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EXPANSION OF TRANSAMERICA CORPORATION'S BASKING INTERESTS DURING THE PERIOD JANUARY 1« 1942 - DECEMBER 31, 1946 From January 1, 1942, through December 31, 1946, Transamerica Corporation increased i t s dominant p o s i t i o n i n the 4-State area o f Arizona, C a l i f o r n i a , Nevada, and Oregon, as r e f l e c t e d i n the f o l l o w i n g increases i n the measures o f i t s c o n t r o l : (1) Number of banks - From 6.9$ t o 13.5% o f the t o t a l ; (2) Number of banking o f f i c e s - From 45.5$ t o 47.4$ o f the t o t a l ; (3) Deposits - From 37.7$ t o 43.2$ o f the deposits o f a l l banks* The increase was l a r g e l y i n the States o f C a l i f o r n i a and Oregon. D e t a i l s showing the increases or decreases by States, i n c l u d i n g Washington as w e l l as the f o u r other States named above, are shown i n Appendix A. There was no change during the period i n the number o f banking o f f i c e s c o n t r o l l e d by Transamerica i n Washington, where i t s banking i n t e r e s t s comprise one bank w i t h nine branches. The increase i n the Transamerica group f s p o s i t i o n r e f l e c t s expansion through a c q u i s i t i o n o f other banks and the establishment o f de novo branches as w e l l as through growth. During the period January 1, 1942, through December 31, 1946: Transamerica has acquired c o n t r o l o f banks 21 19 continue as c o n t r o l l e d banks (2 o f which continue t o operate the 4 branches i n existence a t time o f a c q u i s i t i o n ) 1 was merged w i t h a branch of Bank o f America N.T. & S.A. 1 was converted i n t o a branch o f F i r s t Trust and Savings Bank of Pasadena (member bank - approval not required f o r w i t h i n c i t y branch) Bank of America N.T. & S.A. has absorbed other independent banks 5 4 were merged w i t h e x i s t i n g branches 1 was converted i n t o a branch De novo branches were established 10 by Bank o f America N.T. & S.A. 1 by F i r s t N a t i o n a l Bank o f Arizona, Phoenix 1 by Central Bank, Oakland, C a l i f o r n i a (insured nonmember) 1 by Bank o f Nevada, Las Vegas (nonmember, not insured a t time of establishment of branch but insurance l a t e r granted) 13 - 2 - The foregoing summary does not include the absorption i n 1945 by the F i r s t National Bank of Nevada, Reno, and the conversion i n t o a branch, of a bank which had been c o n t r o l l e d by Transamerica since p r i o r t o January 1 , 1942. L i s t s showing d e t a i l s as t o banks acquired or absorbed and branches established are shown i n Appendix B. Of the de novo branches of Bank o f America N.T. & S. A . , a t l e a s t f o u r involved the use o f "dormant" permits, i . e . , permits o f branches discontinued since January 1 , 1942, and subsequently reopened a t other l o c a t i o n s w i t h the permission of the Comptroller of the Currency, and one r e s u l t e d from the conversion of a " f a c i l i t y o f f i c e . " (NOTE: The i n f o r m t i o n r e g u l a r l y furnished us by the Comptroller's O f f i c e regarding establishment of branches does not enable us t o determine: (1) the exact number of branches established under "dormant" permits; (2) the number o f branches, i f any, established since January 1, 1942, under a p p l i c a t i o n s approved p r i o r t o t h a t datej nor (3) the number of a p p l i c a t i o n s , i f any, approved since January 1, 1942, f o r which formal permits have not been issued nor branches e s t a b l i s h e d . ) During the period Bank of America N.T. & S. A. discontinued s i x of i t s branches and the F i r s t National Bank of Portland discontinued one. I n a d d i t i o n t o the expansion i n d i c a t e d above, i n 1943 Transamerica i n i t i a t e d a d r i v e t o acquire c o n t r o l o f Citizens N a t i o n a l Trust and Savings Bank of Los Angeles (deposits June 30, 1943—$206,759,000). The d r i v e d i d not succeed but by December 31, 1945, Transamerica had acquired approximately 22$ of the stock. The 26 banks o f which c o n t r o l was acquired by Trsjisamerica or which were merged w i t h i t s banks were a l l i n C a l i f o r n i a or Oregon, and t h e i r deposits a t the time of acquirement or absorption aggregated approximately $135,550,000, o f which approximately $88,400,000 were i n C a l i f o r n i a and $47,150,000 i n Oregon. Only two of these banks had deposits i n excess of $10,000,000; namely, F i r s t National Bank, Santa Ana, C a l i f o r n i a ($25,600,000), and F i r s t National Bank, Eugene, Oregon ($36,200,000). I n connection w i t h the request of F i r s t Trust and Savings Bank o f Pasadena, C a l i f o r n i a , f o r permission t o e s t a b l i s h branches, the Board advised Transamerica i n a l e t t e r dated February 14, 1942, t h a t there was unanimous agreement between the Board, the Comptroller, and the F . D . I . C . t h a t the Federal bank supervisory agencies should, under e x i s t i n g circumstances, decline permission f o r the a c q u i s i t i o n d i r e c t l y or i n d i r e c t l y of any a d d i t i o n a l banking o f f i c e s or any s u b s t a n t i a l i n t e r e s t t h e r e i n by Transamerica, Bank o f America N.T. & S.A., or any other u n i t o f the Transamerica group. Transamerica was requested t o advise the Board before any plans f o r f u r t h e r expansion of i t s i n t e r e s t s i n banks were consummated. Mr. Delano and Mr. Crowley i n i t i a l e d t h i s l e t t e r . -3On March 17, 1942, Transamerica r e p l i e d t h a t i t could not accept such r u l i n g r e l a t i v e t o expansion• I n a l e t t e r dated A p r i l 12, 194&, regarding the a p p l i c a t i o n of Bank o f M e r i c a N.T. & S.A. t o e s t a b l i s h two branches i n the Orient (which the Comptroller d i d not favor but which the Board approved) the Comptroller stated: "As you know, t h i s o f f i c e has considered the system o f domestic branches operated by t h i s bank t o be an excessive expansion o f i t s operations. Our convictions upon t h i s p o i n t have been expressed i n our p o l i c y of reluctance t o grant add i t i o n a l branches. I n f a c t , new branches have been authorized i n those l o c a t i o n s only where banking accommodations can be obtained i n no other manner, or where such establishment would not be p r e j u d i c i a l t o e x i s t i n g independent banks. We have given due weight t o the nature and amount o f c a p i t a l funds i n r e l a t i o n t o the asset and l i a b i l i t y s t r u c t u r e of the bank and i t s very prominent p o s i t i o n i n the banking system." Since February 14-, 1942, the Board has not approved the establishment o f any branches by State member banks i n the group and, i n f a c t , i n July 1942 and again i n May 1946 advised the Reserve Bank t h a t i t s p o l i c y remained unchanged. (There are only two State member banks i n the group, and the only a p p l i c a t i o n s f o r branches received by the Board have been from F i r s t Trust and Savings Bank o f Pasadena.) Since February 14, 1942, the Comptroller's O f f i c e has approved the establishment o f several branches ( a t l e a s t some o f which involved d i s t r e s s or other s p e c i a l circumstances) and the F . D . I . C . has approved the establishment o f one branch of an insured nonmember bank i n the group. I t also granted insurance i n 1943 t o a nonmember bank w i t h one branch (Bank of Nevada, Las Vegas) which was organized by Transamerica i n 1941* We do not have information as t o the number o f branches which the Compt r o l l e r and the F . D . I . C . may have discouraged or disapproved. Andrew N. Thompson, Federal Reserve Examiner* March 19, 1947. NOTE: The data regarding expansion i n t h i s memorandum and accompanying tables cover only the p e r i o d ended December 31, 1946, because o f the imp o s s i b i l i t y o f drawing up f i g u r e s as of a more current date regarding a l l banks i n the States a f f e c t e d . However, since December 31, 194&, Bank of America N.T. & S.A. has established two de novo branches (Montebello and San Mateo) and F i r s t N a t i o n a l Bank of Portland, Oregon, has established one de novo branch i n Portland. APPENDIX A CONFIDENTIAL BANKS AND BRANCHES IN THE TRANSAMERICA CORPORATION GROUP COMPARED WITH ALL BANKS AND BRANCHES IN THE SAME STATES, DECEMBER 31, I9I4I AND 191+6 (Deposits i n thousands of d o l l a r s ) Number o f — Banks Branches 19U6 W 191+1 1 19¥> Banks and branches 19U1 1 19A+6 Deposits o f banks and branches 2/ 191+1 1 191+6 Transamerica Corporation banks 2 Arizona California Nevada Oregon 2 9 1+ 7 22 1 2 2k 3 11 kQ 1 3 50i+ 9 40 556 9 1+ 511+ 11 l+o 569 9 5 513 13 47 578 10 6 25,606 538 1,982,167 1)2,208 11+ 170,257 51 609 2,220,238 3k,266 10 81,272 5,675,1+86 129,14+3 601,597 6,487,798 97,690 Total 23 bl 565 578 588 619 6,585,1+88 'risona 12 220 12 73 317 137 10 207 8 71 296 12l+ 26 850 10 68 95h 87 35 862 16 75 988 112 Total 1+51+ 1+20 1,01*1 1,100 1,1+95 1,520 Arizona California Nevada Oregon 16.7 1+.1 33.3 9.6 6.9 .7 20.0 11.6 37.5 15.5 15.5 .8 11.5 59.3 90.0 58.8 58.3 10.3 11.1* 59.6 68.8 53.3 57.6 8.0 13.2 1+7.9 59.1 33.3 1+5.5 1+.5 13.3 50.3 58.3 31+.9 1+7.1+ 1+.2 22.8 37.5 80.7 38.5 37.7 1+.3 20.7 1+3.1+ 79.1 14+.1+ 1+3.2 1+.5 Total 5.1 9.8 5U. 3 52.5 39.3 I+0.7 33.7 38.1+ Sub-total Washington 2,25i+,50l+ A l l banks i n same S t a t e s * *lifornia Nevada Oregon Sub-total Washington 38 112,373 393,0^+2 1+5 1,070 1,069 5,282,761 13,089,010 22 21+ 52,322 163,71+7 1U1 11+6 l+l»2,5i|S 1,355.319 1,271 1,281+ 5,890,00+ 15,001,118 236 22k 793,61+2 2,156,1+05 6,683,6146 17,157,523 Ratio (per cent) o f Transamerica banks t o a l l banks i n same States * Sub-total Washington l/ Separate d e p o s i t f i g u r e s f o r branches a r e n o t a v a i l a b l e * NOBS 1—The number o f branches shorat above does n o t i n c l u d e ^banking f a c i l i t i e s 1 1 a t m i l i t a r y r e s e r v a t i o n s p r o v i d e d t h r o u g h arrangements made b y the T r e a s u r y Department w i t h 1 ks d e s i g n a t e d as d e p o s i t a r i e s and f i n a n c i a l agents o f t h e Government. BOARD OP GOVERNORS OP THE FEDERAL RESERVE SYSTEM, DIVISION OP BANK OPERATIONS, MARCH 19, 1947* APPENDIX B BANKS ACQUIRED OR ABSORBED AND BRANCHES ESTABLISHED OR DISCONTINUED BT THE TRANSAMERICA GROUP DURING THE PERIOD JANUARY 1 , 1942 THROUGH DECEMBER 31, 1946 Location Month and year Banks A c q u i r e d by Transamerica C o r p o r a t i o n : California (17): F i r s t N a t i o n a l Bank o f Lamanda Park (made a branch o f F i r s t T r u s t and Savings Bank o f Pasadena (m) i n August 1944) F i r s t N a t i o n a l Bank F i r s t N a t i o n a l Bank F i r s t N a t i o n a l T r u s t & Savings Bank Bank o f Newman (m) ( w i t h 3 branches) Bank o f Tehachapi (nm) Bank o f Corning (nm) (merged i n t o Corning branch o f Bank o f America N.T. ft S.A. i n February 1946) F i r s t N a t i o n a l Bank F i r s t N a t i o n a l Bank Farmers & Merchants Bank o f Watts (nm) F i r s t N a t i o n a l Bank F i r s t Savings Bank (nm) F i r s t N a t i o n a l Bank F i r s t N a t i o n a l Bank S t a n i s l a u s County Savings Bank (nm) F i r s t N a t i o n a l Bank F i r s t N a t i o n a l Bank Pasadena 10-43 Bellflower Santa Ana Santa Barbara Newman Tehachapi Corning 10-43 1-44 2-44 2-44 7-44 9-44 Los A l t o s Corcoran Los Angeles San J a c i n t o San J a c i n t o Crows Landing Oakdale Oakdale Mountain View Turlock 10-44 12-44 3-45 8-45 8-45 10-45 4-46 4-46 4-46 6-46 Scio Sweet Home Eugene Corvallis 8-42 9-42 12-45 12-46 Oregon ( a ) : Scio S t a t e Bank (nm) Bank o f Sweet Home (nm) F i r s t N a t i o n a l Bank Benton County State Bank (nm) ( w i t h 1 branch) Note: Transamerica lias acknowledged acquirement o f c o n t r o l o f the f o l l o w i n g banks as o f dates subsequent t o December 31, 1941, but the banks are not l i s t e d above because o f the f a c t t h a t we regard them as c o n t r o l l e d p r i o r t o t h a t date: F i r s t T r u s t and Savings Bank o f Pasadena, C a l i f o r n i a Bank o f P i n o l e , C r o c k e t t , C a l i f o r n i a N a t i o n a l Bank o f Washington, Tacoma, Washington Independent banks absorbed by Bank o f America N.T. & S.A.. ( 5 ) : Flffmers & Merchants Bank (nm) C i t i z e n s N a t i o n a l Bank Bank of Gait (nm) • F i r s t N a t i o n a l Bank F i r s t N a t i o n a l Bank *New brafech e s t a b l i s h e d . Gardena Ontario Gait Clovis Laton A l l others merged i n t o e x i s t i n g branches. 1-42 4-42 6-43 5-44 6-44