NEW YORK STATE DEPARTMENT OF FINANCIAL SERVICES CONSUMER PROTECTION AND FINANCIAL ENFORCEMENT DIVISION One State Street New York, NY 10004 PUBLIC SUMMARY COMMUNITY REINVESTMENT ACT PERFORMANCE EVALUATION Date of Evaluation: December 31, 2018 Institution: Interaudi Bank 19 East 54th Street New York, NY 10022 Note: This evaluation is not an assessment of the financial condition of this institution. The rating assigned does not represent an analysis, conclusion or opinion of the New York State Department of Financial Services concerning the safety and soundness of this financial institution. TABLE OF CONTENTS Section General Information ......................................................................... 1 Overview of Institution’s Performance .............................................. 2 Performance Context ........................................................................ 3 Institution Profile Assessment Area Demographic & Economic Data Community Information Performance Tests and Assessment Factors .................................. 4 Community Development Test Innovative or Complex Practices Responsiveness to Credit and Community Development Needs Additional Factors Glossary ........................................................................................... 5 GENERAL INFORMATION This document is an evaluation of the Community Reinvestment Act (“CRA”) performance of Interaudi Bank (“IB” or the “Bank”) prepared by the New York State Department of Financial Services (“DFS” or the “Department”). This evaluation represents the Department’s current assessment and rating of the institution’s CRA performance based on an evaluation conducted as of December 31, 2018. Section 28-b of the New York Banking Law, as amended, requires that when evaluating certain applications, the Superintendent of Financial Services shall assess a banking institution’s record of helping to meet the credit needs of its entire community, including low- and moderate-income (“LMI”) areas, consistent with safe and sound operations. Part 76 of the General Regulations of the Superintendent (“GRS”) implements Section 28-b and further requires that the Department assess the CRA performance records of regulated financial institutions. Part 76 establishes the framework and criteria by which the Department will evaluate institutions’ performance. Section 76.5 further provides that the Department will prepare a written report summarizing the results of such assessment and will assign to each institution a numerical CRA rating based on a 1 to 4 scoring system. The numerical scores represent an assessment of CRA performance as follows: (1) Outstanding record of meeting community credit needs; (2) Satisfactory record of meeting community credit needs; (3) Needs to improve in meeting community credit needs; and (4) Substantial noncompliance in meeting community credit needs. Section 76.5 further requires that the CRA rating and the written summary (“Evaluation”) be made available to the public. Evaluations of banking institutions are primarily based on a review of performance tests and standards described in Section 76.7 and detailed in Sections 76.8 through 76.13. The tests and standards incorporate the 12 assessment factors contained in Section 28-b of the New York Banking Law. For an explanation of technical terms used in this report, please consult the GLOSSARY at the back of this document. 1 - 1 OVERVIEW OF INSTITUTION’S PERFORMANCE Overall CRA Rating: “Satisfactory” The Department evaluated IB’s performance according to the community development test for wholesale or limited purpose banking institutions pursuant to Section 76.11 of the GRS. The evaluation period covered April 1, 2014 through December 31, 2018. IB is rated “Satisfactory” or “2.” This rating means IB had a satisfactory record of helping to meet community credit needs. This rating is based on the following factors: Community Development Test: “Satisfactory” IB’s community development performance demonstrated a reasonable responsiveness to the community development needs of its assessment area considering IB’s capacity, and the need and availability of such opportunities for community development in its assessment area. Community Development Lending: “Outstanding” IB originated $42.6 million in new community development loans during the evaluation period and had no outstanding loans from prior evaluation periods. This demonstrated an excellent level of community development lending over the course of the evaluation period. Community Development Qualified Investments: “Satisfactory” IB made $3.5 million in new qualified investments during the evaluation period, which included $275,869 in grants, and had $403,684 in qualified investments outstanding from prior evaluation periods. This demonstrated a reasonable level of community development investments and grants over the course of the evaluation period. Community Development Services: “Needs to Improve” IB demonstrated a poor level of community development services over the course of the evaluation period. The Bank reported one instance of community development service provided by the CRA officer. 2 - 1 Innovative or Complex Practices: “Satisfactory” IB demonstrated a reasonable level of innovative or flexible community development practices through its community development loans that aimed to revitalize low-income communities, as well as its community development investment promoting economic development. Responsiveness to Credit and Community Development Needs: “Satisfactory” IB demonstrated a reasonable level of responsiveness to credit and community development needs through its community development lending and investing activities. This Evaluation was conducted based on a review of the 12 assessment factors set forth in Section 28-b of the New York Banking Law and Part 76 of the General Regulations of the Superintendent. 2 - 2 PERFORMANCE CONTEXT Institution Profile Chartered in 1983, IB is a wholesale bank headquartered in New York City, New York. In addition to its New York branch attached to its corporate headquarters in New York City, IB maintains a second branch office in Miami, Florida. IB has a wholesale banking institution designation for CRA purposes. As a wholesale institution, IB does not engage in residential mortgage, home improvement, or any other type of consumer loans, except as an accommodation for existing customers. IB is a relationship bank with a large international clientele base. The Bank offers its clients deposit services, credit and debit cards, tailored business and personal loans, lines of credit and investment services. Investment services are provided through IB’s two subsidiaries: Ameraudi Asset Management and Ameraudi Investment Services. In its Consolidated Report of Condition (the “Call Report”) as of December 31,2018, filed with the Federal Deposit Insurance Corporation (“FDIC”), the Bank reported total assets of $2 billion, of which $855 million were net loans and lease financing receivables. It also reported total deposits of $1.7 billion, resulting in a LTD ratio of 49.5%. According to the latest available comparative deposit data, as of June 30, 2018, IB had a market share of 0.08% or $977 million in a market of $1.3 trillion, ranking it 44th among 110 deposit-taking institutions in the assessment area. The following is a summary of IB’s loan portfolio, based on Schedule RC-C of the Bank’s December 31, 2014, 2015, 2016, 2017, and 2018 Call Reports: TOTAL GROSS LOANS OUTSTANDING 2014 2015 2016 2017 2018 Loan Type $000's % $000's % $000's % $000's % $000's % 1-4 Family Res. Mrtg. Lns 289,864 46.0 350,397 47.8 428,565 52.9 424,617 51.4 425,977 49.3 Commercial & Industrial Loans 105,759 16.8 120,273 16.4 137,224 17.0 118,528 14.4 112,366 13.0 Commercial Mortgage Loans 161,842 25.7 179,233 24.4 176,231 21.8 195,432 23.7 222,523 25.7 Multifamily Mortgages 22,191 3.5 22,447 3.1 19,645 2.4 26,131 3.2 24,208 2.8 Consumer Loans 6,202 1.0 6,208 0.8 5,348 0.7 5,681 0.7 5,963 0.7 Construction Loans 38,771 6.1 48,434 6.6 35,982 4.4 49,523 6.0 67,384 7.8 Other Loans 5,905 0.9 6,782 0.9 6,454 0.8 5,708 0.7 5,963 0.7 Total Gross Loans 630,534 733,774 809,449 825,620 864,384 The above summary of year-end gross loans outstanding showed IB had 49.3% in one-to- four family residential mortgages as of December 31, 2018; however, a majority of these loans were made to business entities. Commercial lending activities comprised of commercial mortgages, commercial and industrial loans, multifamily mortgages and construction loans, represented another 49.3% of the total loan portfolio. 3 - 1 Examiners noted no evidence of financial or legal impediments that had an adverse impact on IB’s ability to meet the credit needs of its community. Assessment Area The Bank’s assessment area is comprised of Bronx, Kings, New York and Queens counties. On June 2016, IB changed its assessment area, and excluded Richmond County from its assessment area. There are 2,057 census tracts in the area, of which 343 are low-income, 597 are moderate- income, 595 are middle-income, 459 are upper-income and 63 are tracts with no income indicated. Assessment Area Census Tracts by Income Level County N/A Low Mod Middle Upper Total LMI % Bronx 7 160 90 56 26 339 73.7 Kings 14 115 280 211 141 761 51.9 New York 15 44 51 20 158 288 33.0 Queens 27 24 176 308 134 669 29.9 Total 63 343 597 595 459 2,057 45.7 The assessment area appears reasonable based upon the location of the bank’s offices and its lending patterns. There is no evidence that IB has arbitrarily excluded LMI areas. Demographic & Economic Data The assessment area had a population of 7,954,262 during the examination period. Approximately 12.6% of the population were over the age of 65 and 18.9% were under the age of 16. Of the 1,742,525 families in the assessment area, 33.5% were low-income, 16.5% were moderate-income, 15.5% were middle-income, and 34.5% were upper-income. There were 2,947,751 households in the assessment area, of which 19.8% had income below the poverty level and 4.2% were on public assistance.