a. Small banks evaluated under the small bank performance evaluation. 1. Small Bank Lending Test conclusions. Unless a small bank opts to be evaluated pursuant to the Retail Lending Test in § 345.22, the FDIC assigns conclusions for a small bank's performance pursuant to the Small Bank Lending Test in § 345.29(a)(2) for each facility-based assessment area, in each State or multistate MSA, as applicable pursuant to § 345.28(c), and for the institution of “Outstanding,” “Satisfactory,” “Needs to Improve,” or “Substantial Noncompliance.”

i. Eligibility for a “Satisfactory” Small Bank Lending Test conclusion. The FDIC assigns a small bank's performance pursuant to the Small Bank Lending Test a conclusion of “Satisfactory” if, in general, the bank demonstrates:

A. A reasonable loan-to-deposit ratio (considering seasonal variations) given the bank's size, financial condition, the credit needs of its facility-based assessment areas, and taking into account, as appropriate, other lending-related activities such as loan originations for sale to the secondary markets, community development loans, and community development investments;

B. A majority of its loans and, as appropriate, other lending-related activities, are in its facility-based assessment areas;

C. A distribution of retail lending to and, as appropriate, other lending-related activities for individuals of different income levels (including low- and moderate-income individuals) and businesses and farms of different sizes that is reasonable given the demographics of the bank's facility-based assessment areas;

D. A reasonable geographic distribution of loans among census tracts of different income levels in the bank's facility-based assessment areas; and

E. A record of taking appropriate action, when warranted, in response to written complaints, if any, about the bank's performance in helping to meet the credit needs of its facility-based assessment areas.

ii. Eligibility for an “Outstanding” Small Bank Lending Test conclusion. A small bank that meets each of the standards for a “Satisfactory” conclusion under this paragraph a.1.ii. and exceeds some or all of those standards may warrant consideration for a lending evaluation conclusion of “Outstanding.”

iii. “Needs to Improve” or “Substantial Noncompliance” Small Bank Lending Test conclusions. A small bank may also receive a lending evaluation conclusion of “Needs to Improve” or “Substantial Noncompliance” depending on the degree to which its performance has failed to meet the standard for a “Satisfactory” conclusion.

2. Small bank ratings. Unless a small bank opts to be evaluated pursuant to the Retail Lending Test in § 345.22, the FDIC determines a small bank's rating for each State and multistate MSA, as applicable pursuant to § 345.28(c), and for the institution based on its Small Bank Lending Test conclusions at the State, multistate MSA, and institution level, respectively.

i. The FDIC assigns a rating based on the lending evaluation conclusion according to the category of the conclusion assigned: “Outstanding,” “Satisfactory,” “Needs to Improve,” or “Substantial Noncompliance.”

ii. The FDIC may adjust a small bank's institution rating where the bank has requested and received sufficient additional consideration pursuant to § 345.29(b)(1) and (3).

iii. The FDIC also considers any evidence of discriminatory or other illegal credit practices pursuant to § 345.28(d) and the bank's past performance pursuant to § 345.28(e).

3. The FDIC assigns a rating for small banks evaluated pursuant to the Retail Lending Test in § 345.22 as provided in appendix D to this part.

b. Intermediate banks evaluated pursuant to the Intermediate Bank Community Development Test in § 345.30. Unless an intermediate bank opts to be evaluated pursuant to the Community Development Financing Test in § 345.24, the FDIC assigns conclusions for an intermediate bank's performance pursuant to the Intermediate Bank Community Development Test in § 345.30 for each State and multistate MSA, as applicable pursuant to § 345.28(c), and for the institution of “Outstanding,” “High Satisfactory,” “Low Satisfactory,” “Needs to Improve,” or “Substantial Noncompliance.”

1. Intermediate Bank Community Development Test conclusions. i. Eligibility for a “Satisfactory” Intermediate Bank Community Development Test conclusion. The FDIC assigns an intermediate bank's community development performance a “Low Satisfactory” conclusion if the bank demonstrates adequate responsiveness, and a “High Satisfactory” conclusion if the bank demonstrates good responsiveness, to the community development needs of its facility-based assessment areas and, as applicable, nationwide area through community development loans, community development investments, and community development services. The adequacy of the bank's response will depend on its capacity for such community development activities, the need for such community development activities, and the availability of community development opportunities.

ii. Eligibility for an “Outstanding” Intermediate Bank Community Development Test conclusion. The FDIC assigns an intermediate bank's community development performance an “Outstanding” conclusion if the bank demonstrates excellent responsiveness to community development needs in its facility-based assessment areas and, as applicable, nationwide area through community development loans, community development investments, and community development services. The adequacy of the bank's response will depend on its capacity for such community development activities, the need for such community development activities, and the availability of community development opportunities.

iii. “Needs to Improve” or “Substantial Noncompliance” Intermediate Bank Community Development Test conclusions. The FDIC assigns an intermediate bank's community development performance a “Needs to Improve” or “Substantial Noncompliance” conclusion depending on the degree to which its performance has failed to meet the standards for a “Satisfactory” conclusion.

2. Intermediate bank ratings. The FDIC rates an intermediate bank's performance as provided in appendix D to this part.