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Farmers and Merchants Bank


RE: Farmers and Merchants Bank Reyno, Arkansas

Application Pursuant to Section 24(d) (1) of the Federal Deposit Insurance Act to Conduct Activities Through a Wholly-Owned Subsidiary 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 by Farmers and Merchants Bank, Randolph County, Arkansas, ("Farmers"). The application requests the Corporation's consent to continue to hold a parcel of real estate through a wholly-owned subsidiary.

Farmers, which meets the definition of "well capitalized" within the meaning of Part 325 of the Federal Deposit Insurance Corporation's rules and regulations, is in compliance with applicable capital standards. In addition, the parcel of real estate, representing approximately 5% of Farmer's tier 1 capital is to be sold and the subsidiary which holds the property, Farmers and Merchants Development Corporation, would then be liquidated.

Accordingly, the Associate Director, Division of Supervision, acting on behalf of the Corporation under delegated authority, has concluded that the real estate holding presents minimal risk to the Bank Insurance Fund and has determined that the application should be approved. Such approval should not be construed as a determination that any particular activity is not permissible for a national bank, or a subsidiary of a national bank, or a subsidiary of a national bank, and any action by the Corporation on the application is taken without prejudice as to whether or not an application was needed.