Pollnow Sent: Tuesday, November 04, 2008 4:34 PM To: Comments Subject: FDIC RIN 3064-AD37
would like to submit two comments today pertaining to the TLGP.
1.The 75 bps premium to guarantee unsecured debt is excessive in
relationship to the current level of Fed Funds market rates available. Banks
will be forced to either increase rates we charge for loans which will
contribute to the “credit crunch” or, the additional borrowing costs will be
absorbed in the net interest margin of the bank eroding earnings and
2.The 125% cap of unsecured debt as of 9/30/08 is inadequate. The cap
essentially eliminates a banks’ ability to borrow up to their previously
negotiated overnight line limits. For example, we had roughly $3M borrowed
overnight on 9/30/08 which equates to a $3.75M cap. However our previously
negotiated unsecured line access is $11.8M. Our ability to draw the $8M
difference would virtually be eliminated since preference will be given to
guaranteed borrowers. Thus the liquidity issue arises again.
summary, as a de novo with extraordinary capital and asset quality, we find
the terms of the TLGP a hindrance to our future growth. If implemented as
proposed, it will restrict our ability to continue to provide quality
credit accommodations in our community.