FEDERAL DEPOSIT INSURANCE CORPORATION
IN RE: Principal Bank (Proposed)
Des Moines, Iowa
Application for Federal Deposit Insurance
(Savings Association Insurance Fund)
ORDER
The Board of Directors of the Federal Deposit Insurance Corporation ("Corporation") has
fully considered all available facts and information relevant to the factors of section 6 of the
Federal Deposit Insurance Act and relating to the application for federal deposit insurance, with
membership in the Savings Association Insurance Fund, filed on behalf of Principal Bank, a
proposed new federal savings association to be located at 699 Walnut Street, Des Moines, Polk
County, Iowa, and has concluded that the application should be approved.
Accordingly, IT IS hereby ORDERED, for the reasons set forth in the attached Statement,
that the application submitted on behalf of Principal Bank for federal deposit insurance be and
the same hereby is approved subject to the following conditions:
1. That beginning paid-in capital funds of not less than $4,250,000 be provided;
2. That any changes in proposed management or proposed ownership (10 percent
or more of stock), including new acquisitions of or subscriptions to 10 percent or more
of the stock, will render this approval null and void unless such proposed change is
approved by the Corporation prior to opening of the association;
3. That during the first three years the bank maintain no less than an 8 percent
Tier 1 capital ratio;
4. That federal deposit insurance shall not become effective unless and until the
applicant has been established as a federal savings association, that it has authority to
conduct a federal savings association business, and that its establishment and operation as
a federal savings association have been fully approved by the Office of Thrift
Supervision;
5. That until the association commences business, the Corporation shall have the right
to alter, suspend, or withdraw said approval should any interim development be
deemed to warrant such action; and
6. That if federal deposit insurance has not become effective within twelve months from the
date of this Order, or unless, in the meantime, a request for an extension of time has
been approved by the Corporation, the consent granted shall expire at the end of said
twelve-month period.
Dated at Washington, D.C., this 16th day of December, 1997.
BY ORDER OF THE BOARD OF DIRECTORS
Robert E. Feldman
Executive Secretary
FEDERAL DEPOSIT INSURANCE CORPORATION
IN RE: Principal Bank (Proposed)
Des Moines, Iowa
Application for Federal Deposit Insurance
(Savings Association Insurance Fund)
STATEMENT
Pursuant to the provisions of section 5 of the Federal Deposit Insurance Act (12 U.S.C.
1815), an application for federal deposit insurance, with membership in the Savings Association
Insurance Fund, has been filed on behalf of Principal Bank, a proposed new federal savings
association to be located at 699 Walnut Street, Des Moines, Polk County, Iowa.
Principal Bank will provide traditional deposit products, but will limit lending activity,
focusing on residential mortgages and consumer retail lending. The association will not
originate mortgage loans, but instead will be purchasing loans from affiliates and other third
party mortgage companies. Principal Bank will be nontraditional in handling customer
transactions in that no teller or lobby services will be provided. Deposit and loan transactions
will be conducted using direct deposit, ATMs, telephone, mail, or internet banking capabilities.
Initial capitalization is adequate, and projected deposit growth, if realized, will result in operating
profits within a reasonable period of time. The factors relating to general character and fitness of
management and risk to the deposit insurance fund have been resolved as favorable. A review of
the applicant's statements and other available information revealed no inconsistencies with the
purpose of the Community Reinvestment Act.
Accordingly, based on a careful evaluation of all available relevant facts and information,
the Board of Directors ("Board") has concluded that approval of the application is warranted. In
granting such approval the Board has taken into consideration the developing market in
electronic banking, the proponent's unique business plan and overall strategy, and potential
security risks. Furthermore, the Office of Thrift Supervision's November 14, 1997, approval
was subject to numerous conditions which address the uniqueness of the association and
associated risks.
THE BOARD OF DIRECTORS
FEDERAL DEPOSIT INSURANCE CORPORATION
