**Community Development Investment Letter #2002-3**

May 3, 2002 **June 2004**

# 12 CFR 24

Ms. Edna R. Martinez

Branch President

First National Bank

301 S. Texas

Mercedes, Texas 78570

Dear Ms. Martinez:

This communication is in response to your letter of self-certification
received on January 25, 2002, and additional clarifications on March 28,
2002. First National Bank, Texas (the \"Bank\") made an equity
investment of \$173,206 in its wholly-owned subsidiary, First National
Group Community Development Corporation (the "FNGCDC"). The Bank
self-certifies that its investment in the FNGCDC is consistent with 12
U.S.C. § 24 (Eleventh) (the \"statute\") and 12 C.F.R. Part 24 (the
\"regulation\") concerning national bank community development
corporations, community development projects and other public welfare
investments.

The Bank's investment was used by FNGCDC to provide financing to Valley
Intervention Projects, Inc. (the "Corporation"), an entity that owns and
operates a charter school funded by the State of Texas. The Corporation
will use the financing from the FNGCDC to develop six portable buildings
in Harlingen, Texas, that will be used as classrooms. The Corporation
will use this facility to educate "at risk" students who are low- and
moderate-income and have exhibited behavioral or drug problems at other
schools. The State of Texas will continue to provide financing that
supports the on-going operation of the school.

The Bank formed the FNGCDC on July 30, 1999, after receiving the OCC\'s
approval that the corporation meets the requirements of the statute and
regulation. This new investment by the Bank is the FNGCDC is consistent
with FNGCDC's purpose to primarily benefit low- and moderate-income
persons low- and moderate-income areas, or other areas targeted by
federal, state, or local government. The investment also demonstrates
nonbank community involvement, including by the FNGCDC's having a
nonbank community representative on its board of directors.

The Bank's investment in the FNGCDC, and the aggregate amount of its
outstanding investments under the regulation, do not exceed **\[ \]**
percent of its unimpaired capital and surplus. The aggregate amount of
the Bank's outstanding investments may not exceed **\[ \]** percent of
its capital and surplus without prior, written approval by the OCC. In
no event shall the Bank's aggregate investments exceed 10 percent of its
unimpaired capital and surplus.

The response set forth in this letter is based on information and
representations provided to us by the Bank. Any change in the nature,
amount, or purpose of the Bank\'s investment, or in the purpose and
activities of the FNGCDC, could result in a different response being
rendered concerning the conformance of the Bank\'s investment with the
statute and the regulation.

If requested by the OCC, the Bank shall provide reports concerning its
investment in the FNGCDC and the FNGCDC's financial status, activities
and accomplishments. Copies of all reports submitted to the OCC shall
also be provided to the Deputy Comptroller, Southwestern District.

This response regarding the Bank\'s Part 24 investment 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 U.S., any agency or entity of the
U.S., or an officer or employee of the U.S., and does 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.

If you have any questions regarding this letter, please contact Karen
Bellesi, Manager, Community Development Investments, at (202) 874-4930.

Sincerely,

/s/ Barry Wides

Barry R. Wides

Director

Community Development Division

cc: Robert Gandy III, President, First National Bank, Texas