FEDERAL DEPOSIT INSURANCE CORPORATION
IN RE:
United Community Bank, N.A. (Proposed)
Highland Village, Denton County, Texas
Application for Federal Deposit Insurance
(Bank Insurance Fund)
ORDER
The Board of Directors 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 United Community Bank, N.A., a proposed new national bank to be located at Farm to
Market Road 407 and Highland Village Road, Highland Village, Denton County, Texas, 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 on behalf of United Community Bank, N.A., 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 $4,000,000 shall 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 the stock,
shall render this approval null and void unless such proposal is approved by the
Corporation prior to opening of the bank;
3. That during the first three years of operation the bank shall maintain not less than
an 8 percent Tier 1 capital ratio;
4. That prior to the effective date of Federal deposit insurance, a complete shareholder
list of The Community Group, Inc., the proposed parent bank holding company, shall be
provided to the FDIC Regional Director of the Dallas Regional Office, and the list shall
include the name, address, and number of shares of each shareholder;
5. That Federal deposit insurance shall not become effective unless and until the
applicant has been established as a national bank, that it has authority to conduct a
banking business, and that its establishment and operation as a bank have been fully
approved by the Office of the Comptroller of the Currency;
6. That until the bank commences business, the Corporation shall have the right to
alter, suspend, or withdraw said approval should any interim development be deemed to
warrant such action;
7. That until the bank commences business, if the Corporation revises its Policy
Statement on "Applications For Deposit Insurance" so as to differ in content
with any conditions imposed herein, the Corporation shall have the right to alter said
conditions to conform to such revised Policy Statement; and
8. 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 Corporation, the consent granted shall expire at the end of said
twelve-month period.
Dated at Washington, D. C., this 17th day of March, 1998.
BY ORDER OF THE BOARD OF DIRECTORS
Executive Secretary
FEDERAL DEPOSIT INSURANCE CORPORATION
IN RE: United Community Bank, N.A. (Proposed)
Highland Village, Denton County, Texas
Application for Federal Deposit Insurance
(Bank Insurance Fund)
STATEMENT
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 United Community Bank, N.A., a proposed new bank to be
located at Farm to Market Road 407 and Highland Village Road, Highland Village, Denton
County, Texas.
The proponents have delineated the communities of Highland Village, Flower Mound,
Lewisville, Double Oak, Copper Canyon, and Bartonville as the primary trade area of the
proposed bank. A review of the proposed bank's Community Reinvestment Act Statement and
other available information indicates that no inconsistencies with the purposes of the
Community Reinvestment Act appear to exist.
Initial capitalization is adequate, and acceptable deposit growth and operating profits
within a reasonable period of time are projected. The factors relating to general
character and fitness of management and risk to the deposit insurance fund have been
resolved as favorable.
The application as submitted included the proposed issuance of stock benefits to
organizers to compensate for financial support provided in the initial stages of
establishing the bank and to attract and retain qualified key personnel. There is no
provision in the Statement of Policy regarding applications for deposit insurance to
accommodate the granting of stock benefits to reward organizers for their financial
support in the initial stages of establishing a bank. The issuance of stock benefits to
organizers who will not be involved in the active management of the institution is also a
contravention of existing policy.
While the stock benefits proposed to be issued will not be tied to specific performance
by active management as provided in the FDIC's current Statement of Policy, such stock
benefits would appear to be acceptable under the FDIC's proposed revisions to that
Statement of Policy. The Board, in the proposed revisions
to the Statement of Policy and in recent cases involving stock benefit plans, has
concluded that such plans are not objectionable if such plans represent reasonable
compensation for the time and expertise or financial commitment of the outside
incorporators. In this particular case, the stock benefits are not considered
objectionable in that the stock benefits represent reasonable compensation for the risk
arising from the significant financial commitment of the outside incorporators.
Accordingly, based on a careful evaluation of all available relevant facts and
information, the Board of Directors has concluded that approval of the application is
warranted.
THE BOARD OF DIRECTORS
FEDERAL DEPOSIT INSURANCE CORPORATION