[bjones]

My question is in regards to Board members voting to approve loans. We currently have a maximum dollar authority for our Chief Credit Officer and Chief Executive Officer. Anything above their limits goes to the Board for approval. It comes to the board as a recommendation from the CCO and CEO. The concern has been raised at recent banking conferences that board members do not have the experience to make loan decisions, and open themselves to liability by approving loans. Our position has been that we operate as a community bank and want our board members involved. I would be curious to know from the group if they have Board members vote to approve loans, and if they have considered the liability concern. We would also be curious to know if it matters that a Director is a significant shareholder or not to whether or not they vote on loan approvals.

[jcopeland]

We have a bit of a different situation here. We have a local board at each of the community banks that we have and each one is operated as a local community bank. The main or true board is at the holding company. With that said, the Local Board is involved with the loan approval process on large lending transactions. They are aware of the liability they may have. The Board is made up of business professionals who are aware of what it requires to borrow as a small business. They also receive the training they need to make the decisions required. If the transaction is very large it would go to the official board at the holding company.
As far as stake holders in a business that is acquiring a loan that requires board approval; that person would be asked to abstain and leave the room while the loan is being review, discussed and voted on.

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