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Beal Savings Bank (Proposed)

FEDERAL DEPOSIT INSURANCE CORPORATION

In Re: Beal Savings Bank (Proposed)
Las Vegas, Clark County, Nevada
Application for Federal Deposit Insurance (Bank Insurance Fund)

ORDER

The undersigned, acting on behalf of the Board of Directors of the Federal Deposit Insurance Corporation pursuant to delegated authority, has fully considered all relevant facts and information relating to the factors of Section 6 of the Federal Deposit Insurance Act regarding the application for Federal deposit insurance for Beal Savings Bank (BSB or Bank), a proposed new institution to be located at 3753/3763 Howard Hughes Parkway, Suite 100, Las Vegas, Clark County, Nevada, and has concluded that the application should be approved.

As part of its application, BSB requested approval to purchase certain assets from the affiliated Beal Bank, S.S.B., Plano, Texas. The purchase of certain assets by BSB is hereby approved.

Accordingly, it is hereby ORDERED, for the reasons set forth in the attached Statement, that the application submitted by BSB for Federal deposit insurance be, and the same is hereby approved, subject to the following conditions:

1. Beginning paid-in capital funds shall not be less than $1,000,000,000, and said capital shall take the form of cash, investment-grade securities, and loans.

2. That the Tier 1 capital to assets ratio as defined in Part 325 of the FDIC's Rules and Regulations be maintained at not less than eight percent during the first three years of operation and that an adequate allowance for loan and leases losses will be provided.

3. BSB shall operate within the parameters of the Business Plan submitted as part of the application for Federal deposit insurance and as updated. On an annual basis, BSB will submit updates to the Business Plan to the Regional Director for acceptance/approval. The Business Plan shall be based on prudent operating policies, shall include current and pro forma financial statements and other relevant exhibits, shall prescribe adequate capital maintenance standards relative to BSB's risk profile, and shall incorporate reasonable risk limits with respect to adversely classified assets (including non-investment grade bonds), industry and individual issuer concentrations, and other relevant risk factors. BSB shall notify the Regional Director of any proposed major deviation or material change from the business plan 30 days before consummating the change. In addition, BSB shall notify the Regional Director within 15 days if any risk limits specified within the Business Plan are exceeded.

4. Any changes in proposed management or the proposed ownership of ten percent (10%) or more of stock, including new acquisitions of or subscriptions to ten percent (10%) or more of stock, shall be approved by the FDIC prior to opening.

5. Prior to the effective date of Federal deposit insurance, BSB shall obtain surety bond coverage in a sufficient amount to conform to generally accepted banking practices and an excess employee dishonesty bond in the amount of at least $1,000,000 if the primary coverage is less than $1,000,000.

6. Prior to the effective date of Federal deposit insurance, BSB shall obtain surety bond coverage in a sufficient amount to conform to generally accepted banking practices and an excess employee dishonesty bond in the amount of at least $1,000,000 if the primary coverage is less than $1,000,000.

7. BSB shall obtain an audit of its financial statements by an independent public accountant annually for at least the first three years after deposit insurance is effective and shall furnish a copy of any reports by the independent auditor (including any management letters) to the Regional Director within 15 days after their receipt. BSB shall also notify the Regional Director within 15 days when a change in the independent auditor occurs.

8. Where applicable, full disclosure has been made to all proposed directors and stockholders of the facts concerning the interest of any insider in any transaction being effected or then contemplated, including the identity of the parties to the transaction and the terms and costs involved. An insider is one who is or is proposed to be a director, officer, or incorporator of BSB; a shareholder who directly or indirectly controls 10 or more percent of any class of BSB's outstanding voting stock; or the associates or interests of any such person.

9. Federal deposit insurance shall not become effective unless and until BSB has been granted a charter and authority to conduct a depository institution business, and that its establishment and operation has been fully approved by the appropriate State Authority.

10. An accrual accounting system shall be adopted for maintaining the Bank's financial records.

11. 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.

12. If Federal deposit insurance has not become effective within 12 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 ______ day of ___________________, 2004.

FEDERAL DEPOSIT INSURANCE CORPORATION

By: _______________________________________
Lisa K. Roy
Associate Director
Division of Supervision and Consumer Protection


FEDERAL DEPOSIT INSURANCE CORPORATION

In Re: Beal Savings Bank
Las Vegas, Clark County, Nevada
Application for Federal Deposit Insurance (Bank 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 Bank Insurance Fund has been filed on behalf of Beal Savings Bank (Bank), a proposed new institution that will be located at 3753/3763 Howard Hughes Parkway, Suite 100, Las Vegas, Clark County, Nevada.

The Bank will be a wholly-owned subsidiary of Beal Banc Holding Company, (BBHC) Dover, Delaware. BBHC is a wholly-owned subsidiary of Beal Financial Corporation (BFC), Plano, Texas. BFC also owns Beal Bank, S.S.B., Plano, Texas.

The proposed institution is structured as a wholesale bank with primary emphasis on commercial loan and investment activities. The Bank will not offer checking accounts or , accept demand deposits, or offer other retail banking services. The proposed Bank's primary trade area includes the greater Las Vegas metropolitan area encompassing all of Clark County, Nevada. By letter dated June 2, 2004, the Federal Deposit Insurance Corporation (FDIC) approved the request that Beal Savings Bank be designated a wholesale institution for purposes of evaluation under Section 345.25 of the Community Reinvestment Act regulations.

For purposes of the proposal, the investment in fixed assets is reasonable and capital is adequate. Future earnings prospects are attainable, and management is considered satisfactory. No formal objections to this application have been filed with the FDIC. Corporate powers to be exercised are consistent with the purpose of the Federal Deposit Insurance Act, and no undue risk to the Bank Insurance Fund is apparent.

Accordingly, based upon a careful evaluation of all available facts and information and in consideration of the factors of Section 6 of the Federal Deposit Insurance Act, the Associate Director, pursuant to delegated authority, has concluded that approval of the application is warranted, subject to certain prudential conditions.

ASSOCIATE DIRECTOR
DIVISION OF SUPERVISION AND CONSUMER PROTECTION
FEDERAL DEPOSIT INSURANCE CORPORATION



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