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Decisions on Bank Applications

Winona Savings Bank


RE: Winona Savings Bank Winona, Missouri

Application Pursuant to Section 24(d) of the Federal Deposit Insurance Act to Indirectly Continue Activity That May Not be Permissible for a National Bank


Pursuant to provisions of Section 24 of the Federal Deposit Insurance Act ("FDI Act") and Part 362 of the Federal Deposit Insurance Corporation ("FDIC") Rules and Regulations, an application has been filed with the FDIC by Winona Savings Bank, Winona, Missouri (the "Applicant"). The Applicant seeks approval to continue to indirectly own and lease specified commercial real estate located in Winona (the "Property") through its whollyowned subsidiary, WSB Real Estate Development Corporation (the "Subsidiary"). The Subsidiary was established primarily for the purpose of funding the construction of a commercial building which is utilized by various community service organizations that operate within the Applicant's local service area. The Subsidiary acquired the underlying real estate as a donation from the City of Winona prior to the effective date of Section 24(d) of the FDI Act. The Applicant has indicated that its real estate development activity will be limited to that currently conducted through the Subsidiary.

The Applicant meets the definition of "well capitalized" within the meaning of Part 325 of the FDIC's Rules and Regulations, and is in compliance with applicable capital standards. The Applicant's interest in the Property represents 5.27 % of the Applicant's equity capital as of June 30, 1994. The FDIC has taken into consideration the financial and managerial resources, future earnings prospects of the Applicant, and the risks relative to the Subsidiary's continued holding of the Property. Having found that the activity in question did not require FDIC review or consent at inception; that the investment is now and is expected in the future to represent a nominal portion of the Applicant's capital; that the Applicant's financial condition and management are satisfactory; that the State Authority authorizes the activity; that retention of the investment is not economically unsound in terms of safety, rate of return, or other considerations; and that the Applicant is in compliance with applicable capital standards -- the FDIC concludes that the continuance of the Subsidiary's current activities pursuant to the request of the Applicant does not pose a significant risk to the deposit insurance fund and therefore may be and hereby is approved subject to the following restrictions.

The Applicant shall notify the FDIC of any significant change in facts or circumstances, and the FDIC shall have the right to alter, suspend, or withdraw its approval upon receiving such notification. In addition, transactions between the Applicant and the Subsidiary that would be covered transactions for purposes of Sections 23A and 23B of the Federal Reserve Act, 12 U.S.C. §§ 371c and 371c-1, if the Subsidiary were an affiliate of the Applicant under Sections 23A and 23B, shall not exceed the amount limitations and shall be made in accordance with the other restrictions of Sections 23A and 23B to the same extent as though the Subsidiary were an affiliate of the Applicant.

Finally, the FDIC notes that the foregoing approval is unique to this application, that it was significantly influenced by the Subsidiary's acquisition of the Property prior to the effective date of Section 24(d), and that its view of a de novo acquisition of such property might well be different.