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State Farm Financial Services, Federal Savings Bank (Proposed)

IN RE: State Farm Financial Services, Federal Savings Bank (Proposed) Bloomington, McLean County, Illinois

Application for Federal Deposit Insurance (Savings Association Insurance Fund)

ORDER

The undersigned, acting under delegated authority, has fully considered all facts and information relevant to the factors of Section 6 of the Federal Deposit Insurance Act relating to the application for federal deposit insurance for State Farm Financial Services, Federal Savings Bank (the bank), a proposed new full-service federal savings bank to be located at One State Farm Plaza, Bloomington, McLean County, Illinois, 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 by the 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 $104,000,000 be provided, and that a ratio of Tier I Leverage Capital ratio of not less than eight percent shall be maintained throughout the first three years of operation;

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 stock, will render this commitment null and void unless such proposal is approved by the Regional Director of the FDIC's Chicago Regional Office (Regional Director) prior to opening of the bank;

3. That federal deposit insurance shall not become effective unless and until the applicant has been established as a federal savings bank, that it has authority to conduct a banking business, and that its establishment and operation as a bank have been fully approved by the Office of Thrift Supervision;

4. That State Farm Mutual Automobile Insurance Company, Bloomington, Illinois, an insurance and financial services holding company, obtain approval from. the Office of Thrift Supervision to acquire voting stock control of the bank prior to its opening;

5. That until the conditional commitment herein granted becomes effective, the FDIC shall have the right to alter, suspend or withdraw said commitment should any interim development be deemed to warrant such action; and

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 FDIC, the consent granted herein shall expire at the end of the said twelve-month period.

Dated at Washington, D.C. this 17th day of November, 1998.

FEDERAL DEPOSIT INSURANCE CORPORATION

Mark S. Schmidt
Associate Director
Division of Supervision


FEDERAL DEPOSIT INSURANCE CORPORATION

IN RE: State Farm Financial Services, Federal Savings Bank Bloomington, McLean County, Illinois

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 State Farm Financial Services, Federal Savings Bank (the bank), a proposed new federal savings bank to be located at One State Farm Plaza, Bloomington, Illinois.

The bank's sole shareholder will be State Farm Mutual Automobile Insurance Company (State Farm). State Farm is headquartered in Bloomington, Illinois, and has twenty-seven regional offices located throughout the United States. State Farm is a multiple line insurance provider, but is dominant in personal lines of insurance. State Farm is the largest insurer of automobiles and homes in the United States, having approximately 68,000 employees and 16,600 agents.

The bank will, by virtue of having a federal savings bank charter, be able to exercise full banking services in all 50 states and the District of Columbia. The bank's business plan is to provide traditional deposit and loan products; however, it will be nontraditional in handling customer transactions. No teller or lobby services will be provided. Transactions will be conducted via direct deposit, automated teller machines, Internet banking, telephone, or U.S. mail. The bank will also offer credit and debit cards. State Farm's insurance agent network will be exploited to advertise the availability of these banking services and to assist potential customers in establishing relationships with the bank.

For the purposes of this proposal, the investment in fixed assets is reasonable, capital is adequate, future earnings prospects are favorable, and management is considered satisfactory. Corporate powers to be exercised are consistent with the purpose of the Federal Deposit Insurance Act. No undue risk to the Savings Association Insurance Fund is apparent.

The Greenlining Institute filed a protest of the proposal relative to State Farm's performance in low and moderate-income areas. The Corporation has considered the comments submitted and has concluded that the issues raised have been favorably resolved between the applicant, the primary regulator, and the Protestant.

Accordingly, based upon a careful evaluation of all available facts and information, the Associate Director, pursuant to delegated authority, has concluded that approval of the application is warranted.

ASSOCIATE DIRECTOR
DIVISION OF SUPERVISION
FEDERAL DEPOSIT INSURANCE CORPORATION



Last Updated 03/24/2011 Legal@fdic.gov