Federal Deposit
Insurance Corporation

{{5-31-02 p.C-1635}}

   [¶10,376A] In the Matter of State Home Savings Bank, F.S.B., Bowling Green, Ohio, Docket No. 91-307kk (11-5-91).

   FDIC issues order conditionally granting approval for waiver of cross-guaranty.

   [.1] Holding Company—Acquisition of Control of Bank—Time Frame

   [.2] Cross-Guaranty—Waiver—Applicability May Not be Conveyed or Transferred

   [.3] Cross-Guaranty—Waiver—Expiration

   [.4] Cross-Guaranty—Waiver—Reasonable Losses

   [.5] Cross-Guaranty—Waiver—Compliance with Federal Reserve Act Restrictions—Required

   [.6] Cross-Guaranty—Waiver—Institution's Independence Required

   [.7] Cross-Guaranty—Waiver—Revocation for Non-Compliance

In the Matter of
STATE HOME SAVINGS BANK, F.S.B.
BOWLING GREEN, OHIO
(Insured Depository Institution)
related to
PALISADE SAVINGS BANK, FSB
RIDGEFIELD PARK, NEW JERSEY
(Insured Depository Institution)
ORDER CONDITIONALLY GRANTING APPROVAL FOR WAIVER OF CROSS-GUARANTY

FDIC-91-307kk

   WHEREAS, U.S. Thrift Opportunity Partners, Limited Partnership ("USTOP"), on June 5, 1991, acquired 100 percent of the outstanding stock of Palisade Savings Bank, FSB, Ridgefield, New Jersey ("Palisade"), through a voluntary conversion which included the injection of $12,000,000 of capital, increasing Palisade's tangible capital from a negative $9.2 million to approximately 4.4 percent; and

   WHEREAS, USTOP has now entered into an agreement with State Home Savings Bank, F.S.B., Bowling Green, Ohio ("State Home"), whereby State Home would be converted into a federally-chartered stock institution via a voluntary supervisory conversion and USTOP would acquire not less than 95 percent of the State Home stock for $14,000,000; and

   WHEREAS, USTOP's proposed acquisition is conditional upon the Federal Deposit Insurance Corporation ("FDIC") exempting, pursuant to section 5(e)(5)(A) of the Federal Deposit Insurance Act ("Act"), 12 U.S.C. §1815(e)(5)(A), State Home¹ from any losses incurred or reasonably anticipated to be incurred by the FDIC from the default of or FDIC assistance to Palisade; and

   WHEREAS, USTOP has requested that the FDIC grant to State Home an appropriate exemption with respect to losses incurred or reasonably anticipated to be incurred by the FDIC from the default of or FDIC assistance to Palisade;

   BE ADVISED that the Board of Directors of the FDIC, having fully considered the facts and information relating to the foregoing request for exemption from losses, and being mindful of the facts that USTOP was in no way responsible for the deteriorated financial condition of Palisade prior to its acquisition and that USTOP has made a substantial investment in Palisade in an attempt to rescue said institution, has concluded that an exemption is in the best interest of the Savings Association Insurance Fund, and that approval of the request should be, and hereby is granted, subject to the conditions and restrictions set forth below.

   IT IS THEREFORE ORDERED:

   [.1]1. This ORDER CONDITIONALLY GRANTING APPROVAL FOR WAIVER OF CROSS-GUARANTY ("ORDER") will become effective upon the acquisition of control of State Home by USTOP through the purchase of not less than 95 percent of the stock of State Home for $14,000,000 within six months from the date of issuance of this ORDER, and, absent such acquisition within that time period, this ORDER will become null and void, unless, upon the written request of USTOP or State Home, the FDIC grants an extension of that time period.

   [.2]2. IT IS FURTHER ORDERED, that this ORDER will remain in effect only so long as State Home is controlled by USTOP, and its applicability may not be conveyed or otherwise transferred.

   [.3]3. IT IS FURTHER ORDERED, notwithstanding the foregoing, that this exemption shall expire five years from the date USTOP acquires control of State Home.

   [.4]4. IT IS FURTHER ORDERED, that the exemption granted by this ORDER will apply only to losses incurred or reasonably anticipated to be incurred from the default of or FDIC assistance to Palisade.

   [.5]5. IT IS FURTHER ORDERED, that during the life of this ORDER, State Home, Palisade, and any other insured depository institution affiliate of State Home shall comply fully with the restrictions of sections 23A and 23B of the Federal Reserve Act, 12 U.S.C. §§ 371c and 371c-1, without regard to section 23A(d)(1) of the Federal Reserve Act, 12 U.S.C. §371c(d)(1).

   [.6]6. IT IS FURTHER ORDERED, that during the life of this ORDER, State Home shall not, directly or indirectly, exercise a controlling influence over the management or policies of Palisade, and Palisade shall not, directly or indirectly, exercise a controlling influence over the management or policies of State Home.

   7. IT IS FURTHER ORDERED, that State Home and Palisade will, in accordance with ownership representations, operate independently of one another and not in a fashion so as to intertwine the operations of one with the other.

   [.7]8. IT IS FURTHER ORDERED, that should the FDIC determine that State Home, Palisade, or any other insured depository institution affiliate of State Home has failed to comply fully with the aforesaid restrictions, the FDIC shall have the right to revoke this exemption after giving State Home 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 5th day of November, 1991.