tri-Cities, Board member. Heads-Up Tri-Cities supports organizations providing for the unmet mental health needs in the community, with a focus on those that service low income individuals. Chaired the Foster Kids Committee that focuses on the unmet needs of foster children in Benton and Franklin County that affect their mental wellbeing. Serving Benton Franklin Counties 17.5 hours volunteered in 2020. Mistee Verhulp, Family Advisor – United Way of Benton and Franklin County (Basic Needs Grant Committee). Grant Committee Member for donation by the Bill & Melinda Gates Foundation to be given out as grants for nonprofit organizations in Benton and Franklin County who provide for the basic needs of low income individuals and families in our area negatively impacted by the COVID-19 pandemic. Serving Benton Franklin Counties 6 hours volunteered in 2020. Jolene Riggs, Controller- Student Based Health Center. Geared to low-income students. Free to students. Health Centers in the schools: Blue Ridge, Wa-Hi, Pioneer Middle School, Lincoln High Alternative School. Serving Walla Walla area 40 hours volunteered in 2020. Updated March 2,2021 Ashley Mahan, Business Advisor - Blue Mountain Action Council, Barrel Full of Money Organizer. Organized Food Bank charity event (barrel full of money). Helped raise over $64,000 for the BMAC Food Bank. Facilitated and collected auction items, supported marketing efforts, and coordinated the sale of raffle tickets. Serving Walla Walla area 9 hours volunteered in 2020. Susie Colombo, VP Family Advisor – Board member for the Providence St. Mary Foundation. Raise money to support health care in the community, especially to low income people. Mission Statement: “As people of Providence, we reveal God’s love for all, especially the poor and vulnerable, through our compassionate service.” Serving Walla Walla and Umatilla County 65 hours volunteered in 2020. Lynsey Sherry, Banking Operation Support Manager – Blue Mountain Community Foundation - Scholarship Committee. Read and evaluate scholarship applications for those students who fall in the 'Financial Need' category. Determine scholarship award recipients. BMCF connects people, charitable causes, and community needs. The committee’s purpose is to provide scholarships to current and future college students. Serving the Walla Walla, Umatilla, Garfield, and Columbia counties 20 hours volunteered in 2020. Camille Snell, Trust Advisor – Yakima YWCA Board Member. The Yakima YWCA serves women and children of the Yakima Valley who need shelter from domestic violence. Support services are available to help the victims of domestic violence learn to cope and heal from the trauma they have experienced. The Yakima YWCA also offers a variety of programs to help women become independent. For instance, women can visit the Working Women's Wardrobe to select professional clothing for employment. In addition, there are a number of support groups available to women and children. Domestic violence is a major issue in Yakima, and the YWCA is working to help the victim’s transition to a healthy and peaceful life. Serving Yakima 20 hours volunteered in 2020. Ashley Mahan, Business Advisor - Habitat for Humanity- Board member. Housing services for low income families. Serves on the Walla Walla Committee for Habitat for Humanity, advises on mortgage lending. Serving Walla Walla area 4 hours volunteered in 2020. Cathy Schaeffer, Family Advisor – Downtown Walla Walla Foundation, Board member. Community development, developing and maintaining a comprehensive downtown revitalization strategy implementation a balance of activities in the areas of organization, promotion, design, and economic vitality. This includes coordinating with local governments, business, and non-profit enterprises. Recent involvement includes advocating for the Evergreen Housing Development Group, which has agreed to add affordable housing units in the new apartments they plan to build in the downtown area. Serving Walla Walla County- 14 hours volunteered in 2020. Danila Dudenkov, Branch Manager – Financial Education – FDIC. Presented Money program by FDIC to Russian kinder-8th grade school, introducing subjects like where money can be earned, how to save, how interest works, how to help at home to save on energy, groceries etc. Serving Walla Walla County 1 hours volunteered in 2020. Updated March 2,2021 Cindy Dickson, Compliance & CRA /HMDA Officer -MercyCorp Northwest, Walla Walla Microbusiness Program Oversight Committee Member. Mercy Corp Northwest offers programs and opportunity to individuals without ready access to resources, providing hard working individuals and families an opportunity to break intergenerational cycles of poverty. Serving Walla Walla County 6 hours donated in 2020. Brad Hansen, Trust Advisor – Yakima County Development Association-Board Member. Provide resources and funding for businesses looking to relocate to Yakima County or expand within the county. Provide resources and grant funding for certain infrastructure projects within Yakima County. Provide resources and funding for Business Plan Competition held within businesses in Yakima and surrounding counties. Serving Yakima County 20 hours volunteered in 2020. Becky Kettner, Investment Advisor Representative – YWCA of Walla Walla- Board of Director Member. Board Member at large. Will begin serving on various committees as needed in 2021 and assisting with fundraising efforts to support the work of the YWCA in our community. Serving Walla Walla County 9 hours volunteered in 2020. Brad Hansen, Trust Advisor – Union Gospel Mission of Yakima-Planned Giving Advisory Council. The Planned Giving Advisory Council is a committee that works to raise funds through lifetime and estate giving by providing information and programs to the public about YUGM and how individuals can support the good work being done through regular, one-time or gifts at their passing. Serving Yakima County 10 hours volunteered in 2020. Kain Evans, VP, IT Director, Information Technology-Board Vice President of Valley Residential Services, Tech Committee Chair. VRS provides supervised housing for developmentally disabled adults. Serving Walla Walla County 30 hours donated in 2020. John Cunnison, VP, Chief Investment Officer – Walla Walla Housing Authority Commissioner of the Board. The board and organization are set up to provide education to low- and moderate-income individuals, families, seniors, and Veterans on how to safely afford a house or rental as well as provide them with the house or rental. Serving Walla Walla 35 hours volunteered in 2020. Cathy Schaeffer, Family Advisor – Touchet School District Board of Directors, Board member. The Touchet School Board is the elected authority for local school regulations, policy, programs, and procedures within the framework of state law. As board members, we are responsible for translating the educational ideals, values, and goals of the community into concepts of policy. We ensure goals are set to provide long-range planning for local education; the district budget is balanced; interests are protected; and that buildings and grounds are maintained. Monthly meetings, open to the public, as well as work sessions, public hearings, and regular events are the activities that comprise the bulk of volunteer service in this position as a Director on the Touchet School Board. Touchet School District is located within Walla Walla County- 10 hours volunteered in 2020. (509) 525-2000 | (800) 234-7923 www.bakerboyer.com member fdic | equal housing lender Account access ATM Card Available for Checking and Savings accounts. For use at ATM machines only. Not used as a debit card. VISA Chip Debit Card Access your funds anytime, from anywhere. Baker Boyer Visa Debit Cards come with built-in chip technology for enhanced security, giving you greater fraud protection when you use your card at a chip- activated terminal. ATM Deposits Deposit cash and checks at any Baker Boyer ATM. Online Banking Access your accounts anytime with realtime updates and information. With Online Banking you can: check your balance, view account history, pay your bills, make transfers, and more. Online Bill Pay Pay your bills at your convenience or set up auto payments. Accessed through Online Banking. E-Statements View current and previous monthly account statements through Online Banking. Remote Deposit Scan checks remotely and transmit the check images to Baker Boyer for deposit. Available for Business accounts only. 24 Hour Phone Banking Access your accounts by phone 24 hours a day. Check your balance, transfer funds, verify a credit or debit, or make a Baker Boyer loan payment. Available in Spanish. Call 509-522-2262 or 800-583-2265. Text Banking Available with Online Banking, Text Banking is a quick option that gives you access to your account history and balance with any text enabled phone. Mobile Banking App Access Online Banking using your mobile device. Available for iPhone and Android. With the app you can: check your balance, view account history, pay your bills, make transfers and more. Mobile Deposit Deposit checks from your mobile device using our Mobile Banking App. Must be setup with both Online Banking and Mobile Banking. Direct Deposit Your regular deposits can be setup to automatically deposit into your account. i.e. payroll checks, retirement disbursements, social security checks, and others. Savings Overdraft Sweep* Protects your checking account from being overdrawn. Overdraft sweep will transfer available funds from your savings account into your checking account in the event your checking account does not have sufficient funds to cover a transaction. *Fees may apply. Your Baker Boyer accounts come with the following features for ease of access and to keep you in control of your finances. If you would like more information, our Personal Bankers are available to talk with you about your financial goals. (509) 525-2000 | (800) 234-7923 www.bakerboyer.com member fdic | equal housing lender ACCOUNT & OTHER SERVICE FEES Account Reconciling .................................................................... $50 per hour ACH Auto Transfer Fee................................................................ $5/transfer ATM PIN Reset .................................................................................. no charge ATM PIN Reset, Rush Request .................................................................... $60 ATM Transaction Fee ......................................... no Baker Boyer imposed fee ATM/Debit Card Replacement Request ................................................... $15 ATM/Debit Card Replacement Request, Rush ........................................ $60 Bill Pay (business & personal) ............................................................ no charge Bill Pay (additional features for small businesses): Employee Deposits....................................................................$9.95/mo Bond or Coupon Redemption ............................... $10 per envelope + postage Cashier’s Checks ............................................................................................ $5 Check Printing ......................................................................................... varies Collections, Incoming & Outgoing, Domestic ......................................... $20 Collections, Incoming & Outgoing, Foreign ............................................ $35 Copy of Check .................................................................................... no charge Counter Checks (three per sheet) .................................................................$3 Deposited Items Returned ............................................................................$6 Dormant Account Fee ................................................................. $5 per month Early Account Closing (within 60 days) ...................................................... $25 Fax, Incoming or Outgoing .................................... $3 first page, $1 thereafter Foreign Currency (Buy or Sell)................................................... $20** Foreign Draft Order ..................................................................................... $30 Garnishments/Levies ..............................................................................$100 Image Checks Returned with Statements ....................................... no charge Loose Coin Processing (Non-Customer).....................................15% of total Night Depository, Key Replacement......................................................... $30 Night Depository, Zipper Bag with Lock ................................................... $20 Night Depository, Zipper Bag without Lock ............................................. $10 NSF Item Paid/Returned ............................................................................ $30 Maximum Daily Fee for NSF/OD on Personal Accounts................... $120 Notary Service ...................................................................................no charge Overdraft Sweep Transfer from Deposit Acct (per day) .............................. $5 ACCOUNT & OTHER SERVICE FEES (continued) Personal Check Cashing, Non-Customer ................................................$25 Research ........................................................................................ $50 per hour Returned /Undeliverable Statement...........................................................$5 Statement Replacement ....................................................................... $5 each Any fees changed are effective 01/01/2021. Some fees may be subject to change without prior notice. Stop Payment / Alert Request ...................................................................... $30 VISA Debit Card Int’l Transaction ........................... 1% of converted amount Wire Transfers, Incoming ...........................................................................$10 Wire Transfers, Outgoing (Domestic) ......................................................$20 Wire Transfers, Outgoing (International) ................................................$70 OTHER ACCOUNT FEES FOR ANALYZED BUSINESS ACCOUNTS Box Currency/Coin Wrappers ......................................$2.50 per box Checks Paid ..................................................................................$0.12 Currency Purchased/Deposited .............................$0.05 (per $100) Deposited Items Returned ...............................................................$6 Deposits Posted ...........................................................................$0.15 Fax Notification .................................................................................$3 Monthly Maintenance Fee .............................................................$14 On-Us Items Deposited ..............................................................$0.08 Rolled Coin Purchased/Deposited ............................$0.06 (per roll) Special Statement Cutoff ..................................................................$2 Sweep Setup from Loan or Repurchase .........................................$10 Transit Items Deposited ..............................................................$0.08 SAFE DEPOSIT BOX RENTAL FEES Size listed indicates height and width. Length for all boxes is 18”. Fees are annual. 3” x 5” .............................................................................................................. $25 5” x 5” .............................................................................................................. $40 3” x 10.5” ........................................................................................................ $50 5.5” x 10.5” ..................................................................................................... $75 10” x 10” ....................................................................................................... $120 11” x 10.5” .................................................................................................... $120 Lost Key ......................................................................................................... $10 Drilling Fee ..................................................................................... $250 prepay Late Fee (over 60 days) .................................................................. $5 per month **Other fees may apply statement of fees 01/21 (509) 525-2000 | (800) 234-7923 www.bakerboyer.com member fdic | equal housing lender Personal Accounts Checking Accounts eSolutions Regular Merit (62+ years) Interest Opening Balance $100 $100 $100 $5,000 Service Charge No Monthly Service Charge After 3, 50¢ per check $6 monthly fee for paper statements* $12 monthly service charge, waived with minimum daily balance of $750 $5 monthly service charge, waived with minimum daily balance of $100 $12 monthly service charge, waived with minimum daily balance of $5,000 Other Account Fees No Baker Boyer imposed fee for debit card & ATM transactions. Interest N/A N/A N/A Interest is earned daily & paid monthly on collected balance, if greater than $5,000. Savings Accounts Regular Minor (under age 21) Merit (62+ years) Money Market Gold Opening Balance $100 $25 $100 $5,000 Service Charge $5 monthly service charge, waived with minimum daily balance of $400 $5 monthly service charge, waived with minimum daily balance of $25 $5 monthly service charge, waived with minimum daily balance of $100 $15 monthly service charge, waived with minimum daily balance of $5,000 Other Account Fees No Baker Boyer imposed fee for ATM transactions. Interest Interest is earned daily and paid quarterly on collected balance, if greater than $400. Interest is earned daily and paid quarterly on collected balance, if greater than $25. Interest is earned daily and paid quarterly on collected balance, if greater than $100. Interest is earned daily and paid monthly on col- lected balance. Rates are subject to change daily. Interest based on current ledger balance tiers.*** All fees are accurate as of 01/01/2021 and are subject to change without prior notice. Also, please reference Baker Boyer’s Statement of Fees. Updated 01/2021 *There is a $6 monthly service fee for eSolutions customers who choose paper statements. There is no charge for electronic statements which are available through Online Banking. ***Interest Balance Tiers $0 to $24,999.99 $25,000.00 to $49,999.99 $50,000.00 to $99,999.99 $100,000.00 to $249,999.99 $250,000.00 and over We reserve the right to not pay accrued interest if account is closed prior to payment date. (509) 525-2000 | (800) 234-7923 WWW.BAKERBOYER.COM MEMBER FDIC | EQUAL HOUSING LENDER home loans & services Whether you’re building a home, buying a home, or refinancing an existing mortgage, we’ve got a home loan product that can help you accomplish your goal. As an independent, community bank, our decisions and ser- vicing are done locally—which means that in addition to faster approval and processing you work directly with the people you need to find solutions. At Baker Boyer, we offer a variety of home loan services and the ability to modify products to suit your individual needs. Please talk to any bank representative about your plans so we can provide the information you need to make the choice that’s best for you. Home Loans Whether you’re buying your first home or building a new one, a house represents a huge investment. That’s why we take extra care to provide you with information and advice, as well as options that meet your financial goals. We’ll help you determine a price range that keeps your payments where you want them, and you can choose from various repayment terms and a fixed or variable interest rate. The fol- lowing page contains our 12-point checklist that can help you prepare for application requirements. FHA & VA Loans If you’re a veteran or a first time home buyer, our FHA or VA loan products may be right for you. These loans offer flexibility and low minimum payments. For those who might not qualify for conventional home loans, FHA and VA loans are great alternatives. Home Equity Loans If you have established equity in your home—and you probably have if you’ve owned your home three or more years—a home equity loan can help provide the cash you need for other purposes. Borrow up to 80% of the value of your home and use the funds for anything you wish. With various repayment terms and potential tax advantages, this loan could be just what you need. Home Equity Line of Credit Whether you have a specific need, project, or pur- chase, or you simply want the comfort of knowing you have access to extra cash, a home equity line of credit is a great choice. As a revolving line of credit, it’s there whenever you need it. Interest is only ac- crued on the amount of money you actually use, and that interest may even be tax deductible (consult your tax advisor). Approval time is fast—usually in one day—and access is easy, either by Home Equity check, telephone request, request by mail, or in person. You can also transfer funds using 24 Hour Phone Banking or Online Banking. Refinancing Although this loan is basically the same as a con- ventional home loan, it can be a valuable tool for accomplishing your goals. Whether you wish to take advantage of better interest rates, or you want to move your loan from another financial institution, we can help. With flexible terms and your choice of variable or fixed interest rate, we’ve got the options you need. Construction Loans When building a new home for your family, Baker Boyer is a great place to start. You can work directly with a loan officer who has experience in construc- tion and can assist you all the way—from the initial planning stage to completion of your project. Once complete, we will work on updating your file for the end and final amortizing loan. 7/16 (509) 525-2000 | (800) 234-7923 WWW.BAKERBOYER.COM MEMBER FDIC | EQUAL HOUSING LENDER home loans & services Modular Homes & Land Loans We can develop a loan package that covers everything from the purchase of land for your manu- factured home, to site preparations like car port, foundation, and digging a well. From the purchase of your home, to final setup, we’re with you all the way. Choose from various repayment terms. Most of our loans remain right here, which makes adjustments and servicing convenient for the life of your loan. Escrow Services Escrow accounts provide a safeguard in the admin- istration of private contracts between a buyer and seller. Whether you’re the buyer or seller, if you’re involved in a private sale contract, our Escrow staff can be a valuable partner. Our services are designed to help your transaction go smoothly and to provide complete, timely, and accurate records. Application Checklist To expedite processing, bring the following information with you when you apply for your home loan: Accepted purchase and sale agreement with any amendments or counteroffers signed by all parties. Names and addresses of all employers for the previ- ous two years. Annual gross salary, last year’s Form W-2, and most recent payroll voucher. If self-employed, copies of your federal income tax return for the previous two years. If employed by your own corporation, copies of its returns for the previous two years and a year-to-date profit-and-loss statement. If you choose to use your Social Security, disability, or pension income, bring a copy of a check or award cer- tificate from the issuing agency. Names and addresses of banks or credit unions in which you have accounts, including account numbers and balances. List of all stocks, bond, certificates of deposit, and all other securities showing current market value, recent monthly and/or quarterly statements, account numbers, etc. Life insurance: list issuing company’s name and policy number showing face amount and cash value less outstanding loans (if being used for down payment). Real estate owned: list address, current market value, original loan amount, and current balance owing for any real estate owned, with the account number for each property. Provide same information for previ- ously owned and paid off real estate, to verify net proceeds on sale of property. Complete list of all obligations including installment loans, student loans, department store balances, and credit card balances. If you have been a party of any legal proceeding, be prepared to provide a copy of any documents showing evidence of your rights to additional income or obliga- tion of additional payments resulting from the action. If you have had any credit concerns (e.g. bankruptcy, foreclosures, repossessions), be prepared to provide a copy of any documents showing the outcome of the proceedings. 7/16 (509) 525-2000 | (800) 234-7923 www.bakerboyer.com member fdic | equal housing lender business financing Lines of Credit Manage your cash flow more effectively with a line of credit that you can access instantly. Our rates are very attractive and, in many cases, your line is available to pay down and use again as you need to. Commercial Real Estate Construction Loans Our Business Advisors will work side by side to help you complete your construction with a loan program that meets your needs. We also offer term options with monthly payments that work for you. Let us help you get your next project off the ground. Commercial Real Estate Loans We’re experts in the commercial real estate area, and that means we’ll put the most prudent package together for you, taking into consideration your entire financial picture. Whether you’re purchasing, refinancing, or doing a land development project, our monthly payment plans are cash flow friendly. Agricultural Loans We provide farmers the flexibility to borrow what they need, when they need it. Payments are usually made annually, as opposed to monthly terms that fit best into a farmer’s financial picture. Term Loans: Equipment purchase and business expansion Finance that new truck, computer system, company vehicle, or business expansion and replenish your cash flow. Whether your expansion includes brick and mortar, new technology, or supporting new markets, bring your business plan to us and we’ll show you how we can help grow your legacy. PUBLIC DISCLOSURE August 5, 2019 COMMUNITY REINVESTMENT ACT PERFORMANCE EVALUATION Baker Boyer National Bank Charter Number 3956 7 West Main Street Walla Walla, WA 99362 Office of the Comptroller of the Currency 101 Stewart Street, Suite 1010 Seattle, WA 98101 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, and should not 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. Charter Number: 3956 i Table of Contents Overall CRA Rating……...………………………………………………………………..1 Description of Institution………….……………………………………………………… 2 Scope of the Evaluation……………………………………………………………………3 Discriminatory or Other Illegal Credit Practices Review………………………..………..4 State Rating…….………………………………………………………………………... 5 State of Washington………..…………………………………………………. 5 State of Oregon………………………………………………………………...20 Appendix A: Scope of Examination………….…………………………………………A-1 Appendix B: Summary of MMSA and State Ratings…………………………………...B-1 Appendix C: Definitions and Common Abbreviations………………………………….C-1 Appendix D: Tables of Performance Data………………………………………………D-1 Charter Number: 3956 1 Overall CRA Rating Institution’s CRA Rating: This institution is rated Satisfactory. The lending test is rated: Satisfactory. The community development test is rated: Satisfactory. The major factors that support this rating include: The Lending Test rating is based on a combination of the Washington (WA), and Oregon (OR) ratings. Performance in the Walla Walla assessment area (AA) in WA is weighted most heavily because it represents the bank’s primary trade area with 58 percent of branch locations, 78 percent of total deposit volume as of June 30, 2018, 37.9 percent of commercial loans originated or purchased, and 80.3 percent of mortgage loans originated during the evaluation period. The Community Development (CD) Test rating is based on a combination of the WA and OR ratings. Performance in the CD Test was weighted in the same manner as the Lending Test. Loan-to-Deposit Ratio Baker Boyer National Bank’s (BBNB) average Loan-to-Deposit (LTD) ratio is reasonable given its size, financial condition, and AA credit needs. We calculated the average LTD ratio over the prior 11 quarters since our prior June 2016 CRA Evaluation. BBNB’s average LTD ratio was 52.4 percent over this period. In addition, BBNB engaged in secondary market sales of residential loans. Over the loan review period, BBNB sold $55.6 million of residential loans to Federal Home Loan Mortgage Corporation. This represents 20.7 percent of total loans originated. We compared BBNB’s performance with five peer banks operating in the same general regions of the states of WA and OR. Each comparable bank operates in at least one of BBNB’s AAs. The comparable banks range from $313.8 million to $1.8 billion in total assets, with an average size of $689.5 million. Four of the banks were smaller than BBNB, the largest of which had $467.8 million in total assets. The average LTD ratio of the comparable banks was 67.6 percent. Based on these averages and the level of secondary market sales, BBNB’s average quarterly LTD ratio is reasonably close to that of similarly situated financial institutions and meets the standard for satisfactory performance. The table below illustrates BBNB’s average LTD ratio compared to similarly situated institutions. Baker Boyer National Bank Similar Institutions Average LTD Ratio 52.4 Average LTD Ratio 67.6 High LTD Ratio 55.3 High LTD Ratio 88.8 Low LTD Ratio 42.3 Low LTD Ratio 48.0 Lending in Assessment Area BBNB originated a substantial majority of its loans within the designated AAs. Based on our loan sample and the Home Mortgage Disclosure Act Loan Application Register (HMDA LAR), the bank Charter Number: 3956 4 evaluated as full- or limited-scope. Refer to the “Scope” section under each State Rating for details regarding how full-scope AAs were selected. Refer to appendix A, Scope of Examination, for a list of full- and limited-scope AAs. Ratings The bank’s overall rating is a blend of the state ratings, and where applicable, multistate ratings. The vast majority of the bank’s activity is centered around Walla Walla, WA. There has been growth in Umatilla, and Benton-Franklin; however, the majority of the bank’s lending activity remains centered around Walla Walla due to both the Yakima, and Benton-Franklin branches having been created solely to service the BBNB’s trust department. As such, the greatest weight is given to Walla Walla, but the other AAs will factor into the BBNB’s overall rating. The MMSA rating and state ratings are based on performance in all bank AAs. Refer to the “Scope” section under each state and MMSA Rating section for details regarding how the areas were weighted in arriving at the respective ratings. Discriminatory or Other Illegal Credit Practices Review Pursuant to 12 CFR 25.28(c) or 195.28(c), respectively, in determining a national bank’s or federal savings association’s (collectively, bank) CRA rating, the OCC considers evidence of discriminatory or other illegal credit practices in any geography by the bank, or in any AA by an affiliate whose loans have been considered as part of the bank’s lending performance. As part of this evaluation process, the OCC consults with other federal agencies with responsibility for compliance with the relevant laws and regulations, including the U.S. Department of Justice, the U.S. Department of Housing and Urban Development, and the Bureau of Consumer Financial Protection, as applicable. The OCC has not identified that this institution has engaged in discriminatory or other illegal credit practices that require consideration in this evaluation. The OCC will consider any information that this institution engaged in discriminatory or other illegal credit practices, identified by or provided to the OCC before the end of the institution’s next performance evaluation in that subsequent evaluation, even if the information concerns activities that occurred during the evaluation period addressed in this performance evaluation. Charter Number: 3956 5 State Rating State of Washington CRA rating for the State of Washington: Satisfactory The Lending Test is rated: Satisfactory The Community Development Test is rated: Satisfactory The major factors that support this rating include: The bank’s evaluation period lending activity in the Washington AAs reflects reasonable penetration among businesses of different sizes and among individuals of different income levels. The bank’s evaluation period lending activity reflects reasonable dispersion among geographies of different income levels in the Washington AAs. The bank has demonstrated adequate responsiveness to the community development (CD) needs of the Washington AAs. Description of Institution’s Operations in Washington Three of the bank’s 4 AAs are located in the state of Washington. The bank’s headquarters, and the majority of its operations are located within the Walla Walla AA, which consists of the entirety of Walla Walla County. Walla Walla County is one of 2 counties that comprise the Walla Walla, WA MSA. In addition to its headquarters, the bank maintains three branches in Walla Walla. The other AAs in Washington are Yakima County and the combined counties of Benton and Franklin. These counties comprise the entirety of their respective MSAs: Yakima, WA and Kennewick-Pasco-Richland, WA. The bank operates one branch in the city of Yakima, and one branch within the tri-cities area of WA. Walla Walla AA The Walla Walla AA, which is comprised of the entire county of Walla Walla, is located in southeast Washington. Walla Walla County is bordered to the north by Franklin County (along the Snake River), to the west by Benton County (along the Columbia River), and to the east by Columbia County. The county’s southern boundary forms part of the Washington-Oregon border across which is the Umatilla AA. Data compiled by Moody’s Analytics indicates that the Walla Walla AA has seen steady growth since 2018. Job growth and average hourly earnings have improved as the labor market has tightened. The housing market has experienced a relatively slow rise in prices. The unemployment rate was 4.5 percent in 2018, down from 5.8 percent in 2012. The unemployment rate peaked at 8.0 percent in 2010. Manufacturing and agricultural goods have driven economic performance in recent times. The long-term economic prospects are projected to be modest and below the U.S. national average. A key driver of this forecast is the decline in manufacturing, and low level of educational attainment. Charter Number: 3956 6 According to information from the Washington State Economic Security Department, the largest sectors of the economy are health care, retail trade, service industry, agriculture and government services. Over 90 percent of the workforce is employed in these sectors. Government, healthcare, and agriculture employed 20.4 percent, 16.0 percent, and 12.9 percent of total employment, respectively. Tourism and wine production are also important to the local economy. Over 100 wineries exist in the Walla Walla Valley. Total covered employment for 2017 was 27,314 in Walla Walla County with an average annual wage of $42,998. Average wages were up 4.2 percent from 2016. The local average annual wage is significantly below the state average of $62,077. The state continues to expect construction, manufacturing, retail trade, warehousing, healthcare and education to drive growth over the next five years. The 2017 population in Walla Walla was 60,338. The population grew at a relatively slow rate of 3.0 percent from 2010 to 2017, which is significantly lower than the statewide growth rate of 10.1 percent. The Federal Deposit Insurance Corporation (FDIC) Deposit Market Share Report as of June 30, 2018 shows that eight commercial banks operate in Walla Walla County. Two of these banks capture 81.98 percent of the local deposit market. Banner Bank has the highest market share of deposits at 38.8 percent, followed by BBNB, which has a market share of 28.98 percent. Banner Bank, like BBNB, is headquartered in Walla Walla. However, this institution has much broader operations with 168 offices and total assets of $7.5 billion. We completed a community contact interview with a representative of a local community action organization. The contact feels that the local economy is currently doing well financially. While the unemployment rate is fairly low, growth in wages has fallen behind growth in both property values, and rental expense increases This individual noted that affordable housing was the primary community development need. There is a significant disparity in the quantity of affordable housing, relative to the number of lower income residents. The contact also noted that there are a significant number of migratory farm workers who also need additional low-income housing putting further strain on the supply of low-income housing. The contact feels that while overall, local financial institutions are actively serving the community, there are growing opportunities related to assisting with affordable housing. The contact noted a high level of community involvement from local trust funds and local financial institutions, which have been key to allowing for some recent development projects to begin. Charter Number: 3956 9 Table A – Demographic Information of the Assessment Area Assessment Area: Benton-Franklin 2016 Demographic Characteristics # Low % of # Moderate % of # Middle % of # Upper % of # NA* % of # Geographies (Census Tracts) 50 6.0 26.0 32.0 32.0 4.0 Population by Geography 253,340 9.5 25.1 34.9 30.5 0.0 Housing Units by Geography 90,305 8.6 23.7 36.1 31.5 0.0 Owner-Occupied Units by Geography 57,531 4.3 20.1 36.2 39.3 0.0 Occupied Rental Units by Geography 25,929 17.2 29.9 36.1 16.8 0.0 Vacant Units by Geography 6,845 12.1 30.3 35.5 22.2 0.0 Businesses by Geography 13,002 6.5 25.9 32.5 34.5 0.6 Farms by Geography 975 2.4 27.0 54.3 16.0 0.4 Family Distribution by Income Level 60,076 21.9 17.5 20.0 40.7 0.0 Household Distribution by Income Level 83,460 23.1 16.8 18.3 41.8 0.0 Median Family Income MSA - 28420 Kennewick-Richland, WA MSA $63,929 Median Housing Value $161,247 Median Gross Rent $729 Families Below Poverty Level 11.2% Source: 2010 U.S. Census and 2016 D&B Data. Due to rounding, totals may not equal 100.0 (*) The NA category consists of geographies that have not been assigned an income classification. Table A – Demographic Information of the Assessment Area Assessment Area: Benton-Franklin 2017/2018 Demographic Characteristics # Low % of # Moderate % of # Middle % of # Upper % of # NA* % of # Geographies (Census Tracts) 50 2.0 30.0 32.0 32.0 4.0 Population by Geography 271,373 3.1 32.2 34.8 29.9 0.0 Housing Units by Geography 97,502 3.0 29.9 35.0 32.0 0.0 Owner-Occupied Units by Geography 62,103 1.2 25.1 35.0 38.7 0.0 Occupied Rental Units by Geography 30,052 7.0 39.6 34.5 18.9 0.0 Vacant Units by Geography 5,347 0.7 32.3 39.0 28.0 0.0 Businesses by Geography 13,782 1.3 29.3 37.6 31.4 0.5 Farms by Geography 1,029 0.9 25.9 54.7 18.2 0.3 Family Distribution by Income Level 65,837 21.6 17.6 19.5 41.3 0.0 Household Distribution by Income Level 92,155 23.9 16.1 19.0 41.0 0.0 Median Family Income MSA - 28420 Kennewick-Richland, WA MSA $66,500 Median Housing Value $179,030 Median Gross Rent $843 Families Below Poverty Level 12.0% Source: 2015 ACS Census and 2018 D&B Data. Due to rounding, totals may not equal 100.0 (*) The NA category consists of geographies that have not been assigned an income classification. Charter Number: 3956 10 Yakima Yakima AA is located in the central part of Washington state. The AA includes all parts of Yakima county, and the city of Yakima. The county is bordered on the east by Benton-Franklin, to the south by Klickitat, to the north by Kittitas, and to the west by Lewis county. Our review of Moody’s Analytics and the Washington State Economic Security Department show that Yakima has had sustained but slowing growth. Moody’s Analytics notes that the county is heavily dependent on agriculture, and the industry has seen a slowdown as a result of tariffs, and inclement weather respectively. Since 2010, the county has had an increase of 2.9 percent, from 244 thousand to 251 thousand. This modest growth is anticipated to continue, with a potential improvement should trade or the agricultural production improve over the next year. The major industries within Yakima are agriculture at 26.6 percent of the workforce, healthcare at 14.0 percent, and local government at 12.2 percent. The AA has a higher unemployment rate relative to the rest of the state at 6.8 percent; however, this has declined every year since 2011. The AA’s average wage is $38,374 for 2017, which is significantly under the state’s average salary of $62,073 for the same period. The AA also has a high level of poverty, with 18.1 percent of the population living in poverty within Yakima county. The FDIC Deposit Market Share Report as of June 30, 2018 shows that 15 commercial banks are located within Yakima. The three institutions with the largest deposit share hold 54.5 percent of the total deposits in the area. These institutions are Yakima Federal Savings and Loan, US Bank, and Banner Bank. BBNB holds less than 1 percent of the total deposits for this area. We completed a community contact interview with a representative of a local community action organization. The representative noted that the local economy is improving, with growth in tourism because of the growth in the winery industry in the area. The contact noted that low-income housing is the primary issue for the area. The area has a significant quantity of low-income individuals, and providing housing is a significant challenge. They discussed utilizing networks of local community organizations, with support from financial institutions, pooling resources in order to help facilitate the construction of additional low-income housing in the city. The contact also noted that crime is a significant issue for the area and hampers local development. The contact noted that they believe there are opportunities for financial institutions to further assist with local low-income housing plans and highlighted a recent veterans housing center which had been constructed as a result of partnerships with local groups. Charter Number: 3956 11 Washington – 2016 – Yakima MSA – Table A - Demographic Information of the Assessment Area Table A – Demographic Information of the Assessment Area Assessment Area: Yakima 2016 Demographic Characteristics # Low % of # Moderate % of # Middle % of # Upper % of # NA* % of # Geographies (Census Tracts) 45 4.4 33.3 35.6 26.7 0.0 Population by Geography 243,231 4.1 34.2 34.4 27.3 0.0 Housing Units by Geography 84,387 3.8 30.0 36.0 30.2 0.0 Owner-Occupied Units by Geography 50,710 1.3 25.2 35.1 38.5 0.0 Occupied Rental Units by Geography 28,365 8.5 38.4 36.1 17.0 0.0 Vacant Units by Geography 5,312 2.3 31.8 45.2 20.7 0.0 Businesses by Geography 11,008 8.3 29.0 33.1 29.6 0.0 Farms by Geography 1,200 2.3 16.7 57.8 23.3 0.0 Family Distribution by Income Level 58,284 22.4 16.9 19.9 40.9 0.0 Household Distribution by Income Level 79,075 23.3 15.7 19.5 41.5 0.0 Median Family Income MSA - 49420 Yakima, WA MSA $48,004 Median Housing Value $145,427 Median Gross Rent $654 Families Below Poverty Level 16.8% Source: 2010 U.S. Census and 2016 D&B Data. Due to rounding, totals may not equal 100.0 (*) The NA category consists of geographies that have not been assigned an income classification. Washington – 2017/2018 Yakima AA – Table A - Demographic Information of the Assessment Area Table A – Demographic Information of the Assessment Area Assessment Area: Yakima 2017/2018 Demographic Characteristics # Low % of # Moderate % of # Middle % of # Upper % of # NA* % of # Geographies (Census Tracts) 45 0.0 28.9 42.2 28.9 0.0 Population by Geography 247,408 0.0 28.5 42.6 28.9 0.0 Housing Units by Geography 86,208 0.0 23.9 42.3 33.8 0.0 Owner-Occupied Units by Geography 49,969 0.0 17.6 41.2 41.3 0.0 Occupied Rental Units by Geography 30,003 0.0 35.1 45.0 19.9 0.0 Vacant Units by Geography 6,236 0.0 20.0 38.7 41.3 0.0 Businesses by Geography 11,023 0.0 29.0 39.3 31.7 0.0 Farms by Geography 1,134 0.0 8.1 56.2 35.7 0.0 Family Distribution by Income Level 57,541 20.2 18.1 20.6 41.1 0.0 Household Distribution by Income Level 79,972 22.0 17.4 19.5 41.1 0.0 Median Family Income MSA - 49420 Yakima, WA MSA $49,907 Median Housing Value $154,614 Median Gross Rent $787 Families Below Poverty Level 16.5% Source: 2015 ACS Census and 2018 D&B Data. Due to rounding, totals may not equal 100.0 (*) The NA category consists of geographies that have not been assigned an income classification. Charter Number: 3956 14 BBNB’s business lending in the Walla Walla assessment area performed similarly to peer in low-income census tracts, and significantly below peer for moderate income tracts. In 2016, the bank originated no business loans to low-income tracts; however, there are no businesses based within low-income tracts within the AA. The bank originated 4.8 percent of their business loans in moderate-income tracts, which is significantly under peer bank data which is 18.2 percent of business loans. The census data for 2016 indicates that only 23.2 percent of businesses in the AA are located within moderate-income tracts. In 2017 and 2018, the bank originated 0.0 percent of business loans in low-income tracts within the Walla Walla AA. This is slightly below peer performance at 5.7 percent and is in-line with the 5.8 percent of businesses located within low-income tracts. The bank originated 4.8 percent of their loans within moderate-income tracts, which compares poorly to peer bank data which indicates that peer institutions originated 17.4 percent. It also compares poorly to the overall distribution of businesses, as only 16.3 percent of businesses are located in moderate-income tracts. The geographic distribution of commercial lending in Benton-Franklin had significantly above peer performance in moderate income areas, and in-line with peer data for low income areas. In 2016, BBNB only originated 7 commercial loans within the Benton-Franklin AA. This is insufficient to evaluate the geographic component of commercial lending in the 2016 period. In 2017/2018, BBNB originated no commercial loans in low-income census tracts. This is comparable to peer bank data, as HMDA data indicates only 1.2 percent of business loans were originated in low-income census tracts, and 1.3 percent of AA businesses were located in low-income census tracts. BBNB originated 50.0 percent of commercial loans in moderate-income tracts. This is significantly above peer data, which indicated that 29.0 percent of loans were originated in moderate-income census tracts. It is also below aggregate data for the AA, as 29.3 percent of Walla Walla businesses are located in moderate-income tracts. BBNB originated 7 business loans in the Yakima AA in 2016, and originated 13 business loans in 2017 and 2018. This is an insufficient number of loans to evaluate for either time period. As such, we will minimize the weight of BBNB’s lending in Yakima for our geographic evaluation of commercial originations. Distribution of Loans by Income Level of the Borrower The bank exhibits an excellent distribution of loans to individuals of different income levels and businesses and farms of different sizes, given the product lines offered by the bank. The tables in this section reflect BBNB’s performance against demographic data. For small business lending, the tables lead with the demographic comparator ratios, followed by BBNB’s lending performance by both number and dollar volume. We derived bank data from representative commercial loan samples, with each category shown as a percentage of total reviewed loans. For residential mortgages, the tables compare the bank’s reported HMDA data to income demographics in the AA. BBNB’s lending to businesses of different sizes in both the Walla Walla AA and the Benton-Franklin AA is consistent with the aggregate lending of the AA. Yakima had insufficient loans made in the AA to perform a meaningful analysis. Refer to Table R for further details. Home Mortgage Loans Refer to Table P in the state of Washington section of appendix D for the facts and data used to evaluate the borrower distribution of the bank’s home mortgage loan originations and purchases. Charter Number: 3956 15 The distribution of home mortgage loans to low- and moderate-income (LMI) families in the Walla Walla AA is reasonable. The lack of affordable housing reduces opportunities for mortgage lending to LMI borrowers in the AA. This is demonstrated by the considerable lag between demographic data and aggregate lending in the AA. BBNB originated 2.5 percent of mortgage loans to low-income families in 2016. Aggregate HMDA data indicates that 3.1 percent of home mortgage loans within the AA were originated to low-income families in 2016. Census data indicates 21.5 percent of AA families are low- income. The bank originated 11.1 percent of home mortgage loans to moderate-income families in 2016. Aggregate HMDA data indicates that 11.6 percent of home mortgage loans within the AA were originated to moderate-income families in 2016. Census data indicates 18.6 percent of AA families are moderate-income. In 2017-2018, BBNB originated 5.6 percent of mortgage loans to low-income families within the AA. Aggregate HMDA data indicates that 5.1 percent of home mortgage loans within the AA were originated to low-income families in 2017-2018. Census data indicates 22.1 percent of AA families are low-income. The bank originated 7.1 percent of home mortgage loans to moderate-income families in 2017-2018. Aggregate HMDA data indicates that 12.1 percent of home mortgage loans within the AA were originated to moderate-income families. Census data indicates 15.1 percent of AA families are moderate-income. The distribution of home mortgage loans in the Benton-Franklin AA is reasonable in relation to aggregate lending data for low income borrowers. BBNB’s lending to moderate income borrowers compares poorly to both the aggregate data as well as the percentage of moderate-income families in the AA, however, greater weight is given to the Walla Walla AA lending performance because of BBNB’s minimal amount of banking activity in the Benton-Franklin AA both in deposit taking as well as home loan lending. The lack of affordable housing reduces opportunities for mortgage lending to low income borrowers in the AA. This is demonstrated by the considerable lag between demographic data and aggregate lending in the AA. BBNB did not originate any mortgage loans to low-income families in 2017/2018. Aggregate HMDA data indicates that only 4.4 percent of home mortgage loans within the AA were originated to low-income families in 2016. Census data indicates 21.6 percent of AA families are low-income. The bank originated 10.0 percent of home mortgage loans to moderate-income families in 2017/2018. Aggregate HMDA data indicates that 16.6 percent of home mortgage loans within the AA were originated to moderate-income families in 2017/2018. Census data indicates 17.7 percent of AA families are moderate-income. BBNB originated 2 home mortgage loans in 2016, and 7 home mortgage loans 2017 and 2018. This is insufficient to conduct a meaningful analysis for the AA. Small Loans to Businesses Refer to Table R in the state of Washington section of appendix D for the facts and data used to evaluate the borrower distribution of the bank’s originations and purchases of small loans to businesses. The distribution of business loans to businesses with gross annual revenues of $1 million or less in the Walla Walla AA reflects reasonable penetration among small businesses of different sizes. In 2016, BBNB originated 76.2 percent of sampled business loans to small businesses with gross annual revenues of $1 million or less in Walla Walla. This performance significantly exceeds the peer data which Charter Number: 3956 16 indicates 41.2 percent of loans within the AA were to small businesses. Census data indicates that 84.1 percent of businesses have gross annual revenues of $1 million or less. In 2017-2018, BBNB originated 85.7 percent of its business loans to small businesses with gross annual revenues of $1 million or less in Walla Walla. This ratio of lending to small businesses continues to exceed the aggregate CRA data which indicates that 52.0 percent of loans within the AA were to small business. Census data indicates that 83.8 percent of businesses have gross annual revenues of $1 million or less. The distribution of business loans to businesses with gross annual revenues of $1 million or less in the Benton-Franklin AA reflects reasonable penetration among small businesses of different sizes. In 2016, BBNB originated 71.4 percent of sampled business loans to small businesses with gross annual revenues of $1 million or less. This performance significantly exceeds the aggregate CRA data which indicates 38.4 percent of loans within the AA were to small businesses. Census data indicates that 82.7 percent of businesses in Benton-Franklin have gross annual revenues of $1 million or less. In 2017-2018, BBNB originated 75.0 percent of its business loans to small businesses in Benton- Franklin with gross annual revenues of $1 million or less. This ratio of lending to small businesses continues to significantly exceed the aggregate CRA data which indicates that 50.6 percent of loans within the AA were to small business. Census data indicates that 82.7 percent of businesses have gross annual revenues of $1 million or less. In Yakima, BBNB originated 7 commercial loans in 2016, and 13 commercial loans in the 2017 and 2018 period. This is an insufficient quantity of loans to perform a meaningful analysis. Responses to Complaints There were no complaints with relation to the bank’s CRA performance within the state of Washington. COMMUNITY DEVELOPMENT TEST The bank’s performance under the Community Development Test in the state of Washington is rated Satisfactory. Based on full-scope reviews, the bank exhibits adequate responsiveness to community development needs in the state through community development loans, qualified investments, and community development services, as appropriate, considering the bank’s capacity and the need and availability of such opportunities for community development in the bank’s assessment areas. Charter Number: 3956 19 The bank exhibited excellent responsiveness to community development needs in the Yakima AA through community development services given the level of services which exist within the AA. During the evaluation period, bank employees dedicated 168 service hours to 3 qualified organizations operating in the Yakima AA. These organizations help with domestic violence victims, provide scholarships to underprivileged students, and support economic development in the AA. Charter Number: 3956 20 State of Oregon CRA rating for the State of Oregon: Satisfactory The Lending Test is rated: Satisfactory The Community Development Test is rated: Satisfactory The major factors that support this rating include: The bank’s evaluation period lending activity in the Umatilla AA indicates a more than reasonable penetration through a variety of businesses of different sizes, and among individuals of multiple income levels. The bank has demonstrated a more than adequate overall responsiveness to the community development (CD) needs of its AA in Oregon. Description of Institution’s Operations in Oregon The bank maintains one branch in the city of Milton-Freewater, OR. Management designated the county of Umatilla as its sole AA in the state of Oregon. Umatilla AA The Umatilla AA comprises the entire county of Umatilla in Oregon. The county is located in the Northeastern region of Oregon at the Washington border, at the confluence of the Umatilla and Columbia Rivers. Umatilla County comprises the majority of the Pendleton-Hermiston, OR Micropolitan Statistical Area. Umatilla County is 3,231 square miles in size. It borders Walla Walla County, WA and Benton County, WA to the north, both of which are part of the bank’s AAs. Columbia County, WA is to the Northeast of Umatilla County. Umatilla County is also bordered by the Oregon counties of Wallowa, Union, Grant, and Morrow. The US Census Bureau estimates the County population at 76,738 as of July 1, 2018. The estimated growth rate from April 1, 2010 to July 1, 2018, was approximately 0.9 percent, much lower than the overall Oregon growth rate of 9.5 percent. The largest city in Umatilla County is Hermiston, which had a 2018 population of 17,671 per estimates from the US Census bureau. Pendleton, the county seat, is the second largest city with a population of 16,781. Milton-Freewater, the city in which BBNB’s branch resides, had a population of 7,053. The median household income from 2011-2015 was $48,101. Umatilla County’s top industries are retail industries, manufacturing, and healthcare. Ten commercial banks operate in the AA per the FDIC Deposit Market Share Report dated June 30, 2018. The largest two deposit holders are Banner Bank and U.S. Bank which hold 36.9 percent and 18.9 percent of total deposits in the area, respectively. BBNB ranks six out of ten, with a market share of 5.3 percent. We tried to contact multiple community contacts within Milton-Freewater; however, none of the contacts we tried to contact would agree to an interview or respond to our requests. We considered looking for a community contact located in Pendleton, or other parts of the county; however, this would not be indicative of performance for the institution, as the entirety of their operations are located in the town of Milton-Freewater, which is a town just across the border from Walla Walla. Charter Number: 3956 21 Table A – Demographic Information of the Assessment Area Assessment Area: Umatilla 2016 Demographic Characteristics # Low % of # Moderate % of # Middle % of # Upper % of # NA* % of # Geographies (Census Tracts) 15 0.0 0.0 93.3 6.7 0.0 Population by Geography 75,889 0.0 0.0 91.8 8.2 0.0 Housing Units by Geography 29,586 0.0 0.0 93.7 6.3 0.0 Owner-Occupied Units by Geography 16,991 0.0 0.0 93.2 6.8 0.0 Occupied Rental Units by Geography 9,554 0.0 0.0 94.6 5.4 0.0 Vacant Units by Geography 3,041 0.0 0.0 94.4 5.6 0.0 Businesses by Geography 4,067 0.0 0.0 93.7 6.3 0.0 Farms by Geography 497 0.0 0.0 84.7 15.3 0.0 Family Distribution by Income Level 18,716 18.0 16.7 22.2 43.0 0.0 Household Distribution by Income Level 26,545 20.2 14.7 18.5 46.7 0.0 Median Family Income Non-MSAs - OR $50,374 Median Housing Value $138,698 Median Gross Rent $615 Families Below Poverty Level 11.0% Source: 2010 U.S. Census and 2016 D&B Data. Due to rounding, totals may not equal 100.0 (*) The NA category consists of geographies that have not been assigned an income classification. Table A – Demographic Information of the Assessment Area Assessment Area: Umatilla 2017/2018 Demographic Characteristics # Low % of # Moderate % of # Middle % of # Upper % of # NA* % of # Geographies (Census Tracts) 15 0.0 0.0 73.3 26.7 0.0 Population by Geography 76,738 0.0 0.0 71.5 28.5 0.0 Housing Units by Geography 29,741 0.0 0.0 75.6 24.4 0.0 Owner-Occupied Units by Geography 16,791 0.0 0.0 73.4 26.6 0.0 Occupied Rental Units by Geography 10,003 0.0 0.0 78.5 21.5 0.0 Vacant Units by Geography 2,947 0.0 0.0 78.1 21.9 0.0 Businesses by Geography 4,081 0.0 0.0 78.9 21.1 0.0 Farms by Geography 479 0.0 0.0 58.5 41.5 0.0 Family Distribution by Income Level 18,288 19.1 15.5 19.6 45.8 0.0 Household Distribution by Income Level 26,794 20.9 14.6 16.8 47.6 0.0 Median Family Income Non-MSAs - OR $51,555 Median Housing Value $144,672 Median Gross Rent $694 Families Below Poverty Level 13.9% Source: 2015 ACS Census and 2018 D&B Data. Due to rounding, totals may not equal 100.0 (*) The NA category consists of geographies that have not been assigned an income classification. Charter Number: 3956 24 In 2017-2018, BBNB originated no mortgage loans to low-income families within the Umatilla AA. Aggregate HMDA data indicates that 3.1 percent of home mortgage loans within the AA were originated to low-income families in 2017-2018. Census data indicates 19.1 percent of AA families are low-income. The bank originated 5.6 percent of home mortgage loans to moderate-income families in 2017-2018. Aggregate HMDA data indicates that 14.1 percent of home mortgage loans within the AA were originated to moderate-income families. Census data indicates 15.5 percent of AA families are moderate-income. The lower level of lending to low-income families is due to the lack of affordable housing located within the AA. For moderate-income families, the level of lending is under peer banks performance; however, there is a notable increase in the level of lending from 2016 to 2017-2018. The bank is currently taking steps to expand their lending presence within Umatilla and plans to add a local loan officer to encourage loan generation within the area. Small Loans to Businesses Refer to Table R in the state of Oregon section of appendix D for the facts and data used to evaluate the borrower distribution of the bank’s originations and purchases of small loans to businesses. The distribution of business loans to businesses with gross annual revenues of $1 million or less in the Umatilla AA reflects excellent penetration among small businesses of different sizes. In 2016, BBNB originated 100 percent of sampled business loans to small businesses with gross annual revenues of $1 million or less. This performance significantly exceeds the aggregate CRA data which indicates 45.2 percent of loans within the AA were to small businesses. Census data indicates that 81.1 percent of businesses have gross annual revenues of $1 million or less. In 2017-2018, BBNB originated 77.8 percent of its business loans to small businesses with gross annual revenues of $1 million or less. This ratio of lending to small businesses continues to exceed the aggregate CRA data which indicates that 53.5 percent of loans within the AA were to small business. Census data indicates that 81.0 percent of businesses have gross annual revenues of $1 million or less. Responses to Complaints There were no complaints with relation to the bank’s CRA performance within the state of Oregon. COMMUNITY DEVELOPMENT TEST The bank’s performance under the Community Development Test in the state of Oregon is rated Satisfactory. Based on a full-scope review, the bank exhibits adequate responsiveness to community development needs in the state through community development loans, qualified investments, and community development services, as appropriate, considering the bank’s capacity and the need and availability of such opportunities for community development in the bank’s assessment area. Charter Number: 3956 25 Number and Amount of Community Development Loans Community Development Loans Assessment Area Total # % of Total # $(000’s) % of Total $ Umatilla AA 2 100% $510 100% The Community Development Loans Table, shown above, set forth the information and data used to evaluate the bank’s level of community development lending. These tables include all CD loans, including multifamily loans that also qualify as CD loans. The bank exhibited adequate responsiveness to community development needs in the Umatilla AA through community development lending specifically to the city of Milton-Freewater relative to the level of opportunities available within the AA. During the evaluation period, the bank originated two community development loan totaling $510 thousand that benefited the Umatilla AA. The largest of these loans to the city of Milton-Freewater provided funds to the city to continue critical operations of the city’s power and water treatment facilities. Number and Amount of Qualified Investments Qualified Investments Assessment Area Prior Period* Current Period Total Unfunded Commitments** # $(000’s) # $(000’s) # % of Total # $(000’s) % of Total $ # $(000’s) Umatilla AA 2 $575 2 $2 4 100% $577 100% 0 $0 * Prior Period Investments’ means investments made in a previous evaluation period that are outstanding as of the examination date. ** Unfunded Commitments' means legally binding investment commitments that are tracked and recorded by the institution's financial reporting system. The Qualified Investments Table, shown above, sets forth the information and data used to evaluate the bank’s level of qualified community development investments. This table includes all community development investments, including prior period investments that remain outstanding as of the examination date. The bank exhibited adequate responsiveness to community development needs in the Umatilla AA through qualified investments relative to opportunities available within the AA. During the evaluation period, the bank donated $2 thousand to two qualified organizations operating in the Umatilla AA. These organizations provided LMI individuals housing opportunities as well as providing food. The bank also made investments into the Umatilla AA via the purchasing of general obligation municipal bonds. These bonds provide infrastructure support to schools where over fifty percent of students received free or reduced fare lunches. Charter Number: 3956 26 Extent to Which the Bank Provides Community Development Services The bank exhibited excellent responsiveness to community development needs in the Umatilla AA through community development services. During the evaluation period, bank employees dedicated 37 service hours to two qualified organizations operating in the Umatilla AA. Given the small size of the branch located in this AA, and limited staffing at the branch, this is a significant quantity. These organizations include a housing rehabilitation program to assist LMI individuals maintain home ownership as well as the local school district. Charter Number: 3956 Appendix C-1 Appendix C: Definitions and Common Abbreviations The following terms and abbreviations are used in this performance evaluation, including the CRA tables. The definitions are intended to provide the reader with a general understanding of the terms, not a strict legal definition. Affiliate: Any company that controls, is controlled by, or is under common control with another company. A company is under common control with another company if the same company directly or indirectly controls both companies. For example, a bank subsidiary is controlled by the bank and is, therefore, an affiliate. Aggregate Lending (Aggt.): The number of loans originated and purchased by all reporting lenders (HMDA or CRA) in specified income categories as a percentage of the aggregate number of loans originated and purchased by all reporting lenders in the state/assessment area. Census Tract (CT): A small, relatively permanent statistical subdivision of a county delineated by a local committee of census data users for the purpose of presenting data. Census tracts nest within counties, and their boundaries normally follow visible features, but may follow legal geography boundaries and other non-visible features in some instances, Census tracts ideally contain about 4,000 people and 1,600 housing units. Combined Statistical Area (CSA): A geographic entity consisting of two or more adjacent Core Based Statistical Areas with employment interchange measures of at least 15. An employment interchange measure is a measure of ties between two adjacent entities. The employment interchange measure is the sum of the percentage of workers living in the smaller entity who work in the larger entity and the percentage of employment in the smaller entity that is accounted for by workers who reside in the larger entity. Community Development (CD): 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 Small Business Administration Development Company or Small Business Investment Company programs size eligibility standards or have gross annual revenues of $1 million or less; or activities that revitalize or stabilize low- or moderate-income geographies, distressed or underserved nonmetropolitan middle- income geographies, or designated disaster areas. Community Reinvestment Act (CRA): The statute that requires the OCC to evaluate a bank’s record of meeting the credit needs of its entire community, including LMI areas, consistent with the safe and sound operation of the bank, and to take this record into account when evaluating certain corporate applications filed by the bank. 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, other secured consumer loans, and other unsecured consumer loans. Charter Number: 3956 Appendix C-2 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 (e.g., geographic distribution, borrower distribution, and total number and dollar amount of investments), and qualitative factors (e.g., innovativeness, complexity, and responsiveness). Geography: A census tract delineated by the United States Bureau of the Census in the most recent decennial census. Home Mortgage Disclosure Act (HMDA): The statute that requires certain mortgage lenders that conduct business or have banking offices in a metropolitan statistical area to file annual summary reports of their mortgage lending activity. The reports include such data as the race, gender, and the income of applicants, the amount of loan requested, the disposition of the application (e.g., approved, denied, and withdrawn), the lien status of the collateral, any requests for preapproval, and loans for manufactured housing. Home Mortgage Loans: A closed-end mortgage loan or an open-end line of credit as these terms are defined under 12 CFR 1003.2, and that is not an excluded transaction under 12 CFR 1003.3(c)(1) through (c)(10) and (c)(13). 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 (e.g., geographic distribution, borrower distribution, total number and dollar amount of investments, and branch distribution). Low-Income Individual: Individual income that is less than 50 percent of the area median income. Low Income Geography: A census tract with a median family income that is less than 50 percent. 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 state/assessment area. Median Family Income (MFI): The median income determined by the U.S. Census Bureau every five years and used to determine the income level category of geographies. The median is the point at which half of the families have income above, and half below, a range of incomes. Also, the median income determined by the Federal Financial Institutions Examination Council (FFIEC) annually that is used to Charter Number: 3956 Appendix C-3 determine the income level category of individuals. For any given area, the median is the point at which half of the families have income above, and half below, a range of incomes. Metropolitan Division: As defined by Office of Management and Budget, a county or group of counties within a Core Based Statistical Area that contains an urbanized population of at least 2.5 million. A Metropolitan Division consists of one or more main/secondary counties that represent an employment center or centers, plus adjacent counties associated with the main/secondary county or counties through commuting ties. Metropolitan Statistical Area: An area, defined by the Office of Management and Budget, as a core based statistical area associated with at least one urbanized area that has a population of at least 50,000. The Metropolitan Statistical Area comprises the central county or counties containing the core, plus adjacent outlying counties having a high degree of social and economic integration with the central county or counties as measured through commuting. 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. 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. Rating Area: A rated area is a state or multi-state metropolitan statistical 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 statistical area, the institution will receive a rating for the multi-state metropolitan statistical 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) instructions. These loans have original amounts of $1 million or less and typically are either secured by nonfarm or nonresidential real estate or are classified as commercial and industrial loans. 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 Charter Number: 3956 Appendix D-2 to $500,000) to farms originated and purchased by the bank in low-, moderate-, middle-, and upper-income geographies compared to the percentage distribution of farms (regardless of revenue size) throughout those geographies. The table also presents aggregate peer data for the years the data is available. Because aggregate small farm data are not available for geographic areas smaller than counties, it may be necessary to use geographic areas larger than the bank’s assessment area. Table T. Assessment Area Distribution of Loans to Farms by Gross Annual Revenues - Compares the percentage distribution of the number of small loans (loans less than or equal to $500 thousand) originated and purchased by the bank to farms with revenues of $1 million or less to: 1) the percentage distribution of farms with revenues of greater than $1 million; and, 2) the percentage distribution of farms for which revenues are not available. The table also presents aggregate peer small farm data for the years the data is available. Table U. Assessment Area Distribution of Consumer Loans by Income Category of the Geography - Compares the percentage distribution of the number of loans originated and purchased by the bank in low-, moderate-, middle-, and upper-income geographies to the percentage distribution of households in those geographies. Table V. Assessment Area Distribution of Consumer Loans by Income Category of the Borrower - Compares the percentage distribution of the number of loans originated and purchased by the bank to low-, moderate-, middle-, and upper-income borrowers to the percentage distribution of households by income level in each MMSA/assessment area. Charter Number: 3956 Appendix D-3 Oregon - 2016 - Table O : Assessment Area Distribution of Home Mortgage Loans by Income Category of the Geography Table O : Assessment Area Distribution of Home Mortgage Loans by Income Category of the Geography 2016 Total Home Mortgage Loans Low-Income Tracts Moderate-Income Tracts Middle-Income Tracts Upper-Income Tracts Not Available-Income Tracts Assessment Area: # $ % of Total Overall Market % of Owner- Occupied Housing Units % Bank Loans Aggregate % of Owner- Occupied Housing Units % Bank Loans Aggregate % of Owner- Occupied Housing Units % Bank Loans Aggregate % of Owner- Occupied Housing Units % Bank Loans Aggregate % of Owner- Occupied Housing Units % Bank Loans Aggregate Umatilla 2016 9 1,687 100.0 1,867 0.0 0.0 0.0 0.0 0.0 0.0 93.2 100.0 94.3 6.8 0.0 5.7 0.0 0.0 0.0 Total 14 1,687 100.0 1,867 0.0 0.0 0.0 0.0 0.0 0.0 93.2 100.0 94.3 6.8 0.0 5.7 0.0 0.0 0.0 Source: 2010 U.S Census; 07/01/2016 - 12/31/2016 Bank Data, 2016 HMDA Aggregate Data, "--" data not available. Due to rounding, totals may not equal 100.0 Oregon – 2017/2018 - Table O : Assessment Area Distribution of Home Mortgage Loans by Income Category of the Geography Table O : Assessment Area Distribution of Home Mortgage Loans by Income Category of the Geography 2017-18 Total Home Mortgage Loans Low-Income Tracts Moderate-Income Tracts Middle-Income Tracts Upper-Income Tracts Not Available-Income Tracts Assessment Area: # $ % of Total Overall Market % of Owner- Occupied Housing Units % Bank Loans Aggregate % of Owner- Occupied Housing Units % Bank Loans Aggregate % of Owner- Occupied Housing Units % Bank Loans Aggregate % of Owner- Occupied Housing Units % Bank Loans Aggregate % of Owner- Occupied Housing Units % Bank Loans Aggregate Umatilla 2017/2018 18 3,146 100.0 1,718 0.0 0.0 0.0 0.0 0.0 0.0 73.4 72.2 77.2 26.6 27.8 22.8 0.0 0.0 0.0 Total 18 3,146 100.0 1,718 0.0 0.0 0.0 0.0 0.0 0.0 73.4 72.2 77.2 26.6 27.8 22.8 0.0 0.0 0.0 Source: 2015 ACS Census; 01/01/2017 - 12/31/2018 Bank Data, 2017 HMDA Aggregate Data, "--" data not available. Due to rounding, totals may not equal 100.0 Charter Number: 3956 Appendix D-4 Washington – 2016 - Table O : Assessment Area Distribution of Home Mortgage Loans by Income Category of the Geography Table O : Assessment Area Distribution of Home Mortgage Loans by Income Category of the Geography 2016 Total Home Mortgage Loans Low-Income Tracts Moderate-Income Tracts Middle-Income Tracts Upper-Income Tracts Not Available-Income Tracts Assessment Area: # $ % of Total Overall Market % of Owner- Occupied Housing Units % Bank Loans Aggregate % of Owner- Occupied Housing Units % Bank Loans Aggregate % of Owner- Occupied Housing Units % Bank Loans Aggregate % of Owner- Occupied Housing Units % Bank Loans Aggregate % of Owner- Occupied Housing Units % Bank Loans Aggregate Benton- Franklin 2016 12 2,355 12.6 10,557 4.3 0.0 2.8 20.1 25.0 15.1 36.2 16.7 37.0 39.3 58.3 45.1 0.0 0.0 0.0 Walla Walla 2016 81 17,448 85.3 1,943 0.0 0.0 0.0 12.1 8.6 11.1 57.9 46.9 59.2 30.0 44.4 29.6 0.0 0.0 0.1 Yakima 2016 2 317 2.1 5,686 1.3 0.0 1.3 25.2 0.0 16.4 35.1 0.0 32.4 38.5 100.0 49.9 0.0 0.0 0.0 Total 95 20,120 100.0 18,186 2.6 0.0 2.0 21.4 10.5 15.1 38.1 42.1 37.9 38.0 47.4 45.0 0.0 0.0 0.0 Source: 2010 U.S Census; 07/01/2016 - 12/31/2016 Bank Data, 2016 HMDA Aggregate Data, "--" data not available. Due to rounding, totals may not equal 100.0 Filter: 07172019BBNB2016 HMDA Submission: Action Date is between 7/1/2016 12:00:00 AM and 9/30/2016 12:00:00 AM or Action Date is between 10/1/2016 12:00:00 AM and 12/31/2016 12:00:00 AM. Washington – 2017/2018 - Table O : Assessment Area Distribution of Home Mortgage Loans by Income Category of the Geography Table O : Assessment Area Distribution of Home Mortgage Loans by Income Category of the Geography 2017-18 Total Home Mortgage Loans Low-Income Tracts Moderate-Income Tracts Middle-Income Tracts Upper-Income Tracts Not Available-Income Tracts Assessment Area: # $ % of Total Overall Market % of Owner- Occupied Housing Units % Bank Loans Aggregate % of Owner- Occupied Housing Units % Bank Loans Aggregate % of Owner- Occupied Housing Units % Bank Loans Aggregate % of Owner- Occupied Housing Units % Bank Loans Aggregate % of Owner- Occupied Housing Units % Bank Loans Aggregate Benton-Franklin 2017-18 20 6,429 8.9 9,757 1.3 0.0 1.1 25.1 10.0 21.0 35.0 20.0 34.8 38.7 70.0 43.1 0.0 0.0 0.1 Walla Walla 2017-18 198 44,346 88.0 1,782 3.7 2.5 3.0 9.0 11.1 8.7 66.2 56.1 66.7 21.0 30.3 21.7 0.0 0.0 0.0 Yakima 2017-18 7 1,195 3.1 5,070 0.0 0.0 0.0 17.6 14.3 13.1 41.2 28.6 39.1 41.3 57.1 47.8 0.0 0.0 0.0 Total 225 51,970 100.0 16,609 1.0 2.2 1.0 20.3 11.1 17.2 40.9 52.0 39.5 37.8 34.7 42.2 0.0 0.0 0.0 Source: 2015 ACS Census; 01/01/2017 - 12/31/2018 Bank Data, 2017 HMDA Aggregate Data, "--" data not available. Due to rounding, totals may not equal 100.0 Charter Number: 3956 Appendix D-7 Oregon – 2016 – Table Q – Assessment Area Distribution of Loans to Small Businesses by Income Category of the Geography Table Q: Assessment Area Distribution of Loans to Small Businesses by Income Category of the Geography 2016 Total Loans to Small Businesses Low-Income Tracts Moderate-Income Tracts Middle-Income Tracts Upper-Income Tracts Not Available-Income Tracts Assessment Area: # $ (000) % of Total Overall Market % Businesses % Bank Loans Aggregate % Businesses % Bank Loans Aggregate % Businesses % Bank Loans Aggregate % Businesses % Bank Loans Aggregate % Businesses % Bank Loans Aggregate Umatilla 2016 4 670 100.0 1,264 0.0 0.0 0.0 0.0 0.0 0.0 93.7 100.0 93.4 6.3 0.0 6.6 0.0 0.0 0.0 Total 4 670 100.0 1,264 0.0 0.0 0.0 0.0 0.0 0.0 93.7 100.0 93.4 6.3 0.0 6.6 0.0 0.0 0.0 Source: 2016 D&B Data; 07/01/2016 - 12/31/2016 Bank Data; 2016 CRA Aggregate Data, "--" data not available. Due to rounding, totals may not equal 100.0; Sample size 100% Oregon – 2017/2018 – Table Q – Assessment Area Distribution of Loans to Small Businesses by Income Category of the Geography Table Q: Assessment Area Distribution of Loans to Small Businesses by Income Category of the Geography 2017-18 Total Loans to Small Businesses Low-Income Tracts Moderate-Income Tracts Middle-Income Tracts Upper-Income Tracts Not Available-Income Tracts Assessment Area: # $ (000) % of Total Overall Market % Businesses % Bank Loans Aggregate % Businesses % Bank Loans Aggregate % Businesses % Bank Loans Aggregate % Businesses % Bank Loans Aggregate % Businesses % Bank Loans Aggregate Umatilla 2017- 18 18 2,917 100.0 961 0.0 0.0 0.0 0.0 0.0 0.0 78.9 66.7 76.4 21.1 33.3 23.6 0.0 0.0 0.0 Total 18 2,917 100.0 961 0.0 0.0 0.0 0.0 0.0 0.0 78.9 66.7 76.4 21.1 33.3 23.6 0.0 0.0 0.0 Source: 2018 D&B Data; 01/01/2017 - 12/31/2018 Bank Data; 2017 CRA Aggregate Data, "--" data not available. Due to rounding, totals may not equal 100.0 Sample size 100% Charter Number: 3956 Appendix D-8 Washington – 2016 – Table Q – Assessment Area Distribution of Loans to Small Businesses by Income Category of the Geography Table Q: Assessment Area Distribution of Loans to Small Businesses by Income Category of the Geography 2016 Total Loans to Small Businesses Low-Income Tracts Moderate-Income Tracts Middle-Income Tracts Upper-Income Tracts Not Available-Income Tracts Assessment Area: # $ (000) % of Total Overall Market % Businesses % Bank Loans Aggregate % Businesses % Bank Loans Aggregate % Businesses % Bank Loans Aggregate % Businesses % Bank Loans Aggregate % Businesses % Bank Loans Aggregate Benton-Franklin 2016 7 1,545 20.0 5,561 6.5 0.0 4.3 25.9 28.6 23.9 32.5 28.6 32.0 34.5 42.9 39.6 0.6 0.0 0.3 Walla Walla 2016 21 2,902 60.0 1,080 0.0 0.0 0.0 23.2 4.8 18.2 53.7 66.7 50.9 23.0 28.6 30.8 0.1 0.0 0.0 Yakima 2016 7 1,348 20.0 4,828 8.3 14.3 4.9 29.0 0.0 20.4 33.1 71.4 36.5 29.6 14.3 38.2 0.0 0.0 0.0 Total 35 5,795 100.0 11,469 6.4 2.9 4.1 26.8 8.6 21.9 35.4 60.0 35.6 31.1 28.6 38.2 0.3 0.0 0.2 Source: 2016 D&B Data; 07/01/2016 - 12/31/2016 Bank Data; 2016 CRA Aggregate Data, "--" data not available. Due to rounding, totals may not equal 100.0 Sample size of BenFrank AA = 100%, WWAA = 21 loans, YakAA=100% Washington – 2017/2018 – Table Q – Assessment Area Distribution of Loans to Small Businesses by Income Category of the Geography Table Q: Assessment Area Distribution of Loans to Small Businesses by Income Category of the Geography 2017-18 Total Loans to Small Businesses Low-Income Tracts Moderate-Income Tracts Middle-Income Tracts Upper-Income Tracts Not Available-Income Tracts Assessment Area: # $ (000) % of Total Overall Market % Businesses % Bank Loans Aggregate % Businesses % Bank Loans Aggregate % Businesses % Bank Loans Aggregate % Businesses % Bank Loans Aggregate % Businesses % Bank Loans Aggregate Benton-Franklin 2017-18 20 2,483 37.0 3,554 1.3 0.0 1.2 29.3 50.0 29.0 37.6 35.0 36.0 31.4 15.0 33.4 0.5 0.0 0.4 Walla Walla 2017-18 21 4,823 38.9 793 5.8 0.0 5.7 16.3 4.8 17.4 63.4 81.0 62.7 14.4 14.3 14.3 0.1 0.0 0.0 Yakima 2017-18 13 3,692 24.1 2,809 0.0 7.7 0.0 29.0 30.8 23.9 39.3 23.1 43.4 31.7 38.5 32.8 0.0 0.0 0.0 Total 54 10,999 100.0 7,156 1.4 1.9 1.2 27.5 27.8 25.7 41.5 50.0 41.9 29.4 20.4 31.0 0.2 0.0 0.2 Source: 2018 D&B Data; 01/01/2017 - 12/31/2018 Bank Data; 2017 CRA Aggregate Data, "--" data not available. Due to rounding, totals may not equal 100.0 Sample size for BenFrank AA= 20 loans, WWAA= 21 loans, and YakAA=100% of small loans to businesses. Charter Number: 3956 Appendix D-9 Oregon – 2016 - Table R: Assessment Area Distribution of Loans to Small Businesses by Gross Annual Revenues Table R: Assessment Area Distribution of Loans to Small Businesses by Gross Annual Revenues 2016 Total Loans to Small Businesses Businesses with Revenues <= 1MM Businesses with Revenues > 1MM Businesses with Revenues Not Available Assessment Area: # $ (000) % of Total Overall Market % Businesses % Bank Loans Aggregate % Businesses % Bank Loans % Businesses % Bank Loans Umatilla 2016 4 670 100.0 1,264 81.1 100.0 45.2 4.9 0.0 13.9 0.0 Total 4 670 100.0 1,264 81.1 100.0 45.2 4.9 0.0 13.9 0.0 Source: 2016 D&B Data; 07/01/2016 - 12/31/2016 Bank Data; 2016 CRA Aggregate Data, "--" data not available. Due to rounding, totals may not equal 100.0 Sample size = Oregon – 2017/2018 - Table R: Assessment Area Distribution of Loans to Small Businesses by Gross Annual Revenues Table R: Assessment Area Distribution of Loans to Small Businesses by Gross Annual Revenues 2017-18 Total Loans to Small Businesses Businesses with Revenues <= 1MM Businesses with Revenues > 1MM Businesses with Revenues Not Available Assessment Area: # $ (000) % of Total Overall Market % Businesses % Bank Loans Aggregate % Businesses % Bank Loans % Businesses % Bank Loans Umatilla 2017-18 18 2,917 100.0 961 81.0 77.8 53.5 5.0 22.2 14.0 0.0 Total 18 2,917 100.0 961 81.0 77.8 53.5 5.0 22.2 14.0 0.0 Source: 2018 D&B Data; 01/01/2017 - 12/31/2018 Bank Data; 2017 CRA Aggregate Data, "--" data not available. Due to rounding, totals may not equal 100.0 Sample size =