FEDERAL DEPOSIT INSURANCE CORPORATION

IN RE: Great Northern Bank Antioch, Illinois

Application for Federal Deposit Insurance (Bank Insurance Fund)

The undersigned, acting under 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 Great Northern Bank, Antioch, Lake County, Illinois, (bank) a proposed new State nonmember bank to be temporarily located at 41380 N. Highway 83, Antioch, Illinois and has concluded that the application should be approved. The bank will relocate to its permanent location at 41412 N. Highway 83, Antioch, Illinois once construction of the building is complete.

Accordingly, it is hereby ORDERED, that the application submitted by Great Northern Bank, Antioch, Lake County, Illinois, 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 be provided, including common stock of $1,600,000, surplus of $2,000,000, and other segregations of $400,000, and that a ratio of Tier I Capital to total assets of not less than eight percent, in addition to a fully funded loan loss reserve, shall be maintained during the first three years of operation,

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, will render this commitment null and void unless such proposal is approved by the Federal Deposit Insurance Corporation (FDIC) prior to opening of the bank;

3. That an accrual accounting system be adopted for maintaining the bank's books,

4. That the bank obtain an audit of its financial statements by an independent public accountant annually for at least the first three years after deposit insurance is effective, furnish a copy of any reports by the independent auditor (including any management letters) to the Chicago Regional Office within 15 days after their receipt by the bank, and notify the Regional Office within 15 days when a change in its independent auditor occurs;

5. That adequate fidelity bond coverage be obtained prior to opening the bank;

6. That federal deposit insurance shall not become effective unless and until the applicant has been established as a State nonmember 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 State authority;

7. That, until the date this conditional commitment for deposit insurance becomes effective, the FDIC shall have the right to alter, suspend, or withdraw the said commitment should any interim development be deemed to warrant such action, and

8. That, if deposit insurance has not become effective within twelve months from the date of this Order, or unless, in the meantime, the FDIC has approved a request for an extension of time, the consent granted shall expire at the end of said twelve-month period.

Dated at Washington, D. C., this 28th day of July 1998.

FEDERAL DEPOSIT INSURANCE CORPORATION

Mark S. Schmidt
Associate Director
Division of Supervision

FEDERAL DEPOSIT INSURANCE CORPORATION

IN RE: Great Northern Bank Antioch, Lake County, Illinois

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 has been filed on behalf of the Great Northern Bank, Antioch, Lake County, Illinois, (bank) a proposed new state nonmember bank to be temporarily located at 41380 N. Highway 83, Antioch, Illinois. The bank will operate out of these temporary facilities until construction is complete on its proposed permanent facilities at which time the bank will relocate to 41412 N. Highway 83, Antioch, Illinois.

The bank will offer full service, community oriented banking in a primary service area, which includes the Villages of Antioch, Lake Villa, Lindenhurst, and portions of Fox Lake and Kenosha County, Wisconsin. The proponents believe that the recent, and anticipated, consolidation of the banking industry has created opportunities for independent, locally owned and managed banks. A review of the information submitted by the applicant relating to the convenience and needs statutory factor revealed no inconsistencies with the purposes of the Community Reinvestment Act.

Initial capitalization is adequate, and acceptable deposit growth and operating profits within a reasonable period of time are projected. Proposed management is acceptable and approval of the proposal would not create an undue risk to the Bank Insurance Fund.

The application as submitted included the proposed issuance of stock warrants to organizers to compensate for financial support, time, and expertise provided in the initial stages of establishing the bank. There is no provision in the Statement of Policy to accommodate the granting of stock benefits to reward organizers for their financial support in the initial stages of establishing a bank.

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 regarding applications for deposit insurance, such stock benefits are acceptable under the FDIC's recently revised and approved Statement of Policy, which becomes effective October 1, 1998, The Board, in the revised 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.

Accordingly, based on a careful evaluation of all available relevant facts and information, the Associate Director, acting under delegated authority, has concluded that approval of the application is warranted subject to conditions listed in the Order.

ASSOCIATE DIRECTOR
DIVISION OF SUPERVISION