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Cross Keys Bank

November 6, 1997

Board of Directors
Cross Keys Bank
Main Street
St. Joseph. Louisiana 71366

Members of the Board:

We have reviewed your request to indirectly continue activities through the bank's wholly-owned subsidiary. CKB Investments. Inc. (the "Subsidiary"). that may not be permissible for a subsidiary of a national bank. The application. dated June 26, 1997, was filed pursuant to Section 362.4(d)(4)(iii) of the Federal Deposit Insurance Corporation ("FDIC") Rules and Regulations and was deemed complete by the FDIC's Memphis Regional Office on August 18, 1996.

For the reasons set forth in the attached Statement. your application to continue to hold, indirectly through the Subsidiary, the common stock of Estes Oil Company and Panola Company Ltd. presently held by the Bank was approved today, subject to the following conditions:

1. That the common stock of Estes Oil Company and Panola Company Ltd. presently held directly by the Bank be transferred to the Subsidiary; and

2. That the consent granted herein is based on the facts and circumstances presented or known to the FDIC in connection with this request. and that the Bank notify the FDIC of any significant change in facts or circumstances. The FDIC's action is conditioned upon its ability to alter, suspend, or withdraw its approval in the event the facts and circumstances presented in the application change significantly.

Questions relating to this matter may be referred to Case Manager Keven L. Lamb in the FDIC's Memphis Regional Office at (901) 685-1603.

Sincerely,

Keith W. Seibold
Acting Associate Director


FEDERAL DEPOSIT INSURANCE CORPORATION

IN RE: Cross Keys Bank St. Joseph, Tensas Parish, Louisiana

Application Pursuant to Section 24 of the Federal Deposit Insurance Act for Consent to Indirectly Continue to Engage as Principal Through a Majority Owned Subsidiary in an Investment Activity That May Not Be Permissible for a Subsidiary of a National Bank

STATEMENT

Pursuant to the provisions of section 24 of the Federal Deposit Insurance ("FDI") Act, Cross Keys Bank, St. Joseph, Louisiana (the "Bank") has filed an application with the Federal Deposit Insurance Corporation ("FDIC"). The Bank requests the FDIC's consent to continue to indirectly hold equity securities through CKB Investments, Inc. (the "Subsidiary"), a wholly- owned subsidiary.

In general, the activity of holding equity securities may not be a permissible activity for a National bank or a subsidiary of a National bank. State chartered FDIC-insured banks may not engage as principal in an activity prohibited to nationally chartered banks unless they obtain consent from the FDIC. Consent may not be granted unless the bank is in compliance with applicable capital standards and the FDIC determines that the activity poses no significant risk to the deposit insurance fund. Louisiana State law permits the holding of equity securities by bank subsidiaries.

The equities, currently held directly by the Bank, were acquired over 50 years ago for debts previously contracted. The equity investments consists of common stock in two companies not listed on a national exchange. The Bank's ownership interest represents a small proportion of the companies' outstanding shares and are carried on the Bank's general ledger at a nominal value. The Bank proposes to transfer the stock to a newly formed subsidiary and hold the investment indefinitely. No other investment activities are contemplated.

The Bank meets the definition of "well capitalized" within the meaning of Part 325 of the FDIC's Rules and Regulations. The Bank's proposed investment in the Subsidiary represents less than one-tenth of one percent of the Bank's Tier 1 capital as of June 30, 1997, and the Bank would continue to be "well capitalized" in the event its existing and proposed investment in and loans to the Subsidiary were deducted from capital. In connection with this application, the FDIC has also taken into consideration the favorable financial and managerial resources and future earnings prospects of the Bank.

The holding of any equity stock entails risks related to the loss of investment, price volatility, and lack of market liquidity, as well as other risk. The FDIC has concluded, in this specific case, that these risks are substantially mitigated by the Bank's minor equity interest in the two companies, that the Bank has for over 50 years held the subject securities without incident, and that there are no additional equity investment transactions proposed.

Based upon careful evaluation of all available facts and information, the Acting Associate Director, acting under delegated authority, has concluded that the Subsidiary's investment activities will not constitute a significant risk to the Bank Insurance Fund or present material safety and soundness concerns and that approval of the application is appropriate subject to the conditions discussed below. The following conditions are imposed for prudential reasons due to the risks inherent in the subject investment activity:

That the common stock presently held directly by the Bank be transferred to the Subsidiary; and

That the consent granted herein is based on the facts and circumstances presented or known to the FDIC in connection with this request, and that the Bank notify the FDIC of any significant change in facts or circumstances. The FDIC's action is conditioned upon its ability to alter, suspend, or withdraw its approval in the event the facts and circumstances presented in the application change significantly.

Finally, FDIC notes that the foregoing approval is unique to this application, that it was significantly influenced by the Bank's acquisition of the subject equity investments prior to the effective date of Section 24, and that its view of de novo acquisition of such investments might well be different.

ACTING ASSOCIATE DIRECTOR
DIVISION OF SUPERVISION



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