September 23, 1997
Board of Directors
Marathon Savings Bank
500 Scott Street
Wausau, Wisconsin 54402-1666
Members of the Board:
We have reviewed your request to indirectly continue holding through the bank's wholly owned
subsidiary, Markon, Ltd. (Markon), a 9.091 percent limited partnership interest that may not be a
permissible investment for a subsidiary of a national bank. The application, dated June 5, 1997, was filed
pursuant to Section 362.4(d)(4)(iii) of the Federal Deposit Insurance Corporation (FDIC) Rules and
Regulations.
For the reasons set forth in the attached Statement, your application was approved today, subject to the
following conditions:
That MSB and Markon shall take the necessary steps to operate Markon in a manner which ensures a
separate corporate existence as a majority-owned subsidiary that:
(a) is adequately capitalized,
(b) is separate and distinct in its operations from MSB's operations,
(c) maintains separate accounting and other corporate records,
(d) observes separate formalities such as separate board of directors' meetings,
(e) maintains a board of directors with management expertise capable of conducting activities in a
safe and sound manner,
(f) contracts with MSB for any service on terms and conditions comparable to those available to or
from independent entities, and
(g) conducts business pursuant to separate policies and procedures designed to inform MSB's
customers and prospective customers of Markon that Markon is a separate organization from
MSB, including the placement of specific language on any debt instrument or contract with a third
party disclosing that MSB itself is not responsible for payment or performance.
That MSB's indirect investment in the limited partnership interest through Markon shall be limited to
that which is currently held.
That consent is granted based on the facts and circumstances presented or otherwise known to the
FDIC in connection with this request. MSB shall notify the FDIC of any significant change in facts or
circumstances, and the FDIC shall have the right to alter, suspend, or withdraw its approval.
Questions relating to this matter may be referred to Assistant Regional Director Marion J. Thickson or
Case Manager William F. Sullivan in the Chicago Regional Office at (312) 382-7500.
Keith W. Seibold
Acting Associate Director
FEDERAL DEPOSIT INSURANCE CORPORATION
RE: Marathon Savings Bank
Wausau, Wisconsin
Application Pursuant to Section 24 of the
Federal Deposit Insurance Act to Indirectly Hold
An Investment That May Not Be Permissible for a National Bank
STATEMENT
Pursuant to the provisions of Section 24 of the Federal Deposit Insurance Act, an application has
been filed with the Federal Deposit Insurance Corporation by Marathon Savings Bank, Wausau,
Wisconsin (MSB). The bank requests FDIC consent to continue to indirectly through its wholly-owned
subsidiary, Markon, Ltd. (Markon), retain a 9.091 percent limited partnership interest in Exel Investors
Ltd., which owns four Exel Inn motels.
In general, investment in a limited partnership interest may not be a permissible activity for a
national bank or a subsidiary of a national bank. Subsidiaries of state-chartered, FDIC-insured banks may
not hold an investment prohibited to subsidiaries of nationally chartered banks unless the bank is in
compliance with applicable capital standards and the FDIC determines that the investment poses no
significant risk to the deposit insurance fund. Wisconsin banking statutes permit the holding of the
subject investment.
MSB does not hold limited partnership investments beyond that which is currently held and bank
management has indicated that MSB has no intention of acquiring other limited partnership investments.
MSB meets the definition of "Well Capitalized" in the FDIC's Rules and Regulations in 12 C.F.R.
Section 325.103. The investment in Markon represents 1.6 percent of MSB's Tier 1 Capital and
Markon's investment in Exel Investors, Ltd. Represents 0.47 percent of MSB's Tier 1 Capital. In
connection with this application, the FDIC has also taken into consideration the financial and managerial
resources and future earnings prospects of MSB.
As prudential limitations and restrictions addressing the risks posed by this type of investment will
be imposed, Markon's investment does not constitute a significant risk to the Bank Insurance Fund or
present material safety and soundness concerns.
Based upon careful evaluation of all available facts and information, the Acting Associate
Director, acting under delegated authority, has concluded that approval of the application is appropriate
subject to the restrictions discussed below.
That MSB and Markon shall take the necessary steps to operate Markon in a manner which ensures a
separate corporate existence as a majority-owned subsidiary that:
(a) is adequately capitalized,
(b) is separate and distinct in its operations from MSB's operations,
(c) maintains separate accounting and other corporate records,
(d) observes separate formalities such as separate board of directors' meetings,
(e) maintains a board of directors with management expertise capable of conducting activities in a
safe and sound manner,
(f) contracts with MSB for any service on terms and conditions comparable to those available to
or from independent entities, and
(g) conducts business pursuant to separate policies and procedures designed to inform MSB's
customers and prospective customers of Markon that Markon is a separate organization from
MSB, including the placement of specific language on any debt instrument or contract with a
third party disclosing that MSB itself is not responsible for payment or performance.
That MSB's indirect investment in the limited partnership interest through Markon shall be limited to
that which is currently held.
That consent is granted based on the facts and circumstances presented or otherwise known to the
FDIC in connection with this request. MSB shall notify the FDIC of any significant change in facts or circumstances, and the FDIC shall have the right to alter, suspend, or withdraw its approval.
Finally, FDIC notes that the foregoing approval is unique to this application, that it was
significantly influenced by MSB's acquisition of the subject investment prior to the effective date of
Section 24, and that its view of de novo acquisition of such interest might well be different.
ACTING ASSOCIATE DIRECTOR
DIVISION OF SUPERVISION
