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Federal Deposit
Insurance Corporation

Each depositor insured to at least $250,000 per insured bank

Decisions on Bank Applications Bank (Proposed)


IN RE: Bank (Proposed)
Wilmington, Delaware
Application for Federal Deposit Insurance (Bank Insurance Fund)


The undersigned, acting on behalf of the Board of Directors pursuant to delegated authority, has fully considered all available facts and information relevant to the factors of Section 6 of the Federal Deposit Insurance Act and relating to the application for Federal deposit insurance, with membership in the Bank Insurance Fund, for Bank, a proposed new state nonmember bank to be located at 405 Silverside Road, Wilmington, New Castle County, Delaware, ("Bank") and has concluded that the application should be approved.

Accordingly, it is hereby ORDERED, for the reasons set forth in the attached Statement, that the application submitted by the Bank for Federal deposit insurance be, and the same hereby is, approved subject to the following conditions:

1. That beginning paid-in capital funds of not less than $16,410,000 be provided, and that a Tier 1 Leverage Capital ratio of not less than 8 percent shall be maintained throughout the first three years of operation and that an adequate Allowance for Loan and Lease Loss 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 New York Regional Office ("Regional Director") prior to opening;

3. That the Bank shall operate within the parameters of the business plan submitted to the FDIC. Furthermore, during the first three years of operations, the Bank shall notify the Regional Director and the State Banking Commissioner of any proposed major deviation or material change from the submitted plan 60 days before consummation of the change;

4. That the Bank develop and submit for Regional Director review, a sound information security program that identifies, measures, monitors, and manages potential risk exposures as detailed in FIL-68-99, Risk Assessment Tools and Practices for Information System Security, dated July 7, 1999, prior to opening;

5. That prior to opening, the Bank shall submit for Regional Director review, documentation showing each web site's compliance with FIL-46-98, Guidance on the Use of Trade Names, dated May 1, 1998 and FIL-9-94, Interagency Statement on Retail Sales of Nondeposit Investment Products.

6. That the Bank require any affinity group or other entity that facilitates the placement of deposits at the bank and is directly or indirectly compensated by the bank, provide the FDIC written notice that it is acting as a deposit broker and comply with Section 29A of the FDI Act and Section 337.6 of the FDIC Rules and Regulations. Furthermore, the Bank shall notify the Regional Director before entering into a deposit broker agreement.

7. That the Bank will have adequate fidelity coverage;

8. That the Bank will obtain an audit of its financial statements annually for at least the first three years after deposit insurance is effective, and furnish a copy of any reports (including any management letters) to the Regional Director within 15 days after their receipt. Furthermore, the Bank shall notify the Regional Director within 15 days when a change in its independent auditor occurs;

9. That the Inc., Wilmington, Delaware, the proposed bank holding company, obtain approval from the Federal Reserve to acquire voting stock control of the Bank prior to its opening;

10. That until the conditional commitment herein granted becomes effective, the FDIC shall have the right to alter, suspend or withdraw said commitment should any interim development be deemed to warrant such action; and

11. 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.

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

John M. Lane
Associate Director
Division of Supervision

IN RE: Bank
Wilmington, New Castle County, Delaware
Application for Federal Deposit Insurance (Bank Insurance Fund)


Pursuant to the provisions of Section 5 of the Federal Deposit Insurance Act (12 U.S.C. 1815), an application for Federal deposit insurance with membership in the Bank Insurance Fund has been filed on behalf of Bank (the bank), a proposed new state nonmember bank to be located at 405 Silverside Road, Wilmington, New Castle County, Delaware.

The bank will be wholly owned by The, Inc., Wilmington, Delaware, a one-bank holding company. The bank's business strategy involves delivering banking products and services electronically through the Internet, ATMs and toll free customer service lines. The bank will not maintain physical branches. The main office will house bank operations, a call center and executive offices. Customers will be primarily acquired by forming private label banking relationships with affinity groups such as universities, trade associations, and businesses. Products and services will be offered through customized trade name Web sites designed for each affinity group. A broad range of deposit products will be offered, as well as direct and indirect mortgage and consumer loans. Customers will make deposits/withdrawals and draw on credit lines through ATM's on the MAC and PLUS network, wire transfer and ACH item. The bank's target market includes New Castle County and the Mid-Atlantic region where it will offer mortgage and consumer loans.

Investment in fixed assets is reasonable, capital is strong, future earnings prospects and the ability to meet the convenience and needs of the community are favorable, and management is considered satisfactory. Corporate powers to be exercised are consistent with the purpose of the Federal Deposit Insurance Act. No formal objections to this proposal have been filed and no undue risk to the Bank Insurance Fund is apparent.

Accordingly, based upon a careful evaluation of all available facts and information, the Associate Director, pursuant to delegated authority, has concluded that approval of the application is warranted.


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