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Comptroller of the Currency
Administrator of National Banks







Annual Report 1979
Comptroller of the Currency

The Administrator of National Banks

John G. Hermann
Comptroller of the Currency

Letter of Transmittal
Treasury Department,
Office of the Comptroller of the Currency,
Washington, D.C., December 1, 1980

Sirs: Pursuant to the provisions of Section 333 of the United States Revised Statutes, I am pleased to submit the 1979 Annual Report of the
Comptroller of the Currency.
Respectfully,
John G. Heimann,
Comptroller of the Currency.
The President of the Senate
The Speaker of the House of Representatives







Contents
Title of Section
I.
II.
III.
IV.
V.
VI.
VII.
VIII.
IX.
X.

Condition of the National Banking System
Income and Expenses of National Banks
Structural Changes in the National Banking System
Office of the Comptroller
Senior Deputy Comptroller
Senior Deputy Comptroller for Bank Supervision
Senior Deputy Comptroller for Operations
Senior Deputy Comptroller for Policy
Chief Counsel
Financial Operations of the Office of the Comptroller of the Currency

Page
1
5
9
19
21
23
25
29
37
43

Appendices
A.
B.
C.
D.

Merger Decisions
Statistical Tables
Administrative Actions
Selected Speeches and Congressional Testimony




49
145
207
231

Statistical Tables
Table No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.

Title

Assets, liabilities and capital accounts of national banks, 1978 and 1979
Income and expenses of national banks, 1978 and 1979
National banks and banking offices, by states, December 31, 1979
Applications for national bank charters and charters issued, by states, calendar 1979
Applications for national bank charters pursuant to corporate reorganizations and charters issued, by
states, calendar 1979
Applications for conversion to national bank charter and charters issued, by states, calendar 1979 . . .
Branches of national banks, by states, calendar 1979
CBCT branches of national banks, by states, calendar 1979
De novo branch applications of national banks, by states, calendar 1979
De novo applications for federal branches and agencies of foreign banks, by states, calendar 1979 . .
Mergers, calendar 1979
Office of the Comptroller of the Currency: balance sheets
Office of the Comptroller of the Currency: statements of revenues, expenses and Comptroller's equity
Office of the Comptroller of the Currency: statement of changes in financial position

VI




Page
3
7
10
11
12
13
14
15
16
17
17
44
45
46

I. Condition of the National Banking System
During 1979, accelerating inflation, declining U.S.
economic growth, sharply higher imported crude oil
prices and an abrupt shift in U.S. monetary policy induced some important changes within the financial
system. Most importantly, there was a large increase in
the demand for short-term, liquid financial instruments
with higher yields, such as money market certificates
of deposit and money market mutual funds. The rapid
growth of the innovative instruments not only demonstrated the pervasiveness of inflationary expectations
but substantially diminished the importance of traditional deposit instruments.
While the effects of inflation, policy changes and financial innovation varied among banks, the aggregate
asset, liability and capital accounts of the national
banking system reflected some structural changes the
banking system made to accommodate a more volatile
and uncertain economic environment. Many of the
changes in the national banking system during 1979,
however, were simply continuations of trends already
evident in previous years.
The total assets of the national banking system, both
foreign and domestic, grew by 11.7 percent in 1979 to
$996.3 billion. The rate of growth was slightly below
the 12 percent growth of 1978. Most of the growth in
total assets during 1979 was in the form of loans, as
net loans increased by $57.3 billion, an 11.7 percent
rate of growth. The growth in loan assets was slightly
below the $60.8 billion of new lending in 1978, which
reflected the slowing of the national economy during
the second and fourth quarters of 1979. While lending
activity increased in line with the growth of total assets
in 1979, the provision for possible loan losses increased somewhat faster at a rate of 14.7 percent.
Though national banks purchased $9.2 billion in new
securities during 1979, a substantial increase from
$2.9 billion in security investment for 1978, the importance of securities within the asset portfolios of national banks has diminished in recent years. At the end
of 1979, securities comprised 15.6 percent of total assets. Two years earlier, securities accounted for 18
percent of total assets.
The fastest growing identifiable asset category during 1979 was lease financing receivables which grew
by nearly $1.5 billion, an annual rate of 22.7 percent.
Conversely, national banks reduced their holdings of
real estate by $261 million, a decline of 16.6 percent.




That reflects the continuing workout of problem real
estate lending encountered in the last recession.
The effects of rising inflation on the national banking
system were most readily indentifiable on the liability
side of the balance sheet. Most importantly, there was
a decline in the importance of traditional deposit instruments and an increase in the use of purchased
funds. Though total domestic deposits grew by $34
billion in 1979, the ratio of domestic deposits to total
assets declined from 62.9 to 59.7 percent. In contrast,
purchased funds, which include deposits at foreign offices, federal funds, repurchase agreements and other
liabilities for borrowed money increased by $53.4 billion. As a percent of total assets, purchased funds increased from 26.2 to 28.9 percent in 1979. Further, total deposits in foreign offices increased by 21.9
percent, a rate more than three times as fast as the
growth of total deposits in domestic offices.
The growth in all deposit categories, other than deposits at foreign offices, was slower than the 11.8 percent increase in total liabilities. Most notably, demand
deposits at domestic offices grew by only 6.5 percent.
During 1979, 26-week certificates of deposit grew from
just $12 billion, or 2 percent of domestic deposits, to
$55 billion, more than 9 percent of domestic deposits.
So in addition to the relatively slow growth of domestic
deposits, there was a significant shift in those deposits
to higher interest-bearing types. Indeed, savings accounts at national banks actually declined more than 7
percent to $111 billion. The deposits of federal, state
and local governments also declined.
The fastest growing liability categories reflected the
shift towards increasing reliance on short-term market
rate funds. Other liabilities for borrowed money grew
by 37.8 percent while federal funds purchased and securities sold under agreements to repurchase increased by 22 percent. A year earlier the growth of
federal funds and repurchase agreements was 9.1
percent.
The aggregate capital asset ratio for the national
banking system declined slightly in 1979 from 5.51 to
5.45 percent. In recent years, there has been a steady
erosion of the capital asset ratio as total assets have
grown faster than total equity capital. The influence of
inflation is readily apparent in that decline of the capital asset ratio. While the value of bank stocks and the
return on equity have remained relatively low for several
1

years, as it has for most stocks, inflation has accelerated the increase in the nominal value of bank assets.
The effects of inflation and of the national economy
approaching its cyclical peak could be discerned from
the aggregate balance sheet accounts of the national




banking system. A rise in loan demand induced a shift
of national bank assets away from securities and into
loan assets. At the same time, the effects of inflation
caused banks to rely more heavily on purchased funds
and less on traditional instruments.

Table 1
Assets, liabilities and capital accounts of national banks, 1978 and 1979
(Dollar amounts in millions)
Dec. 31, 1978
4,564 banks
Consolidated
foreign and
domestic

Change 1978-1979
Fully consolidated

Dec. 31, 1979
4,448 banks

Domestic
offices

Consolidated
foreign and
domestic

Domestic
offices

Amount

Percent

Assets

Cash and due from depository institutions*
U.S. Treasury securities
Obligations of other U.S. government agencies and corporations .
Obligations of states and political subdivisions
All other securities
Total securities .

$170,146
45,311
21,312
66,758
12,774
146,155

Federal funds sold and securities purchased under agreements to resell
Total loans (excluding unearned income)
Allowance for possible loan losses
Net loans .

31,147

$102,603
45,285
21,308
66,564
7,345
140,502

494,896
4,754
490,142

390,105

6,582
12,652
1,573
33,874

5,561
11,930
1,456
39,132

892,272

Lease financing receivables
Bank premises, furniture and fixtures, and other assets representing bank premises
Real estate owned other than bank premises
All other assets

30,996
394,671
4,566

$188,554
44,281
24,751
71,268
15,095
155,395

$106,731
44,126
24,702
70,796
9,485

$ 18,408
-1,030
3,439
4,510
2,321

10.8
-2.3
16.1
6.8
18.2

149,109

9,240

6.3

36,447

36,119
442,986
5,296
437,690

5,300
57,962
707

17.0
11.7
14.9
11.7

552,858
5,461
547,397

57,255

6,780
12,923
1,193
41,711

1,492
1,104
-261
11,472

722,285

792,256

104,009

175,356
294,707
2,078
45,689
35,909
7,229

175,356
294,707
2,078
45,689
35,909
7,229

187,201
317,654
1,902
43,484
37,268
7,461

187,201
317,654
1,902
43,484
37,268
7,461

560,968
220,593
340,375
156,090
717,057

560,968
220,593
340,375
0
560,968

594,970
234,937
360,033
190,302
785,272

594,970
234,937
360,033
0
594,970

11,845
22,947
-176
-2,205
1,359
232
34,002
14,344
19,658
34,212

64,989
7,764
12,860
1,275
35,808
839,753

64,908
7,764
5,499
1,232
29,642

79,310
7,687
17,719
1,277
47,434

79,152
7,687
9,439
1,234
42,444

670,013

938,699

3,312

Total assets

8,074
13,756
1,312
45,346
996,281

3,065

3.285

29
9,912
17,291
21,976
49,207

29
9,912
17,291
21,976
49,207

31
11,403
17,846
25,017
54,296

722,285

996,281

22.7
8.7
-16.6
33.9
11.7

Liabilities

Demand deposits of individuals, partnerships and corporations
Time and savings deposits of individuals, partnerships and corporations
Deposits of U.S. government
Deposits of states and political subdivisions
All other deposits
Certified and officers' checks
Total deposits in domestic offices .
Demand deposits
Time and savings deposits . . . .
Total deposits in foreign offices
Total deposits .

. .

Federal funds purchased and securities sold under agreements to repurchase
Interest-bearing demand notes issued to U.S. Treasury
Other liabilities for borrowed money
Mortgage indebtedness and liability for capitalized leases .
All other liabilities
Total liabilities
Subordinated notes and debentures .

6.8
7.8
-8.5
-4.8
3.8
3.2
6.1

68,215

6.5
5.8
21.9
9.5

734,926

14,321
-77
4,859
2
11,626
98,946

22.0
-1.0
37.8
.2
32.5
11.8

3,034

-27

-.8

31
11,403
17,846
25,017

2
1,491
555
3,041

54,296

5,089

6.9
15.0
3.2
13.8
10.3

792,256

104,009

11.7

Equity Capital

Preferred stock
Common stock
Surplus
Undivided profits and reserve for contingencies and other capital reserves
Total equity capital
Total liabilities, subordinated notes and debentures and equity capital
GO

.. . .
.. .
.. .

892,272

* In 1978, this category was expanded to include all depository institutions rather than just banks.
t Most demand deposits of the U.S. government were converted to "interest-bearing" demand notes issued to U.S. Treasury in late 1978.







II. Income and Expenses of National Banks
Total income and expenses of national banks grew
even more rapidly in 1979 than during 1978, increasing more than 30 percent and reflecting both the continuing rise in interest rates and a substantial growth in
bank assets. However, net income grew at the lower
rate of 17 percent, representing a reduction in interest
rate margins resulting from an increasing reliance on
market rate funds, including the spectacular growth in
the 26-week money market certificates. That 17 percent growth in net income, just over $1 billion, was the
second largest increase in the last decade, exceeded
only by last year's rise of 20 percent.
During 1979, total operating income jumped 32.5
percent to $89.9 billion. That rate was nearly triple the
11.7 percent increase in assets over the year, reflecting the continued ability of banks to adjust their loan
rates during a period of rapidly rising interest rates.
The prime rate, the basic commercial lending rate, increased from 11.75 to 15.25 percent. All of that increase occurred during the second half of the year
and followed an even larger 400-basis point increase
during 1978. Total operating expenses increased even
more rapidly during the year than income, growing
35.2 percent to $79.7 billion. The result was a $1.3 billion increase in income before taxes and securities
gains, well below last year's $2 billion increase. However, applicable income taxes increased only $163
million, or 6.3 percent to $2.7 billion, following last
year's growth of 46.6 percent. Net securities losses increased a further $57 million following a $175 million
swing last year. Extraordinary income was virtually unchanged and added $26 million to net income. Net income was $7.2 billion, equal to 0.73 percent of end-ofyear assets, the second significant yearly increase in
return on assets in a row.
Interest income, including income from lease financing and corporate stock, increased 33.9 percent over
1978 to reach $82.9 billion; it accounted for more than
92 percent of total operating income. The largest component of that, interest and fees on loans, totalled
$61.8 billion in 1979, an increase of more than 34 percent over 1978. Thus in addition to loans increasing almost 12 percent, national banks were able to increase
the average return on their loan portfolio by nearly 2
percentage points over last year. However, interest on
balances with depository institutions and income from
federal funds transactions jumped even more dispro-




portionately, 57 and 62 percent respectively, reflecting
their short-term nature and responsiveness to changes
in interest rates.
Security holdings, which increased slowly during the
year, accounted for less than 12 percent of total operating income. That continued the trend of decreasing
reliance on income from securities, which was interrupted only in 1975 as a result of depressed loan demand during the recession. Although holdings of U.S.
Treasury and government agency securities continued
to decline as they have since 1976, income on those
investments rose nearly 14 percent as older issues
were replaced by higher yielding issues. Noninterest
income, resulting mainly from fees for services, increased 18 percent to $7 billion.
High and rising interest rates and the success of
new market rate instruments in 1979 had a dramatic
effect on deposit costs. Total interest expense on deposits was $43.4 billion, an increase of 44 percent.
The expense of deposits which have long been acquired at competitive market rates, large time certificates of deposits and deposits in foreign offices,
jumped 53 and 67 percent, respectively. The expense
of foreign office deposits, which remained the fastest
growing source of deposits, grew at more than three
times the actual increase in those deposits as it did the
previous year and accounted for nearly 40 percent of
the total interest expense on deposits, although they
equaled 24 percent of total deposits. The rapid growth
of 26-week money market certificates during the year
helped to push the interest expense on other deposits
up 22 percent, three times the rate of increase for last
year.
The expense of other short-term market rate funds
increased more rapidly than that for deposits. The cost
of federal funds purchased and securities sold under
agreements to repurchase grew $3.5 billion, or 70 percent over 1978. The 97 percent increase in expense
on borrowed money is overstated, in part, because
banks were paying interest on federal demand notes,
for an entire year. Total interest expense was $54 billion, a 49 percent increase over 1979 and equal to 68
percent of total operating expenses.
Salaries and employee benefits increased 14.4 percent, slightly greater than the rate of increase for total
assets. However, because of the effect of rising interest rates, it continued to decline in proportion to total

expenses. Net loan losses increased slightly to $1.5
billion, still well below the post-recession peak of more
than $2 billion in 1975. As a result the expense for provision for loan losses increased only slightly to $2.3 billion.
National banks declared $2.6 billion in dividends in
1979, equal to 36.6 percent of their net income. That
was a slight increase in the payout ratio of 35.6 per-




cent during 1978 but still the second lowest ratio since
1946. That high rate of retention of earnings was important because it was the primary source of equity
capital growth. Because of the continued rapid increase in net income and the slight increase in
leveraging, net income to equity capital rose to 13.3
percent from 12.5.

Inconne and expenses of national banks, 1978 and 1979

(Dollar amounts in millions)
1978
4,564 banks
Amount
Operating income:
Interest and fees on loans
Interest on balances with depository institutions
Income on federal funds sold and securities purchased under agreements to
I \5 OC It

,

,

,

,

1979
4,448 banks

Percent
distribution

Amount

Change, 1978-1979

Percent
distribution

Amount

Percent

$45,997.7
4,407.3
. . . .

Interest on U.S. Treasury securities and on obligations of other U.S. government
agencies and corporations
Interest on obligations of states and political subdivisions in the United States . .
Income from all other securities (including dividends on stock)
Income from lease financing
Income from fiduciary activities
Service charges on deposit accounts
Other service charges, commissions, and fees . .
Other operating income
Total operating income
Operating expenses:
Salaries and employee benefits
Interest on time certificates of $100,000 or more (issued by domestic offices)
Interest on deposits in foreign offices
Interest on other deposits
Expense of federal funds purchased and securities sold under agreements to repurchase
Interest on demand notes issued to the U.S. Treasury and on other borrowed
money.*
Interest on subordinated notes and debentures
Occupancy expense of bank premises, net, and furniture & equipment expense
Provision for possible loan losses
Other operating expenses
Total operating expenses

67.8
6.5

$61,801.9
6,931.2

68.8
7.7

$15,804.2
2,523.9

34.4
57.3

2,197.8

3.2

3,551.2

4.0

1,353.4

61.6

4,721.6
3,252.1
693.2
639.4
1,214.8
1,089.5
1,932.2
1,696.9
67,842.4

7.0
4.8
1.0
0.9
1.8
1.6
2.8
2.5
100.0

5,367.2
3,748.2
754.9
730.5
1,345.0
1,316.1
2,453.0
1,887.0
89,886.1

6.0
4.2
.8
.8
1.5
1.5
2.7
2.1
100.0

645.6
496.1
61.7
91.1
130.2
226.6
520.8
190.1
22,043.7

13.7
15.3
8.9
14.2
10.7
20.8
27.0
11.2
32.5

10,845.2
7,021.9
10,139.7
12,873.9

18.4
11.9
17.2
21.8

12,403.7
10,723.5
16,903.5
15,737.0

15.6
13.5
21.2
19.7

1,558.5
3,701.6
6,763.8
2,863.1

144
52.7
66.7
22.2

4,989.6

8.5

8,498.4

10.7

3,508.8

70.3

1,023.1
234.3
3,194.3
2,131.2
6,522.5
58,975.8

1.7
0.4
5.4
3.6
11.1
100.0

2,014.7
265.4
3,571.3
2,251.7
7,356.2
79,725.5

2.5
.3
4.5
2.8
9.2
100.0

991.6
31.1
377.0
120.5
833.7
20,749.7

96.9
13.3
11.8
5.7
12.8
35.2

Income before income taxes and securities gains or losses .
Applicable income taxes
Income before securities gains or losses
Securities gains (losses), gross
Applicable income taxes
Securities gains (losses), net .

8,866.6
2,591.0
6,275.6
-253.5
-125.2
-128.3

10,160.6
2,753.7
7,406.8
-349.4
-163.2
-186.2

1,294.0
162.7
1,131.2
-95.9
-38.0
-57.9

14.6
6.3
18.0
37.8
30.4
45.1

Income before extraordinary items
Extraordinary items, net
Net income .

6,147.3
26.1
6,173.4

7,220.7
26.0
7,246.7

1,073.4
-.1
1,073.3

17.5
-.4
17.4

2,194.7
1.4
2,196.1

2,648.2
1.5
2,649.7

453.5
1
453.6

20.7
7.1
20.7

70.7
171.9
101.2

10.3
8.1
7.0

Cash dividends declared on common stock . . . .
Cash dividends declared on preferred stock
Total cash dividends declared

....

685.9
756.6
Recoveries credited to allowance for possible loan losses .
Losses charged to allowance for possible loan losses
2,124.6
2,296.5
Net loan losses
1,438.7
1,539.9
Percent
Ratio to total operating income:
Percent
44.3
48.2
Interest on deposits
. .
Other interest expense
9.2
12.0
Salaries and employee benefits
16.0
13.8
Other non-interest expense
17.5
14.7
Total operating expenses
86.9
88.7
Ratio of net income to:
0.69
Total assets (end of period)
0.73
Total equity capital (end of period)
12.5
13.35

http://fraser.stlouisfed.org/Most demand deposits of the U.S. government were converted to "interest-bearing" demand notes issued to the U.S. Treasury in late 1978
"
Federal Reserve Bank of St. Louis




Structural Changes in the National Banking
System
During 1979, the structure of the national banking
system, while continuing the trend of previous years
toward concentration, was significantly affected by the
full implementation of three new statutes previously enacted by Congress. The number of national banks decreased for the fourth consecutive year to 4,448 at
year-end 1979. Of those, 2,153 were unit banks. The
remaining 2,295 national banks operated a total of
18,285 branches. In addition to these 22,733 traditional banking offices, national banks operated 946
Customer-Bank Communications Terminal (CBCT)
branches. The statutory requirement that all national
banks belong to the Federal Reserve System and the
liberalization of certain state branching laws, with a resulting increase in bank merger activity, remained the
major causes for this decline in the number of national
banks. During 1979, 51 national banks converted to
state charters, while only one state bank converted to
a national charter, and 39 national banks merged or
consolidated with state banks. Forty-one new national
banks were chartered during 1979. The Comptroller's
Office approved 67 merger applications involving two
or more operating banks in 1979, compared to 47
such applications in 1978. Seventy mergers were consummated during the year.
However, despite the trend toward concentration of
the existing system, applications for new national bank
charters again showed a marked increase, especially
in Texas, a unit-bank, multibank holding company
state. One hundred fifty-three new national bank charter applications were considered during 1979. In addition, increased competition, especially from nonbanks,
had a two-fold effect on the national bank system, further intensifying bank merger activity and stimulating
expansion through branches and CBCT's. National
banks opened 659 de novo branches and acquired
203 new branches through merger or consolidation,
while closing only 14. The number of CBCT's operated
by national banks increased by 181 during 1979.
The previously enacted Community Reinvestment
Act of 1977 (CRA), International Banking Act of 1978
(IBA) and Financial Institutions Regulatory and Interest
Rate Control Act of 1978 (FIRA) all had a major impact
on the national bank system during 1979. CRA, which
became effective in November 1978, was fully implemented in early 1979; FIRA became effective March




10, 1979; the regulations implementing the Comptroller's responsibilities under the IBA were effective
November 13, 1979.
The purpose of CRA is to encourage federally insured commercial banks (including national banks),
mutual savings banks, and savings and loan associations to help meet the credit needs of their entire communities, including low and moderate income
neighborhoods, while preserving the flexibility necessary to operate safely and soundly. The Comptroller is
required to take the record of CRA performance into
account in deciding virtually all types of corporate applications filed by national banks. Although only one
application was disapproved during 1979 solely on
CRA factors, several others were approved with conditions designed to assure satisfactory compliance with
CRA.
FIRA contains the Depository Institutions Management Interlocks Act and the Change in Bank Control
Act of 1978. The Interlocks Act generally prohibits
management interlocks among nonaffiliated depository
institutions, including national banks, in the same Standard Metropolitan Statistical Area or in the same or adjacent city or town. The Change in Bank Control Act requires persons who propose to acquire control of
national banks to give the Comptroller 60 days notice
prior to that acquisition. During that time, the Comptroller may disapprove the proposed acquisitions within
the guidelines of established statutory criteria. During
1979, 52 prior notices of intent to acquire control of a
national bank were received: no objection was made
to 48, one was withdrawn, one was disapproved and
two were pending at year-end.
The IBA, enacted to promote competitive equality
between domestic and foreign banks operating in the
United States, created a federal system of licensing
branch and agency operations of foreign banks in the
United States. The federal system, which will coexist
with the already-established state licensing system,
created an alternative choice of licensing for foreign
banks which maintain offices in the United States. The
Comptroller's implementing regulations became effective in November. Six applications for de novo federal
branches and agencies were received during 1979:
two of these were approved and four were still pending at year-end.
9

Table 3
National banks and banking offices, by states, December 31, 1979
National banks
With
branches^

Numhpr
of
branches^

Numhpr
1

V

t>#

I I I

KJ

^> 1

Of

Total

Unit

4,448

2,153

2,295

18,285

22,733

50 States and D.C.

4,448

2,153

2,295

18,271

22,725

Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida

99
6
3
68
42
139
19
6
16
221

32
0
1
15
13
93
3
2
4
80

67
6
2
53
29
46
16
4
12
141

346
80
333
181
2 845
' 36
204
5
136
374

445
86
336
249
2 887
'175
223
11
152
595

Georgia
Hawaii
daho
Ilinois
ndiana
owa
Kansas
Kentucky
Louisiana
viaine

63
3
7
410
119
99
148
79
55
14

10
1
1
247
25
48
97
17
13
1

53
2
6
163
94
51
51
62
42
13

343
11
184
211
526
94
79
263
290
118

406
14
191
621
645
193
227
342
345
132

Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire

31
71
123
205
38
98
56
117
4
36

4
8
13
132
3
49
45
79
1
7

27
63
110
73
35
49
11
38
3
29

373
457
956
91
271
72
9
58
75
104

404
528
1,079
296
309
170
65
175
79
140

New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island

93
40
116
26
41
177
190
6
223
5

11
10
32
3
16
37
115
1
73
0

82
30
84
23
25
140
75
5
150
5

991
121
1 518
853
30
1,259
62
329
1,440
116

1,084
161
1,634
879
71
1,436
252
335
1,663
121

South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming

18
33
69
615
11
12
72
21
107
131
47

1
20
6
560
7
4
4
2
78
83
46

17
13
63
55
4
8
68
19
29
48
1

335
90
368
27
117
48
712
615
28
95
0

353
123
437
642
128
60
789
636
135
226
47

0
0

0
0

0
0

6
0

6
0

17

4

13

138

155

All national banks

Virgin Islands
Puerto Rico
District of Columbia—all*

•

offices^

* Includes national and nonnational banks in the District of Columbia, all of which are supervised by the Comptroller of the Currency.
t For the purposes of this table, CBCT's are not considered branches or offices. For information on those branches, see Table 8 of this report.

10



Table 4
Applications for national bank charters* and charters issued, by states, calendar 1979
Received^

Disapproved

153

Total

Approved
71

17

1
0
0
1

1
0
0
1

Withdrawn

Pending
December 31,
65

41

0
0
0
0
0
0
0
0
0
0

0
0
0
0
10
1

2
0
0
0
3
2
0
1
0
4

1

0
0
0
5

19
8
0
0
0
6

7
6
0
0
0
2

0
0
0
0
2
1
0
0
0
2

Georgia .
Hawaii . .
Idaho . . .
Illinois . . .
Indiana . .
Iowa
Kansas . .
Kentucky
Louisiana
Maine . . .

2
0
1
6
1
1
1
1
4
0

0
0
1
1
0
1
0
0
1
0

1
0
0
1
0
0
1
1
1
0

0
0
0
0
0
0
0
0
0

Maryland
Massachusetts .
Michigan
Minnesota
Mississippi . . . .
Missouri
Montana
Nebraska
Nevada
New Hampshire

0
0
3
3
0
3
0
1
1
1

0
0
2
2
1
1
0
1
1
0

0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

New Jersey . . .
New Mexico . . .
New York
North Carolina .
North Dakota . .
Ohio
Oklahoma
Oregon
Pennsylvania . .
Rhode Island . .

1
1
1
1
0
0
3
0
0
0

0
0
0
0
0
0
3
0
0
0

0
0
1
1

0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0

South Carolina . . .
South Dakota . . . .
Tennessee

0
0
1

0
0

0
0
0
0
0
0
0
0
0
0
0

0
0
0
29
0
0
2
0
4
0
0

Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia .
Florida

Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
Virgin Islands

....

....

70
1
0
2
0
7
0
1

1
34
1
0
0
0
1
1
1

Chartered

1979

0
0
0
0
0
0
0
0
0
4
0
0
0
0

1
0
0

0
0
0
3

1
0
0
0
2
0
0
0

1
2
0
2
0
0
0

1
1
1

0
1
1
0
1
0
0
0

1
0
0
0
2
0
1
0
0
0
0
0
0
0
0
0
0
0
3
0
0
0

0
1
0
12
1
0
0
1

0
3
1

0

* Excludes conversions and corporate reorganizations.
t Includes applications pending as of December 31, 1978.




11

Table 5
Applications for national bank charters pursuant to
corporate reorganizations and charters issued, by states, calendar 1979
Received*

Approved

Disapproved

Withdrawn

Pending
December 31,

Chartered

1979
Total

50

23

Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida

1
0
1
0
1
1
0
0
0

1
0
0
0
1
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine

0
0
1
6
0
1
0

0
0
0
2
0
1
0
0
0
0

1

1
0
1

22

20

0
0
0
0
0
0
0
0
0
0

0
0
1
0
0
1
0
0
0

1
0
0
0

1

0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
1
0
0

0
0
1
4
0
0
0
0
0
0

0
0
0
3
0
0
0
0
0
0

0
0

0
0

1

Maryland
Massachusetts .
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire

0

0
1
0
0
0
0
0
0
0
1

0
0
0
0
0
0
0
0
0
0

0

1
2
0
0
0
1
2
0
2

1
1
0
0
0
0
0
0
0

1

1

0
0
0
1
2
0
1

0
0
0
0
0
0
0

New Jersey . . .
New Mexico . . .
New York
North Carolina .
North Dakota . .
Ohio
Oklahoma
Oregon
Pennsylvania . .
Rhode Island . .

4
1
1
0
0
8
0
2
0
0

2
0
0
0
0
6
0
1
0
0

0
0
0
0
0
0
0
0
0
0

1
0
0
0
0
0
0
0
0
0

1
1
1
0
0
2
0
1
0
0

0
0
0
0
0
6
0
0
0
0

South Carolina .
South Dakota . .
Tennessee
Texas
Utah
Vermont
Virginia
Washington . . .
West Virginia . .
Wisconsin
Wyoming

0
0
0
8
0
0
1
0
0

0
0
0
0
0
0
0
0
0
0
0

0
0
0

1
1

0
0
0
5
0
0
1
0
0
1
0

0
0
0
2
0
0
0
0
0
0

1

0
0
0
8
0
0
0
0
0
0
0

Virgin Islands . .
Puerto Rico . . .

0
0

0
0

0
0

0
0

0
0

0
0

* Includes applications pending as of December 31, 1978.


12


1
0
0
0
0
0
0
0

Table 6
Applications for conversion to national bank
charter and charters issued, by states, calendar 1979
Received*

Approved

Disapproved

Withdrawn

Pending
December 31,
1979

Chartered

6

1

0

1

4

1

Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida

0
0
0
2
0
0
0
0
0
2

0
0
0
0
0
0
0
0
0
1

0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
1

0
0
0
2
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
1

Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine

0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire

0
0
0
1
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

0
0
0
1
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island

0
0
1
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

0
0
1
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

South Carolina
South Dakota
Tennessee
Texas . .
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming

0
0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0
0

ooooooooooo

Total

* Includes applications pending as of December 31, 1978.




13

Table 7
Branches* of national banks, by states, calendar 1979
Branches
in
operation
December 31,
1978

De novo
branches
opened for
business
Jan. 1 to
Dec. 31, 1979

Branches
acquired
through
merger or
conversion
Jan. 1 to
Dec. 31, 1979

Existing
branches
discontinued
or
consolidated
Jan. 1 to
Dec. 31, 1979

Branches
in
operation
December 31,
1979

All national banks

17,437

659

203

14

18,285

50 states and D.C

17,431

659

203

14

18,279

340
79
319
175
2 761
31
201
5
133
302

5
1
14
4
79
5
3
0
3
59

1
0
0
2
5
0
0
0
0
13

0
0
0
0
0
0
0
0
0

346
80
333
181
2 845
36
204
5
136
374

Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine

332
11
178
182
507
91
75
254
277
117

11
0
6
28
19
3
4
7
10
1

0
0
0
1
0
0
0
2
3
0

0
0
0
0
0
0
0
0
0

o

343
11
184
211
526
94
79
263
290
118

Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire

356
447
868
67
256
67
8
56
85
98

15
10
88
24
11
5
0
2
4
5

2
0
0
0
4
0
1
0
0
1

0
0
0
0
0
0
0
0
14
0

373
457
956
91
271
72
9
58
75
104

New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island

973
118
1,489
809
29
1,096
60
321
1,408
115

16
3
29
20
1
64
2
8
29
1

2
0
0
24
0
99
0
0
3
0

0
0
0
0
0
0
0
0
0
0

991
121
1,518
853
30
1,259
62
329
1,440
116

South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming

322
85
364
13
113
46
683
594
26
89
0

9
2
4
14
4
2
10
7
2
6
0

4
3
0
0
0
0
19
14
0
0
0

0
0
0

0
0
0
0
0

335
90
368
27
117
48
712
615
28
95
0

6

0

0

0

6

135

3

0

0

138

Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida

Virgin Islands
District of Columbia—allf

o

o
o
o

* Does not include CBCT or foreign branches. For those branches see Tables 8 and B-28.
t Includes national and nonnational banks in the District of Columbia, all of which are supervised by the Comptroller of the Currency.


14


Table 8
CBCT branches* of national banks, by states, calendar 1979
Branches
in
operation
December 31,
1978

De novo
branches
opened for
business
Jan. 1 to
Dec. 31, 1979

Branches
acquired
through
merger or
conversion
Jan. 1 to
Dec. 31, 1979

Existing
branches
discontinued
or
consolidated
Jan. 1 to
Dec. 31, 1979

Branches
in
operation
December 31,
1979

765

184

5

8

946

Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida

7
2
0
4
3
12
0
0
1
36

4
0
0
3
0
3
0
0
0
8

0
0
0
0
0
0
0
0
0
5

0
0
0
0
0
0
0
0
0
0

11
2
0
7
3
15
0
0
1
49

Georgia . ,
Hawaii . . .
Idaho
Illinois . . .
Indiana . .
Iowa
Kansas ..
Kentucky .
Louisiana
Maine . . .

16
0
1
0
2
43
41
3
13
0

9
0
0
0
3
4
6
1
4
0

0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

25
0
1
0
5
47
47
4
17
0

Maryland
Massachusetts .
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire

3
1
1
12
1
0
2
87
0
0

1
1
48
5
0
1
0
26
0
0

0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

4
2
49
17
1
1
2
113
0
0

New Jersey
New Mexico . . .
New York
North Carolina .
North Dakota . .
Ohio
Oklahoma
Oregon
Pennsylvania . . .
Rhode Island . .

4
0
108
1
13
58
102
8
18
0

0
0
5
2
1
12
7
0
4
0

0
0
0
0
0
0
0
0
0
0

0
0
6
0
0
1
0
0
0
0

4
0
107
3
14
69
109
8
22
0

South Carolina .
South Dakota . .
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia . . .
Wisconsin
Wyoming
Virgin Islands . .

12
6
47
0
0
0
19
9
0
69
0
0

6
2
3
0
0
3
0
0
0
12
0
0

0
0
0
0
0
0
0
0
0
0
0
0

0
0
1
0
0
0
0
0
0
0
0
0

18
8
49
0
0
3
19
9
0
81
0
0

All national banks

* Customer-bank communications terminal branches.




15

Table 9
De novo branch applications of national banks, by states, calendar 1979
Abandoned

Pending
December 31, 1979

789

34

140

14
3
25
6
121
9
3
0
4
87

0
0
0
0
3
0
0
0
0
4

5
0
0
0
12
0
0
0
2
12

6
0
8
26
26
4
1
12

0
0
2
0
0
3
0
1
0
0

2
0
1
4
3
1
0
3
1
0

17
8
96
5
9
10
0
0
5
7

0
0
2
0
0
1
0
0
0
0

3
2
18
4
1
0
0
0
2
0

1

7
0
3
4
1
16
7
2

Received*
Total
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 . . .

Approved

964

19
3
25
6
137
9
3
0
6

104
0
11
30
30
8
1
16
9
3

20
10
116
9

10
11
0
0
7
7

Rejected

New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island

25
4
25
22
2
87
10
14
58
2

17
4
20
18
1
71
3
9
45
2

0
2
0
0
0
0
3
4
0

South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
Virgin Islands
Puerto Rico

21
3
11

15
3
7
11
2
3
21
10
0
1
0
0
0

2
0
3
0
0
0
1
2
0
0
0
0
0

15
3
4

25
13
0
2
0
0
0

* Includes 194 applications pending as of December 31, 1978.

16



Table 10
De novo applications for federal branches and agencies
of foreign banks, by states, calendar 1979
Received

Approved

Disapproved

Withdrawn

Pending
Dec. 31, 1979

6

2

0

0

4

2

1

0

0

1

Limited federal branch
District of Columbia
Ohio

2
1

0
0

0
0

0
0

2
1

Federal agency
New York

1

1

0

0

0

Total
Federal branch
New York

Transactions
involving
two or more
operating banks

Others pursuant
to
corporate
reorganization

Applications received, 1979:
Mergers
Consolidations
Purchases and Assumptions

53
3
13

26
5
0

79
8
12

Total received

69

31

100

Approvals issued, 1979:
Mergers
Consolidations
Purchases and Assumptions

51
1
15

17
4
0

68
5
15

Total approvals

67

21

88

1
1
0
2

ooo

Table 11
Mergers,* calendar 1979

0

1
1
0
2

54
1
15
70

16
4
0
20

70
5
15
90

Abandoned, 1979:
Mergers
Consolidations
Purchases and Assumptions
Total abandoned
Consummated, 1979:
Mergers
Consolidations
Purchases and Assumptions
Total consummated

Total

* Includes mergers, consolidations and purchases and assumptions where the resulting bank is a national bank.




17




IV. Office of the Comptroller
The Comptroller's staff directs, coordinates and
manages the day-to-day operations of his office and
advises the Comptroller on policy formulation and
technical procedures. The staff conducts special
studies, surveys and investigations and develops the
framework, monitoring and management of special
projects. Usually these have not been assigned to divisions or are projects in which the Comptroller has an
immediate ongoing interest, such as the Minority Bank
Development Program. The Comptroller's Executive
Assistant and Special Assistants may act on behalf of
the Comptroller, carrying out policies and directions
and providing liaison with other agencies.

services industry. During 1979, the Senior Advisor met
with management personnel of over 50 banking organizations, investment bankers and others in the United
States.
The Senior Advisor reviews proposed congressional
testimony, legislation, regulations, public statements,
correspondence, corporate applications and examinations or other supervisory activities that have policy implications and provides an evaluation of the likely effects of OCC policies and actions on commercial
banks and the financial services industry. In addition,
the Senior Advisor consults with the Comptroller, members of the Policy Group, and others regarding the ongoing organization and management of the agency.

Office of the Senior Advisor

The Office of the Senior Advisor was established in
1979. The two major responsibilities of the Senior Advisor are to insure that OCC policies adequately reflect
the realities of commercial banking operations and to
strengthen the interface between the OCC and the
commercial banking industry.
To accomplish the objectives of the position, the
Senior Advisor establishes and maintains contact with
commercial banks, both state and national, bank holding companies and other segments of the financial




Division of Inspections and Audits

The Division of Inspections and Audits is an independent appraisal activity within OCC designed to
provide independent, objective and constructive review and appraisal of financial, accounting and operational activities and to conduct investigations of matters relating to legality or propriety of actions by or
conduct of OCC employees. The division, created in
May 1979, functions as an independent counselor to
the Comptroller and reports directly to the Comptroller.

19




V. Senior Deputy Comptroller
The Senior Deputy Comptroller is the First Deputy,
for statutory purposes and is first in order of succession to act in the absence of the Comptroller. Responsibilities of the Senior Deputy Comptroller include actively participating in administration of OCC policy,
management and procedural matters as a member of
the agency's Policy Group; coordination of all interagency activities; coordination of OCC's overall support and participation in the Federal Financial Institutions Examination Council; and supervision of the
agency's communications, internally and with the public.
The Office of the Senior Deputy Comptroller played
an important role in the organization and the initial activities of the Federal Financial Institutions Examination
Council. The council was established on March 10,
1979, pursuant to Title X of the Federal Financial Institutions Regulatory and Interest Rate Control Act of
1978 (Public Law 95-630). The purpose of Title X was
to create a formal interagency body empowered to
prescribe uniform principles, standards and report
forms for the federal examinations of financial institutions performed by the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Federal Home Loan Bank Board, National
Credit Union Administration and Office of the Comptroller of the Currency and to make recommendations
promoting uniformity in the supervision of financial institutions. The council is also tasked with developing
uniform reporting systems for federally supervised financial institutions, their holding companies and their
subsidiaries. It is to conduct schools for examiners
employed by the five agencies represented on the
council and to make such schools available to employees of state financial institutions supervisory agencies. The overall intent of the legislation is that the
council's actions be designed to promote consistency
in federal examination and to ensure progressive and
vigilant supervision.
The council has five members, who are the principals of each agency. In addition, to encourage the application of uniform examination principles and standards by state and federal supervisory authorities, the
council has established in accordance with the requirement of the statute an Advisory State Liaison
Committee composed of five representatives of state
supervisory agencies.
At the council's first meeting on March 16, 1979,




John G. Heimann, Comptroller of the Currency, was
elected Chairman and Lawrence Connell, Jr., Chairman of the National Credit Union Administration, was
elected Vice Chairman. In addition, the council created the position of Executive Secretary to coordinate
its activities. Lewis G. Odom, Jr., OCC's Senior Deputy
Comptroller, served as Acting Executive Secretary until Robert J. Lawrence was appointed in August 1979.
Some of the first actions by the council included establishing five interagency task forces (Supervision, Consumer Compliance, Reports, Examiner Education and
Surveillance) and creating a Legal Advisory Group, an
Agency Liaison Group and the State Liaison Committee.
The Senior Deputy Comptroller was a member of the
Agency Liaison Group during 1979. That interagency
group of senior officials is responsible for overall coordination of their respective agencies' staff efforts supporting the council.
Deputy Comptroller for Interagency Coordination

The responsibility for coordinating interagency activities is administered through the Deputy Comptroller
for Interagency Coordination under the overall supervision of Senior Deputy Comptroller.
The primary function of the Deputy Comptroller is to
assist the Comptroller, the Senior Deputy Comptroller
and other OCC staff members in coordinating various
interagency activities.
The Comptroller is a member of the Board of the
Federal Deposit Insurance Corporation (FDIC). The
Deputy Comptroller for Interagency Coordination
serves as the assistant to the Comptroller in that capacity at the FDIC. The Deputy Comptroller serves as
a voting member of various FDIC standing committees, represents the Comptroller in all policy deliberations and briefs the Comptroller prior to each weekly
meeting of the FDIC Board.
The Deputy Comptroller serves as OCC liaison with
the Interagency Coordinating Committee, an informal
consultative body made up of the Comptroller, a member of the Federal Reserve Board, the Chairman of the
FDIC, the Chairman of the Federal Home Loan Bank
Board, the Chairman of the National Credit Union Administration and the Deputy Secretary of the Treasury.
The committee met numerous times in 1979 to discuss
21

appropriate changes in ceiling rates on deposits and
other matters.
The Deputy Comptroller assists the Senior Deputy
Comptroller at meetings of the Federal Financial Institutions Examination Council. The division represents
OCC on the Reports Task Force of the council, and the
Director of Coordination chairs its principal subcommittee, the Subcommittee on Instructions and Accounting Standards. During 1979, considerable progress
was made toward achieving identical call report instructions for the three federal banking agencies
(FDIC, Federal Reserve Board and OCC). Also, a report of condition was developed for U.S. branches of
foreign banks.
The Deputy Comptroller also is continually involved
in varied internal OCC activities. For example, the division staff worked with the Management Information
Systems Committee and assisted the task force which
studied regional restructuring. The division also plays
an important role in OCC's continuing effort to reduce
the reporting burdens on national banks.
Communications Division

The Communications Division provides information
about the banking industry in general and the OCC in
particular to the press, Congress and the general pub-


22


lic. The division issues and maintains OCC publications, banking and examining issuances, interpretive
letters, and press releases. All OCC submissions to
the Federal Register are processed through the division.
The Communications Division maintains subscription
lists for OCC publications, such as the Comptroller's
Manual for National Banks, the Comptroller's Handbook for National Bank Examiners, the Comptroller's
Handbook for National Trust Examiners, the EDP Examination Handbook and the Consumer Examination
Handbook. In September 1979, the division released
the Report to Congress on Foreign Government Treatment of U.S. Commercial Banking
Organizations,
which was completed by the Department of the Treasury in cooperation with the State Department, the
Federal Reserve Board, the FDIC and the OCC.
The Director of the Communications Division serves
as liaison between the Comptroller and the press.
News releases are issued on significant OCC actions
and on testimony before Congress by the Comptroller
and OCC staff.
The Deputy Director, under authority delegated by
the Comptroller, makes initial determinations on requests for records of the OCC under the Freedom of
Information Act and the Privacy Act of 1974. In 1979,
467 requests were processed.

VI. Senior Deputy Comptroller for Bank
Supervision
The Senior Deputy Comptroller for Bank Supervision
formulates, implements and monitors bank supervisory
policy. Related responsibilities include remote screening of national banks to detect trends and changes in
the banking system which warrant attention, special
monitoring of large banks and banks requiring supervisory attention, monitoring supervisory postures to ensure national consistency and participating in the Federal Financial Institutions Examination Council on bank
supervisory matters. The Senior Deputy Comptroller for
Bank Supervision oversees the Offices of the Chief National Bank Examiner, Deputy Comptroller for Special
Surveillance, Deputy Comptroller for Specialized Examinations and Deputy Comptroller for Multinational
Banking.
Chief National Bank Examiner

The Chief National Bank Examiner's Office formulates, implements, monitors and evaluates bank supervisory policy relating to the commercial examination
process. The Commercial Examinations Division researches and prepares recommendations on examination and policy issues and maintains the Comptroller's
Handbook for National Bank Examiners, which contains examination objectives and procedures.
The Bank Supervisory Analysis Division reviews and
analyzes commercial examination reports of banks not
selected for "special" supervisory review, assists regions in identifying potential problem banks and
trends in a particular industry or region and records all
civil money penalty referrals received from regional offices, assigning them to appropriate divisions for review. The division also reviews and recommends appropriate action on civil money penalty referrals
regarding banks not selected for "special" supervisory
review.
The Investment Securities Division is the OCC's focal point for technical counsel and assistance on
bank-dealer activities and investment securities matters.
The Bank Accounting Division is OCC's authoritative
source on bank accounting practices and reporting requirements.
Additionally, the Chief National Bank Examiner is responsible for the shared national credit program,




which provides a uniform nationwide review and analysis of loans to a borrower of $20 million or more that
are shared by two or more banks.
Deputy Comptroller for Special Surveillance

The Deputy Comptroller for Special Surveillance is
responsible for the national bank surveillance system
(NBSS) and the Special Projects Division. NBSS is a
computerized screening system using call report data.
It is designed to detect trends warranting supervisory
attention in individual banks and in the banking system
as a whole. The NBSS Division is responsible for the
bank performance report, an analytical report produced for each national bank, and an action control
system, which is used to monitor corrective action
taken in banks with conditions identified as warranting
attention. NBSS also provides training in the use of the
bank performance report and related programs.
The Special Projects Division centralizes monitoring
of banks demonstrating unfavorable characteristics
and a weakened condition. All banks assigned a composite uniform interagency rating system rating of 3, 4
or 5 are in the special projects program. The division
attempts to ensure nationwide consistency of supervisory postures, to eliminate causes of identified problems and to return the selected banks to a satisfactory
condition. Special Projects works closely with the Enforcement and Compliance Division when formal or informal administrative actions are used.
The Special Projects Division also operates the regional bank review program. That program, which includes all national banks with assets between $1 and
$10 billion, is aimed at developing an increased
awareness of the activities and direction of the
country's large regional banking associations. The program includes review and analysis of certain information, periodic meetings with regional staff and with
senior management of the banks and development of
a management information system for OCC internal
use.
Deputy Comptroller for Specialized Examinations

The Deputy Comptroller for Specialized Examinations-formulates, implements and monitors bank super23

visory policy relating to examinations of trust departments and electronic data processing centers. The
Deputy Comptroller oversees the maintenance of the
electronic data processing and trust examinations
handbooks and the review and analysis of trust and
electronic data processing examination reports. Special attention is given to data centers and trust departments with identified problems to ensure nationwide
consistency of supervisory posture, to eliminate the
causes of identified problems and to return the operations to a satisfactory condition. The department also
works closely with the Enforcement and Compliance
Division when formal or informal administrative actions
are necessary.
During 1979, efforts were made to improve the efficiency of the specialized examination function by
gearing the scope of an examination to the size and/or
condition of the department. Specialized and small
bank trust examinations and specialized electronic
data processing examination procedures were developed. Also during 1979, development of an interagency electronic data processing examination handbook was begun. OCC, accompanied by
representatives of the other bank regulatory agencies,
also conducted the first examination of national bank
fiduciary activities overseas.
OCC trust examinations include an examination of
the stock transfer function in light of OCC's primary jurisdiction over national banks which act as registered
transfer agents. Information on any significant transfer
agent deficiencies is provided to the Securities and
Exchange Commission (SEC). In 1979, OCC participated in joint examinations of registered stock transfer
agent services with the Federal Reserve System, the
Federal Deposit Insurance Corporation and the SEC
and also coordinated the inspection of the transfer
agent for money market mutual funds with the SEC.
Deputy Comptroller for Multinational Banking

The Multinational Banking Department was created
in 1978 in recognition of the importance of the current
and future role of the nation's largest banks and those
with significant international activity. The Multinational
Banking Department is responsible for supervising the
11 largest national banks, including examinations, financial analysis, corporate activity and all phases of
supervision. As an extension of the examination
process, the department began a quarterly visitation
program for multinational banks to obtain more frequent and timely information on the financial condition,
activities and plans of these institutions. At the end of
1979, the 11 largest national banks held 42 percent of
all national bank assets and 25 percent of all U.S.
banking assets. The department also supervises the
international activities of all national banks. An office is
maintained in London for examining European operations.
The Deputy Comptroller for Multinational Banking
serves as OCC's liaison with bank regulators through-


24


out the world. In that role, he represents the OCC at
meetings of the Cooke Committee, a group of bank
regulators from the Group of Ten countries and other
European countries, who meet regularly on an informal
basis to discuss common interests.
Organizationally, Multinational Banking has four divisions: Multinational Examinations, International Banking Activity Examinations, International Banking Activity Examinations—London, and Multinational Bank
Analysis and Supervision.
Multinational Examinations develops examination
procedures, establishes scope and scheduling of domestic examinations, coordinates overseas examinations with the two international banking divisions and
processes examination reports.
International Banking Activity Examinations and the
London division develop procedures, perform and coordinate international examinations for all national
banks and serve as the focal points for developing supervisory positions relating to international banking.
Multinational Bank Analysis and Supervision provides financial analysis and support to all divisions of
the Multinational Banking Department, including the
field examiners. Emphasis is not only on analysis of
historic performance but anticipation of future developments and their longer-term implications for the banks.
The division also reviews corporate activity applications of multinational banks.
All organizations under the Senior Deputy Comptroller for Bank Supervision actively participate in the Federal Financial Institutions Examination Council regarding bank supervision matters in their spheres of
responsibility.
Examinations

OCC is responsible for promoting and ensuring the
soundness of the national banking system. Bank examination is OCC's fact-finding arm in discharging this
responsibility. On December 31, 1979, OCC employed
2,282 examiners who, during 1979, performed 3,998
commercial examinations, 1,245 trust examinations
and 863 electronic data processing examinations. Examinations provide an objective evaluation of a bank's
soundness, appraise the quality of management and
directors and identify areas requiring corrective action.
OCC policy gives top priority for onsite examinations
to banks requiring close supervision because of their
weak condition, second priority to large banks in
sound condition and third priority to small banks in
sound condition. The frequency and type of examination performed depend on the bank's priority rating.
The different types of examinations relate the scope of
an examination to the size and condition of the bank.
In most cases, general or full scope examinations are
alternated with specialized or limited scope examinations. Onsite examinations are supplemented by analysis of NBSS bank performance reports and a review
of bank responses to criticisms and violations of law in
the report of examination.

VII. Senior Deputy Comptroller for Operations
The Senior Deputy Comptroller for Operations is responsible for the overall operational effectiveness and
efficiency of OCC. He supervises the 14 regional offices, the Deputy Comptroller for Administration and
the Washington Office divisions of Management Services, Finance and Planning, Systems and Data Processing, Human Resources and Equal Employment Opportunity. He serves as Chairman of the Federal
Financial Institutions Examination Council's Task Force
for Examiner Education.
Management Services Division

The Finance and Administration Division was reorganized in July 1979 into two divisions: Management
Services and Finance and Planning. OCC's administrative activities were thereby consolidated in the Management Services Division, and the financial, budget
and planning operations were centralized in the Finance and Planning Division.
Under the reorganization, the Management Services
Division includes five branches: Facilities Management, Procurement and Contracting, Records and Distribution Services, Research and Administrative Systems and Supply and Printing Services.
Facilities Management is responsible for renovating
and relocating OCC's offices and coordinating parking, telephones, property and leases. In 1979, Facilities Management managed and coordinated the construction management and space design of the newly
acquired third floor space in L'Enfant Plaza. A 100-person capacity conference room was included. The third
floor construction allowed for scheduled expansion of
units located on other floors. Renovation and remodeling began toward the end of 1979 and is expected to
proceed well into the mid-1980's.
Procurement and Contracting is responsible for purchasing goods and services for the Washington Office
and the 14 regional offices. During 1979, the branch
negotiated and awarded the first OCC contract with
the Small Business Administration pursuant to Section
8(a) of the Small Business Act. Under this program,
the Small Business Administration is authorized to
channel government purchases to minority firms by
negotiating contracts with federal agencies and then
subcontracting to the minority firms. The OCC contract
involved providing minority recruitment advertising
services. Also in 1979, a task force was assembled to




develop an official OCC Procurement Manual. When
published in early 1980, the manual will provide uniform policies and procedures regarding acquisition of
personal property and nonpersonal services.
Records and Distribution Services is responsible for
mail and messenger services, bank operations records (central files) and records and forms management. In 1979, this branch submitted a complete set of
records control schedules to the National Archives and
Records Service for review. The regional records
schedules were approved, and Washington Office
schedules were expected to be approved and effective in 1980. Additionally, a comprehensive study of
the mail and messenger operations was made which
should result in many improvements in service in 1980.
Research and Administrative Systems is responsible
for four support activities: paperwork management,
graphic design, OCC library and administrative systems. During 1979, in addition to performing its day-today support functions, the branch concentrated on revision and reissuance of support policies and
procedures, paperwork reduction activities and energy
reduction studies.
Supply and Printing Services provides printing, supply operations and bulk mailings for the Office. Consolidation of mailings allowed the Office a refund of
$153,000 from the U.S. Postal Service. The branch has
also reduced the cost of express shipments by using
the U.S. postal express mail system. In 1979, the
branch increased the number of printing impressions
by 25 percent. The branch was instrumental in printing
the Report to Congress on Foreign Government Treatment of U.S. Commercial Banking Organizations, and
other publications. Supply and Printing Services also
established a perpetual inventory system for expendable supplies and will periodically inventory these supplies in 1980. This will provide them with a more accurate system to monitor supply levels.
Finance and Planning Division

The Finance and Planning Division is responsible for
promoting maximum use of financial and human resources for OCC. The division has three branches:
Planning, Budget Programs and Accounting Programs.
Planning is charged with providing functional direction and guidance in design, implementation, mainte25

nance, evaluation and feedback for the Office's planning process. The branch also coordinates and
maintains the integration of planning with budgeting.
Planning began in 1979 by reviewing data in other
OCC management information systems, such as time
utilization and examination status reporting, to eliminate duplicative reporting under the planning system.
The reduction in number of operating goals from 35 to
16 and the introduction of standard performance targets for Washington, D.C. units eliminated a significant
amount of paperwork from unit plan submissions.
Throughout the year, a staff member was responsible
for the examination status reports section of the Policy
Group management information system.
Budget Programs develops and recommends expenditure policy and designs cost models in directing
the OCC budget operation. The computerized budget
monitoring system provides monthly budget performance reports which compare actual versus budgeted
expenses. This system was enhanced in 1979 by adding a quarterly listing of significant budget variances
which must be explained by unit managers. Another
improvement in the budget system was the formulation
of a budget change process in which budget units
compete for surplus funds identified by the variance
reports. For 1979, actual expenses were under budget
by 0.7 percent.
Accounting Programs directs the Comptroller's fiscal
reporting operations. In 1979, refinements and improvements were made to the computer-based financial information system. That system, which relies on
the concept of cost center responsibility accounting, is
linked directly to the budget monitoring process. The
flexibility of this system permits timely preparation of
specialized reports and analyses for management.
Systems and Data Processing Division

Computer processing requirements in 1979 grew by
98 percent over 1978. Costs in 1979 were 15 percent
higher than 1978 costs and only 3.3 percent higher
than 1977 costs. In the face of having automated data
processing requirements double in 1979, the Systems
and Data Processing Division was able to contain
costs by:
• Moving computer work to a more efficient and
economical computer system;
• Moving computer files to a more economical
storage medium;
• Negotiating greater discounts from the computer contractor by guaranteeing specific levels
of monthly processing;
• Negotiating a $55,000 annual telecommunications cost reduction with the computer contractor;
• Initiating cost reduction procedures for backing
up computer files;
• Implementing cost reduction procedures for
programmers; and
• Implementing a computer procedure to disconnect programmer terminals from the main computer following 20 minutes of inactivity.

26


Major project activities in 1979 included production
of OCC's national bank surveillance system which produced quarterly bank performance reports on time for
all national banks, all Federal Reserve member banks
and all state banks in New York, Virginia and Nevada.
A contract was signed to develop the national bank
surveillance video display system, which will eventually allow bank examiners to acquire critical national
bank data on demand.
A new minicomputer system was selected and ordered. The system will support functions such as personnel, payroll and time and attendance. In addition, a
time utilization management system for all OCC employees was developed and implemented in late 1979.
The statistical data sheet system was developed to
produce automated reports on bank examination data.
This system was started in late 1979. The fair housing
lending system, also initiated in late 1979, can process
lending data from national banks and flag potential
problem areas of discrimination. The bank organization structure system for tracking specific corporate
transactions was also completed in 1979.
During 1979, the division participated in a study to
determine the feasibility of merging OCC and Federal
Deposit Insurance Corporation automated data processing support activities. The completed study was
referred to top-level management for consideration.
This effort could result in the eventual merging of automated data processing functions for the two agencies.
Human Resources Division

Exemplary progress in the area of equal employment opportunity (EEO) earned recognition for the
Deputy Comptroller for Administration, the EEO officer,
the associate director for employee relations and the
manager of minority and special emphasis programs.
The Secretary of the Treasury presented them the
department's EEO Award for 1979. Their development
of population-based hiring goals, a computerized recruitment resources information system, an advertising
campaign directed at minority and female media, and
other EEO programs aided in attracting highly qualified women and minority applicants to OCC.
Enactment of the Civil Service Reform Act in 1978
had a significant impact on human resources programs in the areas of employee relations, national recruitment, compensation, staffing and operations, and
personnel development. The Human Resources Division initiated several of the programs outlined in the
act, and measurable progress was made toward implementing the act's provisions.
The Senior Executive Service was established in
July, and all OCC senior management officials converted to membership in the program. A performance
appraisal system for senior executives was implemented, and similar programs were also developed for
competitive and excepted service employees. Policy
and procedures were updated for OCC's Incentive
Awards Program.
Most Washington, D.C. and regional employees began participating in a compressed work schedule experiment in September. An expanded dental insurance

plan, an improved physical examination program and
a brochure highlighting OCC employee benefits were
offered during 1979. Revised travel regulations were
also adopted encouraging energy conservation.
During 1979, increased emphasis was given to
OCC's compensation program. A salary survey was
conducted to evaluate OCC salaries relative to those
for similar positions in the banking industry and in
other regulatory agencies. Position descriptions were
reviewed or developed for all professional and managerial jobs, and policies and procedures governing
compensation and position evaluation issues were developed.
A Cooperative Education Program was established
in the Washington, D.C. Office, with seven interns participating in the initial session. Twenty more students
will be selected in 1980. At the same time, there were
57 interns in the regional cooperative program.
Twenty-one of the program participants were retained
as permanent assistant national bank examiners in
1979. In the National Recruitment Program, canvasses
were conducted nationwide at colleges and universities, and this was instrumental in the hiring of over 500
assistant examiners.
Five regions were included in the time utilization
management system during 1979, and two modules of
the human resources information system were installed
to aid the Staff Analysis Group with personnel management information. The group also completed an
analysis of employee turnover to increase
management's awareness of the causes of work force
attrition.
The Personnel Development staff was actively involved in adapting schools and courses for interagency enrollment. Over 3,000 participants attended
the 75 Washington, D.C.-based and 39 regional training programs. The Advanced Management Seminar
and the Financial Analysis School were started in
1979. Revised career development policies were issued for career development levels I and II. Twentythree people were selected to participate in the Career
Development Level II Program. A policy for executive
development was developed for approval and issuance in early 1980. These policies provide direction for
OCC's management and executive development programs and strengthen prospects for continued professional management of the agency.
The Staffing and Operations Group processed a
large volume of personnel actions and maintained responsive service to management and employees.
Over 150 Washington vacancies were announced and
filled through merit competition during 1979. Staffing




and Operations also developed a plan for staffing examiner positions through merit promotion.
Equal Employment Opportunity Office

In early 1979, OCC conducted a comprehensive
analysis of the regional examining workforce. That
analysis permitted identification of areas of minority/
female underrepresentation. Based on that information, regional long-range hiring goals and 1979 recruitment priorities were established. Regional staffs were
asked to work toward these goals and priorities
throughout 1979.
A system was developed using information provided
by the Department of Labor, Department of Health, Education and Welfare, Department of the Interior, U.S.
Commission on Civil Rights and a variety of national,
state and local agencies and groups. That system, the
recruitment resources information system, will be used
by those agencies for recruiting. The OCC system,
which was made available to other Department of
Treasury bureaus, lists over 25,000 minority, women,
handicapped and veteran organizations nationwide
which have agreed to act as recruitment resources.
A minority and women's media program was conducted to attract qualified applicants. Recruitment advertisements were placed in key minority publications
and in newspapers at schools selected because of
their minority/female enrollments. Competitive and
bank examiner (excepted service) announcements
were mailed to many federal personnel offices. More
recruitment resources are expected to be added to the
system regularly. OCC staff members are in frequent
contact and meet regularly with personnel staff of the
Federal Reserve Board, Federal Home Loan Bank
Board and Federal Deposit Insurance Corporation.
Those efforts are designed to share recruitment information, encourage job seekers to apply for bank examiner or related positions, and coordinate compliance with other equal employment opportunity (EEO)
requirements.
In 1979, females represented 50.2 percent of new
employees. That represents a 5.8 percent increase
over the number of females hired in 1978.
A 2-day EEO briefing was presented to regional administrators. The briefing was designed to increase
sensitivity to the functions of the program.
There were seven formal complaints filed in 1979:
four alleged race discrimination, two alleged race/sex
discrimination and one alleged age discrimination.
One of the alleged race complaints was officially
closed. The other five race and sex complaints are at
the investigative stage in the complaint processing cycle. The age complaint is at the adjudicative stage.

27




VIM. Senior Deputy Comptroller for Policy
The Senior Deputy Comptroller for Policy provides
advice and counsel to the Comptroller on all related
policy matters. He has been delegated sole decisionmaking responsibility on national bank charter and
merger applications and numerous other types of national bank applications pertaining to corporate activities. In addition, he provides staff support to the
Comptroller for his activities on the Depository Institutions Deregulation Committee.
The Senior Deputy Comptroller for Policy oversees
the Research and Economic Programs and the Customer and Community Programs departments. The Research and Economic Programs Department comprises four divisions: Banking Research and Economic
Analysis, Strategic Analysis, Bank Organization and
Structure and Regulations Analysis. The Customer and
Community Programs Department comprises three divisions: Customer, Community and Fair Lending Examinations; Community Development; and Customer Programs.
Research and Economic Programs

The Department of Research and Economic Programs is directed by the Deputy Comptroller for Research and Economic Programs who is responsible for
coordinating the activities of the Bank Organization
and Structure, Banking Research and Economic Analysis, Regulations Analysis and Strategic Analysis divisions.
The primary functions of the Research and Economic Programs Department are processing corporate
applications; monitoring the regulatory decisionmaking
process; analyzing the impact of reporting and compliance requirements imposed on national banks; collecting, analyzing and distributing financial and supervisory data reported by national banks; conducting
research projects pertaining to financial institutions,
markets and the macroeconomic environment; monitoring developments in the financial services industry;
and preparing publications of interest to the financial
community. Other activities involve providing advice
and analysis on regulatory and supervisory issues, assisting in the formulation of OCC policies, preparing
speeches and congressional testimony and supporting activities of interagency committees and task
forces.
The Deputy Comptroller, in addition to coordinating
activities of these divisions, also advises senior OCC




staff on various issues, assists in policy formulation
and provides analysis of economic conditions and
their impact on the financial services industry.
During 1979, the department made significant contributions to the formulation of public policy—including
the Report to Congress on Foreign Government Treatment of U.S. Commercial Banking Organizations,
which was jointly prepared by the Strategic Analysis
Division and the Banking Research and Economic
Analysis Division, and the Deposit Interest Rate Ceilings and Housing Credit, the Report of the President's
Inter-Agency Task Force on Regulation Q. The department also developed a comprehensive program for reviewing and revising corporate policies, forms and
procedures for implementation in 1980 and continued
to pursue systematic analysis of competition among financial institutions, and of regulatory reporting and
compliance requirements.
Bank Organization and Structure Division

The Bank Organization and Structure Division is responsible for processing requests by national banks
and individuals to engage in various banking activities.
These requests include applications for new banks,
branches, customer-bank communications terminals
(CBCT's), head office relocations, title changes, operating subsidiaries, federal branches and agencies of
foreign banks, mergers, consolidations, capital increases and notices of ownership changes. In addition, the division is responsible for maintaining various
bank structure records, such as title, location, number
of offices and amount of capital stock of each national
bank.
During 1979, considerable progress was made in
meeting the division's goal of reducing application
processing time, improving the quality of analysis and
reducing the regulatory reporting and compliance requirements imposed on the industry.
The division was reorganized in July to create a
more effective organization. Positions of manager for
analysis, manager for operations and procedures and
manager for policy were established. In addition, an
automated management information and tracking system for new banks and branches was developed and
implemented by year-end.
Processing times for applications have been substantially reduced despite a significant increase in volume. Procedures for the expeditious processing of
29

certain branch, CBCT and relocation applications were
adopted. Those procedures allow a regional office to
process applications in their entirety, eliminating duplicative Washington Office review. The division has also
notified other regulatory agencies and the Department
of Justice that it will generally not wait more than 30
days for their competitive factor reports before deciding routine mergers.
Finally, an initial review of corporate policies, procedures and forms was undertaken in 1979. The results
of that review will be the basis for the Corporate Activities Review and Evaluation (CARE) Program which will
entail a comprehensive review and revision of corporate policies, procedures and forms during 1980.
Banking Research and Economic Analysis Division

The research program of the Banking Research and
Economic Analysis Division concentrates on issues of
current and potential importance to the bank regulatory and supervisory mission of OCC. The division's
significant programs include conducting a wide variety
of research projects; sending representatives to selected professional conferences and meetings; maintaining a liaison with research economists in other federal agencies; supplying lecturers or panel members
to appropriate professional and academic functions;
conducting seminars on topics of current interest to
OCC and the banking industry; bringing noted banking experts to OCC through a visiting scholar program
for brief periods to work with the permanent staff on
topics of special interest; collecting, analyzing and
making available a wide range of financial and supervisory data reported by national banks; and performing statistical surveys to support the operations of
other divisions.
During 1979, the division's major activities included
preparing testimony and briefing materials for congressional hearings on a variety of banking issues
such as Regulation Q, the prohibition of interest on
checking accounts, usury ceilings, bank underwriting
of municipal revenue bonds and the annual oversight
hearings on the condition of the banking system. The
division also had a significant input into the development of public policy statements by the Comptroller of
the Currency such as his address on the need for capital investments at the joint meeting of the American
Economic Association and American Finance Association in December. A series of research papers was
prepared on deposit rate ceilings, branching restrictions and restrictions on U.S. banking abroad in connection with separate interagency task forces. The division contributed to a major report, Deposit Interest
Rate Ceilings and Housing Credit, the Report of the
President's Inter-Agency Task Force on Regulation Q,
which was released by the Department of the Treasury
in fall 1979, and to a second, the interagency report on
the McFadden Act, which is expected to be released
in 1980.
During the year, a significant consolidation of data
collection and processing was carried out with the
Federal Deposit Insurance Corporation (FDIC). That
action reduced expenses and manpower requirements

30


and set a new standard of interagency cooperation.
The quarterly financial statements of national banks
are now sent directly to FDIC which reviews and corrects them as it previously had for reports of insured
nonmember banks. This results in more efficient use of
report analysis and eliminates a duplicative computerized processing system. The division maintains oversight responsibility to guarantee high quality and
timely data. The development of on-line computer access has resulted in greater data availability.
The division's plans for 1980 include conducting basic research on the response of financial markets and
institutions to the legislative changes contained in the
Depository Institution Deregulation and Monetary Control Act of 1980; supporting OCC's role on the Depository Institutions Deregulation Committee; monitoring
the macroeconomic environment for the benefit of
OCC senior management and field examination personnel; providing research support and assistance to
OCC divisions in the conduct of their tasks; and drafting OCC's rules governing adjustable-rate mortgage
instruments.
Regulations Analysis Division

The Regulations Analysis Division coordinates all
OCC activities which impact on the reporting and compliance requirements imposed on national banks and
the public. It assures that regulatory decisionmaking
includes a thorough consideration of potential alternatives. Regulations Analysis also ensures that effects of
regulatory activities are monitored and that any problems are identified and resolved. The division seeks to
identify outdated statutory provisions and serves as a
contact point for bankers who have suggestions for
regulatory improvements. Regulations Analysis is the
OCC division responsible for implementing Executive
Order 12044 on improving government regulation and
Executive Order 12174 on paperwork. In addition, division representatives co-chaired OCC activities associated with the Department of Justice's Task Force on
Sex Discrimination.
Semiannual agenda, describing in clear language
the regulatory actions taken and under consideration,
were printed in the Federal Register and sent to all national banks for comment in February and September
1979. Several changes in regulations were adopted in
1979 reflecting the OCC's desire to avoid unnecessary
regulatory burdens, particularly for individuals and
smaller banks, and the division's efforts to satisfy those
desires:
• The Change in Bank Control Act was implemented by issuing a revised regulation (12 CFR
15) establishing general requirements for the
submission of information to OCC which are
less burdensome than those expressly permitted by the statute.
• New statutory provisions relating to bank service
corporations were implemented by revising the
OCC's interpretive ruling 12 CFR 7.7390 to require only a fraction of the number of notices
permitted.
• New statutory provisions limiting management

•

•

•

•
•
•
•

•

official interlocks were implemented through a
regulation (12 CFR 26) which required neither
recordkeeping nor reporting.
OCC's regulation governing recordkeeping and
confirmation requirements for national banks effecting securities transactions for customers (12
CFR 12) was amended to reduce the number of
banks subject to the full requirements.
Increased delegations of authority and expedited processing procedures were adopted by
amendments to OCC regulation 12 CFR 4
which are expected to reduce by 20 percent the
time involved in deciding 75 percent of the applications received by OCC.
An amendment was issued to OCC's interpretative ruling on real estate owned by national
banks other than for use in the conduct of their
business (12 CFR 7.3025) to make the accounting requirements consistent with generally accepted accounting principles and to delete the
previously required annual appraisal of lowvalued properties.
A new regulation was adopted to improve
OCC's monitoring and enforcement of fair housing laws (12 CFR 27).
Over 200 pages of the Code of Federal Regulations (12 CFR 1) containing specific investment
securities rulings were eliminated.
The common trust fund survey which affected
approximately 1,800 national banks was eliminated.
Annual reporting to shareholders was made
more flexible by permitting interested shareholders to conveniently obtain basic financial information at little cost to the national banks (12
CFR 18).
Certain required reports by bank insiders were
eliminated and replaced with dissimilar reports
on the same general subject required by the Financial Institution Regulatory and Interest Rate
Control Act.
Strategic Analysis Division

The Strategic Analysis Division is responsible for
monitoring developments in the financial services industry and evaluating their impact on the banking system and OCC operations. Division staff members act
as internal consultants in assessing and interpreting financial and technological trends for the benefit of the
examiner staff and senior agency officials charged
with setting policy.
Much of 1979 was devoted to organizing and recruiting an entirely new staff for the division which, by
the end of the year, included seven professional and
three clerical staff members. Most analysts in the division have graduate degrees in business or finance
and practical experience in banking or related fields.
Throughout the year, staff members provided advice
and information on a wide range of topics bearing on
the safety and soundness of the banking system.
These included capital adequacy, the role of banks in
the commercial paper market, international supervision



and support systems, use of subordinated debt, electronic funds transfer and activities of foreign banks in
the U.S. The major activity of the division in 1979 was
the launching of a comprehensive inquiry into the issue of foreign acquisitions of U.S. banks. Research efforts were directed not only at gathering basic factual
data but also at considering the implications of such
acquisitions for banking competition and the performance and supervision of banks. This unprecedented
indepth review is expected to be completed during
1980.
With four more professionals to be recruited during
the first half of 1980, the division will be developing
procedures to augment its environmental scanning efforts, and staff members will be assigned to monitor
developments in specific areas such as payment systems and telecommunications, expansion of foreign
banks both abroad and in the U.S. and financial innovations in the U.S. banking industry. Before the end of
the year, a pilot Visiting Banker Program will be established, and the possibility of creating a staff position
for bank examiners on a rotational basis will be explored. Such specialized expertise will contribute to
the division's ability to relate changes in the larger financial environment to the banking industry and to the
work of OCC. The division will continue, as in 1979, to
prepare and contribute to briefings, position papers,
speeches and congressional testimony for senior
agency officials. In addition, the division will continue
to work with members of the examiner staff throughout
OCC to identify other specific areas and projects in
which it can provide technical advice and support.
Customer and Community Programs

The Office of Customer and Community Programs,
established in the 1978-1979 reorganization of OCC, is
responsible for OCC's activities in the areas of consumer protection, community lending and civil rights.
The office is headed by the Deputy Comptroller for
Customer and Community Programs and includes the
position of Special Assistant for Civil Rights as well as
three divisions: Customer, Community and Fair Lending Examinations, Community Development, and Customer Programs.
During 1979, the office undertook a number of efforts to expand and substantively improve the OCC's
activities in consumer affairs, community investment
and civil rights. These efforts were focused on enforcement of statutes and regulations, examiner training,
banker education and liaison, policy development and
liaison with other agencies and outside groups in
areas of mutual concern and responsibility.
Customer, Community and Fair Lending
Examinations Division

The Customer, Community and Fair Lending Examinations Division, originally established in 1974 as the
Consumer Affairs Division, is responsible for the coordination of all examination-related activities in the
areas of consumer protection, community reinvestment
and fair lending. Its activities include monitoring the
training of consumer examiners, developing examina31

tion procedures and tools, coordinating resolution of
consumer complaints and tracking and evaluating national bank compliance.
The consumer compliance examination was created
in 1977 to improve the ability of examiners to monitor
national bank compliance with consumer protection
laws. Under this program, every national bank receives periodic examinations conducted by examiners
who have had special training at two-week schools.
A primary thrust of the past year was to provide the
examiners and the banks with a better understanding
and sensitivity about consumer, community and fair
lending issues and regulations. The results of the efforts in this direction have been gratifying by demonstrating that much of the compliance problem in these
areas can be solved through better training and education. Efforts included:
• Establishment of an ongoing training program
for senior level commissioned examiners;
• Participation with the other federal financial regulatory agencies on an interagency task force to
develop a consumer examination school for basic training of new consumer examiners;
• Assistance to banking trade groups in the planning and development of banker education programs and materials;
• Revision and updating of the Comptroller's
Handbook for Consumer Examinations and distribution to all examiners and all national banks;
• Publication of the Fair Housinq Home Loan Data
System, Regulation 27 booklet that describes
the new regulation, and distribution to all examiners and national banks; and
• Preparation of a fair housing home loan data
system slide presentation and showing of it to
banking groups, other agencies and consumer
groups.
The division has also provided assistance to several
banking trade groups in the planning and development of banker education programs and materials.
The American Bankers Association (ABA) sponsored a
1-week National Compliance School for bank compliance officers and a National Compliance Conference
for senior level bank managers. OCC staff participated
as instructors in both programs, as did representatives
from other federal financial regulatory agencies. OCC
staff also participated in other programs such as
the Bank Administration Institute's "Managing Compliance with Consumer Regulations" workshops. OCC
staff guidance was provided on three major bank compliance manuals: Planning Guide for Consumer Compliance (ABA); Real Estate Lending Manual (ABA); and
The Most Common Violations Found in Consumer
Compliance - Revised (Consumer Bankers Association). Additionally, the Consumer Bankers Association
published the OCC's Computational Procedures for
Verifying Annual Percentage Rates, revised March
1979, and made it available to member and nonmember banks.
The division continually updates the field examiners
and national banks on new and changing legislation
and regulations. In 1979 banking circulars were issued

32


on the fair housing home loan data system and the
Community Reinvestment Act.
Another important thrust of the past year was to
streamline the consumer examination procedures and
provide guidance on priorities in order to accommodate statutory changes and additions. The
Comptroller's Handbook for Consumer Examinations
was revised to reflect the changes in consumer laws
since the handbook's publication in 1977. New sections were added covering the Fair Debt Collections
Practices Act, the Community Reinvestment Act and
the Flood Disaster Protection Act. Specialized examination procedures were implemented in 1979 to use
examination resources more efficiently by narrowing
the focus of some examination areas. The specialized
procedures always include a full examination of compliance with the Equal Credit Opportunity Act, Fair
Housing Act, Community Reinvestment Act, Truth-inLending Act, and any new laws which have become
effective since the last examination. Other areas of
concentration in a specialized examination will depend
on such things as the extent of noncompliance noted
in the previous examination and the extent of significant changes in the bank's management and/or operations.
To assure the development of a highly skilled and
committed corps of consumer examiners, a consumer
career path was established which provides for specialization by both Assistant and National Bank Examiners. The career path provides emphasis in the consumer examination program while allowing career
progression and maintenance of commercial examining proficiency. All Assistant National Bank Examiners
receive 2 weeks of consumer training and spend at
least 6 months performing consumer examinations. After the initial 6-month consumer assignment, examiners may select the consumer career path. The consumer examiner will continue to perform consumer
examinations along with commercial examinations,
gaining sufficient experience and expertise in both to
be qualified to become a commissioned National Bank
Examiner. A consumer examiner can progress through
the career path to the level of Regional Director for
Customer and Community Programs. This position was
established in 1979 to coordinate the regional activities related to customer and community programs. The
newly created position of Regional Director upgrades
the previous Regional Consumer Specialist position by
increasing the authority and responsibility of that position.
The complaint resolution function is operated in the
Washington Office and the 14 regional offices. Either
an attorney or a paralegal, upon receipt of a written
complaint, immediately notifies the consumer in writing
acknowledging receipt of the complaint. The bank
against which the complaint has been made is then
contacted by letter and asked for information and documentation. If necessary, an examiner will be assigned
to visit the bank to investigate the matter further. The
consumer is notified in writing of the results of the investigation. Since late 1978, most complaints received
in the Washington Office have been referred to the regional offices. The only exceptions are complaints re-

ferred by Congress and complaints which appeal the
resolution decisions of the regional offices.
During 1979, 12,650 complaints were received by
the OCC, representing a 12 percent increase over
1978. However, this increase was considerably smaller
than in past years. Also, the average resolution time
taken to resolve a complaint has consistently decreased over the past 3 years.
All complaints are entered into an automated system, the consumer complaint information system
(CCIS), which categorizes complaint information by region and bank, type of complaint and resolution.
Monthly CCIS reports are used by Washington and regional personnel to identify banks with concentrations
of complaints or types of complaints and to monitor
unresolved complaints. This information is also forwarded to consumer examiners in the field as an examination tool to indicate potential problems in banks.
In 1979, the OCC continued to distribute its consumer complaint pamphlet to individual consumers
and to national banks which requested them for display in their lobbies. The pamphlet, first introduced in
1978, was designed to educate consumers about their
rights and responsibilities and to provide for easy access to the OCC through the attached postage paid
self-addressed complaint form. The form is designed
to enable a consumer to describe the nature of the
complaint, and it asks for pertinent information about
the bank and the consumer. The OCC solicited comments from banks, consumer groups, and state and local government agencies on a proposed complaint
pamphlet prior to issuing the final pamphlet. The
Comptroller, in a banking circular to all national banks,
announced the availability of the complaint pamphlet
and urged national banks to display the pamphlets in
their lobbies.
A consumer complaint survey was conducted during September 1979. The purpose of the survey was to
determine the OCC's degree of success in resolving
complaints both efficiently and effectively. Comments
were solicited from complainants through a survey
questionnaire. A total of 437 questionnaires were
mailed, and 202 responses were received (a 46 percent response rate). Of those responding, 58 percent
were satisfied with the resolution of their complaints,
79 percent felt that their complaints were answered in
a timely manner, 85 percent felt that OCC personnel
with whom they dealt were courteous and 75 percent
of the respondents said they would contact OCC again
if they had another problem with a national bank.
Community Development Division

The Community Development Division was established to encourage public/private interaction and participation in community economic development. The
division provides technical assistance, rather than supervisory review, to national banks interested in developing community reinvestment programs. Additionally,
the division promotes interaction among banks, community groups, local and state governments and developers involved in community development efforts.
The activities of the division include preparing re


source material to assist bankers in community investment strategies, identifying current obstacles to bank
involvement in community development, educating
bankers about community involvement opportunities
and developing innovative approaches for bank participation in local community development.
Two of the primary emphases of the division's work
in 1979 were to develop a base of knowledge about
urban and rural credit needs and to identify those
banks that have undertaken innovative approaches to
meeting community credit needs. Two projects were
initiated in 1979 and will be completed in 1980. The
first project will result in a set of detailed case studies
describing bank involvement in urban economic development activities. The second project will result in
case studies of rural credit needs. In both projects, the
division's work is aimed at providing banks with examples of community development projects that they can
use as models as well as at providing guidance to
banks on how to structure community development involvement. The guidance covers the potential pitfalls
as well as the potential benefits of such involvement.
The division also provides staff support to the Commercial Reinvestment Task Force which was established as an interagency group in 1978 and which is
chaired by the Comptroller of the Currency. Working
jointly, the staffs of the Community Development Division and the Neighborhood Reinvestment Corporation
developed a model for neighborhood commercial reinvestment. This model will be tested during 1980 with
the objective of developing a replicable approach for
neighborhood commercial reinvestment.
In December 1979, the division sponsored a roundtable discussion on industrial development, chaired by
the Comptroller. In attendance were senior management officials from 45 large national banks. The meeting focused on bank assistance to local economic development efforts through special bank departments
which would provide facility relocation and expansion
services to industrial companies. The meeting emphasized the positive role banks play in providing guidance to businesses interested in locating or expanding
in those banks' communities. The discussion also explored the long-term benefits that banks can anticipate
by contributing to the economic vitality of their communities through business expansion and job creation. A
report that summarizes the topics discussed at the
roundtable will be published in 1980.
One of the first accomplishments of the division in
preparing resource materials for banks was the publication of a Program Guidebook to Help Meet Community Credit Needs. The guidebook is designed to assist
both bankers and bank examiners to meet their local
community credit needs, as required by the Community Reinvestment Act. It describes 40 federal, state
and local government development programs in which
a bank may participate. Included in the guidebook are
several marketing programs that may be used to promote bank credit services. Names, addresses and telephone numbers of contact persons are also provided. The guidebook was so well-received that a
second printing was ordered.
The division also produced a brochure that de33

scribes the activities of the division and the capabilities of the staff. This brochure is being distributed to
produce an awareness of the kinds of assistance that
the division provides.
Technical assistance to banks is an important activity of the division. As community development specialists rather than regulators, the staff is able to provide
bankers with advice on options for community development involvement, guidance on structuring activities
that meet their communities' credit needs, and information on further sources of assistance and federal
program resources.
Over the past year, the division also advised the
Customer, Community and Fair Lending Examinations
Division on changes in examiner training and examination guidelines that would make the community lending
portion of the consumer examination more substantive
and meaningful.

Customer Programs Division

The Customer Programs Division was established to
provide policy advice on all consumer, community and
civil rights functions and to maintain liaison with the
banking public and with consumer, civil rights and
community groups. The activities of the division include providing policy guidance on the enforcement of
laws and regulations, conducting research to support
more effective monitoring and enforcement and presenting testimony on legislative proposals.
One of the major areas of the division's activity in
1979 was the Community Reinvestment Act (CRA).
The division worked closely with the other federal financial regulatory agencies to develop uniform procedures and guidance for examiners and financial institutions. In early 1979, the agencies adopted a
preliminary CRA performance rating system. CRA protest procedures written in plain English were drafted
and will be published in 1980. Procedures for evaluating corporate applications with respect to CRA performance were developed. The division also worked
closely with the Bank Organization and Structure Division of OCC in the review of corporate applications
that had CRA issues to decide whether the issues
were significant enough to warrant conditioning the
approval or denying the application.
Because the division was not fully staffed in 1979,
fair lending activities were focused on institutionbuilding under the direction of the Senior Deputy
Comptroller for Policy and the Deputy Comptroller for
Customer and Community Programs. Institutionbuilding efforts included organizational and programmatic design, recruitment, training and sensitization,
and, perhaps most importantly, active demonstrable
support by the most senior OCC officials. The program
design for the Customer Programs Division calls for
policy initiation, oversight and monitoring, regulatory
reform, outreach to public interest and banking
groups, internal advocacy of the interests of those
whom consumer and civil rights laws seek to protect,
and special educational programs.

34


Special Assistant for Civil Rights

The position of Special Assistant for Civil Rights was
created in 1979 to monitor, coordinate and strengthen
OCC programs and activities involving fair lending and
civil rights. The Special Assistant provides input to the
divisions of Customer and Community Programs and
to other offices in OCC on civil rights issues. The Special Assistant also acts as liaison with civil rights
groups.
During the first half of 1979, the Special Assistant's
primary task was the initial development of the fair
housing home loan data system (FHHLDS) regulation.
The Special Assistant oversaw development of the
system, managing research activities designed to develop a methodology for using home loan data to detect possible discriminatory lending practices. Development of a methodology included specification of
data requirements, data analysis procedures and interpretation of results. The Special Assistant was also
responsible for the drafting and publication of the regulation which sets forth the scope and requirements of
the system for national banks.
Community Reinvestment Act

The OCC is required by the Community Reinvestment Act, 12 USC 2904 etseq., to include in its annual
report to Congress a description of its CRA enforcement efforts for the past calendar year. CRA mandates
that the agency must assess each bank's record of
helping to meet the credit needs of its entire community including low and moderate income neighborhoods, to take such record into account in any evaluation of an application for a deposit facility and to
encourage banks to help meet the credit of their communities. In November 1978, the OCC, along with the
other federal financial regulatory agencies, issued a
regulation (12 CFR 25) to implement CRA. Uniform interagency examination procedures were also issued in
November 1978. Soon after the regulation and examination procedures were issued, a number of questions
were raised about their implementation.
In response to this, the agencies published a set of
questions and answers which addressed the most
common problems. Their purpose was to provide
guidance and useful information to banks in meeting
the objectives of CRA.
In early 1979, the agencies adopted a preliminary
CRA bank performance rating system. A numerical rating of one to five is assigned to each CRA assessment
as part of the examination.
The OCC also sought ways to help educate bankers
and the public about CRA. In early 1979, the agency
held a series of CRA workshops in which representatives from civil rights, consumer, community and banking groups were brought together to discuss CRArelated issues. The representatives exchanged
information about experiences with CRA, and both
sides gained new insights.
Report of Regulatory Activity

In October 1979, the OCC published the fair housing home loan data system regulation, 12 CFR 27. The

regulation became effective on January 1, 1980. The
regulation establishes certain recordkeeping requirements for home loan applications received by national
banks. All national banks which receive 50 or more
home loan applications a year must keep monthly records concerning home loan application activity. Every
national bank is required to obtain specified information on each home loan application and retain it in the
bank's loan file. Included in this regulation is a substitute monitoring program under Regulation B, 12 CFR
202.13(d), which requires national banks to obtain, as
part of every home loan application, the applicant's
race/national origin and sex. Additional records may
be required of national banks upon request of the
Comptroller of the Currency if preliminary investigations of submitted data indicate questionable practices. The recordkeeping requirements coupled with
the OCC's new computer data analysis system will,
when fully operational, supply an examiner with an
analysis of a national bank's home lending practices
prior to a scheduled examination. This analysis will
save examination time by directing the examiner to
particular loan files which the system identifies as requiring closer scrutiny.
The Joint Statement of Notice of Truth in Lending Enforcement Policy, which was issued in December
1978, became effective on January 4, 1979. This policy was implemented in conjunction with the other
agencies which participated in its development. The
policy addresses the most common substantive violations of Regulation Z and is designed to correct the
conditions resulting from such violations. Soon after
the enforcement policy became effective, the agencies
began to experience difficulties in their implementation
efforts. An interagency task force was established to
resolve the issues, and to coordinate uniform implementation of the policy. In August and September
1979, the OCC notified affected national banks to tem-




porarily discontinue file searches and reimbursements
pending final determination by the Federal Financial
Institutions Examination Council of certain issues. On
October 19, 1979, the agencies published in the Federal Register proposed amendments to the enforcement policy. Legislative and judicial developments
have delayed final action on the enforcement policy.
The Electronic Fund Transfer Act (EFTA), enacted in
1978, became effective, in part, on March 30, 1979.
The two sections of the EFTA which became effective
in 1979 relate to the issuance of access devices and
consumer liability for unauthorized electronic fund
transfers. The Federal Reserve Board issued Regulation E implementing these two sections. The balance
of the EFTA will become effective on May 10, 1980.
The OCC has enforcement responsibilities for this regulation, and the financial regulatory agencies will issue
uniform examination procedures in 1980.
In 1979, the Federal Trade Commission (FTC) approved in substance an amendment to "holder-in-duecourse" rule which extends its coverage to creditors.
The FTC published the rule in the Federal Register for
public comment on only the technical language of the
rule. The Federal Reserve Board is required to adopt a
rule governing banks that is substantially similar to the
FTC rule unless the Board finds that such acts or practices of banks are not unfair or deceptive or that adoption would interfere with monetary policy. The OCC, in
cooperation with the Federal Reserve Board, is conducting a study of banks' practices in this area, which
will help provide a factual basis for the decision the
board must make on adopting a similar rule applicable
to banks.
Interagency staff work on the interagency Equal
Credit Opportunity/Fair Housing Enforcement Policy
continued during 1979. A field survey of the guidelines
was conducted to identify potential implementation
problems.

35




IX. Chief Counsel
The Chief Counsel advises the Comptroller of the
Currency on legal matters arising in the administration
of laws, rulings and regulations governing national
banks. He oversees the Enforcement and Compliance,
Legal Advisory Services, Legislative Counsel, Litigation and Securities Disclosure divisions as well as the
regional counsels.
Litigation Division

At the beginning of 1979, 70 lawsuits were pending.
During the year, 21 new lawsuits were filed, and 24
cases were closed.
Attempts to impose liability on the Comptroller for allegedly negligent regulation of problem banks were
unsuccessful. In the In Re Franklin National Bank Securities Litigation, 478 F.Supp. 210 (E.D. N.Y. 1979),
the court held that the National Bank Act creates no
actionable duty to a bank on the Comptroller's part
and that the plaintiffs failed to show that the
Comptroller's regulation of the bank had been "grossly
arbitrary and capricious" or had so exceeded its regulatory authority as to cause the Comptroller to assume
a duty to the bank as a matter of law. Moreover, the
court held that even had such a duty been established, there could be no liability for its breach under
the Federal Tort Claims Act because regulation and
examination of banks fall within the "discretionary
function" exception to the act. This ruling was largely
duplicated in Emch v. United States, et al., 470
F.Supp. 206 (E.D. Wis. 1979), appeal pending.
The Comptroller's authority to promulgate regulations defining and prohibiting unsafe and unsound
banking practices under 12 USC 1818(n) was upheld
by the U.S. Court of Appeals in IBAA v. Heimann, 613
F.2d 1164 (D.C. Cir. 1979), petition for certioiari filed.
In that case, the court sustained 12 CFR 2, the
Comptroller's regulation prohibiting insiders of national
banks from benefiting personally by receiving income
from the sale of credit life insurance to bank borrowers. The court also found that the regulation did not
conflict with other statutes regulating the insurance
business and that the promulgation of the regulation
fully complied with the requirements of the Administrative Procedures Act. A related case, First National
Bank of LaMarque v. Smith, 610 F.2d 1258 (5th Cir.
1980), upheld the Comptroller's issuance of an order,
prior to the promulgation of 12 CFR 2, directing certain
banks to cease allowing officers to receive income




from the sale of credit life insurance. The order was
found to be within the authority of the Comptroller under 12 USC 1818(b) and to be a reasonable and
proper exercise of that authority. In a footnote, the
court noted that the sale of insurance by national
banks could, under certain circumstances, create conflicts between state insurance laws and federal banking laws, but the court found it unnecessary to resolve
those questions at that time.
The controversy over the branch banking powers of
national banks continued. Disagreeing with the
Comptroller's Interpretive Ruling 7.7380 (12 CFR
7.7380), the U.S. District Court for the District of Columbia held that loan production offices, where loan
applications are solicited and preliminarily processed,
are "branches" under 12 USC 36(f) and, hence, subject to state law limitations. IBAA v. Heimann, Civil No.
78-811 (D. D.C. March 30, 1979), appeal pending. In
State Bank of Fargo v. Merchants National Bank and
Trust Co., 593 F.2d 341 (8th Cir. 1979), the court held
that although automatic teller machines were
"branches" under the McFadden Act, national banks
could lawfully use such machines because the relevant state law permitted state banks to use automated
tellers when such authority was granted to "federally
chartered financial institutions" which included federal
savings and loan associations and federal credit unions. Finally, in State of Washington v. Heimann, et al.,
and Community Banks of Washington v. Heimann, et
al., Civil Action Nos. C-79-141 and C-79-142 (consolidated) (W.D. Wash.), appeal pending,
the
Comptroller's approval of applications by several national banks to acquire branches owned by each other
was upheld under a state law which permitted branching through acquiring existing banks or branches. The
case also involved allegations of antitrust law violations. In this connection, the automatic stay provision
of the Bank Merger Act, 12 USC 1828(c)(7)(A), was
held inapplicable to private antitrust actions.
The incidental powers of national banks received a
restrictive interpretation from the U.S. Court of Appeals
for the Ninth Circuit in N.R.C.A. v. Valley National
Bank, 604 F.2d 32 (9th Cir. 1979). That decision affirmed the finding of the trial court that data processing
services offered by a national bank to retailers, which
included generation of reports from retail sales data
provided by the retailer solely for the purpose of obtaining such services, was beyond the incidental
powers of national banks under 12 USC 24. Both
37

courts reasoned that a service is properly "incidental"
only when it is offered or performed in connection with
the exercise of an express power. Thus, it was said,
since the retail reports at issue were not generated
due to some need arising from the offering of an "express power" service, such as supporting accounts receivable financing or working capital loans, the services were not properly "incidental." The Comptroller's
Office believes the decision is incorrect because 12
USC 24 has no express or implied requirement that
banks restrict their business to "express power" services. Moreover, a compelled tie between the offering
of data processing services and other banking services would contravene the policy of the anti-tying statutes, 12 USC 1972 et seq. Supreme Court review of
this case was not sought because of its procedural
status.
The confidentiality of the reports of examination prepared by the Office received contrasting treatment. In
Gunter v. Comptroller of the Currency, Civil No. C78792 A, the U.S. District Court for the Northern District
of Georgia held that such reports are exempt from
mandatory disclosure under the Freedom of Information Act and that under 12 CFR 4.19 the Comptroller
retains discretion over whether to authorize release.
However, another court held that when the Comptroller
is a party to a proceeding involving a closed bank,
production of entire reports would be compelled over
a claim of privilege by OCC, provided there is a sufficient showing of need by the party seeking discovery.
In Re Franklin National Bank Securities Litigation, 478
F.Supp. 577 (E.D. N.Y. 1979). The latter decision may
be criticized on several grounds, including its failure to
recognize a distinction between matters of fact and
opinion, its failure to address the need of financial regulatory agencies to assure regulated banks that the information they provide will remain confidential and its
potential to deter the candid expression of opinions by
national bank examiners.
Finally, an action seeking judicial review of guidelines for enforcement of the Truth-in-Lending Act and
Regulation Z was dismissed for lack of ripeness because the financial regulatory agencies had not implemented the guidelines through specific enforcement
proceedings. American Bankers Association v. Board
of Governors of the Federal Reserve System, et ai,
Civil Action No. 79-2066 (D. D.C., January 29, 1980).
Securities Disclosure Division

Approximately 340 national banks have a class of
securities registered with the Comptroller under the
Securities Exchange Act of 1934. The principal function of the Securities Disclosure Division is to review
registration statements, annual and special meeting
proxy materials, periodic reports, statements of ownership and materials required to be filed in connection
with tender offers and election contests for those
banks. Reports of beneficial ownership and changes
in beneficial ownership are recorded, and a public file
of the 1934 act filings is maintained.
During 1979, the division proposed and adopted
amendments to 12 CFR 11, "Securities Exchange Act
Rules," concerning proxy material disclosure and ben
38


eficial ownership of securities. The amendments were
designed to make the Comptroller's regulations under
the 1934 act substantially similar to rules of the Securities and Exchange Commission (SEC).
Seven regional conferences were presented in
Cleveland, Chicago, Atlanta, Richmond, New York,
Dallas and Hershey, Pa., primarily for the benefit of national banks having a class of securities registered
with the Comptroller under the 1934 act. The conferences were designed to assist banks in complying
with the reporting requirements of the act and to inform
them of proposed changes in 12 CFR 11 and various
SEC regulations which will affect banks. The conferences also focused on recent amendments to, and the
process of compliance with, the requirements of the
Comptroller's "Securities Offering Disclosure Rules,"
12 CFR 16, which applies to the offering and sale of
securities by national banks; "Recordkeeping and
Confirmation Requirements for Securities Transactions," 12 CFR 12; and "Change in Bank Control," 12
CFR 15.
The division assisted the Trust Operations Division
by participating in a seminar for trust examiners and
by advising on amendments to 12 CFR 9, "Fiduciary
Powers of National Banks and Collective Investment
Funds," relating to variable amount master notes, securities handling procedures and use by trust departments of material inside information available to the
bank as a result of its commercial banking activities.
The division also participated in drafting 12 CFR 12 in
response to recommendations in the SEC report on
bank securities activities. This regulation addresses
recordkeeping and confirmation requirements for national banks engaged in the purchase or sale of securities on order of a customer.
The division suspended trading in stock of two national banks pending public dissemination of information which might affect the market activity in, and the
prices of, the banks' stocks. The division assisted the
SEC in several enforcement actions against national
banks and, in some instances, their parent holding
companies alleging violations of the federal securities
laws. The division also participated in numerous meetings and discussions with the SEC on such matters as
access to, and disclosure of, information contained in
bank examination reports, activities of trust departments and the 1934 act filings of bank holding companies which are parents of national banks.
Working closely with the Investment Securities Division, the division completed the first private investigation by the Comptroller's Office of the activities of a
registered bank municipal securities dealer under the
1934 act. An administrative action was initiated against
the bank and persons who had acted in the capacities
of municipal representatives and municipal principals.
Generally, the Office alleged that the bank and the
persons engaged in unsafe and unsound banking
practices and committed violations of the antifraud
provisions of the federal securities laws in connection
with adjusted price trades of municipal, U.S. government-and government agency securities. Further, it
was alleged that the bank and the associated persons
failed to reasonably supervise its employees and vio-

lated numerous rules of the Municipal Securities Rulemaking Board. In this connection, the division filed a
motion for public hearing and public proceedings under 12 CFR 19, asserting that it would be in the public
interest. Settlement negotiations with the respondents
were proceeding at year-end.
The division has been primarily responsible for the
review and approval of compensation and incentive
compensation plans filed under 12 CFR 13 since November 1979. Approximately 35 such plans have been
filed by national banks, and numerous requests for information and sample plans have been received. The
division also assisted the Bank Organization and
Structure Division's capital increase task force in developing an information manual and a policy statement
pertaining to all forms of compensation plans for insiders and shareholders of national banks.
The division was also responsible for reviewing subordinated debt instruments issued under 12 CFR 14.5
by national banks as a means of financing their operations. Authorization to proceed with the issuance of
subordinated debt instruments was given upon satisfactory compliance by the issuer with the policy requirements of the Comptroller for the form and content
of the instruments.
In the administration of 12 CFR 16, the division processed approximately 120 offering circulars filed by national banks in connection with the public offering and
sale of their equity or debt securities. In addition, the
division responded to numerous submissions under
the exemptive provisions of the regulation. Regional
counsels have been assisted by the division in reviewing offering circulars of organizing national banks.
A comprehensive, review of 12 CFR 16 was undertaken by the division in 1979. Based on staff experience interpreting the requirements of Part 16 and the
suggestions of bankers and other professionals, the
division proposed substantial revisions in the regulation. The amendments proposed to incorporate the
definition of "beneficial ownership" set forth in 12 CFR
11; to exempt securities offerings made in connection
with any reorganization, merger, consolidation or acquisition of assets from the offering circular requirements; to eliminate entirely the exemption for certain
small offerings; and to permit a substantially abbreviated offering circular for certain other offerings. Following receipt of comments from interested members of
the public, the division prepared Part 16 in final form
for publication.
During 1979, the division was designated as legal
counsel to the Bank Organization and Structure Division (BOSD) for matters requiring interpretation of the
Change in Bank Control Act of 1978 (12 USC 1817(j))
and 12 CFR 15 promulgated thereunder. In this assignment, the division worked closely with BOSD in the
resolution of various legal and administrative questions
arising under this act. In addition, the division reviewed and developed revisions of existing regulations
implementing the act.
Legislative Counsel Division

The principal responsibilities of the Legislative
Counsel Division relate to the legal aspects of legisla


tion. The subject matter covers virtually every area of
the Office's jurisdiction and almost every legislative
measure of interest to national banks. In addition, the
division deals with matters of intergovernmental and
operational interest. In connection with those general
responsibilities, the division maintains such information
as status of bills, hearings and reports on bills, press
information and primary legislative documents and
files on pertinent laws passed in the current and immediately preceding Congresses.
Division attorneys prepare testimony given before
congressional committees and letters of comment on
pending bills sent to members of Congress and congressional committees. The attorneys draft legislation
and write memoranda and briefing papers on various
legislative proposals and congressional oversight. Division attorneys are in frequent contact with members
of Congress and their staffs, personnel in the Department of the Treasury, Office of Management and
Budget and other federal and state agencies, Office
staff in the regions and in Washington, and public representatives desiring information on banking legislation. They also attend congressional hearings and participate in meetings with the Treasury Department and
other agencies to consult on, and keep abreast of, legislation. In addition, division attorneys speak to various
groups, including bar associations, bank auditors, foreign bankers and Office staff on legal and legislative
matters.
The following are legislative activities of the first session of the 96th Congress (1979) which were significant for the Comptroller's Office:
• Right to Financial Privacy Act Amendment (P.L.
96-3; March 7, 1979) — Repealed a provision of
Title XI of the Financial Institutions Regulatory
and Interest Rate Control Act of 1978 that had
been scheduled to become effective March 10,
1979. That section would have required financial
institutions to notify all customers—including inactive and dormant account holders—of certain
rights, contrary to congressional intent to require
notice only to current customers.
• Ethics in Government Act Amendment (P.L. 9628; June 22, 1979) — Clarified the postemployment conflict of interest provisions of Title V of the Ethics in Government Act of 1978.
The 1978 law prohibited certain high-ranking
employees, including those in positions listed in
the executive schedule and others designated
by the Office of Government Ethics, from aiding
or assisting in matters which had been pending
under the employee's official responsibility during his or her last year in government service for
a 2-year period. The 1979 amendment makes
clear that the ban on aiding and assisting applies only to an individual's physical presence at
a formal or informal appearance. Furthermore,
the subject involved must be a particular matter
in which the individual participated "personally
and substantially."
The 1978 act also prohibited certain former
high-ranking government employees from repre39

senting anyone in a formal or informal appearance, or making any oral or written communications with the intent to influence for a period of 1
year, in connection with a matter pending before
the former employee's agency or in which the
agency had a direct or substantial interest. The
1979 amendment bars the Director of the Office
of Government Ethics from designating federal
employees below GS-17 as subject to that restriction. The amendment also exempts from the
"no contact" provisions service with the following public or nonprofit institutions or organizations: (1) state and local governments and their
agencies and instrumentalities, (2) accredited,
degree-granting institutions of higher education
and (3) hospitals and medical research organizations.
Violations of the provisions of the act may be
punished by a fine of up to $10,000 or imprisonment for up to 2 years, or both. The employment
restrictions, as amended, went into effect on
July 1, 1979.
• Federal Trade Commission Act Amendment
(P.L. 96-37; July 23, 1979) — Terminated the jurisdictional authority of the Federal Trade Commission (FTC) over savings and loan associations and established separate rulemaking
authority in the Federal Home Loan Bank Board
(FHLBB) to regulate deceptive acts or practices
by those institutions. This law exempted savings
and loan associations from the FTC's cease and
desist authority and investigative authority to the
same extent that banks were already exempted.
The FHLBB was given regulatory authority over
savings and loan institutions substantially identical to that previously conferred on the Federal
Reserve Board for banks. The law also mandates the FHLBB to establish a division of consumer affairs to resolve complaints and to enforce trade practice regulations as to savings
and loan associations.
• International Banking Act Amendment (P.L. 9664; September 14, 1979) — Extended the time
for foreign banks to obtain required deposit insurance for existing branches in the United
States. The amendment extended the deadline
from September 17, 1979, to January 1, 1980,
allowing the Federal Deposit Insurance Corporation to complete examinations of foreign
branches which had applied for deposit insurance pursuant to the requirements of the International Banking Act of 1978.
• Temporary Usury Preemption (P.L. 96-104; November 5, 1979) — Temporarily preempted
state usury lending limits on business or agricultural loans of over $25,000 made by financial institutions in states with constitutional provisions
invalidating contracts for a higher interest rate
than 10 percent. The law authorized business or
agricultural loans for $25,000 or more at an interest rate of up to 5 percent over the Federal
Reserve discount rate on 90-day commercial

40


paper. The preemption was to expire on July 1,
1981, or earlier if a state's voters rejected the
federal preemption in 1980.
• Transaction Accounts, Temporary Usury Preemption and New Jersey NOW Accounts (P.L.
96-161; December 28, 1979) — Provided a
temporary extension of authority through March
31, 1980, for the automatic transfer of funds
from savings accounts in commercial banks, the
establishment of remote service units by savings and loan associations and the use of share
drafts by credit unions.
The law temporarily overrode usury ceilings
for any loan, mortgage or advance secured by a
first lien on residential real property or by a first
lien on stock in a residential cooperative housing corporation where the loan was used to acquire such stock. This federal preemption of
mortgage usury ceilings was to be effective
through March 31, 1980, and was to apply to
any loan closed prior to December 29, 1981, if a
commitment was made during the preemption
period. A state could impose or restore usury
limits during the preemption period.
The law also overrode state usury limits affecting bank obligations, including deposit accounts. It temporarily overrode such limitations
on business or agricultural loans of $25,000 or
more by permitting interest rates on such loans
of up to 5 percent over the Federal Reserve's
discount rate on 90-day commercial paper. In
states with statutory usury ceilings, the latter
preemption was to be effective until July 1,
1980. In states with constitutional usury limitations, the preemption was to be effective until
July 1, 1981. A state could impose or restore
usury limits during the preemption period, either
by statute or by voter approval of a constitutional provision. The law repealed P.L. 96-104,
which had earlier preempted usury ceilings in
certain states on business or agricultural loans
in excess of $25,000.
The law also provided permanent NOW account authority to depository institutions in New
Jersey.
Legal Advisory Services Division

The Legal Advisory Services Division provides general legal advice in oral and written form and produces
interpretations and rulings concerning all federal and
applicable state laws and regulations that affect national banks or the Comptroller's Office. Inquiries come
from supervisory and examining personnel in the
Comptroller's Washington Office and in the field; from
bankers and bank counsels; from congressmen; from
members of other executive departments and agencies, trade organizations and consumer groups; and
from others with a particular interest or problem which
involves a national bank. The division frequently sends
representatives to meetings with other federal authorities to discuss topics and develop programs of mutual
interest.

During 1979, the division participated in drafting a
number of proposed and final rulings and regulations
published in the Federal Register. Interpretive rulings
adopted in final form covered such topics as the legal
lending limit on loans to foreign governments and their
related entities (12 CFR 7.1330, 44 Federal Register
22712), requirements for personal property leasing by
national banks (12 CFR 7.3400, 44 Federal Register
22388), accounting methods pertaining to other real
estate owned by national banks (12 CFR 7.3025, 44
Federal Register 46428), bank service corporations
(12 CFR 7.7390, 44 Federal Register 23812) and loans
secured by real estate (12 CFR 7.2010, 7.2015,
7.2040, 7.2400, 44 Fee/era/ Register 51795). Final regulations adopted in 1979 related to the Change in
Bank Control Act (12 CFR 15, 44 Federal Register
7119), management official interlocks (12 CFR 26, 44
Federal Register 42152), federal branches and agencies of foreign banks (12 CFR 28, 44 Federal Register
65381), establishment of a fair housing home loan data
system (12 CFR 27, 44 Federal Register 63084), and
implementation of the civil money penalty provisions
and broadened cease-and-desist powers conferred on
the Comptroller's Office by Titles I and VIII of the Financial Institutions Regulatory and Interest Rate Control Act of 1978 (FIRA) (12 CFR 19, 44 Federal Register
19374). Attorneys in the division also spent considerable time assisting the Federal Reserve Board staff in
drafting the final version of Regulation O (12 CFR 215)
and answering related inquiries on duties and limitations imposed on national banks and their directors,
officers and 10-percent shareholders by Titles I, VIII
and IX of FIRA.
In addition to interpretive rulings and regulations
published in the Federal Register, significant letter rulings issued by the division are released monthly and
published by various loose-leaf reporting services.
There was an increase in 1979 in questions about
usury because of the dramatic rise in interest rates
and the growing use of the federal alternative rate in
12 USC 85. Other major areas of concern included
bank mergers and dissenting shareholders' rights, incidental banking powers issues under 12 USC 24(7),
conflicts between federal and various state laws as applied to national banks, consumer protection and civil
rights laws and programs, Regulation Q and GlassSteagall Act questions.
Division attorneys worked on a number of assignments for the Federal Financial Institutions Examination
Council since the Comptroller's Chief Counsel is Chairman of the council's Legal Advisory Group. Attorneys
also worked on various contracts and leases for the
Comptroller's Office, including data processing, audit
and construction contracts and real estate leases. Processing Freedom of Information Act requests and applications by national banks to establish charitable
trusts continued to consume a significant amount of
time. A number of special projects were undertaken by
members of the division; they included a legal study of




McFadden Act branching reform alternatives and a
description of the legal environment surrounding the
foreign acquisition of U.S. banks. Two staff members
served as special assistants to the Chief Counsel for a
6-month period.
The division's paralegal unit functions primarily to
handle complaints received from consumers, congressional offices and consumer groups. Those inquiries
relate to a wide range of topics such as credit denials,
national banks' fiduciary duties, billing disputes and interest rates on loans. The paralegal unit received
4,498 consumer inquiries during 1979. The unit resolved 1,042 complaints and referred most of the
others to the Comptroller's regional offices for response. A few referrals were made to other regulatory
authorities. Some 320 assignments were pending at
the end of 1979.
Enforcement and Compliance Division

During 1979, the Enforcement and Compliance Division with the assistance of other Washington and regional personnel developed procedures to implement
the additional enforcement powers conferred by the Financial Institutions Regulatory and Interest Rate Control Act of 1978. Procedures were established for reviewing and assessing civil money penalties against
national banks and associated individuals for violating
banking laws and cease and desist orders.
The division participated in investigations leading to
dismissals of bank officials, referred potential violations of law to prosecuting and investigating agencies,
prosecuted a formal removal action against a bank official and initiated other administrative remedies, including civil money penalty assessments. During
1979, the division concluded two civil money penalty
assessments, 67 formal administrative actions authorized by 12 USC 1818 and 24 memoranda of understanding. The total of 93 formal and informal administrative actions represented an increase of 22 percent
over the preceding year. Each action is summarized in
Appendix C.
The division continued its practice of rendering advice and assistance to investigatory agencies, U.S. attorneys and the Department of Justice on bank fraud
and related matters. During 1979, division personnel
rendered direct trial assistance in eight bank fraud
prosecutions brought by U.S. attorneys.
The division also conducted three seminars on fraud
detection and prevention for senior national bank examiners and representatives of other regulatory agencies. Division personnel also participated in various
programs throughout the United States dealing with
the investigation and prosecution of bank fraud.
During 1979, the division frequently assisted the
Special Projects Division and regional personnel in determining the appropriate remedial and administrative
actions for national banks requiring special supervisory attention.

41




X. Financial Operations of the Office of the
Comptroller of the Currency
Total revenue of the Office of the Comptroller of the
Currency for 1979 was $104.4 million, an increase of 9
percent over 1978, which compares to a 9 percent increase the previous year.^Assessment receipts, which
account for 91 percent of total revenue, amounted to
$94.6 million, an increase of $6.6 million, due principally to an increase in national bank assets. Revenue
from trust examinations totaled $3 million. Revenue
from applications for new branches declined by
$30,000. Revenue from conversion investigation increased by $342,000. Fees for mergers and consolidations increased by $142,000. Revenue from bank
examination reports declined by $104,000. Interest
earned on investments increased by $1.4 million, an
increase of 43 percent; this increase was due mainly
to the higher interest rates earned on Treasury bills.
Revenue from sale of publications increased
$105,000.
Total expenses amounted to $101.3 million in 1979
compared to $92.7 million in 1978, a 9.3 percent increase over 1978.
Salaries, personnel benefits and travel expenses




amounted to $83.3 million, or 83 percent of total expenses for the year. Those three expenses amounted
to $78.4 million in 1978, or 84.5 percent of total expenses. Salary and benefit expense increased by $5
million, or 7.5 percent from 1978. Travel expenses totaled $12.1 million, an increase of $500,000 over 1978.
The remaining expenses totaled $17.5 million, an increase of $3.1 million from the previous year. The most
significant changes occurred in rent, which increased
$818,000, education and career development, which
increased $839,000, and data processing, which increased $410,000.
The equity account is in reality a reserve for contingencies. Financial operations in 1979 increased that
reserve by the $3 million excess of revenue over expenses to $36.5 million at year-end. That represents a
4-month reserve for operating expenses, based on the
level of expenses during the last 3 months of 1979.
The equity account has been administratively restricted in the amount of $2,829,000, as explained in
the note to the financial statements.

43

Table 12
Comptroller of the Currency
balance sheets
December 31
1979

1978

ASSETS
Current assets:
Cash
Obligations of U.S. government (Note 2)
Accrued interest on investments
Accounts receivable
Travel advances
Prepaid expenses and other assets

1,098,624
25,188,101
327,715
1,013,022
1,096,608
140,389

$

169,908
17,977,313
326,288
494,969
894,855
53,286

Long-term obligations of U.S. government (Note 2)

15,142,831

19,916,619
18,171,757

Fixed assets and leasehold improvements (Note 2).
Furniture, equipment and software
Leasehold improvements

5,521,573
5,778,033

5,059,843
5,144,674

11,299,606
3,537,942

10,204,517
2,726,271

Total current assets

Less accumulated depreciation and amortization . .

28,864,459

7,761,664
LIABILITIES AND COMPTROLLER'S EQUITY
Current liabilities:
Accounts payable and accrued expenses
Accrued travel and salaries
Total current liabilities
Long-term liabilities:
Accumulated annual leave
Closed Receivership Funds (Note 3)
Total liabilities
Comptroller's equity:
Administratively restricted (Note 3)
Unrestricted
Commitments and contingencies (Notes 4 and 5):
Total liabilities and Comptroller's equity .
See notes at end of tables.


44


7,478,246

$51,768,954

$45,566,622

$ 3,993,081
3,822,118

$ 1,716,150
3,281,767

7,815,199

4,997,917

4,758,576
2,706,279
15,280,054

4,425,810
2,706,051
12,129,778

2,829,000
33,659,900

2,670,000
30,766,844

36,488,900

Total assets

33,436,844

$51,768,954

$45,566,622

Table 13
Comptroller of the Currency
statements of revenues, expenses and Comptroller's equity
Year ended December 31
1979
1978
Revenues (Note 1):
Semiannual assessments
Examinations and investigations
Investment income
Publication sales
Other
Expenses:
Salaries
Retirement and other employee benefits (Note 4)
Travel and per diem
Rent and maintenance (Note 4)
Communications
Moving and shipping
Employee education and training
Data processing
Printing, reproduction and subscriptions
Office machine repairs and rentals
Depreciation and amortization
Supplies
Consulting services
Conferences
Remodeling
Other
Excess of revenue over expenses
Comptroller's equity at beginning of year
Comptroller's equity at end of year

$ 94,606,960
4,629,902
4,810,307
240,003
96,440
104,383,612

$ 87,993,876
4,045,553
3,361,575
134,940
188,958
95,724,902

65,586,363
6,122,668
12,140,430
5,093,697
1,505,468
1,354,171
2,932,400
2,168,247
1,057,156
612,138
829,105
794,932
389,298
161,737
236,410
347,336
101,331,556
3,052,056
33,436,844
$ 36,488,900

60,893,478
5,807,972
11,650,723
4,274,810
1,547,045
991,625
2,093,678
1,758,138
1,062,180
536,057
800,675
377,329
236,811
138,086
339,585
215,616
92,723,808
3,001,094
30,435,750
$ 33,436,844

See notes at end of tables.




45

Table 14
Comptroller of the Currency
statements of changes in financial position
Year ended December 31
1979
1978
Financial resources were provided by:
Excess of revenues over expenses
Charges not affecting working capital in the period:
Additions to accumulated annual leave
Depreciation and amortization
Amortization of premium and discount on long-term U.S. government
obligations, net
Net (gain) loss on sale of fixed assets

$3,052,056

$3,001,094

890,548
829,105

1,153,788
800,675

30,020
(628)

Working capital provided by operations for the period
Long-term U.S. government obligations transferred to current assets
Proceeds from sale of fixed assets
Net closed receivership fund receipts
Total
Financial resources were used for:
Purchase of long-term investments
Purchase of fixed assets
Payment of accrued leave
Total
Increase in working capital

29,198
1,249
4,986,004

4,801,101
2,998,906
5,106
228
7,805,341

4,994,386

1,117,001
557,782
1,674,783
$6,130,558

210,000
630,165
532,717
1,372,882
$3,621,504

8,047
335

Analysis of Changes in Working Capital

Increase (decrease) in current assets:
Cash
Obligations of U.S. government . . .
Accrued interest on investments . .
Accounts receivable
Travel advances
Prepaid expenses and other assets

Increase in working capital
See notes on next page.


46


$(1,266,784)
4,641,281
(18,186)
(231,824)
169,219
(260,523)

8,947,840
(Increase) decrease in current liabilities:
Accounts payable and accrued expenses
Accrued travel and salaries

928,716
7,210,788
1,427
518,053
201,753
87,103

3,033,183

(2,276,931)
(540,351)
(2,817,282)

85,207
503,114
588,321
$3,621,504

$

$6,130,558

Notes to Financial Statements
December 31, 1979 and 1978
Note 1—Organization
The Comptroller of the Currency (Comptroller's Office) was
created by an Act of Congress for the purpose of establishing and regulating a national banking system. The National
Currency Act of 1863, rewritten and re-enacted as the National Banking Act of 1864, created the Comptroller's Office
and provided for its supervisory functions and the chartering
of banks.
No funds derived from taxes or federal appropriations are
allocated to or used by the Comptroller's Office in any of its
operations. The revenue of the Comptroller's Office is derived principally from assessments and fees paid by the national banks and interest on investments in U.S. government
obligations. Assessments paid by national banks are not
construed to be government funds. The Comptroller's Office
is exempt from federal income taxes.

equity. An analysis of allocable indirect expenses has not
been made.
As a part of the Depository Institutions Deregulation and
Monetary Control Act of 1980 enacted March 31, 1980, the
procedure for terminating the Closed Receivership Funds
was established. Any unclaimed assets remaining after application of this procedure will revert to the general funds of
the Comptroller.
Note 4—Commitments
The Comptroller's Office occupies office space in Washington, D.C., under a lease agreement which provided for an
initial 5-year term with five consecutive 5-year renewal options. During 1978, the first of these options, expiring in
1984, was exercised. However, renewed rental rates have
not been agreed upon and the parties-in-interest are in the
process of negotiating a final settlement. In addition, regional
and sub-regional offices lease space under agreements
which expire at various dates through 1992. Minimum rental
commitments under leases in effect at December 31, 1979,
are as follows:

Note 2—Significant Accounting Policies
The accounting policies of the Comptroller of the Currency
conform to generally accepted accounting principles. The financial statements are prepared on the accrual basis of accounting.
Obligations of the U.S. government are valued at amortized cost. For the current portion of obligations of the U.S.
government, this approximates market value. The market
value of the long-term U.S. government obligations owned at
December 3 1 , 1979 and 1978, was $13,613,000 and
$16,656,000, respectively. It is the intention of the
Comptroller's Office to hold these securities until their maturity, which ranges from 1980 through 1984. Therefore, no valuation reserve has been provided for in either 1979 or 1978.
Premiums and discounts on investments in U.S. government
obligations are amortized ratably over the terms of the obligations.
Furniture, equipment and software are depreciated on a
straight-line basis over the estimated useful lives of the assets, which range from 5 to 10 years. Leasehold improvements are amortized over the terms of the related leases (including renewal options) or the estimated useful lives,
whichever is shorter. Expenditures for maintenance and repairs are charged to earnings as incurred. Significant renovations of assets are capitalized.

Certain of the leases provide that annual rentals may be
adjusted to provide for increases in taxes and other related
expenses.
Total rental expense under operating leases was
$4,745,634 and $3,913,700 for the years ended December
31, 1979 and 1978, respectively.
The Comptroller's Office contributes to the Civil Service retirement plan for the benefit of all its eligible employees.
Contributions aggregated $4,472,000 and $4,133,000 in
1979 and 1978, respectively. The plan is participatory, with 7
percent of salary being contributed by each party.
The accompanying balance sheets include a liability for
annual leave, accumulated within specified limits, which if
not taken by employees prior to retirement is paid at that
date.

Note 3—Closed Receivership Funds
Prior to the assumption of closed national bank receivership functions by the Federal Deposit Insurance Corporation
in 1936, the Comptroller of the Currency appointed individual
receivers for all closed national banks. After settling the affairs of the closed banks and issuing final distributions to the
creditors of the banks (principally depositors), the receivers
transferred to the custody of the Comptroller's Office all remaining funds which represented distributions which were
undeliverable or had not been presented for payment.
Closed Receivership Funds in the accompanying balance
sheets represent the potential claims for such funds by the
original creditors of the receiverships. Since inception of the
receivership function, unclaimed funds have been invested
in U.S. government securities. The income from investments
has been applied as an offset to expenses incurred by the
Comptroller's Office in performing this function and accordingly has been recorded as revenue in the statements of revenues, expenses and Comptroller's equity. Through December 31, 1979, income has exceeded direct expenses by
approximately $2,829,000 (including $159,000 in 1979 and
1978), which excess amount is included in the Comptroller's

Note 5—Contingencies
Various banks in the District of Columbia have deposited
securities with the Comptroller's Office as collateral for those
banks entering into and administering trust activities. These
securities, having a par or stated value of $13,993,000, are
not assets of the Comptroller's Office and accordingly are
not included in the accompanying financial statements.
The Comptroller's Office is a defendant, together with
other bank supervisory agencies and other persons, in litigation generally related to the closing of certain national banks.
In the opinion of the Comptroller's legal staff, the
Comptroller's Office will be able to defend successfully
against these complaints, and no liability is expected to
result therefrom.
During 1979, the Office of Personnel Management (OPM)
submitted an order directing the Comptroller's Office to pay
back wages, representing uncompensated overtime, due
under the Fair Labor Standards Act (FLSA) to certain examiners in the Eleventh National Bank Region. The
Comptroller's Office believes the order was based on erroneous interpretation and application of FLSA standards pertaining to, inter alia, the exempt status of certain examiners




1980
1981
1982
1983
1984
1985 and after

$.5,265,000
5,046,000
4,608,000
4,391,000
2,325,000
2,338,000
$23,973,000

47

and travel time regulations. While the Comptroller's Office
concedes that a liability exists in the Eleventh National Bank
Region (and perhaps the other regions), the amount of this liability cannot reliably be estimated at this time. Moreover, it
is uncertain whether such liability will be payable from funds

of the Comptroller's Office or from funds appropriated by
Congress for claims against the United States. Liability, if
any, resulting from this action is not expected to have a material effect on the financial position or operations of the
Comptroller's Office.

OPINION OF INDEPENDENT ACCOUNTANT
To the Comptroller of the Currency
In our opinion, the accompanying balance sheets, the related statements of revenues, expenses and
Comptroller's equity and of changes in financial position present fairly the financial position of the Comptroller of
the Currency at December 31, 1979 and 1978, and the results of its operations and the changes in its financial position for the years then ended, in conformity with generally accepted accounting principles consistently applied.
Our examinations of these statements were made in accordance with generally accepted auditing standards and
accordingly included such tests of the accounting records and such other auditing procedures as we considered
necessary in the circumstances, including confirmation of securities owned at December 31, 1979 and 1978, by
correspondence with the custodians.
Price Waterhouse & Co.

Washington, D.C.
April 11, 1980


48





APPENDIX A

Merger Decisions, 1979




Merger Decisions, 1979
/. Mergers consummated, involving two or more operating banks
Jan. 1, 1979:
Page
Barnett Bank of Jacksonville, National Association, Jacksonville, Fla.
Barnett Bank of Murray Hill, Jacksonville, Fla.
Barnett Bank of San Jose, Jacksonville, Fla.
Barnett Bank of Regency, Jacksonville, Fla.
Barnett Bank of North Jacksonville, Jacksonville, Fla.
Merger
55
Jan. 1, 1979:
Bay State National Bank, Lawrence, Mass.
Citizens Bank and Trust Company of Peabody, Peabody,
Mass.
Merger
56
Jan. 1, 1979:
Fidelity American Bank, NA, Lynchburg, Va.
Fidelity American Bank, NA, Halifax, Va.
Fidelity American Bank, NA, Roanoke Valley, Roanoke
County, Va.
Fidelity American Bank, Chatham, Va.
Fidelity American Bank, Natural Bridge, Natural Bridge
Station, Va.
Fidelity American Bank, Buena Vista, Buena Vista, Va.
Merger
57
Jan. 1, 1979:
The First American National Bank of St. Cloud, St. Cloud,
Minn.
The First State Bank of Rice, Rice, Minn.
Merger
58
Jan. 1, 1979:
First Merchants National Bank, Neptune Township, N.J.
Midlantic National Bank/Raritan Valley, Edison Township,
N.J.
Merger
59
Jan. 31, 1979:
Atlantic First National Bank of Gainesville, Gainesville,
Fla.
Atlantic Bank of Gainesville, Gainesville, Fla.
Merger
60
Feb. 20, 1979:
Dominion National Bank of the Peninsula, York County,
Va.
Dominion National Bank of Tidewater, Norfolk, Va.
Merger
61
Feb. 28, 1979:
Southern National Bank of North Carolina, Lumberton,
N.C.
Goldsboro Branch of North Carolina National Bank, Charlotte, N.C.
Purchase
62
Mar. 5, 1979:
Old National Bank of Washington, Spokane, Wash.
Four Branches of Rainier National Bank, Seattle, Wash.
Purchase
63
Mar. 5, 1979:
Old National Bank of Washington, Spokane, Wash.
Two Branches of Pacific National Bank of Washington,
Seattle, Wash.
Purchase
68
Mar. 5, 1979:
Pacific National Bank of Washington, Seattle, Wash.
Three Branches of Old National Bank of Washington,
Spokane, Wash.
Purchase
73




Mar. 5, 1979:
Rainier National Bank, Seattle, Wash.
Four Branches of First National Bank in Spokane, Spokane, Wash.
One Branch of Old National Bank of Washington, Spokane, Wash.
Purchase
Mar. 31, 1979:
Atlantic First National Bank of Daytona Beach, Daytona
Beach, Fla.
Atlantic Bank of West Daytona Beach, Daytona Beach,
Fla.
Merger
Apr. 1, 1979:
Royal Trust Bank of Miami, N.A., Miami, Fla.
Royal Trust Bank of South Dade, N.A., Unincorporated
Area of Dade County (P.O. Miami)
Merger
Apr. 16, 1979:
The Central Trust Company, National Association, Cincinnati, Ohio
The Central Trust Company of Montgomery County, National Association, Dayton, Ohio
Merger
Apr. 30, 1979:
Bankers Trust Company of Albany, National Association,
Albany, N.Y.
Bankers Trust Company of Central New York, Utica, N.Y.
Merger
Apr. 30, 1979:
The Central Trust Company of Northeastern Ohio, National Association, Canton, Ohio
The Central Trust Company of Wayne County, Wooster,
Ohio
Merger
May 7, 1979:
Warrick National Bank of Boonville, Boonville, Ind.
The Colonial National Bank, Ohio Township (P.O. Tennyson), Ind.
Merger
May 21, 1979:
The Third National Bank and Trust Company of Dayton,
Ohio, Dayton, Ohio
The Citizens First National Bank of Greene County,
Xenia, Ohio
Merger
May 22, 1979:
First National City Bank of Alliance, Alliance, Ohio
First National Bank of Sebring, Sebring, Ohio
Merger
May 30, 1979:
The First National Bank of Maryland, Baltimore, Md.
The Sharpsburg Bank of Washington County, Sharpsburg, Md.
Merger
May 31, 1979:
Virginia National Bank, Norfolk, Va.
New Bank of Roanoke, Roanoke, Va.
Merger
June 1, 1979:
The First National Bank of Shreveport, Shreveport, La.
Caddo Trust and Savings Bank, Belcher, La.
Merger

78

83

84

84

85

85

86

87

89

90

91

92

51

June 1, 1979:
Page
Sun First National Bank of Melbourne, Melbourne, Fla.
Sun Bank of Cocoa, National Association, Cocoa, Fla.
Merger
93
June 29, 1979:
First National Bank of Mercer County, Celina, Ohio
The Home Banking Company, St. Marys, Ohio
Merger
94
June 29, 1979:
The Ohio National Bank of Columbus, Columbus, Ohio
Akron National Bank, Akron, Ohio
The Capital National Bank, Cleveland, Ohio
The First National Bank of Springfield, Springfield, Ohio
The First National Bank of Newark, Newark, Ohio
First National Bank of Coshocton, Coshocton, Ohio
The First National Bank of Chillicothe, Chillicothe, Ohio
The Western Security Bank, Sandusky, Ohio
The Citizens National Bank in Zanesville, Zanesville, Ohio
The Niles Bank Company, Niles, Ohio
The First National Bank of Delaware, Delaware, Ohio
The First National Bank of Jackson, Jackson, Ohio
The National Bank of Portsmouth, Portsmouth, Ohio
The Central National Bank of Cambridge, Cambridge,
Ohio
The Hocking Valley National Bank of Lancaster, Lancaster, Ohio
The Ohio Bank and Trust Company, New Philadelphia,
Ohio
The Citizens National Bank of Ironton, Ironton, Ohio
The Medina County Bank, Medina, Ohio
The First National Bank of Cadiz, Cadiz, Ohio
The First National Bank of Tiffin, Tiffin, Ohio
The Knox County Savings Bank, Mount Vernon, Ohio
The Community Bank, Napoleon, Ohio
The Farmers and Merchants Bank of Logan, Logan, Ohio
The First National Bank of Marysville, Marysville, Ohio
The First National Bank of London, London, Ohio
The First National Bank of Washington Court House,
Washington Court House, Ohio
The Kenton Savings Bank, Kenton, Ohio
National Bank of Loveland, Loveland, Ohio
The Perry County Bank, New Lexington, Ohio
The First National Bank of Wilmington, Wilmington, Ohio
The Second National Bank of Circleville, Circleville, Ohio
The Cummings Bank Company, Carrollton, Ohio
The Citizens Banking Company, Perrysburg, Ohio
The Peoples National Bank of Greenfield, Greenfield,
Ohio
The Logan County Bank, Bellefontaine, Ohio
The Peoples Savings Bank Company, Delta, Ohio
The Ohio State Bank of Dayton, Dayton, Ohio
The Geauga County National Bank of Chardon, Chardon,
Ohio
The Adams Bank, Millersburg, Ohio
The First National Bank at East Palestine, East Palestine,
Ohio
Merger
95
June 30, 1979:
The Central National Bank of Richmond, Richmond, Va.
Fidelity American Bank, NA, Richmond, Henrico County,
Va.
Cavalier Central Bank & Trust Company, Hopewell, Va.
Merger
96
June 30, 1979:
First & Merchants National Bank, Richmond, Va.
The First National Bank of Danville, Danville, Va.
Merger
97
June 30, 1979:
National Community Bank of New Jersey, Rutherford,
N.J.
Arcadia National Bank, Secaucus, N.J.
Merger
97
July 1, 1979:
Southeast First National Bank of Miami, Miami, Fla.
Southeast First National Bank of Miami Springs, Miami
Springs, Fla.
Southeast National Bank of Coral Way, Miami, Fla.

52


Southeast Bank of Dadeland, Unincorporated Area of Page
Dade County, Fla.
Southeast National Bank of Tamiami, Unincorporated
Areas of Dade County, Fla.
Southeast Bank of Westland, Hialeah, Fla.
Merger
98
July 2, 1979:
The Farmers National Bank of Cynthiana, Cynthiana, Ky.
Union Bank of Berry, Berry, Ky.
Purchase
99
July 2, 1979:
The First National Bank of Farmville, Farmville, Va.
The Bank of Buckingham, Dillwyn, Va.
Merger
100
July 2, 1979:
National Bank and Trust Company, Charlottesville, Va.
New Bank of Culpeper, Culpeper, Va.
Merger
100
July 14, 1979:
Wells Fargo Bank, National Association, San Francisco,
Calif.
First Central Coast Bank, San Luis Obispo, Calif.
Merger
101
July 30, 1979:
Society National Bank of Cleveland, Cleveland, Ohio
Society Bank of Painesville, Ohio
Merger
102
Aug. 27, 1979:
Heritage Bank, N.A. - Flushing, Flushing, Ohio
The Eastern Ohio Bank, Union Township, Ohio
Merger
102
Aug. 31, 1979:
The Planters National Bank and Trust Company, Rocky
Mount, N.C.
Liberty Bank & Trust Company, Durham, N.C.
Purchase
103
Sept. 14, 1979:
The National Bank of South Carolina, Sumter, S.C.
Bank of North Charleston, North Charleston, S.C.
Purchase
104
Sept. 28, 1979:
First National Bank of Nevada, Reno, Nev.
Bank of Nevada, Las Vegas, Nev.
Consolidation
105
Sept. 28, 1979:
The Peoples National Bank and Trust Company, Dover,
Ohio
The Gnadenhutten Bank, Gnadenhutten, Ohio
Merger
105
Sept. 30, 1979:
First National Bank of Hollywood, Hollywood, Fla.
First National Bank of Hallandale, Hallandale, Fla.
Hollywood National Bank, Hollywood, Fla.
First National Bank of Miramar, Miramar, Fla.
Merger
106
Sept. 30, 1979:
Southern National Bank of North Carolina, Lumberton,
N.C.
Carolina State Bank, Gastonia, N.C.
Merger
107
Oct. 1, 1979:
Bank of Jackson, N.A., Jackson, Miss.
Fidelity Bank, Utica, Miss.
Purchase
108
Oct. 1, 1979:
The Barnstable County National Bank of Hyannis, Barnstable, Mass.
Chatham Trust Company, Chatham, Mass.
Merger
109
Oct. 4, 1979:
The Central Trust Company, National Association, Cincinnati, Ohio
The Citizens National Bank of Middleport, Ohio
Merger
110
Oct. 4, 1979:
The Central Trust Company, National Association, Cincinnati, Ohio

The First National Bank of Gallipolis, Gallipolis, Ohio
Page
Merger
111
Oct. 15, 1979:
The Merchants National Bank of Fort Smith, Fort Smith,
Ark.
Continental Bank and Trust Company, Barling, Ark.
Merger
112
Oct. 31, 1979:
The First National Bank in Sioux Falls, Sioux Falls, S.
Dak.
Dakota State Bank of Dell Rapids, Dell Rapids, S. Dak.
Purchase
113
Oct. 31, 1979:
Mid-American National Bank and Trust Company,
Northwood, Ohio
Farmers and Merchants Bank Company, Arlington, Ohio
Merger
113
Nov. 1, 1979:
The First National Bank of Maryland, Baltimore, Md.
The National Bank of Perryville, Perryville, Md.
Merger
114
Nov. 9, 1979:
Central Fidelity Bank, N.A., Richmond, Va.
City Savings Bank and Trust Company, Petersburg, Va.
The Citizens National Bank of Emporia, Emporia, Va.
Merger
115
Nov. 23, 1979:
The First National Bank in Bryan, Bryan, Ohio
The Farmers State Bank of Stryker, Stryker, Ohio
Merger
116
Nov. 30, 1979:
Century First National Bank in St. Petersburg, St. Petersburg, Fla.
Century Bank of Pinellas County, St. Petersburg, Fla.
Merger
117
Nov. 30, 1979:
First & Merchants National Bank, Richmond, Va.
The Services National Bank, Arlington, Va.
Merger
117
Nov. 30, 1979:
Indian Head National Bank of Nashua, Nashua, N.H.
Indian Head National Bank of Derry, Derry, N.H.
Merger
118
Nov. 30, 1979:
The National Bank and Trust Company of Gloucester
County, Woodbury, N.J.
The National Bank of Manuta, Sewell, N.J.
Merger
119
Dec. 1, 1979:
The Lake County National Bank of Painesville, Painesville, Ohio
The Commercial Bank, Ashtabula, Ohio
Merger
120
Dec. 1, 1979:
The New Farmers National Bank of Glasgow, Glasgow,
Ky.
The Peoples Bank, Cave City, Ky.
Merger
121
Dec. 1, 1979:
Sun First National Bank of Lake Wales, Lake Wales, Fla.

Sun First National Bank of Polk County, Auburndale, Fla.
Merger
Dec. 3, 1979:
National Central Bank, Lancaster, Pa.
Lebanon County Trust Company, Lebanon, Pa.
Merger
Dec. 3, 1979:
North Carolina National Bank, Charlotte, N.C.
The Bank of Asheville, Asheville, N.C.
Merger
Dec. 7, 1979:
American National Bank and Trust Company of Chicago,
Chicago, III.
Mercantile National Bank of Chicago, Chicago, III.
Purchase
Dec. 14, 1979:
Northwestern National Bank of Sioux Falls, Sioux Falls, S.
Dak.
Springfield State Bank, Springfield, S. Dak.
Merger
Dec. 28, 1979:
First National Bank of Catawba County, Hickory, N.C.
Western Carolina Bank and Trust Company, Asheville,
N.C.
Purchase
Dec. 28, 1979:
The Oneida National Bank and Trust Company of Central
New York, Utica, N.Y.
The Little Falls National Bank, Little Falls, N.Y.
Merger
Dec. 31, 1979:
Deposit Guaranty National Bank, Jackson, Miss.
Bank of Inverness, Inverness, Miss.
Merger
Dec. 31, 1979:
The Huntington National Bank of Columbus, Columbus,
Ohio
The Huntington Bank of Toledo, Toledo, Ohio
The Huntington Portage National Bank of Kent, Kent, Ohio
The Huntington First National Bank of Lima, Lima, Ohio
The Huntington Bank of Wood County, Bowling Green,
Ohio
The Huntington First National Bank of Medina County,
Wadsworth, Ohio
The Huntington Lagonda National Bank of Springfield,
Springfield, Ohio
The Huntington Bank of Chillicothe, Chillicothe, Ohio
The Huntington First National Bank of Kenton, Kenton, Ohio
The Huntington Bank of Washington Court House, Washington Court House, Ohio
The Huntington National Bank of Bellefontaine, Bellefontaine, Ohio
The Huntington National Bank of Franklin, Franklin, Ohio
The Huntington Bank of Woodville, Woodville, Ohio
The Huntington Bank of Ashland, Ashland, Ohio
The Huntington National Bank of London, London, Ohio
The Huntington National Bank, Columbus, Ohio
Merger

Page
122

123

124

125

126

127

128

129

130

//. Mergers consummated, involving a single operating bank
Jan. 2, 1979:
City National Bank, Fort Worth, Tex.
5600 Lancaster National Bank, Fort Worth, Tex.
Merger
Jan. 30, 1979:
National Lumberman's Bank and Trust Company, Muskegon, Mich.
NLB National Bank of Muskegon, Muskegon, Mich.
Merger
Feb. 9, 1979:
First Waco Bank, National Association, Waco, Tex.
The First National Bank of Waco, Waco, Tex.
Merger



131

131

Mar. 1, 1979:
The Lufkin National Bank, Lufkin, Tex.
New Lufkin National Bank, Lufkin, Tex.
Merger
Mar. 16, 1979:
National Bank of Commerce of Dallas, Dallas, Tex.
New National Bank of Commerce of Dallas, Dallas, Tex.
Merger
Mar. 29, 1979:
Gulf Bank, National Association, Houston, Tex.
Gulf Freeway National Bank, Houston, Tex.
Merger

133

134

134

132

53

Apr. 13, 1979:
Page
First National Bank of Clermont County, Bethel, Ohio
First Bank of Clermont County, N.A.
Merger
135
Apr. 30, 1979:
The Huron County Banking Company, National Association, Norwalk, Ohio
H.C.B. National Bank of Norwalk, Norwalk, Ohio
Consolidation
136
May 1, 1979:
The First National Bank of Piano, Piano, Tex.
1409 Avenue K National Bank, Piano, Tex.
Merger
136
May 15, 1979:
Citizens Bank, National Association, Denison, Tex.
The Citizens National Bank of Denison, Denison, Tex.
Merger
137
June 30, 1979:
Anaheim National Bank, Anaheim, Calif.
ANB National Bank, Anaheim, Calif.
Merger
138
June 30, 1979:
City National Bank & Trust Co. of Rockford, Rockford, III.
City Bank, National Association, Rockford, III.
Merger
138
July 9, 1979:
First National Bank of Evergreen Park, Evergreen Park, III.
FNEP National Bank, Evergreen Park, III.
Merger
139


54


Aug. 29, 1979:
The First National Bank of Galion, Galion, Ohio
Galion National Bank, Galion, Ohio
Consolidation
Sept. 12, 1979:
Citizens National Bank of Limestone County, Athens, Ala.
Limestone Bank, N.A., Athens, Ala.
Merger
Sept. 19, 1979:
Lewisville Bank, N.A., Lewisville, Tex.
Lewisville National Bank, Lewisville, Tex.
Merger
Sept. 20, 1979:
The National City Bank of Marion, Marion, Ohio
New Marion National Bank, Marion, Ohio
Consolidation
Nov. 29, 1979:
The Citizens National Bank, Bryan, Ohio
New Bryan National Bank, Bryan, Ohio
Consolidation
Dec. 31, 1979:
Belleville National Savings Bank, Belleville, III.
Belleville National Bank, Belleville, III.
Merger
Dec. 31, 1979:
First National Bank in Conroe, Conroe, Tex.
West Davis National Bank, Conroe, Tex.
Merger

140

140

141

142

142

143

144

Mergers consummated, involving two or more operating banks
BARNETT BANK OF JACKSONVILLE, NATIONAL ASSOCIATION,
Jacksonville, Fla., and Barnett Bank of Murray Hill, Jacksonville, Fla., and Barnett Bank of San Jose, Jacksonville,
Fla., and Barnett Bank of Regency, Jacksonville, Fla., and Barnett Bank of North Jacksonville, Jacksonville, Fla.
Banking offices
Names of banks and type of transaction

Total
assets

Barnett Bank of Murray Hill, Jacksonville, Fla., with
and Barnett Bank of North Jacksonville, Jacksonville, Fla., with
and Barnett Bank of Regency, Jacksonville, Fla., with
and Barnett Bank of San Jose, Jacksonville, Fla., with
and Barnett Bank of Jacksonville, National Association, Jacksonville, Fla. (9049), which had
merged January 1, 1979, under charter and title of the latter bank (9049). The merged bank at date
of merger had

COMPTROLLER'S DECISION
Application has been made to the Office of the Comptroller of the Currency seeking prior permission to
merge Barnett Bank of Murray Hill, Jacksonville, Fla.,
Barnett Bank of North Jacksonville, Jacksonville, Fla.,
Barnett Bank of Regency, Jacksonville, Fla., and
Barnett Bank of San Jose, Jacksonville, Fla. (collectively, "Merging Banks"), into Barnett Bank of Jacksonville, National Association; Jacksonville, Fla. ("Charter
Bank"), under the charter and title of Barnett Bank of
"Jacksonville, National Association." The subject application rests on an agreement executed between the
proponent banks and is incorporated herein by reference, the same as if fully set forth.
Charter Bank was granted National Banking Association charter number 9049 by this Office on March 2,
1908, and as of June 30, 1978, had total commercial
bank deposits of $284.7 million.
Merging Banks were established ate novo as statechartered commercial banking institutions by their parent bank holding company, Barnett Banks of Florida,
Inc., Jacksonville, Fla., a registered multibank holding
company. As of June 30, 1978, Merging Banks had total deposits of approximately $138.6 million.
Inasmuch as all five of the proponent banks are
wholly owned subsidiaries of the same bank holding
company, there is no meaningful competition existent




In
To be
operation operated

$ 67,274,000
19,838,000
32,885,000
40,663,000
374,795,000
505,532,000

16

among them, nor is there any potential for increased
future competition. The proposed merger essentially
represents a corporate reorganization whereby Barnett
Banks of Florida, Inc., is consolidating its commercial
banking interests located within Duval County.
This application was filed prior to the November 6,
1978, effective date of the Comptroller's Community
Reinvestment Act regulations, 12 CFR 25. However,
pursuant to the Community Reinvestment Act, Public
Law No. 95-128, available information relevant to the
banks' records of meeting community credit needs
was reviewed, revealing no evidence to suggest that
the applicants are not meeting the credit needs of their
community, including low and moderate income neighborhoods.
Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that this application is not adverse to the public
interest and should be, and hereby is, approved.
November 29, 1978
SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are all wholly owned subsidiaries
of the same bank holding company. As such, their proposed merger is essentially a corporate reorganization
and would have no effect on competition.

55

BAY STATE NATIONAL BANK,
Lawrence, Mass., and Citizens Bank and Trust Company of Peabody, Peabody, Mass.
Banking offices
Names of banks and type of transaction

Total
assets

Citizens Bank and Trust Company of Peabody, Peabody, Mass., with
and Bay State National Bank, Lawrence, Mass. (1014), which had
merged January 1, 1979, under charter and title of the latter bank (1014). The merged bank at date
of merger had

$

7,565,000
115,058,000
127,636,000

In
To be
operation operated

2
10
12

COMPTROLLER'S DECISION
Pursuant to the statutory requirements of the Bank
Merger Act (12 USC 1828(c)), an application has been
filed with the Office of the Comptroller of the Currency
that requires the prior written consent of this Office to
the proposed merger of Citizens Bank and Trust Company of Peabody, Peabody, Mass. ("Merging Bank"),
into Bay State National Bank, Lawrence, Mass. ("Charter Bank"). The subject application is based on an
agreement executed between the proponent banks
and is incorporated herein by reference, the same as if
fully set forth.
Charter Bank is a commercial banking subsidiary of
Massachusetts Bay Bancorp, Inc., Lawrence, Mass., a
registered multibank holding company that on December 31, 1977, had consolidated deposits of $156.6 million. Charter Bank has operated under National Banking Association charter number 1014 since granted by
this Office on May 15, 1865. As of December 31, 1977,
Charter Bank had total deposits of slightly in excess of
$106 million and operated 10 banking offices.
Merging Bank, a state-chartered commercial bank,
at calendar year-end 1977, operated two banking offices and had total deposits of almost $6 million.
The proponent banks are represented in Essex
County, north of Boston. The closest offices of Charter
Bank and Merging Bank are approximately 10 miles
apart, and the main offices of the proponents are
about 18 miles apart. There are numerous offices of
other commercial banks within the intervening area,
and neither of the participating banks appears to obtain any significant volume of loan and/or deposit business from areas served by the other. It is therefore


56


concluded that approval of this application would
result in no substantially adverse effect on competition.
Charter Bank should be in a position to expand and
improve on existing banking services offered to Merging Bank's customers and introduce additional banking services into the Peabody area. Considerations relating to convenience and needs do not appear to be
inconsistent with approval of the application.
The financial managerial resources of both of the
proponents are generally satisfactory, and the future
prospects of both banks should be favorably enhanced as a result of approval of the application.
This application was filed prior to the November 6,
1978, effective date of the Comptroller's Community
Reinvestment Act regulations, 12 CFR 25. However,
pursuant to the Community Reinvestment Act, Public
Law No. 95-128, available information relevant to the
bank's record of meeting its community credit needs
was reviewed, revealing no evidence to suggest that
the applicants are not meeting the credit needs of their
community including low and moderate income neighborhoods.
Accordingly, applying the statutory criteria, it is the
conclusion of this Office that the application is not adverse to the public interest and is approved.
November 30, 1978
SUMMARY OF REPORT BY ATTORNEY GENERAL
We have reviewed this proposed transaction and conclude that it would not have a significantly adverse effect upon competition.

FIDELITY AMERICAN BANK, NA,
Lynchburg, Va., and Fidelity American Bank, NA, Halifax, Halifax, Va., and Fidelity American Bank, NA, Roanoke
Valley, Roanoke County, Va., and Fidelity American Bank, Chatham, Va., and Fidelity American Bank, Natural
Bridge, Natural Bridge Station, Va., and Fidelity American Bank, Buena Vista, Buena Vista, Va.
Names of banks and type of transaction

Total
assets

Fidelity American Bank, Buena Vista, Buena Vista, Va., with
and Fidelity American Bank, Chatham, Va., with
and Fidelity American Bank, NA, Halifax, Halifax County, Va. (16313), with
and Fidelity American Bank, Natural Bridge, Natural Bridge Station, Va., with
and Fidelity American Bank, NA, Roanoke Valley, Roanoke County, Va. (16192), with
and Fidelity American Bank, NA, Lynchburg, Va. (1522), which had
merged January 1, 1979, under charter and title of the latter bank (1522). The merged bank at date
of merger had

COMPTROLLER'S DECISION
The Office of the Comptroller of the Currency is in receipt of an application, pursuant to the Bank Merger
Act (12 USC 1828(c)), requesting prior permission to
merge Fidelity American Bank, Buena Vista, Buena
Vista, Va. ("Buena Vista Bank"); Fidelity American
Bank, Chatham, Va. ("Chatham Bank"); Fidelity American Bank, NA, Halifax, Unincorporated Area of Halifax
County, Va. ("Halifax Bank"); Fidelity American Bank,
Natural Bridge, Natural Bridge Station, Va. ("Natural
Bridge Bank"); and Fidelity American Bank, NA, Roanoke Valley, Roanoke County, Va. ("Roanoke Bank"),
into Fidelity American Bank, NA, Lyncburg, Va.
("Charter Bank"), under the charter and title of "Fidelity
American Bank, NA." The subject application rests on
an agreement executed between the proponent
banks, and is incorporated herein by reference, the
same as if fully set forth.
Charter Bank has operated as a National Banking
Association since August 11, 1865, when it was
granted charter number 1522 by this Office. As of
June 30, 1978, Charter Bank had total commercial
bank deposits of $421.5 million.
Buena Vista Bank was established as a state banking institution in 1906, and as of June 30, 1978, had total commercial bank deposits of $7.6 million.
Chatham Bank commenced operations as a statechartered bank in 1878, and held total deposits of
$17.4 million on June 30, 1978.
Halifax Bank received its charter as a National Banking Association on April 26, 1974, when it was granted
charter number 16313 by this Office. As of June 30,
1978, Halifax Bank had total commercial bank deposits of $25.9 million.
Natural Bridge Bank was chartered as a state banking institution in 1921 and as of June 30, 1978, had total deposits of $8.9 million.




$

8,773,000
20,768,000
32,788,000
10,003,000
21,415,000
603,655,000
694,367,000

Banking offices
In
To be
operation operated
2
1
2
1
4
24
34

Roanoke Bank was granted National Banking Association charter number 16192 by this Office on September 26, 1973, and held total commercial bank deposits of $17.2 million on June 30, 1978.
All six of the banks involved in the proposed merger
are banking subsidiaries of Fidelity American Bankshares, Inc., Lynchburg, a registered multibank holding company. Due to their common ownership and
control, approval of this merger would not produce an
adverse impact on any relevant area of consideration.
This application is regarded essentially as a corporate
reorganization whereby Fidelity American Bankshares,
Inc., is consolidating a portion of its banking interests.
This application was filed prior to the November 6,
1978, effective date of the Comptroller's Community
Reinvestment Act regulations, 12 CFR 25. However,
pursuant to the Community Reinvestment Act, Public
Law No. 95-128, available information relevant to the
banks' records of meeting their community credit
needs was reviewed, revealing no evidence to suggest that the applicants are not meeting the credit
needs of their communities, including low and moderate income neighborhoods.
It is therefore the opinion of the Office of the Comptroller of the Currency that this merger is not adverse
to the public interest and should be, and hereby is, approved.
November 29, 1978

SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are all wholly owned subsidiaries
of the same bank holding company. As such, their proposed merger is essentially a corporate reorganization
and would have no effect on competition.

57

THE FIRST AMERICAN NATIONAL BANK OF ST. CLOUD,
St. Cloud, Minn., and The First State Bank of Rice, Rice, Minn.
Banking offices
Names of banks and type of transaction

Total
assets

The First State Bank of Rice, Rice, Minn., with
and The First American National Bank of St. Cloud, St. Cloud, Minn. (11818), which had
merged January 1, 1980, under the charter and title of latter bank (11818). The merged bank at
date of merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge The First State Bank of Rice, Rice, Minn. ("State
Bank"), into The First American National Bank of St.
Cloud, St. Cloud, Minn. ("First"). The application was
accepted for filing on April 5, 1979, and is based on a
written agreement executed by the proponents on January 31, 1979.
State Bank operates from a single office approximately 15 miles from St. Cloud. It reported total deposits of $2.8 million on December 31, 1978.
First also operates from a single office in St. Cloud
and reported total deposits of $87.5 million on December 31, 1978. It is a subsidiary of the Otto Bremer
Foundation, a registered bank holding company. The
Otto Bremer Foundation is the third largest banking organization in the state with 2.8 percent of the state's
commercial bank deposits.
The applicants contend that First competes in a
banking market which is approximated by the St.
Cloud Standard Metropolitan Statistical Area
("SMSA"). First is the only subsidiary of the Otto Bremer Foundation operating within this market. It is the
largest of 24 banking organizations operating in this
market with 19 percent of the market's commercial
bank deposits.* Consummation of the merger would
increase its share of market deposits by less than 1
percent.
The Federal Reserve System has delineated a more
limited definition of the relevant banking market, approximated by the eastern half of Stearns County, the
western half of Sherburne County and all of Benton
County. Within this market, First is the largest of 19
banking organizations with 21 percent of commercial
bank deposits. Consummation of the proposal would
increase its share of this market's deposits by less
than 1 percent.
Because of its size, State Bank serves only its small
community and nearby rural areas. State Bank's market is entirely included in either the Federal Reserve or

* Market data is as of December 31, 1977, unless otherwise
indicated. Market totals do not include deposits of Granite
City National Bank, St. Cloud, which opened in 1978, or deposits of a branch of Santiago State Bank, which are not reported separately.


58


$

In
To be
operation operated

2,733,000
116,480,000
119,059,000

the SMSA definition of First's banking market. First reports that it has extended 13 direct loans totaling $1.4
million in this area (2.6 percent of its total loans), and it
also undoubtedly receives some deposits from the
area. Consummation of the proposal would eliminate
some existing competition but because of the large
number of commercial banks competing in the relevant market, including the two largest banking organizations in the state, and the small market share of
State Bank, the effect on competition would not be adverse.
First could not now establish a branch (detached facility) in Rice due to the head office protection provisions of Minnesota banking law. Since detached facilities are not protected, consummation of the merger
would open the community to branching by other commercial banks.
First's financial and managerial resources are satisfactory and its future prospects are favorable. State
Bank's financial and managerial resources are limited.
Its future prospects are uncertain due to substantial
operating problems and its small size.
First will provide additionar banking services to the
present customers of State Bank if the merger is consummated. These services include automated tellers
and data processing, larger loans and additional lending expertise. The continuing bank will also be a single
source of banking services that is convenient to both
home and work for those customers who commute
from Rice to St. Cloud. Consummation of the merger
will result in increased convenience and satisfaction of
additional needs for the consumer of banking services
in Rice.
A review of the record of this application and other
information available to this Office as a result of its regulatory reponsibilities revealed no evidence that First's
record of helping to meet the credit needs of its entire
community, including low and moderate income communities, is less than satisfactory.
This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), for the applicants to proceed with the merger.
November 21, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
We have reviewed this proposed transaction and conclude that it would not have any adverse effect upon
competition.

FIRST MERCHANTS NATIONAL BANK,
Neptune Township, N.J., and Midlantic National Bank/Raritan Valley, Edison Township, N.J.
Banking offices
Names of banks and type of transaction

Total
assets*

First Merchants National Bank, Neptune Township, N.J. (13363), with
and Midlantic National Bank/Raritan Valley, Edison Township, N.J. (15430), which had
merged January 1, 1979, under charter of the latter bank (15430) and title "First Merchants National
Bank." The merged bank at date of merger had

COMPTROLLER'S DECISION
Pursuant to 12 USC 1828(c), the Bank Merger Act, an
application has been filed with the Office of the Comptroller of the Currency requesting prior permission to
merge First Merchants National Bank, Neptune Township, N.J. ("First Merchants"), the Merging Bank, into
Midlantic National Bank/Raritan Valley, Edison Township, N.J. ("Midlantic National"), the Charter Bank, under the charter of Midlantic National Bank/Raritan Valley, and with the title "First Merchants National Bank."
The subject application rests on an agreement executed between the proponent banks and is incorporated herein by reference, the same as if fully set forth.
Midlantic National has operated under National
Banking Association charter number 15430 since the
charter was granted by this Office on November 16,
1964. As of June 30, 1978, Midlantic National had total
commercial bank deposits of $56.1 million and operated eight banking offices within Northern Middlesex
County. Additionally, the Charter Bank is a wholly
owned subsidiary of Midlantic Banks, Inc., West Orange, N.J. ("MBI"), a registered multibank holding
company whose six banking subsidiaries controlled total deposits aggregating $1.8 billion as of calendar
year-end 1977.
First Merchants was organized as a state-chartered
bank in 1910 and converted to a National Banking Association with charter number 13363 on August 10,
1929. As of June 30, 1978, First Merchants had total
commercial bank deposits of $270.3 million and operated 20 banking offices within Monmouth County.
The closest offices of the two subject banks, Midlantic National's Sayreville Branch and the Holmdel
Branch of First Merchants, are approximately 9 miles
apart. Additionally, the closest office of any other MBI
subsidiary bank to a First Merchants' banking office is
approximately 6 miles distant and is also in Middlesex
County. Within the intervening area between these
closest offices, there are numerous banking alternatives conveniently available to the banking public. Furthermore, First Merchants is subject to the competitive
impact of banking offices of other larger commercial
banking organizations in its market area. It is therefore
concluded that the proposed merger would not eliminate any meaningful degree of existing competition
between the Merging Bank and the Charter Bank of
MBI.
New Jersey state banking statutes permit de novo
* Asset figures are as of call dates immediately before and
after transaction.



$305,659,000
63,377,000
305,878,000

In
To be
operation operated
20
28

branch expansion by commercial banks into any municipality within the state (except for those municipalities with a population of less than 10,000 inhabitants
and where the principal banking office of a commercial bank is domiciled). The instant proposal would
thus have the effect of foreclosing the development of
any competition between the subject proponents in the
future. However, First Merchants has historically concentrated its efforts within Monmouth County, and it
does not appear likely that the Merging Bank would
employ de novo expansion into any area currently
served by MBI. Furthermore, the likelihood that MBI
would enter Monmouth County de novo appears remote inasmuch as the county is not considered particularly attractive for this mode of entry. Accordingly, this
foreclosure is not regarded as competitively significant, and thus overall, approval of this application
would not have a substantially adverse effect on competition.
Midlantic National and First Merchants both currently offer a full range of commercial banking services
to their customers. With the additional capabilities of
Midlantic National in conjunction with its corporate parent, new and expanded banking services would be
made available to present customers of First Merchants in such areas as international banking, full trust
services, automobile leasing and a substantially larger
legal lending limit. The banking public should be better served. Considerations relating to convenience and
needs benefits are regarded as a positive factor in
considering approval of this proposal.
The financial and managerial resources of both the
Charter Bank and the Merging Bank are regarded as
satisfactory and should favorably enhance the future
prospects of the resulting bank. The financial and
managerial resources of MBI are considered generally
satisfactory.
This application was filed prior to the November 6,
1978, effective date of the Comptroller's Community
Reinvestment Act regulations, 12 CFR 25. However,
pursuant to the Community Reinvestment Act, Public
Law No. 95128, available information relevant to the
banks' records of meeting community credit needs
was reviewed, revealing no evidence to suggest that
the applicants are not meeting the needs, including
those of low and moderate income neighborhoods.
Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that this application is not adverse to the public
interest and is approved.
November 29, 1978
59

SUMMARY OF REPORT BY ATTORNEY GENERAL
Monmouth County is located in the eastern-central
portion of New Jersey. According to the application,
the economy of the county is based primarily on tourism, manufacturing and agriculture. The county has
experienced moderate population growth in recent
years and for the period 1970-76 ranked 10th among
New Jersey's 21 counties in the rate of population
growth.
None of Midlantic's subsidiary banks operate an office in Monmouth County, the only county in which
Bank operates offices. However, two Midlantic subsidiaries, Applicant and Midlantic National Bank/Cranbury,
Cranbury, operate offices in Middlesex County which
is adjacent to Monmouth County. The closest offices of
a subsidiary of Midlantic and an office of Bank are approximately 6 miles apart, and there are offices of
some other banks in the intervening area. However,
there appears to be some competition between
Midlantic's subsidiaries and Bank, whose offices are
dispersed throughout Monmouth County, which would
be eliminated by the proposed merger. Thus,
Midlantic's subsidiaries derived from Monmouth
County approximately $4.7 million in real estate loans,
$7.3 million in commercial loans and $4.7 million in installment loans.
Banking is concentrated in Monmouth County; the
four largest banking organizations in the county control
approximately 70 percent of total county commercial
bank deposits. Bank is the third largest of the 16 commercial banks in the county in terms of total deposits,
controlling approximately 16 percent of county bank
deposits. Midlantic could be permitted to enter Monmouth County de novo, and it could acquire one of the
smaller banks operating there. Midlantic, one of the
largest bank holding companies in New Jersey, has
expanded into new areas in recent years both by

branching through its subsidiaries and by acquisition,
and it appears capable of entering Monmouth County
by branching or by "toehold" acquisition. In addition,
Bank could be permitted to enter, either de novo or
through consolidation with smaller institutions, areas in
which Midlantic subsidiaries presently operate, and
appears capable of doing so.
This merger continues a growing tend toward statewide concentration. In recent months three other consolidations of significant size have been proposed.
First National State Bancorporation, the largest commercial banking organization in New Jersey, has proposed to acquire First National State Bank of South
Jersey, the fifteenth largest banking organization in the
state with total deposits of $520 million. Fidelity Union
Bancorp, the fourth largest banking organization, recently acquired Burlington County Trust Company,
Moorestown, with total deposits of $167 million. Finally,
the proposed merger of the $683 million National State
Bank and the $650 million Garden State National Bank
would create the fifth largest commercial banking organization in the state. In sum, these consolidations together with the instant acquisition, if approved, will increase the share of statewide total deposits held by
the five largest commercial banking organizations from
31.9 percent to 37.2 percent. Given the fact that as recently as 1970 the five-bank concentration ratio stood
at only 22 percent, it is apparent that an accelerating
trend toward concentration is developing in New Jersey.
It appears that the proposed transaction will eliminate some existing competition between the parties as
well as the potential for increased competition between them in the future and will contribute to the trend
toward increasing concentration among the largest
New Jersey banking organizations. Overall, we conclude that the proposed transaction would have an adverse effect on competition.

ATLANTIC FIRST NATIONAL BANK OF GAINESVILLE,
Gainesville, Fla., and Atlantic Bank of Gainesville, Gainesville, Fla.
Banking offices
Names of banks and type of transaction

Total
assets

Atlantic Bank of Gainesville, Gainesville, Fla., with
and Atlantic First National Bank of Gainesville, Gainesville, Fla. (3894), which had
merged January 31, 1979, under charter and title of the latter bank (3894). The merged bank at
date of merger had

COMPTROLLER'S DECISION
Application has been made to the Office of the Comptroller of the Currency requesting prior permission to
merge Atlantic Bank of Gainesville, Gainesville, Fla.
("Merging Bank"), into Atlantic First National Bank of
Gainesville, Gainesville, Fla. ("Charter Bank"), under
the charter and title of "Atlantic First National Bank of
Gainesville." The subject application rests on an
agreement executed between the proponent banks

60


In
To be
operation operated

$ 16,137,000
103,221,000
119,358,000

and is incorporated herein by reference, the same as if
fully set forth.
Charter Bank was granted National Banking Association charter number 3894 by this Office on June 1,
1888, and as of March 31, 1978, had total deposits of
$89.9 million.
Merging Bank commenced commercial banking operations in 1972 and as of March 31, 1978, had total
deposits of $16.3 million.

Both Charter Bank and Merging Bank are banking
subsidiaries of Atlantic Bancorporation, Jacksonville,
Fla., a registered miltibank holding company that controls 24 banks with deposits aggregating $1.3 billion.
Inasmuch as the two proponent banks are commonly
owned and controlled, approval of this merger would
not produce an adverse impact upon any relevant
area of consideration.
The subject application essentially represents a corporate reorganization whereby Atlantic Bancorporation
is realigning and consolidating a portion of its banking

interests. The application is therefore deemed to be
not adverse to the public interest and should be, and
hereby is, approved.
October 27, 1978
SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are all wholly owned subsidiaries
of the same bank holding company. As such, their proposed mergers are essentially corporate reorganizations and would have no effect on competition.

DOMINION NATIONAL BANK OF TIDEWATER,
Norfolk, Va., and Dominion National Bank of the Peninsula, York County, Va.
Banking offices
Names of banks and type of transaction

Total
assets*

Dominion National Bank of the Peninsula, York County, Va. (16159), with
and Dominion National Bank of Tidewater, Norfolk, Va. (15461), which had
merged February 20, 1979, under charter and title of the latter bank (15461). The merged bank at
date of merger had

COMPTROLLER'S DECISION
Application has been made to the Office of the Comptroller of the Currency requesting prior permission to
merge Dominion National Bank of the Peninsula, York
County, Va. ("Merging Bank"), into Dominion National
Bank of Tidewater, Norfolk, Va. ("Charter Bank"), under the charter and title of Dominion National Bank of
Tidewater. The subject application rests on an agreement executed between the proponent banks and is
incorporated herein by reference, the same as if fully
set forth.
Charter Bank has operated as a National Banking
Association since December 30, 1964, when it was
granted charter number 15461 by this Office. As of
June 30, 1978, Charter Bank had total commercial
bank deposits of $115 million.
Merging Bank was granted National Banking Association charter number 16159 by this Office on July 18,
1973, and had total commercial bank deposits of $6.6
million as of June 30, 1978.
Both Charter Bank and Merging Bank are banking
subsidiaries of Dominion Bankshares Corporation, Roanoke, Va., a registered multibank holding company.

* Asset figures are as of call dates immediately before and
after transaction.




$

8,061,000
125,608,000
133,801,000

In
To be
operation operated
4
15
19

Inasmuch as the proponent banks are commonly
owned and controlled, approval of this merger would
not produce an adverse impact upon any relevant
area of consideration.
This application was filed prior to the November 6,
1978, effective date of the Comptroller's Community
Reinvestment Act regulations, 12 CFR 25. However,
pursuant to the Community Reinvestment Act, Public
Law No. 95-128, available information relevant to the
banks' record of meeting community credit needs was
reviewed, revealing no evidence to suggest that the
applicants are not meeting the credit needs of their
communities, including low and moderate income
neighborhoods.
The subject application must be regarded essentially as a corporate reorganization whereby Dominion
Bankshares Corporation is realigning and consolidating a portion of its banking interests. The application is
therefore deemed to be not adverse to the public interest and should be, and hereby is, approved.
January 9, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are both wholly owned subsidiaries of the same bank holding company. As such,
their proposed merger is essentially a corporate reorganization and would have no effect on competition.

61

SOUTHERN NATIONAL BANK OF NORTH CAROLINA,
Lumberton, N.C., and Goldsboro Branch of North Carolina National Bank, Charlotte, N.C.
Banking offices
Names of banks and type of transaction

Total
assets*

Goldsboro Branch of North Carolina National Bank, Charlotte, N.C. (13761), with
was purchased February 28, 1979, by Southern National Bank of North Carolina, Lumberton, N.C.
(10610), which had
After the purchase was effected, the receiving bank had

COMPTROLLER'S DECISION
The Office of the Comptroller of the Currency has accepted an application filed pursuant to 12 USC
1828(c)), the Bank Merger Act, by Southern National
Bank of North Carolina, Lumberton, N.C. ("SNB"), the
purchasing bank, to purchase the assets and assume
the liabilities of Goldsboro Branch of North Carolina
National Bank, Charlotte, N.C. ("NCNB"), the selling
bank. This application is based on an agreement executed between the proponent banks and is incorporated herein by reference, the same as if fully set forth.
This Office granted National Banking Association
charter number 10610 to SNB on September 8, 1914.
As of June 30, 1978, SNB had total deposits of approximately $363.8 million (2.5 percent of total deposits in North Carolina) and operated its head office
and 62 branches, the preponderance of which are
within the eastern one-half of the state. Additionally,
SNB is the commercial banking subsidiary of Southern
National Corporation, Lumberton, a registered bank
holding company.
NCNB has operated as a National Banking Association since August 26, 1933, when this Office granted
charter number 13761 to the bank. The second largest
commercial bank headquartered in North Carolina with
over 17 percent of total state deposits, NCNB is the
commercial banking subsidiary of NCNB Corporation,
Charlotte, a registered bank holding company. On
June 30, 1978, NCNB had total domestic deposits of
approximately $2.5 billion, $6.5 million of which were in
the Goldsboro Branch. NCNB maintains more than 160
banking offices throughout North Carolina.
Goldsboro is in Wayne County in the east-central
part of the state, approximately 50 miles southwest of
Raleigh and 90 miles north of Wilmington. The nearest
office of SNB to Goldsboro is in Wilson (Wilson
County), slightly more than 25 miles to the north. The
Goldsboro Branch of NCNB ranks as the fifth largest of
seven commercial banks operating in Wayne County,
representing 8.2 percent of total commercial bank deposits in the county. SNB is not currently represented
in Wayne County, and its initial introduction into the
Goldsboro area will present a new alternative to the
banking public and should stimulate the competitive
atmosphere of the area, thereby better serving the interests of the banking public.
* Asset figures are for entire bank as of call dates immediately before and after transaction.


62


$3,655,551,000
448,762,000
444,447,000

In
To be
operation operated
1
64
65

By action dated May 11, 1978, the Board of Governors of the Federal Reserve System denied an application filed pursuant to 12 USC 1843(c)(8), the Bank
Holding Company Act, for NCNB Corporation to retain
TranSouth Financial Corporation, Florence, S.C.
("TFC"). NCNB Corporation originally acquired its interest in TFC in July 1969. Pursuant to the provisions of
Section 4 of the Bank Holding Company Act, NCNB
Corporation had until December 31, 1980, to divest itself of interest in TFC or to apply and secure the
Board's approval to retain such interest. The Board denied this application, based primarily on its conclusion
that approval of the application would eliminate "a significant amount of existing competition in each of the
five markets when both Bank (NCNB) and TranSouth
(TFC) had offices." Subsequently, NCNB Corporation
filed an amended application with the Board for the retention of TFC, wherein the bank holding company
proposed to divest 25 of TFC's 26 offices, and the
Goldsboro Branch of NCNB. NCNB Corporation's
amended application for the retention of TFC was approved by the Board on October 27, 1978, and this
application has been filed in compliance with the bank
holding company's commitment to the Board to divest
the Goldsboro Branch.
With respect to the convenience and needs aspects
of this proposal, which this Office must consider pursuant to the provisions of 12 USC 1828(c)(5)(B), the
overall effect of this proposal will be procompetitive in
that it will allow SNB to compete more aggressively by
providing new and expanded banking services to the
banking public in the Goldsboro area. These services
include, but are not limited to, payment of the highest
legal interest rates on savings accounts, overdraft
checking, automated teller facilities and competitive
rates of interest for bank loans.
The financial and managerial resources of SNB are
satisfactory. The financial and managerial resources of
NCNB are regarded as generally satisfactory, and the
future prospects of both institutions appear favorable.
This application was filed prior to the November 6,
1978, effective date of the Comptroller's Community
Reinvestment Act regulations, 12 CFR 25. However,
pursuant to the Community Reinvestment Act, Public
Law No. 95-128, available information relevant to the
banks' records of meeting their communities' needs
was reviewed, revealing no evidence to suggest that
the proponent institutions are not meeting the credit
needs of their communities, including low and moderate income neighborhoods.

Accordingly, applying the statutory criteria, it is the
opinion of this Office that this application is not adverse to the public interest. It is approved.
January 24, 1979

SUMMARY OF REPORT BY ATTORNEY GENERAL
We have reviewed this proposed transaction and conclude that it would not have a substantial competitive
impact.

OLD NATIONAL BANK OF WASHINGTON,
Spokane, Wash., and Four Branches of Rainier National Bank, Seattle, Wash.
Banking offices f
Total •
assets*

Names of banks and type of transaction

Four Branches of Rainier National Bank, Seattle, Wash. (4375), with
were purchased March 5, 1979, by Old National Bank of Washington, Spokane, Wash. (4668), which
had
After the purchase was effected, the receiving bank had

In
To be
operation operated

$3,946,054

4

1,103,729
1,109,042

76
79

Transfer of the fifth branch (Factoria) has been suspended pending litigation.

COMPTROLLER'S DECISION
An application was filed with the Office of the Comptroller of the Currency according to the requirements
set forth in the Bank Merger Act, 12 USC 1828(c), by
Old National Bank of Washington, Spokane, Wash.
("ONB") for approval to purchase the assets and assume the liabilities of five branch offices of Rainier National Bank, Seattle, Wash. ("RNB"). The application is
based on a written agreement executed by the proponent banks on November 30, 1977.
This application and three other purchase and assumption applications filed in February 1978, involving
ONB, RNB, Pacific National Bank of Washington, Seattle, and First National Bank in Spokane, were challenged by several protestants including the Supervisor
of Banking for the state of Washington. In response to
several requests, a public hearing on all four applications was held in Seattle on April 19-20, 1978, before
the Regional Administrator of National Banks, Thirteenth National Bank Region (Portland).
At the public administrative hearing, both the proponent and opponents of the application were represented by counsel and were given the opportunity to
make opening statements, present the testimony of
witnesses and physical exhibits and make closing
statements. A reporter was present at the hearing and
prepared a transcript thereof for inclusion in the administrative record. On the basis of the administrative
record, this opinion is now issued.1
* Asset figures are for entire bank as of call dates immediately before and after transaction.
t Office figures are for beginning and end of day and reflect
all transactions occurring that day.
1
It is the policy of the Office of the Comptroller of the Currency to issue a formal opinion in connection with decisions
of general import or involving novel issues. This application
raises important questions concerning the authority of national banks in Washington to establish branch offices.



Background
ONB maintains a main office and 77 branches and
has deposits of $888.3 million, representing 6.6 percent of Washington's total commercial bank deposits.2
ONB is a subsidiary of Old National Bancorporation,
Spokane, Wash. ("ONBC"), which is the only registered multibank holding company that is headquartered in the state. ONBC controls two banks (ONB and
First National Bank in Spokane). With total deposits of
approximately $950.9 million, representing 7.1 percent
of the total state commercial bank deposits, ONBC is
the fifth largest of 95 commercial banking organizations operating in the state.
With the exception of directors' qualifying shares,
RNB is a wholly owned commercial banking subsidiary
of Rainier Bancorporation, Seattle, Wash. ("RB"). RB is
a registered bank holding company and is the second
largest commercial banking organization headquartered in the state. RB has total deposits of $2.6 billion,
representing 19.3 percent of the state's total commercial bank deposits.
All five of RNB's branches which will be acquired by
ONB are within the greater Seattle metropolitan area in
King County. However, one of them, RNB's Factoria
branch, is in an unincorporated area. Presently, ONB
operates 29 banking offices in the county with deposits of approximately $400.7 million, representing
8.5 percent of the county's total commercial bank deposits. RNB operates a main office and 57 branches in
King County having deposits of $1.1 billion, representing 22.3 percent of the county's total commercial bank
deposits. The transfer of RNB's five branch offices to
ONB will effect less than 1 percent of the total commercial bank deposits in King County, and will not produce any change in the relative rankings of RNB and
2

All deposit and branch figures are as of June 30, 1978, unless otherwise noted.
63

ONB as the second and fourth largest banking organizations, respectively, in the county.
Issues

The protestants have presented the general argument that the Comptroller of the Currency may not authorize the proponent banks to consummate their
agreement and operate the acquired branch offices as
their own. This challenge is more specifically based on
the protestants1 following arguments:
1. The proposed acquisitions are anticompetitive,
violate antitrust laws and, therefore, may not be approved.
2. The proposed transactions are not "merger transactions" contemplated by the Bank Merger Act, 12
USC 1828(c), which may be approved by the Comptroller pursuant to that Act.
3. The proposed acquisitions are inconsistent with
the spirit and intent of the Community Reinvestment
Act.
4. The proposed branch acquisitions would violate
federal branching laws (12 USC 36(b) and (c)) since
they are inconsistent with the state's branching laws
applicable to state-chartered commercial banks and
trust companies (Wash. Rev. Code Ann. (RCW)
30.04.280 and 30.40.020) which:
a) only allow commercial state banks and trust
companies to acquire one branch of another bank
and implicitly proscribe multibranch acquisitions;
b) do not affirmatively authorize commercial state
banks and trust companies to branch by an exchange or trade of branches;
c) contemplate a "taking over or acquiring" of an
entire bank and its branches and not just one or
some of the branches; and
d) do not authorize commercial state banks and
trust companies to branch by acquisition in an unincorporated city or town which is not its principal
place of business.
Bank Merger Act Considerations

The protestants have argued that this transaction is
anticompetitive, violates antitrust laws, and, therefore,
may not be approved. This challenge has been considered as a part of this Office's analysis of the competitive effects of the proposed transaction pursuant to
the Bank Merger Act.
The Bank Merger Act, 12 USC 1828(c)(5), requires
this Office to consider whether the proposed merger
transaction will substantially lessen competition or tend
to" create or result in a monopoly or restraint of trade;
whether any perceived anticompetitive effects of the
proposed transaction are clearly outweighed in the
public interest by the probable effects the transaction
will have in meeting the convenience and needs of the
communities served; the financial and managerial resources and future prospects of the institutions; and
the convenience and needs of the communities.
Commenting on the competitive aspect of this transaction as required under the Bank Merger Act (12 USC
1828(c)(4)), the U.S. Department of Justice, the Federal Deposit Insurance Corporation and the Federal
Reserve Board have each concluded that the pro
64


posed transaction presents no competitive impediments in the relevant market areas to the approval of
this application. We agree with this conclusion and, indeed, find that the transaction will enhance competition in the relevant market areas and is, therefore, in
the public interest. We further conclude that consummation of this transaction will enhance the convenience and needs of these areas.
We have considered the financial and managerial
resources of the proponent banks, as well as their future prospects, and find these factors also to be favorable.
Related to this analysis under the Bank Merger Act
is the protestants' claim that the proposed transaction
is not a "merger transaction" which is subject to the
Comptroller's approval under the Act. The protestants
have argued that the transaction is, in effect, a
"branch swap," "trade," "exchange" or "relocation"
which does not constitute a conventional consolidation
or merger pursuant to 12 USC 215, 215a or 1828(c). It
is the opinion of this Office that such contentions are
incorrect and that the acquisitions in question are
"merger transactions" subject to the Comptroller's approval under the Bank Merger Act.
The agreement executed between ONB and RNB
specifically provides for the transfer of certain assets
and the assumption of certain liabilities. Assets have
been defined to include real estate and the building in
which the branch is located (if owned by the selling
bank); any leasehold and leasehold improvements;
furniture; fixtures, equipment and supplies (owned by
or leased by the selling bank); and the loan portfolio
(with certain stipulated exceptions). The agreement
also provides that the purchasing bank will assume the
following liabilities: deposit accounts (with the consent
of depositors), collection services, safe deposit rental
agreements, obligations under maintenance and service contracts and leases falling due or becoming performable subsequent to the closing date of the agreement.
The Bank Merger Act 12 USC 1828(c)(2), provides
that "(n)o insured bank shall . . . acquire the assets of,
or assume liability to pay any deposits made in, any
other insured bank except with the prior written approval o f . . . (the Comptroller of the Currency)." It also
specifically states that such a transaction is "referred
to hereafter in this subsection as a 'merger transaction'." (see 12 USC 1828(c)(3)). The Act does not purport to prescribe the consideration, the method of acquisition or the specific formula for asset or liability
transfer. The fact that the targeted assets and liabilities
are within a particular branch office does not, in our
opinion, vitiate an otherwise valid "merger transaction."
Accordingly, based on the provisions of both the
Bank Merger Act and the agreement executed between the proponent banks, we conclude that this
transaction meets the legal requirements of a "merger
transaction." As such, it may, therefore, be approved
by the Comptroller according to the standards set forth
in the Bank Merger Act.

Community Reinvestment Act
This application was filed for consideration prior to
the November 6, 1978, effective date of the
Comptroller's Community Reinvestment Act regulations now codified in 12 CFR 25. However, consistent
with the spirit of the Community Reinvestment Act
(Public Law 95-128), available information relevant to
the banks' records of meeting their communities'
needs has been reviewed. Those records do not reveal such evidence to suggest that the proponent
banks are not generally meeting the credit needs of
their communities, including low and moderate income
sectors.

Construction of State Branching Laws
The protestants have argued that the proposed
branch transfers are inconsistent with the provisions of
applicable state commercial bank branching statutes
and should, therefore, be denied under federal law.
This Office does not concur in that opinion.
The federal statute governing the branching powers
of national banks, 12 USC 36(c),3 permits the Comptroller to authorize a national bank to establish new
branches in the manner that state law permits state
banks to do so.4 Thus, in evaluating this application,
the Comptroller must be satisfied that it conforms with
the applicable restrictions imposed by Washington law
on the establishment of branches by any state banks.
However, federal law does not restrict the words "state
banks" to state-chartered commercial banks. Section
36(h) provides that:
The words . . . "State banks" . . . as used in this
section, shall be held to include trust companies,
savings banks, or such other corporations or institutions carrying on the banking business under
the authority of State laws. (Emphasis added)
The inclusion of savings banks and trust companies
within the definition of "state banks" in Section 36 indicates that Congress foresaw the problem of a state according unequal branching powers to various financial
institutions, thereby putting certain types of institutions
at a competitive disadvantage. The congressional solution to this problem was to ensure that national banks
be given the ability to establish branches in the man-

3

That section provides, in part, that:

(a) national banking association may, with the approval
of the Comptroller of the Currency, establish . . . new
branches . . . at any point within the State in which said
association is situated, if such establishment . . . (is) at
the time authorized to state banks by the statute law of
the State in question by language specifically granting
such authority affirmatively and not merely by implication or recognition . . .
4
See First National Bank in Plant City v. Dickinson, 396 U.S.
122 (1969); First National Bank of Logan v. Walker Bank &
Trust Co., 385 U.S. 252 (1966); Camden Trust Co. v. Gidney,
301 F.2d 521 (D.C. Cir.), cert, denied, 369 U.S. 886 (1962).



ner and locations that the most favored "state banks"
could.5
Accordingly, mutual savings banks, as "savings
banks" and competitors of national banks operating in
Washington, are "state banks . . . carrying on the
banking business . . . " 6 within the meaning of 12 USC
36(h), and, therefore, national banks may establish
and operate branches wherever mutual savings banks
are permitted to do so.7
5

The importance of this fundamental concept is now underscored by the increasingly blurred lines of differentiation between commercial banks and other financial institutions in
terms of the level of competition in the banking business. For
instance, recent progressive changes have endowed savings banks with the ability to market many banking services
similar to those offered by commercial banks. Such a development compels a broad approach to the state branching
statutes which should be references in deciding various national bank branching questions in view of the policy of competitive equality underlying 12 USC 36, as well as the sweep
of the triggering definition of "state banks" chosen by Congress. In our view, the language of Section 36 clearly authorizes reliance on the broad branching authority of state savings banks in Washington. Moreover, the financial services
environment in that state, in particular, lend even greater
support to this position. This Office has heretofore relied
upon savings bank branching statutes in Massachusetts in
approving certain branches for national banks in that state.
6
"Banking" according to RCW 30.04.010 means "the soliciting, receiving or accepting of money or its equivalent on deposit as a regular business." That mutual savings banks are
engaged in banking is made evident by RCW 32.08.140
which provides that every mutual savings bank shall have
the power "(t)o receive deposits of money
That mutual savings banks are "institutions carrying on the
banking business" (12 USC 36(h)) is further evidenced by
various provisions of Washington law which permit them, in
common with other banks, to become members of the Federal Reserve System and to be insured by the Federal Deposit Insurance Corporation (RCW 30.32.010); which permit
them to exercise trust powers (RCW 32.08.210); which authorize them, upon a depositor's instructions, to effect withdrawals from his account by drafts payable according to the
depositor's instructions (RCW 32.12.025); and which authorize the FDIC to act as receiver or liquidator for FDIC-insured
mutual savings banks (RCW 32.24.090). Accordingly, it is
evident that mutual savings banks are "state banks" within
the meaning of 12 USC 36(c) and (h).
7
The District Court in Hart v. Peoples National Bank, No.
C75-416S (W.D. Wash. Feb. 18, 1976), did not dispute the
contention that mutual savings banks are "state banks"
within the meaning of 12 USC 36(h). However, it did rely on
State Chartered Banks in Washington v. Peoples National
Bank, 291 F.Supp. 180 (W.D. Wash. 1966) in holding that a
bank wishing to branch under the authority given to mutual
savings banks "must satisfy all the provisons of that statute
and show that it (the national bank) engages itself exclusively as a mutual savings bank." This Office believes that
both of those decisions are in error in two respects:
First, both courts failed to consider that 12 USC 36, permitting the establishment of branches by national banks, is enabling legislation, not restricting legislation; that is; it was not
intended to restrict national banks, but, rather, it was intended to benefit national banks by granting them new
powers to enable them to compete with state-chartered institutions.
65

The state branching statute applicable to
Washington's mutual savings banks, RCW 32.04.030,8
authorizes branching in any county of the state and
contains none of the allegedly restrictive language of
RCW 30.40.020 which the protestants have relied on in
challenging this application. Accordingly, the resulting
establishment of branches in this transaction is authorized by 12 USC 36(c), based upon the authority of the
class of "state banks" found in RCW 32.04.030, and
approval of these branches is consistent with the substantive requirements of this statute applicable to national banks.
Reliance on the state's branching laws applicable to
mutual savings banks pursuant to 12 USC 36(c) and
(h) would appear to obviate the need, in this case, to
consider the state's commercial bank branching statute,9 or the protestants' arguments which focus on that

statute. Nevertheless, we find that the proposed transfer of branches, except for the transfer of RNB's Factoria branch, is also clearly authorized by RCW
30.40.020 and may be approved by the Comptroller
thereunder.
RCW 30.40.020, which deals with the branching
powers of commercial state banks and trust companies, provides in part:
Branches authorized—Restrictions.
A bank or trust company having a paid-in capital of not less than five hundred thousand dollars
may, with the approval of the supervisor, establish
and operate branches in any city or town within
the state. A bank or trust company having a paidin capital of not less than two hundred thousand
dollars may, with the approval of the supervisor,
establish and operate branches within the limits of
the county in which its principal place of business
is located.

Footnote 7 continued
Secondly, both decisions failed to distinguish between
those portions of a branching statute which can be complied
with by some national banks, just as they can be complied
with by some state-chartered institutions, and those portions
of a statute which no national bank can comply with. National
banks, as a class, cannot comply with all of the conditions of
any state branching statute; for example, all state branching
statutes require the approval of state banking supervisors
while national banks are not subject to supervision by the
states. (See First National Bank of Fairbanks v. Camp, 465
F.2d 586 (D.C. Cir. 1972), cert, denied, 409 U.S. 1124
(1973)). Nor can national banks, as a class, ever comply with
all of the provisions of state law applicable to any given class
of state-chartered institutions.
The question of whether a national bank may establish a
branch pursuant to the power to do so granted to state mutual savings banks is now pending in the United States Court
of Appeals for the Ninth Circuit in Hart v. Peoples National
Bank, No. 76-2182.
8
RCW 32.04.030 reads as follows:
Offices—Branches.
(1) A savings bank shall not do business or be located in
the same room with, or in a room connecting with, any other
bank, or a trust company that receives deposits of money or
commercial paper, or a national banking association.
(2) No savings bank, or any officer or director thereof,
shall receive deposits or transact any of its usual business at
any place other than its principal place of business or an authorized branch.
(3) A savings bank, with the approval of the supervisor,
may establish and operate branches but only upon the conditions and subject to the limitations following:

9

(a) If its guaranty fund is not less than the aggregate
paid-in capital which would be required by law as a prerequisite to the establishment and operation of an equal
number of branches in like locations by a bank.
(b) Branches may be established in any county of
the state; and
(c) A branch shall not be established at a place at
which the supervisor would not permit a proposed new
savings bank to engage in business, by reason of any
consideration contemplated by RCW 32.08.040,
32.08.050 and 32.08.060, the provisions of which, insofar as applicable, including those relating to appeals,
shall extend to applications to establish branches.
RCW 30.40.020.


66


No bank or trust company shall establish or operate any branch, except a branch in a foreign
country, in any city or town outside the city or
town in which its principal place of business is located in which any bank, trust company or national banking association regularly transacts a
banking or trust business, except by taking over
or acquiring an existing bank, trust company or
national banking association or the branch of any
bank, trust company or national banking association operating in such city or town.
The protestants (most notably, the supervisor of
banking) claim that authorization to take or acquire
"the branch of any bank" in a city or town outside the
city or town in which its principal place of business is
located only allows a commercial state bank or trust
company to acquire one branch of another bank and
implicitly proscribes multibranch acquisitions. Similarly, these protestants also argue from a purely interpretive point of view that RCW 30.40.020 does not affirmatively authorize state commercial banks and trust
companies to branch by exchanging branches and requires the acquisition of an entire bank and not just
one or some of its branches. This Office finds these interpretations of the statute to be in error.
Because of the absence of relevant case law in the
state on these questions, the Comptroller is authorized
to independently interpret and apply this statute in
evaluating ONB's branch/merger application, free from
the control of the opinions of the state supervisor:10
(Where state) . . . courts have not construed the
section, the Comptroller is free to do so and is,
10

First National Bank of Fairbanks v. Camp, 465 F.2d at 597.
See also, Leuthold v. Camp, 273 F.Supp. 695 (D. Mont.
1967), aff'd per curiam, 405 F.2d 499 (9th Cir. 1969); Union
Savings Bank of Patchogue v. Saxon, 335 F.2d 718 (D.C.
Cir. 1964); South Dakota v. The Nat'l. Bank of South Dakota,
219 F.Supp. 842 (S.D. S.D. 1963), aff'd, 335 F.2d 444 (8th
Cir.), cert, denied, 379 U.S. 970 (1965).

furthermore, free to adopt any reasonable construction that the statute setting forth the standard
may bear. Since that statute in effect is adopted
by Section 36 of the federal law, it is tantamount to
a federal administrative official construing a federal statute which he is charged to administer and
enforce.11
In construing RCW 30.40.020, this Office is guided
by the state's rules of statutory construction. Those
rules direct that the provisions of the code should be
liberally construed12 and that words importing number
(i.e., singular and plural) and gender (i.e., masculine
or feminine) do not necessarily restrict a statute's
meaning to the specific number or gender used. 13
Consequently, we find that the term "the branch" may
be construed to mean "branches," thereby allowing a
bank's acquisition of one or more branches of another
bank. Indeed, the facts of Seattle-First National Bank v.
Spokane County, 196 Wash. 419, 83 P.2d 359 (1938)
(merger of banks resulting in the acquisition and operation of the target bank's branches by the surviving
bank), and United States v. Marine Bancorporation,
418 U.S. 602 (1974) (merger of banks resulting in the
acquisition and operation of the target bank's
branches by the surviving bank permitting it to expand
into cities and towns with pre-existing banking organizations) lend support to this Office's interpretation of
state law on this question.
Furthermore, bearing in mind the state's rules of
statutory construction and absent any statutory language or case law limiting the manner of "taking over
or acquiring" a reasonable reading of the text of this
statute leads us to conclude that, contrary to the protestants' contentions, the plain meaning of its words authorizes a transfer of branches by merger, in that the
method of "taking over or acquiring" may be determined by the parties to the agreement since the legislature has chosen not to dictate the method or mode of
payment, whether by cash, stock or other consideration. The fact that a branch may be acquired in consideration for the sale of a branch to another bank in a
manner which, on its face, resembles an exchange or
trade, does not vitiate the general authority of a bank
to branch by acquisition in a city or town which is not
its principal place of business. Moreover, we find that
RCW 30.40.020, by not limiting the type of acquisition
permitted or excepting or excluding the functional exchange of branches, does affirmatively authorize the
method of branching under consideration since, unless so restricted by the statute, it permits " . . . (a)
u

Clermont Nat'l Bank v. Citizensbank, N.A., 329 F.Supp

1331, 1341-42 (S.D. Ohio 1971).
12
Wash. Rev. Code Ann. 1.12.010 reads as follows:
The provisions of this code shall be liberally construed,
and shall not be limited by any rule of strict construction.
13
Wash. Rev. Code Ann. 1.12.050 states:
Words importing the singular number may also be applied to the plural of persons and things; words importing the plural may be applied to the singular; and words
importing the masculine gender may be extended to females also.



bank or trust company having a paid-in capital of not
less than five hundred thousand dollars . . . (to) establish and operate branches in any city or town within the
state."14 Therefore, the sale and transfer of branches15
which the protestants have chosen to label as a
"swap" or "exchange" is, in our opinion, affirmatively
authorized by RCW 30.40.020.
Likewise, nothing in the statute authorizing the "taking over or acquiring (of) an existing bank . . . or the
branch of . . . (a) bank" indicates that the acquisition
must be of the entire bank and not just one of its
branches. Indeed, the plain meaning of the statute's
language suggests that one bank may branch by acquiring "the branch" of another bank. Any interpretation of the statute which precludes all types of acquisitions except total mergers or consolidations would
severely limit the significance and intent of the statute
and, in view of the statute's language, conflict with the
rule t h a t " . . . a statute ought, upon the whole, to be so
construed that, if it can be prevented, no clause, sentence, or word shall be superfluous, void or insignificant."16
Finally, even though the words "city" or "town," as
used in RCW 30.40.020, have been judicially interpreted to refer to incorporated areas, it is this Office's
opinion that national banks in Washington may still
branch in unincorporated cities or towns pursuant to
12 USC 36(c) since state savings banks, which are in
direct competition with national banks in the state, are
authorized to do so.17
In accordance with the above opinion, we find that
the proposed acquisition of branches is affirmatively
authorized by RCW 32.04.030 and 30.40.020, and,
therefore, is permitted by 12 USC 36(b) and (c).

14

Cf. Seattle-First Nat'l Bank v. Spokane County, 83 P.2d at
363.
15
Although the agreement contemplates a simultaneous
transfer of all of the branches in question, the applicants
stated at the hearing that, depending on the renegotiation of
a sales price, the failure or inability to transfer certain
branches would not necessarily prevent the consummation
of the transaction.
16
Washington Market Company v. Hoffman, 101 U.S. 112,
115-16 (1879); United States v. Campos-Serrano, 404 U.S.
293, 301 (1971).
17
This issue arises since RNB's Factoria branch is in an unincorporated area. On December 21, 1978, the Supreme
Court of Washington, in Hart v. Peoples National Bank, et ai,
No. 45594, interpreted the terms "city" or "town," as used in
RCW 30.40.020, to be incorporated cities or towns, thus restricting branching by state-chartered commercial banks to
such areas. The Washington Supreme Court had no occasion to address the broader branching authority of state savings banks under RCW 32.04.030. Our approval, however, of
the transfer of this particular branch is, as previously discussed, based on the fact that 12 USC 36(c) references
state branching laws applicable to any state bank which is
defined in 12 USC 36(h) to include "savings banks." Nevertheless, this Office has decided to suspend the consummation of the transfer of this branch pending a decision by the
United States Court of Appeals for the Ninth Circuit in Hart v.
Peoples National Bank, et ai, No. 76-2182, where this issue
has been raised.
67

Conclusion

We have carefully considered the application pursuant to the Bank Merger Act, 12 USC 1828(c), and in
light of the questions raised by the protestants. We
conclude that the proposed transactions will have no
adverse effect on competition, will be in the public interest, and will otherwise satisfy the requirements of
the Bank Merger Act. We also conclude that the transactions will violate no other provisions of state or federal law. Accordingly, the application of ONB to purchase the assets and assume the liabilities of five
branch offices of RNB is approved. However, since
RNB's Factoria branch is in an unincorporated area,

consummation of its transfer to ONB is suspended
pending a determination by the U.S. Court of Appeals
for the Ninth Circuit of whether a national bank may establish a branch in an unincorporated area pursuant to
the power to do so granted to state mutual savings
banks.
February 1, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
We have reviewed these proposed transactions and
conclude that they would not have a substantial competitive impact.

OLD NATIONAL BANK OF WASHINGTON,
Spokane, Wash., and Two Branches of Pacific National Bank of Washington, Seattle, Wash.
Banking offices^

Names of banks and type of transaction

Total
assets*

Two Branches of Pacific National Bank of Washington, Seattle, Wash. (3417), with
were purchased March 5, 1979, by Old National Bank of Washington, Spokane, Wash. (4668),
which had. .
After the purchase was effected, the receiving bank had

In
To be
operation operated

$1,593,412

2

1,103,729
1,109,042

74
79

(Transfer of the third branch (Federal Way South) has been suspended pending litigation.)

COMPTROLLER'S DECISION
An application was filed on February 17, 1978, with the
Office of the Comptroller of the Currency according to
the requirements of the Bank Merger Act, 12 USC
1828(c), by Old National Bank of Washington, Spokane, Wash. ("ONB"), for approval to purchase the assets and assume the liabilities of three branch offices
of Pacific National Bank of Washington, Seattle, Wash.
("PNB"). The application is based on a written agreement executed by the proponent banks on November
30, 1977.
This application and three other purchase and assumption applications filed in February 1978 involving
ONB, PNB, Rainier National Bank, Seattle, and First
National Bank in Spokane were challenged by several
protestants including the supervisor of banking for the
state. In response to several requests, a public hearing on all four applications was held in Seattle on April
19-20, 1978, before the Regional Administrator of National Banks, Thirteenth National Bank Region (Portland).
At the public administrative hearing, both the proponent and opponents of the applications were represented by counsel and were given the opportunity to
make opening statements, present the testimony of
witnesses and physical exhibits and make closing
statements. A reporter was present at the hearing and
prepared a transcript for inclusion in the administrative
* Asset figures are for entire bank as of call dates immediately before and after transaction.
t Office figures are for beginning and end of day and reflect
all transactions occurring that day.

68


record. On the basis of the administrative record, this
opinion is now issued.1
Background

ONB is a national bank with deposits of $888.3 million, representing 6.6 percent of Washington's total
commercial bank deposits.2 It maintains a main office
and 77 branches. ONB is a subsidiary of Old National
Bancorporation, Spokane ("ONBC"), which is the only
registered multibank holding company headquartered
in the state. ONBC controls two banks: ONB and First
National Bank in Spokane. With total deposits of
$950.9 million, representing 7.1 percent of the total
state commercial bank deposits, ONBC is the fifth
largest of 95 commercial banking organizations.
PNB is a national bank with deposits of $1.1 billion,
maintaining a main office and 70 branches. It is the
third largest commercial bank in Washington, controlling 8.5 percent of the total commercial bank deposits.
PNB is a subsidiary of Western Bancorporation, Los
Angeles, Calif. ("WB"), a registered multibank holding
company. As of December 31, 1977, WB controlled 22
banks with consolidated deposits of approximately
$18.7 billion.
Two of the three branches which would be transfer1

It is the policy of the Office of the Comptroller of the Currency to issue a formal opinion in connection with decisions
of general import or involving novel issues. This application
raises important questions concerning the authority of national banks in the state to establish branch offices.
2
All deposit and branch figures are as of June 30, 1978, unless otherwise noted.

red to ONB from PNB are in the Tacoma banking market which includes virtually all of Pierce County. One is
in Tacoma's central business district, and the other is
in South Tacoma. The third office to be transferred is in
an unincorporated retail and industrial area known as
Federal Way, King County.
PNB operates 23 banking offices within Pierce
County with $296 million in deposits, representing 31.9
percent of the total commercial bank deposits in the
county. ONB, however, operates no offices within
Pierce County. Its entry into the Tacoma area through
this transaction would result in its acquisition of 2 percent of the total commercial bank deposits in the
county.
In King County, ONB has 14 banking offices which
hold deposits of $116.2 million, representing 2.5 percent of the total commercial bank deposits in the
county. It is the sixth largest of 23 commercial banking
organizations operating in the county. PNB operates
29 of its banking offices there. These offices have total
deposits of $400.7 million, representing 8.5 percent of
the total commercial bank deposits in the county. PNB
is the fourth largest banking organization operating in
King County. The transfer of PNB's Federal Way South
office to ONB would not alter either of the proponent
banks' relative positions in the county in terms of deposits held.
Issues

The protestants have presented the general argument that the Comptroller of the Currency may not authorize the proponent banks to consummate their
agreement and operate the acquired branch offices as
their own. This challenge is more specifically based on
the protestants' following arguments:
1. The proposed acquisitions are anticompetitive,
violate antitrust laws and, therefore, may not be approved.
2. The proposed transactions are not "merger transactions" contemplated by the Bank Merger Act (12
USC 1828(c)) which may be approved by the Comptroller pursuant to that Act.
3. The proposed acquisitions are inconsistent with
the spirit and intent of the Community Reinvestment
Act.
4. The proposed branch acquisitions would violate
federal branching laws (12 USC 36(b) and (c)) since
they are inconsistent with the state's branching laws
applicable to state-chartered commercial banks and
trust companies (Wash. Rev. Code Ann. (RCW)
30.04.280 and 30.40.020) which:
(a) only allow commercial state banks and trust
companies to acquire one branch of another bank and
implicitly proscribe multibranch acquisitions;
(b) do not affirmatively authorize commercial
state banks and trust companies to branch by an exchange or trade of branches;
(c) contemplate a "taking over or acquiring" of
an entire bank and its branches and not just one or
some of the branches; and
(d) do not authorize commercial state banks and
trust companies to branch by acquisition in an unin


corporated city or town which is not its principal place
of business.
Bank Merger Act Considerations

The protestants have argued that this transaction is
anticompetitive, violates antitrust laws, and, therefore,
may not be approved. This challenge has been considered as a part of this Office's analysis of the competitive effects of the proposed transaction pursuant to
the Bank Merger Act.
The Bank Merger Act requires this Office to consider
whether the proposed merger transaction will substantially lessen competition or tend to create or result in a
monopoly or restraint of trade; whether any perceived
anticompetitive effects of the proposed transaction are
clearly outweighed in the public interest by the probable effects the transaction will have in meeting the convenience and needs of the communities served; financial and managerial resources and future prospects of
the institutions; and the convenience and needs of the
communities. (See 12 USC 1828(c)(5).
Commenting on the competitive aspect of this transaction as required under the Bank Merger Act (12 USC
1828(c)(4)), the U.S. Department of Justice, the Federal Deposit Insurance Corporation, and the Federal
Reserve Board have each concluded that the proposed transaction presents no competitive impediments in the relevant market areas to the approval of
this application. We agree with this conclusion and, indeed, find that the transaction will enhance competition in the relevant market areas and is, therefore, in
the public interest. We further conclude that consummation of this transaction will enhance the convenience and needs of these areas.
We have considered the financial and managerial
resources of the proponent banks, as well as their future prospects, and find these factors also to be favorable.
Related to this analysis under the Bank Merger Act
is the protestants' claim that the proposed transaction
is not a "merger transaction" which is subject to the
Comptroller's approval under the Act. The protestants
have argued that the transaction is, in effect, a
"branch swap," "trade," "exchange," or "relocation"
which does not constitute a conventional consolidation
or merger pursuant to 12 USC 215, 215a or 1828(c). It
is the opinion of this Office that such contentions are
incorrect and that the acquisitions in question are
"merger transactions" subject to the Comptroller's approval under the Bank Merger Act.
The agreement executed between ONB and PNB
specifically provides for the transfer of certain assets
and the assumption of certain liabilities. Assets have
been defined to include real estate and the building in
which the branch is located (if owned by the selling
bank); any leasehold and leasehold improvements;
furniture; fixtures, equipment and supplies (owned by,
or leased by the selling bank); and the loan portfolio,
with certain stipulated exceptions. The agreement also
provides that the purchasing bank will assume the following liabilities: deposit accounts, with the consent of
depositors, collection services; safe deposit rental
agreements; obligations under maintenance and serv69

ice contracts; and leases falling due or becoming performable subsequent to the closing date of the agreement.
The Bank Merger Act provides that "(n)o insured
bank shall . . . acquire the assets of, or assume liability
to pay any deposits made in, any other insured bank
except with the prior written approval of . . . (the
Comptroller of the Currency)." (See 12 USC
1828(c)(2)). It also specifically states that such a transaction is "referred to hereafter in this subsection as a
'merger transaction' " (See 12 USC 1828(c)(3)). The
Act does not purport to prescribe the consideration,
the method of acquisition, or the specific formula for
asset or liability transfer. The fact that the targeted assets and liabilities are situated within a particular
branch office does not, in out opinion, vitiate an otherwise valid "merger transaction."
Accordingly, based upon the provisions of both the
Bank Merger Act and the agreement executed between the proponent banks, we conclude that this
transaction meets the legal requirements of a "merger
transaction." As such, it may, therefore, be.approved
by the Comptroller according to the standards set forth
in the Bank Merger Act.
Community Reinvestment Act

This application was filed for consideration prior to
the November 6, 1978 effective date of the
Comptroller's Community Reinvestment Act regulations, 12 CFR 25. However, consistent with the spirit of
the Community Reinvestment Act, Public Law 95-128,
available information relevant to the banks' records of
meeting their communities' needs has been reviewed.
Those records do not reveal such evidence to suggest
that the proponent banks are not generally meeting the
credit needs of their communities, including low and
moderate income sectors.
Construction of State Branching Laws

The protestants have argued that the proposed
branch transfers are inconsistent with the provisions of
applicable state commercial bank branching statutes
and should, therefore, be denied under federal law.
This Office does not concur in that opinion.
The federal statute governing the branching powers
of national banks, 12 USC 36(c),3 permits the Comptroller to authorize a national bank to establish new
branches in the manner that state law permits state
banks to do so.4 Thus, in evaluating this application,
the Comptroller must be satisfied that it conforms with
3

That section provides, in part, that

[a] national banking association may, with the approval
of the Comptroller of the Currency, establish . . . new
branches . . . at any point within the State in which said
association is situated, if such establishment . . . [is] at
the time authorized to state banks by the statute law of
the State in question by language specifically granting
such authority affirmatively and not merely by implication or recognition . . .
4
See First National Bank in Plant City v. Dickinson, 396 U.S.
122 (1969); First National Bank of Logan v. Walker Bank &
Trust Co., 385 U.S. 252 (1966); Camden Trust Co. v. Gidney,
301 F.2d 521 (D.C. Cir.), cert, denied, 369 U.S. 886 (1962).

70


the applicable restrictions imposed by Washington law
on establishment of branches by any state banks.
However, federal law does not restrict the words "state
banks" to state-chartered commercial banks. Section
36(h) provides that:
The words . . . "State banks" . . . as used in this
section, shall be held to include trust companies,
savings banks, or such other corporations or institutions carrying on the banking business under
the authority of State laws. [Emphasis added]
The inclusion of savings banks and trust companies
within the definition of "state banks" in Section 36 indicates that Congress foresaw the problem of a state according unequal branching powers to various financial
institutions, thereby putting certain types of institutions
at a competitive disadvantage. The congressional solution to this problem was to ensure that national banks
be given the ability to establish branches in the manner and locations that the most favored "state banks"
could.5
Accordingly, mutual savings banks, as "savings
banks" and competitors of national banks operating in
Washington, are "state banks . . . carrying on the
banking business . . . " 6 within the meaning of 12 USC
36(h), and, therefore, national banks may establish
5

The importance of this fundamental concept is now underscored by the increasingly blurred lines of differentiation between commercial banks and other financial institutions in
terms of the level of competition in the banking business. For
instance, recent progressive changes have endowed savings banks with the ability to market many banking services
similar to those offered by commercial banks. Such a development compels a broad approach to the state branching
statutes which should be referenced in deciding various national bank branching questions in view of the policy of competitive equality underlying 12 USC 36, as well as the sweep
of the triggering definition of "state banks" chosen by Congress. In our view, the language of Section 36 clearly authorizes reliance on the broad branching authority of state savings banks in Washington. Moreover, the financial services
environment in that state, in particular, lend even greater
support to this position. This Office has heretofore relied on
savings bank branching statutes in Massachusetts in approving certain branches for national banks in that state.
6

"Banking" according to RCW 30.04.010 means "the soliciting, receiving or accepting of money or its equivalent on deposit as a regular business." That mutual savings banks are
engaged in banking is made evident by RCW 32.08.140
which provides that every mutual savings bank shall have
the power "(t)o receive deposits of money
That mutual savings banks are "institutions carrying on the
banking business" (12 USC 36(h)) is further evidenced by
various provisions of Washington law which permit them, in
common with other banks, to become members of the Federal Reserve System and to be insured by the Federal Deposit Insurance Corporation (RCW 30.32.010); which permit
them to exercise trust powers (RCW 32.08.210); which authorize them, upon a depositor's instructions, to effect withdrawals from his account by drafts payable according to the
depositor's instructions (RCW 32.12.025); and which authorize the FDIC to act as receiver or liquidator for FDIC-insured
mutual savings banks (RCW 32.24.090). Accordingly, it is
evident that mutual savings banks are "state banks" within
the meaning of 12 USC 36(c) and (h).

and operate branches wherever mutual savings banks
are permitted to do so.7
The state branching statute applicable to
Washington's mutual savings banks, RCW 32.04.030,8
7

The District Court in Hart v. Peoples National Bank, No.
C75-416S (W.D. Wash. Feb. 18, 1976) did not dispute the
contention that mutual savings banks are "state banks"
within the meaning of 12 USC 36(h). However, it did rely on
State Chartered Banks in Washington v. Peoples National
Bank, 291 F.Supp. 180 (W.D. Wash. 1966) in holding that a
bank wishing to branch under the authority given to mutual
savings banks "must satisfy all the provisions of that statute
and show that it (the national bank) engages itself exclusively as a mutual savings bank." This Office believes that
both of those decisions are in error in two respects:
First, both courts failed to consider that 12 USC 36, permitting the establishment of branches by national banks, is enabling legislation, not restricting legislation; that is, it was not
intended to restrict national banks but rather, it was intended
to benefit national banks by granting them new powers to
enable them to compete with state-chartered institutions.
Second, both decisions failed to distinguish between
those portions of a branching statute which can be complied
with by some national banks, just as they can be complied
with by some state-chartered institutions, and those portions
of a statute which no national bank can comply with. National
banks, as a class, cannot comply with all of the conditions of
any state branching statute; for example, all state branching
statutes require the approval of state banking supervisors
while national banks are not subject to supervision by the
states. (See First National Bank of Fairbanks v. Camp, 465
F.2d 586 (D.C. Cir. 1972), cert, denied, 409 U.S. 1124
(1973)). Nor can national banks, as a class, ever comply with
all of the provisions of state law applicable to any given class
or state-chartered institutions.
The question of whether a national bank may establish a
branch pursuant to the power to do so granted to state mutual savings banks is now pending in the U.S. Court of Appeals for the Ninth Circuit in Hart v. Peoples National Bank,
No. 76-2182.
8
RCW 32.04.030 reads as follows:

Offices—Branches.
(1) A savings bank shall not do business or be located in
the same room with, or in a room connecting with, any other
bank, or a trust company that receives deposits of money or
commercial paper, or a national banking association.
(2) No savings bank, or any officer or director thereof,
shall receive deposits or transact any of its usual business at
any place other than its principal place of business or an authorized branch.
(3) A savings bank, with the approval of the supervisor,
may establish and operate branches but only upon the conditions and subject to the limitations following:
If its guaranty fund is not less than the aggregate
paid-in capital which would be required by law as a prerequisite to the establishment and operation of an equal
number of branches in like locations by a bank.
(b) Branches may be established in any county of
the state; and
(c) A branch shall not be established at a place at
which the supervisor would not permit a proposed new
savings bank to engage in business, by reason of any
consideration contemplated by RCW 32.08.040,
32.08.050 and 32.08.060, the provisions of which, insofar as applicable, including those relating to appeals,
shall extend to applications to establish branches.



authorizes branching in any county of the state and
contains none of the allegedly restrictive language of
RCW 30.40.020 which the protestants have relied
upon in challenging this application. Accordingly, the
resulting establishment of branches in this transaction
is authorized by 12 USC 36(c), based upon the authority of the class of "state banks" found in RCW
32.04.030, and approval of these branches is consistent with the substantive requirements of this statute
applicable to national banks.
Reliance on the state's branching laws applicable to
mutual savings banks pursuant to 12 USC 36(c) and
(h) would appear to obviate the need in this case to
consider the state's commercial bank branching statute,9 or the protestants1 arguments which focus on that
statute. Nevertheless, we find that the proposed transfer of branches, except for the transfer of PNB's Federal Way branch, is also clearly authorized by RCW
30.40.020 and may be approved by the Comptroller
thereunder.
RCW 30.40.020, which deals with the branching
powers of commercial state banks and trust companies, provides, in part:
Branches authorized—Restrictions.
A bank or trust company having a paid-in capital of not less than five hundred thousand dollars
may, with the approval of the supervisor, establish
and operate branches in any city or town within
the state. A bank or trust company having a paidin capital of not less than two hundred thousand
dollars may, with the approval of the supervisor,
establish and operate branches within the limits of
the county in which its principal place of business
is located.

No bank or trust company shall establish or operate any branch, except a branch in a foreign
country, in any city or town outside the city or town
in which its principal place of business is located
in which any bank, trust company or national
banking association regularly transacts a banking
or trust business, except by taking over or acquiring an existing bank, trust company or national
banking association or the branch of any bank,
trust company or national banking association operating in such city or town.
The protestants (most notably, the supervisor of
banking) claim that authorization to take or acquire
"the branch of any bank" in a city or town outside the
city or town in which its principal place of business is
located only allows a commercial state bank or trust
company to acquire one branch of another bank and
implicitly proscribes multibranch acquisitions. Similarly, these protestants also argue, from a purely interpretive point of view, that RCW 30.40.020 does not affirmatively authorize state commercial banks and trust
companies to branch by exchanging branches and requires acquisition of an entire bank and not just one or
9

RCW 30.40.020.

71

some of its branches. This Office finds these interpretations of the statute to be in error.
Because of the absence of relevant case law in the
state on these questions, the Comptroller is authorized
to independently interpret and apply this statute in
evaluating ONB's branch/merger application, free from
the control of the opinions of the state supervisor:10
(Where state) . . . courts have not construed the
section, the Comptroller is free to do so and is,
furthermore, free to adopt any reasonable construction that the statute setting forth the standard
may bear. Since that statute in effect is adopted
by Section 36 of the federal law, it is tantamount to
a federal administrative official construing a federal statute which he is charged to administer and
enforce.11
In construing RCW 30.40.020, this Office is guided
by the state's rules of statutory construction. Those
rules direct that the provisions of the code should be
liberally construed,12 and that words importing number
(i.e., singular and plural) and gender (i.e., masculine
or feminine) do not necessarily restrict a statute's
meaning to the specific number or gender used. 13
Consequently, we find that the term " the branch" may
be construed to mean "branches," thereby allowing a
bank's acquisition of one or more branches of another
bank. Indeed, the facts of Seattle-First National Bank v.
Spokane County, 196 Wash. 419, 83 P.2d 359 (1938)
(merger of banks resulting in the acquisition and operation of the target bank's branches by the surviving
bank), and United States v. Marine Bancorporation,
418 U.S. 602 (1974) (merger of banks resulting in the
acquisition and operation of the target bank's
branches by the surviving bank permitting it to expand
into cities and towns with pre-existing banking organizations) lend support to this Office's interpretation of
state law on this question.
Furthermore, bearing in mind the state's rules of
statutory construction, and absent any statutory language or case law limiting the manner of "taking over
or acquiring," a reasonable reading of the text of this
statute leads us to conclude that, contrary to the prot10

estants' contentions, the plain meaning of its words authorize a transfer of branches by merger, in that the
method of "taking over or acquiring" may be determined by the parties to the agreement since the legislature has chosen not to dictate the method or mode of
payment, whether by cash, stock, or other consideration. The fact that a branch may be acquired in consideration for the sale of a branch to another bank in a
manner which, on its face, resembles an exchange or
trade, does not vitiate the general authority of a bank
to branch by acquisition in a city or town which is not
its principal place of business. Moreover, we find that
RCW 30.40.020, by not limiting the type of acquisition
permitted, or excepting or excluding the functional exchange of branches, does affirmatively authorize the
method of branching under consideration since, unless so restricted by the statute, it permits " . . . (a)
bank or trust company having a paid-in capital of not
less than five hundred thousand dollars . . . (to) establish and operate branches in any city or town within the
state."14 Therefore, the sale and transfer of branches15
which the protestants have chosen to label as a
"swap" or "exchange" is, in our opinion, affirmatively
authorized by RCW 30.40.020.
Likewise, nothing in the statute authorizing the "taking over or acquiring (of) an existing bank . . . or the
branch of . . . (a) bank" indicates that the acquisition
must be of the entire bank and not just one of its
branches. Indeed, the plain meaning of the statute's
language suggests that one bank may branch by acquiring "the branch" of another bank. Any interpretation of the statute which precludes all types of acquisitions except total mergers or consolidations would
severely limit the significance and intent of the statute
and, in view of the statute's language, conflict with the
rule t h a t " . . . a statute ought, upon the whole, to be so
construed that, if it can be prevented, no clause, sentence, or word shall be superfluous, void or insignificant."16
Finally, even though the words "city" or "town," as
used in RCW 30.40.020, have been judicially interpreted to refer to incorporated areas, it is this Office's
opinion that national banks in Washington may still
branch in unincorporated cities or towns pursuant to
12 USC 36(c) since state savings banks, which are in
direct competition with national banks in the state, are
authorized to do so.17

First National Bank of Fairbanks v. Camp, 465 F.2d at 597.
See also, Leuthold v. Camp, 273 F.Supp. 695 (D. Mont.
1967), aff'd per curiam, 405 F.2d 499 (9th Cir. 1969); Union
Savings Bank of Patchogue v. Saxon, 335 F.2d 718 (D.C.
Cir. 1964); South Dakota v. The Nat'l. Bank of South Dakota, 14
Cf. Seattle-First Nat'l Bank v. Spokane County, 83 P.2d at
219 F.Supp. 842 (S.D. S.D. 1963), aff'd, 335 F.2d 444 (8th
363.
Cir.), cert, denied, 379 U.S. 970 (1965).
15
11
Although the agreement contemplates a simultaneous
Clermont Nat'l Bank v. Citizenbank, N.A., 329 F.Supp.
transfer of all of the branches in qu3stion, the applicants
1331, 1341-42 (S.D. Ohio 1971).
stated at the hearing that, depending on the renegotiation of
12
Wash. Rev. Code Ann. 1.12.010 reads as follows:
a sales price, the failure or inability to transfer certain
The provisions of this code shall be liberally construed,
branches would not necessarily prevent the consummation
and shall not be limited by any rule of strict construction.
of the transaction.
13
16
Wash. Rev. Code Ann. 1.12.050 states:
Washington Market Company v. Hoffman, 101 U.S. 112,
115-16 (1879); United States v. Campos-Serrano, 404 U.S.
Words importing the singular number may also be ap293, 301 (1971).
plied to the plural of persons and things; words import17
This issue arises since PNB's Federal Way branch is in an
ing the plural may be applied to the singular; and words
unincorporated area. On December 21, 1978, the Supreme
importing the masculine gender may be extended to feCourt of Washington, in Hart v. Peoples National Bank, et ai,
males also.

72


In accordance with the above opinion, we find that
the proposed acquisition of branches is affirmatively
authorized by RCW 32.04.030 and 30.40.020, and,
therefore, is permitted by 12 USC 36(b) and (c).
Conclusion
We have carefully considered the application pursuant to the Bank Merger Act, 12 USC 1828(c), and in

No. 45594, interpreted the terms "city" or "town," as used in
RCW 30.40.020, to be incorporated cities or towns, thus restricting branching by state-chartered commercial banks to
such areas. The Washington Supreme Court had no occasion to address the broader branching authority of state savings banks under RCW 32.04.030. Our approval, however, of
the transfer of this particular branch is, as previously discussed, based on the fact that 12 USC 36(c) references
state branching laws applicable to any state bank which is
defined in 12 USC 36(h) to include "savings banks." Nevertheless, this Office has decided to suspend the consummation of the transfer of this branch pending a decision by the
United States Court of Appeals for the Ninth Circuit in Hart v.

light of the questions raised by the protestants. We
conclude that the proposed transactions will have no
adverse effect on competition, will be in the public interest, and will otherwise satisfy the requirements of
the Bank Merger Act. We also conclude that the transactions will violate no other provisions of state or federal law. Accordingly, the application of ONB to purchase the assets and assume the liabilities of three
branch offices of PNB is approved. However, since
PNB's Federal Way South branch is in an unincorporated area, consummation of its transfer to ONB is suspended pending a determination by the United States
Court of Appeals for the Ninth Circuit of whether a national bank may establish a branch in an unincorporated area pursuant to the power to do so granted to
state mutual savings banks.
February 1, 1979

SUMMARY OF REPORT BY ATTORNEY GENERAL

We have reviewed these proposed transactions and
Peoples National Bank, et al., No. 76-2182, where this issue conclude that they would not have a substantial competitive impact.
has been raised.

PACIFIC NATIONAL BANK OF WASHINGTON,
Seattle, Wash., and Three Branches of Old National Bank of Washington, Spokane, Wash.
Banking offices^
Names of banks and type of transaction

Total
assets*

Three Branches of Old National Bank of Washington, Spokane, Wash. (4668), with
were purchased March 5, 1979, by Pacific National Bank of Washington, Seattle, Wash. (3417),
which had
After the purchase was effected, the receiving bank had

COMPTROLLER'S DECISION
An application was filed on February 17, 1978, with the
Office of the Comptroller of the Currency according to
the requirements set forth in the Bank Merger Act, 12
USC 1828(c), by Pacific National Bank of Washington,
Seattle, Wash. ("PNB"), for approval to purchase the
assets and assume the liabilities of three branch offices of Old National Bank of Washington, Spokane,
Wash. ("ONB"). The application is based on a written
agreement executed by the proponent banks on November 30, 1977.
This application and three other purchase and assumption applications filed in February 1978 involving
ONB, PNB, Rainier National Bank, Seattle, and First
National Bank in Spokane were challenged by several
protestants including the supervisor of banking for the
state. In response to several requests, a public hearing on all four applications was held in Seattle on April
19-20, 1978, before the Regional Administrator of National Banks, Thirteenth National Bank Region (Portland).
At the public administrative hearing, both the propo


In
To be
operation operated

$1,103,729

3

1,593,412
1,579,982

73
74

nent and opponents of the applications were represented by counsel and were given the opportunity to
make opening statements, present the testimony of
witnesses and physical exhibits and make closing
statements. A reporter was present at the hearing and
prepared a transcript for inclusion in the administrative
record. On the basis of the administrative record, this
opinion is now issued.1
Background
PNB is a national bank with deposits of approximately $1.1 billion, maintaining a main office and 70
* Asset figures are for entire bank as of call dates immediately before and after transaction.
t Office figures are for beginning and end of day and reflect
all transactions occurring that day.
1
It is the policy of the Office of the Comptroller of the Currency to issue a formal opinion in connection with decisions
of general import or involving novel issues. This application
raises important questions concerning the authority of national banks in the state to establish branch offices.

73

branches. 2 It is the third largest commercial bank in
Washington, controlling 8.5 percent of the total commercial bank deposits. PNB is a commercial banking
subsidiary of Western Bancorporation, Los Angeles,
Calif. ("WB"), a registered multibank holding company.
As of December 31, 1977, WB controlled 22 banks
with consolidated deposits of approximately $18.7 billion.
ONB maintains a main office and 77 branches and
has deposits of $888.3 million, representing 6.6 percent of Washington's total commercial bank deposits.
ONB is a subsidiary of Old National Bancorporation,
Spokane ("ONBC"), which is the only registered multibank holding company headquartered in the state.
ONBC controls two banks: ONB and First National
Bank in Spokane. With total deposits of approximately
$950.9 million that represent 7.1 percent of the total
state commercial bank deposits, ONBC is the fifth
largest of 95 commercial banking organizations.
Two of the three branches, 510 Third Avenue and
No. 3 Triangle Shopping Center, which will be transferred from ONB to PNB under the agreement, are in the
Longview metropolitan area of Cowlitz County. ONB
operates seven banking offices in Cowlitz County having combined deposits of approximately $48 million
and representing 27 percent of the total county commercial bank deposits. PNB maintains two offices in
the county which collectively hold $17 million in deposits representing 9.6 percent of the total county
commercial bank deposits.
Currently, there are two commercial banks headquartered in Longview, Cowlitz County. Four additional
commercial banks operate branch offices in the
county. One of these is Seattle-First National Bank, Seattle, which is the largest commercial bank in Washington. If the proposed purchase and assumption is
executed, PNB will operate four branches in the
county and hold approximately 11.6 percent of the total county deposits. However, it would not significantly
change its relative position in the county in terms of the
percentage of commercial bank deposits held.
The remaining ONB branch office which will be
transferred to PNB is in a major retail district of the
Spokane metropolitan area. Currently, there are 10
banking organizations competing in Spokane County.
Of these, Seattle-First National Bank is the largest,
holding approximately 38.5 percent of Spokane
County deposits. ONB is the second largest commercial bank in Spokane County. It operates a main office
and 23 branches there having $290.7 million in deposits representing 28.1 percent of the total commercial bank deposits in the county. PNB maintains two
branches in the county which collectively hold $24 million in deposits representing 2.3 percent of the total
county commercial bank deposits. If the proposed
transfer is consummated, PNB's share of Spokane
County deposits will increase by approximately 1 percent, while ONB's share will decrease by that amount.

2

All deposit and branch figures are as of June 30, 1978, unless otherwise noted.


74


Issues

The protestants have presented the general argument that the Comptroller of the Currency may not authorize the proponent banks to consummate their
agreement and operate the acquired branch offices as
their own. This challenge is more specifically based on
the protestants1 following arguments:
1. The proposed acquisitions are anticompetitive,
violate antitrust laws and therefore, may not be approved.
2. The proposed transactions are not "merger transactions" contemplated by the Bank Merger Act (12
USC 1828(c)) which may be approved by the Comptroller pursuant to that Act.
3. The proposed acquisitions are inconsistent with
the spirit and intent of the Community Reinvestment
Act.
4. The proposed branch acquisitions would violate
federal branching laws (12 USC 36(b) and (c)) since
they are inconsistent with the state's branching laws
applicable to state-chartered commercial banks and
trust companies (Wash. Rev. Code Ann. (RCW)
30.04.280 and 30.40.020) which:
(a) only allow commercial state banks and trust
companies to acquire one branch of another bank and
implicitly proscribe multibranch acquisitions;
(b) do not affirmatively authorize commercial state
banks and trust companies to branch by an exchange
or trade of branches; and
(c) contemplate a "taking over or acquiring" of an
entire bank and its branches and not just one or some
of the branches.
Bank Merger Act Considerations

The protestants have argued that this transaction is
anticompetitive, violates antitrust laws, and, therefore,
may not be approved. This challenge has been considered as a part of this Office's analysis of the competitive effects of the proposed transaction pursuant to
the Bank Merger Act.
The Bank Merger Act requires this Office to consider
whether the proposed merger transaction will substantially lessen competition or tend to create or result in a
monopoly or restraint of trade; whether any perceived
anticompetitive effects of the proposed transaction are
clearly outweighed in the public interest by the probable effects the transaction will have in meeting the convenience and needs of the communities served; financial and managerial resources and future prospects of
the institutions; and the convenience and needs of the
communities. (See 12 USC 1828(c)(5)).
Commenting on the competitive aspect of this transaction as required under the Bank Merger Act (12 USC
1828(c)(4)), the United States Department of Justice,
the Federal Deposit Insurance Corporation, and the
Federal Reserve Board have each concluded that the
proposed transaction presents no competitive impediments in the relevant market areas to the approval of
this application. We agree with this conclusion and, indeed, find that the transaction will enhance competition in the relevant market areas and is, therefore, in
the public interest. We further conclude that consum-

mation of this transaction will enhance the convenience and needs of these areas.
We have considered the financial and managerial
resources of the proponent banks, as well as their future prospects, and find these factors also to be favorable.
Related to this analysis under the Bank Merger Act
is the protestants' claim that the proposed transaction
is not a "merger transaction" which is subject to the
Comptroller's approval under the Act. The protestants
have argued that the transaction is, in effect, a
"branch swap," "trade," "exchange," or "relocation"
which does not constitute a conventional consolidation
or merger pursuant to 12 USC 215, 215a or 1828(c). It
is the opinion of this Office that such contentions are
incorrect and that the acquisitions in question are
"merger transactions" subject to the Comptroller's approval under the Bank Merger Act.
The agreement executed between ONB and PNB
specifically provides for the transfer of certain assets
and the assumption of certain liabilities. Assets have
been defined to include real estate and the building in
which the branch is located (if owned by the selling
bank); any leasehold and leasehold improvements;
furniture; fixtures, equipment and supplies (owned by,
or leased by the selling bank); and the loan portfolio,
with certain stipulated exceptions. The agreement also
provides that the purchasing bank will assume the following liabilities: deposit accounts, with the consent of
depositors; collection services; safe deposit rental
agreements; obligations under maintenance and service contracts; and leases falling due or becoming performable subsequent to the closing date of the agreement.
The Bank Merger Act provides that "[n]o insured
bank shall . . . acquire the assets of, or assume liability
to pay any deposits made in, any other insured bank
except with the prior written approval of . . . [the
Comptroller of the Currency]." (See 12 USC
1828(c)(2)). It also specifically states that such a transaction is "referred to hereafter in this subsection as a
'merger transaction.' " (See 12 USC 1828(c)(3)). The
Act does not purport to prescribe the consideration,
the method of acquisition, or the specific formula for
asset or liability transfer. The fact that the targeted assets and liabilities are situated within a particular
branch office does not, in our opinion, vitiate an otherwise valid "merger transaction."
Accordingly, based upon the provisions of both the
Bank Merger Act and the agreement executed between the proponent banks, we conclude that this
transaction meets the legal requirements of a "merger
transaction." As such, it may, therefore, be approved
by the Comptroller according to the standards set forth
in the Bank Merger Act.
Community Reinvestment Act

This application was filed for consideration prior to
the November 6, 1978, effective date of the
Comptroller's Community Reinvestment Act regulations, in 12 CFR 25. However, consistent with the spirit
of the Community Reinvestment Act, Public Law 95128, available information relevant to the banks' rec


ords of meeting their communities' needs has been reviewed. Those records do not reveal such evidence to
suggest that the proponent banks are not generally
meeting the credit needs of their communities, including low and moderate income sectors.
Construction of State Branching Laws

The protestants have argued that the proposed
branch transfers are inconsistent with the provisions of
applicable state commercial bank branching statutes
and should, therefore, be denied under federal law.
This Office does not concur in that opinion.
The federal statute governing the branching powers
of national banks, 12 USC 36(c),3 permits the Comptroller to authorize a national bank to establish new
branches in the manner that state law permits state
banks to do so.4 Thus, in evaluating this application,
the Comptroller must be satisfied that it conforms with
the applicable restrictions imposed by Washington law
on establishment of branches by any state banks.
However, federal law does not restrict the words "state
banks" to state-chartered commercial banks. Section
36(h) provides that:
The words . . . "State banks" . . . as used in this
section, shall be held to include trust companies,
savings banks, or such other corporations or institutions carrying on the banking business under
the authority of State laws. [Emphasis added]
The inclusion of savings banks and trust companies
within the definition of "state banks" in Section 36 indicates that Congress foresaw the problem of a state according unequal branching powers to various financial
institutions, thereby putting certain types of institutions
at a competitive disadvantage. The congressional solution to this problem was to ensure that national banks
be given the ability to establish branches in the manner and locations that the most favored "state banks"
could.5

3

That section provides, in part, that:

[a] national banking association may, with the approval
of the Comptroller of the Currency, establish . . . new
branches . . . at any point within the State in which said
association is situated, if such establishment . . . [is] at
the time authorized to state banks by the statute law of
the State in question by language specifically granting
such authority affirmatively and not merely by implication of recognition . . . .
4
See First National Bank in Plant City v. Dickinson, 396 U.S.
122 (1969); First National Bank of Logan v. Walker Bank &
Trust Co., 385 U.S. 252 (1966); Camden Trust Co. v. Gidney,
301 F.2d 521 (D.C. Cir.), cert, denied, 369 U.S. 886 (1962).
5
The importance of this fundamental concept is now underscored by the increasingly blurred lines of differentiation between commercial banks and other financial institutions in
terms of the level of competition in the banking business. For
instance, recent progressive changes have endowed savings banks with the ability to market many banking services
similar to those offered by commercial banks. Such a development compels a broad approach to the state branching
statutes which should be referenced in deciding various national bank branching questions in view of the policy of com75

Accordingly, mutual savings banks, as "savings
banks" and competitors of national banks operating in
the state of Washington, are "state banks . . . carrying
on the banking business . . ." 6 within the meaning of 12
USC 36(h), and, therefore, national banks may establish and operate branches wherever mutual savings
banks are permitted to do so.7

petitive equality underlying 12 USC 36, as well as the sweep
of the triggering definition of "state banks" chosen by Congress. In our view, the language of Section 36 clearly authorizes reliance on the broad branching authority of state savings banks in Washington. Moreover, the financial services
environment in that state, in particular, lends even greater
support to this position. This Office has heretofore relied on
savings bank branching statutes in Massachusetts in approving certain branches for national banks in that state.
6
"Banking" according to RCW 30.04.010 means "the soliciting, receiving or accepting of money or its equivalent on deposit as a regular business." That mutual savings banks are
engaged in banking is made evident by RCW 32.08.140
which provides that every mutual savings bank shall have
the power "[t]o receive deposits of money
That mutual savings banks are "institutions carrying on the
banking business" (12 USC 36(h)) is further evidenced by
various provisions of Washington law which permit them, in
common with other banks, to become members of the Federal Reserve System and to be insured by the Federal Deposit Insurance Corporation (RCW 30.32.010); which permit
them to exercise trust powers (RCW 32.08.210); which authorize them, upon a depositor's instructions, to effect withdrawals from his account by drafts payable according to the
depositor's instructions (RCW 32.12.025); and which authorize the FDIC to act as receiver or liquidator for FDIC-insured
mutual savings banks (RCW 32.24.090). Accordingly, it is
evident that mutual savings banks are "state banks" within
the meaning of 12 USC 36(c) and (h).
7
The District Court in Hart v. Peoples National Bank, No.
C75-416S (W.D. Wash. Feb. 18, 1976) did not dispute the
contention that mutual savings banks are "state banks"
within the meaning of 12 USC 36(h). However, it did rely on
State Chartered Banks in Washington v. Peoples National
Bank, 291 F. Supp. 180 (W.D. Wash. 1966) in holding that a
bank wishing to branch under the authority given to mutual
savings banks "must satisfy all the provisions of that statute
and show that it (the national bank) engages itself exclusively as a mutual savings bank." This Office believes that
both of those decisions are in error in two respects:
First, both courts failed to consider that 12 USC 36, permitting the establishment of branches by national banks, is enabling legislation, not restricting legislation; that is, it was not
intended to restrict national banks but rather, it was intended
to benefit national banks by granting them new powers to
enable them to compete with state-chartered institutions.
Second, both decisions failed to distinguish between
those portions of a branching statute which can be complied
with by some national banks, just as they can be complied
with by some state-chartered institutions, and those portions
of a statute which no national bank can comply with. National
banks, as a class, cannot comply with all of state banking
supervisors while national banks are not subject to supervision by the states. (See First National Bank of Fairbanks v.
Camp, 465 F.2d 586 (D.C. Cir. 1972), cert, denied, 409 U.S.
1124 (1973)). Nor can national banks, as a class, ever comply with all of the provisions of state law applicable to any
given class of state-chartered institutions.

76


The state branching statute applicable to
Washington's mutual savings banks, RCW 32.04.030,8
authorizes branching in any county of the state and
contains none of the allegedly restrictive language of
RCW 30.40.020 which the protestants have relied
upon in challenging this application. Accordingly, the
resulting establishment of branches in this transaction
is authorized by 12 USC 36(c), based upon the authority of the class of "state banks" found in RCW
32.04.030, and approval of these branches is consistent with the substantive requirements of this statute
applicable to national banks.
Reliance on the state's branching laws applicable to
mutual savings banks pursuant to 12 USC 36(c) and
(h) would appear to obviate the need in this case to
consider the state's commercial bank branching statute,9 or the protestants' arguments which focus on that
statute. Nevertheless, we find that the proposed transfer of branches is also clearly authorized by RCW
30.40.020 and may be approved by the Comptroller
thereunder.
RCW 30.40.020, which deals with the branching
powers of commercial state banks and trust companies, provides, in part:
Branches authorized—Restrictions.
A bank or trust company having a paid-in capital of not less than five hundred thousand dollars
may, with the approval of the supervisor, establish
and operate branches in any city or town with the

The question of whether a national bank may establish a
branch pursuant to the power to do so granted to state mutual savings bank is now pending in the U.S. Court of Appeals for the Ninth Circuit in Hart v. Peoples National Bank,
No. 76-2182.
8
RCW 32.04.030 reads as follows:
Offices—Branches
(1) A savings bank shall not do business or be located in the same room with, or in a room connecting
with, any other bank, or a trust company that receives
deposits of money or commercial paper, or a national
banking association.
(2) No savings bank, or any officer or director thereof,
shall receive deposits or transact any of its usual business at any place other than its principal place of business or an authorized branch.
(3) A savings bank, with the approval of the supervisor, may establish and operate branches but only upon
the conditions and subject to the limitations following:

9

(a) If its guaranty fund is not less than the aggregate
paid-in capital which would be required by law as a prerequisite to the establishment and operation of an equal
number of branches in like locations by a bank.
(b) Branches may be established in any county of the
state; and
(c) A branch shall not be established at a place at
which the supervisor would not permit a proposed new
savings bank to engage in business, by reason of any
consideration contemplated by RCW 32.08.040,
32.08.050 and 32.08.060, the provisions of which, insofar as applicable, including those relating to appeals,
shall extend to applications to establish branches.
RCW 30.40.020.

state. A bank or trust company having a paid-in
capital of not less than two hundred thousand dollars may, with the approval of the supervisor, establish and operate branches within the limits of
the county in which its principal place of business
is located.

No bank or trust company shall establish or operate any branch, except a branch in a foreign
country, in any city or town outside the city or town
in which its principal place of business is located
in which any bank, trust company or national
banking association regularly transacts a banking
or trust business, except by taking over or acquiring an existing bank, trust company or national
banking association or the branch of any bank,
trust company or national banking association operating in such city or town.
The protestants (most notably, the supervisor of
banking) claim that authorization to take or acquire
"the branch of any bank" in a city or town outside the
city or town in which its principal place of business is
located only allows a commercial state bank or trust
company to acquire one branch of another bank and
implicitly proscribes multibranch acquisitions. Similarly, these protestants also argue, from a purely interpretive point of view, that RCW 30.40.020 does not affirmatively authorize state commercial banks and/or
trust companies to branch by exchanging branches
and requires acquisition of an entire bank and not just
one or some of its branches. This Office finds these interpretations of the statute to be in error.
Because of the absence of relevant case law in the
state on these questions, the Comptroller is authorized
to independently interpret and apply this statute in
evaluating PNB's branch/merger application, free from
the control of the opinions of the state supervisor:10
[Where state] . . . courts have not construed the
section, the Comptroller is free to do so and is,
furthermore, free to adopt any reasonable construction that the statute setting forth the standard
may bear. Since that statute in effect is adopted
by Section 36 of the federal law, it is tantamount to
a federal administrative official construing a federal statute which he is charged to administer and
enforce.11

liberally construed,12 and that words importing number
(i.e., singular and plural) and gender (i.e., masculine
or feminine) do not necessarily restrict a statute's
meaning to the specific number or gender used. 13
Consequently, we find that the term "the branch" may
be construed to mean "branches," thereby allowing a
bank's acquisition of one or more branches of another
bank. Indeed, the facts of Seattle-First National Bank v.
Spokane County, 196 Wash. 419, 83 P.2d 359 (1938)
(merger of banks resulting in the acquisition and operation of the target bank's branches by the surviving
bank), and United States v. Marine Bancorporation,
418 U.S. 602 (1974) (merger of banks resulting in the
acquisition and operation of the target bank's
branches by the surviving bank permitting it to expand
into cities and towns with pre-existing banking organizations) lend support to this Office's interpretation of
state law on this question.
Furthermore, bearing in mind the state's rules of
statutory construction, and absent any statutory language or case law limiting the manner of "taking over
or acquiring," a reasonable reading of the text of this
statute leads us to conclude that, contrary to the protestants' contentions, the plain meaning of its words authorize a transfer of branches by merger, in that the
method of "taking over or acquiring" may be determined by the parties to the agreement since the legislature has chosen not to dictate the method or mode of
payment, whether by cash, stock, or other consideration. The fact that a branch may be acquired in consideration for the sale of a branch to another bank in a
manner which, on its face, resembles an exchange or
trade, does not vitiate the general authority of a bank
to branch by acquisition in a city or town which is not
its principal place of business. Moreover, we find that
RCW 30.40.020, by not limiting the type of acquisition
permitted, or excepting or excluding the functional exchange of branches, does affirmatively authorize the
method of branching under consideration since, unless so restricted by the statute, it permits " . . . [a]
bank or trust company having a paid-in capital of not
less than five hundred thousand dollars . . . [to] establish and operate branches in any city or town within the
state."14 Therefore, the sale and transfer of branches15
12

Wash. Rev. Code Ann. 1.12.010 reads as follows:
The provisions of this code shall be liberally construed,
and shall not be limited by any rule of strict construction.
13
Wash. Rev. Code Ann. 1.12.050 states:
In construing RCW 30.40.020, this Office is guided
Words importing the singular number may also be apby the state's rules of statutory construction. Those
plied to the plural of persons and things; words importrules direct that the provisions of the code should be
ing the plural may be applied to the singular; and words
importing the masculine gender may be extended to fe10
males also.
First National Bank of Fairbanks v. Camp, 465 F.2d at 597.
14
Cf. Seattle-First National Bank v. Spokane County, 83 P.2d
See also Leuthold v. Camp, 273 F. Supp. 695 (D. Mont.
1967), aff'd per curiam, 405 F. 2d 499 (9th Cir. 1969); Union at 363.
Savings Bank of Patchogue v. Saxon, 335 F.2d 718 (D.C. 15 Although the agreement contemplates a simultaneous
Cir. 1964); South Dakota v. The National Bank of South Da- transfer of ail of the branches in question, the applicants
kota, 219 F. Supp. 842 (S.D. S.D. 1963), aff'd, 335 F.2d 444
stated at the hearing that, depending on the renegotiation of
(8th Cir.), cert, denied, 379 U.S. 970 (1965).
a sales price, the failure or inability to transfer certain
11
Clermont National Bank v. Citizensbank, N.A. 329 F. Supp. branches would not necessarily prevent the consummation
of the transaction.
1331, 1341-42 (S.D. Ohio 1971).



77

which the protestants have chosen to label as a
"swap" or "exchange" is, in our opinion, affirmatively
authorized by RCW 30.40.020.
Likewise, nothing in the statute authorizing the "taking over or acquiring [of] an existing bank . . . or the
branch of . . . [a] bank" indicates that the acquisition
must be of the entire bank and not just one of its
branches. Indeed, the plain meaning of the statute's
language suggests that one bank may branch by acquiring "the branch" of another bank. Any interpretation of the statute which precludes all types of acquisitions except total mergers or consolidations would
severely limit the significance and intent of the statute
and, in view of the statute's language, conflict with the
rule t h a t " . . . a statute ought, upon the whole, to be so
construed that, if it can be prevented, no clause, sentence, or word shall be superfluous, void or insignificant."16
In accordance with the above opinion, we find that
16

Washington Market Company v. Hoffman, 101 U.S. 112,
115-16 (1879); United States v. Campos-Serrano, 404 U.S.
293, 301 (1971).

the proposed acquisition of branches is affirmatively
authorized by RCW 32.04.030 and 30.40.020, and,
therefore, is permitted by 12 USC 36(b) and (c).
Conclusion

We have carefully considered the application pursuant to the Bank Merger Act, 12 USC 1828(c), and in
light of the questions raised by the protestants. We
conclude that the proposed transactions will have no
adverse effect on competition, will be in the public interest, and will otherwise satisfy the requirements of
the Bank Merger Act. We also conclude that the transactions will violate no other provisions of state or federal law. Accordingly, the application of PNB to purchase the assets and assume the liabilities of three
branch offices of ONB is approved.
February 1, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
We have reviewed these proposed transactions and
conclude that they would not have a substantial competitive impact.

RAINIER NATIONAL BANK,
Seattle, Wash., and Four Branches of First National Bank in Spokane, Spokane, Wash., and One Branch of Old National Bank of Washington, Spokane, Wash.
Banking offices^
Names of banks and type of transaction

Total
assets*

Four Branches of First National Bank in Spokane, Spokane, Wash. (13331), with
and One Branch of Old National Bank of Washington, Spokane, Wash. (4668), with
were purchased March 5, 1979, by Rainier National Bank, Seattle, Wash. (4375), which had
After the purchase was effected, the receiving bank had

COMPTROLLER'S DECISION
An application was filed on February 24, 1978, with the
Office of the Comptroller of the Currency according to
the Bank Merger Act, 12 USC 1828(c), by Rainier National Bank, Seattle, Wash. ("RNB"), for approval to
purchase the assets and assume the liabilities of four
branch offices of First National Bank of Spokane, Spokane, Wash. ("FNB") and one branch office of Old National Bank of Washington, Spokane ("ONB"). The application is based on a written agreement executed by
the proponent banks on November 30, 1977.
This application and three other purchase and assumption applications filed in February 1978 involving
RNB, FNB, ONB, and Pacific National Bank of Washington, Seattle, were challenged by several protestants, including the supervisor of banking for the state.
In response to several requests, a public hearing on all
four applications was held in Seattle on April 19-20,
1978, before the regional administrator of national
banks, Thirteenth National Bank Region (Portland).
At the public administrative hearing, both the proponent and opponents of the applications were represented by counsel and were given the opportunity to

78


$

77,017
1,103,729
3,885,782
4,193,175

In
To be
operation operated

4
1
123
124

make opening statements, present the testimony of
witnesses and physical exhibits and make closing
statements. A reporter was present at the hearing and
prepared a transcript for inclusion in the administrative
record. On the basis of the administrative record, this
opinion is now issued.1
Background

With the exception of directors' qualifying shares,
RNB is a wholly owned commercial banking subsidiary
of Rainier Bancorporation, Seattle, Wash. ("RB"). RB is
a registered bank holding company and is the second
largest commercial banking organization headquar* Asset figures are for entire bank as of call dates immediately before and after transaction.
t Office figures are for beginning and end of day and reflect
all transactions occurring that day.
1
It is the policy of the Office of the Comptroller of the Currency to issue a formal opinion in connection with decisions
of general import or involving novel issues. This application
raises important questions concerning the authority of national banks in Washington to establish branch offices.

tered in Washington. RB has total deposits of $2.6 billion, representing 19.3 percent of the total commercial
bank deposits in the state.2
ONB is a national bank with deposits of $888.3 million, representing 6.6 percent of Washington's total
commercial bank deposits. It maintains a main office
and 71 branches. ONB is a subsidiary of Old National
Bancorporation, Spokane ("ONBC"), which is the only
registered multibank holding company headquartered
in the state. ONBC controls two banks (ONB and First
National Bank in Spokane). With total deposits of approximately $950.9 million representing 7.1 percent of
the total state commercial bank deposits, ONBC is the
fifth largest of 95 commercial banking organizations in
the state.
FNB maintains a main office and five branches in the
state and has deposits of $62.6 million, representing
less than 1 percent of Washington's total commercial
bank deposits. FNB is also a subsidiary of ONBC.
All five branches which will be transferred under the
agreement are in the Spokane metropolitan area. RNB
is the seventh largest of nine commercial banking organizations operating in Spokane County with two
branches having $21.9 million in deposits, representing 2.1 percent of the county's total commercial bank
deposits.
ONB is the second largest commercial bank in Spokane County. It operates a main office and 23
branches there having $290.7 million in deposits, representing 28.1 percent of the total commercial bank
deposits. FNB maintains its main office and all five of
its branches in Spokane County. It holds approximately 5.5 percent of the total county commercial bank
deposits.
Spokane is the third largest commercial banking
market in the state. Eight commercial banks operate
69 banking offices in the county. In addition, three mutual savings banks operate 15 offices, and five savings
and loan associations operate 10 offices in the county.
Seattle-First National Bank, the largest commercial
bank in Washington, controls 38.5 percent of the total
commercial bank deposits in Spokane County. If the
agreement between RNB, ONB and FNB is executed,
RNB will enjoy a modest increase in its Spokane
County business and will enter the Spokane metropolitan area for the first time. Although RNB does have two
offices in Spokane County (Deer Park and Medical
Lake), neither of these offices are actually in the Spokane metropolitan area.
Issues

The protestants have presented the general argument that the Comptroller of the Currency may not authorize the proponent banks to consummate their
agreement and operate the acquired branch offices as
their own. This challenge is more specifically based on
the protestants' following arguments:
1. The proposed acquisitions are anticompetitive,

2

All deposit and branch figures are as of June 30, 1978, unless otherwise noted.




violate antitrust laws and, therefore, may not be approved.
2. The proposed transactions are not "merger transactions" contemplated by the Bank Merger Act (12
USC 1828(c)) which may be approved by the Comptroller pursuant to that Act.
3. The proposed acquisitions are inconsistent with
the spirit and intent of the Community Reinvestment
Act.
4. The proposed branch acquisitions would violate
federal branching laws (12 USC 36(b) and (c)) since
they are inconsistent with the state's branching laws
applicable to state-chartered commercial banks and
trust companies (Wash. Rev. Code Ann. RCW
30.04.280 and 30.40.020) which:
(a) only allow commercial state banks and trust
companies to acquire one branch of another bank and
implicitly proscribe multibranch acquisitions;
(b) do-not affirmatively authorize commercial state
banks and trust companies to branch by an exchange
or trade of branches; and
(c) contemplate a "taking over or acquiring" of an
entire bank and its branches and not just one or some
of the branches.
Bank Merger Act Consideration

The protestants have argued that this transaction is
anticompetitive, violates antitrust laws and, therefore,
may not be approved. This challenge has been considered as a part of this Office's analysis of the competitive effects of the proposed transaction pursuant to
the Bank Merger Act.
The Bank Merger Act requires this Office to consider
whether the proposed merger transaction will substantially lessen competition or tend to create or result in a
monopoly of restraint of trade; whether any perceived
anticompetitive effects of the proposed transaction are
clearly outweighed in the public interest by the probable effects the transaction will have in meeting the convenience and needs of the communities served; financial and managerial resources and future prospects of
the institutions; and the convenience and needs of the
communities. (See 12 USC 1828(c)(5).
Commenting on the competitive aspect of this transaction as required under the Bank Merger Act (12 USC
1828(c)(4)), the U.S. Department of Justice, the Federal Deposit Insurance Corporation and the Federal
Reserve Board have each concluded that the proposed transaction presents no competitive impediments in the relevant market areas to the approval of
this application. We agree with this conclusion and, indeed, find that the transaction will enhance competition in the relevant market areas and is, therefore, in
the public interest. We further conclude that consummation of this transaction will enhance the convenience and needs of these areas.
We have considered the financial and managerial
resources of the proponent banks, as well as their future prospects, and find these factors also to be favorable.
Related to this analysis under the Bank Merger Act
is the protestants' claim that the proposed transaction
is not a "merger transaction" which is subject to the
79

Comptroller's approval under the Act. The protestants
have argued that the transaction is, in effect, a
"branch swap," "trade," "exchange" or "relocation"
which does not constitute a conventional consolidation
or merger pursuant to 12 USC 215, 215a or 1828(c). It
is the opinion of this Office that such contentions are
incorrect and that the acquisitions in question are
"merger transactions" subject to the Comptroller's approval under the Bank Merger Act.
The agreement executed between ONB and PNB
specifically provides for the transfer of certain assets
and the assumption of certain liabilities. Assets have
been defined to include real estate and the building in
which the branch is located (if owned by the selling
bank); any leasehold and leasehold improvements;
furniture; fixtures, equipment and supplies (owned by
or leased by the selling bank); and the loan portfolio,
with certain stipulated exceptions. The agreement also
provides that the purchasing bank will assume the following liabilities: deposit accounts, with the consent of
depositors; collection services; safe deposit rental
agreements; obligations under maintenance and service contracts; and leases falling due or becoming performable subsequent to the closing date of the agreement.
The Bank Merger Act provides that "[n]o insured
bank shall . . . acquire the assets of, or assume liability
to pay any deposits made in, any other insured bank
except with the prior written approval of . . . [the
Comptroller of the Currency]." (See 12 USC
1828(c)(2)). It also specifically states that such a transaction is "referred to hereafter in this subsection as a
'merger transaction.' " (See 12 USC 1828(c)(3)). The
Act does not purport to prescribe the consideration,
the method of acquisition or the specific formula for
asset or liability transfer. The fact that the targeted assets and liabilities are situated within a particular
branch office does not, in our opinion, vitiate an otherwise valid "merger transaction."
Accordingly, based upon the provisions of both the
Bank Merger Act and the agreement executed between the proponent banks, we conclude that this
transaction meets the legal requirements of a "merger
transaction." As such, it may, therefore, be approved
by the Comptroller according to the standards set forth
in the Bank Merger Act.
The Community Reinvestment Act

This application was filed for consideration prior to
the November 6, 1978, effective date of the
Comptroller's Community Reinvestment Act regulations, 12 CFR 25. However, consistent with the spirit of
the Community Reinvestment Act, Public Law 95-128,
available information relevant to the banks' records of
meeting their communities' needs has been reviewed.
Those records do not reveal such evidence to suggest
that the proponent banks are not generally meeting the
credit needs of their communities, including low and
moderate income sectors.
Construction of State Branching Laws

The protestants have argued that the proposed
branch transfers are inconsistent with the provisions of
applicable state commercial bank branching statutes
80



and should, therefore, be denied under federal law.
This Office does not concur in that opinion.
The federal statute governing the branching powers
of a national bank, 12 USC 36(c),3 permits the Comptroller to authorize a national bank to establish new
branches in the manner that state law permits state
banks to do so.4 Thus, in evaluating this application,
the Comptroller must be satisfied that it conforms with
the applicable restrictions imposed by Washington law
on establishment of branches by any state banks.
However, federal law does not restrict the words "state
banks" to state-chartered commercial banks. Section
36(h) provides that:
The words . . . "State banks" . . . as used in this
section, shall be held to include trust companies,
savings banks, or such other corporations or institutions carrying on the banking business under
the authority of State laws. [Emphasis added]
The inclusion of savings banks and trust companies
within the definition of "state banks" in Section 36 indicates that Congress foresaw the problem of a state according unequal branching powers to various financial
institutions, thereby putting certain types of institutions
at a competitive disadvantage. The congressional solution to this problem was to ensure that national banks
be given the ability to establish branches in the manner and locations that the most favored "state banks"
could.5
Accordingly, mutual savings banks as "savings
banks" and competitors of national banks operating in
3

That section provides, in part, that:

[a] national banking association may, with the approval
of the Comptroller of the Currency, establish . . . new
branches . . . at any point within the State in which said
association is situated, if such establishment . . . [is] at
the time authorized to state banks by the statute law of
the State in question by language specifically granting
such authority affirmatively and not merely by implication or recognition . . . .
4
See First National Bank in Plant City v. Dickinson, 396 U.S.
122 (1969); First National Bank of Logan v. Walker Bank &
Trust Co., 385 U.S. 252 (1966); Camden Trust Co. v. Gidney,
301 F.2d 521 (D.C. Cir.), cert, denied, 369 U.S. 886 (1962).
5
The importance of this fundamental concept is now underscored by the increasingly blurred lines of differentiation between commercial banks and other financial institutions in
terms of the level of competition in the banking business. For
instance, recent progressive changes have endowed savings banks with the ability to market many banking services
similar to those offered by commercial banks. Such a development compels a broad approach to the state branching
statutes which should be referenced in deciding various national bank branching questions in view of the policy of competitive equality underlying 12 USC 36, as well as the sweep
of the triggering definition of "state banks" chosen by Congress. In our view, the language of Section 36 clearly authorizes reliance on the broad branching authority of state savings banks in Washington. Moreover, the financial services
environment in that state, in particular, lend even greater
support to this position. This Office has heretofore relied on
savings bank branching statutes in Massachusetts in approving certain branches for national banks in that state.

Washington, are "state banks . . . carrying on the
banking business . . . " 6 within the meaning of 12 USC
36(h), and, therefore, national banks may establish
and operate branches wherever mutual savings banks
are permitted to do so.7
The state branching statute applicable to
Washington's mutual savings banks, RCW 32.04.030,8
6

"Banking" according to RCW 30.04.010 means "the soliciting, receiving or accepting of money or its equivalent on deposit as a regular business." That mutual savings banks are
engaged in banking is made evident by RCW 32.08.140
which provides that every mutual savings bank shall have
the power "[t]o receive deposits of money
That mutual savings banks are "institutions carrying on the
banking business" (12 USC 36(h)) is further evidenced by
various provisions of Washington law which permit them, in
common with other banks, to become members of the Federal Reserve System and to be insured by the Federal Deposit Insurance Corporation (RCW 30.32.010); which permit
them to exercise trust powers (RCW 32.08.210); which authorize them, on a depositor's instructions, to effect withdrawals from his account by drafts payable according to the
depositor's instructions (RCW 32.12.025); and which authorize the FDIC to act as receiver or liquidator for FDIC-insured
mutual savings banks (RCW 32.24.090). Accordingly, it is
evident that mutual savings banks are "state banks" within
the meaning of 12 USC 36(c) and (h).
7
The District Court in Hart v. Peoples National Bank, No.
C75-416S (W.D. Wash., Feb. 18, 1976) did not dispute the
contention that mutual savings banks are "state banks"
within the meaning of 12 USC 36(h). However, it did rely on
State Chartered Banks in Washington v. Peoples National
Bank, 291 F. Supp. 180 (W.D. Wash. 1966) in holding that a
bank wishing to branch under the authority given to mutual
savings banks "must satisfy all the provisions of that statute
and show that it [the national bank] engages itself exclusively as a mutual savings bank." This Office contends that
both those decisions are in error in two respects:
First, both courts failed to consider that 12 USC 36, permitting the establishment of branches by national banks, is enabling legislation not restricting legislation; that is, it was not
intended to restrict national banks. Rather, it was intended to
benefit national banks by granting them new powers to enable them to compete with state-chartered institutions.
Second, both decisions failed to distinguish between
those portions of a branching statute which can be complied
with by some state-chartered institutions, and those portions
of a statute which no national bank can comply with. National
banks, as a class, cannot comply with all of the conditions of
any state branching statute; for example, all state branching
statutes require the approval of state banking supervisors
while national banks are not subject to supervision by the
states. (See First National Bank of Fairbanks v. Camp, 465
F.2d 586 (D.C. Cir. 1972), cert, denied, 409 U.S. 1124
(1973)). Nor can national banks, as a class, ever comply with
all of the provisions of state law applicable to any given class
of state chartered institutions.
The question of whether a national bank may establish a
branch pursuant to the power to do so granted to state mutual savings banks is now pending in the U.S. Court of Appeals for the Ninth Circuit in Hart v. Peoples National Bank,
No. 76-2182.
8
RCW 32.04.030 reads as follows:
Offices—Branches
(1) A savings bank shall not do business or be located in the same room with, or in a room connecting



authorizes branching in any county of the state and
contains none of the allegedly restrictive language of
RCW 30.40.020 which the protestants have relied
upon in challenging this application. Accordingly, the
resulting establishment of branches in this transaction
is authorized by 12 USC 36(c), based on the authority
of the class of "state banks" found in RCW 32.04.030,
and approval of these branches is consistent with the
substantive requirements of this statute applicable to
national banks.
Reliance on the state's branching laws applicable to
mutual savings banks pursuant to 12 USC 36(c) and
(h) would appear to obviate the need in this case to
consider the state's commercial bank branching statute9 or the protestants' arguments which focus on that
statute. Nevertheless, we find that the proposed transfer of branches is also clearly authorized by RCW
30.40.020 and may be approved by the Comptroller
thereunder.
RCW 30.40.020, which deals with the branching
powers of commercial state banks and trust companies, provides, in part:
Branches authorized—Restrictions.
A bank or trust company having a paid-in capital of not less than five hundred thousand dollars
may, with the approval of the supervisor, establish
and operate branches in any city or town within
the state. A bank or trust company having a paidin capital of not less than two hundred thousand
dollars may, with the approval of the supervisor,
establish and operate branches within the limits of
the county in which its principal place of business
is located.

No bank or trust company shall establish or operate any branch, except a branch in a foreign
country, in any city or town outside the city or town

9

with, any other bank, or a trust company that receives
deposits of money or commercial paper, or a national
banking association.
(2) No savings bank, or any officer or director thereof,
shall receive deposits or transact any of its usual business at any place other than its principal place of business or an authorized branch.
(3) A savings bank, with the approval of the supervisor, may establish and operate branches but only upon
the conditions and subject to the limitations following:
(a) If its guaranty fund is not less than the aggregate
paid-in capital which would be required by law as a prerequisite to the establishment and operation of an equal
number of branches in like locations by a bank.
(b) Branches may be established in any county of the
State; and
(c) A branch shall not be established at a place at
which the supervisor would not permit a proposed new
savings bank to engage in business, by reason of any
consideration contemplated by RCW 32.08.040,
32.08.050 and 32.08.060, the provisions of which, insofar as applicable, including those relating to appeals,
shall extend to applications to establish branches.
RCW 30.40.020.
81

in which its principal place of business is located
in which any bank, trust company or national
banking association regularly transacts a banking
or trust business, except by taking over or acquiring an existing bank, trust company or national
banking association or the branch of any bank,
trust company or national banking association operating in such city or town.
The protestants (most notably, the supervisor of
banking) claim that authorization to take or acquire
"the branch of any bank" in a city or town outside the
city or town in which its principal place of business is
located only allows a commercial state bank or trust
company to acquire one branch of another bank and
implicitly proscribes multibranch acquisitions. Similarly, these protestants also argue, from a purely interpretive point of view, that RCW 30.40.020 does not affirmatively authorize state commercial banks and/or
trust companies to branch by exchanging branches
and requires acquisition of an entire bank and not just
one or some of its branches. This Office finds these interpretations of the statute to be in error.
Because of the absence of relevant case law in the
state on these questions, the Comptroller is authorized
to independently interpret and apply this statute in
evaluating RNB's branch/merger application, free from
the control of the opinions of the state supervisor:10
[Where state] . . . courts have not construed the
section, the Comptroller is free to do so and is,
furthermore, free to adopt any reasonable construction that the statute setting forth the standard
may bear. Since that statute in effect is adopted
by Section 36 of the federal law, it is tantamount to
a federal administrative official construing a federal statute which he is charged to administer and
enforce.11
In construing RCW 30.40.020, this Office is guided
by the state's rules of statutory construction. Those
rules direct that the provisions of the code should be
liberally construed12 and that words importing number
(i.e., singular and plural) and gender (i.e., masculine
and feminine) do not necessarily restrict a statute's
meaning to the specific number or gender used. 13
10

First National Bank of Fairbanks v. Camp, 465 F.2d at 597.
See also Leuthold v. Camp, 273 F. Supp. 695 (D. Mont.
1967), aff'd per curiam, 405 F.2d 499 (9th Cir. 1969); Union
Savings Bank of Patchogue v. Saxon, 335 F.2d 718 (D.C.
Cir. 1964); South Dakota v. The National Bank of South Dakota, 219 F. Supp. 842 (S.D. S.D. 1963), aff'd, 335 F.2d 444
(8th Cir.), cert, denied, 379 U.S. 970 (1965).
11
Clermont National Bank v. Citizensbank, N.A. 329 F. Supp.
1331, 1341-42 (S.D. Ohio 1971).
12
Wash. Rev. Code Ann. 1.12.010 reads as follows:
The provisions of this code shall be liberally construed,
and shall not be limited by any rule of strict construction.
13
Wash. Rev. Code Ann. 1.12.050 states:
Words importing the singular number may also be applied
to the plural of persons and things; words importing the
plural may be applied to the singular; and words importing
the masculine gender may be extended to females also.
82



Consequently, we find that the term "the branch" may
be construed to mean "branches," thereby allowing a
bank's acquisition of one or more branches of another
bank. Indeed, the facts of Seattle-First National Bank v.
Spokane County, 196 Wash. 419, 83 P.2d 359 (1938)
(merger of banks resulting in the acquisition and operation of the target bank's branches by the surviving
bank, and United States v. Marine Bancorporation, 418
U.S. 602 (1974) (merger of banks resulting in the acquisition and operation of the target bank's branches
by the surviving bank permitting it to expand into cities
and towns with pre-existing banking organizations)
lend support to this Office's interpretation of state law
on this question.
Furthermore, bearing in mind the state's rules of
statutory construction and absent any statutory language or case law limiting the manner of "taking over
or acquiring," a reasonable reading of the text of this
statute leads us to conclude that, contrary to the protestants' contentions, the plain meaning of its words authorizes a transfer of branches by merger, in that the
method of "taking over or acquiring" may be determined by the parties to the agreement since the legislature has chosen not to dictate the method or mode of
payment, whether by cash, stock or other consideration. The fact that a branch may be acquired in consideration for the sale of a branch to another bank in a
manner which, on its face, resembles an exchange or
trade does not vitiate the general authority of a bank to
branch by acquisition in a city or town which is not its
principal place of business. Moreover, we find that
RCW 30.40.020, by not limiting the type of acquisition
permitted or excepting or excluding the functional exchange of branches, does affirmatively authorize the
method of branching under consideration since, unless so restricted by the statute, it permits " . . . [a]
bank or trust company having a paid-in capital of not
less than five hundred thousand dollars . . . [to] establish and operate branches in any city or town within the
state."14 Therefore, the sale and transfer of branches15
which the protestants have arbitrarily chosen to label
as a "swap" or "exchange" is, in our opinion, affirmatively authorized by RCW 30.40.020.
Likewise, nothing in the statute authorizing the "taking over or acquiring [of] an existing bank . . . or the
branch of . . . [a] bank" indicates that the acquisition
must be of the entire bank and not just one of its
branches. Indeed, the plain meaning of the statute's
language suggests that one bank may branch by acquiring "the branch" of another bank. Any interpretation of the statute which precludes all types of acquisitions except total mergers or consolidations would
severely limit the significance and intent of the statute
and, in view of the statute's language, conflict with the
14
Cf. Seattle-First Nat'l Bank v. Spokane County, 83 P.2d at
363.
15
Although the agreement contemplates a simultaneous
transfer of all the branches in question, the applicants stated
at the hearing that, depending on the renegotiation of a sales
price, the failure or inability to transfer certain branches
would not necessarily prevent the consummation of the
transaction.

rule t h a t " . . . a statute ought, upon the whole, to be so
construed that, if it can be prevented, no clause, sentence, or word shall be superfluous, void or insignificant."16
In accordance with the above opinion, we find that
the proposed acquisition of branches is affirmatively
authorized by RCW 32.04.030 and 30.40.020, and,
therefore, is permitted by 12 USC 36(b) and (c).
Conclusion

We have carefully considered the application pursuant to the Bank Merger Act, 12 USC 1828(c), and in
16

Washington Market Company v. Hoffman, 101 U.S. 112,
115-16 (1879); United States v. Campos-Serrano, 404 U.S.
293, 301 (1971).

light of the questions raised by the protestants. We
conclude that the proposed transactions will have no
adverse effect on competition, will be in the public interest and will otherwise satisfy the requirements of the
Bank Merger Act. We also conclude that the transactions will violate no other provisions of state or federal
law. Accordingly, the application of RNB to purchase
the assets and assume the liabilities of four branch offices of FNB and one branch of ONB is approved.
February 1, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
We have reviewed these proposed transactions and
conclude that they would not have a substantial competitive impact.

ATLANTIC FIRST NATIONAL BANK OF DAYTONA BEACH,
Daytona Beach, Fla., and Atlantic Bank of West Daytona Beach, Daytona Beach, Fla.
Banking offices
Names of banks and type of transaction

Total
assets

Atlantic Bank of West Daytona Beach, Daytona Beach, Fla., with
and Atlantic First National Bank of Daytona Beach, Daytona Beach, Fla. (12546), which had
merged March 31, 1979, under charter and title of the latter bank (12546). The merged bank at
date of merger had

COMPTROLLER'S DECISION
Pursuant to the requirements of 12 USC 1828(c), the
Bank Merger Act, an application has been filed with
the Office of the Comptroller of the Currency that
seeks and requires the prior written consent of this Office to the proposed merger of Atlantic Bank of West
Daytona Beach, Daytona Beach, Fla. ("Merging
Bank"), into Atlantic First National Bank of Daytona
Beach, Daytona Beach, Fla. ("Charter Bank"), under
the charter and title of "Atlantic First National Bank of
Daytona Beach." The subject application is based on
an agreement executed between the proponent banks
and is incorporated herein by reference, the same as if
fully set forth.
Atlantic First National Bank of Daytona Beach, Daytona Beach, Fla. ("Charter Bank"), was granted National Banking Association charter number 12546 by
this Office on June 2, 1924. As of June 30, 1978, Charter Bank's total deposits were $75.5 million.
Atlantic Bank of West Daytona Beach, Daytona
Beach, Fla. ("Merging Bank"), is a state-chartered
commercial banking institution. On June 30, 1978,
Merging Bank had total deposits of $14.5 million.
Both of the proponent banks are commercial banking subsidiaries of Atlantic Bancorporation, Jacksonville, Fla. ("Atlantic"), a registered multibank holding
company that controlled 27 subsidiary banks with consolidated deposits of $1.3 billion as of December 31,
1977.




In
To be
operation operated

$ 17,026,000
83,169,000
100,195,000

This application was filed prior to the November 6,
1978, effective date of the Comptroller's Community
Reinvestment Act regulations, 12 CFR 25. However,
pursuant to the Community Reinvestment Act, Public
Law No. 95-128, available information relevant to the
banks' records of meeting community credit needs
was reviewed, revealing no evidence to suggest that
the applicants are not meeting the credit needs of their
community, including low and moderate income neighborhoods.
The subject application essentially represents a corporate reorganization whereby Atlantic is consolidating
a portion of its banking interests in the Daytona Beach
area; as such, it would produce no adverse impact on
any relevant area of consideration. Accordingly, the
application is deemed to be not adverse to the public
interest and is approved. Additionally, Charter Bank is
authorized to operate the former banking office of
Merging Bank as a branch of the surviving bank.
November 29, 1978

SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are all wholly owned subsidiaries
of the same bank holding company. As such, their proposed mergers are essentially corporate reorganizations and would have no effect on competition.

83

ROYAL TRUST BANK OF MIAMI, N.A.,
Miami, Fla., and Royal Trust Bank of South Dade, N.A., Unincorporated Area of Dade County (P.O. Miami)
Banking offices

Names of banks and type of transaction

Total
assets*

Royal Trust Bank of South Dade, N.A., Unincorporated Area of Dade County (P.O. Miami), Fla.
(16698), with
and Royal Trust Bank of Miami, N.A., Miami, Fla. (15156), which had
merged April 1, 1979, under charter and title of the latter bank (15156). The merged bank at date of
merger had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency requesting prior permission to merge Royal
Trust Bank of South Dade, N.A., unincorporated area
of Dade County, Fla. ("Dade Bank"), into Royal Trust
Bank of Miami, N.A., Miami, Fla. ("Miami Bank"), under
the charter and title of "Royal Trust Bank of Miami,
N.A." The application rests upon an agreement executed between the proponent banks and is incorporated herein by reference.
Miami Bank received its charter as a national bank
on September 1, 1972, and had deposits of $114.2
million as of September 30, 1978.
Dade Bank was chartered as a national bank on
January 4, 1978, and as of September 30, 1978, had
total deposits of $3.9 million. .
Both Miami Bank and Dade Bank are banking subsidiaries of Royal Trust Bank Corp., Miami, Fla., a reg* Asset figures are as of call dates immediately before and
after transaction.

$

In
To be
operation operated

8,488,000
169,021,000
148,636,000

istered multibank holding company. Inasmuch as the
proponent banks are commonly owned and controlled,
approval of this application would not produce an adverse impact on any relevant area of consideration.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
banks1 records of helping to meet the credit needs of
their communities, including low and moderate income
neighborhoods, is less than satisfactory.
Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that this merger is in the public interest and is
approved.
February 28, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are both wholly owned subsidiaries of the same bank holding company. As such,
their proposed merger is essentially a corporate reorganization and would have no effect on competition.

THE CENTRAL TRUST COMPANY, NATIONAL ASSOCIATION,
Cincinnati, Ohio, and The Central Trust Company of Montgomery County, National Association, Dayton, Ohio
Banking offices
Total
assets

Names of banks and type of transaction

The Central Trust Company of Montgomery County, National Association, Dayton, Ohio (16330),
with
and The Central Trust Company, National Association, Cincinnati, Ohio (16416), which had
merged April 16, 1979, under charter and title of the latter bank (16416). The merged bank at date
of merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on the application to
merge The Central Trust Company of Montgomery
County, National Association, Dayton, Ohio ("Merging
Bank"), into The Central Trust Company, National Association, Cincinnati, Ohio ("Charter Bank"). This application is one part of a process whereby The Central
Bancorporation, Inc., Cincinnati, Ohio ("Central"), a
registered multibank holding company, is realigning
and consolidating a portion of its banking interests.

84


$

76,904,000
1,033,364,000
1,110,130,000

In
To be
operation operated
7
45
52

Charter Bank has total deposits of $829.7 million,
and Merging Bank has total deposits of $74.9 million.
Both banks are wholly owned commercial banking
subsidiaries of Central. As such, approval of this application would have no adverse effect on any relevant
area of consideration.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
applicants' records of helping to meet the credit needs

of their communities, including low and moderate income neighborhoods, is less than satisfactory.
This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with the merger.
March 15, 1979

SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are all wholly owned subsidiaries
of the same bank holding company. As such, the proposed mergers are essentially corporate reorganizations and would have no effect on competition.

BANKERS TRUST COMPANY OF ALBANY, NATIONAL ASSOCIATION,
Albany, N.Y., and Bankers Trust Company of Central New York, Utica, N.Y.
Names of banks and type of transaction

Total
assets

Bankers Trust Company of Central New York, Utica, N.Y., with
and Bankers Trust Company of Albany, National Association, Albany, N.Y. (15758), which had
merged April 30, 1979, under charter and title of the latter bank (15758). The merged bank at date
of merger had

COMPTROLLER'S DECISION
Application has been made to the Office of the Comptroller of the Currency requesting prior permission to
merge Bankers Trust Company of Central New York,
Utica, N.Y. ("Merging Bank"), into Bankers Trust Company of Albany, National Association, Albany, N.Y.
("Charter Bank"), under the charter and title of
"Bankers Trust Company of Albany, National Association." The subject application rests on an agreement
executed between the proponent banks and is incorporated herein by reference, the same as if fully set
forth.
Charter Bank has operated as a National Banking
Association since October 6, 1969, when it was
granted charter number 15758 by this Office. As of
June 30, 1978, Charter Bank had total commercial
bank deposits of $268.1 million.
Merging Bank commenced commercial banking operations in 1971 and, as of June 30, 1978, had total
deposits of $23.9 million.
Charter Bank and Merging Bank are both banking
subsidiaries of Bankers Trust New York Corporation,
New York, N.Y., a registered multibank holding company. Inasmuch as the two proponent banks are commonly owned and controlled, approval of this applica-

$ 19,637,000
309,016,000

Banking offices
In
To be
operation operated
8
28

328,653,000

36

tion would not produce an adverse impact on any
relevant area of consideration.
This application was filed prior to the November 6,
1978, effective date of the Comptroller's Community
Reinvestment Act regulations, 12 CFR 25. However,
pursuant to the Community Reinvestment Act, Public
Law No. 95-128, available information relevant to the
banks' records of meeting community credit needs
was reviewed, revealing no evidence to suggest that
credit needs of the community are not being met, including low and moderate income neighborhoods.
The proposed merger essentially represents a corporate reorganization whereby Bankers Trust New
York Corporation is consolidating a portion of its banking interests. The application is therefore deemed to
be not adverse to the public interest and should be,
and hereby is, approved.
February 6, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are both wholly owned subsidiaries of the same bank holding company. As such,
their proposed merger is essentially a corporate reorganization and would have no effect on competition.

THE CENTRAL TRUST COMPANY OF NORTHEASTERN OHIO, NATIONAL ASSOCIATION,
Canton, Ohio, and The Central Trust Company of Wayne County, Wooster, Ohio
Banking offices
Names of banks and type of transaction

Total
assets

The Central Trust Company of Wayne County, Wooster, Ohio, with
and The Central Trust Company of Northeastern Ohio, National Association, Canton, Ohio (76),
which had
merged April 30, 1979, under charter and title of the latter bank (76). The merged bank at date of
merger had

In
To be
operation operated

$ 43,674,000

4

333,903,000

21

377,577,000

25

COMPTROLLER'S DECISION
This is the Comptroller's decision on the application to
merge The Central Trust Company of Wayne County,
Wooster, Ohio ("Merging Bank"), into The Central Trust



Company of Northeastern Ohio, National Association,
Canton, Ohio ("Charter Bank"). This application is one
part of a process whereby The Central Bancorpora85

tion, Inc., Cincinnati, Ohio ("Central"), a registered
multibank holding company, is realigning and consolidating a portion of its banking interests.
Charter Bank has total deposits of $284 million, and
Merging Bank has total deposits of $38.1 million. The
merging banks are wholly owned banking subsidiaries
of the same bank holding company, Central; approval
of this application would have no adverse effect on
any relevant area of consideration.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
applicants' records of helping to meet the credit needs

of their communities, including low and moderate income neighborhoods, is less than satisfactory.
This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with the merger.
March 21, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are all wholly owned subsidiaries
of the same bank holding company. As such, the proposed mergers are essentially corporate reorganizations and would have no effect on competition.

WARRICK NATIONAL BANK OF BOONVILLE,
Boonville, ln<±, The Colonial National Bank, Ohio Township (P.O. Tennyson), Ind.
Banking offices
Names of banks and type of transaction

Total
assets

The Colonial National Bank, Ohio Township (P.O. Tennyson), Ind. (8956), with
and Warrick National Bank of Boonville, Boonville, Ind. (14218). which had
merged May 7, 1979, under charter and title of the latter bank (14218). The merged bank at date of
merger had

COMPTROLLER'S DECISION
Pursuant to the Bank Merger Act, 12 USC 1828(c), an
application has been filed with the Office of the Comptroller of the Currency. The application requests prior
written consent to the proposed merger of The Colonial National Bank, Ohio Township (P.O. Tennyson),
Ind. ("CNB") into Warrick National Bank of Boonville,
Boonville, Ind. ("WNB") under the cha. :er and title of
"Warrick National Bank of Boonville." This application
is based on a written agreement between the proponents.
WNB had total deposits of $37.6 million on September 30, 1978, and operates its head office and one
branch.
CNB had total deposits of $10.9 million on September 30, 1978. In 1971, CNB became a subsidiary of
Two Rivers, Inc., Evansville, Ind., and its corporate
parent, Property Developers, Inc., Evansville, both registered bank holding companies. Under this ownership, CNB became a supervisory problem bank. A
principal portion of CNB's current problems stems
from a large parcel of other real estate owned, which
was sold under contract in December 1974 to Lemmons and Company (another business interest of principals of Two Rivers, Inc., and Property Developers,
Inc.). Subsequently, in December 1976, Lemmons and
Company filed bankruptcy, and the two bank holding
companies were also drawn into that bankruptcy. As a
consequence of substantial adverse publicity concerning CNB's operation and condition, the bank has suffered a loss of depositors' confidence and has sustained a heavy withdrawal of deposits commencing in
June 1977.
In September 1978, the bankruptcy court authorized
the sale of CNB, and it was subsequently sold through
86



In
To be
operation operated

$11,815,000
46,864.000
58,855,000

a public bidding process to an individual (the husband
of a WNB director) with the intent of merging CNB and
WNB. Additionally, it is noted that CNB's former chief
executive officer has resigned, and the bank is now
being run in a caretaker fashion by a former junior officer.
Although Warrick County, Inc., the location of the
two banks involved in this proposed merger, is part of
the five-county Evansville SMSA, it is believed that the
relevant market area is deemed to be the smaller twocounty area of Warrick and Vanderburgh Counties, as
stated and described in the application. The western
portion of Warrick County, the area in which CNB is situated, serves as a bedroom community for Evansville,
immediately to the west. There are 11 banks operating
in the two-county area, and the market is dominated
by the three larger Evansville banks which collectively
hold almost 83 percent of total deposits. WNB holds
only 4.3 percent of market deposits, and CNB holds a
mere 1.27 percent of total area deposits. Pro forma,
the resulting bank with approximately 5.6 percent of
total market shares and would be a very distant fourth
largest bank, behind the third largest bank that holds
in excess of 18 percent of deposits. Given the overall
condition of CNB, which can only be described as a
"stagnating" or "possible failing" institution, the bank's
competitive abilities are only conjectural, and it is concluded that approval of this merger would result in no
substantially adverse effect on competition.
The financial and managerial resources of WNB are
regarded as satisfactory. The financial and managerial
resources of CNB are considered less than satisfactory and largely unknown. Apart from this merger, the
only apparent alternative for CNB is a continued period of stagnation, with ultimate likelihood of liquidation.

Approval of this merger will be immediately beneficial to the banking customers in CNB's service area.
The public's banking needs will be better met by WNB
which will operate all of CNB's existing offices as
branches. In addition, the resulting bank will be a viable competitor and should be able to provide greater
service to its customers.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
applicants' record of helping to meet the community

credit needs, including those of low and moderate income neighborhoods, is less than satisfactory.
This application is in the public interest and is approved. WNB is also authorized to operate all former
banking offices of CNB as branches.
April 3, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
We have reviewed this proposed transaction and conclude that it would not have any significant effect on
competition.

THE THIRD NATIONAL BANK AND TRUST COMPANY OF DAYTON, OHIO,
Dayton, Ohio, and The Citizens First National Bank of Greene County, Xenia, Ohio
Banking offices
Names of banks and type of transaction

Total
assets

The Citizens First National Bank of Greene County, Xenia, Ohio (2575), with
and The Third National Bank and Trust Company of Dayton, Ohio, Dayton, Ohio (10), which had . . .
merged May 21, 1979, under charter of the latter bank (10) and title "The Third National Bank and
Trust Company." The merged bank at date of merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge The Citizens First National Bank of Greene
County, Xenia, Ohio ("FNB"), into The Third National
Bank and Trust Company of Dayton, Ohio, Dayton,
Ohio ("Third"). The application was filed on January
12, 1979, and is based on a written agreement executed by the applicant banks on November 28, 1978,
As of June 30, 1978, FNB had total deposits of $37
million and Third had total deposits of $325 million.
Third is in Dayton, which is in Montgomery County.
FNB is in Xenia, which is in Greene County. Greene
County is adjacent to, and east of, Montgomery
County. The two counties are part of the Dayton SMSA,
which also includes Miami and Preble Counties.
The main office of FNB is approximately 15 miles
east of Dayton. The closest branches of the two banks
are 3.5 miles apart.
Winters National Bank in Dayton with $694 million in
deposits is the largest bank in Montgomery County
and the SMSA. First National Bank in Dayton with $333
million and Third with $325 million in deposits rank
second and third. Central Trust Company with $68 million in deposits ranks fourth. In aggregate, the three
largest banks held 88 percent of the commercial bank
deposits in Montgomery County and 65 percent of the
commercial bank deposits in the SMSA. There are 11
commercial banks operating in the county.
Third is an independently owned commercial bank
while the two larger banks in the county are controlled
by holding companies. Winters is a subsidiary of Winters National Corporation, which holds approximately
$1.0 billion in deposits, and First National is a subsidiary of National City Corporation, which holds $3.6 million in deposits. Subsidiaries of Central Bancorporation
($1.9 million in deposits) and BancOhio ($1.1 billion in
deposits) are also in Montgomery County. These latter



$ 47,082 .000
447,876 .000
494,915 .000

In
To be
operation operated
7
24
31

two banks will soon become branches of the parent's
lead banking subsidiaries. These $1 billion-and-over financial institutions are a major competitive factor in the
commercial banking markets in Dayton and surrounding areas.
Savings and loan associations also have an effect
on banking competition in Montgomery County and, in
fact, control greater shares of funds on deposit than
commercial banks. These depository institutions hold
$1.6 billion in deposits while commercial banks hold
$1.4 million in deposits. Twenty-one percent of Third's
loan portfolio is collateralized by liens on real estate.
Therefore, it faces direct competition from savings and
loan associations for at least this loan business and
the deposits necessary to support these loans.
FNB operates in a similar competitive environment in
Greene County. Both the first and third largest banks
in the county are subsidiaries of holding companies
with total deposits in excess of $1 billion. FNB with $37
million in deposits is the second largest bank operating in the county. The largest bank, Miami Deposit
Bank ($54 million deposits) is a subsidiary of First National City Corporation, a bank holding company which
holds $1.1 billion in deposits. The third largest bank
($35 million in deposits) is a subsidiary of Society Corporation which controls $1.8 billion in deposits. In aggregate, the three largest banks control 62 percent of
Greene County's commercial bank deposits. There are
seven commercial banks operating in the county.
In Greene County, as in Montgomery County, savings and loan institutions hold more deposits than
commercial banks. These institutions hold $171 million
in deposits while commercial banks hold $167 million
in deposits. FNB holds 53 percent of its loans in real
estate and consequently competes directly and substantially with the saving and loan institutions in the
county.
87

Third conducts some banking business in Greene
County. For example, within ZIP code 45385, which is
Xenia and environs, Third holds $2.1 million in deposits and $4.8 million in loans. In the same ZIP code
area, FNB has $22.5 million in loans. However, the
merger of Third and FNB would not change FNB's rank
in Greene County or Third's rank in Montgomery
County. The resulting bank's rank in the SMSA or any
subset which includes both Greene and Montgomery
County also would not change. However, in Xenia and
Greene County, FNB would be replaced by a strong
independent commercial bank able to compete with
the two $1 billion-plus holding company subsidiaries
located there. In the combined Montgomery and
Greene County market, which the Comptroller finds to
be the most reasonable market, the resulting bank will
be the largest independent bank but will not cause a
significant increase in concentration. On the contrary,
the resulting bank will be a significant local competitor
to the statewide holding company subsidiaries and
branches.
After reviewing all factors relevant to the issue of
competition, the Comptroller finds this merger will reduce some existing competition between applicants,
but that this does not rise to the level requiring a finding that the positive factors outweigh the adverse competitive impact. On the contrary, the Comptroller finds
that the strengthening of the largest independent commercial bank in the combined Montgomery/Greene
County marset will help preserve and enhance competition by maintaining the choice for banking customers
of a local institution strong enough to compete with
statewide holding companies.
The financial and managerial resources of Third are
excellent. The financial resources of FNB are satisfactory, but the future is clouded by high turnover in management personnel. The future prospects of the combined bank are good. As a result of this merger, Third
intends to make available new and expanded banking
services to the present customers of FNB including,
but not limited to, an increased legal lending limit, trust
and fiduciary services, more advantageous time certificate service, expanded consumer lending services
and expanded data processing services. These facts
are positive considerations on the issue of convenience and needs. For example, the factor of an increased legal lending limit has particular bearing on
the community of Xenia. In 1974, a substantial portion
of Xenia was destroyed by a devastating tornado. The
community has had a difficult time rebuilding from this
catastrophe. A significant portion of the loans held by
Third in the Xenia area are commercial loans considerably larger than the $500,000 legal lending limit of
FNB. The Comptroller believes that the expanded
credit opportunities that would be made available by
the presence of Third in this market are an important
factor on issue of convenience and needs in this merger. The Comptroller is not aware of any negative factors on this issue with respect to this application.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
applicants' records of helping to meet the credit needs

88


of their entire communities, including low and moderate income neighborhoods, is less than satisfactory.
This opinion is the prior written approval required by
the Bank Merger Act, 12 USC 1828(c), in order for the
applicants to proceed with the proposed merger.
April 20, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
The relevant geographic markets are Montgomery
County (population 574,800) and Greene County (population 133,800) within the four-county Dayton SMSA
and Greene County alone. The Dayton SMSA, Ohio's
fourth largest metropolitan area, has experienced a 2.5
percent population decline during the 1970's. Greene
County is the SMSA's fastest growing area with a 7.0
percent population increase, roughly double the increase of the SMSA's other suburban counties. Dayton
is a major manufacturing center. It is the home of National Cash Register Company and GM's recently sold
Frigidaire Division. The largest employer in Greene
County is the federal government due to the presence
of Wright-Patterson Air Force Base in the County's
northwest corner. The principal towns in Greene
County are Fairbom (population 33,100) near WrightPatterson AFB and Xenia (population 26,000) in the
center of the county. Xenia is 15% miles from downtown Dayton by four-lane highway. Dayton's suburbs
have spilled into Greene County but have not reached
Xenia.
Applicant's and Bank's nearest offices are only 2.8
miles apart. The map included with the application
shows six Applicant branches and two Bank branches
near the Montgomery-Greene County border. Although
their distances apart are not provided, it appears that
no Bank office is more than 10-12 miles from an office
of Applicant.
Bank draws 85.7 percent of its deposits, totaling
$30.9 million, and 82.1 percent of its loans, totaling
$19.5 million, from ZIP codes within Greene County, including several ZIP codes which overlap into Montgomery County. Applicant draws $27.0 million in deposits and $22.1 million in loans from these same
overlapping ZIP codes. Because some ZIP codes
overlap the county border it is difficult to determine
with precision the extent to which each bank draws
customers from the other's county. For example, a single ZIP code, 45385, which includes Xenia and the
surrounding rural area, accounts for 62.4 percent of
Bank's deposits and 53.8 percent of its loans. Applicant draws $2.1 million in deposits from this area and
$4.5 million in loans. Moreover, Applicant draws more
in deposits and loans from Fairbom, Greene County's
largest community, than does Bank. Thus, while Bank
may or may not be a significant alternative for most
Dayton residents, Applicant is clearly a significant
banking alternative for Greene County residents. Accordingly, it appears that the proposed acquisition
would eliminate existing competition.
A good argument can be made that the market is really much narrower—e.g., eastern Montgomery County
and western Greene County. However, for purposes of
analyses, and because of the difficulty of developing

statistics for less than an entire county, we will use a
two-county market. Employing a two-county market,
Applicant is the third largest bank with 19.0 percent of
deposits and Bank is sixth largest with 2.2 percent.
Commercial banking is very concentrated in Montgomery County. The three largest among its 11 commercial
banks and their June 30, 1978 market share, are Winters National Bank (44.8 percent), First National Bank
(21.9 percent) and Applicant (21.3 percent). Thus, the
three largest banks have a combined market share of
88.0 percent, while the fourth largest bank has a 4.5
percent market share. Only one independent bank (in
addition to Applicant) in Montgomery County has a
significant branch network. Banking is less concentrated in Greene County. The largest bank and Bank
each have 19.8 percent of the county's deposits while
the third largest has a 17.9 percent share, or 57.5 percent combined. Combining the two markets, the three
largest banks (all in Montgomery County) presently
hold 78.5 percent of commercial bank deposits and
will hold 80.7 percent if the merger is consummated.
However, four of the six largest banks in Montgomery
County are owned by multibank holding companies,
as are two of the three largest banks in Greene
County. In all, five of the state's 10 largest banking organizations are represented in one of the two counties.
Applicant and Bank are respectively the largest and
second largest independent banks in the two-county
area.

As a result of the new Ohio branching statute, effective on January 1, 1979, which permits de novo
branching into adjacent counties and branching by
acquisition statewide, Applicant can freely open de
novo branches throughout adjacent Greene County.
As a large, nearby bank, it could be expected to do
so. Previously a bank which wanted to enter new markets in Ohio had to either use the multibank holding
company corporate structure to charter a de novo
bank or had to acquire an existing bank. It is anticipated that many banks will take advantage of the
change to expand de novo. Indeed, we understand
that 17 Ohio banks have submitted applications to
open 25 de novo offices in adjacent counties since
January 1st. Were Applicant to enter Greene County
de novo, as the statute now permits, Bank would remain as a possible entry vehicle for banks which can
enter only by acquisition.
Applicant and Bank are actual competitors in
Greene County, although the degree of such competition is difficult to gauge with any precision. In the
broader two-county Greene-Montgomery County market where we can measure this competition, it is clear
that the merger will eliminate some direct competition.
Furthermore, the proposed acquisition would produce
an increase in concentration. Overall, we conclude
that the proposed acquisition would have an adverse
effect on competition.

FIRST NATIONAL CITY BANK OF ALLIANCE,
Alliance, Ohio, and First National Bank of Sebring, Sebring, Ohio
Banking offices
Names of banks and type of transaction

Total
assets

First National Bank of Sebring, Sebring, Ohio (14601), with
and First National City Bank of Alliance, Alliance, Ohio (3721), which had
merged May 22, 1979, under charter and title of the latter bank (3721). The merged bank at date of
merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge First National Bank of Sebring, Sebring, Ohio
("FNB"), into First National City Bank of Alliance, Alliance, Ohio ("Charter Bank"). The application was filed
on September 7, 1978, and is based on a written
agreement executed by the applicant banks on August 15, 1978. As of June 30, 1978, FNB had total deposits of $8.5 million, and Charter Bank had total deposits of $74.7 million.
FNB is the only commercial bank in Sebring. Charter
Bank is domiciled in Alliance, which is in the extreme
northeastern corner of Stark County, 15 miles northeast of Canton, Ohio. The city limits of Alliance extend
east into Mahoning County where FNB is located in
Sebring, about 31/2 miles east of Alliance. Sebring is
virtually a suburb of Alliance.
The smallest geographic market that can be reasonably found is Alliance-Sebring. Within this market,



In
To be
operation operated

$10,549,190
83,239,645
93,788,835

Charter Bank holds $64 million in deposits or 19.4 percent of all deposits held in the market and, on this
basis, is the largest of 10 competitors. FNB holds 2.3
percent of all deposits and is ninth. A more realistic
definition of the market must take into account the fact
that three of the four commercial banks headquartered
in Canton have branches in Alliance. These banks are
The Central Trust Company of Northeastern Ohio with
$275 million in deposits, The Harter Bank and Trust
Company with $363 million in deposits and The United
National Bank with $116 million in deposits. Thus, the
Federal Reserve Board has found the Charter and
Merging banks to be part of the Canton banking market, where Charter Bank ranks fifth with 6.9 percent of
the deposits. Consummation of the merger would not
change Charter Bank's rank and would raise its total to
7.7 percent of deposits.
The competitive situation is not capable of complete
description by numbers alone. The Merging Bank, like
89

many very small institutions, is facing a management
succession problem. Although present management is
satisfactory, the chief executive officer is 82 years old.
The Bank's lending limit is $110,000, and it does not
offer trust services, free personal checking accounts,
direct issue and handling of bank credit cards, automated teller machines, computerized payroll services,
most advantageous compounding of interest on time
deposits, highest rates on time deposits and extended
banking hours. Citizens of Sebring must now travel to
Alliance to find these services, and once in Alliance,
the presence of the large Canton banks offer strong
competitive alternatives. In light of the foregoing, the
Comptroller finds that the proposed merger would
eliminate some existing competition but that the major
thrust of banking competition for the citizens of Sebring, i.e., between Alliance banks and Canton banks
would not be significantly affected. The effect on competition does not rise to a level that would suggest disapproval under the Bank Merger Act, 12 USC 1828(c).
The financial and managerial resources of Charter
Bank are satisfactory. The financial resources of FNB
are satisfactory, but the future of the presently satisfactory management is clouded by the age of the chief
executive officer. The future prospects of the combined bank are good.
As a result of this merger, Charter Bank intends to
make available new and expanded banking services
to the present customers of FNB, including but not limited to an increased legal lending limit, trust and fiduciary services, free personal checking accounts, computerized payroll and other computer services and
acceptance of customer payment of public utility billings. These facts are positive considerations on the issue of convenience and needs. The Comptroller is not
aware of any negative factors on this issue.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
applicants' record of helping to meet credit needs of
the communities, including low and moderate income
neighborhoods, is less than satisfactory.

This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with the proposed merger.
April 19, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
Both institutions operate in the Alliance-Sebring area
which consists of the northeast corner of Stark County
and the southwest corner of Mahoning County. Sebring is located 4 miles from Alliance and is part of the
Alliance metropolitan area. Alliance serves as the retail
center for the surrounding area.
While, the application includes the towns of Hartville
and Uniontown in the relevant market, it appears that
these towns are too remote to be considered as part of
the banking market; moreover, each is part of a different metropolitan area. Hartville is 13 miles from Alliance and 17 miles from Sebring and is part of the Canton area. Uniontown is 17 miles from Alliance and 21
miles from Sebring and part of the Akron area.
The closest office of Applicant is 4 miles from the
only office of Bank. There are no intervening towns or
other banks between the two offices. The acquisition
would eliminate substantial existing competition between the two institutions.
Applicant is the largest bank in the Alliance-Sebring
area with approximately 57 percent of total deposits.
Bank is the fourth largest of five banks in that area and
has 7.4 percent of total deposits. The resulting institution would be the largest in Alliance-Sebring; its share
of over 64 percent of total deposits would make it
nearly twice as large as the three other banks combined. Banking in the Alliance-Sebring area presently
is highly concentrated. The proposed acquisition
would increase concentration and make eventual deconcentration less likely by removing Bank as a possible vehicle by which a bank not located in the market
could enter and by entrenching the existing dominance of Applicant.
Thus, we conclude that the proposed acquisition
would have an adverse effect on competition.

THE FIRST NATIONAL BANK OF MARYLAND,
Baltimore, Md., and The Sharpsburg Bank of Washington County, Sharpsburg, Md.
Banking offices
Names of banks and type of transaction

Total
assets

The Sharpsburg Bank of Washington County, Sharpsburg, Md., with
and The First National Bank of Maryland, Baltimore, Md. (1413), which had
merged May 30, 1979, under charter and title of the latter bank (1413). The merged bank at date of
merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge The Sharpsburg Bank of Washington County,
Sharpsburg, Md. ("Sharpsburg Bank"), into and under
the charter of The First National Bank of Maryland,

90


$

7,783,000
1,814,834,000
1,821,180,000

In
To be
operation operated

1
94
95

Baltimore, Md. ("FNB"). The application was filed on
February 8, 1979, and is based on a written agreement
executed by the applicant banks on November 21,
1978. As of September 30, 1978, FNB had total deposits of $1.3 billion and Sharpsburg Bank had de-

posits of $6.6 million. FNB is a wholly owned subsidiary of First Maryland Bancorp, Baltimore, Md., a
registered one-bank holding company.
Sharpsburg Bank operates a single banking office
within Sharpsburg in the southern portion of Washington County in northwestern Maryland. Of the 89 banking offices FNB now operates throughout Maryland,
seven are in the northwestern part of the state. FNB
has six banking offices within Hagerstown and one office in Hancock, all in northern Washington County.
The closest banking office of FNB to Sharpsburg
Bank's only office is approximately 20 miles. In view of
the geographic distance separating the two banks and
with offices of competing banks located in the intervening area, approval of this merger would not have
the effect of eliminating any meaningful degree of existing competition. Furthermore, although applicable
Maryland statutes allow commercial banks to branch
statewide, the Sharpsburg area is not viewed as attractive for de novo entry. Thus, the potential for the
development of increased future competition between
the two banks appears to be minimal. FNB would continue through the resulting bank as the largest commercial banking organization in Washington County
through its control of approximately 30 percent of total
county deposits. However, numerous commercial
banking alternatives would remain available throughout the county, including banking offices of larger
commercial banking organizations. Overall, this merger would not have a substantially adverse effect on
competition.

The financial and managerial resources of FNB and
Sharpsburg Bank are regarded as satisfactory, although Sharpsburg Bank has limited management
depth. The future prospects of FNB appear favorable,
and the future prospects of Sharpsburg Bank when
combined with FNB appear more favorable since the
bank's lack of management succession would be alleviated.
FNB proposes to offer new and expanded banking
services to the present customers of the Sharpsburg
Bank, including but not limited to, full trust services,
bank credit cards, individual retirement accounts,
overdraft checking and an expanded credit limit.
These facts are positive considerations on the issue of
convenience and needs.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
bank's record of helping to meet the credit needs of
the entire community, including low and moderate income neighborhoods, is less than satisfactory.
This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with the proposed merger.
April 24, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
We have reviewed this proposed transaction and conclude that it would not have a significantly adverse effect upon competition.

VIRGINIA NATIONAL BANK,
Norfolk, Va., and New Bank of Roanoke, Roanoke, Va.
Banking offices
Names of banks and type of transaction

Total
assets

New Bank of Roanoke, Roanoke, Va., with
and Virginia National Bank, Norfolk, Va. (9885), which had
merged May 31, 1979, under charter and title of the latter bank (9885). The merged bank at date of
merged had

COMPTROLLER'S DECISION
On February 8, 1979, this Office received an application filed pursuant to the Bank Merger Act, 12 USC
1828(c), from New Bank of Roanoke, Roanoke, Va.
("NBR"), and Virginia National Bank, Norfolk, Va.
("VNB"). The application is based upon a agreement
written between the banks dated December 27, 1978.
As of September 30, 1978, VNB had total deposits of
$1.9 billion, and NBR had total deposits of $10.6 million. NBR is a commercial banking subsidiary of NB
Corporation, Charlottesville, Va., a registered multibank holding company. VNB serves as the lead bank
for Virginia National Bankshares, Inc., Norfolk, the second largest registered multibank holding company in
the state.



$

8,142,000
2,403,982,000
2,411,025,000

In
To be
operation operated
3
167
170

The primary service area of VNB is considered to be
the portions of the state where it presently operates
164 banking offices. It has offices in the major geographic regions of the state including Northern Virginia, the Tidewater area, Central Virginia, Shenandoah Valley, Lynchburg-Danville-Martinsville area and
Southwest Virginia including Scott, Washington, Pulaski and Wythe Counties. The defined service area
appears to be the major banking markets of the state
with the exception of the Roanoke metropolitan area.
NBR's primary service area is approximated by the
Roanoke SMSA (including the independent cities of
Roanoke and Salem and the counties of Roanoke,
Craig and Botetourt) in general and the city of Roanoke in particular. There are 39 banking offices of
91

eight banks in the city holding deposits in excess of $1
billion. All banks in Roanoke are affiliated with bank
holding companies, and all major holding companies
with the noted exception of Virginia National Bankshares, Inc., are represented in Roanoke.
There is no significant competition between VNB
and NBR. VNB's closest banking office to Roanoke is
35 miles east in Lynchburg, and VNB derives only
about $170 thousand (0.009 percent) of its total deposits from the Roanoke banking market. NBR holds
only 1 percent of the total deposits in Roanoke, and
VNB's position in the state would be unaffected by this
merger. Consequently, the competitive effects are not
likely to substantially lessen competition in any relevant area or otherwise violate the standards found in
12 USC 1828(c)(5).
The financial and managerial resources of both VNB
and NBR are satisfactory. The future prospects of the
combined bank are good, and NBR's future prospects
are favorably enhanced by this proposal.
As a result of the merger, VNB intends to provide a
considerable number of new and expanded banking
services to the present customers of NBR, including
but not limited to, extension of VNB's existing elec-

tronic funds transfer network into southwestern Virginia, computerized customer services including payrolls, accounts receivable, accounts payable, general
ledger and related financial documents for business
and upgrading of NBR's existing physical facilities.
These facts are positive considerations on the issue of
convenience and needs. The Comptroller is not aware
of any negative factors on this issue.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
applicants' records of helping to meet the credit needs
of their communities, including low and moderate income neighborhoods, is less than satisfactory.
This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with the proposed merger.
April 25, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
We have reviewed this proposed transaction and conclude that it would not have any adverse effect upon
competition.

THE FIRST NATIONAL BANK OF SHREVEPORT,
Shreveport, La., and Caddo Trust and Savings Bank, Belcher, La.
Banking offices
Names of banks and type of transaction

Total
assets*

Caddo Trust and Savings Bank, Belcher, La., with
and The First National Bank of Shreveport, Shreveport, La. (3595), which had
merged June 1, 1979, under charter and title of the latter bank (3595). The merged bank at date of
merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge Caddo Trust and Savings Bank, Belcher, La.
("Caddo") into and under the charter of The First National Bank of Shreveport, Shreveport, La. ("FNB").
This application was filed on January 3, 1979, and is
based on a written agreement executed by the applicant banks on November 14, 1978. As of June 30,
1978, Caddo had total deposits of $20.6 million and
FNB had deposits of $437.5 million.
The relevant geographic market appears to be
Caddo Parish wherein FNB is the largest commercial
bank, and Caddo represents the ninth largest in deposit size of 11 banks in the parish. FNB operates 10
offices in the Shreveport area and one office in Vivian,
La., about 30 miles north of Shreveport. Caddo has a
total of three offices, all in northern Caddo Parish. The
closest office of Caddo to an office of FNB is its Oil
City branch, located approximately 9 miles south of
* Asset figures are as of call dates immediately before and
after transaction.
92



$ 24,427,000
603,106,000
641,339,000

In
To be
operation operated
3
14
17

Vivian. The resulting bank would continue as the largest in Caddo Parish with 34.4 percent of the total deposits within the parish. The Comptroller finds that the
proposed merger would eliminate a small amount of
existing competition but that there would remain a sufficient number of alternative sources for banking services in the relevant market. Consequently, the competitive effects are not likely to substantially lessen
competition in any relevant market or otherwise violate
the standards found in 12 USC 1828(c)(5).
The financial and managerial resources of FNB are
satisfactory. While Caddo's present condition is satisfactory, its ability to attract successor management
and provide expanded financial services is limited. Accordingly, its financial and managerial resources are
considered somewhat less than satisfactory. Additionally, its future prospects are limited in view of the stable and sparsely populated northern Caddo parish
market within which it operates. The future prospects
of the combined bank are considered good.
As a result of the merger, FNB intends to make available new and expanded banking services to the
present customers of Caddo, including but not limited

to, 24-hour automatic teller machines, bank credit
cards, additional expertise in agricultural and petroleum lending, more aggressive consumer loan department, trust services, individual retirement accounts,
wire transfer, and automation of Caddo's accounts.
These facts are positive considerations on the issue of
convenience and needs. The Comptroller is not aware
of any negative factors in this issue.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
applicants' records of helping to meet credit needs of
the communities, including low and moderate income
neighborhoods, is less than satisfactory.
This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for
the applicant to proceed with the proposed merger.
May 1, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
All three of Bank's offices are located in northern

Caddo Parish, in small communities situated from 15
to 25 miles north of Shreveport. The closest offices of
the parties (Applicant's office in Vivian and Bank's office in Oil City) are approximately 8 miles apart, and
according to the application, only one other bank operates in the northern portion of Caddo Parish. It therefore appears that the proposed acquisition would eliminate existing competition between Applicant and
Bank.
Banking is highly concentrated in Caddo Parish. As
of June 30, 1978, the four largest banks in the parish
together held approximately 85 percent of the total deposits held by the 11 banks presently operating there.
Applicant is the largest bank in the parish with about
33 percent of the parish's bank deposits, and Bank is
the ninth largest with about 1.5 percent. The proposed
acquisition, therefore, would increase the Applicant's
dominance in the parish and the high level of banking
concentration there.
We conclude that the proposed acquisition would
have an adverse effect on competition.

SUN FIRST NATIONAL BANK OF MELBOURNE,
Melbourne, Fla., and Sun Bank of Cocoa, National Association, Cocoa, Fla.
Banking offices
Names of banks and type of transaction

Total
assets*

Sun Bank of Cocoa, National Association, Cocoa, Fla. (14806), with
and Sun First National Bank of Melbourne, Melbourne, Fla. (16107), which had
merged June 1, 1979, under charter of the latter bank (16107) and title "Sun First National Bank of
Brevard County." The merged bank at date of merger had

COMPTROLLER'S DECISION
Pursuant to the statutory requirements of the Bank
Merger Act (12 USC 1828(c)), an application has been
filed with the Office of the Comptroller of the Currency
that seeks and requires the prior written permission of
this Office to effectuate the proposed merger of Sun
Bank of Cocoa, National Association, Cocoa, Fla.
("Merging Bank"), into Sun First National Bank of Melbourne, Melbourne, Fla. ("Charter Bank"), under the
charter of Sun First National Bank of Melbourne and
with the title of "Sun First National Bank of Brevard
County." This application is based on an agreement
executed between the proponent banks and is incorporated herein by reference, the same as if fully set
forth.
Merging Bank was granted National Banking Association charter number 14806 by this Office on February 14, 1957. As of September 30, 1978, Merging
Bank had total deposits of $41.2 million.
Charter Bank, operating under National Banking Association charter number 16107, was chartered by this
Office on April 5, 1973. As of September 30, 1978,
Charter Bank's total deposits were $52.2 million.



$ 46,957,000
62,801,000
115,366,000

In
To be
operation operated
4
6
10

Both Merging Bank and Charter Bank are commercial banking subsidiaries of Sun Banks of Florida, Inc.,
Orlando, Fla., a registered multibank holding company
that controlled 21 subsidiary banks with consolidated
deposits of $1.8 billion on December 31, 1977. Accordingly, given the element of common ownership
and control existent between the proponents, this application must be regarded essentially as a corporate
reorganization whereby the bank holding company is
realigning and consolidating a portion of its banking
interests in Brevard County.
This application was filed prior to the November 6,
1978, effective date of the Comptroller's Community
Reinvestment Act regulations, 12 CFR 25.
However, pursuant to the Community Reinvestment
Act, Public Law No. 95-128, available information relevant to the banks' records of meeting their community
credit needs was reviewed, revealing no evidence to
suggest that the applicants are not meeting the credit

* Asset figures are as of call dates immediately before and
after transaction.
93

needs of their community, including low and moderate
income neighborhoods.
Accordingly, applying the statutory criteria, this Office concludes that this application is not adverse to
the public interest and should be, and hereby is, approved.
February 27, 1979

SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are both wholly owned subsidiaries of the same bank holding company. As such
their proposed merger is essentially a corporate reorganization and would have no effect on competition.

FIRST NATIONAL BANK OF MERCER COUNTY,
Celina, Ohio, and The Home Banking Company, St. Marys, Ohio
Banking offices
Names of banks and type of transaction

Total
assets

COMPTROLLER'S DECISION
This is the Comptroller's decision on the application to
merge The Home Banking Company, St. Marys, Ohio
("Home"), into First National Bank of Mercer County,
Celina, Ohio ("FNB"). This application is part of a
process whereby The Central Bancorporation, Inc.,
Cincinnati, Ohio ("Central"), a registered multibank
holding company, is realigning and consolidating a
portion of its banking interests.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
applicants' records of helping to meet the credit needs
of their communities, including low and moderate income neighborhoods, is less than satisfactory.
Home has deposits of $37 million, and FNB has deposits of $79 million. Both banks are subsidiaries if
Central, and, therefore, the merger does not raise


94


$ 44,231,000
91,413.000
135,644,000

CO CD

The Home Banking Company, St. Marys, Ohio, with
....
and First National Bank of Mercer County, Celina, Ohio (5523), which had
merged June 29, 1979, under charter of the latter bank (5523) and title "The Central Trust
Company of Western Ohio, National Association." The merged bank at date of merger had

In
To be
operation operated

9

competitive issues under the Bank Merger Act, 12
USC 1828(c). Additionally, a review of the financial
and managerial resources and future prospects of the
existing and proposed institutions and the convenience and needs of the community to be served has
disclosed no reason why this application should not be
approved.
This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with the proposed merger.
April 2, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are all wholly owned subsidiaries
of the same bank holding company. As such, the proposed mergers are essentially corporate reorganizations and would have no effect on competition.

THE OHIO NATIONAL BANK OF COLUMBUS,
Columbus, Ohio, and Akron National Bank, Akron, Ohio, The Capital National Bank, Cleveland, Ohio, The First National Bank of Springfield, Springfield, Ohio, The First National Bank of Newark, Newark, Ohio, First National Bank of
Coshocton, Coshocton, Ohio, The First National Bank of Chillicothe, Chillicothe, Ohio, The Western Security Bank,
Sandusky, Ohio, The Citizens National Bank in Zanesville, Zanesville, Ohio, The Niles Bank Company, Niles, Ohio,
The First National Bank of Delaware, Delaware, Ohio, The First National Bank of Jackson, Jackson, Ohio, The National Bank of Portsmouth, Portsmouth, Ohio, The Central National Bank at Cambridge, Cambridge, Ohio, The
Hocking Valley National Bank of Lancaster, Lancaster, Ohio, The Ohio Bank and Trust Company, New Philadelphia,
Ohio, The Citizens National Bank of Ironton, Ironton, Ohio, The Medina County Bank, Medina, Ohio, The First National Bank of Cadiz, Cadiz, Ohio, The First National Bank of Tiffin, Tiffin, Ohio, The Knox County Savings Bank,
Mount Vernon, Ohio, The Community Bank, Napoleon, Ohio, The Farmers and Merchants Bank of Logan, Logan,
Ohio, The First National Bank of Marysville, Marysville, Ohio, The First National Bank of London, London, Ohio, The
First National Bank of Washington Court House, Washington Court House, Ohio, The Kenton Savings Bank, Kenton,
Ohio, National Bank of Loveland, Loveland, Ohio, The Perry County Bank, New Lexington, Ohio, The First National
Bank of Wilmington, Wilmington, Ohio, The Second National Bank of Circleville, Circleville, Ohio, The Cummings
Bank Company, Carrollton, Ohio, The Citizens Banking Company, Perrysburg, Ohio, The Peoples National Bank of
Greenfield, Greenfield, Ohio, The Logan County Bank, Bellefontaine, Ohio, The Peoples Savings Bank Company,
Delta, Ohio, The Ohio State Bank of Dayton, Dayton, Ohio, The Geauga County National Bank of Chardon, Chardon, Ohio, The Adams Bank, Millersburg, Ohio, The First National Bank at East Palestine, East Palestine, Ohio
Banking offices
Names of banks and type of transaction

Total
assets

Akron National Bank, Akron, Ohio (15609), with
and The First National Bank of Cadiz, Cadiz, Ohio (100), with
and The Central National Bank at Cambridge, Cambridge, Ohio (13905), with
and The Geauga County National Bank of Chardon, Chardon, Ohio (14879), with
and The First National Bank of Chillicothe, Chillicothe, Ohio (128), with
and The Second National Bank of Circleville, Circleville, Ohio (172), with
and The Capital National Bank, Cleveland, Ohio (15423), with
and First National Bank of Coshocton, Coshocton, Ohio (6892), with
and The First National Bank of Delaware, Delaware, Ohio (243), with
and The First National Bank at East Palestine, East Palestine, Ohio (13850), with
and The Peoples National Bank of Greenfield, Greenfield, Ohio (10105), with
and The Citizens National Bank of Ironton, Ironton, Ohio (4336), with
and The First National Bank of Jackson, Jackson, Ohio (1903), with
and The Hocking Valley National Bank of Lancaster, Lancaster, Ohio (1241), with
and The First National Bank of London, London, Ohio (1064), with
and National Bank of Loveland, Loveland, Ohio (15945), with
and The First National Bank of Marysville, Marysville, Ohio (14360), with
and The First National Bank of Newark, Newark, Ohio (858), with
and The National Bank of Portsmouth, Portsmouth, Ohio (13832), with
and The First National Bank of Springfield, Springfield, Ohio (238), with
and The First National Bank of Tiffin, Tiffin, Ohio (3315), with
and The First National Bank of Washington Court House, Washington Court House, Ohio (13490),
with
and The First National Bank of Wilmington, Wilmington, Ohio (365), with
and The Citizens National Bank in Zanesville, Zanesville, Ohio (5760), with
and The Logan County Bank, Bellefontaine, Ohio, with
and The Cummings Bank Company, Carrollton, Ohio, with
and The Ohio State Bank of Dayton, Dayton, Ohio/with
and The Peoples Sayings Bank Company, Delta, Ohio, with
and The Kenton Savings Bank, Kenton, Ohio, with
and The Farmers and Merchants Bank of Logan, Logan, Ohio, with
and The Medina County Bank, Medina, Ohio, with
and The Adams Bank, Millersburg, Ohio, with
and The Knox County Savings Bank, Mount Vernon, Ohio, with
and The Community Bank, Napoleon, Ohio, with
and The Perry County Bank, New Lexington, Ohio, with
and The Ohio Bank and Trust Company, New Philadelphia, Ohio, with
and The Niles Bank Company, Niles, Ohio, with
and The Citizens Banking Company, Perrysburg, Ohio, with
and The Western Security Bank, Sandusky, Ohio, with
and The Ohio National Bank of Columbus, Columbus, Ohio (5065), which had
merged June 29, 1979, under charter of the latter bank (5065) and title "BancOhio National Bank."
The merged bank at date of merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on the application to
merge 39 sister banks ("Merging Bank"), into The Ohio
National Bank of Columbus, Columbus, Ohio ("Charter
Bank"). This application is one part of a process
whereby BancOhio Corporation, Columbus, Ohio, a



In
To be
operation operated

$ 469,814,000
44,731,000
67,170,000
23,718,000
88,343,000
33,881,000
202,207,000
89,464,000
72,499,000
22,194,000
28,511,000
46,540,000
71,347,000
64,377,000
39,409,000
36,576,000
40,608,000
116,140,000
69,553,000
135,536,000
43,042,000

25
1
6
3
4
2
16
2
4
3
3
5
2
5
2
6
2
9
5
7
3

39,096,000
34,973,000
80,003,000
25,572,000
32,787,000
25,115,000
25,464,000
36,603,000
41,611,000
45,224,000
22,542,000
43,016,000
41,660,000
35,911,000
49,682,000
76,885,000
31,217,000
82,006,000
1,686,722,000

3
3
3
4
3
3
3
4
2
6
3
2
3
2
4
5
3
5
45

4,261,749,000

221

registered multibank holding company is realigning
and consolidating its banking interests throughout the
state.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
95

applicants' records of helping to meet the credit needs
of their communities, including low and moderate income neighborhoods, is less than satisfactory.
In consideration of the element of common ownership and control existent among the proponents, this
proposal is regarded as a corporate reorganization. As
such, it presents no competitive issues under the Bank
Merger Act, 12 USC 1828(c). Additionally, a review of
the financial and managerial resources and future
prospects of the existing and proposed institutions,
and the convenience and needs of the communities to
be served has disclosed no reason why this application should not be approved.

This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with the proposed merger.
April 6, 1979

SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are all subsidiaries of the same
bank holding company. As such, the proposed merger
is essentially a corporate reorganization and would
have no effect on competition.

THE CENTRAL NATIONAL BANK OF RICHMOND,
Richmond, Va., and Fidelity American Bank, NA, Richmond, Henrico County, Va., and Cavalier Central Bank & Trust
Company, Hopewell, Va.
Banking offices
Names of banks and type of transaction

Total
assets

Fidelity American Bank, NA, Richmond, Henrico County, Va. (15315), with
and Cavalier Central Bank & Trust Company, Hopewell, Va., with
and The Central National Bank of Richmond, Richmond, Va. (10080), which had
merged June 30, 1979, under charter and title of the latter bank (10080). The merged bank at date
of merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge Fidelity American Bank, NA, Richmond, Henrico
County, Va. ("Henrico Bank"), and Cavalier Central
Bank & Trust Company, Hopewell, Va. ("Hopewell
Bank"), into and under the charter of The Central National Bank of Richmond, Richmond, Va. ("Richmond
Bank'1). The application was filed on March 30, 1979,
and is based on a written agreement executed by the
applicant banks on February 12, 1979.
Hopewell Bank is a state-chartered bank that had total deposits of $8.7 million as of December 31, 1978.
Richmond Bank and Henrico Bank are both national
banks that had total deposits of $350.5 million and
$15.1 million, respectively, as of December 31, 1978.
All three banks are wholly owned and controlled by
Commonwealth Banks, Inc., Richmond, registered
bank holding company. Therefore, this is merely an
application for a corporate reorganization. As such, it
presents no competitive issues under the Bank Merger
Act, 12 USC 1828(c). Additionally, a review of the fi-


96


$ 15,483,000
10,351,000
410,687,000
436,101,000

In
To be
operation operated
20
2
4
26

nancial and managerial resources and future prospects of the existing and proposed institutions and the
convenience and needs of the community to be
served has disclosed no reason why this application
should not be approved. (See 12 USC 1842(c)(21)).
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
banks' records of helping to meet the credit needs of
their communities, including low and moderate income
neighborhoods, is less than satisfactory.
This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with the proposed merger.
May 31, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are all wholly owned subsidiaries
of the same bank holding company. As such, their proposed merger is essentially a corporate reorganization
and would have no effect on competition.

FIRST & MERCHANTS NATIONAL BANK,
Richmond, Va., and The First National Bank of Danville, Danville, Va.
Banking offices
Names of banks and type of transaction

Total
assets*

The First National Bank of Danville, Danville, Va. (1985), with
and First & Merchants National Bank, Richmond, Va. (1111), which had
merged June 30, 1979, under charter and title of the latter bank (1111). The merged bank at date of
merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge The First National Bank of Danville, Danville, Va.
("Danville Bank"), into and under the charter of First &
Merchants National Bank, Richmond, Va. ("Richmond
Bank"). The application was filed on April 5, 1979, and
is based on a written agreement executed by the applicant banks on January 24, 1979.
Richmond Bank and Danville Bank are both national
banks that had total deposits of $1.5 billion and $85
million, respectively, as of December 31, 1978.
Both banks are wholly owned and controlled by First
and Merchants Corporation, Richmond, a registered
bank holding company. Therefore, this is merely an
application for a corporate reorganization. As such, it
presents no competitive issues under the Bank Merger
Act, 12 USC 1828(c). Additionally, a review of the financial and managerial resources and future prospects of the existing and proposed institutions and the
convenience and needs of the community to be
served has disclosed no reason why this application
should not be approved. (See 12 USC 1842(c)(21)).

$ 107,989,000
1,897,005,000

In
To be
operation operated

6
92

2,116,992,000

98

A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
banks' records of helping to meet the credit needs of
their communities, including low and moderate income
neighborhoods, is less than satisfactory.
This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with the proposed merger.
May 25, 1979

SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are both wholly owned subsidiaries of the same bank holding company. As such,
their proposed merger is essentially a corporate reorganization and would have no effect on competition.

* Asset figures are as of call dates immediately before and
after transaction.

NATIONAL COMMUNITY BANK OF NEW JERSEY,
Rutherford, N.J., and Arcadia National Bank, Secaucus, N.J.
Banking offices
Names of banks and type of transaction

Total
assets

Arcadia National Bank, Secaucus, N.J. (16267), with
and National Community Bank of New Jersey, Rutherford, N.J. (5005), which had
merged June 30, 1979, under charter and title of the latter bank (5005). The merged bank at date of
merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge Arcadia National Bank, Secaucus, N.J. ("Secaucus Bank"), into and under the charter of National
Community Bank of New Jersey, Rutherford, N.J.
("Rutherford Bank"). The application was filed on April
10, 1979, and is based on a written agreement executed by the applicant banks on March 28, 1979. As of
December 31, 1978, Rutherford Bank had total deposits of $796.5 million, and Secaucus Bank had deposits of $18.9 million.
Rutherford Bank operates 48 banking offices in the
northern portion of New Jersey: 26 in Bergen County,



$ 22,484,000
953,304,000
976,705,000

In
To be
operation operated

1
49
50

including its main office; 13 in Morris County, seven in
Sussex County and one in both Passaic and Warren
Counties. Secaucus Bank operates a single banking
office within the town of Secaucus in Hudson County.
(An approved but unopened branch office is also
planned for Secaucus.) The main office of Rutherford
Bank is approximately 4 miles from Secaucus Bank.
The closest branch office of Rutherford Bank to Secaucus Bank's only office is some 3 miles distant in
contiguous Bergen County. Within the intervening area
between these closest offices is situated the Hackensack River, a natural geographic barrier, which effectively separates the market areas of the two banks. As
97

a result, Rutherford Bank and Secaucus Bank each
serve distinct service areas and compete with numerous other commercial banking alternatives. Furthermore, Secaucus Bank is subject to the competitive
banking alternatives. Furthermore, Secaucus Bank is
subject to the competitive impact of banking offices of
substantially larger commercial banking organizations
in its service area.
In 1974, Secaucus Bank was chartered as a national
bank and commenced operations as an affiliate of
Rutherford Bank with all voting stock of the new bank
being offered to and purchased by the stockholders of
Rutherford Bank.
The two banks also share the same board of directors and have common management personnel, and
Secaucus Bank continues to qualify as an affiliate of
Rutherford Bank as defined by 12 USC 221 (a). The
likelihood of increased future competition between the
proponent banks appears remote. Accordingly, we
find that approval of this application would have no adverse effect on competition.
The financial and managerial resources of both
Rutherford Bank and Secaucus Bank are satisfactory.
The future prospects of the two banks, independently
and in combination, appear favorable.
After consummation of this merger, the additional

capabilities of Rutherford Bank, through the resulting
bank, will be made available to the present customers
of Secaucus Bank in such areas as international banking, full trust services, electronic data processing and
a substantially larger legal lending limit. Accordingly,
the banking public would be better served as a result
of this proposal.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
bank's record of helping to meet the credit needs of
the entire community including low and moderate income neighborhoods is less than satisfactory.
This merger may not be consummated until proof of
compliance with 12 USC 215a(2) is submitted.
This decision is the prior written approval required
by the Bank Merger Act 12 USC 1828(c), in order for
the applicants to proceed with the proposed transac-.
tion.
May 31, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
We have reviewed this proposed transaction and conclude that it would not have a substantial competitive
impact.

SOUTHEAST FIRST NATIONAL BANK OF MIAMI,
Miami, Fla., and Southeast First National Bank of Miami Springs, Miami Springs, Fla., and Southeast National Bank
of Coral Way, Miami, Fla., and Southeast Bank of Dadeland, Unincorporated Area of Dade County, Fla., and Southeast National Bank of Tamiami, Unincorporated Areas of Dade County, Fla., and Southeast Bank of Westland,
Hialeah, Fla.
Names of banks and type of transaction

Total
assets

Southeast National Bank of Coral Way, Miami (15568), with
and Southeast Bank of Dadeland, Unincorporated Area of Dade County, Fla., with
and Southeast First National Bank of Miami Springs, Miami Springs, Fla. (14707), with
and Southeast National Bank of Tamiami, Unincorporated Area of Dade County, Fla. (16480), with. .
and Southeast Bank of Westland, Hialeah, Fla., with
and Southeast First National Bank of Miami, Miami, Fla. (15638), which had
merged July 1, 1979, under charter and title of the latter bank (15638). The merged bank at date of
merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on the application to
merge five sister banks ("Merging Banks"), into Southeast First National Bank of Miami, Miami, Fla.
("SFNB"). This application is one part of a process
whereby Southeast Banking Corporation, Miami, Fla.
("Southeast"), a registered multibank holding company, is realigning and consolidating a portion of its
banking interests in the Dade County area.

98


$ 116,936,000
54,842,000
122,732,000
17,562,000
17,491,000
2,180,175,000
2,509,738,000

Banking offices
In
To be
operation operated
3
1
1
1
1
3
10

A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
applicants' record of helping to meet the credit needs
of their entire community, including low and moderate
income neighborhoods, is less than satisfactory.
In consideration of the element of common ownership and control existent among the proponents, this
proposal is regarded as a corporate reorganization,

and as such, would produce no adverse effect upon
any relevant area of consideration.
This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with the proposed merger.
March 30, 1979

SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are all wholly owned subsidiaries
of the same bank holding company. As such, their proposed merger is essentially a corporate reorganization
and would have no effect on competition.

THE FARMERS NATIONAL BANK OF CYNTHIANA,
Cynthiana, Ky., and Union Bank of Berry, Berry, Ky.
Banking offices
Names of banks and type of transaction

Total
assets*

Union Bank of Berry, Berry, Ky., with
was purchased July 2, 1979, by The Farmers National Bank of Cynthiana, Cynthiana, Ky. (2560),
which had
After the purchase was effected, the receiving bank had

COMPTROLLER'S DECISION
This is the Comptroller's decision on the application of
The Farmers National Bank of Cynthiana, Cynthiana,
Ky. ("FNB"), to purchase the assets and assume the liabilities of Union Bank of-Berry, Berry, Ky. ("Union
Bank"). The application was filed on February 22,
1979, and is based on a written agreement executed
by the applicant banks on October 6, 1978. As of December 31, 1978, FNB had total deposits of $26.1 million, and Union Bank had deposits of $3.9 million.
FNB operates a main office, one branch office and a
limited service drive-in facility within the City of Cynthiana, the county seat of Harrison County. Union Bank
operates its single banking office within the City of
Berry, which is approximately 13 miles to the northwest
of Cynthiana in rural Harrison County. Union Bank's
service area is predominantly agricultural, but with a
relatively static economy, Union Bank has a history of
minimal overall growth. As a result, Union Bank ranks
as the smallest of the four commercial banks operating
in Harrison County with only 5 percent of total county
deposits. FNB would continue through the resulting
bank as the second largest bank in Harrison County
with approximately 36 percent of total county deposits
while the largest bank, also headquartered in Cynthiana, would control some 47 percent.
Applicable state banking statutes would permit de
novo branch expansion by these banks within Harrison
County. However, neither could establish a branch in
the home office community of the other due to home
office protection. Union Bank applied for a branch office north of the city limits of Cynthiana, but in November 1977, the state banking commissioner declined
the application citing the small size of Union Bank.
Conversely, the population of the Berry area is not




In
To be
operation operated

$ 4,485,000
29,551,000
33,085,000

large enough to support another bank's office without
seriously threatening the viability of Union Bank. Accordingly, we find that approval of this application
would have no significant adverse effect on competition.
The financial and managerial resources of both FNB
and Union Bank are regarded as satisfactory. The future prospects of the two banks independently are
good but in combination are favorably enhanced.
As a result of this proposal, FNB intends to offer new
and expanded banking services to customers of Union
Bank, including, but not limited to, full trust services,
bank credit cards, individual retirement accounts and
an increased credit limit. These services will provide
greater convenience and fill needs that are not being
filled by Union Bank.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
banks' records of helping to meet the credit needs of
the communities, including low and moderate income
neighborhoods, is less than satisfactory.
This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with the proposed transaction.

May 31, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
We have reviewed this proposed transaction and conclude that it would not have a substantially adverse effect upon competition.

* Assets are as of call dates before and after transaction.

99

THE FIRST NATIONAL BANK OF FARMVILLE,
Farmville, Va., and The Bank of Buckingham, Dillwyn, Va.
Banking offices
Names of banks and type of transaction

Total
assets

The Bank of Buckingham, Dillwyn, Va., with
and The First National Bank of Farmville, Farmville, Va. (5683), which had
merged July 2, 1979, under charter and title of the latter bank (5683). The merged bank at date of
merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge The Bank of Buckingham, Dillwyn, Va. ("Dillwyn
Bank"), into and under the charter of The First National
Bank of Farmville, Farmville, Va. ("Farmville Bank").
The application was filed on February 1, 1979, and is
based on a written agreement executed by the applicant banks on October 25, 1978.
Farmville Bank received its charter as a national
bank on January 18, 1901, and had total deposits of
$44.1 million as of September 30, 1978. Farmville Bank
presently operates its main office and four branch offices within Prince Edward County.
Dillwyn Bank was chartered as a state bank in 1972,
had total deposits of $6.6 million as of September 30,
1978 and operates two banking offices within Buckingham County.
Farmville Bank and Dillwyn Bank, whose closest offices are 20 miles apart, each serve distinct service
areas. Several commercial banking alternatives, including branch offices of substantially larger banks,
are located near offices of both Farmville Bank and
Dillwyn Bank. This merger will not alter Farmville
Bank's position in the combined market area of Prince
Edward and Cumberland Counties, since the resulting
bank will rank fifth among the six banking organizations in this area. Moreover, Dillwyn Bank was organized and has been operating under the general supervision of the management of Farmville Bank.
Accordingly, we find that approval of this application
would have no adverse effect on competition.

In
To be
operation operated

$ 8,842,000
52,163,000

61,005,000

The financial and managerial resources of both
Farmville Bank and Dillwyn Bank are regarded as satisfactory. The future prospects of the two banks independently are good, but in combination are favorably
enhanced.
As a result of this merger, Farmville Bank intends to
offer new and expanded banking services to the
present customers of Dillwyn Bank; these services include full trust services and a larger legal lending limit.
Considerations relative to convenience and needs
benefits are consistent with approval of this application.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
banks' records of helping to meet the credit needs of
the communities, including low and moderate income
neighborhoods, is less than satisfactory.
This opinion is the prior written approval required by
the Bank Merger Act, 12 USC 1828(c), in order for the
applicants to merge under their previously referenced
agreement.
May 22, 1979

SUMMARY OF REPORT BY ATTORNEY GENERAL
We have reviewed this proposed transaction and conclude that it would not have any significant effect on
competition.

NATIONAL BANK AND TRUST COMPANY,
Charlottesville, Va., and New Bank of Culpeper, Culpeper, Va.
Banking offices
Total
assets

Names of banks and type of transaction

New Bank of Culpeper, Va., with
and National Bank and Trust Company, Charlottesville, Va. (10618), which had
merged July 2, 1979, under charter and title of the latter bank (10618). The merged bank at date of
merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge New Bank of Culpeper, Culpeper, Va. ("Culpeper Bank"), into and under the charter of National

100


$

9,178,442
275,415,305
284,593,747

In
To be
operation operated
3
25
28

Bank and Trust Company, Charlottesville, Va.
("Charlottesville Bank"). The application was filed on
May 1, 1979, and is based on a written agreement executed by the applicant banks on April 10, 1979.

Charlottesville Bank is a national bank that had total
deposits of $246.7 million as of December 31, 1978.
Culpeper Bank, a state-chartered bank, had deposits
of $7.4 million as of December 31, 1978.
Both banks are wholly owned and controlled by NB
Corporation, Charlottesville, a registered bank holding
company. Therefore, this is merely an application for a
corporate reorganization. As such, it presents no competitive issues under the Bank Merger Act, 12 USC
1828(c). Additionally, a review of the financial and
managerial resources and future prospects of the existing and proposed institutions and the convenience
and needs of the community to be served has disclosed no reason why this application should not be
approved.
A review of the record of this application and other

information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
banks' records of helping to meet credit needs of the
communities, including low and moderate income
neighborhoods, is less than satisfactory.
This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with the proposed merger.

May 31, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are both wholly owned subsidiaries of the same bank holding company. As such,
their proposed merger is essentially a corporate reorganization and would have no effect on competition.

WELLS FARGO BANK, NATIONAL ASSOCIATION,
San Francisco, Calif., and First Central Coast Bank, San Luis Obispo, Calif.
Banking offices
Names of banks and type of transaction

Total
assets

First Central Coast Bank, San Luis Obispo, Calif., with
and Wells Fargo Bank, National Association, San Francisco, Calif. (15660), which had
merged July 14, 1979, under charter and title of the latter bank (15660). The merged bank at date
of merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge First Central Coast Bank, San Luis Obispo, Calif. ("First") into and under the charter of Wells Fargo
Bank, National Association, San Francisco, Calif.
("Wells"). This application was accepted for filing by
this Office on February 27, 1979, and is based on an
agreement executed between the proponents on September 27, 1978. As of September 30, 1978, Wells had
total deposits of $14.1 billion, and First's deposits were
$37.5 million. Wells is a wholly owned commercial
banking subsidiary of Wells Fargo & Company, a registered bank holding company.
The narrowest geographic market appears to be
San Luis Obispo County, situated along the Pacific
Coast, about midway between Los Angeles and San
Francisco. First maintains five offices, all in San Luis
Obispo County, where it ranks as the fifth largest bank
controlling 8.6 percent of total deposits. Wells, which
could branch in San Luis Obispo County, is not currently represented there. There is no meaningful competition existing between the participating institutions
because their nearest offices, which operate in different banking markets, are approximately 35 miles
apart. The county is dominated by Bank of America
which has 49 percent of total county deposits. Bank of
America also dominates the state with Wells ranking as
a distant third. Wells competes vigorously with Bank of



$

44,541,000
16,605,829,000
16,656,462,000

In
To be
operation operated
5
385

390

America throughout the state. This type of competition
is not now present in San Luis Obispo County. Wells'
entry into this county by acquiring the fifth largest bank
will promote this type of competition without raising
dangers of oligopolistic behavior. This type of merger
would not change Wells' ranking in the state. Accordingly, approval of this application would not substantially lessen competition in any relevant market or otherwise violate the standards found in 12 USC
1828(c)(5).
As required under 12 USC 1828(c)(5), the Comptroller considered the financial and managerial resources
and found that they are satisfactory for Wells. The financial and managerial resources of First are generally satisfactory; except that there is now no clearly
identifiable management succession. The future prospects of the combined institution are good and considerably better than those of First.
As a result of this merger, Wells will be in a position
to expand the banking services currently available to
the San Luis Obispo banking public. Additional banking services not currently available through First that
will become available through Wells include investment advisory, trust and international services. Also,
service expansion would occur in personal residential
term real estate loan funding, larger lending limit and
bank credit cards. These facts are positive considerations, and the Comptroller is not aware of any nega101

tive factors bearing on convenience and needs considerations.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
applicants' record of helping to meet credit needs of
their communities, including low and moderate income
neighborhoods, is less than satisfactory.
This decision is the prior written approval required

by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with the proposed merger.
June 14, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
We have reviewed this proposed transaction and conclude that it would not have a significantly adverse effect upon competition.

SOCIETY NATIONAL BANK OF CLEVELAND,
Cleveland, Ohio, and Society Bank of Painesville, Ohio
Banking offices
Names of banks and type of transaction

Total
assets

Society Bank of Painesville, Painesville, Ohio, with
and Society National Bank of Cleveland, Cleveland, Ohio (14761), which had
merged July 30, 1979, under charter and title of the latter bank. The merged bank at date of merger
had

COMPTROLLER'S DECISION
This is the Comptroller's decision on the application to
merge Society Bank of Painesville, Painesville, Ohio,
into Society National Bank of Cleveland, Cleveland,
Ohio. Both banks are subsidiaries of Society Corporation, Cleveland, Ohio, registered multibank holding
company. This application is one part of a process
whereby Society Corporation will realign and consolidate a portion of its banking interests throughout the
state.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
applicants' records of helping to meet the entire community credit needs, including those of low and moderate income neighborhoods, is less than satisfactory.
Because of the common ownership and control of
the proponents, this proposal is solely a corporate re-

$

52,747,000
1,495,576,000
1,542,964,000

In
operation

To be
operated

6
81
87

organization. As such, it presents no competitive issues under the Bank Merger Act, 12 USC 1828(c). Additionally, a review of the financial and managerial
resources and future prospects of the existing and
proposed institutions and the convenience and needs
of the community to be served has disclosed no reason why this application should not be approved.
This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with the proposed merger.
June 29, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are both wholly owned subsidiaries of the same bank holding company. As such,
their proposed merger is essentially a corporate reorganization and would have no effect on competition.

HERITAGE BANK, N.A.—FLUSHING,
Flushing, Ohio, and The Eastern Ohio Bank, Union Township, Ohio
Banking offices
Names of banks and type of transaction

Total
assets*

The Eastern Ohio Bank, Union Township, Ohio, with
and Heritage Bank, N.A.—Flushing, Flushing, Ohio (12008), which had
merged August 27, 1979, under charter and title of the latter bank (12008). The merged bank at
date of merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on the application to
merge The Eastern Ohio Bank, Union Township, Ohio,
into Heritage Bank, N.A.—Flushing, Flushing, Ohio.
* Asset figures are as of call dates immediately before and
after transaction.

102


In
To be
operation operated

$14,013,000
20,681,000
28,525,000

Both banks are subsidiaries of Heritage Bancorporation. This application is part of a process whereby Heritage will realign and consolidate its banking interests
in the Flushing area.
Because of the common ownership and control of
the proponents, this proposal is merely a corporate reorganization. As such, it presents no competitive is-

sues under the Bank Merger Act, 12 USC 1828(c). Additionally, a review of the financial and managerial
resources and future prospects of the existing and
proposed institutions and the convenience and needs
of the community to be served has disclosed no reason why this application should not be approved.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
applicants' records of helping to meet the community
credit needs, including those of low and moderate income neighborhoods, is less than satisfactory.

This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with the proposed merger.
July 27, 1979

SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are both wholly owned subsidiaries of the same bank holding company. As such,
their proposed merger is essentially a corporate reorganization and would have no effect on competition.

THE PLANTERS NATIONAL BANK AND TRUST COMPANY,
Rocky Mount, N.C., and Liberty Bank & Trust Company, Durham, N.C.
Banking offices
Names of banks and type of transaction

Total
assets*

Liberty Bank & Trust Company, Durham, N.C, with
was purchased August 31, 1979, by The Planters National Bank and Trust Company, Rocky Mount,
N.C. (10608), which had
After the purchase was effected, the receiving bank had

COMPTROLLER'S DECISION
This is the Comptroller's decision on the application of
The Planters National Bank and Trust Company, Rocky
Mount, N.C. ("Planters Bank"), to purchase the assets
and assume the liabilities of Liberty Bank & Trust Company, Durham, N.C. ("Liberty Bank"). The application
was filed on May 7, 1979, and is based on a written
agreement executed by the applicant banks on February 21, 1979. As of December 31, 1978, Planters Bank
had total deposits of $286.7 million, and Liberty Bank
had deposits of $13.7 million.
Planters Bank currently operates a main office and
34 branch offices, most of which are in the northeastern part of the state. Liberty Bank operates a main office and three branch offices in Durham in northcentral North Carolina. The main offices of the two
banks are some 65 miles apart, and the closest offices
of Planters Bank to Liberty Bank are approximately 20
miles distant in Raleigh, N.C. In view of the geographic
distance separating the proponent banks and with numerous offices of competing commercial banks located in the intervening area, it is concluded that this
acquisition would not eliminate any existing competition between Planters Bank and Liberty Bank.
North Carolina State Banking statutes allow statewide ate novo branch expansion by commercial banks.
Thus, either of the two banks could branch into the
areas served by the other. Liberty Bank has shown no
desire to expand outside Durham, and it does not appear likely that the bank would employ ate novo expansion into any area currently served by Planters Bank.
The likelihood that Planters Bank would enter the Durham area appears remote inasmuch as this market
presently has nine commercial banks operating 52 offices, among which are the five largest banks in the




In
To be
operation operated

$ 16,224,000

4

314,810,000
350,798,000

35

39

state. Accordingly, the potential for future competition
between the proponent banks is minimal. Approval of
this application would not have a substantially adverse
effect on competition.
The financial and managerial resources of both
Planters Bank and Liberty Bank are satisfactory. The
future prospects of the two banks, independently and
in combination, appear favorable.
After consummation of this transaction, the additional capabilities of Planters Bank through the resulting bank will be made available to the present customers of Liberty Bank in such areas as full trust
services and a substantially larger legal lending limit.
Considerations relative to convenience and needs
benefits are consistent with approval of this application.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
banks' records of helping to meet the credit needs of
the communities, including low and moderate income
neighborhoods, is less than satisfactory.
This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with the proposed transaction.
July 23, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
We have reviewed this proposed transaction and conclude that it.would not have a significantly adverse effect upon competition.
* Assets are as of call dates immediately before and after
transaction.

103

THE NATIONAL BANK OF SOUTH CAROLINA,
Sumter, S.C, and Bank of North Charleston, North Charleston, S.C.
Banking offices
Names of banks and type of transaction

Total
assets*

Bank of North Charleston, North Charleston, S.C, with
was purchased September 14, 1979, by The National Bank of South Carolina, Sumter, S.C.
(10660), which had
After the purchase was effected, the receiving bank had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application of
The National Bank of South Carolina, Sumter, S.C.
("Sumter"), to purchase the assets and assume the liabilities of the Bank of North Charleston, North Charleston. S.C. ("North Bank"). This application was accepted for filing on July 13, 1979, and is based on an
agreement executed between the proponents on June
25, 1979. At the specific request of the South Carolina
Commissioner of Banking, this application has been
processed pursuant to the emergency provisions of
the Bank Merger Act. (See 12 USC 1828(c)(4) and 12
USC 1828(c)(c)). On December 31, 1978, Sumter had
total deposits of $129 million, and North Bank had total
deposits of $14.8 million.
Sumter is the seventh largest bank in South Carolina, with 1.2 percent of total state deposits. It presently has 18 offices in seven metropolitan areas of the
state. Sumter also has three approved but unopened
offices, one of which is in Summerville, a community
about 11 miles from North Charleston. Sumter is not
currently represented in either North Charleston or
Charleston.
North Bank operates one office in North Charleston,
two offices in Charleston and one office in Goose
Creek. The main offices of the two proponents are almost 90 miles apart, and their closest existing offices
are approximately 50 miles apart. Due to the distances
between the closest offices and the presence of other
banking alternatives, there does not appear to be any
meaningful existing competition between Sumter and
North Bank. The proposed merger would have little effect on state-wide competition, and Sumter's rank as
the seventh largest banking organization would not
change. Consummation of this proposal would not
result in any adverse competitive effects.
* Assets are as of call dates immediately before and after
transaction.


104


In
To be
operation operated

$ 14,285,000

4

148,657,000
165,735,000

16
20

The financial and managerial resources of Sumter
are satisfactory. The financial and managerial resources of North Bank are unsatisfactory. At the last
examination of North Bank, conducted by the Federal
Deposit Insurance Corporation (FDIC) on March 3,
1979, the condition of the bank was considered critical. Due to certain operational difficulties that have received considerable adverse publicity, North Bank has
been unable to comply with a directive from the FDIC
for the immediate injection of additional equity capital.
Accordingly, the future prospects of North Bank are
uncertain, and absent consummation of this proposal,
are extremely limited.
As a result of this merger transaction, Sumter intends to provide new and expanded banking services
to North Charleston. Sumter will provide a significantly
larger legal lending limit, complete trust services, bank
credit cards, overdraft protection plan, more favorable
interest rates for savings, individual retirement accounts and specialized and sophisticated loan services. These facts are positive considerations on the issue of convenience and needs, and this Office is
unaware of any negative factors bearing on this issue.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that
Sumter's record of helping to meet the credit needs of
the entire community, including low and moderate income neighborhoods, is less than satisfactory.
This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with the proposed merger.
This proposal may be consummated 5 days after the
date of approval by this Office.
August 3, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
We have reviewed this proposed transaction and conclude that it would not have a significantly adverse effect upon competition.

FIRST NATIONAL BANK OF NEVADA,
Reno, Nev., and Bank of Nevada, Las Vegas, Nev.
Banking offices
Names of banks and type of transaction

Total
assets

Bank of Nevada, Las Vegas, Nev., with
and First National Bank of Nevada, Reno, Nev. (7038), which had
consolidated September 28, 1979, under charter and title of the latter bank (7038). The
consolidated bank at date of consolidation had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
consolidate Frist National Bank of Nevada, Reno, Nev.
("FNB"), and Bank of Nevada, Las Vegas, Nev.
("Bank"). The application was filed on July 9, 1979,
and rests on an agreement of March 28, 1979, signed
by the participants. Both FNB and Bank are controlled
by Western Bancorporation, Los Angeles, Calif.
("Western"), a registered multibank holding company
that operates in 12 states.
This is a proposed corporate reorganization. The
proponent banks are commonly owned and do not
compete. It presents no competitive effects under the
Bank Merger Act, 12 USC 1828(c). The financial and
managerial resources and future prospects of the existing and proposed institutions are satisfactory. The
new corporate structure will permit the continuing bank
to more effectively serve the convenience and needs
of its communities.

$ 287,868,000
1,462,525,000
1,750,393,000

In
To be
operation operated

48
14
62

A review of the record on this application and other
information available to the Office of the Comptroller of
the Currency as a result of its regulatory responsibilities revealed no evidence that the applicants' records
of helping community credit needs, including those of
low and moderate income neighborhoods, is less than
satisfactory.
This is the prior written approval required for the applicants to proceed with the proposal.
August 31, 1979

SUMMARY OF REPORT BY ATTORNEY GENERAL
The consolidating banks are both wholly owned subsidiaries of the same bank holding company. As such,
their proposed consolidation is essentially a corporate
reorganization and would have no effect on competition.

THE PEOPLES NATIONAL BANK AND TRUST COMPANY,
Dover, Ohio, and The Gnadenhutten Bank, Gnadenhutten, Ohio
Banking offices
Names of banks and type of transaction

Total
assets

The Gnadenhutten Bank, Gnadenhutten, Ohio, with
and The Peoples National Bank and Trust Company, Dover, Ohio (4293), which had
merged September 28, 1979, under charter and title of the latter bank (4293). The merged bank at
date of merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on the application to
merge The Gnadenhutten Bank, Gnadenhutten, Ohio
("Bank"), into The Peoples National Bank and Trust
Company, Dover, Ohio ("Peoples"). This application
was filed on May 10, 1979, as is based on an agreement executed by the banks on March 13, 1979. As of
December 31, 1978, Peoples had total deposits of
$76.5 million, and Bank's total deposits were $10.3 million.
Peoples is headquartered in Dover and has three
branch offices, all in Tuscarawas County. It is the second largest of eight commercial banks in the County
and the smaller of two banks headquartered in Dover.



In
To be
operation operated

$ 11,761,000
89,436,000
100,610,000

Peoples is a subsidiary of First Bane Group of Ohio,
Inc., Columbus, Ohio, a registered multibank holding
company, that ranks as the fifth largest banking organization in Ohio.
Bank is in Gnadenhutten, approximately 20 miles
southeast of Dover. Bank operates no branch offices
and is the fifth largest of eight banks in Tuscarawas
County. It controls about 3 percent of the county's deposits.
The closest offices of Peoples and Bank are 12
miles apart with offices of other banks in the intervening area. Peoples is the only present banking subsidiary of First Bane Group of Ohio, Inc., operating in the
county. Peoples derives about $2.1 million in deposits
105

(2.7 percent of its total deposits) and $3.8 million in
loans (6.8 percent of its total loans) from the area
served by Bank. Likewise, Bank derives only $310,000
(3.0 percent of its total deposits) in deposits and
$322,000 in loans (6.6 percent of its total loans) from
the area served by Peoples.
With prior approval of this Office, Peoples could legally establish a de novo branch in the area served by
Bank. However, due to the rural nature of the area,it
does not appear likely that Peoples would use this
method of expansion.
Consummation of this proposal would not alter Peoples relative ranking in the county and the resulting institution would hold less than 26 percent of the
county's commercial bank deposits. The largest bank
in the area, The Reeves Banking and Trust Company,
Dover, holds almost 46 percent of the county's deposits, and the third largest bank, a subsidiary of BaneOhio Corporation, has almost 13 percent of county
deposits. Since there is negligible existing competition
between Peoples and Bank, the elimination of this
competition as a result of approval of this application
would have no substantially adverse impact on competition.
The financial and managerial resources of both
banks are satisfactory. The future prospects of Bank
are limited in view of its small size, rural location and

lack of obvious management succession. The future
prospects of the combined bank are good.
As a result of the merger, Peoples intends to offer
new and expanded banking services to Bank's customers. These services include additional types of
credit of a significantly larger and more complex nature, money certificates, trust services and equipment
lease financing. These facts are positive considerations on the issue of convenience and needs, and the
Comptroller is unaware of any negative factors in this
issue.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
applicants' records of helping to meet the credit needs
of their entire communities, including low and moderate income neighborhoods, is less than satisfactory.
This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with the proposed merger.
August 8, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
We have reviewed this proposed transaction and conclude that it would not have a significantly adverse effect upon competition.

FIRST NATIONAL BANK OF HOLLYWOOD,
Hollywood, Fla., and First National Bank of Hallandale, Hallandale, Fla., and Hollywood National Bank, Hollywood,
Fla., and First National Bank of Miramar, Miramar, Fla.
Names of banks and type of transaction

Total
assets

First National Bank of Hallandale, Hallandale, Fla. (15874), with
and First National Bank of Miramar, Miramar, Fla. (16233), with
and Hollywood National Bank, Hollywood, Fla. (16008), with
and First National Bank of Hollywood, Hollywood, Fla. (14530), which had
merged September 30, 1979, under charter and title of the latter bank (14530). The merged bank at
date of merger had

$ 27,205,000
10,779,000
13,093,000
116,909,000
168,735,000

Banking offices
In
To be
operation operated
1
2
2
3
8

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge First National Bank of Hallandale, Hallandale,
Fla., Hollywood National Bank, Hollywood, Fla., and
First National Bank of Miramar, Miramar, Fla. ("Merging Banks"), into and under the charter of First National Bank of Hollywood, Hollywood, Fla. ("Hollywood
Bank"). The application was filed on April 11, 1979,
and is based on a written agreement executed by the
applicant banks on September 18, 1978.
Hollywood Bank and Merging Banks are all national
banks that had total deposits of $107.7 million and
$52.1 million, respectively, as of December 31, 1978.
The proponent banks are wholly owned and controlled by Florida Bankshares, Inc., Hollywood, Fla., a

106


registered bank holding company. Therefore, this is
merely an application for a corporate reorganization.
As such, it presents no competitive issues under the
Bank Merger Act, 12 USC 1828(c). Additionally, a review of the financial and managerial resources and future prospects of the existing and proposed institutions, and the convenience and needs of the
community to be served has disclosed no reason why
this application should not be approved. (See 12 USC
1842(c)(21)).
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
banks' records of helping to meet the credit needs of

their communities, including low and moderate income
neighborhoods, is less than satisfactory.
This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with the proposed merger.
June 21, 1979

SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are all wholly owned subsidiaries
of the same bank holding company. As such, their proposed merger is essentially a corporate reorganization
and would have no effect on competition.

SOUTHERN NATIONAL BANK OF NORTH CAROLINA,
Lumberton, N.C., and Carolina State Bank, Gastonia, N.C.
Banking offices
Names of banks and type of transaction

Total
assets*

Carolina State Bank, Gastonia, N.C, with
and Southern National Bank of North Carolina, Lumberton, N.C. (10610), which had
merged September 30, 1979, under the charter and title of latter bank (10610). The merged bank at
date of merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge Carolina State Bank, Gastonia, N.C. ("Bank"),
into Southern National Bank of North Carolina, Lumberton, N.C. ("Southern"). This application was filed on
June 29, 1979, and rests on an agreement between
the participants signed on March 26, 1979. As of December 31, 1978, Southern's total deposits were
$396.2 million, and Bank had total deposits of $22.8
million. Bank has a main office and three branches in
Gastonia and its immediate area. Southern has 65 offices with none in the city or county of Gastonia.
The smallest relevant market would be the city of
Gastonia, 1970 census tract 331 and the unincorporated sections of census tracts 318, 327 and 328. In
this market, Bank competes with four other commercial
banks, three of which are banks located statewide in
North Carolina. The fourth competitor, Independence
National Bank of Gastonia, holds the largest share of
deposits in this market and operates nine of its 26 offices within the market. Bank ranks third in market
share with 11.1 percent or approximately $21 million in
deposits. Independence holds 53.3 percent of the
market deposits or $102 million, and the First Union
National Bank of North Carolina of Charlotte is second,
holding 25.9 percent or approximately $45 million in
deposits. As of June 30, 1978, Southern did not have
any deposits in the market.
The Board of Governors of the Federal Reserve System in its competitive factor report concluded that the
relevant market is the Charlotte SMSA. In this market,
Southern's rank is 10th of 20 banks with 1.4 percent of
deposits. The merger would raise Southern's share to
3 percent and rank to seventh. The Board of Governors concluded that the proposed merger would have
no adverse effect.
Southern could legally enter Gastonia by a ate novo
branch because North Carolina permits statewide
branching. The North Carolina branching law has resulted in a highly competitive banking environment in
North Carolina, and this is true of the relevant Gastonia



$ 24,902,000
521,707,000
517,474,000

In
To be
operation operated
4
65

69

market described above. There are 24 banking offices
already in this market serving approximately 57,000
persons. The cost of entry by de novo branching and
the profits expected from opening the 25th or subsequent banking offices effectively precludes de novo
entry for Southern National Bank. Accordingly, the
competitive effects of this proposal will not significantly
lessen competition in any relevant market or otherwise
violate the standards found in the Bank Merger Act, 12
USC 1828(c).
The financial and managerial resources of both
Bank and Southern are satisfactory. The future prospects of Bank are limited in consideration of its relative
small size compared to its significantly larger competitors. The future prospects of Southern and the resultant bank are good.
As a consequence of the proposal, Southern will offer new and expanded banking services to the present
banking customers of Bank. These services include
trust, leasing, mortgage lending and accounts receivable financing. There are positive considerations on
the question of convenience and needs.
A review of the record on this application and other
information available to the Office of the Comptroller of
the Currency as a result of its regulatory responsibilities revealed no evidence that Southern's record of
helping to meet the credit needs of the entire community, including low and moderate income neighborhoods, is less than satisfactory.
This is the prior written approval required for the applicants to proceed with the merger.
August 30, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
We have reviewed this proposed transaction and conclude that it would not have an adverse effect upon
competition.
* Assets are as of call dates immediately before and after
transaction.

107

BANK OF JACKSON, N.A.,
Jackson, Miss., and Fidelity Bank, Utica, Miss.
Banking offices

Total
assets*

Names of banks and type of transaction

Fidelity Bank, Utica, Miss., with
was purchased October 1, 1979, by Bank of Jackson, N.A., Jackson, Miss. (16810), which had
After the purchase was effected, the receiving bank had

COMPTROLLER'S DECISION
On September 29, 1979, application was made to the
Comptroller of the Currency for prior written approval
for Bank of Jackson, N.A., Jackson, Miss. ("Assuming
Bank"), to purchase certain of the assets and assume
certain of the liabilities of Fidelity Bank, Utica, Miss.
("Fidelity").
On September 25, 1979, Fidelity was a statechartered bank operating through its main office and
three branch offices with deposits of approximately
$30 million. At the close of business on September 27,
1979, Fidelity was closed by the State of Mississippi
Banking Department. It was placed in receivership
and taken over by the Federal Deposit Insurance Corporation (FDIC) on September 28, 1979. The present
application is based on an agreement, which is incorporated herein by reference, by which the FDIC as receiver has agreed to sell certain of Fidelity's assets in
consideration of the assumption of certain liabilities by
the Assuming Bank. For the reasons stated hereafter,
the Assuming Bank's application is approved, and the
purchase and assumption transaction may be consummated immediately.
Under the Bank Merger Act, 12 USC 1828(c), the
Comptroller cannot approve a purchase and assumption transaction which would have certain anticompetitive effects unless it is found that these effects are
clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served. Additionally, the Comptroller is directed to consider the
financial and managerial resources and future prospects of the existing and proposed institution and the
convenience and needs of the community to be
served. When necessary, however, to prevent the evils

In
To be
operation operated

$32,765,000
1,600,000
26,260.000

attendant on*'the failure of a bank, the Comptroller can
dispense with the standards applicable to usual acquisition transactions and need not consider reports on
the competitive consequences of the transaction ordinarily solicited from the Department of Justice and
other banking agencies. The Comptroller is authorized
in such circumstances to immediately approve an acquisition and to authorize the immediate consummation of the transaction.
The proposed transaction will prevent disruption of
banking services to the community and potential
losses to a number of uninsured depositors. The Assuming Bank has sufficient financial and managerial
resources to absorb Fidelity and enhance the banking
services it offers in the Utica community.
The Comptroller thus finds that the anticompetitive
effects of the proposed transaction, if any, are clearly
outweighed in the public interest by the probable effect of the proposed transaction in meeting the convenience and needs of the community to be served.
For these reasons, the Assuming Bank's application to
purchase certain assets and acquire certain liabilities
of Fidelity, as set forth in the agreement executed with
the FDIC as receiver, is approved. This approval also
includes specific approval to operate Fidelity's main
office and all branch offices as branches of the Assuming Bank and approval of the transfer to the Assuming Bank of Fidelity's trust business as provided in
the agreement. The Comptroller further finds that the
failure of Fidelity requires him to act immediately, as
contemplated by the Bank Merger Act, to prevent disruption of banking services to the community. The
Comptroller thus waives publication of notice, dispenses with solicitation of competitive reports from
other agencies and authorizes the transaction to be
consummated immediately.

September 29, 1979
* Asset figures are as of call dates immediately before and
after .transaction.


108


Due to the emergency nature of the situation, no Attorney General's report was requested.

THE BARNSTABLE COUNTY NATIONAL BANK OF HYANNIS,
Barnstable, Mass., and Chatham Trust Company, Chatham, Mass.
Banking offices
Total
assets

Names of banks and type of transaction

Chatham Trust Company, Chatham, Mass., with
and The Barnstable County National Bank of Hyannis, Barnstable, Mass. (13395), which had
merged October 1, 1979, under charter and title of the latter bank (13395). The merged bank at
date of merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge Chatham Trust Company, Chatham, Mass.
("Chatham"), into The Barnstable County National
Bank of Hyannis, Barnstable, Mass. ("Barnstable").
This application was filed on April 26, 1979, and is
based on a written agreement executed by the proponents on April 9, 1979. As of December 31,1978, Chatham had total deposits of $10.9 million, and
Barnstable's total deposits were $30.4 million.
Chatham was founded in 1919 and operates from a
single office in Chatham.
Barnstable operates a head office in Hyannis and
three branches in Barnstable County. It is a subsidiary
of New England Merchants Company, Inc., Boston, a
registered multibank holding company.
The relevant geographic market for analysis in this
application is Barnstable County. The county is on a
peninsula separated from -the rest of the state by Cape
Cod Canal. Barnstable's main office is slightly less
than 20 miles from the sole office of Chatham. The
closest office of Barnstable to Chatham is its Dennis
Port Branch, about 10 miles distant.
There are offices of other banks in the intervening
area. About 2.8 percent of Barnstable's total deposits
and 6.2 percent of its loans originate in the area
served by Chatham. Chatham obtains 1.3 percent of
its total deposits, and 6.7 percent of its total loans
come from the area served by Barnstable.
Barnstable is the fifth largest of eight commercial
banks with 9.1 percent of total county deposits. Chatham is the smallest bank with 3.4 percent of the
county's total deposits. Chatham is the smallest bank
with 3.4 percent of the county's total deposits. Upon
consummation of this proposal, Barnstable would continue as the fifth largest bank in the county. Further,
several banking alternatives, including offices of two
commercial banks and a branch of a mutual savings




In
To be
operation operated

$13,596,000
35,276,000
44,872,000

bank, would remain in Chatham. The elimination of any
existing competition between Barnstable and Chatham
would not have a substantially adverse effect on competition.
The financial and managerial resources of both
Barnstable and Chatham are satisfactory. The future
prospects of Barnstable are good. The future prospects of Chatham, independent of this merger, are uncertain. The bank is losing its share of market deposits. Chatham's affiliation with Barnstable and its
corporate parent should greatly enhance its future
prospects.
As a result of the merger, Barnstable will provide
new and expanded banking services to the Chatham
area. The Cape Cod area is a popular retirement location. Chatham is in the process of retiring its trust functions. Barnstable aggressively markets trust services.
Over the longer period of time, Barnstable will be better able to serve credit needs and provide more sophisticated management. These facts are positive considerations on the issue of convenience and needs,
and this Office is not aware of any negative factors.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
applicants' records of helping to meet the credit needs
of the communities, including low and moderate income neighborhoods, is less than satisfactory.
This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with the proposed merger.
August 21, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
We have reviewed this proposed transaction and conclude that it would not have a substantial competitive
impact.

109

THE CENTRAL TRUST COMPANY, NATIONAL ASSOCIATION,
Cincinnati, Ohio, and The Citizens National Bank of Middleport, Ohio
Banking offices
Names of banks and type of transaction

Total
assets*

The Citizens National Bank of Middleport, Middleport, Ohio (8441), with
and The Central Trust Company, National Association, Cincinnati, Ohio (16416), which had
merged October 4, 1979, under charter and title of the latter bank (16416). The merged bank at
date of merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge The Citizens National Bank of Middleport,
Middleport, Ohio ("Citizens"), into The Central Trust
Company, National Association, Cincinnati, Ohio
("Central"). This application was filed on June 6, 1979,
and is based on an agreement executed between the
participating banks on May 1, 1979. As of December
31, 1978, Central had total deposits of $834.9 million,
and Citizens had total deposits of $10.5 million.
Central operates 43 banking offices in Hamilton and
Montgomery Counties. It is a subsidiary of Central
Bancorporation, Cincinnati, Ohio. Central Bancorporation is the eighth largest commercial banking organization in Ohio, with control of about 4.3 percent of total
state deposits.
Citizens' only office is in Middleport, Meigs County,
Ohio, approximately 125 miles east of Cincinnati. It is
the third largest of four banks in the county.
Central presently has no loan or deposit customers
residing in Meigs County. Citizens derives none of its
banking business from any area served by any
present subsidiary of The Central Bancorporation, Inc.
Consummation of this merger would have no adverse
effect on competition.
On April 11, 1979, Central filed an application to
merge with The First National Bank of Gallipolis, Gallipolis, Ohio ("First"). First is about 18 miles from Citizens in adjacent Gallia County. The respective market
areas of First and Citizens appear to be distinct and
separate, and the only measurable overlap of the two
banks' service areas is in the immediate area of the
* Asset figures are as of call dates immediately before and
after transactions.


110


$

14,402,000
1,139,273,000
1,223,681,000

In
To be
operation operated

1
54
55

small town of Chesire in eastern Gallia County. Deposits derived by First in Citizens' trade area are only
2.8 percent of its total deposits, and Citizens derives
only 4.3 percent of its deposits from the area served
by First. There is no significant competition between
First and Citizens, and approval of either the merger
between Central and First or the merger between Central and Citizens would have no adverse impact on
competition in the two-county area under consideration in these two separate proposals.
The financial and managerial resources of both
banks are satisfactory. The future prospects of the resulting bank are good.
As a result of the merger, Central will be able to offer
new and expanded services to consumers in Meigs
County. These services include bank credit cards, preapproved overdraft checking accounts, a larger lending limit and trust services. All of these services are
positive benefits, and this Office is unaware of any
negative factors affecting the convenience and needs
of the community.
A review of the-record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
applicants' record of helping to meet the credit needs
of their communities, including low and moderate income neighborhoods, is less than satisfactory.
This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with the proposed merger.
September 4, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
We have reviewed this proposed transaction and conclude that it would not have any adverse effect upon
competition.

THE CENTRAL TRUST COMPANY, NATIONAL ASSOCIATION,
Cincinnati, Ohio, and The First National Bank of Gallipolis, Gallipolis, Ohio
Banking offices
Names of banks and type of transaction

Total
assets*

The First National Bank of Gallipolis, Gallipolis, Ohio (136), with
and The Central Trust Company, National Association, Cincinnati, Ohio (16416), which had
merged October 4, 1979, under charter and title of latter bank (16416). The merged bank at date of
merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge The First National Bank of Gallipolis, Gallipolis,
Ohio ("First"), into the Central Trust Company, National
Association, Cincinnati, Ohio ("Central"). The application was filed on April 11, 1979, and is based on an
agreement executed by the participating banks on
April 5, 1979.
Central reported total deposits of $906 million on
March 31, 1979. It operates 36 offices in Hamilton
County and seven in Montgomery County. It is the
largest subsidiary of Central Bancorporation, Cincinnati, Ohio. Central Bancorporation is the eighth largest
commercial banking organization in Ohio, with control
of about 4.3 percent of total state deposits.
First reported total deposits of $22 million on March
31, 1979. It operates two offices in Gallia County and
is the smallest of three banks in the county.
Central has no loan or deposit customers residing in
Gallia County. First derives none of its banking business from any area served by present subsidiaries of
Central Bancorporation, Inc. Consummation of this
merger would have no adverse effect on competition.
Central filed an application to merge with The Citizens National Bank of Middleport, Middleport, Ohio
("Citizens"), on June 6, 1979. Citizens' only office is 18
miles from Gallipolis in adjacent Meigs County. The
market areas of First and Citizens are distinct and separate, and the only measurable overlap of the two
banks' service areas is in the immediate vicinity of the
small town of Chesire, Ohio, in eastern Gallia County.
First obtains only 2.8 percent of its total deposits in Citizens' market area, and Citizens obtains only 4.3 percent of its deposits from the area served by First.
There is no significant competition between First and




$

26,636,000
1,139,273,000
1,223,681,000

In
To be
operation operated
2
52
54

Citizens. Approval of. the merger of Central and First
and the merger of Central and Citizens would have no
adverse impact on competition in the two-county area
under consideration in these two proposals.
The financial and managerial resources and the future prospects of both First and Central are satisfactory. Consummation of the merger will enhance the future prospects of Central.
If the proposal is completed, Central will be able to
offer additional banking services not now offered by
First to the residents of Gallia County. These services
include a variety of deposit accounts, trust services,
larger loans and expertise in specialized areas of lending. These services will be more conveniently available
and will satisfy additional needs of the consumer of
banking services in the county.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
applicants' records of helping to meet the credit needs
of their communities, including low and moderate income neighborhoods, is less than satisfactory.
This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with the proposed merger.
September 4, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
We have reviewed this proposed transaction and conclude that it would not have a substantial competitive
impact.

* Asset figures are as of call dates immediately before and
after transaction.

111

THE MERCHANTS NATIONAL BANK OF FORT SMITH,
Fort Smith, Ark., and Continental Bank and Trust Company, Barling, Ark.
Banking offices
Names of banks and type of transaction

Total
assets

Continental Bank and Trust Company, Barling, Ark., with
and The Merchants National Bank of Fort Smith, Fort Smith, Ark. (7240), which had
merged October 15, 1979, under charter and title of latter bank (7240). The merged bank at date of
merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge Continental Bank and Trust Company, Barling,
Ark. ("Continental"), into and under the charter of The
Merchants National Bank of Fort Smith, Fort Smith, Ark.
("Merchants"). The application was accepted for filing
on June 12, 1979, and is based on a written agreement executed by the proponents on April 12, 1979.
Merchants is a national bank that had total deposits
of $89.1 million as of December 31, 1978. It operates a
main office, two branch offices and a partial service facility in the City of Fort Smith.
Continental, a state-chartered bank, had total deposits of $3.7 million at year-end 1978. It presently operates a single banking office in Barling, a town located approximately 6 miles east of Fort Smith.
Continental has received approval from the Arkansas
State Bank Board to open an office in Fort Smith, but it
has been stayed pending resolution of litigation
brought by other banks objecting to the state approval. If consummated, this merger will moot the
pending litigation.
Merchants and Continental are both located in the
Fort Smith banking market, approximated by Crawford
and Sebastian Counties in Arkansas plus Sequoyah
and the northern half of LeFlore Counties in Oklahoma.
Merchants ranks as the third largest of 21 commercial
banks therein and controls about 14 percent of market
deposits. Consummation of this proposal would increase its share of market deposits by less than one
percent and would not alter its rank in the market. The
two largest banks, with market shares of approximately
25 and 21 percent, are also headquartered in Fort
Smith and will be in direct competition with the resulting bank.
Due to its size, Continental serves an area limited to
the Town of Barling and the adjoining eastern part of

112



$

In
To be
operation operated

4,269,060
112,768,738
116,606,992

Fort Smith. As the closest offices of the proponents are
some 6 miles apart, the instant proposal would eliminate some existing competition. However, there are
several offices of other banks in the intervening area,
and given the small market share of Continental, the
effect on competition would not be adverse.
As required under 12 USC 1828(c)(5), the Comptroller considered the financial and managerial resources
and found that they are satisfactory for both banks.
The future prospects of Continental are limited due to
its small size. Since it was established in 1971, Continental has been unable to develop a significant deposit base. The future prospects of Continental are limited due to its small size. Since it was established in
1971, Continental has been unable to develop a significant deposit base. The future prospects of the combined bank are good.
As a result of this merger, Merchants would offer
new and expanded banking services to the present
customers of Continental. Considerations relative to
convenience and needs are consistent with approval
of this application.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
banks1 records of helping to meet community credit
needs, including those of low and moderate income
communities, is less than satisfactory.
This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), for the applicants to proceed with the merger.
September 12, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
We have reviewed this proposed transaction and conclude that it would not have a significantly adverse effect upon competition.

THE FIRST NATIONAL BANK OF SIOUX FALLS,
Sioux Falls, S. Dak., and Dakota State Bank of Dell Rapids, Dell Rapids, S. Dak.
Banking offices
Names of banks and type of transaction

Total
assets*

Dakota State Bank of Dell Rapids, Dell Rapids, S. Dak., with
was purchased October 31, 1979, by The First National Bank in Sioux Falls, Sioux Falls, S. Dak.
(3393), which had
After the purchase was effected, the receiving bank had

COMPTROLLER'S DECISION
This is the Comptroller's decision on the application of
The First National Bank in Sioux Falls, Sioux Falls, S.
Dak. ("FNB"), to purchase the assets and assume the
liabilities of Dakota State Bank of Dell Rapids, Dell
Rapids, S. Dak. ("State Bank"). This application was
accepted by this Office on June 20, 1979, and is
based on an agreement signed by both proponents on
March 7, 1979. As of December 31, 1978, FNB had total deposits of $133.9 million, and State Bank had total
deposits of $10.8 million.
The relevant geographic market for consideration in
this proposal is Minnehaha County and the northern
portion of Lincoln County, S. Dak. FNB is the fourth
largest of 14 commercial banking organizations in this
area, controlling 10.4 percent of the market's total
commercial bank deposits. State Bank is among the
five smallest banks in the area and controls only 0.8
percent of the total commercial bank deposits. The
proponents' nearest offices are 20 miles apart, and
there are offices of competing institutions in the intervening area. The resulting bank, with 11.2 percent of
total deposits, would become the third largest bank in
the market. First Bank Systems, Inc., Minneapolis,
Minn., and Northwest Bancorporation, Minneapolis,
with 36.8 and 25.5 percent, respectively, rank first and
second. Consequently the competitive effects are not
likely to substantially lessen competition in any relevant market or otherwise violate the standards found in
12 USC 1828(c)(5).
The financial and managerial resources of FNB are
satisfactory. While State Bank's present condition is
generally satisfactory, its ability to attract successor
management and provide expanded financial services
is limited. Accordingly, its financial and managerial re-

In
To be
operation operated

$ 12,072,000
146,073,000
165,873,000

sources are not totally satisfactory. Additionally, its future prospects are limited in view of the relative small
size of the bank and the fact that it experiences direct
competition from substantially larger competitors,
some of which are affiliated with banking organizations
that are the largest operating in the state. The future
prospects of the resultant bank are good.
As a result of this proposal, FNB proposes to bring
new and expanded banking services to the banking
communities currently served by State Bank. Additionally, state statutes now provide home office protection
for State Bank which will be removed and allow other
potential entrants to enter Dell Rapids. These facts are
positive considerations on the issue of convenience
and needs and lend additional weight toward approval
of the application.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that
FNB's record of helping to meet the credit needs of the
entire community, including low and moderate income
neighborhoods, is less than satisfactory.
This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with the proposed consolidation.
September 28, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
We have reviewed this proposed transaction and conclude that it would not have a substantial competitive
impact.
* Asset figures are as of call dates immediately before and
after transaction.

MID-AMERICAN NATIONAL BANK AND TRUST COMPANY,
Northwood, Ohio, and Farmers and Merchants Bank Company, Arlington, Ohio
Banking offices
Total
assets

Names of banks and type of transaction

Farmers and Merchants Bank Company, Arlington, Ohio, with
and Mid-American National Bank and Trust Company, Northwood, Ohio (15416), which had
merged October 31, 1979, under the charter and title of latter bank (15416). The merged bank at
date of merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on the application to
merge Farmers and Merchants Bank Company,
Arlington, Ohio ("Farmers"), into Mid-American Na


$

13,569,000
135,770,000
149,339,000

In
To be
operation operated
1
16
17

tional Bank and Trust Company, Northwood, Ohio
("National"). This application was filed on June 25,
1979, and is based on an agreement executed by the
proponents on June 7, 1979. As of December 31,
113

1978, National had total deposits of $119.4 million, and
Farmers' total deposits were $10.3 million.
The relevant market in this application is Hancock
County, Ohio. The county is mainly rural with an agriculturally based local economy. The Hancock County
banking market is highly concentrated with the two
largest banks, both headquartered in Findlay, and
controlling almost 80 percent of the market's total commercial bank deposits. Six banking organizations operate 13 banking offices in the market. National does
not have an office in Hancock County.
Farmers is the fifth largest bank in the market and
controls only 4.5 percent of the market's total deposits
held by commercial banks. National's main office is in
Wood County, which adjoins Hancock County on its
northern boundary. The main office of National is 50
miles north of Farmer's sole office in Arlington. The
closest office of National to Farmers is the North Baltimore Branch (Wood County), approximately 22 miles
northwest of Arlington. Findlay, principal city and
county seat of Hancock County, is centrally situated in
the county directly between North Baltimore and
Arlington, effectively separating the service areas of
National and Farmers. Consequently, there is only
negligible existing competition between the proponents of this proposed merger.
Since National currently has no offices in the market,
it would merely succeed to Farmer's share of the Hancock County banking market. Moreover, the introduction of this new competition into Hancock County
would replace a small competitor with one which is
larger and more vigorous. Thus, approval of this application would not have any significant effect on existing
competition or otherwise be violative of the standards
found in 12 USC 1828(c)(5).

The financial and managerial resources of both
banks are satisfactory. The future prospects of
Farmers due to its small size and de minimus market
share are limited. The future prospects of the resulting
bank are good.
As a consequence of this merger, National intends
to improve and expand banking services now provided to the Arlington banking public by Farmers. The
additional services and benefits will include trust services, greater management depth and capacity, expanded loan facilities and lending limits, automatic
transfer accounts, agency money orders and school
savings program. All of the services should have a
positive effect on the convenience and needs of the
community and lend further weight toward approval of
the application.
A review of the record in this application and other
information available to the Comptroller's Office as a
result of its regulatory responsibilities reveals no evidence that National's record of helping to meet the
credit needs of the entire community, including low
and moderate income neighborhoods, is less than satisfactory.
This is the prior written approval required by the
Bank Merger Act for the applicants to proceed with the
merger.
September 27, 1979

SUMMARY OF REPORT BY ATTORNEY GENERAL
We have reviewed this proposed transaction and conclude that it would not have a substantial competitive
impact.

THE FIRST NATIONAL BANK OF MARYLAND,
Baltimore, Md., and The National Bank of Perryville, Perryville, Md.
Banking offices
Names of banks and type of transaction

Total
assets

The National Bank of Perryville, Perryville, Md. (11193), with
and The First National Bank of Maryland, Baltimore, Md. (1413), which had
merged November 1, 1979, under the charter and title of the latter bank (1413). The merged bank
at date of merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge The National Bank of Perryville, Perryville, Md.
("Perryville Bank"), into and under the charter of The
First National Bank of Maryland, Baltimore, Md.
("First".). This application was filed on June 27, 1979.
As of March 31, 1979, First had total domestic deposits of $1.4 billion, and Perryville Bank's total deposits were $5.8 million. First is a wholly owned subsidiary of First Maryland Bancorp, the third largest
commercial banking organization headquartered in
Maryland, controlling slightly more than 11 percent of

114


$

6,566,000
1,833,793,000
1,839,883,000

In
To be
operation operated

1
101
102

the deposits held by all commercial bank offices in
Maryland.
The relevant geographic market for analysis in this
application is Cecil County, Md. There are seven banking organizations in the market that operate 16 banking offices with total commercial bank deposits of
$122.6 million on June 30, 1978. First does not operate
any offices in the market. Perryville Bank is the sixth
largest bank in this market and controls only 4.6 percent of the market's total commercial bank deposits.
The main office of First is approximately 40 miles
from Perryville. First's closest office, in Havre de

Grace, is 4 miles from Perryville across the Susquehanna River in Harford County. The two communities
are connected by a toll bridge, and there is an interstate highway crossing the Susquehanna River to the
north. Perryville Bank derives only 4.5 percent of its total deposits from Havre de Grace, of which approximately 75 percent are accounts of former Perryville
residents who have retired to a senior citizens home in
Havre de Grace and Havre de Grace residents who
work in Perryville or Perry Point. First obtains less than
$225,000 in demand and savings deposits from the
area served by Perryville Bank. This amount constitutes less than 0.02 percent of First's total demand and
savings deposits and less than 4 percent of Perryville
Bank's total demand and savings deposits. Perryville
Bank derives $305,000, 5.4 percent, of its total demand
and savings deposits from geographic areas served
by First.
Thus, there is only minimal existing competition between First and Perryville Bank. Inasmuch as First currently has no offices in Perryville Bank's market, and
there are several banking alternatives in close proximity to Perryville, approval of this application would not
substantially lessen competition in any relevant market
or violate the standards found in 12 USC 1828(c)(5).
Pursuant to Maryland branch banking laws, First
could enter Cecil County by a de novo establishment.
However, in consideration of the economic climate of
Cecil County, the availability of banking alternatives
that are conveniently located, and the absence of any

evidence that any of the banking needs of the Cecil
County banking public are unmet it does not appear
that First would choose to enter Cecil County with a
new office within the foreseeable future. Consequently,
First does not now have a significant present or prospective beneficial effect on banking competition in
Cecil County.
The financial and managerial resources of both Perryville Bank and First are generally satisfactory. The future prospects of both banks are satisfactory; however, the future prospects of Perryville Bank are
believed to be more favorable in conjunction with First.
Consummation of the merger will allow the resulting
bank to provide expanded bank services to the customers of Perryville Bank, including a significantly
larger legal lending limit, bank credit cards and trust
services. These factors are positive considerations on
the issue of convenience and needs.
A review of the record of this application and other
information available to the Office of the Comptroller of
the Currency as a result of its regulatory responsibilities revealed no evidence that applicants' record of
helping to meet the credit needs of their entire community including low and moderate income neighborhoods is less than satisfactory.
This is the required prior written approval for the applicants to proceed with the proposed merger.
October 1, 1979
The Attorney General's report was not received.

CENTRAL FIDELITY BANK, N.A.,
Richmond, Va., and City Savings Bank and Trust Company, Petersburg, Va., and The Citizens National Bank of Emporia, Emporia, Va.
Banking offices
Names of banks and type of transaction

Total
assets

The Citizens National Bank of Emporia, Emporia, Va. (12240), with
and City Savings Bank and Trust Company, Petersburg, Va., with
and Central Fidelity Bank, N.A., Richmond, Va. (10080), which had
merged November 9, 1979, under the charter and title of latter bank (10080). The merged bank at
date of merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge The Citizens National Bank of Emporia, Emporia, Va., and City Savings Bank and Trust Company,
Petersburg, Va., into Central Fidelity Bank, N.A., Richmond, Va. All three banks are wholly owned, except
for directors' qualifying shares, and controlled by
Commonwealth Banks, Inc., Richmond, a registered
multibank holding company.
This proposed corporate reorganization presents no
competitive issues under the Bank Merger Act, 12
USC 1828(c). The financial and managerial resources
and future prospects of the existing and proposed institutions are satisfactory. The new corporate structure
will permit the continuing bank to serve the convenience and needs of its communities more efficiently.




$ 36,710,000
41,249,000
395,873,000
473,832,000

In
To be
operation operated
5
5
26
36

A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
applicants' records of helping to meet the credit needs
of the communities, including low and moderate income neighborhoods, is less than satisfactory.
This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with the proposed merger.
September 7, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are all wholly owned subsidiaries
of the same bank holding company. As such, their proposed merger is essentially a corporate reorganization
and would have no effect on competition.

115

THE FIRST NATIONAL BANK IN BRYAN,
Bryan, Ohio, and The Farmers State Bank of Stryker, Stryker, Ohio
Banking offices
Names of banks and type of transaction

Total
assets

The Farmers State Bank of Stryker, Stryker, Ohio, with
and The First National Bank in Bryan, Bryan, Ohio (13899), which had
merged November 23, 1979, under the charter of the latter (13899) and title "First National Bank of
Northwest Ohio." The merged bank at date of merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge The Farmers State Bank of Stryker, Stryker,
Ohio ("Farmers"), into The First National Bank in
Bryan, Bryan, Ohio ("First"). This application was filed
on July 3 1 , 1979, and is based on an agreement
signed by the proponents on July 20, 1979. As of June
30, 1979, Farmers had total deposits of $6.5 million,
and First had total deposits of $31.3 million.
The relevant geographic market for analyzing the
competitive effect of this proposal is Williams County
and Milford, Farmer, Washington and Tiffin Townships
in northern Defiance County. Farmers operates from a
single office and is the smallest bank in this market
with 3 percent of total market commercial bank deposits. First is the second largest of seven banks with
16 percent of total market commercial bank deposits.
Both of its offices are in Bryan. The closest offices of
the two banks are in separate towns approximately 5
miles apart.
If the merger is consummated, First would continue
to rank as the second largest bank behind Citizens
National Bank, Bryan, which controls 40 percent of the
market's commercial bank deposits. National City Corporation, Cleveland, Ohio, has applied for permission
to acquire control of the Citizens National Bank. National City Corporation is a bank holding company that
controls nine banks with total deposits of $2.9 billion. It
is the third largest commercial banking organization in
Ohio with approximately 6 percent of total state commercial bank deposits.
Although consummation of this merger would eliminate some competition between First and Farmers, the
resulting bank would have less than one-half the
amount of deposits controlled by the largest bank in


116


$ 7,298,000
37,941,000

In
To be
operation operated

1
2

44,959,000

the market. The resulting bank would be better able to
compete with this larger bank which may soon become a subsidiary of one of the largest banking organizations in the state. Consummation of this merger
would not have a substantially adverse effect on competition.
The financial and managerial resources of both First
and Farmers are satisfactory. Farmers is the smallest
bank in its market and its ability to provide expanded
financial services and attract successor management
is limited. Consequently, its future prospects are limited. The future prospects of the resultant bank are
good.
The resulting bank will expand Farmers' banking
services and offer new services. The resulting bank
will have expanded loan and deposit services and will
have a substantially greater lending limit than Farmers.
It will also increase banking hours and make major improvements in Farmers' banking facilities. The resulting bank will be better able to conveniently serve additional needs of its community.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that
First's record of helping to meet the credit needs of the
entire community, including low and moderate income
neighborhoods, is less than satisfactory.
This decision is the prior written approval required
for consummation of the merger (12 USC 1828(c)).

October 23, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
We have reviewed this proposed transaction and conclude that it would not have a substantial competitive
impact.

CENTURY FIRST NATIONAL BANK IN ST. PETERSBURG,
St. Petersburg, Fla., and Century Bank of Pinellas County, St. Petersburg, Fla.
Banking offices
Names of banks and type of transaction

Total
assets*

Century Bank of Pinellas County, St. Petersburg, Fla., with
Century First National Bank in St. Petersburg, St. Petersburg, Fla. (14367), which had
merged November 30, 1979, under the charter of latter bank (14367) and title of "Century First
National Bank of Pinellas County." The merged bank at date of merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge Century Bank of Pinellas County, St. Petersburg, Fla. ("Century"), into and under the charter of
Century First National Bank in St. Petersburg, St. Petersburg, Fla. ("CFNB"), and with the title of "Century
First National Bank of Pinellas County." The application
was filed on May 8, 1979, and is based on a written
agreement executed by the applicant banks on March
19, 1979.
CFNB is a national bank that had total deposits of
$163.8 million as of March 31, 1979. Century, a statechartered bank, had deposits of $17.5 million as of
March 31, 1979.
Both banks are wholly owned and controlled by
Century Banks, Inc., Fort Lauderdale, Fla., a registered
bank holding company. Therefore, this is merely an
application for a corporate reorganization. As such, it
presents no competitive issues under the Bank Merger
Act, 12 USC 1828(c). Additionally, a review of the financial and managerial resources and future prospects of the existing and proposed institutions, and the

In
To be
operation operated

$ 19,670,000
213,214,000
282,925,000

convenience and needs of the community to be
served has disclosed no reason why this application
should not be approved. (See 12 USC 1842(c)(21)).
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
bank's record of helping to meet the credit needs of its
entire community including low and moderate income
neighborhoods is less than satisfactory.
This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with the proposed merger.
August 17, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are both wholly owned subsidiaries of the same bank holding company. As such,
their proposed merger is essentially a corporate reorganization and would have no effect on competition.
* Asset figures are as of call dates immediately before and
after transaction.

FIRST & MERCHANTS NATIONAL BANK,
Richmond, Va., and The Services National Bank. Arlington, Va.
Banking offices
Names of banks and type of transaction

Total
assets

The Services National Bank, Arlington, Va. (16277), with
and First & Merchants National Bank, Richmond, Va. (1111), which had
merged November 30, 1979, under the charter and title of latter bank (1111). The merged bank at
date of merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge The Services National Bank, Arlington, Va.
("Services"), into and under the charter of First & Merchants National Bank, Richmond, Va. ("F&M"). This
application was filed on August 15, 1979, and is based
on an agreement executed by the proponents dated
June 20, 1979. As of March 31, 1979, Services had total deposits of $12.3 million, and F&M's total deposits
were $1.4 billion. F&M is the lead bank for First & Merchants Corporation, a registered bank holding company.
The relevant geographic market for competitive
analysis in this proposal is the area contained within a



$

13,597,000
2,143,256,000
2,156,853,000

In
To be
operation operated
1
99

100

1 mile radius of Services' sole office. Services' only office is in the Crystal City office building, retail store and
residential complex which is in the extreme southeastern edge of Arlington County, Va., adjacent to the independent city of Alexandria. Within a 1 mile radius of
Services' location, there are seven banking organizations with commercial bank deposits of $76.5 million
and 10 banking offices. The three largest banks in the
market are affiliates of major state-wide banking organizations, each having total deposits in excess of $1
billion. Services ranks as the fifth largest bank in its
market and controls 13.6 percent of the total commercial bank deposits within the market. F&M operates
one office in the market, which ranks as the seventh
117

largest banking office and holds 6.3 percent of total
commercial bank deposits. The bank resulting from
approval of this application would rank as the third
largest in the market and would control about 20 percent of the market's commercial bank deposits.
The closest office of F&M to Services is F&M's ArmyNavy branch, 0.6 miles north of Services' location. The
F&M Army-Navy branch has total deposits of $4.8 million and is separated from Services by an interstate
highway, with eight competing bank offices in the intervening area. Only two other F&M offices are within 5
miles of Services' site, and these offices are not in direct competition with Services. Accordingly, there is no
meaningful competition between any office of F&M
and Services.
Under Virginia branching statutes, F&M could legally
establish a de novo office in Services' market. It does
not appear likely that F&M would choose this form of
market expansion in consideration of present real estate development concentration in other parts of
Arlington County, the existing interstate highway system with established traffic patterns, and the availability of numerous banking alternatives both inside the
market and the larger Washington, D.C., metropolitan
area. Thus, the foreclosure of the potential for future
competition between F&M and Services is not a bar to
approval of this application.
The financial and managerial resources of F&M are
generally satisfactory. Services has experienced
heavy managerial and teller turnover during its 5-year
corporate existence. Additionally, Services has a high
loan/deposits ratio, and almost 40 percent of its deposits are in highly volatile, high-rate, certificates of
deposit. Because of Services' single location in Crystal
City, the bank has been unable to more effectively

compete for available business, and Services' earnings have been low. Accordingly, the financial and
managerial resources of Services are less than satisfactory, and the future prospects of the bank, absent
this proposal, are not considered good. The future
prospects of F&M and of the resultant bank are considered to be far more favorable.
As a result of this proposal, F&M can make available
to the present customers of Services a variety of specialized and sophisticated banking services and provide a more highly skilled and diversified banking staff.
F&M will provide Services' present customers with the
availability of transacting their banking business at 14
branches in Northern Virginia and 96 branches
throughout Virginia. Present Services' customers will
also realize the provision of trust services, international
banking services and additional lending capacity.
These are positive considerations on the issue of convenience and needs and lend additional weight for approval of the application.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
applicants' records of helping to meet the credit needs
of their communities, including low and moderate income neighborhoods, is less than satisfactory.
This is the required prior written approval for the applicants to proceed with the proposed merger.
October 22, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
We have reviewed this proposed transaction and conclude that it would not have a significantly adverse effect upon competition.

INDIAN HEAD NATIONAL BANK OF NASHUA,
Nashua, N.H., and Indian Head National Bank of Derry, Derry, N.H.
Banking offices
Names of banks and type of transaction

Total
assets

Indian Head National Bank of Derry, Derry, N.H. (8038), with
and Indian Head National Bank of Nashua, Nashua, N.H. (15563), which had
merged November 30, 1979, under the charter and title of latter bank (15563). The merged bank at
date of merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge Indian Head National Bank of Derry, Derry, N.H.
("Derry"), into Indian Head National Bank of Nashua,
Nashua, N.H. ("Nashua"). This application was filed on
July 25, 1979, and rests on an agreement signed by
the proponents on February 22, 1979. As of March 31,
1979, Nashua's and Derry's total deposits were $150.7
million and $33 million, respectively. Both participants
are subsidiaries of Indian Head Banks, Inc., a registered bank holding company.
118



In
To be
operation operated

$ 43,963,000
188,010,000
231,973,000

11

This is a proposed corporate reorganization. It
presents no competitive issues under the Bank Merger
Act, 12 USC 1828(c). The financial and managerial resources of the proponents are generally satisfactory.
The future prospects of the existing and proposed institutions are satisfactory. The new corporate structure
will permit the continuing bank to serve the convenience and needs of its communities more efficiently.
A review of the record of this application and the information available to this Office as a result of its regulatory responsibilities revealed no evidence that the

applicant's record of helping to meet the credit needs
of the entire community including low and moderate income neighborhoods is less than satisfactory.
This decision is the prior written approval required
for the applicants to proceed with the merger.
October 26, 1979

SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are both wholly owned subsidiaries of the same bank holding company. As such,
their proposed merger is essentially a corporate reorganization and would have no effect on competition.

THE NATIONAL BANK AND TRUST COMPANY OF GLOUCESTER COUNTY,
Woodbury, N.J., and The National Bank of Manuta, Sewell, NJ.
Banking offices
Names of banks and type of transaction

Total
assets*

The National Bank of Manuta, Sewell, N.J. (12917), with
and The National Bank and Trust Company of Gloucester County, Woodbury, N.J. (1199), which
had
merged November 30, 1979, under the charter and title of latter bank (1199). The merged bank at
date of merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge The National Bank of Manuta, Sewell, N.J. ("Sewell Bank") into and under the charter of The National
Bank and Trust Company of Gloucester County,
Woodbury, N.J. ("Woodbury Bank"). The application
was filed on September 15, 1978, and is based on a
written agreement executed by the applicant banks on
August 9, 1978. As of June 30, 1978, Woodbury Bank
had total deposits of $159.4 million, and Sewell Bank
had deposits of $43.1 million. Woodbury Bank is a
wholly owned subsidiary of Community Bancshares
Corporation of Woodbury, N.J., a registered one-bank
holding company.
Woodbury Bank presently operates its main office
and 12 branch offices within Gloucester County. Sewell Bank operates all of its three banking offices
within the same county. The narrowest relevant geographic market appears to be Gloucester County.
Within this market, Woodbury is the largest commercial
bank with 29.8 percent of market deposits, and Sewell
is the fourth largest with 8.1 percent. The resulting
bank would continue as the largest with 37.9 percent
of the total county deposits.
Gloucester County is in the southwest portion of
New Jersey across the Delaware River from Philadelphia and has an estimated population of 196,000. The
population increased an estimated 10 percent from
1970 to 1975. The application indicates that more than
45 percent of the residents work outside the county. It
is well known that many commuters bank at their place
of work as an alternative or in addition to their place of
residence. Taking this factor into account suggests
that the relevant geographic market should include the
Philadelphia and Camden, N.J., areas. This is the market found appropriate by the Federal Reserve Board in
its advisory opinion to this Office. In this market, 52
banking organizations operate 776 offices and a number of them have deposits in excess of $1 billion.
Banks in the applicant's geographic position feel the



In
To be
operation operated

$ 51,488,000

3

198,307,000

13

244,815,000

16

power of these urban commercial banks in their markets through the effect on commuters.
The applicant banks' main offices are 6 miles apart
and their closest offices are 3 miles apart; however,
there are other commercial banks with offices between
applicants' offices. Both banks are subject to competitive pressures from the Gloucester County offices of
much larger New Jersey commercial banks headquartered outside the county. The Comptroller finds that
the proposed merger would eliminate some existing
competition but that there would remain a large number of alternative sources for banking services in all
relevant markets. Consequently, the competitive effects are not likely to substantially lessen competition
in any relevant market or otherwise violate the standards found in 12 USC 1828(c)(5).
The financial and managerial resources of Woodbury Bank are satisfactory. The financial and managerial resources of the Sewell Bank are less than satisfactory. The future prospects of the combined bank
are good and considerably better than the future prospects of the Sewell Bank.
As a result of this merger, Woodbury Bank intends to
make available new and expanded banking services
to the present customers of Sewell Bank, including,
but not limited to, trust department services, bank
credit cards, overdraft checking and an expanded
credit limit. These facts are positive considerations on
the issue of convenience and needs. The Comptroller
is not aware of any negative factors on this issue.
This application was filed prior to the November 6,
1978, effective date of the Comptroller's Community
Reinvestment Act Regulations, 12 CFR 25. However,
pursuant to the Community Reinvestment Act, Public
Law No. 95-128, available information relevant to the
banks' record of meeting their community credit needs
was reviewed, revealing no evidence to suggest that
* Assets are as of call dates immediately before and after
transaction.
119

the applicants are not meeting the credit needs of their
communities, including low and moderate income
neighborhoods.
This opinion is the prior written approval required by
the Bank Merger Act, 12 USC 1828(c), in order for the
applicants to merge under their previously referenced
agreement.
August 29, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
Both institutions operate in Gloucester County in the
southwestern portion of New Jersey across the Delaware River from Philadelphia. The county has experienced rapid population growth which is expected to
continue. Much of the county remains rural in character although it is also a suburban residential area for
Philadelphia and Camden.
According to the application, Applicant's service
area almost completely overlaps the service area of
Bank. At least three of Applicant's branches are located within 3 miles of Bank's main office, and three of
Applicant's branches are within 5 miles of Bank's
northern-most branch. While offices of several other
banks are located in the immediate vicinity, Applicant
is the dominant banking institution in Gloucester
County. Thus, it is obvious that the proposed merger
would combine two sizeable direct competitors and
would eliminate substantial existing competition between them.
Seventeen banking institutions operate 61 offices in
Gloucester County, with the four largest institutions
controlling approximately 65.6 percent of total deposits. Applicant is the largest commercial bank in the

county with approximately 30 percent of total deposits.
Bank ranks fourth with 8.1 percent of total deposits in
the county. If the merger were consummated the resulting bank would control 38 percent of total deposits
in the county and would increase the four-firm concentration ratio in the county 72.6 percent.
Applicant attempts to justify the merger by citing the
need for capital investment in electronic fund transfers
("EFT") mechanisms, particularly automated teller machines, in order to maintain its market position in the
current market. It suggests that only by combining the
smaller institutions presently in the market will any local institutions be able to assume the capital costs
necessary for EFT development. This suggestion runs
completely contrary to the studies of EFT that have
been done to date. The National Commission on Electronic Fund Transfers, after a careful review of all the
existing literature in the field, concluded that EFT
equipment, particularly automated teller machines,
was certainly within the reach of middle and small financial institutions. In fact, much of the evidence suggests that access to EFT equipment can actually enhance the ability of smaller local banks to compete
with statewide institutions because they would no
longer have to rely on costly investments in new
branches in order to compete effectively. See EFT in
The United States; Final Report of the National Commission on Electronic Fund Transfers, October 28,
1977, Chapter 7.
In sum, the proposed merger would eliminate substantial existing competition between the two institutions and would increase concentration in Gloucester
County. We therefore conclude that, overall, the merger would have an adverse effect on competition.

THE LAKE COUNTY NATIONAL BANK OF PAINESVILLE,
Painesville, Ohio, and The Commercial Bank, Ashtabula, Ohio
Banking offices
Names of banks and type of transaction

Total
assets*

The Commercial Bank, Ashtabula, Ohio, with
and The Lake County National Bank of Painesville, Painesville, Ohio (14686), which had
merged December 1, 1979, under charter and title of latter bank (14686). The merged bank at date
of meraer had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge The Commercial Bank, Ashtabula, Ohio
("Bank"), into The Lake County National Bank of
Painesville, Painesville, Ohio ("Lake Bank"). This application was filed on June 7, 1979, and rests on an
agreement between the proponents dated February
15, 1979. As of December 31, 1978, Bank had total
deposits of $22.9 million, and Lake Bank's total de* Asset figures are as of call dates immediately before and
after transaction.

120


$ 28,454,000
349,920,000
375,602,000

In
To be
operation operated
5
18
23

posits were $304.8 million. Lake Bank has a total of 19
banking offices, and Bank operates five offices.
The relevant geographic market area for Bank is the
northern part of Ashtabula County where its banking
offices are located. Bank is the third largest of four
banks in Ashtabula County with 9.3 percent of total deposits. The relevant geographic market area for Lake
Bank is Lake County where Lake Bank ranks as the
largest of six banks and controls 59 percent of the
area's deposits. The nearest offices of the proponents
are Lake Bank's two Madison offices and Bank's Genea office, slightly less than 7 miles apart. The area
between these offices is almost entirely farm land

which acts as an effective barrier. There is only minimal existing competition between Bank and Lake
Bank. Lake Bank derives only a negligible 0.59 percent of its total deposits from the area served by Bank,
and Bank derives virtually no deposits from the area
served by Lake Bank. Approval of this application
would have no significantly adverse effect on competition in either Ashtabula or Lake County or otherwise be
violative of the standards found in 12 USC 1828(c)(5).
The financial and managerial resources of both
Bank and Lake Bank are satisfactory. The future prospects of Bank are somewhat limited in view of its relatively small size and the fact that it faces direct competition from substantially larger bank holding company
affiliated banks. The future prospects of the combined
bank are good.
As a result of this merger, Lake Bank will be in a position to offer new and expanded banking services to
Bank's customers, including bank credit cards, auto-

matic transfers from savings to checking accounts,
automated teller machines and trust services. These
are positive considerations on the issue of convenience and needs.
A review of the record of this application and other
information available to the Comptroller as a result of
regulatory responsibilities revealed no evidence that
Lake Bank's record of helping to meet the credit needs
of the entire community including low and moderate income neighborhoods is less than satisfactory.
This decision is the prior written approval required in
order for the applicants to proceed with the proposal.
October 31, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
We have reviewed this proposed transaction and conclude that it would not have a significantly adverse effect upon competition.

THE NEW FARMERS NATIONAL BANK OF GLASGOW,
Glasgow, Ky., and The Peoples Bank, Cave City, Ky.
Banking offices
Names of banks and type of transaction

Total
assets

The Peoples Bank, Cave City, Ky., with
and The New Farmers National Bank of Glasgow, Glasgow, Ky. (13651), which had
merged December 1, 1979, under the charter and title of latter bank (13651). The merged bank at
date of merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge The Peoples Bank, Cave City, Ky. ("Peoples"),
into and under the charter of The New Farmers National Bank of Glasgow, Glasgow, Ky. ("New
Farmers"). The application was filed on May 9, 1979,
and is based on a written agreement executed by the
applicant banks on December 14, 1978.
New Farmers is a national bank that had total deposits of $56.9 million on December 31, 1978. It operates a main office and two branches in Glasgow, the
county seat of Barren County, and one office in Hiseville.
Peoples, a state-chartered bank, had total deposits
of $9.8 million on December 31, 1978. It operates a
single banking office within Cave City which is in the
northwestern corner of Barren County.
New Farmers competes in a banking market consisting of Barren and Hart Counties and the eastern half of
Metcalfe County, Ky. New Farmers is the second largest of nine commercial banks operating in this market
with 28 percent of the market's commercial bank deposits. Peoples, with its market area entirely included
within New Farmers' market, is the third smallest bank
with less than 5 percent of the market's total deposits.
The resulting bank, with 33 percent of market deposits,
would be the largest bank in this market. Citizens Bank



In
To be
operation operated

$10,987,000
71,142,000
82,129,000

and Trust Company of Glasgow (deposits - $65 million), currently the largest bank in the market, holds almost 32 percent of total market deposits and would
continue in direct competition with the resulting bank.
Eight commercial banks would remain as alternative
sources of banking services in the market.
Due to its size, Peoples serves only the immediate
Cave City area and an adjoining portion of southern
Hart County. Cave City addresses account for 66 percent of its individual, partnership and corporate demand deposit accounts. Citizens Bank and Trust Company of Glasgow operates a branch directly across the
street from Peoples in Cave City. New Farmers' closest
branch, the Hiseville is approximately seven miles east
of Cave City. The area between these offices is
sparsely populated, rural and predominantly agricultural. Therefore, consummation of this merger would
not eliminate any meaningful existing competition between the two banks.
New Farmers could establish a branch office in
Cave City. However, because of its small population,
Cave City is not attractive for ate novo entry by a third
commercial bank. Conversely, Peoples has shown neither the desire nor the capacity to expand outside of
Cave City and it is unlikely to do so in the foreseeable
future. Accordingly, consummation of this merger will
not substantially lessen competition or otherwise violate the standards found in 12 USC 1828(c)(5).
121

The financial resources of both New Farmers and
Peoples are satisfactory. The managerial resources of
both New Farmers are satisfactory while those of Peoples are limited. The bank has only two officers. One is
in poor health and the other is approaching retirement
age. Because of its small size, its ability to attract capable successor management is limited. The bank's
future prospects are limited. New Farmers possesses
the necessary financial and managerial resources to
serve Peoples' market area and its future prospects
are favorable.
As a result of this merger, New Farmers intends to
offer new and expanded banking services to the
present customers of Peoples, including but not limited to, bank credit cards, expanded trust services,
additional expertise in agricultural lending, floor plan
loans, Christmas Club accounts and a substantially
greater lending limit. It will be able to more conveniently satisfy the banking needs of the Cave City community.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
banks' records of helping to meet the credit needs of
the communities, including low and moderate income
communities, is less than satisfactory.
This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), for the applicants to proceed with the merger.
October 15, 1979

SUMMARY OF REPORT BY ATTORNEY GENERAL
Bank is located only 7 miles from Applicant's branch in
Hiseville and 11 miles from Applicant's Glasgow
branches. There are no banks in the intervening area,
although the two other banks located in Barren each
maintain offices in Glasgow. It therefore appears that
the proposed merger will eliminate a substantial
amount of existing competition between Applicant and
Bank.
Banking is highly concentrated in Barren County.
There are only four commercial banks in the county,
holding 47.7 percent, 42.7 percent, 7.1 percent and
2.5 percent of county deposits. The combination of
Applicant, the second largest bank in the county with a
42.7 percent share of deposits with Bank, the third
largest with a 7.1 percent share, would make Applicant the largest bank in the county, would result in the
two largest banks controlling approximately 90 percent
of county deposits, and would reduce from four to
three the number of banks operating in the county.
Moreover, the increase in concentration is particularly
significant here because under Kentucky law, banks
may not expand de novo (either by branching or by
establishing multibank holding companies) outside of
their home office counties. Barren County is, therefore,
closed to entry by existing Kentucky banks, thus eliminating them as possible sources of deconcentration in
Barren County.
In sum, the proposed acquisition would have an adverse effect upon competition.

SUN FIRST NATIONAL BANK OF LAKE WALES,
Lake Wales, Fla., and Sun First National Bank of Polk County, Auburndale, Fla.
Banking offices
Names of banks and type of transaction

Total
assets*

Sun First National Bank of Lake Wales, Lake Wales, Fla. (14923), with
and Sun First National Bank of Polk County, Auburndale, Fla. (16786), which had
merged December 1, 1979, under the charter and title of latter bank (16786). The merged bank at
date of merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge Sun First National Bank of Lake Wales, Lake
Wales, Fla. ("Lake Wales"), into and under the charter
of Sun First National Bank of Polk County, Auburndale,
Fla. ("Auburndale"). The application was filed on August 2, 1979, and is based on a written agreement executed by the applicant banks on July 17, 1979.
Lake Wales and Auburndale are national banks that
had total deposits of $38.0 million and $31.8 million,
respectively, as of June 30, 1979.
* Assets are as of call dates immediately before and after
transaction.

122


In
To be
operation operated

$45,057,000
37,328,000
83,925,000

The two banks are wholly owned, with exception of
directors' qualifying shares, and controlled by Sun
Banks of Florida, Inc., Orlando, Fla., a registered bank
holding company. Consummation of this corporate reorganization would have no effect on competition. A
review of the financial and managerial resources and
future prospects of the existing and proposed institutions, and the convenience and needs of the community to be served has disclosed no reason why this application should not be approved.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
banks' records of helping to meet the credit needs of

their communities, including low and moderate income
neighborhoods, is less than satisfactory.
This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), for the applicants to proceed with the merger.
October 15, 1979

SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are both wholly owned subsidiaries of the same bank holding company. As such,
their proposed merger is essentially a corporate reorganization and would have no effect on competition.

NATIONAL CENTRAL BANK,
Lancaster, Pa., and Lebanon County Trust Company, Lebanon, Pa.
Banking offices
Names of banks and type of transaction

Total
assets

Lebanon County Trust Company, Lebanon, Pa., with
and National Central Bank, Lancaster, Pa. (694), which had
merged December 3, 1979, under charter and title of latter bank (694). The merged bank at date of
merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge Lebanon County Trust Company, Lebanon, Pa.
("Lebanon"), into and under the charter of National
Central Bank, Lancaster, Pa. ("National Central"). The
application was accepted for filing on June 19, 1979,
and is based on a written agreement executed by the
proponents on February 27, 1979.
National Central, a wholly owned subsidiary of National Central Financial Corporation, Lancaster, Pa., a
one-bank holding company, had total deposits of $1.3
billion on December 31, 1978. It operates 57 banking
offices: 15 in Lancaster County, 16 in Berks County, 12
in York County, nine in Dauphin County, three in
Chester County and two in Lebanon County.
Lebanon had total deposits of $53.2 million on December 31, 1978. It operates three offices in Lebanon
County, two in the City of Lebanon and one in Mount
Gretna. It has no offices outside Lebanon County.
The relevant market for consideration in this proposal is Lebanon County. Lebanon ranks as the fifth
largest of 11 commercial banks in this market, controlling approximately 11 percent of the market's commercial bank deposits. National Central, with two branches
in this market, represents the ninth largest bank with
less than 5 percent of total market deposits. If this merger is consummated, the resulting bank will rank as
the second largest bank in this market with approximately 16 percent of total commercial bank deposits.
The largest bank in the market, headquartered in Lebanon, would continue to hold in excess of 20 percent
of the market's deposits. Additionally, the third and
fourth largest banks in the market, each with approximately 13 percent of total market deposits, are branch
offices belonging to larger regional commercial banks
headquartered outside Lebanon County in Harrisburg
and Reading, Pa.
The closest offices of Lebanon and National Central
are some 11 miles apart. The intervening area between these offices is predominantly rural and
sparsely populated. There are numerous banking of


$

64,990,000
1,643,036,000
1,708,026,000

In
To be
operation operated
3
60
63

fices of competing commercial banks in close proximity to Lebanon, including the branch offices of commercial banks headquartered outside Lebanon
County. Therefore, the proposed merger would not
eliminate any meaningful existing competition between
the two banks.
Applicable state banking statutes permit branching
by a commercial bank within its home office county
and all counties immediately contiguous. Thus, the
proponent banks could branch into areas served by
the other. However, Lebanon has shown no desire to
expand outside the Lebanon market area, and it does
not appear likely that the bank would expand cfe novo
into areas served by National Central. Conversely, the
likelihood that National Central would enter the Lebanon area appears remote since the area is already
served by eight commercial banking organizations
and is not attractive for de novo entry. Accordingly, the
potential for future competition between the proponent
banks is minimal. Overall, approval of this application
would not have a substantially adverse effect on competition.
The financial and managerial resources of both National Central and Lebanon are satisfactory. The future
prospects of the two banks, independently and in
combination, are favorable.
After consummation of this transaction, the additional capabilities of National Central will be made
available to the present customers of Lebanon in such
areas as full trust services, overdraft checking, international banking, equipment lease financing and expanded lending limit. These facts are positive considerations on the issue of convenience and needs, and
the Comptroller is unaware of any negative factors in
this issue.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
banks' records of helping to meet the credit needs of
the communities, including low and moderate income
communities, is less than satisfactory.
123

This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), for the applicants to proceed with the merger.

October 25, 1979

SUMMARY OF REPORT BY ATTORNEY GENERAL
Lebanon County (1975 population 105,723) is located
in southcentral Pennsylvania. The city of Lebanon (the
county seat and a hub of commerce, industry and finance) is approximately 80 miles northwest of Philadelphia, 27 miles west of Reading and 23 miles east of
Harrisburg. The county's economy is based on a diversified mix of farming (53 percent of the land in the
county is pasture or cropland) and industries such as
primary metals and apparel/textile products (employing 22.5 percent and 18.5 percent of the county's industrial workers, respectively). During the last several
years, the county has experienced moderate growth.
Population rose 6.1 percent from the 1970 level to
1975, and per capita personal income increased 46.2
percent from the 1969 level to 1974, (1959-1969 increase: 39.4 percent. The economic outlook for both
the county and the city of Lebanon area appears favorable.
The nearest office of Applicant to Bank is its office in

Richland, Lebanon County, located 12 miles east of
Bank's main office in the city of Lebanon. Although offices of other banks are closer to Bank than
Applicant's Richland office, it appears that the proposed merger would eliminate direct competition between Applicant and Bank.
Eleven commercial banks currently operate offices
in Lebanon County; seven of these are headquartered
in Lebanon County. As of June 30, 1978, Bank held
the fifth largest share (11.08 percent) and Applicant
held the ninth largest share (4.52 percent) of the total
deposits held in Lebanon County banking offices. Six
banks in the county each account for less than 10 percent of the total deposits. If the proposed transaction
is consummated, the resulting bank will hold the second largest share (15.6 percent) of total deposits held
in county banking offices. Concentration among the
four largest banks in the county—in terms of total
county deposits—would increase from 58.85 percent
to 62.47 percent.
Under Pennsylvania law, both Applicant and Bank
could be permitted to establish additional ate novo offices in Lebanon County. The proposed merger, therefore, will eliminate the potential for increased future
competition between them.
Overall, in our view, the proposed transaction would
have an adverse effect on competition.

NORTH CAROLINA NATIONAL BANK,
Charlotte, N.C., and The Bank of Asheville, Asheville, N.C.
Banking offices
Names of banks and type of transaction

Total
assets

The Bank of Asheville, Asheville, N.C, with
and North Carolina National Bank, Charlotte, N.C. (13761), which had
merged December 3, 1979, under the charter and title of the latter bank (13761). The merged bank
at date of merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge The Bank of Asheville, Asheville, N.C. ("Bank"),
into and under the charter of North Carolina National
Bank, Charlotte, N.C. ("NCNB"). This application was
filed on September 14, 1979, and rests on an agreement executed by the proponents on June 20, 1979.
As of March 31, 1979, NCNB had total deposits of $3.8
billion and ranked as the second largest commercial
banking organization headquartered in North Carolina.
NCNB is a banking subsidiary of NCNB Corporation,
Charlotte, a registered bank holding company. On
March 31, 1979, Bank had total deposits of $87.2 million.
The relevant geographic market for analysis in this
proposal is Buncombe County, N.C. Within this market
there are six banking organizations that operate a total
of 41 offices and have total market deposits of $433.7

124


$ 103,418,000
5,264,166,000
5,485,502,000

In
To be
operation operated

9
162
171

million. With the exception of NCNB, the five largest
banks in the state have offices in the market. The largest bank in the market and in the state is Wachovia
Bank & Trust Co., Winston-Salem, N.C, which controls
41.6 percent of total market commercial bank deposits. The second largest bank in the market and
third largest in the state is First Union National Bank,
Charlotte, with 21.4 percent of total commercial bank
deposits in the market. Bank ranks as the third largest
bank in its market and has 18.7 percent of the commercial bank deposits. Northwestern Bank, North
Wilkesboro, N.C, ranks as the fourth largest bank in
both the market and state. Northwestern Bank controls
11.2 percent of commercial bank deposits held by all
banks in the market. First-Citizens Bank & Trust Co.,
Raleigh, N.C, is the fifth largest bank in the market
and state and has 4.5 percent of market deposits. The
smallest bank in the market, Western Carolina Bank,

Asheville, currently controls only 2.6 percent of total
market deposits. Western Carolina Bank has filed an
application with this Office to merge with First National
Bank of Catawba County, Hickory, N.C. If the merger
is approved, First National Bank of Catawba County
will have total deposits in excess of $250 million and
will operate 22 offices in eight western North Carolina
counties, including Buncombe County.
As noted above, NCNB has no present offices in the
market. Inasmuch as the smallest bank in the market is
currently a merger partner with another bank, and all
other banks in the market, except for Bank, are offices
of major state-wide branch banking systems, Bank is
the only independent bank in its market that is currently available for acquisition. The closest offices of
NCNB and Bank are 24 miles apart. Since Bank is not
a competitor outside Buncombe County and NCNB is
not a competitor within that county, there is no existing
competition between the proponents. Accordingly, approval of this application would not substantially lessen
competition within the market.
Pursuant to applicable North Carolina branch banking statutes, NCNB could legally establish a de novo
office within Bank's market. NCNB has not expanded
into a new market since 1974, and it has never attempted to enter Buncombe County with a de novo office. In consideration of the number of financial institutions currently serving Bank's market and the relatively
low income level and slow economic growth rate of the
market, it does not appear likely that NCNB would
choose to enter Bank's market via de novo expansion
within the forseeable future. Thus, the elimination of
any potential for competition developing between

NCNB and Bank is not considered great and presents
no bar to approval of this application.
The financial and managerial resources of NCNB
and Bank are generally satisfactory. The future prospects of Bank are uncertain when considered in light
of its relatively small size and the fact that it faces direct competition from substantially larger competitors,
some of which are affiliated with banking organizations
that are the largest operating in the State. The future
prospects of NCNB and the resultant bank are good.
As a result of this proposal, present customers of
Bank should benefit from the introduction of NCNB into
their market and the stimulated bank competitive atmosphere that will result. NCNB will also offer new and
expanded banking services including, but not limited
to, FHA-insured and VA-guaranteed mortgage loans,
more and larger commercial loans, small business
loans, dealer financing for consumer purchases, agricultural loans, international banking services, automated teller machines and trust services. These are all
positive considerations on the issue of convenience
and needs.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that
NCNB's record of helping to meet the credit needs of
its entire community, including low and moderate income neighborhoods, is less than satisfactory.
This is the required prior written approval for the applicants to proceed with the merger.
November 2, 1979
The Attorney General's report was not received.

AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO,
Chicago, III., and Mercantile National Bank of Chicago, Chicago, III.
Banking offices
Names of banks and type of transaction

Total
assets*

Mercantile National Bank of Chicago, Chicago, III. (14419), with
was purchased December 7, 1979, by American National Bank and Trust Company of Chicago,
Chicago, III. (13216), which had
After the purchase was effected, the receiving bank had

COMPTROLLER'S DECISION
This is the Comptroller's decision on the application of
American National Bank and Trust Company of Chicago, Chicago, III. ("American"), to purchase certain
of the assets and assume certain of the liabilities of
Mercantile National Bank of Chicago, Chicago, III.
("Mercantile"). This application was filed on September 17, 1979, and is based upon an agreement executed by the proponents on August 8, 1979. As of May
31, 1979, American had total deposits of $1.7 billion,
and Mercantile's total deposits were $62.3 million.
American is a wholly owned subsidiary of Walter E.
Heller International Corporation, Chicago, a registered
one-bank holding and multinational finance company.



$

In
To be
operation operated

64,846,797
2,219,591,000
2,518,247,000

American competes in a banking market which is
approximated by the Chicago Standard Metropolitan
Statistical Area ("SMSA"). In this market, there are over
425 commercial banking organizations operating more
than 625 banking offices. American is the fifth largest
banking organization in this market with approximately
2.3 percent of the market's commercial bank deposits.
Mercantile operates in a market entirely included in
American's banking market. If the proposed purchase
transaction is consummated, American will continue to
rank as the fifth largest commercial banking organiza* Asset figures for the acquiring bank are as of call d&tes immediately before and after transaction.
125

tion in the Chicago SMSA and will increase its share of
market deposits by a mere 0.1 percent. The four larger
banks in the market represent substantial commercial
banking organizations, and collectively, they control
some 51 percent of the SMSA's commercial bank deposits.
American and Mercantile both operate a main office
and one branch office facility within the Chicago metropolitan area. American is in downtown Chicago near
the heart of the city's financial district. Mercantile is on
the southwestern edge of downtown Chicago in an
area recently rejuvenated, resulting in an improved
business environment. While the main offices of the
two banks are within several blocks of each other,
there are numerous banking offices of competing commercial banks in and around the area between the
proponents offices, including offices of the larger Chicago commercial banks. Moreover, given the size disparity between the two banks, combined with the
present overall condition of Mercantile, it is evident
that there is minimal existing competition between
American and Mercantile. Consequently, approval of
this application would not substantially lessen competition in any relevant market.
The financial and managerial resources of American
are satisfactory. The financial and managerial resources of Mercantile are unsatisfactory. At the last examination of Mercantile, conducted by this Office on
May 31, 1979, the condition of the bank was considered critical. Mercantile has been under caretaker
management since the death of its chairman and pres-

ident in October 1978. This has further exacerbated
substantial operating problems facing the bank. Accordingly, the future prospects of Mercantile are uncertain and absent consummation of this proposal are
extremely limited.
American and Mercantile both currently offer a full
range of commercial banking services to their customers. While this proposal will not result in the immediate introduction of any new or expanded banking
services, the resulting bank would be a more meaningful competitor within the Chicago area, and as a result,
the banking public would be better served. The Comptroller is unaware of any negative factors on the issue
of convenience and needs.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
applicants' records of helping to meet credit needs of
the communities, including low and moderate income
neighborhoods, is less than satisfactory.
This merger may not be consummated until proof of
compliance with 12 USC 215a(2) is submitted to the
Comptroller.
This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with the proposed transaction.
October 26, 1979
The Attorney General's report was not received.

NORTHWESTERN NATIONAL BANK OF SIOUX FALLS,
Sioux Falls, S. Dak., and Springfield State Bank, Springfield, S. Dak.
Banking offices
Names of banks and type of transaction

Total
assets

Springfield State Bank, Springfield, S. Dak., with
and Northwestern National Bank of Sioux Falls, Sioux Falls, S. Dak. (10592), which had
merged December 14, 1979, under the charter and title of latter bank (10592). The merged bank at
date of merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge Springfield State Bank, Springfield, S. Dak.
("Bank"), into and under the charter of Northwestern
National Bank of Sioux Falls, Sioux Falls, S. Dak.
("Northwestern"). This application was filed on August
21, 1979, and is based on an agreement signed by the
participants on May 10 and May 15, 1979. On December 31, 1978, Bank had total deposits of $5.8 million,
and Northwestern had total deposits of $320.5 million.
Northwestern is a subsidiary of Northwest Bancorporation, Minneapolis, Minn. ("Bancorp"), a registered
multibank holding company with total deposits of $1.8
billion. Bancorp has 83 subsidiaries that operate in
seven states. Bancorporation is the largest of 119
banking organizations in the state with approximately
23 percent of the commercial bank deposits. Consum
126


$

6,984,000
418,613,000
425,704,000

In
To be
operation operated

1
16
17

mation of this proposal would not significantly increase
its share of bank deposits in South Dakota.
The relevant geographic market for analysis of the
competitive effects of this proposal is Bon Homme
County in southeastern South Dakota. The county has
about 9,000 residents. Within this market, there are five
commercial banks with a total of $37 million in deposits. The two largest banks in the market control almost 72 percent of the market's total deposits. Bank,
the third largest bank in the market with 15.8 percent
of market deposits operates a single office. The closest offices of the two banks are over 79 miles apart,
and Northwestern derives no loan or deposit accounts
from Bon Homme County. Consummation of this proposal would constitute Bancorp's initial entry into Bon
Homme County, and this entrance should stimulate the
competitive atmosphere within the relevant geographic

market. Northwestern is prohibited by South Dakota
law from establishing branches in Springfield other
than by merger or consolidation. Bancorp could establish a new bank in Springfield. However, there are now
five banks serving the needs of Bon Homme County's
9,000 residents.
There have been no new banking offices established in the county in the last 5 years. The county
does not appear to be attractive for ate novo entry, and
it is unlikely that Bancorp would choose to do so in the
foreseeable future. Accordingly, the competitive effects are not likely to substantially lessen competition
in any relevant market.
Northwestern's financial and managerial resources
are satisfactory. Bank's present condition is satisfactory, but because of small size, its ability to attract successor management and provide expanded and sophisticated banking services is limited. Therefore, its
financial and managerial resources and its future prospects as an independent institution are also limited.
The future prospects of the resultant bank are good.
Northwestern proposes to offer new and expanded
banking services to the Bon Homme banking market.
These services include a significantly larger legal lend-

ing limit, pre-approved lines of credit connected to
personal checking accounts, individual retirement accounts, Keogh Plans, Treasury bill certificates and increased availability of home mortgages. These facts
are positive considerations on the issue of convenience needs and lend additional weight toward approval of the application.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that
Northwestern's record of helping to meet the credit
needs of its entire community, including low and moderate income neighborhoods, is less than satisfactory.
This decision is the required prior written approval of
the Bank Merger Act, 12 USC 1828(c), in order for the
applicants to proceed with the merger.
October 26, 1979

SUMMARY OF REPORT BY ATTORNEY GENERAL
We have reviewed this proposed transaction and conclude that it would not have an adverse effect on competition.

FIRST NATIONAL BANK OF CATAWBA COUNTY,
Hickory, N.C., and Western Carolina Bank and Trust Company, Asheville, N.C.
Banking offices
Names of banks and type of transaction

Total
assets*

Western Carolina Bank and Trust Company, Asheville, N.C, with
was purchased December 28, 1979, by First National Bank of Catawba County, Hickory, N.C.
(4597), which had
After the purchase was effected, the receiving bank had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application by
First National Bank of Catawba County, Hickory, N.C.
("FNB"), to purchase the assets and assume the liabilities of Western Carolina Bank & Trust Company,
Asheville, N.C. ("Western"). This application was filed
on October 10, 1979, and is based on an agreement
executed by the participants on August 22, 1979. As
of June 30, 1979, FNB had total commercial bank deposits of $237.9 million, and Western's total deposits
were $21 million.
The relevant market for analysis in this application is
the five North Carolina counties where Western has at
least one banking office. These counties are Buncombe (where Western is headquartered and operates
two branches), Haywood, Henderson, Transylvania
and Burke. Within this market, there are eight banking
•organizations that have total commercial bank deposits of $790.6 million and operate a total of 75 offices. The largest bank in this market is also the largest
bank in North Carolina, Wachovia Bank and Trust
Company of Winston-Salem. Wachovia has total commercial bank deposits of $241 million in the market, or



In
To be
operation operated

$ 22,591,000

8

276,607,000
315,981,000

15
23

almost 31 percent of total market deposits. The three
largest banks in the market—Wachovia, First Union
National Bank and Northwestern Bank, respectively—
control slightly less than 80 percent of the market's deposits. Western ranks as the sixth largest bank in its
market and controls a modest 3 percent of the total
deposits.
FNB has no offices in any of the five counties where
Western operates. FNB has a total of 15 offices: 12 in
Catawba County (of which six are in Hickory), one
Alexander County and two in Ashe County. The closest
offices of the proponents are approximately 20 miles
apart, and there are numerous offices of competitor
banks in the intervening area. Additionally, McDowell
County, where neither FNB or Western operates an office, is between the proponents' closest offices. Based
on these facts, there is no meaningful existing competition between the proponents.
Pursuant to applicable North Carolina banking statutes and with prior regulatory approval, the propo* Asset figures are as of call dates immediately before and
after transaction.
127

nents could establish a de novo office in each other's
market. The likelihood of this event appears remote
when the present structure of FNB's and Western's respective markets is considered together with the relatively small size of Western in comparison to its major
competitors.
The financial and managerial resources of FNB are
satisfactory. While Western's present condition is generally satisfactory, its relatively small size inhibits its
ability to attract successor management and to provide expanded financial services. Accordingly, its financial and managerial resources are not totally satisfactory. Additionally, its future prospects are also
limited in view of its relative small size and the fact that
it experiences direct competition from substantially
larger competitors, some of which are affiliated with
banking organizations that are the largest operating in
the state. The future prospects of the resulting bank
are good.
As a direct result of this transaction, FNB will intro-

duce new banking services not now offered by Western. These services include full trust services, consumer credit services, customer services and
business development services, international banking
services and an increased emphasis on personal
banking services. These are positive considerations on
the issue of convenience and needs.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that
FNB's record of helping to meet the credit needs of the
entire community, including low and moderate income
neighborhoods, is less than satisfactory.
This decision is the prior written approval required
by the Bank Merger Act for the applicants to proceed
with with proposal.
November 27, 1979
The Attorney General's report was not received.

THE ONEIDA NATIONAL BANK AND TRUST COMPANY OF CENTRAL NEW YORK,
Utica, N.Y., and The Little Falls National Bank, Little Falls, N.Y.
Banking offices
Names of banks and type of transaction

Total
assets

The Little Falls National Bank, Little Falls, N.Y. (2406), with
and The Oneida National Bank and Trust Company of Central New York, Utica, N.Y. (1392), which
had
merged December 28, 1979, under the charter and title of latter bank (1392). The merged bank at
date of merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge The Little Falls National Bank, Little Falls, N.Y.
("Bank"), into and under the charter of The Oneida National Bank and Trust Company of Central New York,
Utica, N.Y. ("Oneida"). This application was filed on
August 9, 1979, and is based on an agreement executed by the proponents on June 18, 1979.
Oneida is a national bank that had total deposits of
$608.3 million as of June 30, 1979. It operates 33
banking offices in the seven counties of Oneida, Herkimer, Oswego, Onondaga, Wayne, St. Lawrence and
Franklin in upstate New York. The preponderence of
the population and economic activity within this service area is centered in Utica and Rome. Oneida experiences direct local competition within its market from
five multibillion dollar deposit money center banks
based in New York City and one based in Buffalo.
Since the passage of statewide branching in 1976,
these competitors have been aggressively expanding
their efforts in Oneida's service area.
Bank, with deposits of $16.7 million, operates a single banking office within the Little Falls, which is in the
southeastern portion of Herkimer County.
Because of its size, Bank serves an area limited to

128


In
To be
operation operated

$ 19,478,000

1

686,295,000

33

704,735,000

34

Little Falls and the immediate surrounding area. Bank
generates 82 percent of its total deposits and extends
a preponderence of its loans within a 5-mile radius of
the city. Because of the sparsely populated and rugged topography of this part of the state, commutation
patterns and limited highway access between communities, we believe that this 5-mile radius represents the
appropriate definition of Bank's market. Therefore, this
is the appropriate market for competitive analysis under the Bank Merger Act.
New York state banking statutes permit de novo
branch expansion by commercial banks into any municipality within the state (except for those municipalities with a population of less than 50,000 inhabitants
and where an independent commercial bank is headquartered). Consequently, Bank enjoys "home office
protection," and the only avenue for entry into Little
Falls by Oneida is through the acquisition of an existing bank.
In its market, Bank competes directly with the Herkimer County Trust Company, Little Falls, who with $41
million in deposits controls approximately 61 percent
of the total commercial bank deposits in this market. In
addition, keen competition is now provided by the Little Falls office of the Mohawk Valley Savings and Loan

Association.* Increased competition for time deposits
is important as Bank's present deposit structure is
comprised of 83 percent time money.
Oneida's closest branch to Bank is located approximately 8 miles distant in Dolgeville. A total of 0.2 percent of Oneida's deposits and 0.7 percent of its total
loans are derived from Bank's market. Accordingly,
consummation of this merger will eliminate some but
not a substantial amount of direct competition. Moreover, the "home office protection" minimizes the potential for any increase in this level of competition by
foreclosing Oneida's de novo entry. Even if "home office protection" could be eliminated, the chances of de
novo entry in close proximity to Little Falls are remote
because of the area's low economic growth and limited site availability due to the rugged topography.
The financial and managerial prospects of the two

* The New York Banking Department approved the merger of
Little Falls Building Savings and Loan Association and ll'ian
Savings and Loan Association to form the Mohawk Valley
Savings and Loan Association on June 22, 1979.

banks independently are favorable and in combination
are excellent. (12 USC 1828(c)(5)).
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
applicants' records of helping to meet community
credit needs, including those of low and moderate income neighborhoods, is less than satisfactory.
After consummation of this merger, the convenience
and needs of Bank's present customers will be greatly
enhanced. Such benefits include the offering of services not otherwise available such as revolving credit
card lines of credit, full trust services, specialized expertise in agricultural lending, overdraft checking, expanded deposit services, computer services and an
increased lending limit. These positive considerations
on the issue of convenience and needs clearly outweigh any adverse effects that might occur from the
elimination of slight direct competition between Bank
and Oneida. Accordingly, this merger is in the public
interest and was approved November 28, 1979.
February 11, 1980
The Attorney General's report was not received.

DEPOSIT GUARANTY NATIONAL BANK,
Jackson, Miss., and Bank of Inverness, Inverness, Miss.
Banking offices
Names of banks and type of transaction

Total
assets

Bank of Inverness, Inverness, Miss., with
and Deposit Guaranty National Bank, Jackson, Miss. (15548), which had
merged December 31, 1979, under the charter and title of latter bank (15548). The merged bank at
date of merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on the application to
merge Bank of Inverness, Inverness, Miss. ("Inverness
Bank"), into and under the charter of Deposit Guaranty
National Bank, Jackson, Miss. ("DGNB"). The application was accepted for filing on September 12, 1979,
and is based on a written agreement executed by the
proponents on June 19, 1979. As of June 30, 1979,
DGNB had total deposits of $1.1 billion, and Inverness
Bank had deposits of $10.9 million.
DGNB currently operates a main office and 53
branch offices in nine western Mississippi counties, 23
of which are within the Jackson metropolitan area. Inverness Bank operates a single banking office within
the city of Inverness which is situated in Sunflower
County in northwestern Mississippi. The main office of
DGNB is some 80 miles from Inverness Bank, and its
closest branch office is approximately 30 miles distant.
In view of the geographic distance separating the proponent banks and the numerous offices of competing
commercial banks in the intervening area, this acquisi


$

16,120,000
1,489,201,000
1,505,321,000

In
To be
operation operated
1
56
57

tion would not eliminate any existing competition between DGNB and Inverness Bank.
The financial and managerial resources of both
DGNB and Inverness Bank are satisfactory. The future
prospects of Inverness Bank are somewhat limited in
view of its relatively small size and limited management depth. The future prospects of the resulting bank
are good.
As a result of the merger, DGNB intends to make
available new and expanded banking services to the
present customers of Inverness Bank including, but
not limited to, trust services, overdraft checking,
equipment lease financing, additional expertise in agricultural lending, more aggressive consumer loan department, small business loans and automated teller
machines. These are all positive considerations on the
issue of convenience and needs.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
banks' records of helping to meet the credit needs of
129

the communities, including low and moderate income
neighborhoods, is less than satisfactory.
This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with this merger.
November 28, 1979

SUMMARY OF REPORT BY ATTORNEY GENERAL
The Attorney General has granted permission for the
merger of Bank of Inverness with Deposit Guaranty
National Bank under the terms of the judgment entered
in U.S. v. Deposit Guaranty National Bank.

THE HUNTINGTON NATIONAL BANK OF COLUMBUS,
Columbus, Ohio, The Huntington Bank of Toledo, Toledo, Ohio, The Huntington Portage National Bank of Kent,
Kent, Ohio, The Huntington First National Bank of Lima, Lima, Ohio, The Huntington Bank of Wood County, Bowling
Green, Ohio, The Huntington First National Bank of Medina County, Wadsworth, Ohio, The Huntington Lagonda National Bank of Springfield, Springfield, Ohio, The Huntington Bank of Chillicothe, Chillicothe, Ohio, The Huntington
First National Bank of Kenton, Kenton, Ohio, The Huntington Bank of Washington Court House, Washington Court
House, Ohio, The Huntington National Bank of Bellefontaine, Bellefontaine, Ohio, The Huntington National Bank of
Franklin, Franklin, Ohio, The Huntington Bank of Woodville, Woodville, Ohio, The Huntington Bank of Ashland,
Ashland, Ohio, The Huntington National Bank of London, London, Ohio, The Huntington National Bank, Columbus,
Ohio
Banking offices
Names of banks and type of transaction

Total
assets

The Huntington National Bank of Bellefontaine, Bellefontaine, Ohio (13749), with
and The Huntington National Bank of Columbus, Columbus, Ohio (7745), with
and The Huntington National Bank of Franklin, Franklin, Ohio (5100), with
and The Huntington Portage National Bank of Kent, Kent, Ohio (652), with
and The Huntington First National Bank of Kenton, Kenton, Ohio (2500), with
and The Huntington First National Bank of Lima, Lima, Ohio (13767), with
and The Huntington National Bank of London, London, Ohio (10373), with
and The Huntington Lagonda National Bank of Springfield, Springfield, Ohio (14105), with
and The Huntington First National Bank of Medina County, Wadsworth, Ohio (5828), with
and The Huntington Bank of Ashland, Ashland, Ohio, with
and The Huntington Bank of Wood County, Bowling Green, Ohio, with
and The Huntington Bank of Chillicothe, Chillicothe, Ohio, with
and The Huntington Bank of Toledo, Toledo, Ohio, with
and The Huntington Bank of Washington Court House, Washington Court House, Ohio, with
and The Huntington Bank of Woodville, Woodville, Ohio, with
and The Huntington National Bank, Columbus, Ohio (7745), which had
merged December 31, 1979, under the charter of the latter bank (7745) and title "The Huntington
National Bank." The merged bank at date of merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge 15 sister banks ("Merging Banks"), into and under the charter of The Huntington National Bank, Columbus, Ohio ("HNB"). This application is one part of a
process whereby Huntington Bancshares, Inc., Columbus, Ohio ("Bancshares"), a registered multibank
holding company, is realigning and consolidating its
banking interests. As a part of this process, Bancshares sponsored a charter application for a new national bank which was preliminarily approved by this
Office on June 29, 1979. After the merger, this resultant bank will have total commercial bank deposits of
almost $2 billion. Since this merger represents a realignment and consolidation of Bancshares1 banking
interests, no adverse competitive issues exist under
the Bank Merger Act, 12 USC 1828(c).
The financial and managerial resources and future
prospects of both the existing and proposed institutions are satisfactory. Additionally, the newly created
corporate structure of the resultant bank will permit the


130


$

45,618,000
1,582,529,000
38,312,000
126,950,000
50,419,000
125,912,000
30,632,000
71,205,000
72,065,000
35,379,000
97,730,000
62,472,000
141,239,000
45,753,000
35,986,000
240,000
2,542,896,000

In
To be
operation operated
5
38
4
9
2
9
2
5
2
3
6
3
11
2
1
0
102

banking needs of the communities involved to be better served.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
records of any of the national banking associations is
less than satisfactory in helping to meet the credit
needs of their entire communities, including low and
moderate income neighborhoods.
This decision is the prior written approval required
by the Bank Merger Act in order for the applicants to
proceed with the proposed merger. Additionally, HNB
is authorized to operate all former offices of all 15
Merging Banks as branches of HNB.
November 27, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are all wholly owned subsidiaries
of the same bank holding company. As such, their proposed merger is essentially a corporate reorganization
and would have no effect on competition.

//. Mergers consummated, involving a single operating bank.
CITY NATIONAL BANK,
Fort Worth, Tex., and 5600 Lancaster National Bank, Fort Worth, Tex.
Banking offices
Names of banks and type of transaction

Total
assets

City National Bank, Fort Worth, Tex. (12696), with
and 5600 Lancaster National Bank, Fort Worth, Tex. (12696), which had
merged January 2, 1979, under the charter of the latter bank (12696) and title "City National Bank.'
The merged bank at date of merger had

COMPTROLLER'S DECISION
Pursuant to the requirements of 12 USC 1828(c), The
Bank Merger Act, an application has been filed with
the Office of the Comptroller of the Currency that
seeks and requires the prior written consent of this Office to the proposed merger of City National Bank, Fort
Worth, Tex. ("CNB"), the Merging Bank, into 5600 Lancaster National Bank, Fort Worth, Tex. ("Charter
Bank"), under the charter of 5600 Lancaster National
Bank and with the title "City National Bank." The subject application rests on an agreement executed between the proponent banks and is incorporated herein
by reference, the same as if fully set forth.
CNB was granted National Banking Association
charter number 12696 by this Office on April 24, 1925.
As of March 31, 1978, CNB had total commercial bank
deposits of approximately $60.6 million.
By action dated August 4, 1978, the Office of the
Comptroller of the Currency granted preliminary approval for the organization of a new National Bank
("Charter Bank"). The sponsors of the new bank application were principals of Republic of Texas Corporation, Dallas, Tex. ("Republic"), a registered multibank
holding company that as of December 31, 1977, controlled 12 subsidiary banks with consolidated deposits
of almost $5.8 billion. The primary purpose for the organization of Charter Bank is to facilitate the acquisition of the successor by merger to CNB by Republic.

$74,227,000
240,000

In
To be
operation operated

1
0

74,467,000

This application was filed prior to the November 6,
1978, effective date of the Comptroller's Community
Reinvestment Act regulations, 12 CFR 25. However,
pursuant to the Community Reinvestment Act, Public
Law No. 95-128, available information relevant to the
bank's record of meeting its community credit needs
was reviewed, revealing no evidence to suggest that
the applicant is not meeting the credit needs of the
community, including low and moderate income neighborhoods.
Accordingly, the result of approval of the proposal
would merely be to combine an existing commercial
bank with a non-operating entity; as such, would produce no adverse impact upon any relevant area of
consideration. Applying the statutory criteria, it is
deemed that the application is not adverse to the public interest and should be, and hereby is, approved.
November 29, 1978
SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed merger is part of a plan through which
City National Bank would become a subsidiary of Republic of Texas Corporation, a bank holding company.
The instant merger, however, would merely combine
an existing bank with a non-operating institution; as
such, and without regard to the acquisition of the surviving bank by Republic of Texas Corporation, it would
have no effect on competition.

NATIONAL LUMBERMAN'S BANK AND TRUST COMPANY,
Muskegon, Mich., and NLB National Bank of Muskegon, Muskegon, Mich.
Banking offices
Names of banks and type of transaction

Total
assets*

National Lumberman's Bank and Trust Company, Muskegon, Mich. (4840) , with
and NLB National Bank of Muskegon, Muskegon, Mich. (4840), which had
merged January 30, 1979, under charter of the latter bank (4840) and title "National Lumberman's
Bank and Trust Company." The merged bank at date of merger had

COMPTROLLER'S DECISION
'The Office of the Comptroller of the Currency has accepted an application filed pursuant to the statutory requirements of 12 USC 1828(c), the Bank Merger Act,
that requires prior consent to effectuate the proposed
merger of National Lumberman's Bank and Trust Com


$160,428,000
240,000
162,420,000

In
To be
operation operated
8
0
8

pany, Muskegon, Mich. ("Merging Bank"), into NLB
National Bank of Muskegon (Organizing), Muskegon
("Charter Bank"), under the charter of NLB National
Bank of Muskegon, and with the title of National
* Asset figures are as of call dates immediately before and
after transaction.

131

Lumberman's Bank and Trust Company. The subject
proposal rests upon an agreement executed between
the proponent banks, and is incorporated herein by
reference, the same as if fully set forth.
Merging Bank has operated as a National Banking
Association since the bank was granted charter number 4840 by this Office on January 16, 1893. As of
March 31, 1978, the bank had total commercial bank
deposits aggregating approximately $138.2 million.
By action dated June 22, 1978, this Office granted
preliminary approval to organize a new National Bank
to be known as "NLB National Bank of Muskegon"
(Charter Bank). The new bank application was sponsored by principals of First Michigan Bank Corporation, Zeeland, Mich., a registered multibank holding
company that as of December 31, 1977, had three
banking subsidiaries with total deposits of $188.8 million. The primary function of Charter Bank is to serve
as the vehicle for the acquisition of the successor by
merger to Merging Bank by the bank holding company; and, to date, Charter Bank has no operating history.
This application was filed prior to the November 6,
1978, effective date of the Comptroller's Community
Reinvestment Act regulations, 12 CFR 25. However,
pursuant to the Community Reinvestment Act, Public
Law No. 95-128, available information relevant to the

bank's record of meeting its community credit needs
was reviewed, revealing no evidence to suggest that
the applicants are not meeting the credit needs of their
community, including low and moderate income neighborhoods.
Accordingly, applying the statutory criteria, it is the
conclusion of this Office that approval of the subject
proposal would have the effect of merely combining an
existing commercial bank with a non-operating entity;
and as such, would have no adverse impact on any
relevant area of consideration. The application is thus
deemed to be not adverse to the public interest and
should be, and hereby is, approved.
December 29, 1978

SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed merger is part of a plan through which
National Lumberman's Bank and Trust Company
would become a subsidiary of First Michigan Bank
Corporation, a bank holding company. The instant
merger, however, would merely combine an existing
bank with a non-operating institution; as such, and
without regard to the acquisition of the surviving bank
by First Michigan Bank Corporation, it would have no
effect on competition.

THE FIRST NATIONAL BANK OF WACO,
Waco, Tex., and First Waco Bank, National Association, Waco, Tex.
Banking offices
Names of banks and type of transaction

Total
assets

The First National Bank of Waco, Waco, Tex. (2189), with
and First Waco Bank, National Association, Waco, Tex. (2189), which had
merged February 9, 1979, under the charter of the latter bank (2189) and title "The First National
Bank of Waco." The merged bank at date of merger had

COMPTROLLER'S DECISION
Application has been made to the Office of the Comptroller of the Currency requesting prior permission to
merge The First National Bank of Waco, Waco, Tex.
("Merging Bank"), into First Waco Bank, National Association (Organizing), Waco, Tex. ("Charter Bank"),
under the charter of First Waco Bank, National Association, and with the title of "The First National Bank of
Waco." The subject application rests on an agreement
executed between the proponent banks and is incorporated herein by reference, the same as if fully set
forth.
Merging Bank was granted National Banking Association charter number 2189 by this Office on September 24, 1874, and as of June 30, 1978, had total commercial bank deposits of $170.2 million.
On May 16, 1978, this Office granted preliminary approval for the organization of Charter Bank, and to
date, the new bank has no operating history. Charter

132


In
To be
operation operated

$209,495,000
240,000
209,103,000

Bank was organized by principals of PanNational
Group, Inc., El Paso, Tex. ("PanNational Group"), a
registered multibank holding company that currently
owns 99.1 percent, less directors' qualifying shares, of
the outstanding voting shares of Merging Bank. The
primary function of Charter Bank is to facilitate the acquisition of the remaining outstanding voting shares of
Merging Bank, whereby PanNational Group would own
100 percent, less directors' qualifying shares, of the
outstanding voting shares of Merging Bank through
the resulting bank.
The proposed merger would merely have the effect
of combining an existing commercial banking institution with a non-operating entity; as such, would produce no adverse effect upon any relevant area of
consideration. This application was filed prior to the
November 6, 1978, effective date of the Comptroller's
Community Reinvestment Act regulations, 12 CFR 25.
However, pursuant to the Community Reinvestment
Act, Public Law No. 95-128, available information rele-

vant to the bank's record of meeting its community
credit needs was reviewed, revealing no evidence to
suggest that the applicants are not meeting the credit
needs of their community including low and moderate
income neighborhoods.
Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that this application is not adverse to the public
interest and should be, and hereby is, approved.
January 9, 1979

SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed merger is part of a plan through which
First National Bank of Waco would become a subsidiary of PanNational Group, Inc., a bank holding company. The instant merger, however, would merely combine an existing bank with a non-operating institution;
as such, and without regard to the acquisition of the
surviving bank by PanNational Group, Inc., it would
have no effect on competition.

THE LUFKIN NATIONAL BANK,
Lufkin, Tex., and New Lufkin National Bank, Lufkin, Tex.
Banking offices
Names of banks and type of transaction

Total
assets

The Lufkin National Bank, Lufkin, Tex. (5797), with
and New Lufkin National Bank, Lufkin, Tex. (5797), which had
merged March 1, 1979, under the charter of the latter bank (5797) and title "The Lufkin National
Bank." The merged bank at date of merger had

COMPTROLLER'S DECISION
Pursuant to the statutory requirements of the Bank
Merger Act (12 USC 1828(c)), an application has been
filed with the Office of the Comptroller of the Currency
that requires prior written consent in order to effectuate
the proposed merger of The Lufkin National Bank,
Lufkin, Tex. ("Merging Bank"), into New Lufkin National
Bank (Organizing) Lufkin, Tex. ("Charter Bank"), under
the charter of New Lufkin National Bank, and with the
title of "The Lufkin National Bank." The application is
based on an agreement executed between the proponent banks and is incorporated herein by reference,
the same as if fully set forth.
By action dated September 6, 1978, this Office
granted preliminary approval for the organization of
Charter Bank. Sponsors were principals of First City
Bancorporation of Texas, Inc., Houston, Tex. ("FCB"),
a registered multibank holding company that controls
29 commercial banking subsidiaries with aggregate
deposits of approximately $4.7 billion. To date, Charter
Bank has no operating history.
Merging Bank was granted National Banking Association charter number 5797 by this Office on May 6,
1901. As of December 31, 1977, Merging Bank, with
total deposits of $83.1 million, ranked as the second
largest of five commercial banking organizations headquartered within Angelina County, Tex.
Approval of the subject application will facilitiate the
acquisition of all voting shares of the successor by




In
To be
operation operated

$97,742,000
120,000
97,742,000

merger to The Lufkin National Bank by FCB, and will
merely combine a non-operating entity with an existing
commercial banking institution. Accordingly, approval
of the proposal will produce no adverse impact upon
any relevant area of consideration.
This application was filed prior to the November 6,
1978, effective date of the Comptroller's Community
Reinvestment Act regulations, 12 CFR 25. However,
pursuant to the Community Reinvestment Act, Public
Law No. 95-128, available information relevant to the
bank's record of meeting its community credit needs
was reviewed, revealing no evidence to suggest that
the applicant is not meeting the credit needs of its
community including low and moderate income neighborhoods.
Application of the statutory criteria indicates that this
application is not adverse to the public interest, and
the application should be, and hereby is, approved.
January 16, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed merger is part of a plan through which
Lufkin National Bank would become a subsidiary of
First City Bancorporation of Texas, Inc., a bank holding
company. The instant merger, however, would merely
combine an existing bank with a non-operating institution; as such, and without regard to the acquisition of
the surviving bank by First City Bancorporation of
Texas, Inc., it would have no effect on competition.

133

NATIONAL BANK OF COMMERCE OF DALLAS,
Dallas, Tex., and New National Bank Commerce of Dallas, Dallas, Tex.
Banking offices
Names of banks and type of transaction

Total
assets

National Bank of Commerce of Dallas, Dallas, Tex. (3985), with
and New National Bank of Commerce of Dallas, Dallas, Tex. (3985), which had
merged March 16, 1979, under the charter of the latter bank (3985) and title "National Bank of
Commerce of Dallas." The merged bank at date of merger had

COMPTROLLER'S DECISION
Application has been made to the Office of the Comptroller of the Currency requesting prior permission to
merge National Bank of Commerce of Dallas, Dallas,
Tex. ("Merging Bank"), into New National Bank of
Commerce of Dallas (Organizing), Dallas ("Charter
Bank"), under the charter of New National Bank of
Commerce of Dallas and with the title of "National
Bank of Commerce of Dallas." The subject application
rests on an agreement executed between the proponent banks and is incorporated herein by reference,
the same as if fully set forth.
Merging Bank was granted National Banking Association charter number 3985 by this Office on March 8,
1889, and had total commercial bank deposits of
$249.5 million as of September 30, 1978.
On October 20, 1978, this Office granted preliminary
approval for the organization of Charter Bank; to date,
the bank has no operating history. The primary function of Charter Bank is to act as the acquisition vehicle
for Commerce Southwest Inc., Dallas ("Commerce
Southwest"), to acquire 100 percent, less directors'
qualifying shares, of the successor by merger to National Bank of Commerce of Dallas. On December 22,
1978, the Board of Governors of the Federal Reserve
System, pursuant to the Bank Holding Company Act of
1956, approved the application by Commerce Southwest to become a bank holding company through the
aforementioned acquisition.

In
To be
operation operated

$329,848,000
266,000
329,856,000

This merger would merely have the effect of combining an existing commercial bank with a non-operating
entity, and, as such, would produce no adverse effect
upon any relevant area of consideration. Furthermore,
the resulting bank will have an additional $250,000 in
equity capital.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
bank's record of helping to meet the credit needs of its
entire community, including low and moderate income
neighborhoods, is less than satisfactory.
Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that this application is in the public interest, and
is approved.
February 14, 1979

SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed merger is part of a plan through which
National Bank of Commerce of Dallas would become a
subsidiary of Commerce Southwest, Inc., a bank holding company. The instant merger, however, would
merely combine an existing bank with a non-operating
institution; as such, and without regard to the acquisition of the surviving bank by Commerce Southwest,
Inc., it would have no effect on competition.

GULF FREEWAY NATIONAL BANK,
Houston, Tex., and Gulf Bank, National Association, Houston, Tex.
Banking offices
Names of banks and type of transaction

Total
assets

Gulf Freeway National Bank, Houston, Tex. (14890), with
and Gulf Bank, National Association, Houston, Tex. (14890), which had
merged March 29, 1979, under the charter of the latter (14890) and title "Gulf Freeway National
Bank." The merged bank at date of merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge the Gulf Freeway National Bank, Houston, Tex.
("Gulf Freeway Bank") and Gulf Bank, National Association, Houston ("Gulf Bank"). This application is one

134


In
To be
operation operated

$22,898,000
245,000
23,143,000

part of a process whereby Southwest Bancshares, a
registered multibank holding company, will acquire
100 percent, less directors' shares, of Gulf Freeway
Bank. As part of this process, Southwest Bancshares
sponsored an application for a new national bank
charter for Gulf Bank which was preliminarily approved

by the Comptroller on October 20, 1978. To date, Gulf
Bank has no operating history.
On October 24, 1978, the Federal Reserve Board
approved Southwest Bancshares' application under
the Bank Holding Company Act, 12 USC 1841, et seq.,
to acquire 100 percent, less directors' qualifying
shares, of the successor by merger to Gulf Freeway
Bank. This merger is therefore a vehicle for a bank
holding company acquisition and merely combines a
corporate shell with an existing bank. As such, it
presents no issues under the Bank Merger Act.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
applicant's record of helping to meet the credit needs
of the entire community, including low and moderate
income neighborhoods, is less than satisfactory.

This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with the proposed merger.
February 26, 1979

SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed merger is part of a plan through which
Gulf Freeway National Bank would become a subsidiary of Southwest Bancshares, Inc., a bank holding
company. The instant merger, however, would merely
combine an existing bank with a non-operating institution; as such, and without regard to the acquisition of
the surviving bank by Southwest Bancshares, Inc., it
would have no effect on competition.

FIRST NATIONAL BANK OF CLERMONT COUNTY,
Bethel, Ohio, and First Bank of Clermont County, N.A.
Banking offices
Names of banks and type of transaction

Total
assets

First National Bank of Clermont County, Bethel, Ohio (5627), with
and First Bank of Clermont County, N.A., Bethel, Ohio (5627), which had
merged April 13, 1979, under charter of the latter bank (5627) and title "First National Bank of
Clermont County." The merged bank at date of merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge First National Bank of Clermont County, Bethel,
Ohio, ("FNB") and First Bank of Clermont County, N.A.
(Organizing), Bethel, Ohio ("1st"). This application is
one part of a process whereby Society Corporation, a
registered multibank holding company, will acquire
100 percent, less directors' qualifying shares, of FNB.
As part of this process, Society Corporation sponsored
an application for a new national bank charter for 1st
which was preliminarily approved by the Comptroller
on January 17, 1979. To date, 1st has no operating
history.
On February 7, 1979, the Federal.Reserve Board approved Society Corporation's application under the
Bank Holding Company Act, 12 USC 1841, et seq., to
acquire 100 percent, less directors' qualifying shares,
of the successor by merger to FNB. This merger is
therefore a vehicle for a bank holding company acquisition and merely combines a corporate shell with an
existing bank. As such, it presents no issues under the
Bank Merger Act.




$29,233,000
60,000
29,293,000

In
To be
operation operated
6
0
6

A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
applicant's record of helping to meet the credit needs
of the entire community, including low and moderate
income neighborhoods, is less than satisfactory.
This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with the proposed merger.
March 14, 1979

SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed merger is part of a plan through which
First National Bank of Clermont County would become
a subsidiary of Society Corporation, a bank holding
company. The instant merger, however, would merely
combine an existing bank with a non-operating institution; as such, and without regard to the acquisition of
the surviving bank by Society Corporation, it would
have no effect on competition.

135

THE HURON COUNTY BANKING COMPANY, NATIONAL ASSOCIATION,
Norwalk, Ohio, and H.C.B. National Bank of Norwalk, Norwalk, Ohio
Banking offices
Total
assets

Names of banks and type of transaction

H.C.B. National Bank of Norwalk, Norwalk, Ohio, with
and The Huron County Banking Company, National Association (16419), which had
consolidated April 30, 1979, under charter of the latter bank (16419) and title "The Huron County
Banking Company, National Association." The consolidated bank at date of consolidation had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
consolidate The Huron County Banking Company, National Association, Norwalk, Ohio ("Huron Bank") and
H.C.B. National Bank of Norwalk (Organizing),
Norwalk, Ohio ("H.C.B."). This application is one part
of a process whereby National City Corporation, a registered multibank holding company, will acquire 100
percent, less directors' shares, of Huron Bank. As part
of this process, National City Corporation sponsored
an application for a new national bank charter for
H.C.B. which was preliminarily approved by the Comptroller on December 15, 1978. To date, H.C.B. has no
operating history.
On March 23, 1979, the Federal Reserve Board approved National City Corporation application under the
Bank Holding Company Act, 12 USC 1841, et seq., to
acquire 100 percent, less directors' qualifying shares,
of the successor by merger to Huron Bank. This merger is, therefore, a vehicle for a bank holding company
acquisition and merely combines a corporate shell
with an existing bank. As such, it presents no competitive issues under the Bank Merger Act, 12 USC
1828(c). Additionally, a review of the financial and
managerial resources and future prospects of the ex-

In
To be
operation operated

$ 10,800,000
89,959,000
100,759,000

isting and proposed institutions and the convenience
and needs of the community to be served has disclosed no reason why this application should not be
approved. (See 12 USC 1842(c)(21).
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
applicant's record of helping to meet the credit needs
of the community, including low and moderate income
neighborhoods, is less than satisfactory.
This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with the proposed merger.
March 29, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed consolidation is part of a plan through
which Huron County Banking Company, National Association, would become a subsidiary of National City
Corporation, a bank holding company. The instant
transaction, however, would merely combine an existing bank with a non-operating institution; as such, and
without regard to the acquisition of the surviving bank
by National City Corporation, it would have no effect
on competition.

THE FIRST NATIONAL BANK OF PLANO,
Piano, Tex., and 1409 Avenue K National Bank, Piano, Tex.
Banking offices

Names of banks and type of transaction

Total
assets

The First National Bank of Piano, Piano, Tex. (13511), with
and 1409 Avenue K National Bank, Piano, Tex. (13511), which had
merged May 1, 1979, under the charter of the latter bank (13511) and title "The First National Bank
of Piano." The merged bank at date of merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge The First National Bank of Piano, Piano, Tex.
("First National Bank") and 1409 Avenue K National
Bank, Piano, Tex. ("1409 Avenue K Bank"). This application is one part of a process whereby Republic of
Texas Corporation, Dallas, Tex., a registered multibank
holding company, will acquire 100 percent, less directors' shares, of First National Bank. As part of this
process, Republic of Texas Corporation sponsored an

136


In
To be
operation operated

$53,656,000
240,000
53,896,000

application for a new national bank charter for 1409
Avenue K Bank which was preliminarily approved by
the Comptroller on September 26, 1978. To date, 1409
Avenue K Bank has no operating history.
On January 26, 1979, the Federal Reserve Board
approved Republic of Texas Corporation's application
under the Bank Holding Company Act, 12 USC 1841,
etseq., to acquire 100 percent, less directors' qualifying shares, of the successor by merger to First National Bank. This merger is therefore a vehicle for a

bank holding company acquisition and merely combines a corporate shell with an existing bank. As such,
it presents no competitive issues under the Bank Merger Act, 12 USC 1828(c). Additionally, a review of the
financial and managerial resources and future prospects of the existing and proposed institutions and the
convenience and needs of the community to be
served has disclosed no reason why this application
should not be approved.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
applicant's record of helping to meet the credit needs
of the entire community, including low and moderate
income neighborhoods, is less than satisfactory.

This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with the proposed merger.
March 30, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed merger is part of a plan through which
First National Bank of Piano would become a subsidiary of Republic of Texas Corporation, a bank holding
company. The instant merger, however, would merely
combine an existing bank with a non-operating institution; as such, and without regard to the acquisition of
the surviving bank by Republic of Texas Corporation, it
would have no effect on competition.

THE CITIZENS NATIONAL BANK OF DENISON,
Denison, Tex., and Citizens Bank, National Association, Denison, Tex.
Banking offices
Names of banks and type of transaction

Total
assets

The Citizens National Bank of Denison, Denison, Tex. (12728), with
and Citizens Bank, National Association (Organizing), Denison, Tex. (12728), which had
merged May 15, 1979, under the charter of the latter bank (12728) and title "The Citizens National
BanK of Denison, Denison, Tex." The merged bank at date of merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge The Citizens National Bank of Denison, Denison, Tex. ("Citizens") and Citizens Bank, National Association (Organizing), Denison, Tex. ("New Bank").
This application is one part of a process whereby
Texas American Bancshares Inc., Fort Worth, Tex., a
registered multibank holding company, will acquire
100 percent, less directors' shares, of Citizens. As part
of this process, Texas American Bancshares, Inc.,
sponsored an application for a new national bank
charter for New Bank which was preliminarily approved by the Comptroller on November 7, 1978. To
date, New Bank has no operating history.
On February 12, 1979, the Federal Reserve Board
approved Texas American Bancshares, Inc., application under the Bank Holding Company Act, 12 USC
1841, et seq., to acquire 100 percent, less directors'
qualifying shares, of the successor by merger to Citizens. This merger is therefore a vehicle for a bank
holding company acquisition and merely combines a
corporate shell with an existing bank. As such, it
presents no issues under the Bank Merger Act.




$68,135,000
127,660
68,560,000

in
operation

To be
operated

1
0

1

A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
applicants' record of helping to meet the credit needs
of the community, including low and moderate income
neighborhoods, is less than satisfactory.
This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with the proposed merger.
April 13, 1979

SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed merger is part of a plan through which
Citizens National Bank of Denison would become a
subsidiary of Texas American Bancshares, Inc., a
bank holding company. The instant merger, however,
would merely combine an existing bank with a nonoperating institution; as such, and without regard to
the acquisition of the surviving bank by Texas American Bancshares, Inc., it would have no effect on competition.

137

ANAHEIM NATIONAL BANK,
Anaheim, Calif., and ANB National Bank, Anaheim, Calif.
Banking offices
Total
assets*

Names of banks and type of transaction

Anaheim National Bank, Anaheim, Calif. (16595), with
and ANB National Bank, Anaheim, Calif. (16595), which had
merged June 30, 1979, under the charter of the latter bank (16595) and title "Anaheim National
Bank." The merged bank at date of merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge Anaheim National Bank, Anaheim, Calif. ("Anaheim Bank") and ANB National Bank, Anaheim, Calif.
("ANB"). This application is one part of a process
whereby California Bancorp, Inc., Anaheim, Calif., will
acquire 100 percent, less directors' shares, of Anaheim Bank. As part of this process, California Bancorp,
Inc., sponsored an application for a new national bank
charter for ANB which was preliminarily approved by
the Comptroller on March 13, 1979. To date, ANB has
no operating history.
On March 12, 1979, the Federal Reserve Board, pursuant to the Bank Holding Company Act, 12 USC 1841
et seq., approved the application of California Bancorp, Inc., for the formation of a bank holding company through the acquisition of 100 percent, less directors' qualifying shares, of the successor by merger
to Anaheim Bank. This merger merely combines a corporate shell with an existing bank. As such, it presents
no competitive issues under the Bank Merger Act, 12
USC 1828(c). Additionally, a review of the financial
and managerial resources and future prospects of the
existing and proposed institutions and the conven* Asset figures are as of call dates immediately before and
after transaction.

In
To be
operation operated

$17,151,000
240,000
18,360,000

ience and needs of the community to be served has
disclosed no reason why this application should not be
approved. (See 12 USC 1842(c)(21)).
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
applicant's record of helping to meet the credit needs
of the entire community, including low and moderate
income neighborhoods, is less than satisfactory.
This merger may not be consummated until proof of
compliance with 12 USC 215a(2) is submitted to the
Comptroller.
This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with the proposed merger.
May 31, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed merger is part of a plan through which
Anaheim National Bank would become a subsidiary of
California Bancorp, Inc., a bank holding company. The
instant merger, however, would merely combine an existing bank with a non-operating institution; as such,
and without regard to the acquisition of the surviving
bank by California Bancorp, Inc., it would have no effect on competition.

CITY NATIONAL BANK & TRUST CO. OF ROCKFORD,
Rockford, III., and City Bank, National Association, Rockford,
Banking offices
Names of banks and type of transaction

Total
assets

City National Bank & Trust Co. of Rockford, Rockford, III. (14511), with
and City Bank, National Association, Rockford, III. (14511), which had
merged June 30, 1979, under charter of the latter bank (14511) and title "City National Bank &
Trust Co. of Rockford." The merged bank at date of merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge City National Bank & Trust Co. of Rockford,
Rockford, III. ("CNBT"), and City Bank, National Association, Rockford, III. ("City Bank"). This application is
one part of a process whereby Rockford City Bancorp,
Inc., Rockford, III., will acquire 100 percent, less directors' shares, of CNBT. As part of this process, Rockford City Bancorp, Inc., sponsored an application for a
138



$100,970,000
258,000
100,970,000

In
To be
operation operated
2
0
2

new national bank charter for City Bank which was
preliminarily approved by the Comptroller on October
20, 1978. To date, City Bank has no operating history.
On April 19, 1979, the Federal Reserve Board, pursuant to the Bank Holding Company Act, 12 USC
1841, et seq., approved the application of Rockford
City Bancorp. Inc., for the formation of a bank holding
company through the acquisition of 100 percent, less
directors' qualifying shares, of the successor by mer-

ger to CNBT. This merger merely combines a corporate shell with an existing bank. As such, it presents no
competitive issues under the Bank Merger Act, 12
USC 1828(c). Additionally, a review of the financial
and managerial resources and future prospects of the
existing and proposed institutions and the convenience and needs of the community to be served has
disclosed no reason why this application should not be
approved. (See 12 USC 1842(c)(21)).
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
applicant's record of helping to meet the credit needs
of the entire community, including low and moderate
income neighborhoods, is less than satisfactory.

This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with the proposed merger.
May 25, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed merger is part of a plan through which
City National Bank & Trust Co. of Rockford would become a subsidiary of Rockford City Bancorp, Inc., a
bank holding company. The instant merger, however,
would merely combine an existing bank with a nonoperating institution; as such, and without regard to
the acquisition of the surviving bank by Rockford City
Bancorp, Inc., it would have no effect on competition.

FIRST NATIONAL BANK OF EVERGREEN PARK,
Evergreen Park, III., and FNEP National Bank, Evergreen Park,
Banking offices
Names of banks and type of transaction

Total
assets

First National Bank of Evergreen Park, Evergreen Park, III. (14618), with
and FNEP National Bank, Evergreen Park, III. (14618), which had
merged July 9, 1979, under charter of the latter bank (14618) and title "First National Bank of
Evergreen Park." The merged bank at date of merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge First National Bank of Evergreen Park, Evergreen Park, III. ("Merging Bank") and FNEP National
Bank (Organizing), Evergreen Park, III. ("Charter
Bank"). This application is one part of a process
whereby First Evergreen Corporation, Evergreen Park,
III., a new bank holding company, will acquire 100 percent, less directors' shares, of Merging Bank. As part
of this process, First Evergreen Corporation sponsored
an application for a new national bank charter for
Charter Bank which was preliminarily approved by the
Comptroller on January 11, 1978. To date, Charter
Bank has no operating history.
On August 9, 1978, the Federal Reserve Board approved First Evergreen Corporation application under
the Bank Holding Company Act, 12 USC 1841, et seq.,
to acquire 100 percent, less directors' qualifying
shares, of the successor by merger to Merging Bank.
This merger is therefore a vehicle for a bank holding
company acquisition and merely combines a corpo-




$258,474,000
135,000
258,609,000

In
To be
operation operated
1
0
1

rate shell with an existing bank. As such, it presents no
issues under the Bank Merger Act.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
applicants' records of helping to meet the credit needs
of the entire community including low and moderate income neighborhoods is less than satisfactory.
This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with the proposed merger.
June 6, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed merger is part of a plan through which
First National Bank of Evergreen Park would become a
subsidiary of First Evergreen Corporation, a bank holding company. The instant merger, however, would
merely combine an existing frank with a non-operating
institution; as such, and without regard to the acquisition of the surviving bank by First Evergreen Corporation, it would have no effect on competition.

139

THE FIRST NATIONAL BANK OF GALION,
Galion, Ohio, and Galion National Bank, Galion, Ohio
Banking offices
Names of banks and type of transaction

Total
assets

The First National Bank of Galion, Galion, Ohio (419), with
and Galion National Bank, Galion, Ohio, which had
consolidated August 29, 1979, under charter and title of the former (419). The consolidated bank at
date of consolidation had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
consolidate The First National Bank of Galion, Galion,
Ohio ("First"), and Galion National Bank (Organizing),
Galion, Ohio ("Galion"). This proposed consolidation is
a part of a process whereby National City Corporation,
Cleveland, Ohio, a registered multibank holding company will acquire 100 percent of the stock, less directors' qualifying shares, of First. The Comptroller
granted preliminary approval to organize Galion on
March 23, 1979. It is being organized by National City
Corporation to facilitate acquisition of Galion.
On June 8, 1979, the Federal Reserve Board approved National City Corporation's application to acquire 100 percent, less directors' qualifying shares, of
the successor by consolidation to First. This merger is
therefore a vehicle for a bank holding company acquisition and merely combines a nonoperating bank with
an existing bank. As such, it presents no competitive
issues under the Bank Merger Act, 12 USC 1828(c).
Additionally, a review of the financial and managerial
resources and future prospects of the existing and
proposed institutions and the convenience and needs
of the community to be served has disclosed no rea-

In
To be
operation operated

$26,879,000
3,450,000
30,329,000

son why this application should not be approved. (See
12 USC 1828(c)(5).
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
applicant's record of helping to meet the credit needs
of the entire community, including low and moderate
income neighborhoods, is less than satisfactory.
This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with the proposed consolidation.
July 30, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed consolidation is part of a plan through
which First National Bank of Galion would become a
subsidiary of National City Corporation, a bank holding
company. The instant transaction, however, would
merely combine an existing bank with a non-operating
institution; as such, and without regard to the acquisition of the surviving bank by National City Corporation,
it would have no effect on competition.

CITIZENS NATIONAL BANK OF LIMESTONE COUNTY,
Athens, Ala., and Limestone Bank, N.A., Athens, Ala.
Banking offices
Total
assets

Names of banks and type of transaction

Citizens National Bank of Limestone County, Athens, Ala. (16291), with
and Limestone Bank, N.A., Athens, Ala. (16291), which had
merged Sept. 12, 1979, under charter of the latter bank (16291) and title "Citizens National Bank of
Limestone County." The merged bank at date of merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge Citizens National Bank of Limestone County,
Athens, Ala. ("Citizens Bank"), and Limestone Bank,
N.A., Athens, Ala. ("Limestone Bank"). This application
is one part of a process whereby Alabama Bancorporation, Birmingham, Ala., a registered bank holding
company, will acquire 100 percent, less directors'
shares, of Citizens Bank. As part of this process, Alabama Bancorporation sponsored an application for a
new national bank charter for Limestone Bank which

140


In
To be
operation operated

$15,147,982
120,000
15,151,582

was preliminarily approved by the Comptroller on February 12, 1979. To date, Limestone Bank has no operating history.
On April 27, 1979, the Federal Reserve Board, pursuant to the Bank Holding Company Act, 12 USC 1841
et seq., approved the application of Alabama Bancorporation to acquire 100 percent, less directors' qualifying shares, of the successor by merger to Citizens
Bank. This merger merely combines a non-operating
bank with an existing bank. As such, it presents no
competitive issues under the Bank Merger Act, 12

USC 1828(c). Additionally, a review of the financial
and managerial resources and future prospects of the
existing and proposed institutions and the convenience and needs of the community to be served has
disclosed no reason why this application should not be
approved. (See 12 USC 1842(c)(21)).
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
bank's record of helping to meet the credit needs of
the entire community including low and moderate income neighborhoods is less than satisfactory.
This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for

the applicants to proceed with the proposed merger.
July 31, 1979

SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed merger is part of a plan through which
Citizens National Bank of Limestone County would become a subsidiary of Alabama Bancorporation, a bank
holding company. The instant merger, however, would
merely combine an existing bank with a non-operating
institution; as such, and without regard to the acquisition of the surviving bank by Alabama Bancorporation,
it would have no effect on competition.

LEWISVILLE NATIONAL BANK,
Lewisville, Tex., and Lewisville Bank, N.A., Lewisville, Tex.
Banking offices
Names of banks and type of transaction

Total
assets

Lewisville National Bank, Lewisville, Tex. (15104), with
and Lewisville Bank, N.A., Lewisville, Tex. (15104), which had
merged September 19, 1979, under charter of the latter bank (15104) and title "Lewisville National
Bank." The merged bank at date of merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge Lewisville National Bank, Lewisville, Tex. ("Lewisville") into Lewisville Bank, N.A., Lewisville, Tex.
("Bank"). This application is part of a process whereby
Southwest Bancshares, Inc., Houston, Tex. ("Southwest"), a registered multibank holding company, will
acquire 100 percent, less directors' qualifying shares,
of the outstanding shares of Lewisville. This Office approved the application to organize Bank on March 23,
1979. It is being organized by Southwest to facilitate
the acquisition of Lewisville.
On April 18, 1979, the Federal Reserve Board approved Southwest's application to acquire the successor by merger to Lewisville. This merger is a vehicle for
a bank holding company acquisition and would combine a bank in organization with an existing bank. It
would have no effect on competition. A review of the financial and managerial resources and future prospects of the existing and proposed institutions and the
convenience and needs of the community to be




In
To be
operation operated

$38,968,000
122,000
39,090,000

served has disclosed no reason why this application
should not be approved.
The records of this Office reveal no evidence that
the applicants' record of helping to meet the credit
needs of the entire community, including low and moderate income neighborhoods, is less than satisfactory.
This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with the proposed merger.
August 17, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed merger is part of a plan through which
Lewisville National Bank would become a subsidiary of
Southwest Bancshares, Inc., a bank holding company.
The instant merger, however would merely combine an
existing bank with a non-operating institution; as such,
and without regard to the acquisition of the surviving
bank by Southwest Bancshares, Inc., it would have no
effect on competition.

141

THE NATIONAL CITY BANK OF MARION,
Marion, Ohio, and New Marion National Bank, Marion, Ohio
Banking offices
Names of banks and type of transaction

Total
assets

New Marion National Bank, Marion, Ohio (11831), with
and The National City Bank of Marion, Marion, Ohio (11831), which had
consolidated December 10, 1979, under charter and title of the latter bank. The consolidated bank
at date of consolidation had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
consolidate The National City Bank of Marion, Marion,
Ohio ("Marion Bank"), and New Marion National Bank
(Organizing), Marion, Ohio ("New Bank"). This application was filed on September 20, 1979, and is based
on an agreement signed by the participants on September 5, 1979. On June 30, 1979, Marion Bank had
total deposits of $108.9 million.
This application is one part of a process whereby
National City Corporation, Cleveland, Ohio ("Corp"), a
registered bank holding company, will acquire 100
percent, less directors' qualifying shares, of Marion
Bank. As a part of this process, Corp sponsored an
application to charter a new national bank which was
preliminarily approved by this Office on August 24,
1979. To date, New Bank has no operating history.
This consolidation is therefore a vehicle for a bank
holding company acquisition and merely combines a
nonoperating entity with an existing commercial bank.
As such, it presents no competitive issues under the
Bank Merger Act, 12 USC 1828(c).
A review of this application and other information
available to this Office as a result of its regulatory responsibilities revealed no evidence that the applicant's

$ 16,854,000
126,417,000
142,630,000

In
To be
operation operated
0
10

10

record of helping to meet the credit needs of the community, including low and moderate income neighborhoods, is less than satisfactory.
This decision is the prior written approval required
by the Bank Merger Act in order for the applicants to
proceed with the consolidation. This approval is conditioned on the approval by the Federal Reserve Board
of an application filed pursuant to the Bank Holding
Company Act, 12 USC 1841 et seq., for Corp to acquire the successor institution by consolidation to Marion Bank. This consolidation may not be consummated prior to the expiration of the 30th day after
approval of the bank holding company application.
November 9, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed consolidation is part of a plan through
which National City Bank of Marion would become a
subsidiary of National City Corporation, a bank holding
company. The instant transaction, however, would
merely combine an existing bank with a non-operating
institution; as such, and without regard to the acquisition of the surviving bank by National City Corporation,
it would have no effect on competition.

THE CITIZENS NATIONAL BANK,
Bryan, Ohio, and New Bryan National Bank, Bryan, Ohio
Banking offices
Names of banks and type of transaction

Total
assets

The Citizens National Bank, Bryan, Ohio (13740), with
and New Bryan National Bank, Bryan, Ohio (13740), which had
consolidated November 29, 1979, under the charter and title of the former. The consolidated bank
at date of consolidation had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
consolidate The Citizens National Bank, Bryan, Ohio
("Citizens"), and New Bryan National Bank, Bryan,
Ohio ("New Bank"). This application is part of a
process whereby National City Corporation, Cleveland,
Ohio ("Corporation"), a registered multibank holding
company, will acquire 100 percent, less directors'
qualifying shares, of Citizens. New Bank is being orga
142


In
To be
operation operated

$ 97,003,000
11,625,000
108,628,000

nized by Corporation solely to facilitate the acquisition
of Citizens.
On September 28, 1979, the Federal Reserve Board
approved Corporation's application under the Bank
Holding Company Act, 12 USC 1841, et seq., to acquire 100 percent, less directors' qualifying shares, of
the successor by merger to Citizens. This consolidation merely combines a nonoperating bank with an existing bank. It would have no effect on competition.

The financial and managerial resources of both
banks are satisfactory. Their future prospects, both
separately and consolidated, are favorable. After the
consolidation, Citizens can draw on the financial and
managerial resources of Corporation. This will permit it
to more effectively serve the convenience and needs
of its community.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
applicants' records of helping to meet the credit needs
of the entire community, including low and moderate
income neighborhoods, is less than satisfactory.
This decision is the prior written approval required

by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with the proposed merger.
October 29, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed consolidation is part of a plan through
which Citizens National Bank would become a subsidiary of National City Corporation, a bank holding company. The instant transaction, however, would merely
combine an existing bank with a non-operating institution; as such, and without regard to the acquisition of
the surviving bank by National City Corporation, it
would have no effect on competition.

BELLEVILLE NATIONAL SAVINGS BANK,
Belleville, III., and Belleville National Bank, Belleville, III.
Banking offices
Names of banks and type of transaction

Total
assets

Belleville National Savings Bank, Belleville, III. (13236), with
and Belleville National Bank, Belleville, III. (13236), which had
merged December 31, 1979, under the charter and title of latter bank. The merged bank at date of
merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge Belleville National Savings Bank, Belteville, III.
("Belleville"), into and under the charter of Belleville
National Bank, Belleville, III. ("Interim Bank"). This application is one part of a process whereby MidContinent Bancshares, Inc., a proposed bank holding
company, will acquire 100 percent, less directors'
shares, of Belleville. As a part of this process, MidContinent Bancshares sponsored a charter application
for a new national bank which was preliminarily approved by this Office on May 21, 1979. To date, Interim Bank has no operating history.
On November 9, 1979, the Federal Reserve Board,
pursuant to the Bank Holding Company Act, 12 USC
1841, et seq., approved the application of MidContinent Bancshares, Inc., for the formation of a bank
holding company through the acquisition of 100 percent, less directors' shares, of the successor by merger to Belleville. This merger merely combines a corporate shell with an existing bank. As such, it presents




In
To be
operation operated

$165,811,000
120,000
165,931,000

no competitive issues under the Bank Merger Act, 12
USC 1828(c).
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
banks' records of helping to meet the credit needs of
the communities, including low and moderate income
neighborhoods, is less than satisfactory.
This decision is the prior written approval required
by the Bank Merger Act, 12 USC 1828(c), in order for
the applicants to proceed with the proposed merger.
November 29, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed merger is part of a plan through which
Belleville National Savings Bank would become a subsidiary of Mid-Continent Bancshares, Inc., a bank
holding company. The instant merger, however, would
merely combine an existing bank with a non-operating
institution; as such, and without regard to the acquisition of the surviving bank by Mid-Continent Bancshares, Inc., it would have no effect on competition.

143

FIRST NATIONAL BANK IN CONROE,
Conroe, Tex., and West Davis National Bank, Conroe, Tex.
Banking offices
Names of banks and type of transaction

Total
assets

First National Bank in Conroe, Conroe, Tex., with
and West Davis National Bank (Organizing), Conroe, Tex. (12809), which had
merged December 31, 1979, under charter of latter bank (12809) and title of "First National Bank in
Conroe." The merged bank at date of merger had

COMPTROLLER'S DECISION
This is the Comptroller's decision on an application to
merge First National Bank in Conroe, Conroe, Tex.
("FNB"), into and under the charter of West Davis National Bank (Organizing), Conroe, Tex. ("Davis"). This
application is one part of a process whereby First International Bancshares, Inc., Dallas, Tex. ("Baneshares"), a registered multibank holding company, will
acquire 100 percent, less directors' qualifying shares,
of FNB. As a part of this process, Bancshares sponsored an application for a new national bank charter
for Davis which was preliminarily approved by this Office on July 31, 1979. To date, Davis has no operating
history. This merger is therefore a vehicle for a bank
holding company acquisition and merely combines a
corporate shell with an existing bank. As such, it
presents no issue under the Bank Merger Act.
This decision is the prior written approval required
by the Bank Merger Act in order for the applicants to
proceed with the proposed merger. This approval is
conditional on the approval by the Federal Reserve
Board of an application filed pursuant to the Bank


144


In
To be
operation operated

$104,623,000
120,000
104,743,000

Holding Company Act, 12 USC 1841, et seq., for
Bancshares to acquire the successor institution by
merger to FNB. This merger may not be consummated
prior to the expiration of the 13th day after approval of
the bank holding company application.
A review of the record of this application and other
information available to this Office as a result of its regulatory responsibilities revealed no evidence that the
applicant's record of helping to meet the credit needs
of the entire community, including low and moderate
income neighborhoods, is less than satisfactory.
November 16, 1979
SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed merger is part of a plan through which
First National Bank in Conroe would become a subsidiary of First International Bancshares, Inc., a bank holding company. The instant merger, however, would
merely combine an existing bank with a non-operating
institution; as such, and without regard to the acquisition of the surviving bank by First International Bancshares, Inc., it would have no effect on competition.




APPENDIX B

Statistical Tables

Statistical Tables
Table
No.
Title
B-1
Comptrollers of the Currency, 1863 to
the present
B-2
Deputy Comptrollers of the Currency. . .
B-3
Regional administrators of national
banks, December 1979
B-4
Changes in the structure of the national
banking system, by states, 1979
B-5
Applications for national bank charters,
approved and rejected, calendar 1979 .
B-6
Applications for national bank charters
pursuant to corporate reorganizations,
by states, calendar 1979
B-7
Newly organized national banks, by
states, calendar 1979
B-8
Mergers consummated pursuant to corporate reorganizations, by states, calendar 1979
B-9
State-chartered banks converted to national banks, by states, calendar 1979 .
B-10 National bank charters issued pursuant
to corporate reorganizations, by states,
calendar 1979
B-11 National banks reported in voluntary liquidation, by states, calendar 1979
B-12 National banks merged or consolidated
with state banks, calendar 1979
B-13 National banks converted into state
banks, by states, calendar 1979
B-14 Purchases of state banks by national
banks, by states, calendar 1979
B-15 Consolidations of national banks, or national and state banks, by states, calendar 1979
B-16 Mergers of national banks, or national
and state banks, by states, calendar
1979
B-17 Mergers resulting in national banks, by
assets of acquiring and acquired
banks, 1960-1979


146


Page
147
147

Table
No.
Title
Page
B-18 Domestic assets, liabilities and capital
accounts of national banks, June 30,

1979
B-19

148

31, 1979
149

B-20

150

B-21

151

B-22

151
B-23
153
B-24
154
B-25
155

Domestic office loans of national banks,
by states, December 31, 1979
Outstanding balances, credit cards and
related plans of national banks, December 31, 1979
Income and expenses of foreign and
domestic offices and subsidiaries of national banks, by states, year ended December 31, 1979
National banks engaged in lease financing, December 31, 1979
Assets and equity capital, net income
and dividends of national banks, 19671979
Loan losses and recoveries of national

banks, 1970-1979
B-26
B-27

Consolidated assets and liabilities of
national banks with foreign operations,
December 31, 1979
Foreign branches of national banks, by
region and country, December 31, 1979
Total foreign branch assets of national
banks, year-end 1953-1979
Foreign branch assets and liabilities of
national banks, December 31, 1979 . . .

1979
157
B-28
159
B-29
160
160
165

174
182
183

184
200
201

202

Assets and liabilities of national banks,
date of last report of condition, 1972-

155
156

166

Domestic assets, liabilities and capital
accounts of national banks, December

B-30

203
204
205
206
206

Table B—1
Comptrollers of the Currency, 1863 to the present
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24

Date of
resignation

Date of
appointment

Name

May
Mar.
Feb.
Apr.
May
Apr.
May
Aug.
Apr.
Jan.
Oct.
Apr.
Feb.
Mar.
May
Dec.
Nov.
May
Oct.
Apr.
Nov.
Nov.
July
July

McCulloch, Hugh
Clarke, Freeman
Hulburd, Hiland R
Knox, John Jay
Cannon, Henry W
Trenholm, William L
Lacey, Edward S
Hepburn, A. Barton
Eckels, James H
Dawes, Charles G
Ridgely, William Barret
Murray, Lawrence 0
Williams John Skelton
Crissinger, D.R
Dawes, Henry M
Mclntosh, Joseph W
Pole, John W
O'Connor J F T
Delano Preston
Gidney, Ray M
Saxon, James J
Camp, William B
Smith, James E
Heimann, John G

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
16, 1966
5, 1973
21, 1977

Mar.
July
Apr.
Apr.
Mar.
Apr.
June
Apr.
Dec.
Sept.
Mar.
Apr.
Mar.
Apr.
Dec.
Nov.
Sept.
Apr.
Feb.
Nov.
Nov.
Mar.
July

State

8, 1865
24, 1866
3, 1872
30, 1884
1, 1886
30, 1889
30, 1892
25, 1893
31, 1897
30, 1901
28, 1908
27, 1913
2, 1921
30, 1923
17, 1924
20, 1928
20, 1932
16, 1938
15, 1953
15, 1961
15, 1966
23, 1973
31, 1976

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.
Texas.
South Dakota.
New York.

Table B-2
Deputy Comptrollers of the Currency
No.

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21

Name
Howard, Samuel T.
Hulburd, Hiland R. .
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, Jr., William
Diggs, Marshall R. .




State

Dates of tenure
May
Aug.
Mar.
Aug.
Jan.
Jan.
Aug.
Apr.
Mar.
Sept.
June
July
May
July
Jan.
July
July
Dec.
Jan.
Feb.
Jan.

9,
1,
12,
8,
5,
27,
11,
7,
12,
1,
29,
1,
21,
1,
6,
1,
6,
1,
24,
24,
16,

1863
1865
1867
1872
1886
1887
1890
1893
1896
1898
1899
1908
1923
1923
1925
1927
1927
1928
1933
1936
1938

Aug.
Jan.
Apr.
Jan.
Jan.
May
Mar.
Mar.
Aug.
June
Mar.
Feb.
Dec.
June
Nov.
Feb.
Oct.
Jan.
Jan.
Jan.
Sept.

1,
31,
24,
3,
3,
25,
16,
11,
31,
27,
2,
14,
19,
30,
30,
15,
16,
23,
15,
15,
30,

1865
1867
1872
1886
1887
1890
1893
1896
1898
1899
1923
1927
1924
1927
1928
1936
1941
1933
1938
1938
1938

New York.
Ohio.
Minnesota.
New York.
New York.
Virginia.
Indiana.
Kentucky.
South Carolina.
New York.
District of Columbia
Indiana.
Illinois.
Illinois.
Virginia.
Maryland.
Indiana.
Washington.
Georgia.
Georgia.
Texas.

147

Table B-2—Continued
Deputy Comptrollers of the Currency
No.

22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61

Name

Dates of tenure
Jan.
Oct.
May
July
Sept.
Oct.
Jan.
Sept.
Mar.
Feb.
Sept.
May
Apr.
Aug.
Sept.
Dec.
Jan.
July
Sept.
Sept.
July
July
Feb.
July
July
Feb.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Mar.
Mar.
Mar.
Nov.
Nov.
Mar.
May
July

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
Faulstich, Albert J
Motter, David C
Gwin, John D
Howland, Jr., W. A. . . .
Mullin, Robert A
Ream, Joseph M
Bloom, Robert
Chotard, Richard D. . . .
Hall, Charles B
Jones, David H
Murphy, C. Westbrook .
Selby, H. Joe
Homan, Paul M
Keefe, James T
Muckenfuss, Cantwell F.,
Wood, Billy C
Longbrake, William A. .
Odom, Jr., Lewis G. . . .
Martin, William E
Barefoot, Jo Ann

16, 1938
1, 1938
1, 1939
7, 1941
1, 1941
1, 1944
1, 1949
1, 1950
1, 1951
18, 1952
15, 1959
16, 1960
2, 1962
4, 1962
3, 1962
23, 1962
1, 1963
13, 1964
1, 1964
1, 1964
19, 1965
1, 1966
21,1967
5, 1973
5, 1973
2, 1975
31, 1975
31, 1975
31, 1975
31, 1975
31, 1975
31, 1975
27, 19.78
27, 1978
27, 1978
7, 1978
8, 1978
21, 1979
22, 1979
13, 1979

Sept.
Dec.
Aug.
Mar.
Sept.
Feb.
Aug.
May
Apr.
Dec.
Aug.
Aug.
Nov.
Oct.
July

State
30, 1938
31, 1948
31, 1941
1, 1951
30, 1944
17, 1952
31, 1950
16, 1960
1, 1962
31, 1962
31,1962
3, 1962
15, 1966
26, 1963
18, 1975

Mar. 3, 1978
June 30, 1966
Sept. 26, 1975
June 1, 1967
Oct. 26, 1974
Dec.
Mar.
Sept.
June
Feb.
Nov.

31,
27,
8,
30,
28,
25,

1974
1978
1978
1978
1978
1977

Sept. 20, 1976
Dec. 30, 1977

California.
Iowa.

Iowa.
Iowa.
Nebraska.
Nebraska.
Texas.
New York.
Virginia.
Colorado.
Ohio.
Missouri.

Texas.
Connecticut.
Ohio.
Iowa.
Virginia.
Iowa.
Massachusetts.
Wisconsin.
Louisiana.
Ohio.
Mississippi.
Georgia.
Kansas.
Pennsylvania.
New York.
Missouri.
Pennsylvania.

Texas.
Maryland.
Texas.
Nebraska.
Massachusetts.
Alabama.

Texas.
Wisconsin.
Alabama.

Texas.
Connecticut.

Table B-3
Regional administrators of national banks, December 1979
Region

Name

Headquarters

Ralph W. Gridley

Boston, Mass

2
3
4
5

Thomas W. Taylor . . .
R. Coleman Egertson
Larry T. Gerzema
Michael A. Mancusi . .

New York, N.Y. .
Philadelphia, Pa..
Cleveland, Ohio .
Richmond, Va. . .

6
7
8
9

Robert J. Herrmann . .
Rufus O. Burns, Jr. . .
Dean S. Marriott
Kenneth W. Leaf
John R. Burt
Clifton A. Poole, Jr. . .
Peter C. Kraft
M. B. Adams
Kent D. Glover

Atlanta, Ga
Chicago, III
Memphis, Tenn
Minneapolis, Minn. . .
Kansas City, Mo. . . .
Dallas, Tex
Denver, Colo
Portland, Oreg
San Francisco, Calif.

10
11
12
13
14

148



States
Connecticut, Maine, Massachusetts, New Hampshire, Rhode
Island, Vermont.
New Jersey, New York, Puerto Rico, Virgin Islands.
Pennsylvania, Delaware.
Indiana, Kentucky, Ohio.
District of Columbia, Maryland, North Carolina, Virginia, West
Virginia.
Florida, Georgia, South Carolina.
Illinois, Michigan.
Alabama, Arkansas, Louisiana, Mississippi, Tennessee.
Minnesota, North Dakota, South Dakota, Wisconsin.
Iowa, Kansas, Missouri, Nebraska.
Oklahoma, Texas.
Arizona, Colorado, New Mexico, Utah, Wyoming.
Alaska, Idaho, Montana, Oregon, Washington.
California, Guam, Hawaii, Nevada.

Table B-4
Changes in the structure of the national banking system, by states, 1979
Consolidated and merged
under 12 USC 215
In
operation
Dec. 31,
1978

Organized
and opened
for business
during 1979

Consolidated

Merged

4,564

43

3

Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia . . . .
Florida

99
6
3
69
53
137
19
5
16
236

2
0
0
0
3
2
0
1
0
5

0
0
0
0
0
0
0
0
0
0

Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine

64
2
6
419
121
99
151
79
54
17

0
1
1
0
1
0
0
0
1
0

0
0
0
0
0
0
0
0
0
0

Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire

34
73
125
205
37
101
56
117
4
39

0
0
2
0
1
0
0
0
0
0

New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island

96
40
124
27
43
217
191
6
226
5

South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming

18
32
72
609
10
13
88
20
106
129
46

12 USC 214

United States

In
operation
Dec. 31,
1979

Converted to
state banks

Merged or
consolidated
with state
banks

3

51

39

4,448

0
0
0
0
0

1
0
0
0
0

o

o

o

o
0
0

1
0
0
1
7
0
0
0
0
0

0
0
0
0
7
0
0
0
0
9

99
6
3
68
42
139
19
6
16
221

0
0
0
0
1
0
0
0
0
0

0
0
0
1
0
0
0
0
0
0

0
0
0
1
0
0
0
0
0
0

1
0
0
6
2
0
3
0
0
1

0
0
0
1
0
0
0
0
0
2

63
3
7
410
119
99
148
79
55
14

0
0
0

1
0
0

0
0
0

0
0
0

o
o

o
o

o
o

o
o

0
0
0
0
0

0
0
0
0
1

0
0
0
0
0

0
0
0
0
0

0
0
4
0
0
3
0
0
0
2

2
2
0
0
0
0
0
0
0
0

31
71
123
205
38
98
56
117
4
36

0
0
0
0
0
0
3
0
0
0

0
0
3
0
0
0
0
0
0
0

3
0
1
0
0
37
0
0
0
0

0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

0
0
3
0
2
0
4
0
1
0

0
0
1
1
0
3
0
0
2
0

93
40
116
26
41
177
190
6
223
5

0
1
0
12
1
0
0
1
1
3
1

0
0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
7
0
0
0
0

0
0
0
0
0
0
0
0
0
0
0

0
0
0
1
0
0
0
0
0
0
0

0
0
3
4
0
1
1
0
0
1
0

0
0
0
1
0
0
8
0
0
0
0

18
33
69
615
11
12
72
21
107
131
47

Insolvencies

Liguidated

62

1

0
0
0
0
0
0
0
0
11

0
0

o

0

0

NOTE: Does not include one nonnational bank in the District of Columbia supervised by the Comptroller of the Currency.
For summary of changes 1863-1977, see Table B-4 in Annual Report, 1977.




149

Table B-5
Applications for national bank charters,* approved and rejected, by states, calendar 1979
ALABAMA

Exchange National Bank of Birmingham,
Birmingham

Approved

Rejected

NEVADA

Nevada County National Bank, Grass Valley
June 14

NEW

Approved

Rejected

Apr. 5

YORK

ARKANSAS

New York City

National Bank of Arkansas in North Little Rock,
North Little Rock

NORTH CAROLINA

June 1?

Aug. 6
Mar. 4

Fayetteville

CALIFORNIA

Carson
Monterey Park National Bank, Monterey Park. . .
Orange National Bank, Orange
San Francisco
Newport Harbor National Bank, Newport Beach.
San Dieguito National Bank, Encinitas
California National Bank, San Francisco
University National Bank and Trust Company,
Palo Alto
California Pacific National Bank, Los Angeles . .

Feb . 9
Apr . 5
Apr . 5
Apr. 19
June 14
June 28
Oct. 19

Knox National Bank, Knoxville

Nov. 28
Dec.
Mar . 2
Mar. 16
Apr. 19
June37
M) / 2
Oct . 1
Nov. 13

Nov

p
>

Feb

9

Feb

Mar.
Oct.

9

7

ooo

Feb

GEORGIA

Dahlonega
IDAHO

Twin River National Bank, Lewiston. . . .

Apr

19

ILLINOIS

Schaumberg
First National Bank of Orland Park, Orland Park.

Aua

3

IOWA

Community National Bank of Muscatine,
Muscatine

Sept 30

KANSAS

Nov.

Andover ....
KENTUCKY

Feb

Lewisport

9

LOUISIANA

New Orleans
Southwest National Bank of Lafayette, Lafayette

Feb . 9
Mar

22

MICHIGAN

Pacesetter Bank Lansing N.A., Lansing
Huron National Bank, Roger City

Feb . 8
Mar. 16

MINNESOTA

Community National Bank, Branch
Tri-County National Bank, Forest Lake

Nov. 12
Dec 1?

MISSISSIPPI

Bank of Jackson, N.A., Jackson

Sept. ?9

MISSOURI

Battlefield National Bank, Springfield . . .

Aor

19

Parkway National Bank, Farmers Branch
Austin National Bank, Northwest, Austin
Fidelity National Bank, Austin
First National Bank, Seminole
First National Bank of San Benito, San Benito . .
The Woodlands National Bank, Woodlands . . . .
Angelina National Bank of Lufkin, Lufkin
First National Bank, Boerne
Liberty National Bank, Dallas
West El Paso National Bank, El Paso
First City Bank - Greenspoint, N.A., Houston . . .
First National Bank, Sherman
Woodforest National Bank, Harris County
First United Bank - Arlington N.A., Arlington. . . .
Mercantile National Bank, Arlington
Unincorporated Area of Harris County
First United Bank - Richland N.A., North Richland Hills
Pioneer National Bank, Richardson
Universal City Bank, N.A., Universal City
First National Bank of Dayton, Dayton
Citizens National Bank, Victoria
Westhollow National Bank, Houston
Exchange National Bank, San Antonio
Humble National Bank, Humble
Nacogdoches
Texas Commerce Bank Northwest Freeway
N.A., Unincorporated Area of Harris County . .
Southern National Bank of Corpus Christi,
Corpus Christi
Town North National Bank, Longview
Longview
City National Bank, Weslaco
East El Paso National Bank, El Paso
American National Bank, Abilene
Commerce Parkway Bank, N.A., Addison
Mid-Cities National Bank, Hurst
Onion Creek National Bank, Travis County
National Bank of Commerce - South, Austin....
Southwest National Bank, Austin
Plaza National Bank, Dallas

Dec

Jan. 23
Feb. 7
Feb. 7
Feb. 7
Feb. 8
Feb. 8
Feb. 9
Feb. 24
Mar. 30
Mar. 30
Mar. 30
Apr. 6
Apr. 5
Apr. 4
Apr. 4
Apr. 4
Apr. 12
May 3
May 17
May 23
May 23
May 24
June 4
July 3
Aug. 2
Aug. 3
Aug. 3
Sept. 30
Oct. 1
Nov.
Nov.
Dec.
Dec.
Dec.

12
21
11
12
12
Dec. 17

Dec. 30
Dec. 30
Dec. 30

First Security Bank of Sandy, N.A., Sandy . . .

Nov. 1

WEST VIRGINIA

Upshur National Bank, Buckhannon .
American National Bank, Glen Daniel

Feb. 24
Aug. 2

WISCONSIN

T h e M a r i n e Trust C o . , N.A., M i l w a u k e e . . . .

June 22

WYOMING

Mountain Plaza National Bank, Casper....

5

* Does not include applications for conversion or pursuant to corporate reorganization.


150


Oct. 5

UTAH

NEBRASKA

Sioux Land National Bank, Sioux City

Jan. 12
Mar. 28
Oct. 29

TEXAS

FLORIDA

Pace
Alexander Hamilton National Bank, North
Lauderdale
The National Trust Company, Fort Myers
Miami Beach

Mercantile Bank, N.A., Moore
American National Bank, Woodward
Commercial National Bank, Oklahoma City
TENNESSEE

COLORADO

Lakewood
Valley National Bank of Cortez, Cortez
Community National Bank, Dillon
First Bank of Governor's Ranch, Denver
Louisville Mountain Bank, N.A., Boulder County.
Southeast National Bank, Denver
Foothills National Bank, Fort Collins

OKLAHOMA

Nov. 2

Table B-6
Applications for national bank charters pursuant to corporate reorganizations, by states, calendar 1979
ALABAMA

Approved

Limestone Bank N.A., Athens . .

Galion National Bank, Galion
The Huntington National Bank, Columbus
New Bryan National Bank, Bryan
New Marion National Bank, Marion
The FBG National Bank of Kenton, Kenton

CALIFORNIA

ANB National Bank, Anaheim . .

Mar. 7

ILLINOIS

Urbana National Bank, Urbana
Belleview National Bank, Belleview

.

Jan. 17
May 21

First National Interim Bank of McMinnville.
McMinnville
TEXAS

Aug. 3

Lewisville Bank N.A., Lewisville
Mar. 22
West Davis National Bank, Conroe
July 27
West Freeway National Bank, Fort Worth
Aug. 16
New Gateway National Bank of Beaumont,
Beaumont
Sept. 27
Wurzbach Road National Bank, San Antonio . . . Oct. 10

MASSACHUSETTS

NEW HAMPSHIRE

New Hampshire Bank N.A., Manchester. . .

Aug. 19

Aug. 3

Old Colony Bank Berkshire County, N.A.,
Pittsfield

Rejected

Mar. 22
June 28
Aug. 3
Aug. 16
Oct. 22

OREGON

IOWA

First National Interim Bank, Sioux City. . .

/Approved

Rejected

Feb. 9

Nov. 16

VIRGINIA

NEW JERSEY

New Garden State National Bank, Paramus . . . .
Midlantic National Bank/Atlantic, Atlantic City. . .

Colonial American National Bank-Clifton Forge,
Clifton Forge

Nov. 16
Oct. 29

Dec. 10

WISCONSIN

OHIO

1st Bank of Clermont County N.A., Bethel . .

First Bank and Trust Company Racine N.A.,
Racine

Jan. 12

Nov. 13

Table B-7
Newly organized national banks, by states, calendar 1979
Charter
No.

Title and location of bank
Total, United States: 41 banks

Total capital
accounts
$66,569,520

ALABAMA

16783
16779

Exchange National Bank of Birmingham, Birmingham
Central Bank of Dothan, N.A., Dothan

16764
16792
16811

Westwood National Bank, Los Angeles
Santa Fe National Bank, Norwalk
Orange National Bank, Orange

1,200,000
1,500,000

CALIFORNIA

4,558,520
2,000,000
2,500,000

COLORADO

16765
16808

FirstBank of West Arvada, National Association, Arvada
Valley National Bank of Cortez, Cortez

1,000,000
1,750,000

DELAWARE

16773

First National Bank of Georgetown, Georgetown

1,150,000

FLORIDA

16776
16793
16800
16804

The Hemisphere National Bank, Miami
All American National Bank, Virginia Gardens
Charlotte County National Bank, Unincorporated Area of Charlotte County
The Gold Coast National Bank, Unincorporated Area of Dade County

2,500,000
2,000,000
2,000,000
3,000,000

HAWAII

16777

Bank of Maui, N.A., Kahului

1,500,000

IDAHO

16814

Twin River National Bank, Lewiston

1,700,000

INDIANA

16782

Clarksville National Bank, Clarksville




1,500,000

151

Table B-7—Continued
Newly organized national banks, by states, calendar 1979
Charter
No.

Title and location of bank

Total capital
accounts

LOUISIANA

16817

Southwest National Bank of Lafayette, Lafayette . . .

$3,125,000

MICHIGAN

16785
16802

Michigan National Bank - Ann Arbor, Ann Arbor
Northern National Bank, Grayling

2,500,000
1,300,000

MISSISSIPPI

16810

Bank of Jackson, N.A., Jackson . . .

1,600,000

OKLAHOMA

16816
16796
16807

Mid-West National Bank, Mid-West City
Mercantile Bank, N.A., Moore
American National Bank, Woodward

2,000,000
1,200,000
1,250,000

SOUTH DAKOTA

16797

Tri-State National Bank, Belle Fourche. . .

1,500,000

TEXAS

16791
16794
16795
16824
16812
16784
16770
16799
16774
16809
16806
16772

Security National Bank, Austin
Austin National Bank Northwest, Austin
First National Bank, Boerne
Forestwood National Bank of Dallas, Dallas
Texas Commerce Bank - Southbelt N.A., Houston
League City National Bank, League City
Texas National Bank of Midland, Midland
The American National Bank of Mount Pleasant, Mount Pleasant
Salado National Bank, Salado
First National Bank of San Benito, San Benito
First National Bank, Seminole
Texas Commerce Bank - Katy Freeway N.A., Unincorporated Area of Harris County .

1,500,000
1,500,000
2,000,000
2,000,000
1,700,000
1,250,000
2,000,000
1,250,000
750,000
1,250,000
1,250,000
1,700,000

UTAH

16813

First Security Bank of Richfield, N.A., Richfield . . .

1,000,000

WASHINGTON

16819

National Bank of Bremerton, Bremerton . . .

1,500,000

WISCONSIN

16787
16801
16815

First National Bank, Minocqua and Woodruff, Minocqua
Community National Bank, Mukwonago
Northern Security National Bank of Rhinelander, Pelican

1,086,000
1,500,000
1,000,000

WYOMING

16818

Wyoming National Bank of East Casper, Casper


152


500,000

Table B-8
Mergers* consummated pursuant to corporate reorganizations, by states, calendar 1979
(Dollar amounts in thousands)
Total
capital
accounts

Operating bank
New bank
Resulting bank

Effective
date

Total
assets

ALABAMA

Sept. 12

Citizens National Bank of Limestone County, Athens
L i m e s t o n e Bank N.A., Athens
Charter issued S e p t e m b e r 10, 1979
Citizens National Bank of Limestone County, Athens . . .

....

$1,180

$15,151

1,990

18,360

....

11,878

165,931

...

6,787

100,970

16,576

258,609

....

10,257

160,428

....

2,367

30,505

6,520

108,628

2,415

30,329

5,793

100,759

11,770

142,630

6,955

104,743

18,710

329,859

5,081

68,560

CALIFORNIA

June 30

Anaheim National Bank, Anaheim
ANB National Bank, Anaheim
Charter issued June 27, 1979
Anaheim National Bank, Anaheim
ILLINOIS

Dec. 31

June 30

July 9

Belleville National Savings Bank, Belleville
Belleville National Bank
Charter issued December 31, 1979
Belleville National Bank, Belleville
City National Bank and Trust Company of Rockford, Rockford
City Bank, N.A., Rockford
Charter issued June 28, 1979
City National Bank & Trust Company of Rockford, Rockford . . .
First National Bank of Evergreen Park, Evergreen Park
FNEP National Bank, Evergreen Park
Charter issued July 6, 1979
First National Bank of Evergreen Park
MICHIGAN

Jan. 30

National Lumberman's Bank and Trust Company, Muskegon
NLB National Bank of Muskegon, Muskegon
Charter issued January 29, 1979
National Lumberman's Bank and Trust Company, Muskegon . .
OHIO

Apr. 13

Nov. 29C

Aug. 29C

Apr. 30C

Dec. 10C

First National Bank of Clermont County, Bethel
1st Bank of Clermont County, N.A., Bethel
Charter issued April 12, 1979
First National Bank of Clermont, Bethel . . .
The Citizens National Bank, Bryan
New Bryan National Bank, Bryan
Charter issued August 3, 1979
The Citizens National Bank, Bryan
The First National Bank of Galion, Galion
Galion National Bank, Galion
Charter issued August 28, 1979
The First National Bank of Galion, Galion
The Huron Banking Company, National Association, Norwalk
H.C.B. National Bank of Norwalk, Norwalk
Charter issued April 30, 1979
The Huron County Banking Company, National Association, Norwalk
The National City Bank of Marion, Marion
New Marion National Bank, Marion
Charter issued December 10, 1979
The National City Bank of Marion, Marion . . .
TEXAS

Dec. 31

Mar. 16

May 15

First National Bank of Conroe, Conroe
West Davis National Bank, Conroe
Charter issued December 28, 1979
First National Bank in Conroe, Conroe
National Bank of Commerce of Dallas, Dallas
New National Bank of Commerce of Dallas, Dallas
Charter issued March 15, 1979
National Bank of Commerce of Dallas, Dallas
The Citizens National Bank of Denison, Denison
Citizens Bank, National Association, Denison
Charter issued May 9, 1979
The Citizens National Bank of Denison, Denison. . . ,
City National Bank, Fort Worth
5600 Lancaster National Bank, Fort Worth
Charter issued December 29, 1978




....

153

Table B-8—Continued
Mergers* consummated pursuant to corporate reorganizations, by states, calendar 1979
(Dollar amounts in thousands)

Jan. 2

Mar. 29

Sept. 19

Mar. 1

May 1

Feb. 9

Total
capital
accounts

Operating bank
New bank
Resulting bank

Effective
date

Total
assets

$5,896

$74,467

....

2,238

23,143

....

2,653

39,090

....

4,859

97,742

....

2,711

53,896

15,475

5600 Lancaster National Bank Fort Worth
Gulf Freeway National Bank, Houston
Gulf Bank, N.A., Houston
Charter issued March 27, 1979
Gulf Freeway National Bank, Houston . . . .
Lewisville National Bank, Lewisville
Lewisville Bank, N.A., Lewisville
Charter issued September 13, 1979
Lewisville National Bank
The Lufkin National Bank, Lufkin
New Lufkin National Bank, Lufkin
Charter issued February 26, 1979
The Lufkin National Bank, Lufkin
The First National Bank of Piano, Piano
Avenue K National Bank, Piano
Charter issued April 24, 1979
First National Bank of Piano, Piano
The First National Bank of Waco, Waco
First Waco Bank, National Association, Waco
Charter issued February 7, 1979
The First National Bank of Waco, Waco

209,103

* Includes consolidations effected pursuant to corporate reorganizations. Does not include transactions involving more than a single operating
bank. Those transactions are found in Table B-16.
C Consolidation.

Table B-9
State-chartered banks converted to national banks, by states, calendar 1979

Charter
No.

Title and location of bank

Effective
date of
charter

Surplus, undivided profits
and reserves

Total assets

$12,500

Total: 1 bank

Outstanding
capital stock

$2,555

$37,328

12,500

2,555

37,328

FLORIDA

16786

Sun First National Bank of Polk County, Auburndale,
conversion of Sun Bank of Polk County, Auburndale


154


June

27

Table B-10
National bank charters issued pursuant to corporate reorganizations, by states, calendar 1979
Charter
No.

Date of
Issuance

Title and location of bank
Total: 20 banks
ALABAMA

16291

Limestone Bank, N.A., Athens. . .

Sept.

10

June

27

Dec.
July
June

31
6
28

Jan.

29

Apr.
Aug.
Dec.
Aug.
Dec.
Apr.

12
3
28
28
10
30

Dec.
Mar.
May
Mar.
Sept.
Feb.
Apr.
Feb.

28
15
9
27
13
26
24
7

CALIFORNIA

16595

ANB National Bank, Anaheim . . .
ILLINOIS

13236
14618
14511

Belleville National Bank, Belleville
FNEP National Bank, Evergreen Park
City Bank, National Association, Rockford
MICHIGAN

4840

NLB National Bank of Muskegon, Muskegon. . .
OHIO

5627
13740
7745
419
11831
16419

First Bank of Clermont County, N.A., Bethel
New Bryan National Bank, Bryan
The Huntington National Bank, Columbus
Galion National Bank, Galion
New Marion National Bank, Marion
H.C.B. National Bank of Norwalk, Norwalk
TEXAS

12809
3985
12728
14890
15104
5797
13511
2189

West Davis National Bank, Conroe
New National Bank of Commerce of Dallas, Dallas .
Citizens Bank N.A., Denison
Gulf Bank N.A., Houston
Lewisville Bank N.A., Lewisville
New Lufkin National Bank, Lufkin
Avenue K National Bank, Piano
First Waco Bank N.A., Waco

Table B-11
National banks reported in voluntary liquidation, by states, calendar 1979
(Dollar amounts in thousands)

Title and location of bank

Total capital
accounts of
liquidated
Date of
liquidation
bank*

Total: 3 national banks . . .

$9,480

ALABAMA

Southern National Bank, Birmingham (16489), Birmingham, absorbed by Exchange National Bank of Birmingham,
Birmingham (16783)

June

14

2,949

July

16

(28)

Dec.

7

6,559

ILLINOIS

Gateway National Bank, Chicago (14803), Chicago, absorbed by Independence Bank of Chicago, Chicago
Mercantile National Bank of Chicago (14419), Chicago, absorbed by American National Bank and Trust Company
of Chicago (13216), Chicago
* Includes subordinated notes and debentures, if any.



155

TableB-12
National banks merged or consolidated with state banks, by states, calendar 1979
(Dollar amounts in thousands)

Title and location of bank

Total capital
accounts of
national
banks*

Effective
date

Total: 39 banks ,

$259,133

CALIFORNIA

First National Bank of Fresno, Fresno (15007), Tahoe National Bank, South Lake Tahoe (15217), and Valley Bank,
National Association, Livermore (15305) merged into Central Bank, Oakland, under title "Central Bank"
Irvine National Bank, Irvine (16168), merged into Heritage Bank, Anaheim, under title "Heritage Bank"
Sierra National Bank, Petaluma (15174), merged into United California Bank, Los Angees, under title "United
California Bank"
Surety National Bank, Encino (15368), merged into California Overseas Bank, San Francisco, under title
"California Overseas Bank"
West Coast National Bank, Oceanside (15220), merged into La Jolla Bank & Trust Company, La Jolla, under title
"La Jolla Bank & Trust Company"

Dec.
Dec.

31
31

5,144
3,706

Mar.

27

1,697

Nov.

8

1,450

Jan.

2

2,029

FLORIDA

Bamett Bank of Deland, National Association, Deland (13388), merged into Barnett Bank of Daytona Beach,
Daytona Beach, under title "Barnett Bank of Volusia County"
First Marine National Bank and Trust Company of Lake Worth (14356), First Marine National Bank and Trust
Company, Jupiter/Tequesta (15918), merged into First Marine Bank and Trust Company of Palm Beaches,
Rivera, under title "First Marine Bank and Trust Company of Palm Beaches"
Flagship Bank of West Orlando, National Association, Orlando (15948), merged into Flagship Bank of Orlando,
Orlando, under title "Flagship Bank of Orlando"
Florida Coast Bank of Coral Springs, National Association, Margate (16386), merged into Florida Coast Bank of
Pompano Beach, Pompano Beach, under title "Florida Coast Bank of Broward County"
Pan American Bank of Broward County, National Association, Oakland Park (15162), merged into Pan American
Bank of Inverrary, Lauderhill, under title "Pan American Bank of Broward"
Southeast First National Beach Bank, Jacksonville Beach (14896), merged into Southeast First Bank of
Jacksonville, Jacksonville, under the title "Southeast Bank of Jacksonville"
Southeast National Bank of Panama City, Panama City (16363), merged into Southeast Beach State Bank, Bay
County, under title "Southeast Bank of Panama City"
The Exchange National Bank of Tampa, Tampa (4949), merged into The Exchange Bank of Temple Terrace,
Temple Terrace, under title "The Exchange Bank of Temple Terrace"

Mar.

7,192

23

5,008

Jan.

1

1,020

Oct.

1

4,012

Jan.

1

2,728

Nov.

16

4,427

Oct.

22

1,156

Dec.

1

23,863

Mar.

10

1,226

Jan.

31

1,624

Feb.

1

1,716

Jan.

1

4,233

Feb.

26

8,926

Nov.

9

27,818

Sept.

4

1,204

Mar.

30

2.382

Oct.

1

1,597

Apr.

3

19,959

May

14

1,574

June

1

1,532

Sept.

ILLINOIS

First National Bank of Jacksonville (15371), merged into Elliott State Bank, Jacksonville, under title "Elliott State
Bank"
MAINE

Springvale National Bank, Springvale (13730), merged into Depositors Trust Company of Portland, Portland,
under title "Depositors Trust Company of Southern Maine"
The Liberty National Bank in Ellsworth, Ellsworth (14303), merged into Depositors Trust Company of Bangor,
Bangor, under title "Depositors Trust Company of Eastern Maine"
MARYLAND

Chesapeake National Bank, Towson (15249), merged into American Bank of Maryland, Silver Spring, under title
"First American Bank of Maryland"
University National Bank, Rockville (15365), merged into The Equitable Trust Company, Baltimore, under title "The
Equitable Trust Company"
MASSACHUSETTS

Baybank Middlesex, National Association, Burlington (614), merged into Baybank Newton-Waltham Trust
Company, Waltham, under title "Baybank Newton-Waltham Trust Company"
The Merchants National Bank of Newburyport, Newburyport (1047), merged into Naumkeag Trust Company,
Salem, under title "Naumkeag Trust Company"
NEW YORK

Genesee Valley National Bank and Trust Company of Genesee (886), merged into Key Bank of Central New York,
Syracuse, under title "First Trust and Deposit Company"
NORTH CAROLINA

Cape Fear Bank and Trust Company, Fayetteville, and Capital National Bank, Raleigh (16100), merged into
Waccamaw Bank and Trust Company, Whiteville, under title "United Carolina Bank, Whiteville"
OHIO

Heritage Bank, National Association, Steubenville (2160), Heritage Bank, National Association, Salem (973), and
Heritage Bank, National Association, Hopedale (6938), merged into Heritage Bank, Toronto, under title
"Heritage Bank"
PENNSYLVANIA

The First National Bank of Millville, Millville (5389), merged into Northern Central Bank, Williamsport, under title
"Northern Central Bank"
The Union National Bank of Lewisburg, Lewisburg (784), merged into Central Counties Bank, State College, under
title "Central Counties Bank"
'


156


Table B-12—Continued
National banks merged or consolidated with state banks, by states, calendar 1979
(Dollar amounts in thousands)
Total capital
accounts of
national
banks*

Title and location of bank

TEXAS

United National Bank, Dallas (16446), merged into First City Bank of Dallas, Dallas, under title "First City Bank of
Dallas"

June

4

$8,976

VIRGINIA

Central Fidelity Bank, National Association, Herndon (14325), merged into Central Fidelity Bank, Bailey's
Crossroads, under title "Central Fidelity Bank"
Farmers and Merchants National Bank in Onley, Onley (14190), merged into Bank of Chincoteague, Inc.,
Chincoteague, under title "Farmers and Merchants Bank - Eastern Shore"
The First National Bank of Yorktown, Yorktown (11554), merged into Fidelity American Bank, Norfolk, under title
"Fidelity American Bank"
United Virginia Bank/Seaboard National, Norfolk (10194), United Virginia Bank/National, Vienna (651), United
Virginia Bank/First National, Lynchburg (1558), United Virginia Bank of Roanoke, National Association, Roanoke
(15117), United Virginia Bank/National Valley, Staunton (1620), merged into United Virginia
Bank/Commonwealth, Richmond, under title "United Virginia Bank"

2,104
2,528
1,409

106,893

* Includes subordinated notes and debentures, if any.

Table B-13
National banks converted into state banks, by states, calendar 1979
(Dollar amounts in thousands)

Charter
No.

Effective
date

Title and location of bank

Total: 51 banks

Total capital
accounts of
national
banks*

$196,030

ALABAMA

14638

First National Bank of Childersburg, Childersburg, converted into First Bank of Childersburg,
Childersburg

Oct.

30

1,428

Jan.

8

4,291

ARKANSAS

15222

First National Bank and Trust Company of Mountain Home, Mountain Home, converted into First
Bank and Trust Company of Mountain Home




157

Table B-13—Continued
National banks converted into state banks, by states, calendar 1979

(Dollar amounts in thousands)

Charter
No.

Title and location of bank

Total capital
accounts of
national
banks*

Effective
date

CALIFORNIA

16453
12904
16139
6268
15032
2158
14891

South Coast National Bank, Costa Mesa, converted into South Coast Bank, Costa Mesa
The Capital National Bank, Downey, converted into Capital Bank, Downey
Foothill National Bank, Glendora, converted into Foothill Independent Bank, Glendora
First National Bank and Trust Company, Ontario, converted into First Trust Bank, Ontario
Placer National Bank, Rockland, converted into Placer Bank, Rockland
First National Bank of San Jose, San Jose, converted into Bank of the West, San Jose
Santa Barbara National Bank, Santa Barbara, converted into Santa Barbara Bank and Trust, Santa
Barbara

Aug.
Apr.
July
Apr.
Apr.
Jan.

$2,090
2,328
1,842
12,446
2,106
27,361

May

9,531

GEORGIA

9613

The First National Bank of Haversham County, Cornelia, converted into First Bank of Haversham,
Cornelia

Sept.

15

2,821

Aug.
July
Aug.

1
2
20

1,347
8,574
433

Oct.
May

18
1

3,101
1,291

ILLINOIS

14589
14474
10690
6924
15612
14407

First National Bank of Byron, Byron, converted into The Byron Bank, Byron
National Bank of Austin, Chicago, converted into Austin Bank of Chicago, Chicago
The First National Bank of Gorham, Gorham, converted into the Bank of Gorham, Gorham
The First National Bank of Old Fallon, Old Fallon, converted into First Bank and Trust Company of
Old Fallon, Old Fallon
First National Bank of Eureka, Eureka, converted into First Bank of Eureka, Eureka
First National Bank in Greenville, Greenville, converted into First Bank and Trust Company,
Greenville

2,349

May

INDIANA

6388
12028

The Springs Valley National Bank, French Lick, converted into Springs Valley Bank and Trust
Company, French Lick
First National Bank of Spurgeon, Spurgeon, converted into The Spurgeon State Bank, Spurgeon . . .

July
June

31
27

4,246
583

Dec.

17

281

Dec.
Oct.

1
1

613
1,493

KANSAS

10587
9695
15306

The First National Bank of Beathe, Beathe, converted into Marshall County Bank of Beathe, Beathe.
The Gypsum Valley National Bank of Gypsum, Gypsum, converted into Gypsum Valley Bank,
Gypsum
Hays National Bank, Hays, converted into Hays State Bank, Hays
MAINE

13843

First National Bank of Aroostook, Fort Fairfield, converted into Depositors Trust Company of
Aroostook, Fort Fairfield

4,057

Feb.

MICHIGAN

15877
4840
13753
3378

National Bank of Marshall, Marshall, converted into Bank of Marshall, Marshall
National Lumberman's Bank and Trust Company, Muskegon, converted into Lumberman's Bank,
Muskegon
First National Bank of Southwestern Michigan, Niles, converted into Pacesetter Bank and Trust Southwest, Niles
Clinton National Bank and Trust Company, St. Johns, St. Johns, converted into Clinton Bank and
Trust Company, St. Johns

Oct.

1

1,009

Aug.

16

10,754

Sept.

4

11,843

Aug.

4

7,266

Nov.
Jan.

16
12

3,055
1,727

Apr.

20

1,004

July
Nov.

16
1

3,709
2,534

Feb.

1

4,835

Feb.

1

5,251

Feb.

1

1,575

Jan.

2

966

July

2

2,684

MISSOURI

15586
15457
16603

Mid-Continent National Bank of Kansas City, Kansas City, converted into Mid-Continent Bank of
Kansas City, Kansas City
Security National Bank of Sikeston, Sikeston, converted into Security Bank of Sikeston, Sikeston . . .
Mehlville National Bank, Unincorporated Area of St. Louis County, converted into Mehlville Bank,
St. Louis County
NEW HAMPSHIRE

12889
15652

Indian Head National Bank of Exeter, Exeter, converted into Indian Head Bank of Exeter, Exeter . .
Indian Head Bank, N.A., Portsmouth, converted into Indian Head Bank of Portsmouth, Portsmouth.
NEW YORK

1345
222
9977

The National Bank of Auburn, Auburn, converted into The Bank of Auburn, Auburn
First National Bank and Trust Company of Ithaca, Ithaca, converted into First Bank and Trust
Company of Ithaca, Ithaca
Glen National Bank and Trust Company, Watkins Glen, converted into Glen Bank and Trust
Company, Watkins Glen
NORTH DAKOTA

12393
12026

First National Bank in Drake, Drake, converted into First Bank in Drake, Drake
The Dakota National Bank and Trust Company of Fargo, Fargo, converted into The Dakota Bank
and Trust Company of Fargo, Fargo


158


Table B-13—Continued
National banks converted into state banks, by states, calendar 1979
(Dollar amounts in thousands)

Charter
No.

Total capital
accounts of
national
banks*

Effective
date

Title and location of bank
OKLAHOMA

11705
1439
12093
8524

The First National Bank in Chattanooga, Chattanooga, converted into First Bank of Chattanooga,
Chattanooga
The First National Bank in Claremore, Claremore, converted into First Bank in Claremore,
Claremore
The Farmers National Bank of Elk City, Elk City, converted into Bank of Western Oklahoma, Elk City
The First National Bank of Stratford, Stratford, converted into First American Bank, Stratford

$ 619

Jan.

1
12

2,337
2,015
838

14

July
Feb.
Jan.

9,318

10

PENNSYLVANIA

2958

The Drovers and Mechanics National Bank of York, York, converted into The Drovers and
Mechanics Bank, York

Feb.

TENNESSEE

11985
9319
8640

The First National Bank of Hohenwald, Hohenwald, converted into First Citizens Bank of
Hohenwald, Hohenwald
First National Bank of Mount Pleasant, Mount Pleasant, converted into The First Bank of Maury
County, Mount Pleasant
Farmers National Bank, Winchester, converted into Farmers Bank and Trust Company, Winchester.

878

Feb.
Sept.
Feb.

17
22

1,950
2,905

July
Aug.
Sept.
June

23
1
4
25

1,478
3,169
169
5,624

Jan.

2

2,623

Jan.

2

6,599

Jan.

2

2,684

TEXAS

16251
14779
13669
14992

Dallas/Forth Worth Airport National Bank, Dallas/Fort Worth, converted into Dallas/Fort Worth
Airport Bank, Dallas/Fort Worth
'.
Central National Bank of Houston, Houston, converted into Central Bank of Houston, Houston
The First National Bank in Mount Calm, Mount Calm, converted into First State Bank, Mount Calm. .
Windsor Park Bank, N.A., San Antonio, converted into Windsor Park Bank, San Antonio
VERMONT

194

Catamount National Bank, North Bennington, converted into Catamount Bank, Catamount
VIRGINIA

11976

First National Bank of Bassett, Bassett, converted into First Bassett Bank and Trust, Bassett
WISCONSIN

14460

First National Bank in Menomonie, Menomonie, converted into First Bank and Trust, Menomonie . . .

Table B-14
Purchases of state banks by national banks, by states, calendar 1979
(Dollar amounts in thousands)

Title and location of bank

Total capital
accounts of
state banks

Effective
date

Total: 6 banks

$ 8,865

KENTUCKY

The Farmers National Bank of Cynthiana (2560), Cynthiana, purchased Union Bank of Berry, Berry.

July

2

546

Oct.

1

2,073

28

2,255

Aug.

31

1,856

Sept.

14

1,078

Oct.

31

1,057

MISSISSIPPI

Bank of Jackson, N.A. (16810), Jackson, purchased Fidelity Bank, Utica
NORTH CAROLINA

First National Bank of Catawba County (4597), Hickory, purchased Western Carolina Bank and Trust Company,
Mpch\/i||p

The Planters National Bank and Trust Company (10608), Rocky Mount, purchased Liberty Bank and Trust
Company, Durham
SOUTH CAROLINA

T h e N a t i o n a l B a n k of S o u t h C a r o l i n a ( 1 0 6 6 ) , S u m t e r , p u r c h a s e d B a n k of N o r t h C h a r l e s t o n , N o r t h C h a r l e s t o n . . . .
SOUTH DAKOTA

The First National Bank in Sioux Falls (3393), Sioux Falls, purchased Dakota State Bank of Dell Rapids, Dell
Rapids



159

Table B-15
Consolidations* of national banks, or national and state banks, by states, calendar 1979
(Dollar amounts in thousands)

Effective
date

Outstanding
capital
stock

Consolidating banks
Resulting banks

Surplus

Undivided
profits and
reserves

Total assets

$10,298
21,207
32,455

$ 7,896
75,064
82,960

$ 287,868
1,462,525
1,750,393

Total: 1 Consolidation
NEVADA

Oct.

$ 5,702
21,207
25,959

Bank of Nevada, Las Vegas
First National Bank of Nevada, Reno (7038)
First National Bank of Nevada, Reno (7038)

1

* Excludes consolidations involving a single operating bank, effected pursuant to corporate reorganization. Those transactions may be found on
Table B-8.

TableB-16
Mergers of national banks, or national and state banks, by states, calendar 1979
(Dollar amounts in thousands)

Effective
date

Merging banks
Resulting bank

Outstanding
capital
stock

Surplus

Undivided
profits and
reserves

Total assets

ARKANSAS

Oct.

15

Continental Bank and Trust Company, Barling
The Merchants National Bank of Fort Smith, Fort Smith
(7240).
The Merchants National Bank of Forth Smith, Fort Smith
(7240)

$

120

$

280

$

107

$

4,269

2,000

2,000

9,119

112,769

2,000

2,000

8,125

116,607

818

2,754

652

44,541

94,461

310,101

321,307

16,605,829

94,461

310,101

321,307

16,656,462

732
400
755
558

3,468
475
945
1,660

1,246
541
401
646

67,274
19,838
32,885
40,663

6,000
8,534
500

9,000
15,459
315

13,000
17,960
233

374,795
505,532
16,137

2,000

3,000

2,613

103,221

2 303
550

3512
360

2 846
96

119,358
17,026

1,000

2,000

3,086

83,169

1,171

2,739

3,182

100,195

800
1,837
2,213
74,255
64,000
64,000
1,020

800
1,837
2,637
1,608
1,510
3,860
1,480

299
6,247
6,047
1,446
1,926
3,520
4,458

8,483
148,636
156,195
46,957
62,801
115,366
116,936

905

1,195

1,431

54,842

1,372

1,873

6,802

122,732

500
700
13,880
16,557

305
544
41,120
48,345

244
427
67,010
80,394

17,562
17,491
2,180,175
2,509,738

CALIFORNIA

July

14

First Central Coast Bank, San Luis Obispo
Wells Fargo Bank, National Association, San Francisco
(15660)
Wells Fargo Bank, National Association, San Francisco
(15660)
FLORIDA

Jan.

1

Jan.

31

Mar.

31

Apr.

1

June

1

July

1

Bamett Bank of Murray Hill, Jacksonville
Barnett Bank of North Jacksonville, Jacksonville
Bamett Bank of Regency, Jacksonville
Barnett Bank of San Jose, Jacksonville
Barnett Bank of Jacksonville, National Association, Jacksonville (9049)
Barnett Bank of Jacksonville, National Association (9049) . .
Atlantic Bank of Gainesvile, Gainesville
Atlantic First National Bank of Gainesville, Gainesville
(3894)
Atlantic First National Bank of Gainesville, Gainesville
(3894)
Atlantic Bank of West Daytona Beach, Daytona Beach
Atlantic First National Bank of Daytona Beach, Daytona
Beach (12456)
Atlantic First National Bank of Daytona Beach, Daytona
Beach (12456)
Royal Trust Bank of South Dade, N.A., Unincorporated
Area of Dade County (16698)
Royal Trust Bank of Miami, N.A., Miami (15156)
Royal Trust Bank of Miami, N.A., Miami (15156)
Sun Bank of Cocoa, National Association, Cocoa (14806). .
Sun First National Bank of Melbourne, Melbourne (16107). .
Sun First National Bank of Brevard County (16107)
Southeast National Bank of Coral Way, Miami (15568)
Southeast Bank of Dadeland, Unincorporated Area of Dade
County
Southeast First National Bank of Miami Springs, Miami
Springs (14707)
Southeast National Bank of Tamiami, Unincorporated Area
of Dade County (16480)
Southeast Bank of Westland, Hialeah
Southeast First National Bank of Miami, Miami (15638)
Southeast First National Bank of Miami, Miami (15638)


160


Table B-16—Continued
Mergers of national banks, or national and state banks, by states, calendar 197$
(Dollar amounts in thousands)

Merging banks
Resulting bank

Effective
date

Sept.

30

Nov.

30

Dec.

1

First National Bank of Hallandale, Hallandale (15874)
First National Bank of Miramar, Miramar (16233)
Hollywood National Bank, Hollywood (16008)
First National Bank of Hollywood, Hollywood (14530)
First National Bank of Hollywood, Hollywood (14530)
Century Bank of Pinellas County, St. Petersburg
Century First National Bank in St. Petersburg, St. Petersburg (14367)
Century First National Bank of Pinellas County (14367) . . . .
Sun First National Bank of Lake Wales, Lake Wales (14923)
Sun First National Bank of Polk County, Auburndale
(16786)
Sun First National Bank of Polk County, Auburndale
(16786)

Outstanding
capital
stock
$

863
400
432
2,640
3,814
498

Surplus
$

710
400
400
2,640
4,671
702

Undivided
profits and
reserves
$

863
118
186
4,555
5,722
436

Total assets
$

27,205
10,779
13,093
116,909
168,735
19,805

2,386
2,622
53,653

5,114
6,078
1,163

9,161
9,597
0

216 523
235,027
45,057

12,500

1,900

655

37,328

12,500

4,025

1,934

83,925

150

350

142

11,815

593
593

611
611

2,476
2,201

46,864
58,855

150

250

614

10,987

749

1,912

2,661

71,142

1,059

2,162

3,155

82,129

320
14,000
14,880

940
17,000
25,000

0
22,387
15,893

23,892
597,057
616,893

100
16,065
16,165
110
16,165
16,275

350
35,835
35,357
125
36,356
36,806

189
43,108
43,108
199
47,538
47,538

7,783
1,814,834
1,821,180
6,566
1,833,793
1,839,883

438
850
900
100

375
2,650
3,200
500

(142)
2,488
2,406
308

7,565
115,058
127,636
13,596

300

1,000

2,011

35,276

400

1,500

2,318

48,872

75

79

0

2,733

1,200

3,600

1,544

116,480

1,200

3,600

1,544

119,059

250
11,359
11,568

1,320
77,261
78,647

25
209
209

16,120
1,489,201
1,505,321

325
1,180
1,180

1,425
6,309
9,477

1,405
3,382
3,382

43,963
188,010
231,973

4,728

7,000

8,376

305,878

1,721
6,449
1,706
14,206
14,411

665
7,665
1,371
20,000
20,000

1,517
9,893
1,083
43,987
42,272

63,377
369,255
24,166
976,705
1,000,301

INDIANA

May

7

The Colonial National Bank, Ohio Township (8956)
Warrick National Bank of Boonville, Boonville (14218),
Boonville
Warrick National Bank of Boonville (14218), Boonville
KENTUCKY

Dec.

1

The Peoples Bank, Cave City
The New Farmers National Bank of Glasgow, Glasgow
(13651)
The New Farmers National Bank of Glasgow, Glasgow
(13651)
LOUISIANA

June

1

Caddo Trust and Savings Bank, Belcher
The First National Bank of Shreveport, Shreveport (3595). . .
The First National Bank of Shreveport, Shreveport (3595). . .
MARYLAND

May

30

Nov.

1

The
The
The
The
The
The

Sharpsburg Bank of Washington County, Sharpsburg. .
First National Bank of Maryland, Baltimore (1413)
First National Bank of Maryland, Baltimore (1413)
National Bank of Perryville, Perryville (11193)
First National Bank of Maryland, Baltimore (1413)
First National Bank of Maryland, Baltimore (1413)

MASSACHUSETTS

Jan.

1

Oct.

1

Citizens Bank and Trust Company of Peabody, Peabody. . .
Bay State National Bank, Lawrence (1014)
Bay State National Bank, Lawrence (1014)
Chatham Trust Company, Chatham
The Barnstable County National Bank of Hyannis, Barnstable (13395)
;
The Barnstable County National Bank of Hyannis, Barnstable (13395)
MINNESOTA

Jan.

1

The First State Bank of Rice, Rice
The First American National Bank of St. Cloud, St. Cloud
(11818)
The First American National Bank of St. Cloud, St. Cloud
(11818)
MISSISSIPPI

Dec.

31

Bank of Inverness, Inverness
Deposit Guaranty National Bank, Jackson (15548)
Deposit Guaranty National Bank, Jackson (15548)
NEW HAMPSHIRE

Nov.

30

Indian Head National Bank of Derry, Derry (8038)
Indian Head National Bank of Nashua, Nashua (15563). . . .
Indian Head National Bank of Nashua, Nashua (15563). . . .
NEW JERSEY

Jan.

1

June

30

First Merchants National Bank, Neptune Township (13363) .
Midlantic National Bank/Raritan Valley, Edison Township
(15430)
First Merchants National Bank (15430), Edison Township. . .
Arcadia National Bank, Secaucus
National Community Bank of New Jersey, Rutherford (5005)
National Community Bank of New Jersey, Rutherford (5005)




161

Table B-16—Continued
Mergers of national banks, or national and state banks, by states, calendar 1979

(Dollar amounts in thousands)

Effective
date

Nov.

Merging banks
Resulting bank

30

The National Bank of Manuta, Sewell (12917)
The National Bank and Trust Company of Gloucester
County, Woodbury (1199)
The National Bank and Trust Company of Gloucester
County, Woodbury (1199)

Outstanding
capital
stock
$

Surplus

Undivided
profits and
reserves

B

957

Total assets

$

52,633

713

B 3,000

2,830

4,678

6,270

193,975

4,611

7,678

6,159

246,609

4,400

9,636

21,491

19,637

600

1,600

(1,170)

309,016

6,000
200

10,236
600

2,321
1,519

328,653
19,478

13,953

15,000

15,141

686,295

14,753

15,000

16,660

704,735

980

900

63

25,038

1,342
1,342
1,932

9,072
9,072
6,286

521,707
517,474
103,418
5,264,166
5,485,502

NEW YORK

Apr.

Dec.

30

28

Bankers Trust Company of Central New York, Utica
Bankers Trust Company of Albany, National Association,
Albany (15758)
Bankers Trust Company of Albany, National Association,
Albany (15758)
The Little Falls National Bank, Little Falls (2406)
The Oneida National Bank and Trust Company of Central
New York (1392)
The Oneida National Bank and Trust Company of Central
New York (1392)
NORTH CAROLINA

Sept.

30

Dec.

3

Carolina State Bank, Gastonia
Southern National Bank of North Carolina, Lumberton
(10610)
Southern National Bank of North Carolina (10610)
The Bank of Asheyille, Ashville
North Carolina National Bank, Charlotte (13761)
North Carolina National Bank, Charlotte (13761)

62,143

58,181
62,345

13,721
14,335
1,925
123,709
126,791

2,250

1,899

53

76,904

12,153
12,702
360

42,847
46,447
2,640

37,295
37,348
919

1,033,364
1,110,130
43,674

3,662

11,338

5,782

333,903

4,022

13,978

6,701

377,577

700

1,300

2,281

47,082

9,210
10,643
200
1,512
1,772
600
1,350

9,620
10,187
200
6,888
7,088
900
1,350

18,398
20,755
791
1,224
1,952
1,005
2,234

447,876
494,915
10,549
83,240
93,789
44,231
91,413

1,950
6,000
400

2,250
14,000
1,200

3,239
12,133
1,124

135,644
469,814
44,731

1,000

1,400

2,181

67,170

300
1,500
450
4,000
2,000
1,400

650
2,500
850
5,500
2,400
1,600

831
2,297
643
4,054
2,128
1,765

23,718
88,343
33,881
202,207
89,464
72,499

500
500
600
1,000

500
700
800
2,500

418
880
1,707
1,602

22,194
28,511
46,540
71,347

1,250
600
625
700
1,500

1,550
1,000
625
1,300
3,000

1,883
923
850
1,094
3,473

64,377
34,409
36,576
40,608
116,140

58,090

OHIO

Apr.

16

Apr.

30

May

21

May

22

June

29

The Central Trust Company of Montgomery County, N.A.,
Dayton (16330)
The Central Trust Company, National Association, Cincinnati (16416)
The Central Trust Company, National Association (16416). .
The Central Trust Company of Wayne County, Wooster
The Central Trust Company of Northeastern Ohio, National
Association, Canton
Central Trust Company of Northeastern Ohio, National Association, Canton
The Citizens First National Bank of Greene County, Xenia
(2575)
The Third National Bank and Trust Company of Dayton,
Dayton (10)
The Third National Bank and Trust Company (10)
First National Bank of Sebring, Sebring (14601)
First National City Bank of Alliance, Alliance (3721)
First National City Bank of Alliance, Alliance (3721)
The Home Banking Company, St. Marys
First National Bank of Mercer County, Celina (5523)
The Central Trust Company of Western Ohio, National Association (5523)
Akron National Bank, Akron (15609)
The First National Bank of Cadiz, Cadiz (100)
The Central National Bank at Cambridge, Cambridge
(13905)
The Geauga County National Bank of Chardon, Chardon
(14879)
The First National Bank of Chillicothe, Chillicothe (128)
The Second National Bank of Circleville, Circleville (172). . .
The Capital National Bank, Cleveland (15423)
First National Bank of Coshoctin, Coshoctin (6892)
The First National Bank of Delaware, Delaware (243)
The First National Bank at East Palestine, East Palestine
(13850)
Peoples National Bank of Greenfield, Greenfield (10105). . .
Citizens National Bank of Ironton, Ironton (4336)
The First National Bank of Jackson, Jackson (1903)
The Hocking Valley National Bank of Lancaster, Lancaster
(12421)
The First National Bank of London, London (1064)
National Bank of Loveland, Loveland (15945)
The First National Bank of Marysville, Marysville (13460) . . .
The First National Bank of Newark, Newark (858)


162


Table B-16—Continued
Mergers of national banks, or national and state banks, by states, calendar 1979
(Dollar amounts in thousands)

Effective
date

Merging banks
Resulting bank

June

29

July

30

Aug.

27

Sept.

28

Oct.

Oct.

Oct.

4

4

31

Nov.

23

Dec.

1

The National Bank of Portsmouth, Portsmouth (13832)
The First National Bank of Springfield, Springfield (238). . . .
The First National Bank of Tiffin, Tiffin (3315)
First National Bank of Washington Courthouse, Washington,
Courthouse (13490)
The First National Bank of Wilmington, Wilmington (365) . . .
The Citizens National Bank in Zanesville, Zanesville (5760) .
The Logan County Bank, Bellefontaine
The Cummings Bank Company, Carrollton
The Ohio State Bank of Dayton Dayton
The Peoples Savings Bank Company, Delta
The Kenton Savings Bank, Kenton
The Farmers and Merchants Bank of Logan, Logan
The Medina County Bank, Medina
The Adams Bank, Millersburg
The Knox County Savings Bank, Mount Vernon
The Community Bank Napoleon
The Perry County Bank, New Lexington
The Ohio Bank and Trust Company, New Philadelphia
The Niles Bank Company, Niles
The Citizens Banking Company, Perrysburg
The Weston Security Bank, Sandusky
The Ohio National Bank of Columbus, Columbus (5065) . . .
BancOhio National Bank, Columbus (5065)
Society Bank of Painesville, Painesville
Society National Bank of Cleveland, Cleveland (14761)....
Society National Bank of Cleveland, Cleveland (14761)....
The Eastern Ohio Bank, Union Township
Heritage Bank, N.A., Flushing (12008)
Heritage Bank N A Flushing (12008)
The Gnadenhutten-Bank, Gnadenhutten
The Peoples National Bank and Trust Company, Dover
(4293)
The Peoples National Bank and Trust Company, Dover
(4293)
The First National Bank of Gallipolis, Gallipolis (136)
The Central Trust Company, National Association, Cincinnati (16416)
Central Trust Company, N.A., (16416)
The Citizens National Bank of Middleport, Middleport
(8441)
The Central Trust Company, National Association, Cincinnati (16416)
The Central Trust Company, National Association, Cincinnati (16416)
Farmers and Merchants Bank Company, Arlington
Mid-American National Bank & Trust Company, Northwood
(15416)
Mid-American National Bank & Trust Company, Northwood
(15416)
The Farmers State Bank of Stryker, Stryker
The First National Bank in Bryan, Bryan (13899)
First National Bank of Northwest Ohio (13899)
The Commercial Bank, Ashtabula
The Lake County National Bank of Painesville, Painesville
(14686)
The Lake County National Bank of Painesville, Painesville
(14686)
The Huntington National Bank of Bellefontaine, Bellefontaine (13749)
The Huntington National Bank of Columbus, Columbus
(7745)
The Huntington National Bank of Franklin, Franklin (5100) . .
The Huntington Portage National Bank of Kent, Kent (652) .
The Huntington First National Bank of Kenton, Kenton
(2500)
The Huntington First National Bank of Lima, Lima (13767). .
The Huntington National Bank of London, London (10373). .
The Huntington Lagonda National Bank of Springfield,
Springfield (14105)
The Huntington First National Bank of Medina County,
Wadsworth (5828)




Outstanding
capital
stock
$

Surplus

Undivided
profits and
reserves

Total assets

2,000
4,000
1,000

$ 1,697
3,912
1,109

900
400
2,000
700
700
385
800
800
1,000
725
120
1,000
1,000
600
1,000
1,500
700
1,400
20,000
100,000
1,020
18,300
19,000
263
475
738
150

1,000
1,300
3,500
1,100
700
818
800
800
1,000
1,675
600
1,000
1,500
800
1,250
2,000
1,200
2,600
55,000
100,000
1,980
61,700
63,680
789
456
1,245
450

1,018
986
1,911
386
871
281
633
1,099
1,344
533
1,123
1,576
1,088
1,031
912
1,119
469
2,256
36,185
93,495
1,002
21,838
23,160
231
424
655
563

39,096
34,973
80,003
225,572
32,787
25,115
25,464
36,603
41,611
45,224
22,542
43,016
41,660
35,911
49,682
76,885
31,217
82,006
1,686,722
4,261,749
52,747
1,495,576
1,542,964
13,833
22,016
28,901
11,761

752

2,248

4,016

89,436

752
100

2 248
2,250

4 072
368

100,610
24,851

12,738
12,738

46,376
46,376

36,497
35,965

1,186,218
1,207,819

1,200
2,000
1,000

$

$

69.553
135,536
43,042

100

900

688

14,398

12,702

46,447

41,445

1,116,126

12,702
640

46,447
60

40,899
332

1,157,091
13,569

4,388

4,405

2,238

135,770

5,028
200
394
498
450

4,465
400
806
1,302
1,550

2,570
89
1,535
1,641
529

149,339
7,298
37,941
44,959
28,454

3,862

8,321

7,027

375,574

3,862

8,321

7,027

404,091

910

910

2,353

45,618

12,837
900
813

23,182
900
3,000

48,573
3,107
7,524

1,582,529
38,312
126,950

393
2,420
300

807
2,580
1,220

1,692
6,194
2,377

50,419
125,912
30,632

1,250

1,253

3,783

71,205

362

1,338

1,955

72,065

163

Table B-16—Continued
Mergers of national banks, or national and state banks, by states, calendar 1979
(Dollar amounts in thousands)

Merging banks
Resulting bank

Effective
date

Dec.

31

The Huntington Bank of Ashland, Ashland
The Huntington Bank of Wood County, Bowling Green
The Huntington Bank of Chillicothe, Chillicothe
The Huntington Bank of Toledo, Toledo
The Huntington Bank of Washington Court House, Washington Court House
The Huntington Bank of Woodville, Woodville
The Huntington National Bank, Columbus (7745)
The Huntington National Bank, Columbus (7745)

Outstanding
capital
stock
$

Surplus

Undivided
profits and
reserves
$

877
1,840
852
1,584

Total assets

$

35,379
97,730
62,472
141,239

300
2,798
500
1,650

$ 1,700
3,802
3,000
6,358

225
300
200
40,000

2,146
1,200
40
40,000

746
1,230
0
84,260

45,753
35,986
240
2,542,896

726
17,600
18,326

2,192
47,655
49,847

1,392
47,953
49,745

64,990
1,643,036
1,708,026

50

325

195

6,984

5,400

5,400

13,044

418,613

5,400

5,400

12,986

425,704

100
78
800

220
222
800

335
1,169
802

8,773
20,768
32,788

200

178

355

10,003

600
4,363
6,141

600
10,867
12,887

275
17,638
20,574

21,415
603,655
694,367

626
2,240
2,425
350
20,552
20,552

175
4,328
4,944
70
40,397
40,397

(129)
3,228
3,099
680
79,598
79,598

7,583
127,721
135,304
8,142
2,403,982
2,411,025

314
255
6,503
9,525
1,100
28,382
29,482
125
2,106
2,231
300
225
533
1,000
400
9,525
10,875
1,500
29,482
29,482

746
220
11,040
9,553
4,020
48,589
52,609
125
7,894
8,019
150
1,200
1,342
1,000
300
9,553
10,903
641
52,609
52,609

238
376
15,124
15,738
3,641
48,073
51,714
209
11,976
12,185
367
3,223
3,590
1,038
2,611
17,276
20,945
719
54,406
54,406

15,483
10,351
410,687
436,101
97,370
2,025,541
2,116,992
9,178
275,415
284,594
8,842
52,163
61,005
36,710
41,249
395,873
473,832
13,597
2,143,256
2,156,853

PENNSYLVANIA

Dec.

3

Lebanon County Trust Company, Lebanon
The National Central Bank, Lancaster (694)
The National Central Bank, Lancaster (694)
SOUTH DAKOTA

Dec.

14

Springfield State Bank Springfield
Northwestern National Bank of Sioux Falls, Sioux Falls
(10592)
.
Northwestern National Bank of Sioux Falls, Sioux Falls
(10592)
VIRGINIA

Jan.

1

Feb.

20

May

31

June

30

June

30

July

2

July

2

Nov.

9

Nov.

30

Fidelity American Bank, Buena Vista, Buena Vista
Fidelity American Bank, Chatham
Fidelity American Bank, NA, Halifax, Halifax County (16313)
Fidelity American Bank, Natural Bridge, Natural Bridge Station
Fidelity American Bank, NA, Roanoke Valley, Roanoke
County (16192)
Fidelity American Bank, NA, Lynchburg (15?2)
Fidelity American Bank, NA, Lynchburg (1522)
Dominion National Bank of the Peninsula, York County
(16159)
Dominion National Bank of Tidewater, Norfolk (15461)
Dominion National Bank of Tidewater, Norfolk (15461)
New Bank of Roanoke, Roanoke
Virginia National Bank, Norfolk (9885)
Virginia National Bank Norfolk (9885)
Fidelity American Bank, NA, Richmond, Henrico County
(15315)
Cavalier Central Bank and Trust Company, Hopewell
The Central National Bank of Richmond, Richmond (10080)
The Central National Bank of Richmond, Richmond (10080)
The First National Bank of Danville, Danville (1985)
First & Merchants National Bank, Richmond (1111)
First & Merchants National Bank, Richmond (1111)
New Bank of Culpeper, Culpeper
National Bank and Trust Company, Charlottesville (10618) .
National Bank and Trust Company, Charlottesville (10618) .
The Bank of Buckingham Dillwyn
The First National Bank of Farmville, Farmville (5683)
The First National Bank of Farmville, Farmville (5683)
The Citizens National Bank of Emporia, Emporia (12240). . .
City Savings Bank and Trust Company, Petersburg
Central Fidelity Bank, N.A., Richmond (10080)
Central Fidelity Bank, N.A., Richmond (10080)
The Services National Bank, Arlington (16277)
First & Merchants National Bank, Richmond (1111)
First & Merchants National Bank, Richmond (1111)


164


Table B-17
Mergers resulting in national banks, by assets of acquiring and acquired banks, 1960—1979*
Assets of acquired banks

Under $10 million
$10 to 24 9 million
$25 to 49.9 million
$50 to 99.9 million
$100 million and over
Total

Acquired
banks
1960—1977

Under $10
million

$10 to 24.9
million

$25 to 49.9
million

$50 to 99.9
million

$100 million
and over

101
160
194
235
869

101
141
124
124
274

0
19
53
66
284

0
0
17
40
164

0
0
0
5
71

0
76

1,559*

764

422

221

76

76

ooo

Assets of acquiring bankst

* Includes all forms of acquisitions involving two or more banks from May 13, 1960, through December 31, 1979.
t In each transaction, the bank with the larger total assets was considered to be the acquiring bank.
i Comprises 1,383 transactions, 39 involving three banks, 14 involving four banks, 11 involving five banks, three involving six banks, one involving seven banks, one involving nine banks, one involving six banks and one involving 40 banks.




165

Table B-18
Domestic assets, liabilities and capital accounts of national banks, June 30, 1979
(Dollar amounts in millions)
Total
United States
Number of banks
Assets
Cash and due from depository institutions
U.S. Treasury securities
Obligations of other U.S. Government agencies and corporations
Obligations of states and political subdivisions
All other securities
Total securities
Federal funds sold and securities purchased under agreements to resell
Total loans (excluding unearned income)
Allowance for possible loan losses
Net Loans
Lease financing receivables
Bank premises, furniture and fixtures, and other assets representing bank premises
Real estate owned other than bank premises
All other assets
Total assets
Liabilities
Demand deposits of individuals, partnerships and corporations
Time and savings deposits of individuals, partnerships and corporations
Deposits of U.S. government
Deposits of states and political subdivisions
All other deposits
....
Certified and officers' checks
Total deposits in domestic offices
Demand deposits
Time and savings deposits
Federal funds purchased and securities sold under agreements to repurchase . . .
Interest-bearing demand notes issued to U S Treasury
Other liabilities for borrowed money
...
....
Mortgage indebtedness and liability for capitalized leases
All other liabilities
Total liabilities

Alabama

Arizona

Alaska

Arkansas

California

Colorado

4,493

100

6

3

68

47

138

$ 98,175
43,268
22,790
68,427
10,366

$1,151
394
358
1,383
58

$ 162
62
69
158
3

$ 588
279
202
605
42

$ 12,382
4,443
3,086
5,400
949

$1,579
501
143
923
15

144,851

2,193

292

$ 923
502
162
634
23
1,321

1,128

13,878

1,582

33,443
416,466
4,996
411,470

202
5,520
66
5,454

84
816
8
808

349
4,683
53
4,630

461
2,791
27
2,764

5,666
66,374
781
65,593

303
5,537
60
5,477

6,036
12,384
1,313
37,443
745,114

31
189
13
162

11
61
6
23

30
178
4
122

2,118
1,883
73
5,462

60
182
22
177

9,394

1,448

7,556

12
110
5
100
5,167

107,055

9,382

164,695
300,600
1,627
44,050
32,116
7,015

2,335
4,488
31
769
243
60

466
413
5
242
4
19

2,103
3,967
25
284
69
121

1,290
2,248
6
411
204
24

23,145
47,553
205
3,543
3,114
1,260

2,602
3,604
33
808
560
106

550,103

7,927

1,150

6,570

4,182

78,820

7,713

206,658
343,445
79,464
9,295
9,569
1,261
40,345

2,794
5,133
423
75
56
5
162

541
609
102
23
11
11
23

2,423
4,147
314
96
1
13
88

1,646
2,536

3,295
4,418
644
97
48
33
178

690,036

8,649

1,320

7,082

4,767

26,614
52,206
10,790
1,086
2,400
226
7,151
100,474

80

27

308

42

445
31
10
12
87

8,712

3,206

47

1

Equity Capital
Preferred stock
Common stock
Surplus
Undivided profits and reserve for contingencies and other capital reserves
Total equity capital

30
11,149
17,407
23,287

0
122
269
307

0
44
123
227

0
80
100
194

0
1,876
2,097
2,301

0
116
192
320

51,873

698

0
32
42
53
127

393

374

6,273

628

Total liabilities, subordinated notes and debentures and equity capital

745,114

9,394

1,448

7,556

5,167

107,055

9,382

Subordinated notes and debentures

See note at end of table.




Table B-18—Continued
Domestic assets, liabilities and capital accounts of national banks, June 30, 1979
(Dollar amounts in millions)
Connecticut
Number of banks

District of
Columbia

Delaware

Florida

Georgia

Idaho

Hawaii

19

6

16

230

64

3

6

$ 897
198
128
349
44

$ 9
10
2
3

$ 878
462
193
836
30

$ 2,973
2,352
1,236
2,333
175

$ 20
18
16
1

719

15

1,521

6,096

$1,904
482
169
738
70
1,459

$ 371
262
75
344
•8
689

171

7

390
3,458
36
3,421

1,133
10,240
121
10,119

626
4,923
75
4,847

28
77
5
166
6,487

55
464
52
466

63
223
110
526
9,757

Assets

Cash and due from depository institutions
U.S. Treasury securities
Obligations of other U.S. Government agencies and corporations
Obligations of states and political subdivisions
All other securities
Total securities
Federal funds sold and securities purchased under agreements to resell
Total loans (excluding unearned income)
Allowance for possible loan losses
Net Loans
Lease financing receivables
Bank premises, furniture and fixtures, and other assets representing bank premises
Real estate owned other than bank premises
All other assets
Total assets

2,226
26
2,200

50

12
71
5
58

0
1

4,133

84

1,069
1,626
8
152
344
48

19
51

3,248

75

1,531
1,717
337
160
8
10
126
3,888

19
55
0

50

1

21,358

35
1

167

94
1
93

2,065
20
2,045

10
3
1
1

36
70
3
53

165

3,435

50
69
26
2
3

754
1,812
6
206
11
34

151

2,822

57
94

Liabilities

Demand deposits of individuals, partnerships and corporations
Time'and savings deposits of individuals, partnerships and corporations
Deposits of U.S. government
Deposits of states and political subdivisions
All other deposits
Certified and officers' checks
Total deposits in domestic offices
Demand deposits
Time and savings deposits
Federal funds purchased and securities sold under agreements to repurchase . . .
Interest-bearing demand notes issued to U.S. Treasury
Other liabilities for borrowed money
Mortgage indebtedness and liability for capitalized leases
All other liabilities
Total liabilities
Subordinated notes and debentures

6,554
9,216
55
1,065
664
242

2,013
2,455
109
32
357
75
5,041

17,796

3,156
2,950
34
849
464
55
7,508

1
76

2,453
2,588
593
128
94
12
133
6,000

7,776
10,020
1,470
127
57
16
262
19,727

4,068
3,440
1,010
52
122
27
302
9,021

0
1
0
0
2

872
1,950
248
49
2
4
79

153

3,203

15

—

12

31

57

2

22

0
49
109
72
230

0
2
3
3

1
364
607
628
1,599

0
160
227
293

0
5
3
2

0
38
146
25

8

69
138
268
475

679

10

209

4,133

84

6,487

21,358

9,757

165

3,435

4
1

1

Equity Capital

Preferred stock
Common stock
Surplus
Undivided profits and reserve for contingencies and other capital reserves
Total equity capital
Total liabilities, subordinated notes and debentures and equity capital
See note at end of table.
i




Table B-18—Continued

s

Domestic assets, liabilities and capital accounts of national banks, June 30, 1979
(Dollar amounts in millions)

Number of banks
Assets
Cash and due from depository institutions
U S. Treasury securities .
Obligations of other U.S. Government agencies and corporations
Obligations of states and political subdivisions
All other securities
Total securities
Federal funds sold and securities purchased under agreements to resell
Total loans (excluding unearned income)
Allowance for possible loan losses
Net Loans
Lease financing receivables
Bank premises, furniture and fixtures, and other assets representing bank premises
Real estate owned other than bank premises
All other assets
Total assets
Liabilities
Demand deposits of individuals, partnerships and corporations
Time and savings dposits of individuals, partnerships and corporations
Deposits of U.S. government
Deposits of states and political subdivisions
All other deposits
Certified- and officers1 checks
Total deposits in domestic offices
Demand deposits
Time and savings deposits
Federal funds purchased and securities sold under agreements to repurchase . . .
Interest-bearing demand notes issued to U.S. Treasury
Other liabilities for borrowed money
Mortgage indebtedness and liability for capitalized leases
All other liabilities
. . .
.
Total liabilities
. .
Subordinated notes and debentures

Kentucky

Kansas

Iowa

Indiana

Illinois

Louisiana

Maine

416

120

99

151

79

54

14

$ 6,630
3,359
2,174
6,088
827

$ 1,745
1,254
681
1,646
203

$1,225
1,278
317
1,015
21

$ 123
52
74
136
3

3,784

$ 800
519
318
705
29
1,571

$ 764
512
204
710
26

12,448

$ 746
324
219
661
23
1,227

1,452

2,631

265

2,292

664

324

431

601

37,708
438
37,270

8,672
90
8,581

3,383
29
3,354

3,288
33
3,255

328
3,968
38
3,930

5,131
58
5,073

36
698
6
692

169
777
217
2,791

150
265
40
823

30
191
15
199

16,053

4
132
4
90
6,286

106
132
4
83

62,595

6
93
10
106
5,867

6,798

9,966

11,096
22,819
105
2,670
3,610
526

3,225
7,206
28
1,692
425
138

1,296
2,927
7
288
283
29

1,494
2,563
11
844
257
38

1,691
3,107
14
441
310
44

2,685
3,688
38
1,373
349
77

40,826

12,715

4,829

5,206

5,607

8,210

256
610
3
84
7
7
967

13,789
27,038
10,411
808
1,270
36
4,799

4,270
8,445
1,453
255
81
26
357

1,649
3,180
442
36
36
9
90

1,934
3,272
393
54
34
2
70

2,108
3,499
364
97
51
20
159

3,337
4,872
721
44
24
31
150

294
673
71
17
8
5
10

58,149

14,889

5,442

5,760

6,298

9,179

1,078

111

33

32

25

13

32

3

7
809
1,763
1,755

209
394
527

0
65
97
231

0
98
159
243

0
78
141
268

1
124
255
375

0
20
23
37

0
27
1
16
1,159

Equity Capital
Preferred stock
Common stock
Surplus
.
...
Jndivided profits and reserve for contingencies and other capital reserves
Total equity capital

4,334

1,131

393

501

487

755

79

Total liabilities, subordinated notes and debentures and equity capital

62,595

16,053

5,867

6,286

6,798

9,966

1,159

See note at end of table.




Table B-18—Continued
Domestic assets, liabilities and capital accounts of national banks, June 30, 1979
(Dollar amounts in millions)
Maryland
Number of banks

.

Massachusetts
32

73

Michigan
126

Minnesota

Mississippi

Missouri

Montana

205

37

99

56

$ 2,041
774
624
1,813
331
3,542

$ 678
375
146
602
28

$ 1,971
541
405
1,197
96

$ 249
138
60
334
11

1,151

2,239

543

563
9,638
92

1,487
6,314
72
6,242

1,630
15
1,615

Assets

Cash and due from depository institutions
U.S. Treasury securities
Obligations of other U.S. Government agencies and corporations
Obligations of states and political subdivisions
All other securities
Total securities

$ 853
325
72.
665
18
1,080

$ 2,174
1 391
291
731
270
2,683

$ 3,382
1 665
527
2,859
162
5,213

857

1,428

7,600
111
7,488

14,991
144
14,847

9,546

155
2,588
28
2,560

171
257
14
1,244
14,886

122
417
28
998
26,435

184
205
35
523
16,640

3
102
5
69
4,721

77
168
13
260
12,457

6
47
2
36
2,522

1,575
2,794
11
221
116
51

3,646
4,976
42
742
857
127

5,327
12,592
45
2,243
574
571

3,141
7,039
25
847
709
110

1,059
1,989
6
690
193
13

534
1,366
3
201
31
20

4,768

10,389

21,352

11,871

3,949

2,726
3,789
50
678
949
72
8,264

1,839
2,929
567
124
12
22
258

6,811
14,541
1,728
640
134
43
696
24,592

4,062
7,809
2,104
391
247
8
771

1,428
2,521

3,740
4,524

330
41
4
18
56

5,751

4,847
5,542
2,064
311
59
25
926
13,774

15,392

4,399

2,234
274
275
36
526
11,609

633
1,523
111
8
8
5
38
2,325

4

36

114

164

16

31

19

0
61
95
257

0
349
579
801
1,729

0
303
332
449
1,083

0
47
236
24
307

2
145
232
438
817

67
67
44
177

26,435

16,640

4,721

12,457

2,522

Federal funds sold and securities purchased under agreements to resell
Total loans (excluding unearned income)
Allowance for possible loan losses
Net Loans

181
3,695
37

Lease financing receivables
Bank premises, furniture and fixtures, and other assets representing bank premises
Real estate owned other than bank premises
All other assets
Total assets

51
107
9
229
6,167

3,658

24

Liabilities

Demand deposits of individuals, partnerships and corporations
Time and savings deposits of individuals, partnerships and corporations
Deposits of U.S. government
Deposits of states and political subdivisions
All other deposits
Certified and officers' checks
Total deposits in domestic offices
Demand deposits
Time and savings deposits
Federal funds purchased and securities sold under agreements to repurchase . . .
Interest-bearing demand notes issued to U.S. Treasury
Other liabilities for borrowed money
Mortgage indebtedness and liability for capitalized leases
All other liabilities
Total liabilities
Subordinated notes and debentures

2,156

Equity Capital

Preferred stock
Common stock
Surplus
Undivided profits and reserve for contingencies and other capital reserves
Total equity capital

413

0
170
421
486
1,077

Total liabilities, subordinated notes and debentures and equity capital

6,167

14,886

See note at end of table.
CO




Table B-18—Continued
Domestic assets, liabilities and capital accounts of national banks, June 30, 1979
(Dollar amounts in millions)
Nebraska
Number of banks

New
Hampshire

Nevada

New Jersey

New Mexico

New York

North
Carolina

117

4

39

95

40

117

27

$ 834
288
228
622
53
1,191

$ 294
154
116
218
2

$ 198
129
19
210
4

$ 2,263
1,487
1,041
2,875
320

$ 346
241
123
362
7

$17,166
3,680
1,237
3,894
3,363

$1,875
711
536
1,344
317

490

362

5,723

733

12,174

2,908

Federal funds sold and securities purchased under agreements to resell
Total loans (excluding unearned income)
Allowance for possible loan losses
Net Loans

253
3,262
35
3,227

22
1,257
13
1,245

36
1,018
10
1,008,

453
11,063
118
10,945

131
1,696
19
1,678

2,878
44,399
853
43,546

636
7,007
83
6,924

Lease financing receivables
Bank premises, furniture and fixtures, and other assets representing bank premises
Real estate owned other than bank premises
All other assets
Total assets

42
92
2
93
5,734

54
52
1
25
2,184

33
1
17
1,655

125
349
57
325

2
85
4
43

618
1,067
229
12,567

20,239

3,023

90,246

109
253
16
636
13,357

1,317
2,604
5
382
357
32
4,696

721
944
5
157
2
26
1,855

404
827
4
143
27
15
1,419

5,071
10,142
49
1,302
236
240
17,041

825
1,222
12
504
40
30
2,634

15,567
23,340
140
1,925
9,670
1,006
51,647

3,326
5,306
23
637
352
91
9,735

1,777
2,918
397
63
33
12
78

800
1,055
104
25
3
8
23

487
932

978
1,656
83
25
5
17
36

24,946
26,702
14,618
542
2,720
76
12,130

3,922
5,813
1,732
189
76
77
557

5,280

2,017

1,530

6,018
11,023
1,133
256
40
7
351
18,829

2,800

81,733

12,366

28

0

2

59

20

349

132

1
1,971
2,529
3,662
8,164

0
170
258
430

90,246

13,357

Assets

Cash and due from depository institutions
U S Treasury securities
Obligations of other U.S. Government agencies and corporations
Obligations of states and political subdivisions
All other securities
Total securities

Liabilities

Demand deposits of individuals, partnerships and corporations
Time and savings deposits of individuals, partnerships and corporations
Deposits of U.S. government
Deposits of states and political subdivisions
All other deposits
Certified and officers' checks
Total deposits in domestic offices
Demand deposits
Time and savings deposits
Federal funds purchased and securities sold under agreements to repurchase . . .
Interest-bearing demand notes issued to U S Treasury
Other liabilities for borrowed money
....
...
Mortgage indebtedness and liability for capitalized leases
All other liabilities
Total liabilities
Subordinated notes and debentures

55
23
11
4
18

Equity Capital

Preferred stock .
Common stock
...
...
Surplus
Undivided profits and reserve for contingencies and other capital reserves
Total equity capital
Total liabilities, subordinated notes and debentures and equity capital
See note at end of table.




81
106
239
427

0
28
44
96

0
16
47
60

2
289
459
600

168

123

1,350

2
59
84
59
204

5,734

2,184

1,655

20,239

3,023

859

Table B-18—Continued
Domestic assets, liabilities and capital accounts of national banks, June 30, 1979
(Dollar amounts in millions)
North Dakota

Oklahoma

Ohio

Oregon

Pennsylvania Rhode Island

South
Carolina

42

187

188

6

223

5

18

$ 188
114
56
258
7

$ 3,598
1,980
1,078
4,236
274

$ 1,550
1,071
98
1,693
104

$1,182
274
53
1,009
39

$ 5,251
2,951
2,494
4,430
1,756

$ 527
180
109
401
60

435

7,568

2,966

1,375

11,631

$ 341
324
162
446
69
1,001

11

610
6,200
71
6,129

152

2,320
27,149
316

142
2,290
21

359
1,910
22

1,322

1,231
16,066
181
15,886

26,833

2,269

1,888

2
40
2
31

202
524
15
1,049
30,073

8,644

294
582
66
3,665
50,642

101
68
8
185
4,114

16
90
5
45

2,031

30
182
9
183
11,658

457
1,130
3
119
15
12

6,690
14,245
64
1,882
379
284
23,544

2,893
4,811
41
1,299
443
112

1,955
3,846
12
578
105
69

9,293
21,680
57
2,299
1,359
300

9,600

6,565

34,988

625
2,131
5
157
20
26
2,964

2,907

3,551
6,049
685
144
50
3
250
10,732

2,296
4,269
793
156
52
13
447

11,145
23,843
7,111
533
760
61
3,657

735
2,229
505
131
17
27
219

1,637
1,270
308
87
33
7
52

1,873

7,918
15,626
2,806
555
40
48
762
27,755

8,026

47,110

3,862

3,393

16

41

70

141

250

18

13

Preferred stock
Common stock
Surplus
Undivided profits and reserve for contingencies and other capital reserves
Total equity capital

0
36
42
65
143

0
471
880
926
2,277

155
203
498
857

0
92
149
235
477

6
526
1,234
1,516
3,282

0
30
88
115
234

0
42
81
149
273

Total liabilities, subordinated notes and debentures and equity capital

2,031

30,074

11,658

8,644

50,642

4,114

3,678

Number of banks
Assets

Cash and due from depository institutions
U.S. Treasury securities
Obligations of other U.S. Government agencies and corporations
Obligations of states and political subdivisions
All other securities
Total securities
Federal funds sold and securities purchased under agreements to resell
Total loans (excluding unearned income)
Allowance for possible loan losses
Net Loans
Lease financing receivables
Bank premises, furniture and fixtures, and other assets representing bank premises
Real estate owned other than bank premises
All other assets
Total assets

1,333
11

5,095
45
5,049
37
169
9
671

750

3,678

Liabilities

Demand deposits of individuals, partnerships and corporations
Time and savings deposits of individuals, partnerships and corporations
Deposits of U.S. government
Deposits of states and political subdivisions
All other deposits
Certified and officers' checks
Total deposits in domestic offices
Demand deposits
Time and "savings deposits
z
ederal funds purchased and securities sold under agreements to repurchase . . .
Interest-bearing demand notes issued to U.S. Treasury
Other liabilities for borrowed money
Mortgage indebtedness and liability for capitalized leases
All other liabilities
Total liabilities
Subordinated notes and debentures

1,737
513
1,224
71
6
27
4
27

Equity Capital

See note at end of table.




1 413
1,187
10
221
49
27

Table B-18—Continued
Domestic assets, liabilities and capital accounts of national banks, June 30, 1979
(Dollar amounts in millions)
South Dakota
Number of banks

_

Assets
Cash and due from depository institutions
U S Treasury securities
Obligations of other U.S. Government agencies and corporations
Obligations of stages and political subdivisions
All other securities
Total securities
Federal funds sold and securities purchased under agreements to resell
Total loans (excluding unearned income)
Allowance for possible loan losses
Net Loans
Lease financing receivables
Bank premises, furniture and fixtures, and other assets representing bank premises
Real estate owned other than bank premises
All other assets . . . .
. . . .
Total
assets
. . . .

Tennessee

Texas

Utah

Vermont

Washington

Virginia

32

70

611

10

12

82

20

$ 227
108
65
314
7

$1,224
837
407
943
54

$ 8,013
3,892
1,565
7,398
224

$ 38
31
7
57
6

$ 1,406
555
403
1,514
37

$ 2,345
366
207
1,107
71

494

2,241

13,079

$ 368
165
68
229
12
474

101

2,509

1,751

18
1,756
15
1,741

375
5,480
71

2,867

5
344
3
341

517
6,994
73
6,921

658
10,399
104

5,409

31,965
350
31,615

139
1,890
18
1,872

2
50
2
43

51
212
28
265

175
1,015
69
1,870

0
10

2,576

9,805

58,703

44
42
3
50
2,992

30
315
17
188
11,904

500
340
18
421
16,327

2,922
5,833
27
828
101
82

3,966
6,819
30
1,515
368
149

9,793

12,847
4,543
8,304
1,157
385
126
27
773

5
501

10,296

Liabilities
Demand deposits of individuals, partnerships and corporations
Time and savings deposits of individuals, partnerships and corporations
Deposits of U.S. government
Deposits of states and political subdivisions
All other deposits
Certified and officers' checks
Total deposits in domestic offices

499
1,521
8
206
23
16

2,333
4,445
24
793
416
48

14,811
20,649
154
6,091
2,999
416

691
1,388
6
319
28
26

2,273

8,060

45,121

2,458

5
447

Demand deposits
Time and savings deposits
Federal funds purchased and securities sold under agreements to repurchase . . .
Interest-bearing demand notes issued to U S Treasury
Other liabilities for borrowed money
Mortgage indebtedness and liability for capitalized leases
All other liabilities

570
1,703
40
15
7
5
36

18,538
26,583
5,508
684
288
110
2,503

795
1,663
204
44
10

101
346
10
2
1
4

54,215

72
2,787

3,350
6,443
654
117
118
71
266

2,375

2,909
5,151
780
44
17
15
179
9,094

465

11,020

15,315

22

31

447

46

3

60

109

0
46
51
82
179

0
144
224
312

0
854
1,057
2,130
4,041

0
35
64
60
159

0
7
9
17

6
203
246
447

33

0
160
260
403
823

58,703

2,992

501

11,904

16,327

Total liabilities
Subordinated notes and debentures
Equity Capital
Preferred stock
Common stock
Surplus
Undivided profits and reserve for contingencies and other capital reserves
Total equity capital
Total liabilities, subordinated notes and debentures and equity capital
See note at end of table.




2,576

680
9,805

88
325
1
28

902

Table B-18—Continued
Domestic assets, liabilities and capital accounts of national banks, June 30, 1979
(Dollar amounts in millions)
West Virginia
Number of banks

Wisconsin

District of
Columbia
nonnational*

Wyoming

107

128

46

1

$ 510
402
401
727
18

$ 985
725
289
1,014
91

$ 228
134
78
255
5

$ 5
13
6
3
2

1,548

2,119

472

24

332

Assets

Cash and due from depository institutions
U.S. Treasury securities
Obligations of other U.S. Government agencies and corporations
Obligations of states and political subdivisions
All other securities
Total securities
Federal funds sold and securities purchased under agreements to resell
Total loans (excluding unearned income)
Allowance for possible loan losses
Net Loans

2,663
28
2,635

310
6,062
58
6,004

55
1,087
11
1,076

Lease financing receivables
Bank premises, furniture and fixtures, and other assets representing bank premises
Real estate owned other than bank premises
All other assets
Total assets

10
124
2
51
5,214

43
221
56
198
9,935

2
39
2
31
1,905

1,066
2,843
10
260
93
41
4,314

1,969
4,584
16
758
290
77
7,694

484
862
15
239
38
15
1,654

19
31
1

1,289
3,025
352
16
18
7
52

2,400
5,294
944
225
41
6
332

610
1,044

20
31
4
0
0
0

4,759

9,242

1,749

56

7

55

9

—

0
73
154
220

0
148
243
247

0

60

4
26
26
0
1
0
1
60

Liabilities

Demand deposits of individuals, partnerships and corporations
Time and savings deposits of individuals, partnerships and corporations
Deposits of U.S. government
Deposits of states and political subdivisions
All other deposits
Certified and officers' checks
Total deposits in domestic offices
Demand deposits
Time and savings deposits
Federal funds purchased and securities sold under agreements to repurchase . .
Interest-bearing demand notes issued to U.S. Treasury
Other liabilities for borrowed money
Mortgage indebtedness and liability for capitalized leases
All other liabilities
Total liabilities
Subordinated notes and debentures

.

45
3
23
4
21

1
52

Equity Capital

Preferred stock
Common stock
Surplus
Undivided profits and reserve for contingencies and other capital reserves
Total equity capital

448

638

0
11
44
92
147

Total liabilities, subordinated notes and debentures and equity capital

5,214

9,935

1,905




* Nonnational banks in the District of Columbia are supervised by the Comptroller of the Currency.
NOTE: Dashes indicate amounts of less than $500,000. Figures may not add to totals because of rounding.

1
2
4

Table B-19
Domestic assets, liabilities and capital accounts of national banks, December 31, 1979
(Dollar amounts in millions)
Total
United States
Number of banks
Assets
Cash and due from depository institutions . . . .
U.S. Treasury securities
Obligations of other U.S. Government agencies and corporations
Obligations of states and political subdivisions
All other securities
Total securities
Federal funds sold and securities purchased under agreements to resell
Total loans (excluding unearned income)
Allowance for possible loan losses
Net Loans

Alabama

Arizona

Alaska

Arkansas

California

Colorado

4,448

99

6

3

68

42

139

$106,731
44,126
24,702
70,796
9,485

$1,169
390
398
1,580
61

$ 986
433
202
727
21

$ 676
305
223
623
42

$ 15,370
4,506
3,698
4,682
686

$ 2,046
506
171
983
17

149,109

2,429

$ 138
84
129
142
3
358

1,383

1,193

13,572

1,678

36,119
442,986
5,296
437,690

451
5,347
67

76
759
8

456
5,327
61

534

5,281

751

5,265

2,818
28
2,790

2,658
73,673
850
72,822

419
5,705
61
5,644

6,780
12,923
1,193
41,711

10
60
6
24

51
195
2
132

12
114
6
90

1,424

8,470

5,415

2,512
1,927
65
6,399
115,325

63
191
23
188
10,253

2,285
4,373
23
303
76
115

1,470
2,303
6
432
230
26

25,571
50,780
262
3,376
3,830
1,432

3,062
3,763
33
684
843
106

Lease financing receivables
Bank premises, furniture and fixtures, and other assets representing bank premises
Real estate owned other than bank premises
All other assets
Total assets

792,256

32
195
23
212
9,792

Liabilities
Demand deposits of individuals, partnerships and corporations
Time and savings deposits of individuals, partnerships and corporations
Deposits of U.S. government
Deposits of states and political subdivisions
All other deposits
Certified and officers' checks

187,201
317,654
1,902
43,484
37,268
7,461

2,512
4,584
27
773
296
65

594,970

8,256

454
436
8
185
4
15
1,103

7,176

4,468

85,250

8,490

234,937
360,033
79,152
7,687
9,439
1,234
42,444

3,058
5,198
436
51
79
6
181

516
587
127
15
11
10
24

2,611
4,565
440
66
194
12
110

1,831
2,637

4,011
4,479
699
89
64
33
172

734,926

9,009

1,290

7,998

388
37
24
12
69
4,997

30,167
55,083
9,810
894
2,590
211
9,774
108,529

9,548

3,034

50

1

47

26

156

41

31
11,403
17,846
25,017

0
37
43
54

0
81
104
208
392

0
1,953
2,180
2,506

134

0
44
126
255
425

6,639

0
118
196
350
664

1,424

8,470

5,415

115,325

10,253

Total deposits in domestic offices
Demand deposits
Time and savings deposits
Federal funds purchased and securities sold under agreements to repurchase . .
Interest-bearing demand notes issued to U.S. Treasury
Other liabilities for borrowed money
Mortgage indebtedness and liability for capitalized leases
All other liabilities
Total liabilities
Subordinated notes and debentures
Equity Capital
Preferred stock
Common stock
Surplus
Undivided profits and reserve for contingencies and other capital reserves
Total equity capital
....

54,296

0
125
287
322
734

Total liabilities, subordinated notes and debentures and equity capital

792,256

9,792

See note at end of table.




Table B-19—Continued
Domestic assets, liabilities and capital accounts of national banks, December 3 1 , 1979
(Dollar amounts in millions)
Connecticut
Number of banks
Assets
Cash and due from depository institutions
U.S. Treasury securities
Obligations of other U.S. Government agencies and corporations
Obligations of states and political subdivisions
All other securities
Total securities
Federal funds sold and securities purchased under agreements to resell
Total loans (excluding unearned income)
Allowance for possible loan losses
Net Loans
Lease financing receivables
Bank premises, furniture and fixtures, and other assets representing bank premises
Real estate owned other than bank premises
All other assets
Total assets
Liabilities
Demand deposits of individuals, partnerships and corporations
Time and savings deposits of individuals, partnerships and corporations
Deposits of U.S. government
Deposits of states and political subdivisions
All other deposits
Certified and officers' checks
Total deposits in domestic offices
Demand deposits
Time and savings deposits
Federal funds purchased and securities sold under agreements to repurchase . . .
Interest-bearing demand notes issued to U.S. Treasury
Other liabilities for borrowed money
Mortgage indebtedness and liability for capitalized leases
All other liabilities
Total liabilities

District of
Columbia

Delaware

Idaho

6

16

221

63

3

7

$ 868
193
111
386
31

$10
11
2
3

$1,018
446
196
843
32

$ 3,805
2,163
1,178
2,449
170

$ 1,972
494
222
748
72

$ 27
13
20
1

$ 454
295
113
322
19

721

16

1,517

5,960

1,536

34

749

103
2,406
27

10
51

155
3,774
41

830

2,379

51

3,733

1,736
10,354
123
10,231

5,081
77
5,004

3
103
1
102

165
2,102
20
2,082

13
73
6
149

0
2

52
484
38
524

69
225
79
519

11
3
1
2

4,311

90

27
90
6
186
6,732

22,830

10,235

183

39
73
2
58
3,622

1,315
1,722
19
233
214
49
3,552

22
54

7,247
9,453
51
1,081
881
240

3,492
3,052
37
715
473
73

60
75

1

2,148
2,504
142
53
316
84

26
3
4

831
1,943
6
221
9
32

80

5,248

18,952

7,841

168

3,043

1,646
1,907

23
57

4,337
3,504

67
100

1,093
26
103
26
372

1
1
0
2

1

2

283
159
22
10
33

1

2,610
2,638
634
90
18
12
223

4,058

81

6,225

8,716
10,236
1,681
140
92
15
266
21,146

9,461

172

952
2,090
202
31
1
4
91
3,372

14

—

11

29

57

2

27

0
370
615
671

0
161
228
327

0
5
3
2

0
39
162
23

1,655

717

10

223

22,830

10,235

183

3,622

0
49
113
77

0
2
3
3

239

8

0
69
138
288
495

Total liabilities, subordinated notes and debentures and equity capital

4,311

90

6,732




Hawaii

19

Subordinated notes and debentures
Equity Capital
Preferred stock
Common stock
Surplus
Undivided profits and reserve for contingencies and other capital reserves
Total equity capital
See note at end of table.

Georgia

Florida

Table B-19—Continued
Domestic assets, liabilities and capital accounts of national banks, December 3 1 , 1979
(Dollar amounts in millions)

Number of banks
Assets
Cash and due from depository institutions
U.S. Treasury securities
Obligations of other U.S. Government agencies and corporations
Obligations of states and political subdivisions
All other securities
Total securities
Federal funds sold and securities purchased under agreements to resell
Total loans (excluding unearned income)
Allowance for possible loan losses
Net Loans

Iowa

Indiana

Illinois

Kentucky

Kansas

Louisiana

Maine

410

119

99

148

79

55

14

$ 7,174
3 645
2,269
6,286
726

$ 984
335
230
672
25
1,261

$1,065
510
356
727
32

$ 864
533
219
752
31

1,625

1,535

$ 1,445
1,333
381
1,009
20
2,743

$ 153
58
81
123
3

12,926

$ 1,820
1,300
628
1,705
231
3,864

2,340
40,856
460
40,396

1,131
8,873
96
8,777

380
3,427
31
3,396

57
682
7
676

265

695

481

3,358
33
3,326

4,208
41
4,168

936
5,213
61
5,152

4
132
7
95
6,948

118
142
5
87

30
205
10
165

0
27
1
16

7,399

10,686

1,195

1,714
2,783
12
829
373
45

1,893
3,378
12
442
360
46

3,055
3,809
40
1,360
456
79

275
629
3
93
6
8

5,755

6,132

8,799

1,015

2,308 r
3,824

3,804

332
682

450
61
65
20
144

4,995
782
49
16
31
166

Lease financing receivables
Bank premises, furniture and fixtures, and other assets representing bank premises
Real estate owned other than bank premises
All other assets
Total assets

196
832
132
3,069

154
278
37
817

8
98
9
113

67,065

16,878

6,248

Liabilities
Demand deposits of individuals, partnerships and corporations
Time and savings deposits of individuals, partnerships and corporations
Deposits of U S government
Deposits of states and political subdivisions
All other deposits
.
Certified and officers' checks

12,909
25,005
117
2,714
3,623
592
44,960

3,432
7,589
25
1,827
469
138
13,480

1,448
3,035
12
258
458
35
5,247

15,965
28,995
11,592
819
440
23
4,582

4,648
8,833
1,514
157
86
26
416

1,960
3,287
386
44
19
9
98

2,282
3,473
468
48
47
2
83

62,415

15,680

5,804

6,403

6,870

9,843

1,110

109

28

28

25

13

33

3

2
813
1,778
1,947

209
403
557

0
66
102
249

0
99
160
261

1
138
262
409

0
20
23
39

810

82

10,686

1,195

Total deposits in domestic offices
Demand deposits
Time and savings deposits
Federal funds purchased and securities sold under agreements to repurchase . . .
Interest-bearing demand notes issued to U S Treasury
Other liabilities for borrowed money
Mortgage indebtedness and liability for capitalized leases
All other liabilities
Total liabilities
Subordinated notes and debentures
Equity Capital
Preferred stock
Common stock
Surplus
Undivided profits and reserve for contingencies and other capital reserves
Total equity capital

4,540

1,170

417

520

0
79
141
296
516

Total liabilities, subordinated notes and debentures and equity capital

67,065

16,878

6,248

6,948

7,399

See note at end of table.




55
18
3
5
14

Table B-19—Continued
Domestic assets, liabilities and capital accounts of national banks, December 3 1 , 1979
(Dollar amounts in millions)
Maryland
Number of banks

Massachusetts

Michigan

Minnesota

Mississippi

Missouri

Montana

31

71

123

205

38

98

56

$ 852
323
102
767
22

$ 2,227
1,867
350
923
187

$ 2,800
1,759
556
3,130
161

$ 2,471
782
592
1,950
458

$ 616
347
165
617
30

$ 2,768
569
412
1,227
198

$ 286
161
62
345
11

1,213

3,327

5,606

3,782

1,159

2,406

579

138

799
7,997
128
7,869

1,199
15,138
144
14,994

621
10,057
100
9,957

280
2,712
30
2,683

2,057
6,557
74
6,483

125
1,607
15
1,592

138
444
36
1,089
26,306

219
229
37
681
17,996

2
104
5
76
4,923

85
175
15
359

6
51
2
38

6,684

195
246
10
1,406
16,079

14,348

2,678

1,704
3,069
11
353
127
50

4,120
4,992
36
715
940
129

5,254
12,597
57
2,086
526
415

4,084
7,327
25
928
886
148

1,240
2,118
7
557
207
18

3,395
4,129
66
699
1,483
70

612
1,454
4
211
48
22

5,315

10,932

20,935

13,398

4,146

9,842

2,350

1,987
3,328
367
91
135
22
317

5,377
5,555
2,730
257
99
24
914

6,519
14,416
2,132
418
74
42
859

1,568
2,578
294
27
37
19
63

4,961
4,881
2,666
188
186
35
559

732
1,618
59
9
3
5
47

6,248

14,956

24,460

5,146
8,252
1,838
260
333
10
876
16,715

4,585

13,477

2,473

3

36

107

145

15

31

19

0
61
96
276

0
347
579
814
1,739

0
304
340
492
1,137

0
48
267
9

4
144
232
461

433

0
162
414
511
1,087

323

840

67
68
51
186

6,684

16,079

26,306

17,996

4,923

14,348

2,678

Assets

Cash and due from depository institutions
U.S. Treasury securities
Obligations of other U.S. Government agencies and corporations
Obligations of states and political subdivisions
All other securities
Total securities
Federal funds sold and securities purchased under agreements to resell
Total loans (excluding unearned income)
Allowance for possible loan losses
Net Loans
Lease financing receivables
Bank premises, furniture and fixtures, and other assets representing bank premises
Real estate owned other than bank premises
All other assets
Total assets
Liabilities

Demand deposits of individuals, partnerships and corporations
Time and savings deposits of individuals, partnerships and corporations
Deposits of U.S. government
Deposits of states and political subdivisions
All other deposits
Certified and officers' checks
Total deposits in domestic offices
Demand deposits
Time and savings deposits
Federal funds purchased and securities sold under agreements to repurchase . . .
Interest-bearing demand notes issued to U.S. Treasury
Other liabilities for borrowed money
Mortgage indebtedness and liability for capitalized leases
All other liabilities
Total liabilities
Subordinated notes and debentures

3,998
39
3,959
58
113
8
344

Equity Capital

Preferred stock
Common stock
Surplus
Undivided profits and reserve for contingencies and other capital reserves
Total equity capital
Total liabilities, subordinated notes and debentures and equity capital
See note at end of table.




Table B-19—Continued
Domestic assets, liabilities and capital accounts of national banks, December 31, 1979
(Dollar amounts in millions)
Nebraska
Number of banks
Assets
Cash and due from depository institutions
....
U.S. Treasury securities
Obligations of other U.S. Government agencies and corporations
Obligations of states and political subdivisions
All other securities
Total securities

New
Hampshire

Nevada

New Jersey

New Mexico

New York

North
Carolina

117

4

36

93

40

116

26

$1,051
285
228
645
63

$ 314
163
148
274
4

$ 212
131
23
173
3

$ 2,411
1,562
1,090
2,874
298
5,824

$ 417
226
125
386
7

$ 1,920
864
423
1,473
270

744

$14,360
3,208
1,358
4,117
3,283
11,966

770

2,288
49,775
910
48,865

870
7,470
87

1,221

588

330

Federal funds sold and securities purchased under agreements to resell
Total loans (excluding unearned income)
Allowance for possible loan losses
Net Loans

406
3,425
37
3,389

27
1,514
15
1,499

51
976
11
965

11,481
125
11,356

248
1,765
19
1,746

Lease financing receivables
Bank premises, furniture and fixtures, and other assets representing bank premises
Real estate owned other than bank premises
All other assets
Total assets

50
95
2
104
6,317

54
66
2
31
2,580

32
2
17

131
360
46
416

4
87
4
44

635
1,105
268
13,448

122
268
12
874

1,609

21,313

3,293

92,936

14,479

1,542
2,788
7
350
512
36
5,234

868
1,121
6
191
2
35
2,224

404
810
5
129
20
16
1,384

5,502
10,493
53
1,338
313
222

18,011
24,712
212
1,929
10,947
1,068
56,879

3,896
5,541
29
808
396
90

17,922

900
1,310
8
530
54
30
2,832

2,159
3,075
428
50
32
12
87

958
1,266
64
20
36
8
28

6,573
11,349
1,292
199
65
6
374

1,048
1,784
137
23
4
17
43

28,411
28,468
13,224
766
2,605
101
10,401

5,843

2,379

501
883
59
15
2
4
20
1,484

19,859

3,056

83,976

4,557
6,204
1,642
204
70
74
666
13,417

28

0

2

58

20

347

149

82
107
258
447

0
47
64
91
201

0
15
47
61
122

2
307
450
637

2
60
89
68

1,396

218

1
1,974
2,625
4,013
8,614

0
212
259
442
914

6,317

2,580

1,609

21,313

3,293

92,936

14,479

Liabilities
Demand deposits of individuals, partnerships and corporations
Time and savings deposits of individuals, partnerships and corporations
Deposits of U S government
. .
Deposits of states and political subdivisions
..
All other deposits
Certified' and officers' checks
Total deposits in domestic offices
Demand deposits
Time and savings deposits
Federal funds purchased and securities sold under agreements to repurchase . . .
Interest-bearing demand notes issued to U S Treasury
.
..
...
Other liabilities for borrowed money
.
Mortgage indebtedness and liability for capitalized leases
All other liabilities
Total liabilities
Subordinated notes and debentures
Equity Capital
Preferred stock
.
...
Common stock
.
Surplus
Undivided profits and reserve for contingencies and other capital reserves
Total equity capital
Total liabilities, subordinated notes and debentures and equity capital
See note at end of table.




3,030

7,383

10,760

Table B-19—Continued
Domestic assets, liabilities and capital accounts of national banks, December 31, 1979
(Dollar amounts in millions)
North Dakota
Number of banks

Ohio

Oklahoma

Pennsylvania Rhode Island

Oregon

South
Carolina

41

177

190

6

223

5

18

$ 233
112
50
246
7

$ 3,986
2,237
1,276
4,443
284

$ 2,112
1,104
103
1,833
116

$1,058
270
53
1,104
18

$ 5,681
3,124
2,682
4,556
1,215

$ 366
316
175
438
44

$ 650
240
136
415
43

415

8,240

3,156

1,445

11,577

973

834

24

2,251
28,790
340
28,450

31
2,458
23
2,434

265
1,954
24

Assets

Cash and due from depository institutions
U.S. Treasury securities
Obligations of other U.S. Government agencies and corporations
Obligations of states and political subdivisions
All other securities
Total securities
Federal funds sold and securities purchased under agreements to resell
Total loans (excluding unearned income)
Allowance for possible loan losses
Net Loans

1,296
11
1,285

1,338
16,987
189
16,797

1,049
6,568
72
6,496

291
5,202
48
5,154

Lease financing receivables
Bank premises, furniture and fixtures, and other assets representing bank premises
Real estate owned other than bank premises
All other assets
Total assets

2
40
2
33
2,035

252
564
16
1,603
32,797

30
192
10
210
13,255

39
174
10
825
8,995

290
610
59
2,853
51,769

109
69
7
269
4,259

515
1,124
4
107
16
19

7,699
15,091
111
1,753
492
258

3,691
5,145
43
1,368
676
133

10,743
23,019
53
2,540
1,273
351

700
2,127
5
171
37
25

1,785

25,405

11,055

2,135
4,117
10
728
104
70
7,164

37,979

3,065

1,554
1,272
10
206
59
26
3,128

576
1,208
37
9
15
3
27

9,062
16,343
3,372
459
185
33
906

4,672
6,383
824
123
37
3
233

1,778
1,350
259
70
29
6
62

30,359

12,275

12,503
25,476
5,071
452
815
61
3,774
48,152

814
2,251
461
52
75
27
320

1,876

2,470
4,695
590
105
42
13
416
8,330

4,000

3,554

16

41

68

165

217

17

13

0
36
41
66

1
173
227
510
911

1
93
149
257
500

11
529
1,252
1,608
3,400

0
30
89
123
242

0
43
82
163
288

13,255

8,995

51,769

4,259

3,855

1,931
16
94
4
61
3,855

Liabilities

Demand deposits of individuals, partnerships and corporations . .
Time and savings deposits of individuals, partnerships and corporations
Deposits of U.S. government
Deposits of states and political subdivisions
All other deposits
Certified and officers' checks
Total deposits in domestic offices
Demand deposits
Time and savings deposits
Federal funds purchased and securities sold under agreements to repurchase . . .
Interest-bearing demand notes issued to U.S. Treasury
Other liabilities for borrowed money
Mortgage indebtedness and liability for capitalized leases
All other liabilities
Total liabilities
Subordinated notes and debentures
Equity Capital

Preferred stock
Common stock
Surplus
Undivided profits and reserve for contingencies and other capital reserves
7~ofa/ equity capital

143

0
496
903
999
2,398

7"ofa/ liabilities, subordinated notes and debentures and equity capital

2,035

32,797

See note at end of table.




Table B-19—Continued
Domestic assets, liabilities and capital accounts of national banks, December 3 1 , 1979
(Dollar amounts in millions)
South Dakota

Tennessee

Texas

Utah

Vermont

Washington

Virginia

33

69

615

11

12

72

21

$ 301
123
84
317
8

$ 1,601
761
464
1,017
70

$ 9,748
3,684
1,642
7,711
247

$ 467
142
70
231
17

$ 52
36
9
65
7

$ 1,179
439
414
1,483
34

532

2,312

13,284

460

117

2,370

$ 2,490
382
203
1,149
38
1,772

Federal funds sold and securities purchased under agreements to resell
Total loans (excluding unearned income)
Allowance for possible loan losses
Net Loans

62

862

4,377

271

14

1,796
16
1,780

5,583
70
5,512

34,200
379
33,821

1,890
20
1,871

350
3
347

440
6,271
67
6,204

472
10,902
110
10,792

Lease financing receivables
Bank premises, furniture and fixtures, and other assets representing bank premises
Real estate owned other than bank premises
All other assets
Total assets

2
55
3
45
2,779

55
217
25
287

197
1,074
53
2,640
65,195

48
43
8
55

0
10
6
546

548
369
19
541

3,222

34
296
13
197
10,734

Liabilities
Demand deposits of individuals partnerships and corporations
Time and savings deposits of individuals, partnerships and corporations
Deposits of U.S. government
Deposits of states and political subdivisions
All other deposits
Certified and officers' checks
Total deposits in domestic offices

610
1,630
7
170
28
23

18,284
22,523
151
5,748
3,491
562

808
1,524
4
286
58
27

2,684
5,397
21
632
111
66
8,912

13,511
4,984
8,526
1,291
209
159
29
722

Number of banks
Assets
Cash and due from depository institutions
U S Treasury securities
Obligations of other U.S Government agencies and corporations
Obligations of states and political subdivisions
All other securities
Total securities

Demand deposits
Time and savings deposits
Federal funds purchased and securities sold under agreements to repurchase . . .
Interest-bearing demand notes issued to U.S. Treasury
Other liabilities for borrowed money
Mortgage indebtedness and liability for capitalized leases
All other liabilities
Total liabilities

10,873
2,584
4,814
55
763
584
71
8,871

17,002
4,321
7,183
25
1,401
433
147

50,758

2,707

95
348
1
41
1
5
492

930
37
24
16
251

22,663
28,096
5,910
472
298
108
2,889

931
1,776
185
31
15

112
380
2
2
7

69

6

2,983
5,929
527
118
84
64
223

2,569

10,129

60,437

3,008

508

9,928

15,922

2,469
700
1,768
33
13
7
8
39

3,430
5,441

Subordinated notes and debentures
Equity Capital
Preferred stock
Common stock
Surplus
Undivided profits and reserve for contingencies and other capital reserves
Total equity capital

22

30

482

46

3

60

124

0
50
56
81
188

0
144
224
345

0
891
1,121
2,265

0
35
65
68

0
130
229
388

6
204
248
498

713

4,276

168

0
7
9
19
35

746

956

Total liabilities, subordinated notes and debentures and equity capital

2,779

10,873

65,195

3,222

546

10,734

17,002

See note at end of table.




Table B-19—Continued
Domestic assets, liabilities and capital accounts of national banks, December 3 1 , 1979
(Dollar amounts in millions)

West Virginia
Number of banks

Wisconsin

District of
Columbia
nonnational*

Wyoming

107

131

47

1

$ 512
422
464
740
18

$ 276
147
89
261
5

$ 3
12
6
3
2

1,644

$ 1,274
788
329
1,121
100
2,338

502

23

384
2,724
27
2,697

370
6,304
60
6,244

123
1,120
12

5
27

1,109

27

10
127
2
56

44
227
56
227

3
40
2
33

0
1

5,431

10,780

2,088

60

1,090
3,007
9
252
65
41

2,364
4,665
19
645
415
83

598
937
11
241
41
18

19
30
1

4,465

8,191

1,846

50

1,268
3,197

727
1,119
28
4
15
4
27

20
30
5
0
0
0

4,959

2,923
5,268
1,273
186
60
7
342
10,059

1,923

56

7

55

9

—

0
74
156
235

0
11
46
98

0

156

1
2
4

2,088

60

Assets

Cash and due from depository institutions
U.S. Treasury securities
Obligations of other U.S. Government agencies and corporations
Obligations of states and political subdivisions
All other securities
Total securities
Federal funds sold and securities purchased under agreements to resell
Total loans (excluding unearned income)
Allowance for possible loan losses
Net Loans
Lease financing receivables
Bank premises, furniture and fixtures, and other assets representing bank premises
Real estate owned other than bank premises
All other assets
Total assets

1

Liabilities

Demand deposits of individuals, partnerships and corporations
Time and savings deposits of individuals, partnerships and corporations
Deposits of U.S. government
Deposits of states and political subdivisions
AH other deposits
Certified and officers' checks
Total deposits in domestic offices
Demand deposits
Time and savings deposits
Federal funds purchased and securities sold under agreements to repurchase . . .
Interest-bearing demand notes issued to U.S. Treasury
Other liabilities for borrowed money
Mortgage indebtedness and liability for capitalized leases
All other liabilities
Total liabilities
Subordinated notes and debentures

385
20
19
7
63

Equity Capital

Preferred stock
Common stock
Surplus
Undivided profits and reserve for contingencies and other capital reserves
Total equity capital

465

0
151
247
267
666

Total liabilities, subordinated notes and debentures and equity capital

5,431

10,780

* Nonnational banks in the District of Columbia are supervised by the Comptroller of the Currency
NOTE: Dashes indicate amounts of less than $500,000. Figures may not add to totals because of rounding.




Table B-20
Domestic office loans of national banks, by states, December 31, 1979
(Dollar amounts in millions)
Loans to
purchase
or carry
securities

Loans to
farmers

Commercial
and industrial loans

Personal
loans to
individuals

Other
loans

Total loans
less unearned
income

$25,580

$6,968

$14,684

$155,073

$104,575

$11,369

$442,986

98

29

99

288
51
4,088
164
138
0
352
306

61
720
91
2
0
8
33

1,705
294
1,354
843
22,015
1,867
748
6
1,063
2,380

1,922
201
1,765
747
15,149
1,592
585
15
837
3,680

125
11
179
76
1,293
119
57

5,347
759
5,327
2,818
73,673
5,705
2,406
51
3,774
10,354

1,316
49
633
8,636
3,748
1,023
693
1,425
1,645
285

162
0
31
4,327
270
45
64
135
139
2

27
0
4
1,401
57
55
87
21
49

1,912
33
608
5,892
2,435
687
873
1,355
1,483
184

153

218
1,004
266
747
737
172
49
4

1,737
22
624
18,884
2,216
831
906
1,181
1,938
203

21
1,238
174
69
61
76
123
9

5,081
103
2,102
40,856
8,873
3,427
3,358
4,208
5,213
682

4,095
8,158
15,416
10,201
2,829
6,666
1,688
3,481
1,592
1,019

1,583
1,585
6,137
2,791
978
1,603
457
459
760
382

110
746
868
407
67
489
5
74
21
4

54
40
77
376
33
175
2
91
2

27
59
126
683
74
300
252
1,206
19
2

1,027
4,112
4,124
3,665
695
2,389
426
766
302
291

1,204
1,435
3,709
1,806
922
1,508
523
808
485
329

90
181
375
472
61
202
23
77
4
12

3,998
7,997
15,138
10,057
2,712
6,557
1,607
3,425
1,514
976

New Jersey
New Mexico . . .
New York
North Carolina . .
North Dakota . . .
Ohio
Oklahoma
Oregon
Pennsylvania . . .
Rhode Island . . .

11,879
1,837
50,596
7,741
1,318
17,719
6,701
5,254
29,674
2,504

5,345
488
8,674
1,415
336
5,954
1,708
1,909
9,762
966

285
28
4,972
302
1
459
225
329
2,481
96

20
4
1,706
72
2
96
146
24
266
19

8
126
369
115
280
256
606
203
206

2,993
555
24,216
2,948
409
4,626
2,294
1,658
9,625
963

3,074
618
8,924
2,709
278
6,075
1,512
1,077
6,558
380

155
17
1,734
180
13
253
211
54
776
80

11,481
1,765
49,775
7,470
1,296
16,987
6,568
5,202
28,790
2,458

South Carolina
South Dakota .
Tennessee
Texas
Utah
Vermont
Virginia
Washington . . .
West Virginia . .
Wisconsin
Wyoming

2,044
1,835
5,817
35,011
1,924
359
6,585
10,967
2,936
6,431
1,154

417
437
1,793
7,516
830
189
2,762
2,841
1,295
2,498
341

15
1
151
1,811
21

5
3
81
843
9
37
42
11
74
3

631
446
1,803
14,600
602
78
1,284
3,939
507
1,911
367

906
369
1,741
7,438
392
78
2,198
2,835
1,068
1,372
291

39
15
164
1,434
29
7
130
211
35
152
14

1,954
1,796
5,583
34,200

81
599
9
265
1

31
564
84
1,369
40
8
93
500
12
159
138

3,867

1,459

353

1,069

840

138

3,801

Total
loans,
gross

Loans
secured
by real
estate

Loans to
financial
institutions

$454,238

$135,989

Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia .
Florida

5,600
784
5,643
2,891
75,423
5,814
2,466
53
3,839
10,795

1,622
277
1,661
983
29,810
1,482
921
32
1,441
4,102

Georgia .
Hawaii . .
Idaho . . .
Illinois . .
Indiana .
Iowa . . . .
Kansas .
Kentucky
Louisiana
Maine . .

5,347
105
2,138
41,382
9,167
3,458
3,421
4,367
5,426
686

Maryland
Massachusetts .
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire

All national banks . .

388
130
2,348
500
15
1
49
42

138
247

1,890
350

6,271
10,902
2,724
6,304
1,120

District of Columbia

air

* Includes national and nonnational banks in the District of Columbia, all of which are supervised by the Comptroller of the Currency.
NOTE: Dashes indicate amounts of less than $500,000.


182


Table B-21
Outstanding balances, credit cards and related plans of national banks, December 31, 1979
(Dollar amounts in thousands)
Credit cards and
other related credit plans

Total
number
of
national
banks
All national banks ,

Outstanding
volume

Number of
national
banks

4,448

1,830

$21,528,485

Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia . . .
Florida
Georgia

99
6
3
68
42
139
19
6
16
221
63

23
4
2
9
34
108
12
1
13
95
28

172,182
42,385
336,295
54,495
4,053,174
392,420
151,281
5
176,397
497,010
383,304

Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada

3
7
410
119
99
148
79
55
14
31
71
123
205
38
98
56
117
4

2
4
159
73
42
21
38
15
13
13
56
69
124
4
43
27
30
3

3,750
72,007
1,725,970
251,150
81,179
103,938
153,610
171,474
27,889
362,491
345,100
716,267
145,736
63,985
399,535
14,000
182,821
55,218

New Hampshire .
New Jersey
New Mexico
New York
North Carolina .
North Dakota . . ,
Ohio
Oklahoma
Oregon
Pennsylvania . . .
Rhode Island . . .

36
93
40
116
26
41
177
190
6
223
5

25
64
11
58
23
15
114
33
3
58
4

34,883
296,439
55,250
4,743,427

South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming

18
33
69
615
11
12
72
21
107
131
47

12
8
13
140
4
2
26
11
20
101
20

139,474

316,723
8,373

17

14

176,559

District of Columbia — all*

404,095

9,023
814,009
198,710
258,842

921,727
74,596

5,395
250,818
866,028

74,289
5,045
311,916

554,515
49,839

* Includes national and nonnational banks in the District of Columbia, all of which are supervised by the Comptroller of the Currency.




183

Table B-22
Income and expenses of foreign and domestic offices and subsidiaries of national
banks, by states, year ended December 3 1 , 1979
(Dollar amounts in millions)
Total
United States
Number of banks
Operating income:
Interest and fees on loans
Interest on balances with depository institutions
Income on federal funds sold and securities purchased under agreements to
resell
Interest on U.S. Treasury securities and on obligations of other U.S. government
agencies and corporations
Interest on obligations of states and political subdivisions in the U.S
Income from all other securities (including dividends on stock)
Income from lease financing
Income from fiduciary activities
Service charges on deposit accounts
Other service charges, commissions, and fees
Other operating income
Total operating income
Operating expenses:
Salaries and employee benefits
Interest on time certificates of $100,000 or more (issued by domestic offices) . .
Interest on deposits in foreign offices
Interest on other deposits
Expense of federal funds purchased and securities sold under agreements to
repurchase
Interest on demand notes issued to the U.S. Treasury and on other borrowed
money
Interest on subordinated notes and debentures
Occupancy expense of bank premises, net, and furniture and equipment expense
Provision for possible loan losses
Other operating expenses
Total operating expenses
Income before income taxes and securities gains or losses
Applicable income taxes
Income before securities gains or losses
Securities gains (losses), gross
Applicable income taxes
Securities gains (losses), net

Alabama

Arizona

Alaska

Arkansas

California

Colorado

68

42

139

$586.8
7.3

$284.8
1.2

$11,140.7
1,623.4

$698.2
.6

7.5

26.7

41.6

392.3

34.9

61.3
80.5
2.5
1.5
17.4
24.6
28.9
15.5

14.8
8.7
.3
1.1
1.5
6.5
6.9
2.0

59.9
35.5
.6
4.1
12.4
31.4
15.7
7.8

38.7
33.4
1.3
1.2
5.2
15.5
9.7
10.5

628.5
264.3
168.3
165.4
152.4
198.4
394.1
368.3

52.6
50.2
.9
6.1
22.3
26.7
27.6
19.5

89,886.1

918.4

150.2

788.2

443.0

15,496.2

939.5

12,403.7
10,723.5
16,903.5
15,737.0

152.5
153.3
0
235.1

38.1
22.9
0
20.9

149.9
88.5
1.8
210.8

78.1
48.0
0
131.3

2,139.7
1,676.9
4,100.5
2,563.5

167.8
151.3
1.9
178.1

8,498.4

53.4

10.7

44.4

42.4

984.8

72.7

2,014.7
265.4
3,571.3
2,251.7
7,356.2

12.5
4.3
47.3
46.1
104.4

16.5
5.2
39.6
29.1
85.9

4.1
2.3
27.9
11.5
48.1

379.0
14.5
548.4
393.8
1,001.8

13.0
3.3
49.2
33.8
122.2

79,725.5

808.9

2.3
.1
13.1
3.9
16.9
128.9

671.8

393.9

13,802.9

793.3

10,160.6
2,753.7
7,406.8
-349.4
-163.2

109.6
12.2
97.3

21.3
6.3
15.0

116.5
38.2
78.2

49.1
5.9
43.2
-1.0
-.2

1,693.3
629.9
1,063.4

146.2
40.2
106.0
-3.4
-1.6

-186.2

-1.0

7,220.7
26.0

96.3
.1
96.4

75.6
0

42.4
0

1,054.3

104.2
.2

15.0

75.6

42.4

1,054.3

104.4

36.0
0

1.8
0

20.4
0

9.9
0

375.1
0

34.9
0

4,448

99

$61,801.9
6,931.2

$647.3
4.5

$100.4
.7

3,551.2

34.4

5,367.2
3,748.2
754.9
730.5
1,345.0
1,316.1
2,453.0
1,887.0

-5.1
-2.5

-1.9
-.9

-2.6
15.0
0

-19.0
-9.8
-9.1

-1.

Income before extraordinary items
Extraordinary items, net
Net income

7,246.7

Cash dividends declared on common stock
Cash dividends declared on preferred stock
Total cash dividends declared

2,648.2
1.5
2,649.7

36.0

20.4

9.9

375.1

34.9

Recoveries credited to allowance for possible loan losses
Losses charged to allowance for possible loan losses
Net loan losses

756.6
2,296.5

9.5
51.0

2.0
5.7

8.8
17.7

116.9
366.0

7.7
35.4

1,539.9

41.5

3.7

8.9

3.3
11.8
8.5

249.1

27.7




Ratio to total operating income:
Interest on deposits
Other interest expense
Salaries and employee benefits
Other non-interest expense
Total operating expenses

48.2
12.0
13.8
14.7
88.7

42.3
7.6
16.6
21.5
88.1

29.2
8.7
25.4
22.6
85.8

38.2
8.4
19.0
19.6
85.2

40.5
11.0
17.6
19.8
88.9

53.8
8.9
13.8
12.5
89.1

Ratio of net income to total equity capital (end of period)

13.3

13.1

11.2

17.8

10.8

15.9

See note at end of table.




35.3
9.5
17.9
21.8
84.4
15.7

Table B-22—Continued
Income and expenses of foreign and domestic offices and subsidiaries of national
banks, by states, year ended December 3 1 , 1979
(Dollar amounts in millions)
Connecticut

District of
Columbia

Delaware

Florida

Georgia

Hawaii

Idaho

19

6

16

221

63

3

7

$267.4
44.6

$ 5.0
.1

$445.0
60.9

$1,125.8
38.5

$627.3
32.7

$11.0

$240.2
2.5

7.9

1.0

22.8

151.9

85.5

.4

17.2

23.3
18.5
2.4
1.1
16.4
5.2
15.9
1.8

1.0
.2
0
0
0
.2
.1
.1

50.8
42.1
1.7
2.7
18.1
14.3
8.2
5.4

276.8
122.4
11.3
5.3
46.5
56.1
80.6
28.2

55.4
40.6
3.8
7.0
22.6
39.5
28.4
76.4

2.7
1.2
0
.3
1.0
.5

28.6
17.1
.7
.7
2.5
10.6
8.7
1.9

404.5

7.6

672.1

1,943.5

1,019.3

17.2

330.8

79.6
34.2
24.6
86.0

1.4
.4
0
2.9

110.1
127.2
99.5
76.5

335.8
187.7
7.5
489.9

201.2
103.8
19.2
156.0

4.4
3.9
0
3.4

60.8
39.1
0
104.4

51.8

0

61.0

155.8

138.7

.1

17.7

10.2
1.0
25.5
10.5
38.6

0
0
.4
.1
1.0

6.5
.6
33.5
17.4
47.3

14.2
2.1
100.8
49.5
309.3

11.9
4.6
57.0
50.0
143.9

.1
.1
1.6

362.2

6.2

579.6

1,652.5

886.3

2.7
16.2

2.7
1.9
13.7
7.1
34.1
281.5

Income before income taxes and securities gains or losses
Applicable income taxes
Income before securities gains or losses

42.4
12.2
30.2

92.5
26.6
65.9

291.0
74.7
216.3

133.0
29.1
103.9

1.0
.5
.5

49.3
14.9
34.3

Securities gains (losses), gross
Applicable income taxes
Securities gains (losses), net

-1.6
-.8
-.8

1.4
.5
.9
-.1

-1.8
-.8

-.1

-1.0

-15.9
-7.2
-8.7

-5.6
-2.2
-3.4

-2.2
-1.1
-1.1

Income before extraordinary items
Extraordinary items, net

29.4
.1
29.5

.9
0

207.7
7.1

100.4
4.7

.9

64.9
.3
65.2

z
—

214.7

105.1

.8

12.7
0
12.7

.2
0
.2

23.3
.1
23.4

91.0
0
91.0

17.9
0

0
0

17.9

0

Number of banks
Operating income:
Interest and fees on loans
Interest on balances with depository institutions
Income on federal funds sold and securities purchased under agreements to
resell
Interest on U.S. Treasury securities and on obligations of other U.S. government
agencies and corporations
Interest on obligations of states and political subdivisions in the U.S
Income from all other securities (including dividends on stock)
Income from lease financing
Income from fiduciary activities
Service charges on deposit accounts
Other service charges, commissions, and fees
Other operating income
Total operating income
Operating expenses:
Salaries and employee benefits
Interest on time certificates of $100,000 or more (issued by domestic offices) . .
Interest on deposits in foreign offices
Interest on other deposits
Expense of federal funds purchased and securities sold under agreements to
repurchase
Interest on demand notes issued to the U.S. Treasury and on other borrowed
money
Interest on subordinated notes and debentures
Occupancy expense of bank premises, net, and furniture and equipment expense
Provision for possible loan losses
Other operating expenses
Total operating expenses

Net income
Cash dividends declared on common stock
Cash dividends declared on preferred stock
Total cash dividends declared




...

.5
.4

33.2
0
33.2
10.7
0
10.7

Recoveries credited to allowance for possible loan losses
Losses c h a r g e d to allowance for possible loan losses

3.1
9.6

4.4
17.9

22.6
59.0

14.9
54.8

.5
.7

2.9
7.9

13.5

36.4

39.9

.2

5.0

6.5

.1
.1

Ratio to total operating income:
Interest on deposits
Other interest expense
Salaries and employee benefits
Other non-interest expense
Total operating'expenses

35.8
15.6
19.7
18.4
89.5

43.4
0
18.4
19.7
81.6

45.1
10.1
16.4
14.6
86.2

35.3
8.9
17.3
23.6
85.0

27.4
15.2
19.7
24.6
87.0

42.4
1.7
25.6
25.0
94.2

43.4
6.7
18.4
16.6
85.1

Ratio of net income to total equity capital (end of period)

12.3

11.3

13.2

13.0

14.7

8.0

14.9

Net loan losses

See note at end of table.

oo
i




Table B-22—Continued

00
00

Income and expenses of foreign and domestic offices and subsidiaries of national
banks, by states, year ended December 31, 1979
(Dollar amounts in millions)
Iowa

Indiana

Illinois
Number of banks

Kansas

Kentucky

Louisiana

Maine

410

119

99

148

79

55

14

$5,503.2
968.6

$967.6
48.8

$350.7
2.6

$364.5
.7

$448.1
3.7

$595.9
8.5

$76.1
.5

248.6

74.1

34.1

48.0

36.7

78.5

5.0

440.3
346.3
70.9
20.4
123.0
58.9
184.8
168.1

159.0
93.0
14.3
12.4
28.9
27.1
31.5
19.0

45.4
35.0
1.6
.7
9.1
9.9
19.1
3.9

69.7
37.1
1.8
.5
8.9
13.1
13.0
6.5

58.2
40.0
.7
8.8
4.9
11.8
18.4
6.5

129.6
52.3
1.8
4.2
9.6
23.0
26.1
6.5

10.1
7.3
.2
0
3.0
2.2
3.8
1.0

8,133.0

1,475.6

512.0

563.7

637.8

936.1

109.2

809.3
1,153.9
2,076.4
1,144.6

224.2
181.8
13.7
431.0

73.9
38.7
1.7
181.8

83.8
74.7
0
166.8

100.3
81.7
11.4
177.2

141.6
192.9
6.7
178.9

22.9
9.3
0
34.6

1,169.6

156.6

45.9

48.3

43.2

86.5

6.2

162.0
10.0
239.0
196.1
464.1

21.2
2.9
77.9
32.6
139.3
1,281.0

6.0
2.6
23.0
10.0
56.1
439.6

6.8
2.0
26.7
11.7
53.9
474.8

10.5
1.1
34.5
20.9
63.9
544.8

5.7
3.0
53.2
26.9
87.3
782.8

1.4
.2
7.3
4.2
12.8
99.0

194 6
39.3
155.3
-2.8
-1.3

72 3
15.7
56.6
-3.9
-1.8

-1.5

-2.1

88 9
22.0
66.9
-3.5
-1.5
-2.1

93 0
20.5
72.4

Securities gains (losses), net

708 0
145.2
562.9
-24.1
-9.8
-14.4

153 3
42.1
111.2
-9.4
-4.3
-5.1

102
.9
9.3
-.2
-.1
-.1

Income before extraordinary items
Extraordinary items, net

548.5
1.7

153.8
.2

64.9
.2

70.5

550.1

154.0

54.5
.2
54.7

65.1

70.5

106.1
.3
106.4

9.2
.2
9.4

178 0
.1

61 5
61.5

20 5
0
20.5

142
0
14.2

29 3
.1

178.1

174
0
17.4

41
0
4.1

Operating income:
Interest and fees on loans
Interest on balances with depository institutions
Income on federal funds sold and securities purchased under agreements to
resell
Interest on U.S. Treasury securities and on obligations of other U.S. government
agencies and corporations
Interest on obligations of states and political subdivisions in the U.S
Income from all other securities (including dividends on stock)
Income from lease financing
Income from fiduciary activities
Service charges on deposit accounts . .
Other service charges, commissions, and fees
Other operating income
Total operating income
Operating expenses:
Salaries and employee benefits
Interest on time certificates of $100,000 or more (issued by domestic offices) . .
Interest on deposits in foreign offices
Interest on other deposits
Expense of federal funds purchased and securities sold under agreements to
repurchase
Interest on demand notes issued to the U.S. Treasury and on other borrowed
money
Interest on subordinated notes and debentures
Occupancy expense of bank premises, net, and furniture and equipment expense
Provision for possible loan losses
Other operating expenses
Total operating expenses
Income before income taxes and securities gains or losses
Applicable income taxes
Income before securities gains or losses
Securities gains (losses), gross
Applicable income taxes

Net income
Cash dividends declared on common stock
Cash dividends declared on preferred stock
Total cash dividends declared




7,424.9

-3.6
-1.6
-2.0

29.4

Recoveries credited to allowance for possible loan losses
Losses c h a r g e d to allowance for possible loan losses

66.7
223.0

11.6
35.5

2.8
9.6

4.8
14.0

4.7
19.8

9.8
28.3

1.3
5.5

156.3

23.9

6.8

9.2

15.1

18.5

4.2

Ratio to total operating income:
Interest on deposits
Other interest expense
Salaries and employee benefits
Other non-interest expense
Total operating expenses

53.8
16.5
10.0
11.1
91.3

42.5
12.2
15.2
16.9
86.8

43.4
10.6
14.4
17.4
85.9

42.8
10.1
14.9
16.4
84.2

42.4
8.6
15.7
18.7
85.4

40.4
10.2
15.1
17.9
83.6

40.2
7.1
21.0
22.3
90.7

Ratio of net income to total equity capital (end of period)

12.1

13.2

13.1

12.5

13.7

13.1

11.5

Net loan losses

See note at end of table.

oo
CO




Table B-22—Continued

8

Income and expenses of foreign and domestic offices and subsidiaries of national
banks, by states, year ended December 3 1 , 1979
(Dollar amounts in millions)
Maryland
Number of banks
Operating income:
Interest and fees on loans
Interest on balances with depository institutions
Income on federal funds sold and securities purchased under agreements to
resell
Interest on U.S. Treasury securities and on obligations of other U.S. government
agencies and corporations
Interest on obligations of states and political subdivisions in the U.S
Income from all other securities (including dividends on stock)
Income from lease financing
Income from fiduciary activities
Service charges on deposit accounts
Other service charges, commissions, and fees
Other operating income
Total operating income
Operating expenses:
Salaries and employee benefits
Interest on time certificates of $100,000 or more (issued by domestic offices) .
Interest on deposits in foreign offices
Interest on other deposits
Expense of federal funds purchased and securities sold under agreements to
repurchase
Interest on demand notes issued to the U.S. Treasury and on other borrowed
money
Interest on subordinated notes and debentures
Occupancy expense of bank premises, net, and furniture and equipment expense
Provision for possible loan losses
Other operating expenses
Total operating expenses
Income before income taxes and securities gains or losses
Applicable income taxes
Income before securities gains or losses
Securities gains (losses), gross
Applicable income taxes
Securities gains (losses), net
Income before extraordinary items
Extraordinary items, net
Net income




Massachusetts

Michigan

Minnesota

Mississippi

Missouri

Montana

31

71

123

205

38

98

56

$444.5
25.0

$1,438.6
277.4

$1,723.0
130.4

$1,114.6
52.4

$289.7
2.9

$765.7
10.8

$178.6
.4

28.6

94.5

105.8

56.6

21.4

168.0

8.4

33.4
36.4
.8
4.1
7.9
15.3
11.8
8.0
615.9

149.3
43.7
50.9
51.8
65.3
18.4
67.0
49.2

178.7

116.1
101.8
2.4

76.5
60.6
2.6
6.9

2,306.0

2,494.5

14.4
32.6
20.1
54.7
54.5
1,620.2

39.4
32.2
1.5
.2
3.6
11.6
14.7
4.3
421.6

16.4

159.9

1,200.0

115.3
56.3
37.4
144.2

334.7
240.7
626.5
174.1

407.0
321.7
142.7
711.8

206.0
264.4
93.2
339.9

64.4
70.7
0
118.8

180.6
52.4
187.1

35.3
25.9
0
85.1

61.5

317.3

202.5

225.3

34.1

262.7

8.4

15.3
.3
35.8
20.0
57.6

79.3
2.7

37.7
8.8
123.6
52.1
218.9

44.3
12.1
46.9
33.5
148.8
1,414.4

3.4
1.1
22.2
13.1
43.6
371.5
50.1
6.6
43.5

1.9
1.6
8.4
2.5
23.7
192.9
44.0
12.3
31.7
-1.1
-.5

543.8

72.0
14.4
57.7
-3.4
-1.6
-1.8
55.9
55.9

10.6
7.7
48.8

41.3
42.8
45.4

29.1
14.9
41.6
23.1

162.5

17.4
.6
.6
.4
4.8
7.0
2.2
236.9

267.6
37.4
230.2

205.8
44.9

-6.0
-3.5

-17.0
-7.8

-7.3
-3.6

22.7
1.6
53.6
25.3
113.6
1,062.0
138.0
31.5
106.4
-4.2
-1.9

-2.5

-9.2

-3.7

-2.3

-.6

116.1
.3
116.4

221.0
.1

157.2
.5

43.5

104.1

31.0
.1

221.2

157.6

43.5

104.1

31.1

92.3

69.5
177.2
2,114.4
191.7
73.1
118.6

2,226.8

160.9

14.7
0
14.7

Net loan losses

See note at end of table.

CO




.. . .

48.1
0
48.1

115.0
0
115.0

48.9
0
48.9

10.1
0
10.1

49.6
.1
49.7

11.6

4.6
19.5
14.9

Recoveries credited to allowance for possible loan losses
Losses charged to allowance for possible loan losses
Ratio to total operating income:
Interest on deposits
Other interest expense
Salaries and employee benefits
Other non-interest expense
Total operating expenses
Ratio of net income to total equity capital (end of period)

cpo

Cash dividends declared on common stock
Cash dividends declared on preferred stock
Total cash dividends declared

18.4
56.6
38.2

16.8
61.0
44.2

6.6
21.1
14.5

4.3
13.6
9.3

8.5
26.3
17.8

1.4
2.8
1.4

38.6
12.5
18.7
18.4
88.3

45.2
17.3
14.5
14.7
91.7
10.7

47.2
10.0
16.3
15.8
89.3

43.1
17.4
12.7
14.1
87.3

44.9
9.2
15.3
18.7
88.1

35.0
23.9
13.5
16.0
88.5

46.9
5.0
14.9
14.6
81.4

12.7

13.9

13.5

12.4

16.7

12.9

Table B-22—Continued

CO

Income and expenses of foreign and domestic offices and subsidiaries of national
banks, by states, year ended December 31, 1979
(Dollar amounts in millions)
Nebraska
Number of banks
Operating income:
Interest and fees on loans
Interest on balances with depository institutions
Income on federal funds sold and securities purchased under agreements to
resell
Interest on U.S. Treasury securities and on obligations of other U.S. government
agencies and corporations
Interest on obligations of states and political subdivisions in the U.S
Income from all other securities (including dividends on stock)
Income from lease financing
Income from fiduciary activities
Service charges on deposit accounts
Other service charges, commissions, and fees
Other operating income
Total operating income
Operating expenses:
Salaries and employee benefits
Interest on time certificates of $100,000 or more (issued by domestic offices) . .
Interest on deposits in foreign offices
Interest on other deposits
Expense of federal funds purchased and securities sold under agreements to
repurchase
Interest on demand notes issued to the U.S. Treasury and on other borrowed
money
.
..
.
..
. . . . . .
Interest on subordinated notes and debentures
Occupancy expense of bank premises, net, and furniture and equipment expense
Provision for possible loan losses
.
..
Other operating expenses
Total operating expenses
Income before income taxes and securities gains or losses
Applicable income taxes
Income before securities gains or losses
Securities gains (losses) gross
Applicable income taxes
Securities gains (losses), net
Income before extraordinary items
Extraordinary items, net
Net income




New
Hampshire

Nevada

New Jersey

New Mexico

New York

North Carolina

117

4

36

93

40

116

26

$364.3
.7

$162.9
1.5

$103.6
.8

$1,157.0
16.2

$193.8
2.8

$13,060.7
2,316.2

$858.5
132.6

37.0

6.3

6.1

63.6

17.7

308.0

11.1

42.8
34.6
1.2
4.0
9.1
9.8
25.1
10.4

24.6
14.0
.2
7.4
3.6
11.0
3.4
3.3

10.6
10.1
.4

28.5
18.7
.5
,4
3.6
9.0
10.6
1.7

373.4
277.0
289.1
214.6
169.3
67.3
662.3
505.0

104.1
74.1
2.1
15.2
30.9
33.8
34.1
45.8

539.0

238.1

3.3
2.5
2.9
1.1
141.4

198.2
152.5
22.8
12.3
25.2
35.9
33.3
27.5
1,744.5

287.3

18,243.1

1,408.9

82.3
51.1
0
158.8

47.6
37.9
0
51.6

27.7
12.8
0
41.6

323.2
174.7
22.5
545.5

49.3
55.7
0
72.8

2,013.9
1,061.1
7,875.8
1,221.4

229.9
165.1
144.9
259 8

45.4

9.1

5.1

130.4

12.3

1,375.2

165.6

9.5
2.3
28.2
11.2
59.3

1.9
0
12.6
4.0
25.3

2.5
.1
9.6
4.2
21.2

2.0
1.8
18.0
5.9
28.6

733.9
48.1
564.4
421.7
1,219.4

448.1

190.0

124.8

18.2
4.5
105.2
35.3
189.5
1,549.0

246.4

16,534.9

18.4
10.8
64.4
34.2
130.5
1,223.4

90.8
23.3
67.6
-2.3
-.9
-1.4

48.1
14.4
33.7

195.5
11.7
183.8

40.9
10.2
30.7

1,708.3
683.7
1,024.5

-2.4
-1.1

16.6
2.3
14.3
-.4
-.2

-1.3

-.2

-5.7
-2.5
-3.2

-.7
-.1
-.6

-48.3
-26.2
-22.1

185.5
48.1
137.5
-12.4
-6.1
-6.3

32.4
0
32.4

14.1
0
14.1

180.6
.1
180.8

30.1

1,002.5
.7
1,003.2

131.1
.9
132.1

66.2
66.2

30.1

13.4
0
13.4

5.1
0
5.1

79.5
.1
79.6

8.2
0
8.2

366.3
.1
366.4

35.7
0
35.7

1.5
4.0

Net loan losses

6.5
14.2
7.7

2.5

1.1
3.1
2.0

14.0
35.8
21.8

3.0
7.3
4.3

193.6
476.0
282.4

7.8
29.0
21.2

Ratio to total operating income:
Interest on deposits
Other interest expense
Salaries and employee benefits
Other non-interest expense
Total operating expenses

38.9
10.6
15.3
18.3
83.1

37.6
4.6
20.0
17.6
79.8

38.5
5.4
19.6
24.8
88.3

42.6
8.8
18.5
18.9
88.8

Ratio of net income to total equity capital (end of period)

14.8

16.1

11.6

13.0

44.7
5.6
17.2
18.3
85.8
13.8

55.7
11.8
11.0
12.1
90.6
11.6

40.4
13.8
16.3
16.3
86.8
14.5

Cash dividends declared on common stock
Cash dividends declared on preferred stock
Total cash dividends declared
Recoveries credited to allowance for possible loan losses
Losses charged to allowance for possible loan losses

See note at end of table.

CO
CO




22.1
22.1

Table B-22—Continued

CO

Income and expenses of foreign and domestic offices and subsidiaries of national
banks, by states, year ended December 31, 1979
(Dollar amounts in millions)
North Dakota
Number of banks
Operating income:
Interest and fees on loans
Interest on balances with depository institutions
Income on federal funds sold and securities purchased under agreements to
resell
Interest on U.S. Treasury securities and on obligations of other U.S. government
agencies and corporations
Interest on obligations of states and political subdivisions in the U.S
Income from all other securities (including dividends on stock)
Income from lease financing
Income from fiduciary activities
Service charges on deposit accounts
Other service charges, commissions, and fees
Other operating income
Total operating income
Operating expenses:
Salaries and employee benefits
Interest on time certificates of $100,000 or more (issued by domestic offices) . .
Interest on deposits in foreign offices
Interest on other deposits
Expense of federal funds purchased and securities sold under agreements to
repurchase
Interest on demand notes issued to the U.S. Treasury and on other borrowed
money
Interest on subordinated notes and debentures
Occupancy expense of bank premises, net, and furniture and equipment expense
Provision for possible loan losses
Other operating expenses
Total operating expenses

Oklahoma

Ohio

Oregon

Pennsylvania Rhode Island South Carolina

41

177

190

$132.8
.4

$1,886.0
132.6

$758.9
5.7

$598.8
42.4

$3,297.1
324.9

$285.5
9.8

$226.2
.2

3.4

137.4

69.6

25.6

278.2

10.3

32.5

13.2
13.2
.5

95.5

26.2
54.3
.9

1.0
2.6
5.0
1.1

268.4
231.1
8.9
21.5
58.0
69.5
68.3
25.6

25.9
20.1
22.0

38.4
25.2
1.3
8.9
13.9
4.2
6.5
13.6

25.0
20.9
.2
1.5
6.6
18.5

9.8

447.6
247.1
42.3
24.4
107.9
40.4
99.5
118.5

173.3

2,907.4

1,108.0

821.1

5,027.9

417.6

350.2

25.6
11.7
0
71.3

454.7
339.4
55.2

148.9
130.1

679.7
732.7

769.7

156.3
271.6
10.3
231.6

19.3
199.0

550.1
1,050.2

58.9
96.4
29.2
78.2

87.0
20.7
.5
63.0

6.0

327.3

76.6

66.6

686.4

52.1

29.5

2.7
1.3
7.1
4.2
16.7
146.4

38.1
2.7
138.8
67.1
305.2

11.2
6.3
42.7
31.2
106.3

11.6
11.2
34.3
16.2
70.0

121.8
19.2
201.2
131.2
348.8

5.3
1.4
15.4
12.7
38.2

6.9
1.1

2,498.1

944.0
164.0
29.9

707.1

4,521.3

387.8

506.6
67.0
439.6

29.8
-.4
30.3

-9.8
-4.0

114.0
30.9
83.1
-4.3
-2.2

25.3
9.9
46.8
290.9
59.2
16.6
42.6

-42.3
-19.3

-2.0
-1.0

—8
-'3

90.6
3.1
2.0
14.6

223

4.1
14.2
30.9
13.9

18

10.2
8.5

Income before income taxes and securities gains or losses
Applicable income taxes
Income before securities gains or losses

26.9
6.1
20.7

Securities gains (losses), gross
Applicable income taxes
Securities gains (losses), net

-.9
-.3

409.2
71.0
338.2
-27.5
-11.9

-.5

-15.6

-5.8

-2.1

-23.0

-1.0

-.4

Income before extraordinary items
Extraordinary items, net
Net income

20.2

322.6
.1
322.7

128.4
2.2

81.0
0

416.6
-.2

29.3
0

130.6

81.0

416.3

29.3

42.2
0
42.2




20.2

134.2

Cash dividends declared on common stock
Cash dividends declared on preferred stock
Total cash dividends declared
Recoveries credited to allowance for possible loan losses
Losses charged to allowance for possible loan losses . .
Net loan losses
Ratio to total operating income:
Interest on deposits
Other interest expense
Salaries and employee benefits
Other non-interest expense
Total operating expenses
Ratio of net income to total equity capital (end of period) . .
See note at end of table.

CO




6.9
0

34.2

30.6
0

192.5
.2

6.9

181.0
0
181.0

34.2

30.6

192.7

.6
3.3

29.5
80.3

9.5
31.2

4.6
12.6

28.5
115.8

2.7

50.8

21.7

8.0

47.9
5.8
14.8
16.2
84.5

40.0
12.7
15.6
17.6
85.9

46.3
8.5
14.1
16.3
85.2

14.1

13.5

14.3

42.4
10.9
18.1
14.7
86.1
16.2

11.5
0
11.5

12.0
0
12.0

4.0
11.0

87.3

2.6
11.2
8.6

46.4
16.5
13.5
13.5
89.9

48.8
14.1
14.1
15.9
92.9

24.0
10.7
24.8
23.4
83.1

12.2

12.1

14.6

7.0

Table B-22—Continued

8

Income and expenses of foreign and domestic offices and subsidiaries of national
banks, by states, year ended December 3 1 , 1979
(Dollar amounts in millions)
South Dakota
Number of banks
Operating income:
Interest and fees on loans
Interest on balances with depository institutions
Income on federal funds sold and securities purchased under agreements to
resell
Interest on U.S. Treasury securities and on obligations of other U.S. government
agencies and corporations
Interest on obligations of states and political subdivisions in the U.S
Income from all other securities (including dividends on stock)
Income from lease financing
Income from fiduciary activities
Service charges on deposit accounts
Other service charges, commissions, and fees
Other operating income
Total operating income
Operating expenses:
Salaries and employee benefits
Interest on time certificates of $100,000 or more (issued by domestic offices) . .
Interest on deposits in foreign offices
Interest on other deposits
Expense of federal funds purchased and securities sold under agreements to
repurchase
Interest on demand notes issued to the U.S. Treasury and on other borrowed
money
Interest on subordinated notes and debentures
Occupancy expense of bank premises, net, and furniture and equipment expense
Provision for possible loan losses
Other operating expenses
Total operating expenses
Income before income taxes and securities gains or losses
Applicable income taxes
Income before securities gains or losses
Securities gains (losses), gross
Applicable income taxes
Securities gains (losses), net
Income before extraordinary items
Extraordinary items, net
Net income




Tennessee

Texas

Utah

Vermont

Virginia

Washington

33

69

615

11

12

72

21

$182.1
.8

$629.3
7.3

$4,089.8
458.3

$232.6
2.2

$35.9
.2

$707.2
19.8

$1,319.8
67.3

5.7

70.0

365.4

14.6

1.7

48.7

58.3

97.6

430.5
385.2
13.5

19.2
12.8
.2
2.6
3.7
10.2
9.3
3.8
311.2

3.3
3.2
.5
0
.4

69.8
74.7

49.9
58.5
2.4
54.6
26.6
50.6
38.0
27.9

14.7
17.0
.6
.3
1.3
4.4
7.1
2.2
236.1

956.1

100.5
117.5
128.4
62.0
6,161.9

34.2
21.6
0
99.7

164.5
135.4
3.7
248.2

718.2
1,253.2
703.2
1,028.0

45.4
72.2
0
64.8

4.1

95.8

676.1

2.3
1.8
9.5
6.4
21.2

4.8
2.0
57.7
29.5
101.7

58.7
35.6
194.7
154.4
519.5

200.8

843.3

5,341.8

35.3
8.3
26.9
-1.1
-.5

820.2
180.9
639.3

49.7
1.7
5.5
16.8
29.7
33.5
14.9

-.6

112.8
26.6
86.2
-2.9
-1.4
-1.5

26.4
.1

84.7
3.8

26.4

88.5

10.9

-20.2
-9.1

-11.1
628.2
1.2
629.4

1.2
2.9
19.4
15.9
28.4

47.2

16.7
1,004.8
186.0

1,754.1

19.3

94.3
7.7
305.5

325.1
280.0
108.9
338.8

27.2

.5

68.5

156.2

2.6
4.1
13.2
7.1
33.4
269.8
41.4
12.1
29.3
-2.4
-1.2
-1.2
28.1
0
28.1

.4
.3
2.8
1.0
4.8
41.4
5.8
1.0
4.8
-.3
-.1

11.8
4.7
60.4
27.6
120.2

34.3
10.0
90.1
38.5
173.4

886.8

1,555.2

117.9
16.2

198.9

101.7

141.0
-3.7
-1.7

9.0
3.3
0

-.2

-7.3
-3.3
-4.0

4.7

97.7
.2

4.7

97.9

57.9

-2.0
139.0
.1
139.1

Cash dividends declared on common stock
Cash dividends declared on preferred stock
Total cash dividends declared

9.7
0
9.7

29.0
0
29.0

209.4
,3
209.7

11.4
0
11.4

1.6
0
1.6

38.9
0
38.9

41.1
.4
41.5

Recoveries credited to allowance for possible loan losses
Losses charged to allowance for possible loan losses
Net loan losses

1.9
7.8
5.9

16.7
41.7

42.3
138.0
95.7

.8
4.9
4.1

.2
.9
.7

8.9
29.3
20.4

11.2
34.4
23.2

51.4
3.5
14.5
15.7
85.0
14.0

40.5
10.7
17.2
19.8
88.2
12.4

48.4
12.5
11.7
14.1
86.7

44.0
10.9
14.6
17.3
86.8
16.7

47.9
2.5
19.1
18.2
87.7

40.6
8.5
18.5
20.7
88.3

41.5
11.4
18.5
17.2
88.7

13.5

13.1

14.6

Ratio to total operating income:
Interest on deposits
Other interest expense
Salaries and employee benefits
Other non-interest expense
Total operating expenses
Ratio of net income to total equity capital (end of period)
See note at end of table.




25.0

14.7

Table B-22—Continued

CO

00




Income and expenses of foreign and domestic offices and subsidiaries of national
banks, by states, year ended December 31, 1979
(Dollar amounts in millions)
West Virginia
Number of banks

,

Operating income:
Interest and fees on loans
Interest on balances with depository institutions
Income on federal funds sold and securities purchased under agreements to
resell
Interest on U.S. Treasury securities and on obligations of other U.S. government
agencies and corporations
Interest on obligations of states and political subdivisions in the U.S
Income from all other securities (including dividends on stock)
Income from lease financing
Income from fiduciary activities
Service charges on deposit accounts
Other service charges, commissions, and fees
Other operating income
Total operating income
Operating expenses:
Salaries and employee benefits
Interest on time certificates of $100,000 or more (issued by domestic offices) . .
Interest on deposits in foreign offices
Interest on other deposits
Expense of federal funds purchased and securities sold under agreements to
repurchase
Interest on demand notes issued to the U.S. Treasury and on other borrowed
money
Interest on subordinated notes and debentures
Occupancy expense of bank premises, net, and furniture and equipment expense
Provision for possible loan losses
Other operating expenses
Total operating expenses
Income before income taxes and securities gains or losses
Applicable income taxes
Income before securities gains or losses
Securities gains (losses), gross
Applicable income taxes
Securities gains (losses), net
Income before extraordinary items
Extraordinary items, net
Net income

Wisconsin

Wyoming

District of
Columbia
Nonnational*

107

131

47

1

$270.8
3.1

$678.9
35.3

$128.7
.4

$2.7
0

39.9

33.6

7.5

.3

65.3
37.5
1.3
1.0
5.8
4.6
7.4
3.0
439.6

85.7
56.4
4.6
5.7
15.6

17.9
13.1
.6
.3

1.5
.2
.1
0
0
.2

994.1

2.1
180.2

64.9
36.1
0
163.7

142.5
114.6
55.2
261.7

28.3
21.2
0
58.0

1.3

35.8

141.0

4.3

.4

3.3
.6
19.8
10.1
44.0

19.3
4.6
45.4
12.4
97.9

0

378.3

894.7

2.0
.7
8.0
4.4
17.3
144.2

61.3
8.5
52.8

99.4
20.6
78.8

-2.2
-.8

-4.5
-2.2

9.6
26.4
-1.0
-.3

-1.4
51.5
.2
51.6

-2.3

-.6

76.4

25.7

76.4

25.7

14.1
40.1
24.0

1.4
5.3
2.8

35.9

5.0
1.1
.4
0

.2
.4
4.6
.4
.1
.3

.3
.1




Cash dividends declared on common stock
Cash dividends declared on preferred stock
Total cash dividends declared

14.0
0
14.0

29.0
0
29.0

8.2
0
8.2

.1

Recoveries credited to allowance for possible loan losses
Losses charged to allowance for possible loan losses . . .
Net loan losses

2.5
11.5
9.0

4.5
15.2
10.7

1.6
4.3
2.7

.1
.3
.2

45.5
9.0
14.8
16.8
86.1
11.1

43.4
16.6
14.3
15.7
90.0

44.0
3.9
15.7
16.5
80.0

11.5

16.5

34.0
8.0
22.0
28.0
92.0
10.0

Ratio to total operating income:
Interest on deposits
Other interest expense
Salaries and employee benefits
Other non-interest expense
Total operating expenses
Ratio of net income to total equity capital (end of period)

. .

* Nonnational banks in the District of Columbia are supervised by the Comptroller of the Currency.
NOTE: Dashes indicate amounts of less than $50,000. Data may not add to totals because of rounding.

.1

Table B-23
National banks engaged in lease financing, December 31, 1979
(Dollar amounts in thousands)
Total number
of national
banks
All national banks

Number of banks
engaged in lease
financing

Amount of lease
financing at
domestic offices

4,448

838

$6,780,330

Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia .
Florida

99
6
3
68
42
139
19
6
16
221

9
2
1
11
12
37
1
0
3
44

31,872
10,132
50,862
11,942
2,512,363
63,381
12,541
0
27,462
52,055

Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine

63
3
7
410
119
99
148
79
55
14

15
1
3
81
26
20
26
15
11
0

69,073
10,757
38,810
196,437
154,399
7,517
3,766
118,324
30,448
0

Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire

31
71
123
205
38
98
56
117
4
36

5
11
22
36
6
26
17
28
3
1

57,826
195,304
137,661
218,827
2,022
85,072
6,112
50,166
53,836
1

New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania

93
40
116
26
41
177
190
6
223

9
14
14
6
9
42
87
2
11

130,650
3,501
634,879
122,158
2,282
252,274
30,131
38,608
290,394

Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming

5
18
33
69
615
11
12
72
21
107
131
47

3
2
5
10
73
3
0
3
9
17
28
18

109,375
16,418
1,746
55,192
197,169
47,612
0
34,014
547,918
10,279
43,961
2,801

District of Columbia—air

17

* Includes the nonnational bank in the District of Columbia, which is also supervised by the Comptroller of the Currency.


200


27,462

Table B-24
Assets and equity capital, net income, and dividends of national banks, 1967-1979
(Dollars in millions)
Ratios (percent)

Capital stock (par value)

Year

1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

Number
of
banks
4,758
4,716
4,669
4,621
4,600
4,614
4,661
4,708
4,744
4,737
4,655
4,564
4,448

Total
assets*
(foreign
and
domestic)
NA
NA
NA
NA
NA
$489,403
569,451
629,568
658,751
704,329
796,851
892,272
996,281

Preferred

$55
58
62
63
43
42
37
13
14
19
25
29
31

Common

$5,312
5,694
6,166
6,457
6,785
7,458
7,904
8,336
8,809
9,106
9,552
9,912
11,403

Total

Total
equity
capital*

$5,367 $18,495
5,752 20,268
6,228 22,134
6,520 23,714
6,828 25,624
7,500 28,223
7,941
30,935
8,349 33,572
8,823 36,688
9,125
41,325
9,577 44,999
9,941
49,207
11,434
54,296

Net income
before
dividends
$1,757
1,932
2,534
2,829
3,041
3,308
3,768
4,044
4,259
4,591
5,139
6,173
7,247

Cash
dividends
on
capital
stock

Net income
before
dividends to
total
assets

Net income
before
dividends to
total
equity capital

Cash
dividends to
net income
before
dividends

$796
897
1,068
1,278
1,390
1,310
1,449
1,671
1,821
1,821
1,994
2,196
2,650

NA
NA
NA
NA
NA
.68
.66
.64
.65
.65
.64
.69
.73

9.50
9.53
11.45
11.93
11.87
11.72
12,18
12.05
11.61
11.11
11.42
12.54
13.35

45.30
46.43
42.15
45.17
45.71
39.60
38.46
41.32
42.76
39.66
38.80
35.57
36.57

* Data are not exactly comparable because assets through 1975 are net of reserves on loans and securities and since then are net of valuation reserves and unearned discount on loans. Also, equity capital beginning for 1976 is reported including certain portions of the reserves on loans and securities which were not reported separately for the years 1969-1975.




Cash
dividends
to total
equity
capital
4.30
4.43
4.83
5.39
5.42
4.64
4.68
4.98
5.00
4.41
4.43
4.46
4.88

Table B-25
Loan losses and recoveries of national banks, 1970-1979
Year

Total loans at
domestic offices,
end of year, net

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

$173,456,091
190,308,412
226,354,896
266,937,532
292,732,965
287,362,220
299,833,480
340,605,630
390,104,999
437,689,952

Net loan losses at
domestic offices
$601,734
666,190
545,473
731,633
1,193,730
2,047,643
1,819,748
1,380,261
1,277,398
1,477,753

Ratio of net losses
to loans, net
(Percent)
0.35
0.35
0.24
0.27
0.41
0.71
0.61
0.41
0.33
0.34

Total loans,
foreign and domestic,
end of year, net*

$372,458,078
429,317,723
490,142,134
547,397,282

Total net loan

lossest

Ratio of net losses
to loans, net
(Percent)

$2,105,582
1,670,903
1,438,705
1,539,866

* Loans used in all years are net of reserves; after 1975, loans are also net of unearned discount.
t Beginning in 1976 national banks report consolidated loan losses and recoveries including those on loans at foreign offices.
NOTE: For earlier data, see Annual Reports of the Comptroller of the Currency, 1947, p. 100; 1968, p. 233 and 1975, p. 161.

202



0.57
0.39
0.29
0.28

Table B-26
Assets and liabilities of national banks, date of last report of condition, 1972-1979
(Dollar amounts in millions)
Liabilities

Consolidated foreign and domestic assets
Year
1972
1973
1974
1975
1976
1977
1978
1979

Number
of
banks

Total
assets*

Cash
and due
from banks

Total
securities*

Loans,
net*

Other
assets

4,614
4,661
4,708
4,744
4,737
4,655
4,564
4,448

$485,181
564,714
624,300
648,350
704,329
796,851
892,272
996,281

$ 91.345
108,128
112,790
117,715
126,437
150,508
170,146
188,554

$105,195
106.833
109,376
128,163
139,472
143,219
146,155
155,395

$253,538
303,931
345,527
347,686
372,458
429,318
490,142
547,397

$35,103
45,822
56,607
54,786
65,962
73,806
85,829
104,935

Total
deposits
$412,316
470,143
519,536
540,492
582,246
654,057
717,057
785,272

* For years 1972-1975, data are net of securities and loan reserves. Since 1975 data are net of valuation reserves and unearned discount on
loans.
t Includes subordinated capital notes and debentures.
NOTE: For earlier data on domestic office assets and liabilities, see Annual Report of the Comptroller of the Currency, 1977, p. 200.




Other
liabilities}
$44,499
63,675
71,191
71,204
80,758
97,795
126,008
156,713

Total
equity
capital
$28,366
30,896
33,573
36,654
41,325
44,999
49,207
54,296

Table B-27
Consolidated assets and liabilities of national banks with foreign operations, December 31, 1979
(Dollar amounts in millions)
Foreign* and
domestic offices
Cash and due from depository institutions
U.S. Treasury securities
Obligations of other U.S. government agencies and corporations
Obligations of states and political subdivisions in the United States
Other bonds, notes, and debentures
Federal Reserve stock and corporate stock
Trading account securities
Federal funds sold and securities purchased under agreements to resell
Loans, total (excluding unearned income)
Less: Allowance for possible loan losses
Loans, net
Lease financing receivables
Bank premises, furniture and fixtures, and other assets representing bank premises
Real estate owned other than bank premises
Investments in unconsolidated subsidiaries and associated companies
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
Deposits of United States government
Deposits of states and political subdivisions in the United States
Deposits of foreign governments and official institutions
Deposits of commercial banks
Certified and officers' checks

Domestic
offices

$148,742
20,216
10,645
32,402
5,844
824
6,428
18,655
376,021
3,632

$ 66,920
20,062
10,596
31,929

372,389
6,989
7,489
975
828
21,780

262,682

1,056
703
5,726
18,328
266,149
3,466

5,696
6,655
856
472
16,258
20,179
468,117

17,935
672,142

105,057
159,569

105,057

159,569
1,088
18,983
3,878

1,088

18,983
3,878

Total deposits in domestic offices

319,352

23,166
4,611
319,352

Total demand deposits
Total time and savings deposits
Total deposits in foreign offices*

136,795
182,557

136,795
182,557

Total deposits
Federal funds purchased and securities sold under agreements to repurchase
Interest-bearing demand notes issued to the U.S. Treasury
Other liabilities for borrowed money
Mortgage indebtedness and liabilities for capitalized leases
Banks' liability on acceptances executed and outstanding
Other liabilities
Total liabilities
Subordinated notes and debentures
Preferred stock
Common stock
Surplus
Undivided profits
Reserve for contingencies and other capital reserves
Total equity capital
Total liabilities and equity capital
Number of banks

26,166
4,611

190,302

NA

509,654
63,935
5,404

319,352
63,777
5,404
8,395
802

16,675
846
22,023

17,434

20,492

20,892
639,429

435,656

2,144
10
6,567
10,135
13,495
362

10
6,567
10,135
13,495
362

30,569

30,569

672,142

468,117

1,893

111

* For reporting purposes, foreign offices include Edge and Agreement subsidiaries located in the U.S. and branches in Puerto Rico, Virgin Islands and Trust Territories.


204


Table B-28
Foreign branches of national banks, by region and country, December 31, 1979
Region and country
Central America .
El Salvador
Guatemala . . .
Honduras
Mexico
Nicaragua
Panama

Number
44

.

2
3
3
5
1
30

South America . .
Argentina
Bolivia
Brazil
Chile
Ecuador
Guyana
Paraguay
Peru
Uruguay
Venezuela

111
40
6
20
6
13
1
9
3
9
4

West Indies—Caribbean . .
Bahamas
Barbados
British Virgin Islands . . .
Cayman Islands
Dominican Republic
French West Indies
Haiti
Jamaica
Netherlands Antilles
St. Lucia
Trinidad and Tobago
West Indies Federation of States

163
61
3
2
56
18
2
5
5
4
1
5
1

Europe

123
1
6
3
35
9
18
16
4
8
4
1
6
1
3
2

Austria
Belgium
Denmark
England
France
Germany
Greece
Ireland
Italy
Luxembourg
Monaco
Netherlands
Northern Ireland
Scotland
Spain




Number

Region and country
Europe — Continued
Switzerland . .

6

Africa

20
5
1
2
2
4
1
1
1
1
2

Egypt
Gabon
Ivory Coast
Kenya
Liberia
Mauritius
Senegal
Seychelles
Sudan
Tunisia
Middle East .
Bahrain
Jordan
Lebanon
Oman
Qatar
Saudi Arabia
United Arab Emirates
Yemen Arab Republic .

. .

26
4
3
4
2
1
2
9
1

Asia and Pacific

125

Brunei
Hong Kong
India
Indonesia
Japan
Korea
Malaysia
Pakistan
Philippines
Singapore
Sri Lanka
Taiwan
Thailand

3
37
10
5
22
7
5
6
9
14
1
4
2

U.S. overseas areas and trust territories
Caroline Islands
Guam
Marianas Islands
Marshall Islands
Puerto Rico
Virgin Islands
Total

55
1
4
1
1
24
24
667

205

Table B-29
Total foreign branch* assets of national banks, year-end 1953-1979
(Dollar amounts in thousands)
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965

$1,682,919
1,556,326
1,116,003
1,301,883
1,342,616
1,405.020
1,543,985
1,628,510
1,780,926
2,008,478
2,678,717
3.319,879
7,241.068

1966
1967
1968
1969
I 1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

$ 9,364,278
11,856,316
16,021,617
28,217,139
38,877,627
50,550,727
54,720,405

83,304,441
99,810,999
111,514,147

134,790,497
161,768,609
180,712,782
217,611,974

* Includes military facilities operated abroad by national banks from 1966 through 1971.

Table B-30
Foreign branch assets and liabilities of national banks, December 31, 1979
(Dollar amounts in thousands)
ASSETS
LIABILITIES
Cash and cash items in process of collection . .
$ 884,611
Deposits of all banks in the United States and
Balances with all banks in the United States
non-U.S. branches of U.S. banks
and non-U.S. branches of U.S. banks
19,536,605
Deposits of non-U.S. banks outside the United States
Balances with non-U.S. banks outside the U.S
49,177,198
Other deposits
Securities
3,373,847
Liabilities for borrowed money
Loans, discounts and overdrafts
Liability on acceptances executed and outstanding .
Secured by real estate
$ 2,601,698
Accrued taxes and other expenses
To financial institutions
12,265,279
Due to other non-U.S. branches of this bank
To commerical and industrial borrowers
57,801,387
I Due to head office and its U.S.
To non-U.S. government and official institutions . . 14,319,345
branches of this bank
To all others
3,979,345
Due to consolidated subsidiaries of this bank
Less: unearned discount
256,587
Other liabilities
Total loans, net
90,710,467
Total liabilities
Customers' liability on acceptances outstanding . . . .
4,260,955
Premises, furniture and fixtures
512,485
MEMORANDA
Accruals—interest earned, foreign
Standby letters of credit
exchange profits, etc
4,500,848
Commercial letters of credit issued and outstanding
Due from other non-U.S. branches of this bank
23,344,760
Guarantees and letters of indemnity
Due from head office and U.S. branches of this bank
13,913,865
Contracts to buy foreign exchange and bullion
Due from consolidated subsidiaries of this bank . . . .
6,106,117
Contracts to sell foreign exchange and bullion
Other assets
1,290,216
Total assets
$217,611,974




$26,603,209
60,094,569
78,111,322
4,540,254
4,452,195
3,736,679
23,499,272
12,566,492
2,318,712
1,689,270
$217,611,974
$ 5,543,116
5,346,708
2,525,927
92,404,855
90,558,102




APPENDIX C

Administrative Actions, 1979

Administrative Actions Index

1 2
X

Reserve for possible loan losses
Borrowed funds restrictions
Budget report
Capital Structure
Compliance committee
Credit/collateral documentation
Criticized assets
Delinquent loans
Directorate supervision/composition. . . .
Dividend restriction
Earnings
EDP management/operations
Equity capital infusion
X
Insider abuse
Insurance
Internal audit/control
Investment function
Lending function
Liquidity
Management
Ownership
OREO
Progress reports
Restitution
Rate-sensitive deposits
Trust function
12 USC 24
12 USC 29
12 USC 56
12 USC 60
12 USC 61
12 USC 62
12 USC 73
12 USC 74
12 USC 82
12 USC 84
12 USC 161
12 USC 282
12 USC 371
12 USC 375
12CFR 1
12CFR 7.3025
12CFR 7.4020
12CFR 7.4305
12 CFR 7.5217
12CFR 7.5225
12 CFR 7.7410
12 CFR 11.4
12 CFR 18
12 CFR 21
12 CFR 22
12 CFR 23
12 CFR 204
12 CFR 215
12 CFR 217
12 CFR 221
12 CFR 226
31 CFR 103.33

208


Notice of charges

Order to cease
and desist

(

Topics covered

UIVII money penalty

Nature of Action

q

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Totals

Memorandum
of understanding

Formal
agreement

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209




Administrative Actions, 1979
Civil Money Penalties
1. Bank with assets of $15 to $25 million

An Order of Assessment of a Civil Money Penalty
in the amount of $1,000 was issued against the
bank for committing 19 violations of 12 CFR
215.4(a) and two violations of 12 CFR 215.5(c)(3).
An Order of Assessment of a Civil Money Penalty
of $1,000 was also issued against the president for
causing the bank to commit 19 violations of 12
CFR 215.4 (a) and two violations of 12 USC
375a(4). The penalties were paid by the bank and
its president, and the violations of law were corrected.
2. Bank with assets of $15 to $25 million
An Order of Assessment of a Civil Money Penalty
of $7,000 was issued against the bank to increase
its reserve for possible loan losses to a level
deemed appropriate by the regional administrator.
The penalty was paid by the bank, and the reserve
was subsequently increased to an adequate level.

Cease and Desist Orders
3. Bank with assets of $250 to $500 million

An Order to Cease and Desist was issued requiring the bank to eliminate all demand deposit accounts maintained, directly or indirectly, for the
benefit of the controlling owners, their family members or any business entity in which either owner
maintained significant equity interest. The bank
was also prohibited from extending, endorsing,
guaranteeing or in any manner providing extensions of credit to or for the benefit of the same parties. The board of directors was to conduct a complete review of all demand deposit accounts
maintained at the bank by the new owners and to
seek restitution or otherwise recover any loss suffered by the bank due to the preferential treatment
afforded them.
4. Bank with assets of less than $15 million
An Order to Cease and Desist was issued requiring the board of directors to appoint a compliance
committee composed of at least three non-officer
directors to ensure the bank's ongoing compliance
with the provisions of the Order. The board was instructed to comprehensively assess management's strengths and weaknesses and to immediately provide the bank with an additional loan
officer. The board was further required to establish
an adequate capital structure by injecting at least




$500,000 of equity capital within 120 days of the
Order's effective date. The bank was to revise the
written loan policy and ensure adherence thereto.
Written programs were to be established and implemented to (1) remove all assets from criticized
status, specifically those made to insiders or their
related interests, (2) establish guidelines for internal loan review, (3) correct all violations cited in
the report of examination, (4) maintain a liquidity
level of not less than 20 percent and (5) correct
deficiencies relating to credit documentation.
5. Bank with assets less than $15 million
An Order to Cease and Desist was issued requiring the board of directors to appoint a compliance
committee composed of at least three non-officer
directors to ensure the bank's ongoing compliance
with the provisions of the Order. The board was instructed to comprehensively assess management's strengths and weaknesses and to immediately provide the bank with an additional loan
officer. The board was further required to establish
an adequate capital structure by injecting at least
$500,000 of equity capital within 120 days of the
Order's effective date. The bank was to revise the
written loan policy and ensure adherence thereto.
Written programs were to be established and implemented to (1) remove all assets from criticized
status, specifically those made to insiders or their
related interests, (2) establish guidelines for internal loan review, (3) correct all violations cited in
the report of examination, (4) maintain a liquidity
level of not less than 20 percent and (5) correct
deficiencies relating to credit documentation.
6. Bank with assets of $15 to $25 million
An Order to Cease and Desist was issued requiring the bank to immediately correct all violations
cited in the report of examination. A compliance
committee composed of at least three outside directors was to be organized with the responsibility
of conducting a review of the bank's operations
and of submitting written reports to the regional
administrator. The board of directors was ordered
to develop plans to secure reimbursement of all interest or fees which would have been paid to the
bank had all extensions of credit to insiders been
made on non-preferential terms. The board was
also to review thoroughly the bank's management
needs, with a copy of their findings to be forwarded to the regional administrator. An analysis
of the bank's earning capacity and capital needs
was also required, with a provision for an equity
211

capital injection if considered necessary by the regional administrator. Written plans were required
to (1) achieve and maintain an average daily liquidity of not less that 20 percent, with bi-weekly liquidity analysis reports to be submitted to the regional administrator, (2) eliminate all assets from
criticized status, (3) establish lending policies of a
safe and sound nature, (4) obtain current and satisfactory credit information, (5) perfect collateral on
secured loans, (6) ensure the ongoing adequacy
of the reserve for possible loan and (7) monitor delinquent loans. The bank was ordered to cease
making unreasonable expense reimbursements to
employees or former employees. Internal control
deficiencies were to be immediately corrected.
7. Bank with assets of $50 to $100 million
A Temporary Order to Cease and Desist was initially served upon the bank. Subsequently an Order to Cease and Desist required the bank's directors, officers, employees and agents, individually,
to correct all violations of law and required procedures to be adopted to prevent future violations.
The board of directors was ordered to immediately
reimburse the bank for a political contribution
made in violation of 2 USC 44lb. The board was instructed to retain an independent special counsel
acceptable to the regional administrator to conduct a written review of the total remuneration
package for the top five officers of the bank and
was to submit the review to the regional administrator. The bank was also ordered to cease paying
for certain expenses of the bank's top five officers
and was prohibited from paying any overdraft on
any account of an executive officer or director of
the bank unless a prearranged interest-bearing
line of credit had been established by the involved
officer or director. Written programs were to be developed and implemented to (1) eliminate all assets from criticized status, (2) review and increase
reserve for possible loan, (3) rectify all credit information exceptions and collateral deficiencies, and
(4) improve the internal control and audit procedures. The board was to review and amend the
bank's lending policies to ensure that they conform
with safe and sound banking practices and all applicable laws, rules and regulations.
8. Bank with assets of $25 to $50 million
A Temporary Order to Cease and Desist was issued requiring a capital injection of $3.75 million, a
new chief executive officer and limiting new loans
until capital was increased. A Permanent Order to
Cease and Desist was placed on the bank shortly
thereafter. The Permanent Order incorporated the
provisions of the Temporary Order already in
place, and an Order to Cease and Desist required
the bank to develop and implement a written capital plan to maintain ongoing capital adequacy and
a detailed budget. The Order also called for maintenance of the reserve for possible loan at an adequate level and for liquidity to be maintained at no
less than 15 percent. A certified public accounting

212


firm was to conduct a full-scale audit, and a special directors' committee was to be appointed to
review management fees, salaries and expenses.
An independent counsel was required to evaluate
the board's liability for violations of 12 USC 84. The
bank's lending policy was to be revised to cover
officers' lending limits and concentrations of credit.
Detailed plans to remove all assets from criticized
status, correct all violations of 12 USC 84, remedy
and prevent credit documentation and collateral
deficiencies and coordinate the management of
assets and liabilities were to be submitted for the
approval of the regional administrator and subsequently implemented. A new loan administration
officer was required, and all violations of law noted
in the examination report were to be corrected.
9. Bank with assets of less than $15 million

A Order to Cease and Desist required correction
of all violations of law and required procedures to
be adopted to prevent future violations. The bank
was ordered to submit a written proposal for its
sale or merger to the regional administrator. In addition the board was ordered to provide the bank
with a new chief executive officer. The board was
also required to provide the bank with a $450,000
subordinated placement and to submit a written
program to inject $500,000 in equity capital. The
declaration and payment of dividends was restricted.
10. Bank with assets of $15 to $25 million
An Order to Cease and Desist required that all violations cited be corrected immediately. Additionally, the board of directors was required to indemnify the bank for any loss caused by the violation
of 12 USC 24. The board was instructed to formulate a policy governing all types of transactions to
insiders and their interests. The board was further
ordered to cause the bank's equity capital accounts to be increased by not less than $500,000.
Written programs were required to (1) remove all
assets from criticized status, (2) provide for improved collection efforts, (3) obtain current and
satisfactory credit information on all loans so lacking, (4) maintain an adequate reserve for possible
loan, (5) improve and sustain the bank's earnings
and (6) improve the bank's written investment policy. The bank was further required to develop
comprehensive liquidity and asset/liability management policies. An internal auditor was to be appointed, and the board agreed to develop a management plan describing in detail the duties and
functions of senior officers.
11. Bank with assets of $25 to $50 million
A Cease and Desist Order required that all violations of the law immediately be corrected and that
the board of directors develop plans to recover
any loss of income resulting from loans made in violation of statutes mentioned in the examiner's report. The bank was prohibited from making advances on insurance premiums written through

named agencies unless (1) within legal lending
limitations, (2) interest was charged at a nonpreferential rate and (3) insurance was authorized by
the bank's customer. The bank was instructed to
hold no checks presented for payment longer than
24 hours. Written programs were required to (1) reduce land development loans to 25 percent of
gross capital funds, (2) eliminate all assets from
criticized status, (3) resolve deficiencies in loan
documentation, (4) obtain current and satisfactory
credit information, (5) establish and maintain an
adequate reserve for possible loan and (6) correct
deficiencies in internal control procedures. The
employee profit sharing trust was ordered to be
transferred to an independent corporate trustee.
The bank was ordered to employ or appoint a new,
capable senior lending officer and a capable external auditor, both of whom had to be approved
by the regional administrator. Signing of real estate
appraisals without actual on-site inspection was
prohibited.
12. Bank with assets of $50 to $100 million
A Notice of Charges initiated administrative action,
and a Temporary Order to Cease and Desist was
issued. The bank was prohibited from lending
money to any borrower whose loan was subject to
criticism in the report of examination. The bank
was ordered to refrain from granting loans without
first acquiring current and satisfactory credit information. The volume of total loans outstanding was
not to increase over the level of such loans existing
as of the effective date of the Order. Additionally,
no loans were to be made in excess of the legal
limit provided in 12 USC 84.
13. Bank with assets of $250 to $500 million
A Notice of Charges initiated administrative action,
and a Temporary Order to Cease and Desist was
issued prohibiting any payments, loans or transfers of any monies between the bank and its parent holding company. The bank was also prevented from declaring or paying any dividend
without the prior written approval of the regional
administrator. Subsequent to the issuance of the
Order, the board of directors accepted an offer
from a group of investors to purchase $7.5 million
in bank stock, giving the group control of more
than 51 percent of the voting shares in the bank.
14. Bank with assets of $25 to $50 million
A Notice of Charges initiated administrative action,
and a Temporary Order to Cease and Desist prohibited the bank from increasing the volume of its
total loans outstanding. The bank subsequently
merged with a state-chartered bank, terminating
the administrative proceedings.
15. Bank with assets of $15 to $25 million
A Notice of Charges initiated administrative action,
and a Temporary Order to Cease and Desist was
issued prohibiting the bank from making payments
against uncollected deposits in accounts maintained by subject director or in any entity in which



said director maintained an interest. The bank was
ordered not to make any loan or extension of credit
in any manner to any insider unless the loan was
made on substantially the same terms as those
prevailing at the time for comparable transactions
with other persons. The bank was required to immediately correct the violation of 12 USC 84. Subsequently, the director resigned from the board of
directors.
16. Bank with assets of $15 to $25 million
A Notice of Charges initiated administrative action,
and a Temporary Order to Cease and Desist limited the amount of compensation paid to directors.
The bank was ordered to correct all violations
cited in the report of examination. The bank was
prohibited from lending additional money or otherwise extending credit to any borrower whose loan
or other extension of credit had been criticized in
the report of examination. The bank was also ordered not to grant any extension of credit which
was not fully supported by current and satisfactory
credit information and collateral documentation.

Notice of Charges
17. Bank with assets of $15 to $25 million

A Notice of Charges was issued against the bank
citing the violations of law and regulations and addressing the serious inadequacy in the bank's
capital structure. Subsequently, the bank did initiate steps to improve its capital position; however,
during the pendency of the administrative proceeding, the bank converted to a state charter.

Formal Agreement
18. Bank with assets of $15 to $25 million

A Formal Agreement required correction of all violations of law and required procedures to be
adopted to prevent their recurrence. The bank was
required to adopt and implement written programs
to (1) eliminate all assets from criticized status, (2)
achieve and maintain an average daily liquidity position of not less than 15 percent and (3) improve
collection efforts. The bank was directed to take all
necessary steps to obtain current and satisfactory
credit information on all loans and to refrain from
granting any new loans unless supported by such
information. The bank was required to correct collateral imperfection and to submit a detailed written capital plan to the regional administrator for his
approval and not declare any dividend without the
regional administrator's prior written approval. The
bank was directed to .review the reserve for possible loan on a quarterly basis and maintain it at a
level reflective of the risk and potential for loss inherent in the bank's loan portfolio. The deficiencies
in the bank's internal control and audit procedures
were required to be corrected. The board of directors was required to establish a committee to perform an in-depth study of current management
and to formulate and implement a comprehensive
213

written management plan. Detailed written policies
covering the investments and funds management
practices of the bank were also required pursuant
to the Agreement. The board was directed to appoint a compliance committee, a majority of whom
were outside directors.
19. Bank with assets of less than $15 million
A Formal Agreement required correction of all violations of law and the implementation of procedures to prevent future violations. The board of directors was required to provide the bank with a
new, active and capable chief executive officer acceptable to the regional administrator. The authority of the new chief executive officer was to be set
forth in writing by the board. The board also was
directed to retain, subject to the regional
administrator's approval, the services of an experienced agricultural credit consultant to assist the
bank in eliminating existing agricultural loans from
criticized status and implementing a program to
ensure that future loans were granted on a sound
basis. The board was required to adopt and implement a written program to promptly eliminate the
grounds of criticism of its classified assets and to
take all necessary steps to obtain current and satisfactory credit information on all loans and to refrain from granting any new loans until satisfactory
credit information had been obtained. The bank
was required to submit monthly written reports to
the regional administrator detailing the actions
taken by the bank to comply with the provisions of
the Agreement and the results of those actions.
20. Bank with assets of $15 to $25 million
A Formal Agreement required correction of all violations of law and required procedures to be implemented to prevent future violations. The bank
was directed to implement written programs to (1)
establish and maintain an adequate reserve for
possible loan, (2) eliminate all assets from criticized status and (3) improve collection efforts
overall. The Agreement further required that the
board of directors review the bank's lending function and report to the regional administrator the duties of each employee participating in the lending
function. The board was also required to develop
and submit to the regional administrator written
guidelines governing liquidity and asset/liability
management. A comprehensive budget for the fiscal year was also required. The bank was directed
to obtain current and satisfactory information on all
loans so lacking and was to refrain from granting
any new loans until said information had been ascertained. The Agreement required the bank to establish a committee of outside directors to ensure
compliance.
21. Bank with assets of $100 to $250 million
A Formal Agreement required correction of violations of law and implementation of procedures to
ensure that violations did not recur. The bank was
directed to formulate and implement written pro
214


grams with the approval of the regional administrator, to strengthen the capital structure, to improve
the liquidity position and to eliminate any assets
from criticized status. The Agreement required the
board to evaluate the adequacy and competency
of the bank's management and required the board
to submit a comprehensive written report to the regional administrator detailing its findings. The
Agreement further directed the bank to immediately correct the deficiencies in its internal control
and audit procedures.
22. Bank with assets of $15 to $25 million
A Formal Agreement required correction of all violations of law and implementation of written procedures to ensure that violations did not recur. The
board was directed to formulate and implement
written programs to improve the capital structure
and to eliminate all assets from criticized status.
The bank was required to correct the deficiencies
relating to current and satisfactory credit information. An independent auditor was to be retained to
prepare written recommendations for the establishment and maintenance of internal controls and
internal auditing procedures. The board was directed to make no further loans or extensions of
credit to any executive officer or principal shareholder. The board was required to review the adequacy of the reserve for possible loan and maintain it at a level acceptable to the regional
administrator. The board was also required to evaluate the adequacy and competency of the bank's
management and to submit a comprehensive written report to the regional administrator detailing its
conclusions and setting forth the bases for those
conclusions.
23. Bank with assets of $100 to $250 million
Pursuant to a Formal Agreement, the bank was required to correct and eliminate each violation of
law cited. Deficiencies in internal controls were to
be corrected immediately. The board of directors
was required to formulate written programs to (1)
establish and maintain an adequate reserve for
possible loan, (2) restore and maintain earnings of
the bank, (3) augment and strengthen the capital
structure of the bank, (4) eliminate all assets from
criticized status, (5) adopt safe and sound loan
policies to be strictly adhered to and (6) cover
other real estate owned in accordance with prudent banking procedures. A compliance committee to be made up of non-officer directors was also
mandated.
24. Bank with assets of $50 to $100 million
A Formal Agreement required correction of all violations of law and required the bank to adopt written procedures to prevent recurrence of similar violations. The board of directors was required to
develop and implement a written program to eliminate all assets from criticized status. The board
was required to draft a plan for injecting sufficient
equity capital to satisfy the bank's needs, and the

bank was prohibited from paying dividends without prior written approval of the regional administrator. The board was also required to develop and
implement a detailed written loan policy of a safe
and sound nature. The bank was required to obtain current and satisfactory credit information on
all loans so lacking and was prohibited from granting any new loans without first obtaining such information. The board was to review the bank's reserve for possible loan on a regular basis and to
ensure that the reserve be maintained at a level reflective of the risk and potential for loss inherent in
the bank's loan portfolio. The board was to immediately and substantially increase the amount of
the reserve. The board was required to undertake
a comprehensive assessment of the sufficiency
and quality of the management of the lending
function and to submit its findings to the regional
administrator. Compliance with the provisions of
the Agreement was to be monitored by an executive committee to be appointed by the board of directors.
25. Bank with assets of $25 to $50 million
A Formal Agreement required correction of all violations of law and required written procedures to
be adopted to ensure that similar violations did not
recur. The board of directors was to formulate a
written program to remove all assets from criticized status. The board was also to pursue all
available courses of action to eliminate the
grounds for criticism or cause complete liquidation
from the bank's books of all criticized loans to directors. The board was to provide the bank with a
new, experienced and capable senior loan officer
who was to have broad written authority over the
administration of the bank's lending function. After
the designation of the new senior loan officer, the
bank was to revise its written loan policy. Written
programs were to be developed and implemented
to (1) improve collection efforts and to effect a reduction in the level of delinquent loans, (2) maintain an adequate reserve for possible loan and (3)
establish appropriate audit procedures to ensure
timely identification of problem assets. The bank
was required to take all necessary steps to obtain
current and satisfactory credit information on all
loans lacking such information and was to correct
the imperfections pertaining to the securing of collateral. In light of pending litigation against the
bank, the board was to develop a contingency
plan designed to assur maintenance of the
bank's capital structure at an adequate level. An
enforcement committee comprised of three nonofficer directors was to be appointed by the board
to ensure compliance by the bank with the provisions of the Agreement.
26. Bank with assets of $50 to $100 million
A Formal Agreement required correction of the
statutory violations and required procedures to be
adopted to ensure that these violations did not recur. The bank was required to institute a program
for improving its liquidity position and to reduce



the ratio of the bank's loans to deposits. The
Agreement further provided that the bank reduce
its dependency on borrowed funds of all types.
The bank was to draft both an investment and a
loan policy to be submitted to the regional administrator for review and comment prior to adoption.
The bank was also to formulate and implement a
written program designed to eliminate all assets
from criticized status. The bank was to take all
necessary steps to obtain current and satisfactory
credit information on all loans so lacking and to refrain from granting any new loans without first obtaining such information. The board of directors
was to formulate and submit to the regional administrator the bank's plan for liquidation of a substantial amount of the bank's other real estate owned.
27. Bank with assets of $25 to $50 million
A Formal Agreement required correction of all violations of law and required procedures to be
adopted to prevent their recurrence. The bank was
to employ an outside, capable senior lending officer who was to be vested with broad authority to
ensure that the lending area of the bank was operated in accordance with prudent banking standards. The board of directors was to adopt and
implement a written program to eliminate the basis
of criticism of its criticized assets and was not to
lend additional money or otherwise extend credit
to any borrower whose loan or other extension of
credit had been criticized. The board was required
to conduct a review of the adequacy of the bank's
reserve for possible loan in relation to the risk inherent in the bank's loan portfolio. The bank was to
take all necessary steps to correct the deficiencies
relating to the lack of current and satisfactory
credit information and was to adopt a written program to improve collection efforts. The bank was
prohibited in any manner from extending credit to
the bank's parent holding company, and no dividends were to be declared by the board without
the prior written approval of the regional administrator. Policies were to be adopted to ensure that
any transactions between the bank and insiders,
were to be on terms not more favorable than those
afforded other persons dealing with the bank. The
board was to adopt formal written policies and
procedures for the administration of the trust department of the bank and was to take steps to ensure that the trust auditor and trust officer obtain
specific training in their respective functions as
soon as possible. The board was also to direct the
management of the trust department to establish a
complete and accurate fiduciary recordkeeping
system which would clearly reflect the interests of
the various fiduciary beneficiaries. The bank was
to submit every 30 days the actions taken by the
bank to comply with the provisions of the Agreement and the results of those actions.
28. Bank with assets of $15 to $25 million
A Formal Agreement required correction of all violations of law and required the bank * dopt pro215

cedures to ensure non-recurrence of similar violations. Subject to the regional administrator's
approval, the board of directors was required to
formulate and implement a written program to augment the bank's equity capital. The bank was required to submit to the regional administrator a
written program designed to improve and maintain
the bank's liquidity at an average of not less than
20 percent. The program was also to include provisions for reducing the volume of borrowed funds,
especially rate-sensitive federal funds. All criticized assets were to be eliminated and the board
was to review the adequacy of the bank's reserve
for possible loan and to augment the reserve accordingly. The bank was required to adopt procedures and develop forms for obtaining and recording all necessary credit information, and no future
loans were to be granted until said information had
been received and properly recorded. The bank
was prohibited from making any payments to the
controlling majority shareholder without prior written approval of the regional administrator. Furthermore, the board of directors was to review all travel and entertainment expenses incurred by, or for
the benefit of, said controlling majority shareholder. The board was to submit to the regional
administrator a written plan providing for the restitution of any travel and entertainment expenses
determined not to have been legitimate business
expenses of the bank. The board was also required to develop and implement a written program subject to the regional administrator's approval addressing the prompt elimination of all
internal control and audit deficiencies.
29. Bank with assets of $15 to $25 million

A Formal Agreement required correction of all violations of statutes and regulations and required the
adoption of procedures to prevent future violations. The board was to obtain a new chief executive officer and to submit a written capital program
to augment the equity capital needs of the bank.
The bank was further required to take immediate
action to protect its interests with regard to criticized assets and was to report on a monthly basis
the progress it made in removing assets from criticized status and for eliminating past due loans.
The board was not to extend credit in excess of
the lending limitations provided in 12 USC 84 and
to reduce to a conforming amount any extensions
of credit in excess of the 12 USC 84 lending limitation. The bank was to take necessary action to
seek restitution for any loss suffered by the bank
with respect to any preferential loans granted to its
directors and officers within the 24 months preceding the date of the Agreement. The bank also was
to adopt a written loan policy. The bank was to review its reserve for possible loan and agreed to
adopt a program to eliminate the internal control
and audit deficiencies cited in the report of examination. A comprehensive and detailed budget was
also to be developed.

216


30. Bank with assets of less than $15 million
A Formal Agreement required correction of all violations of law and the bank was further required to
notify the regional administrator of the manner of
said correction. Procedures were to be adopted to
prevent recurrences of similar violations. The
board of directors was to augment the bank's
management team by employing the services of a
new, experienced and capable senior lending officer. The name of such officer was required to be
submitted in advance to the regional administrator
who reserved the right to veto said officer's appointment. Furthermore, broad executive authority
was to be granted to the new senior lending officer
who was to implement and maintain lending practices in accordance with applicable law and the
provisions of the Agreement. The board was further required to appoint a compliance committee
composed of at least two outside directors to ensure compliance with the terms of the Agreement.
The board agreed to initiate procedures to ensure
that the bank's customers were charged fees for title opinions on real estate. Moreover, the board
was required to ensure that the bank's pro rata
share of any income derived from the sale of insurance in connection with any loan by the bank
would be handled within the framework provided
in 12 CFR 2. The bank was to substantially increase the reserve for possible loan and to formulate a plan to maintain the reserve at a level reflective of the risk and potential for loss inherent in the
bank's loan portfolio. Provisions to supply sufficient
equity capital were to be made. All deficiencies in
internal control and audit procedures were to be
corrected. A comprehensive and unqualified audit
by a certified public accounting firm was to be
conducted to review all insider transactions, the
adequacy of bank records and all control deficiencies. The board was required to draft new written
loan policies of a safe and sound nature. The bank
was to obtain and maintain current and satisfactory information on all loans lacking such information and was to refrain from granting any new
loans until said information was ascertained. The
bank was to adopt written programs to eliminate all
assets from criticized status and to improve its
overall collection efforts.
31. Bank with assets of $50 to $100 million
A Formal Agreement required correction of all statutory violations and adoption of measures to prevent their recurrence. The board of directors was
required to employ a new and capable president
and chief executive officer subject to approval by
the regional administrator. A compliance committee was to be appointed consisting of a majority of
outside directors. Said committee was required to
submit quarterly status reports of its review of the
bank's relocation expenses and loan policies to
the regional administrator. The bank was to establish written programs to (1) remove all assets from
criticized status, (2) evaluate lending officers and

the credit administration function, (3) amend loan
policies, (4) improve collection efforts, (5) provide
pertinent credit information and (6) control expenses and improve earnings. An infusion of $1
million in equity capital was required to improve
the bank's capital position. The bank was to employ an independent internal loan review officer to
aid in the improvement of the reserve for possible
loan. The adequacy of the reserve was to be reviewed quarterly by the board of directors with a
copy of its findings submitted to the regional administrator.
32. Bank with assets of $50 to $100 million
A Formal Agreement required correction of all violations of law and required procedures to be
adopted to prevent recurrence of similar violations.
The board of directors was to formulate and adopt
written programs designed to (1) augment and
strengthen the capital structure of the bank, (2) increase and maintain the bank's earnings and (3)
increase the bank's reserve for possible loan. The
bank was required to eliminate all assets from criticized status and further loans to borrowers with
criticized credits were prohibited. The bank was to
correct the deficiencies relating to lack of current
and satisfactory credit information and was prohibited from granting any new loans until such information had been acquired. The board was to employ the services of a qualified public accounting
firm, acceptable to the regional administrator and
experienced in electronic data processing operations, to assit the bank in establishing an adequate
internal audit program. A full-time independent auditor was also to be employed to establish and implement adequate internal audit and control procedures.
33. Bank with assets of less than $15 million
A Formal Agreement required correction of all violations of law. The board of directors was to provide the bank with a new, active and capable senior executive officer who was to be vested with
complete authority over the lending function of the
bank. Prior to the appointment of said individual,
his name and employment background together
with a description of his proposed duties and responsibilities was to be submitted to the regional
administrator who reserved the right to veto the
appointment. The board was to adopt and implement a written program to eliminate all assets from
criticized status. The bank was also prohibited
from loaning any additional money to any borrower
whose loan had been criticized. The bank was required to obtain current and satisfactory credit information on all loans so lacking and was to refrain
from granting any new loans until satisfactory
credit information had been ascertained. The
board was to undertake a thorough and complete
review of the bank's lending function and was to
submit the review to the regional administrator.
The bank was required to submit to the regional
administrator a written program for the establish


ment and the maintenance of an adequate reserve
for possible loan. The claims by the bank against
its bonding company were pursued toward an appropriate settlement. After arriving at a settlement
of said claims, the board was to promptly evaluate
the capital needs of the bank and to formulate a
written program to raise the equity capital of the
bank to an acceptable level. The bank was required to review the effectiveness of the bank's internal control program and was to retain the services of an outside independent auditing firm for the
purpose of reviewing and evaluating the bank's
accounting records, procedures and operations.
34. Bank with assets of $100 to $250 million
A Formal Agreement required correction of all violations of law and required procedures to be
adopted to prevent future violations. The board of
directors was required to formulate and implement
written programs to (1) eliminate all assets from
criticized status, (2) establish safe and sound loan
policies, (3) improve the bank's collection efforts,
(4) limit the bank's loan portfolio to no more than
70 percent of its deposits and (5) increase and
maintain the bank's average daily liquidity position
to not less than 15 percent. The bank was required
to take all necessary steps to obtain and maintain
current and satisfactory credit information on all
loans so lacking and was prohibited from granting
any new loans without first obtaining such information. The Agreement further provided that the
board was to review, and increase accordingly,
the bank's reserve for possible loan to ensure that
the reserve was maintained at a level reflective of
the risk and potential for loss inherent in the bank's
loan portfolio. To ensure the capital integrity of the
bank, the board was required to inject $3 million in
equity capital. The bank was also prohibited from
paying any dividends without prior written approval of the regional administrator. The board was
required to establish a capital committee to coordinate monitoring of, and planning for, the bank's
capital needs. The board was further required to
undertake a written study of the reasonableness
of, and justification for, the bank's business transaction involving insiders. The board was directed
to seek reimbursement of any income lost to the
bank on any transaction determined to be preferential. The Agreement prohibited certain transactions that may have been a conflict of interest for
any bank officer or employee. The board was to
appoint a compliance committee composed of at
least three individuals, two of whom were not to be
officers of the bank, to ensure compliance by the
bank with the provisions of the Agreement.
35. Bank with assets of $15 to $25 million
A Formal Agreement required the board to provide
the bank with a new chief executive officer, to be
approved by the regional administrator, whose authority was required to be set forth in writing. The
board was to submit a capital program within 180
days sufficient to meet the present and future
217

needs of the bank. The bank was required to correct the violations of 12 USC 84 and to implement
procedures to prevent recurrence. The bank was
further required to pursue the liability of each director for any losses resulting from loans the directors previously granted or consented to in violation
of 12 USC 84. The bank was required to comply
with 31 CFR 103.33 when making loans and to implement procedures to ensure compliance. The
bank was required to correct all other violations of
law and to implement procedures to prevent recurrence. The board was required to implement a
program within 60 days for the elimination of each
asset from criticized status. New written loan policies were required to be adopted by the board
within 60 days. The board was required to adopt a
written program to improve collection efforts. The
bank was required to secure current credit information and proper collateral on outstanding and
future loans and to limit the loan portfolio to no
more than 70 percent of total deposits. The bank
was requested to increase its reserve for possible
loan and to perform quarterly reviews thereof. The
bank was required to correct the deficiencies in its
internal control and audit procedures and to cover
all major areas of the bank with written policies, including a funds management policy. Finally, the
board was to appoint a compliance committee to
report to the regional administrator on the progress
in complying with the Agreement.

36. Bank with assets of less than $15 million

A Formal Agreement required correction of all violations of law and required procedures to be
adopted to prevent recurrence of similar violations.
The board was to perform a study of current management and to report its findings to the regional
administrator. The bank was required to develop a
written program for elimination of all assets from
criticized status and was prohibited from extending credit to any borrower whose loans or other extensions of credit had been criticized in whole or in
part. The bank was to establish detailed procedures for the recovery of previously charged-off
assets and for the collection of delinquent loans.
The bank was required to obtain and maintain current and satisfactory credit information on all loans
so lacking, and the board was to ensure that no future loans were to be granted to any borrower
without first obtaining such information. The board
was to submit a written equity capital plan to the
regional administrator for approval. The Agreement further required the board to develop, implement and submit to the regional administrator a
program to achieve a profitable level of bank operations. A component of said program was to include a comprehensive and detailed budget for
the fiscal year. The board was also to review the
bank's reserve for possible loan to ensure that the
reserve was maintained at a level reflective of the
risk and potential for loss inherent in the bank's
loan portfolio.

218


37. Bank with assets of less than $15 million
A Formal Agreement required the board of directors to immediately increase equity capital by at
least $300,000. The board was also to develop
and implement a plan to increase the bank's income and reduce the bank's expense with a goal
of establishing profitable operations. The board
was required to adopt and implement a written
program to eliminate all assets from criticized
status. The board was required to pursue all available courses of action to eliminate the grounds for
criticism or cause removal from the bank's books
of all criticized loans to insiders. The bank was to
obtain current and satisfactory credit information
on all loans so lacking and was to refrain from
granting any new loans without first obtaining and
analyzing the financial status of the prospective
borrower. The bank was prohibited from maintaining or accepting any deposit of public funds on an
unsecured basis if such deposit was required to
be secured by contract or by law. The bank was to
correct the imperfections pertaining to the securing of collateral and was prohibited from granting
any future secured loans involving collateral without first perfecting its security interest. Reviews
were to be conducted of all loans exceeding
$5,000 to ascertain credit quality. The board was
required to promptly investigate the extent to
which overcharges on loans may have occurred
and.to reimburse any overcharge to affected customers. A written study detailing all deficiencies in
the bank's accounting and administrative controls
was to be undertaken and all deficiencies were to
be resolved to the satisfaction of the regional administrator. The board was to designate a compliance committee composed of three outside directors to ensure the ongoing compliance of the bank
with the provisions of the Agreement.
38. Bank with assets of less than $15 million
A Formal Agreement required correction of all violations of law and the adoption of procedures to
ensure that violations did not recur. The board was
to prepare an analysis of the bank's present and
future capital needs and to formulate and implement a written program, subject to the regional
administrator's approval, designed to ensure the
capital adequacy of the bank. The bank was to formulate and implement a liquidity program by
which the bank would achieve and maintain an average daily liquidity position of not less than 15
percent. Said program was to include, but was not
limited to, plans for reducing reliance on ratesensitive deposits and plans for reducing the level
of loans to 75 percent of deposits. A liquidity analysis report and a market-rate funds report were to
be submitted to the regional administrator on a
weekly basis. The bank was required to adopt and
implement written programs designed to (1) eliminate all assets from criticized status, (2) improve
collection efforts and to effect a reduction in the
level of delinquent loans and (3) increase and
maintain the reserve for possible loan at a level

deemed appropriate by the regional administrator.
The bank was to take all necessary steps to obtain
current and satisfactory credit information on all
loans so lacking and was to submit to the regional
administrator a written summation of the procedures adopted to obtain and record all necessary
credit information. The bank was also required to
amend its written investment policy in accordance
with prudent banking standards.
39. Bank with assets of $50 to $100 million
A Formal Agreement required correction of all violations of law and adoption of procedures to ensure against future violations. The board was to
provide the bank with a new, active and capable
senior executive officer who was to be vested with
complete authority over the lending functions of
the bank. Prior to the employment of said officer,
his/her name and background were to be submitted to the regional administrator for approval. The
board was required to prepare an analysis of the
bank's present and future capital needs and to formulate a written program designed to augment
and strengthen the capital structure of the bank.
The program was to include an injection of additional equity capital into the bank in an amount acceptable to the regional administrator. The board
was prohibited from declaring or paying any dividends without prior written approval by the regional administrator. The board was required to
develop and implement a written program to eliminate all assets from criticized status and to
achieve and maintain an average daily liquidity position of not less than 15 percent. Formal procedures and policies were to be adopted by the
bank to ensure the ongoing adequacy of the reserve for possible loan and also to ensure that all
concentrations of credit were properly identified
and duly monitored. A compliance committee
comprised of at least three non-officer directors of
the bank was to be formed to ensure compliance
with the provisions of each article of the agreement.
40. Bank with assets of $15 to $25 million
A Formal Agreement required the bank to immediately correct all violations cited in the report of examination. Written programs were required to (1)
remove all assets from a criticized status, (2) obtain current and satisfactory credit information, (3)
correct criticisms pertaining to the securing of collateral and (4) review and improve the adequacy
of the reserve for possible loan. The board of directors was to augment the bank's equity capital
by $500,000 and to initiate action designed to improve and sustain the bank's earnings. The bank
was prohibited from declaring or paying dividends
without the prior written approval of the regional
administrator.
41. Bank with assets of less than $15 million.
A Formal Agreement required the board of directors to immediately correct all violations of law,



rules and regulations. The board was also required
to initiate a detailed review of the effectiveness of
the bank's chief executive officer and other staff
members. The bank was required to formulate a
comprehensive written loan policy. The board was
to adopt written programs to (1) eliminate all assets from criticized status, (2) obtain current and
satisfactory credit information on all loans, (3) correct deficiencies pertaining to the securing of collateral, (4) establish and maintain an adequate reserve for possible loan, (5) improve overall
collection efforts and (6) provide additional equity
capital. The board was also required to appoint a
committee comprised solely of outside directors to
ensure compliance with the terms of the Agreement.
42. Bank with assets of $25 to $50 million
A Formal Agreement required the bank to correct
immediately all violations of law, rules and regulations, as well as to appoint a consumer compliance officer. The board was to review the management needs of the bank and to provide the bank
with a capable senior lending officer. The board
also agreed to formulate and implement written
programs to (1) raise the capital of the bank to an
acceptable level, (2) eliminate all assets from criticized status, (3) obtain current and satisfactory
credit information and collateral documentation,
(4) achieve and maintain an average daily liquidity
position of not less than 15 percent without reliance on borrowed funds, with a bi-weekly analysis
report submitted to the regional administrator, (5)
improve collection procedures and reduce the
level of past-due loans, (6) achieve and maintain
an adequate reserve for possible loan, (7) restore
and maintain earnings of the bank and (8) adopt a
safe and sound investment policy. The board was
further required to perform a comprehensive review and to amend the bank's written lending policy.
43. Bank with assets of $25 to $50 million
A Formal Agreement required the board to provide
the bank with a new chief executive officer and to
correct all violations of law, rules and regulations.
The board was required to analyze the bank's capital needs and establish a written program to augment and strengthen the overall capital structure.
Other written programs were to be implemented to
(1) eliminate all assets from criticized status, (2)
obtain current and satisfactory credit information
and collateral documentation, (3) ensure an adequate reserve for possible loan, (4) improve liquidity/funds management and (5) review and revise
written loan policies.
44. Bank with assets of less than $15 million
A Formal Agreement required the board to remedy
all violations of law and to establish a compliance
committee composed of at least three outside directors to ensure compliance with the terms of the
'Agreement. The board was required to establish
219

and implement written programs to (1) adopt a
sound loan policy, (2) remove all assets from classified status, (3) obtain current and satisfactory
credit information, (4) correct imperfections pertaining to the securing of collateral, (5) remove all
criticized loans to insiders, (6) establish a formal
internal loan review system, (7) ensure that reserve
for possible loan is maintained at a level commensurate with prudent banking practice, (8) ensure
compliance with applicable consumer laws, rulings and regulations, (9) adopt a sound investment
policy and (10) analyze and fulfill future capital
needs. The board was to submit to the regional
administrator a written liquidity policy designed to
achieve and maintain a liquidity position of at least
20 percent to be computed weekly on an average
daily basis and in no event to fall below 15 percent
on any given day.
45. Bank with assets of $25 to $50 million
A Formal Agreement required the bank to correct
all existing violations of law and ensure that future
violations would be prevented. The bank was further required to review and amend its written loan
policy and to specifically incorporate provisions of
12 USC 375a and 12 CFR 215 (Regulation 0) in
said policy. A new, active and capable senior officer was required to be appointed by the bank. The
board of directors was to establish and implement
written programs to (1) improve and maintain the
capital structure, (2) achieve and maintain an average daily liquidity position of not less than 15 percent without reliance on short-term non-deposit liabilities, with a bi-weekly analysis report to be
submitted to the regional administrator, (3) amend
the bank's written investment policy to establish
guidelines of a safe and sound nature, (4) eliminate all assets from criticized status, (5) review the
bank's entire management structure and (6) restore the reserve for possible loan to an adequate
level.
46. Bank with assets of $15 to $25 million
A Formal Agreement required the Board of Directors to establish an executive loan committee consisting of at least four outside directors, with the responsibility of implementing and ensuring
compliance with the following written programs: (1)
to eliminate all assets from criticized status, (2) to
correct procedural imperfections relating to securing proper collateral, (3) to obtain current and satisfactory credit information, (4) to review and modify current loan policies and (5) to strengthen the
quality of the lending staff, including the appointment of a new senior lending officer. A comprehensive review was called for to improve the capital structure and increase equity capital by at least
$600,000. The bank was required to augment the
reserve for possible loan by $175,000. A program
whereby the bank would achieve an average daily
liquidity position of at least 20 percent exclusive of
short-term non-deposit liabilities was required, with
weekly reports including the bank's statement of
220



condition to be submitted to the regional administrator.
47. Bank with assets of $25 to $50 million
A Formal Agreement was entered into with the
bank which required the correction of all violations
of law, rules and regulations and prohibited any
further advances in excess of the lending limitations of 12 USC 84. The bank was required to appoint a compliance committee, including at least
three non-officer directors, to evaluate the bank's
progress. The bank was required to employ a new
chief executive officer, to evaluate current
management's quality and depth and to implement
a plan to strengthen management. The bank was
required to take all actions necessary to eliminate
criticized assets and was prohibited from extending further credit to criticized borrowers. A written
program to improve collection efforts and reduce
delinquent loans and a new comprehensive written
loan policy were required. Periodic reviews of the
reserve for possible loan, a comprehensive liquidity policy and a full independent audit by an outside certified public accounting firm were also required. Finally, the bank was required to develop a
formal written budget for the next calendar year.
48. Bank with assets of $25 to $50 million
A Formal Agreement required correction of all statutory violations, and procedures were to be
adopted to prevent their recurrence. The board of
directors was to provide the bank with both an active and capable chief executive officer who was
to be experienced in bank operations, lending and
investment and an active and capable senior lending officer to manage and supervise the loans.
Prior to the appointment of said individuals, proposed names were to be submitted to the regional
administrator for approval. The board also was to
ensure a $600,000 injection of equity capital. A detailed written capital plan was to be submitted to
the regional administrator for his review and approval. The bank was prohibited from paying any
dividend without the prior written approval of the
regional administrator. The bank was to adopt and
implement written programs to eliminate all assets
from criticized status and to improve the bank's
collection efforts. The board was also to review
and, as necessary, amend its written investment,
lending and funds management policies and procedures in accordance with prudent banking standards. All necessary steps were to be taken to obtain and maintain current and satisfactory credit
information on all loans so lacking, and no new
loans were to be granted until such information
had been obtained. The bank was to institute programs to limit the bank's loan portfolio to no more
than 70 percent of total deposits and maintain an
average liquidity of not less than 15 percent. Reserve for possible loan was to be reviewed on a
quarterly basis, and the bank was required to immediately increase the reserve to a level reflective
of the risk and potential for loss inherent in the

bank's loan portfolio. All deficiencies with respect
to its internal control and audit procedures were to
be corrected. The board was to undertake a written study of all recent insider transactions to determine the existence and extent of any preferential
treatment afforded to insiders. The board was to
seek reimbursement of any income lost to the bank
caused by any preferential transaction. The bank
was prohibited from paying any fee to a director
for any meeting which a director did not attend
and was not to pay any fees or compensation to
any of its directors in excess of $200 a month. The
board was to appoint a compliance committee,
composed of at least three directors, to ensure the
bank's compliance with the provisions of the
Agreement.
49. Bank with assets of $25 to $50 million
A Formal Agreement required the board of directors to correct all violations of 12 USC 84 cited.
The bank was to adopt and adhere to a written investment policy. Other written programs required
(1) improving the bank's liquidity position and establishing sound asset and liability management
procedures, (2) revising the bank's loan policy
commensurate with prudent banking practices, (3)
recovering delinquent loans, (4) obtaining current
and satisfactory credit information on all loans so
lacking, (5) strengthening those assets in criticized
status, (6) comprehensively evaluating the bank's
present and future management needs and (7) improving the bank's profitability. The bank was required to immediately increase its reserve for possible loan. The board was required to adopt a
written code of ethics, specifically addressing
loans to insiders and their interests. Dividends
were restricted subject to prior written approval by
the regional administrator.
50. Bank with assets of $25 to $50 million
A Formal Agreement required immediate correction of violations of law and procedures to prevent
future violations. The bank was to adopt and implement written programs to (1) eliminate all criticized assets, (2) improve collection efforts and to
effect a reduction in the level of delinquent loans
and (3) increase the reserve for possible loan. The
bank was to take all necessary steps to obtain and
maintain current and satisfactory credit information
on all loans lacking such information and to correct
the imperfections pertaining to the securing of collateral. The board of directors was to review and
amend the bank's written loan policy so as to enable the bank to perform its lending function in a
safe and sound manner. The board was required
to correct all internal control and audit deficiencies
and was to engage the services of an independent
certified public accounting firm to render an unqualified opinion on the financial statements of the
bank and to recommend systems and procedural
changes necessary to establish proper internal
controls and sound and efficient operations. The
board was required to submit a written capital pro


gram to the regional administrator which provided,
among other things, for a minimum $1.2 million equity capital injection. The bank was prohibited from
paying any dividends without the prior written approval of the regional administrator. The board of
directors was to establish a compliance committee
of at least three board members, a majority of
whom where to be non-officer directors, for conducting an in-depth study of current management
adequacy and competency. After the study had
been completed, the committee was to report its
findings to the regional administrator. The compliance committee was also to be responsible for
ensuring the bank's adherence to the provisions of
the Agreement and was to submit to the regional
administrator every 60 days those actions taken to
comply with each article in the Agreement and the
results of those actions.
51. Bank with assets of less than $15 million
A Formal Agreement required the bank to implement policies and procedures to reduce its volume
of criticized assets, delinquencies and credit file
and collateral documentation deficiencies. The reserve for possible loan was required to be reviewed quarterly and maintained at an adequate
level. Extensions of credit to borrowers whose
loans had been criticized were limited. Policies
concerning loans to insiders were to be reviewed
and revised to insure that such transactions were
at least as favorable to the bank as loans to the
general public. To improve earnings, the bank
agreed to develop a detailed budget, analyze pricing of bank services and its costs of funds and implement specific plans to control operating expenses. A liquidity position of no less than 15
percent was to be maintained, and weekly liquidity
calculations were to be submitted to the regional
administrator. The board was required to formulate
and implement a program designed to strengthen
and augment the bank's capital structure. The
bank was required to employ a qualified certified
public accountant to conduct a full scope directors' examination and assist in developing adequate internal controls. Dividends were restricted,
and the bank was required to immediately correct
all violations of law noted in the report of examination.
52. Bank with assets of less than $15 million
A Formal Agreement required that the bank not
lend money or otherwise extend credit to any borrower beyond the lending limitations imposed by
12 USC 84. The Agreement further required that all
violations of law be corrected and that procedures
be adopted to prevent future violations. The board
was required to undertake an assessment of active
management and was to provide the bank with a
new, active and capable senior lending officer who
was to have broad authority over the lending function of the bank. Written programs to eliminate all
classified assets, improve collection efforts and
eliminate all internal control and audit deficiencies
221

were to be adopted and implemented. The board
was to review the existing loan policies of the bank
and was to draft, adopt and adhere to written loan
policies of a safe and sound nature. Credit information exceptions were to be eliminated, and the
bank was to refrain from granting any new loans
without first obtaining current and satisfactory
credit information. A review of the reserve for possible loan was to be conducted on a quarterly
basis to ensure that the reserve was maintained at
a level reflective of the risk and potential for loss
inherent in the bank's loan portfolio. The board
was to inject $200,000 in equity capital and was to
submit a written capital program to the regional
administrator for his approval. The board was also
required to initiate actions to improve and sustain
the bank's earnings. The bank was prohibited from
paying any dividends without prior written approval of the regional administrator. Written policies of a safe and sound nature regarding investment and funds management were to be drafted,
implemented and adhered to by the bank. The
board agreed to report every 60 days to the regional administrator all actions taken to comply
with the Agreement and the results of those
actions.
53. Bank with assets of $25 to $50 million
A Formal Agreement required the board of directors to initiate and subsequently complete all
action necessary to increase the bank's capital accounts by an amount deemed appropriate by the
regional administrator. The board was to fully adhere to and enforce the terms of a deposit agreement to which the bank and the controlling owner
of the bank were parties.
54. Bank with assets of less than $15 million
A Formal Agreement required the bank to evaluate
the capability and effectiveness of its chief executive officer, take steps to eliminate criticized assets, revise loan policy, eliminate violations of law,
eliminate collateral exceptions, implement a revised collection policy and reduce the level of
past-due loans. The board was also required to review the adequacy of the reserve for possible loan
on a quarterly basis and implement a funds management program to reduce the level and frequency of borrowings. The bank was required to
correct internal control deficiencies and to initiate
an external audit of the bank. The board was to
develop a capital plan to inject equity capital and
restrict its dividends unless prior approval of the
regional administrator was obtained. The board
was to implement a budget monitored on a quarterly basis and adopt realistic by-laws to fit the
needs of the bank.
55. Bank with assets of less than $15 million
A Formal Agreement required the bank to immediately correct all violations of law and regulation.
The board of directors was required to provide the
bank with a new, active and capable chief execu
222


tive officer, subject to the approval of the regional
administrator. The board was instructed to submit
to the regional administrator a written capital program, including plans for an equity capital increase of not less than $200,000. Other written
programs were required to (1) establish and maintain an adequate reserve for possible loan, (2) correct collateral exceptions, (3) obtain current and
satisfactory credit information, (4) remove all assets from criticized status and (5) review and improve the bank's overall lending policy. The board
was to develop and implement a written policy for
coordination and management of the bank's assets and liabilities.
56. Bank with assets of less than $15 million
A Formal Agreement required correction of all violations of law and required procedures to be
adopted to prevent future violations. The Agreement further provided for the board, as provided
by 12 USC 93, to indemnify the bank against any
losses resulting from loans or other extensions of
credit made in violation of 12 USC 84. The board
was required to develop and submit to the regional
administrator for approval a written capital program which was to provide for an increase of equity capital of not less than $500,000 and was to
prohibit the paying of any dividends except as
provided for in the approved capital program. The
bank was required to prepare and furnish to the
regional administrator a detailed budget for the fiscal year. The board was to take all necessary measures to improve the quality of its supervision of
active management and was to provide the bank
with a qualified full-time operations officer who was
to be vested with sufficient authority to perform his
functions in an acceptable manner. The bank was
to refrain from extending credit to any insider on
conditions or terms more favorable than those prevailing at the time for comparable transactions with
other persons. The board was also to remove all
criticized loans to insiders from the bank's books.
Written programs to eliminate all assets from criticized status, to improve collection efforts and to increase and maintain the bank's reserve for possible loan were to be developed and implemented
by the bank. The bank was to review and revise its
written loan policy to conform with prudent banking standards. All necessary steps were to be taken to obtain current and satisfactory credit information on all outstanding loans, and no new loans
were to be granted unless supported by such information. The board was to submit written reports
every 30 days outlining the actions taken by the
bank to comply with the provisions of the Agreement and the results of those actions.
57. Bank with assets of less than $15 million
A Formal Agreement restricted dividends and
placed limitations on compensation paid to the
bank's executive officers. The bank was required
to submit to the regional administrator for his review a written program to effectively manage the
nature and volume of the bank's assets and liabili-

ties, avoiding the need for excessive temporary
borrowings, and to reduce the level of reliance on
public fund deposits. The bank was required to review and amend its written loan policy. Procedures
and guidelines requiring a quarterly review of the
bank's reserve for possible loan were to be
adopted to ensure that the reserve was maintained
at an adequate level in view of the condition of the
bank's loan portfolio. The bank was required to
submit monthly reports to the regional administrator outlining actions taken to comply with terms of
the Agreement and results of those actions.
58. Bank with assets of $25 to $50 million
A Formal Agreement required correction of all violations of law and required adoption of procedures
to prevent future violations. Dividends were restricted and the board of directors was required to
employ the services of an independent auditor to
commence a complete audit of the bank, paying
particular attention to all forms of compensation
paid to the officers and directors of the bank. The
board was also required to retain the services of
an independent legal counsel acceptable to the
regional administrator to prepare a detailed written
plan to eliminate or reduce any excessive remuneration being paid by the bank and to seek reimbursement of the bank by all responsible parties
for any loss realized from any loans made in violation of 12 USC 84. The regional administrator retained power to veto or modify said plan in any
manner deemed appropriate by him. The board
agreed to prepare an analysis of the present and
future capital needs of the bank and formulate a
written plan to augment and strengthen the bank's
capital structure. All necessary steps were to be
taken to obtain current and satisfactory credit information on all loans so lacking, and the bank
was to submit to the regional administrator a written summation of the procedures and forms
adopted to obtain and record all necessary credit
information. The board was required to adopt and
implement a written program for the elimination of
all assets from criticized status and was prohibited
from extending credit to particular parties and
business entities. The board was also to cause the
collection of all uncollectible assets. If after 120
days from the effective date of the Agreement the
bank, in the opinion of the regional administrator,
had not made sufficient progress in complying
with the terms of the Agreement and in improving
the condition of the bank, the board was required
to obtain a new, active and capable chief executive officer. Said chief executive officer was to be
vested with substantial authority to ensure that the
bank was operated on a safe and sound basis. A
compliance committee of not less than five persons was to be established to ensure compliance
by the bank with the articles of the Agreement.
59. Bank with assets of $15 to $25 million
A Formal Agreement required correction of all violations of law and required procedures to be



adopted to prevent future violations. The board of
directors was required to provide the bank with
both a new and full-time senior lending officer and
a qualified full-time operations officer. Both officers
were to be vested with sufficient authority to perform their duties in an acceptable manner. The
bank was to review and increase its reserve for
possible loan to a level commensurate with the
risks inherent in the bank's loan portfolio. A written
capital program was to be developed and submitted to the regional administrator for approval. Said
program was to include specific plans for an immediate injection of equity capital and for future increases in equity capital to support the bank's
growth and activities. Dividends were restricted as
was the remuneration received by directors and
senior officers of the bank. The board members
were required, as provided by 12 USC 93, to indemnify the bank for all losses suffered on any
loan or other extension of credit granted in violation of 12 USC 84. All credit information exceptions
were to be rectified and all imperfections with respect to collateral were to be corrected. The bank
was to adopt and implement written programs to
improve collection efforts, eliminate all assets from
criticized status and correct the deficiencies in its
internal control and audit procedures. Administration of the bank's electronic data processing
equipment function was to be improved. The
board was to review and revise the bank's lending,
investment and asset/liability management policies. Compliance with the provisions of the Agreement were to be monitored and ensured by the
board, which was to submit to the regional administrator complete written reports every 30 days detailing the actions taken to comply with the Agreement and the results of those actions.
60. Bank with assets of less than $15 million

A Formal Agreement required correction of all violations of law and required procedures to be
adopted to prevent future violations. The bank was
required to formulate and implement a program to
improve its liquidity position and to reduce the
bank's reliance on rate-sensitive deposits. The
bank further was to prepare an analysis of its
present and future capital needs and to formulate
and implement a written program designed to
maintain the capital structure at an adequate level.
The reserve for possible loan was to be reviewed
and augmented by an amount acceptable to the
regional administrator. A written program to eliminate all assets from criticized status was to be
adopted and implemented. The bank was required
to review and amend its written loan policy in accordance with prudent banking standards. All internal control and internal audit deficiencies were
to be corrected. The bank was also required to
take such action as necessary to obtain fidelity insurance coverage. An evaluation of the adequacy
and competency of current management was to
be conducted, and if the bank determined that deficiencies existed then corrective action was to be
223

taken. The bank was to submit monthly reports to
the regional administrator outlining those actions
taken to comply with the terms of the Agreement
and the results of those actions.
61. Bank with assets of $15 to $25 million
A Formal Agreement required the bank to contact
those account holders whose accounts may have
been subject to as yet unidentified overcharges, to
contact all account holders whose accounts had
escheated to the state and to provide periodic
statements of account to all account holders. An
outside certified public accountant was required to
conduct a complete audit of the allotment account
department, and the bank was required to appoint
an officer to supervise that department.
62. Bank with assets of $15 to $25 million
A Formal Agreement required correction of all violations of law and required procedures to be
adopted to prevent future violations. The board of
directors was required to provide the bank with a
new, active and capable chief executive officer
who was to be vested with sufficient authority to
assure the safe and sound operation of the bank.
A written plan for achieving and maintaining an average liquidity of not less than 15 percent, exclusive of federal funds purchased and other shortterm borrowings, was to be developed and
implemented, and bi-weekly liquidity reports were
to be submitted to the regional administrator. The
bank was also required to eliminate all repurchase
agreements with entities not having an established
and/or regularly recurring deposit relationship with
the bank, and the bank was to substantially reduce
the overall level of borrowed funds. The board was
to retain an independent special counsel, acceptable to the regional administrator, to review all insider transactions with the bank and to formulate a
plan to secure payment to the bank of all interest/
fees which should have been paid to the bank.
Written programs were to be developed and implemented to (1) augment and strengthen the capital structure of the bank, (2) eliminate all assets
from criticized status, (3) improve collection efforts, (4) rectify credit information exceptions and
(5) review and increase accordingly the reserve for
possible loan. The board was to review and substantially revise the bank's written loan and investment policies. The board was required to submit
complete written reports to the regional administrator, every 30 days, detailing the action taken by
the bank to comply with the provisions of the
Agreement and the results of those actions.
63. Bank with assets of $50 to $100 million
A Formal Agreement required correction of all violations of law and appointment of a compliance
committee to report progress on correction of
those violations. The compliance committee was
also directed to submit a program for the elimination of all assets from criticized status and improve
collection efforts. The bank was prohibited from
making further loans to borrowers whose assets

224


were criticized. The board of directors was required to employ a capable senior lending officer
subject to the approval of the regional administrator. The board was also required to prepare an
analysis of the bank's present and future capital
needs. Increases in salaries and bonuses paid to
all directors were prohibited until the bank's condition and capital were restored to a level satisfactory to the regional administrator. The board was
further required to perform quarterly reviews of the
reserve for possible loan and to maintain the reserve at an adequate level. The board was to submit programs to the regional administrator addressing the following areas: loan collections,
credit information, collateral exceptions, loan reviews and internal controls and auditing procedures. Finally, a restriction was placed on the dividend payments.
64. Bank with assets of $50 to $100 million
A federal court required the bank to prepare a written plan to raise at least $2 million in new equity
capital, and dividends were restricted. A new, active and capable chief executive officer was to be
provided, with complete authority over the bank's
operational functions. A complete review of the
overall management team was to be undertaken.
All assets were to be removed from classified
status. Future loans to named parties were restricted. All violations of law were to be corrected
immediately. Loans to insiders were restricted.
New written loan policies were to be adopted, implemented and strictly adhered to. Credit concentrations in excess of 25 percent of gross capital
funds were expressly prohibited. Measures were
required to improve procedures relating to securing collateral and documenting credit information.
Delinquent loans were to be reduced to a reasonable level. The board was to act to ensure the
maintenance of an adequate liquidity position with
a written policy to be submitted to the regional administrator, as well as bi-weekly reports reflecting
average daily liquidity. Deficiencies in internal control and auditing procedures were to be corrected.
The reserve for possible loan was to be restored
and maintained at an adequate level. An oversight
committee composed of at least three outside directors was to be established to insure the bank's
compliance with the terms of the Agreement, and
monthly progress reports were to be submitted to
the regional administrator.
65. Bank with assets of less than $15 million
A Formal Agreement required the bank to expand
the duties of the chief executive officer giving him
primary responsibility for monitoring the granting of
loans, loan review and loan loss review functions.
The board was further required to appoint a new
chief executive officer if the bank's condition failed
to show substantial improvement. The board was
also responsible for reviewing the composition of
the board to determine whether to expand membership or to replace present board members. The

bank was required to immediately correct all violations of law and to review internal controls and procedures to ensure that other violations did not occur. The bank was to develop written programs to
(1) implement an internal credit review system, (2)
establish guidelines for sound asset/liability management and (3) strengthen the reserve for possible loan.
66. Bank with assets of $15 to $25 million
A Formal Agreement required the bank to correct
and eliminate each violation of law, rule or regulation cited. The board of directors was also to provide the bank with an active, capable full-time
chief executive officer within 90 days of the Agreement and establish a personnel committee composed of directors and officers to recommend personnel policies and procedures. The board was
required to conduct a quarterly review of the
bank's reserve for possible loan, with a copy of
each report sent to the regional administrator. The
board was required to submit to the regional administrator monthly delinquent loan percentage reports. Written programs were required to be developed and implemented to (1) remove all assets,
including other assets especially mentioned, from
criticized status, (2) obtain current and satisfactory
credit information on all loans so lacking, (3) correct collateral exceptions, (4) review and revise
lending policy, (5) establish appropriate internal
control and audit procedures and (6) review and
revise the bank's investment policy. A compliance
committee composed of board members was to
be established with written progress reports on
compliance with the Agreement to be submitted to
the regional administrator. Additionally, the bank
was required to submit a detailed budget for the
following fiscal year to the regional administrator
and for each year the Agreement remained in effect.
67. Bank with assets of $25 to $50 million
A Formal Agreement with the bank required that
the board of directors always consist of at least
five members and that the names of any nominees
for the board be submitted to the regional administrator subject to his veto. The daily operating management of the bank was placed in the hands of
the chief executive officer who reported only to the
board of directors. The bank was required to
adopt and implement a written program to eliminate all assets from criticized status and to refrain
from extending credit to borrowers whose assets
were criticized. An executive loan committee was
appointed to review all extensions of credit in excess of a specified amount, and the bank was required to establish internal controls to monitor the
lending function. Current and satisfactory credit information was to be obtained on all loans so lacking and all collateral exceptions were to be remedied. Moreover, each loan officer was required to
prepare a written credit analysis for every loan.
The bank was required to adopt policies governing



•liquidity and asset/liability management and policies governing its investment account. A written
capital program was required, as well as quarterly
review of the bank's reserve for possible loan. The
chairman of the board resigned from the board of
directors and entered into a written agreement
which prohibited him from involvement in the
bank's daily operations, from attempting to cause
any extension of credit to be made by the bank to
any particular person, corporation, business or
other entity, from serving as chief executive officer
of the bank or from unilaterally attempting to make
any change in the bank's personnel.
68. Bank with assets of $25 to $50 million
A Formal Agreement required the bank to correct
all violations of law cited. The board of directors
was required to establish a compliance committee
comprised of at least three outside directors to ensure the bank's compliance with the terms of the
Agreement, with quarterly progress reports to be
submitted to the regional administrator. The board
was also required to make a comprehensive evaluation of the bank's management with monthly progress reports submitted to the regional administrator. A capable senior lending officer was to be
appointed by the board, with a loan and executive
committee to monitor lending functions until such
officer was appointed. The bank was to achieve
and maintain an adequate capital structure and to
obtain an infusion of $1 million in equity capital
within 180 days of the Agreement. The bank was
prohibited from declaring or paying dividends except: (1) in conformity with the provisions of 12
USC 56 and 60, (2) justified by sound banking policy and (3) with the prior written approval by the
regional administrator. Written programs were required to be established and implemented to (1)
revise written loan policies, (2) obtain current and
satisfactory credit information on future loans and
correct imperfections pertaining to the securing of
collateral, (3) provide for improved collection efforts and reduce the level of delinquent loans, (4)
remove all assets from criticized status and (5)
maintain an adequate reserve for possible loan.
The bank was to employ the services of a capable
internal auditor whose primary responsibility was
to prepare written recommendations to the board
for establishment of adequate internal controls.
69. Bank with assets of less than $15 million
A Formal Agreement required the bank to immediately correct all violations of law cited. The board
of directors was required to evaluate the adequacy
and effectiveness of management and detail the
authority and responsibility of the chief executive
officer. A compliance committee was mandated to
ensure compliance with the terms of the Agreement. The board was to adopt written programs to
(1) implement a written loan policy of safe and
sound nature, (2) improve collection efforts, (3)
correct credit and collateral exceptions, (4) correct
internal control deficiencies and (5) achieve and
maintain an adequate reserve for possible loan.
225

Memorandum of Understanding
70. Bank with assets of less than $15 million

A Memorandum of Understanding required the
board of directors to correct each violation of law
cited in the report of examination and expressly
stated the board's acknowledgement of personal
liability for any losses suffered by the bank on excessive loans in violation of 12 USC 84. The board
was further required to develop a written policy to
ensure that loans to insiders or their related interests were based on documented creditworthiness
of such individuals. The board was to review the
bank's management team and ensure that needed
officers were employed in a timely fashion. Written
programs were required for (1) elimination of all
assets from a criticized status, (2) correction of
loan documentation deficiencies and (3) augmentation of reserve for possible loan. The board was
required to engage an independent certified public accountant to commence and complete a comprehensive audit of the bank. Additionally, the
bank was required to submit monthly progress reports to the regional administrator covering (a) correction of violations, (b) strengthening and/or removal of criticized assets, (c) correction of internal
control deficiencies and (d) correction of loan documentation exceptions.
71. Bank with assets of less than $15 million
A Memorandum of Understanding required the
board of directors to immediately correct all violations of law cited in the report of examination. The
board was to provide the bank with an active and
capable chief executive officer and to submit a report to the regional administrator assessing the
competency of all bank officers. The board was to
establish an oversight committee composed of at
least four outside directors to ensure compliance
with all terms of the Memorandum. The board was
required to establish and implement written programs to (1) amend the bank's written lending policies, (2) obtain current and satisfactory credit information on all future loans, (3) remove all assets
from criticized status and (4) achieve a profitable
level of bank operations. In order to improve the
bank's unsatisfactory liquidity position, the board
was to develop written asset/liability guidelines as
well as a new written investment policy of a safe
and sound nature suited to the needs of the bank.
72. Bank with assets of less than $15 million
A Memorandum of Understanding required the
board to immediately seek a qualified and capable
chief executive officer, experienced in both lending and operations. A new written lending policy
was required, with special emphasis on reducing
the volume of criticized loans, monitoring delinquent loans and obtaining proper credit and collateral documentation. The reserve for possible loan
was to be maintained at a level deemed adequate
in light of the risk and potential for loss inherent in
the bank's loan portfolio. The bank was to engage

226


an independent certified public accountant to aid
in establishing proper internal controls and audit
procedures. Liquidity was to be maintained at an
adequate level, and a policy addressing volume
and volatility of rate-sensitive deposits was to be
formulated. An equity capital injection of at least
$250,000 was required to improve the bank's capital structure. All violations of law cited were to be
immediately corrected, with steps taken to prevent
future violations.
73. Bank with assets of $25 to $50 million
A Memorandum of Understanding required the
bank to correct each violation cited in the report of
examination, with an express restriction on loans in
excess of the lending limitation provided for in 12
USC 84. The bank was required to develop a written program covering loans to insiders and their
interests, with a copy submitted to the regional administrator for approval. The bank was further required to appoint an independent corporate
trustee to administer the employee's profit sharing
plan in full compliance with Employee Retirement
Income Security Act. The board of directors was to
prepare an analysis of the bank's capital needs,
including a plan to reduce the bank's loan-tocapital ratio. Other written programs were required
to (1) eliminate all assets from classified status, (2)
correct loan documentation deficiencies, (3) correct deficiencies in internal controls and audit procedures and (4) improve collection efforts. The
board was to evaluate the adequacy and competency of the bank's management. A detailed report
of this evaluation was to be submitted to the regional administrator.
74. Bank with assets of $15 to $25 million
A Memorandum of Understanding required comprehensive plans to improve the bank's earnings
and its liquidity and asset/liability management
policy. An adequate reserve for possible loan was
to be achieved and maintained. Written programs
were required to (1) remove all assets from criticized status, (2) reduce the level of delinquent
loans and (3) correct internal control deficiencies.
The bank was further required to remedy all violations cited in the report of examination.
75. Bank with assets of $15 to $25 million
A Memorandum of Understanding required that all
violations cited be immediately corrected. A new
senior lending officer was to be appointed. Written
programs were required to be established and implemented to (1) remove all assets from criticized
status, (2) obtain current and satisfactory credit information, (3) amend the written loan policy, (4) improve the bank's liquidity position and (5) eliminate
internal control deficiencies. A new written investment policy of a safe and sound nature were also
required.
76. Bank with assets of less than $15 million

A Memorandum of Understanding required the
board of directors to improve the quality of loan

supervision by active management and the board.
The board was required to comprehensively review the bank's current written loan policy and
make all necessary modifications, specifically addressing repayment terms and collateral requirements. Written programs were required to be established and implemented to (1) eliminate all
assets from criticized status, (2) obtain current and
satisfactory credit information on all loans so lacking, (3) correct collateral exceptions, (4) ensure
that the bank's reserve for possible loan is maintained at an adequate level, (5) analyze and fulfill
the bank's present and future capital needs, (6)
correct internal control deficiencies and (7) ensure
that all future loans to insiders and their interests
comply with appropriate statutes and regulations.
Loans to any borrower whose loans or other extensions of credit had been criticized were restricted.
The board was further required to appoint a qualified employee to perform the bank's internal audit
programs and independently submit written reports to the regional administrator.
77. Bank with assets of $15 to $25 million
A Memorandum of Understanding required the
bank to reduce all loans in excess of the 12 USC
84 lending limitation and to refrain from the granting of such loans. All other violations cited were to
be immediately corrected. The board of directors
was instructed to reduce the bank's ratio of net
loans to capital to 9.5 to 1 within 24 months of the
effective date of the Memorandum. The board was
required to appoint a compliance committee composed of at least three outside directors to ensure
the ongoing compliance with the terms of the
Memorandum. Written programs were to be
adopted to (1) remove all assets from criticized
status, (2) achieve and maintain an adequate reserve for possible loan, (3) obtain current and satisfactory credit information on all loans so lacking,
(4) correct each collateral exception noted and (5)
correct internal control deficiencies. The bank was
not to declare or pay any dividends except (a) in
conformity with 12 USC 60, (b) when justified by
sound banking policy and (c) with prior written approval of the regional administrator.
78. Bank with assets of less than $15 million
A Memorandum of Understanding required the
board of directors to immediately correct all violations of law cited in the report of examination. All
criticized loans to insiders or their related interests
were to be removed from criticized status. The
board was required to take all necessary steps to
improve the bank's management and increase the
supervision thereof. A new written loan policy was
required, as well as written programs designed
specifically to (1) reduce and collect each classified loan, (2) closely monitor each delinquent loan
and initiate aggressive collection efforts, (3) obtain
current and satisfactory credit information and (4)
correct deficiencies in collateral documentation.
The board was to employ the services of an inde


pendent certified public accountant to recommend
to the bank procedures for proper internal auditing
and control. The board was also required to formulate and adopt a comprehensive policy to improve
the bank's liquidity position, specifically addressing volume and volatility of rate-sensitive deposits.
79. Bank with assets of less than $15 million
A Memorandum of Understanding required the
board of directors to improve the quality of supervision by both active management and the board.
A thorough review of the bank's written loan policies was to be undertaken, and staff adherence
thereto was to be ensured. Written plans were to
be adopted to (1) strengthen or collect each criticized loan, (2) monitor and identify problem
credits, (3) obtain current and satisfactory credit
information, (4) maintain an adequate reserve for
possible loan, (5) ensure that liquidity is maintained at an adequate level, specifically addressing volume and volatility of rate-sensitive deposits
and (6) establish proper internal controls. All violations cited in the report of examination were to be
corrected and the board was required to ensure
against their recurrence.
80. Bank with assets of $25 to $50 million
A Memorandum of Understanding required the
bank to develop a comprehensive plan to improve
earnings. The plan was to include a detailed
budget which carefully controlled expenses, particularly interest and salaries. Policies concerning
liquidity, asset/liability management and investments were to be reviewed and revised. A written
capital program was required, and dividends were
restricted. A written loan policy was to be revised
and implemented, and a program of credit administration to reduce delinquencies and credit/
collateral documentation deficiencies was required. The bank had to develop a plan to remove
from criticized status all loans so listed in the examination report. A program to replenish and
maintain the reserve for possible loan at an adequate level was to be designed and implemented.
81. Bank with assets of $50 to $100 million
A Memorandum of Understanding required the
board of directors immediately to correct each violation of law, rule or regulation cited in the report of
examination. Written programs were to be established and implemented to (1) reduce or collect
each criticized loan, (2) obtain current and satisfactory credit information and perfect procedures
pertaining to the securing of collateral on all loans
so lacking, (3) establish asset/liability management
of a safe and sound nature, ensuring a liquidity
level of a* daily average of 15 percent or more (exclusive of borrowed funds), (4) achieve and maintain an adequate reserve for possible loan and (5)
to correct the bank's internal control deficiencies.
The board was further required to formulate a plan
for the injection of $1 million in equity capital.
227

82. Bank with assets of less than $15 million

A Memorandum of Understanding required the
board of directors to review and improve the loan
portfolio and management thereof. Written programs were to be established to (1) reduce the
volume of criticized assets, (2) recover past-due
loans, (3) maintain an adequate reserve for possible loan, (4) obtain current and satisfactory credit
information on all loans so lacking, (5) improve internal audit procedures and (6) ensure sufficient liquidity and capital positions. The board was required to take steps to improve the overall lending
function and ensure compliance by all lending officers with established lending procedures. All violations of law, rule or regulation were to be immediately corrected. The board was also directed to
prevent future insider abuse of the bank's lending
function and to see that the bank was reimbursed
for loss of interest resulting from such practices.
83. Bank with assets of less than $15 million
A Memorandum of Understanding required the
board of directors to institute a program designed
to ensure that liquidity be restored and maintained
at a level commensurate with prudent banking
practices. The bank was also required to comprehensively analyze its equity capital needs and take
steps toward the strengthening and augmentation
thereof. Written programs were required to (1)
eliminate all loans from criticized status, (2) obtain
current and satisfactory credit information, (3) collect delinquent loans, (4) maintain an adequate reserve for possible loan and (5) correct all collateral
exceptions. The board was required to obtain the
services of an independent certified public accountant to thoroughly examine the bank's operating budget. If, in the opinion of the regional administrator, the bank's condition failed to sufficiently
improve, the board was required to obtain a new,
active and capable chief executive officer. All violations of law and regulation were to be corrected.
84. Bank with assets of less than $15 million
A Memorandum of Understanding required the
board of directors to review and amend the bank's
written loan policy and reduce the level of criticized assets. Delinquent loans were to be closely
monitored. The bank was required to maintain an
adequate reserve for possible loan. The board was
required to formulate a comprehensive funds management policy to ensure maintenance of liquidity
at no less than 20 percent. An injection of
$300,000 in equity capital was required. A compliance committee including at least two outside directors was to be established and violations of law
were to be immediately corrected.
85. Bank with assets of less than $15 million
A Memorandum of Understanding prohibited the
bank from extending credit in violation of the lending limitations provided for in 12 USC 84. The
board of directors was required to reimburse the
bank for any losses incurred as a result of any

228


such violations. The board was required to immediately correct all other violations cited. The board
was required to reduce the level of loans outstanding to borrowers located outside the bank's primary trade area to an amount not to exceed 25
percent of gross loans. Written programs were required to (1) remove all assets from criticized
status, (2) correct credit and collateral deficiencies, (3) reduce the level of delinquent loans, (4)
ensure the ongoing adequacy of the reserve for
possible loan and (5) correct internal control deficiencies. The board was required to implement a
previously approved capital program calling for an
injection of an additional $800,000 in equity capital.
86. Bank with assets of $15 to $25 million
A Memorandum of Understanding required the immediate correction of all violations cited. The
board of directors was required to increase and
maintain a liquidity level in excess of 15 percent
and to provide bi-weekly liquidity calculations to
the regional administrator. A written fundsmanagement policy with investment guidelines
was to be formulated and implemented. The board
was required to design written programs to (1) reduce the level of criticized assets and past-due
loans, (2) obtain current and satisfactory credit information on all loans made in excess of $5,000,
(3) reduce the volume of out-of-territory loans and
(4) review and maintain the reserve for possible
loan at an adequate level. The board was required
to inject equity capital in an amount sufficient to increase the bank's capital account to a level acceptable to the regional administrator.
87. Bank with assets of $15 to $25 million
A Memorandum of Understanding required the
bank to immediately correct all violations cited, especially with respect to the lending limitation imposed by 12 USC 84. Written programs were to be
established and implemented to (1) eliminate reliance on rate-sensitive funds and to achieve and
maintain a liquidity level of not less than 20 percent, (2) remove all assets from criticized status,
(3) ensure an adequate reserve for possible loan,
(4) improve collection efforts and reduce the level
of delinquent loans, (5) obtain current and satisfactory credit information on all loans so lacking,
(6) correct internal control deficiencies and (7) ensure adherence to existing written lending and
overdraft policies. The board of directors was to
provide the bank with a new, active and capable
senior lending officer. The board was required to
provide the bank with fidelity insurance coverage
in an appropriate amount. Also required were
monthly reports to be submitted to regional administrator comprehensively analyzing the bank's
earnings and present and future capital needs.
88. Bank with assets of $15 to $25 million
A Memorandum of Understanding required the
board of directors to develop a management plan

addressing the bank's management and staffing
needs. All violations of law were to be immediately
corrected. The board was required to establish
and implement written programs designed to (1)
obtain current and complete financial information
on all loans cited as lacking such information, (2)
correct imperfections pertaining to the securing of
collateral, (3) correct internal control deficiencies
and (4) correct deficiencies in the electronic data
processing operations.
89. Bank with assets of less than $15 million
A Memorandum of Understanding required the
bank to correct all violations of law, rule or regulation cited in the report of examination. The bank
was required to institute a program for improving
and maintaining the bank's liquidity position at not
less than 15 percent, exclusive of volatile deposits,
with monthly liquidity analysis reports sent to the
regional administrator. A written program to improve and sustain the bank's earnings was also required. The board of directors was required to prepare an analysis of the bank's present and future
capital needs and formulate a program to augment
and strengthen the bank's capital structure, with a
copy of said program sent to the regional administrator for approval. The board was required to hire
a new, qualified and capable lending officer to act
as the bank's credit administrator, whose duties
were to include supervision of the overall lending
function.
90. Bank with assets of less than $15 million
A Memorandum of Understanding called for comprehensive analysis of the bank's present and future management needs. The Memorandum required the bank to develop a plan to implement
procedures to correct internal control deficiencies.
The board was required to develop written programs to eliminate criticized assets, eliminate
loans lacking complete credit information and improve collection practices and procedures. The
board was directed to eliminate the violation of 12
CFR 1.8 and to develop a written program to improve the bank's earnings. This board agreed to
submit the following reports on a monthly basis to
the regional administrator: balance sheets, operating statement, reconciliation of the reserve for possible loan, criticized assets and liquidity computation past due report.
91. Bank with assets of $25 to $50 million
A Memorandum of Understanding required the
bank's chief executive officer to provide the regional administrator with an in-depth written review
of the bank's management structure. The board
was required to adopt measures for improving the
bank's liquidity position and reducing dependence
on rate-sensitive funds. All violations of law, rule or




regulation were to be immediately corrected. Written programs were required to (1) remove all assets from criticized status, (2) maintain an adequate reserve for possible loan, (3) correct internal
audit deficiencies, (4) improve collection of delinquent loans and (5) revise the written lending policy to render it commensurate with safe and sound
practices. An oversight committee, composed of
at least three outside directors, was to be established to ensure and coordinate the bank's ongoing compliance with all provisions of the Memorandum.
92. Bank with assets of less than $15 million
A Memorandum of Understanding required the
board of directors to develop a comprehensive
plan designed to improve the bank's earnings. The
board was required to prepare an in-depth analysis of the bank's present and future capital
needs, with a plan to augment the bank's equity
capital by an amount deemed appropriate by the
regional administrator. Written programs were required to (1) reduce delinquent loans to an acceptable level, (2) obtain current and satisfactory
credit information on all loans so lacking, (3) remove all assets from criticized status and (4) ensure the adequacy of the reserve for possible loan.
The board was further required to correct and prevent the recurrence of all violations of law and regulations cited in the report of examination.
93. Bank with assets of $25 to $50 million
A Memorandum of Understanding required the
board of directors to comprehensively evaluate the
bank's management and to provide a program for
formal training to increase managerial competency. The board was to propose a written policy
for liquidity and asset/liability management, with a
copy of the proposal to be forwarded to the regional administrator for comments and review.
Written programs were required to be established
and implemented to (1) remove all assets from criticized status, (2) obtain current and satisfactory
credit information on all loans so lacking, (3)
achieve and maintain an adequate reserve for
possible loan and (4) eliminate all unresolved violations of law, rule or regulation cited in the report
of examination. The board was required to conduct an objective, in-depth analysis of the bank's
present and future capital needs. The bank was
restrained from declaring or paying any dividend
unless (a) in conformity to 12 USC 56 and 60, (b)
justified by safe and sound banking policy and (c)
with prior written approval of the regional administrator. The bank was further required to correct deficiencies in its accounting and administrative controls and to employ-a qualified internal auditor to
supervise this effort.

229







APPENDIX D

Selected Addresses and
Congressional Testimony

Selected Addresses and Congressional Testimony
Date and Topic
Jan. 26, 1979. Statement of John G. Heimann, Comptroller of the Currency, before the Senate Committee on
Banking, Housing and Urban Affairs, Washington, D.C
Feb. 9, 1979. Remarks of John G. Heimann, Comptroller of the Currency, before the Assembly for Bank Directors, Boca Raton, Fla
Feb. 28, 1979. Statement of John G. Heimann, Comptroller of the Currency, before the Senate Committee on
Banking, Housing and Urban Affairs, Washington, D.C
Mar. 26, 1979. Remarks of John G. Heimann, Comptroller of the Currency, before the Government Research
Corporation, London, England
Apr. 5, 1979. Statement of John G. Heimann, Comptroller of the Currency, before the Subcommittee on Financial Institutions Supervision, Regulation and Insurance of the House Committee on Banking, Finance and
Urban Affairs, Washington, D.C
Apr. 11, 1979. Statement of John G. Heimann, Comptroller of the Currency, before the Subcommittee on Financial Institutions of the Senate Committee on Banking, Housing and Urban Affairs, Washington, D.C.
May 4, 1979. Remarks of Donald R. Johnson, Director for Trust Operations, before the 27th Annual Southern
Trust Conference, Mobile, Ala
May 15, 1979. Statement of John G. Heimann, Comptroller of the Currency, before the Subcommittee on Financial Institutions Supervision, Regulation and Insurance of the House Committee on Banking, Finance
and Urban Affairs, Washington, D.C
May 23, 1979. Statement of John G. Heimann, Comptroller of the Currency, before the Senate Committee on
Banking, Housing and Urban Affairs, Washington, D.C
June 14, 1979. Statement of John G. Heimann, Comptroller of the Currency, before the Senate Committee on
Banking, Housing and Urban Affairs, Washington, D.C
June 27, 1979. Statement of Cantwell F. Muckenfuss, III, Senior Deputy Comptroller for Policy, before the Subcommittee on Financial Institutions of the Senate Committee on Banking, Housing and Urban Affairs,
Washington, D.C
Aug. 1, 1979. Statement of John G. Heimann, Comptroller of the Currency, before the Subcommittee on Commerce, Consumer and Monetary Affairs of the House Committee on Government Operations, Washington,
D.C
Aug. 8, 1979. Remarks of Donald R. Johnson, Director for Trust Examinations, before the 53rd Western Trust
Conference, Seattle, Wash
Sept. 12, 1979. Statement of Lewis G. Odom, Jr., Senior Deputy Comptroller of the Currency, before the Subcommittee on Commerce, Consumer and Monetary Affairs of the House Committee on Government Operations, Washington, D.C
Sept. 20, 1979. Remarks of Dean E. Miller, Deputy Comptroller for Specialized Examinations, before the 37th
Trust Conference, Florida Bankers Association, Lake Buena Vista, Fla
Sept. 25, 1979. Statement of John G. Heimann, Comptroller of the Currency, before the Subcommittee on Financial Institutions Supervision, Regulation and Insurance of the House Committee on Banking, Finance
and Urban Affairs, Washington, D.C
Oct. 16, 1979. Statement of Lewis G. Odom, Jr., Senior Deputy Comptroller of the Currency, before the Subcommittee on Financial Institutions Supervision, Regulation and Insurance of the House Committee on
Banking, Finance and Urban Affairs, Washington, D.C
Dec. 11, 1979. Statement of Jo Ann S. Barefoot, Deputy Comptroller for Customer and Community Programs,
before the Subcommittee on Consumer Affairs of the Senate Committee on Banking, Housing and Urban
Affairs, Washington, D.C
Dec. 12, 1979. Statement of John G. Heimann, Comptroller of the Currency, before the Subcommittee on International Finance of the Senate Committee on Banking, Housing and Urban Affairs, Washington, D.C.
Dec. 21, 1979. Statement of Cantwell F. Muckenfuss, III, Senior Deputy Comptroller for Policy, before the Senate Committee on Banking, Housing and Urban Affairs, Washington, D.C
Dec. 28, 1979. Remarks of John G. Heimann, Comptroller of the Currency, before the Joint Luncheon of the
American Economic Association and the American Finance Association, Atlanta, Ga


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Statement of John G. Heimann, Comptroller of the Currency, before the Senate
Committee on Banking, Housing and Urban Affairs, Washington, D.C., January
26, 1979
I appreciate this opportunity to discuss the 1979
budget of the Office of the Comptroller of the Currency. Copies of the 1979 operating and capital
budgets have previously been supplied to the committee. I would like to use this occasion to highlight the
most important features of the 1979 operating budget.
Total expenses of the 1979 operating budget
amount to $102,012,900 and are broken down into the
following categories:
Salaries and benefits
Travel
Education and training
Rent and maintenance
Office expense
Other expenses
Total

$ 73,640,200

13,906,300
592,200

4,819,200
2,375,800
6,679,200

72.2%
13.6
.6
4.7
2.3
6.6

$102,012,900 100.0%

Salaries and benefits, travel, and education and
training account for more than 86 percent of the 1979
operating budget and are directly related to employment of people. Trained and skilled people are essential for performing our responsibilities to examine and
analyze national banks for soundness, to protect consumer interests, to protect investor interests and to foster economic stability. It is important to realize that the
tasks assigned to the Comptroller's Office are people
intensive. Therefore, because the safety and soundness of the banking system to our economy are crucial, it is imperative to hire the best people, train them
well and retain the flexibility to assign them to wherever they are most needed.
Before turning to a more detailed discussion of
these figures, I want to point out that the increase in
the 1979 budgeted expenses stems from (1) growth of
the national banking system, (2) changes in supervisory requirements imposed by the increasing complexity of national banks' activities both domestically
and internationally, (3) new duties stemming from passage of the International Banking Act and the Financial
Institutions Regulatory and Interest Rate Control Act,
(4) continuing implementation of duties mandated by
Congress in recent years, such as Truth in Lending,
Fair Housing Act and Community Reinvestment Act,
which will result in greater expenditures in 1979 than in
1978 and (5) inflation.
Total domestic and foreign assets of banks supervised by the Comptroller's Office have grown 56 percent over the last 5 years from $570.9 billion at yearend 1973 to an estimated $890 billion at year-end
1978. The estimated increase for 1979 is 10.3 percent.
We expect continued growth and expansion in the national banking system during 1979 which, in turn, will
require allocating additional resources to meet existing
responsibilities of the Comptroller's Office.
In addition, the complexity of commercial banking
has also made examination and supervision more demanding. Because our functions depend primarily on



people, this complexity has increased the need to
place special emphasis on obtaining the services of
individuals with abilities to deal with the most sophisticated banking operations, to train and keep them
abreast of the latest developments and to design incentives to retain the best possible staff in the face of
offers from the private sector which are frequently
more attractive because of governmental limitations on
salaries and benefits.
Over the last several years, we have increasingly
found it essential to hire and train specialists. This is
reflected in organizational changes which have resulted in separate divisions dealing with consumer examinations, consumer affairs, community development, civil rights, multinational banks, special
surveillance of national banks (National Bank Surveillance System) and other specialized areas. Thus, both
salary expense and training expense have risen considerably. Relatively high personnel turnover adds to
the expense of maintaining the highly qualified people
we must have to respond quickly and effectively to
new situations or problems that inevitably arise, especially in times when the economy is less than robust.
Another indication of the growing complexity of commercial banking is the rapid expansion in both size
and scope of the domestic and international activities
of the largest national banks. Foreign assets of national banks grew 112 percent over the last 5 years
from $79.9 billion at year-end 1973 to an estimated
$169.1 billion at year-end 1978. This percentage increase is more than double the 47 percent growth in
domestic assets over the same period. Foreign assets
as a percentage of total assets have risen from 14 percent at year-end 1973 to an estimated 19 percent at
year-end 1978. Because of our increasing interest in
this area, the Comptroller's Office has become an active participant in the deliberations of the Group of Ten
Committee on Banking Regulations and Supervisory
Practices, known as the Cooke Committee. We have
provided research to this committee and have sent
representatives to its quarterly meetings.
In 1978, Congress continued its trend to add new
duties for federal bank regulators to make regulation
more responsive to the public's concerns. The extensive regulatory and supervisory changes mandated by
the new Financial Institutions Regulatory and Interest
Rate Control Act and the International Banking Act, together with expanded supervisory responsibilities in
connection with the Community Reinvestment Act, will
inevitably require more personnel and support systems if they are to be administered effectively. We estimate that our costs in connection with these three laws
will amount to $2,079,000 during 1979.
One of the most compelling—I might even say insidious—elements influencing the 1979 budget is the inflation rate, which affects our Office as it does other
components of our society. During the last 5 years
the price level, as measured by the Gross National
233

Product (GNP) deflator, has risen 44 percent. This is
an annual rate of inflation equal to 7.5 percent. During
this same period, our expenses per employee increased 58 percent. The more rapid rise in expenses
per employee than the increase in prices resulted from
the upgrading and increased specialization of personnel, which we deem essential to respond adequately
to the increasing complexity and sophistication of
banking operations. Expenses per employee are expected to rise at least 3.5 percent in 1979, compared
to the official 7.4 percent increase forecast by the administration for the GNP deflator.
Over the last 5 years, growth of the national banking system, increasing complexity in national banks'
activities, new duties, expansion of traditional duties
and inflation have combined to increase our expenses
103 percent from $45.8 million in 1973 to $92.9 million
in 1978. About half of the increase was the result of inflation. The other half stemmed from the addition of
employees to carry out new and traditional responsibilities.
To improve the effectiveness of our Office in carrying out its statutory responsibilities and in responding
to an increasingly complex and volatile economy,
changes were made in the structure of the Office early
last year. We are confident these changes will further
improve our efficiency. This program consolidates
management functions, strengthens the administration
of regional activities and accommodates changes in
the banking industry. Of course, an effective and efficient organization must always be open to selfexamination, improvement and, if necessary, change.
We intend to continue to approach our responsibilities
in this spirit.
The major functions of bank supervision, operations,
policy and law have been grouped into four areas of
control and direction. Each major function is the responsibility of a senior officer who reports directly to
the Comptroller. This arrangement has the advantages
of consolidating management of similar functions,
strengthening administration of regional activities and
planning for accommodation of evolutionary changes.
It is designed to improve the ability of the Comptroller to exercise proper direction and control of programs and functions, to meet our statutory responsibilities and to address more readily new and emerging
issues confronting the national banking community.
These changes enhance program effectiveness by
clearly delineating and consolidating major functional
areas of responsibility and reducing the number of positions reporting directly to the Comptroller. The
changes resulted in adding 39 permanent positions to
the 3,069 originally budgeted for 1978. (Copies of the
new organization chart have been supplied to the
committee.)
In this time when the administration is making strenuous efforts to bring inflation under control, we are
making every effort to keep our expenditures to a minimum consistent with effective supervision of the national banking system. While we initially estimated that
our new and traditional duties would require expenditure of $111,090,300 and a staff of 3,270 in 1979, we
are confident that stringent emphasis on efficiency will

234


permit us to carry out our responsibilities with the expenditure of $102,012,900 and a staff of 3,123. We believe that elimination of 147 positions, salary expense
reduction of $3,359,600 and travel expense reduction
of $3,825,200 from estimated needs will not impair the
Office's performance.
The slight net increase of 15 new positions in the
1979 budget over 1978 was reviewed and appoved
by the Department of the Treasury.Their decision recognizes that our banking system, in times like these,
needs more people to assure the soundness of the
system.
Projected revenues for 1979 are $102,500,000,
which should provide a surplus of $487,100. Because
our projected income and expenses are essentially
balanced, we will add this slight excess of revenue to
our reserve funds which we must, in prudence, maintain to operate during different economic periods when
revenues fall short of expenses.
The 1979 budget recognizes the increasing importance of the areas I highlighted last year, viz., international operations and consumer programs.
A multinational region has been created to deal with
the increasingly complex and multifaceted nature of
some of the nation's largest banks. Because of the dispersed geographical composition of the banks' responsibilities, it is, in effect, a separate region. Its creation derives from the fact that there exist two types of
banking systems based on size and services—those
that are global in operation and others that serve more
restricted areas. Using $1 billion in total assets as an
approximate indicator of a multinational bank, there
were 150 banks whose total assets exceeded this
amount on September 30, 1978. These 150 banks
amounted to only 1 percent of the 14,394 commercial
banks but held 57 percent of the total assets.
The multinational region will be divided into two general areas: (1) examination and supervision and (2)
support and analysis. By concentrating on banks in
this group, our objective is to understand and supervise the operations of these major banks outside our
classical framework. However, we intend to continue
the traditional examination process and the external
analysts' perception to permit a more logical conclusion as to the present condition of the banks. Economic data affecting multinational banks or banks in
general will be used to assess the impact of developments on the entire banking system. Initially, the region
will be responsible for 10 of the largest national
banks. More will be added as we gain experience.
However, we felt it prudent at the outset to start with a
limited number of banks to facilitate experimentation
and development of sound and workable supervisory
and analytical programs. The amount allocated in the
1979 budget to this region is $1,475,300 as against
$1,002,200 expended in 1978. We are convinced this
increase is vital if we are to perform effectively our responsibilities in this growing and sensitive area.
Expenses also continue to increase as a result of our
commitment to consumer protection and community
development. Our newly created Office of Customer
and Community Programs will strengthen the consumer affairs, civil rights and community development

activities of our Office. These activities include:
(1) The development and improvement of regulations, legislative proposals and general policy;
(2) Guidance, training and monitoring for our consumer examination program which is now enforcing the provisions of the Community Reinvestment Act, Truth-in-Lending Act, Equal
Credit Opportunity Act, Fair Housing Act, Real
Estate Settlement Procedures Act and other
consumer-oriented laws; and
(3) Liaison with a broadening consumer and community constituency, who increasingly recognize they are affected by the lending practices
of the banks we regulate.
Of particular importance is the Office's expanding
role in implementing the Community Reinvestment Act,
which requires that the regulatory agencies encourage
lenders to help meet the credit needs of their local
communities. As part of our commitment to effective
action, the new office will promote communication between lenders and community officials, residents and
business, and it will develop information to help identify community credit needs and take steps to improve
access of nonbanking groups to the regulatory
process, in tms way, we nope to substitute a process
of education for burdensome regulatory requirements
or complex formal interpretations.
Because we feel strongly that, in this time of severe
public budget constraints, financial institutions must
make major contributions to meet housing, community
development and small business credit needs and that
our technical support to encourage and provide leadership in developing these programs is essential, the
customer and community program expenses of the
1979 budget are $1,322,600, or 106 percent above the
estimated 1978 expenses of $642,100.
To improve the ability of our Office to address more
readily new and emerging issues and to increase our
effectiveness in carrying out existing programs, we
have expanded the staff involved in research, analysis
and regulatory reform. The increased complexity of the
banking system, the financial markets and the economy as a whole require broader and more timely analysis of developments than ever before. The role of financial institutions in the economy is constantly
changing, and we, as a regulator and supervisor, have
a responsibility for anticipating developments and preparing appropriate strategies for dealing with them.
To this end, we have expanded our staff in the area
of interagency coordination to facilitate the greatly increased number of matters requiring interagency consultation that have resulted from new legislation, the increasing complexity of the financial system, the
increasing need to develop uniform regulatory policies
and supervisory procedures and the need to exchange information about different parts of the same
banking organization supervised by different agencies.
In addition, we have created the Office of Regulations Analysis to improve the efficiency and effectiveness of the regulation and supervision of national



banks. This office reviews regulations for clarity and
brevity to minimize cumbersome procedures and complex legal terminology with special attention paid to the
burdens placed on small institutions which do not have
the resources to handle the volume of paperwork or
analysis involved in complying with existing regulatory
requirements. We expect that over time the work of this
office will reduce national banks' costs of complying
with regulations and reduce the costs incurred by the
Comptroller's Office in administering and enforcing
regulations.
We have expanded and upgraded the staff in the Division of Banking Research and Economic Analysis
and the Strategic Analysis Division to enhance the
quality and range of research and analysis of economic developments, banking industry trends and developments, banking operations and a variety of other
issues, both long- and short-term, affecting the banking and financial systems. The amount allocated in the
1979 budget to regulatory reform, research and analysis is $1,612,100, or 116 percent above the 1978 expense of $746,600.
Turning now to the most important expense categories in the 1979 budget, the largest proportion is devoted to salaries. The simple fact is that supervision of
national banks to assure their soundness requires
many people and depends on their abilities and motivation. Total salaries and benefits in 1979 are scheduled to be $73,640,200, 10.3 percent above the
$66,751,000 spent in 1978.
Travel costs are another significant contributor to total expenses. They amount to" almost 14 percent of the
total 1979 budget. In 1979, the travel budget for the
Comptroller's Office is projected to be $13,906,300, up
12.2 percent from the 1978 actual expenses. Because
of an accounting change, the 1979 travel budget includes travel related to education of $2,006,300 which
was charged to "education and career development"
in prior years. After restating the 1979 travel budget to
reflect this accounting change, the 1979 travel budget
decreased $490,000, or 4 percent when compared
to 1978, and amounts to 11.7 percent of the total
budget.
Last year I discussed with the committee the large
percentage increase in the educational and career development budget. At that time, 1 conveyed my commitment to education as an indispensable factor in
maintaining quality supervision in a rapidly changing
and complicated field. We have allocated $592,200, or
0.6 percent of the total 1979 budget, for this item. If the
budget were restated to include $2,006,300 in travel
expenses, the total for education and career development would be $2,598,500, or 2.5 percent of the total
budget. This is an increase of 49.6 percent over actual
1978 expenses of $1,737,000. While still a small part of
our total budget, it is the optimum amount we can effectively use at this time.
The cost of rent and maintenance for all nationwide
facilities of the Comptroller's Office is budgeted at
$4,819,200 in 1979. Our Washington headquarters accounts for slightly more than half of total office space.
As required by our Washington lease, the Office is now
negotiating with the lessor to establish new rental rates
235

for the next 5-year lease renewal period to begin in
June 1979. The 1979 budget for rent is somewhat inflated because the lessor's proposed rates were included for the last 7 months of the year. We are
hopeful that the negotiation process will succeed in
lowering these rates substantially, but we have made a
conservative budget estimate.
A survey has been made to compare the
Comptroller's rental rates for its privately leased office
space with the cost of comparable General Services
Administration (GSA) space in 15 cities. In the majority of these locations, we have found that other federal agencies are paying rental rates to GSA that exceed those the Comptroller's Office will pay in 1979.
Our Office remains committed to the highly structured, disciplined and cost effective budget process
which I described last year in my testimony before this
committee. With numerous competing demands on our
resources, it is difficult to hold expenditures to our
present income. We realize, however, that members of
the public who use and own the banks ultimately pay
for our expenses. We are determined that the cost of
our operations be as low as possible. I am convinced
our 1979 budget is consistent with this principle.
In closing, I would like to reiterate the goals which
define our budget decisionmaking process and to
which our resources are allocated:
• Enforcing full compliance by national banks
with laws and regulations;
• Promptly detecting and seeking correction of
deficiencies in banks;

• Promoting fair and nondiscriminatory treatment
by national banks of their depositors, customers
and shareholders;
• Operating the Comptroller's Office openly, consistent with applicable law and maintenance of
public confidence in the banking system;
• Promoting maximum competition among banks,
consistent with safety and soundness;
• Requiring appropriate public disclosure by national banks of information, consistent with the
maintenance of public confidence and rights of
privacy;
• Identifying important trends affecting the national banking system and incorporating such
information into Comptroller policies and procedures;
• Recommending statutory changes to improve
the ability of the Comptroller's Office to carry
out its responsibilities in the interest of the public;
• Fostering maximum cooperation among federal,
state and other countries' supervisory agencies;
• Confining intervention by the Comptroller's Office in management decisions to the minimum
consistent with the protection of the public; and
• Continually planning and effecting improvement
in the Comptroller's internal management, policies and procedures and extending fair and
nondiscriminatory treatment to all employees of
the Comptroller's Office.

Remarks of John G. Heimann, Comptroller of the Currency, before the Assembly
for Bank Directors, Boca Raton, Fla., February 9, 1979
The historian Carl Becker stated: "The primary purpose of all government regulation of the economic life
of the community should be not to supplant the system
of private economic enterprise but to make it wcprk."
The vitality and stability of the American banking 'system since the depression confirm that the legal and institutional structure of banking regulation has been
largely successful—particularly when banking is compared with other regulated industries.
Yet, the banking industry, indeed the financial system, is undergoing fundamental change. The existing
content and structure of regulation have been called
into question. Taken together, the Community Reinvestment Act (CRA), the International Banking Act and
the Financial Institutions Regulatory Interest Rate Control Act (FIRA), enacted by the 95th Congress, represent the most massive change in banking law since
the Depression. Moreover, additional matters of fundamental significance will be considered by the present
Congress, including universal reserve requirements
and pricing of federal reserve services, reorganization
of the bank regulatory agencies, interest rate controls

236


on deposits (Regulation Q) which discriminate against
small savers, and review of restrictions imposed by the
McFadden Act on branching.
Notwithstanding this flurry of activity, the most profound changes are not occurring in the halls of Congress or the offices of the bureaucracy—but in the
marketplace where institutions and individuals vie for
profit. The entire landscape of competition in the delivery of financial services is shifting. More and more industries are engaging in face-to-face competition-in
the same markets and for the same customers.
Nowhere is this increased competition more evident
than in the provision of consumer financial services
such as savings deposits, longer-term retirement accounts, transaction accounts, residential mortgages
and consumer lending. For example, in New England
and New York state, all depository institutions are permitted to offer NOW accounts which are interest bearing transaction accounts, as of the third quarter of
1978, 37 percent of NOW account deposits in New
England were held by thrift institutions.
Competition for transaction account balances is also

coming from outside of the depository system. Money
market funds amounted to $10.7 billion at the end of
1978. Most of these funds allow investors to sell shares
by writing a check drawn on a demand deposit account maintained at a bank by the mutual fund. Merrill
Lynch offers a cash management account which permits customers to earn interest on margin accounts,
make purchases with a VISA card and write checks
against either cash balances or an overdraft line of
credit. And Sears has begun a pilot project, in conjunction with credit unions in Michigan and California,
which allows credit union members in those states to
pay for Sears' merchandise and make cash withdrawals by authorizing Sears to debit their share draft
account.
Competition for consumer loans is also intense.
Credit unions which held 4 percent of the consumer
installment loan market in the early 1950's held 17 percent of the market at the end of 1977. This growth has
largely been at the expense of the retailers and finance companies which have seen their market share
shrink from 52 to 30 percent over the same time period. Moreover, General Motors held 3.5 percent of all
consumer installment credit at the end of 1977, and
Sears held 2.8 percent.
More significant perhaps is the increasingly national
and international nature of the banking business. Of
the 300 largest banks in the non-communist world,
U.S. banks control 26 percent of the assets; Japanese
banks, 25 percent; and western European banks, 47
percent. There are 150 banks in this country with deposits over $1 billion, 1 percent of all U.S. banks,
that control 56 percent of the total banking assets. If
you combined all of the banking activities of the Bank
of Tokyo within the United States, it would rank as the
21st largest bank in the U.S. The activities of these
banks are by no means limited to a single locality,
state or country.
This flux in the financial system presents significant
opportunities and serious pitfalls. In the marketplace,
erosion of geographical restraints on competition, easing of restrictions on interest rates, more direct competition, easing of restrictions on interest rates, more direct competition among different providers of financial
services, etc., will benefit the public and lead to a
more efficient financial system.
Moreover, there exists an increasing consensus that
much governmental interference with financial markets
is inappropriate in light of current economic and technological realities. I have stated on a number of occasions my own commitment to minimizing governmental
intervention in private decisionmaking. I have spent
most of my professional life in the private sector, and I
believe in the marketplace as the best regulator of economic conduct. I am certain that these views are
shared by the vast majority of my colleagues. Nevertheless, I suspect that this is not the message you are
getting from Washington. I know there seems to be little relief from what must appear to be an endless
stream of regulatory requirements.
Reflecting this contradiction is the legislation passed
in the 95th Congress. Although I applaud much that is
contained in FIRA, the International Banking Act, and



the Community Reinvestment Act, these statutes will
impose significant new costs and restrictions. Some of
these costs may prove unwarranted.
How we approach the challenge of implementing
new law in a manner that is sensible, while reinforcing
progressive changes in the marketplace, will say much
about the future health and vitality of American commercial banking relative to its competitors, old and
new.
In this context of flux, we at the Comptroller's Office
have attempted to identify the basic principles of decisionmaking which will, as Becker suggested, "not . . .
supplant the system of private economic enterprise
but . . . make it work." We believe that the elements of
a progressive approach to bank regulation include:
• Reliance on competition among various financial intermediaries with the gradual elimination
of existing geographical and product market
demarcations which tend to protect competitors
rather than foster competition;
• Reliance on the pricing mechanism as the most
efficient allocator of financial resources and ultimate elimination of such restrictions as the prohibition of the payment of interest on demand
deposits and usury ceilings which tend to interfere with the efficient functioning of financial
markets;
• Reinforcement of and reliance on existing private institutional structures, such as the board
of directors, to perform functions which diminish
the need for governmental intervention;
• Vigorous actions to correct abuses by bank insiders;
• Targeting of supervision so that intervention in
the management decisions of soundly run institutions is minimized and scarce resources are
focused on the most serious problems;
• Reliance on disclosure of material information to
protect investors and ensure the effective functioning of financial markets;
• A willingness to tolerate individual bank failures
which result from the normal operation of market forces coupled with a willingness to
strengthen the already effective deposit insurance mechanism;
• Specific intervention when necessary to ensure
that bank customers have fair access to bank
services;
• Employment of the flexibility, expertise and resources of the private sector in dealing with our
nation's social problems; and
• Development of mechanisms of regulatory reform which prompt the revision or discard of
laws, rules and regulations when they have outlived their usefulness.
These principles reflect judgments that are perhaps
contradictory. On the one hand, we have fundamental
confidence in the pricing mechanism of the marketplace as the best allocator of resources and in the
quality of informed private decisionmaking generally.

On the other hand, it is clear that governmental intervention is sometimes necessary in a complex and interrelated society. The continued vitality of our society,
as well as our financial system, will depend on our
ability to resolve this apparent paradox. The basic elements I have outlined represent an attempt to suggest
such a resolution with respect to concrete questions of
regulatory policy that we must deal with daily.
With this framework in mind, I would like to discuss
specific areas in which we have applied or will apply
these concepts. By now, most of you will have taken
part in reviewing and approving your bank's Community Reinvestment Act statement. The Community Reinvestment Act arose out of congressional concern with
the "redlining" issue. The act reflects, in part, dissatisfaction by Congress with the manner in which the financial regulatory agencies have applied the concept
of "convenience and needs." The legislative history
clearly reflects Congress' view that the agencies had
not, in applying that standard, given proper attention
to the bank's record in meeting community credit
needs. In addition, the act seems to reflect the view
that inattention by some financial institutions to the
credit needs of local communities and especially low
and moderate income neighborhoods is responsible,
in part, for the decline of some of these communities.
Accordingly, the Community Reinvestment Act's
stated purpose is to require each financial institution
supervisory agency to use its authority when examining a financial institution to encourage it to help meet
the credit needs of its local communities. The act requires the appropriate agency to assess a financial
institution's record of meeting the credit needs of its
entire community and to take that record into account
in evaluating an application pertaining to a charter,
branch office or merger.
Faced with these statutory requirements, the agencies made certain fundamental choices consistent with
the principles I have outlined. The statute was vague;
critical terms like "community" and "credit needs"
were left undefined. No guidance was provided as to
when an application should be denied.
First of all, the agencies recognized the diversities of
both the communities and financial institutions of our
country by not attempting to establish arbitrary, inflexible definitions of "community" or "credit needs."
Rather, each institution is required to delineate its own
community apd to define in its CRA statement the
ways in which it proposes to meet the credit needs of
that community.
The agencies focused on the critical role of the
board of directors by mandating its role in this process
and by identifying the extent of the board's participation as a factor that will be considered in assessing the
bank's record for CRA purposes. Your role in this capacity is especially important because most directors
are not bankers and therefore bring a fresh perspective to this process.
Second, the agencies also adopted a flexible approach in addressing the absence of a statutory standard to be applied in assessing the bank's record for
CRA purposes. Rather than adopting quotas of types
of loans that would be considered "good" under CRA

238


or creating a regulatory straitjacket which would unreasonably constrain management discretion, the agencies identified a number of factors that would be relevant in evaluating the record, including:
(1) A bank's efforts to communicate with its community;
(2) A bank's offering of loans and investments
which help meet its community's credit needs
for housing, small business and community
development; and
(3) A bank's offering loans throughout its community on a nondiscriminatory basis.
In addition to these factors, it is explicitly recognized
that other activities could help meet local credit needs,
that a bank's abilities to meet credit needs are not limitless, and that safety and soundness considerations
must be maintained.
Two other points should be borne in mind as you
help your institutions address CRA.
First, what is important is not compliance with a series of technical/legal requirements but rather a bank's
good faith effort to keep itself aware of and sensitive to
the credit needs of the community, which it alone is
best equipped to meet. This concept of community
service is not new to bankers nor, I am sure, to you,
and its application should not prove troublesome.
Second, I would emphasize that while we believe
the approach we have chosen is a sensible one, which
will be neither expensive nor constrictive, it is by no
means written in stone. We have already implemented
a process for reviewing the effectiveness and efficiency of our approach, and we will not hesitate to
modify it or seek legislative changes where appropriate.
In describing our approach to CRA, I have outlined
an agency response that was essentially reactive.
More is required, if we are serious about restructuring
the framework of law and regulation to place greater
reliance on private decisionmaking and the market
mechanism, and less on restrictive government regulation. Concrete initiatives must be taken. Some of these
would require legislative action, such as simplification
of truth-in-lending, elimination of geographical restraints on expansion and relaxation of interest rate restrictions. Others may be accomplished administratively.
Our newly established Office of Regulations Analysis
will serve as the focal point for identifying and initiating
those aspects of our supervisory framework—
including regulations, interpretations, circulars and supervisory policies and practices—where changes can
and should be made to eliminate or reduce unnecessary regulatory burdens. In addition, the Office of Regulations Analysis will be involved in developing new
policies and regulations to assure that further regulation is justified and that the costs of various alternative
courses of action have been considered.
Recent call report changes and our new "Chinese
wall" regulation are examples of our initiatives in this
respect. Instead of adopting a very lengthy regulation
setting forth all the detailed procedures a bank would

have to follow to assure that important nonpublic information did not p^ss from a bank's commercial department to its trust department, we adopted a threesentence regulation which says, in effect, "Here is the
law; you establish procedures for compliance which
are appropriate for your type of operation." With respect to the call reports, we found that we no longer
used about 40 percent of the information submitted
from the 90 percent of the banks which have assets
under $100 million, so we simply deleted the requirement that such information be filed. We are currently
reviewing a number of other existing regulations, including investment securities rulings, real estate interpretations, Securities Exchange Act disclosure rules,
offering circular requirements, security devices reports
and annual reports to shareholders.
While we anticipate that review of existing regulations and reports will prove productive, we do not intend to stop there. We consider all policies and procedures to be fair game. For example, we have
concluded that our procedures and policies dealing
with bank chartering, branching and mergers are too
costly, too burdensome and too time consuming. And
in some instances, the policies we have pursued serve
to thwart rather than promote competition.

We intend to remedy this situation. I am pleased to
report to you today that we are committed to a thorough overhaul of our operations in this area. This effort
will involve, among others, our Office of Regulations
Analysis and Bank Organization and Structure Division
and will be directed by the Senior Deputy Comptroller
for Policy. Indicative of the importance we place on
this project and its priority, we are calling it the "Applications for Structural Activities Project," known by its
acronym, ASAP.
Certain policies are already being modified. For example, decisions in the coming months will reflect a
chartering policy that provides for greater ease of entry. Similarly, we will take steps to ensure that our policies and procedures pertaining to protested applications do not allow competing institutions to delay
applications where no substantial issues are raised.
My hope is that this project and others like it will
prove to be models of regulatory reform. In conclusion,
I would simply repeat my view that the marketplace is
the best regulator of economic activity and my commitment as a bank regulator to making that mechanism
work efficiently and effectively.

Statement of John G. Heimann, Comptroller of the Currency, before the Senate
Committee on Banking, Housing and Urban Affairs, Washington, D.C., February
28, 1979
We welcome the opportunity to testify on S. 332, the
Consolidated Banking Regulation Act of 1979, and to
address generally the reorganization of the regulation
of. financial services.
As Superintendent of Banks of New York, as Comptroller of the Currency and as Acting Chairman of the
Federal Deposit Insurance Corporation (FDIC), I have
had a unique opportunity to observe the operation of
this system.
Both as State Superintendent and as Comptroller, I
testified before the Senate Banking Committee regarding similar proposals. In the past, I have not favored
creation of a single federal agency which would regulate commercial banks. Instead I suggested a structure in which regulation and supervision of all federally
chartered financial institutions and their holding companies and affiliates would be centralized, with the
FDIC continuing to support a strengthened system of
state supervision. I continue to believe that evolution
toward such a structure is preferable to consolidation
of the commercial banking agencies.
Since I last testified, Congress has created the Federal Financial Institutions Examination Council under
Title X of the Financial Institutions Regulatory and Interest Rate Control Act of 1978 (FIRA). Congress acted
NOTE: The appendix to this statement was not included because of
space constraints. The appendix, which gives examples of joint efforts by bank regulatory agencies to achieve uniformity, is available
from other sources.



wisely in taking this step. The council provides a flexible framework within which financial regulatory reform
can occur in an orderly and reasoned fashion. Such an
approach recognizes both the realities and uncertainties of our financial system as well as the practicalities
of administering a regulatory process.
First, and quite simply, the realities of the current
market place demonstrate that, however correct historically, the singular focus of S. 332 on commercial
banks is out of date.
Second, further developments in both the market
place and the legislative arena are likely to blur distinctions among competitors. Because the shape of
these and other developments is yet unclear, we
should avoid a reorganization that will tend to be
viewed as the final rationalization of the regulatory
structure.
Third, that such a proposal would become permanent makes it all the more important that we fully evaluate and understand the disruptions and costs that
sweeping consolidation would entail at this time and
that we understand the benefits inherent in the existing
system that would be lost.
In short, an incremental process responsive to the
evolving realities of the market place is more desirable
and less costly and disruptive than a single, sweeping
reorganization.
I should emphasize that the Comptroller's Office is
not wedded to the existing structure. We are commit239

ted to regulatory reform through reorganization. Indeed, we have already begun to take certain steps,
such as the transfer of an existing division of the
Comptroller's Office to the FDIC, to achieve efficiencies in this manner, and we fully intend to continue to
do so through the examination council.
Before outlining in greater detail why an evolutionary
process through the examination council is preferable
to a single vast reorganization and suggesting the direction that I hope such a process would take, I will
focus on the realities of competition in the market
place for financial services. The business of banking,
or more accurately the business of providing financial
services, has changed radically in the last decade and
is continuing to change at an extraordinary pace.
While many of us are aware of the individual pieces of
the puzzle, we often fail to recognize fully the implications of change in the various financial markets. Certainly the current reality of competition is not that of
1937 when a study by the Brookings Institution originally proposed the creation of a single federal agency
to regulate all commercial banks.
The financial system that emerged from the Great
Depression consisted of distinct kinds of financial institutions, differing statutory powers and mandates, as
well as separate regulators. The activities and markets
of these institutions were segmented to a substantial
degree. Where one or more types of financial institutions offered the same service, it was usually within
distinct markets. Or, as was the case with savings deposits, commercial banks simply did not compete seriously with savings and loan associations, mutual savings banks or credit unions.
Since that time, the financial services industry has
undergone substantial change at both the national and
international level. No longer are markets for financial
services segmented and identified with a specific type
of financial institution. Commercial banks and thrift institutions are in head-to-head competition in many
areas; commercial banks and thrifts have entered markets of nondepository institutions and vice versa; the
gulf between large and small institutions has widened
considerably; domestic and international geographical
barriers to competition have eroded; and substantial
changes have occurred in the legal and regulatory environment. A few examples will underscore the extent
of this change.
From the end of World War II through 1977, the commercial banking share of the deposit market shrank
from 82 to 62 percent, while savings and loan associations and credit unions increased their share from 6 to
29 percent. Demand deposits, which represented 74
percent of commercial bank liabilities in 1948,
dropped to 32 percent in 1978, while time and savings
deposits increased from 25 to 51 percent. These figures demonstrate a fundamental realignment in the
provision of deposit services that occurred as a consequence of higher interest rates, the prohibition of interest payments on demand deposits and the Regulation
Q differential.
Thrift institutions have responded to increased commercial bank competition for savings deposits by competing for transaction balances through NOW ac
240


counts, telephone transfer accounts, billpayer
services, credit union share drafts and other ways of
directly accessing savings deposits for the purpose of
making payments.
Similar changes, although to a more limited extent,
are occurring on the asset side, especially at the state
level. Credit unions are increasingly involved in financing home mortgages as compared to their more traditional consumer finance role, while savings and loan
associations are offering credit cards and seeking additional consumer lending powers.
Commercial banks have offered products once almost entirely the domain of nondepository institutions,
including credit cards, mortgage banking, factoring,
leasing, consumer finance and other services. For example, commercial banks' share of the consumer installment credit market has increased since World War
II from 38 to 49 percent, while the combined share of
finance companies and retailers declined from 58 to
30 percent.
Nondepository institutions have invaded the deposit
markets of banks and thrifts. As of February 7, 1979,
money market mutual funds stood at $13.9 billion,
growing $3.1 billion in the 5 weeks since the beginning
of 1979. Merrill Lynch offers a cash management account which permits customers to earn interest on
margin accounts, make purchases with a VISA card
and write checks against either cash balances or an
overdraft line of credit. And recently, Sears, Roebuck
and Co. announced its intention to offer approximately
$500 million of $1,000 denomination medium-term
notes to its 26 million credit card holders.
Banks and thrifts have also developed methods for
raising funds from the money and capital markets,
such as mortgage-backed bonds and commercial paper, that compete directly with nondepository and nonfinancial institutions. For example, bank holding companies issue commercial paper under their own names
and then channel some of the funds back to their bank
affiliates. Recently, the Federal Home Loan Bank
Board announced approval for savings and loan associations to issue both mortgage-backed and unsecured commercial paper, thus providing savings and
loan associations with greater access to the national
money markets.
At the same time traditional distinctions among
types of financial institutions are becoming less clear,
the difference between locally oriented banks and
large national and multinational banks is increasing.
On the one hand, the local institution is often comparable to the specialty boutique. On the other, the conglomerate multinational is in effect a department store
chain for financial services. The operations of the latter
are more complex and sufficiently far-flung to span
many jurisdictions. For example, according to its 1977
annual report, Citicorp engages in commercial banking, mortgage banking, trust services, consumer finance, credit card, equipment leasing, factoring and
other services in 1,937 offices in 95 countries with total
assets amounting to $77 billion.
The 10 largest banking organizations in the United
States at the end of 1977 controlled nearly 30 percent
of the nation's commercial banking assets and oper-

ated 46 banks with 2,906 domestic branches, 1,895
foreign offices and 41 Edge Act offices, not to mention
numerous loan production offices and nonbanking
subsidiaries controlling another $8.2 billion in assets.
Of the 14,412 commercial banks at the end of 1977,
1,246, or 9 percent, had more than $100 million in assets.Collectively, these controlled 77 percent of commercial bank assets. Moreover, 8,700, or more than 60
percent of all commercial banks, have less than $25
million in assets and confine their services to their local
communities.
Geographical market barriers have disappeared to a
large extent in every area except consumer deposit
services, where the McFadden Act restriction on national bank branching imposes effective restraints. For
example, BankAmerica Corp. operates 13 subsidiaries, including FinanceAmerica which has 372 offices
in 39 states. And as I have already indicated, nationwide nonfinancial institutions not subject to McFadden
Act type restrictions are already casting covetous eyes
on consumer deposits.
As the geographical barriers to competition have
eroded, the distinctions between domestic and international banking systems have been, for all practical
purposes, obliterated. Of the 300 largest banks in the
non-communist world, U.S. banks control 26 percent
of the assets; Japanese banks, 25 percent; and Western European banks, 47 percent. The banking activities of these banks are by no means limited to a single
locality, state or country. As of 1978, 122 foreign banks
operated banking facilities in the United States with total assets of about $90 billion. This total represents the
combined assets of 123 agencies, 106 branches, 39
commercial bank subsidiaries and five investment
companies. For example, combined, the banking activities of the Bank of Tokyo in the United States would
represent the 21st largest bank in the country. Similarly, 141 U.S. banks have branches or subsidiaries
abroad with assets that totaled approximately $228 billion at year-end 1977.
At the same time that the marketplace for financial
services is reforming itself, the legal and regulatory
structure in which financial institutions operate has
been changed significantly. Legislation in the last 18
months, including FIRA, Community Reinvestment Act
and International Banking Act, involves the most massive change in banking law since the Depression.
Moreover, resolution of the Federal Reserve membership problem and serious reconsideration of Regulation Q and the McFadden Act hold out the possibility
of further and perhaps more fundamental change.
In the context of these changes, we believe that an
incremental approach to reorganization which does
not focus solely on commercial banks is preferable for
several reasons.
First of all, consolidation of the commercial bank
regulatory functions does not address the existing reality of financial competition. In addition, we are on the
threshold of changes that will have far-reaching implications for the future structure of the financial services
industry. For example, it is impossible to know the degree to which nonbanking firms such as Sears, Merrill
Lynch or American Express, which are poised on the



edge of traditional segments of banking markets, will
enter those markets. Similarly, it is clear that reconsideration of the role of Regulation Q will have serious implications for the health and role of the thrift industry. If
the asset and liability powers of thrift institutions are
expanded in the context of this consideration, they will
come into even more direct competition with commercial banks.
While one can argue that the adoption of S. 332
would not foreclose further modifications of the federal
financial regulatory framework in response to these
changes in the marketplace, history suggests that
wholesale reorganization of this type would be relatively permanent. In the face of flux that is occurring in
our financial markets, I believe that the creation of a
single regulatory agency which focuses solely on commercial banking ignores the reality of our financial system. This does not and should not mean that bold reorganization initiatives cannot occur in certain areas.
Rather, it means that such reorganization should occur
in an orderly, incremental fashion.
Many of the problems which have been identified in
the existing regulatory structure can be addressed administratively in the context of the examination council
or already have been addressed through the informal
processes of interagency coordination. It has been argued that consolidation would lead to economy and
efficiency of operation; that consolidation would eliminate certain frictions and practical problems, especially in the handling of distressed banks and in the
supervision and regulation of bank holding companies;
and, finally, that consolidation would result in a uniformity of approach and eliminate certain inequities.
Although substantial economies could not be
achieved by a reorganization of the bank examination
operation, efficiency can be improved if certain other
functions are centralized. We are already involved in
substantial steps in this direction.
For example, in December 1978 the FDIC and the
Comptroller's Office began exploring the feasibility of
merging the processing of call reports and other statistical reports which banks file routinely. These reports
are essentially similar for both national and state commercial banks. At present, detailed planning is in
process to effect such a merger in April. It is anticipated that the FDIC by virtue of assuming a larger volume of work will be able to achieve certain efficiencies. For example, rather than printing separately two
sets of forms and developing two sets of instructions,
only one will be required. Other efficiencies should
stem from greater flexibility in scheduling personnel to
handle processing of the various reports. Also, data
processing expenses will be reduced.
Further, our Office is exploring transfer to the FDIC
of our computer operations, and the Federal Reserve
System, the FDIC and this Office are cooperating in
developing a statistical monitoring system for all
banks. Additionally, under provisions of Title X of FIRA,
we are developing a joint training facility.
It has been argued that consolidation into a single
commercial banking agency would probably eliminate
some of the problems associated with communication
and coordination. Much has been done to alleviate
241

such problems in recent years. The appendix to this
statement provides instances where the agencies
have cooperated to achieve coordinated approaches
to problems. I am confident that much more will be
done within the framework of the examination council.
In the past, special attention has been paid to frictions and inefficiencies involving the supervision of
bank holding companies. Coordination and communication have improved significantly in this area. I am
hopeful that the council will be an effective vehicle for
further improvement until Congress can act to remedy
what I consider to be a serious flaw in the present regulatory structure.
It has also been argued that consolidation of bank
regulatory functions in a single agency would be desirable in that it would eliminate inequities and confusion
which flow from a lack of uniformity. In recent years,
the agencies have recognized that uniformity is highly
desirable in certain areas and have taken affirmative
steps to insure a uniform approach in policies and
practices.
In my judgment, the most notable achievements in
this area include:
• Implementation of a coordinated and uniform
approach to the Community Reinvestment Act,
a task which involved an enormous degree of
cooperation and effort on the part of the staffs
and principals of the agencies;
• Development of a uniform approach to country
risk evaluation;
• Development of a joint program to evaluate
shared national credits; and
• Issuance of uniform Regulation Z enforcement
guidelines.
At present, the staffs of the agencies are hard at
work devising regulations and procedures to implement FIRA and the International Banking Act, which
are uniform to the maximum degree possible.
In this regard, it should be noted that Title X of FIRA,
which provides for the Federal Financial Institutions
Examination Council, mandates that the council "establish uniform principles and standards and report
forms for the examination of financial institutions which
shall be applied by the federal financial institutions
regulatory agencies." Moreover, that "(t)he Council
shall make recommendations for uniformity in other supervisory matters, such as, but not limited to, classifying loans subject to country risk, identifying financial
institutions in need of special supervisory attention,
and evaluating the soundness of large loans that are
shared by two or more financial institutions." Based on
my experience during the past 18 months, I expect
that the agencies will move forward to implement these
requirements in an orderly and expeditious fashion.
As we move to encourage and achieve uniformity, it
is critical that we not lose sight of an important point.
One of the geniuses of the American political system is
its emphasis on checks and balances and the
fragmentation of the basis of decisionmaking. The wisdom of this principle is proved to me by the health,

242


creativity and competitiveness of our commercial
banking system. The history of this industry—
especially when contrasted with others supervised by
a single regulator—is why I have supported maintenance of a strong state banking system overseen at
the federal level by an independent FDIC.
The existence of other agencies engaged in the
same effort tends to produce better results over time. I
wish that I and the staff at the Comptroller's Office
were sufficiently smart and prescient to arrive at the
optimal solution to a problem immediately. But we are
not, and we do learn and borrow from our fellow regulators. Even where uniformity is ultimately the object,
as it was in the Community Reinvestment Act, often the
pull and tug of independent agencies leads to a far
better result than if a single agency approached the
problem.
In short, I am persuaded that former FDIC Chairman
George LeMaistre was correct when he stated:
. . . banking history demonstrates conclusively
that the existence of regulatory alternatives provides, in part at least, one of the mechanisms
which the regulatory reform movement seeks—a
means of self-adjustment and self-reform. In effect, something like a market mechanism may be
seen at work with good regulation driving out bad
over the long haul.
Illustrations of this point are legion. We are particularly proud of two fundamental innovations in our
Office's approach to bank examination. We believe
that our new bank examination procedures, which emphasize a qualitative review of a bank's condition and
management and rely heavily on the National Bank
Surveillance System—a computer-based data and ratio analysis system—represent an important advance
in the state of the art. An equally fundamental departure is our creation of a Multinational Banking Division,
which will supervise our largest and most complex
banking institutions. The establishment of what is, in
effect, a new region for the regulation and supervision
of the multinationals recognizes the reality that these
entities are fundamentally different from the great majority of the institutions which we examine and supervise.
Finally, in response to the argument that agencies
"compete" for constituents, I would simply note that I
have never suspected that a fellow regulator was motivated by such a concern. I am convinced that decisions which have been cited to support this proposition reflected legitimate differences over policy and the
law and not any effort for agency self-aggrandizement.
For these reasons, I have concluded that creation of
a single commercial bank regulatory agency is not responsive to the realities of either the market place or
the regulatory process. The examination council provides a flexible framework in which to go forward with
reform and reorganization of financial institutions regulation in an orderly and efficient manner. As I emphasized at the outset, we at the Comptroller's Office are
not wedded to the existing bank regulatory structure.
Indeed, a systematic review of that structure can and
should occur as part of an evolutionary process in

which concrete experience can be a guide. One can
describe an agenda for that review which is responsive to the realities of the marketplace and the practicalities of the regulatory environment. Some of these
items can be accomplished administratively. Others
will obviously require legislation.
First and foremost, we should move quickly to address the problem resulting from regulation of various
parts of a bank holding company system by different
agencies. It has been pointed out time and again that
this facet of the regulatory structure significantly interferes with our effectiveness in supervising either these
systems or the banks within them. The failure of Hamilton National Bank in Chattanooga, Tenn., is the most
graphic illustration of this point. Both the FDIC and the
Comptroller of the Currency are on record as favoring
resolution of this problem by transferring primary authority over the entire system to one agency. I would
hope that in the context of the examination council we
can come up with a legislative approach to this issue
that all the agencies can agree on and that Congress
will see fit to act on this proposal expeditiously. In the
meantime, I am hopeful that problems in this area can
be minimized through coordination and cooperation
within the council.
Second, if Congress does rationalize the subject of
holding company supervision and regulation, it may
also address whether the Federal Reserve System
should have a supervisory function at all. It has long
been argued that the system should not have this role
so long as it has sufficient information to implement
monetary policy effectively. Because of the concern
the Federal Reserve Board has expressed with respect to attrition from the system and its consequent
impact on monetary policy, any action in this direction
should await resolution of the Fed membership issue.
Third, we should eliminate the conflict, duplication
and overlap that result from the fact that both the
states on one hand and the FDIC and the Federal Reserve Board on the other hand supervise and regulate
state banks. I have indicated in the past my support of
plans which would involve withdrawal of the federal
presence on certification of the competency of the
state agencies.
I would note that the essence of this concept could
be implemented administratively by the FDIC. At the
same time, I should also note that skepticism has been
expressed as to the efficacy of the federal withdrawal
strategy. It has been argued that the federal government has the comparative advantage in the bank examination area and that the states should recognize
this and focus scarce resources on matters more
nearly of local concern, such as the enforcement of
consumer and civil rights laws and the enforcement of
state laws and their chartering functions. A compre-




hensive FDIC study of the relationship between state
and federal bank regulation is expected to be completed this summer.
Fourth, the Congress should also examine overlaps
that exist between the federal financial agencies and
other government agencies. As I have indicated, it
makes no sense to segment the regulation of a holding
company and its constituent banks. Yet, the banking
agencies are responsible for the enforcement of the
securities laws vis-a-vis banks while the Securities and
Exchange Commission is responsible for the enforcement of the securities laws vis-a-vis holding companies. This anomaly should be corrected.
Similarly, the present fragmentation and overlap in
the regulation of consumer credit at both the state and
federal levels surely can be rationalized in a way that
would achieve necessary protection with less cost to
society.
As I indicated earlier, commercial banks on one
hand and thrift institutions and credit unions on the
other are increasingly coming into direct competition.
This phenomenon may be accelerated if Congress
and the agencies move seriously to phase out Regulation Q. If the trend toward increased direct competition
continues, logic would favor the eventual consolidation
of regulation of all federally chartered providers of financial services. My own experience in New York and
at the FDIC strongly suggests to me the benefits of an
agency which regulates different types of financial institutions.
Finally, we must ultimately address the fact that institutions that are not among traditional deposit-taking intermediaries are increasingly engaging in functions
which might well be characterized as "banking" functions. To the degree that institutions engage in like
functions, both the public interest and equity among
competitors would seem to dictate that they be regulated equally. This may very well suggest a role for the
financial regulators vis-a-vis some entities which are
not commonly thought to be subject to their jurisdiction. An alternative approach might be to deregulate
that function. For example, I certainly favor the phasing
out of Regulation Q rather than the imposition of interest rate restrictions on money market funds.
In conclusion, I would simply reiterate what I have
already stated. Reform in the regulation of financial institutions is not merely desirable but essential. To
achieve the intended result, however, financial reform
must be reasoned and orderly. And, most important, it
must address the realities of the marketplace and not
definitions and conceptions of another era. So long as
we are open-minded and diligent in our commitment to
regulatory reform, the examination council can and will
provide a convenient and flexible framework for the
progressive evolution of financial regulation.

243

Remarks of John G. Heimann, Comptroller of the Currency, before the
Government Research Corporation, London, England, March 26, 1979
"Banking across state lines—should it develop? Will
it develop?" As a title this is a bit deceiving. In the
United States, interstate banking is for all practical purposes already a reality. The question is not should or
whether we will have interstate banking, but how we
will balance competing interests to conform law and
regulation to the realities of the marketplace.
The aggressiveness of competitors in the marketplace has brought this issue to the forefront and raises
the broader problem of the appropriateness of geographical restraints on competition, both in the United
States and throughout the world. In this, as in other
areas, government has the choice of responding in an
open and progressive way that will facilitate competition and private decisionmaking or of reinforcing interference with free choice in the marketplace.
I believe strongly in a free and open system of competition among the providers of financial services at
the local, national and international levels. Accordingly, geographical restraints on competition should
over time be eliminated. At the same time, I recognize
that elimination of the artificial barriers that define markets raises fundamental questions that must be addressed to ensure the long-term health and stability of
our domestic and international banking system.
The business of banking or, more'accurately, the
business of providing financial services has changed
radically in the last two decades both domestically and
internationally and is continuing to change at an extraordinary pace. While many of us are aware of the individual pieces of the puzzle, we often fail to recognize
the full implications of change in the various financial
markets. Thus, before focusing specifically on interstate banking in the United States, it is appropriate to
place this subject in the larger context.
The financial system that emerged in the United
States from the Great Depression consisted of distinct
kinds of financial institutions, differing statutory powers
and mandates, as well as separate regulators. Legislation enacted during this period sought to protect and
insulate financial institutions against failure and was
essentially anticompetitive—the first order of priority
was the preservation of existing institutions. Where one
or more types of financial institutions offered the same
service, it was usually within distinct markets or, as
was the case with savings deposits, commercial banks
simply did not compete seriously with savings and
loan associations, mutual savings banks or credit unions. In effect, both product and geographical markets
were segmented by state and federal law as well as by
custom.
State laws govern branching within the state and
generally prohibit branches by banks from outside the
state. This applies even if several states are within
what we call a standard metropolitan statistical area,
or market, such as the greater metropolitan New York
area which is comprised of New York City, neighboring
New York counties, northern New Jersey and southern
Connecticut.
244



In 1927, the U.S. Congress passed the McFadden
Act, which applied these state laws to nationally chartered banks—affirmatively permitting branching but
generally limiting branch locations to those permitted
to state banks. Hence, branching across state lines by
a national bank was generally prohibited. With the increased importance of multibank holding companies,
Congress chose to apply the principle of the McFadden Act to holding companies through the Douglas
Amendment to the Bank Holding Company Act. This
amendment prohibits acquisition of a bank in any state
other than that in which it has its principal operations
unless specifically authorized by the state in which the
bank is located. This all sounds remarkably complicated, and it is.
In addition, a host of other laws serve to define the
product markets in which financial institutions can operate. These statutes define the powers at the state
and federal level for commercial banks, thrift institutions and credit unions. By segmenting the geographic
and product markets, these laws resulted in a remarkable number of financial institutions in the United
States. There are over 42,000 depository institutions,
including 22,000 credit unions, 5,300 savings and loan
associations and mutual savings banks, and almost
15,000 commercial banks. These institutions range in
size from the smallest credit unions with assets of less
than $5,000 to the largest U. S. bank, Bank of America,
with assets expected to reach $100 billion in the near
future.
Although most of these laws remain on the books
and some remain effective in isolating certain markets,
many of the resulting artificial barriers have been
eroded by the solvency of competition.
Large money center banking organizations have expanded their operations to a national level to serve the
growing needs of their customers. For example,
BankAmerica Corp. now operates 13 subsidiaries, including Finance America which has 372 offices in 39
states. Through local subsidiaries, loan production offices and Edge Act offices, the large U. S. banks can
now reach almost every banking market except retail
deposit-taking on a nationwide basis. And as our large
banks fund an increasing percentage of their liabilities
through the purchase of funds, dependence on retail
deposits is diminishing, thereby lessening the restraints that the interstate branching prohibition places
on fund raising by large banks.
A similar erosion has occurred with respect to the
barriers which segment financial product markets.
Commercial banks now offer products once almost entirely in the domain of nondepository institutions such
as credit cards, mortgage banking and consumer finance. Thrift institutions now compete for demand deposit balances through hybrid interest-paying accounts such as NOW accounts and bill payer services.
Nondepository institutions which have nationwide
operations have also invaded the deposit markets of
banks and thrifts. Merrill Lynch now offers a cash man-

agement account which permits its customers to earn
interest on margin accounts and write checks against
either cash balances or overdraft lines of credit. Sears,
the country's largest retailer, recently announced its intention to offer $1,000 denomination medium-term
notes to its 26 million credit card holders across the
country. These notes are clearly substitutes for the medium-term certificates of deposit offered by banks and
thrifts. Holders of American Express cards are able to
obtain cash advances across the country through
automated money machines. Money market mutual
funds, which are available to individuals nationwide,
offer share redemption by both telephone and check.
These funds grew by almost 180 percent last year and
rose by more than 40 percent in the first 2 months of
this year.
The breakdown of geographic barriers within U.S.
banking markets has been paralleled in the international financial markets. In the 1960's, one of the most
remarkable phenomena was the rapid expansion of
U.S. banking as the institutions followed their customers abroad. In the early 1960's, the annual flow of
direct U.S. investments abroad exceeded foreign investments into the United States by more than nine
times. Between 1960 and 1969, the number of foreign
branches of U.S. banks quadrupled from 124 to 460.
This represented a remarkable increase in competition
in a number of countries in which local banks had long
maintained a monopolistic position. This phenomenon
has continued in the 1970's, with U.S. banks' expansion supplemented by a similar growth of the international activities of non-American banks.
Non-U.S. banks have become a competitive force
not only in the international financial markets but also
in the United States. Whereas 104 U.S. banking institutions with assets totaling $24 billion were controlled by
foreign banks in 1972, by 1978, there were 273 institutions with assets of $90 billion. These banks have to a
large extent followed their multinational clients' recent
investments into the United States.
Direct investment in the United States from abroad
in 1977 was almost nine times the 1967 level. In this
sense, these banks have followed the same pattern of
international expansion as U.S. banks did in the previous decade. But now they are seeking to compete
directly with U.S. banks for business of U.S. corporations. For example, some sources calculate that foreign banks in the United States now account for approximately 20 percent of all domestic commercial and
industrial loans extended by the 300 largest banks in
the United States. Japanese banks alone control over
62 banking institutions in the United States, with assets
totaling over $42 billion—nearly half of the total foreign
ownership. They are followed by Canadian banks,
which control 32 institutions and $13 billion in assets.
Foreign banks in the United States also took advantage of the absence of federal restriction prior to the
passage of the International Banking Act of 1978 to establish operations in near-banking activities not open
to U.S. commercial banks, as well as offices in more
than one state. As of May 1977, 23 foreign bank parent
companies operated branches, subsidiaries or affiliates in three or more states.



The original impetus for the foreign banking movement to the United States was the movement of foreign
corporations to the United States. But there are additional forces behind this reversed migration. These
banks desire dollar deposit bases to help fund their
Eurocurrency operations. And, of course, the size and
growth potential of the U.S. economy is also attractive
to non-U.S. interests. Non-U.S. banks are now turning
their attention to expansion in the U.S. retail banking
market.
The most telling manifestation of foreign competition
for U.S. retail banking business is the recent growth in
actual and proposed acquisitions of U.S. banks by foreign institutions. Since 1974, several major international banks, including Lloyds Bank, Fuji Bank and the
European-American group have enlarged their American operations in this fashion. At the present time, five
proposed acquisitions are under consideration by federal and state banking authorities. They include acquisition of National Bank of North America, a $4.4 billion
bank, by National Westminster Bank; Union Bank, with
$5 billion in assets, by Standard Chartered Bank Ltd.;
and Marine Midland, the largest of the three with over
$14 billion in assets, by Hong Kong and Shanghai
Bank. The latter two represent acquisitions of extensive branch networks in the country's two most populous states: California and New York. Also pending are
applications by the Bank of Montreal to purchase 89
branches of the Bankers Trust Company in New York
City and another by Algemene Bank N.V. to purchase
La Salle National Bank of Chicago.
The impetus behind all of these developments has
not come from regulators or legislators. Rather, it has
come from competitors vying for advantage in the marketplace.
However, these forces also increase the likelihood of
governmental action. For example, the increasing
presence of foreign banks in the United States led to
the passage of the International Banking Act of 1978.
This law applied the principle of national treatment to
foreign banks in the United States. Implementation of
the principle of equality of competitive opportunity resulted in some curtailment of the previously unrestricted activities of foreign banks. For example, the
act restricted future interstate branching by foreign
banks operating in the United States to a rough parallel with what Congress conceived to be market opportunity available to domestic banks. However, the act
also explicitly recognized the need for a thoroughgoing reassessment of the McFadden Act as applied to
all banks and directed the administration to conduct
such a review.
Certainly the increasing pace of foreign takeovers of
U.S. banks has assured that this will be a principle
focus of the study. For U.S. banks, one of the major
concerns was expressed by M. A. Schapiro and Co. in
a recent publication of the Bank Stock Quarterly. Under present U.S. law, it is noted: "Major opportunities
in U.S. banking law are effectively reserved for foreign
banks only, since they are free to make acquisitions of
banks in the United States that are foreclosed to domestic banking." Thus: "A bank with headquarters in
Hong Kong can acquire a New York bank, but a bank
245

with headquarters in San Francisco cannot . . . no underlying economic realities can justify (this anomaly)."
Congress has indeed recognized the need for fairness in any openly competitive market as envisaged
by the International Banking Act. This law requires the
federal branches of foreign banks to have generally
the same duties, restrictions, penalties, liabilities, conditions, limitations, as well as rights and privileges as a
national bank. On the other hand, Congress also expected that U.S. banks should receive national treatment in their foreign operations. To determine what
treatment U.S. banks are presently receiving abroad,
the International Banking Act also required a study of
foreign treatment of U.S. banks.
In addition to the McFadden and foreign treatment
studies and the foreign acquisition issue, other developments in the judicial, legislative and regulatory
arenas are likely to stimulate constructive change. The
Federal Home Loan Bank Board recently proposed allowing federally chartered Washington, D.C.-based
savings and loan associations to branch across state
lines into Maryland and Virginia counties in the Washington metropolitan area. Moreover, a number of
states, including Illinois, Washington and Minnesota,
have proposals under consideration which would liberalize branching laws.
In the context of these developments, we must seriously address the phasing-out of legal constraints on
geographical bank expansion in the United States by
domestic or foreign concerns. Such restraints create
inefficiencies by forcing banks to devote resources
seeking ways to circumvent these barriers. Will the
erosion of barriers be recognized in our banking legislation? Or will these restrictions be allowed to wither
away, as they are certain to do, in an uncontrolled
fashion that could cause substantial disruptions? For
my own part, I prefer the former course in order to facilitate constructive change.
The phasing out of these restrictions might involve a
number of elements. First of all, Congress should consider permitting branching for all federally insured institutions within natural market areas such as metropolitan areas. This concept was reflected in a bill
proposed in the last Congress by Senator Mclntyre
which would have allowed banks to establish electronic funds facilities across state lines within their natural market areas. At the very minimum this should be
allowed, as the Washington, D.C, experiment of the
Federal Home Loan Bank Board goes forward.
Secondly, consideration should be given to either
the repeal or some modification of the Douglas
Amendment, which in effect prohibits multibank holding companies from acquiring out of state banks.
Many states have moved from a unit banking structure
to statewide branching with the multibank holding
company as an interim step. A phasing in of interstate
banking through multibank holding companies provides a reasonable approach to the ultimate elimination of geographic restraints, while simultaneously permitting an equitable adjustment for ownership interests
in the changed competitive framework.


246


For example, the Douglas Amendment might be
amended to provide that a bank holding company
could acquire another bank in a state contiguous to
the holding company's home state; that a holding
company could acquire another bank within a certain
region; that a holding company could acquire a limited
number of banks in other states; or that a holding company could acquire another bank in a market that was
significantly concentrated. Certainly, at the very minimum and in order to facilitate the least disruptive consequences of bank failure, the Douglas Amendment
should be amended to provide for interstate acquisition in a failing bank situation.
Finally, I believe that we should address the important federal policy question raised by state laws whose
restrictions serve to create what in effect are monopolistic or oligopolistic effects in certain markets. In recognition of these phenomena, the Supreme Court,
speaking through Justice Stewart, in 1975 characterized restrictive branch banking statutes as a restraint
of trade which would be a "per se" violation of our antitrust laws but for the fact that the restriction is governmentally rather than privately imposed. I believe that
where it is demonstrated that restricted markets serve
to disadvantage customers in those markets, that federal law should override state law and allow de novo
entry.
I believe very strongly in a free and open competitive system on the national and international levels.
Governmental intervention in the marketplace should
be tolerated only where clearly warranted. However, I
recognize that there are fundamental concerns both
within countries and within regions in countries that
must be recognized. This, at times, will necessarily involve a political balance between our interest in competition and local concerns. Thus, in striking the balance, we must make certain that concerns which do
lead us to impose restrictions on competition and indeed legitimate and overriding.
In addition, as a bank supervisor, I am particularly
sensitive to the special problems posed by the entry
into the U.S. market of a foreign operation, whether by
acquisition or de novo. For example, different national
laws and customs regarding disclosure of information
which we require from our domestic institutions may
make it difficult to permit entry at times. Moreover, the
inability to obtain the quantity and quality of pertinent
information about the related activities of the foreign
owner and the absence of ready jurisdiction over controlling principals gives further cause for concern.
Finally, we must recognize that as we permit free
and open competition we must be careful to avoid the
concentrations of economic power that often go with
size.
In conclusion, I would emphasize that these concerns can and should be addressed. These changes
which are on us are profound. As such, they afford the
opportunity for governmental action which is constructive and will be of substantial benefit to our financial
systems. I am hopeful that we will respond to this challenge.

Statement of John G. Heimann, Comptroller of the Currency, before the
Subcommittee on Financial Institutions Supervision, Regulation and Insurance of
the House Committee on Banking, Finance and Urban Affairs, Washington, D.C.,
April 5, 1979
I welcome the opportunity to present the views of the
Office of the Comptroller of the Currency on H.R. 2515.
This testimony does not necessarily represent administration policy. H.R. 2515 provides for the temporary
preemption of state usury ceilings on business and agricultural loans of $25,000 or more until January 1,
1981, and establishes a ceiling 5 percentage points
above the Federal Reserve discount rate on 90-day
commercial paper. H.R. 2515 is essentially the same
as Public Law 93-501, which was enacted on October
29, 1974, to provide temporary relief from state usury
ceilings for financial institutions—principally those in
Arkansas, Montana and Tennessee. That law expired
on July 1, 1977.
Problems stemming from arbitrarily imposed usury
limits are not new. When market interest rates are
above usury ceilings, low-income borrowers and
higher-risk borrowers generally have been unable to obtain loans from commercial banks or other financial institutions, and credit has flowed to markets not subject
to usury ceilings. This has occurred during every period of high interest rates over the last 15 years. Many
states have revised usury statutes in response to market realities, but some have not or could not because
usury ceilings were mandated in their constitutions.
Since 1974, Tennessee has amended its constitution
to grant the state legislature discretion to establish
usury ceilings; Arkansas has not, although a constitutional convention has been convened.
As New York State Superintendent of Banks, I testified on the subject of usury ceilings before the New
York State Assembly in 1975, which was considering
revision of the state usury limit that applied to conventional mortgage loans. I stated:

stitutions and state economies were all adversely affected.
H.R. 2515 is an example of a measure which deals
with today's financial realities, but it is only a partial
stop-gap measure. It is tailored to respond to the
present situation in Arkansas. The constitutionally mandated 10 percent usury ceiling in Arkansas is restricting the flow of credit into the state's financial markets.
Interest rates in many national markets exceed
Arkansas' 10 percent limit. For example, rates on
mortgages have recently risen to over 10 percent, and
the prime lending rate at most banks is now over 11
percent. Although Arkansas has convened a constitutional convention and a new usury provision is being
drafted to provide greater flexibility, the new constitution will not be presented to voters until November
1980. Thus, to alleviate some of the immediate problems facing lending institutions in Arkansas, we support prompt adoption of H.R. 2515.
We believe, however, that the time has come to reconsider whether usury laws, generally, serve a useful
purpose in our society.

A usury ceiling is not supposed to be a form of
price control. It should function solely to protect
the financially weak or unwary borrower from paying an exorbitant rate of interest; that is, to prevent
what amounts to extortion, or cupidity. To use it to
control interest rates in free capital markets is only
to guarantee that money will not be generally
available for home finance.

Perhaps a major reason that usury laws have persisted is that they are intended to protect small- and
low-income borrowers from unscrupulous money
lenders and to limit the power of lenders to charge
whatever interest rate they want. These goals are important, but usury laws have a poor record of accomplishing them. Indeed, usury laws have had unintended and adverse effects on borrowers, financial
institutions and the public-at-large. This suggests that
means of obtaining these goals other than usury ceilings should be pursued.
Restrictive interest rate limitations have closed off
conventional credit sources to high-risk, generally lowincome borrowers. When lenders are unable to charge
rates sufficient to yield a reasonable rate of return, they
generally stop lending to high-risk borrowers. Good
risks may also be unable to obtain credit because the
cost of making small loans exceeds usury ceilings.
Both groups of borrowers may either forego obtaining

Protection of weak and unwary borrowers from unscrupulous money lenders has been an objective of
usury laws since Biblical times. In the U.S., usury ceilings have had a long history and have been supported
by some as a way of guaranteeing cheap credit to borrowers. Constitutional and statutory usury ceilings seldom impinged significantly on the lending activities of
legitimate institutions until recent times. However, with
the advent of inflation, various free market-determined
interest rates have frequently exceeded usury ceilings.
In those states where statutes were not changed to reflect market realities or whose constitutions prevented
change, individual borrowers, businesses, lending in


Usury: Goals vs. Impacts

Evidence collected over several years overwhelmingly indicates that elimination of restrictive usury limits
would be in the public interest. (A summary of evidence accumulated in various studies is contained in
the appendix.*) Generally, usury laws:
• Fail to accomplish their desired objectives,
• Have an adverse effect on production and employment, and
• Distort allocation of credit among markets and
among states.

* The appendix to this statement was not included because of
space constraints. The appendix is available from other sources.

247

credit, go to loan sharks where loans are available
above usury rate limits or seek nonmarket sources of
credit such as family or friends. These conclusions
have been documented in several studies of consumer
finance companies, commercial banks and mutual
savings banks. Similar studies of new automobile,
mortgage and personal loan markets offer the same
conclusions. The results are consistent—low-income
consumers are denied access to conventional credit
when market rates exceed usury ceilings.
Interest rates on home mortgages have been the target of usury limitations in several states. New York
state is a primary example. From October 1973 until
the end of 1978, the state had an 81/2 percent limit on
conventional home mortgages. Prior to 1973, the maximum rate was even less. But this law did not and
could not prevent mortgage lenders from obtaining
market rates for their investable funds by making outof-state loans and other kinds of loans not subject to
the ceiling on mortgages. For example, between 19661976, when mortgage rates generally were frequently
above the New York ceiling, the amount of out-of-state
mortgages held by New York mutual savings banks
averaged 48 percent. Other evidence suggests that
when national mortgage interest rates rise above usury
ceiling rates construction activity in states with restrictive rates declines significantly. These observations
clearly indicate that placing restrictive limits on mortgage rates fails to provide for the public's housingrelated credit needs.
Firms which must operate in markets subject to
usury restrictions feel the impact on both costs and
revenues. In the consumer finance industry where rate
restrictions abound, low-rate ceilings tend to result in
fewer and larger loans because credit is allocated to
low-risk consumers and because larger loans are less
costly to make. When low legal loan size limits are
combined with low ceilings on interest rates, the number of loans increases, but low-income, high-risk customers still find it difficult, if not impossible, to obtain
credit. Instead, good risk customers are forced to
"double-up" by acquiring costly multiple loans to get
the amount of credit they desire.
The cost of making small loans to consumers, even
good-risk customers, can be considerable. For example, consider a 1-year, $1,000 consumer installment
loan with 12 monthly payments. The 1977 Functional
Cost Analysis of average banks compiled by the Federal Reserve System estimates that the cost of making
and servicing such a loan is $130.68. This cost includes $41.35 to process the loan application, $34.92
to collect and process 12 payments, $49.76 to cover
the cost of funds and $4.65 to cover the average expected loss on loans of this type. To break even, the
bank must charge about a 13.1 percent interest rate.
The cost of making and servicing a 1-year $500 loan
with 12 payments would be $103.47, or 20.7 percent.
Longer-term or larger loans are less costly to make.
Thus, it is not surprising that financial institutions in
states with restrictive usury ceilings are reluctant to
make small and short-term loans.
Usury limits have also had adverse effects on the
economies of certain states. For example, one study

248


shows that Tennessee's economy grew at a faster rate
than the national economy except when market interest rates rose above the state usury ceilings. At that
point, Tennessee's economy slowed substantially. The
same study calculated that between 1974-1976, the
annual loss in production averaged $150 million, the
annual loss of jobs averaged 7,000, the annual loss of
retail sales averaged $80 million and the annual loss of
assets in financial intermediaries averaged $1.25 billion.
Because usury laws are regulated by each state,
variations in usury rates distort the geographic distribution of credit. This is apparent from the types of financial institutions which exist in various states. For
example, Arkansas with its 10 percent usury limit has
few consumer finance companies. Because credit is
an essential ingredient to commerce, restrictions that
limit its availability, such as usury ceilings, tend to
dampen economic growth. This occurred in Missouri
from early 1973 to early 1974 when the mortgage ceiling was 6 percent. New mortgage loans at Missouri
savings and loan associations declined 37 percent
compared to a 6 percent decline in neighboring
states. The usury limit was raised in 1974.
Arkansas offers another example of distortions created in credit markets by restrictive usury rates. In the
Texarkana region, there are distinct differences between the types of firms located on the Texas side of
the city and those on the Arkansas side. There is considerably less retail trade on the Arkansas side despite
the approximately equal distribution of population between states. The majority of automobile dealers, appliance stores, furniture stores and other businesses
that rely on consumer credit has moved to the Texas
side of the city. Clearly, inefficiency and inconvenience
result from the locational patterns created by
Arkansas's usury ceiling.
The inescapable conclusion to all of this, I think, was
stated well 115 years ago by the first Comptroller of
the Currency, Hugh McCulloch, in his initial report to
Congress:
Where money is abundant it is cheap, where
scarce it is dear; and no legislation has been able
to control the effect of this general law.
Timeliness for Change

The call for market-responsive lending rates is not
new. Hugh McCulloch took issue with the caprice of
usury laws in his 1864 report, citing the "embarrassment" caused to interstate commerce by the "different
and frequently changing legislation of the States in fixing the value of the use of money."
Today, in the few states that have adopted the Uniform Consumer Credit Code, nonconsumer related
loans are free from usury ceilings. Other states have
chosen not to control interest rates on specific categories of loans. Furthermore, almost every state permits
corporate loan rates to be fixed without restriction.
Nevertheless, usury laws continue to vary on different kinds of loans from state to state. While appeals for
comprehensive reform have been heard from some
quarters through the years, the rule has always been
to place reliance on the individual states to respond to

changing economic needs. But the reality is that our
economy has become national in scope, and no state
legislature acting alone has the power to bring about
change on a national scale.
Legal restrictions that inhibit credit flows are becoming less and less effective. However, the impact on local communities, individuals and businesses can still
be quite severe. When left to itself, our market-based
economy generally attunes itself to the public interest
on a local, state or national level, as the situation dictates. Where a problem transcends political boundaries and the states lack the capacity to devise an appropriate solution or find it difficult to adopt consistent
and uniform approaches, federal involvement may be
the best way of dealing with the problem.
The federal Truth-in-Lending Act is a good case in
point. Disclosure is an important way of protecting the
unwary and the weak. The annual percentage rate and
finance charge disclosure requirements provide a uniform basis nationwide which borrowers can use to
evaluate the cost of credit. While many express concern about the regulatory burden that has accompanied truth in lending, few would deny that it has
brought about uniform and consistent disclosure that
has benefited borrowers.
Responses to Usury Limits

It is in this spirit that we propose that Congress consider revising federal law to eliminate usury ceilings
and, in doing so, return rate-setting to its proper place
in the competitive credit markets. Such action would
recognize existing market realities and result in substantial public benefits. However, in moving toward the
elimination of usury limits it is important that the objective of protecting weak and unwary borrowers from unscrupulous lenders also be met.
Ten years ago, in testimony before the Legislature of
the Commonwealth of Massachusetts on the Uniform
Consumer Credit Code, Senator Paul Douglas stated:
I strongly endorse the Code's attempt to foster
meaningful price competition on credit charges
through uniform rate disclosure and a policy of
free entry. To the extent feasible, rates on consumer credit transactions should be set by market
forces rather than state legislatures. However, in
today's credit market certain barriers to competition blunt the impact of market forces. Price competition is difficult because of the lack of meaningful rate disclosure. Hopefully, the Truth-in-Lending
Act will help to solve this part of the problem.
But even if all creditors disclose the true annual
rate on consumer credit, effective competition is
[still] hampered by barriers to entry.
We believe that uniformity of principle and consistency of regulation in matters of credit is long overdue.
Much can be learned about the advantages to interstate commerce and consumer protection which have
been achieved through nationwide adoption of the
Uniform Commercial Code. Other model acts hold similar promise as they gain more widespread acceptance among the states.
The Uniform Consumer Credit Code deserves par


ticular mention. Drafted under the aegis of the National
Conference of Commissioners on Uniform State Laws,
the provisions of this code are grounded in the assumption that consumers are protected best when the
cost of credit is determined by competition in the marketplace subject to certain minimal controls. Since garnering the approval of the National Conference and
the American Bar Association on its completion in
1968, the code has been adopted by only 11 states.
With response lagging, its intended purposes have yet
to be realized.
So lacking in consistency is the present environment
that usury laws not only differ from state to state, but
they differ, as well, from bank to bank. National banks
operate under the federal usury statute (12 USC 85),
which appears to subject them to state limits. However, the rule, originated in 1863 as Section 30 of the
National Bank Act, is not quite so simple.
The U.S. Supreme Court was first asked to interpret
Section 30 in 1873 in the Tiffany case. That landmark
decision held that Congress intended the statute to
give "advantages to national banks over their state
competitors."
Congress created an even greater advantage in
1933 when it enacted the current provision entitling national banks to elect to peg interest to the Federal Reserve discount rate in lieu of the applicable state limit.
The principal sponsor of that amendment, Senator
Glass, argued persuasively that when the discount
rate exceeded the state interest rate ceilings, national
banks had to be the instrumentalities to permit businesses to borrow money to avoid possible collapse.
This past December these advantages were again
reaffirmed as the Supreme Court echoed the words of
Tiffany. In the Marquette National Bank case, perhaps
its most significant decision on usury since 1873, the
court held that the law allows a national bank to provide credit anywhere, in any state, subject exclusively
to the interest rate ceiling of its home state or the alternative formula in the federal statute.
In our highly integrated financial system, interstate
transactions are already a commonplace occurrence.
The justices in Marquette openly acknowledged that
the "exportation" of interest rates significantly impairs
the ability of states to enact effective usury laws.
Laboring under the weight of this expanding body of
case law and caught in the midst of emerging new economic realities, usury ceilings are increasingly inexpedient. The challenge now is not to roll back the advances made by national banks but rather to
recognize the urgency of the situation and to work toward the removal of artificial credit constraints on financial institutions. In this effort, we must be mindful,
as well, of the legitimate concern for the small, financially weak borrower who may fall prey to disreputable
lending practices. In those parts of the country where
credit markets are not yet reasonably competitive, the
need to safeguard the rights of those most vulnerable
is pressing.
The time is ripe for change. If we do not soon release our financial institutions from the grip of antiquated and labyrinthine laws which restrict competi249

tion, we are condemning them to a handicapped role
in the marketplace. In our rapidly changing financial
and economic environment, geographic barriers to entry, interest rate ceilings on deposits and usury laws all
limit the ability of depository institutions to compete effectively with nondepository institutions which are not
similarly restricted and which are increasingly offering
the same financial services. We believe that a competitive marketplace in which all providers of a financial

service can compete on an equal footing is a desirable
goal to pursue and that we should proceed to phase
out in an orderly manner those restrictions that impede
attainment of that goal.
Federal law can and should be used to help achieve
this objective. The Comptroller's Office stands ready to
assist this subcommittee as fully as possible in carrying forward this most important effort.

Statement of John G. Heimann, Comptroller of the Currency, before the
Subcommittee on Financial Institutions of the Senate Committee on Banking,
Housing and Urban Affairs, Washington, D.C., April 11, 1979
I am pleased to have the opportunity to present the
views of the Office of the Comptroller of the Currency
on S. Concurrent Resolution 5, S. Resolution 59 and on
deposit rate controls generally and to commend this
subcommittee and its Chairman for the timeliness of
these hearings.
As Superintendent of Banks of New York, Comptroller of the Currency, Acting Chairman of the Federal Deposit Insurance Corporation and member of the Board
of the Federal National Mortgage Association, I have
observed the consequences of deposit rate controls
on depository institutions, on the financial system and
on the economy. This testimony reflects that experience. It does not necessarily represent Treasury Department or administration policy. The administration is
developing recommendations based on the work over
the past year of the Interagency Task Force on Deposit
Rate Controls.
As New York State Superintendent of Banks, I also
voiced concern over the inequity of deposit rate controls. In March 1976 testimony before the House Banking Subcommittee on Financial Institutions, I stated
that the:
saver of small means has been i^nf airly forced to
subsidize the borrower. Indeed, the saver of
means and financial sophistication has not been
victimized at all. He moves his money as interest
rates change to take advantage of the best investment opportunities. It is the saver with a few hundred dollars or the saver who has the wherewithal
but is timid or too unsophisticated to make direct
investments who is victimized.
Furthermore, the Comptroller's Office has been a
frequent critic of deposit rate controls. Former Comptroller James E. Smith, testifying before the Financial
Institutions Subcommittee of the Senate Banking Committee in November 1973, noted that deposit rate controls place financial institutions at a severe disadvantage in competing for funds against Treasury bills, U.S.
agency issues and corporate debentures and that rate
ceilings fail to insulate institutions from deposit outflows. Moreover, he noted, "Such rate setting is highly
discriminatory to the consumer-saver, who lacks either
the financial sophistication or the monetary where
250


withal to shift his funds to the high yielding market instruments."
In addition, deposit interest rate controls have received considerable attention by the Congress and the
Executive branch. The conclusions of the 1958 Commission on Money and Credit, the Heller Report, the
congressionally mandated 1966 Study of the Savings
and Loan Industry, the 1971 Hunt Commission Report,
the 1972 Federal Reserve Board study, "Ways to Moderate Fluctuations in Housing Credit," and the FINE (Financial Institutions and the Nation's Economy) Discussion Principles released by the House Subcommittee
on Financial Institutions in 1975 are virtually unanimous
in recommending that Regulation Q be phased out
and that thrift institutions be granted broader asset
and liability powers.
The collective verdict of these studies is that the
costs to society of continuing Regulation Q outweigh
the benefits. It is time to commit ourselves to phasing
out ceilings on all types of deposits and to structure a
solution that recognizes and deals with the problems
that removal of ceilings may create. Only with the certain knowledge that rate controls will be removed by a
definite date will affected institutions begin making the
necessary adjustments.
In addition to setting a timetable for removal of deposit rate ceilings, we recommend that thrift institutions
be permitted to:
• Offer with appropriate safeguards a full array of
mortgage instruments safeguards;
• Issue longer-term insured liability instruments
and certificates to reduce their dependence on
short-term, more interest-sensitive deposits;
• Offer a range of household financial services,
including transaction accounts and some consumer loan powers, to provide consumers with
the convenience of one-stop banking; and
• Invest to a greater extent in other short-term assets to shorten the maturity of their loan portfolio.
Furthermore, state usury laws should be repealed,
preempted or modified substantially because they create another arbitrary distortion of our capital market

system. These ceilings reduce the incentives to make
mortgages and distort the flow of funds by encouraging out-of-state investment of funds. When usury ceilings are below market interest rates, they reduce the
ability of less creditworthy consumers, such as young
families, to obtain mortgage funds.
These recommendations should be acted on at the
earliest possible time to permit thrift institutions to begin implementing the adjustments that will make early
removal of deposit rate ceilings possible. In the meantime, those agencies charged with regulating deposit
rate ceilings should be encouraged to do what they
can to provide depositors with a fair rate of return on
their funds without jeopardizing the viability of depository institutions. Preliminary steps were taken along
this line on April 4, 1979, when the agencies invited
comment on a series of proposed changes in deposit
rate ceilings that would enhance the return to small
savers and provide them greater flexibility:
• A fixed 5-year maturity certificate with a $500
minimum denomination, a 6-month interest forfeiture for early withdrawal and a flexible ceiling
(in commercial banks, 125 basis points; in thrift
institutions, 100 basis points) below the average 5-year rate based on the yield curve for
Treasury securities;
• A bonus of 50 basis points on individuals' passbook savings accounts on the minimum balance during a 12-month period;
• Reduction of present minimum denomination
requirements to $500 except for large negotiable certificates of deposit and money market
certificates;
• A $500 minimum denomination rising-rate certificate (6 percent in the first year; 6.5 percent between 1 and 21/2 years; 7 percent between 21/2
and 4 years; 7.5 percent between 4 and 5
years; and 8 percent between 5 and 8 years;
thrifts would be permitted to pay 1A percent
more) with a 3-month interest forfeiture penalty
for early withdrawal during the first year and
thereafter no penalty; and
• Reduction of early withdrawal penalties on existing certificates to 6 months' loss of interest.
The comment period for this proposal extends
through May 4. We encourage all interested parties to
participate in this exercise.
Our recommendation that concrete and certain
steps should be taken to eliminate deposit interest rate
ceilings reflects the judgment that these ceilings are
inefficient, inequitable and create problems throughout
the financial system. These problems have been recognized by most since their inception. Specifically, deposit rate ceilings are undesirable because:
• Unsophisticated savers and those of modest
means do not receive as large a return as wealthier and more sophisticated savers can;
• Depository institutions are forced to resort to inefficient and wasteful forms of nonprice competition and to devise roundabout strategies to circumvent ceilings;



• Costly and unnecessary transactions occur as
savers, seeking the best rate, move funds in
and out of depository institutions;
• Disintermediation has heightened the cyclically
of the housing construction industry, causing inefficiencies and added costs for home buyers;
• Strength of depository institutions is eroded due
to their inability to respond fully to the competition of unregulated institutions for funds in the
marketplace; and
• Saving in the form of financial assets is discouraged in favor of saving in the form of durable
assets, which may discourage the kinds of investments that promote increases in productivity.
In light of these problems, why have deposit ceiling
controls been renewed year after year, and why have
calls for their elimination been ignored? There are several reasons:
• Rate controls were designed to favor thrift institutions over commercial banks, with the intent
of funneling funds into housing construction
and mortgages;
• Rate controls were intended to lower the cost of
credit, particularly mortgages;
• Rate controls were designed to protect the local
markets of depository institutions by preventing
outside institutions from attracting deposits
through higher rates;
• Those benefiting from the present deposit rate
structure wish to retain their competitive positions;
• During times of rising interest rates, market
rates on short-term funds, which comprise the
majority of thrift deposits, adjust more quickly
than yields on thrift assets, which consist mostly
of long-term mortgages; this threatens thrift institutions' liquidity and possibiy solvency; and
• Rate controls are believed to prevent excessive
interest rate competition for deposits and,
therefore, inhibit unsafe investment policies.
Thus, despite the costs deposit ceilings impose on
our society in terms of inefficiency and inequity, the
prospect of a weakened thrift industry if rate controls
were to be removed has led many to accept controls
as the lesser of evils. However, the dynamics of the
marketplace are such that a continuation of deposit
rate controls will lead to a restructuring of the financial
services industries, changing and perhaps diminishing
the role of depository institutions.
The financial system that emerged from the Great
Depression consisted of distinct kinds of financial institutions with differing statutory powers and mandates
as well as separate regulators. The activities and markets of these institutions were segmented to a substantial degree. Where one or more types of financial institutions offered the same service, it was usually within
distinct markets. Or, as was the case with savings deposits, commercial banks simply did not compete seri251

ously with savings and loan associations, mutual savings banks or credit unions.
Since that time, the financial services industry has
undergone substantial change at both the national and
international levels. Because of innovations in communications technology and inflationary pressures,
markets for financial services are no longer segmented
and identified with a specific type of financial institution. Commercial banks and thrift institutions are in
head-to-head competition in many areas; commercial
banks and thrifts have entered markets of nondepository institutions and vice versa; the gulf between large
and small institutions has widened considerably; and
domestic and international geographical barriers to
competition have eroded.
What role will deposit-taking institutions play and
what role should they play in this rapidly changing economic environment? We believe, as do many others,
that strong deposit-taking industries are crucial to a vital and efficient economic and financial system. Thus,
we believe it is imperative to address the issue of deposit rate ceilings immediately and to develop a program for an orderly phasing out as quickly as practicable. Paul A. Samuelson, winner of the Nobel Prize in
economics, in a 1969 study of the savings and loan industry noted:
But just as Sigmund Freud has shown that adults
are better for meeting their problems head-on
rather than suppressing them from attention, so I
believe a healthy democratic society should be
the better for facing up to the problems that are
really there.
Before elaborating an approach to resolving the
Regulation Q problem, I believe further discussion of
problems created by rate ceilings and difficulties that
may develop as a result of their removal will be helpful.
What Is Wrong With Deposit Interest Rate Controls?

There is no question that the system of deposit rate
controls that was established in 1966 is unfair to small
savers of modest means and those of limited financial
sophistication because they receive a below-market
rate of return on their savings. Federal Reserve Board
Vice Chairman Robertson in August 1966 testified in
favor of legislation that would broaden deposit rate
controls and extend them to thrift institutions but noted
that the legislation "discriminates against the small
saver" and that the board was requesting the Regulation Q authority with "considerable reluctance."
Small savers may have large savings balances.
Consider, for example, a retired person who relies on
savings interest on a $40,000 account to provide a
substantial portion of his or her yearly income. Because of the desire to maintain liquidity and preserve
principal, the risks and inconveniences tied to nondeposit forms of investment encourage savers to keep
their funds in low-rate passbook savings accounts. Of
course, the money market certificate now affords
such savers an opportunity to earn a market return but
many still prefer the instant liquidity of a passbook account. The difference between a 9.4 percent return on
the money market certificate and a 5 or 5.25 percent

252


return on passbook savings is an unfair premium to exact for the privilege of maintaining instantaneous liquidity.
In the present environment of high inflation, the current yield on consumer deposits, adjusted for income
taxes and for inflation, is negative. A dollar spent today
can purchase more real goods than a dollar put aside
in an interest-bearing savings account can purchase
next year. Rather than rewarding individuals for saving, our system of deposit ceilings penalizes them.
Perhaps indicative of these facts, a popular investment
guide recently advised readers that investment in a
case of tuna fish now yields a higher after-tax return
than investment in a passbook savings account at a
savings and loan association.
For example, the deposit rate ceiling on a 1-year
certificate at a thrift institution is currently 6.5 percent.
An individual in a 30-percent federal income tax
bracket would receive an after-tax yield of slightly over
4.5 percent, but when this return is adjusted for inflation, which last year was over 9 percent, the return is a
negative 4.5 percent. This makes it exceedingly difficult for people of modest means to accumulate funds
necessary to make a down payment on a home. It also
discourages them from saving, thereby preventing
them from improving their standard of living in the future.
The relatively well-to-do and sophisticated savers,
however, are able to earn a market rate of interest on
their investments. Large denomination negotiable certificates of deposit; federal agency securities; Treasury
bills, notes and bonds; money market funds; and, more
recently, money market certificates are all now yielding
significantly higher rates of return than consumer deposits. However, to purchase many of these instruments, the investor must be able to meet minimum
denomination requirements and be willing to accept
the risk of moving outside the traditional depository
system. It seems likely that the moderate-income families, the elderly and the retired are among those least
likely to withdraw their savings and invest directly in
the market.
This inequity in treatment of depositors is not inadvertent; it was designed purposely to respond to the
realities of the financial market. If large depositors are
not offered yields on their deposits which are competitive with other investment instruments, they will rapidly
shift their funds elsewhere. To be viable, the rate controls can only apply to the household depositor for
whom there are few suitable alternative investments.
For example, the money market certificate was limited
to a minimum denomination of $10,000 because large
depositors are more sensitive to interest rate changes
than small depositors.
Realizing the reality of such inequities, the calls
made by many to end discriminatory treatment by authorizing low-denomination deposit instruments, which
pay market-based interest rates, are clearly justified.
The fact of the matter is that the current structure of
deposit rate ceilings is, in effect, a regressive tax. The
losses to savers from deposit ceilings have been substantial. One study by professor David H. Pyle of the
University of California at Berkeley concluded that be-

tween 1968 and 1975 Regulation Q resulted in a loss
to depositors of $22 billion.
More recently, professor Edward Kane of the Ohio
State University estimated that between 1968 and
1979 Regulation Q cost $42 billion in lost interest, and
rate restrictions on all types of financial instruments resulted in a loss of $55 billion in interest. Kane estimates that $19 billion was lost by people over the age
of 65.

ity and to invest smaller amounts in long-term investments such as mortgages.
Even those thrift institutions gaining new deposits
during high interest rate periods may be reluctant to tie
the funds up in long-term mortgages. There has been
some evidence that a portion of the 6-month money
market certificate balances has been invested in large
negotiable certificates of deposit of commercial banks.
Disruptions of the Housing Market

Inefficient Competition for Deposits

Inefficiency results when goods and services are not
produced at the minimum attainable cost or with the
minimum amount of resources. For example, efforts to
restrict competition among institutions by controlling
deposit rates result in these institutions competing on
the basis of other factors, such as premiums, free
services and more convenience in the form of more
branch offices and longer hours. This raises the cost of
intermediation because the cost to the depository institution of providing the extra services frequently exceeds the value the depositor places on the services
he receives. Many depositors would prefer to receive
interest income which they can spend as they choose
rather than having to accept free services or a choice
of premiums.
During recent high interest rate periods, some depository institutions in the highly competitive urban
areas have looked more like department stores than
depository institutions. In their windows one might find
cameras, radios, television sets, blankets, glassware
and so on. Governmental policy that forces a young
family—which is seeking to accumulate sufficient savings for a down payment on a house—to choose between a color television set or an outboard motor, simply because federal regulations prohibit their bank
from paying a realistic rate of return on savings deposits, should be questioned.
Inefficiency in the Market

During periods when market interest rates significantly exceed rate ceilings that commercial banks and
thrift institutions may pay on their deposits, savers in
the aggregate tend to decrease the proportion of their
savings allocated to these institutions by investing directly in market securities or allocating savings to unregulated financial intermediaries, such as money market funds and municipal bond funds. When market
rates fall relative to deposit ceilings, funds have
tended to flow back into depository institutions. Such
shifting of funds generates transactions and costs that
are not necessary to the functioning of the economy.
In addition, savers, particularly those with small deposits, expend more resources in investing their funds
directly in market securities or new financial intermediaries than depository institutions would. To the extent
that depository institutions are more efficient in collecting funds from depositors and lending them to borrowers, the growth of alternatives to deposits will increase costs.
The shifting of funds increases uncertainty and
forces depository institutions to maintain greater liquid


When interest rates rise above deposit ceilings and
depositors withdraw their funds, housing has been
clobbered. There is no doubt that Regulation Q has
exacerbated cyclical swings in the housing market. It
is an economic principle that stable markets function
more efficiently than unstable ones.
Instability in the availability of housing finance contributed to creation of governmental or governmentally
supported agencies to supplement the flow of funds
into housing. Since the imposition of deposit rate controls on thrifts in 1966, the share of outstanding residential mortgage loans financed directly or indirectly
by federal agencies or sponsored credit agencies has
increased from 6 to 19 percent. In 1974, over half of all
new mortgage credit was provided directly or indirectly through funds made available by federal agencies. Even last year, when thrift deposits were strong,
federal participation directly and through federal housing agencies, mortgage pools and Federal Home Loan
Bank advances totaled 30 percent of new mortgages.
By way of comparison, the government's participation
in the residential mortgage market in 1964 totaled less
than 2 percent. Yet, despite this assistance, the housing market still tends to be hit harder than other sectors of the economy when interest rates are high.
It is generally agreed that the money market certificates introduced last year helped maintain considerable housing strength, even as mortgage rates rose
sharply. The key to this success was that until a month
ago a market rate could be paid on money market certificates.
Eroding Competitive Strength of
Depository Institutions

Deposit rate controls, including the differential, have
placed commercial banks at a serious disadvantage in
the competition for deposits. Their share of financial
assets declined from 57 percent in 1946 to 40 percent
in 1977. Over the same period, savings and loans associations, mutual savings banks and credit unions increased their share from 13 to 24 percent; however,
this increase did not offset the commercial bank loss.
But since 1962, commercial banks' share has increased from 38 to 40 percent, reflecting more aggressive competition for nondeposit funds, such as negotiable certificates of deposit, borrowed funds,
subordinated debentures and so forth.
By limiting the flexibility of deposit-taking institutions
to attract deposits, rate controls have fostered the development of new institutions and markets ready to
meet the demands of the consumer. Intermediaries established primarily since 1966 include money market
funds and tax-exempt municipal bond funds. These
253

funds have grown in rapid spurts when interest rates
have risen. More significantly, these funds have not
contracted when interest rates declined and may have
become a permanent feature in our financial system.
Initial investments in some of these funds start as low
as $500; and many provide check writing privileges.
Not surprisingly, money market funds grew by 180
percent during 1978 and increased by 42 percent during the first 2 months of 1979, reaching $15.5 billion in
size.
Corporations have also been encouraged by deposit rate controls to deal directly with each other and
with the household sector, rather than operating
through depository institutions. For instance, new
money raised by both financial and nonfinancial corporations in the commercial paper market averaged
less than $800 million per year from 1961 through
1965 and did not exceed $1.6 billion in any year. In the
years immediately following the introduction of deposit
rate controls, the average new money raised in the
commercial paper market was over $4.7 billion and exceeded $11 billion in 1969. As of the end of 1978,
commercial paper outstanding totaled almost $84 billion.
Other examples of direct borrowing and lending include:
• The recent announcement by Sears of plans to
issue small denomination intermediate notes directly to its credit card holders;
• The issuance by municipalities of "minibonds"
in denominations as low as $100; and
• The entry of insurance companies and even
cash-rich non-financial companies into the
short- and intermediate-term corporate lending
business.
It is difficult to quantify what the cost to society has
been of using resources to circumvent rate controls.
However, it seems likely that our financial system has
not been strengthened and thrift deposits have not
been protected by regulations that unintentionally encourage borrowers or lenders to transact their business in newly formed markets. The financial and credit
expertise built up over the years in the commercial
banking system is lost to the investor and the issuer
when business which could be performed more efficiently by the banking system is forced by restrictions
on banks to go elsewhere.
Saving in Financial Assets is Discouraged

While below-market rates on deposits may have little, if any, impact on aggregate saving in the economy,
they will discourage saving in the form of deposits. Under our tax policy, consumers are given a strong incentive to substitute consumer durables, whose implicit yields are not taxed, for deposits, whose yields
are taxed. Both reduce the quantity of savings available for investment in new plant and equipment. Therefore, deposit rate ceilings can be faulted as having
contributed to the slow growth of productivity producing investment in the past decade. They may also
have contributed to the recent speculative boom in the
housing market.

254


Why Haven't Deposit Interest Rate Controls Been Eliminated?

Several arguments raised in favor of deposit ceilings
are of doubtful validity. These include lower interest
rates on loans and excessive interest rate competition
that may include unsafe banking practices. Other arguments, such as protection of local markets and
maintenance of preferential market positions, are inconsistent with the principle of competition. Nevertheless, it has been a matter of national policy to channel
funds to the housing industry. An instrument of that
policy has been the deposit interest rate differential
accorded thrift institutions. The appropriateness of depending on such a policy instrument in light of the
problems created by deposit ceilings certainly must
be questioned. An interest rate differential cannot exist
without effective deposit rate ceilings.
However, one of the arguments against removing
ceilings is quite real. Because of a mismatching of asset and liability maturities, thrift institutions' earnings
and, possibly, solvency are vulnerable in times of rising interest rates.
Some Arguments for Deposit Ceilings
Are of Doubtful Validity

There is no convincing evidence of the impact of deposit rate ceilings on the cost of loans, although it is
generally believed that mortgage rates have been
lower than they might have been if there were no ceilings. However, it is possible that the involvement of
federal government and governmentally sponsored
agencies in providing funds for housing may be responsible for lower mortgage rates, rather than Regulation Q.
Even if loan rates are lower because of the ceilings,
it does not follow that the bargain rates will have desirable economic effects. Lower mortgage interest rates
may simply mean more household borrowing via mortgage finance as a substitute for other borrowing,
rather than more home purchases. Since 1950, the increase in residential mortgage loans has been significantly greater than the increase in investment in residential housing. Thus, to the extent deposit ceilings
have diverted funds from commercial banks to thrift institutions, not all of these funds have found their way
into housing investment. Furthermore, there is no convincing evidence that deposit ceilings have led to a
greater availability of funds to low- and moderateincome households.
Some argue that unrestrained competition for deposits will lead to unsafe banking practices because
institutions will seek to recover higher interest expenses by investing in high-yielding, high-risk assets.
There is some evidence that this occurs; however, as
long as the yields are sufficiently greater to compensate for the added risk, this can hardly be regarded as
an unsafe banking practice. Furthermore, studies of
bank failures* in the 1930's have demonstrated that deposit rate competition was not a cause.
Recent evidence from the NOW account experience
of New England depository institutions, although not
conclusive, suggests that rate competition may lead to
lower profits in the short run. However, profits tend to

return to more normal levels as institutions make adjustments in their operating and pricing policies. Those
institutions that are not able to cope with increased
competition tend to be poorly managed and have survived only because deposit rate ceilings have protected them from competition. Protection of inefficient
competitiors is inconsistent with a free market economy. Moreover, deposit insurance has virtually eliminated the most adverse economic and social consequences of failure.
Thrift Institution Liquidity and Solvency
Are Cause for Real Concern

Thrift institutions are limited by law and regulation in
the kinds of liabilities and assets they may hold. The
intention of Congress in establishing the Federal Home
Loan Bank System was to support and stimulate an industry almost-exclusively devoted to homebuilding.
Thus, the bulk of assets of savings and loan associations and mutual savings banks to a lesser extent is invested in fixed-rate, long-term residential mortgages.
These mortgages are funded by household savings
which are essentially short-term owing to household liquidity needs.
During the 1950's and early 1960's when prices and
interest rates were relatively stable, thrifts encountered
little difficulty in operating profitably and remaining solvent without the need for ceilings on deposit rates. In
fact, as long as interest rates are stable over an extended period of time, regardless of level, thrifts will
have no difficulties. The mismatching of asset and liability maturities only causes problems when interest
rates rise relatively quickly over an extended period of
time such as has occurred, with a few temporary interruptions, over the last 15 years. Because savings deposits are relatively liquid, thrift institutions must raise
rates to market levels to hold them. However, mortgages made 15 years ago at 6 percent may still be on
the books even though current mortgage rates are in
excess of 10 percent. When rates are rising, the average return on a portfolio of fixed-rate mortgages will always be lower, sometimes substantially, than current
rates.
Thus, payment of market rates on savings during
sustained periods of rising rates would cause low or
negative earnings and if sustained over a long enough
period would eventually result in insolvency and failure. Deposit rate controls preserve thrift institution
profitability, but the result is disintermediation and unfair treatment of savers. Regulators have sought to
minimize the extent of disintermediation by structuring
a system of deposit rate controls that gives sophisticated savers a market or near-market rate while holding rates on the savings of small and unsophisticated
savers substantially below the market because it is
well known that most of the deposits of these savers
will remain regardless of the interest rate. This is patently discriminatory. However, as long as thrift institutions remain vulnerable to interest rate cycles, it will be
difficult to eliminate such discriminatory treatment.
Commercial banks do not share this problem for the
most part because they hold much shorter-term assets.



Ways of Resolving the Problems Related to Deposit
Rate Ceilings

Removal of deposit rate ceilings in the present economic environment would have catastrophic consequences, not only for the thrift industry and some
banks but also for the homebuilding industry and perhaps other sectors of the economy. Despite the inefficiencies that result from Regulation Q, the inefficiencies stemming from its removal, at least in the short
run, might be much greater. Therefore, any solution to
the problem must of necessity involve a gradual phasing in over time.
What Can Be Done?

The need for basic financial institutions reform is
clear. The longer our depository system and mortgage
finance remain hostage to thrift earnings problems, the
longer the socially wasteful allocation of resources devoted to avoiding deposit rate controls will continue.
The decision to begin phasing out deposit rate controls should be made now, and a firm timetable should
be established.
There are two types of solutions. The first involves
reducing inflation. This would cause interest rates to
stabilize or even decline. As this occurs, the earnings
problems created by the mismatching of liability and
asset maturities would gradually be eliminated. The
second solution would involve relaxing statutory and
regulatory contraints presently imposed on thrift asset
and liability powers with the intent of reducing the asset-liability maturity mismatch. Average liability maturities can be lengthened; average asset maturities can
be shortened through investment diversification; flexible rates can be substituted for fixed rates so that a
long-term asset behaves more like a short-term asset;
usury ceilings on loans can be removed; and the competitive ability of thrifts to attract and hold household
deposits can be improved.
Some steps have already been taken. Since 1966, a
variety of new deposit instruments has been authorized by regulation, generally with the objectives of increasing the competitiveness of deposit instruments
and lengthening the maturity structure of thrift liabilities. Authorization of the 6-month money market and 8year certificates last year is the most recent step. As a
result of these efforts, the proportion of savings and
loan deposits in non-passbook accounts has risen
from 12 percent in 1966 to over 70 percent. Additional
steps intended to enhance the return to savers of modest means and limited financial sophistication and to
provide them greater flexibility have been proposed for
comment.
However, these actions have not solved, and will not
solve, the problem entirely. So long as the fundamental
imbalance in the thrift asset and liability structure continues, thrift institutions will continue to be vulnerable to
prolonged periods of tight credit.
Recommendations

It is time to commit ourselves to an orderly phasing
out of ceilings on all types of deposits and to structure
solutions that enable depository institutions to pay
255

competitive rates of interest without endangering their
viability in both the short-run and the long-run.
I am convinced that the agencies charged with regulating deposit rate ceilings are committed to do whatever is possible, consistent with the viability of depository institutions, to eliminate existing inequities in the
present structure of deposit rate controls. S. Concurrent Resolution 5 would reenforce this commitment by
clearly establishing the sense of Congress that the
agencies "should promptly provide an appropriate
method under which the interest rate on small savings
deposits and accounts is increased equitably in order
to reduce the adverse impact of such regulation on the
holders of such deposits and accounts." However, S.
Resolution 59, by stating the sense of the Senate that
the agencies should establish ceilings based on the
yields on U.S. government obligations and should reduce minimum denominations to $1,000, will be nearly
impossible to meet in the short-run and may prove
equally difficult in the long-run unless depository institutions are provided broader asset and liability
powers. Some of the necessary modifications can be
accomplished through regulatory changes, but much
of it will require legislation.
Accordingly, we recommend that depository institutions be permitted to offer an array of mortgage instruments to the consumer and not be limited to the standard fixed rate mortgage. If thrift institutions are to
continue to invest primarily in mortgages, then the form
of the mortgage instrument must be allowed to change
to reflect the uncertainties of today's economy. While
we do not believe that the standard fixed rate mortgage should be eliminated, it is important that the thrift
institution be provided with a means of adjusting earnings should interest rates change in the future.
Variable rate mortgages with yields which adjust to
changes in the cost of funds will eventually provide
thrift institutions with sufficient earnings to adjust their
deposit rates to market conditions. The mortgages, of
course, must be accompanied by adequate consumer
safeguards. While a variable rate mortgage need not
change the nominal maturity of the mortgage instrument, it can convert the long-term maturity into an effective short-term maturity. The intermediary realizes a
return that follows short-term rates while paying deposit costs that are sensitive to long-term rates.
Thrift institutions should also be allowed to offer
longer-term liability instruments. Such instruments
would help reduce the interest rate risk these institutions now assume when they make long-term fixed rate
mortgages. Longer maturity deposits would make a
significant contribution to providing thrift institutions
with a more stable deposit base.
The thrift industry should also be permitted to offer
households the convenience of interest-bearing transaction accounts as a part of one-stop banking convenience. These accounts are less interest-sensitive than
savings and time deposits and consequently will provide thrifts with a stable source of funds. Also, the ability to offer their customers easy access to a transactions account will benefit the thrifts in competing for
direct deposits of payroll checks, social security and
other regularly scheduled benefit payments. If thrift in
256


stitutions are to continue to be dependent on households as their major source of deposits, these expanded asset powers should also include consumer
loans.
Furthermore, the average yield on thrift assets must
be made more responsive to changes in deposit interest rates. Short-term assets, which yield market rates
of interest and have a frequent turnover during the interest rate cycle, should become part of a thrift's investment alternatives. Furthermore, state usury ceilings frequently prevent depository institutions from
earning a market rate of return on loans and mortgages. These ceilings should be repealed or preempted by federal law, at least in the residential mortgage area.
Usury laws are intended to protect small- and lowincome borrowers from unscrupulous money lenders
and to limit the power of lenders to charge whatever
interest rate they want. However, experiences with
usury limitations show that conventional credit sources
are closed off to high-risk and low-income borrowers.
Additionally, housing credit needs are not met, and
state economies, business firms, individual borrowers
and lending institutions in restricted areas are adversely affected. Funds flow to states that do not have
restrictive usury ceilings. Moreover, financial institutions in states with restrictive usury ceilings are reluctant to make costly small- and short-term loans.
Certainly, there are better ways of protecting borrowers, such as truth-in-lending disclosure and the
Equal Credit Opportunity Act, than relying on usury
ceilings, which prevent institutions from earning a market rate of return and which cause arbitrary distortions
in our capital markets.
Even if all these changes were implemented immediately, it would take time for them to take root. Nevertheless, a firm timetable for phasing out deposit ceilings should be established that is consistent with an
orderly process of phasing in new asset and liability
powers. Without such a firm commitment, institutions
are not as likely to make the necessary adjustments in
their policies. We would, however, recommend retaining the power to reinstate deposit rate ceilings on a
standby basis.
Before concluding my testimony I would like to indicate our views on the relationship between financial institutions reform and housing finance.
The provision of decent and suitable housing for citizens of all incomes has been a national priority.
Strengthening the ability of thrift institutions to pay
competitive deposit rates and authorizing them to offer
a broader range of family financial services will be
beneficial to housing by ending the disruptive and unstable pattern of savings flows to mortgage-oriented
thrift institutions.
It is doubtful that anyone can accurately predict
what the results of these changes will be on the overall
flow of funds to housing. Certainly the significant improvements to the secondary mortgage market and
the spectacular growth in the mortgage pools since
1966 have increased the potential for greater mortgage investments by the contractual thrift institutions,
such as life insurance companies and public and pri-

vate retirement systems. A number of studies have
been conducted in recent years on the effect of expanded thrift asset and liability powers and variable
rate mortgages on mortgage flows. They have concluded that the resulting increased thrift earnings and
the increased thrift deposit base stemming from the reforms we and others have proposed will allow the
thrifts to commit at least the same if not a greater
amount of funds to the mortgage market.
Furthermore, to the extent that our financial system
does not meet the mortgage financing needs of our
country during tight credit periods, we now have in
place an array of government and federally sponsored

credit agencies which are able to meet any temporary
shortfall in mortgage flows.
Finally, there is another reason for supporting asset
and liability diversification in thrift institutions. Because
of the decline in the birth rate, the rate of new household formation may well diminish sharply in the late
1980's. As a consequence, the priority we now place
on new housing may lessen accordingly. Thrift institutions should begin preparing now for that time. Movement toward full-service, family financial centers, as
suggested in our recommendations, may be a reasonable direction to take.

Remarks of Donald R. Johnson, Director for Trust Operations, before the 27th
Annual Southern Trust Conference, Mobile, Ala., May 4, 1979
It is indeed a privilege this morning to represent the
Trust Operations Division of the Office of the Comptroller of the Currency here at the 27th Southern Trust Conference. While this is my first opportunity to speak to
you as a group, it is not my first time in attendance at
your sessions. I feel perhaps more at home here at the
Southern Trust Conference than at most others, for I
spent a number of years examining out of Richmond,
Va., and visiting the banks in South Carolina, North
Carolina, Virginia, West Virginia, Maryland and the District of Columbia. Your welcome has been warm even
though we both are conscious that at times the regulatory stance we take may not always be the most popular one with you at that particular moment. Our industry
is a professional one, and in the long run, our overall
goals are not contradictory.
It is my belief that the trust industry is faced with
greater competition today than perhaps ever before.
Competition brings innovation, and this means
change. Change often brings increased supervision
and eventually more regulation when abuses appear
or the potential for abuses are present.
The Comptroller believes that meetings such as
yours should be attended by our personnel and that
we should participate to the ethical extent that you desire us to do so. Certainly, as speakers or panelists, it
does represent a forum in which we may voice our
views and acquaint you with the regulatory problems
and changes that impact our industry. On the other
hand, my appearance here permits me to listen to your
views, concerns and suggestions for improvement in
our examination approach and procedures and in proposed and existing regulations. Hopefully, you may
benefit from my message this morning in that a better



understanding will result as to what has been accomplished by the Comptroller as it impacts trust and the
securities areas. I will elaborate extensively on what
has been the impact of the examination procedures
we implemented in October 1976, the later modifications and recently introduced specialized and small
bank examination approach.
The subject I have chosen to speak on today is
"OCC Trust Examinations—A Viable Approach." It is
especially rewarding for me to speak to you about this
subject for, in one capacity or another, I have devoted
25 years of my life to regulatory and bank supervisory
work. Therefore, I quickly accepted the invitation that
was extended to me in April 1975 to serve as one of
two members of a task force to review, examine, develop and codify our trust examination approach. I felt
that OCC had need of codification of its procedures
and that I could contribute materially toward that end. I
firmly believe in the approach that we have taken, and
I believe you in the industry generally have endorsed
both the approach and the results as your individual
departments have been examined by our staff. However, prior to setting the stage on why the approach
was taken, I feel it would be beneficial for you to briefly
understand the magnitude of our examination responsibility.
Nationwide, on December 3 1 , 1978, there were
1,962 national banks with trust powers, of which 1,763
were active. Based on the latest trust department annual report data, which was for