FEDERAL DEPOSIT INSURANCE CORPORATION

In Re: The Grange Bank (Proposed)
Columbus, Franklin County, Ohio
Application for Federal Deposit Insurance (Savings Association 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 Savings Association Insurance Fund has been filed on behalf of The Grange Bank (the bank), a proposed new federal savings bank to be located at 650 South Front Street, Columbus, Ohio.

The bank's sole shareholder will be Grange Mutual Casualty Company (Grange Mutual). Grange Mutual is headquartered in Columbus, Ohio. Grange Mutual's network of independent agents includes twenty-two agencies with offices located within the City of Columbus and approximately 811 agencies located throughout the seven state area of operations. Grange Mutual is a property and casualty insurance company actively involved in automobile, homeowner and small business insurance.

Grange Mutual conducts business in the states of Ohio, Indiana, Illinois, Georgia, Kentucky, Wisconsin and Tennessee, and will eventually extend its banking operations throughout those states. The bank's business plan is to provide residential mortgage loans, home equity loans and lines, and automobile and other personal loans. Only certificates of deposit and savings accounts will be offered initially, but other deposit product choices will be offered within two to three years. A small bank lobby will be available for walk-in customers; however, most transactions are expected to be conducted electronically and through the U.S. mail service. Marketing will be accomplished through direct mail, local media advertising, telemarketing, the Internet, and direct solicitation. Grange Mutual's network of independent insurance agents will be used to advertise the availability of these banking products and to assist customers in establishing relationships with the bank.

For purposes of this proposal, the investment in fixed assets is reasonable, capital is adequate, future earnings prospects are favorable, and management is considered satisfactory. Corporate powers to be exercised are consistent with the purpose of the Federal Deposit Insurance Act. No undue risk to the Savings Association Insurance Fund is apparent.

Accordingly, based upon a careful evaluation of all available facts and information, the Associate Director, pursuant to delegated authority, has concluded that approval of the application is warranted.

ASSOCIATE DIRECTOR
DIVISION OF SUPERVISION
FEDERAL DEPOSIT INSURANCE CORPORATION

FEDERAL DEPOSIT INSURANCE CORPORATION

In Re: The Grange Bank (Proposed)
Columbus, Franklin County, Ohio
Application for Federal Deposit Insurance (Savings Association 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 The Grange Bank (the bank), a proposed new federal savings bank to be located at 650 South Front Street, Columbus, Franklin County, Ohio, 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 $7,000,000 be provided;

(2) That a Tier 1 capital to total assets ratio of not less than 8% be maintained for the first three years after deposit insurance is effective;

(3) That all proposed directors are approved by the Regional Director of the FDIC?s Chicago Regional Office (Regional Director) prior to opening of the bank;

(4) That any changes in proposed management or proposed ownership (10% or more of stock) of the bank, including new acquisitions of or subscriptions to 10% or more of the bank's stock, will render this commitment null and void unless such proposal is approved by the Regional Director prior to opening of the bank;

(5) That the bank will not accept brokered deposits referred by independent insurance agents who have not provided the Federal Deposit Insurance Corporation with written notice that they are acting as a deposit broker in accordance with section 337.6(e) of Federal Deposit Insurance Corporation Rules and Regulations;

(6) That Federal deposit insurance shall not become effective unless and until Grange Mutual Casualty Company, Columbus, Ohio obtains approval from the Office of Thrift Supervision to acquire voting stock control of the bank prior to its opening and until the applicant has been established as a federal savings 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 Thrift Supervision;

(7) That until the conditional commitment herein ORDERED 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, a request for an extension of time has been approved by the FDIC, the consent granted shall expire at the end of the twelve-month period.

Dated at Washington, D.C. this day of June, 1999

FEDERAL DEPOSIT INSURANCE CORPORATION

BY: Mark S. Schmidt
Associate Director
Division of Supervision