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Brighton Bank


RE: Brighton Bank Brighton, Tennessee

Application Pursuant to Section 24(a) of the Federal Deposit Insurance Act to Directly Continue an Activity That May Not Be Permissible for a National Bank


Pursuant to the provisions of section 24 of the Federal Deposit Insurance Act, an application has been filed with the Federal Deposit Insurance Corporation (FDIC) by Brighton Bank, Brighton, Tennessee (Brighton). The application requests the FDIC's consent to continue to hold shares of a bank holding company's stock in Brighton's wholly owned subsidiary.

State chartered, FDIC-insured banks may not engage as principal in an activity prohibited to nationally chartered banks unless they obtain consent from the FDIC. Consent may not be granted unless the bank is in compliance with applicable capital standards and the FDIC determines that the activity poses no significant risk to the deposit insurance fund.

In 1989 Brighton acquired shares of Midsouth Bancshares, Inc., Millington, Tennessee, representing approximately 2.35% of that organization's unlisted and closely-held stock. Midsouth Bancshares, Inc. owns 85% of Tennessee Bank & Trust, Millington, Tennessee. As a second-tier bank holding company, Midsouth Bancshares, Inc. is in turn 95% owned by Independent Southern Bancshares, Inc., Brownsville, Tennessee. The investment in the bank holding company stock is permissable under Tennessee state law, however, holding the stock may not be a permissable activity for national banks.

Brighton is in satisfactory condition, and in compliance with applicable capital standards; the investment in the bank holding company stock, through Brighton's wholly owned subsidiary, is not deemed to to be an undue banking risk.

Having found that the State Authority does not object to the activity; that Brighton is in compliance with applicable capital standards; and that retention of the holding company stock does not pose a significant risk to the deposit insurance fund; the FDIC concludes that approval of Brighton's request to continue to hold the shares of bank holding company stock in its wholly owned subsidiary is warranted, subject to certain conditions.

The FDIC has conditioned its action in this case upon its future ability to alter, suspend, or withdraw its approval should the facts and circumstances present in the application change significantly. Brighton shall notify the FDIC of any significant change in facts or circumstances. In addition, Brighton shall continue to meet applicable capital standards.

The FDIC specifically notes that its consent action is unique to this case, that it was significantly influenced by acquisition pre-Section 24 and that its view of a de novo request to continue such an activity might well be different.