PUBLIC DISCLOSURE COMMUNITY REINVESTMENT ACT … · 2011. 8. 1. · PUBLIC DISCLOSURE January 10, 2011 COMMUNITY REINVESTMENT ACT PERFORMANCE EVALUATION Arvest Bank RSSD #311845 75

PUBLIC DISCLOSURE

January 10, 2011

COMMUNITY REINVESTMENT ACT

PERFORMANCE EVALUATION

Arvest Bank

RSSD #311845

75 North East Street

Fayetteville, Arkansas 72701

Federal Reserve Bank of St. Louis

P.O. Box 442

St. Louis, Missouri 63166-0442

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

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

income neighborhoods, consistent with safe and sound operation of the

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

assessment of the financial condition of the institution. The rating

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

or opinion of the federal financial supervisory agency concerning the

safety and soundness of this financial institution.

Table of Contents

TABLE OF CONTENTS

I. Institution Rating

a. Overall Rating......................................……………....……... 1

b. Performance Test Ratings Table ...................................…… 1

c. Summary of Major Factors Supporting Rating ..............…… 1

II. Institution

a. Description of Institution…………………………………… 2

b. Scope of Examination………………………………………. 4

c. Conclusions with Respect to Performance Tests…………… 8

III. Fayetteville-Springdale-Rogers Multistate Metropolitan Statistical Area

(Arkansas and Missouri)

a. Multistate Metropolitan Statistical Area Rating.................... 18

b. Scope of Examination............................................................ 19

c. Description of Institution‟s Operations ................................. 19

d. Conclusions with Respect to Performance Tests................... 24

IV. Fort Smith Multistate Metropolitan Statistical Area (Arkansas and Oklahoma)



c. Description of Institution‟s Operations ................................. 35


V. Kansas City Multistate Metropolitan Statistical Area (Kansas and Missouri)



c. Description of Institution‟s Operations................................. 51


VI. Arkansas

a. Summary

i. State Rating…………………………………………. 64

ii. Scope of Examination………………………………. 65

iii. Description of Institution‟s Operations……………... 65

iv. Conclusions with Respect to Performance Tests…… 66

b. Little Rock-North Little Rock-Conway Metropolitan Statistical

Area (full-scope review)

i. Description of Institution‟s Operations……………... 73

ii. Conclusions with Respect to Performance Tests…… 77

Table of Contents (continued)

c. Hot Springs Metropolitan Statistical Area (limited-scope review)



d. Nonmetropolitan Arkansas Statewide Area (full-scope review)



VII. Kansas

a. Summary

i. State Rating…………………………………………. 105




VIII. Missouri

a. Summary

i. State Rating…………………………………………. 119




b. Joplin Metropolitan Statistical Area (limited-scope review)



c. Springfield Metropolitan Statistical Area (limited-scope review)



d. Nonmetropolitan Missouri Statewide Area (full-scope review)



IX. Oklahoma

a. Summary

i. State Rating…………………………………………. 145




b. Lawton Metropolitan Statistical Area (full-scope review)



Table of Contents (continued)

c. Tulsa Metropolitan Statistical Area (full-scope review)



d. Oklahoma City Metropolitan Statistical Area (limited-scope

review)



e. Nonmetropolitan Oklahoma Statewide Area (full-scope review)



IX. Appendix

a. Scope of Examination Tables................................................. 198

b. Summary of State and Multistate Metropolitan Statistical Area

Ratings……………………………………………………… 200

c. 2009 Lending Performance Tables for Limited-Scope Review

Assessment Areas…………………………………………... 201

d. 2008 Lending Performance Tables (All Assessment Areas) 213

e. Glossary……………………………………………….......... 252

Arvest Bank CRA Performance Evaluation

Fayetteville, Arkansas January 10, 2011

1

INSTITUTION’S CRA RATING

INSTITUTION'S CRA RATING: SATISFACTORY

The following table indicates the performance level of Arvest Bank with respect to the Lending,

Investment, and Service Tests.

Arvest Bank

PERFORMANCE TESTS

Performance Levels Lending Test* Investment Test Service Test

Outstanding

High Satisfactory X X

Low Satisfactory X

Needs to Improve

Substantial Noncompliance

*Note: The Lending Test is weighted more heavily than the investment and service tests when arriving at an overall

rating.

The major factors supporting the institution‟s rating include the following:

The bank‟s lending levels reflect good responsiveness to assessment area credit needs.

The bank makes a substantial majority of loans inside its designated assessment areas.

The overall geographic distribution of the loans reflects adequate penetration throughout the

bank‟s assessment areas.

The distribution of loans by borrower‟s income/revenue profile reflects excellent penetration

among customers of different income levels and businesses/farms of different sizes.

Overall, the bank makes a relatively high level of community development loans.

The bank makes a significant level of qualified community development investments and

grants.

Service delivery systems are reasonably accessible to all portions of the bank‟s assessment

areas, and changes in branch locations have not adversely affected the accessibility of

delivery systems, particularly to low- and moderate-income (LMI) geographies and/or LMI

individuals.

The bank provides an adequate level of qualified community development services.



2

INSTITUTION

DESCRIPTION OF INSTITUTION

Arvest Bank, headquartered in Fayetteville, Arkansas, is a wholly-owned subsidiary of the

Arvest Bank Group, Inc., of Bentonville, Arkansas, a one-bank holding company reporting total

assets of $11.6 billion as of December 31, 2010. Arvest Bank has several finance-related

affiliates, including the following subsidiaries: Arvest Mortgage Company, Arvest Asset

Management, Security BankCard Center, Superior Finance Company, Central Mortgage

Company, and Waco Title Company. In addition, the bank is affiliated with Arvest Trust

Company through common ownership.

The bank operates 239 branches (233 traditional bank offices and six drive-up only branches),

spread across Arkansas, Kansas, Missouri, and Oklahoma. The bank‟s main office is located in

Fayetteville, Arkansas, which is in the Fayetteville, Arkansas-Missouri metropolitan statistical

area (MSA) in northwest Arkansas. The bank has a significant presence in this and other parts of

Arkansas, as well as a significant presence in Oklahoma. Since the bank‟s previous CRA

evaluation, the bank closed five facilities and added or opened 23 branches, most notably

through a 2009 bank acquisition including six offices located in the Kansas City, Missouri-

Kansas MSA. In light of this branch network expansion, the bank added one new CRA

assessment area (the Kansas City, Missouri-Kansas MSA Assessment Area) and expanded

previous nonMSA assessment areas in all four states. This includes eight additional counties in

Arkansas, seven additional counties in Missouri, 21 additional counties in Oklahoma, and three

additional counties in Kansas. The bank currently operates in 14 CRA assessment areas, as

detailed below.

Fayetteville, Arkansas-Missouri MSA

Fort Smith, Arkansas-Oklahoma MSA

Kansas City, Kansas-Missouri MSA

Little Rock, Arkansas MSA

Hot Springs, Arkansas MSA

NonMSA Arkansas

NonMSA Kansas

Joplin, Missouri MSA

Springfield, Missouri MSA

NonMSA Missouri

Lawton, Oklahoma MSA

Tulsa, Oklahoma MSA

Oklahoma City, Oklahoma MSA

NonMSA Oklahoma



3

For this review period, no legal impediments or financial constraints were identified that would

have hindered the bank from serving the credit needs of its customers, and the bank appeared

capable of meeting assessment area credit needs based on its available resources and financial

products. Arvest Bank reported total assets of $11.5 billion as of December 31, 2010, which

represents an increase in assets of 17.3 percent since the previous evaluation. Arvest Bank also

reported total loans of $7.4 billion (64.1 percent of total assets) and total deposits of about $9.5

billion. A distribution of the bank‟s lending portfolio, by both dollar amount and percentage, is

displayed in the following table.

Distribution of Total Loans

Credit Product Type Amount in $000s Percentage of

Total Loans

Construction and Development $ 827,513 11.2%

Commercial Real Estate $ 2,208,041 29.8%

Multifamily Residential $ 186,432 2.5%

1-4 Family Residential $ 1,805,867 24.4%

Farmland $ 302,807 4.1%

Farm Loans $ 79,891 1.1%

Commercial and Industrial $ 1,049,269 14.2%

Loans to Individuals $ 803,399 10.9%

Total Other Loans & Leases $ 134,266 1.8%

GROSS LOANS & LEASES $ 7,397,485 100%

Based on information presented in the previous table, the bank‟s primary lending focus continues

to include commercial real estate secured loans (29.8 percent) and residential real estate loans

(24.4 percent).1

The bank received a satisfactory rating at its previous CRA evaluation conducted as of

November 3, 2008.

1 The bank and its mortgage company affiliates also originate and subsequently sell a significant volume of loans

related to residential real estate; as these loans are typically sold on the secondary market shortly after origination,

this activity would not be captured in the data discussed here.



4

SCOPE OF EXAMINATION2

The bank‟s CRA performance was reviewed using the Federal Financial Institutions‟

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

bank performance standards entail three performance tests, including the lending, investment,

and services tests. Bank performance under these tests is rated at the institution level, as well as

by state and multistate MSA. As previously noted, Arvest Bank has 14 assessment areas,

including three multistate MSAs and portions of four states; this includes the Kansas City,

Missouri-Kansas MSA Assessment Area, which was added in light of a 2009 bank acquisition.

The following table details branch distribution, as well as the scope of review procedures

performed by assessment area.

State/Multistate MSA/Assessment Area Number of

Facilities Review Type

Multistate MSA

Fayetteville, Arkansas-Missouri MSA 52 Full-Scope Review

Fort Smith, Arkansas-Oklahoma MSA 17 Full-Scope Review

Kansas City, Kansas-Missouri MSA 10 Full-Scope Review

State of Arkansas

Little Rock, Arkansas MSA 24 Full-Scope Review

Hot Springs, Arkansas MSA 3 Limited-Scope Review

NonMSA Arkansas 21 Full-Scope Review

State of Kansas

NonMSA Kansas 1 Full-Scope Review

State of Missouri

Joplin, Missouri MSA 10 Limited-Scope Review

Springfield, Missouri MSA 4 Limited-Scope Review

NonMSA Missouri 4 Full-Scope Review

State of Oklahoma

Lawton, Oklahoma MSA 5 Full-Scope Review

Tulsa, Oklahoma MSA 29 Full-Scope Review

Oklahoma City, Oklahoma MSA 27 Limited-Scope Review

NonMSA Oklahoma 32 Full-Scope Review

2 Information presented in this section (e.g., review period dates and loan sample details) pertains throughout the rest

of this evaluation unless specifically noted otherwise.



5

Based on the information displayed in the previous table, Arvest Bank‟s CRA performance was

rated under seven rating categories, in addition to the bank‟s overall institution rating. As part of

this evaluation, the bank received three multistate MSA ratings and four state ratings (as well as

individual Lending, Investment, and Service Test ratings under each rating category). The

bank‟s institution rating is a blend of these ratings, which are weighted based upon significance

to overall institution operations. In light of the bank‟s branch structure, loan and deposit activity,

and supervisory history, CRA performance in three rating categories received primary

consideration—Oklahoma, Fayetteville Arkansas-Missouri MSA, and Arkansas. Remaining

rating categories received secondary consideration (in order of priority)—Fort Smith Arkansas-

Oklahoma MSA, Missouri, Kansas, and the Kansas City Missouri-Kansas MSA.

Lending Test

Arvest Bank‟s Lending Test performance was largely based upon 2008 and 2009 lending

activity, including home mortgage loans reported under the Home Mortgage Disclosure Act

(HMDA) and small business/farm loans reported under the CRA. While the Lending Test

analyses encompass lending activity from both 2008 and 2009, the body of this evaluation

primarily details bank performance based upon 2009 lending activity, noting significant

divergences in performance between the two years, as applicable (see Appendix D for detailed

performance figures based on 2008 lending activity). Also, the review period for community

development lending activity spanned from 2008 (including community development lending

activity not considered as part of the previous CRA evaluation) to the date of this evaluation.

In addition to the direct lending activity noted above, certain 2008 and 2009 affiliate lending

activity was also included in the scope of this evaluation, at the bank‟s option. This affiliate

lending activity is attributable to two of Arvest Bank‟s subsidiaries, Arvest Mortgage Company,

Fayetteville, Arkansas, and Security BankCard Center, Norman, Oklahoma. Arvest Mortgage

Company originates dwelling-related loans that are included in the bank‟s HMDA loan category,

and Security BankCard Center originates business loans via credit card extensions, which are

included in the bank‟s small business/small farm loan categories.



6

Under the Lending Test, the bank‟s performance is evaluated under the following criteria, as

applicable.

Level of Lending Activity

Assessment Areas Concentration3

Geographic Distribution of Loans

Distribution of Loans by Borrower‟s Income/Revenue Profile

Community Development Lending Activity

Product Innovation4

Under the Lending Test criteria noted above, analyses often entail comparisons of bank

performance to assessment area demographics and the performance of other lenders (based upon

HMDA and CRA aggregate lending data). Unless otherwise noted, assessment area

demographics are based upon 2000 U.S. Census Data. Certain business and farm

geodemographics are based upon Dun & Bradstreet data, as applicable to the year of bank

lending activity being considered.

Investment Test

The review of community development investments and grants includes qualified activity from

the date of the previous CRA evaluation to the date of the current evaluation. In addition,

investments made prior to the date of the previous CRA evaluation but still outstanding as of this

review date were also considered. Community development investments can include various

investment vehicles, such as bonds, individual equities, mutual fund shares, monetary

donations/grants, etc. Qualified investments and grants were evaluated to determine the bank‟s

overall level of activity, use of innovative and/or complex investments,5 as well as

responsiveness to assessment area credit and community development needs.

Service Test

The review period for retail and community development services includes activity from the date

of the previous CRA evaluation to the date of the current evaluation. The Service Test considers

the distribution and accessibility of bank branches/alternative delivery systems, changes in

branch locations, the reasonableness of business hours/retail services, and community

development services.

3 This review is performed at the institution level only, and it does not include affiliate lending activity.

4 Unlike other large bank CRA performance criteria, a lack of innovative and/or flexible lending practices does not

necessarily impact the bank‟s performance negatively, as these activities are largely used to augment

consideration given to an institution‟s performance under the quantitative criteria, resulting in a higher

performance rating. 5 Unlike other large bank CRA performance criteria, a lack of innovative and/or complex investments does not

necessarily impact the bank‟s performance negatively, as these activities are largely used to augment

consideration given to an institution‟s performance under the quantitative criteria, resulting in a higher

performance rating.



7

Other

To augment this evaluation, ten interviews (community contacts) were conducted with

community members of the bank‟s various assessment areas. In addition to the new community

contacts completed as a part of this evaluation, numerous previously completed community

contacts were also referenced when available and pertinent to the subject assessment area being

reviewed. The following table displays the number of community contacts utilized as part of

each full-scope assessment area review.

Assessment Area

New

Community

Contacts

Other

Community

Contacts

TOTAL

Fayetteville, AR-MO MSA 1 4 5

Fort Smith, AR-OK MSA 1 3 4

Kansas City, KS-MO MSA 0 7 7

Little Rock, AR MSA 0 2 2

NonMSA AR 1 3 4

NonMSA KS 2 0 2

NonMSA MO 2 0 2

Lawton, OK MSA 2 0 2

Tulsa, OK MSA 0 3 3

NonMSA OK 1 3 4

TOTAL 10 25 35

These community contacts were utilized in order to ascertain specific credit needs/opportunities

and local market conditions within the bank‟s assessment areas. Information from these

interviews also assisted in evaluating the bank‟s responsiveness to identified community credit

needs and community development opportunities.6

6 Key details from these community contact interviews are included in the Description of Institution’s Operations

sections, as applicable to the assessment areas in which the community contacts were made.



8

CONCLUSIONS WITH RESPECT TO PERFORMANCE TESTS

LENDING TEST

Arvest Bank‟s performance under the Lending Test is rated high satisfactory. Arvest Bank‟s

overall lending levels reflect good responsiveness to the credit needs of its combined assessment

areas. An analysis of the bank‟s lending activity revealed that a substantial majority of loans are

made inside the bank‟s assessment areas. Further, the geographic distribution of loans reflects

adequate penetration throughout the assessment areas, including LMI geographies. An analysis

of the loan distribution by borrower income reflects excellent penetration among customers of

different income levels and businesses and farms of different revenue sizes. In addition, Arvest

Bank made a relatively high level of community development loans. Finally, the bank makes

limited use of innovative and flexible lending practices in order to better serve the credit needs of

its assessment areas. The following table reflects the corresponding Lending Test ratings for the

multistate MSAs and states applicable to the bank‟s combined assessment areas.

State / Multistate MSA Lending Test Rating

Fayetteville AR-MO MSA High Satisfactory

Fort Smith AR-OK MSA Low Satisfactory

Kansas City KS-MO MSA High Satisfactory

Arkansas High Satisfactory

Kansas High Satisfactory

Missouri High Satisfactory

Oklahoma High Satisfactory

OVERALL HIGH SATISFACTORY



9

Lending Activity

Overall the bank‟s lending levels reflect good responsiveness to credit needs in the bank‟s

combined assessment areas. Lending activity based on the product lines reviewed during this

evaluation is detailed in following table.7

Summary of Lending Activity

Loan Type # % $(000s) %

Home Improvement 6,449 11.1% $252,122 4.4%

Home Purchase 9,262 16.0% $1,167,269 20.3%

Multi-Family Housing 93 0.2% $111,489 1.9%

Refinancing 18,006 31.0% $2,111,433 36.6%

Total HMDA related 33,810 58.3% $3,642,313 63.2%

Small Business 19,091 32.9% $1,882,923 32.7%

Small Farm 5,100 8.8% $238,420 4.1%

TOTAL LOANS 58,001 100% $5,763,656 100%

7 This table includes both bank-originated loans and affiliate-originated loans. However, only the affiliate-lending

activity made inside the bank‟s combined assessment areas is included here, while all bank activity is included

(both to borrowers inside and outside of the bank‟s assessment areas).



10

Assessment Areas Concentration

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

and dollar volume of loans inside and outside the bank‟s assessment areas.8

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

Loan Type Inside

Assessment Area

Outside

Assessment Area TOTAL

HMDA

14,039 145 14,184

99.0% 1.0% 100%

$ 823,539 $ 37,620 $ 861,159

95.6% 4.4% 100%

Small Business

15,879 283 16,162

98.2% 1.8% 100%

$ 1,786,797 $ 53,559 $ 1,840,356

97.1% 2.9% 100%

Small Farm

5,063 36 5,099

99.3% 0.7% 100%

$ 234,922 $ 3,488 $ 238,410

98.5% 1.5% 100%

TOTAL

34,981 464 35,445

98.7% 1.3% 100%

$ 2,845,258 $ 94,667 $ 2,939,925

96.8% 3.2% 100%

By number of total loans reviewed, 98.7 percent were made to borrowers within the bank‟s

assessment area. Further, data in the previous table demonstrate that a substantial majority of

loans (by both number and dollar amount of loans) are extended to borrowers residing inside the

bank‟s assessment areas for all three loan categories.

8 Loan activity displayed in this table does not include affiliate lending activity.



11

Geographic and Borrower Distribution

As is displayed in the following table, the bank‟s overall geographic distribution of loans reflects

adequate penetration throughout the bank‟s assessment areas in the various states/multistate

MSAs.

State / Multistate MSA Geographic Distribution of Loans

Fayetteville AR-MO MSA Adequate

Fort Smith AR-OK MSA Good

Kansas City KS-MO MSA Good

Arkansas Adequate

Kansas Adequate

Missouri Adequate

Oklahoma Adequate

OVERALL ADEQUATE

Overall, performance by borrower‟s income/revenue profile is excellent, as is displayed in the

following table.

State / Multistate MSA Loan Distribution by Borrower’s Profile

Fayetteville AR-MO MSA Excellent

Fort Smith AR-OK MSA Excellent

Kansas City KS-MO MSA Good

Arkansas Excellent

Kansas Excellent

Missouri Excellent

Oklahoma Good

OVERALL EXCELLENT



12

Community Development Lending Activities

Overall, Arvest Bank maintains a relatively high level of community development loans.

State / Multistate MSA Community Development Lending

Fayetteville AR-MO MSA Leader

Fort Smith AR-OK MSA Few, if any

Kansas City KS-MO MSA Relatively High Level

Arkansas Relatively High Level

Kansas Few, if any

Missouri Low level

Oklahoma Relatively High Level

OVERALL RELATIVIELY HIGH LEVEL

As displayed in the previous table, the bank‟s performance varied significantly by state and

multistate MSA. However, with the most weight being placed on the Fayetteville Arkansas-

Missouri MO MSA, the state of Oklahoma, and the state of Arkansas, Arvest Bank‟s overall

community development lending performance reflects a relatively high level of community

development loans.

The bank originated or renewed 45 community development loans and letters-of-credit within

the combined assessment areas totaling $138.9 million. The community development loans were

for a variety of purposes, including affordable housing (22), economic development (1),

revitalization/stabilization of LMI geographies (14), and community development services (8).

Included in this activity are multiple loans for projects associated with the New Markets Tax

Credit Program (NMTC), which is considered an innovative program that provides equity capital

to further commercial economic development activities in underserved geographies. To qualify

for NMTCs, entities must be a domestic corporation that has a mission of serving low-income

communities or individuals, maintains accountability to the residents of low-income

communities, and must be certified by the United States Department of the Treasury‟s

Community Development Financial Institutions (CDFI) Fund. This CDFI certification facilitates

the credit flow to businesses serving the needs of LMI individuals and ensures these businesses

continue to benefit LMI areas.



13

INVESTMENT TEST

Overall, Arvest Bank is rated high satisfactory for the Investment Test. The bank made a

significant level of qualified community development investments and grants and is occasionally

in a leadership position. Arvest Bank makes occasional use of complex investments to support

community development initiatives. The following is a breakdown of the Investment Test rating

for all rated areas.

State / Multistate MSA Investment Test Rating

Fayetteville AR-MO MSA Outstanding

Fort Smith AR-OK MSA Low Satisfactory

Kansas City KS-MO MSA Low Satisfactory

Arkansas High Satisfactory

Kansas Needs to Improve

Missouri Low Satisfactory

Oklahoma High Satisfactory

OVERALL HIGH SATISFACTORY

As displayed in the previous table, the bank‟s Investment Test performance was outstanding in

its most significant rated area, the Fayetteville Arkansas-Missouri MSA. While the bank was

rated needs to improve in the state of Kansas, performance in this rated area played a small role

related to overall rating conclusions, as bank operations in Kansas have the least significance

compared to other state/multistate MSAs.

During the evaluation period, the bank made or participated in CRA-qualified investments for a

total investment balance of $41.7 million. This represents a decrease compared to the previous

examination total of $52.3 million. The majority of the bank‟s investments consist of purchased

portfolios of mortgage-backed securities (MBS). These MBS are secured by affordable housing

loans made to LMI individuals. The bank purchased $9.9 million of qualified MBS during this

review period, benefiting and attributable to eight assessment areas. Further, as of this evaluation

date, the bank maintained $16.0 million of qualified MBS purchased prior to this evaluation,

which are secured by loans throughout all of the bank‟s 14 assessment areas. Consequently, the

estimated community development investment benefit used here for evaluation purposes was

divided among the assessment areas based upon the bank‟s deposit market share by assessment

area.

Another noteworthy investment the bank makes is in Low Income Housing Credits and NMTC.

The bank has invested $15.8 million in these tax credits across three assessment areas. Further,

the bank made an excellent level of community development grants during this evaluation

period. The bank made 983 grants totaling over $2.1 million, reflecting an increase of $1.0

million in grant monies from the previous evaluation.



14

SERVICE TEST

Overall, Arvest Bank‟s performance is rated low satisfactory under the Service Test. The bank‟s

delivery systems are reasonably accessible to all geographies and individuals of different income

levels throughout the combined assessment areas. In addition, the bank‟s record of opening and

closing branches has not adversely affected the accessibility of its delivery systems, particularly

to LMI geographies and/or LMI individuals. Further, services do not vary in a way that

inconveniences the needs of its assessment area, particularly to LMI geographies and/or LMI

individuals. Lastly, Arvest Bank provides an adequate level of community development services

within the combined assessment areas. The following table reflects the bank‟s Service Test

ratings for all rated areas.

State / Multistate MSA Service Test Rating

Fayetteville AR-MO MSA Low Satisfactory

Fort Smith AR-OK MSA High Satisfactory

Kansas City KS-MO MSA Low Satisfactory

Arkansas Low Satisfactory

Kansas Low Satisfactory

Missouri Low Satisfactory

Oklahoma Low Satisfactory

OVERALL LOW SATISFACTORY

As displayed in the previous table, the bank‟s Service Test performance was low satisfactory in

six of seven rated areas; the exception being the Fort Smith Arkansas-Oklahoma MSA, which

received a higher rating primarily due to the relatively higher level of community development

services attributable to this rating area.



15

Accessibility of Delivery Systems

Overall, the bank‟s delivery systems are reasonably accessible to the geographies and individuals

of different income levels in the bank‟s assessment areas.

State / Multistate MSA Accessibility of Delivery Systems

Fayetteville AR-MO MSA Accessible

Fort Smith AR-OK MSA Readily Accessible

Kansas City KS-MO MSA Reasonably Accessible

Arkansas Reasonably Accessible

Kansas Reasonably Accessible

Missouri Reasonably Accessible

Oklahoma Accessible

OVERALL REASONABLY ACCESSIBLE

In addition to the standard retail services and community development services evaluated at the

state/multistate MSA and assessment area levels, the bank also maintains an Internet website

where, among other standard online banking features, customers can apply for a loan, open a

deposit account, and pay bills. In addition, the bank operates a 24-hour telephone banking line

where customers can obtain deposit and loan account information and transfer funds between

accounts.



16

Changes in Branch Locations

As displayed in the following table, the bank‟s record of opening and closing bank facilities

throughout its various assessment areas has not adversely affected the accessibility of its delivery

systems, particularly to LMI geographies and/or LMI individuals.

State / Multistate MSA Changes in Branch Locations

Fayetteville AR-MO MSA Generally Not Adversely Affected

Fort Smith AR-OK MSA Not Adversely Affected

Kansas City KS-MO MSA Not Adversely Affected

Arkansas Not Adversely Affected

Kansas Not Adversely Affected

Missouri Not Adversely Affected

Oklahoma Not Adversely Affected

OVERALL NOT ADVERSELY AFFECTED

Community Development Services

Overall, the bank provides an adequate level of community development services throughout its

various assessment areas, as displayed in the following table.

State / Multistate MSA Community Development Services

Fayetteville AR-MO MSA Adequate Level

Fort Smith AR-OK MSA Relatively High Level

Kansas City KS-MO MSA Few, If Any

Arkansas Limited Level

Kansas Few, If Any

Missouri Few, If Any

Oklahoma Adequate Level

OVERALL ADEQUATE LEVEL

While the bank‟s level of community development services is below satisfactory performance

standards in three rated areas (Kansas City Kansas-Missouri MSA, Kansas, and Missouri), the

bank‟s community development service performance was adequate or better in most rated areas,

including the top three primary rating areas.



17

FAIR LENDING OR OTHER ILLEGAL CREDIT PRACTICES REVIEW

Based upon past supervisory history and findings from the Consumer Affairs examination

(including a fair lending analysis performed under Regulation B - Equal Credit Opportunity and

the Fair Housing Act (FHA) requirements) conducted concurrently with this CRA evaluation, no

evidence of discriminatory or other illegal credit practices inconsistent with helping to meet

community credit needs was identified.



18

FAYETTEVILLE-SPRINGDALE-ROGERS

MULTISTATE MSA9

CRA RATING FOR FAYETTEVILLE ARKANSAS-MISSOURI MSA: SATISFACTORY

The Lending Test is rated: High Satisfactory

The Investment Test is rated: Outstanding

The Service Test is rated: Low Satisfactory

Major factors supporting the institution‟s Fayetteville Arkansas-Missouri MSA (Fayetteville

MSA) rating include the following:

Arvest Bank‟s lending levels reflect good responsiveness to the credit needs in the

Fayetteville MSA.

The bank‟s overall geographic distribution of loans reflects adequate penetration throughout

the Fayetteville MSA.


among borrowers of different income levels and businesses/farms of different sizes.

The bank is a leader in making community development loans within the Fayetteville MSA.

The bank makes an excellent level of qualified community development investments and

grants within the Fayetteville MSA.

Service delivery systems are accessible to geographies and individuals of different income

levels in the Fayetteville MSA; further, changes in branch locations have generally not

adversely affected the accessibility of delivery systems, particularly to LMI geographies

and/or LMI individuals.

Arvest Bank personnel provides an adequate level of community development services in the

Fayetteville MSA.

9 This rating reflects performance within the multistate MSA. The Arkansas and Missouri statewide evaluations are

adjusted and do not reflect performance in the parts of those states contained within the Fayetteville MSA.



19

SCOPE OF EXAMINATION

Arvest Bank has one assessment area in the Fayetteville MSA, which includes the entire

multistate MSA. The bank‟s performance within the Fayetteville MSA was reviewed using full-

scope examination procedures, and scoping considerations applicable to the review of this

assessment area are consistent with the overall CRA examination scope as presented in the

Institution, Scope of Examination section. Also, this evaluation included information obtained

through five community contact interviews completed in the Fayetteville MSA, including one

completed as part of this evaluation. The community contact completed as part of this review

took place with a director of planning and community development.10

DESCRIPTION OF INSTITUTION’S OPERATIONS IN FAYETTEVILLE MSA

Bank Structure

Arvest Bank operates 50 of its 233 full-service branches (21.5 percent) and two drive-up

facilitates within this assessment area. Of the combined facilities, none are located in low-

income census tracts (however, the bank does maintain multiple facilities within close proximity

of a low-income geography), seven are in moderate-income census tracts, 37 are in middle-

income census tracts, and eight are located in upper-income census tracts. During this review

period, the bank did not open any new offices and closed three facilities in this assessment area

(the bank closed one full-service branch and two drive-up facilities). Based on this branch

network and other service delivery systems, the bank is well positioned to deliver financial

services to substantially all of the Fayetteville MSA Assessment Area.

This assessment area is a competitive banking market, with a total of 37 Federal Deposit

Insurance Corporation (FDIC) insured institutions operating within the MSA, based on the FDIC

Deposit Market Share Report as of June 30, 2010. Of those 37 financial institutions, Arvest

Bank held the largest amount of deposit dollars by far, with a deposit market share of 41.7

percent (the next closest market share percentage was 6.5 percent). The deposits held at

branches throughout the Fayetteville MSA represent 33.7 percent of all Arvest Bank deposits.

10

Key details from these community contact interviews are included in the next section, Description of Institution’s

Operations.



20

General Demographics

The Fayetteville MSA is a four-county multistate MSA including three counties in Arkansas and

one county in Missouri. Specifically, the Arkansas portions of the multistate MSA include

Benton, Madison, and Washington counties. The Missouri portion of the multistate MSA

consists of McDonald County. The multistate MSA is located in the northwest corner of

Arkansas and the southwest corner of Missouri.

Based on 2000 census data, the assessment area had a total population of 347,045. The majority

of the population lives in Washington County (157,715) and Benton County (153,406). There

are much smaller populations in McDonald County (21,681) and Madison County (14,243).

According to U.S. Census Bureau estimates as of July 2009, the population in the Fayetteville

MSA has grown significantly. The total MSA population in 2009 was estimated at 464,623.

This marks a total MSA population increase of 33.9 percent since the 2000 census.

As the demographics of this assessment area cover a wide metropolitan area, and the population

is diverse, credit needs in the area are also varied, including a standard blend of consumer and

business/farm credit products. Other particular credit needs in the assessment area (as noted

primarily during community contact interviews) include flexible residential real estate loan

programs and commercial operating lines-of-credit. Further, as the Fayetteville MSA is an

environment with significant need, coupled with an ample source of community development

intermediaries (such as nonprofit agencies, higher education institutions, and government

assistance entities), there is a high level of community development opportunity available for

financial institution participation.

Income and Wealth Demographics

The multistate MSA consists of 68 geographies. Based on the 2000 census, the median family

income for the Fayetteville MSA was $42,578, which was greater than the state of Arkansas

($38,663) but less than the state of Missouri ($46,044). As of 2009, the U.S. Department of

Housing and Urban Development (HUD) estimated median family income for the Fayetteville

MSA was $56,000, revealing that the assessment area has become significantly wealthier since

the 2000 census. The following table summarizes the distribution of geographies by income

level and the family population of those census tracts within the assessment area.



21

Assessment Area Demographics by Geography Income Level

Dataset Low- Moderate- Middle- Upper- Unknown TOTAL

Census Tracts 2 11 46 9 0 68

2.9% 16.2% 67.6% 13.2% 0.0% 100%

Family

Population

944 11,427 66,496 14,553 0 93,420

1.0% 12.2% 71.2% 15.6% 0.0% 100%

The following table displays the distribution of assessment area families by income level, as well

as family population income characteristics for the states of Arkansas and Missouri.

Family Population by Income Level

Dataset Low- Moderate- Middle- Upper- TOTAL

Assessment Area 17,270 17,491 22,458 36,201 93,420

18.5% 18.7% 24.0% 38.8% 100%

Arkansas 148,233 131,570 163,567 292,693 736,063

20.1% 17.9% 22.2% 39.8% 100%

Missouri 282,730 278,477 345,089 580,250 1,486,546

19.0% 18.7% 23.2% 39.0% 100%

Housing Demographics

While income levels in the Fayetteville MSA Assessment Area are relatively high, housing costs

in the assessment area still appear less affordable than state comparisons, due largely to higher

real estate values in the Fayetteville MSA. The assessment area housing affordability ratio was

40.0 percent as of the 2000 census, which is significantly below the housing affordability ratio

for of the state of Arkansas (47.0 percent) and slightly below the state of Missouri (43.0 percent).

Of the four MSA counties, housing is most affordable in McDonald County (46.0 percent),

followed by Benton County, Madison County, and Washington County (43.0, 39.0, and 39.0

percent, respectively). The median housing value in the assessment area is $88,400, which is

much higher than the state of Arkansas ($67,400) and slightly more than the state of Missouri

($86,900). Median gross rent in the Fayetteville MSA is also higher ($495) than both the state of

Arkansas ($453) and the state of Missouri ($484).



22

Industry and Employment Demographics

According to 2009 Dun & Bradstreet data, there were 19,458 business entities and 532

agricultural entities operating within the Fayetteville MSA. The area is the home to one of the

world‟s largest retail stores, a large meat and poultry producer, and a major North American

transportation company. The following table depicts employment levels by industry, comparing

the Fayetteville MSA economy to the state of Arkansas and the state of Missouri using the

“Location Quotient” measure.11

Fayetteville MSA - Employment by Industry

Industry Employment % of

Total

LQ -

Arkansas

LQ -

Missouri

Natural Resources and Mining 1,543 0.9% 0.42 1.36

Construction 7,948 4.8% 0.87 0.88

Manufacturing 29,286 17.8% 1.01 1.51

Trade, Transportation, and Utilities 42,061 25.5% 1.02 1.08

Information 2,073 1.3% 0.72 0.44

Financial Activities 7,454 4.5% 0.86 0.63

Professional and Business Services 32,163 19.5% 1.61 1.34

Education and Health Services 20,136 12.2% 0.71 0.71

Leisure and Hospitality 18,329 11.1% 1.04 0.89

Other Services 3,680 2.2% 0.84 0.58

TOTAL 164,673 100% N/A

As displayed in the previous table, the largest industries in the Fayetteville MSA are trade,

transportation, and utilities; professional and business services; and manufacturing. The

assessment area industry mix is similar to the state of Arkansas, with noted exceptions being a

greater reliance on professional and business services and less reliance on natural resources and

mining. The industry mix varies significantly from the state of Missouri, most notably with a

greater reliance on manufacturing and less reliance on information-related industries.

The recent annual average unemployment rates for the Fayetteville MSA (4.0 percent in 2008

and 5.9 percent in 2009) were much lower than rates for both the state of Arkansas (5.3 percent

in 2008 and 7.4 percent in 2009) and the state of Missouri (6.1 percent in 2008 and 9.3 percent in

2009).12

Similar to the state of Arkansas and the state of Missouri, unemployment in the

Fayetteville MSA generally rose in 2010 and was projected to be at 6.8 percent in January

2011—a figure still lower than preliminary estimates for the state of Arkansas (8.7 percent) and

the state of Missouri (10.2 percent).

11

Source: 2009 Bureau of Labor Statistics, U.S. Department of Labor 12

Source: Bureau of Labor Statistics, U.S. Department of Labor (not seasonally adjusted)



23

Community Contact Information

Community contacts indicated that local banks continue to face financial distress as a result of

the downturn in the economy. In response to issues related to poor performing loans, banks are

focusing on low-risk borrowers. Due to this credit tightening, it was noted that finding funding

for very low-income individuals and start-up businesses has been difficult. Community contacts

stressed that the major credit needs in the area are residential real estate (FHA, conventional, and

rural housing development) and commercial operating lines-of-credit.

According to community contacts, Community Development Block Grant funds have been vital

in the area. Under this program, grant dollars provide housing and rehabilitation assistance

(loans for housing, emergency services, etc.) for LMI individuals. It was noted that financial

institution participation in programs such as this is adequate. However, areas requiring more

assistance include downtown revitalization, financing for small business development, and

coordinating with landlords to get rental properties up to standards of healthy and adequate living

conditions.

The contacts noted that the economy in the northwest Arkansas area is beginning to stabilize.

After the housing boom and subsequent foreclosures, vacancy rates increased in both the

residential and commercial sectors. Recent data indicate that home sales are beginning to rise, as

is consumer spending. Current unemployment levels are still above the pre-recession level;

however, there are signs of employment stabilization, as major employers in the area are hiring

back individuals who were previously laid-off.



24

CONCLUSIONS WITH RESPECT TO PERFORMANCE TESTS IN FAYETTEVILLE

MSA

LENDING TEST

Arvest Bank‟s Lending Test performance in the Fayetteville MSA is rated high satisfactory.

Lending levels reflect good responsiveness to assessment area credit needs. The geographic

distribution of loans reflects adequate penetration throughout the assessment area. The loan

distribution by borrower‟s income/revenue profile reflects excellent penetration among

customers of different income levels and businesses/farms of different sizes. In addition, Arvest

Bank is a leader in making community development loans in this assessment area.

Lending Activity

The bank‟s lending levels within the Fayetteville MSA reflect good responsiveness to assessment

area credit needs based upon the lending activity analyzed under the Lending Test. This lending

activity is displayed by loan type in the following table.


Loan Type # % $(000s) %


Home Purchase 351 3.0% $33,685 3.3%


Refinancing 3,175 26.7% $185,436 18.2%

Total HMDA related 5,633 47.4% $342,957 33.7%

Small Business 4,769 40.2% $599,836 59.0%

Small Farm 1,470 12.4% $73,546 7.2%

TOTAL LOANS 11,872 100% $1,016,339 100%



25


As noted in the Description of Institution’s Operations in Fayetteville MSA section, this

assessment area includes two low-income and 11 moderate-income census tracts, representing

19.1 percent of all assessment area census tracts. Overall, based on lending activity from all

three loan categories reviewed, the bank‟s geographic distribution of loans reflects adequate

penetration throughout this assessment area, including the 13 LMI census tracts. The following

table displays the geographic distribution of HMDA loans in comparison to owner-occupied

housing demographics for the assessment area.

Distribution of Loans Inside Assessment Area by Income Level of Geography

Dataset Geography Income Level

TOTAL Low- Moderate- Middle- Upper- Unknown

Home Purchase 6 63 1,297 347 0 1,713

0.4% 3.7% 75.7% 20.3% 0.0% 100%

Refinance 9 194 3,390 1,084 0 4,677

0.2% 4.1% 72.5% 23.2% 0.0% 100%

Home

Improvement

0 26 471 133 0 630

0.0% 4.1% 74.8% 21.1% 0.0% 100%

Multi-Family 1 7 7 7 0 22

4.5% 31.8% 31.8% 31.8% 0.0% 100%

TOTAL

LOANS

16 290 5,165 1,571 0 7,042

0.2% 4.1% 73.3% 22.3% 0.0% 100%

Owner Occupied

Housing 0.2% 11.7% 71.9% 16.2% 0.0% 100%

The bank‟s HMDA lending in low-income geographies (0.2 percent) is adequate, as this

performance matches the owner-occupied housing percentage and is also in line with the 2009

HMDA aggregate lending level in low-income census tracts (0.3 percent). Similarly, bank

lending in moderate-income census tracts is also adequate. While the bank‟s lending in

moderate-income tracts (4.1 percent) is below the owner-occupied percentage (11.7 percent), it is

similar to the 2009 aggregate lending level in moderate-income census tracts (4.7 percent).

Consequently, the bank‟s overall geographic distribution of HMDA loans reflects adequate

penetration throughout this assessment area.



26

Second, the bank‟s geographic distribution of small business loans was reviewed, which is

displayed in the following table in comparison to the location of businesses throughout the

bank‟s assessment area.




Small Business

Loans

11 299 1,694 487 0 2,491

0.4% 12.0% 68.0% 19.6% 0.0% 100%

Business

Institutions 0.8% 15.0% 66.0% 18.2% 0.0% 100%

While below comparison data levels, the geographic distribution of the bank‟s small business

loans reflects adequate penetration throughout the assessment area, including LMI geographies.

The bank‟s performance in low-income tracts (0.4 percent) is below, but within adequate range

of the estimated percentage of businesses located in low-income census tracts (0.8 percent) and

the 2009 CRA aggregate lending level in low-income census tracts (0.7 percent). Similarly, the

bank‟s performance in moderate-income tracts (12.0 percent) is just below the estimated

percentage of businesses located in moderate-income census tracts (15.0 percent) and the CRA

aggregate lending level in moderate-income census tracts (14.1 percent). Therefore, the bank‟s

overall geographic distribution of small business loans is adequate.



27

Finally, the geographic distribution of the bank‟s small farm loans is displayed in the following

table in comparison to the location of farms throughout the assessment area.




Small Farm

Loans

0 120 569 18 0 707

0.0% 17.0% 80.5% 2.5% 0.0% 100%

Agricultural

Institutions 0.0% 20.9% 72.7% 6.4% 0.0% 100%

According to Dun & Bradstreet estimates, 20.9 percent of farms in the assessment area reported

being located in moderate-income tracts (estimates indicate there are no farm lending

opportunities in low-income census tracts). While the bank‟s percentage of the small farm loans

in moderate-income census tracts, 17.0 percent, is slightly below the estimated percentage of

farms in moderate-income census tracts, this performance is good compared to the 2009 CRA

aggregate lending level in moderate-income census tracts, 15.6 percent. Therefore, the bank‟s

geographic distribution of small farm loans is good.



28

Loan Distribution by Borrower’s Profile

Overall, the bank‟s loan distribution by borrower‟s profile is excellent, based on performance

from all three loan categories reviewed. The following table shows the distribution of HMDA

loans by borrower income level in comparison to family population income characteristics.

Distribution of Loans Inside Assessment Area by Income Level of Borrower

Dataset Borrower Income Level


Home Purchase 191 416 490 602 14 1,713

11.2% 24.3% 28.6% 35.1% 0.8% 100%

Refinance 294 651 964 2,717 51 4,677

6.3% 13.9% 20.6% 58.1% 1.1% 100%

Home

Improvement

47 80 135 344 24 630

7.5% 12.7% 21.4% 54.6% 3.8% 100%


0.0% 0.0% 0.0% 0.0% 100.0% 100%

TOTAL

LOANS

532 1,147 1,589 3,663 111 7,042

7.6% 16.3% 22.6% 52.0% 1.6% 100%

Families 18.5% 18.7% 24.0% 38.8% 0.0% 100%

Based on the above table, the bank‟s level of lending to low-income borrowers (7.6 percent) is

lower than the low-income family population (18.5 percent). However, the bank‟s level of

lending is higher than the aggregate lending level to low-income borrowers (7.2 percent),

reflecting good bank performance. Similarly, the bank‟s HMDA lending to moderate-income

borrowers (16.3 percent) is slightly less than the percentage of moderate-income borrowers

within the assessment area (18.7 percent), but higher than aggregate lending to moderate-income

borrowers (15.7 percent). Therefore, the bank‟s level of lending to LMI borrowers within the

assessment area is good.



29

Next, small business loans were reviewed to determine the bank‟s lending levels to businesses of

different sizes. The following table shows the distribution of small business loans by loan

amount and business revenue size.13

Lending Distribution by Business Revenue Level

Gross Revenue Loan Amounts in $000s

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

$1 Million or Less 1,747 317 281 2,345

70.5% 12.8% 11.3% 94.7%

Greater Than $1

Million

38 32 62 132

1.5% 1.3% 2.5% 5.3%

TOTAL 1,785 349 343 2,477

72.1% 14.1% 13.8% 100%

The bank originated a substantial majority of its small business loans (94.7 percent) to businesses

with revenues of $1 million or less. The highest concentration of these loans was for loan

amounts of $100,000 or less, which further demonstrates the bank‟s willingness to make credit

available to small businesses in the assessment area. According to Dun & Bradstreet, 90.2

percent of businesses reporting for 2009 had revenues of $1 million or less. In addition, the

bank‟s level of lending to small businesses surpasses the 2009 aggregate lending level of 13.3

percent. Therefore, the bank‟s level of lending to small businesses in the assessment area is

excellent.

13

This analysis included 2,491 small business loans; however, 14 of these loans were removed from the sample

because information related to business revenue size was not available.



30

Finally, small farm loans were reviewed to determine the bank‟s lending levels to farms of

different sizes. The following table shows the distribution of small farm loans by loan amount

and farm revenue size.

Lending Distribution by Farm Revenue Level


TOTAL <$100 >$100<$250 >$250<$500

$1 Million or Less 619 69 16 704

87.6% 9.8% 2.3% 99.6%

Greater Than $1

Million

1 1 1 3

0.1% 0.1% 0.1% 0.4%

TOTAL 620 70 17 707

87.7% 9.9% 2.4% 100%

Of the 707 small farm loans the bank made in this assessment area, 99.6 percent were originated

to farms with revenues of $1 million dollars or less. Further, the highest concentration of these

loans was in loan amounts of $1 million or less, which further demonstrates the bank‟s

willingness to make credit available to small farms in the assessment area. According to Dun &

Bradstreet, 97.7 percent of farms in the assessment area reported revenues of $1 million or less.

In addition, the bank‟s level of lending to small farms is significantly higher than the 2009 CRA

aggregate percentage of lending to small farms, 67.9 percent. Therefore, Arvest Bank‟s lending

to small farms is excellent.


Arvest Bank continues to be a leader in making community development loans in the

Fayetteville MSA Assessment Area. During the review period, the bank originated or renewed

12 community development loans totaling $14.1 million within this assessment area. Ten of the

loans financed construction or renovation projects providing affordable housing to LMI

individuals within the assessment area. Two of the loans were for community services targeted

to LMI individuals within the assessment area.



31

INVESTMENT TEST

Arvest Bank‟s performance under the Investment Test is rated outstanding for the Fayetteville

MSA. The bank made an excellent level of qualified community development investments and

grants. The bank makes significant use of complex investments to support community

development initiatives, and the bank exhibits excellent responsiveness to credit and community

development needs in the Fayetteville MSA Assessment Area.

Investment and Grant Activity

Arvest Bank has an excellent level of qualified community development investments and grants

within the Fayetteville MSA. As of December 31, 2010, the bank had a balance of $12.5 million

in qualified investments, representing an increase of $3.3 million (35.9 percent) since the last

CRA evaluation. The bank has $6.9 million invested in MBS ($1.5 million in new investments

and $5.4 million in previous review period investments still outstanding) that finance affordable

housing. In addition, the bank has investments in projects associated with Low Income Housing

Tax Credits (LIHTCs) that total $5.6 million. Arvest Bank also made a significant level of

community development grants within the Fayetteville MSA—210 grants totaling $410,742.

Among these numerous contributions were significant donations to schools serving a majority of

LMI students, affordable housing organizations, and community service organizations that target

children from LMI families.

Community Development Initiatives

In the Fayetteville MSA, the bank makes significant use of investments in LIHTCs. These

investments fund the construction of new rental housing and rehabilitation of existing housing

for low-income households.

Responsiveness to Credit and Community Development Needs

Arvest Bank exhibits excellent responsiveness to credit and community development needs.

Community contacts noted that the major credit needs in this assessment area are flexible options

for residential real estate loans and commercial operating lines-of-credit. The bank‟s previously

mentioned investments and grants target these needs by providing liquidity in the secondary

market for home loans made to LMI borrowers and by making capital available for low-income

housing projects.



32

SERVICE TEST

Arvest Bank‟s Service Test rating in the Fayetteville MSA is low satisfactory. Delivery systems

are accessible to all geographies and individuals of different income levels in the Fayetteville

MSA Assessment Area, and the bank‟s record of opening and closing branches has generally not

adversely affected the accessibility of its delivery systems to LMI geographies and/or LMI

individuals. Business hours and services do not vary in a way that inconveniences LMI

geographies and/or LMI individuals, and bank personnel provides an adequate level of

community development services in this assessment area.


Arvest Bank operates 52 branch facilities, including the main office, within the Fayetteville

MSA Assessment Area. The following table illustrates the distribution of these facilities by

income level of geography, as compared to key assessment area demographics.

Branch Distribution by Geography Income Level



Branches 0 7 37 8 0 52

0.0% 13.5% 71.2% 15.4% 0.0% 100%

Census Tracts 2.9% 16.2% 67.6% 13.2% 0.0% 100%

Household

Population 2.7% 13.1% 68.8% 15.5% 0.0% 100%

As illustrated in the above table, Arvest Bank‟s branches in moderate-income census tracts

represent 13.5 percent of all facilities in the Fayetteville MSA Assessment Area. This dispersion

of service delivery systems in moderate-income geographies is in line with moderate-income

demographics. While the bank does not have any branches in low-income geographies, the bank

does have facilities located within close proximity of the two low-income geographies in this

assessment area. Based on this information, Arvest Bank‟s delivery systems are accessible to

geographies and individuals of different income levels in the Fayetteville MSA.


During the review period, the bank did not add any branches and closed three branches in the

Fayetteville MSA Assessment Area. The bank closed one drive-up facility in a low-income

census tract, one drive-up facility in a middle-income census tract, and one full-service branch in

an upper-income census tract. While this activity reflects a slight decrease in overall service

accessibility, this minor consolidation did not disproportionally affect LMI areas or customers.

Consequently the bank‟s record of opening and closing branches in this assessment area has

generally not adversely affected the accessibility of delivery systems, particularly to LMI

geographies and/or LMI individuals.



33

Reasonableness of Business Hours and Services in Meeting Assessment Area Needs

Business hours and banking products and services are relatively consistent across all branches in

the Fayetteville MSA Assessment Area. Most branches have Saturday operating hours and offer

extended hours of operations in lobby and drive-up facilities at some point during the week.

Most drive-up facilities remain open until 6 p.m., Monday through Friday, and are open until

noon on Saturdays. All branches offer the same standard products, including low-cost checking

and savings accounts, certificates of deposit, real estate and consumer loans, and other services.

Therefore, bank services do not vary in a way that inconveniences certain segments of this

assessment area, particularly LMI geographies and/or LMI individuals.


Arvest Bank staff members within the Fayetteville MSA provide an adequate level of

community development services. Six bank employees provide financial expertise to community

development organizations on an ongoing basis. Two of these organizations assist schools with

a large proportion of LMI students, two organizations assist low-income students in obtaining

higher education scholarships, one organization assists the needy in the area, and one

organization is part of a government plan for the revitalization and stabilization of a moderate-

income area.



34

FORT SMITH MULTISTATE MSA14

CRA RATING FOR FORT SMITH ARKANSAS-OKLAHOMA MSA: SATISFACTORY

The Lending Test is rated: Low Satisfactory

The Investment Test is rated: Low Satisfactory

The Service Test is rated: High Satisfactory

Major factors supporting the institution‟s Fort Smith Arkansas-Oklahoma MSA (Fort Smith


Arvest Bank‟s lending levels reflect good responsiveness to the credit needs of the Fort

Smith MSA.

The bank‟s overall geographic distribution of loans reflects good penetration throughout the

Fort Smith MSA.



The bank did not make any community development loans within the Fort Smith MSA,

which is reflective of past performance.

The bank makes an adequate level of qualified community development investments and

grants within the Fort Smith MSA.

Service delivery systems are readily accessible to geographies and individuals of different

income levels in the Fort Smith MSA; further, changes in branch locations have not

adversely affected the accessibility of delivery systems, particularly to LMI geographies


Arvest Bank personnel provides a relatively high level of community development services

within the Fort Smith MSA.

14

This rating reflects performance within the multistate MSA. The Arkansas and Oklahoma statewide evaluations

are adjusted and do not reflect performance in the parts of those states contained within the Fort Smith MSA.



35


Arvest Bank has one assessment area in the Fort Smith MSA, which includes the entire

multistate MSA. Arvest Bank‟s performance within the Fort Smith MSA was reviewed using

full-scope examination procedures, and scoping considerations applicable to the review of this

assessment area are consistent with the overall CRA examination scope as presented in the

Institution, Scope of Examination section. However, as the bank had a relatively low volume of

small farm loans in this assessment area, performance based on this loan category received less

weight when making overall lending performance conclusions for this MSA. Finally, this

evaluation included information obtained through four community contact interviews completed

in the Fort Smith MSA, including one completed as part of this review. The community contact

completed as part of this review took place with a community development professional who

specializes in personal wealth management.15

DESCRIPTION OF INSTITUTION’S OPERATIONS IN FORT SMITH MSA

Bank Structure

Arvest Bank operates 17 of its 239 branches (7.1 percent) within the Fort Smith MSA

Assessment Area. Of the 17 branches, three are in moderate-income census tracts, 11 are in

middle-income census tracts, and three are located in upper-income census tracts (there are no

low-income census tracts in the Fort Smith MSA). During this review period, the bank opened

two branches and closed one branch in this assessment area. Based on this branch network and

other service delivery systems, the bank is well positioned to deliver financial services to

substantially all of the Fort Smith MSA Assessment Area.

This assessment area is a competitive banking market with a total of 23 FDIC-insured

institutions operating within the Fort Smith MSA, based on the FDIC Deposit Market Share

Report as of June 30, 2010. Of the 23 financial institutions with an office in the Fort Smith

MSA, Arvest Bank ranked 3rd

with a deposit market share of 11.3 percent. Based on this

information, Arvest Bank deposits held at branches in this assessment area account for 5.2

percent of the bank‟s total deposits.


The Fort Smith MSA is a five-county multistate MSA including three counties in Arkansas and

two counties in Oklahoma. Specifically, the Arkansas portions of the multistate MSA include

Crawford, Franklin, and Sebastian counties. The Oklahoma portion of the multistate MSA

consists of Le Flore and Sequoyah counties. The multistate MSA is located along the western

border of Arkansas and the eastern border of Oklahoma.

15


Operations.



36

Based on 2000 census data, the assessment area had a total population of 273,170. Although a

significant portion of the population is concentrated in Sebastian County (115,071), several other

counties have sizeable populations. Crawford County had a population of 53,247, followed by

Le Flore County at 48,109, Sequoya County at 38,972, and Franklin County at 17,771.

According to U.S. Census Bureau estimates as of July 2009, the population in the Fort Smith

MSA is growing. The total MSA population in 2009 was estimated at 293,063. This marks a

total MSA population increase of approximately 7.3 percent since the 2000 census.





programs (specifically, programs targeting down-payment assistance such as those related to

individual development accounts), homelessness/foreclosure prevention programs, and financial

education. Further, as the Fort Smith MSA is an environment with significant need, coupled

with an ample source of community development intermediaries (such as nonprofit agencies,

higher education institutions, and government assistance entities), there is ample community

development opportunity available for financial institution participation.


The Fort Smith MSA consists of 52 geographies. As of 2009, the HUD estimated median family

income for the Fort Smith MSA was $46,500. The following table summarizes the distribution

of geographies by income level and the family population of those census tracts within the

assessment area.




0.0% 7.7% 76.9% 15.4% 0.0% 100%

Family

Population

0 3,206 62,701 9,548 0 75,455

0.0% 4.2% 83.1% 12.7% 0.0% 100%



37


as family population income characteristics for the states of Arkansas and Oklahoma.



Assessment Area 14,885 13,479 17,310 29,781 75,455

19.7% 17.9% 22.9% 39.5% 100%

Arkansas 148,233 131,570 163,567 292,693 736,063

20.1% 17.9% 22.2% 39.8% 100%

Oklahoma 187,672 168,813 200,838 370,380 927,703

20.2% 18.2% 21.6% 39.9% 100%


Housing costs in the Fort Smith MSA Assessment Area appear to be affordable relative to

comparable state data. The Fort Smith MSA had a housing affordability ratio of 49.0 percent as

of the 2000 census, indicating that housing affordability in the assessment area is similar to the

state of Arkansas (47.0 percent) and the state of Oklahoma (49.0 percent). Of the five MSA

counties, housing is more affordable in Franklin County and Le Flore County (both at 52.0

percent) than Crawford County, Sebastian County, and Sequoyah County (48.0, 47.0, and 48.0

percent, respectively). The median housing value in the assessment area was $63,462, which is

lower than the figures for the state of Arkansas ($67,400) and the state of Oklahoma ($67,700).

Median gross monthly rent in the Fort Smith MSA is also less ($405) than both the state of

Arkansas ($453) and the state of Oklahoma ($456).



38



agricultural entities operating within the Fort Smith MSA. Fort Smith is a major manufacturing

hub in Arkansas. The following table depicts employment levels by industry, comparing the Fort

Smith MSA economy to the state of Arkansas and the state of Oklahoma using the “Location

Quotient” measure.16

Fort Smith MSA - Employment by Industry


Total

LQ -

Arkansas

LQ -

Oklahoma


Construction 4,808 5.0% 0.90 0.85

Manufacturing 21,825 22.7% 1.29 2.06


Information 1,244 1.3% 0.74 0.55


Professional and Business Services 10,508 10.9% 0.90 0.77



Other Services 2,038 2.1% 0.80 0.68

TOTAL 96,087 100% N/A

As displayed in the previous table, the largest industries in the Fort Smith MSA are trade,

transportation, and utilities; manufacturing; and education and health services. The industry mix

is similar to the state of Arkansas, with a greater reliance on natural resources and mining and

manufacturing. The industry mix varies significantly from the state of Oklahoma, most notably

with a greater reliance on manufacturing and less reliance on information-related industry.

The recent annual average unemployment rates for the Fort Smith MSA (4.9 percent in 2008 and

7.9 percent in 2009) were similar to the unemployment rate for the state of Arkansas (5.3 percent

in 2008 and 7.4 percent in 2009), but higher than the state of Oklahoma (3.7 percent in 2008 and

6.6 percent in 2009).17

Similar to the state of Arkansas and the state of Oklahoma,

unemployment in the Fort Smith MSA generally rose in 2010 and was projected to be at 9.2

percent in January 2011—higher than the preliminary figure for the state of Arkansas (8.7

percent) and significantly higher than the state of Oklahoma (6.9 percent).

16





39


The community contacts characterized the Fort Smith MSA population as growing and aging, as

younger entrants to the job market often leave the Fort Smith area in search of better

employment opportunities. Though the Fort Smith MSA has weathered the recent economic

turmoil better than some portions of Arkansas, the community contacts mentioned that the area

has recently seen a sharp increase in the number of foreclosures, yet, affordable housing appears

to be sufficient for current demand.

Contacts noted that despite the current economic situation in which banks are tightening credit

standards, it appears that banks in the area are doing a reasonable job of serving the community‟s

credit needs. In general, local financial institutions are active in many community initiatives,

such as chambers of commerce and housing-related advisory boards. Additionally, the

community contacts noted that many lenders, including Arvest Bank, participate in down

payment assistance programs benefiting home buyers. Overall, community contact information

revealed that the local financial institutions are service-oriented and cater to the needs of the

community.



40

CONCLUSIONS WITH RESPECT TO PERFORMANCE TESTS IN FORT SMITH MSA

LENDING TEST

Arvest Bank‟s Lending Test performance in the Fort Smith MSA is rated low satisfactory.

Lending levels reflect good responsiveness to the Fort Smith MSA Assessment Area credit

needs. The geographic distribution of loans reflects good penetration throughout the assessment

area. The loan distribution by borrower‟s income/revenue profile reflects excellent penetration

among customers of different income levels and businesses/farms of different sizes. However,

the bank‟s continued lack of community development lending activity in this assessment area

negatively impacted the bank‟s overall Lending Test rating.

Lending Activity

The bank‟s lending levels within the Fort Smith MSA reflect good responsiveness to assessment

area credit needs based upon the lending activity analyzed under the Lending Test. This lending



Loan Type # % $(000s) %

Home Improvement 454 24.9% $13,240 9.8%

Home Purchase 71 3.9% $5,227 3.9%


Refinancing 382 20.9% $20,253 15.0%

Total HMDA related 916 50.2% $40,885 30.2%

Small Business 827 45.3% $86,675 64.0%

Small Farm 82 4.5% $7,872 5.8%

TOTAL LOANS 1,825 100% $135,432 100%



41


As noted in the Description of Institution’s Operations in Fort Smith MSA section, this

assessment area has zero low-income census tracts and four moderate-income census tracts,

representing 7.7 percent of all assessment area census tracts. Overall, based on lending activity

from all three loan categories reviewed, the geographic distribution of loans reflects good

penetration throughout the assessment area, including the moderate-income census tracts. The

following table displays the geographic distribution of HMDA loans in comparison to owner-

occupied housing demographics for the assessment area.




Home Purchase 0 17 301 84 0 402

0.0% 4.2% 74.9% 20.9% 0.0% 100%

Refinance 0 17 684 197 0 898

0.0% 1.9% 76.2% 21.9% 0.0% 100%

Home

Improvement

0 3 121 30 0 154

0.0% 1.9% 78.6% 19.5% 0.0% 100%


0.0% 33.3% 66.7% 0.0% 0.0% 100%

TOTAL

LOANS

0 40 1,112 311 0 1,463

0.0% 2.7% 76.0% 21.3% 0.0% 100%

Owner Occupied

Housing 0.0% 3.5% 84.0% 12.5% 0.0% 100%

The analysis of the bank‟s 2009 HMDA-lending activity revealed that lending in moderate-

income census tracts is good. While the bank‟s loan penetration among moderate-income census

tracts (2.7 percent) is below the comparable owner-occupied housing figure (3.5 percent), it is

above that of other lenders, based upon 2009 HMDA aggregate lending performance in

moderate-income census tracts (2.3 percent).



42

Next, the bank‟s geographic distribution of small business loans was reviewed, which is






Small Business

Loans

0 26 239 152 0 417

0.0% 6.2% 57.3% 36.5% 0.0% 100%

Business

Institutions 0.0% 8.7% 75.2% 16.1% 0.0% 100%

While below comparison data levels, the geographic distribution of the bank‟s small business

loans reflects adequate penetration throughout the assessment area, including moderate-income

geographies. The percentage of small business loans in moderate-income tracts (6.2 percent) is

below but within adequate range of the estimated percentage of businesses located in moderate-

income census tracts (8.7 percent) and the 2009 CRA aggregate lending level in moderate-

income census tracts (7.9 percent).



43

Finally, the geographic distribution of small farm loans is displayed in the following table in

comparison to the location of farms throughout the assessment area.




Small Farm

Loans

0 0 30 4 0 34

0.0% 0.0% 88.2% 11.8% 0.0% 100%

Agricultural

Institutions 0.0% 0.9% 92.1% 6.9% 0.0% 100%

As displayed in the preceding table, the bank had a relatively low level of small farm lending in

this assessment area. However, based on the limited loan activity available for review, the

geographic distribution of small farm loans is adequate. While the bank did not make any small

farm loans in moderate-income census tracts, this is not considered poor performance in light of

the very small percentage of farms located in moderate-income census tracts (0.9 percent). The

2009 CRA aggregate lending level in moderate-income census tracts is even smaller (0.4

percent). The strong majority of the bank‟s small farms loans (88.2 percent) was made in

middle-income census tracts, which is in line with the percentage of farms located in middle-

income census tracts (92.1 percent).



44




reported loans by the income level of the borrower in comparison to family population data.




Home Purchase 33 110 111 133 15 402

8.2% 27.4% 27.6% 33.1% 3.7% 100%

Refinance 65 152 194 474 13 898

7.2% 16.9% 21.6% 52.8% 1.4% 100%

Home

Improvement

10 24 31 82 7 154

6.5% 15.6% 20.1% 53.2% 4.5% 100%


0.0% 0.0% 0.0% 0.0% 100.0% 100%

TOTAL

LOANS

108 286 336 689 44 1,463

7.4% 19.5% 23.0% 47.1% 3.0% 100%

Families 19.7% 17.9% 22.9% 39.5% 0.0% 100%

Based on the above table, the bank‟s level of lending to low-income borrowers (7.4 percent) is

lower than the low-income family population (19.7 percent). However, the bank‟s level of

lending is in line with the 2009 HMDA aggregate lending level to low-income borrowers (7.3

percent). Furthermore, the bank‟s HMDA lending to moderate-income borrowers (19.5 percent)

is higher than the percentage of moderate-income borrowers within the assessment area (17.9

percent) and higher than aggregate lending to moderate-income borrowers (17.0 percent).

Therefore, the bank‟s overall level of lending to LMI borrowers is good.



45






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


73.3% 10.7% 7.0% 91.0%

Greater Than $1

Million

20 6 11 37

4.9% 1.5% 2.7% 9.0%

TOTAL 322 50 40 412

78.2% 12.1% 9.7% 100%

The bank‟s level of lending to small businesses within the assessment area is excellent. The

bank originated a substantial majority of its small business loans (91.0 percent) to businesses

with revenues of $1 million or less. The highest concentration of these loans was for loan


available to small businesses. According to Dun & Bradstreet estimates, 88.3 percent of

assessment area businesses had revenues of $1 million or less. In addition, the bank‟s level of

lending to small businesses surpasses the 2009 CRA aggregate lending level of 25.6 percent.

18

This analysis included 417 small business loans; however, five of these loans were removed from the sample




46

Small farm loans were reviewed to determine the bank‟s lending levels to farms of different

sizes. The following table shows the distribution of small farm loans by loan amount and farm

revenue size.



TOTAL <$100 >$100<$250 >$250<$500


73.5% 14.7% 11.8% 100%

Greater Than $1 Million 0 0 0 0

0.0% 0.0% 0.0% 0.0%

TOTAL 25 5 4 34

73.5% 14.7% 11.8% 100%

As previously noted, the bank had a relatively low level of small farm lending in this assessment

area. However, based on the limited loan activity available for review, the distribution of small

farm loans by borrower‟s profile is excellent. All small farm loans made in this assessment area

were originated to farmers with revenues of $1 million or less. The highest concentration of

these loans was in loan amounts of $100,000 or less, which further demonstrates the bank‟s

willingness to make credit available to small farms in the assessment area. According to Dun &

Bradstreet, 97.8 percent of farms in the assessment area reported revenues of $1 million or less.

The bank‟s farm lending is also higher than 2009 CRA aggregate data, which indicates that 82.9

percent of reported small farm loans were to small farms.


Arvest Bank did not make any community development loans in the Fort Smith MSA during this

reviewed period, as was the case for the bank‟s previous two CRA evaluations.



47

INVESTMENT TEST

Overall, Arvest Bank‟s performance under the Investment Test is rated low satisfactory for the

Fort Smith MSA. The bank makes an adequate level of qualified community development

investments and grants, exhibiting adequate responsiveness to credit and community

development needs in the Fort Smith MSA Assessment Area. As of this evaluation date, the

bank had a balance of $1.1 million in qualified investments attributable to this assessment area

($0.3 million in new investments and $0.8 million in previous review period investments still

outstanding), which represents a decrease of $0.4 million (26.7 percent) since the last CRA

evaluation. All of the bank‟s community development investments in the Fort Smith MSA are in

MBS that finance affordable housing. Additionally, Arvest Bank made 60 grants totaling

$236,293 throughout the assessment area during this review period. Among the numerous

qualifying contributions were significant donations to schools serving a majority of LMI

students, affordable housing organizations, and community service organizations that target




48

SERVICE TEST

Arvest Bank‟s Service Test rating in the Fort Smith MSA is high satisfactory. Service delivery

systems are readily accessible to geographies and individuals of different income levels in the

Fort Smith MSA Assessment Area, and the bank‟s record of opening and closing branches has

not adversely affected the accessibility of its delivery systems to LMI geographies and/or LMI

individuals. Business hours and services do not vary in a way that inconveniences LMI

geographies and/or LMI individuals, and bank personnel provides a relatively high level of

community development services in the Fort Smith MSA.


Arvest Bank operates 17 branch facilities within the Fort Smith MSA Assessment Area. The

following table illustrates the distribution of these facilities by income level of the geography, as

compared to key assessment area demographics.




Branches 0 3 11 3 0 17

0.0% 17.6% 64.7% 17.6% 0.0% 100%

Census Tracts 0.0% 7.7% 76.9% 15.4% 0.0% 100%

Household

Population 0.0% 4.8% 82.1% 13.1% 0.0% 100%

Based on the information in the preceding table, Arvest Bank‟s service delivery systems are

readily accessible to the geographies and individuals of different income levels in the Fort Smith

MSA Assessment Area. Of the 17 facilities the bank operates in this assessment area, 17.6

percent are located in moderate-income census tracts, which is above both the percentage of

moderate-income census tracts (7.7 percent) and the percentage of moderate-income households

in the assessment area (4.8 percent).


During the review period, the bank opened two full-service branches in middle-income

geographies and closed one full-service branch in a middle-income geography. Consequently

the bank‟s record of opening and closing branches in the Fort Smith MSA Assessment Area has

not adversely affected the accessibility of its delivery systems, particularly to LMI geographies




49



the Fort Smith MSA Assessment Area. Most branches have Saturday operating hours and offer


Most drive-thru facilities remain open until 6 p.m., Monday through Friday, and are open until






Arvest Bank staff members within the Fort Smith MSA provides a relatively high level of

community development services, as nine bank employees provide financial expertise to four

community development organizations on an ongoing basis. Six employees work with an

organization that provides affordable housing for LMI families, two work with organizations

assisting schools with a majority of LMI students, and one employee works with an organization

assisting low-income students to obtain higher education scholarships.



50

KANSAS CITY MULTISTATE MSA19

CRA RATING FOR KANSAS CITY KANSAS-MISSOURI MSA: SATISFACTORY




Major factors supporting the institution‟s Kansas City Kansas-Missouri MSA (Kansas City


Arvest Bank‟s lending levels reflect adequate responsiveness to the credit needs of the

Kansas City MSA.

The bank‟s overall geographic distribution of loans reflects good penetration throughout the

Kansas City MSA.

The distribution of loans by borrower‟s income/revenue profile reflects good penetration

among borrowers of different income levels and businesses of different sizes.

The bank makes a relatively high level of community development loans within this

assessment area.

The bank makes an adequate level of qualified community development investments and

grants within the Kansas City MSA.

Service delivery systems are reasonably accessible to geographies and individuals of

different income levels in the Kansas City MSA.

19

This rating reflects performance within the multistate MSA. The Missouri and Kansas statewide evaluations are

adjusted and do not reflect performance in the parts of those states contained within the multistate MSA.



51


Arvest Bank has one assessment area in the Kansas City MSA, which includes the entire

multistate MSA. Arvest Bank‟s CRA performance within the Kansas City MSA was reviewed

using full-scope examination procedures, and scoping considerations applicable to the review of

this assessment area are consistent with the overall CRA examination scope as presented in the

Institution, Scope of Examination section. However, as previously noted, the bank entered this

market largely through a 2009 bank acquisition (followed by subsequent acquisition activity),

and banking operations had yet to be fully established during this review period. Consequently,

overall lending volume in the Kansas City MSA was relatively low, and the bank had no small

farm lending activity during the review period. Finally, information obtained through seven

community contact interviews completed in the Kansas City MSA was considered as a part of

this evaluation.20

DESCRIPTION OF INSTITUTION’S OPERATIONS IN KANSAS CITY MSA

Bank Structure

Arvest Bank operates ten of its 239 branches (4.2 percent) within the Kansas City MSA

Assessment Area, all of which were added during this review period (the bank did not close any

branch offices). Of the ten branches, none are located in low-income census tracts, one is in a

moderate-income census tract, three are in middle-income census tracts, and six are located in

upper-income census tracts. Based on the number and location of these branches in relation to

the size of the Kansas City MSA, Arvest Bank is not able to effectively serve all parts of this

assessment area. More specifically, the bank‟s current branch network is centered in the

southern core of the MSA, putting the bank at a competitive disadvantage in the southernmost,

easternmost, and northernmost counties of the MSA.

This assessment area is a highly competitive banking market, with a total of 147 FDIC-insured

institutions operating within the MSA, based on the FDIC Deposit Market Share Report as of

June 30, 2010. Of the 147 financial institutions with an office in the Kansas City MSA, Arvest

Bank ranked 27th

with a deposit market share of 0.9 percent. Based on this information, Arvest

Bank deposits held at branches throughout the Kansas City MSA represent 4.0 percent of the

bank‟s total deposits.

20


Operations.



52


The Kansas City MSA is a 15-county multistate MSA, including six counties in Kansas and nine

counties in Missouri, covering a large portion of the border between Kansas and Missouri. The

Kansas counties in the multistate MSA are Franklin, Johnson, Leavenworth, Linn, Miami, and

Wyandotte. The Missouri portion of the multistate MSA consists of Bates, Caldwell, Cass, Clay,

Clinton, Jackson, Lafayette, Platte, and Ray counties. Based on 2000 census data, the

assessment area had a total population of 1,836,038. A significant portion of the population is

concentrated in Jackson County, Missouri (654,880), and Johnson County, Kansas (451,086).

The remaining eight Missouri counties report populations ranging from 8,969 to 184,006. The

remaining five counties in Kansas have populations ranging from 9,570 to 157,882. The total

MSA population in 2009 was estimated at 2,067,585. This marks a total MSA population

increase of approximately 12.6 percent since the 2000 census.





programs (specifically, subsidized programs aimed at assisting first time homebuyers) and

community development participation, financial and otherwise, aimed at the rehabilitation of

nuisance properties. Further, as the Kansas City MSA is an environment with significant need,

coupled with an ample source of community development intermediaries (such as nonprofit

agencies, higher education institutions, and government assistance entities), there is a high level

of community development opportunity available for financial institution participation.


The Kansas City MSA consists of 516 geographies. As of 2009, the HUD estimated median

family income for the Kansas City MSA was $70,400. The following table summarizes the

distribution of geographies by income level and the family population of those census tracts

within the assessment area.



Census Tracts 46 134 203 121 12 516

8.9% 26.0% 39.3% 23.4% 2.3% 100%

Family

Population

20,107 95,578 229,685 140,599 0 485,969

4.1% 19.7% 47.3% 28.9% 0.0% 100%



53

The following table displays the distribution of families, by income level, that reside in this

assessment area as well as the statewide percentages for Kansas and Missouri.



Assessment

Area

88,857 91,285 114,883 190,944 485,969

18.3% 18.8% 23.6% 39.3% 100%

Kansas 117,432 130,953 171,758 286,643 706,786

16.6% 18.5% 24.3% 40.6% 100%

Missouri 282,730 278,477 345,089 580,250 1,486,546

19.0% 18.7% 23.2% 39.0% 100%


The Kansas City MSA Assessment Area had a housing affordability ratio of 43.0 percent as of

the 2000 census, which indicates significantly less affordability than the state of Kansas overall

(50.0 percent) but similar affordability to the state of Missouri (43.0 percent). Housing

affordability varied significantly by county in the assessment area. The least affordable county

was Miami County, Kansas (40.0 percent), while Wyandotte County, Kansas, was the most

affordable (63.0 percent). The median housing value in the assessment area was $102,876,

which is much higher than the state of Kansas ($81,000) and the state of Missouri ($86,900).

Much like the affordability ratio, the median housing value also varied significantly by county.

The median housing value in Johnson County, Kansas, was $149,300, while the median housing

value in Wyandotte County, Kansas, was only $53,400. Median gross monthly rent in the

Kansas City MSA was also significantly higher at $572 than both the state of Kansas ($498) and

the state of Missouri ($484). Based on this information, housing costs in the Kansas City MSA

appear to be less affordable relative to overall data for the state of Kansas and the state of

Missouri.



54


According to 2009 Dun & Bradstreet data, there were 86,692 business entities and 2,317

agricultural entities operating within the Kansas City MSA. The area‟s largest private employer

is a major international telecommunications company. Numerous other national and international

companies are headquartered in the Kansas City MSA. The following table depicts employment

levels by industry, comparing the Kansas City MSA economy to the state of Kansas and the state

of Missouri using the “Location Quotient” measure. 21

Kansas City MSA - Employment by Industry


Total

LQ -

Kansas

LQ -

Missouri


Construction 42,104 5.3% 0.97 0.97

Manufacturing 73,460 9.3% 0.59 0.79


Information ND ND ND ND


Professional and Business Services ND ND ND ND



Other Services 27,043 3.4% 0.99 0.88

TOTAL 793,348 100% N/A

As displayed in the previous table, the largest industries in the Kansas City MSA are Trade,

transportation, and utilities; and education and health services. The industry mix is similar to

both the state of Kansas and the state of Missouri, with a greater reliance on financial activities

and less reliance on natural resources and mining.

The recent annual average unemployment rates for the Kansas City MSA (5.8 percent in 2008

and 8.6 percent in 2009) were higher than the unemployment rates for the state of Kansas (4.5

percent in 2008 and 7.1 percent in 2009), but less than the state of Missouri (6.1 percent in 2008

and 9.3 percent in 2009).22

While monthly 2010 unemployment rates for the Kansas City MSA

varied above and below the 2009 annual average rate, the projection for January 2011 (9.2

percent) indicates unemployment continues to rise.

21

Source: 2009 Bureau of Labor Statistics, U.S. Department of Labor (ND = “not disclosable”) 22




55


Community contacts noted that there is a need for affordable housing options in the urban areas

of Kansas City, which is further exacerbated by the weak economy and related credit flow

restrictions. Banks are tightening their underwriting standards, making it more difficult to obtain

financing for housing. In addition, the housing market remains slow, and potential

unemployment fears prevent many borrowers from pursuing additional debt. Without subsidized

lending assistance, such as first-time homebuyers programs, the LMI population has limited

options to attain homeownership. Such individuals that are successful are mainly moving out of

the urban core and finding affordable homes in the north and south Kansas City areas, where the

housing stock is in better condition. Even if there is an acceptable affordable house in the urban

core, considerable property risk remains, as related to surrounding lots in need of rehabilitation

(including foreclosures and vacant lots).

Community contacts also stated that local banks appear to be serving the credit needs of the

community, though there is always room for advancement. Besides housing-related credit, small

consumer loans for personal expenses are a credit need in the area. Although banks are limited

on what they can do, more involvement in subsidized lending would help the area. First-time

homebuyers' programs, Title 1 home improvement loans, grant-writing assistance, and other

investments in the area would be beneficial. Lastly, according to community contacts, marketing

efforts made primarily by suburban banks could be improved to better reach LMI individuals

residing in Kansas City‟s urban core.



56

CONCLUSIONS WITH RESPECT TO PERFORMANCE TESTS IN KANSAS CITY

MSA

LENDING TEST

Arvest Bank‟s Lending Test performance in the Kansas City MSA is rated high satisfactory.

Lending levels reflect adequate responsiveness to assessment area credit needs. The geographic

distribution of loans reflects good penetration throughout the assessment area. The loan

distribution by borrower‟s income/revenue profile reflects good penetration among customers of

different income levels and businesses of different sizes. In addition, Arvest Bank makes a

relatively high level of community development loans in the Kansas City MSA Assessment

Area.

Lending Activity

The bank‟s lending levels within the Kansas City MSA reflect adequate responsiveness to

assessment area credit needs based upon the lending activity analyzed under the Lending Test.

This lending activity is displayed by loan type in the following table:


Loan Type # % $(000s) %

Home Improvement 2 1.5% $101 0.2%

Home Purchase 8 6.0% $2,631 4.9%


Refinancing 6 4.5% $247 0.5%


Small Business 116 86.6% $33,875 63.3%

Small Farm 0 0.0% $0 0.0%

TOTAL LOANS 134 100% $53,489 100%

As the bank had not begun operations in the Kansas City MSA market until the end of 2009, the

lending activity in the table above is reflective of this minimal bank presence during the review

period. Consequently, these figures are significantly lower than the bank‟s lending levels in

other assessment areas. However, in light of the performance context as related to the timing of

the bank‟s entry into this market, the bank‟s lending activity levels are adequate.



57


As noted in the Description of Institution’s Operations in Kansas City MSA section, this

assessment area has 46 low-income census tracts and 134 moderate-income census tracts,


from both loan categories reviewed, the geographic distribution of loans reflects good

penetration throughout the assessment area, including the LMI tracts. The following table

displays the geographic distribution of HMDA loans in comparison to owner-occupied housing

demographics for the assessment area.




Home Purchase 0 2 3 7 0 12

0.0% 16.7% 25.0% 58.3% 0.0% 100%

Refinance 0 2 5 6 0 13

0.0% 15.4% 38.5% 46.2% 0.0% 100%

Home

Improvement

0 0 0 1 0 1

0.0% 0.0% 0.0% 100.0% 0.0% 100%


0.0% 0.0% 0.0% 100.0% 0.0% 100%

TOTAL

LOANS

0 4 8 16 0 28

0.0% 14.3% 28.6% 57.1% 0.0% 100%

Owner Occupied

Housing 2.9% 18.1% 47.9% 31.1% 0.0% 100%

As displayed in the preceding table, the bank had a low level of HMDA-lending activity in this

assessment area, which does not provide for a meaningful analysis. However, based on the

limited activity available for review, the bank‟s geographic distribution of loans is adequate.

While the bank did not make any loans in low-income census tracts, there is a relatively small

percentage of owner-occupied homes in low-income census tracts (2.9 percent). Further, 2009

HMDA aggregate lending data indicate other lenders made less than one percent of HMDA loans

in low-income census tracts. Bank lending in moderate-income census tracts (14.3 percent) is

good. While below the percentage of owner-occupied housing in moderate-income census tracts

(18.1 percent), the bank‟s percentage of loans in moderate-income census tracts is significantly

higher than other lenders based on the 2009 HMDA aggregate percentage (8.3 percent).



58







Small Business

Loans

5 17 21 50 0 93

5.4% 18.3% 22.6% 53.8% 0.0% 100%

Business

Institutions 3.6% 17.5% 44.2% 33.9% 0.8% 100%

The analysis of small business loans reflects excellent penetration throughout the assessment

area. The bank‟s lending levels in each LMI census tract category exceeded both the percentage

of businesses in LMI census tracts and the performance of other lenders. Based on 2009 CRA

aggregate data, 2.5 percent of reported small business loans were made in low-income tracts and

15.8 percent were made in moderate-income tracts.

As noted previously, the bank did not originate any small farm loans in this assessment area

during the review period. Consequently, a geographic distribution analysis of small farm loans

was not completed.



59


Overall, the bank‟s loan distribution by borrower‟s profile is good, based on performance from

both loan categories reviewed. The following table shows the distribution of HMDA reported

loans by the income level of the borrower in comparison to family population data.





16.7% 16.7% 8.3% 50.0% 8.3% 100%


15.4% 23.1% 23.1% 38.5% 0.0% 100%

Home

Improvement

0 0 1 0 0 1

0.0% 0.0% 100.0% 0.0% 0.0% 100%

Multi-Family

Loans

0 0 0 0 2 2

0.0% 0.0% 0.0% 0.0% 100.0% 100%

HMDA

TOTAL

4 5 5 11 3 28

14.3% 17.9% 17.9% 39.3% 10.7% 100%

Families 18.3% 18.8% 23.6% 39.3% 0.0% 100%

The bank‟s level of lending to LMI borrowers within the assessment area is good. Based on the

above table, the bank‟s level of lending to low-income borrowers (14.3 percent) is lower than the

low-income family population (18.3 percent). However, the bank‟s level of lending is much

higher than the 2009 HMDA aggregate lending level to low-income borrowers (8.0 percent).

Furthermore, the bank‟s HMDA lending to moderate-income borrowers (17.9 percent) is similar

to the percentage of moderate-income borrowers within the assessment area (18.8 percent) and

aggregate lending to moderate-income borrowers (17.7 percent).



60



amount and business revenue size.



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


29.0% 14.0% 17.2% 60.2%

Greater Than $1

Million

11 8 18 37

11.8% 8.6% 19.4% 39.8%

TOTAL 38 21 34 93

40.9% 22.6% 36.6% 100%

The bank originated a majority of its small business loans (60.2 percent) to businesses with

revenues of $1 million or less, which is less than the Dun & Bradstreet estimate of small

businesses in the assessment area (87.6 percent) but above the 2009 CRA aggregate lending level

to small businesses (22.4 percent). Therefore, the bank‟s level of lending to small businesses is

adequate.

As noted previously, the bank did not originate any small farm loans in this assessment area

during this review period. Consequently, a borrower‟s profile analysis using small farm loans

was not completed.


Despite being in the Kansas City market for only a portion of the evaluation period, Arvest Bank

made a relatively high level of community development loans. The bank originated two

community development loans totaling $23.5 million within this assessment area. Both loans

were to help build senior living facilities in conjunction with NMTCs.



61

INVESTMENT TEST

Overall, Arvest Bank‟s performance under the Investment Test is rated low satisfactory for the

Kansas City MSA. The bank made an adequate level of qualified community development

investments and grants, exhibiting adequate responsiveness to credit and community

development needs in the Kansas City MSA Assessment Area. As of this evaluation date, the

bank had a balance of $0.6 million in qualified investments attributable to this assessment area

(all of these investments were made in a previous review period, still outstanding). All of the

bank‟s community development investments in the Kansas City MSA are in MBS that finance

affordable housing. Additionally, Arvest Bank made 17 qualified grants totaling $83,440

throughout the assessment area during this review period. Among the contributions were

significant donations to affordable housing organizations, food banks, and community service

organizations that target children from LMI families.



62

SERVICE TEST

Arvest Bank‟s Service Test performance in the Kansas City MSA is rated low satisfactory.

Service delivery systems are reasonably accessible to geographies and individuals of different

income levels in the Kansas City MSA Assessment Area, and business hours and services do not

vary in a way that inconveniences LMI geographies and/or LMI individuals. However, Arvest

Bank did not provide any community development services in the Kansas City MSA Assessment

Area.


Arvest Bank operates ten branch facilities within the Kansas City MSA Assessment Area. The

following table illustrates the distribution of these branches by income level of the geography, as

compared to key assessment area demographics:




Branches 0 1 3 6 0 10

0.0% 10.0% 30.0% 60.0% 0.0% 100%

Census Tracts 8.9% 26.0% 39.3% 23.4% 2.3% 100%

Household

Population 4.6% 22.1% 47.5% 25.8% 0.0% 100%

As illustrated in the above table, Arvest Bank‟s branches in LMI census tracts represent 10.0

percent of all branches in the Kansas City MSA Assessment Area, which is less than LMI

demographic figures. However, the bank has only recently entered the Kansas City MSA market

through bank acquisition activity. Therefore, based on the performance context relating to the

bank‟s limited opportunity to fully mature a branch distribution strategy, the bank‟s delivery

systems are reasonably accessible to the geographies and individuals of different income levels

in the Kansas City MSA Assessment Area.


As mentioned previously, the Kansas City MSA is a new assessment area for the bank, and all

ten bank branches were added during this review period. Therefore, this performance criterion is

not applicable to the bank‟s evaluation for this review period.



63



the Kansas City MSA Assessment Area. Most branches have Saturday operating hours and offer








Arvest Bank did not provide any community development services within the Kansas City MSA

Assessment Area during the review period.



64

ARKANSAS23

CRA RATING FOR ARKANSAS: SATISFACTORY


The Investment Test is rated: High Satisfactory


Major factors supporting the institution‟s CRA rating for Arkansas include the following:

Arvest Bank‟s lending levels reflect good responsiveness to the credit needs of its Arkansas

assessment areas.

The bank‟s overall geographic distribution of the loans reflects adequate penetration

throughout the Arkansas assessment areas.



The bank makes a relatively high level of community development loans in Arkansas.

Arvest Bank makes a significant level of qualified community development investments and

grants throughout the Arkansas assessment areas.


different income levels in Arkansas assessment areas; further, changes in branch locations

have not adversely affected the accessibility of delivery systems, particularly to LMI


Arvest Bank personnel provides a limited level of community development services in

Arkansas assessment areas.

23

The bank has branches located in Arkansas that are also part of the Fayetteville-Springdale-Rogers multistate MSA

and the Fort Smith multistate MSA. Consequently, this statewide evaluation is adjusted so as not to reflect

performance in the parts of Arkansas contained within a multistate MSA. Refer to the multistate MSA sections of

this report for the ratings and related evaluations of the institution‟s performance in those areas.



65


Arvest Bank has three separate assessment areas within the state of Arkansas. The bank‟s

performance within two of these assessment areas was reviewed using full-scope CRA

examination procedures, and scoping considerations applicable to the review of the Arkansas

assessment areas are consistent with the overall CRA examination scope as presented in the

Institution, Scope of Examination section. Arvest Bank‟s ratings in the state of Arkansas are

largely based upon performance in the assessment areas reviewed under full-scope CRA

examination procedures; further, in light of the bank‟s branch structure, loan and deposit activity,

and supervisory history, performance in the two full-scope review assessment areas were given

near equal weighting.

To augment the evaluations of full-scope review assessment areas in Arkansas, one community

contact interview was conducted (and five community contacts, previously completed as part of

separate supervisory events, were referenced) in order to ascertain specific community credit

needs, community development opportunities, and local market conditions.24

The community

contact completed as part of this review was with an economic development specialist in

nonMSA Arkansas.

DESCRIPTION OF INSTITUTION’S OPERATIONS IN ARKANSAS

The bank operates 48 branches (20.1 percent of total branches) throughout the three CRA

assessment areas in the state of Arkansas. The following table gives additional detail regarding

the bank‟s operations within Arkansas.

Assessment Area Offices # Offices % Deposits

25

($000s) Deposits %

CRA Review

Procedures

Little Rock MSA 24 50.0% $781,555 57.1% Full Scope

NonMSA Arkansas 21 43.8% $517,836 37.8% Full Scope

Hot Springs MSA 3 6.3% $69,280 5.1% Limited Scope

STATE TOTAL 48 100% $1,368,671 100% N/A

As displayed in the table above, the bank‟s deposits in Arkansas total $1.4 billion, which equates

to 14.8 percent of total bank deposits. Further, the vast majority of these Arkansas deposits and

branch resources are attributable to the full-scope review assessment areas.

24

Key details from these community contact interviews are included in the Description of Institution’s Operations

sections, as applicable to the Arkansas assessment areas in which the community contacts were made. 25

Source: Federal Deposit Insurance Corporation “Deposit Market Share Report” as of June 30, 2010



66

CONCLUSIONS WITH RESPECT TO PERFORMANCE TESTS IN ARKANSAS

LENDING TEST

Arvest Bank‟s Lending Test performance in the state of Arkansas is rated high satisfactory.

Lending levels reflect good responsiveness to Arkansas assessment area credit needs. The

bank‟s overall geographic distribution of loans reflects adequate penetration throughout

Arkansas assessment areas. Further, the overall distribution of loans by borrower‟s

income/revenue profile reflects excellent penetration among customers of different income levels

and businesses/farms of different sizes. Finally, Arvest Bank makes a relatively high level of

community development loans within Arkansas assessment areas.

Lending Activity

The bank‟s lending levels in the state of Arkansas reflect good responsiveness to assessment area

credit needs, based upon the lending activity analyzed under the Lending Test. This lending



Loan Type # % $(000s) %

Home Improvement 1,144 49.8% 40,252 31.4%

Home Purchase 155 6.7% 14,544 11.3%

Multi-Family Housing 22 1.0% 18,646 14.5%

Refinancing 978 42.5% 54,880 42.8%

Total HMDA related 2,299 39.8% 128,322 28.0%

Small Business 2,793 48.3% 294,086 64.1%

Small Farm 687 11.9% 36,538 8.0%

TOTAL LOANS 5,779 100% $458,946 100%



67


As displayed in the following tables, the bank‟s overall geographic distribution of loans reflects

adequate penetration throughout the bank‟s Arkansas assessment areas.

Assessment Area (full-scope review) Geographic Distribution of Loans

Little Rock MSA Good

Arkansas NonMSA Adequate

Assessment Area (limited-scope review) Geographic Distribution of Loans

Hot Springs MSA Consistent

Performance in the Little Rock MSA and nonMSA Arkansas assessment areas were given

similar weight in developing overall conclusions. However, in light of marginally adequate

performance in the Arkansas nonMSA Assessment Area, and the fact that the majority of loans

in this analysis are attributable to the Arkansas nonMSA Assessment Area, the bank‟s overall

geographic distribution of loans performance is adequate.

Arvest Bank‟s overall loan distribution by borrower‟s profile reflects excellent performance in

Arkansas assessment areas, as displayed in the following tables.

Assessment Area (full-scope review) Loan Distribution by Borrower’s Profile

Little Rock MSA Excellent

Arkansas NonMSA Excellent

Assessment Area (limited-scope review) Loan Distribution by Borrower’s Profile




68


Arvest Bank makes a relatively high level of community development loans within the state of

Arkansas. The following table displays community development lending performance in the

bank‟s three Arkansas assessment areas.

Assessment Area (full-scope review) Community Development Lending

Little Rock MSA Leader

Arkansas NonMSA Low Level

Assessment Area (limited-scope review) Community Development Lending

Hot Springs MSA Below

Arvest Bank‟s performance in the Little Rock MSA and nonMSA Arkansas assessments areas

was weighted nearly equally in order to develop overall conclusions. However, in light of the

particularly strong community development loan performance in the Little Rock MSA

Assessment Area, paired with the increased significance and opportunity for community

development loan activity in the Little Rock MSA Assessment Area, the bank‟s overall level of

community development lending in the state of Arkansas is relatively high. The bank made four

community development loans totaling $22.6 million in Arkansas assessment areas (three of

these four loans are attributable to the Little Rock MSA Assessment Area).



69

INVESTMENT TEST

For the state of Arkansas, Arvest Bank‟s performance under the Investment Test is rated high

satisfactory. The following tables display investment and grant activity performance for the

Arkansas assessment areas.

Assessment Area (full-scope review) Investment and Grant Activity

Little Rock MSA Significant

Arkansas NonMSA Adequate

Assessment Area (limited-scope review) Investment and Grant Activity


Arvest Bank‟s performance in the Little Rock MSA and nonMSA Arkansas assessments areas

was weighted nearly equally in order to develop overall conclusions. However, in light of the

increased significance and opportunity for community development investment activity in the

Little Rock MSA Assessment Area, the bank‟s overall level of community development

investment/grant activity in the state of Arkansas is significant. Community development

investments in Arkansas assessment areas totaled $4.8 million, all of which were made in MBS

($2.4 million in new investments and $2.4 million in previous review period investments still

outstanding). The bank also made community development grants totaling $404,427 in Arkansas

Assessment areas.



70

SERVICE TEST

Overall, Arvest Bank‟s performance in Arkansas is rated low satisfactory under the Service Test.

The bank‟s delivery systems are reasonably accessible to geographies and individuals of

different income levels in Arkansas assessment areas. In addition, the bank‟s record of opening

and closing branches has not adversely affected the accessibility of its delivery systems,

particularly to LMI geographies and/or LMI individuals. Business hours and services in

Arkansas do not vary in a way that inconveniences portions of Arkansas assessment areas,

particularly LMI geographies and/or LMI individuals. Lastly, Arvest Bank provides a limited

level of community development services within its Arkansas assessment areas.


As displayed in the following tables, the bank‟s delivery systems in Arkansas assessment areas

are reasonably accessible to geographies and individuals of different income levels.

Assessment Area (full-scope review) Accessibility of Delivery Systems

Little Rock MSA Reasonably Accessible

Arkansas NonMSA Reasonably Accessible

Assessment Area (limited-scope review) Accessibility of Delivery Systems




71


Arvest Bank‟s record of opening and closing branches in its three Arkansas assessment areas has


and/or LMI individuals. The bank‟s performance under this Service Test criterion is displayed

by Arkansas assessment areas in the following tables.

Assessment Area (full-scope review) Changes in Branch Locations

Little Rock MSA Not Adversely Affected

Arkansas NonMSA Not Adversely Affected

Assessment Area (limited-scope review) Changes in Branch Locations



Overall, banking services and business hours do not vary in a way that inconveniences certain

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

individuals. The bank‟s performance under this Service Test criterion is displayed by Arkansas

assessment area in the following tables.

Assessment Area (full-scope review) Reasonableness of Business Hours and

Services

Little Rock MSA Do Not Vary / Inconvenience

Arkansas NonMSA Do Not Vary / Inconvenience

Assessment Area (limited-scope review) Reasonableness of Business Hours and

Services




72


Arvest Bank provides a limited level of community development services across its Arkansas

assessment areas. The bank‟s performance under this Service Test criterion is displayed by

Arkansas assessment area in the following tables.

Assessment Area (full-scope review) Community Development Services

Little Rock MSA Limited Level

Arkansas NonMSA Adequate Level

Assessment Area (limited-scope review) Community Development Services


Arvest Bank performance in the Little Rock MSA and nonMSA Arkansas assessments areas was

weighted nearly equally in order to develop overall conclusions. However, in light of the

increased significance and opportunity for community development service activity in the Little

Rock MSA Assessment Area, the bank‟s overall level of community development services in the

state of Arkansas is limited.



73

LITTLE ROCK-NORTH LITTLE ROCK-CONWAY,

ARKANSAS MSA (Full-Scope Review)

DESCRIPTION OF INSTITUTION’S OPERATIONS IN LITTLE ROCK-NORTH

LITTLE ROCK-CONWAY, ARKANSAS MSA

Bank Structure

The bank has designated the entire Little Rock-North Little Rock-Conway, Arkansas MSA

(Little Rock MSA) as an assessment area, within which the bank operates 24 of its 239 branches

(10.0 percent). Of the 24 branches, one is located in a low-income census tract, three are in

moderate-income census tracts, 13 are in middle-income census tracts, and seven are located in

upper-income census tracts. During this review period, the bank opened two branches and did

not close any facilities in this assessment. Based on this branch network and other service

delivery systems, the bank is adequately positioned to deliver financial services to substantially

all of the Little Rock MSA Assessment Area.

This assessment area is a competitive banking market, with a total of 37 FDIC-insured

institutions operating within the MSA, based on the FDIC Deposit Market Share Report as of

June 30, 2010. Of those 37 financial institutions, the bank is ranked 7th

with a deposit market

share of 5.8 percent. The deposits held at branches throughout the Little Rock MSA represent

8.4 percent of all Arvest Bank deposits.


The Little Rock MSA is a six-county area in central Arkansas anchored by the state‟s capitol and

largest city, Little Rock. The six counties comprising the MSA are Faulkner, Grant, Lonoke,

Perry, Pulaski, and Saline. Based on 2000 census data, the assessment area had a total

population of 610,518. The majority of the population lives in Pulaski County (361,474). The

remaining counties range in population from 10,209 to 86,014. According to U.S. Census

Bureau estimates as of July 2009, the population in the Little Rock MSA has grown to 685,488.

This marks a total population increase of approximately 12.3 percent since the 2000 census.





programs and community development related to affordable rental housing. Further, as the Little

Rock MSA is an environment with significant need, coupled with a strong source of community

development intermediaries (such as nonprofit agencies, higher education institutions, and

government assistance entities), there is a high level of community development opportunity

available for financial institution participation.



74


The MSA consists of 147 geographies. Based on the 2000 census, the median family income for

the Little Rock MSA was $46,411, which was greater than the state of Arkansas at $38,663. As

of 2009, the HUD estimated median family income for the Little Rock MSA was $60,700. The

following table summarizes the distribution of geographies by income level and the family

population of those census tracts within the assessment area.




4.8% 23.1% 53.1% 19.0% 0.0% 100%

Family

Population

3,789 30,200 89,974 42,429 0 166,392

2.3% 18.1% 54.1% 25.5% 0.0% 100%


as the income distribution of all Arkansas families.



Assessment

Area

32,824 30,091 37,372 66,105 166,392

19.7% 18.1% 22.5% 39.7% 100%

Arkansas 148,233 131,570 163,567 292,693 736,063

20.1% 17.9% 22.2% 39.8% 100%


While income levels in the assessment area are relatively higher than income levels for the state

of Arkansas overall, higher housing costs in the Little Rock MSA keep overall housing

affordability in the assessment area on par with that of the state. The Little Rock MSA

Assessment Area housing affordability ratio (47.0 percent) was the same as the state of Arkansas

figure. Of the six MSA counties, buying a home is most affordable in Grant County (61.0

percent) and least affordable in Pulaski County (46.0 percent). The median housing value in the

assessment area was $80,792, which is much higher than the state of Arkansas at $67,400.

Median monthly gross rent in the Little Rock MSA is also higher ($528) than the state of

Arkansas ($453).



75



agricultural entities operating within the Little Rock MSA. The following table depicts

employment levels by industry, comparing the Little Rock MSA economy to the state of

Arkansas using the “Location Quotient”26

measure.

Little Rock MSA - Employment by Industry

Industry Employment % of Total LQ -

Arkansas

Natural Resources and Mining 2,428 1.0% 0.43

Construction 14,351 5.7% 1.02

Manufacturing 22,241 8.8% 0.50

Trade, Transportation, and Utilities 61,849 24.5% 0.98

Information ND ND ND

Financial Activities 18,459 7.3% 1.38

Professional and Business Services 39,059 15.5% 1.27

Education and Health Services 47,866 19.0% 1.11

Leisure and Hospitality 29,331 11.6% 1.08

Other Services ND ND ND

TOTAL 252,443 100% N/A

As displayed in the previous table, the largest industries in the Little Rock MSA are trade,

transportation, and utilities; education and health services; and professional and business

services. The industry mix is similar to the state of Arkansas, with a greater reliance on financial

activities and less reliance on natural resources and mining.

The recent annual average unemployment rates for the Little Rock MSA (4.5 percent in 2008 and

6.2 percent in 2009) were lower than rates for the state of Arkansas (5.3 percent in 2008 and 7.4

percent in 2009).27

Similar to the state of Arkansas, the unemployment level in the Little Rock

MSA continued to rise in 2010 and was projected to be at 7.4 percent in January 2011, an

increase of 1.2 percent from the 2009 annual average; the state of Arkansas was projected to

have an unemployment rate of 8.7 percent in January 2011.

26





76


Community contacts indicated that the Little Rock MSA has a low cost of living with generally

affordable housing. Furthermore, the Little Rock MSA has the highest per capita income in the

state of Arkansas. However, community contacts stressed the need for more affordable rental

housing.

Additionally, contacts noted that banks in the Little Rock area provide stability with their

willingness to lend and involvement in their respective communities. Still, more progress is

needed, which has been hampered by the sluggish economy and the related elimination of most

federally-subsidized loan products geared towards low-income individuals. Consequently,

assistance is needed from local financial institutions to fill the void left by the reduction of

federal government subsidies.



77

CONCLUSIONS WITH RESPECT TO PERFORMANCE TESTS IN LITTLE ROCK-

NORTH LITTLE ROCK-CONWAY, ARKANSAS MSA

LENDING TEST

Lending levels reflect adequate responsiveness to the Little Rock MSA Assessment Area credit

needs. The bank‟s overall geographic distribution of loans reflects good penetration throughout

the assessment area. Further, the overall distribution of loans by borrower‟s income/revenue

profile reflects excellent penetration among customers of different income levels and

businesses/farms of different sizes. Lastly under the Lending Test, Arvest Bank is a leader in

making community development loans within the Little Rock MSA Assessment Area.

Lending Activity

The bank‟s lending levels within the Little Rock MSA reflect adequate responsiveness to

assessment area credit needs based upon the lending activity analyzed under the Lending Test.

This lending activity is displayed by loan type in the following table.


Loan Type # % $(000s) %


Home Purchase 69 3.3% $7,234 3.6%


Refinancing 384 18.5% $21,132 10.4%


Small Business 931 44.9% $138,377 68.2%

Small Farm 26 1.3% $3,047 1.5%

TOTAL LOANS 2,073 100% $202,852 100%



78


As noted in the Description of Institution’s Operations in Little Rock MSA section, this

assessment area includes seven low-income census tracts and 34 moderate-income census tracts,


from all three loan categories reviewed, the bank‟s geographic distribution of loans reflects good

penetration throughout this assessment area, including the 41 LMI census tracts. The following

table displays the geographic distribution of HMDA loans in comparison to owner-occupied

housing demographics for the assessment area.




Home Purchase 3 28 262 213 0 506

0.6% 5.5% 51.8% 42.1% 0.0% 100%

Refinance 6 43 427 302 0 778

0.8% 5.5% 54.9% 38.8% 0.0% 100%

Home

Improvement

1 26 131 90 0 248

0.4% 10.5% 52.8% 36.3% 0.0% 100%


25.0% 25.0% 50.0% 0.0% 0.0% 100%

TOTAL

LOANS

11 98 822 605 0 1,536

0.7% 6.4% 53.5% 39.4% 0.0% 100%

Owner Occupied

Housing 1.5% 15.0% 55.4% 28.2% 0.0% 100%

Based on the information in the preceding table, the bank‟s lending performance in low-income

geographies is adequate. Total HMDA lending in low-income census tracts (0.7 percent) is

lower than the owner-occupied housing percentage (1.5 percent) but slightly above the 2009

HMDA aggregate lending percentage in low-income census tracts (0.6 percent). Bank lending in

moderate-income census tracts is also adequate. While the bank‟s lending in moderate-income

tracts (6.4 percent) is below the owner-occupied percentage (15.0 percent), it is slightly above

the 2009 HMDA aggregate performance in moderate-income census tracts (6.2 percent).

Therefore, the bank‟s overall geographic distribution of HMDA loans is adequate.



79







Small Business

Loans

45 89 238 205 0 577

7.8% 15.4% 41.2% 35.5% 0.0% 100%

Business

Institutions 5.3% 17.5% 51.3% 26.0% 0.0% 100%

The bank‟s percentage of small business loans in low-income census tracts (7.8 percent) reflects

excellent performance, as it is greater than both the estimated percentage of businesses within

low-income census tracts (5.3 percent) and the 2009 CRA aggregate lending percentage (4.6

percent). The bank‟s performance in moderate-income tracts is considered good. Lending in

moderate-income tracts (15.4 percent) is substantially similar to both the estimated percentage of

businesses located in moderate-income census tracts (17.5 percent) and the CRA aggregate

lending percentage in moderate-income census tracts (15.9 percent). Therefore, the bank‟s

overall geographic distribution of small business loans reflects excellent penetration throughout

the assessment area.



80






Small Farm

Loans

0 12 2 2 0 16

0.0% 75.0% 12.5% 12.5% 0.0% 100%

Agricultural

Institutions 1.2% 17.7% 62.8% 18.2% 0.0% 100%


this assessment area. However, based on the limited loan activity available for review, the

geographic distribution of small farm loans is good. While the bank did not make any small

farm loans in low-income tracts, this is not considered poor performance in light of very small

percentage of farms located in low-income census tracts (1.2 percent). Furthermore, the 2009

CRA aggregate levels in low-income census tracts (1.0 percent) is even smaller. The bank‟s

percentage of small farm loans in moderate-income census tracts (75.0 percent) reflects excellent

performance, as it is significantly higher than both the estimated percentage of farms with in

moderate-income geographies (17.7 percent) and the CRA aggregate lending percentage in

moderate-income census tracts (12.9 percent).



81




loans by the income level of the borrower in comparison to family population demographics.




Home Purchase 64 143 148 142 9 506

12.6% 28.3% 29.2% 28.1% 1.8% 100%

Refinance 45 168 184 364 17 778

5.8% 21.6% 23.7% 46.8% 2.2% 100%

Home

Improvement

24 45 63 112 4 248

9.7% 18.1% 25.4% 45.2% 1.6% 100%


0.0% 0.0% 0.0% 0.0% 100.0% 100%

TOTAL

LOANS

133 356 395 618 34 1,536

8.7% 23.2% 25.7% 40.2% 2.2% 100%

Families 19.7% 18.1% 22.5% 39.7% 0.0% 100%

As indicated in the preceding table, the bank‟s level of lending to low-income borrowers (8.7

percent) is lower than the low-income family population percentage (19.7 percent). However,

the bank‟s level of lending is higher than the aggregate lending level to low-income borrowers

(7.2 percent), reflecting good performance. Furthermore, the bank‟s lending level to moderate-

income borrowers (23.2 percent) is excellent, as it is higher than both the percentage of

moderate-income borrowers within the assessment area (18.1 percent) and the aggregate lending

level to moderate-income borrowers (17.7 percent). Accordingly, the bank‟s overall level of

lending to LMI borrowers is excellent.



82






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


68.1% 13.3% 9.6% 90.9%

Greater Than $1

Million

18 14 20 52

3.1% 2.4% 3.5% 9.1%

TOTAL 408 90 75 573

71.2% 15.7% 13.1% 100%


with gross annual revenues of $1 million or less. The highest concentration of these loans is for

loan amounts of $100,000 or less, which further demonstrates the bank‟s willingness to make

credit available to small businesses in the assessment area. According to Dun & Bradstreet

estimates, 89.0 percent of assessment area businesses had revenues of $1 million or less. In

addition, the bank‟s level of lending to small businesses surpasses the 2009 CRA aggregate

lending level of 21.9 percent. Based on this information, the bank‟s level of lending to small

businesses is excellent.

28

This analysis included 577 small business loans; however, four of these loans were removed from the sample




83

Small farm lending performance was analyzed to determine the bank‟s lending levels to farms of





TOTAL <$100 >$100<$250 >$250<$500


75.0% 12.5% 12.5% 100%

Greater Than $1

Million

0 0 0 0

0.0% 0.0% 0.0% 0.0%

TOTAL 12 2 2 16

75.0% 12.5% 12.5% 100%

As displayed in the preceding table, the bank had a relatively low level of small farm loan

activity in this assessment area. However, based on the limited loan activity available for

review, the distribution of small farm loans by borrower‟s profile is excellent. All of the bank‟s

small farm loans were made to farmers with revenues of $1 million dollars or less. Additionally,

the strong majority of these loans were in amounts of $100,000 or less, which further

demonstrates the bank‟s willingness to make credit available to small farms. According to 2009

Dun & Bradstreet estimates, 96.5 percent of farms in the assessment area reported revenues of $1

million or less. Furthermore, the bank‟s small farm lending performance is significantly higher

than the 2009 CRA aggregate level of lending to small farms, 72.3 percent.


Arvest Bank continues to be a leader in making community development loans in the Little Rock

MSA assessment area. The bank originated or renewed three community development loans

totaling $22.5 million within this assessment area since the previous evaluation. Two of the

loans financed construction or renovation projects providing affordable housing to LMI

individuals. The remaining loan was for a project to revitalize a low-income census tract.



84

INVESTMENT TEST

The bank made a significant level of qualified community development investments and grants,

exhibiting good responsiveness to credit and community development needs in the Little Rock

MSA Assessment Area. As of this evaluation date, the bank had a balance of $3.8 million in

qualified investments attributable to this assessment area, which represents a decrease of $1.1

million (22.4 percent) since the last CRA evaluation. All of the bank‟s qualified investments are

in MBS that finance affordable housing ($2.4 million in new investments and $1.4 million in

previous review period investments still outstanding). Additionally, Arvest Bank made a

significant level of community development grants within the Little Rock MSA. The bank made

76 grants and donations totaling $190,061 during this review period. Among these numerous

grants were significant donations to affordable housing organizations, food banks, and

community service organizations that target children from LMI families.



85

SERVICE TEST

Arvest Bank‟s service delivery systems are reasonably accessible to the geographies and

individuals of different income levels in this assessment area. The bank‟s record of opening and

closing branches has not adversely affected the accessibility of its delivery systems, particularly

to LMI geographies and/or LMI individuals. Business hours and retail services do not vary in a

way that inconveniences LMI geographies and/or individuals. Finally under the Service Test,

Arvest Bank personnel provides a limited level of community development services within this

assessment area.


Arvest Bank operates 24 branch facilities within the Little Rock MSA Assessment Area. The

following table illustrates the distribution of these facilities by income level of geography, as





Branches 1 3 13 7 0 24

4.2% 12.5% 54.2% 29.2% 0.0% 100%

Census Tracts 4.8% 23.1% 53.1% 19.0% 0.0% 100%

Household

Population 2.9% 18.6% 53.2% 25.2% 0.0% 100%

As illustrated in the above table, Arvest Bank‟s branches in LMI census tracts represent 16.7

percent of all branches in the Little Rock MSA Assessment Area. The dispersion of service

delivery systems in low-income census tracts (4.2 percent) is comparable to the percentage of

low-income census tracts (4.8 percent) and greater than the household population percentages in

these tracts (2.9 percent). While, the dispersion of branches in moderate-income tracts (12.5

percent) is less than the percentage of moderate-income geographies (23.1 percent) and

households (18.6 percent), branch dispersion in moderate-income areas is still reasonable.

Therefore, overall service delivery systems are reasonably accessible to geographies and

individuals of different income levels in the assessment area.


The bank‟s record of opening and closing branches has not adversely affected the accessibility of

its delivery systems, particularly in LMI geographies and/or to LMI individuals. During the

review period, the bank opened two branches in the Little Rock MSA. One branch was opened

in a middle-income census tract, and one was opened in an upper-income census tract.



86



the Little Rock MSA Assessment Area. Most branches have Saturday operating hours and offer








Arvest Bank staff members provided a limited level of community development services within

the Little Rock MSA Assessment Area. One bank employee provided financial expertise to a

community service organization assisting the homeless in the Little Rock area.



87

HOT SPRINGS, ARKANSAS MSA (Limited-Scope Review)

DESCRIPTION OF INSTITUTION’S OPERATIONS IN HOT SPRINGS, ARKANSAS

MSA

This assessment area includes the entire Hot Springs, Arkansas MSA, which is comprised of

Garland County. Arvest Bank operates three branch offices in this assessment area. The tables

below detail key demographics relating to this assessment area.




0.0% 31.6% 57.9% 10.5% 0.0% 100%

Family

Population

0 4,475 17,456 3,465 0 25,396

0.0% 17.6% 68.7% 13.6% 0.0% 100%

Household

Population

0 8,415 24,565 4,816 0 37,796

0.0% 22.3% 65.0% 12.7% 0.0% 100%

Business

Institutions

0 1,342 2,911 620 0 4,873

0.0% 27.5% 59.7% 12.7% 0.0% 100%

Agricultural

Institutions

0 5 51 4 0 60

0.0% 8.3% 85.0% 6.7% 0.0% 100%

Assessment Area Demographics by Population Income Level

Demographic Type Population Income Classification

TOTAL Low- Moderate- Middle- Upper-

Family Population 4,830 4,587 5,857 10,122 25,396

19.0% 18.1% 23.1% 39.9% 100%

Household Population 8,444 6,545 7,382 15,425 37,796

22.3% 17.3% 19.5% 40.8% 100%



88

CONCLUSIONS WITH RESPECT TO PERFORMANCE TESTS IN HOT SPRINGS,

ARKANSAS MSA

LENDING TEST

Arvest Bank‟s overall lending performance in this assessment area is consistent with Lending

Test performance for the state of Arkansas, as displayed in the following table. For more

detailed information relating to the bank‟s Lending Test performance in this assessment area, see

the tables contained in Appendix C.

Lending Test Criteria Performance

Lending Activity Exceeds

Geographic Distribution of Loans Consistent

Distribution of Loans by Borrower‟s Profile Below

Community Development Lending Activities Below

OVERALL CONSISTENT

While the bank‟s performance under the borrower‟s profile criterion is below overall state

performance, it is still adequate (the overall state of Arkansas distribution of loans by borrower‟s

profile is excellent). However, the bank did not make any community development loans in this

assessment area, reflecting less than adequate performance.

INVESTMENT TEST

Arvest Bank‟s community development investment and grant levels in the Hot Springs MSA

Assessment Area are below overall Investment Test performance for the state of Arkansas.

Arvest Bank did not make any new community development investments during the review

period. However, the bank had investments made in a previous review period, still outstanding

of $119,749 attributable to this assessment area; during the review period, the bank made 12

grants totaling $8,545.



89

SERVICE TEST

The bank‟s Service Test performance in this assessment area is consistent with the bank‟s overall

Service Test performance in the state of Arkansas, as detailed in the following table.

Service Test Criteria Performance

Accessibility of Delivery Systems Consistent

Changes in Branch Locations Consistent

Reasonableness of Business Hours and Services Consistent

Community Development Services Below

OVERALL CONSISTENT



90

NONMETROPOLITAN ARKANSAS STATEWIDE AREA (Full-Scope Review)

DESCRIPTION OF INSTITUTION’S OPERATIONS IN NONMETROPOLITAN

ARKANSAS

Bank Structure

Arvest Bank has one assessment area within nonMSA Arkansas, where it operates 21 of its 239

branches (8.8 percent). Of the 21 branches, 19 are in middle-income census tracts, and two are

located in upper-income census tracts. During this review period, the bank opened one office in

a middle-income census tract; no branches were closed. Based on this branch network and other

service delivery systems, the bank is largely able to serve the primary areas of central-west

Arkansas and the far north portion of the assessment area (near the Arkansas-Missouri border),

with secondary accessibility to the far eastern portion of the assessment area and the north-

central section of Arkansas.

Based on the FDIC Deposit Market Share Report as of June 30, 2010, 50 FDIC-insured

institutions operated at least one office within this assessment area, and the bank had the fourth

highest deposit market share percentage (5.9 percent). The deposits held at branches throughout

the nonMSA Arkansas Assessment Area represent 5.6 percent of all Arvest Bank deposits.


The nonMSA Arkansas Assessment Area is a 22-county area that covers the central-west and

north-central portions of Arkansas, including the counties of Baxter, Boone, Carroll, Cleburne,

Conway, Fulton, Hot Spring, Izard, Johnson, Logan, Marion, Montgomery, Newton, Polk, Pope,

Prairie, Scott, Searcy, Stone, Van Buren, White, and Yell. There are only two cities in this

assessment area with populations over 20,000 according to U.S. Census Bureau estimates as of

July 2009 (Russellville in Pope County with a population of 27,588 and Searcy in White County

with a population of 23,341). Based on 2000 census data, the assessment area had a total

population of 496,066. The county with the largest population is White County (67,165). The

remaining counties range in population from 8,261 to 54,469. According to U.S. Census Bureau

estimates as of July 2009, the population in the nonMSA Arkansas assessment area has grown to

526,220. This marks a total population increase of approximately 6.1 percent since the 2000

census.

As the demographics of this assessment area cover an expansive part of rural Arkansas, credit

needs in the area are also varied, including a standard blend of consumer and business/farm

credit products. Other particular credit needs in the assessment area (as noted primarily during

community contact interviews) include increased access to credit for businesses (particularly, as

related to business expansion), flexible personal debt consolidation products, and financial

education programs. Further, many parts of this assessment area are sparsely populated, and,

while there is a significant need for community development involvement, oftentimes these rural

areas lack community development resources from which to draw. Of the 99 middle-income

census tracts in this assessment area, 24 were categorized as “underserved” and 20 were



91

“distressed” in 2009—12 of these census tracts were both underserved and distressed.29


The assessment area consists of 112 geographies. Based on 2000 census data, the median family

income for the assessment area was $34,817, which is slightly higher than the nonMSA Arkansas

figure, $34,263. As of 2009, the HUD estimated median family income for nonMSA Arkansas

was $43,500. The following table summarizes the distribution of geographies by income level

and the family population of those census tracts within the assessment area.




0.0% 2.7% 88.4% 8.9% 0.0% 100%

Family

Population

0 3,055 124,576 15,306 0 142,937

0.0% 2.1% 87.2% 10.7% 0.0% 100%


as the distribution of families for the state of Arkansas overall.



Assessment

Area

25,869 26,749 32,952 57,367 142,937

18.1% 18.7% 23.1% 40.1% 100%

Arkansas 148,233 131,570 163,567 292,693 736,063

20.1% 17.9% 22.2% 39.8% 100%

29

See the glossary in Appendix E for additional detail regarding the categories “underserved” and “distressed”

under the definition of community development.



92


The nonMSA Arkansas Assessment Area had a housing affordability ratio of 45.0 percent as of

the 2000 census, which indicates that housing in the assessment area was slightly less affordable

than the state of Arkansas (47.0 percent) and significantly less affordable than nonMSA

Arkansas overall (50.0 percent). Of the 22 counties in this assessment area, housing was most

affordable in Prairie County (59.0 percent), while Carroll County had the lowest affordability

ratio (34.0 percent). The median housing value in the assessment area was $64,114, which is

lower than the state of Arkansas ($67,400) but higher than nonMSA Arkansas ($55,810). The

median gross monthly rent in the assessment area ($402) is also lower than the state of Arkansas

figure ($453) but higher than the figure for nonMSA Arkansas overall ($389).



agricultural entities operating within the nonMSA Arkansas Assessment Area. Based on this

information, the following table displays the assessment area industry mix.



93

Industry Total Businesses % of Total

Accommodation and Food Services 1,319 5.0%

Admn., Support, Waste and Rem. Svc. 5,963 22.6%

Agric., Forestry, Fishing and Hunting 1,253 4.7%

Arts, Entertainment, and Recreation 386 1.5%

Construction 2,338 8.9%

Educational Services 316 1.2%

Finance and Insurance 611 2.3%

Health Care and Social Assistance 1,433 5.4%

Information 341 1.3%

Manufacturing 1,002 3.8%

Mgmt. of Comp. and Enterprises 28 0.1%

Mining 50 0.2%

Other Services (except Public Admn) 3,339 12.7%

Prof., Scientific, and Tech. Svc. 1,606 6.1%

Public Administration 321 1.2%

Real Estate and Rental and Leasing 951 3.6%

Retail Trade 3,352 12.7%

Transportation 736 2.8%

Utilities 87 0.3%

Wholesale Trade 958 3.6%

TOTAL 26,390 100%

As displayed in the previous table, the largest industries in the assessment area are

administrative, support, waste and removal services; retail trade; and other services. The annual

unemployment rates in the assessment area varied significantly by county.30

The lowest 2008

average annual unemployment rate was 4.3 percent (Carroll and Yell counties), and the highest

unemployment rate was 6.4 percent (Izard County). In 2009, 5.6 percent was the lowest average

annual unemployment rate (Carroll County), and the highest unemployment rate was 11.1

percent (Marion County). In comparison, the average annual unemployment rates for the state of

Arkansas were 5.3 percent in 2008 and 7.4 percent in 2009.

30




94


According to community contacts, overall unemployment in nonMSA Arkansas has remained

relatively low compared to national and state averages. Many communities have seen increases

in population, particularly in the Hispanic population. While some nonMSA areas are becoming

too saturated with financial institutions, community contacts stated that credit is tight. The

greatest need in most communities is small business lending, followed by residential real estate

lending.

Arvest Bank was noted as a top performer in various assessment area communities, though the

community contacts stated that there are a number of ways that banks could advance their

involvement. First, local businesses need increased access to credit in order to expand operations.

With the population influx, job retention and creation are of utmost importance. In addition,

there is a need for affordable housing in many areas. This includes rehabbing existing housing

and new construction. Several other community programs seeking financial institution

assistance are affordable loan programs for debt consolidation, home improvement, and home

purchases, particularly for individuals with both flawed credit and no credit. Community

contacts stated that financial education to LMI community members would be helpful as well.



95

CONCLUSIONS WITH RESPECT TO PERFORMANCE TESTS IN

NONMETROPOLITAN ARKANSAS

LENDING TEST

Lending levels reflect excellent responsiveness to nonMSA Arkansas Assessment Area credit

needs. The bank‟s overall geographic distribution of loans reflects adequate penetration

throughout the assessment area. Further, the overall distribution of loans by borrower‟s


and businesses/farms of different sizes. Lastly, Arvest Bank makes a low level of community

development loans in the nonMSA Arkansas Assessment Area.

Lending Activity

The bank‟s lending levels within the nonMSA Arkansas Assessment Area reflect excellent

responsiveness to assessment area credit needs based upon the lending activity analyzed under

the Lending Test. This lending activity is displayed by loan type in the following table.


Loan Type # % $(000s) %


Home Purchase 78 2.3% $6,288 2.8%


Refinancing 571 16.8% $32,382 14.2%


Small Business 1,685 49.7% $139,843 61.5%

Small Farm 661 19.5% $33,491 14.7%

TOTAL LOANS 3,393 100% $227,317 100%



96


As noted in the Description of Institution’s Operations in nonMSA Arkansas section, this

assessment area does not contain any low-income census tracts and only has three moderate-

income census tracts (2.7 percent of all assessment area census tracts). Overall, based on lending

activity from all three loan categories reviewed, the geographic distribution of loans reflects

adequate penetration throughout the assessment area. The following table displays the

geographic distribution of HMDA loans in comparison to owner-occupied housing demographics

for the assessment area





0.0% 0.3% 79.7% 20.0% 0.0% 100%

Refinance 0 2 757 100 0 859

0.0% 0.2% 88.1% 11.6% 0.0% 100%

Home

Improvement

0 0 110 10 0 120

0.0% 0.0% 91.7% 8.3% 0.0% 100%


0.0% 0.0% 100.0% 0.0% 0.0% 100%

TOTAL

LOANS

0 3 1,150 178 0 1,331

0.0% 0.2% 86.4% 13.4% 0.0% 100%

Owner Occupied

Housing 0.0% 2.4% 87.4% 10.3% 0.0% 100%

As displayed in the previous table, the bank‟s level of lending in moderate-income census tracts

is below comparison data. However, based on the bank‟s performance context, the geographic

distribution of HMDA loans is adequate. The bank‟s level of lending in moderate-income

census tracts (0.2 percent) is below both the percentage of owner-occupied housing in moderate-

income census tracts (2.4 percent) and the 2009 HMDA aggregate lending level in moderate-

income census tracts (1.6 percent). However, as noted in the Description of Institution’s

Operations in nonMSA Arkansas section, there are two portions of the bank‟s nonMSA Arkansas

Assessment Area, where the bank‟s accessibility to services is limited—north-central Arkansas

and the far eastern portion of the assessment area. The only three moderate-income census tracts

in this assessment area are within north-central Arkansas (the far eastern section of the

assessment area contains only middle- and upper-income census tracts, where the bank‟s loan



97

penetration was also sparse). Furthermore, the three moderate-income census tracts in question

are located in three separate counties, Newton, Searcy, and Van Buren. Within these three

counties, there are ten financial institutions operating 21 branch facilities,31

which indicate these

counties are adequately served by financial institutions, and, consequently, Arvest Bank is at a

competitive disadvantage in penetrating these areas. Therefore, in light of performance context

relating to the bank‟s limited service accessibility in north-central Arkansas, the bank‟s

geographic distribution of HMDA loans is adequate.







Small Business

Loans

0 3 843 83 0 929

0.0% 0.3% 90.7% 8.9% 0.0% 100%

Business

Institutions 0.0% 1.7% 87.6% 10.7% 0.0% 100%


is below comparison data. The bank‟s level of lending in moderate-income census tracts (0.3

percent) is below both the percentage of businesses in moderate-income census tracts (1.7

percent) and the 2009 CRA aggregate lending level in moderate-income census tracts (2.2

percent). However, in light of performance context32

relating to the bank‟s limited service

accessibility in north-central Arkansas, the bank‟s geographic distribution of small business

loans is adequate.

31

Source: Federal Deposit Insurance Corporation Deposit Market Share Report as of June 30, 2010 32

See the geographic distribution of HMDA loans analysis in this section, for additional discussion regarding the

bank‟s performance context as it relates to this analysis.



98






Small Farm

Loans

0 1 257 37 0 295

0.0% 0.3% 87.1% 12.5% 0.0% 100%

Agricultural

Institutions 0.0% 1.5% 89.8% 8.8% 0.0% 100%


is below comparison data. The bank‟s level of lending in moderate-income census tracts (0.3

percent) is below both the percentage of businesses in moderate-income census tracts (1.5


percent). However, in light of performance context33

relating to the bank‟s limited service

accessibility in north-central Arkansas, the bank‟s geographic distribution of small farm loans is

adequate.

33

See the geographic distribution of HMDA loans analysis in this section, for additional discussion regarding the

bank‟s performance context as it relates to this analysis.



99



from all three loan categories reviewed. The following table shows the distribution of HMDA-

reported loans by the income level of the borrower in comparison to family population

demographics.




Home Purchase 31 66 102 137 4 340

9.1% 19.4% 30.0% 40.3% 1.2% 100%

Refinance 61 132 180 473 13 859

7.1% 15.4% 21.0% 55.1% 1.5% 100%

Home

Improvement

8 27 22 58 5 120

6.7% 22.5% 18.3% 48.3% 4.2% 100%


0.0% 0.0% 0.0% 0.0% 100% 100%

TOTAL

LOANS

100 225 304 668 34 1,331

7.5% 16.9% 22.8% 50.2% 2.6% 100%

Families 18.1% 18.7% 23.1% 40.1% 0.0% 100%

The bank‟s level of lending to low-income borrowers within the assessment area is good. While

the bank‟s lending level to low-income borrowers (7.5 percent) is lower than the low-income

family population (18.1 percent), it is significantly higher than the 2009 HMDA aggregate

lending level to low-income borrowers (5.2 percent). Similarly, the bank‟s HMDA lending to

moderate-income borrowers (16.9 percent) is only slightly below the percentage of moderate-

income families within the assessment area (18.7 percent) and higher than aggregate lending to

moderate-income borrowers (14.9 percent). Therefore, the bank‟s distribution of HMDA loans

among customers of different income levels is good.



100






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


81.0% 9.8% 5.6% 96.4%


1.4% 1.1% 1.1% 3.6%

TOTAL 756 100 61 917

82.4% 10.9% 6.7% 100%

The bank‟s level of lending to small businesses is excellent. The bank originated a substantial

majority of its small business loans (96.4 percent) to businesses with revenues of $1 million or

less. The highest concentration of these loans was for loan amounts of $100,000 or less, which

further demonstrates the bank‟s willingness to make credit available to small businesses in the

assessment area. According to Dun & Bradstreet estimates, 91.5 percent of businesses reporting

for 2009 had revenues of $1 million or less. In addition, the bank‟s level of lending to small

businesses surpasses the 2009 CRA aggregate lending level of 24.4 percent.



101






TOTAL <$100 >$100<$250 >$250<$500


88.1% 8.5% 3.1% 99.7%


0.0% 0.0% 0.3% 0.3%

TOTAL 260 25 10 295

88.1% 8.5% 3.4% 100%

All but one of the bank‟s small farm loans (99.7 percent) made in this assessment area were

originated to farmers with revenues one of $1 million dollars or less. Additionally, the largest

concentration of these loans was in loan amounts of $100,000 or less, which further demonstrates

the bank‟s willingness to make credit available to small farms in the assessment area. According

to Dun & Bradstreet estimates, 98.9 percent of farms in the assessment area reported revenues of

$1 million or less. The bank‟s small farm lending level is significantly higher than the 2009

CRA aggregate lending level to small farms, 82.5 percent. Therefore, the bank‟s distribution of

small farm loans by borrower‟s revenue profile is excellent.


Arvest Bank makes a low level of community development loans in the nonMSA Arkansas

Assessment Area. The bank originated one community development loan totaling $95,000

within this assessment area since the previous evaluation. This loan was made to assist a school

district serving a large portion of students from LMI families.



102

INVESTMENT TEST

The bank made an adequate level of qualified community development investments and grants,

exhibiting good responsiveness to credit and community development needs in the nonMSA

Arkansas Assessment Area. As of the evaluation date, the bank had a balance of $0.9 million in

qualified investments attributable to this assessment area, which represents a decrease of $0.4

million (30.8 percent) since the last CRA evaluation. All of the bank‟s qualified investments are

in MBS that finance affordable housing, which were made in a previous review period, still

outstanding. Additionally, Arvest Bank made a significant level of community development

grants within the assessment area. The bank made 134 qualified grants during this review

period, which totaled $205,821. Among these numerous grants were significant donations to

local schools serving a large majority of students from LMI families, affordable housing

organizations, food banks, and community service organizations that target children from LMI

families.



103

SERVICE TEST

Arvest Bank‟s service delivery systems are reasonably accessible to the geographies and

individuals of different income levels in the nonMSA Arkansas Assessment Area. The bank‟s

record of opening and closing branches has not adversely affected the accessibility of its delivery

systems, particularly to LMI geographies and/or LMI individuals. Business hours and retail

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

Finally, Arvest Bank personnel provides an adequate level of community development services

within this assessment area.


Arvest Bank operates 21 branch facilities within the nonMSA Arkansas Assessment Area. The






Branches 0 0 19 2 0 21

0.0% 0.0% 90.5% 9.5% 0.0% 100%

Census Tracts 0.0% 2.7% 88.4% 8.9% 0.0% 100%

Household

Population 0.0% 2.2% 87.7% 10.1% 0.0% 100%

While the bank does not operate any branches in moderate-income census tracts within the

nonMSA Arkansas Assessment Area, these moderate-income census tracts represent a very small

part of the overall assessment area. Further, the moderate-income geographies are located an

extended distance from the bank‟s core markets. As displayed in the table above, the substantial

majority of the bank‟s branches are located in middle-income census tracts, which is

commensurate with the overall makeup of the assessment area. Therefore, the bank‟s delivery

systems are reasonably accessible to the geographies and individuals of different income levels

in the assessment area.


The bank‟s record of opening and closing branches has not adversely affected the accessibility of

its delivery systems, particularly to LMI geographies and/or to LMI individuals. During the

review period, the bank opened one branch in this assessment area, which is in a middle-income

census tract.



104



the nonMSA Arkansas Assessment Area. Most branches have Saturday operating hours and

offer extended hours of operations in their lobby and drive-up facilities at some point during the

week. Most drive-thru facilities remain open until 6 p.m., Monday through Friday, and are open

until noon on Saturdays. All branches offer the same standard products, including low-cost

checking and savings accounts, certificates of deposit, real estate and consumer loans, and other

services. Therefore, bank services do not vary in a way that inconveniences certain segments of

this assessment area, particularly LMI geographies and/or LMI individuals.


Arvest Bank staff members provided an adequate level of community development services

within the nonMSA Arkansas Assessment Area. Three bank employees provided financial

expertise on an ongoing basis to community development organizations. Two employees

assisted affordable housing organizations, and another employee served an organization that

helps low-income students obtain higher education scholarships.



105

KANSAS34

CRA RATING FOR KANSAS: SATISFACTORY


The Investment Test is rated: Needs to Improve


Major factors supporting the institution‟s state of Kansas rating include the following:

Arvest Bank‟s lending levels reflect excellent responsiveness to the credit needs of its Kansas

assessment area.


throughout the Kansas assessment area.



For the second consecutive CRA evaluation period, the bank did not make any community

development loans in the Kansas assessment area.

Arvest Bank makes a poor level of qualified investments and grants in the Kansas assessment

area.


different income levels in the Kansas assessment area; further, the bank‟s record of

opening/closing branches has not adversely affected the accessibility of delivery systems,

particularly to LMI geographies and/or LMI individuals.

For the second consecutive CRA evaluation period, the bank did not provide any community

development services within the Kansas assessment area.

34

The bank has branches located in Kansas that are also part of the Kansas City multistate MSA. Consequently, this

statewide evaluation is adjusted so as not to reflect performance in the parts of Kansas contained within a

multistate MSA. Refer to the multistate MSA section of this report for the rating and related evaluation of the

institution‟s performance in that area.



106


Arvest Bank has one assessment area within the state of Kansas, which was reviewed using full-

scope CRA examination procedures. Consequently, Arvest Bank‟s ratings in the state of Kansas

are based solely on this single assessment area. Scoping considerations applicable to the review

of the Kansas assessment area are consistent with the overall CRA examination scope as

presented in the Institution, Scope of Examination section.

To augment the evaluation of the bank‟s Kansas assessment area, two community contact

interviews were conducted in order to ascertain specific community credit needs, community

development opportunities, and local market conditions.35

Both community contacts specialize

in economic development targeted to the southeast corner of Kansas.

DESCRIPTION OF INSTITUTION’S OPERATIONS IN KANSAS

Bank Structure

Arvest Bank operates one of its 239 branches (0.4 percent) within the nonMSA Kansas

Assessment Area, which is in a middle-income census tract. Based on the bank‟s very limited

branch presence in this assessment area, Arvest Bank is not able to effectively serve all parts of

the assessment area, particularly the two northernmost counties of Bourbon and Crawford.

This assessment area is a competitive banking market, with a total of 35 FDIC-insured

institutions operating within the assessment area, based on the FDIC Deposit Market Share

Report as of June 30, 2010. Of the 35 financial institutions with an office in this assessment

area, the bank ranked 23rd

with a deposit market share of 1.2 percent. Based on this information,

Arvest Bank deposits held at branches throughout nonMSA Kansas Assessment Area represent

0.3 percent of the bank‟s total deposits.


The nonMSA Kansas Assessment Area is a six-county area that covers the southeastern corner of

the state of Kansas; it includes the following counties: Bourbon, Chautauqua, Cherokee,

Crawford, Labette, and Montgomery. According to U.S. Census Bureau estimates as of July

2009, the largest city in this assessment area is Pittsburg in Crawford County with a population

of 19,639. Based on 2000 census data, the assessment area had a total population of 139,672.

The county with the largest population is Crawford County (38,242). The remaining counties

range in population from 4,359 to 36,252. According to U.S. Census Bureau estimates as of July

2009, the population in the nonMSA Kansas Assessment Area has decreased to 134,592. This

marks a total population decrease of approximately 3.6 percent since the 2000 census.

35


Operations section.



107

As the demographics of this assessment area cover an expansive part of rural Kansas, credit

needs in the area are varied and include a mix of consumer and business/farm credit products.

Other particular credit needs in the assessment area (as noted primarily during community

contact interviews) include increased access to credit for businesses (particularly, as related to

storefront operations and microloan programs), revolving home improvement loans, and

participation in tax credit programs. Further, many parts of this assessment area are sparsely

populated, and, while there is significant need for community development involvement,

oftentimes these rural areas lack community development resources from which to draw.36


The assessment area consists of 44 geographies. Based on the 2000 census, the median family

income for the assessment area was $38,562, which was below the nonMSA Kansas figure,

$41,490. As of 2009, the HUD estimated median family income for nonMSA Kansas to be

$52,100. The following table summarizes the distribution of geographies by income level and

the family population of those census tracts within the assessment area.




0.0% 20.5% 77.3% 2.3% 0.0% 100%

Family

Population

0 5,578 30,539 1,312 0 37,429

0.0% 14.9% 81.6% 3.5% 0.0% 100%

The following table displays the distribution of assessment area families by income level,

compared to the family distribution for nonMSA Kansas.



Assessment

Area

7,616 7,781 9,370 12,662 37,429

20.3% 20.8% 25.0% 33.8% 100%

NonMSA

Kansas

117,432 171,758 130,953 286,643 706,786

16.6% 24.3% 18.5% 40.6% 100%

36

Of the 34 middle-income census tracts in this assessment area, one was categorized as “underserved” in 2009.

See the glossary in Appendix E for additional detail regarding the term “underserved” under the definition of

community development.



108


Housing in the assessment area appears to be very affordable. The nonMSA Kansas Assessment

Area had a housing affordability ratio of 62.0 percent as of the 2000 census, which indicates

greater affordability than nonMSA Kansas overall (58.0 percent). Of the six counties in this

assessment area, housing was most affordable in Chautauqua County (84.0 percent), while

Crawford County (53.0 percent) had the lowest affordability ratio. The remaining four counties

have affordability ratios ranging from 63.0 to 69.0 percent. The median housing value in the

assessment area was $48,609, which is significantly lower than nonMSA Kansas at $57,883.

Median gross monthly rent in the assessment area ($410) was similar to nonMSA Kansas ($405).



agricultural entities operating within the nonMSA Kansas Assessment Area. The following table

depicts the number of businesses by industry in the assessment area.



109

Industry Total

Businesses % of Total

Accommodation and Food Services 295 4.1%


Agric., Forestry, Fishing and Hunting 638 8.9%


Construction 517 7.2%



Health Care and Social Assistance 528 7.4%

Information 96 1.3%

Manufacturing 300 4.2%


Mining 36 0.5%


Prof., Scientific, and Tech. Svc. 454 6.3%



Retail Trade 755 10.5%


Utilities 23 0.3%


TOTAL 7,161 100%


administrative, support, waste and removal services and other services. The average annual

unemployment rates in the assessment area were generally higher than the state of Kansas

overall.37

The lowest 2008 average annual unemployment rate was 4.4 percent (Chautauqua

County), and the highest unemployment rate was 5.4 percent (Montgomery County). In 2009,

6.9 percent was the lowest average annual unemployment rate (Bourbon County), and the

highest unemployment rate was 9.8 percent (Montgomery County). In comparison, the average

annual unemployment rates for the state of Kansas were 4.5 percent in 2008 and 7.1 percent in

2009.

37

U.S. Department of Labor; unemployment rates are not seasonally adjusted.



110


Community contacts noted that the rural communities in southeast Kansas have experienced an

aging and declining population in recent years. Contacts surmised that some population loss is

due to few opportunities for advanced education. Furthermore, statewide resources are difficult

to attain because of the lack of an interstate highway connecting the communities to a

surrounding MSA. Agricultural lending is a significant credit need in the area, but most large

farmers receive credit through the USDA, and smaller entities are hobby farmers with few

demands for financing. With that in mind, community contact information revealed that small

business lending is the greatest concern in southeast Kansas.

Overall, community contacts noted that banks in the assessment area have been receptive to

community development projects. Banks have participated in affordable housing projects,

microloan programs for small businesses, and redevelopment and recruitment of new businesses

to the area. Other initiatives in which financial institutions could participate include down

payment assistance, low interest rate loan programs for storefront operations, revolving loan

funds for home improvement projects, grant matching loan programs to assist entrepreneurs, and

tax credit programs. According to community contacts, it is vital for more banks in the area to

get involved with these programs to further develop the struggling economy of southeast Kansas.



111

CONCLUSIONS WITH RESPECT TO PERFORMANCE TESTS IN KANSAS

LENDING TEST

Arvest Bank‟s Lending Test performance in Kansas is rated high satisfactory. Lending levels

reflect excellent responsiveness to assessment area credit needs. The geographic distribution of

loans reflects adequate penetration throughout the assessment area. The loan distribution by

borrower‟s income/revenue profile reflects excellent penetration among customers of different

income levels and businesses/farms of different sizes. However, for the second consecutive

CRA evaluation, the bank did not make any community development loans in the nonMSA

Kansas Assessment Area.

Lending Activity

The bank‟s lending levels reflect excellent responsiveness to nonMSA Kansas Assessment Area

credit needs, based upon the lending activity analyzed under the Lending Test. This lending



Loan Type # % $(000s) %

Home Improvement 22 5.5% $506 2.7%

Home Purchase 4 1.0% $121 0.6%

Multi-Family Housing 0 0.0% $0 0.0%

Refinancing 25 6.3% $1,512 8.0%


Small Business 201 50.5% $13,451 71.3%

Small Farm 146 36.7% $3,272 17.3%

TOTAL LOANS 398 100% $18,862 100%



112


As noted in the Description of Institution’s Operations in Kansas section, this assessment area

contains zero low-income census tracts and nine moderate-income census tracts. Overall, based

on lending activity from all three loan categories reviewed, the geographic distribution of loans

reflects adequate penetration throughout the assessment area. The following table displays the


for the assessment area.





0.0% 0.0% 100% 0.0% 0.0% 100%

Refinance 0 4 21 0 0 25

0.0% 16.0% 84.0% 0.0% 0.0% 100%

Home

Improvement

0 1 7 0 0 8

0.0% 12.5% 87.5% 0.0% 0.0% 100%

Multi-Family

Loans

0 0 0 0 0 0

0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

TOTAL

LOANS

0 5 44 0 0 49

0.0% 10.2% 89.8% 0.0% 0.0% 100%

Owner Occupied

Housing 0.0% 13.9% 82.9% 3.2% 0.0% 100%


income census tracts is good. While the bank did not make any home purchase loans in

moderate-income census tracts, refinance loans (the primary HMDA loan product in this

assessment area) and home improvement loans made in moderate-income census tracts

accounted for 10.2 percent of all HMDA loans, which is below the owner-occupied housing

percentage in moderate-income census tracts, 13.9 percent, but above the 2009 HMDA aggregate

level of loans made in moderate-income census tracts, 10.0 percent.



113







Small Business

Loans

0 5 103 0 0 108

0.0% 4.6% 95.4% 0.0% 0.0% 100%

Business

Institutions 0.0% 19.6% 77.2% 3.2% 0.0% 100%

The analysis of small business loans reflects poor penetration throughout the assessment area.

The bank only made 4.6 percent of small business loans in moderate-income census tracts, which

is significantly less than the estimated percentage of businesses within moderate-income census

tracts, 19.6 percent, and the 2009 CRA aggregate level of small business loans made in

moderate-income census tracts, 18.5 percent.






Small Farm

Loans

0 2 77 0 0 79

0.0% 2.5% 97.5% 0.0% 0.0% 100%

Agricultural

Institutions 0.0% 4.1% 94.4% 1.4% 0.0% 100%

While below data used for comparison, the bank‟s geographic distribution of small farm loans is

adequate. As displayed in the preceding table, the bank‟s level of small farm loans made within

moderate-income census tracts (2.5 percent) is below, but within an adequate range of the

estimated percentage of farms located in moderate-income census tracts (4.1 percent). Based on

2009 CRA aggregate data, the level of small farm loans made in moderate-income census tracts

by other lenders (3.9 percent) was also below the estimated percentage of farms in moderate-

income census tracts.



114





demographics.





12.5% 50.0% 0.0% 37.5% 0.0% 100%

Refinance 3 3 4 15 0 25

12.0% 12.0% 16.0% 60.0% 0.0% 100%

Home

Improvement

1 0 2 4 1 8

12.5% 0.0% 25.0% 50.0% 12.5% 100%


0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

TOTAL

LOANS

6 11 6 25 1 49

12.2% 22.4% 12.2% 51.0% 2.0% 100%

Families 20.3% 20.8% 25.0% 33.8% 0.0% 100%

The bank‟s level of lending to LMI borrowers within the assessment area is excellent. Based on

the above table, the bank‟s level of lending to low-income borrowers (12.2 percent) is lower than

the low-income family population (20.3 percent). However, the bank‟s level of lending is higher

than the 2009 HMDA aggregate lending level to low-income borrowers (9.4 percent), reflecting

good overall penetration. Furthermore, the bank‟s HMDA lending to moderate-income

borrowers (22.4 percent) is above the percentage of moderate-income borrowers within the

assessment area (20.8 percent), and it is significantly higher than the aggregate lending level to

moderate-income borrowers (15.6 percent), reflecting excellent overall penetration.



115






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


85.2% 6.5% 1.9% 93.5%


0.9% 0.9% 4.6% 6.5%

TOTAL 93 8 7 108

86.1% 7.4% 6.5% 100%


majority of its business loans (93.5 percent) to businesses with revenues of $1 million or less.

The highest concentration of these loans was for loan amounts of $100,000 or less, which further

demonstrates the bank‟s willingness to make credit available to small businesses in the


for 2009 had gross annual revenues of $1 million or less. In addition, the bank‟s level of lending

to small businesses significantly exceeded the 2009 CRA aggregate lending level of 15.8

percent.



116

Small farm lending performance was analyzed by the revenue size of the farm and by the dollar

amount of the loan. The following table shows the distribution of small farm loans by loan

amount and farm revenue size.



TOTAL <$100 >$100<$250 >$250<$500


97.5% 2.5% 0.0% 100%

Greater Than $1

Million

0 0 0 0

0.0% 0.0% 0.0% 0.0%

TOTAL 77 2 0 79

97.5% 2.5% 0.0% 100%

All of the bank‟s small farm loans were made to farmers with revenues of $1 million dollars or

less, reflecting excellent performance. Additionally, the largest concentration of these loans was

in loan amounts of $100,000 or less, which further demonstrates the bank‟s willingness to make

credit available to small farms in the assessment area. According to Dun & Bradstreet estimates,

99.5 percent of farms in the assessment area reported revenues of $1 million or less. The bank‟s

farm lending is significantly higher than the 2009 CRA aggregate data lending level to small

farms, 79.9 percent.


Arvest Bank did not make any community development loans in the nonMSA Kansas

Assessment Area during the review period, as was the case at the bank‟s previous CRA

evaluation.



117

INVESTMENT TEST

Overall, Arvest Bank‟s performance under the Investment Test is rated needs to improve for the

state of Kansas. The bank made a poor level of qualified community development investments

and grants, exhibiting poor responsiveness to credit and community development needs in the

assessment area. During this review period, the bank had $47,229 in qualified investments

attributable to this assessment area, which represents a decrease of $17,572 (27.1 percent) since

the last CRA evaluation. All of the bank‟s qualified investments are in MBS that finance

affordable housing, which were made in a previous review period, still outstanding.

Additionally, Arvest Bank made no qualified community development grants within the

assessment area, as was the case at the bank‟s previous CRA evaluation.

SERVICE TEST

Arvest Bank‟s Service Test rating in the state of Kansas is low satisfactory. The bank‟s service

delivery systems are reasonably accessible to the assessment area, and the bank‟s record of

opening and closing branches has not adversely affected the accessibility of its delivery systems

to LMI geographies and/or LMI individuals. Business hours and services do not vary in a way

that inconveniences LMI geographies and/or LMI individuals. Conversely, for the second

consecutive CRA evaluation, the bank did not provide any community development services in

the nonMSA Kansas Assessment Area.


The bank operates one branch office in this assessment area, which is in a middle-income census

tract. The strong majority of census tracts in this assessment area are designated as middle-

income (77.3 percent), and the vast majority of households are within middle-income census

tracts (79.1 percent). Therefore, Arvest Bank‟s delivery systems are reasonably accessible to the

geographies and individuals of different income levels in the nonMSA Kansas Assessment Area.


The bank‟s record of opening and closing branches in the nonMSA Kansas Assessment Area has


and/or to LMI individuals. The bank did not open or close any branches during this review

period.


While the bank only operates one branch in the nonMSA Kansas Assessment Area, its business

hours and banking products and services are consistent with the majority of all other Arvest

Bank offices. Therefore, bank services do not vary in a way that inconveniences certain

segments of this assessment area, particularly LMI geographies and/or LMI individuals.



118


Arvest Bank did not provide any community development services in the nonMSA Kansas

Assessment Area during the reviewed period, as was the case for the bank‟s previous CRA

evaluation.



119

MISSOURI38

CRA RATING FOR MISSOURI: SATISFACTORY




Major factors supporting the institution‟s CRA rating for Missouri include the following:

Arvest Bank‟s lending levels reflect excellent responsiveness to the credit needs of its

Missouri assessment areas.


throughout the Missouri assessment areas.

The overall distribution of loans by borrower‟s income/revenue profile reflects excellent

penetration among borrowers of different income levels and businesses/farms of different

sizes.

Arvest Bank makes a low level of community development loans in Missouri.

Arvest Bank makes an adequate level of qualified community development investments and

grants throughout the Missouri assessment areas.


different income levels in Missouri assessment areas; further, changes in branch locations

have not adversely affected the accessibility of delivery systems, particularly to LMI


Arvest Bank personnel provides few, if any, community development services in Missouri

assessment areas.

38

The bank has branches located in Missouri that are also part of the Fayetteville-Springdale-Rogers multistate MSA

and the Kansas City multistate MSA. Consequently, this statewide evaluation is adjusted so as not to reflect

performance in the parts of Missouri contained within a multistate MSA. Refer to the multistate MSA sections of

this report for the ratings and related evaluations of the institution‟s performance in those areas.



120


Arvest Bank has three separate assessment areas within the state of Missouri, and scoping

considerations applicable to the review of the Missouri assessment areas are consistent with the

overall CRA examination scope as presented in the Institution, Scope of Examination section.

The bank‟s performance within one of these assessment areas was reviewed using full-scope

CRA examination procedures, which formed the primary basis for the bank‟s overall ratings in

the state of Missouri.

To augment the evaluation of the Missouri full-scope review assessment area, two community

contact interviews were conducted in order to ascertain specific community credit needs,

community development opportunities, and local market conditions.39

Both interviews took

place with representatives from the southwest corner of nonMSA Missouri—one interview was

with a business retention/expansion coordinator and one was with a community/business

development specialist.

DESCRIPTION OF INSTITUTION’S OPERATIONS IN MISSOURI

The bank operates 18 branches (7.5 percent of total branches) throughout the three CRA

assessment areas in the state of Missouri. The following table gives additional detail regarding

the bank‟s operations within Missouri.

Assessment Area Offices # Offices % Deposits

40

($000s) Deposits %

CRA Review

Procedures

NonMSA Missouri 4 22.2% $58,841 14.6% Full Scope

Joplin MSA 10 55.6% $329,726 81.6% Limited Scope

Springfield MSA 4 22.2% $15,397 3.8% Limited Scope

STATE TOTAL 18 100% $403,964 100% N/A

Deposits attributable to 18 Missouri branches total $404.0 million, which equates to 4.4 percent

of total bank deposits.

39


section, as applicable to the Missouri full-scope review assessment area in which the community contacts were

made. 40




121

CONCLUSIONS WITH RESPECT TO PERFORMANCE TESTS IN MISSOURI

LENDING TEST

Arvest Bank‟s Lending Test performance in the state of Missouri is rated high satisfactory.

Lending levels reflect excellent responsiveness to the credit needs in Missouri assessment areas.

The bank‟s overall geographic distribution of loans reflects adequate penetration throughout

Missouri assessment areas. Further, the overall distribution of loans by borrower‟s


and businesses/farms of different sizes. Lastly, Arvest Bank makes a low level of community

development loans within Missouri assessment areas.

Lending Activity

The bank‟s lending levels in the state of Missouri reflect excellent responsiveness to assessment

area credit needs, based upon the lending activity analyzed under the Lending Test. This lending



Loan Type # % $(000s) %

Home Improvement 259 17.8% 12,340 7.3%

Home Purchase 73 5.0% 6,283 3.7%


Refinancing 232 15.9% 16,832 10.0%

Total HMDA related 573 39.4% 42,444 25.2%

Small Business 747 51.3% 118,598 70.5%

Small Farm 136 9.3% 7,245 4.3%

TOTAL LOANS 1,456 100% $168,287 100%



122


As displayed in the following tables, Arvest Bank‟s overall performance under the geographic

distribution of loans criterion within the state of Missouri is adequate.


Missouri NonMSA Adequate


Joplin MSA Consistent

Springfield MSA Below

Arvest Bank‟s overall loan distribution by borrower‟s profile reflects excellent performance,

based on activity in three Missouri assessment areas, as is detailed in the following tables.


Missouri NonMSA Excellent


Joplin MSA Below

Springfield MSA Consistent



123


Overall, Arvest Bank makes a low level of community development loans within the state of

Missouri. The following table displays community development lending performance in the

bank‟s three Missouri assessment areas.


Missouri NonMSA Few If Any


Joplin MSA Exceeds


Arvest Bank did not make any community development loans in the Missouri nonMSA

Assessment Area. The bank made one community development loan in the Springfield MSA

Assessment Area and two loans in the Joplin MSA Assessment Area; together, these three

community development loans in Missouri assessment areas totaled $0.7 million.



124

INVESTMENT TEST

For the state of Missouri, Arvest Bank‟s overall performance under the Investment Test is rated

low satisfactory. The following tables display investment and grant activity performance by

Missouri assessment areas.


Missouri NonMSA Adequate



Springfield MSA Exceeds

Community development investments in Missouri assessment areas totaled $1.9 million, all of

which were made in MBS ($1.2 million in new investments and $0.7 million in previous review

period investments still outstanding). The bank also made community development grants

totaling $113,847 in Missouri assessment areas.



125

SERVICE TEST

Overall, Arvest Bank‟s performance in Missouri is rated low satisfactory under the Service Test.

The bank‟s delivery systems are reasonably accessible to geographies and individuals of

different income levels throughout Missouri assessment areas. In addition, the bank‟s record of

opening and closing branches has not adversely affected the accessibility of its delivery systems,

particularly to LMI geographies and/or LMI individuals. Business hours and services do not

vary in a way that inconveniences portions of Missouri assessment areas, particularly LMI

geographies and/or LMI individuals. Lastly, Arvest Bank provides few, if any, community

development services within its Missouri assessment areas.


As displayed in the following tables, the bank‟s delivery systems in Missouri assessment areas

are reasonably accessible to geographies and individuals of different income levels.


Missouri NonMSA Reasonably Accessible





As displayed in the following tables, Arvest Bank‟s record of opening and closing branches in its

three Missouri assessment areas has not adversely affected the accessibility of its delivery

systems, particularly to LMI geographies and/or LMI individuals.


Missouri NonMSA Not Adversely Affected



Springfield MSA Exceeds



126



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

individuals. The bank‟s performance under this Service Test criterion is displayed by Missouri

assessment areas in the following tables.

Assessment Area (full-scope review) Reasonableness of Business

Hours and Services

Missouri NonMSA Do Not Vary / Inconvenience

Assessment Area (limited-scope review) Reasonableness of Business

Hours and Services




Arvest Bank provides few, if any, community development services across its Missouri

assessment areas. The bank‟s performance under this Service Test criterion is displayed by

Missouri assessment areas in the following tables.


Missouri NonMSA Few, If Any


Joplin MSA Exceeds


Arvest Bank did not provide any community development services in the Missouri nonMSA

Assessment Area, nor did the bank provide any community development services in the

Springfield MSA Assessment Area. Conversely, the bank had an adequate level of community

development services in the Joplin MSA Assessment Area.



127

JOPLIN, MISSOURI MSA (Limited-Scope Review)

DESCRIPTION OF INSTITUTION’S OPERATIONS IN JOPLIN, MISSOURI MSA

This assessment area includes the entire Joplin, Missouri MSA, which is comprised of Jasper

County and Newton County. Arvest Bank operates 10 branch offices in this assessment area.

The tables below detail key demographics relating to this assessment area.




0.0% 12.5% 81.3% 6.3% 0.0% 100%

Family

Population

0 4,269 35,559 3,048 0 42,876

0.0% 10.0% 82.9% 7.1% 0.0% 100%

Household

Population

0 7,711 49,572 4,351 0 61,634

0.0% 12.5% 80.4% 7.1% 0.0% 100%

Business

Institutions

0 1,101 5,961 557 0 7,619

0.0% 14.5% 78.2% 7.3% 0.0% 100%

Agricultural

Institutions

0 3 357 5 0 365

0.0% 0.8% 97.8% 1.4% 0.0% 100%





17.4% 19.4% 24.6% 38.6% 100%


21.9% 16.9% 20.6% 40.6% 100%



128

CONCLUSIONS WITH RESPECT TO PERFORMANCE TESTS IN JOPLIN,

MISSOURI MSA

LENDING TEST

Arvest Bank‟s overall lending performance in this assessment area is consistent with the Lending

Test performance for the state of Missouri, as displayed in the following table. For more detailed

information relating to the bank‟s Lending Test performance in this assessment area, see the

tables contained in Appendix C.


Lending Activity Below


Distribution of Loans by Borrower‟s Profile Below

Community Development Lending Activities Exceeds

OVERALL CONSISTENT

While the bank‟s performance under the lending activity and borrower‟s profile criteria is below

overall state performance, it is still adequate. The overall state of Missouri performance under

these criteria is excellent.

INVESTMENT TEST

Arvest Bank had community development investments of $569,923 (MBS purchased in a

previous review period still outstanding) and 31 grants for $72,162 attributable to this assessment

area, which is consistent with overall Investment Test performance for the state of Missouri.

SERVICE TEST


Service Test performance in the state of Missouri, as is detailed in the following table.



Changes in Branch Locations Consistent


Community Development Services Exceeds

OVERALL CONSISTENT



129

SPRINGFIELD, MISSOURI MSA (Limited-Scope Review)

DESCRIPTION OF INSTITUTION’S OPERATIONS IN SPRINGFIELD, MISSOURI

MSA

This assessment area includes the entire Springfield, Missouri MSA, which is comprised of the

following counties: Christian, Dallas, Greene, Polk, and Webster. Arvest Bank operates four

branch offices in this assessment area, three of which were opened during this review period.

The tables below detail key demographics relating to this assessment area.




2.4% 21.2% 51.8% 24.7% 0.0% 100%

Family

Population

225 17,306 55,533 25,081 0 98,145

0.2% 17.6% 56.6% 25.6% 0.0% 100%

Household

Population

1,593 29,216 81,033 33,676 0 145,518

1.1% 20.1% 55.7% 23.1% 0.0% 100%

Business

Institutions

446 3,176 10,473 5,207 0 19,302

2.3% 16.5% 54.3% 27.0% 0.0% 100%

Agricultural

Institutions

2 101 527 96 0 726

0.3% 13.9% 72.6% 13.2% 0.0% 100%





17.4% 19.6% 24.1% 38.9% 100%


21.7% 17.3% 20.3% 40.7% 100%



130

CONCLUSIONS WITH RESPECT TO PERFORMANCE TESTS IN SPRINGFIELD,

MISSOURI MSA

LENDING TEST


Test performance for the state of Missouri, as displayed in the following table. For more detailed

information relating to the bank‟s Lending Test performance in this assessment area, see the

tables contained in Appendix C.


Lending Activity Consistent

Geographic Distribution of Loans Below

Distribution of Loans by Borrower‟s Profile Consistent

Community Development Lending Activities Consistent

OVERALL CONSISTENT

INVESTMENT TEST

Arvest Bank had community development investments of $1.1 million (MBS purchased in this

review period) and 12 grants for $34,520 attributable to this assessment area, which exceeds the

overall Investment Test performance for the state of Missouri.



131

SERVICE TEST

The bank‟s Service Test performance in this assessment area is consistent with overall Service

Test performance for the state of Missouri, as is detailed in the following table.



Changes in Branch Locations Exceeds


Community Development Services Consistent

OVERALL CONSISTENT

Arvest Bank opened three branches in the Springfield MSA since the previous evaluation,

including one branch in a moderate-income census tract. This performance exceeds the overall

performance for the state of Missouri. Arvest Bank personnel did not provide any community

development services in this assessment area, which is consistent with overall Missouri

community development service performance.



132

NONMETROPOLITAN MISSOURI STATEWIDE AREA (Full-Scope Review)


MISSOURI

Bank Structure

Arvest Bank has one assessment area within nonMSA Missouri, where it operates four of its 239

branches (1.7 percent). All four branches are located in middle-income census tracts. During

this review period, the bank opened one office in a middle-income census tract; no branches

were closed. Based on this branch network and other service delivery systems, the bank is

largely able to serve the primary central core of the nonMSA Missouri Assessment Area, with

secondary accessibility in the northwest and southeast portions of the assessment area.

Based on the FDIC Deposit Market Share Report as of June 30, 2010, 37 FDIC-insured

institutions operated at least one office within this assessment area, and the bank had the 27th

highest deposit market share percentage (1.7 percent). The deposits held at branches throughout

the nonMSA Missouri Assessment Area represent 0.6 percent of all Arvest Bank deposits.


The nonMSA Missouri Assessment Area is a ten-county area in the southwestern portion of the

state of Missouri, including the counties of Barry, Barton, Cedar, Dade, Douglas, Lawrence,

Ozark, Stone, Taney, and Vernon. While there are few towns with large populations in this

assessment area, it does include the city of Branson, which is a popular vacation destination for

people in Missouri and surrounding states. Based on 2000 census data, the assessment area had a

total population of 214,852. The county with the largest population is Taney County (39,703).

The remaining counties range in population from 7,923 to 35,204. According to U.S. Census

Bureau estimates as of July 2009, the population in the nonMSA Missouri assessment area has

grown to 229,311. This marks a total population increase of approximately 6.7 percent since the

2000 census.



133

As the demographics of this assessment area cover an expansive part of rural Missouri, credit

needs in the area are also varied, including a standard blend of consumer and business/farm

credit products. Other particular credit needs in the assessment area (as noted primarily during

community contact interviews) include increased access to credit for small businesses

(particularly, as related to business expansion and downtown area revitalization projects) and

consumer credit programs aimed at borrowers with seasonal employment. Further, many parts

of this assessment area are sparsely populated, and while there is significant need for community

development involvement, oftentimes these rural areas lack community development resources

from which to draw. Of the 40 middle-income census tracts in this assessment area, ten were

categorized as “underserved” and ten were “distressed” in 2009—two of which were both

underserved and distressed.41


The assessment area consists of 41 geographies. Based on the 2000 census, the median family

income for the assessment area was $35,198, which was significantly less than the state of

Missouri at $46,044, but similar to nonMSA Missouri, $35,821. As of 2009, the HUD estimated

median family income for nonMSA Missouri was $45,400. The following table summarizes the

distribution of geographies by income level and the family population of those census tracts

within the assessment area.




0.0% 2.4% 97.6% 0.0% 0.0% 100%

Family

Population

0 1,042 60,299 0 0 61,341

0.0% 1.7% 98.3% 0.0% 0.0% 100%

41





134


as the distribution of families for nonMSA Missouri overall.



Assessment Area 11,230 11,901 15,112 23,098 61,341

18.3% 19.4% 24.6% 37.7% 100%

NonMSA Missouri 75,632 73,644 91,780 156,006 397,062

19.0% 18.6% 23.1% 39.3% 100%


Housing in the nonMSA Missouri Assessment Area is less affordable than nonMSA Missouri

overall. The nonMSA Missouri Assessment Area had a housing affordability ratio of 41.0

percent as of the 2000 census, which indicates that housing in the assessment area was less

affordable than nonMSA Missouri overall (45.0 percent). Of the ten counties in this assessment

area, housing was most affordable in Barton County (49.0 percent), while Stone County had the

lowest affordability ratio (35.0 percent). The median housing value in the assessment area was

$71,725, which is greater than the nonMSA Missouri figure, $65,152. The median gross

monthly rent in the assessment area ($403) was also higher than the nonMSA Missouri figure

($375).



agricultural entities operating within the nonMSA Missouri Assessment Area. Based on this




135

Industry Total


Accommodation and Food Services 905 7.5%


Agric., Forestry, Fishing and Hunting 861 7.2%





Health Care and Social Assistance 674 5.6%


Manufacturing 463 3.9%


Mining 13 0.1%


Prof., Scientific, and Tech. Svc. 730 6.1%





Utilities 29 0.2%


TOTAL 12,021 100%


administrative, support, waste and removal services; other services; and retail trade. The average

annual unemployment rates in the assessment area varied significantly by county. The lowest

2008 average annual unemployment rate was 4.8 percent (Lawrence County), and the highest

rate was 9.2 percent (Barton County). In 2009, 8.0 percent was the lowest average annual

unemployment rate (Vernon County), and the highest unemployment rate was 12.1 percent

(Taney County). In comparison, the average annual unemployment rates for the state of

Missouri were 6.1 percent in 2008 and 9.3 percent in 2009.42

42




136


According to community contacts, communities in the southwest corner of nonMSA Missouri

have seen population increases in the last ten years, due to the benefits of a decreased cost of

living. With the influx in population, the economy has responded with more jobs in the tourism

sector, as well as a growing number of women- and minority-owned businesses. In light of these

circumstances, primary credit needs in this area are related to residential real estate and small

business lending. In particular, there is healthy demand for downtown revitalization in the

smaller communities. It was noted that due to the current sluggish economy, businesses have

been forced to maintain operations with fewer resources. As a result, it seems as though business

expansion is being hindered by restrictive credit standards, particularly for small businesses

experiencing lower profits due to current economic conditions. In contrast, credit standards for

home loans have been more flexible, which has kept the housing market steady. Arvest Bank

was specifically noted as being active in small business lending initiatives, and local banks in

general have been involved in education programs and small business owner workshops.



137


NONMETROPOLITAN MISSOURI

LENDING TEST

Lending levels reflect excellent responsiveness to nonMSA Missouri Assessment Area credit




and businesses/farms of different sizes. However, for the second consecutive CRA evaluation,

the bank did not make any community development loans in the nonMSA Missouri Assessment

Area.

Lending Activity

The bank‟s lending levels within the nonMSA Missouri Assessment Area reflect excellent




Loan Type # % $(000s) %


Home Purchase 30 8.1% $2,752 6.8%


Refinancing 62 16.8% $6,423 15.9%


Small Business 174 47.0% $24,876 61.7%

Small Farm 48 13.0% $2,784 6.9%

TOTAL LOANS 370 100% $40,304 100%


As noted in the Description of Institution’s Operations in nonMSA Missouri section, this

assessment area has does not contain any low-income census tracts and only has one moderate-

income census tract (2.4 percent of all assessment area census tracts). Overall, based on lending

activity from all three loan categories reviewed, the geographic distribution of loans reflects

adequate penetration throughout the assessment area. The following table displays the


for the assessment area.



138





0.0% 0.0% 100% 0.0% 0.0% 100%

Refinance 0 0 202 0 0 202

0.0% 0.0% 100.0% 0.0% 0.0% 100%

Home

Improvement

0 0 14 0 0 14

0.0% 0.0% 100% 0.0% 0.0% 100%


0.0% 0.0% 100.0% 0.0% 0.0% 100%

TOTAL

LOANS

0 0 334 0 0 334

0.0% 0.0% 100% 0.0% 0.0% 100%

Owner Occupied

Housing 0.0% 1.8% 98.2% 0.0% 0.0% 100%

As displayed in the preceding table, the bank did not make any loans in the assessment area‟s

only moderate-income census tract. Nevertheless, based on the bank‟s performance context, the

geographic distribution of HMDA loans is adequate. As noted in the Description of Institution’s

Operations in nonMSA Missouri section, the bank‟s service accessibility is limited in the extreme

southwest portion of the assessment area, where the moderate-income census tract is located.

Furthermore, the moderate-income census tract presents minimal residential real estate lending

opportunity, as it accounts for a small percentage of owner-occupied housing units in the

assessment area (1.8 percent). Based on 2009 HMDA aggregate lending activity in the

assessment area, other lenders made less than one percent of HMDA loans in this moderate-

income census tract. Therefore, in light of performance context relating to the bank‟s limited

service accessibility in the southwestern section of the assessment area, coupled with the

minimal lending opportunity presented in the moderate-income census tract, the bank‟s

geographic distribution of HMDA loans is adequate.



139

Next, the bank‟s geographic distribution of small business and small farm loans was reviewed,

which is displayed in the following tables in comparison to the location of businesses/farms

throughout the bank‟s assessment area.




Small Business

Loans

0 0 107 0 0 107

0.0% 0.0% 100.0% 0.0% 0.0% 100%

Business

Institutions 0.0% 0.2% 99.8% 0.0% 0.0% 100%




Small Farm

Loans

0 0 32 0 0 32

0.0% 0.0% 100.0% 0.0% 0.0% 100%

Agricultural

Institutions 0.0% 0.8% 99.2% 0.0% 0.0% 100%

As displayed in the preceding tables, the bank did not make any small business/farm loans in the

assessment area‟s only moderate-income census tract. Nevertheless, based on the bank‟s

performance context, the geographic distribution of these loans is adequate. As noted previously,

the moderate-income census tract is located in the extreme southwestern portion of the

assessment area, where the bank‟s service accessibility is limited. Furthermore, the moderate-

income census tract presents minimal business/farm lending opportunity, as less than one percent

of assessment area businesses/farms are located in this census tract. Based on 2009 CRA

aggregate lending activity in the assessment area, other lenders made less than one percent of

business/farm loans in this moderate-income census tract. Therefore, in light of performance

context relating to the bank‟s limited service accessibility in the southwestern section of the

assessment area, coupled with the minimal lending opportunity presented in the moderate-

income census tract, the bank‟s geographic distribution of small business and small farm loans is

adequate.



140





demographics.





3.4% 26.5% 21.4% 48.7% 0.0% 100%

Refinance 5 40 50 107 0 202

2.5% 19.8% 24.8% 53.0% 0.0% 100%

Home

Improvement

2 1 2 8 1 14

14.3% 7.1% 14.3% 57.1% 7.1% 100%


0.0% 0.0% 0.0% 0.0% 100.0% 100%

TOTAL

LOANS

11 72 77 172 2 334

3.3% 21.6% 23.1% 51.5% 0.6% 100%

Families 18.3% 19.4% 24.6% 37.7% 0.0% 100%

While the bank‟s level of lending to low-income borrowers is poor, lending to moderate-income

borrowers is excellent. As displayed in the table above, the bank‟s level of lending to low-

income borrowers (3.3 percent) is below the percentage of low-income families in the

assessment area (18.3 percent), as well as the 2009 HMDA aggregate lending level to low-

income borrowers (4.7 percent). Alternatively, the bank‟s lending level to moderate-income

borrowers (21.6 percent) is above the percentage of moderate-income families within the

assessment area (19.4 percent) and the 2009 HMDA aggregate lending level to moderate-income

borrowers (14.6 percent). Therefore, the bank‟s overall distribution of HMDA loans among

customers of different income levels is good.



141





Gross Revenue Loan Amounts in $000s TOTAL

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


71.4% 9.5% 13.3% 94.3%


0.0% 0.0% 5.7% 5.7%

TOTAL 75 10 20 105

71.4% 9.5% 19.0% 100%


with revenues of $1 million or less. The highest concentration of these loans was in loan


available to small businesses in the assessment area. Based on Dun & Bradstreet estimates, 91.2

percent of businesses reporting for 2009 had revenues of $1 million or less. In addition, the

bank‟s level of lending to small businesses surpasses the 2009 CRA aggregate lending level, 23.2

percent. Therefore, the bank‟s level of lending to small businesses is excellent.



142






TOTAL <$100 >$100<$250 >$250<$500


84.4% 6.3% 9.4% 100%

Greater Than $1

Million

0 0 0 0

0.0% 0.0% 0.0% 0.0%

TOTAL 27 2 3 32

84.4% 6.3% 9.4% 100%

All of the bank‟s small farm loans made in this assessment area were originated to farmers with

revenues of $1 million or less. Additionally, the largest concentration of these loans was in loan


available to small farms in the assessment area. According to Dun & Bradstreet estimates, 99.2

percent of farms in the assessment area reported gross annual revenues of $1 million or less. The

bank‟s small farm lending is significantly higher than 2009 CRA aggregate data, which indicate

that 80.3 percent of small farm loans originated by other institutions were to small farms.

Therefore, the bank‟s distribution of small farm loans by borrower‟s revenue profile is excellent.


Arvest Bank did not make any community development loans in the nonMSA Missouri

Assessment Area during the review period, as was the case at the bank‟s previous CRA

evaluation.



143

INVESTMENT TEST

The bank made an adequate level of qualified community development investments and grants in

the nonMSA Missouri Assessment Area, exhibiting adequate responsiveness to credit and

community development needs in the assessment area. During this review period, the bank had

$211,955 in qualified investments attributable to this assessment area, which represents an

increase of $103,954 (96.3 percent) since the last CRA evaluation. All of the bank‟s qualified

investments are in MBS that finance affordable housing (MBS of $110,250 were purchased

during this review period, while $101,705 were purchased in a previous review period still

outstanding). Additionally, Arvest Bank made 10 community development grants totaling

$7,165 during this review period. Among the qualifying contributions were significant donations

to affordable housing organizations, food banks, and community service organizations that target




144

SERVICE TEST

Arvest Bank‟s service delivery systems are reasonably accessible to the nonMSA Missouri

Assessment Area, and the bank‟s record of opening and closing branches has not adversely

affected the accessibility of its delivery systems to LMI geographies and/or LMI individuals.

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

LMI individuals. Conversely, for the second consecutive CRA evaluation, the bank did not

provide any community development services in the nonMSA Missouri Assessment Area.


Arvest Bank operates four branch facilities within this assessment area, all of which are located

in middle-income census tracts. The fact that all of the bank‟s branches are located in middle-

income census tracts is in line with assessment area demographics. Nearly all of the census

tracts in this assessment area are designated as middle-income (97.6 percent), and nearly all

households reside within middle-income census tracts (98.4 percent). Therefore, Arvest Bank‟s

delivery systems are reasonably accessible to the geographies and individuals of different income

levels in the nonMSA Missouri Assessment Area.


The bank‟s record of opening and closing branches in the nonMSA Missouri Assessment Area

has not adversely affected the accessibility of its delivery systems, particularly to LMI

geographies and/or to LMI individuals. The bank opened one branch during this review period,

which is located in a middle-income census tract.


Branch facility business hours are relatively consistent across all branches in the nonMSA

Missouri Assessment Area. Most branches have Saturday operating hours and offer extended

hours of operations in their lobby and drive-up facilities at some point during the week. Most

drive-thru facilities remain open until 6 p.m., Monday through Friday, and are open until noon

on Saturdays. All branches offer the same standard products, including low-cost checking and

savings accounts, certificates of deposit, real estate and consumer loans, and other services.




Arvest Bank did not provide any community development services in the nonMSA Missouri

Assessment Area during the reviewed period, as was the case for the bank‟s previous CRA

evaluation.



145

OKLAHOMA45

CRA RATING FOR OKLAHOMA: SATISFACTORY


The Investment Test is rated: High Satisfactory


Major factors supporting the institution‟s CRA rating for Oklahoma include the following:

Arvest Bank‟s lending levels reflect good responsiveness to the credit needs of its Oklahoma

assessment areas.


throughout the Oklahoma assessment areas.

The overall distribution of loans by borrower‟s income/revenue profile reflects good

penetration among borrowers of different income levels and businesses/farms of different

sizes.

Arvest Bank makes a relatively high level of community development loans within the

Oklahoma assessment areas.


grants throughout the Oklahoma assessment areas.

Service delivery systems are accessible to geographies and individuals of different income

levels in Oklahoma assessment areas; further, changes in branch locations have not adversely

affected the accessibility of delivery systems, particularly to LMI geographies and/or LMI

individuals.

Arvest Bank personnel provides an adequate level of community development services

throughout the Oklahoma assessment areas.

45

The bank has branches located in Oklahoma that are also part of the Fort Smith multistate MSA. Consequently,

this statewide evaluation is adjusted so as not to reflect performance in the parts of Oklahoma contained within a

multistate MSA. Refer to the multistate MSA section of this report for the rating and evaluation of the

institution‟s performance in that area.



146


Arvest Bank has four separate assessment areas within Oklahoma, and scoping considerations

applicable to the review of the Oklahoma assessment areas are consistent with the overall CRA

examination scope, as presented in the Institution, Scope of Examination section. The bank‟s

performance within three of these assessment areas was reviewed using full-scope CRA

examination procedures, which formed the primary basis for the bank‟s overall ratings in the

state of Oklahoma. In light of branch structure, loan and deposit activity, and supervisory

history, performance in the Tulsa, Oklahoma MSA (Tulsa MSA) Assessment Area received

primary consideration, followed by the nonMSA Oklahoma Assessment Area, and the Lawton,

Oklahoma MSA (Lawton MSA) Assessment Area.

To augment the full-scope assessment area evaluations in Oklahoma, three community contact

interviews were conducted (and six community contacts, previously completed as part of

separate supervisory events, were referenced) in order to ascertain specific community credit

needs, community development opportunities, and local market conditions.46

Two interviews

took place in the Lawton MSA—one was with a representative from a chamber of commerce and

one was with a city official. The third community contact was with a single family housing

specialist, working in a north-central city in nonMSA Oklahoma.

DESCRIPTION OF INSTITUTION’S OPERATIONS IN OKLAHOMA

The bank operates 93 branches (38.9 percent of total branches) throughout the four CRA

assessment areas in the state of Oklahoma. The following table gives additional detail regarding

the bank‟s Oklahoma operations.

Assessment Area Offices

# Offices %

Deposits47

($000s) Deposits %

CRA Review

Procedures

Lawton MSA 5 5.4% $175,425 5.0% Full Scope

Tulsa MSA 29 31.2% $1,242,554 35.6% Full Scope

NonMSA Oklahoma 32 34.4% $1,209,260 34.6% Full Scope

Oklahoma City MSA 27 29.0% $864,614 24.8% Limited Scope

STATE TOTAL 93 100% $3,491,853 100% N/A

Deposits attributable to the 93 Oklahoma branches total $3.5 billion, which equates 37.7 percent

of total bank deposits.

46


section, as applicable to the Oklahoma full-scope review assessment area in which the community contacts were

made. 47




147

CONCLUSIONS WITH RESPECT TO PERFORMANCE TESTS IN OKLAHOMA

LENDING TEST

Arvest Bank‟s Lending Test performance in the state of Oklahoma is rated high satisfactory.

Lending levels reflect good responsiveness to Oklahoma assessment area credit needs. The

geographic distribution of loans analyses reflects adequate penetration throughout the Oklahoma

assessment areas. The loan distribution by borrower‟s income/revenue profile reflects good

penetration among customers of different income levels and businesses/farms of different sizes.

Lastly, Arvest Bank makes a relatively high level of community development loans in Oklahoma

assessment areas.

Lending Activity

The bank‟s lending levels in the state of Oklahoma reflect good responsiveness to assessment

area credit needs, based upon the lending activity analyzed under the Lending Test. This lending



Loan Type # % $(000s) %

Home Improvement 2,432 18.0% 85,358 8.6%

Home Purchase 385 2.8% 31,414 3.2%


Refinancing 1,713 12.7% 106,026 10.7%

Total HMDA related 4,549 33.7% 247,178 24.9%

Small Business 6,426 47.5% 640,275 64.4%

Small Farm 2,542 18.8% 106,449 10.7%

TOTAL LOANS 13,517 100% $993,902 100%



148


As displayed in the following tables, Arvest Bank‟s overall performance under the geographic

distribution of loans criterion within the state of Oklahoma is adequate.


Lawton MSA Adequate

Tulsa MSA Poor

Oklahoma NonMSA Adequate


Oklahoma City MSA Consistent

Arvest Bank‟s overall loan distribution by borrower‟s profile reflects good performance, based

on activity in the four Oklahoma assessment areas, as is detailed in the following tables.


Lawton MSA Good

Tulsa MSA Good

Oklahoma NonMSA Excellent





149


Arvest Bank makes a relatively high level of community development loans within the state of

Oklahoma. The following table displays community development loan performance in the bank‟s

four Oklahoma assessment areas.


Lawton MSA Relatively High Level

Tulsa MSA Leader

Oklahoma NonMSA Relatively High Level



The bank made 24 community development loans totaling $78.1 million in Oklahoma

assessment areas.



150

INVESTMENT TEST

Overall, the bank‟s performance in the Oklahoma assessment areas is rated high satisfactory

under the Investment Test. The following tables display investment and grant activity

performance by Oklahoma assessment area.


Lawton MSA Significant

Tulsa MSA Significant

Oklahoma NonMSA Excellent



Community development investments in Oklahoma assessment areas totaled $20.8 million—

$10.2 million in community development-related tax credits purchased during this review period

and $10.6 million in MBS ($4.7 million in new securities and $5.9 million in previous review

period investments still outstanding). The bank also made community development grants

totaling $866,473 in Oklahoma assessment areas.



151

SERVICE TEST

Overall, Arvest Bank‟s Service Test performance is rated low satisfactory in the state of

Oklahoma. The bank‟s service delivery systems are accessible to geographies and individuals of

different income levels throughout Oklahoma assessment areas. In addition, the bank‟s record of

opening and closing branches has not adversely affected the accessibility of its delivery systems,

particularly to LMI geographies and/or LMI individuals. Business hours and services do not

vary in a way that inconveniences portions of Oklahoma assessment areas, particularly LMI

geographies and/or LMI individuals. Lastly, Arvest Bank provides an adequate level of

community development services within Oklahoma assessment areas.


As displayed in the following tables, the bank‟s delivery systems in Oklahoma assessment areas

are accessible to geographies and individuals of different income levels.


Lawton MSA Accessible

Tulsa MSA Accessible

Oklahoma NonMSA Readily Accessible





152


Arvest Bank‟s record of opening and closing branches in its four Oklahoma assessment areas has




Lawton MSA Not Adversely Affected

Tulsa MSA Not Adversely Affected

Oklahoma NonMSA Improved Access


Oklahoma City MSA Exceeds



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

individuals. The bank‟s performance under this Service Test criterion is displayed by assessment

area in the following tables.

Assessment Area (full-scope review) Reasonableness of Business Hours and

Services

Lawton MSA Do Not Vary in a Way That Inconveniences

Tulsa MSA Do Not Vary in a Way That Inconveniences

Oklahoma NonMSA Do Not Vary in a Way That Inconveniences

Assessment Area (limited-scope review) Reasonableness of Business Hours and

Services




153


Arvest Bank provides an adequate level of community development services throughout its

Oklahoma assessment areas. The bank‟s performance under this Service Test criterion is

displayed by assessment area in the following tables.


Lawton MSA Adequate

Tulsa MSA Few, If Any

Oklahoma NonMSA Adequate





154

LAWTON, OKLAHOMA MSA (Full-Scope Review)

DESCRIPTION OF INSTITUTION’S OPERATIONS IN LAWTON, OKLAHOMA MSA

Bank Structure

Arvest Bank has designated the entire Lawton, Oklahoma MSA (Lawton MSA) as an assessment

area, within which the bank operates five of its 239 branches (2.1 percent). Of the five branches,

zero are in low-income census tracts, one is in a moderate-income census tract, three are in

middle-income census tracts, and one is located in an upper-income census tract. During the

review period, the bank did not open or close any branches in this assessment area. Based on

this branch network and other service delivery systems, the bank is adequately positioned to

deliver financial services to substantially all of the Lawton MSA.

The assessment area is a very competitive banking market, with 11 FDIC-insured institutions

operating within the Lawton MSA, based on the FDIC Deposit Market Share Report as of June

30, 2010. Of those 11 financial institutions, Arvest Bank ranked 5th

with a deposit market share

of 14.2 percent. The deposits held at branches throughout the Lawton MSA represent 1.9

percent of all Arvest Bank deposits.


The Lawton MSA is comprised of one county, Comanche County, in southwestern Oklahoma.

Based on 2000 census data, the assessment area had a total population of 114,996. According to

U.S. Census Bureau estimates as of July 2009, the population in the Lawton MSA has declined

slightly. The total MSA population in 2009 was estimated at 113,228. This marks a total MSA

population decrease of approximately 1.5 percent since the 2000 census.

As the demographics of this assessment area cover an MSA with a diverse population, credit

needs in the area are also varied, including a standard blend of consumer and business credit

products. Other particular credit needs in the assessment area (as noted primarily during

community contact interviews) include flexible lending programs for startup businesses and

credit products geared specifically to first time homebuyers. Further, as the Lawton MSA is an

environment with significant need, coupled with an adequate source of community development

intermediaries (such as nonprofit agencies, higher education institutions, and government

assistance entities), there is a high level of community development opportunity available for

financial institution participation.



155


The Lawton MSA consists of 29 geographies. Based on the 2000 census, the median family

income for the Lawton MSA was $39,201, which is slightly below the state of Oklahoma at

$40,709. As of 2009, the HUD estimated median family income for the Lawton MSA was

$50,700. The following table summarizes the distribution of geographies by income level and

the family population of those census tracts within the assessment area.




6.9% 31.0% 44.8% 17.2% 0.0% 100%

Family

Population

522 5,050 18,950 4,568 0 29,090

1.8% 17.4% 65.1% 15.7% 0.0% 100%

The following table displays the distribution of families by income level, as well as the income

distribution of all Oklahoma families.



Assessment

Area

5,968 4,964 6,449 11,709 29,090

20.5% 17.1% 22.2% 40.3% 100%

Oklahoma 187,672 168,813 200,838 370,380 927,703

20.2% 18.2% 21.7% 39.9% 100%


Housing affordability in the Lawton MSA appears to be similar to that of the overall state of

Oklahoma. As of the 2000 census, the Lawton MSA affordability ratio (47.0 percent) was just

slightly below the affordability ratio for the state of Oklahoma (49.0 percent). The median

housing value in the Lawton MSA was $70,463, which is slightly above the state of Oklahoma

($67,700). The median gross monthly rent in the Lawton MSA ($452) is also similar to the state

of Oklahoma ($456).



156



agricultural entities operating within the Lawton MSA. The following table depicts employment

levels by industry, comparing the Lawton MSA economy to the state of Oklahoma using the

“Location Quotient”48

measure.

Lawton MSA - Employment by Industry


Oklahoma

Natural Resources and Mining 163 0.6% 0.12




Information ND ND ND





Other Services ND ND ND

TOTAL 28,741 100% N/A

As displayed in the previous table, the largest industries in the Lawton MSA are trade,

transportation, and utilities; leisure and hospitality; and education and health services. The

Lawton MSA industry mix is similar to the state of Oklahoma, with a greater reliance on leisure

and hospitality and financial activities and less reliance on natural resources and mining.

The annual average unemployment rate for the Lawton MSA was 3.7 percent in 2008, which was

the same as the annual average for the state of Oklahoma. In 2009, the Lawton MSA average

unemployment rate increased to 5.2 percent, but it did not keep pace with 2009 average for the

state of Oklahoma, which increased to 6.6 percent. The unemployment rate in the Lawton MSA

continued to rise in 2010 and was projected to be at 6.8 percent in January 2011, an increase of

1.6 percent from the 2009 average; the state of Oklahoma was projected to have an

unemployment rate of 6.9 percent in January of 2011.49

48





157


Community contacts stated that the Lawton MSA is a growing, thriving community with credit

needs equally spread among small business and residential real estate. The housing market has

remained steady, and new construction is still relatively high despite the national economic

downturn. Furthermore, the population is getting younger as new business opportunities arise,

and the racial composition has remained relatively the same in the past five to ten years. Within

the city limits of Lawton is the Ft. Sill Army Base, which supports a steady employment base.

One contact stated that the low cost of living in Lawton can partially be attributed to the ample

supply of labor provided by the spouses of service members, and that service members and their

families represent a significant demand for low-income housing in and around the base.

All banks in the area were noted as being generally proactive in creating community

relationships. Also, several banks were praised for their special first time homebuyer programs,

which assists those that would not otherwise qualify for home ownership. However, it was noted

that there is still unmet need relating to small business startup financing, downtown

redevelopment, and general community services (shelters for at-risk families and individuals,

counseling centers for LMI individuals, and job search assistance/training centers).



158

CONCLUSIONS WITH RESPECT TO PERFORMANCE TESTS IN LAWTON,

OKLAHOMA MSA

LENDING TEST

Lending levels reflect excellent responsiveness to Lawton MSA Assessment Area credit needs.

The bank‟s overall geographic distribution of loans reflects adequate penetration throughout the

assessment area. Further, the overall distribution of loans by borrower‟s income/revenue profile

reflects good penetration among customers of different income levels and businesses/farms of

different sizes. Lastly, Arvest Bank makes a relatively high level of community development

loans in the Lawton MSA Assessment Area.

Lending Activity

The bank‟s lending levels within the Lawton MSA Assessment Area reflect excellent




Loan Type # % $(000s) %


Home Purchase 29 3.6% $2,177 3.3%


Refinancing 85 10.6% $5,181 7.8%


Small Business 529 65.9% $52,474 79.2%

Small Farm 32 4.0% $1,870 2.8%

TOTAL LOANS 803 100% $66,236 100%



159


As noted in the Description of Institution’s Operations in Lawton MSA section, this assessment

area includes two low-income census tracts and nine moderate-income census tracts,


from all three loan categories reviewed, the bank‟s geographic distribution of loans reflects

adequate penetration throughout this assessment area, including the 11 LMI census tracts. The


occupied housing data for the assessment area.





0.0% 14.7% 61.8% 23.5% 0.0% 100%

Refinance 1 8 73 35 0 117

0.9% 6.8% 62.4% 29.9% 0.0% 100%

Home

Improvement

0 11 42 19 0 72

0.0% 15.3% 58.3% 26.4% 0.0% 100%


0.0% 66.7% 33.3% 0.0% 0.0% 100%

TOTAL

LOANS

1 31 158 70 0 260

0.4% 11.9% 60.8% 26.9% 0.0% 100%

Owner Occupied

Housing 1.6% 15.8% 64.8% 17.9% 0.0% 100%

The bank‟s performance based on the geographic distribution of HMDA loans varied between

low- and moderate-income categories. As noted in the preceding table, the bank only made one

loan in a low-income census tract, representing 0.4 percent of all 2009 HMDA-lending activity.

This performance is poor, compared to the percentage of owner-occupied housing units in low-

income census tracts (1.6 percent). The bank‟s performance is also below the 2009 Lawton

MSA HMDA aggregate lending level in low-income census tracts (0.6 percent). Conversely, the

bank‟s penetration of moderate-income census tracts is good. While the bank‟s percentage of

lending in moderate-income census tracts (11.9 percent) is below the owner-occupied housing

percentage (15.8 percent), it is above that of other lenders in the MSA, based on the 2009

HMDA aggregate lending level in moderate-income census tracts (9.7 percent). Therefore, the

bank‟s overall geographic distribution of loans is adequate.



160







Small Business

Loans

18 78 137 72 0 305

5.9% 25.6% 44.9% 23.6% 0.0% 100%

Business

Institutions 10.4% 29.2% 48.1% 12.3% 0.0% 100%

The bank‟s performance based on the geographic distribution of small business loans varied

between low- and moderate-income categories. As noted in the table above, 5.9 percent of the

bank‟s small business loans were made in low-income census tracts, which is poor compared to

the estimated percentage of businesses located in low-income census tracts, 10.4 percent. The

bank‟s lending level in low-income census tracts is also below that of other lenders, based on

2009 Lawton MSA CRA aggregate data indicating that 11.5 percent of reported small business

loans were made in low-income census tracts. Conversely, the bank‟s performance in moderate-

income tracts is good. While the bank‟s lending percentage in moderate-income tracts, 25.6

percent, is less than the estimated percentage of businesses in moderate-income census tracts,

29.2 percent, it is above the CRA aggregate lending level in moderate-income census tracts, 24.4

percent. Therefore, the bank‟s overall geographic distribution of small business loans is

adequate.



161






Small Farm

Loans

0 0 13 4 0 17

0.0% 0.0% 76.5% 23.5% 0.0% 100%

Agricultural

Institutions 0.5% 7.4% 77.9% 14.2% 0.0% 100%


this assessment area. However, based on the limited loan volume from both 2008 and 2009, the

geographic distribution of small farm loans is adequate. Based on 2009 lending activity, the

bank did not make any small farm loans in LMI census tracts. This performance is poor, in light

of the fact that an estimated 7.9 percent of farms are located in LMI census tracts. Furthermore,

other lenders made 4.0 percent of small farm loans in LMI census tracts, based on 2009 CRA

aggregate lending activity within the assessment area.

Conversely, the geographic distribution of the bank‟s 2008 small farm loans is good. While the

bank only made 15 small farm loans in this assessment area during 2008, 13.3 percent of these

loans were made in low-income census tracts. This performance is well above the estimated

percentage of farms in low-income census tracts, 0.5 percent, and the 2008 CRA aggregate, low-

income geography lending level, 0.9 percent. The bank made 6.7 percent of 2008 small farm

loans in moderate-income census tracts, which is on par with the estimated percentage of farms

located in moderate-income census tracts, 7.4 percent, and the bank‟s moderate-income

geography lending level is above that of other lenders, based on 2008 CRA aggregate data, 4.7

percent. Therefore, while the bank‟s performance varied significantly between data years, the

overall geographic distribution of small farm loans is adequate.



162



all three loan categories reviewed. The following table shows the distribution of HMDA

reported loans by borrower income level in comparison to family population data.





5.9% 14.7% 22.1% 51.5% 5.9% 100%

Refinance 2 15 17 82 1 117

1.7% 12.8% 14.5% 70.1% 0.9% 100%

Home

Improvement

7 12 15 35 3 72

9.7% 16.7% 20.8% 48.6% 4.2% 100%


0.0% 0.0% 0.0% 0.0% 100.0% 100%

TOTAL

LOANS

13 37 47 152 11 260

5.0% 14.2% 18.1% 58.5% 4.2% 100%

Families 20.5% 17.1% 22.2% 40.3% 0.0% 100%

The bank‟s level of lending to LMI borrowers within the assessment area is good. Based on the

above table, the bank‟s level of lending to low-income borrowers (5.0 percent) is lower than the

low-income family population (20.5 percent). However, this performance is adequate, as the

bank‟s level of lending is higher than the 2009 HMDA aggregate lending level to low-income

borrowers in the assessment area (4.6 percent). Similarly, the bank‟s HMDA lending level to

moderate-income borrowers (14.2 percent) is lower than the percentage of moderate-income

families within the assessment area (17.1 percent), but the bank‟s performance is good compared

to the aggregate lending level to moderate-income borrowers (11.6 percent).



163






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


78.2% 8.9% 6.9% 94.1%

Greater Than $1

Million

8 2 8 18

2.6% 0.7% 2.6% 5.9%

TOTAL 245 29 29 303

80.9% 9.6% 9.6% 100%


majority of its small business loans (94.1 percent) to businesses with revenues of $1 million or

less. The highest concentration of these loans was for loan amounts of $100,000 or less, which




businesses greatly surpasses that of other lenders, based on 2009 CRA aggregate lending in the

assessment area, 19.6 percent.

50

This analysis included 305 small business loans; however, two of these loans were removed from the sample




164






TOTAL <$100 >$100<$250 >$250<$500


82.4% 11.8% 0.0% 94.1%

Greater Than $1

Million

1 0 0 1

5.9% 0.0% 0.0% 5.9%

TOTAL 15 2 0 17

88.2% 11.8% 0.0% 100%

As displayed in the preceding table, the bank had a relatively low level of small farm loan

activity in this assessment area. However, based on the limited loan activity available for

review, the distribution of small farm loans by borrower‟s profile is good. A high percentage of

small farm loans (94.1 percent) was made to farms with revenues of $1 million or less. The

highest concentration of these loans was in loan amounts of $100,000 or less, which further

demonstrates the bank‟s willingness to make credit available to small farms in the assessment

area. According to Dun & Bradstreet estimates, 99.5 percent of farms in the assessment area

reported revenues of $1 million or less. Furthermore, the bank‟s small farm lending performance

is higher than the 2009 CRA aggregate level of lending to small farms, 91.4 percent.


Arvest Bank makes a relatively high level of community development loans in the Lawton MSA

Assessment Area. The bank made two community development loans totaling $6.3 million

during this review period. Both loans were for revitalization projects inside low-income census

tracts.



165

INVESTMENT TEST


grants within the Lawton MSA Assessment Area, exhibiting good responsiveness to credit and

community development needs in the assessment area. As of this evaluation date, the bank had a

community development investment balance of $515,130 attributable to this assessment area,

which represents an increase of 40.3 percent since the last CRA evaluation. All of these

community development investments are in MBS that finance affordable housing (MBS of

$211,913 were purchased during this review period, while $303,217 were purchased in a

previous review period still outstanding). Additionally, Arvest Bank made 34 grants totaling

$55,436 throughout the assessment area. Among these numerous grants were significant

donations to schools serving a majority of students from LMI families, affordable housing

organizations, and community service organizations that assist the needy.



166

SERVICE TEST

Arvest Bank‟s service delivery systems are accessible to the Lawton MSA Assessment Area, and

the bank‟s record of opening and closing branches has not adversely affected the accessibility of

its delivery systems to LMI geographies and/or LMI individuals. Business hours and services do

not vary in a way that inconveniences LMI geographies and/or LMI individuals. Lastly, the

bank provides an adequate level of community development services in the Lawton MSA

Assessment Area.


Arvest Bank operates five branch facilities within the Lawton MSA. The following table

illustrates the distribution of these facilities by income level of the geography, as compared to

key assessment area demographics.




Branches 0 1 3 1 0 5

0.0% 20.0% 60% 20.0% 0.0% 100%

Census Tracts 6.9% 31.0% 44.8% 17.2% 0.0% 100%

Household

Population 2.5% 21.3% 61.5% 14.8% 0.0% 100%

While the bank does not operate any branches in low-income census tracts within the Lawton

MSA Assessment Area, the two low-income census tracts represent a very small part of the

overall assessment area, based on location of households (2.5 percent). Further, the bank is still

able to adequately serve these geographies, as there are several branches within a reasonable

distance of both low-income census tracts. The bank operates one branch in a moderate-income

census tract (20.0 percent), which is in line with the percentage of households within moderate-

income census tracts (21.3 percent). Additionally, all five of the bank‟s branches are located

near the center of Lawton, where all of the LMI geographies are located. Based on this

information, the bank‟s service delivery systems are accessible to geographies and individuals of

different income levels in the Lawton MSA Assessment Area.


The bank‟s record of opening and closing branches in the Lawton MSA Assessment Area has not

adversely affected the accessibility of its delivery systems, particularly to LMI geographies


period.



167



the Lawton MSA Assessment Area. Most branches have Saturday operating hours and offer

extended hours of operations in their lobby and drive-up facilities at some point during the week.







Arvest Bank personnel provides an adequate level of community development services within

the Lawton MSA Assessment Area. Throughout the review period, two bank employees

provided financial expertise to community development organizations. One employee served as

board chairman of a community service organization aiding the needy in the city of Lawton. The

other employee served a school district with a majority of students from LMI families.



168

TULSA, OKLAHOMA MSA (Full-Scope Review)

DESCRIPTION OF INSTITUTION’S OPERATIONS IN TULSA, OKLAHOMA MSA

Bank Structure

Arvest Bank has designated the entire Tulsa, Oklahoma MSA (Tulsa MSA) as an assessment

area within which the bank operates 29 of its 239 branches (12.1 percent). Of the 29 branches,

zero are in low-income census tracts, seven are in moderate-income census tracts, 12 are in

middle-income census tracts, and ten are located in upper-income census tracts. During the

review period, the bank did not open or close any branches in this assessment area. Based on

this branch network and other service delivery systems, the bank is adequately positioned to

deliver financial services to substantially all of the Tulsa MSA.

This assessment area is a highly competitive banking market, with a total of 66 FDIC-insured

institutions operating within the Tulsa MSA, based on the FDIC Deposit Market Share Report as

of June 30, 2010. Of those 66 financial institutions, Arvest Bank ranked 3rd

with a deposit

market share of 6.5 percent. The deposits held at branches throughout the Tulsa MSA represent

13.4 percent of all Arvest Bank deposits.


The Tulsa MSA is a seven-county area in northeastern Oklahoma. The seven counties

comprising the MSA are Creek, Okmulgee, Osage, Pawnee, Rogers, Tulsa, and Wagoner. Based

on 2000 census data, the assessment area had a total population of 859,532. The majority of the

population lives in Tulsa County (563,299). The remaining counties range in population from

16,612 (Pawnee County) to 70,641 (Rogers County). According to U.S. Census Bureau

estimates as of July 2009, the population in the Tulsa MSA has grown to 929,015, marking an

increase of approximately 8.1 percent since the 2000 census.

As the demographics of this assessment area cover a wide metropolitan area and the population



primarily during community contact interviews) include general banking services geared towards

LMI individuals (particularly those in need of reestablishing credit history), foreclosure

prevention assistance, and financial education programs for first time home buyers and small

business entrepreneurs. Further, as the Tulsa MSA is an environment with significant need,

coupled with a strong source of community development intermediaries (such as nonprofit

agencies, higher education institutions, and government assistance entities) there is a high level

of community development opportunity available for financial institution participation.



169


The MSA consists of 264 geographies. Based on the 2000 census, the median family income for

the Tulsa MSA was $45,678, which was greater than the state of Oklahoma at $40,709. As of

2009, the HUD estimated median family income for the Tulsa MSA was $57,600. The following

table summarizes the distribution of geographies by income level and the family population of

those census tracts within the assessment area.



Census Tracts 7 67 111 79 0 264

2.7% 25.4% 42.0% 29.9% 0.0% 100%

Family

Population

3,612 53,078 108,176 67,361 0 232,227

1.6% 22.9% 46.6% 29.0% 0.0% 100%

The following table displays the distribution of families, by income level, that reside in this

assessment area as well as the statewide percentage for Oklahoma.



Assessment

Area

46,267 42,578 50,189 93,193 232,227

19.9% 18.3% 21.6% 40.1% 100%

Oklahoma 187,672 168,813 200,838 370,380 927,703

20.2% 18.2% 21.6% 39.9% 100%


While income levels in the assessment area are relatively higher than income levels for the state

of Oklahoma overall, higher housing costs in the Tulsa MSA keep overall housing affordability

in the assessment area below that of the state. As of the 2000 census, the Tulsa MSA

Assessment Area housing affordability ratio (46.0 percent) was less than the affordability ratio

for state of Oklahoma (49.0 percent). Of the seven MSA counties, buying a home is most

affordable in Pawnee County (60.0 percent) and least affordable in Tulsa County (44.0 percent).

The median housing value in the assessment area ($79,950) is significantly higher than that of

the state of Oklahoma ($67,700). The median gross monthly rent in the Tulsa MSA is also

higher ($503) than the state of Oklahoma figure ($456). These numbers show that the Tulsa

MSA is less affordable than the state of Oklahoma as a whole.



170



agricultural entities operating within the Tulsa MSA. The following table depicts employment

levels by industry, comparing the Tulsa MSA economy to the state of Oklahoma using the

“Location Quotient”51

measure.

Tulsa MSA - Employment by Industry


Oklahoma

Natural Resources and Mining 7,412 2.1% 0.46




Information 9,070 2.6% 1.11





Other Services 10,451 3.0% 0.97

TOTAL 347,621 100% N/A

As displayed in the previous table, the largest industries in the Tulsa MSA are trade,

transportation, and utilities; education and health services; and professional and business

services. The Tulsa MSA industry mix is similar to the state of Oklahoma, with a greater

reliance on manufacturing and less reliance on natural resources and mining. The recent annual

average unemployment rates for the Tulsa MSA (3.7 percent in 2008 and 6.9 percent in 2009)

are similar to the average unemployment rates for the state of Oklahoma (3.7 percent in 2008 and

6.6 percent in 2009).52

51





171


Community contacts stated that the Tulsa economy has been well insulated from the losses that

many area economies are experiencing. Furthermore, when Tulsa experiences the impact of

negative economic conditions, the area recovers quickly. Yet, there is still strong need for

community development in Tulsa, particularly as related to LMI housing and small businesses.

Related to affordable housing needs, contacts said that area banks could provide more resources

focused on home ownership education, down payment assistance, and foreclosure prevention. In

addition, residents who are renting properties would benefit from programs aimed at obtaining

initial security deposits and maintaining utility services. Community contacts felt that LMI

residents need more general banking services geared toward them, especially for those that have

tarnished credit.

Opportunities are available for area financial institutions to finance small businesses, particularly

in land development projects, as the cost of available space for manufacturing and retail

development has increased significantly. These financing arrangements will also help attract

new businesses, meet the area‟s growing need for retail services, and support new job growth.

Additionally, financial expertise is needed in the areas of business plan review, credit history

management, and businesses start-up financing. Overall, community contacts stated that many

area financial institutions are visible in the community, providing both financial and nonfinancial

assistance to area businesses.



172

CONCLUSIONS WITH RESPECT TO PERFORMANCE TESTS IN TULSA,

OKLAHOMA MSA

LENDING TEST

Lending levels reflect good responsiveness to Tulsa MSA Assessment Area credit needs. The

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

loan distribution by borrower‟s income/revenue profile reflects good penetration among

customers of different income levels and businesses/farms of different sizes. Lastly, Arvest

Bank is a leader in making community development loans in the Tulsa MSA Assessment Area.

Lending Activity

The bank‟s lending levels within the Tulsa MSA reflect good responsiveness to assessment area

credit needs based upon the lending activity analyzed under the Lending Test. This lending



Loan Type # % $(000s) %


Home Purchase 148 3.4% $16,170 4.0%


Refinancing 622 14.4% $40,927 10.1%


Small Business 2,219 51.5% $287,187 70.6%

Small Farm 236 5.5% $14,605 3.6%

TOTAL LOANS 4,310 100% $406,911 100%



173


As noted in the Description of Institution’s Operations in Tulsa MSA section, this assessment

area includes seven low-income census tracts and 67 moderate-income census tracts,


from all three loan categories reviewed, the bank‟s geographic distribution of loans reflects poor

penetration throughout this assessment area, particularly among the 74 LMI census tracts. The


occupied housing demographics for the assessment area.




Home Purchase 2 57 229 292 0 580

0.3% 9.8% 39.5% 50.3% 0.0% 100%

Refinance 1 48 330 503 0 882

0.1% 5.4% 37.4% 57.0% 0.0% 100%

Home

Improvement

3 49 223 223 0 498

0.6% 9.8% 44.8% 44.8% 0.0% 100%


0.0% 75.0% 0.0% 25.0% 0.0% 100%

TOTAL

LOANS

6 157 782 1,019 0 1,964

0.3% 8.0% 39.8% 51.9% 0.0% 100%

Owner Occupied

Housing 0.9% 20.8% 47.4% 30.8% 0.0% 100%

While overall lending levels to borrowers in LMI census tracts were low, the bank‟s geographic

distribution of HMDA loans still appears to be marginally adequate, particularly when compared

to the performance of other lenders. As displayed in the table above, the bank‟s level of lending

in low-income census tracts (0.3 percent) is less than the percentage of owner-occupied housing

units in low-income geographies (0.9 percent); however, this performance is still adequate, as it

equals the low-income census tract lending level made by other lenders, based on 2009 HMDA

aggregate lending activity in the Tulsa MSA. Conversely, the bank‟s lending level in moderate-

income census tracts (8.0 percent) is poor, as it is below both the percentage owner-occupied

housing units in moderate-income geographies (20.8 percent) and the aggregate lending level

(9.7 percent). In summary, the bank‟s combined LMI geography lending level (8.3 percent) is

low; however, it is within range of the combined LMI lending level of other lenders (10.0

percent), reflecting adequate performance.



174


displayed in the following table compared to the distribution of assessment area businesses by

geography income level.




Small Business

Loans

2 189 435 705 0 1,331

0.2% 14.2% 32.7% 53.0% 0.0% 100%

Business

Institutions 1.1% 23.9% 41.6% 33.3% 0.0% 100%

The analysis of the bank‟s small business loan activity reflects poor penetration throughout the

assessment area. The bank‟s low-income census tract lending level (0.2 percent) is poor

compared to the percentage of businesses within these geographies (1.1 percent) and the 2009

Tulsa MSA CRA aggregate lending level in low-income census tracts (0.9 percent). The bank‟s

performance in moderate-income tracts is also poor, as the bank‟s percentage of small business

loans in moderate-income tracts (14.2 percent) is less than the percentage of businesses located

in these geographies (23.9 percent) and the aggregate lending level (20.8 percent).

Finally, the geographic distribution of small farm loans is displayed in the following table,

compared to the distribution of assessment area farms by geography income level.




Small Farm

Loans

0 15 91 9 0 115

0.0% 13.0% 79.1% 7.8% 0.0% 100%

Agricultural

Institutions 0.1% 24.8% 57.0% 18.1% 0.0% 100%

The bank‟s geographic distribution of small farm loans is poor. While the level of opportunity to

make small farm loans in low-income census tracts is negligible, 24.8 percent of assessment area

farms are located in moderate-income census tracts; however, the bank‟s level of lending in

moderate-income geographies, 13.0 percent, is well below the demographic figure. The bank‟s

level of lending in moderate-income census tracts is also significantly below that of other

lenders, 26.8 percent, based 2009 CRA aggregate data.



175



all three loan categories reviewed. The following table shows the distribution of HMDA


demographics.




Home Purchase 62 149 139 221 9 580

10.7% 25.7% 24.0% 38.1% 1.6% 100%

Refinance 59 145 210 453 15 882

6.7% 16.4% 23.8% 51.4% 1.7% 100%

Home

Improvement

43 90 111 242 12 498

8.6% 18.1% 22.3% 48.6% 2.4% 100%


0.0% 0.0% 0.0% 0.0% 100.0% 100%

TOTAL

LOANS

164 384 460 916 40 1,964

8.4% 19.6% 23.4% 46.6% 2.0% 100%

Families 19.9% 18.3% 21.6% 40.1% 0.0% 100%

The bank‟s level of lending to both low-income and moderate-income borrowers within the

assessment area is good. Based on the above table, the bank‟s level of lending to low-income

borrowers (8.4 percent) is lower than the percentage of low-income families (19.9 percent);

however, the bank‟s performance is significantly higher than that of other lenders (6.5 percent),

based on 2009 Tulsa MSA HMDA aggregate data. Furthermore, the bank‟s HMDA lending

percentage to moderate-income borrowers (19.6 percent) is above the percentage of moderate-

income borrowers within the assessment area (18.3 percent), and it similar to aggregate lending

to moderate-income borrowers (19.7 percent).



176






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

$1 Million or Less 939 95 89 1,123

71.1% 7.2% 6.7% 85.0%

Greater Than $1

Million

70 51 77 198

5.3% 3.9% 5.8% 15.0%

TOTAL 1,009 146 166 1,321

76.4% 11.1% 12.6% 100%

The bank‟s level of lending to small businesses is good. The bank originated a strong majority

of its small business loans (85.0 percent) to businesses with gross annual revenues of $1 million

or less. The highest concentration of these loans was in amounts of $100,000 or less, which




businesses is well above that of other lenders (19.0 percent) based on 2009 CRA aggregate data.

53

This analysis included 1,331 small business loans; however, ten of these loans were removed from the sample




177






TOTAL <$100 >$100<$250 >$250<$500


87.0% 8.7% 4.3% 100%


0.0% 0.0% 0.0% 0.0%

TOTAL 100 10 5 115

87.0% 8.7% 4.3% 100%

Arvest Bank‟s lending to small farms is excellent. All small farm loans made in this assessment

area were originated to farmers with gross annual revenues $1 million or less. The highest

concentration of these loans was in loan amounts of $100,000 or less, which further demonstrates

the bank‟s willingness to make credit available to small farms in the assessment area. According

to Dun & Bradstreet estimates, 98.9 percent of farms in the assessment area reported revenues of

$1 million or less. The bank‟s level of lending to small farms is significantly higher than that of

other lenders (70.6 percent) based on 2009 CRA aggregate data.


Arvest Bank continues to be a leader in making community development loans in the Tulsa

MSA. The bank originated or renewed nine community development loans totaling $52.0

million during this review period. Five of the loans financed projects that revitalize or stabilize

LMI geographies. Three of the loans were to community service agencies serving LMI

individuals in the Tulsa MSA, and two loans were for affordable housing targeted to LMI

individuals and families.



178

INVESTMENT TEST


grants within the Tulsa MSA. As of the evaluation date, the bank had a community development

investment balance of $5.5 million attributable to this assessment area. Of this balance, $4.0

million is invested in MBS that finance affordable housing (MBS of $1.8 million were purchased

during this review period, while $2.2 million were purchased in a previous review period still

outstanding). In addition, the bank has investments in projects associated with LIHTCs that total

$100,000 and NMTCs that total $1.4 million. Arvest Bank also made a significant level of

qualified community development grants within the Tulsa MSA. The bank made 49 community

development grants totaling $281,260 during this review period. Among the numerous

contributions were significant grants to schools serving a majority of students from LMI

families, affordable housing organizations, and community service organizations targeting the

needs of LMI families.

Community Development Initiatives

As noted above, the bank makes significant use of LIHTC and NMTC investments to further

community development in the Tulsa MSA. LIHTCs fund the construction of new rental

housing and rehabilitation of existing housing for low-income households. NMTCs provide

equity capital to further commercial economic development activities in underserved

geographies.

Responsiveness to Credit and Community Development Needs

Arvest Bank exhibits good responsiveness to credit and community development needs in the

Tulsa MSA Assessment Area. Community contacts noted that the major credit needs in the area

are related to residential real estate and small businesses financing. The bank made numerous

donations to affordable housing agencies, made significant use of LIHTC investments, and

invested in MBS that finance affordable housing for LMI homeowners. Additionally, NMTC

investments further commercial economic development, where it is needed most in the Tulsa

MSA.



179

SERVICE TEST

Arvest Bank‟s service delivery systems are accessible to the Tulsa MSA Assessment Area, and

the bank‟s record of opening and closing branches has not adversely affected the accessibility of

its delivery systems to LMI geographies and/or LMI individuals. Business hours and services do

not vary in a way that inconveniences LMI geographies and/or LMI individuals. Conversely, the

bank provides few community development services in the Tulsa MSA Assessment Area.


Arvest Bank operates 29 branch facilities within the Tulsa MSA. The following table illustrates

the distribution of these facilities by income level of the geography, as compared to key

assessment area demographics.




Branches 0 7 12 10 0 29

0.0% 24.1% 41.4% 34.5% 0.0% 100%

Census Tracts 2.7% 25.4% 42.0% 29.9% 0.0% 100%

Household

Population 1.8% 24.5% 46.4% 27.3% 0.0% 100%

While the bank does not operate any branches in low-income census tracts within the Tulsa MSA

Assessment Area, these geographies represent a very small part of the overall assessment area,

based on location of households (1.8 percent). The bank operates seven branches in moderate-

income census tracts (24.1 percent), which is in line with the percentage of households within

moderate-income census tracts (24.5 percent). Based on this information, the bank‟s service

delivery systems are accessible to geographies and individuals of different income levels in the

Tulsa MSA Assessment Area.


The bank‟s record of opening and closing branches in the Tulsa MSA Assessment Area has not

adversely affected the accessibility of its delivery systems, particularly to LMI geographies


period.



180



the Tulsa MSA Assessment Area. Most branches have Saturday operating hours and offer

extended hours of operations in their lobby and drive-up facilities at some point during the week.







Arvest Bank personnel provides few community development services in the Tulsa MSA

Assessment Area. During this review period, one bank employee served on the board of

directors of an organization assisting at-risk, LMI families and individuals in Tulsa.



181

OKLAHOMA CITY, OKLAHOMA MSA (Limited-Scope Review)

DESCRIPTION OF INSTITUTION’S OPERATIONS IN OKLAHOMA CITY,

OKLAHOMA MSA

Arvest Bank designated the entire Oklahoma City, Oklahoma MSA (Oklahoma City MSA) as an

assessment area. The Oklahoma City MSA is located in central Oklahoma and is comprised of

seven counties: Canadian, Cleveland, Grady, Lincoln, Logan, McClain, and Oklahoma. The

bank operates 27 branches in the Oklahoma City MSA, and, during the review period, the bank

opened two branches—one in a moderate-income census tract and one in a middle-income

census tract.



Census Tracts 24 100 122 83 5 334

7.2% 29.9% 36.5% 24.9% 1.5% 100%

Family

Population

7,706 72,954 115,738 93,249 0 289,647

2.7% 25.2% 40.0% 32.2% 0.0% 100%

Household

Population

13,483 119,272 171,877 125,183 176 429,991

3.1% 27.7% 40.0% 29.1% < 0.1% 100%

Business

Institutions

2,199 12,195 20,546 18,075 1,042 54,057

4.1% 22.6% 38.0% 33.4% 1.9% 100%

Agricultural

Institutions

7 194 577 342 3 1,123

0.6% 17.3% 51.4% 30.5% 0.3% 100%

Assessment Area Demographics by Income Level of Population




20.0% 18.2% 21.7% 40.1% 100%


22.7% 16.7% 19.5% 41.1% 100%



182

CONCLUSIONS WITH RESPECT TO PERFORMANCE TESTS IN OKLAHOMA

CITY, OKLAHOMA MSA

LENDING TEST


Test performance for the state of Oklahoma, as displayed in the following table. For more

detailed information relating to the bank‟s Lending Test performance in this assessment area, see

the tables contained in Appendix C.


Lending Activity Below


Distribution of Loans by Borrower‟s Profile Consistent

Community Development Lending Activities Consistent

OVERALL CONSISTENT

INVESTMENT TEST

Arvest Bank had community development investments of $569,923 (MBS purchased in a

previous review period still outstanding) and 31 grants for $72,162 attributable to this assessment

area, which is consistent with overall Investment Test performance for the state of Missouri.

For this review period, Arvest Bank had outstanding community development investments

totaling $4.0 million ($2.5 million in MBS purchased in this review period and $1.5 million

purchased in a previous review period still outstanding) and 63 grants totaling $186,048 in the

Oklahoma City MSA Assessment Area, which is consistent with overall Investment Test

performance for the state of Oklahoma.



183

SERVICE TEST


Service Test performance in state of Oklahoma, as is detailed in the following table.



Changes in Branch Locations Exceeds


Community Development Services Consistent

OVERALL CONSISTENT



184

NONMETROPOLITAN OKLAHOMA STATEWIDE

AREA (Full-Scope Review)


OKLAHOMA

Bank Structure

Arvest Bank has one assessment area within nonMSA Oklahoma, where it operates 32 of its 239

branches (13.4 percent). Of the 32 branches, one is in a low-income census tract, five are in

moderate-income census tracts, 21 are in middle-income census tracts, and five are located in

upper-income census tracts. Based on this branch network and other service delivery systems,

the bank is largely able to serve most of this geographically expansive assessment area, with

secondary accessibility in the extreme northwest and southeast portions of the assessment area.

This assessment area covers a large portion of the state of Oklahoma, where 142 FDIC-insured

institutions operate at least one office, based on the FDIC Deposit Market Share Report as of

June 30, 2010. Of these 142 financial institutions, Arvest Bank ranked 3rd

with a deposit market

share of 6.7 percent. Based on this information, Arvest Bank deposits held at branches

throughout nonMSA Oklahoma represent 13.1 percent of the bank‟s total deposits.


The nonMSA Oklahoma Assessment Area covers most of the central and eastern portions of the

state of Oklahoma; it includes the following 43 counties: Adair, Atoka, Blaine, Bryan, Caddo,

Carter, Cherokee, Choctaw, Coal, Cotton, Craig, Delaware, Garfield, Garvin, Grant, Haskell,

Hughes, Jefferson, Johnston, Kay, Kingfisher, Kiowa, Latimer, Love, McCurtain, McIntosh,

Marshall, Mayes, Murray, Muskogee, Noble, Nowata, Okfuskee, Ottawa, Payne, Pittsburg,

Pontotoc, Pottawatomie, Pushmataha, Seminole, Stephens, Tillman, and Washington. Based on

2000 census data, the assessment area had a total population of 1,112,239. The county with the

largest population is Muskogee County (69,451). The remaining counties ranged in population

from 5,144 (Grant County) to 68,190 (Payne County). According to U.S. Census Bureau

estimates as of July 2009, the population in the nonMSA Oklahoma Assessment Area has grown

to 1,134,338, marking a population increase of 2.0 percent since the 2000 census.

As the demographics of this assessment area cover an expansive part of rural Oklahoma,

business and personal credit needs in the area are varied, but there is heightened demand for

agricultural credit and housing-related credit. Other particular credit needs in the assessment

area (as noted primarily during community contact interviews) relate to credit products and

financial education (particularly related to credit history management) geared to the low-income

population. Further, many parts of this assessment area are sparsely populated, and while there

is significant need for community development involvement, oftentimes these rural areas lack

community development resources from which to draw. Of the 206 middle-income census tracts



185

in this assessment area, 93 were categorized as “distressed” and 11 were categorized as both

“underserved” and “distressed” in 2009.54


Based on the 2000 census data, the median family income for the assessment area was $35,230,

which was less than the state of Oklahoma figure, $40,709, but similar to the figure for nonMSA

Oklahoma overall, $35,517. As of 2009, the HUD estimated median family income for nonMSA

Oklahoma was $46,400. The following table summarizes the distribution of geographies by

income level and the family population of those census tracts within the assessment area.



Census Tracts 1 50 206 34 0 291

0.3% 17.2% 70.8% 11.7% 0.0% 100%

Family

Population

323 43,266 212,448 47,898 0 303,935

0.1% 14.2% 69.9% 15.8% 0.0% 100%

The following table displays the distribution of families by income level, as well as the

distribution of families for the state of for Oklahoma overall.



Assessment

Area

62,740 55,344 65,368 120,483 303,935

20.6% 18.2% 21.5% 39.6% 100%

Oklahoma 187,672 168,813 200,838 370,380 927,703

20.2% 18.2% 21.6% 39.9% 100%

54





186


While income levels in the nonMSA Oklahoma Assessment Area are lower than those for the

state of Oklahoma overall, housing in the assessment appears to be relatively more affordable,

due to lower housing costs. The nonMSA Oklahoma Assessment Area had a housing

affordability ratio of 52.0 percent as of the 2000 census, which indicated greater affordability

relative to the state of Oklahoma figure, 49.0 percent. The median housing value in the

assessment area was $54,323, which is much lower than the state of Oklahoma at $67,700.

Median gross monthly rent in the assessment area is also lower at $391 than the state of

Oklahoma at $456.



agricultural entities operating within the nonMSA Oklahoma Assessment Area. Based on this




187

Industry Total


Accommodation and Food Services 2,246 4.4%


Agric., Forestry, Fishing and Hunting 3,099 6.1%




Finance and Insurance 1,597 3.2%

Health Care and Social Assistance 3,658 7.2%


Manufacturing 1,748 3.4%


Mining 712 1.4%


Prof., Scientific, and Tech. Svc. 3,561 7.0%


Real Estate and Rental and Leasing 1,822 3.6%


Transportation 1,321 2.6%

Utilities 210 0.4%

Wholesale Trade 1,917 3.8%

TOTAL 50,690 100%


administrative, support, waste and removal services; retail trade; and other services. The annual

unemployment rates in the assessment area varied significantly by county. The lowest 2008

average annual unemployment rate was 2.3 percent (Kingfisher County), and the highest

unemployment rate was 6.5 percent (McCurtain County). In 2009, 3.9 percent was the lowest

average annual unemployment rate (Grant County), and the highest rate was 10.7 percent

(Latimer County). In comparison, the average annual unemployment rates for the state of

Oklahoma were 3.7 percent in 2008 and 6.6 percent in 2009.55

55




188


According to community contacts, the rural areas of Oklahoma have stable economies and

sufficient access to financial services. The primary credit needs in rural Oklahoma relate to

housing and agricultural activities. The state, as a whole, has experienced approximately 7

percent population growth in the last ten years. In light of the multiple large cities in the state,

many rural areas have become bedroom communities, where people reside while seeking

employment in the larger cities.

Overall, initiatives supporting rural development are key to sustaining the economy of nonMSA

Oklahoma. Community contacts stated that many banks in the state participate in business-

cooperative programs, as well as other programs supporting rural housing development and

utilities assistance. Among the rural housing needs are direct loans, housing rehabilitation loans

and grants, and technical assistance grants for low-income individuals. One challenge facing the

area is finding credit for low-income applicants with poor credit history; additional bank

assistance for these individuals would be welcomed, particularly as related to specialized credit

products and financial education.



189


NONMETROPOLITAN OKLAHOMA

LENDING TEST

Lending levels reflect good responsiveness to nonMSA Oklahoma Assessment Area credit




and businesses/farms of different sizes. Lastly, the bank makes a relatively high level of

community development loans in the nonMSA Oklahoma Assessment Area.

Lending Activity

The bank‟s lending levels within the nonMSA Oklahoma Assessment Area reflect good




Loan Type # % $(000s) %


Home Purchase 143 2.2% $7,319 2.1%


Refinancing 700 10.8% $41,747 12.0%


Small Business 2,753 42.5% $186,032 53.5%

Small Farm 2,211 34.1% $84,561 24.3%

TOTAL LOANS 6,484 100% $347,982 100%



190


As noted in the Description of Institution’s Operations in nonMSA Oklahoma section, this

assessment area includes one low-income census tract and 50 moderate-income census tracts,

representing 17.5 percent of all assessment area geographies. Overall, based on lending activity

from all three loan categories reviewed, the geographic distribution of loans reflects adequate

penetration throughout the assessment area. The following table displays the geographic

distribution of HMDA loans in comparison to owner-occupied housing demographics for the

assessment area




Home Purchase 0 62 297 159 0 518

0.0% 12.0% 57.3% 30.7% 0.0% 100%

Refinance 0 119 698 239 0 1,056

0.0% 11.3% 66.1% 22.6% 0.0% 100%

Home

Improvement

0 29 198 68 0 295

0.0% 9.8% 67.1% 23.1% 0.0% 100%


0.0% 28.6% 57.1% 14.3% 0.0% 100%

TOTAL

LOANS

0 212 1,197 467 0 1,876

0.0% 11.3% 63.8% 24.9% 0.0% 100%

Owner Occupied

Housing 0.0% 13.1% 70.8% 16.0% 0.0% 100%


income census tracts is good (residential real estate lending opportunity in the only low-income

census tract is de minimis). As displayed in the preceding table, 11.3 percent of the bank‟s loans

were made in moderate-income census tracts, which is slightly below the percentage of owner-

occupied housing units in moderate-income census tracts, 13.1 percent, but greater than 2009

HMDA aggregate lending level, 9.4 percent.



191


displayed in the following table compared to the distribution of assessment area businesses by

geography income level.




Small Business

Loans

1 229 979 294 0 1,503

0.1% 15.2% 65.1% 19.6% 0.0% 100%

Business

Institutions 0.6% 17.7% 65.1% 16.7% 0.0% 100%

While the bank had a very small percentage of small business loans in the one low-income

census tract (0.1 percent), business lending opportunities in this geography appear to be minimal.

The level of small business loans within moderate-income census tracts (15.2 percent) is below

but within adequate range of the percentage of businesses within moderate-income census tracts

(17.7 percent) and the 2009 CRA aggregate lending level in moderate-income census tracts (16.1

percent). Therefore, the analysis of small business loans reflects adequate penetration throughout

the assessment area.


comparison to the distribution of assessment area farms by geography income level.




Small Farm

Loans

0 76 914 76 0 1,066

0.0% 7.1% 85.7% 7.1% 0.0% 100%

Agricultural

Institutions 0.0% 10.6% 76.1% 13.4% 0.0% 100%

While below data used for comparison, the bank‟s level of small farm loans made in moderate-

income census tracts is adequate (there are no small farms within the only low-income

assessment area geography). As displayed in the preceding table, the bank‟s level of small farm

loans made within moderate-income census tracts (7.1 percent) is below but within an adequate

range of the estimated percentage of farms located in moderate-income census tracts (10.6


percent). Therefore, the geographic distribution of the bank‟s small farm loans is adequate.



192





demographics.




Home Purchase 50 122 135 202 9 518

9.7% 23.6% 26.1% 39.0% 1.7% 100%

Refinance 65 158 228 592 13 1,056

6.2% 15.0% 21.6% 56.1% 1.2% 100%

Home

Improvement

25 63 61 120 26 295

8.5% 21.4% 20.7% 40.7% 8.8% 100%

Multi-Family

Loans

0 0 0 0 7 7

0.0% 0.0% 0.0% 0.0% 100.0% 100%

HMDA

TOTAL

140 343 424 914 55 1,876

7.5% 18.3% 22.6% 48.7% 2.9% 100%

Families 20.6% 18.2% 21.5% 39.6% 0.0% 100%

As displayed in the preceding table, the bank‟s level of lending to low-income borrowers (7.5

percent) is below the low-income family population (20.6 percent); nevertheless, the bank‟s

performance is good compared to the 2009 HMDA aggregate lending level to low-income

borrowers (5.6 percent). Furthermore, the bank‟s lending level to moderate-income borrowers

(18.3 percent) is above the percentage of moderate-income borrowers within the assessment area

(18.2 percent) and it is above the aggregate lending level to moderate-income borrowers (15.1

percent). Therefore, the bank‟s level of lending to LMI borrowers within the assessment area is

excellent.



193

Next, small business loans were reviewed to determine the bank‟s lending level to businesses of





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

$1 Million or Less 1,253 102 53 1,408

84.0% 6.8% 3.6% 94.4%

Greater Than $1

Million

36 16 31 83

2.4% 1.1% 2.1% 5.6%

TOTAL 1,289 118 84 1,491

86.5% 7.9% 5.6% 100%


majority of its small business loans (94.4 percent) to businesses with gross annual revenues of $1

million or less. The highest concentration of these loans was for loan amounts of $100,000 or

less, which further demonstrates the bank‟s willingness to make credit available to small

businesses in the assessment area. According to Dun & Bradstreet estimates, 89.5 percent of

businesses reporting for 2009 had revenues of $1 million or less. In addition, the bank‟s level of

lending to small businesses significantly exceeds the 2009 CRA aggregate lending level of 23.7

percent.

56

This analysis included 1,503 small business loans; however, 12 of these loans were removed from the sample




194

Small farm lending performance was analyzed by the revenue size of the farm and by the dollar

amount of the loan. The following table shows the distribution of small farm loans by loan

amount and farm revenue size.



TOTAL <$100 >$100<$250 >$250<$500

$1 Million or Less 973 69 20 1,062

91.3% 6.5% 1.9% 99.6%

Greater Than $1

Million

2 2 0 4

0.2% 0.2% 0.0% 0.4%

TOTAL 975 71 20 1,066

91.5% 6.7% 1.9% 100%

The bank‟s level of lending to small farms is excellent. All but four of the bank‟s small farm

loans (99.6 percent) made in this assessment area were originated to farmers with gross annual

revenues of $1 million or less. Additionally, the largest concentration of these loans was in loan


available to small farms in the assessment area. According to Dun & Bradstreet estimates, 98.5

percent of farms in the assessment area reported revenues of $1 million or less. Furthermore, the

bank‟s performance is above that of other lenders based on 2009 CRA aggregate data, which

indicate a small farm lending level of 90.9 percent.


Arvest Bank makes a relatively high level of community development loans in the nonMSA

Oklahoma assessment area. During the review period, the bank originated nine community

development loans totaling $12.8 million within this assessment area. Two loans were for

affordable housing projects and two loans were made to organizations that provide community

services to LMI individuals. Four loans were for revitalization/stabilization projects in LMI

geographies. The remaining loan promoted economic development by providing permanent job

creation for LMI individuals.



195

INVESTMENT TEST

Arvest Bank has an excellent level of qualified community development investments and grants

within the nonMSA Oklahoma Assessment Area, exhibiting excellent responsiveness to credit

and community development needs in the assessment area. As of this evaluation date, the bank

had a community development investment balance of $10.7 million attributable to this

assessment area, representing an increase of $2.1 million (24.4 percent) since the last CRA

evaluation. The bank had qualified investments in MBS that finance affordable housing made in

a previous review period still outstanding of $2.1 million. Further, during this review period, the

bank invested $8.6 million in a tax credit equity fund that provides affordable housing for low-

income families. Additionally, Arvest Bank made an excellent level of qualified community

development grants within the assessment area. The bank made 273 qualified grants totaling

$343,729 during this review period. Among the numerous qualifying contributions were

significant donations to schools with a large majority of students from LMI families, affordable

housing organizations, food banks serving the homeless, and community service organizations

targeting the needs of LMI families.



196

SERVICE TEST

Arvest Bank‟s service delivery systems are readily accessible to the nonMSA Oklahoma

Assessment Area, and the bank‟s record of opening and closing branches improved the

accessibility of its delivery systems to LMI geographies and/or LMI individuals. Business hours

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

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

Oklahoma Assessment Area.


Arvest Bank operates 32 branch facilities within the nonMSA Oklahoma Assessment Area. The






Branches 1 5 21 5 0 32

3.1% 15.6% 65.6% 15.6% 0.0% 100%

Census Tracts 0.3% 17.2% 70.8% 11.7% 0.0% 100%

Household

Population 0.5% 15.4% 68.4% 15.8% 0.0% 100%

As illustrated in the table above, 18.7 percent of Arvest Bank‟s nonMSA Oklahoma Assessment

Area branches are located in LMI census tracts, which are greater than the percentage of

households in LMI census tracts, 15.9 percent. Based on this information, Arvest Bank‟s

delivery systems are readily accessible to geographies and individuals of different income levels

in the nonMSA Oklahoma Assessment Area.


During the review period, the bank opened two branches in this assessment area, one in a low-

income census tract and one in an upper-income census tract. Consequently the bank‟s record of

opening and closing branches in the nonMSA Oklahoma Assessment Area improved the

accessibility of its delivery systems, particularly to LMI geographies and/or LMI individuals.



197



the nonMSA Oklahoma Assessment Area. Most branches have Saturday operating hours and

offer extended hours of operations in their lobby and drive-up facilities at some point during the

week. Most drive-thru facilities remain open until 6 p.m., Monday through Friday, and are open

until noon on Saturdays. All branches offer the same standard products, including low-cost

checking and savings accounts, certificates of deposit, real estate and consumer loans, and other

services. Therefore, bank services do not vary in a way that inconveniences certain segments of

this assessment area, particularly LMI geographies and/or LMI individuals.


Arvest Bank personnel provides an adequate level of community development services in the

nonMSA Oklahoma Assessment Area. Throughout the review period, three bank employees

provided community development services to four separate organizations. Two of these

organizations assist schools with a majority of students from LMI families, and two

organizations work towards revitalization and stabilization of LMI areas.



198

Appendix A

SCOPE OF EXAMINATION TABLES


TIME PERIOD

REVIEWED

1/1/2008 TO 12/31/2009 (HMDA, small business, and small farm

data)

7/1/2008 TO 1/10/2011 (community development loans,

investment, and service activities)

FINANCIAL

INSTITUTION

Arvest Bank

Fayetteville, Arkansas

PRODUCTS

REVIEWED

HMDA

Small Business

Small Farm

AFFILIATE(S) AFFILIATE

RELATIONSHIP

PRODUCTS

REVIEWED

Arvest Mortgage

Company Bank subsidiary Mortgage Loans

Security BankCard

Center Bank subsidiary

Small Business Credit

Cards



199

Appendix A (continued)

Assessment Area State MSA # of

Offices

% of

Offices

Branches

Visited

CRA Review

Procedures

Fayetteville-Springdale-

Rogers, AR-MO MSA

AR-

MO MSA 52 21.8% 0 Full Scope

Fort Smith, AR-MO MSA AR-

OK MSA 17 7.1% 0 Full Scope

Kansas City, MO-KS MSA MO-

KS MSA 10 4.2% 2 Full Scope

Little Rock-North Little

Rock-Conway, AR MSA AR MSA 24 10.0% 0 Full Scope

Hot Springs, AR MSA AR MSA 3 1.3% 1 Limited

Scope

NonMSA AR AR non 21 8.8% 1 Full Scope

NonMSA KS KS non 1 0.4% 0 Full Scope

Joplin, MO MSA MO MSA 10 4.2% 0 Limited

Scope

Springfield, MO MSA MO MSA 4 1.7% 2 Limited

Scope

NonMSA MO MO non 4 1.7% 0 Full Scope

Lawton, OK MSA OK MSA 5 2.1% 0 Full Scope

Tulsa, OK MSA OK MSA 29 12.1% 1 Full Scope

Oklahoma City, OK MSA OK MSA 27 11.3% 0 Limited

Scope

NonMSA OK OK non 32 13.4% 1 Full Scope

Overall Bank N/A N/A 239 100% 8 10 Full

Scope



200

Appendix B

SUMMARY OF STATE AND MULTISTATE MSA RATINGS

State or Multistate

MSA Name

Lending Test

Rating

Investment

Test Rating

Service Test

Rating

Overall

Rating

Fayetteville AR-MO

MSA

High

Satisfactory Outstanding Low

Satisfactory Satisfactory

Fort Smith AR-OK

MSA

Low

Satisfactory

Low

Satisfactory

High


Kansas City KS-MO

MSA

High

Satisfactory

Low

Satisfactory

Low


Arkansas High

Satisfactory

High

Satisfactory

Low


Kansas High

Satisfactory

Needs to

Improve

Low


Missouri High

Satisfactory

Low

Satisfactory

Low


Oklahoma High

Satisfactory

High

Satisfactory

Low




Appendix C

201

2009 LENDING PERFORMANCE TABLES FOR LIMITED-SCOPE REVIEW AREAS

ARKANSAS

Hot Springs, Arkansas MSA Assessment Area





0.0% 5.1% 84.6% 10.3% 0.0% 100%

Refinance 0 3 43 6 0 52

0.0% 5.8% 82.7% 11.5% 0.0% 100%

Home

Improvement

0 4 25 7 0 36

0.0% 11.1% 69.4% 19.4% 0.0% 100%

Multi-Family

Loans

0 0 5 0 0 5

0.0% 0.0% 100% 0.0% 0.0% 100%

HMDA

TOTAL

0 9 106 17 0 132

0.0% 6.8% 80.3% 12.9% 0.0% 100%

Owner Occupied

Housing 0.0% 15.1% 71.4% 13.5% 0.0% 100%




Small Business

Loans

0 29 72 9 0 110

0.0% 26.4% 65.5% 8.2% 0.0% 100%

Business

Institutions 0.0% 27.5% 59.7% 12.7% 0.0% 100%



Appendix C (continued)

202




Small Farm

Loans

0 0 0 0 0 0

0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Agricultural

Institutions 0.0% 8.3% 85.0% 6.7% 0.0% 100%





0.0% 25.6% 25.6% 48.7% 0.0% 100%

Refinance 5 5 9 32 1 52

9.6% 9.6% 17.3% 61.5% 1.9% 100%

Home

Improvement

2 5 8 21 0 36

5.6% 13.9% 22.2% 58.3% 0.0% 100%

Multi-Family

Loans

0 0 0 0 5 5

0.0% 0.0% 0.0% 0.0% 100% 100%

HMDA

TOTAL

7 20 27 72 6 132

5.3% 15.2% 20.5% 54.5% 4.5% 100%

Families 19.0% 18.1% 23.1% 39.9% 0.0% 100%




203



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


75.0% 8.3% 8.3% 91.7%


5.6% 1.9% 0.9% 8.3%

TOTAL 87 11 10 108

80.6% 10.2% 9.3% 100%



TOTAL <$100 >$100<$250 >$250<$500


0.0% 0.0% 0.0% 0.0%


0.0% 0.0% 0.0% 0.0%

TOTAL 0 0 0 0

0.0% 0.0% 0.0% 0.0%




204

MISSOURI

Joplin, Missouri MSA Assessment Area




Home Purchase 0 12 157 18 0 187

0.0% 6.4% 84.0% 9.6% 0.0% 100%

Refinance 0 11 298 25 0 334

0.0% 3.3% 89.2% 7.5% 0.0% 100%

Home

Improvement

0 4 37 6 0 47

0.0% 8.5% 78.7% 12.8% 0.0% 100%

Multi-Family

Loans

0 0 5 0 0 5

0.0% 0.0% 100% 0.0% 0.0% 100%

HMDA

TOTAL

0 27 497 49 0 573

0.0% 4.7% 86.7% 8.6% 0.0% 100%

Owner Occupied

Housing 0.0% 8.1% 84.2% 7.7% 0.0% 100%




Small Business

Loans

0 45 177 24 0 246

0.0% 18.3% 72.0% 9.8% 0.0% 100%

Business

Institutions 0.0% 14.5% 78.2% 7.3% 0.0% 100%




205




Small Farm

Loans

0 0 38 1 0 39

0.0% 0.0% 97.4% 2.6% 0.0% 100%

Agricultural

Institutions 0.0% 0.8% 97.8% 1.4% 0.0% 100%




Home Purchase 21 49 45 70 2 187

11.2% 26.2% 24.1% 37.4% 1.1% 100%

Refinance 18 52 80 183 1 334

5.4% 15.6% 24.0% 54.8% 0.3% 100%

Home

Improvement

3 5 12 25 2 47

6.4% 10.6% 25.5% 53.2% 4.3% 100%

Multi-Family

Loans

0 0 0 0 5 5

0.0% 0.0% 0.0% 0.0% 100% 100%

HMDA

TOTAL

42 106 137 278 10 573

7.3% 18.5% 23.9% 48.5% 1.7% 100%

Families 17.4% 19.4% 24.6% 38.6% 0.0% 100%




206



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


58.8% 15.5% 11.0% 85.3%


5.3% 4.5% 4.9% 14.7%

TOTAL 157 49 39 245

64.1% 20.0% 15.9% 100%



TOTAL <$100 >$100<$250 >$250<$500


94.9% 5.1% 0.0% 100.0%


0.0% 0.0% 0.0% 0.0%

TOTAL 37 2 0 39

94.9% 5.1% 0.0% 100%




207

Springfield, Missouri MSA Assessment Area





0.0% 8.7% 56.5% 34.8% 0.0% 100%

Refinance 0 5 51 39 0 95

0.0% 5.3% 53.7% 41.1% 0.0% 100%

Home

Improvement

0 0 4 2 0 6

0.0% 0.0% 66.7% 33.3% 0.0% 100%

Multi-Family

Loans

0 1 0 0 0 1

0.0% 100% 0.0% 0.0% 0.0% 100%

HMDA

TOTAL

0 12 94 65 0 171

0.0% 7.0% 55.0% 38.0% 0.0% 100%

Owner Occupied

Housing 0.0% 16.2% 56.8% 27.0% 0.0% 100%




Small Business

Loans

0 7 21 25 0 53

0.0% 13.2% 39.6% 47.2% 0.0% 100%

Business

Institutions 2.3% 16.5% 54.3% 27.0% 0.0% 100%




208




Small Farm

Loans

0 0 2 0 0 2

0.0% 0.0% 100.0% 0.0% 0.0% 100%

Agricultural

Institutions 0.3% 13.9% 72.6% 13.2% 0.0% 100%





18.8% 24.6% 31.9% 24.6% 0.0% 100%

Refinance 4 20 29 41 1 95

4.2% 21.1% 30.5% 43.2% 1.1% 100%

Home

Improvement

0 0 0 6 0 6

0.0% 0.0% 0.0% 100% 0.0% 100%

Multi-Family

Loans

0 0 0 0 1 1

0.0% 0.0% 0.0% 0.0% 100% 100%

HMDA

TOTAL

17 37 51 64 2 171

9.9% 21.6% 29.8% 37.4% 1.2% 100%

Families 17.4% 19.6% 24.1% 38.9% 0.0% 100%




209



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


36.5% 40.4% 13.5% 90.4%


3.8% 1.9% 3.8% 9.6%

TOTAL 21 22 9 52

40.4% 42.3% 17.3% 100%



TOTAL <$100 >$100<$250 >$250 <$500


50.0% 0.0% 50.0% 100%


0.0% 0.0% 0.0% 0.0%

TOTAL 1 0 1 2

50.0% 0.0% 50.0% 100%




210

OKLAHOMA

Oklahoma City, Oklahoma MSA Assessment Area




Home Purchase 6 62 203 218 0 489

1.2% 12.7% 41.5% 44.6% 0.0% 100%

Refinance 4 57 275 375 1 712

0.6% 8.0% 38.6% 52.7% 0.1% 100%

Home

Improvement

1 27 80 114 0 222

0.5% 12.2% 36.0% 51.4% 0.0% 100%

Multi-Family

Loans

0 1 1 0 0 2

0.0% 50.0% 50.0% 0.0% 0.0% 100%

HMDA

TOTAL

11 147 559 707 1 1,425

0.8% 10.3% 39.2% 49.6% 0.1% 100%

Owner Occupied

Housing 1.8% 21.8% 41.2% 35.2% 0.0% 100%




Small Business

Loans

22 136 193 190 12 553

4.0% 24.6% 34.9% 34.4% 2.2% 100%

Business

Institutions 4.1% 22.6% 38.0% 33.4% 1.9% 100%




211




Small Farm

Loans

1 7 18 5 3 34

2.9% 20.6% 52.9% 14.7% 8.8% 100%

Agricultural

Institutions 0.6% 17.3% 51.4% 30.5% 0.3% 100%




Home Purchase 66 141 131 143 8 489

13.5% 28.8% 26.8% 29.2% 1.6% 100%

Refinance 36 102 163 407 4 712

5.1% 14.3% 22.9% 57.2% 0.6% 100%

Home

Improvement

18 28 46 129 1 222

8.1% 12.6% 20.7% 58.1% 0.5% 100%

Multi-Family

Loans

0 0 0 0 2 2

0.0% 0.0% 0.0% 0.0% 100% 100%

HMDA

TOTAL

120 271 340 679 15 1,425

8.4% 19.0% 23.9% 47.6% 1.1% 100%

Families 20.0% 18.2% 21.7% 40.1% 0.0% 100%




212



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


64.3% 7.8% 5.8% 78.0%


13.5% 3.6% 4.9% 22.0%

TOTAL 427 63 59 549

77.8% 11.5% 10.7% 100%



TOTAL <$100 >$100<$250 >$250<$500


88.2% 5.9% 5.9% 100%


0.0% 0.0% 0.0% 0.0%

TOTAL 30 2 2 34

88.2% 5.9% 5.9% 100%



Appendix D

213

2008 LENDING PERFORMANCE TABLES

Fayetteville-Springdale-Rogers, Arkansas and Missouri MSA Assessment Area




Home Purchase 4 47 1,046 289 0 1,386

0.3% 3.4% 75.5% 20.9% 0.0% 100%

Refinance 5 183 2,515 691 0 3,394

0.1% 5.4% 74.1% 20.4% 0.0% 100%

Home

Improvement

0 57 1,094 301 0 1,452

0.0% 3.9% 75.3% 20.7% 0.0% 100%

Multi-Family

Loans

0 0 3 0 0 3

0.0% 0.0% 100% 0.0% 0.0% 100%

HMDA

TOTAL

9 287 4,658 1,281 0 6,235

0.1% 4.6% 74.7% 20.5% 0.0% 100%

Owner Occupied

Housing 0.2% 11.7% 71.9% 16.2% 0.0% 100%




Small Business

Loans

10 350 1,992 608 0 2,960

0.3% 11.8% 67.3% 20.5% 0.0% 100%

Business

Institutions 0.8% 15.1% 65.8% 18.3% 0.0% 100%



Appendix D (continued)

214




Small Farm

Loans

1 127 602 33 0 763

0.1% 16.6% 78.9% 4.3% 0.0% 100%

Agricultural

Institutions 0.0% 20.9% 72.7% 6.4% 0.0% 100%




Home Purchase 86 273 325 668 34 1,386

6.2% 19.7% 23.4% 48.2% 2.5% 100%

Refinance 221 474 663 1,789 247 3,394

6.5% 14.0% 19.5% 52.7% 7.3% 100%

Home

Improvement

65 145 238 747 257 1,452

4.5% 10.0% 16.4% 51.4% 17.7% 100%

Multi-Family

Loans

0 0 0 0 3 3

0.0% 0.0% 0.0% 0.0% 100% 100%

HMDA

TOTAL

372 892 1,226 3,204 541 6,235

6.0% 14.3% 19.7% 51.4% 8.7% 100%

Families 18.5% 18.7% 24.0% 38.8% 0.0% 100%




215



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

$1 Million or Less 2,156 413 308 2,877

72.9% 14.0% 10.4% 97.3%


0.2% 0.1% 2.4% 2.7%

TOTAL 2,163 415 380 2,958

73.1% 14.0% 12.8% 100%



TOTAL <$100 >$100<$250 >$250<$500


86.4% 9.7% 3.9% 100%


0.0% 0.0% 0.0% 0.0%

TOTAL 659 74 30 763

86.4% 9.7% 3.9% 100%




216

Fort Smith, Arkansas and Oklahoma MSA Assessment Area




Home Purchase 0 17 341 86 0 444

0.0% 3.8% 76.8% 19.4% 0.0% 100%

Refinance 0 18 466 109 0 593

0.0% 3.0% 78.6% 18.4% 0.0% 100%

Home

Improvement

0 5 228 67 0 300

0.0% 1.7% 76.0% 22.3% 0.0% 100%

Multi-Family

Loans

0 0 0 0 0 0

0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

HMDA

TOTAL

0 40 1,035 262 0 1,337

0.0% 3.0% 77.4% 19.6% 0.0% 100%

Owner Occupied

Housing 0.0% 3.5% 84.0% 12.5% 0.0% 100%




Small Business

Loans

0 33 337 207 0 577

0.0% 5.7% 58.4% 35.9% 0.0% 100%

Business

Institutions 0.0% 8.7% 75.2% 16.1% 0.0% 100%




217




Small Farm

Loans

0 0 39 9 0 48

0.0% 0.0% 81.3% 18.8% 0.0% 100%

Agricultural

Institutions 0.0% 0.9% 92.1% 6.9% 0.0% 100%




Home Purchase 30 92 113 157 52 444

6.8% 20.7% 25.5% 35.4% 11.7% 100%

Refinance 48 114 111 298 22 593

8.1% 19.2% 18.7% 50.3% 3.7% 100%

Home

Improvement

12 44 61 157 26 300

4.0% 14.7% 20.3% 52.3% 8.7% 100%

Multi-Family

Loans

0 0 0 0 0 0

0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

HMDA

TOTAL

90 250 285 612 100 1,337

6.7% 18.7% 21.3% 45.8% 7.5% 100%

Families 19.7% 17.9% 22.9% 39.5% 0.0% 100%




218



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


77.3% 13.9% 6.9% 98.1%


0.0% 0.2% 1.7% 1.9%

TOTAL 446 81 50 577

77.3% 14.0% 8.7% 100%



TOTAL <$100 >$100<$250 >$250<$500


75.0% 8.3% 16.7% 100%


0.0% 0.0% 0.0% 0.0%

TOTAL 36 4 8 48

75.0% 8.3% 16.7% 100%




219

Little Rock-North Little Rock-Conway, Arkansas MSA Assessment Area




Home Purchase 6 17 227 142 0 392

1.5% 4.3% 57.9% 36.2% 0.0% 100%

Refinance 3 40 280 154 0 477

0.6% 8.4% 58.7% 32.3% 0.0% 100%

Home

Improvement

3 27 235 146 0 411

0.7% 6.6% 57.2% 35.5% 0.0% 100%

Multi-Family

Loans

0 0 0 0 0 0

0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

HMDA

TOTAL

12 84 742 442 0 1,280

0.9% 6.6% 58.0% 34.5% 0.0% 100%

Owner Occupied

Housing 1.5% 15.0% 55.4% 28.2% 0.0% 100%




Small Business

Loans

48 100 309 243 0 700

6.9% 14.3% 44.1% 34.7% 0.0% 100%

Business

Institutions 5.3% 17.5% 51.3% 26.0% 0.0% 100%




220




Small Farm

Loans

1 3 5 1 0 10

10.0% 30.0% 50.0% 10.0% 0.0% 100%

Agricultural

Institutions 1.2% 17.7% 62.8% 18.2% 0.0% 100%




Home Purchase 27 109 94 145 17 392

6.9% 27.8% 24.0% 37.0% 4.3% 100%

Refinance 34 90 109 221 23 477

7.1% 18.9% 22.9% 46.3% 4.8% 100%

Home

Improvement

33 50 100 204 24 411

8.0% 12.2% 24.3% 49.6% 5.8% 100%

Multi-Family

Loans

0 0 0 0 0 0

0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

HMDA

TOTAL

94 249 303 570 64 1,280

7.3% 19.5% 23.7% 44.5% 5.0% 100%

Families 19.7% 18.1% 22.5% 39.7% 0.0% 100%




221



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


73.0% 13.9% 9.7% 96.6%


0.1% 0.4% 2.9% 3.4%

TOTAL 512 100 88 700

73.1% 14.3% 12.6% 100%



TOTAL <$100 >$100<$250 >$250<$500


50.0% 30.0% 20.0% 100%


0.0% 0.0% 0.0% 0.0%

TOTAL 5 3 2 10

50.0% 30.0% 20.0% 100%




222

Hot Springs, Arkansas MSA Assessment Area





0.0% 3.4% 93.1% 3.4% 0.0% 100%

Refinance 0 6 28 8 0 42

0.0% 14.3% 66.7% 19.0% 0.0% 100%

Home

Improvement

0 11 43 10 0 64

0.0% 17.2% 67.2% 15.6% 0.0% 100%

Multi-Family

Loans

0 0 0 0 0 0

0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

HMDA

TOTAL

0 18 98 19 0 135

0.0% 13.3% 72.6% 14.1% 0.0% 100%

Owner Occupied

Housing 0.0% 15.1% 71.4% 13.5% 0.0% 100%




Small Business

Loans

0 22 79 9 0 110

0.0% 20.0% 71.8% 8.2% 0.0% 100%

Business

Institutions 0.0% 27.5% 59.7% 12.7% 0.0% 100%




223




Small Farm

Loans

0 0 0 0 0 0

0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Agricultural

Institutions 0.0% 8.3% 85.0% 6.7% 0.0% 100%





10.3% 13.8% 24.1% 48.3% 3.4% 100%

Refinance 2 7 9 22 2 42

4.8% 16.7% 21.4% 52.4% 4.8% 100%

Home

Improvement

6 9 18 26 5 64

9.4% 14.1% 28.1% 40.6% 7.8% 100%

Multi-Family

Loans

0 0 0 0 0 0

0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

HMDA

TOTAL

11 20 34 62 8 135

8.1% 14.8% 25.2% 45.9% 5.9% 100%

Families 19.0% 18.1% 23.1% 39.9% 0.0% 100%




224



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


84.5% 8.2% 7.3% 100%


0.0% 0.0% 0.0% 0.0%

TOTAL 93 9 8 110

84.5% 8.2% 7.3% 100%



TOTAL <$100 >$100<$250 >$250<$500


0.0% 0.0% 0.0% 0.0%


0.0% 0.0% 0.0% 0.0%

TOTAL 0 0 0 0

0.0% 0.0% 0.0% 0.0%




225

Nonmetropolitan Arkansas Statewide Assessment Area





0.0% 0.3% 82.7% 17.0% 0.0% 100%

Refinance 0 2 601 55 0 658

0.0% 0.3% 91.3% 8.4% 0.0% 100%

Home

Improvement

0 1 235 29 0 265

0.0% 0.4% 88.7% 10.9% 0.0% 100%

Multi-Family

Loans

0 0 1 0 0 1

0.0% 0.0% 100% 0.0% 0.0% 100%

HMDA

TOTAL

0 4 1,114 141 0 1,259

0.0% 0.3% 88.5% 11.2% 0.0% 100%

Owner Occupied

Housing 0.0% 2.4% 87.4% 10.3% 0.0% 100%




Small Business

Loans

0 4 916 79 0 999

0.0% 0.4% 91.7% 7.9% 0.0% 100%

Business

Institutions 0.0% 1.7% 87.6% 10.7% 0.0% 100%




226




Small Farm

Loans

0 7 327 33 0 367

0.0% 1.9% 89.1% 9.0% 0.0% 100%

Agricultural

Institutions 0.0% 1.5% 89.8% 8.8% 0.0% 100%




Home Purchase 22 66 89 151 7 335

6.6% 19.7% 26.6% 45.1% 2.1% 100%

Refinance 58 104 160 306 30 658

8.8% 15.8% 24.3% 46.5% 4.6% 100%

Home

Improvement

23 37 54 125 26 265

8.7% 14.0% 20.4% 47.2% 9.8% 100%

Multi-Family

Loans

0 0 0 0 1 1

0.0% 0.0% 0.0% 0.0% 100% 100%

HMDA

TOTAL

103 207 303 582 64 1,259

8.2% 16.4% 24.1% 46.2% 5.1% 100%

Families 18.1% 18.7% 23.1% 40.1% 0.0% 100%




227



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

$1 Million or Less 789 125 62 976

79.0% 12.5% 6.2% 97.7%


0.4% 0.3% 1.6% 2.3%

TOTAL 793 128 78 999

79.4% 12.8% 7.8% 100%



TOTAL <$100 >$100<$250 >$250<$500


86.6% 8.7% 4.6% 100%


0.0% 0.0% 0.0% 0.0%

TOTAL 318 32 17 367

86.6% 8.7% 4.6% 100%




228

Nonmetropolitan Kansas Statewide Assessment Area





0.0% 12.5% 87.5% 0.0% 0.0% 100%

Refinance 0 2 16 0 0 18

0.0% 11.1% 88.9% 0.0% 0.0% 100%

Home

Improvement

0 1 13 0 0 14

0.0% 7.1% 92.9% 0.0% 0.0% 100%

Multi-Family

Loans

0 0 0 0 0 0

0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

HMDA

TOTAL

0 4 36 0 0 40

0.0% 10.0% 90.0% 0.0% 0.0% 100%

Owner Occupied

Housing 0.0% 13.9% 82.9% 3.2% 0.0% 100%




Small Business

Loans

0 5 94 0 0 99

0.0% 5.1% 94.9% 0.0% 0.0% 100%

Business

Institutions 0.0% 19.6% 77.2% 3.2% 0.0% 100%




229




Small Farm

Loans

0 2 65 0 0 67

0.0% 3.0% 97.0% 0.0% 0.0% 100%

Agricultural

Institutions 0.0% 4.1% 94.4% 1.4% 0.0% 100%





25.0% 37.5% 0.0% 37.5% 0.0% 100%


16.7% 11.1% 33.3% 33.3% 5.6% 100%

Home

Improvement

0 3 5 4 2 14

0.0% 21.4% 35.7% 28.6% 14.3% 100%

Multi-Family

Loans

0 0 0 0 0 0

0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

HMDA

TOTAL

5 8 11 13 3 40

12.5% 20.0% 27.5% 32.5% 7.5% 100%

Families 20.3% 20.8% 25.0% 33.8% 0.0% 100%




230



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


84.8% 10.1% 2.0% 97.0%


0.0% 0.0% 3.0% 3.0%

TOTAL 84 10 5 99

84.8% 10.1% 5.1% 100%



TOTAL <$100 >$100<$250 >$250<$500


97.0% 3.0% 0.0% 100%


0.0% 0.0% 0.0% 0.0%

TOTAL 65 2 0 67

97.0% 3.0% 0.0% 100%




231

Joplin, Missouri MSA Assessment Area





0.0% 6.2% 83.6% 10.3% 0.0% 100%

Refinance 0 8 155 35 0 198

0.0% 4.0% 78.3% 17.7% 0.0% 100%

Home

Improvement

0 9 116 12 0 137

0.0% 6.6% 84.7% 8.8% 0.0% 100%

Multi-Family

Loans

0 0 2 0 0 2

0.0% 0.0% 100.0% 0.0% 0.0% 100%

HMDA

TOTAL

0 26 395 62 0 483

0.0% 5.4% 81.8% 12.8% 0.0% 100%

Owner Occupied

Housing 0.0% 8.1% 84.2% 7.7% 0.0% 100%




Small Business

Loans

0 56 221 31 0 308

0.0% 18.2% 71.8% 10.1% 0.0% 100%

Business

Institutions 0.0% 14.5% 78.2% 7.3% 0.0% 100%




232




Small Farm

Loans

0 0 45 2 0 47

0.0% 0.0% 95.7% 4.3% 0.0% 100%

Agricultural

Institutions 0.0% 0.8% 97.8% 1.4% 0.0% 100%




Home Purchase 14 33 37 56 6 146

9.6% 22.6% 25.3% 38.4% 4.1% 100%

Refinance 5 24 38 113 18 198

2.5% 12.1% 19.2% 57.1% 9.1% 100%

Home

Improvement

7 18 23 78 11 137

5.1% 13.1% 16.8% 56.9% 8.0% 100%

Multi-Family

Loans

0 0 0 0 2 2

0.0% 0.0% 0.0% 0.0% 100% 100%

HMDA

TOTAL

26 75 98 247 37 483

5.4% 15.5% 20.3% 51.1% 7.7% 100%

Families 17.4% 19.4% 24.6% 38.6% 0.0% 100%




233



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


63.0% 19.2% 13.6% 95.8%


0.6% 0.0% 3.6% 4.2%

TOTAL 196 59 53 308

63.6% 19.2% 17.2% 100%



TOTAL <$100 >$100<$250 >$250<$500


85.1% 8.5% 6.4% 100%


0.0% 0.0% 0.0% 0.0%

TOTAL 40 4 3 47

85.1% 8.5% 6.4% 100%




234

Springfield, Missouri MSA Assessment Area





0.0% 16.1% 54.8% 29.0% 0.0% 100%

Refinance 0 1 14 19 0 34

0.0% 2.9% 41.2% 55.9% 0.0% 100%

Home

Improvement

0 1 0 13 0 14

0.0% 7.1% 0.0% 92.9% 0.0% 100%

Multi-Family

Loans

0 0 0 0 0 0

0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

HMDA

TOTAL

0 7 31 41 0 79

0.0% 8.9% 39.2% 51.9% 0.0% 100%

Owner Occupied

Housing 0.0% 16.2% 56.8% 27.0% 0.0% 100%




Small Business

Loans

0 6 23 15 0 44

0.0% 13.6% 52.3% 34.1% 0.0% 100%

Business

Institutions 2.3% 16.5% 54.3% 27.0% 0.0% 100%




235




Small Farm

Loans

0 0 0 0 0 0

0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Agricultural

Institutions 0.3% 13.9% 72.6% 13.2% 0.0% 100%





3.2% 22.6% 35.5% 35.5% 3.2% 100%

Refinance 2 5 7 20 0 34

5.9% 14.7% 20.6% 58.8% 0.0% 100%

Home

Improvement

0 0 2 9 3 14

0.0% 0.0% 14.3% 64.3% 21.4% 100%

Multi-Family

Loans

0 0 0 0 0 0

0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

HMDA

TOTAL

3 12 20 40 4 79

3.8% 15.2% 25.3% 50.6% 5.1% 100%

Families 17.4% 19.6% 24.1% 38.9% 0.0% 100%




236



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


47.7% 22.7% 20.5% 90.9%


0.0% 0.0% 9.1% 9.1%

TOTAL 21 10 13 44

47.7% 22.7% 29.5% 100%



TOTAL <$100 >$100<$250 >$250<$500


0.0% 0.0% 0.0% 0.0%


0.0% 0.0% 0.0% 0.0%

TOTAL 0 0 0 0

0.0% 0.0% 0.0% 0.0%




237

Nonmetropolitan Missouri Statewide Assessment Area





0.0% 0.0% 100.0% 0.0% 0.0% 100%

Refinance 0 0 110 0 0 110

0.0% 0.0% 100.0% 0.0% 0.0% 100%

Home

Improvement

0 0 41 0 0 41

0.0% 0.0% 100.0% 0.0% 0.0% 100%

Multi-Family

Loans

0 0 0 0 0 0

0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

HMDA

TOTAL

0 0 207 0 0 207

0.0% 0.0% 100.0% 0.0% 0.0% 100%

Owner Occupied

Housing 0.0% 1.8% 98.2% 0.0% 0.0% 100%




Small Business

Loans

0 0 100 0 0 100

0.0% 0.0% 100.0% 0.0% 0.0% 100%

Business

Institutions 0.0% 0.2% 99.8% 0.0% 0.0% 100%




238




Small Farm

Loans

0 0 16 0 0 16

0.0% 0.0% 100.0% 0.0% 0.0% 100%

Agricultural

Institutions 0.0% 0.8% 99.2% 0.0% 0.0% 100%





5.4% 19.6% 32.1% 39.3% 3.6% 100%

Refinance 7 18 19 62 4 110

6.4% 16.4% 17.3% 56.4% 3.6% 100%

Home

Improvement

3 1 6 24 7 41

7.3% 2.4% 14.6% 58.5% 17.1% 100%

Multi-Family

Loans

0 0 0 0 0 0

0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

HMDA

TOTAL

13 30 43 108 13 207

6.3% 14.5% 20.8% 52.2% 6.3% 100%

Families 18.6% 19.6% 24.7% 37.0% 0.0% 100%




239



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


67.0% 18.0% 12.0% 97.0%


0.0% 0.0% 3.0% 3.0%

TOTAL 67 18 15 100

67.0% 18.0% 15.0% 100%



TOTAL <$100 >$100<$250 >$250<$500


93.8% 0.0% 6.3% 100%


0.0% 0.0% 0.0% 0.0%

TOTAL 15 0 1 16

93.8% 0.0% 6.3% 100%




240

Lawton, Oklahoma MSA Assessment Area





0.0% 12.2% 61.0% 26.8% 0.0% 100%

Refinance 2 9 45 29 0 85

2.4% 10.6% 52.9% 34.1% 0.0% 100%

Home

Improvement

0 2 33 18 0 53

0.0% 3.8% 62.3% 34.0% 0.0% 100%

Multi-Family

Loans

0 0 0 0 0 0

0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

HMDA

TOTAL

2 16 103 58 0 179

1.1% 8.9% 57.5% 32.4% 0.0% 100%

Owner Occupied

Housing 1.6% 15.8% 64.8% 17.9% 0.0% 100%




Small Business

Loans

22 84 118 80 0 304

7.2% 27.6% 38.8% 26.3% 0.0% 100%

Business

Institutions 10.4% 29.2% 48.1% 12.3% 0.0% 100%




241




Small Farm

Loans

2 1 8 4 0 15

13.3% 6.7% 53.3% 26.7% 0.0% 100%

Agricultural

Institutions 0.5% 7.4% 77.9% 14.2% 0.0% 100%





7.3% 4.9% 22.0% 61.0% 4.9% 100%

Refinance 4 8 10 53 10 85

4.7% 9.4% 11.8% 62.4% 11.8% 100%

Home

Improvement

2 5 5 37 4 53

3.8% 9.4% 9.4% 69.8% 7.5% 100%

Multi-Family

Loans

0 0 0 0 0 0

0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

HMDA

TOTAL

9 15 24 115 16 179

5.0% 8.4% 13.4% 64.2% 8.9% 100%

Families 20.5% 17.1% 22.2% 40.3% 0.0% 100%




242



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


75.7% 15.1% 7.2% 98.0%


0.3% 0.0% 1.6% 2.0%

TOTAL 231 46 27 304

76.0% 15.1% 8.9% 100%



TOTAL <$100 >$100<$250 >$250<$500


80.0% 6.7% 13.3% 100%


0.0% 0.0% 0.0% 0.0%

TOTAL 12 1 2 15

80.0% 6.7% 13.3% 100%




243

Tulsa, Oklahoma MSA Assessment Area




Home Purchase 4 42 181 227 0 454

0.9% 9.3% 39.9% 50.0% 0.0% 100%

Refinance 3 58 195 308 0 564

0.5% 10.3% 34.6% 54.6% 0.0% 100%

Home

Improvement

2 68 230 282 0 582

0.3% 11.7% 39.5% 48.5% 0.0% 100%

Multi-Family

Loans

0 0 0 1 0 1

0.0% 0.0% 0.0% 100% 0.0% 100%

HMDA

TOTAL

9 168 606 818 0 1,601

0.6% 10.5% 37.9% 51.1% 0.0% 100%

Owner Occupied

Housing 0.9% 20.8% 47.4% 30.8% 0.0% 100%




Small Business

Loans

4 212 458 776 0 1,450

0.3% 14.6% 31.6% 53.5% 0.0% 100%

Business

Institutions 1.1% 23.9% 41.6% 33.3% 0.0% 100%




244




Small Farm

Loans

0 14 84 23 0 121

0.0% 11.6% 69.4% 19.0% 0.0% 100%

Agricultural

Institutions 0.1% 24.8% 57.0% 18.1% 0.0% 100%




Home Purchase 32 90 126 193 13 454

7.0% 19.8% 27.8% 42.5% 2.9% 100%

Refinance 34 71 98 302 59 564

6.0% 12.6% 17.4% 53.5% 10.5% 100%

Home

Improvement

39 91 116 276 60 582

6.7% 15.6% 19.9% 47.4% 10.3% 100%

Multi-Family

Loans

0 0 0 0 1 1

0.0% 0.0% 0.0% 0.0% 100% 100%

HMDA

TOTAL

105 252 340 771 133 1,601

6.6% 15.7% 21.2% 48.2% 8.3% 100%

Families 19.9% 18.3% 21.6% 40.1% 0.0% 100%




245



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

$1 Million or Less 1,086 181 145 1,412

74.9% 12.5% 10.0% 97.4%


0.2% 0.1% 2.3% 2.6%

TOTAL 1,089 182 179 1,450

75.1% 12.6% 12.3% 100%



TOTAL <$100 >$100<$250 >$250<$500


81.0% 11.6% 7.4% 100%


0.0% 0.0% 0.0% 0.0%

TOTAL 98 14 9 121

81.0% 11.6% 7.4% 100%




246

Oklahoma City, Oklahoma MSA Assessment Area




Home Purchase 4 44 150 162 0 360

1.1% 12.2% 41.7% 45.0% 0.0% 100%

Refinance 2 34 139 186 0 361

0.6% 9.4% 38.5% 51.5% 0.0% 100%

Home

Improvement

1 25 134 176 0 336

0.3% 7.4% 39.9% 52.4% 0.0% 100%

Multi-Family

Loans

0 0 0 1 0 1

0.0% 0.0% 0.0% 100% 0.0% 100%

HMDA

TOTAL

7 103 423 525 0 1,058

0.7% 9.7% 40.0% 49.6% 0.0% 100%

Owner Occupied

Housing 1.8% 21.8% 41.2% 35.2% 0.0% 100%




Small Business

Loans

28 138 255 224 21 666

4.2% 20.7% 38.3% 33.6% 3.2% 100%

Business

Institutions 4.1% 22.6% 38.0% 33.4% 1.9% 100%




247




Small Farm

Loans

1 7 15 3 3 29

3.4% 24.1% 51.7% 10.3% 10.3% 100%

Agricultural

Institutions 0.6% 17.3% 51.4% 30.5% 0.3% 100%




Home Purchase 22 100 79 157 2 360

6.1% 27.8% 21.9% 43.6% 0.6% 100%

Refinance 18 47 76 198 22 361

5.0% 13.0% 21.1% 54.8% 6.1% 100%

Home

Improvement

16 39 70 182 29 336

4.8% 11.6% 20.8% 54.2% 8.6% 100%

Multi-Family

Loans

0 0 0 0 1 1

0.0% 0.0% 0.0% 0.0% 100% 100%

HMDA

TOTAL

56 186 225 537 54 1,058

5.3% 17.6% 21.3% 50.8% 5.1% 100%

Families 20.0% 18.2% 21.7% 40.1% 0.0% 100%




248



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


77.0% 11.9% 8.1% 97.0%


0.9% 0.6% 1.5% 3.0%

TOTAL 518 83 64 665

77.9% 12.5% 9.6% 100%



TOTAL <$100 >$100<$250 >$250<$500


72.4% 10.3% 17.2% 100%


0.0% 0.0% 0.0% 0.0%

TOTAL 21 3 5 29

72.4% 10.3% 17.2% 100%




249

Nonmetropolitan Oklahoma Statewide Assessment Area




Home Purchase 1 58 298 137 0 494

0.2% 11.7% 60.3% 27.7% 0.0% 100%

Refinance 1 94 471 141 0 707

0.1% 13.3% 66.6% 19.9% 0.0% 100%

Home

Improvement

0 35 260 79 0 374

0.0% 9.4% 69.5% 21.1% 0.0% 100%

Multi-Family

Loans

0 1 0 0 0 1

0.0% 100% 0.0% 0.0% 0.0% 100%

HMDA

TOTAL

2 188 1,029 357 0 1,576

0.1% 11.9% 65.3% 22.7% 0.0% 100%

Owner Occupied

Housing 0.0% 13.1% 70.8% 16.0% 0.0% 100%




Small Business

Loans

0 208 1,108 327 0 1,643

0.0% 12.7% 67.4% 19.9% 0.0% 100%

Business

Institutions 0.6% 17.7% 65.1% 16.7% 0.0% 100%




250




Small Farm

Loans

0 79 984 82 0 1,145

0.0% 6.9% 85.9% 7.2% 0.0% 100%

Agricultural

Institutions 0.0% 10.6% 76.1% 13.4% 0.0% 100%




Home Purchase 27 96 135 220 16 494

5.5% 19.4% 27.3% 44.5% 3.2% 100%

Refinance 39 118 142 366 42 707

5.5% 16.7% 20.1% 51.8% 5.9% 100%

Home

Improvement

25 47 64 191 47 374

6.7% 12.6% 17.1% 51.1% 12.6% 100%

Multi-Family

Loans

0 0 0 0 1 1

0.0% 0.0% 0.0% 0.0% 100% 100%

HMDA

TOTAL

91 261 341 777 106 1,576

5.8% 16.6% 21.6% 49.3% 6.7% 100%

Families 20.6% 18.2% 21.5% 39.6% 0.0% 100%




251



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

$1 Million or Less 1,383 174 70 1,627

84.2% 10.6% 4.3% 99.0%


0.1% 0.1% 0.7% 1.0%

TOTAL 1,385 176 82 1,643

84.3% 10.7% 5.0% 100%



TOTAL <$100 >$100<$250 >$250<$500

$1 Million or Less 1,031 84 30 1,145

90.0% 7.3% 2.6% 100%


0.0% 0.0% 0.0% 0.0%

TOTAL 1,031 84 30 1,145

90.0% 7.3% 2.6% 100%

Appendix E

252

GLOSSARY

Aggregate lending: The number of loans originated and purchased by all reporting lenders in

specified income categories as a percentage of the aggregate number of loans originated and

purchased by all reporting lenders in the metropolitan area/assessment area.

Census tract: A small subdivision of metropolitan and other densely populated counties.

Census tract boundaries do not cross county lines; however, they may cross the boundaries of

metropolitan statistical areas. Census tracts usually have between 2,500 and 8,000 persons, and

their physical size varies widely depending upon population density. Census tracts are designed

to be homogeneous with respect to population characteristics, economic status, and living

conditions to allow for statistical comparisons.

Community development: All Agencies have adopted the following language. Affordable

housing (including multifamily rental housing) for low- or moderate-income individuals;

community services targeted to low- or moderate-income individuals; activities that promote

economic development by financing businesses or farms that meet the size eligibility standards

of the Small Business Administration‟s Development Company or Small Business Investment

Company programs (13 CFR 121.301) or have gross annual revenues of $1 million or less; or,

activities that revitalize or stabilize low- or moderate-income geographies.

Effective September 1, 2005, the Board of Governors of the Federal Reserve System, Office of

the Comptroller of the Currency, and the Federal Deposit Insurance Corporation have adopted

the following additional language as part of the revitalize or stabilize definition of community

development. Activities that revitalize or stabilize-

(i) Low-or moderate-income geographies;

(ii) Designated disaster areas; or

(iii) Distressed or underserved nonmetropolitan middle-income geographies

designated by the Board, Federal Deposit Insurance Corporation, and Office of

the Comptroller of the Currency, based on-

a. Rates of poverty, unemployment, and population loss; or

b. Population size, density, and dispersion. Activities that revitalize and

stabilize geographies designated based on population size, density, and

dispersion if they help to meet essential community needs, including needs

of low- and moderate-income individuals.

Consumer loan(s): A loan(s) to one or more individuals for household, family, or other personal

expenditures. A consumer loan does not include a home mortgage, small business, or small farm

loan. This definition includes the following categories: motor vehicle loans, credit card loans,

home equity loans, other secured consumer loans, and other unsecured consumer loans.

Appendix E (continued)

253

Family: Includes a householder and one or more other persons living in the same household who

are related to the householder by birth, marriage, or adoption. The number of family households

always equals the number of families; however, a family household may also include non-

relatives living with the family. Families are classified by type as either a married-couple family

or other family, which is further classified into „male householder‟ (a family with a male

householder and no wife present) or „female householder‟ (a family with a female householder

and no husband present).

Full-scope review: Performance under the Lending, Investment, and Service Tests is analyzed

considering performance context, quantitative factors (for example, geographic distribution,

borrower distribution, and total number and dollar amount of investments), and qualitative

factors (for example, innovativeness, complexity, and responsiveness).

Geography: A census tract delineated by the United States Bureau of the Census in the most

recent decennial census.

Home Mortgage Disclosure Act (HMDA): The statute that requires certain mortgage lenders

that do business or have banking offices in a metropolitan statistical area to file annual summary

reports of their mortgage lending activity. The reports include such data as the race, gender, and

the income of applicants, the amount of loan requested, and the disposition of the application (for

example, approved, denied, and withdrawn).

Home mortgage loans: Includes home purchase and home improvement loans as defined in the

HMDA regulation. This definition also includes multifamily (five or more families) dwelling

loans, loans for the purchase of manufactured homes and refinancing of home improvement and

home purchase loans.

Household: Includes all persons occupying a housing unit. Persons not living in households are

classified as living in group quarters. In 100 percent tabulations, the count of households always

equals the count of occupied housing units.

Housing Affordability Ratio: This ratio is calculated by dividing the median household income

by the median housing value. It represents the amount of single family, owner-occupied housing

that a dollar of income can purchase for the median household in the census tract. Values closer

to 100 percent indicate greater affordability.

Limited-scope review: Performance under the Lending, Investment, and Service Tests is

analyzed using only quantitative factors (for example, geographic distribution, borrower

distribution, total number and dollar amount of investments, and branch distribution).


254

Location Quotient (LQ): The LQ is an industry concentration measure where an LQ of 1 means

that the industry‟s share of local employment equals that industry‟s share of the comparison area

(e.g., an LQ of 1.15 means that an area is 15% more reliant on that industry than the state as a

whole).

Low-income: Individual income that is less than 50 percent of the area median income, or a

median family income that is less than 50 percent, in the case of a geography.

Market share: The number of loans originated and purchased by the institution as a percentage

of the aggregate number of loans originated and purchased by all reporting lenders in the

metropolitan area/assessment area.

Metropolitan area (MA): A metropolitan statistical area (MSA) or a metropolitan division

(MD) as defined by the Office of Management and Budget. An MSA is a core area containing at

least one urbanized area of 50,000 or more inhabitants, together with adjacent communities

having a high degree of economic and social integration with that core. An MD is a division of

an MSA based on specific criteria including commuting patterns. Only an MSA that has a

population of at least 2.5 million may be divided into MDs.

Middle-income: Individual income that is at least 80 percent and less than 120 percent of the

area median income, or a median family income that is at least 80 percent and less than 120

percent, in the case of a geography.

Moderate-income: Individual income that is at least 50 percent and less than 80 percent of the

area median income, or a median family income that is at least 50 percent and less than 80

percent, in the case of a geography.

Multifamily: Refers to a residential structure that contains five or more units.

Other products: Includes any unreported optional category of loans for which the institution

collects and maintains data for consideration during a CRA examination. Examples of such

activity include consumer loans and other loan data an institution may provide concerning its

lending performance.

Owner-occupied units: Includes units occupied by the owner or co-owner, even if the unit has

not been fully paid for or is mortgaged.

Qualified investment: A qualified investment is defined as any lawful investment, deposit,

membership share, or grant that has as its primary purpose community development.


255

Rated area: A rated area is a state or multistate metropolitan area. For an institution with

domestic branches in only one state, the institution‟s CRA rating would be the state rating. If an

institution maintains domestic branches in more than one state, the institution will receive a

rating for each state in which those branches are located. If an institution maintains domestic

branches in two or more states within a multistate metropolitan area, the institution will receive a

rating for the multistate metropolitan area.

Small loan(s) to business(es): A loan included in 'loans to small businesses' as defined in the

Consolidated Report of Condition and Income (Call Report) and the Thrift Financial Reporting

(TFR) instructions. These loans have original amounts of $1 million or less and typically are

either secured by nonfarm or nonresidential real estate or are classified as commercial and

industrial loans. However, thrift institutions may also exercise the option to report loans secured

by nonfarm residential real estate as "small business loans" if the loans are reported on the TFR

as nonmortgage, commercial 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 original amounts of $500,000 or less and are either secured by farmland, or are classified as

loans to finance agricultural production and other loans to farmers.

Upper-income: Individual income that is more than 120 percent of the area median income, or

a median family income that is more than 120 percent, in the case of a geography.

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PUBLIC DISCLOSURE COMMUNITY REINVESTMENT ACT … · 2011. 8. 1. · PUBLIC DISCLOSURE January 10, 2011 COMMUNITY REINVESTMENT ACT PERFORMANCE EVALUATION Arvest Bank RSSD #311845 75