Risk Management Manual of Examination Policies - FDIC

VI. CONVENIENCE AND NEEDS OF THE COMMUNITY TO BE SERVED (Continued)
Community Growth and Demographic Indicators 5 – Anytown, Anystate - MSA
Item 2005 Forecast 2000 1999 1998
Population (000) 1,786.9 1,623.0 1,588.7 1,555.2
Residential Building Permits 8,865 9,160 8,574 8,753
Mortgage Origination ($Mil) $8,227 $9,159 $8,911 $10,453
Unemployment Rate 4.3% 3.7% 4.1% 4.5%
Total Employment (000) 755.4 676.0 652.7 639.5
Gross Metro Product $Billion $54.8 $46.2 $43.4 $41.3
Top Employers & Industries in Trade Area
Name Business Type Employees
North Hospital District Medical/Health 6,652
Winn-Dixie, Inc. Retail/Grocery 6,110
American Express Financial Svc. 4,700
Publix Supermarkets, Inc Retail/Grocery 4,200
Motorola, Inc. Technology 4,000
Demographic and Economic Trends – Anytown, Anystate - MSA
Economic trends convey strong growth despite a weaker national economy. Growth has been led by the services, wholesale trade,
and finance industries.
The residential housing market is particularly active. Tourism and leisure (hotel/cruise ship lines) remains one of the MSA’s key
economic drivers, However, its outlook has been impacted by the general state of the economy and September 11, 2001 attack on the
US. In addition, international trade with Latin American trading partners may decline somewhat considering the adverse market
conditions within Argentina, South America’s second largest economy. Manufacturing risks are similar to the Anytown MSA in light
of Motorola’s size and scale within the area. With regard to commercial real estate, vacancy rates within the Broward office market
rose significantly during Q2 2001 to 16.3% versus 9.3% for the same period a year ago 6 . Robust new construction activity, an
increase in sublease space, weaker demand, and a softer economy appear to be contributing factors. These trends, should they
continue, will pose the same lending risks and challenges previously cited.
Competition – Financial Services
The Applicant will encounter intense competition for funding within both market areas. The FDIC’s Summary of Deposits Report for
June 2001, indicates that the AnyCounty MSAs hold 450 and 405 banking and thrift offices with aggregate deposit shares of $22.3
and $23.9 billion, respectively. A compelling level of the market share (over 70% for both MSAs) is held by the offices of out of state
regional and super-regional bank and thrift holding companies.
The Applicant professes that its multiple delivery channels coupled with attractive rates and efficient service will enable it to compete
within the proposed PSA/MSA. The organizers also contend that the recent performance of the eleven supermarket branches as well
as, contacts from several directors within the community will enhance the proposal’s probability for successfully acquiring deposits
within these markets.
The finding on this factor is FAVORABLE.
5 Source: See Supra
6 Grubb & Ellis Research , Second Quarter 2001; Vacancy Rates Increase as Construction Continues., Page 1.
FDIC 6510/10 (02-2002) 35