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| ## Comptroller of the Currency                                        |
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| > Administrator of National Banks                                     |
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Central District Office

One Financial Place, Suite 2700

440 South LaSalle Street

Chicago, Illinois 60605

#### Corporate Decision #2004-9

May 18, 2004 **June 2004**

Robert L. Freedman, P.C.

Silver, Freedman & Taff

1700 Wisconsin Ave., N.W.

Washington, D.C. 20007

Subject: Application to convert First Security Federal Savings Bank into
FSFSB, N.A.; Application to merge FSFSB, N.A. with and into MB Financial
Bank, N.A. under the title and charter of the latter. Charter Number
13684. Application Control Number: 2004-CE-02-003

Dear Mr. Freedman:

This is to inform you that as of the date of this letter the Office of
the Comptroller of the Currency ("OCC") approved the application to
convert First Security Federal Savings Bank, Chicago, Illinois ("FSB"),
into FSFSB, N.A., and retain its branches after the conversion, and the
application to merge FSFSB, N.A., with and into MB Financial Bank, N.A.,
Chicago, Illinois ("MBFB"), under the charter and title of the latter,
pursuant to the OCC's authority under 12 U.S.C. § 215a. The main office
of MBFB will continue to be the main office of the merged institution.
The OCC also approved MBFB's request for the resulting bank to retain
FSFSB, N.A.'s main office and branches, as well as MBFB's branches, as
branches after the merger under 12 U.S.C. § 36(b)(2).

MBFB is a wholly owned subsidiary of MB Financial, Inc. ("MB"), a
Maryland corporation and a financial holding company, headquartered in
Chicago, Illinois.[^1] FSB is a wholly owned subsidiary of First
SecurityFed Financial, Inc. ("FSFI"), a Delaware corporation and a
savings and loan holding company, also headquartered in Chicago,
Illinois. FSB has branch offices in Illinois and Pennsylvania. MBFB has
branch offices in Illinois. MB will acquire FSFI in a merger, with MB
the surviving corporation. After the expiration of a period of several
months following the holding company merger, FSB will first convert to a
national bank, FSFSB, N.A., and then on the same day merge into MBFB,
with MBFB the resulting bank ("Resulting Bank").

This approval is granted based on a thorough review of all information
available, including commitments and representations made in the
application and merger agreement and those of your representatives.

FSB, a federal savings bank, will convert into a national bank, with the
title of FSFSB, N.A., and retain its branches after the conversion. FSB
operates branches in Illinois, as well as a Pennsylvania branch, in
addition to its main office in Chicago. FSB is a member of the Savings
Association Insurance Fund.

FSB may convert into a national bank under the authority of both OCC and
the Office of Thrift Supervision regulations.[^2] OCC regulations
provide that a conversion will be permitted if the financial institution
can operate safely and soundly as a national bank and in compliance with
applicable laws. The regulation also provides for denial of the
application if certain circumstances are present. Our review shows that
all requirements for approval have been met, and there is no basis upon
which a denial must be issued.

FSFSB, N.A., also may retain the Illinois branches, as well as the
interstate branch in Pennsylvania, under the authority of the
Gramm-Leach- Bliley Act. 12 U.S.C. § 1465(i)(5).[^3] This provision
permits a national bank resulting from the conversion of a federal
savings association to retain its branches without regard to the
geographic branching limits generally governing national bank
branching,[^4] provided the federal savings association is covered by
the provision and the national bank resulting from the conversion meets
the listed requirements.[^5] FSB is covered by section 1465(i)(5) since
it was chartered and in operation before the date of enactment of the
Gramm-Leach-Bliley Act, and it had branches in operation in one or more
states before such date. The OCC has determined that FSFSB, N.A., the
national bank resulting from this conversion, will meet all applicable
financial, management, and capital requirements, and that it will meet
the capital requirements for branches contained in 12 U.S.C. § 36(c).
Thus, FSB may convert into FSFSB, N.A., which may then retain all
branches of FSB, including the branch in Pennsylvania.[^6]

The merger of FSFSB, N.A., into MBFB also is permissible under federal
law. In this case, both banks have the same home state although FSFSB,
N.A., is an interstate bank because of its Pennsylvania branch. Thus,
while this merger includes an interstate bank, and an interstate
resulting bank, it does not come under the interstate merger provisions
of 12 U.S.C. 1831u because it is not a merger between banks with
different home states.[^7] Rather, a merger between an already existing
national bank and another national bank in one of the states in which
the interstate bank has offices is authorized under 12 U.S.C § 215a.[^8]
Because FSFSB, N.A., and MBFB are located in Illinois, the merger is
authorized under section 215a.[^9]

The Resulting Bank may retain and operate the main office and branches
of FSFSB, N.A., as well as the branches of MBFB held prior to the
merger, pursuant to 12 U.S.C. § 36(b)(2). Section 36(b)(2) applies
different standards for a resulting bank's retention of the main office
and branches of the bank being acquired in the merger (the target bank)
and for its retention of the branches of the bank under whose charter
the merger is effected (the acquiring bank).[^10] Under that section, a
resulting bank may retain the branches or the main office of the target
bank in a merger transaction if the resulting bank could establish them
as new branches of the resulting bank under section 36(c). For branching
purposes under section 36(c), a national bank is situated in any state
in which it has a branch or main office. The OCC previously has
concluded that, for section 36(b) purposes, the resulting bank is
situated in all the states in which the participating banks were
situated in order to then apply the section 36(b)(2)(A) and 36(c)
standard for the retention of the target bank's branch, using applicable
state law for the retention of branches for the branches in that state.
In essence, when an interstate national bank merges with another
national bank in the same home state, the resulting bank is authorized
to continue to operate its predecessor banks' branches, including
interstate branches, provided the retention was permitted under section
36(c) and no other federal law requires otherwise.[^11]

The Resulting Bank here is situated in both Illinois and Pennsylvania
and may retain as branches, FSFSB, N.A.'s main office and branches in
the same way that other national banks situated in each state could
retain branches in that state in a merger there under section
36(b)(2)(A) and 36(c). Both Illinois and Pennsylvania permit their
state-chartered banks to acquire branches in a merger, or to establish
branches *de novo,* without geographic limit within the state.[^12]
Thus, a national bank situated in Illinois could acquire in a merger,
and retain as branches under sections 36(b)(2)(A) and 36(c), the
locations of FSFSB, N.A.'s main office and branches in Illinois; and a
national bank situated in Pennsylvania could acquire in a merger, and
retain as branches under section 36(b)(2)(A) and 36(c), the locations of
FSFSB, N.A.'s branch in Pennsylvania. Therefore, the Resulting Bank may
retain FSFSB, N.A.'s main office and its branches as branches under
section 36(b)(2)(A) and 36(c).

Similarly, the Resulting Bank may retain and operate as a branch, any
branch MBFB, the acquiring bank, had before the merger unless state law
would prohibit a state bank from retaining such branches, under section
36(b)(2)(C). Here, MBFB's branches are all in Illinois. There is no
provision in Illinois law prohibiting an Illinois state-chartered bank,
following a merger with another state bank in that state, from retaining
its own similarly situated branches in the state. Therefore, the
Resulting Bank may retain the branches of MBFB under section
36(b)(2)(C).

Accordingly, the Resulting Bank may retain and operate as branches the
main office and branches of FSFSB, N.A., and the branches of MBFB.

This merger also must be reviewed under the Oakar amendment to the
Federal Deposit Insurance Act because the institutions involved are
members of different deposit insurance funds.[^13] MBFB, a BIF member,
may acquire FSFSB, N.A., which will continue to be a SAIF member
depository institution after the conversion, if permissible under the
Oakar amendment. An Oakar transaction must result in an institution that
meets all applicable capital requirements upon consummation. All capital
requirements have been met in this transaction, and no other Oakar
requirements are applicable.[^14]

The OCC also reviewed the proposed merger under the criteria of the Bank
Merger Act, 12 U.S.C. § 1828(c), the Community Reinvestment Act (12
U.S.C. § 2901, *et seq.),* and applicable OCC regulations and policies.
Among other matters, the OCC found that the proposed transaction would
not have any anticompetitive effects. The OCC also considered the
financial and managerial resources of the banks, future prospects, and
the convenience and needs of the communities to be served. In addition,
the Bank Merger Act requires the OCC to consider "the effectiveness of
any insured depository institution involved in the proposed merger
transaction in combating money laundering activities, including overseas
branches." 12 U.S.C. § 1828(c)(11). The OCC considered this factor and
believes the approval of this transaction is consistent with that
statutory provision.

With respect to the Community Reinvestment Act ("CRA"), the OCC takes
into account the applicant's record of helping to meet the credit needs
of its entire community, including low- and moderate-income
neighborhoods, when evaluating certain applications, including
transactions subject to the Bank Merger Act.[^15] The OCC's review
revealed no evidence that the applicants' records of helping to meet the
credit needs of their communities, including low- and moderate-income
neighborhoods, are less than satisfactory.

For the reasons set forth above, the OCC found that the transaction met
the relevant statutory criteria for approval. Inasmuch as the
transaction also did not raise supervisory or policy concerns, the
application was approved.

This letter also constitutes official OCC authorization to operate the
main office and branches of First Security Federal Savings Bank as
branches of FSFSB, N.A. Please retain this letter as the official branch
authorization.

As a reminder, the Western District Office must be advised in writing 10
days in advance of the desired effective date for the merger so that the
OCC may issue the necessary certification. You should also certify that
all the steps required to convert FSB into a national banking
association have been met.

The OCC will issue a letter certifying consummation of the merger
transaction when we receive:

1.  A Secretary's Certificate for each institution, certifying that a
    majority of the board of directors approved the merger.

2.  An executed merger agreement with Articles of Association for the
    resulting bank attached.

3.  A Secretary's Certificate from each institution, certifying that the
    shareholder approvals have been obtained.

4.  Evidence that all required regulatory approvals have been received.

This approval, and the activities and communications by OCC employees in
connection with the filing, do not constitute a contract, express or
implied, or any other obligation binding upon the OCC, the United States
of America, any agency or entity of the U.S., or any officer or employee
of the U.S., and do not affect the ability of the OCC to exercise its
supervisory, regulatory, and examination authorities under applicable
law and regulations. The foregoing may not be waived or modified by any
employee or agent of the OCC or the U.S.

All correspondence and documents concerning this transaction should be
directed to Senior Licensing Analyst Geryl Race in our Western District
Office at 720-475-7656. I have enclosed a separate letter requesting
your feedback on how the OCC handled your application. We would
appreciate your response so we may improve our service.

Sincerely,

**-signed-**

David Rogers

Licensing Manager

Central District Office

[^1]: In addition to MBFB, MB holds one other bank subsidiary, Union
    Bank, National Association, Oklahoma City, Oklahoma. Union Bank is
    not involved in the holding company or bank mergers.

[^2]: 12 C.F.R. § 5.24; 12 C.F.R. § 552.2-7.

[^3]: Section 1465 provides that "Any Federal savings association
    chartered and in operation before the date of enactment of the
    Gramm-Leach-Bliley Act, with branches in operation before such date
    of enactment in 1 or more States, may convert, at its option, with
    the approval of the Comptroller of the Currency or the appropriate
    State Bank supervisor, into 1 or more national or State banks, each
    of which may encompass 1 or more of the branches of the Federal
    savings association in operation before such date of enactment in 1
    or more States, but only if each resulting national or State bank
    will meet all financial, management, and capital requirements
    applicable to the resulting national or State bank."

[^4]: *See* 12 U.S.C. § 36.

[^5]: *See* Decision of the Office of the Comptroller of the Currency on
    Applications Involving Family Bank, FSB, Haverhill, Massachusetts;
    First Massachusetts Bank, N.A., Worcester, Massachusetts; Bank of
    New Hampshire, Manchester, New Hampshire; Farmington National Bank,
    Farmington, New Hampshire; Granite Savings Bank and Trust Company,
    Barre, Vermont; The Howard Bank, N.A., Burlington, Vermont; Franklin
    Lamoille Bank, St. Albans, Vermont; and First Vermont Bank and Trust
    Company, Brattleboro, Vermont (OCC Corporate Decision No. 2000-03
    (March 8, 2000)) ("Family Bank Decision").

[^6]: To the extent permitted by law, the Pennsylvania branch of FSB
    will be operated under the trade name "First Security Bank -- a
    branch of MB Financial Bank, N.A." for a transition period of not
    less than one year after the merger is effective.

[^7]: Section 1831u was added by section 102(a) of the Riegle-Neal
    Interstate Banking and Branching Efficiency Act of 1994 (Riegle-Neal
    Act).

[^8]: The Family Bank Decision, *supra* note 5, contains citations to
    other OCC decisions involving interstate banks that are not subject
    to section 1831u.

[^9]: FSB's subsidiary, Western Security Service Corporation (WSSC),
    engages solely in sales of credit, life, mortgage and disability
    insurance (but not underwriting insurance). A financial subsidiary
    notice will be filed with the OCC in order for WSSC to become a
    financial subsidiary of FSFSB, N.A., and then of MBFB.

[^10]: *See* the Family Bank Decision for a detailed discussion of
    section 36(b)(2).

[^11]: *See* Decision on the Application of State Savings Bank,
    Southington, Connecticut, to Convert into a National Banking
    Association and Merge into Connecticut National Bank, Harford,
    Connecticut (OCC Merger Decision No. 91-07, April 8, 1991). While
    decided prior to the Riegle-Neal Act, this decision has been applied
    in many subsequent decisions involving interstate banks after the
    Riegle-Neal Act. *See* Family Bank Decision, note 14.

[^12]: *See* 205 ILCS § 5/15(15); Pa. Stat. Ann. Tit. 7, §§ 103, 904.

[^13]: 12 U.S.C. § 1815(d)(3). Transactions subject to this provision
    are known as Oakar transactions.

[^14]: An Oakar transaction also must be reviewed by considering the
    home state of the bank holding company making the acquisition and
    that of the target SAIF member in order to determine whether the
    transaction is consistent with the interstate restrictions of Oakar.
    Here, MB Financial, Inc. is located in Chicago, Illinois. FSFSB,
    N.A. also is located in Chicago, Illinois. Thus, this transaction
    does not raise the interstate requirements of Oakar. After the
    merger, the Resulting Bank's deposits will be proportionately
    insured by each respective insurance fund. *See, e.g.* Decision of
    the Comptroller of the Currency to Approve Applications by First
    Bank National Association, Minneapolis, Minnesota to Acquire First
    Bank, F.S.B., Fargo, North Dakota and to Engage in Certain Related
    Transactions (Corporate Decision No. 97-32 (May 31, 1997)). The
    existence of FSFSB's interstate branch in Pennsylvania does not
    change the result that the home state here is Illinois. *See, e.g.*
    Federal Reserve System Order regarding Bank of America Corporation,
    Charlotte, North Carolina, FleetBoston Financial Corporation,
    Boston, Massachusetts (March 8, 2004).

[^15]: *See* 12 U.S.C. § 2903; 12 C.F.R. § 25.29(a).