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FEDERAL DEPOSIT INSURANCE CORPORATION

In Re: Magnet Bank (Proposed)
Salt Lake City, Salt Lake County, Utah
Application for Federal Deposit Insurance
(Bank 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 Magnet Bank (the Bank), a proposed new state-chartered industrial bank to be located at 2825 East Cottonwood Parkway, Suite 180, Salt Lake City, Salt Lake County, Utah, 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 $60,000,000 be provided.

2. That the institution's ratio of Tier 1 leverage capital to total assets (as defined in Part 325 of the FDIC's Rules and Regulations) shall be maintained at not less than eight percent throughout the first three years of operation and that an adequate allowance for loan and lease losses shall be provided.

3. That any changes in proposed management or the proposed ownership of 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 San Francisco Regional Office (Regional Director) prior to opening.

4. That an accrual accounting system shall be adopted for maintaining the financial records of the institution.

5. That Federal deposit insurance shall not become effective until the applicant has been granted a charter and authority to conduct a banking business, and that its establishment and operation as a State industrial bank have been fully approved by the appropriate State authority.

6. That prior to the effective date of Federal deposit insurance, the institution shall obtain surety bond coverage in a sufficient amount to conform to generally accepted banking practices.

7. The institution shall obtain an audit of its financial statements by an independent public accountant annually for at least the first three years after deposit insurance is effective and shall submit to the Regional Director, (i) a copy of the audited annual financial statements and the independent public auditor's report thereon within 90 days after the end of the depository institution's fiscal year, (ii) a copy of any other reports by the independent auditor (including any management letters) within 15 days after their receipt by the institution, and (iii) written notification within 15 days when a change in the institution's independent auditor occurs.

8. The institution shall operate within the parameters of the business plan submitted to the FDIC as part of the application for deposit insurance. During the first three years of operation, the bank shall notify the Regional Director of any proposed major deviation or material change from the submitted plan 60 days before consummating the change.

9. Until the bank is established, the Corporation shall have the right to alter, suspend, or withdraw the said commitment should any interim development warrant such action.

10. 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 Regional Director, the consent granted herein shall expire at the end of the said twelve-month period.

Dated at Washington, D.C. this 18th day of May 2005.

FEDERAL DEPOSIT INSURANCE CORPORATION

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


FEDERAL DEPOSIT INSURANCE CORPORATION

In Re: Magnet Bank (Proposed)
Salt Lake City, Salt Lake County, Utah
Application for Federal Deposit Insurance
(Bank 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 has been filed for Magnet Bank (the Bank), a proposed new state-chartered industrial bank, to be located at 2825 East Cottonwood Parkway, Suite 180, Salt Lake City, Salt Lake County, Utah.

The Bank will extend credit primarily to commercial entities in Utah and in various other states upon the establishment of loan production offices. The Bank will not offer checking accounts or accept demand deposits. The Bank will be owned by a number of individuals and there will be no holding company.

For the purposes of this proposal, capital is adequate, projections for future earnings prospects are favorable, management is considered satisfactory, and the investment in fixed assets is reasonable. 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 insurance fund is apparent.

Accordingly, based upon careful evaluation of all available facts and information, the Associate Director, acting under delegated authority, has concluded that approval of the application is warranted, subject to certain prudential conditions.

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



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