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THE BANKING STRUCTURE IN EVOLUTION: A Response to Public Demand 102nd ANNUAL REPORT 1964 The Administrator of National Banks JAMES J. SAXON, Comptroller of the Currency THE UNITED STATES TREASURY, WASHINGTON, D.C. For sale by the Superintendent of Documents, U.S. Government Printing Office Washington, D.C., 20402 - Price $2 Letter of Transmittal TREASURY DEPARTMENT, OFFICE OF THE COMPTROLLER OF THE CURRENCY, Washington, B.C., September 1, 1965. SIRS: Pursuant to the provisions of section 333 of the United States Revised Statutes, I am pleased to submit the 102nd Annual Report of the Comptroller of the Currency, the Administrator of National Banks, which covers operations for the year 1964. I have also included in this Report a statement of our policies with respect to the banking structure covering the fields of chartering, branching, and mergers, together with several appendices reproducing the major public expressions of the policies of this Office during the past year. Respectfully, JAMES J. SAXON, Comptroller of the Currency. T H E PRESIDENT OF THE SENATE T H E SPEAKER OF THE HOUSE OF REPRESENTATIVES Contents Title of Section Page The Banking Structure in Evolution: A Response to Public Demand I. II. III. IV. A Statement of Policy Evolution of the Banking Structure, 1900-1965. The Future of the Banking Structure The Data 1 7 14 15 Annual Report, 1964 I. II. III. IV. V. VI. VII. VIII. IX. State of the National Banking System Assets, Deposits, and Capital Accounts New Charters, Branches, and Mergers Income and Expenses of National Banks Litigation Fiduciary Activities of National Banks International Banking and Finance Management Improvement Income and Expenses of the Office of the Comptroller of the Currency X. Issue and Redemption of Currency 27 28 31 38 40 48 48 50 54 56 Appendices A. Merger Decisions, 1964 B. Statistical Tables C. Addresses and Selected Congressional Testimony of James J. Saxon, Comptroller of the Currency D. Selected Correspondence of James J. Saxon, Comptroller of the Currencv Index 57 173 239 265 337 THE BANKING STRUCTURE IN EVOLUTION: A Response to Public Demand I. A Statement of Policy HE NATION'S INDUSTRY and commerce are alive T with change. If the banking industry is to serve their needs most effectively, it will have to match the initiative and imagination displayed elsewhere in the economy. The temper of the banking industry, and the energy with which new opportunities are created and pursued, will be critically affected by the attitudes of the public authorities. A negative or unreceptive outlook on the part of the regulator may dampen the initiative of banks and impede effective response to public demand for banking services and facilities. For nearly four years, we have been engaged in an effort to broaden the opportunity for private initiative in the National Banking System, insofar as this could properly be done in the light of existing law and the public purpose to sustain and safeguard the viability of the banking system. In our 101st Annual Report to the Congress, we reviewed the changes that were instituted and those advocated with respect to the operating powers of National Banks. In this 102nd Annual Report, we shall examine the changes of policy and practice relating to the structure of the National Banking System. The banking structure that is most ideal in terms of the public need will vary with the changing requirements for banking services and facilities. Like the operating powers of commercial banks, the structure of the banking industry must continuously be adapted to emerging demands and opportunities. All of the forces of change which are at work throughout the economy, both domestic and international, influence the ideal banking structure to be sought. In our prosperous and vigorous society these changes are constant, far-reaching, and of compelling importance. Increases in personal income and population affect the volume of savings seeking productive uses. The growth of capital and advances in technology bring new products and new industries. These, in turn, often give rise to new communities and shifts of population. Population movements are further accelerated as income levels rise and permit the pur79-563—65 2 chase of new homes. All of these factors have worked to produce demands for additional types of banking services and for banking facilities at new locations. The responses by the banks and the banking authorities to these new demands and opportunities have molded the evolution of the banking structure. "Structure" is a term generally used to describe the composition and dispersion of an industry, geographically, by size of unit, and by the range of products manufactured and distributed. The structure of an industry is also affected by the ease with which new firms may enter and existing firms may expand. In all industries, structure is influenced by such factors as the location of the materials of production, the accessibility of markets, and production and demand conditions, as well as by unique factors such as the inventive process and enterpreneurial initiative. Banking, however, and the other regulated industries, differ fundamentally from the unregulated industries in one significant respect—the influence of government on structure. In the unregulated industries, the influence of government on structure is at a minimum. In these industries, the broadest scope is preserved for individual initiative; public controls are, for the most part, either indirect or peripheral. Except in unusual times such as war, it is rare in the unregulated industries to impose precise and positive rules of conduct for the individual. He is forbidden to engage in certain practices and certain governmental activities may indirectly affect the choices he makes, but beyond these limiting factors he has a free choice of entry and free discretion to select his own investment, production, and marketing policies. For example, although the total supply of money and credit is regulated, the government does not normally allocate their uses nor fix the prices of goods and services produced and sold. Collective bargaining is required, but wage rates are not fixed. Anticompetitive accretions of market power and deceptive practices are controlled, but there is no effort through public authority to select and enforce any exact set of competitive conditions. 1 This is in clear contrast to the public policies followed in the regulated industry of banking. In virtually every significant aspect, the structure of the banking industry is directly controlled by government. Entry into banking is restricted and the expansion of existing banks is closely regulated. No bank may be formed without a charter from the government. No bank may expand its size through the acquisition of new capital or the formation of new branches without the sanction of a public authority. No bank may expand through the acquisition of other banks without the prior approval of government. Underlying this intercession of government in banking is a basic public policy that sets this industry clearly apart from others. The factor which distinguishes banking from other industries is the public concern to safeguard the viability of the banking system. This concern is founded upon the central role which banking performs in the economy, and the critical significance of public confidence in the banking system. The banking system provides the chief instrument of payment in the conduct of business and private transactions, and it represents one of the principal channels through which savings are directed to productive uses. In order that these functions may be performed effectively, there must be public confidence in the banking system. Without such confidence, funds would not be deposited in banks nor would checks be accepted in payment of transactions, and the performance of the entire economy would be greatly impaired. There are three basic forms of public control that affect the structure of the banking industry: (1) chartering controls; (2) branching controls; and (3) merger controls. A. Chartering Controls The imposition of entry controls through the requirement of a public charter represents the most fundamental structural regulation of the banking industry. In the unregulated industries, freedom of entry is preserved as the essential basis for the reliance placed on private initiative to exploit profitable opportunities for serving consumer demands, and generally to make certain that productive resources move to their best uses throughout the economy. It is recognized that free entry may result in the elimination of inefficient competitors, but this is regarded as a small price to pay for the public benefits of private initiative and innovation. Failures in banking, however, are considered to be of greater public consequence than failures in other industries because of the broad effects on confidence in the banking system and the severe incidence on individuals and small business firms. Entry restrictions have thus been adopted as one of the measures for preserving the viability of the banking system. Since the existence of entry restrictions deprives the public of the full benefits of competition in meeting consumer demands, it becomes the responsibility of the regulatory authorities to make certain that entry controls are not so severely administered as to inhibit the provision of needed banking services and facilities. If the public authorities are insufficiently alert or sluggishly responsive to emerging requirements, artificial shortages may appear. This is precisely the situation which prevailed several years ago as a result of postwar changes in the size and location of population and industry. Shortages of supply normally create mounting pressures for market entry in a capital-rich and dynamic economy such as our own. This poses administrative problems where there is public control of entry. As the saturation point is approached in a market under the pressure of new entry, it becomes increasingly difficult to make accurate estimates of need and potential profitability. Moreover, in order to sustain the viability of the banking system, it is desirable to preserve opportunities for new banks to grow to efficient size. For these reasons, a temporary halt may occasionally be required in the chartering of new banks in some markets, as occurred under the more responsive chartering policies of the past several years. Some observers have been concerned lest the chartering of new banks should proceed so far as to increase the rate of bank failures, and it is worthwhile to consider how firm the safeguards against failure should be in the chartering of new banks. It must be remembered that bank entry is regulated not because there is a private right of existing banks to be protected against competition, but because there is a public concern to sustain the viability of the banking system. It can never be in the public interest to protect banks against competitors who are either more efficient or more responsive to public demands. There are, moreover, positive public benefits to be derived through the periodic introduction into the banking industry of new competitive forces with fresh ideas and fresh talents. An absolute safeguard against bank failures resulting from new entry would require an absolute bar against entry, for any new competitor will have some effect on his rivals and will himself run the risk of failure. In order to reconcile the need to protect the viability of the banking system with the equally vital need to assure sufficient production of banking services, a unique combination of public policies has been adopted. Applications for entry are carefully screened in terms of public demand, potential profitability, and effects upon competitors. In order to assure the capability of new banks to operate efficiently and effectively, certain minimum capital requirements are imposed, and the competence of proposed management is appraised and approved by the regulatory authorities. The operating policies and practices of all banks are continuously supervised to sustain their solvency and liquidity. Finally, as an ultimate safeguard where failure does occur, a system of deposit insurance has been provided. Through these measures, confidence in the banking system is preserved without paralyzing the competitive forces. Thus, the banking industry is enabled to undertake the risks that are required in serving the demands of a thriving and flourishing economy. The chartering of new banks represents, in many respects, the most delicate task which confronts the bank regulatory authorities. A new bank represents a new competitor, and a new competitor is rarely welcome in any industry. On the other hand, since bank charters are valuable because they are limited in supply, they are actively sought by competing applicants. The public authorities are thus subjected to intensive pressures both from those who seek charters and those who oppose them. Moreover, in reaching decisions on charter applications, there can be no absolute certainty of the fate that will befall new banks or their competitors. Despite these difficulties of administering entry controls, banking must not be treated as a "closed" industry. Each new generation produces a new group of men and women of skill and ability seeking outlets for the use of their talents, and in our prosperous society there is a constant accumulation of capital in search of profitable employment. In some measure, these new productive resources will find their best uses in the banking industry, and the public will benefit by allowing them access to that industry. B. Branching Controls The second principal form of structure control is the regulation of branching. A bank may expand internally through the formation of de novo branches, or externally through the absorption of other banks by means of merger. Merger controls, however, raise a number of separate issues and will be discussed in the next section. The policy issues confronted in branching are in many respects similar to those which appear in the chartering of new banks. Since the formation of a de novo branch introduces a new competitor into a market, the same questions arise of public need or convenience, potential profitability, and effects upon competitors. But inasmuch as branching increases the size of an individual bank, new issues also emerge concerning the potential for greater operating efficiency and for enlargement of the range of services offered to consumers. There will be some circumstances in which a new branch will be able to serve public demand to better advantage than a new bank. Some banking markets can profitably support a new branch where a new bank could not prosper. A new branch may be able to bring to a community a broader range of services than could be efficiently provided by a newly chartered bank. Moreover, the abandonment of a branch will be less harmful—both to the parent bank and to the banking system—than the failure of a new bank; thus, where prospects are not immediately certain, or where expansion is based partially on anticipated growth in demand, branching might be the preferred course. The choice of whether to provide for bank expansion through new charters or through new branches is also affected by other considerations which are discussed in the next two sections. Much of the recent demand for new branches, as has been true of that for new charters, stems from the growth and shifts of population and the creation and relocation of industries. Very commonly in recent years, for example, the movement of population from urban to suburban areas has deprived urban banks of customers and created new demands in suburban areas. Moreover, the growth of new industries often gives rise to new working and residential communities with new needs for banking services and facilities. Through branching, a bank may "move with its customers" and retain its position in the industry. The broader the geographic dispersion of a bank's offices, the more readily may the deposits from surplus areas be put to effective use in areas where loan demand exceeds the deposits generated. Further, by increasing its size, branching may enable a bank to produce some services at lower cost. It may also enable a bank to spread its risks more effectively and thus allow engagement in lending activities that would not be feasible for a smaller bank. A larger bank, moreover, has a larger legal lending limit and so may serve certain classes of customers more effectively than smaller banks. In the unregulated industries, the economies of scale actually realized, and the variety of services actually performed, are determined competitively. In banking, however, the regulatory authorities have the ultimate responsibility to choose the means of bank expansion best calculated to serve the public interest. Their decisions will inevitably affect the prices and range of products and services offered to consumers. The authority to permit the formation of branches is much more severely restricted than the power of the regulatory authorities to allow the creation of new banks. These long-standing traditions with respect to branch banking have had a deep-seated and farranging effect upon the entire banking structure of the country, and upon the performance of the banking system. They have greatly enlarged the number of banks, hampered the growth of banks to most efficient size, inhibited the development of specialized services by many banks, and diminished the effectiveness and efficiency of the banking system in the vital task of facilitating the movement of capital to its best uses throughout the Nation. In some degree, these limitations have been overcome through the solicitation of loans and deposits in areas beyond the powers to branch, and through the establishment of affiliates, satellites, or holding companies. These, however, represent generally inferior means for the expansion of banking operations. There is the mistaken belief that broader authority to permit branching would lead to harmful effects upon competition in the banking industry. Greater power to allow the formation of branches, however, would merely add to the discretionary authority of the regulatory agencies. Equipped with a more extensive range of alternatives, the banking authorities would be in a better position to choose the precise means of bank expansion most suitable to serve the needs of individual banking markets, and most likely to provide the required services and facilities at the least cost. Indeed, the risk of monopoly power is greatest where the greatest reliance is placed on unit banking. Since new branches might be able to operate profitably in markets where new unit banks could not survive, the prohibition of branching would exclude potential competitive forces from these markets. There is no consideration of the public interest which would justify an absolute withholding of the branching tool from the regulatory authorities. The only proper basis for the restriction of branching is the suitability of this means of bank expansion to serve emerging public demands in particular banking markets. Under this principle, the regulatory authorities should have the full discretion to authorize the formation of branches wherever they can serve the public interest to best advantage. G. Merger Controls The third means by which government influences the banking structure is through direct administrative control of mergers. In the unregulated industries mergers may be freely undertaken, subject only to prosecution under the antitrust laws. In banking, however, mergers require the prior administrative approval of a regulatory authority, and the regulatory agencies in reaching their decisions apply a variety of statutory criteria relating to the banking and public consequences of proposed mergers. The desire to merge is critically affected by the power to branch. Merger applications rarely appear in no-branch States because a merger under those conditions usually requires the closing of one of the merged banks. Thus, two tools of structure control are effectively lost where branching is prohibited, and needed bank expansion must take place almost entirely through new charters. The public benefits which may be derived from mergers stem basically from the economies of largescale enterprise, and the greater variety of services which larger firms may offer to consumers. These benefits will arise where increases in the scale of operations yield savings in costs, or where a broadening in the lines of production or the extension of operations to new markets permit greater dispersion of risks and thus allow the undertaking of ventures unsuitable for smaller firms. A larger and more broadly based bank may also be able to offer specialized services which are not profitable for smaller institutions, and should be able to move capital more efficiently from surplus to deficit areas. Moreover, the legal lending limits of banks require the presence of larger institutions to meet the needs of larger businesses most proficiently. In our public policy for the unregulated industries, we have generally distinguished between the growth of firms through internal expansion and their growth through merger. Growth through merger has been viewed with greater public concern because it entails the elimination of competitors and, for this reason, merger limitations have been imposed through the antitrust laws. The direct administrative controls applied to bank mergers are also based in part upon the competitive effects of such mergers, but, as we shall see, the banking authorities apply a variety of other public interest criteria in deciding bank merger cases. These criteria are specifically related to the fact that the banking structure is under direct public control. There is some probability that growth through merger may have a more adverse effect on the liveliness of competition than growth through internal expansion. However, there are countervailing considerations. A merger may enable a firm to acquire plant, personnel, and market-access not otherwise readily attainable, or attainable only at greater cost. More fundamentally, even though the intensity of competition may be adversely affected by growth through merger, merger may nevertheless produce benefits of larger-scale production which are in some degree passed on to consumers in the form of improved service or lower prices. The task of public policy is to allow those increases in the size of firms that are, on the whole, beneficial to consumers, while restricting those that are, on balance, harmful. There are two reasons why merger may often be the preferred course of expansion in banking, even though in comparable circumstances reliance on internal growth may be more appropriate for the unregulated industries. First, the banking authorities have a positive responsibility to see that the public convenience and need for banking services and facilities are met. In carrying out this responsibility, they do not have the authority to require the provision of service such as is found in the fully regulated industries like the "public utilities"; their choices are limited to the private proposals for bank expansion presented for their approval. If they find that a proposed merger will yield public benefits and they see no superior means for achieving these benefits either at hand or in clear prospect, they have a strong positive reason for approving the merger. In the unregulated industries, there is no public responsibility to fashion industry expansion according to the public need; reliance is placed on private initiative and no public authority faces the problem of choosing the form or method of industry growth. Second, in choosing the best means to serve the public convenience and need for banking services, the banking authorities must appraise the alternatives in terms of the effects on the solvency and liquidity of competing banks. Bank merger proposals are generally designed to provide new services to a community, to provide services at lower cost, or to enter new markets. The alternative means of achieving these purposes are new charters and de novo branching. If the existing banks in a market are poorly managed, financially weak, or unprogressive, such added competition may threaten their solvency or liquidity and merger may constitute the only effective means of bringing improved service to a community without posing a threat to bank viability. In the unregulated industries, there is no public concern to safeguard individual firms against failure. Indeed, in these industries freedom to compete and to eliminate less efficient rivals is essential to the reliance placed on private initiative to serve consumer demands. It is therefore appropriate in the freely competitive industries to impose more severe restrictions on growth through merger than are applied to banking. Bank mergers have sometimes been opposed on the ground that, although they may improve service for some classes of consumers, they may do so at the expense of others. Some classes of consumers, however, have needs which only larger banks can serve efficiently. If other classes of consumers are disadvantaged by a merger, a new opportunity is presented to competing banks and the banking authorities may respond by authorizing new charters or new branches. In this way, the needs of all classes of bank customers may be served most efficiently and most effectively. The Bank Merger Act of 1960 provided for direct administrative control of bank mergers by the banking authorities, and established broad public interest standards to guide the administration of these controls. In addition to the "effect of the transaction on competition (including any tendency toward monopoly)," the banking agencies are required to consider the financial history and condition of each of the banks involved, the adequacy of their capital structures, their future earnings prospects, the general character of their management and, most significantly, "the convenience and needs of the community to be served." Mergers are to be approved only where, after considering all of these factors, the transaction is found to be "in the public interest." Since the passage of the Bank Merger Act, however, two Supreme Court decisions have subjected bank mergers to the antitrust laws. This has given rise to ambiguities of policy and conflicts of purpose. The problems are both philosophic and procedural. There is no serious dispute about the desirability of applying antitrust principles to the unregulated industries. Since in those industries primary reliance is placed on individual initiative and private enterprise to meet consumer demands, there are justifiable reasons for preserving freedom of entry and restricting the acquisition of market power in order to enable the competitive forces to function. In banking, however, entry and expansion are under direct public control. The competitive forces are purposefully restricted in order to safeguard the viability of the banking system, and an effort to apply conventional antitrust principles in these circumstances is almost certain to conflict with bank regulatory objectives. This is well demonstrated by the difficulties that have been encountered under the Bank Merger Act since the Philadelphia and Lexington decisions brought bank mergers under the antitrust laws. Although the banking agencies must continue to reach their decisions according to the broader public interest standards set forth in the Bank Merger Act, their decisions are now subject to attack in the courts under the narrower standards of the antitrust laws. This impasse can be clearly resolved only be exempting bank mergers from the antitrust laws completely as has been done in other regulated industries, or by subjecting such mergers to the full application of those laws. If this latter course is chosen, the Bank Merger Act should be repealed. There would seem to be no valid reason for subjecting banks to more onerous premerger requirements than apply in the unregulated industries if bank mergers are to be subject to attack under the antitrust laws. More fundamentally, if it is to be public policy to apply conventional antitrust concepts to banking, it logically follows that bank entry and bank branching should also be free of direct public control. The least satisfactory course is the present one of entrusting regulatory powers to the banking agencies and judging the exercise of those powers on the assumption that the competitive forces are to be fully preserved and fully operative. It should be observed, however, that a decision to move toward free bank entry and expansion raises questions which go beyond the problems of banking structure. It is highly doubtful that bank operating practices could be effectively supervised, and the viability of the banking system sustained, without some form of public control over the banking structure. There is one intermediate course through which a reconciliation might be achieved between the Bank Merger Act and the antitrust laws without a statutory change. The courts, in antitrust cases involving bank mergers, could take cognizance of the fact that banking competition is restricted through public regulation, and that bank mergers receive prior adminstrative approval from a public authority according to broad public interest standards which transcend purely competitive considerations. This approach would not be as clear-cut as the other alternatives we have presented, and would undoubtedly leave large areas of uncertainty for long periods. Nevertheless, if in bank merger cases the courts considered the unique competitive conditions which prevail in the regulated industry of banking, there would be a greater likelihood that the antitrust criteria developed principally with the unregulated industries in mind could be adapted to banking without impairing the effectiveness of bank regulation. An effort to test this approach for accommodating these two basic strands of our public policy was recently undertaken by the Comptroller of the Currency as an intervening defendant in an antitrust action relating to the merger of the Mercantile Trust Company N.A. and the Security Trust Company, both of St. Louis. There is one administrative procedure under the Bank Merger Act which should be modified if that Act is to remain in force. At present, the banking agencies not directly involved in a merger decision are required to submit advisory opinions on the "competitive factor" to the responsible agency. Since this factor comprises only one of the seven considerations required to be taken into account, the advisory opinions do not represent a judgment on the desirability of a merger. Nevertheless, differences between the advisory opinions and the decisions on mergers have often been falsely cited as evidence of differences in merger policy among the banking agencies. Moreover, five years of experience under the Bank Merger Act have demonstrated that the advisory opinions of the banking agencies not faced with the responsibility of decision are ordinarily routine and rarely present facts or ideas unknown to the responsible agency. There seems to be no proper reason for continuing this procedure. Retention of the Justice Department advisory opinions may appear to have greater justification. However, the role of the Justice Department in bank merger cases will ultimately rest on the resolution of the more fundamental issue of the proper applicability of the antitrust laws to the regulated industry of banking. II. Evolution of the Banking Structure, 1900-65 HE COMMERCIAL BANKING industry is a service T industry that has customer relationships throughout the economy. Consequently, the evolution of the banking structure has been significantly conditioned by changes in general economic activity. The other principal influence on the banking structure has been the system of public controls described in the preceding section. Among these controls, branching limitations have had the greatest effect on the banking structure as evidenced by the disparate conditions found among unit and branch banking States. The evolution of the banking structure since 1900 may be sketched in broad terms by a comparatively few numbers. (See Chart 1 and Tables 1 and 2.*) In 1900, there were approximately 13,000 commercial banks, and they operated only about 100 branches. Twenty years later, the number of banks had risen to 29,000, and the number of branches to 1,300. The Great Depression took a heavy toll and, by the end of 1934, the number of commercial banks had dropped to about 15,400. Branches, on the other hand, had begun to assume greater importance as indicated by the nearly 3,000 in operation that year. During the next 30 years, there was a gradual decline in the number of banks which was reversed only in the 1963-64 period. However, branch operations became increasingly important during this period. Although in 1919 only 4 percent of commercial banking offices were branches, by the end of 1964 the proportion of branches had risen to 51 percent. We turn now to a brief examination of the evolution of the banking structure, with particular emphasis on the period 1961-65. A. Rapid Expansion: 1900-20 Although the statistics on banking structure before 1920 are relatively sparse, it would be misleading to *The tables supporting this section will be found in Section IV, The Data. use the 1920 banking structure as a benchmark against which to measure succeeding developments. Spurred by a period of economic expansion in both the industrial and agricultural sectors, and uninhibited by significant legal barriers to entry, an unprecedented expansion of about 130 percent occurred in banking facilities during the 1900-20 period. This expansion was almost entirely in the form of new banks, and it was concentrated heavily in the agricultural States of the Midwest and Great Plains. Branch operations at that time were relatively insignificant. B. Sharp Retrenchment: 1921-34 In the 13 years following 1921, the number of commercial banks declined by approximately half. The major part of this reduction took place during the depths of the depression, 1930-33, when 9,000 banks failed and another 2,300, many of which were in financial difficulties, were absorbed by other banks. Perhaps of greater significance, however, were the more than 5,000 bank suspensions which occurred during the 1921-29 period while most sectors of the economy were prosperous. A number of factors contributed to the unstable condition of the banking system in the 1920's. The great increase in the number of banks from 1900 to 1920 had raised the number of banking offices in relation to population to a historic high. Many banks were established in small, farm-oriented trading centers at a time when the agricultural sector was participating in the general prosperity; the pronounced weakness in this sector during the 1920's precipitated the failure of a number of these small, specialized institutions. The increased use of automobiles revolutionized shopping habits, and in so doing increased the competition among scattered banks. The growth of large-scale industrial and commercial activity increased the demand for services which only large banks could offer, and thus led to the absorption of a number of smaller banks. Chart 1 Commercial banks and commercial bank branches in the U. S., 1920-1964 Number of banking offices 30,000 25,000 15,000 10,000 5,000 1920 1924 1928 1932 1936 1940 1944 1948 1952 1956 1960 1964 Source: Table 1 The Midwestern and Plains States in which much of the bank expansion of the 1900-20 period took place were mainly unit banking States, and those States also accounted for a very sizeable proportion of the banks which failed in the 1921-34 period. In this period of banking instability, the subsequent growth of branch banking was foreshadowed. By the end of 1934, branches represented 16 percent of all commercial banking offices, compared with 4 percent in 1919. (See Table 3.) G. Consolidation: 1935-46 The reorganization of the banking structure forced by the depression was largely completed by the end of 1934. At that time, there were 15,353 commercial banks and 2,973 branch offices in operation. The next 12 years, including the period of World War II, were characterized by relative stability in the banking structure. Principally as a result of mergers, the number of banks declined slowly to 14,044 at the end of 1946. Although the number of branches increased by 1,008 during the period, to 3,981, this did not offset the decline in number of banks, so that the number of commercial banking offices fell from 18,326 to 18,025. D. Postwar Adjustments; 1946-60 The most striking feature of the banking structure in 1946 was the fact that fewer commercial banking offices were in operation than at the end of the period of drastic banking reorganization 12 years earlier. Yet, in the interim, wartime demands had generated a high level of economic activity, and income and population had increased substantially. Gross National Product in 1954-dollars was $282.5 million in 1946, compared with $138.5 million in 1934, an increase of 104 percent. The population of the country increased by 11 percent in the same period. Further, the wartime shortages of many goods and the complete absence of others, coupled with the relatively high levels of wartime income, had created a backlog of demand which promised to spur postwar economic activity. It is plain that in 1946 the country as a whole required additional banking facilities to allow the banking needs of the public to be met fully and effectively. This was especially true in those urban areas Chart 2 Commercial banks and branches, by State groups classified by branch law, selected years Number of banking offices Statewide branch banking States 12,000 Unit banking States Limited branch banking States j l p f f Branches | ' | Head offices 10,000 8,000 6,000 4,000 2,000 0 1919 1934 1946 1960 1964 1919 1934 1946 1960 1964 1919 1934 1946 1960 1964 Source; Tabje 3 that had experienced the greatest economic growth during the war, and in those rural areas where banking retrenchment in the 1920's and 1930's had been most extreme. In the 14 years from the end of 1946 to the end of I960, the number of commerical banking offices increased from 18,025 to 23,716. Although the number of banks declined from 14,044 to 13,473 during the period, as a result of merger absorptions in excess of new bank formations, there was a great increase in the number of de novo branches. Branch offices, including those resulting from mergers, increased from 3,981 at the end of 1946 to 10,243 at the end of 1960. There were, it should be noted, significant variations among the States in the increase of commercial banking offices: 67 percent in statewide branching States, 35 percent in limited branching States, and 10 percent in unit banking States. (See Chart 2.) The overall increase of 32 percent in commercial banking offices from 1946 to 1960, although substantial, failed to keep pace with the growth of real Gross National Product, which was 56 percent higher in 1960 than in 1946. There thus remained at the end of the period as great a need for additional banking facilities as prevailed at the beginning. E. Economic Growth and Bank Expansion: 1961-65 1. NEW BANKS AND TOTAL NUMBER OF BANKS During the period from 1961 to mid-1965, the Nation enjoyed its longest peacetime expansion in history. Real Gross National Product was 17 percent higher in 1964 than in 1960. Population continued to grow at a much higher rate than during the economically depressed 1930's. The number of commercial banking offices increased by 18.5 percent during the years 1961-64, compared with a 12.9 percent increase in 1957-60, and an 8.7 percent increase in 1953-56. The 1961-64 expansion occurred in response not only to the banking needs generated by the economic growth of those years, but also to the unfilled demands that existed at the beginning of the period. The number of commercial banks increased slightly during the period 1961-64, the first such increase over a four-year span since 1945-48, and only the second since 1920. Although new charters averaged only about 91 per year during the period 1947-60, the average rose to about 235 in the years 1961-64. (See Chart 3.) Only 20 percent of the new commercial banks established in the 1947-60 period were National Chart 3 Newly-organized commercial banks in the U. S., by class of bank, 1958-1964 Number of banks 240 | 200 I | | j | | | National Banks I I H I State Banks 80 1958 1959 1960 1961 1962 1963 Chart 4 Newly-organized commercial banks, by class of bank Source: Table 4 10 Chart 5 Commercial banks and branches by class of bank, 1960-1964 Number of banking offices 18,000 j I Branches I Head offices 15,000 12,000 9,000 3,000 N S 1960 N - National Banks S - State Banks N S 1961 N S 1962 N S 1964 Source: Table 5 Banks, but the proportion rose to 49 percent in 1961-64. (See Chart 4 and Table 4.) The higher rate of chartering led to a 2.4 percent net increase in the total number of National Banks in 1963 and a 3.4 percent increase in 1964; the comparable net increases in State banks were 0.3 percent and 0.4 percent. (See Table 5.) The rate of chartering of National Banks declined, however, in the second half of 1964 and the first half of 1965. The volume of new chartering was strongly influenced by the prevailing branch laws. Of the 826 banks chartered in 1962-64, 59 percent were in the 16 unit banking States, 22 percent in the 17 limited branching States, and 19 percent in the 17 statewide branching States and the District of Columbia. (See Table 6.) Although the majority of new banks were located in unit banking States, it is interesting to note that the ratio of new banks to total banks in existence was higher in statewide branching States than in unit banking States. This pattern is attributable mainly to the much larger number of existing banks in unit banking States; at the end of 1964, there were 7,173 N S 1963 banks in unit banking States and 1,087 in statewide branching States. In every year between 1952 and 1964, the number of commercial banks increased in unit banking States, the total increase in the 12-year period being 13.1 percent. In limited branching States, a slight decrease occurred in the number of banks each year in the same period, with a total decline of 13.6 percent. There were 19 percent fewer banks in statewide branching States at the end of 1964 than at the end of 1952, though the number increased slightly in 1963 and 1964. These movements in the total number of banks are largely explained by the relatively infrequent disappearance of banks through merger in unit banking States, and by the fact that the branching alternative tended to hold down the number of new banks in branching States. 2. BRANCH EXPANSION AND THE TOTAL NUMBER OF BANKING OFFICES Despite the increase in the number of new banks in recent years, most of the expansion in banking facilities has taken the form of de novo branching. 11 Chart 6 Percentage changes in real disposable income, population, and commercial banking offices for States grouped by branch law, 1951-1964 20 Real disposable personal income1 1 1951-1963 Population The number of branches operated by National Banks rose from 5,325 at the end of 1960 to 7,957 at the end of 1964, a 49 percent increase. During the same period, branches of State banks increased by 30 percent, from 4,918 to 6,381. (See Chart 5.) Continuing the long-term trend, branches represented 43 percent of total commercial banking offices at the beginning of the period and 51 percent at the end. The rates of growth in population and income since 1950 for statewide branching States have outdistanced the comparable rates for the limited branching and unit banking States. (See Chart 6.) For example, in the statewide branching groups population increased by 16.6 percent and 7.8 percent, respectively, for the periods 1956-60 and 1961-64. (See Table 7.) The comparable figures for the limited branching States were 6.9 and 5 percent, and for the unit banking States, 9 and 5.5 percent. Personal income movements showed a similar spread for the same two periods; the percentage increases were 38.8 and 27.5 percent for the statewide branching group, 26 and 20.6 percent for the States with limited branching, and 31 and 20.6 percent for the unit banking group. These differential rates of economic growth were accompanied by marked differences in the percentage increase of total commercial banking offices during 12 Commercial banking offices .Source: Table 7 1961-64. In the statewide branching States, the increase was 30.4 percent; in the limited branching States, the figure was 18.4 percent; while the unit banking States experienced only a 9.9 percent increase. 3. STRUCTURAL CHANGE THROUGH MERGER The principal avenue for the exit of banks in recent years has been absorption through merger. Most mergers in the postwar period were not of an emergency character involving near-insolvency on the part of the acquired bank. This is in sharp contrast to the situation found in many mergers of the early 1930's. From the date the Bank Merger Act went into effect in 1960, through June 30, 1965, 459 merger transactions took place in which the resulting bank was a National Bank; these involved the absorption of 473 banks. The majority of the acquired banks were small; 317, or 67 percent, had assets of less than $10 million; and 416, or 88 percent, had under $25 million in assets. (See Chart 7 and Table 8.) Only 8 of the 459 transactions, or less than 2 percent, involved the union of 2 banks each having more than $100 million in assets. Less than 8 percent took place in unit banking States where a merger would usually require the closing of one of the merged offices. Chart 7 Classification of acquired banks by size in those mergers under- the Bank Merger Act in which a National Bank resulted, through June 3 0 , 1965 Assets less than $10 million— 317 banks (67.0 percent) Assets $25 to $49.9 million— 35 banks (7.4 percent) Assets $50-to $99.9 million— 14 banks (3.0 percent) Assets $100 million or over8. banks (1.7 percent) 4. T H E INCIDENCE OF BANK FAILURES As contrasted with earlier periods, the bank failure rate has been exceedingly small within recent years. In the period from 1952 to the middle of 1965, only 62 commercial banks failed. (See Table 9.) Of these, 9 were National Banks, 33 were insured State banks, and 20 were noninsured State banks. These figures show that commercial bank failures have averaged less than 5 per year out of a total bank population of 13,500 to 14,000. 13 III. The Future of the Banking Structure HE MARKETS FOR BANKING services vary from those composed of small depositors who require only convenient access to savings accounts and checking facilities, to the largest business firms which have need for a great variety of banking services throughout the country and even internationally. In this spectrum of markets, there is a role for banks of a diversity of sizes. Well-managed, efficient, small banks have a special appeal to certain classes of consumers and a unique competence to serve their needs. Equally, there are banking requirements that only large institutions can meet efficiently and effectively. The task of structure policy is to seek that balance among banks of various sizes which will accord proper recognition to the production advantages of each, and to the specific capabilities each may possess for meeting the varied demands of the consuming public. The record of structural change in recent years demonstrates distinct progress toward that goal. Yet there remains one obstacle which continues to hamper the attainment of an ideal banking structure, and which will deeply influence the future performance of the banking system. The industrial and business structure of the Nation, which has made possible the great achievements of the economy through the years, could not have been attained without the freedom of trade we have enjoyed within and among the States of the Union. The freedom of labor and capital to move throughout the country in response to anticipated public demands, and the liberty to undertake creative new ventures, have been indispensable elements in the lively and spirited economy which has characterized our history. Banking, along with certain of the other regulated industries, represents the one major segment of the economy in which this basic principle of freedom of trade has not been fully applied. As a result, many banks have been barred from the complete realization of production economies, and many communities have been deprived of the broader range of banking services which could have been provided to them. These limitations over branching may, in a sense, be attributed to the duality of the banking system, but they are not inherent in that system. Properly conceived, the dual banking system can be an effective T 14 instrument for perceptive adaptation of banking to the Nation's needs. The dispersion of banking controls among the States and the Federal Government broadens the opportunity to develop new ideas and to test new approaches. It enables either segment of the dual banking system to supplement the other where deficiencies arise in service to the community. This is the great strength of the dual banking system. Some observers have equated the health of the dual banking system with uniformity and equality. They are concerned lest either segment of the system gain an advantage over the other. There is, however, no risk that either part of the dual banking system will achieve a publicly harmful position of superiority. Competitive superiority can be attained only through more efficient and more effective service to the public, and it can never be in the public interest to restrict the initiative of one segment of the dual banking system for the purpose of protecting the competitive position of the other. The best hope for the future lies in greater freedom for each of the systems to meet the ever-changing public demands for an ever-increasing variety of banking sendees and facilities. The Nation looks forward to a future of growing population, improved personal skills, rising incomes, increasing accumulation of capital, advancing technologies, a broadening range of products and services offered to consumers, and expanding interests throughout the world. To meet these needs and opportunities, a sensitively responsive banking system, alert both to present and future requirements, is essential. No tool that is useful to improve the functioning of the banking system should arbitrarily be withheld, nor should any be applied except in furtherance of that aim. The ultimate surpassing factor in the progress of the economy has been the spirit of initiative and innovation which abounds in our society. That spirit must be sustained and nourished in the banking industry if the promise of the future is to be fully realized. The continuing challenge is to devise new and better ways to serve the public demand. This calls for persistent questioning of present methods, ingenuity and inventiveness in the conception of improvements, and the enterprise to carry them out. The Data T A B L E 1 .-—Commercial banks and commercial bank branches in the United States,* 1920—64 Number of banks Percent changein banks Number of branches Percent change in branches Total coTHtnerCial banking offices Percent change in total offices 30, 367 29, 086 1,281 0.38 2,297 -3."l0' 79.31 30, 482 28,185 24, 968 -11.41 3,138 36.61 28,106 — 7.79 17, 802 - 2 8 . 70 3,195 1.82 20, 997 —25.29 15, 120 -15.07 3,270 2.35 18,390 — 12.42 14, 344 -5.13 3,525 7.80 17,869 -2.83 „ .26 13, 992 -2.45 3,924 11.32 17,916 14,164 1.23 4,349 10.83 18,513 3.33 14,049 — .81 5,274 21.27 19,323 4.38 13,642 - 2 . 90 7,360 39. 55 21, 002 8.69 13,473 -1.24 10,243 39.17 23,716 12.92 13,760 2.13 14, 338 39.98 28, 098 18.48 *Data exclude banks and banking offices in territories. fThe June 30. of years-end. I i n e 1920 lyZU data are as of oijune ou. The I he remaining data are as or Sources: Office of the Comptroller of the Currency, Annual Report, various years; Board of Governors of the Federal Reserve Syst<tem, Federal Reserve Bulletin, various issues; Board of Governors of the Federal Reserve System, Banking and Monetary Statistics, 1943.•3. 1920f 1924 1928 1932 1936 1940 1944 1948 1952 1956 1960 1964 The figures presented in the text and tables represent, insofar as possible, the total number of commercial banks and banking offices located within the various States of the United States. Sources which justified their total figures by a breakdown among States were used in preference to sources which did not. This procedure was adopted simply as an aid in evaluating the probable accuracy, especially for the earlier years, of the limited sources available. 1920 1924 1928 1932 1934 1936 1940. 1944 1946 1948. 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 The second procedure applied involved the use, wherever available in the form indicated above, of reports of the Office of the Comptroller of the Currency for National Bank Data, and reports of the Federal agencies having jurisdiction over State banks for State bank data. These two procedures lead to slightly different total bank and total banking office figures than have appeared in the reports of any one banking agency. T A B L E 2.—Commercial banking offices, gross national product and population of the United States, 1920-64 Percent Percent Percent Gross national Commercial Population change change change product Tear banking (4-year {4-year (4-year {millions) {billions of offices* periods) periods) periods) 7954 dollars) 106.5 30, 367 114.1 30, 482 0.4 120.5 28, 106 5. 6 -7.8 181. 8f 124.8 , 20, 997 -25.3 130.1 3.6 -28." 4J 126.4 18,326 138. 5 33." 2* 128. 1 2.6 18,390 173.3 -12.Y 18.8 132. 5 3.4 17,869 — 2. 8 205.8 133.9 1.1 17,916 .3 317.9 139. 9 18,025 282. 5 146.7 18, 513 293.1 -7.8 149.3 18, 686 292.7 9.' 6 151.9 18,960 318.1 154.0 19,134 341.8 156.4 19,323 4.4 353. 5 20. 6' 159.0 19, 609 369. 0 6*6 161.9 , . .. . 19.950 363.1 165.1 . 20, 428 392.7 168.1 21,002 402. 2 8.'7' 13.8 171.2 21,559 407. 0 " ' 7." 5 174.1 22, 139 401.3 177.1 , 22, 894 428. 6 180.0 23, 716 440.2 12. 9 9.4 183. 1 24. 537 447.9 7.1 185.9 25. 518 476.8 188.1 26, 793 492. 6 191.3 28, 098 516.0 6.3 18.5 17.2 •Excludes offices in territories. 11929. £1929-32. Sources: Banking offices—Office of the Comptroller of the Currency, Annual Report, various years, and Board of Governors of of the Federal Reserve System, Federal Reserve Bulletin, various issues. Gross national product—Department of Commerce, Survey of Current Business, various issues. Population—Department of Commerce, Statistical Abstract of the United States, various years. 17 TABLE 3.—Commercial banks and branches, by States 1919\ Banks ... . . Total Branches Total 81 704 21 179 102 883 134 39 44 0 16 4 134 55 48 208 115 234 33 0 32 59 0 523 Total . . . . . . . .... . Percent change for group from previous date Unit Banking: Arkansas Colorado Florida . Illinois Iowa Kansas. . Minnesota . . Missouri M!ontana Nebraska New Hampshire North Dakota Oklahoma Texas West Virginia Wyoming 9 12 30 1,083 153 59 51 208 147 293 33 64 69 179 10 26 57 75 5 90 126 254 15 46 569 243 68 104 26 126 60 75 199 30 33 20 10 12 31 311 1 14 15 266 47 436 125 86 378 3,413 397 3,810 Total Percent change for group from previous date ... 134 59 146 70 87 230 1,667 1,236 2,903 — 51.2 211.3 —23.8 334 720 20 25 354 745 217 322 3 1 80 16 25 1,032 576 334 233 347 515 444 147 39 25 53 554 469 200 232 45 277 633 303 360 113 218 24 21 5 216 105 321 435 216 398 43 134 35 113 0 880 797 685 1,105 655 212 616 166 91 1 569 251 511 43 1 413 655 229 106 36 0 851 327 381 118 1,109 1,253 1,504 519 448 938 31 20 9 550 468 947 329 328 636 46 69 94 10, 608 873 11,481 1,147 1,468 1,376 1,676 1,304 1,446 1,546 1,146 69 882 6 0 2 0 0 0 0 0 0 2 1 0 335 148 0 0 0 0 13,807 11 925 . ... 35 1,029 575 254 418 . Total 18 800 265 33 421 125 86 368 462 371 253 .... Branches 144 47 21 Percent change for group from previous date Limited Branching: Alabama Georgia Indiana Kentucky Louisiana Massachusetts Michigan Mississippi New Jersey New Mexico New York Ohio Pennsylvania South Dakota Tennessee Virginia Wisconsin Banks 17 283 ooo Statewide Branching: Alaska f Arizona California Connecticut Delaware District of Columbia Hawaii! Idaho M!aine Maryland Nevada North Carolina Oregon Rhode Island South Carolina Utah Vermont Washington 1934 1,450 468 371 255 1,376 1,676 1,304 1,446 1,546 418 1,148 70 882 925 1,450 335 148 13,818 851 1,196 213 375 397 730 7,045 1,628 8,673 — 33.6 86.5 -24.5 230 160 155 878 622 752 5 0 0 0 95 0 235 160 155 878 717 752 690 702 6 0 696 702 65 210 1 0 416 957 181 63 0 0 0 0 125 435 0 2 125 437 66 210 416 957 181 63 6,641 109 6,750 -51.9 890.9 -51.2 1,281 29,109 15,353 2,973 18,326 27, 828 Total United States 132.1 —44.8 — 37.0 Percent change for group from previous date *Branch law classification used is that which appeared in The National Banking Review, 1, March 1964, p. 341. The basis foi classification was pragmatic, rather than statutory. fBranches are as of 1920. {Included after admission as States. 18 grouped by branch lavu^ selected years; 1919—64 1946 Banks Branches 1960 1950 Total Banks Branches Total Banks Branches 1964 Total Banks Branches Total 13 10 117 70 20 12 12 32 47 133 7 183 51 9 145 50 56 87 27 173 1,636 197 53 90 81 82 129 237 35 504 194 89 141 70 33 283 40 183 1,753 267 73 102 93 114 176 370 42 687 245 98 286 120 89 370 12 16 200 66 20 15 12 24 46 121 8 152 51 10 133 55 49 97 46 241 2,232 285 63 81 109 119 160 355 56 707 249 110 237 100 50 373 58 257 2,432 351 83 96 121 143 206 476 64 859 300 120 370 155 99 470 3,384 1,054 4,054 5,108 1,087 5,573 6,660 10.6 -22.6 100.5 50.9 3.1 37.5 30.4 238 421 443 355 190 171 380 193 253 55 402 585 703 174 297 305 561 82 97 307 144 173 370 575 132 430 52 1,368 635 784 59 210 265 158 320 518 750 499 363 541 955 325 683 107 1,770 1,220 1,487 233 507 570 719 252 431 431 348 209 159 361 196 236 63 354 547 591 173 294 277 578 135 159 437 214 231 523 804 188 621 80 1,802 869 1,139 72 290 466 168 387 590 868 562 440 682 1,165 384 857 143 2,156 1,416 1,730 245 584 743 746 10 207 123 39 20 35 880 20 14 35 45 1,087 143 53 55 11 202 112 38 19 56 979 50 20 45 61 1,181 162 58 64 47 64 170 8 227 70 23 149 59 72 122 42 68 94 17 161 75 44 30 12 9 115 89 132 264 25 388 145 67 179 71 81 237 43 63 164 8 225 70 16 148 55 70 118 55 71 119 19 218 102 60 49 24 11 144 98 134 283 27 443 172 76 197 79 81 262 1,410 1,651 3,061 1,362 2,022 5.4 -3.4 22.5 — 15.4 33.6 j 219 316 489 390 155 187 434 203 348 44 672 674 1,016 169 294 315 554 23 30 83 34 62 143 198 52 133 6 694 176 124 44 68 86 145 242 346 572 424 217 330 632 255 481 50 1,366 850 1,140 213 362 401 699 225 397 487 385 165 182 442 201 324 51 629 659 971 169 297 313 554 26 42 109 44 77 177 239 68 165 15 786 226 193 49 98 114 152 251 439 596 429 242 359 681 269 489 66 1,415 885 1,164 218 395 427 706 6, 479 2, 101 8, 580 6,451 2,580 9,031 5,726 5,841 11,567 5,500 8,198 13,698 — 8.0 29.1 -1.1 -0.4 22.8 5.3 -11.2 126.4 28.1 — 3.9 40.4 18.4 239 143 187 874 810 615 683 596 110 411 66 176 384 855 180 55 232 154 199 891 663 612 680 600 110 418 75 150 386 908 180 53 19 4 6 2 164 0 6 1 0 2 2 22 1 5 0 0 251 158 205 893 827 612 686 601 110 420 77 172 387 913 180 53 237 192 309 966 673 587 689 626 121 426 74 156 389 1,011 182 55 45 1 0 0 183 22 6 23 0 11 3 28 18 8 0 0 282 193 309 966 856 609 695 649 121 437 77 184 407 1,019 182 55 245 246 424 1,030 675 594 720 643 129 432 73 163 417 1,130 184 68 88 1 0 0 221 47 9 53 1 25 19 42 30 31 0 0 333 247 424 1,030 896 641 729 696 130 457 92 205 447 1,161 184 68 219 142 184 871 649 614 677 596 110 409 64 151 383 851 180 55 20 1 1 3 3 161 1 i 6 0 0 2 2 25 1 4 0 0 6,155 229 6,384 6,311 234 6,545 6, 693 348 7, 041 7, 173 567 7,740 — 7.3 110. 1 -5.4 2. 5 2.2 2.5 6. 1 48.7 7.6 7.2 62.9 9.9 14, 044 3,981 18,025 14,124 4,836 18,960 14, 338 13.473 10,243 23,716 13,760 28, 098 — 8.5 33.9 -1.6 0.6 5.2 2.1 40.0 -4.6 111.8 25. 1 18.5 21.5 Sources: Office of the Comptroller of the Currency, Annual Report, various years; Board of Governors of the Federal Reserve System, Banking and Monetary Statistics, 1943; Board of Governors of the Federal Reserve System, Federal Reserve Bulletin, various issues. 19 TABLE 4.—Number of newly organized commercial banks in the United States, by class of bank, 7947-64 National Tear 1947 1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 17 15 Total, 1947-60 1961 1962 1963 1964 State Total 92 65 11 7 9 15 16 16 60 61 53 58 52 55 28 88 109 80 71 68 62 73 68 71 116 30 20 93 67 123 87 18 24 34 78 94 103 96 118 137 260 1,019 1, 279 26 65 164 205 86 120 136 136 112 185 300 341 Total, 1961-64 460 478 938 Total, 1947-64 720 1,497 2,217 Source: The National Banking Review, 2, March, 1965, p. 306. TABLE 5.—Commercial banks and branches in the United States,* by class of bank, 1960-64 State banks National banks Tear Number Percent Number Percent of banks change in of change in branches branches banks 1960 1961 1962 1963... 1964 4 529 4,512 4,504 4,614 4,772 -0.38 — .18 2.44 3.42 5,325 5,855 6,445 7,209 7,957 9.95 10.08 11.85 10.38 Total offices 9,854 10,367 10,949 11,823 12,729 Percent Number Percent Number of change in of banks change in branches branches banks 8.944 8^920 "— 6.27 8,924 .04 8,954 .34 8,988 .38 4,918 5.250 '"e.is 5:645 7.52 6,016 6.57 6; 381 6.07 Total offices 13,862 14,170 14, 569 14, 970 15, 369 Total offices National and State banks 23, 716 24, 537 25,518 26, 793 28, 098 *Banks and banking offices in territories excluded. Sources: The National Banking Review, 2, March 1965. Office of the Comptroller of the Currency, Annual Report, various years, and Board of Governors of the Federal Reserve System, Federal Reserve Bulletin, various issues. 20 TABLE 6.—Number of newly organized commercial hanks and total commercial banks, * by State groups classified by branch law, 1952-64 Statewide branchbanking Limited branch banking Unit banking All States Tear Total banks 1952 19^3 1954 . 1953 1956 195" 1958 195) . 196u 1961 1902 196 } 1,342 1,334 1,257 1,202 1,161 1,119 1,090 .083 1,054 ,041 022 1,037 1, 087 New banks New as percent total 16 18 9 22 12 15 9 17 14 22 1.19 1.35 0.72 1.83 1.03 1.34 .83 1.57 1.33 2 12 2. 74 5.40 6. 90 •>R 56 75 Total banks 6,367 6,300 6,204 6,090 5,995 5,927 5, 845 5,761 5, 726 5, 660 5, 575 5,524 5', 500 New banks New as percent total Total banks New banks New as percent total 22 21 18 31 33 24 25 23 39 34 44 57 79 .35 .33 .29 .51 .55 .40 .43 .40 .68 .60 .79 1.03 1.44 6,340 6,350 6,378 6,423 6,486 6,521 6,567 6,632 6,693 6, 731 6,831 7,007 7,173 35 29 44 63 78 48 62 78 84 56 113 187 187 .55 .46 .69 .98 1.20 .74 .94 1.18 1.26 .83 1.65 2.67 2.61 Total banks New banks 14, 049 13,984 13,839 13,715 13,642 13,567 13, 502 13,476 13,473 13,432 13,428 13, 568 13,760 73 68 71 116 123 87 96 118 137 112 185 300 341 New as percent total .52 .49 .51 .85 .90 .64 .71 .88 1.02 .83 1.38 2.21 2.48 *Banks in territories are excluded. Sources: New bank data—77t« National Banking Review, 2, March 1965, p. 350. Total bank data—Office of the Comptroller of the Currency, Annual Report, various years, and Board of Governors of the Federal Reserve System, Federal Reserve Bulletin, various issues. 21 T A B L E 7.—Commercial banking offices,population and personal income by State groups classified by branch law, * 7934—64 Percent change 193546 Percent change 1955 194750 Percent change 195155 Percent change 195660 Percent change 196164 Item 1934 1946 Commercial banking offices: Statewide branch banking f. Limited branch banking. . . Unit banking 2,903 8,673 6,750 3,061 5.4 8,580 — 1.1 6,384 — 5.4 3,384 9,031 6,545 10.6 5.3 2.5 3,875 9,909 6,644 14.5 9.7 1.5 5,108 11,567 7,041 31.8 16.7 6.0 6,660 13,698 7,740 30.4 18.4 9.9 18, 326 18, 025 - 1 . 6 18,960 5.2 20, 428 7.7 23,716 16.1 28, 098 18.5 28, 494 73,182 38,216 30, 466 79,108 41,668 6.9 8.1 9.0 34,811 84, 686 44, 810 14.3 7.1 7.5 40, 596 90, 566 48, 824 16.6 6.9 9.0 43, 771 95,101 51,490 7.8 5.0 5.5 10.7 151,242 8.1 164,307 8.6 179,986 9.5 190,362 5.8 All State total Population (thousands): Statewide branch banking f. 21, 279 Limited branch banking. . . 68, 399 36, 694 Unit banking All State total 126, 372 139, 892 Personal income (millions of current dollars): 9,970 Statewide branch banking!. Limited branch banking. . . 30, 885 Unit banking 12, 627 All State total 33.9 7.0 4.1 1950 1960 1964 39, 047 291.6 47, 853 91, 974 197.8 118,222 45, 395 259.5 59, 368 22.6 68, 758 28.5 159,289 30.8 78, 581 43.7 95, 441 34.7 200, 679 32.4 102, 944 38.8 26.0 31.0 121,644 242,051 124,150 27.5 20.6 20.6 53, 482 176,416 229.9 225, 443 27.8 306, 628 36.0 399, 064 30.1 487, 845 22.2 Real disposable personal income (millions of 1954-dollars): Statewide branch banking %. Limited branch banking. . . Unit banking All State total 44, 589 106, 346 54, 298 48, 520 119,074 60,136 8.8 60, 321 12.0 140, 069 10.8 69, 769 24.3 72, 991 17.6 158,886 16.0 82, 485 21.0 13.4 18.2 §84, 208 §174,989 §91, 994 A15.4 A10.1 AH.5 205, 233 227, 730 11.0 270,159 18.6 314, 362 16.4 §351,191 All. 7 •Branch law classification used is that which appeared in The National Banking Review, 1, March 1964, p. 341. The basis for classification was pragmatic, rather than statutory. f Alaska and Hawaii excluded until admission as States. JAlaska and Hawaii excluded. §1963 data. A1960-63. Sources: Banking office data—Office of the Comptroller of the Currency, Annual Report, various years. Board of Governors of the Federal Reserve System, Federal Reserve Bulletin, various issues. Board of Governors of the Federal Reserve System, Banking and Monetary Statistics, 1943. Population and personal income data—Department of Commerce, Statistical Abstract of the United States, various years. Disposable personal income data—Department of Commerce, Survey of Current Business, April 1965. 22 TABLE 8—Mere under the Bank Merger Act, 1960, in which the resulting institution was a National Bank> classified by size of acquiring and acquired banks, through June 30, 1965 Acquired banks Acquiring bank\ Assets less than $10 million Assets Assets Assets Assets Assets less than $10 million $10 million to $24.9 million $25 million to $49.9 million $50 million to $99.9 million $100 million or over Total Assets $25 Assets $10 Assets $50 million to million to million to $24.9 million $49.9 million $99.9 million Assets $100 million or over Total 49 63 52 54 99 6 14 19 60 4 7 24 1 13 8' 49 69 70 81 204 317 99 35 14 8 J473 *Includes all forms of acquisition. fFor this classification, the bank with the larger total assets in each transaction was considered to be the acquiring bank. J459 transactions were included. Since 6 of these involved 3 banks and 4 involved four banks, 473 banks were absorbed in the 459 transactions. TABLE 9.—U.S. Commercial bank failures * 1952-65 Number of bank failures Bank failure rate per 10,000 banks Tear State insured National State noninsured Total National 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 (6 months) 0 0 0 2 1 0 1 0 0 2 0 0 1 2 3 2 2 3 1 1 3 3 1 3 0 2 6 3 1 1 2 0 1 1 5 0 1 4 2 0 1 1 4 3 4 5 3 2 9 3 2 9 2 2 8 6 Total 9 33 20 62 0 0 0 4.3 2.2 0 2.2 0 0 4.4 0 0 2.1 State insured 3.5 2.3 2.3 3.5 1.2 1.2 3.5 3.5 1.2 3.5 0 2.3 6.9 Business failure rate per 10,000 firms 28.7 33.2 42.0 41.6 48.0 51.7 55.9 51.8 57.0 64.4 60.8 56.3 53.2 *For insured banks, the figures show the number of cases requiring FDIG disbursements. For noninsured banks, the figures show the number of cases described by the FDIG as "noninsured bank failures." Sources: Federal Deposit Insurance Corporation, Annual Report, 1952 through 1963, for bank data for those years. Bank data for 1964 and 1965 from FDIG, Report to the Comptroller of the Currency of Liquidation and Insurance Expenses, November30, 1964, and supplement. Business failure data from Economic Report of the President, 1965. 23 ANNUAL REPORT, 1964 INDEX Statistical Tables Table No. Title 1 Number of commercial banks, and banking offices, and total assets, by class of bank, end of 1963 and 1964, and percent change 1963-64 2 Total assets of commercial banks, mutual savings banks, savings and loan associations, and credit unions; end of December 1962, 1963, and 1964, and percent change 1963-64 3 Assets and liabilities of national banks on December 20, 1963; December 31, 1964; and percent change December 1963 to December 1964 4 Percent distribution of assets, and liabilities, of national banks, December 1963 and 1964 5 Demand and time deposits; dollar amount, and percent distribution, by type of bank, December 1963 and 1964 6 Number of national banks and banking offices, by States, December 31, 1964 7 National bank charter applications, and charters issued, by States, January 1-December 31, 1964; received, approved, rejected, abandoned, and pending as of December 31, 1964 8 Charters, liquidations, and capital stock changes of national banks, calendar 1964 26 Page 27 28 29 30 31 32 33 34 Table No. Title 9 Branches of national banks: in operation December 31, 1963; opened for business, discontinued, or consolidated, January 1—December 31, 1964; and branches in operation December 31, 1964 10 Branches of national banks opened for business, by community size and size of banks, October 1December 31, 1964, and calendar 1964 11 De novo branch applications of national banks, by States, January 1-December 31, 1964; received, approved, rejected, abandoned, and pending as of December 31, 1964 12 Current operating revenue, expenses, and dividends of national banks, December 1963 and 1964, and dollar and percent changes, 1963-64 13 Statement of comparative assessment and other operating income, and expenses of the Office of the Comptroller of the Currency, by calendar years 1958 through 1964 14 Comparative statement of financial operations of the Office of the Comptroller of the Currency, by calendar years 1958 through 1964 Page 35 36 37 38 55 56 I. State of the National Banking System During 1964, the assets of national banks rose by almost $20 billion, or 11.7 percent. On December 31, 1964, the 4,615 national banks had total assets of $190.1 billion. As can be seen in table 1, the 1964 rate of increase in assets was greater for national banks than for either State member or insured nonmember banks. In 1962 and 1963, the assets of insured nonmember banks rose at a faster rate than did the assets of national banks. In 1964, the first time in 3 years, the assets of national banks rose by more than the assets of savings and loan associations. Credit unions continued to expand at a faster rate than national banks or commercial banks; this was also true in 1962 and 1963. To some extent, these asset changes reflect the increase in the number of national banks and banking offices. In December 1964, there were 4,780 commercial banks under the supervision of the Comptroller of the Currency, including 7 nonnational banks in the District of Columbia. This represents a 3.4 percent increase since the end of 1963. During 1963, the comparable increase was 2.4 percent and, in 1962, there was a decline of 0.2 percent. The number of State member banks declined by 3 percent in 1964, continuing the decline of the last 5 years. The number of insured nonmember banks continued to rise in 1964 at about the same rate as in 1962 and 1963. During 1964, the number of national banking offices (the sum of national banks and branches of national banks, including the banks in the District of Columbia) increased by 7.6 percent, less than the 8.2 percent rise experienced in 1963, but more than the 5.5 percent rise of 1962. As in 1962 and 1963, the percentage increase in banking offices under the supervision of the Comptroller of the Currency was greater than for either State member or insured nonmember banks. In evaluating the growth of the commercial banking system during 1964, it should be noted that the economy experienced a 6.6 percent rise in gross national product (in current dollars), a 12 percent growth in corporate profits before taxes, and a 5.9 percent gain in personal income. A significant factor accounting for this growth of the economy was a 4.3 percent increase in the money supply—an increase greater than in 1961, 1962, or 1963. TABLE 1.—Number of commercial banks, and banking offices, and total assets, by class of bank, end of 1963 and 1964, and percent change 1963-64 [Dollar amounts in billions] Number of banking offices j\'umber of banks All commercial banks. , . National banks l . State member banks Insured nonmember banks Noninsured banks 1 Percent change 7963-64 7963 7964 13,566 13,771 1.51 4,622 1,493 7,177 274 4,780 1,448 7,266 277 3.42 -3.01 1.24 1.09 7963 7964 Percent change 7963-64 Value of assets 7963 7964 Percent change 7963-64 26, 905 28,231 4.93 $314.1 $348. 4 10.92 12,754 4,695 10,448 334 7.55 1.36 3.61 1.21 171.2 90.5 50.1 2.3 191.2 98.1 55.8 3.3 11.68 8.40 11.38 43.48 11,859 4,632 10,084 330 Includes 7 nonnational banks in the District of Columbia. 27 TABLE 2.—Total assets of commercial banks, mutual savings banks, savings and loan associations, and credit unions; end of December 1962, 1963, and 1964, and percent change 1963-64 [Dollar amounts in millions] Dec. 28, 1962 Dec. 20, 1963 Dec. 31, 1964 Percent increase 7963-64 Commercial banks Mutual savings banks Savings and loan associations Credit unions 1 $298,196 46,121 93, 605 7,188 $314, 056 49, 702 107, 559 8,128 $348, 433 54, 240 119,295 9,303* 10.95 9.13 10.91 14.461 Based on preliminary December 1964 data. II. Assets, Deposits, and Capital Accounts The assets of national banks grew 11.7 percent during 1964. Their earning assets (loans, securities, Federal funds sold, and direct lease financing) registered a 10.1 percent increase over 1963, but these assets as a proportion of total assets declined from 80.5 percent at the end of 1963 to 79.3 percent at the end of 1964. Loans and discounts increased 14.6 percent (see table 3) while total securities displayed a modest 4.2 percent increase. As a percentage of total assets, loans and discounts increased from 49.0 percent in 1963 to 50.3 percent in 1964, but securities dropped from 30.6 percent in 1963 to 28.6 percent in 1964. Holdings of direct U.S. Government obligations by national banks increased 0.4 percent, reversing the decline of 6.3 percent in 1963. However, the relationship of these holdings to total assets fell from 19.6 percent in 1963 to 17.6 percent in 1964. State and local obligations increased 13.5 percent over 1963, less than the 20.4 percent increase experienced in 1963 period. As a percentage of total assets, State and local obligations rose slightly from 9.6 percent in 1963 to 9.8 percent in 1964. This increase of loans and discounts, as contrasted with the relative decrease in securities holdings, reflects the brisk demand for loans from the private sector of our economy. State member banks had an 8.8 percent increase in loans in 1964—the same rate of increase they experienced in 1963. Securities holdings of State member banks increased 1.1 percent in 1964. Their holdings of direct U.S. Government obligations de- 28 clined 4.0 percent—less than the 7.8 percent decrease in 1963. Holdings of State and local government obligations increased 10.8 percent—less than the 23.3 percent increase experienced in 1963. Loan deposit ratios of national banks rose from 30.0 percent in 1936 to 37.5 in 1954 and continued to rise to 55.3 in 1963 and 56.3 in 1964. This ratio for State member banks fell slightly from 59.7 in 1963 to 59.2 in 1964. Deposits of national banks increased by $18.8 billion in 1964, a 12.5 percent rise. The growth of time and savings deposits ($9.5 billion, or 15.5 percent) exceeded that of demand deposits ($9.3 billion, or 10.4 percent) for 1964, thus continuing past trends in deposit distribution. Demand deposits fell from 59.3 percent of total deposits at the end of 1963 to 58.2 percent at the end of 1964, while time and savings deposits rose from 40.7 percent in 1963 to 41.8 percent in 1964. Total capital of national banks increased by $1.5 billion or 11.1 percent during 1964. There was a sharp increase in the use of debenture financing during 1964, with a rise in the amount outstanding from $45 million to $475 million. Undivided profits, surplus, and common capital increased from their 1963 levels by 5.1, 7.6, and 8.3 percent, respectively. At the end of 1964, total capital was 7.92 percent of total liabilities and capital, approximately the same as last year's 7.96 percent. TABLE 3.—Assets and liabilities of national banks on Dec. 20, 1963; Dec. 31, 1964; and percent change December 1963 to December 1964 [Dollar amounts in millions] Dec. 20, 1963 Dec. 37, 1964 Percent change 1963 to 1964 4,675 banks Loans and discounts (including overdrafts) U.S. Government securities, direct obligations Obligations guaranteed by U.S. Government Obligations of States and political subdivisions Other bonds, notes, and debentures Total loans and securities. . . . Federal funds sold Direct lease financing , Reserve with Federal Reserve bank Currency and coin Balances with other banks, and cash items in process of collection Fixed assets Customers' liability on acceptances outstanding Other assets Total assets. Demand deposits of individuals, partnerships, and corporations Time and savings deposits of individuals, partnerships, and corporations Postal savings deposits Deposits of U.S. Government Deposits of States and political subdivisions Deposits of banks Certified and officers' checks, etc Total deposits. Demand deposits Time and savings deposits Rediscounts and other liabilities for borrowed money Federal funds purchased Acceptances executed by or for account of reporting banks and outstanding Other liabilities Total liabilities. 4,773 banks $83, 388 33,311 73 16,380 2,408 $95, 577 33, 448 89 18,592 2,237 135,560 149, 943 1,457 24 821 81 -43.65 237. 50 28, 635 34, 066 18.97 2,591 575 1,388 2,789 652 1,760 7.64 13.39 26.80 170,229 190,113 11.68 67, 740 56, 606 3,874 11,523 9,009 2,072 74, 200 64, 763 3,787 13, 647 10, 733 2,486 9.54 14.41 -2.25 18.43 19.14 19.98 150,823 169,617 12.46 89, 389 61,434 395 1,309 584 3,569 98, 660 70, 957 299 827 666 3,656 10.37 15.50 -24.30 -36.82 14.04 2.44 156,681 175, 065 11.73 45 3,959 25 6,700 2,529 290 475 4,286 28 7,207 2,657 393 955. 56 8.26 12.00 7.57 5.06 35.52 14.62 .41 21.92 13.50 -7.10 10.61 CAPITAL ACCOUNTS Debentures Common stock Preferred stock Surplus Undivided profits Reserves and retirement account for preferred stock. . . . Total capital accounts Total liabilities and capital accounts. 13,548 15,048 11.07 170,229 190,113 11.68 29 TABLE 4.—Percent distribution of assets, and liabilities, of national banks, December 1963 and 1964 December 1963 December 7964 ASSETS Securities: U.S. Government, direct and guaranteed Obligations of States and political subdivisions Other bonds and securities Percent 19.61 9.62 1.41 Percent 17.64 9.78 1.18 30.65 48.99 .86 .01 10.37 6.45 1.52 1.15 28.60 50.27 100. 00 100.00 39.79 33.25 2.27 6.77 5.29 1.22 39.03 34.07 1.99 7.18 5.65 1.31 Total deposits 88.60 89.22 Demand deposits. Time deposits. .. . 52.51 36.09 51.90 37.32 Total securities Loans and discounts Federal funds sold Direct lease financing Cash and balances with other banks, excluding reserves. Reserve with Reserve banks Fixed assets All other assets Total assets. .43 .04 11.96 5.95 1.47 1.27 LIABILITIES Deposits: Demand of individuals, partnerships, and corporations. Time of individuals, partnerships, and corporations U.S. Government States and political subdivisions Banks Other deposits (including postal savings) Other liabilities Capital funds: Debentures Capital stock Surplus Undivided profits and reserves. Total capital accounts Total liabilities and capital accounts. 30 3.44 .03 2.34 3.94 1.66 2.87 .25 2.27 3.79 1.60 7.96 7.92 100. 00 100. 00 Demand af;.i nine deposits; dollar amount, and percent distribution, December 1963 and 1964 by type of bank, [Dollar amounts in millions] December 1964 December 7963 Dollar amount All commercial banks: Total deposits Demand Time Members of Federal Reserve System: Total deposits Demand Time, , National banks: Total deposits Demand Time. State member banks: Total deposits Demand Time Insured nonmember banks: Total deposits Demand . Time. Noninsured banks: Total deposits .. . Demand Time Percent distribution Dollar amount Percent distribution $276,230 100. 0 $308, 427 100.0 164,050 112,180 59. 4 40. 6 180, 199 128,228 58.4 41.6 229, 376 100. 0 255, 724 100.0 138,064 91,312 60. 2 39. 8 151,384 104,340 59.2 40.8 150,823 100.0 169,617 100.0 89, 389 61, 434 59.3 40.7 98, 660 70, 957 58.2 41.8 78, 553 100.0 86, 108 100.0 48, 675 29, 878 62.0 38.0 52, 725 33, 383 61.2 38.8 45, 270 100.0 50, 507 100.0 24, 887 20, 383 55.0 45.0 27, 308 23, 199 54. 1 45.9 1,583 100.0 2,197 100.0 1,098 485 69.4 30.6 1,508 689 68.6 31.4 I I I . New Charters, Branches and Mergers There were 232 national bank charters issued in 1964, including two for Deposit Insurance Corporation National Banks organized under section 11 of the Federal Deposit Insurance Act. Of these charters, 27 represented conversions of State-chartered banks, an increase of one from 1963. Five States (California, 38; Colorado, 11; Florida, 23; Oklahoma, 11; and Texas, 24) accounted for 52.7 percent of all primary national bank charters issued. No primary national bank charters were issued in 15 States. At the end of 1964, there were 7,960 national bank branches, an increase of 782 over December 31, 1963. Pennsylvania and California experienced the greatest net additions of branch offices—105 and 98, respec- tively. Other States with substantial net increases in branches were: New York (66), Michigan (52), New Jersey (46), Ohio (38), Massachusetts (32), Virginia (32), Washington (28), Indiana (26), and Connecticut (20). Of the 782 national bank branches opened in 1964, 474, or 60.6 percent, were located in communities with a population of less than 25,000. National banks with total resources of less than $25 million opened 239 branches, or 30.6 percent of the total. During 1964, the Comptroller of the Currency approved 91 consolidations, mergers, and absorptions involving national banks, as compared with 90 in 1963. 31 TABLE 6.—Number of national banks and banking offices, by States, Dec. 31,1964 National banks State Number of Number of branches of national bankWith branches national banks ing 1 offices Unit Total United States 2 4,773 3,537 Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming Virgin Islands , 80 5 4 63 90 115 27 5 8 187 55 2 9 410 124 101 169 82 47 22 49 93 96 193 31 91 48 125 3 50 146 33 203 31 41 221 222 11 387 4 25 33 75 3 539 12 28 M23 28 79 109 38 1 56 0 1 40 57 115 12 4 1 187 32 0 4 410 63 80 145 43 17 8 24 34 44 191 8 77 48 109 1 35 52 15 110 9 36 102 199 6 242 0 6 28 32 539 8 19 61 13 79 97 38 0 District of Columbia—all5 15 , 1 Number of banking offices is the sum of total national banks and number of branches of national banks. 2 Includes Virgin Islands. 3 Includes Deposit Insurance National Bank of Dell City, Dell City, Tex.—organized under Section 11 of the Federal Deposit Insurance Act—to operate no longer than for a 2-year period. 32 7,960 12,733 24 5 3 23 33 0 15 1 7 0 23 2 5 0 61 21 24 39 30 14 25 59 52 2 23 14 0 16 2 15 94 18 93 22 5 119 23 5 145 4 19 5 43 0 4 9 62 15 0 12 0 1 106 38 166 47 1,648 0 152 3 45 0 100 39 90 0 244 23 24 110 126 62 171 303 355 6 42 14 0 16 30 17 390 46 755 248 5 465 23 199 724 52 161 34 179 0 53 27 274 322 0 24 0 2 186 43 170 110 1,738 115 179 8 53 187 155 41 99 410 368 124 193 192 173 84 220 396 451 199 73 105 48 141 33 67 536 79 958 279 46 686 245 210 1,111 56 186 67 254 539 65 55 397 350 79 133 38 3 13 78 93 1,236 4 Includes Deposit Insurance National Bank of Newport News, Newport News, Va.—organized under Section 11 of the Federal Deposit Insurance Act—to operate no longer than for a 2-year period. 5 Includes national and nonnational banks in the District of Columbia, all of which are supervised by the Comptroller of the Currency. TABLE 7.—National hank charier applications,1 and charters issued,1 by States, Jan. I—Dec. 31, 1964; received, approved, rejected, abandoned, and pending as of Dec. 31,1964 State United States 3 Alabama Alaska Arizona Arkansas California Colorado Connecticut.... Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee. Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming Virgin Islands Puerto Rico 1 2 Received 2 Abandoned Rejected Pending Dec. 31, 1964 Charters Issued 538 185 242 30 81 232 16 0 0 9 105 29 12 0 3 70 9 2 0 21 2 3 4 0 4 0 6 4 12 9 6 22 7 4 6 1 14 5 12 0 3 12 29 1 3 0 4 1 3 46 5 0 7 10 3 4 9 0 1 10 0 0 3 30 9 3 0 1 15 2 0 0 12 2 1 1 0 1 0 2 2 7 1 4 9 2 3 0 1 10 3 4 0 2 7 2 1 1 0 0 0 1 11 2 0 3 6 2 4 5 0 0 5 0 0 0 1 8 0 1 3 38 11 4 0 1 26 1 0 0 9 1 1 2 0 3 0 4 1 8 4 2 9 1 4 0 0 7 4 2 0 0 0 0 1 0 0 3 18 1 6 0 0 7 0 2 0 3 0 2 0 0 0 0 2 2 4 1 1 3 1 0 1 0 1 1 2 0 0 4 2 0 0 0 0 0 0 0 1 0 0 1 0 0 0 0 0 0 2 6 1 0 0 0 0 0 3 0 1 Includes conversions. Includes applications pending as of Dec. 31, 1963. Approved 3 4 0 0 2 52 19 3 0 1 38 5 0 0 5 0 o3 0 3 0 2 0 1 5 1 8 4 1 4 0 3 1 6 0 0 1 23 0 2 0 4 1 0 28 2 0 3 4 1 0 1 0 0 5 0 0 0 1 10 2 0 0 1 0 o 0 0 0o 0 0 0 2 0 2 0 0 1 0 o0 0 0 1 o 5 0 3 4 11 0 2 0 0 0 1 * 25 2 0 49 5 3 5 4 0 0 Includes Virgin Islands and Puerto Rico. Includes one Deposit Insurance Corporation national bank. 33 TABLE 8.—Charters, liquidations, and capital stock changes of national banks, calendar 1964 Capital stock Item Number of banks Capital notes and debentures Common Increases: Banks newly chartered: Primary organizations Reorganizations Conversions of State banks Capital stock: Preferred: 2 cases by new issues Common: 203 cases by statutory sale 587 cases by statutory stock dividend 7 cases by statutory consolidation 54 cases by statutory merger Capital notes and debentures: 27 cases by new issue Total increases Decreases: Banks ceasing operations: Voluntary liquidations: Succeeded by national banks Succeeded by State banks No successor Statutory consolidations Statutory mergers Conversions into State banks Merged or consolidated with State banks (Public Law 706) Receivership Capital stock: Preferred: 3 cases by retirement Common: 1 case by statutory reduction 10 cases by statutory merger Capital notes and debentures: 1 case by retirement *205 0 27 Preferred $87, 212, 260 0 52, 425, 023 0 0 0 0 0 $25, 000, 000 0 0 $3,200, 000 0 0 0 0 0 0 23, 680, 081 153,926,577 7, 097, 250 13,593,275 0 0 0 0 0 0 0 0 0 0 405,014,100 232 337, 934, 466 3,200, 000 430,014,100 9 1 1 4 39 6 1,560,000 1,250,000 150,000 0 0 1,100, 000 0 0 0 0 0 0 0 0 0 0 0 0 15 1 4, 950, 800 100, 000 0 0 0 0 0 0 39,140 0 0 0 0 50, 000 1, 386, 363 0 0 0 0 0 0 100,000 76 10, 547,163 39,140 100, 000 Net change Charters in force Dec. 31, 1963, and authorized capital stock . . 154 4,625 327, 387, 303 3, 964, 436, 146 3, 160, 860 25,195,470 429, 914, 100 45, 300, 000 Charters in force Dec. 31, 1964, and authorized capital stock. . 4,779 4, 291, 823, 449 28, 356, 330 475,214,100 Total decreases 1 Includes 2 Deposit Insurance National Banks organized under sec. II of the Federal Deposit Insurance Act. 34 TABLE 9.—Branches of national banks: in operation Dec. 31, 1963; opened for business, discontinued, or consolidated, Jan. 1-Dec. 31, 1964; and branches in operation Dec. 31, 1964 State United States * Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee. Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming Virgin Islands District of Columbia—all3. 1 2 3 Includes Virgin Islands. Revised from 1963 Annual Report. Includes national and nonnational banks in the District of Branches in operation Dec. 31, 1963 Branches opened for business Jan. 1-Dec. 31, 1964 Existing branches Branches in discontinued or operation consolidated Jan. Dec. 31, 1964 1-Dec. 31, 1964 2 7, 228 782 50 7,960 2 97 38 154 35 1,550 0 132 3 9 0 12 12 102 0 0 0 0 0 4 0 0 0 0 0 3 0 0 0 0 0 0 1 \ 0 4 \ \ 0 0 2 0 1 0 0 2 2 8 4 0 1 0 0 6 1 1 0 2 0 0 1 4 0 0 0 106 38 166 47 2 s 97 20 0 7 0 6 38 84 0 218 19 24 1 6 0 26 4 0 102 9 9 2 38 0 2 118 61 2 156 271 2 303 6 36 2 14 0 17 28 2 344 40 689 2 232 3 2 427 21 2 2 190 619 52 2 145 34 161 0 48 22 2 242 2 294 0 22 0 2 70 1 19 33 53 0 6 2 0 0 2 15 48 8 74 20 2 39 2 9 111 1 17 0 20 0 5 6 36 28 0 2 0 0 8 1,648 0 0 152 3 45 0 100 39 90 0 244 23 24 110 126 62 171 303 355 6 42 14 0 16 30 17 390 46 755 248 5 465 23 199 724 52 161 34 179 0 53 27 274 322 0 24 0 2 0 78 0 Columbia, all of which are supervised by the Comptroller of the Currency. 35 TABLE 10.—Branches of national banks opened for business, by community size and size of bank, Oct. 1-Dec. 31, 1964, and calendar 1964 Jan. 1Category In cities with population: Less than 5,000 5,000 to 24,900 25,000 to 49,900 50,000 to 99,900 100,000 to 249,900 250,000 to 499,900 500,000 to 1,000,000 Over 1,000,000 Total By banks with total resources (in millions of dollars): Less than $10.0 $10.0 to $24.9 $25.0 to $49.9 $50.0 to $99.9 $100.0 to $999.9 Over $1,000 Total 36 Dec. 31, 1964 190 284 94 58 40 30 44 42 782 122 117 80 64 259 140 782 TABLE 11.—De novo branch, applications of national hanks, by States, Jan. I—Dec. 31, 1964; received, approved, rejected, abandoned, and pending as of Dec. 31, 1964 State United States2 Alabama Alaska Arizona Arkan sas California Colorado Connecticut Delaware District of C o l u m b i a . . . . . . . . . . . . . Florida Georgia Hawaii Idaho , Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi. Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas. , Utah Vermont Virginia Washington West Virginia. Wisconsin Wyoming Virgin Islands District of Columbia—all3. Received i Approved 1,026 j 670 19 1 I 16 I 12 13 0 11 11 107 0 15 1 4 0 9 0 2 0 13 11 0 5 5 1 19 25 47 0 7 3 0 1 2 9 25 5 54 19 1 59 4 16 53 1 14 1 24 0 7 4 44 18 0 0 0 0 m 0 \ 6I 0 i 11 ' 0 6 0 14 15 1 6 7 3 37 32 77 0 9 3 0 1 3 12 42 5 96 29 4 71 4 23 87 2 18 2 26 0 11 7 68 26 0 0 0 0 Abandoned Pending Dec. 37, 1964 4 0 3 0 28 0 6 0 1 0 0 0 1 0 1 2 0 1 2 2 6 5 18 0 1 0 0 0 1 2 8 0 16 7 1 10 0 1 16 1 4 0 1 0 3 3 7 2 0 0 0 0 10 includes applications pending as of Dec. 31, 1963. Includes Virgin irgi g Islands:. tio Includes national and nonnational banks in the District of 2 Rejected Columbia, all of which are supervised by the Comptroller of the Currency. 3 37 IV. Income and Expenses of National Banks The composition of earning assets continued to shift from securities to loans during 1964, and deposits shifted from demand to time. An analysis of the income and dividend statements for national banks reflects these changes. While loans and discounts have higher yields than securities, the additional supply of funds raised through time deposits has been more costly. This price-cost relationship between loans and time deposits has led banks to search for other sources of funds. One source is the debenture. The phenomenal growth of this form of financing during 1964 readily attests to its usefulness. During 1964, net income of national banks increased by $7.4 million (see table 12) to a level of $1,213 million. Operating revenue for 1964 exceeded the 1963 level by $845 million, an 11.6 percent increase. Interest and discount on loans accounted for $610 million, or 72.2 percent, of this $845 million increase. Earnings on U.S. Government securities increased 1.6 percent, while earnings from other securities (mostly State and local issues) increased $97 million, or 19.2 percent. Operating expenses for 1964 rose 12.9 percent from the 1963 level of $5,229 million. Of this $676 million increase, 51 percent ($345 million) represented the cost of interest on time arid savings deposits; this was 18.0 percent above the 1963 level—less than the 20.7 percent increase registered in 1963. Salaries and wages expense rose by 7.9 percent from 1963. Net current operating earnings increased to $2,243 million in 1964, $169 million above the 1963 level. Net income before related taxes dropped to $1,854.7 million in 1964, from $1,893.9 in 1963. This 2.1 percent decline from 1963 can be traced to a net change of $208.5 million in profits, recoveries, losses, and transfers to valuation reserves. Profits on securities sold decreased $44.8 million, or 50.9 percent, from 1963. Transfers from valuation reserves fell $85.7 million, or 81.6 percent, from 1963. Conversely, transfers to valuation reserves increased $36.0 million to $365.6 million. The net result was a $388.3 million reduction in operating earnings. After deduction of $10.2 million for interest paid on capital notes and debentures, taxable income was reduced to $1,844.5 million. In 1964, Federal income taxes decreased $57.4 million from the 1963 level. The factors behind this change were a lower corporate tax rate, and a greater share of income derived from tax-exempt sources. TABLE 12.—Current operating revenue, expenses, and dividends of national banks, December 1963 and 1964, and dollar and percent changes, 1963-64 [Dollar amounts in millions] Change 1963-64 Item December 1963 December 1964 Dollar l Number of banks Capital stock (parz value) 2 Capital accounts Current operating revenue: Interest and dividends on— U.S. Government obligations. . . Other securities Interest and discount on loans Service charges on deposit accounts . Other current operating revenue. . . Total. Current operating expenses: 3 Salaries, wages, and fees Officer and employee benefits 3 Interest on time and savings deposits . . . . Net occupancy expense of bank premises. Other current operating expenses Total. Net current operating earnings. See footnotes at end of table. 38 Percent $4,615 3, 886. 0 13,102.0 $4, 773 4,163.1 14,297.8 158 277.1 1,195.8 3.42 7.13 9.13 1,171.3 504.9 4,621.6 408.8 596.0 1,189.7 601.7 5, 232. 4 441.4 682.5 18.4 96.8 610.8 32.6 86.5 1.57 19.17 13.22 7.97 14.51 7, 302. 5 8,147. 7 845.2 11.57 1,770.0 242.6 1,917.3 313.6 985.3 1, 909.1 266. 0 2, 262. 7 350. 8 1,116.1 139.1 23.4 345.4 37.2 130.8 7.86 9.65 18.01 11.86 13.28 5, 228. 8 5, 904. 7 675.9 12.93 2, 073. 7 2, 243. 0 169.3 8.16 TABLE 12.—Current operating revenue, expenses, and dividends of national banks, December 1963 and 1964, and dollar and percent changes, 1963-64—Continued Change 1963-64 December 1963 Item December 1964 Dollar Recoveries, transfers from valuation reserves, and profits: On securities: Profits on securities sold or redeemed Recoveries Transfers from valuation reserves . . . On loans: Recoveries Transfers from valuation reserves All other Total Losses, chargeoffs, and transfers to valuation reserves: On securities: Losses and chargeoffs Transfers to valuation reserves On loans: Losses and chargeoffs Transfers to valuation reserves All other Total Net income before related taxes Taxes on net income: Federal State Total Net income before dividends Cash dividends declared: On common stock On preferred stock Total Memoranda items: Recoveries credited to valuation reserves (not included in recoveries above): On securities , On loans Losses charged to valuation reserves (not included on losses above): On securities On loans Stock dividends (increases in capital) 88.1 2.3 44.8 43.3 1.6 39.2 — 44.8 — .7 -5.6 -50.85 -30.43 -12.50 8.1 105.0 55.5 7.6 19.3 57.6 -.5 -85.7 2.1 -6.17 -81.62 3.78 303.8 168.6 -135.2 - 4 4 . 50 34.1 39.3 54.2 41.3 20.1 2.0 58.94 5.09 12.5 329.6 68.1 13.5 365.6 82.4 1.0 36.0 14.3 8.00 10.92 21.00 483.6 556.9 73.3 15.16 1,893.9 1,854.7 -39.2 -2.07 637.1 50.9 579.7 51.4 -57.4 .5 -9.01 .98 -8.26 688.0 631.2 -56.8 1,205.9 * 1,213.3 7.4 0.61 547.1 1.1 591.5 1.3 44.4 .2 8.12 18.18 548.2 592.8 44.6 8.14 5.3 60.4 2.6 106.0 -2.7 45.6 -50.94 75.50 11.9 177.7 126.3 32.3 225.9 153.5 20.4 48.2 27.2 171.43 27.12 21.54 Percent Ratios: Current operating expenses to current operating revenue Net income before dividends to capital accounts Cash dividends to capital stock Cash dividends to capital accounts 1 Number of banks, as of end of year, but figures of income, expenses, etc., include banks which were in operation a part of the year but were inactive at the close of the year. 2 Figures are averages of amounts reported for the June and Percent 71.60 9.20 14.11 4.18 Percent 72. 47 8.49 14.24 4.15 Change + 0.87 -.71 + .13 -.03 December call dates in the year indicated and the December call date in the previous year. 3 Exclusive of building employees. * This figure is after deduction of $10.2 million, interest paid on capital notes and debentures. 39 V. Litigation A. Branch Litigation In 13 actions brought in North Carolina, competing banks sought to either permanently enjoin the Comptroller's issuance of branch certificates, or to obtain declaratory judgment that approval and issuance of the branch certificate were in violation of applicable branching law and injunctions that prohibit operation of the branches. In one such case, the plaintiff bank brought an action against the Comptroller to have his approval of the branch in question declared unlawful, and to enjoin the Comptroller from issuing a certificate of authority to open the branch; and further, to enjoin the defendant bank from opening the branch in question. The plaintiff bank asserted that the new branch was unlawful because the defendant bank's capital structure was inadequate under sections 53-62 of the General Statutes of North Carolina, and the Banking Act of 1933 as amended (12 U.S.C. 36 (c)). Plaintiff bank also alleged that the public necessity and convenience would not be served by the opening of a new branch and that the establishment of a branch of the defendant bank at the location in question would increase competition, thereby causing it to lose customers and business. The plaintiff further contended that the lack of an adjudicatory hearing at the administrative level violated the Administrative Procedure Act 5 U.S.C. 1004. Plaintiff bank requested a temporary restraining order and a preliminary injunction. Defendant bank moved to dismiss for failure to state a claim upon which relief could be granted, on the ground that its capital was adequate, and for want of jurisdiction. The defendant Comptroller moved to dismiss or in the alternative for summary judgment on the grounds that plaintiff bank lacked standing, that the Comptroller's decisions and actions were lawful and proper, and that his discretionary acts were not subject to judicial review. Pending the district court's decision on the pending motions, the Comptroller refrained from issuing a certificate of authority to open the new branch. Lack of adequate capitalization by the defendant bank, the only allegation as to violation of law made by the plaintiff, was remedied prior to the district court's ruling when defendant bank altered its capital structure to meet the requirements of North Carolina law, even as they were interpreted by the plaintiff bank. On August 12, 1964, the district court, without having heard oral argument, granted the plaintiff's 40 preliminary injunction and denied the defendant's motion to dismiss. The court held the Comptroller's approval of the branch invalid on the ground that his failure to grant a full adversary hearing at the administrative level violated the hearing provisions of the Administrative Procedure Act. The court ruled that the threat of competition presented by the newly authorized branch was sufficient to confer upon plaintiff bank standing to invoke the district court's jurisdiction. The court apparently based its ruling on the belief that judicial review of the Comptroller's decision would be impossible without such a hearing. Prior to granting plaintiff bank's motion for summary judgment, the court, at the request of the counsel of the Comptroller, agreed to hear oral argument for the first time. In an additional brief and in oral argument, counsel for the Comptroller pointed out that if the Comptroller's approval of the branch was reviewable at all, any disputed facts could and should, under the Administrative Procedure Act, be determined in an evidentiary trial in the district court, and that no adversary hearing at the administrative level was required to protect the plaintiff bank's procedural rights. The district court, however, entered a final order in judgment declaring invalid the Comptroller's approval of defendant bank's branch application, and enjoining him from issuing a certificate of authority based upon that approval. From that order, notice of appeal was filed in the Circuit Court of Appeals, the Fourth Circuit in Richmond, Va., on November 6, 1964. In the appeal, counsel for the Comptroller argued, first, that the Comptroller of the Currency has authority to act upon applications for the establishment of new branches without holding an adversary hearing at the administrative level and, secondly, that competitive banks have no standing to challenge the Comptroller's determination that a new branch would be in accord with the public need and convenience and that his determination is at any rate discretionary and nonreviewable. The first ground for appeal was broken down into two separate points, the first of which was that the National Bank Act and the Administrative Procedure Act authorize the Comptroller to pass upon branch and charter applications without an adversary hearing. This point was supported by the argument that the Administrative Procedure Act requires adversary hearing at the administrative level only in cases "of adjudication required by statute to be determined on the record after opportunity for an agency hearing/' The brief states that the Administrative Procedure Act does not itself impose any requirement for an adversary hearing before an agency, but only specifies the procedures to be followed where some other statute requires such a hearing. The Comptroller's appeal was also directed at establishing the rule that competitive banks have no standing to challenge the Comptroller's determination for public need and convenience and that, at any rate, the Comptroller's approval or disapproval of a branch application on the basis of public need and convenience is discretionary and not subject to judicial review. First National Bank of Smithfield, North Carolina, v. First National Bank of Eastern North Carolina, and James J. Saxon, Comptroller of the Currency of the United States. Civil Action No. 1460, (E.D.N.G.). The following cases contained some or all of the issues involved in the above-mentioned case. Commercial and Industrial Bank v. James J. Saxon, Comptroller of the Currency, Civil Action No. 723 (E.D.N.C.), Peoples Bank and Trust Co. v. James J. Saxon, et al., Civil Action No. 867, (E.D.N.G.), First Citizens Bank & Trust Co. v. James /.. Saxon, et al. and First Union National Bank of North Carolina Intervenor, Civil Action No. 928 (E.D.N.C.), First Citizens Bank and Trust Company v. James J. Saxon, Civil Action No. 1476, (E.D.N.C.), First National Bank of Smithfield, North Carolina, v. First National Bank of Eastern North Carolina and James J. Saxon, et al., Civil Action No. 1477 (E.D.N.C.), First Citizens Bank and Trust Company v. James J,, Saxon, Civil Action No. 1589 (E.D.N.G.), First Citizens Bank and Trust Company v. James J. Saxon and First Union National Bank of North Carolina Intervenor, Civil Action No. 1663 (E.D.N.C.). Bank of Haw River v. James J. Saxon (U.S.D.C.M.D.N.C., Greensboro Div., Civil Action No.C-124G-65). The other four cases in North Carolina were mooted either by merger of one of the banks involved or by withdrawal of the application for the branch by the applicant bank. In an action in the U.S. District Court for the Northern District of Mississippi against the defendant Comptroller Saxon, a State bank sought a declaratory judgment that the Comptroller had no authority to issue a certificate of approval for a branch bank in an area closely adjacent to the corporate limits of the town in which plaintiff bank had situated a branch of its own and was benefiting from branch office protection. Plaintiff bank also sought to enjoin the Comptroller from permitting such a branch to conduct business in the county, and alleged that the Comptroller's issuance of a certificate of approval for the establishment of such a branch constituted an unlawful establishment of a branch bank facility. At the time of the litigation, plans were under consideration by the municipal government to annex the area in which the branch office of defendant national bank was going to be located. If these plans had been consummated, they would have allowed the national bank to move its branch into the center of the town which had been inaccessible to branches of banks based elsewhere. The case is now pending while depositions are being taken and discovery being made. The Bank of Tupelo, Mississippi, v. James J. Saxon and First Citizens National Bank of Tupelo, Mississippi, Intervenor, Civil Action No. EC 6514 (D.C.N.D. Miss. 1965). The Comptroller's issuance of a branch certificate to a national bank located in the State of New York was contested in a case where the new branch was located in an unincorporated area adjacent to an incorporated village in which several competitive banks enjoyed home office protection. It was alleged by three of the defendant national bank's competitors that the area was prohibited as a branch location of the defendant bank because, although such area could qualify for incorporation as a village under state law, it lacked the required characteristics of a village in the community sense. It was also alleged that the issuance of a branch certificate was illegal because the Comptroller violated his own rules and regulations in processing the branch application. Granting the Comptroller's motion for summary judgment, the district court held that (1) the Comptroller had complied with the branch location requirements of 12 U.S.C. 36; (2) that ex parte contacts^ such as were made with the Comptroller were not prohibited; and (3) that the opening by the defendant national bank of the branch in question in temporary quarters did not constitute a new branch application such as might have required investigations by lower echelons in the Office of the Comptroller. The Union Savings Bank of Patchogue et al. v. James J. Saxon, Comptroller of the Currency, Civil Action No. 2445-62 (D.C.D.C. 1962). The judgment in favor of the Comptroller and the defendant national bank was appealed to the Circuit Court of Appeals for the District of Columbia which vacated the judgment of the district court and remanded the case for further proceedings. The Court of Appeals, which did not decide the question relating to the Administrative Procedures Act, held that the word "village" as used in New York statute law must 41 be given its natural meaning, i.e., an area possessed of some attributes of a community. In reaching this conclusion the Court of Appeals rejected the administrative interpretation of the New York Banking Law made by the New York Banking Department, an interpretation which was followed by the Comptroller of the Currency in approving the disputed branch application of the defendant national bank, to the effect that if an unincorporated area could be incorporated, a branch could be located therein. The Court of Appeals held that under section 36(c) of the National Bank Act, the applicable branching statute under which the Comptroller operates it is clear that a national bank may establish a branch only where a State bank branch would be authorized "by the statute law of the State in question by language specifically granting such authority affirmatively and by implication or recognition . . .". The court held that the section 36 reference to the statute law of the State refers only to legislative enactments, and that interpretations of those enactments—such as the test which was used by the Comptroller as well as by the New York Banking Department—were not legislation, and therefore could not be incorporated into the Federal law. The Court of Appeals held that the judgment of the lower court granting the motions for summary judgment were reversed, and the district court subsequently ordered a complete reexamination and reconsideration on the part of all the parties concerned relative to the application for a new branch in the incorporated village area. The case is presently pending before the U.S. District Court for the District of Columbia. In another case pending in New York State, which involves the definition of the term "unincorporated village," competitor banks alleged that the approval of a branch of a national bank by defendant Saxon was arbitrary and unlawful under the test set out in the Patchogue case cited above. Plaintiff bank seeks to preliminarily and permanently enjoin the Comptroller (1) from permitting defendant national bank from opening the branch office in question, and (2) from issuing any certificate of approval of said branch. Further, the plaintiff seeks to have withdrawn any evidence of approval by defendant Comptroller of the branch in question, to have a judgment entered declaring Comptroller's action in this respect to be beyond the scope of his discretion and null and void. Oysterman's Bank & Trust Company v. James J. Saxon, Civil Action No. 1717-64 (D.C.S.D., N.Y. 1965). In a recent case in Michigan, plaintiff State banks sought to enjoin (1) the defendant bank from estab42 lishing a branch, and (2) the Comptroller of the Currency from approving the application of the defendant bank and issuing a certificate of approval. Further, the plaintiff sought a declaratory judgment that the establishment of said branch would be in violation of 12 U.S.C. 36 and section 34 of the Michigan Financial Institutions Act. Plaintiffs in this action claimed that the Comptroller's approval of the proposed branch would be unlawful because: (1) the proposed location is not within a village; (2) the home office and branch office protection provision of the foregoing Michigan statute was ignored; (3) the Comptroller failed to make a showing of necessity as required by the foregoing Michigan statute; and (4) approval of the application without allowing plaintiffs a hearing or opportunity to cross-examine applicant or offer evidence in protest was in contravention of the Administrative Procedure Act, and, furthermore, denied plaintiffs the procedural due process which is guaranteed by the 14th amendment to the Constitution of the United States. In answering the complaint, the defendant Comptroller averred that the provisions of sections 34 of the Michigan Financial Institutions Act relating to the requirements of "necessity'1 and "prospects of successful operation" need not be considered by the Comptroller in deciding whether to authorize the branch in question, since these requirements of State law are not incorporated into 12 U.S.C. 36(c) (2). The Comptroller further asserted that plaintiffs have no right to be free from competition merely because they are doing business in the area in question, and he denied the applicability of the Administrative Procedure Act to this Office in relation to its function of approving applications for branches of national banks. Security Bank and Wyandotte Savings Bank v. James J. Saxon and Manufacturers National Bank of Detroit (U.S.D.C. E.D. Michigan, S.D.C.A. No. 26303). In a case recently decided in the U.S. District Court in the Eastern District of Michigan, the court held that the Comptroller abused his discretionary power by approving a relocation of a branch of a national bank with its home office in Detroit. The facts in this case were that the defendant national bank applied to the defendant Comptroller for permission to relocate one of its Dearborn branches to a site 1.7 miles away from its present location, but still within the city limits of Dearborn. The defendant bank concurrently applied for a new branch to be relocated, but outside of the city limits of Dearborn. The plaintiff bank alleged that the approval of the new branch was designed to service the customers presently doing business with the defendant national bank's branch at the site in ques- tion, and that the relocation of the existing bank would be, in fact, a new branch in a new area serving an entirely new market. The new area, 1.7 miles away, was not being served by the defendant national bank and there was no way in which it could serve such an area by establishing a new branch. Therefore, the plaintiffs alleged that the moving of the branch facilities by the defendant bank was part of a total plan or subterfuge to evade the language and spirit of section 36 of title 12 of the United States Code, as it incorporates the provisions of section 34 of the Financial Institutions Act of Michigan. Implicit in this charge was the allegation that the relocated branch would be, in fact, a de novo branch that would violate section 34 of the Michigan Financial Institutions Act. The court held in its oral opinion that 12 U.S.C. 36(c) incorporated the provisions of State law such as section 34 of the Michigan Financial Institutions Act which provided in part "that no such branch shall be established in a city or village in which a state or national bank or branch thereof is then in operation." The court agreed with the plaintiff that; the proposed relocation of one office within Dearborn and the simultaneous establishment of a new office near the city limits outside Dearborn, did not constitute a bonafide relocation, but instead constituted an unlawful attempt to establish a new branch within the city of Dearborn. Bank of Dearborn v. James J. Saxon et al. Civil Action No. 23, 628 (U.S.D.C.E.D. Mich., sec. div. F). In two Utah cases., it was alleged that the Comptroller's authorization of a branch in the same city in which the principal office of the bank is located would be in violation of the Utah Statute which provides, in part, that ". . . no branch bank shall be established in any city or town in which is located a bank or banks . . . " In one case the district court in Utah held that the Comptroller violated neither Federal nor Utah law when he authorized a de novo branch in Logan, Utah of the defendant bank in 1963. The court held that since Utah law expressly provided for the acquisition of in-city branches of state banks by merger, and that since the Comptroller, under section 36(c)(l), may approve in-city branches of national banks where there is corresponding provision for such branches of State banks, he may therefore approve in-city branches de novo. Since the plaintiff Utah State banks could branch by merger in their home office city, the Comptroller was acting properly when authorizing a de novo branch in the home office city. The plaintiff State bank appealed this ruling, and hearings before the United States Circuit Court of Appeals for the Tenth Circuit in Denver have been tentatively set. Walker Bank & Trust Company v. James J. Saxon et al., Civil Action No. 137-63 (D.C.D. Utah 1963). In the second Utah case, pending in the District Court for the District of Columbia and essentially based on facts similar to those above, the district court reached a decision contrary to that reached in the Utah Court. The court held that the plaintiff State bank had standing to sue in this case, that the defendant Comptroller's decisions were reviewable, and that the sole issue in question was whether the Comptroller had the statutory authority to grant a certificate to the defendant national bank for the establishment of a de novo branch in the city of Ogden, Utah. The Washington court held that in order to maintain the competitive balance sought by Congress in enacting the McFadden Act of 1927 (part of which is contained in 12 U.S.C. 36(c))j national banks in Utah can open de novo in-city branches by merger only. Commercial Security Bank v. James J. Saxon, and First Security Bank of Utah, N.A., Intervenor, Civil Action No. 1815-63 (D.C.D.C. 1964). In an Indiana action concerning the Comptroller's authority to authorize branch banks, a State bank is seeking (1) a declaratory judgment that the issuance by the Comptroller of a certificate authorizing the establishment and operation by a national bank of a branch bank is in violation of the applicable branching laws, and (2) to enjoin the defendant bank from operating the branch in question. This action also involves an interpretation of 12 U.S.C. 36(c) (1) concerning branching by a national bank "inside" the city of its home office in States where a State bank can have "inside" branches. Here the Comptroller argued in this case that certain restrictions of state law did not apply to national banks. The Comptroller specifically alleged that even if 12 U.S.C. 36(c) (2) (which deals with "outside" branches and incorporates location restrictions of state law), were applicable to "inside" branches, the Indiana requirement that a new branch must not "jeopardize" an existing banking office is not the kind of location requirement that would be incorporated, or that would raise questions subject to judicial review. The case is presently pending before the Indiana District Court. North Madision Bank v. National Bank of Madison, Indiana, and James J. Saxon, Comptroller of the Currency Civil Action No. N.A. 63-C-76, (D.C.S.D. Indiana 1963). In another Michigan case, plaintiff bank sought (1) a declaratory judgment that approval of the proposed branch would be in violation of 12 U.S.C. 36 and section 34 of the Michigan Financial Institutions Act, and (2) to enjoin the issuance of the branch certificate 43 and the defendant bank's establishment of the proposed branch. Plaintiff claimed that the Comptroller's approval of the proposed branch would be unlawful because: (1) the proposed location was not within an incorporated village; (2) the head office and branch protection provision of the Michigan Statute was ignored; (3) the Comptroller failed to make a showing of necessity; and (4) approval of the application without allowing plaintiff or formal hearing was in contravention of the Administrative Procedure Act. The Comptroller's answer stated that the proposed location had the indicia of a village and that no other branches were located in the same village. With regard to the formal hearing demand, the Office position—as set forth in the Smithfield case—was repeated. (In two recent cases, the United States District Court in Michigan took the position that no formal record is necessary for judicial review of Comptroller cases.) The Southern Michigan National Bank of Coldwater v. James J. Saxon and First National Bank of Quincy, Civil Action No. 4948 (D.C.W.D. Mich., Southern Division). After granting a partial summary judgment on motion by the defendant Comptroller of the Currency—that the defendant is not required to hold a hearing prior to granting approval for the establishment of a branch of a national bank, and that the defendant is not bound by State statutory requirements to the necessity or prospect for a successful operation of a branch bank—the U.S. District Court for the Eastern District of Michigan, Southern Division, held that the Comptroller of the Currency had acted arbitrarily under applicable law in approving the branch in question. The basis for the court's decision was a detailed analysis of the factual situation as it existed in the unincorporated area in which the branch was located, considering aspects of population, housing, business, and geographical distribution, as well as other factors encompassing the indicia of a community. In reaching its conclusion, the court felt that the Comptroller's decision to approve the establishment of the disputed branch bank was not supported by competent, substantial evidence, that it must have been based upon misplaced confidence in information supplied by the defendant bank, and that the decision was therefore arbitrary, capricious, and an abuse of discretion under the applicable law since it disregarded the factual situation. Peoples Bank—Trenton, et al. v. James J. Saxon and Manufacturers National Bank of Detroit, Civil Action Nos. 26166, 26167, (U.S.D.C.E.D., Michigan, 1965). In a recent case involving the Fort Knox National Bank at Fort Knox, Ky., the major issue in question 44 was whether a military reservation is considered to be a part of the State of Kentucky for the purposes of 12 U.S.C. 36(c). Fort Knox itself was ceded to the United States by the State of Kentucky and became a Federal enclave. After the Fort Knox National Bank was chartered, it did business until recently only within the U.S. military reservation. An application for a branch of Fort Knox National Bank to be located in Hardin County, Ky., in the town of Radcliff, was approved by this Office. This approval immediately met opposition from competing banks in the State. The principal argument against the proposed branch was that since Fort Knox National Bank was not subject to that State's jurisdiction, it was not legally within the State and could not therefore legally branch into the state. The position of this Office is that the main office of the Fort Knox National Bank is geographically located within the boundary lines of Hardin County, Ky., and that the bank can, therefore, branch anywhere within the county, limited only by 12 U.S.C. 36 and applicable state law as it is therein incorporated. The Comptroller has moved to intervene in this case because of the unusual and important issue involved. First Hardin National Bank and The Farmers Bank of Vino Grove, Kentucky v. Fort Knox National Bank (U.S.D.C., W.D. Kentucky, C.A. No. 5046.) In a recent case involving a branch office of a national bank in New Jersey, the plaintiff State bank sought to have the authorization certificate of the branch in question declared to have been issued in contravention of law, and thus null and void. It alleged that the Comptroller "erroneously" authorized a national bank to open a new branch, since at that time an application by a State bank was pending before the New Jersey Commissioner of Banking and Insurance for permission to establish a branch banking office in the same area applied for by the national bank in question. The State bank alleged that the Comptroller, in granting the national bank the authority to open a new branch, violated 12 U.S.C. 36(c). Plaintiff further alleged that the ex parte contacts made with the Comptroller's Office by the national bank in question constituted a denial of basic administrative fairness to the plaintiff, in violation of the due process clause of the U.S. Constitution and sections 5, 8, and 10 of the Administrative Procedure Act, 5 U.S.C, sections 1004, 1007, and 1009. The plaintiff further alleged that the Comptroller's regulations, contained in 12 CFR section 4 relevant to the processing of a branch application, are invalid under section 3 of the Administrative Procedure Act (5 U.S.C. sec. 1002). Plaintiff also claimed that defendant's actions in allow- ing the defendant national bank to establish a branch bank in the area in question not only denied the plaintiff the right to establish a branch there, but also subjected the plaintiff to unlawful competition. The position of this Office in relation to the plaintiff bank's arguments concerning the Administrative Procedure Act are set out in the summary in the Smithfield Branch case., supra. The Bank of Sussex County v. James J. Saxon (U.S.D.C, D.N.J. G.A. No. 568-65.) The First National Bank of Valdosta, Valdosta, Ga., received permission from the Comptroller of the Currency to construct a drive-in facility 281 feet from its main banking office. After careful consideration, the Comptroller determined that the facility would not constitute a branch under 12 U.S.C. 36(c), but would be a complementary part of the main banking house, not requiring the issuance of a branch certificate. On March 11, 1964, W. M. Jackson, superintendent of banks, State of Georgia., filed a removal petition in the State court and the case was removed to U.S. District Court for the Middle District of Georgia. Prior to reaching a decision as to whether the facility was a separate branch or an extension of existing facilities, the court removed the restraining order against operation of the facility on the grounds that the superintendent did not have standing to bring the suit. This decision is now on appeal before the Fifth Circuit Court of Appeals. The Independent Bankers Association has filed a brief in this case as amicus curiae. W. M. Jackson, Superintendent of Banks of the State of Georgia v. First National Bank of Valdosta (U.S.D.C. M.D. Ga., Civil Action No. 647). In a similar case in the State of Washington, a corporation formed by State banks sought a preliminary injunction against a national bank from opening a facility some 100 feet away from its branch office in accordance with the approval of the Comptroller of the Currency. The injunction was granted, pending hearing on the case's merits; the State supervisor of banking later intervened under the permissive intervention rule. The issue in question is whether the facility is or is not a branch. State Chartered Banks et at. v. Peoples National Bank et al. B. Conversion Litigation In an action pending in the U.S. District Court for the District of New Hampshire, three national banks located in Manchester, New Hampshire, filed a suit challenging the legality of the conversion of the Manchester Morris Plan Bank into a national bank. The plaintiffs seek (1) a declaratory judgment that the Comptroller's approval of the conversion was illegal, and (2) an injunction prohibiting the issuance of a conversion certificate. In support of their position, plaintiffs argued that (1) the Manchester Morris Plan Bank is not a "bank" within the meaning of the laws of the State of New Hampshire, or within the meaning of national laws; (2) The Manchester Morris Plan Bank is an affiliate of the Indianhead National Bank of Nashua or New Hampshire Bank Shares, Inc., and thus would be a branch bank or an affiliate of Indianhead National Bank of Nashua or New Hampshire Bank Shares, Inc., a relationship prohibited by State law. The Comptroller maintains that the New Hampshire statute which permits State banks to be converted to national banks applies to a bank incorporated under State law, or pursuant to an act of the State legislature, as is the case of the Manchester Morris Plan Bank. He further argues that the nature of the Manchester Morris Plan Bank is shown by the fact that it accepts deposits, makes loans, and has other indicia of a bank. He also maintains that neither the Indianhead National Bank of Nashua nor New Hampshire Bank Shares, Inc., own any shares of Manchester Morris Plan Bank. Finally, if the Manchester Morris Plan Bank is converted into a national bank, the Comptroller argues that it will be a unit bank and not a branch of the Indianhead National or New Hampshire Bank Shares, Inc. Whether the Manchester Morris Plan Bank is a bank subject to conversion under New Hampshire law is being determined by a State proceeding in a companion case. This determination will be dispositive of one of the main issues in the Federal case. Amoskeag National Bank et al. (U.S.D.C.N.H.) C.A. No. 2495. C. New Bank Charter Litigation One of the principals in a recently organized State bank in Nebraska filed an action against the Comptroller, the Omaha National Bank, and a proposed new national bank called the Indian Hills National Bank, challenging the legality of the chartering of the proposed bank. Plaintiff sought a declaratory judgment that the Comptroller's approval of the application to charter the proposed bank would be, in actuality, a branch of the Omaha National Bank, and therefore a violation of 12 U.S.C. 36. Plaintiff pointed to the ownership of the proposed bank by shareholders of the Omaha National Bank, contending that the proposed bank would not be a separate banking entity as purported, but would be in fact a branch of the Omaha National Bank, and as such, prohibited by Nebraska banking law. The plaintiff also alleged that the Administrative Procedure Act was violated because of the 45 Comptroller's failure to grant a full adversary hearing. The permission to charter the bank (which the plaintiff held would in effect authorize a branch of the Omaha National Bank) would be an additional violation of the Administrative Procedure Act (5 U.S.G. 1009), because it would be arbitrary, capricious, and an abuse of discretion on the part of the Comptroller. The U.S. District Court for the District of Nebraska, in denying the plaintiff's motion for a preliminary injunction to prevent the Comptroller from issuing the new charter, did not subscribe to the theory that the Administrative Procedure Act required the Comptroller of the Currency to have a formal hearing before approving a national bank charter. The court held that the Administrative Procedure Act (5 U.S.C., section 1004), provides for a hearing "in every case of adjudication required by statute to be determined on the record after opportunity for an agency hearing," but that, since there is no provision in the National Bank Act, 12 U.S.C. 1 et seq. for such a hearing, none is required. The court went further, in finding that 12 U.S.C, section 27, provides that a certificate for a new bank charter shall be issued in the following manner: If, upon careful examination of the facts so reported, and of any other facts which may come to the knowledge of the Comptroller, whether by means of a special commission appointed by him for the purpose of inquiring into the condition of such association, or otherwise, it appears that such association is lawfully entitled . . . The court stated that not only does the quoted statute not require a hearing, but also that it negates the necessity for a hearing by providing other possibilities for reaching a decision. However, the court held that if the proposed bank would in reality be a branch of the Omaha National Bank, the State bank would thereby suffer a legal wrong because of the Comptroller's action. Section 5 U.S.C. 1009(a) provides that "any person suffering legal wrong because of any agency action, or adversely affected or aggrieved by such action within the meaning of any relevant statute, shall be entitled to judicial review thereof." Therefore, the court held that the Administrative Procedure Act provides for a judicial review of the action taken by the Comptroller. It felt that once the plaintiff has alleged a legal wrong, it was the court's duty to review the decision upon petition of the plaintiff, and to "hold unlawful and set aside, any agency action, findings, and conclusions found to be (1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." The case has not yet been heard on its merits. 5 U.S.C. 1009(E) 46 (B) (1). William R. Farris v. Indian Hills National Bank et al. and James J. Saxon (D.C. Neb.) Civil Action No. 02146, 1964. In a new-bank-charter case in Missouri in which the charter had already been issued, the plaintiff banks challenged the legality, under the Administrative Procedure Act and the fifth amendment to the Constitution of the United States, of a charter granted to the defendant bank. The issue is whether the Comptroller is required to hold a formal hearing under the Administrative Procedure Act and the due process provision of the U.S. Constitution in a case where a competitor bank opposes the approval of a new national bank. A complete discussion of the position of this Office on the hearing issue is presented in the comments on the Smithfield branch case. Citizens National Bank of Maplewood et al. v. James J. Saxon and West Side National Bank (U.S.D.C.E.D. Mo. Civil Action No. 65 C 32 CD). D. Merger Litigation In a recent case brought by the Justice Department to enjoin the merger of the Mercantile Trust Co. National Association, St. Louis, Mo., and the Security Trust Co., St. Louis, Mo. (which merger was approved by the Comptroller pursuant to the provisions of the Bank Merger Act of 1960 [12 U.S.C. 1828(c)]), the Department of Justice alleged a violation of section 1 of the Sherman Act (15 U.S.C. 1) and section 7 of the Clayton Act (15 U.S.C. 18). In its complaint, filed on July 7, 1965, the Justice Department sought (1) preliminary and permanent injunctions preventing the banks from carrying out the agreement of merger, and (2) in the event that the merger does take place, relief under section 1 of the Sherman Act and section 7 of the Clayton Act, which would require the resulting bank to divest itself of all stock, assets, and other properties of the bank to be merged, i.e., Security Trust Co. The Comptroller, to present his views on the merger relative to the alleged violation of the antitrust laws, moved to intervene as a party defendant in opposition to the Department of Justice. Acting on his own behalf, the Comptroller sought, and was granted, leave to intervene because of his continuing interest in maintaining the efficacy of the National Banking System in general and the merged Mercantile Trust Co. National Association in particular, and also because it was felt that the interest of the National Banking System and the public at large would be more adequately protected by the Comptroller's expertise in the area of bank mergers. For the purpose of deciding the motion for preliminary injunction, the court assumed, without deciding, that it had jurisdiction. Addressing itself to the major factual question at issue-—the relevant geographic market to be considered—the court found that area to be not the city of St. Louis, as contended by the Department of Justice, but the entire metropolitan area of St. Louis. Therefore, in the relevant market area as determined by the court for the purposes of the motion, the resulting bank would have slightly over 20 percent of the deposits and loans of all the banks therein. These percentages are substantially less than the percentages considered in United States v. Philadelphia National Bank, 374 U.S. 321 (1963) and United States v. First National Bank and Trust Co. of Lexington, 376 U.S. 665 (1964). The court therefore held that, after considering all of the facts and circumstances in evidence, the plaintiff had failed to sustain its burden of proof that there was a probable violation of the Sherman or Clayton Antitrust Acts. After the injunction was denied, the banks merged and the parties stipulated that a trial date would be set at a future time. United States v. Mercantile Trust Company National Association and Security Trust Company and Comptroller of the Currency, James J. Saxon, [U.S.D.C. E.D. Mo.] Civil Action No. 65 C-241 (1). In another action involving a merger approved by the Comptroller of the Currency, the United States v. Crocker-Anglo National Bank, Citizens National Bank and Transamerica Corporation, Civil Action No. 41808 (D.C.N.D. Cal. 1963), the Justice Department contended that the merger violated both the Sherman and Clayton Antitrust Acts by lessening competition and tending toward monopoly. After a finding denying the Government's motion for a preliminary injunction, the case was brought to trial. The court is presently considering the evidence adduced at trial, and briefs will be submitted in the near future. This case is described in detail at page 48 of the 1963 Annual Report of the Comptroller. In still another merger case in which the Justice Department alleged a possible violation of section 1 of the Sherman Act and section 7 of the Clayton Act, the U.S. District Court for the Middle District of Tennessee denied a motion to enjoin the merger. At that time, the court stated that it had— been presented with no facts to indicate any bad faith on the part of the parties concerned with the merger and no facts from which to conclude that they had entered into an unlawful combination or agreement. On the contrary, the natural and reasonable inference is that a merger pre- sented itself as a logical alternative to the expenditure of large sums of money to improve the facilities and services of the [State bank] Trust Co. and to place it in a position to compete successfully in a market which the evidence shows to be one of the most fiercely competitive in the United States. The case is now in the stage of discovery proceedings, and trial date has not yet been set. United States v. Third National Bank of Nashville et al., Civil Action No. 3849 (D.C.M.D. Tenn. 1964). The only other merger case still pending that involves final approval by the Comptroller is one approved by Comptroller Ray M. Gidney, United States v. Continental Illinois National Bank and Trust Company of Chicago et al, Civil Action No. 61 C1441 (D.C.N.D., 111. 1964), The merger has been consummated with the case presently awaiting trial, the court having denied the Government's motion for a preliminary injunction. There has been no change in the status of this case since the publication of the 1962 Annual Report. E. Conservatorship Litigation A lawsuit presently before the U.S. District Court in the Northern District of Oklahoma was brought after a national bank in Oklahoma was placed in conservatorship in 1963 by the Comptroller. Following the termination of the conservatorship and the transfer of the old bank's assets and liabilities to a new national bank, a complaint was filed by an organizer, director, and stockholder of the old national bank. The relief sought includes a rescission of all the documents evidencing the sale of assets to and the assumption of liabilities by the new bank, the payment of damages by the defendant conservator and the new national bank, and the appointment of a receiver to take charge of the operations in the new bank for the preservation of the assets of the old bank. The plaintiff's motion for a summary judgment has been recently denied and the case is now awaiting trial. S. Paul Hazen v. Southern Hills National Bank of Tulsa and William H. Greenfield, Conservator of Southern Hills National Bank, Civil Action No. 5842 (D.C.N.D., Okla. 1963). A detailed discussion of this case appears in the 1963 Annual Report of the Comptroller of the Currency. Another case arising from the placing of a national bank in conservatorship in 1962 was discussed on pages 16, 18, and 19 of the 1962 Annual Report of the Comptroller of the Currency, and page 54 of the 1963 Annual Report. The Third Circuit Court of Appeals has reversed and remanded the case to the District 47 Court of the Middle District of Pennsylvania on the ground that the action of the Comptroller in terminating the conservatorship and waiving the shareholder meeting (required by 12 U.S.C. 181) was reviewable. The Comptroller acted under section 181 of 12 U.S.C., which provides that any liquidation of a national banking association that "is to be effected in whole or in part through the sale of any of its assets to and the assumption of its deposit liabilities by another bank, the purchase and sale agreement must also be approved by its shareholders owning two-thirds of its stock unless an emergency exists and the Comptroller of the Currency specifically waives such requirement for shareholder approval." The court held that to construe the statute as entrusting to the Comptroller a nonreviewable discretion in this area would have the effect of decreasing the safeguards available to shareholders under preexisting law, which in this case would be approval by vote of two-thirds of the outstanding stock. The only issue where the District Court's decision was reversed concerned the reviewability of the Comptroller's action under 12 U.S.C. 181, while all the other issues, such as the decision of the board of directors to sell the assets, were resolved in favor of the Comptroller's position. Minichello et al. v. Saxon et al. 337F.2d75(1964). VI. Fiduciary Activities of National Banks During 1964, the major efforts of the Comptroller's Office relating to the fiduciary activities of national banks were directed to the improvement of the examination process, and to the adaptation of regulation 9 to evolving developments in the corporate fiduciary industry. In February, a conference was held in Washington for all representatives in trusts from the 14 national bank regions. This conference had three objectives: To resolve specific examination difficulties; to improve procedures generally; and to standardize examination techniques in all regions. Significant progress was made in all of these areas. Another meeting of examiners was held in November at the occasion of the Mid-Continent Trust Conference of the American Bankers Association in Chicago. Special attention was given at that time to the effectiveness of examination procedures, with emphasis upon possible modifications which might be necessitated by automation. Study is still being given to these matters. In September, the second school for trust examiners was held in Washington, D.C. In February, a favorable tax ruling was obtained from the Internal Revenue Service concerning the collective investment of moneys of certain managing agency accounts. Minor corresponding changes were made in regulation 9 at that time. During the course of the year, a number of rulings were issued pertaining to the exercise of fiduciary powers by national banks. These included rulings concerning proper expenses chargeable to collective investment funds, successor fiduciary accounts, organization of trust departments, verification of trust department assets^ real estate mortgage investments in collective investment funds, and investments of fiduciary funds in variable amount notes. The June 1965 issue of the National Banking Review contained an article entitled "Bank Trust Investments in 1964." This article was based upon annual reports of trust departments of national banks, which for the first time reflected market value figures of fiduciary assets, and material gleaned from annual reports of collective investment funds filed with the Office pursuant to regulation 9. Tables B-21 and B-22 contain data on bank trust assets and income, and common trust funds. VII. International Banking and Finance National banks expanded the scope and volume of their international activities at an impressive rate during 1964. The overseas branches, foreign financing and banking affiliates, and international banking de48 partments of national banks contributed significantly to thefinancingof the increased volume of U.S. foreign trade, and to the economic development of the developing nations. During the year, the number of national bank foreign branches increased from 123 to 139, and their total resources increased from $2.6 billion as of December 20, 1963, to $3.3 billion on December 31, 1964. This 27-percent increase in foreign branch assets of national banks exceeded considerably the growth rate of commercial banks generally in the United States. London accounted for over 50 percent of the 1964 growth in overseas branch resources. At the end of 1964, the London branches held in excess of 30 percent of the total foreign branch assets of national banks. Tables B-29, B-30, and B-31 show the location and consolidated statement of assets and liabilities of foreign branches. The foreign banking and financing affiliates of national banks also increased their activities during 1964. At the end of the year, 13 national banks had direct investments in 18 subsidiaries engaged in international banking and finance. The combined assets of these corporations exceeded $750 million, and their capital funds exceeded $100 million. Four national banks operate subsidiary banks in New York City. These subsidiary banks specialize in international or foreign banking. Another national bank has a subsidiary banking corporation that maintains a branch in Hong Kong. The foreign banking and financing affiliates of national banks have made equity investments in excess of $35 million in industrial and financial institutions operating throughout the free world. Commercial banking or trust company affiliates of national banks operate in the following countries: Argentina, Bahamas, Cameroon, Canada, Central African Republic, Chad, Congo Republic, Dahomey, France, Gabon, Iran, Islamic Republic of Mauritania^ Italy, Ivory Coast, Liberia, Libya, Mali, Netherlands, Niger, Nigeria, Senegal, South Africa, Spain, Togo, Turkey, and Upper Volta. In addition, development banks and other financial affiliates of national banks operate in Argentina, Australia, Bahamas, Colombia, England, France, Germany, Greece, India, Luxemburg, Malaysia, Nigeria, Pakistan, Philippines, South Africa, Spain, and Switzerland. The increased importance, both to the banks and the public, of the international activities of national banks called for improved supervision. An International Operations Division, headed by the Deputy Comptroller of the Currency for International Banking and Finance, was established in 1964 to supervise more efficiently the international activities of national banks. The Department of Banking and Economic Research is also increasing its research activities in the international sphere. National Bank Examiners in the International Operations Division are receiving specialized training in foreign languages as well as in international banking and finance. Pilot examinations of selected branches were conducted in Latin America early in 1965. Based on the procedures and techniques developed in the pilot examinations, regular overseas examinations will be conducted in the future. The International Operations Regulation (12 CFR 20) became effective September 7, 1964, and has proven to be an additional and effective tool in the supervision of the international activities of national banks. That regulation requires prior notification of the intention: to establish foreign branches; to acquire a controlling interest in an Edge Act corporation, an agreement corporation, or a foreign bank; to establish branches of controlled banks or corporations and to acquire indirect control of foreign banks or corporations. National banks also report within 30 days of the consummation of other transactions such as the acquisition of less-than-control of a foreign bank. The transfer from the Federal Reserve Board to the Comptroller of the Currency of the authority to charter foreign branches would increase the efficiency of the supervision of the international activities of national banks. Although the Comptroller of the Currency has the responsibility for the supervision of all activities—domestic and foreign—of national banks, the chartering power for foreign (but not domestic) branches of national banks is exercised by the Federal Reserve Board. Appropriate legislation transferring this chartering authority to the Comptroller is under consideration by the 89th Congress. During the past year, and for the first time in the history of the Office, the Comptroller traveled extensively to assess and survey American and foreign banking overseas. In September 1964, the Comptroller was a special adviser to the Secretary of the Treasury at the International Monetary Fund and International Bank for Reconstruction & Development meetings in Tokyo. Following the completion of these meetings, he visited with American branches and local banks in Japan, Hong Kong, and the Philippines. In November, the Comptroller traveled to France, Spain, Italy, Turkey, Greece, Egypt, England, Sweden, Denmark, Germany, and The Netherlands to confer with local government officials and the heads of local and American banks operating in those countries. To further the exchange of banking information and supervisory techniques and experiences, the Comptrol49 ler provides orientation and training programs for foreign bankers and bank supervisors. These programs range in duration from a day to more than a month. During the past year, teams from France, India, Indonesia, Iraq, Japan, Korea, Philippines, Turkey, and Yugoslavia visited and trained at the Washington and field offices. Other foreign bankers and officials have also expressed considerable interest in the progress of the National Banking System and its supervision. These officials have received copies of our manuals and publications. In 1964, the Comptroller of the Currency was requested by the National Bank of Vietnam and the Agency for International Development, Department of State, to furnish training assistance for the National Bank of Vietnam. The Director of the International Operations Division and a national bank examiner participated in this program in Saigon. They trained Vietnamese bank examiners and served as advisers to the Central Bank in the implementation of Vietnam's recently enacted banking legislation. As requested by the President in his 1965 Balance of Payments message, the Comptroller of the Currency is participating in the supervision of the voluntary foreign credit restraint program. National bank examiners, in connection with the regular examinations of the international activities of national banks, are appraising and reporting on the effectiveness of the program. However, since the program is voluntary, the examiners do not enforce the credit restraint guidelines. VIII. Management Improvement Increased Washington-Region communication at the highest levels has succeeded in establishing a common concern for efficiency. Regional visits by highechelon members of the Washington staff, including Deputy Comptrollers, economists, and attorneys, as well as Regional Comptrollers' Conferences, have been successful in bringing about this desired objective. The following are examples of important management improvements effected during the year: The training and planning stages of the installation of automatic data processing have borne fruit in the completion of the payment-of-travel-vouchers phase. In addition, this Office has nearly completed the assumption of its own checkwriting function. The ADP equipment is already programmed to produce several expense reports, and completion of this phase is approaching rapidly. The ADP system has already allowed substantial annual savings. A continuing policy of decentralization of duties, where economy or effectiveness warrants, has found expression in several actions through the last year. The 14 Regional Comptrollers have been given additional discretionary functions formerly reserved to the Washington Office. Attorneys have been assigned to several Regional headquarters, allowing more frequent and more immediate transmission of Office opinion to bankers and other interested parties. The Regional Offices have also assumed the responsibility for examining travel vouchers and for reviewing certain aspects of bank examination reports. These two activities were removed from Washington at a great saving in time 50 and dollars. Further, the performance of these functions was greatly improved by their allocation to points closer to the traveling force and to bankers. New travel regulations were promulgated to provide more equitable reimbursement to the force. This policy of decentralization has also yielded considerable savings. The Office conducted a 1-week program where Regional personnel were instructed in the performance of their new duties. An illuminating side effect of this school was the discussion of common problems by Washington and Regional personnel. Intra-Office communication was greatly advanced. The new Report of Examination, which was introduced in the latter part of 1964, provides a more efficient device for obtaining data for supervisory and statistical purposes. Several instances of continuing management improvements were instituted during 1965, for example: The development of new comprehensive records retention and disposition schedules and of a new filing categories system is substantially complete. Substantial savings are expected from this program through the elimination of duplication and accumulated records materials. A new division of personnel planning and development was inaugurated to enable management to identify at an early stage men of exceptional talent capable of advancement to higher positions in the Office. The program consists of manpower inventory and projection of manpower needs. One substantial improve- jiicnl ai: ..:1\ ' w M / . ' u , •• . '•< \ ; •!' j !',-\o(.ion. p l a n . T h r o n g : , lejulcii. o b j i r ' ^ t - t •..llna-iorij of e a c h e m - p'cr. o;\ the Office '.civs LO cstabliVi a*, cnuc of employee growth. Even qualified employee is assured of substantial incentives and rewards for notable performance. Regional schools for examiners designed to give instruction in the techniques of examining bank-oper- ated automatic data processing were started in 1964, and are held on a continuing basis as part of the Office's training program. These schools were formerly held in Washington, but have been decentralized to the regions. This decentralization has resulted in smaller classes, with a concomitant increase in student participation and benefit together with a significant per capita cost reduction. REGIONAL ORGANIZATION Regional comptroller Headquarters Elmer J. Peterman. . . . Boston, Mass Charles M. Vein Horn. Marshall Abrahamson. Frank H. Ellis. Paul E. Lackland New York, N.Y Philadelphia, Pa Cleveland, Ohio Richmond, Va Donald B. Smith Joseph G. L u t z , . . . . . . William A. Robson Atlanta, Ga Chicago, III Memphis, Tenn Douglas T. Bushman.. ; Paul L. Ross. i Norman R. D u n n . . . j John R. Thomas i Kenneth W. Leaf i Arnold E. Larsen Minneapolis, Minn. . Kansas City, Mo. . . . Dallas, Tex Denver, Colo Portland, Oreg San Francisco, Calif.. States Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont. New Jersey, New York. Pennsylvania. Indiana, Kentucky, Ohio. Delaware, District of Columbia, Maryland, North Carolina, Virginia, West Virginia. j Florida, Georgia, South Carolina. I Illinois, Michigan. ] Alabama, Arkansas, Louisiana, Mississippi, Tenj nessee. Minnesota, North Dakota, South Dakota, Wis| consin. j Iowa, Kansas, Missouri, Nebraska. i Oklahoma, Texas. | Arizona, Colorado, New Mexico, Utah, Wyoming. | Alaska, Idaho, Montana, Oregon, Washington. | California, Hawaii, Nevada. 51 COMPTROLLER OF THE CURRENCY Chart of Organization Regional Comptrollers of the Currency Comptroller nf thp Currency National Advisory Committee to the Comptroller of the Currency Regiona Advisory Director, Department of Banking and Economic Research Deputy Comptroller for Bank Supervision Deputy Comptroller for New Charters Chief Counsel First Deputy Comptroller Administrative Assistant to the Comptroller Deputy Comptroller for Trusts Deputy Comptroller Deputy Comptroller Deputy Comptroller for for for Mergers Domestic Bank Operations International Banking and and Examination Branches and Finance 52 COMPTROLLER OF THE CURRENCY First Deputy Comptroller JAMES J. SAXON Wiliiam B. Camp Administrative Assistant to the Comptroller Anthony G. Chase Deputy Comptroller for Bank Supervision and Examination Justin T. Watson Deputy Comptroller for New Charters Thomas G. DeShazo Deputy Comptroller for Trusts Dean E. Miller Deputy Comptroller for Mergers and Branches Richard J. Blanchard Deputy Comptroller of Domestic Bank Operations R. Coleman Egerfson Deputy Comptroller for International Banking and Finance Director, International Operations E. Radcliffe Park Wallace R. Anker Director, Department of Banking and Economic Research Victor Abramson Chief Counsel Robert Bloom Associate Chief Counsel Roman J. Gerber Associate Chief Counsel Charles E. McEnerney Associate Chief Counsel Ernest Ginsberg Assistant to the Director of the FDIC (Comptroller of the Currency) Albert J. Faulstich Director, Bank Organization Division T. M. Brezinski Chief Representative in Trusts P. P. Kellogg Assistant Chief Representative in Trusts R. P. St. Pierre Special Assistant to the Comptroller (Public Affairs) Special Assistant to the Comptroller E. E. Cox Special Assistant to the Comptroller John D. Gwin W. Robert Grubb 53 I X . Income and Expenses of the Office of the Comptroller of the Currency This report covers my third full year as Comptroller of the Currency and the third consecutive year in which income of this Office has exceeded our expenses. This is in sharp contrast with the unfavorable 1957-61 trend of substantial equity erosion. In 1963, the accounting system of this Office was modernized. A modified accrual system, in conformity with generally accepted accounting principles, was established. The move from a cash basis to our present accrual method required that we adjust the pre1963 financial statements for comparison purposes. A. Income for 7964 Total income for 1964 was up $1,056,041 over 1963, an increase of 6.3 percent. The major portion of this increase is attributable to Assessment and Trust Examination income. Assessment income rose $955,138, or 6.7 percent, during 1964, reflecting an increase in the number of national banks and substantial growth of assets in those banks previously in the national system. Trust departments under the supervision of this Office similarly experienced an appreciable expansion. This growth, coupled with the considerably increased number of trust departments examined in 1964, resulted in additional revenue from this source of $119,556, or 11.1 percent. Funds derived from application and investigation fees reflected only a moderate gain. Income from investments for 1964 was up 21.9 percent to a new high of $430,567. This increase was due principally to a full realization of prior improvements made in the management of our investment portfolio. Average cash balances were substantially reduced at that time and maturities scheduled in such a manner as to maximize the amount of our return. B. Expenses for 1964 Total expenditures for 1964 show only a moderate rise of $364,799, 2.3 percent over 1963. This modest increase vividly illustrates the policy of this Office to incur additional expenses only when the value to be derived therefrom is clearly in the interest of a better National Banking System. Salaries and related expenses comprise the major category of increase in expenses over last year. This growth represents chiefly the implementation of that 54 part of the congressional pay raise granted in 1962 which became effective early in 1964 and the additional pay raise granted by Congress during this past year. The total number of employees in this Office declined from 1,538 to 1,531 despite additions to the Law Department, the Banking and Economic Research Department, and the increased number of lawyers hired for our trust examination staff. In this era of increasingly complex banking practices, this Office is successfully continuing to implement a personnel policy aimed at reducing the number of employees while acquiring staff members more sophisticated in their ability to deal with the areas of our concern. Figures for 1964 indicate an extensive reduction in per diem allowances with a concomitant increase, of moderate amount, in travel expenses. This seeming paradox is a reflection of two important factors. First, several of our subregional field offices were relocated to correspond with population trends. This strategic placement of offices was then complemented by a revision in the travel regulations of this Office. The result was a decrease in both travel and per diem charges on the part of our examining staff. Second, increased emphasis was placed on direct communication with bankers both by Washington Office personnel and by Regional Comptrollers. This emphasis on the freer exchange of ideas and objectives has necessitated increased travel and communication expense despite the substantially reduced per diem charges. Publications expense has remained relatively constant in relation to 1963figures,despite the substantial decrease in income from this source. This fact is primarily attributable, once again, to our policy of improving communication v/ith the banking community. Efforts have been intensified to establish a free flow of information not only to national banks, but to State bank supervisors and foreign bankers. Today's complex banking structure requires an extensive communication network. This Office is rising to meet its obligation to the world financial community as a source of such vital information. It is estimated that total income for 1965 will reach $19,538,500, an increase of $1,611,574. While this is necessarily an estimate, we believe it to be reasonable. G. Comptroller's Equity Continuing deterioration of the Comptrollers equity due to deficit spending in the 5-year period ending December 31, 1961, was effectively terminated in 1962. Since December of 1961, almost $4 million has been added to the then marginal equity position of this Office. The total in our equity account is not approaching the goal established in December of 1961, as a minimum requirement to meet the needs of this Office in the event it should ever become necessary to operate for a reasonable period of time without our normal means of income. D. Independent Audit The Audit Staff of the Bureau of Accounts in the Treasury Department conducted an independent audit of the financial statements and supporting records of the Office of the Comptroller of the Currency for calendar year 1963. The audit was made in accordance with generally accepted auditing standards. A similar audit for calendar year 1964 is now in progress. TABLE 13.—Comparative statement of assessment and other operating income, and expenses of the Office of the Comptroller of the Currency, by calendar years 1958 through 1964 1964 Item 1963 1962 1961 1960 1959 1958 INCOME '$15, 200, 556i$14, 245,418 $13,289,291 $10, 1,196,574 1, 077,018 953, 889 13,454 16,090 0 ! 190.933 166,962 156,116 250.712 243, 899 108,063 i 46,000 47, 500 49, 000 4. 759 4,362 3,324 7,987 ' 2.498 2,850 466,120 496'. 330 238, 750 54^ 760 212,683 o0 34.125 32,282 5, 658 2.588 4,222 Assessments , Trust examinations Trust investigations Branch investigations. Charter investigations Merger and consolidation fees Affiliate examinations Extra examinations Reporting services Manuals and publications Currency issue management.. Other Subtotal Investment income 17,496,359 16 517,772 14,810,642 11, 436, 767 10 974, 424 169,865 216,414 430,567 353,113 172,106 9, 945, 692 155,651 8,842,019 173, 675 1 17,926,926 16 870, 885 14,982,748 i i , 606, 632 11 190,838 10,101,343 9,015,694 . Total 686, 750 $10,213,494 $9, 247, 563 $8, 224, 237 511,121 540, 772 477, 364 422, 046 0 0 0 0 100,230 98,183 86,153 63, 162 37, 732 31,800 25, 469 32, 038 4,000 0 0 0 2,326 2,354 3, 606 2,038 5,537 2,375 9,416 8, 124 86, 768 84, 480 93,110 89, 642 0 0 0 0 0 0 0 0 2,303 966 3,011 732 ; EXPENSES Salaries : 11,658, 110 10 900, 824 9,490,714 Employer's retirement, insurance and F.I.C.A. C o n t r i b u t i o n . . . . . 874, 263 818,243 712, 535 Per diem 1,945,213 2 402, 914 2, 174, 488 : 916,573 Travel 708, 776 866, 591 180,069 Rent 186,462 1 90, 477 71, 806 Supplies 65. 284 76, 869 111,272 Printing, books, and periodicals. . . . 311,129 303, 506 Furniture and fixtures. 205, 930 Depreciation 48, 567 31,617 Remodeling 19.663 69, 094 Office machines, rentals, and repairs 13,492 26 868 Communications 128, 558 118,658 " " 118,' 304 Shipping expenses 35, 097 53,106 55, 559 Other 64, 336 69, 933 80, 662 Total 8 192,979 7,511,943 7, 493, 358 645, 641 1, 841,168 654, 657 162,837 30, 544 84,418 31,324 581,450 1 684, 544 577, 362 157,496 27, 268 85, 562 42, 733 509, 768 1,590,753 557, 062 153,333 27, 539 75, 908 26, 864 505, 994 1,597,819 522, 031 142,057 22,236 65, 368 28, 741 74, 449 . . . '74,'284 19,346 24, 814 38, 904 49,411 72, 820 21,379 37, 681 59, 499 20, 446 21,907 | 16,280,123 15, 915,324 13,910,115 12, 110,424 11 497, 903 10, 585, 050 10,479,456 Net Income ( + ) or Loss (—-). . 1 + 1, 646, 803 + 955,561 + 1, 072, 633 8, 527,136 - 503, 792 — 307, 065 —483, 707 — 1,463,762 55 TABLE 14.—Comparative statement of financial operations of the Office of the Comptroller of the Currency, by calendar years 1958 through 1964 Item W ^ 7964 7963 7962 7967 7960 7959 7958 ASSETS Current assets: Gash on hand and on deposit. . . $603, 988 Accounts receivable 11,885 Investments 8,571,481 Accrued interest receivable 88,715 Prepaid expenses 10, 646 Total current assets Fixed assets: Furniture, fixtures, and equipment Less: accumulated depreciation . Total fixed assets Total assets $350, 295 $1,225,955 125,454 89, 912 7,139,008 5, 542, 450 30, 479 83,018 527 4,716 $812,139 47,148 4, 748, 866 24, 543 2,404 $957, 281 $1,125,864 45,715 57, 826 5, 098, 809 5, 035,126 56, 047 75,106 4,441 0 $747,272 47,151 5, 951, 940 44, 968 0 9,286,715 7, 702, 491 6, 889, 323 5, 635,100 6,162,293 6, 293, 922 6,791,331 524, 621 90, 481 426,475 41,914 0 0 0 0 0 0 0 0 0 0 434, 140 384, 561 0 0 0 0 0 9, 720, 855 8, 087, 052 6, 889, 323 5,635,100 6,162,293 6, 293, 922 6,791,331 LIABILITIES Current liabilities: Accounts payable Accrued payroll Payroll deductions for bonds and taxes, etc Accrued travel expenses Deferred income 390 435, 059 117,961 314,611 119,209 260, 959 49, 000 179, 732 41,760 175,690 43,157 123, 008 32, 000 94, 000 43, 937 209, 000 10,202 38, 554 209, 527 6, 154 38,161 190,268 0 31, 557 215,000 0 44, 473 191,636 0 45, 317 165, 000 0 36, 828 176, 000 0 Total current liabilities 699, 038 686, 807 608, 597 475, 289 453, 559 376, 482 338, 828 Other liabilities: Closed receivership trust funds. . 2, 697, 942 Employees accumulated annual leave 1,050,564 2, 702, 902 2, 687, 754 2, 692, 094 2,695,165 2, 648, 206 2, 657, 362 1,070,836 1,117,659 1, 062, 940 1,105,000 1,054,000 1, 095, 000 3, 748, 506 3, 773, 738 3, 805, 413 3, 755, 034 3,800,165 3, 702, 206 3, 752, 362 4} 447} 544 4, 460, 545 4,414,010 4,230, 323 43 253, 724 4, 078, 688 4,091,190 5,273,311 3, 626, 507 2, 475, 313 1,404,777 1,908,569 2,215,234 2, 700,141 Total liabilities and equity. . . . 9, 720, 855 8, 087, 052 6, 889, 323 5,635,100 6,162,293 6, 293, 922 6, 791, 331 Total other liabilities Total liabilities Equity: X. Issue and Redemption of Currency During the year ending December 31, 1964, the Comptroller made 1,726 shipments of new Federal Reserve notes (1,457,848,000 notes with an aggregate value of $8,223,148,000) to Federal Reserve agents. Delivery of 42,424,000 notes with an aggregate value of $301,000,000 was made to the Treasurer of the United States. There were 4,670 shipments of unfit Federal Reserve notes and Federal Reserve Bank notes (560,805,402 notes with an aggregate value of $6,635,091,243) received for verification and certifica56 tion for destruction; 325,390 badly damaged Federal Reserve notes and Federal Reserve Bank notes with an aggregate value of $6,429,865 were presented by the Treasurer of the United States for identification approval. The Comptroller also received shipments of National Bank notes (1,767,386 notes with an aggregate value of $14,146,970) for verification and destruction. On December 31, 1964, the value of National Bank notes outstanding was $22,597,493. APPENDIX A Merger Decisions, 1964 779-563—65——5 INDEX Merger1 Decisions, 1964 Page The Citizens Bank, Westerville, Ohio, and the City National Bank & Trust Co. of Columbus, Ohio (7621), which had merged January 2,1964, under the charter and title of the latter bank (7621) Traders Bank & Trust Co., Hazleton, Pa., and Northeastern Pennsylvania National Bank & Trust Co., Scranton, Pa. (77), which had merged January 3,1964, under charter of the latter bank (77) and under title of "Northeastern Pennsylvania National Bank & Trust Co." White Haven Savings Bank, White Haven, Pa., was purchased January 3, 1964, by the First National Bank of Wilkes-Barre, Wilkes-Barre, Pa. (30) Texas National Bank of Houston, Houston, Tex. (10152), and the National Bank of Commerce of Houston, Houston, Tex. (10225), which had consolidated January 17, 1964, under charter of the latter bank (10225) and under title "Texas National Bank of Commerce of Houston." The Bank of Worcester, Worcester, N.Y., and National Commercial Bank & Trust Co., Albany, N.Y. (Charter No. 1301), which had merged January 31, 1964, under the charter and title of the latter bank (1301).. The Farmers & Merchants National Bank of Williamsburg, Williams burg, Pa. (9392), and the First National Bank of Claysburg, Claysburg, Pa. (10232), which had merged January 31, 1964, under charter of the latter bank (10232) and under title of "The Central Pennsylvania National Bank of Claysburg" The First National Bank of Lacona, Lacona, N.Y. (10175), and the Merchants National Bank & Trust Co. of Syracuse, Syracuse, N.Y. (1342), which had merged January 31, 1964, under the charter and title of the latter bank (1342) Beaver County Trust Co., New Brighton, Pa., and the Western Pennsylvania National Bank, McKeesport, Pa. (2222), which had consolidated February 7, 1964, under charter and title of the latter bank (2222) Farmers Bank of Holland, Inc., Holland, Va., and Seaboard Citizens National Bank, Norfolk, Va. (10194), which had merged February 12, 1964, under the charter and title of the latter bank (10194) The First National Bank of New Bloomfield, New Bloomfield, Pa. (5133), and the Harrisburg National Bank & Trust Co., Harrisburg, Pa. (580), which had merged February 14, 1964, under the charter and title of the latter (580) 1 62 63 64 65 67 68 69 70 71 72 Includes mergers, consolidations, and purchase and sale transactions where the emerging bank is a national bank. Decisions are arranged chronologically by effective date. 58 Security Trust Co., Lynn, Mass, and the Danvers National Bank, Danvers, Mass. (7452), which had consolidated February 21, 1964, under charter of the latter bank (7452) and under title of "SecurityDanvers National Bank" Commonwealth Bank & Trust Co., Pittsburgh, Pa., and the Union National Bank of Pittsburgh, Pittsburgh, Pa. (705), which had consolidated February 28, 1964, under charter and title of the latter (705) First National Bank of Minoa, Minoa, N.Y. (13476), and Lincoln National Bank & Trust Co. of Central New York, Syracuse, N.Y. (13393), which had merged February 28, 1964, under charter and title of the latter bank (13393) The First National Bank of Pullman, Pullman, Wash., (4699), and Old National Bank of Washington, Spokane, Wash. (4668), which had merged February 28, 1964, under the charter and title of the latter bank (4668) The Peoples Bank of Erie County, Hamburg, N.Y., and Liberty National Bank & Trust Co., Buffalo, N.Y. (15080), which had merged March 5,1964, under the charter and title of the latter bank (15080) Grand Ledge State Bank, Grand Ledge, Mich., and Loan & Deposit State Bank, Grand Ledge, Mich., were purchased March 14, 1964, by Michigan National Bank, Lansing, Mich. (14032) The First National Bank of Bicknell, Bicknell, Ind. (7155), Bicknell Trust & Savings Co., Bicknell, Ind., the Citizens State Bank, Bicknell, Ind., and the American National Bank of Vincennes, Vincennes, Ind. (3864), which had merged March 21, 1964, under charter and title of the latter bank (3864) Darlington County Bank & Trust Co., Darlington, S.C., and the First National Bank of South Carolina of Columbia, Columbia, S.C. (13720), which had merged March 31, 1964, under charter and title of the latter bank (13720) Southern Bank of Commerce, Danville, Va., and Virginia National Bank, Norfolk, Va. (9885), which had merged April 3, 1964, under charter and title of the latter bank (9885) The First National Bank, of Buena Vista, Buena Vista, Va., (9890), and Virginia National Bank, Norfolk, Va. (9885), which had merged April 3, 1964, under charter and title of the latter bank (9885) The New Market National Bank, Newmarket, N.H., (1330), and the Rockingham National Bank of Exeter, Exeter, N.H. (12889), which had merged April 3,1964, under charter and title of the latter bank (12889) 74 75 78 79 80 81 82 84 85 86 88 Page Delton State Bank, Delton, Mich., was purchased April 18, 1964, by the First National Bank & Trust Go. of r Kalamazoo, Kalarnazoo, Mich. (191) The First National Bank of Sharpsville, Sharpsville, Pa. (6829), was purchased April 18, 1964, by the McDowell National Bank of Sharon, Sharon, Pa. (8764) The First National Bank of Lebanon, Lebanon, Va. (6886), and the First National Exchange Bank of Virginia, Roanoke, Va. (2737), which had merged April 24, 1964, under charter and title of the latter bank (2737) The First National Bank of Richlands, Richlands, Va. (10850), and the First National Exchange Bank of Virginia, Roanoke, Va. (2737), which had merged April 24, 1964, under charter and title of the latter bank (2737) The Winchester National Bank, Winchester, N.H. (887), was purchased April 24, 1964, by the Cheshire National Bank of Keene, Keene, N.H. (559). State Bank of Linwood, Linwood, Mich., and Peoples National Bank & Trust Co. of Bay City, Bay City, Mich. (14641), which had merged April 25, 1964, under charter and title of the latter bank (14641) The Union National Bank of Mahanoy City, Mahanoy City, Pa. (3997), and the Pennsylvania National Bank & Trust Co. of Pottsville, Pottsville, Pa. (1663), which had merged May 8, 1964, under charter and title of the latter bank (1663) Bank of Dayton, Dayton, Ind., was purchased May 9, 1964, by Lafavette National Bank, Lafayette, Ind. (14175) ' The First National Bank of Blue Ridge Summit, Blue Ridge Summit, Pa. (12281), and First National Bank & Trust Co. in Waynesboro, Waynesboro, Pa. (11866), which had merged May 9, 1964, under the charter and title of the latter bank (11866) Cherry Hill National Bank, Cherry Hill, N J . (14936), and First Camden National Bank & Trust Co., Camden, N.J.(1209), which had merged May 15, 1964, under charter and title of the latter bank (1209). Woodbridge National Bank, Woodbridge, N J . (14378), and First Bank & Trust Co., National Association, Fords, N J . (15255), which had merged May 15, 1964, under the charter and title of the latter bank (15255). Carolina Bank, Graniteville, S.C., and the Citizens & Southern National Bank of South Carolina, Charleston, S.C. (14425), which had merged May 23, 1964, under the charter and title of the latter bank (14425). Citizens Bank of Darlington, Darlington, S.C, and the Citizens & Southern National Bank of South Carolina, Charleston, S.C. (14425), which had merged May 23, 1964, under charter and title of the latter bank (14425) The Bank of Rowlaxid, Rowland, N.C., and Southern National Bank of North Carolina, Lumberton, N.C. (10610), which had merged May 23, 1964, under charter and title of the latter bank (10610) Salmon Falls Bank, Rollinsford, N.H., and the First National Bank of Somersworth, Somersworth, N.H. (1180), which had merged May 29, 1964, under the charter of the latter bank (1180) and under the title "First Somersworth-Rollinsford National Bank." Citizens Industrial Bank, Grand Rapids, Mich., was purchased June 15, 1964, by the Michigan National Bank, Lansing, Mich. (14032) The Bank of Endicott, Endicott, Wash., was purchased June 19, 1964, by the National Bank of Commerce of Seattle, Seattle, Wash. (4375) The American National Bank of San Bernardino, San Bernardino, Calif. (10031), and the Bank of California, National Association, San Francisco, Calif. (9655), which had merged June 26, 1964, under charter and title of the latter bank (9655) 89 90 92 93 94 95 96 97 98 99 101 102 104 105 106 107 The First National Bank of Narrowsburg, Narrowsburg, N.Y. (12496), and the First National Bank in Callicoon, Callicoon, N.Y. (13590), which had consolidated June 30,1964, under charter of the latter bank (13590), and under title of "United National Bank." The Macungie Bank, Macungie, Pa., and the First National Bank of Allen town, Allentown, Pa. (373), which had merged June 30, 1964, under charter and title of the latter bank (373) The Peoples National Bank of West Alexander, WTest Alexander, Pa. (8954), and the First National Bank of Fredericktown, Fredericktown, Pa. (5920), which had merged June 30, 1964, under the charter and title of the latter bank (5920) Tri-Cities National Bank, Pasco, Wash. (14919), was purchased June 30, 1964, by Old National Bank of Washington, Spokane, Spokane, Wash. (4668) The First National Bank of Hagerman, Hagerman, N. Mex. (7503), was purchased July 17,1964, by the First National Bank of Roswell, Roswell, N. Mex. (5220).. Allegan State Bank, Allegan, Mich., and the First National Bank & Trust Co. of Kalamazoo, Kalamazoo, Mich. (191), which had merged July 18, 1964, under the charter and title of the latter bank (191) National Bank of Commerce of Chicago, Chicago, 111. (14349), and Central National Bank in Chicago, Chicago, 111. (14362), which had merged July 18, 1964, under the charter and title of the latter bank (14362). . The Community Bank, Dayton, Ohio, and the National Bank of Dayton, Dayton, Ohio (1788), which had merged July 18, 1964, under the charter and title of the latter bank (1788) Fair Lawn-Radburn Trust Co., Fair Lawn, N.J., and National Community Bank of Rutherford, Rutherford, N J . (5005), which had merged July 31, 1964, under the charter and title of the latter bank (5005). . Industrial City Bank & Trust'Co., Worcester, Mass., and the Mechanics National Bank of Worcester, Worcester, Mass. (1135), which had merged July 31, 1964, under the charter and title of the latter bank (1135). . The First National Bank of Waynesboro, Waynesboro, Va. (7587), and First & Merchants National Bank, Richmond, Va. (1111), which had merged July 31, 1964, under the charter and title of the latter bank (1111) The First National Bank of Wise, Wise, Va. (10611), and the First National Bank of Norton, Norton, Va. (6235), which had consolidated July 31, 1964, under the charter of the latter bank (6235) and under title "The Wise County National Bank." The Peoples-Farmers National Bank, Mifflin, Pa., Mifflin, Pa. (9678), and the Russell National Bank of Lewistown, Lewistown, Pa. (10506), which had merged July 31, 1964, under the charter of the latter bank (10506) and title "The Russell National Bank.". The Peoples National Bank of Rock Hill, Rock Hill, S.C. (9407), and the Citizens & Southern National Bank of South Carolina, Charleston, S.C. (14425), which had merged August 1, 1964, under the charter and title of the latter bank (14425) The Ashland National Bank, Ashland, Pa. (5615), and Pennsylvania National Bank & Trust Co., Pottsville, Pa. (1663), which had merged August 7, 1964, under charter and title of the latter bank (1663) The First National Bank of Mount Holly Springs, Mount Holly Springs, Pa. (8493), and Cumberland County National Bank & Trust Co., New Cumberland, Pa. (14542), which had merged August 7, 1964, under the charter and title of the latter bank (14542) The First National Bank of West Middlesex, West Middlesex, Pa. (6913), and First National Bank of Mercer County, Greenville, Pa. (249), which had merged August 8, 1964, under the charter and title of the latter bank (249) 109 110 Ill 112 113 114 116 117 118 119 120 121 122 123 125 126 127 59 Page State Bank of Nappanee, Nappanee, Ind., and the First National Bank of Elkhart, Elkhart, Ind. (206), which had merged August 15, 1964, under the charter of the First National Bank of Elkhart (206) and title "The First National Bank of Elkhart County" 128 The Nashville Bank & Trust Co., Nashville, Tenn., and Third National Bank in Nashville, Nashville, Tenn. (13103), which had merged August 18, 1964, under the charter and title of the latter bank (13103) 129 The Farmers Bank, Kendrick, Idaho, was purchased August 21, 1964, by First Security Bank of Idaho, National Association, Boise, Idaho (14444) 132 The Georgetown National Bank, Georgetown, Ky. (8579), and First National Bank & Trust Co., Georgetown, Ky. (2927), which had merged August 29, 1964, under the charter of the latter bank (2927), and under the title "First Georgetown National Bank and Trust Company" 133 Pocatello National Bank, Pocatello, Idaho (14859), and the Idaho First National Bank, Boise, Idaho (1668), which had merged September 4, 1964, under charter and title of the latter bank (1668) 135 Peoples Bank of Stuarts Draft, Inc., Stuarts Draft, Va., and National Bank & Trust Co., at Charlottesville, Charlottesville, Va. (10618), which had merged September 30, 1964, under charter of the latter bank (10618) and title "National Bank and Trust Company" 136 The Branford Trust Co., Branford, Conn., and the First New Haven National Bank, New Haven, Conn. (2), which had merged September 30, 1964, under charter and title of the latter bank (2) 137 Spokane National Bank, Spokane, Wash. (14866), and National Bank of Washington, Tacoma, Washington, (3417), which bad merged October 2, 1964, under charter and title of the latter bank (3417) 138 The Citizens National Bank of Corry, Corry, Pa. (4479), and the Marine National Bank of Erie, Erie, Pa. (870), which had merged October 2, 1964, under charter of the latter bank (870), and with the title "Marine National Bank" 139 The Citizens National Bank & Trust Co. of Oneonta, Oneonta, N.Y. (8920), and National Commercial Bank & Trust Co., Albany, N.Y. (1301), which had merged October 2, 1964, under charter and title of the latter bank (1301) 140 Citizens National Bank of Beaver Falls, Beaver Falls, Pa. (14764), and Western Pennsylvania National Bank, McKeesport, Pa. (2222), which had consolidated October 3, 1964, under charter and title of the latter bank (2222) 141 Community National Bank, Liberty, N.Y. (10037), and Marine Midland National Bank of Southeastern New York, Poughkeepsie, N.Y. (465), which had merged October 9, 1964, under charter and title of the latter bank (465) 142 Tennessee Bank & Trust Co., Houston, Tex., and Houston National Bank, Houston, Tex. (9353), which had merged October 16, 1964, under charter and title of the latter bank (9353) 144 60 The Citizens National Bank of Poland, Poland, N.Y. (9804), and the Oneida National Bank & Trust Co. of Central New York, Utica, N.Y. (1392), which had merged October 16,1964, under charter and title of the latter bank (1392) Marshall County Bank, Moundsville, W. Va., and First National Bank at Moundsville, Moundsville, W. Va. (14142), which had merged October 17, 1964, under charter and title of the latter bank (14142) First Security Bank of Twin Falls, Twin Falls, Idaho, and First Security Bank of Idaho, National Association, Boise, Idaho (14444), which had merged October 23, 1964, under charter and title of the latter bank (14444) The Bank of Appomattox, Appomattox, Va., and the Fidelity National Bank, Lynchburg, Va. (1522), which had merged October 24, 1964, under charter and title of the latter bank (1522) The Christiana National Bank, Christiana, Pa. (7078), and Lancaster County Farmers National Bank, Lancaster, Pa. (683), which had merged October 27, 1964, under charter and title of the latter bank (683). Calhoun State Bank, Homer, Mich., and City Bank & Trust Co., National Association, Jackson, Mich. (15367), which had consolidated November 5, 1964, under charter and title of the latter bank (15367) The Cargill Trust Co., Putnam, Conn., and Hartford National Bank & Trust Co., Hartford, Conn. (1338), which had merged November 10, 1964, under charter and title of the latter bank (1338) The Guilford Trust Co., Guilford, Conn., and the Second National Bank of New Haven, New Haven, Conn. (227), which had merged November 16, 1964, under charter and title of the latter bank (227) Citizens State Bank, Aliquippa, Pa., and Western Pennsylvania National Bank, McKeesport, Pa. (2222), which had merged November 21, 1964, under the charter and title of the latter bank (2222) The National Bank of Lake Ronkonkoma, Lake Ronkonkoma, N.Y. (13130), and the Peoples National Bank of Long Island, Patchogue, N.Y. (12788), which had merged December 4, 1964, under the charter and title of the latter bank (12788) Hightstown Trust Co., East Windsor Township, N.J., and First Trenton National Bank, Trenton, N.J. (1327), which had merged December 11, 1964, under the charter and title of the latter bank (1327) The First National Bank of Barnesboro, Barnesboro, Pa. (5818), was purchased December 12, 1964, by the First National Bank of Ebensburg, Ebensburg, Pa. (5084) First National Bank & Trust Co. of Hanover, Hanover, Pa. (187), and National Bank & Trust Co. of Central Pennsylvania, York, Pa. (694), which had merged December 14, 1964, under charter and title of the latter bank (694) < ; The Citizens National Bank of Covington, Covington, Va. (5326), and the First National Exchange Bank of Virginia, Roanoke, Va. (2737), which had merged December 15,1964, under the charter and title of the latter bank (2737) 146 147 148 150 151 152 154 155 156 158 159 159 161 162 The Farmers National Bank of Bloomsburg, Bloomsburg, Pa. (4543), and Miners National Bank of WilkesBarre, Wilkes-Barre, Pa. (13852), which had merged December 16, 1964, under charter and title of the latter bank (13852) The Pattison National Bank of Elkland, Elkland, Pa,. (5043), the First National Bank of Knoxville, Knoxville, Pa. (9978), and the Farmers' National Bank of Liberty, Liberty, Pa. (11127), were purchased December 16, 1964, by the First National Bank of Wellsborough, Wellsboro, Pa. (328). The Garden State National Bank of Teaneck, Teaneck, N.J. (12402), and National Community Bank of Rutherford, Rutherford, N.J. (5005), which had merged December 18, 1964, under the charter and title of the latter bank (5005) , The First National Bank in Gadsden, Gadsen, Ala. (13728), and State National Bank of Alabama, Decatur, Ala. (14414), which had merged December 19, 1964, under charter and title of the latter bank (14414)... 163 164 The Scioto Bank, Commercial Point, Ohio, and the First National Bank of Circleville, Circleville, Ohio (118), which had merged December 29, 1964, under the charter and title of the latter bank (118) The Commercial National Bank of Spartanburg, Spartanburg, S.C. (14211), and the First National Bank of South Carolina of Columbia, Columbia, S.C. (13720), which had merged December 31, 1964, under charter of The First National Bank of South Carolina of Columbia (13720), and under title "The First Commercial National Bank of South Carolina" The Windsor County National Bank of Windsor, Windsor, Vt. (13685), and Vermont National & Savings Bank, Brattleboro, Brattleboro, Vt. (1430), which had merged December 31, 1964, under charter of the latter bank (1430) and title "Vermont National Bank" Page 169 170 61 THE CITY NATIONAL BANK & TRUST CO. OF COLUMBUS, COLUMBUS, OHIO, AND THE CITIZENS BANK, WESTERVILLE, OHIO Banking offices Total assets Name of bank and type of transaction In operation The Citizens Bank, Westerville, Ohio, with and the City National Bank & Trust Co. of Columbus, Columbus, Ohio (7621), which had merged Jan. 2,1964, under the charter and title of the latter bank (7621) The merged bank at the date of merger had COMPTROLLER'S DECISION On October 8,1963, the City National Bank & Trust Co. of Columbus, Columbus, Ohio, and the Citizens Bank, Westerville, Ohio, applied to the Comptroller of the Currency for permission to merge under the charter and with the title of the former. Columbus, the third largest city in Ohio, is situated in the center of the State. The 470,000 residents are supported by a highly industrialized economy consisting of 800 diversified manufacturing plants, 6,500 retail outlets and 950 wholesale businesses. Additional support is provided by Ohio State University, by a U.S. Army depot and by the nearby Lockbourne Air Force Base. Both the economy and the population have been expanding considerably during the past decade. Six commercial banks do business within the framework of the expanding Columbus economy. These 6 banks operate 56 offices in the metropolitan area. Three of them—Ohio National Bank, the Ohio State Bank, and Worthington Savings Bank—are subsidiaries of Bane Ohio Corp., a registered bank holding company. The Huntington National Bank and the Brunson Bank & Trust Co. complete the banking structure. The financial needs of the area are also served by 56 offices of 21 building and loan associations which range in size from $2 million to $80 million, by 115 credit unions, 73 sales finance companies and numerous other lending institutions. Westerville is situated in the north of Franklin County about 12 miles from downtown Columbus. It comprises a part of the northern Columbus metropolitan area and it has experienced an increase in population from 4,100 to 7,000 during the last census period. The primary force in the economy of Westerville is 62 To be operated $9,134,215 2 217,261,957 10 224, 995, 629 12 Otterbein College which, has an enrollment of 1,200 students. Although the Citizens Bank is the only bank with its headquarters in Westerville, it receives formidable competition from five offices of Bane Ohio Corp. subsidiaries and from a branch of the Huntington National Bank, all of which are within 4 miles of Citizens Bank. The nearest office of City National is its Worthington branch which is about 7 miles southwest. Its other eight branches range from approximately 8 to 19 miles south, southeast, and southwest of Westerville. Approval of this merger will enable the resulting bank to compete more effectively with the much larger area banks. The expected increase in competition in the banking community will be of substantial benefit to the residents of Westerville. Applying the statutory criteria to the proposed merger, we conclude that it is in the public interest and it is therefore approved. DECEMBER 6, 1963. SUMMARY OF REPORT BY ATTORNEY GENERAL The area of Franklin County, Ohio, which encompasses greater Columbus is characterized by an extremely high degree of concentration in commercial banking. Three banking institutions, one of which is the acquiring bank, control over 97 percent of all deposits and loans in the Franklin County area, the remaining share is divided among five small banks among which Citizens Bank is one of the largest. Citizens Bank has not shown that it is unable to continue to serve the banking needs of Westerville and Gahanna. For the above reasons, it is believed that the effect of the proposed merger on competition will be adverse. TRADERS BANK & TRUST CO., HAZLETON, PA., AND NORTHEASTERN PENNSYLVANIA NATIONAL BANK & TRUST Co., SCRANTON, PA. Banking offices Name of bank and type of transaction Total assets Traders Bank & Trust Co., Hazleton, Pa., with and Northeastern Pennsylvania National Bank & Trust Co., Scranton, Pa. (77), which had merged Jan. 3, 1964, under charter of the latter bank (77) and under title of "Northeastern Pennsylvania National Bank & Trust Go." The merged bank at the date of merger had COMPTROLLER'S DECISION On October 8, 1963, the $172 million Northeastern Pennsylvania National Bank & Trust Co., Scranton, Pa., and the $14 million Traders Bank & Trust Co., Hazleton, Pa., applied to the Comptroller of the Currency for permission to merge under the charter of the former and with the title "Northeastern Pennsylvania National Bank & Trust Co." Scranton, the seat of Lackawanna County, is the head office city of Northeastern Pennsylvania National. Its current population of 111,000 is down from 126,000 in 1950. Lackawanna County, whose declining population is now 234,531, is situated in the northeastern section of the State in what was at one time the major anthracite coal mining area in this country. Coal mining has, however, declined in importance over the past 30 years. Between 1950 and 1961, employment in anthracite mining in Lackawanna and Luzerne Counties declined 83 percent while the total population of this area declined about 10 percent. Unemployment has been averaging about 12 percent and the entire region has been classified as a distressed area. The population of the three major centers in this region, Hazleton, Scranton, and Wilkes-Barre, declined between 1950 and 1960. Hazleton, the home office city of the single office Traders Bank, is located about 45 miles south of Scranton. With a population of 32,000, it is the second largest city in Luzerne County. The economy of this area, like that of Scranton, has suffered from the declining importance of mining and processing of anthracite coal. However, considerable effort has been made in recent years to attract new industries to the region. At present, plants producing textiles, clothing, furniture, electrical components, heating and air-conditioning equipment, food stuffs, and fabricated metal products are operating in this region. Nevertheless, it is still classified as a distressed area. In operation To be operated $14, 827, 694 1 178,100,427 8 192,928,121 9 Besides its main office, Northeastern operates seven branches in Lackawanna, Luzerne, and Monroe Counties. This area is also served by 72 other banking offices whose total deposits and loans aggregate $564.5 million and $344.4 million, respectively. In addition, 25 savings and loan associations with aggregate resources in excess of $160 million compete vigorously for thrift funds and mortgage loans. Further, the major banks from New York and Philadelphia vigorously compete for deposit and loan business in Northeastern's trade area. Northeastern presently holds but 19 percent of the area's bank deposits and 21 percent of the loans. After the merger Northeastern will increase its share of deposits and loans by 2 percent. At present there appears to be no discernible competition existing between Northeastern and Traders except in Hazleton where the Traders bank has its sole banking office and Northeastern has two branches. In Hazleton, however, there are three other banks ranging in deposits from the $30 million Hazleton National to the $15.9 million Peoples Savings Bank, thus the elimination of existing competition there should not be significantly adverse. With this exception, none of the other Northeastern banking offices are nearer than 29 miles to Traders whose service area includes 13 other banks operating 19 offices. Northeastern's Hazleton branches have felt the lack of local stockholder support which has been a major factor preventing them from attaining projected growth. Traders, whose present officers are advanced in age, has been unable to provide successor management. The problems of these banks should be eliminated by this merger as Traders has many local stockholders and Northeastern has management depth coupled with an aggressive Trust Department so necessary in commercial banking today. On balance, in the light of the statutory criteria, we find this proposal to be in the public interest and the application is therefore approved. DECEMBER 23, 1963. 63 SUMMARY OF REPORT BY ATTORNEY GENERAL The Applicant Bank, with headquarters in the city of Scranton, has merged four times in the last 8 years and presently operates eight banking offices in a threecounty service area. With total assets of $ 172,804,000, total deposits of $150,346,000 and net loans and discounts of $92,282,000, this bank is, with 19 percent of the "IPC" deposits and 21.12 percent of the total loans, the largest bank by far in its tricounty service area. The Applicant Bank also has banking offices in the city of Hazleton, wherein the Merging Bank is situated. The latter has total assets of $13,542,000, total deposits of $12,344,000 and net loans and discounts of $8,407,000. The instant merger, although not significantly adversely affecting competition in the Applicant Bank's other service areas, would have significant unfavorable competitive consequences in the city of Hazleton. It would add to the competitive difficulties of the remaining local institutions and eliminate the substantial competition presently existing between the Hazleton banking offices of the participating banks. Thus, it is the view of the Department of Justice that the instant merger would have significant adverse competitive effects in the city of Hazleton. THE FIRST NATIONAL BANK OF WILKES-BARRE, WILKES-BARRE, PA., AND WHITE HAVEN SAVINGS BANK, WHITE HAVEN, PA. Banking offices Name of bank and type of transaction Total assets In operation White Haven Savings Bank, White Haven, Pa., with was purchased Jan. 3, 1964, by the First National Bank of Wilkes-Barre, Wilkes-Barre, Pa. (30), which had After the purchase was effected, the receiving bank had COMPTROLLER'S DECISION On October 16, 1963, the $81.7 million First National Bank of Wilkes-Barre, Wilkes-Barre, Pa., applied to the Comptroller of the Currency for permission to purchase the assets and assume the liabilities of the $2.9 million White Haven Savings Bank, White Haven, Pa. Wilkes-Barre is a city of 64,000 located approximately 120 miles northwest of Philadelphia and about 18 miles southwest of Scranton, in Luzerne County. With the decline in recent years of anthracite mining, once the principal industry in the area, the population of Wilkes-Barre diminished steadily while at the same time the unemployment rolls continued to increase. By means of an heroic community effort, the unemployment trend has been slowed, if not halted, and the economic outlook for the area is more favorable than at anytime within the past 20 years. White Haven, population 1,778, lies approximately 18 miles southeast of Wilkes-Barre. Its economy is dependent mainly upon small manufacturing plants which tend to stabilize employment. It is also the southern gateway to the Pocono Mountains where residential and resort areas are developing rapidly. 64 To be operated %2, 920, 000 1 81,722,000 84, 225, 500 6 1 The completion of U.S. Highway 80, now under construction, which will have a major interchange at White Haven to connect with Pocono Highway 940 and the Northeast Extension of the Pennsylvania Turnpike, will undoubtedly be a stimulus to the economy. The $12 million School for the Mentally Retarded, to be located in White Haven, is expected to accommodate 1,280 patients and have a staff of 500 to 600. Thus, White Haven's prospects for population and economic growth are decidely promising. First National operates six offices in Luzerne County and ranks second among thefivebanks headquartered in Wilkes-Barre. It assumes third place when consideration is given to the total resources of Northeastern Pennsylvania National, which has a branch in WilkesBarre. The 15.1 percent of loans and 14.9 percent of deposits presently held by the purchasing bank will be increased by the purchase to 15.8 percent and 15.5 percent, respectively. First National will still occupy second place among Wilkes-Barre banks. The selling bank operates no branches, does not exercise trust powers, and is the only bank in White Haven, which it will continue to serve as a branch of First National. There has been virtually no competition between the applicants and it would appear that no competing banks will be adversely affected by this proposal Approval of the purchase will give residents of White Haven access to a well-staffed trust department. They will also benefit from automated banking and other services not presently available. Consummation of the transaction will solve a management succession problem and serve as an instrument of expansion in an area giving every sign of great economic growth potential. Applying the applicable statutory criteria, we conclude that the proposal is in the public interest and the application is therefore approved. DECEMBER 19, 1963. SUMMARY OF REPORT BY ATTORNEY GENERAL The proposed acquisition would not appear to eliminate any significant direct competition between the participating banks. The service area of First National has been characterized by mergers in recent years and the three leading banks together control over 60 percent of deposits and loans. This proposal would continue that trend toward concentration and would add to the position of dominance possessed by First National. The proposal would also tend to create an imbalance among the remaining banks in the service area of White Haven by virtue of the entry of First National by acquisition. To this extent the probable impact of the proposal would be adverse but not significantly so. THE NATIONAL BANK OF COMMERCE OF HOUSTON, HOUSTON, TEX., AND TEXAS NATIONAL BANK OF HOUSTON, HOUSTON, TEX. Banking offices Name of bank and type of transaction Total assets Texas National Bank of Houston, Houston, Tex. (10152), with and the National Bank of Commerce of Houston, Houston, Tex. (10225), which had consolidated Jan. 17, 1964, under charter of the latter bank (10225) and under title "Texas National Bank of Commerce of Houston." The consolidated bank at the date of consolidation had COMPTROLLER S DECISION On September 9, 1963, the $519.9 million National Bank of Commerce of Houston, Houston, Tex., and the $340.7 million Texas National Bank of Houston, Houston, Tex^ applied to the Comptroller of the Currency for permission to consolidate under the charter of the former and with the title "Texas National Bank of Commerce of Houston." Houston, whose 1963 estimated population of over 1 million represents increases of 70.3 percent over 1950 and 57.4 percent over 1960, is the sixth largest city in the United States and is the largest in the southwestern States of Texas, Oklahoma, New Mexico, and Arizona. Its standard metropolitan area is defined as Harris County, an area of 1,730 square miles with a population of 1.3 million. Houston is the center of what is known as the Upper Texas Gulf Coast area, which consists of 11 counties whose 1960 population was almost 2 million. This trade area runs approximately 21 miles north, 57 miles south, 100 miles east, and 86 miles west of Houston. In operation To be operated $322, 646, 899 1 503, 743, 098 1 826, 389, 997 1 Since 1950, the Upper Texas Gulf Coast area has nearly doubled its population, and has undergone a significant change in its economy which 10 years ago was primarily agricultural. Today, this region boasts the largest concentration of oil, gas and petrochemical refining, processing and manufacturing plants in the world, and is one of the fastest growing industrial areas of the Nation. It is served by six deep water ports which are connected by the Inter-Coastal Waterways. The largest of the six is the port of Houston, connected to the Gulf by a 50-mile ship channel. In 1950 the Port of Houston moved 41.9 million net tons; in 1962 that figure reached 57.8 million, thus making the Port the third largest in the country in terms of tonnage moved. Three hundred national firms have offices or outlets in downtown Houston, and within the city's corporate limits are 115 firms which employ more than 300 people each. Twenty-five of them employ more than 1,000 persons. Along with its population boom, retail sales in the city have increased by 50 percent to 65 a total of $1.5 billion in 1962. Adding to the already booming economy is the 2-year-old National Aeronautics and Space Administration's Manned Spacecraft Center, located 22 miles from Houston. Ten colleges in the area have a student enrollment of 23,669, the largest being the University of Houston, with 13,665 students. The banking needs of this burgeoning economy are presently served by 136 commercial banks, 14 of which are in downtown Houston, 46 in other sections of the city, 21 in Harris County and the remainder scattered throughout the trade area. These banks hold a total of $3 billion in deposits and $2 billion in loans. Of all the banks in the Upper Gulf Coast area the largest is the $881.3 million First City National Bank. The charter bank is second in size and the $498.3 million Bank of the Southwest, National Association is third. In fourth place is the consolidating bank. All the other banks in the trade area are much smaller. Approval of this application will not change the relative positions of the local banks, except that the consolidating bank, in fourth place, will disappear. The resulting bank will be an $850 million institution and will have 19 percent of the deposits and 21 percent of the loans in the area. It will thus remain behind the First City National Bank, with the exception of total loans held. In that area, the resulting bank will be first. During the past 10 years the banking structure of the area has undergone profound changes. Because of the stringent prohibitions against branch banking by commercial banks contained in the Texas statutes, the developing needs of area residents for adequate banking service has been met by an increase in newly chartered banks from 82 to 136. This 65.9 percent increase of banks currently accounts for 13 percent of total area deposits. Other nonbanking financial institutions compete with the Houston commercial banks to a considerable degree. Forty savings and loan associations have assets of $762 million, withdrawable shares of $642 million and loans of $652 million. These associations also operate 24 branches, an activity unfortunately and inequitably prohibited to commercial banks in Texas. Credit unions number 295 and have $129.7 million in assets. Also competing in the area are 198 life insurance companies and 122 sales finance companies. The large and increasing number of national firms in Houston require large amounts of capital which the consolidating banks are individually unable to supply because of their relatively low capacity and 66 lending limits. The result, has been undue reliance on larger banks in New York, Chicago, and other cities for larger credits. At present, the charter bank has a lending limit of $3.2 million while the consolidating bank has a lending limit of $2.4 million. The resulting bank will have a lending limit of $6 million, which includes a proposed increase in capital of the charter bank. A minimal degree of competition between the consolidating banks will be eliminated by this proposal. On accounts of more than $10,000, mutual customers had 104 checking accounts, 117 savings accounts, 14 time deposit accounts, and 40 loan accounts. It is preeminently clear that banks in every area must be allowed to expand by whatever routes the law permits—even the less efficient routes—if they are to fulfill their responsibility adequately to serve the public's interests and needs. If banking facilities in Houston and indeed in the other major metropolitan cities in Texas are to be adequate in meeting the growing financial needs of these communities and of the State, bank expansion is necessary. The Texas legislature has seen fit to proscribe one essential method of expansion for commercial banks, namely, branch banking, and thus only the merger route remains. The resulting bank will offer more effective competition to the larger First City National Bank. The effect on the smaller banks In the area will clearly not be adverse. Having weighed this proposal in light of the statutory criteria, it is found to be in the public interest and the application is approved. JANUARY 13, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL National Bank of Commerce is the second largest commercial bank in Houston and fourth largest in the State of Texas, with assets of $519,967,000, deposits of $476,417,000, loans of $200,776,000 and a substantial trust business. Texas National Bank is fourth largest in Houston and eighth in Texas, with assets of $340,739,000, deposits of $288,925,000, loans of $166,710,000, and substantial trust accounts. Each has its main and only office in Houston (under local law commercial banks are not permitted to establish branch offices) and each operates in the metropolitan Houston area, which is roughly coterminous with Harris County and is the largest single metropolitan area in the State. National Bank of Commerce accounts for 14.2 percent of the deposits of individuals, partnerships, and corporations in the area and 14 percent of loans. Texas National has 9.6 percent of deposits and 11.7 percent of total loans. After the consolidation the resulting bank, with 23 9 percent of deposits and 25.7 percent of loans, would be about the size of the largest bank in Houston, First City National Bank, 1.7 times the size of the third largest institution, Bank of the Southwest, N.A., and about 10 times the size of what would then be the fourth largest bank. Concentration of banking resources in the city's three largest banks would be increased from 53.2 percent of deposits and 52 percent of loans to 62.8 percent and 63.7 percent, respectively, and the number of the more substantial banks in the area would be reduced from four to three. We conclude that the proposed consolidation would eliminate a substantial volume of direct competition between the participating banks and result in a very significant increase in concentration of resources in a small number of the largest banks in the area. Accordingly, it is our opinion that the consolidation would have a serious adverse effect upon competition. THE BANK OF WORCESTER, WORCESTER, N.Y., AND THE NATIONAL COMMERCIAL BANK & TRUST CO., ALBANY, N.Y. Banking offices Name of bank and type of transaction Total assets The Bank of Worcester, Worcester, N.Y. with and National Commercial Bank & Trust Co., Albany,N.Y. (1301), which had . . merged Jan. 31, 1964, under the charter and title of the latter bank (1301). The merged bank at the date of merger had COMPTROLLER S DECISION On October 24, 1963, the $436 million National Commercial Bank & Trust Co., Albany, N.Y., and the $2.9 million Bank of Worcester, Worcester, N.Y., applied to the Comptroller of the Currency for permission to merge under the charter and title of the former. Albany, the State capital, has a population of 130,000 and serves a trade area of over 750,000 located within a radius of 50 miles. Many diversified industries provide employment and there has been increased employment in Federal and State Government service, education and research, and development functions. Worcester, N.Y., population approximately 1,100, is situated 60 miles southwest of Albany. The local economy is primarily agricultural with dairy farming playing the major role. It has shown little growth in recent years. The National Commercial Bank & Trust Co. was organized in 1825. It presently operates 35 branches throughout a large part of northeastern New York. It is the fifth largest commercial bank in New York State outside metropolitan New York City and the second largest in the service area. Its management is capable and well experienced and is supported by a large and competent staff. Over the years National Commercial has developed an agricultural department $2,928,713 460,275,112 463, 049, 981 In operation To be operated 36 37 staffed by specialists. They have been helpful to farmers both in a technical advisory capacity and in the development and analysis of their financial needs. The single office Bank of Worcester was organized under a State charter in 1884, and has participated in no mergers or consolidations. It is a small country bank which has enjoyed limited growth due to its geographic location and lack of aggressiveness. While the condition of the bank is good, it now faces a management problem stemming from the recent death of its vice president and cashier and from its inability to attract young new officers and directors to the bank. Active competition in the Albany service area is provided by seven commercial banks, one of which is the State Bank of Albany with total resources of $516 million. Very active competition for deposits and mortgages is also provided by seven mutual savings banks and seven savings and loan associations in the Albany area. The addition of the relatively minor amount of deposits from the merging bank to the figures of the charter bank will raise National Commercial's share of the commercial bank deposits in the Albany service area by only 0.3 percent. Principal competition in the Worcester area is between the merging bank and the $24.9 million Wilber National Bank, Oneonta, N.Y., through its branch located in Schenevus, N.Y., 5y2 miles from Worcester. 67 Because of the nature of the intervening topography? the relatively small size of the Worcester community, and the distances between offices, no significant competition between the participants exists. The nearest branches of the charter bank to the merging bank are Cobleskill, N.Y., 16 miles northeast and Cooperstown, N.Y., 16 miles northwest. There is no overlap in the trade area of Albany and Worcester and no competition will be eliminated by this merger. The merged bank will be in a position to offer broader services to the Worcester service area, among which will be a trust depatment and farm advisory services. Consummation of the proposal will solve the existing management problems of the merging bank. The overall effect on the banking structure in that area will be beneficial. In balancing the factors of this case in light of the statutory criteria, the application is found to be in the public interest and is hereby approved. JANUARY 17, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL National Commercial Bank, with 36 offices, $436,346,000 in total assets and $380,168,000 in total de- posits, proposes to acquire the Bank of Worcester, which has one office, located about 50 miles west of Albany, total assets of $2,910,000 and deposits of $2,576,000. The charter bank presently has three branches adjacent to the service area of the merging bank and within 18 miles of Worcester. National Commercial and its branches have $115,614 in deposits and $133,919 in loans from the Worcester area; the merging bank draws no business from the service areas of the charter bank's adjacent branches. The competition eliminated by the acquisition would therefore not be substantial. But the acquisition would eliminate the only existing independent competitor in the Worcester area and would serve to enhance the charter bank's present dominant position in the region generally. The proposed acquisition is one more of a series proposed or consummated in recent years in this region by large Albany banks, and indicates a pattern of activity which appears to threaten the existence of local banks in the region and to this extent may be adverse competitively. FARMERS & MERCHANTS NATIONAL BANK OF WILLIAMSBURG, WILLIAMSBURG, PA., AND THE FIRST NATIONAL BANK OF CLAYSBURG, CLAYSBURG, PA. Banking offices Name of bank and type of transaction Total assets To be operated operation The Farmers & Merchants National Bank of Williamsburg, Williamsburg, Pa. (9392), with and the First National Bank of Claysburg, Claysburg, Pa, (10232), which had. . merged Jan. 31, 1964, under charter of the latter bank (10232) and under title of "The Central Pennsylvania National Bank of Claysburg." The merged bank at the date of merger had COMPTROLLER'S DECISION On November 19, 1963, the $9.2 million First National Bank of Claysburg, Claysburg, Pa., and the $2 million Farmers & Merchants National Bank of Williamsburg, Pa., applied to the Comptroller of the Currency for permission to merge under the charter of the former and with the title "The Central Pennsylvania National Bank of Claysburg." The applicant banks are located in Blair County in central Pennsylvania. The only arable land in this rugged, hilly area lies in the southern portion of the county. Both Claysburg and Duncansville, where the charter bank has a branch, have populations of about 68 $2, 003, 046 9, 229, 370 11,232,417 1 2 3 1,400. Their combined trade area population totals about 15,000. While the area is now depressed, its economic development program has met with some success in the Duncansville area where industrial plants provide the chief source of employment. In addition, many residents of these communities work in Altoona, the principal city in the county. Williamsburg, partially isolated from the rest of the county by the rough terrain, is located about 15 miles east of Duncansville and 24 miles northeast of Claysburg. Basically a residential community with one small retail business district, its principal industries are a paper mill and an electric generating plant. The surrounding area adds 2,500 more people to the town's trading area. In the general area served by the charter bank and its branch are four offices of three other competing banks: the $10.5 million Holidaysburg Trust Co., the $31 million First National Bank of Altoona, and the $43.5 million Altoona Trust Co. The merging bank, the smallest in the county, has no branches. Its only direct competitor is a branch of the Holidaysburg Trust Co. in Williamsburg. Due to its location, the merging bank does not compete with the charter bank. Approval of the proposed merger will be of substantial benefit to the two banks and to the communities they serve. Considering the banks with which the charter and merging banks compete, the applicants rank next to last and last in both total loans and deposits. Although the resulting bank will still be the smallest of the four in the area, it will be in a better position to compete effectively with the other three larger banks, both through an increased legal lending limit and through the opportunity to offer trust facilities and other specialized services, to provide more efficient bank management, and to automate some of its operations. Approval of the application will in no way affect the competitive situation between the Claysburg and Duncansville communities and the Wil- liamsburg community since deposits and loans originating in each other's communities are negligible. Applying the statutory criteria to the proposed merger, we conclude that it is in the public interest and the application is therefore approved. JANUARY 20, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL There does not appear to be any significant amount of competition between these banks that would be eliminated by the proposed merger. It would, however, eliminate the last independent bank in the Resulting Bank's service area, an area characterized by a high degree of concentration and several recent mergers and acquisitions by the three leading banks therein. On the other hand, neither the charter nor merging bank has participated in any mergers or acquisitions. In addition, the merging bank faces the competition of a much larger bank in its service area. Furthermore, the charter bank is the smallest bank in its service area and its position therein would not be materially enhanced by this merger. It would thus appear that the effect of this merger on competition will not be substantially adverse. THE FIRST NATIONAL BANK OF LACONA, LACONA, N.Y., AND THE MERCHANTS NATIONAL BANK & TRUST CO. OF SYRACUSE, SYRACUSE, N.Y. Banking offices Total assets Name of bank and type of transaction In operation The First National Bank of Lacona, Lacona, N.Y. (10175), with and the Merchants National Bank & Trust Co. of Syracuse, Syracuse, N.Y. (1342), which had merged Jan. 31,1964, under the charter and title of the latter bank (1342). The merged bank at the date of merger had COMPTROLLER S DECISION On November 26:, 1963, the $127.7 million Merchants National Bank & Trust Co. of Syracuse, Syracuse, N.Y., and the $3.4 million First National Bank of Lacona, Lacona, N.Y., applied to the Comptroller of the Currency for permission to merge under the charter and with the title of the former. Syracuse, population 215,000, is the fourth largest city in New York and the seat of Onondaga County. Serving a trade area of about 1 million persons, the city is a major distribution point for central New York To be operated $3, 407, 107 1 129, 903, 495 14 133, 304,140 15 and a commercial center with about 400 diversified companies. Lacona, population 446, is located approximately 45 miles north of Syracuse. An adjoining village, Sandy Creek, has a population of about 7,000. The economy of the area is devoted principally to dairy farming and, to some extent, poultry farming. Local industry is limited to a lumber company employing about 50 persons, but many residents of Lacona and the surrounding area are employed in Syracuse and two other nearby cities. 69 The charter bank, with 13 branches, is the fourth largest commercial bank in the Syracuse area. It has 16.94 percent and 18.57 percent, respectively, of deposits and loans in its service area. A large staff and aggressive management have developed an active commercial loan portfolio, large mortgage and consumer credit departments, and a large volume of trust business. The merging bank is the only bank in Lacona and maintains no branches. It has a relatively small volume of consumer loans and the balance of its loan portfolio consists of commercial loans. The bank's business is almost entirely derived from Lacona and a surrounding area of about 10 miles, which has a population of about 8,500. Although management has been aggressive within the limits of the bank's capabilities, the only fully experienced executive personnel—the chief executive and his principal assistant— plan to retire in the near future and a management succession problem is imminent. The proposed merger will have no adverse effect on competition. The two banks serve areas which do not overlap, as the nearest office of the charter bank is 37 miles from the office of the merging bank. The charter bank's competitive position in the Syracuse area will not be appreciably enhanced due to its small size. There will be no adverse competitive effects in the Lacona area because there is no indication that the three branches of other large banks located in the area and the main office of a small bank located 16 miles from Lacona will be unable to compete effectively with the resulting bank. On the contrary, the merger portends healthy competition in the merging bank's trade area by introducing the services of another large and aggressive institution, able and willing to supply all banking functions. By providing broader banking services to the Lacona service area, the merger will serve the needs and convenience of the banking public. The charter bank's management is experienced in all phases of branch operations and will especially serve the Lacona public by its familiarity with agricultural financing. Applying the statutory criteria to the proposal, we conclude that it is in the public interest and the application is therefore approved. JANUARY 24, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL Merchants National is the smallest of four banks located in Syracuse, N.Y., and would remain so following the proposed merger. It would then possess 17.75 percent of the deposits and 19.44 percent of the loans held by all such banks. The head offices t>f the merging banks are located approximately 45 miles apart and it would appear that little, if any, direct competition would be eliminated by their merger. The only other bank competing in First National's service area is a branch of a Syracuse bank which is larger than the two merging banks combined and would not appear to be adversely affected by the merger. It is our conclusion that the proposed merger would not adversely affect banking competition in any of the service areas involved. WESTERN PENNSYLVANIA NATIONAL BANK, MCKEESPORT, PA., AND BEAVER COUNTY TRUST CO., NEW BRIGHTON, PA. Banking offices Name of bank and type of transaction Total assets To be operated In operation Beaver County Trust Co., New Brighton, Pa., with and the Western Pennsylvania National Bank, McKeesport, Pa. (2222), which had consolidated Feb. 7,1964, under charter and title of the latter bank (2222). The consolidated bank at the date of consolidation had COMPTROLLER'S DECISION On November 26, 1963, the $556.7 million Western Pennsylvania National Bank, McKeesport, Pa., and the $8.6 million Beaver County Trust Co., New Brigh70 $8, 205,160 1 542, 121, 391 43 548, 912, 688 44 ton, Pa., applied to the Comptroller of the Currency for permission to consolidate under the charter and title of the former. McKeesport, a city of 46,000, is situated 11 miles southeast of Pittsburgh in Allegheny County and is considered part of the Pittsburgh standard metropolitan area, a highly industrialized region with the principal industries being iron, steel, and related lines. New Brighton, a community of 8,397, is located 47 miles northwest of McKeesport and 30 miles west of Pittsburgh in Beaver County. It is in the heart of the industrial Beaver Valley whose economy is mainly dependent upon steel and related industries. Located in New Brighton and directly across the Allegheny River, in Beaver Falls, are 18 manufacturing corporations employing 5,600 workers. The Western Pennsylvania National Bank, although headquartered in McKeesport, is considered a Pittsburgh bank as its service area includes all of Allegheny County, whose population is 1,665,000. It ranks third in size in the Pittsburgh metropolitan area, behind Mellon National and Pittsburgh National. The consolidation will have little competitive effect in Allegheny County where Western Pennsylvania's share of county deposits will be increased less than 1 percent. Since Western Pennsylvania's nearest branch office is 12 miles from New Brighton and outside the merging bank's trade area, the consolidation will not eliminate any significant competition now existing between them. As there are nine other banks in the New Brighton service area, including branch offices of the large Pittsburgh banks, competition will not be significantly affected by this consolidation. Both Mellon National and the Union National Bank of Pittsburgh operate branch offices within 1.5 miles of the Beaver County Trust Co. The public interest will be served by a local banking unit of Western Pennsylvania which will be able to furnish the New Brighton banking public with aggressively competitive management. The resulting local banking unit in New Brighton will have a greatly enlarged lending capacity, thereby increasing its utility to the business community. In addition, a serious management succession problem will be solved. Considered in light of the statutory criteria, we find the application to be in the public interest and the consolidation is therefore approved. JANUARY 24, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL Commercial banking in the Pittsburgh (Allegheny County) area, the primary service area of the Western Pennsylvania National Bank, is highly concentrated, to a large extent as the result of past acquisitions and mergers by the leading banks therein. Western itself is the third largest bank serving the Pittsburgh area and has, since 1953, acquired 19 small- and mediumsized banks, most of them in Allegheny County. Approval of the instant consolidation would further an existing tendency toward monopoly and might adversely affect potential competition, even though it would not eliminate any substantial presently existing competition between Western and Beaver Trust. As a result of this transaction, the small local banks operating in the service area of Beaver Trust will face the competition of another giant bank in addition to the branches of Pittsburgh's largest and fourth largest banks already there—Mellon National Bank & Trust Co. and the Union National Bank of Pittsburgh. This situation may impose on these small banks a handicap similar to that alleged in the application as being one of the reasons for Beaver Trust's interest in consolidating with Western. In all respects, therefore, the effect of this proposed consolidation upon competition must be deemed to be adverse. THE SEABOARD CITIZENS NATIONAL BANK OF NORFOLK, NORFOLK, VA., AND THE FARMERS BANK OF HOLLAND, INC., HOLLAND, VA. Banking offices Name of bank and type of transaction Tote / assets In operation Farmers Bank of Holland, Inc., Holland, Va., with and Seaboard Citizens National Bank, Norfolk, Va. (10194), which had. . . . merged Feb. 12, 1964, under the charter and title of the latter bank (10194). . The merged bank at the date of merger had COMPTROLLER S DECISION On November 27, 1963, the $90 million Seaboard Citizens National Bank of Norfolk, Norfolk, Va., and $2 ,876, 157 103 ,615, 510 106 ,102, 722 To be operated 1 9 10 the $2.5 million Farmers Bank of Holland, Inc., Holland, Va., applied to the Comptroller of the Currency for permission to merge under the charter and title of the former. 71 Norfolk's major source of employment comes from the Navy which contributed more than $430 million in payrolls during 1961. The area is also one of the State's leading industrial centers with more than 330 manufacturing establishments in the area. The value of products manufactured in 1960 was $468 million with capital expenditures in excess of $7 million. Retail sales amounted to $563 million in 1960 from over 4,000 establishments. Nansemond County, service area of the merging bank, is on the outer extremity of the Norfolk metropolitan area and has a combined economic base of industry and agriculture. In 1958, there were 34 manufacturing, 17 wholesale and 6,361 retail establishments in the county. The agricultural portion of the economy is predominantly devoted to the production of peanuts, while other farming operations include the raising of corn, soy beans, hogs, and beef cattle. Situated only 29 miles southwest of Norfolk, with many of its residents employed in industrial plants there, Holland shares in the general economic growth of the Norfolk area. The Seaboard Citizens National Bank is the seventh largest in the State and the second largest in the Norfolk area. It is far smaller than the $343 million Virginia National Bank which operates a branch in Suffolk only 11 miles from the merging bank. The merger of the Farmers Bank of Holland into Seaboard Citizens will not change the relevant standings of banks in the area, nor will it have any significant effect on the competitive climate. There will still be 10 banking offices within an 11-mile radius of Holland. There is no direct competition between the merging and merged banks and the addition of the Farmer's Bank assets will add only 0.3 percent to Seaboard's proportionate holdings of I PC deposits and loans. The proposal will offer to citizens of the Holland area the full services of a commercial bank, something which the merging bank was not able to do. It will offer increased lending limits to industry in the area, which up to now had to go outside of the community for their larger loans. It will also relieve a serious management deficiency problem by adding the depth and quality of the Seaboard management to the personnel now present in the Farmers Bank. In general, the merged bank will give to the citizens of Holland a sound, competitive, complete alternate banking facility. Applying the statutory criteria to the proposed merger we conclude it is in the public interest, and the application is therefore approved. JANUARY 24, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL The Seaboard Citizens National Bank of Norfolk had total assets of $105,611,000 as of October 31,1963. The Farmers Bank of Holland, Inc., is located in Holland, a town 29 miles southwest of Norfolk. As of October 13, 1963, it had total assets of $2,532,000. Each of the eight banks operating in the service area of Farmers Bank were independent banks in December of 1962. Should this application be approved and the pending application of Virginia National Bank to merge Tidewater Bank & Trust Co. be approved, only three of these eight banks will remain independent, the other five having either been merged by a much larger bank or absorbed by a bank holding company. These three remaining independent banks, already operating at a competitive disadvantage with the existing larger banks in the service area, will be faced with competition from still another much larger bank. It is our view that the effect of the proposed merger on competition, standing alone, would not have a significant adverse effect. However, it is part of a trend that threatens the existence of smaller banks in Virginia and in the Suffolk area in particular. HARRISBURG NATIONAL BANK & TRUST C O . , HARRISBURG, P A . , AND THE FIRST NATIONAL BANK OF N E W BLOOMFIELD, N E W BLOOMFIELD, P A . Banking offices Name of bank and type of transaction Total assets In operation The First National Bank of New Bloomfield, New Bloomfield, Pa. (5133), with. . . and the Harrisburg National Bank & Trust Co., Harrisburg, Pa. (580), which had.. merged Feb. 14, 1964, under the charter and title of the latter (580). The merged bank at the date of merger had 72 $4, 847, 238 117,908,599 122, 755, 833 To be operated 1 9 10 COMPTROLLERS DECISION On December 2, 1963, the $126 million Harrisburg National Bank & Trust Co., Harrisburg, Pa., and the $4.6 million First National Bank of New Bioomneld, New Bloomfield, Pa., applied to the Comptroller of the Currency for permission to merge under the charter and title of the former. Harrisburg, a city of 79,697, is located in south central Pennsylvania on the Susquehanna River. As the State capital, it provides employment for numerous State employees, and due to the presence of three army depots and other Federal Government installations, for more than 38,000 Federal workers as well. While the Harrisburg population has declined since the 1950 census, the population of Dauphin County, of which Harrisburg is the county seat, has increased 11 percent. The county, as the center of a trading area of about 360,000 people, has substantial industrial activity, primarily in the iron and steel fabricating field, and a thriving commercial life. New Bloomfield, the county seat of Perry County, lies 29 miles northwest of Harrisburg and has a population of about 1,000., Although there is some light industrial activity, small- to medium-size dairy farming and related agricultural pursuits constitute the economic base of the area. As Perry County is within commuting distance of Harrisburg, many of the area's residents are employed there and in other surrounding communities. Because of the movement from Harrisburg to the suburbs, the county's population has increased slightly to 26,582. Strong competitive factors are present in the region served by the charter bank. Numerous nonbank finance institutions, such as insurance companies, credit unions and finance companies, operate in the trade area. In Harrisburg three banks, two approximately equal in size to the charter bank and one smaller, offer effective competition. Although all of the banks serving the trade area outside Harrisburg are small, each offers strong competition to the various branches of the charter bank, and of the two other large banks, located in Dauphin and surrounding counties. The merging bank, third largest of eight banks in Perry County, is a single-office bank. Little com- petition exists between it and the other banks in the New Bloomfield area. Local nonbank financial institutions offer services usually available from banks but not readily available at Perry County banks. The effect of the proposed merger on competition in the New Bloomfield area will be beneficial. The resulting bank will supply aggressive and enlightened banking by offering trust services, installment loans, wider mortgage financing and a greatly increased lending limit. While the resulting bank will be much larger than any of its competitors in Perry County, the history of the charter bank's operation indicates that its policies stimulate rather than suppress competition. The resulting bank, therefore, should emerge as the touchstone for intensified competition. A serious management problem exists in the merging bank since the death of its former president. This merger will solve the problem. Applying the statutory criteria to the proposed merger we conclude that it is in the public interest and it is, therefore, approved. FEBRUARY 12, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL The Harrisburg National Bank & Trust Co., which had deposits of $108,955,000 as of September 30,1963, has merged eight banks since 1952. These eight banks had deposits of $72,857,665 at the time they were merged, which deposits equal about 70 percent of the present deposits of Harrisburg National. The First National Bank of New Bloomfield with deposits of $4,135,000 presently competes with seven banks, two of which are about the same size as First National of New Bloomfield and the rest smaller. Should this proposed merger be approved, these banks will be at a competitive disadvantage with a branch of Harrisburg National with a lending limit of $1 million, fiduciary powers and modern accounting equipment. These small banks will undoubtedly seek similar mergers to overcome their competitive handicap and thus foster the disappearance of additional independent banks. It is our view that the effect of this proposed merger on competition will be adverse. 73 THE DANVERS NATIONAL BANK, DANVERS, MASS., AND THE SECURITY TRUST CO., LYNN, MASS. Banking offices Name of bank and type of transaction Total assets Security Trust Co., Lynn, Mass., with and the Danvers National Bank, Danvers, Mass. (7452), which had consolidated Feb. 21, 1964, under charter of the latter bank (7452) and under title of "Security-Danvers National Bank." The consolidated bank at the date of consolidation had COMPTROLLER'S DECISION On November 21, 1963, the $9.9 million Danvers National Bank, Danvers, Mass., and the $30.9 million Security Trust Co., Lynn, Mass., applied to the Comptroller of the Currency for permission to consolidate under the charter of the former and with the title, "The Security-Danvers National Bank." The applicant banks are located in southern Essex County, an area north of Boston bordering the Atlantic Ocean. The economy and transportation facilities of the area are integrated with metropolitan Boston. Danvers, a town of about 22,000, is located about 17 miles north of Boston and 6 miles north of Lynn. While basically residential, it has a great deal of industrial activity and has been rapidly expanding both in population and industrial activity over the past 10 years. Lynn, with a population of about 94,000, is located 11 miles north of Boston. Once the leading shoe manufacturing center in the United States, it is now a diversified industrial center. In 1961 its 2,030 firms, predominantly manufacturing in nature, had an annual payroll of $200.6 million and employed 38,465 persons. While there has been a substantial residential movement to the suburbs and a concurrent commercial and industry migration, the urban redevelopment plan and the efforts to attract new industry to Lynn forecast an upturn in the community's economy. Strong competitive factors exist in the communities served by the charter and consolidating banks. Not only are 15 commercial banks located there, but also 10 savings banks, 5 cooperative banks, and a number of nonbanking finance offices have offices in the area. Other competition is offered by the large Boston banks which advertise extensively in the applicants' communities. In the Danvers area the potential market for loans exceeds the availability of the loanable funds of the charter bank, and this limitation handicaps the bank's 74 $29, 783., 695 9, 477, 099 In operation To be operated 3 4 39, 260, 794 7 efforts to serve its area fully. The charter bank also lacks trust powers. In Lynn, however, growth has slowed so as to compel the consolidating bank to find new outlets for its funds. At the same time, the bank's efforts to expand its facilities and services by branching outside of Lynn into areas where growth potential exists have been unsuccessful. Consolidation will result in a broader based, better balanced institution that will more effectively serve the convenience and needs of the communities. Each bank can supply what the other lacks, the consolidating bank supplying the sorely needed additional funds and trust service, and the charter bank the area of growth potential. Since the consolidation will provide additional resources and lending capacity, the resulting bank will be in a position to compete more effectively in its area with the other banks located there, and particularly with the larger Boston banks. The negligible competition and the slight overlap of activities between the two banks insure that the competitive structure of southern Essex County will remain unchanged. The consolidation will neither eliminate existing competition nor deprive the communities of a banking alternative, but will instead maintain the local character of the resulting bank's facilities. Applying the statutory criteria to the proposed consolidation, we conclude that it is in the public interest and the application is therefore approved. JANUARY 24, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL Danvers National Bank, Danvers, Mass., with assets of $9,914,000, proposes to consolidate with Security Trust Co., Lynn, Mass., with assets of $30,912,000. Security's facilities have been confined to Lynn, and severe competition from Boston banks, 12 miles south, is presently being experienced in the area which is gradually becoming an integral part of the trade and population area of metropolitan Boston. On this account and from other facts given in support of the application, we conclude that the competitive factors involved in the acquisition of Security by the charter bank, which is located in an area where population and economic growth have been great and a substantial market for loans exists, would not be significantly adverse. THE UNION NATIONAL BANK OF PITTSBURGH, PITTSBURGH, PA., AND COMMONWEALTH BANK & TRUST CO., PITTSBURGH, PA. Banking offices Name of bank and type of transaction Total assets In operation Commonwealth Bank & Trust Co., Pittsburgh, Pa., with and the Union National Bank of Pittsburgh, Pittsburgh, Pa. (705), which had consolidated Feb. 28, 1964, under charter and title of the latter (705). The consolidated bank at the date of consolidation had COMPTROLLER S DECISION On December 27, 1963, the $224.8 million Union National Bank of Pittsburgh, Pa., and the $163.6 million Commonwealth Bank & Trust Co., Pittsburgh, Pa., applied to the Comptroller of the Currency for permission to consolidate under the charter and title of the former. The applicant banks are headquartered in Pittsburgh, Allegheny County, and have offices in five adjoining counties. This industrial complex had a population of 2,600,000 in 1960, reflecting a relatively low growth of 9 percent since 1950. The Pittsburgh area has, for many years, been one of the most important centers of steel and heavy industry in the world and, in 1960, contributed over $2.9 billion to value added in manufacture, as compared to $2.7 billion in 1958. While the most important single industry in the six-county area is primary metals, or more specifically, iron and steel, fabricated metal products, nonelectrical and electrical machinery are also significant factors in the economy, along with food processing and stone, clay and glass products. Coal mining, too, has long been associated with the Pittsburgh area, which contains some of the world's richest coal deposits. Although total mining employment declined 60 percent between 1950 and 1960, the region, in 1961, mined 20 million tons of bituminous coal, amounting to one-third of the State's total production. The Union National Bank of Pittsburgh, which was founded in 1857 as the Diamond Savings Institution, became a National Bank on January 12, 1865, in the early years of the National Banking System. It remained a single-office institution until 1958, when an $164, 640, 486 12 222, 879, 859 18 387, 520, 345 To be operated 29 expansion program was initiated in order to better compete with the three larger area banks. Since 1958 Union National has acquired six banks: Allegheny Trust Co., Pittsburgh, a single-office bank with $9.4 million deposits and $5.6 million loans; First National Bank in Tarentum, $10.1 million deposits, $5.6 million loans and one branch; the Farmers National Bank of Beaver Falls, two branches, $16.2 million deposits and $7.6 million loans; the Coraopolis Trust Co. and its wholly owned subsidiary Coraopolis National Bank, $17.1 million deposits, $6 million loans and two main offices, one 'of which was discontinued; the Bridgeville National Bank, six branches, $22.4 million deposits and $13.7 loans; and the Imperial Bank, Imperial, with no branches, $3.6 million deposits and $1.3 million loans. The charter bank has thus acquired 15 branch offices, $78.8 million in deposits and $39.8 million in loans through various mergers and consolidations, all of which involved small banks with serious management succession problems. With the addition of 2 de novo branches, Union National presently has 17 branches, including 9 in Allegheny County, 3 in Beaver County, 4 in Washington County, and 1 in Westmoreland County. When its two approved but unopened branches are included, the charter bank will have 5 percent of the banking offices in the area. As of September 30, 1963, Union National had total deposits of $192.8 million and loans of $105.5 million, which are 3.96 and 4.88 percent, respectively, of the deposits and loans held by all commercial banks in the Pittsburgh six-county metropolitan area. Commonwealth Bank & Trust Co., which was chartered by the Commonwealth of Pennsylvania on April 25, 1902, has acquired two banks during the past 10 years: South Hills Trust Co., Pittsburgh, a single75 office institution with deposits of $4.3 million and loans of $1.1 million; and the Butler Savings & Trust Co., Butler, with three branches, $31.5 million in deposits and $16.1 million in loans. The bank presently operates 11 branches, of which six are in Allegheny County, four in Butler County and one in Armstrong County. It operates 3 per cent of all area banking offices. Its September 30, 1963, deposits totaled $150.3 million and its loans totaled $60.4 million, which represent 3.09 and 2.8 percent, respectively, of total deposits and loan of all area commercial banks. Both the charter bank, fourth largest in the area, and the consolidating bank, fifth largest, are offered strong competition by the three larger banking institutions. The $2.7 billion Mellon National Bank & Trust Co., Pittsburgh, is by far the largest bank in the area, being more than twice the size of any other commercial bank in the region. Its $2.3 billion deposits represent 48.11 percent of area deposits, and its $932.4 million in loans are 43.16 percent of area loans. Mellon National also operates 75 branches and has 9 branches approved but unopened, for a total of 25 percent of the 6-county area banking offices. The second ranking bank in the area is the $1.1 billion Pittsburgh National Bank, Pittsburgh, whose 59 branches and 14 approved but unopened branches total 21 percent of the area's banking offices. Pittsburgh National has 21.15 percent of area deposits, with $1 billion, and 21.6 percent of area loans, with $466 million. Western Pennsylvania National Bank, McKeesport, is the third largest bank in the area, with total resources of $502.3 million. With $464 million in deposits and $225.7 million in loans, it holds 9.53 and 10.45 percent, respectively, of total deposits and loans in the Pittsburgh complex. Western Pennsylvania has 15 percent of area banking offices, with 42 branches and 7 approved but unopened branches. There are 59 smaller commercial banks operating in the 6-county area which have a total of 51 operating and approved but unopened branches, for a total of 32 percent of area banking offices. Their aggregate deposits total $689.8 million, or 14.16 percent of area deposits, and their loans, $369.7 million, or 17.11 percent of area loans. Total resources of these 59 institutions is $773 million. Additional competition is offered by the $239 million Dollar Savings Bank, a mutual financial institution which holds $219 million in deposits and $137 million in loans. The Pittsburgh financial market also lists 165 savings and loan associations with total assets of $1.3 billion, and 372 credit unions with re76 sources of $94 million. Further competition for loans is offered by the major insurance companies and the more than 50 sales finance and personal loan companies. The resulting bank will be a $380.3 million institution with 7 percent of area deposits and 7.68 percent of area loans. It will have 31 branches, representing 8 percent of total banking offices. Approval of the application will not change its ranking as the fourth largest bank in the Pittsburgh area but will make it closer in size to Western Pennsylvania National Bank. It will remain considerably smaller than Mellon National and Pittsburgh National. The primary reason advanced in favor of approval of this consolidation is to enable the applicants to compete more effectively with the three much larger banks serving Pittsburgh and its environs. Retail banking services have assumed increased importance during recent years and a comprehensive branching system is necessary in order to adequately compete in this field. Mellon National, Pittsburgh National, and Western Pennsylvania, with 85, 74, and 50 approved offices, respectively, are considerably stronger than Union National's 20 approved offices or Commonwealth's 12. By consolidating, the resulting bank will have 32 offices, which will make it more competitive with the top three banks. The growing borrowing requirements of existing customers offer another example of the need for this consolidation. With lending limits of $1.75 million for Union National and $1.2 million for Commonwealth, both banks are at a competitive disadvantage in serving the needs of large borrowers. The application cites several instances of actual cases where valuable business has been lost in whole or in part to a larger bank in the area due to the lower lending limits of the consolidating bank. Pittsburgh's industrial and commercial enterprises are heavy users of debt capital and are also courted by the New York, Chicago, Cleveland, and Philadelphia banks. The resulting bank's lending limit of $3 million, while only one-tenth of Mellon National's $30 million and one-third of Pittsburgh National's $9 million, will at least bring it closer to the $3.8 million lending limit of Western Pennsylvania. Approval of the consolidation will also enable the resulting bank to install electronic data processing equipment to provide additional services to banking customers comparable with those already offered by the three larger area banks. And, although senior management at both banks is of high quality, the consolidation will permit more; depth and balance on the intermediate and junior levels. Because of the location of the main offices of the consolidating banks in downtown Pittsburgh, a minimal amount of competition presently existing between them will be eliminated. A review of deposits and loans of $5,000 or more revealed that the institution had but 157 common depositors and 7 common borrowers. It should also be pointed out that several of the common depositors are large corporations which carry primary accounts at one bank and small convenience accounts at the other, Another question which must be considered in evaluating this proposal is whether it will have a tendency toward monopoly. It is true that the four largest area banks presently hold more than 80 percent of area deposits. However, the bulk of this is in the Mellon bank, which holds more than 48 percent of deposits, while the consolidating banks hold only 3.96 and 3.09 percent for a total of 7.05 percent. Nevertheless, even if the four largest banks are used as a basis for determining concentration of banking resources, approval of the proposal will result in an increase in concentration of only 3.75 percent in deposits and 3.5 percent in loans. The consolidation will therefore have no tendency toward monopoly nor would it result in any undue increase of the market share of the resulting bank. The competitive effect of the proposal on the smaller commercial banks in the six-county area will be relatively unchanged. These banks, which are presently in competition with the applicants and the three larger area banks, will not be significantly affected. The competition of the resulting bank and its branches will not render the smaller banks any more or less competitive than they are at present. Approval of the proposal will enable the resulting bank to compete more effectively with its larger competitors and will, at the same time, permit it to offer expanded services to the banking public. The proposal evidences no tendency toward monopoly and, while a nominal amount of competition between the consolidating banks will be eliminated, there will be no adverse competitive effect on the smaller area banks. Having weighed the proposal in light of the statutory criteria, we find it to be in the public interest and it is therefore approved. FEBRUARY 28, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL. Union National is the fourth largest commercial bank in Pittsburgh with assets of $224,160,000, deposits of $199, 336,000, loans of $111,714,000, and 18 offices. Commonwealth Trust is fifth largest in the city with assets of $163,669,000, deposits of $147,389,000, loans of $61,122,000, and 12 banking offices. These 2 banks have acquired a total of 9 banks since 1954. Union National accounts for about 4 percent of deposits and 5 percent of loans in Allegheny County and five contiguous counties in which a Pittsburgh bank may establish branch offices under Pennsylvania law. Commonwealth Trust holds 3 percent of total deposits and loans in this area. Pittsburgh is one of the most highly concentrated major banking markets in the Nation. The top five banks account for 92 percent of deposits and 91 percents of loans in Allegheny County and for 86 percent of deposits and 83 percent of loans in the entire sixcounty area. The top two banks together, Mellon National Bank and Pittsburgh National Bank, account for from 65 to 75 percent of these totals. Much of this concentration is the result of a pronounced merger trend since 1950 which has seen the 6 largest banks absorb at least 65 banks, leaving but 64 banks in the 6county area. The justification for the proposed merger stems in large part from the competitive handicap of competing with the three largest banks in the area which have been permitted to obtain their dominant position in substantial part from permission to merge and consolidate with other banks and the opening of numerous denovo offices in the area served by them. It is obvious that competition cannot be maintained in this area as long as the dominant institutions are permitted to acquire or merge with other banks and obtain numerous de novo branches in the area. The proposed consolidation might strengthen the resulting bank's ability to compete with the three largest banks in the area. But it would at the same time eliminate a substantial amount of direct competition between the consolidating banks and add significantly to concentration in a market already highly concentrated, in part by a series of mergers in which the consolidating banks have participated. By the consolidation, one of just six banks in the area which could make loans in excess of $400,000 would be eliminated. We conclude that the proposed consolidation would have a serious adverse effect upon competition. 77 LINCOLN NATIONAL BANK & TRUST CO. OF CENTRAL NEW YORK, SYRACUSE, N.Y., AND FIRST NATIONAL BANK OF MINOA, MINOA, N.Y. Banking offices Name of bank and type of transaction Total assets In operation First National Bank of Minoa, Minoa, N.Y. (13476), with and Lincoln National Bank & Trust Co. of Central New York, Syracuse, N.Y. (13393), which had merged Feb. 28, 1964, under charter and title of the latter bank (13393). The merged bank at the date of merger had COMPTROLLER'S DECISION On December 6, 1963, the $160 million Lincoln National Bank & Trust Co. of Central New York, Syracuse, N.Y., and the $6.3 million First National Bank of Minoa, Minoa, N.Y., applied to the Comptroller of the Currency for permission to merge under the charter and with the title of the former. Syracuse, with a population of about 216,000, is the fourth largest city in New York and the focal point of a metropolitan area of about 423,000. Centrally located in the State, Syracuse is a distribution center served by three major airlines, two trunk line railroads, and two limited access superhighways which quadrisect the State. The economy of the Syracuse metropolitan area is widely diversified and holds promise for continued growth. Minoa, with a population of 1,800, is a residential community about 9 miles east of downtown Syracuse. It is in the Syracuse trade area and many of its residents commute to Syracuse for employment. The charter bank is a full-service institution, operating 7 branches in the Syracuse area and 6 in outlying communities. It is the third largest of 4 commercial banks in Syracuse. It also competes in this service area with 2 mutual savings banks, 4 savings and loan associations and 13 finance companies. The merging bank is the only bank in Minoa. Its nearest competitors are in Syracuse. This limited service bank will soon be faced with a management succession problem due to the impending retirement of its president. The inhabitants of Minoa will be the primary beneficiaries of the proposed merger. Not only will they 78 To be operated $6, 273, 433 1 156,033,619 14 162,211,424 15 be afforded trust services locally, but the resulting bank will introduce installment lending to the area. Moreover, along with offering improved banking services, locally, the merging bank will also find a solution to its management succession problem. Applying the statutory criteria to the proposed merger, we conclude that it is in the public interest and the application is therefore approved. FEBRUARY 17, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL Lincoln National is third in size among four commercial banks with head offices in Syracuse. It has $142 million in deposits or approximately 24 percent of the deposits held by banks competing within its service area. First National is a unit bank located in the Village of Minoa, 5 miles east of Syracuse. It has $5.7 million in deposits, or about 1 percent of deposits of banks competing in its service area. The service area of Lincoln National extends well beyond the city of Syracuse and includes almost all of the service area of First National. However, the amount of competition between the banks appears not to be significant due to the size and limited range of services of First National. The proposed merger will not significantly alter the banking structure in the relevant area. Lincoln National will increase its market share by only 1 percent and will continue to be the third largest bank in Syracuse. It is unlikely that adverse effects will be felt by smaller independent banks, the closest of which is 13 miles from First National. We therefore conclude that the proposed merger will have no substantial adverse effects upon competition. OLD NATIONAL BANK OF WASHINGTON, SPOKANE, WASH., AND THE FIRST NATIONAL BANK OF PULLMAN, PULLMAN, WASH. Banking offices Name of bank and type of transaction Total assets In operation The First National Bank of Pullman, Pullman, Wash. (4699), with and Old National Bank of Washington, Spokane, Wash. (4668), which had merged Feb. 28, 1964, under the charter and title of the latter bank (4668). The merged bank at the date of merger had COMPTROLLER S DECISION On December 11, 1963, the $186.7 million Old National Bank of Washington, Spokane, Wash., and the $14.5 million First National Bank of Pullman, Pullman, Wash., applied to the Comptroller of the Currency for permission to merge the charter and with the title of the former. Spokane, with a population of about 182,000, supported by agriculture, mining, lumbering, light manufacturing and trade facilities, is the second largest city in the State and the principal city in the so-called Inland Empire which comprises eastern Washington, northern Idaho, and western Montana. The Spokane area relies primarily on agricultural products and related industries for its economic support. The more important of these products are grains, sugar beets, hops, fruits, and row crops. The secondary economic factors of the area are lumbering, mining, and manufacturing, in that order but with the latter showing a much stronger percentage of increase in recent years. Pullman, located 80 miles south of Spokane, has a population in excess of 13,000, including approximately 8,000 seasonal residents enrolled at Washington State University. The university is rapidly expanding and has supplanted agriculture as the primary economic support of Pullman. Old National Bank, the seventh largest bank in Washington, is an affiliate of Old National Corp., a registered bank holding company. The bank maintains 28 branches throughout the eastern half of the State. Other statewide banks having branches in the trade area of the charter bank are the Seattle-First To be operated $15,342,275 2 176,873,976 27 191,719,372 29 National Bank, the largest in the State, with 101 branches and the National Bank of Commerce, the second largest with 67 branches. Approval of the proposed merger will be primarily beneficial to the merging bank and the community which it serves, by providing trust services, larger lending capacity, and the services of the charter bank's agricultural agent. The proposed merger will not affect the competitive banking picture in eastern Washington to any extent, nor eliminate any substantial competition between the charter and the merging banks, since the two banks do not directly compete at the present time. Though an independent bank will be eliminated, it will be replaced by a stronger banking facility better able to compete with the branch of Seattle-First National Bank. Applying the statutory criteria to the proposed merger, we conclude that it is in the public interest and the application is therefore approved. FEBRUARY 12, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL The proposed merger of the First National Bank of Pullman, Pullman, Wash., into the Old National Bank of Washington, Spokane, Wash., will not have a significant adverse effect upon competition. First Pullman has apparently not been successfully competing with a branch of Seattle-First National Bank located in Pullman, Wash. The proposed transaction will provide a stronger competitor in the area. Finally, no substantial direct competition between First Pullman and Old National Bank will be eliminated by the proposed merger and consolidation. THE LIBERTY NATIONAL BANK & TRUST CO., BUFFALO, N.Y., AND THE PEOPLES BANK OF ERIE COUNTY, HAMBURG, N.Y. Banking offices Total assets Name of bank and type of transaction The Peoples Bank of Erie County, Hamburg, N.Y., with and Liberty National Bank & Trust Co., Buffalo, N.Y. (15080), which had. . . . merged Mar. 5, 1964, under the charter and title of the latter bank (15080). The merged bank at the date of merger had COMPTROLLER'S DECISION On January 7, 1964, the $288 million Liberty National Bank & Trust Co., Buffalo, N.Y., and the $22 million Peoples Bank of Erie County, Hamburg, N.Y., applied to the Comptroller of the Currency for permission to merge under the charter and with the title of the former. Buffalo, the county seat of Erie County and the second largest city in New York, with a population of 541,282, is the focal point of a service area which approaches 1 million inhabitants. Although the population of the city has declined slightly since 1950, the area has experienced the substantial population increase of 20 percent since that time, reflecting a movement to the suburbs. Buffalo and the surrounding area constitute the eighth largest manufacturing center in the Nation. Heavy industry dominates a diversified manufacturing structure composed of many national corporations as well as smaller local plants. With business indicators presently moving upward from a relatively high base level and unemployment at a lower rate than in any year since 1957, the outlook for the Buffalo area economy is favorable. The village of Hamburg, whose population is 9,124, is located 12 miles south of Buffalo in the town of Hamburg, and is comprised principally of middle-income families who work in the industrial complexes of Buffalo and other nearby towns. The village, which has numerous commercial enterprises, has long been a trading center for the surrounding area. Although population growth of the village has been moderate, a more rapid increase in the future is expected because of its proximity to Buffalo, improved public facilities, and imminent construction of the Boston Expressway, a superhighway which will connect Buffalo with Hamburg and points south. The charter bank, with 30 offices, is the third largest bank in Buffalo. It is appreciably surpassed in size by the $1,042 million Marine Trust Co. of western New 80 $22,313,663 297,076,017 319,308,335 In operation To be operated 2 30 32 York and the $620 million Manufacturers & Traders Trust Co., both of which have headquarters in Buffalo and branch throughout western New York. Marine Trust Co. has 64 offices and Manufacturers & Traders Trust Co. has 46 offices. Five other banks in the Buffalo service area range in size from the $9.2 million Lincoln National Bank, Buffalo, to the $77 million Chautauqua National Bank of Jamestown, a member of the Marine Midland group. The merging bank, which serves the village of Hamburg, has one branch in nearby North Collins, an agricultural community. A branch of the Marine Trust Co. is the only other bank in the village of Hamburg. The charter bank is a full-service institution which, until recently, has concentrated on serving the city of Buffalo, while the population movement has been to the suburbs. In contrast, the two dominant banks in the area have established extensive branching systems and, consequently, have placed the charter bank in a difficult competitive position. The fact that the Marine Trust Co. controls 44.6 percent, and the Manufacturers & Traders Trust Co. 24.7 percent, of the commercial banking resources in the service area makes obvious the conclusion that the charter bank, which has 10.9 percent of the area's banking resources, is not a giant in the Buffalo area. The addition of the resources of the merging bank will make the charter bank a more competitive force in Buffalo by increasing its lending limit although the limit will still not approach that of the two largest banks. In addition, the broader market area will allow the charter bank to service business and individual customers who require a bank with facilities in a large service area. Although the merger will improve the banking structure in Buffalo, and western New York, its main effect will clearly be felt in Hamburg. The market area of the merging bank is largely limited to the village of Hamburg, as 79.1 percent of the bank's deposits originate in the village and the remainder in surrounding towns. Only one-one hundredth of 1 percent of the charter bank's deposits come from the village of Hamburg, even though the charter bank has a branch 3 miles away. The sole competition to the merging bank comes from the local branch of Marine Trust Go. The disparity in size and the limited services available from the merging bank make competition increasingly difficult. The small lending limit forces the merging bank to deal only with the very small customers and leaves Marine Trust Co. to serve the medium industrial accounts which are important in the area. Such services as business development and an experienced trust department are beyond the capacities of the merging bank. The fact that the Marine Trust Co. clears the merging bank's checks further indicates a less-thanperfect competitive structure in the village. A serious problem of management succession presents a compelling consideration. It is an axiom of the banking industry that a bank is only as effective as its management. A depletion in the ranks of management and an inability to recruit new management personnel create a serious problem for any bank. This is precisely the situation in which the merging bank finds itself. Two presidents have died within 8 years and an executive officer resigned recently. There has been no long-range development of middle management, and efforts over the past 3 years to hire officers have been fruitless. Consequently, senior management is inadequate in the face of present demands, no successor management exists, and junior management is insufficient. The experienced and extensive management of the charter bank can adequately fill the gap and provide full-range banking services, such as a progressive loan-deposit ratio, a real estate loan department, automation and extensive trust facilities, all of which are absent in the merging bank. Applying the relevant statutory criteria to the proposal to merge, we conclude that it is in the public interest and the application is therefore approved. MARCH 3, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL Commercial banking in the Ninth Banking District, in which both of the merging banks are located, is highly concentrated, with the three largest banks accounting for 77 percent of the total assets and 64 percent of the offices of all such banks. Liberty National is the third largest bank in the District and accounts for 10.75 percent of the banking assets. Since 1945 the number of independent banks in the District has decreased from 91 to 40. Six independent banks have been lost through mergers with Liberty National since 1961. As the number of independent banks declines, the importance of retaining the competitive activity of any given one of them increases proportionately. Peoples Bank, the 10th largest bank in the District, appears to have a good opportunity for continued growth. In our opinion, in view of the direct competition which would be eliminated and the stimulus which would be given to further mergers, the effect on competition of the proposed merger of Liberty National and Peoples Bank would be substantially adverse. Our concern about further concentration of banking in the Ninth Banking District was previously voiced by the New York State Superintendent of Banks who in 1962 disapproved this proposed merger. THE MICHIGAN NATIONAL BANK, LANSING, MICH., AND THE GRAND LEDGE STATE BANK, GRAND LEDGE, MICH., AND THE LOAN & DEPOSIT STATE BANK, GRAND LEDGE, MICH. Bankin ? offices Name of bank and type of transaction Total assets In operation Grand Ledge State Bank, Grand Ledge, Mich., with and Loan & Deposit State Bank, Grand Ledge, Mich., with were purchased Mar. 14, 1964, by Michigan National Bank, Lansing, Mich. (14032), which had , After the Durchase was effected, the receiving bank had COMPTROLLER S DECISION On August 13, 1963, the Michigan National Bank, Lansing, Mich., applied to the Comptroller of the Cur- To be operated $6, 887, 000 4, 562, 000 1 1 714,648,000 724,811,000 17 19 rency for permission to purchase the assets and assume the liabilities of the Grand Ledge State Bank, Grand Ledge, Mich., and the Loan & Deposit State Bank, Grand Ledge, Mich. 81 Lansing has a population of 108,000, and is both the capital of Michigan and one of the principal industrial cities in the State. The manufacture of autos and related items and the expanding activities of the State government provide important sources of employment. The city also serves as a trade center for the surrounding agricultural areas and is home to Michigan State University which has an enrollment of some 28,000. The prosperity generated by this diversified activity is reflected by the manner in which the population has grown during the last decade, so that the present population of the Lansing trade area is estimated to be 150,000. The $714 million Michigan National Bank of Lansing has 18 offices and competes primarily with 2 other banks in Lansing, the $93.3 million American Bank & Trust Co. and the $53.6 million Bank of Lansing. There are, in addition, seven smaller banks in the towns surrounding Lansing, ranging in size from the $1.8 million Woodruff State Bank, DeWitt, Mich., to the $19.6 million East Lansing State Bank, East Lansing, Mich. Grand Ledge has a population of 5,165, and is located 10 miles west of Lansing. The two cities are connected by a new four-lane highway. The immediate area around Grand Ledge is largely agricultural, although there are some small industries in Grand Ledge which employ a total of 300 to 400 people. A recent Michigan State University survey indicated that 80 percent of the wage earners residing in Grand Ledge work in Lansing, making Grand Ledge virtually a residential suburb of Lansing. The $6.1 million Grand Ledge State Bank and the $4 million Loan & Deposit State Bank are the sole banks in Grand Ledge. They compete with the larger Lansing banks as well as the five smaller banks in the Lansing trade area. As is common among smaller agriculturally oriented institutions, they are experiencing difficulty in serving the needs of the expanding economy by reason of their limited resources and lending capacity and are faced by management succession problems, here made critical by the imminent retirement of their senior management personnel. While consummation of this proposal will have no significant consequences in the city of Lansing, it will produce marked benefits for the public in the Grand Ledge area. The people of Grand Ledge will have more convenient access to the enlarged services of a modern and efficient bank and will derive the benefits which flow from the presence of a competitively aggressive institution. Applying the statutory criteria of the proposed purchase of assets and the assumption of liabilities, we conclude that it will be in the public interest and the application is therefore approved. MARCH 6, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL Approval of the proposed acquisition of the assets and the assumption of the liabilities of the Grand Ledge State Bank and the Loan & Deposit State Bank, Grand Ledge, Mich., by the Michigan National Bank, Lansing, Mich., will result in the disappearance of two small independent banks and in the enhancement of the position of Michigan National, one of the largest banks in the United States, a position achieved in part through a series of mergers with other banks. The mergers will also eliminate a significant amount of competition between the acquiring and the acquired merging banks. The effect of the acquisition on competition would therefore be substantially adverse. AMERICAN NATIONAL BANK OF VINCENNES, VINCENNES, IND.; FIRST NATIONAL BANK OF BICKNELL, BICKNELL, IND.; BICKNELL TRUST & SAVINGS, BICKNELL, IND.; AND CITIZENS STATE BANK, BICKNELL, IND. Banking offices Name of bank and type of transaction The First National Bank of Bicknell, Bicknell, Ind. (7155), with Bicknell Trust & Savings Co., Bicknell, Ind., with The Citizens State Bank, Bicknell, Ind., with and the American National Bank of Vincennes, Vincennes, Ind. (3864), which had merged Mar. 21, 1964, under charter and title of the latter bank (3864). The merged bank at the date of merger had 82 Total assets In operation To be operated $2, 398, 048 1,697,597 1, 072, 072 1 1 1 21, 799, 040 1 26, 591, 805 2 COMPTROLLERS DECISION On November 12, 1963, the $22.1 million American National Bank of Vincennes, Vincennes, Ind., and the $2.5 million First National Bank of Bicknell, the $1.7 million Bicknell Trust & Savings, and the $1.1 million Citizens State Bank, all of Bicknell, Indiana, applied to the Comptroller of the Currency for permission to merge under the charter and title of "The American National Bank of Vincennes." The applicant banks are located in Knox County in southwestern Indiana, on the Illinois border. Vincennes, with a population of 18,000, is both the county seat and the largest town in Knox County. As the center of a basically agricultural trade area embracing not only most of Knox County but also part of the surrounding territory in Illinois, Vincennes serves more than 40,000 people. In addition, manufacturing plays a large part in the community's economy since a number of major industrial plants are located there. Competition for the charter bank in Vincennes comes from numerous sources. The only other bank in town, while somewhat smaller, competes strongly for loans and other commercial and trust business and, in addition, its three branches, located in another region of the county, give it access to an area difficult for the charter bank to serve. Nonbank competition comes not only from private sources such as savings and loan associations, credit unions, finance companies, loan companies, and insurance companies, but also from Federal government agencies that provide credit for fanners in their personal and agricultural activities. Bicknell, with a present population under 4,000, was once a town of 9,000 supported by a nearby Pennsylvania Railroad yard and a million dollar a month coal mine payroll. These operations have been discontinued, however, and now only one factory remains. The town relies heavily on local agricultural activity for its economic support, but since agricultural units are increasing in size and mechanization, fewer trade and employment opportunities result. Although only the merging banks are located in Bicknell, the other Vincennes bank maintains two branches nearby that offer active competition. Limited competition for the merging banks comes from the nonbank financial sources operating in Vincennes. Prospects for future earnings of the charter bank appear to be good. A diversified economy and the community's progressive nature indicate the presence of a background and atmosphere conducive to growth. In Bicknell, however, future prospects would seem dim. The downtrend in population and economic activity suggests the serious problem of one or more of these banks ending operations. Moreover, officers of two of the merging banks are approaching retirement age. Merger with the charter bank will alleviate both problems and assure continuing banking facilities for Bicknell. The Bicknell banks at present provide limited services to their community. By merging, services now offered can be expanded and more complete banking facilities, including a trust department, will be available to the community. In effect the merger will provide a broader based, better balanced institution that will more effectively serve the convenience and needs of the Bicknell community. The proposed merger will have a negligible effect on competition in the Vincennes area. While the resulting bank's deposits will be greater than that of its local banking competitor, the total of loans will be approximately equal. Moreover, the resulting bank's branch in Bicknell will now be able to offer effective competition to the competing institution's nearby branches. In Bicknell, while the total elimination of the town's banking institutions and replacement by branch offices could constitute a serious detriment to the community which would normally be dispositive of the application, under the circumstances as presented above such a decision would be in error because it would result in the lingering death of one or more of the merging banks through lack of business. Clearly this is the greater detriment to the community. Applying the statutory criteria to the proposed merger, we conclude that it is in the public interest and the application is therefore approved. MARCH 16, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL The acquiring bank is the largest (in terms of deposits) in its service area, which covers Knox County, Ind., and part of Lawrence County, 111. By this •application it seeks to acquire all three commercial banks operating in Bicknell, Ind., a town some 15 miles distant from the acquiring bank's home office in Vincennes, Ind. If accomplished, the mergers would increase the acquiring bank's share of service area deposits from 31 to 39 percent, an increase in concentration of 79.5 percent. The next largest of 12 banks in the area would have 19 percent and the third largest only 8 percent. The mergers would also replace 83 three competing unit banks in the town of Bicknell with one branch of a large Vincennes Bank so that Bicknell area residents would be forced to go to nearby towns for alternative commercial banking. Moreover, the nearest of these other banks are branches of Vincennes' other large banks. The result of the proposed acquisition on competition would appear to be adverse. THE FIRST NATIONAL BANK OF SOUTH CAROLINA OF COLUMBIA, COLUMBIA, S.C., AND THE DARLINGTON COUNTY BANK & TRUST CO., DARLINGTON, S.C. Banking offices Total assets Name of bank and type of transaction Darlington County Bank & Trust Co., Darlington, S.C, with and the First National Bank of South Carolina of Columbia, Columbia, S.C. (13720), which had merged Mar. 31, 1964, under charter and title of the latter bank (13720). The merged bank at the date of merger had COMPTROLLER'S DECISION On January 20, 1964, the $106 million First National Bank of South Carolina of Columbia, Columbia, S.C, and the $6.3 million Darlington County Bank & Trust Co., Darlington, S.C, applied to the Comptroller of the Currency for permission to merge under the charter and title of the former. Although the charter bank, with 24 branch offices throughout the State, is the third largest bank in South Carolina, it is considerably smaller than the two larger statewide banking institutions, the $325 million South Carolina National Bank of Charleston and the $171.5 million Citizens & Southern National Bank of South Carolina. Columbia, the headquarters of the charter bank, is the capital and largest city of South Carolina with a population of 97,500. It is located in the central part of the State with an economy principally supported by military installations, retail and wholesale trade, textile manufacturing, and State governmental activity. The merging bank is located 85 miles northeast of Columbia in Darlington, a small rural community with a population of 6,700 in the "Great Pee Dee" tobacco area. This town is the county seat of Darlington County, population 53,000. The economy is largely dependent upon agriculture, mostly tobacco with some cotton and soybeans. Local industry includes an electronics manufacturing plant which employs 1,100, a paper container company which employs 700, and the Nation's largest automobile auction. The effect of the merger in the seven major areas now served by First National will be slight. Any im84 To be operated In operation $6, 372, 795 1 105,971,091 23 111,768,296 24 pact will be felt principally in Darlington. Since the Darlington banks are already in competition with the two largest statewide banks' branches in Florence, which is 10 miles southeast of Darlington, the entry of First National into this area will tend to increase rather than diminish competition. There will be no elimination of competition between the two merging banks, as the nearest branch of First National is located 28 miles northeast of Darlington in Bennettsville. There are no common borrowers or depositors, and neither bank derives business from the other's service area. The public interest will be served by a local unit of First National which will be able to furnish the Darlington County banking public with more extensive trust services and aggressive competitive management. The resulting local banking unit will have a greatly enlarged lending capacity, thereby increasing its utility to the business community. In addition, a serious management succession problem will be solved. Considered in light of the statutory criteria, we find the application to be in the public interest and the merger is therefore approved. MARCH 26, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL First National is the third largest commercial bank in South Carolina with over 8 percent of the State's deposits and 25 offices. Since 1955 First National has acquired 7 other banks with deposits of $38,846,000 and 11 offices. Darlington Trust is a single-office bank located in Darlington, S.C, 78 miles northwest of First National's main office in Columbia, S.C, and 28 miles southwest of First National's nearest branch in Bennettsville, S.C. Both banks have shown excellent growth in deposits and earnings. There appears to be little direct competition between the applicants at present due to the distances between their respective offices. South Carolina's banking resources are highly concentrated in four large statewide institutions (including First National) which together control 53 percent of the State's total deposits, partly as a result of prior mergers. These four banks have acquired 23 smaller banks in the past decade and at the same time have been opening numerous de novo branch offices. Such acquisitions by one of the four dominant banks have often led directly to a similar acquisition by one of the others, with the result that the only independent banks in a number of South Carolina communities have been eliminated from competition and remaining unit banks in nearby communities have been subjected to direct competition with offices of much more powerful institutions. The proposed merger conforms with the trend now well-established in the State. First National would increase its resources and extend its branch system into another community. As a result, the three other statewide systems would be motivated to keep up with First National by making similar acquisitions and those smaller banks in most direct competition with Darlington Trust would consider seriously such a proposal to insure their survival in competition with First National. In fact, following the filing of this application the second largest bank in the State has announced plans to acquire the only other bank in Darlington, Citizens Bank of Darlington. In view of the bank merger history in South Carolina, the proposed merger threatens to have a seriously adverse effect upon competition and may aggravate the trend toward monopoly in that State. THE VIRGINIA NATIONAL BANK, NORFOLK, VA., AND THE SOUTHERN BANK OF COMMERCE, DANVILLE, VA. Banking offices Name of bank and type of transaction Total assets Southern Bank of Commerce, Danville, Va., with and Virginia National Bank, Norfolk, Va. (9885), which had merged Apr. 3, 1964, under charter and title of the latter bank (9885). The merged bank at the date of merger had COMPTROLLER S DECISION On January 23, 1964, the $404 million Virginia National Bank, Norfolk, Va., and the $2.8 million Southern Bank of Commerce, Danville, Va., applied to the Comptroller of the Currency for permission to merge under the charter and title of the former. The growth of the Norfolk economy has been noted in recent statements approving mergers to which Norfolk banks were parties. Norfolk's large military installations and port facilities, as well as increasing manufacturing industries, place the area, with a total population of 578,000, in a favorable economic position and create constantly new demands on its financial facilities. The charter bank is presently the second largest bank in Virginia and operates a statewide system consisting of 43 offices located in 4 primary service areas. With 9 percent of the State's total banking resources, Virginia National is slightly smaller than the $425 mil- $2,912,064 391,628,739 394, 470, 103 In operation To be operated 2 41 43 lion First & Merchants National Bank, Richmond, which has 9.9 percent of total state resources, and is larger than the $283 million State-Planters Bank of Commerce & Trusts, Richmond, which has 6.3 percent of total state resources. Aggressive competition is furnished throughout applicant's service areas by 99 banking facilities with aggregate deposits of approximately $836 million and aggregate loans of $594 million. Further, Virginia National competes with four bank holding companies which have aggregate deposits of $1.2 billion and loans of $800 million. This merger will only slightly augment the applicant's present resources and Virginia National will still occupy second place among Virginia banks. The Southern Bank of Commerce serves Henry County and the southern two-fifths of Pittsylvania County, which area includes the cities of Danville and Mar tinsvi lie. Danville, with a population of 46,577, is located in southern Virginia a short distance north of the North 85 Carolina State line. The city serves a trade area covering a 30-mile radius in which an estimated 300,000 persons reside. The main sources of income for the area are industry and agriculture. The largest singleunit textile mill in the country, located in Danville, provides employment for about 10,000 persons. The agriculture of the area depends principally upon the growing, processing and marketing of tobacco. Other farm income is derived from the raising of livestock and grains. Martinsville, an independent city and the seat of Henry County, is some 30 miles west of Danville. Its population, according to the 1960 census, was 18,798, and an estimated 60,000 persons reside in its trade area. The region is predominantly industrial, with numerous plants in or near the city. Farm income, which plays a secondary role in the economy, is derived almost entirely from bright leaf tobacco, although there is some raising of beef cattle and dairy farming. Tobacco market sales reached a high during the 1962 season and business conditions in general have been very favorable in the Martinsville area with future prospects appearing to be good. The merging bank is the smallest of seven banks serving Danville. It has struggled for existence ever since it received its state charter in 1952 and there has been some question recently as to whether this charter would be allowed to continue. The bank is now smaller than it was 10 years ago and is the only Danville bank that did not grow during this period. Its public image is not favorable. Competition among the banks in Danville will not be affected appreciably by this merger. The merging bank never had sufficient resources to compete effectively with the six other banks led by the $36 million First National Bank, and the $26 million American National Bank & Trust Co. Indeed, merger of the weak Southern Bank of Commerce into the charter bank may well prevent development of a problem which could easily upset; the stability of the present banking situation in Danville. Having reviewed the proposal in the light of the statutory factors, we find that it is in the public interest and it is therefore approved. APRIL 1, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL Virginia National is the second largest bank in Virginia and the dominant bank in its primary service area which includes Norfolk, the largest industrial area in the State. As of December 13, 1963, assets were $404,815,000, loans were $224,996,000, deposits were $374,191,000 and capital accounts were $32,747,000. Virginia National presently has 43 banking offices in 20 communities throughout the State of Virginia. Southern Bank of Commerce is located in Danville> about 195 miles west of Norfolk. As of December 13, 1963, its total assets were $2,760,000, loans were $1,578,000, deposits were $2,230,000 and capital accounts were $321,000. Taken by itself, the effect of this proposed merger on competition would not be significantly adverse. However, since 1956 Virginia National has participated in six mergers and consolidations, five of which were consummated in 1963. These mergers have given Virginia National, as of the dates of acquisition, more than $173 million in deposits and 32 branch offices, or nearly 50 percent of its present deposits and more than 65 percent of its present offices. In addition, an application has recently been filed to merge the First National Bank of Buena Vista, Buena Vista, Va., a bank with resources of $4,855,000. It is the cumulative effect of the series of mergers engaged in by Virginia National that is of concern to this Department. It is our view that the overall effect of this series of mergers on competition is adverse since it contributes to the serious trend toward concentration of banking in the State of Virginia by the merger process. THE FIRST NATIONAL BANK OF BUENA VISTA, VA., AND THE VIRGINIA NATIONAL BANK, NORFOLK, VA. Banking offices Name of bank and type of transaction The First National Bank of Buena Vista, Buena Vista, Va. (9890), with. . and Virginia National Bank, Norfolk, Va. (9885), which had merged Apr. 3, 1964, under charter and title of the latter bank (9885). The merged bank at the date of merger had 86 Total assets $4, 995, 320 394,470,103 399, 206, 974 In operation To be operated 1 43 44 COMPTROLLER S DECISION On January 28, 1964, the $405 million Virginia National Bank of Norfolk, Norfolk, Va., and the $4.9 million First National Bank of Buena Vista, Buena Vista, Va., applied to the Comptroller of the Currency for permission to merge under the charter and title of the former. The Norfolk-Portsmouth metropolitan area is one of the major service areas of the charter bank and is the state's top-ranking metropolitan area from the standpoint of population, income, and retail sales. With a population of 887,568, the Norfolk area enjoys personal annual income in excess of a billion dollars. Retail sales have increased from $88 million in 1939 to a record $563 million in 1958. It is a dynamic, expanding and an increasingly important center of the Eastern Seaboard's economy. The Virginia National Bank is the second largest bank in Virginia and has 43 banking offices in 20 communities throughout the State. Its customers enjoy, as a necessary concomitant of a well-established, large, efficiently organized bank, all the benefits of a full-service commercial bank. It is able to offer complete commercial banking services and has available the skilled, experienced management to render these services. This has been no small factor in the tremendous growth which Norfolk has enjoyed in the past and can play an ever increasing role in the future economic expansion of the entire State of Virginia. Buena Vista, location in central Virginia about 125 miles west of Richmond, has a population of 6,300 while surrounding Rockbridge County has 24,039. The major source of income for the area is derived from manufacturing activity. It is estimated that there are 3,650 people of a total work force of 10.370 employed in manufacturing, with the textile industry alone employing 2,850 persons. There were 18 construction, 14 manufacturing, 69 trade, and 27 service establishments in Rockbridge County at the close of the second quarter of 1961. The average per capita income in 1960 for Rockbridge County was $1,345 while that of the State was $1,868. Peoples Bank of Buena Vista, Inc., is the only bank in that city aside from the merging bank. Although it is only a $2.1 million institution, its affiliation with Financial General Corp., a holding company, makes its competitive ability much stronger than would appear from its total assets. Other competing banks are the $3.7 million First National Bank of Lexington, Lexington, Va., located 6 miles from Buena Vista (also affiliated with Financial General); the $7.5 million Peoples National Bank of Lexington; and the $7.2 million Rockbridge National Bank of Lexington. Since Virginia National's closest offices to First National are its two branches in Staunton, 34 miles north of Buena Vista, this merger will not eliminate any cognizable amount of competition. The impact of the merger on other banks in the area will be insignificant as the other banks are either well established and adequately serving their respective communities or are associated with a bank holding company. The resulting bank will certainly offer increased competition to the many nonbanking financial institutions which now serve the area. The First National B;ank of Buena Vista is now operating at a competitive disadvantage since it neither offers a full range of banking services to its community nor possesses a management echelon capable of the leadership required to meet the competitive conditions of our present-day banking markets. The bank resulting from this merger will not only have resources adequate to the needs of the Buena Vista market but will also correct the management deficiencies now harassing the First National Bank. This merger should constitute a constructive contribution toward the solution of the problems of economic stagnation which now afflict the Appalachian region. Having applied the statutory criteria to the facts of this case, we find that the proposed merger will be in the public interest. The application is therefore approved. APRIL 2, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL Virginia National is the second largest bank in Virginia and the dominant bank in its primary service area which includes Norfolk, the largest industrial area in the State. As of December 13, 1963, assets were $404,815,000, loans were $224,966,000, deposits were $374,191,000 and capital accounts were $32,747,000. Virginia National presently has 43 banking offices in 20 communities throughout the State of Virginia. The First National Bank of Buena Vista is located 214 miles northwest of Norfolk and, as of December 13, 1963, had total assets of $4,855,000, loans of $2,813,000, deposits of $4,233,000 and capital accounts of $471,000. Standing alone, the effect of this proposed merger on competition may not be significantly adverse. However, since 1956, Virginia National has participated in six mergers and consolidations, five of which were consummated in 1963. These mergers have given Vir87 ginia National, as of the dates of acquisition, more than $173 million in deposits and 32 branch offices, or nearly 50 percent of its present deposits and more than 65 percent of its present offices. In addition, an application has recently been filed to merge the Southern Bank of Commerce, Danville, Va., a bank with resources of $2,760,000. It is the cumulative effect of the series of mergers engaged in by Virginia National that is of concern to this Department. It is our view that the overall effect of this series of mergers on competition is adverse since it contributes substantially to the serious trend toward concentration of banking which is taking place in the State of Virginia by virtue of the merger process. THE ROCKINGHAM NATIONAL BANK OF EXETER, EXETER, N.H., NEWMARKET, N.H. AND THE NEW MARKET NATIONAL BANK, Banking offices Total assets Name of bank and type of transaction In operation The New Market National Bank, Newmarket, N.H. (1330), with and the Rockingham National Bank of Exeter, Exeter, N.H. (12889), which had merged Apr. 3, 1964, under charter and title of the latter bank (12889). The merged bank at the date of merger had COMPTROLLER S DECISION On January 1, 1964, the $9.5 million Rockingham National Bank of Exeter, Exerter, N.H., and the $3.6 million New Market National Bank, Newmarket, N.H., applied to the Comptroller of the Currency for permission to merge under the charter and title of the former. The applicant banks are located in Rockingham County in the southeastern corner of New Hampshire. Exeter, the county seat, has a population of 7,243 and an estimated service area population of 23,000. Situated 8 miles north of the Massachusetts border and 7 miles south of Newmarket, Exeter has a varied industrial economy with promise of greater economic development. It is also the site of Phillips Exeter Academy, one of the country's leading preparatory schools. The naval shipyard at Portsmouth and the Pease Air Force Base, both within 15 miles of Exeter and Newmarket, provide additional economic support for the area. Newmarket has a population of 3,153 and serves an area of 12,450. Its main industries are shoe manufacturing, textiles and a mica products concern. Both Exeter and Newmarket expect to benefit by the expanded recreational facilities of the coastal towns which are but 10 miles distant. The general area served by the charter bank encompasses five other banking institutions, the largest of which is the $16.6 million Exeter Banking Co. The resulting bank, with total resources of $13.1 million, will be the second largest in the area. Other compet88 To be operated $3, 640, 775 1 9, 570, 223 1 13, 210, 998 2 ing institutions are the $2 million Hampton National Bank, Hampton and three cooperative banks with no branches and approximately $18.5 million in withdrawable assets. In the Newmarket area, the merging bank has a minimal amount of competition from the $2.8 million Durham Trust Co. located in Durham, 4 miles north of Newmarket. The 41 percent growth in the southeastern New Hampshire area in the last decade indicates a demand for banking services that can be met only by vigorous, expanding institutions which will not be restricted by a confining lending limit. A higher lending limit resulting from the merger will enable Rockingham National to meet the area's future demands. The Newmarket area will benefit from the merger, as the merging bank for several years has been forced to lay off a substantial amount of loan paper due to lack of sufficient resources. The merger will remedy this situation, as well as a management succession problem. There is no effective competition between the applying banks and there will be no adverse effect on banking competition in the area. Applying the statutory criteria to the proposed merger, we conclude that it is in the public interest and the application is therefore approved. MARCH 26, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL The Rockingham National Bank of Exeter, Exeter, N.H., as of December 31, 1963, had reported total assets of $9,527,000. In Exeter, Rockingham competes with a larger commercial bank and a cooperative bank which has no demand deposits. In Rockingham's claimed service area it competes with three other smaller banks, one of which is a cooperative. The New Market National Bank at Newmarket, N.H., 7 miles north of Exeter, as of December 31, 1963, had reported total assets of $3,645,000. It operates in a separate service area. The community of Newmarket has no other bank. The only direct competitor is another bank of comparable size in Durham, 4 miles distant. Competition between Rockingham and New Market apparently exists minimally only on the line dividing their respective service areas. Rockingham and New Market are controlled by the same holding company, New Hampshire Bank Shares, and the contemplated merger, thus viewed, would not alter the picture substantially except to improve the lending power of the resulting bank. However, New Hampshire Bank Shares, the only bank holding company in the State, which controls seven banks holding 12.8 percent of total commercial bank deposits, will obtain branching advantages to add to its holding company position. In the circumstances of this case, the combining of holding company and branching advantages in one organization may result in adverse effects upon competition. THE DELTON STATE BANK, DELTON, MICH., AND THE FIRST NATIONAL BANK & TRUST CO. OF KALAMAZOO, KALAMAZOO, MICH. Banking offices Name of bank and type of transaction Total assets In operation Delton State Bank, Delton, Mich., with was purchased Apr. 18, 1964, by the First National Bank & Trust Go. of Kalamazoo, Kalamazoo, Mich. (191), which had After the purchase was effected, the receiving bank had COMPTROLLER'S DECISION On February 11, 1964, the $107 million First National Bank & Trust Co., Kalamazoo, Mich., applied to the Comptroller of the Currency for permission to purchase the assets and assume the liabilities of the $2 million Delton State Bank, Delton, Mich. The purchasing bank presently operates 11 branches with 6 additional offices approved and under construction in the Kalamazoo area. Competition in the Kalamazoo area is provided by the $80 million American National Bank & Trust Co., the $39 million Industrial State Bank, and the $11 million Home Savings Bank of Kalamazoo. Kalamazoo, headquarters for the purchasing bank, is a city of 85,000, with a rapidly increasing trading area of 300,000 people. It is located in the southwestern section of Michigan's lower peninsula. Served by excellent transportation facilities, the city has an economy well diversified between industry and agriculture. The $2 million selling bank is located 20 miles northeast of Kalamazoo in Delton, a town of 380, in Barry County, Mich. It operates without local competition and provides only limited services. The economy of this area is predominantly agricultural, 779-563—^5 7 To be operated $2, 039, 579 1 109, 367, 693 111,283,890 17 18 although numerous lakes in the area provide resort and recreational activities. The effect of the addition of $2 million of assets to the $107 million now held by the buying bank will be slight in the areas it now serves. Bank competition in Delton, where there are no other banks, comes from two small institutions in Hastings, 18 miles northeast. Consequently, the competitive effect in Delton would be deminimis. There will be no elimination of competition between the two banks, as the nearest branch of First National is located 14 miles northeast of Delton at Parchment. The public interest will be best served by a local unit of First National which will furnish Delton and the Barry County banking public with extensive trust services, new aggressive management, and a greatly enlarged lending capacity. In addition, a management succession problem, occasioned by the imminent retirement of the president of the Delton bank, will be solved. Considered in the light of the statutory criteria, we find the application to be in the public interest and the purchase of assets and assumption of liabilities is, therefore, approved. APRIL 10, 1964. 89 SUMMARY OF REPORT BY ATTORNEY GENERAL The proposed acquisition of assets and assumption of liabilities of Delton State Bank by the First National Bank & Trust Co. of Kalamazoo will have no competitive impact in the service area of the acquired bank where Delton Bank is now the only commercial bank. It will eliminate little direct competition now existing between the two banks since their service areas show only an insignificant overlap. The competitive posi- tion of First National in its own service area will be somewhat strengthened, but it is not believed that the other commercial banks competing with First National will be at a significant disadvantage in the combined service area as a result of the proposed acquisition. Thus, the effect of the proposed acquisition upon competition would not appear to be substantially adverse except that it would add to the position of dominance presently enjoyed by First National. THE MCDOWELL NATIONAL BANK OF SHARON, SHARON, PA., AND THE FIRST NATIONAL BANK, SHARPSVILLE, PA. Banking offices Total assets Name of bank and type of transaction In operation The First National Bank of Sharpsville, Sharpsville, Pa. (6829), with was purchased Apr. 18, 1964, by the McDowell National Bank of Sharon, Sharon, Pa. (8764), which had After the purchase was effected, the receiving bank had COMPTROLLER'S DECISION On February 3, 1964, the McDowell National Bank of Sharon, Sharon, Pa., applied to the Comptroller of the Currency for permission to purchase the assets and assume the liabilities of the First National Bank, Sharpsville, Pa. The city of Sharon, located in western Pennsylvania at the Ohio border, is in the southwest section of Mercer County. With a metropolitan population of 35,000, Sharon is the commercial center of the Shenango Valley industrial area. The economy in the area is industrial with steel production and fabrication predominating. All of the Shenango Valley is classified as an area of persistent and substantial unemployment. Present unemployment is estimated at 6.8 percent of the total work force. The $36 million McDowell National Bank of Sharon with three offices, and three more approved but not opened, is the largest bank with its main office located in the service area. Two larger banks both with main offices in Oil City, Pa., the $75 million First Seneca Bank & Trust Co. with 12 offices and the $70 million Northwest Pennsylvania Bank & Trust Co. with 12 offices, have branched into the service area. The First Seneca Bank & Trust Co. has four offices in the city of Sharon with a fifth office in nearby Mercer. In addition there are three other banks ranging from the $3 90 To be operated $6, 220, 301 1 38,666,122 43, 456, 637 3 4 million First National Bank of West Middlesex to the $30 million First National Bank of Mercer County that compete in the purchasing bank's service area. The Borough of Sharpsville, 4 miles northeast of Sharon, has a population of slightly over 6,000 and has substantially the same socioeconomic makeup as Sharon. Although the $6 million First National Bank of Sharpsville is the only bank in Sharpsville, the First National Bank of Mercer County, Greenville, Pa., has received permission to establish a branch in Sharpsville. The selling bank is not competitive. For example, it has lost substantial deposits in the last 5 years because it pays only 1 percent interest on passbook accounts. The purchasing bank currently pays 3 percent on savings deposits. The increased competitive situation created by the presence of the above-mentioned branch will exert continued and increasing pressure on the deposits and activity of the First National Bank. The purchase will be of direct benefit to the depositors by increasing the interest rates on time deposits, and to the public, by the establishment of a vigorous competitive banking community in Sharpsville. A management succession problem in the selling bank will be solved, and full banking services, as well as efficient trust services will be available to the Sharpsville area. In applying the statutory criteria to the proposed purchase of assets and assumption of liabilities, we con- elude that it will be in the public interest. The application is therefore approved. APRIL 10, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL In this transaction the bank which is the largest in terms of the banking business conducted in the southwest portion of Mercer County proposes to purchase this area's sixth largest bank. There is presently existing between these banks a fair degree of competition which would, of course, be eliminated by this transaction. It would also remove another apparently viable independent bank from an area that has already seen the disappearance of several independents. After purchase of the Sharpsville bank by McDowell, the resulting bank would account for about 30 percent of the banking business in southwest Mercer County and, together with the next two banks, would account for about 75 percent thereof. This appears to be a high degree of concentration. However, the third and fifth banks are much larger than McDowell in terms of overall business, while the smallest bank is allegedly owned in part by officers and directors of the second bank. There would, therefore, not appear to be unusual disparity in size among these banks. Three of the five existing independent banks in Mercer County which operate outside McDowell's service area would not appear to be directly affected by this transaction, although they may find it increasingly expedient to merge with other banks in the county. It is our conclusion that the probable effect of this transaction on competition will be adverse. THE FIRST NATIONAL EXCHANGE BANK OF VIRGINIA, ROANOKE, VA., AND THE FIRST NATIONAL BANK OF LEBANON, LEBANON, VA. Banking offices Name of bank and type of transaction Total assets To be operated In operation The First National Bank of Lebanon, Lebanon, Va. (6886), with and the First National Exchange Bank of Virginia, Roanoke, Va. (2737), which had merged Apr. 24, 1964, under charter and title of the latter bank (2737). The merged bank at the date of merger had . , COMPTROLLER'S DECISION On March 9, 1964, the $202 million First National Exchange Bank of Virginia, Roanoke, Va., and the $9.1 million First National Bank of Lebanon, Lebanon, Va., applied to the Comptroller of the Currency for permission to merge under the charter and with the title of the former. Roanoke, with a population of about 100,000 inhabitants, is the fourth largest city in the Commonwealth and the industrial and trade center of southwest Virginia. In addition to the charter bank, the banking needs of the city are also served by the $53.5 million Colonial American National Bank and the $40.8 million Mountain Trust Co. A branch of the $184.2 million Bank of Virginia in Roanoke and banks in Salem, adjoining Roanoke, complete the competitive banking structure of the Roanoke city area. Lebanon, seat of Russell County, is about 150 miles southwest of Roanoke in southwest Virginia. The town has a population of 2.000 in a trade area of 30,000 dependent on farming, i.e., tobacco and beef $8, 513, 321 1 205,164,466 19 213,427,071 20 cattle, for 75 percent of its income, and on coal mining for the other 25 percent. From 1950 to 1960, the population of Lebanon increased from 675 to 2,000 inhabitants due largely to the construction of a large coal generating plant of Appalachian Power Co. in the area. A local garment manufacturing plant employs about 350 women. Until recently the First National Exchange Bank of Virginia operated solely in Roanoke. In recent years, however, the bank has grown from $107 million in total resources to $202 million principally through the acquisition of banks throughout Southwestern Virginia. As a result of the transition from a local to a regional bank, the First National Exchange Bank of Virginia now competes more effectively with other regional and statewide banking institutions such as First & Merchants National Bank, Virginia National Bank, United Virginia Bank Shares, a registered bank holding company system, the Wachovia Bank & Trust Co., the North Carolina National Bank, and the Bank of Virginia. 91 Although the First National Bank of Lebanon is the only bank in Lebanon, it competes with two other banks in Russell County, namely, the $3.9 million First National Bank in Honaker, and the $2.1 million Bank of Russell County, at Cleveland. It has no trust department, and has traditionally adhered to very conservative lending policies, referring larger loans to the Production Credit Association at Abingdon, a government lending agency. The two applicant banks are not competitors since the nearest offices of the charter bank are its three branches in Bristol, about 35 miles southwest of Lebanon. The resulting bank will bring to the merging bank's area trust services, a higher lending limit, more liberal lending policies, and the benefits of the farm credit service department of the charter bank. The entry of a large, full-service, regional bank into Russell County will stimulate the local economy by providing a larger, more liberal source of funds for local development. Applying the statutory criteria to the proposed merger, we conclude that it is in the public interest and the application is, therefore, approved. APRIL 23, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL Exchange Bank, one of the largest banks in the State of Virginia, with assets of $202 million, seeks to acquire First National Bank of Lebanon, a bank with assets of $9 million, located in a small community in southwestern Virginia. In the span of a few short years, Exchange Bank has expanded its operations by acquiring six banks, four of which are located on a line running southwest from Roanoke to Bristol. These acquisitions have given Exchange Bank a substantial foothold into an area which traditionally enjoyed the competition of many small- and intermediate-size institutions. The proposed acquisition is but another in a series of bank acquisitions in southern Virginia. Such a merger movement can only add to the rapid trend toward concentration of banking assets in the State of Virginia. In turn, it can only decrease the competitive viability of smaller independent banks, to the detriment of long-range competition in the area. The proposed acquisition will have an adverse effect upon competition and the effect on competition of continuing acquisitions by the acquiring bank will be seriously adverse. T H E FIRST NATIONAL EXCHANGE BANK OF VIRGINIA, ROANOKE, VA., AND THE FIRST NATIONAL BANK OF RlCHLANDS, RlCHLANDS, V A . Banking offices Total assets Name of bank and type of transaction The First National Bank of Richlands, Richlands, Va. (10850), with and the First National Exchange Bank of Virginia, Roanoke, Va. (2737), which had merged Apr. 24,1964, under charter and title of the latter bank (2737). The merged bank at the date of merger had COMPTROLLER'S DECISION On March 9, 1964, the $202 million First National Exchange Bank of Virginia, Roanoke, Va., and the $14.5 million First National Bank of Richlands, Richlands, Va., applied to the Comptroller of the Currency for permission to merge under the charter and with the title of the former. Roanoke, with a population of about 100,000, is the fourth largest city in the Commonwealth and the industrial and trade center of southwest Virginia. In addition to the charter bank, the banking needs of the city are also served by the $53.5 million Colonial American National Bank and the $40.8 million Mountain 92 In operation To be operated $14, 372, 920 1 191,263,269 18 205,164,466 19 Trust Co. A branch of the $184.2 million Bank of Virginia in Roanoke and the banks in Salem, adjoining Roanoke, complete the competitive banking structure of the Roanoke City area. Richlands, a town of about 5,000 some 160 miles west of Roanoke, is located in Tazewell County on the West Virginia border. Located in the large geographic area known as Appalachia, it is experiencing acute depression brought about by mechanization and automation of the coal mining industry. Although Inland Creek Coal Co. and Republic Steel Co. are expanding deep mining facilities in the area, these operations will be automated, employing skilled persons with little absorption of the local unskilled labor supply. Feeder cattle grazing and tobacco farming add little to the economy. Until recently, First National Exchange Bank operated solely in Roanoke. Since I960, however, the bank has grown from $107 million in total resources to $202 million principally through the acquisition of banks throughout southwest Virginia. As a result of the transition from a local to a regional bank, First National Exchange Bank now competes more effectively with other regional and statewide banking institutions such as First & Merchants National Bank, Virginia National Bank, United Virginia Bankshares, a registered bank holding company system, the Wachovia Bank & Trust Co., the North Carolina National Bank and the Bank of Virginia. The First National Bank of Richlands has been active in its area in financing local businesses, consumer lending and mining equipment loans. This bank is one of six banks in Tazewell County and averages about 40 percent of loan volume and 31 percent of deposits in the area. Management, however, is concentrated in the hands of the president who will soon be 70 years old and there is no experienced successor to replace him. This lack of successor management has motivated the board of directors to consider the merger with the Roanoke bank in order to have access to its pool of young, trained executive personnel. The two applicant banks are not competitors. Consummation of the proposed merger will neither reduce competition nor adversely affect the banking structure of the areas served by either bank. On the contrary, the resulting bank will dispose of the merging bank's management succession problem and improve banking services and general economic conditions in Tazewell County by making available greater resources of credit capable of financing economic progress in the area. Applying the statutory criteria to the proposed merger, we conclude that it is in the public interest and the application is, therefore, approved. APRIL 23, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL Exchange Bank, with home offices in Roanoke, has 18 offices and $202 million in assets. It now seeks to acquire an independent bank with assets of $14,451,000 located in the city of Richlands, 162 miles west of Roanoke. In a companion application, Exchange Bank is seeking approval to acquire another small bank in Lebanon, 28 miles from Richlands. Since 1960, Exchange Bank has acquired six banks, four of which are located on a line running southwest from Roanoke to Bristol. These acquisitions have given Exchange Bank a substantial foothold into an area which traditionally has enjoyed the competition of many small- and intermediate-size banks. The proposed acquisition is but another in a series of bank acquisitions in southern Virginia. Such a merger movement can only add to the rapid trend toward concentration of banking assets in the State of Virginia. In turn, it can only decrease the competitive viability of smaller independent banks, to the detriment of longrange competition in the area. We therefore conclude that the proposed acquisition will have an adverse effect upon competition. THE WINCHESTER NATIONAL BANK, WINCHESTER, N.H., AND THE CHESHIRE NATIONAL BANK OF KEENE, KEENE, N.H. Banking offices Total assets Name of bank and type of transaction In operation The Winchester National Bank, Winchester, N.H. (887), with was purchased Apr. 24,1964, by the Cheshire National Bank of Keene, Keene, N.H. (559), which had , After the purchase was effected, thf receiving bank had COMPTROLLER'S DECISION On January 29, 1964, the $8.6 million Cheshire National Bank of Keene, Keene, N.H., applied to the Comptroller of the Currency for permission to purchase the assets and assume the liabilities of the $2.2 million Winchester National Bank, Winchester, N.H. To be operated $2, 268, 050 1 8,650,166 10, 644, 215 1 2 Keene, the site of the acquiring bank and the county seat of Cheshire County, has a population of 17,562. The city is the primary retail sales center for the greater part of southwestern New Hampshire. The service area economy of the Cheshire National Bank is predominately based on light industry, with farming and lumbering of somewhat lesser importance. 93 Winchester, in which the selling bank is located, is approximately 14 miles southwest of Keene in Cheshire County and less than 5 miles north of the Massachusetts State border. Its economy is based upon retail sales and light industries of long standing in the area. The Winchester population of 2,411, together with the entire economic structure of the community, has shown little change over the past 20 years. This stagnation is due in no small part to the inadequate banking facilities at present available to residents and prospective industries. Elimination of competition will be negligible, since the service areas of the present banks do not overlap. Competition will instead be strengthened throughout all of southwestern New Hampshire, as the resulting bank will be better able to compete effectively with other financial institutions in the area. In addition to three commercial banks in the area, one of which is larger than the resulting bank, there are at present two mutual savings banks, with withdrawal balances of $26 and $12 million respectively, a cooperative bank, an active savings and loan association, several credit unions, and six personal loan companies. These institutions are, for the most part, aggressive, well-managed, and better able to meet the eocnomic needs of the communities. Applying the statutory criteria to the proposed merger, we conclude that it is in the public interest and the application is, therefore, approved. MARCH 31, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL The Cheshire National Bank of Keene, Keene, N.H., with resources of $8,650,165, proposes to purchase the assets and acquire the liabilities of the Winchester National Bank, Winchester, N.H., with resources of $2,268,049. Winchester National's very modest size, plus the static economic condition prevailing in its area, taken together with the fact that the acquisition would eliminate little direct competition between the participating banks, tend to minimize the anticompetitive effects of the proposed merger. On the other hand, the substantial increase in the percentage of deposits and loans held by Cheshire National, the advance of Cheshire from second to the position of the largest bank in the area, the resulting high level of concentration and the fact that the merger would leave the Winchester area without an independent bank lead to the conclusion that the effect of the proposal upon competition would be adverse. PEOPLES NATIONAL BANK & TRUST CO. OF BAY CITY, BAY CITY, MICH., AND STATE BANK OF LIN WOOD, LINWOOD, MICH. Banking offices Name of bank and type of transaction Total assets To be operated In operation State Bank of Linwood, Linwood, Mich.., with and Peoples National Bank & Trust Go. of Bay City, Bay City, Mich. (14641), which had merged Apr. 25, 1964, under charter and title of the latter bank (14641). The merged bank at the date of merger had COMPTROLLER S DECISION On February 28, 1964, the $101 million Peoples National Bank & Trust Co. of Bay City, Bay City, Mich., and the $3.6 million State Bank of Linwood, Linwood, Mich., applied to the Comptroller of the Currency for permssion to merge under the charter and with the title of the former. Bay City, with a population of about 55,000 inhabitants, is the retail and wholesale center of a service area of about 88,000. It is located approximately 100 miles north of Detroit in the northeast portion of an 94 $3, 542, 358 1 99,150, 775 7 102, 693,133 8 area known as the Saginaw-Bay City-Midland region, and is served by the port of Bay City, which, in terms of gross tonnage, is one of the principal ports on the Great Lakes. Industry in Bay City is diversified and includes the manufacturing of such products as cranes, naval vessels, freighters., power shovels, and automobile parts. The Chevrolet Division of General Motors is the largest employer in the area. Surrounding Bay City on the east, south, and southwest is a rich agricultural section producing large quantities of sugarbeets, potatoes, beans, and cantaloups. Linwood, located in the same trade area as Bay City, is about 13 miles north of Bay City. The economy of the area is primarily agricultural, producing crops of sugarbeets, beans, wheat, and cucumbers. A large number of its inhabitants commute to Bay City, Midland, and Saginaw to work in the plants of Dow Chemical and General Motors. The charter bank is a full-service institution, operating five branches in the Bay City area and one branch, Pinconning, about 22 miles north of the main office. It is the largest of the three commercial banks in the area. The other commercial bank in Bay City, the $25 million Bay City Bank, has two branches. The merging bank is the only bank in Linwood. It offers neither trust services nor consumer credit. Moreover, it suffers a management problem. The proposed merger will be of primary benefit to the Linwood area public. Whereas the bank in Linwood is too small to serve the needs of the area, the resulting bank will bring modern banking services to the community and will act as a stimulant to the local economy. In addition to making trust services and expanded commercial and consumer credit available, the consummation of the proposed merger will solve the management succession problem facing the merging bank. As there is very little competition between the charter and merging banks, the merger will not alter the competitive banking structure in the Bay City area to any significant degree. Bay City Bank, and a local savings and loan association with withdrawable accounts of $40 million, will continue to offer competition. Applying the statutory criteria to the proposed merger, we conclude that it is in the public interest and the application is, therefore, approved. APRIL 24, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL The proposed merger of State Bank of Linwood, Linwood, Mich., into Peoples National Bank & Trust Co. of Bay City, Bay City, Mich., would eliminate some competition presently existing between the two banks. More significantly, it would increase National Bank's share of total IPC deposits to 80 percent and of loans and discounts to 77 percent, thus seriously threatening the only other bank now competing with National Bank in the Bay City area. Because of the cumulative effect of prior mergers in the Bay City area and the excessive concentration already existing there, the effect of the proposed merger between these two banks would appear to be seriously adverse to competition. THE PENNSYLVANIA NATIONAL BANK & TRUST CO. OF POTTSVILLE, POTTSVILLE, PA., AND THE UNION NATIONAL BANK OF MAHANOY CITY, MAHANOY, PA. Banking offices Name of bank and type of transaction Total assets To be In operation The Union National Bank of Mahanoy City, Mahanoy City, Pa. (3997), with. . . . and the Pennsylvania National Bank & Trust Co. of Pottsville, Pottsville, Pa. (1663), which had merged May 8, 1964., under charter and title of the latter bank (1663). The merged tank at the date of merger had COMPTROLLER S DECISION On February 24, 1964, the $36 million Pennsylvania National Bank & Trust Co. of Pottsville, Pottsville, Pa., and the $13 million Union National Bank of Mahanoy City, Mahanoy City, Pa., applied to the Comptroller of the Currency to merge under the charter with the title of the former. The applicant banks are located in Schuylkill County, Pa., approximately 90 road miles northwest of Philadelphia. The economy of Schuylkill County operated $13,951,362 2 37, 526, 608 7 51, 477, 970 9 was long dominated by the mining of anthracite coal. When this industry began to suffer a decline some 30 years ago, the local economy suffered. Accordingly, the population of Schuylkill County has declined from 228,331 in 1940 to 173,027 at the present time. However, great efforts have resulted in the development of a diversified economy. Aluminum processing, the fabrication of steel products and cigar manufacturing are now major industries. The Charter Bank's head office is located in Pottsville, the seat and largest city, population 21,659 of 95 Schuylkill County. It operates 5 in-county branches and 1 branch in Columbia County. At present, it competes aggressively with the 25 banks located within the trade area which closely approximates the boundaries of Schuylkill County. The $13 million Merging Bank has its head office in Mahanoy City some 13 miles from Pottsville. Broad Mountain is situated directly between these two cities and its barrier effect tends to sever them from each other. The result is that virtually no competition exists between the two banks. Mahanoy City experienced a population decline to 8,536 from 10,934 in the past decade. It is estimated that 1,400 of its present inhabitants receive some form of public assistance. This picture is brightened by the employment of 1,000 men in the surrounding coal fields and 540 in a cigar plant. The Charter Bank has actively participated in the strenuous efforts being made to develop new industry in the area. Twenty-five percent of its loan portfolio is in local industrial and commercial loans as against 3 percent for the Merging Bank. Because of its lending limit the Charter Blank has been forced to participate three recent loans. The $50 million Resulting Bank will continue to operate the Merging Bank's two offices as branches. The merger will also provide a stronger local bank to meet the intense competition which will be introduced by the merger of the small Schuylkill Trust Co. into the $198 million Berks County Trust Co. whose home office is Reading, Pa. It will solve the acute management problem now facing the Merging Bank. Its three executive officers have all passed retirement age and now wish to retire. Applying the statutory criteria to the proposal, we conclude that it is in the public interest and the application is therefore approved. MAY 1, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL This proposal would extend Pennsylvania National's service area to all of Schuylkill County, Pa., and would give it a countywide dominance. Moreover, the survival of the American Bank, Union's only competitor in Mahanoy City, as a vital competitive factor would be greatly jeopardized. The proposed merger would appear to have a significantly adverse effect upon competition. LAFAYETTE NATIONAL BANK, LAFAYETTE, IND., AND THE BANK OF DAYTON, DAYTON, IND. Banking offices Name of bank and type of transaction Total assets In operation Bank of Dayton, Dayton, Ind., with was purchased May 9, 1964, by Lafayette National Bank, Lafayette, Ind. (14175), which had After the purchase was effected, the receiving bank had COMPTROLLER'S DECISION On March 4, 1964, the $46.9 million Lafayette National Bank, Lafayette, Ind., applied to the Comptroller of the Currency for permission to purchase the assets and assume the liabilities of the $1.9 million Bank of Dayton, Dayton, Ind. Lafayette, with a population in excess of 42,000 inhabitants, is the hub of the rich agricultural area of northern Indiana. Adjacent West Lafayette has a permanent population of over 12,000 inhabitants and a student population of 15,000 attending Purdue University. While the economy of Lafayette is based primarily on agriculture, some 15 industries contribute to 96 To be operated $1,385,916 1 46, 905, 000 48, 429, 000 4 5 its viability. In addition to the purchasing bank, Lafayette is served by the $49.7 million Purdue National Bank of Lafayette, the $22.9 million Lafayette Loan & Trust Co., and the $13.5 million Lafayette Savings Bank. Dayton, located about 8 miles southeast of Lafayette, has a population of about 500 inhabitants who depend primarily on agriculture for their livelihood. Some residents of Dayton commute to and work in industrial plants in nearby Lafayette. The Lafayette National Bank operates two branches in Lafayette, one branch in West Lafayette, and has an additional branch under construction in West Lafay- ette. With adequate capital and strong management, it offers a full line of banking services. The Bank of Dayton operates no branches and is the only bank in Dayton. Nearly all its customers are residents of Dayton and the surrounding agricultural area. The lack of successor management personnel qualified to operate the bank is one of the principal reasons prompting its board of directors to approve the sale. As there is virtually no competition between Lafayette National Bank and the Bank of Dayton, the effect of the purchase and assumption on the area banking structure will not be noticed; the buying bank will remain the second largest bank in Lafayette. A significant change will, of course, take place in Dayton where the selling bank will be replaced by a well-run branch bank offering modern, low-cost, banking services and assistance in community promotion. Among the services which will be offered in Dayton for the first time will be consumer loans of all kinds, trust services, more efficient handling of items, and in- creased credit supplied by the much greater capital structure of the purchasing bank. Applying the statutory criteria to the proposed purchase and assumption, we conclude that it is in the public interest and the application is therefore approved. May 1,1964. SUMMARY OF REPORT BY ATTORNEY GENERAL The acquiring bank^ Lafayette National, with 25.8 percent of total IPG deposits and 24.2 percent of total loans, is the second largest bank in its service area which comprises Lafayette and West Lafayette Counties. The bank of Dayton is a unit bank located in a town of 503 population some 8 miles from Lafayette. The competition between the participating banks appears to be minimal and the proposed acquisition of the Bank of Dayton by Lafayette National will not significantly affect the latter's market position. The effect of the proposed purchase of assets and assumption of liabilities on competition will not be significantly adverse. FIRST|NATIONAL BANK & TRUST CO. IN WAYNESBORO, WAYNESBORO, PA., AND THE FIRST NATIONAL BANK, BLUE RIDGE SUMMIT, PA. Banking offices Name of bank and type of transaction «m Total assets In operation To be operated » •* The First National Bank of Blue Ridge Summit, Blue Ridge Summit, Pa. (12281), with and First National Bank & Trust Co. in Waynesboro, Waynesboro, Pa. (11866), which had merged May 9, 1964, under the charter and title of the latter bank (11866). The merged bank at the date of merger had COMPTROLLER S DECISION On March 4, 1964, the $20.1 million First National Bank & Trust Co. in Waynesboro, Waynesboro, Pa., and the $4.4 million First National Bank of Blue Ridge Summit, Blue Ridge Summit, Pa., applied to the Comptroller of the Currency for permission to merge under the charter of the former and with the title, "First National Bank and Trust Company." Waynesboro is a community of 10,600 which serves an estimated additional population of 10,000 within a 10-mile radius. It is an industrial and commercial trade center in an agricultural region in southern Pennsylvania. Blue Ridge Summit is a small mountain community $4, 432, 923 1 19,757,539 1 24,190,461 2 located about 6 miles southeast of Waynesboro. It has a population of 500 permanent residents augmented during the summer months by tourists from Baltimore and Washington. The community is included in the general trade area of Waynesboro. Nearby Fort Ritchie maintains large numbers of military personnel and their families who contribute to the local economy. The First National Bank & Trust Co. is a fullservice bank and the larger of two commercial banks in Waynesboro. It also experiences competition in its trade area from larger banks in Chambersburg, Pa., and in Frederick and Hagerstown, Md. Other banks in Mont Alto, Pa., and Greencastle, Pa., offer additional competition. 97 The merging bank is the only bank in Blue Ridge Summit. With a lending limit of $30,000, the bank has, in recent years, participated in a number of loans with the charter bank. It offers no trust services. Although some competition between the two banks will be eliminated by the merger, there will be no tendency toward monopoly since the resulting institution will still face competition from banks in Waynesboro and in surrounding communities. Bank services in the merging bank's trade area will be improved through the introduction of trust services, consumer credit, and a higher lending limit. Moreover, operating efficiencies will be achieved by both banks through the joint use of equipment. The pooling of managerial personnel will meet a latent succession problem beginning to appear in both banks. Applying the statutory criteria, we conclude that the merger is in the public interest and, therefore, the merger is approved. MAY 1, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL The First National Bank & Trust Co. in Waynesboro, the town's largest bank with assets of over $20 million, deposits of over $16 million and loans of over $9 million, proposed to acquire the First National Bank of Blue Ridge Summit, the only bank in a town 6 miles distant from Waynesboro. The latter had, as of December 31, 1963, total assets of $4,366,000, total deposits of $4,008,000, and net loans and discounts of $1,987,000. Both banks operate no branches, provide normal banking services on a relatively limited scale, except that the latter does not maintain a trust department. The merger would eliminate competition between the merging banks and increase the dominant position of the Waynesboro bank in the immediate service area. However, a number of banks will remain as alternate sources of banking services in Waynesboro and surrounding areas. The effect of the merger on competition in the Waynesboro area would be adverse but in the larger areas not substantially adverse. CHERRY HILL NATIONAL BANK, CHERRY HILL, N.J., AND FIRST CAMDEN NATIONAL BANK & TRUST CO., CAMDEN, N.J. Banking offices Total assets Name of bank and type of transaction In operation Cherry Hill National Bank, Cherry Hill, N.J. (14936), with and First Camden National Bank & Trust Co., Camden, N.J. (1209), which had merged May 15, 1964, under charter and title of the latter bank (1209). The merged bank at the date of merger had COMPTROLLER S DECISION On March 12, 1964, the $175.8 million First Camden National Bank & Trust Co. of Camden, Camden, N.J., and the $8.9 million Cherry Hill National Bank, of Cherry Hill, N.J., applied to the Comptroller of the Currency for permission to merge under the charter and title of the former. Camden County, in which the applicants are situated, forms part of the metropolitan Philadelphia complex. The county has enjoyed a rapid industrial and residential expansion in the past decade. The city of Camden, population 117,000 while following the national urban pattern of decreasing population, is a highly diversified and important industrial center with excellent transportation, manufacturing, and maritime To be operated $7, 424, 859 3 169,477,653 13 176,902,512 16 facilities. Cherry Hill, a residential suburb of the city of Camden, has exhibited excellent growth over the past decade with its population increasing from 12,000 to 40,000. Cherry Hill Mall, a regional shopping center situated in Cherry Hill, has attracted national attention and has been instrumental in bringing both new business and new residents to the township. Prospects for further expansion in the area seem favorable. The charter bank, a regional bank with 10 offices located in Camden County and 1 in Philadelphia, serves that half of the metropolitan Philadelphia area comprised of Philadelphia and 3 adjacent New Jersey counties. A highly competitive banking structure has evolved in that area with 53 commercial banks, ranging in size from the $1.46 billion First Pennsylvania Banking & Trust Co. to the $1.2 million Marian Bank & Trust Co., and hundreds of nonbank financial institutions, such as savings and loan associations, insurance companies, and sales finance companies. The merging bank, with its two branches, is the smallest unaffiliated bank serving Cherry Hill and adjacent communities. Until recently, the merging bank's excellent location in Cherry Hill Mall enabled it to withstand strong competitive pressures from the Camden Trust Co., the largest bank in southern New Jersey, which heretofore had only one branch situated on the periphery of Cherry Hill. Due to a pending acquisition, however, Camden Trust Co. will soon have two more branches operating in Cherry Hill, thus transforming the present competitive structure. The proposed merger should restore the competitive balance. Competition between the applicants is minimal. The charter bank has retained or acquired the business of those primarily interested in the special services of a regional bank while the merging bank has acquired the business of those primarily interested in the convenience of a local bank. This latter category includes the residents and smaller commercial establishments in the Cherry Hill area. While the merging bank has been an aggressive, competing element in the banking structure of its area, it has been unable to provide adequately for the pressing demands resulting from the extraordinary growth of its community. The bank has been unable to respond to numerous demands for loans in excess of its present lending limit of $60,000. Its small resources have inhibited new, convenient financing and trust services, as well as expanded housing loans. Applying the statutory criteria to the proposed merger, we conclude that it is in the public interest and the application is, therefore, approved. MAY 13, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL First Camden was established in 1812 and is the second largest of 10 banks in Camden County, being only slightly smaller than the Camden Trust Co. It has 10 offices in Camden County and 1 in Philadelphia and, as of December 31, 1963, had total assets of $175,898,000, total deposits of $156,376,000, net loans and discounts of $100,082,000, and total capital accounts of $10,415,000. Cherry Hill National, chartered in 1961, has three banking offices, all of which are located in Cherry Hill. As of December 31, 1963, it had total assets of $8,951,000, total deposits of $7,822,000, net loans and discounts of $4,541,000, and total capital accounts of $784,000. Commercial banking in Camden County is already highly concentrated, with First Camden and Camden Trust Co. holding 74.19 percent of the deposits and 80.98 percent of the loans held by all banks in the county. In addition, these two banks have 23 of the 42 banking offices presently located in the county. In view of the direct competition which would be eliminated and the increase in the already high level of concentration in Camden County banking which would result, it is our opinion that the effect of the proposed merger on competition would be seriously adverse. FIRST BANK & TRUST CO., NATIONAL ASSOCIATION, FORDS, N.J., AND WOODBRIDGE NATIONAL BANK, WOODBRIDGE, N.J. Banking offices Total assets Name of bank and type of transaction To be operated In operation Woodbridge National Bank. Woodbridge, N.J. (14378), with and First Bank & Trust Co., National Association, Fords, N.J. (15255), which had ' merged May 15, 1964, under the charter and title of the latter bank (15255). The merged bank at the date of merger had COMPTROLLER S DECISION On March 11, 1964, the $59.8 million First Bank & Trust Co., National Association, Fords, N.J., and $24,786,119 3 65, 568, 994 85, 733, 774 6 the $25.3 million Woodbridge National Bank, Woodbridge, N.J., applied to the Comptroller of the Currency for permission to merge under the charter and with the title of the former. 99 Fords, with a population in excess of 12,000, and Woodbridge Township, with an estimated population of 80,000, are located in the densely populated northern portion of Middlesex County, N.J., about 25 miles from New York City. Fast commuter train service and accessibility to the New Jersey Turnpike and the Garden State Parkway permit a large number of people in this area to work in New York, and contribute to the area's residential and industrial growth. Such national industries as metals, chemicals, electronics, and petroleum processing furnish employment to many local inhabitants. First Bank & Trust Co., National Association, a fullservice institution with a branch in Perth Amboy and another in the town of Avenel, is the largest of 20 commercial banks in Middlesex County. Competition in the county stems from 18 other banks with 37 offices, exclusive of those of the merging bank. The charter bank holds about 13.1 percent of county deposits, while its largest competitors the $49.2 million First National Bank of Middlesex County, South River, and the $50.6 million National Bank of New Jersey, New Brunswick, hold 11.3 and 10.9 percent of deposits, respectively. Woodbridge National Bank, operating one branch at Avenel and another at Islin, maintains its home office in Woodbridge, about 2.4 miles from Fords. Approximately 99 percent of the merging bank's stock is owned by the bank's president, whose family has the controlling interest in the charter bank. The same man is also the president of the charter bank. Prior to the stock acquisition by the present owner, the merging bank had been reluctant to offer a full line of banking services, and although it had trust powers, it did not exercise them. Since the participating banks are already on a cooperative basis due to their common ownership, consummation of the proposed merger will hardly reduce competition between them. No adverse effects of this proposal are foreseeable in view of the extensive competition from numerous other commercial banks in the same and adjoining counties. Moreover, 2 savings banks with deposits aggregating $134.9 million and 14 savings and loan associations with share accounts of $86 million afford substantial additional competition. The resulting bank will realize significant savings through more efficient use of bank operations and man- 300 agement. Consequently, it will be in a better position to serve the expanding* industrial and commercial needs of one of the fastest growing counties in New Jersey. Applying the statutory criteria to the above facts, we conclude that the proposed merger is in the public interest, and, the application is therefore approved. MAY 13, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL First Bank & Trust Co.. is the largest bank in its service area. As of January 31, 1964, its assets were $59,802,997, deposits $53,695,800, and loans and discounts $28,234,261. Woodbridge National Bank is located 2.4 miles from First Bank & Trust Co. As of January 31, 1964, its assets were $25,340,724, deposits $22,988,450, and loans and discounts $9,859,952. The application states direct competition between the two banks is not substantial, based on the fact that the president of First Bank & Trust Co. purchased approximately 99 percent of the stock of Woodbridge National Bank in January of 1964. This Department cannot accept the premise that because of this stock purchase direct competition which may have existed prior to such stock purchase is no longer relevant. The application contains no data relating to common depositors or borrowers, nor any data reflecting the deposits and loans each bank obtained from the service area of the other. It is obvious, however, that substantial competition would exist between the merging banks, except for common ownership. The effect of the merger would, of course, eliminate this competition for all time. The application lists 20 banks (including the participating banks) in Middlesex County, which the application states is the major competitive area. First Bank & Trust Co. is presently the largest of these banks and after the proposed merger the resulting bank will be roughly double the size of the number two bank, measured by deposits and loans. Its present competitive advantage over each of these banks in Middlesex County will be sharply enhanced after the proposed merger. It is our view that the effect of this proposed merger on competition will be substantially adverse. T H E CAROLINA BANK, GRANITF,VILLE, S.C., AND THE CITIZENS & SOUTHERN NATIONAL BANK OF SOUTH CAROLINA, CHARLESTON, S.C. Banking offices Name of bank and type of transaction Total assets In operation Carolina Bank, Graniteville, S.G., with and the Citizens & Southern National Bank of South Carolina, Charleston, S.C. (14425), which had merged May 23, 1964, under the charter and title of the latter bank (14425). The merged bank at: the date of merger had COMPTROLLER S DECISION On March 16, 1964, the $164.8 million Citizens & Southern National Bank of South Carolina, Charleston, S.C, and the $2.5 million Carolina Bank, Graniteville, S.C, applied to the Comptroller of the Currency for permission to merge under the charter and with the title of the former. The charter bank operates in three principal areas comprising 12 communities in South Carolina: The Charleston area, with a population of 230,000, is located in the southeastern section of the State; the Columbia area, with a population of 200,000, is located in the central section; and the Spartanburg area, with a population of 157,000, is located in the northwestern section. Since the charter bank operates offices throughout the greater portion of the State, its area of activity has a diversified economic base which has been changing from an agricultural to an industrial orientation. Federal Government activity is an important factor in the economy of the Charleston and Columbia areas, while in the SpartanburgFlorence area? the economy is based on agriculture and industry. The merging bank is located in Graniteville, which is an unincorporated community near Augusta, Ga., in the western portion of South Carolina with a service area population of 7,500. Its economy is based primarily on the textile industry which employs more than 2,000 area residents. The charter bank is the second largest bank in South Carolina, operating 7.3 percent of the State's commercial banking offices and holding 12.6 percent of the total deposits. It is approximately one-half the size of the State's largest bank and twice the size of the third largest bank. The charter bank's offices closest to the merging bank are 75 miles away in the Columbia area. There are no known common deposit or loan accounts and neither bank has shared nor placed any loans with the other during the preceding year. $2, 432, 227 167,853,862 To be operated 2 26 170,155,052 28 Although the merging bank is the only bank in Graniteville, its small size puts it at a competitive disadvantage with larger banks located in Aiken, S.C, and Augusta, Ga., 6 and 11 miles distant, respectively. In addition, savings and loan associations, sales finance and personal loan companies, life insurnce companies, credit unions and direct lending agencies of the Government presently offer competition in the service areas of the merging and charter bank. Considering the proximity of other banks as well as the presence of these institutions, alternative sources of credit are readily available to the residents. Primary benefit to the residents of the GranitevilleNorth Augusta area will be the addition of an aggressive, efficiently run, full-service bank, operated by experienced and competent management. The modern, automated equipment and efficient operating procedures of Citizens should substantially lower service costs to the customers of the bank. The residents will also benefit from the trust department services of the charter bank since trust services are not presently being offered by the merging bank. Applying the statutory criteria to the proposal, we conclude that it is in the public interest and the application is, therefore, approved. MAY 14, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL Citizens & Southern is the second largest of 4 statewide commercial banks in South Carolina with about 14 percent of the State's deposits and 24 offices located in 7 different areas in the State. At the present time it has pending a separate application to merge with a unit bank in northeast South Carolina. Carolina Bank has two offices located in Graniteville and North Augusta, S.C, respectively, about 60 miles southwest of Citizens & Southern's nearest offices in Columbia, S.C. Its total deposits are $2,192,000, less 101 than 1 percent of the total deposits of all banks in the State. There appears to be no actual competition between the merging banks due to the distance which separates their respective offices. Carolina Bank is the only bank in Graniteville, but its branch in North Augusta faces competition from North Augusta Banking Co., which operates the only other bank office in that community. The merger, therefore, would subject North Augusta Banking Co., with deposits of only $4,338,000, to direct competition with a branch of the much larger Citizen & Southern system, At the same time it would constitute one more step in a series of acquisitions by the four largest South Carolina banks which threatens to transform the State's banking industry into a small number of giant, statewide institutions. We conclude that the proposed merger, standing alone, would not have a significant adverse effect upon competition but as part of a trend toward further concentration is adverse. THE CITIZENS & SOUTHERN NATIONAL BANK OF SOUTH CAROLINA, CHARLESTON, S.C., AND CITIZENS BANK OF DARLINGTON, DARLINGTON, S.C. Banking offices Name of bank and type of transaction Total assets Citizens Bank of Darlington, Darlington, S.C, with and the Citizens & Southern National Bank of South Carolina, Charleston, S.C. (14425), which had merged May 23, 1964, under charter and title of the latter bank (14425). The merged bank at the date of merger had COMPTROLLER'S DECISION On March 19, 1964, the $166.5 million Citizens & Southern National Bank of South Carolina, Charleston, S.C, and the $5.7 million Citizens Bank of Darlington, Darlington, S.C, applied to the Comptroller of the Currency for permission to merge under the charter and with the title of the former. Charleston, with a population of 66,000, located in Charleston County with a population in excess of 216,000, is an important South Atlantic port and military center. Its excellent harbor facilities attract considerable international trade and provide a repair station for both commercial and naval ships. Large quantities of the State's agricultural products and seafoods are marketed in Charleston. The pace of industrial activity is reflected in the doubling of the value of manufactured products during the past 10 years. Darlington, seat of Darlington County, is located in the northeastern part of the State. Its population is in excess of 6,700 and the county population is over 53,000. Industry in Darlington consists of an electronics manufacturing plant, employing about 1,100 people, a paper-cup plant, a veneer plant, and a small manufacturer of women's apparel. The surrounding rural area is devoted principally to cotton, tobacco, and soybean cultivation. 102 In operation To be operated $5,611,686 2 170,155, 052 28 175,735,790 30 Citizens & Southern National Bank is the second largest of four statewide commercial banks in South Carolina. It maintains its principal office in Charleston and has 23 branches located in 7 different areas in the State, including 2 branch offices in Florence, 10 miles southeast of Darlington. Its two largest competitors are the $335.8 million South Carolina National Bank of Charleston and the $115 million First National Bank of South Carolina in Columbia. The bank's only competitor in Darlington was recently acquired as a branch by the First National Bank of South Carolina. Other competition is offered by four branches of South Carolina National Bank and by the Guaranty Bank & Trust Co. with its main office and two branches in nearby Florence. Since there is virtually no competition between the applicant banks, consummation of the proposed merger will not reduce competition nor serve to promote monopoly. Moreover, the people of Darlington will have available the modern banking services of another statewide institution, further stimulating competition in the area. Availability of the charter bank's personnel will insure continued good management. Applying the statutory criteria to the proposed merger, we conclude that it is in the public interest and the application is therefore approved. MAY 15, 1964. tion and remaining unit banks in nearby communities have been subjected to direct competition with offices of much more powerful institutions. The proposed merger is the most recent in this process, which, if unchecked, threatens to concentrate South Carolina's banking resources in a small number of large branch systems. This application was made shortly after, and appears to be a direct result of, an application by one of Citizens & Southern's closest competitors to acquire the other Darlington bank. Together with the latter acquisition, the proposed merger would tend to motivate the other statewide systems to respond with similar acquisitions, and those smaller banks now in most direct competition with Citizens might consider such a proposal to insure their survival in competition with Citizens & Southern. At the same time the merger would eliminate some direct competition between the applicants in the Darlington-Florence area, where Citizens has about 13 percent, and Citizens & Southern about 9 percent, of the area's deposits, If the merger is approved, in less than 3 years that area will have lost three of its four local, independent banks through mergers with statewide systems. In view of the bank merger history in South Carolina, the proposed merger threatens to have a serious adverse effect upon competition and may aggravate the trend toward oligopoly and monopoly in that State. SUMMARY OF REPORT BY ATTORNEY GENERAL Citizens & Southern is the second largest of 4 statewide commercial banks in South Carolina with about 14 percent of the State's deposits and 24 offices located in 7 different areas in the State. At the present time it also has pending a separate application to merge with a small bank in southwest South Carolina. Citizens has two offices located in Darlington, S.C, about 10 miles northwest of Citizens & Southern's nearest two offices in Florence, S.C. Its total deposits are $5,124,000, about 0.4 percent of the total deposits of all banks in the State. There is some direct competition between the merging banks due to the proximity of their respective offices in the Darlington-Florence area. South Carolina's banking resources are highly concentrated in the four large statewide institutions, which together control 54 percent of the State's total deposits, partly as a result of prior mergers. These 4 banks have acquired 24 smaller banks in the past decade and at the same time have been opening numerous de novo branch offices. Such acquisitions by one of the four dominant banks have often led directly to a similar acquisition by one of the others, with the result that the only independent banks in a number of South Carolina communities have been eliminated from competi- THE BANK OF ROWLAND, ROWLAND, M.C., AND SOUTHERN NATIONAL BANK OF NORTH CAROLINA, LUMBERTON, N.C. Banking offices Name of bank and type of transaction Total assets The Bank of Rowland, Rowland, N.C, with and Southern National Bank of North Carolina, Lumberton, N.C. (10610), which had merged May 23, 1964, under charter and title of the latter bank (10610). The merged bank at the date of merger had COMPTROLLER'S DECISION On March 17, 1964, the $32.1 million Southern National Bank of North Carolina, Lumberton, N.C, and the $3.8 million Bank of Rowland, Rowland, N.C, applied to the Comptroller of the Currency for permission to merge under the charter and title of the former. The applicant banks are located in Robeson County in south central North Carolina. Rowland, site of the In operation To be operated $3, 858, 503 1 32, 695, 056 14 35, 908, 303 15 only office of the Bank of Rowland, has a population of 1,500 and is 3 miles north of the South Carolina border. Lumberton, county seat of Robeson County and site of the main office of the charter bank, has a population of 15,300 and is 16 miles northeast of Rowland. Southern National operates 13 offices in 6 south central counties of North Carolina. No Southern National branch is closer to the Bank of Rowland than the Fairmont branch, which is 13 miles east of Rowland. 103 The area served by the applicant banks derives its primary economic support from agriculture, principally tobacco and cotton crops, and from an expanding textile industry. The area has definite prospects for development, as several of the Nation's largest textile manufacturers have been expanding in an area slightly north of Lumberton and Rowland. Fort Bragg, the largest military installation in the county in land area, is within Southern National's service area. Southern National Bank has grown 250 percent over the past 5 years which is indicative of dynamic and aggressive management. As a result of this merger, the increased size of Southern National Bank will allow it to compete even more effectively over a wider area with the $381 million First Union National Bank of North Carolina and the $43 million Waccamaw Bank & Trust Co., both with area offices in Lumberton, N.G. The presence of a third banking unit of substantial size in the area, especially one which has exhibited great internal growth in the recent past, will provide this expanding community with another choice which will stimulate competition. Applying the statutory criteria to the proposed merger, we conclude that it is in the public interest and the application is, therefore, approved. MAY 18, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL Southern National Bank of Lumberton, N.G., proposes to acquire by merger Bank of Rowland, Rowland, N.G. Southern National was organized in 1897 and has never been involved in a merger. It operates eight offices and has total resources of $32 million. Bank of Rowland was organized in 1903 and has never been involved in a merger. It has one office and is the only bank in Rowland and it has total resources of $3,800,000. While the proposed merger of these two banks does not appear to have a significant effect on competition, the continuing trend toward concentration in commercial banking in North Carolina, which has seen the three largest banks in the State account for 85 percent of the resources acquired by merger in a 3year period, is a matter of serious concern and may lead to the substantial lessening of competition and tendency toward monopoly condemned by the CellerKefauver Act. SALMON FALLS BANK, ROLLINSFORD, N.H., AND THE FIRST NATIONAL BANK OF SOMERSWORTH, SOMERSWORTH, N.H. Banking offices Name of bank and type of transaction Total assets Salmon Falls Bank, Rollinsford, N.H., with and the First National Bank of Somersworth, Somersworth, N.H. (1180), which had merged May 29,1964, under the charter of the latter bank (1180) and under the title "First Somersworth-Rollinsford National Bank." The merged bank at the date of merger had COMPTROLLER'S DECISION On March 9, 1964, the $700,000 Salmon Falls Bank, Rollinsford, N.H., and the $1.4 million First National Bank of Somersworth, Somersworth, N.H., applied to the Comptroller of the Currency to merge under the charter of the latter and with the title "The First Somersworth-Rollinsford National Bank." The applicant banks are located in Rollinsford, population 1,935, and Somersworth, population 8,529. The two towns are 4 miles apart and are situated in the southeastern area of the State. Somersworth is 104 In operation To be operated $719, 560 1 1 331 195 1 2, 050, 756 2 an industrial town where a division of the General Electric Co. provides employment for 1,500 people. Rollinsford, also an industrial town, has 2 shoe factories that employ 550 people. The merging and charter banks, along with five others banks led by the $6.5 million First National Bank of Rochester and the $3.8 million Strafford National Bank of Dover, serve the same area. Of these seven banks, the applicants are the smallest. The resulting bank will be able to procure a banking house with an adequate vault and sufficient space for improved customer service and bank operations, all of which are now lacking in the present quarters of both applicants. Applying the statutory criteria to the proposed merger, we conclude: that it is in the public interest and it is therefore approved. MAY 11, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL The Salmon Falls Bank, with $497,000 in deposits and $294,000 in loans, has 1.8 and 2 percent, respectively, of the total deposits and loans of all seven commercial banks which compete in its service area. The First National Bank of Somersworth, with $1,023,000 in deposits and $729,000 in loans, has 3.8 and 5 percent of the total deposits and loans. Each of the merging banks is smaller than the other five banks and the resulting bank, with 5.6 percent of deposits and 7 percent of loans, would be the smallest commercial bank in the service area. The merger's elimination of the Salmon Falls Bank as an independent bank does not appear significant in the context of the available banking resources in the relevant market. We conclude, therefore, that the proposed merger will have no substantial adverse effects upon competition. MICHIGAN NATIONAL BANK, LANSING, MICH., AND CITIZENS INDUSTRIAL BANK, GRAND RAPIDS, MICH. Banking offices Name of bank and type of transaction Total assets Citizens Industrial Bank, Grand Rapids, Mich., with was purchased June 15, 1964, by the Michigan National Bank, Lansing, Mich. (14032), which had „ After the purchase was effected, the receiving bank had COMPTROLLER S DECISION On April 1, 1964, the $737 million Michigan National Bank, Lansing, Mich., applied to the Comptroller of the Currency for permission to purchase the assets and assume the liabilities of the $2.4 million Citizens Industrial Bank, Grand Rapids, Mich. The purchasing bank, with headquarters in Lansing, has a total of 18 offices in the State, including 1 in Grand Rapids. Grand Rapids, a city of 202,000, was formerly known as the furniture capital of the world. While the importance of that industry has declined in recent years, diversified manufacturing, especially the fabrication of automobile parts, has assumed greater importance. Banking competition in Grand Rapids is active. In addition to the charter bank, which is located 65 miles from Grand Rapids and is thus prohibited from establishing another branch in Grand Rapids by Michigan law limiting establishment of new branches to a 25-mile radius of the home office, there are four other banks: the $323 million Old Kent Bank & Trust Co., with 29 branches; the $118 million Union Bank & Trust Co., with 19 branches; the $22.6 million Central Bank with 6 branches; and the $2.4 million selling bank. The selling bank operates no branches and, following con- In operation To be operated $2,193,000 1 737, 442, 000 739,131,079 19 19 summation of this transaction, its existing office will be closed. The selling bank has made no progress in the last decade and the avowed purpose of this sale is to permit it to terminate its operations with minimum inconvenience to its depositors and borrowers. Since the bank holds only one-quarter of 1 percent of the deposits in Grand Rapids and more than 50 banking offices will still serve the city after the transaction, this sale will have no adverse effect on competition. The transaction is therefore approved. JUNE 1, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL Excluding Detroit banks, Michigan National is the largest bank in Michigan (reported total assets of $737,442,000 as of December 20, 1963). It is twice as large as its nearest rival in Grand Rapids, Old Kent Bank & Trust Co. Its growth from a one-city operation to a statewide institution is marked in large part by acquisitions of other banks, no less than 9 in a span of 18 years. The application, sparse in economic information, furnishes no statistics from which to judge Michigan National's exact position competitionwise in the Grand 105 Rapids service area. On the basis of size alone, however, it is dominant. The acquisition must be examined against the backdrop of Michigan National's growth through acquisition of other banks and the workings of its employees trust fund. Michigan National's full status as a bank- ing power, then, is not immediately discernible. A definite trend toward monopolization is indicated, and in the circumstances any acquisition, even the most innocuous, becomes suspect. The proposed acquisition is viewed as having probable adverse competitive effects. THE NATIONAL BANK OF COMMERCE OF SEATTLE, SEATTLE, WASH., ,\ND THE BANK <DF ENDICOTT, ENDICOTT, WASH. Banking offices Name of bank and type of transaction Total assets In operation The Bank of Endicott, Endicott, Wash., with was purchased June 19, 1964, by the National Bank of Commerce of Seattle, Seattle, Wash. (4375), which had After the purchase was effected, the receiving bank had COMPTROLLER'S DECISION On March 6, 1964, the $707.7 million National Bank of Commerce of Seattle, Seattle, Wash., applied to the Comptroller of the Currency for permission to purchase the assets and assume the liabilities of the $2.4 million Bank of Endicott, Endicott, Wash. Seattle, with a population of 563,000, is the largest city in the Pacific Northwest and a trade center for an economy dependent on lumbering, manufacturing, fishing, and shipping. The largest single employer is the Boeing Co. and the local economy largely fluctuates with the fortunes of Boeing. Endicott, located at the eastern end of the State 65 miles south of Spokane and 250 miles east of Seattle, has a population of 392. The local economy is heavily dependent on agriculture, predominantly wheat and barley production. The population and the local economy have not experienced any growth in recent years. The purchasing bank, with 74 branches and 19 percent of commercial deposits in Washington, is the second largest bank in the State. There are 3 other statewide banks competing with the purchasing bank, the largest of which is the $1,242 million Seattle-First National Bank with 101 branches and 35 percent of statewide deposits. The third largest bank in the State is the $273.7 million Peoples National Bank with 33 branches and 7.8 percent of deposits. The selling bank has no branches and its share of statewide deposits is less than one-tenth of 1 percent. In the past few years, the selling bank has lost business due to inflexible and unpopular management decisions. 106 To be operated $2, 049, 435 1 707, 866, 000 709, 885, 000 75 76 Moreover, the president and principal stockholder is 77 years of age and wishes to retire. Adequate successor management is not available from within or through recruitment. Consummation of the proposed purchase and assumption will not alter the relative competitive positions of the major banking institutions. On the contrary, it will give the applicant bank a branch in the eastern part of the State and will stimulate competition with the Colfax branches of the Seattle-First National Bank and the $175.7 million Old National Bank, which now serve the area. By introducing modern banking serivces into Endicott, some improvement in the local economy may be expected. Moreover, the availability of experienced personnel from the purchasing bank will eliminate the selling bank's management succession problem. Applying the statutory criteria to the proposed purchase and assumption, we conclude that it is in the public interest, and, therefore, the application is approved. JUNE 9,1964. SUMMARY OF REPORT BY ATTORNEY GENERAL In this application, the second largest commercial bank in the State of Washington, much of whose recent growth has been achieved by the acquisition of other banks, seeks to acquire a small independent bank. The acquisition would continue a merger trend in which the State's largest banks have been principal participants. It would add to the already high concentration of the State's banking resources in the hands of a few dominant banks. Finally, this acquisition would upset the relative competitive equality which now prevails among the Selling Bank and the two independent banks which offer a degree of competition to such bank. It is our opinion that this proposed acquisition, standing alone, would not have a significant adverse effect upon competition but is part of a trend toward greater and greater concentration of banking in the State of Washington. THE BANK OF CALIFORNIA NATIONAL ASSOCIATION, SAN FRANCISCO, CALIF., AND THE AMERICAN NATIONAL BANK OF SAN BERNARDINO, SAN BERNARDINO, CALIF. Banking offices Total assets Name of bank and type of transaction The American National Bank of San Bernardino, San Bernardino, Calif. (10031), with and the Bank of California, National Association, San Francisco, Calif. (9655), which had merged June 26, 1964, under charter and title of the latter bank (9655). The merged bank at the date of merger had COMPTROLLER S DECISION On March 4, 1964, the $1,007 million Bank of California National Association, San Francisco, Calif., and the $62.8 million American National Bank of San Bernardino, San Bernardino, Calif., applied to the Comptroller of the Currency for permission to merge under the charter and with the title of the former. San Francisco is considered to be the financial capital of the western United States. In addition to being the home office of the charter bank, the city contains the headquarters of three other large statewide banks, as well as other local and foreign banks. The importance of the San Francisco area as a major port, an industrial complex, a commercial center, and a cultural and educational base is attested by the rapidity of its population growth—1960 population increased 24.2 percent over 1950 to 2.7 million inhabitants—and the increase in its financial resources. With the assets of several San Francisco banks being in the billions of dollars, the addition of the merging bank's assets to those of the charter bank will clearly have a negligible effect on the banking structure in the San Francisco and northern California area. The Bank of California, founded in San Francisco in 1864, is the 6th largest bank in California and the 38th largest in the United States. It is a full service domestic bank and has an active international finance business. Through several mergers and internal growth, the bank has had a remarkable 100-percent increase in deposits from 1954 to 1963, from $441 million to $886 million. It is a geographically broad- To be operated In operation $64, 555, 815 8 1,009,630,696 43 1,074,572,714 51 based bank, with 34 offices in California, 2 offices in Washington, and 1 office in Oregon. Despite its multistate composition, the bank had limited its activities in California to the north-central part of the State until August 1963, at which time an office was established in the central business district of Los Angeles. The Los Angeles branch, while comparatively new, has met with general public approval. The principal impact of the merger will be felt in San Bernardino, the head office of the merging bank and the governmental and economic center of San Bernardino County. Adjoining Los Angeles County at its western boundary and extending to the Nevada State line on the east, San Bernardino County covers 20,131 square miles and is the largest county in the world in area. It has a warm, semiarid climate and a greatly varied topography which ranges from the lofty San Bernardino mountains to vast stretches of the arid Mojave desert. As would be expected in this large and variegated county, the economy is highly diverse with agriculture, missile development, military installations, mineral deposits, steel production, and recreation providing the main support. The population and economic activity in the county are concentrated in the city of San Bernardino and its environs, where the merging bank operates. Located in the southwestern section of San Bernardino County, the city had an estimated 1963 population of 96,400, a considerable increase in the 3-year period since the 1960 population of 92,000; projections are for similar growth in the foreseeable future. The population in the bank's service area, which includes the city and 107 certain satellite towns, jumped 63 percent from 164,350 in 1950 to 258,348 in 1960. Personal income, employment, assessed value of all property and other indicators of the area's economy show dramatic gains over the past 10 years, with forecasts of equally expansionary movement during the 1960's. The American National Bank was founded in 1916 and maintained only one office in San Bernardino for several decades. In 1943 a facility was opened at Norton Air Force Base on the outskirts of the city and since that time, six more branches have been opened in the greater San Bernardino area. An office in nearby Redlands has been approved and is expected to be in operation late in 1964. Deposits of the bank have risen 80 percent in the most recent 10-year period to $57.6 million on December 31, 1963, and loans have increased 230 percent to $40.4 million in the same period. The capable and vigorous management of the charter bank can supply the direction which the San Bernardino bank will need so badly in the coming years of expansion in the San Bernardino area. This diverse and dynamic section of southern California will indeed require strong institutions to meet the convenience and needs of its economic expansion. Agriculture on a large scale, major commercial establishments and big manufacturing concerns are a few of the industries included within the San Bernardino banking community; their needs can only be met by an institution stronger than the local bank. Branches of major California banks have come into San Bernardino to serve the area's needs, making it more necessary than ever for the merging bank to become part of a major system in order to handle its share of the commercial business. Its legal loan limit of $210,000 does not permit the bank to serve effectively some of the major industries in San Bernardino. The present size of the merger bank severely restricts loan volume. One of the principal financial requirements in San Bernardino is capital for real estate loans stemming from the influx of people into this southern California region. The merging bank has not been able to meet the demands for these loans even though its loan portfolio is at a high 70 percent of deposits. With real estate loans increasing from $2.7 million in 1954 to $36.2 million in 1963, the bank has had to sell $35 million originating in its service area to other investors because of its own financial limitations. The need for a larger capital and deposit structure is evident. The facilities of a major bank will broaden the services which the merging bank can offer in the 108 San Bernardino area. The resulting bank, for example, can offer international and stock transfer departments which the merging bank does not now have, but which the area needs. On the other hand, the merging bank has particularly strong escrow and mortgage servicing departments which the charter bank can use to complement its other operations. While the advantages of the merger to the San Bernardino community are very substantial, the competitive aspects must be examined. The merging bank is the only locally owned bank in San Bernardino. It is closely held, predominantly by San Bernardino residents. The merits of having a bank controlled by local residents is persuasive only when the bank can serve the community effectively. In the instant case, the bank now finds it difficult to recruit an effective management group and impossible to provide the capital and financial services which the San Bernardino area calls on it to supply. The purely local character of the merging bank has little value in this situation. The resulting bank will be more competitive in the San Bernardino area than the present merging bank, while no competition will be eliminated. The service areas of the applicant banks do not overlap, as the nearest branch of the charter bank is 60 miles away in Los Angeles and has only been open less than 1 year. A comparison of commercial deposits in the two banks reveals only five common customers, and these are all large regional or national firms which keep funds in the locality where they do business. No accounts of either bank originate in the service area of the other. In the State, the charter bank now has only 2.2 percent of total commercial banking deposits and its share, as a result of the merger, will increase to 2.4 percent, hardly a share of the California market which could be called concentrative. Applying the statutory criteria to the proposed merger, we conclude that it is in the public interest and the application is therefore approved. JUNE 15,1964. SUMMARY OF REPORT BY ATTORNEY GENERAL American National is a successful local bank with assets of $62,807,000, deposits of $57,647,000, loans of $39,590,000, and 213 trust accounts. Its eight offices are located in five communities in the southwestern portion of San Bernardino County about 60 miles east of Los Angeles Calif. All other bank offices in these communities are branches of large regional or statewide chain banking systems. Bank of California Is the sixth largest commercial bank In California and 38th in the Nation, with assets of $1,006,951,000, deposits of $886,003,000, loans of $522,415,000, and 4,910 trust accounts. It has 34 banking offices in California and 1 each in Portland, Oreg., and in Seattle and Tacoma, Wash. Its only office in southern California is a large new headquarters office which it established in downtown Los Angeles in August 1963. There appears to be little direct competition between American National and Bank of California because the latter's closest office is 60 miles from the communities served by American National. The merger would, however, eliminate potential competition between the applicants. Absent the merger, Bank of California could be expected to expand from its headquarters office in Los Angeles by establishing de novo branches in the growing San Bernardino area, which is the next metropolitan area east of Los Angeles. The merger would also have the undesirable effect of eliminating the only local and independent bank in the area and making San Bernardino completely dependent on branches of banks whose headquarters and major interest are elsewhere, (in San Francisco or Los Angeles). We conclude that the proposed merger would have an adverse effect upon competition. FIRST NATIONAL BANK IN CALLICOON, CALLICOON, N.Y., AND THE FIRST NATIONAL BANK OF NARROWSBURG, NARROWSBURG, N.Y. Banking offices Name of bank and type of transaction Total assets The First National Bank of Narrowsburg, Narrowsburg, N.Y. (12496), with and the First National Bank in Callicoon, Callicoon, N.Y. (13590), which had. consolidated June 30, 1964, under charter of the latter bank (13590), and under title of "United National Bank." The consolidated bank at the date of consolidation had , COMPTROLLER S DECISION On March 13, 1964, the $5.9 million First National Bank in Callicoon, Callicoon, N.Y., and the $4.1 million First National Bank of Narrowsburg, Narrowsburg, N.Y., applied to the Comptroller of the Currency to consolidate under the charter of the former and with the title "United National Bank." Callicoon, population 850, and Narrowsburg, population 600, are unincorporated municipalities situated 14 miles apart in the western part of Sullivan County, N.Y. Both are located close to the Delaware River which forms the New York-Pennsylvania boundary. The two villages are connected by State Highway 97 and the Erie-Lackawanna Railroad. The general service area within which the two banks are located is largely coterminous with Sullivan County. However, it also includes part of adjacent Wayne County, Pa. This area is predominantly rural and agricultural with dairy products and eggs as the principal products. The resort business is also important as hotels, motels, and camps proliferate $4, 322, 809 6, 122,103 10,444,912 To be operated In operation 1 1 2 throughout the Catskill Mountain area which includes Sullivan County. There are 15 commercial banks serving this general trade area. The competitive structure is dominated by the two large banks in Liberty: the $26 million Sullivan County National Bank and the $23 million Community National Bank which has applied for permission to merge with the Marine Midland National Bank of Southeastern New York of Poughkeepsie. The two banks have 41 percent of the outstanding loan and 33 percent of the deposits held by banks in this area. Among these 15 banks, the Narrowsburg bank is the smallest. Even the resulting bank will have only 6.7 percent of the total loans and 7 percent of the deposits among the area banks. There has been little competition between the applicant banks. Each has primarily served the village within which it is located and the rural area adjacent to it. Both banks do draw some business from that small area which is approximately equidistant from each. This consolidation will not disrupt the area's competitive structure. 109 The consolidation will create a bank which is far more responsive to the needs of the trade area it serves than is possible for the two applicants at present. Neither of the applicants is adequately capitalized to meet the credit requirements of its customers. Likewise, they are not large enough to provide the range of banking services demanded of them and which are regarded as commonplace in contemporary banking. This would include an active trust department, mortgage financing on standard terms, home improvement loans, as well as immediately available foreign drafts. Furthermore, a larger institution will be better able to attract and train the management personnel needed to successfully operate a bank. This need is particularly acute here since all of the Narrowsburg Bank executive officers have reached retirement age, while not a single qualified successor is available to replace any of them. Considered in the light of the relevant statutory criteria, we find the application to be in the public interest, and it is therefore approved. JUNE 22, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL The proposed consolidation would unite two banks located about 14 miles apart in the southern part of New York State. There are a number of banks in the surrounding areas but none impinges competitively on either of the applicant banks. The two applicant banks, however, have a significant degree of overlap in their service areas, and a number of common depositors and borrowers. Also each bank has a number of deposits and loans which originate in the service area of the other. The proposed consolidation would erase this banking competition. The applicants admit that there is a "growing tendency in nearby areas . . . toward the merger or consolidation of a number of banking institutions" with the result that it is becoming "more and more difficult for the smaller bank to compete effectively." This proposed consolidation would be another step in this anticompetitive trend to concentration. We therefore believe that this transaction would have an adverse competitive effect. T H E FIRST NATIONAL BANK OF ALLENTOWN, ALLENTOWN, P A . , AND MACUNGIE BANK, MACUNGIE, P A . Banking offices Total assets Name of bank and type of transaction In operation The Macungie Bank, Macungie, Pa., with and the First National Bank of Allentown, Allentown, Pa. (373), which had. . merged June 30, 1964, under charter and title of the latter bank (373). The merged bank at the date of merger had COMPTROLLER S DECISION On April 16, 1964, the $152 million First National Bank of Allentown, Allentown, Pa., and the $4.6 million Macungie Bank, Macungie, Pa., applied to the Comptroller of the Currency to merge under the charter and with the title of the former. The applicant banks are located in Lehigh County, which is part of the Allentown-Bethlehem-Easton Standard Metropolitan Statistical Area. Allentown, population 108,347, and Bethlehem, population 75,408, are adjacent to, and contiguous with, each other and are considered to be a single economic entity. Allentown has several large plants which manufacture trucks, electrical equipment, and cement, while Bethlehem is the home of the Bethlehem Steel Co. The borough of Macungie, population 1,266, is largely a 110 $4, 559, 586 155,725,088 160,284,674 To be operated 1 6 7 residential suburb adjacent to Allentown and also serves as a shopping center for its inhabitants. Nine commercial banks operating a total of 35 offices serve the Allentown-Bethlehem area. In addition to the charter bank with its 7 offices and the single-unit merging bank, there are the $104 million Merchants National Bank of Allentown, with 10 offices; the $59 million Lehigh Valley Trust Co. of Allentown, with 5 offices; the $94 million First National Bank & Trust Co. of Bethlehem, with 7 offices; and the $77 million Union Bank & Trust Co., Bethlehem, with 5 offices. Also serving this general area are the $23 million Cement National Bank of Northampton, the $12 million Fogelsville National Bank, and the $9.6 million National Bank of Topton, Eight savings and loan associations and building and loan associations provide intense competition to commercial banks in the Allentown area. These associations hold share account balances in excess of $155 million and loans of $151 million. Insurance companies, credit unions, and financial institutions in nearby Philadelphia and New York City are other important sources of competition to the commercial banks. There has been little, if any, competition between the charter and merging banks. The Macungie Bank serves almost exclusively the residents of the community in which it is situated. The bank is located in a row-type house which is totally inadequate for a modern banking business., as it has no safe deposit boxes, no drive-in window and no parking area. Seventy-one percent of its portfolio is in residential real estate loans. With this limited operation, it is evident that effective competition is not offered to the charter bank by the merging bank. This merger will cause no significant change in the banking structure of the area nor will it adversely affect any other bank. Substitution of an office of the charter bank for the merging bank in Macungie will not place the charter bank nearer to any other competing bank than it is at the present time. It will increase the charter bank's share of deposits in the area by only 1 percent. The borough of Macungie will be greatly benefited by the consummation of this transaction. The resulting bank will build a modern banking house equipped with safe deposit facilities, greatly increased floor and office space, a drive-in window, and parking facilities in the immediate vicinity of the present bank office. Furthermore, the resulting bank will offer a full range of modern banking services, including a trust department, more responsive to the needs of the area. In addition, the merging bank's acute management succession problem caused by the loss of its only full-time executive officer will be provided for by the appointment of a capable bank officer to manage the Macungie branch. Applying the statutory criteria to the proposal, we conclude that it is in the public interest and the application is therefore approved. JUNE 26, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL The proposed merger involves the uniting of a neighboring, small town bank with the largest bank in Allentown, Pa. First National Bank of Allentown already enjoys about 50 percent of the market of banks headquartered in Allentown. Two of its branch offices are among the four closest banking offices to Macungie Bank which is located 8 miles southwest of Allentown, and which is the only bank in Macungie. Both First National Bank and Macungie Bank have shown good growth trends in recent years. The proposed merger would result in adding to the already dominant position of First National Bank in Allentown and the area surrounding Allentown with probable adverse competitive effects. THE PEOPLES NATIONAL BANK OF WEST ALEXANDER, WEST ALEXANDER, PA., AND THE FIRST NATIONAL BANK OF FREDERICKTOWN, FREDERICKTOWN, PA. Banking offices Name of bank and type of transaction Total assets To be operated In operation The Peoples National Bank of West Alexander, West Alexander, Pa. (8954), with.... and the First National Bank of Fredericktown, Fredericktown, Pa. (5920), which had merged June 30, 1964, under the charter and title of the latter bank (5920). The merged bank at the date of merger had COMPTROLLER'S DECISION On April 1, 1964, the $1.8 million Peoples National Bank of West Alexander, West Alexander, Pa., and the $12.9 million First National Bank of Fredericktown, Fredericktown, Pa., applied to the Comptroller of the Currency for permission to merge under the $1, 842, 728 1 13,724,384 4 15,567,112 5 charter and title of the latter. Fredericktown, a mining village with a population of 1,270, is situated on the upper Monongahela River in southwestern Pennsylvania. It serves a trade area economically dependent upon coal mining, which employs 2,500 workers out of an estimated 10,000 persons in the area. Ill West Alexander, a farming community located approximately 27 miles west of Fredericktown on the West Virginia-Pennsylvania border, in the heart of Appalachia, has a population of 750 and serves a rural trade area of 1,500. The area's economy, which has shown only minimal improvement in the past 15 years, is based primarily on agriculture and on employment of residents in industries situated in Wheeling, W. Va., and Washington, Pa. There are no competing banks in either of the applicants' communities and competition from nonbank financial institutions is minimal. Because of the distance between the applicant banks, they do not compete with each other. Both banks are under unified control, with four common directors owning more than two-thirds of the shares of each bank. The net effect of the proposed merger, due to the increase in the total resources of the resulting bank, will be more effective competition for those larger banks on the fringes of the applicants' trade areas. The proposed merger will substantially benefit the convenience and needs of the West Alexander com* munity. The merger will also provide a financial framework more suited to attracting industry to a community which, at present has an unfavorable economic outlook. Applying the statutory criteria to the proposed merger, we conclude that it is in the public interest and the application is therefore approved. JUNE 23,1964. SUMMARY OF REPORT BY ATTORNEY GENERAL This application is a proposal to merge two banks, both of relatively small size, in southwestern Pennsylvania. The merging banks do not appear to offer each other any appreciable competition because they are located about 35 miles apart. Each bank faces competition from several other banks, many of which are far larger institutions. This merger will not materially alter the prevailing banking structure in the areas in which each of the merging banks now competes. For these reasons, it is our opinion that the proposed merger will not have a substantial adverse effect on competition. * * OLD NATIONAL BANK OF WASHINGTON, SPOKANE, WASH., AND TRI-CITIES NATIONAL BANK, PASCO, WASH. Banking offices Total assets Name of bank and type of transaction In operation Tri-Cities National Bank, Pasco, Wash. (14919), with was purchased June 30, 1964, by Old National Bank of Washington, Spokane, Wash. (4668), which had! After the purchase was effected, the receiving bank had COMPTROLLER S DECISION On April 20, 1964, the $203.3 million Old National Bank of Washington, Spokane, Wash., applied to the Comptroller of the Currency for permission to purchase the assets and assume the liabilities of the $4.3 million Tri-Cities National Bank, Pasco, Wash., under the charter and with the title of the former. Spokane, with a population of over 181,000, is the second largest city in the state and the trading center of a tristate area known as the "Island Empire." The region, although semiarid, has a large agricultural production. Lumbering and mining contribute to the region's economy, and in recent years, there has been a steady increase in manufacturing. Pasco, located about 146 miles southwest of Spokane, has a population of about 15,000 and serves as 112 To be operated $4,321,160 2 203,317,906 207, 639, 065 30 32 the distribution center for farm products grown in the southeastern part of the State. The Lower Columbia Basin Irrigation projects permit diversification in alfalfa, sugar beets, potatoes, corn, and other row crops. Old National Bank of Washington, operating 29 branches in eastern Wasliington, ranks sixth among commercial banks and holds 5.5 percent of commercial bank deposits in the State. It is the only one of the larger statewide banking systems with home offices in the eastern part of the State. Competition is furnished by branches of the $1,213 million Seattle-First National Bank, the $686 million National Bank of Commerce, the $278 million Peoples National Bank of Seattle, and the $222 million National Bank of Washington. Tri-Cities National Bank, a satellite of the purchasing bank, opened in 1961 to provide the purchasing bank with access to the Pasco area. It is heavily loaned and pursues an aggressive policy in soliciting credits, the excess of which are sold to the purchasing bank. Banking competition in Pasco is offered by branches of Seattle-First National Bank and Peoples National Bank of Seattle. Additional competition in nearby communities is provided by branches of the National Bank of Commerce of Seattle in Kennewick, 2 miles south, as well as by the newly chartered Bank of Richland and branches of the Seattle-First National Bank and the National Bank of Commerce in Richland, 7 miles southwest. Due to the interlocking relationship between the purchasing and selling banks, consummation of the purchase and assumption would not have the effect of eliminating significant competition. The residents of Pasco, however, would have another branch of a full service bank. The greater availability of credit, of trust services, and of the purchasing bank's agricultural agent will benefit the community. Unity of operations will result in lower operating costs and more efficient service to the public. Applying the statutory criteria to the proposed purchase and assumption, we conclude that it is in the public interest and the application is, therefore, approved. JUNE 4, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL In this application, the fifth largest commercial bank in the State of Washington seeks to purchase a small independent bank. The size of the Purchasing Bank will not be increased materially by this acquisition, nor will any significant competition between the Selling Bank and the Purchasing Bank be eliminated. The position of the Selling Bank's competitors should not be adversely affected to a substantial degree, because they are branches of large statewide banks. It is our opinion that this proposed acquisition, standing alone, would not have a significant adverse effect upon competition but is part of a trend toward greater concentration of the banking resources of the State of Washington in the hands of a few large institutions with resulting probable anticompetitive effects. THE FIRST NATIONAL BANK OF HAGERMAN, HAGERMAN, N. MEX., AND THE FIRST NATIONAL BANK OF ROSWELL, ROSWELL, N. MEX. Banking offices Name of bank and type of transaction Total assets The First National Bank of Hagerman, Hagerman, N. Mex. (7503), with was purchased July 17, 1964, by the First National Bank of Roswell, Roswell, N. Mex. (5220), which had After the purchase was effected, the receiving bank had On May 5, 1964, the $38 million First National Bank of Roswell, Roswell, N. Mex., applied to the Comptroller of the Currency for permission to purchase the assets and assume the liabilities of the $2.8 million First National Bank of Hagerman, Hagerman, N. Mex. Roswell, home of the purchasing bank, has a population of 47,500, and serves the southeastern part of New Mexico. Within a radius of 100 miles, there are approximately 300,000 persons. Although Roswell is rapidly becoming a commercial, industrial, and financial center for this area, the surrounding country is still devoted mainly to large-scale ranching and agriculture. The selling bank is located in Hagerman, a community of 1,200 situated 23 miles south of Roswell. Both Hagerman and the area surrounding it are almost entirely agriculturally oriented. The local busi- In operation To be operated $2, 875, 601 1 38, 039, 674 40, 352, 775 1 2 nesses are either connected directly with agriculture or service the farmers. The selling bank has its sole branch in Dexter, an agricultural community 6 miles north of Hagerman. Consummation of the proposed transaction will increase the resulting bank's size only minimally and will have little, if any, adverse effect on the structure of banking in the area. The two banks are not truly competitive, since all but a nominal amount of the capital stock of the selling bank has been held by trustees for the benefit of the purchasing bank's board of directors since 1941. Approval of the proposed acquisition will permit the resulting bank to better serve the convenience and needs of the Hagerman area. Although the purchasing bank has controlled the policies and operations of the selling bank for more than two decades, the latter's 113 small deposit base has limited its ability to provide many of the types of loans that are presently provided by the purchasing bank and demanded by the community. Among these are intermediate-term farm equipment loans, real estate loans, and home improvement loans. Furthermore, the larger resources of the purchasing bank will permit the offering of other services, including a trust department. Consummation of the proposal will eliminate the operational handicap of limited personnel that is preventing effective management of the selling bank. Presently an officer of the purchasing bank is managing one office of the selling bank, but only the consummation of this transaction can provide a permanent solution. Applying the statutory criteria to the proposed purchase of assets and assumption of liabilities, we conclude that it is in the public interest and the application is therefore approved. JULY 14, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL The First National Bank of Roswell (population 47,500) was chartered in 1890. It serves Chaves County (population 60,000) and is the largest bank in the southeastern part of New Mexico. It has a principal office and three branches, all in Roswell. The first branch was established in November 1956, the second in 1960 and the third in 1963. The First National Bank of Hagerman (population 1,200), about 25 miles south of Roswell, was chartered in 1904. It has a principal office and one branch, established in 1955, in Dexter, N. Mex., 6 miles north of Hagerman. There are four banks in Chaves County, the primary service area of the purchasing bank, the First National Bank of Roswell. The proposed acquisition will permanently eliminate the competition of the selling bank in the Chaves County area and give the purchasing bank 60.50 percent of the total deposits and 60.28 percent of the loans and discounts in that area. Effective competition has already been eliminated through joint control of the two banks. By virtue of the acquisition, the purchasing bank will enter directly into the area including Eddy County in which there are two more banks at Artesia, 43 miles south of Roswell, and besides eliminating for all time the competition of the selling bank, will have 45.98 percent of the total deposits and 47.56 percent of the loans and discounts in that area. In a growing area with so few banks, the permanent elimination of a competitor by the largest bank seriously affects the competitive situation therein adversely. As hereinabove noted, in Roswell and Chaves County, the area of business concentration and the primary service area of the banks involved, in addition to the elimination of the selling bank, the purchasing bank will have 60.50 percent of the deposits and 60.28 percent of the loans and discounts. [Cf. U.S. v. First National Bank & Trust Co. of Lexington (No. 36—October Term 1963, decided April 6, 1964), in which the Supreme Court held a merger to violate the Sherman Act, wherein the resulting' bank, if permitted to merge, would have had 51.95 percent of the total deposits and 54.2 percent of total Joans of all commercial banks in Fayette County, Ky.] Even in the area of Chaves County plus northern Eddy County, the percentage of concentration of business within that service area of the resulting bank is close to that of the resulting bank in the Lexington case. It appears, therefore, that the proposed purchase of assets and assumption of liabilities of the First National Bank of Hagerman by the First National Bank of Roswell will have a substantial adverse effect on competition and further a tendency toward monopoly in the areas involved. THE ALLEGAN STATE BANK, ALLEGAN, MICH., AND THE FIRST NATIONAL BANK & TRUST CO. OF KALAMAZOO, KALAMAZOO, MICH. Banking offices Name of bank and type of transaction Total assets To be operated In operation Allegan State Bank, Allegan, Mich, with and the First National Bank & Trust Co. of Kalamazoo, Kalamazoo, Mich. (191), which had merged July 18, 1964, under the charter and title of the latter bank (191). The merged bank at the date of merger had 114 $15, 420, 907 1 114, 521, 393 19 129,919,270 20 •;" < ;M 1 ' T E L L E R S DECISION O • ^ \ S, 1964, the $1.10 million First National Bank nf Kalamnzoo, Kalamazoo, Mich., and the $15 million Ailc-nan State Bank, Allegan, Mich., applied to the Comptroller of the Currency for permission to men?;c Uiic'.er the charter and title of the former. Thr- carter bank lias its main office and 7 of its 18 branches in Kalamazco, a rapidly expanding city which incro:i<-d i;> population by 42.3 percent between 1950 and U'^u tc 82.000. The trade area of Kalamazoo is supported bv widely diversified industry, agriculture and education. The city of Kalamazoo has 3 colleges with a total enrollment of 12,000 students. Further, Gene;1;.! Motors Corp. is presently building a plant in Comstcck Township, just outside Kalamazoo, which shouk' (.':.iploy some 3,200 people. Allegan, with a population of 5,000, is 25 miles northwest of Kalamazoo. Serving a trade area of about 5S.00U. Allegan is supported by small manufacture (_r concerns, surrounding farm lands and die Allegan SLU".1 Forest -which attracts a large number of tour; ts -^ach year. The in.-i'u'irig bai:.k is Allegan's only banking office, and ii,«» m i-.ivst banking facility is the Hopkins branch of the S"."."'> liullion Wayland State Bank, 8 miles northeast ol Allv^an. The Allegan State Bank is the largest of a f-'-ies (;f small banks to the northwest of Kalamazoo at distances varying from 22 to 47 miles thereiron1. Tk. se banks arc all within 20 miles of the Allegan Slat-.1 Bank, the largest of the group being the $30 million First Michigan Bank of Zeeland. The $20 million Citizens Trust & Savings Bank of South Haven and tlx Alvgan State Bank are the two next largest of this group. The size of these banks, coupled with the facts lh.it they are relatively dispersed geographically and that their rate of growth has not been significant, points to a limited amount of competition among them. The larger resulting bank in Allegan will introduce trust services, charge account banking, in-plant banking uncL extensive computer services, as well as more extensive raid aggressive penetration in the areas of farm r.icr'.gau'es. loans to small business, automobile floor plan financing and education loans. It is hoped that the t Vrter bank's vigorous policies will stimulate the banking competition which is necessary. In ;u'd'tion, the proposed merger will solve a severe manarev.iert succrsv'on problem faced by the merging bank. The two senior executive officers have been active bankers for over 50 years each, and quite understandably wish to retire. However, the size of the bank has not presented an opportunity to develop younger men to provide successors to the present management. The more extensive management position of the charter bank will fill this need. In Kalamazoo, First National will increase its percentage of deposits insignificantly from 22 to 24 percent of the area's total deposits. The effect of this increase will not be important to the other local banks, the $90 million American National Bank, Kalamazoo, or the $40 million Industrial State Bank, Kalamazoo, as most of the competition that will be generated by this merger is on the extreme fringe of Kalamazoo's trade area. Applying the statutory criteria to the proposed merger, we conclude that it is in the public interest and the application is therefore approved. JULY 14,1964. SUMMARY OF REPORT BY ATTORNEY GENERAL In a service area encompassed within a radius of 12 miles from the city of Allegan, Mich., and serving a population of some 12,000, First National (total resources as of December 20, 1963, of $108,190,000) already twice as large as all the other banks in the area together, would be acquiring the fourth largest bank in the area, Allegan State (total resources as of December 20, 1963, of $14,318,000). This proposed merger would aggravate an already serious concentration of power and would make even more precarious the position of the smaller banks in the area, eliminate competition and put an absolute banking monopoly in Allegan proper into the hands of the predominant bank in the area. First National, also the largest bank in southwest Michigan (population 325,000), appears to be attempting to match a recent acquisition by its chief competitor, the American National Bank & Trust Co. of Kalamazoo, in the larger southwest area with which it shares 29.89 percent of the deposits and 23.14 percent of the loans. The proposed merger is seen as eliminating competition and giving impetus to a concentration of banking power which has already developed to an unwarranted degree. So viewed, the merger would be clearly anticompetitive in its probable impact. 115 THE CENTRAL NATIONAL BANK IN CHICAGO, CHICAGO, I I I . , AND THE NATIONAL BANK OF COMMERCE OF CHICAGO, CHICAGO, I I I . Banking offices Name of bank and type of transaction Total assets National Bank of Commerce of Chicago, Chicago, 111. (14349), with and Central National Bank in Chicago, Chicago, 111. (14362), which had. . . . merged July 18, 1964, under the charter and title of the latter bank (14362). The merged bank at the date of merger had COMPTROLLER'S DECISION On April 20, 1964, the $193.6 million Central National Bank in Chicago, Chicago, 111., and the $48.2 million National Bank of Commerce of Chicago, Chicago, 111., applied to the Comptroller of the Currency for permission to merge under the charter and with the title of the former. Chicago, the second largest city in the United States, has a population of about 3,500,000 and is the focal point of an area whose population is 6,200,000. Chicago not only serves as the business and financial center of the entire Midwest, but also leads all cities in the country in the production of steel, telephone equipment, metal wares, and machinery. Large transportation, agricultural processing and merchandising operations centered in this area contribute significantly to the thriving economy. The Central National Bank in Chicago has grown steadily since its organization in 1936. Having relocated its main office in the heart of the Loop at the time of its merger with Merchants National Bank in 1962, it now ranks eighth among metropolitan Chicago banks, with deposits of $176.7 million and loans of $95 millions. Its share of total banks deposits in the area is 1.15 percent. Located within three blocks of the charter bank are its chief competitors: Continental Illinois National Bank; First National Bank; Harris Trust Co.; La Salle National Bank; and Northern Trust Co. The National Bank of Commerce is situated 5 miles west of the charter bank. At the time of its organization in 1936, its service area was considered to be one of the more prosperous districts in Chicago. In recent years, however, the economy of the merging bank's service area has been deteriorating with the result that the bank's deposits have declined. At present, the merging bank has a 0.3 percent share of the metropolitan Chicago area deposit market. Although earnings over the past few years have been maintained at a favorable rate, the bank's directors and officers have 116 $40, 947, 905 207, 018, 960 247, 966, 865 To be operated In operation 1 1 1 been increasingly pessimistic about growth prospects because of the deterioration in the economy of the bank's service area. Moreover, many of the bank's officers have passed or are nearing retirement age. Consummation of the proposal will have a negligible effect upon the banking structure of the metropolitan Chicago area. Upon closing of the merging bank's office when the merger is effected, a total of 134 banks will remain to serve the needs of the banking public in the metropolitan Chicago area. Furthermore, the number of banks located in the vicinity of the merging bank's office will remain constant due to the expected opening there of a newly chartered state bank. The anachronistic branch banking law of Illinois, whose prohibition of branch banking reflects the economic aridity of a past generation and the noncompetitive disposition of some of its bankers, is seen in its true perspective in this case. Ever zealous of protecting privileged enclaves, such bankers have succeeded in thwarting reform, thus needlessly restricting the development of the banking structure and hampering the progress of the economy. It is indeed anomalous in view of the deep involvement of the public interest in banking that the development of banks and their capability to serve the convenience and needs of the public, to foster the creation of new enterprises and to sustain the growth of existing business and industry, should be hindered by oppressive State and Federal statutes forbidding branch banking. In the instant case it is evident that the community would be served better were the merging bank allowed to continue as a branch of the charter bank. The benefits derived from the proposed merger, in terms of better service to the metropolitan Chicago community, more than offset the minimal change in the competitive banking structure. The resulting bank will offer broader, more varied services not previously available to the merging bank's customers and an increased lending capacity that will enable it to compete on a better footing with some of the sur- rounding banks in the Loop. Additionally, the resulting bank will be in a better position to meet the banking needs of the large number of customers of the merging bank who have indicated an intent to do business with the resulting bank. Applying the statutory criteria, we find the proposed merger to be in the public interest and therefore the application is approved. July 14,1964. SUMMARY OF REPORT BY ATTORNEY GENERAL Central, a Chicago "loop" bank with total assets of $193,573,000, proposes to merge with National, a bank with $48,257,000 in assets located 5 miles to the west in the city of Chicago, a nonbranching jurisdiction. Since 1954, Central has consummated three mergers, the last of which took place in 1962 and increased its assets by about 50 percent. One reason advanced for this, as well as for the previous merger, is to fill a void created by the 1961 merger of City National into Continental Illinois, Chicago's largest bank. On that ground, the proposed merger would appear to be premature, since a valadity of the CityContinental merger is still to be determined in pending antitrust litigation. Concentration in commercial banking in the Chicago area is high due to recent mergers. This merger can only add to that concentration. As it has encouraged Central, it will encourage other banks to merge thereby further eliminating competition, as it eliminates competition between Central and National, and further increase concentration in commercial banking in Chicago. We believe that the effect of the proposed merger on competition will be substantially adverse. THE NATIONAL BANK OF DAYTON, DAYTON, OHIO, AND THE COMMUNITY BANK, DAYTON OHIO Banking offices Name of bank and type of transaction Total assets In operation The Community Bank, Dayton, Ohio, with and the National Bank of Dayton, Dayton, Ohio (1788), which had merged July 18, 1964, under the charter and title of the latter bank (1788). The merged bank at the date of merger had COMPTROLLER'S DECISION On April 24, 1964, the $105.3 million National Bank of Dayton, Dayton, Ohio, and the $4 million Community Bank, Dayton, Ohio, applied to the Comptroller of the Currency for permission to merge under the charter and with the title of the former. Dayton, with a population of 398,000, is located in Montgomery County which reports a population of 579,000. The city's numerous manufacturing establishments, Wright-Patterson Air Force Base, and the Defense Electronics Supply Center employ about 120,000 persons. General Motors Corp. alone employs about 30.000 people in its Dayton plants. Huber Heights, an unincoporated residential suburb of Dayton in which the merging bank is located, has a service area population of about 12,000. Approximately 26 percent of the employed residents work at the nearby Wright-Patterson Air Force Base. The residential development of this area, which consists largely of brick homes ranging in value from $13,000 to $20,000, has been steady. $4,105, 543 101,172, 802 104, 628, 363 To be operated 1 10 11 The charter bank, third largest commercial bank in the Dayton metropolitan area, operates eight branches in Dayton and two in Kettering; it also has five approved but unopened branches in Dayton. Its major competitors are the $275 million Winters National Bank & Trust Co. of Dayton and the $121 million Third National Bank & Trust Company of Dayton. Consummation of the proposed merger not only will eliminate the merging bank's management problem but also will place the resulting bank in a better position competitively needed by both institutions. Further, the facilities of a full-service institution will be available in Huber Heights to compete with the projected branch of the Winters National Bank. Since the participating banks are not in competition, no elimination of competition nor trend toward monopoly is involved. Applying the statutory criteria, we conclude that the merger is in the public interest and the application is, therefore, approved. JULY 14, 1964. 117 SUMMARY OF REPORT BY ATTORNEY GENERAL The National Bank of Dayton, having assets of $105.3 million, deposits of $93.8 million, and loans of $56.9 million, proposes to acquire the Community Bank with assets of $4 million, deposits of $3.7 million, and loans of $1.9 million. These banks are the third and fourth largest of four banks servicing the Greater Dayton area. The National Bank operates from a main office and eight branches; five additional branches are approved but not yet opened. All are with the Greater Dayton area. The Community Bank has no branches, provides limited banking services, and 95 percent of its business is from Huber Heights, a section of Wayne Township which is a subdivision of Greater Dayton. There presently exists little, if any, direct competition between the two banks.. This merger would not affect the competitive status of the remaining banks in Dayton. However, so concentrated are banking services in a relatively few institutions in Greater Dayton, that elimination of even a small bank will exert an adverse effect upon competition. THE FAIR LAWN-RADBURN TRUST CO., FAIR LAWN, N.J., AND THE NATIONAL COMMUNITY BANK OF RUTHERFORD, RUTHERFORD, N.J. Banking offices Total assets Name of bank and type of transaction In operation Fair Lawn-Radburn Trust Co., Fair Lawn, N.J., which had and National Community Bank of Rutherford, Rutherford, N.J. (5005), with. merged July 31, 1964, under the charter and title of the latter bank (5005). The merged bank at the date of merger had COMPTROLLER S DECISION On May 28, 1964, the $140 million National Community Bank of Rutherford, Rutherford, N.J., and the $26 million Fair Lawn-Radburn Trust Co., Fair Lawn, N.J., applied to the Comptroller of the Currency for permission to merge under the charter and with the title of the former. Although the charter bank is headquartered in Rutherford, a borough of only 22,000 people, it serves a contiguous trade area with a population in excess of 300,000. Bergen County, in which Rutherford is located, can best be described as a well-diversified residential, industrial, and retail trading area which encompasses one of the most rapidly growing counties in the United States. The county owes its phenomenal growth, in no small part, to its close proximity to New York City. The National Community Bank is the second largest of 29 commercial banks in Bergen County. It operates 11 offices throughout the southern part of the county and accounts for 9.8 and 11.5 percent of the county's total loans and deposits, respectively. The merging bank is located in Fair Lawn, population 39,804, and serves a trade area population in excess of 200,000. This trade area is predominantly residential but contains numerous industrial plants and 118 $26, 365, 293 139, 946, 077 166, 311, 369 To be operated 4 11 15 small business enterprises. Prospects for future residential growth in the area are rather limited, while industrial growth potential is very favorable. The Fair Lawn-Radburn Trust Co., the 10th largest commercial bank in Bergen County, with 1.9 percent of the total deposits and 2.1 percent of the loans, operates four offices in the immediate Fair Lawn-Radburn area. This merger will have no significant effect on the banking structure of Bergen County. The merging banks' trade areas are contiguous rather than overlapping, and accordingly, there has been little, if any, competition between them. The resulting bank will operate 14 offices and hold 13.6 percent of deposits and 12.4 percent of loans in Bergen County. It will retain its relative size as compared to the dominant $286 million Peoples Trust Co. of Hackensack, N.J., which operates 16 offices in Bergen County with 22.9 percent of the deposits and 24.2 percent of the total loans in the county. In the Fair Lawn-Radburn area, competition will not be lessened. To the contrary, effective competition will be increased by the introduction of another strong, full-service bank into an area in which the small merging bank has been mainly attempting to compete with five Passaic County and two Bergen County banks. The fact that earnings of the merg- ing banks have actually declined over the past 5 years during a period of unprecedented prosperity indicates that the bank has not been an effective competitive factor in its area. The public interest, convenience and needs of the Fair Lawn-Radburn banking public will be better served by the more extensive services to be offered by the resulting bank, A larger, better staffed and more effieciently run trust department, a foreign banking department and an increased lending limit to aid the area's current industrial expansion are the most immediate benefits which the residents will receive from this merger. Applying the statutory criteria to the proposal, we conclude that it is in the public interest and the application is, therefore, approved. JULY 27, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL This merger will eliminate a degree of competition presently existing between the two banks. It will unduly increase banking concentration in the already concentrated area of Bergen County, N.J. It will eliminate a strong, viable, and growing independent bank and thereby eliminate potential competition between the two banks. The competitive effect of the proposed merger would be substantially adverse. THE MECHANICS NATIONAL BANK OF WORCESTER, WORCESTER, MASS., AND THE INDUSTRIAL CITY BANK & TRUST Co., WORCESTER, MASS. Banking offices Name of bank and type of transaction Total assets In operation Industrial City Bank & Trust Co., Worcester, Mass., which had and the Mechanics National Bank of Worcester, Worcester, Mass. '(VIM); " with merged July 31, 1964, under the charter and title of the latter bank (1135). The mereed bank at the date of merger had On May 18, 1964, the $53 million Mechanics National Bank of Worcester, Worcester, Mass., and the $8.5 million Industrial City Bank & Trust Co., Worcester, Mass., applied to the Comptroller of the Currency to merge under the charter and with the title of the former. Worcester, the second largest city in Massachusetts, has a population of 187,000. The county of Worcester is the State's largest and extends from the border of New Hampshire to that of Rhode Island. Its population of 583,000 is distributed among 4 cities, 56 towns and the rural areas. The city of Worcester serves as a manufacturing and trading center for all of central Massachusetts. Although the dominant textile industry has experienced a decline in recent years, diversified manufacturing has increased with some industry moving to Worcester from the Boston area. An estimated 36,000 persons are presently employed in Worcester manufacturing a variety of products including machinery, metal items, abrasives, textiles, and instruments. The general service area is mixed, with farming and forestry making an important contribution To be operated $8, 211 694 3 50, 491 697 2 58, 703 392 to the local economy. A slight decline in the city's population in recent years has been due entirely to the increasing movement to suburban areas. The Mechanics National Bank is the third commercial bank in size in Worcester, but it is substantially smaller than the $201 million Worcester County National Bank and the $73 million Guaranty Bank & Trust Co. The charter bank is a unit bank, whereas the Worcester County National Bank operates 14 branches and the Guaranty Bank & Trust Co. operates 8 branches within the same general service area. The resulting bank will hold but 16.3 percent of deposits and 12.4 percent of loans, and its assets of $62 million will leave it the third commercial bank in size in Worcester. Thrift institutions especially are intensely competitive in Massachusetts. They not only have higher legal lending limits and lower tax rates, but are permitted to perform many functions elsewhere restricted to commercial banks,. Their ability to issue drafts in the nature of checks and to make installment and col- 119 lateral loans places them in direct competition with commercial banks. They hold 2/2 times the deposits of commercial banks in this area—$900 million as compared to $327 million. In addition, the larger banks in Providence, R.I.; Hartford, Conn.; and Boston, all within 40 to 60 miles of Worcester, actively solicit deposits and loans in this area. There has been negligible competition between the charter and merging banks since each has specialized in a different kind of banking operation. The Mechanics National Bank has long followed a policy of restricting its activities to wholesale lending and trust work. The merging bank, which is a converted Morris Plan Bank, has specialized in retail lending. Hence the effect of this merger would be to unite two complementary banking operations into one full-service commercial bank which will compete effectively with two larger full-service commercial banks. Applying the relevant statutory criteria, we find the application to be in the public interest, and it is therefore approved. JULY 22,1964. SUMMARY OF REPORT BY ATTORNEY GENERAL Mechanics National Bank of Worcester, Mass., with assets of $53,321,000, and Industrial City Bank & Trust Go. of Worcester, Mass., with assets of $8,534,000, propose to merge under the charter and title of the former. Mechanics and Industrial are, respectively, the third and fifth largest of 11 banks in the Worcester metropolitan area, wherein the two largest banks dominate, with a combined percentage share of the market in deposits in excess of 70 percent, as against 16 percent for the merging banks. The proposed merger would eliminate all competition between the merging banks and add to the high degree of concentration presently existing in the market area affected. In these respects, it would have an adverse effect on competition. FIRST & MERCHANTS NATIONAL BANK, RICHMOND, VA., AND THE FIRST NATIONAL BANK OF WAYNESBORO, WAYNESBORO, VA. Banking offices Name of bank and type of transaction Total assets In operation The First National Bank of Waynesboro, Waynesboro, Va. (7587), which h a d . . . . and First & Merchants National Bank, Richmond, Va. (1111), with merged July 31, 1964, under the charter and title of the latter bank (1111). The merged bank at the date of merger had COMPTROLLER'S DECISION On April 14, 1964, the $454 million First & Merchants National Bank, Richmond, Va., and the $13 million First National Bank of Waynesboro, Waynesboro, Va., applied to the Comptroller of the Currency for permission to merge under the charter and with the title of the former. Richmond, population 220,000, is the capital of Virginia and the focal point of the State's largest trading area with an approximate population of 510,000. Four of Virginia's six largest banks have their headquarters in Richmond. Area industry includes the manufacturing of tobacco products, chemicals, paper and metal products. In addition, Richmond is a retail and wholesale center, as well as the transportation hub joining the north Atlantic and south Atlantic seaboard. Due to its financial, manufacturing, and 120 $12,138, 496 445,919,279 457, 698, 818 To be operated 2 35 37 commercial activity, the metropolitan area has grown by about 25 percent in the 1950-60 period. The charter bank, with 34 branches and 2 facilities at the Pentagon and Fort Eustis, operates in 4 principal areas of Virginia. On a statewide scale, its principal competition comes from the $484 million United Virginia Bank Shares Holding Co. banks, the $405 million Virginia National Bank, the $246 million Virginia Commonwealth Corp. banks, and the $219 million First Virginia Corp. banks. Waynesboro, population 16,000, is located about 100 miles northwest of Richmond in the Shenandoah Valley of west-central Virginia. The city serves a trade area extending about 5 miles and having a population of approximately 25,000. Growth of Waynesboro's economy has been remarkable, with such manufacturing industries as Dupont and General Electric employing several thousand persons. The transition from a rural to an Industrial-oriented economy has made the Waynesboro per capita income of $2,605 for 1962 among the highest in Virginia. A new $900,000 municipal building and the present construction of a $2.5 million shopping center indicate the optimism manifested in the city's future by its citizens and investors. The First National Bank of Waynesboro has one branch, which is located in Waynesboro. The only other bank in the city, the Virginia National Bank, has two branches in Waynesboro. Since Virginia law was amended in 1962 to permit banks to merge anywhere in the State and to retain the offices of the merged bank, there has been a major change in the banking structure of the State. Small banks unable to serve the public adequately were replaced by larger and more efficient institutions. This much-needed liberalization of the banking laws in Virginia has proved to be a salutary development. The Waynesboro bank, no longer able to adequately serve a community changing from a rural to an industrial economy, has chosen to merge with a statewide bank which can offer a full range of services. The credit department, investment department, and foreign department of the charter bank will provide services not presently offered by the merging bank. Further, an active trust department will replace the limited trust facilities of the merging bank which has one trust officer, a practicing attorney who serves the bank primarily in an advisory capacity. A lending limit of $65,000 restricts the merging bank's ability to satisfy the banking needs of the medium-sized industrial and commercial concerns which depend on local banks for financing. The competitive effect of the proposed merger will be minimal, since the nearest office of the charter bank is 11 miles away in Staunton, and the overlap of the charter bank's service areas is relatively insignificant. In the Waynesboro area, there are 14 banks operating 27 offices. In addition, active competition comes from savings and loan associations, life insurance companies, credit union and finance companies in the area. The merger will provide even more stimulation to this existing competition in the Waynesboro area. Applying the statutory criteria to the proposed merger, we conclude that it is in the public interest and the application is therefore approved. JULY 23, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL First & Merchants National Bank is the largest bank in Virginia. Since 1959 six banks with deposits of $119,865,000 have been merged. The present proposed merger of First National will increase its deposits by approximately $ 12 million. Direct competition between the banks is not significant and the remaining competition in Waynesboro will be branches of Virginia National Bank, the second largest bank in the State which obtained its branches in Waynesboro through a merger consummated in 1963. The present proposed merger will not only eliminate an independent bank but follows a pattern of increased concentration of banking in Virginia over constantly widening areas. While the instant merger, standing alone, would not adversely affect competition, it is part of a trend toward concentration of banking resources in a few hands which will have an adverse effect on competition. THE FIRST NATIONAL BANK OF NORTON, NORTON, VA., AND THE FIRST NATIONAL BANK OF WISE, WISE, VA. Banking offices Name of bank and type of transaction The First National Bank of Wise, Wise, Va. (10611), with and the First National Bank of Norton, Norton, Va. (6235), which had consolidated July 31, 1964, under the charter of the latter bank (6235) and under title "The Wise County National Bank." The consolidated bank at the date of consolidation had Total assets $3,618,827 7, 606, 828 11,220,914 In operation To be operated 1 1 2 121 COMPTROLLER S DECISION On May 20, 1964, the $7.5 million First National Bank of Norton, Norton, Va., and the $3.5 million First National Bank of Wise, Wise, Va., applied to the Comptroller of the Currency for permission to consolidate under the charter of the former and with the title "The Wise County National Bank." The applicant banks are located in Wise County in southwestern Virginia. The economy of the entire area is severely depressed as a result of its total dependence upon the declining coal mining industry. An attempt is being made by the residents to diversify the area's economic base in order to absorb the substantial unemployment and remedy the related side effects. Norton, population 5,013, is the principal trading center for Wise County. It is located approximately V/2 miles to the south of Wise, population 2,614, which is the county seat for Wise County. A variety of small manufacturing establishments in the area employ approximately 1,700, but these, together with a small amount of farming, do not in any way compare with coal mining as the primary economic factor. Per capita income for 1961 was $1,027, well below the $1,868 average for the State of Virginia. Mechanization of the bituminous coal industry has made unemployment a persistent problem, causing the younger generation to migrate to areas with better opportunities. This loss of young leadership is a severe drain on the future potential of the area. Although the banks are located only 3 miles apart, there has been little competition between them for either deposits or loans and there is at present an inconsequential number of common accounts. The consolidating bank lacks the aggressive bank management which the area requires and will shortly experience a management succession problem. The communities will benefit from the consolidation as it will create a strong,financiallysound institution to serve the needs of this depressed area. In addition, the resulting bank will be better able to hire new and aggressive management who will assist the area's business leaders in recovering from its economic doldrums. Applying the statutory criteria to the proposed consolidation, we conclude that it is in the public interest and the application is, therefore, approved. JULY 22, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL The merging banks arc; unit institutions located 4% miles apart in an area devoted to coal mining, small farms, and small industries. The proposed consolidation will result in the elimination of some direct competition between the two banks. The resulting bank will continue to be second in size in its service area and its increased size will provide but a slight competitive benefit. We conclude the proposed consolidation will not have a substantially adverse effect on competition. THE PEOPLES-FARMERS NATIONAL BANK, MIFFLIN, PA., AND THE RUSSELL NATIONAL BANK OF LEWISTOWN, LEWISTOWN, PA. Banking offices Name of bank and type of transaction Total assets In operation The Peoples-Farmers National Bank, Mifflin, Pa. (9678), with and the Russell National Bank of Lewistown, Lewistown, Pa. (10506), which had merged July 31, 1964, under the charter of the latter bank (10506) and title "the Russell National Bank." The merged bank at the date of merger had.. COMPTROLLER S DECISION On May 8, 1964, the $19.6 million Russell National Bank of Lewistown, Lewistown, Pa., and the $5.3 million Peoples-Farmers National Bank, Mifflin, Pa., applied to the Comptroller of the Currency for permission to merge under the charter and with the title of the former. 122 To be operated $5, 545, 885 2 19,149, 806 2 24, 669, 926 4 Mifflin, home of the merging bank, has a population of 900 and serves a prosperous agricultural area. It is located 12 miles east of Lewistown in Juniata County. The Peoples-Farmers National Bank has its sole branch in nearby Thompsontown. The charter bank is located in Lewistown, the county seat of Mifflin County. With a population of 14,000, Lewistown is located In the central part of the State, midway between Harrisburg and Altoona. Although it has experienced some economic difficulties, the city is attracting industrial development and can show solid gains in both primary and fabricating industries with numerous national manufacturers locating there. The charter bank has one branch located in suburban Burnham. The trade areas of the two banks, because of their geographic proximity, must be considered as one. Many persons commute daily from Mifflin to Lewistown for employment and the economic ties of the two communities are very close. Mifflin County is the headquarters of five commercial banks. These banks operate nine offices and hold total deposits of $38.4 million. All the banks in both counties may be considered to be in competition with each other. Two local competitors and seven other competitors in the Juniata River Valley will continue to serve the area. The bank will extend and enhance banking services to the people in both Juniata and Mifflin Counties and, through the facilities of four offices in Lewistown, Burnham, Mifflin and Thompsontown, will strengthen the economic growth of both counties. The merging bank has not provided managerial succession and now faces the prospect of the retirement of its executive officer. This dilemma has forced the bank to turn to merger as the only practicable solution to its management succession problem. Applying the statutory criteria to the proposed merger, we conclude that it is in the public interest and the application is therefore approved. JULY 17, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL The Russell National Bank of Lewistown is the largest bank in Mifflin County with 41 percent of the I.P.C. deposits and loans therein. Along with the second ranking bank, it accounts for about 75 percent of the county's I.P.C. deposits and loans. Peoples-Farmers National Bank is the second largest bank in Juniata County, which adjoins Mifflin County. It has 23.1 and 19.3 percent, respectively, of this area's I.P.C. deposits and loans while the largest bank accounts for 28.6 and 35.5 percent, respectively, of such deposits and loans. The remaining banks are approximately equal in size. There does not appear to be a significant amount of direct competition between the merging banks that would be eliminated by approval of this transaction. On the other hand, this merger would tend to enhance the Charter Bank's leading position in Mifflin County; to increase the high level of concentration in commercial banking therein; to establish comparable concentration in the resulting bank's two-county service area; and to upset the comparative balance among the much smaller banks in Juniata County. The proposed merger, therefore, would appear to have an adverse effect on competition. THE CITIZENS & SOUTHERN NATIONAL BANK OF SOUTH CAROLINA, CHARLESTON, S.C., NATIONAL BANK, ROCK HILL, S.C. AND THE PEOPLES Banking offices Name of bank and type of transaction Total assets The Peoples National Bank of Rock Hill, Rock Hill, S.C. (9407), which had and the Citizens & Southern National Bank of South Carolina, Charleston, S.C. (14425), with merged Aug.l, 1964, under the charter and title of the latter bank (14425). The merged bank at the date of merger had COMPTROLLER'S DECISION On May 29, 1964, the $172.3 million Citizens & Southern National Bank of South Carolina, Charleston, S.C, and the $17.4 million Peoples National Bank, Rock Hill, S.C, applied to the Comptroller of the Currency for permission to merge under the charter and title of the former. In operation To be operated $18,541,535 3 175, 232, 427 31 193,690,936 34 Citizens & Southern is the second largest bank in South Carolina operating 31 offices in 15 communities situated in 10 counties. Its largest community service areas are Charleston, population 78,000, which is located in the southeastern section of the State; Columbia, population 98,000, which is in the south central section of the State; and Spartanburg, popula123 tion 45,000, which is in the northwestern portion of South Carolina. The economic base of the communities in which Citizens & Southern National operates is varied. During the past two decades the State of South Carolina has been rapidly changing from a predominately agricultural economy to one of mixed composition between agriculture and industry. A large part of the economy of the State is dependent upon the military, particularly in the Charleston and Columbia areas. The merging bank is situated in Rock Hill, population 31,000, where its 3 offices are located. The Rock Hill economy is dependent primarily upon the textile and allied industries which furnish employment for nearly 9,000 persons. Other products manufactured in the area include paper, bus and truck bodies, together with food and beverage processing. The Peoples National Bank has been unable to solicit successfully the loan business of the large manufacturing industries in the Rock Hill area due to its inability to extend sufficient credit for the companies' needs. Many of these firms have been required to go to other communities, both in and out of the State, for financial assistance. Because of its size, the merging bank has been unable to offer all the services needed in the community. While servicing installment paper for automobile and personal loans, the merging bank has not gone into the area of appliance or other such paper. Nor has the Peoples National Bank been able to develop a depth of management capable of adequately caring for the expanding business needs of the Rock Hill area. Citizens & Southern has a long history of gearing its programs to the needs of the communities in which it operates by offering its customers a complete range of banking services. Through the offering of new and more complete services and convenience of facilities, aided by high-speed electronic equipment, Citizens & Southern has been able to extend its services without unduly increasing customer charges. Approval of the merger will have no effect upon competition between the merging banks. The resulting institution will be competitive in Rock Hill with the largest bank in South Carolina, which has received approval to open a branch there. The merger will provide a stimulus to the economy of Rock Hill and make additional resources available for future economic growth. The public will benefit by the creation of new and improved facilities and the addition of a full-service bank. Younger and more aggressive management will stimulate competition. 124 On balancing the facts of this case in light of the statutory criteria, we find that the merger is in the public interest and the application is, therefore, approved. JULY 31, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL Citizens is the second largest of 4 statewide commercial banks in South Carolina with about 13.4 percent of the State's commercial bank deposits and 41 offices located in 7 different areas in the State. Peoples has 3 offices located in Rock Hill, S.C. (population 31,000), which is in York County in north central South Carolina and 60 to 70 miles from Citizens' nearest offices. Peoples has total deposits of $15,613,000, about 1.4 percent of total deposits of all banks in the State and 47 percent of deposits in York County. There appears to be little existing competition between the merging banks due to the distances between their respective offices. South Carolina's banking resources are highly concentrated in the four large statewide instituions, partly as a result of prior mergers. Together they control 52.8 percent of the State's total deposits. These 4 banks have acquired 26 smaller banks in the past decade, and at the same time have been opening numerous de novo branch offices. (The proposed merger would be Citizens' third acquisition in 1964.) Such acquisitions by one of the four dominant banks have often led directly to a similar acquisition by one of the others, with the result that the only independent banks in a number of South Carolina communities have been eliminated from competition and remaining unit banks in nearby communities have been subjected to direct competition with offices of much more powerful institutions. The proposed merger is the most recent in this process, which, if unchecked, threatens to concentrate South Carolina's banking resources in just four large branch systems. By it Citizens would acquire the banking business of by far the largest independent bank in Rock Hill and York County and add about 1.4 percent to its share of the statewide banking market. At the same time, the merger would tend to motivate the other statewide systems to respond with similar acquisitions, and the smaller banks in Rock Hill and the surrounding area which are now in most direct competition with Peoples might be receptive to such proposals to insure their survival in competition with Citizens. As a result, concentration at the statewide level would be further enhanced at the expense of independent banking in the Rock Hill area. In view of the history of bank mergers in South Carolina, and its cumulative effect upon competition, the proposed merger threatens to have a substantial adverse effect on competition and may aggravate the trend toward oligopoly and eventual monopoly in that State. THE ASHLAND NATIONAL BANK, ASHLAND, PA., AND THE PENNSYLVANIA NATIONAL BANK & TRUST CO., POTTSVILLE, PA. Banking offices Name of bank and type of transaction Total assets The Ashland National Bank, Ashland, Pa. (5615), with and Pennsylvania National Bank & Trust Co., Pottsville, Pa, (1663), which had merged Aug. 7, 1964, under charter and title of the latter bank (1663). The merged bank at the date of merger had COMPTROLLER S DECISION On June 1, 1964, the $51.5 million Pennsylvania National Bank & Trust Co., Pottsville, Pa., and the $4.9 million Ashland National Bank, Ashland, Pa., applied to the Comptroller of the Currency for permission to merge under the charter and with the title of the former. Ashland, a community of 5,237 serving a trading area of 50,000, is located 17 miles northwest of Pottsville. Its economy has historically been dependent on anthracite coal mining, which has been in a steady decline over the past decade, but has been supplemented by a small amount of clothing manufacturing and metal fabricating. Pottsville, home of the charter bank, has a population of 21,659 and is located on the southern edge of the Pennsylvania anthracite coal fields. Despite having experienced some economic difficulty, the city recently has had some success in attracting new industry. Within a 19-mile radius of Pottsville, the charter bank operates nine offices, two of which are located 3 miles from the merging bank. It is the largest bank in the area and presently holds 18.3 percent of the area deposits and 19.7 percent of the loans. After the merger, the resulting bank will hold 20 percent of the deposits and 21.6 percent of the loans. However, competition will remain keen by reason of 24 other commercial banks operating a total of 30 banking offices in the area. The merger will solve a difficult management prob- In operation $5,125, 778 1 52,012,755 9 56,164,629 10 lem which has split the board of directors of the merging bank into two opposing factions. In addition, the resulting bank will augment and extend the banking services available to the people of Pottsville and Ashland. Both communities will benefit from a stronger financial institution possessing management depth which will have a catalytic effect on the area's economic recovery. Applying the statutory criteria to the proposed merger, we conclude that it is in the public interest and the application is therefore approved. JULY 31,1964. SUMMARY OF REPORT BY ATTORNEY GENERAL The Pennsylvania National Bank & Trust Co., the purchasing bank, was founded in 1866. Its head office and one of its branches are in Pottsville, Pa., and its other seven branches are from 5 to 19 miles from the head office. As of May 15, 1964, it had total assets of $51,527,000, total deposits of $7,702,000, of which $13,761,000 were demand deposits and $30,967,000 time and saving deposits, and total loans of $24,537,000. Its Centralia branch, acquired in 1955, is but 3 miles north of the office of the selling bank and its Girardville branch, acquired May 8, 1964, is but 3 miles east of the office of the selling bank. The application shows that Ashland is a community with a population of over 5,000, which has the following 2 banks: Deposits Ashland National Bank (Selling Bank). Citizens National Bank. . ., To be operated $4, 962, 000 7, 879, 000 $4, 329, 000 6, 358, 000 Loans and discounts $2,511,000 3, 809, 000 125 Should this application be approved, the Citizen's National Bank will face the direct competition of a bank more than seven times its size. Mount Carmel, 4 miles west, Centralia, 3 miles north, and Girardville, 3 miles east, in addition to Ashland, may well constitute the service area of the selling bank and should the purchasing bank be permitted to acquire the selling bank it will have 3 of the 7 banking offices in that area with 61.9 percent of the total resources; 63.4 percent of the total deposits; and 65.1 percent of the total loans and discounts of all of the banks in the area. [Cf. U.S. v. First National Bank <& Trust Co. of Lexington (36—October term 1963, decided April 6, 1964), in which the Supreme Court held a merger to violate the Sherman Act, wherein the resulting bank would have 51.95 percent of the total deposits and 54.2 percent of the total loans of all commercial banks in Fayette County, Ky.]. It clearly appears, therefore, that the proposed merger of the Ashland National Bank, Ashland, Pa., into Pennsylvania National Bank & Trust Co., Pottsville, Pa., will eliminate competition between the participating banks and will have a substantial adverse effect on competition and further a tendency toward monopoly in the area involved. THE FIRST NATIONAL BANK OF MOUNT HOLLY SPRINGS, MOUNT HOLLY SPRINGS, PA., AND CUMBERLAND COUNTY NATIONAL BANK & TRUST CO., NEW CUMBERLAND, PA. Bankin g offices Total assets Name of bank and type of transaction In operation The First National Bank of Mount Holly Springs, Mount Holly Springs, Pa. (8493), with and Cumberland County National Bank & Trust Co., New Cumberland, Pa. (14542), which had merged Aug. 7, 1964, under charter and title of the latter bank (14542). The merged bank at the date of merger had COMPTROLLER'S DECISION On May 26, 1964, the First National Bank of Mount Holly Springs, Mount Holly Springs, Pa., and the Cumberland County National Bank & Trust Co., New Cumberland, Pa., made application to the Comptroller of the Currency for permission to merge under the charter and title of the latter. The sole office of the $5.1 million First National Bank of Mount Holly Springs is located in the borough of Mount Holly Springs, which has a population of 1,800 and is in the south central part of Cumberland County, 7 miles south of Carlisle and 27 miles southwest of Harrisburg. The borough, which is mainly residential, is a center for the surrounding agricultural area with a population of 25,000. The charter bank, the $38.5 million Cumberland County National Bank, has its main office in New Cumberland, a community located across the Susquehanna River from Harrisburg. It has four other offices in Cumberland County, two in Camp Hill, one in Boiling Springs, one in Lemoyne and two military facilities at the Army depot in New Cumberland and the Navy depot in Mechanicsburg. All of these locations are 126 To be operated U, 946, 697 1 39, 528, 778 5 44} 475> 475 6 in the area known as the "West Shore." Because of easy highway access and railroad facilities, the area has been developing industrially. It also contains a number of Federal installations. The immediate New Cumberland area serves as a residential suburb of Harrisburg. There is little competition between the merging banks. The nearest office of the charter bank to the merging bank is its Boiling Springs branch, which is located 5 miles northeast of Mount Holly Springs in a separate community. Its other branches are all 18 or more miles distant from the merging bank. The major consideration in assessing competition in Cumberland County, the home of both banks, must be the Dauphin County banks which operate branches in Harrisburg directly across the Susquehanna River and two of which operate a total of five branches in Cumberland County itself. These are substantial institutions, three of which have assets in excess of $100 million. Additionally, there are 15 competing offices of other banks in Cumberland County. Consummation of the merger will enable the charter bank to compete more effectively with the larger Harrisburg banks, two of which will remain three times the size of the resulting bank, and with all the Dauphin County banks operating in the West Shore area. Not only will the resulting bank profit from economies of operation, but the Mount Holly Springs area will gain by the introduction of the larger lending capabilities, trust facilities, and other services of the charter bank. In considering the facts of this case in light of the relevant statutory criteria, we find this merger to be in the public interest and the application is, therefore, approved. JULY 31, 1964 SUMMARY OF REPORT BY ATTORNEY GENERAL Cumberland County National Bank & Trust Co. proposes to acquire the First National Bank of Mount Holly Springs. The latter had, as of April 15, 1964, total assets of $5 million, total deposits of $4.5 million, and loans and discounts of $3.2 million. It operates no branches, provides normal banking services on a relatively limited scale, and does not maintain a trust department. Cumberland County National Bank & Trust Co. operates through a main office at New Cumberland, Pa., and six branches in the surrounding territory. It offers full banking services, backed by resources of $37.7 million. The proposed merger involves the fourth largest of the banks operating in Cumberland County, Pa., adjacent to the city of Harrisburg, and a relatively small bank serving a single community within that territory. The closest office of Cumberland is 5.9 miles from Mount Holly Springs and available information indicates there is no substantial competition between the two banks which would be eliminated. Three Harrisburg-based banks operating in the area will continue to be substantially larger than Cumberland. There will also be two banks of comparable size andfivesmaller banks. It is our view that the adverse effects on competition resulting from this merger will not be significant. However, existing concentration of banking in Cumberland County will be somewhat increased and further mergers may be induced. THE FIRST NATIONAL BANK OF WEST MIDDLESEX, WEST MIDDLESEX, PA., AND THE FIRST NATIONAL BANK OF MERCER COUNTY, GREENVILLE, PA. Banking offices Name of bank and type of transaction Total assets In operation The First National Bank of West Middlesex, West Middlesex, Pa. (6913), with.. . and First National Bank of Mercer County, Greenville, Pa. (249), which had. . merged Aug. 8, 1964, under the charter and title of the latter bank (249). The merged bank at the date of merger had COMPTROLLER'S DECISION On May 25, 1964, the $32 million First National Bank of Mercer County, Greenville, Pa., and the $3.5 million First National Bank of West Middlesex, West Middlesex, Pa., applied to the Comptroller of the Currency for permission to merge under the charter and title of the former. Greenville, in the extreme western part of the State, is the site of the charter bank's home office and four of its eight branch offices. With a population of 8,236, the city is the center of the most significant trade area in northwestern Mercer County, which is on the Ohio border. The economy of Greenville's trade area is dependent upon a diversified and developing industrial complex. Large employers such as Westinghouse Electric and Greenville Steel Car Co., along with 16 $3, 724, 634 33, 646, 698 37, 371, 333 To be operated 1 8 9 other manufacturing concerns, provide the principal economic support for the Greenville market, the population of which is estimated at about 25,000. Industrial growth in this area has buttressed an already stable economy, and the charter bank has been an active participant in that growth. The proposed merger will not affect the ability of the charter bank to meet the needs of Greenville or its environs, but it will extend its dynamic leadership into the southern part of Mercer County. The merging bank, located in the rural community of West Middlesex in southwestern Mercer County, serves some 3,000 people. With a population of 1,301, the town has but a limited amount of industrial activity. Most of the area residents are employed by industry or commerce in the Shenango Valley or Youngstown, Ohio, areas. 127 There is virtually no competition between the two banks as the charter bank's senior officers own approximately 70 percent of the outstanding stock of the merging bank. It is clear that the influence of the charter bank is the determining factor in the formulation of the merging bank's policies. Substantial advantages of the merger will accrue to the West Middlesex public. New services such as a progressive trust department and an increased lending power will permit the resulting bank to better serve the needs and conveniences of the area. Applying the statutory criteria to the proposal, we conclude that it is in the public interest and the application is, therefore, approved. JULY 31, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL The proposed merger would permanently end such competition as exists between the participating banks already seriously compromised in existing at all due to common ownership and control. It would also eliminate the only remaining independent bank in the western part of Mercer County and further increase the already high degree of banking concentration in this area. Previous reports regarding mergers and acquisitions in this area have noted that of an original 14 separate and independent banks in Mercer County only 4 remained; and that of 38 banks with offices in the 4-county area of Venango, Clarion, Mercer, and Crawford Counties in northwest Pennsylvania, 18 have been acquired by other banks in the past 10 years. It was predicted that further acquisitions involving the remaining banks "may be expected if this merger trend is not stopped soon." This proposed merger would constitute just such a transaction. It would be a further step in a strong trend to banking concentration by merger and acquisition. Accordingly, we conclude it would have seriously adverse effects on competition. STATE BANK OF NAPPANEE, NAPPANEE, IND., AND THE FIRST NATIONAL BANK OF ELKHART, ELKHART, IND. Banking offices Total assets Name of bank and type of transaction In operation State Bank of Nappanee, Nappanee, Ind., with and the First National Bank of Elkhart, Elkhart, Ind. (206), which had merged Aug. 15, 1964, under the charter of the First National Bank of Elkhart (206) and title "The First National Bank of Elkhart County." The merged bank at the date of merger had COMPTROLLER S DECISION On June 18, 1964, State Bank of Nappanee, Nappanee, Ind., and the First National Bank of Elkhart, Elkhart, Ind., applied to the Comptroller of the Currency for permission to merge under the charter of the latter and under the title "The First National Bank of Elkhart County." The sole office of the $8.9 million merging bank is located in Nappanee, a community of 4,000 persons situated 17 miles south of Elkhart. The city services a primarily agricultural area where livestock raising is the major occupation. Some industry, particularly the manufacture of furniture and wood products, also contributes to the local economy. Because of the economies to be gained, larger operations in the hog raising, cattle feeding, and poultry fields are becoming predominant, with a resulting increase in loan demands which the merging bank is incapable of satisfying. 128 $9, 207, 063 75, 449, 430 84, 656, 493 To be operated 1 6 7 The $72.2 million First National Bank of Elkhart has four of its six offices in Elkhart and one each in the nearby communities of Bristol and Dunlap. Elkhart, a city of 42,000 on the St. Joseph and Elkhart Rivers, is situated in the north-central part of the State, 15 miles east of South Bend, and just 5 miles south of the Indiana-Michigan boundary. The service area encompasses 75,000 people and is largely industrial, although outlying farms contribute substantially to the economy. Elkhart is a railway center and its industries manufacture electronic parts, metal and paper products and pharmaceuticals. In addition, 90 companies are engaged in the manufacture of mobile homes, trailers, and related parts. There is no substantial competition between the merging banks. Accordingly, no reduction of competition nor trend toward monopoly can be foreseen. While consummation of the proposal will convert the merging bank into a branch, it will leave at least 15 directly competing offices of other banks in the immediate area. Four substantial banks in nearby South Bend, along with seven smaller banks in the area, also will continue to offer credit alternatives. The charter bank's position will not be strengthened very substantially, for while it has long been the largest bank in Elkhart, its pro rata share of banking assets in the community has been declining in recent years and its two major competitors, the $47.1 million St. Joseph Valley Bank and the $15 million First Old State Bank, have an equal number of branches in the city. The merger will offer more abundant funds and services to Nappanee and encourage the growth of that community. The benefits of seasoned executive judgment of the charter bank's officers and the use of electronic data processing will result in greater operating efficiencies. Considering the facts of this case in light of the statutory criteria, we find this merger to be in the public interest and it is therefore approved. AUGUST 14, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL The First National Bank of Elkhart is the largest bank in the Elkhart, Ind., area, holding 52.8 percent of total deposits and 53.1 percent of total loans. The proposed merger would increase First National's percentage of both deposits and loans to about 56 percent. In the Elkhart area, there are only three banks, two of which, First National and St. Joseph Valley Bank, control almost 90 percent of the total deposits and loans. In Nappanee, Ind., 17 miles south of Elkhart, an area experiencing a diversification and expansion of its industrial base, the resulting bank would dominate the area. By virtue of the dominance of the resulting bank and the high degree of concentration in the relevant area, the probable effect of the proposed merger on competition would be adverse. THIRD NATIONAL BANK IN NASHVILLE, NASHVILLE, TENN., AND NASHVILLE BANK & TRUST CO., NASHVILLE, TENN. Banking offices Name of bank and type of transaction Total assets The Nashville Bank & Trust Co. Nashville, Tenn., with and Third National Bank in Nashville, Nashville, Tenn. (13103), which had. . merged Aug. 18, 1964, under the charter and title of the latter bank (13103). The merged bank at the date of merger had COMPTROLLER S DECISION On April 27. 1964, the $341.7 million Third National Bank in Nashville, Nashville, Tenn., and the $45.9 million Nashville Bank & Trust Co., Nashville, Tenn., applied to the Comptroller of the Currency for permission to merge under the charter and with the title of the former. Nashville, in the heart of the TVA service area, is the State capital of Tennessee. With an estimated metropolitan population in excess of 400,000 persons, reflecting a 24 percent increase since 1950, Nashville's population growth compares most favorably with the 5 percent increase in population of the neighboring States of Alabama, Kentucky, Mississippi, and the rest of Tennessee, which Nashville serves. The city is the focal point of a community constituting eight counties whose residents are dependent upon Nashville for such $47, 981, 502 382,138,104 428,218,003 In operation To be operated 2 15 17 necessities as shopping, employment, and medical care. Its wholesale trade area stretches across middle Tennessee into southern Kentucky, northern Alabama, and northern Mississippi and contains an estimated population of 2,265,800 persons. This area, which bridges the North and the South of our country, enjoys a diversified economy dependent on agriculture, industry, and commerce. The growth of this economy has been spurred by the availability of abundant and cheap electric power from TVA, and by such U.S. Government installations as Redstone Arsenal at Huntsville, Ala., and the Arnold Development Center at Tullahorna, Tenn. The availability of low-cost labor, cheap power, excellent transportation facilities by air, highway and rail, gas and petroleum pipelines, and an abundant water supply favors Nashville's role as a center of the burgeoning mid-South. 129 The charter bank, founded in 1927, has grown, through capable and agressive management, into a system having 14 branch offices. It is particularly active in the correspondent banking field and now has a substantial number of correspondent banks, most of which are located within a radius of 250 miles. Within this region it competes vigorously with the large banks in northeastern Georgia, northern Alabama, western North Carolina, Kentucky and Tennessee, although holding only 3.13 percent of total regional loans and deposits. Within the Nashville wholesale trade area, which covers middle Tennessee, southern Kentucky, northern Mississippi and northern Alabama, the charter bank's share of total bank loans and deposits is but 12.5 percent. In the Nashville community, which consists of the city and eight surrounding counties, the charter bank holds about 29.7 percent of deposits while its closest competitors, the $393.3 million First American National Bank, Nashville, and the $217.4 million Commerce Union Bank, Nashville, hold 34.9 and 18.1 percent of deposits, respectively. The merging bank, chartered in 1889 as a trust company, passed through a merger and reorganization and emerged in 1956 with its present title. In 1959 the bank opened its first and only branch. Prior to January 1964, it was controlled by a wholesale grocery firm, which sold its stock in the merging bank to a syndicate controlled by insurance interests. The new owners soon found that injection of a substantial amount of capital and effort would be required both to make the bank a competitor in the Nashville area and a profitable undertaking for the owners. Having no desire to divert their attention from the insurance field and being unwilling to put large sums into the bank, these interests gave consideration to the merger route for a solution. They were prompted in part by the fact that, during the period since assuming control, deposits in the merging bank declined from $45.4 million to $39.6 million, despite an increase of $1.1 million in public fund deposits. By contrast, deposits in the other three banks in the city rose sharply after 1960 and continued to rise. Many of the merging bank's customers, who previously felt obligated to maintain deposits in the bank because of their business connections with the previous owners, the wholesale grocery firm, indicated that they were then free to move their accounts to larger banks. Additionally, the change of ownership resulted in a substantial loss of accounts in the bank's trust department. One of the most determinative factors in the consideration of this merger is the problem of management succession. This Office has stated time and again 130 that a bank is only as good as its management. In the case of the merging bank, the president is ill and anxious to retire. Further, there is no provision for succession. The dearth of young management personnel and the unlikelihood of attracting new employees to the merging bank is due to the below-average salary scale and the lack of an adequate pension plan. The present owners of the bank show no intention of instituting costly reforms to attract employees capable of making the bank a vigorous competitor, responsive to the needs of the community. As a result, the merging bank is presently noncompetitive. Only through merger with the charter bank, where the resulting bank will be a National Bank, will this Office have an opportunity to assist this noncompetitive statechartered institution as well as the people of the Nashville community. We would, indeed, be derelict in our responsibilities to protect the public interest in banking were we to impede effective management from assuming the responsibilities of a declining and leaderless merging bank. We turn now to the future earnings prospects of the applicant banks, another criterion established by law in the consideration of bank mergers. The future earnings prospects of the merging bank, in its present condition, are very gloomy. The recent substantial decline in deposits in the phlegmatic and incapacitated management bode ill for future earnings of the bank unless remedial steps are taken. If merger is the remedy, however, as we are convinced it is, the future earnings prospects of the resulting bank are excellent because of the dynamic management, existing branching system and operating efficiency of the charter bank. Only minimal competition exists between the two applicant banks due to difference in size and to diversity of market interests. As stated above, the charter bank serves numerous correspondent banks throughout its region. These correspondent banks' deposits account for 18.7 percent of the charter bank's deposits, as compared to the merging bank's correspondent deposits which amount to only 1.2 percent of the merging bank's deposits. Commercial loans make up 40 percent of the charter bank's total loans, but only 25.7 percent of the merging bank's total loans. Further contrast can be seen in the fact that, while real estate loans account for only 0.8 percent of the charter bank's loans, such loans constitute 34 percent of the merging bank's loans. While the cold statistics presented by the application may indicate at first blush that some competition now exists between the applicants and that it will be eliminated by this merger, closer analysis of the com- plete picture dispels this hasty conclusion. A bank's competitive force in its community depends greatly upon the attitude of its management and board of directors. To assess accurately competition between two banks, an effort must be made to weigh the aggressiveness, the capability, the experience and the desire of the management of each to compete. When, as in this case, we find that the management of the merging bank is more interested in insurance than in banking, has no desire to maintain the bank's relative standing in the banking community, and has made no effort to improve its internal operating procedures nor elevate the morale of its personnel through better salaries and an improved pension plan, we cannot realistically view it as a competitive bank. When a bank, such as the merging bank, is not disposed to compete, it is idle to speak of the elimination of competition by reason of a merger. The hallmark of modern banking is branch competition. The inability of the merging bank to effectively serve the public is graphically illustrated in its failure to develop a modern branching system despite the fact that it was founded in 1889. With the three largest banks in Nashville having 20, 15, and 20 offices, respectively, it is manifest that Nashville Bank & Trust Co., with a single branch, cannot compete in the important area of branching. The competition for funds in the Nashville community is not confined to commercial banks. It must be noted that savings and loan associations are particularly strong competitors. While competition is most desirable and indeed a basic tenet of the American economic system., the advantages to savings and loan associations arising from higher permissible interest and dividend rates, as well as tax privileges not available to commercial banks, make a difficult competitive situation for the banks. This fact is reflected in the 325 percent increase in savings and loan share accounts in the Nashville community since 1953 and the opening of three new savings and loan association branches during the past year. There is certainly a need for a stronger institution to compete for funds in such a market. There is no tendency toward monopoly in the Nashville area or community. The charter bank has never been involved in a merger since its founding in 1927; its rapid growth has been internal. The number of Nashville banks has not declined during the past 30 years. Indeed, a relatively new bank, the Capital City Bank, which was chartered in 1960, now has almost $7.5 million in resources and two branches. There is hardly a monopoly when a new bank can enter the market and prosper so remarkably in such a short time. One of the best qualified authorities on banking in Tennessee has recognized the fact that the merger will be a salutary development. In a letter of April 25, 1964, Mr. M. A. Bryan, Superintendent of Banks, State of Tennessee, said of the proposed merger: The competitive factor in my opinion will not be lessened by the merger. This assumption is based on the evident competition which now and will exist between existing First American National Bank, largest Nashville bank3 the Commerce Union Bank, in third position, and Third National Bank, second in size, the surviving institution of the merger between themselves and Nashville Bank & Trust Go. which holds a minor position in the field insofar as competition is concerned. Consummation of the proposed merger will improve the charter bank's ability to serve the convenience and needs of the Nashville public. It will be better able to meet the credit needs of its larger customers throughout the Nashville wholesale trade area. Automation will improve the operating efficiency for the benefit of the merging bank's customers. Increased salaries and other incentives such as the charter bank's pension plan will improve the morale of the merging bank's personnel. The more numerous banking services offered through the resulting bank's extensive branch system will better serve the needs of the merging bank's customers. Further, the assets of the merging bank will be pooled with those of the charter bank to be used more efficiently in promoting the economic well-being of the people of the Nashville community, the wholesale trade area which it serves, and the midSouth region of which it is the center. In the light of all of the facts and circumstances here present, we are compelled to conclude that this merger application has met the statutory criteria and will promote the public interest. The application is therefore approved. AUGUST 4, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL The primary area of competition involved in this proposed merger is metropolitan Nashville, an area which is coextensive with Davidson County and the outer limits of permissible branching for Nashville banks. The area is already highly concentrated with the 3 largest banks holding more than 93 percent of all deposits and loans in the 6 Nashville banks, and more than 82 percent of total deposits and loans held by all 34 banks in Davidson County, and 7 surrounding counties. The proposed merger would unite the area's second and fourth largest banks and increase concentration to a significant degree. The resulting bank 131 would be the largest lender and holder of savings deposits in the entire area with more than 40 percent of total loans held by Nashville banks and 36 percent of total loans held by all 34 banks in the 8 counties; it would hold 46 percent of all automobile loans and 33 percent of all savings deposits held by commercial banks in the area. An important source of banking credit and service would be eliminated for individual and small business borrowers in metropolitan Nashville, and the many smaller banks in the area would be further disadvantaged in their competitive efforts. The proposed merger would have a severely adverse effect upon competition in metropolitan Nashville and the surrounding area. THE FIRST SECURITY BANK OF IDAHO, NATIONAL ASSOCIATION, BOISE, IDAHO, AND THE FARMERS BANK, KENDRICK, IDAHO Banking offices Name of bank and type of transaction Total assets The Farmers Bank, Kendrick, Idaho, with was purchased Aug. 21, 1964, by First Security Bank of Idaho, National Association, Boise, Idaho (14444), which had After the purchase was effected, the receiving bank had On June 1, 1964, the First Security Bank of Idaho, National Association, Boise, Idaho, applied to the Comptroller of the Currency for permission to purchase the assets and assume the liabilities of the $3.2 million Farmers Bank, Kendrick, Idaho. Boise, with an estimated population of 60,000, is the head office of the purchasing bank and the largest city in Idaho. Located on the main line of the Union Pacific Railroad and served by numerous truck lines, the city is a distribution center for a trade area with a population in excess of 100,000. The 150 lightindustry firms in Boise are connected primarily with the basic agriculture of the State and with the construction industry. The purchasing bank, with 40 operating branches, 2 approved but unopened branches, and a facility at Mountain Home Air Force Base, serves the entire State of Idaho. It is second in size to the Idaho First National Bank, Boise, Idaho. Nine other banks, ranging in size from the Bank of Idaho, Boise, to the Bank of Central Idaho, Greenville, Idaho, compete for deposit accounts and profitable loans. Kendrick, population 450, is an agricultural community located 27 miles northeast of the major trading center of the area, Lewiston, and about 300 miles north of Boise. Although the region contains forest lands and logging operations, the economy largely depends on farms which principally produce wheat. Most of the farms are operated by the owners and are quite profitable. Together with crops and livestock operations, two grain elevators and a dry bean elevator compose the economic structure of Kendrick. 132 In operation To be operated $3, 205, 007 1 267, 058, 205 269,688,213 40 41 The selling bank is the only bank in Kendrick. The closest bank is the First Bank of Troy which is 13 miles from Kendrick. Three banks in Lewiston and three banks in Moscow, Idaho, as well as banks in two other nearby towns, extend credit to interests in Kendrick. The selling bank has conducted a limited general banking business since it was organized in 1908. It has participated very little in the real estate and the consumer loan fields. Its small lending limit is partly responsibe for the fact that a number of large farm operators, lumber firms, and warehouse enterprises in the Kendrick area secure their credit outside Kendrick. The purchasing bank, with greater resources and more aggressive policies, will meet these difficulties and increase banking convenience in the Kendrick area. The former president and largest shareholder died recently and no successor has replaced him. The bank, now being managed by the cashier who has reached retirement age, has developed no other officer. The purchasing bank will be able to solve the management succession problem in Kendrick. The merger will not change the competitive structure in Boise nor in the State at large, as the purchasing bank's share of State deposits will increase by a mere 0.4 percent. There are no common borrowers, depositors or shareholders of the applicant banks. Because the selling bank finds itself in a dilemma resulting from no management depth, the merger route is the only viable means of retaining a bank in Kendrick which would provide competition in that northwestern section of Idaho. Applying the statutory criteria to the proposal, we conclude that it is in the public interest and the application is, therefore, approved. AUGUST 18, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL The First Security Bank, the second largest with deposits of over $242 million, operates 40 banking offices, 7 of which have been acquired since 1952 with deposits of over $27 million. Farmers Bank is located in the small town of Kendrick about 19 miles distant from the closest branch of First Security. Deposits of Farmers Bank total $2,850,000. Direct competition between the participating banks is very limited. The chief competition of Farmers Bank is the First Bank of Troy, a small independent bank which will hereafter compete with the second largest bank in Idaho. First Security has 31.5 percent of all Idaho bank deposits and 29 percent of the banking offices in the State. The three largest banks in Idaho have 76.6 percent of the total deposits of all Idaho banks and 93 of the 139 banking offices in the State. Since 1952, these 3 banks have acquired 18 banks with 22 banking offices. While each acquisition of a small bank, considered separately, may not necessarily result in a substantial lessening of competition, the cumulative effect of a series of small acquisitions, of which the present is an example, must inevitably be substantially adverse. Thus, any further acquisition by Security Bank involves an adverse competitive effect and a tendency toward monopoly. FIRST NATIONAL BANK & TRUST CO., AND THE GEORGETOWN NATIONAL BANK, BOTH OF GEORGETOWN, KY. Banking offices Name of bank and type of transaction Total assets The Georgetown National Bank, Georgetown, Ky. (8579), with and First National Bank & Trust Co., Georgetown, Ky. (2927), which had. . merged Aug. 29, 1964, under charter of the latter bank (2927), and under the title "First Georgetown National Bank & Trust Co." The merged bank at the date of merger had COMPTROLLER'S DECISION On March 2, 1964, the $7.6 million First National Bank & Trust Co. and the $6 million Georgetown National Bank, both of Georgetown, Ky., applied to the Comptroller of the Currency for permission to merge under the charter and title of the former. Georgetown, the county seat of Scott County, is located in the north central part of Kentucky, 12 miles north of Lexington. This city of 7,000 persons serves a trade area with an estimated population of 20,000 persons including the Georgetown College enrollment of 1,200 students. A very rich and fertile belt of bluegrass country that is known for top grade burley tobacco and fine livestock runs through this part of Kentucky. Though, tobacco is the prime money crop, industrial activity is growing and general economic conditions in the community are healthy, with approximately 1,500 persons employed in manufacturing concerns and 1,700 in nonmanufacturing enterprises. In addition, approximately 20 percent of the eligible labor force works in Lexington. $5, 646, 609 7, 812,134 13,438,460 To be operated In operation 1 2 3 In 1962 the present owners acquired control of the charter bank by purchasing the majority of its shares. During the fall of 1963 they also gained control of a majority of the shares of the merging bank. A new loan policy and other reforms instituted in the charter bank since its purchase have resulted in a diversified and expanded loan program and in improved bank earnings. If the present ownership of the applicants is allowed to take advantage of the operational and managerial economies inherent in the elimination of duplicated efforts, both banking services and earnings of the resulting bank should show improvement comparable to that of the charter bank. Neither of the applicants has any history of acquisitions aside from the charter bank's 1963 acquisition of the small Farmers Deposit Bank of Sadieville, Ky. It is apparent from a study of liquidity ratios and earnings over the past few years that the financial condition of both banks has been and continues to be good. Other than the applicants, the only financial institutions in the community are one bank, two savings and 133 loan associations, and two loan companies. The two savings and loan associations, owned by the presidents of the merging bank and the remaining bank respectively, are used to channel off those loans that their banks prefer not to make. Of the two loan companies, only one does a significant amount of business. That loan company is controlled by the present owners of the merging and charter banks. Although three banks now serve Georgetown, there is no magic inherent in the number of three for a small community. For instance, in Frankfort, a much larger city, the community is well served by only two banks. Rather than pay obeisance to mere numbers, analysis of the effect of the proposed merger should consider the convenience and needs of the community and the effect upon competition of eliminating one bank. In the past, all three banks in the Georgetown area had provided substantially similar banking services with little or no effective competition among them. They had merely provided alternative banking sources for the community. Only recently, due to the aggressive loan policy of the charter bank, has the total loan market and the corresponding market share of each bank undergone significant change. The charter bank now makes more than 50 percent of the greatly increased total of loans made by the Georgetown banks. The following summaries of loan and deposit figures for the Georgetown banks as of December 20, 1963, are indicative of the disparate competitive efforts: The charter bank, with total deposits of $6.02 million, had total loans of $4.7 million; the merging bank, with total deposits of $4.82 million, had total loans of $2.01 million; and the third bank, with total deposits of $4.06 million, had total loans of $1.97 million. After the merger it appears that the applicants will serve the convenience and needs of the community more effectively than at present by providing superior management, better facilities, and a greater lending limit. By unifying the present staffs of each bank, those officers experienced in one field of bank operations will complement those experienced in other fields, thus resulting in more capable, experienced and continuous management. The resulting bank also intends to provide new drive-in and parking facilities for which there appears to be a great need in Georgetown. Finally, the larger lending limit of $100,000 will enable the resulting bank to actively solicit business from those who now transact their banking business in Lexington. In order to guage the effect on competition in Scott County, a comparison must be made of the competitive situation before and after consummation of the proposed merger. It is clear that before autumn 1963 134 there were three banks which, if not engaged in active competition with each other, at least were separate and distinct entities. Since the purchase of the merging bank at that time, however, only technically can it be considered a separate and distinct entity. Whatever divergence in policy existing previously that might have resulted in competition between the applicants has been eliminated. Consequently, no tenable allegation of premerger competition can be made. The effect upon competition with the remaining bank depends to a large extent upon the preferences of its customers and of the public at large. It is already the smallest of the Georgetown banks and the broader banking services available from the applicants, if their banks are permitted to merge, will undoubtedly disturb the competitive structure. However, a realinement of the competitive banking structure would be appropriate in order to provide better service to the community. Finally, although the Supreme Court has delimited the arena of competition for Lexington banks as only Fayette County, such delimitation does not forever foreclose that county to competition from outside. The applicants intend, through the expected strength of the resulting bank, to challenge the Lexington banks in Fayette County, as well as in Scott County, for the banking business of tobacco auction brokers and purchasers, large agricultural and livestock interests, and local manufacturing firms, all of which are now dependent upon Lexington banks for their credit sources. It may well be, therefore, that the great impact of this merger will be felt outside Georgetown and that the merger will have a beneficial effect upon competition in the broader Fayette and Scott County market. Applying the statutory criteria to the proposed merger we conclude that it is in the public interest and the application is therefore approved. AUGUST 28, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL The First National Bank & Trust Co. of Georgetown, Ky., as of December 31, 1963, had reported assets of $7,436,300. On the same date, Georgetown National Bank of Georgetown, Ky., had reported assets of $6,055,200. The two banks offer substantially the same banking services in the same market area and are in competition with each other. The only other competition in Georgetown is from one small bank, the Farmers Bank. Although the merging banks have recently come under the control of the same group of stockholders, we can find no justification for any further diminution of existing banking competition in the area. The resuiting bank, with over 70 percent of the I PC deposits and loans in Georgetown would clearly dominate the local banking market. We therefore conclude that the proposed merger would have serious adverse competitive effects. THE IDAHO FIRST NATIONAL BANK, BOISE, IDAHO, AND POGATELLO NATIONAL BANK, POCATELLO, IDAHO Banking offices Name of bank and type of transaction Total assets In operation Pocatello National Bank, Pocatello, Idaho (14859), with and the Idaho First National Bank, Boise, Idaho (1668), which had merged Sept. 4, 1964, under charter and title of the latter bank (1668). The merged bank at the date of merger had COMPTROLLER'S DECISION On July 2, 1964, the $282.8 million Idaho First National Bank, Boise, Idaho, and the $4.9 million Pocatello National Bank, Pocatello, Idaho, applied to the Comptroller of the Currency for permission to merge under the charter and with the title of the former. Boise, the State capital, has a population over 80,000 in a trade area of 230,000 dependent primarily on a diversified agricultural economy. Because it is well served by airlines, truckingfirms,railroad facilities, and bus lines, Boise is a distribution center for the rest of the State. The scarcity of manufacturing industries has not inhibited a continuing stable growth rate of about 5 percent per year. The Idaho First National Bank is a statewide system operating 40 branches. Its largest competitor Is the $260.1 million First Security Bank of Idaho National Association, which also operates offices throughout the State. Pocatello, located 239 miles southeast of Boise, is the second largest city in Idaho, and has an area population in excess of 52,000. It serves as the transportation and distribution point for the southeastern portion of the State, where several large industrial firms are located. Agriculture is an important segment of the local economy, which also relies upon Idaho State University with its approximately 3,000 students. The merging bank opened for business in 1959 as a satellite of the charter bank, since at that time the consent of the existing banks in Pocatello would have been required for the opening of a de novo branch by the charter bank. It competes with four offices of First Security Bank of Idaho National Association, and the $58.1 million Idaho Bank & Trust Co. $5, 228, 838 292, 692, 820 To be operated 2 41 297, 862, 393 43 Consummation of the proposed merger will allow more efficient operation and will introduce trust services to the merging bank's customers. More importantly, it will provide additional resources to meet the needs of the larger industrial and agricultural credit users of Pocatello. Beceause of the two banks' affiliated relationship and due to the distances between their offices, no elimination of competition nor trend toward monopoly is indicated. The merger merely changes the form of relationship without affecting local bank competition. Applying the statutory criteria to the proposal, we conclude that it is in the public interest and the application is, therefore, approved. SEPTEMBER 3, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL The Idaho First National Bank, the State's largest with deposits of over $256 million, operates 42 banking offices throughout Idaho. Since 1953 it has acquired 10 banks with deposits of over $36 million. The Pocatello National Bank is located in Pocatello, about 41 miles from the nearest branch of Idaho First National. Deposits of the Pocatello National Bank are $4,433,000 and it has one branch office in Pocatello in addition to its main office there. Direct competition between the participating banks appears very limited, if it exists at all. As of December 31, 1963, Idaho First National had 35 percent of all Idaho bank deposits and 28.8 percent of the banking offices in the State. The 3 largest banks in Idaho have 76.6 percent of the total deposits of all Idaho banks and 93 of the 139 banking offices in the State. Since 1952, these 3 banks have acquired 18 135 banks with 22 banking offices. Idaho First National has led this movement with its 10 acquisitions since 1953. While each acquisition of a small bank, considered separately, may not necessarily result in a substantial lessening of competition, the cumulative effect of a series of small acquisitions, of which the present is an example, must inevitably be substantially adverse. Thus, the proposed acquisition by Idaho First National would probably result in an adverse competitive effect and a tendency toward monopoly. NATIONAL BANK & TRUST GO. AT GHARLOTTESVILLE, CHARLOTTESVILLE, VA., AND THE PEOPLES BANK OF STUARTS DRAFT, INC., STUARTS DRAFT, VA. Banking offices Name of bank and type of transaction Total assets In operation Peoples Bank of Stuarts Draft, Inc., Stuarts Draft, Va., with and National Bank & Trust Go. at Gharlottesville, Charlottesville, Va. (10618), which had . merged Sept. 30, 1964, under charter of the latter bank (10618) and title "National Bank & Trust Co." The merged bank at the date of merger had . . COMPTROLLER'S DECISION On July 15, 1964, the $55 million National Bank & Trust Co. at Charlottesville, Charlottesville, Va., and $2.3 million Peoples Bank of Stuarts Draft, Inc., Stuarts Draft, Va., applied to the Comptroller of the Currency for permission to merge under the charter and with the title of the former. Charlottesville, population 34,500, is located in central Virginia near the Blue Ridge Mountains. The area's industry includes a combination of agriculture and light equipment manufacturing concerns. The University of Virginia, which employs approximately 2,100 persons and has an enrollment of 5,900 students, is located in Charlottesville. The area has enjoyed a healthy expansion during the past 10 years. The charter bank has 10 branches operating within central Virginia. In this region the charter bank's principal competition comes from the $414 million Virginia National Bank, the $452 million First Merchants National Bank and the $16 million Citizens Bank & Trust Co. Eleven banks are located in the Charlottesville service area. Stuarts Draft, population 600, is a rural, residential community in west central Virginia. Located in the Shenandoah Valley near the Blue Ridge Mountains, the community has had within the past 10 years a surge of new home construction. Several local facilities of large major industries have been established recently in the Stuarts Draft area. Since the commercial facilities of the town are limited, the bulk of shop136 To be operated $2, 442, 073 1 56, 357, 858 11 58, 772, 892 12 ping needs of the community are supplied by nearby Waynesboro and Staunton establishments. The merging bank, with no branches, is the only financial institution in the town of Stuarts Draft. The Peoples Bank of Stuarts Draft competes primarily with 8 banks operating 13 offices in the Stuarts DraftWaynesboro-Staunton area and is the eighth largest of the 9 banks serving the area. The $414 million Virginia National Bank operates 2 offices in the area. The Stuarts Draft bank, no longer able to serve adequately a community changing from a rural to a semiindustrial economy, has chosen to merge with an area bank which can offer an extensive range of financial services. The credit and trust departments of the charter bank will provide services not currently available at the merging bank. A small lending limit restricts the merging bank from actively competing to satisfy the banking needs of the new medium-sized industrial and commercial concerns in the area which depend on local institutions for financing. The competitive effect of the proposed merger will be minimal since the nearest office of the charter bank is 35 miles away in Charlottesville and the overlap of the charter bank's service area is relatively insignificant. In addition, the greater services to be offered by the proposed merger will bring about a greater degree of competition in the area of the merging bank. Applying the statutory criteria to the proposed merger, we conclude that it is in the public interest and the application is therefore approved. SEPTEMBER 21,1964. SUMMARY OF 1 TORNFY GENEFAI, The National Bank & Trust Go. at Gharlottesville had, as of April 15,1964, assets of $54,573,000, deposits of $48,426,000. loans and discounts of $26,308,000, and capital accounts of $4,631,000. It operates four offices in Gharlottesville and six offices outside of Charlottesville located from 20 to 37 miles east and south of Charlottesville. Authorization has been granted for one more branch in Gharlottesville. The Peoples Bank of Stuarts Draft, Inc., had, as of April 15, 1964, assets of $2,276,000, deposits of $2,010,000, loans and discounts of $1,512,000, and capital accounts of $266,000. It operates one office in Stuarts Draft, a town 35 miles west of Charlottesville. The service area of the banks do not appear to overlap. The application states that there is no competition between the merging banks, but there is no supporting data with respect to common depositors or lenders or the volume of loans or deposits obtained by either bank in the service area of the other. However, direct competition between the banks does not appear to be significant. This merger will have some adverse effect upon competition in the relevant markets particularly with respect to thefivesmaller banks in Peoples Bank's service area. Since these five smaller banks are already presently competing with Virginia National and First & Merchants, which between them presently account for 95.88, 95.74, and 95.83 percent of total assets, loans and deposits, respectively, the proposal would serve to aggravate an already highly concentrated area. In addition, the proposed merger eliminates one more independent bank in Virginia. When consideration is given to the increasing number of other independent banks in Virginia that have been eliminated by mergers in recent months, the cumulative effect of supplanting small independent banks by consolidations and mergers renders this proposal adverse. THE BRANFORD TRUST CO., BRANFORD, CONN., AND THE FIRST NEW HAVEN NATIONAL BANK, NEW HAVEN, CONN. Banking offices Name of bank and type of transaction Total assets In operation The Branford Trust Co., Branford, Conn., with and the First New Haven National Bank, New Haven Conn. (2), which had. . merged Sept. 30, 1964, under charter and title of the latter bank (2). The merged bank at the date of merger had COMPTROLLER'S DECISION On July 22, 1964, the $197.8 million First New Haven National Bank, New Haven, Conn., and the $6 million Branford Trust Co., Branford, Conn., made application to the Comptroller of the Currency for permission to merge under the charter and with the title of the former. New Haven is one of the industrial centers of New England. Its diversified manufacturing is primarily in the durable goods field, with the majority of the companies employing fewer than 50 workers. Having a population of approximately 152,000, the city serves as a focal point of an area of 448,000 people. Urban renewal has made the heart of the city one of the most modern in the country, and new hotel, office building and retail construction indicates that New Haven will continue to serve as a center of trade and finance in $5, 814, 623 197, 335, 681 203,150,304 To be operated 1 14 15 south-central Connecticut. New Haven has traditionally been a transportation hub, as it is the headquarters of the New Haven Railroad and the converging point of two interstate highway systems. The general economic outlook for the future is quite promising. The charter bank has 13 branches in New Haven and surrounding towns. Its major competitor in New Haven is the $115.7 million Second National Bank with nine branches. The other local banks include the $109.8 million Union & New Haven Trust Co., which has eight branches; the $24.9 million Tradesmens National Bank, New Haven, with two branches in the area; and the single-office $7.2 million General Bank & Trust Co. Several large savings banks also operate in New Haven. Besides the banks which compete directly with the charter bank, some of the largest banks in Connecticut, including the $515 million Connecticut Bank & Trust Co., Hartford, the $286 million State 137 National Bank of Connecticut, Bridgeport, and the $223 million Connecticut National Bank, Bridgeport, actively seeks accounts in the charter bank's area. Branford, population 18,800, is a residential-industrial suburb of New Haven and a summer resort. With the large percentage increase in population over the past two decades has come a trend to the establishment of local industry. There are now 51 manufacturing establishments in Branford, with metals and other durables composing a majority of these companies. The town's coast line on Long Island Sound has attracted summer, and even some year-round, residential development. The general movement to suburban areas, as well as the announced intention of several industrial firms to move to Branford, bodes fair for the development of the local economy. The Branford Trust Co. is the sole commercial bank in Branford. The $14.8 million Branford Savings Bank and the $14.2 million First Federal Savings & Loan Association are the only other financial institutions in the town. The merging bank has operated as a commercial bank since 1911. While Branford was a small, residential community, this bank and the local savings bank adequately served its citizens. The recent change in character of the town has necessitated a different role for banking there. Because of the anachronistic branch banking laws of Connecticut, however, no major bank could establish a branch in Branford while the home office of the State bank remained. That there has been a need for modern banking service in Branford is reflected in the fact that over the last two decades, the population of Branford has more than doubled and local efforts to encourage the location of industry in the town have borne fruit. The Branford Trust lending limit of $70,000 has been inadequate and its limited services cannot fill the needs of the public that it purports to serve. With an elderly executive officer who wishes to retire, the merging bank cannot operate effectively under existing conditions. There appears to be little hope of attracting able management to chart a new course because of the bank's small size and its closely held stock. The Branford Trust Co. has chosen the merger route as the solution to its predicament. By this proposal a broader range of facilities and services will serve commercial and retail banking needs of the Branford community. Its most salutary consequence, from the public standpoint, is the opening of Branford to meaningful competition. By severely restricting the range of its services and functions, the merging bank has not well met the banking needs of this growing community, nor has it been a truly competitive force there. The merger will open the town to branch banking and give its residents the benefits of a fullservice banking institution. In considering the facts of this case in light of the relevant statutory criteria, we find this merger to be in the public interest and the application is, therefore, approved. SEPTEMBER 29,1964. SUMMARY OF REPORT BY ATTORNEY GENERAL The First New Haven National Bank, the largest bank in the relevant competitive area with more than 40 percent of commercial banking assets, deposits and loans in New Haven and the relevant area, proposes to acquire one of the few remaining independent commercial banks in the growing suburban and resort area lying east of New Haven. The merger would not appear to substantially affect the banks located in New Haven but would eliminate potential competition between the merging banks and result in the substitution of a branch of the largest bank in the area for the Branford Trust Co. and thereby place the smaller banks in North Branford and Guilford at a serious competitive disadvantage. We believe that the merger would have an adverse competitive effect. THE NATIONAL BANK OF WASHINGTON, TACOMA, WASH., AND THE SPOKANE NATIONAL BANK, SPOKANE, WASH. Banking offices Name of bank and type of transaction Total assets In operation Spokane National Bank, Spokane, Wash. (14866), with and National Bank of Washington, Tacoma, Wash., (3417), which had merged Oct. 2, 1964, under charter and title of the latter bank (3417). The merged bank at the date of merger had 138 $6, 210, 207 247,159, 412 253, 369, 620 To be operated 2 31 33 COMPTROLLER S DECISION On July 27, 1964, the $236.5 million National Bank of Washington, Tacoma, Wash., and the $5 million Spokane National Bank, Spokane, W^ash., applied to the Comptroller of the Currency for permission to merge under the charter and with the title of the former. Tacoma, located on Puget Sound, is an industrial city, 30 miles west of Seattle. It ranks third in size in the State, with a population of nearly 150,000. The economy is based primarily on lumber, manufacturing and shipping. There are also several nearby military facilities which add some stimulation to the economy. The National Bank of Washington has 26 offices in western Washington and 6 in the central part of the State. It receives significant competition in Tacoma from the Puget Sound National Bank which has 14 offices, and in other areas from the Peoples National Bank of Washington, Seattle, Wash., the National Bank of Commerce of Seattle, and the Seattle-First National Bank, which, with 77 branches, is the largest in the State. The city of Spokane, population 180,000, is located in the area known as the "Inland Empire" which lies along the Canadian border in eastern Washington. It is the second largest city in the State and largely supported by agriculture and lumbering. The merging bank, 312 miles east of Tacoma, has resources of $6 million. Its main office is in down- town Spokane and its one branch is 7 miles north of the city. Competition is provided by the Old National Bank of Washington, Spokane, Wash., and several other large banks, including the Spokane and Eastern branch of the Seattle-First National Bank and the Washington Trust Bank of Spokane. Consummation of the proposed merger will allow greatly expanded and more efficient operations for the resulting bank, including trust services, investment and market research, and international banking departments. In addition, an acute management problem, which has been caused by poor health of the Chairmen of the Board will be solved. Because of the considerable distance between the two banks, no elimination of competition nor trend toward monopoly is foreseeable. In fact, competition will actually be stimulated because of the added strength of the resulting bank. Applying the statutory criteria to the proposal, we conclude that it is in the public interest and the application is, therefore, approved. SEPTEMBER 29, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL The proposed merger would not eliminate any substantial competition between the two banks but it would adversely affect competition by contributing to a pronounced merger trend by which the larger Washington State banks are acquiring many viable small and medium-sized banks. THE MARINE NATIONAL BANK OF ERIE, ERIE, PA., AND THE CITIZENS NATIONAL BANK OF CORRY, CORRY, PA. | Name of bank and type of transaction The Citizens National Bank of Corry, Corry, Pa. (4479), with and the Marine National Bank of Erie, Erie, Pa. (870), which had merged Oct. 2, 1964, under charter of the latter bank (870), and with the title "Marine National Bank." The merged bank at the date of merger had. COMPTROLLER S DECISION On August 3, 1964, the $42.1 million Marine National Bank of Erie, Erie, Pa., and the $10.9 million Ciitzens National Bank of Corry, Corry, Pa., applied to the Comptroller of the Currency for permission to merge under the charter of the former and with the title of the Marine National Bank. j Total assets $10, 963, 243 43, 002, 848 53, 966, 092 Banking offices In operation To be operated 1 5 6 Erie, with a population of over 134,000 in a metropolitan area of about 250,000, is an industrial city located on Lake Erie in the northwestern part of the State. Its lake port facilities can accommodate oceangoing ships carrying coal, iron, and grain. The local economy is supported by many national manufacturing companies and is supplemented by agriculture in the surrounding areas. 139 Located 32 miles southeast of Erie is the city of Gorry. With a population of over 7,700 and serving a trade area of 20,000, the city is located on the main line of the Erie Railroad and has access to good highway connections. The local economy depends on a number of small manufacturing industries employing some 7,000 people. The charter bank has experienced slow growth over the years due to its ultraconservative management and its late entry into branch banking. However, since 1956, it has established four de novo branches in the Erie area. It is the third largest commercial bank in its area and competes with the $102 million First National Bank, the $87.2 million Security Peoples Trust Co., the $31.1 million Union Bank & Trust Co., and the $12.8 million Bank of Erie, all of Erie. The charter bank has recently retained as its president the young, aggressive former president of the merging bank. This change of management was designed to modernize the charter bank. Now faced with a serious management succession problem, the merging bank desires to continue its progress under the former president. This proven management leadership should be continued. There is no competition between the two institutions. Consequently, consummation of the proposed merger will not diminish competition. Competition from other banks and financial institutions will continue to offer alternate sources of adequate credit to customers in the merging bank's area and the charter bank's position with respect to the other banks in Erie will remain unchanged. Applying the statutory criteria to the proposed merger, we conclude that it is in the public interest and the application is, therefore, approved. SEPTEMBER 30, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL The Marine National Bank of Erie is the third largest bank in Erie, Pa. The Citizens National Bank of Corry is a small unit bank operating 30 miles from Erie. Although there does not appear to be any presently existing competition between these banks, it would appear that Marine is in a position to seek loan accounts in the area now served by Citizens. Approval of this merger would eliminate such potential competition. Merger with Citizens would not appear to materially enhance Marine's position in Erie, although it would increase somewhat the concentration in this area. The more serious effect of this merger, we believe, would be felt among the small banks competing with Citizens, particularly the National Bank of Corry, which is the only other bank operating in the town where Citizens is located. The National Bank of Corry and the other small independent bank that would remain after this merger (National Bank of Union City) would be faced with competition from a branch of a much larger bank. This factor, plus an increase in concentration existing in the western portion of Erie County, may make the continued existence of these small independents more difficult. For these reasons we believe that approval of this merger will have a slight adverse effect on competition. THE CITIZENS NATIONAL BANK & TRUST CO. OF ONEONTA, ONEONTA, N.Y., AND THIS NATIONAL COMMERCIAL BANK & TRUST CO., ALBANY, N.Y. Banking offices Name of bank and type of transaction Total assets In operation The Citizens National Bank & Trust Co. of Oneonta, Oneonta, N.Y. (8920), with and National Commercial Bank & Trust Co., Albany, N.Y. (1301), which had. . merged Oct. 2, 1964, under charter and title of the latter bank (1301). The merged bank at the date of merger had COMPTROLLER'S DECISION On July 29, 1964, the $437 million National Commercial Bank & Trust Co., Albany, N.Y., and the $13 million Citizens National Bank & Trust Co. of Oneonta, Oneonta, N.Y., applied to the Comptroller 140 SI 3, 273, 644 455, 320, 050 468, 482, 429 To be operated 2 39 41 of the Currency for permission to merge under the charter and title of the former. Albany, the site of the home office of the charter bank and 5 of its 35 branch offices, is the capital of the State of New York. Located at the hub of a rail, highway, and water transportation system which serves the )tc*fe^, the city Is also a the C*. setts D c! u fi Air .in i )i is branches in nearby \,i'^i er are distributed ' '<=IK i.versified area, which i the hoi > >£i i , 'i 150 miles north to nan borne ^ iv lev - i st to the Massachu-r WO nnl •, west J 60 miles south. The i-k's mos1 v + ve (OToetition arises in the \ cTtd «n v h r i t r n e arc 34 offices of un! conn throi 1 se\en r lficiii! b alvs Or-oii+a, pjpulrtion 13 300, is the site of the merging bank. Located 85 miles southwest of Albany and 20 miles south of the charter bank's nearest branch, it is the chief trading center for Otsego County. The county's economic base is agricultural with dairy farming the predominant source of income. The competition that exists between the applicant banks is negligible. The deposits and the loans of the charter bank's three branches in Otsego County account for only 0.6 and 0.56 percent respectively of the charter bank's overall deposits and loans. The impact of the merger will be greatest in Oneonta, where the $23 million Wilber National Bank, the only other commercial bank in town, welcomes the entrance of National Commercial as a stimulant to competition. The resulting bank will benefit the Oneonta area by the introduction of services not now offered to residents and by offering the residents a choice of sources for services now offered only by the Wilber National Bank. New services which, for the first time, will be offered residents are certificates of deposit, accounts receivable financing, education loans, equipment leasing, investment services, and area develop* * ment services to assist in community planning and growth. The overall benefits derived from the proposed merger, couplied with the fact that competition can be expected to increase, make it apparent that the resulting bank will improve banking services in the Oneonta area. Applying the statutory criteria to the proposed merger, we conclude that it is in the public interest and the application is therefore approved. SEPTEMBER 29, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL The proposed merger seeks to bring together National Commercial Bank & Trust Co., one of northeastern New York's largest banks, with assets of $436,581,000 and 38 offices in Albany and other important upstate areas, and Citizens National Bank & Trust Co. of Oneonta, a much smaller independent bank with two offices in Oneonta and assets of $13,103,000. National has within the last 8 years acquired three banks within 20 miles of Citizens, the last such acquisition taking place in January of 1964. The proposed merger will eliminate some degree of actual and expected future competition between the two institutions and will add to the concentration and elimination of independents that has already occurred in Otsego County and the greater service area of National. Although it will offer Oneonta the advantages of a large institution, such advantages are already present in some measure and there v/ill be eliminated from Otsego County a unit bank competitor that has shown growth over the years in a static area. For these reasons we conclude that the effects of the proposed merger on competition will be adverse. * THE WESTERN PENNSYLVANIA NATIONAL BANK, MCKEESPORT, PA., AND THE CITIZENS NATIONAL BANK OF BEAVER FALLS, BEAVER FALLS, PA. Bankin g offices Name of bank and type of transaction Total assets Citizens National Bank of Beaver Falls, Beaver Falls, Pa. (14764), with. and Western Pennsylvania National Bank, McKeesport, Pa. (2222), which COMPTROLLER S DECISION On June 26, 1964, the $512 million Western Pennsylvania National Bank, McKeesport, Pa., and the $6.3 million Citizens National Bank of Beaver Falls, Beaver To be operated $6,107, 963 530, 002, 302 consolidated Oct. 3, 1964, under charter and title of the latter bank (2222). The consolidated bank at the date of consolidation had In operation 536,110,264 : 49 Falls, Pa., applied to the Comptroller of the Currency for permission to consolidate under the charter and with the title of the former. McKeesport is an industrial city of 45,000 people, 141 separated from Pittsburgh by only 2 miles. Both cities are located within Allegheny County and their economies are based on steel production. Beaver Falls, population 16,000, is located 33 miles northwest of Pittsburgh in Beaver County. Its economy, like that of Pittsburgh and McKeesport, is founded primarily upon the steel industry, as is that of the entire industrial complex which is coterminous with the Pittsburgh Standard Metropolitan Statistical Area. This area includes Allegheny, Beaver, Washington, and Westmoreland Counties. Since 1953, the Western Pennsylvania National Bank has attained a phenomenal growth record under dynamic executive leadership. During this period its assets have increased from approximately $50 million to the present $512 million. The charter bank now offers significant competition to the Mellon National Bank and to the Pittsburgh National Bank. To further competition, Western Pennsylvania has requested and received permission to move its head office from McKeesport to Pittsburgh. There is little competition between the applicant banks. The charter bank does not have an office in Beaver Falls, while the Citizens' two offices are located there. Western Pennsylvania's nearest office is in New Brighton, which is on the opposite side of the Beaver River some 3 miles away from the consolidating bank's head office. Citizens, however, competes with other commercial banks which operate seven offices in Beaver Falls, including two offices of the Mellon National Bank. Beaver Falls will be benefited by this consolidation. Citizens National has been unable to attract adequate capital to support the size of its present operations. It has also been unable to meet the credit needs of its service area which is limited to the immediate vicinity of Beaver Falls. The resulting bank will be able to offer to the public many new specialized banking serv- ices, including a trust department. It will likewise offer a full range of consumer financing and installment loans which will provi.de more effective competition for the many finance companies now operating in the area. Applying the statutory criteria to the proposed consolidation, we conclude that it is in the public interest and the application is therefore approved. SEPTEMBER 28, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL Commercial banking in the Pittsburgh (Allegheny County) area, the primary service area of the Western Pennsylvania National Bank, is very highly concentrated, to a large extent as the result of past acquisitions and mergers. Western itself is the third largest bank serving the Pittsburgh area and has, since 1953, acquired 20 small- and medium-sized banks, most of them in Allegheny County. Approval of the instant consolidation would further an existing tendency toward monopoly and will eliminate existing competition between Western and Citizens. As recently as February 1964, Western acquired a bank in Citizens' service area, only 1 mile from Citizens' nearest office. As a result of the proposed consolidation, the small local banks operating in this service area will be confronted with four more branches of this large Allegheny County bank in addition to the branches of Pittsburgh's largest and fourth largest banks already there—Mellon National Bank & Trust Co. and the Union National Bank of Pittsburgh. This situation may impose such a handicap on the remaining small banks that they will be forced to seek similar consolidations thereby eliminating all local banks in the area. In all respects, therefore, the effect of this proposed consolidation upon competition must be deemed to be adverse. MARINE MIDLAND NATIONAL BANK OF SOUTHEASTERN NEW YORK, POUGHKEEPSIE, N.Y., NATIONAL BANK, LIBERTY, N.Y. AND COMMUNITY Banking offices Name of bank and type of transaction Total assets To be operated In operation Community National Bank, Liberty, N.Y. (10037), with and Marine Midland National Bank of Southeastern New York, Poughkeepsie, N.Y. (465), which had merged Oct. 9, 1964, under charter and title of the latter bank (465). The merged bank at the date of merger had 142 $26, 034, 886 3 104, 687, 940 6 130,740,826 9 COMPTROLLER'S DECISION On May 28, 1964, the $95.5 million Marine Midland National Bank of Southeastern New York, Poughkeepsie, N.Y., and the $23.4 million Community National Bank, Liberty, N.Y., applied to the Comptroller of the Currency for permission to merge under the charter and with the title of the former. Poughkeepsie, county seat and principal city of Dutchess County, is located about 78 miles north of New York City and has a population of over 38,000 in a trade area of about 250,000. The economy of Dutchess County depends on light manufacturing, related service industries, some heavy manufacturing and considerable dairy farming and fruit growing. The Marine Midland National Bank maintains its main office and one branch in Poughkeepsie and four other brandies located outside of the city. Its chief competitors are the $139.7 million Poughkeepsie Savings Bank, the $27.3 million Farmers-Mattewan National Bank, the $26.3 million Dutchess Bank & Trust Co., and the $17.2 million Fallkill National Bank & Trust Co. Moreover, the charter bank, as a member of the Marine Midland group, enjoys the services and connections of a large statewide bank holding company. Liberty, with a population of 4,700 in a trading area of 16,000, is located in Sullivan County 56 miles west of Poughkeepsie and 108 miles northeast of New York City. It shares in the Catskill Mountain resort economy which attracts over 2 million visitors a year to the area. Existing resort facilities include about 300 hotels, many of which can accommodate over 500 guests, some 1,200 bungalow colonies averaging 8 units, about 50 motels, and 100 trailer courts. In addition, rental cottages, campsites and other lodgings abound in the area. In recent years, there has been an increase in the development of winter sports to encourage year-round activity in the region. This project has encouraged further expansion of existing facilities. The merging bank, quartered in Liberty with branch offices in South Fallsburg and Woodbourne, ranks second among eight commercial banks in Sullivan County. Its deposit structure fluctuates considerably because of the seasonal nature of the resort business, with the result that it does not possess the deposit stability nor the legal lending limit which would permit substantial financing of resort and agricultural enterprises on a long-term basis. Consummation of the proposed merger will introduce into Sullivan County a bank with deposit stability and a lending limit sufficient to meet the credit needs of an expanding resort industry. Further, the customers of the merging bank will have available for the first time trust and other banking services not offered by the merging institution. The pool of trained employees of the charter bank and the Marine Midland system will benefit the merging bank and improve its operating efficiency. While the banking structure of Poughkeepsie will not be altered by the merger, the competitive climate of Sullivan County will be considerably improved by the introduction of a strong, full-service institution. Since the applicants are over 50 miles apart and do not compete with each other, no reduction of competition or trend toward monopoly is foreseeable. The residents of Dutchess and Sullivan Counties will continue to have available adequate competing sources of bank services and credit. Applying the statutory criteria to the proposal, we conclude that it is in the public interest and the application is therefore approved. OCTOBER 5,1964. SUMMARY OF REPORT BY ATTORNEY GENERAL Community National is one of eight commercial banks in Sullivan County, N.Y., and claims that it competes with three additional banks, two located in Ulster County and one in Orange County. Community National ranks third among all 11 banks, with 11.9 percent of total deposits. The three largest account for 60.3 percent of the total deposits. If the merger is effectuated, the resulting bank, Marine Midland of Southeastern New York (based in Poughkeepsie, Dutchess County, 56 miles from Liberty and with no existing branch in Sullivan County) would have 40.8 percent of the deposit total of all 11 competing banks, and the 3 largest banks would have 73.3 percent of the deposit total. A merger trend has already occurred among the Sullivan County banks, three banks having disappeared through merger in the past 4 years, and an application is pending to merge a fourth (apart from the instant application). The proposed merger would substitute the multibillion Marine Midland banking organization in Sullivan County in place of the present independently owned and operated Community National Bank. The resulting bank will have a far greater lending limit and far greater resources than any bank in the county and surrounding area. Competition for Community National's loan participations and correspondent relationships will diminish or be foreclosed since the resulting bank will probably deal with its sister banks in the Marine Midland group. 143 The merger will cause an imbalance in the structure of commercial banking in Sullivan County, may diminish the competitive prospects of the other banks in the area, and may increase the trend of mergers and undue concentration and monopoly of banking in Sullivan County. Apart from the merger's adverse effects on competition in commercial banking in Sullivan County, it could have adverse competitive effects on the banking industry elsewhere in New York State. The concentration of banking resources and offices under the single control of one organization, the Marine Midland holding company, will be increased. The unique and competitively favorable posture of Marine Midland as the only statewide banking organization in the State will be strengthened by its entrance into Sullivan County via this merger. This may increase the pressure for the formation of other comparable bank holding companies in New York. We conclude, therefore, that the competitive effect of this merger may be substantially adverse. THE TENNESSEE BANK & TRUST CO., HOUSTON, TEX., AND THE HOUSTON NATIONAL BANK, HOUSTON, TEX. Banking offices Total assets Name of bank and type of transaction In operation Tennessee Bank & Trust Co., Houston, Tex., with and Houston National Bank, Houston, Tex. (9353), which had merged Oct. 16, 1964, under charter and title of the latter bank (9353). The merged bank at the date of merger had COMPTROLLER'S DECISION On September 8, 1964, the $44.6 million Tennessee Bank & Trust Co., Houston, Tex., and the $86 million Houston National Bank, Houston,, Tex., applied to the Comptroller of the Currency for permission to merge under the charter and title of the latter. Houston, whose 1964 estimated population of over 1 million represents increases of 70.3 percent over 1950 and 57.4 percent over 1960, is the sixth largest city in the United States and is the largest in the Southwestern States of Texas, Oklahoma, New Mexico, and Arizona. Its standard metropolitan area is defined as Harris County, an area of 1,730 square miles with a population of 1.3 million. Houston is the center of what is known as the Upper Texas Gulf Coast area, which consists of 11 counties whose 1960 population was almost 2 million. This trade area runs approximately 21 miles north, 57 miles south, 100 miles east, and 86 miles west of Houston. Since 1950, the Upper Texas Gulf Coast area has nearly doubled its population, and has undergone a significant change in its economy which 10 years ago was primarily agricultural. Today, this region boasts the largest concentration of oil, gas and petrochemical refining, processing and manufacturing plants in the world, and is one of the fastest growing industrial areas of the Nation. It is served by six deep water ports 144 $52, 341, 796 89, 292, 080 140, 745, 393 To be operated 1 1 1 which are connected by the Inter-Coastal Waterways. The largest of the six is the port of Houston, connected to the Gulf of Mexico by a 50-mile ship channel. In 1950 the port of Houston moved 41.9 million net tons; in 1962 that figure reached 57.8 million, thus making the port the third largest port in the country in terms of tonnage moved. Three hundred national firms have offices or outlets in downtown Houston, and within the city's corporate limits are 115 firms which employ more than 300 people each. Twenty-five of them employ more than 1,000 persons. Along with its population boom, retail sales in the city have increased by 50 percent to a total of $1.5 billion in 1962. Adding to the already booming economy is the 2-year old National Aeronautics and Space Administration's Manned Spacecraft Center, located 22 miles from Houston. Ten colleges in the area have a student enrollment of 23,669, the largest being the University of Houston, with 13,665 students. Metropolitan Houston is currently served by 79 banks, with several others approved but not yet open for business. Thirteen of these banks are located in the downtown business district of Houston, 44 banks are located in the suburbs, arid 22 banks are located in Harris County, outside of Houston. These commercial banks hold approximately 3 billion deposits and 1.7 billion in loans. The First City National Bank is the largest with total resources of $903 million with 26.2 percent of deposits and 22.5 percent loans, followed by the $812 million Texas National Bank of Commerce with 22.9 percent of deposits and 22.3 percent of loans and the $541 million Bank of Southwest, National Association, with 14.6 percent of deposits and 17.1 percent of loans. In fourth place is the Charter Bank with total resources of $86 million. With the approval of this merger the Charter Bank's assets will be $130 million and will account for 3.75 percent of the total deposits and 3.79 percent of the total loans in the metropolitan area. Though remaining in fourth position, the resulting bank will be but one-fourth the size of the third largest bank. There, are 20 savings and loan associations in Houston operating a total of 15 branches in addition to their main offices. Also competing in the area are over 200 credit unions, 200 life insurance companies, and 75 sales finance companies. The resulting bank will offer more effective competition to the 3 larger banks and the effect on the other 74 smaller banks will not be adverse. Although a minimal degree of competition will be eliminated between the merging banks, it is not considered significant. We are fortified in this view by the advisory opinions of the Federal Reserve Board and the Federal Deposit Insurance Corporation. In its advisory report on the competitive factors the Federal Reserve Board stated: During a field investigation, officials of all the larger downtown banks and three Independent suburban banks indicated that the instant proposal would not have an adverse effect on the competitive picture in Houston. While consummation of a merger between Houston National Bank and Tennessee Bank & Trust Co. would eliminate some existing competition and potential for more competition between the two banks, it might stimulate competition among the larger banks without unfavorable competitive effects on smaller banks. Numerous alternative banking facilities would remain available in the Houston area, and the overall effect of the proposed transaction on competition would not be significantly adverse. In the same vein the Federal Deposit Insurance Corporation found: Under the proposal, a small unit bank would be eliminated and there might be some elimination of competition. However, competition between the merging banks which might be eliminated is not regarded as significant. Common deposits and loans are minimal and the functions of the merging banks have been more complementary than competitive. In addition, neither merging hank is a significant factor in the overall competitive area by virtue of size alone. Neither the increased concentration of banking resources nor the competition which might be eliminated is sufficient to be of adverse significance and it is concluded that the overall effect of the proposed merger on competition would not be unfavorable. Furthermore, no evidence appears in the record indicating that the enhanced competitive capacity of the resulting bank will work adversely upon any competing bank in Harris County. The stringent antibranch banking statute is another cogent argument in support of this merger. By maintaining the strict prohibition against branch banking, the Texas Legislature has chosen to ignore the ascending economic fortunes of a growing industrial society in Texas. Approval of the merger will recognize the need to marshall capital sufficient to meet the credit requirements of the State's economic growth, and offset in part the economic waste resulting from the proliferation of numerous unit banks, each with its own capital structure, premises and personnel. The State's persistence in maintaining a unit banking system designed for a rural economy of 50 years ago impedes its ability to realize its economic potential and fulfill the destiny for which it is striving. Applying the relevant statutory criteria to the proposal to merge, we conclude that it is in the public interest and the application is therefore approved, effective at the close of business, Friday, October 16, 1964, Houston time. OCTOBER 15, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL Houston National is the fourth largest commercial bank and trust company in Houston, with assets of $86,081,000, deposits of $74,725,000, and loans of $42,535,000. Tennessee Bank (which is controlled by Tennessee Gas Transmission Co., one of the largest public utility companies in the Nation) is the tenth largest bank in Houston, with assets of $44,615,000, deposits of $38,623,000, and loans of $22,512,000. Both applicants offer trust services, and both have extensive correspondent bank activities. Each has its office in downtown Houston (under Texas law commercial banks are not permitted branch offices). Until April 1963 Tennessee Bank was located at 306 Main Street, just one block south of Houston National's office at 202 Main Street. Metropolitan Houston is coterminous with Harris County. There are 79 banks in this area, of which at least 22 are reported to be closely associated with one of the three largest, downtown banks. These three institutions and their associated banks together 145 hold about 72.5 percent of the area's deposits. This heavy concentration is in large part the direct result of three major consolidations since 1953 which combined Houston's then six largest, downtown banks into the three which now dominate the area. Houston National, with 2.4 percent of Harris County's deposits, is the next largest downtown bank. Tennessee Bank, since its affiliation with Tennessee Gas Transmission Co. in 1961, has increased its deposits from $2,289,000 to $38,623,000, and now holds 1.6 percent of the county total. The proposed merger would eliminate direct competition in commercial banking and trust business, in- cluding correspondent banking services, between two substantial downtown Houston banks. It would result in a relatively slight percentage increase in concentration in the four largest Houston banks, from about 74.9 percent to about 76.3 percent, but in view of the concentration which already characterizes the market that increase is not insignificant. Moreover, the resulting bank would possess such competitive advantages as might result from being affiliated with one of the largest public-utility companies in the United States as to raise serious competitive problems. We conclude that the effect of the proposed merger on competition would be seriously adverse. THE ONEIDA NATIONAL BANK & TRUST CO. OF CENTRAL NEW YORK, UTIGA, N.Y., AND THE CITIZENS NATIONAL BANK OF POLAND, POLAND, N.Y. Banking offices Name of bank and type of transaction Total assets The Citizens National Bank of Poland, Poland, N.Y. (9804), with and the Oneida National Bank & Trust Co. of Central New York, Utica, N.Y. (1392), which had merged Oct. 16, 1964, under charter and title of the latter bank (1392). The merged bank at the date of merger had COMPTROLLER S DECISION On August 10, 1964, the $163.5 million Oneida National Bank & Trust Co. of Central New York, Utica, N.Y., and the $2.6 million Citizens National Bank of Poland, Poland, N.Y., applied to the Comptroller of the Currency for permission to merge under the charter and with the title of the former. Utica, a city of 100,000 with a 2-county trade area of about 250,000, is an industrial and commercial center in central New York State, located about 50 miles east of Syracuse and 90 miles northwest of Albany. The economy of the area is dependent on industry and agriculture, and several nationally prominent industrial firms provide a substantial portion of the area's income. The New York Thruway and the New York Central Railroad move goods and traffic through the region with ever-increasing volume. Although recent reductions in defense contract spending have caused some local unemployment, expansion of other industry is expected to counteract this situation. Poland, a residential suburb located about 15 miles northeast of Utica, has a population of 575. Its economic growth has been moderate but steady in recent years. The main industry is lumber manufacturing, 146 To be operated In operation $2, 865, 897 1 167,647,231 15 170, 513,128 16 and in the immediately surrounding area, agriculture and dairy farming. The charter bank has nine branches in Oneida County and five branches in Herkimer County. There are nine commercial banks, three savings banks, and six savings and loan associations in the OneidaHerkimer trade area operating 47 offices. The charter bank holds 23.2 percent of total deposits in the area, while its largest commercial bank competitors, the $155.8 million Marine Midland Trust Co. of the Mohawk Valley, and the $171.1 million Savings Bank of Utica, both headquartered in Utica, hold 22 and 25.1 percent, respectively. The merging bank, possessing about 0.4 percent of area deposits, experienced all of its increase in deposits in recent years in the category of time deposits and public funds, whereas demand deposits have trended downward. Its sole office represents the only banking facility in Poland. Its closest competitor is a branch of Marine Midland Trust Co. located 8 miles east of Poland, in Middleville. The inability of the merging bank to offer either sufficient credit, or a full range of banking services has forced many customers to go to the branch of the Marine Midland Trust Co., in Middleville. Consum- mation of the proposed merger will bring to the merging bank's service area trust services, farm credit specialists skilled in agricultural financing, a larger line of credit, and other advantages of full-service banking not presently available to the merging bank's customers and required for area growth. The merger will have no effect on the banking industry in Utica, nor will it eliminate any competition between the merging institutions. In light of the statutory criteria, we conclude that the proposed merger is in the public interest, and the application is, therefore, approved. OCTOBER 14, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL The proposed merger between Oneida and Citizens would have an adverse effect upon competition in Oneida and Herkimer Counties as well as the smaller area within and around Poland, N.Y. Of the eight banks competing in the two-county area, Oneida presently holds 42 percent of the assets, 43 percent of the total deposits and 43 percent of the loans. It is the largest bank competing in this area. Very close to Oneida in size is the Marine Midland Trust Co. of the Mohawk Valley which holds 41 percent of the assets, 42 percent of the loans and 40 percent of the deposits. Combining these two institutions they hold 83 percent of the assets, 83 percent of the deposits, and 85 percent of the loans. Moreover they control 28 of the 34 banking offices in the two-county area—82 percent. This two-county area has a sound economic base supported by heavy industry and agriculture, among other industries. In Citizens' service area of Poland-Cold Brook-Newport, Citizens is the only bank. The nearest bank is a branch of Marine Midland Trust Co., located 8 miles east. The proposed merger would result in the two largest banks in the two-county area becoming the sole source of commercial banking services in and around Citizens' service area. Moreover, this proposed merger represents a further attempt by Oneida to grow through the acquisition of other banks and a further step by the urban banks in these two counties to acquire the rural banks. Considering the size of the remaining competition in these two counties, failure to stop this present merger trend may result in the present two largest banks in the two-county area becoming the only banks therein. The proposed merger would have an adverse effect upon competition. THE FIRST NATIONAL BANK AT MOUNDSVILLE, MOUNDSVILLE, W. VA., AND MARSHALL COUNTY BANK, MOUNDSVILLE, W. VA. Banking offices Name of bank and type of transaction Total assets In operation Marshal] County Bank. Moundsville, W. Va., with and First National Bank at Moundsville, Moundsville, W. Va. (14142). which had '. merged Oct. 17, 1964. under charter and title of the latter bank (14142). The merged bank at the date of merger had COMPTROLLERS DECISION On July 31, 1964, the $5.3 million, First National Bank at Moundsville, Moundsville, W. Va., and the $2.6 million Marshall County Bank, Moundsville, W. Va., applied to the Comptroller of the Currency for permission to merge under the charter and with the title of the former. Moundsville, with a population of over 15,000 in a service area of about 23,000, is located on the Ohio River, south of Wheeling, in the northern panhandle of the State. The service area of the two banks depends on a mixed economy of industry and agriculture. To be operated $2, 512, 703 1 5, 946, 175 1 8, 556, 138 1 Population and economic growth in recent years have been rather static. Although the area is threatened with the possible loss of a major employer, its economy may receive some stimulus through increased activity of several nearby chemical plants, by expansion of the mining industry, and by enlargement of existing industry. The charter bank was organized in 1901. During the past 10 years it has not acquired any other bank. Other commercial banks operating in the charter bank's service area are the $7.8 million Mercantile Bank & Trust Co. and the $3.7 million Bank of McMechen. 147 The merging bank was organized in 1881 and has experienced a slow rate of growth. Its president is now ill, and since there is no qualified successor to take the president's place, a management succession problem is present. Although the bank's owners have been seeking to sell their controlling interest for many years, the earnings have not been sufficient to attract purchasers. Since it is evident that the Moundsville area cannot support four banks in a prosperous condition, elimination of one institution will produce a healthier climate for the remaining banks. The resulting bank, able to achieve some reduction in operating expenses by consolidating bookkeeping facilities and by more efficient use of personnel, will be in a position to provide better banking service to the public. Upon completion of the merger, the resulting bank will seek to offer trust services for the first time. Although the two banks are located across the road from each other, consummation of the proposal can hardly be expected to eliminate any meaningful competition because of the long standing noncompetitive relationship between them. The resulting bank will be comparable to the largest bank in the area, the Merchantile Bank & Trust Co. Moreover, the prohibition of State law against branch banking impedes competition by preserving for each bank an exclusive sphere of operation unchallenged by any other bank. Applying the statutory criteria to the proposal, we conclude that it is in the public interest and the application is, therefore, approved. SEPTEMBER 29, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL Four unit banks presently compete in the Moundsville-Glendale (West Virginia) service area which is common to both participating banks. The proposed merger would eliminate presently existing competition between the participating banks. It will also concentrate in the three unit banks remaining after the merger commercial banking service for an area with a population of 23,000. It would appear therefore that the merger will have an adverse effect on competition in the relevant service area. FIRST SECURITY BANK OF IDAHO, N.A., AND THE FIRST SECURITY BANK OF TWIN FALLS, TWIN FALLS, IDAHO Banking offices Name of bank and type of transaction Total assets In operation First Security Bank of Twin Falls, Twin Falls, Idaho, with and First Security Bank of Idaho, National Association, Boise, Idaho (14444). which had merged Oct. 23, 1964, under charter and title of the latter bank (14444). The merged bank at the date of merger had COMPTROLLER S DECISION On August 24, 1964, the $263 million First Security Bank of Idaho, N.A., and the $3.6 million First Security Bank of Twin Falls applied to the Comptroller of the Currency for permission to merge under the charter and title of the former. Boise, capital of Idaho and home of the charter bank, lies in the southwestern section of the State approximately 450 miles southeast of Portland, Oreg. The city has a population of about 60,000 persons and is the center of a metropolitan trade area containing 230,000 persons. Although relatively little industry has located in Boise, the city serves Idaho as the focal point for numerous airlines, trucking firms, and railroads so that it has been able to draw on surrounding areas of Idaho for its economic support. 148 To be operated $3, 865, 08S 1 264, 478, 563 42 268, 343, 651 43 While Idaho emphasizes agriculture and related activities such as the production of livestock, it has, in common with its neighbor States, an abundance of natural resources that augments its diversified agricultural economy. Twin Falls, home of the merging bank, is located 135 miles southeast of Boise. It has a population of 21,000 persons and serves a trade area of nearly 45,000 persons living in the south central section of the State. As in the rest of the State, agriculture and related activities comprise the main economic pursuit in the area and, in addition, a number of food processing plants provide employment. The livelihood of about one-fourth of the population is based on either the production or processing phases of such agricultural activities. Both the charter and merging banks are controlled by the First Security Corp. of Utah, an interstate bank holding company with extensive interests in the Rocky Mountain area. The charter bank had attempted to branch into Twin Falls in the late 1950's, but the banks already operating there took advantage, of the anticompetitive Idaho "consent" law, since repealed, to deny it access. In order to have a presence in the city, the interests behind the charter bank arranged the organization of the merging bank in 1959. Under State law, however, the merging bank was forced to wait 5 years before participating in any merger. In the interim the two banks have worked very closely, with the charter bank handling the vast majority of business unable to be carried by the merging bank, so that in effect the applicants have functioned as affiliates and do not compete with each other. The charter bank is a statewide system operating 42 branches. Its largest competitors are the $283 million Idaho First National Bank, which operates 40 branches throughout the State, and the $90 million Bank of Idaho, which also operates branches throughout the State. The merging bank, which has only 10 percent of the community's total loans and 7.5 percent of its total deposits, is by far the smallest of the three in Twin Falls. The other two banks are nearly equal in size, one being a $20 million institution and the other a $24 million institution. Nonbank financial institutions are also active in Twin Falls, with savings and loan associations, insurance companies, credit unions, and various Federal lending agencies located there. In attempting to meet the needs of the community, the merging bank has concentrated on supplying credit, since its small size prohibits it from offering such other important items as a trust department or automated customer services. While it has found a strong desire in the area for credit in the categories of farmer loans, real estate loans, and consumer loans that has not been met by the other two banks, it has been unable to attract a sufficient amount of deposits to enable it to meet this demand and expand its activities further. As a result of the failure to attract more deposits, the merging bank has had to sell a substantial dollar amount of commercial and real estate loans. The loan demand on the merging bank, however, is indicative that residents of Twin Falls recognize that it is attempting to serve the community better than its competitors. Taking into account the close relation between the applicants, there is little doubt that the policies of the merging bank will be continued and that the charter bank's resources will enable it to meet more adequately all the demands made on it. Additionally, the charter bank will offer many services new to the community such as an active trust department and automation of its accounts. Consummation of the proposed merger will have a minimal effect on the Idaho banking structure since the charter bank will gain little more than 1 percent in assets and only one new branch. Only in Twin Falls will the banking structure be altered significantly and there the change will benefit the community. While one small bank will be eliminated, a branch of a bank more suited to offering services needed by the 45,000 persons living in the area will replace it. At the same time, the remaining two banks have lending limits sufficiently large to meet the credit needs of the community without strain and they are so well-established that they may anticipate little, if any, shifting of accounts to the charter bank. Twin Falls is an expanding community, however, and needs the full banking services as well as the stimulus for competition that can be expected from the charter bank. Applying the statutory criteria to this application, we conclude that it is in the public interest and the application is, therefore, approved. OCTOBER 19, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL Security Bank, Idaho's second largest with deposits of over $235 million, operates 42 banking offices, 7 of which have been acquired since 1952 with deposits of over $27 million. In addition, it has two branches approved but not yet opened and its application to purchase the Farmers Bank, Kendrick, Idaho, was approved by the Comptroller of the Currency on August 19, 1964. Twin Falls Bank is located in Twin Falls, about 14 miles distant from the closest branch of Security Bank. Deposits of Twin Falls Bank total $3.2 million. There is a small amount of direct competition between the participating banks. However, the chief competition of Twin Falls Bank is from Fidelity National Bank and Twin Falls Bank & Trust Co. which will hereafter compete with the second largest bank in Idaho, the total deposits of which exceed by more than 10 times the total deposits held by either of them. Security Bank has 31.5 percent of all Idaho bank deposits and 29 percent of the banking offices in the State. The 3 largest banks in Idaho have 76.6 percent of the total deposits of all Idaho banks and 93 of the 139 banking offices in the State. Since 1952, these 3 banks have acquired 18 banks with 22 banking offices. 149 While each acquisition of a small bank, considered separately, may not necessarily result in a substantial lessening of competition, the cumulative effect of a series of small acquisitions, of which the present is an example, must inevitably be substantially adverse. Thus, any further acquisition by Security Bank involves an adverse competitive effect and a tendency toward monopoly. THE FIDELITY NATIONAL BANK, LYNCHBURG, VA., AND THE BANK OF APPOMATTOX, APPOMATTOX, VA. Banking offices Name of bank and type of transaction Total assets In operation The Bank of Appomattox, Appomattox, Va., with and the Fidelity National Bank, Lynchburg, Va. (1522), which had merged Oct. 24, 1964, under charter and title of the latter bank (1522). The merged bank at the date of merger had COMPTROLLER S DECISION On August 5,1964, the $75 million Fidelity National Bank, Lynchburg, Va., and the $3.8 million Bank of Appomattox, Appomattox, Va., applied to the Comptroller of the Currency for permission to merge under the charter and with the title of the former. Lynchburg, with a population of about 58,000, is the central city in a 4-county area of 150,000, and is situated in the Piedmont region of west central Virginia. Located in the metropolitan area of Lynchburg are branches of several national manufacturing and research organizations. In addition, the local economy is supplemented by a mixture of light manufacturing concerns and agriculture. A number of institutions of higher learning also play a role in the Lynchburg area economy. The charter bank has 12 branches operating within the Piedmont region. Among the bank's competitors are the First & Merchants National Bank, the largest statewide bank; the National Trust & Savings Bank, affiliated with the United Virginia Bankshares, a statewide bank holding company; and two branches of the First National Exchange Bank of Virginia, which is active throughout southwest Virginia. There are, in all, eight banks located in the Lynchburg service area. Appomattox, population 1,184, is an agricultural community located 22 miles east of Lynchburg. The community has had a negligible population increase during the past decade. Its unemployment rate is 1 percent higher than the State average, while median family income is about $1,500 below the State average. The industry in the community consists solely of children's apparel manufacturing and a pipeline pumping station. 150 $3, 948, 099 78,109, 431 To be operated 2 13 81, 778, 300 15 The merging bank, with one branch, is smaller than its chief competitor in the community, the Farmers National Bank of Appomattox. Situated in the merging bank's service area is the Pamplin branch of the First National Bank of Farmville. A variety of problems plague the merging bank, including management succession, declining earnings and limited financial ability to offer full banking services to its customers. Its inability to compete effectively in the Appomattox area makes the continued existence of the bank as an independent entity economically unfeasible. The credit and trust departments of the charter bank will make available to customers in Appomattox services not currently offered by either of the local banks. The merger will provide an additional base of operations for the charter bank and will permit it to aid in the stabilization and growth of the Appomattox area's agricultural economy. Because the service areas of the two banks do not overlap, consummation of the proposed merger will neither diminish competition nor serve to promote banking monopoly in the area. On the contrary, competition with the larger statewide banking institutions will be enhanced through the availability of new services and larger lines of credit. Applying the statutory criteria to the proposed merger, we conclude that it is in the public interest and the application is therefore approved. OCTOBER 20, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL The Fidelity National Bank, Lynchburg, Va., had, as of June 30, 1964, assets of $75,165,000, deposits of $67,321,000, loans and discounts of $53,123,000, and capital accounts of $5,364,000. Its principal office is located in Lynchburg, Va., and it has 12 branch offices. The Bank of Appomattox, Appomattox, Va., had, as of June 30, 1964, assets of $3,820,000, deposits of $3,374,000, loans and discounts of $2,125,000, and capital accounts of $324,000. Its main office is located in Appomattox, Va., 22.7 miles east of the main office of the Fidelity National Bank. It operates one branch office in Appomattox. The application states that neither bank "considers" the other to be a "direct competitor to any significant degree." The application does not, however, present any supporting data with respect to the volume of deposits or loans obtained by either bank in the service area of the other. The application does concede "some overlap in the service areas" and it appears that there may be substantial competition between the banks which would be eliminated if the merger were consummated. The proposed merger would materially increase concentration in commercial banking in the area serviced by the Merging Bank and would have an adverse effect upon competition in the service area of the resulting bank. Further, the proposed merger eliminates one more independent bank, and the cumulative effect of supplanting small independent banks by consolidations and mergers renders this proposal adverse. THE LANCASTER COUNTY FARMERS NATIONAL BANK, LANCASTER, PA., AND THE CHRISTIANA NATIONAL BANK, CHRISTIANA, PA. Banking offices Name of bank and type of transaction Total assets In operation The Christiana National Bank, Christiana, Pa. (7078), with and Lancaster County Farmers National Bank, Lancaster, Pa. (683), which had merged Oct. 27, 1964, under charter and title of the latter bank (683). The merged bank at the date of merger had COMPTROLLER S DECISION On July 28, 1964, the $94.7 million Lancaster County Farmers National Bank, Lancaster, Pa., and the $2.5 million Christiana National Bank, Christiana, Pa., applied to the Comptroller of the Currency for permission to merge under the charter and with the title of the former. Lancaster, seat of Lancaster County, has a population of about 62,000 in a county with a population of about 278,000. It is an industrially diversified city located in the southeastern part of the State. Numerous nationally known manufacturing companies contribute substantially to the local economy, which is supplemented by prosperous farming throughout the county. Although economic growth in this section has not been rapid, the area enjoys a high level of employment. The city's future appears promising with the development of new industrial parks and the rehabilitation of the downtown area through urban renewal. Christiana is a small farming community of about 1,100 located about 20 miles east of Lancaster. The community serves the surrounding agricultural areas $2, 636, 838 1 95, 940, 893 11 98, 577, 731 To be operated 12 but depends primarily on employment in Lancaster for economic support. The charter bank, largest bank in Lancaster County, operates 11 offices located throughout the county. It is a full-service bank under the direction of aggressive, competent management. Its competitors are the $72.1 million Fulton National Bank of Lancaster operating 6 branches, the $46.5 million Conestoga National Bank of Lancaster operating 2 branches, and about 22 other commercial banks scattered throughout the county. The single-office merging bank is the only bank in Christiana and the smallest bank in Lancaster County. Consummation of the proposed merger will allow expanded and more efficient banking services in the merging bank's service area, including trust services, installment credit, and the services of agricultural specialists. In addition, the acute management problem occasioned by the retirement of the merging bank's cashier will be met through the charter bank's pool of young and well-trained personnel. Because of the distance between the applicant banks, there is little competition between them. The 151 merger will not affect the competitive banking structure in Lancaster nor adversely affect other banks active in and around the merging bank's service area. Accordingly, the effect of the merger on competition will not be adverse. Applying the statutory criteria to the proposal, we conclude that it is in the public interest and the application is, therefore, approved. OCTOBER 23, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL The proposed merger of Lancaster County Farmers National Bank (LGFNB) and The Christiana National Bank will provide another outlying branch for the largest bank in Lancaster County. This merger will increase the already high degree of concentration in and around the city of Lancaster, where the two largest banks have about 55 percent of the banking assets, the three largest about 73 percent, and the four largest about 80 percent. LCFNB was formed in 1963 by the merger of what were, at that time, Lancaster's second and fourth largest banks. Prior mergers had provided several other branches for LCFNB's predecessor. Fulton National Bank of Lancaster, the second largest bank, has also grown significantly by mergers and acquisitions within the past decade. We reported with respect to Fulton Bank's most recent merger in 1963 that it appeared obvious that it was "engaged in a program to achieve a countywide system of branches through the acquisition of outlying banks" and that "unless checked, this trend begun by Fulton will shortly induce the other Lancaster banks to attempt similar moves to acquire outlying unit banks in the county . . ." The merger which produced LCFNB followed shortly thereafter. This proposed merger between LCFNB and Christiana Bank is one more step in this trend to concentration in banking in the Lancaster area. If the trend continues, the existence of independent unit banking in this area is clearly endangered. Accordingly, we conclude that the proposed merger will have serious adverse effects on competition. CALHOUN STATE BANK, HOMER, MICH., AND CITY BANK & TRUST CO., NATIONAL ASSOCIATION, JACKSON, MICH. Banking offices Name of bank and type of transaction Total assets In operation Calhoun State Bank, Homer, Mich., with and City Bank & Trust Co., National Association, Jackson, Mich. (15367), which had consolidated Nov. 5, 1964, under charter and title of the latter bank (15367). The consolidated bank at the date of consolidation had COMPTROLLER S DECISION On August 31, 1964, the $100.9 million City Bank & Trust Co., National Association, Jackson, Mich., and the $3.7 million Calhoun State Bank, Homer, Mich., applied to the Comptroller of the Currency to consolidate under the charter and with the title of the former. Jackson, with an urban population slightly in excess of 50,000 and an area population of 125,000, is located 75 miles west of Detroit in south central Michigan. Situated in the so-called "Industrial Corridor" between Detroit and Chicago, the city is served by the Michigan Central Division of the New York Central Railroad and is located at the intersection of two principal highways. Although it is a terminal and distribution center, Jackson is primarily an industrial city. Sup152 To be operated $3, 944,140 1 100, 000, 237 8 103, 944, 377 9 pliers for the automobile industry find the proximity to Detroit a natural advantage for their plant sites, with the result that several major tire, transmission, iron, and other related industries provide strong support for the Jackson economy and the economy of nearby Albion, site of a branch of the charter bank. Until very recent years, the automobile industry has been considered cyclical and to counter the ups and downs inherent in such an industry, other types of manufacturing have been encouraged. Makers of electronics, appliances, air-conditioning and hydraulics, among others, have located in Jackson and have considerably lessened the area's dependence on the automobile industry. Further diversification is provided by Consumers Power Co.., which serves most of Michigan outside the Detroit area, and which has its head office in Jackson. A disquieting factor is the nominal decrease in the city's population over the past 10 years, but a sharp increase in the population of Jackson County indicates that people have seemingly chosen to live in less congested surroundings while working and trading in the urban center. The general economic outlook for Jackson and the area it serves is favorable. Homer, with a population of 16,000, is located 21 miles southwest of Jackson. Although there are a few local industries, the economy is primarily agricultural. Farms in the Homer area are of good quality and income per farm family is larger than in many other areas in Michigan. Rapid growth is not forecast for Homer, but as residents who work outside the village are increasingly attracted to living in Homer, prospects for steady growth are good. The charter bank began branching in 1952 and now has seven branches in Jackson and Albion, with eight approved and under construction. The $72.2 million National Bank of Jackson, with seven branches, also operates in Jackson. In nearby Marshall, the large Michigan National Bank operates a progressive branch whose assets are estimated at more than $22 million. The $5.6 million Bank of Albion, a single office bank, is the only competitor of the charter bank's Albion branch. In the area and region of the charter bank, competition comes from numerous commercial banks ranging in size from the main office of the $718.4 million Michigan National Bank, in Lansing, to the $1.7 million Springport State Savings Bank, Springport, Mich. Calhoun State Bank serves Homer as a single-office bank. Ten other banks in surrounding towns from 8to 21-miles distance from Homer, offer alternative sources of banking to the Homer public but they do not actively compete with the consolidating bank. This Bank, established in 1902, has served its community to the limit of its ability. Approximately 60 percent of its deposits of $3.2 million, is loaned out. A heavy demand for mortgage loans is reflected in the fact that this type of loan accounts for over 50 percent of the bank's total loans. The consolidated school system of Homer has heavier loan requirements, as do some other local applicants for loans, than the limited capital and deposits permit the consolidating bank to make. Therefore, arrangements have, of necessity, been made with larger banks in the area, outside Homer. With no branches, no trust powers and limited deposits, the bank's operations are severely limited. Although the capital and deposits limitations of the consolidating bank inhibit effective response to financial demands in the Homer area, the bank's most immediately severe problem is management succession. Active management lies with the executive vice president, who is nearing retirement age, is in poor health and is consequently unable to bear any longer the burden of bank leadership. There are no other employees in the bank who are qualified to serve in a management capacity. With no prospects of recruiting progressive management personnel from the outside, the serious management problem is reaching crisis proportions in Homer. In contrast, the charter bank has been marked by its fine and extensive management, as reflected in its increase from a $5 million bank in 1933 to a $100 million bank at the present time, its consistent offering of new services and its new computer system. In order to keep abreast of modern banking practices, which enlarge and change rapidly in our dynamic economy, the charter bank has maintained a policy of encouraging officers to pursue continuing professional education. It is indeed fortunate that a bank with this proven management is prepared to take the reins from the present executive officer of the consolidating bank in order to bring the advantages of modern banking to Homer, which, though a small town, deserves a progressive bank. There is at the present time no active competition to the consolidating bank. The areas served by the charter and consolidating banks cannot be said to overlap. The charter bank has made little effort to enter the Homer market, a fact attested by the few commercial deposit and loan customers from that area. The major portion of both deposits and loans of mutual customers, estimated at $50,000 and $200,000, respectively, is concentrated in two accounts, one of which is the Homer school system which the consolidating bank is too small to serve adequately. The consolidation will eliminate no competition but will actually bring more competition to the Homer area by challenging the Marshall branch of the Michigan National Bank, 12 miles from Homer, which the consolidating bank cannot do. Further, the addition of the resources of the Galhoun State Bank to those of the charter bank will be so minimal as to cause no change in the competitive structure in Jackson. Indeed, the addition of $3.7 million in resources will be barely perceptible when viewed in light of the $1.6 billion in total resources of all commercial banks in the region in which the resulting bank will encounter competition. This figure of course does not include the resources of savings and loan associations, finance companies, and other financial institutions all active in the resulting bank's area of effective competition. To deny the proposed merger, which will materially improve the quality of banking services in Homer, on the 153 grounds of concentration in the Jackson area would be to ignore reality and consequently to fail in executing the congressional mandate to this Office of weighing consolidation applications by the standards of public interest. Applying the statutory criteria to the proposed consolidation, we conclude that it meets these criteria and the application is, therefore, approved. NOVEMBER 3,1964. SUMMARY OF REPORT BY ATTORNEY GENERAL The City Bank & Trust Co., National Association, Jackson, Mich., with assets of $100,909,000 proposes to consolidate with the Calhoun State Bank, Homer, Mich., with assets of $3,758,000. Although there appears to exist little direct competi- tion between the consolidating banks, the proposed consolidation would eliminate one of only three independent banks in the market area, and would increase concentration of banking interests to the point where the acquiring bank and one competitor in Jackson would control 93 percent of I PC deposits and 95 percent of the commercial bank loan market. The City Bank & Trust Co., which has operated under a national bank charter only since August 6, 1964, has made its second application this year for approval of precisely the same proposed consolidation. As was previously indicated in the Department's report to the Board of Governors of the Federal Reserve System, dated February 25, 1964, this proposed consolidation would be clearly adverse to the preservation of effective competition. CARGILL TRUST CO., PUTNAM, CONN., AND HARTFORD NATIONAL BANK & TRUST CO., HARTFORD, CONN. Banking offices Name of bank and type of transaction Total assets In operation The Gargill Trust Co., Putnam, Conn., with and Hartford National Bank & Trust Co., Hartford, Conn. (1338), which had. merged Nov. 10, 1964, under charter and title of the latter bank (1338). The merged bank at the date of merger had COMPTROLLER S DECISION On September 1, 1964, the $8.3 million Cargill Trust Co., Putnam, Conn., and the $594 million Hartford National Bank & Trust Co., Hartford, Conn., applied to the Comptroller of the Currency for permission to merge under the charter and title of the latter. The charter bank is headquartered in Hartford, a city of 163,000, which serves a trade area of approximately 850,000 persons and is frequently called the insurance capital of the United States. It is a highly industrialized city, serving as a trade center for not only the State of Connecticut but also for much of New England. The charter bank presently operates 28 branches spread over a wide area of central and eastern Connecticut and actively competes for business in other parts of the State. It has approval for two unopened branches. The charter bank competes actively with four other commercial and four mutual savings banks in Hartford itself. Its major competitor, the Connecticut Bank & Trust Co., operates a total of 32 offices. 154 $8, 561, 750 587, 874, 261 596,436,011 To be operated 2 29 31 There are 119 commercial bank offices and 71 mutual savings offices in the Hartford, Middlesex, New London, and Litchfield County areas. The main office of the merging bank is located in Putnam, a community of 8,400 which is 42 miles to the northeast of Hartford in the extreme northeast corner of the State. The area surrounding Putnam is devoted to agriculture and the town serves as a trading center. The primary industry however, has traditionally been the manufacture of textiles. Following World War II, many of the mills moved to the South and this, coupled with the disastrous flood of 1955 dealt a severe blow to the economy of the area. Lately, this has shown signs of recovery, due in part to State and Federal aid programs. The entrance into the community of the charter bank will provide added stimulus to the economic recovery of Putnam and the surrounding area. The Cargill Trust Co. competes with the Citizens National Bank, an $8 million institution situated directly across the street from it and, in a limited degree, with the County Bank & Trust Co. and a branch of Connecticut Bank & Trust Co., both located in Danielson, 8 miles south of Putnam. There is also one savings bank in each community. The Cargill Trust Co. operates one branch, located 6 miles north of its main office in North Grosvenordale. There is no competition between the merging banks, the nearest offices being 26 miles apart. Any loans made in Putnam by the charter bank have been of a size or nature that would have precluded the smaller bank. The primary effect of this merger will be confined to Putnam which should gain substantially by the presence of a larger bank. The resulting bank will be far better able to handle the local financial needs and there will be a fund of expertise to aid Putnam in its rejuvenation. Moreover, the management succession problem of the merging bank will be solved. Gargill Trust Co.'s home town competitor, Citizens National Bank., has been successful to date and there is no reason why it should not remain so in the face of this merger. In balancing the factors of this application in light of the statutory criteria, it is found to be in the public interest and the application is, therefore, approved. NOVEMBER 3,1964. SUMMARY OF REPORT BY ATTORNEY GENERAL Hartford National Bank & Trust Co. is the largest bank in the State of Connecticut, operating offices which serve 50 percent of the State's population and 66 percent of all manufacturing establishments. It had assets as of June 30, 1964, exceeding $594,206,000, deposits of $511,341,000, and loans and discounts of $288,713,000. Cargill Trust Co. operates two offices in Putnam and North Grosvenordale in the northeastern corner of Connecticut. Cargill has total resources of $8,341,000, deposits of $7,755,000 and loans and discounts of $3,778,000. In the area where Cargill operates, two other small, independent banks, Citizens National Bank of Putnam (whose head office is directly across the street from Cargill) and County Bank & Trust of Danielson, with resources of $8 million and $1,600,000, respectively, and the Danielson branch office of Connecticut Bank & Trust, the State's second largest bank, only slightly smaller than Hartford, compete. The proposed acquisition, viewed in the light of Hartford National's history of acquisitions, the merger trend in Connecticut generally, Hartford's initial attempt to acquire the two banks in Putnam, and Connecticut Bank & Trust's proposal to acquire the other Putnam bank should this acquisition be approved, can only be considered as having seriously adverse effects on competition in commercial banking. We view with concern this proposal and the probable competitive effectsflowingfrom its approval. THE GUILFORD TRUST CO., GUILFORD, CONN., AND THE SECOND NATIONAL BANK OF NEW HAVEN, NEW HAVEN, CONN. Banking offices Name of bank and type of transaction Total assets The Guilford Trust Co., Guilford, Conn., with and the Second National Bank of New Haven, New Haven, Conn. (227), which had merged Nov. 16, 1964, under charter and title of the latter bank (227). The merged bank at the date of merger had COMPTROLLER'S DECISION On September 8, 1964, the $115 million Second National Bank of New Haven, New Haven, Conn., and the $6.8 million Guilford Trust Co., Guilford, Conn., applied to the Comptroller of the Currency for permission to merge under the charter and with the title of the former. In operation To be operated $6,911,120 2 117,886,797 10 124, 816, 331 12 The charter bank and 6 of its 10 branch offices are situated in New Haven. With a population of 151,400 and a service area of 270,000, it is the third largest city in Connecticut. The economic base of the New Haven area is mixed industrial-residential, with a wide variety of small industries. New Haven is the site of one of the country's first large-scale urban renewal programs which is providing stimulus to the area's expand155 ing economy. Yale University, New Haven's largest single employer, is a strong, stable support of the economy. Guilford, 15 miles east of New Haven on Long Island Sound, has a population of 9,000 and serves an area estimated at 39,000, including the towns of Branford, North Branford, Durham, and Madison. The larger New Haven banks have entered the towns surrounding Guilford and applications for other new branches in the area are presently under consideration. Because of the distance between the applicant banks, there is virtually no existing competition between them. The Second National is the correspondent bank of Guilford Trust and occasionally participates in loans with them. The entrance of Second National into the area will provide more effective competition for the $195 million First New Haven National Bank and the $108 million Union & New Haven Trust Co., banks which have penetrated the area around Guilford by merger and plan in the future to open de novo branches in the area. It is therefore appparent that the effect of the proposed merger on the competitive structure of the area banking community will be as a stimulant to competition. Applying the statutory criteria to the proposed merger, we conclude that it is in the public interest and the application is therefore approved. NOVEMBER 3, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL The Second National Bank of New Haven, New Haven, Conn., proposed to acquire by merger the Guilford Trust Co., Guilford, Conn. Second National is the second largest bank in the New Haven area, with total resources of $115 million, equal to approximately 24.5 percent of the resources of all banks in the competitive area. The three largest banks combined control 90 percent of total resources. Guilford Trust has total resources of $6,700,000. It has been a progressive, vigorous bank. It operates an active personnel trust department and maintains a full time man on the road soliciting business, both unusual in a bank of this size. Second National claims that it has only limited experience in insurance and pension trust fields and that Guilford Trust's personnel would fill this void, a reversal of the usual roles in banks of these categories. Guilford Trust is the type of business the Supreme Court had in mind in United States v. Alcoa, 377 U.S. 271 (1964) when it spoke of the "small independent that Congress aimed to preserve by § 7" of the Clayton Act. The proposed acquisition, viewed in the light of the concentration existing and proposed by this and other acquisitions in the area, could only have an adverse effect on competition in commercial banking in Connecticut. WESTERN PENNSYLVANIA NATIONAL BANK, MCKEESPORT, P A . , AND CITIZENS STATE BANK, ALIOJJIPPA, PA. Banking offices Kame of bank and type of transaction Total assets In operation Citizens State Bank, Aliquippa, Pa., with and Western Pennsylvania National Bank, McKeesport, Pa. (2222), which had merged Nov. 21, 1964, under the charter and title of the latter bank (2222). The merged bank at the date of merger had COMPTROLLER'S DECISION On September 14, 1964, the $507.4 million Western Pennsylvania National Bank, McKeesport, Pa., and the $4 million Citizens State Bank, Aliquippa, Pa., applied to the Comptroller of the Currency to merge under the charter and with the title of the former. McKeesport, with a population of 45,000, is an industrial city located 13 miles southwest of Pittsburgh, the core of a large six-county industrial area which 156 To be operated $4, 168, 338 1 548, 630, 678 50 552, 799, 516 51 contains a population of about 2^00,000. The economy of the area depends principally on steel production and numerous other manufacturing enterprises, many of which are nationally known. Aliquippa, population 26,000 is the largest city in, and contains some 13 percent of the population of, Beaver County. Located 20 miles northwest of Pittsburgh and 33 miles northwest of McKeesport, it constitutes part of the same greater Pittsburgh industrial complex. The charter bank has grown since 1953 into a large metropolitan full-service bank with 37 branches in its home county of Allegheny, six in Washington County, two in Westmoreland County and one in Beaver County. In addition, five branches are approved but unopened. Its aggressive policies have made it one of the major banks in the Pittsburgh metropolitan area, in which it competes with the $3 billion Mellon National Bank & Trust Co., operating 78 branches; the $1.2 billion Pittsburgh National Bank, operating 68 branches; and the $406 million Union National Bank of Pittsburgh, operating 30 branches. The single office merging bank has generated over $3 million in deposits since its opening in February 1963. Its rapid growth has put a strain on its capital and has prompted management to seek an arrangement which would provide adequate resources. The merging bank, though well managed, lacks management depth, which in the future will probably present a succession problem. The merger will obviate this problem by providing the needed management personnel. The merger will also introduce into the merging bank's service area a bank with sufficient capital resources to meet the growing credit needs of the area. Trust and other services of a full-service institution, with emphasis on retail banking, will become available in an area which in other respects enjoys all of the conveniences of a large metropolis. Primarily because of the distance between the main office and branches of the charter bank and the office of the merging bank, little or no competition exists between the two. The nearest branch of the charter bank is at New Brighton, which is separated from the merging bank's sendee area by the Ohio River. Consummation of the proposed merger will not materially affect the competitive ability of the charter bank vis-avis the dominant banks in the area. The position of the charter bank as third largest among banks in the Pittsburgh area will remain substantially unchanged. The presence of a large bank in the merging bank's service area will encourage competition with the large metropolitan banks active in and around Aliquippa. Accordingly, we conclude that the merger will not adversely affect competition in the relevant market. Applying the statutory criteria to the proposal, we conclude that it is m the public interest and the application is, therefore, approved. NOVEMBER 13,1964. SUMMARY OF REPORT BY ATTORNEY GENERAL Western Pennsylvania National Bank is the third largest bank in the Pittsburgh area (Allegheny County), acounting for approximately 10 and 12 percent of the commercial banking deposits and loans, respectively, therein. This area has for many years been characterized by an unusually high degree of concentration in commercial banking, the result to a large extent of a great many mergers and acquisitions by the leading banks. The top three Pittsburgh banks currently control approximately 85 percent of total Allegheny County deposits while the top four control approximately 93 percent. The remaining deposits are shared by 18 banks. Western itself has been an extremely active participant in the area's consolidation movement having since 1953 acquired 21 small- and medium-sized banks in Allegheny County and the adjoining Counties of Westmoreland, Washington, and Beaver. The instant proposal is Western's third merger in Beaver County in less than a year. With Mellon National Bank & Trust Co. and Pittsburgh National Bank, the area's two largest banks, having acquired or opened branches throughout the counties adjoining Allegheny and with Western acquiring formerly independent banks in generally the same localities, the dominance enjoyed by these banks in Pittsburgh is being extended throughout the broader area constituting "Greater Pittsburgh." It does not appear that any significant competition exists between Western and Citizens State Bank because of the number of miles and the Beaver and Ohio Rivers intervening between their offices. Nonetheless, this transaction will eliminate from Beaver County another independent bank which during an existence of less than 2 years has demonstrated that it could probably continue to grow as an independent although possibly not as quickly as if it were part of Western. The latter, on the other hand, has not presented any overriding reasons why it should enter Aliquippa by acquisition rather than by establishing its own branch. The continuing elimination of independent banks from Beaver County and the rest of the Greater Pittsburgh area may make the existence of those independents remaining more difficult and encourage their acquisition by Western or other of the Pittsburgh banks. For these reasons, we believe that approval of this merger will have an adverse effect on competition in the Greater Pittsburgh area. 157 THE PEOPLES NATIONAL BANK OF LONG ISLAND, PATCHOGUE, N.Y., AND THE NATIONAL BANK OF LAKE RONKONKOMA, LAKE RONKONKOMA, N.Y. Banking offices Name of bank and type of transaction Total assets The National Bank of Lake Ronkonkoma, Lake Ronkonkoma, N.Y. (13130), with and the Peoples National Bank of Long Island, Patchogue, N.Y. (12788), which had . . . merged Dec. 4, 1964, under the charter and title of the latter bank (12788). The merged bank at the date of merger had COMPTROLLER'S DECISION On September 3, 1964, the $36 million Peoples National Bank of Long Island, Patchogue, N.Y., and the $12 million National Bank of Lake Ronkonkoma, Lake Ronkonkoma, N.Y., applied to the Comptroller of the Currency for permission to merge under the charter and title of the former. Patchogue, located at the head of Great South Bay on the southern shore of Suffolk County, Long Island, is a village 60 miles east of New York City. Suffolk County, a fast growing, industrially diversified area that has tripled its population in 15 years, now has 860,000 persons. Within the county, two-thirds of the residents are employed by a variety of manufacturing, commercial, service and construction concerns, in combination with various government sponsored activities. Patchogue, a village of 10,000 persons, with a trade area of 40,000 persons, is a residential community. The commercial activity in Patchogue serves primarily the residents of the village and its trade area. Lake Ronkonkoma, 10 miles north of Patchogue and also in Suffolk County, has an estimated population of 10,000 persons and a trade area population of 20,000. It is primarily residential with little or no business activity other than the commercial establishments serving the residents. The charter bank, with its five branches, and the merging bank, with its one approved but unopened branch, comprise only a small part of the 129 banking offices and 21 approved but unopened branches in Suffolk County. Among the 23 commercial banks maintaining offices in Suffolk County, the charter and merging banks rank 10th and 19th, respectively, and the resulting bank will rank 9th. Competing with them are such major banks as the $1.2 billion Franklin National Bank, the $327 million Security National Bank, and the $113 million Valley National Bank. The proposed merger will provide a bank better 158 To be operated In operation $15,536,617 1 35, 452, 546 5 50, 989,163 6 able to meet the needs and serve the interests of the Suffolk County community by providing a broaderbased institution capable of meeting the general credit demands of this rapidly growing community. By virtue of this broader capital base, it should be able to handle a higher volume of larger loans that may well enable it to meet its competition with lower interest rates. Approval of the proposed merger will have the added benefit of freeing one more municipality from the outdated, anticompetitive home office protection rule that prevails in New York State. Since there will no longer be a bank with a home office in Lake Ronkonkoma, that village will be open to branching. As an indication of the benefit to a community that follows from the lifting of home office protection, three banks have indicated an intention to apply for a branch office in Lake Ronkonkoma if the proposed merger is approved. Thus the merger will actually promote competition in Suffolk County. Applying the statutory criteria to the proposed merger, we conclude that it is in the public interest and the application is therefore approved. DECEMBER 2,1964. SUMMARY OF REPORT BY ATTORNEY GENERAL The Peoples National Bank of Long Island proposes to acquire the National Bank of Lake Ronkonkoma. As of June 30, 1964, the latter had total assets of $12.2 million, total deposits of $11.1 million, and loans and discounts of $5.2 million. It operates entirely through a main office located at the village of Lake Ronkonkoma, town of Brookhaven, Suffolk County, N.Y., and has approval for an unopened branch at Farmingville in the same township. The Peoples National Bank of Long Island operate through a main office at Patchogue, town of Brookhaven, and maintains five branches within that township's limits. As of June 30, 1964, it had total assets of $36.1 million, total deposits of $33 million, and loans and discounts of $15.5 million. Of nine commercial banks having offices within the town of Brookhaven, Peoples ranks fifth and Lake Ronkonkoma eighth. The Resulting Bank would advance to fourth position, well below three much larger banks. Although the application fails to set forth many facts pertinent to competition between the merging banks, indicia do exist that each is a significant competitive factor, both with other banks in the area and between themselves. This competition will be eliminated as a direct result of the merger. Because concentration of banking facilities in the area will be somewhat increased and rivalry between the merging banks will be completely eliminated, the effects on competition resulting from this merger will be adverse. THE FIRST TRENTON NATIONAL BANK, TRENTON, N.J., AND THE HIGHTSTOWN TRUST CO., HIGHTSTOWN, N J . Banking offices Name of bank and type of transaction Total assets Hightstown Trust Co., East Windsor Township, N.J., with and First Trenton National Bank, Trenton, NJ. (1327), which had merged Dec. 11, 1964, under the charter and title of the latter bank (1327). The merged bank at the date of merger had COMPTROLLER S DECISION In order to prevent the probable failure of the Hightstown Trust Co., Hightstown, N.J., the First Trenton National Bank, Trenton, N.J., and said Hightstown Trust Co. applied to the Comptroller of the Currency on October 30, 1964, for permission to merge under the charter and with the title of the former. On October 28, 1964, the Commissioner of the Department of Banking and Insurance of the State of New Jersey certified as to the probable failure of the Hightstown Trust Co, It is therefore found that an emergency situation exists and with respect to such In operation To be operated 3 9 $23, 547, 545 225, 260, 467 248, 808, 012 12 situation this Office must act immediately to prevent the probable failure of the Highstown Trust Co. Accordingly, the reports of competitive factors provided for by 12 U.S.C. 1828(3c) are waived. Because of the emergency nature of this situation, and in order to protect the depositors, creditors and shareholders of the Hightstown Trust Co., the application to merge is hereby approved effective at the close of business Friday, December 11, 1964. DECEMBER 10,1964. SUMMARY OF REPORT BY ATTORNEY GENERAL (No report requested—none received) FIRST NATIONAL BANK OF EBENSBURG, EBENSBURG, P A . , AND THE FIRST NATIONAL BANK OF BARNESBORO, BARNESBORO, P A . Banking offices Name of bank and type of transaction The First National Bank of Barnesboro, Barnesboro, Pa. (5818), with was purchased Dec. 12,1964, by the First National Bank of Ebensburg, Ebensburg, Pa. (5084), which had After the purchase was effected, the receiving bank bad Total assets In operation To be operated $4, 902, 440 1 15,588,275 20, 436, 334 2 3 159 COMPTROLLER S DECISION On October 12, 1964, the $15.2 million First National Bank of Ebensburg, Ebensburg, Pa., applied to the Comptroller of the Currency for permission to purchase the assets and assume the liabilities of the $4.8 million First National Bank of Barnesboro, Barnesboro, Pa. Ebensburg, home of the purchasing bank, has a population of over 4,000 and serves an area of approximately 25,000. It is the county seat of Cambria County whose population of 200,000 depends basically on coal mining with some support from industry and agriculture. The selling bank is located in Barnesboro, a community of 3,000 situated 16 miles north of Ebensburg. Barnesboro is in the center of a large cluster of small coal mining villages and is almost completely dependent upon the production of coal and one garment manufacturing company. The area has a very high rate of unemployment. The amount of competition existing between the banks is minimal because they are located 16 miles apart separated by hilly terrain with three competing banks operating in the area between them. The present banking structure in the combined service areas of the two participating banks will not be significantly altered by the transaction. The proposal will reduce the number of banks in this area from 13 to 12, with the major competition being provided by the $15.3 million Cambria County National Bank, Carrolltown, the Nanty Glo Branch of the $80 million United States National Bank in Johnstown, and the South Fork Branch of the $20 million First National Bank, Indiana. The charter bank will have an increased lending capacity which will enhance its ability to attract new industry to the Barnesboro and Ebensburg areas. The First National Bank of Ebensburg's future branch in Barnesboro will be able to provide the people of that community with an improved consumer loan department, a school savings program and greater savings, convenience and safety to the banking public through the use of electronic data processing and improved auditing control. In addition, trust services, which are presently not available in the Barnesboro community, will be offered by the experienced trust department of the charter bank in the Barnesboro branch. The resulting bank will furnish the Barnesboro banking public with the generally better and more diversified services and the benefits flowing from aggressive younger management. 160 Applying the statutory criteria to the proposal, we conclude that it is in the public interest and the application is, therefore, approved. DECEMBER 11, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL The purchasing bank is headquartered in the county seat of Cambria County and operates a branch in Cresson, 7.5 miles to the east, which it acquired in 1961. The only other bank in Ebensburg is a branch of the Cambria County National Bank of Carrolltown (9 miles north of Ebensburg) which the latter acquired in 1958. Of the five other banks operating in the area around Ebensburg, one is a branch of the U.S. National Bank of Johnstown (assets of $78 million), and another is a branch of the First National Bank of Indiana (assets of $19.4 million). Two of the three remaining small banks each has assets of only $2 million. The U.S. National branch was acquired in 1961 while the First National of Indiana merged the Union Deposit Bank with a preexisting branch in South Fork in 1960. There appears to be little or no presently existing competition between the Purchasing Bank and the Selling Bank which operates one office in Barnesboro, 16 miles north of Ebensburg. The latter bank is, however, the second largest bank in and around Barnesboro, accounting for approximately 15 percent of the percent of the area's deposits and loans. On the other hand, Cambria County National has approxmiately half of such deposits and loans. If this transaction is approved, the Resulting Bank would have $20.4 million or 42 percent of this area's banking assets while Cambria County National would have $14.4 million or 30 percent. The largest of the five other banks in this area has assets of only $3.3 million. The resulting concentration of assets in the hands of the Resulting Bank and of Cambria County National may adversely affect the competitive position of the other much smaller banks. The area around Ebensburg is already characterized by a similar imbalance in banking assets among the banks competing therein. This imbalance has resulted to a large extent: from the acquisitions and mergers noted in the first paragraph above. Approval of the instant transaction may further what thus appears to be a steadily developing trend toward concentration through acquisitions and mergers. We therefore believe that such approval may have some adverse effect on competition. FIRST NATIONAL BANK & TRUST C O . OF HANOVER, HANOVER, P A . , AND NATIONAL BANK & TRUST G O . OF CENTRAL PENNSYLVANIA, YORK, P A . Banking offices Name of bank and type of transaction Total assets In operation First National Bank & Trust Go. of Hanover, Hanover, Pa. (187), with and National Bank & Trust Go. of Central Pennsylvania, York, Pa. (694), which had merged Dec. 14, 1964, under charter and title of the latter bank (694). The merged bank at the date of merger had COMPTROLLER'S DECISION On October 16, 1964, the $29.4 million First National Bank & Trust Co. of Hanover, Hanover, Pa., and the $157.2 million National Bank & Trust Co. of Central Pennsylvania, York, Pa., applied to the Comptroller of the Currency to merge under the charter and title of the latter. York, with a population of 53,000, is the county seat of York County and is located approximately 25 miles south of Harrisburg. While the county is noted for its agricultural productivity, it is also experiencing growth in industrial, commercial and service organizations. Its principal industries include machinery, paper and allied products, apparel and related products, and primary and fabricated metal products. In the three-county area of Cumberland, Dauphin and York, where the charter bank operates 16 offices, there are upwards of 621,000 people and about 1,000 industrial plants employing approximately 300,000 workers. There are 6,000 farms, with dairying, grain growing and cattle feeding as the principal sources of farm income. The borough of Hanover, with a population of 16,000, is situated 20 miles southwest of York in southwestern York County. Hanover is one of the thriving communities in the area as it is the business center for a prosperous surrounding agricultural region. At the same time, it has the benefits of a shoe factory and many other smaller industries engaged in the manufacture of books, steel products, clothing, and textiles. While the charter bank is the largest, by a small margin, of the 42 banks in central Pennsylvania, it competes with the aggressive $133 million DauphinDeposit Trust Co. and the $130 million Harrisburg National Bank & Trust Co., both of Harrisburg. In this area of burgeoning economic growth, these competitors are pressed to satisfy local credit demands which, if unmet, will resort to larger cities with greater financial resources. 770-rvG:{--05 To be operated $30,166,156 2 165, 853, 937 16 196,020,093 18 The merging bank is the largest bank in Hanover. Its principal local competitors are Bank of Hanover & Trust Co., and Farmers Bank & Trust Co., both of which have resources of $16 million. Because of the 25-mile distance between the merging and charter banks, and the absence of significant competition between them, the anticompetitive effects of the merger are not cognizable. The merger of the two banks will provide a better lending policy and more operating supervision than the merging bank is now receiving. The charter bank will be able to provide the customers of the merging bank with better trust services, capable management personnel, and an increase of loanable funds for the Hanover area to keep pace with the area's growing economic needs. In balancing the facts of this case in light of the statutory criteria, we find that the merger is in the public interest and the application is, therefore, approved. DECEMBER 11, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL National Bank & Trust Co. of Central Pennsylvania, York, Pa. (Central York), is the largest bank in the tricounty area of York, Dauphin, and Cumberland, with deposits of $136,911,000. It operates 16 banking offices in this area. During the past 5 years Central York has consolidated or merged with 5 independent banks, acquiring 12 of its banking offices in this manner. First National Bank & Trust Co. of Hanover, Hanover, Pa. (First Hanover), is the largest of four banks in Hanover, and the fifth largest in York County, with deposits of $24,747,000. Existing direct competition between the participating banks appears limited. In York County, where the participating banks do most of their business, the 17 banks maintaining offices 161 have total deposits of $440,609,000. Central York has 31 percent of this total and First Hanover has 5.6 percent. The resulting bank would have 36.6 percent of total deposits of York County banks, a substantial increase. Further, a merger of the largest and fifth largest banks in York County would result in a bank with deposits almost twice the size of those of the second largest bank in the county. This merger would serve to further accelerate the trend toward concentration of bank resources in the area, eliminate existing and potential competition between the merging banks, and enhance the competitive imbalance already existing between the largest bank in the area, Central York, and the smaller banks. Thus, the proposed merger, if consummated, may have a seriously adverse effect upon competition. THE FIRST NATIONAL EXCHANGE BANK OF VIRGINIA, ROANOKE, VA., AND THE CITIZENS NATIONAL BANK OF COVINGTON, COVINGTON, VA. Bankin I °ffices Name of bank and type of transaction Total assets The Citizens National Bank of Govington, Govington, Va. (5326), with and the First National Exchange Bank of Virginia, Roanoke, Va. (2737), which had... merged Dec. 15, 1964, under the charter and title of the latter bank (2737). The merged bank at the date of merger had COMPTROLLER'S DECISION On October 1, 1964, the $223 million First National Exchange Bank of Virginia, Roanoke, Va., and the $15 million Citizens National Bank of Covington, Covington, Va., applied to the Comptroller of the Currency for permission to merge under the charter and with the title of the former. Roanoke, head office of the charter bank, is a city of 97,000 in a metropolitan area of about 159,000. It serves as the trade center of the entire western quadrant of Virginia ranging from the coal mines of Appalachia to the tobacco fields of southern Virginia. As a major manufacturing center, it produces a wide variety of products, chief of which are steel goods, furniture, textiles, and electronic equipment. Economic growth progresses at a substantial rate, with a resultant unemployment rate well below the national average. Covington, located about 65 miles northwest of Roanoke, has a population in excess of 11,000 in a trade area of over 70,000. Its economy depends on a diversification of industry and agriculture and is experiencing steady growth. The charter bank is an aggressive, well-managed institution operating 20 offices in nine communities throughout southwest Virginia. Its growth has been 162 To be operated In operation $15,231,684 1 245 641,387 20 260, 492, 687 21 in response to the need for a regional bank of sufficient size to meet the credit requirements and to aid the economic development of the southwestern part of the State. In meeting the need for a southwestern Virginia regional bank, the charter bank has come into competition with such large statewide banking systems as the $230 million Virginia Commonwealth Corp. and the $484 million United Virginia Bankshares, bank holding companies; the S450 million First & Merchants National Bank; and the $410 million Virginia National Bank. The charter bank also competes with the $55.3 million Colonial-American National Bank, Roanoke, and the $41.3 million Mountain Trust Co., Roanoke. The single office merging bank is conservatively operated and has experienced only moderate growth in recent years. Since its organization in 1900, it has not been involved in any merger or acquisition. It competes with the $9.2 million Covington National Bank, Covington, Va. The continued growth of the charter bank as a regional banking system for southwest Virginia is necessary if the region is to realize its economic potential. At the present time many of the national manufacturing companies active in southwest Virginia must resort to the financial facilities of larger banking institutions in other regions because of the inability of the local banks to accommodate these needs. Not only will the merger increase the charter bank's ability to participate more fully in the economic development of its region, but the merging bank's service area will have available for the first time the financial resources of a full-service bank. Consummation of the proposed merger will not eliminate competition as the participating banks do not serve the same areas. The charter bank's position in relation to the other banks in Roanoke and throughout southwest Virginia will remain unchanged. Covington will henceforth have a branch of a regional bank offering broad services. Throughout the entire southwest region of Virginia, alternative banking services will continue to be offered by numerous local banks and branches of the large statewide banking systems of Virginia. Accordingly, no adverse effect upon competition in the region can be foreseen. Appling the statutory criteria to the proposed merger, we conclude that it is in the public interest and the application is therefore approved. DECEMBER 11, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL First National Exchange Bank, Roanoke, the largest bank in southwestern Virginia, with assets of $223 million, proposes to merge Citizens National Bank of Covington, a bank with assets of $14,958,000 and located in southwestern Virginia. Since October of 1960, First National Exchange has merged 8 banks. The total deposits in these banks at the time merged exceeds 41 percent of the present deposits of First National Exchange and 13 (or 72 percent) of the 18 banking offices now operated by First National Exchange were acquired in the same mergers. The explosive growth of First National Exchange Bank via the merger process and the resultant elimination of eight independent banks in the space of about 4 years is a source of concern from a competitive standpoint; particularly so since it contributes to the rapidly increasing concentration of banking in Virginia by large banking institutions. The approval of the instant merger would further the trend of expansion and concentration by merger. It is our view that the effect of such increased concentration on competition is adverse. FARMERS NATIONAL BANK OF BLOOMSBURG, BLOOMSBURG, PA., AND THE MINERS NATIONAL BANK OF WILKESBARRE, WILKES-BARRE, PA. Banking offices Total assets Name of bank and type of transaction In operation The Farmers National Bank of Bloomsburg, Bloomsburg, Pa. (4543), with and Miners National Bank of Wilkes-Barre, Wilkes-Barre, Pa. (13852) which had merged Dec. 16, 1964, under charter and title of the latter bank (13852). The merged bank at the date of merger had COMPTROLLER S DECISION On September 30, 1964, the $8.5 million Farmers National Bank of Bloomsburg, Bloomsburg, Pa., and the $102 million Miners National Bank of WilkesBarre, Wilkes-Barre, Pa., applied to the Comptroller of the Currency for permission to merge under the charter and title of the latter. Wilkes-Barre, the county seat of Luzerne County and a typical example of Pennsylvania's economic problems of the past 15 years, is 120 miles northwest of Philadelphia. The population of Wilkes-Barre declined 17.2 percent to 63,551 in the decade ending 1960. The economic mainstay of the county, coal To be operated $8, 629, 066 1 107,470,802 6 116,099,867 7 mining, employed 63,000 people three decades ago and now employs about 3,800. The result of this decline is a present male unemployment rate of 7.8 percent. Attempts are being made to diversify the economy through community development projects throughout the Wilkes-Barre trading area which serves 200,000 people. Bloomsburg, the site of the single office merging bank and the county seat of Columbia County, has a population of 10,655, which makes it the second largest municipality in Columbia County. The town is 41 miles southwest of Wilkes-Barre. The principal economic factor in Bloomsburg is a newly located textile industry which, although it employs mostly women, 163 supplies 3,300 jobs for Bloomsburg alone. Like Wilkes-Barre, Bloomsburg is afflicted with a high rate of unemployment. The charter bank competes with 13 banks in its service area, excluding the Bloomsburg bank. The main sources of competition are the $86 million First National Bank, Wilkes-Barre, and the Wilkes-Barre branch, of the $186 million Northeastern Pennsylvania National Bank & Trust Co., Scranton, Pa. The proposed merger will have no appreciable competitive effect in Wilkes-Barre. The proposed merger should benefit the Bloomsburg area. Specifically, the resulting bank will be able to provide competitive trust services to those residents of Bloomsburg who require it. On the management level this proposal will provide a solution to existing problems. While senior management in both banks is good, the lack of depth in the management ranks of the merging bank portends future difficulties. The charter bank is equipped at present to supplement this deficiency in the merging bank. The entrance of the charter bank into Bloomsburg by merger will be felt by the $7 million First National Bank, Bloomsburg, and the $17 million BloomsburgGolumbia Trust Co. First National, which has a progressive loan policy, will receive more competition from the equally alert charter bank and the trust department of the charter bank will provide competition to the trust department of Bloomsburg-Columbia. As a result of the merger, competition in Bloomsburg should be heightened, with overall benefits to the community at large, which needs an economic stimulant. Applying the statutory criteria to this proposal, this application is hereby approved. DECEMBER 14, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL The proposed merger apparently would eliminate no significant direct competition between the applicants. It will, however, continue a trend toward concentration in Miner's service area and in the State of Pennsylvania. It will also add to Miners' present position of dominance in its service area and the entry of Miners into Farmers' service area will create a serious imbalance of banking power in Bloomsburg, since Miners will control 75.5 percent of total deposits and 77 percent of total loans, and seriously threaten future competition. We therefore feel that the impact of the merger upon present and future competition will be significantly adverse. FIRST NATIONAL BANK, WELLSBORO, P A . , AND THE PATTISON NATIONAL BANK OF ELKLAND, ELKLAND, P A . ; THE FIRST NATIONAL BANK OF KNOXVILLE, KNOXVILLE, P A . ; AND THE FARMERS' NATIONAL BANK OF LIBERTY, LIBERTY, P A . Banking offices Name of bank and type of transaction Total assets In operation The Pattison National Bank of Elkland, Elkland, Pa. (5043), with The First National Bank of Knoxville, Knoxville, Pa. (9978), with and the Farmers' National Bank of Liberty, Liberty, Pa. (11127), with were purchased Dec. 16, 1964, by the First National Bank of Wellsborough, Wellsboro, Pa. (328), which had After the purchase was effected, the receiving bank had COMPTROLLER S DECISION On October 1, 1964, the $9.6 million First National Bank, Wellsboro, Pa., applied to the Comptroller of the Currency to purchase the assets and assume the liabilities of the $3 million Pattison National Bank of Elkland, Elkland, Pa.; the $1.4 million First National Bank of Knoxville, Knoxville, Pa.; and the $2.5 million Farmers' National Bank of Liberty, Liberty, Pa., 164 To be operated $2, 978, 494 1, 528,186 2, 556, 792 1 1 1 9, 635, 362 16,477,038 2 5 under the charter of the former and with the title "The Northern National Bank and Trust Company." The four applicant banks are located in Tioga County, a mountainous area in northern Pennsylvania with a population of about 36,000. The towns of Wellsboro and Elkland have some economic diversification as a result of industrial activity but the remainder of the county depends primarily on dairy farming. Althrough the area served by the four banks is somewhat isolated due to the rugged terrain, easy access to Corning and Elmira, N.Y., by highway provides retail shopping facilities and employment opportunities for many county residents. The purchasing bank, the county's oldest and largest bank, has been active since 1864. It has not participated in any mergers or acquisitions in its history. It was the first institution in the county to establish a branch office, located in Tioga. Of the four banks involved in this proposal, it alone offers trust services and a full range of retail banking services. Due to their small size and lack of aggressive management, the three selling banks are unable to serve the public adequately and to promote the economic progress of their service areas. The executive officers and most of the directors of the selling banks have served their banks for many years and desire to retire from banking. Lack of successor management and the virtual impossibility of recruiting personnel to manage these banks constitutes a serious problem for them. The existence of several very small unit banks offering only limited banking services to the public frustrates the promotion of industrial and commercial development in Tioga County. Consummation of the proposed purchase and assumption of the selling banks will vest in the acquiring bank greater resoures to accommodate larger credit requests and to otherwise improve banking services in Tioga County. In addition, consolidation of the four banks into one resulting bank will achieve efficiency in operations and personnel, thereby providing for better use of bank capital. Further, the resulting bank will solve the management succession problem of the selling banks and be better able to recruit new personnel. All of the participating banks are at least 5 miles apart and serve separate communities with the result that there is no significant competition among them which will be eliminated by the proposed unification. Although the number of unit banks in the county will be reduced, alternate banking services are available from other banks in and outside of Tioga County. Applying the statutory criteria to the proposed acquisition, we conclude that it is in the public interest and the application is therefore approved. DECEMBER 11,1964. SUMMARY OF REPORT BY ATTORNEY GENERAL The First National Bank of Wellsborough, the purchasing bank, was organized on March 21, 1864. It has organized and maintains one branch situated in the village of Tioga, Tioga County, Pa. Elkland bank was organized in 1896, Knoxville bank in 1911 and Liberty Bank in 1918. All four banks are located in small towns. The population of Wellsboro is 4,369, Elkland 2,189, Knoxville 694, and Liberty 269. Each bank serves primarily farmers and small businessmen in its immediate area. The proposed merger will completely eliminate unit banking in three areas of Tioga County, Pa., and substitute branches of a bank which, in its own area of Wellsboro, has 56.8 percent of the business. The resulting bank will have no direct competitors, except in Wellsboro where the position of a single competitor will be materially weakened. It appears, therefore, that the proposed purchase of assets and assumption of liabilities of the Pattison National Bank of Elkland, the First National Bank of Knoxville and the Farmers' National Bank of Liberty by the First National Bank of Wellsborough will have some adverse effect on competition and further a tendency toward monopoly in the areas involved. NATIONAL COMMUNITY BANK OF RUTHERFORD, RUTHERFORD, N.J., AND THE GARDEN STATE NATIONAL BANK OF TEANECK, TEANECK, N.J. Banking offices Name of bank and type of transaction Total assets In operation The Garden State National Bank of Teaneck, Teaneck, N.J. (12402), with and National Community Bank of Rutherford, Rutherford, N.J. (5005), which had merged Dec. 18,1964, under the charter and title of the latter bank (5005). $37, 758, 612 15 172, 029, 741 2 209, 788, 353 To be operated 17 165 COMPTROLLER S DECISION On October 14, 1964, the $172.2 million National Community Bank of Rutherford, Rutherford, N.J., and the $37 million Garden State National Bank of Teaneck, Teaneck, N.J., applied to the Comptroller of the Currency for permission to merge under the charter and with the title of the former. The applicant banks are located in Bergen County in the northeastern part of New Jersey west of New York City. The county's population has grown rapidly from 675,000 in 1955 to about 869,000 at present, with an estimated population of 1,165,000 by 1973. Because the county is linked to New York City by a network of highways and forms essentially a part of the greater New York metropolitan area, it serves chiefly as a residential suburb of New York. It also has highly developed and well-diversified industries, which are attracted by excellent roads, skilled labor, and proximity to the northeastern markets. Bergen County should continue for some time to support residential and industrial growth as a part of the greater New York City area. The charter bank maintains 14 branches throughout the southern part of the county. It is a modern, fullservice institution offering competitively the services which a highly urbanized population demands. As the second largest bank in Bergen County, it competes with 26 other banks operating 55 branches, chief of which are the $281.6 million Peoples Trust Co. of Bergen County, operating 16 branches, the $110.4 million Citizens National Bank of Englewood, operating 8 branches, and the $99.8 million Hackensack Trust Co., operating 7 branches. The single-office merging bank is the eighth largest bank in Bergen County and serves the city of Teaneck. Although past growth has been good, absence of branches, automation, and a complete line of banking services places it at a competitive disadvantage with the large Teaneck branch of the Peoples Trust Co. of Bergen County. If the banks in Bergen County are to participate more fully in assisting the county to realize its potential and to reduce the dependence of its residents and industries upon financial institutions located elsewhere, greater consolidation of banking assets to achieve increased lending limits and greater operating efficiency is needed. There can hardly be balanced economic development in an area without a corresponding growth of banking facilities and credit to meet its needs. The consummation of the proposed merger will, therefore, serve to advance the well-being of Bergen County. The applicant banks have neither contiguous nor overlapping service areas and, therefore, the proposed merger will not have an adverse effect upon competition. The merger will not alter the relative position of the charter bank in Bergen County. It will have the salutary effect of promoting competition with the Teaneck branch of Peoples Trust Co. of Bergen County. Applying the statutory criteria to the proposed merger, we conclude that it is in the public interest and the application is, therefore, approved. DECEMBER 18, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL This merger, if approved, will eliminate any presently existing and potential competition between the two banks and lead to the disappearance of a financially strong and prosperous independent unit bank. It would be the second merger of Rutherford Bank during the latter half of 1964 and it will unduly increase banking concentration in Bergen County, N.J., enabling the two largest banks to control approximately 40 percent of all deposits and loans in that county. The competitive effect of the proposed merger, therefore, would be adverse. THE FIRST NATIONAL BANK IN GADSDEN, GADSDEN, ALA., AND THE STATE NATIONAL BANK OF ALABAMA, DECATUR, ALA. Banking offices Name of bank and type of transaction Total assets In operation The First National Bank in Gadsden, Gadsden, Ala. (13728), with and State National Bank of Alabama, Decatur, Ala. (14414), which had merged Dec. 19, 1964, under charter and title of the latter bank (14414). The merged bank at the date of merger had 166 $18, 672, 359 117,934,892 136, 357, 300 To be operated 1 18 18 COMPTROLLER S DECISION On October 5, 1964, the $112 million State National Bank of Alabama, Decatur, Ala., and the $18 million First National Bank in Gadsden, Gadsden, Ala., applied to the Comptroller of the Currency for permission to merge under the charter and with the title of the former. The charter bank, with 18 offices located in 14 cities, operates in a region comprised of the northern tier of Alabama counties. Decatur, location of the main office, is a city of 29,000 persons. It is situated on the Tennessee River in north-central Alabama and serves as a county trade center. While the economy of the surrounding rural area is based primarily on agriculture, especially poultry raising, Decatur has achieved economic balance with a variety of light and medium industries, as well as with heavy industry in the form of a chemical complex on the banks of the Tennessee River. Those activities characterizing Decatur and its surrounding area also characterize the greater part of the northern Alabama region. Among the other cities served by the charter bank, Huntsville is especially important. The phenomenal growth of this city over the past few years, due primarily to the location of a major segment of this country's military space efforts, has contributed greatly to the economic renaissance in the northern region of Alabama. Gadsden, home of the unit merging bank, has a population of 58,000 persons. It is located in Etowah County, 75 miles southeast of Decatur and 85 miles northeast of Birmingham. The community's economy, highly industrialized in comparison to the remainder of Alabama, and primarily dependent on the steel industry, also receives substantial stimulus from agricultural activities in the rural areas of the county. Indicative of the economic potential in the Gadsden area is the $40 million investment in a new plant recently announced by Republic Steel Corp. The cyclical swings inherent in the steel industry present a weak spot in the community's economy, however. The charter bank, although the fifth largest in the State, is considerably smaller than either of the two large Birmingham banks, one of which has resources of approximately $500 million and the other of approximately $250 million. Both of these banks actively solicit commercial and industrial customers in the region served by the charter bank and offer strong competition there. While the charter bank is clearly larger than any of the other area competitors on an aggregate resources basis, analysis of deposit and loan figures for the communities that it serves indicates that its com- petitors have larger market shares in the majority of locations. The merging bank3 second largest in Etowah County, holds slightly less than 25 percent of total county deposits and loans but its market share, and that of the largest bank, has been slipping steadily since 1950. This decline and the concommitant increase in the market shares of the smaller banks in what appears to be a growing market indicate considerable strength in the smaller banks and their vigor in the face of competition. Consummation of the proposed merger will serve the convenience and needs of the Gadsden community more adequately than at present. The record of the charter bank in the introduction of new services and banking facilities to customers and the public in its area, including among other items, consumer lending, expanded trust facilities, drive-in and walkup teller windows, and parking accommodations, demonstrates its ability and willingness to fulfill its responsibilities. The resulting bank's resources, both financial and managerial, will enable, it to counteract the adverse economic effect flowing from any cyclical downswing in the steel industry. Since an economically diversified and balanced region will supply the resulting bank's resources, a downtrend in one community's economy will not impair the bank's resources and ability to meet credit needs there as it would a unit bank in such a community. In addition, the resulting bank's lending limit, more than three times that of the largest Gadsden bank, will provide a community source for credit needs heretofore satisfied only by outside funds and for anticipated credit needs of the community's expected industrial expansion. Consummation of the proposed merger will have little, if any, effect upon competition. While the resulting bank will replace a smaller bank in Gadsden, no appreciable change in the strongly competitive banking structure is expected. Despite their disparate sizes, the Gadsden and Eetowah County banks appear to be sufficiently aggressive to continue the effective competition demonstrated in the past. In addition, three applications have been made to the appropriate banking authorities to charter new banks in Gadsden since the filing of the present application, thus providing further evidence that entry of the resulting bank will have no adverse effect upon competition. Appling the statutory criteria to the proposed merger, we conclude that it is in the public interest and the application is therefore approved. DECEMBER 18, 1964. 167 SUMMARY OF REPORT BY ATTORNEY GENERAL This proposed merger would provide the means by which the largest bank in northern Alabama could effect an entrance into a heretofore relatively wellbalanced banking market. The smaller bank, First National Bank in Gadsden, is the second largest in the five-bank Gadsden market and enjoys about onefourth of Gadsden's banking business. The larger bank, State National Bank of Alabama, is headquartered in Decatur, about 90 miles northwest of Gadsden, and 18 banking offices stretching across the the northern part of Alabama. State National Bank has branches in 11 northern Alabama counties. It is the only bank in the State of Alabama which has branches outside the county of its main office and is the only bank permitted by State law to do so. Were the proposed merger to take place, the resulting institution would be over 2J4 times the size of all of the remaining five Gadsden banks combined. Such size would give the resulting bank a significant competitive advantage over the remaining banks in Gadsden, particularly since the economy of that city is subject to wide economic swings. Thus, the proposed merger is likely to increase the concentration in banking in Gadsden and to unbalance badly what now appears to be an adequately fragmented market. Accordingly, the merger of these institutions is likely to have seriously adverse effects on banking competition in the Gadsden area. THE SCIOTO BANK, COMMERCIAL POINT, OHIO, AND THE FIRST NATIONAL BANK OF CIRCLEVILLE, CIRCLEVILLE OHIO Banking offices Name of bank and type of transaction Total assets In operation The Scioto Bank, Commercial Point, Ohio, with and the First National Bank of Circleville, Circleville, Ohio (118), which had. merged Dec. 29, 1964, under the charter and title of the latter bank (118). The merged bank at the date of merger had COMPTROLLER S DECISION On October 21, 1964, the $580,000 Scioto Bank, Commercial Point, Ohio, and the $9.1 million First National Bank of Circleville, Circleville, Ohio, applied to the Comptroller of the Currency to merge under the charter and with the title of the latter. Circleville, the county seat of Pickaway County, has a population of 11,585 and a service area population of 30,000. This community, which is located 26 miles south of Columbus, Ohio, has a diversified economy based on agriculture and industry. Agricultural activities are mainly the raising of corn, hogs, and beef cattle. Industrial activities have considerably expanded in the area in the past decade with a concomitant residential expansion. Commercial Point, the site of the merging bank, had a population of 308 in 1960 and is totally dependent on agriculture for its economic support. The merger will not significantly affect the banking services offered in Circleville since the addition of the half-million dollars of assets resulting from the merger will have only a slight effect on the charter 168 $593, 387 9,526,219 To be operated 1 2 10,119,606 3 bank and its position in relation to its competitors in the area. The charter bank receives competition from the $5.3 million Second National Bank of Circleville, the $6.6 million Third National Bank of Circleville and the $5 million Savings Bank, Circleville. The merging bank is located 16 miles northwest of the charter bank and does not compete for either deposits or loans with the First National. Consequently, the merger will not adversely effect competition in either bank's service area. Indeed the merger will have a salutary effect on the banking structure of Commercial Point. Applying the statutory criteria to the proposed merger, we conclude that it is in the public interest and the application is, therefore, approved. DECEMBER 22,1964. SUMMARY OF REPORT BY ATTORNEY GENERAL The First National Bank of Circleville, Circleville, Ohio, with deposits of $8.2 million and loans of $5.3 million is the largest bank in an area which has 15 competing banks. First National's deposits and loans are about 17 to 18 percent of the 15 bank totals. The Scioto Bank with deposits of $498,000 and loans of $262,000 is the smallest of the 15 banks, its share of the total deposits and loans amounting to approximately 1 percent. The merger would eliminate the Scioto Bank as a competitor and would eliminate the competition pres- ently existing between Scioto and First National. However, in view of the Scioto's very limited resources, the small amount of business it handles, and the range of banking alternatives which will still be open to customers, we conclude that the merger would not have any significantly adverse effect upon competition. THE COMMERCIAL NATIONAL BANK OF SPARTANBURG, SPARTANBURG, S.C., AND THE FIRST NATIONAL BANK OF SOUTH CAROLINA OF COLUMBIA, COLUMBIA, S.C. Banking offices Total assets Name of bank and type of transaction The Commercial National Bank of Spartanburg, Spartanburg, S.C. (14211), with, and the First National Bank of South Carolina of Columbia, Columbia, S.C. (13720) which had merged Dec. 31, 1964, under charter of the First National Bank of South Carolina of Columbia (13720), and under title "The First Commercial National Bank of South Carolina." The merged bank at the date of merger had COMPTROLLER'S DECISION On October 12, 1964, the $31.8 million Commercial National Bank of Spartanburg, Spartanburg, S.C, and the $118.3 million First National Bank of South Carolina of Columbia, Columbia, S.C, applied to the Comptroller of the Currency for permission to merge under the charter of the latter and with the title of the First Commercial National Bank of South Carolina. Columbia, capital of South Carolina with a population of approximately 260,828, has the second largest market for exchange of agricultural products in the southeast. The city has experienced significant expansion in its economic development during the past 10 years as evidenced by a population increase of more than 40 percent, postal receipts increase of 120 percent and department store sale increase of approximately 60 percent. There has also been an influx of large industries. More than 49,000 persons are employed in manufacturing, trade, transportation, finance, insurance, and other business activities in the area. The charter bank, organized in 1933, now operates 26 offices in 11 communities in various sections of the State. In addition to Columbia, the other large metropolitan area in which First National operates is Charleston with an area population of 254,758 located in the southeastern section of the State. The other towns in which First National operates range in population from In operation To be operated $35,125, 953 9 131, 858, 382 24 165,050,102 33 1,587 to 41,316. The economy of most of these areas is supported primarily by textile manufacturing, diversified industry, and agricultural activities. U.S. Government employment is an important economic factor in the Charleston and Columbia areas. In applying the statutory criteria to the instant proposal, we conclude that it is in the public interest and the application is, therefore, approved. DECEMBER 29, 1964. SUMMARY OF REPORT BY ATTORNEY GENERAL This is an application by the third largest commercial bank in the South Carolina to merge with a substantial independent bank in what would constitute its largest acquisition. The Charter Bank has an announced policy of expanding by merger and it owes the larger part of its recent growth to its acquisition of eight banks during the past decade. The 4 largest banks in South Carolina have acquired some 27 banks during the past 10 years. This acquisition trend, which shows no signs of abating, has contributed to the very high degree to which the commercial banking resources of South Carolina are concentrated in the hands of the few dominant statewide institutions. This trend, which we have pointed out in prior reports, threatens the continued existence of independent banks and their significance as factors in competition. The proposed merger would eliminate a nine-office bank, with deposits of $28 million, as an independent 169 institution. It would contribute materially to the resources of the Charter Bank. It would also increase the competitive disadvantage of several smaller banks which now compete with branches of the Merging Bank. Implicit in this proposed merger is the view that there is no future for independent banks in South Carolina. For if so large an independent as the Merging Bank may be acquired by the State's third largest bank, it is hard to see how the many smaller independents can be expected to constitute a vital competitive force or even to survive for very long. Indeed, the application states that the necessary growth of banks "can be accomplished only through such mergers as this" (at p. 49). In light of the history of bank mergers in South Carolina, this proposed merger may encourage still further acquisitions and thus aggravate the tendency toward monopoly in commercial banking in South Carolina. For these reasons, it is our opinion that the consummation of the proposed merger would have a significantly adverse effect upon competition in commercial banking in South Carolina. THE WINDSOR COUNTY NATIONAL BANK OF WINDSOR, WINDSOR, VT., AND VERMONT NATIONAL & SAVINGS BANK, BRATTLEBORO, VT. Banking offices Name of bank and type of transaction Total assets The Windsor County National Bank of Windsor, Windsor, Vt. (13685), with and Vermont National & Savings Bank, Brattleboro, Brattleboro, Vt. (1430), which had merged Dec. 31, 1964, under charter of the latter bank (1430) and title "Vermont National Bank." The merged bank at the date of merger had.. COMPTROLLER S DECISION On November 16, 1964, the $44.6 million Vermont National & Savings Bank, Brattleboro, Vt., and the $5.0 million Windsor County National Bank of Windsor, Windsor, Vt., applied to the Comptroller of the Currency for permission to merge under the charter and title of the former. Brattleboro, with a population of 9,000 and situated between the Green Mountains and the Connecticut River, is the chief trading center of southeastern Vermont, southwestern New Hampshire and adjacent territory in Massachusetts. The retail trade area consists of 60,000 people supported by various manufacturing establishments including machine tools, leather, paper and wood products. Windsor, with a population of 4,000, is located on the Connecticut River at the foot of Ascutney Mountain about 55 miles north of Brattleboro. The town serves a trade area of about 25,000 persons located in nearby Vermont and New Hampshire towns. The largest employers in the area are machinery and rubber products manufacturing plants and the Vermont State Prison. The charter bank ranks fifth in size among the bank170 In operation To be operated $5, 659, 651 2 44, 284, 550 10 49, 964, 477 12 ing institutions serving the State of Vermont. With its main office in Brattleboro and nine branches, the bank serves the southern border of the State and an area extending northward along the Connecticut River to the town of Woodstock, a distance of some 65 miles. The charter bank is substantially smaller than the largest bank in Vermont, the $103 million Burlington Savings Bank, Burlington, as well as the $67 million Chittenden Trust Co., Burlington. After the merger is consummated, the resulting bank will still be smaller than the largest bank in Brattleboro, the $54 million Vermont Bank & Trust Co. Competition for savings dollars also comes from sa.vings and loan associations and credit unions. The proposed merger will provide, along with the addition of progressive management, many banking services for the town of Windsor which are not available at the present time. These benefits will include increased capacity, the initiation of trust services and certain financing, such as large participation loans, consumer credit financing, business and mortgage loans not now offered by the merging bank. Applying the statutory criteria to this proposal, this application is hereby approved. DECEMBER 29,1964. SUMMARY OF REPORT BY ATTORNEY GENERAL __ . r>,r-^ if O O . Vermont National1 & Savmsrs Bank of Brattleboro, Vt., fifth largest Vermont bank, with nine branches, including one at Windsor, and assets of $44,571,000 proposes to merge the Windsor County National Bank of Windsor, Vt., with one branch and assets of $5,021,000. The proposed merger would eliminate a small independent bank and all existing competition in WindXT sor, Vt., between it and the acquiring bank would jeopardize the ability of a small bank in Ludlow to con. «. • , r •, toue tO C O m e t e effectlvel P y> a n d w o u l d t e n d t 0 e n " coura e a trend toward S concentration of banking m an area where approximately 25 small independent banks continue to function. We conclude, therefore, that the proposed acquisition would have a serious adverse effect upon competition. 171 APPENDIX B Statistical Tables INDEX Statistical Tables Table No. B-l B-2 B-3 B-4 B-5 B-6 B-7 B-8 B-9 B-10 B-ll B-l 2 B-l 3 Title Page Comptrollers of the Currency, by dates of appointment and resignation, and States from which appointed 175 Administrative Assistants to the Comptroller of the Currency and Deputy Comptrollers of the Currency, by dates of appointment and resignation, and native States 176 Changes in the structure of the National Banking System, by States, since 1863: number of banks organized, consolidated, and merged; number of insolvencies, liquidations, and conversions; and national banks in existence, December 31, 1964 177 Applications for new national bank charters, approved and rejected, with name of bank and date of approval or rejection, calendar 1964, by States 178 National banks chartered during calendar 1964: by charter number, title and location, States, and total capital account 182 State chartered banks converted to national banks during calendar 1964, by title ana location of bank, State, effective date, outstanding capital stock, surplus, undivided profits and reserves, and total assets 188 National banks reported in voluntary liquidation during calendar 1964 with the names of succeeding banks, the dates of liquidation, and total capital accounts 189 National banks merged or consolidated with and into State banks during calendar 1964, with effective dates, and total capital accounts 189 National banks converted into State banks, calendar 1964, with effective date, and total capital accounts 190 Purchases of State banks by national banks, calendar 1964, with title and location, effective dates of purchase, and total capital accounts of State banks 190 Consolidations of national banks, or national and State banks, calendar 1964, with title and location, outstanding capital stock, surplus, undivided profits and reserves, and to talassets. 191 Mergers of national banks, or national and State banks, calendar 1964, with title and location, outstanding capital stock, surplus, undivided profits and reserves, and total assets 192 Number of domestic branches of national banks opened for business, calendar 1964, by States, banks, and type of branch 199 174 Table No. Title B-l4 Number of domestic branches of national banks closed, calendar 1964, by States, banks, and type of branch B-l 5 Principal assets and liabilities of national banks, by deposit size, December 1963 and 1964 B-l 6 Dates of reports of condition of national banks, 1914 to 1964 B-l 7 Number, total, and principal assets, liabilities, and capital accounts of national banks, by States, June 30, 1964 B-l 8 Number, total, and principal assets, liabilities, and capital accounts of national banks, by States, December 31,1964 B—19 Selected loans and discounts of national banks, by States, December 31, 1964 B-20 Selected U.S. Government obligations held by national banks, by States, December 31, 1964. B-21 Bank trust assets and income by States B-22 Common trust funds by States, 1963 and 1964. B-23 Current operating revenue, expenses, and dividends of national banks, by major categories and States, year ended December 31, 1964.. B—24 Current operating revenue, expenses, and dividends of national banks in the United States and possessions operating throughout calendar 1964, by size of deposits, December 1964 B-25 Current operating revenue, expenses, and dividends of national banks, years ended December 31, 1963 and 1964 B-26 Number of national banks, capital stock and accounts, net profits, dividends, and ratios to capital accounts, years ended December 31, 1944-64 B-27 Total loans of national banks, losses and recoveries on loans, and ratio of net losses or recoveries to loans, by calendar years, 1945-64. B-28 Total securities of national banks, losses and recoveries on securities., and ratio of net losses or recoveries to securities, by calendar years, 1945-64 B-29 Foreign branches of national banks, by region and country, March 31, 1965 B-30 Foreign branches of national banks, 1955-1964. B-31 Assets and liabilities of foreign branches of national banks, December 31, 1964: consolidated statement B-32 Assets and liabilities of all national banks, date of last report of condition, December 1936-64. Page 207 209 210 212 215 218 219 220 221 222 230 232 235 236 236 237 237 237 238 TABLE B-l.—Comptrollers of the Currency, by dates of appointment and resignation, and states from which appointed Mo. Name McCulloch, Hugh Clarke, Freeman .. Hulburd, Hiland R Knox, John Jay Gannon, Henry W Trenholm, William L. . . Lacey, Edward S Hepburn, A. Barton.... Eckels, James H Dawes, Charles G. . . . . . Ridgely, William Barret. Murray, Lawrence O . , . Williams, John Skel Grissinger, D. R Dawes, Henry M Mclntosh, Joseph W. . . . Pole, John W O'Connor, J. F. T Delano, Preston Gidney, Ray M Saxon, James J Date of appointment May Mar. Feb. Apr. May Apr. May Aug. Apr. Jan. Oct. Apr. Feb. Mar. May Dec. Nov. May Oct. Apr. Nov. 9,1863 21, 1865 1,1867 25,1872 12, 1884 20,1886 1,1889 2,1892 26,1893 1,1898 1,1901 27,1908 2,1914 17, 1921 1,1923 20, 1924 21,1928 11,1933 24,1938 16,1953 16,1961 Date of resignation Mar. 8, 1865 July 24, 1866 Apr. 3, 1872 Apr. 30, 1884 Mar. 1, 1886 Apr. 30, 1889 June 30, 1892 Apr. 25, 1893 Dec. 31, 1897 Sept. 30, 1901 Mar. 28, 1908 Apr. 27, 19131 Mar. 2, 1921 Apr. 30, 1923 Dec. 17, 1924 Nov. 20, 1928 Sept. 20, 1932 Apr. 16, 1938 Feb. 15, 1953 Nov. 15, 1961 State Indiana New York Ohio Minnesota Minnesota South Carolina Michigan New York Illinois Illinois Illinois New York Virginia Ohio Illinois Illinois Ohio California Massachusetts Ohio Illinois i Term expired. 175 TABLE B-2.—Administrative Assistants to the Comptroller oj the Currency and Deputy Comptrollers of the Currency, by the dates of appointment and resignation, and native states Nat Date of appointment Date of resignation State ADMINISTRATIVE ASSISTANTS TO THE COMPTROLLER Larsen, Arnold E . . Faulstich, Albert J . Dec. 24, 1961 July 1, 19621 July 2, 1962 Nebraska Louisiana DEPUTY COMPTROLLERS OF THE CURRENCY Howard, Samuel T. . Hulburd, HilandR. . Knox, John Jay Langworthy, John S. Snyder, V. P Abrahams, J. D Nixon, R. M Tucker, Oliver P. . . . Coffin, George M. Murray, Lawrence O. Kane, Thomas P Fowler, Willis J . Mclntosh, Joseph W Collins, Charles W Stearns, E.W Await, F. G Gough, E. H Proctor, John L Lyons, Gibbs Prentiss, William, Jr Diggs, Marshall R Oppegard, G. J Upham, C. B Mulroney, A. J McCandless, R. B Sedlacek, L. H Robertson, J. L Hudspeth, J. W Jennings, L. A Taylor, W. M Garwood, G. W Fleming, Chapman C Haggard, Hollis S Camp, William B Redman, Clarence B Watson, Justin T Miller, Dean E DeShazo, Thomas G Egertson R. Coleman Blanchard, Richard J Park, Radcliffe New York Ohio Minnesota New York New York Virginia Indiana Kentucky South Carolina New York Dist of Col. Indiana Illinois Illinois Virginia Maryland Indiana Washington Georgia California Texas California Iowa Iowa Iowa Nebraska Nebraska Texas New York Virginia Colorado Ohio Missouri Texas Oct. 26, 1963 Connecticut Ohio Iowa Virginia Iowa Massachusetts Wisconsin Aug. 1, 1865 Jan. 31, 1867 Apr. 24, 1872 Jan. 3, 1886 Jan. 3, 1887 M a y 25, 1890 Mar. 16, 1893 Mar. 11, 1896 Aug. 31, 1898 June 27, 1899 Mar. 2, 1923* Feb. 14, 1927 Dec. 19, 1924 June 30, 1927 Nov. 30, 1928 Feb. 15, 1936 Oct. 16, 1941 Jan. 23, 1933 Jan. 15, 1938 Jan. 15, 1938 Sept. 30, 1938 Sept. 30, 1938 Dec. 31, 1948 Aug. 31, 1941 Mar. 1, 1951 Sept. 30, 1944 Feb. 17, 1952 Aug. 31, 1950 M a y 16, 1960 Apr. 1, 1962 Dec. 31, 1962 Aug. 31, 1962 Aug. 3, 1962 1 Appointed Regional Comptroller of the Currency with headquarters in San Francisco, Calif. 2 Died Mar. 2, 1923. 176 TABLE B-3.—Changes in the structure of the National Banking System, by States, since 1863: number of banks organized, consolidated, and merged; number of insolvencies, liquidations, and conversions; and national banks in excistence, Dec. 31, 1964 Organized 1863 through 1964 State United States * Alabama Alaska Arizona Arkansas California , Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersev New Mexico. New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming Virgin Islands Puerto Rico , , , , . . , , , ,, , Consolidated and merged under 12 I J.S.C. 215 12 U.S.C. 214 Insolvent In liquidation In existence Merged or Dec. 31 consolidated 1964 with State banks Consolidations Mergers 15, 466 678 209 2815 6, 701 57 227 4, 779 193 8 32 158 590 259 131 32 36 272 196 7 112 959 443 559 453 250 120 127 155 380 346 510 86 315 203 410 17 82 431 96 1,009 157 263 710 775 150 1,286 67 131 221 217 1,312 44 85 272 238 196 287 76 1 1 4 0 1 1 19 5 11 0 8 2 8 1 0 19 14 4 6 11 4 7 2 0 0 0 17 45 62 2 21 55 383 84 69 18 13 41 87 4 65 296 205 243 198 110 53 79 69 207 156 192 34 148 76 199 8 23 150 37 439 58 118 333 454 102 488 58 49 81 94 572 19 29 74 136 68 115 26 0 1 0 0 0 0 2 0 1 0 0 13 0 13 8 0 0 0 0 2 1 1 0 80 5 4 63 91 115 27 5 8 187 55 2 9 412 124 101 169 82 47 22 49 93 96 193 31 93 48 125 3 50 146 33 204 31 42 221 223 11 388 4 24 33 75 538 12 27 123 28 79 109 38 1 0 37 11 8 5 12 3 2 1 3 48 1 122 8 3 32 12 2 97 3 8 13 8 45 4 3 21 18 11 9 0 0 0 o4 0 0 0 o 0 1 2 1 0 o2 0 5 10 6 3 o o 1 0 0 0 1 11 0 45 8 0 7 0 2 45 0 7 0 o0 0 2 22 5 0 0 0 0 0 o6 39 65 55 1 7 42 42 0 35 227 98 205 76 37 16 13 17 28 77 116 16 58 76 83 4 5 59 25 130 44 100 112 85 31 211 2 43 93 36 142 6 17 28 51 38 54 12 0 0 to State banks o 0 0 0 0 4 0 0 2 0 6 4 7 0 0 o0 o1 o 2 0 1 0 0 1 0 4 0 0 1 1 0 2 0 0 1 2 14 1 1 0 0 0 0 0 0 0 o1 0 1 7 9 3 0 o 1 0 0 1 0 16 0 65 8 0 4 0 2 55 0 0 0 2 1 2 6 4 0 0 0 0 0 0 * Includes Virgin Islands and Puerto Rico. 177 TABLE B-4.—Applications for new national bank charters, approved and rejected, with name of bank and date of approval or rejection, calendar 1964, by States Alabama City National Bank of Russellville, Russellville, Ala Florence, Ala Capitol National Bank of Montgomery, Montgomery, Ala Baldwin National Bank of Robertsdale, Robertsdale, Ala. (Conversion) Shoals National Bank of Florence, Florence, Ala City National Bank of Birmingham, Birmingham, Ala Muscle Shoals National Bank, Muscle Shoals, Ala First National Bank of Aliceville, Aliceville, Ala Opp National Bank, Opp, Ala Lineville, Ala City National Bank of Gadsden, Gadsden, Ala The National Bank of Mobile County, Prichard, Ala Mobile, Ala Tallassee, Ala Decatur, Ala Approved Rejected 1964 1964 Feb. 22 Mar. 5 Mar. 27 Mar. 31 Apr. 15 May 27 June 3 Sept. 3 Sept. 4 Sept. 29 Nov. 2 Dec. 4 Dec. 14 Dec. 16 Dec. 31 Arkansas First National Bank in Osceola, Osceola, Ark. (Conversion) Feb. 22 Pine Bluff National Bank, Pine Bluff, Ark. May 8 First National Bank of Brinkley, Brinkley, Ark May 12 Jacksonville, Ark June 3 Sheridan, Ark July 22 California Riverside, Calif Pacific Industrial National Bank of South El Monte, South El Monte, Calif San Joaquin Valley National Bank, Tulare, Calif Indio, Calif Pasadena, Calif Visalia, Calif Bellfiower, Calif Fremont, Calif Sherman Oaks, Calif Republic National Bank of San Diego, San Diego, Calif Silverlake National Bank, Los Angeles, Calif Sunland, Calif Los Angeles, Calif Inyo-Mono National Bank, Bishop, Calif. Thousand Oaks, Calif Riverside National Bank, Riverside, Calif. Los Angeles, Calif Bakersfield National Bank, Bakersfield, Calif Commercial National Bank, Anaheim, Calif Lodi National Bank, Lodi, Calif Concord National Bank, Concord, Calif. Santa Cruz, Calif Escondido National Bank, Escondido, Calif Escondido, Calif Heritage National Bank, Westwood, Calif. Westminster, Calif Commercial National Bank of San Leandro, San Leandro, Calif Huntington Park, Calif Whittier, Calif National Bank of Whittier, Whittier, Calif 178 Jan. 14 Jan. 15 Jan. 21 Jan. Jan. Jan. Jan. Feb. Feb. 21 22 22 24 1 8 Feb. 15 Feb. 15 Feb. 25 Mar. 13 Feb. 22 Feb. 25 Mar. 13 Mar. 23 Mar. 30 Mar. 30 Mar. 30 Apr. 2 Apr. 8 Apr. 21 Apr. 23 May 11 June 1 Apr. 21 Apr. 29 May 14 June 1 California—Continued Lincoln National Bank, Santa Rosa, Calif. Valley National Bank of Delano, Delano, Calif Santa Rosa, Calif Redding, Calif Westminster National Bank, Westminster, Calif Sonoma, Calif Bellfiower National Bank, Bellfiower, Calif Mechanics National Bank, Huntington Park, Calif San Francisco, Calif Pacific Palisades, Calif Fisherman's National Bank, San Francisco, Calif Sacramento, Calif Sacramento, Calif Sacramento, Calif Los Angeles, Calif Los Angeles, Calif Southland National Bank, Yucaipa, Calif ... Fullerton, Calif University National Bank, Fullerton, Calif Los Angeles, Calif First National Bank of Washington Township, Union City, Calif Ukiah, Calif Pan American National Bank of East Los Angeles, Los Angeles, Calif Martinez, Calif Lakewood, Calif Republic National Bank, Los Angeles, Calif Victorville, Calif Commercial and Farmers National Bank, Oxnard, Calif Bank of Long Beach, National Association, Long Beach, Calif Signal Hill, Calif Santa Clarita National Bank, Newhall, Calif Imperial Valley National Bank, El Centro, Calif Sonoma, Calif Stockton, Calif Oakland, Calif Visalia, Calif Stockton, Calif Paramount, Calif Los Angeles, Calif Los Angeles, Calif San Bernardino, Calif San Francisco, Calif « Walnut, Calif LaHabra, Calif Los Angeles, Calif Mountain View, Calif Hacienda Heights, Calif Montebello, Calif Modesto, Calif Casitas National Bank, Carpinteria, Calif. San Pedro, Calif San Pedro, Calif Approved Rejected 1964 1964 June 3 June 3 June 3 June 24 June 24 June 29 July 2 July 2 July 20 Aug. 31 Aug. 31 Sept." 3 Sept. 3 Sept. 3 Sept. 3 Sept. 3 Sept. 11 Sept. 22 Sept. 29 Sept. 22 Sept. 29 Sept.* 29 Sept. 29 Oct. 12 Nov. 6 Dec. 4 Dec. 4 Dec. 4 Dec. 10 Dec. 10 Dec. 10 Dec. 10 Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. 22 10 11 11 11 11 11 11 11 14 14 14 14 14 16 16 17 22 Dec. 29 Dec. 29 Colorado Delta, Colo Jan. 3 The First National Bank of Bear Valley, Denver, Colo Jan. 27 National Bank of Delta, Delta, Colo Feb. 1 Leadville, Colo Apr. 7 Colorado Springs, Colo Apr. 8 TABLE B-4.—Applications for new national bank charters, approved and rejected, with name of bank and date of approval or rejection, calendar 1964, by States—Continued Colorado—Continued Wheat Ridge, Colo Denver, Colo The Western National Bank of Colorado Springs, Colorado Springs, Colo Englewood, Colo The East Colorado Springs National Bank, Colorado Springs, Colo Colorado Springs, Colo Metropolitan National Bank, Denver, Colo Midtown National Bank, Pueblo, Colo... Wheat Ridge, Colo First National Bank of Southglenn, Arapahoe County, Colo Breckenridge, Colo Craig, Colo First National Bank of Estes Park, Estes Park, Colo Westlake First National Bank, Loveland, Colo Loveland, Colo , Grand Valley, Colo Pueblo, Colo Jefferson County, Colo Villa Italia, Colo Westminster, Colo Edgewater, Colo Englewood, Colo Denver, Colo Approved Rejected 7964 1964 Apr. 21 Apr. 30 May 11 May 27 June 24 June 24 June 24 Julily 7 July 27 July 17 Aug. 31 Aug. 31 Sept. 3 Sept. 3 Sept. Sept. Oct. Oct. Oct. Oct. Dec. Dec. Dec. 10 11 12 14 14 16 11 17 18 Connecticut Rocky Hill, Conn . . . . Apr. 21 The Hamden National Bank, Harnden, Conn June 24 Citizens National Bank of Southington, Southington, Conn Oct. 12 The Constitution National Bank, Hartford, Conn Oct. 16 Dec. 10 Manchester, Conn Dec. 17 East Hartford, Conn District <,f Columbia United Community Washington, D.C Washington, D.C National Bank, Feb. Jan. Feb. Jan. 16 Jan. 18 Feb. 15 Feb. 22 Mar. 6 Mar. 10 Mar. 13 Mar. 19 .. May 26 June 4 Manufacturers National Bank of Hialeah, Hialeah, Fla West Palm Beach, Fla Edgewater, Fla Volusia County National Bank at Ormond Beach, Ormond Beach, Fla.. University National Bank of Boca Raton, Boca Raton, Fla First Bank & Trust Co. of Boca Raton, National Association, Boca Raton, Fla. (Conversion) Interamerican National Bank at Sunny Isles, Sunny Isles, Fla Fort Lauderdale, Fla Republic National Bank of Miami, Miami, Fla Orlando, Fla Rockledge, Fla Cocoa Beach, Fla West Melbourne, FlaT National Bank of W est Melbourne, West Melbourne, Fla Gainesville, Fla Fort Lauderdale, Fla North Bay Village, Fla Highway #441, Dade County, Fla Cocoa Beach, Fla Brooksville, Fla Orlando, Fla Fort Lauderdale, Fla Unincorporated, Orange County, Fla Fort Lauderdale, Fla . , Miami, Fla St. Petersburg, Fla Edgewater, Fla West of Lake Worth, Palm Beach Co., Fla Pensacola, Fla Merritt Island, Fla Miami, Fla Miami. Fla Miami Beach, Fla Approved Rejected 7964 7964 June 30 July 2 July 28 July 31 Aug. 18 Aug. 18 Aug. 21 Sept. 4 Oct. 6 Sept. 4 Sept. 16 Sept. 22 Sept. 24 Oct. 6 Oct. Oct. Oct. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. 14 14 30 7 10 10 11 14 14 14 15 16 17 Dec. Dec. Dec. Dec. Dec. Dec. 18 22 22 29 30 31 Georgia Dec. 15 Florida United National Bank, Miami, Fla Port Richey, Fla Miami, Fla. Lincoln National Bank of Miami, Miami, Fla St. Petersburg, Fla Crestview, Fla. (Conversion) Capital National Bank of Miami, Miami, Fla. (Conversion) National Bank of Melbourne & Trust Co., Melbourne, Fla. (Conversion) Westchester National Bank of Dade County, Dade County., Fla The Second National Bank of North Miami, North Miami, Fla Tampa, Fla Homestead, Fla Sanford, Fla. Hollywood, Fla First National Bank of PrincetonNaranja, Princeton-Naranja, Fla Ormond Beach, Fla Peoples National Bank of Bay Harbor Islands, Bay Harbor Islands, Fla Port Richey, Fla Sunny Isles area of Dade County, Fla... Florida—Continued Apr. Apr. May May 17 30 1 15 June 3 June 24 June 25 First National Bank of Perry, Perry, Ga. . Mar. 19 Roswell, Ga May 26 Jonesboro, Ga May 26 Tucker, Ga July 2 The First National Bank of Tucker, Tucker, Ga Dec. 4 Atlanta, Ga Dec. 4 Roswell, Ga Dec. 14 Illinois First National Bank of Mount Prospect, Mount Prospect, 111. (Conversion) Pesotum, 111 Midwest National Bank of Moline, Moline, 111 American National Bank of Champaign, Champaign, 111 North Towne National Bank of Rockford, Rockford, 111 Seaway National Bank of Chicago, Chicago, 111 The First National Bank of Western Springs, Western Springs, 111. (Conversion) Pekin, 111. Community National Bank in Monmouth, Monmouth, 111 Normal, 111 Jan. 3 Jan. 16 Feb. 22 Mar 13 Mar 21 May 11 May 11 May 26 May 11 June 4 179 TABLE B-4.—-Applicationsfor new national bank charters, approved and rejected, with name of bank and date of approval or rejection, calendar 1964, by States—Continued Approved Rejected 1964 Illinois—Continued 1964 Mid-West National Bank of Lake Forest, Lake Forest, 111 July 2 The First National Bank of Lake Bluff, Lake Bluff, 111 July 31 First National Bank of Macomb, Macomb, 111 Aug. 18 Pekin National Bank, Pekin, 111 Aug. 31 Berkeley, 111 Dec. 18 First National Bank of Oak Lawn, Oak Lawn, 111. (Conversion) Dec. 18 Freeport, 111 Dec. 31 Indiana First National Bank of Hartford City, Hartford City, Ind June 24 Bank cf Indiana, National Association, Gary, Ind. (Conversion) Nov. 24 Iowa First National Bank, Ames, Iowa, (Conversion) Dec. 16 w Kansas Salina, Kans City National Bank of Pittsburg, Pittsburg, Kans Sabetha, Kans Overland Park, Kans Louisiana First National Bank of Denham Springs, Denham Springs, La Bogalusa, La Morgan City, La Luling, La Maryland University National Bank, College Park, Md The Old Line National Bank, Rockville, Md Takoma Park, Md Greenbelt, Md Apr. 21 Sept. 2 Dec. 10 Dec. 11 Mar. 27 Sept. 30 Dec. 14 Dec. 18 Apr. 22 Aug. 21 Sept. 10 Dec. 14 Massachusetts Commonwealth National Bank, Boston, Mass Harbor National Bank of Boston, Boston, Mass Feb. 29 June 25 Michigan First National Bank of Wyoming, Wyoming, Mich. (Conversion) Imlay City, Mich First National Bank of Fenton, Fenton, Mich Grand Valley National Bank, Grandville, Mich City Bank & Trust Co., National Association, Jackson, Mich. (Conversion).. . : Valley of Sagmaw. Sagimr" °-~ valley National iNational Bank JBanic ot Saginaw, Mich. (Conversion). . . . . . . . . . Central National Bank of St. Johns, Ovid, Mich. (Conversion).... Livonia National Bank, Livonia, Mich., (Conversion) 180 Missouri The First National Bank of Sikeston, Sikeston, Mo. (Conversion) Security National Bank of Sikeston, Sikeston, Mo Gateway National Bank of St. Louis, St. Louis, Mo First National Bank of Annapolis, Annapolis, Mo Fredericktown, Mo First National Bank of Sullivan, Sullivan, Mo First National Bank of Maiden, Maiden, Mo Kansas City, Mo Southwest National Bank of Kansas City, Kansas City, Mo Union, Mo Lee's Summit, Mo Sunset Hills, Mo Mercantile Trust Company National Association, St. Louis, Mo. (Conversion). St. Louis, Mo West Side National Bank, Unincorporated Area, St. Louis County, Mo Aurora, Mo Kansas City, Mo Montana Missoula, Mont First National Bank of Eureka, Eureka, Mont First National Bank, West Yellowstone, Mont West Yellowstone, Mont Conrad, Mont Malta, Mont June 30 July 10 Nevada Jan. 17 May 1 June 24 Aug. 17 Aug31 Oct. 15 Jan. 18 Feb. 28 May 11 May 11 Approved Rejected 1964 1964 May 15 Dec. 14 Mississippi First National Bank of Clarksdale, Clarksdale, Miss Jan. 27 First National Bank of Iuka, Iuka, Miss.. Mar. 30 First National Bank of Greenwood, Greenwood, Miss Aug. 18 Calhoun City, Miss Dec. 14 First Citizens National Bank, Tupelo, Miss. (Conversion) Dec. 30 Nebraska City National Bank of Lincoln, Lincoln, Nebr Security National Bank of Omaha, Omaha, Nebr West Omaha National Bank, Omaha, Nebr Sarpy County, Nebr Minnesota East Grand Forks, Minn Valley National Bank of Le Sueur, Le Sueur, Minn. (Conversion) St. Louis Park, Minn Lake City, Minn Minnesota—Continued Farmington, Minn Mankato, Minn Feb. 18 Mar. 19 May 11 May 13 May 15 July 20 Aug. 31 Sept. 2 Sept. 2 Oct. 12 Oct. 12 Oct. 14 Nov. 13 Dec. 4 Dec. 10 Dec. 11 Dec. 11 Jan. 21 Apr. 8 Aug. 21 Aug. 21 Oct. 12 Dec. 30 Feb. 22 Apr. 2 Aug. 18 Dec. 11 Las Vegas, Nev Apr. 2 ^ y^""' -;--*"• ^as Vegas, Nev June 29 parson City, Nev July 20 Carson City, Nev Sept. 2 New Hampshire The Indian Head National Bank of Manchester, Manchester, N.H. (Conversion) June 30 New Jersey Madison National Bank, Madison, N.J... First National Bank of Scotch Plains, Scotch Plains, N J Feb. 1 Feb. 22 T A B L E B-4.—Applications for new national bank charters, approved and rejected, with name of bank and date of approval or rejection, calendar 1964, by States—-Continued New Jersey—Continued New Jersey National Bank & Trust Co., Asbury Park, N.J. (Conversion) Eatontown National Bank, Eatontown, N.J Eatontown, N.J Raritan Valley National Bank, Edison Township, N.J Security National Bank, Newark, N.J First National Bank of Moorestown, Moorestown, N.J North Jersey National Bank, Fort Lee, N.J First National Bank of Bridgewater, Bridgewater Township, N.J Englewood National Bank & Trust Co., Englewood, N.J Springfield, N.J Springfield, N.J Approved Rejected 1964 1964 Feb. 26 Apr. 30 Apr. May 21 May 27 May 28 June 4 Aug. 21 Sept. 11 Oct. 16 Dec. 29 Dec. 29 New Mexico First National Bank of Rio Arriba Espanola, N. Mex. (Conversion) Mar. 23 Valley National Bank, Espanola, N. Mex. May 11 u Las Cruces, N Mex J fy Fidelity National Bank, Albuquerque, N. Mex Nov. 20 June 3 July 17 6 Jan. 18 June 24 ,, Apr. 13 Apr. 13 June 24 July 31 July 31 July 31 Aug. 20 Aug. 20 Aug. 21 Aug. 31 Aug. 31 Sept. 3 Dec. 30 Pennsylvania Newtown, Pa Sept. 9 Provident National Bank, Philadelphia, Pa. (Conversion) Oct. 7 Bala-Cynwyd, Pa Dec. 22 South Carolina Sept 30 Custer, S. Dak Sept. 10 Apr. June Oct. Dec. 21 24 16 22 South Dakota Oct. 14 , Dec. 29 Apr. 13 Tennessee First National County Bank, Spring City, Spring City, Tenn June 3 Texas Ohio Tulsa, Okla McAlester, Okla Ada, Okla Ponca City, Okla Jenks, Okia Ardmore, Okla Edmond, Okla. Ardmore, Okla Jan. 27 Feb. 15 Great Western National Bank, Portland, Oreg July 20 July 17 Aug. 18 First National Bank of Garrington, Carrington, N. Dak Mar. 19 The National Bank of Harvey, Harvey, July 10 N. Dak Oklahoma Edmonds, Okla Shawnee, Okla First National Bank, Henryetta, Henryetta, Okla Feb. 15 First National Bank, Sallisaw, Sallisaw, Okla Mar. 19 Nicoma Park, Okla Sand Springs, Okla Burns Flat, Okla Edmond, Okla Edmond, Okla Edmond, Okla Tulsa, Okla Tulsa, Okla McAlester, Okla Oklahoma City, Okla Muskogee, Okla , Oklahoma City, Okla Poteau, Okla Fountain Inn, S. C. Dillon, S. C Barnwell, S. C Lexington, S. C. . . . North Dakota Tower National Bank of Lima, Lima, Ohio Progress National Bank of Toledo, Toledo, Ohio National Bank of Defiance, Defiance, Ohio Minerva, Ohio. First National Bank, Bowling Green, Ohio (Conversion) The Capital National Bank, Cleveland, Ohio (Conversion) Minerva National Bank, Minerva, Ohio. The Central Security National Bank of Lorain County, Lorain, Ohio (Conversion) Approved Rejected 1964 1964 Oregon- New York Clarence, N.Y Pioneer National Bank, New York, N.Y.. Rotterdam, N.Y First National Bank of East Hampton, East Hampton, N.Y East Hampton, N.Y Garden City, N.Y First National Bank of Rochester Rochester, N.Y , Bohemia, N.Y Republic National Bank of New York, New York, N.Y Brooklyn, N.Y Oklahoma—Continued Jan. 8 May 1 June 1 July 10 Aug. 31 Oct. 19 Dec. 4 Dec. 15 Jan. Jan. Jan. Jan. Jan. Jan. Jan. Jan. 8 14 16 20 22 27 27 27 Garland, Tex Dallas, Tex Lubbock, Tex Liberty National Bank of Dallas, Dallas, Tex Lone Star National Bank, Lone Star, Tex. Abilene, Tex Cypress, Tex Neches National Bank of Silsbee, Silsbee, Tex Canyon, Tex Richardson Heights National Bank, Richardson, Tex South Houston, Tex Houston, Tex Houston, Tex Houston, Tex Woodville, Tex Great Plains National Bank, Amarillo, Tex Northeast National Bank, San Antonio, Tex Texas National Bank of Dallas, Dallas, Tex Bayshore National Bank of La Porte, La Porte, Tex National Bank of Commerce of Brownsville, Brownsville, Tex Texas City, Tex Jan. 16 Tan. 18 Jan. 27 Feb. 1 Feb. 7 Feb. 22 Feb. 28 Feb. " H Feb. 15 Feb! 22 Mar. Apr. Apr. Apr. May 28 30 30 1 May 11 May 11 May 11 May 12 May 18 May 18 181 TABLE B-4.—Applications for new national bank charters, approved and rejected, with name of bank and date of approval or rejection, calendar 1964, by States—Continued Texas— Continued Approved Rejected 1964 1964 Westmoreland National Bank of Dallas, Dallas, Tex May 29 Spearman, Tex June 24 Olney, Tex July 2 Houston, Tex July 7 Juy 8 Jacinto City, Tex July Julyy 17 McAUen, Tex Jully 27 Floydada, Tex 27 Colonial National Bank of Garland, Garland, Tex July 31 Dallas, Tex Aug. 20 Irving, Tex Aug. 31 Boerne, Tex Oct. 16 Dallas, Tex Dec. 4 Lubbock,Tex Dec. 7 Lubbock, Tex Dec. 7 Eagle Lake, Tex Dec. 14 Houston, Tex Dec. 14 LaMarque, Tex Dec. 14 Pasadena, Tex Dec. 29 Washington—Continued Othello First National Bank, Othello, Wash Kennewick National Bank, Kennewick, Wash Renton, Wash Bank of Vancouver, National Association, Vancouver, Wash Ocean Shores, Wash Tacoma, Wash Highlands National Bank of Renton, Renton, Wash Central Bank of Tacoma, National Association, Tacoma, Wash (Conversion)... Mar. 19 Nov. 6 Apr. 22 May 26 July 31 July 22 Oct. 30 Nov. 5 Dec. 4 Dec. 16 West Virginia First National Bank of West Hamlin, West Hamlin, W.Va Apr. 8 The First National Bank of Belle, Belle, W.Va May 11 Charleston, W.Va Dec. 11 Utah Wasatch National Bank, Murray, Utah.. Sandy, Utah Citizens National Bank, Ogden, Utah... Holladay, Utah Approved Rejected 1964 1964 Wisconsin June 24 Dec. 10 Virginia Bailey's Crossroads, Va Apr. 15 First National Bank of Norfolk, Norfolk, Va Apr. 29 Winchester, Va July 10 Second National Bank of Richmond, Richmond, Va Oct. 30 Arlington, Va Dec. 11 Metropolitan National Bank, Richmond, Va Dec. 18 Washington Tacoma, Wash Apr. 8 National Bank of Mason County, Shelton, Wash Apr. 13 Racine County National Bank, Franksville, Wis. (Conversion) First American National Bank of Wausau, Wausau, Wis. (Conversion) Central National Bank of Stettin, Stettin, Wis Midland National Bank, Milwaukee, Wis. July 10 Sept. 25 Sept. 25 Sept. 30 Wyoming Western National Bank of Casper, Casper, Wyo y J Hillt Hilltop National Bank, Casper, Wyo First National Bank at Douglas, Douglas, Wyo Western National Bank of Lovell, Lovell, Wyo University National Bank of Laramie, Laramie, Wyo Sheridan, Wyo 8 Feb. 8 May 1 June 3 June 30 July 17 TABLE B-5.—National banks chartered during calendar 1964: by charter number, title and location. States, and total capital account Charter No. 15339 15303 15342 15427 15267 15316 15441 15402 Title and location of bank, by States Auburn National Bank of Auburn, Auburn i American National Bank of Birmingham, Birmingham. First National Bank of Butler, Butler Shoals National Bank of Florence, Florence Peoples National Bank of Huntsville, Huntsville The American National Bank of Huntsville, Huntsville. Capital National Bank of Montgomery, Montgomery. . Baldwin National Bank of Robertsdale, Robertsdale l. . Total: 8 banks.. 15364 Continental National Bank, Phoenix. . 15387 15313 15257 First National Bank of Brinkley, Brinkley First National Bank in Osceola, Osceola » Commercial National Bank of Texarkana, Texarkana. Total: 3 banks. See footnote at end of table. 182 Total capital account $800, 736. 76 600, 000. 00 500, 000. 00 750, 000.00 800, 000. 00 500, 000. 00 1, 000, 000. 00 397,915.76 5, 348, 652. 52 3, 270, 792. 60 400, 000. 00 798, 722. 63 625, 000.00 1, 823,722. 63 TABLE B-5.—National banks chartered during calendar 1964: by charter number, title and location, States, and total capital account—Continued CALIFORNIA Alameda First National Bank, Alameda Orange Empire National Bank, Anaheim Bakersfield National Bank, Bakersfield National Bank of Berkeley, Berkeley Inyo-Mono National Bank, Bishop Peninsula National Bank of Burlingame, Burlingame Concord National Bank, Concord. Valley National Bank of Delano, Delano Gateway National Bank, El Segundo Surety National Bank, Encino Escondido National Bank, Escondido Humboldt National Bank, Eureka Hayward National Bank, Hayward Livermore National Bank, Livermore Pioneer National Bank, Los Angeles Silvex-lake National Bank, Los Angeles Hollywood National Bank, Los Angeles Marina Del Rey National Bank, Marina Del Rey Newport National Bank, Newport Beach County National Bank, Orange Commercial National Bank, Orange County (P.O. Buena Park) Palm Springs National Bank, Palm Springs Sequoia National Bank of San Mateo County, Redwood City Valley National Bank of Salinas, Salinas Republic National Bank of San Diego, San Diego Commonwealth National Bank of San Francisco, San Francisco Commercial National Bank of San Leandro, San Leandro San Luis Obispo National Bank, San Luis Obispo Northern California National Bank of San Mateo, San Mateo Los Padres National Bank, Santa Maria Lincoln National Bank, Santa Rosa Pacific Industrial National Bank of South El Monte, South El Monte. San Joaquin Valley National Bank, Tulare Saddleback National Bank, Tustin , Westminster National Bank, Westminster Heritage National Bank, Westwood National Bank of Whittier, Whittier. Oakwood National Bank, Woodland Hills Total: 38 banks. $1,500,000.00 2, 000, 000. 00 1,500,000.00 1,500,000.00 750, 000. 00 2, 500, 000. 00 1,500,000.00 1,000,000.00 2, 000, 000. 00 2, 000, 000. 00 1,000,000.00 1,000,000.00 1,000,000.00 1,250,000.00 2, 000, 000. 00 1,500,000.00 1,500,000.00 1, 000, 000. 00 1,500,000.00 2, 250, 000. 00 1,500,000.00 1,250,000.00 1,500,000.00 1,250,000.00 3, 000, 000. 00 6, 000, 000. 00 2, 000, 000. 00 1, 000, 000. 00 2, 500, 000. 00 1,000,000.00 1,750,000.00 1,000,000.00 1,000,000.00 750, 000. 00 1,500,000.00 2, 400, 000. 00 1,500,000.00 1,000,000.00 62,150, 000. 00 COLORADO Boulder National Bank, Boulder The East Colorado Springs National Bank, Colorado Springs The Western National Bank of Colorado Springs, Colorado Springs National Bank of Delta, Delta South Colorado National Bank, Denver The First National Bank of Bear Valley, Denver. Metropolitan National Bank, Denver Mesa National Bank of Grand Junction, Grand Junction South Platte National Bank, La Salle First National Bank of Southglenn, Arapahoe County (P.O. Littleton) Westlake First National Bank, Loveland Total: 11 banks 510,650.00 505, 000. 00 525, 000. 00 309, 000. 00 360, 000. 00 522, 500. 00 900, 000. 00 540, 000. 00 367, 500. 00 312,500.00 240, 000. 00 5,092,150.00 CONNECTICUT The North Haven National Bank, North Haven.. . . Norwalk National Bank, Norwalk Orange National Bank, Orange Westport National Bank, Westport Total: 4 banks 540, 000. 00 500, 000. 00 696, 000. 00 450, 000. 00 2,186,000.00 DISTRICT OF COLUMBIA United Community National Bank. 1,200,000.00 See footnote at end of table. 183 TABLE B-5.—-National banks chartered during calendar 7964: by charter number, title and location, States, and total capital account—Continued Charter No. Title and location of bank, by States 15413 Peoples National Bank of Bay Harbor Islands, Bay Harbor Islands 15421 First Bank & Trust Co. of Boca Raton, National Association, Boca Raton x 15438 Boynton Beach First National Bank, Boynton Beach 15288 First National Bank of Gape Canaveral, Cape Canaveral 15425 Second City National Bank at Clearwater, Clearwater 15426 Third City National Bank at Clearwater, Clearwater 15270 The American National Bank in Cypress Gardens, Cypress Gardens 15337 Westchester National Bank of Dade County, Dade County—Coral Way at Galloway Road 15348 First National Bank of DeBary, DeBary 15448 Manufacturers National Bank of Hialeah, Hialeah 15237 The First National Bank of Maitland, Maitland 15318 Westside National Bank of Manatee County, Manatee County (P.O. Bradenton) 15311 National Bank of Melbourne & Trust Co., Melbourne l 15262 Five Point National Bank of Miami, Miami 15268 Fidelity National Bank of South Miami, South Miami 15278 Jefferson National Bank of Miami Beach, Miami Beach 15296 Capital National Bank of Miami, Miami1 15307 Lincoln National Bank of Miami, Miami 15411 United National Bank, Miami 15432 Okaloosa National Bank at Niceville, Niceville 15282 Halifax National Bank of Port Orange, Port Orange 15277 Northeast National Bank of St. Petersburg, St. Petersburg 15281 Liberty National Bank of St. Petersburg, St. Petersburg 15396 Second National Bank of Tampa, Tampa 15263 First National Bank of the Upper Keys, Tavernier 15287 Brevard National Bank, Titusville Total: 26 banks. First National Bank of Perry, Perry. 15368 15260 15459 15391 15371 15458 15389 15272 15346 American National Bank of Champaign, Champaign Columbia National Bank of Chicago, Chicago Seaway National Bank of Chicago, Chicago The Pershing National Bank of Decatur, Decatur First National Bank of Jacksonville, Jacksonville Midwest National Bank of Moline, Moline Community National Bank in Monmouth, Monmouth. First National Bank of Mount Prospect, Mount Prospect1. . . . The First National Bank of Western Springs, Western Springs * 300, 000. 00 Bank of Indiana, National Association, Gary 1 2, 090, 079. 29 Community National Bank of Clear Lake, Clear Lake. Hays National Bank, Hays National N i l B Bank k off Wichita, Wihi Wichita 350, 000. 00 750, 000. 00 , 000, 000. 00 400, 000. 00 350, 000. 00 350, 000. 00 450, 000. 00 528,132.23 723, 458. 76 4, 901, 590. 99 Total: 9 banks. 15306 15291 $420, 000. 00 1,189, 645. 77 500, 000. 00 620, 000. 00 500, 000. 00 400, 000. 00 300, 000. 00 600, 000. 00 450, 000. 00 600, 000. 00 600, 000. 00 400, 000. 00 1,801, 419. 41 1, 000,000. 00 500, 000. 00 1,000, 000. 00 2, 964,401.01 600, 000. 00 3, 000,000. 00 400, 000. 00 525, 000. 00 500, 000. 00 500, 000. 00 00 500, 000. 00 425, 000. 600, 000. 00 20,895,466.19 15373 15251 Total capital account 350, 000. 00 KANSAS 500, 000. 00 500, 000. 00 Total: 2 banks 1,000,000.00 LOUISIANA First National Bank of St. Bernard Parish, Arabi. , First National Bank of Denham Springs, Denham Springs Riverlands National Bank in Laplace, Laplace Total: 3 banks See footnote at end of table. 15338 15344 15279 184 450, 000. 00 500, 000. 00 300, 000. 00 1,250,000.00 TABLE B-5.—National banks chartered during calendar 1964: by charter number, title and location. States, and total capital account Title and location of bank, by States Charter No. Total capital account MARYLAND 15314 15285 15365 15249 Aberdeen National Bank, Aberdeen Belair National Bank, Bowie University National Bank, College Park Chesapeake National Bank, Towson, Maryland, Towson. Total: 4 banki 15399 Commonwealth National Bank, Boston. $500,000. 00 800, 000. 00 1,000,000.00 1,250,000.00 3, 550, 000. 00 MASSACHUSETTS 3, 400, 000. 00 MICHIGAN 15446 15392 15367 15444 15274 15403 15420 15286 First National Bank of Fenton, Fenton Grand Valley National Bank, Grandville City Bank & Trust Co., National Association, Jackson l . Livonia National Bank, Livonia 1 National Bank of Rochester, Rochester Valley National Bank of Saginaw, Saginaw * l Central National Bank of St. Johns, St. Johns First National Bank of Wyoming, Wyoming 1 Total: 8 banks. 15304 15295 15309 15401 Valley National Bank of LeSueur, LeSueur l National City Bank of Minneapolis, Minneapolis. First National Bank of Navarre, Navarre Citizens National Bank of Willmar, Willmar Total: 4 banks 15284 15386 First National Bank of Clarksdale, Clarksdale. First National Bank of Iuka, Iuka Total: 2 banks. . . . 15454 15242 15299 15261 15377 15452 15362 15302 15457 First National Bank of Annapolis, Annapolis. Dexter National Bank, Dexter Security National Bank of Joplin, Joplin Metropolitan National Bank, Kansas City First National Bank of Poplar Bluff, Poplar Bluff Mercantile Trust Co. National Association, St. Louis *.. The First National Bank of Pulaski County, St. Robert. The First National Bank of Sikeston, Sikeston *. Security National Bank of Sikeston, Sikeston Total: 9 banks. 15397 First National Bank of Eureka, Eureka. 15376 15379 15435 15248 City National Bank of Lincoln, Lincoln.... Security National Bank of Omaha, Omaha. West Omaha National Bank, Omaha l Plainview National Bank, Plainview Total: 4 banks. . . 700, 000. 00 400, 000. 00 026,981.00 056, 702. 05 500, 000. 00 582,601.87 511,000.32 549,571.00 11,326,856.24 430, 473. 52 3, 000, 000. 00 200, 000. 00 250, 000. 00 3, 880, 473. 52 650, 000. 00 300, 000. 00 950, 000. 00 300,000. 00 350, 000. 00 600, 000. 00 500, 000. 00 612,500.00 74, 366, 787. 07 300, 000. 00 845,931.00 600,000. 00 78,475,218.07 150,000.00 750, 000. 00 1,000,000.00 500, 000. 00 385, 592. 28 2, 635, 592. 28 See footnote at end of table. 779-563—65—13 185 TABLE B-5.—National banks chartered during calendar 1964: by charter number, title and location, States, and total capital account—Continued NEW JERSEY Eatontown National Bank, Eatontown Raritan Valley National Bank, Edison Township First Bank & Trust Co., National Association, Fords 1 Madison National Bank, Madison New Jersey National Bank & Trust Co., Neptune » First National Bank of Scotch Plains, Scotch Plains Peoples National Bank of Sparta, Sparta Total: 7 banks 000, 000. 00 000, 000. 00 817,901.01 700, 000. 00 653, 567. 04 850, 000. 00 500, 000. 00 12, 521, 468, 05 NEW MEXICO First National Bank in Clayton, Clayton First National Bank of Rio Arriba, Espanola* Valley National Bank, Espanola Farmington National Bank, Farmington Total: 4 banks 400, 000. 00 830, 943. 47 500, 000. 00 500, 000. 00 2, 230, 943. 47 NEW YORK First National Bank of East Hampton, East Hampton Century National Bank & Trust Co., New York Chelsea National Bank, New York Freedom National Bank of New York, N.Y Metropolitan National Bank of Syracuse, Syracuse Total: 5 banks 600, 000. 00 3, 000, 000. 00 3, 000, 000. 00 1, 500, 000. 00 3, 000, 000. 00 11,100,000.00 NORTH DAKOTA 250, 000. 00 150,000.00 200, 000. 00 First National Bank of Carrington, Carrington The National Bank of Harvey, Harvey First National Bank of Southwest Fargo, Southwest Fargo 600, 000. 00 Total: 3 banks OHIO First National Bank, Bowling Green i The Capital National Bank, Cleveland * Tower National Bank of Lima, Lima The Central Security National Bank of Lorain County, Lorain * Total: 4 banks OKLAHOMA First National Bank, Henryetta Cache Road National Bank of Lawton, Lawton Oklahoma National Bank of Norman, Norman Founders National Bank of Oklahoma City, Oklahoma City Friendly National Bank in Southwest Oklahoma City, Oklahoma City Southwestern National Bank of Oklahoma City, Oklahoma City First National Bank, Sallisaw, Sallisaw University National Bank of Stillwater, Stillwater. Republic National Bank of Tulsa, Tulsa Guaranty National Bank, Tulsa First National Bank of Weatherford, Weatherford Total: 11 banks 693, 844. 21 3, 174, 538. 44 1, 000, 000. 00 2, 406, 879. 61 7, 275, 262. 26 300, 000. 00 350, 000. 00 510, 000. 00 , 020, 000. 00k 400, 000. 00 600, 000. 00 300, 000. 00 400, 000. 00 1, 020, 000. 00 600, 000. 00 400, 000. 00 5, 900, 000.00 PENNSYLVANIA Lincoln National Bank, Philadelphia Provident National Bank, Philadelphia i Total: 2 banks 1,500,000.00 70,182,068.01 71,682,068.01 TENNESSEE First National County Bank, Spring City See footnote at end of table. 186 300, 000. 00 TABLE B-5.—National banks chartered during calendar 7964: by charter number, title and location, States, and total capital account—Continued Charter No. Title and location of bank, by States TEXAS 15253 15252 15372 15269 15431 15258 15280 15292 15322 15328 15404 15410 15238 15301 15244 15298 15283 15319 15384 15250 15236 15440 15289 15370 Abilene National Bank, Abilene Tascosa National Bank of Amarillo, Amarillo , Great Plains National Bank, Amarillo Citizens National Bank of Beaumont, Beaumont , Gulfway National Bank of Corpus Christi, Corpus Christi. . . Commonwealth National Bank of Dallas, Dallas Citizens National Bank of Dallas, Dallas Inwood National Bank of Dallas, Dallas National Bank of Oak Cliff in Dallas, Dallas Liberty National Bank of Dallas, Dallas Westmoreland National Bank of Dallas, Dallas. , Colonial National Bank of Garland, Garland Westmont National Bank, Houston Union National Bank in Houston, Houston First National Bank of Ingleside, Ingleside Lone Star National Bank, Lone Star First National Bank of Richardson, Richardson Lackland National Bank of San Antonio, San Antonio Neches National Bank of Silsbee, Silsbee Peoples National Bank of Sulphur Springs, Sulphur Springs. Randolph Field National Bank, Universal City Uvalde National Bank, Uvalde White Settlement National Bank, White Settlement. Southwest National Bank of Wichita Falls, Wichita Falls. .. 15390 15254 15353 15334 15247 15315 15461 15293 $505, 000. 00 600, 000. 00 600, 000.00 , 000, 000. 00 500, 000. 00 759, 375. 00 , 020,000. 00 615,000.00 520, 000. 00 520, 000. 00 520, 000. 00 622, 500. 00 500, 000. 00 , 000, 000. 00 250, 000. 00 250, 000. 00 561,000.00 600, 000. 00 400, 000. 00 500, 000. 00 400, 000. 00 410, 000. 00 525, 000. 00 500, 000. 00 13, 677, 875. 00 Total: 24 banks. 15352 15243 Total capital account Draper National Bank, Draper American National Bank of Salt Lake City, Salt Lake City. Total: 2 banks. . Monticello National Bank, Albemarle County (P.O. Charlottesville). Fidelity National Bank, Arlington Woodlawn National Bank, Fairfax County (P.O. Alexandria) American National Bank, Fredericksburg Grundy National Bank, Grundy Fairfield National Bank of Highland Springs, Highland Springs First National Bank of Norfolk, Norfolk Guardian National Bank of Fairfax County, Springfield 352, 000. 00 600, 000. 00 952, 000. 00 750, 000. 00 , 200, 000. 00 900, 000. 00 600, 000. 00 500, 000. 00 300, 000. 00 1,, 500, 000. 00 750, 000. 00 6, 500, 000. 00 Total: 8 banks. WASHINGTON 15351 15324 15445 15264 15418 American National Bank of Edmonds, Edmonds. . . , Timbermens National Bank of Hoquiam, Hoquiam. Othello First National Bank, Othello First Union National Bank, Puyallup National Bank of Mason County, Shelton. 300,000. 00 300, 000. 00 410,000.00 400, 000. 00 410,000.00 1, 820, 000. 00 Total: 5 banks. . WEST VIRGINIA 15385 15414 15406 The First National Bank of Belle, Belle First National Bank of Weirton, Weirton First National Bank of West Hamlin, West Hamlin Total: 3 banks. 200, 000. 00 500, 000. 00 200, 000. 00 900, 000. 00 See footnote at end of table. 187 TABLE B-5.—-National banks chartered during calendar 1964: by charter number, title and location, States, and total capital account—'Continued Charter No. Total capital account Title and location of bank, by States 15381 Brookfield National Bank, Brookfield 15380 Racine County National Bank, Franksville 1 15325 First National Bank oi Glendale, Glendale. , 15335 New London National Bank, New London. 15424 First American National Bank of Wausau *. $600, 000. 00 658,139.30 600, 000. 00 375, 000. 00 2, 871, 053. 65 Total: 5 banks. 5,104,192. 95 WYOMING 15300 15359 15409 15405 Western National Bank of Gasper, Casper Hilltop National Bank, Casper University National Bank of Laramie, Laramie Western National Bank of Lovell, Lovell 500, 000. 00 350, 000. 00 300, 000. 00 200, 000. 00 1, 350,000. 00 Total: 4 banks BANKS FORMED BY F D I G U N D E R SECTION 11 OF T H E FEDERAL DEPOSIT INSURANCE A C T Deposit Insurance National Bank of Dell City, Dell City, Tex. Deposit Insurance National Bank of Newport News, Newport News, Va. i Conversion of State chartered bank. TABLE B-6.—-State chartered banks converted to national banks during calendar 1964, by title and location of bank, State, effective date, outstanding capital stock, surplus, undivided profits and reserves, and total assets Charter No. Title and location of bank 15248 15255 Plain view National Bank, Plainview First Bank & Trust Co., National Association, Fords. First National Bank of Mount Prospect.... First National Bank of Wyoming Capital National Bank of Miami New Jersey National Bank & Trust Co., Neptune. The First National Bank of Sikeston Valley National Bank of Le Sueur National Bank of Melbourne & Trust Co., Melbourne. First National Bank of Rio Arriba, Espanola. First National Bank in Osceola Auburn National Bank of Auburn The First National Bank of Western Springs. City Bank & Trust Company, National Association, Jackson. Racine County National Bank, Franksville. Baldwin National Bank of Robertsdale.... Valley National Bank of Saginaw First National Bank, Bowling Green Central National Bank of St. Johns First Bank & Trust Co. of Boca Raton, National Association. Provident National Bank, Philadelphia.... The Capital National Bank, Cleveland First American National Bank of Waussu. . Livonia National Bank, Livonia Mercantile Trust Co. National Association, St. Louis. Bank of Indiana, National Association, Gary. The Central Security National Bank of Lorain County, Lorain. State Effective date of charter 1964 $77,425,023.50 Total: 27 banks. 15272 15286 15296 15297 15302 15304 15311 15312 15313 15339 15346 15367 15380 15402 15403 15416 15420 15421 15422 15423 15424 15444 15452 15455 15456 1 Includes $25 million capital notes and debentures. 188 Outstanding capital stock Surplus, undivided profits, and Total assets $134,306,090 $2,164, 268, 066 Nebr., NJ... Jan. 21 Jan. 31 100,000 1, 250, 000 284, 025 2,576,516 3, 079, 905 59, 802, 998 111.... Mich. Fla... NJ... Feb. 29 Mar. 31 Apr. 3 Apr. 7 300, 000 300, 000 1,819,125 1, 580, 020 227, 545 202,919 756, 606 3, 074,120 5, 030, 572 8,080,915 30, 963, 000 66,222,816 Mo... Minn. Fla... Apr. 10 Apr. 14 Apr. 24 200, 000 100,000 600, 000 710,227 297, 094 860, 569 8, 694, 700 4, 972, 254 21,730,011 N.M. Apr. 30 300, 000 560, 387 10, 998, 248 Ark... Ala.. . Ill May 1 June 20 June 30 200, 000 200, 000 300, 000 590, 906 605, 560 380, 071 9,488,812 10, 236, 979 12, 701, 674 Mich. Aug. 5 2,100,000 4,915,275 Wis... Aug. 31 200, 000 459, 972 9,105,246 Ala... Mich. Ohio.. Mich. Fla... Oct. Oct. Oct. Nov. Nov. 100, 000 250, 000 275, 000 150,000 510, 000 300, 060 318,495 413,973 388, 329 747, 021 3, 359, 615 10,052,312 8,690,195 4, 740, 605 19, 360, 843 Pa.... Ohio. Wis., Mich. Mo... Nov. Nov. Nov. Dec. Dec. 56,218,580 2,214,586 2, 628, 821 564, 424 669, 934, 765 54, 806, 231 54, 606, 222 18,872,285 51, 494, 610 881, 297, 805 Ind. Ohio 10 14 31 12 9 12 14,754,216 16 1, 000, 000 10 700, 000 15 500, 000 24 47,736,662.501 Dec. 24 900, 000 Dec. 28 1, 000, 000 96,140,173 1,140,068 42, 659, 602 1, 375,331 38, 639, 283 TABLE B—7.—Naiioncl banks reported in voluntary liquidation during calendar 1964 with the names of succeeding banks, the dates of liquidation, and total, capital accounts Title and location of bank Date of liquidation Total capital accounts 17, 999, 332 Total: 11 banks. Southern Hills National Bank, Tulsa, Okla. (15138), absorbed by Mercantile National Bank, Tulsa, Okla Nov. 29,1963 Jan. 14,1964 The Second National Bank of Monmouth, III. (2205) The Bensonhurst National Bank of Brooklyn in New York, N.Y. (13080), absorbed by Chemical Bank New York Trust Co., New York Feb. 25,1964 The First National Bank of Sharpsville, Pa. (6829), absorbed by McDowell National Bank of Sharon, Pa Apr. 18,1964 The Winchester National Bank, Winchester, N.H. (887), absorbed by the Cheshire National Bank of Keene, N.H Apr. 24,1964 Tri-Cities National Bank, Pasco, Wash. (14919), absorbed by Old National Bank of Washington, Spokane, Wash June 30, 1964 The First National Bank of Hagerman, N. Mex. (7503), absorbed by the First National Bank of Roswell, N. Mex July 10,1964 The First National Bank of Barnesboro, Pa. (5818), absorbed by the First National Bank of EbensDec. 12,1964 burg, Pa The Farmers' National Bank of Liberty, Pa. (11127), absorbed by the First National Bank of WellsDec. 14,1964 boro,i Wellsboro, Pa The Pattison National Bank ofElkland, Pa. (5043), absorbed by the First National Bank of WellsDec. 16,1964 born, Wellsboro, Pa The First National Bank of Knoxville, Pa. (9978), absorbed by the First National Bank of WellsDec. 16,1964 boro, Wellsboro, Pa 74, 561 520,970 3, 308, 364 1,250, 000 310, 309 552,380 360, 632 800, 000 269, 933 364, 072 188,111 'Simultaneously with the absorption, the First National Bank of Wellsboro changed its name to Northern National Bank & Trust Co. TABLE B-8.—National banks merged or consolidated with and into State banks during calendar 1964, with effective dates, and total capital accounts Title and location of bank Total: 15 banks. Effective date, 7964 Total capital accounts $16,691,240 The First National Bank of Brewsters, N.Y. (2225), merged with and into the County Trust Co., White Plains, N.Y 457, 762 Jan. 10 The Hallwood National Bank, Hallwood, Va. (7659), merged with and into the Bank of Virginia, Rich451,310 mond, Va Jan. 31 The First National Bank of Mount Vernon, N.Y.1 (5271), merged with and into Chemical Bank New 3,742,613 York Trust Co., New York, N.Y Feb. 24 The First National Bank & Trust Co. of Roebling, N J . (11620), merged with and into Bordentown 644, 431 Banking Co., Bordentown, N J Mar. 26 The First National Bank of Riegelsville, Pa. (9202), merged with and into Girard Trust Com Exchange 718,981 Bank, Philadelphia, Pa., and under the title "Girard Trust Bank'' Mar. 21 The Youngsville National Bank, Youngsville, Pa. (14345), merged with and into Pennsylvania Bank & 514,769 Trust Co., Titusville, Pa Apr. 15 | National Bank of Maryland, Silver Spring, Md. (14846), merged with and into Citizens Bank of Mary826, 594 land, Riverdale, Md May 1 | The First National Bank of Park Ridge, N J . (12195), merged with and into County Trust Co., Tenafly, 860, 922 NJ May 29 The First National Bank of Westboro, Mass. (421), consolidated with Guaranty Bank & Trust Co., 758, 257 Worcester, Mass June 30 | The Elk County National Bank of Ridgway, Pa. (5014), merged with and into the St. Marys Trust Co., St. Marys, Pa., and under the title "Elk County Bank & Trust Co." ' 834, 682 July 17 | The First National Bank of Milltown, N2 J . (10935), merged with and into the Edison Bank, Edison, N J . Aug. 14 j 1,006,189 Second National Bank of Philadelphia, Pa. (21 3), merged with and into Provident Tradesmens Bank & Trust Co., Philadelphia, Pa Aug. 16 | 3,662,611 Belfast National Bank, Belfast, N.Y. (9644), merged with and into the First Trust Co. of Allegany Countv, Wellsville, N.Y. Oct. 14 | 269, 620 The Citizens National Bank of Hampton, Va. (13775), merged with and into Citizens Marine Jefferson Bank, Newport News, Va., and under title "Citizens and Marine Bank" Oct. 30 i 1,469,913 The First National Bank of Cairo, N.Y. (12586), merged with and into State Bank of Albany, N.Y 472, 586 Nov. 10 j 1 With 1 local and 2 outside branches. 2 With 4 local branches. 189 TABLE B-9.—National banks converted into State banks, calendar 1964, with effective date, and total capital accounts Title and location of bank Effective Total capital date, 1964 accounts Total: 6 banks $2, 945, 652 Midway National Bank of Cedar Falls, Iowa (14946), converted into Midway Bank & Trust The First National Bank of Monticello, Ga. (9346), converted into Bank of Monticello The Harrisburg National Bank of Houston, Tex. (12840), converted into Harrisburg Bank Deer Park National Bank, Deer Park, Tex. (14819), converted into Deer Park Bank Clear Creek National Bank, Seabrook, Tex. (14983), converted into Clear Creek Bank First National Bank of Kerens, Tex. (13656), converted into the First State Bank of Kerens Feb. Feb. June Oct. Oct. Nov. 1 8 12 15 15 30 186, 937 195, 372 15 440, 702 520, 480 334, 886 267, 275 TABLE B—10.—Purchases of State banks by national banks, calendar 1964, with title and location, effective dates of purchase, and total capital accounts of State banks Title and location of bank Total capital $3, 035, 904 Total: 8 banks. The First National Bank of Wilkes-Barre, Pa. (30), purchased the White Haven Savings Bank, White Haven, Pa The Michigan National Bank, Lansing, Mich. (14032), purchased the Grand Ledge State Bank and the Loan & Deposit State Bank, Grand Ledge, Mich The First National Bank & Trust Co. of Kalamazoo, Mich. (191), purchased the Delton State Bank, Delton, Mich Lafayette National Bank, Lafayette, Ind. (14175), purchased the Bank of Dayton, Ind Michigan National Bank, Lansing, Mich. (14032), purchased the Citizens Industrial Bank, Grand Rapids, Mich The National Bank of Commerce of Seattle, Wash. (4375), purchased the Bank of Endicott, Wash First Security Bank of Idaho, National Association, Boise, Idaho (14444), purchased the Farmers Bank, Kendrick, Idaho 190 Mar. 14 354, 844 592, 000 405, 000 Apr. 18 May 9 226, 088 152,273 June 15 June 19 503, 921 226, 778 Aug. 21 575, 000 Jan. 3 TABLE B-l 1.—Consolidations of national banks, or national and State banks, calendar 1964, with title and location, outstanding capital stock, surplus, undivided profits and reserves, and total assets Title and location of bank Total: 8 consolidations (after consummation) Texas National Bank of Houston, Houston, Tex. (10152), with and the National Bank of Commerce of Houston, Houston, Tex. (10225), which had consolidated Jan. 17, 1964, under charter of the latter bank (10225) and under title "Texas National Bank of Commerce of Houston." The consolidated bank at the date of consolidation had Beaver County Trust Co., New Brighton, Pa., with and the Western Pennsylvania National Bank, McKeesport, Pa. (2222), which had consolidated Feb. 7, 1964, under charter and title of the latter bank (2222). The consolidated bank at the date of consolidation had Security Trust Co., Lynn, Mass.,1 with and the Danvers National Bank, Danvers, Mass. (7452), which had , consolidated Feb. 21, 1964, under charter of the latter bank (7452), and under title of "Security-Danvers National Bank." The consolidated bank at the date of consolidation had , Commonwealth Bank & Trust Co., Pittsburgh,2 Pa., with.. and the Union National Bank of Pittsburgh, Pittsburgh, Pa. (705), which had , consolidated Feb. 28, 1964, under charter and title of the latter bank(705). The consolidated bank at the date of consolidation had The First National Bank of Narrowsburg, Narrowsburg, N.Y. (12496), with and the First National Bank in Callicoon, Callicoon, N.Y. (13590), which had consolidated June 30, 1964, under charter of the latter bank (13590), and under title of "United National Bank." The consolidated bank at the date of consolidation had , Citizens National Bank of Beaver Falls, Beaver 3 Falls, Pa. (14764), with and Western Pennsylvania National Bank, McKeesport, Pa. (2222), which had consolidated Oct. 3, 1964, under charter and title of the latter bank (2222). The consolidated bank at the date of consolidation had Calhoun Siate Bank, Homer, Mich., with and City Bank & Trust Co., National Association, Jackson, Mich. (15367), which had ! consolidated Nov. 5, 1964, under charter and title of the latter bank (15367). The consolidated bank at the date of consolidation had The First National Bank of Wise, Wise, Va. (10611), with. . and the First National Bank of Norton, Norton, Va. (6235), which had , consolidated July 31, 1964, under the charter of the latter bank (6235) and under title "The Wise County National Bank." The consolidated bank at the date of consolidation had Outstanding capital stock $54, 870, 350 Surplus $94, 020, 680 Undivided profits and reserves $25, 089, 055 Total assets $2, 463, 804,291 16,000,000 6, 302, 464 322, 646, 899 15,000,000 19,267,280 3, 921, 031 503, 743, 098 24, 000, 000 300, 000 35, 267, 280 500, 000 7, 753, 690 15,246,310 3, 266, 660 542,121, 391 ,153,690 550, 000 15,746,310 1,221,000 3, 543, 835 856, 559 548, 912, 688 29, 783, 695 350, 000 450, 000 276,139 900, 000 3,187, 500 1, 600, 000 8, 812, 500 1,203,698 2, 039, 410 39, 260, 794 164,640,486 4, 316, 500 13,183, 500 2, 561, 550 222, 879, 859 10,000,000 20, 000, 000 4,100, 966 387, 520, 345 50, 000 200, 000 119,180 4, 322, 809 100, 000 350, 000 80, 409 6,122,103 10, 444, 912 9, 000, 000 10,223,496 377,168 826, 389, 997 8,205,160 9, 477, 099 350, 000 350, 000 199, 590 200, 000 200, 000 81,462 6,107, 963 8,642,910 16,407,090 4,103,069 530, 002, 302 8,892,910 100, 000 16,607,090 250, 000 4,134,532 68,214 536,110,264 3, 944,140 2,100,000 3, 900, 000 1,128, 325 100, 000, 237 2, 245, 000 100, 000 3, 900, 000 100, 000 1,401,539 172,893 103, 944, 377 3,618,827 160, 000 450, 000 177, 256 7, 606, 828 328, 750 550, 000 281,399 11,220,914 1 With 2 local branches. 4 local and 7 outside branches With L 2 With 3 191 TABLE B-12.—Mergers of national banks, or national and State banks, calendar 7964, with title and location, outstanding capital stock, surplus, undivided profits and reservs, and total assets Title and location of bank Total: 69 mergers (after consummation) The Citizens Bank, Westerville, Ohio,1 with and the City National Bank & Trust Co. of Columbus, Columbus, Ohio (7621), which had merged Jan. 2, 1964, under the charter and title of the latter bank (7621). The merged bank at the date of merger had Traders Bank & Trust Co., Hazleton, Pa., with and Northeastern Pennsylvania National Bank & Trust Co., Scranton, Pa. (77), which had merged Jan. 3, 1964, under charter of the latter bank (77) and under title of "Northeastern Pennsylvania National Bank & Trust Co." The merged bank at the date of merger had The Bank of Worcester, Worcester, N.Y., with and National Commercial Bank & Trust Co., Albany, N.Y. (1301), which had merged Jan. 31,1964, under the charter and title of the latter bank (1301). The merged bank at the date of merger had The First National Bank of Lacona, Lacona, N.Y. (10175), with and the Merchants National Bank & Trust Co. of Syracuse, Syracuse, N.Y., (1342), which had merged Jan. 31, 1964, under the charter and title of the latter bank (1342). The merged bank at the date of merger had The Farmers & Merchants National Bank of Williamsburg Williamsburg, Pa. (9392), with and the First National Bank of Claysburg, Claysburg, Pa. (10232), which had merged Jan. 31, 1964, under charter of the latter bank (10232), and under title of "The Central Pennsylvania National Bank of Claysburg." The merged bank at the date of merger had Farmers Bank of Holland, Inc., Holland, Va., with and Seaboard Citizens National Bank, Norfolk, Va. (10194) which had merged Feb. 12, 1964, under the charter and title of the latter bank (10194). The merged bank at the date of merger had The First National Bank of New Bloomfield, New Bloomfield, Pa. (5133), with and the Harrisburg National Bank & Trust Co., Harrisburg, Pa. (580), which had merged Feb. 14, 1964, under the charter and title of the latter bank (580). The merged bank at the date of merger had First National Bank of Minoa, Minoa, N.Y. (13476), with. . and Lincoln National Bank & Trust Co. of Central New York, Syracuse, N.Y. (13393), which had merged Feb. 28, 1964, under charter and title of the latter bank (13393). The merged bank at the date of merger had The First National Bank of Pullman, Pullman,2 Wash. (4699), with and Old National Bank of Washington, Spokane, Spokane, Wash. (4668), which had merged Feb. 28, 1964, under the charter and title of the latter bank (4668). The merged bank at the date of merger had The Peoples Bank of Erie County, Hamburg,3 N.Y., with and Liberty National Bank & Trust Co., Buffalo, N.Y. (15080), which had merged Mar. 5, 1964, imder the charter and title of the latter bank (15080). The merged bank at the date of merger had | See footnotes at end of table. 192 Outstanding capital stock Surplus Undivided profits and reserves $269,917,449 $500, 733, 472 $157, 678,147 250, 000 300, 000 363, 955 9,134,215 6, 300,000 6,700,000 3,100,000 217,261,957 6, 650, 000 350, 000 7, 350,000 450,000 3, 001, 272 279,156 224, 995, 630 14, 827, 693 5, 562,000 5, 638, 000 3, 664, 837 178,100,427 6,066, 000 60, 000 6,000, 000 120,000 3, 877, 994 160, 821 192,928,121 2, 928,713 7,283, 205 17, 928, 925 4, 091, 725 460,275,112 7, 346,205 17, 928, 925 4, 369, 546 463, 049, 981 50, 000 150, 000 98, 425 3, 095, 592 2, 553,100 5,000, 000 2, 446, 961 129, 903, 495 2, 643,100 5,110,000 2, 538, 924 133, 304,140 50, 000 125,000 42, 956 2,003,046 200, 000 400,000 178,972 9,229, 370 250,000 35,000 525, 000 185,000 221,929 119,488 11,232,417 2, 876,156 2, 375, 000 7, 625,000 352, 918 103,615,510 2, 434, 500 7, 785, 500 473, 407 106,102, 722 50,000 250, 000 185,261 4, 847,238 2, 830,000 7,170,000 1, 510, 771 117,908,599 2, 905,000 150,000 7, 420, 000 300, 000 2, 654, 528 123, 567 122, 755, 833 6,273,433 2, 843, 590 6, 000, 000 2, 566, 817 156,033,619 3, 053, 590 6, 240,000 2, 690, 385 162,211,424 250, 000 750,000 312,582 15,342,275 4,125, 000 5, 875, 000 4,857,013 176,873,976 4, 662, 500 497, 000 7, 337, 500 564, 200 4,169, 596 675, 687 191,719,372 22, 313, 663 4, 899, 040 10,426, 250 3, 367, 293 297,076, 017 5,425, 860 10, 960, 630 4,177, 517 319,308,335 Total assets $12, 367, 076, 645 TABLE B-12.—Mergers of national banks, or national and State banks, calendar 1964, with title and location, outstanding capital stock, surplus, undivided profits and reserves, and total assets—Continued Title and location of bank Outstanding capital stock The First National Bank of Bicknell, Bicknell, Ind. (7155), with Bicknell Trust &. Savings Co., Bicknell, Ind., with The Citizens State Bank, Bicknell, Ind., with , and the American National Bank of Vincennes, Vincennes, Ind. (3864), which had merged Mar. 21, 1964, under charter and title of the the latter bank (3864). The merged bank at the date of merger had Darlington County Bank & Trust Co., Darlington S.C., with and the First National Bank of South Carolina of Columbia, Columbia, S.C. (13720), which had merged Mar. 31, 1964, under charter and title of the latter bank (13720). The merged bank at the date of merger had The New Market National Bank, Newmarket, N.H. (1330), with and the Rockingham National Bank of Exeter, Exeter, N.H. (12889), which had merged Apr. 3,1964, under charter and title of the Jatter bank (12889). The merged bank at the date of merger had , The First National Bank of Buena Vista, Buena Vista, Va. (9890), with and Virginia National Bank, Norfolk, Va. (9885), which had merged Apr. 3,1964* under charter and title of the latter bank (9885). The merged bank at the date of merger had .•••••: •••• Southern Bank of Commerce, Danville, Va.}4 with , and Virginia National Bank, Norfolk, Va. (9885), which had , merged Apr. 3, 1964, under charter and title of the latter bank (9885). The merged bank at the date of merger had , The First National Bank of Lebanon, Lebanon, Va. (6886), with ,.., and the First National Exchange Bank of Virginia, Roanoke, Va. (2737), which had merged Apr. 24, 1964, under charter and title of the latter bank (2737). The merged bank at the date of merger had The First National Bank of Richlands, Richlands, Va. (10850), with and the First National Exchange Bank of Virginia, Roanoke, Va. (2737), which had !" merged Apr. 24, 1964, under charter and title of the latter bank (2737). The merged bank at the date of merger had , State Bank of Linwood, Linwood, Mich., with and Peoples National Bank & Trust Co. of Bay City, Bay City, Mich. (14641), which had merged Apr. 25, 1964, under charter and title of the latter bank (14641). The merged bank at the date of merger had The Union National Bank of Mahanoy City,5 Mahanoy City, Pa. (3997), with and the Pennsylvania National Bank & Trust Co. of Pottsville, Pottsville, Pa. (1663), which had merged May 8, 1964, under charter and title of the latter bank (1663). The merged bank at the date of merger had The First National Bank of Blue Ridge Summit, Blue Ridge Summit, Pa. (12281), with and First National Bank & Trust Co. in Waynesboro, Waynesboro, Pa. (11866), which had merged May 9, 1964, under the charter and title of the latter bank (11866). The merged bank at the date of merger had , See footnotes at end of table. 7 79-563—65 14 Surplus Undivided profits and reserves Total assets $60, 000 35, 000 35, 000 $105,000 65,000 85, 000 $135,094 37, 843 41,913 $2, 398,048 1,697,597 1,072,072 750, 000 750,000 822, 778 21,799, 040 880, 000 880, 000 1,162,330 26, 591, 805 215,000 310,000 137,137 6, 372, 795 2,192,370 4, 807, 630 1,439,166 105,971,091 2,321,370 5,178, 630 1,550,205 111,768,296 75, 000 165,000 44, 697 3, 640, 775 200, 000 425, 000 171,763 9, 570, 223 275, 000 590, 000 216,460 13,210,998 120, 000 280, 000 52, 867 4, 995, 320 8,084, 825 20, 812, 775 4, 498, 463 394, 470,103 8,198, 825 100, 000 21,098,775 200, 000 4, 551, 330 23, 658 399,206, 974 2, 912, C64 8, 014, 825 20, 582, 775 4, 474, 805 391, 628, 739 8, 084, 825 20, 812, 775 4, 498, 463 394, 470,103 120, 000 440, 000 266, 532 8, 513, 321 5, 752, 490 10, 685, 010 1, 698, 937 205,164,466 5, 980, 490 11,125,010 1,771,133 213,427,071 250, 000 1,000,000 300,315 14, 372, 920 5, 314, 990 9,685,010 1, 740, 736 191,263,269 5, 752, 490 150,000 10,685,010 150,000 1,698,937 106, 039 205,164, 466 3, 542, 358 2, 977, 500 3, 600, 000 1,477,323 99,150,775 3, 086, 250 3, 600, 000 1, 774, 612 102,693,133 312, 500 500, 000 44, 843 13, 951, 362 800, 000 1, 000, 000 340, 685 37, 526, 608 1, 050, 000 1, 500, 000 448, 028 51, 477, 970 75, 000 225, 000 91,918 4, 432, 923 900, 000 1, 700, 000 598, 231 19,757,539 1, 050, 000 1, 925, 000 588, 900 24,190, 461 193 TABLE B-12.—Mergers of national banks, or national and State banks, calendar 7964, with title and location, outstanding capital stock, suplus, undivded profits and reserves, and total assets—Continued Title and location of bank Cherry Hill National Bank, Cherry Hill, N J . 8 (14936), with. and First Camden National Bank & Trust Co., Camden, NJ. (1209), which had merged May 15, 1964, under charter and title of the latter bank (1209). The merged bank at the date of merger had Woodbridge National Bank, Woodbridge, NJ. • (14378), with and First Bank & Trust Co., National Association, Fords, NJ.? (15255), which had merged May 15, 1964, under the charter and title of the latter bank (15255). The merged bank at the date of merger had The Bank of Rowland, Rowland, N.C., with and Southern National Bank of North Carolina, Lumberton, N.C. (10610), which had merged May 23, 1964, under charter and title of the latter bank (10610). The merged bank at the date of merger had Citizens Bank of Darlington, Darlington, S.C.10 with and the Citizens & Southern National Bank of South Carolina, Charleston, S.C. (14425), which had merged May 23, 1964, under charter and title of the latter bank (14425). The merged bank at the date of merger had Carolina Bank, Graniteville, S.C.» with and the Citizens & Southern National Bank of South Carolina, Charleston, S.C. (14425), which had merged May 23, 1964, under the charter and title of the latter bank (14425). The merged bank at the date of merger had Salmon Falls Bank, Rollinsford, N.H. with and the First National Bank of Somersworth, Somersworth, N.H. (1180), which had merged May 29, 1964, under the charter of the latter bank (1180) and under the title "First SomersworthRollinsford National Bank." The merged bank at the date of merger had The American National Bank of San Bernardino, n San Bernardino, Calif. (10031), with and the Bank of California, National Association, San Francisco, Calif. (9655), which had merged June 26, 1964, under charter and title of the latter bank (9655). The merged bank at the date of merger had The Macungie Bank, Macungie, Pa., with and the First National Bank of Allen town, Allen town, Pa. (373), which had merged June 30, 1964, under charter and title of the latter bank (373). The merged bank at the date of merger had The Peoples National Bank of West Alexander, West Alexander, Pa. (8954), with and the First National Bank of Fredericktown, Federicktown, Pa. (5920), which had merged June 30, 1964, under the charter and title of the latter bank (5920). The merged bank at the date of merger had National Bank of Commerce of Chicago, Chicago, 111. (14349), with and Central National Bank in Chicago, Chicago, 111. (14362), which had merged July 18, 1964, under the charter and title of the latter bank (14362). The merged bank at the date of merger had Allegan State Bank, Aliegan, Mich., with and the First National Bank & Trust Co. of Kalamazoo, Kalamazoo, Mich. (191), which had merged July 18, 1964, under the charter and title of the latter bank (191). The merged bank at the date of merger had See footnotes at end of table. 194 Outstanding capital stock $300, 000 Undivided profits and reserves $300, 000 $228, 817 Total assets $7, 424, 859 3,190,700 6, 059, 300 1, 492, 348 169,477,653 3,415,700 6, 584, 300 1,571,165 176,902,512 500, 000 1,000, 000 1,250,000 2,250, 000 1, 375, 000 75, 000 2, 250, 000 275, 000 80, 662 117,412 85, 733, 774 3, 858, 503 1, 000, 000 1, 622, 000 378, 634 32, 695, 056 1,142, 500 150,000 1, 829, 500 300, 000 496, 046 128,138 35, 908, 303 5,611,686 3,136,650 9, 385, 350 1,129,832 170,155,052 3, 246, 650 125, 000 9, 685, 350 0 1,225,282 78, 828 175, 735, 790 2, 432, 227 3,114, 650 9, 385, 350 1,123,115 167, 853, 862 3,136,650 50, 000 9, 385, 350 50, 000 1,129, 832 63,102 170,155,052 719,560 100, 000 100, 000 392, 603 1,631,413 115,241 24, 786,119 65, 568, 994 1,331,195 150,000 150,000 1, 050, 000 1, 050, 000 1,333,074 16,370,800 34, 209, 200 7,594,157 1,009,630,696 17, 890, 800 50,000 37,109,200 250,000 6, 080, 061 195,159 1, 074, 572, 714 4, 559, 586 3,094,230 7,100, 000 2, 918, 683 155,725,087 3, 226, 830 7, 350, 000 3,031,242 160,284,674 178, 343 2, 050, 756 64, 555, 815 1,842,728 50, 000 150,000 83, 841 250, 000 450,000 158,352 570, 000 242,193 15,567,112 464, 007 40, 947, 905 330, 000 13, 724, 384 1,000,000 1,500,000 5,000, 000 5, 000,000 1, 327, 361 207,018,960 6,250, 000 400,000 6,250, 000 400,000 1,791,369 467,153 247, 966, 865 15,420,907 1, 800, 000 3,200,000 2,218,124 114,521,893 2,160,000 3,200, 000 3,124,293 129,919,270 TABLE B-12.—Mergers of national banks, or national and State banks, calendar 1964, with title and location, outstanding capital stock, surplus, undivided profits and reserves, and total assets—Continued Title and location of bank The Community Bank, Dayton, Ohio, with and the National Bank of Dayton, Dayton, Ohio (1788), which had merged July 18, 1964, under the charter and title of the latter bank (1788). The merged bank at the date of merger had Industrial City Bank & Trust Co.,13 Worcester, Mass., which had and the Mechanics National Bank of Worcester, Worcester Mass. (1135), with merged July 31, 1964, under the charter and title of the latter bank (1135). The merged bank at the date of merger had Fair Lawn-Radburn Trust Co.s Fair Lawn,15 N.J., which had and National Community Bank of Rutherford, Rutherford, N J . (5005), with merged July 31, 1964, under the charter and title of the latter bank (5005). The merged bank at the date of merger had The Peoples-Farmers National Bank, Mifflin,12 Pennsylvania, Mifflin, Pa. (9678), with and the Russell National Bank of Lewistown, Lewistown, Pa. (10506), which had merged July 31, 1964, under the charter of the latter bank (10506) and title "The Russell National Bank." The merged bank at the date of merger had The First National Bank of Waynesboro,14 Waynesboro, Va. (7587), which had and First & Merchants National Bank, Richmond, Va. (1111), with merged July 31, 1964, under the charter and title of the latter bank (1111). The merged bank at the date of merger had The Peoples National Bank of Rock Hill, Rock ™ Hill, S.C. (9407), which had. and the Citizens & Southern National Bank of South Carolina, Charleston, S.C. (14425), with merged Aug. 1, 1964, under the charter and title of the latter bank (14425). The merged bank at the date of merger had. The Ashland National Bank, Ashland, Pa. (5615), with and Pennsylvania National Bank & Trust Co., Pottsville, Pa. (1663), which had merged Aug. 7, 1964., under charter and title of the latter bank (1663). The merged bank at the date of merger had , The First National Bank of Mount Holly Springs, Mount Holly Springs, Pa. (8493), with. and Cumberland County National Bank & Trust Co., New Cumberland, Pa. (14542), which had merged Aug. 7, 1964, under charter and title of the latter bank (14542). The merged bank at the date of merger had The First National Bank of West Middlesex, West Middlesex, Pa. (6913), with and First National Bank of Mercer County, Greenville, Pa. (249), which had merged Aug. 8, 1964, under the charter and title of the latter bank (249). The merged bank at the date of merger had , State Bank of Napparsee, Nappanee, Ind., with and the First National Bank of Elkhart, Elkhart, Ind. (206), which had merged Aug. 15, 1964, under the charter of the latter bank (206) and title of "The First National Bank of Elkhart County." The merged bank at the date of merger had See footnotes at end of table. Outstanding capital stock Surplus Undivided profits and reserves Total assets $100, 000 $100,000 $71,124 $4,105, 543 2, 625, 000 3, 600, 000 1, 350, 378 101,172,802 2, 750, 000 3, 700, 000 1, 396, 502 104, 628, 363 237, 600 260,000 188,723 8,211,694 1,200,000 2, 300, 000 1,031,175 50, 491, 697 1,410,370 2, 589, 630 1,217,497 58, 703, 392 600,000 1,200,000 530, 818 26, 365,293 3, 637, 500 4,000, 000 2, 445, 728 139,946,077 4,987, 500 5, 200, 000 2, 226, 548 166,311,369 100,000 400, 000 100,227 5, 545, 885 500,000 1,000,000 308, 338 19,149, 806 24, 669, 926 680, 000 1,400,000 328, 565 200, 000 450,000 299,571 12,138, 496 12,162, 300 17, 837, 700 7, 847, 357 445,919,279 12,482,300 18,267,700 7, 920, 726 457, 698, 818 300,000 1,000, 000 463, 808 18,541,535 3, 246, 650 9, 685, 350 1,351,960 175,232,427 3, 621, 650 125, 000 10, 878, 350 350,000 1, 547, 769 125,272 193, 690, 936 5,125, 778 1,050,000 1,500,000 590,014 52, 012, 755 17 1,100,000 1, 500, 000 416,383 56,164, 629 120, 000 240, 000 36, 010 4, 946, 697 900,000 1, 600, 000 399, 938 39, 528, 778 1,140, 000 1, 860, COO 295, 949 44, 475, 475 50,000 150, 000 163, 794 3, 724, 634 800,000 1, 000, 000 693, 435 33, 646, 698 920, 000 220, 000 1,150,000 280,000 787, 230 149, 058 37, 371, 333 9,207, 063 1,827,000 2, 273,000 1,185, 684 75,449,430 2,201,000 2,553, 000 1,180,742 84, 656, 493 195 TABLE B-12.—Mergers of national banks, or national and Stale banks, calendar 1964, with title and location, outstanding capital stock, surplus, undivided profits and reserves, and total assets—Continued Title and location oj bank The Nashville Bank & Trust Go.,18 Nashville, Term., with.. and Third National Bank in Nashville, Nashville, Tenn. (13103), which had ^ merged Aug. 18, 1964, under the charter and title of the latter bank (13103). The merged bank at the date of merger had The Georgetown National Bank, Georgetown, Ky. (8579), with. and First National Bank & Trust Co., Georgetown, Ky. (2927), which had merged Aug. 29, 1964, under charter of the latter bank (2927), and under title "First Georgetown National Bank & Trust Co." The merged bank at the date of merger had Pocatello National Bank, Pocatello, Idaho19 (14859), with.. and the Idaho First National Bank, Boise, Idaho (1668), which had merged Sept. 4, 1964, under charter and title of the latter bank (1668). The merged bank at the date of merger had The Branford Trust Co., Branford, Conn., with and the 2First New Haven National Bank, New Haven, Conn., which had merged Sept. 30, 1964, under charter and title of the latter bank *. The merged bank at the date of merger had Peoples Bank of Stuarts Draft, Inc., Stuarts Draft, Va., with. and National Bank & Trust Co. at Charlottesville, Charlottesville, Va. (10618), which had merged Sept. 30, 1964, under charter of the latter bank (10618), and title "National Bank & Trust Co." The merged bank at the date of merger had The Citizens National Bank & Trust Co. of Oneonta,20 Oneonta, N.Y. (8920), with and National Commercial Bank & Trust Co., Albany, N.Y. (1301), which had merged Oct. 2,1964, under charter and title of the latter bank (1301). The merged bank at the date of merger had The Citizens National Bank of Corry, Corry, Pa. (4479), with and the Marine National Bank of Erie, Erie, Pa. (870), which had merged Oct. 2, 1964, under charter of the latter bank (870), and with the title "Marine National Bank." The merged bank at the date of merger had Spokane National Bank, Spokane, Wash.2i (14866), with and National Bank of Washington, Tacoma, Wash. (3417), which had merged Oct. 2, 1964, under charter and title of the latter bank (3417). The merged bank at the date of merger had Community National Bank, Liberty, N.Y.22 (10037), with., and Marine Midland National Bank of Southeastern New York, Poughkeepsie, N.Y. (465), which had merged Oct. 9, 1964, under charter and title of the latter bank (465). The merged bank at the date of merger had The Citizens National Bank of Poland, Poland, N.Y. (9804), with and the Oneida National Bank & Trust Co. of Central New York, Utica, N.Y. (1392), which had merged Oct. 16, 1964, under charter and title of the latter bank (1392). The merged bank at the date of merger had See footnotes at end of table. 196 Outstanding capital stock Undivided profits and reserves Total assets $1, 633, 300 $1, 700, 000 $1, 366, 897 $47, 981, 502 6, 000, 000 14,000,000 3, 258, 547 382,138,104 6, 735, 000 428,218,003 16,598,300 4, 625, 445 150, 000 200, 000 99, 536 5, 646, 609 300, 000 300, 000 201, 919 7, 812,134 500, 000 250, 000 500,000 75, 000 251,453 111,015 13,438,460 5,228, 838 6, 000, 000 9,000, 000 4, 673, 957 292, 692, 820 6, 097, 000 100,000 9,228,000 600, 000 4, 824, 524 144, 705 297, 862, 393 5,814,623 4, 722, 500 7, 700, 000 3, 373, 475 197,335,681 5,082, 500 59,160 7, 340, 000 185,000 3,518,178 35, 793 203,150,304 2, 442, 073 970, 365 2, 500, COO 1,296,249 56, 357, 858 1,029,525 2, 685,000 1,332,043 58, 772, 892 372, 600 530,000 127,128 13,273,644 7, 346, 205 19, 653, 795 4, 421, 092 455, 320,050 7, 765, 380 19,653,795 5, 031, 645 468, 482, 429 300, 000 500, 000 232,714 10, 963, 243 700, 000 1, 900, 000 267, 980 43, 002, 848 1,000,000 500, 000 2, 400, 000 150,000 500, 694 147,464 53, 966, 092 6,210,207 5, 600, 000 6,900 000 4, 529, 258 247,159,412 5, 858, 262 380, 000. 7,291,737 1, 253, 000 4, 676, 722 288, 391 253, 369, 620 26, 034, 886 1,600,000 3, 400, 000 1, 653, 543 104,687,940 2, 075, 000 4, 725, 000 1, 754, 343 130,740,826 50, 000 150,000 93, 823 2, 865, 897 2, 495, 700 8, 000, 000 3, 093, 973 167, 647, 231 2, 535, 700 8, 500, 000 2, 847, 797 170,513,128 TABLE B-12.—Mergers of national banks, or national and State banks, calendar 1964, with title and location, outstanding stock, surplus, undivided pro/its and reserves, and total assets—Continued Title and location of bank Tennessee Bank & Trust Co., Houston, Tex., with and Houston National Bank, Houston, Tex. (9353), which had merged Oct. 16, 1964, under charter and title of the latter bank (9353). The merged bank at the date of merger had Marshall County Bank, Moundsville, W. Va., with and First National Bank at Moundsville, Moundsville, W. Va. (14142), which had merged Oct> 17, 1964, under charter and title of the latter bank (14142). The merged bank at the date of merger had First Security Bank of Twin Falls, Twin Falls, Idaho, with.. and First Security Bank of Idaho, National Association, Boise, Idaho (14444), which had merged Oct. 23, 1964, under charter and title of the latter bank (14444) The merged bank at the date of merger had. The Bank of Appomattox, Appomattox, Va.23, with and the Fidelity National Bank, Lynchburg, Va. (1522), which had merged Oct. 24, 1964, under charter and title of the latter bank (1522). The merged bank at the date of merger had The Christiana National Bank, Christiana, Pa. (7078), with and Lancaster County Farmers National Bank, Lancaster, Pa. (683), which had. merged Oct. 27, 1964, under charter and title of the latter bank (683). The merged bank at the date of merger had The Cargill Trust Co., Putnam,2* Conn., with and Hartford National Bank & Trust Co., Hartford, Conn. (1338), which had , merged Nov. 10, 1964, under charter and title of the latter bank (1338). The merged bank at the date of merger had The Guilford Trust Co., Guilford, 2S Conn., with and the Second National Bank of New Haven, New Haven, Conn. (227), which had merged Nov. 16, 1964, under charter and title of the latter bank (227). The merged bank at the date of merger had Citizens State Bank, Aliquippa, Pa., with and Western Pennsylvania National Bank, McKeesport, Pa. (2222), which had merged Nov. 21, 1964, under the charter and title of the latter bank (2222). The merged bank at the date of merger had The National Bank of Lake Ronkonkoma, Lake Ronkonkoma, N.Y. (13130), with and the Peoples National Bank of Long Island, Patchogue, N.Y. (12788), which had merged Dec. 4, 1964, under the charter and title of the latter bank (12788). The merged bank at the date of merger had. , Hightstown Trust Co., East Windsor28 Township, N.J., with and First Trenton National Bank, Trenton, NJ. (1327), which had merged Dec. 11, 1964, under the charter and title of the latter bank (1327). The merged bank at the date of merger had First National Bank & Trust Co. of27 Hanover, Hanover, Pa. (187), with. and National Bank & Trust Co. of Central Pennsylvania, York, Pa. (694), which had merged Dec. 14, 1964, under charter and title of the latter bank (694). The merged bank at the date of merger had See footnotes at end of table. Undivided profits and reserves Outstanding capital stock Total assets $52,341,796 $2, 300, 000 $2, 300, 000 $928, 334 2, 862, 000 2, 862, 000 638, 326 5,162,000 100, 000 5,162,000 170,000 1,566,661 60, 958 140,745,393 2,512,703 150,000 150,000 159, 333 5,946,175 150, 000 250, 000 150,000 135,000 159,701 96, 973 8,556,138 3, 865, 088 4, 470, 586 264, 478, 563 4, 452, 559 122,757 268, 343, 651 3, 948, 099 6, 657, 000 6, 804, 500 75, 000 9, 843, 000 10,195,500 150,000 89, 292, 080 1,925,000 3, 075, 000 436, 443 78,109,431 2, 025, 000 3, 225, 000 534, 200 81, 778, 300 160,000 66, 663 60, 000 2, 470, 320 2, 536, 320 100, 000 2,636,838 5, 529, 680 1,658,726 95, 940, 893 5, 963, 680 400, 000 1,445,389 96, 959 98, 577, 731 8, 561, 750 13, 600, 000 31,400,000 11,513,080 587, 874, 261 13,740,000 180,000 31,400,000 320,000 11,970,040 107, 851 596,436,011 6,911,120 2, 959, 662 4, 598, 375 1, 399, 508 117,886,797 3,372,162 300, 000 4, 685, 875 300, 000 1,384,445 126, 927 124,816,331 4,168, 838 8,892,910 16,607,090 3,711,920 548, 630, 678 9,132,910 16,967,090 3, 838, 847 552, 799, 516 275, 000 475, 000 279, 395 15,536,617 474, 675 1, 500, 000 621, 371 35, 452, 546 680, 925 1,975,000 969, 517 50, 989,163 250, 000 600,000 282,980 23, 547, 545 4, 725, 000 7, 275, 000 4, 268, 765 225, 260, 467 5,047,500 7, 952, 500 4,401,746 248, 808, 012 1,000,000 2, 000, 000 775, 465 5, 667, 020 6, 832, 980 3, 762, 046 165, 853, 937 7, 067, 020 8, 832, 980 4,137,511 196,020,093 30,166,156 197 T A B L E B—12.—Mergers of national banks> or national and State banks, calendar 7964, with title and location, outstanding capital stock, surplus, undivided profits and reserves, and total assets—Continued Title and location of bank The Citizens National Bank of Govington, Govington, Va. (5326), with and the First National Exchange Bank of Virginia, Roanoke, Va. (2737), which had merged Dec. 15, 1964, under the charter and title of the latter bank (2737). The merged bank at the date of merger had The Farmers National Bank of Bloomsburg, Bloomsburg, Pa. (4543), with and Miners National Bank of Wilkes-Barre, WilkesBarre, Pa. (13852), which had merged Dec. 16, 1964> under charter and title of the latter bank (13852). The merged bank at the date of merger had The Garden State National Bank of Teaneck, Teaneck, N J . (12402), with and National Community Bank of Rutherford, Rutherford, NJ- (5005), which had merged Dec. 18, 1964, under the charter and title of the latter bank (5005). The merged bank at the date of merger had The First National Bank in Gadsden, Gadsden, Ala. (13728), with and State National Bank of Alabama, Decatur, Ala. (14414), which had merged Dec. 19, 1964, under charter and title of the latter bank (14414). The merged bank at the date of merger had The Sciota Bank, Commercial Point, Ohio, with and the First National Bank of Circleville, Circleville, Ohio (118), which had merged Dec. 29, 1964, under the charter and title of the latter bank (118). The merged bank at the date of merger had The Commercial National Bank of Spartanburg,28 Spartanburg, S.C. (14211), with and the First National Bank of South Carolina of Columbia, Columbia, S.C. (13720), which had merged Dec. 31,1964, under charter of the First National Bank of South Carolina of Columbia (13720), and under title "The First Commercial National Bank of South Carolina." The merged bank at the date of merger had The Windsor County National Bank of Windsor,29 Windsor, Vt. (13685), with and Vermont National & Savings Bank, Brattleboro, Brattleboro, Vt. (1430), which had merged Dec. 31, 1964, under charter of the latter bank (1430), and title "Vermont National Bank." The merged bank at the date of merger had. 1 2 ' With 1 outside branch. 3.4,5 with 1 outside office. «With 2 outside offices. 7 Includes the sale of 12,500 additional shares of common stock, par $10. 8 With 2 outside offices. 9 With 1 outside office. M With 1 local office. 11 With 7 local offices. 12 With 1 local office. 13 With 1 local and 1 outside office. M With 1 local office. is With 3 local branches. 198 Outstanding capital stock Surplus Undivided profits and reserves Total assets $125,000 $1,000,000 $106,145 $15,231,684 6, 279, 510 11,125,010 2,240, 043 245,641,387 6, 779, 510 260, 492, 687 12,125,010 1,971,188 100, 000 600,GOO 263, 868 8, 629, 066 2, 775, 000 5,000,000 2, 548,086 107, 470, 802 3,025, 000 6,000, 000 2,134, 515 116,099,867 500, 000 1,100, 000 547, 737 37, 758, 612 4, 987, 500 5,200, 000 1, 953, 636 172,029,741 6,237, 500 6, 800, 000 1,160,204 209, 631, 312 18,672,359 500,000 500, 000 2, 000,000 4, 000, 000 2,192, 856 117,934,892 2, 500, 000 25,000 4, 500,000 25, 000 2, 961,192 16,141 136, 357, 300 593, 387 400,000 191,521 9, 526, 219 400, 000 209,150 768,232 239,162 10,119,606 825, 000 1, 300, 000 563,146 35,125, 953 2, 553, 505 5, 446, 495 1, 399, 673 131, 858, 382 3,234,130 6, 765, 870 1, 605, 730 165, 050,102 227, 650 100,000 434, 055 5, 659, 651 301, 554, 000 1, 096, 000 386, 042 44,284, 550 301,784, 000 1,196,000 678, 801 49, 964, 477 100, 000 is With 2 local branches. 17 Includes the sale of 5,000 additional shares of common stock, par $10. 18,19,20.21 With 1 local branch. 22 With 2 local branches. 23 With 1 local branch. 24 With 1 outside branch. 25 With 1 local branch. 28 With 2 outside branches,, 27 With 1 outside branch. 23 With 8 outside branches. 29 With 1 outside branch. 3 ° Includes $704,000 preferred capital stock. TABLE B-13.—Number of domestic branches of national banks opened for business, calendar 1964, by States, banks, and type of branch Branches opened for business Title and location of bank Charter No. Local 252 11753 3041 3185 6380 14414 5249 4067 15402 Other than local Total 530 782 The Commercial National Bank of Anniston .. The First National Bank of Anniston The First National Bank of Birmingham First National Bank of Decatur State National Bank of Alabama, Decatur The First National Bank of Dothan The First National Bank of Huntsville Baldwin National Bank of Robertsdale 3728 I First National Bank of Arizona, Phoenix 14324 ! The Valley National Bank of Arizona, Phoenix. 7346 14606 14000 13949 13958 15313 10004 12156 7138 The First National Bank of Fayettevilie First National Bank of Jonesboro The Commercial National Bank of Little Rock. The First National Bank in Little Rock Union National Bank of Little Rock First National Bank in Osceola National Bank of Commerce of Paragould The Peoples National Bank of Stuttgart The State National Bank of Texarkana. CAT IFORNIA 14670 13348 14695 15089 15239 14823 14632 2491 14997 15323 6919 6268 8181 14998 15276 15174 10391 13044 9655 1741 *14939 2158 15047 14891 15217 15149 13178 15092 *14980 Community National Bank of Kern County, Bakersfield Beverly Hills National Bank, Beverly Hills City National Bank, Beverly Hills First National Bank of Daly City Gateway National Bank, El Segundo Valley National Bank, Glendale First National Bank of Long Beach Security First National Bank, Los Angeles Wilshire National Bank, Los Angeles Civic National Bank, Marina Del Rey Central Valley National Bank, Oakland First National Bank and Trust Company, Ontario The First National Bank of Orange County, Orange Security National Bank of Monterey County, Pacific Grove Palm Springs National Bank, Palm Springs Sierra National Bank, Petaluma United States National Bank, San Diego Bank of America National Trust and Savings Association, San Francisco. The Bank of California, National Association, San Francisco Crocker-Citizens National Bank, San Francisco Golden Gate National Bank, San Francisco The First National Bank of San Jose Redwood National Bank, Sari Rafael Santa Barbara National Bank, Santa Barbara, . Tahoe National Bank, Stateline.... Tiburon National Bank, Tiburon , The First National Bank of Vista , Security National Bank of Contra Costa, Walnut Creek San Francisco National Bank, San Francisco 13 1 1 3 1 1 2 1 1 3 23 4 25 1 1 1 1 1 1 1 15 1 1 3 1 1 2 1 1 4 23 1 1 CONNECTICUT ••A f : [ Report cut, Bridgeport ••>al Bank in the District of Columbia. 199 TABLE B-13.—Number of domestic branches of national banks opened for business, calendar 1964, by States, banks, and type of branch—Continued Branches opened for business Title and location of bank Local CONNECTICUT—continued Hartford National Bank & Trust Co., Hartford The First New Haven National Bank, New Haven. The Second National Bank of New Haven The Tradesmens National Bank of New Haven Lincoln National Bank of Stamford The Waterbury National Bank, Waterbury DISTRICT OF C0LLUMB1A ' District of Columbia National Bank, Washington. The First National Bank of Washington Public National Bank, Washington The Riggs National Bank of Washington, D.G. . . GEORGIA The National Bank of Athens The First National Bank of Atlanta The National Bank of Fitzgerald The Citizens and Southern National Bank, Savannah. Hawaii National Bank, Honolulu. First Security Bank of Idaho, National Association, Boise. The Idaho First National Bank, Boise The First National Bank of Danville The First National Bank of Elkhart County, Elkhart The Citizens National Bank of Evansville Fort Wayne National Bank, Fort Wayne Bank of Indiana, National Association, Gary Gary National Bank, Gary The Calumet National Bank of Hammond Mercantile National Bank of Hammond American Fletcher National Bank & Trust Co., Indianapolis. Merchants National Bank & Trust Co. of Indianapolis First National Bank, Kokomo Lafayette National Bank, Lafayette American National Bank & Trust Co. of Muncie The Second National Bank of Richmond The Farmers National Bank of Shelbyville Terre Haute First National Bank, Terre Haute The American National Bank of Vincennes The First National Bank in Wabash First National Bank of Warsaw The Washington National Bank, Washington The Centerville National Bank, Centerville First National Bank of Davenport East Des Moines National Bank, Des Moines The Montgomery County National Bank of Red Oak. KENTUCKY The First National Bank & Trust Co. of Covington First Georgetown National Bank & Trust Co., Georgetown. * 1 branch also authorized for a Nonnational Bank in the District of Columbia. 200 Other than local Total TABLE B-13.—Number of domestic branches of national banks opened for business, calendar 1964, by States, banks, and type of branch—Continued Branches openedfor business Title and location of bank Local Other than local KENTUCKY—continued The Harlan National Bank, Harlan Citizens Union National Bank & Trust Co., Lexington. The Second National Bank & Trust Co. of Lexington.. Liberty National Bank & Trust Co. of Louisville The Newport National Bank, Newport.. Louisiana National Bank of Baton Rouge First National Bank of Jefferson Parish, Gretn a The National Bank of Commerce in Jefferson Parish. The First National Bank of Lafayette The Lakeside National Bank of Lake Charles National American Bank of New Orleans LaFourche National Bank of Thibodaux First National Bank of West Monroe MAINE First-Manufacturers National Bank of Lewiston and Auburn, Lewiston. MARYLAND The Farmers National Bank of Annapolis The First National Bank of Maryland, Baltimore Maryland National Bank, Baltimore National City Bank of Baltimore State National Bank of Bethesda. The Central National Bank of Maryland, Hillandale The Citizens National Bank of Laurel Citizens National Bank of Southern Maryland, Lexington Park The First National Bank of North East. The First National Bank of Oakland The Garrett National Bank in Oakland American National Bank of Maryland, Silver Spring Peoples National Bank of Maryland, Suitland Metropolitan National Bank, Wheaton MASSACHUSETTS The Arlington National Bank, Arlington Suburban National Bank of Arlington The First National Bank of Boston The National Shawmut Bank of Boston New England Merchants National Bank of Boston. Plymouth-Home National Bank, Brockton The Lincoln National Bank of Chelsea The Everett National Bank, Everett. Middlesex County National Bank, Everett. Merrimack Valley National Bank, Haverhill The Hudson National Bank, Hudson Union National Bank, Lowell Security-Danvers National Bank, Lynn First National Bank of Natick First National Bank of Cape Cod, Orleans First Agricultural National Bank of Berkshire County, Pittsfield. South Shore National Bank, Quincy Hampshire National Bank of South Hadley Third National Bank of Hampden County, Springfield The First-Machinists National Bank of Taunton The Wellesley National Bank, Wellesley Blackstone Valley National Bank of Whitinsville The Mechanics National Bank of Worcester Worcester County National Bank, Worcester The First Nationzil Bank of Yarmouth, Yarmouth Port 201 TABLE B-13.—Number of domestic branches of national banks opened for business, calendar 1964, by States, banks, and type of branch—Continued Branches opened for business Title and location of bank Local Peoples National Bank & Trust Co. of Bay City Farmers & Merchants National Bank in Benton Harbor.... First National Bank of Big Rapids City National Bank of Detroit Manufacturers National Bank of Detroit Michigan Bank, National Association, Detroit National Bank of Detroit City Bank & Trust Co., National Association, Jackson The American National Bank & Trust Co. of Kalamazoo. . The First National Bank & Trust Co. of Kalamazoo First National Bank of Lake City Michigan National Bank, Lansing Livonia National Bank, Livonia. Central National Bank of St. Johns National Bank of Southfield First National Bank, Sturgis The First National Bank of Three Rivers. . First National Bank of Wyoming The National Bank of Ypsilanti First National Bank of Clarksdale National Bank of Commerce of Corinth. GulfNationalBankofGulfport First National Bank of Vicksburg The Delta National Bank of Yazoo City. The Boone County National Bank of Columbia. The Third National Bank of Sedalia NEVADA First National Bank of Nevada, Reno, Nev... NEW HAMPSHIRE The Mechanicks National Bank of Concord Strafford National Bank, Dover The Rockingham National Bank of Exeter Farmington National Bank, Farmington The Cheshire National Bank of Keene The Laconia National Bank, Laconia The Peoples National Bank of Laconia The Amoskeag National Bank of Manchester The Manchester National Bank, Manchester The Indian Head National Bank of Nashua The Second National Bank of Nashua The First National Bank of Portsmouth First Somersworth-Rollinsford National Bank, Somersworth The Citizens' National Bank of Tilton NEW JERSEY First Merchants National Bank, Asbury Park The First National Bank of Somerset County, N.J., Bound Brook First Camden National Bank & Trust Company, Camden Cherry Hill National Bank, Cherry Hill Township First Clinton National Bank, Clinton The First National Bank of Cranbury Citizens National Bank of Englewood _ The Flemington National Bank & Trust Co., Flemington The Hunterdon County National Bank of Flemington 202 Other than local TABLE B-13.—Number of domestic branches of national banks opened for business, calendar 1964, by States, banks, and type of branch—Continued Branches opened for business Title and location of bank Charter No. NEW JERSEY—continued 15255 First Bank & Trust Co., National Association, Fords 14457 Haddonfield National Bank, Haddonfield 8227 The Hardyston National Bank of Hamburg 8627 The First National Bank & Trust Go. of Kearny 12022 I Peoples National Bank of Camden County, Laurel Springs,. . 15360 ! Madison National Bank, Madison 15023 The Short Hills National Bank, Millburn Township 1113 I The First National Iron Bank of Morristown 15297 New Jersey National Bank & Trust Co., Neptune 1316 National Newark & Essex Bank, Newark 925 The Sussex & Merchants National Bank of Newton 5981 The First National Bank & Trust Co., of Paulsboro 1239 The Phillipsburg National Bank & Trust Co., Phillipsburg.. . 2257 The Monmouth County National Bank, Red Bank 5005 National Community Bank of Rutherford 3922 The City National Bank & Trust Co. of Salem , .. .. 15375 Peoples National Bank of Sparta 6692 Citizens National Bank of Morris County, Succasunna 2509 The First National Bank of Toms River, N.J 1327 First Trenton National Bank, Trenton 7265 The First National Bank of Williamstown NEW MEXICO I 6597 8397 15312 14628 5220 The First National Bank of Belen First National Bank of Curry County, Clovis... First National Bank of Rio Arriba, E s p a n o l a . . . First National Bank of Hobbs The First National Bank of Roswell NEW YORK National Commercial Bank & Trust Co., Albany First-City National Bank of Binghamton, N.Y Liberty National Bank & Trust Co., Buffalo. The First National Bank of Cairo United National Bank, Callicoon The St. Lawrence County National Bank, Canton Northern Westchester National Bank, Chappaqua Tinker National Bank, East Setauket The Endicott National Bank, Endicott T h e Hampton Bays National Bank, Hampton Bays Security National Bank of Long Island, Huntington The Kerhonkson National Bank, Kerhonkson The State of New York National Bank, Kingston The Sullivan County National Bank of Liberty County National Bank, Middletown 'bounty National Bank of Long Island, Mineola Franklin National Barik. Mineola v irst Westchester National Bank, New Rochelle r irst National City 15 ink, New York The Meadow Brook National Bank. Mew York ^oy;<! .'"atioriai itonk of Ne»v York The Xorlh Creek National IVmk, North Creek 9716 '•'Vipp-m Zee Nation u 3an ; i, Wack 1-V734 r h e Propk-j N iijoafn M mil rf Long Island, ?a*chogue 12788 081 The Stis^my >">Lon;:I Bnnk of Pine Plains \iarine Midland Na'-ion-il .'a:ik of .Snuthcns't' Xew York, P'K^hkcepsie.. 465 I he Mohawk [National bank of Sclu'iioctady 1.126 5.V)0 "'"he Fir>t "Cational Bank of Spring V iliev : .ocUand National B mk, Suilern~ 5S46 • incoln N:^ion.tl Bank .-c "Ir.-^t Co >f Central Xcvv York, Syracuse 1 -42 '. .:e Af-Trchatiu, Xac<"cn;i! Bank ik 'i^^i Co. of Syrac.uM* ' \c Uiilo-j Nation,.•! -xi'ix of ' i'roy is- C^:it*icl \ V"'J!^ '!i:i! '.?.;i"k & Trust '. :; of Centra! I'^ew York, Ulici 1301 202 15080 12586 13590 8531 12746 11511 13004 12987 6587 10855 955 4925 13956 14951 12997 13955 1461 7703 15029 • • : , ^ 2 ; i ! iI 2 1 1 203 TABLE B-13.—Number of domestic branches of national banks opened for business, calendar 1964, by States, banks, and type of branch—Continued Branches openedfor business Title and location of bank Local NEW YORK—continued Valley National Bank of Long Island, Valley Stream. The Valley National Bank, Wallkill, N.Y National Bank of Westchester, White Plains NORTH CAROLINA First Union National Bank of North Carolina, Charlotte North Carolina National Bank, Charlotte First National Bank of Catawba County, Hickory First National Bank of Eastern North Carolina, Jacksonville.. The First National Bank of Leaksville Southern National Bank of North Carolina, Lumberton The First National Bank of Morganton The First National Bank of Anson County, Wadesboro NORTH DAKOTA The Dakota National Bank of Bismarck. First National Bank in Grand Forks The First National Bank of Ashland The Farmers National Bank & Trust Co. of Ashtabula Farmers & Merchants National Bank in Bellaire The First National Bank of Chillicothe The First National Bank of Circleville The Capital National Bank, Cleveland Central National Bank of Cleveland The National City Bank of Cleveland Society National Bank of Cleveland The City National Bank & Trust Co. of Columbus The Huntington National Bank of Columbus The National Bank of Dayton The Third National Bank & Trust Co. of Dayton, Ohio The Winters National Bank & Trust Co. of Dayton The Portage County National Bank of Kent First National Bank & Trust Co. of Lima The Central Security National Bank of Lorain County, Lorain. The Lorain National Bank, Lorain The Park National Bank of Newark The First National Bank & Trust Co. of Ravenna The Second National Bank of Ravenna The First Central National Bank of St. Paris The Peoples' National Bank of Wapakoneta Fort Sill National Bank, Fort Sill Founders National Bank of Oklahoma City. Emerald National Bank, Bethel-Danebo First National Bank of Oregon, Portland United States National Bank of Oregon, Portland. First National Bank of Roseburg PENNSYLVANIA The The The The First National Bank of Allentown.. National Deposit Bank of Arnold.. First National Bank in Bedford National Bank of Boyertown 204 Other than local TABLE B-13.—Number of domestic branches of national banks opened for business, calendar 1964, by States, banks, and type of branch—Continued Branches opened for business Charter I No. ! Title and location of bank Local Other than local PENNSYLVANIA—continued 10232 The Central Pennsylvania National Bank of Claysburg. 575 The National Bank of Chester Valley, Coatesville 5019 DuBois Deposit National Bank, DuBois 5084 The First National Bank of Ebensburg 870 Marine National Bank, Erie. 14051 | First National Bank of Export 5920 I The First National Bank of Fredericktown 5454 The Freedom National Bank, Freedom 14055 First National Bank in Greensburg 249 First National Bank of Mercer County, Greenville 580 The Harrisburg National Bank & Trust Co., Harrisburg 31 First-Grange National Bank of Huntingdon 683 Lancaster County Farmers National Bank, Lancaster 5502 The First National Bank of Leechburg 10506 The Russell National Bank, Lewistown 4625 The National Bank of McKeesport 2222 Western Pennsylvania National Bank, McKeesport 5496 The First National Bank of Milford. 2223 County National Bank of Montrose 5077 Nazareth National Bank & Trust Co., Nazareth 14542 Cumberland County National Bank & Trust Co., New Cumberland. 723 Central-Penn National Bank of Philadelphia 539 The Philadelphia National Bank, Philadelphia 15422 Provident National Bank, Philadelphia 6301 Mellon National Bank & Trust Co., Pittsburgh 252 Pittsburgh National Bank, Pittsburgh , 705 The Union National Bank of Pittsburgh 1663 Pennsylvania National Bank & Trust Co., Pottsville 77 Northeastern Pennsylvania National Bank & Trust Co., Scranton. . . 8764 The McDowell National Bank of Sharon 12261 The Peoples National Bank of State College. 11866 First National Bank & Trust Co., Waynesboro 328 Northern National Bank & Trust Co., Wellsboro 13852 Miners National Bank of Wilkes-Barre 694 National Bank & Trust Co. of Central Pennsylvania, York | 1302 RHODE ISLAND Industrial National Bank of Rhode Island, Providence SOUTH CAROLINA 14425 2044 13720 15229 14950 14341 The Citizens & Southern National Bank of South Carolina, Charleston. The South Carolina National Bank of Charleston The First Commercial National Bank of South Carolina, C o l u m b i a . . . . First State National Bank, Jackson The First National Bank of Laurens The Davis National Bank of Mullins 15025 I First National Bank of St. George. 9533 ! The First National Bank of Sharon. TENNESSEE 3341 14760 14710 8443 13635 14279 336 13681 13349 8025 9319 The First National Bank of Athens First National Bank of Clinton First Farmers & Merchants National Bank of Columbia. The Harpeth National Bank of Franklin. The Hamilton National Bank of Johnson City The Blount National Bank of Maryville The First National Bank of Memphis National Bank of Commerce in Memphis Union Planters National Bank of Memphis. The Hamilton National Bank of Morristown The First National Bank of Mount Pleasant 205 TABLE B-13.—Number of domestic branches of national banks opened for business, calendar 1964, by States, banks, and type of branch—Continued Branches opened for business Title and location of bank Local TENNESSEE—continued Third National Bank in Nashville The First National Bank of Rutherford The Traders National Bank of Tullahoma. The First National Bank of Layton First Security Bank of Utah, National Association, Ogden. Zions First National Bank The Bradford National Bank, Bradford Vermont National Bank, Brattleboro The Randolph National Bank, Randolph The First National Bank of White River Junction. The Colonial National Bank of Alexandria Mount Vernon National Bank & Trust Go. of Fairfax County, Annandale. Security National Bank, Baileys Crossroads National Bank & Trust Co., Charlottesville The Mountain National Bank of Clifton Forge The Covington National Bank, Covington The Second National Bank of Culpeper The National Bank of Fairfax National Bank of Commerce of Fairfax County, Falls Church The First National Bank of Galax The Farmers and Merchants National Bank of Hamilton The Rockingham National Bank of Harrisonburg Citizens National Bank of Herndon The Fidelity National Bank, Lynchburg The National Bank of Manassas Seaboard Citizens National Bank, Norfolk Virginia National Bank, Norfolk The Wise County National Bank, Norton The First and Merchants National Bank of Radford The Richlands National Bank, Richlands First and Merchants National Bank, Richmond Richmond National Bank & Trust Co., Richmond The Colonial-American National Bank of Roanoke The First National Exchange Bank of Virginia, Roanoke First National Bank of Vienna WASHINGTON Tri-Cities National Bank, Pasco First National Bank in Port Angeles The National Bank of Commerce of Seattle The Pacific National Bank of Seattle Peoples National Bank of Washington in Seattle. Seattle-First National Bank, Seattle Old National Bank of Washington, Spokane.... National Bank of Washington, Tacoma The Puget Sound National Bank of Tacoma Guaranty National Bank of White Center Racine County National Bank, Franksville. The First National Bank in Menomonie 206 Other than local TABLE B-14.—Number of domestic branches of national banks closed, calendar 1964, by states, banks, and type of branch Branches closed Charter No. Title and location of bank Other than local Local Total: 33 banks 24 Total 26 50 1 1 2 1 1 2 2 1 2 CALIFORNIA 6919 10391 13044 Central Valley National Bank, Oakland United States National Bank, San Diego Bank of America National Trust and Savings Association, San Francisco 1559 13068 The First National Bank of Atlanta GEORGIA . 1 KENTUCKY 3832 The First and Farmers National Bank of Somerset 1 1 1 1 LOUISIANA 13689 The National Bank of Commerce in New Orleans MARYLAND 1413 13776 14846 The First National Bank of Maryland Baltimore The Garrett National Bank in Oakland National Bank of Maryland, Silver Spring 2 1 1 2 1 1 1 1 MASSACHUSETTS 779 Plymouth-Home National Bank Brockton MICHIGAN 13820 The American National Bank and Trust Company of Kalamazoo 1 1 1 1 1 1 1 MISSOURI 9042 6272 The American National Bank of St. Joseph . . The Tootle-Enright National Bank, Saint Joseph NEBRASKA 14340 C o m m e r c i a l N a t i o n a l B a n k & T r u s t C o m p a n y , NEW 12195 G r a n d I s l a n d . . . . , JERSEY The First National Bank of Park Ridge NEW 7503 13438 The First National Bank of Hagerman Hot Springs N/B, Truth or Consequences 15080 12586 5271 13080 1461 Liberty National Bank and Trust Company Buffalo T h e First National Bank of Cairo The First National Bank of Mount Vernon T h e Bensonhurst National Bank of Brooklyn in New York First National City Bank, New Y o r k . . . ... 13761 North Carolina National Bank, Charlotte NEW 2 2 1 1 1 2 2 1 2 3 1 1 3 4 MEXICO 1 YORK 1 1 NORTH CAROLINA 1 207 TABLE B-14.—Number of domestic branches of national banks closed, calendar 1964, by states, banks, and type of branch—Continued Branches closed Charter No. Title and location of bank Other than local Local Total OHIO 1 7744 1 PENNSYLVANIA 1233 213 77 Easton National Bank & Trust Co Easton Second National Bank of Philadelphia . . . Northeastern Pennsylvania National Bank & Trust Co., Scran ton 1302 Industrial National Bank of Rhode Island, Providence 1 4 1 1 4 1 1 1 1 1 RHODE ISLAND SOUTH CAROLINA 14425 The Citizens & Southern National Bank of South Carolina, Charleston TENNESSEE 13681 3614 1 1 1 1 The First National Bank of Sparta VERMONT 3484 The First National Bank of White River Junction 1 1 1 4 VIRGINIA 13775 208 3 TABLE B-15.—Principal assets and liabilities of national banks, by deposit size, December 1963 and 1964 [Dollar amounts in millions] Deposits Loans and securities Number of banks Total Cash, balances with other banks, Real esLoans and U.S. Govincluding Other tate discounts* ernment assets and Fed- obligations, bonds and reserves direct and with Fedsecurities eral funds guaranteed eral Resold serve banks Total assets Capital stock f Surplus, undivided profits, and reserves Total Demand Time and Savings $9, 519 $150,823 $89, 389 $61,434 1963 4, 615 $135, 990 Total Banks with deposits of— Less than $1.0 $1.0 to $1.9 $?.O to $4.9 $5.0 to $9.9 $10.0 to $24.9 $25.0 to $49.9 $50.0 to $99.9 $100.0 to $499.9 Over $500.0 $83, 388 $33, 384 $19,218 $28, 635 $2, 595 $170, 233 $4, 029 132 388 1,316 1,145 935 329 167 164 39 88 565 4,205 7, 585 13, 379 10, 579 10,854 31,966 56, 769 47 305 2,209 3,984 7,233 5,831 6,176 20, 328 37, 275 36 214 1,489 2,516 4, 144 3,226 3, 171 7,550 11,037 5 45 507 1,084 2,003 1,521 1,507 4,088 8,457 32 122 801 1,331 2,260 1,773 1,917 7,673 12, 726 3 12 80 140 274 224 208 678 976 123 702 5,100 9,082 16,037 12,739 13,257 41,052 72, 143 15 37 139 205 363 303 315 965 1,688 17 66 394 610 946 693 704 2, 212 3,877 91 593 4, 526 8, 166 14,450 11,456 11,895 36, 552 63, 095 68 385 2,704 4, 604 7, 977 6,470 7,019 23, 720 36, 441 23 207 1,822 3,562 6,472 4,985 4, 876 12, 832 26,654 4, 773 149, 944 95, 577 33, 537 20, 830 34, 066 2,789 190,113 4,790 10, 258 169,617 98, 660 70, 957 114 394 1, 303 1, 181 1,029 339 185 176 52 79 572 4, 107 7,707 14,662 10,715 11,502 32, 328 68, 271 44 323 2,276 4,229 8,341 6,209 6, 696 20, 969 46, 491 32 209 1, 370 2,393 4, 128 2, 891 3, 136 7,147 12,231 3 40 462 1,085 2, 194 1,615 1,670 4,211 9, 549 26 133 830 1,433 2,671 1,929 2, 311 8,223 16, 509 5 15 82 150 301 220 227 655 1,133 112 725 5,048 9,342 17, 801 13, 039 14,210 41,793 88, 042 15 44 163 216 409 304 342 1,058 2,239 18 70 372 585 1,008 669 728 2,107 4,701 78 604 4,466 8,437 16, 100 11,778 12, 831 37,600 77, 723 57 391 2,619 4,659 8,768 6,524 7,307 23,712 44, 622 20 213 1,847 3,778 7,332 5,254 5,524 13, 888 33,101 1964 Total Banks with deposits of— Less than $1.0. $1.0 to $1.9 $2.0 to $4.9 $5.0 to $9.9 $10.0 to $24.9 $25.0 to $49.9 $50.0 to $99.9 $100.0 to $499.9 Over $500.0 ^Includes rediscounts and overdrafts, flncludes capital notes and debentures. NOTE : Data may not add to totals because of rounding. TABLE B-16,—Dates of reports of condition of national banks, 1914-1964 [For dates of previous calls, see AR report for 1920, vol. 2, table No. 42, p. 150] Feb. Apr. May 4 13 210 Man 1 1 1 10 12 4 4 7 5 4 4 28 21 ""io" 28 3 31 23 5 June July Aug. Sept. 30 12 23 30 20 29 30 30 30 30 30 30 30 30 29 30 30 30 30 27 27 25 5 10 28 i3o 4 4 25 17 30 30 30 29 28 30 24 13 12 11 24 9 31 20 15 11 10 14 4 12 15 12 26 18 15 31 30 31 2 30 30 31 31 31 18 30 31 30 30 29 30 30 30 30 30 30 30 30 30 30 6 23 10 15 30 30 29 30 31 31 31 31 20 31 1 7 29 26 4 4 31 31 31 31 30 30 29 30 31 27 31 31 31 29 31 29 31 ^1 31 4 24 29 30 Dec. 31 10 17 20 1 17 15 12 8 6 15 14 30 28 Nov. 31 31 30 6 12 Oct. CO CO C" 1914 1915 1916 1917 1918 1919 . . . . 1920 1921 1922 . . . 1923 1924 1925 1926 ... ... 1927 1928 1929 1930 . . . 1931 1932 1933. 1934 1935 1936 1937 1938 1939 . . . . 1940 1941 1942 1943 1944 1945 1946 1947 1948 1949 1950 ... 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 . . . Jan. £ to to Tear 30 6 1 5* 30 4 10 31 31 31 31 30 31 31 31 7 5 31 11 31 31 6 3 31 31 30 28 20 31 26 24 27 28 30 1 31 31 Act of Feb. 25, 1863, provided for reports of condition on the 1st of each quarter before commencement of business. Act of June 3, 1864—1st Monday of January, April, July, and October, before commencement of business, on form prescribed by Comptroller (in addition to reports on 1st Tuesday of each month showing condition at commencement of business in respect to certain items; i.e., loans, specie, deposits, and circulation). Act of Mar. 3, 1869, not less than 5 reports per year, on form prescribed by Comptroller, at close of business on any past date by him specified. Act of Dec. 28, 1922, minimum number of calls reduced from 5 to 3 per year. Act of Feb. 25, 1927, authorized a vice president or an assistant cashier designated by the board of directors to verify reports of condition in absence of president and cashier. Act of June 16, 1933, requires each national bank to furnish and publish not less than 3 reports each year of affiliates other than member banks, as of dates identical with those for which the Comptroller shall during such year require reports of condition of the bank. The report of each affiliate shall contain such information as in the judgment of the Comptroller shall be necessary to disclose fully the relations between the affiliate and the bank and to enable the Comptroller to inform himself as to the effect of such relations upon the affairs of the bank. Sec. 21 (a) of the Banking Act of 1933 provided, in part, that after June 16, 1934, it would be unlawful for any private bank not under state supervision to continue the transaction of business unless it stibmitted to periodic examination by the Comptroller of the Currency or the Federal Reserve bank of the district, and made and published periodic reports of conditions the same as required of national banks under sec. 5211, U.S.R.S. Sec. 21(a) of the Banking Act of 1933, however, was amended by sec. 303 of the Banking Act of 1935, approved Aug. 23, 1935, under the provisions of which private banks are no longer required to submit to examination by the Comptroller or Federal Reserve bank, nor are they required to make to the Comptroller and publish periodic reports of condition. (5 calls for reports of condition of private banks were made by the Comptroller, the first one for June 30, 1934, and the last one for June 29, 1935.) Sec. 7(a)(3) of the Federal Deposit Insurance Act (Title 12, U.S.C., sec. 1817(a)) of July 14, 1960, provides, in part, that, effective Jan. 1, 1961, each insured national bank shall make to the Comptroller of the Currency 4 reports of condition annually upon dates to be selected by the Comptroller, the Chairman of the Board of Governors of the Federal Reserve System, and the Chairman of the Board of Directors of the Federal Deposit Insurance Corporation, or a majority thereof. 2 dates shall be selected within the semiannual period of January to June, inclusive, and 2 within the semiannual period of July to December, inclusive. Sec. 161 of Title 12 also provides that the Comptroller of the Currency may call for additional reports of condition, in such form and containing such information as he may prescribe, on dates to be fixed by him, and may call for special reports from any particular association whenever in his judgment the same are necessary for use in the performance of his supervisory duties. 211 TABLE B-17.—Number, total, and principal assets, liabilities, and capital accounts of national banks, by States, June 30, 1964 [Dollar amounts in millions] ASSETS Number of banks State Total assets United States f 4,702 Alabama . . . Alaska Arizona Arkansas California . . Colorado Connecticut Delaware District of Columbia . Florida Georgia Hawaii Idaho Illinois Iowa Kansas Kentucky Louisiana Maine Maryland . . . . Michigan Minnesota Mississippi Missouri Nebraska New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming . Virgin Islands . District of Columbia—all*... Cash assets § U.S. Govern- State and local mentobliga- securities, net A tions, net A $175,107 $29, 513 $31,551 $17, 591 78 5 3 62 71 110 24 5 7 177 54 2 10 407 123 101 169 83 47 22 48 22 90 192 30 88 47 122 3 50 144 33 207 31 40 218 216 11 401 4 26 33 74 534 11 28 124 27 76 106 35 1 2,117 235 1,464 960 24, 931 2,054 1 598 22 1,243 4,495 2,300 367 602 16,514 3,914 1,355 1 724 1,321 2,452 424 1,758 4,901 7,013 3,849 551 2,824 562 1,462 446 407 5,825 667 18,162 1,569 489 8,017 2,957 2,276 12, 329 672 855 548 3 318 12,709 619 256 2,800 3,213 912 2,643 384 26 394 39 182 187 3,773 386 259 3 243 890 509 47 79 2,601 734 302 304 246 484 60 312 932 1,096 711 101 622 81 282 54 66 775 119 2,975 296 57 1,288 616 303 1,756 62 163 67 636 2,649 104 28 413 532 146 484 61 2 422 58 181 166 3,463 374 192 6 303 1,062 316 64 107 3,355 922 283 405 302 562 70 332 698 1,533 743 109 516 119 258 68 66 1,110 163 2,741 180 121 1,622 625 385 2,272 68 168 132 586 2,198 68 52 491 566 279 576 89 5 229 13 88 118 2,304 126 221 1 66 363 168 35 49 1,839 309 114 195 123 224 36 144 337 840 308 65 258 46 107 42 28 792 36 2,125 122 47 777 230 195 1,925 155 56 36 307 1,104 56 18 248 264 66 209 24 1 14 2,189 386 532 97 * Includes national and nonnational banks in the District of Columbia, all of which are supervised by the Comptroller of the Currency. f Includes Virgin Islands. t Less than $500,000. 212 Other bonds, notes, net A Loans and discounts, net A $2,191 $88, 519 Federal Direct funds lease sold financing Fixed assets $761 $47 $2, 683 11 0 10 3 39 11 7 0 14 15 6 0 0 65 37 0 10 5 18 1 30 57 20 15 0 32 0 0 1 1 25 18 38 26 0 44 13 0 95 4 7 0 14 47 2 1 5 9 1 7 0 0 0 124 3 152 38 14 97 42 10 162 4 12 10 35 152 5 2 41 36 10 46 3 0 994 109 935 451 14,218 1, 086 871 11 585 1, 925 1, 223 204 348 7, 836 1, 771 612 757 602 1, 097 243 879 2, 723 3, 348 1, 894 257 1, 325 289 767 257 234 2, 878 314 9,315 863 235 4, 035 1,365 1, 307 5,819 365 426 287 1, 674 6,154 372 150 1, 537 1,708 392 1,253 195 18 33 7 33 15 431 48 34 1 20 120 45 12 11 120 51 18 20 17 30 9 27 57 78 64 13 34 11 19 18 8 78 11 240 29 11 103 50 50 159 8 18 10 44 282 10 4 48 57 14 44 10 10 1,106 16 22 7 14 16 260 6 4 (t) 85 16 1 4 413 63 19 25 19 16 3 18 16 28 81 4 18 11 20 (t) o (t) o 33 (1) (i) 0 0 it) 0 0 (t) 1 (t) 0 0 (t) 1 (t) o 11] 0 0 1 01 (t) o 1 (t) 1 0 0 0 0 U) 0 (1) o 0 0 U) (t) 0 0 U) 29 § Cash balances with other banks and cash items in process of collection. A Net of valuation reserves. NOTE : Data may not add to totals because of rounding. TABLE B-17.—Number^ total, and principal assets, liabilities, and capital accounts of national banks, by States, June 30, 1964— Continued [Dollar amounts in millions] LIABILITIES Total liabilities United Statesf . Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia.... Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts. Michigan Minnesota. Mississippi Missouri Montana Nebraska..... Nevada New Hampshire. New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia.. Wisconsin Wyoming Virgin Islands District of Columbia—all*.. $160,810 1,938 222 1,351 882 23,211 1,886 1,466 20 1,148 4,120 2,096 336 558 15,168 3,601 1,245 1, 565 1,200 2,238 i 383 1,617 I 4,424 6, 564 ' 3,542 506 2,582 523 1, 331 411 366 5, 404 618 16, 583 1,425 454 7, 349 2,665 2, 100 11, 164 621 784 508 3,066 11,607 567 234 2,554 2,965 822 2, 444 351 24 | 2,029 Total deposits Demand deposits, total $155,980 Demand deposits, Time deposits, tPC% $89, 681 $66, 299 $66, 030 $60, 999 1, 901 220 1,312 871 22, 417 1,852 1,406 20 1,119 4,012 1,994 331 j 549 i 14, 802 3,486 1,221 1,538 1,184 2,202 369 1,574 4,242 6U18 3,434 493 2,536 505 1,303 399 351 5,250 610 15,589 1,354 442 7, 166 2, 629 2,054 10,881 605 752 I 498 I 3,001 I 11,347 ] 556 228 2,488 2,899 807 2,396 344 22 1,220 128 699 587 10,187 1,060 951 10 111 2,593 1,453 185 313 8,428 2,247 817 1,067 826 1,567 215 1,005 3, 164 3,179 2,025 325 1,783 280 938 232 248 2,708 398 8,830 915 233 4,046 1,816 1,031 5,497 248 614 273 1,749 7,390 267 85 1,359 1,701 483 1,335 186 9 681 92 613 284 12, 230 792 455 10 343 1,420 541 146 236 6,374 1,239 405 471 359 635 155 569 1,077 3,239 1,410 168 752 225 364 168 103 2,541 213 6,759 439 209 3,120 812 1,023 5,384 357 138 225 1,252 3,957 289 144 1,129 1,199 324 1,061 158 14 909 90 534 424 8,210 816 778 10 673 1,915 1,008 122 229 5,981 1,535 549 695 658 1,061 178 746 2,321 2,284 1,294 216 1,230 215 665 169 192 2,176 278 6,348 681 188 2,957 1,248 826 4,268 187 486 203 1,094 5,300 205 72 1,054 1,263 360 988 132 7 649 59 586 276 10, 841 715 407 10 330 1,,268 485 120 235 5,989 1,207 395 435 340 567 153 532 1,020 2,901 1,350 161 720 214 356 156 95 1, 979 1,336 643 1,176 624 *Includes national and nonnational banks in the District of Columbia, all of which are supervised by the Comptroller of the Currency. f Includes Virgin Islands. Time and savings deposits, total 2,462 187 6,194 366 198 2,973 775 930 5,028 345 125 201 1,143 3,369 269 142 1,062 1,190 322 999 139 10 Federal funds purchased $787 (t) (JO 0 0 2 59 7 3 0 5 20 47 0 0 116 26 16 12 0 5 3 7 18 4 44 6 15 3 12 0 3 12 0 146 28 2 18 6 0 25 0 1 4 101 2 (f) JLess than $500,000. §IPG deposits are those of individuals, partnerships, and corporations. NOTE : Data may not add to totals because of rounding. 213 TABLE B-17.—Number, total, and principal assets, liabilities, and capital accounts of national banks, by States, June 30, 1964— Continued [Dollar amounts in millions] CAPITAL ACCOUNTS State Preferred stock Common stock $28 $4,162 $6, 950 $2, 491 54 5 27 24 458 57 39 1 28 145 45 9 76 4 55 34 803 74 69 1 49 170 90 14 36 3 14 19 328 36 23 United Statesf $14, 297 $304 Alabama . Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa 179 12 113 78 1,719 168 132 2 95 375 204 31 0 159 121 214 41 141 476 449 308 46 242 0 0 0 0 2 0 0 0 0 0 1 0 3 0 0 0 CO O O O . Mississippi Missouri 40 0 0 0 0 0 .. . .... 4 0 110 0 131 34 41 421 49 1,578 144 35 0 0 0 1 0 50 15 0 668 292 175 2 18 0 1,165 51 72 40 252 1,103 (t) it) 52 22 . ....... District of Columbia—all* 36 0 0 15 49 27 6 51 358 113 66 111 76 51 70 390 133 482 26 9 43 166 9 5 U) 0 0 0 0 1 0 0 0 0 161 0 0 15 7 73 76 22 50 6 it) 43 676 26 41 16 132 111 44 108 18 1 88 12 1 3 2 10 1 1 11 22 2 2 42 8 2 2 3 1 1 5 7 9 5 26 195 80 59 277 14 17 14 it) 7 0 0 15 $362 174 62 20 0 0 it) (i) it) Reserves 34 3 9 67 4 273 20 8 »o it) 31 49 30 51 15 36 114 127 89 12 74 20 643 161 profits 38 17 8 127 18 427 37 12 246 248 90 199 32 2 •Includes national and nonnational banks in the District of Columbia, all of which are supervised by the Comptroller of the Currency. 214 17 0 0 ( 14 483 82 Undivided Surplus 72 62 127 15 75 280 225 145 31 111 16 56 14 22 217 18 705 71 15 oooo Washington West Virginia Wisconsin Virgin Islands 1,346 313 oooo .. New York North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont 0 43 ... M^aryland Miassachusetts Michigan . Nebraska Nevada New Hampshire 14 0 122 0 COOOO . (t) oooooo Kentucky Louisiana . ooo o o o o o o Debentures oo Total capital accounts 36 26 32 10 22 75 82 69 3 50 7 8 183 11 12 9 it) 3 2 9 9 102 1 1 3 4 it) (t) 39 59 19 35 8 24 f Includes Virgin Islands. % Less than $500,000. NOTE: Data may not add to totals because of rounding. 13 0 1 6 29 2 1 2 1 5 7 1 0 6 TABLE B-18.—Number; total, and principal assets, liabilities, and capital accounts of national banks, by States, Dec. 31, 1964 [Dollar amounts in millions] ASSETS State Number of banks Total assets United Statesf. Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa • Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New 'Mexico New York... North Carolina North Dakota Ohio Oklahoma. , Oregon Pennsylvania Rhode Island South Carolina South Dakota.. Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming Virgin Islands 4,773 80 5 4 63 90 115 27 5 8 187 55 2 9 410 124 101 169 82 47 22 49 93 96 193 31 91 48 125 3 50 146 33 203 31 41 221 222 11 387 4 25 33 75 539 12 28 123 28 79 109 38 1 District of Columbia—all*. Cash assets^ $190,113 $34, 066 $33,537 $18, 592 2,263 256 1,605 1,060 26,120 2,154 1,728 24 1,305 4,934 2,429 376 661 17, 909 4,290 1,470 1,848 1,505 2,699 444 1,846 5, 260 7,615 4,113 583 4,088 592 1,640 464 432 6,229 686 19, 570 1,764 521 8,697 3,194 2,530 13,626 738 944 583 3,645 13,992 661 266 3,063 3,371 980 2,891 421 28 412 42 230 226 4,068 407 305 3 252 1,132 548 58 97 2,916 820 327 328 335 588 70 332 999 1,183 842 108 981 86 358 67 72 830 117 3,408 382 64 1,432 734 425 2,057 72 191 81 770 3,265 125 32 486 600 164 560 78 3 473 61 166 176 3,675 400 222 6 324 1,068 338 54 129 3,536 973 317 439 315 568 77 369 866 1,592 760 112 664 130 295 78 70 1,174 152 2,746 253 124 1,790 630 413 2,384 87 184 147 658 2,341 57 51 545 573 293 576 101 5 246 21 102 128 2,227 140 230 2,310 423 547 99 •Includes national and nonnational banks in the District of Columbia, all of which are supervised by the Comptroller of the Currency. f Includes Virgin Islands. JLess than $500,000. U.S. Govern- State and local ment obliga- securities, tions, netA net A (t) 66 377 151 35 53 1,876 333 120 199 136 249 38 152 317 874 356 66 384 52 136 43 24 839 37 2,257 146 56 881 243 198 2,081 166 58 41 332 1,154 68 17 264 279 75 242 25 1 Other bonds, notes, netA Loans Federal Direct and funds lease sold discounts, financing netA $2, 237 $95, 577 24 9 39 19 214 8 4 1 3 83 17 1 8 372 67 23 30 23 12 3 24 14 31 85 4 30 10 28 (t) 121 4 161 34 12 91 45 57 148 4 19 11 32 171 6 3 52 26 10 39 4 0 1,047 113 989 489 15, 005 1,121 920 12 626 2,097 1,309 210 358 8,671 1,981 653 818 670 1,206 242 923 2,847 3,739 1,975 276 1,909 298 793 253 248 3,091 326 10,107 896 248 4,276 1,465 1, 334 6,609 391 462 287 1,773 6,551 391 155 1,616 1,773 409 1,404 197 20 1,183 $821 13 2 20 1 11 17 U) o 3 15 2 0 $81 18 49 1 1 0 0 (t) (t) 59 35 5 7 0 22 3 12 35 40 0 (I) U) (t) 0 0 (t) 4 2 0 (t) 47 0 (t) 0 0 4 1 (t) 0 0 2 (t) (t) (t) (t) U)) (t)) (f) (t) 6 0 0 0 0 0 0 0 0 0 0 §Cash, balances with other banks, and cash items in process of collection. A Net of valuation reserves. NOTE: Data may not add to totals because of rounding. 215 TABLE B-18.—Number, total, and principal assets, liabilities, and capital accounts of national banks, by States, Dec. 31 1964— Continued [Dollar amounts in millions] LIABILITIES State Total liabilities Total deposits Demand deposits, total Time and savings deposits, total Demand deposits, IPC§ Time deposits, Federal funds purchased United Statesf $175, 065 $169,617 $98, 660 $70, 957 $74, 200 $64, 763 $827 Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Vriginia Wisconsin Wyoming Virgin Islands 2,077 244 1,476 977 24, 325 1,978 1,590 21 1,206 4,532 2,203 343 617 16, 514 3,967 1,357 1,683 1,381 2,480 401 1,694 4,769 7,117 3,796 536 3,739 551 1,503 428 390 5,778 636 17, 950 1,618 484 7,984 2,894 2,352 12, 370 685 870 541 3,381 12, 867 607 243 2,811 3,116 887 2,682 386 26 2,038 241 1,437 966 23, 459 1,941 1,514 21 1,180 4,427 2,140 337 607 16,118 3,829 1,346 1,667 1,365 2,437 387 1,652 4,483 6,950 3,720 528 3,650 538 1,469 418 369 5,606 630 16, 856 1,568 475 7,784 2,852 2,290 11,958 646 837 531 3,293 12, 539 596 237 2,738 3,034 871 2,632 380 24 1,314 130 763 662 10, 728 1,127 1,019 11 800 2,924 1,556 185 359 9,161 2,461 930 1,162 976 1,736 229 1,065 3,417 3,434 2,219 361 2,597 299 1,074 242 267 2,971 405 9,457 1,058 254 4,384 1,992 1,124 6,133 255 699 293 2,028 8,417 312 91 1,540 1,769 526 1,517 218 9 724 112 674 304 12, 732 814 495 10 380 1,503 584 152 248 6,958 1,368 417 506 389 701 158 588 1,066 3,516 1,501 167 1,053 239 395 177 102 2,635 225 7,399 509 221 3,400 860 1,166 5,825 391 138 238 1,265 4,122 284 145 1,198 1,265 346 1,115 162 15 992 103 587 480 8, 776 895 860 10 710 2.. 065 1,100 ' 125 267 6. 734 l!787 '644 766 773 1,189 189 834 23 511 2,674 1,503 248 1,714 235 740 176 206 2,443 301 6,993 818 213 3,382 1,446 888 4,999 208 560 235 1,308 5,900 221 77 1,207 1,390 398 1,163 152 7 694 69 649 292 11,180 739 442 10 367 1,321 527 120 247 6,539 1,330 408 468 363 611 156 542 971 3,124 1,432 161 981 226 387 166 98 2,555 195 6,664 401 212 3,236 817 996 5,355 360 123 215 1,150 3,518 263 144 1,120 1,257 344 1,061 143 11 0 0 0 0 55 7 2 0 0 25 0 0 0 104 35 0 0 0 9 0 2 23 0 10 2,143 2,090 1,391 District of Columbia—all* •Includes national and nonnational banks in the District of Columbia, all of which are supervised by the Comptroller of the Currency. flncludes Virgin Islands. 216 699 1,252 tt) (t) 32 0 1 1 13 0 187 0 0 19 9 0 118 20 0 0 17 128 2 0 4 6 0 0 0 0 680 jLess than $500,000. §IPC deposits are those of individuals, partnerships, and corporations. NOTE : Data may not add to totals because of rounding. TABLE B-18.—Number, total, and principal assets, liabilities, and capital accounts of national banks, by States, Dec. 31, 1964— Continued [Dollar amounts in millions] CAPITAL ACCOUNTS State Total capital accounts United States f Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New H a m p s h i r e . . . . . . . . . New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma. Oregon, Pennsylvania............ Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont. . Virginia. . . . . . . . . . . . . . . . Washington West Virginia. Wisconsin.............. Wyoming Virgin Islands Debentures Preferred stock Surplus Undivided profits Reserve $15,048 $475 $28 $4, 286 $7, 207 $2, 657 $393 185 13 130 83 0 o o o 57 5 28 26 475 59 41 1 29 150 46 9 14 487 83 31 49 30 52 16 37 116 132 89 12 98 15 40 17 8 132 18 432 37 12 202 83 59 293 14 18 15 73 395 15 7 77 77 22 51 6 77 4 56 36 812 76 76 1 50 178 91 14 23 656 170 54 74 63 129 15 77 288 234 149 33 152 16 57 15 22 224 18 714 74 15 367 118 66 727 30 42 17 141 494 30 9 134 112 47 111 18 1 39 3 13 1 16 3 2 10 44 91 1,795 ' 176 138 2 99 402 226 33 45 1, 395 323 113 165 124 219 42 152 491 499 317 47 350 42 137 35 42 452 49 tt) 26 1 142 3 0 0 0 13 37 0 0 9 0 0 0 0 (1) 0 0 25 0 0 0 0 16 0 60 15 0 22 18 0 17 0 0 146 36 713 300 178 1,255 1,125 53 23 253 255 93 209 35 2 tt) U) 36 (t) tt) 0 0 0 0 0 0 1 0 3 0 0 0 3 0 0 0 0 0 0 0 0 20 0 0 0 0 U) U) 0 (i) 0 0 0 1 1 0 ^Includes national and nonnational banks in the District of Columbia, all of which are supervised by the Comptroller of the Currency. 15 (t) 31 1,620 52 74 42 264 0 0 0 0 0 0 0 2 0 District of Columbia—all* 79-563—65 Common stock (I) 19 357 37 2 20 (t) 17 1 U) 3 11 50 29 8 23 2 5 2 200 62 26 38 43 8 2 3 3 27 34 11 31 78 1 1 6 8 11 5 88 73 1 68 10 37 4 10 69 1 288 19 8 118 77 53 204 9 13 9 43 167 6 5 39 tt)7 (t) 4 (t) 2 11 11 107 1 1 4 4 (t) 15 0 1 tt)7 32 2 1 3 65 2 18 38 9 1 5 8 1 0 26 6 •{•Includes Virgin Islands. |Less than $500,000. NOTE : Data may not add to totals because of rounding. 217 TABLE B-19.—Selected loans and discounts of national banks, by States, Dec. 31, 1964 [Dollar amounts in millions] Loans and discounts State Loans to Loans secured financial by real instituestate tions United States f $24, 065 $7, 098 Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Vriginia Wisconsin Wyoming Virgin Islands 171 48 266 108 5,160 245 280 5 217 438 218 90 131 1,388 601 169 118 172 175 76 272 411 1,340 508 54 384 82 89 90 59 1,283 68 2,164 129 83 1,345 244 363 1,956 200 65 75 249 653 150 73 454 456 147 469 63 15 68 0 59 18 1,185 91 22 0 77 121 93 2 12 1,018 141 33 60 47 96 9 73 282 266 188 8 192 5 31 7 10 119 10 910 41 3 242 94 99 336 17 25 10 172 423 31 1 67 158 13 108 2 0 363 164 District of Columbia—all*. Loans to purchase or carry securities Loans to farmers $2, 878 S3, 683 23 (t)10 6 189 23 18 0 8 63 16 4 7 530 75 10 8 11 57 3 22 36 80 68 6 81 1 21 40 (t) 162 53 503 149 3 1 (t) 41 20 8 54 223 49 147 190 45 23 9 16 5 35 110 14 83 62 273 7 4 12 32 76 15 60 64 128 77 99 (t) 2 132 5 569 15 2 129 26 8 141 (t)25 1 56 286 16 1 21 15 5 44 2 0 tt) 18 *Includes national and nonnational banks in the District of Columbia, all of which are supervised by the Comptroller of the Currency. f Includes Virgin Islands. 218 10 94 50 377 21 8 45 112 6 33 38 0 Personal loans to Commercial individand indusuals A trial loans $34, 164 $22, 715 363 38 270 159 4,977 327 271 2 196 750 504 47 74 3,943 507 152 258 189 541 74 273 1,408 898 677 94 624 73 221 80 85 704 119 4,409 383 54 1,085 602 506 2,393 100 149 58 686 3,126 102 28 444 619 89 377 55 3 360 32 226 146 2,921 291 300 4 118 688 450 49 84 1,457 579 141 190 200 302 72 258 691 1,067 398 89 515 79 154 70 85 861 95 1,908 312 51 1,320 334 281 1,529 59 175 56 569 1,565 69 44 581 380 153 314 40 2 312 305 Other loans Loans and discounts gross $2, 975 $97, 577 $2, 000 1,076 118 998 496 15,271 1,139 939 12 (i) 637 21 2,133 31 1,327 26 211 11 366 3 8,948 390 2,016 65 667 15 829 6 681 17 1,223 30 246 4 936 22 2,921 89 3,808 122 2,000 50 283 17 1,935 56 304 2 807 18 255 1 252 7 3,170 60 336 6 353 10, 387 913 19 255 3 4,360 175 1,487 59 1,346 12 6,752 297 397 21 471 22 298 3 1,811 30 6,680 250 395 6 157 2 1,638 26 1,809 68 418 5 1,441 98 200 1 20 29 5 9 7 266 18 19 51 1 5 5 336 13 46 U) 11 36 17 2 7 277 35 14 11 11 17 4 13 74 69 26 6 27 6 14 1 4 79 10 280 17 7 85 22 12 143 6 9 11 38 129 4 2 23 35 9 37 3 (10 34 1,197 13 { Less than $500,000. A Excludes business and farm loans. NOTE : Data may not add to totals because of rounding. TABLE B-20.—Selected U.S. Government obligations held by national banks, by States, Dec. 31, 1964 [Dollar amount in millions] State Treasury bills 1 United States f Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode: Island South Carolina South Dakota Tennessee Texas Utah Vermont. . . , Virginia Washington West Virginia Wisconsin Wyoming Virgin Island* District of Columbia—all* .... Treasury notes Government Obligations A U.S. nonmarketable bonds maturing within 7 year Other U.S. bonds maturing 7-4.9 years Other U.S. bonds maturing 5.0-9.9 years U.S. bonds maturing after 70 years Securities guaranteed by US. Government $6,708 $10, 043 $130 $991 $7, 747 $7,318 $512 $89 104 18 46 38 879 121 65 1 67 172 90 3 36 685 163 63 98 69 53 23 62 323 230 103 12 272 25 60 12 18 177 20 596 65 12 471 114 60 358 25 27 29 102 387 6 9 126 28 44 112 27 180 7 31 44 994 110 97 1 61 324 102 22 62 901 345 94 124 99 256 29 153 273 429 181 33 151 23 86 10 19 265 40 976 78 25 586 192 54 798 2 38 40 253 699 35 11 183 216 72 212 25 2 2 17 2 20 4 57 19 1 52 19 24 45 2 1 0 3 43 3 1 0 4 1 13 1 10 57 8 15 12 0 115 12 41 40 612 98 28 2 120 189 90 25 28 900 259 96 113 93 158 10 83 98 480 204 35 135 38 79 15 20 351 49 437 54 39 314 178 107 514 45 59 37 190 571 5 15 139 173 87 140 24 2 12 200 (?) .. US (1) (?) 6 2 1 0 (X)15 4 2 3 1 1 1 2 5 7 3 1 2 (X) 1 (?) (X) 8 1 6 1 \ 6 3 1 11 (X) (t) 3 1 2 8 1 4 2 2 2 1 (?) 94 143 *.lncludes national and nonnational banks in the District of Columbia, all of which are supervised by the Comptroller of the Currency. f Includes Virgin Islands. 1 1 1 1 7 (J) 6 59 16 (?) (?) 113 44 8 20 6 4 1 13 8 98 13 4 12 3 11 15 1 24 7 46 2 2 43 15 26 44 0 22 4 20 57 (t) 1,078 47 29 2 62 308 37 4 2 846 153 53 75 45 82 12 53 154 278 246 26 86 39 55 26 11 305 29 638 52 45 345 120 163 585 14 33 36 87 548 11 11 81 90 72 91 12 1 89 (X) U) 0 1 9 1 0 71 5 1 6 3 12 (X) 2 4 64 8 1 4 1 3 0 1 41 2 37 1 1 23 8 2 72 1 (?) 1 4 46 0 4 3 7 7 4 2 0 1 (?) (?) 0 (?) 0 0 1 5 (X) (?) (X) (X) (?) 1 ol 7 1 (1) (1) (?) (?) (?) (?) (?) 2 0 2 3 11 0 3 0 (?) (?) 1 24 (?) (?) (?) (?) (?) 1 1 0 (?) JLess than $500,000. A Each category is net of valuation reserves. NOTE : Data may not add to totals because of rounding. 219 TABLE B-21.—Bank trust assets and income by States Trust Department Income in 7964 Accounts wher? national banks* exercise investment responsibility State Number of banks having accounts United States Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Idaho Illinois. Indiana Iowa Kansas .. Kentucky Louisiana Ivfaine . Miaryland Michigan M[innesota Mississippi Missouri M^ontana. ... 1,564 ... ... Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming 28 4 2 24 16 25 13 1 6 62 22 1 131 93 37 35 52 18 15 10 60 28 19 16 26 10 13 2 20 85 12 84 18 6 50 32 2 156 2 11 9 26 125 2 12 57 10 31 33 12 Employee benefit accounts ($ millions) Other trust accounts ($ millions) National f banks ($ thousands) All insured commercial banks ($ thousands) National banks as a percent of total $20, 782 $54, 443 $75, 225 $310, 797 $640, 071 48.6 113 2 16 9 1,458 100 205 0 173 153 119 6 3,670 220 33 681 4 361 215 4,819 936 1,402 794 6 378 224 6,277 1,036 2,906 72 2, 052 656 42, 015 5, 2.00 6,917 0 5, 927 8,573 4, 618 239 36, 209 6,090 1,640 1, 260 1, 455 1 247 1, 078 2, 324 22,109 9,656 8,354 245 8,054 156 2, 246 3,076 72 2,512 759 58,510 5,485 15, 647 6,897 5,927 10, 515 7,815 284 56, 642 8,088 2,791 1,375 5,388 1,524 1,910 3,712 33, 226 17, 566 8,478 793 10, 549 452 2,283 94.5 100.0 81.7 86.4 71.8 94.8 44.2 0 100.0 81.5 59.1 84.2 63.9 75.3 58.8 91.6 27.0 81.8 56.4 62.6 66.5 55.0 98.5 30.9 76.3 34.5 98.4 80.9 86.4 55.8 96.0 14.5 35.7 99.7 45.2 99.7 95.6 55.3 31.8 88.6 89.3 81.3 92.7 42.3 39.5 71.3 90.9 54.9 43.5 94.5 28 23 55 15 tt) 969 1,754 770 22 5,143 1,518 256 272 237 169 180 1,607 (t) 1,142 1,907 889 28 8,813 1,739 288 299 261 224 195 55 1,802 2,114 474 2 520 2 375 3,867 1,561 1,235 53 1,661 38 431 5,670 3,675 1,709 57 2,181 40 48 4 373 79 421 83 5 112 5 3,365 102 5 867 119 62 3,357 68 62 8 75 719 47 3 109 118 124 989 99 4,870 497 36 2,809 397 521 7,411 261 291 43 1,554 2,695 88 37 1,143 908 130 1,101 104 8,234 599 41 3, 677 516 582 10, 768 328 353 50 1,629 3,414 135 41 1,252 1,026 11 143 1 240 447 33 251 590 34 * National bank figures on trust assets include national and nonnational banks in the District of Columbia and the assets of some affiliates of national banks that submitted data to the Office of the Comptroller of the Currency. 220 Total trust accounts ($ millions) 794 891 445 8,416 670 29,195 2,462 363 12, 084 2,311 3,499 32, 405 1,605 1,257 359 3,496 14, 692 683 210 5,000 5,368 1,034 2,902 515 15,090 698 201,025 6,890 364 26, 748 2,378 3,668 58, 591 5,052 1,418 402 4,299 15,851 1,613 532 7,009 5,908 1,885 6,678 189 200 f National bank trust income covers the same banks as the asset figures, including full-year trust income for banks converting to national status in 1964. % Less than $500,000. TABLE B-22.—Common trust funds by States, 1963 and 1964* Number of banks with common trust funds 1963 Number of commoi trust funds 1963 Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida. Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts ...... Michigan Minnesota Mississippi. Missouri Montana .| Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina., . . . . North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah.... Vermont Virginia Washington West Virginia Wisconsin Wyoming Total United States. 693 Number of account participations 1964 Total assets of funds ($ millions) 7963-64 increase in assets (percent) 7963 0 11 3 27 22 15 4 6 24 12 7 1 26 9 2 6 8 1 12 14 36 26 20 2 21 4 5 2 7 25 3 73 15 3 43 10 10 105 8 7 9 12 30 8 9 37 12 7 23 0 794 0 949 571 14, 030 4,385 3,804 2,166 2,061 2,258 3,220 975 27 4,584 1,571 83 264 1,856 122 1,800 5,000 9,650 3,286 3,002 482 7,405 336 723 285 217 6,219 696 21,001 3,214 227 5,812 588 3,197 49, 746 1,296 1,267 348 1,756 3,717 1,500 578 5,600 3,532 794 4,340 0 788 191,334 1,373 0 1,889 675 17, 693 5,315 4,070 2,200 2,227 2,715 4,277 1,063 71 6,832 1,676 170 375 1, 906 171 2,200 5,843 10, 877 4, 901 3,902 527 8,815 426 858 297 361 7, 052 795 24, 351 6,663 255 7,300 838 3,956 53,114 1,361 1,551 529 2,069 5,114 1,700 625 6,751 4,268 865 5,080 0 228,142 14.0 0 34.5 5.9 276.5 106.8 108.7 79.0 54.9 37.8 73.3 16.4 .3 172.3 24.8 1.1 3.5 21.1 2.0 38.5 96.9 349.1 43.1 51.2 5.6 178.8 3.3 16.3 3.3 8.8 73.5 9.9 898.7 99.1 1.9 162.6 15.2 60.8 985.0 29.8 14.6 2.5 30.3 75.7 14.5 6.2 91.4 60.6 9.5 70.2 0 15.8 0 50.8 7.8 375.3 134.7 126.1 85.0 68.5 52.5 92.1 19.6 .7 274.9 29.3 1.6 6.2 28.8 2.7 51.3 132.3 435.3 96.0 69.3 6.8 225.2 4.9 20.1 5.1 12.9 87.8 13.5 1,152.4 129.7 2.2 207.5 21.2 74.2 1,154. 2 35.1 17.7 4.4 63.5 107.9 18.6 7.2 140.7 84.9 11.7 88.2 0 12.9 0 47.2 32.2 35.7 26.1 16.0 7.6 24.8 38.9 25.6 19.5 133.3 59.5 18.1 45.5 77.1 36.5 35.0 33.2 36.5 24.7 122.7 35.4 21.4 26.0 48.5 23.3 54.5 46.6 19.5 36.4 28.2 30.9 15.8 27.6 39.5 22.0 17.2 17.8 21.2 76.0 109.6 42.5 28.3 16.1 53.9 40.1 23.2 25.6 0 4, 539. 8 5, 854. 2 29.0 *These figures were derived from a survey ot banks and trust companies operating common trust funds. Data are for the last valuation date in 1964 and 1963. 221 T A B L E B-23.—Current operating revenue, expenses, and dividends of national banks, by major categories and States, year ended Dec. 31, 1964 [Dollar amounts in millions] Current operating revenue Interest and dividends on securities State United States f Interest and U.S. discount Other Governon loans securities ment obligations Other service Service charges, charges commissions, Trust on departfees and deposit ment collection accounts and exchange charges Other Total current current operating operating revenue revenue $1,190 $602 $5, 232 $94 $441 $133 $290 $165 $8,148 80 5 16 2 6 6 134 15 8 8 1 63 8 3 1 (t) 2 1 101 14 60 28 867 66 55 1 34 120 78 7 1 6 2 94 7 6 2 1 3 4 78 4 6 1 1 2 4 63 90 115 27 5 8 187 55 2 9 410 124 3 222 14 5 1 2 68 11 4 7 5 7 1 5 10 26 12 2 8 2 4 1 13 22 424 (t) 3 2 (t) 5 1 107 37 45 37 64 15 51 156 195 109 16 74 17 45 16 -ri 101 169 82 47 22 49 93 96 193 31 91 48 125 39 12 2 4 126 35 11 16 11 20 3 13 27 56 28 4 20 9 10 3 1 1 (t) (+") (t) 1 com o 4,773 CO CM Alabama .. . Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida . .. Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana M^aine .. Maryland Massachusetts Michigan . . . . . Minnesota Mississippi Missouri Montana Nebraska Nevada See footnotes at end of table. Number of banks § Service charges and other fees on bank loans 1 3 21 9 3 5 3 6 1 4 14 13 9 2 4 2 4 1 2 1 19 2 1 (t) 3 3 (t) 10 3 1 1 (t) U) 13 33 703 (t) 0 (1) (t)36 29 1 1 (%) 18 (t) 6 2 1 1 1 1 2 12 10 8 2 10 5 6 1 1 1 1 3 1 82 43 1,289 102 84 1 55 205 116 1 42 5 7 0 2 9 5 3 (t) 1 1 1 2 9 5 2 U) (l) 2 1 2 1 (t) 176 59 76 59 103 22 79 242 311 177 26 115 29 67 24 TABLE B-23.—Current operating revenue, expenses, and dividends of national banks, by major categories and States, year ended Dec. 31, 79(54—Continued [Dollar amounts in millions] Current operating revenue Interest and dividends on securities State New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia.. Wisconsin Wyoming Virgin Islands District of Columbia—all* Number of banks § 50 146 33 203 31 41 221 222 11 387 4 25 33 75 539 12 28 123 28 79 109 38 1 15 U.S. GovernOther ment securities obligations 3 41 6 100 8 5 63 23 13 85 3 6 5 22 82 3 2 19 21 11 22 3 (t) 20 Interest and discount on loans 1 27 1 72 5 2 28 8 6 63 5 2 2 10 39 2 1 9 9 2 8 1 (t) 3 •Includes national and nonnational banks in the District of Columbia, all of which are supervised by the Comptroller of the Currency. f Includes Virgin Islands. JLess than $500,000. Service charges and other fees on bank loans 15 169 21 531 53 15 229 86 81 339 21 27 19 100 362 23 9 95 107 25 70 13 1 (t) (t) 9 64 1 Other service Service charges, charges commissions, 7rerf fees and departon deposit collection ment and accounts exchange charges 2 17 2 34 2 (t) 1 1 4 (t) (t) (t) 1 6 1 {%) 2 2 (t) 1 (t) tt) (t) 5 2 18 8 10 18 2 3 2 6 22 2 1 8 U) 14 1 5 1 3 1 10 3 1 4 2 1 6 1 1 1 2 8 1 2 3 1 2 1 U) (t) 6 1 Other current operating revenue (i) (t) (t)12 tt) 5 8 1 29 2 2 3 28 2 1 4 1 38 1 2 2 9 (t) 3 (t) 1 (t) 2 (t) 5 (i) (J) (t) 0 (1) U) 15 1 8 5 1 3 6 2 3 1 3 1 Total current 22 272 33 823 79 25 362 132 118 554 33 42 29 147 542 32 13 141 165 41 112 19 2 103 §Number of banks as of end of year, but figures of income, expenses, etc., include banks which were in operation a part of the year but were inactive at the close of the year. NOTE : Data may not add to totals because of rounding. 223 T A B L E B—23.—Current operating revenue, epxenses, and dividends of national banks, by major categories and States, year ended Dec. 31, 1964—Continued [Dollar amounts in millions] Current operating expenses Officer and employee benefits (pensions, Employees other hospitalization, social than officers security, insurance, Amount Number A etc.) Salaries and wages State Officers Amount Number § United Statesf $665 62, 775 Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine 9 2 7 5 97 10 8 15 3 14 6 207 15 20 11 2 3 47 17 7 10 6 9 873 114 692 494 9,579 971 727 21 358 1,922 1,004 134 301 3, 870 1,527 695 995 681 111 2 231 4 (t) $1,211 300, 976 16 35 20 3 5 92 27 8 9 8 16 4,371 534 3, 517 1,751 46, 226 3.845 3,938 62 1, 838 9,515 5,490 627 1,420 20, 991 7,113 2,269 2,545 2,494 4 079 1,056 $266 <» I 1 41 3 4 6 5 1 1 24 6 2 2 2 3 1 Fees paid to directors and members of executive, discount, and other committees $33 U) (I) 1 1 (t) (t) U) (t) Interest on time and savings deposits Furniture Other Net and equipTotal Interest current and dis- occupancy ment (depre- current expense ciation, rents, oprating operating count on borrowed of bank servicing, un- expenses expenses capitalized money premises costs, etc.) $2, 263 24 3 23 10 429 28 $20 (t) (t) (t) (i) $351 $206 $890 $5, 905 $2, 243 3 1 4 2 57 5 2 1 3 1 34 3 12 2 9 6 106 12 70 11 63 31 974 79 63 1 35 155 84 13 22 495 126 43 51 40 72 31 3 19 13 314 15 (t) 1 11 47 18 5 8 225 38 13 16 11 21 5 0 (t) (J) l o (t) (t) 2 (t) (t) U) ( S Net current operating earning^) 10 (t) 9 7 1 1 23 8 3 3 3 5 1 8 4 1 1 13 5 2 2 2 3 1 28 18 2 3 66 24 8 8 7 15 3 16 24. 22 (i) 51 20 32 5 11 208 50 16 26 19 31 6 District of Columbia—all* 6 20 17 16 2 10 3 9 2 2 21 3 50 8 3 27 15 12 40 2 5 3 11 51 2 1 13 15 4 10 2 (t) 8 639 1,702 1,390 1,535 254 1, 064 313 834 252 269 1, 914 331 4, 110 797 281 2,319 15 573 1,301 4,074 184 532 352 1, 111 4, 895 228 148 1,360 1,470 410 995 222 10 605 13 43 47 25 4 18 4 9 4 3 45 5 120 13 3 52 17 18 74 4 9 4 20 64 4 2 20 29 5 15 3 (t) 15 3,587 1 10, 443 12, 080 6,540 1,007 5,741 1,028 2,524 920 965 11,498 1,487 25, 765 3,780 882 12, 980 4, 581 4,366 19,431 1,188 2, 562 1,010 5,401 16,895 1,080 531 5,717 6,693 1,481 4,376 685 71 3 9 11 6 1 4 1 2 1 1 9 1 32 3 1 9 4 4 18 2 2 1 4 14 1 > 4 5 1 3 1 (t) 3,522 *Includes national and nonnational banks in the District of Columbia, all of which are supervised by the Comptoller of the Currency, f Includes Virgin Islands. JLess than $500,000. (t) (t) (t) 1 1 1 1 1 ($) (t) (t) (t) U) U) U) (t) 2 2 2 1 4 3 1 1 18 34 111 48 5 25 7 12 5 4 78 7 256 15 7 97 29 36 171 14 3 8 44 137 10 5 37 41 10 32 5 (t)1 21 U) (t) 1 1 (t) it] ill 0 (t)1 U) l (t) U) (t) (t) (t)1 (t) U) (t) U) :) :) :) U) I Mil Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York ................ North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming Virgin Islands 4 12 13 8 1 5 1 3 2 1 14 1 40 4 1 13 5 5 22 1 2 1 6 23 1 1 5 8 1 5 1 (t) 5 (t) 2 7 7 5 1 3 1 2 1 1 7 1 16 3 1 8 3 3 13 1 2 1 4 13 1 4 5 1 3 1 U) 10 28 33 20 4 13 4 9 2 3 30 5 83 10 3 46 15 11 62 3 6 3 16 71 3 1 17 16 5 12 2 (t) 2 12 57 155 240 129 18 78 21 47 17 16 207 25 602 56 18 254 89 89 405 27 28 21 106 381 22 11 101 120 27 81 14 1 67 §Number at end of period. Excludes building officers. ANumber of employees at end of period. Excludes building employees. OTotal current operating revenue less total current operating expenses. NOTE : Data may not add to totals because of rounding. 22 87 71 48 8 37 8 20 7 6 65 9 222 23 7 43 29 29 148 6 14 9 41 160 10 3 40 45 14 30 5 (t) 36 TABLE B—23.—Current operating revenue, expenses, and dividends of national banks, by major categories and states, year ended Dec. 31, 1964—Continued [Dollar amounts in millions] Recoveries', transfers from valuation reserves, and profits § On loans On securities State Profits on securities sold or redeemed United States f Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine $43 Recoveries $2 Transfers from valuation $39 Recoveries Transfers from valuation reserves $19 All other $58 Losses, chargeoffs, and transfers to valuation reserves A On securities Total On loans recoveries transfers from Charge- Transfers Transfers valuation Losses on off s on to to Losses reserves, securities securities valuation and valuation not sold and sold reserves chargeoffs reserves profits $169 $50 $4 $41 $13 li 111* 3 3 24 4 2 1 1 3 (t) (t) U) (t)' a/ 1 is U) $366 5 1 4 2 52 3 3 0 1 9 3 (t) 1 57 6 2 2 2 3 1 All other Total losses, chargeoffs, and transfers to valuation $82 $557 17 1 2 7 1 4 3 87 5 6 ) ($) «) 1 2 12 5 1 2 77 13 3 4 3 6 1 Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming Virgin Islands it) it) U) U) U) =. District of Columbiaall* it) it) (t) (t) U) it) U) 4 1 1 1 1 2 2 1 1 2 2 2 (t) U) U) U) 1 1 tt) 0 U) U) (: ) ) ) ) ) ) :) 0 it) ( • ( : ( • ( : ( : ill (t) (t) $ U) U) 0 0 (t) (t) (I) 0 11] (i) (t) 0 0 (t) 0 1 1 (J) (t) (t) (t) it) 1 1 U) (i) ill 9 (t) 0 U) U) it) it) it) (t) (t) (t) 0 1 0 0 1 tt) (t) (t) (t) U) (t) (t) (t) (t) [\] (• (: (: U) (t) (t) 1 0 (t) (t) (t) (t) 1 (J) (t) ($) (t) (t) (t) 1 (t) (3t) C;) (" ii! 0 0 :} ( ( ;) 0 0 (t) (i) 0 1 3 1 0 1 0 0 0 3 1 1 U) 4 1 2 U) 1 1 4 1 5 2 11 2 1 2 1 3 (t) (t) (t) (i) (t) 1 (I) (t) tt) 7 22 5 4 ($) 4 4 2 8 U) (I) 6 0 (t) 2 1 (1) it) (J) (t) (t) (t) it) it) 1 6 3 2 6 1 3 6 12 U) «) 2 3 1 111 (J) (t) (t) (t) it) it) (t) 3 2 *Includes national and nonnational banks in the District of Columbia, all of which are supervised by the Comptroller of the Currency. f Includes Virgin Islands. {Less than $500,000. 1 (t) (t) 1 (t) (1) (t) (i) (J) (1) U) 7 8 1 2 1 3 it) it) (!) 1 1 (t) (t) (t) a) 0 (t) (t) 1 (i) it) (t) ») (t) it) it) it) it) it) it) it) 0 it) it) it) it) it) it) it) it) it) it) it) it) it) it) it) it) 0 0 it) it) it) it) 0 it) it) it) it) it) it) it) it) it) it) 0 0 it) 1 1 1 1 it) it) it) it) it) it) it) (t) 0 it) 1 0 1 0 i t) (t) i i) 1 1 0 it) (I)' 7 3 23 1 2 1 7 25 1 3 it) it) i t) it) it) it) (t) it) 16 3 3 27 21 6 2 6 2 4 2 1 20 3 55 4 1 17 10 8 36 1 2 1 12 43 1 1 8 7 2 6 1 1 11 2. it) U) 42 3 it) it) 1 2 7 0 I ( i) 1 15 15 4 1 3 1 2 1 1 5 5 2 5 1 0 »> it) §Not Including recoveries credited to valuation reserves. ANot including losses charged to valuation reserves. NOTE : Data may not add to totals because of rounding. 1 U) (I) (t) (t) tt) I!) ($) (t) TABLE B—23.—Current operating revenue, expenses, and dividends of national banks, by major categories and states, year ended Dec. 31, 1964—Continued [Dollar amounts in millions] State United States \ Alabama Alaska Arizona Arkansas . California Colorado Connecticut. Delaware Dist. of Col Florida. . . Georgia Hawaii. . Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine. . Maryland . . . Net income before related taxes $1,855 $580 $51 $1,213A 25 2 16 11 237 20 16 8 1 6 3 69 7 5 1 16 1 9 8 142 12 11 (t) . . . . Federal State Net income before dividends On common stock 18 41 30 5 9 155 41 15 23 17 28 5 27 (t) 8 14 10 1 3 47 16 5 7 5 11 2 8 tt) U) 22 o1 1 U) 0 0o 0 o0 1 0 0 o0 U) 10 27 19 3 5 108 25 10 15 11 17 3 19 $591 Net income Capital before On Total Net in- accounts § dividends to capital precash come accounts ferred dividends after stock declared dividends (percent) $1 $593 0 0 0 7 2 92 6 6 o0 0 0 0 0 a) ii 7 1 2 50 10 4 5 4 6 1 6 (t) 0 0 o0 o 0 tt) 0 o 0 $620 $14, 298 9 1 4 5 50 6 5 2 92 6 6 a) s 11 7 1 2 50 10 4 5 4 7 1 6 a ) Memoranda items Ratios Cash dividends declared Taxes on net income 5 16 12 2 3 58 15 6 10 7 11 2 13 179 13 110 79 1,679 169 132 2 96 377 202 32 44 1, 356 315 110 160 121 211 41 143 Total cur- Recoveries cred- Losses charged to valuat on rerent operat- ited to valuation serves (not ing expenses reserves (not indueled in included in reto total curj 226) rent operat- coveries, p. 226) losses, b. ing revenue (percent) On On On On securities loans securities loam 8. 48 72. 47 $3 8.94 7.69 8. 18 10 13 8.52 7. 10 8.33 4.65 10.42 7. 16 9.41 9.37 11. 36 7.96 7 94 9.09 9.37 9.09 8.06 7 32 13.29 69. 31 78. 57 76.83 72. 09 75. 56 77.45 75.00 87.45 63.64 75. 61 72.41 72.22 66. 67 70.41 71. 59 72.88 67. 10 67.80 69.90 72. 73 72.15 0 0 0 o U) o (t) 0 0 ($) (t) o 0 2 (t) U) (J) a) ($) 0 0 $106 1 (t) (|) 9 2 1 U) 2 2 2 U) 17 3 (t) 1 (%) $32 (t) 0 0 (t)19 0 a> (J) a) (J) (t) (1) (t) (J) m 0 0 0 0 2 $226 4 1 3 1 35 3 2 0 1 10 4 (t) tt) 22 5 1 2 1 2 1 1 Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey , New Mexico New York , North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming Virgin Islands .. . . .. District of Columbiaall* 81 55 46 7 35 7 18 6 5 49 6 177 21 5 95 37 23 121 5 12 8 35 130 10 2 34 41 13 27 4 (t) 33 28 15 15 2 13 2 7 2 2 12 2 42 7 2 34 13 7 26 Q) 5 3 12 46 4 1 13 16 5 8 2 6 0 3 0 1 0 0 0 0 0 0 8 (t) (t) 0 1 2 0 (t) (t) U)0 0 (t) U)0 U) 0 0 1 0 0 15 0 48 39 28 5 21 5 11 4 3 37 4 125 13 4 61 23 14 94 4 7 5 23 84 6 2 21 25 8 18 2 (t) 18 23 18 13 2 8 2 5 2 1 17 2 63 6 2 26 12 8 49 3 3 2 9 45 3 1 10 11 3 8 1 0 8 0 U)0 0 0 0 0 0 0 U)0 1 0 0 (f) 0 0 0 0 (1) 0 0 0 0 U)0 0 0 0 0 0 0 * Includes national and nonnational banks in the District of Columbia, all of which are supervised by the Comptroller of the Currency. f Includes Virgin Islands. t Less than $500,000. §This includes the aggregate book value of capital stock, undivided profits, reserves, and preferred stock retirement fund. These are averages of data from the 23 18 13 2 8 2 5 2 1 17 2 64 6 2 26 12 8 49 3 3 2 9 45 3 1 10 11 3 8 1 0 25 21 15 3 13 2 6 1 2 19 2 61 7 2 35 11 6 44 2 4 3 14 39 3 1 11 14 5 9 1 U) 475 461 308 45 276 41 133 33 41 427 48 , 540 137 35 675 288 174 , 185 51 72 40 255 ,090 52 23 246 248 91 201 33 2 10. 11 8.68 9.09 11. 11 7.61 12.20 8.27 12. 12 7.32 8. 67 8.33 8. 12 9.49 11.43 9.04 7. 64 8.05 7. 85 7.84 9.72 12. 50 9.02 7.71 11.54 8.70 8.54 10.08 8.79 8. 96 6.06 14.04 64.05 77. 17 72. 88 69. 23 67. 83 72. 41 70. 15 70. 83 72.73 76. 10 75.76 73. 15 70.89 72.00 70. 17 67.42 75.42 73. 10 81. 82 66.67 72. 41 72. 11 70. 30 68. 75 84. 62 71.63 72.73 65.85 72. 32 73. 68 72.01 161 11. 18 65. 05 (I) (t)0 0 0 1 1 3 5 2 1 1 U) 2 1 6 0 (i) 1 0 0 0 U)l U) (t) (i) 0 0 U) 0 0 (t) 2 (t) (t) (t) tt) U) 18 Cf) 2 (i) U) 0 U) (t) 4 (i) U) o 0 U)0 (t)0 0 (t)0 0 (t)0 (t) (t) U)1 7 (t) U)1 ) U) U) (t) 0 2 (i) (?) (t) 0 0 U) o 0 1 1 0 0 0 0 U) 0 U) 0 0 0 Reports of Condition of the previous December and the current June and December of the respective year. A This figure is after deduction of $10 million, interest paid on capital notes and debentures. NOTE: Data may not add to totals because of rounding. T A B L E B—24.—Current operating revenue, expenses, and dividends of national banks in the United States and possessions operating throughout calendar 1964, bv size of deposits, December 1964 [Dollar amounts in millions] Banks operating throughout entire year with deposits in December 1964, of— Item Number of banks Total deposits Capital stock (par value) Capital accounts Current operating revenue: Interest and dividends on— U.S. Government obligations Other securities Interest and discount on loans Service charges and other fees on banks' loans Service charges on deposit accounts Other service charges, commissions, fees, and collection and exchange charges Trust department Other current operating revenue Less than $2.0 $25.1 to $50.1 $50.1 to $100.0 $100.1 to $500.0 Over $500.1 Total 1,253 1,169 1,012 336 $4, 310 139 489 $8, 355 207 785 $15, 853 391 1,386 $11,671 295 966 $12, 482 322 1,044 $37, 598 943 3,165 $76, 272 1,864 6,769 47 13 136 1 13 86 31 258 2 27 149 62 498 7 55 106 44 357 5 38 112 45 368 5 35 254 119 1,144 21 96 420 283 2,423 50 172 1,181 598 5,201 93 438 7 1 4 13 8 10 9 15 9 9 18 9 29 76 30 60 170 100 165 217 417 801 1,770 3,678 8,097 35 26 4,645 7,973 53 52 6,262 15, 386 84 111 8,505 31,295 140 285 11,781 71,797 231 550 19,456 121,039 658 1,202 61,601 295, 765 128 264 (t) (t) (t) (t) 6 3 1,111 1,100 11 (t)10 (t) Total current operating expenses $10.1 to $25.0 $562 25 82 22 Net current operating earnings Recoveries, transfers from valuation reserves, and profits: On securities: Profits on securities sold or redeemed Recoveries Transfers from valuation reserves $5.1 to $10.0 393 Total current operating revenue Current operating expenses: Salaries and wages: * Officers Employees other than officers Number of officers * Number of employees other than officers 2 Officer and employee benefits—pensions, hospitalization, social security, insurance, etc Fees paid to directors and members of executive, discount, and other committees Interest on time and sayings deposits Interest and discount on borrowed money Net occupancy expense of bank premises Furniture and equipment—depreciation, rents, servicing, uncapitalized costs, etc Other current operating expenses $2.1 to $5.0 IB U) 56 87 5,237 24, 057 180 53 88 4,604 23, 118 176 50 23 18 18 60 (t) 18 217 1 36 4 159 1 28 3 165 1 27 5 437 5 76 10 49 21 98 15 71 17 72 52 209 83 348 6 111 3 1, 103 11 151 4,569 $167, 104 4,185 14, 688 132 33 2,250 19 347 204 879 165 310 597 439 445 1,269 2,609 5,856 52 107 204 145 156 501 1,069 2,240 19 43 2 39 IS U) (t) I (t) 32 On loans: Recoveries Transfers from valuation reserves All other 1 Total recoveries, transfers from valuation reserves, and profits Losses, chargeoffs, and transfers to valuation On securities: T osses on securities sold . . . Chargeoffs on securities not sold Transfers to valuation reserves On loans: Losses and chargeoffs Transfers to valuation reserves All other 1 1 1 2 1 4 1 2 2 3 4 15 1 4 7 14 9 9 31 1 2 1 3 1 2 3 4 6 4 14 4 3 32 1 24 1 (t) 8 11 29 19 56 92 167 28 32 49 4 41 79 (t)182 13 362 14 46 81 reserves: ... (t) (t) (8 ,,,. .... 1 1 U) Total losses, chargeoffs, and transfers to valuation reserves Net income before related taxes Taxes on net income: Federal State 2 2 (t) tt) (t) 6 (1) 9 24 (t) 6 4 (t) (t) 2 12 25 47 34 34 108 289 551 6 43 90 171 120 131 424 872 1, 856 1 11 1 24 2 50 3 39 2 43 2 145 8 264 35 578 51 (t) Total taxes on net income 3 U) 1 12 26 53 41 45 153 299 629 Net income before dividends 3 4 32 64 119 79 86 268 565 1,216 On common stock On preferred stock 2 0 12 23 128 310 1 590 1 2 12 23 45 33 36 128 311 591 3 19 40 74 46 50 140 254 625 2 1 3 2 1 10 7 3 2 74 52 21 11 1 40 . 74 1 34 15.79 8. 35 4. 59 15. 25 8. 28 4. 02 Total cash dividends declared Net income after dividends Average per bank: Gross current operating revenue Current operating expenses Net current operating earnings Net income before dividends (8 Per $100 of deposits: U) Net income before dividends Per SI00 of capital accounts: Net current operating earnings Net income before dividends Cash dividends 1 (t) tt) 45 (t) 1 1 il] il] 18 (8 U) (t) 33 ($) (t) 36 (t) (t) (t) 76 68 1 25 . 69 1 33 74 1 29 " 75 1 24 75 8. 32 5 18 2.05 10.62 6 49 2.51 13.60 8 09 2.97 14.72 8 56 3.23 14.99 8. 17 3.42 14. 91 8.21 3.47 15. 83 8.47 4.06 1 21 Excludes building employees. Number at end of year. 3 After deduction of interest paid on capital notes and debentures. JLess than $500,000. 2 (t) 1 21 1 28 .71 2 1 (J) (i) .73 NOTE : The deposits, capital stock, and capital accounts shown in this table are as of December. Capital accounts represents the aggregate book value of capital stock, surplus, undivided profits, reserves, and retirement fund for preferred stock. TABLE B-25.—Current operating revenue, expenses, and dividends of national banks, years ended Dec. 31, 1963 and 1964 [Dollar amounts in thousands] 1963 Number of banks * Capital stock, par value * Capital accounts 2 ... 4,615 4,773 $3, 886, 042 $13,102, 085 $4,163, 070 $14, 297, 834 Amount Current operating revenue: Interest and dividents on: U S Government obligations Other securities Interest and discount on loans Service charges and other fees on banks' loans Service charges on deposit accounts Other service charges, commissions, fees, and collection and exchange Other current operating revenue Total current operating revenue Current operating expenses: Salaries and wages: Officers Employees other than officers Number of officers * Number of employees other than officers 1 . ... . . Officer and employee benefits—pensions, hospitalization, social security insurance etc . . . . . . Fees paid to directors and members of executive, discount, and other Interest on time and savings deposits Interest and discount on borrowed money Furniture and equipment—depreciation, rents, servicing, uncapitalized costs etc . . . . Other current operating expenses Total current operating expenses Recoveries, transfers from valuation reserves, and profits: On securities: Profits on securities sold or redeemed . Total recoveries, transfers from valuation reserves, and profits.... See footnotes at end of table. 232 Percent distribution Amount Percent distribution $1,171,285 504, 854 4, 621, 556 83, 090 408, 787 16.04 6.91 63.29 1.14 5.60 $1,189,736 601, 677 5, 232, 386 93, 734 441, 409 14.60 7.38 64.22 1.15 5.42 113,394 260, 970 138, 535 1. 55 3.57 1.90 133 259 290, 331 165,166 1 64 3.56 2.03 7, 302, 471 100. 00 8,147, 698 100. 00 607, 954 1,131,033 11.63 21.63 664, 841 1, 210, 766 11.26 20.50 58, 238 287, 498 62, 775 300, 976 242, 598 4.64 31,014 1, 917, 349 19, 576 313,563 . 59 36.67 .37 6.00 173, 699 791, 979 3.32 15.15 5, 228, 765 100. 00 ' 2, 073, 706 Net current operating earnings Transfers from valuation reserves On loans: Recoveries . .. Transfers from valuation reserves 1964 266, 022 4.51 447 724 526 823 .57 38.32 .33 5.94 206, 210 890, 354 3.49 15.08 5,904,713 100. 00 33 2,262, 19, 350, 2, 242, 985 88, 053 2,340 44, 764 29.98 .77 14.74 43, 318 1 564 39,214 25.69 .93 23.25 8,062 105, 038 55, 537 2.65 34.58 18.28 7,640 19,288 57, 599 4.53 11.44 34.16 303, 794 100. 00 168, 623 100. 00 T A B L E B--25.—Current operating revenue, expenses, and dividends of national banks, years ended Dec. 31, 1963 and 1964—Continued [Dollar amounts in thousands] 1964 1963 Percent distribution Losses, chargeoffs, and transfers to valuation reserves: On securities: Losses on securities sold Chargeoffs on securities not sold Transfers to valuation reserves On loans: Losses and chargeoffs Transfers to valuation reserves All other Total losses, chargeoffs, and transfers to valuation reserves Net income before related taxes Taxes on net income: Federal State Percent distribution $27, 750 6,306 39, 259 5.74 1.30 8.12 $49, 738 4,442 41, 340 8.93 .80 7.42 12, 527 329, 596 68,119 2.59 68.16 14.09 13,465 365, 585 82, 370 2.42 65. 64 14.79 100 00 483, 557 556, 940 1, 893, 943 1, 854, 668 637, 099 50, 927 579, 742 51,430 631,172 688, 026 Total taxes on net income. Amount 1,213,2843 1,205,917 Net income before dividends On preferred stock Total cash dividends declared Net income after dividends Occupancy expense of bank premises: Salaries and wages: Officers Employees other than officers. Number of officers * Number of employees other than officers * Building officer and employee benefits Recurring depreciation on bank premises and leasehold improvements Maintenance, repairs, and uncapitalized alteration costs of bank premises and leasehold improvements Insurance, utilities (heat, light, and water), etc Rents paid on bank premises Taxes on bank premises and leasehold improvements Gross occupancy expense. Less: Rental income from bank premises Other credits Total Net occupancy expense. 591,491 1,319 547, 060 1,126 Gash dividends declared:: On common stock , , 548,186 592, 810 657, 731 620, 474 1,186 50, 048 .29 12.22 1,485 52, 831 .33 11.71 166 16, 978 152 16,814 5,998 1.47 6,268 1.39 75, 058 18.33 81,760 18.12 51,333 68, 435 94, 717 62, 682 12.54 16.71 23.13 15.31 56,140 74, 593 110,149 67, 963 12.44 16.53 24.42 15.06 409, 457 100. 00 451,189 100. 00 92, 204 3,690 22.52 .90 96, 468 3,898 21.38 .86 95, 894 23.42 100, 366 313, 563 76.58 350,823 77.76 See footnotes at end of table. 233 TABLE B-25.—Current operating revenue, expenses, and dividends of national banks, years ended Dec. 31, 1963 and 1964— Continued [Dollar amounts in thousands] 7963 Amount Memoranda items: Recoveries credited to valuation reserves (not included in recoveries above): On securities On loans Losses charged to valuation reserves (not included in losses above): On securities On loans Stock dividends (increases in capital stock) Ratios to current operating revenue: Salaries wages and fees * Interest on time and savings d e p o s i t s . . . . . All other current expenses Total current expenses . .... Net current earnings Ratio of cash dividends to capital stock (par value) Ratio of cash dividends to capital accounts 1 Number at end of period. Remaining figures include earnings, expenses, etc., of banks which were in operation a part of the year but were inactive at the close of the year. 2 Figures are averages of amounts reported for the June and December call dates in the year indicated and the December call date in the previous year. 3 After deduction of $10.2 million, interest paid on capital notes and debentures. 4 Exclusive of building employees. Percent distribution Amount $5, 306 60, 402 $2, 553 105, 995 11,867 177, 661 126, 085 32, 320 225, 854 153,497 Percent distribution 24.24 26.25 21.11 27.77 21.27 71.60 72.47 28.40 27.53 14. 11 4.18 14.24 4.15 NOTE: Earnings and dividends figures for 1869 to 1937 were published for the years ended Aug. 31 or June 30 and appear in the table beginning on p. 96 of the Comptroller's Annual Report for 1937. Similar figures for 1938 through 1941 appear in table 26 on p. 136 of the 1941 report. Calendar year figures are available, beginning with the year 1917 and are published in the Comptroller's reports as follows: 1938, p. 100; 1940, p. 17; 1942, p. 34; 1943, p. 30; 1946, p. 98; 1949, p. 100; 1951, p. 118; 1954, p. 142; 1957, p. 152; and I960, p. 217. r 234 1964 Revised from 1963 Annual Report. T A B L E B—26.—Number of national banks, capital stock and accounts, net profits, dividends, and ratios to capital accounts, years ended Dec. 31, 1944-64 [Dollar amounts in thousands. For earlier data, see Annual Reports of the Comptroller of the Currency, 1938, p . 115, and 1963, p. 306] Capital stock (par value) Tear Number of banks Preferred 1944 1945 1946 1947 1948 1949 1950 1951 1952 1953 1954 1955. 1956 1957 1958. 1959 1960 1961 1962 1963 1964 l 5,031 110,597 5,023 80, 672 5,013 53, 202 5,011 32, 529 4, 997 25, 128 4,981 20, 979 4,965 16,079 4,946 12, 032 4,916 6, 862 4,864 5,512 4,796 4,797 4,700 4,167 4, 659 3,944 4,627 3,786 4,585 3,332 4, 542 3, 225 4, 530 2.050 4, 513 2, 040 4,503 9, 852 4,615 24, 304 4,773 27, 281 Cash dividends Common Total Total capital accounts * $1, 440, 519 1, 536, 212 1, 646, 631 1, 736. 676 1, 779, 362 1, 863, 373 1, 949, 898 2,046,018 2, 171, 026 2, 258, 234 2, 381, 429 2, 456, 454 2,558, 111 2,713, 145 2,871,785 3, 063, 407 3, 257, 208 3, 464, 126 3, 662, 603 ' 3,861,738 4, 135,789 $1, 551, 116 1,616,884 1, 699, 833 1, 697, 205 1, 804, 490 1, 884, 352 1,965,977 2, 058, 050 2, 177, 888 2, 263, 746 2, 386, 226 2, 460, 621 2, 562, 055 2,716,931 2,875,117 3, 066, 632 3, 259, 258 3, 466, 166 ' 3, 672, 455 3, 886, 042 4, 163, 070 $4, 114, 972 4,467,718 4, 893, 038 5, 293, 267 5, 545, 993 5,811,044 6, 152, 799 6, 506, 378 6, 875, 134 7, 235, 820 7, 739, 553 7,924,719 8, 220, 620 8, 769, 839 9,412,557 10,003,852 10, 695, 539 11,470, 899 12, 289, 305 13,102,085 14, 297, 834 Net profits before dividends $411,844 490, 133 494, 898 452, 983 423, 757 474, 881 537, 610 506, 695 561,481 573, 287 741,065 643, 149 647, 141 729, 857 889, 120 800, 311 1,046,419 1, 042, 201 1, 068,843 1, 205, 917 1, 213, 284 1 These are averages of data from the Reports of Condition of the previous December and the current J u n e and December of the respective year. On preferred stock On common stock $5, 296 4, 131 2, 427 1,372 1, 304 1,100 712 615 400 332 264 203 177 171 169 165 99 119 202 1, 126 1,319 $139,012 151,525 167, 702 182, 147 192, 603 203, 644 228, 792 247, 230 258, 663 274, 884 299, 841 309, 532 329, 777 363, 699 392, 822 422, 703 450, 830 485, 960 517,546 547, 060 591,491 Ratios Cash dividends on preferred stock to preferred capital Cash dividends on common stock to common capital Percent A.19 5. 12 4.56 4.22 5. 19 5.24 4. 43 5.11 5. 83 6.02 5. 50 4.87 4. 49 4.52 5.07 5. 12 4.83 5. 83 2.05 4. 63 4.83 Percent 9. 65 9.86 10. 18 10. 49 10. 82 10.93 11.73 12.08 11.91 12. 17 12. 59 12.60 12.89 13. 41 13. 68 13.80 13. 84 14.03 14. 13 ' 14. 17 14. 30 * Revised from 1963 Annual Report. Net profits before Total cash dividends dividends to capital accounts To capital To capital stock accounts Percent 3.51 3.48 3.48 3.47 3. 50 3.52 3.73 3.81 3.77 3.80 3. 88 3.91 4. 01 4. 15 4. 18 4.23 4.22 4. 24 4.21 4. 18 4. 15 Percent 26. 55 30.31 29. 11 25. 60 23. 48 25. 20 27.35 24. 62 25.78 25. 32 31. 06 26. 14 25.26 26.86 30.92 26. 10 32. 11 30.07 29. 10 ' 31. 03 29. 14 Percent 10.01 10. 97 10. 11 8.56 7. 64 8. 17 8.74 7.79 8. 17 7. 92 9. 58 8. 12 7.87 8. 32 9. 45 8. 00 9. 78 9. 09 8.70 9. 20 8. 49 TABLE B-27.—Total loans of national banks, losses and recoveries on loans, and ratio of net losses or recoveries to loans, by calendar years, 1945—64 [Dollar amounts in thousands] Year 1945 1946 1947 1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 Total loans end of year .... Average for 1945-64 1 2 Losses and chargeoffs Recoveries Ratio of net Net losses or losses or net recoveries ( + ) recoveries ( + ) to loans $13, 948, 042 17, 309, 767 21, 480, 457 23,818,513 23, 928, 293 29, 277, 480 32, 423, 777 36,119,673 37, 944,146 39, 827, 678 43, 559, 726 48, 248, 332 50, 502, 277 52, 796, 224 59, 961, 989 63, 693, 668 67, 308, 734 75, 548, 316 83, 388, 446 95, 577, 392 $29, 652 44, 520 73. 542 1 50, 482 1 59, 482 1 45, 970 1 53, 940 1 52, 322 1 68, 533 1 67,198 1 68, 951 1 78 355 1 74, 437 1 88, 378 1 80, 507 181,683 164, 765 157, 040 190,188 239, 319 $37, 392 41,313 43, 629 2 31,133 2 26, 283 2 31, 525 2 31,832 2 32, 996 2 36 332 2 41, 524 2 39, 473 2 37 349 2 39, 009 2 50, 205 2 54} 740 2 51,506 2 52 353 2 59,423 2 68, 464 2 113,635 + $7,740 3,207 29,913 19, 349 33,199 14, 445 22,108 19, 326 32 201 25, 674 29, 478 41 006 35, 428 38,173 25, 767 130,177 112 412 97, 617 121, 724 125, 684 45, 833,147 93, 463 46, 006 47, 457 Percent + 0.06 .02 .14 .08 .14 .05 .07 .05 08 .06 .07 08 .07 .07 .04 .20 17 .13 .15 .13 .10 NOTE.—For earlier data, see Annual Report of the Comptroller of the Currency, 1947, p. 100. Excludes transfers to valuation reserves. Excludes transfers from valuation reserves. TABLE B-28.—Total securities of national banks, losses and recoveries on securities, and ratio of net losses or recoveries to securities, by calendar years, 1945-64 [Dollar amounts in thousands] Total securities end of year Tear 1945 1946 1947 1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 I960 1961 1962 1963 1964 . . ... Average for 1945—64 1 2 Excludes transfers to valuation reserves. Excludes transfers from valuation reserves. 236 .... Losses and chargeoffs Recoveries Met losses or Ratio of net recoveries ( + ) losses to securities $55,611,609 46, 642, 816 44, 009, 966 40, 228, 353 44, 207, 750 43, 022, 623 43,043,617 44, 292, 285 44, 210, 233 48, 932, 258 42, 857, 330 40, 503 392 40,981 709 46, 788, 224 42, 652, 855 43,852,194 49, 093, 539 51, 705, 503 52, 601, 949 54, 366, 781 $74, 627 74, 620 69, 785 1 55, 369 1 23, 595 1 26, 825 1 57, 546 1 76, 524 1 119,124 1 49, 469 1 152, 858 1 238, 997 1 151,152 1 67, 455 1 483, 526 1 154,372 1 51,236 i 47; 949 1 45, 923 1 86, 500 $54,153 33,816 25, 571 2 25, 264 2 7,516 2 11,509 2 6, 712 2 9, 259 2 8, 325 2 9. 286 2 15. 758 2 1 3 027 2 5 806 2 12, 402 2 18, 344 2 21,198 210 604 2 6, 350 2 7, 646 2 4,117 $20, 474 40, 804 44, 214 30,105 16,079 15,316 50, 834 67,265 110,799 40,183 137,100 225 970 145 346 55, 053 465,182 133,174 40, 632 41,599 38,277 82, 383 45, 980, 249 105, 373 15, 333 90, 040 Percent 0.04 .09 .10 .07 .04 04 .12 .15 .25 .08 .32 56 .35 . 12 1.09 .30 .08 .08 .07 .15 .20 NOTE.—For earlier data, see Annual Report of the Comptroller of the Currency, 1947, p. 100. TABLE B-29.—-Foreign branche s of national banks3 by region and country, Mar. 37, 1965 Region and country Latin America Number • 68 I Argentina Bahamas Brazil Chile Colombia Dominican Republic . . Ecuador El Salvador Guatemala. Jamaica Mexico Nicaragua Panama . . . . . Paraguay Peru Uruguay Venezuela 17 1 15 2 5 1 2 1 2 1 5 1 5 2 2 2 4 Continental Europe: Belgium Germany Greece Italy Netherlands Africa 1 Nigeria 1 Near East 4 Lebanon Saudi Arabia Dubai 2 . Far East 1 1 36 Hong Kong India 5 5 10 5 1 Japan Malaysia Pakistan Philippines 2 5 2 12 Thailand 1 1 2 3 1 1 3 U.S. overseas area 14 1 1 Canal Zone Guam Puerto Rico Truk Islands 11 1 Total England Number Region and country 144 9 TABLE B-30.—Foreign branches of national banks, 1955-64 End of year 1955 1960. 1961 1962. 1963 1964 , National bank branches as a Number of branches operated percentage of total foreign by national branches of banks U.S. banks 85 93 102 111 124 138 76.6 75.0 75.6 76.6 77.5 76.7 T A B L E B—31.—Assets and liabilities of foreign branches of national banks, Dec. 31, 1964: consolidated statement 1 [Dollar amounts in thousands] 138 LIABILITIES Number of branches Demand deposits of individuals, partnerships, and corporations .. . $730, 761 Time and savings deposits of individuals, partnerLoans and discounts $1, 924, 827 ships, and corporations 1,178, 987 Securities... 178, 958 Deposits of U.S. Government 190, 932 Currency and coin.. 31, 331 State and municipal deposits 12, 988 Balances with other banks and cash items in procDeposits of banks 753, 791 ess of collection 480, 730 Other deposits (certified and officers' checks, etc.). 21, 468 Due from head office and branches 320, 858 Total deposits 2, 888, 927 Fixed assets ?8, 352 Customers' liability on acceptances 304, 362 Due to head office and branches 8, 591 Other assets 50, 461 Rediscounts and other liabilities for borrowed money 61? 015 3, 319, 879 Acceptances executed by or for account of reportTotal assets ing branches and outstanding 305, 481 1 Other liabilities 55,865 Excludes figures for banking facilities at military establishments. Total liabilities 3,319,879 237 TABLE B—32.—Assets and liabilities of all national banks, date of last report of condition, December 1936-64 [Dollar amounts in thousands] Number of banks 1936... 1937... 1938... 1939... 1940... 1941... 1942... 1943... 1944... 1945... 1946... 1947... 1948... 1949... 1950... 1951... 1952... 1953... 1954... 1955... 1956... 1957... 1958... 1959... 1960... 1961... 1962... 1963... 1964... Loans and discounts including overdrafts 5,331 88, 271, 120 813,547 5,266 489, 120 5,230 5,193 9,043, 632 5, 150 10, 027, 773 5,123 H, 751,792 5,087 10, 200, 798 5,046 10, 133,532 5, 031 11, 497, 802 5,023 13, 948, 042 5,013 17, 309, 767 5,011 21, 480, 457 4,997 23, 818,513 4,981 23, 928, 293 4,965 29, 277, 480 4,946 32, 423, 777 4, 916 36, 119,673 4,864 37, 944, 146 4,796 39, 827, 678 4,700 43, 559, 726 4, 659 48, 248, 332 4,627 50, 502, 277 4,585 52, 796, 224 4, 542 59, 961,989 4,530 63, 693, 668 4,513 67, 308, 734 4, 505 75, 548, 316 4. 615 83. 388. 446 4,773 *95', 577; 392 1 U.S. Goveminent obligations, direct and guaranteed Other bonds, stocks, and securities $8, 685,554 094, 490 8, 072,882 690, 122 8, 705,959 753, 234 9, 073,935 737, 641 9, 752,605 915,435 12, 073, 052 814,456 23, 825, 351 657, 437 34, 178, 555 325, 698 43, 478, 789 543, 540 51, 467, 706 143, 903 41, 843, 532 799, 284 38, 825, 435 184,531 248, 090 34, 980, 263 937, 227 38, 270, 523 331, 063 35, 691, 560 887, 274 35, 156, 343 355, 843 35, 936, 442 621, 470 35, 588, 763 425, 259 39, 506, 999 166, 524 33, 690, 806 823, 307 31, 680, 085 643, 633 31, 338, 076 963, 464 35, 824, 760 891, 885 31,760, 970 140, 471 32,711, 723 005, 861 36, 087, 678 042, 255 35, 663, 248 218,063 33. 383. 886 33, 537, 250 |20, 829, 531 Cash $518, 503 422, 490 555, 304 615, 698 718,799 786, 501 733, 499 807, 969 904, 500 1, 008, 644 1, 094, 721 1, 168, 042 1,040,763 1,059,663 1, 147, 069 1,418,564 1,446, 134 1, 292, 254 1, 279, 171 1, 388, 250 1, 706, 507 1, 734, 533 1, 675, 827 1, 521, 334 1,721,492 1, 923, 655 2, 277, 621 2, 178, 563 2, 481, 563! Balances with other banks 1 462, 578 128,003 151, 105 887,915 401, 268 215,429 516,771 272, 695 732, 749 170, 145 972, 446 907, 548 983, 506 985, 295 666, 366 593, 594 953, 269 253, 264 442, 726 375, 190 375, 990 130, 601 188,993 942,911 953,014 154,790 405, 959 455, 937 584, 291 Includes reserves balances and cash items in process of collection. Includes reserve accounts. NOTE: Reciprocal interbank demand balances with banks in the United States are reported net beginning with the year 1942. NOTE: For earlier data, revised for certain years and made comparable to those 2 Other assets Total assets , Capital Surplus and undivided profits $1, 032, 327 $31, 064, 662 104, 230 977, 186 666, 177 1,011,455 960, 436 319, 257 918,082 733, 962 897, 004 538, 234 847, 122 780, 978 813, 468 531, 917 792, 479 949, 859 797, 316 535, 756 830,513 850, 263 447, 000 880, 987 1, 063,917 135, 052 239, 179 1, 058, 178 1, 126; 555 97, 240, 093 1, 259, 008 102, 738, 560 1, 321, 382 108, 132, 743 1, 416, 802 110, 116, 699 1, 668, 736116, 150, 569 1,569,791 113, 750, 287 1, 867, 761 117, 701, 982 2, 173, 520 120, 5223 640 2, 347, 698 128, 796, 966 2, 557,024 132,636, 113 3, 040, 499139, 260. 867 3, 328, 334 150,809, 052 3,719, 607160, 657, 006 5, 608, 468 170, 233, 363 6, 102, 6781190, 112, 2 Total deposits Bills payable and rediscounts, etc. Other liabilities $1,598,815 $1 572, 195 $27 608, 397 $3, 495 $281,760 540, 694 10,839 308, 499 666, 367 1 577,831 050, 676 5,608 757, 522 1, 570, 622 28,749 612,992 2,882 298, 265 532,903 872,215 1, 852, 424 3, 127 009, 161 1, 527, 237 342,013 554, 772 3,778 133, 305 1, 515,794 330, 585 648, 616 3,516 234, 673 1, 503, 682 390, 291 156,181 8, 155 408, 139 531, 515 427, 927 1, 128,937 54, 180 491,877 707, 960 1, 566, 905 242, 947 77, 969 996, 898 1, 658, 839 559, 103 049, 839 20, 047 630, 578 393, 178 1, 756, 621 275, 356 45, 135 705, 185 779, 766 641,558 1, 648,016 41, 330 774, 818 842, 129 1, 828,759 344, 318 7, 562 952, 958 018, 001 1, 916, 340 529, 632 76, 644 1 , 304, 828 327, 339 2, 001, 650 431, 561 15,484 105, 345 564,773 ,621, 397 2, 257, 776 834, 369 75, 921 1, 739, 825 2, 224, 852 947, 233 107, 759 14,851 1, 745, 099 2, 301, 757 618, 398 106. 145, 813 11,098 1, 889,416 2, 485, 844 463, 305 104, 217,989 107, 796 ,488,573 2, 472, 624 834, 024 107, 494, 823 18, 654 ,716,373 2, 638, 108 287,004 109.436, 311 38, 324 1 , 954, 788 2, 806,213 717,522 117 086, 128 43,035 , 999, 002 2, 951, 279 132, 375 119, 637, 677 340, 362 :, 355, 957 3, 169,742 755,488 124, 910, 851 110, 5903;1, 141,088 3, 342, 850 298, 062 135, 510,617 224, 615 3;1,198,514 3, 577, 244 992, 104 142, 824, 891 , 635, 593 . , 446, 772 3, 757, 646 3. 518,935 150;823,412 4, 029, 243 395, 201 1, 466, 572 4, 789, 943 10, 258, 252 169. 616, 780 299, 308 ., 148, 422 in this table, references should be made as follows: Years 1863 to 1913, inclusive, Comptroller's Annual Report for 1931; figures 1914 to 1919, inclusive, report for 1936, and figures 1920 to 1939, inclusive, report for 1939. *This does not include Federal funds sold. f This does not include corporate stocks. APPENDIX C Addresses and Selected Congressional Testimony of JAMES J. SAXON Comptroller of the Currency INDEX Addresses and Selected Congressional Testimony of James J. Saxon, Comptroller of the Currency Date and Topic October 26, 1964, "Toward a Stronger Dual Banking System": remarks before the National Bank Division, American Bankers Association, Miami Beach, Fla Page 241 March 9,1965, before the Senate Permanent Subcommittee on Investigations, on chartering policies, bank failures, operating powers, and disclosure 243 April 26, 1965, before the House Banking and Currency Committee, on the underwriting of revenue bonds 246 April 30,1965, before the Subcommittee on Bank Supervision of the House Committee on Banking and Currency* on the bank regulatory structure June 30, 1965, before the House Banking and Currency Committee, on the operating powers of National Banks 247 248 240 REMARKS OF JAMES J. SAXON, COMPTROLLER OF THE CURRENCY, BEFORE THE NATIONAL BANK DIVISION, AMERICAN BANKERS ASSOCIATION, MIAMI BEACH, FLA., OCTOBER 26, 1964 Toward a Stronger Dual Banking System For the past 3 years we have been reexamining and recasting the rules and regulations applied to National Banks in the light of today's needs and opportunities. Several advisory committees have assisted us in this effort, and we have had recommendations for action from National Banks throughout the country. One central theme has appeared persistently throughout our review of existing policies. From all segments of the banking industry, in every section of the country, we had protests that bank initiative was being hampered in many ways without any supportable public purpose to justify the restrictions. The objections took a variety of forms and touched virtually every major phase of bank regulation. In the reforms we have undertaken and advocated, we have had one paramount objective. This objective has been to leave bank operations to bankers unless restrictions are required in order to safeguard the solvency and liquidity of the banking system. The goal is to release the full energy and initiative of the banking industry in the service of the community and the Nation. This was a novel approach to bank regulation, in contrast with the climate which prevailed for many years in the banking industry and among bank regulators. In principle, there had always been extensive reliance on private initiative in banking. In practice, however, the regulatory authorities had for many years treated the banking industry much as a group of unruly children who needed daily guidance and periodic scolding or finger-shaking. These disciplinary measures were regarded as necessary, not only by the parent chartering agencies, but also by anxious relatives in other governmental departments. Some of this attitude survives today, but there has been a notable and growing acceptance of the need and the capacity of the banking industry to operate more fully under our traditional, standards of individual responsibility and competitive enterprise. As the reins of public control have been loosened, a remarkable transformation has taken place throughout the banking industry. Armed with broader discretionary powers, the banks have met the challenge of opportunity with a sharpened sense of responsibility and a surge of new initiative. This transformation has not come easily, or quickly. The new powers had to be tested and appraised, and a change of outlook had to be developed. The underlying strength and force of the banking industry is evident in the growing confidence of the banks, and in their expanding initiative, and they have experimented in the broader fields opened to them. This has been a highly commendable performance on all counts, and one in which the banking industry takes justifiable pride. The momentum which has been achieved must be sustained, and it should be further strengthened throughout the dual banking system. The attitudes and powers of bankers, the way in which they view their responsibilities and their opportunities, their vision and their initiative—all exercise a critical influence on the form, the pace, and the direction of our economic progress. The commercial banks today occupy a strategic position at the center of the business and industrial structure. To them is entrusted for productive use a major portion of the Nation's savings; they operate a check mechanism which represents a principal means of payment in the business life of the country; and, through their powers of credit creation, they provide one of the most significant sources of financing for the new ventures which are so essential to the continuing growth and development of the economy. This crucial role of banks in the economy makes the regulation of banks of critical significance to the Nation's welfare. We live in a dynamic, pulsating society which is undergoing rapid change. Our population is expanding greatly, and we are striving to make the best use of the skills and talents of all our people. Population shifts have brought both urban and suburban problems, and we continue to struggle with the difficulties which prevail in our agricultural communities. Our markets are constantly broadening new methods and instruments of production and distribution are being introduced continually, and new products are coming on the market at a growing rate. International considerations continue to exert a major influence on our domestic policies. Our capacity to cope with these needs, to provide employment for our people and sustain a rising standard of living, to 241 strengthen our society and our economy, rest decisively on the financing facilities which are available to carry on the many new ventures which will be required. Both great segments of our dual banking system must share in these tasks and in this responsibility, and the public authorities who regulate the banks must be attuned to these vital needs. It is time we understood that there is no conflict of purpose in strengthening both the State and the National banking sytsems, and no conflict of interest between these two systems. Indeed, the highest level of performance is required both of State and National banks if the vast diversity of banking needs in individual markets throughout the country are to be met. There is no monopoly of wisdom, and there should be no monopoly of initiative, in responding to these needs. Independent dual banking systems, each functioning according to its own special standards and objectives, afford the best assurance that the essential requirements for banking services will be fully and efficiently served. It has been most encouraging to see that the reforms which have been undertaken within the National Banking System are being subjected to critical scrutiny and review by the State authorities and the State banks. We have taken the initiative in many respect to recast the structure of public control applied to National Banks, but there has been a steadily accelerating and highly constructive movement to undertake reforms at the State level. This process of strengthening the State banking systems would be greatly simplified if certain changes were brought about in the present regulatory structure. State banks are subject to regulation not only by the State authorities, but also in many areas by the Federal Reserve Board and the Federal Deposit Insurance Corporation. This multiplicity of regulation has operated to weaken the stature of the State banking authorities, and has hampered the full development of the State banks. I can see no valid reason for continuing this Federal intercession into the functioning of State banks, and I should like to suggest a means to overcome these disabilities now imposed on that segment of our banking industry. At the present time, no State bank which is a member of the Federal Reserve System may open a branch without the approval of the Federal Reserve Board as well as the State authorities. Where a merger is undertaken in which the resulting bank is to be a State member bank, a similar double approval is required. In addition to the State laws which they must observe, State member banks are also subjected to Federal Re242 serve controls of many of their basic deposit, lending and investment operations. The Federal Deposit Insurance Corporation exercises comparable controls over branching and mergers by insured State nonmember banks. Moreover, the State authorities today will not ordinarily charter a new bank unless it is approved for insurability by the Federal Deposit Insurance Corporation. A a result, the effective power to charter new State banks rests for all practical purposes with a Federal agency. Moreover, in order to qualify for continued insurability, a State bank must subject its operations to examination and supervision by the Federal Deposit Insurance Corporation. Together, these factors have had the effect of lodging critical powers over the life of State banks in Federal hands. Perhaps more significantly for the strength of the dual banking system, these all-pervasive Federal controls over State banks have operated to discourage the effective performance of bank regulation and supervision by the State authorities, and have tended to weaken the State banking systems. Federal intercession in the operation of State banking systems has, in my judgment, been founded on mistaken concepts of the proper roles of the monetary authority and the insuring authority in the conduct of bank regulation and bank supervision. There is no purpose of monetary policy which requires that the monetary authority should have regulatory power over commercial banks. It is not the operating policies and practices of banks, but the total supply of money and credit, which is the proper province of the monetary authority. Indeed, to allow the monetary authority to intercede directly in bank operations is to run the risk that banks will be hampered in their capacity to compete, and will fail to make the best allocation of the resources entrusted to them. It is equally inappropriate to impose insurance standards—particularly commercial insurance principles—in the public supervision and control of bank operations. The potential for mischief is most serious where the insuring agency has any power over bank expansion or the kinds of risks which banks may assume. There is a natural inclination for an insuring agency to minimize its losses by limiting the risks it accepts. But if this principle of cutting insurance losses were allowed to govern eligibility for deposit insurance, bank expansion and bank lending and investment operations which entail elements of risk or uncertainty could be effectively blocked. Enterprise and initiative in the banking industry could be paralyzed and the performance of the entire economy retarded. This is surely not the objective we have sought through our system of deposit insurance. A proposal I would propose that Federal regulatory powers over State banks, as distinct from those powers which are clearly essential to the conduct of monetary policy, should be transferred to the States. Such a transfer of regulartory power would encourage improved performance by the State authorities, and it would end the discriminatory treatment of State banks which results from the exercise of Federal authority. There is no regulartory objective which requires that State banks should be treated differently from National Banks with respect to deposit insurance. The chartering and branching decisions of the State authorities, and their exercise of the examinatory and supervisory functions., should have the same standing as comparable actions by the Comptroller of the Currency in qualifying banks both for initial and for continuing deposit insurance. Similarly, no discernible public purpose is served by requiring the approval of the Federal Reserve Board for the branching or merger of State banks. These decisions properly belong with the chartering authority which is charged with responsibility for shaping the banking structure. The complete divorcement of bank regulation from monetary controls would entail still broader modifications in the regulatory structure. The Federal Reserve Board now exercises certain regulatory powers over the operating policies and practices of National as well as State banks. Where these powers are not essential to the conduct of monetary policy, they should be transferred to the chartering authority, whether it be State or National. The plan which I have outlined is in sharp contrast with certain other proposals which have been advanced for reformation of the bank regulatory structure. One proposal which has attracted wide attention calls for the retention of all existing Federal powers over State banks, and provides that these Federal powers over State banks should be combined with Federal powers over National Banks and placed under the jurisdiction of a single new Federal agency. The consequence of this proposal would be to centralize in a monolithic new agency full control of the National Banking System and vital powers over all the State banking systems. If that proposal were adopted, the erosion of the stature of the State banking authorities would undoubtedly be accelerated, and the dual banking system as we now know it would be on its way out. What we need in banking is not greater centralization of authority, not more rigorous conformity to imposed rules of conduct, but enlarged freedom to respond to the challenge of the future. What we require is greater scope for enterprise and initiative, not a common mold into which we force the entire banking system. Under the inspiration of the new opportunities which have been unfolded, the banking industry has taken on new life and new vigor. A vital new image has been established which holds bright promise for the future. Once again, we have had a dramatic demonstration of the latent force of our private enterprise system. Our purpose now should be to make certain that this creative force in our society finds full expression throughout the dual banking system. BEFORE THE SENATE PERMANENT SUBCOMMITTEE ON INVESTIGATIONS, TUESDAY, MARCH 9, 1965 I should like to confine my opening remarks to a brief background statement which I hope will set banking policies in proper perspective. Three aspects of banking policy have attracted particular attention in recent months. These relate to the enlarged operating discretion of banks, the increase in bank population through new charters, and the disclosure of facts about bank operations and bank ownership and control. To appraise these policies fairly, we shall have to understand the place of the banking industry in the economy, and the purposes of bank regulation. The single fact to bear in mind throughout is that we live in a private enterprise economy. This means that we place primary reliance on the individual to choose his own occupation, to spend his income as he wishes, and to undertake such ventures as he cares to risk. The presumption is against governmental restriction of this free discretion unless there is a clear public need which the Government can satisfy better than the individual. These precepts have a particular bearing on the basis, and the bounds, of public regulation of banking. Under our public policy, we control entry into banking, and we place certain limits on the operating powers of bankers. In administering these restrictions, the banking agencies have certain discretionary authority. When we place this fact in the context of a basic public policy which favors individual initiative, it seems clear that the banking agencies should exercise their discretionary powers in a way which will avert needless impediments to the initiative and enterprise of the individual banker. 243 This is the principle we have followed in the reforms we have undertaken. Our aim has been to make the National Banking System a more effective servant of the people. We have sought this objective by enlarging the operating discretion of bankers, by responding more sensitively to the demands for additional banking facilities, and by pursuing a full disclosure policy. Our test in the case of operating powers has been whether a restriction of free discretion is required in order to preserve the solvency and liquidity of the banking system. Our test in the case of new facilities has been the public need for additional banking offices. We have pioneered programs of disclosure to shareholders and requirements for the reporting of changes in ownership and control. The reforms which we have introduced in the National Banking System are winning increasing support throughout the country as goals for the State banking systems. These efforts to modernize the other great segment of our dual banking system portend lively competition and effective participation in the growth and development of the Nation's economy. Chartering policy To understand chartering policy, we have to realize that bank entry is restricted by public authority. A bank charter is a license to do business, and without it no bank can be formed or operate. This is in clear contrast with the freedom of entry all of our citizens enjoy in the nonregulated industries. In many respects, the problem of entry is identical in all industries. Individuals have capital to invest and they seek the most profitable outlets for that capital. In our dynamic economy, the factors which affect market profitability are undergoing constant change. Incomes are rising, savings are increasing, our population is growing and shifting, demands are changing, new technologies are being developed, new products and services are being introduced, and new industries are springing up. New opportunities thus abound, but these changes bring uncertainty and risk. This is the nature of a free enterprise system. When a banking agency is presented with an application for a new charter, it faces much the same problems that confront any businessman who seeks to judge the prospects of a new market. The banking authorities can estimate the need and the profitability of proposed new banks, but they cannot resolve all doubts. There is, therefore, an unavoidable element of chance. There is also an inescapable necessity of choice. The responsibility of the banking agencies is not to bar bank entry, but to regulate it in accordance with the 244 public need. The demands for banking services do change, and private entrepreneurs do seek to respond to these changes. When individuals apply for bank charters, the banking authorities must rule on the applications. Failure to allow new facilities to be provided to meet changing consumer demands for banking services can defeat private initiative in meeting these demands. It is the responsibility of the banking authorities to see that this does not occur where there is a genuine need which can be profitably served. Bank failures The failure of several banks within the recent months has been linked, by some, with chartering policy. What is the public interest in the prevention of bank failures? The failure of an enterprise in any industry means that productive resources have been misdirected. In the nonregulated industries, there is no public effort to prevent failure. The assumption is that the public benefits of free initiative and enterprise will outweigh any wastage of resources which may result. In banking, there is greater public concern about failure. Confidence in the banking system is essential if banks are to perform effectively. But, there is an equal public necessity to assure that banking facilities expand as consumer demands change. The procedures for chartering new banks take account of both these considerations. In reviewing an application for a new National Bank charter, we carefully examine the market which the applicant proposes to serve, in order to determine the probable need for the additional facility. Charters are issued only where we conclude that such a need exists, and that the applicant is capable of satisfying that need profitably. There has been no instance of National Bank failure, certainly not in recent years, which can be traced to a miscalculation of the market opportunity. Before we approve a National Bank charter, we must also be satisfied of the character and competence of the proposed management to conduct the affairs of the bank. The single failure among the National Banks which were approved for chartering during the past 3 years may be traced to management deficiencies. The information at our disposal at the time of approval was favorable in that case as in the others. It is always difficult to anticiapte or to uncover deliberate misconduct, and the pattern of misconduct is not usually evident at the early stages. The record will show that prompt and decisive action was taken whereever misconduct was discovered. Operating powers There is a variety of public controls restricting bank competition for deposits which are the "raw materials" of banking, and for the loans and investments which are the "products" of banking operations. Some criticism has been directed against the enlarged competitive power of banks in both these respects under our program of banking reform. It is well to understand the implications of these views. The philosophy we have followed has been to repose greater trust and confidence in the discretion and judgment of the individual banker. This has been a calculated effort to instill a greater sense of responsibility, and a more enlivened spirit of enterprise, in the banking industry. In resting these new powers with bankers, we have understood that banks would become more venturesome. Indeed, this was our aim. Banking is not an industry which functions within itself. It occupies a central role in financing our growing economy. There is no way to take the risk out of banking without taking the risk out of the industry and commerce which it serves. There is the choice of withdrawing the banking system from participation in our national growth and development. But this is an empty choice, and one we cannot tolerate. The economy which banking serves is the vital product of generations of free enterprise. A banking system attuned to its needs must be no less enterprising. The most disturbing suggestion I have heard is that the banking agencieis should be responsible to prevent bankers from exercising poor judgment. Under the present system of bank examination and supervision, banking operations are subjected to careful and expert surveillance, and bank officials are apprised of the criticisms of bank examiners. Subsequent conduct in response to these criticisms is also closely observed and reported to bank officials. To go beyond this and require prior approval of bank loans and investments by public authorities, would fundamentally alter the relationship between the government and the banking industry. Indeed, it could communize and socialize the banking industry and, indeed, the entire economy without additional steps. It would entail government allocation of resources, a concept which is wholly repugnant to a private enterprise system. I cannot believe that anyone would seriously advocate this more intensive form of bank regulation. The course we have chosen—to place greater reliance on the initiative and enterprise of the individual banker—is the only course that is in keeping with our traditions. It is the only course that can as- sure the most effective participation of the banking industry in the Nation's progress. Disclosure and control The effective operation of a private enterprise system rests in no small degree upon informed producers, consumers, and investors. We have sought to bring this discipline of the market to bear on the banking industry through the measures we have instituted to require the disclosure of information to shareholders and reports on ownership and control of banks. Here again, to take the further step and require prior approval of ownership changes, would entail a fundamental change in the relationship between the government and the banking industry. Some facts I should like now to turn to some more mundane matters. A variety of figures are being cited as indicative of the rate of recent bank chartering. The implication has been that a vast expansion has taken place in the National Banking System at the expense of the companion State banking systems. While I do not believe that the wisdom of bank chartering policy can be judged by such a measure, I do believe that we should set the record straight on the facts. During the period 1952 through 1964, charters were issued to 1,166 new State banks and 661 new National Banks. For every year from 1952 through 1962, there were from two to four times as many new State banks chartered as there were National Banks. During the past 3 years, charters were issued to 434 new National Banks and 392 new State banks. This represents an average annual increase in bank population of less than 2 percent. There are also other interesting comparisons which may be made. During the period 1952 through 1964, the gross national product rose from $347 billion to $622 billion. This represented approximately an 80 percent increase. During this same period, bank capital rose from about $13 billion to about $28 billion, an increase of 114 percent; and bank assets rose from $189 billion to $340 billion, an increase of about 80 percent. The business-failure rate during this period ranged from 28.7 to 64.0 per 10,000 firms, while the bank-failure rate ranged from 0 to 5.2 per 10,000 banks. The high for the period in the case of banks was reached in 1964. It may be noted that the 1964 failure-rate for National Banks was 2.1 per 10,000 banks, whereas the failure-rate for State banks was 6.9 per 10,000 banks. 245 The future By any test, the banking industry has become a more effective, driving competitive force throughout the economy. There is a steady flow of new capital into banking, and earnings are being retained at a high rate for added strength in meeting the enlarged responsibilities and opportunities. Successful businessmen from other fields are being attracted to the industry in greater numbers, and have added new spirit and initiative to this ancient craft. Management competence throughout has reached new heights, and the banking industry is better prepared than ever before, both in spirit and in substance, to serve its vital function in furthering the Nation's growth and development. The future has never been so challenging nor so bright. BEFORE THE HOUSE BANKING AND CURRENCY COMMITTEE, MONDAY, APRIL 26, 1965 Mr. CHAIRMAN, MEMBERS OF THE COMMITTEE: I appear here today to express my views on commercial bank underwriting of revenue bonds. As was stated in the Economic Report to the Congress in January of this year, we must help our cities to develop the transportation, housing, and other facilities which they need. It is my view that this bill constitutes a most important contribution to this effort. Since the end of World War II, borrowing by state and local governments to finance such facilities has increased annually at an unprecedented pace. These needs have caused annual spending by State and local governments for goods and services to rise from an amount under $8 billion in 1941, to over $65 billion at this time. As a result, outstanding long-term obligations of State and local governments now total around $90 billion, and State and local governments sold over $10.5 billion of securities in 1964. In recent years, increasing reliance has been placed on the revenue bond as a means of financing by State and local governments. From negligible figures in the early 1930's, the annual amount of revenue bonds issued rose to about $500 million in the early post-World War II years. This figure has climbed to almost $4 billion in 1964. While in the late 1940's, revenue bonds accounted for less than 20 percent of new State and local bond issues sold, they have continued to increase and now account for almost 40 percent of State and local government financing. The use of revenue bonds for self-liquidating projects has been invaluable in helping State and local governments meet their financial needs. Indeed, 246 revenue bonds are, in many instances, the only practical way in which many an already overtaxed community may solve its pressing problems on a financial basis which is sound for both the issuing community and the bond investor. Revenue bond financing is therefore of tremendous importance to both State and local governments. Any measure which would lower the cost of such financing would be of significant benefit to these governments. It is our belief that H.R. 7539 will afford substantial savings to State and local governments and ultimately to their taxpayers. It would increase competition in the bidding for and distribution of revenue bonds. It would broaden and strengthen the market for revenue bonds. The resulting enlarged market would enhance their attractiveness as investments. Even small banks, intimately familiar with the needs of their communities, could provide essential assistance in the preparation and marketing of revenue bond issues of their communities. Throughout the country, investors, who customarily rely on their bank for information concerning tax-exempt securities, would become more interested in sound revenue bonds. Finally, permitting the banks to trade in and make markets in revenue bonds would improve their marketability and character as liquid investments suitable for bank portfolios and fiduciaries generally. Commercial banks have the facilities and capabilities needed to make markets in many of the smaller revenue bond issues. Opponents have argued that the only saving to the borrowing governments, resulting from this increased competition, would be a slight reduction in "spreads," that is, the difference between the price the underwriters pay for an issue of bonds and the price at which they sell it to the investor. Even if we assume this argument is valid, such a saving would be substantial and significant when multiplied by the billions of dollars of revenue bonds being issued annually. There is an even more basic flaw in this argument. Its advocates assume that a presumption exists in favor of the existing competitive restrictions. They demand proof that benefits would result from removing the restrictions rather than beginning with the presumption that restrictions on competition are unwarranted unless they can be justified by overriding public interest considerations. Their method of approval is contrary to the fundamental premises of our American philosophy. We have seen absolutely no evidence that it is in the public interest to deny commercial banks greater competitive latitude in this area. This bill would not substantially increase the risks incurred by commercial banks. It would permit them to deal in and underwrite only the same types of securities which they are at present allowed to purchase for their own accounts. No bank, therefore, would be allowed to purchase for underwriting any security which it may not presently buy for its own investment account. Moreover, the bill would limit the total amount of securities of any one issuer which a bank could hold at any one time, whether as a result of an underwriting transaction or in its dealer or investment accounts, to a total amount not in excess of 10 percent of the bank's capital stock and surplus. Accordingly, under this bill, no bank could acquire investment securities of lesser quality or in greater amount than that which it is now permitted to acquire for its investment portfolio. There is in fact less risk in underwriting, a typically short-term transaction, than there is in investing, as that term is ordinarily used. It has been suggested that there is a danger of conflicts of interest between the underwriting function and the deposit, investment, and trust functions of banks. It is contended, for example, that banks underwriting securities would have an interest in selling these securities to depositors and correspondents and that such interest would impair the ability of those banks to give disinterested advice. Firstly, it should be noted that the increased knowledge concerning the issuer and the market, which an underwriting bank would have, would greatly enhance its ability to give accurate and helpful investment advice. Secondly, it should be recognized that the business of providing correspondent services, of which investment portfolio advice is but a part, is a highly competitive one. It is unrealistic to contend that an underwriting bank could recommend inferior securities to its customers because of its having underwritten such securities. The threat of losing its correspondents and their deposit accounts in a highly competitive atmosphere will afford adequate assurance that the underwriting bank will give the best possible advice to its correspondents. The opponents suggest that commercial banks might be tempted to sell securities which they have underwritten to their trust accounts. They cite no evidence of such self-dealing on the part of commercial banks engaged in underwriting general obligations and there has been no reason given as to why this problem will suddenly exist in the case of revenue bonds. However, any such possibility has been obviated by the bill itself, which provides that the purchase of revenue bonds by a bank as fiduciary from itself as an underwriter or dealer shall not be permitted, unless lawfully directed by court order. Even without this amendment, any such possibility is obviated by the provisions of our regulation 9 and by applicable examination procedures of this Office. Regulation 9 was issued in execution of our general supervision of trust departments of National banks and expressly prohibits the use of fiduciary funds to purchase property or obligations from the bank unless lawfully authorized by the governing instrument, by court order, or by local law. Regulation 9 is enforced by this Office irrespective of the intrinsic qualities of the property or obligations involved. This injunction against misuse of fiduciary funds involves a fundamental precept of fiduciary law which is widely recognized in the courts of this country. The bill excludes from those investment securities which a commercial bank may underwrite or deal in, special assessment obligations and industrial development obligations. This Office has no objection to either of these exclusions. We believe that this bill would enable the commercial banks to make a substantial contribution toward assisting state and local governments in the next decades when their financial needs will spiral and when they will need all possible assistance. In 1963, we changed our Investment Securities Regulation to clarify the definitions of the term "political subdivision" and "general obligation" so as to take account of changes that have occurred in government financing in the past 30 years. Although we believe that our Investment Securities Regulation now permits the banks in some degree to perform their functions in this area of public finance, in order to achieve the full benefits of bank participation in this market, we strongly endorse the passage of H.R. 7539. BEFORE THE SUBCOMMITTEE ON BANK SUPERVISION AND INSURANCE OF THE HOUSE COMMITTEE ON BANKING AND CURRENCY, FRIDAY, APRIL 30, 1965 Bank Performance and Bank Regulation I apprised the Secretary of the Treasury of the committee's request that I testify, and the Secretary has authorized me to present my personal views to the committee. The best test of the effectiveness of bank regulation is the performance of the banking industry itself. This performance is now at record levels throughout the country. Deposits, loans and investments, and profits have reached new heights—and they continue to grow. Added banking facilities are being brought to areas which long had suffered deficiencies. The services offered to bank customers are being progessively 247 broadened. The banking system is alive and teeming with energy. The consuming public is the ultimate beneficiary of all this activity. The record performance of the banking industry reflects a greater awareness by the regulatory authorities of the obligation to allow sufficient scope for innovation and initiative in banking to meet growing and changing consumer requirements. Consumer needs for banking services are constantly undergoing change as our population grows, as new industries develop, and as new communities arise. The banking industry cannot meet these changing demands unless the regulartory authorities constantly adapt their policies to the new opportunities and the new requirements. The present bank regulatory structure, by dispersing the centers of public power, has preserved a variety of sources from which initiative may appear in fashioning bank regulation according to public needs. Beyond the powers over National Banks which rest with the Comptroller of the Currency, the 50 individual States charter and regulate State banks, although they share this power in some major respects with the Federal Reserve Board or the FDIC. This diffusion of public authority offers the best safeguard against stagnation in bank regulation, and the best hope that the banking industry will be allowed the freedom to make its maximum contribution to the Nation's economic growth and development. Your committee now has before it several bills which propose modification of the existing bank regulatory structure. I should like to suggest to the committee some very fundamental issues which are raised by these proposals. Perhaps the most fundamental issue in bank regulation is the role of the dual banking system. In current discussions of bank regulatory policies, the suggestion is made that there should be greater uniformity, or at least greater consistency, within the Federal regulatory structure, and, of course, by the same token, greater uniformity or consistency among the laws, regulations, and policies of the 50 individual States. The 50 individual States now have broad freedom to adopt banking policies of their own choice in any form they may select. If meaningful uniformity or consistency were to be sought, this freedom would have to be curbed. It would be necessary for the Federal Government to assert authority over the entire commercial banking industry, and to impose uniform policies throughout, as the Congress has the power to provide. If all Federal powers over commercial banks were centralized, a single Federal agency would gain the authority to choose between National and State banks 248 in deciding what new banks to charter, which banks should be allowed to branch or merge, and in authorizing and regulating holding companies. We do not face this problem today, because, for the most part, no Federal agency has jurisdiction in these matters over both National and State banks. The likely result of centralizing Federal banking powers would, therefore, be a federally imposed and a federally enforced plan for the entire structure of the commercial banking industry of the country. If Federal powers affecting the lending and investment practices of commercial banks were to be centralized, a single Federal agency would gain vast authority over the volume and the allocation of credit throughout the economy. This agency would be in a position to influence critically both the pace and the direction of the Nation's economic growth and development. It is difficult to reconcile such centralized public power with the principles of our private enterprise system. BEFORE THE HOUSE COMMITTEE ON BANKING AND CURRENCY, WEDNESDAY, JUNE 30,1965 Mr. Chairman, yesterday I was presented with a document which challenged 29 actions of our Office. We have no question as to the legal and economic soundness of these actions. Our Law Department is now assembling the detailed replies to each item on that list, and I request that these responses be made part of the record. The document reflects a fundamental misunderstanding of the congressionally mandated function of this Office vis-a-vis the National Banking System in particular and the American economic structure in general. The dual banking system was created by a mandate of our Congress over a century ago, and their intention, as I see it, was to provide for Federal regulation of national banking in a growing and changing private enterprise economy. The National Banking Act is not a merchandise mail-order catalog. It is rather, like the Constitution of the United States, a framework under which National Banks may employ their inventiveness and capacity for change to respond to the needs of our growing industry and commerce, both domestic and international. The document also assumes that any departure from the position of any Comptroller of the Currency since 1863, or indeed of any other banking agency, is somehow improper. I would point out that even the courts of this land, whose appreciation of the value of precedent and consistency is probably stronger than that of any other branch of the Government, do not hesitate to change previous positions where the passage of time and changing circunastances have rendered obsolete their prior judicial opinions. Our primary aim since assuming office has been to modernize the regulatory structure for National Banks and to carry out effectively the century-old congressional intent of a vital dual banking system. Virtually all of the subjects contained on the list in question had not been examined by any Federal banking authority for many years prior to our work on them. The business of banking, like all other institutions in the 20th century, is undergoing rapid and continuous change. The inevitable responses of our Office must take place in a flexible statutory and administrative framework. Obviously, banking cannot survive with vitality under rigid and stagnant regulation, as had too long been the case. We strongly believe that our administrative, procedural and regulatory determinations, including those set forth by the chairman, are not only unquestionably well-supported in law but also equally wellfounded in the basic philosophy of this country concerning the relationship of government to business. We are a private enterprise economy and we place primary reliance on individual initiative. Consistent with this philosophy, governmental limitations are imposed only where there is clear public purpose to be served, and those limitations must be strictly interpreted so as to avoid needless interference with the free discretion of the individual. In applying this philosphy to bank regulations, we strongly believe that the presumption should be in favor of freedom of initiative and innovation by the individual banker. The same policy, it appears to me, is incumbent upon the bank regulatory agencies. The bank regulatory authorities, State and Federal, as any other regulatory authority, have an affirmative responsibility to assure that the regulated industry has the tools and the capacity to carry out its role with maximum effectiveness. Excessive reliance on the "negative crutch" of all-knowing government— whether at the State or Federal level—can lead only to stagnation and regression. Not all the financial knowhow of this great country is lodged in the "genius" of the financial and monetary regulatory agencies in Washington. Hence, the banking authorities should set, as their goal, the broadest reliance upon the initiative of the individual banker consistent with the specific proscriptions of the banking statutes. It is difficult to see how any other policy can serve the consumers of banking services whose critical needs are our ultimate concern in framing public policy and regulation in this field. Only a vital, competitive, vigorous, innovational commercial banking industry can advance the interest of the United States—at home and abroad—and the well-being of all of its citizens. Clearly, a rigid, stagnant backward-looking regulatory, administrative, and procedural policy can in time only strangle the commercial banking business and with it the business community and economy of the country. It is, in my opinion, extraordinary even to suggest that the test of propriety of administrative or procedural rulings should be a rigid and unchanging conformance to all rules of the past, however ill-conceived or narrowly construed they may be in in terms of law or economic policy. Shall I, as Comptroller of the Currency, be ever foreclosed from changing any rule, regulation, interpretation or policy of this Office laid down by Mr. Hugh McCulloch, the first Comptroller of the Currency who left this Office in 1865, or indeed any of his successors, over the last 100 years? It seems equally extraordinary to me to suggest that a difference between any ruling or policy of this Office and a ruling or policy of another agency would, by some intellectual gymnastic, automatically open the rulings of this Office to question. If, as has been the case for decades, other agencies have not reexamined their own rules, how can such a test be in any sense a reasonable basis for judging any rule of this Office? Should we be inextricably bound to the past when we face a future alive with change, progress and confidence? The following are the answers to the 29 allegations referred to above. 1. Appointment of Additional Deputy Comptrollers of the Currency The charge of illegal action as listed in the specification sheet is the "appointment of seven Deputy Comptrollers of the Currency" in violation of 12 U.S.C. 4. Section 4 states that "the Secretary of the Treasury shall appoint no more than four Deputy Comptrollers of the Currency." The fact is that the statute was strictly complied with in that the Secretary of the Treasury has not appointed more than four Deputy Comptrollers of the Currency. The Comptroller, pursuant to his general authority to execute his duties and administer his bureau, appointed three additional administrative aides whom he designated Deputy Comptroller for Trusts, Deputy Comptroller for Mergers and Branches, and Deputy Comptroller for International Banking and Finance, 249 respectively. These three assistants to the Comptroller were appointed in order to implement an administrative reorganization of the Office whereby duties were assigned by function rather than by geographical region. To characterize the granting of these titles rather than some other title, such as a special assistant, as a violation to 12 U.S.C. 4, is to grossly overemphasize the effect of this administrative action and to assert form over substance. The three appointments were not made by the Secretary pursuant to Section 4 and the salaries of the three employees concerned were not fixed by the Secretary pursuant to Section 4. All three employees had previously been employed in the Office of the Comptroller as attorneys for some time prior to their assuming their new administrative duties. 2. Access to Shareholder Lists The Office has not published any ruling or interpretation on the subject of rights of shareholders of National Banks to inspect the complete list of shareholders. The subject of such inspection has been traditionally handled by the courts of general jurisdiction in the location at which a bank is situated and there are a number of court decisions on the point. This Office, in reply to written inquiries from National Banks, has advised that it would not intervene in disputes between shareholders and officers and directors over the granting of access to the shareholder list and that the proper forum for the resolution of such disputes is a court. Accordingly, we have advised officers and directors that if the Board of Directors is of the opinion that a request to inspect a shareholder list is not made in good faith and for a purpose inimical to the best interests of the bank, that this Office would not object to a refusal by such Board of Directors to turn over the list until ordered to do so by a court of competent jurisdiction. We do not see how the position of the Office, as communicated to these inquirers, constitutes any violation of 12 U.S.C. 62, which requires that National Banks keep a list of its shareholders "subject to the inspection of all the shareholders and creditors of the association." 3. Charitable Foundations It is stated in paragraph 7445 of the Comptroller's Manual that a National Bank may, upon certain stated conditions, establish a charitable foundation to assist in making the charitable contributions permitted by paragraph Eighth of 12 U.S.C. 24. This ruling is challenged on the grounds that it is not provided by law and that it conflicts with the provisions in para250 graphs Seventh and Eighth of 12 U.S.C. 24. These objections, in light of those provisions of 12 U.S.C. 24, appear frivolous. Congress clearly stated in paragraph Eighth of 12 U.S.C. 24 its intention regarding charitable contributions when it authorized National Banks "to contribute to community funds, or to charitable, philanthropic, or benevolent instrumentalities conducive to public welfare, such sums as its board of directors may deem expedient and in the interests of the association, if it is located in a State the laws of which do not expressly prohibit State banking institutions from contributing to such funds or instrumentalities." Congress, with equal clarity in paragraph Seventh of 12 U.S.C. 24, also granted to National Banks "all such incidental powers as shall be necessary to carry on the business of banking." It is entirely reasonable; and consistent with these clear expressions of Congressional intent to conclude that a National Bank may establish a charitable foundation to assist in making the charitable contributions permitted by paragraph Eighth of 12 U.S.C. 24. As is evidenced by their widespread acceptance and use by businesses generally, charitable foundations, either in the form of a charitable trust or nonprofit corporation as provided by State law, constitute a most useful and efficient means of implementing a bank's program of making contributions. Any assertion that such use of a charitable foundation by a National Bank is prohibited by provisions contained in paragraph Seventh of 12 U.S.C. 24, which prohibit investment by a National B:ank in corporate stock in certain circumstances, reflects lack of understanding with respect to their meaning, purpose, and legislative history. These provisions serve only to limit the securities in which a National Bank may invest its funds. Similarly, such an assertion reflects a disregard for the judicial recognition of the authority of National Banks to lawfully carry on certain of their activities either directly or indirectly, through a subsidiary corporation. As stated, Congress has, in paragraph Eighth of 12 U.S.C. 24, concluded that it is a proper activity for National Banks to contribute to charitable funds and instrumentalities. There is no sound basis for concluding that a National Bank may not lawfully carry on this activity through a trust or subsidiary corporation. Acceptance of their use by National Banks has been consistently recognized by previous Comptrollers, as is evident from paragraph 7220 of the Comptroller's Digest of Opinions which predated, and contained language almost identical to that contained in paragraph 7445 of the Comptroller's Manual. 4. Contributions !o Community Development Corporations It Is stated In paragraph 7480 of the Comptroller's Manual that National Banks, as a necessary business expense, may make reasonable contributions to local community agencies and groups to further the physical, economical, and social development of their communities, and that such contributions may take the form of investment in a corporation organized to carry on such activities. This ruling is challenged on the basis that it is not provided for by law and that it violates paragraph Seventh of 12 U.S.C. 24, which relates to the purchase of corporate stock by a National Bank. These objections, similar to those made against the establishment of a charitable foundation by a National Bank, are without merit. Paragraph Eighth of 12 U.S.C. 24 authorizes a National Bank "to contribute to community funds, or to charitable, philanthropic, or benevolent instrumentalities conducive to public welfare, such sums as its board of directors may deem expedient and in the interests of the association, if it is located in a State, the laws of which do not expressly prohibit State banking institutions from contributing to such funds or instrumentalities." As an application of this authority, it is stated in paragraph 7480 of the Comptroller's Manual that National Banks, as a necessary business expense, may make reasonable contributions to local community agencies and groups to further the physical, economic, and social development of their communities. Such contributions may take the form of an investment in a corporation organized to carry on such activities. The aggregate investment in such corporations may not exceed 2 percent of the bank's capital and surplus. This ruling not only is an implementation of paragraph Eighth of 12 U.S.C. 24; it is intended to encourage National Banks to assist, and assume their proper responsibilities within their communities. It is a means by which National Banks may play a role in the President's program of building a truly great society through private initiative and resources. It is entirely consistent with the clear expression of Congressional intent contained in paragraph Eight of 12 U.S.C. 24, which permits contributions to community funds and instrumentalities conducive to public welfare, that a National Bank make such contributions in the form of an investment in the stocks or bonds of a corporation organized to carry on such activities. Paragraph Eighth contains no standard or limitation with respect to the form that such contribution may take. The Comptroller's Office has, with respect to National Bank contributions in the form of investments in the stocks or bonds of a development corporation, recognized that such investments generally do not qualify as "investment securities" within the meaning and requirements of the Investment Securities Regulation and has therefore held that all such investments, which do not meet the requirements of that Regulation, must be charged off as a business expense and not be carried as part of the bank's assets. 5. Stock Option Plans It is stated in paragraph 5015 of the Comptroller's Manual that a National Bank may provide employee stock option and stock purchase plans in accordance with applicable regulations of this Office. This ruling is challenged on the grounds that it is not provided for by law nor permitted by previous Comptrollers. The use of employee stock option plans by corporations was implicitly approved by Congress when it granted certain tax privileges with respect to such plans in Sections 421 and 422 of the Internal Revenue Code. No reason has been advanced why banks, as distinguished from other corporations, should not be permitted to have such plans. National Banks have long been handicapped in obtaining and retaining competent executives because they were not permitted to offer stock options as a form of incentive compensation. The obstacle had been a prohibition against the holding of Treasury stock, and the apparent unwillingness of previous Comptrollers to permit the banks to have authorized but unissued stock. In order to implement a stock option plan, it is necessary for a bank to have a supply of shares ready for issuance under the plan when and as the employees elect to exercise their options or purchase rights. Our ruling permitting the banks to have authorized but unissued shares removed the only technical obstacle to the adoption of stock option plans. In order to control the use of the stock option privilege and see that it is not abused, we have exercised strict control. Before any National Bank may put into effect an employee stock option or stock purchase plan, it must obtain approval of our Office and the approval of the holders of two-thirds of its outstanding shares as to all of the provisions of the plan. We require that the plan be administered by a disinterested committee of directors and that the total amount of shares allocated to the plan and the proportionate amount which any one employee may be granted are held within reasonable limits. In our original ruling, we required that all plans qualify for the special tax treatment afforded by Section 421 of the Internal Revenue Code. Since the 251 passage of the recent amendments to the Internal Revenue Code, many banks have expressed interest in adopting employee stock option or stock purchase plans which might not qualify for the special tax treatment afforded to restricted and qualified plans meeting the definitions contained in the Code. Employees and banks operating under a nonqualified plan presumably would be subject to taxation in the usual manner on transactions entered into pursuant thereto. This Office perceived no consideration of public policy which should prevent the management of a National Bank, desiring to adopt a nonqualified plan, from doing so on the basis of the same business and competitive conditions which govern the actions of business corporations generally in this area. Accordingly, we recently amended our regulations to eliminate as a prerequisite to the approval of this Office, that stock option or purchase plans must qualify for preferential tax treatment under the Internal Revenue Code of 1954, as amended. In place of the former requirements, a set of general guidelines for such plans was adopted. 6. Access to Examination Reports to the FDIC The allegation is made that "for one year beginning February 1964" the Comptroller of the Currency did not permit access to examination reports of National Banks to the FDIC. The position of this Office has never been to deny to the FDIC the access to its examination reports required by 12 U.S.C. 1817. The issue, as has been widely reported and is well known, is whether the Office of the Comptroller, which operates entirely on nonappropriated funds, is required to grant such access free of charge. There is nothing in 12 U.S.C. 1817 or indeed in any other statute which prohibits the making of a reasonable charge for copies of such reports which are prepared at great expense to this Office. Section 1817 vests the FDIC with the authorization necessary to becoming privy to contents of National Bank examination reports. It is a clearance or authority to have access to examination reports, to assure that access would not be denied to the FDIC on the basis of the lack of status required to become privy to such information. There is nothing in this provision or in any other law requiring the Comptroller of the Currency to furnish the FDIC with copies of National Bank examination reports free of service charge. The request by the present Comptroller that reasonable charges be paid for copies of National Bank examination reports is not a novel one. Since 1921, the Federal Reserve System has recognized the equity of 252 service charges for copies of National Bank examination reports. In that year, Comptroller of the Currency D. R. Crissinger announced that arrangements had been made with the Federal Reserve Board under which Federal Reserve Banks would pay for reports provided by the Comptroller. In 1957, Comptroller of the Currency Raymond F. Gidney proposed that both the Federal Deposit Insurance Corporation and the Federal Reserve System share with the Comptroller's Office the heavy cost of National Bank examination reports. In 1962, an agreement was reached between the Federal Reserve Board and the Comptroller's Office whereby the Federal Reserve Banks would pay the Comptroller's Office a fee of $100 for each examination report which they wished to retain in their own files. In addition, the agreement provided that the Federal Reserve Board staff in Washington could obtain copies of examination reports at no charge. The FDIC, since its inception in 1933, has declined to pay for copies of examination reports. In 1962, following the agreement between the Federal Reserve Board and the Comptroller of the Currency, the Comptroller suggested to the FDIC that the matter of an equitable charge for examination reports be submitted to the Comptroller General of the United States for review, with the understanding that both banking agencies would abide by the Comptroller General's determination. The FDIC declined to submit the question to arbitration by the Comptroller General. Every one of the eight Comptrollers of the Currency since 1921 has favored service charges for examination reports. They have contended that National Banks, through the costs involved in their membership in the Federal Reserve System and the FDIC, were in effect helping to subsidize the examinations which the Federal Reserve and the FDIC make of state banks at no charge. In any event the FDIC presently is being given access to the reports. During the period referred to in the specification sheet, physical changes in our filing setup caused a temporary suspension of the arrangements for access. It is our understanding that during this period the FDIC received copies of the reports from the Federal Reserve. 7. Purchase and Sale of Federal Funds It is stated in paragraph 1130 of the Comptroller's Manual that when a bank purchases "Federal funds" from another bank, the transaction ordinarily takes the form of a transfer from the seller's account in the Federal Reserve Bank to the buyer's account therein, payment to be made by the purchaser, usually with a specified fee. The transaction does not create an obligation subject to the lending limit or a borrowing subject to 12 U.S.C. 82, but is to be considered a purchase and sale of such funds. This ruling is challenged on the grounds that it is contrary to rulings of previous Comptrollers, and that it is contrary to the provisions of 12 U.S.C. 82 and 84. Earlier Comptrollers took the position that, when a National Bank acquired, through "purchase," Federal Reserve funds from another bank, such acquisition taking the form of a transfer of the funds from the "seller's" account to the "buyer's" account in the Federal Reserve Bank, with payment to be made by the "buyer" usually with a specified fee, the transaction was a loan by the "seller" bank to the "buyer" bank, and the amount of such "loan" could not exceed the statutory lending limit of the "seller" nor the statutory borrowing limit of the "buyer." However, such purchases and sales are in reality, and are so recognized by the banking industry, trading in an established money market. It is in truth a buying of money for a short-term use. The Comptroller's Office has, therefore, held that, consistent with custom and practice within the banking industry, transactions of this nature constitute purchases and sales of funds under which no obligations arise that are subject to the lending limitation of 12 U.S.C. 84. Similarly, such transactions are not subject to 12 U.S.C. 82 which imposes borrowing limitations on National Banks. To impose these limitations merely because previous Comptrollers viewed these transactions in a different light would be to perpetuate a position for its own sake without regard to its legal correctness. In this connection, it is noted that a significant number of State bank supervisors view these transactions in the same manner as does the Comptroller's Office. 8. Corporate Savings Accounts It is stated in paragraph 7510 of the Comptroller's Manual that a National Bank may accept savings accounts without regard to whether the funds are deposited to the credit of one or more individuals, or of a corporation, association or other organization, whether operated for profit or otherwise. This ruling is challenged on the basis that it is contrary to a regulation of the Federal Reserve Board although no question has been raised with respect to its being legally correct. After a thorough and careful study of the 1935 statute (12 U.S.C. 461), and its legislative history, as well as the regulations and opinions of the Federal Reserve Board issued both before and since the statute, the Comptroller's Office concluded that the authority of the Board of Governors of the Federal Reserve System to define the terms "time deposits" and "savings deposits" extends only to the terms of the deposit contract, such as a description of withdrawal requirements and interest rate limitations and that there is nothing contained in the statute that would preclude, or that would authorize a Regulation which would preclude, the maintenance of such accounts by any class of depositors. There is neither legal jurisdiction, nor any authority in the Board, to define "savings deposits" by the character or general purpose of the depositor. The legal issue is whether or not the Federal Reserve Board has exceeded its authority by defining time deposits and savings deposits by the character or general purpose of the depositor. The fact that the Comptroller's Office has called attention to this abuse of authority is of secondary significance. Of primary importance is the fact that the study and analysis of the legal issues by the Comptroller's Office was prompted by economic considerations and the need for National Banks to serve the public in their own service areas. The Comptroller's ruling eliminates two types of discrimination: between large and small firms; and between commercial banks and other financial intermediaries. The Federal Reserve Board allows savings deposits to individuals of unlimited means and to nonprofit corporations, associations, or other organizations possessing vast fortunes while it refuses such "privilege" to a small corporate business enterprise. Banks should be encouraged and enabled to assist these small business firms which are ill-equipped to operate in short-term money markets. The knowledgeable and sophisticated treasurer of the large corporation is not unduly restricted by this overextension of authority on the part of the Federal Reserve Board. It is the small unsophisticated corporation which is the real injured party under the Board's regulation. The discrimination between commercial banks and other financial intermediaries results from the fact that these other financial institutions, primarily savings and loan associations, are allowed to accept savings deposits of this type. Attached is a copy of a detailed memorandum previously prepared by the Comptroller's legal staff with respect to the authority of the Federal Reserve Board to prohibit business corporations or any other particular class of depositors from maintaining savings accounts. 9. Reporting Requirements for International Operations The International Operations Regulation of the Comptroller (12 CFR 20) sets forth certain reporting 253 requirements with respect to the international operations of National Banks. This Regulation is challenged on the grounds that it amounts to dual regulation contrary to Section 25 of the Federal Reserve Act (12 U.S.G. 601) which is said to vest the Federal Reserve Board with complete authority to regulate the foreign operations of all member banks, including National Banks. Section 25 of the Federal Reserve Act specificially provides in the sixth paragraph (12 U.S.C. 602) that every national banking association operating foreign branches shall be required to furnish information concerning the condition of such branches to the Comptroller of the Currency upon demand. This language plus that contained in 12 U.S.C. 161 constitutes complete authority for the reporting requirements contained in the International Operations Regulation of the Comptroller. Furthermore, it (12 U.S.C. 602) constitutes Congressional recognition that the Comptroller has a continuing responsibility for the operation, regulation and supervision of National Banks although some phases of their operation may also be subject to regulation by the Federal Reserve System. 10. Direct Acquisition of Stock of Foreign Banks It is stated in paragraph 7525 of the Comptroller's Manual that a National Bank may acquire and hold directly and indirectly stock interests in foreign banks as a means of conducting its overseas operations. This ruling is challenged on the grounds that the Edge Act permits only an indirect equity interest in foreign banks; that it is "contrary to FRB Ruling 1000 promulgated unde rthe authority of 12 U.S.C. 601"; and that it is contrary to 12 U.S.C. 24 which is said to prohibit corporate stock purchases by National Banks. The Federal Reserve ruling referred to (1964 FRB, p. 1000) is an interpretation of language contained in 12 U.S.C. 24 and of the application of that language to State member banks pursuant to the provisions of Section 9 of the Federal Reserve Act (12 U.S.C. 335). Our interpretation of the language contained in 12 U.S.C. 24 will be discussed later. It should be noted, however, that the ruling was published, 29 FR 9787, 12 CFR 208.112, as a part of Regulation H. Regulation H relates to the membership of State banking institutions in the Federal Reserve System and is based upon and issued pursuant to the provisions of Section 9 of the Federal Reserve Act (12 U.S.C. 321 et seq.) and related provisions of law. Section 9 also relates to State banks as members of the Federal Reserve System. The ruling thus purports to apply only to investments by State member banks in the stock of foreign banks. 254 The corporate powers of National Banks are set forth in 12 U.S.C. 21 and 24 which authorize the formation of an association for carrying on the "business of banking" which shall have power to exercise "all such incidental powers as shall be necessary to carry on the business of banking." These are broad powers which have never been and should not be completely defined. The banking business must meet the financial needs of our continually growing society. This was recognized by the House Banking and Currency Committee when it recommended the adoption of the McFadden Amendments of 1927. The Committee made the following comment with respect to provisions relating to the holding of stock in a safe deposit corporation and to the investment security business that had appeared in an earlier bill as new grants of power: * * * they now appear as a confirmation and regulation of an existing banking service or business. It is a matter of common knowledge that national banks have been engaged in the investment-securities business and the safe-deposit business for a number of years. In this they have proceeded under their incidental corporate powers to conduct the banking business. [The bill] * * * recognizes this situation but declares a public policy with reference thereto and thereby regulates these activities. Page 2, H. Report No. 83, 69th Congress. The claim that 12 U.S.C. 24 prohibits corporate stock purchases by National Banks is based upon the following sentence: Except as hereinafter provided or otherwise permitted by law nothing herein contained shall authorize the purchase by the association for its own account of any shares of stock of any corporation. This sentence was added in 1933 as a part of the revision and clarification of the Congressional regulation of the business of dealing in securities and stock and the purchase of investment securities by a bank for its own account. The sentence is clearly a disclaimer that these related powers constitute authority for a bank to purchase corporate stock as a part of its investment portfolio. It does not preclude a bank from using corporate instrumentalities in carrying on the business of banking. One of the earliest recognitions of this power was the judicial recognition that a bank could hold real estate necessary for its accommodation in the transaction of its business either directly or indirectly through a corporation. Fourth Nat. Bank v. Stahlman 178 S.W. 942 (Tenn. 1915). This power was later recognized and regulated by Congress in 12 U.S.C. 371 (d). Similarly, the Edge Act does not constitute a grant of power to National Banks but rather a plan for « .i - r t > « M »ii" 1 rnit onal bankir>CT J * * IUJ i )i ^ r ' I i c'ei i" R ooue System to ch 1 " < \ v.1 t i'[ J "- s i ^.oip y ~> o s through wnuJ b il t hd o f l . si i t\ i i ' i t n**estments la ic ip L i ' ' ! r ' t i L t< ' i < xi u cial operaf n<^ *. s i i. p i _j i t i i T '1 c ther parW DU i i iPtana^oi ] i ' i) ^"Jions but d KS ' ' C el } i n i t ' i National ] fl B *i -s cp^Mni t p<H *i this program. p i n "52") o( 1'ic n »' ( /7 Uflr /fl/recogi1 ' r + t t p1" \ to x n 'i(. o inr oJ banking r n h\ (.n'tgui r v i n i fij] jp i is much b»oarl( i tiu1 i the EJge \ t A E, am tn 1 'o )resents a sp \ I it b't c r1 • «• I.L' f holdings n sti K i t 1 S i 1 f i ' \r 1 s >M i )propriate ri( a s •» . f1i ^ i r , 1^ 1i c aerations 1 i t'j oi>r ii^ I i i il « Comptroller \» r •" i a j T» s c - u ^ d h v ^% \'atioi al Banku" Lu s ^ f i 11 T ( u U M ) 1 ll I us cf t^e United S< Ut i J | iq, <.i> t'r " M" i^ / i t >r, f i )f"icn, regulat i n ' ct h m n of Na* onal Banks and in particula1 w i c u i o n o f 12 1 *> C rt>1 w\i li jets forth tiif" i > c° •> \ o, T^ * t) il IV ks Nf ither the Edge ^ct i r r ( thej nr.'HMs u the Fedcx u Reserve ( A t t P vi iru of t f t ]j usibjliti's of the C^i ! Tt ifi a r>s ' x^r^o isibili*A to make tlie ir i u ^ i i v T i v n c1 tt j nation of whe t portions oi "n~ "ir i ,\ oo Miio-b-nrH with' the business t ^ *•> ^ ii securities. We have endeavored to do that and to balance off the considerations of public policy that sometimes diverge in attempting to maintain depositor confidence while at the same time keeping investors informed. Furthermore the Amendments Act specifically states that the existing rules, regulations and orders of the Securities and Exchange Commission are not to be binding on the banking agencies. It must be remembered that our Office was the first banking agency ever to require the use of annual financial reports to shareholders, the first banking agency ever to require the use of proxy statements, and the first banking agency ever to require reports of change of ownership control of banks. All these requirements were imposed by our Office in December of 1962, a year and a half before the Securities Acts Amendments were passed. Our regulations still require disclosure in a very important area which neither the act nor the other banking agencies have touched—that of the public sale of securities by new banks and existing banks. We require a full registration statement and offering circular to be used by every newly organized or existing bank going to the public for $1 million or more. The Fed. and F.D.I.C. rules do not impose cuch a requirement. 12. Purchase and Operation of Mortgage Service Company The ruling which recognizes the right of a National Bank to purchase the stock of a mortgage service company and to operate such company is challenged Tl ' S ^sare »fo U lati s 12 C . R 10, 11, 12 on the grounds that it is not provided for by law and K K and 1^ !=>• fv' \ t e ( i p t ^ ' l e -.^fficf' pursuant that it violates paragraph Seventh of 12 U.S.C, 24, r t > th S ,* -in \iU Vr T hn^41061 ire queswhich relates, in part, to the purchase of corporate r 1 r r t oncJ on ti'f rounds h ^ t cv ar^ >nt i y to the. stock by National Banks. As in the case of other irt' nt -»f C( n r ess is e \ p ^ ^ec1 in the Jaw and do not questions raised, this challenge as to the legality of this appir^ h tl * r[ sfV->\iif r d d d1? oi^ancd in the ruling reflects a lack of understanding of the powers FL If • i Rose \ e Boaid'^ i ^d T td' 1 1 7 Deposit Insurgranted and limitations contained in paragraph Seventh of 12 U.S.C. 24. ] li F v T> ind the F i ' J l p i+t( i nf d t1 eir reguThe activities normally carried on by a mortgage lnti >* s - cn r c!ose\ on tho 3 e xS uoJ 'A th(s Securities service company have long been recognized as an esand F \ r ' in<* Coijimissic \ ith the iiiajo^ t xception sential part of the business of banking in which a Naol ' i Iron i\ 1 y of t i r rc° incmcr^ 'or cert lied finan- tional Bank may lawfully engage under paragraph Seventh of 12 U.S.C. 24. No one would argue that % > ^ oi * , >' i ^ M h ^ Vv ilhaTiis Amend- a bank could not properly service mortgage loans it ment, giving to t r e banking "^en^ies administration makes itself. The servicing of such loans held by of < c J i i ,1. n ir i^i •> jl tt e E ban A* \ct, as amended, others is a logical and economically sound extension of to be tht't * t o inking asfc^cics °hoi !d id^pt their own such activity. As previously stated, neither the proregul i ( T s I) s( d on ti ^ public m4 itst as determined visions contained in that paragraph, nor their purpose 7 in the >n *S of th^ b j n \ ivz indu tn , while giving or legislative history prohibit, or in any way limit, the due re? ^c 1 t o the spen n reed of sba1 (holders of bank judicially recognized right of a National Bank to ex11 D h Reqi revr >s 255 ercise all such powers as are incidental to the business of banking, including the power to carry on certain activities which are a part of the business of banking through a subsidiary corporation. It has long been settled law that for various business considerations, a National Bank may carry on certain of its banking activities such as mortgage servicing either directly or through a subsidiary corporation. 13. Ownership and Operation of Travel Agencies It is stated in paragraph 7475 of the Comptroller's Manual that, incident to those powers vested in them under 12 U.S.C. 24, National Banks may provide travel services for their customers and receive compensation for such services. This ruling, as well as the Comptroller's ruling relating to the authority of National Banks to acquire the stock of a travel agency corporation and operate such a corporation are challenged on the ground that they are not provided by law and that paragraph Seventh of 12 U.S.G. 24, which relates to the purchase of corporate stock by a National Bank, prohibits the purchase and operation of a travel agency corporation. As have previous Comptrollers, the present Comptroller has recognized that National Banks may, as an incident of their banking powers, provide travel services for their customers and may receive compensation for these services. Travel services may properly include the issuance of travel credit cards, the sale of trip insurance and the rental of automobiles as agent for a local rental service. As a legitimate exercise of their banking powers, National Banks may advertise, develop and extend such travel services for the purpose of attracting customers to the bank. The provision of travel services is the natural and necessary complement of long standing banking services such as the issuance of travelers' letters of credit and travelers' checks, the making of loans to finance the costs of travel, the provision of custody accounts and safe deposit facilities and the entire range of bank credits employed in international trade and investment. As in the case of other activities which are either a part of the business of banking or incidental thereto, such as mortgage servicing activities, as discussed above, a National Bank may, consistent with the provisions contained in paragraph Seventh of 12 U.S.C. 24, and in accordance with applicable judicial precedents, engage in such activities either indirectly through a subsidiary corporation, the stock of which is owned by the bank, or directly through a department within the bank. 256 14. General Insurance Agency Activities It is stated in paragraph 7100 of the Comptroller's Manual that 12 U.S.C. 92 provides that National Banks may act as agents for any fire, life, or other insurance company in any place the population of which does not exceed 5,000 inhabitants. This provision is applicable to any office of a National Bank when the office is located in a community having a population of less than 5,000 even though the principal office of such bank is located in a community whose population exceeds 5,000. This ruling is challenged on the grounds that 12 U.S.C. 92 has been removed from the U.S. Code of laws since 1916 and that this ruling is contrary to rulings of previous Comptrollers. There is specific statutory authority in 12 U.S.C. 92 for a National Bank to act as a general insurance agent in a community with a population of less than 5,000 people. The ruling contained in paragraph 7100 is consistent with the clear Congressional intent, evident at the enactment of the statute. It is realized that there is a disagreement among lawyers as to the technical status of 12 U.S.C. 92 as having the force of law. It was for this reason that this provision of law was cited as paragraph II of Section 13 of the Federal Reserve Act in paragraph 9405 of the Digest of Opinions which predated paragraph 7100 of the Comptroller's Manual. In this connection, it is gross error to assert that this ruling is contrary to rulings of previous Comptrollers. The Comptroller's Office, along with the other banking agencies and the banking industry generally, has always gone on the assumption that the provisions contained inl2U.S.C92 remain as part of the law. 15. Insurance Activity Incidental to Banking Transactions It is stated in paragraph 7110 of the Comptroller's Manual that under the powers vested in them under 12 U.S.C. 24, National Banks have the authority to act as agent in the issuance of insurance which is incidental to banking transactions and that commissions received therefrom or service charges imposed therefor may be retained by the bank. This ruling is challenged on the basis that it is not provided for by law and that it is contrary to rulings by previous Comptrollers. A National Bank, wherever located, may, pursuant to its corporate powers contained in paragraph Seventh of 12 U.S.C. 24, participate in insurance transactions which are incident to banking transactions. An example would be a bank selling to a customer credit life insurance to pay the balance of a loan held by the bank, in the event of the customer's death. A National Bank has an insurable interest in an automobile on the security of which it has extended credit to a customer. A bank also has an interest in maintaining through liability insurance the creditworthiness of its customer, so long as the loan is outstanding, in order that its ability to collect from the customer is not impaired by judgments arising out of the negligent operation or use of the automobile. The bank's interest in the automobile and in the unimpaired credit-worthiness of the customer, so long as the loan is outstanding, can be protected by making insurance available to the customer. It is unreasonable and entirely without justification to expect a bank to gratuitously supply this service for an insurance company without receiving any payment for the necessary expenses which the bank incurs through the use of its employees and facilities. Congress has consistently recognized that the business of banking covers a wide range of activities. In the National Bank Act of 1864 Congress wisely refused to define the business of banking as it then existed, foreseeing that the banking business would change and develop with the passing years. It is clear that the business of banking is advanced by financial and related services, and powers necessary to achieve and promote the fundamental purposes of banking must be regarded as powers incidental to those expressly granted by paragraph Seventh of 12 U.S.C. 24. Moreover, there is no evidence contained in the legislative history of 12 U.S.C. 92 that Congress intended to prohibit National Banks from acting in the limited capacity as agents in the issuance of insurance which is incidential to banking transactions. With respect to the position of previous Comptrollers who approved of the bank doing the work of an agent so long as it did not receive any compensation for it, it suffices to say that the receipt of payment for a service does not in itself make the service performed illegal or ultra vires, but it is the character and nature of the service itself which determines whether its performance is consistent with the bank's corporate powers. 16. Debt Cancellation It is stated in paragraph 7495 of the Comptroller's Manual that a National Bank may provide for losses arising from cancellation of outstanding loans upon the death of borrowers. This ruling is challenged on the basis that it is not provided for by law. The Comptroller's Office has, in paragraph 7495, simply recognized that, as a means of protecting itself against losses from its lending transactions, a National Bank may provide for losses arising from the cancellation of outstanding loans upon the death of borrowers. The imposition of an additional charge, and the establishment of necessary reserves in order to enable the bank to agree to such debt cancellation clauses, are a lawful exercise of the powers of a National Bank and necessary to the business of banking. This ruling is founded on paragraph Seventh of 12 U.S.C. 24, which authorizes a National Bank to exercise "all such incidental powers as shall be necessary to carry on the business of banking; . . . " The execution of loan agreements with debt cancellation clauses pursuant to section 24 is an exercise of a National Bank's corporate powers precisely as in the case of its other banking activities. The debt cancellation ruling is not intended as a means of enabling National Banks to invade the field of insurance. Rather, it is a recognition of a National Bank's right to protect itself against anticipated losses in connection with its lending activities, through the establishment and maintenance of appropriate reserves. The necessity to maintain such reserves, and to adjust charges in relation to the risk involved in a particular transaction, has long been recognized as an essential part of the prudent conduct of the banking business. It has been contended that a debt cancellation clause is an insurance contract which is subject to regulation by state authorities because cancellation of the debt upon the death of the borrower results in a benefit to his estate and satisfaction of the debt is provided for out of a reserve established by the bank. This contention is without merit. No payment is made to the borrower's estate. The reserve established by the bank is for its benefit and sole protection. The cancellation of the debt on the death of the borrower is in no way dependent upon the size or, indeed, the existence of a reserve created by the bank. The establishment of a reserve by a National Bank for its benefit is obviously not the business of insurance. Whether such reserves have been established and are adequate are, like other banking matters, subject to the exclusive supervisory authority of the Office of the Comptroller. The provisions of 15 U.S.C. 1012 are not to the contrary. Although section 1012 vests in the several states certain authority in connection with the business of insurance, Congress did not, by Section 1012, confer on the states any authority over the banking activities of National Banks. A banking transaction by a National Bank does not become the business of insurance subject to the provisions of section 1012 merely because a state official or legislature defines the business of insurance so broadly as to encompass banking transactions as well as the wide variety of insurance which they purport to regulate. 257 17. Use of Data Processing Equipment It is stated in paragraph 3500 of the Comptroller's Manual that a National Bank may make available, for the use of others, data processing equipment acquired for the primary purpose of performing service incidental to banking. This ruling is challenged on the grounds that it is not provided for by law, and that it is contrary to the intent of Congress expressed in the Bank Service Corporation Act (12 U.S.C. 1861-65) prohibiting any data processing activity other than the performance of bank services for banks. The objections are groundless in light of the provisions contained in 12 U.S.C. 24 and 12 U.S.C. 1861-65. A National Bank may clearly own and operate data processing equipment under 12 U.S.C. 24 which authorizes it to exercise all such incidental powers as shall be necessary to carry on the business of banking. It is fundamental that if a bank is to achieve the full utilization of its investment in such equipment, it must make it available for the use of others even though it is acquired for the primary purpose of performing services incidental to banking. This conclusion is entirely consistent with and supported by the judicially recognized right of a National Bank to lease or construct a building for banking purposes even though, in order to achieve a maximum return on its investment, it intends to occupy only a part thereof and to rent out a large part of the building to others. The Bank Service Corporation Act (12 U.S.C. 1861-65) recognizes the right of small and medium-sized banks to organize and invest in bank service corporations to provide service comparable to that offered by the largest banks. However, nothing contained in either the act or its legislative history precludes a bank from owning its own data processing equipment or from sharing in the ownership of such equipment through a corporation owned by it with individuals or with corporations other than banks. 18. Leasing of Personal Property It is stated in paragraph 3400 of the Comptroller's Manual that a National Bank may become the owner and lessor of personal property acquired, upon the specific request, and for the use of a customer, and may incur such additional obligations as may be incident to becoming an owner and lessor of such property. These transactions do not result in obligations subject to the lending limits set forth in 12 U.S.C. 84. Since lease payments are in the nature of rent rather than 258 interest, they are not subject to 12 U.S.C. 85 and 86. This ruling is challenged on the grounds that it is not provided for by law and contrary to the clear intent and purpose of Congress contained in 12 U.S.C. 84. The Comptroller's ruling which recognized the authority of National Banks to engage in the direct leasing of personal property was the result of a reexamination of the statutory corporate powers of National Banks. Paragraph Seventh of 12 U.S.C. 24 authorizes a National Bank to exercise "all such incidental powers as shall be necessary to carry on the business of banking; by discounting and negotiating * * * evidences of debt; * * *." Prior to the Comptroller's ruling, a lease financing transaction had been considered within the authority of a National Bank only to the extent that the transaction could be regarded as the discount or the negotiation of an evidence of debt. It followed that such transactions were subject to the lending limits contained in 12 U.S.C. 84. Previous rulings recognized that certain lease paper could be discounted or negotiated and would qualify under exception 13 of 12 U.S.C. 84. Under some circumstances, the obligation of the discounter or negotiator of such paper (ordinarily the lessor) is not subject to the lending limit. A careful study of lease financing indicated that transactions in which the economic function of the lessor had been reduced to a minimum were already an important part of the business of banking. In these transactions a bank lent money to a lessor solely upon the credit of a lessee for the purchase of property specifically requested by the lessee for its immediate possession and use. The lessor acted solely as a holder of title and as a nominal debtor. He was a relatively expensive retailer of bank credit necessary only because a lease transaction required an owner and lessor of property, and because the bank supervisors required an evidence of debt. The recognition that in some cases a lessee could be regarded as a debtor under 12 U.S.C. 84 approached, but did not reach the solution of the problem. A debtor-creditor relationship did not meet the needs of the lessee. Solution of the problem, however, required only the recognition that the economic development of the United States had brought this form of lease financing into the business of banking. The business of banking, like the law merchant, continues to grow to meet the needs of commerce. Paragraph Seventh of 12 U.S.C. 24 clearly authorizes National Banks to carry on the business of banking, The "business of bank- ing" clearly is not limited to the transactions described in paragraph Seventh. It is not necessary to fit lease financing into the narrow confines of the negotiation of an evidence of debt. It is, in fact, necessary to the business of banking to recognize that the leasing by the bank of personal property acquired upon the specific request of and for the use of its customer, and the incurring of such additional obligations as may be incident to becoming an owner of personal property and the lessor thereof, is a lawful exercise of the powers of a National Bank and necessary to the business of banking. The limitation contained in 12 U.S.C. 84 applies specifically to the discounting, negotiation and guaranty of evidences of debt. If, as indicated in the preceding paragraphs, lease financing is not the negotiation of an evidence of debt for the purposes of 12 U.S.C. 24, there is no reason to regard it as such for the purpose of bringing it within the limitation of 12 U.S.C. 84. Certainly, the acquisition of personal property is not within the limitation and the payment of rent is ordinarily regarded as compensation for the use of property and not as the payment of a debt. 19. Purchase or Sale of Securities Subject to Repurchase Agreements It is stated in paragraph 1131 of the Comptroller's Manual that the purchase or sale of securities by a bank, under an agreement to resell or repurchase at the end of a stated period, is not a borrowing subject to 12 U.S.C. 82 or an obligation subject to the lending limit of 12 U.S.C. 84. This ruling is challenged on the basis of being contrary to the clear intent of Congress contained in 12 U.S.C. 82 and 84, which impose borrowing and lending limitations, respectively, on National Banks. In form as well as legal effect, such transactions are neither borrowings nor lendings but rather are purchases and sales. The only possible justification for inclusion of such transactions within the lending limitations is that, in isolated cases, they may be used to evade the lending limit. However, the vast majority of purchases and sales are for valid and legitimate nonborrowing purposes, such as the obtaining of collateral security for public deposits. As stated, this ruling is entirely consistent with the substance and realities of a legitimate part of the banking business. As a responsible regulator}' body, the Comptroller's Office cannot because of possible isolated instances of evasion of applicable statutory limits by a few bankers, view transactions as being applicable to statutory limitations which, in fact and in law, are not applicable. 20. Underwriting by National Banks Under the provisions of paragraph Seventh of 12 U.S.C. 24, National Banks are empowered to underwrite and generally trade in those securities which constitute general obligations of a State or a political subdivision of a State. After a thorough study of the issues, the Comptroller rules that a number of types of municipal securities, hitherto thought to be ineligible for underwriting and general trading by National Banks, had sufficient elements of a "general obligation" to qualify them for such underwriting and trading. Further, in the first major revision since 1934, the authority of National Banks to purchase investment securities was restated and reinterpreted in a new Investment Securities Regulation which became effective on September 12, 1963. This new Regulation for National Banks reflects the Comptroller's effort, within his statutory authority, to enable the banking system to perform more effectively, yet safely, the vital function of faciliating the flow of investment funds into their most productive uses. In a private enterprise economy, this task of aiding the mobility of capital is one of the most significant responsibilities of the banking system. The regulation is challenged as being contrary to paragraph Seventh of 12 U.S.C. 24, presumably because the Comptroller has concluded that a bond may constitute a public security even though it is not supported by general powers of taxation possessed by the obligor of the bond. The contention that in order for bonds to constitute a general obligation of a State or any political subdivision thereof, they must be issued by a political unit possessing powers of general taxation and must be supported by such powers is without merit. Such a requirement clearly is not imposed by the provisions of paragraph Seventh of 12 U.S.C. 24. Similarly, neither the legislative history of those provisions nor any relevant judicial decisions warrants the imposition of such a requirement. Bonds which are adequately supported by substantial resources of a political unit are eligible for bank underwriting and there exists no statutory authority on the basis of which the Comptroller's Office, in the exercise of its regulatory and supervisory responsibility as required by paragraph Seventh of 12 U.S.C. 24, could conclude and therefore require as a condition precedent for bonds being eligible for underwriting, that the political unit issuing such bonds possess general powers of taxation and that the bonds must be supported by such powers. 259 21. Definition of Executive Officer It is stated in paragraph 5235 of the Comptroller's Manual that the term "executive officer," within the contemplation of 12 U.S.C. 375a, means each officer of a bank who, by virtue of his position, has both voice in the formulation of the policy of the bank and responsibility for the implementation of such policy. The responsibility of and function performed by the individual—not his title—determine whether he is an "executive officer." This ruling is challenged on the basis that it is contrary to that provision in 12 U.S.C. 375(a) expressly authorizing the Federal Reserve Board to define the term "executive officer." The Comptroller's Office has concluded that the term "executive officer" as contemplated by 12 U.S.C. 375(a), means any officer of a bank who, by virtue of his position, has both voice in the formulation of the policy of the bank and responsibility for the implementation of that policy. To define executive officer in any other terms would have the effect of depriving many bank employees of the opportunity of obtaining their home mortgage, automobile loan and other normal borrowing needs from the bank for which they work. Banking is perhaps unique in the large number of employees who, for a variety of reasons, are executive officers in name only. A more restrictive definition serves only to deprive the bank of business from its employees who cannot influence their own loan applications. Consequently, the Comptroller's Office has taken a realistic approach to the situation. Its position is entirely consistent with the intent of 12 U.S.C. 375 (a) which was designed to prevent individuals from influencing their own loan applications. It has retained the protection contemplated by the statute by ruling that anyone who can influence the lending policy of the bank and also implement that lending policy is an executive officer within the meaning of the statute. The Federal Reserve Board, prior to the Comptroller's ruling on this subject, had not altered its Regulation in 25 years. Regulation O, as it appeared for these 25 years, stated that the Chairman of the Board, the President, every Vice President, the Cashier, Secretary, Treasurer and Trust Officer were Executive Officers. Subsequent to the Comptroller's ruling the Federal Reserve Board amended its Regulation O so that, as amended, the statutory limitation on loans to executive officers does not apply to a person, regardless of his title, who has no authority to perform and actually does not perform the duties of an executive. 260 22. Real Estate Loan Defined It is stated in paragraph 2000(b) of the Comptroller's Manual that a real estate loan within the meaning of 12 U.S.C. 371 is any loan secured by real estate where the bank relies upon such real estate as the primary security for the loan. Where the bank in its judgment relies substantially upon other factors, such as the general credit standing of the borrower, guaranties, or security other than real estate, the loan does not constitute a real estate loan within the meaning of 12 U.S.C. 271, although as a matter of prudent banking practice it may also be secured by real estate. This ruling and a similar ruling contained in paragraph 2400(c) of the Comptroller's Manual are challenged on the alleged basis that they are contrary to a plain reading of 12 U.S.C. 371 which defines and limits real estate loans, and contrary to rulings by previous Comptrollers. Federal law (12 U.S.C. 371) requires that loans made by National Banks on the security of real estate meet certain requirements v/ith respect to the nature and value of the security, the term of the loan and the manner of its repayment. Section 371 states that "a loan secured by real estate within the meaning of this section shall be in the form of an obligation or obligations secured by a mortgage, trust deed, or other instrument upon real estate which shall constitute a first lien * * *" The quoted language is obviously regulatory, not definitory. If it is a real estate loan, it must meet certain standards, but the section leaves open presumably for the discretion of the bank examiner, to determine which loans are in fact real estate loans, which must meet the minimum security and amortization requirements of the section. Section 371 does not state that any loan made by a bank in which a real estate security interest is taken, is a real estate loan. Section 371 and other provisions of Federal law expressly recognize that in certain circumstances loans secured by real estate are not made primarily on a security of real estate and are to be treated as ordinary commercial loans. Real estate loans have thus been, defined by the Comptroller's Office as not including those loans in which the bank is primarily relying on factors other than real estate. Where a bank is primarily relying on general credit standing of the borrower, guaranties, or security other than real estate the loan does not constitute a real estate loan within the meaning of 12 U.S.C. 371, although as a matter of prudent banking practice it may also be secured by real estate. In the past, a bank making a sound personal loan, from a credit standpoint, was thought by many to be unable to acquire a first or second lien on real estate as additional security, because the loan, which was never intended to be a real estate loan, could not conform to the statutory requirements of Section 371. A bank making a sound personal loan may wish to have a real estate security interest merely as an additional source for paiyment of the loan in the event of a default. The bank may not have any expectation of ever resorting to this real estate security for repayment. To force the bank to regard every loan, having any real estate collateral however incidental, as a real estate loan subject to Section 371 would prevent the bank from taking this additional security in the case of a sound personal loan. Such a construction obviously defeated the remedial purpose of the section which was to require maximum protection for the bank. These rulings are not contrary to rulings of previous Comptrollers, as is evidenced by paragraph 2145 from the Digest of Opinions, which predated the Comptroller's Manual. It was stated in paragraph 2145 that "Occasionally it may be advisable for a bank to take a mortgage on real estate in order to strengthen the primary security for a loan and protect it against some unfavorable contingency. For example, a loan may be made * * * upon the security of an assignment of rents to be paid under a long-term lease with an oil company * * * operating a gasoline station * * *. In such a case the bank might wish to hold a mortgage on the realty itself, in order to increase the certainty of continued receipt of the rental payments. Assuming that the lessee is financially responsible and credit-worthy, the lease cannot be cancelled, the lease rental is adequate to service the loan and pay the principal amount of the loan in full by its such a loan would not be regarded maturity, as a 'real estate loan,' subject to the requirements of section 24 [12 U.S.C. 371]." 23. Improved Real Estate It is stated in Paragraph 2020(d) of the Comptroller's Manual that business and residential property is improved when substantial and permanent improvements have been constructed or developed on the property, or when its value has been enhanced by such improvements in its immediate vicinity. This ruling is challenged on the ground that it is not provided for by law and that it is contrary to rulings of previous Comptrollers. The definition of what constitutes improved real estate is, and always has been the responsibility of the Comptroller's Office. To object to a particular def- inition as not being provided for by law is to merely raise questions of opinion inasmuch as the term improved real estate is not defined in either the statute (12 U.S.C. 371) which imposes certain limitations on real estate loans by National Banks, or in any other applicable Federal law. Prior Comptrollers had held that real estate was "improved" only when there was a completed structure erected thereon. In recognition of economic realities, the present Comptroller has ruled that real estate may be considered "improved" within the meaning of 12 U.S.C. 371 when construction or development has contributed substantially to its value. The construction of a building on the property is not the only, nor necessarily the greatest, "improvement" that can occur to enhance the value of a particular piece of real estate. This ruling merely recognizes the fact that many changes may happen, both on and in the vicinity of the real estate such as affords all the protection to the lender that is contemplated by the statutory requirement that the real estate be improved. The paving on a parking lot in the heart of Manhattan may be more valuable as "improvement" than a two-story barn on a dust-bowl farm. Farmland is deemed "improved" when it is useful for agricultural purposes without further substantial improvement. So too, should business and residential property be regarded as "improved" when substantial and permanent improvements have been constructed or developed on the property, or when its value has been enhanced by such improvements in its immediate vicinity. Of course, whether onsite or offsite improvements have enhanced the value of property, so as to make it improved real estate, is necessarily a question of judgment which can only be resolved in the light of the facts of each particular case. 24. Capital Debentures It is stated in paragraph 1100(b) of the Comptroller's Manual that National Banks may issue capital debentures and capital notes which, to the extent that they are subordinated to the prior payment in full of all deposit liabilities, such debentures and notes are includable in "capital" for the purposes of determining the loan limitation of 12 U.S.C. 84. This ruling is challenged on the grounds that it is not provided for by law and is contrary to traditionally accepted corporate and accounting practice. Title 12 U.S.C. 84 provides that the total obligations to any national banking association of any person, copartnership, association, or corporation shall at no time exceed 10 per centum of the amount of the 261 capital stock of such association actually paid in and unimpaired and 10 per centum of its unimpaired surplus fund. Under the terms of this Office's ruling, the right to receive payment of debenture holders must be expressly subordinated to the right to prior payment in full of all deposit liabilities of the Bank, whether outstanding at the date the debentures are issued or thereafter incurred. Capital notes or debentures so limited have all of the protective effect of capital and surplus insofar as depositors are involved. An examination of the legislative history of the National Bank Act, and relevant judicial decisions subsequent to its enactment establishes the power of National Banks to borrow money and issue debentures in return therefor, the proceeds of which may be used for general banking purposes. In addition, such an examination of the lending restrictions contained in 12 U.S.C. 84 indicated that protection of depositors is the primary purpose of restricting the amount of loans to any person to a stated percentage of the capital and surplus. Consequently, if capital debentures and notes stand legally in the same relationship to depositor as "equity" capital and surplus, they may appropriately be included in the bank's loan base. We conclude, therefore, that the proceeds of capital notes and capital debentures may be included as part of the aggregate amount of unimpaired capital stock and unimpaired surplus funds for the purpose of the computation of the limit on loans to individual borrowers contained in 12 U.S.C. 84, provided appropriate subordination provisions are present. 25. Undivided Profits and Reserves as Included in "Unimpaired Surplus Fund" It is stated in paragraph 1100(c) of the Comptroller's Manual that a National Bank may include as part of its "unimpaired surplus funds" [as used in 12 U.S.C. 84], all capital accounts (other than capital stock) derived from paid-in or earned surplus, undivided profits, tax-paid portion of valuation reserves for loans, valuation reserves for securities and reserves for contingencies. This ruling is challenged on the grounds that it is not provided by law and is in disregard of established bank accounting terms. Our ruling relating to undivided profits and reserves as includable in unimpaired surplus fund, and which is set forth in paragraph 1100(c) of the Comptroller's Manual for National Banks, was based on a study of the legislative history underlying the limitations on loans dependent upon capital and surplus as set forth in 12 U.S.C. 84. Because the protection of deposits 262 was the primary purpose of these limitations the term "unimpaired surplus," as used in the statute, has been ruled to include all capital accounts which are not subject to known charges and which are interchangeable simply by resolution of the bank's board of directors. Such accounts, as a practical matter, stand in the same relative position to deposits as does the surplus account. Examples of such accounts would be undivided profits, valuation reserve for securities and reserve for contingencies. Reserves which are subject to known specific charges, such as a reserve for dividends declared or a reserve for taxes, interest and expenses, would not be includable in "surplus." 26. Interest Rates Charged by National Banks It is stated in paragraph 7310 of the Comptroller's Manual that a National Bank may charge interest at the maximum rate permitted by applicable State law to any competing State lending institution. Where State law permits a higher rate on specified classes of loans (for example, small loans), a National Bank which makes loans at such higher rate is subject only to such limitations relating to the classification of loans as are material to the determination of a rate of interest. This ruling is challenged as being contrary to 12 U.S.C. 85 and contrary to a Federal court decision. As was stated in paragraph 9510 of the Digest of Opinions,1 in enacting 12 U.S.C. 85 "Congress intended that, with respect to interest charges national banks shall have the same powers as any competing State lending institution. State commercial banks and industrial banks both constitute competing elements among lending institutions. Therefore, national banks are empowered to charge interest at the maximum rate permitted by State law to either State commercial banks or industrial banks * * *." Paragraph 7310, which is comparable to paragraph 9510 of the Digest of Opinions, is merely a restatement of relevant court decisions (see, for example, Rockland National Bank of Boston v. Murphy, 110 N.E. 2d 638 (Mass. 1953)) and is entirely consistent with the objectives of Congress beginning in 1863 and 1864, as was clearly stated in the legislative history of section 85, as has been uniformly recognized by previous Comptrollers, and as is reflected in applicable court decisions. To contend now, in 1965, that National Banks are not free to compete with any competing 1 The publication of the Comptroller's Office which preceded and which was replaced by the present Comptroller's Manual for National Banks. State lending institution is to ignore this clear Congressional intent and thus to argue that National Banks are required to operate and compete in a dual banking system under conditions more restrictive and less favorable than those applicable to State-chartered institutions. 27. Messenger Service by National Banks It is stated in paragraph 7490 of the Comptroller's Manual that, in order to meet the requirements of its customers, a National Bank may provide messenger service by means of an armored car or otherwise,, pursuant to an agreement wherein it is specified that the messenger is the agent of the customer rather than of the bank. Deposits collected under this arrangement are not considered as having been received by the bank until they are actually delivered to the teller at the bank's premises. Similarly, a check is considered as having been paid at the bank when the money is handed to the messenger as agent for the customer. This ruling is challenged on the grounds that it violates the state branch banking restrictions incorporated into 12 U.S.C. 36c and that to the extent it involves interstate branching, it is not provided for by law and violates the clear intent of Congress. Rulings of the Comptroller's Office dating back to 1929 have held that the pickup of deposits and the delivery of cash by armored car service is authorized, provided that certain safeguards are met to insure that such activities do not constitute unauthorized branch banking. The ruling in the Comptroller's Manual merely reaffirms this traditional view that such service is a proper incident of the business of banking as authorized under paragraph Seventh of 12 U.S.C. 24. Section 36(f) of Title 12. U.S.C, defines a branch b n k a*- an1 place t \ h u h d i>ocits ->re ret t i \ o ' ov hei ks T j ! or noncv h nt Tbi >, t has b r>n c 1 *hc t ti >rt i f v hich provide aunored t ar ->( i\ ice i n st n<\1 o it ck <ir that the lunds a u being i c n i (v x> the i iio AI C 'MCI a*. it feu the custo ' " " t \x c be V»antlM rut c r this iul ing. i 1 ^ c . 1. ' i t ' ' \ if ' '1 r ' ^ * iVorb the f of the ser i e JA 1 h u v U tl, ninerls do not (ons 1L i { th> T D Tv_nt ui interest m viol ition of Re^iJ? on Q Th'1 Federal Deposit Insurance Goiporation and the Board of Governors of the Federal Reserve System have issued substantially the same rulings applicable to state banks under their jurisdiction. 28. Authority to Act as "Finder" It is stated in paragraph 7200 of the Comptroller's Manual that a National Bank, pursuant to request, may act as "finder" in bringing together a buyer and seller, where the bank's activity is limited to the introduction and it takes no further part in the negotiations for this service, the bank may accept a fee. This ruling is challenged on the grounds that it is not provided for by law and that it permits National Banks to engage in activities of a nonbanking nature and to compete unfairly with other businesses. Commercial transactions, which necessarily entail the coming together of a buyer and seller, most frequently require the financing and related financial services afforded by commercial banks. Where a bank is able to bring together a buyer and seller, it is performing a service both to prospective participants in a commercial transaction and to itself as the possible source of financing such a transaction. In such circumstances, the bank is, as authorized under 12 U.S.C. 24, engaged in the business of banking and exercising a power which is necessary to carry on the business of banking. It must be noted that paragraph 7200 contemplates that the bank's activity be limited to an introduction and that the bank take no part in the negotiations. National Banks, in places where the population does not exceed 5,000, may act as real estate brokers generally. In larger towns, National Banks with trust powers may manage and sell real estate for customers. See Comptroller's Manual, paragraph 7425. This ruling relates to when a National Bank may act as an agent for a buyer or seller of loans and may engage in the management and sale of real estate for others. Assertions to the contrary notwithstanding, a careful analysis of all cases bearing on this question clearly indicates that the Comptroller's ruling is entirely consistent with judicial precedent. 29. Loans Secured by Bank Shares It is stated in paragraph 6030(b) of the Comptroller's Manual that a National Bank may require that a borrower holding shares of the bank execute agreements (1) not to pledge such shares, (2) to pledge such shares at the request of the bank when necessary to prevent loss, and (3) to leave such shares in the bank's custody. This ruling is challenged on the grounds that it violates an express prohibition contained in 12 U.S.C. 83 that a National Bank may not make any loan or discount on the security of the shares of its own capital stock, unless such security shall be necessary to prevent loss upon a debt previously contracted in good faith. As stated in 12 U.S.C. 83, a National Bank may accept the security of its own stock only when such 263 security is necessary to prevent a loss on a debt previously contracted. The ruling contained in paragraph 6030(b) is entirely consistent with this limitation of 12 U.S.C. 83 inasmuch as none of the transactions described in that ruling constitute a pledge of bank stock as security. On the contrary, each or a combination of the agreements described in paragraph 6030(b) are merely means by which a National Bank may insure that bank stock owned by a borrower will be available as security in the event that loss on an existing loan appears likely. The provision of 12 U.S.C. 83 which permits a National Bank to accept 264 the security of its own shares when such security is necessary to prevent loss on a debt previously contracted would be stripped of any meaning and purpose by an interpretation that the bank could not prudently prevent a prior hypothecation or sale of the borrower's assets to the extent that such assets consisted of bank shares. Such an interpreation by a banking supervisor would be irresponsible and subject to criticism. A bank should, in the exercise of prudent banking judgment, be left free of any restraints whatsoever in its ability to reach all assets of a borrower to prevent a loss to the bank. APPENDIX D Selected Correspondence of JAMES J. SAXON Comptroller of the Currency INDEX Selected Correspondence of James J. Saxon, Comptroller of the Currency Subject Armored Car Service Availability of Information Bank Mergers Banking Premises Brokered Deposits Certificates of Deposit Coin Shortage Confidentiality of Reports of Examination Corporate Practices and Procedures Credit Bureau Debt Cancellation Contracts 266 Page 267 267 269 299 299 300 301 301 302 316 316 Subject Direct Leasing Disclosure Requirements Insurance Function International Operations Key Man Insurance Lending Limits New Bank Charters Real Estate Loans Travel Services Trust Regulations Underwriting Page 317 318 319 322 325 326 327 327 328 329 330 ARMORED CAR SERVICE AVAILABILITY OF INFORMATION MARCH 19, 1965. MAY 6, 1965. Hon. JOHN J. RHODES House of Representatives Washington, D.C. This is in response to your inquiry of April 22, 1965, in which you enclosed correspondence from the Armored Motor Service of Arizona, Inc., in Phoenix, Ariz., signed by its president, Mr. S. B. Thomson. Mr. Thomson, who mentions a ruling by this Office applicable to national banks, states that the practice of picking up deposits for customers to be delivered to banks and the handling of money between banks has always been handled by privately owned armored car companies. He is of the view that this is a private enterprise which should not be in competition with the Federal Government in any of its branches. A national bank is a privately owned commercial bank or financial institution and any services performed by it may not reasonably be construed as the activities of a branch of the Federal Government. A national bank's character as a private rather than governmental enterprise is not altered because it is chartered, supervised and examined by this Office, or because Federal law imposes certain restrictions and limitations on its activities. Rulings of this Office dating back to 1929 have held that the pickup of deposits and the delivery of each by armored car service is authorized, provided that certain safeguards are met to insure that such activities do not constitute unauthorized branch banking. We have reaffirmed the opinion that such sendee is a proper incident of the business of banking. Section 36(f) of Title 12 U.S.C. defines a branch bank as any place at which deposits are received, or checks paid, or money lent. Thus, we have ruled that agreements to provide armored car service must make it clear that the funds are being received by the armored carrier as agent for the customer and not the bank. As an element of this ruling, we have also held that a National Bank may absorb the cost of the service, and that such payments do not constitute the payment of interest in violation of regulation Q. The Federal Deposit Insurance Corporation and the Board of Governors of the Federal Reserve System have issued substantially the same rulings applicable to state banks under their jurisdiction. Hon. JOHN E. MOSS, Chairman, Foreign Operations and Government Information Subcommittee of the Committee on Government Operations House of Representatives Washington, D.C. Your letter of February 12, 1965, addressed to the Secretary of the Treasury, asks a number of questions concerning the availability of information from Treasury agencies and the extent to which such availability is responsive to the requirements of the Administrative Procedure Act of 1946. This letter responds to such questions insofar as they relate to the Comptroller of the Currency. 1. In general, section 3 of the Administrative Procedure Act of 1946 (5 U.S.C 1002) applies to the Comptroller of the Currency. 2a. Descriptions of the central and field organization of the Office of the Comptroller of the Currency are published in the Federal Register and in letters to all National Banks from time to time as changes are made. They are also published annually in the "United States Government Organization Manual" and in the "Annual Report of the Comptroller of the Currency." This information is also published by various commercial publications. The Comptroller's regulations "Procedures" (12 CFR 4) and "Fiduciary Powers of National Banks and Collective Funds" (12 CFR 9), which set forth the places and methods whereby the public may secure information or makes submittals or requests, are published in the Federal Register, in the Code of Federal Regulations, in letters to all National Banks and in the Regulations sections of the "Comptroller's Manual for National Banks" and the "Comptroller's Manual for Representatives in Trusts." b. Statements of the general course and method by which the functions of the Comptroller are channeled and determined, including the nature and requirements of all formal and informal procedures, forms, and instructions as to the scope and content of all papers, reports, or examinations are also set forth in the regulations, "Procedures" and "Fiduciary Powers of National Banks and Collective Funds." Additional detailed information on these subjects is contained in the "Manual for Representatives in Trusts," "Comptroller's Policy Guidelines for National Bank Directors" and "Instructions, Procedures, Forms for National Bank Examiners." The first of these manuals is furnished to representatives in trusts and to national banks authorized to exercise fiduciary powers. The other two manuals are furnished to national bank directors and national bank examiners for their guidance. All three are loose leaf manuals which are supplemented from time to time. 267 c. Substantive rules adopted as authorized by law are published as regulations in the Federal Register and in the Code of Federal Regulations (12 GFR 1-20), in letters to all national banks and in the Regulations sections of the Manuals for National Banks and for Representatives in Trusts. d. Statements of general policy and interpretation formulated and adopted for the guidance of the public are published as interpretative regulations in the Federal Register, in the Code of Federal Regulations (12 GFR 1.105 et seq.; 12 CFR 7), in letters to all National Banks and in the Regulations sections of the Manuals for National Banks and for Representatives in Trusts. Interpretative rulings arising out of individual inquiries from national banks have been generalized for the guidance of officials of national banks and their counsel, national bank examiners and other members of the staff of the Comptroller of the Currency and are published in the Rulings section of the "Manual for National Banks" or in the Opinions section of the "Manual for Representatives in Trusts." Individual rulings which are particularly timely are distributed immediately in letters to all National Banks. Significant rulings are also summarized quarterly in "The National Banking Review." In addition to the sections on Rulings and Regulations, the "Manual for National Banks," which is supplemented at quarterly intervals, includes the text of the National Banking Laws and related statutes. The "Manual for Representatives in Trusts" also includes the text of the laws relating to the trust powers of National Banks and instructions, procedures and forms. "The National Banking Review," a journal of policy and practice published quarterly by the Comptroller, provides a forum for the discussion of economic problems relating to banking. Members of the Comptroller's Economics Staff and others interested in these problems contribute leading articles to the Review. Current statistical data and comment on economic, legal and regulatory developments are regularly published in "The National Banking Review." e. Rules addressed to and served upon named persons in accordance with law are specifically excepted from publication requirements of section 3 of the Administrative Procedure Act (5 U.S.C. 1002(a)(3)). Such rules are, in accordance with published rule (12 CFR 4.13(a) (2)), available for public inspection except in such cases as the Comptroller determines (section 4.13 (b)) that disclosure would conflict with the public interest and the proper administration of his responsibilities. 3. The Comptroller of the Currency is required by 12 U.S.C. 1828(c) to include in his annual report to the Congress the basis for his approval of each merger, consolidation, acquisition of assets, or assumption of liabilities approved by him during the period covered by the report. Opinions in such cases are published in the "Annual Report of the Comptroller." They are also released to the press through regular public information channels at the time the action is taken. Other rulings, final opinions, decisions, and orders of the Comptroller of the Currency are available for inspection at the Office of the Comptroller during business hours to persons properly and directly concerned in accordance with the provisions of the procedural regulation of the Comptroller (12 CFR4.13). 4. Section 4.13(b) of the procedural regulation of the Comptroller defines confidential information, lists reasons for its non-disclosure and sets forth the circumstances in 268 which disclosure may be authorized by law and in the public interest. Opinions, decisions, and orders of the Comptroller are included (section 4.13 (b) (2) (iii)) within the definition of confidential information when the Comptroller determines that disclosure would conflict with the principles set forth as reasons for nondisclosure in section 4.13(b) (1). The Comptroller publishes biweekly a "Summary of Actions" which sets forth the disposition made of applications for charter, for a branch, for a title change, for a head office relocation or a branch relocation. The "Summary of Actions" is distributed to all national banks, to approximately 2,500 business firms, lawyers and other interested individuals who have requested to be notified of decisions. It is also released to the Washington press through public information channels and mailed to approximately 150 out-of-town newspapers and publications. In addition, a public information officer responds to press Inquiries concerning the filing and disposition of applications for new bank charters, branches and mergers. 5. Unpublished opinions and orders are not cited or used as precedents in other proceedings. 6. Interpretations and legal opinions are published in the form of regulations in the Federal Register and the Code of Federal Regulations. Such regulations and more detailed interpretations and rulings are published for the benefit of the persons directly concerned with the National Banking System in letters to all national banks and in the various Comptroller's Manuals. Unpublished information, except that required for good cause to be held confidential is, in accordance with published rule (12 CFR 4.13(a)(2)), available for inspection at the Office of the Comptroller of the Currency during business hours to persons properly and directly concerned. The rule provides that a request to examine such information or to obtain a copy or copies thereof must be submitted to the Comptroller of the Currency or to the Regional Controller of the Currency for the: region in which the request arises. Such request must be signed by the person making it or his duly authorized agent who must state the name and address of the person on whose behalf the request is made. The request must set forth the facts, if any, involved, the purpose for which the document or information contained therein will be used if made available, the nature of such person's interest in the matter and the reason or reasons why the reqeust should be granted (12 CFR 4.13(a) (2)(ii)). 7. Many of the records and files of the Office of the Comptroller of the Currency contain information which must be safeguarded in the public interest in order to protect the National Banking System and to enable the Comptroller to administer properly his responsibilities. Such information is disclosed only to such persons and to the extent that the Comptroller determines that disclosure is authorized by law and is in the public interest (12 CFR 4.13, 4.14). National bank examiners are forbidden by 18 U.S.C. 1906 to disclose the names of borrowers or the collateral for loans of banks examined by them to other than proper officers of such bank without first having obtained the express permission in writing from the Comptroller of the Currency. 8. Private parties dealing with the Comptroller of the Currency are not required to resort to organization or procedure not published in the Federal Register. 9. The Comptroller of the Currency does not disclose records, files and other information where such disclosure would conflict with the public interest in the proper administration of his responsibilities as the supervisor of National Banks. Some of the results which might flow from the improper disclosure of such information are set forth in section 4.13(b) (1) of the procedural regulation of the Comptroller. The nature of the information which is ordinarily not disclosed is set forth in section 4.13(b) (2). These considerations, however, do not require the Comptroller to refrain from the publication of rules. 10. Rules relating solely to internal agency management are ordinarily not published. 11. The Comptroller of the Currency does not define "official record" as used in section 3(c) of the Administrative Procedure Act. The standards set forth in the Comptroller's regulation relating to the disclosure or nondisclosure of information (12 CFR 4.13) does not depend on whether the information is a matter of official record or not. 12. In accordance with your request, there are submitted herewith two copies of— Years of Reform, a Prelude to Congress—The 101st Annual Report of the Comptroller. The Comptroller's Manual for National Banks. The Comptroller's Manual for Representatives in Trusts. The Comptroller's Policy Guidelines for National Bank Directors. Instructions, Procedures and Forms for National Bank Examiners. The March issue of The National Banking Review. Pages 104 and 105 of the United States Organization Manual, 1964-65. Notice of New Regional Organization, 27 Federal Register, 4530 and 4531, Friday, May 11, 1962. Summary of Actions. A sample merger opinion. BANK MERGERS APRIL 26,1965. Hon. DANTE FASCELL House of Representatives Washington, B.C. Reference is made to your letter of April 5, 1965, wherein you express your concern with the grave problems which can arise in bank merger cases, where the stamp of approval has been affixed by a banking agency, only to have it destroyed at some future time through the efforts of another agency of the Government, the Antitrust Division. These problems are new to the banking industry and have only arisen since the passage of the Bank Merger Act of 1960. While the legislative history of that Act had been understood by the banking fraternity as making it clear that the role of the Depart- ment of Justice in bank mergers was to be advisory only, the Supreme Court, in United States v. Philadelphia National Bank 374 U.S. 321, ruled that bank mergers were within the reach of the antitrust statutes. This, in effect, as Mr. Justice Harlan indicated in his dissenting opinion, gives the Department of Justice veto power over bank mergers which have been approved by the federal banking agencies. Since this problem of conflicting jurisdiction over bank mergers arose from a statutory interpretation, it appears to me that the solution to the problem lies primarily within the Congress. JANUARY 12, 1965. Hon. JOSEPH CLARK, United States Senate Washington, B.C. In your letter of January 6, 1965, you ask for a status report on the application of Williamsport National Bank, Williamsport, Pa., to consolidate with the First National Bank of Williamsport, Williamsport, Pa. The application has been investigated by our field examiner and the advisory reports required by the Bank Merger Act of 1960 (12 U.S.C. 1828c) have been received from the appropriate agencies including the Department of Justice, a copy of whose report is enclosed for your information. The participant banks have been given a copy of this advisory report. Williamsport National Bank has a total IPC deposits of $22 million and the First National Bank of Williamsport has total IPC deposits of $17 million. These small banks are second and third in size, respectively, in the greater Williamsport-Ly coming County area. It is estimated that the city of Williamsport has a population of 32,000, the greater Williamsport area 75,000, and Lycoming County 110,000. Presently, there are 14 banks in the county with total deposits of some $139 million. While the economy of Williamsport and Lycoming County is not stagnant, I am sure that you will agree that it could well use a stimulant to further, more rapid and sustained economic development. We believe that sound, well-managed banks of a size capable of attracting and financing new industry and commerce are indispensable to promoting community growth. While these small banks in Williamsport have done well, we feel they could do much more for the economic development of their area of Pennsyl269 vania were they given the opportunity to combine their resources and channel their efforts in this direction. We do not agree with the conclusions reached by the Department of Justice in its advisory report on the consolidation of the Williamsport banks. The consolidation will, we believe, serve to bring new competitive vigor to the banking structure of the area and will not, as the Department of Justice contends, have an adverse effect upon banking competition. The report of the Department of Justice has special significance because of the authority of the Department to institute judicial proceedings under the Sherman and Clayton Antitrust Acts against consolidating banks. The impact of an antitrust suit on any bank is grave; the impact on small banks, as in Williamsport, could be disastrous. Realizing this, we cannot, with regard for our responsibilities under the National Banking Act, plunge National Banks applying for permission to consolidate into the bog of an antitrust suit without first advising them of the possible and probable consequences. An antitrust suit against the Williamsport bank would affect their operations in several respects. Because of their relatively modest resources and limited earning capacity, they could not prudently undertake to pay the heavy legal fees and court costs of antitrust litigation. These small banks, struggling as they are to improve the economic well-being of Lycoming County and its residents, can ill afford the confusion in their daily operations which an antitrust suit would certainly create. An antitrust suit brought against them in the name of the United States could seriously damage the banks' name and public image which they have earned by many years service and which they cherish as essential to their continued sucessful operation. Further, if they were able to consolidate before a court decreed their union illegal, their problems would be compounded as they attempted to work their way through the labyrinth of a bank divestiture proceeding. While this Office believes that this proposed consolidation would be in the public interest, we have doubts, stemming from the above considerations, that these small Williamsport banks should shoulder the risks of an antitrust suit no matter how beneficial their proposed consolidation may be for the economic betterment of Lycoming County and the banking structure of Pennsylvania. I shall, of course, be available to discuss this matter further with you at your convenience should you desire more information. 270 DECISION OF THE OFFICE OF THE COMPTROLLER OF THE CURRENCY ON THE APPLICATION TO CONSOLIDATE WILLIAMSPORT NATIONAL BANK, WILLIAMSPORT,, PA., AND THE FIRST NATIONAL BANK OF WILLIAMSPORT, WILLIAMSPORT, PA. STATEMENT On October 16, 1964, the $34.2 million Williamsport National Bank, Williamsport, Pa., and the $22.2 million First National Bank of Williamsport, Williamsport, Pa., applied to the Comptroller of the Currency for permission to consolidate under the charter of the former and with the title "Williamsport First National Bank." Williamsport, with a population of 42,000, is located in northeast central Pennsylvania along the West Branch of the Susquehanna River, 85 miles north of Harrisburg. Williamsport is the focal point of a surrounding area denominated locally as Greater Williamsport, which has a population of 74,755, and is the county seat of the largest county in area in Pennsylvania, Lycoming County, which has a population of 109,367. No other town in the county approaches Williamsport in size and, in fact, it is the only city of its size for a distance of some 65 miles in any direction. A municipal airport with scheduled flights, railways, and road transportation give easy access to and from Williamsport. The area will benefit from federal highway projects now under construction, particularly from the Keystone Shortway (Interstate 80), which will ultimately extend from New York to San Francisco via Chicago and will pass near Williamsport. The economy of the Williamsport area is based principally on industry and agriculture, with recreational facilities in the outlying areas near the river and education also providing some stimulus. At the turn of the century, Williamsport was known as the largest lumber city in the world but the depletion of the nearby forests forced the city to turn to more diversified industry. Now there are 207 industrial establishments operating in Lycoming County and manufacturing such varied products as airplane engines, radio tubes, steel, and paper napkins. The Williamsport Technical Institute, a division of the Williamsport Area Joint Schools, has substantially contributed to the development of a skilled labor force to attract industry by training and retraining adults and high school seniors to work in modern plants. There are 1,490 farms, averaging 140 acres per farm, in the county which are principally devoted to truck farming and dairying. Also contributing to the county's economy is Lycoming College, with 1,260 students. The economic prospects for the Williamsport area are promising because of the success of local efforts to attract diverse industries and to provide necessary educational opportunities. In addition, the national program of providing first-rate highway facilities to all parts of the country should greatly advance the prospects for Williamsport because some of these highways will link that city to the east and west coasts. The applicant banks are located in the center of Williamsport and each has one branch. The major competitor in the city is the $42.8 million Northern Central Bank & Trust Co., the resulting bank of a merger in 1963 which made it the dominant bank in Williamsport. Two smaller banks in the Greater Williamsport area have resources of some $19.8 million. Nine other banks in Lycoming County, ranging in size from the $7.5 million Muncy Bank & Trust Co., Muncy, to the $1.4 million First National Bank of Ralston, Ralston, also compete with the applicant banks. In addition, three savings and loan associations in Williamsport compete for saving's accounts and mortgage loans. This proliferation of banking units in Lycoming County reflects the extent of competition which the applicant banks encounter in the area they serve. While most of the banks in the county are small, they nevertheless provide alternate banking sources for individuals, farmers and small businessmen who make up a large portion of the local banking customers. The need in Williamsport is for a bank which can offer effective competition to the now dominant Northern Central Bank and can attract new industry and commerce which will stimulate the local economy. Moreover, the larger industries and commercial establishments in Williamsport require larger loans and more services, such as Lock Box Service, than either applicant bank can provide at the present time. First National Bank, for example, must send documents daily to a larger bank 200 miles distant for data processing in order to offer its customers efficient demand deposit accounting and, in a few instances, payroll accounting. Alone, neither bank can justify the acquisition of electronic data processing equipment; as a consolidated bank, they could invest in this equipment and thus offer modern banking services in an efficient manner. Size and equipment are only as effective as the men who use them, however. Both applicant banks have been fortunate in the quality of management in the past and at the present time. But the problem in both banks of management succession and of competition with other banks for specialists in such fields as trusts and commercial lending can no longer be ignored. Having considered the statutory criteria of the effect of the transaction on competition, the convenience and needs of the community and the management, we would be inclined to hold that the proposed merger is in the public interest. The indication of the Department of Justice in its agency report to this Office that litigation to enjoin the proposed consolidation is likely, casts a different light on the transaction. We must consider, pursuant to the Bank Merger Act of 1960, the future earnings prospects of the applicant banks. The resources and earning capacity of these banks do not permit them prudently to sustain the heavy legal fees and court costs of protracted antitrust litigation. The effect of such burdensome expenses on future earnings could be seriously detrimental. There is also the responsibility, entrusted to this Office by the Congress, of supervising national banks to insure their solvency and liquidity. We intend to carry out our mandate with regard to this application. Besides the oppressive costs involved in defending an antitrust suit, the confusion in daily operations and the damage to the banks' name and public image which they have earned by many years service could have a grave impact on the condition of these national banks. Further, if they were able to consolidate before a court decreed their union illegal, their problems would be compounded as they attempted to work their way through the labyrinth of a bank divestiture proceeding. As the applicant banks are effectively blocked by the threat of litigation from improving and making more rational their operations by means of the proposed consolidation, it is reasonable to anticipate their joining forces with banks outside the Lycoming County area in the near future. This type of union would offer many of the advantages of the proposed consolidation, such as bringing in new personnel and increasing funds to serve the growing Williamsport economy and insuring that it does indeed grow. Hopefully, such a union would allow the banks to develop naturally as regional banks, capable of giving the Williamsport area public the banking service, it deserves, without threat of litigation and without harassment. Having considered the consolidation application in the light of the relevant facts and our statutory mandate, we are compelled to deny permission to consolidate. APRIL 21, 1965. 271 Hon. WRIGHT PATMAN Chairman, Committee on Banking and Currency House of Representatives Washington, D.C. AUGUST 24, 1965. The Office of the Comptroller of the Currency appreciates the opportunity to present its views on S. 1698, which passed the Senate and was referred to the Committee on June 14, 1965. Secretary Fowler has authorized me to submit to you and the members of the Committee the following statement of the views of this Office, which I have, of course, discussed with him. However, this statement does not necessarily in all respects represent the views of the U.S. Treasury. Public policy toward bank mergers has been in a chaotic state since the Supreme Court's Philadelphia decision in 1963. There, although a majority of the Court agreed that the Bank Merger Act of 1960 remained in full force and effect, they held that bank mergers are also subject to section 7 of the Clayton Act. These two positions are fundamentally irreconcilable. Whereas the Bank Merger Act requires the bank regulatory agencies to weigh the public interest in bank merger proposals according to seven criteria carefully tailored by Congress to fit the realities of banking, the Clayton Act applies a narrow competitive test initially fashioned for the unregulated industries where competition serves as virtually the sole safeguard of the consumer interest. The Philadelphia decision did nothing to provide definitive guidelines for the banking industry and its supervisory authorities for the reconciliation of these diverse criteria. The chaos in bank mergers was further heightened by the Lexington decision which ruled that a violation of section 1 of the Sherman Act when applied to bank mergers is to be determined by the same tests to be applied in a section 7 case. In effect, therefore, sections 1 and 7 are made interchangeable with respect to bank mergers. With the banking agencies and the Department of Justice applying statutes having conflicting criteria, it is small wonder that the ensuing clashes have befuddled the public and aroused the banking industry. The banking committees of both houses are to be commended for their current efforts to resolve the statutory conflict. In my view, the considerations which led the Congress in 1960 to enact the Bank Merger Act, with its recognition of the need for merger criteria specifically designed to fit the unique industry of banking, are still compelling today. Those considerations make it preeminently clear that the traditional criteria of the 272 antitrust statutes developed in connection with mergers in the unregulated industries cannot be fittingly applied to bank mergers. In the unregulated industries mergers may be freely undertaken, subject only to prosecution under the antitrust laws. In banking, however, mergers require the prior administrative approval of a regulatory authority, and the regulatory agencies in reaching their decisions apply a variety of statutory criteria relating to the banking and public consequences of proposed mergers. The desire to merge is critically affected by the power to branch. Merger applications rarely appear in no-branch States because a merger under those conditions usually requires the closing of one of the merged banks. Thus, two tools of structure control are effectively lost where branching is prohibited, and needed bank expansion must take place almost entirely through new charters. The public benefits which may be derived from mergers stem basically from the economies of largescale enterprise, and the greater variety of services which larger firms may offer to consumers. These benefits will arise where increases in the scale of operations yield savings in costs, or where a broadening in the lines of production or the extension of operations to new markets permit greater dispersion of risks and thus allow the undertaking of ventures unsuitable for smaller firms. A larger and more broadly based bank may also be able to offer specialized services which are not profitable for smaller institutions, and should be able to move capital more efficiently from surplus to deficit areas. Moreover, the legal lending limits of banks require the presence of larger institutions to meet the needs of larger businesses most proficiently. In our public policy for the unregulated industries, we have generally distinguished between the growth of firms through internal expansion and their growth through merger. Growth through merger has been viewed with greater public concern because it entails the elimination of competitors and, for this reason, merger limitations have been imposed through the antitrust laws. The direct administrative controls applied to bank mergers are also based in part upon the competitive effects of such mergers, but, as we shall see, the banking authorities apply a variety of other public interest criteria in deciding bank merger cases. These criteria are specifically related to the fact that the banking structure is under direct public control. There is some probability that growth through merger may have a more adverse effect on the liveliness of competition than growth through internal ex- pansion. However, there are countervailing considerations. A merger may enable a firm to acquire plant, personnel, and market-access not otherwise readily attainable, or attainable only at greater cost. More fundamentally, even though the intensity of competition may be adversely affected by growth through merger, merger may nevertheless produce benefits of larger-scale production which are in some degree passed on to consumers in the form of improved service or lower prices. The task of public policy is to allow those increases in the size of firms that are, on the whole, beneficial to consumers, while restricting those that are, on balance, harmful. There are two reasons why merger may often be the preferred course of expansion in banking, even though in comparable circumstances reliance on internal growth may be more appropriate for the unregulated industries. First, the banking authorities have a positive responsibility to see that the public convenience and need for banking services and facilities are met. In carrying out this responsibility, they do not have the authority to require the provision of service such as is found in the fully regulated industries like the "public utilities"; their choices are limited to the private proposals for bank expansion presented for their approval. If they find that a proposed merger will yield public benefits and they see no superior means for achieving these benefits either at hand or in clear prospect, they have a strong positive reason for approving the merger. In the unregulated industries, there is no public responsibility to fashion industry expansion according to the public need; reliance is placed on private initiative and no public authority faces the problem of choosing the form or method of industry growth. Second, in choosing the best means to serve the public convenience and need for banking services, the banking authorities must appraise the alternatives in terms of the effects on the solvency and liquidity of competing banks. Bank merger proposals are generally designed to provide new services to a community, to provide services at lower cost, or to enter new markets. The alternative means of achieving these purposes are new charters and de novo branching. If the existing banks in a market are poorly managed, financially weak, or unpregressive, such added competition may threaten their solvency or liquidity and merger may constitute the only effective means of bringing improved service to a community without posing a threat to bank viability. In the unregulated industries, there is no public concern to safeguard individual firms against failure. Indeed, in these industries freedom to compete and to eliminate less efficient rivals is essential to the reliance placed on private initiative to serve consumer demands. It is therefore appropriate in the freely competitive industries to impose more severe restrictions on growth through merger than are applied to banking. Bank mergers have sometimes been opposed on the ground that, although they may improve service for some classes of consumers, they may do so at the expense of others. Some classes of consumers, however, have needs which only larger banks can serve efficiently. If other classes of consumers are disadvantaged by a merger, a new opportunity is presented to competing banks and the banking authorities may respond by authorizing new charters or new branches. In this way, the needs of all classes of bank customers may be served most efficiently and most effectively. The Bank Merger Act of 1960 provided for direct administrative control of bank mergers by the banking authorities, and established broad public interest standards to guide the administration of these controls. In addition to the "effect of the transaction on competition (including any tendency toward monopoly)," the banking agencies are required to consider the financial history and condition of each of the banks involved, the adequacy of their capital structures, their future earnings prospects, the general character of their management and, most significantly, "the convenience and needs of the community to be served." Mergers are to be approved only where, after considering all of these factors, the transaction is found to be "in the public interest." Since the passage of the Bank Merger Act, however, two Supreme Court decisions have subjected bank mergers to the antitrust laws. This has given rise to ambiguities of policy and conflicts of purpose. The problems are both philosophic and procedural. There is no serious dispute about the desirability of applying antitrust principles to the unregulated industries. Since in those industries primary reliance is placed on individual initiative and private enterprise to meet consumer demands, there are justifiable reasons for preserving freedom of entry and restricting the acquisition of market power in order to enable the competitive forces to function. In banking, however, entry and expansion are under direct public control. The competitive forces are purposefully restricted in order to safeguard the viability of the banking system, and an effort to apply conventional antitrust principles in these circumstances is almost certain to conflict with bank regulatory objectives. This is well demonstrated by the difficulties that have been encountered under the Bank Merger Act since the 273 Philadelphia and Lexington decisions brought bank mergers under the antitrust laws. Although the banking agencies must continue to reach their decisions according to the broader public interest standards set forth in the Bank Merger Act, their decisions are now subject to attack in the courts under the narrower standards of the antitrust laws. This impasse can be clearly resolved only by exempting bank mergers from the antitrust laws completely as has been done in other regulated industries,, or by subjecting such mergers to the full application of those laws. If this latter course is chosen, the Bank Merger Act should be repealed. There would seem to be no valid reason for subjecting banks to more onerous premerger requirements than apply in the unregulated industries if bank mergers are to be subject to attack under the antitrust laws. More fundamentally, if it is to be public policy to apply conventional antitrust concepts to banking, it logically follows that bank entry and bank branching should also be free of direct public control. The least satisfactory course is the present one of entrusting regulatory powers to the banking agencies and judging the exercise of those powers on the assumption that the competitive forces are to be fully preserved and fully operative. It should be observed, however, that a decision to move toward free bank entry and expansion raises questions which go beyond the problems of banking structure. It is highly doubtful that bank operating practices could be effectively supervised, and the viability of the banking system sustained, without some form of public control over the banking structure. There is one intermediate course through which a reconciliation might be achieved between the Bank Merger Act and the antitrust laws with or without a statutory change. The courts, in antitrust cases involving bank mergers, could take cognizance of the fact that banking competition is restricted through public regulation, and that bank mergers receive prior administrative approval from a public authority according to broad public interest standards which transcend purely competitive considerations. A statutory provision embodying these standards would produce greater consistency between the Sherman and Clayton Acts and the Bank Merger Act of 1960 in bank merger cases. In fact, this new direction to the courts could be made applicable to the pending cases in which bank mergers are being challenged. This approach would not be as clear cut as the other alternatives we have presented, and would undoubtedly leave large areas of uncertainty for long periods. Nevertheless, if in bank merger cases the courts con274 sidered the unique competitive conditions which prevail in the regulated industry of banking, there would be a greater likelihood that the antitrust criteria developed principally with the unregulated industries in mind could be adapted to banking without impairing the effectiveness of bank regulation. An effort to test this approach for accommodating these two basic strands of our public policy was recently undertaken by the Comptroller of the Currency as an intervening defendant in an antitrust action relating to the merger of the Mercantile Trust Co. N.A. and the Security Trust Co., both of St. Louis. (A copy of the pleadings filed in the St. Louis case is enclosed.) There is one administrative procedure under the Bank Merger Act which should be modified if that act is to remain in force. At present, the banking agencies not directly involved in a merger decision are required to submit advisory opinions on the "competitive factor" to the responsible agency. Since this factor comprises only one of the seven considerations required to be taken into account, the advisory opinions do not represent a judgment on the desirability of a merger. Nevertheless, differences between the advisory opinions and the decisions on mergers have often been falsely cited as evidence of differences in merger policy among the banking agencies. Moreover, 5 years of experience under the Bank Merger Act have demonstrated that the advisoiy opinions of the banking agencies not faced with the responsibility of decision are ordinarily routine and rarely present facts or ideas unknown to the responsible agency. There seems to be no proper reason for continuing this procedure. Retention of the Department of Justice advisory opinions raises other considerations, however. Under the terms of the Bank Merger Act, the Department of Justice receives copies of the comprehensive merger applications filed by the banks. These applications are replete with detailed economic data, often of a confidential nature. They yield data tantamount to that which Justice, in a merger case in an unregulated industry, would attempt to secure by investigation and pretrial discovery. This procedure has the incongruous effect (especially in view of congressional failure to approve general prernerger notification legislation sought by the Antitrust Division) of making it easier for the Department of Justice to attack a Governmentapproved merger in the bank industry than any other merger, either in a regulated or an unregulated industry. The merger application form not only compels disclosure of material facts in sufficient detail to enable Justice to institute a suit without further investigation, but also compels the banks to admit to conclusions of law which, on trial of a case, forecloses them from raising their best defense. T h e critical issues in every antitrust case filed against a bank is the definition of the rck^pn' ma ket . w i the Jii c of common, e. It us obwo <s uuil the biO£u.Vr the i \ ' ant narLet and the 2 l1 ic d'^ %1 SL- the lines "->{ (.'iii.-i-"- •' in any s/kci merger situation, the less signXu^nt v ill L" the anticompetitive i i r i ' i n (^ that meig( r. bliifv ;hcse a:e trie critical i .sue i *v ' et' vi:/ir"*c' h< :> * u; in an anfilrir-t suit, it is ii',: ' n! i.nJait i<> the La A1 ;<ppl\in*T ior a n e r ^ i !)• ( \ a.-/ s: !.y ^ of >„ denial f^r aue pux^ss to a;mpc ! tlu'ii t >, id,/ ; ;•> a dc.sn tii-n (f a u v ^ c U t i . p ' L ' t the <>m\iph ^ U*nilv.iy from \»hicL ~*~> ;J I 'it "'IP''. (' »i's :, >:c der'u jd--w!'ich does not a« rcid with the e< >- . r.>l, i.1 l;'"'.s of aicj.'opcratu), s ' I ' * Philc(\r\phla .uM Lc\inoto>' c J>C>. '.,t!i tlxv i ivJiiiKO on S t i ' j '»i lrHi bulking b \ \ s v.cl i l ic L>.'. ,r ' r , (,i:venifia'."1 , n «;ir \'l depes'+o} s. /cl nothin i to cli-i'V t)\n moT.i.1'1 \ .>. :cl^\ m - .a:k°i i i hanki-^ iin'' ,' ->-. v. u:»t wo IILJ\{ s i i x f'letOiOie, it : obvious t.i ,t. •* ' vr >' "•' ,v, S 16 ^ ie - ijjc">11 id^al. Xone{.I'o1.*" . -. o <: "MV)ii tho I .il ••'tv " «e ii is a step in die r<rht (Hi >rt- p p*o idi'v-" a (ons<ructhe. albeit temryc: ti\. v l i: on u* ilv i .voti^ pi obi*11 s of the bank mcis^ci, \\"e the'ofrre ^rc \i\ lc-crmu^ "ifl that this subcoiiiinitt"^ i t \ o r a i ! v coneiclor S. 1 GOG. If, ho ( v . U s L ^ M - - t V iur.nni-t of *h- Committee th.'t the exemptions and prot<< lions provided in S. 1 698 >li mid noL be adopts.cl we wc^sid \i^orously ur're i V v' )PTr 1 't o c to amend the appropriate statutes to ie |i !,, i"ic t "nil» tri> corridor CJ1 ol the Ci/cria set foith ir «h" P.-nk IM^rirn / • t in 'ud';in'; tl.t' legality of a Vink r>i : .;rr. ^ach a ;t it^tory piovisici iei|uir\rrjr i]\c fd' _s t i roT.jki'-r a'l <K tli^se tiitoiia v*ould, ir. " I T o;i;ii c:i, deadly tone! to p'ocluc^ moro consistem » I M V C , i. il,e SliiTH1, n ..nd Cla\if:i Acts on the one V- ;. ,r:d the b.^k Me->rr Act of P50 on the cthei' I MI i. m tl1 >vo ca-.es wlier'* tht1 /nntrM'-t division r'-.'^Viyj. I or « LaJle v.y<- m the -oui'.s tno judgment of f l:^ .'\Cxi.-apt i"<", L O I \ i-.^cnev in appioxing a nvrgcr. Cu' h a m \ / dir^rLi'^n to the iouit«, as here rec ••., me >n i1, c.'ii'd <ira sl^vci.i be made applicable in v well. %'> ,iii\ others i k ' i ma h" htigau-d in ihi 1-iture. IIKICC1' . svf'i a sLat H n y :1 Iaction would do much to cl'irl'Kit t'ie i haos, t. ntiovor>y and cc nfusion that nc-.. c:.Is»ts between the b~.nl: regulatory agencies on the one hand and the Department of Justice on the other, because the courts are not now required to consider the criteria as set forth by the Congress of the United States in the Bank Merger Act of 1960. Un- less this is done, we have little hope of any reasonable clarification and guidance in administering the Bank Merger Act. United States District Court, Eastern District of Missouri Civil Action No. 65C-241O) UNITED STATES OF AMERICA, PLAINTIFF, V. MERCANTILE TRUST COMPANY, NATIONAL ASSOCIATION AND SECURITY TRUST COMPANY, DEFENDANTS Filed: July 7, 1965 MOTION OF COMPTROLLER OF THE CURRENCY JAMES J . SAXON TO INTERVENE AS A DEFENDANT PURSUANT TO RULE 2 4, FEDERAL RULES OF CIVIL PROCEDURE The Comptroller of the Currency, James J. Saxon, pursuant to rule 24, Federal Rules of Civil Procedure, hereby moves this Court for leave to intervene as a defendant in this action, and to file the proposed answer attached hereto and made a part hereof, on the following grounds: 1. The alleged representation by plaintiff, United States of America, of the interest of the Comptroller of the Currency James J. Saxon is or may be inadequate and the said Comptroller of the Currency James J. Saxon will or may be bound by a judgment in this action, pursuant to rule 24(a) (2), Federal Rules of Civil Procedure. 2. Defendants, as part of their defense, rely on approval of the merger in issue by the Comptroller of the Currency James J. Saxon on August 4, 1964, pursuant to rule 24(b) (2), Federal Rules of Civil Procedure. Grounds (1) and (2) as set forth above are further established in the Points and Authorities in Support of Motion attached hereto and made a part hereof. July 8, 1965 By JAMES J. SAXON, Comptroller of the Currency. United States District Court Eastern District of Missouri Civil Action No. 65C-241 (1) UNITED STATES OF AMERICA, PLAINTIFF v. MERCANTILE TRUST COMPANY, NATIONAL ASSOCIATION AND SECURITY TRUST COMPANY, DEFENDANTS Filed: July 8} 1965 STATEMENT OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION BY COMPTROLLER OF THE CURRENCY JAMES J. SAXON TO INTERVENE AS DEFENDANT. Introduction The subject cause, is instituted by the Department of Justice, in the name of the United States, to prevent 275 the merger of the defendant banks, which merger was approved by the United States acting through its Comptroller of the Currency James J. Saxon. The gravamen of the subject cause is that the proposed merger of defendant banks, approved by the United States through the Comptroller of the Currency, will be illegal under section 1 of the Sherman Act (15 U.S.C. 1) and section 7 of the Clayton Act (15 U.S.C. 18). The proposed merger of the defendant banks was approved by the Comptroller of the Currency James J. Saxon in a written statement dated June 24, 1965, after consideration by said Comptroller of the several statutory criteria required to be taken into account and pursuant to the authority vested in said Comptroller by the National Banking Act (12 U.S.C. 215a) and the Bank Merger Act of 1960 (12 U.S.C. 1828(c)). The action and authority of Comptroller of the Currency James J. Saxon in approving the merger, pursuant to the statutory authority vested in said Comptroller to approved mergers of national banking associations, will be nullified if the judgment demanded by the plaintiff is granted. Intervention of Right Rule 24(a) of the Federal Rules of Civil Procedure provides, in part, as follows: (a) Upon timely application anyone shall be permitted to intervene in an action: * * * (2) when the representation of the applicant's interest by existing parties is or may be inadequate and the applicant is or may be bound by a judgment in the action. * * *. If the plaintiff is successful in the subject cause, the action and authority of the Comptroller of the Currency James J. Saxon in approving the merger in question, pursuant to the statutory authority vested in the Comptroller by the National Banking Act (12 U.S.C. 215a), and the Bank Merger Act of 1960 (12 U.S.C. 1828(c)), will be nullified. Because of the responsibilities imposed upon the Comptroller of the Currency by the National Bank Act (12 U.S.C. 1, et seq.) and related statutes in a merger approved by him is a continuing one and not an interest that ceases upon approval of the merger. The factors which the Comptroller is required to consider when passing upon a merger application are couched in language which contemplates the future welfare and operation of the bank resulting from the merger. For example, by the statute the Comptroller is required to consider, among other factors, the bank's "future earnings prospects" and "the general character of its management." (See 276 12 U.S.C. 1828(c).) After the merger is approved, the Comptroller's interest continues undiminished. Resulting national bank is subject to the supervision of the Comptroller of the Currency. Any action against such national bank, particularly this lawsuit which is predicated upon action of the Comptroller, a result of which may adversely affect the welfare of the participant national bank and the resulting national bank, affects the interest of the Comptroller of the Currency. Moreover, in desiring to have sustained the merger approved by him, the interest of the Comptroller of the Currency therein transcends his interest in protecting the welfare of the national bank resulting from the merger. Among the several statutory factors required to be taken into account by the Comptroller in passing upon a proposed merger, the Comptroller must determine that it will serve the convenience and needs of the community. Having determined that, among other things, a proposed merger will benefit the public interest, the Comptroller has an interest on behalf of the public, and indeed a duty to the public, to encourage completion of the merger and to bend his efforts to remove obstacles thereto. The interest of the Comptroller of the Currency James J. Saxon in protecting the public interest of the United States, as entrusted to him by the Bank Merger Act of 1960, and involved in the subject cause, cannot be adequately represented by any other existing party. The plaintiff cannot adequately represent the Comptroller's interest because the gravamen of its complaint is to prevent a merger which the Comptroller, after due consideration, has approved. The interest of the plaintiff in this case is not that of the United States, but only the interest of the United Sates as viewed by one agency thereof, namely the Department of Justice, particularly the Antitrust Division thereof. The Comptroller of the Currency, another agency of the United States is also charged with representing the public interest of the United States, and the Comptroller has a different position as to where lies the public interest of the United States with respect to the subject case. The Comptroller of the Currency is equally entitled to represent the interest of the United States which, by statute, is entrusted to him. Because of the contradictory positions taken by the plaintiff under antitrust laws and the Comptroller under the banking laws, it is impossible for the plaintiff to represent the interest of the Comptroller of the Currency in this case. The interest of Comptroller of the Currency James J. Saxon in the subject case cannot be adequately represented by defendant banks. Although defendant banks are ably represented by capable counsel, such counsel does not possess the expertise of the Comptroller and his staff concerning the subtleties of a bank merger application. Years of experience with mergers involving national and other banks of all sizes have afforded the Comptroller a sphere of knowledge with respect to bank mergers much greater than any other nonbanking governmental officer or private citizen. It is further pointed out that under 12 U.S.C. 215a and 1828(c), that Comptroller of the Currency James J. Saxon took into account several factors, including the competitive effects, in deciding to approve the merger of defendant banks. The relative weight accorded to each such factor was within the judgment of Comptroller of the Currency James J. Saxon. The defendant banks were not privy to the deliberations of the Comptroller of the Currency and, therefore, they are not in a position to know the relative importance attached to the various factors taken into account by him. Consequently, the defendant banks are not in a position to represent Comptroller of the Currency James J. Saxon in the subject action. Permissive Intervention Rule 24(b) ( 2 ) , providing of permissive intervention, provides, in part, as follows: When a party to an action relies for grounds of claim or defense upon any statute or executive order administered by a Federal or State governmental officer or agency or upon any regulation, order requirement, or agreement issued or made pursuant to the statute or executive order, the officer or agency upon timely application may be permitted to intervene in the action. The Comptroller of the Currency also has a right to intervene in this cause under rule 24 (b) of the Federal Civil Procedure. The Comptroller of the Currency is vested with exclusive authority under 12 U.S.C. 215a to approve or deny the merger of two or more banks where the resulting bank is a national association. His authority is augmented by the Bank Merger Act of 1960 (12 U.S.C. 1828(c)), which instructs him to consider seven factors, including the competitive impact of the merger, in determining whether or not the merger will promote the public's interest. Since the defendant banks in this suit rely upon the validity of the Comptroller's order approving this merger as a defense to the claims of the plaintiff, it is proper that the Comptroller be permitted to intervene. The Comptroller's approval is at the very basis of the action, in fact, such approval is a proximate cause of such action. It is difficult to conceive how the Comptroller's approval would not be considered to be an essential ground in testing the legality of the merger. The resolution of the issues here presented requires the court to consider the spirit of rule I, Federal Rules of Civil Procedure, which provides that rule 24 "shall be construed to secure the just * * * determination" of this action. In United States v. El Paso Natural Gas Company et al, 376 U.S. 651, (1964), Mr. Justice Harlan, in his opinion, concurring in part and dissenting in part, said: This case affords another example of the unsatisfactoriness of the existing bifurcated system of antitrust and other regulation in various fields. In this case, the Federal Power Commission had indicated its approval of this merger as being in the public interest. The Department of Justice, however, considered the merger to be violative of the antitrust laws and, for that reason alone, against the public interest. This Court, under the present scheme of things has no choice on this record but to sustain the position of the Department of Justice, as indeed it has felt constrained to do, albeit in my view with less justification, in other recent cases involving dual regulation. Cf. UnitedStates v. Philadelphia National Bank, 374 U.S. 321; United States v. First National Bank and Trust Co., decided today, * * *, and my dissenting opinions in those cases. It would be unrealistic not to recognize that this state of affairs has the effect of placing the Department of Justice in the driver's seat even though Congress has lodged primary regulatory authority elsewhere. It does seem to me that the time has come when this duplicative and, I venture to say, anachronistic system of dual regulation should be reexamined. This Court has not had the benefit of an amicus brief from the Federal Power Commission. Similar thinking motivated Chief Justice Chase in The Steamer Grey Jacket v. United States, 5 Wall. 370, 72 U.S. 370, to permit counsel for the Treasury Department to present his argument because "the Court is desirous of all the light that can be derived from the fullest discussion." The Court in Fahey v. O'Melveny & Myers, 200 F. 2d 420 (9th Cir. 1952), cert. den. 345 U.S. 952 (1953), had an analogous problem before it when it was called upon to decide whether or not the presence of the Home Loan Bank Board and its members were indispensable to the lawsuit. The Court speaking through Judge Bone, at pages 452-453, stated: * * * the presence of the Home Loan Bank Board and its members is required in this action. The relief requested requires the redivision of the present Eleventh District into 277 two districts for there can be one and only one bank to a district. It requires the reactivation of the Los Angeles Bank * * * None of these requirements or any other essentials to the granting of the relief prayed for in the Los Angeles Action is possible without action by the Board since under section 12 of the act, no bank may exercise any functions vested in it by the act except "subject to the approval of the board." To us it is obvious that the decree of the court which was capable of granting the relief which the appellees and Los Angeles seek would ncessarily have to require the Board "to take action * * * by exercising * * * a power lodged in it." Williams v. Fanning, supra, 332 U.S. at page 493 * * *; Daggs v. Klein, supra. Certainly no mere subordinate bank which was itself subject to the jurisdiction of the Board has the power or authority which must be exercised to effectuate such a decree. [Emphasis supplied.] Plaintiff's counsel argued in the case of United States of America v. Third National Bank in Nashville and Nashville Bank and Trust Company (D.C.M.D., Tenn. (National Division), Civil Action No. 3849) and in the case of United States v. Crocker-Anglo National Bank et al. (N.D. Southern Division, Civil Action No. 41808) that because the actions were brought in the name of the United States, he as counsel for the United States necessarily represented the Comptroller of the Currency who is an officer of the United States. Such argument, however, ignores the fact that the position of the United States is not in every case an indivisible one, but that different officers of the United States may have divergent interests in the same case. E.g., Jackson, Receiver v. United States, 20 Ct. Cl. 298 (1885). The Supreme Court, in Securities and Exchange Commission v. United States Realty and Improvement Co., 310 U.S. 434 (1940), was faced with an analogous situation. In holding that an order allowing the permissive intervention of the SEC in a chapter XI bankruptcy proceeding was not an abuse of the district court's discretion, the Court stated at page 460: * * * we think it plain that the Commission has a sufficient interest in the maintenance of its statutory authority and the performance of its public duties to entitle it through intervention to prevent reorganizations, which should rightly be subjected to its scrutiny, from proceeding without it. Executive Order No. 6166 Executive Order No. 6166 of June 10, 1933, upon which plaintiff relied in the Third National Bank in Nashville and Crocker-Anglo cases and is expected to rely herein, provides in salient part in section 5 thereof as follows: The functions of prosecuting in the courts of the United States claims and demands by, and offenses against, the 278 Government of the United States and of defending claims and demands against the Government, and of supervising the work of United States attorneys, marshals, and clerks in connection therewith, now exercised by any agency or officer, are transferred to the Department of Justice. As to any case referred to the Department of Justice for prosecution or defense in the courts, the function of decision whether and in what manner to prosecute, or to defend, or to compromise, or to appeal, or to abandon prosecution or defense, now exercised by any agency or officer, is transferred to the Department of Justice. For the exercise of such of his functions as are not transferred to the Department of Justice by the foregoing two paragraphs, the Solicitor of the Treasury is transferred from the Department of Justice to the Treasury Department. Nothing in this section shall be construed to affect the function of any agency or officer with respect to cases at any stage prior to reference to the Department of Justice for prosecution or defense. This order encompasses two classes of cases: (1) Claims and demands by, and offenses against, the Government of the United States, including defense of claims and demands against the Government, and (2) cases referred to the Department of Justice by other Federal Agencies for prosecution or defense in the courts. It is not questioned thai: the Department of Justice, through its antitrust division, may institute suits in the courts of the United States, in the name of the United States, for alleged violation of the Federal antitrust laws. It is questioned, however, whether the Department of Justice, has the authority under this executive order to represent the Comptroller of the Currency in cases where the Department is, in effect, attacking a decision of the Comptroller of the Currency approving the merger of two banks under the charter of a national association by virtue of the authority vested in him by Congress in the National Banking Act (12 U.S.C. 215a) and the Bank Merger Act of 1960 (12 U.S.C. 1828(c)). The fourth paragraph of section 5 of the executive order makes it clear that the Department of Justice is not to interfere with or affect the functions of any agency prior to referral of the case to the Department. This bank merger has never been referred to the Department of Justice by the Comptroller of the Currency. The Department's only function, under the Bank Merger Act, is to render an advisory report on the competitive effects of any merger proposal. Yet the Department, by claiming to represent the Comptroller under this executive order, and opposing the Comptroller's right to defend his decision on all the salient factors, competitive and banking alike, as a party defendant, while, in substance, asserting the illegality of the Comptroller's act, is in effect intruding itself into the substantive operations and functions of the Comptroller's Office entrust