{{5-31-02 p.C-1574}}
[¶10,356A] In the Matter of South Shore Bank of Chicago, Chicago, Illinois, Docket
No. 91-295kk (10-9-91).
FDIC issues order conditionally granting approval for exemption of
liability.
[.1] Exemption from Liability—Expiration
[.2] Exemption from Liability—Reasonable Losses
[.3] Exemption from Liability—Revocation for Non-Compliance
In the Matter of
SOUTH SHORE BANK OF CHICAGO
CHICAGO, ILLINOIS
(Insured Depository Institution)
which may become related to
THE DOUGLASS BANK
KANSAS CITY, KANSAS
(Insured Depository Institution)
ORDER CONDITIONALLY GRANTING APPROVAL FOR EXEMPTION FROM LIABILITY
FDIC-91-295kk
WHEREAS, The Hall Family Foundation of Kansas, a Kansas non-profit
corporation, and various other investors have expressed a willingness
to provide $2,000,000 in equity to The Douglass Bank, Kansas City,
Kansas ("Douglass Bank"), a minority controlled insured
depository institution, conditioned, among other things, upon execution
of an approximately five-year advisory agreement among The Shorebank
Corporation, Chicago, Illinois ("Shorebank"), Douglass Bank, and
Douglass Bancorp, Inc., Kansas City, Kansas ("Bancorp"), a
one-bank holding company which wholly owns Douglass Bank; and
WHEREAS, Shorebank is a bank holding company which owns South Shore
Bank of Chicago, Chicago, Illinois ("SSB"), an insured depository
institution; and
WHEREAS, consummation of the proposed transaction is further
conditioned upon the Federal Deposit Insurance Corporation
("FDIC") providing an exemption to SSB, pursuant to section
5(e)(5)(A) of the Federal Deposit Insurance Act ("Act"), 12
U.S.C. §1815(e)(5)(A), from any liability under section 5(e) of the
Act, 12 U.S.C. §1815(e), which might arise for SSB as the result of
the advisory agreement, the loan of up to $300,000 to Bancorp by SSB's
affiliate, The Neighborhood Fund, Inc., or otherwise; and
WHEREAS, SSB has requested that the FDIC grant the exemption from
liability described in the preceding paragraph; and
WHEREAS, the State Bank Commissioner for the State of Kansas has
written to advise the FDIC of his support for an expedited resolution
of the problems of Douglass Bank, and such resolution would be
consistent with FDIC Policy Statement on Encouragement and Preservation
of Minority Ownership of Financial Institutions issued on April 3,
1990, 1 Federal Deposit Insurance Corporation (P-H) 5329 (April 3,
1990), and with section 308 of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989, Pub. L. 101-73, 103 Stat. 353,
(codified at 12 U.S.C. §1463 note (1991)); and
WHEREAS, the Board of Directors ("Board") of the FDIC, having
fully considered the facts and information relating to the foregoing
request for exemption from liability, has concluded that an exemption
is in the best interest of the Bank Insurance Fund, and that approval
of the request should be granted, subject to the conditions and
restrictions set forth below.
IT IS THEREFORE ORDERED:
1. This ORDER CONDITIONALLY GRANTING APPROVAL FOR EXEMPTION FROM
LIABILITY ("ORDER") shall become effective upon issuance.
[.1]2. Notwithstanding the foregoing, this exemption shall expire upon the
earlier of: (i) the date on which SSB, or any affiliate of SSB,
acquires ownership and control of 25 percent or more of any class of
the voting securities of Douglass Bancorp, Inc., or 25 percent or more
of any class of the voting securities of any insured depository
institution subsidiary of Douglass Bancorp, Inc.; (ii) the termination
of the advisory agreement among The Shorebank Corporation, Douglass
Bancorp, Inc., and Douglass Bank; (iii) December 31, 1991, unless,
prior to such date, the Part 325 Tier 1 capital, as that term is
presently defined by section 325.2 of the FDIC's Rules and
Regulations, 12 C.F.R. §325.2, of Douglass Bank shall have been
increased, in a form acceptable to the Regional Director (Supervision)
of the FDIC's Kansas City Regional Office ("Regional Director"),
by a minimum of $2,000,000; or (iv) December 31, 1996, unless the FDIC
has approved a request for an extension of the waiver. SSB shall
promptly notify the Regional Director in writing upon the occurrence of
an event which would trigger such expiration.
[.2]3. The exemption granted by this ORDER will apply only to losses in
connection with the default of, or FDIC assistance to, Douglass Bank
which might be assessed against SSB pursuant to the provisions of
section 5(e) of the Act, 12 U.S.C. §1815(e).
[.3]4. Should the FDIC determine that Douglass Bank, SSB, or any insured
depository institution affiliates controlled by SSB, fail to comply
fully with the aforesaid restrictions, the FDIC shall have the right to
revoke this exemption after giving SSB written notice of said
revocation and a reasonable opportunity to be heard on the matter.
By direction of the Board of Directors.
Dated at Washington, D.C., this 9th day of October, 1991.
