Public Comment CRE Lending K Bank, Owings Mills, MD

February 21, 2006 Robert E. Feldman Jennifer J. Johnson, Secretary Executive Secretary Board of Governors of the Federal Reserve System Attention: Comments 0d1 Street and Constitution Avenue, NW 2 Federal Deposit Insurance Corporation Washington, DC 20551 550 17's Street, NW Washington, DC 20429 Re: Proposed Guidance - Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices - 71 FR 2302 (January 1 3, 2006) Dear Sir or Madam: I appreciate the opportunity to comment on the Proposed Guidance on Concentrations in Commercial Real Estate Lending. Commercial Real Estate Lending, particularly residential acquisition, development and construction lending is a critical component of our business. The American Banker reported this week that the FDIC estimates that commercial real estate loans equal an average of 2580/ of capital for the 8,235 insured institutions with assets less than $1 billion so this is a bread and butter issue for many of us. Issuance'of this guidance isvery inter-related with two other current regulatory initiatives -. the proposed Guidance on Risk Based Capital and upcoming changes to the Call Report, which would break out 1-4 family construction loans from other construction and all land development loans, effective March 3 1, 2007. I will come back to the Risk Based Capital issue later, but with real estate concentration being such a pressing issue, the Call Report changes should be implemented now, at least ...