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FDIC Federal Register Citations Community First Bank From: Chuck Daily [mailto:daily@htctech.net] Federal Deposit Insurance Corporation Dear Sir: Thank you for the opportunity to comment on this proposed interagency guidance. I urged the regulators not to go forward with the guidance as it has been proposed. Most community banks like ours, are underwriting their CRE loans prudently. Since we are a community bank, we lend in areas that are in close proximity to our bank and are therefore very knowledgeable of the economic conditions. We always carefully analyze our borrower's financial condition and remain very close to our customers. Because of this, we feel we are in a excellent position to handle future downturns in CRE. Since we are an independent community bank, this proposed guidance is unfairly burdensome. We cannot diversify our portfolio to the extent of the larger regional banks. Our CRE portfolio has grown in response to the needs of our community. In our local market, CRE loans are the predominant type of loans that we can successfully compete for and are the most profitable. If we are pressured to lower our CRE exposure, it will have a negative impact on our ability to generate income and additional capital since we will lose good loans to larger competitors. This proposal could in fact weaken our bank if we are restricted in seeking out sound and profitable CRE loans in our local market. There is already several real estate lending standards, regulations and guidelines which along with our loan policies and practices have served our bank very well over the years. The proposed recommendations regarding management information system reports will be particularly costly to small banks and add to an already very heavy regulatory burden on banks like Community First Bank. Regulators should address CRE management problems bank by bank. The proposed threshold limits of CRE loans to capital are too restrictive and do not take into account the lending and risk management practices of individual institutions. They also do not recognize that different segments of the CRE markets have different levels of risk. Therefore, the thresholds may not give an accurate picture of the risk to an institution. Regulators should consider the bank's allowance for losses and current capital levels along with risk management practices. I encourage the regulators to use the regulatory tools already in place to identify and address CRE lending risks were they truly exist and abandon the proposed broad brush thresholds that are too restrictive and misleading. Very truly yours Charles W. Daily Community First Bank
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| Last Updated 04/14/2006 | Regs@fdic.gov | |