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Decisions on Bank Applications

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BankBlackwell, FSB (Proposed)

FEDERAL DEPOSIT INSURANCE CORPORATION

Re: BankBlackwell, FSB (Proposed)
Boston, Suffolk County, Massachusetts
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 BankBlackwell, FSB (the Bank), a proposed new federal savings bank to be located at 580 Harrison Avenue, Boston, Suffolk County, Massachusetts, 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 $16,500,000 be provided;

2. That the Tier 1 capital to assets leverage ratio (as defined in the Federal Deposit Insurance Corporation's capital regulation) will be maintained at not less than 10 percent throughout the first three years of operation and that an adequate allowance for loan and lease losses will be provided;

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 New York Regional Office (Regional Director) prior to the opening of the Bank;

4. That, on an ongoing basis, the Bank will notify and seek the prior approval of the Regional Director and its primary Federal regulator of any proposed material change to its operations including, but not limited to, the business plan 60 days before consummation of the change.

5. Prior to the effective date of Federal deposit insurance, the Bank shall provide to the Regional Director a copy of a legally binding written commitment with a qualified third-party vendor to provide back-up software maintenance support for the Bank's Teknowledge software in the event that Teknowledge Corporation's financial condition does not improve to eliminate uncertainty regarding its viability as a going concern. Further, the Bank shall revise its Vender Loss Contingency Plan, which is contained within the Bank's Vendor Management Policy, to sufficiently delineate the Bank's long- term solution (e.g., evaluation and implementation of alternative software solutions) in the event that Teknowledge Corporation ceases operations;

6. That an accrual accounting system will be adopted for maintaining the bank's books;

7. That, prior to the effective date of Federal deposit insurance, the Bank shall obtain fidelity bond coverage in a sufficient amount to conform to generally accepted banking practices;

8. 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 Federal Authority;

9. 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

10. 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 18th day of August 2005.

FEDERAL DEPOSIT INSURANCE CORPORATION

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


FEDERAL DEPOSIT INSURANCE CORPORATION

In Re: BankBlackwell, FSB (Proposed)
Boston, Suffolk County, Massachusetts
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 by BankBlackwell, FSB (the Bank), a proposed new federal savings bank to be located at 580 Harrison Avenue, Boston, Suffolk County, Massachusetts.

The applicant has committed to raising $16.5 million in capital through a public common stock offering. The stock is expected to be widely held with a minimum subscription of 100 shares.

The Bank is proposed as an African American Internet-only institution serving primarily the African American community nationwide. The proponents seek to establish BankBlackwell as the preferred provider of savings and real estate loan products to online African Americans. Additional delivery systems will include a 24-hour call center and banking by mail.

For purposes of this proposal, the investment in fixed assets is reasonable, capital is adequate, 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 formal objections to this proposal have been filed and no undue risk to the Savings Association Insurance Fund is apparent.

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

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



Last Updated 03/24/2011 Legal@fdic.gov