The Board of Directors
Everett, Massachusetts 02149
Dear Members of the Board:
We have reviewed the application submitted by the Eagle Bank, Everett, Massachusetts (Bank) pursuant to Section 362.4(b)(1) of the Rules and Regulations of the Federal Deposit Insurance Corporation for consent to make an additional investment in the Bank's wholly-owned subsidiary, Rett Corporation (Subsidiary). The Subsidiary is engaged in an activity that may not be permissible for a subsidiary of a national bank. This activity, real estate investment, was approved by the FDIC on October 25, 1995, subject to certain conditions, one of which prohibited the Bank from making any additional investment in the Subsidiary without the prior written consent of the FDIC.
The Subsidiary is a partner in Frontage Road Associates (Partnership), which owns a research and development building in Andover, Massachusetts. The Subsidiary desired to withdraw from the Partnership, and after the other partners did not exercise their right of first refusal to acquire the Subsidiary's interest, the Partnership was considered to be dissolved. The building is now listed for sale. The additional investment in the Subsidiary is intended to increase the cash reserves of the Partnership to fund debt payments, taxes, and other expenses of the building until a sale is consummated.
The Bank has remained in compliance with the conditions listed in the original approval. Considering the nominal size of the proposed additional investment and that Bank exceeds applicable capital requirements after deducting its investment in the Subsidiary from its Tier 1 Capital, the Bank's request to invest an additional $200,000 in its Subsidiary is hereby approved. This additional investment is not intended for the Subsidiary to provide funds to expand the current real estate activity nor to initiate a de novo activity, but to protect the interest of the Bank. Therefore, all conditions contained in the October 25, 1995 approval letter remain in effect.