Decisions on Bank Applications

The Peoples State Bank of Newton, Illinois

FEDERAL DEPOSIT INSURANCE CORPORATION

Re: The Peoples State Bank of Newton, Illinois
Newton, Illinois
Application for Consent to Merge

ORDER AND BASIS FOR CORPORATION APPROVAL

Pursuant to Section 18(c) and other provisions of the Federal Deposit Insurance ("FDI") Act, The Peoples State Bank of Newton, Illinois, Newton, Jasper County, Illinois, an insured state nonmember bank with total resources of $123,523,000 and total deposits of $102,659,000 as of December 31, 2000, has filed an application for the Corporation's consent to merge with the First National Bank in Newton, Newton, Jasper County, Illinois, an insured national bank with total resources of $38,566,000 and total deposits of $30,935,000 as of December 31, 2000. The only office of the target will be closed upon consummation of the transaction and will no longer accept deposits. Notice of the proposed transaction, in a form approved by the Corporation, has been published pursuant to the FDI Act.

A review of available information discloses no inconsistencies with the purposes of the Community Reinvestment Act. The resultant bank is expected to continue to meet the credit needs of its entire community, consistent with the safe and sound operation of the institution.

In connection with the application, the Corporation has taken into consideration the competitive effects of the proposed transaction in the relevant geographic market, which consists of Jasper County, Richland County (primarily the city of Olney which comprises approximately 99% of the county's deposit market share), and the city of Dieterich, Illinois. The merger would result in a 233 point increase in the Herfindahl Hirschman Index for a post-merger level in the relevant geographic market of 1,875, based on deposit figures as of June 30, 2000. However, post-merger deposit market share will only increase from approximately 19 percent to 25 percent. The Corporation considers the competitive effects; the financial and managerial resources and future prospects of the proponent banks and the resultant bank; and the convenience and needs of the community to be served. Having found favorably on all statutory factors and having considered other relevant information, including any reports on the competitive factors furnished by the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Director of the Office of Thrift Supervision and the Attorney General of the United States, it is the Corporation's judgment that the application should be and hereby is approved.

The transaction shall not be consummated before the fifteenth calendar day following the date of this Order or later than six months after the date of this Order, unless such period is extended for good cause by the Corporation. Until the proposed transaction becomes effective, the Corporation shall have the right to alter, suspend or withdraw its approval should any interim development be deemed to warrant such action.

By Order of the Associate Director of the Division of Supervision, acting pursuant to delegated authority for the Board of Directors of the Corporation.

Dated at Washington, D.C., this 15th day of June, 2001.

____________________________
John M. Lane
Associate Director
Division of Supervision