FDIC Federal Register Citations

From: Neil Joiner
Sent: Thursday, November 06, 2008 8:40 AM
To: Comments
Subject: Assessments - RIN-3064-AD35

We are a small bank of about $100 million in assets in a rural community.  We have experienced substantial growth recently due to being able to purchase loans from other banks with liquidity issues. Our capital remains at about 15 percent.  The most economical way to fund this growth is through brokered deposits.  The brokered rate is around 3.75 percent for one year.  That is 50 to 125 basis points less than some bank competitors are paying.

In my opinion banks should not be penalized for rapid growth which is planned and managed or for using the lowest cost of funding.  The brokered deposits work well for us as we can acquire them for the time we expect to need them.  If we pay up high rates to get local deposits that has an adverse effect on earnings. It also can put the bank in an uncomfotable position when the deposits mature and we may need to tell the local customer that we no longer have a need for the deposits. 

If the use of brokered deposits is discouraged through higher FDIC premiums, it would mean that we would not be as receptive to purchasing loans from our fellow bankers.  The present local CD market would be too costly to attract funds that would allow for any reasonable margin.  I respectfully suggest that this issue be considered further.  The current proposal would, in my opinion, cause further problems in the banking industry rather than being a part of the solution. 

Sincerely,

Neil Joiner
President
Bank of Dooly
Vienna, GA  31092