People's First Community Bank

[Santiago]

I'm just curious how many of Royal Americans own projects account for the issues leading up to lending restrictions. ;-)

My guess would be zero if you're talking about lending restrictions in Peoples First. It's not easy to lend yourself money. In fact, every transaction that Chapman has done with any bank is scrutinized as if it were his own bank due to Regulation O. Every time a bank is audited, one of the first things looked at are Reg O loans. The Fed's try to make sure that bank A doesn't lend to Bank B and Bank B to Bank A to circumvent the rules about one lending to themselves. This was rampant in the 80's during the S&L debacle. I think everyone just got caught in the real estate mess this time. The last major development project that RA did to my knowledge was Boardwalk in PCB and they made a killing.

 

[AAbsolute]

My guess would be zero if you're talking about lending restrictions in Peoples First. It's not easy to lend yourself money. In fact, every transaction that Chapman has done with any bank is scrutinized as if it were his own bank due to Regulation O. Every time a bank is audited, one of the first things looked at are Reg O loans. The Fed's try to make sure that bank A doesn't lend to Bank B and Bank B to Bank A to circumvent the rules about one lending to themselves. This was rampant in the 80's during the S&L debacle. I think everyone just got caught in the real estate mess this time. The last major development project that RA did to my knowledge was Boardwalk in PCB and they made a killing.

For their size, both GAC and RA run a tight ship and, even in the boom days neither would pay us a high rate as compared to the SoWal builders.

I figured you worked for a local bank and siting Reg O confirmed it for me. You probably know that Local President to Local President lending occured quite a bit during the previous boom. (As far as Bank A and Bank B) I used to see much more in the commercial lines where Local President A would lend Local President B's straw man a loan. Then there would be some understood resiprocity From Local President B back to local President A's straw man.

Did you ever see or hear of anything like that happening?

 

[Santiago]

For their size, both GAC and RA run a tight ship and, even in the boom days neither would pay us a high rate as compared to the SoWal builders.

I figured you worked for a local bank and siting Reg O confirmed it for me. You probably know that Local President to Local President lending occured quite a bit during the previous boom. (As far as Bank A and Bank B) I used to see much more in the commercial lines where Local President A would lend Local President B's straw man a loan. Then there would be some understood resiprocity From Local President B back to local President A's straw man.

Did you ever see or hear of anything like that happening?

As I stated in the previous post, its the first thing looked at in an audit. All of the bankers borrow from each other but they're not hiding it from anyone.