Federal Deposit
Insurance Corporation

From: Hodges, Mike [mailto:mhodges@firstbankbrunswick.com]
Sent: Tuesday, October 19, 2004 5:35 PM
To: Comments
Cc: 'psmith@aba.com'
Subject: Reference RIN No. 3064-AC50

I am Mike Hodges President of The First Bank of Brunswick located in Brunswick, Georgia. Our CRA Assessment Area is Glynn County. The population of Glynn county is 67,578. The First Bank of Brunswick has assets of $155,259 but is classified as a large bank under CRA because it is owned by ABC Bancorp, a holding of over $1 billion in assets. This letter is to inform you that I strongly support the FDIC's proposal to raise the threshold for the small bank CRA examination to $1 billion without regard to the size of the bank's holding company. The regulatory burden that small banks are under due to the current regulation is extraordinary and would be reduced substantially under this proposal. I believe in the Community Reinvestment Act and support its underlying principles of serving the deposit and credit needs of everyone in our communities especially those of low- and moderate-income. However, under the tremendous requirements of loan coding, paperwork and reporting required under the large bank examination criteria, we are hindered from carrying out the original purpose of CRA. The time involved in paperwork in order to comply could be better spent serving our customers if we were not under the large bank requirements. We are expected to meet the standards imposed on the largest banks in our country which is very difficult for us.

Furthermore, I support the proposal to add a community development criterion to the small bank examination for larger community banks. I believe it would be much better than the investment test. For example, ABC Bancorp purchased community development oriented mortgage pool securities for each of ABC Bancorp's subsidiary banks. The FDIC examiners who handled our CRA exam in 2004 were not impressed with the small portion of these securities that backed a Brunswick project (which was purely coincidental). They indicated we needed investments which were more local and Glynn County is not big enough to support that many community development projects. Mandatory community development criteria for banks of any size would work as long as the CRA effort did not have to be balanced among ALL criteria. The First Bank of Brunswick scored 'High Satisfactory" on loans and services, but "Low Satisfactory" on investments and received a "Satisfactory" CRA rating under the new $1 billion rules. Our lending practices obviously followed the spirit of CRA, but had our bank not offered a free checking account, our services rating probably would have been lowered and, possibly, our overall CRA rating. Previously, under small bank rules, The First Bank of Brunswick had always received satisfactory ratings because we loaned and offered deposit services to ALL parts of our service area. Having to score in loans, deposits, and investments changed the ground rules and made a satisfactory rating harder ONLY BECAUSE we were now part of a $1 billion company.

I believe the FDIC proposal discussed in this letter would be a major improvement in the CRA regulations. This improvement will be in alignment with the meaning of the Community Reinvestment Act and I strongly urge the FDIC to adopt its proposal. I will be glad to discuss any of these issues further with you.

Sincerely,

Mike Hodges
President
The First Bank of Brunswick