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From: jmccoy@communitybank.net [mailto:jmccoy@communitybank.net]
Sent: Tuesday, June 07, 2005 9:22 AM To: Comments Subject: Loan Classifications
After reviewing the proposed changes to loan classifications, I am writing
to let you know I am opposed to these changes. Our bank's internal system
is patterened after the current regulatory classifications. This method
is well understood by our entire management team including all of our
lenders. Our lenders are responsible for self-assessing their portfolio
with executive management oversight. Everyone understands the process and
performs this task on a quarterly basis within a minimal amount of time.
With few exceptions, our internal classifications have been in line with
examiner classifications. In addition, our ability to identify problem
credits has allowed us to effectively manage our loan portfolio with a
minimum amount of losses. I'm concerned that a change to a more complex
and burdensome task will slow the process down in regards to internal
ratings and may not allow us to be as effective in identifying problem
loans as the new method will not be as well understood. I also believe
that it would create communication problems between examiners and
bankers. At the present time, both sides understand the present system
and are able to effectively discuss issues surrounding a problem loan.
Our bank has just over $90 million in loans. We have two offices and six
lenders including the President. In addition to our duties as lenders we
have other responsibilities including branch management, A/L planning,
marketing, investments, compliance, and other jobs necessary to be done
in an independent bank. I'm concerned that changing the present loan
classification system will hinder our ability to sufficiently perform
other tasks due to the time it will take to understand and implement the
new process. Our present system has worked well for us. Please allow
this system to remain in place for the future.
Thanks, Jeff McCoy
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Last Updated 06/08/2005 | Regs@fdic.gov |