State Farm Financial Services, Federal Savings Bank (Proposed)
IN RE: State Farm Financial Services, Federal Savings Bank (Proposed)
Bloomington, McLean County, Illinois
Application for Federal Deposit Insurance
(Savings Association Insurance Fund)
ORDER
The undersigned, acting under delegated authority, has fully considered all 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 State Farm Financial
Services, Federal Savings Bank (the bank), a proposed new full-service federal savings
bank to be located at One State Farm Plaza, Bloomington, McLean County, Illinois, 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 $104,000,000 be provided, and
that a ratio of Tier I Leverage Capital ratio of not less than eight percent shall be
maintained throughout 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 stock,
will render this commitment null and void unless such proposal is approved by the Regional
Director of the FDIC's Chicago Regional Office (Regional Director) prior to opening of the
bank;
3. That federal deposit insurance shall not become effective unless 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;
4. That State Farm Mutual Automobile Insurance Company, Bloomington, Illinois, an
insurance and financial services holding company, obtain approval from. the Office of
Thrift Supervision to acquire voting stock control of the bank prior to its opening;
5. 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
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 17th day of November, 1998.
FEDERAL DEPOSIT INSURANCE CORPORATION
Mark S. Schmidt
Associate Director
Division of Supervision
FEDERAL DEPOSIT INSURANCE CORPORATION
IN RE: State Farm Financial Services, Federal Savings Bank
Bloomington, McLean County, Illinois
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 State Farm Financial Services,
Federal Savings Bank (the bank), a proposed new federal savings bank to be located at One
State Farm Plaza, Bloomington, Illinois.
The bank's sole shareholder will be State Farm Mutual Automobile Insurance Company
(State Farm). State Farm is headquartered in Bloomington, Illinois, and has twenty-seven
regional offices located throughout the United States. State Farm is a multiple line
insurance provider, but is dominant in personal lines of insurance. State Farm is the
largest insurer of automobiles and homes in the United States, having approximately 68,000
employees and 16,600 agents.
The bank will, by virtue of having a federal savings bank charter, be able to exercise
full banking services in all 50 states and the District of Columbia. The bank's business
plan is to provide traditional deposit and loan products; however, it will be
nontraditional in handling customer transactions. No teller or lobby services will be
provided. Transactions will be conducted via direct deposit, automated teller machines,
Internet banking, telephone, or U.S. mail. The bank will also offer credit and debit
cards. State Farm's insurance agent network will be exploited to advertise the
availability of these banking services and to assist potential customers in establishing
relationships with the bank.
For the 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.
The Greenlining Institute filed a protest of the proposal relative to State Farm's
performance in low and moderate-income areas. The Corporation has considered the comments
submitted and has concluded that the issues raised have been favorably resolved between
the applicant, the primary regulator, and the Protestant.
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
