State Banking Board: Investment in the Mountain Plains Equity Fund I, LP

Timothy J. Karsky Commissioner Robert J. Entringer Assistant Commissioner Jeff Jungman Chief Examiner - Banks James M. Laidlaw Chief Examiner – Credit Unions CSBS Accredited 1993 NASCUS Accredited 2000 December 31, 2004 Chief Executive Officer of the Bank Addressed: At the November 18, 2004, State Banking Board meeting, approval was granted by the Board to allow state-chartered banks to invest in Mountain Plains Equity Fund I, L.P. Investments of this type are governed by North Dakota Century Code Section 6-03- 47.2(2), which gives the State Banking Board the authority to approve investments in projects designed primarily to promote community welfare such as economic rehabilitation and development of low income areas. All investments in debt and equity instruments shall not exceed 10% of the combined capital and surplus of the banking association. Mountain Plains Equity Fund I, L.P., is organized as a Montana limited partnership formed for the purposes of investing in low income residential rental properties located in the States of Montana, North Dakota, and Wyoming. Board action approving the legality of this investment is not to be construed as an endorsement of the investment, but only the permissibility of state banks to invest in this fund. Each bank should seek its own legal and tax advice as to tax accounting and other related matters concerning this investment. Additionally, consideration should be given to the appropriateness of this investment as it relates to the bank's investment policy. This investment is not eligible for pledging for public funds as defined under North Dakota Century Code Section 21-04-09. Call Report Instructions regarding the handling of this type of investment which does not have a readily determinable fair value, indicate that it should be carried as other assets, Schedule RC-F. If you have any additional questions regarding this particular investment, please feel free to contact my office. Sincerely, Timothy J. Karsky Commissioner TJK:JJ:sr 2000 Schafer Street, Suite G, Bismarck, ND 58501-1204 • 701-328-9933 • dfi@nd.gov • fax 701-328-0290 • www.nd.gov/dfi