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FDIC Federal Register Citations
First City Bank

From: Vicki Freet [mailto:vfreet@myfirstcitybank.com]
Sent: Thursday, April 13, 2006 1:34 PM
To: Comments
Subject: CRE Regulation.doc

April 13, 2006

FDIC
550 17th Street, NW
Washington, DC 20429

Attn: Robert E. Feldman
Executive Secretary

Re: Comments

Dear Mr. Feldman:

First City Bank is a $53 million community bank in Columbus, Ohio. The bank has a $46 million dollar commercial real estate portfolio with capital of $4.3 million and a loan loss reserve of $500,000.

The Bank has had no losses from any commercial real estate loans made during the past eight years. Eight years ago, the current management team was formed and began commercial real estate origination, underwriting, managing and servicing efforts.

The Bank has been praised consistently by regulators from the FDIC and The State of Ohio for its high quality of commercial real estate loans and its management practices in this area. I personally inspect each property periodically during the servicing of each loan to access any deterioration of collateral or area and then take appropriate steps to protect the Bank if necessary. Our underwriting is conservative with the approach that making any new loans is unimportant, but maintaining asset quality is paramount.

If we were to diversify into another lending field, we would increase the riskiness of our assets. The Bank understands that diversification in general reduces risk, but adding a riskier asset in our opinion would outweigh this benefit.

The Bank lends in a stable economic market diversified by three major employers who by any reasonable projection will exist 50-100 years from now: The Ohio State University, The State of Ohio, and Battelle Institute (a major private research think tank).

I believe we should be able to continue our current successful and safe business practices as determined by our regulators and the historical data. While some banks or some markets may have excessive risk in commercial real estate lending, they should be judged individually and required to form appropriate solutions. Alternatively, we should be able to have individualized and appropriate capital, policies, and limits to meet our situation.

To impose one set of regulations for all is very unfair to those who are operating prudently and successfully now with their own different practices. Regulators should address CRE problems bank by bank, as needed. These regulations would impose a major burden on our Bank from a capital, forced diversification, and operational standpoint.

First City Bank urges you not to go forward with the proposed regulations. As an alternative, Banks of a smaller size with appropriate controls and a track record of successful management in this arena could be exempt.

Sincerely,
Douglas Simson
President and Chief Executive Officer
First City Bank
1885 Northwest Blvd.
Columbus, Ohio 43212
614-487-7782

 


Last Updated 04/17/2006 Regs@fdic.gov

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