# O

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

1225 17^th^ Street, Suite 300

Denver, CO 80202-5534

**Corporate Decision #2005-09**

**July 2005**

June 29, 2005

Scott H. Richter

LeClair Ryan

Riverfront Plaza, East Tower

951 East Byrd Street

Richmond, Virginia 23218-2499

Re: Agreement By and Between T. Coleman Andrews, III, Geoffrey Scott
Rehnert, and Marc Brian Wolpow and the Office of the Comptroller of the
Currency and

Agreement By and Between American National Bank of Rock Springs, Rock
Springs, Wyoming, and the Office of the Comptroller of the Currency

Dear Mr. Richter:

We understand that the Federal Reserve Bank of Kansas City (FRB of
Kansas City) approved a Notification of Change in Control filed by T.
Coleman Andrews, III, Geoffrey Scott Rehnert, Marc Brian Wolpow, and
other individuals to acquire 99.8 percent of the outstanding shares of
Rock Springs American Bancorporation, Inc., Rock Springs, Wyoming,
parent of American National Bank of Rock Springs, Rock Springs, Wyoming.
We understand that this transaction was consummated on June 23, 2005.

As part of the process of reviewing and acting on notifications
involving national banks, the FRB of Kansas City requested and received
comments from the Office of the Comptroller of the Currency. The
enclosed Agreements have been executed. As you are aware, the Agreements
are construed to be "written agreements" within the meaning of 12 U.S.C.
§ 1818 and, as such, are enforceable under law. We enclose originals of
the Agreements for the Bank's records.

If you have any questions, please contact Special Counsel June Hinson
Allen at (720) 475-7630 or me at (720) 475-7650.

Sincerely,

/s/

Louis T. Gittleman

Acting Director for District Licensing

Enclosures

ACN 2005 WE 12 0111

##### 

##### AGREEMENT BY AND BETWEEN

**T. Coleman Andrews, III, Geoffrey Scott Rehnert, and Marc Brian
Wolpow,**

**and**

**The Office of the Comptroller of the Currency**

WHEREAS, pursuant to 12 U.S.C. § 1817(j), any person acting directly or
indirectly, or through or in concert with one or more person, shall give
the Board of Governors of the Federal Reserve System (Board of
Governors) sixty (60) days' written notice before acquiring control of a
bank holding company;

WHEREAS, on or about April 19, 2005, T. Coleman Andrews, III, Geoffrey
Scott Rehnert, Marc Brian Wolpow, and other individuals filed a Notice
of Change in Bank Control ("Notice") with the Federal Reserve Bank of
Kansas City proposing to acquire 99.8 percent of the outstanding shares
of Rock Springs American Bancorporation, Inc., Rock Springs, Wyoming
("Holding Company") and to thereby indirectly acquire control of
American National Bank of Rock Springs, Rock Springs, Wyoming ("Bank");

WHEREAS, if the Board of Governors does not issue a notice disapproving
the aforementioned acquisition of control of the Holding Company and if
the aforementioned acquisition of control of the Holding Company is
consummated, T. Coleman Andrews, III, Geoffrey Scott Rehnert, and Marc
Brian Wolpow ("Controlling Shareholders") will collectively own more
than 51% of the voting shares of the Holding Company and will thereby
indirectly control the Bank;

WHEREAS, if the Board of Governors does not issue a notice disapproving
the Controlling Shareholders' acquisition of control of the Holding
Company, and the Controlling Shareholders were to subsequently acquire
control of the Holding Company, and thereby indirectly acquire control
of the Bank, the Controlling Shareholders and the Acting Comptroller
("Comptroller") seek to protect the interests of the Bank's depositors
and other customers and seek to ensure that the Bank will operate safely
and soundly and in accordance with all applicable laws, rules, and
regulations;

NOW, THEREFORE, in consideration of the above premises, the Controlling
Shareholders agree as follows:

ARTICLE I

#### JURISDICTION

\(1\) Each Controlling Shareholder is individually deemed to be an
"institutional-affiliated party" ("IAP") within the meaning of 12 U.S.C.
§ 1813(u)(3).

\(2\) This Agreement shall be construed to be a "written agreement
entered into with the agency" within the meaning of 12 U.S.C.
§§ ** **1818(b)(1).

\(3\) This Agreement shall be construed to be a "written agreement"
within the meaning of 12 U.S.C. § 1818(u)(1)(A).

\(4\) This Agreement shall not be construed to be a "written agreement,
order, or capital directive" within the meaning of 12 C.F.R. § 6.4.

\(5\) This Agreement shall not be construed to be a "formal written
agreement" within the meaning of 12 C.F.R. § 5.3(g)(4).

\(6\) All correspondence related to this Agreement, and any information,
documentation, reports, plans and/or other written submissions that
Controlling Shareholders have agreed to submit pursuant to this
Agreement shall be forwarded, by overnight mail, to:

H. Gene Robinson

Office of the Comptroller of the Currency

Assistant Deputy Comptroller

Salt Lake City Field Office

2795 E. Cottonwood Parkway, Suite 390

Salt Lake City, Utah 84121

#### ARTICLE II 

#### 

#### AGREEMENT TO BE ENTERED INTO

#### BETWEEN THE BANK AND THE COMPTROLLER

\(1\) If the Board of Governors does not issue a notice disapproving the
Controlling Shareholders' acquisition of control of the Holding Company,
no later than three (3) business days after the Controlling Shareholders
acquire control of the Holding Company, and therefore acquire indirect
control of the Bank, the Controlling Shareholders shall cause the Bank
to enter into a written agreement with the Office of the Comptroller of
the Currency ("OCC") on terms and provisions acceptable to the OCC. This
written agreement between the Bank and the OCC shall require, among
other things, that the Bank shall not significantly deviate from or
change the business, structure, operations, policies, procedures, and
products of the Bank that existed at the time the Controlling
Shareholders agreed to acquire the Holding Company, and thereby agreed
to indirectly acquire control of the Bank, without first obtaining the
OCC's written determination of no supervisory objection to such
significant deviation or change, that the Bank shall submit a Business
Plan acceptable to the OCC, that the Bank shall implement and adhere to
the Business Plan once accepted by the OCC, and that subsequent to
implementation of the Business Plan the Bank shall not significantly
deviate from the Business Plan without receiving a prior written
determination of no supervisory objection from the OCC.

\(2\) For the purposes of the Article, the phrase "significantly
deviate" shall be construed in light of the guidance provided in
Appendix G (Significant Deviations After Opening) of the "Charters"
booklet of the *Comptroller's Licensing Manual* (April 2004).

ARTICLE III

#### TERM OF AGREEMENT

\(1\) This Agreement shall become effective immediately upon its
execution by all parties hereto (Effective Date), and shall remain in
full force and effect until such time as the written agreement between
the Bank and the OCC required by Article II (1) of this Agreement
becomes effective and enforceable. This Agreement shall terminate and be
of no further force or effect when the written agreement between the
Bank and the OCC required by Article II (1) of this Agreement becomes
effective and enforceable.

ARTICLE IV

#### CONCLUDING PROVISIONS

\(1\) It is expressly and clearly understood that if, at any time, the
Comptroller deems it appropriate in fulfilling the responsibilities
placed upon her by the several laws of the United States of America to
undertake any action affecting the Bank, nothing in this Agreement shall
in any way inhibit, estop, bar, or otherwise prevent the Comptroller
from so doing.

\(2\) Any time limitations imposed by this Agreement shall begin to run
from the Effective Date of this Agreement. Such time requirements may be
extended in writing by the Comptroller or her duly authorized
representative for good cause upon written application by the
Controlling Shareholders.

\(3\) The provisions of this Agreement shall be effective upon execution
by the parties hereto and its provisions shall continue in full force
and effect unless or until such provisions are: (1) amended in writing
by mutual consent of the parties to the Agreement; (2) excepted, waived,
or terminated in writing by the Comptroller; or (3) the written
agreement between the Bank and the OCC required by Article II (1) of
this Agreement becomes effective and enforceable.

\(4\) This Agreement is intended, and shall be construed to be a
supervisory "written agreement entered into with the agency" as
contemplated by 12 U.S.C. § 1818(b)(1), and expressly does not form, and
may not be construed to form, a contract binding on the OCC or the
United States. Notwithstanding the absence of mutuality of obligation,
or of consideration, or of a contract, the OCC may enforce any of the
commitments or obligations herein undertaken by the Controlling
Shareholders under its supervisory powers, including 12 U.S.C.
§ 1818(b)(1), and not as a matter of contract law. The Controlling
Shareholders expressly acknowledge that neither they, nor the OCC has
any intention to enter into a contract. The Controlling Shareholders
also expressly acknowledge that no OCC officer or employee has statutory
or other authority to bind the United States, the U.S. Treasury
Department, the OCC, or any other federal bank regulatory agency or
entity, or any officer or employee of any of those entities to a
contract affecting the OCC's exercise of its supervisory
responsibilities. The terms of this Agreement, including this paragraph,
are not subject to amendment or modification by any extraneous
expression, prior agreements or arrangements, or negotiations between
the parties, whether oral or written.

IN TESTIMONY WHEREOF, the undersigned, authorized by the Comptroller,
has hereunto set her hand on behalf of the Comptroller.

/s/ 6/15/05

+---------------------------------------+------+-----------------------+
| Kay E. Kowitt                         |      | Date                  |
|                                       |      |                       |
| Office of the Comptroller of the      |      |                       |
| Currency                              |      |                       |
|                                       |      |                       |
| Deputy Comptroller                    |      |                       |
|                                       |      |                       |
| Western District Office               |      |                       |
+---------------------------------------+------+-----------------------+

> IN TESTIMONY WHEREOF, the undersigned, has hereunto set their hands.

/s/ 6-14-05

+---------------------------------------+------+-----------------------+
| T. Coleman Andrews, III               |      | Date                  |
|                                       |      |                       |
| /s/                                   |      | 6-14-05               |
+---------------------------------------+------+-----------------------+

Geoffrey Scott Rehnert Date

/s/ 6-14-05

  ---------------------------------------- ------- -----------------------
  Marc Brian Wolpow                                Date

  ---------------------------------------- ------- -----------------------

**AGREEMENT BY AND BETWEEN**

**American National Bank of Rock Springs**

**Rock Springs, Wyoming**

**and**

**The Office of the Comptroller of the Currency**

WHEREAS, pursuant to 12 U.S.C. § 1817(j), any person acting directly or
indirectly, or through or in concert with one or more person, shall give
the Board of Governors of the Federal Reserve System (Board of
Governors) sixty (60) days' written notice before acquiring control of a
bank holding company;

WHEREAS, on or about April 19, 2005, T. Coleman Andrews, III, Geoffrey
Scott Rehnert, Marc Brian Wolpow, and other individuals filed a Notice
of Change in Bank Control ("Notice") with the Federal Reserve Bank of
Kansas City proposing to acquire 99.8 percent of the outstanding shares
of Rock Springs American Bancorporation, Inc., Rock Springs, Wyoming
("Holding Company") and to thereby indirectly acquire control of
American National Bank of Rock Springs, Rock Springs, Wyoming ("Bank");

WHEREAS, if the Board of Governors does not issue a notice disapproving
the aforementioned acquisition of control of the Holding Company and if
the aforementioned acquisition of control of the Holding Company is
consummated, T. Coleman Andrews, III, Geoffrey Scott Rehnert, and Marc
Brian Wolpow ("Controlling Shareholders") will collectively own more
than 51% of the voting shares of the Holding Company and will thereby
indirectly control the Bank;

WHEREAS, in order to address the Office of the Comptroller of the
Currency's ("OCC's") concerns, the Controlling Shareholders and the
Acting Comptroller ("Comptroller") entered into an Agreement on June 15,
2005, which specified, [inter]{.underline} [alia]{.underline}, that, no
later than three (3) business days after Controlling Shareholders
acquired control of the Holding Company, and therefore acquired indirect
control of the Bank, the Controlling Shareholders would cause the Bank
to enter into a written Agreement with the OCC requiring, among other
things, that the Bank shall submit a Business Plan acceptable to the
OCC, that the Bank shall implement and adhere to the Business Plan once
accepted by the OCC, and that subsequent to implementation of the
Business Plan the Bank shall not significantly deviate from the Business
Plan without receiving a prior written determination of no supervisory
objection from the OCC;

WHEREAS, the Bank and the Comptroller seek to ensure that the Bank will
operate in a safe and sound manner and in accordance with all applicable
laws, rules, and regulations;

NOW, THEREFORE, the OCC and the Bank, by and through its duly elected
Board of Directors (Board), agree as follows:

ARTICLE I

[JURISDICTION]{.underline}

1.  This Agreement shall be construed to be a "written agreement entered
    into with the agency" within the meaning of 12 U.S.C.
    §** **1818(b)(1).

2.  This Agreement shall be construed to be a "written agreement between
    such depository institution and such agency" within the meaning of
    12 U.S.C. §§ 1818(e)(1) and 1818(i)(2).

    \(3\) This Agreement shall not be construed to be a "formal written
    agreement" within the meaning of 12 C.F.R. § 5.3(g)(4).

    \(4\) This Agreement shall be construed to be a "written agreement"
    within the meaning of 12 U.S.C. § 1818(u)(1)(A).

    \(5\) This Agreement shall not be construed to be a "written
    agreement, order, or capital directive" within the meaning of
    12 C.F.R. § 6.4.

    \(6\) All correspondence related to this Agreement, and any
    information, documentation, reports, plans and/or other written
    submissions which the Bank or Board has agreed to submit pursuant to
    this Agreement shall be forwarded, by overnight mail, to:

> H. Gene Robinson
>
> Office of the Comptroller of the Currency
>
> Assistant Deputy Comptroller
>
> Salt Lake City Field Office
>
> 2795 E. Cottonwood Parkway, Suite 390
>
> Salt Lake City, Utah 84121

ARTICLE II

[SIGNIFICANT DEVIATION FROM, OR CHANGE TO, THE BUSINESS
PLAN]{.underline}

\(1\) The Bank shall not significantly deviate from or change the
business, structure, operations, policies, procedures, and products of
the Bank that existed at the time the Controlling Shareholders agreed to
acquire the Holding Company, and thereby agreed to indirectly acquire
control of the Bank, without first obtaining the OCC's written
determination of no supervisory objection to such significant deviation
or change.

\(2\) Within thirty (30) days of the Controlling Shareholders'
acquisition of control of the Holding Company, and thereby acquisition
of indirect control of the Bank, the Bank shall submit a written
Business Plan to the OCC for a written determination of no supervisory
objection. This written Business Plan shall include, at a minimum, the
components outlined in the attached "Business Plan Guidelines" of the
"Interagency Charter and Federal Deposit Insurance Application."

\(3\) Once the Bank receives a written determination of no supervisory
objection from the OCC required by paragraph 2 of this Article, the Bank
shall implement and thereafter adhere to the plan. Once implemented, the
Bank shall not significantly deviate from, or change, the Business Plan,
without giving the OCC at least sixty (60) days prior written notice of
its intent to do so, and obtaining the OCC's prior written determination
of no supervisory objection to such action.

\(4\) For the purposes of the Article, the phrases "significantly
deviate" and "significant deviation" shall be construed in light of the
guidance provided in Appendix G (Significant Deviations After Opening)
of the "Charters" booklet of the *Comptroller's Licensing Manual* (April
2004).

ARTICLE III

#### CHANGE IN DIRECTORS OR SENIOR EXEUCTIVE OFFICERS

1.  For two years after the effective date of this Agreement, prior to
    the appointment of any individual to a position of "senior executive
    officer," as defined in 12 C.F.R. § 5.51(c)(3) or the appointment of
    any individual to the Bank's board of directors, the Board shall
    submit the following information to the Assistant Deputy Comptroller
    for a written determination of no supervisory objection:

    a.  the information sought in the "Changes in Directors and Senior
        Executive Officers" booklet of the *Comptroller's Licensing
        Manual* (January 2003), together with a legible fingerprint card
        for the proposed individual;

    b.  a written statement of the Board\'s reasons for selecting the
        proposed individual; and

    c.  a written description of the proposed individual\'s duties and
        responsibilities.

2.  The requirement to submit information and the provision for a prior
    written determination of no supervisory objection by the OCC are
    based on the authority of 12 U.S.C. § 1818(b) and do not require the
    Comptroller or the Assistant Deputy Comptroller to complete his
    review and act on any such information or authority within
    ninety (90) days.

ARTIVLE IV

[CONCLUDING PROVISIONS]{.underline}

\(1\) It is expressly and clearly understood that if, at any time, the
Comptroller deems it appropriate in fulfilling the responsibilities
placed upon him by the several laws of the United States of America to
undertake any action affecting the Bank, nothing in this Agreement shall
in any way inhibit, estop, bar, or otherwise prevent the Comptroller
from so doing.

\(2\) Any time limitations imposed by this Agreement shall begin to run
from the effective date of this Agreement. Such time requirements may be
extended in writing by the Comptroller or his duly authorized
representative for good cause upon written application by the Board.

\(3\) The provisions of this Agreement shall be effective upon execution
by the parties hereto and its provisions shall continue in full force
and effect unless or until such provisions are amended in writing by
mutual consent of the parties to the Agreement or excepted, waived, or
terminated in writing by the Comptroller. This Agreement shall terminate
and be of no further force or effect on the date that the Bank's
proposed charter conversion to a Wyoming state chartered banking
institution becomes effective.

\(4\) To the extent that any of the provisions of this Agreement
conflict with the terms found in any existing agreement between the
Comptroller and the Bank, the provisions of this Agreement shall
control.

\(5\) This Agreement is intended, and shall be construed to be a
supervisory "written agreement entered into with the agency" as
contemplated by 12 U.S.C. § 1818(b)(1), and expressly does not form, and
may not be construed to form, a contract binding on the OCC or the
United States. Notwithstanding the absence of mutuality of obligation,
or of consideration, or of a contract, the OCC may enforce any of the
commitments or obligations herein undertaken by the Bank under its
supervisory powers, including 12 U.S.C. § 1818(b)(1), and not as a
matter of contract law. The Bank expressly acknowledges that neither the
Bank nor the OCC has any intention to enter into a contract. The Bank
also expressly acknowledges that no OCC officer or employee has
statutory or other authority to bind the United States, the U.S.
Treasury Department, the OCC, or any other federal bank regulatory
agency or entity, or any officer or employee of any of those entities to
a contract affecting the OCC's exercise of its supervisory
responsibilities. The terms of this Agreement, including this paragraph,
are not subject to amendment or modification by any extraneous
expression, prior agreements or arrangements, or negotiations between
the parties, whether oral or written.

IN TESTIMONY WHEREOF, the undersigned, authorized by the Comptroller,
has hereunto set his hand on behalf of the Comptroller.

/s/ 6/28/05

+---------------------------------------+------+-----------------------+
| H. Gene Robinson                      |      | Date                  |
|                                       |      |                       |
| Office of the Comptroller of the      |      |                       |
| Currency                              |      |                       |
|                                       |      |                       |
| Assistant Deputy Comptroller          |      |                       |
|                                       |      |                       |
| Salt Lake City Field Office           |      |                       |
+---------------------------------------+------+-----------------------+

IN TESTIMONY WHEREOF, the undersigned, as the duly elected and acting
Board of Directors of the Bank, have hereunto set their hands on behalf
of the Bank.

/s/ June 27, 2005

+---------------------------------------+------+-----------------------+
| T. Coleman Andrews, III               |      | Date                  |
|                                       |      |                       |
| /s/                                   |      | June 27, 2005         |
+---------------------------------------+------+-----------------------+
| Matthew T. Ware                       |      | Date                  |
|                                       |      |                       |
| /s/                                   |      | June 27, 2005         |
+---------------------------------------+------+-----------------------+
| Joe Oliver                            |      | Date                  |
|                                       |      |                       |
| /s/                                   |      | June 27, 2005         |
+---------------------------------------+------+-----------------------+
| Tim Anonick                           |      | Date                  |
|                                       |      |                       |
| /s/                                   |      | June 27, 2005         |
+---------------------------------------+------+-----------------------+
| Laurence Carroll Fentriss             |      | Date                  |
+---------------------------------------+------+-----------------------+
|                                       |      |                       |
+---------------------------------------+------+-----------------------+
|                                       |      |                       |
+---------------------------------------+------+-----------------------+

> Business Plan Guidelines

Preparation and Use

The business plan should be an integral part of the management and
oversight of a financial institution (institution). It should establish
the institution's goals and objectives. It is a written summary of how
the business will organize its resources to meet its goals and how the
institution will measure progress.

The business plan should be a comprehensive plan, which is the result of
in-depth planning by the institution's organizers and management. It
should realistically forecast market demand, customer base, competition,
and economic conditions. The plan must reflect sound banking principles
and demonstrate realistic assessment of risk in light of economic and
competitive conditions in the market to be served. An institution with a
special purpose or focus (for example, credit card, trust only, cash
management, or bankers' bank) should address this special or unique
feature in detail in the appropriate sections of the plan.

The business plan should cover three years and provide detailed
explanations of actions that are proposed to accomplish the primary
functions of the institution. The description should provide enough
detail to demonstrate that the institution has a reasonable chance for
success, will operate in a safe and sound manner, and will have adequate
capital to support the risk profile.

For any institution with an Internet or alternative electronic delivery
channel, the plan should contain a clear and detailed definition of the
market the institution plans to serve and the products and services it
will provide through electronic channels. Because the Internet has a
potential global market and can reach anyone with Internet access, the
selected information on market area and products and services is
essential. The marketing plan should explain how the institution would
achieve brand recognition.

###### Confidentiality

Any Applicant desiring confidential treatment of specific portions of
the plan and projections must submit the request in writing. The request
must discuss the justification for the requested treatment. The
Applicant's reasons for requesting confidentiality should specifically
demonstrate the harm (for example, loss of its competitive position,
invasion of privacy) that would result from public release of
information (5 U.S.C. 552 or relevant state law). Information for which
confidential treatment is requested should be: (1) specifically
identified in the public portion of the application (by reference to the
confidential section); (2) separately bound; and (3) labeled
\"Confidential.\" The Applicant should follow the same procedure when
requesting confidential treatment for the subsequent filing of
supplemental information to the plan.

The Applicant should contact the appropriate regulatory agency for
specific instructions regarding requests for confidential treatment. The
appropriate regulatory agency will determine whether the information
will be treated as confidential and will advise the Applicant of any
decision to publicly release information labeled as \"Confidential.\"

**BUSINESS PLAN**

I. Table of Contents

# Executive Summary

Describe the highlights of the plan.

**III. Description of** **Business**

A. Describe the institution's business and any special market niche,
including the products, market, services, and nontraditional activities.

B. If in a holding company structure, discuss the operations of the
organization, including a brief detail of the organizational structure
and interaction between the institution and its affiliates.

C. Describe the extent, if any, that there are or will be transactions
with affiliated entities or persons. Include terms.

> D. Discuss the legal form and stock ownership of the institution and
> any investment in subsidiaries or service corporations.
>
> E. For an operating company, describe the present financial condition
> and current resources, such as office network, staff, and customer
> base. Specifically discuss the strengths and weaknesses.
>
> F. Describe the proposed location, office quarters, and any branch
> structure.
>
> G. Discuss any growth or expansion plans, including additional
> branches, other offices, mergers, or acquisitions.

**IV. Marketing Plan**

*A marketing plan should provide in detail factual support that the
institution has reasonable prospects to achieve the revenue projections,
customer volume, and key marketing and income targets. The analysis
should be based on the most current data available, and the sources of
information should be referenced. This section should contain an
in-depth discussion of the major planning assumptions for the market
analysis, economic, and competitive components used to develop the
plans, objectives, and the basis for the assumptions.*

A. Product Strategy

1)  List and describe the general terms of the planned products and
    services, including activities of any subsidiaries. Discuss any
    plans to engage in any subprime or speculative lending, including
    plans to originate loans with high loan-to-value ratios.

2)  Discuss how the institution will offer products and services over
    the three years, indicating any variation in the different market
    areas or distribution channels, and include the time frame for the
    introduction and the anticipated cost associated with each.

3)  Describe the institution's plans to engage in any secondary
    market/mortgage banking activity, including loan participations.
    Discuss plans to use forward take-out commitments or engage in loan
    securitization. Describe any plans to engage in hedging activity to
    mitigate the risks of this activity. Also, discuss plans to retain
    recourse and servicing.

4)  Describe the primary sources of loans and deposits and the major
    methods to solicit them. If using brokers or agents, provide full
    details of the nature and extent of all such activities, including
    sources, amounts, fees, and any intended tie-in of compensatory
    arrangements with the broker or agent.

    5\) Describe any arrangements with e-commerce businesses (for
    example, links to another's Web site to shop, order, or purchase
    goods and/or services online).

    B. Market Analysis

> 1\) Describe the intended target market and the geographical market
> area(s).
>
> 2\) Describe the demographics of the target market population (for
> example, age, education, and occupation).
>
> 3\) *For an OTS filing*, discuss in detail any current and/or proposed
> actions to accomplish the institution's commitment to promote home
> financing.

C. Economic Component[^1]

> 1\) Describe the economic forecast for the three years of the plan.
> The plan should cover the most likely scenario and discuss possible
> economic downturns.
>
> 2\) Indicate any national, regional, or local economic factors that
> may affect the operations of the institution. Include an analysis of
> any anticipated changes in the market, the factors influencing those
> changes, and the effect they will have on the institution.
>
> 3\) Describe the current economic characteristics of the proposed
> market(s), for example, size, income, and industry and housing
> patterns.
>
> 4\) Based on the economic characteristics described previously,
> discuss the economic factors that influence the products and services
> to be offered. A more in-depth discussion is warranted when different
> types of services are identified for different market areas in the
> Description of Business section.

D. Competitive Analysis

> 1\) Compare and contrast the institution's product strategy with its
> principal competitors in the target market(s). Include expected
> results in terms of relative strength, market share, and pricing.
>
> 2\) Discuss the overall marketing/advertising strategy, including
> approaches to reach target market through the marketing of brand,
> products, and services. Outline the specific medium that will be used,
> including timing and level of advertising efforts.
>
> 3\) Discuss potential competition in the target market(s).

**V. Management Plan --- Directors and Officers**

A. Provide the number of organizers and/or directors. Provide a list of
board committees and a brief explanation of the responsibilities of each
committee.

B. Describe the organizational structure and provide an organizational
chart, indicating the number of officers and employees. Describe the
duties and responsibilities of the senior executive officers. Describe
any management committees that are or will be established.

C. Discuss the institution's plans to address management succession,
including any management training program or other available resources.

**VI. Records, Systems, and Controls**

A. Describe the institution's current and/or proposed accounting and
internal control systems, indicating any use of electronic processing
systems.

B. Describe management's proposed internal audit function. The
description should set forth the independence of the department and the
scope and frequency of audits. Discuss the experience and education of
the audit staff. If external auditors will be used for internal audits,
provide similar information for the external auditors.

C. Describe the compliance management programs, addressing independence,
scope, frequency, and staff qualifications. Discuss how the institution
will respond to consumer complaints.

D. State plans for an annual audit by independent public accountants.

E. Discuss the functions that will be outsourced and what the
institution will do in-house.

**VII. Financial Management Plan**

> A. Capital and Earnings

1\) Discuss the capital goals and the means to achieve them.

2\) Discuss the earnings goals in terms of return on assets, net
interest margin, or other profitability measurements, and summarize the
strategies to achieve those goals.

3\) Discuss the plan for raising capital and for financing growth, with
particular emphasis on conformance with regulatory capital requirements.

4\) Discuss the adequacy of the proposed capital structure relative to
internal and external risks, planned operational and financial
assumptions, including technology, branching, and projected organization
and operating expenses. Present a thorough justification to support the
proposed capital, including any off-balance-sheet activities
contemplated.

> 5\) Describe the debt service requirements for any debt that will be
> issued at the holding company level to capitalize the institution.

6\) Discuss the use of options, warrants, and/or other benefits
associated with the institution's capital.

> 7\) Summarize the dividend policy.

B. Liquidity and Funds Management

1\) Discuss how the institution will identify and measure liquidity
risk.

2\) Discuss the institution's plan to monitor and control its liquidity
risk, including funding sources (deposits, borrowings, securitizations).
Include holding company support, if any.

> 3\) Describe any plans to borrow funds from any financial institutions
> or other sources, including the amount, composition, interest rate,
> maturity, purpose, and collateral.

4\) Discuss the type of investment securities the institution plans to
purchase.

C. Sensitivity to Market Risk

> 1\) Discuss the institution's objectives, strategies, and risk
> tolerance for interest rate risk.
>
> 2\) Discuss how the institution will identify and measure interest
> rate risk.
>
> 3\) Discuss the institution's asset and liability portfolio in terms
> of sensitivity to interest rate changes and the impact of earnings and
> capital and net portfolio value.[^2] Discuss the risk limits to
> control interest rate risk.
>
> 4\) Describe any plans to use hedging activities (for example,
> futures, options, interest rate swaps, or other derivative
> instruments).

D. Credit Risk

1\) Discuss how the institution will identify and measure credit risk.

2\) Describe the loan review program, addressing independence, scope,
frequency, and staff qualifications.

> 3\) Describe the methodology used to determine the allowance for loan
> and lease losses.

**VIII. Monitoring and Revising the Plan**

A. Describe how the board of directors will monitor adherence to the
business plan.

> B. Describe how the board of directors will adjust and amend the plan
> to accommodate significant or material economic changes.

# **IX. Alternative Business Strategy (Optional unless your regulator requires)**

> An alternative business strategy details how an institution will
> operate under scenarios in which market conditions differ
> significantly from those projected in this business plan. This
> alternative business strategy should be realistic about the business
> risks and incorporate sound management of such risks. This alternative
> strategy should consider potential adverse scenarios relating to the
> asset or liability mixes, interest rates, operating expenses,
> marketing costs, and growth rates. This discussion should include
> realistic plans for how the bank would access additional capital, if
> needed, in the future and, if applicable, contingency funding plans
> that address strategies for managing potential liquidity fluctuations.
> This plan also should discuss any financial safeguards to offset
> unexpected costs and remain well capitalized.

Periodically, the institution should update this section, especially as
the institution becomes more complex and as industry conditions change.

#### X. Financial Projections

> A. Provide financial information for opening day *pro forma* and
> quarterly projections for the three years of operations. Also provide
> annual totals for the Income Statement. The line items in the
> financial statements should be consistent with the Consolidated
> Reports of Condition and Income or the Thrift Financial Report
> (Report)[^3] so that projected items may be compared conveniently with
> actual performance. The following reports should be used:

Projected Balance Sheet (Schedule RC or SC)

Projected Income Statement (Schedule RI or SO)

Regulatory Capital Schedule (Schedule RI-A or CCR)

> The financial statements should be presented in two ways: (1) showing
> the dollar amounts, and (2) as a percentage of total assets.
>
> 1\) Describe in detail all of the assumptions used to prepare the
> projected statements, including the assumed interest rate scenario for
> each interest earning asset and interest costing liability over the
> term of the business plan. Also present a thorough justification to
> support proposed capital, including any branch expansion and
> off-balance-sheet activities contemplated.
>
> 2\) Provide the basis for the assumptions used for noninterest income
> and noninterest expense. Indicate the amount of lease expense, capital
> improvements, and furniture, fixtures, and equipment, including
> systems and equipment upgrades.

3\) Describe the assumptions for the start-up costs, volumes, expected
returns, and expected time frame to introduce each new product and
service.

> B. Discuss how the institution used marketing studies or surveys to
> support the institution's projected growth.
>
> C. Discuss the level of marketing expenses necessary to achieve the
> projected market share for both loan and deposit products. Assumptions
> should be consistent with those experienced by other institutions in
> the target market. Explain any significant variances between the
> assumptions in the target market.
>
> D. Provide a sensitivity analysis of the financial projections. A
> sensitivity analysis provides a realistic stress test of the major
> underlying assumptions used in the business plan and the resultant
> financial projections. For example, adjust the financials to reflect
> the effects of adverse changes in the interest rate environment,
> changes in the asset/liability mix, higher than expected operating
> expenses, marketing costs, and/or growth rates.

[^1]: If obtained, discuss any independent economic survey or market
    feasibility study.

[^2]: For OTS filing, see Thrift Bulletin 13a.

[^3]: See FDIC's Web site,
    <http://www.fdic.gov/regulations/resources/call/crinst/callinst.html>
    or [http://www.ots.treas.gov](http://www.ots.treas.gov/) (link to
    TFR form and instructions).