{{5-31-02 p.C-2044}}
[¶10,475A] In the Matter of First State Bank of Park River, Park River, North
Dakota, Docket No. 91-411kk (3-10-92).
FDIC issues order conditionally granting approval for waiver of
cross-guaranty.
[.1] Cross-Guaranty—Waiver—Conditional on Acquisition
[.2] Holding Company—Injection of Capital—Condition of Cross-Guaranty
Waiver
[.3] Cross-Guaranty—Waiver—Applicability May Not be Conveyed or
Transferred
[.4] Cross-Guaranty—Waiver—Expiration
[.5] Cross-Guaranty—Waiver—Reasonable Losses
[.6] Cross-Guaranty—Waiver—Institutions Independence Required
[.7] Cross-Guaranty—Waiver—Inter-Company Transactions Restricted
[.8] Cross-Guaranty—Waiver—Revocation for Non-Compliance
In the Matter of
FIRST STATE BANK OF PARK RIVER
PARK RIVER, NORTH DAKOTA
(Insured Depository Institution)
to be related to
SECURITY STATE BANK OF ADAMS
ADAMS, NORTH DAKOTA
(Insured Depository Institution)
ORDER CONDITIONALLY GRANTING APPROVAL FOR WAIVER OF CROSS-GUARANTY
FDIC-91-411kk
WHEREAS, The First Holding Company of Park River, Inc., Park
River, North Dakota ("FHC"), a one-bank holding company which
controls First State Bank of Park River, Park River, North Dakota
("Park River"), has proposed to acquire 100 percent of the voting
stock of Security State Bank of Adams, Adams, North Dakota
("Adams") from Security Banco, Inc., Adams, North Dakota
("SBI"); and
WHEREAS, the purchase agreement between FHC and SBI plus the accounting
treatment of the purchase contract will result in FHC's injection of
$372,000 into Adams, consisting of $202,000 in cash and $170,000 in
Part 325 Tier 1 capital, in a manner acceptable to the Regional
Director (Supervision) of the Federal Deposit Insurance Corporation's
("FDIC") Kansas City Regional Office ("Regional Director");
and
WHEREAS, FHC's proposed acquisition and its corresponding commitment
to inject capital as detailed above are conditional upon the FDIC
exempting, pursuant to section 5(e)(5)(A) of the Federal Deposit
Insurance Act ("Act"), 12 U.S.C. §1815(e)(5)(A), Park River
from any losses incurred or reasonably anticipated to be incurred by
the FDIC from the default of or FDIC assistance to Adams for a period
of time; and
WHEREAS, FHC has requested that the FDIC grant an appropriate exemption
from such losses with respect to FHC's proposed acquisition of control
of Adams for a period of time;
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, has concluded that an exemption is in the
best interest of the Bank 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 properly
approved acquisition of control of Adams by FHC through the purchase of
100 percent of the voting shares of Adams 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 Park River or FHC, the FDIC, in its discretion,
grants an extension of that time period.
[.2]2. IT IS FURTHER ORDERED, that the waiver granted by this ORDER shall
be conditioned upon the injection by FHC of $372,000, as detailed
above, into Adams.
[.3]3. IT IS FURTHER ORDERED, that this ORDER will remain in effect only so
long as Adams is controlled by FHC, and its applicability may not be
conveyed or otherwise transferred.
[.4]4. IT IS FURTHER ORDERED, notwithstanding the foregoing, that this
exemption shall expire three years from the date FHC acquires control
of Adams.
[.5]5. IT IS FURTHER ORDERED, that the exemption granted by this ORDER will
apply only to such losses as may be incurred or reasonably anticipated
to be incurred from the default of, or FDIC assistance to, Adams.
[.6]6. IT IS FURTHER ORDERED, that during the life of this ORDER, Park
River and Adams will operate independently of one another and not in a
fashion so as to intertwine the operations of one with the other,
unless the prior non-objection of the Regional Director is obtained.
[.7]7. IT IS FURTHER ORDERED, that during the life of this ORDER, with the
exception of interbank Federal funds transactions and routine recurring
inter-company transactions (provided such are previously described to
and agreed upon by the Regional Director), Adams shall not pay any fee
or effect any other payment to or on behalf of any of its affiliates,
or enter into any transaction which results in a transfer, purchase or
sale of assets between Adams and any of its affiliates during the
period this waiver is in effect without the prior non-objection of the
Regional Director; and, that during the life of this ORDER, Park River
and Adams will provide the Regional Director, in a form acceptable to
the Regional Director, monthly detailed summaries of all inter-company
transactions with their affiliates which occurred during the preceding
month.
8. IT IS FURTHER ORDERED, that during the life of this ORDER, neither
Park River nor Adams shall engage in any inter-company transaction with
their affiliates without the prior approval of such transaction by
their respective boards of directors.
[.8]9. IT IS FURTHER ORDERED, that should the FDIC determine that the
parties to the proposed transaction, or any other insured depository
institution affiliate of such parties, has failed to comply fully with
the aforesaid conditions and restrictions, the FDIC shall have the
right to revoke this exemption after giving FHC written notice of said
revocation and a reasonable opportunity to be heard on the matter.
Notwithstanding the foregoing, there shall be no right to a hearing
regarding compliance with the condition contained in paragraph 2 above.
By direction of the Board of Directors.
Dated at Washington, D.C., this 10th day of March, 1992.
