IN RE: First Retail Bank, N.A. ("First Retail Bank")
Flowery Branch, Hall County, Georgia
Application for Federal Deposit Insurance (Bank Insurance Fund)

ORDER

The undersigned, acting under delegated authority, has fully considered all relevant facts and information relating to the factors of Section 6 of the Federal Deposit Insurance Act regarding the application for Federal deposit insurance for First Retail Bank, a proposed new bank to be located at 5634 Atlanta Highway, Flowery Branch, Hall County, Georgia, 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 First Retail 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 $2,000,000 be provided, of which not less than $1,000,000 shall be allocated to common stock and $1,000,000 to surplus;

2. That the Tier 1 capital to assets ratio be maintained at not less than 8 percent during the first three years of operation;

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 the stock) will render this commitment null and void unless any such change in proposed management or proposed ownership is approved by the Atlanta Regional Director prior to opening the bank;

4. That Federal deposit insurance shall not become effective unless and until the applicant has been established as a national bank, has authority to conduct a banking business and has been fully approved by the Comptroller of the Currency to be established and operated as a bank;

5. That the insured institution shall be engaged in the business of receiving deposits, other than trust funds;

6. That until the conditional commitment herein granted becomes effective, the Corporation shall have the right to alter, suspend, or withdraw said commitment should any interim development be deemed by the Corporation to warrant such action;

7. That First Retail Bank shall operate within the parameters of the business plan submitted to the FDIC. Furthermore, during the first three years of operations, First Retail Bank shall notify the Regional Director of any proposed major deviation or material change from the submitted plan 60 days before consummation of the change; and

8. That if Federal deposit insurance has not become effective within twelve months from the date of the 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 the said twelve-month period.

Dated at Washington, D.C., this day of , 2000.

FEDERAL DEPOSIT INSURANCE CORPORATION

By: John M. Lane, Associate Director
Division of Supervision

FEDERAL DEPOSIT INSURANCE CORPORATION

IN RE: First Retail Bank, N.A. ("First Retail Bank")
Flowery Branch, Hall County, Georgia
Application for Federal Deposit Insurance (Bank Insurance Fund)

STATEMENT

Pursuant to the provision of Section 5 of the Federal Deposit Insurance Act (12 U.S.C. ? 1815), an application for Federal deposit insurance has been filed for First Retail Bank, a proposed new limited purpose credit card bank, to be located at 5634 Atlanta Highway, Flowery Branch, Hall County, Georgia.

First Retail Bank will be a wholly-owned subsidiary of Reeds Jewelers, Inc., a specialty jewelry retailer chain located in Wilmington, North Carolina. Reeds Jewelers, Inc., has been in operation for more than 50 years and has 108 stores throughout 15 states, with the bulk of the stores located in shopping centers in the Southeastern United States. Reeds Jewelers, Inc., has offered to its customers a credit card that can only be used in its stores and wishes to transfer its present and future credit card receivables to First Retail Bank in order to benefit from the uniform credit card interest rate and fee regulations afforded a national bank. While First Retail Bank will be headquartered in Flowery Branch, Georgia, some of the functions related to the credit card program will be performed at the corporate headquarters of Reeds Jewelers, Inc., in Wilmington, North Carolina.

The applicant is to be established under the provisions of the Competitive Equality Banking Act (CEBA). As a credit card bank, First Retail Bank will engage only in credit card operations, will not accept demand deposits, will not accept savings or time deposits of less than $100,000, and will not make commercial loans.

First Retail Bank's capital, management, financial history, future earnings prospects, ability to meet the convenience and needs of the community, consistency of corporate powers, and the risk to the Bank Insurance Fund are acceptable.

Accordingly, based upon careful evaluation of all available facts and information and upon assurances made by applicant, the Associate Director, acting under delegated authority, has concluded that approval of the application is warranted.

ASSOCIATE DIRECTOR
DIVISION OF SUPERVISION