Ideal Bancshares, Inc. ("Applicant") has requested the Board's approval under section 3(a)(1) of the Bank Holding Company Act ("BHC Act") (12 U.S.C. § 1842(a)(1)) to become a bank holding company by acquiring all the voting shares of First State Bank of Goodrich, Goodrich, North Dakota ("Bank").

Notice of the proposal, affording interested persons an opportunity to submit comments, has been published (64 Federal Register 13,799 (1999)). The time for filing comments has expired, and the Board has considered the proposal and all comments received in light of the factors set forth in section 3 of the BHC Act.

Applicant is a newly organized corporation formed for the purpose of acquiring control of Bank. Bank currently has its main office in Goodrich, North Dakota, and maintains a paying and receiving facility in Hurdsfield, North Dakota.¹ Bank is the 94th largest depository institution in North Dakota and controls deposits of $15.6 million, representing less than 1 percent of total deposits in depository institutions in the state.²

As noted above, Applicant is a de novo corporation and does not control another depository institution. Accordingly, based on all the facts of record, the Board concludes that consummation of the proposal would not have a significantly adverse effect on competition or on the concentration of banking resources in any relevant banking market, and that competitive considerations are consistent with approval.

Financial, Managerial, and Supervisory Considerations
The BHC Act requires the Board to consider the financial and managerial resources and future prospects of the companies and banks involved in the proposal and certain supervisory factors. The Board has reviewed these factors in light of all the facts of record, including supervisory reports of examination and other confidential supervisory information assessing the financial and managerial resources of Bank. Based on all the facts of record, the Board concludes that the financial and managerial resources and future prospects of Applicant and Bank are consistent with approval, as are the other supervisory factors the Board must consider under section 3 of the BHC Act.

Convenience and Needs Considerations
The Board also has carefully considered the effect of the proposal on the convenience and needs of the communities to be served in light of all the facts of record, including comments received from several individuals ("Comenters") concerning the potential effect of this transaction on the availability of banking services in Hurdsfield, North Dakota. As part of this review, the Board has carefully considered Bank's record of performance under the Community Reinvestment Act (12 U.S.C. § 2901 et seq.) ("CRA").

An institution's most recent CRA performance evaluation is a particularly important consideration in the applications process because it represents a detailed on-site evaluation of the institution's overall record of performance under the CRA by its appropriate federal supervisor.³ Bank received a "satisfactory" rating from its appropriate federal supervisor, the Federal Deposit Insurance Corporation, at Bank's most recent examination for CRA performance, as of April 1999 ("1999 Examination").

Examiners at the 1999 Examination found that Bank's lending record evidenced a strong commitment to lending in Bank's community assessment area. Examiners noted that Bank's assessment area, which includes Hurdsfield, consisted entirely of moderate-income geographies and was heavily dependent on agriculture. Examiners reviewed 31 agricultural loans, totaling approximately $1.4 million that were made by Bank in 1998 and 1999, and noted that 80 percent of these loans were extended to farm operations with annual gross revenues of less than $250,000. Examiners further concluded that the geographic distribution of Bank's loans in its assessment area was reasonable, and did not find any substantive violations of fair lending laws and regulations.

Commenters expressed concern that Applicant might close Bank's paying and receiving facility in Hurdsfield and that such closure would negatively affect the local community. Applicant has stated that it presently intends to retain the Hurdsfield facility following consummation of the proposal.⁴

Based on all the facts of record, including the 1999 Examination, the public comments received, and the information provided by Applicant to address these comments, the Board concludes that convenience and needs considerations, including the CRA performance record of Bank, are consistent with approval of the proposal.

Conclusion
Based on the foregoing, and in light of all the facts of record, the Board has determined that the application should be, and hereby is, approved. The Board's approval is specifically conditioned on compliance by Applicant with all the commitments made in connection with the application. For the purpose of this action, the commitments relied on by the Board in reaching its decision are deemed to be conditions imposed in writing by the Board in connection with its findings and decision and, as such, may be enforced in proceedings under applicable law.

The acquisition of Bank shall not be consummated before the fifteenth calendar day after the effective date of this order, or later than three months after the effective date of this order, unless such period is extended to good cause by the Board or by the Federal Reserve Bank of Minneapolis, acting pursuant to delegated authority.

By order of the Board of Governors,⁵ effective June 14, 1999.

(signed) Robert deV. Frierson

Robert deV. Frierson