Banking Low- and Moderate- Income Consumers

A Critical Piece of the Puzzle:

CRA Freedom Loan Products

WesBanco Bank Inc.

WesBanco Bank Inc. 

ABOUT WESBANCO
        - Corporate Headquarters: Wheeling, West Virginia
        - Assets: $5.4 Billion
        - Founded in 1870
        - Banking Operations in West Virginia, Ohio and Pennsylvania
        - 111 Banking Offices, 2 LPOs, 2 Administration Offices, 126 ATMs
        - 1,441 Employees
        - Ranked 1-3 in Market Share in 15 of 37 Counties

COMMUNITY DEVELOPMENT DEPARTMENT
        - CRA Compliance Function
        - 15 Separate CRA Assessment Areas
        - Seven Market Community Development Councils / Chairpersons 
        - WesBanco Bank Community Development Corporation (CDC)
        - 	New Market Tax Credits = $60MM
        - Four Consecutive “Outstanding” CRA Exam Ratings Since 2001

CRA ASSESSMENT AREA

Columbus

Cincinnati

Charleston

Pittsburgh

Dayton
        - Three States –     WV,OH,PA
        - Fifteen Separate Assessment Areas
        - 3 Multi-State MSAs
        - 6 Partial MSA
        - 2 In-State Complete MSAs
        - 4 Non-MSA Areas
        - CHALLENGE: Densely-Populated Metro Urban Areas to Large Census Tracts within Rural Appalachia

PERFORMANCE CONTEXT

POVERTY INDICATORS NOTE EXTREMES 

CRA FREEDOM LOAN PRODUCTS

CRA FREEDOM MORTGAGE

LMI Borrowers

Higher Income Borrowers Purchasing Owner-Occupied Homes in LMI Neighborhoods

Construction – Perm Product Available

CRA FREEDOM  MODERNIZATION HOME IMPROVEMENT LOAN

LMI Borrowers

Higher Income Borrowers Renovating Owner-Occupied Homes in LMI Neighborhoods

CRA FREEDOM AUTO LOAN

LMI Borrowers

Must be Within

a Designated 

CRA Assessment 

Area

SUCCESS

SINCE INCEPTION – 2001

CRA FREEDOM MORTGAGE

615 = $40,646,433

CRA FREEDOM MODERNIZATION HOME IMPROVEMENT LOAN

2,134  Loans = $12,395,120

CRA FREEDOM AUTO LOANS

990 Loans = $9,084,426

TOTAL

3,739 loans = $62,125,979

“Some people want it to happen.  Some people wish it to happen. Others make it happen.”

 - Michael Jordan 

CRA FREEDOM MORTGAGE
        - Fixed Rate. 30-Year Term, Up to 95% LTV in Certain Market Areas.
        - Flexible Underwriting: 
        - Reasonable Credit Score of 640
        - Credit based on last 12 months of Credit	    History;
        - Allowance for Medical Collections,
        - Collections <$1500 Individual or $5000 	    Aggregate May Be Overlooked.
        - Face-to-Face Pre-Purchase Counseling is Required. Borrower Must Also Inject $500 of His/Her Own Funds.

Developed in 2001 in Direct Response to Focus Group of Community Leaders in         Affordable Housing 

CRA Freedom Mortgage Refinance

Program expanded when Bank found it difficult to source proportionate refinance applications from LMI homeowners. 

		LMI Barriers to Refinance:

		- high initial LTV;		

		- slower equity growth;

		- credit issues;

		- less able to bear cost of refinance

No Cash-Out Equity Clause Ensures Product is Used Responsibly

CRA FREEDOM MORTGAGE

CRA FREEDOM MODERNIZATION              HOME IMPROVEMENT LOAN

Developed in 2001 as a Weatherization Product for LMI Borrowers to Make Improvements to their Owner-Occupied Homes for Heating, Windows, Energy Efficiency, etc.
        - Unsecured Loan 
        - Fixed Rate, Term Up to 10 Years
        - Minimum Loan $1,500; Maximum $10,000  (based on credit score)
        - 580 Minimum Credit Score; Medical or Utility Collections <$800 Disregarded
        - $60 Origination Fee (Reduced from $140)
        - Average Loan Amount: $5,480 (2007-2010)
        - Mobile Homes Are Eligible
        - HMDA Product

CRA FREEDOM AUTO LOAN
        - New or Used Vehicles
        - Fixed Rate
        - 72 Month Max Term on New Vehicles; 66 Month Maximum Term on Used Vehicles
        - $2,000 Minimum Loan Amount (No Max)
        - 580 Minimum Credit Score
        - Debt-to-Income Ratio to 50%
        - $60 Origination Fee (Reduced from $140) 
        - Avg. Loan: $9,881 (2007 – 2010)
        - Refinance Available

Introduced in 2001 to Indirect Automobile Dealerships and Expanded to the Branch Network and Community Group Referral Sources in 2002.  

PERFORMANCE

Delinquency
| Product Originations2008, 2009, 2010 | Percentage of Portfolio Reaching: |
|--------------------------------------|-----------------------------------|
| 30 Days                              | 60 Days                           | 90 Days |
| CRA Freedom Mortgage                 | 10.43%                            | <1% | 0% |
| CRA Freedom Modernization            | 9.7%                              | 4.5% | 3.2% |
| CRA Freedom Auto                     | 12.30%                            | 5.3% | 1.6% |

Marketing

 Community Outreach (Non-Profit and Community Referral Sources); 
        - Commercial & Small Business Calls (Auto Dealerships; Realtors; Home Improvement Contractors)
        - Tabling Events (Home Shows; Auto Shows)
        - Branch Call Campaigns
        - In-Branch Campaigns

Traditional and 

	Non-Traditional Approaches 

WesBanco Bank Inc.CorporateCommunity Development Department