Federal Deposit
Insurance Corporation

On behalf of Bank President Charles Forster, I was asked to respond to you on the proposed changes on commercial real estate lending guidance. Collegiate Peaks Bank is a $100 million bank in the central mountains of Colorado. The entire local economy is driven one way or another by real estate. Real estate loans in one form or another comprise more than 80% of this bank's entire loan portfolio. The proposed concentrations (100% or more of capital in construction, land development and land loans as well as 300% or more of capital in multifamily and nonfarm non residential property loans, and construction, land development and land loans) will adversely affect our ability to meet the financial needs of customers in our market. We do not believe that arbitrary standards such as these will improve on our ability to manage risk and to meet the needs of our customers.

By the very nature of our market area and economy, this bank closely monitors our loan portfolio to manage the risk that is inherent in our concentration of real estate loans. We firmly believe that the risk in the real estate concentrations such as ours, is mitigated through prudent underwriting of loans and established real estate appraisal standards. This bank is proud of the fact that in our entire history we have never experienced a loss on a defaulted real estate loan. That does not mean that there have not been foreclosures in history. It means that because of our prudent underwriting and appraisals we have not experienced a charge to loan loss reserves on a real estate loan that went into default. We do not believe that the proposed rules will improve on our day to day management of our loan portfolio but we are convinced that these changes would adversely affect our ability to serve the credit needs of our customers in our market. The FDIC and the other regulatory agencies need to revisit these proposals to fully understand the adverse impact that these proposals will have on community banks with less than $1 billion in assets.

Thank you,

Mike Ormsby, Senior Vice President
Collegiate Peaks Bank
105 Centennial Plaza
P. O. Box 3009
Buena Vista, CO 81211