July 8,
2009
Via
EDGAR
Mr.
William C-L Friar
Senior
Financial Analyst
Division
of Corporation Finance
U.S.
Securities and Exchange Commission
100 F
Street, NW
Washington,
D.C. 20549
Mail Stop
4720
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|
Re:
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First
Community Bancshares, Inc.
Form
10-K for the Fiscal Year Ended December 31, 2008
Form
10-Q for the Fiscal Quarter Ended March 31, 2009
File
No. 000-19297
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Dear Mr.
Friar:
This
letter is provided on behalf of First Community Bancshares, Inc. (“First
Community,” the “Company,” “we,” or “our”) in response to your letter of June
23, 2009, regarding the Company’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2008, and its Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 2009.
The
Company acknowledges that:
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·
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The
Company is responsible for the adequacy and accuracy of the disclosure in
the referenced filings;
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·
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Staff
comments or changes to disclosures in response to staff comments do not
foreclose the Commission from taking any action with respect to the
referenced filings; and
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·
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The
Company may not assert staff comments as a defense in any proceeding
initiated by the Commission or any person under the federal securities
laws of the United States.
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For your
convenience, we have included in this letter, in bold, the number and
description of each of the comments in your letter; our responses
follow.
Form 10-K for Fiscal Year
Ended December 31, 2008
Note 1. Summary of
Significant Accounting Policies
Long-term Investments, page
53
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1.
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We
note that the company is a member of the Federal Home Loan Bank of Atlanta
and at December 31, 2008 holds approximately $13.17 million in FHLB
stock. Please tell us and revise future filings to more clearly
discuss your accounting for these securities, including your impairment
policy. In addition, present a balanced discussion to state
why, if true, you believe that your investment in FHLB Atlanta stock is
not other-than-temporarily impaired. For example, please
discuss how you considered the FHLB’s recent financial condition; changes
made to their excess activity-based stock repurchase program and the fact
that no dividends were declared for the fourth quarter of 2008 or the
first quarter of 2009.
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As a
condition of membership, First Community owns shares of Federal Home Loan Bank
of Atlanta (“FHLBA”). The Company feels this ownership position
provides access to relatively inexpensive wholesale and overnight
funding. As per AICPA guidance, the Company accounts for FHLBA and
Federal Reserve Bank stock as a long-term investment in other
assets.
P.O. Box
989 □ One Community Place □ Bluefield, VA 24605 □ Telephone: 276-326-9000 □ Fax:
276-326-9010 □ www.fcbinc.com
Mr.
William C-L Friar
July 8,
2009
Page
2
The
Company’s policy is to review for impairment at each reporting period, similar
to our policy for other cost method investments under SOP 01-6 and FSP FAS
115-1. The Company believes that, as of December 31, 2008, and March
31, 2009, its FHLBA stock was not impaired.
At
December 31, 2008, and March 31, 2009, the FHLBA was in compliance with its
regulatory capital requirements, which we feel is an indicator of no
impairment.
Up
through and as of the filing date of the March 31, 2009, Quarterly Report on
Form 10-Q, FHLBA was repurchasing excess activity-based stock at par, which we
determined was an indicator of no impairment at December 31, 2008, and March 31,
2009.
Although
FHLBA recently reduced and then subsequently eliminated payment of its dividend,
which we feel is consistent with FHLBA’s recently formalized policy that uses
LIBOR as a target for its dividend. As LIBOR has declined to near
zero levels, the Company feels that the FHLBA dividend posture is congruent with
its announced target, and not a strong indicator of impairment as of December
31, 2008, or March 31, 2009.
We will
continue to utilize all the applicable evidence to determine if
other-than-temporary impairment exists on our FHLBA stock. This
evidence will be evaluated in the context that this is a long-term investment
and will be based upon the ultimate recoverability of the par
value.
Item 5. Market
for Registrant’s Common Equity Related Stockholder Matters and Issuer Purchases
of Equity Securities
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2.
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Please
identify the component companies of the Asset Size & Regional Peer
Group used in the performance graph in all future
reports. Refer to Instruction 5 to item 201(e) of Regulation
S-K.
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For the
Staff’s information, the component companies in the Asset Size & Regional
Peer Group used in the performance graph, which we will identify in all future
filings, are comprised of the following companies.
Ameris
Bancorp, Appalachian Bancshares, Inc., BancTrust Financial Group, Inc., Bank of
Florida Corporation, Bank of Granite Corporation, Bank of the Ozarks, Inc., BNC
Bancorp, Burke & Herbert Bank & Trust Company, Cadence Financial
Corporation, Capital Bank Corporation, Capital City Bank Group, Inc., Cardinal
Financial Corporation, Carter Bank & Trust, CenterState Banks of Florida,
Inc., City Holding Company, Colony Bankcorp, Inc., Commonwealth Bankshares,
Inc., Crescent Banking Company, Eastern Virginia Bankshares, Inc., Fidelity
Bancshares (N.C.), Inc., Fidelity Southern Corporation, First Bancorp, First
M&F Corporation, First National Bank of Shelby, First Security Group, Inc.,
FNB United Corp., Gateway Financial Holdings, Inc., Great Florida Bank, Green
Bankshares, Inc., Home BancShares, Inc., NewBridge Bancorp, Nexity Financial
Corporation, Omni Financial Services, Inc., PAB Bankshares, Inc., Palmetto
Bancshares, Inc., Pinnacle Financial Partners, Inc., Renasant Corporation, SCBT
Financial Corporation, Seacoast Banking Corporation of Florida, Security Bank
Corporation, Simmons First National Corporation, Southeastern Bank Financial
Corporation, Southern Bancshares (N.C.), Inc., Southern Community Financial
Corporation, StellarOne Corporation, Summit Financial Group, Inc., Tennessee
Commerce Bancorp, Inc., TIB Financial Corp., TowneBank, Union Bankshares
Corporation, Virginia Commerce Bancorp, Inc., Wilson Bank Holding Company, and
Yadkin Valley Financial Corporation.
Item
11. Executive Compensation
Compensation Discussion and
Analysis page 10 of Definitive Proxy Statement on Schedule
14A
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3.
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Please
tell the staff why you have not disclosed the performance targets utilized
in determining the CEO’s base salary for the 2008 fiscal
year. To the extent you believe that disclosure of the
historical performance targets is not required because it would result in
competitive harm such that the targets could be excluded under Instruction
4 to Item 402(b) of Regulation S-K, please provide a detailed supplemental
analysis supporting your conclusion. In particular, your
competitive harm analysis should clearly explain the nexus between
disclosure of the performance objectives and the competitive harm that is
likely to result from disclosure. Refer to Item 402(b)(2)(v) of
Regulation S-K and Regulation S-K Compliance & Disclosure
Interpretation 118.04.
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Mr.
William C-L Friar
July 8,
2009
Page
3
We
apologize that the manner in which we discussed base salaries in the 2008
Compensation Discussion and Analysis was ambiguous. The Compensation
and Retirement Committee does not use financial performance targets in
determining the CEO’s base salary. The CEO’s base salary is
determined each year based on a qualitative review of the executive’s overall
performance, which is based on a review of non-financial job performance
criteria.
We will
ensure we more appropriately communicate the process in future
filings.
Item 13. Certain
Relationships and Related Transactions and Director
Independence
Transactions with Directors
and Officers page 8 of Definitive Proxy Statement on Schedule
14A
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4.
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Please
confirm, and revise future filings to disclose, if accurate, that loans to
related persons were made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for
comparable loans with persons not
related to the lender. Refer to Instruction 4.c. to Item
404(a) of Regulation S-K.
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Loans
made to related persons were made in the ordinary course of business; were made
on substantially the same terms, including interest rates and collateral, as
those prevailing at the time for comparable loans with persons not related to
the lender; and, did not involve more than the normal risk of collectability or
present other unfavorable features.
We will
revise future filings accordingly.
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5.
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Please
provide to the staff supplementally the information required by Item
404(b) of Regulation S-K. Please also revise future filings to include
this information.
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The
Company has an unwritten policy regarding review of transactions with “related
persons”, including its directors, executive officers, 5% shareholders, and
their immediate family members. Completion of an annual
Directors and Officers Questionnaire (the “Questionnaire”), which is then
reviewed by our General Counsel, discloses transactions for potential disclosure
in the Company’s Proxy Statement. Transactions disclosed through
completion of the Questionnaire include any financial transaction, arrangement
or relationship (loan, deposit, investment, asset purchase or sale, and
contracts for services) in which the Company or its banking subsidiary are a
participant, the related person has or will have a direct or indirect material
interest, and the aggregate amount involved will or may be expected to exceed
$120,000 in any fiscal year. The Company also uses a “Conflicts of
Interest” form completed annually by all executive officers and
directors. Executive officers and directors are required to
supplement or provide additional information during the year as needed to
disclose any information regarding other transactions that arise subsequent to
completion of the Questionnaire.
The
Company also maintains a written Personnel Policy, which includes the Standards
of Conduct, that prohibits certain transactions between the Company and related
parties unless they are subjected to prior review and approval by the Board of
Directors. The Personnel Policy deals with purchase of assets from
the Company and any business transaction involving assets or services having a
fair market value of $20 thousand or more.
The
Company regularly reviews loans made to its executive officers and directors
through Reg O and other loan related polices. All loans made to
executive officers and directors are reported to the Board on a regular basis to
ensure that they are made on similar terms, rates and collateral as those made
at the time for comparable loans to persons not related to the
lender.
We will
revise future filings accordingly.
Signature
Page
Mr. William C-L Friar
July 8,
2009
Page
4
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6.
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The
Form 10-K must be signed by the controller or principal accounting
officer. Please advise the staff supplementally as to whether
this individual signed the Form 10-K, and revise future filings to
identify this individual. Refer to General Instruction D(2)(a)
of Form 10-K.
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The
Company’s Chief Financial Officer is also its Principal Accounting
Officer. We will revise future filings accordingly.
Exhibits
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7.
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We
note that certain employment agreements have not been filed with the Form
10-K, or incorporated by reference thereto. For example, it
appears that the amended and restated employment agreements with Robert L.
Buzzo and E. Stephen Lilly have not been filed or incorporated by
reference to the Form 10-K. We note that these agreements were
referenced in the Form 8-K filed December 16, 2008, but were not filed
therewith. Please file all employment
agreements. Refer to Item
601(b)(10)(ii)(A).
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We filed
an 8-K on July 6, 2009, with the remaining five employment agreements included
as exhibits.
Form 10-Q for Fiscal Quarter
Ended March 31, 2009
Consolidated Statements of
Changes in Stockholders’ Equity, page 6
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8.
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We
note that you recorded an adjustment to Retained Earnings to recognize the
cumulative effect of adopting FSP FAS 115-2 and
124-2. Paragraph 45 of the FSP indicates that corresponding
adjustment should be made to Accumulated Other Comprehensive
Income. It is not clear to us how this offsetting adjustment
was recognized in your Statement of Changes in Stockholders’
Equity. Please revise your Statement accordingly in future
filings.
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The
impact to accumulated other comprehensive income (“AOCI”) due to the cumulative
effect adjustment has been combined with other changes to AOCI arising during
the period and is part of the consolidated statement of changes in stockholder’s
equity line-item titled, “Unrealized loss on securities available for
sale.” The amount reclassified into AOCI as a result of the
cumulative effect adjustment was $6.13 million. We agree with the
comment and we will revise future filings to discretely present the impact of
the cumulative effect adjustment.
Note 3. Investment
Securities, pages 9-11
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9.
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We
refer to your investment securities tables on pages 9, 10 and 30.
Paragraph 39 of FSP 115-2 and 124-2 provides that the disclosures required
by the FSP be provided by major security type. Although
paragraph 39 provides a list of security types to be presented by
financial institutions, it states that additional security types may be
necessary and that a company should consider certain characteristics
(e.g., business sector, vintage, geographic concentration, credit quality,
economic characteristics) in determining whether it is necessary to
separate further a particular security type in greater
detail. Accordingly, please revise your future filings to
disclose your major security types in greater detail as
follows:
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•
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Separately
disclose residential mortgage-backed securities, commercial
mortgage-backed securities and collateralized debt obligations as these
major security types are specifically required for financial institutions
based on the guidance in paragraph 39 of FSP 115-2 and
124-2;
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•
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Consider
further segregating your mortgage-backed securities by vintage, credit
quality (e.g., prime, subprime) or other loan characteristics (e.g.,
Alt-A, interest-only) based on the nature and risks of the securities;
and
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|
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•
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Consider
further segregating your pooled trust preferred securities by
class/tranche held (e.g., senior,
mezzanine).
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Mr. William C-L Friar
July 8,
2009
Page
5
We agree
with the comment and in future filings we will segregate the mortgage-backed
securities line into Agency mortgage-backed securities, prime residential
mortgage-backed securities, and Alt-A residential mortgage-backed securities
line items. Further, we will segregate the trust preferred securities
line into single issue and pooled line items. Our pooled trust
preferred holdings are all mezzanine tranches, and we will make that disclosure
as well.
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10.
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We
note that you recognized a pre-tax OTTI charge of $15.46 million on one of
your pooled trust preferred securities as of December 31,
2008. We also note that you did not reclassify a portion of
this impairment to accumulated other comprehensive income upon the
adoption of FSP FAS 115-2 and 124-2. Please tell us and revise
your disclosure in future filings to clarify whether you intend to sell
this security or have determined that it is more likely than not that you
will be required to sell the security before recovery of its amortized
cost basis. If not, please clarify how you determined that 100%
of the OTTI was credit-related.
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First
Community does not intend to sell the pooled trust preferred security referenced
above for which we made no cumulative effect adjustment. We have
determined that it is more likely than not that we will not be required to sell
the security. We determined the entire amount of the impairment to be
credit-related based on a review of the cash flow projections we used in our
determination of whether or not there had been an adverse change in cash flow at
December 31, 2008. We also enhanced our assumptions to include a
continuing element of defaults in addition to those projected. The
results of that modeling indicated impairment in that security, and that the
impairment charge would be most appropriately considered
credit-related. As such, we determined no reclassification to
accumulated other comprehensive income was appropriate. Our updated
March 31, 2009, modeling of that security’s cash flows continued to support that
determination. We will address this matter along these lines in
future filings, as well.
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11.
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Please
revise future filings to provide the disclosure required by paragraph 42
of FSP FAS 115-2 and 124-2 with respect to the OTTI recognized as of
December 31, 2008 that you determined to be attributable to credit
losses. Although these impairments were recognized in prior
periods, we believe this disclosure will provide meaningful information as
it relates to how you determined the portion of the OTTI that was
credit-related.
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We will
include the disclosure required by paragraph 42 of FSP FAS 155-2 and 124-2 as it
applies to previous credit-related OTTI in future filings.
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12.
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We
note that your AFS securities are reported at fair value utilizing Level
1, Level 2 and Level 3 inputs. You disclose that U.S. Treasury
securities are valued using Level 1 inputs and that certain pooled trust
preferred securities are valued using Level 3 inputs. However,
it is unclear what level inputs are used to value your other investment
securities. Please tell us and revise your future filings to
more clearly indicate at what level in the fair value hierarchy valuation
inputs are used to determine the fair value for each of your major
security types.
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In
addition to U.S. Treasury securities, the Company also uses Level 1 inputs for
the valuation of equity securities traded in active markets. Level 2
inputs are used to value U.S. Agency securities, mortgage-backed securities,
municipal securities, single-issue trust preferred securities, and certain
equity securities that are not actively traded.
Mr. William C-L Friar
July 8,
2009
Page
6
The
following table describes, in more detail, the fair value measurements for our
available-for-sale securities portfolio.
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(In
Thousands)
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March
31, 2009
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|||||||||||||||
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Fair
Value Measurements Using
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Total
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|||||||||||||||
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Level
1
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Level
2
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Level
3
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Fair
Value
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|||||||||||||
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Available-for-sale
securities:
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||||||||||||||||
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Agency
securities
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$ | - | $ | 54,127 | $ | - | $ | 54,127 | ||||||||
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Agency
mortgage-backed securities
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- | 282,075 | - | 282,075 | ||||||||||||
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Prime
non-Agency residential MBS
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- | 5,786 | - | 5,786 | ||||||||||||
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Alt-A
non-Agency residential MBS
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- | 10,730 | 10,730 | |||||||||||||
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Municipal
securities
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- | 141,623 | - | 141,623 | ||||||||||||
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Single-issuer
trust preferred securities
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- | 26,768 | - | 26,768 | ||||||||||||
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Pooled
trust preferred securities
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- | - | 22,705 | 22,705 | ||||||||||||
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Equity
securities
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5,706 | 144 | - | 5,850 | ||||||||||||
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Total
available-for-sale securities
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5,706 | 521,253 | 22,705 | 549,664 | ||||||||||||
We will
include this additional detail in future filings.
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13.
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As
a related matter, please tell us and revise your future filings to more
clearly explain the types of valuation models used (e.g., discounted cash
flow models) in estimating the fair value of your AFS
securities.
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The Level
3 inputs used to value our pooled trust preferred security holdings are weighted
between discounted cash flow model results and actual trades of the same and
similar securities in the inactive trust preferred market. The cash
flow modeling uses known defaults and deferrals, projected future defaults and
deferrals, and projected prepayments to arrive at discounted present values of
the expected cash flows.
We will
revise future filings accordingly to reflect this information.
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14.
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With
respect to your non-agency mortgage-backed securities and trust preferred
securities (both single issuer and pooled) with significant unrealized
losses as of the end of the period, please identify the key differences
between the cash flow analysis (or other valuation model) used to
determine the fair value of the security and the cash flow analysis used
to support your OTTI assessment and provide objective evidence that
reconciles the significant difference in the results between these two
measures.
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Fair
value pricing on our non-agency mortgage-backed securities and our pooled trust
preferred securities is provided by a third-party service that uses proprietary
modeling techniques and places significant weight on recent trades of the same
or similar security, even if those trades have occurred in an inactive
market. As expected, these prices reflect significant risk and
liquidity premiums over and above the coupon rate of the
securities. Our cash flow modeling for these securities takes into
account known defaults and projects future defaults based on current credit
trends (delinquency trends, non-performing levels, and realized
losses). For purposes of evaluating impairment, we follow the
guidance in EITF 99-20 (as amended), and discount our projection of cash flows
using the coupon rate of the security (assuming that we have not previously
recognized an OTTI charge). Therefore, we have concluded that the
primary difference in the fair value of the securities and our cash flow model
is the significantly higher rate of return currently demanded by market
participants in this illiquid and inactive market as compared to the rate of
return that we received when we purchased the security in a normally functioning
market.
Management’s Analysis of
Financial Condition and Results of Operations
Financial Condition –
Securities, page 29
Mr. William C-L Friar
July 8,
2009
Page
7
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15.
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Please
provide us with the following information related to your single issuer
and pooled trust preferred securities and consider revising the table on
page 30 in your future filings to include this additional
information:
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•
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deal
name
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|
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•
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class/tranche
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|
|
•
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credit
rating for each class/tranche
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|
•
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number
of banks in issuance
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|
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•
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deferrals
and defaults – dollar amount and as a percentage of
collateral
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|
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•
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excess
subordination – dollar amount and as a percentage of
collateral
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The
following table presents in more detail the single-issue and pooled trust
preferred security holdings as of March 31, 2009.
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(In
Thousands)
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Credit
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Deferrals/Defaults
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Excess
Subordination
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|||||||||||||||||||||||||||||
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Current
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Rating
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Percent
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Percent
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|||||||||||||||||||||||||||||
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Class/
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Credit
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at
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Issuing
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of
|
of
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|||||||||||||||||||||||||||
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Deal
Name
|
Tranche
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Rating
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Purchase
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Banks
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Amount
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Deal
|
Amount
|
Deal
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||||||||||||||||||||||||
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Single-issuer
|
||||||||||||||||||||||||||||||||
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BankAmerica
Cap
|
n/a
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BB
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A
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1 |
None
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n/a
|
n/a
|
n/a
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||||||||||||||||||||||||
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BankBoston
Cap
|
n/a
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BB
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A
|
1 |
None
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n/a
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n/a
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n/a
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||||||||||||||||||||||||
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Chase
Captial II
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n/a
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AA
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A
|
1 |
None
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n/a
|
n/a
|
n/a
|
||||||||||||||||||||||||
|
CoreStates
Capital I
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n/a
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A
|
A
|
1 |
None
|
|
n/a
|
n/a
|
n/a
|
|||||||||||||||||||||||
|
First
Chicago NDB CA
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n/a
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AA
|
A
|
|
1 |
None
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n/a
|
n/a
|
n/a
|
|||||||||||||||||||||||
|
JPMorgan
Chase Cap X
|
n/a
|
AA
|
A
|
1 |
None
|
n/a
|
n/a
|
n/a
|
||||||||||||||||||||||||
|
NB-Global
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n/a
|
BB
|
|
A
|
1 |
None
|
n/a
|
n/a
|
n/a
|
|||||||||||||||||||||||
|
NTC
Capital I Float
|
n/a
|
A
|
A
|
1 |
None
|
|
n/a
|
n/a
|
n/a
|
|||||||||||||||||||||||
|
SunTrust
Banks
|
n/a
|
A
|
A
|
1 |
None
|
n/a
|
n/a
|
n/a
|
||||||||||||||||||||||||
|
Wachovia
Cap II
|
n/a
|
A
|
A
|
1 |
None
|
n/a
|
n/a
|
n/a
|
||||||||||||||||||||||||
|
Pooled
|
||||||||||||||||||||||||||||||||
|
PreTSL
X
|
B1
|
CC
|
A
|
58 | $ | 91,800 | 21.8 | % | $ | 40,500 | 10.0 | % | ||||||||||||||||||||
|
PreTSL
XII
|
B1
|
CC
|
A
|
79 | 70,000 | 10.0 | % | 113,000 | 16.0 | % | ||||||||||||||||||||||
|
PreTSL
XIV
|
B1
|
CC
|
A
|
64 | 43,000 | 9.9 | % | 75,000 | 17.0 | % | ||||||||||||||||||||||
|
PreTSL
XVI
|
C
|
CC
|
A
|
50 | 84,230 | 16.1 | % | 82,000 | 16.0 | % | ||||||||||||||||||||||
|
PreTSL
XXII
|
C1
|
CC
|
A
|
82 | 210,000 | 17.9 | % | 190,500 | 16.0 | % | ||||||||||||||||||||||
|
PreTSL
XXIII
|
C1
|
CCC
|
A
|
70 | 112,500 | 8.8 | % | 313,500 | 25.0 | % | ||||||||||||||||||||||
|
PreTSL
XXVI
|
C1
|
CC
|
A
|
64 | 124,000 | 14.8 | % | 151,500 | 18.0 | % | ||||||||||||||||||||||
|
SLOSO
2007 1A
|
A3L
|
CC
|
A
|
56 | 47,500 | 9.9 | % | 487 | 0.1 | % | ||||||||||||||||||||||
|
TRAPEZA
SER 13A
|
D
|
A
|
A
|
63 | 46,500 | 6.6 | % | 2,434 | 0.4 | % | ||||||||||||||||||||||
|
16.
|
Please
provide us with a detailed explanation of how you determined that an OTTI
existed on your A-rated pooled trust preferred securities but not on those
rated CCC. Please identify all available evidence, explain the
relative significance of each piece of evidence and identify the primary
evidence on which you relied in making your
assessments.
|
Credit
agency ratings are only one of the factors we consider when testing for the
existence of OTTI on pooled trust preferred securities. Credit rating
agencies have been steadily reviewing the universe of pooled trust preferred
deals, and the A-rated security remaining at March 31, 2009, was subsequently
downgraded. Additionally, due to perceived and actual deficiencies in
credit rating agency grades, we have reduced the amount of reliance and weight
placed on those grades
Mr. William C-L Friar
July 8,
2009
Page
8
At
December 31, 2008, the primary evidence we used in determining possible OTTI on
our pooled trust-preferred securities was review of projected cash flows using
current defaults and deferrals and reasonable assumptions regarding future
defaults and deferrals, prepayment speeds, and remaining excess collateral
within that specific deal, since these securities were subject to EITF 99-20 (as
amended). Adverse changes in cash flows would indicate possible OTTI
for a security. Our tests at December 31, 2008, indicated there was
an adverse change in cash flow for what was the remaining A-rated security and
an impairment charge was recorded. The cash flow tests on the
remainder of the portfolio did not indicate adverse changes in cash
flow.
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17.
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We
refer to the “Cumulative OTTI” column in the table on
page30. This column appears to represent the cumulative OTTI
that has been recognized in earnings. Paragraph 19 of SFAS 115
(as amended by paragraph A2(c) of FSP FAS 115-2 and 124-2) requires
disclosure of the total OTTI recognized in accumulated other comprehensive
income. Please revise your future filings to comply with this
requirement.
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In future
filings, we will add a column to the amortized cost and estimated fair value
tables in the investments footnote disclosing the amount of OTTI recognized in
accumulated other comprehensive income.
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18.
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As
a related matter, please revise future filings to provide the disclosure
required by paragraph 43 of FSP FAS 115-2 and 124-2 as it relates to the
amount of OTTI related to credit losses recognized
earnings.
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We will
ensure future filings appropriately disclose credit and non-credit-related
impairment. As it relates to the March 31, 2009, 10-Q filing, the
impairment charges of $209 thousand related to five equity securities and were
all non-credit related.
Thank you
for your consideration of our responses to your comments. We are
happy to provide any further information or assistance you may
require.
Sincerely,
/s/ David
D. Brown
David D.
Brown
Chief
Financial Officer