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The Rochester Community Savings Bank

FEDERAL DEPOSIT INSURANCE CORPORATION

IN RE: The Rochester Community Savings Bank Rochester, Monroe County, New York

Application Pursuant to Section 24 of the Federal Deposit Insurance Act for Consent to Retain Through a Majority-Owned Subsidiary Bank Stock That May Not Be Permissible for a Subsidiary of a National Bank

ORDER

The Board of Directors has fully considered all available facts and information relevant to Section 24 of the Federal Deposit Insurance Act, 12 U.S.C. Section 1831a, and Part 362 of the Federal Deposit Insurance Corporation Rules and Regulations, 12 C.F.R. Sections 362.3 and 362.4, relating to an application by The Rochester Community Savings Bank, Rochester, Monroe County, New York ("RCSB"), for consent to retain through a wholly-owned subsidiary an equity investment consisting of unlisted, nonvoting, noncumulative fixed-rate preferred shares of an insured bank in an amount exceeding 10% of the issuing bank's common and preferred stock. RCSB seeks only to retain its present investment, which will not be increased. This is an investment activity that may not be permissible for a subsidiary of a national bank. The Board has concluded the application should be approved subject to certain conditions.

Accordingly, it is hereby ORDERED, for the reasons set forth in the attached Statement, that the application submitted by RCSB is approved subject to the following conditions:

1. That the investment in the stock will be transferred immediately to a majority owned subsidiary organized for the purpose of holding such stock and held through such subsidiary thereafter;

2. That the consent granted herein is based on the facts and circumstances presented or otherwise known to the FDIC in connection with this request. RCSB shall notify the FDIC of any significant change in facts or circumstances. If the facts and circumstances change significantly, the FDIC shall have the right to alter, suspend, or withdraw its approval.

Dated at Washington, D.C., this day of February, 1997.

BY ORDER OF THE BOARD OF DIRECTORS
Jerry L. Langley
Executive Secretary


FEDERAL DEPOSIT INSURANCE CORPORATION

IN RE: The Rochester Community Savings Bank Rochester, Monroe County, New York

Application Pursuant to Section 24 of the Federal Deposit Insurance Act for Consent to Retain Through a Majority-Owned Subsidiary Bank Stock 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 Act, The Rochester Community Savings Bank, Rochester, Monroe County, New York ("RCSB"), has filed an application with the Federal Deposit Insurance Corporation ("FDIC"). The applicant requests the FDIC's consent to retain its present holding of the fixed-rate nonvoting preferred stock of an insured bank indirectly through its wholly-owned subsidiary. The investment represents more than 10% of the outstanding stock of the issuing bank.

The activity of holding an investment in an insured bank stock may not be a permissible activity for a national bank or a subsidiary of a national bank. RCSB may continue to retain the shares, provided the FDIC determines such investment does not pose a significant risk to the appropriate deposit insurance fund. Consent may not be granted unless the bank is also in compliance with applicable capital standards.

The stock purchase was made under and conforms to Section 235.31 of the New York State Banking Law, which permits state savings banks to make any investment not otherwise permitted under the banking law (excepting the common stock of any commercial bank or life insurance company) subject to a 1% of assets per-investment limit and a 5% of assets aggregate limit.

As of September 30, 1996, RCSB had total assets of $4.006 billion. Its overall financial condition and management are regarded as satisfactory.

The holding of any equity stock entails risks related to the loss of investment, price volatility, and market liquidity. In the case of bank stock, there are several intrinsic factors that lessen the risk associated with the holding of the stock. Banks are subject to a comprehensive and stringent regulatory structure. As such, they are required to obtain government approval to operate; to maintain regulatory minimum capitalization; are also subject to periodic supervisory examination; and are subject to enforcement jurisdiction. RCSB's management, as bankers, are well-suited to assessing the issuer's condition. In addition, the subject investment represents only 0.32% of RCSB's Tier 1 capital, and the relatively small investment mitigates the normal risks associated with a holding of stock. For these reasons, the Board has concluded that retention of the preferred shares does not pose a significant risk to the Bank Insurance Fund, and therefore approval of the application, subject to the conditions in the Order, is warranted.

THE BOARD OF DIRECTORS
FEDERAL DEPOSIT INSURANCE CORPORATION



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