Federal Deposit
Insurance Corporation

Dear Sir, My name is Charles D. Holmes and I am a senior lender with a community bank by the name of BankFirst Financial Services home office Macon, Mississippi. Since the comment time has been extended to April 13th, I would like to make some observations regarding the proposed guidelines. We have total assets of $510.3 million, total loans of $343,222,481, a reserve for loan losses of 1.00%,and a total risk-based capital ratio of 10.76%. Jerry Wilson our President took over the reins of the bank in 1984. He was an ex-bank examiner and guided the Macon bank through the worst farm crises since the depression. Once they over came the crises, the board decided to branch in more urban arrears, the surrounding towns included Columbus, Starkville and West Point. In 2002 we branched into Madison, Ms. ( highest income per capita in the state ), recently we opened a branch in Flowood, Ms ( second highest income per capita in the state ). These two towns along with Starkville, Ms represent tremendous growth opportunities for us. The growth that has occurred has been primarily associated with real estate. We at BankFirst have embraced these opportunities and take the CRA mission to heart. By servicing our communities needs, we feel as if we are doing our part in filling a void that the larger banks have left. These proposed guidelines are set up in a way as to disproportionately effect community banks versus our larger counterparts because they have more capital. (A) Board oversight and strategic plans are no problem because the board is aware of all credits over $300,000 and we have had numerous suitors over the past few years. (B) We underwrite our loans as well as any other bank. We understand loan to values and debt coverage ratios.(C) We feel our loan loss reserve is adequate coupled with our earnings and capital position. (D) We currently have a risk rating system in place, to replace it with another will be costly and time consuming. Stress testing projects as to interest rates and occupancy rates offers little in the way of valuable information. If the economists are correct the Federal Reserve is about through raising interest rates anyway. Declining interest rates help support real estate values.If we believe the government, the inflation rate is tame. (E) If our capital falls below our pier group then we will have to raise more capital, adjust our dividend, or find a suitor. (F) I find fault with the inclusiveness of all real estate loans ( except 1 to 4 family and commercial owner occupied ) within the concentration formula. It does not address timing, trends, low loan to value or seasoned loans. If we look at a 5 year old motel loan that has performed with a debt coverage ratio of 1.25 to1.00, a loan to value beginning at 80% and now 70% or less then to me it should not be in the formula. A development loan secured by residential lots that has gone from 75% to less than 50% loan to value over time should not be included. Owner occupied where the other tenants represent greater than 50% of the revenue should be excluded especially if a few years performance is documented. Thank you for your time. Sincerely, Charles D. Holmes SVP email to: Federal Deposit Insurance Corporation