Orders Issued Under Sections 3 and 4 of the Bank Holding Company Act

Federal Reserve Bulletin, Nov, 1999

In 1998, Firstar Ohio originated approximately 19 percent of its Ohio small business loans to businesses located in LMI census tracts that had gross annual revenues of less than $1 million. The percentage of such loans made by lenders in the aggregate was approximately 17 percent. Firstar states that Firstar Ohio also participates in the Ohio Agricultural Linked Deposit Program, under which Firstar Ohio provides low-interest loans to Ohio farmers that are funded by the State of Ohio. Firstar represents that Firstar Ohio made 30 loans, totaling approximately $4.6 million, under this program from January 1997 to June 1999.

In July 1999, Firstar announced the establishment of the Adopt-A-Block program to be implemented in all of its subsidiary banks. Under the program, specific blocks or neighborhoods with special credit needs will be identified, and residents and small business in these communities will be offered low-cost loans and other banking services. For example, the program includes fixed-rate mortgage loans with no private mortgage insurance requirements and low down payment requirements. Firstar represents that it has identified to date four communities for the program in Ohio, Kentucky, and Wisconsin. Firstar also indicates that, in the two years since its CRA performance examination, Firstar Ohio has sponsored over 100 financial training programs and seminars that offer training and support to LMI individuals in the areas of homeownership, obtaining credit, small business formation, low-income housing development, and nonprofit financing.

Firstar Milwaukee. Examiners found that Firstar Milwaukee was responsive to the credit needs of all segments of its service community. In particular, examiners commended the bank for the level of its home mortgage and home improvement lending in LMI census tracts. Examiners noted that, in 1996, Firstar Milwaukee made 10 percent of its housing-related loans in LMI census tracts, which almost equaled the 13 percent of owner-occupied housing in the bank's service communities that were in these census tracts. Examiners also commended Firstar Milwaukee for making 38 percent of its consumer loans to LMI borrowers, which exceeded the percentage of LMI borrowers in the general population in the bank's assessment area. Since that examination, Firstar represents that Firstar Milwaukee made approximately 14.6 percent of its housing-related loans in LMI census tracts in 1997, and approximately 43 percent of its housing-related loans in LMI census tracts in 1998.

Examiners commended Firstar Milwaukee for its lending to small businesses, including small businesses in LMI census tracts. Examiners noted that Firstar Milwaukee had introduced a small business line-of-credit program that offered a streamlined application process and was designed for emerging small businesses that needed to build a credit history. From the program's inception in 1996 through November 1997, examiners noted that Firstar Milwaukee originated 147 small business credit lines under this program, totaling more than $3.5 million.(26) In addition, Firstar indicates that, in 1998, Firstar Milwaukee originated 808 loans with principal amounts of $1 million or less, totaling $81.2 million, to businesses with gross annual revenues of $1 million or less. On a combined basis, the Firstar lending organizations operating in Wisconsin, which include Firstar Milwaukee, Firstar Wisconsin, and Firstar Home Mortgage Corporation ("FHMC"), originated 17.5 percent of their loans to businesses with gross annual revenues of less than $1 million in LMI census tracts in Wisconsin in 1998, compared to 12.5 percent made by lenders in the aggregate.