From: Keith Pollnow
Sent: Tuesday, November 04, 2008 4:34 PM
To: Comments
Subject: FDIC RIN 3064-AD37

I would like to submit two comments today pertaining to the TLGP.

1.       The 75 bps premium to guarantee unsecured debt is excessive in relationship to the current level of Fed Funds market rates available. Banks will be forced to either increase rates we charge for loans which will contribute to the “credit crunch” or, the additional borrowing costs will be absorbed in the net interest margin of the bank eroding earnings and liquidity.

2.       The 125%  cap of unsecured debt as of 9/30/08 is inadequate.  The cap essentially eliminates a banks’ ability to borrow up to their previously negotiated overnight line limits.  For example, we had roughly $3M borrowed overnight on 9/30/08 which equates to a $3.75M cap.  However our previously negotiated unsecured line access is $11.8M.  Our ability to draw the $8M difference would virtually be eliminated since preference will be given to guaranteed borrowers. Thus the liquidity issue arises again.

In summary, as a de novo with extraordinary capital and asset quality, we find the terms of the TLGP a hindrance to our future growth. If implemented as proposed, it will restrict our ability to continue to  provide quality credit accommodations in our community.     

Keith C. Pollnow
President & CEO