Risk Management Manual of Examination Policies - FDIC

CONVENIENCE AND NEEDS OF THE COMMUNITY TO BE SERVED
Discuss the proposed institution’s primary trade area(s) including location and population. Address economic conditions, primary
industries, and major employers. Assess trade area(s) population demographics and the proposed institution’s willingness and ability
to meet the deposit and credit needs of the community to be served. Assess the competitive dynamics of the market and how the
proposed institution will compete for market share.
Summary and Findings
Proposed Service Areas
Per the Applicant, the primary trade areas are contained within AnyCounty-1 and AnyCounty-2, Anystate. A retail branch network
encompassing one traditional branch (main office) as well, a supermarket branch network will form the bank’s surrounding service
areas. During the first year, a total of six branches (five supermarket and one main office) are planned for AnyCounty-1, while seven
are envisioned for AnyCounty-2. Given the internet component of this business model, other market areas outside of the proposal
could conceivably be pursued.
Community Growth and Demographic Indicators 4 – AnyCounty, Anystate - MSA
Item 2005 Forecast 2000 1999 1998
Population (000) 1,247.1 1,131.2 1,106.7 1,084.0
Residential Building Permits 7,637 6,769 6,428 6,387
Mortgage Origination ($Mil) $6,207 $6,740 $6,946 $8,476
Unemployment Rate 5.1% 4.4% 5.0% 5.6%
Total Employment (000) 560.0 491.4 469.4 457.3
Gross Metro Product $Billion $45.2 $37.7 $35.2 $33.3
Top Employers & Industries in Trade Area
Name Business Type Employees
Columbia Beach Health Care Medical/Health 4,000
Intracoastal Health Systems Management Svc 3,200
Motorola, Inc Technology 2,300
Power and Light Utility 2,300
Pratt & Whitney Mfg./Technology 1,300
Demographic and Economic Trends – Anytown - MSA
The overall Anytown market remains moderately strong due to the County’s higher per capita income and strong job growth,
particularly in the services and retail trade sectors. Real Estate markets and favorable adsorption measures (residential housing
demand) have been driven by population growth, in-migration from the Southern State Counties, as well as, tourism.
Key short-term risks remain the weak national economy, which has been exacerbated post September 11, 2001. These factors have
negatively impacted tourism and its accompanying service industries. In addition, segments of the County, including the Anytown
area, have experienced very active new commercial real estate construction activity that has reportedly impacted rental rates for new
space. While current vacancy rates of around 14%, are below the 30% prevailing nearly a decade ago, any prolonged recession could
make it a more difficult environment for underwriting and funding quality commercial real estate credits. Manufacturing has endured
considerable layoffs and remains a weak area for the County. Motorola, State’s largest Technology employer, has experienced
declining revenue, weakening margins, as well as market share erosion. As a result, substantial layoffs have occurred company wide
in addition to its facilities in Anytown.
4 Source: FDIC Division of Insurance
FDIC 6510/10 (02-2002) 34