FEDERAL DEPOSIT INSURANCE CORPORATION

In Re: Allegiance Direct Bank (Proposed)
Cedar City, Iron County, Utah
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 for Allegiance Direct Bank (the Bank), a proposed new state-chartered industrial bank, to be located at 136 West Center Street, Cedar City, Iron County, Utah.

The Bank will be owned by Leavitt Group Agency Association LLC, a parent company that is not subject to the Bank Holding Company Act. The Bank will engage in insurance premium financing and will offer Money Market Deposit Accounts and Certificates of Deposit.

For the purposes of this proposal, capital is adequate, projections for future earnings prospects are favorable, management is considered satisfactory, and the investment in fixed assets is reasonable. Corporate powers to be exercised are consistent with the purpose of the Federal Deposit Insurance Act. No formal objections to this proposal have been filed and no undue risk to the insurance fund is apparent.

Accordingly, based upon careful evaluation of all available facts and information, the Associate Director, acting under delegated authority, has concluded that approval of the application is warranted, subject to certain prudential conditions.

ASSOCIATE DIRECTOR
DIVISION OF SUPERVISION AND CONSUMER PROTECTION
FEDERAL DEPOSIT INSURANCE CORPORATION

FEDERAL DEPOSIT INSURANCE CORPORATION

In Re: Allegiance Direct Bank (Proposed)
Cedar City, Iron County, Utah
Application for Federal Deposit Insurance (Bank Insurance Fund)

ORDER

The undersigned, acting on behalf of the Board of Directors pursuant to delegated authority, has fully considered all available facts and information relevant to the factors of Section 6 of the Federal Deposit Insurance Act relating to the application for Federal deposit insurance for Allegiance Direct Bank (the Bank), a proposed new state-chartered industrial bank to be located at 136 West Center Street, Cedar City, Iron County, Utah, 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 by the Bank 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 $4,500,000 will be provided;

2. That the Bank shall operate within the parameters of the Business Plan submitted as part of the application for Federal deposit insurance, including capital adequacy and concentration risk measures therein. On an annual basis, the Bank will submit updates to the Business Plan to the Regional Director. The Bank shall notify the Regional Director of any proposed major deviation or material change from the business plan 60 days before consummating the change;

3. 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 stock, shall be approved by the Regional Director of the FDIC's San Francisco Regional Office (Regional Director) prior to the opening of the Bank;

4. That the Bank will 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 and submit to the Regional Director (i) a copy of the audited annual financial statements and the independent public auditor's report thereon within 90 days after the end of the Bank's fiscal year, (ii) a copy of any other report by the independent auditor (including any management letters) within 15 days after their receipt by the Bank, and (iii) written notification within 15 days when a change in the Bank's independent auditor occurs;

5. That no dividends will be paid by the Bank during the first three years of operations without the prior approval of the Regional Director;

6. That Federal deposit insurance shall not become effective unless and until the Bank has been granted a charter, that it has authority to conduct a banking business, and that its establishment and operation as a bank have been fully approved by the appropriate State Authority;

7. That until the conditional commitment herein granted becomes effective, the FDIC shall have the right to alter, suspend or withdraw said commitment should any interim development be deemed to warrant such action; 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 FDIC, the consent granted herein shall expire at the end of the said twelve-month period.

Dated at Washington, D.C. this 23rd day of June 2005.

FEDERAL DEPOSIT INSURANCE CORPORATION

Lisa K. Roy
Associate Director
Division of Supervision and Consumer Protection