Federal Deposit
Insurance Corporation

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

Re: Community Reinvestment Act Regulations – RIN # 3064-A

Dear Mr. Feldman:

St: Joseph Capital Bank (SJCB) strongly supports the proposed increase in the asset size limit for banks eligible for the small bank streamlined Community Reinvestment Act (CRA) examination process. We agree with the American Banker's Association (ABA) and the Independent Community Banker's of America (ICBA) that an increased threshold to at least $1 billion in assets would be a significant improvement toward reducing regulatory burden for larger community banks, while maintaining the overall integrity of promoting community reinvestment.

St. Joseph Capital Corporation is a bank holding company whose headquarters are located in Mishawaka, Indiana. Our primary operating subsidiary, St Joseph Capital Bank, provides a broad-array of banking services to-businesses and individuals in. the Michiana area. With total assets of $313.7 million at the end of June 2004, we are now classified as a "large" bank for CRA examination purposes. However, our size is misleading, as we currently operate out of a single location, with less than 100 full time employees. Our primary service area is defined as a 12-mile- radius around our office. We are expanding in 2005 by opening a branch in the adjacent Elkhart area to further support the Michiana market.

We believe the bulk of CRA examination resources should be focused on truly large banks with hundreds or thousands of offices and branches across diverse markets. Most of those offices and branches never see a CRA examiner. Those institutions have a much greater potential for diverting resources from smaller "less-profitable" communities into larger. metropolitan markets.

Small local institutions like SJCB could not survive unless we are truly serving our local client base. We provide the traditional bank deposit and lending products, concentrating our activities within the local community.  However; our size puts us at a competitive disadvantage under the large-bank investment test. It is much more difficult for SJCB to compete for qualified investments with the larger multi-billion dollar banks located in our market. SJCB agrees with your' proposal' to balance, the evaluation between community development lending, investing and 'service activities based on the opportunities in the market and SJCB's own-strategic strengths. This more flexible approach provides a more effective measure of a bank's activities.

Our service to the community is much more involved. As a corporation, we donate financial and directorial support to several local charitable, religious-and civic organizations. Our employees donate countless personal hours to these same organizations. The Bank takes pride in supporting our employees' efforts, offering financial support on occasion, and allowing use of Bank time for some activities.

Most of these activities currently receive no CRA credit for the Bank. Therefore, we would also propose that these types of service activities be given consideration under the Community Development criterion.

The proposed regulatory relief would also significantly reduce the compliance costs for institutions like SJCB by reducing unnecessary paperwork, improving productivity and reallocating resources to further serve our client base. The examination costs per employee are unduly burdensome on larger community banks like SJCB in comparison to the same testing being done on a trillion dollar mega-bank. The streamlined CRA exam for small banks does not relieve us of our CRA responsibilities. However, the current loan data collection and reporting, as well as the investment test, are more suited to larger financial institutions.

St. Joseph Capital Bank is dedicated to serving the financial needs of our local community. However, the existing CRA regulations place community banks like us at a competitive disadvantage. We urge the FDIC to act promptly to raise the examination threshold and applaud the agency's efforts to reduce the regulatory burden placed on community banks.

Thank you for the opportunity to comment.

John W. Rosenthal
Chairman, President & Chief Executive Officer

Katharine J.J. Ryan
Vice President
Compliance Officer

St. Joseph Capital Bank
Mishawaka, IN