Federal Deposit
Insurance Corporation

First National Bank

October 5, 2004

Mr. Robert E. Feldman
Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th Street NW Washington, DC 20429

Re: RIN3064-AC50 Community Reinvestment Act (CRA)

Dear Mr. Feldman:

I am writing on behalf of First National Bank, an affiliate of FNB Corporation, Christiansburg, Virginia, to comment on the FDIC's proposed changes to its CRA regulation. The Board and management strongly support the FDIC's proposal to raise the definition of "small bank", for purposes of determining those banks eligible for the streamlined examination standards, from $250 million in assets to $1 billion in assets regardless of holding company affiliation. We believe the arguments in support of reduced regulatory reporting relative to CRA are compelling, and urge the FDIC to finalize its proposal at the earliest possible time.

Having served as the Corporation's Chief Risk Officer prior to my current assignment, I can personally attest to the enormous and growing regulatory burden. New requirements under the USA Patriot Act focusing on homeland security and the disruption of terrorist financing and the Sarbannes-Oxley Act require dedicated staffing resources increasing the overall cost of Regulatory Compliance. Community Banks like First National Bank are having to resort to "centralization and systemization" of Compliance processes further adding to the compliance burden. We highly encourage the FDIC in its efforts to reduce this burden whenever possible. CRA is an area in which the compliance burden can and should be reduced.

In this regard, Community Banks like First National Bank, subject to the large bank examination standards under CRA have the greatest challenge since we do not have the resources, both human and systems, to devote to the detailed CRA administrative requirements that large banks have available. Increasing the threshold for streamlined examination eligibility would benefit FNB Corporation significantly, without in any way affecting our dedication to CRA lending.

CRA lending is a very important component of our overall Community Bank lending strategy and our commitment to meeting the financial services needs of the communities we serve. First National Bank will celebrate 100 years of service to the community in 2006. We are very proud of the partnerships we have forged to provide new construction for low-income families and rehabilitation of single-family homes for the working poor.

Experience has proved that small banks like First National Bank simply cannot compete against the large banks and super regionals for qualified investments in the communities we serve. The large bank test, with its investment component, simply does not work for Community Banks.

To summarize, we applaud the FDIC for taking the initiative to relieve the regulatory burden and inherent inequities of current CRA reporting requirements. Making CRA easier by adopting a "small bank" definition will free valuable resources and reduce the growing regulatory compliance burden. We appreciate the opportunity to comment on this helpful initiative.

Sincerely
R. Bruce Munro
President & Chief Executive Officer