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Annual Report 1968
Comptroller of the Currency

The Administrator of National Banks




William B. Gamp
Comptroller of the Currency

For sale by the Superintendent of Documents, U.S. Government Printing Office
Washington, D.C. 20402 - Price $2.75




Letter of Transmittal
TREASURY DEPARTMENT,
OFFICE OF THE COMPTROLLER OF THE CURRENCY,
WASHINGTON,, D.C., AUGUST 29,1969

Sms: Pursuant to the provisions of Section 333 of the United States
Revised Statutes, I am pleased to submit the 1968 Annual Report of the
Comptroller of the Currency.
Respectfully,
WILLIAM B. CAMP,

Comptroller of the Currency.
T H E PRESIDENT OF THE SENATE
T H E SPEAKER OF THE HOUSE OF REPRESENTATIVES




Contents
Title of Section

I.
II.
III.
IV.
V.
VI.
VII.
VIII.
IX.
X.
XI.

Condition of the National Banking System
Income and Expenses of National Banks
Structural Changes in the National Banking System
Bank Examinations and Related Activities
Litigation
Fiduciary Activities of National Banks
International Banking and Finance
Economic Analysis and Related Activities
Administrative and Management Developments
Iinancial Operations of the Office of the Comptroller of the Currency.
Fssuance of Currency

Page

1
3
6
14
15
19
20
22
23
27
31

Appendices
A. Merger Decisions, 1968
B. Statistical Tables
C. Addresses and Selected Congressional Testimony of the Comptroller of
the Currency
D. Selected Correspondence of the Office of the Comptroller of the Currency.

Index




34
178
240
274

289

Statistical Tables
Table No.

Title

1 Assets, liabilities, and capital accounts of National
banks, 1967 and 1968
2 Income and expenses of National banks, calendar
1967 and 1968
3 National banks and banking offices, by States,
December 31, 1968
4 Applications for National bank charters, and
charters issued, by States, calendar 1968
5 Applications for National bank charters to be
issued pursuant to corporate reorganizations,
and charters issued, by States, calendar 1968..
6 Applications for conversion to National bank
charters, and charters issued, by States, calendar
1968
7 Branches of National banks, calendar 1968




Table No.
Title
Page
8 De now branch applications of National banks, by
States, calendar 1968
12
9 De novo branches of National banks opened for
business, by community size and by size of bank,
calendar 1968
13
10 Mergers, calendar 1968
13
11 Foreign branches of National banks, by region and
country, December 31, 1968
21
12 Office of the Comptroller of the Currency: balance
sheet, 1967 and 1968
28
13 Office of the Comptroller of the Currency: statement of revenue, expenses and Comptroller's
equity, 1967 and 1968
29
14 Office of the Comptroller of the Currency: statement of source and application of funds, year
ended December 31, 1968
30

Page

2
4
7
8
9
10
11

vi

I. Condition of the National Banking System
The year 1968 saw continued healthy growth by
the National banking system. Total assets reached
$296.6 billion, representing an increase of 12.6 percent
for the year and outpacing the 1967 rise of 11.6 percent.
The differential rates of growth among asset categories shed some light on the response of National
banks to the high level of demand for funds that was
present during the year. Total loans showed a 13.2percent increase in 1968, and thus exceeded the overall rate of asset growth. In contrast, total securities
held increased by 10.4 percent. Within the total securities category, the rates of growth of various types
of securities showed marked disparity. While U.S. Government obligations inched upward by 2.9 percent,
National bank holdings of the obligations of States
and political subdivisions spurted by 19.7 percent. As
a result, at the end of 1968, total municipals held by
National banks were nearly equal to total holdings
of U.S. Governments; the respectivefigureswere $34.7
billion and $35.3 billion.




The increase in total deposits during 1968 was 11.5
percent, just under the rate of asset growth. Once
again, total time and savings deposits grew faster than
did demand deposits, the rates being 13.8 and 9.4 percent, respectively. Although total demand deposits of
National banks still exceed total time deposits, $134.6
billion to $123.3 billion, the reverse holds true for
deposits of individuals, partnerships, and corporations
(IPG deposits). As of December 31, 1968, IPC demand deposits totaled $101.8 billion, compared to
IPC time and savings deposits of $107.7 billion.
Total capital accounts of National banks registered
a 9.1 percent increase, reaching $21.5 billion at yearend 1968. This rate of increase easily surpassed the
comparable rates of 5.9 percent and 6.9 percent in
1966 and 1967, respectively. However, the capital accounts continued to grow at a slower pace than the
rate of asset growth.

TABLE 1

Assets, liabilities, and capital accounts of National banks, 1967 and 1968
[Dollar amounts in millions]
Dec. 31,19671
4,758 banks
Percent
distribution

Dec. 31, 1968,
4,776 banks
Amount

Percent
distribution

Change, 1967-68

Amount

Percent

ASSETS

Gash, balances with other banks, and cash items in process of collection

$4, 319

9.26

35, 300
34,704
5,160
1,707

11.90
11.70
1.74
.58

992
5,702
322
199

2.89
19.66
6.66
13.20

26.45

76, 871

25.92

7,215

10.36

136, 753
3,876
1,182
2,300

.97
.16
51.92
1.47
.45
.87

4,397
542
154, 862
4,363
1,275
3,331

1.48
. 18
52.21
1.47
.43
1. 13

1,835
130
18, 109
487
93
1,031

71.62
31.55
13.24
12.56
7.87
44.83

263, 375

100. 00

296, 594

100. 00

33, 219

12.61

92,686

35.19

101, 765

34.31

9,079

9.80

95,104
3,297
18,511

36. 11
1.25
7.03

107, 716
3,288
22, 082

36.32
1. 11
7.44

12,612
-9
3,571

13.26
-.27
19.29

3,483
13, 963
4,330

1.32
5.30
1.65

3, 196
15, 303
4,534

1.08
5. 16
1.53

f—287
' 1,340
•
*' 204

-8.24
9.60
4.71

231, 374

87.85

257, 884

86.95

26, 510

11.46

123, 038
108, 336

46.72
41. 13

134, 629
123, 255

45.39
41.56

11,591
14, 919

9.42
13.77

3,182
297

1.21
. 11

5,234
689

1.77
.23

2,052
392

64.49
131.99

1,205
7,587

.46
2.88

1,290
9,973

.43
3.36

85
2,386

7.05
31.45

243, 645

92.51

275, 070

92.74

31,425

12.90

1,235
55
5,312
8,832
3,549
747

.47
.02
2.02
3.35
1.35
.28

1,256
58
5,694
9,747
4,051
718

.42
.02
1.92
3.29
1.37
.24

21
3
382
915
502
-29

1.70
5.45
7.19
10.36
14.14
-3.88

17.71

34,308
29, 002
4,838
1,508

Total securities

Federal funds sold and securities purchased under agreements to resell
Direct lease
financing
,
Loans and discounts
Fixed assets
,
Customers' liability on acceptances outstanding
Other assets.
Total assets

Demand deposits of individuals, partnerships, and corporations
Time and savings deposits of individuals, partnerships,
and corporations
Deposits of U.S. Government
Deposits of States and political subdivisions
Deposits of foreign government and official institutions,
central banks, and international institutions
Deposits of commercial banks
Certified and officers' checks, etc
Total deposits
Demand deposits
Time and savings deposits

Federal funds purchased and securities sold under agreements to repurchase
Liabilities for borrowed money
Acceptances executed by or for account of reporting
banks and outstanding
Other liabilities
...
...

13.03
11.01
1.84
.57

69, 656

U.S. Government obligations
.-..-....
Obligations of States and political subdivisions
Securities of Federal agencies and corporations
Other securities

Total liabilities

17. 18

$46, 634

2,562
412

$50, 953

CAPITAL ACCOUNTS

Capital notes and debentures
Preferred stock
Common stock
Surplus.
Undivided profits
Reserves




,
,
,
,

II. Income and Expenses of National Banks
Both the current operating revenue and the current
operating expenses of National banks rose sharply
during 1968. Revenues increased 18.6 percent, to $15.0
billion, and expenses, 18.7 percent to $11.5 billion. Net
current operating revenue jumped 18.1 percent, to $3.5
billion. Losses on securities sold of $308.9 million, compared to $76.0 million in 1967, were the most important element in holding net income before taxes to a
9.9-percent year-to-year gain.
On the revenue side, gross income from loans of
$10.0 billion accounted for 66.6 percent of National
banks' total current operating revenue, a share only
fractionally smaller than the 66.9 percent comparable
figure for 1967. The $10.0 billion represented an 18.1percent increase over 1967's $8.5 billion. The revenue
from "Other securities" held showed the biggest spurt
in 1968 among the larger income accounts, a 26.1-percent increase to $1.4 billion. This reflected the sharp




increase, already noted, of National banks' holdings of
municipals during the year. Of the $2.3 billion increase
in total revenue for 1968 over 1967, more than 87 percent was accounted for by the increments in loan and
investment revenue.
Interest paid on time and savings accounts advanced
20.1 percent, to $5.3 billion in 1968. The relative share
of total current operating expenses accounted for by
interest paid also moved upward, from 45.6 percent to
46.1 percent. Salaries, wages, and employee fringe
benefits experienced a 14.1-percent increase over the
previous year, reaching $3.4 billion.
Net "below-the-line" adjustments led to a deduction of $848 million, yielding a net income before taxes
of $2.6 billion. After Federal and State income taxes of
$710 million, 1968 net income of National banks
equaled $1.9 billion.

TABLE 2

Income and expenses of National banks,* calendar 1967 and 1968
[Dollar amounts in millions]

Amount

Percent
distribution

4,758

Number of banks
Current operating revenue:
Interest and dividends on—
U.S. Government obligations
Other securities.-.
Interest and discount on loans f
Service charges and other fees on banks' loans.
Service charges on deposit accounts
Other charges, commissions, and fees
Trust department
Other current operating revenue

Change, 1967-68

1968

1967

Amount

Percent
distribution

Amount

-42

4,716

$1, 622. 9
1,415. 1
9, 990. 4
234.0
630.0
269.9
493.3
342.3

10.82
9.44
66.61
1.56
4.20
1.80
3.29
2.28

$221. 9
293. 1
1,531.5
64.5
53.2
39.9
58.0
84.9

100. 00

14, 997. 9

100. 00

2, 347. 0

901.7
1, 673. 1
391.2
43.3
4, 418. 0
153.8
489.4

9.30
17.26
4.03
.45
45.57
1.58
5.05

1, 022. 5
1,911.2
450.0
47.2
5, 304. 3
308.6
553.3

8.88
16.61
3.91
.41
46.09
2.68
4.81

120.8
238.1
58.8
3.9
886.3
154.8
63.9

313. 1
1,311.8

3.23
13.53

374.3
1, 537. 6

3.25
13.36

61.2
225.8

9, 695.4

Total current operating expenses

Net current operating earnings

11.07
8.87
66.86
1.34
4.56
1.82
3.44
2.04

12, 650. 9

Total current operating revenue.

Current operating expenses:
Officers' salaries
Employees' salaries and wages
Officer and employee benefits
Fees to directors
Interest on time and savings deposits
Interest and discount on borrowed money{
Net occupancy expense of bank premises
Furniture and equipment-depreciation and other
costs
Other current operating expenses

$1,401.0
1, 122. 0
8, 458. 9
169.5
576.8
230.0
435.3
257.4

100. 00

11,509.0

100.00

1,813.6

2, 955. 5

Recoveries, transfers from valuation reserves, and profits:
On securities:
Profits on securities sold or redeemed
,
Recoveries
Transfers from valuation reserves
,
On loans:
Recoveries
,
Transfers from valuation reserves
,
Allother
,

533.4

3, 488. 9

valuation reserves.

Losses, chargeoffs, and transfers to valuation reserves:
On securities:
Losses on securities sold
Chargeoffs on securities not sold
Transfers to valuation reserves
On loans:
ChargeofFs
Transfers to valuation reserves
All other
Total losses, chargeoffs, and transfers to valuation
reserves

Net income before related taxes
Taxes on net income:
Federal
State
Total taxes on net income

Net income
See footnotes at end of table.
4




36. 10
1.02
14.53

48.4
3.9
22.2

27.09
2.18
12.42

-42.8
1.3
-14.5

6.7
28.7
86.7

2.64
11.36
34.35

6.0
29. 1
69. 1

3.36
16.28
38.67

-.7
.4
-17.6

252.6

Total recoveries, transfers from

91.2
2.6
36.7

100. 00

178.7

100. 00

-73.9

76.0
4.5
52.2

9.86
.58
6.77

308.9
6.9
33.8

30.09
.67
3.29

232.9
2.4
-18.4

13.6
519.0
105.4

1.76
67.35
13.68

9.7
559.7
107.5

.95
54.53
10.47

-3.9
40.7
2. 1

770.7

100. 00

1, 026. 5

100. 00

255.8

2,437.4

2, 641. ]

203.7

594.0
85.9

611.5
98.0

17.5
12.1

679.9
1, 757. 5

709.5

29.6

1,931.6

174.1

TABLE 2—Continued
Income and expenses of National banks,* calendar 1967 and 1968
[Dollar amounts in millions]
1967

Amount

Dividends on capital:
Cash dividends declared on common stock
Cash dividends declared on preferred stock

1968
Percent
distribution

$794. 1
2. 1

Amount

Change, 1967-68
Percent
distribution

Amount

Percent

12.45
104.76

796.2

Occupancy expense of bank premises:
Officers' salaries
Employees' salaries and wages
Officer and employee benefits
Recurring depreciation on bank premises and leasehold improvements.
Maintenance, repair, and uncapitalized alteration
costs of bank premises, and leasehold improvements . •
Insurance, utilities, etc
Rents paid on bank premises
Taxes on bank premises and leasehold improvements . .

$98.9
2.2

897.3

101.1

12.70

961.3

Total cash dividends declared. . .
Net income aftT dividends

$893. 0
4.3

1, 034. 3

73.0

7.59

2. 1
62. 1
8. 1

.35
10. 16
1.33

2.7
67.2
8.9

.39
9.77
1.29

.6
5. 1
.8

28.57
8.21
9.88

115.4

18.88

123.2

17.92

7.8

6.76

78.4
100.3
156.2

12.82
16.40
25.56

89. 1
111.3
185.6

12.96
16. 19
26.99

10.7
11.0
29.4

13.65
10.97
18.82

14.50

99.6

14.49

11.0

12.42

100. 00

687.6

100. 00

76.4

12.50

116.3
5.5

Less:
Rental income from bank premises
Other credits..

88.6
611.2

Gross occupancy expense

19.04
.90

128.9
5.4

18.75
.78

12.6
-.1

10.83
-1.82

Total

121.8

19.94

134.3

19.53

12.5

10.26

Net occupancy expense

489.4

80.06

553.3

80.47

63.9

13.06

Recoveries credited to valuation reserve (not included in
recoveries above):
On securities
On loans
Losses charged to valuation reserves (not included in
losses above):
On securities....
On loans
Stock dividends (increases in capital stock)
Ratio to current operating revenue:
Salaries, wages, and fees
Interest on time and saving deposits
All other current expenses
Total current expenses . . . .

3.8
105.8

.9
142.4

-2.9
36.6

-76.32
34.59

69. 1
378.2
160.9

28.3
395.9
236.4

-40.8
17.7
75.5

-59.04
4.68
46.92

Percent
20.70
34 92
21 02
76.64
23 36

...

Net current earnings
Employees at year end:
Building occupancy and maintenance:
Officers
Other employees
Banking operations
Officers
Other employees

Percent
19.88
35 37
21.49
76.74
23.26

Number
274
17, 730

Number
261
18, 821

-13
1,091

-4.74
6.15

75, 808
369, 780

82, 597
397, 270

6,789
27, 490

8.96
7.43

•Includes all banks operating as National banks at year end, and full year data for those State banks converting to National
banks during the year.
•{"Includes revenues from the sale of Federal funds,
jlncludes expenses incurred in purchasing Federal funds.




III. Structural Changes in the National
Banking System
The National banking system included 4,716 banks
at the end of 1968, a net decline of 42 during the year.
The total was composed of 3,166 unit banks and 1,550
banks operating 10,801 branches. Total National bank
branches increased by a net figure of 814, or 8.1 percent, in 1968. All told, there were 15,517 National
banking offices in operation at year end.
As steps toward corporate reorganization, primarily
the formation of one-bank holding companies, 16 National bank charters were issued and 15 mergers were
consummated during the year. These mergers involved
only one operating bank. During 1968, a total of 41
charter applications received preliminary approval for
the same purpose, and 11 were pending at the end
of the year.
Fifteen charters were issued for newly organized
National banks, exclusive of the 16 noted above. These
15 were scattered among 12 States. Thirteen charters




were issued pursuant to the conversion of State banks
to the National system.
A total of 897 banking offices opened for the first
time as National bank branches during the year. Of
these, 492 were de novo branches and 405 entered the
National banking system through mergers or conversions. The closing of 83 branches led to the net figure
of 814 additions.
Of the 492 de novo branches, 280, or 57 percent,
were located in communities with less than 25,000
population. Only 16 were located in cities with over
one million people. Banks with total assets of less than
$100 million accounted for 264, or almost 54 percent,
of the de novo branches.
Apart from the mergers pursuant to the formation
of one-bank holding companies, 67 mergers, consolidations, and purchases in which the resulting bank was
a National bank occurred during the year. This compares with 84 in 1967 and 75 in 1966.

TABLE 3
National banks and banking offices, by States, Dec. 31, 1968

National banks
Number of
branches
Total

Number of

With
branches

Unit

United States

4, 716

3,166

1,550

10,801

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

89
5
3
68
72
118
29
5
10
204

49
0
1
35
14
118
8
3
1
204

40
5
2
33
58
0
21
2
9
0

165
41
186
76
2,218
0
191
4
59
0

Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine

62
2
9
420
123
102
171
80
48
21

33
0
3
395
52
62
144
37
14
5

29
2
6
25
71
40
27
43
34
16

147
41
103
25
305
50
27
127
156
87

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

48
87
98
196
40
98
48
127
4
52

14
21
29
194
8
78
47
107
29

34
66
69
2
32
20
1
20
3
23

227
388
511
6
117
20
1
20
55
33

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

143
33
176
22
42
218
220
11
327
4

34
13
76
6
33
80
184
4
174
0

109
20
100
16
9
138
36
7
153
4

518
60
1,108
328
9
644
36
236
939
58

South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyomi;
Virgin

24
34
77
535
12
27
107
27
80
117
40
1

4
24
20
535
9
13
29
12
80
90
40
0

20
10
57
0
3
14
78
15
0
27
0
1

214
52
247
0
57
41
423
392
0
48
0
5

13

96

District of Columbia—all*

14

•Includes National and non-National banks in the District of Columbia, all of which are supervised by the Comptroller of the
Currency.




TABLE 4

Applications for National bank charters,* and charters issued,* by States, calendar 1968
Received]

United States

68

Alabama
Alaska...
Arizona
Arkansas
California
Colorado..
Connecticut
Delaware....
District of Columbia
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa.._
Kansas
Kentucky
Louisiana
Maine. Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire...
New Jersey
New Mexico
New York
North Carolina. . . .
North Dakota
Ohio
..Oklahoma
Oregon.-...Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin. Wyoming
•Excludes conversions and corporate reorganizations.
•(•Includes 16 applications pending as of Dec. 31, 1967.




Approved

16

Rejected

21

Abandoned

Pending
Dec. 31, 1968
28

Charters
issued

15

TABLE 5

Applications for National bank charters to be issued pursuant to corporate reorganizations, and charters issued, by States,
calendar 1968
Received

Approved

Rejected

Abandoned

Pending
Dec. 31, 1968

Charters
issued

United States

54

42

0

1

11

16

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

1
0
0
I
5
0
1
0
0
1

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

1
0
0
1
0
0
0
0
0
1

Georgia
Hawaii
Idaho.
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine

2
0
0
3
2
1
1
0
0
1

2
0
0
2
2
0
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
1
1
0
0
0

0
0
0
0
1
0
0
0
0
0

Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire

1
4
0
0
0
1
0
1
0
0

1
4
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
0
0
0

0
0
0
0
0
1
0
0
0
0

0
1
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
0
1
5
0
0
3
1
3
1

0
0
I
5
0
0
1
2
1

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
1
0
1
0

0
0
1
4
0
0
0
1
0
1

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

1
0
4
3
0
0
5
0
0
0
0

1
0
3
2
0
0
4
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
1
0
0
1
0
0
0
0

0
0
1
1
0
0
2
0
0
0
0




2

TABLE 6

Applications for conversion to National bank charters, and charters issued, by States, calendar 1968
Approved

District of Columbia
Florida
Georgia
Hawaii
Idaho
Indiana
Iowa
Kansas
Kentucky
Maine

Abandoned

...

15

2

0

4

0
0
0
1
1
0
0

o

0

0

o

o

0
0
1
1
0
0

0
0
0
0
0
0

0
0
1
1
0
0

o

o

o
o

0

o
o

o

o
1

0
o
0
o
1

0
o
0
o
1

o
o

o
o

o

o

2

2

0
o
0
o
2

0
o
0
o

0
0

o
o

o
o
o

o

o

0
o

o

0
o

0

0

o
0
o

0
o

0
o

0
o
0
2
3
o
0
o

0
o
0
o
1
o

0

0

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

1

0

0
o

0
o
0
1
0
o
1
o

0
o
0
1
3
o
0
o

o
0

0

0

0

o
0
o
0
o
1
0
0
1
0
o

o
0
o
0
o
o
0
0
1
0
o

0
0
o
0
o

0
0
0
0
0

1
0
o
0
o
0
0
0

o

o
o
o
o
o
o
n

o
o
o
o
o
o
n

o
o
o
o

o

0
0
0
0
0
0

o
0
0
0

o
0

0
0
0
0
0
0
0

©CO©

0
o
0
0
0
o
0
o

0
o

o

o

o
o
o

13

o

0

0
©©©©

o

0
0
o
0
o
1
0
0
0
0

o

o

oooo

o

o

0
0

0
0
0
0
0

0
0

ooo

>©CO©

•Includes 2 applications pending as of Dec. 31, 1967,




o

o
0
o

0
o
0
3
4
o
2
o

10

Charters
issued

21

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

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

Pending
Dec. 31,1968

©oooooc

United States
Alabama
Alaska
Arizona
Arkansas.
California
Colorado
Connecticut

Rejected

ooooo©©

Received*

1

0

o
0
1
0

TABLE 7

Branches of National banks, calendar 1968

Branches in
operation
Dec. 31, 1967

Existing
De novo
Branches
branches
branches
opened for
discontinued
business
or consolidated
merger or
Jan. 1-Dec. 31,
Jan. 1-Dec. 31,
conversion
1968
1968
Jan. 1-Dec. 31,
1968
405

83

151
41
185
70
1,903
0
189
4
54
0

1
0
0
1
266
0
0
0
3
0

0
0
5
0
23
0
5
0
0
0

137
41
102
8
285
43
25
122
148
76

2
0
0
0
6
1
0
0
0
7

0
0
0
0
0
2
0
0
0
0

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

207
372
'489
6
109
19
18
37
29

5
2
0
0
7
0
0
0
18
1

0
2
2
0
1
0
0
0
0
0

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

496
59
1,078
292
9
'605
30
220
885
56

3
1
7
19
0
4
0
2
29
0

0
0
12
2
0

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

209
48
242
0
56
38

0
1
0
0
1
2
13
3
0
0
0
0

Branches
in operation
Dec. 31, 1968

3
0
0
0
1
0
8
0
0
1
0
0

< 9, 987
•

United States.
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia. .
Florida
Georgia. . .
Hawaii....
Idaho
Illinois....
Indiana. . .
Iowa
Kansas....
Kentucky.
Louisiana.
Maine

District of Columbia—all*.

""I

396
370
0
24
0
3

492

0
0
15
0

91

•Includes National and non-National banks in the District of Columbia, all of which are supervised by the Comptroller of the
Currency.
'Revised.




TABLE 8

De novo branch applications of National banks, by States, calendar 1968
Received*

Approved

Rejected

United States

1,166

628

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

11
2
21
4
195
0
17
0
2
0
6
0
7
23
24
10
3
10
18
12

5
0
1
22
18
8
3
6
13
10

Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire

34
29
70
0
25
2
0
5
13
9

19
17
17
0
9
1
0
4
5
4

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

46
5
106
51
1
60
3
21
66
5

19
4
57
25
0
41
2
12
44
4

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

18
2
15
0
7
3
46
53
0
104
0
2

Pending
Dec. 31,1968

7
1
14
3
94
0
13
0
1
0

Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine

Abandoned

12
1
10
0
3
2
29
31
0
35
0
2

171

106

District of Columbia—allf
•Includes 259 applications pending as of Dec. 31, 1967.
flncludes National and non-National banks in the District of Columbia, all of which are supervised by the Comptroller of the
Currency.

12




TABLE 9
De novo branches of National banks opened for business, by community size and by size of bank, calendar 1968

Category
In cities with population:
Less than 5,000
5,000 to 24,999
25,000 to 49,999..
50,000 to 99,999.
100,000 to 249,999...
250,000 t o 4 9 9 , 9 9 9 . . .
500,000 to 1,000,000.
Over 1,000,000

'ranches
120
160
160
67
51
35
25
18
16

Category
Branches
By banks with total resources (in millions of dollars):
Less than 10.0
68
10.0 to 24.9
. .
85
67
25.0 to 49.9
44
50 0 to 99.9
138
100.0 to 999.9 .
90
Over 1,000.0
Total

492

492

Total.

TABLE 10
Mergers,* calendar 1968
Applications carried over from 1967
Applications received 1968
Disposition of applications 1968:
Approvedf
Abandoned
Applications pending December 1968.
Transactions completed 1968:
Mergers
Consolidations
Purchase of assets.-

19
104
88
1
34
49
6
12

Total

67

The aggregate total of capital stock and capital accounts for the certificates issued are as follows:
Merging, consoliCharter or
dating, or
purchasing bank
selling banks
Combined
Capital stock
Capital accounts

$718, 768, 631
2, 780, 362, 098

$33, 001, 200
98, 838, 737

$753, 690, 468
2, 873, 456, 495

•Includes mergers, consolidations and purchase and sale transactions where the resulting bank
is a National bank.
f Includes three applications approved but withdrawn due to litigation.




13

IV. Bank Examinations and Related Activities
The National Bank Act requires that each National
bank be examined twice in each calendar year. However, the Comptroller may at his discretion waive
one such examination in a 2-year period or make more
frequent examinations if deemed necessary. In addition, the District Code authorizes the Comptroller to
examine each non-National bank and trust company
in the District of Columbia.
During the year ended December 31, 1968, the Office examined 6,492 banks, 12,124 branches and facilities, 1,704 trust departments and branches, and
130 affiliates. Three hundred and eighty-three special
examinations and visitations were made, nine State
banks were examined in connection with conversions
to National banks, and investigations were conducted
in connection with applications for 45 new charters
and 820 de novo branches.
The commercial examinations of banks and branches
included direct verification, primarily on a negative
basis, of a substantial percentage of loan and deposit
accounts in banks where internal controls were considered inadequate. Direct verification on a positive
basis was made on most dealer-discount lines that had
a delinquency ratio of 10 percent or more at the time
of the examination.
In 1968 the number of field examiners was increased
by about 12 percent to compensate for the increase
in National bank resources and to upgrade the quality
of examinations. The number of specialized Electronic
Data Processing (EDP) examiners, whose primary responsibility is to conduct separate examinations of data
processing installations of National banks, was increased from two to four for each of the 14 National
bank regions.
The examining division continued its efforts to de-




velop and implement new examining procedures. Plans
include a further increase in the examining staff by 10
percent to assist in the administration of the new procedures and regulations adopted to implement Public
Laws 90-389 (the Bank Protection Act of 1968),
and 90-321 (the Consumer Credit Protection Act).
Plans have been consummated to change our educational program. In this connection, programed instruction will be utilized for newly appointed examiners; this instruction will be supplemented by AIB and
other appropriate banking schools. An advanced
2-week school for newly commissioned examiners will
be held annually in Washington, D.C. The curriculum
will cover all areas of commercial bank examination.
The analysis of loans and investment securities will receive the most emphasis. Other subjects will include
the evaluation of the quality of the bank's operation,
investment in fixed assets, bank borrowings, leasehold
obligations, and other liabilities. Considerable time will
be devoted to courses on appraisal of asset quality,
diversification of risks, liquidity, capital adequacy,
earnings, future prospects, and bank management.
Other subjects are related organizations, problem
banks, and meetings with the board of directors.
Courses in planning and organizing examinations and
manpower utilization will also be included.
A number of changes were made in the commercial
report of examination during 1968. A new report form
for the examination of operating subsidiaries was
adopted. These subsidiaries may perform any business
function that the parent bank is permitted to perform.
Each subsidiary will be examined simultaneously with
the parent bank. Pertinent figures of the parent bank
and its operating subsidiaries will be consolidated
for the purpose of applying applicable statutory
limitations.

V. Litigation
Thirty-five cases challenging administrative actions
or rulings of the Comptroller were pending at the beginning of calendar 1968. The Comptroller became a
party to 10 new cases during 1968, and 18 cases were
terminated. Twenty-seven cases were pending on December 31, 1968. The more significant cases involved
the following subjects:

A. Incidental Powers Cases
Three cases were decided during 1968 involving allegations that National banks were exceeding the powers granted to them by the incidental powers clause
of the National Bank Act, 12 U.S.C. § 24 (seventh).
Two cases brought by data processing service bureaus
challenged the right of a National bank to offer data
processing services to other banks and bank customers.
ADAPSO v. Camp, 279 F. Supp. 675 (D. Minn.,
1968); The Wingate Corp. v. Industrial National Bank
of Rhode Island, 288 F. Supp. 49 (D.R.I., 1968). The
third case was brought by travel agencies to enjoin a
National bank from operating a travel agency. Arnold
Tours, Inc. v. Camp, 286 F. Supp. 770 (D. Mass.
1968). The Comptroller had ruled in each instance
that the activity involved was an incidental power
necessary to carrying on the business of banking.
Each of these three cases was dismissed by the district
court for lack of standing by plaintiffs to bring suit
in a Federal court. The only injury alleged by these
parties was loss of business due to competition. Competition, however, the courts ruled, is normal and must
be expected in a free enterprise society. Absent a statute
or some other legal protection designed specifically to
benefit plaintiffs against competition, competition itself—even if the result of allegedly unlawful action by
the competitor—does not constitute a wrong or injury to plaintiff which the courts could recognize.
All three cases were appealed and, at year's end,
had been argued and were awaiting decision by the
courts of appeals. The rulings on standing are significant because the courts have declared that they will
not attempt, upon the complaint of a competitor, to




substitute their judgment for that of bank customers
in determining what services are required as incidental
to banking. The cases are intrinsically significant because they are the first attempts by competitors of National banks to limit the permissible range of bank
activities solely upon the allegation that the activity
is unauthorized by the incidental powers clause—a
fundamental section of the National Bank Act.

B. Other Banking Powers
1. Bond Underwriting.—The court of appeals affirmed the lower court's decision, discussed in the 1967
annual report, that the Comptroller's ruling allowing
National banks to deal in so-called "revenue bonds"
was unlawful. Port of New York Authority v. Baker,
Watts, and Co., 392 F. 2d. 497 (D.C. Cir. 1968). The
Comptroller was not a party to the appeal. The Comptroller and the Board of Governors of the Federal
Reserve System disagreed on the merits of the appeal,
and the Solicitor General determined that neither
Government agency could appear in the court of appeals. Legislation was passed by the Senate which
would reverse this decision, but was not passed in the
House. The Housing and Urban Development Act
of 1968, however, modifies this decision to the extent
that National banks may now deal in and underwrite bonds for housing, university, and dormitory
purposes—regardless of whether such obligations are
backed by the full taxing power of the issuer.
2. Acting as Insurance Agent.—The court of appeals affirmed the lower court's decision that National banks lacked power to act as an agent in the
issuance of insurance incidental to banking transactions. Camp v. Georgia Association of Independent
Insurance Agents, 399 F. 2d 1010 (5th Cir. 1968).
The Comptroller had ruled that such activity was lawful. At year's end, the Solicitor General had not determined whether to seek review of this decision in
the Supreme Court.
3. Collective Investment Funds.—On November 27,
1968, the court of appeals heard argument on
15

the power of a National bank to operate a collective
managing agency account. Camp v. Investment Company Institute, D.C. Cir. No. 21,662. The district
court ruled adversely to the Comptroller, 274 F. Supp.
624 (D.D.G. 1967), and both the Comptroller and
First National City Bank of New York prosecuted appeals. The Comptroller contends that the plaintiff Investment Company Institute lacks standing to bring
the action, and that the activity in question is authorized to National banks. No decision was reached by
the court of appeals during 1968.

so-called loan production offices as "branches" and
attempted to forbid their establishment and operation
by National banks. The court of appeals' opinion recognized that State banking authorities, which are frequently controlled by the State bank competitors of
National banks, might " . . . make extreme use of
this . . . defining process . . ." to attempt to limit the
National banking system. The First National Bank
in Plant City filed a petition for certiorari seeking review by the Supreme Court, and the Solicitor General
authorized the filing of a similar petition on behalf of
the Comptroller.
In other litigation, the district courts in North CaroC. New Bank Charter Cases
lina upheld, on the basis of the Comptroller's administrative file, the Comptroller's approval of three
In Inter-Lakes National Bank v. Camp, Civ. No.
branches of National banks. First-Citizens Bank &
31804 (E.D. Mich.), for the first time in the 104Trust Co. v. Camp, 281 F. Supp. 786 (E.D.N.C.,
year history of the Comptroller's Office, a group of
1968); Central Bank & Trust Co. v. Camp, M.D.N.C.,
organizers whose charter application had been disapCiv. No. C-4-D-66 (Feb. 23, 1968). Appeals were
proved sued the Comptroller to compel the issuance
taken and argued in the First Citizens cases, but no
of their charter. The complaint wasfiledon October 3,
decisions had been rendered at year's end by the court
1968, but no further proceedings had been taken by
of appeals. The issues include: (1) Whether the Compyear end.
troller must conduct a formal hearing before approvThe Supreme Court denied a petition for certiorari
ing a branch application, (2) the scope and nature
in Citizens National Bank of Hattiesburg v. Camp,
of judicial review of the Comptroller's decision, and,
391 U.S. 904 (1968). The Court thus left standing
(3) whether the Comptroller must make certain forthe court of appeals decision that the Comptroller has
mal findings concerning such matters as the need for
broad discretion to grant new bank charters, and
the new branch in conformance with the North Carothat the Comptroller need not hold an administrative
lina State statutes. These statutes require the State
hearing prior to granting the charter application. The
bank supervisor to make such findings in approving
court of appeals specifically reserved the question of
branch applications of State banks.
the standing of a competing bank to litigate.
A district court in Ohio also accepted the Comptroller's administrative file as the basis for granting
summary judgment for the Comptroller. The Ohio
D. Branch Cases
Bank and Savings Company v. Tri-County National
Bank, N.D. Ohio, Civ. No. C-67-121 (June 28, 1968).
In a most significant ruling, the Court of Appeals
The court noted, concerning the Comptroller's procfor the Fifth Circuit held that State law, including
essing of the application, that " . . . a formal adversary
interpretations by the State banking commissioner, and
hearing is not necessary either under the Due Process
not Federal law, defines those off-premises activities of
Clause, the National Bank Act, or the Administrative
a National bank that may be prohibited as a "branch."
Procedures Act."
Dickinson v. First National Bank in Plant City, 400
Similarly, the Comptroller's approval of the appliF. 2d 548 (5th Cir., 1968). A similar result was reached
cation of a National bank to move one of its branches
by a district court in Georgia, relying upon the Plant
to another location within the city of Farmington,
City case. Jackson v. First National Bank in Cornelia, Mich., was sustained in Metropolitan National Bank
N.D. Ga., Civ. No. 1191 (Oct. 21, 1968). The parof Farmington v. Camp, 281 F. Supp. 238 (E.D. Mich.,
ticular off-premises activity at issue in these two cases
1968). The plaintiff bank unsuccessfully contended
was the operation by the National bank of an armored
that this relocation was not a move of an existing
car messenger service to collect and deliver funds to
branch, but the establishment of a new branch proand from customers. In reliance upon the Plant City
hibited in this situation by Michigan law. The court
case, however, State bank supervisors in at least six
found, on the basis of the Comptroller's administrative
file, that the Comptroller had not abused his discretion.
States have defined off-premises deposit machines and
16




Another branch approval was upheld on the basis
of the Comptroller's administrative file in Mid-West
National Bank of Lake Forest v. Comptroller of the
Currency, N.D. 111., Civ. No. C 1423 (June 14, 1968).
Of particular interest, the court held it need not consider facts and arguments not presented administratively to the Comptroller. It characterized contentions
raised for the first time in litigation as ". . . an afterthought, brought forward at the last possible moment
to undo administrative proceedings. . . ."
In Security Bank v. Saxon, E.D. Mich., Civ. No.
26303 (Sept. 20, 1968), the sole issue in the case was
whether the challenged branch was within a "village"
as that term is defined by Michigan law. The court
again accepted the Comptroller's decision on the basis
of his administrative file and held, citing Warren Bank
v. Camp, 396 F. 2d 52 (6th Cir. 1968), that "a trial
de novo is not required for every complaint where
abuse of administrative discretion is plead."
However, in Industrial State Bank and Trust Company v. Camp, W.D. Mich., Civ. No. 5686 (June 10,
1968), the district court refused to limit itself to the
Comptroller's administrative file, and held a trial
de novo, including an "autoptic" survey of the area
in question. Based on this on-the-spot examination of
the proposed service area of the new bank, the district
judge concluded that no need existed for a branch
and overturned the Comptroller's approval. The
Solicitor General had not decided by the end of 1968
whether to appeal this decision.

E. Merger Cases
Activity in merger litigation during 1968 in the
Comptroller's Office eclipsed that experienced in the
most active previous year, 1967.
The Comptroller was a party to each of 13 bank
merger cases that were either terminated or begun in
1968. Their status is as follows: One case was decided
by the district court in Philadelphia; one was reversed
and remanded by the Supreme Court, and, upon remand, terminated by consent judgment; one that had
been remanded by the Supreme Court in 1967 was
terminated by consent judgment; one was dismissed
upon appeal from a judgment of a three-judge district
court favorable to the banks; one was tried before the
district court in New Jersey, with decision pending;
three are in various stages of preparation for trial; and
five were terminated because the banks abandoned the
proposed mergers after court action was initiated by
the Antitrust Division.




On February 12, 1968, U.S. v. Provident National
Bank, 280 F. Supp. 1 (E.D. Pa., 1968), was decided
after a trial of the issues. The district court enjoined
the banks from carrying out the merger, ruling that
it was anticompetitive and would further a trend toward concentration. In addition, the court determined
that the banks had not met their burden of proving
that the proposed merger would have the probable
effect of meeting the convenience and needs of the
community. However, the court also found that mutual
savings banks and savings and loan associations do
compete with commercial banks for the savings dollar and mortgage loans.
The Supreme Court, in its decision of March 4,
1968, in U.S. v. Third National Bank of Nashville,
390 U.S. 171, reversed the district court's finding that
the merger did not violate the Clayton Act and remanded the case for further proceedings. In reversing
the decision of the lower court, the Supreme Court
found that the proposed merger was anticompetitive.
The Supreme Court did point out that, if a merger
posed a choice between preserving competition and
satisfying the requirements of convenience and need,
the Bank Merger Act of 1966 mandated that injury
and benefit were to be weighed, and that a decision
must be made upon the basis of which alternative
better served the public interest. After reviewing the
case, the Supreme Court remanded it to the district
court for a proper weighing of the convenience and
needs and of the anticompetitive effects. After remand
and prior to trial, a final consent judgment was entered on September 19, 1968, permitting the merger
upon condition that the resulting bank, among other
things, organize a new bank at the location of the
acquired bank. In December 1968, pursuant to the
consent judgment, a new bank was formed under a
State charter.
The case of U.S. v. Mercantile Trust Co., N.A.
(E.D. Mo., Civ. No. 65 c-241(l), CCH Trade Reg.
Rep. Par. 45,065, Case No. 1858) was begun in 1965.
In October 1967, the Supreme Court reversed a dismissal by the district court of the Justice Department's complaint and remanded the case (389 U.S.
27). Thereafter, prior to trial, a consent judgment
was entered on April 4, 1968 allowing the merger, but
requiring that the resulting bank organize a new bank
(CCH 1968 Trade Cases Par. 72,379).
The Justice Department decided not to pursue an
appeal from a judgment of a three-judge district court
of the Northern District of California. That judgment, rendered in October 1967, upheld the merger
and dismissed the Justice Department's complaint.
17

(U.S. v. Crocker-Anglo National Bank, 277 F. Supp.
133; and see 1967 Annual Report, Comptroller of the
Currency, p. 16). On April 9, 1968, the undocketed
appeal of the Justice Department was dismissed (GCH
Trade Reg. Rep. Par. 45, 063, Case No. 1757).
On January 16, 1968, the Justice Department
brought suit to enjoin a proposed merger between
Phillipsburg National Bank and Trust Company, with
deposits of $22.4 million, and The Second National
Bank of Phillipsburg, with deposits of $16 million
(U.S. v. Phillipsburg National Bank and Trust Co.,
D.N.J., Civ. No. 56-68, CCH Trade Reg. Rep. Par.
45,068, Case No. 1986). The action by the Justice
Department was unusual considering the comparatively
small size of the two participant banks. The trial occurred from September 11 to September 26, 1968. The
time period between the filing of the complaint by
Justice and the commencement of trial was the shortest experienced to date in the field of bank merger
litigation. This case involves the meaning and thrust
under the Bank Merger Act of 1966 of the phrase "convenience and needs."
The Justice Department filed suit on May 28, 1968,
to enjoin two proposed mergers in the State of Mississippi (U.S. v. The First National Bank of Jackson and
U.S. v. Deposit Guaranty National Bank, S.D. Miss.,
Civ. Nos. 4310 and 4311, Trade Reg. Rep. Par. 45,068,
Case Nos. 2002 and 2003). Both cases essentially involve questions of potential competition and its byproduct, de novo branching, and the convenience and
needs of the community to be served. The Comptroller's position, generally, is that the proposed mergers
are not anticompetitive. Further, any minor anticompetitive aspects are clearly outweighed in the public
interest by the probable effects of the transaction in
meeting the convenience and needs of the community.
Specifically, the crux of the Comptroller's position on
the issue of convenience and needs is that the resulting

18




larger banks will supply much of the capital needed to
stimulate Mississippi's lagging economy, and will help
to overcome the State's serious capital deficit problem
by retaining funds within the State. Trial in The First
National Bank of Jackson case will be held in April
1969.
On August 16, 1968, the Justice Department filed
suit to block the proposed merger between First National Bank of Maryland and First National Bank of
Harford County (U.S. v. First National Bank of Maryland, D. Md., Civ. No. 19801, CCH Trade Reg. Rep.
Par. 45,068, Case No. 2012). In essence, the issues and
the Comptroller's position, generally, are the same as
in the two Mississippi cases. Here, however, the Comptroller's stance concerning convenience and needs is
that the larger commercial bank will supply the additional loanable funds needed, but not now available,
in order to serve a growing industrial and commercial
community, and will provide other services not being
supplied by the existing local banks.
The banks in the followingfivecases abandoned their
merger plans after the Justice Department filed suit:
U.S. v. National Bank and Trust Co. of Central Venn.,
N.D. Pa., Civ. No. 10214, CCH Trade Reg. Rep. Par.
45,067, Case No. 1964, filed October 12, 1967, dismissed February 2, 1968; U.S. v. County National
Bank, S.D.N.Y., Civ. No. 67-4906, CCH Trade Reg.
Rep. Par. 45,067, Case No. 1981, filed December 14,
1967, dismissed May 14, 1968; U.S. v. New Jersey National Bank & Trust Co., D.N.J., Civ. No. 55-68, CCH
Trade Reg. Rep. Par. 45,068, Case No. 1985, filed January 16,1968, dismissed March 22,1968; U.S. v. Bank
of Las Vegas, D. Nev., Civ. No. R-2100, CCH Trade
Reg. Rep. Par. 45,068, Case No. 2013,filedAugust 23,
1968; U.S. v. Pennsylvania National Bank & Trust
Co., ED. Pa., Civ. No. 68-2025, CCH Trade Reg. Rep.
Par. 45,068, Case No. 2017, filed September 17, 1968.

VI. Fiduciary Activities of National Banks
Significant increases occurred during 1968 in the
value of assets held, and in the number of fiduciary
accounts handled in the trust departments of National banks. The substantial growth in existing National bank trust departments was augmented by
several conversions to National charters of State banks,
having sizeable trust departments. In addition, 54 National banks applied for permission to exercise fiduciary powers, and 41 received approval, bringing the
number of National banks with fiduciary powers to
1,919 at year end.
The Comptroller thus has responsibility for the
supervision of more trust departments and more trust
assets, than any other bank regulatory agency. These
responsibilities have necessitated a high degree of specialization in the Trust Division, whose jurisdiction
also extends to the regulation of common trust funds
for both State and National banks.
Many steps were taken during 1968 to improve
trust department supervision, with a view to providing
maximum attention to accounts under administration,
while maintaining flexibility and responsiveness to
novel circumstances. In September, a 2-week school
was held in Washington for assistant trust examiners,
covering through lectures and discussions by recognized
banking authorities all facets of trust department operations. Members of the Comptroller's staff offered
a thorough review of applicable regulations, instructions, and procedures. Trust examiners from the State
banking departments of Michigan, Illinois, Iowa, Kansas, Ohio, and Wyoming were also in attendance.
During the year Regulation 9, governing the exercise of fiduciary powers by National banks, was
amended to require more detailed cost information
in common trust fund annual reports. Also, some obsolete provisions were deleted. Draft revisions were




prepared which would have put into effect the portions of the proposed mutual fund reform legislation
pertaining to bank-operated collective investment
funds, had that measure been enacted by Congress.
This Office expects that such an amendment of these
regulations will be necessary when the question of the
collective investment of managing agency accounts is
finally resolved by legislative or judicial action. Either
the existing provisions will have to be deleted, or, if
the authority of banks to enter this area is confirmed,
revised and expanded rules concerning the operation
of these funds will be required.
A revision of the Manual of Instructions for Rep-

resentatives in Trusts was drafted during 1968 for 1969
publication. This revision brings the Manual up-todate, reflecting new procedures and the most recent
interpretations and policies of this Office.
After a number of conferences with officials of the
Federal Reserve and the FDIC, a uniform trust department annual report was devised. These agencies
used for the first time in 1968 the same system, based
upon market values of assets held, as is employed by
the Comptroller.
The review of trust department examination reports
in the Washington office was revised during 1968 in
order to provide greater efficiency. A rotating system
was put into effect whereby outstanding young assistants or associates in trust in the field are brought
into the Washington office for a period of 18 months
or longer. They are put in charge of conducting the
initial analysis and review of examination reports. This
system contributes significantly both to the prompt and
detailed analysis of these reports and to the acceleration of their training for broader subsequent service
in the field.

19

VII. International Banking and Finance
During the early months of 1968, the major industrial countries were adjusting to the devaluation of
sterling by Great Britain the previous November. Foreign exchange markets continued to be unsettled, culminating in the gold crisis in March. As a result of the
fear of renewed pressure on the major currencies, the
leading gold markets were closed for 1 month. Soon
after, an historic agreement among the leading industrial nations established the two-price system for gold:
central banks would buy and sell gold to each other at
the official price of $35 an ounce, or its equivalent in
other currencies, while private gold transactions would
occur in a free market.
In May the members of the IMF, after 5 years of
debate and negotiation, were asked to consider a contingency plan to establish a new international reserve
system, paper gold or SDR's (special drawing rights).
In July the United States became the first major industrial country to approve the plan. International
money markets were turbulent again in November
when the relationship between the French franc, the
German mark, and other currencies underwent new
stresses.
The year saw a significant expansion of foreign
branches of U.S. banks. Sixty-seven new branches were
established by 15 National banks, bringing the total to
354. National banks now account for 95 percent of the
total foreign branches of U.S. banks. On December 31,
1968, the total resources of the foreign branches of
National banks were $16.0 billion, compared with
$11.9 billion in 1967.
During 1968 American banks with foreign branches
made increased use of Euro-dollars, both for meeting
loan demands abroad and for providing temporary additions to head-office liquidity. At the end of the year

20




"borrowings" by head offices from foreign branches of
National banks totaled $3.5 billion.
During the year the number of National banks operating Edge or agreement subsidiaries increased from 21
to 28. They maintained a total of 37 Edge corporations
and one agreement subsidiary. During the year, regional National banks organized a jointly owned Edge
Act subsidiary to conduct an international banking
business in New York City.
National banks have also made increased use of the
1966 legislation authorizing direct equity investments
in foreign banks. Previously, these foreign investments
were only made indirectly by National banks through
their Edge and agreement corporation subsidiaries.
This new provision has provided banks with increased
opportunities and flexibility in international finance.
U.S. banks have joined with overseas banks in establishing numerous specialized financial institutions,
such as development and medium-term credit banks.
They have also increased their equity participations in
foreign banks.
For the second year the International Division held
its International Banking Seminar. The 1968 session,
conducted in New York and Washington, considered
commercial letters of credit, bankers acceptances, foreign exchange, the Euro-dollar market, Edge Act corporations, and the government regulations applicable
to foreign branches and affiliates. Issues raised by development financing were taken up in a discussion of
monetary problems and economic development, and
regional studies this year focused on banking in Japan.
Seminar leaders came from the International Division
of the Comptroller's Office, the Federal Reserve Board,
the Treasury Department, the State Department, National banks, the Export-Import Bank, the InterAmerican Development Bank, and the World Bank.

TABLE 11

Foreign branches of National banks, by region and country, Dec. 31, 1968
Region and country

Latin America

Number

,

176

Argentina
Bahamas
Bolivia
Brazil..
Chile
Colombia
Dominican Republic
Ecuador
._
El Salvador
Guatemala
Guyana
Honduras
Jamaica
Mexico
Nicaragua
Panama
Paraguay
Peru
Trinidad
Uruguay.
Venezuela
Virgin Islands (British)
West Indies
Europe

....

Austria
Belgium
France
Germany
Greece
Ireland
Italy
Netherlands
Switzerland
United Kingdom




Region and country

Number

Africa
Liberia
Nigeria
Near East
Dubai
Lebanon
Saudi Arabia
Far East

62

Hong Kong
India
Indonesia
JaPan
Korea
Malaysia
Okinawa
Pakistan
Philippines
Singapore
Taiwan
Thailand
Viet-Nam
U.S. overseas areas and trust territories
Canal Zone
Guam
Puerto Rico
Truk Islands
Virgin Islands
Total
-

1
3
2
~72

12
11
5
12
3
5
2
4
4
8
2
2
2
35

2
2
17
1
13
354

Military banking facilities

21

VIII. Economic Analysis and Related Activities
The Department of Banking and Economic Research and its affiliated Statistical Division continued
to provide economic and statistical analyses of current
banking issues and problems, both for internal use and
for public dissemination.
Two publications were well-received during 1968:
The Comptroller and Bank Supervision and Commercial Bank Entry Into Revenue Bond Underwriting.
The first, although dealing primarily with the Comptroller of the Currency, comes close to being a history
of bank regulation in this country. The later provides
estimates of the public benefit that would accrue were

22




commercial banks allowed to underwrite revenue
bonds.
In cooperation with the other Federal banking agencies, and after consultations with State banking authorities and banking industry representatives, the quarterly
Report of Condition and the annual Report of Income were revised thoroughly. The result of more than
a year's meetings and negotiations, the revisions were
promulgated to take effect with the first call report of
1969. The requirements for accrual accounting, consolidation of subsidiaries, and tax reporting on a current basis, among others, will provide better banking
data for regulatory and research purposes.

IX. Administrative and Management
Developments
During 1968, the Office of the Comptroller of the
Currency experienced many administrative improvements in its continuing effort to streamline office
operations. The Administrative department was reorganized to establish five cordinate divisions reporting
directly to the Administrative Assistant to the Comptroller. They are: Personnel, Fiscal Management, Internal Audit, Management Services, and Administrative Services. The Management Services Division was
newly established to review managerial practices and
to cordinate and direct various projects, such as office
automation and the development of information systems. The Administrative Services Division was
elevated to the status of a full division.
The Fiscal Management Division's mission to improve the Comptroller's financial management system,
initiated during the prior year, continued through
1968. Most notable achievements were: (1) Computerization of payroll operations in cooperation with the
Personnel Division and the Management Services Division; (2) completion of systems and design work
for converting accounting records from a manual to
a machine operation; (3) improved management of
the Office's cash position so as to maximize investment income; and, (4) issuance of new and comprehensive travel regulations.
Early in 1968, the Comptroller's Office entered into
a service agreement, whereby the Fiscal Service of the
U.S. Treasury Department would perform the Comptroller's payroll operations on its computer facilities.
The Fiscal Service payroll system serves the Comptroller's requirements and is readily integrated into the
Office's responsibility-centered cost accounting system.
The conversion coincided with the beginning of the
1969 income tax year and the installation of the Office's cost accounting system.
The payroll conversion has allowed the electrical
accounting machines to assume other accounting and
related operations at no additional cost. In addition,
the electrical accounting machine equipment has been




upgraded at a minimal cost increase, enabling the
Office to achieve greater flexibility and speed in accounting operations.
The systems and design work to convert fully the
Office's financial management system from a manual
to a machine operation has been completed. One of
the important features of the new system is the use of
a punched paper tape application obtained as a byproduct of regular operations, which will result in
savings. More important, however, is the fact that the
system will produce information on a responsibilitycentered basis at the lowest level of line management.
One of the major programs of the Fiscal Management Division has been the projection of cash requirements for the Comptroller's Office so as to maximize
investment opportunities and increase income. During
1968 the investment income of the Office reached a
milestone by exceeding $1 million. Compared to 1967
figures, this represents an increase of $216,931, or
26.9 percent.
New and comprehensive travel regulations were issued during 1968, making possible the submission and
processing of travel expense claims on a more uniform
and timely basis. Also, the functions of auditing travel
vouchers was removed from our 14 regional offices
and centralized in headquarters, with a resultant saving in manpower.
Since its commencement, the Fiscal Management
Division has absorbed two statutory pay increases in
addition to internal promotions, has reduced total
salary costs by nearly $50,000, and has decreased its
work force by eight employees through attrition.
The Personnel Division broadened its activities to
provide for a more progressive and well-rounded personnel management program. An experienced specialist in position evaluation and pay matters was
appointed to administer a formalized pay program to
complement present recruitment, employee development, and personnel processing functions.
23

A new program for within-grade increases was developed and implemented during 1968. The new procedures brought consistency with other Federal
agencies and established separate procedures for periodic step increases, high-quality increases, and Incentive Awards. It also clarified the purpose of each type
of pay increase and outlined the circumstances for
granting the various pay increments. Supervisors now
are notified automatically of employees whose periodic
step increases are coming due, and pay actions are
processed automatically on an exception basis.
Several projects were initiated to provide for a more
equitable and modern pay system. An extensive fact
finding study was conducted of National bank examining positions for the purpose of developing written
evaluation standards and appropriate distinctions in
pay levels, including consideration of an appropriate
career ladder for assistant National bank examiners.
A related project, begun in 1968, is designed to provide
a staffing pattern and grade structure for each region
based on an analysis of workload. The basic objective
is to achieve more effective manpower utilization by
matching the skills levels of National bank examiners
to the responsibility and complexity of the examination
assignment. The study includes an evaluation of the
proper role of the Examiner-in-charge to determine if
sufficient emphasis is being given to the "management"
function.
The Comptroller's Office has been confronted with
an ever-increasing need for quality manpower due to
the rapid growth and increasing complexity of the
banking industry. To meet this demand for professionals, the Office established ambitious recruiting goals
and new techniques during 1968. The 1968 recruitment goal was substantially met with an increase of
146 examiners.
In a constant effort to utilize the newest and most effective recruiting methods, this Office supplemented its
on-campus recruiting with a computerized system of
recruitment, which realized a significant student response. "The World of Banking" recruitment brochure
was revised to reflect the expanding programs in the
Office. In addition, two of the regions participated in a
career exposition that yielded a large number of interested candidates. The third annual recruiter's conference was held in Washington to coordinate and
establish 1969 recruiting goals. It was devoted in part
to recruiter training in interview methods and college
relations.
Through an improved partnership between line
management and the Personnel staff, progress was
made in meeting anticipated manpower needs and in24




creasing opportunities for the under-utilized. Fact-finding during the year included analysis of recruitment
sources, occupational skills, and employee development opportunities.
During 1968 the incentive awards program received
special emphasis. The number of suggestions received
increased by 50 percent and the number of suggestions
adopted rose by 57 percent. However, the most notable
accomplishment was an increase in annual savings of
over 794 percent. The processing of suggestions was
improved by delegating authority for adoption and rejection to the regional level.
All phases of the office training program received
new attention. A study was conducted by this Office
with the assistance of the Treasury Department and
the Civil Service Commission to determine the involvement of young professionals in the programs that
affect their careers. Of special concern was the training
received by them. As a secondary aim, the study sought
to solicit suggestions that would make the employee
development program more responsive to those
employees.
An educational needs survey was conducted, which
enabled the Employee Development Office to structure effectively its training program, giving special
emphasis to executive development and behavioral
science training. Management personnel from each of
the 14 National bank regions participated in the Civil
Service Executive Seminars at Kings Point and at
Berkeley. Communications training was also conducted
for supervisory field personnel in three regions. In addition, in-house training was made available to Washington Office secretaries in the behavioral aspects of
their jobs.
Throughout the year, an attempt was made to communicate more effectively with the regions through
field visits by Personnel Division representatives. Group
interviews were held with National bank examiners
and with assistant National bank examiners to better
identify personnel problems affecting the examining
staff. Particular attention was given to exploring new
and better approaches to personnel programs.
During 1968, the Management Services Division
established a formalized reporting system for all administrative divisions for purposes of compiling and
analyzing programs and activities, and making appropriate recommendations to the Administrative Assistant to the Comptroller. Three computer specialists
were assigned to the division in anticipation of greater
Office demands for automated systems. An automation
project was initiated to extract data from bank exami-

nation reports, which will create a standardized, historical file wth rapid retrieval capabilities for management's use.
During 1968, the Internal Audit Division was reorganized by a professional certified public accountant.
The fresh evaluation resulted in the establishment of
internal audit objectives, more effective internal audit
practices and standardized reporting procedures, and
personnel qualifications for the audit staff. A new Internal Audit Manual was issued, outlining prescribed
performance standards for that staff.
The theme of activity in the Administrative Services
Division was decentralization through reorganization
and staffing. An experienced purchasing officer was
appointed to supervise all procurement activities and
to review and restructure procurement policies and
procedures as necessary. In addition, a professional
records officer was appointed to direct a comprehensive records and paperwork management program applicable to the entire organization. His area of responsibility embraces the supervision of a reorganized
central records section and a new microfilm section
(equipped with microfiche capabilities), and the development of a formal records management program.




A new publications branch was established to centralize production and distribution of all Office publications. An editorial and production manager was
appointed and made available to all segments of the
Office. A publications control officer was appointed
and placed in charge of the inventory and distribution
of all publications.
Nineteen sixty-eight was an extremely active year
in the area of space management. Negotiations were
either completed or substantially accomplished for the
removal of four of the 14 regional headquarters to new
modern office buildings. In addition, programs were
begun to remodel two other regional offices.
For the 5-year period 1964 through 1968, the Office
has maintained a remarkably good safety record. The
accident frequency rate has averaged 1.98, and in 1968
the accident frequency was 1.84. During this period,
exposure to automobile accident hazards increased considerably. In 1964, employees traveled over 7,480,391
miles in performance of their duties. In 1968, travel
increased to 11,863,509 miles. The accident rate has
been kept low through careful screening of authorized
drivers and a continuous information program designed
to alert employees to driving hazards.

25

OFFICE OF THE COMPTROLLER OF THE CURRENCY
Chart of Organization

National Advisory

Administrative
Assistant to the
Comptroller

Banking Policies

Deputy
-

ISSSSS

AdminiKeAsst.
(Personnel)

Special
Assistant
(Congressional
Affairs)

[FDIC Affairs)

Special
Assistant
(Public Affairs)

Direct!
Administr
istrative
Sendees'

Deputy Director

1
Department

Economic
Research

• ADVISORS




Deputy
Administrative Asst.
(Fiscal Management)

CoSler

hiittse,

1

Statistical
Division

Division

1
Mergers and
Consolidations

New Bank
Branch

1
Capital
Increase
Branch

ICORPORATE I

1
Branch
Applications

Director
Internal Audit
Division

VBIADMJNISTRATIVEB^

X . Financial Operations of the Office of the
Comptroller of the Currency
The continued vigorous growth of the National
banking system is reflected in the financial operations
of this Office for calendar year 1968. Income and expenses attained record levels, but the growth in Comptroller's equity declined for the second year in a row.
Revenue for 1968 amounted to $26.4 million, an
increase of $2.6 million over 1967. This increase is
chiefly the result of the $27.4 billion growth in National bank assets. Revenue from assessments on National banks was $22.7 million, an increase of 9.9
percent compared to 1967.
Revenue from investments showed a substantial increase for the second straight year, reflecting rising interest rates and the continuing effort to keep cash
funds fully invested. Revenue from this source
amounted to $1.0 million (an increase of 26.9 percent)
and represents more than half of the $1.8 million addition to Comptroller's equity for 1968.
Revenue from trust and special examinations, branch
investigations, new charter fees, and merger and consolidation fees amounted to $1.9 million, an increase of
$207,000 over 1967. All other income categories had
a net increase of $114,000.




Expenses for 1968 totaled $24.6 million compared to
$21.5 million for 1967, or an increase of $3.1 million.
On a percentage basis, this amounts to a 14.3-percent
rise in expenses, or 3.4 percent more than the rise in
total revenue. The rise in operating costs is attributable to the increased personnel and travel required of
this Office to meet effectively demands resulting from
the tremendous growth of the National banking system.
Salaries, related payroll expenses, and travel expenses amounted to $23.1 million, or 94 percent of
total expenses. These expenses, which account for most
of the increased operating costs, were higher due to:
(1) Pay increases under the Postal Revenue and Federal Salary Act of 1967 (which seeks to achieve comparability with private industry); (2) an 8-percent
increase in the average number of examining personnel; and, (3) more liberal per diem and travel allowances to compensate the examining staff for the rising
costs of travel. The remaining expenses, amounting to
$1.5 million, increased by $47,192 over 1967.
The Comptroller's equity represents the accumulated excess of receipts over expenditures retained by
the Office for possible future contingencies. The equity
account reached $13,427,000 at year end.

27

TABLE

12

OFFICE OF THE COMPTROLLER OF THE CURRENCY
BALANCE SHEET
December 31
1968
Current assets:
Cash
Obligations of U.S. Government, at cost (approximates market value)
Accounts receivable
Accrued interest
Travel advances
Prepaid expenses and other

1967

Fixed assets, at cost:
Furniture and fixtures
Office machinery and equipment
Less accumulated depreciation

$310, 202
621, 841
58, 952
134,903
10, 360
27, 376

5, 738, 187

Total current assets
Obligations of U.S. Government and Government sponsored agency, at cost (approximate
market value $11,691,000 and $13,454,000)

$68, 784
5, 036, 543
43, 499
215, 758
342, 261
31, 342

1, 163, 634

12, 388, 124

14, 159, 733

721, 106
374, 314

654, 368
315, 960

1, 095,420
397, 648

970, 328
303, 318

697, 772

667, 010

$18, 824, 083

Total assets

$15, 990, 377

$106, 073
80, 928
1, 143, 142

$152, 280
77, 531
218, 088

Liabilities and Comptroller's Equity
Current liabilities:
Accounts payable
Salary deductions and withholdings
Accrued travel and salary
Total current liabilities
Accumulated annual leave
Closed receivership funds
Total liabilities
Comptroller's equity
Total liabilities and Comptroller's equity

28




1, 330, 143

447, 899

1,358,428
2, 708, 266

1, 225, 628
2, 704, 527

5, 396, 837

4, 378, 054

13,427,246

11,612,323

$18, 824, 083

$15, 990, 377

TABLE

13

OFFICE OF THE COMPTROLLER OF THE CURRENCY
STATEMENT OF REVENUE, EXPENSES
AND COMPTROLLER'S EQUITY
Year ended December 31
1968
1967
Revenue:
Semi-annual assessments
Examinations and investigations
Examination reports sold
Revenue from investments
Other

Comptroller's equity at beginning of year
Comptroller's equity at end of year




23, 833, 258

18, 046, 635
1, 357, 766
2, 373, 267
1, 361, 706
300, 057
68, 214
262,317
100, 899
27, 634
102, 436
235, 565
77, 182
181,978
110, 487

15, 633, 374
1, 181, 144
1, 961, 520
1, 326, 106
273,519
80, 650
298, 050
92, 983
47, 963
96,471
214, 024
82, 094
109, 903
123, 920

24, 606, 143
s revenue over expenses

$20, 651, 935
1, 715, 862
502, 065
807, 647
155, 749

26,421,066
Expenses:
Salary
Retirement and other contributions
Per diem
Travel
Rent and maintenance
Supplies
Printing, reproduction and subscriptions
Depreciation
Remodeling
Office machine repairs and rentals
Communications
Moving and shipping
Employees education and training
Other

$22, 702, 406
1, 922, 967
511,860
1, 024, 660
259, 173

21,521,721

1, 814, 923

2,311,537

11,612,323
$13,427,246

9, 300, 786
$11,612,323

29

TABLE 14
OFFICE OF THE COMPTROLLER OF THE CURRENCY
STATEMENT OF SOURCE AND APPLICATION OF FUNDS
YEAR ENDED DECEMBER 31, 1968
Funds were provided by:
Excess revenue over expenses
Add charges not requiring current outlay of funds
Depreciation
Net increase in accumulated annual leave
Net loss on sales of fixed assets

$1, 814, 923
100, 899
132, 800
3,765
2, 052, 387

Net decrease in investment in long term U.S; Government obligations
Net receipts of closed receivership funds
Total funds provided
Funds were applied to:
Purchases of furniture and fixtures
Purchases of machinery and equipment
Total funds applied
Excess of funds provided over funds applied, representing an increase in working capital

OPINION OF INDEPENDENT ACCOUNTANT
To the Comptroller of the Currency
Office of the Comptroller of the Currency
In our opinion, the accompanying balance sheet, the related statement of
revenue, expenses and Comptroller's equity and the statement of source and application of funds present fairly the financial position of the Office of the Comptroller
of the Currency at December 31, 1968 and the results of its operations and the
supplementary information on funds for the year then ended, in conformity with
generally accepted accounting principles applied on a basis consistent with that of
the preceding year. Our examination of these statements was 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.
PRICE WATERHOUSE & CO.
WASHINGTON, D.C.

February 4, 1969

30




1, 771, 609
3,739
3, 827, 735

68, 834
66, 592
135,426
$3, 692, 309

X I . Issuance of Currency
Treasury Department Order No. 95 (Revision No.
2) transferred the function of receiving, storing, and
shipping newly printed Federal Reserve notes from
the Comptroller of the Currency to the Bureau of Engraving and Printing, effective as of the close of business on April 19, 1968. This change in custodial
responsibility for newly produced Federal Reserve
notes caused the transfer of employees performing this
function from the Comptroller's Office to the Bureau
of Engraving and Printing. The ordering of Federal
Reserve notes to be printed and shipped to Federal
Reserve Banks continues to be the responsibility of the




Comptroller of the Currency. The change in custodial
responsibility simplified operating procedures, while
retaining satisfactory controls, and saved 4 man-years
and $37,000 for the Treasury Department.
During 1968, the Comptroller's Office authorized
1,290 shipments of new Federal Reserve notes
(2,131,704,000 notes with an aggregate value of
$12,138,300,000) to Federal Reserve Banks. Delivery
of 69,800,000 notes with an aggregate value of
$349,900,000 was made to the Treasurer of the United
States.

31

APPENDIX A

Merger Decisions, 1968




Merger* Decisions, 1968
Approvals

Approvals
Jan. 4, 1968:
The National Bank of South Dakota, Sioux Falls, S.
Dak.
American National Bank and Trust Company,
Rapid City, S. Dak.
Merger
Jan. 20, 1968:
First National Bank & Trust Company, Red Lion,
Pa.
The Industrial National Bank of West York, York,
Pa.
Merger

Page

39

40

42

Jan. 31, 1968:
The National Bank of Orrville, Orrville, Ohio
The First National Bank of Dalton, Dalton, Ohio
Merger

43

Feb. 16, 1968:
Mount Vemon National Bank and Trust Company
of Fairfax County, Annandale, Va.
The Colonial National Bank of Alexandria,
Alexandria, Va.
Merger

44

46

Feb. 24, 1968:
The Fidelity National Bank, Lynchburg, Va.
Planters Bank and Trust Company of Farmville,
Farmville, Va.
Merger

48

Feb. 24, 1968:
The Planters National Bank and Trust Company,
Rocky Mount, N.C.
Bank of Rich Square, Rich Square, N.C.
Merger

49

Feb. 27, 1968:
The Citizens National Bank of Wellsville, Wellsville,
N.Y.
The Cuba National Bank, Cuba, N.Y.
Consolidation

50

Feb. 29, 1968:
Silverlake National Bank, Los Angeles, Calif.
Republic National Bank of California, Los Angeles,
Calif.
Purchase

51

* Includes mergers, consolidations, and purchase and sale
transactions where the emerging bank is a National bank.
Decisions are arranged chronologically by effective date.

34




Page

53

Mar. 4, 1968:
First National Bank of Oregon, Portland, Oreg.
Grant County Bank, John Day, Oreg.
Merger

Jan. 26, 1968:
The National Bank of Commerce of Seattle,
Seattle, Wash.
Grandview Security Bank, Grandview, Wash.
Purchase

Feb. 9, 1968:
Western Pennsylvania National Bank, Pittsburgh,
Pa.
Brookline Savings & Trust Company, Pittsburgh,
Pa.
Merger

Feb. 29, 1968:
The State of New York National Bank, Kingston,
N.Y.
The Fallkill National Bank and Trust Company,
Poughkeepsie, N.Y.
Merger

54

Mar. 14, 1968:
The Fidelity National Bank, Lynchburg, Va.
Bank of Charlotte County, Drakes Branch, Va.
Merger

56

Mar. 15, 1968:
Pennsylvania National Bank and Trust Company,
Pottsville, Pa.
National-Dime Bank of Shamokin, Shamokin, Pa.
Merger

57

Mar. 22, 1968:
Colonial National Bank, Haddonfield, N.J.
Merchantville National Bank & Trust Company,
Merchantville, N J .
Merger

59

Mar. 22, 1968:
Southern National Bank of North Carolina,
Lumberton, N.C.
First National Bank in Henderson, Henderson, N.C.
Merger

60

Mar. 29, 1968:
National Bank and Trust Company, Charlottesville, Va.
The Bank of New Hope, New Hope, Va.
Merger

61

Mar. 30, 1968:
The Citizens and Southern National Bank, Savannah, Ga.
Commercial and Savings Bank of Augusta, Augusta,
Ga.
Purchase

62

Mar. 30, 1968:
The Miami Citizens National Bank and Trust
Company, Piqua, Ohio
The Bradford National Bank, Bradford, Ohio
Merger

64

Apr. 27, 1968:
The Lancaster National Bank, Irvington, Va.
Chesapeake Banking Company, Lively, Va.
Merger

65

May 1, 1968:
Cumberland County National Bank and Trust
Company, New Cumberland, Pa.
Farmers' and Merchants' Bank, New Oxford, Pa.
Merger

66

Approvals

Approvals

May 4, 1968:
First Union National Bank of North Carolina,
Charlotte, N.C.
The National Bank of Alamance of Graham,
Graham, N.C.
Queen City National Bank, Charlotte, N.C.
Merger
-..
.......
May 27, 1968:
Central National Bank of Jacksonville, Jacksonville,
Fla.
Marine National Bank of Jacksonville, Jacksonville,
Fla.
Purchase
.
June 6, 1968:
Southern California First National Bank, San
Diego, Calif.
Bellflower National Bank, Bellflower, Calif.
Merger.
June 17, 1968:
Bank of America National Trust and Savings
Association, San Francisco, Calif.
The New St. Croix Savings Bank, Christiansted,
St. Croix, U.S. Virgin Islands
Purchase
June 28, 1968:
County National Bank, Middletown, N.Y.
The First National Bank of Woodridge, Woodridge,
N.Y.
Merger
June 28, 1968:
The Howard National Bank and Trust Company,
Burlington, Vt.
Montpelier Savings Bank and Trust Company,
Montpelier, Vt.
Merger
June 28, 1968:
The Midland National Bank, Midland, Tex.
Bank of the Southwest, Midland, Tex.
Merger

Page

July 31, 1968:
The National Bank of Commerce of Columbus,
Columbus, Miss.
Bank of Brooksville, Brooksville, Miss.
Merger

67

Aug. 2, 1968:
First National Bank of Portland, Portland, Maine
Rumford Bank and Trust Company, Rumford,
Maine
Merger

90

Aug. 9, 1968:
First National Bank of Dona Ana County, Las
Cruces, N. Mex.
The First National Bank of Hatch, Hatch, N. Mex.
Merger

92

Aug. 30, 1968:
City National Bank, Beverly Hills, Calif.
Pacific Industrial National Bank of South El Monte,
South El Monte, Calif.
Purchase

93

Aug. 30, 1968:
Seattle-First National Bank, Seattle, Wash.
First State Bank of LaCrosse, LaCrosse, Wash.
Purchase

94

Aug. 30, 1968:
Zions First National Bank, Salt Lake City, Utah
The Bank of Spanish Fork, Spanish Fork, Utah
Purchase

96

Aug. 31, 1968:
First National Bank of Arlington, Arlington, Va.
First National Bank of Vienna, Vienna, Va.
Merger

97

72

Sept. 3, 1968:
United States National Bank, San Diego, Calif.
Continental Bank, Beverly Hills, Calif.
Merger

99

74

Sept. 3, 1968:
United States National Bank, San Diego, Calif.
County National Bank, Orange, Calif.
Merger

100

68

69

70

71

June 28, 1968:
Virginia National Bank, Norfolk, Va.
Farmers and Merchants Bank of Lawrenceville,
Lawrenceville, Va.
Merger

76

June 28, 1968:
Virginia National Bank, Norfolk, Va.
The National Bank of Woodstock, Woodstock, Va.
Merger

77

July 1, 1968:
Security First National Bank, Los Angeles, Calif.
Pacific National Bank of San Francisco, San
Francisco, Calif.
Merger

78

Page

89

Sept. 18, 1968:
Industrial National Bank of Rhode Island, Providence, R.I.
Hope National Bank, Providence, R.I.
Merger
- 101
Sept. 19, 1968:
First Union National Bank of North Carolina,
Charlotte, N.C.
Commercial State Bank, Laurinburg, N.C.
First State Bank and Trust Company, Bessemer
City, N.C.
Merger

102

Sept. 30, 1968:
Maryland National Bank, Baltimore, Md.
Western Maryland Trust Company, Frederick, Md.
Merger

106

107

July 10, 1968:
El Paso National Bank, El Paso, 111.
The Woodford County National Bank of El Paso,
El Paso, 111.
Merger

85

July 26, 1968:
Commonwealth National Bank of San Francisco,
San Francisco, Calif.
First San Francisco Bank, San Francisco, Calif.
Consolidation

Sept. 30, 1968:
The First National Bank of Huntsville, Huntsville,
Ala.
Farmers & Merchants Bank, Madison, Ala.
Merger

87

July 26, 1968:
National Bank of Washington, Tacoma, Wash.
Bank of Washougal, Washougal, Wash.
Merger

Oct. 11, 1968:
The First National Bank of Washington, Washington, N J .
The Hackettstown National Bank, Hackettstown,

88

331-934—69

4




N.J.
Merger

109

35

Approvals

Approvals
Oct. 18, 1968:
Surety National Bank, Encino, Calif.
Civic National Bank, Marina Del Rey, Calif.
Merger
Oct. 31, 1968:
First National City Bank, New York, N.Y.
The City Bank of New York, N.A., New York, N.Y.
Merger
Oct. 31, 1968:
The Bank of California, N.A., San Francisco, Calif.
Sequoia National Bank of San Mateo County, Redwood City, Calif.
Merger
Oct. 31, 1968:
The First National Bank of Oelwein, Oelwein,
Iowa
Oran Savings Bank, Oran, Iowa
Merger
Oct. 31, 1968:
The Mechanicks National Bank of Concord, Concord, N.H.
The First National Bank of Hillsborough, Hillsboro, N.H.
Merger
Oct. 31, 1968:
The Safety Fund National Bank of Fitchburg,
Fitchburg, Mass.
The First National Bank of Gardner, Gardner,
Mass.
Consolidation
Nov. 1, 1968:
The First National Bank of Williamsport, Williamsport, Pa.
The Danville National Bank, Danville, Pa.
Consolidation.
Nov. 1, 1968:
The National Valley Bank of Staunton, Staunton,
Va.
Staunton Bank, N.A., Staunton, Va.
Merger
Nov. 4, 1968:
North Carolina National Bank, Charlotte, N.C.
American-Security National Bank, Charlotte, N.C.
Merger
Nov. 8, 1968:
San Joaquin Valley National Bank, Tulare, Calif.
State Bank of Chowchilla, Chowchilla, Calif.
Purchase
Nov. 8, 1968:
Security National Bank of Long Island, Huntington,
N.Y.
The Second National Bank and Trust Company of
Hempstead, Hempstead, N.Y.
Merger
Nov. 8, 1968:
Valley National Bank of Long Island, Valley
Stream, N.Y.
The Hampton Bays National Bank, Hampton Bays,
N.Y. •
Merger
Nov. 8, 1968:
Wells Fargo Bank, N.A., San Francisco, Calif.
Azusa Valley Savings Bank, Azusa, Calif.
The First National Bank of Azusa, Azusa, Calif.
Merger

36




Page
110

Nov. 8, 1968:
Western Pennsylvania National Bank, Pittsburgh,
Pa.
St. Clair Deposit Bank of Pittsburgh, Pittsburgh,
Pa.
Purchase

Page

124

Nov. 15, 1968:
Southern California First National Bank, San Diego,
Calif.
Bank of La Jolla, San Diego, Calif.
Merger

126

Nov. 15, 1968:
Virginia National Bank, Norfolk, Va.
Northampton County Trust Bank, Cape Charles,
Va.
Merger

127

Nov. 18, 1968:
The First National Bank in Washington, Washington, Pa.
First National Bank and Trust Company of Waynesburg, Waynesburg, Pa.
Consolidation

128

Nov. 18, 1968:
The First National Bank of Berlin, Berlin, Pa.
The First National Bank at Stoystown, Stoystown,
Pa.
Merger

130

115

Nov. 30, 1968:
The First National Bank and Trust Company of
Crawfordsville, Crawfordsville, Ind.
Ladoga State Bank, Ladoga, Ind.
Merger

131

117

Dec. 31, 1968:
American Fletcher National Bank and Trust
Company, Indianapolis, Ind.
Marion County National Bank, Indianapolis, Ind.
Merger

132

Dec. 31, 1968:
Birmingham Trust National Bank, Birmingham,
Ala.
Alabama National Bank, Birmingham, Ala.
Merger

133

Dec. 31, 1968:
Capital National Bank, Houston, Tex.
Capital Bank, N.A., Houston, Tex.
Merger

133

Dec. 31, 1968:
First National Bank & Trust Company of Millersburg, Millersburg, Pa.
The First National Bank of Elizabethville, Elizabethville, Pa.
Consolidation

134

Dec. 31, 1968:
First Union National Bank of North Carolina,
Charlotte, N.C.
The First & Citizens National Bank of Elizabeth
City, Elizabeth City, N.C.
Merger

135

Dec. 31, 1968:
Simmons First National Bank of Pine Bluff, Pine
Bluff, Ark.
Simmons National Bank of Pine Bluff, Pine Bluff,
Ark.
Merger

138

Dec. 31, 1968:
Southern Nationa Bank of North Carolina,
Lumberton, N.C.
Southern City National Bank, Lumberton, N.C.
Merger

138

Ill

112

113

114

118

119

120

121

122

123

Additional Approvals

Approvals
Dec. 31, 1968:
South Shore National Bank, Quincy, Mass.
Shorebank N.A., Quincy, Mass.
Merger
Dec. 31, 1968:
The Central National Bank of Richmond, Richmond, Va.
Tower National Bank, Richmond, Va.
Merger
Dec. 31, 1968:
The County Bank N.A., Cambridge, Mass.
The Everett National Bank, Everett, Mass.
Merger
Dec. 31, 1968:
The Peoples National Bank, Greenville, S.C.
Oconee County Bank, Seneca, S.C.
Merger

Page
139

140

140

142

Dec. 31, 1968:
Third National Bank in Nashville, Nashville, Tenn.
Third State Bank, N.A., Nashville, Tenn.
Consolidation

143

Dec. 31, 1968:
United States National Bank of Oregon, Portland,
Oreg.
Unit National Bank of Oregon, Portland, Oreg.
Merger

143

Dec. 31, 1968:
Wachovia Bank and Trust Company, WinstonSalem, . N.C.
Wachovia Bank and Trust Company, N.A.,
Winston-Salem, N.C.
Merger




144

A. Approved, but in litigation.
Apr. 29, 1968:
Deposit Guaranty National Bank, Jackson, Miss.
City Bank & Trust Company, Natchez, Miss.
Merger

Page

145

Apr. 29, 1968:
First National Bank of Jackson, Jackson, Miss.
The Bank of Greenwood, Greenwood, Miss.
Merger

147

July 19, 1968:
The First National Bank of Maryland, Baltimore,
Md.
First National Bank of Harford County, Bel Air,
Md.
Merger

149

Dec. 27, 1968:
Virginia National Bank, Norfolk, Va.
Bank of Hampton Roads, Newport News, Va.
Merger

152

B. Approved, but abandoned after litigation.
July 26, 1968:
Bank of Las Vegas, Las Vegas, Nev.
Nevada National Bank of Commerce, Reno, Nev.
Valley Bank of Nevada, Reno, Nev.
Merger.

153

Aug. 19, 1968:
Pennsylvania National Bank and Trust Company,
Pottsville, Pa.
The Merchants National Bank of Shenandoah,
Shenandoah, Pa.
Merger

157

Selected 1966 merger decisions

160

37

/. Approvals
T H E NATIONAL BANK OF SOUTH DAKOTA, SIOUX FALLS, S. D A K . , AND AMERICAN NATIONAL BANK AND T R U S T COMPANY, R A P I D CITY,
S. D A K .

Banking offices
Name of bank and type of transaction

Total assets
In operation To be operated

American National Bank and Trust Company, Rapid City, S. Dak. (14099), with..
and The National Bank of South Dakota, Sioux Falls, S. Dak. (12881), which had..
merged Jan. 4, 1968, under charter of the latter bank (12881) and title "National
Bank of South Dakota." The resulting bank at date of merger had

COMPTROLLER'S DECISION

On October 20, 1966, the American National Bank
and Trust Company, Rapid City, S. Dak., with IPC
deposits of $45.4 million, and The National Bank of
South Dakota, Sioux Falls, S. Dak., with IPG deposits
of $53.4 million, applied to the Comptroller of the
Currency for permission to merge under the charter
of the latter and with the title of "National Bank of
South Dakota."
The State of South Dakota is divided into two
distinct areas by the Missouri River. In the eastern
area of South Dakota the soil is fertile and the rainfall
sufficient for raising small grain and corn crops. Accordingly, farms in this eastern area are generally small
and the per acre value is high. The small grain and
corn crops produced in this region are used locally
by farmers chiefly for feeding calves and yearlings purchased from ranches in western South Dakota, Kansas,
and Nebraska. The fattened stock is then sold at markets within and without the State.
In the western South Dakota area the soil is less
fertile and the rainfall is insufficient for raising small
grain or corn. Although the land will not support small
farms, it is suitable for livestock grazing. Accordingly,
this western area is predominantly comprised of cattle
and sheep ranches.
As the two areas of South Dakota have developed,
one city in each has grown, economically and in other
respects, to a dominant position: Sioux Falls in the
east and Rapid City in the west. South Dakota, with
a total population of 711,000, has eight cities having




$69,801,553
84, 579, 022
154, 465, 506

14

a population exceeding 10,000, of which only three
exceed 15,000. Sioux Falls in eastern South Dakota
has a population of 74,108; Aberdeen, also in eastern
South Dakota, has a population of 23,173; and Rapid
City, in western South Dakota, has a population of
54,394.
The National Bank of South Dakota, under whose
charter this merger will be accomplished, maintains
its head office in Sioux Falls and presently operates
six out-of-town branches. It is owned by the First
Bank Stock Corporation, a registered bank holding
company headquartered in Minneapolis, Minn. Holding 6 percent of the total commercial bank deposits
in South Dakota, the charter bank is the third largest
bank in the State. It is capably managed by a full
staff of competent officers who provide aggressive
leadership. Competition for this bank stems principally
from the following banks headquartered in Sioux
Falls: Northwest Bancorporation, Minneapolis, Minn.,
a registered bank holding company; First National
Bank in Sioux Falls, with deposits of $14 million;
Valley National Bank, with deposits of $12 million;
and the Western State Bank, with deposits of $8
million.
The merging bank, located in Rapid City, was chartered in 1934. It operates its main office and one
branch in Rapid City, and two out-of-town branches.
It is the fifth largest bank in the State and competes
primarily with the Rushmore State Bank, which has
deposits of $7 million, and with the First National
Bank of Black Hills, with deposits of $76 million, which
39

is an affiliate of the Northwest Bancorporation. The
merging bank is also capably managed by a full staff
of competent officers who provide aggressive leadership.
Both Sioux Falls and Rapid City have experienced
pronounced growth in recent years and, as the State's
first and second largest cities, exercise a dominant role
in the economy of their respective areas, as well as
throughout the State. The National Bank of South
Dakota, with its lending limit of $400,000, and the
American National, with a limit of $360,000, have done
reasonably well in meeting the credit demands of these
growing areas. However, livestock raising, feeding and
processing, the basic support of the economy, require
large amounts of capital, which at times must be furnished by sources outside the State, because of the
insufficient lending capabilities of the State's own
banks. Each year, business is lost in the Sioux Falls
area to banks in Minneapolis and Omaha, which have
larger lending capacities. Similarly, it is known that
Rapid City business is lost to banks in Denver for the
same reason. The resulting bank, with a lending limit
of $800,000, will be in a far better position to keep this
business within the State. Moreover, the increased
lending capacity will be an effective tool in creating a
climate attractive to new industry and to the expansion
of existing industry.
The banking public of South Dakota will be assisted
by this merger. The resulting bank will be able to offer
broadened and more specialized trust services, full use
of automatic data processing to provide faster and
cheaper service to customers, and the continuity of
good management, which is available from the reservoir of talent at the First Bank Stock Corporation.
This merger will create a bank of sufficient size to
stimulate competition within South Dakota and with
the large out-of-State banks that heretofore have been
called upon to provide credit to the large South Dakota borrowers. Specifically, it will augment competi-

tion with the Northwestern National Bank in Sioux
Falls and the First National Bank of Rapid City, both
of which are subsidiaries of Northwest Bancorporation
and whose aggregate deposits total $166 million.
Applying the statutory criteria to this proposal, it
is determined that this merger will, on consummation,
be of benefit not only to the South Dakota communities involved but also to all the State. As it is deemed
to be in the public interest, the application is, therefore, approved, with the title of the resulting bank to
be determined.
DECEMBER 5,

1967.

SUMMARY OF REPORT BY ATTORNEY GENERAL

American National Bank and Trust Company, with
assets of $60,503,000, is headquartered in Rapid City,
S. Dak., and operates four branches, two in Rapid
City and two in towns 30 and 40 miles, respectively,
from the main office. The banking operations of American National are centered in western South Dakota.
The National Bank of South Dakota, with assets of
$71,565,000, is headquartered in Sioux Falls, S. Dak.,
and operates eight branches, two in Sioux Falls and the
others in towns in the eastern half of South Dakota.
The banking operations of The National Bank of South
Dakota are centered in eastern South Dakota.
These two banks operate in entirely separate areas,
their trading areas separated by 90 miles, and they do
not now compete with each other. South Dakota law
so restricts the establishment of de novo branches, by
population and existence of banks already chartered in
the community, that potential competition is sharply
limited. However, such restrictions would not prevent
either of the merging banks from opening de novo
branches in the home office city of the other. The consummation of the merger would foreclose the development of future competition between the two banks by
this method.

FIRST NATIONAL BANK & TRUST COMPANY, RED LION, PA., AND THE INDUSTRIAL NATIONAL BANK OF WEST YORK, YORK, PA.
Banking offices
Name of bank and type of transaction

Total assets
In operation

The Industrial National Bank of West York, York, Pa. (8938), with
and First National Bank & Trust Company, Red Lion, Pa. (5184), which had...
merged Jan. 20, 1968, under charter of the latter bank (5184) and title "Southern
Pennsylvania National Bank." The resulting bank at date of merger had

40




$19, 666, 500
46, 369, 885
66, 036, 385

To be operated

2
4
6

COMPTROLLER'S DECISION

On July 26, 1967, The Industrial National Bank of
West York, York, Pa., and the First National Bank
& Trust Company, Red Lion, Pa., applied to the
Office of the Comptroller of the Currency for permission to merge under the charter of the latter and with
the title "Southern Pennsylvania National Bank."
The merging banks are both located in York County,
which lies on Pennsylvania's southern border adjacent
to the Maryland line. The city of York, with a population of 55,000, is near the center of the county. This
city is highly industrialized, with many of its residents
employed at the plants of nationally known companies. The borough of Red Lion, with a population
of 6,000, lies 8 miles southeast of York. Light industries,
including the manufacture of furniture, tobacco products, tools and dies, and wearing apparel, play an important role in terms of employment. Agriculture and
dairy farming also contribute substantially to the
county's economy.
The First National Bank & Trust Company was
organized in 1899 and now holds IPC deposits of $38
million at its head office in Red Lion and its three
branches. Two of these branches are located in the
towns of Delta and Stewartstown, small farming communities in the southern portion of the county. The
third branch is located in the southeastern portion of
the city of York.
The Industrial National Bank of West York was
organized in 1907 with its head office in West York,
3 miles west of the city of York, and now holds IPC
deposits of $15.5 million. A single branch is located
about 2 miles west of the main office. This bank is the
smallest of the five banks headquartered in the city of
York.
There is little competition between the participating
banks. The nearest offices of the two banks are about
6 miles apart, while the city of York, with various bank
offices, is located in the area between them. Consummation of the merger will not create an imbalance of
competition in the service area of the resulting bank.
This merger will enhance competition with the two
larger banks headquartered in the city of York, viz.,
The York Bank and Trust Company, with assets of
$124 million and the National Bank & Trust Company
of Central Pennsylvania, with assets of $237 million.
The public in the service area of the resulting bank
will benefit from the increased lending limit of the resulting bank, and from the availability of a full range




of trust services. It is anticipated that the resulting
bank will be able to contribute to the development of
the southern part of the county through increased participation in mortgage lending. The merger will enable the resulting bank to automate many bookkeeping functions, which will result in internal economies
and improved public service.
Applying the statutory criteria to the proposed
merger, we find that it is in the public interest and
the application is, therefore, approved, with the name
of the resulting bank to be determined.
DECEMBER 13,

1967.

SUMMARY OF REPORT BY ATTORNEY GENERAL

First National Bank & Trust Company of Red Lion
("First National") proposes to merge with Industrial
National Bank of West York, York, Pa. ("Industrial
National"), headquartered about 9 miles from Red
Lion in the city of York, York County, Pa. First National operates one of its three branches in the city of
York.
All the offices of the merging banks are located in
York County; First National Bank is the fourth largest
bank headquartered in the county, while Industrial
National is the eighth largest. There are presently 16
banks operating 54 offices within York County, of
which 13 are headquartered therein. The largest in
overall size is the National Bank & Trust Company of
Central Pennsylvania, with assets of approximately
$237 million. The second largest bank headquartered
in York County is York Bank & Trust Company, with
approximately $123.5 million in assets, followed by
First National Bank of York (assets, $54.7 million).
All three of these banks are headquartered in the city
of York.
The proposed merger would eliminate some direct
competition between the two merging banks, whose
closest offices are about 6 miles apart, on the opposite
sides of the city of York. There are a considerable
number of banking offices in the intervening area.
The proposed merger would also significantly increase market concentration in York County. First
National has approximately 8.4 percent of total York
County IPC deposits, and the proposed acquisition
would increase its market share to 12.6 percent. The
resulting bank would thus become the third largest in

41

York County. The percentage of the area's IPG deposits held by the four largest banks would also increase from roughly 71 to 75 percent.
The proposed merger would eliminate existing competition between the merging banks, whose closest of-

fices are 6 miles apart, and raise the level of banking
concentration within the county generally. This merger
may, in addition, encourage further progress of the
merger trend, which has already brought about the
high concentration presently apparent in York County.

THE NATIONAL BANK OF COMMERCE OF SEATTLE, SEATTLE, WASH., AND GRANDVJEW SECURITY BANK, GRANDVIEW, WASH.

Banking offices
Total assets

Name of bank and type of transaction

In operation

Grandview Security Bank, Grandview, Wash., with
was purchased Jan. 26, 1968, by The National Bank of Commerce of Seattle,
Seattle, Wash. (4375), which had
After the purchase was effected, the receiving bank had

COMPTROLLER'S DECISION

On October 10, 1967, The National Bank of Commerce of Seattle, Seattle, Wash., applied to the Comptroller of the Currency for permission to purchase the
assets and assume the liabilities of the Grandview
Security Bank, Grandview, Wash.
The head office of The National Bank of Commerce
of Seattle is in Seattle, which has a population of
580,000. It is the largest city in the State of Washington, with a trade area population of 1,200,000. Seattle
is a transportation terminal and the headquarters city
for most major banks of the State. Its industry is dominated by Boeing Company and related aerospace
activities.
The National Bank of Commerce of Seattle was
organized in 1889. With IPC deposits of $742.8 million,
it is the second largest bank in Washington. It operates
90 offices in 63 communities. Sixty-two of these
branches are west of the Cascade Mountains and serve
the more industrialized and populous portions of the
State. King County, where Seattle is situated, is the
source of 49.9 percent of its deposits.
Grandview Security Bank is a unit bank located in
Grandview, 175 miles southeast of Seattle, on the easttern side of the Cascade Mountains. Grandview is in
the extreme eastern part of Yakima County, which is
in the southern part of the State. Agriculture is the
base of the economy. Apples, pears, concord grapes,
and diversified row and field crops are produced. Because of its strategic location on railroad and highway
arteries, the Grandview area is a center of the food
processing industry. Grandview has a population of
3,600. The estimated population of the trade area,
42




$3,791,477
1, 030, 942, 493
1, 034, 733, 970

To be operated

1
90
91

which includes the city of Grandview and nearby communities in the Yakima River Valley in the extreme
eastern part of the county, is 30,000.
Grandview Security Bank was organized in 1958 and
has IPC deposits of $2.7 million. Besides the selling
bank, Grandview has one other commercial bank office
and one mutual savings bank.
This transaction will have no adverse effects on
banking competition in the trade area or in the State.
The National Bank of Commerce of Seattle now holds
about 19 percent of the total deposits in the State and
the proposed transaction would increase that by only
0.07 percent. There is little direct competition between
the selling bank and the nearest branch of charter bank,
22 miles northwest in Zillah, as there are six intervening
banking offices. Four other branches of The National
Bank of Commerce of Seattle are from 29 to 40 miles
away. The charter bank has little business from the
area served by the Grandview bank, and the latter has
no business from areas served by branches of the Seattle
bank. Because of a home office protection law in Washington, the charter bank could not branch de novo in
Grandview.
Seven other banks (including one mutual savings
bank) in the Grandview trade area operate a total of
13 offices. The Old National Bank of Washington, with
its head office in Spokane, has four offices in the area
with total deposits of $16.1 million. Its branch in
Grandview has deposits of $4.7 million. The transaction would give the resultant bank 10.6 percent of the
deposits in the area, whereas branches of the Old National Bank have 44.0 percent of the deposits in the
area and branches of the Seattle-First National Bank
have 26.3 percent. The transaction will enhance com-

petition by enabling the Grandview office to compete
more aggressively with the branches of other banks in
the area as well as with the nonbank financial institutions which are active in the area.
The Grandview area will benefit by the larger lending limit, trust services, and automated services that
will be provided by the transaction. Because the size of
farms is growing, farmers need larger lines of credit to
finance mechanized equipment and provide working
capital for which the Grandview office now has to seek
participations.
Applying the statutory criteria to the proposal, we
conclude that it is in the public interest, and the application is, therefore, approved.
DECEMBER 20,

1967.

SUMMARY OF REPORT BY ATTORNEY GENERAL

The proposed transaction would give The National
Bank of Commerce of Seattle, Washington's second

largest bank, a branch office in the city of Grandview,
where that bank does not presently have an office.
National's closest branch office to Grandview Security is its Zilla office 22 miles away; its head office in
Seattle is 175 miles away from Grandview to the northwest. There would appear to be very little direct competition between the merging banks because of the
mileages involved between closest offices and the six
intervening bank offices between Grandview and Zilla.
Washington banking law would prohibit National
from establishing a de novo branch office in the city of
Grandview because of home office protection. However, there are several smaller towns close by not presently served by a bank where a new branch office could
be established. National can be considered one of the
most probable potential entrants into this area, in its
natural path of expansion southeast from its Zilla
office. This potential competition between the merging
banks would be eliminated by the proposed merger.

THE NATIONAL BANK OF ORRVILLE, ORRVILLE, OHIO, AND THE FIRST NATIONAL BANK OF DALTON, DALTON, OHIO
Banking'offices
Total assets

Name of bank and type of transaction

In operation

The First National Bank of Dalton, Dalton, Ohio (6372), with
and The National Bank of Orrville, Orrville, Ohio (13742), which had
merged Jan. 31, 1968, under charter of the latter bank (13742) and title "First
National Bank of Orrville-Dalton." The resulting bank at date of merger had

COMPTROLLER'S DECISION

On October 4,1967, The National Bank of Orrville,
Orrville, Ohio, and The First National Bank of Dalton, Dalton, Ohio, applied to the Office of the Comptroller of the Currency for permission to merge under
the charter of the former and with the title "First National Bank of Orrville-Dalton."
Both subject banks are located in communities in
eastern Wayne County, about 30 miles southwest of
Akron. This area is heavily populated by successful
and frugal farmers of Swiss, German, and Dutch
descent.
The charter bank is in Orrville, which has a population of 7,500. The economy of the community is supported partly by agriculture and also by 32 diversified
small industries employing 3,600 workers. This bank,
which has IPC deposits of $9.4 million, was organized




$9, 684, 035
15, 622, 355
25, 306, 390

To be operated

2
2
4

in 1933 and operates one in-town branch, which was
established in 1965.
The First National Bank of Dalton is 6V2 miles
southeast of the charter bank. Dalton, with a population of 1,300, depends almost entirely upon dairy
farming. The merging bank, chartered in 1902, now
has IPC deposits of $8.5 million and one branch in
Kidron, a town 7 miles southwest of Dalton. The Dalton bank has a notably conservative lending policy.
The merger will not have an adverse effect upon
competition. The subject banks are both about midway
between Wooster and Massillon and compete not only
with three larger commercial institutions in each city,
but also with a half dozen small unit banks scattered
throughout Wayne County. With the merger, the ranking of charter bank will move from sixth to fourth
among the commercial institutions with which it competes. This will, however, improve its ability to com43

pete with the larger banks in Wooster and Massillon.
There is only normal overlapping of the trade areas
of the two banks as each bank in the county has cut
out its own service area. In the combined trade area,
which has an estimated population of 18,700, the resulting bank will have only 14 percent of the bank
deposits and 13 percent of the loans. It will face active
competition also from savings and loan associations,
Government agencies which provide loans in the
area, and consumer finance companies.
The merged institution will be able to provide better
services for the communities than either participant
now does singly. The increased lending limit will enable it to handle the financing needs of more of the
small firms in Orrville. In both communities combined
resources will aid residential, industrial, and agricultural development. The president of the charter bank
must retire shortly and his successor will have to come
from the outside. The larger institution will be able to
offer a more attractive salary to a competent successor.
Applying the statutory criteria to the proposal, we
conclude that it is in the public interest, and the application is, therefore, approved.
DECEMBER 20,

1967.

SUMMARY OF REPORT BY ATTORNEY GENERAL

Orrville Bank, with total deposits of $11.5 million
and two offices, is the only bank in Orrville, a city of
7,500 people, about 45 miles south of Cleveland. Dalton
Bank has total deposits of $8.7 million, and is the only
bank in the village of Dalton, 1,300 population, 6 ^
miles southeast of Orrville.
Dalton Bank has one branch, located in Kidron,
about 7^2 miles south of Orrville.
This proposed merger would eliminate substantial

direct competition between Orrville Bank and Dalton
Bank, whose closest offices are about 6J4 miles apart
and would give the resulting bank a controlling position in the area.
Dalton Bank presently is the only bank in the village of Dalton and Orrville Bank, the only strictly
commercial bank in the town of Orrville. These banks
handle a similar type of banking business, and there
are no intervening banks between the two towns. There
is one other financial institution in Orrville, The Orrville Savings Bank (total deposits $8.9 million), which
does, however, accept demand deposits and is, therefore, in competition with the Orrville Bank located
next door.
Thus, the proposed merger would reduce the number of commercial banking alternatives in the OrrvilleDalton-Kidron area from two to one and the total
number of commercial and savings banks from three
to two.
Within the whole of Wayne County (an area covering 551 square miles), the proposed merger would
result in increasing Dalton Bank's share of IPC demand
deposits from 10.5 to 18.4 percent. These deposits are
held in Wayne County by 14 banks with 22 offices.
We believe, in conclusion, that the proposed merger
would eliminate considerable direct competition between the merging banks and would also give the Orrville Bank a virtual monopoly position in the rapidly
expanding Orrville-Dalton-Kidron area in the eastern
section of Wayne County. It would be the only commercial bank in the area, although it would meet with
some competition from the Orrville Savings Bank.
Within Wayne County as a whole, the increase in concentration resulting from the proposed merger would
be substantial. The effect of the proposed merger on
competition would be adverse.

WESTERN PENNSYLVANIA NATIONAL BANK, PITTSBURGH, P A . , AND BROOKLINE SAVINGS & T R U S T COMPANY, PITTSBURGH, P A .

Name of bank and type of transaction

Total assets

Banking offices
In operation

Brookline Savings & Trust Company, Pittsburgh, Pa., with
and Western Pennsylvania National Bank, Pittsburgh, Pa. (2222), which had
merged Feb. 9, 1968, under charter and title of the latter bank (2222). The resulting bank at date of merger had

44




$69, 156, 190
727, 748,437
787, 415, 643

To be operated

5
62
67

COMPTROLLER S DECISION

On September 1, 1967, the Brookline Savings &
Trust Company, Pittsburgh, Pa., with IPC deposits of
$56.2 million, and the Western Pennsylvania National
Bank, Pittsburgh, Pa., with I PC deposits of $485.4
million, applied to the Comptroller of the Currency
for permission to merge under the charter and with
the title of the latter.
Western Pennsylvania National Bank is headquartered in Pittsburgh, Pa., which with a population of
over 600,000, is the commonwealth's second largest
city. This, the third largest bank in the city, operates
62 offices in Allegheny, Beaver, Washington, and Westmoreland Counties, serving the highly industrialized
and heavily populated Western Pennsylvania region
of which Allegheny County is the center. It is a sound,
well-managed bank with adequate personnel resources.
The merging Brookline Savings & Trust Company
was organized as a State institution in 1925 and presently operates five offices and is the sixth largest bank
in the Pittsburgh metropolitan area. The Brookline section of Pittsburgh, where the merging bank operates
three of its five offices, is largely a residential community with a population of 20,957.
The circumstances that now surround the Brookline
Savings & Trust Company render this merger proposal unique. Because of the limited background and
particularized experience of its senior executive officers, this bank specialized in personal loans and consumer credit. When it expanded its operations to enter
the large commercial loan field without the support of
adequate staff expertise, the trend of the bank's operations began to deteriorate. Despite repeated urgings by
supervisory authorities, the management has not curtailed extravagant promotional expenditures nor converted their accounting system to an accrual basis.
The problems faced by this bank make it most unlikely
that successor management with sufficient capability to
resolve these problems could be induced to accept the
responsibility. Only a merger of the Brookline Savings
& Trust Co. into a bank of the size and with the
capabilities of Western Pennsylvania National Bank
can be relied on to place the bank's operations on a
satisfactory basis.
There is intense competition among the 19 commercial banks located in the Pittsburgh trading area.
Of these banks, Mellon National Bank, with deposits
of $2.2 billion, is the largest and Pittsburgh National
Bank, with deposits of $1.3 billion, is second in size.
These 19 commercial banks have aggregate deposits of
$4.9 billion and loans of $3.7 billion. This merger,




which will have but slight impact on the overall banking structure of the area, will place 13 percent of area
deposits in the resulting bank and 11.8 percent of area
loans. Additional vigorous competition is provided by
approximately 200 savings and loan associations, insurance companies, credit unions, and sales finance
companies for savings dollars and various types of
loans.
Competition between the charter bank and the
merging bank is insignificant. The head office and two
of the four branches of merging bank are located in
Brookline. The charter bank has no offices in Brookline;
its closest branch is in Dormont, Pa., which is 1.3 miles
from the merging bank's head office. While the little
competition that does exist will be eliminated by this
merger, the unique circumstances present in this case
clearly indicate that this proposal is in the public
interest.
The resulting bank will be able to offer a broader
range of services to the customers of the merging bank
including computer facilities, trust services, an injection of additional capital, a greater lending limit and,
in addition, it will have the capacity to develop properly the commercial banking business in merging bank's
trade area. Further, consummation of this merger will
resolve the management succession problem within
the merging bank.
Applying the statutory criteria, we conclude that the
proposal is in the public interest, and the application
is, therefore, approved.
JANUARY 5,1968.
SUMMARY OF REPORT BY ATTORNEY GENERAL

The proposed merger involves the third largest
(Western Bank) and sixth largest (Brookline Bank),
banks operating in the Pittsburgh S.M.S.A., which
consists of Allegheny, Beaver, Washington, and Westmoreland Counties. Western Bank operates 62 offices
throughout most of the four-county region, while
Brookline Bank operates three offices in the Brookline
section of Pittsburgh, where it is apparently the only
bank, and it has also expanded into outlying areas of
Washington and Westmoreland Counties.
Brookline Bank's three Brookline offices are surrounded on all sides by offices of Western Bank; the
closest of these is 1.3 miles away in Dormont, but its
Mount Lebanon, Sharpsburg, and Beechview offices
appear to be almost as close. In these circumstances we
conclude that direct competition exists between the
two banks in the Brookline area. This competition
would be eliminated by the proposed merger.
45

Pittsburgh is probably the most concentrated market among the major banking centers in the country.
There are 19 banks with offices in the Pittsburgh
S.M.S.A. The largest bank, Mellon National Bank &
Trust (total assets $3.5 billion), has 46 percent of the
total deposits, 51 percent of IPG demand deposits, and
65 percent of the area loans. Pittsburgh National
Bank is second largest (total assets $1.5 billion); together, Mellon National Bank and Pittsburgh National
account for 72 percent of both total deposits and IPG
demand deposits, and 74 percent of loans.
Western Bank is, and would continue to be, the third
largest bank in the area, while Brookline Bank is the
sixth largest bank in the area. Western Bank has 11.8
percent of deposits and 10.8 percent of loans, and
Brookline Bank has 1.2 percent of deposits and 1 percent of loans. In terms of IPG demand deposits, the
proposed merger would result in an increase in West-

ern's share from 8.1 to 9.3 percent of the Pittsburgh
metropolitan area total.
The proposed merger, accordingly, would add significantly to the already very high degree of concentration of commercial banking resources in the Pittsburgh metropolitan area and would result in Western
and two larger banks holding almost 85 percent of
total area deposits.
This proposed merger would eliminate direct competition between the merging banks, and would significantly increase concentration in the already extremely concentrated Pittsburgh banking market; in
addition, there would also be some lessening of potential competition. In view of the heavy concentration in
the Pittsburgh banking market, we conclude that the
proposed merger would have a significantly adverse
effect on competition in this market.

MOUNT VERNON NATIONAL BANK AND TRUST COMPANY OF FAIRFAX COUNTY, ANNANDALE, V A . , AND T H E COLONIAL NATIONAL
BANK OF ALEXANDRIA, ALEXANDRIA, V A .

Banking offices
Name of bank and type of transaction

Total assets

To be operated

In operation

The Colonial National Bank of Alexandria, Alexandria, Va. (15172), with
and Mount Vernon National Bank and Trust Company of Fairfax County, Annandale, Va; (14893), which had
:
merged Feb. 16, 1968, under charter and title of the latter bank (14893). The
resulting bank at date of merger had

COMPTROLLER'S DECISION

On September 11, 1967, The Colonial National
Bank of Alexandria, Alexandria, Va., with IPG deposits of $5 million, and Mount Vernon National
Bank and Trust Company of Fairfax County, Annandale, Va., with IPC deposits of $54 million, applied to
the Office of the Comptroller of the Currency for permission to merge under the charter and with the title
of the latter.
The participating banks are both located in northern Virginia within the Washington Standard Metropolitan Statistical Area. The Washington Standard
Metropolitan Statistical Area, which includes the District of Columbia, the counties of Montgomery and
Prince Georges in Maryland, the counties of Arlington,
Fairfax, Prince William, and Loudoun in Virginia, and
the cities of Alexandria, Fairfax, and Falls Church, is
the ninth largest metropolitan area in the country. It
46




$7, 780, 752

2

90, 308, 410

13

97, 693, 952

15

has enjoyed excellent economic growth and is the fastest growing in the Nation in terms of population. The
area, largely due to the stabilizing effect of the Federal
Government, has traditionally had the lowest unemployment rate in the Nation. Although virtually every
standard industrial category is represented, the principal industries are research and development, light
manufacturing, printing-publishing, heavy construction and shipping, and warehousing.
Banking in the Washington metropolitan area is
characterized by a high degree of decentralization. Of
the 68 banks in the area only 13 have more than $100
million in resources and of these only three are located
in Virginia. In northern Virginia there are 27 banks
with less than $50 million in resources, which is more
small banks than in the District and southern Maryland combined. While the District and Maryland each
have three banks with resources in excess of $500 million, Virginia has only one. The Virginia banks, which

have been particularly hampered in their growth by
the State's restrictive branching laws, have attempted
to expand through the holding-company route.
Fairfax County, with a population of approximately
250,000, is one of the most rapidly expanding communities in the Washington metropolitan area. Alexandria, the home of the merging bank, is an independent city adjacent to Fairfax County, having a
population of about 116,000. It is part of Washington
suburbia. Although primarily residential, it contains a
number of small plants, as well as numerous retail and
service outlets. The business community, centered in
downtown Alexandria, is an older section of the city
now in the primary phases of urban renewal.
The charter bank, an affiliate of the First Virginia
Corporation, was organized in 1962 and now operates
13 branch offices throughout Fairfax County. Although
it ranks 16th in size in terms of deposits among all
commercial banks competing within the Washington
metropolitan area, it holds only 1 percent of total commercial bank deposits in the area. It ranks fifth among
banks located in northern Virginia. The bank offers a
complete range of banking services, including trust
services, and is fully departmentalized in the areas of
commercial credit, mortgage loans, and consumer
credit.
The charter bank, besides competing with the other
banks in northern Virginia, receives strong competition
from the large banks doing business in the metropolitan area, including the large Richmond and Baltimore
banks, which have been drawn into the northern Virginia market to fill the credit needs of the expanding
area economy. These include First and Merchants National Bank and The Bank of Virginia in Richmond;
Maryland National Bank, First National Bank of
Maryland and Union Trust Co. of Maryland in Baltimore; and The Riggs National Bank of Washington,
D.C., American Security and Trust Company, and The
National Bank of Washington in the District of
Columbia.
The merging bank, organized in 1963, presently operates one branch office in Alexandria. Because of internal problems and limited resources, the bank has
not been able to compete effectively with the large
banks operating in Alexandria and has not been able
to adequately meet the credit needs of its customers.
Although the service areas of the participating banks
overlap to some degree, there is practically no competition existing between them. The closest offices of the
banks are 2.7 miles apart, with numerous offices of
competing banks closer to the merging bank. Because
of its limited resources and internal problems, the




merging bank is not an effective competitor nor a potentially significant competitor to either the charter
bank or other Alexandria banks.
The addition of the merging bank to the charter
bank will have little effect upon overall competition.
The charter bank's relative position vis-a-vis the other
commercial banks will not change in either the Washington metropolitan area or in northern Virginia.
Consummation of this merger will have its effect in
Alexandria, where, besides solving the management
and other problems in the merging bank, it will introduce a competitive bank better able to meet the credit
needs of this community. The resulting bank will provide additional services, including a mortgage loan
department and a trust department, neither of which
is presently maintained by the merging bank. This
merger will not eliminate a banking alternative in
Alexandria.
Considered in the light of the statutory criteria, this
merger is judged to be in the public interest, and is,
therefore, approved.
JANUARY 6,1968.
SUMMARY OF REPORT BY ATTORNEY GENERAL

Mount Vernon National Bank ("Mount Vernon"),
a subsidiary of First Virginia Bankshares, proposes to
acquire Colonial National Bank ("Colonial"), a small,
recently chartered bank in Alexandria, Va.
Colonial, organized in 1963, is located in the city of
Alexandria, Va., where it maintains its two offices.
Colonial's financial history has been poor since its inception in September 1963. Losses of $30,000, $56,000,
and $77,000 were reported for the years 1963, 1964,
and 1965; while a profit of $51,000 was reported for
1966, there has been a loss thus far in 1967. Moreover,
Colonial has been beset also by managerial difficulties;
in 1965, its chief operating officer left the bank as a
result of a disagreement with the Board of Directors.
In Alexandria, two large banks—First and Citizens
National Bank ($125 million of deposits) and Alexandria National Bank ($60 million of deposits)—control about 85 to 90 percent of total deposits; both are
controlled by bank holding companies. The two new
banks which were chartered within the past few years
in the city of Alexandria—Colonial and City B a n k have failed to alter significantly the city's deposit structure; they account for 3 and 4 percent, respectively,
of the city's deposits.
In Fairfax County (which, it should be noted, does
not include the independent city of Alexandria),
Mount Vernon has presently a very large share of the
47

market—about 38 percent of total deposits. Its merger
with Colonial would extend its market to adjacent
Alexandria, where Colonial has about 3 percent of
total deposits.
If Alexandria and Fairfax County were treated as
a single market (which would not be unreasonable in
view of their close economic relationship and the fact
that Virginia law permits de novo branching throughout the area), then the merging banks would have the
following market shares:

Bank

Mount Vernon
Colonial
Resulting bank

Total
deposits

IPC
demand
deposits

18. 1%
1.6%
19.7%

17.4%
1.8%
19.2%

This is a significant increase in concentration in a
market area already dominated by bank holding companies; but the foregoing figures do not make an allowance for the competitive impact of the Washington,
D.C., banks only a few miles away.
*

THE FIDELITY NATIONAL BANK, LYNCHBURG, VA., AND PLANTERS BANK AND TRUST COMPANY OF FARMVILLE, FARMVILLE, V A .
Banking offices
Name of bank and type of transaction

Total assets
In operation

Planters Bank and Trust Company of Farmville, Farmville, Va., with
and The Fidelity National Bank, Lynchburg, Va. (1522), which had
merged Feb. 24, 1968, under charter and title of the latter bank (1522). The
merged bank at date of merger had

COMPTROLLER S DECISION

On November 22,1967, the Planters Bank and Trust
Company of Farmville, Farmville, Va., and The Fidelity National Bank, Lynchburg, Va., applied to the
Comptroller of the Currency for permission to merge
under the charter and with the title of the latter.
Lynchburg, with a population of 55,000, is an important financial, mercantile, and transportation center
for the central section of Virginia. The population of
the city's trade area approaches 150,000 persons. Its
industrialization has grown substantially in recent
years.
Farmville, located 51 miles east of Lynchburg in
Prince Edward County, has a present population of
4,500, which represents a decline over the past two
decades. It is the county seat and one of the two incorporated towns in the county, which covers an area of
357 square miles. Although some industry is being
established in the county, the area remains primarily
agricultural with tobacco, beef cattle, dairy farming,
and forest products, in that order, of economic
significance.
The charter Fidelity National Bank, with $124 million in IPC deposits, operates 21 branch offices: eight
in Lynchburg and 13 throughout south-central Virginia. The two other banks with main offices in Lynchburg are The First National Trust and Savings Bank
48




$7, 096, 555
162, 642, 350
169, 238, 694

To be operated

22
23

of Lynchburg with deposits of $407 million and The
Bank of Central Virginia with deposits of $4 million.
Both institutions are subsidiaries of registered bank
holding companies, which have combined assets of
approximately $1.3 billion. Moreover, two offices of
Virginia's largest bank, The First and Merchants National Bank, Richmond, with assets of $658 million, are
located in Lynchburg.
The merging Planters Bank and Trust Company of
Farmville, although chartered in 1867, has remained
a single-office bank. It has IPC deposits of $5.6 million. Prince Edward County, wherein the merging bank
is located, contains three offices of The First National
Bank of Farmville, with assets of $15.6 million, and
two branches of the statewide Virginia National Bank,
Norfolk, with assets of $634 million.
Because the nearest offices of the subject banks are
26 miles apart, little, if any, competition exists between
them. Prospective competition is obviated by reason
of the Virginia law, which prevents them from branching de novo into each other's community.
This merger will be in the best interest of the residents of Farmville and Prince Edward County. It will
bring to the area an aggressive bank offering a broader
range of banking services and resources than are now
available from the merging bank which, because of
its overly conservative lending policies, has the lowest

loan to deposit ratio of any bank doing business in
Prince Edward County. The resulting bank, with its
greater capabilities, will be better able to meet the
credit needs of the area's developing industry and the
ever-increasing credit needs of farmers resulting from
mechanization and consolidation of small farming
units. The management resources of the acquiring
bank would resolve the problems of the merging bank
and insure the residents continued competent and professional banking service. Present employees and officers of the merging bank would receive the benefits of
The Fidelity National Bank's pension and profit sharing plans to the ultimate benefit of Farmville and the
county.
Applying the statutory criteria to this proposed
merger it appears that while there will be no diminution of competition, there will be, on ultimate reckon-

ing, a general gain for the public welfare. The
application to merge is, therefore, approved.
JANUARY 25,

1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

There would seem to be little, if any, direct competition between the merging banks. The closest offices
are 27 miles apart; these are Planters' sole office in
Farmville and Fidelity's nearest branch at Appomattox
(in Appomattox County). The head offices of Planters
and Fidelity, in Farmville and Lynchburg, respectively,
are 57 miles apart.
Under Virginia law, Fidelity could only enter Prince
Edward County by merger (and not de novo branching) , since the present merger involves acquisition of
the smallest bank in the county, we find no adverse
effect on potential competition.

THE PLANTERS NATIONAL BANK AND TRUST COMPANY, ROCKY MOUNT, N.C., AND BANK OF RICH SQUARE, RICH SQUARE, N.C

Name of bank and type of transaction

Total assets
In operation

Bank of Rich Square, Rich Square, N.C, with
and The Planters National Bank and Trust Company, Rocky Mount, N.C.
(10608), which had
merged Feb. 24, 1968, under charter and title of the latter bank (10608). The
resulting bank at date of merger had

COMPTROLLER S

DECISION

On November 30, 1967, the Bank of Rich Square,
Rich Square, N.C, and The Planters National Bank
and Trust Company, Rocky Mount, N.C, applied to
the Comptroller of the Currency for permission to
merge under the charter and with the title of the
latter.
The charter bank, with I PC deposits of $77 million,
operates 23 branch offices in the northeastern quadrant of North Carolina. Its main office is located in
Rocky Mount, which has a metropolitan area population of over 115,000. The population has been relatively stable, but a slight decline is expected as the agricultural importance of the area diminishes. At present,
cotton, peanuts, corn, and tobacco are grown extensively. Textile manufacturing and furniture making
are increasing in importance and are expected to offset
most of the economic loss anticipated by the agricul-




To be operated

$2, 010, 476
92,488,951
94, 499, 427

tural decline. As a whole, the economic forecast for
eastern North Carolina is promising.
The Bank of Rich Square, with IPC deposits of
$1.5 million, is a single office bank located 45 miles
northeast of Rocky Mount in Rich Square, a town of
1,200. Rich Square serves as a trading center for the
surrounding rural areas where tobacco, peanuts, soybeans, and cotton are the principal crops.
The Bank of Rich Square is the only bank in its community. That it has maintained an extremely conservative banking posture over the years is demonstrated by
its loan to deposit ratio, which is only 30 percent, and
by the fact that it makes very few installment and consumer loans. Not only is its office cramped, but the
small size of the bank makes it difficult to modernize
its quarters and to improve its outmoded procedures.
The merging bank competes with other small unit
banks located in nearby communities. Its competitors
49

are the Roanoke-Chowan Bank, 5 miles south of Rich
Square in Roxobel; Farmers Bank of Woodland in
Woodland, 5 miles north; and the Bank of Northampton in Jackson, 15 miles north. Some competition also
derives from the Wachovia Bank and Trust Company
office in Aulander, 13 miles east.
Planters National Bank competes with the large
statewide banks at most of its branch locations. In
Rocky Mount its major competition is provided by
Peoples Bank and Trust Company, a bank of comparable size, and the smaller Bank of Rocky Mount.
Four savings and loans in Rocky Mount also compete
aggressively with the local banks.
The applicant banks do not compete significantly
with each other. The closest branch of Planters to
merging bank is in Ahoskie, 18 miles east of Rich
Square. The small size of merging bank and its rural
character limits its service area. There is little overlap
in the areas served by the two banks.
The merger will definitely benefit the residents of
Rich Square. A full service bank will be conveniently
available to them for the first time, and the greatly enlarged lending limit of the resulting branch will facilitate financing for the few, but growing, industries and
the farmers in the area.

The merger appears to be in the public interest. The
application is, therefore, approved.
JANUARY 25,

1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

Planters National Bank and Trust Company, the
ninth largest in North Carolina, operates 25 banking
offices, principally in the northeastern portion of the
State. Since 1955 it has acquired five other banks
which, when acquired, had aggregate deposits of $22.4
million and nine banking offices.
Bank of Rich Square (total deposits, $1.6 million),
operating only one office, is the only bank in Rich
Square (population 1,200).
The head offices of the merging banks are 45 miles
apart, and the nearest Planters' office to that of the
merging bank is 18 miles distant. At present, there
appears to be only minimal direct competition between
the merging banks.
The proposed merger would, however, eliminate
potential competition. North Carolina law permits
statewide branching and, pursuant to these provisions,
Planters has already established 16 de novo offices and
there would be no legal barrier to its establishment of
a de novo branch in Rich Square.

THE CITIZENS NATIONAL BANK OF WELLSVILLE, WELLSVILLE, N.Y., AND THE CUBA NATIONAL BANK, CUBA, N.Y.
Banking offices
Name of bank and type of transaction

Total assets
In operation

The Citizens National Bank of Wellsville, Wellsville, N.Y. (4988), with
and The Cuba National Bank, Cuba, N.Y. (1143), which had
consolidated Feb. 27, 1968, under charter of the former bank (4988) and title
"The Citizens National Bank and Trust Company." The resulting bank at date

$26, 985, 159
6, 637, 076
33, 622, 236

COMPTROLLER S DECISION

On November 15, 1967, The Cuba National Bank,
Cuba, N.Y., and The Citizens National Bank of Wellsville, Wellsville, N.Y., applied to the Comptroller of
the Currency for permission to consolidate under the
charter of the latter and with the title "The Citizens
National Bank and Trust Company."
The charter bank, with IPC deposits of $20.6 million, was organized in 1895 and is located in Wellsville, N.Y. Wellsville is a town of 6,000, situated in
south-central Allegany County midway between Olean
and Hornell. Most of the bank's business originates in
50




To be operated

5
1

6

Allegany County, where it has four branches in Alfred,
Andover, Bolivar, and Whitesville. The economy is
supported by farming and manufacturing. Although
the area is primarily rural, industrial expansion is
assuming an increasing importance in the economic
growth of the county.
Cuba is a town of 2,000 located 25 miles northwest
of Wellsville in Allegany County. Recreational facilities centering around Cuba Lake swell the summer
population to approximately 3,500. Tourism and agriculture are the primary components of the town's
economy.

The Cuba National Bank, with IPC deposits of
$5.2 million, was organized in 1865 and operates no
branches. Because it has consistently maintained a
very conservative lending policy, its earnings are below
average. It is now faced with a management succession problem in that the chairman of the board is 82
years of age and the president is contemplating retirement. The prospects of finding experienced bankers to take over this small bank in this small town are
very dim.
The applicant banks compete with each other only
to a slight degree. While they share in loan participations to meet the needs of customers, whose credit
requirements exceed their individual lending limits,
their spirit of cooperation in participating in loans preclude significant competition. The fact that the closest
office of Citizens is 17 miles from Cuba precludes any
significant competition developing between them.
This consolidation will strengthen Citizens National Bank of Wellsville and enable it to compete
more effectively for the banking business generated in
Allegany County. The principal local competitor of
Citizens National Bank is the First Trust Company
of Allegany County, which is headquartered in Wellsville. This latter bank, with total deposits of $32 million in its seven offices, operates a branch in both
Bolivar and Cuba. The bank resulting from this merger will, because of its augmented capital structure,
be better able to compete, not only with the First Trust
Company, but also with the larger banks in Olean,
Hornell, Jamestown, and Buffalo that now canvas the
area.
The benefits which will redound to the public
from this consolidation clearly outweigh whatever
slight anticompetitive effect it may be deemed to have
by reason of the elimination of the National Bank of
Cuba. Persons residing and doing business in and
around Cuba will have a more meaningful banking
alternative to choose from. The present management
problems facing The Cuba National Bank will be resolved. Banking competition, which is clearly in the

public interest, will be stimulated in Allegany County.
In the light of the foregoing, this merger is, therefore, approved.
JANUARY 23, 1968.
SUMMARY OF REPORT BY ATTORNEY GENERAL

This is a proposal to merge Citizens National Bank
of Wellsville, Wellsville, N.Y. (five offices with deposits
of $25.3 million) and The Cuba National Bank (one
office with deposits of $5.7 million). Both banks are
located in Allegany County, N.Y., which is south of
Buffalo near the Pennsylvania State line.
Citizens and Cuba are both located within the same
rural county and provide the same type of banking
services. While their nearest offices are some 17 miles
apart, there would appear now to be at least some
actual competition between them.
Citizens is also a potential competitor of Cuba Bank.
While New York State banking laws would preclude
Citizens from opening a branch within the city limits
of Cuba, no such restriction would apply to several
small towns near Cuba.
There are five banks headquartered in Allegany
County; one bank headquartered in adjoining Cattaraugus County operates a branch in Allegany. Together, they operate 17 banking offices within the
county. In the entire county, Citizens is the second
largest bank with about 35 percent of total deposits.
Together, Citizens and the largest bank, First Trust
Co. of Allegany, control about 80 percent of the
county's deposits. Cuba Bank is the third largest county
bank with 8 percent of total deposits.
Banking concentration in Allegany County has increased rapidly over the last 10 years. Cuba Bank would
be the 11th bank to be absorbed by either Citizens or
First Trust Co. in the past 10 years.
The proposed merger would eliminate some existing
and potential competition between the emerging banks
and further increase banking concentration in Allegany
County.

SlLVERLAKE NATIONAL BANK, LOS ANGELES, CALIF., AND REPUBLIC NATIONAL BANK OF CALIFORNIA, LOS ANGELES, CALIF.
Banking offices
Name of bank and type of transaction

Total assets
In operation To be operated

Silverlake National Bank, Los Angeles, Calif. (15388), with
was purchased Feb. 29, 1968, by Republic National Bank of California, Los
Angeles, Calif. (15331), which had
After the purchase was effected, the receiving bank had




$13, 874, 257

2

7, 902, 721
21, 776, 978

3
5

51

COMPTROLLER'S DECISION

On December 14, 1967, Republic National Bank of
California, Los Angeles, Calif., applied to the Office
of the Comptroller of the Currency for permission to
acquire the assets and assume the liabilities of Silverlake National Bank, Los Angeles, Calif.
The participating banks are headquartered in Los
Angeles, which is the third largest city in the United
States. The acquiring bank, organized in 1964 and
now showing IPC deposits of $7 million, has received
approval to move its main office to a location in Beverly Hills which is 1.7 miles northwest of its present
site. Beverly Hills, with a population of about 36,000,
is a residential and commercial community located 10
miles west of downtown Los Angeles. It is one of the
wealthiest communities in the Nation. The Encino
and Wilmington offices of the buying bank serve areas
with a more diversified economy. The selling bank,
with its main office about 3 miles northeast of downtown Los Angeles and a branch 11 miles northwest of
its main office, serves an area that is primarily
residential.
The participating banks compete with numerous
other banks operating in the Los Angeles metropolitan area, including the State's largest banks. These
competitors include the Bank of America National
Trust and Savings Association, with 11 branches in the
area; Crocker-Citizens National Bank, with four
branches in the area; and Security First National
Bank, with six branches in the area. Competition is
also offered by the various other financial institutions.
Because of their limited resources and internal problems, the participating banks have not competed effectively with each other and with other banks in the
area. There is practically no competition existing between the banks at the present time, due to a recent
change in ownership that brought them under the control and management of the same group.
The addition of the selling bank to the acquiring
bank will have no significant effect upon overall competition in the area. The resulting bank will hold
about 1 percent of total commercial bank deposits in

52




the area, although five other banks in the area hold
deposits ranging between 13 and 22 percent.
Consummation of the proposed transaction will
bring together the resources of two small banks and
provide for economies of operation and more effective
use of personnel. The resulting bank, with adequate
capital and good management, will be better able to
meet the convenience and needs of the communities
served by the participants and to compete with the
other banks in the area. This transaction will not
eliminate a banking alternative in any one of these
communities.
In light of the statutory criteria, it appears that this
proposal is clearly in the public interest. The application is, therefore, approved.
JANUARY 26, 1968.
SUMMARY OF REPORT BY ATTORNEY GENERAL

National Bank of Commerce and Silverlake were
both organized in 1964 and have not as yet begun to
operate at a profit. Their head offices are approximately 10 miles from one another, and their nearest
branches 4 miles apart; there are a considerable number of banks in the heavily populated intervening area.
Major emphasis at Commerce is on individual- and
consumer-type loans, while at Silverlake it is on loans
for purchasing or carrying securities, but both also
have significant amounts in commercial and industrial
loans and various other types of loans generally serviced by commercial banks.
Prior to Mr. Martin Ackerman's acquisition last
year of a controlling interest in both banks, the two
banks were perhaps competitive to some extent. However, both are relatively small. Together, the applicants would have only about 0.1 percent of IPC demand and time deposits in the highly concentrated
Los Angeles metropolitan area. Their offices are also
in close competition with nmnerous other banks, including the large California regional and statewide
systems. The overall competitive effect of the proposed
merger, therefore, would appear to be minimal.

T H E STATE OF N E W YORK NATIONAL BANK, KINGSTON, N.Y.,

AND T H E FALLKILL NATIONAL BANK AND T R U S T COMPANY,

POUGHKEEPSIE, N.Y.
Banking offices
Name of bank and type of transaction

Total assets
In operation To be operated

The State of New York National Bank, Kingston, N.Y. (955), with
and The Fallkill National Bank and Trust Company, Poughkeepsie, N.Y. (15641),
which had
merged Feb. 29, 1968, under charter of the latter bank (15641) and title "The
State of New York National Bank." The resulting bank at date of merger had

COMPTROLLER S DECISION

On September 28, 1967, The Fallkill National Bank
and Trust Company, Poughkeepsie, N.Y., and The
State of New York National Bank, Kingston, N.Y.,
applied to the Office of the Comptroller of the Currency for permission to merge under the charter of
the former and with the title of the latter.
The Fallkill National Bank and Trust Company is
located in Poughkeepsie, a city on the east bank of
the Hudson River halfway between New York City
and Albany. Poughkeepsie is the county seat of
Dutchess County and in 1960 had a population of
38,300. The International Business Machines Corporation is the largest industrial employer in the area.
There is also an urban renewal program, which has
received $29.5 million in Government funds.
The Fallkill National Bank and Trust Company,
which has IPC deposits of $12.3 million, was organized
in 1852 as a State bank and reorganized as a National
bank in 1864. In 1966 it became a State bank again
in order to participate in organizing and to become
an affiliate of Bankers Trust New York Corporation,
a registered bank holding company. The charter bank
has three offices in Dutchess County, its head office
and one branch in Poughkeepsie, and a recently opened
branch in Hyde Park.
The State of New York National Bank is located in
Kingston, on the west bank of the Hudson River 18
miles from Poughkeepsie. Kingston is the county seat
of Ulster County and had a population of 29,300 in
1960. It is a commercial and industrial center with
more than 100 small, diversified industries.
Both Ulster and Dutchess Counties are in the midHudson area, a diversified region whose expanding
economy is supported by manufacturing, agriculture,
and resort business. The rate of population growth has
been high in both counties. Between 1960 and 1966
there was an 18.7 percent increase in Dutchess County
and a 15.1 percent increase in Ulster County.




$40, 294, 541

6

21, 272, 556

3

61, 567, 098

9

The State of New York National Bank, with IPC
deposits of $28.1 million, was organized in 1865. All
six of the merging bank's offices are in the Ulster service
area, with an estimated population of over 50,000. The
main office and three branches are in Kingston; one
branch is in Ulster, a suburban area adjacent to Kingston; and one branch is in New Paltz, a village 14 miles
south of the main office.
The subject banks derive only a nominal amount of
business from the service area of one another. Thus,
the merger will not eliminate any competition. Less
than 1 percent of deposits and only 4 percent of the
loans are derived by either bank from the other's area.
This is due to the fact that the service areas of the
two banks are separated by the Hudson River and
connected by two toll bridges. Because of the river,
most of the traffic in the region is in a north-south
direction and, therefore, the bulk of the business for
both banks comes from their own community and the
immediately surrounding area. The closest offices of
the subject banks are 11.4 miles apart and there is one
bank, The First National Bank of Highland, intervening. The home office protection law in New York
precludes either bank from branching de novo into
the other's service area.
The transaction will have no adverse effect on banking competition in the trade area or in the State. In
the portions of the counties they now serve, the charter
bank is the fifth largest of five commercial banks and
holds 12 percent of the deposits and the merging bank
is second largest of the commercial banks and fourth
largest of all banks in Kingston. The resulting bank
will be the third largest commercial bank and the fifth
largest financial institution in the combined service
area. The transaction will mean that the BT New
York Corporation will have only 3.6 percent of the
commercial deposits in the entire third banking district of New York, and 9.4 percent of the commercial
deposits in the two-county area. The resulting bank
53

will still be the only subsidiary of BT New York
Corporation in the service areas involved.
Six savings and loan associations and nine mutual
savings banks also offer keen competition in the resulting service area. The largest savings bank, with
headquarters in Poughkeepsie, will have more than
three times the deposits of the resulting bank.
The merger will benefit both communities. It will
provide a stronger, more competitive institution with
a larger lending limit needed to help finance the area
development from agriculture to business and industry. It will solve a serious problem of management
depth for both institutions by providing more aggressive recruitment and training programs offered through
BT New York Corporation. In addition, it will provide expanded services, particularly in the areas of
trust services, international banking, and automated
facilities.
Applying the statutory criteria to the proposal, we
conclude that the proposed merger is in the public
interest, and the application is, therefore, approved.
JANUARY 25,

1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

Fallkill National Bank and Trust Co. ("Fallkill National"), since 1966 a wholly owned subsidiary of BT
New York Corporation, proposes to merge with The
State of New York National Bank ("New York National") . Fallkill National and New York National are
located in Dutchess and Ulster Counties, respectively;
these two adjacent counties are separated by the Hudson River in the growing mid-Hudson region of New
York.
The head offices of the merging banks are about 18
miles apart, and New York National has a branch

which is 11 miles from Fallkill National's main office.
Some direct competition would appear to be eliminated by the proposed merger, as shown by the amounts
of business each draws from the other's county. There
remains, nevertheless, the geographic separation between the two banks that limits the degree of existing
competition between them.
The proposed merger would result in some lessening
of potential competition.
New York National is a thriving and expanding
competitor in Ulster County; within the past 2 years it
has increased its branches from two to four, and its
net operating income has more than doubled in the
past 6 years. It is the second largest bank in Ulster
County with approximately 24 percent of total deposits
and 25 percent of IPC demand deposits. Since both
Ulster and Dutchess Counties are in the third New
York banking district, New York National would be
permitted to enter Dutchess County by de novo branching, except in cities and towns where a local bank
enjoys home office protection.
Acquisition by a holding company (Charter New
York Corp.) of the last independent bank headquartered in Poughkeepsie (Dutchess Bank) has recently
been approved by the Federal Reserve Board. This
acquisition would remove home office protection from
the city of Poughkeepsie, thus permitting New York
National to establish de novo branches in this city.
It is also possible that Fallkill National (which is a
subsidiary of BT New York Corporation) might expand into Ulster County by de novo branching or by
acquiring a smaller bank than New York National;
or that BT New York Corporation, a major bank holding company system, might enter Ulster County by
establishing a new bank or by acquiring a smaller bank.

FIRST NATIONAL BANK OF OREGON, PORTLAND, OREG., AND GRANT COUNTY BANK, JOHN DAY, OREG.
Banking offices
Name of bank and type of transaction

Total assets
In operation

Grant County Bank, John Day, Oreg., with
and First National Bank of Oregon, Portland, Oreg. (1553), which had
merged Mar. 4, 1968, under charter and title of the latter bank (1553). The
resulting bank at date of merger had

54




$9, 881, 461
1,578,377,249
1, 587, 947, 145

To be operated

2
113
115

COMPTROLLER'S DECISION

On October 5, 1967, the First National Bank of
Oregon, Portland, Oreg., and the Grant County Bank,
John Day, Oreg., applied to the Comptroller of the
Currency for permission to merge under the charter
and with the title of the former.
First National Bank of Oregon, with IPC deposits
of $1.1 billion, is headquartered in Portland and
maintains branches in every county of Oregon, except
Grant County. First National became a substantial
factor in Oregon banking in the 1930's when it acquired a number of smaller banks that were on the
verge of collapse. Since that time, First National has
grown principally through de novo branching in the
populous areas of western Oregon. The only new office
it has acquired by merger in the past 5 years was in
1965, when it merged with the Douglas County State
Bank in Roseburg at the latter's request, in order to
alleviate serious management problems.
The Grant County Bank is located in John Day, a
town of 1,600, which lies in the center of a sparsely
settled, mountainous area east of the Cascade Mountains. Commercial forests and cattle ranches are the
two important economic considerations in this area.
The population of John Day has remained fairly
stable, although the population of Grant County,
presently estimated at 7,500, has been declining steadily
as lumbering operations and cattle ranches become
larger and more efficient, resulting in fewer and fewer
employment opportunities. The Grant County Bank
is the only bank serving this large, isolated, and
mountainous county encompassing 4,533 square miles.
It operates one branch 13 miles east of John Day in
Prairie Village, a town of 910 people. The bank has
IPC deposits of $7.9 million and its lending limit is
$80,000.
The State's branch banking law with its home office
protection provision prohibits branching de novo in
John Day, although branching in other towns in the
county is legally permissible. Though there are other
towns in the county, located on the banks of the John
Day River, in which branch banking would be permissible, they are all so small and lacking in economic
significance that none has ever attracted a branch or
new bank charter. So sparse is the population of this
area that the per capita ratio to each of the two
offices of the Grant County Bank is only 3,750, substantially below the national average of 6,385. As a
result of the State's branching law, the Grant County
Bank enjoys a virtual banking monopoly, though not of
any great significance, in an area that it cannot ade-




quately serve by reason of its limited resources and
restricted services.
The applicant banks do not compete with each other
to any appreciable degree. The geographical isolation
of John Day, the small size and limited resources of
Grant County Bank, and the distance of 70 miles that
separates John Day from First National's closest branch
limit the extent of actual competition. Though some
business from individuals and enterprises situated in
John Day must, of necessity, accrue to First National
and other banks outside of Grant County, this is a
result of Grant County Bank's inadequacies rather than
a result of active competition.
This merger will, on consummation, remove the
legal obstacle that prevents de novo branching in John
Day, thereby presenting the only technical possibility
of competition by other banks in Grant County, although the small and decreasing population renders
this an unlikely prospect in the near future. This
merger will provide the residents of Grant County
with a bank offering a full range of banking services,
sufficient resources to meet their increasing local requirements, and personnel trained in the specialized
problems of the forestry and cattle ranching industries
that operate in the county.
Grant County Bank cannot reasonably expect to
meet the present and future needs of its customers. It
is a family-owned bank with no trained successors to
fill the executive positions now held by its senior officers, who have declared they will retire in the near
future. The possibility of attracting competent successor
personnel to so small and isolated a community is
remote. The managerial resources of the acquiring
bank are sufficiently adequate to provide competent
personnel to service the diversified credit requirements
of Grant County; personnel assigned to the Grant
County office by the resulting bank will not feel isolated professionally or personally as they retain the
capability of movement—both vertically and horizontally—throughout the First National system. Although it may appear that the entry of the First
National Bank into John Day as a consequence of this
merger is anticompetitive, in that it will inhibit the
entry of another bank into the county, such is not in
fact the case. In view of the already sparse and declining population, it is most unlikely that any prudent
group would seek a new charter whether First National
enters the market or not. On consummation of this
proposal all legal barriers to de novo entry into John
Day by another bank will be removed.
The public interest of Grant County and the interest
of the First National Bank of Oregon coincide in this
55

merger. Not only will the acquiring bank gain an outlet
in the only county in the State in which it is not represented, but the county and its residents will gain the
convenient services of a large, aggressive institution
capable of meeting the growing credit requirements
of the area and furnishing the expert services needed
by the local borrowers. The solution it offers to the
management succession problems of the Grant County
Bank makes it attractive to customers and stockholders
of that bank and allays their future concern.
In the light of the foregoing, this proposal appears
in the public interest. The application to merge is,
therefore, approved.
JANUARY 31,

1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

First National Bank, the largest bank in Oregon,
proposes to acquire Grant County Bank, the only bank
in Grant County and the 28th largest of the 50 banks
in Oregon, as of June 30, 1967. First National, with
deposits of $1.5 billion and 113 offices, has since 1928
acquired at least 49 other banks throughout the State,
and has accounted for at least 19 of the 48 mergers
which have occurred in Oregon since 1950. It presently holds approximately 41 percent of total commercial bank deposits in Oregon and about 33 percent
of all banking offices in the State. Grant County is
the only one of Oregon's 36 counties in which First
National does not have one or more offices.
Grant County Bank is the oldest and largest of the
eight banks headquartered in the 18 central and eastern Oregon counties east of the Cascade Mountain
range, an area containing two-thirds of the State's
area and about one-sixth of its population. The merging bank has $9 million in deposits and operates one

branch. Its nearest competitors are branches of First
National, the closest of which is about 70 miles distant
from John Day.
Commercial banking in Oregon is largely concentrated in the two largest banks, the applicant and
United States National Bank. These banks hold nearly
80 percent of all commercial bank deposits in the
State and 63 percent of all banking offices, and, between them, they have accounted for 41 of the 48
mergers which have occurred in the State since 1950.
First, National's branch at Burns, some 70 miles
south of John Day, is the closest banking office to
County Bank's head office. The next nearest offices are
the branches of First National and United States National Bank (Oregon's second largest bank) in Baker,
about 94 miles east of John Day.
In spite of these distances there appears to be some
competition between the merging banks which would
be eliminated by the proposed merger. First National
branches within 100 to 125 miles of John Day hold
279 deposit accounts totaling $483,713 and 141 loan
accounts totaling $1,085,467, all with account addresses within Grant County. This may be attributable
in part to Grant County Bank's legal lending limit
($80,000), and in part to the fact that some locations
within this very large county are as remote from Grant
County Bank's offices as from the distant offices of
other banks in adjacent counties.
In summary, we believe that the proposed merger
would eliminate competition between Grant County's
only bank and its closest competitor outside the county.
It would also cause some lessening of potential competition in Grant County by eliminating First National
as a probable independent entrant, and by possibly
raising the barriers to entry in the county.

THE FIDELITY NATIONAL BANK, LYNCHBURG, VA., AND BANK OF CHARLOTTE COUNTY, DRAKES BRANCH, VA.
Banking offices
Name of bank and type of transaction

Total assets
In operation

Bank of Charlotte County, Drakes Branch, Va.} with
and The Fidelity National Bank, Lynchburg, Va. (1522), which had
merged Mar. 14, 1968, under charter and title of the latter bank (1522). The
resulting bank at date of merger had

56




$2,432, 599
173,439,384
175, 873, 340

To be operated

23
24

COMPTROLLER S DECISION

On December 13, 1967, the Bank of Charlotte
County, Drakes Branch, Va., and The Fidelity National Bank, Lynchburg, Va., applied to the Comptroller of the Currency for permission to merge under
the charter and with the title of the latter.
The Fidelity National Bank, with IPC deposits of
$124 million, operates its main office and eight of its
22 branch offices in the city of Lynchburg, the commercial focal point of a four-county area in westcentral Virginia serving a combined population of
approximately 150,000. The economies of the charter
bank's service area are widely diversified in industry
and agriculture. The city has enjoyed growth of approximately 15 percent during the last decade.
The merging Bank of Charlotte County was organized in 1950 and operates a single office in Drakes
Branch, which is approximately 55 miles southeast of
the charter bank's main office. Drakes Branch, a town
of 850, is located in Charlotte County, which has a
total population of 13,500 persons. The economy of
the area is predominantly agricultural. That this bank,
the smallest among three banks in the county, has
shown only moderate growth in relation to recent increases in population and in proportion to the growth
rate of several surrounding area banks, indicates its
conservative management. It has IPC deposits of $1.9
million.
The charter bank has no offices in Charlotte County,
and its branch in Chase City is 23 miles south of Drakes
Branch. Consequently, there will be no elimination of
direct competition between the merging banks. The
merger will not eliminate an alternate banking choice
as far as the public is concerned.
No appreciable concentration of banking would result from the proposed merger. The resulting bank
would maintain its present relative position among

Virginia banks, and would still be substantially smaller
in the Lynchburg area than the $633 million First and
Merchants National Bank, the largest bank in
Virginia, which has five branches there.
Consummation of the merger will provide the
Drakes Branch area with services that are not now
available locally, including trust services, larger loan
limits, a stronger financial institution with experienced
and specialized personnel, automation, and a variety
of loan and investment services.
Applying the statutory criteria to the proposed merger, it appears to be in the public interest. The application is, therefore, approved.
FEBRUARY 8,

1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

Fidelity National Bank (total deposits $132.5 million) operates 22 offices in Lynchburg and eight counties: 10 of its offices are located in the immediate
Lynchburg vicinity, and the remaining 12 are located
in 11 towns from 12 to 85 miles from the main office.
Fidelity proposes to merge with Bank of Charlotte
County (total deposits $2.1 million), which is the
smallest of three commercial banks in Charlotte
County.
There appears to be very little direct competition
between Fidelity and Bank of Charlotte County. Their
head offices are 55 miles apart, and Fidelity's closest
branch is located in Brookneal, about 23 miles northwest of Drakes Branch.
Virginia branch banking would prevent Fidelity
from entering Charlotte County by de novo branching; thus, Fidelity cannot be regarded as a potential
entrant into Charlotte County, except by merger. Since
the acquired bank is the smallest in the county, the
merger would not involve any loss of potential competition.

PENNSYLVANIA NATIONAL BANK AND T R U S T COMPANY, POTTSVILLE, P A . , AND NATIONAL-DIME BANK O F SHAMOKIN, SHAMOKIN, P A .

Banking offices
Name of bank and type of transaction

Total assets
In operation

National-Dime Bank of Shamokin, Shamokin, Pa. (6942), with
and Pennsylvania National Bank and Trust Company, Pottsville, Pa. (1663),
which had
merged Mar. 15, 1968, under charter and title of the latter bank (1663). The
resulting bank at date of merger had




$15,454,138
90, 301, 863
105, 756, 001

To be operated

3
12
15

57

COMPTROLLER'S DECISION

On November 27,1967, the National-Dime Bank of
Shamokin, Shamokin, Pa., with IPG deposits of $12.2
million, and the Pennsylvania National Bank and
Trust Company, Pottsville, Pa., with IPG deposits of
$74.5 million, applied to the Comptroller of the Currency for permission to merge under the charter and
with the title of the latter.
Both merging and charter banks are located in the
anthracite coal region of Pennsylvania, where economic
conditions have been substandard for a number of
years. In Pottsville, which is located on the southern
fringe of the anthracite fields, local industrial redevelopment groups have been able to attract numerous
nationally known companies to the area. Since 1961,
unemployment has decreased from 16.4 percent to 3.9
percent and the area is no longer dependent primarily
upon coal operations. Shamokin's progress has been
slow, but during the past 4 years the Shamokin Area
Industrial Development Corporation has constructed
five new industrial buildings, which are now occupied
and furnish employment for about 600 local workers.
Continued efforts are being made to improve the
economy.
The Pennsylvania National Bank and Trust Company is headquartered in Pottsville, and serves Schuylkill County in Pennsylvania through 12 branches. It.
has been aggressive over the past 10 years, in that it
has endeavored to shore up and expand the banking
industry when no other banks were interested in this
once depressed coal area. The charter bank's management is considered excellent and it is well staffed with
competent junior officers. This bank receives its primary competition from the American Bank and Trust
Company of Pennsylvania, Reading, Pa., which has
total resources of $343 million, and presently operates
four branches in Schuylkill County.
The merging National-Dime Bank of Shamokin is
located in adjoining Northumberland County and
presently operates two branches. It has not been overly
aggressive, as is exemplified by its earnings, which are
below average. In addition, the merging bank has a
serious management succession problem. Its primary
competition in Shamokin is provided by the Guarantee Trust and Safe Deposit Company, Market
Street National Bank, West End National Bank, and

58




Peoples Bank of Shamokin, Pa. Three savings and loan
associations, with total assets of $34 million, also provide competition.
Competition between charter and merging banks is
nonexistent, in that the banks are 30 miles distant from
each other.
The resulting bank will be able to offer a broader
range of services to the customers of the merging bank,
including specialization in all trust services, guaranteed
and insured mortgage loans and all types of installment credit. Consummation of the merger will also
resolve the management succession problem of the
merging bank. It will enable the resulting bank to
compete more effectively with the banks now operating in the area and, thus, bring to the residents of
Shamokin the full benefits that flow from aggressive
competition.
Applying the statutory criteria, we conclude that
the proposal is in the public interest, and the application is, therefore, approved.
JANUARY 15,

1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

Pennsylvania National Bank and Trust Company
("Pennsylvania National"), organized in 1866, currently operates 11 branch offices in addition to its head
office. National-Dime Bank of Shamokin ("NationalDime"), established in 1883, presently operates a head
office and two branch offices.
It does not appear that substantial direct competition exists between National-Dime and Pennsylvania
National. National-Dime's head office is located about
30 miles northwest of the head office of Pennsylvania
National and about 11 miles west of the nearest branch
of the latter. Intervening between the two is the city
of Mt. Carmel, which is served by three banks.
Pennsylvania law (Purdon's Pennsylvania Statutes
Title 7 Sec. 819-204.1) permits a commercial bank to
establish de novo branches in the county of the bank's
head office and in contiguous counties. The head
offices of the merging banks here are located in adjoining counties, and, thus, it appears that Pennsylvania
National is a potential entrant by de novo branching
into National-Dime's service area. Consummation of
the proposed merger will eliminate this potential
competition.

COLONIAL NATIONAL BANK, HADDONFIELD, N.J., AND MERGHANTVILLE NATIONAL BANK & TRUST COMPANY, MERCHANTVILLE, N.J*
Banking offices
Total assets

Name of bank and type of transaction

In operation

Merchantville National Bank & Trust Company, Merchantville, N.J. (8323), with,
and Colonial National Bank, Haddonfield, N.J. (14457), which had
merged Mar. 22, 1968, under charter and title of the latter bank (14457). The
resulting bank at date of merger had

COMPTROLLER'S DECISION

On December 6, 1967, the Merchantville National
Bank & Trust Company, Merchantville, N.J., and the
Colonial National Bank, Haddonfield, N.J., applied
to the Comptroller of the Currency for permission to
merge under the charter and with the title of the latter.
The participating banks are located in the northern
portion of Camden County, within the PhiladelphiaCamden metropolitan area. Camden County, which
is located across the Delaware River from the city of
Philadelphia, has been regionally, historically, and
economically linked to Philadelphia. The northern portion of the county, wherein the participating banks are
located, is primarily a residential area with most of its
labor force employed in Philadelphia and in surrounding areas of New Jersey. Future prospects for the area's
economic growth are good.
The charter bank, with IPC deposits of $75 million
and seven branch offices, is a full-service institution
and almost completely automated. Although it ranks
third in size in terms of deposits among all commercial
banks in Camden County, it is less than half the size
of the two larger competing banks, viz., the Camden
Trust Company with total deposits of $227 million and
the First Camden National Bank and Trust Company
with total deposits of $197 million.
The merging bank, with IPC deposits of $20 million
and one branch office, ranks fifth in size among Camden County banks, with about 3 percent of total county
deposits. Because of its limited lending capability, the
bank has not been active in the field of commercial
loans and is presently faced with a serious management succession problem.
Banking competition in Camden County is provided
by nine commercial banks with a total of 56 offices.
There are 68 savings and loan associations, 34 credit
unions, four offices of sales finance companies and 22
offices of personal loan companies operating in the
county and competing with the commercial banks. The
large Philadelphia banks provide strong competition in
the field of commercial loans and are conveniently




$23, 932, 299
91, 348, 325

To be operated

2
6

115,280,624

8

located banking alternatives for Camden County residents employed in Philadelphia. Some competition is
also provided by Burlington County banks.
The only competition between the participating
banks derives from the charter bank's Collingswood
office, which is near to Merchantville. Intervening
offices of other banks and congested traffic routes
minimize the competition between the merging banks.
Since New Jersey law prohibits the charter bank
from establishing a de novo branch in Merchantville
or in any of its surrounding municipalities, potential
competition is obviated.
The addition of the merging bank to the charter
bank will have little effect on overall competition in
the area. The charter bank's relative position as to
size among the other commercial banks will not
change; in Camden County it will still rank third. If
anything, this merger will enhance competition between the resulting bank and the other banks doing
business in the county.
Consummation of this merger will have its effect in
Merchantville, where, besides solving the management
problem in the merging bank, it will introduce a competitive bank better able to meet the credit needs of
this community. The resulting bank will provide better
and more convenient services to the residents of
Merchantville.
Considered in the light of the statutory criteria, this
merger is judged to be in the public interest, and is,
therefore, approved.
FEBRUARY 6,

1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

This is a proposal to merge the Colonial National
Bank, Haddonfield, N.J. (seven offices with deposits
of $80.6 million), and the Merchantville National
Bank and Trust Company, Merchantville, N.J. (two
offices with deposits of $20.8 million). All offices of
both banks are located in communities which are
suburbs of Camden, N.J.
The merging banks have offices located less than
59

3 miles apart and offer a similar line of banking services. Colonial is the third largest bank in the county
with about 15 percent of the county's total deposits and
11 percent of its IPG demand deposits; Merchantville
National is the fifth largest bank in the county with 4

percent of its total deposits and 3 percent of IPC demand deposits. The proposed merger would eliminate
present direct competition between the applicants, and
would increase banking concentration in Camden
County.

SOUTHERN NATIONAL BANK OF NORTH CAROLINA, LUMBERTON, N.G., AND FIRST NATIONAL BANK IN HENDERSON, HENDERSON, N.C.

Banki\ ? offices
Name of bank and type of transaction

Total assets

In operation To be operates
First National Bank in Henderson, Henderson, N.C. (13636), with
and Southern National Bank of North Carolina, Lumberton, N.C. (10610), which
had.
merged Mar. 22, 1968, under charter and title of the latter bank (10610). The
r^ulting bank at date of merger h a d , , , , . ,
,,
•, T r

COMPTROLLER'S DECISION

On November 16,1967, the Southern National Bank
of North Carolina, Lumberton, N.C, with IPC deposits of $93 million, and the First National Bank in
Henderson, Henderson, N.C, with IPC deposits of $9
million, applied to the Comptroller of the Currency
for permission to merge under the charter and with
the title of the former.
Henderson, with a population of about 15,000, is
located in the north-central part of the State and about
15 miles from the Virginia border, in a primarily industrial area. The production of textiles and processing of tobacco are the predominant industries. Additional economic support to the area is provided by
farming, which k principally devoted to the growing
of tobaeeo, and recreational opportunities at nearby
Kerr Lake and Dam Reservation. With more than 300
retail and service outlets, Henderson serves as a commercial center for several surrounding communities.
The present growth pattern is expected to continue.
Lumberton has a population of about 20,000, and is
located in the south-central part of the State in a primarily agricultural area committed to the production
of tobacco, cotton, and corn. Other areas served by
this bank and its branches are noted for their industry,
their resorts, and Fort Bragg, described as the largest
land area military reservation in the United States and
located at Fayetteville. There is a general trend in
these areas toward urbanization with rural populations
gradually declining.
The merging bank, organized in 1932, presently
operates one branch office in Henderson. Due to its
60




$11,650,742

2

116,138,807

33

127, 875, 765

35

limited resources, the bank has not been able to meet
fully the customer needs and as a result it has had
little growth during the past 4 years. Banking competition in Henderson is afforded by Citizens Bank and
Trust Company, with deposits of $21 million, and two
branches of Peoples Bank and Trust Company of
Rocky Mount, with deposits of $69 million. Competition is also provided by two banks in Oxford, 13 miles
to the west of Henderson, and by one bank in Warrenton, 15 miles to the northeast.
The charter bank, organized in 1897, presently operates 31 branch offices in 19 communities in 11 counties
throughout the central part of the State. It competes
with a number of banks in the areas that it serves, including branches of the First-Citizens Bank and Trusi
Company and Branch Banking and Trust Company
in Fayetteville. Throughout its service area, Southern
National Bank faces strong competition from savings
and loan associations and various other financial
institutions.
As the closest offices of the merging banks are 74
miles apart, there is no competition between them tc
be affected by this merger. Competition between tht
charter bank and its competitors will be little affected
as the impact of the merger will be felt in the Henderson area. Effects on competition in the Hendersor
area will be minimal, as that area should continue tc
afford plenty of room for the operation and expansioi
of any competing bank.
Consummation of this merger will introduce in Hen
derson an aggressive, competitive bank better able t<
meet the credit needs of the expanding industries ii

this area. The resulting bank will provide the residents
of Henderson with convenient trust service, advice on
farm credit, and data processing.
Considered in the light of the statutory criteria, this
merger is judged to be in the public interest, and is,
therefore, approved.
FEBRUARY 19,1968.
SUMMARY OF REPORT BY ATTORNEY GENERAL

Southern National, with deposits of $107.6 million
and 32 offices throughout central North Carolina, is
the eighth largest bank in the State. Since 1964 it has
merged with seven banks, adding almost $43 million
in deposits and 18 offices thereby.
Because of the large distance (almost 75 miles)
between the nearest offices of the participating banks,

there is little or no direct competition between them
at the present time.
North Carolina law permits statewide de novo
branching. However, it is not likely that Henderson
Bank, with its limited resources and local orientation,
would open offices in areas now served by Southern
National in the foreseeable future. On the other hand,
Southern National has revealed recent ambitious expansion activities and has scattered branch operations;
these factors suggest that it could become a competitor of Henderson Bank at some time in the future,
through the de novo establishment of a branch in the
Henderson vicinity. To this extent, the proposed transaction would eliminate Southern National as a source
of potential competition in Vance County or in the
Henderson area.

NATIONAL BANK AND TRUST COMPANY, CHARLOTTESVILLE, VA., AND THE BANK OF NEW HOPE, NEW HOPE, VA.
Banking offices
Total assets

Name of bank and type of transaction

In operation

The Bank of New Hope, New Hope, Va., with
and National Bank and Trust Company, Charlottesville, Va. (10618), which had..
merged Mar. 29, 1968, under charter and title of the latter bank (10618). The
resulting bank at date of merger had

COMPTROLLER S DECISION

On December 7, 1967, the National Bank and Trust
Company, Charlottesville, Va., and The Bank of New
Hope, New Hope, Va., applied to the Office of the
Comptroller of the Currency for permission to merge
under the charter and with the title of the former.
The National Bank and Trust Company, with IPC
deposits of $62 million, is headquartered in Charlottesville, in east-central Virginia. It operates five branches
in Charlottesville and six in central Virginia communities, as far as 77 miles from its main office.
Charlottesville is the principal trading center of Albermarle County and portions of surrounding counties.
The town itself has been expanding rapidly and deriving economic health from the University of Virginia, tourism, agriculture, and diverse manufacturing
firms. Further industrial and residential growth is expected in Charlottesville, although the population of
the rest of Albermarle County has been in gradual
decline.
The Bank of New Hope, with IPC deposits of nearly




$1, 945, 531
80,494, 442
82, 381, 723

To be operated

2
13
15

$1.4 million, is located in New Hope, Va., 40 miles
north of Charlottesville. New Hope is a village, having
a population estimated at 250, in a prosperous agricultural area. The bank has maintained an extremely
conservative stance and, consequently, many local residents are doing their banking business with larger
banks in nearby Staunton, Waynesboro, and Harrisonburg. The bank operates a small branch in the unincorporated village of Fisherville, 8 miles south of
New Hope, which branch is 6 miles from the closest
branch operated by the charter bank in Stuarts Draft.
The merging bank estimates that less than 1 percent
of its business originates at its Fisherville branch, and
it has no customers in Stuarts Draft. The charter bank
has a few small accounts originating in Fisherville.
The principal competitive effects of this merger will
occur in Augusta County, where New Hope is located,
and the effects will be beneficial rather than adverse.
At this time, there are seven other banks operating in
the county, including Virginia's two largest. This
merger, by substituting the facilities of a larger, fullservice bank with a record of efficient utilization and
61

deployment of its resources for a small and unprogressive institution in New Hope, will stimulate banking
competition in the county.
The projected industrialization of the New Hope
area will require the services of a bank having a substantial lending limit and specialized lending departments. The charter bank is well qualified to meet the
present and future needs of the area's customers and
will compete effectively for the accounts now being
lost to the larger banks in Staunton, Waynesboro, and
Harrisonburg.
The proposal appears to be in the public interest.
The merger, therefore, is approved.
FEBRUARY 13,1968.
SUMMARY OF REPORT BY ATTORNEY GENERAL

The National Bank and Trust Company (deposits,
$68.8 million), operates five banking offices in Charlottesville (population 30,000), and seven in seven
towns in four counties within a radius of 25 to 30

miles from Charlottesville. New Hope Bank (deposits,
$1.5 million) operates its main office in New Hope
(population 250), and one branch in Fishersville, an
unincorporated area (population 2,800).
Although this branch is 6 miles from the closest
branch office of the National Bank and Trust Company, competition between the two banks would appear
to be insignificant.
The principal competitors of Bank of New Hope are
located in Staunton, which is 11 miles southwest of
New Hope, and in Waynesboro, which is 12 miles south
of New Hope. Bank of New Hope is considerably
smaller than any of these six competing banks, the next
smallest bank having deposits of $7.9 million.
In conclusion, due to the small size both of The Bank
of New Hope and of the population it serves, plus the
minimal current competition between the merging
banks, we do not foresee significant adverse effects from
this merger upon competition in the Fishersville-New
Hope, Va., area.

T H E CITIZENS AND SOUTHERN NATIONAL BANK, SAVANNAH, G A . , AND COMMERCIAL AND SAVINGS BANK O F AUGUSTA, AUGUSTA, G A .

Name of bank and type of transaction

Total assets

Banking offic es
In operation

Commercial and Savings Bank of Augusta, Augusta, Ga., with
was purchased Mar. 30, 1968, by The Citizens and Southern National Bank,
Savannah, Ga. (13068), which had
After the purchase was effected, the receiving bank had

COMPTROLLER'S DECISION

On September 26,1967, The Citizens and Southern
National Bank, Savannah, Ga., with IPC deposits of
$925.1 million, applied to the Comptroller of the Currency for permission to purchase the assets and assume
the liabilities of the Commercial and Savings Bank of
Augusta, Augusta, Ga., with IPC deposits of $14.5
million.
The selling bank is affiliated with the charter bank
through common stock ownership. This acquisition is
intended to streamline the corporate structure of Citizens and Southern National Bank and its affiliate, Commercial and Savings Bank, by utilizing a recent Georgia
statute that will allow the buying bank to operate the
selling bank's offices as branches in Augusta. No competitive realignment will occur as the two offices of
the Commercial and Savings Bank have, in reality,
62




$17,146,000

1

1,125,976,103
1,143,121,103

52

To b e operated

53

been part of the Citizens and Southern system for some
time.
Although the charter bank is headquartered in
Savannah, it maintains its principal office in Atlanta.
Through a combination of branches and affiliated
banks, it operates a statewide banking system. The
Citizens and Southern National Bank has four offices
in Augusta, where the Commercial and Savings Bank
operates its two offices.
The amalgamation of the two banks will affect only
the Augusta area. Augusta lies 120 miles north of
Savannah, in northeastern Georgia. It is located on
the Savannah River, a navigable river terminating in
the Atlantic Ocean. Augusta's location has attracted
a diversity of manufacturing and industrial firms. Textile and related industries provide the largest source of
employment, although chemicals, paper and paper

products, and brick and tile products are also manufactured there.
Augusta is a trading and service center for a threecounty area comprised of Richmond and Columbia
Counties in Georgia and Aiken County in South Carolina. This area presently has a population of 300,000.
Prospects for its future growth and continued prosperity are considered very good.
The area served by the Commercial and Savings
Bank is primarily the Augusta metropolitan area and
the competitive impact of the acquisition will be limited to that area. The applicant banks are not in competition with each other inasmuch as they are affiliated;
they have pursued identical and compatible banking
policies since owners of Citizens and Southern acquired
control of the limited and unprogressive Commercial
and Savings Bank in 1965 and revitalized it.
Competition in Augusta will continue to be provided by the six-office Georgia Railroad Bank and
Trust Company, Citizens and Southern's prime competitor, and the smaller First National Bank and Trust
Company, with three offices, and the single office Bank
of Augusta. The Georgia Railroad Bank has resources
of $125 million; the others, $33.5 million and $3.3
million, respectively. Other small banks operate in the
two Georgia counties within Augusta's metropolitan
area, and keen competition is also provided by the $420
million South Carolina National Bank, Columbia, S.C.,
and the $106 million State Bank and Trust Company,
Aiken S.C., which have offices in Aiken County.
The recent and extensive innovations and improvements in the bank to be acquired testify to the quality
of Citizens and Southern's successful efforts in meeting
the needs of the banking public. Each office of the
resulting bank in Augusta will provide a wide range
of services and the bank expects to continue its history
of aggressively adapting to growth and change in
Georgia.
The absence of adverse competitive effects and the
potential public benefit to be derived from this proposal are clear. The acquisition is, therefore, approved.
FEBRUARY 21,

1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

This proposed transaction involves (i) a small twooffice Augusta commercial bank ("Commercial"),
which was a savings bank until 1965, and (ii) a large
statewide bank ("C&S National") which operates four
offices in Augusta. The latter's Augusta offices account
for approximately $57 million out of its $925 million




in deposits, and make C&S National the second largest
bank in Augusta.
C&S National, itself a registered bank holding company, controls another bank holding company ("C&S
Holding"). In 1965, C&S Holding acquired 5 percent
of the stock of Commercial, and various officers, directors, employees, and others associated with C&S National purchased additional amounts of this stock. After
this acquisition, various C&S personnel were installed
as president and other executive officers of Commercial. Thus, Commercial has been effectively controlled
by C&S Holding since 1965, although no approval has
been sought or received from the Federal Reserve
Board under the Bank Holding Company Act of 1956.
Both Commercial and C&S National have offices in
downtown Augusta. C&S National's three downtown
branches are all within a mile of Commercial's two
offices. Their closest offices are 0.7 mile apart on the
same street. Both banks are currently engaged in a
broad range of general commercial banking business,
although Commercial still holds a high proportion of
real estate loans and time deposits, as a result of its
traditional role as a savings bank.
C&S National controls about 26 percent of the total
deposits in Richmond County, where the city of
Augusta is located, and its acquisition of Commercial
would increase its market share by about 6 percent.
This increase would be significant, since it would result
in the two largest banks controlling 80 percent of all
commercial bank deposits and the three largest controlling 93 percent. If the entire Augusta SMSA
(which also includes Aiken County across the Savannah River in South Carolina) were used as a relevant
market (although we believe this to be too broad a
geographic market), the market shares of the merging
banks would still be high; the merging banks would
control about 27 percent of total deposits in this
broader area.
The applicants argue that the proposed transaction
would not have an anticompetitive effect because of
C&S Holding's domination of Commercial (Application pp. 79-80). This argument overlooks the fact
that, so long as C&S Holding holds but 5 percent of
Commercial's stock, its control over Commercial may
be somewhat tenuous, and might be upset by the sale
of stock by some of C&S Holding's individual affiliates; in that event, Commercial might become a fully
competitive alternative to C&S National in Augusta.
Accordingly, we conclude that the proposed transaction, by foreclosing this precompetitive possibility,
would eliminate potential competition between Commercial and C&S National.
63

THE MIAMI CITIZENS NATIONAL BANK AND TRUST COMPANY, PIQUA, OHIO, AND THE BRADFORD NATIONAL BANK, BRADFORD, OHIO
Banking offices
Name of bank and type of transaction

Total assets
In operation

The Bradford National Bank, Bradford, Ohio (14077), with
and The Miami Citizens National Bank and Trust Company, Piqua, Ohio (1061),
which had
merged Mar. 30, 1968, under charter and title of the latter bank (1061). The
resulting bank at date of merger had

COMPTROLLER'S DECISION

On November 16, 1967, The Bradford National
Bank, Bradford, Ohio, with IPG deposits of $3.4 million, and The Miami Citizens National Bank and
Trust Company, Piqua, Ohio, with IPC deposits of
$21.8 million, applied to the Comptroller of the Currency for permission to merge under the charter and
with the title of the latter.
The Miami Citizens National Bank and Trust Company, Piqua, Ohio, was chartered on April 26, 1865,
and presently operates five branches. The service area
of the charter bank, which includes all of Miami
County and portions of seven contiguous counties, has
a very prosperous economy based upon a very substantial, stable, diversified, and growing industrial activity. The competition in its trade areas is vigorous,
with six Miami County savings and loan associations,
insurance companies, credit unions, sales finance outlets, personal loan companies, and Federal agencies
that actively compete in the loan market.
The Bradford National Bank, Bradford, Ohio, was
organized on February 24, 1934, and is a single-unit
institution. Bradford is a small rural trade center and
most of its residents are employed in the larger nearby
cities. This community has experienced stagnation
and is considerably removed from the main arteries of
commerce. Because of its small size, limited lending
power, and lack of aggressiveness, the merging bank
is not in a position to provide modern and efficient
service to the Bradford community.
It appears that little, if any, competition would be
eliminated by the merger, because there is little overlapping in the areas served, the depositors and borrowers serviced, and no banking offices will be eliminated.
The resulting bank will be able to offer a broader
range of services to the customers of the merging bank,
including a greater lending limit, specialized loan personnel, and the benefits of more sophisticated equip-

64




To be operated

$4, 183, 534
30, 814, 691

6

34, 998, 225

7

ment now in service at the charter bank. In addition,
trust services would be made available to the customers
of the merging bank. Consummation of the merger will
not only resolve the vexing management succession
problems of the merging bank, but also will enable the
resulting bank to compete more effectively with the
larger financial institutions now operating in the area.
It will bring to the residents of Bradford the full benefits that flow from aggressive competition.
Applying the statutory criteria, we conclude that the
proposed merger is in the public interest, and the application is, therefore, approved.
JANUARY 29,1968.
SUMMARY OF REPORT BY ATTORNEY

GENERAL

Miami Citizens National Bank and Trust Company
of Piqua, Ohio ("Miami Citizens") proposes to merge
with Bradford National Bank of Bradford, Ohio
("Bradford National"). Both banks operate in Miami
County in western Ohio.
The nearest offices of Piqua Bank to Bradford are
its head office and branch in Piqua, about 8 miles east
of Bradford. There may be some competition between
the merging banks, but, in view of the distance between
their closest offices (8 miles) and the presence of intervening offices of other banks in Covington, this competition would appear to be somewhat limited.
Bradford National is the smallest of five banks in
Miami County (with 4 percent of total bank deposits)
and Miami Citizens is the second largest (with about
25 percent of the total). The resulting bank would continue to be second largest, and concentration would be
raised within the county.
However, in view of the limited amount of direct
competition between the merging banks and the small
size of the acquired bank, the anticompetitive significance of the proposed merger may not be particularly

T H E LANCASTER NATIONAL BANK, IRVINGTON, V A . , AND CHESAPEAKE BANKING COMPANY, LIVELY, V A .

Name of bank and type of transaction

Total assets

Banking offices
In operation To be operated

Chesapeake Banking Company, Lively, Va., with
and The Lancaster National Bank, Irvington, Va. (5290), which had
merged Apr. 27, 1968, under charter of the latter bank (5290) and title "Chesapeake National Bank." The resulting bank at date of merger had

COMPTROLLER'S DECISION

On January 31, 1968, The Lancaster National Bank,
Irvington, Va., applied to the Comptroller of the Currency for permission to merge with Chesapeake Banking Company, Lively, Va., under the charter of the
former and with the title "Chesapeake National Bank."
The charter bank's two offices are located in Lancaster County. Although its main office is in Irvington,
which has a population of 570, its executive offices are
maintained at the branch in Kilmarnock. Kilmarnock,
with a population of 1,000, is a thriving retail center
serving all of Lancaster County and portions of adjacent Northumberland and Richmond Counties. The
economy of the Kilmarnock-Irvington area is primarily
dependent upon agriculture and seafood processing.
Lively, with a population of 350, depends on an
economy similar to that of Kilmarnock. The town's
trade area includes the western portion of Lancaster
County and small sections of eastern Richmond County
and central Northumberland County.
The Lancaster National Bank, with IPC deposits of
$3.5 million, and the merging Chesapeake Banking
Company, with IPC deposits of $1.7 million, are located 10 miles apart. Although some competition exists
between the two institutions, it is considered minimal
and the number of common depositors and borrowers
is insignificant. Of greater significance is the competition faced by the participating institutions from the
$3.8 million Peoples Bank of White Stone, White Stone,
Va., now contemplating merger with the Bank of
Virginia, and the $8.5 million Bank of Lancaster in
Kilmarnock.
The union of the two institutions will not only create
a more substantial bank better able to meet the needs
of this growing community, but will also introduce a
far more aggressive bank into Lively and resolve the
merging bank's management problems.
Applying the statutory criteria to the proposed mer-




$2,118,298
4,164,427

1
2

6,437, 859

3

ger, we conclude that it is in the public interest. The
application is, therefore, approved.
MARCH 26, 1968.
SUMMARY OF REPORT BY ATTORNEY GENERAL

Lancaster National Bank ("Lancaster National")
operates a main office in Irvington, Va. (population
570) and one branch in Kilmarnock (population 927).
Chesapeake Banking Company ("Chesapeake Bank")
operates a single office in Lively, Va. (population 206),
about 14.8 miles northwest of Irvington, and 10 miles
northwest of Kilmarnock.
The geographic area served by the merging banks
is Lancaster County, a commercial fishing and resort
area lying on the Chesapeake Bay end of the "Northern Neck" of Virginia, the peninsula between the
Potomac and Rappahannock Rivers.
The nearest office of Lancaster National (at Kilmarnock) is located about 10 miles from the office of
Chesapeake Bank. There are no intervening banking
offices and it is probable that some limited direct
competition between the two institutions does exist.
Lancaster County is presently served by four banks
with five offices and the merger would, of course, reduce the number to three. Bank of Lancaster (located
about 3 miles east of Kilmarnock), is the largest of
the four with total deposits of $7.8 million. Another
small bank, the Peoples' Bank of White Stone (about
4 miles northeast of Lancaster), has pending an application to merge with the Bank of Virginia, headquartered in Richmond.
This proposed merger between Chesapeake Bank
and Lancaster National would increase Lancaster
National's share of IPC demand deposits from 30 to
43 percent within the county as a whole. However,
any anticompetitive effects are likely to be moderated
by the distance between the merging banks, their very
small sizes, and the small population in their service
areas.

65

CUMBERLAND COUNTY NATIONAL BANK AND TRUST COMPANY, NEW CUMBERLAND, PA., AND FARMERS' AND MERCHANTS' BANK,
NEW OXFORD, PA.
Banking offices
Total assets

Name of bank and type of transaction

In operation

Farmers' and Merchants' Bank, New Oxford, Pa., with
and Cumberland County National Bank and Trust Company, New Cumberland,
Pa. (14542), which had
merged May 1, 1968, under charter and title of the latter bank (14542). The
resulting bank at date of merger had

COMPTROLLER'S DECISION

On January 5, 1968, the Farmers' and Merchants'
Bank, New Oxford, Pa., with IPG deposits of $5.3
million, and the Cumberland County National Bank
and Trust Company, New Cumberland, Pa., with IPC
deposits of $61 million, applied to the Comptroller
of the Currency for permission to merge under the
charter and with the title of the latter.
New Cumberland, with a population of 6,200, is
situated in the eastern portion of Cumberland County
on the west bank of the Susquehanna River opposite
Harrisburg, the State capital. Although the area is
primarily residential in nature, industry and commerce continue to expand in the county.
New Oxford, essentially a diversified farming community located in Adams County, has a population of
1,600. Its trade area population is 4,600. A number of
small, local plants employ 500 persons in diversified
fields.
The Cumberland County National Bank and Trust
Company was organized as a State bank in 1904 and
converted to a National bank in 1946. It now operates
seven branches and two military facilities. The principal area served by this bank is the eastern half of
Cumberland County and the northwestern sector of
adjoining York County. This area has an estimated
population of approximately 259,000. The charter
bank's largest commercial competitors are the $236
million National Bank and Trust Company of Central
Pennsylvania, York, Pa., and the $160 million Harrisburg National Bank and Trust Company, Harrisburg, Pa.
The merging Farmers' and Merchants' Bank was
incorporated in 1900. Operating no branches, it performs all banking functions at the New Oxford location. Competition for this bank derives from the $26
million Bank of Hanover and Trust Company and the
$28 million Farmers Bank and Trust Company, both
of which are located 8 miles south in Hanover.
66




To be operated

$6, 642, 670
78, 126, 590

9

84, 769, 260

10

Competition between the participating banks appears to be virtually nonexistent. Their service areas
neither overlap nor are they contiguous. The merging
bank is approximately 31 miles south of the charter
bank's main office and 19 miles from its closest branch
office in Dillsburg.
Approval of this merger will be substantially beneficial to both banks and to both communities. The
charter bank's increase in size will enable it to meet
competition from the larger outside banks operating
within its service area, while the introduction of a
larger bank in the New Oxford area capable of making
loans in excess of the present limit of $55,000 will provide stronger competition there. Effectuation of the
proposal will also make available trust services to
present customers of Farmers' and Merchants' Bank
and should improve the charter bank's earnings.
Applying the statutory criteria to the proposed
merger, we conclude that it is in the public interest.
The application is, therefore, approved.
MARCH 18,1968.
SUMMARY OF REPORT BY ATTORNEY GENERAL

The Cumberland County National Bank (CCNB),
with 10 branches and $63.9 million in deposits, proposes to merge with the Farmers' and Merchants' Bank
(F&MB), a unit bank with deposits of $5.3 miMion.
The head office of CCNB is located in the eastern
part of Cumberland County (1960 population 124,816) in an expanding urban area across the Susquehanna River from Harrisburg; F&MB is located at
New Oxford in the central part of Adams County
(1960 population 51,906), which borders Cumberland
County to the south.
CCNB, a moderately large bank with a market share
of approximately 35 percent of IPC demand deposits
in Cumberland County, will be absorbing a relatively
small bank (F&MB), with an 8 percent market share

in its own county (Adams County). The nearest
branch office of GCNB is 19 miles from F&MB, with
numerous intervening banking alternatives, and the
head offices of the merging banks are 31 miles apart.
It is therefore unlikely that any considerable direct
competition now exists between them.
Since Adams County is directly contiguous to Cumberland County in which CCNB has its head office,
CCNB would be permitted under Pennsylvania law
to enter Adams County by de novo branching. Ac-

cordingly, the proposed merger would eliminate CCNB
as a potential independent entrant. However, we do
not view this as a serious competitive loss for two
reasons. First, Adams County is served by a considerable number of banking alternatives, 11 banks with
15 offices, a fairly large number of banks for a county
with its population. Secondly, the acquired bank does
not have a large market share; accordingly, we view
the situation quite differently than we would if CCNB
were acquiring one of the largest banks in the market.

FIRST UNION NATIONAL BANK OF N O R T H CAROLINA, CHARLOTTE, N.C., AND T H E NATIONAL BANK OF ALAMANCE O F GRAHAM
GRAHAM, N.C., AND Q U E E N CITY NATIONAL BANK, CHARLOTTE, N . C .

Banking offices
Name of bank and type of transaction

Total assets
In operation

First Union National Bank of North Carolina, Charlotte, N.C. (9164), with
and The National Bank of Alamance of Graham, Graham, N.C. (8844), with
and Queen City National Bank, Charlotte, N.C. (15650), which had
merged May 4, 1968, under charter of the latter bank (15650) and with title
"First Union National Bank of North Carolina." The resulting bank at date of
merger had

COMPTROLLER'S DECISION

On January 10,1968, the First Union National Bank
of North Carolina, Charlotte, N.C, with IPC deposits
of $556.8 million, and The National Bank of Alamance
of Graham, Graham, N.C, with IPC deposits of $11.1
million, applied to the Comptroller of the Currency
for permission to merge into the Queen City National
Bank (organizing), Charlotte, N.C, under the charter
of the latter bank and with the title "First Union
National Bank of North Carolina."
Queen City National Bank on the date of this decision was in the process of organization. Prior to the
effective date of this merger, the bank will have no
deposits and no loans and, for the purposes of this
application, the Queen City National Bank is not considered to be in competition with any other commercial
bank or other financial institution.
First Union National Bank, following an aggressive
policy, has grown from $74 million in total resources
in 1955 to its present size of $753 million in total
resources, thereby becoming the third largest commercial bank in North Carolina. This bank is headquartered in Charlotte, the financial and distribution center
of the State. Located in the south-central Piedmont
section of North Carolina, Charlotte is one of the State
leaders in manufacturing and boasts the highest retail
331-934—69-




$794, 118,610
15, 666, 900
258, 700
807, 535, 510

To be operated

104
3

107

sales totals in the two Carolinas. The bank presently
operates through 106 offices in 49 communities. Principal competition for this bank derives from the $1.35
billion Wachovia Bank and Trust Company operating
102 offices in 38 communities, the $1 billion North
Carolina National Bank operating 76 offices in 16 communities, and the First and Citizens Bank and Trust
Company operating 100 offices in 48 communities.
Competition is also provided by the strong regional
systems of the $364 million Northwestern Bank and the
$184 million Branch Bank and Trust Company.
The National Bank of Alamance of Graham is located in the north-central portion of the State approximately 117 miles from the head office of First Union.
Graham, the county seat of Alamance County, has a
population of approximately 7,723 people and a service area population of approximately 85,674 people.
The town of Graham is adjacent to the city of Burlington, whose 1960 population was 33,139. The
Graham-Burlington area is heavily industrialized with
over 50 percent of the county's work force employed in
manufacturing and only 4 percent of the work force
agriculturally employed. The textile and apparel industries provide the major employment for the area.
The National Bank of Alamance, established in 1899
as a State bank, presently operates three offices. Its
primary competition derives from the six other com67

mercial banks operating 19 offices throughout Alamance County. These include the Wachovia Bank and
Trust Company, the North Carolina National Bank,
and the Northwestern Bank. In addition, the banks receive competition for the savings and real estate dollar
from thefivesavings and loan associations in Alamance
County.
No competition will be eliminated by consummation
of this proposed merger. With their closest offices some
21 miles apart, the convenience factor precludes them
from competing for retail deposits. First Union National Bank has not yet entered the Graham-Burlington
market.
The effect of this merger on potential competition
is more illusory than real. Since the State statutes permit statewide de novo branching, it would appear that
First Union National Bank could reasonably be expected to enter the Graham-Burlington market via
that route. The facts, however, contradict this. When,
in 1965, another bank sought to establish a de novo
branch in Graham, an injunction was sought and obtained in the United States District Court for the
Middle District of North Carolina. Judge Stanley,
after conducting a trial on the issues, found, inter
alia:
The record further establishes that the Graham-Burlington service area is already considerably over-banked.
and
Finally, the evidence fails to establish that it would be
economically feasible to establish an additional bank in
Graham at this time. The slow population growth of Graham,
coupled with the large number of Graham citizens working
and trading in Burlington, and the deposit trends of the
National Bank of Alamance during the past thirteen years,
tend to show it would not be in the public interest to establish
another bank in Graham.

In the light of this clear adjudication, it is manifest
that the opportunities for potential competition
through de novo branching into the Graham-Burlington market are presently nonexistent.

Applying the statutory criteria, it is found that this
proposal will not substantially lessen competition, but
will promote the public interest. The merger is, therefore, approved.
APRIL 1,

1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

First Union National Bank, the third largest in
North Carolina, operates 101 banking offices throughout the State. Since 1958, it has acquired 15 other
banks which, when acquired, had aggregate deposits
of $202 million and 58 banking offices. As of October 31, 1967, First Union National Bank had total
assets of $760 million, total deposits of $669 million,
and net loans and discounts of $424 million.
The National Bank of Alamance operates three offices in Alamance County: two in Graham (population 7,723) and one in Mebane (population 2,364),
9 miles from Graham. As of October 31, 1967, it had
total assets of $14 million, total deposits of $13 million, and net loans and discounts of $6.4 million.
Graham adjoins Burlington (population 33,199),
and the two cities constitute a single trading area.
Four of the State's eight largest banks (including the
two largest) have branches in Burlington, and the
largest has a branch in Graham.
The head offices of the merging banks are 117 miles
apart, and the nearest First Union office to Graham
is 21 miles distant. At present, there appears to be
little, if any, direct competition between the merging
banks. The proposed merger would, however, eliminate potential competition; First Union, having already established over 40 de novo branches, would
appear to be a likely entrant through de novo branching into the Graham-Burlington area. However, this
potentiality is somewhat diminished by the present
competitive structure of this market and the slow
growth of the area.

CENTRAL NATIONAL BANK OF JACKSONVILLE, JACKSONVILLE, FLA., AND MARINE NATIONAL BANK OF JACKSONVILLE, JACKSONVILLE,
FLA.
Banking offices
Name of bank and type of transaction

Total assets
In operation

Central National Bank of Jacksonville, Jacksonville, Fla. (14744), with
was purchased May 27, 1968, by Marine National Bank of Jacksonville, Jacksonville, Fla. (15653), which had
After the purchase was effected, the receiving bank had

68




$12,864,175
1, 500, 000
13,609,761

To be operated

1
1
1

COMPTROLLER'S DECISION

Marine National Bank of Jacksonville, a newly
organized bank, has applied for permission to purchase the assets and assume the liabilities of Central
National Bank of Jacksonville, Jacksonville, Fla.
In order to facilitate this transaction, the Federal
Deposit Insurance Corporation has agreed to make a
loan to Central National Bank of Jacksonville to be
secured by certain assets of Central which are not
acceptable to Marine.

In view of the fact that Central National Bank of
Jacksonville has suffered losses in an amount which
exceeds its capital, we find that the proposed purchase
and sale will be in the public interest and it is hereby
approved effective on or after May 25, 1968. Since the
transaction will prevent the probable failure of Central
National Bank of Jacksonville, advisory reports on the
competitive factor have not been requested.
MAY 23,1968.

SOUTHERN CALIFORNIA FIRST NATIONAL BANK, SAN DIEGO, CALIF., AND BELLFLOWER NATIONAL BANK, BELLFLOWER, CALIF.
Banking offices
Total assets

Name of bank and type of transaction

In operation To be operated

Bellflower National Bank, Bellflower, Calif. (15484), with
and Southern California First National Bank, San Diego, Calif. (3050), which had..
merged June 6, 1968, under charter and title of the latter bank (3050). The
resulting bank at date of merger had

COMPTROLLER S DECISION

On December 4, 1967, Southern California First
National Bank, San Diego, Calif., with IPC deposits
of $370 million, and Bellflower National Bank, Bellflower, Calif., with IPC deposits of $7 million, applied
to the Office of the Comptroller of the Currency for
permission to merge under the charter and with the
title of the former.
San Diego, California's third largest city, is a Pacific
port city with a population of about 683,000. It is the
seat and the financial and commercial center of San
Diego County, which is the second most populous
county in California. The economy of the San Diego
area is highly diversified in agriculture, manufacturing,
foreign and domestic finance, and service industries. In
the years between 1940 and 1960, the area experienced
a rate of growth faster than that of California as a
whole. Projections for future growth are good.
The Southern California First National Bank, organized in 1883, presently operates 31 branch offices in
San Diego County, which constitutes its primary service area. Through recent efforts to extend its service
area in Southern California, it has acquired four banking offices in Orange County and three in Los Angeles
County. It has no offices closer to the Bellflower National Bank than its branch in Huntington Beach,
Orange County, which is about 22 miles to the southeast. Intense banking competition prevails in the serv-




$10, 231, 228
534, 007, 753
544, 238, 981

2
39
41

ice areas of the charter bank in Southern California
provided by the many commercial banks and the various other financial institutions operating therein. The
principal competitors are six of the eight largest commercial banks in the State. The proposed merger will
not change the position of the bank in respect to these
large competitors in either the San Diego or the Los
Angeles area.
Bellflower, which is the home of the merging bank,
is situated approximately 20 miles to the southeast of
downtown Los Angeles. Bellflower, with a population
of about 56,000, and the adjacent communities of
Lakewood and Norwalk, are primarily residential with
service and commercial facilities. Their basic economic
support is derived from industries located in other communities within the Los Angeles metropolitan area.
The merging Bellflower National Bank, organized
in 1965, presently operates one branch office in Lakewood and has received approval to establish another
branch in Norwalk. There are presently 57 offices of
15 banks competing in the Bellflower-Lakewood-Norwalk area, including offices of the Bank of America
National Trust and Savings Association, with 43 percent of total commercial bank deposits in the area,
Security First National Bank, with 24 percent of total
area deposits, and First Western Bank and Trust Company, with 7 percent of total area deposits. The resulting bank will have about 2 percent of the total deposits
in this area.
69

Because of the distance separating the participating
banks and the difference in their size, there is no competition between them to be affected by this merger.
The addition of $7 million of IPC deposits to the
charter bank will have little effect on competition in
the areas served by this bank.
Consummation of this merger will have publicly
beneficial effects in the Bellflower-Lakewood-Norwalk
area; it will introduce another aggressive bank with
greater resources better able to compete with the large
banks now operating there. The resulting bank will
provide the residents of this area with a new alternative
source for broader services.
Considered in the light of the statutory criteria, this
merger is judged to be in the public interest, and is,
therefore, approved.
MARCH 25,

1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

Prior to 1967, all of Southern California Bank's
offices were located in San Diego County, some 109
miles from Bellflower, Calif. However, through its three
1967 acquisitions, Southern California Bank acquired
three offices in Los Angeles County and four offices in
Orange County.

Bellflower National's offices are located about midway between the offices of Southern California Bank
in West Los Angeles (about 28.5 miles northwest of
Bellflower) and those in Orange County (about 22
miles southeast of Bellflower). The closest offices of
the merging banks are 22 miles apart. The distances
between the banks involved in the proposed merger are
substantial, and there are numerous offices of other and
larger California banks in the extensively developed
intervening area. Thus, the amount of direct competition between Southern California Bank and Bellflower
National would seem to be very limited.
The proposed merger, like Southern California
Bank's 1967 acquisitions, may result in some loss of
potential competition. Southern California Bank's interest in expanding northward from San Diego County
is apparent from its very recent acquisition of two
independent banks in Orange and Los Angeles Counties. It seems a possible potential entrant particularly
into the fast growing Bellflower residential area of Los
Angeles, which is located almost midway between
Southern California's offices in West Los Angeles,
about 28% miles to the northwest and Southern California's offices in Orange County, 22 miles southeast.
Thus, the proposed merger may involve some lessening
of potential competition.

BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, SAN FRANCISCO, CALIF., AND THE NEW ST. CRODC SAVINGS BANK,
CHRISTIANSTED, ST. CROIX, U.S. VIRGIN ISLANDS
Banking offices
Name of bank and type of transaction

Total assets
In operation

The New St. Croix Savings Bank, Christiansted, St. Croix, U.S. Virgin Islands,
with
$2, 135, 676
was purchased June 17, 1968, by Bank of America National Trust and Savings
Association, San Francisco, Calif. (13044), which had
18, 096, 082, 367
After the purchase was effected, the receiving bank had
18, 098, 218, 043

COMPTROLLER S DECISION

On March 14, 1968, the Bank of America National
Trust and Savings Association, San Francisco, Calif.,
with IPC deposits of $13 billion, applied to the Comptroller of the Currency for permission to purchase the
assets and assume the deposit liabilities of The New
St. Croix Savings Bank, Christiansted, St. Croix, U.S.
Virgin Islands.
The purchasing bank is headquartered in San Francisco, Calif., and operates an extensive domestic
branching system in the State of California. Although
70




To be operated

2

2

it operates some 63 foreign branches, including 13 in
Europe, 16 in the Far East, 10 in Southeast Asia, three
in the Middle East and Africa, and 21 in Latin America, at present it has no branches in the Virgin Islands.
The New St. Croix Savings Bank, with deposits of
$1.9 million, maintains its head office in Christiansted and operates one branch in Frederiksted, 15 miles
from the main office. Although this bank is authorized
to engage in a general commercial banking business,
it has, by its articles, limited its functions to those of
a mutual savings institution. It serves a community

whose economy rests almost entirely upon tourism,
agriculture, and cattle raising. Of late, some industry
has moved into its service area.
Banking competition in the Virgin Islands is keen;
there are offices of five other banks in addition to
The New St. Croix Savings Bank, which is the smallest and only locally chartered bank. These are the
Virgin Islands National Bank, a wholly owned affiliate of the First Pennsylvania Banking and Trust
Company, Philadelphia, Pa.; The Chase Manhattan
Bank, N.A., New York City; the First National City
Bank, New York City; The Bank of Nova Scotia, Halifax, Nova Scotia, Canada; and Barclays Bank, D.C.O.,
London, England. The substitution of a branch of the
Bank of America for The New St. Croix Savings Bank
will not change the number of banking alternatives.1
Clearly this proposal will neither eliminate any existing competition nor can it be said to affect potential
competition, in view of the well-banked condition of
the Virgin Islands.
*By letter dated May 2, 1968, the Federal Reserve Board
indicated to the Comptroller of the Currency that it was
prepared to approve the operation of the offices of the selling
bank as branches of the buying bank.

The proposal will, therefore, increase banking competition, and will have the salutary effect of resolving
the internal problems that have vexed the management of The New St. Croix Savings Bank.
This proposal, which clearly serves the public interest without adversely affecting banking competition,
is, therefore, approved.
MAY 7, 1968.
SUMMARY OF REPORT BY ATTORNEY GENERAL

Bank of America, the Nation's largest bank in terms
of assets, had a net operating income of $202 million
in 1967. St. Croix Savings has operated at a loss in
recent years and its capital account is virtually exhausted. The Federal Deposit Insurance Corporation
has recommended that appropriate remedial action be
instituted.
Bank of America has no office of any type in the
Virgin Islands, and St. Croix Savings apparently has
no office or representative in any city in the United
States.
We believe that the proposed merger is unlikely to
have any significant adverse effect on banking competition.

COUNTY NATIONAL BANK, MIDDLETOWN, N.Y., AND THE FIRST NATIONAL BANK OF WOODRIDGE, WOODRIDGE, N.Y.
Banking offices
Name of bank and type of transaction

Total assets
In operation

The First National Bank of Woodridge, Woodridge, N.Y. (11059), with
and County National Bank, Middletown, N.Y. (13956), which had
merged June 28, 1968, under charter and title of the latter bank (13956). The
resulting bank at date of merger had

COMPTROLLER S DECISION

On March 25, 1968, The First National Bank of
Woodridge, Woodridge, N.Y., with IPC deposits of
$6 million, and the County National Bank, Middletown, N.Y., with IPC deposits of $101 million, applied
to the Comptroller of the Currency for permission to
merge under the charter and with the title of the
latter.
The two offices of the merging banks are located in
Sullivan County, which lies in the Catskill Mountains
in southeastern New York State on the border with
Pennsylvania. The county has a population estimated
at 45,000, and an economy chiefly supported by tour-




$7, 189, 025
140, 779, 142
147, 968, 167

To be operated

2
24

26

ism and the poultry industry. Both of these industries
are undertaking a much needed modernization and
expansion of their physical facilities.
The First National Bank of Woodridge was organized in 1917 and now operates a branch office at Rock
Hill, a small town lying about 6 miles southwest of
Woodridge. Woodridge, in which the main office of
the merging bank is located, has a permanent population estimated at 1,100, which increases greatly during the summer months. The merging bank, under
conservative management, has not been responsive to
the banking needs of its community and has developed
an unfavorable trend in earnings.
71

The County National Bank was organized in 1934
and now operates 23 offices, one of which is located
in Sullivan County, with the remainder in adjoining
Orange and Dutchess Counties. The bank also has six
approved but as yet unopened branches. The main
office of the charter bank is located in the city of
Middletown, which, with a population estimated at
25,000, lies in Orange County on New York State's
southern border with New Jersey.
While banking competition in Sullivan County is
keen, there is no significant competition between the
participating banks. Now doing business in the county
are the Marine Midland Bank of Southeastern New
York, Poughkeepsie, N.Y., with deposits of $127 million, which maintains branches in South Fallsburg and
Woodbourne, both of which are approximately 5 miles
from Woodridge; The County Trust Company, White
Plains, N.Y., with deposits of $804 million, which
maintains a branch in Monticello, about 12 miles
southwest of Woodridge; the Sullivan County National
Bank of Liberty, Liberty, N.Y., with deposits of $30
million and five offices in Sullivan County; and the
National Union Bank of Monticello, Monticello,
N.Y., with deposits of $16 million and two offices in Sullivan County. The nearest office of the
charter bank to the merging bank is the South Fallsburg branch of the County National Bank, 5 miles
west of Woodridge. Because of its size and unaggressive management, the merging bank has offered little
competition to the charter bank. Consummation of
this merger, instead of lessening competition in Sullivan County, will stimulate it.
This merger will benefit the residents of Sullivan
County by substituting for The First National Bank of
Woodridge a larger, more aggressive bank offering a
full range of banking services. The resulting bank will
be able to participate in the modernization and improvement of the county's economy to a greater degree, and more effectively, than can the merging bank.

By surrendering to the receiving bank, First National
will find a ready solution for the many problems that
have plagued it, without detriment to its customers'
interests.
Applying the statutory criteria, we find that this
merger is in the public interest. The application to
merge is, therefore, approved.
MAY 20, 1968.
SUMMARY OF REPORT BY ATTORNEY GENERAL

County National has its main office in Middletown,
Orange County, N.Y., 45 miles northwest of New York
City and operates its 23 banking offices in three contiguous counties (12 in Orange County; 10 in Dutchess
County; and 1 in Sullivan County). Since 1955,
County National has acquired eight other banks with
17 banking offices whose aggregate deposits at time of
acquisition totaled $60.5 million.
During the past 3 years First National has experienced a decline in deposits, loans, and net operating
income. First National has its home office and branch
office in Sullivan County, N.Y. With County National's
office in Sullivan County 4.7 miles from the home
office of First National, there would appear to be some
direct competition between the banks which will be
eliminated by the merger.
There are nine commercial banks with a total of 21
offices in Sullivan County, whose entire population was
under 50,000 in 1960. First National has 6 percent of
the county's total deposits and County National has
another 2 percent. Combined, the merged bank would
possess only about 8 percent of Sullivan County deposits, and three of its 21 banking offices.
We do not consider that this particular merger—
which seeks to join a relatively small and not recently
successful bank with a large bank doing business primarily in adjacent counties—presents any serious
competitive problems.

THE HOWARD NATIONAL BANK AND TRUST COMPANY, BURLINGTON, VT., AND MONTPELIER SAVINGS BANK AND TRUST COMPANY,
MONTPELIER, V T .

Name of bank and type of transaction

Total assets
In operation

Montpelier Savings Bank and Trust Company, Montpelier, Vt., with
and The Howard National Bank and Trust Company, Burlington, Vt. (1698),
which had
merged June 28, 1968, under charter and title of the latter bank (1698). The
resulting bank at date of merger had

72




To be operated

$13, 222, 077
96,050,667
109, 272, 744

14

COMPTROLLER'S DECISION

On August 4,1967, The Howard National Bank and
Trust Company, Burlington, Vt., and the Montpelier
Savings Bank and Trust Company, Montpelier, Vt.,
filed an application with the Comptroller of the Currency for permission to merge under the charter and
with the title of the former.
The Howard National Bank and Trust Company
was chartered in 1870. It now holds IPC deposits of
$66.5 million in its main office and 10 branches located
in the northern and west-central parts of the State.
The main office is in Burlington, on the eastern shore
of Lake Champlain, which, with a population of
41,000, is Vermont's largest city. The economy of this
area is well diversified as it draws support from agricultural and industrial activity. Some major plants of
nationally known companies are located in Burlington. Tourism and educational institutions provide
additional sources of employment.
The Montpelier Savings Bank and Trust Company
was chartered in 1870 and presently holds IPC deposits of about $8.8 million. Its main office is located
in Montpelier, the State capital, which, with a population of 8,500, is near the center of the State. The
merging bank's only branch is in Waitsfield, with a
population of 700, which lies about 19 miles southwest
of Montpelier. There is little industry in Montpelier.
The economy is supported largely by the offices of the
State Government, although additional numbers of the
city's residents are employed in the offices of several
insurance companies. The development of ski resorts
in the Montpelier area has provided additional employment, and the town of Barre, located 7 miles to
the southeast of Montpelier, is the center of Vermont's
granite industry.
There is no competition between the merging banks.
The closest offices of the two banks are 24 miles apart.
Consummation of the merger will not alter significantly
the competitive relationship of the banks in the service area of the charter bank. The resulting bank will
continue to face intense competition from the largest
commercial bank in Vermont, the Chittenden Trust
Company, with assets of $87 million, and the Burlington Savings Bank, with assets of $129 million, and
many other commercial banks, savings institutions, and
credit unions. Additional competition is felt from sev-




eral large metropolitan banks located outside the State.
In Montpelier, the resulting bank will compete more
effectively with the Montpelier branch of the Chittenden Trust Company, and with The Montpelier
National Bank, which has assets of $16 million.
On consummation of this merger, the public in the
Montpelier area will benefit from the availability of a
larger lending limit and a wider range of banking
services, including full trust services, consumer and
dealer financing, data processing facilities, and management continuity.
Applying the statutory criteria to the proposed
merger, we find that it is in the public interest, and
the application is, therefore, approved.
APRIL 29,

1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

The Howard National Bank and Trust Company
("Howard National"), the second largest of 46 banks
in Vermont, proposed to acquire the Montpelier Savings Bank and Trust Company ("Montpelier Savings"), the State's 14th largest bank.
Howard National, which is headquartered in Burlington (Chittenden County), operates 11 offices in
five counties in northern and central Vermont. Montpelier Savings has two offices—19 miles apart—in
Washington County in north-central Vermont. Montpelier Savings is the fifth largest of nine banks in
Washington County and holds about 11 percent of
total deposits in the county. Howard National has no
offices in Washington County and its closest office to
either of Montpelier Savings offices is 24 and 43 miles
distant from them, respectively. The head offices of
the merging banks are 37 miles apart.
There is one bank in the area between the merging
banks' closest offices. In the circumstances, there would
appear to be relatively little direct competition between the merging banks.
Since unrestricted branching is permitted throughout Vermont, Howard National could enter the
Montpelier area by de novo branching, or Montpelier
Savings could enter Chittenden, Orleans, Caledonia,
Rutland, or Franklin Counties. Thus, the proposed
merger would foreclose each bank as a source of
potential competition in the area presently served by
the other.

73

THE MIDLAND NATIONAL BANK, MIDLAND, TEX., AND BANK OF THE SOUTHWEST, MIDLAND, TEX.
Banking offices
Name of bank and type of transaction

Total assets
In operation

Bank of the Southwest, Midland, Tex., with
and The Midland National Bank, Midland, Tex. (6410), which had
merged June 28, 1968, under charter of the latter bank (6410) and title "The
Midland National Bank, Midland, Texas." The resulting bank at date of merger
had

COMPTROLLER'S DECISION

On April 17, 1968, The Midland National Bank,
Midland, Tex., with IPC deposits of $49 million, and
the Bank of the Southwest, Midland, Tex., with IPG
deposits of $3.6 million, applied to the Comptroller
of the Currency for permission to merge under the
charter of the former and with the title "The Midland
National Bank, Midland, Texas."
Midland, the county seat and only city in Midland
County, has a population of approximately 67,000
people. The city, located in the west-central portion
of the State, is situated in the heart of an important oil
field known as the Permian Basin. It is also the headquarters for a large ranching and farming area. Prior
to the time oil was discovered in this area, Midland
was a small town principally supported by the cattle
industry. Following World War II, however, oil and
gas production became the largest industry in the
area, having reached a sales peak of $65 million in
1962. It now accounts for approximately $50 million
of sales annually. Light manufacturing and related oil
field service companies account for approximately 30
percent of the gross annual sales in the city. In contrast
to the booming period in Midland following the discovery and development of petroleum, the oil business
in the Permian Basin today has become one of static
production, maintenance, and administration, because
of the rise in oil imports and the lack of attractive oil
and gas development areas. The city of Midland experienced a sharp population growth from 21,700 in
1950 to 62,600 in 1960. Its population growth rate
has, however, subsequently slowed to where the 1967
population is estimated at 67,000.
The Bank of the Southwest, the merging bank, was
organized in 1964 as the First State Bank and, subsequently, changed its name to its present title in 1967.
Its organization was the subject of a dispute by numerous local citizens, because of a contest between two
separate groups in seeking a charter. The charter was
finally granted to outside interests and, as a result, full
74




$5, 221, 294
64, 406, 993
69, 628, 288

To be operated

\
1

acceptance of the bank by the community failed to
materialize, thereby blighting the bank's struggle for
existence from the beginning.
The local controversy over its chartering has resulted
in slow deposit growth and weak earnings for the
Bank of the Southwest. In 1967, its net operating income was $26,900, following an earnings loss in 1966
of $29,800. During the organization of the bank it
was projected that it would have $10 million in deposits after 3 years of operation; it has been able to
develop only $4.2 million in deposits in 4 years and
presently suffers from a substantial operating deficit.
In 1968, the bank acquired total ownership of the
building in which it maintains offices in an effort to
establish a local image and to attempt to increase bank
earnings from building income. Although this has
permitted the bank to operate with a small- income,
the investment of a large part of its capital in building
equity to accomplish its purpose was an unusual
maneuver and represents a rather unique undertaking
based upon the size of the bank.
Ownership of the modern nine-story office building
originated as a joint adventure between an investor and
an affiliate of the merging bank. The affiliate subsequently became sole owner of the building, subject to
a mortgage of $1,650,000, and transferred its interest
in the building and rental leases to the merging bank
without its having assumed the mortgage indebtedness.
The Bank of the Southwest is, however, committed to
a 30-year lease rental contract for office space in the
building at $25,000 annually. As a consequence, the
Bank of the Southwest is a corporation more deeply
engaged in real estate operations than in commercial
banking.
It is noted that, although the acquisition of the
building and the attendant rental income therefrom
has contributed to the bank's operating income figure,
it is surprising to realize that the bank is currently
earning substantially all of its profit from the operation of a nonbanking service. Because the bank is

presently on a mixed cash and accrual accounting basis,
this alleged profit would disappear if a straight accrual
method were followed.
The charter bank, The Midland National Bank, was
chartered in 1902 as the Odessa National Bank, Odessa,
Tex., and in 1903 was relocated to Midland and acquired its present title. During the oil and gas boom
immediately following World War II, the bank enjoyed excellent deposit growth. The rate of growth,
however, has tapered off in recent years as evidenced
by the fact that the bank has only experienced a $5
million increase in deposits in the last 5 years. This rate
of growth is not encouraging when it is understood that
total bank deposits in Midland have increased by $110
million in the last 10 years.
The banking needs of the local economy are presently served by the subject banks and two other local
banks: the $140 million First National Bank and the
$24 million Commercial Bank and Trust Company.
Three savings and loan associations also located in the
city have combined resources of $70 million.
Approval of this application will not change the relative positions of the local banks, except that the merging bank, in last place, will disappear. The resulting
bank will be a $53 million institution and will control
31 percent of the loans, down from a high of 34 percent
in 1962, and 29.6 percent of the deposits in the area, an
increase of 2.2 percent and 1.9 percent in the respective
categories. It will thus remain substantially behind the
First National Bank, which controls 59.3 percent of
the loans and 61.1 percent of the IPC deposits in the
area.
The history of the Bank of the Southwest, since its
organization, clearly demonstrates that it is not a
significant competitive force in the local banking structure. Despite its desire to compete for loans and deposits, it has not succeeded in 4 years. Thus, its disappearance from the local scene through this merger
cannot realistically be viewed as substantially lessening
banking competition.
The failure of the Bank of the Southwest to reach
its original projections for growth and its inability to
operate profitably after 4 years of operations raise the
question of whether there is a need for this bank in
the community. This bank is the only bank in Midland
without trust powers, which has prevented it from
tapping the apparent source of wealthy trust customers
in the area. The merger will not only provide trust
department services to customers of the merging bank,
but will also make available the charter bank's competent petroleum engineering staff. The merging
bank's inability to grow substantially and to generate




sufficient earnings has also prevented it from establishing a bank pension plan or other employee-type
benefit programs. The resulting bank, with an increased lending limit, could more effectively compete
for the larger oil and commercial loans in the area,
which is of particular importance when it is noted that
the charter bank currently has $8 million in loan
participations.
While consummation of this merger will not increase
the size of the acquiring bank significantly, it will enable it to offer somewhat more effective competition
to the larger First National Bank. It will further
strengthen the capital of the resulting bank and provide additional resources for growth and earnings, as
well as provide depth in sound management. Above
all, it will resolve the problems now facing the merging
bank and provide added protection to that segment
of the public that patronizes it.
Applying the statutory criteria to the proposed
merger, we conclude that it is in the public interest.
The application is, therefore, approved.
MAY 29,1968.
SUMMARY OF REPORT BY ATTORNEY GENERAL

The merging banks are in Midland (population,
67,000), located about 260 miles west of the Fort
Worth-Dallas area in the heart of the Permian Basin
oil field. The largest industry in the area is the production of oil and gas, accounting for about $50 million in annual sales.
The two merging banks are located within one or
two blocks of each other in downtown Midland. It
seems clear that they are in direct competition with
each other for most types of commercial banking business other than trust business, which Southwest Bank
does not offer. The proposed merger would eliminate
all existing competition between the participating
banks.
Midland County is served by four commercial banks,
all located in the city of Midland. As of December 31,
1967, the largest, the First National Bank of Midland
(total deposits, $132.8 million) had 59.9 percent of
total county deposits. The two merging banks had
28.4 percent and 2 percent respectively, while the
third largest bank, Commercial Bank and Trust Company (total deposits, $21.6 million) had 9.7 percent
of total county deposits.
Thus, this merger will increase the share of the
second largest bank to 30.4 percent and increase the
share of the two largest banks to over 90 percent of
total county deposits. Moreover, since Texas law for75

bids branch banking, the only means to decrease concentration in this market is by establishing a new bank
or internal expansion of the smaller existing banks.
The proposed merger would eliminate direct, existing competition between the merging banks, increase

concentration, and eliminate the most recent entrant
of only four banks serving a relatively large market
that has demonstrated strong growth in the past.
The competitive effects of this proposed merger
would be significantly adverse.

VIRGINIA NATIONAL BANK, NORFOLK, VA., AND FARMERS AND MERCHANTS BANK OF LAWRENCEVILLE, LAWRENCEVILLE, VA.
Banking offices
Name of bank and type of transaction

Total assets
In operation

Farmers and Merchants Bank of Lawrenceville, Lawrenceville, Va., with
and Virginia National Bank, Norfolk, Va. (9885), which had...merged June 28, 1968, under charter and title of the latter bank (9885). The
resulting bank at the date of merger had

$18, 912, 595
680,855,421

To be operated

4
73

*705,731,615

*78

•Includes the National Bank of Woodstock, Woodstock, Va.

COMPTROLLER'S DECISION

On April 5, 1968, the Virginia National Bank, Norfolk, Va., and the Farmers and Merchants Bank of
Lawrenceville, Lawrenceville, Va., applied to the
Comptroller of the Currency for prior permission to
merge under the charter and with the title of the
former.
The charter bank, Virginia National Bank, is located in Norfolk, but operates its 75 offices primarily
in 36 small towns dispersed throughout southern and
central Virginia. The bank, with IPC deposits of $495
million, has a long history of providing financial resources and diversified modern banking services to the
nonurban areas of Virginia.
The merging bank, the Farmers and Merchants
Bank of Lawrenceville, is the only bank chartered in
Brunswick County. This bank has IPC deposits of
$13.5 million and operates three branches in the
county.
As the closest branches of applicant banks are 33
miles apart, there appears to be little, if any, competition between them. Competition is provided to the
merging bank, however, from six banks or branches
thereof within a radius of 25 miles of Lawrenceville,
including branches of two large banks, The Fidelity
National Bank, Lynchburg, and the Bank of Virginia,
which is headquartered in Richmond.
Although the merging bank has historically been a
sound and profitable operation, the poor and static
condition of the county's economy and its dim prospects
for growth preclude efforts on the part of the merging
bank to increase its capital and to modernize its opera76




tions. The merger will provide needed resources and
services to the county without endangering competition. State law, which precludes the charter bank from
branching into Brunswick County, prevents potential
competition in the county, except by newly chartered
banks.
The proposal appears to be in the public interest and
without adverse competitive effects. This merger is,
therefore, approved.
MAY 29, 1968.
SUMMARY OF REPORT BY ATTORNEY GENERAL

Virginia National Bank, the second largest bank in
Virginia, has, since 1963, acquired 15 banks in various
parts of Virginia, and now operates offices in 37
communities.
Farmers and Merchants Bank is the only bank with
offices in Brunswick County. The head offices of the
merging banks are approximately 90 miles apart. The
office of VNB closest to Brunswick County is in Victoria, approximately 22 miles northwest of Fanners and
Merchants' branch in Alberta and about 26 miles
northwest of its head office in Lawrenceville. In view
of the distances involved, it would appear that there
is no significant direct competition currently existing
between the merging banks.
Under Virginia branch banking law neither VNB,
nor any other existing Virginia bank, can open a de
novo branch in Brunswick County. However, looking
at the situation more broadly, acquisition of an apparently prospering institution, with a monopoly
market position by the second largest bank in the

State, may tend to deter de novo entry of potential
competitors into Brunswick County and the development of a more competitive banking structure there.
Moreover, the acquisition would eliminate a banking

institution that might serve as a future source of increased competition for VNB in a State or regional
market, if not by internal growth, at least by affiliation with one or more smaller Virginia banks.

VIRGINIA NATIONAL BANK, NORFOLK, V A . , AND T H E NATIONAL BANK O F WOODSTOCK, WOODSTOCK, V A .

Banking offices
Name of bank and type of transaction

Total assets
In operation To be operated

The National Bank of Woodstock, Woodstock, Va. (11941), with
and Virginia National Bank, Norfolk, Va. (9885), which had
merged June 28, 1968, under charter and title of the latter bank (9885). The
resulting bank at the date of merger had

$6, 023, 401
680, 855, 421
*705, 731, 615

73
*78

•Includes Farmers and Merchants Bank of Lawrenceville, Lawrenceville, Va.
COMPTROLLER S DECISION

On April 15, 1968, The National Bank of Woodstock, Woodstock, Va., and the Virginia National Bank,
Norfolk, Va., applied to the Office of the Comptroller
of the Currency for permission to merge under the
charter and with the title of the latter.
The Virginia National Bank, Norfolk, Va., with
IPC deposits of $495.1 million, operates 75 offices
widely scattered in 37 different communities across
southern and central Virginia. Originally chartered as
a State bank in 1867, it converted to a National bank
in 1870. It opened numerous branches in Norfolk,
and, following amendment of the Virginia branching
statute in 1962 to permit statewide branching by
merger, it pursued a policy of aggressive expansion by
merger, which today ranks it as second largest bank
in the State, with over $665 million in total resources.
It is a full-service institution offering a wide variety
of banking services to its various classes of customers
in the widely scattered regions where it operates. Virginia National's management is experienced, well-regarded, and has good depth. Its capital position is
strong and its profits over the last several years have
been good.
Woodstock, Va., with a population of 2,400, is the
home of the merging National Bank of Woodstock and
the county seat of Shenandoah County. Shenandoah
County, located 70 miles due west of Washington,
D.C., is the trade area of the merging National Bank
of Woodstock. This county, which covers 507 square
miles and has a population of 23,000, borders on West
Virginia almost at the apex of the State. The county's
economy is predominantly agricultural, with poultry
farming, livestock, timber, and dairy products its chief




sources of income. Adjacent to the Shenandoah National Park, which encompasses a part of the million
acre George Washington National Forest and cut by
both forks of the Shenandoah River, the county also
has a partially realized capability as a mountain resort
area. The town of Woodstock is its principal retail area.
The National Bank of Woodstock, with IPC deposits
of $4.6 million, is a unit bank chartered in 1921. In
view of its upward trend in deposits and low earnings,
the bank's capital structure is considered to be inadequate. Its management is unaggressive. Because of
management's conservatism, the bank's future earnings
prospects are not considered favorable. The National
Bank of Woodstock competes in its trade area with
six banks having eight offices. In Woodstock it competes with a branch of the Massanutten Bank of
Shenandoah Valley, N.A., Strasburg, Va., a subsidiary of First Virginia Bankshares Corporation, one
of the largest banking institutions in the State. This
competitor holds 50 percent of all bank deposits in
the county; almost three times the amount held by the
merging bank. Other banks, with which it competes
in the county, include the Peoples Bank, Mount Jackson, also a subsidiary of First Virginia Bankshares, and
the much larger First National Bank of Strasburg. The
nearest branch of the Virginia National Bank is 40
miles away across the Shenandoah River, the Massanutten Mountains, and the George Washington National Forest, at Shenandoah in Page County.
The effect of the merger would be to make available
to the residents of Shenandoah County a larger,
stronger, more aggressive bank possessing a larger
lending limit, trust services, larger resources for local
installment and consumer-type credit, and other spe77

cialized services. It will also supply the merging bank,
which, following the merger, will be a branch of the
resulting bank, with management resources, as well as
other economies of scale, to enable it to operate generally more efficiently and effectively.
The merger will introduce a much stronger and
more effective competitive banking force into Woodstock and Shenandoah County. The resulting bank
should, for the first time, provide some effective competition for the Massanutten Bank of Shenandoah
Valley. The merger will have no competitive effect
in the other areas of the State in which Virginia
National Bank operates and will leave unchanged its
current position as second largest bank in Virginia.
Since the closest existing offices of the two banks are
40 miles apart, there is no present competition between the two banks to be eliminated by the merger.
Considered in the light of the statutory criteria,
this merger is judged to be in the public interest, and
is, therefore, approved.
MAY 29, 1968.
SUMMARY OF REPORT BY ATTORNEY GENERAL

Virginia National Bank ("VNB"), the second
largest commercial bank in the State of Virginia, has
since 1963 acquired 15 banks in various parts of Virginia and now operates in 37 communities. There is
also pending a proposal to merge the Farmers and

Merchants Bank of Lawrenceville, Lawrenceville, Va.
(total deposits, $14.8 million) into VNB.
Woodstock is located in the east-central part of
sparsely populated Shenandoah County. The entire
county is rural and fairly well-isolated by mountains
its growth has been relatively stagnant since 1940.
There is apparently little, if any, direct competition
between the merging banks. VNB maintains no offices
in Shenandoah County. Its branch closest to NBW's
office is located in Page County, Va., approximately 40
miles to the south, across the Massanutten Mountains
and over marginal roads.
There are six commercial banks with eight offices
located in Shenandoah County, scattered along a
major highway which runs the length of the county,
including two separate banks in Woodstock and one in
the small town of Edenburg, about 5 miles to the
southwest. The county thus has a high banking office to
population ratio. NBW's one relatively small office has
14 percent of Shenandoah County total deposits and
15 percent of the county's IPC demand deposits. Under
Virginia branch banking law, VNB is prohibited from
establishing a de novo branch in Shenandoah County.
The proposed merger would not, therefore, eliminate
potential competition between VNB and NBW, nor
would it result in VNB's assumption of a controlling
position in the county. Accordingly, we do not believe
that this particular merger presents any serious competitive problems.

SECURITY FIRST NATIONAL BANK, LOS ANGELES, CALIF., AND PACIFIC" NATIONAL BANK OF SAN FRANCISCO, SAN FRANCISCO, CALIF.
Banking offices
Name of bank and type of transaction

Total assets
In operation

Pacific National Bank of San Francisco, San Francisco, Calif. (12579), with
and Security First National Bank, Los Angeles, Calif. (2491), which had
merged July 1, 1968, under charter of the latter bank (2491) and title "Security
Pacific National Bank." The resulting bank at date of merger had

COMPTROLLER'S DECISION

On October 30, 1967, the Security First National
Bank, Los Angeles, Calif., and the Pacific National
Bank, San Francisco, Calif., applied to the Comptroller
of the Currency for permission to merge under the
charter of the former and with the title "Security Pacific National Bank."
Los Angeles, the home of the Security First National
Bank, is the focal point of southern California, a region
78




$253, 610,154
5,403, 516, 787
5, 654, 748, 905

To be operated

1
366
367

comprised of the State's 14 southernmost counties. This
region, which encompasses approximately 50 percent
of the State's geographical area, has a population of
12.5 million. Approximately 8.4 million of these people
live in the Los Angeles metropolitan area. It is anticipated that the population of southern California will
exceed 15 million by 1975.
The expanding population of southern California is
supported by an economy as diverse in scope as the area
is large in size. Fishing, oil-related industries, agri-

cultural production, electronics and defense manufacturing, research, transportation, and aerospace companies contribute significantly to the economic profile
of the area.
San Francisco, the site of the single-office Pacific
National Bank, is located 400 miles north of Los Angeles and is the financial and commercial center of the
44 northern counties in the State. This city, which has
played a significant role in the history of our Nation
and was so important to the development of the western States, owes much of its greatness to its location and
the surrounding geography. It is located on a hilly
peninsula, which separates the Pacific Ocean to the
west from San Francisco Bay to the east. These bodies
of water are connected* at the north end of the peninsula by a break in a low-peaked coastal range—a
harrow navigable strait, known as the Golden Gate.
San Francisco Bay, including San Pablo Bay, has
been and continues to be the most significant influence
in the development of the San Francisco area. This Bay,
comprised of some 530 square miles of water, extends
56.5 miles on a north-south axis and varies from 5 to
15 miles in width. The shoreline of these combined
bays extends 276 miles. This large, navigable, and virtually land-locked body of water is one of the finest
natural harbors in the world.
The significance of San Francisco Bay to this merger
proposal stems from the fact that it lies in the middle
of a very large metropolitan complex, which has developed until it now surrounds it. This metropolitan
complex, referred to as the San Francisco-Oakland
Standard Metropolitan Statistical Area, which in 1960
included 2,648,762 persons, is comprised of five counties that abut the shores of San Francisco Bay, viz.,
San Francisco, San Mateo, Alameda, Contra Costa,
and Marin Counties. Also abutting the Bay, although
not included in the San Francisco-Oakland Standard
Metropolitan Statistical Area, is Santa Clara County
on the south and Solano, Napa, and Sonoma Counties
on the north.
The city and county of San Francisco are coextensive. This area, the focal point of the entire Bay complex, had a 1960 population of 740,316. In 1950, its
population was 775,357. Although this decline was
only 4.73 percent, the percentage of population in the
city and county in relation to the population of the balance of the metropolitan statistical area declined from
36 percent in 1950 to 24 percent in 1960. These population figures clearly reveal that, although San Francisco remains relatively static, the rest of the area is
dynamic.
An enumeration of the counties and their cities,




which comprise the balance of the San FranciscoOakland metropolitan area outside of San Francisco,
demonstrates the vastness of the metropolitan area.
South of San Francisco lies San Mateo County, the
population of which was recorded as 444,387 in 1960.
Within this county are the cities of South San Francisco, Daly City, San Bruno, Burlingame, San Mateo,
Belmont, San Carlos, Redwood City, and Menlo Park.
Directly across the Bay from San Mateo County is
Alameda County, which contains 908,209 residents distributed among such cities as Berkeley, Oakland,
Alameda, San Leandro, Castro Valley, Hayward, San
Lorenzo, and Fremont. Lying between San Mateo and
Alameda Counties at the southern tip of the Bay is
Santa Clara County, which comprises the San Jose
Standard Metropolitan Statistical Area, the 1960 population of which was reported to be 642,315. Although
Santa Clara County and its five constituent cities, viz.,
Mountain View, Palo Alto, San Jose, Santa Clara, and
Sunnyvale, are not officially part of the San FranciscoOakland Standard Metropolitan Statistical Area, they
must, by reason of their location, be considered within
the ambit of the San Francisco market and its influence.
Continuing counterclockwise around the Bay, Contra
Costa County lies just north of Alameda County on the
north end of the Bay. This county of 409,030 persons
has four cities, viz., Concord, Richmond, El Cerrito,
and San Pablo. Across the Bay to the west is Marin
County, which had a population in 1960 of 146,820.
The principal cities of this county are Sausalito,
Tiburon, Mill Valley, San Rafael, Novato, San
Anselmo, and Terra Linda.
It is clear that, although San Francisco remains the
nerve center and focal point of the metropolitan area,
recent population growth has occurred, and future
growth will continue to occur, almost entirely outside
the city itself. With the population shifts that have
come to the Bay area in recent years have come similar
changes in the concentration of commercial and industrial establishments. Although San Francisco houses
the administrative offices of many large national and
regionalfirms,it has declined in relation to the balance
of the Bay area in the number of business units it contains. Between the years 1960 and 1966, the total number of industries located in San Francisco declined by
3.6 percent, from 21,468 to 20,697, while the number
in the other Bay area counties increased by 12.5 percent, from 31,544 to 35,481. A breakdown of the total
industries by types is revealing. San Francisco declined
10.3 percent in manufacturing units between 1960 and
1966, losing some 180 plants; the balance of the metropolitan area in this period gained 9.5 percent, or 231
79

manufacturing units. In the wholesale business, the
shift is most marked—San Francisco dropped 285 units,
or 10.3 percent, and the balance of the area gained
584 units or 30.3 percent. The same trend prevailed in
motor freight transportation and warehousing establishments, in retail outlets, in insurance offices, and
with hotels and motels.
Although San Francisco did gain some commercial
units in certain lines between 1960 and 1966, its gain
was not as pronounced as in the other metropolitan
area counties. In the field of transportation, San
Francisco gained 13 units for a 2.1-percent increase;
the other counties gained 167 units for a 20.2-percent
increase. The same trend was noted in the fields of real
estate offices, service establishments, business service
companies, and medical and health services. In only
one industry did San Francisco grow in number of units
more rapidly than the remainder of the Bay complex—in the field of banking. San Francisco acquired
11 new banks for a 57.9-percent increase; the other
counties gained 16 for a 50-percent increase.
The intensive economic and residential growth centering in and around San Francisco and Los Angeles
in recent years has been paralleled by the pattern of
development of the banking industry in California. In
1960 there were 122 banks in the State, operating
1,750 branch offices. As of June 30, 1967, there were
2,796 banking offices in the State. Of these offices,
1,607 were dispersed throughout southern California
and 1,189 throughout northern California. Over half,
or 829, of the southern California offices were concentrated in Los Angeles County. The San FranciscoOakland area accounted for 496 of the northern California offices. Despite the large number of banking
offices operated by a relatively few banks, only five
banks could validly claim to be statewide systems, viz.,
Bank of America with 962 offices, Crocker-Citizens
National Bank with 268 offices, United California
Bank with 204, Bank of California with 57, and First
Western Bank and Trust with 82.
California has two other large branch banking systems with resources in excess of $1 billion that are not
statewide in reach. Security First, the receiving bank,
operates all its 351 offices in southern California. Wells
Fargo Bank, as of June 30, 1967, operated all its 230
branches in the 44 northern California counties. Both
these banks sought to offset the competitive handicaps
they encountered by reason of their regional branch
concentrations by maintaining a close correspondent
relationship with each other. When Wells Fargo Bank
recently entered the southern California market by
opening a de novo branch in Pasadena and acquiring
80




two more branches through a merger with the Bank
of Pasadena, Wells Fargo became a statewide system
and thereby terminated its correspondent relationship
with Security First National Bank.
Inasmuch as the principal impact of this proposal
will be in the San Francisco-Oakland metropolitan
area, a closer analysis of the banking structure of that
area is warranted. Of the 1,189 banking offices in
northern California, there are 496 in the San FranciscoOakland area: 164 in San Francisco and 332 in the
other four Bay counties. The distribution of these
branches among the six large statewide systems is as
follows:
San Francisco

Bank of America
Wells Fargo
Crocker-Citizens
United California
Bank of California
First Western

._.

Other 4 counties

64
29
17
9
9
5

107
72
40
17
13
13

Pacific National Bank, with its single office at 333
Montgomery Street in the financial district of San
Francisco, is a wholesale bank catering to mediumand large-size customers whose credit requirements are
$1.5 million or less. It had, at the beginning of 1967,
total resources of $246 million, total deposits of $219
million, and total loans of $134 million. That it is a
wholesale bank, as opposed to a retail bank, is demonstrated by an analysis of both its deposits and its loans.
Of Pacific National's total deposits, 78 percent are IPC
deposits and 40.7 percent are in acounts with balances
in excess of $25,000. Of its total loans, 44 percent are
commercial and industrial and 28.6 percent are for
amounts in excess of $100,000. That it is not a retail
bank is evident from the fact that of its total loan
portfolio, automobile loans comprise only 0.19 percent,
consumer installment loans 0.001 percent, loans to repair and modernize 0.002 percent, and residential real
estate loans 6.45 percent.
Pacific National Bank, without branches, has never
sought the retail trade. It has not followed population shifts to the burgeoning suburbs to vie for the
small deposit and loan accounts of housewives, homeowners, and individual proprietors who, because of
distance, poor transportation around or across the Bay,
traffic congestion, and inadequate parking facilities in
San Francisco, will not come to the hub, but will bank
at an office convenient to their homes. To become a
retail bank, Pacific National must follow these people
to suburbia. It has confined its operations to the city
and county of San Francisco, a decision that now casts
a shadow over its future as it recognizes that larger.

aggressive, and growing institutions can no longer
afford to concentrate on wholesale banking activities
alone.
The prestige of Pacific National Bank as a wholesale institution is losing its sheen. As long as it was able
to serve conveniently the large- and medium-size customers, who had offices in the hub of the city and who
needed less than $1.5 million in credit, it flourished.
As its customers prospered, many outgrew the capability of Pacific National to serve their credit needs and
so were lost to it. New industrial and commercial units
entering the Bay area have, after analyzing the economic aspects, elected to locate in one of the counties
other than San Francisco. These new entrants have
patronized large banks having convenient branches
near their site rather than Pacific National Bank.
The consequences of the failure of Pacific National
to follow the post World War II population movement to the suburban counties with de novo branches
began to be manifest in 1963. Its published call reports
reveal that prior to 1963 it had kept abreast of all its
competitors. Commencing in 1963, its share of the
market declined significantly. In San Francisco alone,
from which it derived the bulk of its business, its share
of IPG deposits declined 20.6 percent between 1963
and 1967. During the same period its share of the loans
in the same market declined 24.3 percent. It was inevitable that its earnings also declined. Pacific National
cannot tolerate this downward spiral.
Pacific National Bank has other problems in addition to its declining market share. It is now housed in
leased quarters situated on a city block which, except
for one small parcel, is entirely owned by the Bank of
America. Although the lease of Pacific National will
not expire until 1975, the Bank of America has already
commenced construction of a new 50-story main office
complex on this city block. The Bank of America, in
order to complete this construction at the earliest possible date, is urging Pacific National to relocate in new
quarters. The failure of Pacific National to yield to
these urgings will not only effectively delay the completion of a handsome new building in downtown San
Francisco, but also will obviously place Pacific National, as the cause of the delay, in a position open to
public derision. To relocate, however, will double Pacific National's occupancy cost at the expense of its
already declining earnings. Additionally, it must, if it
is to continue to serve effectively as a wholesale bank,
obtain a third generation computer, thereby increasing
expenses by another quarter of a million dollars.
Pacific National Bank, if it is to arrest the decline
in its share of the market and its earnings, must sig-




nificantly broaden its earning base by a marked increase in deposits and profitable loans. To achieve this
goal as an independent banking unit, it must create
and maintain an effective and highly competitive
branch system strategically placed throughout the entire San Francisco metropolitan area. This, however,
is an undertaking that appears to be beyond the competence of Pacific National Bank, in view of the present banking structure of the Bay area. A successful
branch must be well-located; it is highly improbable
that a sufficient number of choice branch sites in this
area remain unclaimed by the competing banks to
enable Pacific National to acquire adequate outlets
to become an effective competitor. Assuming the availability of enough desirable sites, the second question is
whether Pacific National, with rising main office costs,
could prudently afford to assume the large expense
involved in opening a meaningful number of offices to
give it the requisite coverage in the next 10 to 15 years.
In the light of its history as a wholesale bank, Pacific
National does not appear to have the expertise and
depth of management required to supervise and operate such branches successfully. As a matter of prudent
banking judgment, Pacific National views this merger
proposal as the only reasonable means of forestalling
future problems and of satisfying the public interest.
Security First National Bank of Los Angeles, as the
second largest bank in the State, has adequate resources, both financial and managerial, and sufficient
experience in branching to counter the weaknesses of
Pacific National Bank. As of September 1967, Security
First National had total resources of $5.3 billion, total
deposits of $4.8 billion, and total loans of $2.7 billion.
This bank, which operates 351 branch offices in southern California, offers a complete range of banking
services on both the wholesale and retail levels. Although it is an aggressive bank, always striving to retain and increase its share of the market through its
excellent system of branches, it has not had, because
of its confinement to the southern counties, the competitive impact on the State's banking structure its size
would indicate, nor has it been able to retard the
growth of the ever-widening competitive gap it faces
with the Bank of America.
The first question to be resolved in passing on this
merger proposal is whether it will cause a substantial
lessening of competition in the section of the country
described as the San Francisco Bay metropolitan complex. The main offices of the applicant banks are separated by 400 miles; their closest offices are some 184
miles apart. This merger will not eliminate any substantial direct competition between the participating
81

banks for large loans and other "wholesale" banking
services. Although a statement is made in the application that of some 257 deposit accounts of over $50,000
reviewed by Pacific National Bank, 10 percent were
headquartered in southern California, an analysis of
the accounts indicates that they were not subject to
competition. Of these 25 accounts, nine were southern
California corporations with outlets in San Francisco
and the other 16 were predicated on personal ties to
officers and directors of Pacific National and, as such,
were out of the normal competitive market. The nine
southern California accounts handled by Pacific National Bank as an incident to the customers' San Francisco operations were not competitive with Security
First for the reason that Security First, with no San
Francisco office, cannot perform the necessary depository functions required by the accounts.
Conversely, Security First National Bank does not
compete with Pacific National Bank in the San Francisco area. Although Security First states that it has
$50 million in loans and $169 million in lines of credit
to customers in the greater San Francisco market, these
totals, constituting less than 1 percent of total bank
credit in the State, do not make the participants competitors. These customers, though headquartered in
San Francisco, were doing business in southern California. Of the 62 "major relationship" customers whose
aggregate lines of credit totaled $169 million, 53
sought lines of credit in excess of Pacific National's
lending limit of $1.5 million. The other nine borrowers,
though San Francisco based, had southern California
operations that Pacific National could not service for
want of a southern California office.
To assess this merger proposal in the light of its
possible impact at some future date on the banking
competition that may develop in the San Francisco
market is too speculative to be meaningful. As shown
above, Pacific National can no longer be viewed as a
significant, aggressive competitor in this market, nor
can it reasonably, within the bounds of prudent banking judgment, be expected to become such a competitor
through a program of branch expansion at this late
date in the growth of the Bay area market. Whatever
banking competition that will eventually develop in
this market over the years will not, as it now appears,
be generated by Pacific National Bank.
The competitive effect of this merger on the California banking structure will serve the public interest.
It will add another statewide institution to the small
group now serving the increasing number of customers desiring statewide facilities and services. The
statewide banks in California operate in both the
82




northern and southern regions and conveniently serve
those customers which operate on a statewide basis.
Until Wells Fargo recently branched into southern
California, only five banks competed statewide. Of the
total $41.2 billion in deposits held in all California
banks, the six banks presently operating throughout
the State hold $32.4 billion, and have the following
percentage shares, as of December 31, 1967:
Bank of America, N.T. & S.A
Wells Fargo Bank
Crocker-Citizens National Bank
United California Bank
The Bank of California, N.A
First Western Bank & Trust Co

59. 0%
12.0%
11.7%
10.5%
4.3%
2. 5%

The addition of Security Pacific National Bank as a
statewide competitor will decrease the dominance of
Bank of America and reduce the percentage of the
$37 billion in deposits held by the seven statewide
banks as the following indicates:
Bank of America, N.T. & S.A
Security Pacific National Bank
Wells Fargo Bank
Crocker-Citizens National Bank
United California Bank
The Bank of California, N.A
First Western Bank & Trust Co. . . -

50.9%
13. 6%
10.4%
10. 1%
9.1%
3. 7%
2.2%

The deconcentration of assets in each of the large
banks more than offsets the minimal increase in the
total resources to be held by the resulting bank. Pacific
holds only 0.58 percent of the deposits in commercial
banks in California. When deposits held by competing
financial institutions are included in the figures, Pacific's share diminishes to an almost imperceptible
percentage.
As of December 31, 1966, 267 savings and loan associations operating in California, including the seven
largest in this country, competed with the commercial
banks for savings dollars and mortgage loans. They
hold $26.4 billion in assets in 759 offices, 141 of which
were located in the San Francisco-Oakland metropolitan area. The savings share accounts of the associations exceeded the I PC time deposits held by commercial banks in California. In 1966, the banks loaned
$25.3 billion; the savings and loan associations loaned
$22.5 billion. Banks made real estate loans totaling
$8.3 billion compared to $21.2 billion made by the
savings and loan associations.
Other financial institutions also provided significant
competition to commercial banks. Consumer finance
companies, with 1,906 offices, made $1.2 billion in loans
in 1965. Credit unions had 1,777 offices in 1966, held
$1.3 billion in savings, and made loans totaling $1.3

billion. Insurance loans and those made by Federal
lending agencies also provided competition to commercial banks.
That it is not presently feasible for Security First
National Bank to enter the San Francisco-Oakland
metropolitan market de novo, with the reasonable expectation of providing effective competition to the
other statewide banks now operating there, is not as
obvious as is Pacific National Bank's inability to
branch effectively. Security First National Bank could,
it is assumed, obtain permission to open a de novo
branch on lower Montgomery Street in the financial
district of San Francisco. To explain why this bank,
which, under the direction of its specialized Branch
Location Division, has established 171 new branches
in the Los Angeles market since 1945, has not yet
applied for such an office explains in large part the
rationale of this merger proposal.
Security First National Bank, recognizing the difficulties faced by a single-office institution based in
San Francisco, plans to make its San Francisco office,
if one is opened, a regional headquarters and the hub
of a de novo branching system it would strive to develop throughout the Bay area and elsewhere in northern California. A de novo entry into San Francisco by
Security First National with this purpose in mind
would clearly involve much more than the typical
branch office now being opened throughout the State
in the proliferating suburbs and their shopping centers.
To make an immediate and effective entry into this
highly competitive banking market, Security First, as
the second largest bank in the State, would need to
offer at this San Francisco office the full panoply of
services it renders its customers in Los Angeles. Not
only would it accept deposits, pay checks, and make
loans, but it would, and must if it were to be a significant competitor, offer a full range of computer
services, trust services of all kinds, bond underwriting,
stock transfer, foreign banking, and specialized skill in
fishery, forestry, industrial, and commercial loans. Such
a complete array of banking service requires personnel
of high competence; the personnel require adequate
space; adequate space is expensive. The ultimate question that has deterred Security First from a de novo
entry is whether or not it would, in a reasonable time,
be profitable. Until its central San Francisco office
could be made a success, Security First, despite its
plans, could not undertake de novo branch expansion
throughout the entire Bay area with all its attendant
costs. Further, Security First has hesitated to compromise its successes by entering an area much more
heavily banked than southern California; southern




California has one banking office for every 8,400 persons, whereas northern California has one banking
office for every 4,600 persons.
The record of the past and the application filed with
this proposal are replete with evidence that Security
First National Bank, having so long confined itself to
southern California, had grave misgivings about a de
novo entry into San Francisco. Nothing indicates that
it was nurturing a hidden intent to make a de novo
entry. The demographic, geographic, and economic
composition of the entire San Francisco area market
militated against it. In the light of the record, Security
First cannot reasonably be viewed as a likely and logical entrant into San Francisco as a source of potential
significant competition.
The ability of Security First to enter San Francisco
through de novo branching, in and of itself, is not
meaningful. If it is to become a significant competitor
of Bank of America, speedy expansion by Security
First is essential if the widening gap in their market
shares is to be narrowed by significant statewide competition. Only by the acquisition of a stable San Francisco bank to serve as a base for its proposed Bay area
expansion plan can it hope to achieve a significant
competitive position vis a vis Bank of America.
This merger not only will provide Security First a
solid and meaningful initial entry into the Bay area
market and provide Pacific National with a sound solution to its threatening problems, but it will also serve
the convenience and needs of the San Francisco complex and the public interest of the entire State.
Through this merger Security First will gain an operating unit that would require many months to assemble, and a staff that is acquainted with and known
throughout this northern California economic community. The name of the resulting bank will preserve
the good will that Pacific National has developed over
the years and will remove from Security First any
stigma that might be attached to its entry as "an outlander" from Los Angeles—a not inconsiderable factor
in the State known for its north-south cultural cleavage. Pacific National's incorporation into the Security
First system of branches will initiate a significantly different development for banking competition in northern California than would a de novo entry by Security
First into the Bay market. With Pacific National as the
anchor branch in northern California, Security First,
with its branching expertise, will gain a substantial
lead on any de novo entry it could make.
By becoming a branch of Security First in a burgeoning statewide banking system, Pacific National
would shed many of the worrisome problems that now
83

vex it. First and foremost, it would be assured that its
spiral of decline in the market would be arrested. With
the resources of Security First behind the enterprise,
an aggressive entry into the San Francisco retail market
would be forthcoming. New branches, even on secondchoice sites, would be opened by a bank that could
afford to endure the cost until they became profitable.
The anticipated branch expansion from this substantial base in San Francisco would more effectively break
the decline in the wholesale commercial and industrial
accounts Pacific National has been experiencing. Another benefit from this proposal will be Security First's
augmented ability to compete effectively with the
dominant Bank of America for the deposits and loans
generated in California. Without increased competition, the Bank of America may well become a monolithic institution dominating the financial life of the
State.
The convenience and needs of Pacific National
Bank's customers have been ignored by the bank in the
formulation of its policies. By its demonstrated refusal
to initiate a branching program, Pacific National ignored the convenience its customers demanded when
they relocated in the Bay area beyond the limits of the
city and county of San Francisco. By its refusal to enter
retail banking markets through branching, Pacific National failed to grow apace with the needs of its customers. Security First, using Pacific National as a
jumping-off point, can meet the needs of those customers and, with its branch expansion program, serve
them conveniently as they follow the trend to subufbia.
Were Security First to make a de novo entry in lieu of
this merger, the accounts would, in all probability, be
lost to competitor statewide banks before convenient
facilities could be established to serve their needs.
This merger conforms to the philosophy of banking
proclaimed by the California legislature when it passed
its branching laws: that statewide banking is beneficial
to the economy of California. By uniting Security First
of Los Angeles and Pacific National of San Francisco,
two recognized regional institutions form a new and
desirable statewide system. This proposal clearly follows the trail recently blazed by Wells Fargo Bank and
Crocker-Anglo National Bank. Another statewide
banking system will provide those customers who do a
statewide business an alternative and competitive
source of credit. This new entry into statewide competition will enhance the benefits to the public that the
law recognizes as flowing from such aggressive and
healthy striving in the market place.
The benefits that will accrue to the San Francisco
Bay area upon consummation of this merger will be84




come more pronounced with the passage of time. The
longer Security First operates in the Bay area under its
new name, "Security Pacific National Bank," the more
thoroughly will it be accepted by the public and grow
through its acceptance. The longer it continues to
operate in this northern area and to implement its
branch expansion plans, the greater will be its effect
in stimulating banking competition in more and more
communities in the northern California counties.
Having reviewed this application and supporting
data in the light of the statutory criteria, it appears
that it will not adversely affect existing competition or
potential competition but, on the contrary, will promote
competition, will serve the convenience and needs, and
will foster the public interest of the residents of San
Francisco, the Bay area, and the entire State of California. The merger is, therefore, approved.
MAY 20,1968.
SUMMARY OF REPORT BY ATTORNEY GENERAL

Security First National Bank ("Security"), the second largest bank in California, proposes to acquire by
merger Pacific National Bank of San Francisco
("Pacific"), one of the major banks in the downtown
financial district of San Francisco. Pacific is the largest
unit bank in California. Security is headquartered in
Los Angeles, but its present 351-branch system encompasses the 14 southernmost counties of California, the
northernmost of which are San Luis Obispo, Fresno,
and Inyo Counties.
The offices of the respective banks are presently
located in different parts of the State; the closest
branch of Security at Fresno is 184 miles away from
Pacific's San Francisco office. However, even the limited survey made by the merging banks reveals at least
some direct competition between them for the business
of larger customers.
We conclude that the proposed merger would eliminate direct competition in the market for large loans
and perhaps other "wholesale" banking services.
The proposed merger would have its greatest impact in the San Francisco area served by Pacific.
Pacific's single banking office, in the heart of the downtown financial district of San Francisco, is one of 157
banking offices operated by 20 banks in San Francisco.
Pacific is the sixth largest bank in terms of operation
in the city and county of San Francisco, and the seventh
largest in the San Francisco-Oakland SMS A; it accounts for 3.4 percent of total deposits in the city and
county of San Francisco.

Banking is highly concentrated in the San Francisco market. Within the San Francisco-Oakland
SMSA (the area for which we have published figures),
the largest bank holds 41.7 percent of total deposits,
the second largest, 22.2 percent, and the third largest,
13.3 percent; this makes a total of 77.2 percent for the
three largest banks. The five largest banks account
for 86.6 percent of such deposits.
Security would clearly appear to be the most probable major de novo entrant into this market. It is the
second largest bank in California, and presently holds
11.4 percent of all deposits in the State; in the 14
counties in the southern portion of California where
it operates, it accounts for 23.5 percent of total deposits,
based on mid-1966 information. Statewide de novo
branching is permitted by California law. Security has
already undertaken substantial de novo branching
(171 offices since 1945) and now has offices extending
as far north as Fresno. Thus, Security's extensive resources, its history of de novo branch expansion, and
its desire to serve statewide customers clearly demonstrate its ability and incentive to penetrate the expanding northern California areas and become a statewide
banking system. Recent de novo expansion into Los
Angeles by two large San Francisco-based banks leave

Security alone among the large California banks in
not operating both in northern and southern California. The factors (including desire to retain statewide customers) which have caused others to expand
are likely to be equally compelling for Security.
Since it seems highly probable that if this merger
were denied Security would enter San Francisco de
novo (or by acquisition of a smaller San Francisco
bank), we find that the principal competitive loss resulting from the proposed merger would be the elimination of Pacific as a separate competitor in that
market. Pacific is a significant and unique competitor
in this market dominated by large branching systems.
In view of the highly concentrated state of this market,
we find the elimination of Pacific to be a significantly
adverse consideration.
In summary, the proposed merger would eliminate
a significant independent competitor in the highly concentrated San Francisco market, by means of merger
with the most probable major de novo entrant into
that market. It would also eliminate direct competition
in the broader market for large loans and other "wholesale" banking services. In these circumstances, we regard the proposed merger as having a significantly
adverse effect on competition.

EL PASO NATIONAL BANK, EL PASO, I I I . , AND THE WOODFORD COUNTY NATIONAL BANK OF EL PASO, EL PASO, I I I .
Banking offices
Total assets

Name of bank and type of transaction

In operation To be operatea

El Paso National Bank, El Paso, 111. (13631), with
and The Woodford County National Bank of El Paso, El Paso, 111. (5510), which
had
merged July 10, 1968, under charter of the latter bank (5510) and title "Woodford County National Bank of El Paso." The resulting bank at date of merger had.

COMPTROLLER'S DECISION

On April 2, 1968, The Woodford County National
Bank of El Paso, El Paso, 111., with IPC deposits of
$3.3 million, and the El Paso National Bank, El Paso,
111., with IPC deposits of $3.6 million, applied to the
Comptroller of the Currency for permission to merge
under the charter of the former and with the title of
"Woodford County National Bank of El Paso."
Both participating banks are located in El Paso, a
town of 2,200 persons, which is located approximately
20 miles north of Bloomington and 32 miles east of
Peoria in north-central Illinois. This agricultural com-




$4, 695, 749

1

4, 088, 038

1

8, 783, 787

1

munity is surrounded by highly productive farm land
devoted to the production of corn, soybeans, and hogs
and to cattle feeding. The Pfister Hybrid Seed Corn
Company, a leader in research and development of
the hybridization of corn, is the principal industry in
town. It employs 75 persons. Because many of El Paso's
residents commute to Bloomington, Normal, and
Peoria to work and shop, the main business district of
El Paso is marked by a number of vacant buildings.
Though a few homes in the $20,000 to $22,000 price
range are built in or near the town each year, hopes
for substantial population growth appear dim.
85

The Woodford County National Bank of El Paso
was organized in 1900. For the last 60 years it was substantially owned and controlled by one family. Early
in 1968 it was sold without notice to a group of out-oftown investors. The impact of this unexpected event
stimulated local imaginations and caused the formation
of the Woodford Bancorporation to regain ownership
and place control of the bank in local hands. This bank
corporation is owned by six directors, three of whom
are directors in the El Paso National Bank.
The El Paso National Bank was chartered in 1932.
Its present lending limit is $18,000. Although its deposits have doubled within the last 6 years, its rate of
growth has decreased notably.
To assess the impact of this merger and its effect
upon banking competition in the context of El Paso
and its environs is to give an unduly restrictive interpretation to the term "section of the country," as it
appears in the antitrust laws. The county appears to
be the smallest geographical area significant to this
merger. Because of the high mobility of the local population and its propensity to work and shop in Peoria,
Normal, and Bloomington, the banks in those cities can
reasonably be included in assessing the competitive
impact of this proposal. El Paso, it should be noted,
is officially included within the limits of the Peoria
Standard Metropolitan Statistical Area.
In Woodford County, with a population of 24,500,
there are nine banks, or one for every 2,900 persons.
These nine banks have aggregate deposits of $41 million or an average of $4.6 million per bank. The largest
of the nine is the $9.1 million First National Bank of
Eureka. It is clear that, since these banks cannot serve
the credit needs of the large farm operations in the
county, they must either act as mere depositories or
invest in high risk loans to their ultimate detriment.
While this merger will cause El Paso to become a
one-bank town, that fact is no more significant than
that it now has only one high school and one grade
school, whereas it formerly had two of each. There are
only eight towns in Illinois the size of El Paso or smaller
with two banks; there are 142 towns larger with only
one bank. To view this merger as creating an illegal
monopoly is to constrict unreasonably the competitive
market.
This merger will enable the owners of both banks
to economize on building costs and personnel resources. It will create a bank with significantly greater

86




earning base than either of the constituent banks possess, and will allow a more meaningful use of capital.
In short, the participating banks are attempting by
this proposal to solve the economic problems now
prevalent and confronting them.
Applying the statutory criteria to this proposal, this
Office finds that it is on balance in the public interest.
The application is, therefore, approved.
JUNE 7,

1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

The proposed merger would combine the only two
commercial banks operating in the town of El Paso,
111., an agriculturally oriented town of 2,200 population in southeastern Woodford County, about 35 miles
east of Peoria, 111. The merging banks are the only
commercial banks serving a market extending in radius
of approximately 5 miles from El Paso and having a
population of about 3,700. The two nearest banking
competitors are 8 and 9 miles away, with deposits
of $3.7 million and $7.2 million, respectively. Thus,
within its primary service area, the merged bank will
have a virtual monopoly.
The two banks have recently come under some degree of common ownership and control; El Paso National is affiliated with Woodford Bank by the fact that
three of its directors are shareholders of Woodford
Bancorporation, which controls Woodford Bank. Until
recently, the two merging banks were in direct and
substantial competition with each other; in fact, one
of the main reasons for the common ownership and
proposed merger seems to be to eliminate this competition, especially for loans.
The proposed merger would accomplish its purposes of permanently eliminating competition between
the merging banks and creating a banking monopoly
in El Paso and the surrounding area. Present competition is already restricted by common control of the
managements of the two banks; but this common control is maintained by personnel arrangements, and,
given its anticompetitive purpose and effect, may in
itself be illegal. In any event, it was just recently effectuated by Woodford Bancorporation in probable
anticipation of the present merger and, therefore, cannot be used to justify this merger.
The competitive effects of this merger would be significantly adverse.

COMMONWEALTH NATIONAL BANK O F SAN FRANCISCO, SAN FRANCISCO, CALIF., AND F I R S T SAN FRANCISCO BANK, SAN FRANCISCO,
CALIF.

Name of bank and type of transaction

Total assets

Banking offices
In operation To be operated

Commonwealth National Bank of San Francisco, San Francisco, Calif. (15330),
with
and First San Francisco Bank, San Francisco, Calif., which had
consolidated July 26, 1968, under charter of the former bank (15330) and title
"Commonwealth National Bank." The resulting bank at date of consolidation
had

COMPTROLLER S DECISION

San Francisco, the financial and commercial center of northern California, with a 1960 population of
approximately 740,000, is the headquarters of both
banks. Although the city of San Francisco has declined
in population since 1950, the surrounding metropolitan area has shown dynamic growth. From all appearances future area growth will continue to be concentrated outside the city. Similar shifts from the city to
the suburbs have also occurred in regard to both commercial and industrial establishments.
Commonwealth National Bank, with IPC deposits
of $26 million, opened for business on June 11, 1964.
It is presently operating out of one office in the downtown financial district of San Francisco. The bank
enjoyed almost 2 years of successful operations before
the onset of certain asset problems. The initial growth
of the bank has shown little ability to sustain itself,
and today the bank controls a mere 0.4 percent of the
total deposits of all San Francisco banks. Net profit
after taxes has shown a steady decline since the bank
was opened.
First San Francisco Bank, with IPC deposits of $14.8
million, opened for business on July 1, 1964, approximately two blocks from Commonwealth National
Bank. It is presently operating out of three offices, one
of which it acquired as a result of a merger with the
Mount Diablo First National Bank in 1966; the other
office was opened as a de novo branch in 1966. The
pattern of operations in this bank has been similar to
that of Commonwealth National. After a relatively
fast start, the bank has incurred certain asset problems, and there has been a marked slow-down in
growth over the past 2 years. Neither this bank nor
Commonwealth National have paid any dividends
since they opened for business.
The condition of these two recently chartered banks
must indicate to any reasonable observer of the San




$38, 942, 689
25, 109, 943
64,017,245

Francisco banking market that the successful operation
of either or both as independent units is, today, highly
questionable. Given the intense competition of this
market, both banks have had to satisfy themselves with
loans of a high risk nature. No one familiar with either
institution could watch the decline in asset positions
and virtual cessation of growth without questioning
their future viability.
Neither bank can be viewed as a significant, aggressive competitor in the San Francisco market, nor can
they, within the limits of prudent banking judgment,
be expected to become a competitive force in the future. Whatever banking competition eventually develops in this market in the ensuing years, it will not,
as it presently appears, be generated by these two
banks. The resulting bank will control less than 1 percent of the aggregate deposits and resources of banks
located in San Francisco. It is inconceivable that this
consolidation will in any way "substantially * * *
lessen competition, or tend to create a monopoly" in
this market area.
Having reviewed this application and supporting
data in light of statutory criteria, it appears that this
consolidation will not adversely affect existing or potential competition and we, therefore, find the consolidation to be in the public interest. The application
is, therefore, approved.
JUNE 20,

1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

Head offices of Commonwealth and First San Francisco are located approximately V/2 blocks from each
other in the downtown Montgomery Street financial
district of San Francisco, and are obviously in direct
competition.
San Francisco County is a highly concentrated
financial market, with three banks having 78 percent
87

of all county deposits. The merging banks are relatively
small institutions; combined, their deposits represent
less than 1 percent of the total deposits of all banks in
San Francisco County. While San Francisco County

undoubtedly overstates the market, both banks are in
direct and close competition in the downtown San
Francisco area with the major California branch banking systems.

NATIONAL BANK OF WASHINGTON, TACOMA, W A S H . , AND BANK OF WASHOUGAL, WASHOUGAL, W A S H .

Name of bank and type of transaction

Total assets

Banking offices
In operation To be operated

Bank of Washougal, Washougal, Wash., with
and National Bank of Washington, Tacoma, Wash. (3417), which had
merged July 26, 1968, under charter and title of the latter bank (3417). The
resulting bank at date of merger had
-.. _

COMPTROLLER'S DECISION

On April 22, 1968, the Bank of Washougal,
Washougal, Wash., with IPC deposits of $3.6 million,
and National Bank of Washington, Tacoma, Wash.,
with IPC deposits of $303 million, applied to the
Comptroller of the Currency for permission to merge
under the charter and with the title of the latter.
The Bank of Washougal, the merging bank, was
chartered in 1944 and operates as a unit bank. It is
located in Washougal, Clark County, Wash., which
is 26 miles northeast of Portland, Oreg., and 16 miles
east of Vancouver, Wash. Washougal, with a population of 3,300, is located 3 miles from Camas, whose
population is 5,700. Washougal and Camas are often
referred to as the twin cities and are located near the
Oregon border. The local economy of these communities is based largely on the Crown Zellerbach plant
in Camas and the Washougal Woolen Mills. In addition, this area is experiencing a rapid industrial
growth due primarily to a joint Port Authority which
is attracting business and industry to a 460-acre industrial park.
Washougal is presently being served by the merging
bank and the Camas branch of the National Bank of
Commerce, which has total deposits of $948.5 million,
two savings and loan associations, and two credit
unions.
National Bank of Washington was organized in 1885
and presently operates 38 branches in addition to its
head office in Tacoma.
Tacoma, the third largest city in the State, is supported by a lumber-dominated economy. However,




$5, 177, 233
389, 564, 631

1
40

394, 664, 546

41

there is a strong trend toward diversification in metallurgical processing, food processing, men's apparel, and
heavy and light manufacturing. Fort Lewis and McChord Air Force Base are located within 12 miles
of Tacoma, thus adding additional support to the
economy.
The charter bank, which is a subsidiary of Western
Bancorporation, Los Angeles, Calif., a registered bank
holding company, is Washington's fourth largest bank.
It competes vigorously with the $1.6 billion SeattleFirst National Bank; the $1 billion National Bank of
Commerce of Seattle; and the $398 million Peoples
National Bank of Washington, Seattle.
Competition between the applicant banks is nonexistent. The closest office of the merging bank is
approximately 50 miles from the charter bank.
The resulting bank will be able to offer to the customers of the merging bank a broader range of services,
including computer facilities, a greater lending limit,
and, in addition, it will have the capacity to develop
properly the expanding commercial banking business
in the merging bank's trade area. Furthermore, consummation of this merger will resolve the management
succession problem within the merging bank.
Applying the statutory criteria, we conclude that the
proposal is in the public interest, and the application
is, therefore, approved.
JUNE 20,1968.
SUMMARY OF REPORT BY ATTORNEY GENERAL

The closest office of National Bank to Washougal
Bank is some 50 miles northwest of Washougal in

Kalama, Cowlitz County, Wash. There appears, therefore, to be little existing direct competition between the
two banks.
The Washougal-Camas market area, located at the
gateway to Columbia River Gorge about 20 miles east
of Vancouver, near the Oregon border in the southern
part of Clark County, is experiencing rapid industrial
growth. There are two banking offices in this area,
Washougal Bank's sole office and a branch of the
State's largest bank, National Bank of Commerce (total
deposits, $948.5 million), at Camas. Washington law

permits statewide branching by merger, but prevents a
bank from establishing a de novo branch in any city or
town where any other bank regularly transacts business. Thus, no existing bank can establish a branch in
the growing Washougal-Camas market. However,
given the fact that the State's largest bank, with approximately one-third of deposits in the State and over
two-thirds of the deposits in this market is already in
this market, the entrance of National Bank into this
market would not appear to increase existing barriers
to entry.

T H E NATIONAL BANK O F COMMERCE O F COLUMBUS, COLUMBUS, M I S S . , AND BANK O F BROOKSVILLE, BROOKSVILLE, M I S S .

Name of bank and type of transaction

Total assets

Banking offices
In operation To be operated

Bank of Brooksville, Brooksville, Miss., with
and The National Bank of Commerce of Columbus, Columbus, Miss. (10361),
which had
merged July 31, 1968, under charter and title of the latter bank (10361). The
resulting bank at date of merger had

COMPTROLLER'S DECISION

On April 24, 1968, the Bank of Brooksville, Brooksville, Miss., with IPC deposits of $4.5 million, and The
National Bank of Commerce of Columbus, Columbus,
Miss., with IPC deposits of $11.4 million, applied to
the Comptroller of the Currency for permission to
merge under the charter and with the title of the latter.
The National Bank of Commerce of Columbus was
established in 1913 and operates its head office and
two branches in Columbus, Lowndes County, Miss.
The bank is being operated in a sound manner and
earnings have been satisfactory. Although the bank
is operated in a generally conservative manner, it has
assumed a reasonable share of the responsibility in
meeting the legitimate credit requirements of the area
it serves.
Columbus is the county seat of Lowndes County and,
with its population of approximately 28,500, is the
largest city in northeastern Mississippi. Historically,
the city has had a significant influence upon the State's
education and cultural programs. It now provides the
dominant economic influence in this section of the
State. Information indicates that Lowndes County is
the most progressive county in the trade area, and its
projected population growth appears favorable.




$4, 993, 996

2

14, 177, 146

3

19,573,016

5

The Bank of Brooksville was established in 1899 in
Brooksville, Noxubee County, Miss., which is located
approximately 22 miles southwest of Columbus.
Brooksville, with a population of 850, is primarily an
agricultural community; the major components are
soybeans, cotton, timber, beef, and dairy cattle. This
town lost considerable population between 1940-60 in
a pattern typical of rural Mississippi when mechanization forced people to migrate from the farms. However,
since 1960 both Brooksville and Noxubee County have
been gaining some industry and population.
Although the past history of the merging bank has
been satisfactory, it is currently experiencing problems
that derive from the general pressure of current economic conditions. Its recent abnormal rate of deposit
growth has begotten other problems. Its management
team does not appear able to resolve them.
Competition between the applicant banks is nonexistent, since the closest office of the merging bank is
18 miles from the charter bank.
The resulting bank will be able to offer a broader
range of services to the customers of the merging
bank, including expertise in the area of agricultural
loans, a greater lending limit, increased capitalization,
and, in addition, it will have the capacity to help
89

develop the commercial business that is being attracted
to that trade area. Furthermore, consummation of this
merger will resolve the management succession problem within the merging bank.
Applying the statutory criteria, we conclude that
the proposal is in the public interest, and the application is, therefore, approved.
JUNE 26,1968.
SUMMARY OF REPORT BY ATTORNEY GENERAL

The National Bank of Commerce of Columbus
("National Bank"), operates its home office and two
branches in Columbus, Lowndes County, Miss. Bank
of Brooksville, in Brooksville, Noxubee County, Miss.,
approximately 22 miles southwest of Columbus, acquired the Artesia State Bank in Artesia, Lowndes
County in 1957, which it now operates as its only
branch office.
It appears probable that there is some direct competition between the merging banks. Although the home

office of National Bank is 22 miles northeast of Brooksville, the intervening area is rural and sparsely populated and has no intervening banks. There are also
no intervening banking facilities between Columbus
and Bank of Brooksville's branch in Artesia, 18 miles
to the west. Any direct competition between the merging banks would, of course, be eliminated by this
merger.
There are two banks in Macon (population 2,400),
the largest town in Noxubee County, about 7 miles to
the south. National Bank is the second largest bank of
the three banks in Columbus (population 28,500) and
of the six banks in the Columbus-Brooksville-Macon
area, which includes virtually all of both Noxubee
(population 16,800) and Lowndes (population 53,100) Counties.
In conclusion, this merger will eliminate some direct
competition between the merging banks and will also
increase banking concentration in this rural market

FIRST NATIONAL BANK OF PORTLAND, PORTLAND, MAINE, AND RUMFORD BANK AND TRUST COMPANY, RUMFORD, MAINE
Banking offices
Total assets

Name of bank and type of transaction

In operation

Rumford Bank and Trust Company, Rumford, Maine, with
and First National Bank of Portland, Portland, Maine (4128), which had
merged Aug. 2, 1968, under charter of the latter bank (4128) and title "Maine
National Bank." The resulting bank at date of merger had

COMPTROLLER'S DECISION

On May 1,1968, the Rumford Bank and Trust Company, Rumford, Maine, and the First National Bank
of Portland, Portland, Maine, applied to the Office of
the Comptroller of the Currency for permission to
merge under the charter of the latter and with the title
"Maine National Bank."
The First National Bank of Portland, Portland,
Maine, with IPC deposits of $95.1 million, was founded
in 1889. Since that time it has had a long history of
successful growth and today ranks as one of Maine's
major financial institutions. Its good growth trend is
due in part to its depth in managerial resources developed in the extensive training program that the bank
operates. Among the many services that this full-service
institution provides are trust services, computer and
data processing services, a credit card service, travel
agency services, a business development department,
90




$22, 708, 508
133,206,282
155, 914, 790

To be operated

7
18
25

and a variety of installment loan plans tailored to fit
the varied specific borrowing needs of its customers.
The bank's capital structure is strong and is in satisfactory condition.
The service area of the charter bank includes the
five coastal counties of Cumberland, York, Sagadahoc,
Lincoln, and Romax which lie in the southeastern
section of the State. This region is inhabited by a
population of 350,000, representing 36 percent of the
State's total. Its economy rests upon manufacturing,
agriculture, vacation-travel, marine products, and minerals. Portland, Maine's largest city, with a population
of 72,000, is the center of this region. Because of its
fine harbor, Portland is an important seaport and a
major wholesale and commercial distribution center.
In addition, it is the financial and industrial center
of the State and houses branch offices of many national
companies.

Competing in this area of Maine are nine commercial
banks, a mutual savings bank, 14 savings and loan
associations, and a number of other financial institutions. Of the commercial banks, the strongest competition is furnished by the Casco National Bank, Portland,
Maine, and the Canal National Bank, Portland, Maine,
the third and fourth largest in the State. Mutual savings banks affording strong competition include the
Maine Savings Bank, Portland, Maine, whose total
deposits exceed those of the charter bank by some $20
million, and the Portland Savings Bank.
The Rumford Bank and Trust Company, Rumford,
Maine, with IPC deposits of $17.7 million, was organized in 1893 and today ranks as Maine's 12th largest
bank. The merging bank's chief problems are the imminent retirement of its chief executive officer, who
already has relinquished some of his duties, and the
lack of adequate successor management to replace him.
It is also limited by the fact that it is not a full-service
institution capable of meeting all of the community's
banking needs.
The service area of the merging bank includes the
counties of Oxford and Franklin, located on the western border of the State. These two counties cover an
area of 3,800 square miles and contain a population
of 64,414, which represents 6.7 percent of the State's
total. The economy of this area depends upon lumbering, farming, vacation and travel facilities, and a limited amount of manufacturing, mostly of wood products. In addition to the merging bank, the financial
needs of this area are served by a branch of the Depositors Trust Company, Augusta, Maine, the largest
bank in the State, and by three branches of the Casco
Bank and Trust Company, the third largest bank in
the State. It is also served by two small commercial
banks, five savings banks, one building and loan association, two branches of industrial banks, nine credit
unions, and other assorted financial institutions.
The merger should have no adverse effect on competition. Since the main offices of the merging banks
are 83 miles apart and their closest branch offices are
43 miles apart, the banks are too widely separated to
be in present competition. The merger will neither
change the charter bank's position as second largest in
the State, nor will it give the resulting bank any appreciably greater competitive advantage in the areas in
which the charter bank operates than it now enjoys.
In the area where the merging bank operates, the resulting bank will be better able than the merging bank
to compete with the Casco Bank and Trust Company
and the Depositors Trust Company, because of its
331-934—69

7




larger lending limit and the many additional services
that the merger will make available.
The merger will benefit the public by making available in the area in which the merging bank operates
the broad range of services that the charter bank now
provides but that the merging bank does not. These
will include trust services, electronic data processing
services, an American Express Executive Credit Card
plan, travel services, various types of time deposit accounts, a business development department, and special installment loan plans tailored to fit precise needs
of specific customers, including the financing of insurance premiums, medical and dental equipment, education, home improvements, mobile homes, and the
like. The merger will also be beneficial by increasing
the amount that may be loaned to a single borrower
at present offices of the merging bank. In addition, the
merger will solve the merging bank's management succession problem by bringing to the merging bank's offices the depth of management resources possessed by
the charter bank and its executive training program.
Considered in the light of the statutory criteria, this
merger is judged to be in the public interest, and is,
therefore, approved.
JULY 1,

1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

First National Bank of Portland ("First National")
operates its main office and six of its branch offices in
Portland and its environs and 12 additional offices
within a 60-mile radius of Portland. Since 1960 it has
merged with six small banks whose deposits at the time
of merger totaled approximately $27 million. Rumford Bank and Trust Company ("Rumford Trust")
operates its main office in Rumford, Oxford County,
Maine, four branch offices in Oxford County, and two
branch offices in Franklin County, all within an approximate radius of 30 miles from Rumford.
The major impact of the merger will be in Oxford
County, which has attracted several large industrial
concerns, and a steady advance in financial, commercial, and recreational development is anticipated.
Within this county, Rumford Bank, with about onehalf of total county deposits and one-third of IPC demand deposits, competes with three other banks, including a branch of the State's fourth largest bank.
The closest office of First National is about 42 miles
from any office of Rumford Trust and numerous offices of other banks are located in the intervening area.
The merger would not, therefore, appear to eliminate
91

any significant existing competition between the two
merging banks.
Under Maine law, First National cannot open a
de novo branch in Oxford or Franklin County; it could
enter the Rumford banking area, however, by merger
with a smaller bank operating in the market. Thus,
this proposed merger would eliminate potential com-

petition between First National and Rumford Trust,
the dominant bank in the market.
The planned merger would also eliminate an apparently strong and growing independent bank in
Rumford, and continue a pattern of expansion through
merger by First National, which has, since 1960, resulted in the elimination of six local banks.

FIRST NATIONAL BANK o r DONA A N A COUNTY, LAS CRUCES, N . M E X . , AND T H E FIRST NATIONAL BANK OF HATCH, HATCH, N. M E X ;

Total assets

Name of bank and type of transaction

Bankin g offices
In operation To be operated

The First National Bank of Hatch, Hatch, N. Mex. (12879), with
and First National Bank of Dona Ana County, Las Cruces, N. Mex. (7720),
which had
merged Aug. 9, 1968, under charter and title of the latter bank (7720). The
resulting bank at date of merger had

COMPTROLLER S DECISION

On April 11, 1968, the First National Bank of Dona
Ana County, Las Cruces, N. Mex., and The First National Bank of Hatch, Hatch, N. Mex.,filedan application to merge under the charter and with the title of the
former.
The charter bank, with IPC deposits of $23 million,
is located in Las Cruces, a city of 50,000 population.
Las Cruces is the principal commercial and political
center of Dona Ana County, an agriculturally oriented
area, which produces cotton, hay, and grain, as well as
vegetables. Considerable range country also provides
grazing lands for cattle. The estimated population of
the county is 76,000, that of the Las Cruces metropolitan area is 65,000.
Hatch is located 36 miles north of Las Cruces. The
population of 1,200 supports only one bank, the merging institution. The First National Bank of Hatch has
maintained an ultraconservative banking posture since
it was organized in 1926. Traditionally, it has not paid
interest on time deposits or expanded its fields of activity to include consumer lending. Its loan to deposit
ratio averages in the 10 percent range and its liquidity
is in the 80 percent bracket. Consequently, local customers looked elsewhere for financial institutions that
were willing to serve their needs. The El Paso banks
continue to serve many of the residents of Hatch.
A conservative philosophy prevailed in the First National Bank of Dona Ana County until 1954. Since that
time, however, liberalization of its policies and modern92




$2, 431, 826

1

32, 943, 885

6

35, 195, 514

7

ization of its banking practices have recaptured much
of the local banking business in Las Cruces. Active
competition exists in Las Cruces among the two commercial banks and three savings and loan associations
located in Las Cruces.
In November 1967, shareholders of the charter bank
purchased the Hatch bank following the retirement
of its owner and the sudden demise of his successor.
This identity of ownership precludes actual or potential
competition between applicant banks, and the merger
will provide positive benefits to the residents of Hatch.
The change of philosophy evident in the renewed
vigor of the Las Cruces bank will be extended to Hatch
as a result of the merger. Specialized localfinancingwill
be available locally for the first time. The aggressive
management of the charter bank will provide investment and trust facilities and computer services, and
will be able to lower service costs.
The banking structure of Dona Ana County will be
largely unaffected by the merger. Competition will continue to stem from the financial institutions located in
Las Cruces.
This merger is in the public interest and will have no
adverse effect on competition. The merger is, therefore, approved.
JULY 10,

1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

The proposed merger involves the largest and
smallest of three banks in Dona Ana County, a growing

county with a present population of 76,000. The two
banks have had common ownership since November
21, 1967, when Hatch Bank's principal shareholder,
after being solicited by the president of Dona Ana
Bank, sold his interest to a group holding a majority
of Dona Ana Bank shares. The banks have a common
president and two common directors.
The head offices of the two banks are about 36 miles
apart in a county on the United States-Mexico border,
whose economy is primarily based on ranching and
agriculture; there are no other banks in the intervening area. Dona Ana Bank has been soliciting business in the Hatch area since 1954, and thus, it appears
that, prior to the recent common ownership of the two
banks, there was some competition between the two
banks. While the common ownership has probably

dissipated such competition, it has been recently obtained and may have been part of a plan to achieve a
merger of the two banks.
This proposed merger would eliminate one of only
three banks operating 11 banking offices in Dona Ana
County. Dona Ana Bank now has about 55.5 percent
of the IPG demand deposits in the county, its merger
with Hatch National will give it 62.6 percent of such
deposits. The significance of this merger is enhanced
by the fact that, under New Mexico law, no bank can
operate a branch outside of its home county in any
county in which there is a bank operating; therefore,
the only way to decrease concentration in the growing
Dona Ana County market is through establishment of
new banks.

CITY NATIONAL BANK, BEVERLY HILLS, CALIF., AND PACIFIC INDUSTRIAL NATIONAL BANK OF SOUTH EL MONTE, SOUTH EL MONTE,
CALIFS
Banking offices
Total assets

Name of bank and type of transaction

In operation To be operated

Pacific Industrial National Bank of South El Monte, South El Monte, Calif.
(15320), with
was purchased Aug. 30,1968, by City National Bank, Beverly Hills, Calif. (14695),
which had
After the purchase was effected, the receiving bank had
-

COMPTROLLER'S DECISION

On May 17, 1968, the $352 million City National
Bank, Beverly Hills, Calif., applied to the Comptroller
of the Currency to purchase the assets and assume the
liabilities of the $5.2 million Pacific Industrial National
Bank of South El Monte, South El Monte, Calif.
The City National Bank, the buying bank, was organized on January 4, 1954, and presently operates 18
branches. Seventeen offices, including the head office,
are located within the greater Los Angeles area and
one office is located in Palm Springs, Calif. The buying bank has experienced very good growth in the
highly competitive area which it serves. It is located
in Beverly Hills, population 30,800, which is an incorporated city completely surrounded by the city of Los
Angeles. Beverly Hills is one of the most exclusive residential and shopping areas on the west coast and has
recently developed into a financial and business center.
The Pacific Industrial National Bank of South El
Monte, the selling bank, is located in South El Monte,




$5, 282, 578
359, 714, 564
364, 997, 142

18

Los Angeles County, approximately 11 miles east of
downtown Los Angeles. It was chartered on May 15,
1964, and operates as a single-office institution. South
El Monte is primarily a light manufacturing area, the
economy of which is characterized by numerous small
firms in the machine tool and related businesses.
Both buying and selling banks operate in highly
competitive areas. The buying bank competes with 23
banking offices in its service area and the selling bank
competes with eight banking offices. In both areas are
offices of large statewide branching institutions, including Crocker-Citizens National Bank, Security First National Bank, United California Bank, and Republic
National Bank. Additional competition in the service
areas is provided by savings and loan associations, sales
finance companies, insurance and mortgage companies, and direct lending agencies of the United
States Government. While the selling bank, in an effort
to compete with the large financial institutions operating in its trade area, attempted to enter the large
commercial loan field without support of adequate
93

staff expertise, the trend of its operations began to
deteriorate.
There is no competition between the banks, because
the selling bank is located 23 miles from the head office
of the buying bank and the nearest branches are 12
miles distant. In addition, common ownership exists
between the banks as the president of City National
Bank owns 16 percent and controls 88 percent of the
selling bank's outstanding stock.
The resulting bank will be able to offer a broader
range of services to the customers of the selling bank,
including trust services, an injection of additional capital, a greater lending limit and, in addition, it will have
the capacity to develop properly the commercial banking business in the selling bank's trade area. Furthermore, consummation of this proposal will resolve the
present management problems within the selling bank.
Since this purchase of assets and assumption of liabilities is clearly in the public interest, it is approved.
JULY 26,

1968.

SUMMARY OF REPORT BY ATTORNEY

GENERAL

The proposed merger would appear to have little, if
any, effect on direct competition. City's main service
area includes the downtown and West Los Angeles,
Hollywood, and Beverly Hills sections of western Los
Angeles County. The main service area of Pacific, on
the other hand, is centered in the less populous South
El Monte area in the eastern part of the county. City's
closest offices to Pacific are located at Pershing Square
in downtown Los Angeles, South Gate, and La Mirada,

and these are all 12 to 18 miles away from South El
Monte. There are intervening offices of numerous
banks, including Bank of America, Crocker-Citizens,
Security First National, and United California, and
the amount of business City obtains from the South El
Monte area of Los Angeles County is limited.
Both banks are relatively small factors in the broad
Los Angeles County (the Los Angeles SMSA) market.
City at present has only 1.9 percent of total deposits,
and 2.3 percent of IPC demand deposits, while Pacific
has only 0.2 percent of total deposits, and 0.03 percent of IPC demand deposits. This overall market is
highly concentrated, with the five largest banks in the
area having 85 percent of all bank deposits.
Although City might appear relatively small in the
context of the entire Los Angeles market, it is, nevertheless, a substantial bank, with total deposits of almost
$300 million. City has already demonstrated its ability
to expand by de novo branching, and has opened 12
new offices in Los Angeles County since 1953. Its
ultimate objective, as noted in the application, is to
penetrate all of Los Angeles County. The proposed
acquisition would be an integral step in that program,
giving City its first office within the now growing area
of eastern Los Angeles County.
Under the circumstances, City is a potential entrant
in the area served by Pacific. Should it achieve such
entry by acquiring Pacific rather than by branching
de novo, one of the two independent banks serving
the South El Monte area would disappear, and there
would be some loss of potential competition in the area.

SEATTLE-FIRST NATIONAL BANK, SEATTLE, WASH., AND FIRST STATE BANK OF LACROSSE, LAGROSSE, WASH.
Banking offices
Name of bank and type of transaction

Total assets
In operation

First State Bank of LaGrosse, LaCrosse, Wash., with
was purchased Aug. 30, 1968, by Seattle-First National Bank, Seattle, Wash.
(11280), which had
After the purchase was effected, the receiving bank had

COMPTROLLER'S DECISION

LaCrosse, home of the merging bank, has a population of 430 persons. This small, isolated, farming
community has lost population since 1960 and future
growth potential is at best extremely limited. The
economy is based exclusively on agriculture and its
94




$3, 791, 000

1

1, 737, 040, 076
1, 740, 831, 076

To be operated

125
126

service industries, with wheat the primary crop. LaCrosse is located in a region considered to be one
of the richest farming areas in the Pacific northwest,
and the service area extends some 10 to 15 miles in
all directions, containing a population of approximately 1,300 people. Agricultural production has de-

veloped to the point that Whitman County, home of
the selling bank, is today among the leading counties
in the United States in terms of value of farm products
sold. The decreases in population, together with the
increased productivity and value of the farm crops
sold, result from the general trend toward larger and
more mechanized farms, which has occurred in the
area.
Seattle, home of Seattle-First National Bank, with
a population of 557,087, is situated in northwestern
Washington. The economy of the area is tied closely
to the Boeing Company, which employs over 100,000
in four Seattle-Everett plants.
The $1.4 billion Seattle-First National Bank is headquartered, as its name would indicate, in Seattle, but
the bank has branches throughout the State, including
18 in the southeastern portion, the general area of the
merging bank. Spokane, the second largest city in the
State with a population of 187,000 people, serves as
the marketing and distribution center for this area.
The nearest branch of Seattle-First to the merging bank
is located in Coifax, 27 miles away.
First State Bank of LaCrosse, with IPC deposits of
$3.2 million, operates as a single-office bank. Within
the bank's primary service area there are no other commercial banks, mutual savings banks, savings and loan
associations, credit unions, small loan companies, or
any other financial institutions which compete directly
with the bank. The nearest commercial banking office
is located in Endicott, 16 miles northeast of LaCrosse.
This merger will cause the elimination of no significant amount of competition or potential competition
between the two banks. The banks do not compete at
the present time, and there will be no impairment of
any future potential competition as a result of this
merger, because the size of the service area of the merging bank is hardly sufficient to warrant one bank, let
alone two banks. What is probable, if this merger is
not approved, is that the town of LaCrosse will find
itself without a banking facility in the not too distant
future. Seattle-First not only will bring sufficient resources to provide future bank accommodations to




this community, but it will also provide additional
services to residents of the community, including higher
rates of interest on time deposits, trust services, and
expert agricultural consultant services.
This proposal will promote the public interest without lessening competition. The application is, therefore, approved.
JULY 30,1968.
SUMMARY OF REPORT BY ATTORNEY GENERAL

Seattle-First National Bank ("Seattle-First") is the
largest commercial bank in the State of Washington,
operating 124 offices throughout the State. As of December 31, 1967, it accounted for approximately 31
percent of the deposits, 32 percent of the loans, and 22
percent of the commercial banking offices in the State.
It has total deposits of $1.5 billion and net loans and
discounts of $955 million. First State Bank of LaCrosse
("First State") was organized in 1911 and has remained a unit bank. It has total deposits of $3.3 million and net loans and discounts of $1.7 million.
LaCrosse is a small, isolated, farming community
situated in Whitman County, in the rich wheat-growing Palouse Hills region of southeast Washington. First
State is the only bank in LaCrosse. There are eight
banks operating 16 offices in Whitman County.
Seattle-First's nearest office to First State is situated
at Coifax, about 27 miles east of LaCrosse. In view
of the distance between the banks and the fact that
they do not do a substantial amount of business in each
other's area, the proposed acquisition would not appear to eliminate a significant amount of direct competition between the parties.
Washington law prohibits Seattle-First from establishing a de novo branch in LaCrosse. Moreover,
it does not appear that any community near LaCrosse
would be attractive enough to induce Seattle-First to
establish a de novo branch therein. Consequently, it
does not appear that the proposed acquisition would
have any adverse effect on potential competition.

95

ZIONS FIRST NATIONAL BANK, SALT LAKE CITY, UTAH, AND THE BANK OF SPANISH FORK, SPANISH FORK, UTAH

Banking offices
Name of bank and type of transaction

Total assets
In operation

The Bank of Spanish Fork, Spanish Fork, Utah, with
was purchased Aug. 30, 1968, by Zions First National Bank, Salt Lake City, Utah
(4341), which had
After the purchase was effected, the receiving bank had

COMPTROLLERS

DECISION

On April 5,1968, the Zions First National Bank, Salt
Lake City, Utah, applied to the Comptroller of the
Currency for permission to purchase the assets and assume the liabilities of The Bank of Spanish Fork,
Spanish Fork, Utah.
Salt Lake City, the State capital, has a population
of approximately 200,000 persons. The city is the commercial and industrial center of the State and, because
of its location, serves as the transportation and trade
focal point for the intermountain region. Its economic
base is widely diversified and includes employment in
manufacturing, trade, mining, research, transportation, and service industries.
Spanish Fork, with an estimated population of 7,400
people, is located 65 miles south of Salt Lake City. The
economy of the area is dependent upon agriculture,
with livestock production and feeding the most successful and predominant pursuit. Approximately 15 to
20 percent of the population is employed in Provo,
Utah, 20 miles north. Future growth is expected to be
good as a result of the Colorado River Project, an extensive reclamation effort.
The Bank of Spanish Fork, with IPC deposits of
$15.2 million, was chartered as a State bank in November 1930. It presently operates a single office in Spanish
Fork.
Zions First National Bank, with IPC deposits of
$170.4 million, was founded by Brigham Young in
1873 and was owned by the Mormon Church until
1960, when control of the bank was sold to certain
individuals who subsequently exchanged their shares
in the bank for stock of the Zions Utah Bancorporation. The bank presently operates from its main office
and nine branch offices located in Salt Lake City and
Salt Lake Valley. This bank, the third largest in the
State, derives its primary competition from the $522.2
million First Security Bank of Utah, N.A., and the
$286 million Walker Bank and Trust Company.

96




$12, 440, 000

1

228,466, 318
245, 790, 000

To be operated

11
12

No competition will be eliminated as a result of this
purchase. The service areas of the two banks are
separate and distinct, and the Zions First National
Bank, because of existing State branching laws, is presently not permitted to branch de novo into Spanish
Fork. The elimination of The Bank of Spanish Fork as
an independent entity will open this community to further branching by other banks. Following the merger,
the present customers of The Bank of Spanish Fork will
be offered a wider range of banking services than those
presently available.
This proposal promotes the public interest without
lessening competition. The application is, therefore,
approved.
JUNE 25,

1968.

SUMMARY OF REPORT BY ATTORNEY

GENERAL

Zions Bank's offices are all located in the Salt Lake
City metropolitan area, the only major trade center
of commerce, industry, and finance within a radius of
at least 280 miles. This metropolitan area is served
by 18 banks operating a total of 75 offices.
Spanish Fork (population 7,400), Utah County, is
a primarily agricultural but growing residential area
approximately 45 miles south of Salt Lake City. Given
this distance, direct competition between the banks
appears to be nonexistent.
Under Utah branch banking law, no bank may
establish a de novo branch in Spanish Fork. The proposed merger would not, therefore, eliminate potential
competition between Zions Bank and Spanish Fort
Bank. Furthermore, Spanish Fork Bank possesses approximately 11 percent of Utah County deposits, and
within Spanish Fork itself, competes with a branch oi
First Security Bank of Utah, N.A. (total deposits
$465.8 million), the largest bank in Utah. Thus, the
proposed merger would not result in Zions Bank5!
assumption of a controlling position in Utah County

FIRST NATIONAL BANK O F ARLINGTON, ARLINGTON, V A . , AND FIRST NATIONAL BANK OF VIENNA, VIENNA, V A .

Banking offices
Name of bank and type of transaction

Total assets

To be operated

In operation

First National Bank of Arlington, Arlington, Va. (14660), with
and First National Bank of Vienna, Vienna, Va. (14965), which had
merged Aug. 31, 1968, under the charter of the latter bank (14965) and title
"Suburban National Bank of Virginia." The resulting bank at date of merger had.

COMPTROLLER'S DECISION

On February 12, 1968, the First National Bank of
Arlington, Arlington, Va., with IPG deposits of $26
million, and the First National Bank of Vienna, Vienna,
Va., with IPC deposits of $4.6 million, applied to the
Comptroller of the Currency for permission to merge
under the charter of the latter and with the title of
"Suburban National Bank of Virginia."
Both participating banks serve separate segments
of the northern Virginia portion of the Washington
Standard Metropolitan Statistical Area. This northern
Virginia sector, which is comprised of Arlington and
Fairfax Counties and the cities of Alexandria, Fairfax,
and Falls Church, is primarily a Washington suburb
with a total population nearing 700,000. Family income
levels in this rapidly expanding area are well above the
national averages owing to the high percentage of its
residents engaged in administrative, technical, and
research fields, and employed by the Federal Government at installations in both Washington and Virginia.
Vienna, the home of the charter bank, is an unincorporated town of 15,000 located in Fairfax County.
This county, which now has a population of 350,000
residents, is expected to double in size during the next
two decades. Commercial and industrial development
are expanding with the county's population growth.
At present there are eight major and numerous small
shopping centers, as well as the largest one in the entire
Washington area. During 1967, 34 new firms commenced operations in the county; 23 were engaged
in research and development work, and 11 in
manufacturing.
Arlington County, wherein the merging bank is located, is contiguous to Fairfax County and shares
many of its economic characteristics. While Arlington
County now has a population of 185,000, its future
growth will probably be slower than in Fairfax County.
To serve this county, there are presently four major
and 16 neighborhood shopping centers, housing some
950 retail stores that employ more than 23,000 people.




$36, 858, 934
9, 188, 397
46,047,331

3
3
6

Because of excellent highways and a very high volume
of commuter and shopping traffic, Arlington and Fairfax Counties must be considered as one.
The First National Bank of Vienna was organized
in February 1962, with its main office in Vienna. It
now operates two branch offices: one in Vienna and the
other in the very large shopping complex at Tysons
Comer. This bank is consumer oriented with a high
percentage of its assets in installment and single payment loans. After weathering the first 3 years of its
existence, this bank reported a good net operating
income in 1965. Since then, there has been a decline in
its earnings.
The First National Bank of Arlington, chartered in
1951, operates its principal office and two branches
in Arlington County. One branch is in the Pentagon
and the other is relatively close to it. This bank has
concentrated its lending efforts in commercial and
industrial loans and commercial mortgages. In recent
years, this bank's earnings have been declining owing
to general economic conditions.
There is no significant competition between these
participating banks to be lessened by consummation
of this proposed merger. Accepting the convenience factor as determinative of competition for retail deposits,
the 7 miles that separate their closest offices belie convenience and refute the existence of competition for
deposit dollars. Because their lending activities are
focused on different types of borrowers, no significant
credit competition exists between them. Nor can this
merger be viewed as lessening potential competition
between them; the provisions of the Virginia statutes
preclude each from branching de novo into the county
inhabited by the other. Neither is a potential entrant
into the other bank's retail domain.
In view of the total number of banks and banking
offices operating in this northern Virginia portion of
the Washington metropolitan area, the impact of this
merger on the banking structure will be very slight.
Within Arlington and Fairfax Counties and the three
independent cities, there are 27 banks operating 140
97

offices. The eight largest of these banks are subsidiaries
of large holding companies with substantial resources
at their command. Following this merger, the resulting bank will rank merely ninth in size, with six offices.
Though it will control about 4.6 percent of deposits
in this limited area, the figure must be shaded downward substantially to reflect the very real competition
that derives from other banks and the many nonbank
financial institutions located in other portions of the
Washington metropolitan area.
By this merger, participating banks can benefit the
public directly and indirectly. Through the union of
their resources and capital, greater lending capability
with larger lending limits will result. With the augmented earning base, the resulting bank can expand
the range of services beyond that offered by the constituent banks. Their union will indirectly aid the public by assuring a stronger resulting bank based upon
a more effective utilization of management resources.
Applying the statutory criteria to this proposal, it
promotes the public interest without substantially
lessening competition. The application is, therefore,
approved.
JUNE 10,1968.
SUMMARY OF REPORT BY ATTORNEY GENERAL

First National Bank of Arlington ("Arlington
Bank"), organized in 1951, proposes to merge into
First National Bank of Vienna ("Vienna Bank"),
organized in 1962. Neither bank is affiliated with a
holding company. Arlington Bank, which operates in
Arlington County, and, as of June 30, 1966, held 9.1
percent of total county deposits, ranks as the fourth
largest of six banks headquartered in Arlington County
and the eighth largest of 10 banks operating in the
county.
Vienna Bank, which operates its three offices in and
near the unincorporated town of Vienna in Fairfax
County, and, as of June 30, 1966, held 3.3 percent of
county deposits, is the smallest of three banks operating
in Vienna; it ranks sixth among the nine banks head-




quartered in Fairfax County and 14th among the 17
banks operating in the county.
Both Arlington and Fairfax Counties and the independent cities of Alexandria (population 116,000),
Falls Church (population 11,000), and Fairfax (population 18,000) are within the Washington Metropolitan Statistical Area, the ninth largest SMSA in the
United States, and the fastest growing in terms of
population.
The head offices of the merging banks are 10 miles
apart and their closest offices are 7 miles apart. At
present 11 other banks operate 15 offices between the
closest offices of the merging banks. There may be
some direct competition between Vienna Bank and
Arlington Bank which would be eliminated by their
merger, but, because of the distance between their
offices and the number of intervening banks, the
amount of competition eliminated would probably not
be significant. State law prohibits either bank from
branching into the home county of the other, except
by merger.
The proposed merger would not increase concentration in either Arlington or Fairfax County. However, if it were appropriate to use a broader market,
consisting of the counties of Fairfax and Arlington and
the three independent cities of Alexandria, Falls
Church, and Fairfax, then a slight increase in concentration would result. Twenty-seven banks (excluding First & Merchants National Bank of Richmond)
presently operate a total of 140 offices in this broader
market area. Nine of these banks, including the eight
largest, are subsidiaries or affiliates of three holding
companies and, together, they hold nearly 75 percent
of all deposits and 50 percent of all banking offices in
the combined area. The resulting bank would rank as
the ninth largest in the broader market area and, on
the basis of June 30, 1966 data, would have about 4.6
percent of area total deposits.
While the proposed merger may eliminate some
existing direct competition, and might increase concentration slightly in northern Virginia, these changes
would not appear to have a significant effect on overall
banking competition in the area.

UNITED STATES NATIONAL BANK, SAN DIEGO, CALIF., AND CONTINENTAL BANK, BEVERLY HILLS, CALIF.

Banking offices
Name of bank and type of transaction

Total assets
In operation To be operated

Continental Bank, Beverly Hills, Calif., with
and United States National Bank, San Diego, Calif. (10391), which had
merged Sept. 3, 1968, under charter and title of the latter bank (10391). The
resulting bank at date of merger had

$19, 618, 149
423, 669,562

2
50

*457, 143, 885

*53

* Includes County National Bank, Orange, Calif.

COMPTROLLER'S DECISION

On May 17, 1968, the Continental Bank, Beverly
Hills, Calif., with IPC deposits of $13.8 million, and
the United States National Bank, San Diego, Calif.,
with IPC deposits of $293 million, applied to the
Comptroller of the Currency for permission to merge
under the charter and with the title of the latter.
The United States National Bank was chartered on
August 1, 1913, and presently operates 48 offices in
the southern California counties of San Diego, Los
Angeles, Orange, Riverside, and San Bernardino. This
five-county area has emerged as a hub of financial activity in the State, with approximately $16 billion in
bank deposits. The banking competition in these five
counties is extremely intense, e.g., in San Diego County,
the home county of the charter bank, there are 13
commercial banks, operating 147 offices, and 14 savings and loan associations, with 47 offices. In Los
Angeles County, the largest county by population in
the Nation, there are 68 commercial banks, operating
867 offices, and 93 savings and loan associations, operating 315 offices. Riverside and San Bernardino
Counties are presently served by 18 commercial banks,
operating 161 offices, and 24 savings and loan associations, with 37 offices. Orange County is served by 22
commercial banks, operating over 185 offices, and 31
savings and loan associations, with 49 offices. The
charter bank, even though confronted with this intense
competition, has enjoyed steady growth in the past 9
years and has played an important role in servicing the
banking needs of these communities.
The Continental Bank was organized in July 1961,
as a nonmember State bank with its head office in the
Hollywood section of Los Angeles, Calif. In 1963, a
branch was established in Beverly Hills, Calif., and the
head office was relocated to the Beverly Hills site, with
the original head office becoming a branch. The primary market area of the merging bank is the affluent
section of southern California, comprising the city of
331-934—69

8




Beverly Hills and the Hollywood area of Los Angeles.
Beverly Hills is one of the wealthiest communities in
the Nation and has recently developed as a large financial and commercial sector. There are over 400 banking offices, representing 35 banking institutions, and
numerous offices of savings and loan associations located in the service area of the merging bank. Additional competition is offered by credit unions, sales
finance companies, personal loan companies, mortgage
companies, and lending agencies of the U.S.
Government.
Any competition between the charter bank and the
merging bank is more imaginary than real, in that
there are no common depositors or borrowers. In addition, 93 percent of the stock of the merging bank is
owned or controlled by the chairman-president of the
charter bank.
The resulting bank will be able to offer a broader
range of services to the customers of the merging bank,
including expertise in the commercial lending field,
electronic data processing facilities, trust department,
a greater lending limit, increased capitalization. Also,
it will have the capacity to develop the commercial
business that has been attracted to the trade area. Furthermore, consummation of this merger will resolve
the management succession problem within the merging bank.
Applying the statutory criteria, we conclude that the
proposal is in the public interest, and the application is,
therefore, approved.
JULY 26, 1968.
SUMMARY OF REPORT BY ATTORNEY GENERAL

United States National Bank ("U.S. National"), a
major southern California branch system with 48 offices, seeks to acquire through merger the Continental
Bank, located in the city of Beverly Hills, Los Angeles
County, and the County National Bank, located in
the city of Orange, Orange County.
99

Los Angeles County (the Los Angeles Standard
Metropolitan Statistical Area), in which the two offices
of Continental Bank and 25 of U.S. National's
branches are located, is the Nation's largest county
in population and has experienced extremely rapid
population and commercial growth. Orange County,
in which County Bank and nine of U.S. National's
offices are located, is a rapidly growing area undergoing rapid transformation from an agricultural to
an industrially oriented economy.
Four of U.S. National's branches are located at distances of approximately 1, 3, 5, and 6 miles from
Continental's two offices in Beverly Hills, in the Los

Angeles SMSA. In Orange County, County Bank's one
office is virtually surrounded by branches of U.S. National; one of these branches is only 2 miles away,
two are 3 miles distant, and a fourth is 4 miles from
County Bank. Although at present an Overlap in ownership among the three banks may limit the amount
of direct competition between U.S. National and the
two banks it proposes to acquire, their geographic
proximity indicates that they would ordinarily be expected to be direct competitors. The proposed mergers
would eliminate the possibility of such direct competition should the present ownership situation of the
acquired banks change.

UNITED STATES NATIONAL BANK, SAN DIEGO, CALIF., AND COUNTY NATIONAL BANK, ORANGE, CALIF.
Banking offices
Name of bank and type of transaction

Total assets
In operation

County National Bank, Orange, Calif. (15265), with
and United States National Bank, San Diego, Calif. (10391), which had
merged Sept. 3, 1968, under charter and title of the latter bank (10391) The resulting bank at date of merger had

$13, 856, 174
423, 669,562
*457, 143, 885

To be operated

1
50
*53

•Includes Continental Bank, Beverly Hills, Calif.
COMPTROLLER'S DECISION

On May 17, 1968, the County National Bank,
Orange, Calif., with IPC deposits of $8.6 million, and
the United States National Bank, San Diego, Calif.,
with IPC deposits of $293 million, applied to the
Comptroller of the Currency for permission to merge
under the charter and with the title of the latter.
The charter bank, the United States National Bank,
was chartered on August 1, 1913, and presently operates 48 offices in the southern California counties of
San Diego, Los Angeles, Orange, Riverside, and San
Bernardino. This five-county area has emerged as a
hub of financial activity in the State, with approximately $16 billion in bank deposits. Banking competition in these five counties is extremely intense, e.g.,
in San Diego County, the home county of United
States National Bank, there are 13 commercial banks,
operating 147 offices, and 14 savings and loan associations, with 47 offices. In Los Angeles County, the largest county by population in the Nation, there are 68
commercial banks, operating 867 offices, and 93 savings and loan associations, operating 315 offices. Riverside and San Bernardino Counties are presently served
by 18 commercial banks, operating 161 offices, and 24
100




savings and loan associations, with 37 offices. Orange
County is served by 22 commercial banks, operating
over 185 offices, and 31 savings and loan associations,
with 49 offices. The charter bank, even though confronted with this intense competition, has enjoyed
steady growth in the past 9 years and has played an
important role in servicing the banking needs of these
communities.
County National Bank, the merging bank, is a unit
bank that opened for business on February 17, 1964,
in the city of Orange, Orange County, Calif. The primary market area for this bank is Orange and the
immediate surrounding area located 30 miles southeast from downtown Los Angeles. The population of
Orange and contiguous Santa Ana is approximately
141,000. These cities have shared in the impressive
growth experienced by all of Orange County in the
past decade. The economy of the area has experienced
a transition from an agricultural to a commercial and
industrial base. The bank is experiencing problems that
derive from the general pressure of current economic
conditions and the intense competition from the large
banking institutions operating within Orange County.
Its own management team does not appear able to
resolve these problems.

Competition between the two banks is negligible in
that there are virtually no common depositors or borrowers. In addition, 84 percent of the stock of the
merging bank is owned or controlled by the chairmanpresident of the charter bank. At the present time,
management of the merging bank is being furnished
by the United States National Bank.
The resulting bank will be able to offer a broader
range of services to the customers of the merging
bank, including expertise in the commercial lending
field, electronic data processing facilities, a trust department, a greater lending limit, increased capitaliza-

tion and, in addition, it will have the capacity to
develop the commercial business that has been attracted to the trade area. Furthermore, consummation of this merger will resolve the management succession problem within the merging bank.
Applying the statutory criteria, we conclude that the
proposal is in the public interest, and the application
is, therefore, approved.
JULY 26,1968.
NOTE.—For summary of Attorney General's opinion, see
pp. 99-100.

INDUSTRIAL NATIONAL BANK OF RHODE ISLAND, PROVIDENCE, R.I., AND HOPE NATIONAL BANK, PROVIDENCE, R.I.
Total assets

Name of bank and type of transaction

Banking offices
In operation To be operated

Industrial National Bank of Rhode Island, Providence, R.I. (1302), with
and Hope National Bank, Providence, R.I. (15664), which had
merged Sept. 18, 1968, under charter of the latter bank (15664) and title "Industrial National Bank of Rhode Island." The resulting bank at date of merger had.

COMPTROLLER'S DECISION

On June 18, 1968, the Industrial National Bank of
Rhode Island, Providence, R.I., and the Hope National Bank (organizing), Providence, R.I., applied to
the Comptroller of the Currency for permission to
merge under the charter of the latter and with the title
of the former.
The Industrial National Bank of Rhode Island, with
assets of $871 million, has its main office in Providence,
R.I., and operates 49 branches throughout the State.
Approval of two additional branches has been granted
to the bank. It has had a long history of successful
growth, is under competent management, and has no
asset problems.
The Hope National Bank is being organized for the
sole purpose of providing a vehicle to transfer ownership of the Industrial National Bank to a holding company, Industrial Bancorp, Inc. Hope National Bank
is presently a wholly owned subsidiary of Bancorp,
except for the qualifying shares of its directors. Hope
National Bank will not have commenced banking
operations prior to the merger.
The Industrial National Bank now furnishes a complete line of banking services throughout the State. All
of these services will be rendered by the surviving bank




$909,348,116
249,486

50
0

909,355,410

50

in the same manner and with the same personnel as is
presently utilized by Industrial National Bank. The
proposed directors and executive officers of the resulting bank will be the same as those of Industrial National Bank. The banking business to be carried on by
the resulting bank will be conducted in the 49 existing
branches of Industrial National Bank, plus the two
additional branch locations, for which approval has
been granted to that bank.
Because the proposed merger involves only one operating bank, there can be no adverse effect on competition resulting from the proposed transaction.
Applying the statutory criteria, it is concluded that
the proposal is in the public interest. The application
is, therefore, approved.
AUGUST 15,

1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

Hope National Bank is a newly organized bank
being formed solely for the purpose of accomplishing
a corporate reorganization of Industrial National Bank
of Rhode Island, the largest bank in Rhode Island, and
thus presently performs no banking operations. Because the proposed merger involves only the corporate
reorganization of a single existing bank, it will have no
foreseeable effects on competition.
101

FIRST UNION NATIONAL BANK OF NORTH CAROLINA, CHARLOTTE, N.G., AND COMMERCIAL STATE BANK, LAURINBURG, N.G., AND
FIRST STATE BANK AND TRUST COMPANY, BESSEMER CITY, N.C.
Banking offices
Name of bank and type of transaction

Total assets
In operation

Commercial State Bank, Laurinburg, N.C, with
First State Bank and Trust Company, Bessemer City, N.C, with
and First Union National Bank of North Carolina, Charlotte, N.C. (15650),
which had
merged Sept. 19, 1968, under charter and title of the latter bank (15650). The
resulting bank at date of merger had

COMPTROLLER S DECISION

On May 6, 1968, First Union National Bank of
North Carolina, Charlotte, N.C, Commercial State
Bank, Laurinburg, N.C, and First State Bank and
Trust Company, Bessemer City, N.C, applied to the
Office of the Comptroller of the Currency for permission to merge under the charter and with the title
of the former.
Charlotte, home of the charter bank, is the financial
and distribution center of the State. Located in the
south-central Piedmont section of North Carolina,
Charlotte is one of the State leaders in manufacturing
and boasts the highest retail sales totals in the two
Carolinas. It is one of the fastest growing cities in
the southeastern United States.
First Union National Bank, with total resources of
about $800 million, is the third largest bank in the
State and presently operates 105 banking offices in 50
communities of North Carolina. Principal banking
competition for this bank is provided by the $1.4 billion
Wachovia Bank and Trust Company, operating 106
offices in 38 communities; the $1 billion North Carolina National Bank, operating 78 offices in 16 communities; and the $600 million First-Citizens Bank
and Trust Company, operating 104 offices in 48 communities. Competition for the charter bank is also provided by such strong regional banking systems as the
$390 million The Northwestern Bank and the $190
million Branch Banking and Trust Company. Many
other financial institutions also operate in the same
areas and compete with the charter bank. The other
banks involved in this merger are relatively small institutions located in widely separated areas of the State.
The merging Commercial State Bank is headquartered in Laurinburg, the seat and retail trade center
of Scotland County. It presently operates branch offices
in three other communities in the same county and
two offices in adjoining Richmond County in Hamlet
in Marks Creek Township. Scotland County has been

102




$10, 554, 223
8, 940, 759

6
3

852,486, 078

To be operated

108

872,019,941

117

an agricultural area. In recent years, however, its economy has changed so that now manufacturing of textiles
is the main economic activity in the area. With total
employment in 1966 of 11,480, average employment
in agriculture was 1,270, monthly average employment
in industry was 6,829. The family, personal income
levels, and housing conditions of this county are considerably below the statewide norm. The creation of
an environment conducive to growth and attractive to
new industry is of primary importance to the future
of the area. It needs larger banking institutions, such
as those that have played a vital role in the growth
of other areas of the State in recent years by helping
to create an environment attractive to industry and by
offering extensive services to all segments of the
community.
Although the two counties served by the Commercial State Bank share many common attributes, their
economic bases differ. The economy of Hamlet in
Richmond County was and still is largely dominated
by the railroad industry. However, a change and expansion of the economic base has taken place in recent
years with an increase in manufacturing. Family and
personal income levels for Hamlet and the surrounding township area are equal to the State level, and
housing conditions are better than those in Scotland
County.
Commercial State Bank was organized in 1920. With
IPC deposits of $8 million, the bank is not able to meet
the credit needs of the large businesses in its service
area, nor to offer the more sophisticated banking services required by them. Although its capital structure
needs shoring, its earnings have declined during the
past 2 years. This bank, facing a serious management
succession problem, because its chief executive officer is
over 70 years of age and is semiretired, lacks management succession. Its size is a limiting factor in attracting new management. Since a number of directors of
this bank are approaching retirement, the bank has

tried, with little success, to find in its area younger men
qualified to replace them. Because of these present
limitations in capital, earnings, and management, it is
doubtful that this bank could do much in the future to
foster competition or to stimulate growth in its service
area.
Commercial State Bank is in a weak market position, because banking competition for this bank derives
from the $1.4 billion Wachovia Bank and Trust Company, which recently merged with The State Bank of
Laurinburg, an $11 million institution operating three
offices, and the $120 million Southern National Bank
of North Carolina, with offices in Laurinburg and
Hamlet. It should be noted that the Southern National's Laurinburg office, in operation for 9 years, has
reflected very slow growth. Competition is also provided by savings and loan associations, factoring companies, sales finance and personal loan companies, and
direct lending agencies of the Government.
First Union National Bank has no offices in Scotland
County or Richmond County, and its office closest to
the merging Commercial State Bank is in Red Springs,
Robeson County, which is approximately 15 miles
from Wagram. Although the bank serves some of the
large businesses in the area of the merging bank, the
two banks do not compete with each other, because
Commercial State Bank could not meet the credit
needs of these large customers.
Although First Union National Bank could, under
State law, branch de novo into the area of the merging
bank, the population per banking office ratio and the
economy of the area do not warrant de novo entry.
This was the conclusion reached by a majority of the
Federal Reserve Board in approving Wachovia's entry
into this city. In view of the presently existing banking
structure in the market area of Commercial State Bank,
to insist on de novo branching would be to aggravate the problems at this bank by creating undue
competition.
Consummation of the proposed merger between
First Union and Commercial State Bank, in addition
to solving the problems at the merging bank, will result
in a sharply increased competitive situation in the service area of the merging bank. The resulting bank would
provide not only a full range of banking services and
a larger lending limit, but also access to credit resources
beyond those generated locally. It will help in the creation of a banking structure that will facilitate the economic growth of the Laurinburg-Hamlet area.
The merging First State Bank and Trust Company
operates offices in the three small communities of Bessemer City, Dallas, and Mount Holly, all in Gaston




County. Gaston County is situated in the southwestern
Piedmont section of the State and has a current population of about 126,000. Economic activity in this
county is predominantly manufacturing. According to
U.S. Department of Commerce 1966 statistics, approximately 298 establishments were engaged in manufacturing activity, with total employment in excess of
35,000. Textile production is the sustaining force of the
economy. Gaston County has been long noted for its
manufacture of fine combed cotton yarn, and the general market area is dotted with firms producing knit
goods, woven synthetics, yarns, and threads. Other major industries include the manufacture of textile machinery, trucking, and the retail trades. Farming plays
a relatively minor role in the economy of the county.
Personal income in this area is slightly better than the
State average, but housing in the area is modest.
First State Bank and Trust Company, organized in
1907, is a conservatively-run institution, which presently has IPC deposits of $6 million. While operating
income has been satisfactory over the past few years,
substantial loan losses have reduced net earnings significantly in 1966 and 1967. The bank is also faced
with the need to build new banking quarters in both
Dallas and Bessemer City, which will require large
capital outlays it cannot afford. Because of its size,
the bank is limited in the services it is able to offer
to its customers; all of the larger businesses in the
county are now served by the State's larger banks from
their offices in either Gastonia or Charlotte.
The merging bank is faced with a serious management succession problem. Its chief executive officer,
now over 70 years of age and in failing health, is
anxious to retire, and no subordinate is able to succeed
him. The bank is unable to attract new and capable
management from outside the area, because of its salary scale and other related factors. Since its board of
directors is also composed of older men, who have retired or are reaching retirement age, the bank has had
little success in finding qualified younger men in the
area, as the law requires, to serve as its directors.
Although existing banking competition in Gaston
County is very keen, the merging First State Bank contributes little to the competitive climate. Of the seven
banks presently operating 19 offices in the county, four
are headquartered there and three are headquartered
in other counties. The local banks include the $9 million merging bank, with three offices; the $21.5 million Bank of Belmont, with one office; the $7 million
Cherryville National Bank, with one office; and the
$53 million Citizens National Bank in Gastonia, with
eight offices. The outside banks include the $16 million
103

First National Bank of Lincolnton, with one office in
Cherryville; the $600 million First Citizens Bank and
Trust of Smithfield, with two offices in Gastonia; and
the $800 million charter bank, with three branches in
Gastonia. Banks located in Charlotte, which is situated
in the adjoining Mecklenburg County and about 25
miles from Bessemer City, provide additional banking
alternatives to Gaston County residents who work in
Charlotte. Competition is also provided by numerous
insurance companies, four savings and loan associations, a number of small loan companies, sales finance
companies, one credit union, and a direct lending
agency of the Government, operating in the area.
Although First Union National Bank operates in
Gaston County, it does not compete with First State
Bank within the limits of the latter's competitive competence. First Union operates three branch offices in
Gastonia, the county seat, which is about 7 miles to the
east of Bessemer City, about 5 miles to the south of
Dallas, and about 12 miles to the southwest of Mount
Holly. It also operates a branch in Kings Mountain in
Cleveland County, about 5 miles to the southwest of
Bessemer City. In view of the distance between the
offices of the participating banks, there is no significant
competition presently existing between them. The
merging bank draws its accounts almost exclusively
from the areas in which it is located; it reportedly does
not solicit business outside the immediate vicinities of
die towns in which it has offices. Due to its size, the
merging bank is precluded from competing with the
charter bank in the field of commercial loans and other
specialized services required by the larger businesses
in the area.
This merger, while having little competitive impact
in Gaston County, will do much to promote the welfare of county residents in the communities served by
the merging bank. The addition of $6 million of IPC
deposits to the charter bank will have little effect on
overall existing competition and concentration of banking resources in the Gaston County market. The charter bank will still rank the second largest in the area
in terms of local deposits. On the other hand, consummation of this proposed merger between First Union
National Bank and First State Bank and Trust Company will solve the severe problems vexing the merging
bank, and will introduce into the communities now
served by the merging bank, one better able to serve
and more responsive to their needs. The resulting bank
will be able to meet the credit needs of the larger
businesses in these communities, as well as provide the
more specialized services required by these businesses,
104




such as equipment loans, computer services, and the
services of the bank's textile department.
Applying the statutory criteria to this proposal, it is
found that the convenience and needs of the communities to be served clearly outweigh any possible adverse
effect on competition that it may have, and that it is
in the public interest. The application is, therefore,
approved.
AUGUST 20,

1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

First Union, the third largest commercial bank in
North Carolina, accounts for approximately 14.7 percent of the aggregate deposits of North Carolina's
banks; its 104 branches, operating in 50 communities,
account for approximately 14 percent of all branch
offices in the State. Commercial State Bank in Laurinburg ("Commercial"), operates six offices in two adjoining counties in the south-central portion of North
Carolina along the South Carolina border, and First
State Bank & Trust Co. ("First State"), operates three
offices in Gaston County, also in south-central North
Carolina about 100 miles west of the area served by
Commercial.
Commercial's head office is in Laurinburg (population 8,242), the county seat of Scotland County (population 25,183), and the principal trade center of
Scotland County and the adjoining Maxton area
(population 1,755) of Robeson County. The economy
of the Scotland County-Maxton area has undergone
substantial changes in recent years with substantial
industrial growth. Commercial is one of only two
banks headquartered in the Scotland County-Maxton
area, and one of only three banks operating a total of
10 banking offices in the area.
First Union has no offices in the Scotland CountyMaxton area; its nearest offices are about 15 miles
away. While First Union may derive some business
from this area from larger industries and businesses,
because of the distances between the closest offices of
the merging banks, it appears that little or no existing
competition would be eliminated by this proposed
merger.
The elimination of potential competition between
the State's third largest bank and a successful local
bank with a substantial market position in the growing Scotland County-Maxton market would be
significant.
As of June 30, 1966, Commercial's four Scotland
County offices accounted for 23.5 percent of the $16.6
million of total IPC deposits in all 10 county banking

offices as compared with 54.6 percent for State Bank
and 21.9 percent for Southern National's Laurinburg
branch. In the Scotland County-Maxton area, the
local banking structure has remained relatively unchanged since Southern National opened its Laurinburg branch in 1959. Despite the area's rapid industrial
growth, there have been no efforts to obtain new bank
charters or to establish de novo branches in the Scotland County-Maxton area since that time. That the
area, however, does offer attractive banking prospects
to outside banks is indicated not only by this proposed
merger, but also by the recently proposed merger of
The State Bank in Laurinburg into Wachovia Bank
and Trust Company, the State's largest commercial
bank.
North Carolina law permits statewide de novo
branching. First Union can be considered to be one of
the most likely potential entrants through de novo
branching into the Scotland County-Maxton area. It
is the third largest bank in the State, it has the resources to establish such branches, and it has demonstrated its capacity and willingness to expand through
de novo branching: over 50 percent of its 105 existing
offices were created de novo.
First State is the third largest of four banks headquartered in Gaston County and one of seven operating 20 banking offices in the county. The eastern border
of Gaston County is contiguous to Mecklenburg
County, the location of Charlotte (population 201,564), the largest city in the State. The Charlotte metropolitan area is less than 10 miles east of Gaston County,
and many Gaston County residents, including those
of Bessemer City, Dallas, and Mount Holly, commute
to the Charlotte metropolitan area to work or trade.
The head offices of First Union and First State are
27 miles apart, but First Union's three Gastonia
branches are only 7 miles distant from First State's
head office and its Dallas branch, and First Union's
Kings Mountain branch in Cleveland County is only
5 miles from Bessemer City. First State does business
throughout all portions of Gaston County, with the
possible exception of the Cherryville area in the northwest corner of the county. The proposed merger would
therefore eliminate substantial direct existing compe-




tition between First Union and First State in Gaston
County. And because of the proximity of First State's
Mount Holly branch to the Charlotte metropolitan
area, the merger would also appear to eliminate existing competition between the Mount Holly office and
First Union's Charlotte offices.
Commercial banking in Gaston County is highly
concentrated. As of June 30, 1966, 67 percent of the
total IPC deposits of $86 million in county banking
offices were held by two of the seven banks operating
in the county at that time, and 83 percent of such
deposits were held by three banks—Citizens National
Bank of Gastonia with 43.8 percent, First Union with
23.2 percent, and Bank of Belmont with 16.1 percent.
First State held 6.9 percent of such deposits. Thus, as
a result of the proposed merger, concentration of commercial banking deposits in the two banks holding the
largest shares of IPC deposits would be increased to
73.9 percent, and in the three banks holding the largest
shares to 90 percent; and First Union's share alone
would be increased to over 30 percent.
These proposed mergers represent significant steps
in the continuing trend of acquisitions and mergers by
North Carolina's largest commercial banks. This acquisition trend, by reducing the establishment of de novo
branches by the State's largest banks, undoubtedly inhibits the development of a more competitive banking
structure, not only by eliminating substantial existing
competitors and those most able to enter new markets
de novo as sources of potential competition, but also
by increasing the barriers to entry de novo for smaller
institutions. Moreover, acquisitions by the State's largest banks tend to foreclose the creation, by means of
mergers between smaller banks in separate local markets, of banking institutions capable of competing with
the largest banks for the business of large industrial
customers.
We conclude that the proposed merger of Commercial and First Union would cause a significant
lessening of potential competition, and that the proposed merger of First State and First Union would
eliminate substantial existing competition and significantly increase concentration.

105

MARYLAND NATIONAL BANK, BALTIMORE, M D . , AND WESTERN MARYLAND T R U S T COMPANY, FREDERICK, M D .

Banking offices
Total assets

Name of bank and type of transaction

In operation

Western Maryland Trust Company, Frederick, Md., with
and Maryland National Bank, Baltimore, Md. (13745), which had
merged Sept. 30, 1968, under charter and title of the latter bank (13745). The
resulting bank at date of merger had

COMPTROLLER S DECISION

On May 16, 1968, the Western Maryland Trust
Company, Frederick, Md., and the Maryland National
Bank, Baltimore, Md., applied to the Comptroller of
the Currency for permission to merge under the charter
and with the title of the latter.
The Western Maryland Trust Company, the merging bank, has IPC deposits of $15 million and operates
five offices in Frederick County. The bank is headquartered in the city of Frederick, approximately 40
miles west of Baltimore and northwest of Washington,
D.C.
Frederick, with a population of 26,000, is the county
seat and trading center of Frederick County. The population of the county is currently estimated at 90,000.
It increased 17 percent between 1960 and 1965, and
a similar percentage of increase is expected between
1965 and 1970. This relatively rapid growth is credited
to the industrialization of the formerly rural county
and to Frederick's proximity to two large and growing
metropolitan areas. Industrial concerns include electronics, optical equipment, leather goods, and canning.
The area also is important for farming, dairying, and
raising livestock.
The charter bank, the Maryland National Bank,
maintains its head office in Baltimore. The bank holds
IPC deposits of $650.8 million, and operates 85 offices
in 14 of Maryland's 23 counties and the independent
city of Baltimore.
The competitive effects of the merger will occur
primarily in Frederick County, where the addition of
a broadly based bank with substantial resources will
supply an area struggling with the problems of steadily increasing industrialization with the financial resources needed for such endeavors. Frederick County
presently has nine banks, four of which are based in
Frederick. The remaining five are small unit banks
scattered throughout the county. The four banks in
Frederick have 13 offices. Dominating the Frederick
financial scene is Farmers and Mechanics National
106




$19, 976, 522
1, 012, 575, 235
1, 031,022, 181

To be oj erated
b

5
87
92

Bank which, with total resources of $95.7 million, holds
60 percent of the banking assets in Frederick. Frederickstown Savings and Trust Company is next largest
in size, with $29 million in resources. Western Maryland ranks third, with $18.5 million, and Frederick
County National Bank is fourth, with $14.1 million.
Competition among the four banks is very keen; in
the past 5 years, their respective resources have increased from 44 to 58 percent. In addition, three
building and loan associations, one local finance company, a branch of a large Baltimore savings and loan
association, and Federal lending agencies compete
aggressively in the financial market in Frederick.
The entry of Maryland National Bank into Frederick County, through the instant merger, will have
no adverse effect upon competition. The charter bank
maintains no offices in the county. The closest branches
of the applicant banks are 16 miles apart, and investigations indicate that competition between the two
banks is insignificant. Although it is legally possible
for the charter bank to enter the Frederick County
market through de novo branches, this method of entry
is not feasible in view of the adequate number of banks
and branches presently serving the area. Frederick has
one banking office for every 2,000 people. The average
ratio for Maryland is one bank for every 6,600.
This merger will have a pronounced effect on the
banking structure of Frederick County in terms of size.
The increased lending capability and specialized services available from a large bank will overcome the
two deficiencies in the banking structure of the county
and stimulate local competition. As the area becomes
more industrial and the financial requirements of local
businesses and developers increase, the need for a bank
having sufficient lending ability to meet such requirements becomes evident. At the end of 1967, Western
Maryland had a loan-to-deposit ratio of 68 percent,
indicating that it is lending nearly to its maximum
capacity. Since lending limit is $100,000, its resources,
therefore, are available only to the smaller commercial
accounts. Western Maryland Trust has lost its larger

customers to bigger, often out-of-county banks, and
the trend is expected to continue and to worsen.
Frederick's location, on the outer edge of two metropolitan areas, points to important growth and development within the near future. Suburban development
requires immense amounts of ready capital, highly specialized lending services, and a well-trained managing
staff. Western's size has militated against its use of
computer equipment and the development of personnel trained in such areas as inventory and receivable
financing, direct leasefinancing,term loans, and equipment loans. Furthermore, Western has been managed
largely by one man who, at 68 years of age, is nearing
retirement, and finding successor management at competitive salaries would be nearly impossible in view of
Western's recent earnings record.
Frederick's need for increased capital and personnel
trained in modern lending practices will be well met
by the entry of Maryland National into the county.
Although the charter bank is the largest bank in the
State, it does not dominate financial institutions there.
It holds 16 percent of the total commercial banking resources in Maryland; the acquisition of Western Maryland will increase its share by only 0.3 percent. When
the competition of nonbank financial institutions, as
well as the large out-of-State banks soliciting business
in Maryland, are taken into consideration, Maryland
National's influence lessens considerably, posing no
threat of an anticompetitive concentration of financial
resources.
The merger proposal will benefit the interests of the
residents of Frederick County without unduly increasing the concentration of banking assets in the State
of Maryland. The merger is, therefore, approved.
JULY 29,1968.
SUMMARY OF REPORT BY ATTORNEY GENERAL

The proposed merger would unite Western Maryland
Trust Company ("Western Maryland"), the third

largest bank in Frederick County, with Maryland National Bank ("Maryland National"), the largest bank
in the State of Maryland. The nearest offices of the
two banks—Western Maryland's Ridgeville office and
Maryland National's Gaithersburg office—are 18
miles apart, and there are only a handful of customers
common to both banks. Thus, there appears to be little
existing competition between the merging banks.
Maryland law permits statewide de novo branching,
and Maryland National appears to be a potential de
novo entrant into Frederick County (population 84,000), which is currently served by nine banks operating
a total of 23 offices. It is one of the few remaining
county markets in which Maryland National does not
yet operate; the area is growing and appears to present
a relatively attractive banking market. Moreover, the
possibility that Maryland National might enter is indicated by its current interest in entering de novo at least
one other area of the State where it is not already represented (i.e., Howard County). Alternatively, Maryland
National might enter Frederick County by acquisition
of a smaller bank.
The importance of potential competitors for this
market rests on the fact that Frederick County is a
concentrated banking market. The three largest banks
presently hold about 78 percent of total county bank
deposits. The bank to be acquired, Western Maryland,
holds about 10 percent of total deposits of county commercial banks and is the third largest bank within this
market. Moreover, this bank has shown a strong recent
growth trend, having more than doubled its deposits
since 1960, so that its competitive influence in that market may be expected to increase further in the future.
The proposed merger would combine the third
largest bank in a concentrated market with one of the
most likely new entrants into that market. We conclude
that the proposed merger may have adverse effects on
potential competition in commercial banking in Frederick County.

THE FIRST NATIONAL BANK OF HUNTSVILLE, HUNTSVILLE, ALA., AND FARMERS & MERCHANTS BANK, MADISON, ALA.

Banking offices
Name of bank and type of transaction

Total assets
In operation

Farmers & Merchants Bank, Madison, Ala., with
and The First National Bank of Huntsville, Huntsville, Ala. (4067), which had ..
merged Sept. 30, 1968, under charter and title of the latter bank (4067). The
resulting bank at date of merger had




$2,477, 868
73, 370,422
75, 642, 957

To be operated

8
9

107

COMPTROLLER'S DECISION

On June 14, 1968, the Farmers & Merchants Bank,
Madison, Ala., with total deposits of $2.3 million, and
The First National Bank of Huntsville, Huntsville,
Ala., with deposits of $58.3 million, applied to the
Comptroller of the Currency for permission to merge
under the charter and with the title of the latter.
The First National Bank of Huntsville, which was
established in 1865, operates its head office and six
branches in the city of Huntsville; two additional facilities are located in the nearby Redstone Arsenal
and the Marshall Space Flight Center. Huntsville, with
a population of 150,000, is the county seat of Madison
County and is located in the Tennessee Valley Authority region. It is serviced by six-banking institutions
having 20 branches. The city has experienced substantial growth in the last 10 years; the construction of
space facilities in the area has contributed much to its
economic stability. Further growth of Huntsville is insured by the installment of a nuclear powerplant at
Brown's Ferry, which will attract new industries by
providing a cheap source of electrical power.
The Farmers & Merchants Bank was organized
in 1926. It operates a single office in Madison, a town
of 3,500, located 12 miles southwest of Huntsville.
Madison has been, historically, an agricultural township. In recent years, however, numerous businesses,
attracted by a new airport and Highway 20, have established plants and offices in the area.
Competing in the primary service area of the applicants are eight other commercial banks. These banks,
and their total deposits are: The Henderson National
Bank, Huntsville, Ala., with $32.6 million; American
National Bank, Huntsville, Ala., with $7.1 million;
State National Bank of Alabama, Decatur, Ala., with
$163.5 million; Bank of Huntsville, Huntsville, Ala.,
with $4.2 million; Peoples' National Bank, Huntsville,
Ala., with $13.9 million; First National Bank of Decatur, Decatur, Ala., with $22.4 million; First State
Bank, Decatur, Ala., with $6.5 million; and First National Bank of Athens, Athens, Ala., with $6.8 million.
At the present time, the Farmers & Merchants
Bank is unable to compete effectively with these other
institutions. In the last few years, the bank has shown
substantial losses. Its capital has been depleted and no
dividends have been earned or paid for several years.
Management and the board of directors have been
unable to correct the problems facing this bank.

108




Though the service areas of the applicants overlaj
to some extent, the proposed merger will not substan
tially affect competition in the area. Any business tha
the First National Bank derives from the Madisor
community is unsolicited and results from the inability
of the Farmers & Merchants Bank to supply the banking needs of the Madison residents. The proposec
merger, therefore, rather than eliminating a banking
alternative, will supply the public with a more viabk
and convenient financial institution.
Consummation of the proposed merger would provide the customers of the Farmers & Merchants Ban!
with numerous new services: automated accounting,
trust department services, and better installment loar
programs, billing services, credit cards, and auditing
department services. Moreover, the lending limit wil
be increased from $23,000 to more than $500,000.
Applying the statutory criteria, we conclude that the
proposal is in the public interest, and the applicatior
is, therefore, approved.
AUGUST 22,

1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

The area which would be primarily affected by the
proposed merger is Madison County, where both ol
the participating banks are located. Madison Count)
had a 1960 population of 117,000, but has since growr
significantly. Madison County is presently being servec
by seven banks with 21 banking offices.
First National's main office in Huntsville is abou
10 miles distant from Farmers Bank's single office ir
Madison and there are no intervening offices. Hunts
ville and Madison are contiguous and highway con
nections between them are excellent. Consequently, ii
would appear that there is some competition betweer
the merging banks which would be eliminated by th<
merger.
First National is the largest of the six Huntsville
banks. It accounts for approximately 42 percent o
Madison County's IPC demand deposits. This already
dominant position would be further enhanced by th<
proposed merger, which would increase its marke
share by about 1 percent.
While Farmers Bank's recent losses indicate that i
is encountering certain difficulties, the application doe
not contain any information that would indicate tha
its problems could not be solved by means other thai
merger with the largest bank in the area.

THE FIRST NATIONAL BANK OF WASHINGTON, WASHINGTON, N.J., AND THE HACKETTSTOWN NATIONAL BANK, HACKETTSTOWN, N.J.
Banking offices
Total assets

Name of bank and type of transaction

In operation

The Hackettstown National Bank, Hackettstown, N J . (1259), with
and The First National Bank of Washington, Washington, N J . (360), which had.
merged Oct. 11, 1968, under charter of the latter bank (860) and title "The..
Warren County National Bank." The resulting bank at date of merger had

COMPTROLLER'S DECISION

On July 12,1968, The First National Bank of Washington, Washington, N.J., and The Hackettstown National Bank, Hackettstown, N.J., applied to the Comptroller of the Currency for permission to merge under
the charter of the former and with the title of "The
Warren County National Bank."
The First National Bank of Washington, with IPC
deposits of approximately $15.8 million, was chartered
in 1864 and reorganized under its original charter in
1933. It serves the southern portion of Warren County
and the northern portion of Hunterdon County from
its one office. The area is rural and largely devoted to
dairy and produce farming. Washington, N.J., is primarily a residential community.
The Hackettstown National Bank, with IPC deposits of approximately $8.8 million, was organized in
1855 as a State bank and became a National bank in
1865. The bank operates one branch office in Hackettstown. The bank is presently servicing the northern portion of Warren County, the southern portion of Sussex
County, and the western portion of Morris County.
Hackettstown, a residential community, is the center of
a general area experiencing industrial and residential
growth.
Warren County presently has 10 banks operating a
total of 17 offices. The charter bank ranks second in
size, and the merging bank, ninth. The resulting bank
will be the largest bank in the county, but only $8
million larger than its nearest competitor in the county,
and smaller than five other banks located on the edges
of its service area. As the merging banks are 13 miles
apart, competition between them appears to be insignificant. Therefore, the proposed merger will not reduce competition.




$11,676,992
21, 524, 032

To be operated

2
1

33, 201, 024

3

This merger, besides solving the management and
other internal problems vexing the merging bank, will
create a stronger and more competitive institution in
this growing market. It will bring to the residents of
Hackettstown an institution more responsive to their
needs.
Applying the statutory criteria, it is concluded that
the proposal is in the public interest. The application
is, therefore, approved.
SEPTEMBER 6,

1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

Washington (population 5,700) and Hackettstown
(population 5,300) are both located in Warren County,
whose economy is characterized by a mix of agricultural and industrial activity. About half the land
in this county is used for agriculture.
Washington National is the larger of the two banks
operating in Washington, and Hackettstown National,
the smaller of the two banks operating in Hackettstown. Although the main offices of the applicant banks
are located about 13 miles apart, with no banks in
the intervening area, there appears to be relatively
little direct competition between them. Moreover, since
New Jersey law forbids de novo branching into another municipality where a bank maintains its head
office, neither bank can be considered a potential de
novo entrant into the service area of the other.
Warren County is now served by 10 banks operating 17 offices. As of June 30, 1966, Washington
National, with the second largest share of county IPC
demand deposits, held 15.1 percent of such deposits
and Hackettstown National held 8.7 percent. The two
largest banks held 32.4 percent of such deposits. As
noted above, however, the banks do not appear to
be operating in significant direct competition with each
other, despite location in the same county.

109

SURETY NATIONAL BANK, ENCINO, CALIF., AND CIVIC NATIONAL BANK, MARINA DEL REY, CALIF.
Banking offices
Total assets

Name of bank and type of transaction

In operation

Civic National Bank, Marina Del Rey, Calif. (15323), with
and Surety National Bank, Encino, Calif. (15369), which had
merged Oct. 18, 1968, under charter and title of the latter bank (15369). The
resulting bank at date of merger had

COMPTROLLER'S DECISION

On June 7, 1968, Civic National Bank, Marina Del
Rey, Calif., and Surety National Bank, Encino, Calif.,
applied to the Comptroller of the Currency for permission to merge under the charter and with the title
of the latter.
Surety National Bank, with IPC deposits of $11.2
million, was chartered in 1964 and presently operates
one branch office in Reseda. Although profits in this
bank have been satisfactory and its growth has been
good, it now appears to have reached a plateau. Its
experienced personnel have made it one of the most
aggressive and progressive new banks in the Los Angeles area, offering most of the usual banking services,
except a trust department. It does not, however, furnish the more specialized services that large statewide
and regional branch banking institutions provide.
The Surety National Bank serves that portion of Los
Angeles located in the northwest near the San Fernando Valley. Encino, the site of the charter bank's
home office, is located within the corporate limits of
the city of Los Angeles, approximately 20 miles from
downtown Los Angeles. Reseda is 4 miles north of
Encino. The area served by this bank is principally
residential and contains a population estimated at
120,000. There is little industry or commercial activity.
Local residents, mainly white-collar workers who commute throughout the greater Los Angeles metropolitan
area for employment, enjoy a median family income
of $10,000 per year.
Competing banks in the service area of the charter
bank include the Bank of America, with three branches
in the area; First Western Bank and Trust Company,
Los Angeles, Calif., with two branches; Independence
Bank, Canoga Park, Calif., with one branch; Republic
National Bank, Beverly Hills, Calif., with one branch;
and Union Bank, Los Angeles, Calif., with six branches.
Additional competition is furnished by numerous
offices of savings and loan associations, credit unions,
sales finance companies, personal loan companies,
110




$7, 182, 078
15,344,095
23, 496, 407

To be operated

2
2
4

mortgage companies, factors, and lending agencies of
the Federal Government.
The merging Civic National Bank, with IPC deposits of $6 million, was chartered and opened for
business in 1964. In addition to its head office, located
in the unincorporated community of Marina Del Rey,
20 miles west of downtown Los Angeles, it operates
one branch office in downtown Los Angeles near the
Civic Center. The beach community of Marina Del
Rey is a resort and recreation area, which has a permanent population of 10,000 and a summer population of 30,000. The Civic Center Office is located in
downtown Los Angeles in the city's "Little Tokyo"
area, which includes warehouses and import firms
dealing in Japanese goods.
Competing in the service area of the head office of
the Civic National Bank are seven branches of the
Bank of America, a branch of the Bank of Tokyo of
California, a branch of Centinela Valley Bank, a
branch of City National Bank, Beverly Hills, Calif.,
two branches of Crocker-Citizens National Bank, a
branch of Fidelity Bank, a branch of Imperial Bank,
a branch of Santa Monica Bank, and six branches of
Security Pacific National Bank. Competing in the service area of the Civic Center branch of Civic National
Bank are two branches of the Bank of America, a
branch of the Bank of Tokyo of California, the head
office of the Cathay Bank of Los Angeles, a branch
of Crocker-Citizens National Bank, four branches of
Security Pacific National Bank, and a branch of the
United States National Bank. Several foreign banks
also have offices in this area.
Banking competition in the service areas of the participating banks will be unaffected by the merger.
Since the nearest offices of these two banks in this
highly urbanized area are 15 miles apart, there is no
competition between them. The merger will not result
in the elimination of an existing banking alternative.
This merger will be in the public interest. Not only
will it eliminate the numerous problems confronting
the merging bank, but it will also strengthen the acquiring bank. The resulting institution will have a

broader earning base and an improved capital structure, enabling it to serve its customers more effectively
and more competitively.
Considered in the light of the statutory criteria, this
merger is deemed to be in the public interest. The application is, therefore, approved.
SEPTEMBER 4,

1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

The offices of the applicant banks are located in
communities within Los Angeles County. The closest
offices of the applicant banks are 15 miles apart, and
both compete with numerous other banks, including

the large California branch bank networks. Thus, the
banks would not appear to be in direct competition.
Furthermore, neither of the applicants would appear
to be likely de novo entrants into each other's localized
service areas.
The combination of the applicant banks would have
little effect on concentration; their combined offices
currently hold only 0.1 percent of the total deposits
in the Los Angeles SMSA. By contrast, thefivelargest
California branch networks in the SMSA hold 85 percent of total deposits.
We believe that the proposed merger of Civic and
Surety banks would have no significant effect on
competition.

FIRST NATIONAL CITY BANK, NEW YORK, N.Y., AND THE CITY BANK OF NEW YORK, N.A., NEW YORK, N.Y.
Banking offices
Name of bank and type of transaction

Total assets
In operation

First National City Bank, New York, N.Y. (1461), with
$15,356,960,771
and The City Bank of New York, N. A., New York, N.Y. (1461), which had
255, 000
merged Oct. 31, 1968, under charter of the latter bank (1461) and title "First
National City Bank." The resulting bank at date of merger had
15, 356, 968, 574

COMPTROLLER'S DECISION

On July 31, 1968, First National City Bank, New
York, N.Y., applied to the Office of the Comptroller
of the Currency for permission to merge into The
City Bank of New York, N.A. (organizing), New York,
N.Y., under the charter of the latter and with the
title of the former.
The First National City Bank, the merging bank
with IPC deposits of $5.6 billion, was initially chartered in 1812. As of June 30, 1968, the bank ranked
as the second largest bank in the world in terms of
total assets. The overall condition and management
of the bank is excellent. It enjoys a prominent position
in banking, particularly in the international area, and
its prospects for future earnings are excellent.
The City Bank of New York, N.A., is now in the
process of organizing. This bank is a wholly owned
subsidiary, except for directors' qualifying shares, of
First National City Corporation. The reason for its
organization is to facilitate the transfer of ownership
of the merging bank to the First National City Corporation, which will, on consummation of the merger,
become a one-bank holding company.
Because this proposal involves only one operating




To be operated

170
0
170

bank, it cannot possibly have any effect on competition between the participants.
This proposal is deemed to be in the public interest.
It will, through this corporate restructuring, enable
the participants to strengthen their banking and related services in both the domestic and international
markets. Such improved services will redound to the
benefit of their present and potential customers at
home and abroad.
This proposal promotes the public interest without
lessening competition. The application is, therefore,
approved.
SEPTEMBER 19,

1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

First National City Bank, the third largest commercial bank in the United States, proposes to merge
with and under the charter of The City Bank of New
York, National Association, a newly organized and
presently inoperative bank; the latter is wholly owned
by First National City Corporation.
Since the proposed transaction is a way to form
a one-bank holding company and merely involves a
change in the corporate structure of the bank, it will
not affect competition.
Ill

THE BANK OF CALIFORNIA, N.A., SAN FRANCISCO, CALIF., AND SEQUOIA NATIONAL BANK OF SAN MATEO COUNTY, REDWOOD CITY,
CALIF.
Banking offices
Name of bank and type of transaction

Total assets
In operation

Sequoia National Bank of San Mateo County, Redwood City, Calif. (15341), with,
and The Bank of California, N.A., San Francisco, Calif. (9655), which had
merged Oct. 31, 1968, under charter and title of the latter bank (9655). The
resulting bank at date of merger had

COMPTROLLER'S DECISION

On June 28, 1968, Sequoia National Bank of San
Mateo County, Redwood City, Calif., and The Bank
of California, N.A., San Francisco, Calif., applied to
the Office of the Comptroller of the Currency for permission to merge under the charter and with the title
of the latter.
The charter bank, The Bank of California, N.A.,
was established on July 5, 1864, with headquarters in
San Francisco. Its IPC deposits of $1 billion place it
sixth in size among the commercial banks in California.
In addition to the 43 communities in all sections of
California in which it has branches, this bank serves
Seattle and Tacoma in the State of Washington and
Portland in the State of Oregon. In all, the charter
bank operates 68 branches. This bank, which has
experienced good deposit growth over the last 10 years,
offers a wide range of services, including international
banking, fiduciary activities, and insurance premium
financing, as well as such specialized services as advice
on conducting payroll departments, accounting supervisory services, economic research services, public relations, and advertising supervisory services.
The overall service area of the charter bank includes
the three-State Pacific Coast Region of Washington,
Oregon, and California. The diverse elements contributing to the expanding economy of this area are farming, lumbering, oil production, military activities, recreation, manufacturing, assembly and distribution,
construction, shipping, and education. The economic
growth of this region is reflected by its population
figures. The three States had a population of 20.5 million in 1960, 24.6 million in 1967, and is expected to
increase to 29 million persons by 1975.
Although it operates offices in Washington and Oregon, the bulk of the charter bank's business is centered
in the State of California, a heavily populated State.
Its well-balanced economy has grown rapidly in the
past and continues to do so, in terms of population, em112




$14,217,261
1, 752, 081, 514
1, 763, 889, 630

To be operated

1
65
66

ployment, and income level. The State's population has
nearly doubled since 1950, when it stood at 10.6 million. Present population is near 20 million, and it is
estimated to increase to 24 million persons by 1975.
The principal concentration of the charter bank's
activity is in and around the city of San Francisco,
the location of its corporate headquarters.
The Sequoia National Bank of San Mateo County,
Redwood City, Calif., with IPC deposits of $11.4
million, opened for business on June 22, 1964. It offers
most of the usual banking services, with the exception
of trust services. It does not, however, offer some of the
more sophisticated data processing and other customer
services that the large banks provide.
The market area of the Sequoia National Bank of
San Mateo County coincides generally with Redwood
City, Calif., a residential suburban community located
25 miles southeast of San Francisco. Redwood City has
a population of 61,000 and contains numerous small
warehousing and manufacturing concerns. Many residents commute to places of employment in San Francisco. Prospects for future economic growth in this area
are favorable.
Competing in the merging bank's service area are
offices of the largest statewide banking institutions, as
well as many offices of other financial institutions.
Within 3 miles of the Sequoia National Bank of San
Mateo County are 18 competing offices. Deposits in
these banking offices aggregate over $344 million. Of
these, the merging bank holds only 3.5 percent of banking deposits. The two closest offices of the charter bank,
which are located in San Carlos and Menlo Park, respectively 2 and 3 miles away from the merging bank,
hold only 4.6 percent of aggregate deposits. Six
branches of the Bank of America National Trust and
Savings Association, the largest bank in the State,
hold 45 percent of the area's banking deposits, while
five branches of the Wells Fargo Bank, San Francisco,
hold 37 percent. Crocker-Citizens National Bank, an-

other statewide institution, also operates in the area.
Nonbank financial institutions in Redwood City include four offices of savings and loan associations, 12
loan companies, and five real estate loan companies.
Although the nearest branch offices of The Bank of
California, N.A., are only 2 and 3 miles from Redwood
City, there is little direct competition between the two
banks, because of the presence of intervening offices of
other aggressive banks.
The merging bank, with its single office, low lending
limit, and lack of specialized services,findsitself unable
to compete for the new banking business generated by
the relocation of small industrial and manufacturing
concerns into the Redwood City area. The proximity
of the branch systems of the statewide California banks
and the intensity of the competition they generate highlight the limitations of the merging bank. The resulting
bank will offset these unfavorable factors. It will bring
to the community another large bank offering a wide
range of banking services to meet the needs of this industrial community, including international banking
and foreign exchange, credit analysis, a multiple
branch office system for customer convenience in San
Francisco and Los Angeles, as well as in the States of
Washington and Oregon.
Considered in the light of the statutory criteria, this
merger is judged to be in the public interest, and is,
therefore, approved.
SEPTEMBER 4,

1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

Redwood City, part of the San Francisco-Oakland
SMSA, is located 25 miles southeast of San Francisco,
in San Mateo County. Its market area includes San
Carlos, 3 miles to the northwest, and adjacent unincorporated towns, whose economy is based on manufacturing, wholesale and retail trade, services, and
Government operations.
Bank of California operates two branches which are
close to Sequoia's office, one in San Carlos and the second in Atherton (each about 4 miles from Redwood
City). However, four large banks, Bank of America,
Wells Fargo, Crocker-Citizens, and United California,
operate branches in the intervening area, including in
Redwood City itself. Thus, there would appear to be
some direct competition that would be eliminated by
this merger, but it may not be substantial. Additional
direct competition would result if Bank of California
were to enter Redwood City de novo, and this possibility would be permanently foreclosed by the proposed
merger.
The proposed merger would have some effect upon
concentration in San Mateo County, a rough approximation to the market of Sequoia Bank. As of June
1966, the Bank of California held about 6 percent of
all IPC demand deposits in this market, while Sequoia
Bank held V/2 percent. However, the two largest
banks in this county each hold about 36 percent of these
deposits.

THE FIRST NATIONAL BANK OF OELWEIN, OELWEIN, IOWA, AND ORAN SAVINGS BANK, ORAN, IOWA
Banking offices
Name of bank and type of transaction

Total assets
In operation

Oran Savings Bank, Oran, Iowa, with
and The First National Bank of Oelwein, Oelwein, Iowa (5778), which had
merged Oct. 31, 1968, under charter and title of the latter bank (5778). The
resulting bank at date of merger had

COMPTROLLER'S DECISION

On February 14, 1968, the Oran Savings Bank,
Oran, Iowa, with IPC deposits of $1.1 million, and The
First National Bank of Oelwein, Oelwein, Iowa, with
IPC deposits of $11.7 million, applied to the Comptroller of the Currency for permission to merge under
the charter and with the title of the latter.




$1,454,957
16, 672, 505
18,017,321

To be operated

1
2
3

The First National Bank of Oelwein was established
in 1899 and presently operates a head office in Oelwein
and a single branch office inWestgate, 4 miles north of
Oelwein. Oelwein, with a population of 8,500 is located
in Fayette County in the northern part of the State:
It is serviced by two banks, the Oelwein State Bank
and the charter bank. The economy is largely agricultural, though in Oelwein there are several small in113

dustries, including a shop of the Chicago Great Western
Railroad Company.
The Oran Savings Bank, the merging bank, was
organized in 1910. It operates its sole office in Oran,
an agricultural township of 150 persons, 12 miles from
Oelwein.
Competing in the primary service area of the two applicants are eight other banking units and several sales
finance companies, personal loan companies, and credit
unions. The other banks in the area and their total
IPC deposits are the Arlington State Bank, Arlington,
Iowa, with $2.6 million; Union Bank and Trust Company, Strawberry Point, Iowa, with $5.7 million;
Maynard Savings Bank, Maynard, Iowa, with $3 million; Fairbank State Bank, Fairbank, Iowa, with $8.6
million; First National Bank, Summer, Iowa, with $7.6
million; Citizens State Bank, Hawkeye, Iowa, with $1.9
million; and the Readlyn Savings Bank, Readlyn,
Iowa, with $2.2 million.
The impact of the merger on banking competition
in the area will be slight. Because of the 12 miles separating the merging banks, there is little competition
between them. Although the charter bank is now the
largest in the area, its competitive position will not be
appreciably strengthened by the merger.
Consummation of the proposed merger would provide loan customers of the Oran Savings Bank with the
larger lending limits of The First National Bank of
Oelwein and deposit customers with Federal Deposit
Insurance. Moreover, the services of the charter bank's
trust department would be made available to customers
in the Oran area.
Applying the statutory criteria, we conclude that the

proposal is in the public interest, and the application
is, therefore, approved.
JULY 12,

1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

The subject proposal would merge First National
Bank of Oelwein, the largest commercial bank in terms
of deposits in Fayette County and surrounding area,
with Oran Savings Bank, the area's smallest commercial bank.
Oelwein (1960 population 8,282) and Oran (1960
population 170) are situated in the southwestern corner of Fayette County (1960 population 28,581) in
the northeastern section of Iowa. Agriculture and agriculture-supported industries are the major sources of
income to Fayette County residents. Fayette County is
served by 11 commercial banks operating 14 offices.
There are no banking offices in the intervening 10
miles between the main offices of the merging banks.
Therefore, it seems clear that there is some competition
present between the two banks which would be eliminated by consummation of the proposed merger.
Oelwein Bank accounts for about 31 percent of
Fayette County total deposits and for some 30 percent
of the County's IPC demand deposits. Following consummation of the proposed merger, Oelwein Bank
would control 34 percent of both county total and IPC
demand deposits. However, because of the small size of
both the acquired bank and the market to be affected,
plus the number of banking alternatives which will
remain available to residents of the Oelwein-Oran
area, we conclude that the overall effect of this transaction on banking competition in Fayette County will
probably not be significantly adverse.

THE MECHANICKS NATIONAL BANK OF CONCORD, CONCORD, N.H., AND THE FIRST NATIONAL BANK OFHILLSBOROUGH, HILLSBORO, N.H,
Banking offices
Total assets

Name of bank and type of transaction

In operation

The First National Bank of Hillsborough, Hillsboro, N.H. (1688), with
and The Mechanicks National Bank of Concord, Concord, N.H. (2447), which
had
merged Oct. 31, 1968, under charter and title of the latter bank (2447). The
resulting bank at date of merger had

COMPTROLLER'S DECISION

On July 31, 1968, The Mechanicks National Bank
of Concord, Concord, N.H., applied to the Comptroller of the Currency for permission to merge with The
114




$6, 023, 001

1

20, 345, 484

To be operatec

3

26, 305, 301

A

First National Bank of Hillsborough, Hillsboro, N.H.
under the title and with the charter of the former
The Mechanicks National Bank of Concord, the
charter bank, with IPC deposits of approximately $12.7
million, was organized in 1880 as a National bank.

It is the smaller of the two commercial banks operating in Concord. In addition to its main office, the
charter bank operates two branches.
The First National Bank of Hillsborough, the merging bank, with IPG deposits of approximately $4.4 million, was organized in 1868 as a National bank. It is
the only banking institution in Hillsboro. The nearest
banking alternatives for the local residents are branches
of The Mechanicks National Bank of Concord and
The New Hampshire Savings Bank of Concord, located
in the town of Contoocook, a distance of 14.2 miles.
The bank operates no branch offices.
As the two banks are located in different service
areas, the proposed merger will not substantially reduce
competition. On the other hand, a more capable institution will be realized as a result of the merger. The
areas served by the two banks are increasing in population and are being economically stimulated by industrial expansion. The services offered by each bank
complement those offered by the other and, as a merged
institution, they could better meet the increasing loan
demands being made upon them.
Applying the statutory criteria, it is concluded that
the proposal is in the public interest, and the application is, therefore, approved.
SEPTEMBER 24,

1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

Mechanicks National (total deposits of $14.6 million), the smaller of two banks in Concord, proposes
to merge with Hillsborough National (total deposits
of $4.7 million), which is located 25 miles to the east
of Concord in Hillsboro.
Hillsborough National is the only bank located
within 21 miles of Hillsboro, and there are no banks in
the intervening area between the offices of Hillsborough
National and Mechanicks National. In Concord, there
are two commercial banks, of which Mechanicks National is the smaller, and two savings banks.
The applicant banks have had a common ownership since October 1, 1960, when a group of Mechanicks National's stockholders owning about 46 percent
of its stock, purchased controlling interest (72 percent)
in Hillsborough National. Since that time the two
banks have participated in loans and generally operated
in close affiliation.
Since the applicant banks have been closely affiliated
by virtue of a common ownership that has existed for
several years, the proposed merger will not result in
the elimination of any effective competition between
them which would otherwise exist. However, the merger will foreclose the possibility of such competition
should such common ownership be dissipated in the
future.

THE SAFETY FUND NATIONAL BANK OF FITCHBURG, FITCHBURG, MASS., AND THE FIRST NATIONAL BANK OF GARDNER, GARDNER,
MASS.

Banking offices
Name of bank and type of transaction

Total assets
In operation

The Safety Fund National Bank of Fitchburg, Fitchburg, Mass. (2153), with
and The First National Bank of Gardner, Gardner, Mass. (884), which had
consolidated Oct. 31, 1968, under charter of the former bank (2153) and title
"First Safety Fund National Bank." The resulting bank at date of consolidation had.

COMPTROLLER'S DECISION

On July 8, 1968, The Safety Fund National Bank
of Fitchburg, Fitchburg, Mass., and The First National Bank of Gardner, Gardner, Mass., applied to the
Office of the Comptroller of the Currency for permission to consolidate under the charter of the former
and with the title of "First Safety Fund National
Bank."
The Safety Fund National Bank of Fitchburg, with
IPC deposits of $18.9 million, was chartered in 1874




$30, 721, 009
13, 655, 612
44, 376, 621

To be operatea

3
2
5

and presently operates two branch offices in Fitchburg.
Its capital is adequate; its assets are sound; its operation is efficient; and its earnings have been good.
Fitchburg, Mass., with a population of 43,100, is
located in the north-central part of the State, approximately 50 miles northwest of Boston and 25 miles north
of Worcester, the largest city in Worcester County,
wherein both applicant banks are situated. Fitchburg
is an industrial city, which acts as the trade center for
the surrounding communities. While the population
115

of Fitchburg proper has remained static in recent years,
that of the surrounding communities has increased.
In 1966, 91 manufacturing firms employed 10,300 persons with an annual payroll of about $65.5 million.
The principal manufacturers are the fabricated metal
products industry, the paper and allied products industry, and the heavy machinery industry. Second in
importance in the economy is wholesale and retail
trade. Farming, which was once a sizeable economic
factor in the areas adjacent to Fitchburg, has substantially decreased in importance, until it now represents under 1 percent of local employment
The First National Bank of Gardner, with IPG deposits of about $10 million, was organized in 1865.
It operates a single branch located in a shopping center
within the confines of Gardner. Its growth, though
favorable since 1965, has not been dynamic. Its
assets, capital, and earnings appear to be good.
Gardner, Mass, has a population of 19,100 and is
situated some 13 miles west of Fitchburg. Gardner's
general background and recent economic trends parallel that of Fitchburg. Like Fitchburg, Gardner's
population has remained static, while that in the surrounding communities has increased. While Gardner
is also an industrial town, with furniture its leading
product, wholesale and retail trade contribute significantly to its economic base. Industries in Gardner, like
the industries in Fitchburg, have been characterized
by expansion, resulting in the need for larger loan limits
on the part of the applicant banks.
The Safety Fund National Bank, with total deposits
of $22.3 million, is the fourth largest commercial bank
in Worcester County, while The First National Bank
of Gardner, with total deposits of $10.8 million, ranks
sixth. The three largest banks in the county are the
$255 million Worcester County National Bank, the
$119.3 million The Guaranty Bank and Trust Company, and the $73.6 million Mechanics National Bank.
Direct competition is offered to the applicant banks by
the Worcester County National Bank with two offices
located in Fitchburg, two offices located in Gardner,
and one office each in Ashburnham, Westminster, and
Templeton. Other competition is offered in the service
areas of the applicant banks by savings banks, savings
and loan associations, public credit unions, and finance
companies. In addition, the major commercial banks
of Boston and New York compete actively in the area,
with their primary emphasis directed toward the larger
industrial concerns.
Consummation of this proposal would have no detrimental effect on competition between the two banks,
because such competition is presently minimal. More116




over, the consolidation would enable the resulting bank
to compete more effectively with the Worcester County
National Bank and the Guaranty Bank and Trust Company. The resulting bank would account for only 6
percent of the deposits held by all commercial banks in
the county and will be the fourth largest bank in the
county, the position presently occupied by the Safety
Fund National Bank in Fitchburg.
This consolidation will benefit the public by enabling the resulting bank to offer services that neither
bank can presently provide. Among the new services
that will be made available to the public are an automated program of customer services, floor planning for
equipment and auto dealers, and a common trust fund
for the trust department. The problem of management
succession, which many banks face, will be solved by
an increase in executive depth; the size of the consolidated bank will make it easier to attract and retain key
personnel. Finally, the merger will provide the resulting
institution with a larger lending limit enabling it better to supply the needs of its customers for large-scale
financing.
Having weighed the application against the statutory criteria and having determined that the merger is
in the public interest, it is, accordingly, approved.
SEPTEMBER 16,

1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

Gardner (population 20,000) is approximately 13
miles due west of Fitchburg (population 45,000) in
the northern part of Worcester County (population
585,000), about 46 miles northwest of Boston,
Worcester County borders New Hampshire on the
north and Connecticut and Rhode Island on the south
and clearly overstates the market that would be affected by this merger. Gardner, Fitchburg, and Leominster are the population centers of the northern pari
of Worcester County. Both Gardner and Fitchburg are
heavily industrialized towns and trading centers. The
economic prospects of this region appear to be good
especially in light of the construction of a major northsouth freeway in the area.
The merging banks are located approximately 12
miles apart. The only other bank operating in Fitchburg, Gardner, or the intervening area is Worcestej
County National Bank, the largest bank in the county
with total deposits of $255 million, and eight office;
in northern Worcester County. In these circumstances
there would appear to be some competition betweei
the merging banks for customers in this intervening

area and for some customers in Gardner and Fitchbwg
as well; this competition would be eliminated by this
merger.
In the market of northern Worcester County, consisting of Gardner, Fitchburg, the intervening town of
Westminster, and the contiguous towns of Ashburnham, Winchedon, Templeton, Hubbardston, Leominster, and Lunenburg, and the towns of Athol, Royalston,
Phillipson, and Princeton, there were eight banks operating 17 offices as of June 30, 1966. In this market,
Safety Fund had the second largest share, or 26 percent of IPG demand deposits and First National had
the third largest share or 10 percent. After merger,
the new bank, with 36 percent, would have the largest
share of such deposits in this market and two banks
would have about 70 percent of such deposits.
Since, for some customers, a bank located 13 miles
away may not be an adequate substitute for a local
banking office, figures relating to banking concentration in northern Worcester County may overstate the
effect this merger would have on existing competition
and concentration. However, if Gardner and Fitchburg are viewed as separate markets, then this merger

would eliminate Safety Fund and First National as
potential entrants into each other's market.
Under Massachusetts law, banks are permitted to
branch de novo only within the county in which the
principal office of the bank is located. Neither of the
banks involved in this proposed consolidation has
branched outside the city in which its head office is
located; however, considering the sizes and viability of
the merging banks, and the fact that both cities appear
to be of a size that could support more than two banks
and are industrial and trading centers of a growing
area, we believe that both Safety Fund and First National can be regarded as likely potential entrants into
each other's city by way of de novo branching.
Consummation of this merger would eliminate some
direct competition between the merging banks and
substantially increase concentration in a 13-town area
in northern Worcester County. For customers who depend on local banking offices, this merger would have
an adverse effect by eliminating probably de novo entrants into both Gardner and Fitchburg. Thus, the effects of the merger on competition would be substantially adverse.

THE FIRST NATIONAL BANK OF WILLIAMSPORT, WILLIAMSPORT, PA., AND THE DANVILLE NATIONAL BANK, DANVILLE, PA.
Banking offices
Name of bank and type of transaction

Total assets
In operation

The First National Bank of Williamsport, Williamsport, Pa. (175), with
and The Danville National Bank, Danville, Pa. (1078), which had
consolidated Nov. 1, 1968, under charter of the former bank (175) and title
"Fidelity National Bank of Pa." The resulting bank at date of consolidation
had

COMPTROLLER'S DECISION

On July 1, 1968, The First National Bank of Williamsport, Williamsport, Pa., applied to the Comptroller of the Currency for permission to consolidate with
The Danville National Bank, Danville, Pa., under the
charter of the former and with the title "Fidelity
National Bank of Pa."
The First National Bank of Williamsport, the charter
bank, with IPC deposits of $26.2 million, was chartered
in 1863 and reorganized in 1933. It presently operates
its main office and one branch office in Williamsport.
This bank, capably supervised by an experienced staff,
is the smallest of the three banks located in
Williamsport.




$32, 968, 320
14, 956, 831
47, 925, 151

To be operated

2
1
3

Williamsport, the county seat of Lycoming County,
has a stable economy based on a diversity of industry
located within the city and on its status as the trading
center for Lycoming County and parts of adjoining
counties. It is the largest city in north-central Pennsylvania and serves as an economic and social center. Two
colleges, located within the city, help to create a wellrounded community. Although Williamsport has declined in population, the surrounding areas have gained
residents.
The Danville National Bank, with IPC deposits of
$10.5 million, was organized in 1848 and operates its
one office in Danville, Pa. Its active management is
concentrated in its president, who joined the bank in
117

1957 as a director, and became chief executive officer
7 years later.
Danville, located 35 miles southeast of Williamsport,
is the county seat of Montour County, and heretofore
serviced an agricultural economy. In recent years, a
number of manufacturing concerns have been established in the area.
The primary purpose of this consolidation is to develop a regional bank with sufficient resources to meet
the encroachment of larger competitor banks moving
into the general area from Wilkes-Barre to the east and
from Pottsville to the southeast. The blending of the
banking talents of The First National Bank of Williamsport with the aggressiveness of The Danville
National Bank's management should create an institution that will have the potential of developing into an
effective competitor. Surplus monies generated in the
Williamsport area can be deployed in the capital-short
market of Danville. The distance between the two
banks is great enough to dispel any concern over the
competitive impact of this consolidation.

This proposal promotes the public interest without
lessening competition. The application is, therefore,
approved.
SEPTEMBER 20,

1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

First National is located 35 miles northwest of Danville National. In view of this distance and the existence
of several banks in the intervening area, it does not
appear that any competition between the two banks
would be eliminated by this merger.
The merging institutions operate in contiguous
counties and Pennsylvania law permits the opening of
branch offices in such counties. However, the service
area of Danville National (Montour County) is presently served by Danville National and the First
National Bank of Danville, another unit bank of approximately the same size as Danville National. Given
the size of the market, the incentive to First National
to branch there de novo would not appear very strong
at this time.

THE NATIONAL VALLEY BANK OF STAUNTON, STAUNTON, VA., AND STAUNTON BANK, N.A., STAUNTON, VA.
Banking offices
Name of bank and type of transaction

Total assets
In operation

The National Valley Bank of Staunton, Staunton, Va. (1620), with
and Staunton Bank, N.A., Staunton, Va. (1620), which had
merged Nov. 1, 1968, under charter of the latter bank (1620) and title "The
National Valley Bank of Staunton." The resulting bank at date of merger had. . .

COMPTROLLER S DECISION

On May 20, 1968, The National Valley Bank of
Staunton, Staunton, Va., and the Staunton Bank, N.A.
(organizing), Staunton, Va., applied to the Comptroller of the Currency for permission to merge under the
charter of the latter and with the title of the former.
The National Valley Bank of Staunton, with total
assets of $23 million, is a single-office bank which was
chartered and opened for business in 1865. Its deposits
have increased from $16.8 million in 1963 to $19.7
million in 1967; its capital structure is adequate; and
its earnings history for the past 5 years has been good.
Future earnings prospects of the resulting bank are
considered to be very favorable.
Staunton Bank, N.A., is being organized for the sole
purpose of providing a vehicle to transfer ownership
118




$24, 163, 147
128, 600
24, 291, 747

To be operated

1
0

1

of The National Valley Bank of Staunton to a holding
company, United Virginia Bankshares, Inc. Staunton
Bank, N.A., will not be an operating commercial bank
prior to the merger.
Because the proposed merger involves only one operating bank, there can be no adverse effect on competition resulting from the proposed transaction. This
merger'will provide financial and managerial resources
not otherwise readily available to the merging bank.
It will improve the bank's ability to compete effectively
for new business and will contribute to the economic
growth of the community.
Applying the statutory criteria, it is concluded that
the proposal is in the public interest, and the application is, therefore, approved.
SEPTEMBER 3,1968.

SUMMARY OF REPORT BY ATTORNEY

GENERAL

United Virginia Bankshares, Incorporated, the
largest banking organization in Virginia, proposes to
organize a National bank association with the title
Staunton Bank, N.A., and acquire all its capital stock
(except for directors' shares). As a contemporaneous
transaction the National Valley Bank will be merged
into the newly organized Staunton Bank, N.A. The effect of the transaction will be that the resulting bank
will become an owned and operated subsidiary of
United Virginia Bankshares.
National Valley Bank ("National Valley") was organized as a National bank in 1865. It operates no

branch offices and has no previous history of merger
activity.
The proposed merger of National Valley into the
newly organized Staunton Bank, N.A., will not result
in the elimination of any existing competition. The
proposed merger is only a transaction designed to facilitate the acquisition of the resulting bank by United
Virginia Bankshares. It should be noted that this report is confined to the competitive factors involved in
the proposed merger of National Valley into Staunton
Bank, N.A., and not those involved in the pending application before the Board of Governors of the Federal
Reserve System by United Virginia Bankshares to
acquire the resulting bank.

NORTH CAROLINA NATIONAL BANK, CHARLOTTE, N.C., AND AMERICAN-SECURITY NATIONAL BANK, CHARLOTTE, N.C.

Total assets

Name of bank and type of transaction

Bankin g offices
In operation

North Carolina National Bank, Charlotte, N.C. (13761), with
and American-Security National Bank, Charlotte, N.C. (13761), which had
merged Nov. 4, 1968, under charter of the latter bank (13761) and title "North
Carolina National Bank." The resulting bank at date of merger had

COMPTROLLER'S DECISION

On July 22,1968, the North Carolina National Bank,
Charlotte, N.C, and the American-Security National
Bank (organizing), Charlotte, N.C, applied to the
Comptroller of the Currency for permission to merge
under the charter of the latter and with the title of
the former.
The North Carolina National Bank, headquartered
in Charlotte, N.C, has 83 offices located throughout
the State. This bank, with total resources of $1 billion
and IPC deposits of $727 million, was formed on
June 30, 1960, through the consolidation of Security
National Bank of Greensboro, N.C, and American
Commercial Bank of Charlotte, N.C.
American-Security National Bank is being organized
to provide a vehicle to transfer ownership of the North
Carolina National Bank to the North Carolina National Bank Corporation. American-Security National
Bank will not be operating as a commercial bank prior
to the merger.




$1 ,171 212,710

250,000

To be operated

84
0

1,171, 462, 710

84

Because the North Carolina National Bank is the
only operating bank involved in the proposed transaction, there can be no adverse effect on competition
resulting from consummation of the proposed merger.
The resulting bank will conduct the same banking
business, at the same locations and with the same name,
as previously conducted by the North Carolina National Bank.
Applying the statutory criteria, it is concluded that
the proposed merger is in the public interest, and the
application is, therefore, approved.
OCTOBER 4,1968.
SUMMARY OF REPORT BY ATTORNEY

GENERAL

American-Security National Bank is currently being
organized solely for the purpose of accomplishing a
corporate reorganization of North Carolina National
Bank, and thus presently performs no banking operations. Because the proposed merger involves only the
corporate reorganization of a single existing bank, it
will have no effect on competition.

119

SAN JOAQJOIN VALLEY NATIONAL BANK, TULARE, CALIF., AND STATE BANK OF CHOWCHILLA, CHOWCHILLA, CALIF.
Banking offices
Name of bank and type of transaction

Total assets
In
operation

State Bank of Chowchilla, Chowchilla, Calif., with
was purchased Nov. 8, 1968, by San Joaquin Valley National Bank, Tulare,
Calif. (15357), which had
After the purchase was effected, the receiving bank had

COMPTROLLER'S DECISION

On July 15, 1968, the San Joaquin Valley National
Bank, Tulare, Calif., applied to the Comptroller of
the Currency for permission to purchase the assets and
assume the liabilities of the State Bank of Chowchilla,
Chowchilla, Calif.
The San Joaquin Valley National Bank, with IPC
deposits of $7 million, was organized in 1964 and
operates its main office in Tulare, Calif. Since its organization, it has opened two branch offices, one in
Porterville, Calif., in 1965 and another in Visalia,
Calif., in 1967. It holds approval to establish a third
branch in Merced, Calif.
The San Joaquin Valley National Bank serves most
of the county of Tulare with a banking office in each
of the county's three major cities. The county is located at the southern end of the San Joaquin Valley,
about half way between San Francisco and Los Angeles. The population of Tulare County at the end of
1967 was 192,800, and is predicted to exceed 207,000
by 1970. Although the county's basic economy is agriculture, industry is expending to offset the loss of jobs
due to agricultural mechanization. Future prospects
indicate strong economic growth for the county.
The State Bank of Chowchilla, with IPC deposits
of $1.9 million, was organized in 1965 and is located
in Chowchilla, Madera County, Calif. It has not
opened any branch offices. It does, however, have an
authorized but unopened branch approved in the city
of Merced, Calif.
The State Bank of Chowchilla serves the northwestern section of Madera County. Chowchilla is the
trade center for the northern section of Madera
County. Agriculture, however, is the most important
factor in the economy of Madera County and the
Chowchilla trade area. Present development of highcash return crops will effectively improve the wealth
of the county by producing more income per acre.
120




To be
operated

$3,114,800

1

10, 381, 786
13,496,586

3
4

During recent years there has been a steady increase in
total volume of retail sales.
Although the general characteristics of the two areas
are similar, the market areas of the San Joaquin Valley
National Bank and State Bank of Chowchilla are
separate and distinct. The nearest offices of each are
approximately 80 miles apart.
The market area served by State Bank of Chowchilla contains six banking offices. These include a
branch of the Bank of America N.T. & S.A. located
in Chowchilla, one block away from the selling bank,
and four banking offices of the State's largest banks
located in Madera, 17 miles to the southwest of
Chowchilla.
In the service area of San Joaquin Valley National
Bank there are 17 existing banking offices. The competing banking offices are all branches of statewide
branch banking institutions; viz, Bank of America
National Trust and Savings Association, CrockerCitizens National Bank, and Security Pacific National
Bank.
In light of this existing competitive structure in the
areas of the participating banks and the distance between them, we find that the proposed transaction will
have no adverse effect on competition. Approval of the
transaction will be beneficial to the public as the resulting bank will be in a better competitive position and
better able to provide services to the customers of both
banks involved.
Applying the statutory criteria to this proposal, it is
found to be in the public interest. The application is,
therefore, approved.
OCTOBER 7,

1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

San Joaquin Bank currently operates all of its offices
in Tulare County. However, it has an application for
permission to establish a branch office in Merced,
Merced County, pending. Chowchilla Bank operates
its head office in Chowchilla, Madera County, and has

approval to open a branch in Merced, 18 miles north
of Chowchilla.
The nearest office of San Joaquin Bank is about 72
miles from the office of Chowchilla Bank. Numerous
offices of other banks are located between the applicant
banks. Thus, the merger would not appear to eliminate any direct competition between the two banks.
Chowchilla is presently served by two banks, Chowchilla Bank and a branch of Bank of America. In
Madera, about 15 miles south of Chowchilla, four of

the large California banks operate branch offices, and
in Merced, five banks operate six offices.
San Joaquin Bank's application for permission to
open a branch office in Merced would indicate that it
is interested in opening, and has the capability to open,
branch offices de novo in the northern section of the
San Joaquin Valley. This has experienced substantial
growth in the last two years, and the Merced-Chowchilla area is similar to the market it is presently
serving.

SECURITY NATIONAL BANK OF LONG ISLAND, HUNTINGTON, N.Y., AND THE SECOND NATIONAL BANK AND TRUST COMPANY OF
HEMPSTEAD, HEMPSTEAD, N.Y.
Banking offices
Name of bank and type of transaction

Total assets
In operation To be operated

The Second National Bank and Trust Company of Hempstead, Hempstead, N.Y.
(11375), with
and Security National Bank of Long Island, Huntington, N.Y. (6587), which had.
merged Nov. 8, 1968, under charter of the latter bank (6587) and title "Security
National Bank." The resulting bank at date of merger had

COMPTROLLER S DECISION

On August 2, 1968, The Second National Bank and
Trust Company of Hempstead, Hempstead, N.Y., with
assets of $23 million, and the Security National Bank
of Long Island, Huntington, N.Y., with assets of $706.5
million, applied to the Comptroller of the Currency
for permission to merge under the charter of the latter
and with the title of "Security National Bank."
The Second National Bank and Trust Company
of Hempstead, the merging bank, was chartered in
1919 and has remained a single-office bank. Notwithstanding its satisfactory earnings, the bank is operating in a very conservative manner and is not meeting
the legitimate credit requirements of the area it
serves.
The village of Hempstead, headquarters of the
merging bank, is located in the central area of Nassau
County and has an estimated population of 39,500.
Its trade area has a population of 107,000. Between
1950 and 1967, the population of Nassau County, of
which Hempstead is the hub, has increased 113 percent; however, the merging bank's deposits have remained relatively unchanged during this period. Light
industry, retail, and service organizations comprise
the economic base of this area.
Security National Bank of Long Island, Huntington, N.Y., was organized in 1903 and presently operates




$22,884,431
762, 647, 871
785, 532, 302

53
54

49 branches, nine of which are located in Nassau
County. Competent management is reflected in the
history of the charter bank's good earnings.
Both charter and merging banks compete in the
highly active banking community of Nassau County.
There are 22 commercial banks in Nassau County
operating 215 offices. As of 1967, the charter bank
ranked eighth and the merging bank ranked 18th in
total deposits. The five largest banks operating branches
in the county are New York City-based institutions.
Also operating in the county are Franklin National
Bank and the National Bank of North America, both
of which are much larger than the charter bank. The
merging bank cannot compete with these large banks,
nor offer their sophisticated services. Competition between applicants is nonexistent because of the distance
between their offices.
This merger will benefit the residents of Hempstead
by bringing to them the convenient services of a larger
bank more able to provide effective banking competition than does the merging bank. By offering expanded
bank resources and sophisticated services, the resulting
bank expects to attract more commercial enterprises
to the Hempstead trading area. Another, though not
the least, of the benefits to be derived from this merger
will be the resolution of the management succession
problem that has been vexing the merging bank.
121

Applying the statutory criteria to this proposal, it
is found to be in the public interest. The application
is, therefore, approved.
OCTOBER 7,

1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

The Security National Bank of Long Island ("Security") operates 36 branches in Suffolk County and
nine in Nassau County.
The village of Hempstead is served by three banks.,
Second National and Hempstead Bank (total deposits,
$125 million) and a branch of First National City
Bank (total deposits, $15 billion). Eight other banks,
including large New York banks, operate 13 offices in
the contiguous towns of West Hempstead, Rockville
Centre, Uniondale, and Garden City.
Security operates a branch 3 miles from the village
of Hempstead, but there are three offices of commer-

cial banks in the intervening area, two of which are
branch offices of Franklin National Bank (total deposits, $2,171 million), one of the largest banks in
Nassau County. Security and Second National have 27
common depositors; Security also has commercial loans
to 13 borrowers in the village of Hempstead and to 24
borrowers in towns contiguous to the village of Hempstead. Thus, there is existing direct competition between Security and Second National which will be
eliminated by this merger.
As of June 30, 1966, Nassau County, which overstates the relevant geographic market, has 21 banks
operating 200 commercial banking offices, and $2.3
billion in deposits. Seven of these banks have total
deposits of over $1 billion. Second National, a unit
bank, has less than 1 percent of county IPC demand
deposits. Thus, the elimination of Second National
would appear to have only a limited effect on banking
competition in this area.

VALLEY NATIONAL BANK OF LONG ISLAND, VALLEY STREAM, N.Y., AND THE HAMPTON BAYS NATIONAL BANK, HAMPTON BAYS, N.Y
Banking offices
Name of bank and type of transaction

Total assets
In operation

The Hampton Bays National Bank, Hampton Bays, N.Y. (12987), with
and Valley National Bank of Long Island, Valley Stream, N.Y. (11881), which
had .
merged Nov. 8, 1968, under charter and title of the latter bank (11881). The
resulting bank at date of merger had

COMPTROLLER S DECISION

On August 13, 1968, the Valley National Bank of
Long Island, Valley Stream, N.Y., and The Hampton
Bays National Bank, Hampton Bays, N.Y., filed an
application with the Comptroller of the Currency for
permission to merge under the charter and with the
title of the former.
Valley National Bank of Long Island was chartered
in 1920, and now holds assets of $143.3 million at its
head office and 19 branches, which are located in
densely populated sections of western Nassau County
and eastern Suffolk County. The charter bank's service area is primarily residential, but it also draws support from light industry, as well as retail and service
occupations. Many of the area residents commute to
work in nearby New York City and its environs.
The Hampton Bays National Bank, Hampton Bays,
N.Y., was chartered in 1926, and now holds assets of $9

122




$9, 714, 282

2

156, 480, 526

To be operatec

20

166, 194, 809

22

million at its main office in Hampton Bays and its one
branch, which is located in East Quoque. Hampton
Bays has a permanent population of approximately
1,900, which is swelled by an estimated 30,000 vacationers in the summertime. East Quoque, with a population of 2,800, lies about 5 miles east of Hampton
Bays. With the exception of some small scale commercial fishing, the area is devoted mainly to those service
and entertainment occupations usually associated with
a resort area. Many of the area's inhabitants commute
to work in Riverhead, the county seat, and to nearby
government and industrial facilities.
There is virtually no competition between the merging banks. Their main offices are located 75 miles
apart and their closest branches are 12 miles apart,
with the offices of five other commercial banks between
them. Nor can it be said to lessen potential competition, since the charter bank, by virtue of the home office
protection rule of New York law, may not establish

a branch in Hampton Bays. This merger will increase
the charter bank's assets by only 6 percent, and leave
its rank unchanged as the 11th largest of the banks
that are headquartered in either of these two counties
or that are headquartered in New York City and
operating branches in one or both of these counties.
It is anticipated that consummation of the merger will
increase the degree of banking competition in the
service area of the merging bank.
When the merger is effected, the banking public
in the service area of the merging bank will benefit
from the increased lending limit of the resulting institution, as well as from the more complete range of
banking services, including dealer and wholesale
financing, that the strength and experience of the charter bank will make possible. In addition, management
continuity will be assured.
Applying the statutory criteria, we conclude that it
is in the public interest, and the application is, therefore, approved.
OCTOBER 7,1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

Valley National Bank of Long Island ("Valley National") operates 20 offices in Nassau and Suffolk
Counties, on Long Island, N.Y. The Hampton Bays
National Bank ("Hampton National") operates two
offices, 4 miles apart, in eastern Suffolk County. The
chief industry here is tourism.
Offices of Valley National are located about 20
miles east and about 15 miles west of the offices of
Hampton National, with several banking offices in the
intervening areas. Thus, it appears that there is little,
if any, competition between the two banks.
Although New York's home office protection law
prevents Valley National from entering Hampton Bays
de novo, and restricts the number of communities available to Valley National, the bank, which operates a
substantial number of offices in Suffolk County, would
appear to be a likely de novo entrant into the Hampton
Bays area. Thus, the proposed merger may eliminate
potential competition between the two banks.

W E L L S FARGO BANK, N.A., SAN FRANCISCO, C A L I F . , AND AZUSA VALLEY SAVINGS BANK, AZUSA, C A L I F . , AND T H E FIRST NATIONAL
BANK O F AZUSA, AZUSA, C A L I F .

Total assets

Name of bank and type of transaction

Banking offices
In operation To be operated

AzusaWalley Savings Bank, Azusa, Calif., with
....
The First National Bank of Azusa, Azusa, Calif. (8065), with
and Wells Fargo Bank, N.A., San Francisco, Calif. (15660), which had
merged Nov. 8, 1968, under charter and title of the latter bank (15660). The
resulting bank at date of merger had

COMPTROLLER'S DECISION

On August 15,1968, the Azusa Valley Savings Bank
and The First National Bank of Azusa, both of Azusa,
Calif., and the Wells Fargo Bank, N.A., San Francisco,
Calif., applied to the Comptroller of the Currency
for permission to merge under the charter and with
the title of the latter.
Wells Fargo Bank, N.A., with IPC deposits of $3.5
billion, is the third largest bank in California. Until
recently, Wells Fargo confined its operations to the
northern part of California. Of its 247 branches, however, five have recently been established in southern
California in the sprawling metropolitan area of Los
Angeles. The charter bank offers a multitude of
modern, specialized banking services designed to meet




$5,824,617
5, 718, 186
5, 207, 648, 016
5, 219, 127, 819

1
1
250
251

the needs of the State's growing, heterogeneous
economy. Its capable, dynamic management has
guided the bank to a strong, sound position in the
highly competitive banking markets of California.
The two merging banks, the Azusa Valley Savings
Bank and The First National Bank of Azusa, are
affiliated through identical stock ownership and boards
of directors, and by common management. Both are
housed in one building and are operated as one bank.
The combined Azusa banks have IPC deposits of
approximately $9.7 million. No branches are operated
by either of the merging institutions.
The Azusa banks originally served the citrus growing
areas around the city of Azusa, which is located 30
miles east of downtown Los Angeles. Although the
agricultural economy of Azusa has given way almost
123

completely in the face of the booming residential and
industrial growth and expansion in the suburbs of Los
Angeles, the Azusa banks maintain their ultraconservative, agriculturally oriented banking policies. Consequently, their earnings record is poor and their
range of services is inadequate to meet local banking
needs. Further, the present management is elderly
and no provisions have been made for management
succession. The prospects for future viability of the
Azusa banks are very dim.
The competitive effect of the proposed merger will
be negligible. Wells Fargo does not compete in Azusa;
its closest branch is 12 miles away, in Pasadena, and
is not readily accessible to the 52,000 people in the
Azusa service area. The merging banks hold only 9.2
percent of the deposits and 5.7 percent of the loans in
the Azusa market. Batik of America, on the other hand,
holds 44 percent of the deposits and 45 percent of the
loans, and United California Bank holds 20 percent
and 27 percent, respectively. Four other banks also
maintain offices in Azusa and provide significant
competition.
The merger will not alter Wells Fargo's competitive
position in southern California, nor will it reduce the
number of banking alternatives in Azusa. It will, however, provide an additional source of trust services,
specialized lending techniques, and data processing
services geared to the needs of the growing population
and the industrial and commercial economy in and
around Azusa.
Applying the statutory criteria to the proposal, it is
concluded that the public interest will be served. The
merger is, therefore, approved.
OCTOBER 7,

1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

Wells Fargo, the third largest bank in California, has
an extensive merger history. In the past 10 years, it
has acquired banks having $702.2 million in deposits
and 31 offices.
The Pasadena branch office of Wells Fargo is located
only 12 miles from Azusa (population 27,000), the
industrial center of eastern San Gabriel Valley.
Numerous banks are located in the intervening area,
including Bank of America, Security First National
Bank, Crocker-Citizens National Bank, and United
California Bank. Thus, it does not appear that any
significant competition between Wells Fargo and the
Azusa banks would be eliminated by the merger. Since
the officers, directors, and shareholders of Savings Bank
and National Bank are virtually the same, any competition which might otherwise exist between the Azusa
banks is inconsequential. In fact, both Azusa banks
share the same offices. Hence, the proposed merger will
not affect competition between the Azusa banks.
Under California law, statewide branch banking
is permitted. Wells Fargo, whose head office is located
in San Francisco, has already established a branch
office in downtown Los Angeles and indicates an intention to establish future de novo branches in Los Angeles
County. In addition, as previously noted, Wells
Fargo's principal competitors have found the Azusa
market favorable because of its rapid population and
industrial growth and have established branch offices
there. It is reasonable to believe, therefore, that Wells
Fargo is a likely de novo entrant into the Azusa area
at some future time.

WESTERN PENNSYLVANIA NATIONAL BANK, PITTSBURGH, P A . , AND S T . CLAIR DEPOSIT BANK OF PITTSBURGH, PITTSBURGH, PA.

Banking offices
Total assets

Name of bank and type of transaction

St. Clair Deposit Bank of Pittsburgh, Pittsburgh, Pa., with.
was purchased Nov. 8,1968, by Western Pennsylvania National Bank, Pittsburgh,
Pa. (2222), which had
After the purchase was effected, the receiving bank had
COMPTROLLER'S DECISION

On July 2, 1968, the Western Pennsylvania National
Bank, Pittsburgh, Pa., applied to the Comptroller of
the Currency for permission to purchase the assets and

124




In
operation

To be
operated

$11,247,000

1

815,952,537
827, 199, 537

67

assume the liabilities of the St. Clair Deposit Ban!
of Pittsburgh, Pittsburgh, Pa.
Both banks are located in Pittsburgh, a heavily industrialized city, which has a metropolitan area population of 2.5 million. Competition in the financial mar-

ket by both banks and nonbanking financial institutions
is very intense, and is dominated by Mellon National
Bank, with resources of $3.9 billion, and Pittsburgh
National Bank, with resources of $1.6 billion.
The charter bank is third in size in the Pittsburgh
market. Since 1953, when it was a small unit bank
serving the city of McKeesport, it has increased in
size from $50 million to $806 million, and it operates
67 offices in four of the six counties within the Pittsburgh area market. The charter bank currently holds
10 percent of the deposits and 11.5 percent of the loans
in this area. The remarkable success of this bank in
challenging the two dominant institutions in Pittsburgh is found largely in its concept of "community
banking," developed to serve the numerous submarkets that resulted from the hilly topography of the
area.
The selling bank, St. Clair Deposit Bank with IPC
deposits of $9.2 million, is located in a self-sufficient
municipality within the city of Pittsburgh, known as
the Boro of Mt. Oliver. The area is isolated from the
surrounding city by hills and the Monongahela River
and contains a population of approximately 6,000.
Although Mt. Oliver is primarily residential, small
wholesale and retail activity exists, generated by consumer needs, and some light industry is located there.
The service area of the selling bank lies principally
within the boundaries of Mt. Oliver, but also includes
the small areas of Pittsburgh proper known as Arlington and St. Clair. The bank enjoys an excellent reputation and has been managed by a small but competent
staff. Now that two of three managing officers are
retiring from the bank, the board of directors has determined that it will sell the bank rather than attempt
to attract new management from other sources.
The acquisition of the St. Glair bank by the Western
Pennsylvania bank will have little effect on competition. Only .14 percent will be added to the market
share of the charter bank, and no competition will be
eliminated between the two applicant banks. Although
the charter bank maintains an office less than 1 mile
from the selling bank, the topography and lack of assets
between their respective service areas preclude active
competition between them. Both Mellon National and
Pittsburgh National operate offices in Garrick, on the
fringes of the selling bank's service area, which are more
accessible to Mt. Oliver and thereby provide more
competition than does the charter bank. The valley in
which the selling bank is located contains formidable
nonbank competitors: savings and loan associations,
credit unions, and finance companies. These provide




more intensive competition than do other commercial
banks.
The purchase of the St. Clair bank will intensify
competition in the area served by the selling bank.
Although it will have very little impact on the banking
structure in the area, it will provide loanable funds to
meet the demands that the selling bank cannot supply;
it will provide trust services to the residents of M t
Oliver; and it will extend computerized services to the
area.
The excellence of the selling bank prompted several
offers from prospective purchasers when the banking
community became aware that the St. Clair bank
would be sold. The offer by the purchasing bank was
considered most favorable, particularly in view of the
purchasing bank's history of tailoring its branch
services to meet the demands of the surrounding
community.
The proposed purchase will not increase the concentration of banking resources in the Pittsburgh area
to any appreciable degree, nor have any adverse effect
on competition in the area's banking structure. It will
benefit the residents of Mt. Oliver. The proposal is,
therefore, approved.
OCTOBER 8,

1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

The proposed merger involves the third largest bank
in the Pittsburgh S.M.S.A. and a small unit bank
located in the Mt. Oliver-Arlington-St. Clair section
of Pittsburgh.
Two branches of Western Bank, one less than a mile
away, and the other about V/2 miles away, would
appear to compete directly with St. Clair Bank in the
Mt. Oliver-Arlington-St. Clair area. This competition
would be eliminated by the proposed merger.
Pittsburgh is probably the most concentrated market
among the major banking centers in the country. There
are 19 banks with offices in the Pittsburgh S.M.S.A.
The largest bank, Mellon National Bank & Trust (total
assets $3.5 billion), has almost 50 percent of the total
deposits, and 65 percent of the area loans. Together,
Pittsburgh National Bank, the area's second largest, and
Mellon National account for 72 percent of both total
deposits and IPC demand deposits, and 74 percent of
loans.
Western Bank is, and would continue to be, the third
largest in the area, with about 13 percent of area deposits and 12 percent of loans. St. Clair Bank has about
0.2 percent of deposits and 0.2 percent of loans. In

125

terms of IPG demand deposits, the proposed merger
would result in an increase in Western's share from 9.8
to 10.0 percent of the Pittsburgh metropolitan area
total.
The proposed merger, accordingly, would slightly

add to the already very high degree of concentration of
commercial banking resources in the Pittsburgh metropolitan area and would result in Western and two
larger banks holding about 85 percent of total S.M.S.A.

SOUTHERN CALIFORNIA FIRST NATIONAL BANK, SAN DIEGO, CALIF., AND BANK OF LA JOLLA, SAN DIEGO, CALIF.
Banking offices
Total assets

Name of bank and type of transaction

In operation

Bank of La Jolla, San Diego, Calif., with
and Southern California First National Bank, San Diego, Calif. (3050), which had.
merged Nov. 15, 1968, under charter and title of the latter bank (3050). The
resulting bank at date of merger had
...

COMPTROLLER'S DECISION

On July 19, 1968, the Southern California First
National Bank, San Diego, Calif., and the Bank of La
Jolla, San Diego, Calif., applied to the Comptroller of
the Currency for permission to merge under the charter
and with the title of the former.
The charter bank, the Southern California First National Bank, with IPC deposits of $369 million, is
headquartered in the city of San Diego and presently
ranks, in terms of local deposits, as the second largest
bank in the San Diego Standard Metropolitan Statistical Area. The bank was established in 1883 and presently operates 41 branch offices in three counties of
southern California, viz., 32 in San Diego County,
five in Los Angeles County, and four in Orange
County.
San Diego, with an estimated population of 670,000,
is the third largest city in the State of California, and
is a major seaport. The economic base of the San Diego
metropolitan area is highly diversified. It draws support from agriculture, industry, foreign and domestic
finance and trade, and many other commercial and
service activities, including aircraft and aerospace research and development, fishing, tourism, manufacturing of all types, military establishments, and retail
trade.
La Jolla is a residential section of the city of San
Diego located 13 miles to the northwest of downtown
San Diego. It is an affluent community inhabited by
many retired and semiretired individuals of consider126




$16, 148, 600
598, 495, 991
614,644,591

To be operated

2
42
44

able wealth. Industrial activity in this area is limited
to research and development projects, and growth is
limited by the stringent restrictions placed on new
buildings. The San Diego campus of the University of
California is located near La Jolla.
The merging bank, the Bank of La Jolla, with IPC
deposits of $13 million, was organized in 1962. It presently operates a branch office in Rancho Santa Fe, a
high income residential community with a population
of 2,800, located about 17 miles to the north of La
Jolla. Because of the nature of the banking needs of the
area customers of this bank, a major portion of its loan
portfolio is concentrated in loans that are made for the
purpose of purchasing securities and are secured by
stocks and bonds. The merging bank engages in very
little real estate lending or installment consumer lending. The bank does not provide trust services.
Intense competition to the participating banks in La
Jolla market area is offered by four of the largest banks
in the State, which operate nine offices therein. These
are Bank of America National Trust and Savings Association, with deposits of $16 billion; Security Pacific
National Bank, with deposits of $5 billion; United
States National Bank, with deposits of $380 million:
and San Diego Trust and Savings Bank, with deposits
of $137 million. Approval has been granted to the
United California Bank, the fifth largest bank in the
State, with deposits of $3.5 billion, to open an office ir
this area. Considerable competition is also offered b)
the savings and loan associations operating in the area
as well as by the various other financial institutions.

Because of the difference in their size and in the type
of services provided by the merging banks, there is no
significant amount of competition presently existing between them. While the closest offices of the participants
are only three blocks away from each other, convenient
banking alternatives are provided by offices of the four
large competing banks located within a four-block
radius of the merging bank.
This merger, while having little competitive impact
in the San Diego metropolitan area, will benefit the
residents in the communities served by the merging
bank. It will provide another bank better able to meet
all the credit needs of the residents of the communities
of La Jolla and Rancho Santa Fe. The resulting bank
will provide a full range of banking services, including
trust services and other specialized services not presently
provided by the merging bank.
Applying the statutory criteria, it is concluded that
the proposal is in the public interest, and the application is, therefore, approved.
OCTOBER 8,

1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

This proposed merger involves two banks operating
offices in the city of San Diego. There is an office of
Southern California Bank only three blocks from La
Jolla Bank's main office in La Jolla, and one 6 miles
from its branch office in Rancho Santa Fe. Thus, it is
clear that some existing competition between the banks
would be eliminated; however, the areas in the vicinity
of La Jolla Bank's offices are also currently served by
numerous other banks, including branch offices of the
large California branch networks.
The San Diego SMSA is now served by 13 banks
operating 147 offices. Southern California Bank, with
about 22 percent of county commercial bank deposits,
is the second largest bank in this market. La Jolla Bank,
on the other hand, has less than 1 percent of such deposits; thus, the increase in concentration would not be
great. In view of Southern California Bank's size and
prominence in the area, however, its absorption of La
Jolla Bank, a relatively new competitor in a highly
concentrated market is, in our view, anticompetitive.

VIRGINIA NATIONAL BANK, NORFOLK, V A . , AND NORTHAMPTON COUNTY T R U S T BANK, C A P E CHARLES, V A .

Banking offices
Name of bank and type of transaction

Total assets
In operation To be operated

Northampton County Trust Bank, Cape Charles, Va., with
and Virginia National Bank, Norfolk, Va. (9885), which had
merged Nov. 15, 1968, under charter and title of the latter bank (9885). The
resulting bank at date of merger had

COMPTROLLER S DECISION

On August 14, 1968, Northampton County Trust
Bank, Cape Charles, Va., and Virginia National Bank,
Norfolk, Va., applied to the Office of the Comptroller
of the Currency for permission to merge under the
charter and with the title of the latter.
The Virginia National Bank, Norfolk, Va., with IPC
deposits of $495.1 million, operates 75 offices widely
scattered in 37 different communities across southern
and central Virginia. Originally chartered as a State
bank in 1867, it converted to a National bank in 1870.
It opened numerous branches in Norfolk, and, following an amendment of the Virginia branching statute in
1962 to permit statewide branching by merger, it pursued a policy of aggressive expansion by merger. Today
it ranks as the second largest banking institution in the




$7,084,017
749, 432, 644
755, 218, 352

1
78
79

State, with over $665 million in total resources. It is an
aggressive institution offering a wide variety of banking
services to its various types of customers in the widely
scattered regions where it operates. Virginia National's
management is experienced, well-regarded, and has
good depth. Its capital position is strong and its profits
over the last several years have been good.
Cape Charles, Va., with a population of 2,000, is the
home of the single-office merging bank. Cape Charles
is located in Northampton County, the southernmost
of the two Virginia counties on the Eastern Shore. The
county's population is estimated at 17,000. Its economy, largely dependent upon agriculture andfishing,is
considered static and expected to remain so.
The merging Northampton County Trugt Bank has
IPC deposits of $4.8 million. It was chartered in 1937,
but has shown only modest growth since, although it
127

is the largest of four banks located in the county. Its
management, although capable, is very conservative.
It is unlikely that any community now served by the
charter bank would be materially affected by this
merger. However, the quality of banking service to be
made available by the resulting bank in the area now
served by the merging bank would be materially improved. A number of specialized services not offered by
the merging bank would be made available by the resulting bank, including specialized lending, investment
counseling, and extensive trust services. The lending
policies of the resulting bank could be expected to differ
materially from those of the merging bank. In making
capital more readily available, the merger would
heighten prospects for industrial development and economic growth in Northampton County. The ready
availability of qualified management and other personnel to serve at the Gape Charles office of the resulting bank would be another benefit of the merger.
Because of the small size of the merging bank in
relation to the charter bank, the merger would not
affect the charter bank's statewide competitive position, or change its ranking as second largest banking
institution in Virginia.
By replacing the merging bank with an office of an
out-of-county institution, the merger would not result
in the elimination of any alternative banking source
in Northampton County. By introducing the much
stronger and more effective charter bank into the
county, convenient availability of complete banking
service to the public would be increased, and sharpened
competition for banking business in the county could
be expected to result. Because of the 30-mile distance
separating the merging bank and the nearest office of
the charter bank, there is little present competition
between the banks that would be eliminated. Since de

novo branching is prohibited to the charter bank in
Northampton County and the adjacent Accomack
County, there is no potential competition between the
two that woujd be eliminated.
Considered in the light of the statutory criteria, this
merger is judged to be in the public interest, and is,
therefore, approved.
OCTOBER 15,1968.
SUMMARY OF REPORT BY ATTORNEY GENERAL

Virginia National Bank, the largest bank in Virginia,
has, since 1963, acquired 17 other banks and now operates 79 offices in 41 communities.
Northampton County is located on the southern tip
of the Delmarva Peninsula and is separated from the
rest of the State by the Chesapeake Bay. The population of the county (17,000) has remained stable for
many years and the predominantly agricultural economy of the county appears to be stagnant.
There appears to be little, if any, direct competition
between the merging banks. VNB has no offices in
Northampton County and its closest branch to the
singe office of Northampton Bank is at Virginia Beach,
about 30 miles away, across the Chesapeake Bay.
There are four unit banks in Northampton County,
all located at intervals of 8 to 10 miles along the one
major north-south Eastern Shore highway. Northampton Bank, the largest bank in the county, had, as of
December 31, 1967, about 31 percent of the $16.5
million in total county deposits. The proposed merger
might entrench Northampton Bank's competitive position as the largest bank in the county. Under Virginia
law, VNB cannot open a de novo branch in Northampton County. However, VNB could enter this market
by purchasing a smaller bank.

T H E FIRST NATIONAL BANK IN WASHINGTON, WASHINGTON, P A . , AND FIRST NATIONAL BANK AND TRUST COMPANY OF WAYNESBURG,
WAYNESBURG, P A .

Banking offices
Name of bank and type of transaction

Total assets
In operation To be operated

The First National Bank in Washington, Washington, Pa. (5920), with
,
and First National Bank and Trust Company of Waynesburg, Waynesburg, Pa.
(13134), which had
consolidated Nov. 18, 1968, under charter of the former bank (5920) and title
"First National Bank & Trust Co., Washington, Pa." The resulting bank at date
of consolidation had
,

128




$33, 714,420
17,437,673
51, 152, 092

COMPTROLLER S DECISION

On August 9, 1968, The First National Bank in
Washington, Washington, Pa., and the First National
Bank and Trust Company, Waynesburg, Pa., applied to
the Comptroller of the Currency for permission to consolidate under the charter of the former and with the
title "First National Bank & Trust Co., Washington,
Pa."
The First National Bank in Washington, with resources of $32.3 million, is headquartered in Washington County in the southwest corner of Pennsylvania.
It operates six branches and serves Allegheny and Fayette Counties, as well as Washington County.
The consolidating bank, with resources of $16.8
million, is a single-office bank located in Greene
County in the town of Waynesburg, 25 miles south of
the charter bank.
The merger will improve the banking prospects in
Waynesburg and will thereby benefit the public.
Waynesburg is a small town in the depressed area
known as Appalachia. Its economy is dependent on
mining, farming, and the production of oil and gas,
all of which are declining in the areas surrounding
Waynesburg. The consolidating bank, with its aging
management and conservative policies, has made little
effort to attract new business or industries to the area.
The charter bank, on the other hand, is centered in an
industrialized area and its progressive management
will garner benefits for the public in Waynesburg, as it
has in Washington, by taking the initiative and encouraging local industrial development. It will also bring
additional services, such as trust and computer facilities, to the area.
The competitive effect of this consolidation will be
minimal. Competition between the two banks is very
slight. Further, the charter bank holds only 7 percent
of the loans and 4.8 percent of the IPC deposits in
Washington County. The consolidating bank holds 5.9
percent of the loans and 4.5 percent of the IPC deposits in Greene County. The resulting bank will not,
therefore, hold an important percentage of banking
resources in the total area served by it.
The substitution of a larger, stronger, and more aggressive institution for the consolidating bank will




Intensify competition in Waynesburg, which has only
one other local banking institution, a branch of Gallatin National Bank, which has resources of $130
million.
In the light of the statutory criteria, it is concluded
that the proposal is without adverse competitive effects and is in the public interest. The application is,
therefore, approved.
OCTOBER 17,

1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

Washington Bank operates seven offices, all within
a radius of 20 miles of Washington, in an area whose
basic industries are coal mining, the production of oil
and gas, and agriculture. Waynesburg Bank's sole office is located 25 miles south of Washington, in the
leading county in Pennsylvania in the output of bituminous coal.
The closest office of Washington Bank to Waynesburg Bank is located 15 miles northeast of Waynesburg
at Clarksville (population 1,500). There are no banks
in the intervening area, although a branch of Gallatin
National Bank (total deposits, $117 million) is located
at Jefferson (population 1,000), about 8 miles east of
Waynesburg, and about 5 miles southeast of Clarksville. Also, two banks now operate in Waynesburg
(population 9,300), Waynesburg Bank and Gallatin
National Bank; five banks now operate in Washington
(population 23,000), four of which have total deposits
of over $400 million. Thus, there may be some limited
competition between these offices of the merging
banks.
Washington Bank is the only bank operating in four
other more distant towns, all with populations under
4,000; in two other towns, Washington Bank competes
with banks having total deposits of over $100 million.
Pennsylvania law would permit each merging bank
to branch de novo into the other's service areas; the
large banks headquartered in Pittsburgh can also
branch de novo into all of the counties served by Washington Bank except Greene County. In view of the sizes
of the towns and of the competing banks already in
these areas, we believe that this merger would have no
significant effect on potential competition.

129

THE FIRST NATIONAL BANK OF BERLIN, BERLIN, PA., AND THE FIRST NATIONAL BANK AT STOYSTOWN, STOYSTOWN, PA.
Banking offices
Name of bank and type of transaction

Total assets
In operation

The First National Bank at Stoystown, Stoystown, Pa. (14089), with
and The First National Bank of Berlin, Berlin, Pa. (5823), which had
merged Nov. 18, 1968, under charter of the latter bank (5823) and title "First
National Bank of Somerset County." The resulting bank at date of merger had...

COMPTROLLER S DECISION

On August 8, 1968, The First National Bank at
Stoystown, Stoystown, Pa., and The First National
Bank of Berlin, Berlin, Pa., applied to the Comptroller
of the Currency for permission to merge under the
charter of the latter and with the title of "First National Bank of Somerset County."
Both participating banks are located in Somerset
County in the southwestern part of Pennsylvania. Although the area is primarily rural and agricultural,
small industries are beginning to locate there. Recreational and resort facilities also contribute significantly
to the economy of the area.
The applicant banks are two of the smaller banks
in Somerset County. The charter bank, with IPC deposits of $5.3 million, is headquartered in Berlin, a
town of 1,600, and operates one branch in Shanksville.
The merging bank, with IPC deposits of $2.1 million,
maintains its single office in Stoystown, which has a
population of 460.
The steady growth of industry and recreational facilities in Somerset County has created a need for local
banks larger than the participants. At the present time
both of these banks are loaned to near capacity; the
merging bank has lost business because its lending
limit is inadequate for local needs. Although this merger will not create a large bank, the resulting bank
will be better able to serve the area than can either of
the participants separately. The resulting bank will
have an increased earning base and lending capability.
It will be able to achieve a better utilization of the personnel of both banks and thereby resolve the management succession problem now confronting the Stoystown bank.

130




$2,983, 198
6, 528,645

To be operated

2

9,511,843

3

The proposed merger will eliminate no competition
between the applicant banks. Not only is the merging
bank 18 miles from the main office of the charter bank
and 9 miles from its branch, but the rural character of
their respective service areas isolates each from the
other. Banking competition will continue to be provided in the county by the nine other banks in the
charter bank's service area, and the nine other banks
in the merging bank's service area. While the resulting
bank will be the third largest in the county, it can be
inferred that it will stimulate competition in the county
by challenging the two larger, well-established banks in
the areas of customer service and public convenience.
The merger appears to be in the public interest
and without adverse competitive effects. It is, therefore, approved.
OCTOBER 14,

1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

Berlin (population 1,600) and Stoystown (population 460) are both located in Somerset County in
southern Pennsylvania, an area which is devoted to
mining, agricultural, and recreational pursuits.
Berlin Bank's branch in Shanksville (population
350) is 9 miles southeast of Stoystown and there are
no banks in the intervening area. Thus, there would
appear to be some competition between the merging
banks which this merger would eliminate. However,
there are eight banking offices within a radius of 10
miles from Stoystown, some of which (at least two) are
closer to Stoystown Bank than to Berlin Bank. In view
of this fact, plus the small sizes of the banks and the
market, we do not believe that this merger will seriously
affect competition.

T H E FIRST NATIONAL BANK AND T R U S T COMPANY O F GRAWFORDSVILLE, CRAWFORDSVILLE, IND., AND LADOGA STATE BANK, LADOGA,
IND.

Banking offices
Name of bank and type of transaction

Total assets
In operation To be operated

Ladoga State Bank, Ladoga, Ind., with
and The First National Bank and Trust Company of Crawfordsville, Crawfordsville, Ind. (571), which had
merged Nov. 30, 1968, under charter and title of the latter bank (571). The
resulting bank at date of merger had

COMPTROLLER'S DECISION

On July 31, 1968, the Ladoga State Bank, Ladoga,
Ind., and The First National Bank and Trust Company of Crawfordsville, Crawfordsville, Ind., applied
to the Office of the Comptroller of the Currency for
permission to merge under the charter and with the
title of the latter.
The charter bank, organized in 1864 and currently
holding $18.2 million in IPC deposits, operates one
out-of-town branch in Wingate. This bank, the smaller
of the two banks headquartered in Crawfordsville,
ranks second among the seven banks currently operating in Montgomery County.
Crawfordsville, the home of the charter bank, is
the county seat of Montgomery County and has a
population of 14,400. Its economy is diversified, with
industry and service businesses most prominent.
Montgomery County, generally the service area of
the bank, has a population of about 30,000. Its
economy is based primarily on agriculture and particularly on corn farming.
The merging bank, organized in 1927, has approximately $2 million in IPC deposits and is the only
bank in Ladoga. The bank, faced with the imminent
retirement of its president, has no successor available
to replace him.
Ladoga, home of the merging bank, is situated in
the extreme southeast portion of Montgomery County.
This town of 1,000, with only one industrial plant employing 15 to 20 persons, depends primarily on the
agricultural activities of the surrounding area.
The merger will have little adverse effect on competition. Although one independent banking institution will be eliminated, there will remain as a choice
to the banking public six other commercial banks in
Montgomery County. The position of the charter bank
as second largest bank in the county would be unchanged. Other types of financial institutions, including three savings and loan associations, eight personal




$3, 004, 586

1

24,218,529

2
3

27,223,115

loan companies, several major insurance companies,
and at least three Federal agencies will also provide
competition for the resulting bank. The resulting institution will be better able to compete with the firstranking bank in the county.
The customers of the merging bank and other residents of the Ladoga community will benefit by gaining
the availability of a substantially enlarged borrowing
limit needed to meet the area's increasing agricultural
credit demands, as well as a number of services not
now available, including trust services. The management succession problem now faced by the merging
institution will also be solved by making available
competent personnel to direct the operation of the
Ladoga bank, which will be retained as a branch
of the resulting institution.
Considered in the light of the statutory criteria, this
merger is judged to be in the public interest, and is,
therefore, approved.
OCTOBER 8,1968.
SUMMARY OF REPORT BY ATTORNEY GENERAL

The head offices of the banks are about 15 miles
apart and there is one bank (total deposits, $1.4
million) in the intervening area. The two merging
banks are direct competitors of each other. First National serves an area within a radius of about 20 miles
of Crawfordsville, which includes all of Montgomery
County, plus bordering areas of adjacent counties.
Ladoga Bank serves the area within a radius of about
8 miles of the town of Ladoga. Thus, the service areas
of the two banks overlap substantially in the southeastern part of Montgomery County and small parts of
contiguous Boone, Hendricks, and Putnam Counties.
Thirteen banks operate 17 offices in the market of
First National, the area within a radius of about 20
miles of Crawfordsville; this market has total deposits
of $79.6 million. The two banks headquartered in
Crawfordsville, Elston Bank and Trust Co. (total
131

deposits, $29.3 million), and First National, hold 37
percent and 26 percent, respectively, of deposits in
the area; combined, they account for about 62 percent
of such deposits. The third largest bank holds only 8
percent of deposits in this area.
The proposed merger would combine the second
largest bank in the area and the seventh largest, which
has 3.2 percent of total commercial bank deposits in

the area, and increase the share of such deposits held
by the area's two largest banks to 65 percent.
Within the narrower market served by Ladoga
Bank, an area within a radius of about 8 miles of
Ladoga, there are six banks with deposits ranging
from $1 to $6.5 million. However, as noted above,
larger customers in this area are served by banks outside this area, such as First National.

AMERICAN FLETCHER NATIONAL BANK AND TRUST COMPANY, INDIANAPOLIS, IND., AND MARION
INDIANAPOLIS, IND.

COUNTY

NATIONAL

BANK,

Banking offices

Name of bank and type of transaction

Total assets
In operation To be operated

American Fletcher National Bank and Trust Company, Indianapolis, Ind.
(13759), with
and Marion County National Bank, Indianapolis, Ind. (13759), which had
merged Dec. 31, 1968, under charter of the latter bank (13759) and title "American Fletcher National Bank and Trust Company." The resulting bank at date
of merger had

COMPTROLLER S DECISION

On October 18, 1968, the American Fletcher National Bank and Trust Company, Indianapolis, Ind.,
and the Marion County National Bank (organizing),
Indianapolis, Ind., filed an application with the Comptroller of the Currency for permission to merge under
the charter of the latter and with the title of the
former.
The American Fletcher National Bank and Trust
Company, Indianapolis, Ind., with IPC deposits of
$594 million, operates 41 branch offices, all of which
are located in Indianapolis and surrounding Marion
County.
The Marion County National Bank (organizing),
Indianapolis, Ind., is a nonoperating institution which
was organized in October 1968 as a step in the corporate reorganization of the merging bank. With the
exception of directors' qualifying shares, all of the
stock of the charter bank is owned by the American
Fletcher Corporation, Indianapolis, Ind., an Indiana
corporation.
Since the charter bank is a nonoperating institution,
approval of this application will have no effect on

132




$1,145,287,589
253,299
1,145, 540, 888

43

competition. Service to the public will not be affected
by this transaction, as the resulting bank will operate
through the personnel and physical facilities of the
merging bank. Approval of the merger will, however,
facilitate the corporate reorganization of the merging
bank.
Applying the statutory criteria, we find that this
proposal is in the public interest, and the application
is, therefore, approved.
NOVEMBER 25,1968.
SUMMARY OF REPORT BY ATTORNEY GENERAL

Marion County National Bank was organized in
October 1968, by American Fletcher Corporation, an
Indiana corporation; it has not officially commenced
banking operations.
The purpose of the proposed merger is to enable the
shareholders of American National to exchange their
shares for shares of American Fletcher Corporation,
which will then own all the shares of the resulting bank.
Thus, the proposed merger is merely a step in the reorganization of American National and will not have
an adverse effect on competition.

BIRMINGHAM TRUST NATIONAL BANK, BIRMINGHAM, ALA., AND ALABAMA NATIONAL BANK, BIRMINGHAM, ALA.
Name of bank and type of transaction

Banking offices

Total asset

In operation To be operated
Birmingham Trust National Bank, Birmingham, Ala. (14569), with
and Alabama National Bank, Birmingham, Ala. (14569), which had
merged Dec. 31, 1968, under charter of the latter bank (14569) and title "Birmingham Trust National Bank." The resulting bank at date of merger had

COMPTROLLER'S DECISION

On October 18, 1968, the Birmingham Trust National Bank, Birmingham, Ala., and the Alabama
National Bank (organizing), Birmingham, Ala., applied to the Comptroller of the Currency for permission
to merge under the charter of the latter and with the
title of the former.
The Birmingham Trust National Bank was first
founded under a State charter in 1887 and converted
to a National Association in 1946. This bank, with
total assets of $308 million, operates 17 offices in Jefferson County. Birmingham, a city of 341,000 in 1960,
includes 722,000 within its metropolitan area that
covers Jefferson, Shelby, and Walker Counties. The
economic base of this city is diversified among many
manufacturing industries and commercial activities.
The city, which is now the retail and wholesale center
of the State of Alabama, has a promising economic
future.
The Alabama National Bank (organizing), Birmingham, Ala., is a nonoperating institution created
to facilitate a corporate restructuring of the merging Birmingham Trust National Bank. The resulting
bank will have the same management and direc-

18
0

$348,066,839
250, 000
348, 074, 339

18

torate as the merging bank, and, with the exception
of directors' qualifying shares, will be entirely owned
by the BTNB Corporation.
Since the charter bank is a nonoperating institution,
consummation of the merger will have no effect on
competition. The resulting bank will do business
through the personnel and physical facilities of the
merging bank, and there will be no change in service
to the public as the result of this merger. Approval
of this application will, however, facilitate the acquisition of the merging bank by BTNB Corporation.
Applying the statutory criteria, we find that this
merger is in the public interest, and the application is,
therefore, approved.
NOVEMBER 25,1968.
SUMMARY OF REPORT BY ATTORNEY GENERAL

Birmingham Trust National Bank recently organized the Alabama National Bank, with which it proposes to merge, and the BTNB Corporation, which will
own the resulting bank. Thus, this merger is merely a
step in a corporate reorganization and will have no
effect on competition.

CAPITAL NATIONAL BANK, HOUSTON, TEX., AND CAPITAL BANK, N.A., HOUSTON, TEX.
Banking offices
Total assets

Name of bank and type of transaction

In operation To be operated
Capital National Bank, Houston, Tex. (15528), with
and Capital Bank, N.A., Houston, Tex. (15528), which had
merged Dec. 31, 1968, under charter of the latter bank (15528) and title "Capital
National Bank." The resulting bank at date of merger had

COMPTROLLER'S DECISION

On October 14, 1968, the Capital National Bank,
Houston, Tex., and the Capital Bank, N.A. (organiz-




$96,523,404
250,000
96, 773, 404

0
1

ing), Houston, Tex., filed an application with the
Comptroller of the Currency for permission to merge
under the charter of the latter and with the title
of the former.

133

Houston, with a population of over 1 million, is the
Nation's sixth largest city. Its standard metropolitan
area is defined as Harris County, an area of 1,730
square miles with a population of about 1.3 million.
Houston lies in the heart of what is known as the Upper
Texas Gulf Coast. This gulf coast area has undergone
a significant change during the past years, becoming
predominantly industrial, supported by the largest concentration of oil, gas and petro-chemical refining,
manufacturing, and processing facilities in the world.
Farming and ranching, construction, transportation,
trade, and services continue to play an important role.
The Capital National Bank, with IPC deposits of
$59 million, was originally organized in 1965. The bank
faces strong commercial banking competition from a
number of larger banks operating within its area.
The Capital Bank, N.A., is a new bank in the
process of being organized to provide a means to
transfer the ownership of the Capital National Bank
to the Capital National Corporation. After consummation of this merger, the present shareholders of

Capital National Bank will own the capital stock of
the holding company, which, in turn, will own all
except the directors' qualifying shares in the resulting
bank.
Since the charter bank is a nonoperating institution,
this merger will have no effect on competition. Service to the public will not be affected.
Applying the statutory criteria, we find that this
proposal is in the public interest, and the application is,
therefore, approved.
NOVEMBER 25,1968.
SUMMARY OF REPORT BY ATTORNEY GENERAL

Capital Bank, N.A., is a new bank organized solely
for the purpose of facilitating the acquisition of Capital
National Bank by Capital National Corporation, a
newly formed one-bank holding company with powers
to diversify into other businesses. The proposed transaction is part of a corporate reorganization and would
appear to have no adverse effects on competition.

FIRST NATIONAL BANK & TRUST COMPANY OF MILLERSBURG, MILLERSBURG, PA., AND THE FIRST NATIONAL BANK OF ELIZABETHVILLE, ELIZABETHVILLE, P A .
Banking offices
Total assets

Name of bank and type of transaction

In operation

First National Bank & Trust Company of Millersburg, Millersburg, Pa. (2252),
with
and The First National Bank of Elizabethville, Elizabethvillc, Pa. (5563), which
had
consolidated Dec. 31, 1968, under charter of the former bank (2252) and title
"Upper Dauphin National Bank." The resulting bank at date of consolidation had.

COMPTROLLER'S DECISION

On August 28, 1968, The First National Bank of
Elizabethville, Elizabethville, Pa., and First National
Bank & Trust Company of Millersburg, Millersburg,
Pa., applied to the Office of the Comptroller of the
Currency for permission to consolidate under the charter of the latter and with the title of "Upper Dauphin
National Bank."
The charter bank, with assets of $6.8 million, is a
unit bank located in Millersburg and has an approved,
but as yet unopened, branch to be located 12 miles
northeast in Pillow. Millersburg, home of the charter
bank, is located in Dauphin County, along the Susquehanna River, approximately 30 miles north of
Harrisburg, the State capital. It is a borough of 3,000
134




$7, 577, 562

2

4, 224, 555

To be operated

1

11,802,117

3

and the center of a mountainous region, lined with
valleys and hilly countryside, devoted largely to general farming. An additional 19,000 inhabitants live in
this surrounding trade area. Although agriculture
predominates in the bank's service area, Millersburg
is basically a residential and industrial community. Its
industries are in the field of tool, reamer, garment and
shoe manufacturing, dairy products, and trucking,
with an annual payroll exceeding $20 million.
The First National Bank of Elizabethville, with assets
of $3.9 million, is a unit bank chartered in 1900. Although it is well-managed, this bank has been for
some years a one-man operation. Adequate depth of
management has always been a problem.
Elizabethville, the home of the First National Bank

of Elizabethville, is a borough of 1,500 people located
about 8 miles east of Millersburg. An estimated 7,500
people live in the Elizabethville trade area, whose
principal source of income is fanning. The farms in the
area are growing larger and as a result require expanded lending facilities. A number of wage earners
from Elizabethville commute daily to industries located
in or near Millersburg.
The merger will enhance competition with the $9
million Millersburg Trust Co., which, in addition to
its head office in Millersburg, operates a branch in
Elizabethville. Although the consolidating institutions
are only 8 miles from each other, their trade areas overlap only slightly, and there is presently little direct
competition between them. Because the larger Harrisburg banks have been able to capture loan business in
the Millersburg area, the consolidation should have
the effect of establishing a stronger competitive force
in the area. The other banks in the area will not be
adversely affected and will continue to compete for
their proportionate share of available banking business.
The communities of both banks would benefit from
having a larger combined institution more capable of
meeting the present and future banking needs of what
should be an expanding economy. The larger lending
capability of the resulting bank will be particularly
advantageous in the Millersburg area. The greater
management resources of the charter bank will resolve
the problem in the Elizabethville bank. Trust and
computerized services, now available at the charter
bank, will also be available to customers in the Elizabethville area. In sum, the consolidation will create a
larger, more balanced banking institution, making

FIRST UNION NATIONAL

BANK OF NORTH

available a broader range of banking services to its
customers in both communities.
Applying the statutory criteria to the proposal, this
consolidation is determined to be in the public interest, and is, therefore, approved.
OCTOBER 25,

1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

Millersburg (population 3,000) and Elizabethville
(population 1,500) are located 8 miles apart in northwestern Dauphin County, in central Pennsylvania. This
area is principally devoted to farming, but there is
considerable industrial activity in Millersburg itself.
The offices of the merging banks are 8 miles apart
and there are no banks in the intervening area. Millersburg Trust Company (total deposits, $9 million), with
one office in Millersburg and one office in Elizabethville, is the only other bank operating in either city.
Millersburg Bank derives about $25,000 in loans and
about $195,000 in deposits from the Elizabethville
area, and Elizabethville Bank derives about $139,000
in loans and about $109,000 in deposits from the
Millersburg area. Thus, there appears to be some existing competition between the banks which would be
eliminated by this merger.
Pennsylvania law would permit each bank to open
de novo offices in the town or towns where the other's
offices are located, but the large banks headquartered
in Harrisburg could also make such de novo entry.
To summarize, in view of the small sizes of both the
banks and the towns, we believe that this merger will
have only a limited effect on existing competition, and
will have no significant effect on potential competition.

CAROLINA, CHARLOTTE, N.C.,
AND THE
ELIZABETH CITY, ELIZABETH CITY, N.C.

FIRST

&

CITIZENS NATIONAL

BANK OP

Banking offices
Name of bank and type of transaction

Total assets
In operation To be operated

The First & Citizens National Bank of Elizabeth City, Elizabeth City, N.C.
(4628), with
and First Union National Bank of North Carolina, Charlotte, N.C. (15650),
which had
merged Dec. 31, 1968, under charter and title of the latter bank (15650). The
resulting bank at date of merger had

COMPTROLLER'S DECISION

On September 20, 1968, the First Union National
Bank of North Carolina, Charlotte, N.C, with IPC
deposits of $605 million, and The First & Citizens Na-




$28, 381, 954

1

898,488, 793

122

926, 998, 523

123

tional Bank, Elizabeth City, N.C, with IPC deposits
of $20 million, applied to the Comptroller of the Currency for permission to merge under the charter and
with the title of the former.
135

The charter bank, First Union National Bank, is
headquartered in Charlotte, N.C., and presently
operates 114 offices in 58 communities located in 33 of
the 100 counties in the State. This bank serves virtually
the entire State of North Carolina. The population of
the State in 1960 was 4.5 million persons. Although
the economy of North Carolina is diversified, agriculture is still a major part of the State's economic
structure. Industrial activity is centered mainly in the
Piedmont area. Although tobacco products, furniture,
and textiles dominate the industrial output of the State,
numerous manufacturers of widely diversified products
have located in North Carolina in the past decade.
The merging bank, First & Citizens National Bank,
operates its single office in Elizabeth City, N.C. This
bank serves an area comprised of the five small counties of Camden, Chowan, Currituck, Pasquotank, and
Parquimans, all of which are situated in the extreme
northeast corner of the State. The population of the
five-county area is approximately 59,000 persons and
the largest town in the area is Elizabeth City, which
has a population of about 14,000 persons. The fivecounty area served by First & Citizens National Bank
is virtually isolated from the mainstream of economic
activity of the State of North Carolina. Both from the
standpoint of accessibility and distance—Elizabeth City
is approximately 40 miles from Norfolk—the fivecounty area appears to be more closely allied to the
Norfolk, Va., market than to the commercial and industrial centers of North Carolina. The basic and primary economic activity of the five-county area is agriculture. There is very little manufacturing. Thus, the
five counties have the typical characteristics of an
undeveloped, rural area, viz., high unemployment, low
per capita income, minimal industrial development,
and little commercial activity.
This merger will have an insignificant effect upon
the statewide competitive position of the charter bank.
First Union National Bank, the third largest bank in
the State, with total assets in excess of $845 million,
competes vigorously with several aggressive and progressive statewide banking institutions. This competition emanates mainly from Wachovia Bank and Trust
Company, the largest bank in the State, with assets of
approximately $1.25 billion; North Carolina National
Bank, the second largest bank in the State, with assets
of $1 billion; and First-Citizens Bank and Trust Company, the fourth largest bank in the State, with assets
in excess of $601 million. The regional banks competing in North Carolina are the Planters National Bank,
the Southern National Bank, the First National Bank
of Eastern North Carolina, the Northwestern Bank,
136




the Central Carolina Bank and Trust Company, and
the Branch Banking and Trust Company.
The merging First & Citizens National Bank is in
direct competition with several commercial banks with
offices within the five-county service area. Wachovia
Bank and Trust Company has two branch offices in
Elizabeth City. Industrial Bank, a unit bank with assets
of $6 million, is also located in Elizabeth City. Competition between First & Citizens National Bank and
Industrial Bank is somewhat restricted due to the inability of Industrial under State law to accept demand
deposits. The remaining banking offices located within
thefive-countyarea are: two branches of Peoples Bank
and Trust, with assets of $74 million; one branch of
First National Bank of Eastern North Carolina, with
assets of $58 million; and the Bank of Currituck, with
assets of approximately $4 million. Moreover, significant direct competition comes from commercial banks
located in the Norfolk, Va., area, such as Virginia
National Bank, which has assets of $712 million. Additionally, competition is generated by three savings and
loan associations and several finance companies located
within the five counties.
The main offices of First Union National Bank and
First & Citizens National Bank are separated by more
than 300 miles; the nearest branch office of First Union
is more than 100 miles southwest of First & Citizens'
single office. The two participating banks are not in
competition with each other.
Prior to the recent death of its president and chief
executive, First & Citizens National Bank was essentially a "one-man operation." His death has highlighted the fact that the merging bank is confronted
with a serious management succession problem. Four
of the five senior executive officers, presently active, are
over 67 years of age and the fifth officer is in his middle
fifties. The merging bank has been unable either to
train competent replacements or to attract qualified
personnel to succeed these men. The situation is now
such that, if an orderly integration of new management
into the community is to be accomplished, this problem
must be solved immediately. The charter bank, First
Union National, by supplying the in-depth managerial
talent needed, will provide the immediate and longrange solution to the management replacement problem of the merging bank.
Whether this merger will substantially lessen potential competition between the participating banks hinges
primarily on the issue of de novo branching into the
five-county area. As previously mentioned, the present
economic condition of the northeast five-county area
is poor, and the indicators reveal little likelihood thai

this situation will improve in the foreseeable future.
Consequently, while statewide branch banking is possible in theory because it is permitted under North
Carolina statutes, the economic realities of the situation
indicate that de novo branching into the area would
not be economically feasible. Graphic evidence of the
economic unfeasibility of de novo branching in the area
is provided by the recent closing of the Planters National Bank and Trust Company branch office located
in Point Harbor, Currituck County, which is within
the five-county service area, 18 months after it was
opened. The branch at Point Harbor was closed because it had been a losing operation over the entire
18 month period, and there were no prospects of profitability in the foreseeable future.
This proposed merger will produce a procompetitive
effect on the service area in question. At present there
is only one commercial bank, Wachovia Bank and
Trust Company, located within the five-county area
that can offer a full range of banking services. Currently the only competition offered to Wachovia Bank
and Trust Company for such services comes from large
banking institutions in the Norfolk area; they cannot
branch in the area. The introduction of First Union
National Bank into the area pursuant to this merger
will stimulate competition for Wachovia Bank and
Trust Company and the Norfolk banks, by providing
another alternative to which the residents may look to
furnish a full range of banking services.
This proposed merger is in the public interest. In
addition to bringing to the five counties another bank
capable of offering a full range of banking services, it
will bring additional capital resources which could
serve to relieve the current and prospective economic
malaise of the area. On balance, it seems clear that this
proposed merger will promote the economic life of the
immediate five-county area and, in turn, benefit the
economy of the State of North Carolina.
In conclusion, the merging bank is confronted with
a serious management succession problem that must
be rectified. The economy of the area is such that the
public will be better served by the entrance of the
charter bank into this area. The merger will produce
no elimination of banking alternatives to the public.
Rather, the charter bank will provide more meaningful
competition to Wachovia Bank and Trust Company
and the Norfolk banks than the merging bank. De novo




branching in this area is not economically feasible for
the charter bank, now or in the foreseeable future.
Therefore, this merger will solve the management succession problem and benefit the community without
adversely affecting either existing or potential
competition.
Applying the statutory criteria, it is found that the
proposed merger is in the public interest. The application is, therefore, approved.
NOVEMBER 26,

1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

The First Union National Bank of North Carolina,
Charlotte, N.C. ("First Union"), the third largest
commercial bank in North Carolina, operates 114
offices in 58 communities throughout the State. Since
1958, First Union has acquired 18 other banks with
aggregate deposits exceeding $233 million.
The head offices of the merging banks are 306 miles
apart and the nearest First Union office is in Wilson,
118 miles from Elizabeth City. Because of the distance
between the offices of the merging banks, it would
appear that there is little, if any, direct competition
between them.
There are three banks operating in Pasquotank
County, all in Elizabeth City: Citizens, a branch office
of Wachovia Bank and Trust Company (total deposits,
$1,183 million), the largest bank in the State, and
Industrial Bank (total deposits, $5 million). Within this
area, Citizens had the largest share, or 66 percent, of
IPC deposits as of June 30, 1966. The nearest towns
to Elizabeth City are Hertford (population 2,068) ,17
miles southwest, with a branch of Peoples Bank &
Trust Company (total deposits, $68 million);
Edenton (population 4,458) 3 23 miles southwest, with a branch of the First National Bank of
Eastern North Carolina (total deposits, $78 million),
and a branch of Peoples Bank & Trust Company;
Moyock (population 1,207), 23 miles north, with Bank
of Currituck (total deposits, $3.5 million); and Point
Harbor (population 256), 42 miles southeast, with a
branch of Planters National Bank & Trust Company
(total deposits, $86 million). If these banks, the only
other banks in thefive-countyarea, are included in the
market, Citizens still held the largest share, or 46 percent, of IPC deposits as of June 30, 1966.

137

SIMMONS FIRST NATIONAL BANK OF PINE BLUFF, PINE BLUFF, ARK., AND SIMMONS NATIONAL BANK OF PINE BLUFF, PINE BLUFF, ARK.
Banking offices
Name of bank and type of transaction

Total assets
In operation

Simmons First National Bank of Pine Bluff, Pine Bluff, Ark. (6680), with
and Simmons National Bank of Pine Bluff, Pine Bluff, Ark. (6680), which had....
merged Dec. 31, 1968, under charter of the latter bank (6680) and title "Simmons
First National Bank of Pine Bluff." The resulting bank at date of merger had

COMPTROLLER'S DECISION

On October 24, 1968, the Simmons First National
Bank of Pine Bluff, Pine Bluff, Ark., and the Simmons
National Bank of Pine Bluff (organizing), Pine Bluff,
Ark., applied to the Comptroller of the Currency for
permission to merge under the charter of the latter
and with the title of the former.
The Simmons First National Bank, with IPC
deposits of $57 million, was organized on January 19,
1903, and is located in Pine Bluff, Ark. Pine Bluff,
with a population of 60,000, is located in south-central
Arkansas on the Arkansas River.
Simmons National Bank of Pine Bluff is being organized to provide a vehicle to transfer ownership of
Simmons First National Bank of Pine Bluff to the Simmons First National Corporation. Simmons National

$84, 792, 650
250, 000

To be operated

6
0

85, 042, 650

6

Bank of Pine Bluff will not be operating as a commercial bank prior to the merger.
Because Simmons First National Bank is the only
operating bank involved in the proposed transaction,
there can be no adverse effect on competition resulting
from consummation of the proposed merger.
Applying the statutory criteria, it is concluded that
the proposed merger is in the public interest, and the
application is, therefore, approved.
NOVEMBER 29,1968.
SUMMARY OF REPORT BY ATTORNEY GENERAL

Simmons National Bank is currently being organized
solely for the purpose of accomplishing a corporate reorganization of Simmons First National Bank. Thus,
this merger will have no effect on competition.

SOUTHERN NATIONAL BANK OF NORTH CAROLINA, LUMBERTON, N.C., AND SOUTHERN CITY NATIONAL BANK, LUMBERTON, N.C.
Banking offices

Name of bank and type of transaction

Total assets
In operation

Southern National Bank of North Carolina, Lumberton, N.C. (10610), w i t h . . . . .
and Southern City National Bank, Lumberton, N.C. (10610), which had
merged Dec. 31,1968, under charter of the latter bank (10610) and title "Southern
National Bank of North Carolina." The resulting bank at date of merger h a d . . . .

COMPTROLLER'S DECISION

On October 18, 1968, Southern National Bank of
North Carolina, Lumberton, N.C, and Southern City
National Bank (organizing), Lumberton, N.C, applied
to the Comptroller of the Currency for permission to
merge under the charter of the latter and with the
title of the former.
The Southern National Bank of North Carolina,
with IPC deposits of $115 million, was organized in
138




$149, 491, 881
150,000
149, 641, 881

To be operated

38
0
38

1897. It currently operates 33 offices in 23 communities in central North Carolina.
The Southern City National Bank is being organized
to provide a vehicle to transfer ownership of Southern
National Bank of North Carolina to The North Carolina Southern Corporation. The Southern City National Bank will not be operating as a commercial
bank prior to the merger.
Because Southern National Bank of North Carolina
is the only operating bank involved in the proposed

transaction, there can be no adverse effect on competition resulting from consummation of the proposed
merger.
Applying the statutory criteria, it is concluded that
the proposed merger is in the public interest. The application is, therefore, approved.
NOVEMBER 29,1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

[This] * * * merger is part of a transaction which
will result in a presently existing bank becoming a subsidiary of a one-bank holding company. Thus, * * *
[it] is merely part of a corporate reorganization and as
such will have no effect on competition.

SOUTH SHORE NATIONAL BANK, QUINCY, MASS., AND SHOREBANK N.A., QUINCY, MASS.

Banking offices
Name of bank and type of transaction

Total assets
In operation To be operated

South Shore National Bank, Quincy, Mass. (14798), with
and Shorebank N.A., Quincy, Mass. (14798), which had
merged Dec. 31, 1968, under charter of the latter bank (14798) and title "South
Shore National Bank." The resulting bank at date of merger had

COMPTROLLER'S DECISION

On September 26, 1968, the South Shore National
Bank, Quincy, Mass., and the Shorebank N.A. (organizing) , Quincy, Mass., applied to the Comptroller
of the Currency for permission to merge under the
charter of the latter and with the title of the former.
South Shore National Bank, with assets of $142 million, has its main office in Quincy, Mass., and is presently operating through its main office and 29
branches. Approval of two additional branches has
been granted to the bank. The bank is considered to be
well-managed and progressive and has had a history
of successful growth with no asset problems. The
Shorebank N.A. is being organized for the sole purpose
of providing a vehicle to transfer ownership of the
South Shore National Bank to a holding company,
Shorebank, Inc. Shorebank N.A. is a nonoperating institution at the present time.
South Shore National Bank presently furnishes a
complete line of banking services, and all of these services will be rendered by the surviving bank in the same
manner and with the same personnel as is presently




$153, 647, 799
257, 200

31
0
31

153,648,015

utilized by the South Shore National Bank. The proposed directors and executive officers of the resulting
bank will be the same as those of South Shore National Bank. The banking business to be carried on by
the resulting bank will be conducted at the 29 branches
of South Shore National Bank presently in existence,
plus the two additional branch locations for which
approval has been granted by this Office.
Because the proposed merger involves only one operating bank, there can be no adverse effect on competition resulting from the proposed transaction.
Applying the statutory criteria, it is concluded that
the proposal is in the public interest. The application is,
therefore, approved.
NOVEMBER 19,1968.
SUMMARY OF REPORT BY ATTORNEY GENERAL

The merger between South Shore and Shorebank
N.A. (organizing) is merely a means of making South
Shore a wholly owned subsidiary of a one-bank holding company. It will have no effect on competition.

139

T H E CENTRAL NATIONAL BANK OF RICHMOND, RICHMOND, V A . , AND TOWER NATIONAL BANK, RICHMOND, V A .

Banking offices
Total assets

Name of bank and type of transaction

In operation

The Central National Bank of Richmond, Richmond, Va. (10080), with
and Tower National Bank, Richmond, Va. (10080), which had

merged Dec. 31, 1968, under charter of the latter bank (10080) and title "The
Central National Bank of Richmond." The resulting bank at date of merger had..

COMPTROLLER'S DECISION

On September 16,1968, The Central National Bank
of Richmond, Richmond, Va., and the Tower National
Bank (organizing), Richmond, Va., filed an application with the Comptroller of the Currency for permission to merge under the charter of the latter and with
the title of the former.
The Central National Bank of Richmond, with IPC
deposits of $136 million, is located in Richmond, Va.
Tower National Bank is being organized to transfer
ownership of The Central National Bank to Central
National Corporation. Tower National Bank will not
be operating as a commercial bank prior to the merger.
Because The Central National Bank of Richmond
is the only operating bank involved in the proposed
transaction, there can be no adverse effect on competi-

T H E COUNTY BANK N.A.,

$224, 857,416
249, 100

11
0

11

224,864,716

tion resulting from consummation of the proposed
merger.
Applying the statutory criteria, it is concluded that
the proposed merger is in the public interest. The application is, therefore, approved.
NOVEMBER 26,1968.
SUMMARY OF REPORT BY ATTORNEY GENERAL

Tower National Bank, organized on September 23,
1968, does not now carry on a banking business. It is a
wholly owned subsidiary of Central National Corporation, a general business corporation. The sole purpose
for the creation of Tower National Bank was to facilitate the change in ownership of Central National Bank
to that of a one-bank holding company.
We conclude that the proposed merger would not
have an adverse effect upon competition.

CAMBRIDGE, MASS., AND T H E EVERETT NATIONAL BANK, EVERETT, MASS.

Banking offices

Name of bank and type of transaction

Total assets
In operation

The Everett National Bank, Everett, Mass. (11510), with
and The County Bank N.A., Cambridge, Mass. (4771), which had
merged Dec. 31, 1968, under charter and title of the latter bank (4771). The
resulting bank at date of merger had

COMPTROLLER S DECISION

On August 16, 1968, the $57 million County Bank,
N.A., Cambridge, Mass., and the $34 million Everett
National Bank, Everett, Mass., applied to the Office of
the Comptroller of the Currency for permission to
merge under the charter and with the title of the
former.
Cambridge, Mass., with a population of 107,700, is
situated on the Charles River opposite downtown
Boston, a city of 697,000 people. Cambridge is primarily
140




To be operated

$36, 136, 990
62, 149, 531
98, 286,522

To be operated

2
6

8

an industrial and educational center. It is the site of
Harvard University, Massachusetts Institute of Technology, and Radcliffe College. Recently Cambridge
was selected as the site of the new NASA electronics
research center. The community has maintained a
stable population. Due to the heavy industrial growth,
the steady source of spending generated by college students, and the added income of Government employment, the area economy is viable and growing.
Everett, Mass., a suburb of Boston, is classified as an
industrial city with a population presently estimated at

43,000, down slightly from the 1960 census. Employment and income derived therefrom are quite heavily
concentrated in the manufacturing, retail, and wholesale trades. The annual payroll in 1966 for its labor
force of 11,833 people was $78 million.
The charter bank, organized in 1892, has its head
office and a branch in Cambridge, three offices in
Somerville, and one in Belmont. It is a relatively small
bank, accounting for only 0.45 percent of the total
metropolitan Boston area deposits and 0.44 percent of
the total area loans. Over 97 percent of its stock is
owned by Shawmut Association, Inc., a registered bank
holding company.
The merging bank, organized in 1919, has a main
office and two branch offices in Everett, accounting for
0.26 percent of the total metropolitan Boston area deposits and 0.31 percent of the total area loans. The
Shawmut Association, Inc., also holds a majority interest in this bank by owning 97.3 percent of the shares.
While the bank has had no mergers or branches within
the last 5 years, growth has been very good.
The proposed merger will not be adverse to the
present banking structure of the Boston metropolitan
area. All of the offices of the resulting bank will be located in southwestern Middlesex County, an area
served by 12 commercial banks operating 35 offices.
Included within this region are two very intense competitors, The Harvard Trust Company and the Middlesex Bank, N.A., both having over $170 million in total
deposits. The merger would leave the resulting bank
with only $78.9 million total deposits, far short of the
deposits of the aforementioned banks. In addition, the
Boston city banks are acknowledged competitors in this
area. Although the city banks are not permitted to
branch into Middlesex County, they do provide additional competition in that Middlesex County is contiguous with downtown Boston.
Presently there is very little competition between the
applicant banks because their main offices and branches
are located in separate communities, which are separated geographically by the Mystic River. This merger
is simply a corporate restructuring of two banks that
have been commonly owned by Shawmut Association,
Inc., for the past 21 years.
The public served by the resultant bank will realize
several advantages from the merger. The lending ca-




pacity of the resulting bank will be increased, providing
greater accommodation to loan requests, some of which
have previously been refused as being beyond the lending limits of the present banks. Although each bank
offers complete banking services, the merger will improve the quality of services presently offered. Finally,
with the combined personnel and managerial talent
available to the resulting bank, this merger will increase
internal efficiency and establish improved public
service.
Applying the statutory criteria to the proposed merger, we find that it is in the public interest. The
application is, therefore approved.
OCTOBER 23,1968.
SUMMARY OF REPORT BY ATTORNEY GENERAL

The County Bank, N.A., operates six offices in the
cities of Cambridge, Somerville, and Belmont, Mass.,
all located in Middlesex County immediately northwest of Boston, Mass. Everett National Bank operates
three offices in Everett, Mass., a northern suburb of
Boston in Middlesex County. Both banks have been
majority owned subsidiaries of Shawmut Association,
Inc., a bank holding company, for more than 20 years.
All of the offices of the merging banks are located in
the southwestern Middlesex County, part of the Boston
SMSA. This area is now served by about 12 commercial banks operating about 35 offices, including two
banks with total deposits of over $150 million. County
bank is the third largest bank in the area. The large
Boston banks, though not permitted to branch into
Middlesex County, also provide competition for nearby
banks in that county.
The home offices of the two banks are 4 miles apart
and the closest offices of the two banks, in Cambridge
and Everett, are approximately 2 miles apart; there are
few banking offices in the intervening area. However,
the fact both banks have been majority-owned subsidiaries of the same holding company for more than
20 years undoubtedly limits any competition there
would otherwise be between these banks. The proposed
merger would eliminate the opportunity for competition between the merging banks should such common
ownership be terminated in the future.

141

THE PEOPLES NATIONAL BANK, GREENVILLE, S.C., AND OCONEE COUNTY BANK, SENEGA, S.C.
Banking offices
Name of bank and type of transaction

Total assets
In operation

Oconee County Bank, Seneca, S.C, with
and The Peoples National Bank, Greenville, S.C. (10635), which had
merged Dec. 31, 1968, under charter and title of the latter bank (10635). The
resulting bank at date of merger had. -. _

COMPTROLLER'S DECISION

On September 17, 1968, Oconee County Bank,
Seneca, S.C, with IPG deposits of $3.3 million, and
The Peoples National Bank, Greenville, S.G., with
IPG deposits of $62.7 million, applied to the Comptroller of the Currency for permission to merge under
the charter and with the title of the latter.
Greenville, S.C, home of the charter bank, is the
county seat of Greenville County and a major trading
and supply center for the Piedmont region of the State.
Greenville is the second largest city in the State and,
together with Spartanburg, located 30 miles northeast
of Greenville, constitutes a major industrial complex
consisting primarily of textile manufacturing. It is,
however, enjoying growing diversification. The population is increasing steadily, unemployment is low,
and family income is relatively high.
The charter bank commenced business in 1887 under
a State charter and converted to a National bank in
1914. It operates 13 offices throughout the Greenville
trade area and is aggressive in seeking out new opportunities to serve the community. Intense competition in the Greenville area is afforded by offices of the
$468 million South Carolina National Bank, the $247
million Citizens and Southern National Bank, the $117
million State Bank and Trust Company, as well as
several other smaller banks, savings and loan associations, and other types of nonbank financial institutions.
Seneca, the location of the merging bank, is located
in Oconee County, about 40 miles southwest of Greenville. It has a present population of 7,000 inhabitants
and enjoys a diversified industrial economy supplemented by agriculture and the educational facilities of
Clemson University.
The merging bank, chartered in 1954, operates one
office. It cannot meet the larger credit requirements

142




U, 913, 721
89, 081, 954

To be operated

1
13

93,995, 675

14

of its local customers. Its competition comes from a
branch of the $468 million South Carolina National
Bank in Seneca.
Since the two applicant banks do not maintain offices in close proximity, there exists no competition
between them that would be adversely affected by consummation of the proposed merger.
The proposal would, however, introduce into the
trade area of the merging bank another source of
full banking services. Banking competition would be
enhanced and the need for alternative banking services
would be met.
Applying the statutory criteria, we conclude that
the proposal is in the public interest. The application
is, therefore, approved.
NOVEMBER 4,1968.
SUMMARY OF REPORT BY ATTORNEY GENERAL

Peoples maintains its headquarters in Greenville
(population 70,500), and all of its branches in Greenville County (population 238,000), which is separated
from Oconee County (population 42,100) by Pickens
County.
The nearest offices of Peoples and Oconee Bank are
35 miles apart and there are a number of banks operating in the intervening area. Thus, there appears to be
no existing competition between the merging banks.
South Carolina law permits statewide branch banking. Thus, Peoples is a potential competitor of Oconee
bank through de novo branching. However, six banks,
including South Carolina National Bank (total deposits, $400 million), First National Bank of South
Carolina (total deposits, $181 million), and Southern
Bank & Trust Company (total deposits, $40 million),
already operate eight offices in Oconee County.

THIRD NATIONAL BANK IN NASHVILLE, NASHVILLE, TENN., AND THIRD STATE BANK, N.A., NASHVILLE, TENN.
Banking offices
Total assets

Name of bank and type of transaction

In operation

Third State Bank, N.A., Nashville, Tenn. (13103), with
and Third National Bank in Nashville, Nashville, Tenn. (13103), which had
consolidated Dec. 31, 1968, under charter of the former bank (13103) and title
"Third National Bank in Nashville." The resulting bank at date of consolidation
had
-

COMPTROLLER'S DECISION

On October 21, 1968, the Third National Bank in
Nashville, Nashville, Tenn., and the Third State Bank,
N.A. (organizing), Nashville, Tenn., applied to the
Comptroller of the Currency for permission to consolidate under the charter of the latter and with the
title of the former.
The Third National Bank in Nashville, Nashville,
Tenn., was organized in 1927 and presently holds IPC
deposits of $310 million at its main office and 15
branches, all of which are located in the metropolitan
Nashville-Davidson County area, which has a population estimated at 469,000.
The Third State Bank, N.A. (organizing), Nashville,
Tenn., is being organized as a vehicle to facilitate the
acquisition of the Third National Bank in Nashville by
the NLT Corporation, a Delaware corporation with its
main office in Nashville, Tenn.
Since the charter bank will carry on no banking

$250, 000
557, 596, 354

To be operated

0
18

18

557, 603, 554

business unless, and until, the proposed consolidation
has been effectuated, no existing or potential competition will be eliminated by the merger. Service to the
public will not be affected as the continuing bank will
do business through the personnel and physical plant
of the Third National Bank in Nashville. Approval
of this proposal will, however, facilitate the corporate
reorganization of the title bank.
Applying the statutory criteria, we find that this consolidation is in the public interest, and the application
is, therefore, approved.
NOVEMBER 25,1968.
SUMMARY OF REPORT BY ATTORNEY GENERAL

[This] * * * merger is part of a transaction which
will result in a presently existing bank becoming a subsidiary of a one-bank holding company. Thus, * * *
[it] is merely part of a corporate reorganization and as
such will have no effect on competition.

UNITED STATES NATIONAL BANK OF OREGON, PORTLAND, OREO., AND UNIT NATIONAL BANK OF OREGON, PORTLAND, OREG.
Banking offices
Name of bank and type of transaction

Total assets
In operation

United States National Bank of Oregon, Portland, Oreg. (4514), with
and Unit National Bank of Oregon, Portland, Oreg. (4514), which had
merged Dec. 31, 1968, under charter of the latter bank (4514) and title "United
States National Bank of Oregon." The resulting bank at date of merger had

COMPTROLLER'S DECISION

On October 4, 1968, the United States National
Bank of Oregon, Portland, Oreg., and the Unit National Bank of Oregon (organizing), Portland, Oreg.,
applied to the Comptroller of the Currency for permission to merge under the charter of the latter and
with the title of the former.




$1,704,138,209
251, 222
1, 704,145,409

To be operated

112
0
112

The United States National Bank of Portland, Portland, Oreg., was organized in 1891, and now holds IPC
deposits of $1,159 million and maintains 110 banking
offices throughout the State. Portland, the site of
the charter bank's main office, has a population estimated at 384,000, and lies on the Columbia River,
about 110 miles southeast of the Pacific Ocean. Due to
143

its excellent transportation facilities, Portland is a major
distribution center for the Pacific Northwest. The
economy of the State of Oregon is strong, with lumber and wood products of primary importance. It also
draws support from such diversified industries as
electronics, metals, food processing, and agriculture.
The outlook for further industrialization is considered
favorable.
The Unit National Bank of Oregon (organizing),
Portland, Oreg., was organized in September 1968.
This bank is a nonoperating institution, which was
created to facilitate a corporate reorganization of the
merging bank. The resulting bank will have the same
management and directorate as the merging bank, and,
with the exception of director's qualifying shares, will
be entirely owned by U.S. Bancorp, an Oregon corporation.
Since the charter bank is a nonoperating institution,
consummation of the merger will have no effect on
competition. The resulting bank will do business

through the personnel and physical facilities of the
merging bank, and there will be no change in the
service to the public as the result of this merger. Approval of this application will, however, facilitate the
acquisition of the emerging bank by U.S. Bancorp.
Applying the statutory criteria, we find that this
merger is in the public interest, and the application
is, therefore, approved.
NOVEMBER 25,1968.
SUMMARY OF REPORT BY ATTORNEY GENERAL

The proposed merger of United States National
Bank of Oregon ("USNB") into a newly organized
bank is part of a transaction which will result in the
business of USNB being conducted by a wholly owned
subsidiary of U.S. Bancorp, an Oregon business corporation. Thus, this merger is part of a corporate reorganization of USNB, and will have no effect on
competition.

WACHOVIA BANK AND TRUST COMPANY, WINSTON-SALEM, N.C., AND WACHOVIA BANK AND TRUST COMPANY, N.A., WINSTON-SALEM.
?

N.C.
Banking offices
Name of bank and type of transaction

Total assets
In operation To be operated

Wachovia Bank and Trust Company, Winston-Salem, N.C, with
and Wachovia Bank and Trust Company, N.A., Winston-Salem, N.C. (15673),
which had
merged Dec. 31, 1968, under charter and title of the latter bank (15673). The
resulting bank at date of merger had

COMPTROLLER'S DECISION

Wachovia Bank and Trust Company, the merging
bank, with IPG deposits of $892.3 million, is the
largest bank in North Carolina. It maintains its headquarters in Winston-Salem, and it operates 125 additional offices throughout the State. The bank has a
long and admirable history of providing progressive
banking services to the residents of North Carolina.
Wachovia Bank and Trust Company, N.A., is being
organized for the sole purpose of providing a vehicle to
transfer the assets and liabilities of the Wachovia Bank
and Trust Company to a bank organizing under a
Federal charter. Wachovia Bank and Trust Company,
N.A., will not have commenced banking operations
prior to the merger.
Wachovia Bank and Trust Company presently fur144




$1,617,645,559

125

740, 000

0

1, 618, 385, 559

125

nishes a complete line of banking services throughout
the State. All of these services will be rendered by the
surviving bank in the same manner and with the same
personnel now employed by the merging bank. The
proposed directors and executive officers of the resulting bank will be the same as those of Wachovia Bank
and Trust Company. The banking business of the
resulting bank will be carried on at the present locations of the existing bank.
Because the proposed merger involves only one
operating bank, there can be no adverse effect on competition resulting from the proposed transaction.
Applying the statutory criteria, it is concluded that
the proposal is in the public interest. The application
is, therefore, approved.
NOVEMBER 20,1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

The proposed transaction involves the reorganization of Wachovia Bank and Trust Company, a State

member bank of the Federal Reserve System, under a
National bank charter.
The proposed transaction will have no effects upon
competition.

//. Additional Approvals
A. Approved, but in litigation.
DEPOSIT GUARANTY NATIONAL BANK, JACKSON, MISS., AND CITY BANK & TRUST COMPANY, NATCHEZ, MISS:

Total assets

Name of bank and type of transaction

City Bank & Trust Company, Natchez, Miss., with
-.
.
~ ..
and Deposit Guaranty National Bank, Jackson, Miss. (15548), which had
applied for permission to merge Jan. 31, 1968, under charter and title of the latter bank (15548).
The application was approved April 29, 1968. The pending merger was challenged by Justice
Department May 28, 1968, and is presently in litigation.

COMPTROLLER'S

DECISION

On January 31, 1968, the City Bank & Trust Company, Natchez, Miss., with IPC deposits of $19.7 million, and the Deposit Guaranty National Bank, Jackson, Miss., with IPC deposits of $233 million, applied
to the Comptroller of the Currency for permission to
merge under the charter and with the title of the
latter.
The Deposit Guaranty National Bank, the charter
bank, obtained a National charter in 1965 and presently operates 21 branch offices. This bank is headquartered in Jackson, which is the business, governmental, and cultural center of the State. The Jackson
metropolitan area has a population of approximately
260,000, serviced by three additional banks in Jackson
that have a total of 15 branches within the city. Of the
190 commercial banks in the State, only two have total
resources of over $100 million and both are located in
Jackson; viz., the charter bank and its chief competitor,
the First National Bank, Jackson, Miss. The charter
bank also receives intense competition from 17 savings
and loan associations, 12 major sales finance companies, and 50 credit unions in the area. In addition to
this local competition, out-of-State banks from Memphis, Tennessee; New Orleans and Baton Rouge,
Louisiana; and Birmingham and Mobile, Alabama,
are vigorously competing in this area.
City Bank & Trust Company, the merging bank, was
organized in 1909 and presently operates four offices
located throughout Natchez. Natchez, with a popula-




$24, 855,085
393, 271,290

Banking
offices in
operation
4
21

tion of 26,000, is the county seat of Adams County and
is located in the southwestern part of the State, on the
Mississippi River adjacent to the Louisiana border.
The merging bank competes heavily with the Britton
and Koontz National Bank, Natchez, and two savings
and loan associations located in its area. Because of its
port facilities, Natchez has attracted significant industrial activity in recent years and is also the center of the
State's oil and gas industry. Although economic conditions have been progressing in the service area of
the merging bank, growth has been slow and prospects
are only fair. These conditions can be traced directly
to the inadequate banking structure of this State.
Mississippi has long been characterized as having
many small banks incapable of meeting the basic financial needs of even the modest industries located therein.
As a consequence, local industries have been forced to
look to the large nearby banking institutions located
in New Orleans, Baton Rouge, Memphis, Birmingham,
and Mobile, for the sophisticated financial services
needed to compete in today's rapidly progressing commercial world. Every effort must be exerted to restrain
this exodus of funds from the State, thus enabling them
to be used in the economic development of Mississippi.
The economy of Mississippi can be strengthened only
by financial institutions of sufficient size and capacity
to support its internal economic expansion.
The resulting bank will be able to make available
greater resources that will attract new industry, retain
the old, and thus have a significant impact on the
economic and social progress of the community. The
145

purpose to be served, therefore, is to render better
banking services to the existing public and business,
and, in addition, to attract more industry and recoup
the banking business lost to neighboring States. Specifically, the resulting bank will be able to offer a broader
range of services to the customers of the merging bank,
including automated accounting, expertise in agriculture, timber, oil and gas lending procedures, complete
trust facilities, strengthening of existing management,
a greater lending capacity, and full service banking not
presently available to the merging bank's customers.
It will enable the resulting bank to compete more effectively with the banks now operating in the area
and thus bring to the residents of Natchez the full
benefits thatflowfrom aggressive competition.
It appears that little, if any, competition would be
eliminated by the merger, because the closest offices of
the charter and merging banks are 49 miles distant.
There does not appear any overlapping in the areas
presently served by the participants and no banking
offices will be eliminated.
Nor will this merger adversely affect potential competition between the banks here involved. It seems
eminently clear that the acquiring bank does not now
cast a shadow over, nor influence, the present Natchez
banking market in regard either to services offered or
to rates paid or charged on deposits or loans. Nor does
the acquiring bank have any present intent to enter the
Natchez market by a de novo branch. Such an entry
by the acquiring bank could, and in all likelihood,
would, when viewed in the light of Mississippi banking
history, cause it to lose a substantial amount of its correspondent bank balances from banks that would resent and be fearful of other de novo entries into their
own market. Such correspondent balances, if lost,
would shift to large banks in neighboring States to the
ultimate detriment of Mississippi.
Applying the statutory criteria, we conclude that the
proposal is in the public interest, and the application is,
therefore, approved.
APRIL 29,

1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

Deposit Guaranty National Bank ("Deposit
Guaranty"), the largest bank in Mississippi, proposes to
merge City Bank & Trust Company (City Bank"),
the largest bank in Adams County, Miss. (Natchez
SMSA).
Natchez (population 26,200) is the principal cen-

146




ter and county seat in Adams County (population
40,500), a traditionally agricultural area in southwest
Mississippi. It is, however, becoming increasingly industrialized and has already attracted some large
manufacturing and industrial firms. City Bank is the
largest of only two banks located in this area.
The closest office of Deposit Guaranty is about 49
miles from any office of City Bank; moreover, numerous offices of other banks are located between the
applicant banks. Therefore, the merger would not appear to eliminate any significant amount of existing
competition between the two banks.
Since Mississippi law permits branch banking within
100 miles of the parent bank, however, Deposit Guaranty is a potential de novo entrant into Adams County.
As the State's largest bank, Deposit Guaranty has the
economic resources to expand de novo into the Natchez
SMSA, and appears to be one of the two most likely
potential entrants into the area. In view of the economic and industrial growth potential in the Natchez
SMSA, it would appear that Deposit Guaranty has,
in addition, the incentive to expand into that market.
The loss of potential competition which would result from the proposed merger is particularly serious
in view of the extremely high level of concentration in
Natchez and Adams County, and City Bank's dominant position in this market.
Finally, it should be noted that the second largest
bank in Mississippi, the First National Bank of Jackson, merged with four banks in 1966, and has an application pending at this time to merge with the largest
bank in Greenwood, with assets of approximately $26
million. Deposit Guaranty and First National Bank of
Jackson, already the two largest banks in Mississippi,
with 14.3 percent and 13.6 percent, respectively, of
total State deposits, are continuing to increase their
leading positions through the merger process. This acquisition trend, by reducing the establishment of de
novo branches by the State's largest banks, will undoubtedly inhibit the development of a more competitive banking structure in local markets throughout the
State. Moreover, acquisitions of this type tend to foreclose the creation by smaller banks such as State Bank,
which are leading banks in their separate local markets, through merger or internal growth, of banking
institutions capable of competing with the largest
banks in the State for the business of large commercial
and industrial customers.
We conclude, therefore, that the merger would have
a significantly adverse effect on potential competition.

FIRST NATIONAL BANK OF JACKSON, JACKSON, MISS., AND THE BANK OF GREENWOOD, GREENWOOD, MISS.
Banking

Name of bank and type of transaction

Total assets

The Bank of Greenwood, Greenwood, Miss., with
and First National Bank of Jackson, Jackson, Miss. (10523), which had
applied for permission to merge Jan. 23, 1968, under charter and title of the latter bank (10523).
The application was approved Apr. 29, 1968. The pending merger was challenged by Justice
Department May 28, 1968, and is presently in litigation.

COMPTROLLER'S

DECISION

On January 23, 1968, The Bank of Greenwood,
Greenwood, Miss., with IPG deposits of $23 million,
and the First National Bank of Jackson, Jackson, Miss.,
with IPG deposits of $210 million, applied to the
Comptroller of the Currency for permission to merge
under the charter and with the title of the latter.
Mississippi traditionally has had an agricultural
economy with a small amount of agriculture-oriented
industry. It has been marked by the lowest wage scales
in the country and a generally low level of capital accumulation. In recent years, the introduction of modern farming methods and the increasing mechanization
of agriculture have disrupted traditional employment
relationships and caused a shift of population from
rural to urban areas, which has aggravated the already
massive social and economic problems of the State.
Mississippi has embarked on an ambitious, long
range program designed to attack its problems by encouraging the entry of business enterprises to the
State and by training unemployed or underemployed
workers in the skills necessary to meet the demands of
these industries. An indispensable element in its program is the creation of an appropriate financial climate, including the availability of commercial banks
with the strength and range of services necessary to
meet the demands of modern industry. While there
are many small banks in Mississippi competing in the
retail banking market, only a few banks are capable of
providing adequate banking service at the wholesale
level. For this reason, many of the State's businesses
have long maintained their most important banking
relationships in Memphis, Tenn.; New Orleans, La.;
and Birmingham, Ala. If the State of Mississippi is to
solve its pressing problems by improving its economic
base, it must develop banks with the capacity and
capability of serving the needs of the industries it
hopes to attract to and retain within its borders.
The Bank of Greenwood was organized in 1933, and
maintains one branch office in Greenwood. Greenwood, with a population of 25,000, is the seat of Leflore




$29, 608, 000
348, 838,463

offices in
operation
2
21

County, which is an area supported by an agricultural
economy. It is the most important cotton market in
Mississippi and, due to its favorable transportation
characteristics, it is also an important distribution center for this part of the State. Efforts are being made to
diversify and strengthen its economy by attracting
additional industrial plants.
The First National Bank of Jackson, Jackson, Miss.,
was organized in 1889 and acquired a National charter in 1914. It has 10 branches within the city of Jackson, six branches in the southern part of the State, and
four branches in the Greenville area in the west-central
part of the State. The city of Jackson, with a population of 260,000, is the capital of Mississippi and lies in
the geographical center of the State. The economy of
the area is supported by a large number of manufacturing establishments and by Mississippi's expanding
oil and gas industry.
There is no significant competition between the
merging banks, whose main offices are 94 miles apart.
Some 46 miles separate the merging bank from the
charter bank's nearest branch at Greenville. In the
light of Mississippi banking history, the establishment of
a de novo branch by the charter bank would not provide a realistic means of entry into the Greenwood area.
Such a move would probably cause a massive loss of
correspondent banking deposits to the detriment not
only of the charter bank, but also of the State of Mississippi; these deposits would, in all probability, leave
for banks in neighboring States.
If the merger is consummated, the percentage of
banking assets held by the charter bank will be increased only slightly. The resulting bank will continue
to face intense competition from Mississippi's largest
commercial bank, the Deposit Guaranty National
Bank, Jackson, Miss., with deposits of $339 million, and
from many other commercial banks, savings institutions, credit unions, and salesfinancecompanies, as well
as out-of-State banks.
On consummation of this merger, the residents of
Greenwood will have available the financial resources
147

of one of the State's largest commercial banks. The
increased lending limit, the availability of a foreign
department, and electronic data processing facilities,
will aid in attracting further business activity to the
Greenwood area. As a branch of the charter bank, the
merging bank will make available the services of a
strengthened trust department, and increased installment lending, while management continuity will be
assured.
Applying the statutory criteria, we conclude that the
proposal is in the public interest, and the application
is, therefore, approved.
APRIL 29,1968.
SUMMARY OF REPORT BY ATTORNEY GENERAL

The First National Bank of Jackson ("FN of Jackson") is the second largest bank in Mississippi. In addition to its main office in Jackson, it operates 10
branch offices within the city of Jackson; a branch
bank and three branch offices in Greenville, about 90
miles northwest of Jackson; a branch bank and one
branch office in McComb, about 75 miles south of
Jackson; a branch bank in Tylertown, about 80 miles
south of Jackson; and a branch bank and two branch
offices in Gloster, about 90 miles southwest of Jackson.
These four branch banks are the result of the merger
of four banks on January 1, 1966. The deposits of
these four banks at the time merged were in excess
of $44 million.
The Bank of Greenwood is located in Greenwood,
which is approximately 90 miles north of Jackson.
Greenwood has experienced a substantial increase in
population since 1960 and is the trading center in
this section of Mississippi. It is the most important
cotton center in Mississippi, but is growing in industrial importance.
Bank of Greenwood is by far the dominant bank in
Greenwood and in Leflore County, where Greenwood
is located, accounting for approximately 52 percent
of the total commercial deposits of the four banks in
the city, and 49 percent of total (and 53 percent of
IPG demand) deposits of the five banks in the county.
Leflore County is a concentrated market, in which the
two largest banks hold 68.7 percent of total county
commercial bank deposits.
Greenwood is located within 100 miles of Jackson.
Hence, under Mississippi banking laws, FN of Jack-

148




son may establish a de novo branch bank in Greenwood. It may also establish de novo branch banks in
any city or town of Leflore County, so long as it is
within 100 miles of Jackson and has a population in
excess of 3,100 or, if less, has no bank in operation
there. In view of its resources, capabilities, and incentives, and its demonstrated interest in expanding its
operations, FN of Jackson is one of the most probable
entrants, by de novo branching or by acquisition of a
small existing bank, into Leflore County.
The closest branch of FN of Jackson to Greenwood
is located in Greenville, 54 miles to the west of Greenwood. In view of the distance between the closest
offices of the merging banks, the existing competition
between them is probably minimal.
The proposed acquisition of Greenwood Bank would
eliminate First National of Jackson as one of the two
most likely potential de novo entrants into Leflore
County. The possibility of such entry is particularly
significant in view of the already high concentration
of commercial banking in this market and in view of
the challenge which such a new entrant might afford
to Greenwood Bank's presently dominant position.
Finally, it should be noted that the largest bank in
Mississippi, the Deposit Guaranty National Bank of
Jackson, merged three banks in 1966, and has an application pending at this time to merge with the largest
bank in Natchez with assets of approximately $25 million. FN of Jackson and Deposit Guaranty National
Bank, already the two largest banks in Mississippi, with
13.6 percent and 14.3 percent, respectively, of total
State deposits, are continuing to increase their leading
positions through the merger process. This acquisition
trend, by reducing the establishment of de novo
branches by the State's largest banks, will undoubtedly
inhibit the development of a more competitive banking structure in local markets throughout the State.
Moreover, acquisitions of this type tend to foreclose
the creation by smaller banks such as Greenwood Bank,
which are leading banks in their separate local markets,
through merger or internal growth, of banking institutions capable of competing with the largest banks in
the State for the business of large commercial and
industrial customers.
We conclude that the proposed merger of Greenwood Bank would have a significantly adverse effect
on potential competition.

THE FIRST NATIONAL BANK OF MARYLAND, BALTIMORE, MD., AND FIRST NATIONAL BANK OF HARFORD COUNTY, BEL AIR, M D .

Name of bank and type of transaction

Total assets

First National Bank of Harford County, Bel Air, Md. (13680), with
and The First National Bank of Maryland, Baltimore, Md. (1413), which had
applied for permission to merge Nov. 28,1967, under charter and title of the latter bank (1413).
The application was approved July 19, 1968. The pending merger was challenged by Justice
Department Aug. 16, 1968, and is presently in litigation.

COMPTROLLER'S DECISION

On November 28, 1967, The First National Bank of
Maryland, Baltimore, Md., with IPG deposits of $401
million, and First National Bank of Harford County,
Bel Air, Md., with IPG deposits of $24 million, applied
to the Comptroller of the Currency for permission to
merge under the charter and with the title of the
former. A hearing was held on this application in Bel
Air on February 28, 1968.
The Baltimore metropolitan area is the industrial
capital of Maryland. This area includes the counties of
Harford, Baltimore, Carroll, Howard, and Anne Arundel and the independent city of Baltimore, a major
port as well as a manufacturing and distribution center.
The economic importance of the area is reflected in the
population and industry statistics. Of the 3.6 million
population in the State, 55 percent, or about two million, are in the Baltimore metropolitan area. According to the 1963 Census of Manufactures, there were in
Maryland a total of 48,297 industries with an average
monthly employment of approximately 725,293; of
these, 24,552 industries employing 447,102 people were
located in or near Baltimore City. The central section
of this Standard Metropolitan Statistical Area covers
Baltimore City, most of Baltimore County, and the
northern part of Anne Arundel County, and includes
about 51 percent of the State's industrial plants, 62
percent of industrial employment, 60 percent of industrial payroll, and 60 percent of value added by
manufacture. While Maryland ranks 14th nationally
in total effective State buying income, the Baltimore
metropolitan area ranks 13th among the Nation's
metropolitan areas.
The First National Bank of Maryland, organized in
1806, is the second largest commercial bank in Maryland. Prior to the latter part of the 1950's, the bank concentrated its operations in the Baltimore area. Then,
it began expanding its facilities and services on a statewide basis as a means of keeping pace with the expanding needs of its industrialized and urbanized
State. The charter bank presently operates 41 banking




$36,355,454
651, 913,448

Banking
offices in
operation
5
41

offices and serves practically the entire State of Maryland, and fringe areas of southern Pennsylvania and
northern Virginia. Maryland now has several commercial banks which approach statewide status and
several more which are regional in scope. Prior to this
time, large business concerns had no choice but to do
business with banks located in Washington, Philadelphia, and New York to fill their needs.
Harford County, with a population of about 105,000,
is strategically situated northeast of the central portion
of the Baltimore metropolitan area and just below the
Pennsylvania State line, with substantial riparian area
on the Chesapeake Bay and the Susquehanna River.
This ideal location places the county on the main transportation corridor expanding from New England to
the south. The county has been undergoing a transformation from a predominantly agriculturally oriented
economy to one more industrial and commercial in
composition. It has experienced substantial economic
and population growth and prospects for future
growth in both respects are very good.
Bel Air, home of the merging bank, with a population of about 5,500, is the seat and retail center for
Harford County. Bel Air and its environs are considered to be a bedroom community for persons employed in the Aberdeen-Edgewood area and at the
industrial plants located in the northern part of the
central section of the Baltimore metropolitan area. In
the Aberdeen-Edgewood area, which provides the
principal employment opportunities in the county,
there are extensive military installations and a large
plant of the Bata Shoe Company. Havre de Grace,
about 5 miles northeast of Aberdeen, is the only other
concentration of population in the county.
The merging First National Bank of Harford County
was organized in 1933 and is now the largest bank
headquartered in the county. It presently operates five
offices: the main office, a drive-in facility and a branch
in Bel Air, a branch in Aberdeen, and a branch in
Edgewood. In addition to Harford County, this bank
includes the eastern edge of Baltimore County and the
149

southern fringe areas of York County, Pa., in its service area. During its first 25 years of existence in an
agricultural community, this bank grew to $8 million
in resources. Since a new president took over guidance
of the bank 10 years ago, it has grown to $33 million.
This growth is attributable to the combination of two
favorable factors, viz., the dynamism of the president
and the rapid economic development of the area.
The growth in the merging bank has created problems for it. To support its growth, the bank's capital
has been increased from $820,000 at the end of 1958
to $2,104,000 as of September 30, 1967, by the sale of
stock on four occasions. In view of increased operating costs and declining earnings, it cannot pay a sufficient dividend to make another stock offering feasible.
The inability of the merging bank to develop its capital structure at a satisfactory rate is beginning to undermine its competitive thrust.
Despite its internal growth, the merging bank has not
been able to keep pace with the economic development
of the area it serves. It needs more loanable funds to
meet the expanding credit requirements of its customers than it has been able to attract from area depositors
through its five offices. At year end 1967, 65 percent of
its deposits were loaned. If public funds on deposit are
not considered, its loan to deposit ratio would be 73
percent and its liquidity but 23 percent. Of its $19.6
million loans outstanding, only 20 percent were commercial and industrial and 75 percent were mortgage
loans. Under the restrictions applied to the volume of
mortgage loans in National banks, the merging bank
finds it has about reached its maximum. Despite its efforts to sell mortgage loans, it was compelled to turn
away some 100 mortgage loan applicants during the
last half of 1967.
For all its growth, the First National Bank of Harford County has remained essentially a "one-man operation." Though this is a tribute to the capability of the
man, it now constitutes a problem for his successor,
who recently took office. A bank this size is too large
for any one man to have sole management authority.
It requires a capable staff with a proper depth in managerial resources. The First National Bank of Harford
County does not now have such resources and their
acquisition would further squeeze its earnings.
The banking structure of Harford County, together
with the competitive forces at work therein, reflects the
problems experienced by rural communities when they
are engulfed in the suburban sprawl that emanates
from nearby metropolitan areas. The growth of Baltimore into the newly created suburbs of Harford County
are dislocating its agricultural economy. The locally

150




headquartered banks are not geared to meet the growing demand for funds and services. The six banks headquartered in the county are: the $3 million Aberdeen
National Bank, the $5 million Citizens National Bank
of Havre de Grace, the $7 million Forest Hill State
Bank, the $12 million First National Bank and Trust
Company of Havre de Grace, the $23 million Commercial and Savings Bank in Bel Air, and the $34.5 million merging First National Bank of Harford County.
These six banks aggregate only $84.5 million in total resources to serve this growing industrial and commercial
suburb. None of these banks possess the capacity to
provide either the funds or the broad range of services
required by some old and growing customers in the
area and many new customers entering the area.
The ever-increasing financial needs of both old and
new banking customers in this general area are now
being served in considerable part by out-of-county
banks. Two Baltimore based banks, which operate
seven branch offices in the county, serve many of the
larger, and some of the smaller, credit customers in the
county. These two banks are the $417 million Union
Trust Company with one office in Belcamp and the
$425 million Equitable Trust Company with offices in
Aberdeen, Darlington, Joppatowne, Aberdeen Proving
Grounds, and Bel Air, all in Harford County. Three
York, Pa., banks also serve the northern reaches of
Harford County. They are the $138 million York Bank
and Trust Company, the $238 million National Bank
and Trust Company of Central Pennsylvania, and the
$66 million Southern Pennsylvania National Bank,
which maintain offices in Delta, Fawn Grove, and
Stewartstown, close to the Maryland-Pennsylvania
border.
Because Harford County is a growing industrial and
commercial suburb of Baltimore, other out-of-county
financial institutions canvass it regularly for prime
business accounts. The four large banks in Wilmington,
Del., none of which is under $125 million, continually
compete for good accounts in Harford County. Four
billion-dollar banks in Philadelphia also solicit the
area for such loans and deposits that they can garner
in competition with the local banks.
The savings and loan associations present a peculiar
type of competition for the Harford County banks.
Operating in the county and in the Bel Air area are
the $360 million Loyola Federal Savings and Loan
Association, the $25 million Century Savings and Loan
Association, both headquartered in Baltimore, and two
smaller local associations. Though these associations
compete keenly for the savings dollars of local residents, there is a pervasive reluctance to invest in local

home mortgages when higher rates can be obtained
elsewhere in other States. This is the trend though
Harford County continues to be a capital deficit area.
When this merger is assessed in the light of the
banking competition that presently prevails in Harford
County, its impact is de minimis. The market share of
county-generated loans and deposits held by the First
National Bank of Harford County, in relation to those
held by competitor in-county and out-of-county banks
and other financial institutions, is small. Moreover, the
record reveals that the acquiring First National Bank
of Maryland, for whatever reason, has never solicited
business in Harford County. It is clear that the proposed merger will not substantially lessen any presently
existing competition between the merging banks.
Whether this merger will substantially lessen potential competition between the participating banks is
highly speculative. The record indicates that the present thinking of the management of The First National
Bank of Maryland is to avoid a de novo entry by
branching, because of their view that Harford County,
with 22 banking offices serving 105,000 people, or
4,773 per office, already has sufficient banking facilities.
To those physically in the county must be added those
just across the Pennsylvania line. This Office, in assessing the "convenience and needs of a community,"
must take into account the possible strain on the
solvency of existing institutions which would result
from the added competition stemming from establishment of additional offices.
To insist that this proposal will substantially lessen
potential competition because the statutes of Maryland
make it possible, in theory, for The First National
Bank of Maryland to branch de novo into Bel Air, is to
ignore the realities of banking in Harford County. It
is already clear that the county-headquartered banks
are facing sharp competition for deposits and the better
loans from large out-of-county banks. To insist that
another large out-of-county bank add its competitive
force to the local banking market by opening new
branches is to aggravate the problems of the local
banks.
This merger proposal is in the public interest. It will
aid the general economy of Harford County. In addition to bringing to Bel Air a larger bank with a substantial reserve of loanable funds and a greater lending
capacity, it brings a bank with a greater breadth of
services capable of serving a wider spectrum of the




banking public. The First National Bank of Maryland
will bring to Harford County the loanable funds the
area cannot now generate for its own development and
will provide it credit for its impending commercial
and economic development. On balancing of all factors, it appears that this proposed merger will foster the
economic life of the State of Maryland.
Applying the statutory criteria to this proposal, it is
found to be in the public interest. The application is,
therefore, approved.
JULY 19,

1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

The proposed merger would unite the First National
Bank of Harford County ("Harford National"), the
largest commercial bank in Harford County, with
the First National Bank of Maryland ("Maryland
National"), the second largest bank in the State of
Maryland.
Harford County is one of the rapidly growing suburban counties on the northern edge of the Baltimore
metropolitan area. In response to this growth, banks
headquartered in the city of Baltimore, as well as those
headquartered in Harford County, have been expanding throughout the county.
Of the eight banks operating in Harford County,
Harford National is the largest, with 31 percent of
total deposits in the county. There would appear to be
little competition between the merging banks. The
closest offices are 16 miles apart in separate counties.
Maryland National would appear to be a probable potential entrant into Harford County through de novo
branching—which is permitted by State law—or by
acquisition of a smaller bank.
Potential competition is a significant consideration
here because Harford County is already a concentrated
banking market. The two largest banks presently have
about 53 percent of the total county deposits and the
five largest, 85 percent. The bank to be acquired—
Harford National—holds the highest proportion of
county deposits of all banks in the market, or about
30 percent of IPC demand and 31 percent of total deposits. The proposed merger would, thus, combine the
largest competitor in the county with one of the most
probable potential entrants into the market. In the circumstances, we conclude that the proposed merger
would have a significantly adverse effect on competition in commercial banking in Harford County.

151

VIRGINIA NATIONAL BANK, NORFOLK, VA., AND BANK OF HAMPTON ROADS, NEWPORT NEWS, V A .

Name of bank and type of transaction

Total assets

Bank of Hampton Roads, Newport News, Va., with
and Virginia National Bank, Norfolk, Va. (9885), which had
applied for permission to merge Sept. 26, 1968, under charter and title of the latter bank (9885).
Tne application was approved Dec. 27, 1968, The pending merger was challenged by Justice
Department Jan. 19, 1969, and is presently in litigation.

COMPTROLLER'S DECISION

On September 27, 1968, the Bank of Hampton
Roads, Newport News, Va., and the Virginia National
Bank, Norfolk, Va., applied to the Comptroller of the
Currency for permission to merge under the charter
and with the title of the latter.
The Newport News-Hampton Standard Metropolitan Statistical Area, consisting of the independent
cities of Newport News and Hampton as well as York
County, has an estimated population of 282,000. The
economy of the area is based primarily on Federal
Government activities and port-oriented industries and
services.
The Virginia National Bank, Norfolk, Va., with IPC
deposits of $566 million, operates 78 offices in southern
and central Virginia. The charter bank, opened in
1867, is the second largest banking institution in the
State. This financially sound bank, with experienced
management, offers a full range of banking services to
its customers.
The Bank of Hampton Roads, Newport News, Va.,
with IPC deposits of $16 million, was chartered in
1934 and operates three branches in Newport News
and one branch in Hampton, Va.
The merging bank presently competes in Newport
News, with offices of three of the largest banking institutions in the State, which together control more than
90 percent of the bank deposits in the city. These are
branches of First and Merchants National Bank, Richmond, Va., and two member banks of Commonwealth
Bankshares, Inc., and United Virginia Bankshares,
Inc., which are registered bank holding companies.
Since 1962 the merging bank has found itself in an
increasingly poor competitive position to these three
institutions as reflected in its earnings. Economies necessitated by this adverse earnings structure have resulted in an unfavorable salary scale and a reduction
in physical plant expansion. The entry of the charter
bank into this area would not adversely affect the competitive position of any of the banking institutions in
Newport News nor eliminate any banking alternatives.
152




Banking
offices in
operation

$19,862,000
735,572, 976

5
78

Although closely integrated in many aspects, the
cities of Hampton and Newport News are two distinct
banking markets. While the charter bank has eight
banking offices in Hampton, it holds less than one
percent of the total deposits in Newport News, which is
indicative of how little cross-over occurs between the
banking public of the two cities.
The relative competitive position of the charter bank
will not be changed by the approval of this merger.
Competition in Hampton between the subject banks is
insignificant, with very few common customers, and
due to the present size of the merging bank, the merger
would not significantly affect the statewide competitive
position of the charter bank.
The proposed merger would represent an additional
choice of a broad range of banking services in Newport
News, which would be unavailable otherwise, since the
charter bank is prohibited by State law from branching
de novo in that city.
Considered in the light of the statutory criteria, this
merger is judged to be in the public interest, and is,
therefore, approved.
DECEMBER 27,1968.
SUMMARY OF REPORT BY ATTORNEY GENERAL

Virginia National, the State's second largest commercial bank, operates eight branch offices in Hampton (population 89,000), the closest of which is only
V/% miles from Hampton Bank's branch office in
Hampton. Virginia National does not operate an office
in Newport News (population 134,000), where Hampton Bank has four offices, but generates banking business in the Newport News area from its Hampton
branches, all of which lie within a radius of 8 miles of
the head office of Hampton Bank. Thus, this proposed
merger would eliminate direct competition between
these banks.
Four banks operate in Hampton. As of June 30,
1966, Virginia National, with eight offices, held the
largest share, or 42 percent, of IPC demand deposits
and Hampton Bank held the smallest share, or 8 per-

cent of such deposits. The two other banks operating
in Hampton have total deposits of $61.5 million and
$12.5 million. If this merger were consummated, Virginia National would hold about 50 percent of Hampton's IPC deposits, and two banks would hold about 81
percent of such deposits.
Hampton Bank is the fifth largest of the seven
banking organizations operating in the Newport NewsHampton area (i.e., the contiguous independent cities
of Hampton and Newport News). As of June 30,1966,
Hampton Bank held the fifth largest share, or 8 percent, of IPG deposits in this area and Virginia National
held the fourth largest share, or 12 percent, of such
deposits. As of this date, four banks held about 80
percent of such deposits in this market. If this merger
were consummated, Virginia National would hold the

third largest share, or about 20 percent, of such
deposits and four banks would hold about 93 percent.
The proposed merger would eliminate existing direct
competition between Hampton Bank and Virginia
National in Hampton and in the Newport NewsHampton market, and significantly increase concentration in both these areas. Furthermore, it would
eliminate an independent bank from the HamptonNewport News market. In view of Virginia law, which
permits statewide branching only by merger, it is particularly important to preserve existing independent
banks in a market as a basis of additional entry, rather
than allowing them to be eliminated by merger with
existing competitors already in the market.
We conclude that this merger would have a significantly adverse effect on competition.

B. Approved, but abandoned after litigation.
BANK OF LAS VEGAS, LAS VEGAS, NEV., AND NEVADA NATIONAL BANK OF COMMERCE, RENO, NEV., AND VALLEY BANK OP
NEVADA, RENO, NEV.

Name of bank and type of transaction

Total assets

Bank of Las Vegas, Las Vegas, Nev., with
Valley Bank of Nevada, Reno, Nev., with
and Nevada National Bank of Commerce, Reno, Nev. (15645), which had
applied for permission to merge May 20, 1968, under charter of the latter bank (15645) and
title "Valley National Bank of Nevada." The application was approved July 26, 1968, but was
abandoned by the banks Dec. 24, 1968, after filing of antitrust suit by the Justice Department.

COMPTROLLER'S DECISION

On May 20, 1968, the Nevada National Bank of
Commerce, Reno, Nev., the Bank of Las Vegas, Las
Vegas, Nev., and the Valley Bank of Nevada, Reno,
Nev., applied to the Comptroller of the Currency for
permission to merge under the charter of the Nevada
National Bank of Commerce and with the title of the
"Valley National Bank of Nevada."
The State of Nevada consists largely of a great arid
plateau, dotted with many buttes and basins, and intersected by numerous mountain ranges which generally run in a north-south direction. Although in area
Nevada ranks seventh of the 50 States in the Union,
in population it ranks 47th with an estimated 500,000
inhabitants. Eighty-six percent of the State's land area
is owned by the Federal Government. Tourism, encourged by permissive gambling and liberal divorce
statutes, is a very important source of income and a
major contributor to State government revenues. Al-




$129,943,000
20, 365, 000
110,429,365

Banking
offices in
operation

11
4
19

manufacturing is relatively unimportant in
providing employment, the development of new sources
of hydroelectric power and the recent entry of large
diversified corporations are expected to generate increased industrial activity. Mining, agriculture, and
ranching are important economic factors in many areas
of the State.
For historical and geographical reasons, the economic life of the State has developed around two
widely separated population centers located 450 miles
apart. One is the Reno-Sparks metropolitan area located in Washoe County near Lake Tahoe in the
northwestern part of the State. This population center
accounts for 125,000 residents and is only 130 miles
from Sacramento and 221 miles from San Francisco.
The other population concentration centers around
Las Vegas in Clark County, which is situated in the
southeastern part of the State. It has a population of
150,000 persons. This city is 282 miles from Los Angeles. The fact that these two cities are not linked by rail
153

is attributable to the fact that each lies on a different
historical trade route west to California, viz., Reno
was on the route to San Francisco and Sacramento, and
Las Vegas was on the route to Los Angeles.
The differing economic factors that support life in
these two cities tend to divide the State of Nevada.
The economy of the Reno-Sparks area is well-diversified, as it draws support not only from tourism, but
also from agriculture, ranching, mining, and warehousing. The economic life of Clark County is concentrated in the Las Vegas area where the large
hotel-casino operations and related tourist-oriented
services form the major source of employment. A large
Air Force base and some industrial plants located at
Henderson, a few miles south of Las Vegas, give additional stimulus to the county's economy. In recent
months. Las Vegas has been viewed as a potential site
for the construction of major air facilities for international travel in the coming age of the supersonic jet
transports. The fact that Nevada has a "free port"
status and a liberal tax structure encourages its development and makes it an attractive base of operations for
out-of-State distributors.
Nevada appears to be entering a new phase of economic development marked by the consolidation of
various resort hotels and other properties under giant
corporations, such as the Hughes Tool Company, the
Del E. Webb Corporation, and the Continental Connector Corporation. The growth rate of Nevada in
recent years, both in terms of population and income,
has been far above the national average, and this trend
is expected to continue for the foreseeable future. This
incipient development may eventually work toward the
economic integration of this politically unified area.
The banking structure of Nevada is unique. Whereas
this sparsely populated State today has 11 banks, it had
none in the early 1930's. At that time, when all local
efforts to rehabilitate the closed banks had proved
ineffective, California bankers were invited to lend
their expertise and they succeeded in establishing the
First National Bank of Nevada under the control of the
Transamerica Corporation. When the Transamerica
Corporation, by court order, was forced to divest itself
of some holdings, this bank became a subsidiary of
Western Bancorporation, which now controls 23 banks
in 11 Western States, with total resources of $8.5 billion. The First National Bank flourished and now
controls total deposits of $461 million in 31 offices,
more than half of the State's total deposits. Together
with the Bank of Nevada, Las Vegas, another subsidiary of Western Bancorporation, these banks control
60 percent of the State's deposits. While Western Ban154




corporation's market share in Nevada has been declining since the First National Bank of Nevada was
established, it now appears that a new, aggressive, and
comparably competent bank is needed as a competitor
to improve the banking structure.
Since the formation of the First National Bank of
Nevada in the 1930's, eight other banks which are now
operational have been chartered in the State. This
merger is proposed to unite the second, third, and
seventh largest banks to create a stronger second bank
to compete with the State's largest bank. Since this
merger, if consummated, will eliminate two banks and
leave the State with seven, the ultimate question is
whether or not approval of this application will serve
the best interests of the general public of Nevada.
The Nevada National Bank of Commerce, Reno,
Nev., under the charter of which this merger is to be
accomplished, was organized in 1938 as a State bank
with its head office in Elko, Nev. In 1946, it relocated
its main office in Reno. This bank, which converted to
a national association in 1968, operates 18 branch
offices, five acquired through old mergers and 13 de
novo. It now has total resources of $111 million and
total capital of nearly $10 million.
The Nevada National Bank of Commerce has had
an unusual number of changes in ownership in recent
years. This bank, long owned by two men and their
families, was sold in 1963 to the First Western Financial
Corporation, a holding company. First Western at that
time also owned a substantial savings and loan association, a title company, and an insurance company.
When First Western's nonbanking subsidiaries were
under financial strain, First Western sold the bank to
the newly formed First Bancorporation in 1965 to raise
the needed funds. In 1968, a stockholder of First Bancorporation sold his substantial interest to the present
owners, who also own the Bank of Las Vegas and the
Valley Bank of Nevada.
During the course of these changes in ownership, the
progress of the bank was impeded. Although the bank
maintained a more than adequate capital structure, its
assets deteriorated and its liquidity declined. Because
of the uncertainty of its future, senior management has
been unable either to recruit capable personnel or to
retain its former staff. Management depth and succession constitute this bank's most pressing current
problem.
The Nevada National Bank of Commerce has total
deposits of $94 million in its 19 offices and total loans
of $76 million. Its offices are widely scattered. There
are five in the Reno-Sparks area and 10 in outlying

rural communities in northern Nevada. Of the three
branches it established since 1964 in the Las Vegas
area, two have very nominal deposit totals. Its remaining branch is located in the town of Pioche, close to
the eastern border of the State. Most of this bank's
loans are centered in the consumer installment category and in loans to agricultural, ranching, and mining
enterprises.
The Bank of Las Vegas, Las Vegas, Nev., with deposits of $121 million, was organized in 1953 and now
operates nine branches, five of which are located in
Las Vegas and four in small nearby communities in
Clark County. It has never branched in northern
Nevada because of the prohibitive costs involved in
overcoming the distance factor. The bank has received
approval to open a branch at Boulder City, about 23
miles southeast of Las Vegas, in Clark County. The
Bank of Las Vegas, which offers a full range of banking services including trust department and computer
services, is under aggressive senior management and
has ample personnel resources. It has concentrated its
lending activity with the large hotel-casino operations
in Las Vegas and has made virtually no agricultural
loans. While it has experienced steady growth in its
market area, its capital growth has not kept pace with
its deposit growth.
The Valley Bank of Nevada, Reno, Nev., with deposits of $18 million, was organized in 1963 and operates a branch in Sparks and one at Incline Village,
near Lake Tahoe, about 36 miles southwest of Reno.
The bank lacks many of the services normally associated with a commercial bank and has not been a
strong competitor in the Reno-Sparks area, where it
holds less than 5 percent of the commercial banking
deposits. It has concentrated its lending activity in the
commercial business area, with only a nominal volume
of installment consumer loans, and does not serve its
customers in the real estate and agricultural lending
areas. This bank, too, requires more capital funds.
There will be no substantial lessening of competition
between the Bank of Las Vegas and the Valley Bank
upon consummation of this proposal. Because all of
the offices of the Bank of Las Vegas are located in the
southern part of the State in Clark County and all of
the offices of Valley Bank of Nevada are located in
the northern part of the State, separated by 450 miles
of arid land and traversed only by a two-lane highway,
there is no present competition between them. Both
these banks are under common control; a group of
shareholders in the Bank of Las Vegas organized the
Valley Bank of Nevada in 1964. Such common owner-




ship precludes effective competition between them.
Because these two banks, commonly owned and serving
different economic regions of the State, can each
branch de novo in their own area, there is no reason
to believe that there is any potentiality for competition
between them to be lessened by this merger.
The competition presented by the Nevada National
Bank of Commerce through its 19 offices to the other
participating banks is also inconsequential. In the
Reno-Sparks area this bank, through five offices, competes only for deposits with the two local offices of the
Valley Bank of Nevada. When the scope and range of
services offered by these two banks are compared, it is
clear they are not fully or effectively competitive. The
concentrations manifest in their loan portfolios reveal
they do not seek out the same customers; the Nevada
National Bank of Commerce is diversified among
mortgage, commercial and industrial, consumer installment, and farm loans while Valley Bank of Nevada
is primarily limited to commercial and industrial
loans—many purchased from the Bank of Las Vegas.
The competition in Las Vegas between the Nevada
National Bank and the Bank of Las Vegas is also
slight. Although the Nevada National Bank of Commerce may have intended, as a State bank, to compete
for the profitable accounts of the hotels and casinos
when it entered the area by de novo branches, it has
learned that without a staff experienced in this specialized lending it cannot profitably service such accounts.
Absent its ability to compete for specialized casino
loans, Nevada National Bank of Commerce finds its
competitive thrust in the Las Vegas market virtually
limited to the quest for retail deposits. Such limited
competition does not effectively serve the public interest of Clark County.
Whatever slight degree of banking competition may
be demonstrated between the participating banks for
the savings dollars of the communities they now serve
must be considered in the light of the competitive
thrust of savings and loan associations and other financial institutions competing in the Nevada markets.
There are six savings and loan associations in Nevada
which hold $613.8 million in assets derived through 18
offices. Of this volume of assets, 68.2 percent are allocable to Clark County alone. No figures are readily
available to measure the competitive impact of insurance companies, credit unions, finance and small loan
companies, and lending agencies of the U.S. Government, which are known to compete for both deposits
and loans throughout the State.
The effect of this proposal on banking concentration
in Nevada will not be adverse on balance. The follow155

ing table indicates the market share of deposits held
by each of the nine commercial banks in the State:
Total
deposits
Offices (percent)

Western Bancorporation:
First National Bank of Nevada
Bank of Nevada
Subtotal
Merging banks:
Bank of Las Vegas
Nevada National Bank of Commerce..
Valley Bank of Nevada
Subtotal
Other banks:
Security National Bank of Nevada
Nevada State Bank
Pioneer Citizens Bank
First National Bank, Ely

30
8

50
10

38

60

10
19
3

15
11
2

32

28

9
1
2
1

7
3
1
1

Subtotal

13

12

Totals

83

100

These nine banks hold aggregate deposits of $835.9
million in their 83 offices for an average of $10 million
per office, although the market shares must be shaded
downward when the competition of the savings and
loan associations is included. The six savings and loan
associations have aggregate share accounts of nearly
$613.8 million in 18 offices, or an average of $34 million per office. Even in light of the immediately preceding figures, consummation of the merger will
increase the market share of the charter bank. But by
increasing charter bank's market share, with its attendant increase in lending limits, amount of loanable
funds, and increased strength of management, the
effectual monopoly of Western Bancorporation banks
in the State will be lessened. It appears to be in the
public interest to provide two strong bank organizations
to serve an entire State instead of permitting one to
continue to do so. Whereas the six largest banks in the
State now control 95 percent of total deposits in the
State, following the merger the six largest banks will
control 99 percent of the deposits, a change of only
4 percent
The effect of this merger upon the concentration of
loans made by the State's commercial banks will be
significant, though incalculable. Following the merger
the resulting bank will still be able to serve those customers now being served by each of the participating
banks individually. The resulting bank will, in addition,
be able to meet the needs of many potential borrowers
whose only convenient source of credit now is at the
First National Bank of Nevada. By offering the large
156




customers of Nevada an alternative source of credit,
as this merger will do, the concentration of large loans
in one Nevada bank will ultimately decline as true
competition comes into play. Even the nonbanking
lending institutions in the State will feel the effects of
a new competitive thrust for large loans.
This merger, while not substantially lessening competition in any area of the State, will serve the public
interest of the entire State. By creating a new statewide
banking system, this merger constitutes a new and
needed impetus toward the economic unification and
integration of the State now only united politically. It
will assist in breaking down the historic division of the
State into two separate market areas. The resulting
bank, the second statewide institution, will provide
effective statewide banking competition able to meet
the unique credit needs of customers in both the north
and the south, and able to transfer and marshal the
resources of the State in areas of need in time of
seasonal fluctuations.
This merger will help the people indirectly by directly benefiting and strengthening the participating
banks. Through this union, the management resources
of the Bank of Las Vegas and Valley Bank of Nevada
will be made available to the Nevada National Bank of
Commerce and the adequate capital of the latter bank
can be used to bolster the capital position of the other
resulting bank. When recourse is made to raise additional capital, which is expected, it will be much easier
for the resulting bank to do so than such attempts by
the participating banks individually.
The extended services which the resulting bank can
provide to most of the residents of the State beyond
those now proffered by each bank indicates that it will
be in the public interest. A larger lending limit for the
large ranchers in the north and the hotel-casino operators in the south of the State will insure that profit
from this business will remain in Nevada. Expansion
of computer services, trust department facilities, and
specialized credits, including international loans, will
develop increased competition with the First National
Bank of Nevada and offset its present domination of
the State's banking resources.
Applying the statutory criteria to the proposed
merger, it is concluded, in the light of the above findings, that it will not substantially lessen any significant
amount of existing or potential competition, but will
promote the public interest of the State of Nevada by
serving the convenience and needs of its residents. The
application is, therefore, approved.
JULY 26,

1968.

SUMMARY OF REPORT BY ATTORNEY GENERAL

This proposed merger would unite the second, third,
and seventh largest of nine commercial banks operating in the State of Nevada. Bank of Las Vegas
("Vegas"), the second largest in the State, operates
all its offices in Clark County, which is the Las Vegas
S.M.S.A. National Bank of Commerce ("Nevada Commerce"), the State's third largest bank, operates five
offices in the Reno S.M.S.A. (Washoe County) and
three offices in the Las Vegas S.M.S.A. Valley Bank
of Nevada ("Valley"), the State's seventh largest
bank, operates all its offices in the Reno S.M.S.A.
The metropolitan areas of Reno (approximate population 100,000) and Las Vegas (approximate population 150,000) contain Nevada's principal business
areas and together account for approximately 58 percent of the State's total population. Recent population
growth in both areas has been rapid and they are the
likely areas of future economic growth in Nevada.
There is no direct local banking competition between Valley and Bank of Las Vegas—their closest
offices are 450 miles apart—but both have offices within
one or two city blocks of offices of Nevada Commerce.
Thus, there is clearly direct competition between
Nevada Commerce and Vegas and between Nevada
Commerce and Valley.
In the Reno S.M.S.A. (which is served by five commercial banks), First National Bank of Nevada, the
State's largest bank, accounts for about 62 percent of
county commercial bank deposits. Nevada Commerce
and Valley hold 16 percent and 6 percent, respectively,
of such deposits. Thus, the merger of Nevada Commerce and Valley would increase the share of Nevada
Commerce to 22 percent of the area's commercial
bank deposits, and it would increase the market share
of the two largest banks in this market to 83 percent of
all bank deposits in Washoe County.

In the Las Vegas S.M.S.A. (which is also served by
five banks), First National Bank of Nevada (which is
a subsidiary of Western Bancorporation) holds 41 percent of commercial bank deposits, and Bank of Nevada
(another subsidiary of Western Bancorporation) holds
18 percent of such deposits. Vegas and Nevada Commerce account for 26 and 4 percent, respectively, of
such deposits. Thus, the proposed merger would increase Nevada Commerce's market share to 30 percent
of the area's commercial bank deposits, and would
increase the market share of the two largest banks in
this market to 72 percent of total deposits (a figure
which would increase to 94 percent if Western Bancorporation's other subsidiary, Bank of Nevada, were
also included in the total).
Nevada law permits statewide de novo branching.
One of the principal purposes of this merger is to give
Vegas, the dominant bank in the proposal, operational
access to the Reno area without having to open de novo
branches of its own in that area. Vegas has the resources
to branch de novo and has demonstrated its willingness to do so. Vegas is also the most likely potential de
novo entrant into the Reno-Sparks area; each of the
four Nevada banks not now operating in Washoe
County is smaller than Vegas and three of these have
no branches at all.
In summary, the proposed transaction would eliminate direct, existing competition between Valley and
Nevada Commerce in the Reno S.M.S.A. and between
Vegas and Nevada Commerce in the Las Vegas S.M.
S.A., and it would significantly increase concentration in commercial banking in these two areas, which
are the largest banking markets in the State. In the
Reno S.M.S.A. the transaction would also eliminate
Vegas, the most likely potential entrant, as a source
of potential competition by de novo branching.
Accordingly, we conclude that the competitive effects of this proposed transaction would be significantly
adverse.

PENNSYLVANIA NATIONAL BANK AND TRUST COMPANY, POTTSVILLE, P A . , AND T H E MERCHANTS NATIONAL BANK OF SHENANDOAH,
SHENANDOAH, P A .

Name of bank and type of transaction

The Merchants National Bank of Shenandoah, Shenandoah, Pa. (4546), with
and Pennsylvania National Bank and Trust Company, Pottsville, Pa. (1663), which had
applied for permission to merge June 14,1968» under charter and title of the latter bank (1663).
The application was approved Aug. 19, 1968, but was abandoned by the banks Dec. 31, 1968,
after filing of antitrust suit by the Justice Department.




Total assets

$12, 715, 344
107,938, 736

Banking
offices in
operation
1
15

157

COMPTROLLER'S DECISION

On June 18, 1968, the Merchants National Bank
of Shenandoah, Shenandoah, Pa., and the Pennsylvania National Bank and Trust Company, Pottsville,
Pa., applied to the Office of the Comptroller of the
Currency for permission to merge under the charter
and with the title of the latter.
The service area of the charter bank includes a
three-county area encompassing all of Schuylkill
County and the southern portions of Northumberland
and Columbia Counties. The economy of this area,
previously based exclusively upon the anthracite coal
industry, changed to the manufacturing of textiles
following World War II and the introduction of light
manufacturing. Some agriculture and a little mining
is present in various parts of the service area.
Pottsville, with a population of 21,000, is the home
of the charter bank. It is located in the center of
Schuylkill County and is the county seat. In addition
to the county government located in Pottsville, State
and Federal agencies operating in the area are headquartered there. Pottsville is the center for this area,
which has a 100,000 shopping population. To accommodate this shopping population, Pottsville has built a
large city parking lot and two smaller ones, with additional public parking under way. Although the population trend was downward between 1950 and 1960, this
has been reversed in recent years. Substantial development and redevelopment has recently occurred, including new construction of low-cost housing, high-rise
apartments, a post office, and an office building. In
addition many new industries have been brought into
the Pottsville area.
The Pennsylvania National Bank and Trust Company, with IPC deposits of $90.3 million, was chartered
as a National bank in 1866. Its growth was gradual
until a few years ago when it embarked on an ambitious expansion program. Today it has 14 branches,
only two of which are de novo} and it ranks as the
largest bank headquartered in Schuylkill County. The
bank's earnings have been good and future prospects
appear favorable. This bank is a full-service institution with a managerial staff that is experienced, capable, and in good depth.
Competition in the charter bank's service area is
provided by a number of financial institutions including 34 banks. Of these the charter bank, with total resources of $103.5 million, is fifth largest. The American
Bank and Trust Company of Pennsylvania, Reading,
Pa., with total resources of $389.4 million, is the largest
158




bank and dominates the area, while the Miners National Bank of Wilkes-Barre, Wilkes-Barre, Pa., with
total resources of $166.4 million, First National Bank
of Wilkes-Barre, Wilkes-Barre, Pa., with total resources
of $132.7 million, and the Reading Trust Company,
Reading, Pa., with total resources of $115.7 million,
rank second, third, and fourth, respectively. In addition, competition is provided by 16 savings and loan
associations, the most significant of which is the West
Ward Savings and Loan Association, Shamokin, Pa.,
with total resources of $34 million, which competes
directly with the Shamokin branch of the charter bank.
Other financial institutions include five credit unions,
six sales finance companies, 11 personal loan companies, four factors, and five direct lending agencies of
the Federal Government.
Shenandoah, Pa., with a population slightly in excess of 10,500, is the home of the merging bank and is
also located in Schuylkill County. The major portion
of the bank's service area, which includes a population
of 15,000, is within the borough of Shenandoah. The
major economic base for Shenandoah is the textile
industry, which, as is true for the rest of the county,
has developed with the demise of the anthracite coal
industry. Shenandoah, however, has not been able to
reverse the resulting downward trend of population
nor to reduce unemployment, which is 9 percent as
compared with 4 percent countywide.
The merging Merchants National Bank of Shenandoah, Shenandoah, Pa., with IPC deposits of $10.8
million, was chartered in 1891 and operates from a
single office. While its capital structure is sound, its
earnings are slightly below average. The need to adopt
a pension plan is present and, if effected, would further
cut into earnings. Its management succession is a problem as its chief executive officer is expected to retire
in the next 2 years and there appears to be no one at
the bank fully capable of replacing him. The bank
does not provide trust services and is not otherwise a
full-service institution.
Substantial competition in the borough of Shenandoah is provided by the Miners National Bank of
Shenandoah and Union National Bank of Shenandoah,
with total resources of $8 million and $7 million respectively, as compared with $13 million of total resources
for the merging bank, and the First Federal Savings
and Loan Association of Hazleton, Hazleton, Pa., with
total resources of $30 million. In addition, assorted
other financial institutions operate in the borough.
This merger will be in the public interest. In addition
to solving the merging bank's management succession

problem, which it will face when its chief executive
officer retires, it will, for the first time, bring to the
borough of Shenandoah a full-service institution capable of meeting effectively all of that community's
banking needs, including trust services and consumer
installment credit. The entry of the larger, more aggressive charter bank into the Shenandoah area may
well be the stimulus needed for the development of the
town and the solution of its unemployment problem.
This merger will increase the charter bank's lending
capacity and enable it to meet more effectively the
growing demand for large-scale financing in the Pottsville area without the need for participation with other
lending institutions.
Competitively, the service areas of the two banks
overlap only to a slight extent and the elimination of
competition between them as a result of the merger
will be minimal. In the service area of the merging
bank, competition with the local savings and loan association, the resources of which are greater than the
combined resources of the three commercial banks
presently operating there, would be strengthened. Although the charter bank is the largest bank headquartered in Schuylkill County, the presence of the
American Bank and Trust Company of Pennsylvania
in Reading, with assets of some $382 million, and four
branches in the county, places a different perspective
upon the charter bank's market position. Although the
merger would naturally alter the banking structure
of the area, it would not tend to create a monopoly
or adversely affect banking competition to an extent
that competitors could not continue to grow and prosper. If new industry can be attracted to the area, the
competitive effect will be most decidedly beneficial.
Considered in the light of the statutory criteria, this
merger is judged to be in the public interest, and is,
therefore, approved.
AUGUST 19,

1968.




SUMMARY OF REPORT BY ATTORNEY GENERAL

Pennsylvania National Bank and Trust Company
("Pennsylvania National"), which holds the largest
share of deposits in Schuylkill County, proposes to
merge with the Merchants National Bank of Shenandoah ("Merchants"), which operates a single office in
Shenandoah, Schuylkill County.
Merchants is the largest of the three commercial
banks in Shenandoah, with approximately 45 percent
of total deposits. Three of Pennsylvania National's
branches are located from 3 to 6 miles from Shenandoah and are the nearest outside banks. Four other
offices of Pennsylvania National, including its head
office in Pottsville, are located within a 12-mile radius
of Shenandoah. An analysis of accounts indicate that
the two merging banks compete for business in each
other's area. The proposed merger would eliminate
their existing direct competition.
Pennsylvania National has approximately 31 percent
of total IPC deposits held by commercial banks in
Schuylkill County, an area which would appear to
overstate the size of the relevant market, since geographical factors tend to insulate banks in the central,
north-south axis of the county, in which both Pottsville
and Shenandoah are located, from competition from
outside banks. The proposed merger would add about
3 percent to Pennsylvania National's already dominant
position in Schuylkill County. Moreover, the proposed
merger appears to be part of a trend pursuant to which
the larger banks in the county have been acquiring the
smaller banks, thereby increasing concentration and
discouraging the likelihood of new entry.
We conclude that the overall competitive effect of
this proposed merger would be substantially adverse,
since it would eliminate existing direct competition
between the merging banks and would further enhance
Pennsylvania National's dominant position in Schuylkill County.

159

In 1966, certain merger opinions of the Comptroller
were not carried in the Annual Report of that year, as
the associated mergers were never consummated due
to litigation. In response to requests of students of banking, we are filling this historical gap by including these
opinions here.

PROVIDENT NATIONAL BANK, PHILADELPHIA, PA., AND CENTRAL-PENN NATIONAL BANK OF PHILADELPHIA,
PHILADELPHIA, PA.

On December 6, 1965, the Central-Penn National
Bank of Philadelphia, Philadelphia, Pa., and the
Provident National Bank, Philadelphia, Pa., applied to
the Office of the Comptroller of the Currency for permission to merge under the charter of the former and
with the title of Provident National Bank.
This application to merge is the first filed by banks
of significant size to be acted upon by this Office since
the passage of the 1966 amendment to the Bank Merger Act. The new law, passed by Congress to moderate
the decisions of the Supreme Court in U.S. v. Philadelphia National Bank, et ah, 374 U.S. 321 (1963) and
UJS. v. Lexington, 376 U.S. 665 (1964), recognizes
that traditional antitrust concepts cannot be applied to
banking without substantial modification. If a realistic
view is to be taken, it must start with a rejection of the
traditional antitrust concepts, which Congress has recognized to be inapplicable to the banking industry.
Congress, relying on the specialized knowledge of the
banking agencies, has given them the task of interpreting the new statutes.
The significant provisions controlling agency action
on a bank merger application are set form in section
5(b) of the new act.1 This section permits the responsible agency to balance the convenience and needs of
the community, considering the managerial and financial resources of the participating banks and the resulting bank, which the merger will serve against the
anticompetitive effect the merger may produce. If
the convenience and needs of the community to be
1
Section 5(a), which provides that the responsible agency
shall not approve a banking merger which would result in a
monopoly or constitute an attempt to monopolize the business of banking, is not applicable in this case.

160




served clearly outweigh the anticompetitive aspects,
the merger must be approved.
The first question to be considered, therefore, is the
impact of the proposed merger on competition. Competition amongfinancialinstitutions, as in other industries, must exist in a certain market referred to in the
statute as a "section of the country." The extent of this
market is dependent upon the various services provided
by financial institutions. Although virtually all banks
and other financial institutions compete on the local
neighborhood basis for the deposits of the average
householder, only the larger institutions can successfully compete in the national market for the large
credits of industrial and commercial customers doing
business throughout the Nation. Only a limited number of American banks compete in the international
market. Thus, in this case, as in every other to arise
under the new law, the extent and degree of competition among the applicant banks and other financial
institutions must be evaluated in all its aspects. It nc
longer suffices to say that since some competitior
among banks, either actual or potential, is eliminated
the merger is to be condemned.
Although both Provident National Bank anc
Central-Penn National Bank, the participants in thi
proposal, are headquartered in Philadelphia and botl
operate branch bank systems in the four-county arej
comprised of Philadelphia, Bucks, Delaware, an<
Montgomery Counties, as is permitted by State statutes
this area does not constitute the "section of the coun
try" under the new statute. Although the Suprem
Court in the Philadelphia case ruled that this foui
county area was the relevant market when interpretin;
section 7 of the Clayton Act, the new statute, designer

to modify that decision, permits a new and realistic
approach. Money, either in the form of savings, deposits, or credits, moves with great ease and rapidity;
itsflowis not impeded by political boundary lines. The
movements of money in and out of a bank are determined by the convenience and needs of its many and
varied customers, whose scattered addresses serve to
define the extension of the bank's market. Thus, the
branch banking laws of the States do not effectively
define a bank's market. In this case, while it is proper
to examine competition among branches for local retail and household deposits, it is also necessary to view
total competition among all financial institutions in
the Philadelphia area, including the adjacent sections
of New Jersey, as well as in the northeastern part of the
United States.
The proximity of New York City, the Nation's
financial center, means that the Philadelphia banks
also face strong competition from New York banks.
Judge Clary, in his district court opinion in the
Philadelphia case, stated then, as is still more clearly
the case today, that:
The evidence demonstrated beyond peradventure of doubt
that the Philadelphia area, plus parts of Delaware and
New Jersey, and also New York City, as well as most of
the northeastern part of the United States, is the area of
active competition for Philadelphia commercial banks and
for the proposed merged bank. The testimony discloses that
the competitive effect upon all Philadelphia commercial
banks will be minimal. The larger bank, however, will be
able to compete on better terms and in a better atmosphere
with the banks of other cities and states that have been
draining this area of banking business which might well be
and perhaps properly should be handled here, and which
cannot be handled under present circumstances. That it will
benefit the city and area has been established clearly by a
fair preponderance of the evidence.

Though section 5(b) of the 1966 amendment to the
Bank Merger Act bears some resemblance to section
7 of the Clayton Act, the difference is most marked
in that the new bank merger statute makes no reference to "line of commerce." The new statute allows
consideration of a bank merger in the context of all
competing financial institutions operating in the
market. It is thus much more realistic than the narrow
Philadelphia rule. Henceforth, the competitive impact
of a bank merger must be assessed in the light of savings banks, insurance companies, savings and loan associations, credit unions, finance companies, small loan
companies, factors, and even department stores and
mail order houses, that compete for the credit lines
or the savings dollar of the public.
The Provident National Bank and the Central-Penn
National Bank, respectively the fifth and seventh




largest commercial banks in Philadelphia, serve a
standard metropolitan statistical area that is the second
in size in the eastern United States. The Philadelphia
Standard Metropolitan Statistical Area is comprised
of Philadelphia County, which is coextensive with the
city, Bucks, Chester, Delaware, and Montgomery
Counties in Pennsylvania, as well as Burlington, Camden, and Gloucester Counties in New Jersey. This area,
an important segment in the rapidly expanding megalopolis of the eastern seaboard, has an estimated population of 4,300,000 people. More than 25 million people
live within 100 miles of Philadelphia. Only by evaluating this proposed merger against the social, economic,
and financial resources at work in this vast and densely
populated area can its impact be assessed. Its competitive effect must be viewed in the light of the
overall financial structure of this area; its beneficent
effect upon convenience and needs of this area must be
seen in the perspective of the commercial, industrial,
cultural, and sociological composition of the area.
A comprehensive view of the Philadelphia area economic base reveals that it is comprised not only of
many large, medium-sized, and small industrial companies, but also of a wide range of wholesale and retail
establishments and service companies, in addition to
educational, governmental, and research facilities. The
1963 U.S. Department of Commerce Census of Business gives the following statistics for the Philadelphia
area: 8,125 manufacturing plants with a total payroll
of $3,320,970,000 and value added of $5,987,310,000;
7,476 wholesale establishments with a payroll of
$530,541,000 had sales of $10,252,356,000; 39,358 retail stores with a payroll of $666,822,000 had sales of
$5,737,442,000; and 22,809 selected service establishments with payrolls of $321,010,000 had receipts of
$1,074,494,000.
This highly diversified Philadelphia area economy
presents needs for the widest possible range of banking
services. Nearly 90 percent of all classes of manufacturing output as recognized by the U.S. Department of
Commerce are represented in this metropolitan area.
The proportion of the Nation's value added in five
major industries by Philadelphia-based companies is
as follows: petroleum and coal, 5.8 percent; apparel,
5 percent; chemicals, 4.6 percent; rubber and plastics,
4.4 percent; and fabricated metals, 5.1 percent.
The significance of manufacturing to the Philadelphia area is attested by the fact that some 35 percent
of all gainfully employed workers are on the payrolls
of manufacturing plants. The employment profile of
the area is as follows: manufacturing durable, 17.3
percent; manufacturing nondurable, 17.6 percent;
161

trade, 19.8 percent; service and miscellaneous, 15.2
percent; government, 12.9 percent; transportation and
utilities, 7 percent; finance, insurance, and real estate,
5.5 percent; and construction, 4.7 percent.
Though manufacturing is especially important to
the Philadelphia area, no single segment dominates
its economy. Only two industries, electrical machinery
and apparel, account individually for more than 10
percent of manufacturing employment. In the electrical equipment field the presence of Electric Storage
Battery, I-T-E Circuit Breaker Co., International Resistance and Progress Manufacturing, together with
major establishments of Radio Corporation of America, General Electric, Burroughs, Philco, Sperry Rand,
and Westinghouse make this area one of the world's
greatest concentrations of electrical and electronics
manufacturing plants. In the apparel field, the area's
second largest manufacturing industry, there are a
great many small, independently operatedfirms,among
which are many with a long history in the business.
Other manufacturing industries contribute to the
prosperous economic base of this area. There are some
700 metal manufacturers, such as Lukens Steel and
Alan Wood Steel. United States Steel also maintains
its famous Fairless Works in this area. The Budd Co.,
long a leading supplier of transportation equipment,
is expanding its local operations to include work in
metallurgy, electronics, and plastics. Pennsylvania Sugar and Franklin Sugar make the area a leader in
sugar refining. Leeds and Northrup, a local firm, manufactures instruments here, as do plants of Honeywell.
Chilton and Curtis are great names in publishing.
Scott Paper is a Philadelphia-based national leader in
the paper industry. SKF Industries makes bearings and
has major plants here. Campbell Soup has its headquarters just across from Philadelphia, in Camden,
N.J. Much of the manufacturing potential of the
Philadelphia area is directed to the production of military supplies and national defense material.
Philadelphia is the site of a U.S. mint and a center
for other civilian Federal functions, as well as for activities of the Commonwealth of Pennsylvania.
The wholesale and retail trades employ 19.8 percent
of the area workers and account for $15,990 billion in
annual sales. Two of the Nation's 10 largest merchandisingfirms,Acme Markets, with annual sales of $1,161
billion, and Food Fair Stores, with annual sales of
$1,105 billion, are among this number.
In the petro-chemical industry, the Philadelphia
complex ranks second in the Nation. The two locally
headquartered firms in the oil area are Atlantic Refining, with $636 million in annual sales, and Sun Oil,
162




with $838 million in annual sales. Other oil producing and processing firms with plants in the area are
Gulf, Mobil, and Sinclair, which are among the country's largest. The chemical industry located in the area
has grown spectacularly between 1958 and 1962, when
its value added increased 35 percent and its employment increased 12 percent. Recent plant and equipment investments by such firms as Rohm and Haas,
Pennsalt, DuPont, and Thiokol indicate the vitality of
this industry. Pharmaceutical plants, a specialized
chemical industry, have also contributed to Philadelphia's recent growth. The Smith, Kline and French
Laboratories, and William H. Rorer have recorded
excellent profits. Wyeth; Merck, Sharp and Dohme;
McNeil; and other famous firms with manufacturing
and research laboratories have contributed to the
economy of the area.
The Philadelphia area has become a national center
of research and development, especially in the biomedical sciences and electronics, because of the close cooperation among industry, independent research
institutions, and the area's colleges and universities. A
new science center, near the campuses of Drexel Institute of Technology and the University of Pennsylvania, will further foster and extend this cooperation.
The Franklin Institute conducts industrial research in
its independent laboratories in chemistry, physics, electronics, and engineering. National Science Foundation
data indicate that, in 1962, 3,700 scientists were engaged in research and development in the Philadelphia
metropolitan area. Their efforts were concentrated in
chemistry, physics, and the biological sciences.
Another very significant factor contributing to the
economic base of the Philadelphia Standard Metropolitan Statistical Area is its seaport. This port, which
is part of a vast complex stretching from Trenton,
N.J., on the north to Wilmington, Del., on the south,
serves 13 States in which one-third of the Nation's
population lives and works. Having handled 108.9
million short tons in 1964, it ranks second only to New
York in total water-borne commerce and is first in
foreign comerce. Its importance to the economy of the
area can hardly be exaggerated; it provides, directly
or indirectly, more than 96,000 jobs, and 20 percent
of all manufacturing jobs depend on raw materials
received through the port.
The port can accommodate 150 deep-draft vessels
at its docks, and a 40-foot channel has been dredged
up river to the United States Steel Fairless plant. Three
trunkline railroads run direct to shipside and are interconnected by the Philadelphia Belt Line Railroad.
Over-the-road service to all parts of the United States

and Canada from this port is furnished by approximately 350 motor truck lines. The port has three ore
piers with unloading capacity of 5,600 tons per hour;
six oil docks with storage capacity of 9,900,000 barrels; two grain elevators with a capacity of 4^4 million
bushels; three coal tipples with capacity of 37,500
tons per 8-hour day; 81 warehouses for general storage
with 13.5 million square feet of space; and nine cold
storage warehouses with nearly 12 million cubic feet
of space.
Since colonial days, educational, scientific, and cultural activities have contributed to the economic vitality of Philadelphia and its environs. Today there
are 54 colleges and universities, including six major
medical schools and 129 hospitals, as well as many
other respected scientific and cultural institutions serving the area's needs.
Philadelphia is also a major transportation center.
Of the railroads serving the city, the Pennsylvania Railroad and the Reading Co. are locally headquartered.
The International Airport, located only 20 minutes
from the center of the city, is becoming an attraction
for new business development. Philadelphia is also
served by a network of superhighways centering on the
Pennsylvania and New Jersey Turnpikes.
The city of Philadelphia faces severe problems typical of many American urban centers today. It has experienced a substantial exodus of population to the
suburbs and those who moved out have been replaced
mostly by unskilled immigrants from the south, who,
due to their lack of training, are handicapped in finding employment. Efforts have been made by both government and private citizens to revitalize the economy
of Philadelphia, and a number of projects are presently
in progress. In the field of housing, a massive plan has
been set in motion to replace substandard housing
facilities in the city. Steps are also being taken to improve cargo handling facilities.
Against this background of the Philadelphia area's
manufacturing, commercial, scientific, and cultural
base, it is appropriate to examine the financial resources available to meet its expanding credit needs.
Such an examination must, of necessity, encompass
not only commercial banks, but also the savings banks,
savings and loan associations, insurance companies,
small loan companies, credit unions, factors, and other
financial institutions.
Such an analysis of the Philadelphia area financial
structure must consider the 84 commercial banks, operating 515 offices, with total assets of $8,495 billion;
four mutual savings banks having withdrawable balances of $2,861 billion; 260 savings and loan associa-




tions with $2,555 billion in total assets; 300 insurance
companies, including seven large Philadelphia-based
insurance companies with assets of $3,846 billion; 285
credit unions in the city of Philadelphia alone; and
about 100 sales finance companies, about 300 small
loan companies, and 15 factoring offices, the aggregate Philadelphia resources of which are unavailable.
Direct governmental lending agencies are competitive
to a lesser extent than the private financial institutions.
Philadelphia, the fourth largest metropolitan area
in the Nation, has a relatively low concentration of
banking resources. Out of 34 standard metropolitan
statistical areas with limited branching, the Philadelphia area ranks only 25th in terms of concentration,
based on thefivelargest banks in each area.
Of the 84 commercial banks located in the Philadelphia area, only three have total deposits of more
than $1 billion. The largest of these is the First Pennsylvania Banking and Trust Co., which has total deposits of $1,459 billion and operates 45 branch offices.
The second is the Philadelphia National Bank, with deposits of $1,292 billion and 36 offices. Girard Trust
Bank, with $1,013 billion in deposits and 50 branches,
is third. None of these banks, which rank 19th, 26th,
and 37th, respectively, among the Nation's commercial banks, are near the size of the Mellon National
Bank of Pittsburgh.
The charter bank, with IPC deposits of $260 million,
was originally organized in 1864 as the Central National Bank. It acquired its present title in 1930 when
Central National Bank merged with Penn National
Bank. During the last 5 years, however, it has had
no mergers. The charter bank presently operates 24
offices throughout Philadelphia, Bucks, Montgomery,
and Delaware Counties. Central-Penn has specialized
in medium-sized local business loans and has built up
over the years a strong and experienced commercial
loan department. The bank needs additional capital to
support its existing volume of business. Its head office
is inadequate and congested. The renovated quarters
of the resulting bank and its new accounting center
will alleviate this problem.
The merging bank, with IPC deposits of $471 million, was originally incorporated in 1922 as Provident
Trust Co., of Philadelphia to take over the banking
and trust business of Provident Life and Trust Co.; it
became a National bank in 1964. The Provident National Bank is presently operating 33 offices throughout
Philadelphia, Bucks, Montgomery, and Delaware
Counties. Besides being a strongly capitalized bank,
Provident has one of the largest trust departments in
the Philadelphia area, as well as an established interna163

tional division, and a specialized construction loan department. Among the remaining area banks, there are
10 with resources of $100 million and over, which assure a satisfactory range of services to the mediumsize customer.
Commercial banks compete not only with each
other, but with many other types of savings and financial institutions strongly represented in the area. There
are four mutual savings banks with head offices in
Philadelphia, operating more than 50 branches in the
metropolitan area and having withdrawable balances
of $2,861 billion. These institutions are well managed,
with records of sound operation dating from 111 to
149 years. The Philadelphia Savings Fund Society,
the major savings bank, is the largest bank in eastern
Pennsylvania. These mutuals have paid a high rate
of interest on regular savings accounts, which has contributed much to the amazing growth rate of their
savings deposits of 51.9 percent over 1960.
Insured savings and loan associations, with $2,555
billion in total assets, compete vigorously in the metropolitan area for personal savings, and also solicit corporate funds. Emphasizing the savings function, the
high dividend rate, Federal insurance and, frequently,
valuable premiums on new accounts, they successfully
compete with mutual savings and large commercial
banks for savings and mortgage loans. There is no area
in the city where the commercial banks are not in direct
competition with a nearby office of a savings and loan
association. Moreover, many out-of-State savings and
loan associations from as far away as California solicit
deposits by mail, emphasizing the high interest rates
offered. First Pennsylvania cited the drain of deposits
resulting from such out-of-State competition as a principal reason for its recent decision to offer 5-year,
4J4 percent savings bonds, now also offered by most
other Philadelphia banks. It is significant that savings
deposits and mortgage loans of the eight largest Philadelphia commercial banks amounted in the aggregate
to only 16.94 percent and 6.99 percent, respectively, of
the combined totals for such banks, the four mutual
savings banks, and the insured savings and loan associations in the area as of December 31,1964.
There are more than 300 insurance companies with
offices in the city. The seven largest insurance companies with headquarters in Philadelphia are: Pennsylvania Mutual Life, with assets of $2,068,973,000,
mortgage loans of $625,256,000, and policy loans of
$140,358,000; Provident Mutual Life, with assets of
$989,936,000, mortgage loans of $328,387,000, and
policy loans of $58,626,000; Fidelity Mutual Life, with
assets of $442,770,000, mortgage loans of $146,061,000,
164




and policy loans of $30,216,000; Philadelphia Life,
with assets of $109,355,000, mortgage loans of $36,822,000, and policy loans of $6,646,000; Presbyterian
Ministers' Fund, with assets of $95,760,000, mortgage
loans of $19,098,000, and policy loans of $6,428,000;
Home Life, with assets of $95,338,000, mortgage loans
of $45,612,000, and policy loans of $3,039,000; and
Life Insurance Co. of North America, with assets of
$44,716,000, mortgage loans of $7,660,000, and policy
loans of $1,354,000. The three largest companies have
been very active in private placement financing; they
are joined in competition for local financing by all of
the leading national life insurance companies and many
Canadian companies as well. All of these and many
smaller companies actively solicit real estate mortgages
for investment. Some companies maintain their own
mortgage offices in Philadelphia, while others rely
upon local mortgage service companies for their supply.
There are reported to be 285 credit unions in the
urban Philadelphia area. There are no statistics on the
number of credit unions in the entire metropolitan
area. Credit unions make the most of their competitive position, emphasizing mutual ownership, low
interest rates on loans, in some cases the payroll deduction method of loan repayment and savings, and convenience of access to credit union facilities.
There are about 100 sales finance companies and
about 300 small loan and consumer discount companies
operating within the service area of the resulting bank.
Many of these companies have large branch office systems. Beneficial Finance Co. has 14 offices, Household Finance Corp. has 26 officers, and Ritter Finance
Co. has 18 offices. All of these companies compete
aggressively with commercial banks for automobile,
home modernization, and personal loan financing.
There are 15 factoring companies with offices in the
city of Philadelphia. These companies compete in the
accounts receivable finance market.
The consummation of the proposed merger will not
result in the elimination of a significant amount of
competition between the applicant banks. Provident
and Central-Penn face branch office competition from
the offices of the largest Philadelphia banks rather
than from each other, except in the immediate Philadelphia downtown area. For this reason, a minimal
number of common accounts exists between them.
There are only 28 mutual customers out of a combined
total of 3,277 savings accounts with balances of $10,000
or more; nine mutual holders of the new 4J/2 percent
savings certificates of each bank out of a total of 2,512
accounts; eight mutual depositors out of 444 with
certificates of deposit; and four mutual customers with

open time deposit balances in excess of $10,000 out of
281 accounts. A comparison of all regular checking accounts with balances of $10,000 or more in each bank
disclosed only 139 mutual accounts out of 6,614, and
a comparison of loan balances of $10,000 or more for
each bank disclosed only 32 mutual borrowers out of
3,287. As to consumer credit customers of the two
banks, due to the complementary branch systems and
differences in the sources of dealer paper, it is doubtful
that more than an insignificant overlap is involved.
The following analysis of the dispersion of the branch
offices of the applicant banks clearly reveals the limited
extent to which the banks compete for the deposits of
the small retail customers. As previously noted, Pennsylvania law permits branching into the counties contiguous to the home county, and while both banks
operate branch offices in Philadelphia and at least one
office in each of the three contiguous counties, the locations of these offices are such that, except in the
downtown area, they are not in significant competition with each other. Of the 24 offices Central-Penn
presently operates throughout this four-county area,
13 are located in Philadelphia: four downtown, three
to the north of the downtown area, four to the west,
and two to the south. Provident is presently operating
33 offices in the four-county area, 20 of which are
located in Philadelphia: five downtown, one immediately outside of the downtown area, 11 north of the
downtown area, two west, and one south. In Delaware
County, Provident is well represented with six offices,
while Central-Penn has but one. On the other hand,
Central-Penn has eight offices in Lower Bucks County,
while Provident has two offices in Upper Bucks County.
In Montgomery County, Provident has five offices, two
in the southwest section, two in the northeast section
and one in the west-central part, while Central-Penn
has only two offices in the southeastern section of the
county. Subsequent discussion will show that the participating banks' branches in these last three counties
do not compete with each other because of their locations. These branches, in fact, will complement one
another when the merger is consummated.
In downtown Philadelphia, the main office of Central-Penn is located at the corner of Broad and Walnut
Streets, only a block away from the main office of
Provident at the corner of Broad and Chestnut Streets.
Within 0.4 of a mile of Provident's office are eight
commercial banks, some with several offices; two savings banks; one savings and loan association; 10 finance
and small loan companies; four credit unions; and 12
insurance companies. Central-Penn's office is within 0.3
of a mile of eight commercial banks, one savings bank,




six savings and loan associations, 26 finance and small
loan companies, two credit unions, and two insurance
companies.
Competition also exists among the branch offices of
the two banks located at 21 South 12th Street, 12th
and Chestnut Streets, and Market and Juniper Streets.
These offices are in the same area. However, within
0.3 of a mile from Provident's office at 21 South 12th
Street are five commercial banks, three savings banks,
two savings and loan associations, 10financeand small
loan companies, and four credit unions. Central-Penn's
office at 12th and Chestnut Streets is within 0.5 of a
mile of four commercial banks, two savings banks, six
savings and loan associations, 16financeand small loan
companies, three credit unions, and one insurance company. Within 0.4 of a mile from Central-Penn's office
at Juniper and Market Streets are three commercial
banks, a savings bank, three savings and loan associations, six finance and small loan companies, and two
insurance companies.
No significant competition exists among any of the
other branch offices of the applicant banks, although
a few of these are relatively close to each other.
Offices of the two applicant banks located in downtown Philadelphia at 17th and Arch Streets, and at
17th and Chestnut Streets are separated by three long
blocks traversing Penn Center, an office redevelopment
area. Within 0-3 of a mile from Provident's office are
nine commercial banks, three savings banks, 12 savings
and loan associations, five finance and small loan companies, and one credit union. Central-Penn's office
is within 0.3 of a mile of six commercial banks, three
savings banks, one savings and loan association, four
finance and small loan companies, three credit unions,
and two insurance companies.
Other branch offices of the applicants in downtown
Philadelphia, which are located in the same area, are
those at Seventh and Chestnut Streets and at Fourth
and Chestnut Streets. All the major banks are represented in this section. Within 0.3 of a mile from Central-Penn's office located at Seventh and Chestnut
Streets are three commercial banks, a savings bank,
three savings and loan associations, three finance and
small loan companies, two credit unions, and nine insurance companies. Provident's office located at Fourth
and Chestnut Streets is within 0.3 of a mile of seven
commercial banks, three savings and loan associations,
one finance and small loan company, two credit unions, and one insurance company.
The office of Central-Penn, located at Second and
Pine Streets, is seven blocks away, and separated by the
Independence National Historical Park, from Provi165

dent's office located at Fourth and Chestnut Streets.
No competition exists between the two offices because
of the distance, difference in neighborhood, and the
barrier created by the park. The draw area of the
Second and Pine office is principally South Philadelphia rather than downtown Philadelphia. Within a
mile from Central-Perm's office are three commercial
banks, a savings and loan association, and one finance
and small loan company.
In heavily populated West Philadelphia, CentralPenn's office at 58th Street and Baltimore Avenue and
Provident's office at 19 South 52d Street are 1.5 miles
apart and thus have separate service areas. Within 1
mile of Central-Penn's office are three commercial
banks, one savings and loan association, arid two finance and small loan companies. Provident's office is
within 1.3 miles of three commercial banks, two savings banks, five savings and loan associations, seven
finance and small loan companies, four credit unions,
and one insurance company.
In North Philadelphia, the office of Central-Penn
at Broad Street and Glenwood Avenue and the office
of Provident at 3314 Germantown Avenue are 0.7 of
a mile apart and are separated by the main tracks of
the Pennsylvania Railroad and by Allegheny Avenue,
a major thoroughfare. Central-Penn's office serves as
the area south of these boundaries and is within 0.6
of a mile of two commercial banks, a savings bank,
three savings and loan associations, four finance and
small loan companies, and five credit unions. Provident's office, serving the business and population north
of Allegheny Avenue and the railroad, is within 0.6
of a mile of four offices of two commercial banks, a
savings bank, three savings and loan associations, and
twofinanceand small loan companies.
Central-Penn's office at Fifth and Wyoming Avenue
and Provident's office at Broad and Louden Streets
are a mile apart and serve different areas which are
separated by the Northeast Expressway. The Wyoming
office of Central-Penn does not serve the area along
Broad Street which is within the service area of the
Broad and Louden office of Provident. Likewise, the
Provident's office does not serve the business along
Fifth Street south of Wyoming Avenue. Central-Penn's
office is within 1 mile of three commercial banks, five
savings and loan associations, five finance and small
loan companies, and one credit union. Provident's
office is less than 0.5 of a mile from one commercial
bank, one savings bank, two savings and loan associations, four finance and small loan companies, and one
credit union.
166




Central-Penn's office at 7325 Stenton Avenue and
Provident's office at 78th Street and Ogontz Avenue
are 1.75 miles apart. The road pattern of the area
obviates competition between them. Central-Penn's
office is within 1.5 miles of three commercial banks,
two savings banks, and two savings and loan associations. Provident's office is within 1 mile of nine
commercial banks, three savings banks,fivesavings and
loan associations, one finance and small loan company,
one credit union, and two insurance companies.
In Delaware County, the office of Central-Penn
located at 301 Baltimore Pike, Springfield, and the
office of Provident at Hart Lane and Saxer Avenue,
Springfield, are approximately 1.2 miles apart. Within
1 mile from Central-Penn's office are four commercial
banks, two savings and loan associations, two finance
arid small loan companies, and a savings bank. Provident's Springfield office is within 2.2 miles of six commercial banks, two savings banks, two savings and loan
associations, four finance and small loan companies,
and two credit unions.
In Montgomery County, the offices of Central-Penn
located at King of Prussia Industrial Park, Upper
Merion Township, and the office of Provident at King
of Prussia Plaza, Upper Merion Township, are 1.2
miles apart. They are separated by the Pennsylvania
Turnpike. Because of limited overpasses and underpasses, these offices are about 2.8 miles apart by either
the eastern or western route. Driving this distance during rush hours can take from 15 minutes to half an
hour. Central-Penn's Industrial Park office cannot
adequately serve the population drawn to the stores
in the shopping center. Provident's office is within 1.75
miles of four commercial banks and two savings banks,
and within 0.5 of a mile of a savings and loan association, and two finance and small loan companies.
In Bucks County there is no competition between
the branches of the participating banks. Although
Provident has two offices in the upper part of the
county and Central-Penn has eight in the lower part
of the county, the closest offices are 18 road miles
apart.
Thus, it is evident that the overall competition
among the branches of Provident and Central-Penn is
not significant. It is pertinent, moreover, to note the
kind of branching systems of other Philadelphia banks
with which the merging banks must compete. Girard
Trust, for example, presently has a total of 50 offices,
which cover all sections of Philadelphia and its suburbs.
According to Girard's 1965 annual report, "Close to
two-thirds of all our deposits are now serviced at
branch locations." It thus appears that Girard is han-

dling a higher percentage of its deposits at its branches
than is either Central-Penn or Provident.
Quite apart from a narrow consideration of the
branching systems of the merging banks, the competitive structure is properly evaluated only when all the
financial institutions that are competing for the savings
and deposit dollars and the business, real estate, and
personal loans are taken into consideration. It has already been shown that all of these financial institutions
represent an impressive multiplicity of competitive
units and resources. While figures are not available for
the resources of all competing financial institutions,
the figures that are available indicate that the premerger relative size of Provident is 3.93 percent of total
financial institution resources and of Central-Penn is
2.09 percent. The postmerger relative size of the resulting bank will be 6.02 percent.2 This postmerger relative
size, although overstated because of lack of data from
some competitors, will not cause, by any reasonable
measure, a significant lessening of competition in the
resulting bank's market.
This merger, on the contrary, will stimulate competition among the largest banks in the market area. As
the Federal Reserve Board said in its decision on the
Fidelity Philadelphia-Liberty Real Estate Bank merger
in 1963, "the climate of competition would be stimulated by the increased capacity of a large-scale bank,
and the range of choices available to customers who
require services which can only be rendered by a larger
bank would be increased."
We have shown that the competition which would be
eliminated by this merger is minuscule. It is now pertinent to examine the procompetitive effect of the
merger on the convenience and needs of the Philadelphia market.
The increased lending capacity of the resulting bank
will benefit large banking customers through the creation of an additional source of very large loans. The
close relationship between competition and convenience and needs of the community is thus demonstrated.
2
These relative size figures are based on the aggregate resources figures of the following financial institutions: Mutual
savings banks, $2,861 billion; savings and loan associations,
$2,555 billion; insurance companies, $3,847 billion; and commercial banks, $8,495 billion. Provident has total resources
of $698.7 million and Central-Penn has resources of
$370.4 million.




The needs of these large customers are better met
through the injection of added competition in the
large loan market.
The combining of the computer systems of the applicant banks will yield a more efficient data processing operation. Provident, at present, has new data
processing equipment on order to replace its present
obsolescent equipment. These new computers will
adequately take care of business in the foreseeable
future. Central-Penn's computers have no backup
capacity; this merger will solve the problem of this
vulnerability. A direct access system, now being put
into service by Gentral-Penn will enable the resulting
bank to provide direct access to its computers from
customers sooner than Provident could on its own.
With its greater financial resources and larger operations to assume acquisition and startup costs, the resulting bank will be better able to provide the public
with the latest advances in data processing services.
Use of the recently renovated Provident main office
by the resulting bank will not only increase its efficiency, but will improve customer service. Further, it
will eliminate the necessity of a substantial outlay by
Central-Penn to obtain adequate headquarters. To do
so, according to Central-Penn1 s preliminary estimate,
its annual occupancy costs would increase $250,000.
Since it has been shown that the branch systems of
the merging banks are complementary, that an adequate number of alternative sources of financial services exist in the Philadelphia area, and that competition
among the large financial institutions will be stimulated, it is concluded that this merger, rather than
having an overall adverse effect on competition, will
have a favorable effect. Further, the increased ability
of the resulting bank to serve the convenience and
needs of the Philadelphia area by increased efficiency,
by a greater lending capacity, through more adequate
banking quarters, and by a generally improved quality
of banking services makes this merger desirable. We
would be hindering the economic growth of Philadelphia if we failed to give our approval to this merger
application.
Pursuant to the 1966 amendment to the Bank
Merger Act, we find that the merger of Provident
National Bank and Central-Penn National Bank
clearly conforms to the statutory criteria and is in the
public interest. The application is, therefore, approved.
MARCH 31,

1966.

167

FIRST NATIONAL BANK OF HAWAII, HONOLULU, HAWAII, AND GOOKE TRUST CO., LTD., HONOLULU, HAWAII

On January 3, 1966, the First National Bank of
Hawaii, Honolulu, Hawaii, with IPC deposits of $177
million, and the Gooke Trust Co., Ltd., Honolulu, Hawaii, with assets of $4 million, applied to the Comptroller of the Currency for permission to merge under
the charter and with the title of the former.
The charter bank, First National Bank of Hawaii,
serves Hawaii with 38 offices located throughout the
State. The Cooke Trust Go. operates from its single
unit in downtown Honolulu. It also serves the other
parts of Hawaii by correspondence, telephone, and
travel by its employees. It competes with three other
trust companies in Honolulu and one in Hilo, Hawaii.
The economy of the State of Hawaii, the service area
to be considered, is dependent upon three primary
factors: tourism, national military defense expenditure,
and agriculture (largely sugar cane and pineapple).
Future economic growth is estimated at 5.5 percent annually, a decrease from the average 7.5 percent annual
growth rate of the past 10 years.
The First National Bank of Hawaii ranks second
among a field of seven commercial banking competitors. Its principal competitor is the Bank of Hawaii,
which has 43 percent of banking assets in the State.
Acquisition of the assets of Cooke Trust Co. by the
charter bank would increase the latter's share of total
assets by less than one-quarter of 1 percent. The addition of so small a percentage to the charter bank's

resources cannot be considered to have a significant
effect on competition in the commercial banking community. On die other hand, the merger will enable
the charter bank to augment its range of banking services by including fiduciary services for the first time.
The resulting bank will hold the same 15 percent market share of trust company assets previously held by
the Cooke Trust Co., which makes it third among the
five trust companies doing business in the State. The
first two companies, the Hawaiian Trust Co., Ltd.,
and the Bishop Trust Co., Ltd., control respectively
41 percent and 38 percent of trust company assets.
The addition of $4 million in trust assets to the
charter bank will have no competitive effect upon other
financial institutions. The merger will provide a bank
with a somewhat stronger lending power, better able to
meet the general credit demands of the communities
it serves. Through the branch network of the charter
bank and its efficient communication system, it will be
possible to make trust department services available
to all its customers in the various communities served
by the charter bank. Also, the greater capital funds of
the resulting bank will provide greater assurance for
settlors and beneficiaries of trusts and estates.
Applying the statutory criteria to the proposed
merger, we conclude that it is in the public interest,
and the application, therefore, is approved.
MAY

12, 1966.

T H E FIRST NATIONAL BANK OF STATE COLLEGE, STATE COLLEGE, PA., AND THE PEOPLES NATIONAL BANK OF
STATE COLLEGE, STATE COLLEGE, PA.

On January 25, 1966, The First National Bank of
State College and The Peoples National Bank of State
College, both of State College, Pa., applied to the Office
of the Comptroller for permission to merge under the
charter of the former and with the title "Peoples First
National Bank of Central Pennsylvania."
The First National, with IPC deposits of $19 million, and Peoples National, with IPC deposits of
$15 million, are located in State College, the largest,
most densely populated, and fastest growing borough
of Centre County. State College's growth is largely due
to the expansion of Pennsylvania State University.
The university presently has an enrollment of 20,000
students and is continuing a major expansion program.
Centre County constitutes the service area in which
the applicant banks operate. It is an area of significant
growth in central Pennsylvania. The population in168




creased from 66,000, in 1950, to 79,000 in 1960. The
81 manufacturing firms in Centre County employed
6,000 people in 1964. Many of the farms in the surrounding area have been sold or are under option for
residential construction. Of the farms remaining 85
percent are dairy farms. Adequate bus, rail, and air
transportation is available to the county. It has a satisfactory network of roads directly connecting the
population centers of the county. Moreover, completion of Interstate Route 80 is expected to make Centre
County more accessible to the rest of the State and
contribute further to its growth.
The applicant banks face intense competition from
the other financial institutions in the Centre County
area and in particular from the Midstate Bank and
Trust Co. Midstate, with IPC deposits of $70.8 million,
is the largest bank in Centre County and has an office

in State College. The union of the applicants will create a bank better able to compete with Midstate.
Strong competition is also offered by the eight other
commercial banks in Centre County, which range in
size from $17 million to $1 million in IPC deposits.
Furthermore, there are four savings and loan associations, four finance companies, and one credit union
competing in the area.
The resulting bank will better serve the convenience
and needs of the area. Bank management will be
strengthened. The larger staff of the resulting bank
will afford a greater degree of specialization and experience. Moreover, personnel capable of succeeding

the chief executives will be more easily recruited and
trained.
Another benefit is the formation of a second convenient banking alternative capable of satisfying the
larger credit needs being generated in the area. In
addition, greater size will enable the resulting institution to employ automatic data processing to provide a
broader range of customer services.
Having considered the proposal in the light of the
applicable statutory criteria, the merger is found to
be in the public interest. It is, therefore, approved.
MAY

20, 1966.

FIRST CITY NATIONAL BANK, HOUSTON, TEX., AND SOUTHERN NATIONAL BANK OF HOUSTON, HOUSTON, TEX.

On June 15,1966, Southern National Bank of Houston, Houston, Tex., with IPC deposits of $48.8 million,
and First City National Bank, Houston, Tex., with
IPC deposits of $626.8 million, applied to the Office
of the Comptroller of the Currency for permission to
merge under the charter and with the title of the latter.
This opinion sets forth the bases of the decision of this
Office, dated September 20,1966.
Houston, with a metropolitan area population of
approximately 1.765 million, is the center of the most
populous metropolitan area in the southwestern United
States. Its standard metropolitan statistical area is defined by the Census Bureau as Harris, Brazoria, Fort
Bend, Liberty, and Montgomery Counties, although
the city serves the entire gulf coast. An extraordinary
combination of growth factors created a population
increase of 65.9 percent between 1950 and 1960. Between 1960 and 1965, the Houston area population
increased by 17 percent. The prospects are for continued growth with a projected 1970 population exceeding 2 million.
The genesis of Houston's amazing growth has been
its economic diversity, supported by an advantageous
geographical location and abundance of natural resources. Founded in 1836, Houston has, at various periods in its history, been economically supported by
cotton, cattle and timber, trade and shipping, marketing and manufacturing, and petroleum and chemical
refining. Each new activity has taken its place in the
Houston economy without replacing its predecessor.
Texas Employment Commission figures for the first
quarter of 1965 show that 9.7 percent of Houston area
workers were employed in durable goods manufacturing, 8.2 percent in nondurable goods manufacturing,
7.1 percent in transportation, 8.3 percent in construc-




tion, 8 percent in wholesale trade, 18.6 percent in retail
trade, 5.7 percent in finance and insurance, 7.3 percent
in business and personal services, 6.9 percent in medical
and professional services, 9.3 percent in government,
and 10.9 percent in other categories. The following
table published in the 1963 U.S. Department of Commerce Census of Business illustrates the diversity of
the Houston economy.
In addition to its variety, the Houston economy is
marked by great quantitative strength. This power is
particularly well-illustrated in manufacturing, where
Houston industries account for the following amounts
of the Nation's total value added: Petroleum and coal
products, 9 percent; petroleum refining, 10.6 percent;
chemicals as a whole, 3.4 percent; basic chemicals, 6.9
percent; construction and like equipment, 5.7 percent;
and fabricated metal products, 2.5 percent. The Houston area petroleum refining complex is the world's
largest and its chemical industry is the Nation's fastest
growing. The outlook for these industries continues to
be promising because of an abundance of hydrocarbons,
salt, sulphur and lime, plus excellent transportation
facilities.
Perhaps as much as any single factor, Houston's
transportation facilities have played a vital role in the
Houston boom. The 50-mile ship channel linking the
city to the Gulf of Mexico has particularly benefited
the Houston area. Since 1910, the Federal Government
has spent $53 million to dredge and maintain the channel, yet customs revenue exceeds the total Federal investment every 2 years. The Port of Houston is the
third largest of U.S. seaports in total tonnage moved.
Served by 117 steamship lines, which bring more than
4,000 ships to the port annually, Houston's total cargo
moved in 1965 was approximately 58 million short tons.
169

Manufacturing establishments, employees, and value added by major industry groups, Houston SMSA

Industry groups

Manufacturing
Food and kindred products
Textile mill products
Apparel and related products....
Lumber and wood products
Furniture and fixtures
Paper and allied products
Printing and publishing
Chemical and allied products....
Petroleum and allied products....
Rubber and plastics products
Stone, clay, and glass products. . .
Primary metal industry
Fabricated metal products
Machinery, except electrical
Electrical machinery
Transportation equipment
Instruments and related products.
Miscellaneous manufacturing
Administrative and auxiliary

Establishments
Dec. 31, 1963

All employees
Dec. 31, 1963

2,197
187
10
56
149
80
37
252
180
31
48
130
65
306
400
79
68
48
69

106,059
11,221
535
1,348
2,328
1,653
3,163
5,764
16, 174
10, 505
1,431
4,852
9,670
13,611
14, 890
2,079
2,141
1,054
587
2,961

Percent of total
employees

100.0
10.6
.5
1.3
2.2
1.6
3.0
5.4
15.2
9.9
1.3
4.6
9. 1
12.8
14.0
2.0
2.0
1.0
.6
2.8

manufacture
1963 ($000)

1, 889, 693
218, 786
3,295
8,776
14,090
13,263
42, 381
53, 870
601, 657

321, 942
14, 237
61,751
131,869
134,498
205, 542
27,311
17,809
10, 956
5,337
Payroll
(W00)

Wholesale trade.
Retail trade
Selected services.

2,583
13,082
8,506

In addition to the oceangoing freight, access to the
intracoastal channel provides Houston with low-cost
barge transportation. This 1,777-mile waterway links
the city with some 9,812 miles of waterway in the
Mississippi River region, and 2,100 miles of waterway
into the Gulf south. In 1963 inland waterway tonnage
in the Houston area exceeded 22 million net tons.
In air transportation, Houston is well served by 10
airlines, which had total passenger arrivals and departures of 2.6 million in 1965. The present Houston International Airport is already strained by heavy traffic, and a second airport, Houston Intercontinental
Airport, is now under construction on a 7,000-acre
tract in north Harris County. With facilities to handle
both subsonic and supersonic air transportation, the
new airport is designed to accommodate the anticipated
growth of area traffic.
Houston also offers good surface transportation. Six
major rail systems serve the city and total freight
handled by rail in 1965 was 18.9 million short tons, a
24 percent increase over 1960. Motor freight is provided by 34 common carrier trucklines, as well as by
a number of specialized carriers, including 41 oil equipment haulers, 14 tank trucklines, 17 household carriers,
and 20 miscellaneous specialized carriers. Five bus systems provided hourly service in all directions. A $500

170




NA
NA
NA

171,266
190,443
80, 342

By percent total
value added

100.0
11.6
.2
.5
.7
.7
2.2
2.8
31.8
17.0
.8
3.3
7.0
7.1
10.9
1.4
.9
.6
.3
Sales
($000)

3, 694, 963
1,731,921
273, 399

million freeway system will extend 245.5 miles in the
form of inner and outer loops around the city with connections from Houston's downtown center to provide
quick, efficient access to the entire metropolitan area.
The transmission of oil and gas is also a major factor in the Houston economy. The city is the hub of a
pipeline network, which includes 40 crude oil pipelines
and 29 products pipelines. Ten natural gas pipeline
companies headquartered in the city and four other
companies having national operations in Houston account for a quarter of the national gas pipeline firms.
The rapidly expanding Houston business climate
served by these transportation and transmission facilities has required an enormous amount of construction.
In 1965, the value of building permits ranked Houston
third in the Nation. Nonresidential construction contract awards in that year totaled $377.4 million. From
1960 to 1965, the total of such awards was $1.8 billion.
The estimated value of residential units completed in
1965 was $222.6 million, and from 1960 to 1965, was
$1.1 billion. While suburban areas have spawned substantial business areas of their own, the downtown
section of Houston has added about 10 million square
feet of new building space since 1950 and the workday
population has increased by more than 80,000 persons
to an estimated 180,000 in 1965.

New business developments in Houston indicate that
the momentum of the economy's growth will not diminish. Humble Oil and Refinery Go. has commenced
an industrial, commercial, and residential complex on
30,000 acres within the metropolitan area, which is expected to require $1.4 billion in total capital investment, $1 billion annually in sales, 25,000 new jobs,
and $166 million annually in new payroll by 1984. This
development surrounds the NASA Manned Space
Graft Center, which now has 5,000 employees with an
annual estimated payroll of $60 million. NASA has
granted procurement contracts totaling $25.4 million
in 1965 to Houston area concerns.
Another major entry into the Houston area is a new
United States Steel Co. manufacturing facility. This
project will require an initial $150 million investment
for plant and related facilities covering 15,000 acres.
The full importance of the Houston economy is
manifestly evident when comparison is made with the
two other large metropolitan areas in Houston's section
of the country, Dallas and New Orleans. The following
table indicates that Houston surpasses both the other
cities in most of the important economic indicators.
In addition to capital investment and production
facilities, Houston is an educational, cultural, and
recreation center. There are more than 36,000 students in 20 Houston area colleges and universities,
including the noted Rice University, the large University of Houston, and the famed Baylor University College of Medicine. A new center for the performing
arts, Jones Hall, provides one of the finest such facilities in the country. The Houston Symphony is one of
the leading American orchestras, and four legitimate
theaters give performances throughout the year. The
Museum of Fine Arts has an extensive and varied
collection. Spectator sports are well represented by
the Oilers of the American Football League, the Astros
of the National Baseball League and intercollegiate
games. Sports facilities include numerous parks and

playgrounds, golf courses, swimming pools, and tennis
courts, as well as lakes and the Gulf of Mexico. These
facets of Houston create a pleasant environment which
should insure Houston's place as a major population
center of the southwestern United States.
This description of the Houston economy indicates
an area of unusual vigor with heavy and sophisticated
demands on its facilities and resources. These needs
are remarkably well met in almost every phase of
the Houston economy, with the exception of financial
institutions.
The entire State of Texas, and Houston in particular,
is handicapped in providing indigenous financing to
local industries and businesses by the archaic State
branch banking laws which forbid any establishment
or operation of branch banks in Texas. This artificial
restraint has prevented the downtown banks from following their customers to the suburbs and from generating new business among the many commercial and
industrial establishments operating in the suburban
shopping centers and industrial complexes. The result
of this impediment has been to limit unduly the accumulation of capital resources by the urban commercial banks, thus preventing some businesses from
obtaining funds for investment in new facilities, or
driving them to financial centers outside the area that
are able to meet their needs.
The fact that there are 115 banks in the Houston
SMSA demonstrates the dispersion of banking resources. Many of these banks, most of which have
resources under $10 million, are located in suburban
areas where branching would be a logical method of
expansion.
The largest Houston banks have had particular
difficulty in meeting their responsibilities. Although
the area ranks 13th in population in the Nation, the
charter bank, the largest bank in the area, ranks 41st
nationally. The Texas National Bank of Commerce,

Houston

Composite indexes of economic importance
Composite indexes of amount of growth
Total city population corporate limits, 1964
Population ranking among U.S. cities, 1964
Absolute increase in city population, 1964/1950
Total metropolitan area population, 1964
Abolute increase in metropolitan area population, 1964/1950
Percent population increase in metropolitan area population, 1964/1950.
Total value added by manufacture, 1963
Total bank demand deposits, 1964
Total building permit values, 1964




1
1
1,091,800
6
495, 637
1, 652, 800
708, 200
76.7
$1, 889, 693, 000
1,613,633,200
321, 700, 000

Dallas

2
2
802, 600
9
368, 138
1,310,600
560, 000
76.3
164, 721, 000
369, 165, 700
193, 500, 000

New Orleans

3
3
663, 500
15
93, 055
997,400
277, 500
45.5
$627,018,000
659, 730, 900
105, 300, 000

171

which is the second largest Houston bank, stands 52d
nationally. The failure of the Houston banks to keep
pace with the growth of its area has led to unfortunate
results. Cities with more satisfactory banking facilities
can attract industry which needs large-scale financing.
Moreover, many local projects are simply unable to
obtain financing due to the preference of large banks
in other areas for projects in those areas.
In the past year, the charter bank was forced to
decline or divert over $31 million in loans requested
by sound and prosperous local companies because its
loan limit was not sufficient. Because of its inadequate
size relative to the community it serves, First City was
also forced to participate over $77 million more in
loans.
The merging bank also found itself unable to cope
with the demands of its customers. Southern National
was forced to participate almost $16 million of loans
last year because of its inadequate size. Its lending limit,
in an area of such unparalleled growth as Houston,
is $600,000.
With the rational means of expanding—i.e. branching—foreclosed to the applicant banks, growth adequate to meet the increasingly heavy demands of the
Houston community is available only through merger.
The transaction must, however, meet the criteria of
the Bank Merger Act, as amended.
The effect of the merger upon competition must
be considered in judging the application. The Houston
area is marked by intense competition among a plethora of financial institutions. There are 115 commercial banks, with total resources of $4,386 billion
in the Houston metropolitan area, 23 savings and loan
associations in Harris County with total savings accounts of $758.2 million, 240 credit unions with assets
of $120.9 million, 232 finance company offices, 13
factors, and 12 small business development companies.

172




Harris County alone, which contains the downtown
Houston area, has 85 individual unit banks. In addition, 50 insurance companies domiciled in the Houston
metropolitan area and many others operating there
make loans estimated at hundreds of millions of dollars.
The largest mortgage banking firm in this country,
which services $1.4 billion of loans, and four other
large mortgage companies, which service an additional
$1.4 billion of loans, are headquartered in the Houston
metropolitan area. All of these institutions vie for the
loans and savings dollars of the potential Houston area
customers of the applicant banks. A further indication
of the strong competition is that in 1965 the largest
single financer of new cars purchased in Harris County
was GMAC, which financed 11.5 percent of the cars
financed. The charter bank financed but 2.7 percent
of the new cars financed, and Southern National
financed only 0.5 percent.
The intense competition is particularly well-illustrated by the fact that, in an eight-block area in downtown Houston where both applicant banks are located,
there are eight banks either larger than, or of comparable size to, Southern National. In the same area,
there are five other, similar downtown banks which
provide adequate retail banking services. All 13 competing banks are easily and quickly reached by walking
or using the shoppers special bus, which traverses the
downtown area at five minute intervals. In addition,
there are eight savings and loan home offices, and one
savings and loan branch within this eight-block area.
These offices, together with the numerous suburban
offices of financial institutions, indicate that a very
wide range of choices will remain after this merger.
Indeed, in the period from 1956 to 1965, the percentage of total assets, deposits and loans in the Houston
area held by the largest Houston banks declined substantially as pointed out in the following table:

Concentration in commercial banking
1956 {percent)
Assets
Top 3 banks
Top 5 banks
Top 10 banks

Deposits

62.6
75.8
82.0

61.6
75.2
81.5

1965 {percent)
Assets

Loans

Decrease in concentration {percent)
Assets

Deposits

57.4
63.9
71.6

63. 1
76.4
82.8

Loans

Deposits
56.6
63.1
70.9

54.6
62.4
71.1

Increase in concentration after merger {percent)

Loans

Assets

3.3
3.0
2.6

Top 3 banks..
Top 5 banks.
Top 10 banks

Loans

Deposits
3.5
3.1
1.7

3.8
3.3
1.7

Decrease in concentration remaining {percent)
Assets
Top 3 banks
Top 5 banks
Top 10 banks

Deposits

4.7
12.0
9.4

4.5
11.9
10.3

It has been alleged in advisory reports from other
agencies that the applicant banks have affiliates whose
deposits and loans should be added to those of the
applicant banks for the purpose of determining concentration. While it is true that certain interests owning shares in the applicant banks also own shares of
some smaller banks in the Houston area, each of these
banks operates independently. They have, for example,
turned down participation loans offered by the applicant banks. In no case does any officer or director of
one of the applicant banks own as much as 50 percent
of a smaller bank. Some of these smaller banks do have
close relationships with the applicant banks, but these
correspondent type relations are common among independent banks. Because these so-called affiliate
banks operate independently with an independent
board of directors, we cannot include them in determining the percentage of concentration of the applicant banks in the Houston area market.
Competition for accounts is not confined to the
Houston area. Both of the applicant banks are primarily wholesale banks and thus compete in the national market. It is widely held in the banking profes-




Loans
9.2
14.7
10.3

sion that accounts of $100,000 or over are considered
to be wholesale accounts because their size permits
them to take advantage of the best banking conditions
in any part of the country. Statements from other quarters that such accounts do not actively shop among
major banks, regardless of geography, only indicate a
lack of familiarity with the operations of financial institutions, particularly commercial banking. The charter
bank has 76 percent of its IPC demand deposits in large
accounts of $100,000 and over, and the merging bank
has 71 percent of its IPG demand deposits in the over
$100,000 accounts. Loans in excess of $100,000 represent 79 percent of First City's total commercial and
industrial loans, and 78 percent of Southern's total
commercial and industrial loans. First City has 42 percent of its lines of credit, or $63 million, extending to
firms operating beyond the Houston metropolitan area.
In the $100,000 and over IPC demand deposit accounts, individuals and firms with headquarters outside the Houston SMS A accounted for 41.2 percent of
First City's accounts and 34.5 percent of Southern
National's accounts.
173

In correspondent accounts, the charter bank has 535
deposit accounts totaling $113,937 million. Four hundred and twenty of these accounts are from American
banks outside the Houston SMSA, and 47 are from
foreign banks. Southern National has deposit accounts
from 41 banks outside the Houston SMSA totaling
$4,533 million, and from 25 banks within the SMSA
totaling $8,452 million.
Although it is difficult to document because of private bank records, competition by major banks located
in other financial centers is vigorous in Houston. Banks
in New York, Boston, Chicago, and Dallas and on
the west coast enter the Houston area and obtain sizeable loans. A 1957 Federal Reserve study, for example,
reported that New York banks held $375 million of
loans to Houston borrowers, the largest amount of
out-of-city loans made by New York banks that year.
This intense competition from out-of-State banks has
not abated over the years, but has, in fact, increased in
vigor.
It is clear then that the effect of the merger upon
competition will not be adverse in the Houston area,
as there will remain a wealth of choices for financial
services in the downtown and suburban areas. In the
wholesale banking market, which is the specialty of
both applicant banks, the merger will be a salutary
influence on competition because of the increased ability of the resulting bank to compete effectively with
other large wholesale banks.
Another factor that must be considered under the
Bank Merger Act is the management of the applicant
banks. The charter bank, while well managed in the
past, now finds itself seriously understaffed, largely
due to recent deaths and retirement of its officers.
There are no immediate prospects for relief, apart from
the merger, because many of the charter bank's key
officers are near the retirement age. Recruitment from
outside is both difficult, because of the national shortage of qualified bank personnel, and uncertain, because of internal morale problems when new employees
are systematically brought in above First City's present
personnel.
The infusion of personnel from the merging bank
will alleviate this problem. With respect to age, the
average age of Southern National's executives is 10
years below the average age of First City's, and Southern National's executives are grouped in age brackets
and job categories where First City has the greatest
needs. After merger, the resulting bank will be able to
staff adequately its existing departments and expand
into broader areas of service which are required in the
Houston area.
174




The increment in services will permit a greater response to the convenience and needs of the Houston
community. There are a number of areas in which the
applicant banks do not offer adequate service, or any
service, but where the combined resources and manpower of the resulting bank would permit the offering
of these services.
Neither of the banks offers long-term permanent
real estate loans. The combined construction loan staffs
of the applicant banks will enable the resulting bank
to expand into a permanent real estate loan operation.
These loans could be handled for the bank's own portfolio, for investments by trusts which the bank is servicing, and as a means to enlarge mortgage servicing to
other institutions.
The resulting bank will also be able to offer more
comprehensive automated services to the Houston community than either applicant bank now offers. While
both banks have been primarily occupied with internal
operational needs in the automation area and the
provision of such services to other banks, the combining of the banks will permit expansion into professional
billing, insurance premium processing, brokerage accounting, and other areas. Commercial accounting
services, which will be expanded or originally offered
by the resulting bank, include payroll, receivables, payables, and general ledger accounting services.
Another major advantage of the merger will be the
development of a substantial international department.
Although the four largest banks in Houston now offer
some foreign banking services, they are not adequate
for the international commerce generated in the Houston area. With the increased manpower and facilities of
the resulting bank, establishment of foreign agency offices and organization of an Edge Act subsidiary for
expanding foreign activities become feasible for the
resulting bank. With the increasing importance of
Houston as a foreign trade center and the continuous
overseas expansion of the oil and gas industry, much
of it based in Houston, the development of a strong
international department by the resulting bank will be
a notable service to the community.
A new department will be created to handle equipment leasing financing. The charter bank has not had
personnel to handle this business to any appreciable
extent and the merging bank has been impeded by a
lack of loanable funds. This new department will offer
increased competition to the Houston area banks now
offering this service.
The trust department of the resulting bank will be
strengthened by the merger. Corporate trust services
concerned with debenture issues and various types of

secured corporate indentures will be offered to the
customers of the merging bank. The charter bank's
collective investment programs, and services to local
mutual funds and development funds would be expanded. The establishment of a real estate investment
trust would be within the capability of the resulting
bank's trust department.
The applicant banks also expect to increase the
activities of the investment department now operated
by the charter bank. There should be greater participation in the municipal bond dealer area, as well as
in the purchase and sale of government bonds and Federal agency obligations. In addition, the resulting bank




could provide expanded money desk, Federal funds,
and negotiable certificates of deposit services.
Thus, it is evident that the convenience and needs
of the Houston area banking community will be considerably enhanced by the proposed merger. The increased size and complexities of the Houston economy
demand these new and improved banking services.
We, therefore, find that any anticompetitive effects of
this transaction are clearly outweighed in the public
interest by the probable effect of the transaction in
meeting the convenience and needs of the Houston
area community, and the application is approved.
NOVEMBER 10,

1966.

175




APPENDIX B

Statistical Tables

Statistical Tables
Table No.

B-l
B-2
B-3
B-4
B 5
—
B-6
B-7
B-8
B-9
B-10
B-ll
B-l2
B-l 3
B-14
B-l5
B-l6
B-l 7
B-l8
B-l9

Title

Page

Comptrollers of the Currency, 1863 to the
present
Administrative Assistants to the Comptroller of
the Currency and Deputy Comptrollers of the
Currency
Regional Administrators of National banks
Changes in the structure of the National banking
system, by States, 1863-1968
Charters, liquidations, and changes in issued
capital stock of National banks, calendar 1968.
Applications for National bank charters, approved and rejected, by States, calendar 1968.
Applications for National bank charters, to be
issued pursuant to corporate reorganizations,
by States, calendar 1968
Newly organized National banks, by States,
calendar 1968
National bank charters issued and mergers consummated pursuant to corporate reorganizations, by States, calendar 1968
State chartered banks converted to National
banks, calendar 1968
National banks reported in voluntary liquidation, calendar 1968
National banks merged or consolidated with
State banks, calendar 1968
National banks converted into State banks,
calendar 1968
Purchases of State banks by National banks,
calendar 1968
Consolidations of National banks, or National
and State banks, calendar 1968
Mergers of National banks, or National and
State banks, by States, calendar 1968
Mergers resulting in National banks, by assets of
acquiring and acquired banks, 1960-68
Domestic branches entering the National banking system, by de novo opening, merger, or
conversion, by States, calendar 1968
Domestic branches of National banks closed, by
States, calendar 1968

178




179
180
181
182
183
184
185
186
187
189
189
190
191
191
192
193
198
199
207

Table No.

Title

B-20 Principal assets, liabilities, and capital accounts
of National banks, by deposit size, year end
1967 and 1968
B-21 Dates of reports of condition of National banks,
1914-68
B-22 Total and principal assets of National banks, by
States, June 29, 1968
B-23 Total and principal liabilities of National banks,
by States, June 29, 1968
B-24 Capital accounts of National banks, by States,
June 29, 1968
B-25 Total and principal assets of National banks, by
States, Dec. 31, 1968
B-26 Total and principal liabilities of National banks,
by States, Dec. 31, 1968
B-2 7 Capital accounts of National banks, by States,
Dec. 31, 1968
B-28 Loans and discounts of National banks, by States,
Dec. 31, 1968
B-29 Income and expenses of National banks, by
States, year ended Dec. 31, 1968
B-30 Income and expenses of National banks, by
deposit size, year ended Dec. 31, 1968
B—31 Capital accounts, net profits, and dividends of
National banks, 1944-68
B-3 2 Loan losses and recoveries of National banks,
1945-68
B-3 3 Securities losses and recoveries of National banks,
1945-68
B-34 Assets and liabilities of National banks, date of
last report of condition, 1950-68
B-35 Total assets of foreign branches of National banks,
year end 1953-68
B-36 Foreign branches of National banks, 1960-68...
B-3 7 Assets and liabilities of foreign branches and
military facilities of National banks, Dec. 31,
1968: consolidated statement
B-38 Common trust funds, by States, 1967 and 1968..
B-39 Trust assets and income of National banks, by
States, calendar 1968

Page

209
210
212
213
214
215
216
217
218
219
229
232
233
234
235
236
236
236
237
238

TABLE B-l

Comptrollers of the Currency, 1863 to the present
No.

Name

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 O . . .
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




Date of
appointment

Date of
resignation

May 9, 1863
Mar. 21, 1865
Feb. 1, 1867
Apr. 25, 1872
May 12, 1884
Apr. 20, 1886
May 1, 1889
Aug. 2, 1892
Apr. 26, 1893
Jan. 1, 1898
Oct. 1, 1901
Apr. 27, 1908
Feb. 2, 1914
Mar. 17, 1921
May 1, 1923
Dec. 20, 1924
Nov. 21, 1928
May 11,1933
Oct. 24, 1938
Apr. 16, 1953
Nov. 16, 1961
Nov. 16, 1966

Mar. 8, 1865
July 24, 1866
Apr. 3, 1872
Apr. 30, 1884
Mar. 1, 1886
Apr. 30, 1889
June 30, 1892
Apr. 25, 1893
Dec. 31, 1897
Sept. 30, 1901
Mar. 28, 1908
Apr. 27, 1913
Mar. 2, 1921
Apr. 30, 1923
Dec. 17, 1924
Nov. 20, 1928
Sept. 20, 1932
Apr. 16, 1938
Feb. 15, 1953
Nov. 15, 1961
Nov. 15, 1966

State

Indiana
New York
Ohio
Minnesota
Minnesota
South Carolina
Michigan
New York
Illinois
Illinois
Illinois
New York
Virginia
Ohio
Illinois
Illinois
Ohio
California
Massachusetts
Ohio
Illinois
Texas

179

TABLE B-2

Administrative Assistants to the Comptroller of the Currency and Deputy Comptrollers of the Currency
No.

Dates of tenure

Name

State

ADMINISTRATIVE ASSISTANTS TO THE COMPTROLLER

Larsen, Arnold E
Faulstich, Albert J
Chase, Anthony G
Wickman, Wayne G
Nicoll, John

,

uly 1,1962
Dec. 24,1961
^uly 2, 1962 uly 18,1965
^eb. 25,1967
Tuly 21,1965
i-eb. 27,1967 Aug. 17,1968
Aug. 19,1968

Nebraska
Louisiana
Washington
Texas
New York

DEPUTY COMPTROLLERS OF THE CURRENCY

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, William, Jr
Diggs, Marshall R
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, Raddiffe
Faulstich, Albert J
Motter, David C
Gwin, John D

180




i 9,1863 Aug. 1,1865 New York
. 1, 1865 Jan. 31,1867 Ohio
: 12, 1867 Apr. 24,1872 Minnesota
.
. 8,1872 Jan. 3, 1886 New York
, 5,1886 Jan. 3, 1887 New York
, 27,1887 M a y 25, 1890 Virginia
. 11,1890 Mar. 16, 1893 Indiana
. 7,1893 Mar. 11,1896 Kentucky
\ 12,1896 Aug. 31, 1898 South Carolina
t 1,1898 June 27,1899 New York
.
e 29, 1899 Mar. 2,1923 Dist. of Columbia
- 1, 1908 Feb. 14,1927 Indiana
f 21, 1923 Dec. 19,1924 Illinois
' 1, 1923 June 30, 1927 Illinois
, 6, 1925 Nov. 30, 1928 Virginia
' 1, 1927 Feb. 15,1936 Maryland
' 6,1927 Oct. 16, 1941 Indiana
. 1, 1928 Jan. 23, 1933 Washington
. 24, 1933 Jan. 15,1938 Georgia
. 24, 1936 Jan. 15,1938 California
. 16, 1938 Sept. 30, 1938 Texas
. 16, 1938 Sept. 30, 1938 California
. 1, 1938 Dec. 31, 1948 Iowa
y 1, 1939 Aug. 31, 1941 Iowa
r 7, 1941 Mar. 1, 1951 Iowa
t. 1,1941 Sept. 30, 1944 Nebraska
. 1, 1944 Feb. 17, 1952 Nebraska
. 1, 1949 Aug. 31, 1950 Texas
t. 1,1950 M a y 16, 1960 New York
r. 1,1951 Apr. 1, 1962 Virginia
. 18,1952 Dec. 31, 1962 Colorado
t. 15, 1959 Aug. 31,1962 Ohio
y 16, 1960 Aug; 3,1962 Missouri
. 2, 1962 Nov. 15, 1966 Texas
r. 4,1962 Oct. 26,1963 Connecticut
t. 3,1962
Ohio
: 23, 1962
.
Iowa
. 1, 1963
Virginia
j 13, 1964 June 30, 1966 Iowa
t. 1, 1964
Massachusetts
t. 1,1964 'june*"i,'i967 Wisconsin
r 19, 1965
Louisiana
r 1, 1966
Ohio
: 21, 1967
Mississippi

TABLE B-3
Regional Administrators of National banks
Region

Name

Headquarters

1

Elmer J. Peterman

Boston, Mass

2
3
4
5

Charles M. Van Horn
R. Goleman Egertson
John W. Shaffer, J r
Page Cranford

New York, N.Y
Philadelphia, Pa
Cleveland, Ohio
Richmond, Va

6
7
8
9
10
11
12
13
14

Joseph M. Ream
Joseph G. Lutz
William A. Robson
Douglas T. Bushman
John R. Burt
Michael Doman
John R. Thomas
Kenneth W. Leaf
Arnold E. Larsen

Atlanta, Ga
Chicago, 111
Memphis Tenn
Minneapolis, Minn
Kansas City, Mo
Dallas, Tex
Denver, Colo
Portland, Oreg
San Francisco, Calif




States

Connecticut, Maine, Massachusetts, New Hampshire,
Rhode Island, Vermont.
New Jersey, New York.
Pennsylvania, 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, Hawaii, Nevada:

181

TABLE B-4

Changes in the structure of the National banking system, by States, 1863-1968

Organized
and opened
for business
1863-1968

Insolvencies

Liquidated

In
operation
Converted Merged or Dec. 31,
to State consolidated 1968
with State
banks
banks

694

351

2,819

6,726

89

292

4,716

203

4

3

45

62

0

89

0

0
0
2
34

0
6
39
66
56

2
21
55
391
86

0
0
0
3
0

o

1
1
0
17

0

7
1

69
18

o

o

5
3
68
72
118

0

14
8

29
5

20
5

o
6

38
292

0
0

0
0

10
204

8
1

0
0

42
0

5
0

0
0

62
2

1
5

87
4

0
19

35
227

65
297

0
5

2
1

9
420

447
562
456
250
121
127

14
4
6
11
4
8

2
0

205
243
198
110
53
79

1
7
4

4

0
5

98
205
77
37
16
13

2
0

123
102
171
80
48
21

3
41
11
8
5
12

10
9
3
0
3
1

69
207
157
192
34
148

4
2
1

1
0
0

17
28
77
116
16
58
76
83
4

76
199
8

3

2

85

440
97
1 018




0
1
0

9
11
4
0
0
1

48
87
98
196
40
98

0
0
1

48
127
4

5

23

0

0

52

59
25
130

151
37
441

1
0
8

19
0
75

143
33
176

8

20

44

58

0

9

3
32
12
2
100
3

0
14
0
3
82
1

100
112
85
31
211
2

118
335
454
102
491
58

0
2
4
0
2
0

0
6
0
4
74
0

42
218
220
11
327
4

134
224
220
1 326

8
13
9
45

8

43
93
36
142

49
81
94
574

0
2
2
25

2
0
2
4

24
34
77
535

46

4

0

6

19

3

2

12

85
280
243
197
295
78
1
1

3
23
18
11

2
38

17
28
51
38
54
12
0
0

29
74
138
68
115
26
0
1

1
0
0
0
0

6
10
1
0
n
ooo

22

ooo

0
1

27
107
27
80
117
40
1
0

Q

oooc

182

18
1
64

ooo

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

49
1
124

0
4

o

263
719
775
153
1,287
68

161

.

o
2

ooo

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

13
42

205
412
18

...

7
43

156
383
350
513
98
322

.

0
1

204
7

.

8
2

112
974

Georgia....
Hawaii
Idaho
Illinois
Indiana
Iowa..
Kansas. . .
Kentucky...
Louisiana
M!aine.

11
0

OOC

136
32

. .

COOO

Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida

Merged

8
32
165
603
265

. . .

Consolidated

15, 687

U n i t e d States
Alabama...
Alaska

New J e r s e y . . .
New Mexico
New York..
North Carolina
North Dakota
Ohio
Oklahoma
Oregon..
Pennsylvania .
Rhode Island

12 U.S.C. 214

Consolidated and merged
under 12 U.S.C. 215

TABLE

B-5

Charters, liquidations, and changes in issued capital stock of National banks, calendar 1968
Capital stock
Number of
banks

Capital notes and
debentures
Common

[ncreases:
Banks newly chartered:
Primary organizations
Reorganizations
Conversion of State banks
Capital stock:
Preferred' 3 cases by new issue
Common:
547 cases by statutory sale
657 cases by statutory stock dividends
4 cases by statutory consolidation
40 cases by statutory merger
4 cases by conversion of preferred stock
54 cases by conversion of capital notes
Capital notes and debentures: 60 cases by new issue. . . . .
Total increases

*31

$8, 050, 000

13

102, 037, 678

$75, 447, 300
$2, 823, 210

38,335,671
238, 608,420
545, 000
35, 961, 825
46, 575
934, 109

3, 928, 750

25, 000, 000
230, 297, 000

44

Decreases:
Banks ceasing operations:
Voluntary liquidations:
Succeeded by National banks
Succeeded by State banks
No successor
Conservatorship * Absorbed by State banks
Statutory consolidations
Statutory mergers
Converted into State banks
Merged or consolidated with State banks
Insolvent
Capital stock:
Preferred: Retired
Common: Converted to common stock
77 cases by statutory reduction
4 cases by statutory consolidation
9 cases by statutory merger
Capital notes and debentures:
Retirements . . . .
Converted to common stock

Preferred

424, 519, 278

6, 751, 960

330, 744, 300

2, 853, 120
100, 000

if?
12
19

500, 000

2,469,125
7,817,660

1, 100,000

1," 626,961'
867, 500
1, 478, 905

3, 121,500
676, 368

278, 369, 798
4, 667, 626
3, 797, 868

284, 637,424

Net change
Charters in force Dec. 31, 1967, and issued capital

—39
4,756

407, 306, 007 2, 954, 092
5, 321, 746, 605 55, 377, 875

46, 106, 876
1,235, 115,585

Charters in force Dec. 31, 1968, and issued capital

4,717

5, 729, 052, 612 58, 331, 967

1,281,222,461

Total decreases

83

17,213,271

•Includes 16 reorganized banks with capital stock of $3,855,000.
f Includes one voluntary liquidation pursuant to corporate reorganization.
j Includes 1 consolidated reorganized bank.
§Includes 15 merged reorganized banks.
$105, 583, 135 (537 cases)
NOTE: Premium on sale of common stock
3, 733, 518 (54 cases)
Premium on converted capital notes. .




109,316,653

(591 cases)

183

TABLE B-6
Applications for National bank charters, approved and rejected, by States, calendar 1968*
Approved

Rejected

Approved Rejected

ALABAMA

NORTH CAROLINA

Gastonia
Fort Rucker National Bank, Fort Rucker.. Jan. 18
ARKANSAS

OKLAHOMA

,

^ Feb: 5

Tulsa

Dumas

Apr; 10
SOUTH C A R

Mar. 25

°"N A

Hartsville
FLORIDA

United National Bank of Dadeland, Dadeland Shopping Center, Dade County... Feb. 27
Hialeah
' May 28
Palm Springs
June 26
Citizens First National Bank of Citrus
County, Inverness
Dec; 5
Eglin National Bank, Fort Walton Beach.. Dec. 11
ILLINOIS
The First National Bank of McHenry,
McHenry
Mar. 29
Elgin
Apr. 3
Peoples National Bank of Springfield,
Springfield

Apr: 15
SOUTH DAKOTA

Dec. 20

Mitchell

Mar; 12
TENNESSEE

Jamestown

Nov. 26
TEXAS

Great Southwest National Bank of Arlington, Arlington
Apr. 26
Pharr
July
Community National Bank, Austin
July 25
UTAH

Second National Bank of Layton, Layton.-. Dec. 20

...

VIRGINIA
Mechanicsville

MINNESOTA

9

Apr. 15
WASHINGTON

First Plymouth National Bank, Minneapolis
Aug. 16
Roseville
'
Dec. 6

Columbia Center National Bank, Kennewick
June 5
Kennewick
June 5
Everett
Nov. 15

MISSISSIPPI
WEST VIRGINIA

Baldwyn

Nov. 25

The Suncrest National Bank, Morgantown. Apr; 10
MISSOURI
St. Albans
Aug. 16
Independence
Dec. 3
WISCONSIN
NEW JERSEY
University National Bank of Eau Claire,
Jy 9
Eau Claire
July
Mount Laurel
July 11
New Berlin
July 9
The Pennsville National Bank, Pennsville.. Aug; 1
Greendale
Sept. 4
* Excludes conversions, and charters to be issued pursuant to corporate reorganizations.

184




TABLE B-7
Applications for National bank charters to be issued pursuant to corporate reorganizations, by States, calendar 1968
Approved Rejected

Approved Rejected

NEW YORK—continued

ALABAMA

Alabama National Bank, Birmingham. . .. Oct.

4

ARKANSAS

Simmons National Bank of Pine Bluff,
Pine Bluff
Oct. 23
CALIFORNIA

First National Bank of San Diego, San
Diego
Oct. 14
B. A. National Bank, San Francisco
..~. Oct. 28
WF National Bank, San Francisco
- Nov. 27

National Bank of Westchester, White
Plains
_
Aug. 21
Peoples Bank of Long Island, National Association, Patchogue, New York
~ Oct. 25
NORTH CAROLINA

Queen City National Bank, Charlotte
American-Security National Bank, Charlotte
Wachovia Bank and Trust Company,
N. A., Winston-Salem
Southern City National Bank, Lumberton..
Financial National Bank, Jacksonville

Mar. 29
Aug; 27
Sept. 17
Sept. 27
Oct. 25

CONNECTICUT

Pearl Street National Bank, Hartford

Oct.

1

FLORIDA

Marine National Bank of Jacksonville,
Jacksonville
May 23

Union Security National Bank of Tulsa,
Tulsa
Nov. 21
Liberty Bank, National Association, Oklahoma City
_
Dec; 16
OREGON

Atlanta National Bank, Atlanta
Dec. 10
The Bank of the South National Association, Atlanta
.
Dec. 20

Unit National Bank of Oregon, Portland.. Sept. 9
PENNSYLVANIA

New National Bank, Pittsburgh
Continental National Bank, Chicago
Nov. 21
American National Bank of Chicago, Chicago
Nov. 29
Marion County National Bank, Indianapolis
Oct. 14
Tower National Bank, Indianapolis
Nov. 26
Middle Street National Bank, Portland. . . Oct.

7

MARYLAND

Bay National Bank, Baltimore

Dec. 18

MASSACHUSETTS

Shorebank N.A., Quincy
County Bank of Worcester, National Association, Worcester
Mechanics National Bank, Worcester
Commonwealth Bank, N.A., Boston. ....._.

Oct. 31
Dec. 3
Dec. 5

... Oct. 15

TENNESSEE

The Second National Bank of Memphis,
Memphis
Sept. 20
Third State Bank, N. A., Nashville
Oct. 17
American National Bank of Nashville,
Nashville
,
Dec; 5

Capital Bank, National Association, Houston
Sept. 27
Southern Bank, National Association,
Houston
Dec. 4

Oct. 23 . .

NEW YORK

The City Bank of New York, National Association, New York
July 18 ._.




June 26

SOUTH CAROLINA

Sept. 18

NEBRASKA

Capital City National Bank, Lincoln

RHODE ISLAND

Hope National Bank, Providence

Citizens National Bank, Charleston

MAINE

Oct. 22

William Penn National Bank, Pittsburgh.. Oct. 22

Staunton Bank, N. A., Staunton
Tower National Bank, Richmond.
Main Street National Bank, Richmond. . .
Apple City National Bank, Winchester

July 31
Sept. 9
Oct. 25
Dec. 17

185

TABLE B-8

Newly organized National banks, by States, calendar 196'8*
Charter
No.

Title and location of bank

Total, United States: 15 banks

Total capital
accounts
$9, 387, 000

ALABAMA

15658

Fort Rucker National Bank, Fort Rucker

800, 000
FLORIDA

15666
15644
15647

Beach National Bank, Fort Myers Beach
Citizens National Bank of Naples, Naples
Munroe and Ghambliss National Bank of East Ocala, Ocala
Total: 3 banks

600,000
500,000
500,000
1, 600,000

GEORGIA

15651

First National Bank of Trion, Trion

360,000
ILLINOIS

15655
15654

First National Bank of Northbrook, Northbrook
Suburban National Bank of Palatine, Palatine

800,000
350,000
1, 150, 000

Total: 2 banks
LOUISIANA

15642
15692

Parish National Bank of Bogalusa, Bogalusa
First National Bank of Port Allen, Port Allen

500, 000
750, 000
1, 250, 000

Total: 2 banks
MISSISSIPPI

15672

First National Bank of Ocean Springs, Ocean Springs

500,000

MISSOURI

15657

Swope Parkway National Bank, Kansas City

750,000

NEW HAMPSHIRE

15652

Community National Bank of Rochester, Rochester

15646

Peoples National Bank of Denville, Denville Township

625,000

NEW JERSEY

1, 500,000

TEXAS

15691

600, 000

Community National Bank, Austin
UTAH

15643

Pioneer National Bank, Logan

•Excludes charters issued pursuant to corporate reorganizations.

186




252,000

TABLE

B-9

National bank charters issued and mergers consummated pursuant to corporate reorganizations, by States, calendar 1968*
Operating bank
Mew bank
Resulting bank

Effective date of
merger (M) or
consolidation (C)

Total
capital
accounts

Total
assets

ALABAMA

Birmingham Trust National Bank, Birmingham
Alabama National Bank, Birmingham
Charter issued Dec. 26, 1968
Dec. 31, 1968 (M)

Birmingham Trust National Bank, Birmingham

$23, 020, 662

$348, 074, 339

7, U3, 874

85, 042, 650

66, 910, 699

1, 145, 540, 888

9, 101, 765

153, 648, 015

1, 399, 083, 150

15, 356, 968, 574

69, 505, 440

1, 195,873, 270

9, 862, 615

149, 641, 881

133,316,897

1, 618, 151, 949

ARKANSAS

Simmons First National Bank of Pine Bluff, Pine Bluff
Simmons National Bank of Pine Bluff, Pine Bluff
Charter issued Dec. 31, 1968
Dec. 31, 1968 (M)

Simmons First National Bank of Pine Bluff, Pine Bluff
INDIANA

American Fletcher National Bank and Trust Company, Indianapolis
Marion County National Bank, Indianapolis
Charter issued Dec. 26, 1968
Dec. 31, 1968 (M)

American Fletcher National Bank and Trust Company, Indianapolis
MASSACHUSETTS

South Shore National Bank, Quincy
Shorebank N.A., Quincy
Charter issued Dec. 20, 1968
Dec. 31, 1968 (M)

South Shore National Bank, Quincy
NEW YORK

First National City Bank, New York
The City Bank of New York, N.A., New York
Charter issued Oct. 31, 1968
Oct. 31, 1968 (M)

First National City Bank, New York
NORTH CAROLINA

North Carolina National Bank, Charlotte
American-Security National Bank, Charlotte
Charter issued Nov. 4, 1968
Nov. 4, 1968 (M)

North Carolina National Bank, Charlotte
Southern National Bank of North Carolina, Lumberton
Southern City National Bank, Lumberton
Charter issued Dec. 31, 1968

Dec. 31, 1968 (M)

Southern National Bank of North Carolina, Lumberton
Wachovia Bank and Trust Company, Winston-Salem
Wachovia Bank and Trust Company, N. A., Winston-Salem
Charter issued Dec. 20, 1968

Dec. 31, 1968 (M) Wachovia Bank and Trust Company, N.A., Winston-Salem
•See footnote at end of table.




187

TABLE B-9—Continued
National bank charters issued and mergers consummated pursuant to corporate reorganization, by States, calendar 1968*
Operating bank
New bank
Resulting bank

Effective date of
merger (Af) or
consolidation (C)

Total
capital
accounts

Total
assets

OREGON

United States National Bank of Oregon, Portland
Unit National Bank of Oregon, Portland
Charter issued Dec. 31, 1968
Dec. 31, 1968 (M)

United States National Bank of Oregon, Portland

$102, 301, 235

$1,704, 145,409

67, 589, 296

909, 355,410

48, 723,024

557, 603, 554

5, 886, 127

103, 760, 966

20, 219, 303

224, 864, 716

3, 274, 956

24, 291, 747

RHODE ISLAND

Industrial National Bank of Rhode Island, Providence
Hope National Bank, Providence
Charter issued Sept. 16, 1968
Sept; 18, 1968 (M) Industrial National Bank of Rhode Island, Providence
TENNESSEE

Third National Bank in Nashville, Nashville
Third State Bank, N.A., Nashville
Charter issued Dec. 26, 1968
Dec. 31, 1968 (G)

Third National Bank in Nashville, Nashville
TEXAS

Capital National Bank, Houston
Capital Bank, National Association, Houston
Charter issued Dec. 31, 1968
Dec. 31, 1968 (M)

Capital National Bank, Houston
VIRGINIA

The Central National Bank of Richmond, Richmond
Tower National Bank, Richmond
Charter issued Dec. 31, 1968
Dec. 31, 1968 (M)

The Central National Bank of Richmond, Richmond
The National Valley Bank of Staunton, Staunton
Staunton Bank, N.A., Staunton
Charter issued Oct. 29, 1968

Nov. 1, 1968 (M)

The National Valley Bank of Staunton, Staunton

*A North Carolina merger involved two operating banks, First Union National Bank of North Carolina, Charlotte, and The
National Bank of Alamance of Graham, Graham, and a bank formed pursuant to a corporate reorganization, Queen City National
Bank, Charlotte (see Table B-16). A charter was issued to Marine National Bank of Jacksonville, Florida, in a corporate reorganization (see Table B-ll).

188




TABLE B-10

State chartered banks converted to National banks, calendar 1968*

Charter
No.

Title and location of bank

State

Effective
date of
charter
1968

$102,039,703

Total: 13 banks..
15645
15648
15649
15656
15659
15660
15661
15662
15663
15665
15667
15671

15674

Nevada National Bank of Commerce, Reno..
Conversion of Nevada Bank of Commerce
Phillipsburg Trust Co., National Association.
Conversion of Phillipsburg Trust Co.
State National Bank of Platteville
Conversion of State Bank of Platteville
McLachlen National Bank, Washington
Conversion of McLachlen Banking Corp.
First National Bank of Wayzata
Conversion of North Shore State Bank of
Wayzata
Wells Fargo Bank, National Association,
San Francisco
Conversion of Wells Fargo Bank
First National Bank, Southaven
Conversion of Commonwealth Bank
American National Bank & Trust Co. of
South Bend
Conversion of American Bank & Trust Co.
Coahoma National Bank, Clarksdale
Conversion of Coahoma Bank & Trust Co.
First National Bank, Siloam Springs
Conversion of Bratt-Wasson Bank
First Citizens National Bank, Belmont
Conversion of The Bank of Belmont
Peoples Union Bank & Trust Co., National
Association, McKeesport
Conversion of Peoples Union Bank & Trust
Co.
Industrial National Bank, Tallahassee
Conversion of Industrial Savings Bank of
Tallahassee

Surplus, undivided
profits and
reserves

Outstanding
capital stock

Total assets

$218,509,913 $5, 680, 538, 616

Nev

Jan. 31

NJ

Feb. 15

206, 025 f

Wis

Mar. 19

50, 000

423, 555

8, 313, 854

D.C

July

5

1, 000, 000

1, 349, 081

35, 960,278

Minn. . . . Aug. 1

200, 000

264,219

3, 561,153

3, 359, 600

5, 667, 662

111,378,616

388, 152

12,418, 980

Calif

Aug. 15

90, 795, 090

194, 519, 534

5, 218, 872, 632

Miss

Sept. 3

250, 000

261, 930

2,517,616

Ind..

Sept. 6

1, 250, 000

2, 267,139

53, 689, 662

Miss.

Sept. 9

450, 000

1,437,231

25,647, 650

Ark..

Sept. 30

250, 000

391,621

10, 929, 757

Miss.

Oct. 31

Pa...

Nov; 8

Fla..

Decj 4

60, 000
3, 868, 988
300, 000

237, 907
11,081,991
219,891

3, 992, 944
190,224,359
3,031,115

*Wachovia Bank and Trust Company of Winston-Salem, North Carolina, became a National bank, Wachovia Bank and
Trust Company, N.A., during a corporate reorganization pursuant to the establishment of a one-bank holding company (see
Table B-9).
fRepresents capital stock of State bank. The National bank's capital stock, following conversion, was less by $2,025:
TABLE B-l 1

National banks reported in voluntary liquidation, calendar 1968

Title and location of bank

Date of
liquida-

Total capital
liotiido>t€d
banks

$3, 193, 526

Total: 5 National banks.
The National Bank of Lanark, 111. (14297), absorbed by Exchange State Bank, Lanark, 111
Silverlake National Bank, Los Angeles, Calif. (15388), absorbed by Republic National Bank of California,
Los Angeles, Calif. (15331)
Central National Bank of Jacksonville, Fla. (14744), absorbed by Marine National Bank of Jacksonville,
Fla. (15653)
Pacific Industrial National Bank of South El Monte, South El Monte, Calif. (15320), absorbed by City
National Bank, Beverly Hills, Calif. (14695)
The First National Bank of Okeana, Ohio (9450), absorbed by The Citizens Bank, Hamilton, Ohio




Jan. 2

298, 101

Feb. 29

1,295,454

May 27

747, 333

Aug. 30
Oct. 9

646, 922
205, 716

189

TABLE B-12

National banks merged or consolidated with State banks, calendar 1968

Title and location of bank

Effective
date,
1968

Total
capital
accounts of
National
banks

$24, 341,020

Total: 19 banks.
The Grove City National Bank, Grove City, Pa. (5501) merged into Northwest Pennsylvania Bank &
Trust Co., Oil City, Pa
The National Bank of Topton, Topton, Pa. (8223) merged into Peoples Trust City Bank, Reading, Pa. ..
The First National Bank of McAdoo, McAdoo, Pa. (8619) merged into American Bank & Trust Co. of
Pennsylvania, Reading, Pa
Peoples National Bank of Gloucester, Gloucester, Va. (15002) merged into Southern Bank of Norfolk,
Norfolk, Va
Th Fi , N t i
The First National title Citizens Bank of South Carolina
S.C., under the Bank of Lancaster, S.C. (14967) merged into The Anderson Bank of Dillon, Dillon,
S.C., under Bank of Independence, Independence, Oreg. (3979) merged into Citizens Valley Bank,
First National the title "Citizens Bank of South Carolina"
Albany, Oreg
Alb
O
The Chalfont National Bank, Chalfont, Pa. (12582) merged into Bucks County Bank & Trust Co.,
Perkasie, Pa
American National Bank of Killeen, Killeen, Tex. (15044) merged into First State Bank, Killeen, Tex.,
and under title of "American State Bank"
Englewood National Bank & Trust Co., Englewood, N.J. (15498) merged into The Midland Bank &
Trust Co., Paramus, N.J
The Farmers National Bank of Manchester, Manchester, Ohio (9091) merged into The Farmers Bank
& Savings Co., Peebles, Ohio, and under the title "The Farmers Bank"
The Peoples National Bank & Trust Co., of Norristown, Norristown, Pa. (2581) merged into the American
Bank & Trust Co. of Pennsylvania, Reading, Pa
The First Navajo National Bank, Holbrook, Ariz. (1398) merged into The Bank of Tucson, Tucson,
Ariz., and under the tide "Great Western Bank & Trust Co."
Northern Westchester National Bank, Chappaqua, N.Y. (12746) merged into Bankers Trust Co., New
York, N.Y
The Kerhonkson National Bank, Kerhonkson, N.Y. (10855) merged into Kingston Trust Co., Kingston,
N.Y.,
Russell County National Bank, Honaker, Va. (13880) merged into Washington Trust Bank, Bristol, Va.
The Union National Bank of Franklinville, Franklinville, N.Y. (2755) merged into The First Trust Co.
of Allegany County, Wellsville, N.Y., under the tide "First Trust Union Bank"
Litchfield County National Bank, New Milford, Conn. (1193) merged into The Colonial Bank & Trust
Co., Waterbury, Conn
County National Bank, Blackville, S.C. (15560) merged into American Bank & Trust, Orangeburg, S.C
Fidelity National Bank, Arlington, Va. (15254) merged into The American Bank, Woodbridge, Va

190




Jan. 5
Mar. 1

Mar. 15
May 4
June 28
July

1

July

1

July 26
Aug. 16
Aug. 31
Sept. 20
Sept. 30
Nov. 29
Nov. 29
Nov. 30
Dec.

1, 245, 822
1, 573, 034
472,459
472, 828
392, 242
716,278
743,811
518, 466
2, 043, 978
229, 183
4, 097,416
1, 702, 740
1, 966, 545
813, 093
811,721

3

831, 947

Dec. 6
Dec. 30
Dec. 31

3, 338, 174
554,116
1,817, 167

TABLE B-13

National banks converted into State banks, calendar 1968
Total capital
accounts of
National
banks

Title and location of bank

$6,457, 626

Total: 12 banks.
Westmont National Bank, Houston, Tex. (15238), converted into Liberty Bank, Houston
First National Bank in Marietta, Marietta, Ohio (13971), converted into The First Bank of Marietta. . . .
The First National Bank of Mackinaw, Mackinaw, 111. (8732), converted into First Security Bank
The First National Bank of Bartlett, Bartlett, Tex. (5422), converted into First Bank & Trust Co. of
Bartlett.
The First National Bank of Lebanon, Lebanon, 111. (12366), converted into Lebanon Trust & Savings
Bank
Gonzales National Bank, Gonzales, Tex. (14762), converted into Gonzales Bank
Draper National Bank, Draper, Utah (15357), converted into Draper Bank & Trust
The First National Bank of Oglesby, Oglesby, Tex. (12652), converted into Oglesby State Bank, Oglesby..
The First National Bank of Ripley County, Batesville, Ind. (7824), converted into First Bank & Trust
Co. of Batesville
Metropolitan National Bank, Kansas City, Mo. (15261), converted into The Metropolitan Bank
Lumbermen's National Bank of Houston, Houston, Tex. (15578), converted into Greenway Bank & Trust
of Houston
Texas National Bank of Temple, Temple, Tex. (15061), converted into Texas Bank & Trust of Temple..

Feb. 1
Feb. 19
Mar. 4

499,315
1, 052, 391
179,043

Mar. 30

275, 804

Apr.
May
May
July

30
1
31
1

386, 943
491, 677
323, 368
90, 162

Sept. 6
Oct. 19

698, 093
594,480

Dec.
Dec.

957, 858
908,492

TABLE B-14

Purchases of State banks by National Banks, calendar 1968

Title and location of banks

Effective
date,
1968

$5, 764, 192

Total: 7 banks.
The National Bank of Commerce of Seattle, Wash. (4375), purchased the Grand view Security Bank,
Grandview, Wash
The Citizens & Southern National Bank, Savannah, Ga. (13068), purchased the Commercial & Savings
Bank of Augusta, Ga
Bank of America National Trust & Savings Association, San Francisco, Calif. (13044), purchased the New
St. Croix Savings Bank, Christiansted, St. Croix, U.S. Virgin Islands
Zions First National Bank, Salt Lake City, Utah (4341), purchased The Bank of Spanish Fork, Spanish
Fork, Utah
Seattle-First National Bank, Seattle, Wash. (11280), purchased the First State Bank, LaCrosse, Wash. . ..
San Joaquin Valley National Bank, Tulare, Calif. (15357), purchased the State Bank of Chowchilla, Chowchilla, Calif
Western Pennsylvania National Bank, Pittsburgh, Pa. (2222), purchased St. Clair Deposit Bank of Pittsburgh, Pa




Total capital
accounts of
State banks

Jan. 26

339, 898

Mar. 30

1, 627, 000

June 17

45, 557

Aug. 30
Aug. 30

1, 041, 437
455, 000

Nov. 8

770, 300

Nov. 8

1,485,000

191

TABLE B-15

Consolidations of National banks, or National and State banks, calendar 1968
Effective
date

Consolidating banks
Resulting bank

Outstanding
capital
stock

Surplus

Undivided
profits and
reserves

Total assets

Total: 6 consolidations
CALIFORNIA

$3, 000, 000

$2, 500, 000

$708, 451

$38, 942, 689

3, 632, 500

1, 816, 250

356, 661

25, 109, 943

3, 000, 000

2, 500, 000

708, 451

64,017,245

1, 000, 000
350, 000

2, 000, 000
650, 000

1, 043,497
231, 999

30, 721, 009
13,655,612

1,315,000

2, 685, 000

1, 275, 496

44, 376, 621

669, 500
100,000

1, 000, 000
400,000

152, 223
91, 335

26, 985, 159
6, 637, 076

944, 500

1, 200, 000

268, 558

First National Bank, Williamsport (175)
Danville National Bank, Danville (1078)

350, 000
200,000

1, 150, 000
800, 000

679, 138
170, 737

32, 968, 320
14, 956, 831

Fidelity National Bank of Pennsylvania, Williamsport (175)

550, 000

1, 950, 000

849, 875

47, 925, 151

530, 000

1, 070, 000

788, 966

33, 714, 420

250, 000

1, 100, 000

619, 170

17,437,673

First National Bank & Trust Co., Washington
(5920)

1, 000, 000

2, 000, 000

1, 358, 136

51, 152, 092

Dec. 31 First National Bank & Trust Co., Millersburg
(2252)
First National Bank of EHzabethville (5563)

150, 000
125, 000

200, 000
137, 500

368,517
61, 115

7, 577, 562
4, 224, 555

Upper Dauphin National Bank, Millersburg (2252)

425, 000

337, 500

279, 632

11,802,117

July 26 First San Francisco Bank, San Francisco
Commonwealth National Bank of San Francisco,
San Francisco (15330)
Commonwealth National Bank, San Francisco
(15330)
MASSACHUSETTS

Oct. 31 Safety Fund National Bank, Fitchburg (2153)
First National Bank of Gardner (884)
First Safety Fund National Bank, Fitchburg (2153)
NEW YORK

Feb. 27 Citizens National Bank, Wellsville (4988)
Cuba National Bank, Cuba (1143)
Citizens National Bank & Trust Co., Wellsville
(4988)

33, 622, 236

PENNSYLVANIA

Nov. 1

Nov. 18 First National Bank, Washington (5920)
First National Bank& Trust Co., Waynesburg
(13134)

192




TABLEB-16

Mergers* of National banks, or National and State banks, by States, calendar 1968
Merging banks
Resulting bank

Effective
date

Outstanding
capital
stock

Undivided
Surplus

profits and

Total assets

Total: 49 merger actions

Sept. 30 Farmers and Merchants Bank, Madison
The First National Bank of Huntsville, Huntsville
(4067)

$125,000
1, 300, 000

$100, 000
2, 700, 000

$3,814
1, 024, 050

$2, 477, 868
73, 370,422

The First National Bank of Huntsville, Huntsville
(4067)

1, 357, 470

2, 700,000

1, 195, 393

75,642, 957

CALIFORNIA

July

1 Pacific National Bank of San Francisco, San Francisco (12579)
Security First National Bank, Los Angeles (2491)

7, 153, 080

8, 541, 420

4, 574, 450

253,610, 154

131, 100,000

143, 900, 000

91, 146, 944

5,403,516,787

Security Pacific National Bank, Los Angeles (2491)

140, 000, 000

160, 000, 000

86, 409, 706

5, 654, 748, 903

June 6 Bellflower National Bank, Bellflower (15484)
Southern California First National Bank, San
Diego (3050)

683, 500
6, 321, 970

446, 000
11,578,030

297, 510
13, 927, 777

10,231,228
534, 007, 753

Southern California First National Bank, San
Diego (3050)

6,711,565

12, 288, 435

14, 254, 787

544, 238, 981

Sept. 3 Continental Bank, Beverly Hills
County National Bank, Orange (15265)
United States National Bank, San Diego (10391)

2, 106, 413
1, 391, 660
9, 700, 000

1, 380, 605
867, 997
9, 500, 000

597,371
328, 247
2, 327, 000

19, 618, 149
13,856, 174
409, 452, 288

United States National Bank, San Diego (10391)

13, 033, 830

9, 500, 000

5, 974,448

457, 143, 885

500, 000
1, 100, 000

109, 000
600, 000

0
265, 693

1, 475, 000

Oct. 18 Civic National Bank, Marina Del Ray (15323)
Surety National Bank, Encino (15369)
Surety National Bank, Encino (15369)

7, 182, 077
15, 344, 094

600, 000

275, 253

Oct. 31 Sequoia National Bank of San Mateo County,
Redwood City (15341)
The Bank of California N.A., San Francisco (9655)

900, 000

398, 000

205, 061

18, 983, 630

41,016,370

13, 792, 340

The Bank of California N.A., San Francisco (9655)

19,433,630

42, 066, 370

13,795,402

50, 000
100, 000
90, 795, 090

402, 916
323, 013

91, 025, 090

75, 000
100, 000
159, 204, 910
159,379,910

Nov. 15 Bank of La Jolla, San Diego
Southern California First National Bank, San
Diego (3050)

823, 580
6,711,565

414, 736
12, 338, 685

Southern California First National Bank, San
Diego (3050)

7, 040, 995

12, 951, 505

41,251
15, 111,690
15, 449, 007

July 10 El Paso National Bank, El Paso (13631)
The Woodford County National Bank of El Paso,
El Paso (5510)

70, 000
125, 000

110, 000
175,000

71, 563
95, 426

4,695, 749
4, 088, 038

Woodford County National Bank of El Paso, El
Paso (5510)
•See footnote at end of table.

200, 000

200, 000

246, 988

8, 783, 787

Nov. 8 Azusa Valley Savings Bank, Azusa
The First National Bank of Azusa, Azusa (8065)
Wells Fargo Bank, N.A., San Francisco (15660)
Wells Fargo Bank, N.A., San Francisco (15660)




45, 270, 392
45, 916, 321

22,201,171
14,217,261
1,752,081,514
1, 763, 889, 630
5,824,617
5, 718, 186
5, 207, 648, 016
5,219, 127,819
16, 148, 600
598, 495, 991
614, 644, 591

193

TABLE B-l 6—Continued
Mergers* of National banks, or National and State banks, by States, calendar 1968
Effective
date

Merging banks
Resulting bank

Outstanding
capital
stock

Undivided
Surplus

profits and

Total assets

reserves

INDIANA

Nov. 30 Ladoga State Bank, Ladoga
The First National Bank & Trust Co. of Crawfordsville, Grawfordsville (571)

$25, 000
250, 000

$125, 000
750, 000

$59, 370
679, 769

$3, 004, 586
24, 218, 529

The First National Bank & Trust Co. of Crawfordsville, Crawfordsville (571)

290, 625

875, 000

723, 513

27,223, 115

Oct. 31 Oran Savings Bank, Oran
The First National Bank of Oelwein, Oelwein (5778)

25,000
250, 000

70, 000
500, 000

125, 824
364, 696

1, 454, 957
16, 672, 505

The First National Bank of Oelwein, Oelwein (5778)

300, 000

600, 000

422, 708

18,017,321

731, 975
4, 288, 350

620, 920
5,711,650

0
2, 696, 759

22, 708, 508
133,206,282

5,020, 330

6, 386, 245

2, 643, 078

155, 914, 790

466, 650
1, 600, 000

1, 149, 950
2, 500, 000

351,814
897, 729

36, 136, 990
62,149,531

2,266,640

4, 223, 360

476, 142

98, 286,.522

Sept. 30 Western Maryland Trust Co., Frederick
Maryland National Bank, Baltimore (13745)

300,000
15,665,060

700, 000
32,899,181

382, 026
26,969,887

19, 976, 522
1,012,575,235

Maryland National Bank, Baltimore (13745)

16,015,060

33,599,181

27,301,913

1,031,022,181

IOWA

MAINE

Aug.

2 Rumford Bank & Trust Co., Rumford
First National Bank of Portland, Portland (4128)
Maine National Bank, Portland (4128)
MASSACHUSETTS

Dec. 31 The Everett National Bank, Everett (11510)
The County Bank N.A., Cambridge (4771)
The County Bank N.A., Cambridge (4771)
MARYLAND

MISSISSIPPI

July 31 Bank of Brooksville, Brooksville
The National Bank of Commerce of Columbus,
Columbus (10361)

86, 565

223, 608

61, 574

4, 993, 996

375,000

750,000

62,499

14,177,146

The National Bank of Commerce of Columbus,
Columbus (10361)

673, 130

762, 043

225, 284

19,573,016

NEW HAMPSHIRE

Oct. 31 The First National Bank of Hillsborough, Hillsboro
(1688)
The Mechanicks National Bank of Concord, Concord (2447)

100, 000

200, 000

99, 308

6, 023,001

500,000

1, 000,000

567,423

20, 345,484

The Mechanicks National Bank of Concord, Concord (2447)

600,000

1,200, 000

680, 195

26, 305, 301

346,500
2, 514, 060

800, 000
2,714,490

420, 030
463,039

23, 932, 299
91, 348, 325

3, 027, 060

3,517,940

533,119

115,280,624

NEW JERSEY

Mar. 22 Merchantville National Bank & Trust Co., Merchantville (8323)
Colonial National Bank, Haddonfield (14457)
Colonial National Bank, Haddonfield (14457)
*See footnote at end of table.

194




TABLE B-l 6—Continued
Mergers* of National banks, or National and State banks, by States, calendar 1968
Effective

Merging banks

date

Resulting bank

Outstanding

capital
stock

Undivided

Surplus

profits and
reserves

Total assets

NEW JERSEY—continued
Oct. 11 The Hackettstown National Bank, Hackettstown
(1259)
The First National Bank of Washington, Washington
(860)

$180,000

$300, 000

$286, 309

$11,676,992

250, 000

1, 000, 000

707, 524

21,524,032

The Warren County National Bank. Washington
(860)

430, 000

1, 300, 000

993,833

33, 201, 024

NEW MEXICO

Aug; 9 The First National Bank of Hatch, Hatch (12879)
First National Bank of Dona Ana County, Las
Cruces (7720)

100, 000

100, 000

64, 939

2,431,826

900, 000

900, 000

583, 801

52, 943, 885

First National Bank of Dona Ana County, Las
Cruces (7720)

1, 000, 000

1, 000, 000

648, 740

35,195,514

Feb. 29 The State of New York National Bank, Kingston
(955)
The Fallkill National Bank & Trust Co., Poughkeepsie (15641)

1, 000, 000

2, 000, 000

1, 183, 734

40, 294, 541

600, 000

900, 000

683, 069

21,272,556

The State of New York National Bank, Kingston
(15641)

1, 650, 000

2, 900, 000

1, 816, 803

61, 567, 098

June 28 The First National Bank of Woodridge, Woodridge
(11059)
County National Bank, Middletown (13956)

200,000
2, 743, 755

325, 000
2, 995, 000

72, 047
1,277,718

7, 189, 025
140, 779, 142

2, 923, 755

3, 320, 000

1, 347, 265

147, 968, 167

NEW YORK.

County National Bank, Middletown (13956)
Nov. 8 The Second National Bank & Trust Co. of Hempstead, Hempstead (11375)
Security National Bank of Long Island, Huntington
(6587)
Security National Bank, Huntington (6587)
Nov. 8 The Hampton Bays National Bank, Hampton Bays
(12987)
Valley National Bank of Long Island, Valley Stream
(11881)
Valley National Bank of Long Island, Valley Stream

390, 000

610, 000

1, 459, 041

22,884,431

10, 226, 695

20, 167, 045

6, 603, 958

762,647,871

10, 860, 445

20, 777, 045

7,819,248

785, 532, 302

144, 900

287, 800

255, 119

9,714,282

3, 255,465

6,000, 000

3, 061, 809

156,480,526

3, 472, 815

6, 287, 800

3, 244,478

166, 194, 809

NORTH CAROLINA

Feb. 24 Bank of Rich Square, Rich Square
The Planters National Bank & Trust Co., Rocky
Mount (10608)

25, 000

125, 000

88, 996

2,010,476

1, 820, 200

3, 183, 065

1, 080, 281

92, 488, 951

The Planters National Bank & Trust Co:, Rocky
Mount (10608)

1, 880, 200

3, 319, 800

1, 122, 541

94,499,427

Vlar. 22 First National Bank in Henderson, Henderson
(13636)
Southern National Bank of North Carolina, Lumberton (10610)
Southern National Bank of North Carolina, Lumberton (10610)
*See footnote at end of table.

331-934—69

14




150, 000

450,000

100, 255

11,650,742

3, 165, 890

4,017,279

1, 236, 365

116,138,807

3,428, 390

4, 354, 779

1, 395, 663

127,875, 765

195

TABLE B-16—Continued
Mergers* of National banks, or National and State banks, by States, calendar 1968

date

Merging banks
Resulting bank

Outstanding
capital
stock

Surplus

Undivided
profits and

Total assets

NORTH CAROLINA—continued

May 4 First Union National Bank of North Carolina,
Charlotte (9164)
The National Bank of Alamance of Graham, Graham
(8844)
Queen City National Bank, Charlotte (15650)
First Union National Bank of North Carolina,
Charlotte (15650)
Sept. 19 First State Bank & Trust Co., Bessemer City
Commercial State Bank, Laurinburg
First Union National Bank of North Carolina,
Charlotte (15650)
First Union National Bank of North Carolina,
Charlotte (15650)
Dec. 31 The First and Citizens National Bank of Elizabeth
City, Elizabeth City (4628)
First Union National Bank of North Carolina,
Charlotte (15650)
First Union National Bank of North Carolina,
Charlotte (15650)

Jan. 31 The First National Bank of Dalton, Dalton (6372)
The National Bank of Orrville, Orrville (13742)
First National Bank of Orrville-Dalton, Orrville
(13742)

$15, 369, 075

$23, 915, 354

$6, 156, 584

$794,118,610

300, 000
200,000

400,000
40,000

238, 702
10,000

15, 666, 900
258, 700

15, 906, 575

24,071, 703

6,651,437

807, 535, 510

160,000
220,000

335, 000
360, 000

65, 233
121, 242

8, 940, 759
10, 554, 223

15, 906, 575

24, 071, 703

6, 194, 810

16, 343, 825

24, 769, 770

6, 359, 848

200, 000
16, 343, 825

800, 000
24, 769, 770

1, 678, 701

28, 381, 954

6, 520, 003

898,488, 793

17, 123, 825

25, 000,000

8, 198, 068

926, 998, 523

100,000
363, 000

100, 000
500, 000

474,469
426, 921

9, 684, 035
15, 622, 355

553, 000

25, 306, 390

852,486, 078

872, 019, 941

510, 000

901, 390

Mar. 30 The Bradford National Bank, Bradford (14077)
The Miami Citizens National Bank & Trust Co.,
Piqua(1061)

100,000

200,000

35, 625

4, 183, 534

1, 000, 000

1, 000,000

536, 845

30, 814, 691

The Miami Citizens National Bank & Trust Co.,
Piqua (1061)

1, 150, 000

1, 350, 000

372, 470

34, 998, 225

255, 000
34, 864, 063

545,000
40, 135, 938

223, 558
23, 851, 042

9,881,461
1, 578, 377, 249

35, 246, 563

44, 753, 438

19, 860, 830

1, 587, 947, 145

350, 000
500,000

1, 000, 000
1, 800, 000

555, 974
870, 153

19, 666, 500
46, 369, 885
66,036, 385

OREGON

Mar. 4 Grant County Bank, John Day
First National Bank of Oregon, Portland (1553)
First National Bank of Oregon, Portland (1553)
PENNSYLVANIA

Jan. 20 Industrial National Bank of West York, York (8938)
First National Bank & Trust Co., Red Lion (5184)
Southern Pennsylvania National Bank, Red Lion
(5184)

900,000

2, 800, 000

1, 376, 127

9 Brookline Savings & Trust Co., Pittsburgh
Western Pennsylvania National Bank, Pittsburgh
(2222)

1, 403, 125

4,212,500

475, 554

67, 156, 190

12, 721, 550

23, 278,450

8, 087, 097

727, 748,437

Western Pennsylvania National Bank, Pittsburgh
(2222)

Feb.

16, 650, 300

23, 349, 700

7, 936, 755

787,415, 643

400, 000

400, 000

463, 186

15, 454, 138

2, 345, 000

2, 700, 000

1, 114,437

90, 301, 863

2, 645, 000

3, 100,000

1,677,623

105, 756,001

Mar. 15 National-Dime Bank of Shamokin, Shamokin (6942)
Pennsylvania National Bank & Trust Co., Pottsville
(1663)
Pennsylvania National Bank & Trust Co., Pottsville
(1663)
•See footnote at end of table.

196




TABLE B-16—Continued
Mergers* of National banks, or National and State banks, by States, calendar
Effective

date

Merging banks

Resulting bank

Outstanding

capital
stock

1968—Continued
Undivided

Surplus

profits and

Total assets

reserves

PENNSYLVANIA—continued

1 Farmers' and Merchants' Bank, New Oxford
Cumberland County National Bank & Trust Co.,
New Cumberland (14542)

$50, 000

$500, 000

$179, 207

$6, 642, 670

1, 333, 120

2, 767, 664

458, 281

78, 126, 590

Cumberland County National Bank & Trust Co.,
New Cumberland (14542)

1, 645, 620

3, 054, 380

588, 273

84, 769, 260

Nov: 18 The First National Bank at Stoystown, Stoystown
(14089)
The First National Bank of Berlin, Berlin (5823)

100, 000
100, 000

100, 000
300, 000

71, 977
204, 791

2, 983, 198
6, 528, 645

The First National Bank of Somerset County, Berlin
(5823)

160, 000

440, 000

276, 768

9,511,843

Dec. 31 Oconee County Bank, Seneca
The Peoples National Bank, Greenville (10635)

100, 000
1, 737, 750

250, 000
2, 835, 000

156, 031
2,229,017

4, 913, 721
89, 081, 954

The Peoples National Bank, Greenville (10635)

1, 887, 750

3, 085, 000

2,211,048

93, 995, 675

69, 801, 553

May

SOUTH CAROLINA

SOUTH DAKOTA

Jan.

4 American National Bank & Trust Co., Rapid City
(14099)
The National Bank of South Dakota, Sioux Falls
(12881)

1, 800, 000

1, 800, 000

1, 294, 624

2, 000, 000

2, 000, 000

1,314,473

84, 579,022

National Bank of South Dakota, Sioux Falls (12881)

4, 000, 000

4, 000, 000

2, 209, 098

154, 465, 506

June 28 Bank of the Southwest, Midland
The Midland National Bank, Midland (6410)

500, 000
1, 750, 000

500, 000
2, 250, 000

183, 874
540, 047

5, 221, 294
64, 406, 993

The Midland National Bank, Midland (6410)

2, 150, 000

2, 850, 000

723, 921

69, 628, 288

VERMONT

June 28 Montpelier Savings Bank & Trust Co., Montpelier
The Howard National Bank & Trust Co., Burlington (1698)

200, 000

356, 000

253, 448

13, 222, 077

2,310,000

2,310,000

2, 021, 373

96, 050, 667

The Howard National Bank & Trust Co., Burlington (1698)

2, 643, 350

2, 643, 350

2, 163, 784

109, 272, 744

V7TD /"* TMT A

VIRGINIA

Feb. 16 The Colonial National Bank of Alexandria, Alexandria, (15172)
Mount Vernon National Bank & Trust Co. of
Fairfax County, Annandale (14893)

600, 000

300, 000

24, 840

7, 780, 752

1, 500, 000

2, 262, 650

1,499, 178

90, 308, 410

Mount Vernon National Bank & Trust Co. of
Fairfax County, Annandale (14893)

2, 100, 000

2, 562, 650

1, 524, 018

97, 693, 952

120, 000
4, 100, 140

320, 000
5, 100, 000

120,982
2,691,316

7, 096, 555
162, 642, 350

Feb. 24 Planters Bank & Trust Co. of Farmville, Farmville
The Fidelity National Bank, Lynchburg (1522)
The Fidelity National Bank, Lynchburg (1522)

4, 320, 640

5, 420, 000

2,711,798

169, 238, 694

Mar. 14 Bank of Charlotte County, Drakes Branch
The Fidelity National Bank, Lynchburg (1522)

50,000
4, 320, 640

65,000
5,420, 000

35, 276
2,700,821

2, 432, 599
173,439,384

The Fidelity National Bank, Lynchburg (1522)
*See footnote at end of table.

4, 362, 640

5, 493, 000

2, 739, 771

175,873,340




197

TABLE B-16—Continued
Mergers* of National banks, or National and State banks, by States, calendar 1968
Effective
date

Merging banks
Resulting bank

Outstanding
capital
stock

Undivided
profits ond

Surplus

Total assets

VIRGINIA—continued

Mar. 29 The Bank of New Hope, New Hope
National Bank & Trust Co., Charlottesville (10168)
National Bank & Trust Co., Charlottesville (10618)

$50, 000
1, 383, 805

$150, 000
3, 000, 000

$56, 067
1, 880, 493

$1,945,531
80, 494,442

1, 433, 805

3, 150, 000

1, 936, 560

82, 381, 723

50, 000
170, 000

120, 000
163, 000

32, 289
102, 182

2, 118,298
4, 164, 427

290, 400

212,600

142, 574

6, 437, 859

Apr. 27 Chesapeake Banking Co., Lively
The Lancaster National Bank, Irvington (5290)
Chesapeake National Bank, Kilmarnock (5290)
June 29 Farmers and Merchants Bank of Lawrenceville,
Lawrenceville
The National Bank of Woodstock, Woodstock
(11941)
Virginia National Bank, Norfolk (9885)

462, 500

737, 500

221, 944

18, 912, 595

100, 000
10, 241, 150

200, 000
27, 883, 850

46, 052
11,435,565

6, 023, 401
680,855,421

Virginia National Bank, Norfolk (9885)

705,731,615

10, 672, 650

28, 952, 350

11,703,561

Aug. 31 First National Bank of Arlington, Arlington (14660)
First National Bank of Vienna, Vienna (14965)

1, 089, 000
300, 000

1, 261, 000
300, 000

231,495
148, 272

36, 858, 934
9, 188, 397

Suburban National Bank of Virginia, Fairfax County
(14965)

1, 314, 000

1, 636, 000

379, 768

46,047,331

150, 000
10, 672, 650

325, 000
28, 952, 350

88, 376
11,965,970

7, 084, 017
749, 432, 644

10, 785, 150

29,314,850

12, 054, 346

755, 218, 352

75, 000
7, 218, 263

195, 000
9, 381, 738

68, 089
5, 044, 739

5, 177, 233
389,564,631

7, 368, 263

9,531,738

5, 082, 828

394, 664, 546

Nov. 15 Northampton County Trust Bank, Cape Charles
Virginia National Bank, Norfolk (9885)
Virginia National Bank, Norfolk (9885)
WASHINGTON

July 26 Bank of Washougal, Washougal
National Bank of Washington, Tacoma (3417)
National Bank of Washington, Tacoma (3417)

*Excludes mergers involving only one operating bank, effected pursuant to corporate reorganizations.
TABLEB-17

Mergers resulting in National banks, by assets of acquiring and acquired banks,

1960-68*

Assets of acquired bank
Assets of acquiring bank\
Under $10
million

Under $10 million
$10 million to $24.9 million
$25 million to $49.9 million
$50 million to $99.9 million
$100 million and over
Total

$10 million to $25 million to $50 million to
99.9
24.9
49.9
million
million
million

$100 million
and over

Total

75
93
73
82
166

0
11
27
28
105

0
0
6
12
30

0
0
0
2
16

0
0
0
0
12

75
104
106
124
329

489

171

48

18

12

J738

•Includes all forms of acquisitions involving two or more operating banks, from May 13, 1960 through Dec. 31, 1968.
fin each transaction, the bank with larger total assets was considered to be the acquiring bank.
% Comprises 712 transactions, 11 involving 3 banks, 6 involving 4 banks, and 1 involving 5 banks.

198




TABLE

B-18

Domestic branches entering the National banking system, by de novo opening, merger, or conversion, by States, calendar 1968
Branches opened for business
Title and location of bank
Local

232

Total.

Other than

665

The First National Bank of Alexander City, Alexander City...
Birmingham Trust National Bank, Birmingham
The Leeth National Bank of Cullman, Cullman
State National Bank of Alabama, Decatur
Peoples National Bank of Huntsville, Huntsville
The First National Bank of Huntsville, Huntsville
First Colbert National Bank, Leighton
The First National Bank of Montgomery, Montgomery
The Isbell National Bank of Talladega, Talladega
The Talladega National Bank, Talladega
The City National Bank of Tuscaloosa, Tuscaloosa

First National Bank of Arizona, Phoenix
The Valley National Bank of Arizona, Phoenix.
The First National Bank in Blytheville, Blytheville
The First National Bank of Fort Smith, Fort Smith
The First National Bank in Little Rock, Little Rock
Union National Bank of Little Rock, Little Rock
First National Bank, Siloam Springs
Commercial National Bank of Texarkana, Texarkana
CALIFORNIA

Bakersfield National Bank, Bakersfield
Community National Bank, Bakersfield
City National Bank, Beverly Hills
Commercial National Bank, Buena Park
The First National Bank of Cloverdale, Cloverdale
First National Bank of Daly City, Daly City
National Bank of Agriculture, Delano
Gateway National Bank, El Segundo
,
Surety National Bank, Encino
Humboldt National Bank, Eureka
Mechanics National Bank, Huntington Park
Bank of Long Beach, National Association, Long Beach
Pan American National Bank of East Los Angeles, Los Angeles
Republic National Bank of California, Los Angeles
Security Pacific National Bank, Los Angeles
Community National Bank of Fresno County, Mendota
Newport National Bank, Newport Beach
Security National Bank, Oakland
Palm Springs National Bank, Palm Springs
Southern California First National Bank, San Diego
United States National Bank, San Diego
Bank of America National Trust & Savings Association, San Francisco.
The Bank of California, National Association, San Francisco
Commonwealth National Bank, San Francisco
Crocker-Citizens National Bank, San Francisco
Liberty National Bank, San Francisco
Commercial National Bank of San Leandro, San Leandro
Wells Fargo Bank, National Association, San Francisco
The First National Bank of San Jose, San Jose
Redwood National Bank, San Rafael
San Joaquin Valley National Bank, Tulare
National Bank of Whittier, Whittier




19
1
1
1
1
4
3
10
4
1
5
.....
30

222
1
1
1
2

199

TABLE B-l 8—Continued
Domestic branches entering the National banking system^ by de novo openings merger, or conversion, by States, calendar 1968
Branches opened for business
Title and location of bank
Local

CONNECTICUT

The Connecticut National Bank, Bridgeport
The State National Bank of Connecticut, Bridgeport
Hartford National Bank& Trust Co., Hartford
The New Britain National Bank, New Britain
The First New Haven National Bank, New Haven
The Second National Bank of New Haven, New Haven.
The Atlantic National Bank, Stamford
DISTRICT OF COLUMBIA

McLachlen National Bank, Washington
The National Bank of Washington, Washington
The Riggs National Bank of Washington, D.C., Washington.

The First National Bank of Atlanta, Atlanta
The Fulton National Bank of Atlanta, Atlanta
The First National Bank & Trust Co. of Augusta, Augusta
The Citizens and Southern National Bank of Georgia, Savannah.
The Liberty National Bank& Trust Co. of Savannah, Savannah..

The Idaho First National Bank, Boise.

First National Bank & Trust Co. in Alton, Alton
The First National Bank & Trust Co. of Barrington, Barrington.
The St. Clair National Bank of Belleville, Belleville
The National Bank of Bloomington, Bloomington
The Champaign National Bank, Champaign
The First National Bank in Columbia, Columbia
The First National Bank of Decatur, Decatur
The Millikin National Bank of Decatur, Decatur
The First National Bank of Des Plaines, Des Plaines
First Galesburg National Bank & Trust Co., Galesburg
First National Bank of Joliet, Joliet
The Union National Bank of Macomb, Macomb
Pekin National Bank, Pekin
Commercial National Bank of Peoria, Peoria
The First National Bank of Rantoul, Rantoul
Central National Bank& Trust Co. of Rockford, Rockford
The First National Bank & Trust Co. of Tuscola, Tuscola

The First National Bank & Trust Co. of Crawfordsville, Crawfordsville.,
The First National Bank of Elkhart County, Elkhart
Lincoln National Bank & Trust Co. of Fort Wayne, Fort Wayne
Bank of Indiana, National Association, Gary
American Fletcher National Bank & Trust Co., Indianapolis
Merchants National Bank & Trust Co. of Indianapolis, Indianapolis
The Indiana National Bank of Indianapolis, Indianapolis
First National Bank, Kokomo
Purdue National Bank of Lafayette, Lafayette
The National Bank of Logansport, Logansport
The Merchants National Bank of Muncie, Muncie
American National Bank & Trust Co. of South Bend, South Bend

200




Other than

Total

TABLE B-l 8—Continued
Domestic branches entering the National banking system, by de novo opening, merger, or conversion, by States, calendar 1968
Branches opened for business
Title and location of bank
Local

Other than
local

The Merchants National Bank of Cedar Rapids, Cedar Rapids.
East Des Moines National Bank, Des Moines
Iowa-Des Moines National Bank, Des Moines
The First National Bank of Dubuque, Dubuque
First National Bank, Fort Dodge
First National Bank, Iowa City
The First National Bank of Oelwein, Oelwein
The Security National Bank of Sioux City, Sioux City
The Toy National Bank of Sioux City, Sioux City

The Citizens National Bank in Independence, Independence.
Seneca National Bank of Wichita, Wichita
KENTUCKY

The First National Bank of Columbia, Columbia
The Citizens National Bank of Danville, Danville
The Harlan National Bank, Harlan
First National Bank of Louisville, Louisville
Liberty National Bank & Trust Co. of Louisville, Louisville.

City National Bank of Baton Rouge, Baton Rouge
Louisiana National Bank of Baton Rouge, Baton Rouge.
First National Bank in De Ridder, De Ridder
The First National Bank of Lake Charles, Lake Charles.
West Carroll National Bank of Oak Grove, Oak Grove..
The First National Bank of Shreveport, Shreveport
First National Bank of Slidell, Slidell

Merchants National Bank of Bangor, Bangor..
The Camden National Bank, Camden
The First National Bank of Houlton, Houlton.
Maine National Bank, Portland
Northern National Bank, Presque Isle
MARYLAND

The Farmers National Bank of Annapolis, Annapolis
The First National Bank of Maryland, Baltimore
Maryland National Bank, Baltimore
State National Bank of Bethesda, Bethesda
The National Bank of Cambridge, Cambridge
The Denton National Bank, Denton
Potomac National Bank, Potomac
American National Bank of Maryland, Silver Spring
Chesapeake National Bank, Towson
MASSACHUSETTS

Northeast National Bank, Amesbury
Commonwealth National Bank, Boston
The First National Bank of Boston, Boston
Plymouth-Home National Bank, Brockton
The County Bank N.A., Cambridge




201

TABLE B-18—Continued
Domestic branches entering the National banking system, by de novo opening, merger, or conversion, by States, calendar 1968
Branches openedfor business
Title and location of bank

Local

Other than
local

MASSACHUSETTS—continued

Middlesex County National Bank, Everett
First Safety Fund National Bank, Fitchburg
The Hudson National Bank, Hudson
Bay State Merchants National Bank of Lawrence, Lawrence
Union National Bank, Lowell
Manufacturers National Bank of Bristol County, North Attleboro. .
South Shore National Bank, Quincy
Third National Bank of Hampden County, Springfield
Hampshire National Bank of South Hadley, South Hadley

Huron Valley National Bank, Ann Arbor
National Bank & Trust Co. of Ann Arbor, Ann Arbor
Security National Bank of Battle Creek, Battle Creek
The Citizens National Bank of Cheboygan, Cheboygan
City National Bank of Detroit, Detroit
Manufacturers National Bank of Detroit, Detroit
National Bank of Detroit, Detroit
First National Bank of East Lansing, East Lansing
The First National Bank of Menominee, Menominee
Union Bank& Trust Co. (National Association), Grand Rapids...
Michigan National Bank, Lansing
Livonia National Bank, Livonia
The Union National Bank & Trust Co. of Marquette, Marquette..
National Lumberman's Bank & Trust Co., Muskegon
National Bank of Royal Oak, Royal Oak
y
, y
S d National Bank of Saginaw, Saginaw
S i
Second N t i l B k f S i
Valley National Bank of Saginaw, Saginaw
The Empire National Bank of Traverse City, Traverse City
Troy National Bank, Troy
First Citizens National Bank, Belmont
Coahoma National Bank, Clarksdale
The National Bank of Commerce of Columbus, Columbus.
The First National Bank of Pontotoc, Pontotoc
First Citizens National Bank, Tupelo
MISSOURI

St. Louis County National Bank, Clayton
NEBRASKA

The Farmers National Bank of Central City, Central City.
West Omaha National Bank, Omaha
NEVADA

Nevada National Bank of Commerce, Reno..
NEW HAMPSHIRE

Mechanicks National Bank of Concord, Concord
The Cheshire National Bank of Keene, Keene
The Merchants National Bank of Manchester, Manchester
White Mountain National Bank of North Conway, North Conway.
NEW JERSEY

Peoples National Bank & Trust Co. of Belleville, Belleville
Mechanics National Bank of Burlington County, Burlington

202




15

Total

TABLE B-18—Continued
Domestic branches entering the National banking system, by de novo opening, merger, or conversion, by States, calendar 1968
Branches openedfor business
Title and location of bank

Local

Other than
local

NEW JERSEY—continued
The National Union Bank of Dover, Dover
Edgewater National Bank, Edgewater
Raritan Valley National Bank, Edison Township
First Bank & Trust Co., National Association, Fords
The Hackensack Trust Co., National Association, Hackensack
Colonial National Bank, Haddonfield
Amboy-Madison National Bank, Madison Township
Keansburg-Middletown National Bank, Middletown
New Jersey National Bank & Trust Co., Neptune
The Sussex and Merchants National Bank of Newton, Newton
The First National Bank of North Bergen, North Bergen
Phillipsburg Trust Co., National Association, Phillipsburg
The Monmouth County National Bank, Red Bank
The City National Bank & Trust Co. of Salem, Salem
The Broad Street National Bank of Trenton, Trenton
The Security National Bank of Trenton, Trenton
The First National Bank of Tuckerton, Tuckerton
The Warren County National Bank, Washington
NEW MEXICO

First National Bank of Dona Ana County, Las Cruces..

National Commercial Bank & Trust Co., Albany
First National Bank of Bay Shore, Bay Shore
First-City National Bank of Binghamton, Binghamton
Liberty National Bank & Trust Co., Buffalo
Lincoln National Bank, Buffalo
The Canandaigua National Bank & Trust Co., Canandaigua
Peninsula National Bank, Cedarhurst
The Chester National Bank, Chester
First National Bank of East Hampton, East Hampton
Ellenville National Bank, Ellenville
Genesee Valley National Bank & Trust Co. of Geneseo, Geneseo
Glens Falls National Bank & Trust Co., Glens Falls
The National Bank of Orange and Ulster Counties, Goshen
Security National Bank, Huntingdon
National Bank of North America, New York
County National Bank, Middletown
Franklin National Bank, Mineola
The Chase Manhattan Bank (National Association), New York
First National City Bank, New York
The State of New York National Bank, Poughkeepsie
First National Bank of Rochester, Rochester
The Mohawk National Bank of Schenectady, Schenectady
Community National Bank &Trust Co. of Richmond, New York
The Union National Bank of Troy, Troy
Valley National Bank of Long Island, Valley Stream
The Citizens National Bank & Trust Co., Wellsville
National Bank of Westchester, White Plains
NORTH CAROLINA

The First National Bank of Asheboro, Asheboro
First Union National Bank of North Carolina, Charlotte
North Carolina National Bank, Charlotte
The Citizens National Bank in Gastonia, Gastonia
First National Bank of Catawba County, Hickory
First National Bank of Eastern North Carolina, Jacksonville.
Southern National Bank of North Carolina, Lumberton
The Planters National Bank &Trust Co., Rocky Mount




203

TABLE B-18—Continued
Domestic branches entering the National banking system, by de novo opening, merger, or conversion, by States, calendar 1968
Branches opened for business
Title and location of bank
Local

First National Bank of Akron, Akron
First National City Bank of Alliance, Alliance
The Northeastern Ohio National Bank, Ashtabula
The Citizens National Bank of Byran, Byran
Society National Bank of Cleveland, Cleveland
The City National Bank & Trust Co. of Columbus, Columbus
The Huntington National Bank of Columbus, Columbus
The First National Bank, Dayton, Dayton
The Third National Bank & Trust Co. of Dayton, Dayton
The Winters National Bank & Trust Co. of Dayton, Dayton
The First National Bank of Fairborn, Fairborn
The First National Bank of Findlay, Findlay
Tri-County National Bank, Fostoria
The First National Bank of Harrison, Harrison
The Citizens National Bank of Ironton, Ironton
The First National Bank of Ironton, Ironton
The Lorain National Bank, Lorain
The First National Bank of Mansfield, Mansfield
The First National Bank in Massillon, Massillon
Clermont National Bank, Milford
The First National Bank in Mount Gilead, Mount Gilead
First National Bank of Orrville-Dalton, Orrville
The Lake County National Bank of Painesville, Painesville
The Miami Citizens National Bank & Trust Co., Piqua
The Farmers National Bank of Salem, Salem
The Third National Bank of Sandusky, Sandusky
First National Bank of Shelby, Shelby
First National Bank of Toledo, Toledo
The First National Bank & Trust Co., Troy
The First National Bank of Washington Court House, Washington Court House..
The Clinton County National Bank & Trust Co. of Wilmington, Wilmington
The Union National Bank of Youngstown, Youngstown
OKLAHOMA

The First National Bank of Chandler, Chandler
The Citizens National Bank of El Reno, El Reno
Central National Bank & Trust Co. of Enid, Enid
The Peoples National Bank of Kingfisher, Kingfisher.
The Fourth National Bank of Tulsa, Tulsa
The National Bank of Commerce of Tulsa, Tulsa

Crater National Bank of Medford, Medford
First National Bank of Oregon, Portland
Great Western National Bank, Portland
United States National Bank of Oregon, Portland.
PENNSYLVANIA

The Merchants National Bank of Allentown, Allentown
The First National Bank of Altoona, Altoona
First National Bank of Somerset County, Berlin
The Cheltenham National Bank, Cheltenham
The First National Bank of Coopersburg, Coopersburg
The Dale National Bank, Dale
The East Stroudsburg National Bank, East Stroudsburg
Marine National Bank, Erie
Community National Bank of Somerset County, Hooversville.
The Conestoga National Bank, Lancaster

204




Other than
local

TABLE B-l 8—Continued
Domestic branches entering the National banking system, by de novo opening, merger, or conversion, by States, calendar 1968
Branches openedfor business
Title and location of bank

Local

Other than
local

PENNSYLVANIA'—continued

Commercial National Bank of Westmoreland County, Latrobe
Peoples Union Bank& Trust Co., National Association, McKeesport. .
First National Bank & Trust Co. of Millersburg, Millersburg
County National Bank of Montrose, Montrose
First National Bank of Lawrence County at New Castle, New Castle. .
Cumberland County National Bank & Trust Co., New Cumberland...
The Philadelphia National Bank, Philadelphia
Mellon National Bank & Trust Co., Pittsburgh
Pittsburgh National Bank, Pittsburgh
The Union National Bank of Pittsburgh, Pittsburgh
Western Pennsylvania National Bank, Pittsburgh
The First National Bank of Pittston, Pittston
Pennsylvania National Bank & Trust Co., Pottsville
First National Bank & Trust Co., Red Lion
Northeastern Pennsylvania National Bank & Trust Co., Scranton
The McDowell National Bank of Sharon, Sharon
The Merchants and Manufacturers National Bank of Sharon, Sharon.
The First National Bank of State College, State College
Gallatin National Bank, Uniontown
First National Bank & Trust Co., Washington
National Bank of Chester County & Trust Co., West Chester
The First National Bank of Wilkes-Barre, Wilkes-Barre
Fidelity National Bank of Pennsylvania, Williamsport
The Drovers & Mechanics National Bank of York, York
National Bank & Trust Co. of Central Pennsylvania, York
RHODE ISLAND

Industrial National Bank of Rhode Island, Providence
SOUTH CAROLINA

The Citizens and Southern National Bank of South Carolina, Charleston.
The South Carolina National Bank of Charleston, Charleston
The Southern National Bank of Orangeburg, Orangeburg
National Bank of Commerce of Spartanburg, Spartanburg
The National Bank of South Carolina of Sumter, Sumter
SOUTH DAKOTA

First National Bank of Aberdeen, Aberdeen
The First National Bank in Sioux Falls, Sioux Falls.
National Bank of South Dakota, Sioux Falls.
United National Bank of Vermillion, Vermillion.
TENNESSEE

The First National Bank of Clarksville, Clarksville
The Blount National Bank of Maryville, Maryville
The First National Bank of McMinnville, McMinnville.
The First National Bank of Memphis, Memphis
National Bank of Commerce in Memphis, Memphis

Zions First National Bank, Salt Lake City
VERMONT

The Howard National Bank & Trust Co., Burlington
The Merchants National Bank of Burlington, Burlington.




205

TABLE B-18—Continued
Domestic branches entering the National banking system, by de novo opening, merger, or conversion, by States, calendar 1968
Branches openedfor business
Title and location of bank
Local

Alexandria National Bank, Alexandria
Mount Vernon National Bank & Trust Co. of Fairfax County, Annandale
The National Bank of Blacksburg, Blacksburg.
National Bank & Trust Co., Charlottesville
The Culpeper National Bank, Culpeper
Fairfield National Bank of Highland Springs, Highland Springs
Chesapeake National Bank, Kalmarnock
The First National Bank of Luray, Luray
The Fidelity National Bank, Lynchburg
The First National Bank of Martinsville and Henry County, Martinsville
First National Bank of Norfolk, Norfolk
Seaboard Citizens National Bank, Norfolk
Virginia National Bank, Norfolk
First National Bank of Purcellville
The Central National Bank of Richmond, Richmond
Richmond National Bank, Richmond
Second National Bank of Richmond, Richmond
The Colonial-American National Bank of Roanoke, Roanoke
Security National Bank of Roanoke, Roanoke
Fairfax County National Bank, Seven Corners
The First National Bank of Troutville, Troutville
Suburban National Bank of Virginia, Vienna
VIRGIN ISLANDS

Virgin Islands National Bank, Charlotte Amalie.
WASHINGTON

Valley National Bank of Auburn, Auburn
The Bellingham National Bank, Bellingham
The National Bank of Commerce of Seattle, Seattle.
The Pacific National Bank of Seattle, Seattle
Peoples National Bank of Washington, Seattle
Seattle-First National Bank, Seattle
First National Bank in Spokane, Spokane
Old National Bank of Washington, Spokane
Puget Sound National Bank, Tacoma
National Bank of Washington, Tacoma
WISCONSIN

First National Bank of Appleton, Appleton
The First National Bank of Bangor, Bangor
The First National Bank & Trust Co. of Beloit, Beloit. .
Brookfield National Bank, Brookfield
The Burlington National Bank, Burlington
The First National Bank of Chippewa Falls, Chippewa Falls
The First National Bank of Eagle River, Eagle River
The American National Bank& Trust Co. of Eau Claire, Eau Claire.
First Wisconsin National Bank of Eau Claire, Eau Claire
The First National Bank of Elkhorn, Elkhorn
First Wisconsin National Bank of Fond Du Lac, Fond Du Lac
American National Bank of Green Bay, Green Bay
Kellogg-Citizens National Bank of Green Bay, Green Bay
The Rock County National Bank of Janesville, Janesville
The First National Bank of Kenosha, Kenosha
First Wisconsin National Bank of Milwaukee, Milwaukee
Marine National Exchange Bank of Milwaukee, Milwaukee
Southgate National Bank of Milwaukee, Milwaukee
The First National Bank of Port Washington, Port Washington
Shawano National Bank, Shawano
First National Bank of Waukesha, Waukesha
Mayfair National Bank of Wauwatosa, Wauwatosa




Other than
local

TABLE B-19

Domestic branches of National banks closed, by States, calendar 1968
Branches closed
Charter
No.

Title and location of bank
Local

Total

Other than
local

Total

54

83

4
1

4
1

4
1

29

4
2
2
2

4
1
1
5
8
2
2

3

5

ARIZONA

12198
3728

The First Navajo National Bank, Holbrook.
First National Bank of Arizona Phoenix

15450
2491
15388
13044
9655
1741
15660

National "R?vnV of Agriculture DHano
Security Pacific National Bank, Los Angeles
Silverlake National Bank, Los Angeles....
Bank of America National Trust & Savings Association, San Francisco
The Bank of California, National Association, San Francisco
Crocker-Citizens National Bank San Francisco
Wells Fargo Bank, National Association San Francisco

CALIFORNIA

1
1
6

CONNECTICUT

1193

Litchfield County National Bank New Milford

13991
5778

First National Bank in Fairfield, Fairfield
The First National Bank of Oelwein Oelwein

11510
79

The Everett National Bank Everett
Worcester County National Bank Worcester

15286

First National Bank of Wyoming, Wyoming

2

IOWA

1
1

1
1

1

1
1

MASSACHUSETTS

MICHIGAN

1

1

2

7
2

2
7
1
2

1
1

1
1

MISSISSIPPI

11898

The Commercial National Bank & Trust Co. of Laurel, Laurel

1

NEW YORK

15080
12746
222
10855

Liberty National Bank & Trust Co Buffalo
Northern Westchester National Bank, Chappaqua
First National Bank & Tttust Co of Ithaca Ithaca
The Kerhonkson National Bank, Kerhonkson

2
1

NORTH CAROLINA

13761
10608

North Carolina National Bank, Charlotte
The Planters National Bank & Trust Co. Rocky Mount

13905

The Central National Bank of Cambridge Cambridge

2900
12582
5501
2581
6301
8223

The Farmers National Bank & Trust Co. of Boyertown, Boyertown
The Chalfont National Bank, Chalfont
The Grove City National Bank Grove City
The Peoples National Bank & Trust Co. of Norristown, Norristown
Mellon National Bank & Trust Co. Pittsburgh
The National Bank of Topton, Topton

OHIO

1

1

PENNSYLVANIA




1

1

1

8

i

1

1
9
1
2

1
1

207

TABLE B-l 9—Continued
Domestic branches of National banks closed, by States, calendar 1968
Branches closed
Charter
No.

Title and location of bank
Local

SOUTH CAROLINA

15560
14967

County National Bank, Blackville
The First National Bank of Lancaster, Lancaster.
UTAH

4670

The First National Bank of Logan, Logan
VIRGINIA

15254
15002
11694
13880
15139
9885

Fidelity National Bank, Arlington
Peoples National Bank of Gloucester, Gloucester.
Valley National Bank, Harrisonburg
Russell County National Bank, Honaker
The First National Bank, Narrows
Virginia National Bank, Norfolk

14906

Mayfair National Bank of Wauwatosa, Wauwatosa

WISCONSIN

208




Other than
local

Total

TABLE B-20

Principal assets, liabilities, and capital accounts of National banks, by deposit size, year end 1967 and 1968
[Dollar amounts in millions]
Deposits

Securities
Number
of banks

Total
assets

Cash and
cash
items

Loans and
discounts
Total

U.S. Government
obligations

Fixed
assets
Total

Demand

Time and
savings

Capital
stock

Surplus,
Capital
undivided
notes and profits,
debenand
reserves
tures

1968
Total
Banks with deposits o—
f
Less than $1.0. . . . . .
1.0 to 1.9
2.0 to 4.9
5.0 to 9.9
10.0 to 24.9
25.0 to 49.9
50.0 to 99.9
100.0 to 499.9
Over 500.0

4, 716

$296, 594 $50, 953

$154,862 $76,871

$35, 300

$4, 363

$257, 884

$134,629

$123,255

$5, 752

$1, 256

$14,516

23
160
841
1,219
1,348
543
266
244
72

21
295
3,376
9,931
23,271
20, 680
20, 180
57, 870
160, 970

5
51
506
1, 364
3, 111
2,806
2, 894
10, 572
29, 645

9
125
1,560
4,681
11,300
10, 237
10, 160
29, 368
87,421

7
111
1,211
3,523
7,935
6, 756
6, 338
15,671
35,319

5
87
791
2,011
4, 108
3,221
2,966
7,322
14, 787

0
4
50
160
393
360
333
935
2, 128

19
256
3,018
8,976
21, 063
18, 686
18, 208
51,621
136,036

15
154
1,578
4,376
9,942
8,922
8,748
28, 353
72, 542

4
102
1,441
4,601
11, 121
9,764
9,460
23, 268
63, 495

1
9
81
210
473
413
416
1, 175
2,975

0
0
0
2
15
33
40
149
1,018

2
26
240
588
1,250
1,018
963
2,786
7,642

4, 758

263, 375

46, 634

136, 753

69, 656

34, 308

3,876

231, 374

123,038

108, 336

5,367

1,235

13, 128

32
195
1,000
1, 279
1, 254
472
230
226
70

29
350
3,964
10, 323
21, 789
18, 007
17,315
51, 542
140, 055

7
60
593
1,422
2,906
2,431
2,486
9, 339
27, 389

11
153
1,874
4,923
10, 695
8,895
8,635
26, 317
75, 250

11
130
1,400
3,687
7,517
6,001
5,594
14, 143
31, 173

9
99
929
2, 139
4,032
3,056
2,888
6,952
14, 204

0
4
64
177
381
309
288
838
1,816

26
304
3,528
9,315
19, 697
16, 254
15,647
46, 118
120, 485

21
183
1,883
4,622
9,455
7,934
7,761
25, 874
65, 305

5
121
1,645
4,693
10, 241
8,320
7,886
20, 244
55, 181

1
12
105
236
458
372
372
1, 104
2,707

0
0
0
1
16
28
29
147
1,014

3
31
286
620
1, 198
906
812
2,496

1967
Total
Banks with deposits o—
f
Less than $ 1.0
1.0 to 1.9
2.0 to 4.9
5.0 to 9.9
10.0 to 24.9
25.0 to 49.9
50.0 to 99.9
100.0 to 499.9
Over 500.0

NOTE: Data may not add to totals because of rounding.




6,777

TABLE B-21
Dates of reports of condition of National banks, 1914—68
[For dates of previous calls, see Annual Report for 1920, vol. 2, table No. 42, p. 150]
Feb.

13

28'
21

Mar.

Apr.

4
4
7
5
4
4

May

June

1
10
12
4

28
5

10
3
31
6
12
23
28
27
27
25

13
20
12
11
24

9

30
30

12

210




23
10
15
30
30
29

15

30

26
5
25
18

30
30
30
29

26
18

•

•

•

31

Nov.

10
17
20
1
17
15

—

12
8
6
15
14
10
28
10
3
4
24
29
30
25
17

1
28
2"

31
31
27
31
31
31
29
31
29
31
31
31
31
31
31
31
31
31
31
30
31

31

24
18
30
6
1
4
10
5
30

31
31
31
30
31
31

7
5
26

Dec.

11

24
6
3
27
28
30
1
13
4
30

co coco co tr

CO CO CO CO

20
15
11
10

4
12
15

. .

12
2
12
11
•

Oct.

CO CO CO CO C*

4
4

i
i

Sept.

CO CO CO CO CO C"

5
4
4
31
7
29
26

....31.

Aug.

July

30
23
30
20
29
30
30
30
30
30
30
30
30
30
30
29
30
30
30
30
30
29
30
30
30
30
29
30
CO CO CO CO C^ CO CO CO C"

1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
1926
1927
1928
1929
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968

Jan.

31
31
31
30
28
20
31
00 00 0000

Year

NOTES

Act of Feb. 25, 1863, provided for reports of condition on
the 1st of each quarter before commencement of business.
Act of June 3, 1864—1st Monday of January, April, July,
and October, before commencement of business, on form prescribed by Comptroller (in addition to reports on 1st Tuesday of each month showing condition at commencement of
business in respect to certain items; i.e., loans, specie, deposits,
and circulation).
Act of Mar. 3, 1869, not less than 5 reports per year, on
form prescribed by Comptroller, at close of business on any
past date by him specified.
Act of Dec. 28, 1922, minimum number of calls reduced
from 5 to 3 per year.
Act of Feb. 25, 1927, authorized a vice president or an
assistant cashier designated by the board of directors to verify
reports of condition in absence of president and cashier.
Act of June 16, 1933, requires each National bank to
furnish and publish not less than 3 reports each year of
affiliates other than member banks, as of dates identical with
those for which the Comptroller shall during such year
require reports of condition of the bank. The report of each
affiliate shall contain such information as in the judgment of
the Comptroller shall be necessary to disclose fully the relations between the affiliate and the bank and to enable the
Comptroller to inform himself as to the effect of such relations upon the affairs of the bank.
Sec. 21 (a) of the Banking Act of 1933 provided, in part,
that after June 16, 1934, it would be unlawful for any private
bank not under State supervision to continue the transaction




of business unless it submitted to periodic examination by
the Comptroller of the Currency or the Federal Reserve bank
of the district, and made and published periodic reports of
condition the same as required of National banks under
sec. 5211, U.S.R.S. Sec. 21 (a) of the Banking Act of 1933,
however, was amended by sec. 303 of the Banking Act of
1935, approved Aug. 23, 1935, under the provisions of which
private banks are no longer required to submit to examination by the Comptroller or Federal Reserve bank, nor are they
required to make to the Comptroller and to publish periodic
reports of condition. (Five calls for reports of condition of
private banks were made by the Comptroller, the first one
for June 30,1934, and the last one for June 29, 1935.)
Sec. 7(a) (3) of the Federal Deposit Insurance Act (Title
12, U.S.C., sec. 1817 (a)) of July 14, 1960, provides, in part
that, effective Jan. 1, 1961, each insured National bank shall
make to the Comptroller of the Currency 4 reports of condition annually upon dates to be selected by the Comptroller,
the Chairman of the Board of Governors of the Federal Reserve System, and the Chairman of the Board of Directors of
the Federal Deposit Insurance Corporation, or a majority
thereof. Two dates shall be selected within the semiannual
period of January to June, inclusive, and 2 within the semiannual period of July to December, inclusive. Sec. 161 of
Title 12 also provides that the Comptroller of the Currency
may call for additional reports of condition, in such form and
containing such information as he may prescribe, on dates to
be fixed by him, and may call for special reports from any particular association whenever in his judgment the same are
necessary for use in the performance of his supervisory duties.

211

TABLE B-22
Total and principal assets of National banks, by States, June 29, 1968
[Dollar amount in millions]

Number
of banks

Total
assets

Cash
assets*

U.S.
Govern^
ment
obligations,
net

State
Other
and local securities,
net
securities,
net

Loans
and
discounts,
net

Federal
funds
sold}

v

Direct
lease
jlTl&TlClTlff

4,742

$265,497

$44, 787

$31, 627

$30, 630

$6, 285

$140,690

$3,113

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

88
5
4
67
77
118
30
5
9
202

2,933
324
2, 106
1,330
32, 700
2 754
2,408
30
1,892
7,205

495
46
222
230
4,816
466
380
4
335
1,291

452
53
170
176
2867
332
175
9
451
1,126

381
39
207
175
3,773
268
336

77
11
35
34
931
39
52

126
880

43
408

1,446
156
1,312
673
18, 538
1,542
1,370
14
868
3, 153

15
5
75
4
397
19
14
1
26
117

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

62
2
9
421
123
102
171
80
48
21

3,589
531
819
22, 945
5,941
1,939
2,304
1,838
3,309
553

627
85
96
3,376
1,125
376
357
318
642
66

328
57
90
3,342
1,002
306
410
306
587
60

345
81
110
2,554
580
197
296
218
390
93

66
15
12
740
178
65
96
42
59
5

2,030
266
484
11,938
2,812
936
1,073
896
1,525
308

28
5
4
240
123
20
26
22
34
7

48
88
98
195
36
98
48
127
4
53

2,392
7,409
10, 640
5,512
1,275
4,757
747
2,050
668
614

438
1,403
1,410
929
224
946
88
361
86
83

312
529
1,427
682
172
610
122
258
93
91

260
918
1, 117
658
149
542
90
204
82
60

51
89
264
165
30
75
16
109
8
3

1,248
4,017
6,066
2,926
655
2,389
401
1,055
370
344

34
207
107
29
7
85
8
17
2
21

3
5
12
7

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

145
34
181
23
42
220
220
12
331
4

8,437
811
43, 618
2 581
668
11 683
3,884
3,217
17, 324
949

1,017
126
9,973
424
74
1,650
692
449
2,324
85

1,080
125
3,599
213
118
1,733
621
367
2,212
78

1,411
89
4,039
341
80
1,661
478
360
2, 463
148

223
21
567
66
19
291
127
53
334
6

4,429
416
23, 147
1,466
356
6,018
1,811
1,860
9,357
604

97
9
525
4
3
101
68
1
196
5

2
1
80
1
0
15
5
5
18
0

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

26
34
77
539
12
27
111
27
80
117
40
1

1,201
742
4,432
16, 890
833
389
4, 287
4,498
1,255
3, 737
493
55

215
93
788
3,298
132
35
570
686
173
589
66
5

162
136
599
2,005
67
47
537
418
301
514
91
9

114
73
458
1,929
117
45
508
536
145
447
48
10

20
17
57
457
16
9
104
42
36
88
8

643
400
2,354
8,465
470
240
2,398
2,621
550
1,980
262
29

13
3
52
203
5
6
65
22
18
19
2
0

0

14

2,910

517

626

219

54

1,400

35

0

United States

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

. .

District of Columbia—allj. . .

$460
0
1
179
4
1
0
0
1
11
2
64
7
1
1
1

16

3
3
1
4
1
5
0

*Cash, balances with other banks, and cash items in process of collection,
f Includes securities purchased under agreements to resell,
jlncludes National and non-National banks in the District of Columbia, all of which are supervised by the Comptroller of the
Currency.
NOTE: Data may not add to totals because of rounding. Dashes indicate amounts less than $500,000.

212




TABLE B-23

Total and principal liabilities of National banks, by States, June 29, 1968
[Dollar amounts in millions]
Total
liabilities

Total
deposits

Demand
deposits,

Time and
savings deposits, total

Demand
deposits.
IPC*

Time
deposits.
IPC

United States

$244, 994

$229, 028

$117,296

$111,732

$87, 595

$98, 695

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

2,691
303
1,963
1,215
30, 647
2,543
2,225
28
1,756
6,676

2,612
300
1,898
1, 173
28, 686
2,459
2, 122
27
1,711
6,441

1,437
148
784
698
11,465
1,265
1, 185
12
1,040
3,522

1, 175
152
1, 114
475
17,221
1, 194
937
15
671
2,939

1,091
115
650
531
9,603
999
1,053
12
900
2,630

1,093
92
1,030
444
14, 439
1,059
858
15
654
2,650

Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine

3,282
479
763
21, 143
5,521
1,795
2,092
1,686
3,017
503

3, 108
472
744
19, 087
5,218
1,757
2,061
1,656
2,945
474

1,840
236
345
9,673
2,798
978
1, 179
953
1,791
245

1,268
236
399
9,414
2,420
779
882
703
1, 154
229

1,359
162
265
7,442
1,892
675
786
775
1,287
215

1, 138
185
399
8,388
2,292
727
777
664
968
219

Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire

2,206
6,790
9,990
5, 119
1, 169
4,334
695
1,880
615
557

2, 101
5,992
9,620
4,743
1,098
4,090
662
1,828
600
526

1,249
3,893
3,734
2,336
693
2,493
297
1,074
287
318

852
2,099
5,886
2,407
405
1,597
365
754
313
208

944
2,990
3,045
1,638
447
1,756
233
763
219
265

809
1,836
5, 144
2,253
387
1,478
340
739
288
198

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

7,825
747
40, 030
2,401
622
10, 769
3,531
3,007
15, 748
877

7,566
725
35, 027
2,233
609
10, 381
3,437
2,875
14, 941
836

3,492
407
20, 705
1, 199
250
4,810
1,977
1, 180
6, 729
309

4,074
318
14, 322
1,034
359
5,571
1,460
1,695
8,212
527

2,864
316
12, 824
952
203
3,754
1,421
1,011
5,456
239

3,906
277
11,794
881
340
5, 192
1,309
1,428
7,473
494

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

1, 104
689
4,072
15, 501
770
359
3,958
4, 186
1, 137
3,477
451
51

1,051
673
3,833
14, 772
732
347
3,834
3,998
1, 100
3,340
435
50

787
304
2, 105
8,625
309
124
1, 733
1,971
571
1,524
200
15

264
369
1,728
6, 147
423
223
2, 101
2,027
529
1,816
235
35

653
231
1,420
6,358
233
108
1,409
1,618
429
1, 197
145
12

246
335
1,458
5, 127
353
219
1,961
1,992
522
1,593
215
18

2,692

2,602

1,565

1,037

1,369

1,006

District of Columbia—all J

*IPC deposits are those of individuals, partnerships, and corporations.
•(•Includes securities sold under agreements to repurchase.
jlncludes National and non-National banks in the District of Columbia, all of which are supervised by the Comptroller of the
Currency.
NOTE : Data may not add to totals because of rounding. Dashes indicate amounts less than $500,000.




213

TABLE

B-24

Capital accounts of National banks, by States, June 29, 1968
[Dollar amounts in millions]
Total capital
accounts

Debentures

United States

$20, 503

$1, 390

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

242
21
143
115
2,053
211
183
2
136
529

0

Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine

307
52
56
1,802
420
144
212
152
292
50

Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire

.-.

612
64
3,588
180
46
914
353
210

South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
Virgin Islands
District of Columbia—all*

218

Undivided
profits

60
12
0
13
12
1
4
0

28
1
718
15
1
27
21
0
62

13

$59

$5, 505

$9, 000

$3, 840

75
6
35
33
519
64
48
1
36
193

100
7
58
46
943
94
92
1
70
213

56
7
23
28
422
48
31

66
9
19
587
99
38
60
32
66
19

107
18
30
807
190
63
91
76
162
18

45
11
7
251
112
39
54
40
52
12

81
321
317
154
67
164
20
63
19
30

49
102
95
92
5
113
11
56
10
14

169
20
825
44
15
261
94
79
309
18

290
20
,317
89
18
445
135
84
813
32

112
11
483
30
11
175
100
42
326
22

24
17
97
453
19
9
100
104
26

1
25

97
53
360
1,389
63
30
329
312
118
260
42
4

1,576
72

Common
stock

47
153
169
124
27
110
20
44
21
12

26
5
140
4
11

186
619
650
393
106
423
52
170
53
57

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

Preferred
stock

51
22
163
574
33
10
156
129
60
114
20
2

21
14
75
266
11

49

105

49

28
82

8
70
74
27
52
14
2

•Includes National and non-National banks in the District of Columbia, all of which are supervised by the Comptroller of the
Currency.
NOTE : Data may not add to totals because of rounding. Dashes indicate amounts less than $500,000.

214




TABLE B-25

Total and principal assets of National banks, by States, Dec. 31, 1968
[Dollar amounts in millions]

Number
of banks

Total
assets

Cash
assets*

US. Government
obligations,
net

State
Other
and local securities,
securities,
net
net

Loans
and
discounts,
net

Federal
funds
sold]

United States

4,716

$296, 594

$50, 953

$35, 300

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

89
5
3
68
72
118
29
5
10
204

3,218
332
2,356
1,489
41, 198
3, 137
2,635
31
2,003
8,382

558
38
267
290
5,989
613
438
4
339
1,684

471
49
213
199
4,041
389
197
10
440
1, 189

422
56
235
182
4,704
288
376
1
158
1,067

108
12
36
47
913
53
48
1
48
440

1,550
162
1,430
709
23, 340
1,658
1,475
14
911
3,586

36
1
103
20
547
32
17

Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine

62
2
9
420
123
102
171
80
48
21

4,035
569
896
24, 980
6,588
2,094
2,530
2,059
3,617
621

805
81
111
3,679
1,353
444
428
357
772
106

346
61
117
3,497
1,022
334
433
355
586
67

358
105
122
2,828
619
203
323
243
422
83

68
10
12
797
172
73
116
35
57
7

2,256
287
503
12, 888
3,061
984
1, 148
973
1,635
332

21
0
8
421
232
14
28
56
67
10

Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire

48
87
98
196
40
98
48
127
4
52

2,581
8,092
11, 538
6,375
1,426
5,494
829
2,290
733
674

510
1,412
1,542
1,280
253
1, 178
112
451
105
111

325
679
1,615
763
202
741
143
298
110
96

283
1, 196
1, 172
697
159
588
107
240
89
55

50
104
266
211
28
146
19
103
22
6

1,300
4,244
6,588
3,248
726
2,609
415
1, 139
378
376

57
179
101
59
17
107
11
13

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

143
33
176
22
42
218
220
11
327
4
24
34
77
535
12
27
107
27
80
117
40
1

9,202
885
46, 100
2,937
729
12, 761
4,309
3,654
18, 737
1,049

1,212
140
9,434
555
91
1,835
873
497
2,599
118

1,223
141
3,876
242
138
1,877
639
430
2,269
86

1,487
92
4,671
390
92
1,789
512
483
2,762
165

254
21
623
77
24
299
134
63
387
5

4,663
440
24, 807
1,589
366
6,451
1,945
2,043
9,947
651

170
25
512
10
1
260
115
3
304
2

1,354
805
4,877
19, 395
919
439
4,685
4,942
1,314
4,075
557
67

280
103
1,018
4,254
163
49
668
789
181
689
91
7

170
156
642
2,232
74
48
565
513
301
571
109
10

128
94
495
2, 191
109
40
570
578
157
454
53
14

34
21
81
502
17
9
119
48
36
98
11

686
410
2,461
9,326
509
265
2,604
2, 777
574
2, 125
269
33

40
349
19
20
47
23
29
26
9
1

3,009

508

604

262

56

1,451

South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Virgin Islands
District of Columbia—all J. . .

14

$34, 704 $6, 867 $154, 862 $4, 397

57
178

19

*Cash, balances with other banks, and cash items in process of collection,
flncludes securities purchased under agreements to resell.
^Includes National and non-National banks in the District of Columbia, all of which are supervised by the Comptroller of
the Currency.
NOTE : Data may not add to totals because of rounding. Dashes indicate amounts of less than $500,000.




215

TABLE B-26
Total and principal liabilities of National banks, by States, Dec. 31, 1968
[Dollar amounts in millions]
Total
liabilities

Total
deposits

Demand
deposits,
total

$257, 884

$134,629

Time and
savings deposits, total

Demand
deposits
IPC*

Time
deposits,
IPC

$123, 255

$101, 765

$107, 716

United States

$275, 070

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

2,969
310
2,212
1,369
38, 708
2,919
2,451
28
1,855
7,822

2,891
303
2,071
1,335
36,211
2,823
2,353
28
1,811
7,546

1,636
151
915
834
14, 605
1,530
1,311
13
1,104
4, 173

1,255
152
1, 156
501
21, 606
1,293
1,042
15
707
3,373

1,232
125
744
638
12, 192
1, 190
1, 154
13
945
3,013

1,160
98
1,085
470
17, 752
1, 159
913
15
687
2,972

Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine

3,720
516
838
23, 120
6,147
1,943
2,306
1,901
3,318
569

3,541
509
819
20, 982
5,793
1,916
2,278
1,866
3,222
545

2, 100
245
400
10, 803
3, 184
1, 109
1,339
1, 110
2,002
288

1,441
264
419
10, 179
2,609
807
939
756
1,220
256

1,535
196
307
8,380
2, 143
786
886
910
1,436
239

1,313
204
419
9,078
2,488
771
825
709
1,033
250

Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire

2,385
7,457
10, 816
5,971
1,316
5,059
774
2,113
679
614

2,280
6,739
10, 461
5,696
1,248
4,742
740
2,058
659
583

1,371
4,493
4,298
3,035
792
3,071
343
1,242
319
358

909
2,246
6, 163
2,661
456
1,671
397
816
340
225

1,087
3,402
3,404
1,997
533
2,026
271
889
251
288

852
1,933
5,400
2,445
429
1,551
370
796
315
213

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

8,565
819
42,476
2,748
682
11,811
3,945
3,439
17, 117
974

8,289
798
37, 496
2,599
665
11,368
3,853
3,313
16, 335
901

4,066
454
21, 957
1,419
285
5,381
2,263
1,332
7,598
343

4,223
344
15,539
1, 180
380
5,987
1,590
1,981
8,737
558

3,361
353
14, 876
1,134
244
4,290
1, 658
1, 117
6,237
283

4,044
299
12, 589
969
364
5,474
1,403
1,502
7,867
513

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

1,255
750
4,503
17,980
855
406
4,348
4,615
1, 193
3,806
513
61

1, 186
732
4,136
16, 963
821
396
4,201
4,396
1, 154
3,674
498
60

885
334
2,446
10, 315
375
152
1,966
2,210
595
1,813
245
20

301
398
1,690
6,648
446
244
2,235
2, 186
559
1,861
253
40

726
272
1,655
7,454
275
127
1,608
1,828
459
1,402
180
15

282
366
1,490
5,530
379
232
2,086
2, 137
550
1,687
229
19

2,779

2,704

1, 628

1,076

1,419

1,039

District of Columbia—allj

*IPC deposits are those of individuals, partnerships, and corporations.
•(•Includes securities sold under agreements to repurchase.
{Includes National and non-National banks in the District of Columbia, all of which are supervised by the Comptroller of th<
Currency.
NOTE: Data may not add to totals because of rounding. Dashes indicate amounts less than $500,000:

216




TABLE B-27
Capital accounts of National banks, by States, Dec. 31, 1968

[Dollar amounts in millions]
Toted capital

Debentures

profits

$4,051

104
8
58
48
1,125
96
98
1
78
228

59
7
26
30
467
52
27
1
29
92

66
9
19
592
103
39
61
32
67
19

108
19
31
836
200
65
93
83
163
19

49
11
8
264
117
42
59
39
57
13

3
12
99
19
6
26
1
3
0

50
154
171
125
28
110
20
45
21
12

87
333
321
156
74
171
21
64
20
32

49
105
111
98
1
118
13
60
13
14

28
1
444
15
1
27
21
0
62

173
20
829
46
15
264
96
80
315
18

301
20
1,601
93
18
463
137
83
884
32

119
12
514
32
12
191
107
52
296
25

24
17
99
455
19
9
103
107
26
83
6

51
23
171
584
34
12
160
133
62
120
21
4

23
15
78
273
11
9
70
82
28
55
15
2

50

112

52

0

Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine

315
53
58
1,859
441
151
224
158
299
52

60
12
0
20
12

196
635
722
404
110
435
55
177
54
60

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

637
66
3,624
189
47
950
364
215
1,620
75

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

99
55
374
1,415
64
33
337
327
121
269
44
6
230

Undivided

$9, 747

$1, 256

249
22
144
120
2,490
218
184
3
148
560

District of Columbia—all*

Surplus

76
6
34
33
649
64
49
1
37
197

$21, 524

26
5
214
4
10
0
1
27

7
0
8
0

13

$58

Common
stock
$5, 694

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

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

Preferred
stock

•Includes National and non-National banks in the District of Columbia, all of which are supervised by the Comptroller of the
Currency.
NOTE : Data may not add to totals because of rounding. Dashes indicate amounts less than $500,000.




217

TABLE B-28
Loans and discounts of National banks, by States, Dec. 31, 1968

[Dollar amounts in millions]
Loans
and
discounts,
net

Reserves

United States

$154, 862

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

1 550
162
1,430
709
23, 340
1,658
1,475
14
911
3 586

35
6
20
13
398
27
27

Georgia.
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan.
Minnesota
Mississippi
Jvlissouri
Montana
Nebraska.
Nevada
New Hampshire

Loans
Loans
secured to finanby real cial instiestate
tutions

.

. .

District of Columbia—all*...

Commer- Personal
cial and loans to
individual individloans
uals

Other
loans

$4, 870 $61, 937 $34, 321

$4,415

578
36
346
222
4,342
475
432
4
204
1, 149

8!

56

510
55
458
219
9,399
509
425
2
253
1,268

28
5
13
788
49
18
18
19
59
3

19
4
91
336
76
202
267
60
21
9

875
78
99
6,223
782
225
368
254
698
103

768
55
144
2,048
897
232
280
329
421
97

85
278
469
268
18
239
3
37
7
5

36
44
156
79
16
90
2
35
5
2

18
5
49
164
36
105
85
386
10
5

384
2,337
1,757
1, 128
270
1,049
98
299
108
120

381
901
1,385
697
235
615
118
239
116
148

1,907
79
3,955
228
126
1,929
388
520
2,854
305

168
13
2, 165
57
2
305
91
114
532
28

144
7
1,546
28
2
129
48
21
158

12
46
81
23
69
82
178
103
126

1, 175
156
13, 708
772
91
1,814
727
871
3,763
170

1,236
139
3, 116
488
80
2,089
474
405
2,305
122

700
422
2,508
9,499
517
269
2,649
2,829
587
2 171
274
33

101
107
374
1,072
181
125
802
680
206
745
65
17

29
5
185
674
21
1
92
167
14
95
2
0

14
1
64
590
11
3
32
20
5
29
3
0

13
132
44
446
22
9
53
153
7
53
51
0

246
89
884
4,231
170
54
674
1,110
126
659
85
11

276
85
911
2,170
102
73
907
649
222
502
66
5

1,474

471

170

34

—

376

371

$5, 008

82
71
23
1,142
105
33
0
108
168

31
4
2
14
418
35
37
0
16
127

421
133
155
2,278
1,041
264
172
262
291
118

143
2
5
1,256
205
36
49
47
127
4

1,323
4,339
6,711
3,303
742
2,654
424
1, 162
382
383

398
621
2,701
863
142
506
116
148
134
96

102
10
656
32
8
124
35
29
195
8

4,765
450
25, 463
1,621
374
6,575
1 980
2,072
10*142
659

686
410
2,461
9,326
509
265
2,604
2,777
574
2 125
269
33

14
12
47
173
8
4
45
52
13
46
5

1,451

23

17
60

1,585
168
1,450
722
23, 738
1,685
1,502
14
928
3,646

261
72
397
182
7,234
331
503
8
312
782

43
4
9
329
60
19
18
17
30
7

2,299
291
512
13,217
3 121
1,003
1, 166
990
1,665
339

1,300
4,244
6,588
3,248
726
2,609
415
1, 139
378
376

23
95
123
55
16
45
9
23
4
7

4,663
440
24, 807
1,589
366
6,451
1 945
2,043
9,947
651

. . .

Loans
Loans
to purto
chase
farmers
or carry
securities

$9,771

$3, 160 $158, 022 $37, 703

2,256
287
503
12, 888
3,061
984
1, 148
973
1,635
332

New Tersey
.New M.exico
.
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island.
South Carolina
South Dakota
Tennessee
Texas. .
Utah
Vermont
Virginia
Washington
West Virginia
AVisconsin
Wyoming.
Virgin Islands

Loans
and
discounts,
gross

38
169
53
687
213
3

*
c
516
6C
3C
96
14
28*
71
26
H
4*
21
194
21
5(

u
122
1C
89S
2f
4
74
404
34
21
c
46
316
1C
4
8?
5(
8?
-

•Includes National and non-National banks in the District of Columbia, all of which are supervised by the Comptroller of the
Currency.
NOTE: Data may not add to totals because of rounding: Dashes indicate amounts of less than $500,000.

218




TABLE B-29
Income and expenses of National banks* by States, year ended Dec. 31, 1968
[Dollar amounts in thousands]
United
States

Number of banks

4,716

Current operating revenue:
Interest and dividends on—
$1, 622, 859
U.S. Government obligations
Other securities
1, 415, 134
Interest and discount on loans f
9, 990, 384
Service charges and other fees on banks'
234, 048
loans
629, 950
Service charges on deposit accounts. . .
Other service charges, commissions,
fees, and collection and exchange
269, 888
charges
493, 308
Trust department
Other current operating revenue
342, 276
Total current operating revenue

14, 997, 847

Current operating expenses:
Salaries and wages:%
1, 022, 508
Officers
1,911,230
Employees other than officers
82, 597
Number of officers
Number of employees other than officers. 397, 270
Officer and employee benefits—pensions, hospitalization, social security,
insurance, etc
449, 982
Fees paid to directors and members of
executive, discount and other committees
47, 162
Interest on time and savings deposits.. 5, 304, 329
Interest and discount on borrowed
308, 576
money §
Net occupancy expense of bank prem553, 259
ises
Furniture and equipment—depreciation, rents, servicing, uncapitalized
374,319
costs, etc
1, 537, 597
Other current operating expenses
Total current operating expenses
Net current operating earnings

See footnotes at end of table.


11, 508, 962
3, 488, 885

Alabatna

Alaska

Arizona

89

Arkan-

68

California

72

Colorado

118

Connec- Delaware

District
of Co- Florida Georgia Hawaii
lumbia

29

10

204

62

r
$22,311 $2, 676 $9, 495 $8, 901 $178, 589 $17, 739 $8,518
$468 $21, 501$58, 290 $17,
,626
16, 085 2, 167 9,606 7,735 215,036 12,032 15, 195
~"~ 036
27 6, 335 50, 870 15, 778
107, 715 13,010 97, 934 47, 940 1 543, 419 111,691 97, 152 1,022 59, 599 233,
i,
""
1,259 152, 470

2,040
9,968

958
1,811

2,703
8,318

310
4, 179

2,448
4, 179
1,909

1,316
146
299

3, 181
3, 166
1,626

1,279
1,030
796

51,229 3, 172
132, 109 10, 671
36, 165
65,007
70, 345

3,261
9,701
5,937

1,659
7,760

43
70

$2, 710
3, 651
19, 853
1,637
1,290

1,005
6,809 13, 180
4,254 13, 783 7,726
4,615

2,819
9,096
1,953

2, 135 8,686 5,086
5,004 21, 365 14, 723

539
1,005
1,024

4, 110 12, 501

166, 655 22, 383 136, 029 72, 170 2, 291, 899 174, 204 144, 152 1, 666 103, 943 405, 563 231, 204 31, 709

13,681
2,389 10, 372 7,279
23, 267 3,863 21, 119 9, 198
1, 132
143
908
659
5,620
673 4,491 2,338
5,530
783
49, 084

666

4,509

2,062

37
111
574
6, 183 49, 024 19, 336

164, 076 14, 782 12, 177
306, 625 23, 659 23, 458
14, 109 1, 198
907
60, 263 5,056 4,777
67, 906

4,504

6,011

1,279
608
962
941, 932 54, 255 40, 767

153
7,569 30, 596 17,517
266 13, 003 52, 308 34, 697
20
511 2, 572 1,368
101 2,488 12, 352 7, 199
41

10, 972

1,682

18
425
2,012
843
529 29, 103129,919 59, 748

104
10,513

503

35

1,954

960

45, 013

2, 123

1,224

1

5,891

947

5,582

3,370

97, 889

7,329

7,410

81

927 3,501
2,349 14, 698

2,638
9,369

5,251
18, 655

47, 767 6, 197 4,714
187, 755 21, 184 16,916

122, 645 17,396 110,870 54, 786 1, 860, 242
134,995 113,285
44,010

4, 987 25, 159 17, 384

431,657 39, 209 30, 867

2,276 11,431

2,557
4,710
188
1, 045

1,036

5,004

49

4, 108 12, 786 11, 985

1,424

65 2,583 14, 116 7,258
198 12, 936 49, 216 30, 862

1,316
3,721

1,352

5,981

73,039 308,365 178,886

26, 076

314 30, 904 97, 198 52, 318

5, 633

TABLE B-29—Continued
Income and expenses of National banks* by States, year ended Dec. 31,

1968

United
States

Recoveries, transfers from valuation reserves, and profits:
On securities:
Profits and securities sold or redeemed
Recoveries
Transfers from valuation reserves. .
On loans:
Recoveries
Transfers from valuation reserves. .
All other . .
Total recoveries, transfers from
reserves and profits
.

valuation
.
...

Losses, chargeofis, and transfers to valuation reserves:
On securities:
Losses on securities sold ..-.••
Chargeoffs on securities not sold. . .
Transfers to valuation reserves
On loans:
Losses and chargeoffs
Transfers to valuation reserves
All other
Total lossest chargeoffs, and transfers to




Alabama

$48, 378
3,928
22, 179

$1, 230
1
358

$9
0
0

$122
0
0

$505
0
0

$2, 271
18
37

$614
79
150

$209
0
202

$4
0
0

5,962
29, 121
69, 119

111
57
465

0
0
132

0
0
1,708

78
25
163

653
313
7,744

226
1
517

2
375
455

7
0
4

14
0
539

178,687

2,222

141

1,830

771

11, 036

1,587

1,243

15

308, 885
6,886
33, 821

3, .07
256

428
0
0

4,813
0
0

736
35
13

20, 193
622
8,036

1,851
172
0

2,855
0
12

9,726
559, 688
107, 575

343
6,663
2,121

0
824
143

0
8,923
606

127
2,829
985

652
81, 569
21, 298

181
6,690
718

1, 026, 581

12, 504

1,395

14, 342

4,725

132,370

9,612

Alaska

Arizona

Arkansas

California

Colorado

Connecticut

Delaware

District
of Columbia

Florida

$566 $1, 033
49
0
155
0

Georgia

Hawaii

$373
0
2, 186

$1
0
0

79
421
3, 120

24
309
1,417

0
0
265

1, 119

4,857

4,309

266

20
1
0

320
0
17

7,900
338
297

8,807
29
145

496
0
0

1
5,812
706

21
2
5

0
2,427
830

34
207
19, 762 12, 386
3,217
3,256

0
1, 257
180

9,386

49

3,594 31,721

24, 657

1,933

Net income before related taxes
Taxes on net income:
Federal
State
Total taxes on net income
Net income before dividends
Cash dividends declared:
On common stock
On preferred stock
Total cash dividends declared
Net income after dividends
Capital accounts ||

2, 640, 991

33, 728

611, 450
97, 985

8,885
1,659

3,733 12, 647 13,430
974
4

709, 435

10,544

978

1, 931, 556

23, 184

2,755

892, 934
4,344

10, 535
0

547
0

310, 323 31, 184 22, 724

5,904

57

7,497

108

16, 820

223

16, 235 54, 722 24, 473

3,858

43
0

6, 535 17,686 12, 310
301
0
0

2,061
0
2,061

1,423

3, 108

79, 968 10, 242

11,224 10, 322

230, 355 20,942
117,872
0

9,676
0

8,267
0

6,774
0

3,374
0

— 14
122

7,497
0

3, 108
0

8,587
1,655

3,966

54 12, 194 15,612
0
0
3

1, 182
241

47, 219
32, 749

280 28, 429 70, 334 31, 970

3,565
2,339

12, 194 15, 612

897, 278

10, 535

547

6,774

3,374

117,872

9,676

8,267

43

6,836 17,686 12,310

1, 034, 278

12, 649

2,208

4,450

6,948

112,483 11, 266

8,553

180

9,399 37, 036 12, 163

1,797

2,409 138,489 531, 446 306, 605

51,486

20, 585, 402

241, 163 20, 534 142, 201 115,535 2, 184, 329 211,763 181, 781

Ratios:
Net income before dividends to capital
accounts (percent)

9.38

9.61

13.42

7.89

8.93

10.55

9.89

9.25

9.26

11.72

10.30

7.98

7.49

Total current operating expenses to
total current operating revenue
(percent)

76.74

73.59

77.72

81.50

75.91

81. 17

77.49

78.59

81. 15

70.27

76.03

77.37

82.24

See footnotes at end of table.




TABLE B-29—Continued
Income and expenses of National banks* by States, year ended Dec. 31, 1968
Idaho

Illinois

Indiana

Iowa

Number of banks
Current operating revenue:
Interest and dividends on—
U.S. Government obligations
Other securities
Interest and discount on loans f
Service charges and other fees on banks'
loans
Service charges on deposit accounts. . . .
Other service charges, commissions, fees,
and collection and exchange charges
Trust department
Other current operating revenue
Total current operating revenue

Current operating expenses:
Salaries and wages:%
Officers
Employees other than officers
Number of officers
dumber of employees other than officers

Officer and employee benefits—pensions, hospitalization, social security,
insurance, etc
Fees paid to directors and members of
executive, discount and other committees
Interest on time and savings deposits. . .
Interest and discount on borrowed
money §
Net occupancy expense of baiik premises
Furniture and equipment—depreciation, rents, servicing, uncapitalized
costs, etc
Other current operating expenses
Total current operating expenses

Net current operating earnings




Kansas Kentucky Louisi-

171

$5,405 $159, 334 $48, 963 $15, 068 $23, 115
4,298 125,982 26, 319 8,640 13,013
34,468 798, 771 204, 597 65, 124 76, 971

80

48

Maine

21

12, 230 4,466
27, 157 13, 130

754
4,514

791
6,208

1,037
4,070

1,246
8,301

407
1,831

1,816
360
399

16, 520
51, 965
31,489

2,277
2,598
1,607

2,262
2,213
1,670

851
2,375
1,391

3,702
1,960
2,990

355
1,615
589

51, 480 1,223,448 319, 560
100, 582126, 243

68, 463 24, 519 10, 331
4,639
6,629 131,343 41,837 11, 370
5, 039 1,93'. 851
391
1,502 25, 068 9,083 2,730

12, 972
12,452
1, 146
2,994

34, 356 8,576

3, 161

1,573
110
17,094
116
1,272
1,561
5,630

2,712

514
920
3,969 1,329
473, 731 103, 133 32, 639 37, 589
28, 663 7,572
650
800
32, 008 12, 492 3,524

3,882

25, 067 10, 104 3,746 3,602
110,266 37, 255 12, 160 12, 721

38, 624 907,866 246,817 77, 646 88, 099
12,856

315,582 72,743 22, 936 38, 144

Massa- Michichusetts
87

98

Minnesota
196

Mississippi
40

$16, 105$29, 958 $3, 148 $15, 932 $33, 845 $72,
! 523 $32, 579 $8, 625
,
9,314 15, 797 3,061 11, 181 35,071 49,571 30,199
6,985
"
285, 376 413, 580 201, 869 49, 855
64, 285 107, 916 23,690 88, 172

1,215
3,519

7,589
9,646
4,850

Maryland

2,295 5,203 7,664 4, 132
7,505 18, 640 19, 688 11, 493
1,379 15, 252 8,419 10, 966
3, 131 19,003 15, 928 12, 147
1,313 12,873 7,785 4,974

239
4,799
2,725
1,087
2,907

99, 428171,870 34, 696 130, 908 425, 263 595, 158 308, 359 77, 222

8,383 12, 073 3,033 9, 125 28, 437 27, 892 22, 075
12,573 21, 847 5,325 20, 101 65, 414 79, 281 32, 535
890
267
782 2,127 1,896 1,796
799
3,068 4,898 1,255 4,523 13, 451 16, 188 7,353
2,739

4,815

1,219

3,751 15, 380 16, 808 8,720

626
259
579 1,094 1,349 1,216
.
848
28, 901 49, 650 9,425 32, 238 101, 258 261
•1, 258 ,531 114, 474
508 2,251
309 3,444 25, 020 15,601 10,754
3,736

7,001

3, 121 5,403
11, 553 21,944

6,304 18, 035 22,028

6,469
9,768
557
2,232
2,228
461
18, 094
1,317

9,358

2,475

1,287 4,201 11, 479 12, 935 9,223
4,433 16, 568 39, 706 54,910 30, 125

3,734
12, 903

1,654

72, 140 125,832 26, 944 96,311 305, 823 492, 335 238, 480 57,449
27, 288 46, 038

7,752 34, 597 119,440 102, 823 69, 879

19, 773

Recoveries, transfers from valuation reserves,
and profits:
On securities:
Profits and securities sold or
redeemed
Transfers from valuation reserves. .
On loans:
Recoveries
Transfers from valuation reserves. .
All other
Total recoveries, transfers from valuation
reserves and profits
Losses, chargeofFs, and transfers to valuation
reserves:
On securities:
Losses on securities sold
Chargeoffs on securities not sold...
Transfers to valuation reserves....
On loans:
Transfers to valuation reserves....
All other
Total losses, chargeqffs, and transfers to
valuation reserves
Net income before related taxes
Taxes on net income:
Federal
State
Total taxes on net income

80
2
158

4,957
2,589
819

1,626
7
1,868

402
14
59

347
6
412

417
2
33

1, 129
0
416

238
2
15

168
21
1,200

345
20
193

983
62
227

831
114
144

247
3
6

2
0
26

212
392
3,952

175
1,649
2,400

26
39
538

213
110
287

56
47
1,399

77
41
1,536

11
23
200

94
2,233
2,065

34
3,245
3, 181

47
341
1,682

352
180
1,549

44
83
445

268

12, 921

7,725

1,078

1,375

1,954

3, 199

489

5,781

7,018

3,342

3, 170

828

706
0
0

38, 266
241
7,712

5,324
156
1,804

588
81
38

1,086
126
15

552
114
496

536
233
308

770
9
10

2,287 13,578
46
33
0
902

9,819
58
0

5,842
744
0

669
27
461

690
259
47, 612 14, 656
5,827 2,437

178
3, 104
621

542
4,209
577

39
3,811
1,372

110
6,678
1,381

1
813
407

441
43
101
207
5,689 2], 733 18, 204 10,417
1,519 6,407 2,045 2,374

40
3,726
1,593

100, 348 24, 636

4,610

6,555

6,384

9,246

2,010

9,982 42, 696 30, 227 19, 584

6,516

6,231 30, 396 83, 762 75, 938 53, 465

14, 085

1
1,300
360
2,367
10, 757
2,867
546
3,413

228, 155 55, 832 19,404 32, 964
66, 864 14, 292
0
0

5,763
0

66, 864 14, 292

5,763 10, 695

6,701 13, 220

161,291 41,540 13, 641 22, 269

16, 157 26, 771

9,931
764

Net income before dividends

7,344

Gash dividends declared:
On common stock
On preferred stock

3, 147
0

68, 856 15, 369
5
0

5,359
0

7,321
18

3,147

68, 861 15, 369

5,359

7,339

4, 197

92, 430 26, 171

8,282 14, 930

Total cash dividends declared
Net income after dividends
Capital accounts ((
Ratios:
Net income before dividends to capital
accounts (percent)
Total current operating expenses to total
current operating revenue (percent)..
See
 footnotes at end of tablet


22, 858 39, 991

55, 856 1, 805, 198 422, 466 145, 054 212,851

6,701 13,220
0
0

1, 141
0

9,399 19,511 12,542 11,049
136 7,683 4,013 5,875

4,536
0

1, 141

9,535 27, 194 16, 555 16, 924

4,536

5,090 20, 861 56, 568 59, 383 36, 541

9,549

5,801
0

9,291
146

2,505
0

7,720 30, 527 24, 672 18, 620
0
0
193
0

5,385
0

5,801

9,437

2,505

7,720 30, 527 24, 865 18, 620

5,385

2,585 13, 141 26,041 34, 518 17,921

4, 164

152, 738 290, 256 50, 257 186,212 621, 639 666, 806 393, 173

104, 995

10, 356 17,334

13. 15

8.93

9.83

9.40

10.46

10.58

9.22

10. 13

11.20

9. 10

8.91

9.29

9.09

75.03

74.21

77.24

77.20

69.79

72.56

73.21

77.66

73.57

71.91

82.72

77.34

74.39

TABLE B-29—Continued
Income and expenses of National banks* by States, year ended Dec. 31, 1968
Missouri

Number of banks

98

Montana

48

NebrasNew
New
ka
Nevada Hampshire Jersey

127

52

Current operating revenue:
Interest and dividends on—
[, $4,
U.S. Government obligations.. . $34, 067 $6,473 $14, 349 612
22,820 4,027 "- 094 3,519
' " ~ 10,
Other securities
161, 147 28; 671 76, 671 28, 219
\
Interest and discount on loans f
Service charges and other fees on
2,084
743
559 1,019
banks' loans
Service charges on deposit accounts. .
5,382 2,863 4,721 2,600
Other service charges, commissions,
fees, and collection and exchange
654
3,400 1, 100 3, 194
charges
287 3,209 1,251
Trust department
11,617
7, 125 426 2,217
795
Other current operating r e v e n u e . . . .
247,642 44,590 115,014 42, 669

Total current operating revenue

Current operating expenses:
Salaries and wages: %
Officers
Employees other than officers
dumber of officers
Number of employees
officers

other

Total current operating expenses




33

New
York

176

North
Carolina
22

North
Dakota

42

Ohio

218

Oklahoma

220

Oregon

11

Pennsyl-

327

$4, 069 $51, 789 $6, 311$171, 243 $12, 152 $6, 106 $91, 615 $30, 143 $17, 885 $106,
!
,
108
2,031 58, 504 3,822 183,962 15, 653 3, 859 72, 912 20, 925 16, 863 101,' 088
104,
26, 690 293, 266 31, 842 1, 539, 081 429 23,""" 398, 337133, 838131,817 632, 392
980
268 5,397
471
2,784 23, 493 !,306
593 6,428 1,272
688 13, 605 840
774
617 4,882

34,487 99,28
291 5,305 2,221 3,987 11,570
55, 318 7, 154 2, 113 25, 764 10, 656 14, 073 22, 687
31, 197 3,985 1, 192 7,994 3,309 2,687
85, 279 4, 102
531 17, 221 4,400 4,537
78, 498 2,340
362 8,319 3, 181 2,855

10, 972
43, 220
14, 857

37, 740 457, 364 48, 638 2, 179, 065 159, 743 434 627, 467 208, 673 194, 704
38,
942, 894

3,496 31, 183 4,607
5, 100 64, 346 6,786
393
309 2,503

99, 209 13, 901 3,360 38, 618 20, 560 17, 320 58, 202
281, 391 24, 579 3,438 76, 788 22, 745 26, 153 108,814
6,390 /, 162
306 2,894 1,796 1,654
5,020

than

Officers and employee benefits—pensions, hospitalization, social security, insurance, etc
Fees paid to directors and members
of executive, discount and other
committees
Interest on time and savings deposits
Interest and discount on borrowed
money§
Net occupancy expense of bank premises
Furniture and equipment—depreciation, rents, servicing, uncapitalized costs, etc
Other current operating expenses

Net current operating earnings

17,060 4,528 12, 468 3,789
31, 136 4,457 12, 174 5,637
1, 261 385 1,012
363

143

New
Mexi-

6,729
6,254

1, 046 2,900
1,422

3,461

1,308
1,047

263
723
81
966
73, 056 15, 602 34, 252 12,921
10, 113

580

7,877 1,475

1, 144

157

1,264
1,238

14, 022
15, 265

1,600

49, 015 5,784

1,315

73, 709 5,439

295
323 2,380
9, 103156, 043 13, 841
163

1,812

351

3,549

2,186

1,670 20, 290 1,972

6,442 1, 111 4,229
25, 158 5,984 12,918

1,241
5, 131

1, 117 12,415 1,643
5,020 48, 138 6,898

870
999

16, 778 5,358

5,434

14, 690 5,753

5, 758 27, 646

23, 244

476
256 2, 186 1, 112
165
2,670
4,422
834, 617 49, 639 16, 573 216, 951 66, 612 77, 628 344, 159
2,357

2,222

16, 601

6, 100 1,328 19, 700 6,777

7,621

32, 088

49, 948 4,650
81,052

37,540 5,322
204, 936 19,482

103

8,578

849 14, 042 5,987 4,985 22, 940
3,738 75, 294 22, 671 16, 180 95, 002

178,062 35,422 84, 918 32, 190

27, 230 351, 872 708 1, 665, 072 129, 5880, 644 466, 847
154, 574158, 032 709, 874
37,
3

69, 580 9, 168 30, 096 10, 479

10, 510 105, 49210, 930 513, 993 30, 155 7, 790 160, 62054, 099 36, 672 233, 020

Recoveries, transfers rom valuation reserves, and profits:
On securities:
Profits and securities sold or
redeemed
Recoveries
Transfers from valuation reserves.
On loans:
Recoveries
Transfers from valuation reserves.
All other
Total recoveries, transfers from
tion reserves and profits....

valua-

Losses, chargeoffs, and transfers to valuation reserves:
On securities:
Losses on securities sold
ChargeofFs on securities not sold..
Transfers to valuation reserves.. .
On loans:
Losses and chargeoffs
Transfers to valuation reserves. . .
All other
Total losses, chargeoffs, and transfers to
valuation reserves

1,630
23
9

374
6
1,229

91
0
38

331
10
0

2,736
51

336J

513

202
3
0

6, 136
499
266

286
17
0

103
37
0

1,448
118
4,973

,538
61
0

64
0
0

2,817
21
926

39
1,982
1,391

149,
14'
404

57
218
437

0
40
459

8
5
393

149
442
1, 159

40
12
310

319
904
9,092

13
1,529
4,667

6
4
70

120
4,469
1,473

485
111
226

8
0
429

214
538
4,594

5,074 1,064

2,321

628

747

5,050

567

17,216

6,512

220

12, 601

2,421

501

9, 110

5,063
108
96

715
8
297

2,347
170
143

862
0
0

302
6
7

7,271
1,003
367

250
7
0

85, 630
459
314

4,080
24
72

528 13, 193
46
263
0 2,321

1,613
39
300

5, 130
0
0

22,317
236
286

62
9,574
1,329

196
774
227

40
4,232
634

0
3, 179
988

3
281
,304 11,232
605 3,433

102
1,328
391

415
85, 680
6,867

25
7,379
2,021

4
214
1,033 20, 717
149 2,343

779
7,939
739

19
5,626
1,298

321
32, 475
9, 855

143
18

16, 232 2,217

7,566

5,029

2,227 23, 587 2,078

179,365 13, 601

1,760 39, 051

65, 490

Net income before related taxes

58, 422 8,015

24, 851

6,078

9,030 86, 955 9,419

351,844 23, 066

6,250 134, 170

176,640

Taxes on net income:
Federal
State

20, 474 2,145
1,612
7

7,651
0

1,545
0

2,754 17,568 2,532
0
0
0

Total taxes on net income

Net income before dividends
Cash dividends declared:
O n common stock
O n preferred stock
Total cask dividends declared

Net income after dividends

54, 799
30,800

3, 161
376

1,396 32, 585 10, 835
186
0
1,236

3,550
2,350

40, 190
0

1,582 32, 585 12,071

5,900

40, 190

22, 086 2,152

7,651

1,545

2,754

17,568 2,532

85, 599

3,537

36, 336 5,863

17,200

4,533

6,276 69, 387 6,887

266, 245

19, 529

17,663 3,407
0
0

7, 113
6

2,640
0

2, 131 29, 120 2,618
0
6
0

139,230
3, 181

9,788
0

2,230 40, 640 13,729
0
0
21

17,663 3,407

7,119

2,640

2, 131 29, 126 2,618

142,411

9,788

2,230 40,640

18, 673 2,456 10, 081

1,893

4,145 40,261 4,269

123, 834

9, 741

2, 438 60, 945 19, 290

423, 023 52, 745 170, 971 49, 714

4, 668 101, 585 33, 040 19, 200 136,450
10, 718
0

68, 457
302

13, 750 10, 718

68, 759

8,482

67, 691

57, 258 611, 513 63, 894 3, 515, 765 181, 258 46, 097 915, 689 352, 850 210, 733 1,576,255

Capital accounts]]
Ratios:
Net income before dividends to capital
accounts (percent)
Total current operating expenses to total
current operating revenue (percent).
See
 footnotes at end of table.


8.59 11. 12

10.06

9. 12

10.96

11.35 10.78

7.57

10.77

10. 13

11.09

9.36

71.90 79.44

73.83

75.44

72. 15

76.93 77.53

76.41

81. 12

79.73

74.40

74.07

9. 11
81.17

8.66

75.29

TABLE B-29—Continued
Income and expenses of National banks,* by States, year ended Dec. 31, 1968
Rhode
Island

24

Number of banks
Current operating revenue:
Interest and dividends on—
U.S. Government obligations. . .
Other securities
Interest and discount on loansf
Service charges and other fees on
banks' loans
Service charges on deposit accounts. .
Other service charges, commissions,
fees, and collection and exchange
charges
Trust department
Other current operating revenue. . . .
Total current operating revenue
Current operating expenses:
Salaries and wages: J
Officers
Employees other than officers...
Number of officers
Number of employees other than officers
Officer and employee benefits—pensions, hcapitalization, social security,
insurance, etc
Fees paid to directors and members
of executive, discount and other
committees
Interest on time and savings deposits.
Interest and discount on borrowed
money §
Net occupancy expense of bank premises
Furniture and equipment—depreciation, rents, servicing, uncapitalized
costs, etc
Other current operating expenses. . .
Total current operating expenses
Net current operating earnings




South South
Caro- Dakota
lina

34

Tennessee

77

Texas

535

Vermont

Utah

12

27

$4, 047 $7,
',257 $7, 081 $29, 473 $101, 734 $4, 141 $2, 304
87, 176 4,817 1,710
5, 713 5,022 3,585 20, 762
.
41, 094 47,
~\795 28, 590 158, 113 598, 816 32, 976 17, 202
693
822
1,943 5,243

226
2,525

3,526
9, 190

11,055
33, 658

1,761
2,892

324
1,317

301 1,931
2,325 2,006
1,734
6,98

1,619
641
700

7,049
6, 159
2, 129

14, 768
24, 422
14,240

1,885
1,036
311

186
316
198

57,850 70, 774 44, 967 236, 401 885, 869 49,819 23,557

2,833 8,025 4,635 16, 956
6, 170 133 252 4,385 31, 863
\
417 1,449
227
695
1,471 3,273 1, 113 7, 403

68, 726 2,693 1,933
91, 556 5,463 3,068
243
6,060
196
19, 723 1,423
775

2,214 2,895

21, 420

1,441

6,952

126
672
211
373
23,441 9,704 15,913 67, 523

1,071

730

197
168
4,371
281, 543 19, 190 9, 175

Virginia

107

Washington

27

West
Virginia

80

Wisconsin

117

Wyoming

4,299
7,538
3,583

8,033
8,569
4,025

District
of Columbia-—
all A
14

40

$28, 723 $22, 778 $13, 546 $26, 389 $4, 590
22, 573 23, 146 6, 116 17,970 2,068
169, 839 191, 323 39, 196 133, 540 19, 560
6,202 6,275
12,011 20, 654

Virgin
Islands

$450 $29, 364
449
9,755
2,222 93, 876

533
1,687

2,019
6,055

338
1,682

607
56

2,419
7,884

684
1,552
896

4, 198
4,565
5,864

729
271
497

101
0
178

1,700
7,601
4,535

254, 768 284, 803 64,210 200,600 29, 735 4,063 157, 134

19,971 22, 723 5,413 15, 350 3,098
32, 647 46,819 7,087 24, 710 3,252
261
/, 810 1, 923
498
1, 157
744
8, 110 9,352 1,691 5, 921

292
766
23
170

10, 685
19, 694
717
3, 838

699

175

3,499

949
571
348
390
1,427
88, 277 88, 482 20, 120 77, 973 10,315

11
1,526

7,595 10, 233

1,457

5,476

585
43, 837

27, 405

1,379

59

3,319

216

2,299

221

22

1,755

1,764 2,797

1,636

8,567

27,240

1,646

876

9,737 11,993

2,006

7,415

1,174

152

6,888

1,208 2,992
4,742 9,599

1,380 7,681
4,259 29, 592

23, 332
107, 328

1,219
542
4,958 2, 178

7,252 8,414
28, 045 29, 279

880
3,390

55
452

3,763
18, 953

196, 806 221, 652 45, 428 162,511 23, 377

3,451

109, 659

1,380

637

117 10, 000

43, 878 50, 274 33,977 179,806

652, 921 37, 787 18, 758

13,972 20,500 10, 990 56, 595

232, 948 12, 032 4,799

1,855

57, 962 63, 151

6,434
1,271
7,287 21, 905

18, 782 38, 089

6,358

612

47, 475

Recoveries, transfers from valuation
serves, and profits:
O n securities:
Profits and securities sold or
deemed
Recoveries
Transfers from valuation
serves
O n loans:
Recoveries
Transfers from valuation
serves
All other
Total recoveries, transfers from
tion reserves and profits

rere-

366
0

0

67
0

5,398
3

2,278
41

260
4

108

0

775

2,104

3

26

55

1,349

0
15

56
148

1
289

1,953
788

29

re-

681

383

2,752
0
0

299
3
176

0
3
2,721 2,158
245 1,045

3

373

0

0

27

93

0

17

19
215

521
870

9
273

0
2

15
576

7,398

950

2,430

839

2

1, 193

5,490
33
2,223

6,289
295
253

477
26
20

2,244
54
0

174
10
90

6
0
0

431
0
17

176
9,020
2,031

86
9,482
2,508

126
2,054
262

198
25
3, 157 1,059
98
417

0
231
6

0
4,002
1,069

18, 973 18,913

2,965

5,897

1,629

243

5,519

41, 524 51, 636 16, 767 34, 622

5,568

371

43, 149
18, 196
0

0

1,384

491

7

21

84

44

1,567
3,792

0
96

17
314

25
576

4,801
848

8,972

11, 131

367

394

2,535

558
9
0

3,972
701
622

5, 161
298
5,712

327
0
0

286
9
0

10
927
600

28
7,876
2,241

2,342
34,906
5,888

0
2,008
223

53
521
147

593
1

transfers

5,718 3, 684 2, 104 15,440

54, 307 2,558 1,016
189, 772 9,841 4, 177

Taxes on net income:
Federal
State

1,099 6,453
571
420

3,174 14, 272
305
0

58, 502 2,895 1,067
0
220
115

1,670 6,873

3,479 14, 272

58, 502

3, 115 1, 182

6,613 10, 624 5,790 35, 855

131,270

6,726 2,995




13
109

0

9,269 50, 127

See footnotes at end of table.

0
0

1,213
1

8,283 17,497

Total taxes on net income

81
10

457
9

Net income before related taxes

Net income before dividends

1,004
5

41
1

583
2

valua-

Losses, chargeoffs, and transfers to valuation reserves:
O n securities:
Lqsses on securities sold
Chargeoffs on securities not sold. .
Transfers to valuation reserves. .
On loans:
Losses and chargeoffs
Transfers to valuation reserves. . .
All other
Total losses, chargeoffs, and
to valuation reserves

14
0

0

re-

8,606 13, 389 5,793
0
0
0

6,789
1,998

1,594
0

—47
0

8,606 13, 389 5,793

8,787

1,594

-47

18, 196

32, 918 38, 247 10, 974 25, 835 3,974

418

24, 953

TABLE B-29—Continued
Income and expenses of National banks, * by States, year ended Dec. 31, 1968
Rhode
Island

South
Caro- South
lina Dakota

Tennessee

Texas

Utah

Vermont

Virginia

Washington

West
Virginia

Wisconsin

Wyoming

District

Virgin of CoIslands lumbia—
all A

Cash dividends declared:
On common stock
On preferred stock
Total cash dividends declared

Net income after dividends
Capital accounts ||

$4, 219 $4, 842 $3, 222 $12, 490
0
0
0
0

$67, 851 $3, 769 $1, 092
134
0
31

$16, 043 $13,483 $3, 732 $10, 764 $1,690
0
0
0
0
0

0 $10, 490
0
301

4, 219 4,842

3,222

12, 490

67, 985

3,769

1, 123

16,043 13,483

3,732 10,764

1,690

0

2,394 5,782

2,568 23, 365

63, 285

2,957

1,872

16, 875 24, 764

7,242 15,071

2,284

$418

72,831 96,575 53, 647 360, 659 1, 380, 179 62, 650 30, 558

Ratios:
Net income before dividends to capital
accounts (percent)

9.08 11.00

10.79

9.94

9.51

Total current operating expenses to
total current operating revenue
(percent)

75.85 71.03

75.56

76.06

73.70

327, 924 312,881 117,312 260,404 42, 366 4,409

10, 791
14, 162
219, 775

9.80

10. 04

12.22

9.35

9.92

9.38

9.48

11.35

75.85 79.63

77.25

77.83

70.75

81.01

78.62

84.94

69.79

10.74

•Includes all banks operating as National banks at year end, and full year data for those State banks converting to National banks during the year.
"{•Includes revenues from the sale of Federal funds.
JNumber of employees at year end excluding building employees.
§ Includes expenses incurred in purchasing Federal funds.
[| Includes the aggregate book value of debentures, preferred stock, common stock, surplus; undivided profits, and reserves. These are averages from the June and
December call dates in the year indicated and the previous December call date.
A Includes National and non-National banks in the District of Columbia, all of which are supervised by the Comptroller of the Currency.




TABLE B-30
Income and expenses of National banks* by deposit size, year ended Dec. 31,

1968

[Dollar amounts in thousands]
Banks operating full year with deposits in December 1968, of—
Total

Number of banks
Total deposits.
....
Capital stock (par value)
Capital accounts \
Current operating revenue:
Interest and dividends on—
U.S. Government obligations. . .
Other securities
Interest and discount on loans %
Service charges and other fees on
banks' loans
Service charges on deposit accounts..
Other service charges, commissions,
fees, and collection and exchange
charges
Trust department
Other current operating r e v e n u e . . . .
Total current operating revenue
See footnotes at end of table.




4,716

$5,000.1
$2,000.0
$2,000.1
$10,000.1
and under to $5,000.0 to $10,000.0 to $25,000.0
185

839

1,219

1,348

$50,000.1
$25,000.1
$100,000.1
to $50,000.0 to $100,000.0 to $500,000.0
543

266

244

Over
$500,000.0
72

$257, 884, 000 $275, 000 $3,018,000 $8, 976, 000 $21, 063, 000 $18, 686, 000 $18,208,000 $51,621,000 $136,037,000
5, 752, 000
81,000
210,000
473, 000
413, 000
416, 000
10, 000
1, 175,000
2, 974, 000
21, 524, 000
321, 000
800, 000
1, 738, 000
1, 464, 000
1, 419, 000
38,000
4, 110,000
11,634,000

1, 622, 859
1,415, 134
9, 990, 384

4,303
778
9,684

36, 576
12, 765
108, 754

94, 453
47, 130
322, 937

192, 478
124, 245
770, 586

155,374
120, 628
684, 120

141,640
114, 144
671,319

343, 334
279, 789
1, 923, 532

654, 701
715,655
5, 499, 452

234, 048
629, 950

74
883

1,048
9,246

3,715
30, 530

13, 731
71, 256

13, 133
61, 185

15, 534
48, 975

42, 767
133, 979

144, 046
273, 896

269,888
493, 308
342, 276

321
0
198

3,441
155
1,914

8,623
744
5, 332

18, 841
6,315
16, 407

16, 095
17,414
14, 629

18, 009
26, 720
18, 038

56, 804
106, 024
52, 733

147, 754
335, 936
233, 025

14, 997, 847

16, 241

173,899

513,464

1, 213, 859

1, 082, 578

1, 054, 379

2, 938, 962

8, 004, 465

TABLE B-30—Continued
Income and expenses of National banks,* by deposit size, year ended Dec. 31, 1968
[Dollar amounts in thousands]
Banks operating full year with deposits in December 1968, of—
Total

Current operating expenses:
Salaries and wages :§
Officers
Employees other than officers. .
Number of officers
Number of employees
officers

$5,000.1
to $10,000.0

$10,000.1
to $25,000.0

$25,000.1
to $50,000.0

$100,000.1
$50,000.1
>o $100,000.0 to $500,000.0

Over
$500,000.0

82, 597
other

1,366
537

$26, 204
17, 704
2,973

$58, 886
55, 973
5,965

$114,506
138, 649
10, 643

$91,820
130, 501
7,632

$83, 457
129, 364
6,874

$214, 073
402, 400
16, 177

$430, 049
1, 035, 273
31, 796

397, 270

457

4,827

14, 317

34, 727

31, 610

30,455

90, 072

190, 805

449, 982

375

3,974

12, 589

31, 125

29, 705

29,456

92, 561

250, 197

47, 162
5, 304, 329

387
3,829

2,883
52, 338

6,737
171,497

10, 916
422, 963

7,040
376, 814

4,896
373, 576

8,018
934, 506

6,285
2, 968, 806

$1, 022, 508
1,911,230

$3, 513

than

Officer and employee benefits—
pensions, hospitalization, social
security, insurance, etc
Fees paid to directors and members
of executive, discount and other
committees
Interest on time and savings deposits
Interest and discount on borrowed
money||
Net occupancy expense of bank
premises
Furniture and equipment—depreciation, rents, servicing, uncapitalized costs, etc
Other current operating expenses... ,
Total current operating expenses

Net current operating earnings
Recoveries, transfers from valuation
reserves, and profits:
On securities:
Profits and securities sold or
redeemed
Recoveries
,
Transfers from valuation reserves.




$2,000.0
$2,000.1
and under to $5,000.0

308, 576

22

332

698

2,580

4,216

7,449

37, 567

255, 712

553, 259

706

6,934

20, 059

48, 131

43, 347

42, 721

114, 436

276, 925

374, 319
1, 537, 597

364
2,051

3,974
20, 562

12, 080
59, 027

29, 393
143, 735

28, 561
128, 984

31,465
120, 266

99, 479
333, 373

169, 003
729, 599

11, 508, 962

12,613

134, 905

397, 546

941, 998

840, 988

822, 650

2, 236, 413

6, 121, 849

3, 488, 885

3,628

38, 994

115,918

271,861

241, 590

231, 729

702, 549

1, 882, 616

48, 378
3,928

30

554
57

2,388
418

6,332
354

5,101
222

4,437
152

11,795
215

17,741
2,509

22, 179

2

13

365

608

1,683

2,016

8,427

9,065

On loans:
Recoveries
Transfers from

5,962

Total losses, chargeoffs, and transfers
to valuation reserves

Taxes on net income:
Federal
State

1,572

1,263

387

134

80

803

177
587

604
2, 142

1,539
5,613

1,218
5,829

3,290
5,671

4,685
12, 586

17,585
36,671

178, 687

479

2,708

7,489

15, 709

14,440

15, 700

37, 788

84, 374

308, 885
6,886
33, 821

60
7
5

1,309
186
13

3,979
551
372

10, 942
1,253
1,081

15,218
329
2, 190

14, 382
333
2,620

52, 531
828
6,439

210,464
3,399
21, 101

9,726
559, 688
107, 575

688
278
106

3,236
6,402
999

2,538
20, 912
3,623

2,043
50, 890
7,414

624
41, 180
7,871

178
38, 745
7, 182

17
99,504
23, 432

402
301, 777
56, 948

valua-

Losses, chargeoffs, and transfers to valuation reserves:
On securities:
Losses on securities sold
Chargeoffs on securities not sold.
Transfers to valuation reserves. .
On loans:
Losses and chang<*offs..
Transfers to valuation reserves...
All other

Net income before related taxes

1,320

23
20

re-

All other
Total recoveries, transfers from
tion reserves and profits

403

29, 121
69, 119

valuation

1,026,581

1, 144

12, 145

31, 975

73, 623

67, 412

63, 440

182, 751

2, 640, 991

2,963

29, 557

91, 432

213,947

188, 618

183, 989

557, 586

1,372,899

611,450
97, 985

627
53

6,469
565

21,270
1,831

51,226
3,613

45, 377
3,242

42, 083
2,796

149, 197
9,031

295, 201
76, 854

594,

091

709, 435
Net income before dividends
Cash dividends declared:
On common stock...
On preferred stock
Total cash dividends declared
Net income after dividends

680

7,034

23, 101

54, 839

48, 619

44,879

158,228

372, 055

1, 931, 556

2,283

22, 523

68, 331

159, 108

139,999

139, 110

399, 358

1, 000, 844

892, 934
4,344

852
0

8,040
0

22, 778
5

54, 672
104

53,019
11

50,444
31

173,045
311

530, 084
3, 882

278

852

8,040

22, 783

54, 776

53, 030

50, 475

173,356

533, 966

1,034,278

897,

1,431

14, 483

45, 548

104, 332

86, 969

88, 635

226, 002

466, 878

•Includes newly organized National banks opened during 1968.
fThis includes the aggregate book value of debentures, preferred and common stock, surplus, undivided profits, and reserves.
^Includes revenues from sale of Federal funds.
§ Excludes building employees; number of employees are as of the end of the year.
| J Includes expenses incurred in purchasing Federal funds.




TABLE B-31

Capital accounts, net profits^ and dividends of National banks, 1944-68
[Dollar amounts in thousands]
Capital stock (par value)*
Tear {last call)

Number
of banks

1944
1945,
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959.
1960,
1961,
1962
1963,
1964,
1965.
1966.
1967.
1968.

5,031
5,023
4,013
5,011
4,997
4,981
4,965
4,946
4,916
4,864
4,796
4,700
4,659
4,627
4,585
4,542
4,530
4,513
4,503
4,615
4,773
4,815
4,799
4,758
4,716

Preferred

$110,597
80, 672
53, 202
32, 529
25, 128
20, 979
16, 079
12, 032
6,862
5,512
4,797
4,167
3,944
3,786
3,332
3,225
2,050
2,040
9,852
24, 304
27, 281
28, 697
29, 120
38, 081
57,704

Common

Total

Cash dividends
Total
capital
accounts*

$1,551, 116 $4, 114, 972
$1,440,519
1,616,884
4, 467, 618
1,536,212
1, 699, 833
1,646,631
4, 893, 038
1, 769, 205
1, 736, 676
5, 293, 267
1, 804,490
1, 779, 362
5, 545, 993
1, 884, 352
1, 863, 373
5,811,044
6, 152, 799
1, 965, 977
1, 949, 898
6, 506, 378
2, 058, 050
2,046,018
6, 875, 134
2, 177,888
2, 171,026
2, 263, 746
7, 235, 820
2, 258, 234
2, 386, 226
7, 739, 553
2,381*429
2, 460, 621
2, 456, 454
7, 924, 719
2, 562, 055
2, 558, 111
8, 220, 620
2, 713, 145
8, 769, 839
2, 716, 931
9, 412, 557
2,875, 117
2, 871, 785
3, 066, 632 10, 003, 852
3, 063, 407
3, 259, 258 10, 695, 539
3, 257, 208
3,466, 166 11,470,899
3,464, 126
3, 672,455 12, 289, 305
3, 662, 603
3, 886,042 13, 102, 085
3, 861, 738
4, 163,070 14, 297, 834
4, 135, 789
4, 629, 087 16, 111, 704
4, 600, 390
5, 064, 805 17, 971, 372
5, 035, 685
5, 262, 295 19, 095, 324
5, 224, 214
5,561,524 20, 585, 402
5, 503, 820

Net profits
before
dividends

$411,844
490, 133
494, 898
452, 983
423, 757
474, 881
537, 610
506, 695
561, 481
573, 287
741,065
643, 149
647, 141
729, 857
889, 120
800,311
1,046,419
1, 042, 201
1, 068, 843
1, 205, 917
1, 213, 284
1, 387, 228
1, 582, 535
1, 757, 491
1,931,556

Ratios {percent)

On
preferred
stock

On
common
stock

Net profits
before
dividends
to capital
accounts

Cash dividends to
net profits
before
dividends

Cash dividends on

$5, 296
4, 131
2,427
1,372
1,304
1, 100

$139,012
151, 525
167, 702
182, 147
192, 603
203,644
228, 792
247, 230
258, 663
274, 884
299, 841
309, 532
329, 777
363, 699
392, 822
422, 703
450, 830
485, 960
517, 546
547, 060
591, 491
681, 802
736, 591
794,056
892, 934

10.01
10.97
10. 11
8.56
7.64
8. 17
8.74
7.79
8.17
7.92
9.58
8.12
7.87
8.32
9.45
8.00
9.78
9.09
8.70
9.20
8.49
8.61
8.81
9.20
9.38

35.04
31.76
34.38
40.51
45.76
43. 11
42.69
49.04
46.14
48.01
40.50
48. 16
50.99
49.85
44.20
52.84
43.09
46.64
48.44
45.46
48.86
49.25
46.63
45.30
46.45

4.79
5. 12
4.56
4.22
5. 19
5.24
4.43
5. 11
5.83
6.02
5.50
4.87
4.49
4.52
5.07
5. 12
4.83
5.83
2.05
4.63
4.83
5.06
4.63
5.58
7.53

712
615
400
332
264
203
177
171
169
165
99
119
202

1, 126
1,319
1,453
1,348
2, 124
4,344

•These are averages of data from the Reports of Condition of the previous December, and J u n e and December of the respective years:
NOTE: For earlier data, see Annual Reports of the Comptroller of the Currency, 1938, p . 115, and 1963, p . 306J




preferred

stock to
preferred
capital

Total cash
dividends
to capital
accounts
3.51
3.48
3.48
3.47
3.50
3.52
3.73
3.81
3.77
3.80
3.88
3.91
4.01
4. 15
4. 18
4.23
4.22
4.24
4.21
4. 18
4.15
4.24
4. 11
4. 17
4.36

TABLE B-32

Loans losses and recoveries of National banks, 1945-68
[Dollar amounts in thousands]
Year

Total loans end
ojyear

Losses and
chargeoffs*

Recoveries^

Net losses or
recoveries ( + )

Ratio of net
losses or net
recoveries ( + )
to loans
Percent

$13,948,042
17,309,767
21,480,457
23, 818, 513
23, 928, 293
29,277,480
32,423, 777
36,119,673
37, 944, 146
39, 827, 678
43, 559, 726
48, 248, 332
50, 502, 277
52, 796, 224
59, 961, 989
63, 693, 668
67, 308, 734
75,548,316
83, 388,446
95, 577, 392
116,833,479
126,881,261
136, 752, 887
154, 862,018

1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
Average for 1945-68

$29, 652
44,520
73,542
50,482
59,482
45, 970
53,940
52, 322
68, 533
67, 198
68, 951
78, 355
74,437
88, 378
80, 507
181, 683
164, 765
157,040
190, 188
239,319
276, 737
341,505
391, 691
405,656

$37,392
41,313
43,629
31,133
26,283
31,525
31,832
32,996
36, 332
41, 524
39,473
37, 349
39, 009
50, 205
54,740
51,506
52, 353
59,423
68,464
113,635
86,911
100,625
112,434
148, 376

+$7,740

3,207
29,913
19, 349
33,199
14,445
22,108
19,326
32,201
25,674
29,478
41,006
35,428
38,173
25,767
130,177
112,412
97,617
121, 724
125,684
189,826
240,880
279,257
257,280

+0.06
.02
.14
.08
.14
.05
.07
.05
.08
.06
.07
.08
.07
.07
.04
.20
.17
.13
.15
.13
.16
.19
.20
.17

60,499, 690

136, 869

57,019

79,850

.13

•Excludes transfers to valuation reserves beginning in 1948.
fExcludes transfers from valuation reserves beginning in 1948.
NOTE: For earlier data, see Annual Report of the Comptroller of the Currency, 1947, p. 100.




233

TABLE B-33

Securities losses and recoveries of National banks, 1945-68
[Dollar amounts in thousands]
Tear

1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
I960
1961
1962
1963
1964
1965
1966
1967
1968

.

.

.

..

Average for 1945-68

Total securities
end ofyear

Losses and
chargeoffs*

Recoveries]

$55,611,609
46,642,816
44,009,966
40, 228, 353
44,207, 750
43,022, 623
43,043,617
44, 292,285
44,210,233
48,932,258
42, 857, 330
40, 503, 392
40, 981, 709
46, 788, 224
42, 652, 855
43, 852, 194
49, 093,539
51,705,503
52,601,949
54,366, 781
57, 309, 892
57,667,429
69,656,371
76,871,528

$74, 627
74,620
69, 785
55, 369
23, 595
26,825
57, 546
76, 524
119,124
49,469
152,858
238,997
151,152
67,455
483, 526
154, 372
51,236
47, 949
45,923
86,500
67,898
302,656
149,545
344, 068

$54,153
33,816
25,571
25,264
7,516
11,509
6,712
9,259
8,325
9,286
15, 758
13,027
5,806
12,402
18, 344
21, 198
10, 604
6,350
7,646
4,117
4,650
5,635
6,400
4,815

$20,474
40,804
44,214
30, 105
16,079
15,316
50, 834
67, 265
110,799
40, 183
137, 100
225,970
145, 346
55,053
465,182
133,174
40,632
41, 599
38,277
82, 383
63,248
297,021
143, 145
339, 253

49,212, 925

123,817

13,673

110,144

•Excludes transfers to valuation reserves beginning in 1948:
f Excludes transfers from valuation reserves beginning in 1948]
NOTE: For eariler data, see Annual Report of the Comptroller of the Currency, 1947, p; 100.

234




Net losses or
recoveries ( + )

Ratio of net
losses to
securities
Percent

0.04
.09
.10
.07
.04
.04
.12
. 15
.25
.08
.32
.56
.35
.12
1.09
.30
.08
.08
.07
.15
.11
.52
.21
.44
.22

TABLE B-34

Assets and liabilities of National banks, date of last report of condition, 1950—68
[Dollar amounts in thousands]
Tear

Number
of banks

Total assets

1950..
1951..
1952..
1953..
1954..
1955..
1956..
1957..
1958..
1959..
1960..
1961..
1962..
1963..
1964..
1965..
1966..
1967..
1968..

4,965
4,946
4,916
4,864
4, 796
4,700
4,659
4,627
4,585
4,542
4,530
4,513
4,505
4,615
4,773
4,815
4, 799
4,758
4, 716

$97, 240, 093
102, 738, 560
108, 132, 743
110, 116,699
116, 150,569
113,750,287
117,701,982
120, 522, 640
128, 796, 966
132,636, 113
139, 260, 867
150, 809, 052
160, 657, 006
170, 233, 363
190, 112,705
219, 102,608
235, 996, 034
263, 374, 709
296, 593,618

Cash and
due from
banks

U.S. Government
obligations

Other
securities

Loans and
Other assets
discounts, net

$23,813,435 $35,691,560 $7, 331, 063 $29, 277, 480
26,012, 158 35, 156, 343 7, 887, 274 32, 423, 777
26, 399, 403 35, 936, 442 8, 355, 843 36, 119,673
26, 545, 518 35, 588, 763 8,621,470 37, 944, 146
25, 721, 897 39, 506, 999 9, 425, 259 39, 827, 678
25, 763, 440 33, 690, 806 9, 166, 524 43, 559, 726
27, 082, 497 31,680,085 8, 823, 307 48, 248, 332
26,865, 134 31, 338, 076 9, 643, 633 50, 502, 277
26, 864, 820 35, 824, 760 10, 963, 464 52, 796, 224
27, 464, 245 31,760,970 10, 891, 885 59, 961, 989
28, 674, 506 32, 711, 723 11, 140,471 63, 693, 668
31,078,445 36, 087, 678 13,005,861 67, 308, 734
29, 683, 580 35, 663, 248 16,042,255 75,548,316
28, 634, 500 33, 383, 886 19,218, 063 83, 388, 446
34, 065, 854 33, 537, 250 20,829,531 95, 577, 392
36, 880, 248 31,895,565 25, 414, 327 116,833,479
41, 689, 580 30, 354, 996 27, 312, 433 127, 453, 846
46, 633, 658 34, 307, 948 35, 348, 423 136,752,887
50,952,691 35, 299, 808 41,571, 720 154,862,018

Total
deposits

Liabilities
for
borrowed
money

Other
liabilities

Capital

Surplus,
undivided
profits and

$1, 126, 555 $89, 529, 632 $76, 644 $1, 304, 828 $2,001,650 $4, 327, 339
1, 259, 008 94,431,561
15,484 1, 621, 397 2, 105, 345 4, 564, 773
1, 321, 382 99, 257, 776
75,921 1, 739, 825 2, 224, 852 4, 884, 369
1, 416, 802 100, 947, 233
14, 851 1, 754, 099 2, 301, 757 5, 107, 759
1, 668, 736 106, 145, 813
11, 098 1,889,416 2, 485, 844 5, 618, 398
1, 569, 791 104,217,989
107, 796 1,488,573 2, 472, 624 5, 463, 305
1, 867, 761 107, 494, 823
18, 654 1,716,373 2, 638, 108 5, 834, 024
2, 173, 520 109,436,311
38, 324 1, 954, 788 2,806,213 6, 278, 004
2, 347, 698 117,086, 128
43, 035 1, 999, 002 2,951,279 6,717,522
340, 362 2, 355, 957 3, 169, 742 7, 132, 375
2, 557, 024 119,637,677
110,590 3, 141, 088 3, 342, 850 7, 755, 488
3, 040, 499 124, 910, 851
3, 328, 334 135,510,617
224,615 3, 198, 514 3, 577, 244 8, 298, 062
3,719,607 142, 824, 891 1, 635, 593 3, 446, 772 3, 757, 646 8, 992, 104
5, 608, 468 150,823,412
395, 201 5, 466, 572 4, 029, 243 9,518,935
6, 102, 678 169, 616, 780 299, 308 5, 148, 422 4, 789, 943 10, 258, 252
8, 078, 989 193, 859, 973 172,087 7, 636, 524 6, 089, 792 11,334,232
9, 185, 179 206, 456, 287 , 105, 147 9, 975, 692 6, 299, 133 12, 159, 775
10,331,793 231,374,420
296,821 11,973,852 6, 602, 519 13, 127,097
13,907,381 257, 883, 926 689, 087 16,496, 707 7, 008, 482 14, 515,416

NOTE: For earlier data, revised for certain years and made comparable to those in this table, references should be made as follows: Years 1863 to 1913, inclusive,
Annual Report of the Comptroller of the Currency, 1913; figures 1914 to 1919, inclusive, report for 1936; figures 1920 to 1939, inclusive, report for 1939; and figures 1936 to
1949, inclusive, report for 1966;




TABLE R-35
Total assets offoreign branches* of National banks, year end 1953-68
[Dollar amounts in thousands]
1953
1954.
1955.
1956.
1957
1958.
1959.
1960.

$1,682,919
, 556,326
,116,003
, 301,883
1,342,616
.,405,020
,543,985
, 628,510

1961
1962
1963
1964.
1965
1966
1967
1968

$1, 780,926
2,008,478
2, 678, 717
3,319,879
7,241,068
9,364,278
11,856,316
16,021,617

•Includes military facilities operated abroad by National banks in 1966 and thereafter.

TABLE R-36
Foreign branches of National banks, 1960-68

End of year

National bank
lumber of branches branches as a peroperated by Nationalcentage of total foreign
branches of U.S.
banks
banks
93
102
111
124

1960
1961
1962
1963

75.0
75.6
76.6
77.5

End of year

1964
1965
1966 .
1967
1968

.

National bank
Number of branches branches as a peroperated by National centage of total
banks
U.S, banks
138
196
230
278
355

76.7
93.5
94.3
95.5
95.0

TABLE B-37
Assets and liabilities of foreign branches and military facilities of National banks, Dec. 31, 1968: consolidated statement
[Dollar amounts in thousands]
Gash and cash items
Due from banks (time and demand)
Securities
Loans and discounts
Customers' liability on acceptances
Fixed assets
Other assets
Due from head office and branches (gross)
Total

$235, 646
2, 290, 515
320, 273
6, 649, 255
589, 376
77, 839
156, 911
5, 701, 802
16, 021, 617

Total demand deposits
$2, 205, 503
Total time deposits
9, 379, 875
U.S. Government deposits
255, 157
Certified checks, officers' checks, official checks...
73, 102
Total deposits
Other liabilities and borrowed funds
Liabilities on acceptances
Due to head office and branches (gross, including
capital)
Total

236




11, 913, 637
351, 669
595,394
3, 160, 917
16, 021, 617

TABLE

B-38

Common trust funds, by States, 1967 and 1968 *
Number of banks
with common
trust funds
1967

1968

Number of
common trust
funds

Number of account
participations

1967

1968

1967

1968

539

602

1, 195

1,429

316, 947

343,590

Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia

7
1
4
3
11
14
16
3
6

7
1
4
4
13
16
17
3
6

13
1
13
4
36
30
34
9
12

16
1
13
8
41
34
44
11
12

2,118

2,338

Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine

16
10
3
3
16
15
3
6
7

21
10
3
3
22
17
4
7
8
3
9

31
22
7
5
38
34
7
12
16
2
19

52
22
8
5
56
42
9
14
19
6
21

7
28
14
13
3
10
4
5
1
4

17
54
40
27
5

18
62
43
38

26

26
6
9
3
6

22

39
8
80
24
8
75
16
13
154
10

8
96
16
13
173
13

7
9
15
63
10
12
50
21
10
36
0

9
15
86
10
13
61
22
17
47
2

Total United States .

Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire

-

2

8

7
24
13
10

:...

2

10
3
4
1
4

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

19
4
25
11
3
28
6
4
83
3

3
26
11
3
33
6
4
88
3

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

3
5
10
33
5
7
25

3
5
9
44
5
6
26

7

7

9
17
0

11
19
1

5
7
3
6

7

49
9
84

27

7

Total assets of funds
(millions)

1967

1968

Percent change
in assets

1966-67

1967-68

$8, 347. 5 $9, 553. 5

9.7

14.4

28.0

17.1
50.0
15.7

23.9
16.7
30.7
24.4
16.9
15.2
31.5
13.4

22.6

51

51

0.6

0.7

2,858
1,026
25, 949
6,304
7,338
3,169
3,109

3,131
1,141
26,847
6,630
9,007
3,260
3,041

82.4
11.9
613.0
199.8
198.5
83.1
99.1

107.7
14.8
716.7
230.1
261.1
94.2
104.4

16.7
17.6
20.2
18.5
-9.4
17.3

4,009
5,214
1,617

4,734
5,667
1,790

85.5
119. 1
27.4

105.4
137.9
37.2
12.4
520.7
107.1
30.0
16.9
62.9

16.5
11.8
19.6
214.3
12.6
24.6
36.7
46.3
17.7

677

923

7.5

10, 999
4,646

13, 003
5,116
1,249

5.3

23.3
15.8
35.8
65.3
14.2
28.0
38.9
21.6
24.3
59.0
14.6

2,788

3,076

455.9
83.7
21.6
13.9
50.6
3.9

6.2

2,688

2,836

66.9

76.7

6,991
14, 029
8,653
6,513
1,403
11,287

6,524
14, 908
10, 319
7,286
1,913
11,658

179.2
513.0
216.0
124.6
19.5
295.8

178.6
552.5
290.5
168.7
29.1
327.7

7.2
7.9

-.3
7.7

-6.8
28.1
68.1

7.6

9.9

37.7

56.8

11.4

13.2

18.7
26.5
19.7
11.8

34.5
35.4
49.2
10.8
30.3
50.7
10.6
15.8

127.1
26.3
1, 530.4
191.0

151.9
31.4
1,613.4
221.9

16.0
24.6

19.5
19.4

15.5
91.2
24.0
27.5
15.3
-3.7
13.9

16.2
21.5
16.4
30.8

948
770
314

948
408

672

730

1,731

2,607

508
339

7,659
1,362
28, 575
9,599
751

554
364

7,863
1,584
30,244
10,052
839

8.5

6.5

12,194
1,570
5,236
64,008
2,065

13, 624
1,732
5,500
67, 628
2,282

348.1
38.0
98.2
1, 372. 3
51.7

2,298

2,233

27.4

9.4

7.9

405.1
49.7
107.6
1,531.2
58.2
29.7

757

822

7.4

9.2

2,657
10,419
2,550

54.5
287.6
29.3

8,589
6,529
1,338
9,132

2,386
12, 291
2,680
1,078
9,632
6,740
1,614
10, 649

49.2
362.2
32.7
10.8
235.2
154.5
20.6
163.3

0

58

941

9.5

194.6
137.7
17.1
132.3
0

0.4

5.4
8.3

7.3

8.1

89.0
13.8
12.4
20.7
17.2
10.5
7.9

15.0
21.3
14.2

5.4

9.6

11.6
12.6
8.4

24.3
—9.7
25.9
11.6
13.7
20.9
12.2
20.5
23.4

0

•These figures were derived from a survey of banks and trust companies operating common trust funds. Data are for the last
valuation date in 1967 and 1968.
NOTE: Data may not add to totals because of rounding;




237

TABLE

B-39

Trust assets and income of National banks, by States, calendar 1968
Accounts where National banks exercise investment responsibility*
(Dollar amounts in millions)
Trust department income
{Dollar
Number
Employee
Other
Total
amounts in
of banks
benefit
trust
trust
accounts^
accounts**
accounts\

Total United States
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia §

-

Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine

1,671

$41,006

$72,453

$113,458

$493, 308

28
4
2
30
16
29
11
0
6

195
18
34
21
4,016
205
277
0
253

782
12
452
226
9,477
1,130
1,602
0
1,103

977
30
487
247
13, 493
1,335
1,879
0
1,356

4,179
146
3,166
1,030
65,007
9,701
9,096
0
4,254

78
26

271
267
24
15
6,337
336
64
42
40
110
28

2,767
984
110
39
5,966
1,848
356
386
294
206
238

3,038
1,251
134
54
12, 303
2,184
420
427
334
316
266

13, 783
7,726
1,005
360
51,965
9,646
2,598
2,213
2,375
1,960
1,615

3
156
93
44
45
53
21
17

Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire

11
54
33
20
18
36
11
18
3
22

119
1,391
2,984
880
45
692
4
130
5

515
2,557
2,282
1,647
167
2, 166
41
462
173
133

634
3,948
5,266
2,527
212
2,857
45
591
178
139

3,131
19,003
15, 928
12, 147
1,087
11,617
287
3,209
1,251
688

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

89
16
76
14
10
55
38
2
141
2

238
16
12,648
209
11
1,367
207
194
4,655
161

1,579
186
8,447
630
61
3,652
788
615
9,166
332

1,817
202
21, 094
839
72
5,019
995
810
13,821
493

13, 605
840
85, 279
4,102
531
17, 221
4,400
4,537
43,220
2,325

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

9
8
28
138
2
11
53
11
30
36
13

93
15
127
1,450
73
3
171
323
18
215
3

385
58
1,183
3,634
137
46
1,194
1,253
296
641
49

477
73
1,309
5,084
209
50
1,366
1,577
315
856
52

2,006
641
6,159
24,422
1,036
316
7,538
8,569
1,552
4,565
271

*As of December 1968.
f Employee benefit accounts include all accounts where the bank acts as trustee, regardless of whether investments are partially,
or wholly, directed by others. Insured plans or portions of plans funded by insurance are omitted, as are employee benefit accounts
held as agent;
^Includes all accounts, except employee benefit accounts and corporate accounts, in which the bank acts in the following,
or similar, capacities: Trustee (regardless of whether investments are directed by others), executor, administrator, guardian; omits
all agency accounts and accounts where the bank acts as registrar of stocks and bonds, assignees, receiver, safekeeping agent, custodian, escrow agent, or in similar capacities.
§Includes National and non-National banks in the District of Columbia, all of which are supervised by the Comptroller of the
Currency.
**Data may not add to totals because of rounding.
238




APPENDIX C

Addresses and Selected Congressional Testimony of
the Comptroller of the Currency




Addresses and Selected Congressional Testimony of
the Comptroller of the Currency
Date and Topic
Mar. 22, 1968, "The Business of Banking": remarks of William B. Gamp, Comptroller of the Currency, before the Florida
Bankers Association, Bal Harbour, Fla
May 14, 1968, "A New Era for Banking": remarks of William B. Camp, Comptroller of the Currency, before the Texas
Bankers Association, San Antonio, Tex
June 15, 1968, Remarks of William B. Camp, Comptroller of the Currency, before the District of Columbia Bankers Convention, The Homestead, Hot Springs, Va
-_
June 21, 1968, "Bank Accounting and Reporting": remarks of Justin T. Watson, First Deputy Comptroller of the Currency,
before the Texas Bankers Association, Houston, Tex
Sept. 30, 1968, Remarks of William B. Camp, Comptroller of the Currency, before the National Bank Division of the American
Bankers Association 94th Annual Convention, Chicago, 111
Oct. 10, 1968, Remarks of Dean E. Miller, Deputy Comptroller of the Currency for Trusts, before the Western Regional
Conference of the American Bankers Association, Phoenix, Ariz
Oct. 18, 1968, "Bank Conversions and The Dual Banking System": remarks of John D. Gwin, Deputy Comptroller of the
Currency, before the Fall Convention of the New Hampshire Bankers Association, Whitefield, N.H
Dec. 5, 1968, "A Venture into the Law of Trusts": remarks of Dean E. Miller, Deputy Comptroller of the Currency for
Trusts, before the Midcontinent Trust Conference of the American Bankers Association, Detroit, Mich
Feb. 7, 1968, Testimony of William B. Camp, Comptroller of the Currency, before the Subcommittee on Legal and Monetary
Affairs of the Committee on Government Operations, House of Representatives
Apr. 2, 1968, Testimony of William B. Camp, Comptroller of the Currency, before the Subcommittee on Financial Institutions of the Senate Committee on Banking and Currency
May 6, 1968, Testimony of William B. Camp, Comptroller of the Currency, before the House Committee on Banking and
Currency, on H.R. 16064
July 10, 1968, Testimony of William B. Camp, Comptroller of the Currency, before the Subcommittee on Economic Progress
of the Joint Economic Committee, on Municipal Financing
_
July 16, 1968, Testimony of Robert Bloom, Chief Counsel, Office of the Comptroller of the Currency, before the House
Committee on Banking and Currency, on H.R. 13884
Oct. 4, 1968, Testimony of Justin T. Watson, Acting Comptroller of the Currency, before the Subcommittee on Financial
Institutions of the Senate Committee on Banking and Currency, "Financial Institutions and the Urban Crisis"

240




Page
241
244
247
250
254
256
257
259

263
263
264
265
267
269

REMARKS OF WILLIAM B. GAMP, COMPTROLLER OF THE CURRENCY, BEFORE THE FLORIDA BANKERS ASSOCIATION, BAL HARBOUR, FLA., MARCH 22, 1968

The Business of Banking

One of the most precious freedoms we enjoy in our
country is the liberty of the individual to choose a
career and to pursue it. In the world of industry and
commerce, this principle finds expression in the latitude to enter any field of production or distribution
and to serve any class of consumers. The phenomenal
achievements of our economy are thought by many
to rest more on the great national markets we have
opened to all forms of enterprise than upon any other
single factor. The advances in communication and
transportation we have experienced have made this,
more than ever, a reality.
Under the influence of this freedom, we have developed the arts of specialization more highly than any
other nation. You who live in the State of Florida have
seen the fruits of these developments. Your wonderful
year-round climate has come increasingly within the
reach of the growing numbers of our citizens who can
afford the pursuits of leisure and the comforts of retirement, and this has enabled you to exploit these
advantages to a high degree. The technological advances, which have been made possible by the strength
of our economy, have enabled us to explore beyond
the boundaries of Earth, and Florida, as a result of
its strategic location, has stood in the forefront of these
pioneering endeavors, which hold untold promise for
the future.
One aspect of the banking business, branch banking, has been drawing increased attention in recent
years. Understandably, this attention has been centered in those States which impose the most severe
limitations on branching. In many of these States, there
has been a growing movement in recent years to liberalize the laws relating to branch banking. This movement has, so far, met with varied success, but it has
been gaining force. It would be worthwhile to examine
the reasons for this support, and the merits of this
policy.
Branch banking is not a new issue in our country,
even though in other industrialized countries this form




of bank expansion has had general acceptance for
many years. Much of the discussion of branch banking in recent years has been clouded by questions of
existing law, by the divided authority over banks, and
by the varied interests of competing banks and their
nonbank rivals. But there is a genuine issue of public
policy here, which must be faced if we are to resolve
this question properly.
The success with which we improve the mobility of
our financial resources will vitally affect our future
capacity to advance the well-being of our citizens.
Because human and material resources are not always
as mobile, it is especially important that financial
resources should move quickly and sensitively to the
points at which they may be used to best advantage.
This places a particular responsibility upon the local
banker and his capacities, for it is upon his capabilities,
his alertness, his judgment, and his initiative, that the
pace of enterprise in his community will be highly
dependent. For this reason, there is broad public concern to see that the banking system throughout the
Nation operates at the highest level of efficiency.
Traditionally, we have relied upon the forces of individual initiative and private enterprise to search out
the most effective and most efficient means of utilizing
our productive capacity in serving consumer needs.
But in banking, this freedom does not exist. The structure of banking is under public control—no bank may
be formed, branch, or merge without the approval of
a public authority.
This places upon the banking authorities the responsibility for determining the best combinations of the
various means of bank expansion in particular banking
markets, according to the growing and changing needs
for banking services and facilities in those markets, and
bearing in mind the fact that the initiative for expansion still remains with the individual bank. Branching
represents but one of the means for providing an expansion of banking facilities and services, and it is in this
light that branching policy should be viewed. If this
method is foreclosed, the pressure of demand may force
the use of other—and in some instances less efficient—
241

means of expanding available financial services. The
growth of affiliate and satellite banking, holding companies, and many of our nonbank financial institutions,
reflects in some degree the limitations which have been
placed upon bank expansion through branching.
Much of the discussion of branch banking has been
diverted from the basic issues of economy and efficiency because of the fear by many smaller banks that
more liberal branching would lead to their extinction,
and because of the differences in branching laws among
the various States.
Nothing in our experience, however, would confirm the fears of smaller banks. Indeed, the record
shows that the restriction of branching, where there
are market deficiencies, encourages the chartering of
new banks, the formation of branching substitutes,
and the growth of nonbank financial institutions.
Bankers have long been accustomed to giving advice. But, lately, they have been getting a lot of advice
on how to run their own business, not so much from
the regulatory authorities, who are also accustomed to
giving advice, but from their competitors. Strangely
enough, some of these same competitors have been
striving mightily to become more like bankers—a form
of flattery that I am sure we all appreciate.
A generation of bankers whose experience embraced the unsettling years of the Great Depression
and the restrictive banking legislation of that period,
were taught to view the conduct of banking operations with extreme caution—almost with a sense of
guilt for the reverses of the early thirties, which more
accurately could have been ascribed to the deficiencies
of monetary policy and the lack of a system of deposit
insurance. Under the influence of this constricting
counsel, and during a period in which the Nation experienced its most rapid rate of technological advance
and economic growth, the banking industry responded
slowly, and only spasmodically, to the revolutionary
changes that were taking place.
The nonbank financial institutions were not so
reserved in taking advantage of the opportunities
which appeared. They grew more rapidly than commercial banks in this period, and they took many new
forms designed to meet emerging consumer demands.
Today, a new generation of bankers is appearing
on the horizon—a generation with only a dim recollection of past fears, highly trained in modern-day
skills, alive to the opportunities for the expansion and
modernization of banking services, and insistent upon
exploring these opportunities. In the regulatory agencies, we have sought to reshape the pattern of public
controls, so that all new avenues for the performance
242




of financial services that banks may safely pursue are
held open.
Not unnaturally, this new force in the banking industry has met opposition from competitors, although,
interestingly, not from the consumers of banking services. The banking industry has a great unutilized potential, and it represents a formidable latent factor in
all financial markets. The question we face is: How
far should the extension of banking functions be
limited, and by what standards?
The paramount issue is to determine the public
interest. It is repugnant to the most basic principles
of our private enterprise economy to restrict entry
or competition in any market, unless that competition
is destructive of the very freedom of initiative that we
seek to sustain.
There is a great deal of confusion, or at least of
pretense, on this point. Entry into banking and bank
expansion are restricted, and we closely supervise the
conduct of banking operations. But these controls are
designed solely to safeguard the solvency and liquidity
of the banking system. It is of the most critical importance, in the dynamic economy that our banking industry serves, to make certain that, within these limits,
banking initiative is fully preserved.
It is an extremely delicate task to regulate an industry without destroying or seriously impairing its
will to explore and experiment. And it is easy enough
for both the regulator and the regulated to fall into
the comfortable habit of imposing and accepting rigid
rules of conduct under the illusion that the industry
can be insulated from the inexorable tests of the
marketplace. But where an industry fails to adapt to the
times—and particularly where a regulated industry
faces competition from unregulated rivals, as is true
of banking—the consequences are likely to be crippling.
During the past three decades, we have witnessed
dramatic changes in our society, in our economy, and
in our relationships with the world around us. There
have been profound effects upon the demand for
financial services, and the banking industry is only
now in the process of catching up with these events.
The demand for financial services, which lies at the
base of the business of banking, is dependent upon the
income and tastes of individuals, the state of technology, and the capital needs of industry and commerce.
These are self-generating processes, and they are
constantly undergoing change.
As incomes rise, a nation is able to devote more of
its resources to capital-intensive means of production,
to undertake more research devoted to the advance
of technology, and to spend more on the training of its

citizens. As a consequence, incomes tend to rise further,
and the process is repeated. In the course of these
events, tastes change, new products and new industries
emerge, and the economy becomes more highly industrialized and more highly specialized.
More significantly for our purpose, the demands for
financial services constantly grow and change. Individuals with rising incomes save more, invest more, purchase more durable goods (which often involves
borrowing in anticipation of higher incomes), and set
aside more for the education of their children and for
sickness, retirement, and old age. The financing requirements of industry and commerce also rise as new
technology is developed and put to work, new industries emerge, new products are introduced, and new
markets are penetrated and explored. Modern production and distribution methods require ever more highly
trained personnel and more expensive instrumentation.
The response of financial markets has been to develop a host of new instruments and institutions to
bring together more effectively those who have
resources to lend or invest, and those who manage or
utilize these resources. It is to this environment that
the banking industry of our country has had to adapt,
in the face of rising competition for the resources they
dispense and the services they offer—a competition
that is, on the whole, less restrained by regulatory
barriers. The recent resurgence of banking initiative
in vastly broadening the range of its services reflects
the efforts of the banking industry to meet the challenge of today's world of finance—to employ the most
expert personnel and advanced technology feasible,
and to react more sensitively and more quickly to
changing consumer needs and competitive pressures.
A few illustrations may serve to indicate the manner
in which the banking industry, now alive to its potential, has moved to improve its effectiveness and its
efficiency. In order to compete more forcefully for the
funds which constitute the raw material of their operations, many banks have introduced and expanded the
use of certificates of deposit, issued preferred stock,
capital debentures, and promissory notes, and expended greater efforts to attract savings accounts. They
have entered more vigorously the long-neglected consumer loan and mortgage markets, and they have inaugurated credit card and overdraft facilities in order
to make their services available more conveniently to
a broader range of consumers. To accommodate the
growing number of our citizens who travel, either for
business or pleasure, there has been a notable expansion of travel check and related travel facilities. Mobile
services have been undertaken in order to make bank-




ing facilities more readily available. And collective
investment of managing agency accounts has brought
the expertise of banks within the reach of many small
investors.
To serve the growing and changing financial requirements of the world of industry and commerce,
banks have entered the fields of leasing and factoring,
and they have participated more actively in the financing of our foreign trade. As they have applied computer technology to their own operations, they have
offered these services to others in order to make the
most efficient use of these facilities. Comparable extensions have been made of the services of the increasing number of expert and specialized personnel on the
staffs of banks, and payroll and accounting functions
have been performed for many more customers. And
to assist more effectively in meeting the pressing financial needs of local governmental instrumentalities
at minimum costs, banks have underwritten revenue
bonds and participated in community development
loans.
This list of expanded banking services could be
greatly enlarged, and it will grow if banks are allowed
to shape their operations in response to the demands
of today's more sophisticated financial managers, both
individual and corporate. Commercial banks are best
equipped, among our financial institutions, to perform
the wide variety of financial services which our growing and dynamic economy requires. Their greater
awareness of these opportunities, and their alert and
energetic response to these prospects, is the dominant
characteristic of recent banking history. It is eloquent
testimony to the foresight and enterprise of the new
generation of bankers who have made their influence
felt throughout the financial community, a development that should be commended and encouraged.
This is a time of testing for democratic societies—a
testing of whether we shall be able to achieve the goals
we have set while preserving the liberty of the individual. At home, we face growing aspirations by many
of our less fortunate citizens who find it difficult to
earn a place in the age of technology. Abroad, our
national interests and the principles which are vital
to our survival are undergoing severe challenge. We
need, as never before, to harness fully our great productive potential. Every means of improving these
endeavors should be fostered and supported.
The banking system of our country is a critical component of our industry and commerce. We cannot
afford the luxury of allowing this pervasive instrumentality, which reaches into the daily lives of all our
citizens, and affects the efficiency and pace of enter243

prise throughout the economy, to be hampered in the
full and prudent exercise of its productive capacity. All
of us have a stake in this goal to search out every
opportunity for the banking industry to extend and
improve its service to the community and to the
Nation.
REMARKS OF WILLIAM B. CAMP, COMPTROLLER OF
THE CURRENCY, BEFORE THE TEXAS BANKERS A S SOCIATION, SAN ANTONIO, TEX., MAY 14, 1968
A New Era for Banking

It is particularly appropriate in this setting, close
to our southern border, that we should honor our
long and close association with the States of Latin
America. Over the years, as our interests and our
influence have spread throughout the world, we have
preserved a special place for our relationships with
these countries. Common purposes and shared ambitions bind us together, and we have forged among us
intimate ties in pursuit of these aims.
Our neighbors to the south are facing now many
of the same problems that we confronted at an earlier
time, as we sought to develop our industrial potential
and bring its benefits to more and more of our citizens. Indeed, they are endeavoring to absorb and
apply, in a much shorter period, the many and great
advances in technology that have emerged during the
past century. Fortunately, they are endowed with
abundant resources, and a rich future awaits them.
Our own history of this great country demonstrates
the crucial importance of an alert and aggressive banking system in this process of industrialization. Without
it, a nation's resources will lie fallow and the skills
and talents of its people will be unrealized. The task
of fashioning and refashioning an effective banking
system is a continuing one. Progress in a nation's society
and economy alters the demands placed upon its
banking system, and necessitates adaptive shifts in its
policies and practices. We are now, in our country,
undergoing precisely such changes.
It is a familiar experience in our private enterprise
system to observe the march of technological advance,
to witness the opening up of new industries and the
introduction of new products, to see demands change
and markets expand, and to note changing requirements for specialized skills and talents. In this process
of industrial progress, there have been through the
years pervasive changes in the structure of industry,
in business policies and practices, in the size of markets,
and in the capacities and location of our population.
244




Some industries, or units of industries, have fallen before the competition they faced, while others have
risen to new prominence and success. Underlying and
supporting these advances has been the basic freedom of private initiative which we have provided and
preserved in our society.
A banking system capable of supporting and serving
an economy with such energy and vitality must itself
display the same qualities of initiative and enterprise.
For, as we have learned from our experience, if banks
falter in this task, others will be alert to take up the
opportunities that are left untouched or unfulfilled.
In the past, the limitations placed upon the range
of banking functions have encouraged the rise of nonbank financial institutions, and thus produced new
groups with competitive interests to be served through
political action. Here again the public interest would
best be served by insuring the fullest use of the great
potential of the banking system to serve consumer
needs—within the limitations of bank solvency and
liquidity.
Some seek assurance that the added competition
of banks in performing new functions will produce
measurable benefits. But it is the restriction of competition, and not its furtherance, which requires defense
and justification. In financial, as in other markets, the
presumption lies in favor of maximizing competition,
and banks should not be excluded from any financial
market which they may safely and prudently serve.
Both the structure of the banking industry—that is
to say, the number, size, and location of its units—and
its operating functions are affected by these factors
which make change and adaptation more difficult.
There were periods during the early history of our
banking system when entry was relatively free and
branching was not overtly restricted. But eventually
all forms of bank expansion came under direct and
explicit public control. The pattern of the banking
structure that emerged during the latter part of the
past century and the earlier part of this century was
characterized by the formation of a great number of
small, independent banks. This pattern was not unlike
that which developed in most of our industry and commerce during this same period, and was perhaps well
suited to the needs and technologies of that time. But
dramatic changes have taken place since then in the
factors affecting the most proficient banking structure,
and the banking system has not been entirely free to
adapt to these changes.
The constantly accelerating pace of our technological advance, the continuing improvement in our facilities for communication and transportation, the growth

and relocation of our population, the rise of new industries and the introduction of new products, the
increasing penetration of foreign markets, and the
growing affluence of our people—all of these forces
have profoundly affected the structure of our industry
and commerce and placed new and insistent demands
upon our financial institutions. More significantly, in
terms of our own special concern, they have brought
deep-seated changes in the ideal banking structure, and
rising pressures to attain this ideal.
Essentially, the impetus to transform our banking
structure has been founded on the appearance of
demands for financial services at many new locations,
the growth and increasing variety of these demands,
and the opportunities to apply new technology and
highly specialized personnel in the performance of these
services. Among the three principal means of meeting
these requirements, the formation of new banks is
often the path of least resistance. Indeed, in many
locations it remains the only choice open to the regulatory authorities where there exist unfulfilled
demands for banking facilities. Yet, new-bank formation is far from the wisest choice in many circumstances.
Many banking markets are constantly opening up
throughout the country that are either too small, or
have insufficient, unserved potential to support a new
bank profitably. Even where markets are large enough,
moreover, we have often found that initiative is lacking to form a new bank of the required strength, either
because of inadequate capital, poor prospects of
recruiting capable management, or sheer failure of
enterprise by the organizers.
In these circumstances, branching is the only proper
means of meeting consumer needs, and existing banks
are in the best position to meet the initial developmental costs in new markets. They have the trained
personnel to be assigned to these markets and can better
afford the risks of exploring potentials as yet not fully
realized. And they can often provide efficiently and
profitably a range of services beyond the reach of new
independent banks.
The question of efficiency has become increasingly
a matter of the utmost concern in shaping our banking
structure. The same factors that have led to industrial
and business units of larger size and broader geographic scope are making their influence felt in the
financial community.
If the trained men and women needed to provide the
most effective and efficient banking services are to be
attracted to this industry, and the new technology constantly emerging in our economy is to be properly
applied to banking, we shall have to allow banks to




grow to a size sufficient to meet the competition for
personnel and to utilize the most advanced methods
and techniques of operation. Only large banks, moreover, can effectively serve the financial requirements
of the growing number of industrial and commercial
enterprises whose operations are spreading throughout our broad national markets, and even beyond our
shores.
Those who suffer most from the weaknesses of the
banking structure are the individual communities and
their citizens whose full potential lies unseen or unexplored because of an insufficiency of locally accessible financing. But these deficiencies are also a matter
of national concern—for wherever any of our productive power remains at a low ebb, it diminishes us all!
There are some who fear that broader authority to
branch will spell the decline of the smaller bank. This,
however, is contrary to our experience. There are
many services that efficiently operated, smaller banks
are best fitted to perform, and they have a special appeal that larger banks can never fully supplant.
Merger is the third means through which the banking structure may be altered to create more proficient
and strengthened instrumentalities to serve the Nation's financial needs. The closely related question of
merger policy is now in a state of transition. The recent
legislation which many thought would resolve this issue has not yielded the anticipated results. The division
of authority over bank mergers, and the application
to a regulated industry of concepts suitable only for
fully competitive industries, continue to hamper the
exercise of proper regulatory choices and create uncertainties which urgently call for clarification.
As is true of the other methods of bank expansion,
merger is often the preferred choice of means to improve the provision of banking services. If this path is
blocked by arbitrary definitions of banking markets,
or obstructed by merely numerical standards of the
required degree of competition—if what are described
as the banking factors become secondary—then the
banking authorities will in some instances have to rely
more heavily on less efficient means to shape the banking structure. The growth of bank holding companies
and of chain and satellite banking reflects in some
measure the efforts to compensate for the limitations
placed on mergers, as well as those imposed on branching. The road to a fully effective banking system would
be greatly smoothed if the regulatory agencies were
empowered to select the best means—and I emphasize
best means—of reaching the new markets that are constantly emerging for financial services and facilities.
245

certainties of the past, and a vigorous new competitor
Comparable problems have arisen in defining and
has appeared in many of the financial markets from
regulating the range of services that banks may properly offer. In the gloom of the depression years of f: which their initiative had been withheld.
We see evidence of this new vitality in all phases of
the early thirties, when I first started with this Office,
banking operations. Banks have become more energetic
the view took hold that the way to assure the safety
and forceful competitors for the resources they require
of banks was to impose severe restrictions on the scope
to sustain and expand the scope of their operations.
of their operations. This attitude of fear was echoed by
They have introduced or expanded the use of certifimany in the banking industry, and a number of banks
cates of deposit, capital debentures, and promissory
became mere repositories for government securities.
notes, and fought more strenuously to attract savings
This mold became difficult to break, since it was supdeposits, in order to accommodate their operations
ported not only by bankers who sought a safe retreat
more sensitively to the varied needs of savers and infrom the swirling forces of new demands and new
vestors. They have sought to apply the most advanced
competition, but also by pressures from other financial
technology to the handling and processing of the ininstitutions that arose to serve the emerging markets
struments of their operations and the records and data
that banks were largely neglecting.
they require for effective management. And they have
Over the past three decades, this Nation has experiundertaken more active recruitment programs, and
enced the most exuberant growth of its history, and
provided the incentives necessary to improve the calibre
this growth has been accompanied by an enormous exof their personnel.
pansion and proliferation in the demands for financial
These efforts have been reflected in more assiduous
services. Rising personal incomes have placed in the
pursuit of new markets and new functions. Longhands of more and more of our citizens resources to
neglected consumer loan and mortgage markets have
save and invest. Durable goods of increasing variety
been penetrated and developed. Credit card and check
and new homes have absorbed growing proportions of
guarantee facilities have been introduced in programs
personal expenditures and greatly expanded the deto bring banking services more conveniently within
mands for consumer financing and home mortgages.
the reach of a broader range of consumers. Travel
Augmented educational requirements and intensified
check and related travel services, as well as a variety
efforts to anticipate and prepare for the costs of sickof mobile facilities, have been expanded in response
ness, retirement, and old age have opened up many
to growing needs and opportunities in thesefields.And
new markets for financial services of increasing degrees
the expert investment-management capacities of banks
of sophistication.
have been adapted to the wants of the increasing
This new age of technology and the growth of nanumber of small investors in our society.
tional and international markets for our industry and
The surging requirements of industry and comcommerce have brought both swelling new needs for
merce have also been the targets of the revitalized
financing and greater expertise of corporate managespirit of enterprise in the banking industry. Leasing
ment in fulfilling these requirements. These forces have
and factoring services have multiplied. Foreign trade
spawned a host of highly specialized financial instrufinancing has been more actively pursued as our exments and financial markets. And they have generated
ports have mounted. The application of computer
as well a variety of participants in these markets,
technology to banking has promoted the performance
including the more knowledgeable of the corporate
of payroll and accounting functions for their customers,
financial managers.
as well as the leasing of excess computer capacity.
For most of this period of evolution, the banking
Larger staffs of expert personnel have provided the
industry has stood largely aside from the new opporbase for a broader range of advisory services to intunities that were arising. During the past several
dustry and commerce. Local governments have been
years, however, a new spirit has enlivened and aniaided through the underwriting of bond issues and the
mated the banking community. More responsive reguextension of community development loans.
latory policies have inspired significant changes in
These are but illustrative of the rebirth of initiative
banking attitudes and practices. The competitive drive
in banking, but they demonstrate both the unrealized
symbolic of our industrial progress has found renewed
potential during past years of neglect, and the shining
expression in this industry long thwarted by outmoded
promise of a banking industry now imaginatively atconcepts of its role and its capacities. An aggressive,
tuned to a more vital role in the Nation's progress. In
confident outlook has supplanted the doubts and un246




this search to enlarge the range of activities in which
banks may put to work their unmatched capacities to
perform financial services—as well as in their efforts
to expand into growing new markets and develop or
combine into units of the most efficient size—we are
witnessing the finest expressions of a renaissance of
those qualities of innovation and initiative that have
fired the engines of enterprise throughout our society.
There is perhaps nothing in the human condition
that is more difficult to accept than change, and no
change arouses more opposition than that which comes
from an unexpected quarter. This no doubt accounts
in large part for the resistance banks have encountered
in achieving their new stature. But the revived assertiveness of banks has demonstrated once again the virtues
of enlivened competition. We properly expect of banks
a degree of prudency in their operations beyond that
required in most other industries, but it is both imprudent and wasteful to constrain this industry from
the performance of any financial function that will
not impair its solvency and liquidity. Indeed, we all
have a positive responsibility to see that no obstacles
hamper the effective functioning of this crucial component in the advance of our society and our economy.
The developing countries represented at this HemisFair know, perhaps better than most of us in this
country, how essential to the well-being of a people
are highly developed and responsive financial institutions and mechanisms. The history of industrialized
countries has demonstrated again and again the acute
importance of their banking systems to their progress.
We must work jointly for the full realization of the
great potential of this industry. Our aim should be to
fashion and sustain a banking system that responds
swiftly to new demands, that alertly applies new techniques which enhance proficiency of operations, and
that persistently searches for new functions that may be
performed safely and prudently.
These goals are consonant with the high traditions
of our private enterprise system. Nothing less will enable the banking system to fulfill its essential role in
the Nation's future. I am confident that we are entering a new era of achievement in banking that will
far outdistance our accomplishments of the past, of
which we may be justly proud.
In closing, I wish to assure you that as Comptroller
of the Currency, and the person charged with administering and regulating the National banking laws,
our Office will continue to be responsive to the efforts
of the banking industries to serve the evergrowing
needs of their communities and our great Nation.




REMARKS OF WILLIAM B. CAMP, COMPTROLLER OF
THE CURRENCY, BEFORE THE DISTRICT OF COLUMBIA BANKERS CONVENTION, THE HOMESTEAD, HOT
SPRINGS, VA., JUNE 15, 1968

One of the most heartening impressions I have
formed, wherever I go, is based on the evidence I
see of the strength and soundness of our National banking system, and indeed of the healthy growth and steady
progress of the commercial banking system as a whole.
I am confident that this is because the banks of
this Nation are remarkably alert in anticipating and
meeting the needs of the customers they serve. New
tools, new techniques, and new methods of approach
to the business of banking help make this possible. But
it takes the imagination and ingenuity of progressive
management to put these processes to effective use.
Management, in turn, is spurred by the healthy, competitive spirit that drives individuals to the better performance of any job they undertake. And the inevitable
result is to produce the greatest possible good—at the
lowest possible price—for the public they serve.
This kind of progress is as old as our Nation, which
long ago committed itself and its people to the competitive free enterprise system. This progress has not
always gone forward at the same pace, but it has always gone forward in the same direction. Bluntly
speaking, free enterprise is a system of economic selfishness; but it is a selfishness that, to borrow from Lincoln,
has added the fuel of interest to the fire of American
genius. This is a form of enlightened self interest that,
in a not very mysterious manner, has done more to
raise the economic standards of mankind than has
any system of economic altruism ever devised.
American free enterprise is a far cry from the laissezfaire economic philosophy of Adam Smith, which
flourished during the first century of our country's
independence. The essential difference lies in our recognition of the economic complexities and strains that
have grown out of a highly mechanized industrialization, and in our meeting them with measures based
upon essentially American principles.
All of our history demonstrates the vital importance
of an alert and aggressive banking system in our steady
progress of industrial growth. Without it, any nation's
resources will lie dormant, and the skills and talents
of its people will find no effective means of expression. Once begun, however, the job of shaping and reshaping an effective banking system has no foreseeable
end. At each stage of our expanding growth, the
progress we have made lays new demands upon the
banking system that helped to bring about the achieve247

ments realized. At almost any moment in time, therefore, the good banker is challenged with the necessity
to become a better banker, and the goal of becoming
the best often seems as elusive as ever.
Undoubtedly, the mainspring of the effective activity
of our free enterprise system is initiative, and as I said
before, that initiative stems from self interest. Americans are free to buy and sell, to change their jobs and
start new businesses, to advertise and market their
goods and services—and all of us have benefited
greatly from these freedoms, because each knows that
the greater his efforts, the greater will be the rewards
for himself and his family.
A banking system able to support and serve an economy growing with such boundless energy as ours must
take on the same qualities of initiative and enterprise.
If it does not, other financial institutions will be quick
to seize the opportunities that are overlooked or left
unsatisfied.
Each of you, I am sure, knows examples of this
within your own experience. And I am well aware
of the particularly keen frustrations that arise when
initiative is shackled by what are regarded as artificial
barriers to normal patterns of growth and expansion.
A national magazine recently commented on one
such predicament faced by District of Columbia
bankers in their efforts to follow their customers at
least as close to the suburbs as they are permitted by
law to branch. At the same time, it noted that District
bankers have been diligent in branching within the
District in places where employment concentrations
are high, thus adding the lure of convenience to the
advice to "bank where you work." With the Washington banks operating 93 branches throughout the District, the publication appeared willing to give the D.G.
bankers as a whole a solid "A" for effort in this
regard, although it cast some doubts on the achievements accomplished. In any event, it brought to national attention a situation with which all of you are
uncomfortably familiar.
Similar, if not identical, problems exist in many other
sections of the country as well. The growth and relocation of population centers, the formation of new
industries to produce new products, the expansion of
communication and transportation facilities, the increased requirements for higher job skills, the growing
affluence of our people and the variety of leisure activities open to them, technological improvements in industrial processes—all of these forces and developments
have placed insistent new demands upon the financial
institutions of the Nation.
248




The manner in which alert and progressive banks
have met these demands has encouraged and heartened
all of us who believe that banks should be free to provide the widest variety of financial services possible,
as long as they offer no threat to bank solvency and
liquidity. The range of these services is constantly expanding, due partly to a new spirit of increased awareness of the opportunities represented, and partly to
regulatory policies ever more responsive to the needs
of the banks and of their customers. From time to time,
individual banks which feel hampered by what they
regard as restrictive policies of one regulatory system
apply for conversion to another. I might say in this
connection, that the Comptroller's Office welcomes
these expressions of free choice in whichever system
seems best suited to serve the public needs.
Evidence of this new vitality in all phases of banking
activity is readily apparent. Banks across the country
have become more skillful and active competitors for
the resources they need to sustain and enlarge the scope
of their activities. They have vastly enlarged the use
of certificates of deposit, capital debentures, and promissory notes, and they have searched more actively for
ways to attract savings deposits, in order to adjust
to and accommodate the needs of savers and investors.
The banks have sought to apply the most advanced
technology to the handling and processing of the instruments of their operations and to the records and
data they require for effective management. They
also have undertaken more active recruitment programs and they are providing the incentives necessary to improve the calibre of their personnel.
All these efforts have been reflected in a much more
diligent pursuit of new markets and new functions.
In many cases, long-neglected consumer loan and
mortgage markets have been developed and expanded.
Credit card and check guarantee facilities have been
introduced in growing volume to bring banking services closer to a broader range of consumers.
In this connection, our Office compiles data twice
each year from information supplied by National banks
with call report data. The most recent totals at the end
of 1967 showed that the total credit outstanding at
National banks under credit card and other revolving
credit plans had reached $984.6 million. This represented a 17.5 percent increase over the total for
October 4, 1967, and a 50.3 percent increase over
April 25, 1967, when the first such report was made.
A breakdown of the December 30 total showed that
it was made up of $635.9 million in credit outstanding
under credit card plans at 187 National banks, and
$348.7 million in credit outstanding under other revolv-

ing credit plans at 420 National banks. If the present
trend continues, this form of service to customers will
take on increased significance in the months and years
ahead.
In addition, travel check operations and related
travel services, as well as a variety of mobile facilities,
have been expanded steadily in response to growing
needs and opportunities in these fields. Moreover, the
expert investment-management capacities of banks
have been more widely adapted to the wants of the
increasing number of small investors in our society.
The Invest In America program, and others like it,
are increasingly successful in showing anyone who
works for his money how he can put his money to
work for him. Such programs have the full support
of the National banking system, whose continued
strength and capacity for service depends directly on
the public's understanding of, and participation in,
our system of competitive free enterprise.
The growing requirements of industry and commerce also have inspired the revitalized spirit of enterprise in the banking industry. Leasing and factoring
services have multiplied. Foreign trade financing has
been more actively pursued as our exports have
increased.
The application of computer technology to banking
has promoted the performance of payroll and accounting services for their customers, as well as the leasing of
excess computer capacity. Larger staffs of expert personnel have provided the base for a broader range
of advisory services to industry and commerce. Local
governments have been aided immensely through the
underwriting of sound bond issues and the extension
of community development loans. And wherever competition from banks in the underwriting field has led
to lower financing costs, individual taxpayers have
benefited directly and substantially.
All these examples are but illustrative of the rebirth of initiative in banking, but they demonstrate
both the unrealized potential during past years of
neglect, and the shining promise of a banking industry
now imaginatively attuned to a more vital role in the
Nation's progress. In this search to enlarge the range
of activities in which banks may put to work their
unmatched capacities to perform financial services,
as well as in their efforts to expand into growing new
markets and develop or combine into units of the
most efficient size, we are witnessing the finest expressions of the renaissance of those qualities of innovation and initiative that have fired the engines
of enterprise throughout our society. The revived assertiveness of banks has demonstrated once again the




advantages that flow to the public from enlivened
competition.
The question of efficiency increasingly has become
a matter of the utmost concern in determining the
shape of our banking structure. The same factors that
have led to industrial and business units of larger size
and broader geographic scope are making their influence felt in the financial community.
If trained people needed to provide the most effective and efficient banking services are to be attracted
and held to this industry, and if the new technology
constantly emerging in our economy is to be properly
applied to banking, then banks must be expected to
grow to a size sufficient to meet the competition for
personnel, and to utilize the most advanced methods
and techniques of operation. In many cases, only larger
banks can effectively serve the financial requirements
of the growing number of industrial and commercial
enterprises whose operations are spreading throughout
our broad national markets and beyond our shores as
well.
When reasonably planned, soundly conceived, and
broadly beneficial combinations of banking assets are
proposed, they frequently incur the hostility of those
whose concept of competition is limited solely to the
numbers of units involved. It is easy—and superficial
in my judgment—to focus attention on the quantity
of competing banking units that now exist and to conclude that any lessening of these numbers will act as
a restraint on trade. Quite often, the quality of effective competition that can result from a beneficial merger is either minimized or overlooked entirely by those
who are hostile to size alone.
Yet those who suffer most from arbitrary restraints
on growth by both merger and branching processes
are the individual communities and their citizens
whose full potential remains unrealized because of an
insufficiency of locally accessible financing. These
deficiencies may be local in nature, but they are also
a matter of national concern, for wherever any of our
productive power remains at a low ebb, it diminishes
our total national effort.
I believe, therefore, that we must continue to work
for the full realization of the great potential of the
banking industry. Our aim should be to fashion and
sustain a banking system that responds swiftly to new
demands and opportunities, that alertly applies new
techniques which enhance proficiency of operations,
and that persistently searches for new functions that
can be performed safely and prudently. In the process,
I believe that growth in size of units, through effective

249

combination of complementary functions, is a necessary corollary to growth in service capacity.
These goals are fully consonant with the best traditions of our private free enterprise system. Nothing
less will allow our banking system to fulfill its essential
role in the Nation's future. Remarkable as our past has
been, I am confident that we are entering a new era
of achievement in banking service that will far outdistance any other accomplishment we have known.
I am well aware that you and other leaders of the
American economy are facing a task of unique difficulty if the future path of American civilization is
to be traversed without the loss of more and more
freedom and independence.
If our problems are to be solved through the democratic process of intelligent, self-disciplined action by
our people as a whole, there must be leaders in thought
and action to whom the people can look for both precept and example. You bankers fit that role, for by
setting a true standard for others to follow, you can
reorient the attitude of American business and the
American people with respect to worthwhile economic
goals and enlightened means to attain them.
George Bernard Shaw once cynically observed:
"Liberty means responsibility. That is why most men
dread it."
The American people, under the leadership of those
best suited by training and position to lead, can and
must prove themselves worthy of liberty in accomplishing and discharging their responsibilities. Only in this
way can we preserve the fundamentals of the free,
unregimented economic system that has been the wonder of the world.
REMARKS OF JUSTIN T. WATSON, FIRST DEPUTY
COMPTROLLER OF THE CURRENCY, BEFORE THE
TEXAS BANKERS ASSOCIATION, HOUSTON, TEX.,
JUNE 21, 1968

Bank Accounting and Reporting
As most of you perhaps know, in May of 1967 the
Comptroller's Office issued an accounting regulation
which is applicable to all banks under our supervision.
Our objective is, of course, to disclose meaningful information to shareholders, prospective investors, and
the analysts. This led one prominent financial analyst
to remark that recent developments in bank reporting compared to that of the current fashions among
the ladies. Both seemed to be galloping rapidly toward
full disclosure. The rising hemline in banking is revealing certain aspects of operations and the disclosure
of interior reserves which bankers used to consider
250




strictly private. Today, privacy is no longer possible
and it helps to have the kind of legs the girl-watchers
watch. Some bankers don't like so much of the leg
exposed, and want the hemline dropped. Some financial analysts think we are too Victorian, while some
Certified Public Accountants (CPA) think we are trying to show off the wrong thing, and they are making
suggestions that we direct our energies toward revealing other parts of the anatomy of a bank.
Until quite recently, bank accounting and reporting was ultraconservative. The "old school" banker
thought a bank ought to be better than it looked.
These conservative concepts were also condoned by
the regulatory authorities, whose prime concern seemed
to be liquidating values. Accordingly, it was considered virtuous to write off assets and create "fat"
reserves. Sometimes these reserves were in the form
of valuation reserves, cashiers checks, savings accounts,
and even trust accounts.
These reserves could then be used for many and
sundry purposes, including the absorption of charges
which should have been disclosed in the operating
statement. In many instances the reserves were a
convenient place to hide unwelcome news from stockholders. One banker referred to this method of accounting as "Concealment Accounting." Had there been
adequate disclosure, the enterprising and sophisticated
investor could have, at least, constructed an adjusted
balance sheet for his own use.
I think all of us in the banking industry recognize
the need for full disclosure and more uniform methods
of accounting and reporting. The trend has been in
the right direction over the past several years. A few
years ago the Comptroller's Office made an analysis
of the annual reports of the major National banks.
Actually, disclosure was considered fairly good, but
some banks left out certain material which would
seem pertinent to the sophisticated investor and
analyst. The basic difficulty seemed to be the lack of
uniformity in reporting, and consequently, it was difficult to analyze banks on a comparable set of factors,
because the information just wasn't there across-theboard.
Our accounting regulation was conceived by the
Comptroller's National Advisory Committee to correct
some of these problems. The Committee felt that there
was need for banks to make more adequate disclosure,
and that a greater degree of accounting uniformity
would also be beneficial.
A committee of prominent bankers highly experienced in the accounting and reporting areas was
formed to draft an accounting regulation. They were

assisted by six members of the Comptroller's Office.
The Committee Chairman was Clarence Baumhefner,
Executive Vice President and Cashier of the Bank
of America. In his introductory remarks, Mr. Baumhefner indicated the Committee would concentrate its
attention on the following:
(1) The more significant items of accounting and reporting;
(2) The impact on the interested and affected groups—
depositors, shareholders, general public, accountants, and
analysts;
(3) Objectivity and sound business judgment; and
(4) A desired high degree of conformity in the preparation of reports to supervisory authorities, shareholders, and
the public. Also kept in mind were the current instructions
for the preparation of call reports and income and dividend
reports and the possible revision of these reports, the various
statistical series now being maintained, the recommendations
of the ABA Committee on Accounting Practices, the recommendations of the Bank Administration Institute Accounting
Commission, and the requirements of Regulation F on Statemember banks, and comparable FDIC regulation on nonmember banks.

The principal matters they considered were the format of statements, the accounting and reporting of reserve for bad debts, the accounting for and reporting
of securities transactions, the consolidation of statements of subsidiaries and affiliates with the parent
bank, the coordinating of reporting requirements of
National banks, and accrual accounting.
The first draft was distributed to all banks under our
jurisdiction for comment in the early part of 1967. It
was also placed in the Federal Register to give other
interested parties the same opportunity. The Office
received approximately 250 responses offering various
suggestions. The majority of the respondents favored
our objective.
On May 1 of last year, Comptroller of the Currency
William B. Camp put into effect the new accounting
and reporting regulation for National banks (formally
known as Part 18—Form and Content of Financial
Statements). In our Office, we believe that the promulgation of this regulation represents a giant step forward in bank accounting and reporting. Most of the
comments made by bankers, financial journalists, and
financial analysts likewise attribute great importance
to our regulation.
The rationale underlying the entire regulation is
that stockholders of all National banks have a right
to obtain freely such information as is necessary to
evaluate the operations and the condition of their
institutions. It appeared to us that the most appropriate
vehicle to insure that such information would be freely
available was the bank annual report to stockholders.
Therefore, in contrast to other agencies' regulations
331-934—69

17




under the 1964 amendments to the Securities Exchange Act, every provision of the Comptroller's accounting regulation applies directly to the annual
report to stockholders. The annual report, then,
becomes the bank's required report under the
regulation.
The Comptroller's philosophy is that the widow with
$1,000 invested in the smallest bank in the country
has as much right to accurate information about her
investment as does the metropolitan financier with
many millions invested. Consequently, the Comptroller's regulation applies to all 4,800 National banks,
regardless of size or number of shareholders. It thus
goes far beyond the minimum requirements of the
1964 Act: under that Act, prior to May 1, 1967,
"covered" banks were those with more than 750 stockholders ; after that date the cutoff was 500 stockholders.
Approximately 500 of the 4,800 National banks are
"covered" banks by that criterion. Over 95 percent of
State banks have less than 500 stockholders, and thus
are not covered under the Federal Reserve's Regulation F or the FDIC's equivalent regulation.
With the advent of the Comptroller's regulation,
for the first time a Federal banking agency required
all the banks under its jurisdiction to file meaningful annual reports to stockholders. In broadest outline, our regulation prescribes detailed formats for a
balance sheet, statement of earnings, reconcilement
of capital, and reconcilement of reserves, each required
to be incorporated in the annual report to stockholders.
It also specifies a number of accounting methods and
procedures to be used in maintaining records and
preparing reports, such as accrual accounting and consolidation of subsidiaries.
Once it was determined that the Comptroller's
regulation should apply to all National banks, it was
apparent that our goal should be to secure sufficient
uniformity among bank reports to allow meaningful
comparisons, while still allowing a desirable degree
of management discretion in arriving at precise report
formats. This approach is best illustrated in the balance
sheet presented in the regulation. Twenty-eight numbered accounts are listed, some with a number of subitems. However, 12 specified accounts may be combined in a prescribed fashion with other accounts, if
the disappearing account has a value of less than 3
percent of total assets. For example, "obligations of
Federal agencies" may be combined with "other securities", and "mortgages payable" may be combined
with "funds borrowed". None of these combinations
are required. In fact, I should emphasize that the regulation throughout "specifies the form and minimum
251

content" of financial statements. The regulation enjoins management to furnish, in addition to the minimum information, "such further material information
as is necessary to make the required statements not
Accounting authorities, without exception, hold that
accrual accounting offers a more accurate and more
refined picture of the operations of a firm than does
cash accounting. The Comptroller's regulation not
only encourages accrual accounting by all National
banks, but also establishes a timetable which assures
significant progress toward that goal. All National
banks with $100 million in total resources must prepare
their reports for fiscal years beginning after December 31, 1967, on the basis of accrual accounting. A year
later the cutoff drops to $50 million in resources,
and to $25 million the following year. Thus, by 1970,
all National banks with $25 million or more in resources will be on accrual accounting.
Equally important, every National bank, regardless
of size, must either place its installment loans on the
accrual basis for fiscal years beginning in 1968, or
disclose, in a footnote to its balance sheet, the amount
of unearned income on installment loans carried in its
capital accounts. It is anticipated that this provision
will induce a number of smaller banks to convert—not,
I hasten to add, from National to State, but from a
cash to an accrual basis.
This may be an appropriate moment to acknowledge that we have received a few scattered complaints
from small National banks to the effect that they will
be at a competitive disadvantage relative to their small
State bank competitors, who need not make similar
disclosures. First, we are optimistic that we are both
on the side of the angels and with the wave of the
future in this matter; we would expect that the State
banks will be making similar reports, either voluntarily
or involuntarily, in the not too distant future. Second,
even in the interim before this happens, the Comptroller does not believe that the National banks will be
at a disadvantage. He has urged them to use their disclosure as an affirmative competitive weapon—as
demonstrable proof to their current and prospective
customers that they, at least, have nothing to hide.
Getting back to the accounting procedures described
in the regulation, National banks are required to consolidate all "majority-owned significant subsidiaries."
Significant subsidiaries are those in which either the
parent's investment exceeds 5 percent of the parent's
equity capital, or the parent's proportion of the subsidiary's gross operating revenue exceeds 5 percent of
the parent's gross operating revenue. All majority252




owned bank premises subsidiaries, whether or not meel
ing the test of significance, must be consolidated. Thi
requirement, in my opinion, is an important step i
the disclosure process. As you know, many banks hav
formed affiliated real estate companies which hav
incurred sizeable indebtedness upon bank premise;
Now this indebtedness will be disclosed. There wer
other situations where banks formed affiliate real estat
companies which also incurred mortgage indebtednes
upon the premises. After the indebtedness was incurrec
the affiliate was collapsed and title to the premise
was taken by the bank subject to the lien. In thes
situations, National banks are required to repoi
this indebtedness, even though a bank is not legal!
liable for the debt. National banks have the option c
consolidating nonsignificant, majority-owned subsic
iaries if they are considered an integral unit wit
the parent. Alternative methods of handling minorit
interests in consolidated subsidiaries are provided i:
the regulation. With regard to income from foreig:
subsidiaries and foreign branches, it shall be report©
only when remittable to the parent bank, unless th
parent consolidates each item of revenue and expenst
The regulation prescribes that any premium on a:
investment security be amortized by charges to opei
ating income in such a manner that it be entire!
extinguished at or before maturity of the security
Banks are given the option of accreting bond discount
If they do so, and the amount of accretion is 5 pei
cent or more of bond income, the amount of net opei
ating income after taxes resulting from accretion mus
be disclosed in the statement of earnings. This provi
sion illustrates well how the regulation seeks to achiev
adequate disclosure within the framework of a desira
ble degree of management discretion.
Banks which maintain a trading account may repoi
their securities in the account on the same basis as i
used for tax purposes. A bank which values its tradin
account securities at cost must show their market valu
in a footnote to the balance sheet. If either the valu
of trading account securities exceeds 3 percent of tote
assets, or the trading account income exceeds 5 pei
cent of gross operating revenue (the two materialit
tests built into the regulation), the trading accoun
and its income must be separately reported on th
balance sheet and the statement of earnings. The re§
ulation conforms with traditional bank accounting i
requiring that securities profits and losses should b
reported after applicable income taxes as nonoperai
ing additions or deductions.
The Comptroller made a special effort to ease th
burden of the new accounting and reporting require

merits on medium-sized and small National banks.
The timetable for the changeover to a full accrual
basis, already discussed, is one illustration of this, since
it gives the medium-sized banks more time to prepare for the shift. Banks with less than $5 million in
total resources are given two options in connection
with the required financial statements. In lieu of the
prescribed format of the statement of earnings, these
small banks may elect to substitute the first eight items
of the Report of Income and Dividends. Second, these
same small banks may substitute the entire Report
of Income and Dividends, front and back, for the
statement of earnings and the reconcilement of capital
and reserves. The Income and Dividend Report must
be filed annually with the Comptroller by all National
banks. Thus, for those small National banks which
would find preparation of a second income statement
in a different format a burdensome task, the need to
do so is removed. On the other hand, the right of the
stockholders of small banks to secure meaningful income data is respected; the Report of Income and
Dividends per se has not been public information
heretofore, nor has there been, except for the comparatively few "covered" banks, any other provision
to require income data to be furnished to bank stockholders.
The prescribed statement of earnings sets forth the
principal income and expense items separately. Management is given the option of combining any item not
meeting the regulation's materiality test with the "other
income" or "other expense" accounts, as appropriate.
The figure for net operating earnings before income
tax is stated, followed by the deduction of income
taxes applicable to net earnings. The computation and
deduction of this applicable tax is the principal departure in the Comptroller's prescribed statement of
earnings from the aforementioned Report of Income
and Dividends (I and D Report). Since all National
banks with more than $5 million in total resources
must compute and report this applicable taxfigure,and
since a number of these banks are on a cash basis for
tax purposes, it was necessary to develop an accounting and reporting procedure to be applied to the statement of earnings of these banks. In essence, this procedure allows such banks to defer and capitalize the
previous year's tax expense. This deferred expense,
to be shown as a separate item in the balance sheet, is
to be charged to undivided profits over a period of
up to 10 years.
The statement of earnings in the Comptroller's regulation calls for the disclosure of net operating earnings
per share. Following additions and deductions of non-




operating transactions, on a net after tax basis, the
statement concludes with the amount transferred to
the undivided profits account.
The regulation also requires the reconcilement of
book capital accounts, and perhaps more importantly,
requires the reconcilement of valuation and contingency reserves. It is our opinion that shareholders
should be fully informed with respect to valuation and
contingency reserves. In many cases, valuation reserves
have been built up without regard to the possible loss
or value depreciation in the assets. Consequently, in
many cases, valuation reserves are really capital and
the shareholder is entitled to receive full disclosure in
order to evaluate his investment. We are requiring current year and previous year reconcilements on reserve
for loan losses pursuant to the Internal Revenue Service's formula, other valuation reserves on loans,
valuation reserves on securities, and other contingency
reserves, whether they be a capital reserve or an interior
reserve. The reconcilement must be shown on a gross
basis, and therefore, it will be disclosed to the reader
the amount of losses charged, recoveries credited, and
the transfers to and from these reserve accounts.
We realize our regulation is not perfect, both from
the standpoint of accounting theory and full disclosure
principles. However, we believe it is a forward step in
the evolutionary process toward fuller disclosure.
Apparently, The American Institute of Certified
Public Accountants thought it was quite imperfect. In
March of this year, this organization issued a document entitled "Audit of Banks." The publication set
forth certain accounting principles and statement formats, which must be adhered to if commercial bank
audits are to receive an unqualified certificate. Among
the more important proposals is the requirement that
a provision be made above the line for loan losses. If
the provision so determined exceeds the Treasury formula, the future tax benefit must be recorded as an
asset. If the provision so determined is less than the
Treasury formula, the additional provision less related
tax benefit must be credited to undivided profits, and
included in the capital funds section of the balance
sheet. The amount "above the line" would be based on
management's judgment and herein we feel the
trouble lies.
Annual loan loss figures could be juggled with the
result that comparability of net operating income
figures would lose its meaningfulness. The Comptroller's Office recognizes the principle that a provision for loan losses in the current period would be a
desirable and fair presentation of the results of that
period. However, the solutions recommended, due to
253

their lack of uniformity, detract from the desired end.
It is the opinion of the Comptroller's Office that conformity and general acceptance are better served by a
"below the line after tax provision," as prescribed by
the supervisory agencies and applicable to all banks
as allowed by the Internal Revenue Service.
Similarly, we are concerned over the accountant's
position supporting the deferral and amortization
method of accounting for certain securities gains and
losses. The Committee's document indicates that either
the completed transaction theory or the deferral and
amortization method is acceptable.
We take, along with the other regulatory agencies,
strong opposition to the deferral and amortization
method. We do not feel it gives an accurate picture
of what has happened to a bank's earnings during the
year on a completed transaction basis, nor of a bank's
sound net worth at the end of a year. The capitalization of losses as an asset is particularly disturbing, as in
our opinion, it overstates the net worth of the bank,
and the deferred losses cannot be used to liquidate
depositors' claims. In our opinion, deferred losses can
represent only a claim against capital and are not a
realizable asset. We find it difficult to see that the deferral and amortization method better informs either
the investor or the depositor, except perhaps through
a study of the trends on yields and investments. When
securities proceeds or losses are realized and reported
through the income statement as is now required, the
capital accounts reflect the shareholder's equity and
the depositors margin of protection as of the statement
date.
Also, we cannot understand why it is advocated that
this accounting concept be applied to securities transactions only. If profits and losses represent adjustments
of yields, it is not clear why a conversion of funds from
investments into loans would represent the same adjustment from a total performance standpoint.
There are other practical difficulties. Many large
banks use the pooled fund approach in asset management. There is a constant adjustment taking place in
the securities portfolio to take care of liquidity requirements, seasonal and cyclical fluctuations, and investment considerations. In most cases, these are elements
of serious consideration involved in a decision to sell or
buy securities. This makes precise identification nebulous, and it seems at best that earnings reported would
be an approximation of circumstances, with considerable latitude for choices, whichever alternative is most
favorable for an individual bank from a reporting
standpoint.
Also, the proposed reform contemplates a change in
254




the income statement where emphasis would be placed
on the "bottom line" or net income figure. The document states the income statement must include actual
gains and losses, as well as regular earnings. There is
also an earnings data per share section, which would
not only include net operating earnings, but also securities gains and losses, income before extraordinary
items, extraordinary items, and finally net income per
share, as well.
I think the Comptroller's Office, in formulating its
accounting regulation, was primarily interested in disclosure rather than the form of presentation. I might
mention that at the annual shareholders meeting of
Morgan Guaranty, a stockholder asked the Chairman
to comment on the suggestion that earnings per share
be computed to reflect nonoperating additions and
deductions, rather than being computed on net earnings as it is at present. The Chairman noted that Morgan Guaranty, in compliance with the Federal Reserve
Board requirements, uses the latter method. He said
the important thing is that all the relevant information
is made available, so that stockholders and others "can
work it out either way they want to." I think this statement pretty much expresses the opinion of our Office,
at least for the present.
While the proposed income statement is not entirely
without merit, we are inclined to believe, together
with many bankers, that such a presentation might
limit theflexibilityof banks with respect to making investment moves for tax advantages. If the average
shareholder could be educated to the fact that such
moves are highly desirable, and accrue to his benefit
notwithstanding the fact that net income per share
might fluctuate violently, the proposition might be
more palatable.
As I mentioned earlier, bank accounting and reporting seems to be going through an evolutionary process.
Considerable progress has been made in the past few
years, but we believe it is equally important to proceed
with due deliberation in order that the responsibilities
of the industry, the regulatory authorities, and the accounting profession receive careful consideration before each modification is effected.
REMARKS OF WILLIAM B. CAMP, COMPTROLLER OF
THE CURRENCY, BEFORE THE NATIONAL BANK
DIVISION OF THE AMERICAN BANKERS ASSOCIATION
94TH ANNUAL CONVENTION, CHICAGO, ILL V SEPTEMBER 30, 1968

The phenomenal achievements of our economy are
thought by many to rest more on the great national
markets we have opened to all forms of enterprise

than upon any other single factor. The advances in
communication and transportation we have experienced have made this, more than ever, a reality.
Under the influence of this freedom, we have developed the arts of specialization more highly than
any other Nation. The technological advances which
have been made possible by the strength of our economy have enabled us to explore beyond the boundaries
of Earth.
We are witnessing today comparable efforts on the
part of the banking industry—throughout the Nation—
to realize more fully its highly specialized capacity to
perform a broader range of financial functions so
essential to the further progress of our economy. These
responses to long-neglected opportunities have spurred
the introduction of many new banking services and
facilities—and have provoked some to question the appropriate role of the banking system in our society.
What, exactly, it is being asked, is the proper scope of
the business of banking?
As you gentlemen know, the Federal Reserve Board
recently announced a change in its position on some
of the significant banking issues of our time. I was indeed very pleased by this announcement, for the questions of public policy that underlie these issues are vital
to the future of banking, and it is well that bankers and
bank supervisors should be alert to their importance.
The form of change is often confused with its substance, and this is often encouraged by opponents who
find the form a more plausible and convenient target
than the substance itself. Precisely such a situation now
prevails in the field of banking.
One of the most notable phenomena of recent years
has been the lateral expansion of banking into allied
fields of finance. To carry out this expansion, an increasing number of banks have found it more suitable and more efficient to form one-bank holding
companies. Rivals who have found little success in
attacking the substantive basis of these expanded activities have now in some instances deployed their forces
against the organizational measure employed in their
performance. But there should be no mistake about
their real objective.
These developments in banking have coincided with
a greatly expanded use of the conglomerate form of
organization in other fields of enterprise. But it is an
interesting fact that the acquisition of banks by nonfinancial organizations has not aroused the same opposition as comparable actions on the part of banks.
Most serious in its implications is the suggestion that
one-bank holding companies should come under the
controls of the holding company act.




That act, as you know, was designed to place under
direct public control the acquisition of two or more
banks by a bank holding company. Its purpose was to
forestall the use of the holding company device to circumvent other existing limitations on the merger of
banks. Its aim was to preserve—not to destroy—banking competition. The one-bank holding company, on
the other hand, is designed to enable banks to compete
more effectively in offering new forms of financial
service.
If the locus and form of bank regulation were to
be shifted merely because of the organizational measures adopted in order to gain greater efficiency of
operations in a widening field of endeavors, the effect
would be to penalize many of those banks which have
been most energetic in responding to the burgeoning
needs of the public for expanded financial services.
They would suffer not only an added layer of public
controls, but they would be subjected to supervision
under a statute that presumes their efforts might be
anticompetitive, and by an agency whose outlook and
personnel, except of recent date, is principally concerned with matters of monetary policy. I believe it is
fair to say that such a move would be unlikely to serve
the public interest—and, indeed, might damage it
seriously.
The holding company device is not in itself harmful
to the public interest—but only in some of the ways in
which it may be used. Indeed, if this device represents
the most effective and most efficient means of undertaking a prudent and useful expansion of banking services, it should be lauded as beneficial to the public
interest. Specific controls have already been imposed
on the use of holding companies to effect the merger of
competing banks. But this is obviously not the issue
that concerns those who favor the regulation of onebank holding companies. What does concern them is
the desire to retard the expansion of banks into related
financial fields by blocking the use of one of the more
effective devices that may be utilized for this purpose.
That is the real target, and we must be aware of that
fact.
For several years now, the banking industry has lived
with a wide assortment of efforts to contain its reborn
initiative and enterprise. Some have questioned its
lawful powers—others, its probity and wisdom. But
this has always been the burden of those who seek to
explore new fields of endeavor, to test new markets for
their services. Even thought we applaud innovation and
ingenuity—at least in principle—as perhaps no other
nation, new rivals are seldom welcomed. And where

255

an industry is under public control, added means are
at hand to still the forces of enterprise.
But the record of banking within the past few years
speaks for itself on the policy of allowing bankers broad
discretion in selecting the services they wish to offer
and the means of doing so, subject only to the limiting requirement of maintaining solvency and liquidity
and the confinement of their efforts to related fields of
finance. A revitalized banking industry, released from
longstanding fetishes, has enormously expanded the
range and depth of its financial services to the public,
and it has accomplished this with a constantly rising
rate of earnings, which is the ultimate test of the judgment it has exercised.
I have no doubt that some will continue to question
the wisdom of the course that has been chosen, and
that efforts will be sustained to divert or restrain the
competitive power of the banking industry. Nor do I
anticipate that the decisions of bankers will magically
become free of error. But I do believe that it will continuously become more difficult to argue with the
fact that bankers will demonstrate their capacity to
enlarge the scope of their activities prudently, and
without impairment of the vital necessity to preserve
their solvency and liquidity. Indeed, the diversification of their activities, and their greater responsiveness
to changing demands, should insure an even greater
degree of stability in their performance.
It is of the utmost concern to the Nation that this
should prove to be so. We have never stood in greater
need of a maximum performance by our private economy. And I do not need to remind this audience of the
critical role that banking plays in achieving this performance. What I should like to emphasize is that the
hard-won new spirit of initiative in banking may not
be self-regenerative—it is likely to require deliberate
design and persistent effort. Bankers must assert their
determination to hold the gains that have been
achieved, and continue the enlargement of their activities as new opportunities appear.
The banking system of our country comprises, potentially, the most effective and most efficient means of
bringing to the broadest range of consumers the entire
spectrum of financial services, and none of these
services which it is safe and prudent to offer should
be beyond the authority of banks. If bankers do not
speak up in defense of this principle, it may well be
impaired or eroded. Such efforts would be fully consonant with the philosophy of our private enterprise
system, which calls for the fullest and most efficient use
of our productive capacity.
We have come a long way in the past few years in
256




realizing these aims for banking. New markets have
been opened, new services have been introduced—but,
more significantly, the banking industry has adopted a
new attitude towards its responsibilities and its opportunities. It has set its goals high in terms of the needs
of today and the requirements of the future. It is this
pioneering spirit—this vision to see what lies ahead—
that needs most to be preserved and encouraged if the
banking industry is to fulfill its potential for service to
the Nation.
I am happy to be able to report that the National
banking system, indeed the entire commercial banking
system of this country, is in sound condition, enthusiastic and alert to its opportunities, and fully capable, in
my opinion, of meeting the many challenges of our
changing society. This is eloquent testimony to the
foresight and enterprise felt throughout the financial
community, a development that should be commended
and encouraged.
In the years to come, the technological and social
changes we are likely to experience, and the burdens
this Nation may have to assume, portend to exceed any
we have known. An alert, responsive, and fully effective banking system will be indispensable if we are
to meet these new challenges which lie ahead. We
should not allow ourselves to be diverted from this
most urgent task.
REMARKS OF DEAN E. MILLER, DEPUTY COMPTROLLEF
OF THE CURRENCY FOR TRUSTS, BEFORE THI
WESTERN REGIONAL CONFERENCE OF THE AMERICAN BANKERS ASSOCIATION, PHOENIX, ARIZ., OCTOBER 10, 1968

A favorite topic of discussion and reflection these
days is performance. The preoccupation with this
subject arguably has a number of roots, I suppose, bu1
you can boil down most of them to "competition.5
Competition is a wonderful thing. It is the basis o:
our economic system. We have a large and well-estab
lished division of our Justice Department, and ai
extensive system of statutes and rules of common law
all devoted to the preservation and encouragement o
competition. It plays a very important part in the
activities of trust departments, and rightfully so. Anc
today, more than ever before, we are observing thes<
pressures for performance, as a result of the competi
tive forces among banks, and also between banks am
their nonbanking rivals.
One of the aspects of this increasing emphasis upoi
performance which is being manifested, and ver
closely watched by us, concerns the operation of collec

tive investment funds. This is true both as to pooled
employee benefit funds and traditional common trust
funds. In both cases, although certainly much more
so as to the former, the pressure of the competitor
for the business represented by various trust department fiduciary accounts has led to an emphasis upon
performance of these funds. In many respects this is
very beneficial. Attempts to improve performance
based upon more effective investment analysis, or
increased efficiencies, for example, contribute significantly and beneficially to the health of trust departments, as well as to their competitive position. On the
other hand, this drive could lead down roads which are
best not traveled by a corporate fiduciary.
Now please understand what I am saying. I do not
think that bank trust departments that get involved in
this performance drive are heading down the road
to ruin. Rather, I am suggesting to you the possibility
that this may be one of the alternatives ahead if you
choose to make the wrong turn at one of the forks in
the road.
In the performance of our regulatory activities with
reference to collective investment funds—with both
traditional common trust funds and pooled employee
benefit trusts—we have observed the development by
many banks of funds designed to permit these banks
to better serve their customers, and in so doing, meet
the claims, as well as the actual services being performed, by the competition. The various types of
special purpose funds have now become common. The
newest is the so-called "special situation fund," which
in itself has achieved a fairly broad measure of acceptance. We have a number of plans for such funds on
file in our Office, and our information is that there
are others in existence. It is somewhat startling to one
accustomed to traditionalistic trust patterns of thought,
as a bank supervisor must be, to read some of the investment clauses being written into such funds. A word
which continually leaps out at us is the prudent man's
antithesis, "speculative". In some cases, the word itself may not appear, but the sum total of the words
used to describe the permissible investments amounts
to the same thing. The investment authdrities
are so broadly drawn that limitations of any kind appear to be absent. Now I am aware that in the usual
case the actual investments made for an account are
much more conservative than the authority of the
governing instrument would permit. I would hope that
such is the case in these particular funds. As a matter
of fact, I know that it is, presently.
Accordingly, I am not here today to attempt to
state from my "infinite wisdom" that this type of a




pooled employee benefit fund, or this type of a traditional common trust, is inherently evil, or even something which banks should eschew. I would like to indicate that I am curious to know if they trouble you.
Further, I would respectfully submit that it might be a
good thing for you, collectively and individually, to
step back occasionally and see where competitive pressures may be leading you in this field.
If, as many of you may have already concluded, or
are apt to conclude in the not too far distant future,
these special situation funds are a device which must
be developed in increasing measure in order to permit
you to meet the competition, it is obvious that there
should be a certain amount of restraint and judgment
exercised in carrying out this resolve. We have put into
effect this conclusion by suggesting to banks which have
submitted to us plans including the word "speculative"
in their clauses, that that word be removed. A concomitant step is to suggest, in the cases of plans which
have provisions which add up to the same result, that
appropriate amendments be made. I now ask you, is
this being antediluvian? Is it letting form prevail over
substance? It is my belief that rather, it is a useful
supplement to effective self-control, to require banks
not to establish instruments which make the sky the
limit.
The foregoing are no more than limited judgments
upon my part, which are based upon my own estimate
of what might occur somewhere down the road. They
are not, I once again emphasize, based upon what
is here today. I solicit your comments and your advice
in this matter.
REMARKS OF JOHN D. GWIN, DEPUTY COMPTROLLER
OF THE CURRENCY, BEFORE THE FALL CONVENTION
OF THE NEW HAMPSHIRE BANKERS ASSOCIATION,
WHITEFIELD, N.H., OCTOBER 18, 1968

Bank Conversions and The Dual Banking System
During the past century of our banking history, no
single subject has attracted more attention, or provoked
more discussion, than the dual nature of our banking
system. This is not surprising, since it represents one
aspect of the continuing effort to mark out and define
the respective roles of our State and Federal Governments in our unique system of governmental powers.
Recently, the discussion of this issue has centered on
the conversion of State banks to National charters. But
the problem has its origin in the very beginnings of
our Federal Government, and particularly in the formative years of our National banking system.
257

Although federally chartered banks originated some
50 years earlier, it was not until more than a century
ago that provision was made for a full-fledged system
of National banks. The initial purpose was to assure
a nationally acceptable form of currency to serve the
growing needs of the young Nation, as well as to aid
in financing the Civil War, but it was also believed by
many that the National system would soon displace the
various State banking systems.
This, however, was not to occur. The rise of deposit banking and the growing role of checks as instruments of monetary transfers assured the survival of
State banks, and they continued to flourish alongside
the National banks. There is a lesson to learn in this
early experience with our dual banking system.
Over the years, these two systems have varied greatly
in their prominence and in the rate of their growth.
Essentially, these differences have reflected variations
.in the capability of adapting to the changing needs
and diversified requirements for the services of these
institutions. In part, these differences have been the
result of limitations of law—in part, they have been influenced by regulatory attitudes. But in all cases, they
have affected the powers of banks to adapt to the needs
of the times.
We know from our experience that there are certain clear advantages in the dual banking system. And it
is these advantages, rather than any deliberate policy,
that accounts for the acceptance and survival of the
system. Indeed, at the time of the founding of the National banking system, quite the opposite policy was envisioned and even sought.
The greaterflexibilityof choice is the essential factor
that underlies the benefits of the dual banking system.
States that are dissatisfied with the services provided
or the policies followed by National banks may charter
their own banks—and the National banking authority
has a similar choice where the aims of national policy
are not entirely fulfilled by the policies of the State
authorities. Moreover, individual banks also have an
alternative if they believe they can function more
effectively or more to their liking under one or the
other form of charter.
This greater flexibility can only work to the benefit
of the public. It improves the chance that banking
services will not arbitrarily be withheld where there is
a clear case of need that can be served by a qualified
applicant. Thus, it enhances the attraction of the banking industry to men of enterprise and capital—surely
a quality that is in keeping with the traditions of our
private enterprise system, and one that is most difficult
to sustain in any regulated industry.
258




The recent conversion of several State banks to Na
tional charters has given a new dimension to the dis
cussion of the dual banking system—a dimension tha
I believe runs counter to its very purpose and wouli
defeat its essential objective. Some are arguing tha
such conversions will tend to alter the equality or ba]
ance of the two systems, with the implication that sue]
equality or balance was an avowed purpose of the dua
banking system, and is itself sound public policy
Nothing in either the history or purpose of the dua
banking system would justify such a contentior
Equality or balance are not qualities that fit the philoi
ophy of a private enterprise system. They can b
achieved only through the iron hand of centralize*
control, and they favor the least efficient and leas
effective of competitors.
If there is one supreme advantage that we deriv
from our dual banking system, it is the freedom c
the regulatory authorities to adapt to the needs of th
times as they see them, and the equal freedom of bani
with new ideas to seek a hearing at more than on
source. This is not an inconsiderable advantage in
regulated industry, where the forces of change ar
almost always impeded by the bureaucratic procesi
If this advantage were removed, the public benefil
of the dual banking system would be immeasurabl
impaired.
Contrary to the beliefs of those who would limi
the rights of conversion, there is no reason why th
State and National banking authorities should alwa)
adopt the same policies in all matters. Indeed, in
nation distinguished by its diversity, there is ever
reason for allowing the State authorities to accorr.
modate their policies to special local needs where the
consider it necessary. And there is equal reason fc
permitting the National authorities to take account c
broader national considerations in fashioning thei
policies wherever that is required. To do otherwis
would be to undermine the most fundamental reaso:
for retaining our two separate systems of bankin
institutions.
The outlooks and compulsions to which these tw
sets fcf authorities respond are certain to differ, an
it would be a disservice to the public to force them t
correspond. Moreover, there is no monopoly of wisdor
or creativity. During the history of our banking systen
sources of innovation have appeared in both our Stat
and National systems—and all have benefited fror
these efforts to make our banks more effective instn
ments in serving our society. In recent years, much c
the initial efforts to modernize banking regulation ha\
taken place at the Federal level—but as often as nc

the recognition of the need for change has come from
the State authorities. What is important, however, is
not the source of change, but the likelihood that
needed responses to public needs will be enormously
enhanced if both systems remain independent.
Far from being an indication of danger to the dual
system, the conversions of recent years are evidence
that it is working as it should. The revisions of Federal
regulation have inspired in many States a thoroughgoing review of State controls, and these, in turn, have
brought extensive recasting of State laws to conform
to the needs of the times. To anyone who has observed
the history of our banking system, this must surely be
accounted a desirable force.
I cannot emphasize too insistently the importance
of this consideration. The banking industry provides
the critical financial muscle of much of our economic
progress, and, perhaps more important, the guidance
and encouragement that is required for such progress.
The attitudes of bankers—their foresight and their
powers—are thus vital to our future. Laggard or unresponsive regulatory policies will blunt the efforts
of bankers to meet their responsibilities. Where this
occurs, we will, as a Nation, fail to achieve the gains of
which we are capable. The effects may not always
be clearly discernible, but they are nonetheless certain.
The rise of rival financial institutions to meet the deficiencies of regulatory and banking initiative during
the past three decades makes this unmistakably clear.
I agree with the ringing defenses and praise of the
dual banking system that we have heard in the past few
years. But I do not share the view that the preservation
of this system requires that we safeguard the least progressive of these systems against the forces of progress.
This is a counsel not only of despair, but of destruction.
For if our banking system, which is the best equipped
of our financial institutions to provide many of the
financial services our economy requires, fails in its
tasks, we may be certain that others—less wellequipped—will take over this responsibility.
It is ironic that in the name of strengthening the dual
banking system, some are exhorting us to diminish its
flexibility and responsiveness to the public need, at
precisely the time that these qualities are required
more than ever to assure its effectiveness—and even its
survival. For it should be evident to all of us that the
pace of technological change and financial sophistication has greatly accelerated in recent years. These developments place an ever-increasing burden on banks
to adjust their operations to the needs and opportunities of the present and the changing future. This cannot be done if the regulatory authorities or the banks




are complacent or backward-looking in their attitudes.
The dual banking system has a unique contribution
to make in fortifying the adaptability and forward
progress of the banking industry. But it can do so only
if it is not shackled by ties to the past, or by efforts to
impose edicts of conformity. What we need is greater—
not less—freedom for those with imagination and
vision to see what lies ahead, and to move with vigor
to realize these potentials.
REMARKS OF DEAN E. MILLER, DEPUTY COMPTROLLER
OF THE CURRENCY FOR TRUSTS, BEFORE THE MIDCONTINENT TRUST CONFERENCE OF THE AMERICAN
BANKERS ASSOCIATION, DETROIT, MICH., DECEMBER 5, 1968

A Venture into the Law of Trusts
The law of trusts is one of our greatest legacies from
England. Today it remains in large part the common
law of our States, only being supplemented by statutory enactments in specific areas. Largely for this reason, this body of laws is often overlooked by people
who should know better. Because there is no Federal
law to which you can turn in the U.S. Code Annotated,
and read the prohibitions and duties in definite black
and white, there have been those who have concluded
that there is no law in this area. This conclusion is only
strengthened in the eyes of some of these mistaken beholders because the law of trusts for any locality is the
law of that State, which will only in small measure be
found on the statute books, and which on any given
question may or may not be the subject of a decision of
the courts of the State. To find what the law is in a
specific fact situation, one must quite often refer to
the decisions of other States, and quite often, to such
authorities as the Restatement of the Law of Trusts or
the commentators, such as Scott or Bogart. I am sure
that it is largely because of these characteristics of our
law of trusts that its effect, and even its presence, has
escaped some contemporary observers, including members of the legal profession. Let me illustrate.
We have all been aware of the movements in this
country for pension fund reform. We have seen proposals which would establish fiduciary standards for
the administration of employee benefit trusts, which
would impose Federal limitations upon the investment
discretion of the trustees and administrators of certain
of these funds, and which would establish in various
Federal agencies, such as the Department of Labor
or even a new and specialized commission, an increased
measure of supervisory and visitorial power over these

259

funds. The justifications which have been advanced
for these proposals have included the conclusions that
there is no law to protect the holders of beneficial interests in these funds, that there is no legal machinery for
protecting the rights of these persons, and that there is
no agency on the State or national level which is protecting these interests. I believe that these conclusions,
as they are applicable to banks, overlook the law of
trusts, as well as the role of bank examination in this
picture.
Further, where the law of trusts is given attention,
it is often misconstrued. Let me again illustrate: One
notable failing, both within and without the legal
profession, has been to equate the law of contracts
with the law of trusts. The fact that two parties can
contract for virtually any subject, pursuant to any
terms, so long as not contrary to public policy, has been
wrongly believed to have equal applicability in the
law of trusts. This is not so. The law of trusts is much
stricter. To quote Scott "* * * certain duties and
certain standards of conduct are applicable to the relationship between trustee and beneficiaries * * *
these are so necessarily inherent in the relation that
they cannot be dispensed with by any provision in the
trust instruments." Let me advance some legal propositions further to illuminate this point. I think it is basic
that one cannot purport to establish a trust and then
read into the governing instrument provisions which
destroy its essential character as a trust. When, because
of broadly drawn investment authorizations and exculpatory clauses, the trustee asserts the authority to
act, or the absence of responsibility to act, in a manner
so as to negate the very purpose of the trust itself,
it is giving those provisions, however broad or specific,
an improper interpretation. Every clause of a governing trust instrument—every authority given the trustee
or to outsiders, and every exculpatory provision therefor—must be construed and limited in the light of the
overall purpose of the governing instrument. One
simply cannot write into a trust a provision which
would be contrary to its overall purpose, no matter how
hard one tries. All clauses in governing trust instruments must be construed with this in mind.
Let us examine these general propositions in the
specific context of employee benefit trusts. One type
of such trusts which has been very popular among
some employers and some banks has been what we
refer to as the direction trust. A direction pension or
profit sharing trust may take many forms. The governing instrument may provide that the trustee shall have
investment authority, but receive advice from an outside group. It may give the outside group the power to
260




veto investment decisions made by the trustee. Or it
could flatly give all investment authority to the outsider. Various refinements of these basic forms have
been devised. Usually, there will also be an exculpatory clause, exonerating the trustee from all liability
for complying with directions received from the powerholder. The net result, in any event, is to have someone other than the trustee bank making some, or all,
of the fund's investment decisions. The powerholder
may be a professional advisor. Usually, however, the
holder of the power to direct in this type of trust is a
committee appointed by the employer. The justifications which I have seen given for the establishment of
this type of trust, rather than with the bank having
full authority, are many. But whatever they may be,
it is apparent to me that the potential for making investment decisions which are not in strict accordance
with the exclusive benefit of the employees, is increased. The employer-management oriented powerholder is not an investment expert comparable to the
bank professional. Neither is he likely to have the
familiarity of the professional fiduciary with the niceties of trust law with respect to the strict loyalty, which
is owed to the trust in the conflict of interest position
which it occupies. Thus, I believe that it is in such a
trust that there exists the greatest potential for abuse
of the interests of the employees. For this reason I will
zero in on these trusts this morning.
This brings us to the salient point of my inquiry.
What is the law with respect to these direction trusts?
Does this potential for abuse have any means of control or remedy? If the answer here is yes (as I will
conclude in about 20 minutes), I believe it will a
fortiori be the same as to all other variations of employee benefit trusts in our banks. Suppose the employer-powerholder directs an investment in its stock,
or its bonds, or perhaps in real estate, to be leased to
it. Suppose further that the governing instrument specifically authorizes this type of transaction. What is
the duty of the trustee in the various possible fact situations which may be present? Let us now venture into
the law of trusts to answer this question.
Section 185 of the Restatement of Trusts is an excellent point of departure. It reads:
If under the terms of the trust a person has power to control the action of the trustee in certain respects, the trustee
is under a duty to act in accordance with the exercise of such
power, unless the attempted exercise of the power violates
the terms of the trust or is a violation of a fiduciary duty to
which such person is subject in the exercise of the power.

So we begin with the proposition that the trustee is
under a duty to comply with a direction from the

powerholder. Indeed, he is liable if he wrongfully refuses to do so. What are the exceptions? If the direction violates the terms of the trust, then there is no
duty to comply. Presumably this refers to a direction
clearly contrary to express provisions of the governing
instrument. Obviously, in such a case, a trustee should
not be exonerated for complying. But suppose the
direction is not contrary to the express terms of the
trust, but does appear to be at variance with its intent.
Here, it might be helpful to look also at the other exception in the quoted portion of the Restatement. If the
attempted exercise is a violation of a fiduciary duty to
which the powerholder is subject, then the duty to comply is vitiated. When is the powerholder subject to a
fiduciary duty? Scott puts it this way:
The holder of the power is subject to liability for the
exercise or nonexercise of the power only if he holds it as a
fiduciary and not solely for his own benefit. It is a question of
interpretation of the trust instrument in the light of all the
circumstances whether the power is conferred upon him for
his sole benefit or for the benefit of the beneficiaries of the
trust * * * .

This takes us into an inquiry as to for whose benefit the
employer committee holds its power to direct investments. The answer would appear obvious. Any qualifying pension or profit sharing trust must be operated
for the exclusive benefit of the employees. This is a
requirement of the Internal Revenue Code, and is a
standard provision of employee benefit trusts and plans.
This requirement has significance other than simply
for purposes of compliance with the Internal Revenue
Code—it is a provision of the governing instrument
which must be given effect and interpreted according
to the law of trusts. And in so doing, it is clear to us
that it means that powers given under such a governing instrument must only be used for the benefit of
the employees, who are the beneficiaries of the trust.
This being so, the powerholder is a fiduciary.
What are the duties of the trustee where the powerholder is subject to fiduciary obligations? Let us return
to the Restatement:
If the power is for the benefit of someone other than the
holder of the power, the holder of the power is subject to a
fiduciary duty in the exercise of the power. In such a case
the trustee is under a duty similar to his duty with respect
to the action of a co-trustee * * * If the trustee has reason
to suspect that the holder of a power is attempting to exercise it in violation of a fiduciary duty to which the holder is
subject in the exercise of the power, the trustee is under a
duty not to comply, and may be liable if he does comply * * *

According to the Restatement, therefore, the powerholder and the trustee stand in the position of
co-trustees.




Suppose the governing instrument contains an exculpatory clause, exonerating the trustee from liability
for following any directions received from the holder.
Will this effectively excuse the trustee from a duty
which might otherwise arise? The doctrine has become
established that such exculpatory provisions are strictly
construed, and particularly if the trustee is a professional fiduciary. It is also established that any such
clauses must be interpreted in a manner consistent with
the purposes of the trust. And they will not be enforced if contrary to public policy. Applying these
principles to our supposititious case, it would appear
that the exculpatory clause would be of questionable
assistance to a trustee bank. Assuming the receipt of a
direction to make an investment which involves a
breach of duty on the part of the powerholder, the
trustee would be participating in the breach of trust
if he were to accede. It would appear unrealistic, to say
the least, to read an exculpatory clause which sought
to excuse compliance with such a direction as being
consistent with the purpose of the trust agreement.
Further, it would appear to be against public policy to
give effect to a clause which forgave such a breach of
trust. The effect of an exculpatory clause in a direction trust, I conclude, is merely to confirm the authority of the trustee bank to act in accordance with
proper directions from the powerholder.
What then would constitute a direction involving a
breach of duty by the powerholder? I would think that
this would occur in any direction involving a conflict
of interest, if the proposed investment was not of trust
quality, involved an undue concentration, or otherwise
was contrary to the interest of the employees. In such
a case the powerholder is not acting for the exclusive
benefit of the employees, but for itself. Further, a provision giving express authority would make no difference, for it must, as we have seen, be read in the context
of the purpose of the trust, and not be construed
so as to subvert the purpose of the trust. Thus, it would
appear that a pension fund could not be effectively authorized to invest wholly, or even predominantly, in securities of the employer, for example.
A different result may be indicated, however, with
respect to a profit sharing trust. Here, the purpose is
to permit the employee to share in the profits of the
enterprise, thus increasing a sense of belonging, with
the corresponding incentives for greater performance
and efficiency which result. This purpose is furthered,
to a point, when such a trust invests in stock or obligations of the employer. The knowledge that the size of
his profit sharing fund depends in part upon his continuing performance produces an incentive which will

261

persist over the years. Thus, investments of this type
of trust in company-connected media are consistent
with the purposes of the trust, up to a point. But it is
unreasonable and contrary to the employee's interests
to subject all of his share of the profits, year after year,
to the continued vicissitudes of the economy, as well as
matters within the company which are not within his
control. This would be the result if the fund were
placed, year after year, 100 percent in company-oriented investments. It would appear, therefore, that a
certain amount of diversification is necessary to the
proper functioning of a profit sharing plan, for the
exclusive benefit of the employees.
The foregoing assumes that the company has both
viable pension and profit sharing trusts. If, however,
the employer has only established a profit sharing trust,
then a different case is made. In such a company, the
profit sharing trust comes to be regarded by the employees as a retirement plan. As a result, the equities
which militate in favor of diversification are much
stronger here. The justification for having the amount
which the employee ultimately receives depend upon
the continued growth and economic health of the company is much less compelling, when it is realized that
this is the sole benefit which he will receive upon retirement. Thus it may be that the law of trusts would compel one result if a company has both a pension and a
profit sharing trust, and a different one if it only has
established the latter. If so, then we have established
that the law has a very desirable flexibility. The determination of whether a breach has occurred would be
for the court in every case, based upon its individual
facts and circumstances.
What about the States where statutes have been
passed permitting a trustee to follow the direction of a
powerholder without liability? I would think that such
a statute should be given much the same effect as an exculpatory clause. It surely must be read in a manner
consistent with the purposes of the trust. It must be
presumed that it was not the intent of a legislature in
enacting such a statute to permit the subversion of the
purpose of any trust. Accordingly, I believe that these
statutes should be viewed as doing no more than adding
a statutory exculpatory clause, with the same effect as
should be given such a clause when it is written in a
governing instrument. The responsibility to not participate in any directions involving a breach of the fiduciary duty by the powerholder would remain.
I think I have made enough of a specific analysis to
prove my point. While I have, for purposes of time this
morning, confined my remarks to one specific applica262




tion of the law of trusts to employee benefit trusts, it
is my opinion that these principles which I have enumerated have applicability to all such trusts. The conclusion is that there presently exists in our great law
of trusts significant, perhaps sufficient, protection of
the employees' rights in bank-operated trusts, which
may furnish to employees a private remedy in the
courts and which will also be administered by the
State and National bank examiners, who systematically
seek out and obtain correction of breaches of fiduciary
duty.
I will now confess to you that I have conducted
this venture into the law of trusts this morning to enable me to advance a much broader and more general
proposition. Just as it is possible to conclude that there
may exist the basis and the flexibility in our law of
trusts, as administered by our bank examiners, to provide the necessary protections in this area, it is equally
susceptible of conclusion that the banking agencies may
be best suited to administer any needed supervisory
controls to banks. And this observation need not be confined to the employee benefit trust area. Bank examiners are not simply book balancers, as you know. These
days an examiner must conduct an extremely sophisticated inquiry, requiring a great versatility, to carry out
his task of maintaining the soundness of the banks.
In addition, however, the bank supervisor has the potential to perform other supervisory functions, without
a substantial change in present organizational setups.
But it would require an awareness, and as to some, a
change in attitude as to the role of bank examination.
I must confess that this would include a change in
attitude by some of the bank supervisors themselves,
who have demonstrated a curious reluctance to adapt
to emerging banking practices. A not infrequent reaction has been either to attempt to force new operations
into the preexisting regulatory patterns, or to avoid
facing the problem and take the posture that someone
else should supervise it. And experience has shown in
the latter case when a new regulator has entered the
scene, the standard approach has been to attempt to
force the banking activity into the confines of the preexisting regulatory scheme of the newcomer, with questionable improvement over the protection of the public
interest, which could have been provided by the banking agencies. The movement of banks collectively to invest managing agency accounts is a prime example.
Particularly, new developments in trust departments
have not been the subject of deep thought on the part
of bank supervisors. So a change in attitude is necessary.

But given this change, if cognizance is taken of these
capabilities in considering legislation affecting banking,
we can, I am sure, avoid creating more overlapping
rules, and overlapping administrators of those rules.
We will not have once again established a bureaucratic
duplication and waste. If reform or modification is
needed in the pension, indeed in any banking area,
therefore, we should first consider if it can supplement,
and not overlap, present control patterns—if it could
be made to mesh with present law and supervisory establishments. It is my firm belief that this can be
accomplished in the majority of cases. It may even be
that upon reflection, reforms or modifications will not
appear to be necessary. It is my hope that future legislative moves in this area reflect a sober and comprehensive study and consideration of these possibilities.
If so, we many have made a significant advance over
the past.
TESTIMONY OF WILLIAM B. CAMP, COMPTROLLER OF
THE CURRENCY, BEFORE THE SUBCOMMITTEE ON
LEGAL AND MONETARY AFFAIRS OF THE COMMITTEE
ON GOVERNMENT OPERATIONS, HOUSE OF REPRESENTATIVES, FEBRUARY 7, 1968

I appreciate the opportunity of appearing before
you today. I have with me Mr. Justin T. Watson,
Deputy Comptroller, and Mr. Abraham A. Dash,
Deputy Chief Counsel. We have been requested by
the Chairman to advise the Committee of the nature
and extent of the organized crime problems encountered by this agency; the manner with which they are
dealt; and the nature, extent, and results of the
agency's participation in the overall Federal effort
against organized crime.
As you know, the primary responsibility of the Office of the Comptroller of the Currency is the examination and supervision of the 4,800 National banks in the
United States. By law, every National bank must be
examined not less than three times every 2 years, and,
of course, as often as this Office may deem it necessary. A very important part of every National bank
examination is to determine if possible violations of
Federal, civil, and criminal laws have occurred. Any
possible violation of the Federal Criminal Code either
discovered by or reported to our examining force is
thoroughly investigated. A criminal report is promptly
prepared, containing all the available facts, and these
reports are referred to the appropriate United States
Attorney with a copy of each report going to the
Federal Bureau of Investigation and the Criminal Division of the Department of Justice.




This Office, we are happy to say, has a close working relationship with the Criminal Division of the
Department of Justice and the Federal Bureau of Investigation. Members of our staff are in frequent
communication with staff members of the Criminal
Division performing the necessary liaison that many
of our cases require. This liaison is with all the sections
of the Criminal Division, including the Organized
Crime and Racketeering Section, depending on the
nature of the case and type of criminal violation that
may be involved.
We are not aware of any organized crime problem
in the National banking system and know of no case
where individuals who are allegedly part of organized
crime have become involved in the ownership or management of a National bank. We also are not aware
of any information in the possession of the Organized
Crime and Racketeering Section of the Criminal Division indicating that there is any problem with organized crime in the National banking system.
It may be of interest to the Subcommittee to know
that in every application for a National bank charter,
the organizers and proposed officers and directors are
thoroughly checked out through Internal Revenue
Service, Federal Bureau of Investigation, and local
law enforcement offices. In cases when the ownership of
a National bank changes, or when there is a change
of senior officers of a National bank, we, when we
believe there is a reason, will also make, with the cooperation of other Federal and State authorities, a
very comprehensive check of those individuals.
We are, of course, fully prepared to do anything
within our powers to assist other Government agencies
if an organized crime problem should appear in our
area of responsibility. We wish to assure you that if
the Subcommittee has information concerning organized crime operating in any National bank, we
would, when apprised of such information, take the
necessary supervisory action.
TESTIMONY OF WILLIAM B. CAMP, COMPTROLLER OF
THE CURRENCY, BEFORE THE SUBCOMMITTEE ON
FINANCIAL INSTITUTIONS OF THE SENATE COMMITTEE ON BANKING AND CURRENCY, APRIL 2, 1968

I appreciate the opportunity to submit to the Subcommittee the views of the Office of the Comptroller
of the Currency with respect to S. 3001, 90th Congress,
a bill "To Provide Security Measures for Banks and
Other Financial Institutions."
The proposed legislation would direct the Comptroller of the Currency, the Board of Governors of the
263

Federal Reserve System, the Federal Deposit Insurance
Corporation, and the Federal Home Loan Bank Board
to promulgate rules and regulations establishing minimum standards for banks and savings and loan associations, subject to their supervision, with respect
to the installation, maintenance, and operation of
security devices and procedures to discourage robberies,
burglaries, and larcencies, and to assist in the identification and apprehension of persons who commit such
crimes. The bill would require that the rules promulgated would include time limits within which banks and
savings and loan associations would be required to
comply with such standards, and a requirement for the
submission by banks and savings and loan associations
of periodic reports with respect to the installation,
maintenance, and operation of security devices and
procedures. Violations of these rules would be subject
to a civil penalty not to exceed $100 for each day of the
violation.
The President, in his message, "The Challenge of
Crime to our Society," urged the Congress to enact
the Bank Protection Act of 1968 to direct those Federal agencies with responsibilities for banks and savings and loan associations to issue regulations requiring the installation, maintenance, and operation of appropriate protective systems. The proposed legislation
would carry out this recommendation of the
President.
The Office of the Comptroller of the Currency has
taken every opportunity to impress upon National
bank officers and directors their collective and individual responsibilities for adequate security protection
for their institutions. The importance of adequate
security has been stressed by representatives of this
Office to all the banks under our supervision, but it is
our view that the enactment of legislation such as that
embodied in S. 3001 would make a practical contribution to the objective of reducing and preventing
crimes against financial institutions. Therefore, the
Office of the Comptroller of the Currency favors the
enactment of the bill.
It should be noted, however, that the drafting of
rules as contemplated by the bill will be difficult because of the practical problems involved in this area.
Consideration must be given to such factors as the size
of a bank facility, its location, available security devices,
and installation problems. Further, as this Office has no
expertise in this area, it will be necessary to have extensive consultations with the Department of Justice, as
well as other law enforcement agencies throughout the
United States. It will also be necessary to consult with
various organizations and companies that manufacture

264




security devices and, of course, consultations with various banking organizations to ascertain some of the
practical problems which would be involved. There are
few precedents or guideposts for the regulatory agencies in drawing up such regulations. Therefore, in
breaking new ground, the regulatory agencies must
use extreme care in bringing out the best and most practical rules to meet the objective of the legislation. I
would, therefore, suggest that it may be desirable for
the Congress to extend the time limit for the promulgation of such rules and regulations. While I do not believe that the problems involved are insurmountable,
and would even hope that this Office could complete
its work within the 6 months contemplated by the statute, it is my view that it would be better and more
practical if the time limit were extended, so as to assure
that the many problems, some possibly unknown ai
this time, will receive careful consideration.
TESTIMONY OF WILLIAM B. CAMP, COMPTROLLER OF
OF THE CURRENCY, BEFORE THE HOUSE COMMITTEE
ON BANKING AND CURRENCY, ON H.R.
16064
MAY 6, 1968

I wish to thank the Chairman and the Committee
for giving us this opportunity to express the views oJ
the Office of the Comptroller of the Currency on H.R.
16064. The bill would give the General Accounting
Office free access to the reports of examination of State
and National member banks used by the Federa]
Deposit Insurance Corporation. In addition, GAC
would be given free access to all correspondence, memoranda, and other papers in the possession of FDIC
which relate to the examination reports.
I hold the same views on this matter as were helc
by previous Comptrollers of the Currency and are helc
by the present and previous Chairmen of FDIC. Tha
view is one of strong opposition to giving unrestrictec
access to bank examination reports to GAO, or indeec
to any Government agency other than one chargec
with the supervision of banks. Our basic reasons fo:
taking this position have been ably set forth in th<
testimony and report of my colleague, Chairmai
Randall.
I do not wish to take the time of the Committee b;
repeating those reasons, but I do appreciate the oppor
tunity to express some personal views on the mattei
The relationship between Federal bank examiners an<
the bankers whose business they must look into, is on
which we believe is quite unique in the field of govern
ment-business relations. In contrast to the methods c
other Federal agencies engaged in supervising othe

businesses, the bank examiner, 99 percent of the time,
obtains any information or document he desires from a
bank without resort to written questionnaires, administrative subpoenas, or court orders. This willingness
on the part of the banker to give complete access to
his records to a government agent rests on longstanding
tradition. Basic to it is a belief on the part of the banker
that the examiner's purpose and interest is solely in the
continued well-being of the bank as a financial institution. In addition, and most important for our discussion today, the banker-examiner relationship rests on
the confidence of the banker in the discretion of examiners and of his supervisors who will see his reports.
We, in the banking agencies, are proud of and greatly
value this relationship. We are concerned that the
bill would tend to destroy this good working relationship, which has been built up over the years between
our examiners and the banks. If the bill becomes law,
there would be a natural tendency on the part of
examiners and bankers to be less straightforward in
presenting information in the reports.
Mr. Randall's report and testimony ably set forth
other important reasons for maintaining the confidentiality of the examiner's report. These reasons range
from the delicate problem of maintaining depositor
confidence in their banks to the rights of individuals
not to have their private business affairs with their
banks revealed to government agents, who have no
direct interest in those affairs.
These considerations were expressly recognized by
the Congress in its recent enactment of the Freedom
of Information bill, Public Law 89-487, which went
into effect on July 4, 1967. That bill had, as its declared purpose, the granting of maximum access to
the general public to every record maintained by the
executive branch, with the exception of nine categories
of information which the Congress concluded could
not be disclosed without impairing either the citizens'
rights to privacy or important operations of the government. The eighth exception to this recent statute
excludes disclosure of matters that are "contained in
or related to examination, operating, or condition reports prepared by, on behalf of, or for the use of an
agency responsible for the regulation or supervision of
financial institutions."
We believe that the same policy considerations which
led Congress to exempt from public disclosure these
reports are applicable to the more limited disclosure
which would be accomplished by H.R. 16064.
If there were an overriding public purpose to be
served by giving these reports to the staff of the GAO,
it could be argued that such public purpose should




prevail over these considerations. However, we do
not believe that there is any overriding public purpose
which would be served.
The GAO states that it needs the reports in order
to assess the degree of contingent exposure to which
the Federal Deposit Insurance fund is presently subject. But the figures contained in the FDIC report conclusively demonstrate that the demands on the fund
caused by the occasional failure of a bank during good
times have been minuscule, even in relation to the
current income of the fund, without giving consideration to the corpus of the fund.
As Mr. Randall points out, realistic discussion of
the adequacy of the fund must relate to the possibility
of economic, military, or natural catastrophe, and
we know of no way in which possession of the examination reports would be helpful in making that
assessment.
Bank examinations, of course, are not made simultaneously on all of the banks in the country. The
National banks are required to be examined by law
at least three times every 2 years. State banks are
examined regularly, but at different intervals. The
disparity of dates of examination reports would appear
to make the type of overall composite picture, in which
the GAO evidently is interested, impossible to achieve
as of any given date. With all due respect to the
competence of the GAO staff in its particular field,
we doubt whether, given access to the reports they
seek, they would be able to make a significant addition
to our knowledge of the potential exposure of the
FDI fund.
We do not believe that the small possibility of public
advantage in having another agency assess these reports can counterbalance the strong public policy
considerations which weigh against this proposal.
TESTIMONY OF WILLIAM B. CAMP, COMPTROLLER OF
THE CURRENCY, BEFORE THE SUBCOMMITTEE ON
ECONOMIC PROGRESS OF THE JOINT ECONOMIC
COMMITTEE, ON MUNICIPAL FINANCING, JULY 10,

1968
I appreciate this opportunity to discuss with you
the problems of municipal financing. Of necessity,
State and local governments are undertaking huge
programs of capital investment. They have the principal responsibility for supplying many goods and
services, including streets and highways, public safety,
education at all levels, sewerage, electric power, and
an extended variety of health and welfare services.
Funds for these purposes are urgently needed. The
265

orderly and efficient functioning of the markets supplying these funds is of prime concern to all of us.
In recent years, the responsibilities of municipalities
have expanded greatly, due to the rapid growth in
population and the increased complexity of urban
living. As a result, the volume of new municipal debt
issued annually has roughly doubled since 1960, rising
from about $7 billion to a record high of over $14
billion last year. During the same period, outstanding
municipal debt rose from $64 billion to $118 billion.
Throughout our history, commercial banks have
been in the forefront in meeting the Nation's credit
needs, both private and public. Even prior to the development of municipal bond financing, commercial
banks, by extending direct loans, were actively assisting State and local governments in meeting the demands for services. During the past few years, commercial banks have provided the major impetus to the
increased competition among municipal bond underwriters. Moreover, as investors in municipal bonds,
commercial banks are the most important source of
funds for State and local governments.
The performance of commercial banks in supplying the funds need by State and local governments has
been truly remarkable. In this decade, State and local
security holdings of commercial banks have increased
from $17 billion to $50 billion. The additional funds
provided by commercial banks have accounted for 52
percent of the total increase in oustanding municipal
debt during the 1960's. The expansion of commercial
bank investment in State and local securities primarily
reflects the overall growth of banks' total loans and
investments.
I might point out that the greatly increased investment in State and local securities by National banks
has not been associated with a comparable increase
in examination problems. I think this speaks well for
both the care and thoroughness with which banks invest their money, and the basically high quality of the
underlying public projects for which the bonds were
issued.
The supervision of National banks emphasizes appraising and remedying problem loans, problem investments, and other matters which may impinge on the
banks' safety. This emphasis on bank safety overrides
the attention given to the yields on individual loans or
investments. Our knowledge as to the effect on yields
of variations in quality—or ratings—is more limited
than our knowledge as to the overall quality of banks'
municipal security investments.
In examining National banks, we give careful attention to all facets of bank operations, including, of

266




course, the banks' investment portfolios. Our concern
is that National banks' investments, like their loans,
be sound. We especially stress that the banks' investments not include obligations which are predominantly
speculative. The quality standards that we apply to
municipal bonds in determining whether such bonds
are suitable for bank investment correspond to the
quality standards for bonds given the top four ratings
by the rating services.
I want to stress, however, that just as National bank
examiners undertake an independent, thorough evaluation of the banks' loans, they also conduct a thorough
examination of the banks' investments. The ratings are
useful, at times, to corroborate our own evaluation, but
the ratings are not used in exclusion of our own appraisal of investment securities.
The examiners' analyses of investment securities are
broadly analogous to their appraisals of the banks'
loans. We recognize, however, that the analysis of
municipal securities involves many particular considerations which differ from those involved in analyzing,
say, commercial and industrial loans or consumer installment loans. Accordingly, the problems of evaluating investment securities are given special attention in
the training programs for our examination force, both
new and experienced.
The factors we consider in appraising the quality of
bank investments are outlined in the Comptroller's Policy Guidelines for National Bank Directors. In order to
provide the data needed for bank examinations, as well
as for the banks' investment decisions, National banks
are expected to maintain supporting credit data to establish the soundness of the securities in which they
invest. Briefly, the data that National banks must provide in support of the soundness of their investments
include: (1) Statement of total debt including all related obligations; (2) assessed valuation, including
basis of assessment; (3) property tax rates; (4) tax
collection record; (5) receipts and disbursements; (6)
sinking fund operation and requirement; (7) future
debt service requirement; (8) population; (9) economic background; (10) default record; and (11) per
capita debt.
Most commercial banks do not find it onerous to provide this information to buttress their investments.
When deciding whether to invest in particular municipal bond issues, banks obtain, or already have at
hand, the data required to justify their investments
to examiners. Thus, they have adequate data to undertake their own analysis of the merits of the particular
issues which they may acquire. Again, it appears that
the banks themselves find the ratings helpful to corrob-

orate their own appraisal of different issues and, from
time to time, they may rely heavily on the rating services' appraisals of particular issues—especially those
given higher ratings.
Banks do not rely exclusively on rating services for
their investment decisions, as their frequent investments in unrated issues testify. Many municipal bond
issues, particularly those of smaller communities, are
not rated by the rating services. However, upon
thorough analysis, these issues are often found to represent top quality securities that are fully comparable
to any of the rated issues. Such issues are purchased by
small and large banks alike.
I am pleased to report that these situations have not
presented any discernible bank supervisory problems.
Frequently, the bonds are those issued by local or
nearby communities, and the banks involved are thoroughly familiar with the communities' needs, future
prospects, and ability to service their debt. In fact,
these situations are best characterized as ones in which
the banks provide a valuable public service by supplying needed funds and, in doing so, acquire high quality
earning assets.
We share this Subcommittee's concern for the problems of municipal financing. The projects at stake are
urgently needed by the people in the towns and cities
across our Nation. It behoves us to do whatever is necessary to provide the required funds. The funds must
be made available to the people—the State and local
governments and their authorities—on the best possible
terms. Commercial banks have been instrumental as investors and underwriters in providing the funds for
public projects in recent years. I am confident that our
commercial banks will continue to assist the people
they serve by helping to supply funds for worthy
public projects.
TESTIMONY OF ROBERT BLOOM, CHIEF COUNSEL,
OFFICE OF THE COMPTROLLER OF THE CURRENCY,
BEFORE THE HOUSE COMMITTEE ON BANKING AND
CURRENCY, ON H.R. 13884, JULY 16, 1968

We appreciate this opportunity to testify on H.R.
13884, a bill which would do two things. First, it would
prohibit any State-chartered or National bank, the deposits of which are insured by the Federal Deposit
Insurance Corporation, to directly or indirectly vote,
or exercise control over the voting, of any share of the
bank's own stock. Secondly, the bill would extend the
mandatory cumulative voting privilege now applicable
to National banks, to cover elections of directors of all
State-chartered insured banks.




1. Prohibition against voting own shares. The present Federal law contains a partial prohibition on the
voting of its own shares by National banks. This partial
prohibition is contained in Section 61 of Title 12 and
reads as follows:
* * * in the election of directors, shares of its own stock
held by a national bank as sole trustee, whether registered
in its own name as such trustee or in the name of its nominee,
shall not be voted by the registered owner unless under the
terms of the trust the manner in which such shares shall be
voted may be determined by a donor or beneficiary of the
trust and unless such donor or beneficiary actually directs
how such shares shall be voted * * *

It will be noted that this provision refers only to
shares of its own stock held by a National bank as
trustee. The provision does not refer to shares held
by a National bank in its own right, since another provision of Title 12, Section 83, contains an outright
prohibition against a National bank becoming "the
purchaser or holder of" its own shares.
It will also be noted that Section 61 does not prohibit the voting of its own stock by the National bank
as trustee altogether, as does the bill under consideration today. Section 61 permits the National bank as
trustee to vote its own stock under two circumstances;
(1) if the matter being voted upon is something
other than the election of directors and (2) even in
the election of directors, the bank trustee may vote
the shares, provided that the beneficiary of the trust
has directed the bank as to how he wishes the shares
to be voted.
It has been the experience of this Office that the
limited restriction contained in Section 61 is adequate
to prevent abuses from arising out of the fact that
some National banks hold their own stock in the
capacity of trustee for decedents' estates or other
donors. A common occasion for the creation of such
ownership arises when a principal officer or major
shareholder of a bank dies and the bank is named
executor or trustee. This we regard as a natural event,
especially in smaller communities, and find nothing
sinister in either the fact of the own bank stock ownership or in the voting results which flow from it. Indeed, we regard one of the undesirable effects of H.R.
13884 to be that it would disable every insured bank,
both State and National, from effectively acting as
trustee of a trust, the assets of which included stock
of the bank. This could cause great disruption in the
administration of many, many trusts of long standing.
Insofar as the bill would force the choice of a separate
bank as trustee, it could also foster the creation of
undesirable interbank influence. This effect would be

267

multiplied by the second provision of the bill, which
extends mandatory cumulative voting to all insured
banks. If a bank, as trustee, held substantial stock in
another bank, and this result would be forced by the
first provision of the bill, the trustee bank could,
through the use of cumulative voting, obtain representation on the second bank's board of directors. The
trustee bank, with justification, could insist that such
representation was necessary to fulfill its fiduciary duty
to oversee the management of the trust assets and to
preserve and enhance their value. While such situations may already exist, H.R. 13884 would inevitably
enlarge the number of cases in which this situation
would arise. The undesirability of this sort of interbank stock ownership has been pointed out in recent
staff reports published by this Committee.
In view of the favorable experience our Office has
had during the 35-year existence of the present provision, and also because of the foregoing negative effects
of the new proposals, we do not favor the extension of
the present restrictions on voting of a bank's own stock
to a complete prohibition as is contained in the bill.
With respect to the first part of the bill dealing with
voting by the bank of its own stock, our position is that
the present provisions concerning National banks contained in 12 U.S.C. 61 are entirely adequate. If it is
desired to impose some restriction on own stock voting
by State-chartered banks, we suggest that the pattern
presently contained in Section 61 be retained rather
than the complete prohibition now contained in the
bill.
2. Cumulative voting. The second provision of H.R.
13884 would extend the present mandatory cumulative voting privilege, which exists for shareholders of
National banks (12 U.S.G. 61), to cover all Statechartered insured banks.
The present cumulative voting provision was inserted in the Federal law as part of the Banking Act
of 1933. Prior to that time the usual corporate rule of
one share one vote applied to National banks. In 1954,
the then Comptroller of the Currency, the Honorable
Ray M. Gidney, testified in support of S. 3158, a bill
which would have made cumulative voting optional
for National banks. As you know, that bill was passed
by the Senate, but became the subject of much controversy in this Committee and was not adopted. Similar legislation to make cumulative voting optional for
National banks was favored by former Comptroller
James J. Saxon (H.R. 12292, 88th Cong.; H.R. 2839,
89th Cong.). In his letter of transmittal to the Congress covering H.R. 12292, the Comptroller stated that
he was aware of few situations in which cumulative
268




voting had proved to be a beneficial force in the affairs
of National banks. On the other hand, it has been
used to elect individuals to the directorates of National
banks against the wishes and best judgment of the
majority owners of the stock, and such directors may
well not work harmoniously and constructively with
the rest of the board.
The inability under the law to inquire into the motives of the cumulating stockholder makes the device
undesirable on another count. It can be used by a competitor bank to gain a place on the board of directors
of another bank in order to gain information usable
in competition against the latter. At a time when governmental policy is concerned about the problems of
interlocking directorates, cumulative voting provides
a means for accomplishing similar results, without the
need for overt cooperation between the banks involved.
Another negative effect of cumulative voting is that
brokers or other groups interested in promoting
mergers may acquire proxies for sufficient votes to
elect one or two directors of a bank in order to continuously prod its management into the consideration
of merger offers.
We recognize that the relative merits and demerits
of cumulative voting are matters of considerable controversy and that reasonable men may differ on the
issue. We respect the judgment of those who believe
that cumulative voting is desirable as a means of
achieving maximum corporate democracy. Indeed, we
have seen situations where the existence of cumulative
voting has enabled our Office to work toward the solution of supervisory problems by working with minority
interests. On the other hand, as discussed above, we
have seen instances where cumulative voting has been
used and abused by fractious elements, to the point
where serious supervisory problems have been created.
Accordingly, the Office of the Comptroller of the
Currency has no recommendation to make with respect
to the second part of the bill, since it makes no change
in the cumulative voting rules pertaining to National
banks, but only extends the present mandatory provisions to cover State-chartered insured banks. We do
tend to agree with the views expressed by Chairman
Randall of the Federal Deposit Insurance Corporation
in his letter to the Committee on the bill, wherein he
expressed concern over the introduction of Federal
legislation in areas which have been traditionally reserved to the States. This problem, of course, would be
most acute with regard to States such as Texas, Louisiana, New Jersey, and others, where by statute or court
interpretation, State law forbids the use of cumulative
voting by State banks.

TESTIMONY OF JUSTIN T. WATSON, ACTING COMPTROLLER OF THE CURRENCY, BEFORE THE SUBCOMMITTEE ON FINANCIAL INSTITUTIONS OF THE
SENATE COMMITTEE ON BANKING AND CURRENCY,
"FINANCIAL INSTITUTIONS AND THE URBAN CRISIS," OCTOBER 4, 1968

I appreciate the opportunity to share with you the
views of the Comptroller's Office on the present and
future role of the National banking system in the solution of our present urban crisis. We believe that National banks should be, and are, participating in the
solution of these problems.
A background paper prepared by this Committee's
staff to define the scope of these hearings states that
some of the advantages in using the private sector of
the economy to help meet the problems of our cities
may be listed as follows:
(1) The magnitude of the problem far exceeds the amount
of resources which the Federal Government is likely to have
available;
(2) The private sector is far more decentralized and is
therefore generally able to obtain quicker action without bureaucratic delays;
(3) Market mechanisms can often do a more efficient
job in allocating resources and seeking out marginal projects.

The Comptroller's Office agrees with each of these
tentative conclusions. While our Office is not in a position to comment in detail on new or different government programs, we do believe that private business—
and particularly the banking industry—should take a
leading part in meeting some of the economic problems
of the urban slums.
Indeed, a significant number of National banks have
already committed their money and managerial talent
to easing the critical deficiencies in jobs, in housing,
and in capital for minority businesses. A sampling of
the kinds of programs National banks have undertaken
is as follows:
Jobs

In New York, a National bank, under a Department
of Labor contract, has opened a school for the hardcore unemployed. It is the largest training school in
the country to be set up under the program entitled
"Job Opportunities in the Business Sector"—or
"JOBS." The JOBS Program was organized by the
National Alliance of Businessmen at the President's
request. The trainees at the New York school are fulltime employees of the bank and receive a weekly
salary, with an increase effective upon graduation.
The bank expects to spend $150,000 of its own funds
to train 700 persons in the next year and a half. This




same bank has also sponsored a school for dropouts
in Harlem.
In Philadelphia, two National banks have pledged
a share in a $1 million fund backing the Black Coalition, a broadly based Negro project of self-initiated
economic programs. This group's top priority is jobs
for residents of ghetto areas. National banks in Philadelphia have also joined with the Opportunities Industrialization Center in establishing a program to
train the so-called "unemployable" to operate proof
machines.
In Newark, two National banks have been operating
their own teller-training programs for Negroes.
Housing

In California, the largest National bank in the
United States has pledged $100 million in mortgage
loans for low-cost housing. This housing is to be in riotprone and blighted ghetto areas. More than 100 specially-trained loan officers have been designated to
make these loans.
In New York City, one National bank has pledged
$7 million for housing rehabilitation. Others of that
city's financial institutions have organized a $100 million mortgage pool for the redevelopment of the
Bedford-Stuyvesant section of Brooklyn. These funds
will be used to purchase, rehabilitate, and refinance
one-to-four family houses.
National banks are also assisting the State of New
York on its new $6 billion program designed to rehabilitate the deteriorating centers of New York's
major cities. Under this program, the State will form
three Urban Development Corporations to provide new
vehicles for channeling private investment and expertise into urban core areas. The legislation
authorizing these urban development corporations also
granted State financial institutions additional lending
powers to assist in corporation-sponsored programs.
The New York legislation has some similarities to the
bill entitled the "Community Self-Determination Act
of 1968," which recently has been introduced in this
Congress.
In Philadelphia, both State and National banks have
announced that they would provide a loan ranging
from $2 to $5 million for the development of lowincome housing in cooperation with the Old Philadelphia Development Corporation and the Philadelphia
Housing Development Corporation.
In Boston, four banks, three of them National Associations, have joined with a utility company to support, with construction loans, an effort by Negro
269

businessmen to provide decent housing in the ghetto
areas.
In Newburgh, N.Y., a National bank cooperated
with other financial institutions to provide a short-term
construction loan of almost $2 million for a Negrooperated middle-income housing program.
In Georgia, a National bank has established a development corporation to provide downpayment money
in the form of second mortgages, so that first mortgage
financing can be obtained. The bank itself has
dedicated an additional $10 million for long-term
first mortgage home financing for low-income groups.
In Miami, a National bank and two other financial
institutions have established a $10 million credit fund
to finance construction loans for low-rent housing in
Dade County, Fla.
Capital for Minority Business
Three National banks are among a group of eight
Philadelphia-area commercial banks which have established a $2 million loan fund to assist business development among underprivileged minority groups in the
inner-city areas. In addition to loans, the group will
provide technical assistance.
In Indianapolis, a National bank has established a
small business loan office headed by a Negro loan
officer to promote loans to minority entrepreneurs.
Many National banks have responded enthusiastically to the Small Business Administration's "Project
Own," the details of which Mr. Samuels discussed with
this Committee last Tuesday. Under this program,
loans to inner-city businesses will be guaranteed up to
90 percent of the loan.
The Comptroller's Office believes that these bankinitiated programs are commendable. We hope that
they will continue to grow in size, imagination, and
significance.
In particular, the Comptroller's Office suggests to
this Committee that one of its principal concerns in
the area of urban problems should be the encouragement of such privately backed programs. National
banks are now authorized by 12 U.S.C. § 24 Eighth,
and by paragraph 7480 of the Comptroller's Manual
for National Banks, to contribute to community development and to invest up to 2 percent of the bank's
capital and surplus in corporations carrying on such
development. Banks, however, are not intended to be
nonprofit organizations, and National banks, therefore, are more likely to participate in programs which
also provide a sound and profitable investment for the
bank's funds. This Committee, therefore, might wish
270




to seek new ways of giving significant economic incentives to National banks, which will prompt them to use
their drive, their initiative, and their talent in solving
the urban problems with which the Committee is
concerned.
This approach of using the privately owned National banking system to meet the Nation's economic
problems is not new. Indeed, the National banking
system was founded in order to channel private funds
into investment in Government bonds to meet the
financial crisis of the Civil War. Among the possibilities the Committee might consider, the Comptroller's Office suggests the following:
1. Additional authority for banks to underwrite and
deal in local government bonds. National banks are
now authorized by Congress to further government
policies by dealing without restrictions in obligations
of, for example, the Tennessee Valley Authority, the
Commodity Credit Corporation, and the Inter-American Development Bank. Indeed, just this session Congress enacted provisions of the Housing and Urban
Development Act of 1968 which permit National banks
to deal in and underwrite revenue bonds for housing,
university, or dormitory purposes. S. 1306, which passed
the Senate last November, and which has been delayed
in the House, would allow National banks to deal in
and underwrite obligations of political subdivisions of
a State—including State corporations or authorities
engaged in financing efforts to alleviate urban problems—even though such corporations or authorities
lack the taxing power. The enactment of this legislation would greatly assist State and local governments
in obtaining funds for use in meeting the urban problems this Committee is now considering.
2. Expanded programs of guaranteed loans. Congress has often used loan guarantee programs, which
substantially lower the risk to the bank of loss. FHA
insurance of mortgage loans is an example. National
banks now hold approximately $5.1 billion worth of
FHA insured loans, out of a $7.7 billion total for all
commercial banks. Loans to businesses in the high
crime and riot-torn ghetto areas obviously involve substantial risk. Sensibly administered programs to reduce
this risk, such as the SBA's "Project Own," can and
should be used.
I should also mention at this point the testimony,
which has been given to this Committee by several
witnesses, that National bank examiners automatically
require banks to charge off loans made to businesses
or individuals in ghetto areas. There is absolutely no
basis for such a complaint. The Comptroller's Office
never requires the automatic chargeoff of any loan.

This Office does require, however, that any loan in a
National bank, no matter to whom it is made, be
charged off as a loss, when it has been in arrears for
an unreasonable period of time, and appears uncollectible because of the ultimate inability of the borrower
to repay within the terms of the obligation or within a
reasonable time thereafter. Only in this manner can
this Office carry out the responsibilities Congress has
given us to make sure that the financial statement
of each National bank accurately reflects its true condition. We do not think the Congress would have this
Office allow uncollectible loans to be carried as assets
on the books of National banks—even though such
uncollectible loans were made for socially desirable
purposes. Our examining policies and procedures do
not discourage National banks from investing in the
ghetto, and in fact—as I have indicated—many National banks have pioneered in this area.
3. Additional

branch banking powers. A bank, of

course, cannot make a loan to a ghetto resident or
businessman without first making contact with him.
Branch banking is a traditional and efficient way of
bringing needed funds into a capital-deficit area. In
New York, large National banks can and do have
branches located in Harlem. In Chicago, however, no
branches can be located in the ghetto areas because of
the State's branch banking law. The Comptroller's
Office believes that the unique branching ability of the
National banks could be utilized to help alleviate




urban problems by authorizing National banks to establish branches anywhere within the city in which
their main office is located.
4. The encouragement of banking subsidiaries and
affiliates in urban development programs. Many of the

bank-initiated programs I have described, such as the
one in Georgia, involve the organization of a separate
corporation, either as a wholly-owned bank subsidiary
or as a holding company affiliate of the bank. Various
proposals have been made recently to limit such subsidiaries or affiliates. The Comptroller's Office suggests
that such limitations might impair the effectiveness of
the banking industry in meeting the economic problems of our urban centers. Subsidiary or affiliated corporations can and have been most effective in bringing
to blighted urban areas the management talent and
capital resources of the banking industry.
In summary, the Comptroller's Office agrees with
the tentative conclusions of the Committee staff that
private funds, as well as government funds, are needed
to meet today's enormous urban problems, and that
private business—particularly the banking industry—
can, in many instances, meet these problems on a local
level quickly and efficiently through traditional market
mechanisms. We believe that, before turning to other
methods, the Congress and the executive branch of
government can and should use the tools provided by
our present banking system to meet the economic problems associated with our urban centers.

271

APPENDIX D

Selected Correspondence
of
the Office of the
Comptroller of the Currency




Selected Correspondence of the Office of the Comptroller of
the Currency
Subject

Bank Holding Company Stock as Collateral
Bank Management
Bank Reports
Compensating Balances
Contributions to Community Development
Data Processing Services
Dual Banking
Farmers Home Administration Loans
Federal Crop Insurance
Housing Loans
Insurance
Interest Rates
Lotteries
Mortgage Servicing Corporation
Mortgage Warehousing
Political Contributions
Public Interest
State Taxation of National Banks
Travel Agencies

274




Page

275
276
277
278
278
278
279
280
280
281
281
282
283
283
284
284
284
286
287

BANK HOLDING COMPANY STOCK AS COLLATERAL
OCTOBER 23,

1968.

This is in response to your letter, with enclosures,
concerning the lending of funds by a National bank
wherein the loans are secured by the stock of a holding
company of which the bank is a member. Specifically,
you ask if the provisions of 12 U.S.C. 371c are controlling in the case of both registered bank holding
companies and one-bank holding companies, notwithstanding the provisions of 12 U.S.C. 83.
Thorough consideration and discussion of this problem was set out in the landmark case of Anderson v.
Akers, 86 F. 2d 518 (1936), modifying 7 F. Supp. 924.
In that case, pursuant to a reorganization, the National Bank of Kentucky was purchased by the Banco
Kentucky Company. The value of the bank's shares
initially represented practically the entire value of the
assets of the holding company, and continually thereafter represented varying percentages, but at no time
less than 40 per centum of the value of the holding
company assets. During the years 1929 and 1930, the
bank made loans aggregating $4 million on collateral
consisting of stock in the holding company.
The Federal District Court held that 12 U.S.C. 83
prohibited National banks from purchasing their own
stock or making loans on the security of the shares of
their own capital stock. The Court stated that the purpose of the statute was to make stockholders of a National bank personally liable in an amount equal to the
amount of their capital stock holdings in the bank.
This protection given to the depositors would be defeated if the bank were to purchase from its stockholders, and to own, its own stock. If the bank were the
holder of its own stock when it failed, there would, to
that extent, be no stockholders to be held liable.
For the same reason, National banks were prohibited
from making loans on the security of their own stock as
collateral. If the borrower failed to pay the loan, then
the bank would be forced to take the stock so held as
collateral and the same unfortunate result would occur
as in the case where the bank had purchased its own
stock.
Applying the principle to the case at hand, the Court
went on to state that the National Bank of Kentucky




could not make loans to itself, and could not make
loans to anyone else and take its own capital stock as
collateral security for such loans. Title 12, Section 83
of the United States Code does not deal with degree;
it does not prescribe one rule for small loans and another for large loans. The prohibition is absolute, and
no stock in the bank can be taken by it as collateral. If,
for example, the bank had made a loan and had taken,
as security therefor, collateral 60 percent of which was
sound stock in a successful manufacturing corporation
and 40 percent was its own stock, it would seem plain
that such a loan was in violation of this statute. What
substantial difference is there in fact if, instead of taking
collateral in the manner just indicated, the bank makes
a loan and takes, as collateral thereon, stock in a holding company, and 60 percent of the assets of the holding company are a kind the bank could accept as
collateral, but 40 percent of such assets consist of stock
of the bank itself, which the bank could not take as
collateral to a loan? The Court goes on to say that it
seems that one is as much a violation of the real meaning and purpose of the statute as the other. Under these
circumstances, with the holding company having so
much of its assets invested in the capital stock of the
bank, the making, by the bank, of loans on which the
stock of the holding company was taken as collateral
security was held to be in violation of the statute. The
District Court concluded this portion of its decision by
stating:
When Congress declared, through this statute, that a national bank should not make any loan or discount on the
security of the shares of its own capital stock, it must have
intended to prohibit the taking as collateral, of the stock of
any corporation a substantial portion of whose assets consisted
of the stock of the bank making such loans.

The decision of the District Court was reversed
on appeal to the Circuit Court. The Court stated that
although it was true that the holding company was
conceived by the president of the bank; that it was
promoted and fostered by the directors of the bank;
that the directorates of the two corporations, though
not identical, overlapped; that the great majority of
the stock became the property of the holding com275

pany and that there was a suggestion of identity between the bank and the holding company—these
were not valid reasons for prohibiting the lending of
funds on the security of the holding company stock.
The Court went on to say that a reading of the section must be rejected, which leads to unreasonable,
if not to absurd, results, and establishes such standard
of duty for bank directors that either compliance becomes wholly impossible or risk of violation so great
that honest men will not assume it.
It should be pointed out that at the time of the
decision of this case, shareholders of a National bank
carried a double liability on their stock ownership in
the bank (12 U.S.G. 63 and 64). Thus, much of the
District Court rationale became moot after 1937, when
the above sections were repealed by 12 U.S.C. 64a.
For 20 years, until the passage of the Bank Holding
Company Act of 1956 (12 U.S.C. 1841 et. seq.), this
decision stood as the controlling force and influence
concerning loans to both one-bank and multi-bank
holding companies. In that year Congress enacted 12
U.S.C. 1845, which effectively overruled the Circuit
Court decision in the Anderson case related above.
The Congress, in enacting section 1845, adopted the
conclusion of the District Court. That section prohibited, from and after May 9, 1956, a bank from
accepting the capital stock, bonds, debentures, or other
obligations of a bank holding company of which it was
a subsidiary or any other subsidiary of such bank holding company, as collateral security for advances made
to any person or company. In enacting this section
of the Bank Holding Company Act of 1956, the Senate
report (No. 1095, as cited in The U.S. Code Congressional and Administrative News, page 2496, 1956)
states:
This Committee received testimony to the effect that one
of the dangers inherent in the bank holding company system
is that the parent company may take undue advantage of
the resources of its subsidiary banks. To prevent this situation from arising the bill prohibits in general the borrowing
of subsidiary bank funds by a bank holding company or by
another subsidiary in the bank holding company system.

This section of the Act was relatively short-lived,
being repealed in 1966 pursuant to the Bank Holding
Company Act amendments of that year. The Senate
report (No. 1179 as cited in The U.S. Code Congressional and Administrative News, page 2394, 1966)
stated that the bill would repeal section 6 of the Act
(12 U.S.C. 1845), which flatly prohibited any subsidiary bank from lending to or investing in its parent hold-

276




ing company or a fellow subsidiary corporation. The
Committee report goes on to say that repeal of this prohibition would be accompanied by an extension of regulation of such credit under section 23A of the Federal
Reserve Act (12 U.S.C. 371c). In commenting upon
amendments to other laws affected by amendments to
the Bank Holding Company Act of 1956, the Committee report made this comment (page 2395, The
U.S. Code Congressional and Administrative News):
In light of the proposed repeal of section 6 of the Bank
Holding Company Act (12 U.S.C. 1845), the limitations of
section 23A (12 U.S.C. 371c) would be made specifically
applicable not only to dealings with "affiliates" as now defined
but also to dealings with any bank holding company or
fellow subsidiary as defined in the holding company Act.

The law as it presently stands today with respect to
the registered bank holding company is that banks
within the holding company system may lend their
funds secured by the stock of the holding company,
but will be limited by the provisions set forth in 12
U.S.C. 371c. It is submitted that these same limitations
should be made applicable to the one-bank holding
company situations.
BANK MANAGEMENT
JANUARY 8,

1968.

This refers to your letter inquiring as to the definition
of management of your bank for the purpose of submitting a proposed slate of directors to the shareholders at the annual meeting.
This Office has historically regarded the entire board
of directors as constituting management of a National
bank. It is in this body that the shareholders (who are
the owners of the banks) have vested authority to set
the policies of the bank and to see that they are implemented. Furthermore, there are criminal and civil
sanctions applicable to National bank directors as a
result of negligence or willful misconduct in the management of the bank's affairs. This is readily perceived
from a review of statutes relating to directors of National banks.
Section 71 of Title 12, United States Code, states
that "The affairs of each association shall be managed
by not less than five directors, who shall be elected by
the shareholders * * *," and 12 U.S.C. 71a provides
that "the board of directors, board of trustees, or other
similar governing body of every national banking association * * * shall consist of not less than five nor

more than twenty-five members." (Emphasis supplied.)
As is true of any other corporation, a bank can act
only through its agents. Thus, 12 U.S.C. 24 states that
the association "shall have power * * *.
"Fifth. To elect or appoint directors, and by its
board of directors to appoint a president, vice president, cashier, and other officers, define their duties, require bonds of them and fix the penalty thereof,
dismiss such officers or any of them at pleasure, and
appoint others to fill their places.
"Sixth. To prescribe, by its board of directors, bylaws
not inconsistent with law, regulating the manner in
which its stock shall be transferred, its directors elected
or appointed, its officers appointed, its property transferred, its general business conducted, and the privileges granted to it by law exercised and enjoyed.
"Seventh. To exercise by its board of directors or
duly authorized officers or agents, subject to law, all
such incidental powers as shall be necessary to carry
on the business of banking; * * *."
In addition, 12 U.S.C 76 states:
"The president of the bank shall be a member of
the board and shall be the chairman thereof, but the
board may designate a director in lieu of the president
to be chairman of the board, who shall perform such
duties as may be designated by the board."
Thus, the conclusion seems inescapable that management of a National bank is the board of directors of
the bank. Having reached this conclusion, it is necessary to locate management in the event that an even
split on the board of directors prevents the board from
arriving at a majority decision. As I understand it, this
is the situation in your bank.
It is incumbent upon the board of directors to submit a proposed slate of directors to the shareholders,
and the shareholders are entitled to receive the same.
Therefore, if the board cannot reach a majority decision in the matter, the only course available in connection with the forthcoming shareholders' meeting
is to submit two proxy solicitations, one from each faction on the board, each proposing a different slate of
directors. This solution is dictated by the fact that official board action normally requires a majority vote.
However, in the present instance, where a majority
cannot be obtained on a mandatory matter, the dual
submission is required. Of course, expenses incurred
in connection with both solicitations should be borne
by the bank. Also, if the board should be unable to
agree upon the judges of election, perhaps each faction




could appoint one, and then confer power upon the
two appointed judges to name the third.

BANK REPORTS
SEPTEMBER 23,

1968.

HON. DANTE B. FASCELL.,

Legal and Monetary Affairs Subcommittee of the Committee on Government Operations,
House of Representatives:
This is in reply to your letter in which you request
a summary of the actions which have been taken by
this Office to carry out the recommendations of the
report issued by the Committee on Government Operations during the 88th Congress, entitled, "Window
Dressing in Bank Reports."
The practices referred to in that report have remained a matter of concern for this Office, and we
have strengthened our efforts to ensure that the Reports
of Condition issued by all banks subject to our supervision accurately and fairly reflect their condition, and
are not distorted by the use of temporary nonbusinesspurpose transactions. This Office has long been of the
opinion that the use of surprise dates for call reports
is the most effective method of minimizing the use and
effect of "window dressing," and consequently such
surprise dates have been used regularly by this Office
in conjunction with the other Federal bank regulatory
agencies. Since the December 1965 call, we have required the submission and publication of average figures for total loans and deposits for the 15 calendar
days immediately preceding the June and December
call reports. It is our belief that this requirement greatly reduces the possibility of "window dressing" these
reports. In addition, this Office, in connection with
the other Federal bank supervisory agencies, recently
issued certain proposals for modification of the form
of call reports, which proposals are intended to make
these reports more fully compatible with the disclosure
requirements under the Securities Act of 1964. Certain
items of these proposed forms, anticipated for use by
1969, are intended to prevent practices conducive to
"window dressing." It should also be mentioned that
our examiners are constantly alert to discover and report any such practices, to enable this Office to take
appropriate supervisory measures.
We wish to express our gratitude to the Committee
for its continued interest in this problem.

277

COMPENSATING BALANCES
MARCH 15,

1968.

HON. RICHARD T. HANNA,

House of Representatives:
This concerns a letter from one of your constituents,
which you forwarded to this Office for reply.
A commercial bank •will sometimes require, as a
condition to an extension of credit, that a prospective
borrower agree to maintain a compensating balance at
the lending bank. Whether or not a bank requires that
this arrangement be carried out will usually depend
on such factors as the money-market conditions at the
time the loan is made, the credit rating of the borrower,
and the terms of the loan. The use of compensating
balances is not uncommon throughout the commercial
banking system and does not, in itself, violate any
provision of the National Bank Act, or any regulation
of this Office. The maintenance of a compensating
balance is a contractual matter, which is determined
by the bargaining between the parties to the
transaction.
With reference to your constituent's specific inquiries, 12 U.S.C. 371 limits the aggregate sum of real
estate loans made by a National bank to the amount
of the paid in and unimpaired capital stock of the
bank, plus the amount of its unimpaired surplus fund,
or 70 per centum of the amount of its time and savings
deposits, whichever is greater. In addition, under 12
U.S.C. 84, a National bank may not, subject to certain exceptions, lend more than 10 percent of its capital
and surplus to one borrower.

butions and investments may not exceed 2 percent of
the bank's capital and surplus. An investment in such
a corporation, however, may not be carried as an asset
on the bank's books, but must be charged off. Therefore, the "aggregate investment" limitation referred
to in paragraph 7480 means that all such investments,
and all such contributions, made from year to year, may
not, in their aggregate total, exceed 2 percent of the
bank's current capital and surplus.
Question 2. If stock is purchased and charged to
expense rather than being carried as an asset, does the
2 percent limitation apply in any manner?
Answer: See the answer to Question 1.
Question 3. In reference to "bank's capital and surplus," does the term surplus mean the actual amount
carried in the surplus account on the bank's books, or
the broader definition, "unimpaired surplus fund," as
used in 12 U.S.C. 84.
Answer: The term "surplus" as used in paragraph
7480 means the actual amount carried in the bank's
surplus account, not the broader definition of "unimpaired surplus fund" contained in paragraph
1100(c) for purposes of 12 U.S.C. 84. See paragraph
7545 of the Comptroller's Manual.
Question 4. Is an "investment in a corporation" restricted to a nonprofit corporation?
Answer: A National bank may make reasonable
contributions to community development as contemplated by paragraph 7480, even though this be accomplished through the medium of a corporation organized
for profit.
DATA PROCESSING SERVICES

CONTRIBUTIONS TO COMMUNITY
DEVELOPMENT
NOVEMBER 6,

1968.

This refers to your letter in which you refer to
paragraph 7480 of the Comptroller's Manual, and request our interpretation of the following four
questions:
Question 1. Does "aggregate investment" mean
only the amount actually carried on the bank's books
at any given date?
Answer: Under paragraph 7480, National banks
may make reasonable contributions to community development, which contributions may take the form
of an investment in a corporation organized to carry
on such activities, but the aggregate of such contri278




FEBRUARY 8,

1968.

This refers to your letter concerning the proposed
establishment of a data processing center.
This Office is responsible for the supervision and
regulation of National banks. Data processing centers
do not perform the functions of a branch bank, and
therefore branch restrictions are not applicable to
them. Title 12 U.S.C. 36 (f) defines a branch as "any
branch bank, branch office, branch agency, additional
office or any branch place of business * * * at which
deposits are received, or checks paid, or money lent."
Since, presumably, deposits would not be received,
checks paid, nor money lent at the proposed data processing center, the center would not be a branch.
A National bank may own and operate data processing equipment as necessary or convenient for it to carry

on its business. As is stated in paragraph 3500 of the
Comptroller's Manual for National Banks, incidental
to its banking services, a National bank may make
available its data processing equipment or perform
data processing services on such equipment for other
banks and bank customers. In an effort to recoup the
large costs inherent in the acquisition and maintenance
of EDP equipment and personnel, banks must utilize
the otherwise idle computer time to perform EDP
services for customers. The statutory basis for this ruling is paragraph Seventh of 12 U.S.G. 24, a provision
that authorizes National banks to exercise such powers
as shall be incidental and necessary to the business of
banking. A National bank may engage in the performance of data processing services directly through
a department within the bank, or indirectly through a
separate corporation.

DUAL BANKING
JULY 18,

1968.

HON. DANTE B. FASCELL,

Legal and Monetary Affairs Subcommittee of the Committee on Government Operations,
House of Representatives:
Thank you for your letter asking for our comments
on the editorial entitled, "Shopping For Supervision,"
which appeared in the Wall Street Journal of July 9,
1968.
As you know, under present law the shareholders
of banks, by the vote of two-thirds of the outstanding
shares, may elect to convert their institution from a
State to National charter and vice versa (12 U'S.C.
214). The Congress, in passing this law, took great
pains to insure that this right was bilateral, and
thereby establish the now famous "two-way street."
The issues raised by the Wall Street Journal editorial
were debated in Congress at that time and the questions
of so-called "agency shopping" and "races for laxity"
were raised by the opponents.
For the most part, those dire predictions have not
been borne out and the banking system in this country
has flourished and grown under the present arrangement. We have great faith in and favor the present dual
banking system and do not think that the conversion
of a few large institutions, one way or the other, is
cause for any hasty action to disturb the system which
has long worked so well. This is not to say that we
object to examination, at any time, into the workings
of the dual banking system or into the motivating forces
behind charter conversions.




AUGUST 2,

1968.

In your letter you express great concern about the
recent charter conversions, and request our assistance
in dealing with what you apparently feel is a serious
problem.
We do not agree with the statement contained in
the first paragraph of your letter to the effect that "a
substantial shift in balance of the dual banking system
is taking place." Neither do we understand your reference to the recent Supreme Court decision in the
sales tax case in this connection. We see nothing in the
decision of the managements of the Wells Fargo and
Wachovia banks, nor in the reaffirmation of a settled
principle of law by the Supreme Court to create any
need for what you call urgent "remedial action."
"Two swallows do not a summer make," and two
conversions, even of large banks, do not tilt the dual
banking system out of balance. Surely the commercial
banking system of the country is hardier than that.
At a glance, the most recent statistics on the dual banking system, published by the National Association of
Supervisors of State Banks as of December 31, 1967,
indicate that the system has probably never been in
better balance. As of December 31, 1967, there were
14,749 offices of National banks and 17,992 offices of
State banks. National banks have assets of $263 billion and State banks have total assets of $255 billion.
We regard these figures as a remarkable tribute to the
built-in symmetry and balance of the dual banking
system.
Similarly, with regard to the effects of the First
Agricultural National Bank decision by the Supreme
Court, we do not understand your apparent alarm. The
decision, as any attorney will confirm, contains absolutely nothing new. The Court merely confirmed the
prior understanding of virtually every tax lawyer and
general practitioner as to the general rule concerning
payment of State sales taxes by National banks. The
understanding was so well-established that at least 20
State legislatures had written into their sales tax statutes
the exemption for National banks as a matter of mere
legislative drafting required by older Supreme Court
cases, such as Owensboro National Bank v. Owensboro. There is therefore nothing in the First Agricultural case which changes the status quo or which requires any urgent remedial action.
Your reference to joint efforts by the three Federal
banking agencies to harmonize and coordinate positions contains the implication that such is not the case
at the present time. My own experience, since I became

279

a member of the Coordinating Committee immediately
upon becoming Comptroller, is that cooperation among
the agencies has been, and is, first rate. Of course,
there are, from time to time, some minor differences
of approach and viewpoint, but I know of no large
scale disagreements. It seems to me, that in our great
system of democratic society, differing views are not
only good, but indeed, healthy. However, I wish to
there are, from time to time, some minor differences
among the representatives of the Federal bank regulatory agencies.
Finally, with respect to the statutes governing the
operations of National and State banks, we do not
necessarily think it would be wise to engage in a campaign to obtain absolute uniformity in such statutes.
To do so could result in an undermining of the fundamental basis for the dual banking system. As the situation exists today in some States, the statutory lending
limits, real estate loan provisions, borrowing limitations, et cetera, are more liberal than Federal law.
In other States the reverse may be true. Overall, however, we do not think there are significant statutory
advantages inherent in either system, and the figures
quoted above appear to bear this out.
This Office has never proselytized for converts and
it never will, as long as I am Comptroller. We regard
a decision to convert as one entirely in management's
prerogative and we doubt but if it is in the long run best
interests of the dual system for any government or
trade group to seek to interfere with that freedom
of decision.
FARMERS HOME ADMINISTRATION LOANS
MARCH 25,

1968.

You seek a clarification from this Office concerning
loans purchased from and insured by the Farmers
Home Administration. As you indicate, this Office has
in the past held that such loans are subject to the provisions of both Exceptions 10 and 12 of the lending
limits (12 U.S.C. 84 (10), (12)). Exception 12 provides that loans made pursuant to it are subject to a
limitation of 25 percent of capital and surplus. Exception 10 of the lending limits provides that loans made
pursuant to it are not subject to any limitation based
on capital and surplus, provided two criteria are met:
(1) That such loans are secured or covered by unconditional guarantees, or by commitments to take over or purchase by the United States or any department thereof; and,
(2) That the guarantee or commitment is performed by
the payment of cash or its equivalent within 60 days after
demand.

280




The Secretary of Agriculture is empowered to make
certain types of real estate loans and to insure those
loans against possible default in payment. (See the
Consolidated Farmers Home Administration Act of
1961, and Title V of the Housing Act of 1949). When
the Secretary of Agriculture insures such a loan he
issues an insurance endorsement which guarantees the
payment of both the principal and interest on the
promissory note or bond evidencing the loan. As insurer, the Government agrees to pay to the holder of
the bond or note all payments to which he is entitled.
The Government's insurance endorsement is an obligation supported by the full faith and credit of the United
States and is incontestable except for fraud or misrepresentation of which the holder has actual knowledge
(7 U.S.C. 1929, 14 U.S.C. 1487 (d)). In addition, the
U.S. Treasury Department has ruled that notes insured by the Farmers Home Administration are acceptable security for the deposit of public moneys and
that they fall within the classification of obligations
guaranteed by the United States, that is, obligations
fully and unconditionally guaranteed both as to principal and to interest.
Furthermore, a bank that purchases a bond or note
from the Farmers Home Administration will always
receive its payments under the note or bond guarantee,
regardless of whether or not the borrower is in default
on the obligation.
It is clear from the foregoing that both requirements
of Exception 10 of the lending limits are met by loans
which are insured by the Fanners Home Administration. Therefore, such loans will in the future not be
subject to any limitation based upon capital and
surplus.
FEDERAL CROP INSURANCE
JANUARY 18,

1968.

Your letter, addressed to the U.S. Department of
Agriculture, has been forwarded to this Office for
reply. You inquire whether a National bank may act
as agent for the Federal Crop Insurance Corporation
in the sale of Federal crop insurance, and retain the
income and commissions received therefrom.
National banks are Federal instrumentalities and,
as such, they may be employed by the Federal Government as its financial agents and perform all reasonable
duties in connection therewith. See 12 U.S.C. 90.
Since the Federal Crop Insurance Corporation of
the U.S. Department of Agriculture has requested your
bank to act as agent in the sale of Federal crop insur-

ance, your bank may, at any office thereof, act as such
agent and retain the income and commissions received
therefrom.
HOUSING LOANS
JANUARY 11, 1968.

You inquire whether loans by National banks to
private developers or builders under the low rent housing program of the Department of Housing and Urban
Development qualify under Exception 10 of 12 U.S.G.
84 and Ruling 1600 of the Comptroller's Manual for
National Banks.
Under this program, a private developer or builder
(seller) enters into a contract to convey to a local
housing agency a project completed in accordance with
the agency's specifications. The contract and letter of
intent issued by the local agency to the seller declares
that the agency has entered into an annual contributions contract with the United States of America represented by the Department of Housing and Urban
Development. The annual contributions contract provides that if the local agency is unable to perform its
contract, the Department of Housing and Urban
Development will perform it in its stead.
The commitment of the Department of Housing
and Urban Development would bring the proposed
loan within the provisions of Exception 10 of 12 U.S.G.
84, if the project is fully protected by completion bonds.
In such circumstances, the takeover or guaranty agreement of the Department of Housing and Urban Development would be "unconditional" within the definition given to that word by the Comptroller of the
Currency.
MAY 31, 1968.
This refers to your inquiry concerning the interim
financing of low and moderate income fa