1. (1) Small banking institutions with assets of less than $250 million. The department evaluates the record of a small banking institution that is not, or that was not during the prior calendar year, an intermediate small bank, of helping to meet the credit needs of its assessment area(s) pursuant to the criteria set forth in subdivision (b) of this section.

2. (2) Intermediate small banking institutions. The department evaluates the record of a small banking institution that is, or that was during the prior calendar year, an intermediate small banking institution, of helping to meet the credit needs of its assessment area(s) pursuant to the criteria set forth in subdivisions (b) and (c) of this section.

   (b) Lending test.

   A small banking institution's lending performance is evaluated pursuant to the following criteria:

3. (1) the banking institution's loan-to-deposit ratio, adjusted for seasonal variation and, as appropriate, other lending-related activities, such as loan originations for sale to the secondary markets, community development loans, or qualified investments;
4. (2) the percentage of loans and, as appropriate, other lending-related activities located in the banking institution's assessment area(s);
5. (3) the banking institution's record of lending to and, as appropriate, engaging in other lending-related activities for borrowers of different income levels, businesses and farms of different sizes, and minority- and women-owned businesses;
6. (4) the geographic distribution of the banking institution's loans; and

7. (5) the banking institution's record of taking action, if warranted, in response to written complaints about its performance in helping to meet credit needs in its assessment area(s).

   (c) Community development test.

   An intermediate small banking institution's community development performance also is evaluated pursuant to the following criteria:

8. (1) the number and amount of community development loans;
9. (2) the number and amount of qualified investments;
10. (3) the extent to which the banking institution provides community development services; and
11. (4) the banking institution's responsiveness through such activities to community development lending, investment and service needs.

(a) Performance criteria.