August 3, 1998
Board of Directors
Cerro Gordo Building and Loan, s.b.
229 East South Street
Cerro Gordo, Illinois 61818
Dear Members of the Board:
The notice of proposed mutual-to-stock conversion and subsequent amendments thereto.
filed on behalf of Cerro Gordo Building and Loan, s.b., Cerro Gordo, Illinois (Cerro
Gordo)have been reviewed by the Federal Deposit Insurance Corporation (FDIC) pursuant to
its regulations in 12 C.F.R. Section 303.15.
As described in the notice and amendments Cerro Gordo proposes to convert from an Illinois
chartered mutual savings bank to an Illinois chartered stock savings bank.
The FDIC has relied on information provided in Cerro Gordo's notice of conversion and
the accompanying business plan in reaching its decision. It is anticipated that
notification of any planned material deviations from the business plan. such as return of
capital, will be provided to the FDIC in advance of the event. Based on the information
presented in the notice of conversion, and amendments thereto, including a commitment by
Cerro Gordo to file consolidated tax returns with CGB&L Financial Group, Inc., the
FDIC plans to issue a letter of nonobjection to the proposed conversion transaction,
provided that Cerro Gordo satisfies the following conditions:
1. Cerro Gordo must provide written evidence that its Plan of Conversion has been
approved by the affirmative vote of a majority of the total number of votes by eligible
voting members at a special meeting to be called for that purpose.
2. Cerro Gordo must advise this office of the results of the subscription offering and
deliver an updated appraisal that:
a) takes the results of the subscription offering into account;
b) discusses any
material occurrences during the subscription period; and,
c) explains any order that may
have been rejected.
3. Cerro Gordo must receive final approval from the appropriate State of Illinois
officials (State Authority) for its establishment as a stock savings bank and final
approval must be received from the Federal Reserve Board and the State Authority for the
holding company to acquire the bank.
Provided Cerro Gordo meets the conditions outlined above and that the FDIC is satisfied
with the appraiser's determination in the updated appraisal that the results of the
subscription offering represent fair value for the bank, and provided further that there
has been no significant alteration to the terms of the conversion transaction (by action
of other regulators or otherwise) subsequent to the date of this letter, the FDIC will
issue a letter of nonobjection to the proposed conversion transaction.
Sincerely,
Mark S. Schmidt
Associate Director
cc: Ms. Sandra M. Traicoff
Howard & Howard
The Creve Coeur Building
Suite 200
321 Liberty Street
Peoria, Illinois 61602-1403
