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Banking Low- and Moderate- Income Consumers

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

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Banking Low- and Moderate- Income Consumers

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  1. Banking Low- and Moderate- Income Consumers A Critical Piece of the Puzzle: CRA Freedom Loan Products WesBanco Bank Inc.

  2. 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

  3. CRA ASSESSMENT AREA • 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 Pittsburgh Columbus Dayton Cincinnati Charleston

  4. PERFORMANCE CONTEXT POVERTY INDICATORS NOTE EXTREMES

  5. 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

  6. 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

  7. CRA FREEDOM MORTGAGE Developed in 2001 in Direct Response to Focus Group of Community Leaders in Affordable Housing • 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.

  8. CRA FREEDOM MORTGAGE 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

  9. 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

  10. CRA FREEDOM AUTO LOAN Introduced in 2001 to Indirect Automobile Dealerships and Expanded to the Branch Network and Community Group Referral Sources in 2002. • 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

  11. PERFORMANCE Delinquency

  12. Marketing Traditional and Non-Traditional Approaches • 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

  13. WesBanco Bank Inc.CorporateCommunity Development Department

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