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Decisions on Bank Applications

Country Trust Bank, FSB


RE: Country Trust Bank, FSB
Bloomington, Illinois
Applications for Federal Deposit Insurance and Consent to Merge


Pursuant to Sections 5 and 18(c) and other provisions of the Federal Deposit Insurance Act ("FDI Act"), applications have been filed on behalf of Country Trust Bank, FSB ("CTB"), Bloomington, Illinois, a proposed new federal savings bank in organization, for deposit insurance with membership in the Savings Association Insurance Fund, and for consent to merge under its charter and title with Illinois Agricultural Association Trust Company ("IAATC"), Bloomington, Illinois, an uninsured trust company. Notice of the proposed transaction, in a form approved by the FDIC, has been published pursuant to the FDI Act.

The proposal is the result of Illinois Agricultural Association's corporate reorganization whereby IAATC would convert its charter from a state trust company to that of a federal savings bank through this merger with CTB. The proposed transaction involves a multi-tier financial services holding company structure whereby Country Life Insurance Company ("CLIC") will be the majority owner and holding company of CTB, Country Mutual Insurance Company ("CMIC") will hold a minority interest in CTB, Illinois Agricultural Holding Company ("IAHC") will be the holding company of CLIC, and Illinois Agricultural Association ("IAA") - at the highest tier - will be the holding company of IAHC and CMIC. The proposed transaction would allow IAA to serve trust clients in a multi-state environment. It would not affect the structure of banking or the concentration of banking resources within the relevant market. Services offered in the market by CTB would not differ materially from those presently offered by IAATC.

Since CTB's principal focus is trust services, it anticipates being designated a "special purpose savings association" by the Office of Thrift Supervision. The Community Reinvestment Act ("CRA") is not applicable to special-purpose savings associations.

In connection with the applications, the FDIC has also taken into consideration the competitive effects of the proposed transaction; the financial and managerial resources and future prospects of the proponent institution and the resultant bank; and the convenience and needs of the community to be served. Management is considered capable with extensive trust-related experience. Capital is adequate and expected to be well in excess of 10 percent throughout the first three-year period after receiving deposit insurance. Earnings prospects are favorable.

Having found favorably on the statutory factors and having considered all other relevant information, including any reports on the competitive factors furnished by the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Director of the Office of Thrift Supervision, and the Attorney General of the United States, it is the FDIC's judgment that the applications should be and hereby are approved, subject to the following conditions:

1. That beginning paid-in-capital funds of not less that $2,000,000 be provided;

2. That any changes in proposed management or proposed ownership (10 percent or more of stock), including new acquisitions of or subscriptions to 10 percent or more of stock, will render this commitment null and void unless such proposal is approved by the Regional Director of the FDIC's Chicago Regional Office ("Regional Director") prior to opening of the bank;

3. That Federal deposit insurance shall not become effective unless and until the applicant has been established as a federal savings bank, that it has authority to conduct a banking business, and that its establishment and operation as a bank have been fully approved by appropriate Federal authorities;

4. That the Country Life Insurance Company, obtain approval from the Office of Thrift Supervision to establish a unitary thrift holding company and acquire voting stock control of the bank prior to its opening;

5. That the insured institution shall be engaged in the business of receiving deposits other than trust funds;

6. That any proposed major deviations or material changes from the submitted business plan within the first three years of operation, in particular, changes pertaining to expansion of corporate powers, shall receive the prior written approval of the Regional Director;

7. That the transaction shall not be consummated less than fifteen calendar days after the date of this Order or later than six months after the date of this Order, unless such period is extended for good cause by the FDIC;

8. That until the date that this conditional commitment for deposit insurance and for consent to merge becomes effective, the FDIC shall have the right to alter, suspend, or withdraw the said commitment should any interim development be deemed to warrant such action; and

9. That if Federal deposit insurance has not become effective within twelve months from the date of this Order, or unless, in the meantime, a request for an extension of time has been approved by the FDIC, the consent granted herein shall expire at the end of the said twelve-month period.

By Order of the Associate Director of the Division of Supervision, acting pursuant to delegated authority for the Board of Directors of the FDIC.

Dated at Washington, D.C., this day of February 2000.

John M. Lane
Associate Director
Division of Supervision