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Cornerstone Federal Bank

FEDERAL DEPOSIT INSURANCE CORPORATION

IN RE: Cornerstone Federal Bank
Troy, Oakland County, Michigan
Application for Federal Deposit Insurance

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 (Savings Association Insurance Fund) for Cornerstone Federal Bank, a proposed new bank to be located at 2701 Troy Center Drive, Suite 460, Troy, Michigan and has concluded that the application should be approved.

Accordingly, it is hereby ORDERED, that the application submitted by Cornerstone Federal Bank for Federal Deposit Insurance (Savings Association Insurance Fund) be and the same hereby is approved subject to the following conditions:

(1) That beginning paid-in capital funds of not less than $6,250,000 be provided;

(2) That a Tier 1 capital to total assets ratio of not less than 12% be maintained for the first three years after deposit insurance is effective. However, if four consecutive quarters of profitability, excluding extraordinary items, are achieved during the first three years of operation, Cornerstone Federal Bank may request that the FDIC lower the required Tier 1 capital to total assets ratio to not less than 10% during the remainder of the first three years of operation;

(3) Prior to opening for business, the bank will hire a qualified controller, subject to review and approval by the FDIC. This individual will have broad experience in bank management, including at least 5 years of responsibility for oversight of a bank's liquidity, investment portfolio and interest rate risk. The controller will have expertise with interest rate risk modeling and measurement techniques, and will have demonstrated the capability to build and maintain a bank's deposit base;

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

(5) That the bank shall operate within the parameters of the business plan submitted to the FDIC. Furthermore, during the first three years of operations, the bank shall notify to the FDIC's Chicago Regional Director of any proposed major deviation or material change from the submitted plan 30 days before consummation of the change;

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

(7) That adequate blanket bond coverage be obtained;

(8) That full disclosure has been made to all proposed directors and stockholders of the facts concerning the interest of any insider (one who is, or stands to be, a director, an officer, or an incorporator of an applicant or shareholder who directly or indirectly controls 10% or more of any class of the applicant's outstanding voting stock, or the associates and interests of any such person) in any transaction being effected or then contemplated, including the identity of the parties to the transaction, and the terms and costs involved;

(9) 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;

(10) 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 2000

FEDERAL DEPOSIT INSURANCE CORPORATION

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


FEDERAL DEPOSIT INSURANCE CORPORATION

IN RE: Cornerstone Federal Bank
Troy, Oakland County, Michigan
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 Cornerstone Federal Bank, (Cornerstone), a proposed new bank to be located at 2701 Troy Center Drive, Suite 460, Troy, Michigan.

Cornerstone will be a federal savings bank (SAIF Insurance fund). Loans will be sought via a combination of targeted direct marketing, including print ads, radio, direct mail, and in-bound telemarketing. Cornerstone Federal will originate and service first and second lien residential real estate loans. While the bank's primary market is defined as the Detroit MSA, loans and deposits will be solicited throughout Michigan, Wisconsin, Indiana and Ohio.

For the purposes of this proposal, the investment in fixed assets is reasonable and capital is adequate. Future earnings prospects are attainable, and management is considered satisfactory. No formal objections to this application have been filed with the FDIC. Corporate powers to be exercised are consistent with the purpose of the Federal Deposit Insurance Act. Risk to the Savings Insurance Fund is mitigated by the requirements of higher capital levels and the addition of experienced senior management.

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

ASSOCIATE DIRECTOR
DIVISION OF SUPERVISION
FEDERAL DEPOSIT INSURANCE CORPORATION



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