board of governors of the federal reserve 

system seal 

BOAR D OF GOVERNOR S 

OF THE 

FEDERAL RESERVE SYSTEM 

WASHINGTON, D. C. 2055 1 

ADDRESS OFFICIAL CORRESPondENC E 

TO THE BOARD 

November 22, 2005 

Barry Lake, Esq. 

Suite 109 

941 O Street 

Lincoln, Nebraska 68508 

Dear Mr. Lake: 

This is in response to the request by FirsTier Bank ("Bank"), Upton, 

Wyoming, for an exemption from section 23A of the Federal Reserve Actfootnote 1 

to permit Bank to purchase real property and improvements (the "premises") 

for a branch from First Inn Franchise, Inc. ("First Inn"), Kimball, Nebraska, 

an affiliate of Bank. Bank proposes to purchase the premises with cash for 

 period Bank has provided independent evidence that indicates that the 

fair market value of the premises ex eriod 

Under section 23 A, a bank may engage in "covered transactions," as 

defined by the statute, with a single affiliate in an amount up to 10 percent of 

the bank's capital and surplus; transactions with all affiliates are limited to 

20 percent of the bank's capital and surplus.footnote 2 In addition, a bank's purchase 

of assets from its affiliate is subject to a prohibition against the purchase of 

low-quality assets and must be on terms and conditions that are consistent 

with safe and sound banking practices.footnote 3 Bank's purchase of the premises is 

footnote 1

 12U.S.C.

section371c. 

footnote 212U.S.C.section 371c(b)(7)(C). 

footnote

 3

12U.S.C.

section371c(a)(3)and(4). 
2 

a covered transaction and based on the bank's existing capital and surplus, 

would be limited by section 23A to approximately .

footnote 4 

Section 23 A specifically authorizes the Board by order or regulation, 

to exempt from the definition of "purchase of assets" a bank's purchase of 

real or personal property from its affiliate.footnote 5 The legislative history of this 

section indicates that Congress gave the Board the authority to permit a bank 

to purchase from an affiliate certain expensive properties such as a building 

because "such transactions are not the type of transactions that section 23 A 

is designed to cover."

footnote 6 

Section 23B of the Federal Reserve Act requires that any covered 

transaction with an affiliate be on terms and under circumstances, including 

credit standards, that are substantially the same, or at least as favorable, to 

such bank or its subsidiary as those prevailing at the time for comparable 

transactions with nonaffiliated companies. In light of the information 

provided by Bank, it appears that the transaction is consistent with the 

requirements of section 23B. In addition, the Federal Deposit Insurance 

Corporation has reviewed Bank's plans to purchase the premises and does 

not object to the purchase. 

In light of these considerations, the transaction appears to be 

consistent with safe and sound banking practices and on terms that would 

ensure the quality of the assets transferred. Accordingly, the transaction 

appears to be consistent with the purposes of section 23 A, and the Director 

of the Division of Banking Supervision and Regulation, pursuant to 

authority delegated by the Board and with the concurrence of the General 

Counsel, hereby grants the requested exemption. 

footnote 4 For section 23A purposes, Bank's capital and surplus totaled 

approximately as of June 30, 2005. 

footnote 5

 12U.S.C. section 371c(b)(7)(C). 

footnote 6

 S. Rep. No. 536, 97th Cong., 2d Sess. 32 (1982). 
3 

This determination is specifically conditioned on Bank's compliance 

with all the commitments and representations made in connection with the 

exemption request. These commitments and representations are deemed to 

be conditions imposed in writing in connection with granting this request 

and, as such, may be enforced in proceedings under applicable law. This 

determination is based on the specific circumstances surrounding this 

transaction and may be revoked in the event of any material change in those 

circumstances or failure by Bank to continue to observe its commitments. 

This grant of exemption does not represent a determination concerning the 

permissibility of any other transactions that are subject to section 23 A or 

concerning any other affiliates of Bank. 

Very truly yours, 

Robert deV. Frierson signature 

Robert deV. Frierson 

Deputy Secretary of the Board 

cc: Federal Reserve Bank of Kansas City 

Federal Deposit Insurance Corporation