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Comptroller of the Currency
Administrator of National Banks







Annual Report 1977
Comptroller of the Currency

The Administrator of National Banks

John G. Heimann
Comptroller of the Currency

Letter of Transmittal
Treasury Department,
Office of the Comptroller of the Currency,
Washington, D.C., November 30, 1978

Sirs: Pursuant to the provisions of Section 333 of the United States
Revised Statutes, I am pleased to submit the 1977 Annual Report of the
Comptroller of the Currency.
Respectfully,
John G. Heimann,
Comptroller of the Currency.
The President of the Senate
The Speaker of the House of Representatives







Contents
Title of Section
I.
II.
III.
IV.
V.
VI.
VII.
VIII.
IX.
X.
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
Law Department
Fiduciary Activities of National Banks
International Banking and Finance
Administration
Consumer Affairs
Other Activities
Financial Operations of the Office of the Comptroller of the Currency

Page
1
3
5
15
17
29
31
35
39
41
43

Appendices
A. Merger Decisions, 1977
B. Statistical Tables
C. Addresses and Selected Congressional Testimony
Index

....




49
141
205
. 2 6 7

Statistical Tables
Table No.

Title

Page

1 Assets, liabilities and capital accounts of national banks, 1976 and 1977
2 Income and expenses of national banks, 1976 and 1977
3 National banks and banking offices, by states, December 31, 1977
4 Applications for national bank charters and charters issued, by states, calendar 1977
5 Applications for national bank charters pursuant to corporate reorganizations and charters issued, by
states, calendar 1977
6 Applications for conversion to national bank charter and charters issued, by states, calendar 1977 . . .
7 Branches of national banks, by states, calendar 1977
8 CBCT branches of national banks, by states, calendar 1977
9 De novo branch applications of national banks, by states, calendar 1977
10 De novo branches of national banks opened for business, by community size and by size of bank,
calendar 1977
11 Mergers, calendar 1977
12 Examinations of overseas branches, subsidiaries and EDP centers of national banks, 1972-1977 . . .
13 Outstanding external currency claims of U.S. banks on foreign borrowers, December 31, 1977
14 Office of the Comptroller of the Currency: balance sheets
15 Office of the Comptroller of the Currency: statements of revenue, expenses and Comptroller's equity . .
16 Office of the Comptroller of the Currency: statement of changes in financial position

VI




2
4
6
7
8
9
10
11
12
13
13
33
33
44
45
46

I. Condition of the National Banking System
National bank assets grew rapidly during 1977,
increasing 11.7 percent, to more than $651 billion.
That growth reflects the continuing growth of the economy as a whole through the year. The rate of increase
was the greatest since 1973, when assets increased
12.6 percent. The intervening year-end increases were
9.2 percent for 1974, 3.6 percent for 1975, and 7.3
percent, on an adjusted basis, for 1976.
Rapid growth in total assets was sparked by a resurgence in loan demand, which had been slow recovering from the severe recession which ended in
early 1975. Increased loan demand is seen in the 13.6
percent increase in loans (net of reserves), to $340.6
billion, during 1977 and in the steady rise of interest
rates during the year. Although that $41 billion
increase in net loans accounted for more than 60 percent of the year's growth in total assets, the asset category showing the greatest rate of increase was customers' liability on acceptances outstanding, which
jumped 33.6 percent. Acceptances are widely used in
the financing of international trade.
During the previous 2 years, when loan demand was
weak, national banks rapidly increased their holdings
of securities, particularly issues of the U.S. Treasury, in
an effort to maintain their earnings and improve their
liquidity. In 1977, that trend was reversed, with total
holdings of securities increasing only 1.7 percent, as
compared to 8.4 percent in 1976 and 17.2 percent in
1975. As a result of that relatively slow growth, securities declined to 21.2 percent of total assets, from 23.3
percent the previous year. The change was more
marked in investment holdings of U.S. Treasury issues.
Such holdings actually declined 5.1 percent during
1977, after increasing 17.4 percent in 1976 and 63.3
percent in 1975. National banks, however, showed a
greater willingness to invest in the tax-exempt issues of
states and political subdivisions.
The rapid growth in national bank assets was made
possible by a correspondingly rapid increase, 10.8
percent, in total deposits, which reached more than




$520 billion. For the first time since 1969, demand deposits grew at a faster rate than time and savings deposits. Therefore, the proportion of time and savings
deposits to total deposits declined slightly, from the
1976 peak of 59.9 percent to 59.3 percent at year-end
1977. That increase in banks' traditional deposit base
was complemented by an even more rapid increase in
purchased funds. A relatively small source of those
funds, liabilities for borrowed money, increased 41.6
percent. That increase reflects the relatively favorable
rates available on borrowings from the Federal Reserve Banks. Federal funds purchased and securities
sold under agreements to repurchase also increased
at the substantial rate of 14.8 percent, down sharply
from the 35.8 percent increase experienced in 1976.
Total equity capital of national banks increased 8.9
percent during 1977, to $45 billion. Despite that $3.7
billion increase, approximately 85 percent of which
came from retained earnings, the ratio of equity capital
to total assets declined slightly, to 6.9 percent, from
1976's level of 7.1 percent. Similarly, the ratio of equity
capital to risk assets, that is total assets less cash and
investment holdings of U.S. Treasury and U.S. government agency issues, was 9.2 percent, down slightly
from 9.4 percent the previous year. Reserves for possible loan losses increased 8.5 percent, to $3.9 billion.
Those reserves, which may be used to absorb loan
losses, were equal to 1.1 percent of total loans.
In addition to the domestic assets and liabilities detailed in this section, 99 national banks operated
foreign branches and subsidiaries, including Edge Act
subsidiaries in the U.S., which held an additional $145
billion in assets on a consolidated basis. Those assets
and liabilities, which are detailed in Table B-30 in Appendix B, continued to increase at a substantially
greater rate than those in the domestic National Banking System. During 1977, the increase was 20.2 percent, which followed an increase of 20.6 percent in
1976.

Table 1
Assets, liabilities and capital accounts of national banks, 1976 and 1977
(Dollar amounts in thousands)
Dec. 31, 1977
4,655 banks

Dec. 31, 1976
4,737 banks
Amount

Percent
distribution

Amount

Change,
Amount

Percent
distribution

1976-1977
Percent

Assets
Cash and due from banks

14.13 $ 15,993,567

21.02

129.990,494
52,612,836
17,005,880
57,384,363
2,987,415

22.28
9.02
2.91
9.84
.51

133,465,588
"49,922,441
17,822,093
62,791,959
2,929,095

20.49
7.66
2.74
9.64
.45

3.475.094
—2,690,395
816,213
5,407,596
—58,320

2.67
—5.11
4.80
9.42
—1.95

967,304
4,973,779

•17
.85

1,010,144
3,813,999

.15
.59

42,840
—1,159,780

4.43
—23.32

$ 76,078,031

Total, investment securities
U.S. Treasury securities
Obligations of other U.S. government agencies and corporations
Obligations of states and political subdivisions
Other bonds, notes and debentures
Federal Reserve stock and corporate stock
Trading account securities
Total securities

13.04 $ 92,071,598

135,931,577

23.30

138,289,731

21.23

2,358,154

1.73

Federal funds sold and securities purchased under agreements to resell
Total loans (excluding unearned income)

30.140.010
303,436,774

5.17
52.02

32,124.054
344,522,088

4.93
52.89

1,984.044
41,085,314

6.58
13.54

Reserve for possible loan losses
Loans, net of reserve
Direct lease financing
Bank premises, furniture and fixtures and other assets representing bank premises .
Real estate owned other than bank premises
Investments in unconsolidated subsidiaries and associated companies
Customers' liability to this bank on acceptances outstanding
Other assets

3.589.367
299,847,407

.62
51.40

3.895.860
340,626,228

.60
52.29

306.493
40,778,821

8.54
13.60

3,808,381
9,879,953
1,722,984
1,777,388
5,086,708
19,076,586

.65
1.69
.30
.31
.87
3.27

4,406,264
10,797,941
1,821,489
2,249,034
6,796,548
22,261,054

.68
1.66
.28
.34
1.04
3.42

597,883
917,988
98,505
471,646
1,709,840
3,184,468

15.70
9.29
5.72
26.54
33.61
16.69

583,349,025

100.00

651,443,941

100.00

68,094,916

11.67

147,018,169
242,873,535
2,126,653
38,088,306
5,917,740
27,332,987
6,051,345

25.20
41.63
.37
6.53
1.01
4.69
1.04

164,473,198
266,071,033
4,820,633
41,964,341
5,587,928
30,612,999
6,713,892

25.25
40.84
.74
6.44
.86
4.70
1.03

17,455,029
23,197,498
2,693,980
3,876,035
—329,812
3,280,012
662,547

11.87
9.55
126.68
10.18
—5.57
12.00
10.95

469,408,735

80.47

520,244,024

79.86

50,835,289

10.83

188,175,050
281,233,685

32.26
48.21

211,650,059
308,593,965

32.49
47.37

23,475,009
27,360,280

12.48
9.73

51,678,941
2,741,434
406,112
5,140,675
9,921,683

8.86
.47
.07
.88
1.70

59,336,268
3,882,171
473,816
6,848,094
12,625,958

9.11
.60
.07
1.05
1.94

7,657,327
1,140,737
67,704
1,707,419
2,704,275

14.82
41.61
16.67
33.21
27.26

539,297,580

92.45

603,410,331

92.63

64,112.751

11.89

2,726,628

.47

3,034,830

.46

308,202

11.30

18,754
9,106,275
15,853,738
15,271,833
1,074,217

1.56
2.72
2.62
.18

25,246
9,551,745
16,649,723
17,733,303
1,038,763

1.47
2.56
2.72
.16

6,492
445,470
795,985
2,461,470
^35,454

34.62
4.89
5.02
16.12
—3.30

Total assets .
Liabilities
Demand deposits of individuals, partnerships and corporations
Time and savings deposits of individuals, partnerships and corporations
Deposits of U.S. government
Deposits of states and political subdivisions
Deposits of foreign governments and official institutions
Deposits of commercial banks
Certified and officers' checks
Total deposits
Demand deposits
Time and savings deposits
Federal funds purchased and securities sold under agreements to repurchase
Liabilities for borrowed money
Mortgage indebtedness
Acceptances executed by or for account of this bank and outstanding
Other liabilities
Total liabilities
Subordinated notes and debentures
Equity Capital
Preferred stock
Common stock
Surplus
Undivided profits
Reserve for contingencies and other capital reserves
Total equity capital
Total liabilities, subordinated

41,324,817
notes and debentures

and equity capital

7.08

44,998,780

6.91

3,673,963

8.89

583,349,025

100.00

651,443.941

100.00

68,094,916

11.67

NOTE: Dashes indicate amounts less than 0.005 percent. Data reflect consolidation of all majority-owned bank premises, subsidiaries, and all significant domestic majority-owned subsidiaries, with the exception of Edge Act subsidiaries.




II. Income and Expenses of National Banks
Total income and expenses of the National Banking
System increased substantially during 1977, reflecting
both the continuing increase in national bank assets
and a steady rise in interest rates. The continued economic recovery was paralleled by an increase in national banks' net income of $547.7 million, or 11.9 percent. That was the highest rate of increase for net
income since 1973, and substantially exceeded last
year's increase of 7.8 percent.
During 1977, total operating income increased just
over 12 percent, to $53.8 billion. That rate of increase
was slightly less than that for consolidated foreign and
domestic assets, which increased 13.1 percent from
$704.3 billion to $796.9 billion. Total expenses
increased 11.5 percent, totalling $47 billion for the
year. The faster growth of total operating income produced a $915 million increase in income before taxes
and securities gains. The 15.5 percent increase in net
operating earnings was trimmed by a sharp increase
in applicable income taxes of 23 percent, to $1.8 billion. Also, gains on the sales of securities for the year
netted only $36 million, down considerably from the
$96 million figure for 1976. The rate of return on assets
was 0.79 percent, unchanged from 1976.
Interest and fees on loans totalled $35.4 billion in
1977, an increase of 14.2 percent compared to 1976.
That increase roughly parallels the 15.3 percent
increase during the year in loans at foreign and
domestic offices. As a result, loan-related income rose
to 65.9 percent of total operating income. The continuing growth in loan demand carried over to similar
credit transactions as reflected in the rapid increase in
income from direct lease financing, which jumped 31.6
percent, to $538 million, and in income on Federal
funds sold and securities purchased under
agreements to resell, which increased 24.6 percent, to
$1.5 billion.
Investment securities holdings, which increased
slowly during the year, accounted for 14.9 percent of
total operating income. That continued the trend of decreasing reliance on income from securities which was
interrupted in 1975, by the recession. Although holdings of U.S. Treasury securities actually decreased
during 1977, income on those investments rose 3.9




percent; a result of the steadily rising discount rate on
Treasury bills. Revenues from obligations of states and
political subdivisions totalled $2.9 billion, showing an
increase of 4.6 percent over 1976 levels.
On the expense side, steadily rising interest rates
during 1977 did not have an apparent effect on the
cost of deposits. Total interest expense on deposits
was $23.1 billion, an increase of 10.7 percent over
1976. However, year-end 1977 total deposits in
domestic and foreign offices of national banks were
12.2 percent higher than the previous December. That
less than proportionate increase in expense is due, in
part, to the unusual increase in demand deposits at
domestic offices. Deposits in foreign offices, which
equal just over 20 percent of total deposits, accounted
for 30.8 percent of total interest expense for deposits.
Other interest expenses increased more rapidly. The
cost of Federal funds purchased and securities sold
under agreements to repurchase grew $848 million, or
37.4 percent, during 1977. Also, the $604 million paid
in 1977 on borrowed money was 32.8 percent higher
than the comparable figure for 1976. Total interest expense, including that on subordinated debt, equalled
$27 billion, which is 57.6 percent of total operating expenses.
Salaries and employee benefits increased by 10.6
percent. The proportion of total expenses that item represents declined slightly, to 20.2 percent. The most
substantial improvement in expenses was the $265 million decline in the provision for possible loan losses.
That item, which increased sharply in 1975 as the result of loan problems arising from the recession, was
maintained at a very high level during 1976. After the
second full year of economic growth, there has been
sufficient improvement in loans to allow for the reduction of that expense.
During 1977, national banks not only enjoyed a substantial growth in net income, but also, the trend toward retaining a larger portion of those earnings was
continued. Cash dividends totalling $1,994 million
were paid during 1977. Those dividends equalled 38.8
percent of earnings. The comparable pay-out ratio was
39.7 percent in 1976 and 42.8 percent in 1975.

Table 2
Income and expenses of national banks, * 1976 and 1977
(Dollar amounts in thousands)
1976
4,737 banks
Amount
Operating income:
Interest and fees on loans
Interest on balances with banks
Income on Federal funds sold and securities purchased under agreements to resell
in domestic offices
Income on securities:
U.S. Treasury securities
Obligations of other U.S. government agencies and corporations
Obligations of states and political subdivisions
Other bonds, notes and debentures
Dividends on stock
Income from direct lease financing
Income from fiduciary activities
Service charges on deposit accounts in domestic offices
Other service charges, commissions, and fees
Other income

7977
4,655 banks

Percent
distribution

Amount

Change, 1976-1977

Percent
distribution

Amount

Percent

64.62 $ 35,446,288
6.14
3,243,048

65.90 $
6.03

4,415,242
296,392

14.23
10.06

1,229,182
7,696,571
3,193,274
1,210,149
2,801,076
492,072
62,149
408,438
1,029,203
911,467
1,441,484
1,265,214

2.56
16.03
6.65
2.52
5.83
1.03
.13
.85
2.14
1.90
3.00
2.63

1,532,133
8,040,405
3,319,382
1,212,580
2,929,628
578,815
61,291
537,633
1,131,299
986,925
1,566,644
1,243,253

2.85
14.95
6.17
2.25
5.45
1.08
.11
1.00
2.10
1.84
2.91
2.31

302,951
343,834
126,108
2,431
128,552
86,743
—858
129,195
102,096
75,458
125,160
—21,961

24.65
4.47
3.95
.20
4.59
17.63
—1.38
31.63
9.92
8.28
8.68
—1.74

Total operating income
Operating expenses:
Salaries and employee benefits
Interest on time certificates of deposit of $100,000 or more issued by domestic
offices
Interest on deposits in foreign offices
Interest on other deposits
,
Expense of Federal funds purchased and securities sold under agreements to
repurchase in domestic offices
Interest on borrowed money
Interest on subordinated notes and debentures
Occupancy expense of bank premises, net
Furniture and equipment expense
Provision for possible loan losses (or actual net loan losses)
Other expenses

48,021,410

100.00

53,788,919

100.00

5,767,509

12.01

8,575,522

20.37

9,486,853

20.20

911,331

10.63

4,327,891
5,962,140
10,595,809

10.28
14.16
25.17

4,031,501
7,123,000
11,956,920

8.59
15.17
25.46

—296,390
1,160,860
1,361,111

—6.85
19.47
12.85

2,268,120
454,745
179,190
1,548,312
1,015,489
2,250,427
4,925,748

5.39
1.08
.42
3.68
2.41
5.34
11.70

3,116,094
603,986
202,668
1,710,294
1,140,820
1,985,113
5,598,346

6.64
1.29
.43
3.64
2.43
4.23
11.92

847,974
149,241
23,478
161,982
125,331
—265,314
672,598

37.39
32.82
13.10
10.46
12.34
—11.79
13.65

Total operating expenses
Income before income taxes and securities gains or losses
Applicable income taxes (domestic and foreign)
Income before securities gains or losses
Securities gains (losses), gross
Applicable income taxes (domestic and foreign)
Securities gains (losses), net
Income before extraordinary items
Extraordinary items, net of tax effect

42,103,393
5,918,017
1,436,755
4,481,262
168,493
72,596
95,897
4,577,159
13,891
4,591,050

100.00

46,955,595
6,833,324
1,767,061
5,066,263
52,456
16,000
36,456
5,102,719
36,029
5,138,748

100.00

4,852,202
915,307
330,306
585,001
—116,037
—56,596
—59,441
525,560
22,138
547,698

11.52
15.47
22.99
13.05
—68.87
—77.96
—61.98
11.48
159.37

Net income
Cash dividends declared:
On common stock
On preferred stock
Total cash dividends declared
Ratio to income before income taxes and securities gains or losses:
Applicable income taxes
Net securities gains
Extraordinary charges or credits
Ratio to total operating income:
Salaries and wages
Interest on deposits
All other operating expenses
Total operating expenses
Net income

$ 31,031,046
2,946,656

11.93

1,820,000
1,088

1,993,176
1,090

173,176
2

9.52
.18

1,821,088

1,994,266

173,178

9.51

24.28
1.62
.23

25.86
.53
.53

17.86
43.49
26.33
87.68
9.56

17.64
42.97
26.69
87.30
9.55


* 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.


Structural Changes in the National Banking
System
The National Banking System consisted of 4,655
banks at year-end 1977. Of that number, 2,183, or 46.9
percent operated 17,066 traditional branches. In addition to those 21,721 offices, banking services were
provided at 527 customer-bank communications terminal (CBCT) locations.
During 1977, the number of banks operating with national charters declined by 82. It was the second
consecutive year to show a decline in total number of
national banks. There are several reasons for that
trend. Two of the most important are the expense of
Federal Reserve System membership and the liberalization of state branching laws. All national banks must
be members of the Federal Reserve System, and that
expense is inducing banks to convert out of the National Banking System as well as encouraging new
banks to seek state rather than national charters. When
states liberalize their branching laws, the result is often
a decline in number of banks as existing banks
merge to form branching systems.
The number of new national banks chartered declined for the fifth consecutive year. The total of 35
newly organized banks entering the system was the
lowest since 1969, when only 16 new national banks
were chartered. Texas, a large unit banking state, accounted for the most of any state, with 9 new banks
and a total of 604 national banks in operation at yearend 1977. Illinois, also a large unit banking state,
continued to be second in the number of operating national banks, with 423 at year-end.
Florida, which had been a unit banking state, moved
to limited area branching in 1977. Because the
McFadden Act permits national banks to branch only
to the same extent as state banks are permitted by
state law, the change in Florida's statute had a definite
impact on national banks in that state. Although Florida
was second in number of newly organized national
banks, with four for the year, that increase was more
than offset by a large number of mergers changing
existing banks to branches. The result was a 14 percent decline for the year in national banks in operation;
there were 263 national banks in Florida at year-end
1977.
The decline in new national banks chartered follows
from a decrease of 29 percent in applications received
and from an increase in the proportion of disapprovals.




Of the 78 applications concluded during 1977, almost
54 percent were rejected. That is the highest rejection
rate in at least 10 years, and compares with 47 percent
in 1976, 44 percent in 1975, 41 percent in 1974 and 33
percent in 1973.
The reduction in new banks starting operations
under national charters is matched by a decline in
existing banks switching to national charters. Only six
state-chartered banks converted into the National
Banking System in 1977. That is the lowest number
since 1960, when there were also only six conversions
to national status. The inflow from conversions was
more than offset by the 44 national banks that chose to
convert to state charters during 1977.
Although the number of national banks declined, national banking services were available at more locations because of the continuing growth of branch banking. During 1977, 608 de novo branches were opened
by national banks. Florida led with 97 new branches,
again the result of the changed branching statutes.
Over the year, 342 branches left the system. With the
154 branches that entered the system through mergers and conversions, there was a net gain of 420 national bank branches during the year.
The de novo branches opened during the year were
concentrated in smaller communities. Nearly 60 percent were opened in places with populations of less
than 25,000 and only 19 percent were in cities with
populations of over 100,000. Almost 55 percent of the
new branches were established by banks with less
than $100 million in assets, compared to 44 percent in
1976. The largest national banks, those with $1 billion
or more in assets, accounted for 112, or about 18 percent of openings.
CBCT's have been used by banks for several years.
However, a court ruling that those terminals are subject to the state limitations on locations made it necessary for the Office to set up certification procedures for
such operations. 1977 was the first full year under
those procedures, so the dramatic increase in number
of CBCT branches in part represents the recognition of
facilities that were in operation before the ruling. Only
12 CBCT's were certificated at the beginning of the
year; however, 564 were certificated during the year.
After 49 discontinued operations, 527 were left in operation at year-end 1977.

Table 3
National banks and banking offices, by states, December 31, 1977
National banks
Unit

Total
All national banks
50 states
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia . . . .
Florida

With
branches'^

Number
of
branches'^

Number
of
offices^

4,655
4,654
97
6
3
72
58
133
21
5
15
263

2,472
2,471
35
1
1
17
14
101
3
2
3
147

2,183
2,183
62
5
2
55
44
32
18
3
12
116

17,066
17,060
317
77
308
169
2,741
32
205
4
130
221

21,721
21,714
414
83
311
241
2,799
165
226
9
145
484

Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine

64
2
6
423
121
99
160
82
53
17

14
0
0
297
30
50
111
22
11
1

50
2
6
126
91
49
49
60
42
16

322
11
170
145
496
88
72
242
267
118

386
13
176
568
617
187
232
324
320
135

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

36
72
123
204
36
113
56
117
4
41

6
7
17
175
2
59
48
81
1
8

30
65
106
29
34
54
8
36
3
33

338
451
835
37
233
75
8
53
82
93

374
523
958
241
269
188
64
170
86
134

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

100
40
127
28
43
218
193
7
233
5

10
10
32
6
21
48
135
1
78
0

90
30
95
22
22
170
58
6
155
5

1,043
116
1,505
801
26
1,058
58
317
1,392
115

1,143
156
1,632
829
69
1,276
251
324
1,625
120

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

19
32
73
604
12
14
103
21
106
128
46

5
18
8
596
7
5
11
3
83
84
46

14
14
65
8
5
9
92
18
23
44
0

307
80
358
8
107
45
687
586
23
88
0

326
112
431
612
119
59
790
607
129
216
46

1
0

1
0

0
0

0
6

1
6

Puerto Rico ..
Virgin Islands
District of Columbia - all*

131
147
16
13
* Includes national and non-national banks in the District of Columbia, all of which are supervised by the Comptroller of the Currency.
tFor the purposes of this table, CBCT's are not considered branches or offices. For information on those branches, see Table 8, on p. 11 of this
report.




Table 4
Applications for national bank charters* and charters issued, by states, calendar 1977
Received^

Approved

Disapproved

Withdrawn

Pending
December 31,
1977

Chartered

120

34

42

2

42

35

5
0
0
3
6
4
1
1
2
15

0
0
0
0
0
4
0
1
1
5

1
0

4
0

0
2
2
0
1
0
1
8

0
0
0
0
0
0
0
0
0
0

0
1
4
0
0
0
0
2

0
0
0
1
2
1
0
0
0
4

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

2
1
0
1
1
0
0
1
4
0

0
1
0
0
0
0
0
0
1
0

1
0
0
0
1
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

1
0
0
1
0
0
0
1
3
0

0
0
0
3
1
0
0
0
0
0

Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire

0
1
7
0
3
1
0
1
0
0

0
0
4
0
1
1
0
0
0
0

0
0
0
0
1
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

0
1
3
0
1
0
0
1
0
0

0
0
2
1
0
0
0
0
0
0

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

0
4
2
0
0
2
4
0
0
0

0
1
1
0
0
1
0
0
0
0

0
3
1
0
0
1
2
0
0
0

0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
2
0
0
0

2
0
1
0
1
1
2
0
0
0

2
1
0
35
1
0
0
1
2
2
2

1
0
0
11
0
0
0
0
0

1
0
0
11
0
0
0
0
1

0
0

1
1

0
0
0
1
1
0
0
0
0
0
0

0
1
0
12
0
0
0
1
1
1
1

0
0
0
9
0
0
0
1
2
1
0

0
2

0

0
2

0
0

0
0

0
0

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

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

*Excludes conversions and corporate reorganizations,
tincludes 70 applications pending as of December 31, 1976.




0

Table 5
Applications for national bank charters pursuant to corporate reorganizations and charters issued, by states, calendar
1977
Received*

Approved

Disapproved

Withdrawn

Pending
December 31,
1977

Chartered
25

31

23

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

1
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

1
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine

0
0
0
1
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

0
0
0
1
0
0
0
0
0
0

0
2
0
0
1
0
0
0
0
0

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

0
2
2
0
0
0
0
0
0
0

0
1
2
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

0
1
0
0
0
0
0
0
0
0

0
1
2
3
0
0
0
0
0
0

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

0
0
0
1
0
8
0
0
0
0

0
0
0
0
0
8
0
0
0
0

0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

0
0
0
1
0
0
0
0
0
0

0
0
0
0
0
6
0
0
0
0

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

0
0
1
14
0
0
1
0
0
0
0

0
0
1
11
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0
0

0
0
0
3
0
0
1
0
0
0
0

0
0
1
9
0
0
0
0
0
0
0

Virgin Islands
Puerto Rico

0
0

0
0

0
0

0
0

0
0

0
0

Total

* Includes 1 application pending as of December 31, 1976.




Table 6
Applications for conversion to national bank charter and charters issued, by states, calendar 1977
Received*
Total

Approved

Rejected

Withdrawn

Pending
December 31,
1977

Chartered

13

6

1

0

6

6

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

0
0
0
0
0
0
0
0
0
2

0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
1

0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
1

0
0
0
0
0
0
0
0
0
0

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

1
0
1
0
0
1
0
0
0
0

0
0
1
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

1
0
0
0
0
1
0
0
0
0

0
0
1
0
0
0
0
0
0
0

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

0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

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

1
2
0
0
0
0
0
0
0
0

0
2
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

1
0
0
0
0
0
0
0
0
0

0
2
0
0
0
0
0
0
0
0

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

0
1
0
2
0
0
0
0
2
0
0

0
0
0
1
0
0
0
0
2
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
1
0
0
0
0
0
0
0

0
0
0
1
0
0
0
0
2
0
0

* Includes five applications pending from prior years




Table 7
1
Branches * of national banks, by states, calendar 1977 r
Branches
in
operation
December 31,
1976
All national banks
50 states
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida

16,646
16.640
300
73
307
172
2,708
25
262
4
128
66

De novo
branches
opened for
business
Jan. 1 to
Dec. 31, 1977
608
608
17
6
4
3
64
7
0
0
3
97

Branches
acquired
through
merger or
conversion
Jan. 1 to
Dec. 31, 1977
154
154
0
0
0
0
3
0
0
0
0
61

Existing
branches
discontinued
or
consolidated
Jan. 1 to
Dec. 31, 1977
342
342
0
2
3
6
34
0
57
0
1
3

Branches
in
operation
December 31,
1977
17,066
17,060
317
77
308
169
2,741
32
205
4
130
221

Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine

318
11
167
110
483
85
70
228
254
117

7
0
1
36
18
2
4
15
16
2

3
0
2
1
0
1
0
0
0
0

6
0
0
2
5
0
2
1
3
1

322
11
170
145
496
88
72
242
267
118

Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire

365
506
792
28
220
69
7
52
78
89

9
7
47
11
11
7
1
1
4
6

2
0
1
0
3
0
0
0
0
0

38
62
5
2
1
1
0
0
0
2

338
451
835
37
233
75
8
53
82
93

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

1,012
115
1,514
788
23
1,018
54
310

25
1
18
12
2
36
4
9
29
1

18
0
4
4
2
5
0
0
8
0

12
0
31
3
1
1
0
2
14
1

1,043
116
1,505
801
26
1,058
58
317
1,392
115

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

299
80
353
5
99
47
679
556
26
84
0

9
0
12
3
6
2
15
13
1
4
0

0
0
0
0
2
0
13
20
0
1
0

1
0
7
0
0
4
20
3
4
1
0

307
80
358
8
107
45
687
586
23
88
0

6

0

0

0

6

129

3

0

1

131

Virgin Islands
District of Columbia - allt

i ,oby

115

*Does not include CBCT or foreign branches. For those branches, see tables 8 and B-35.
tincludes national and non-national banks in the District of Columbia, all of which are supervised by the Comptroller of the Currency.


10


Table 8
CBCT branches* of national banks, by states, calendar 1977

0
0
0
0
0
0
0
0
0
0

Existing
branches
discontinued
or
consolidated
Jan. 1 to
Dec. 31, 1977
49
0
0
0
0
0
0
0
0
0
1

14
0
1
0
1
74
30
2
3
0

0
0
0
0
0
0
0
0
0
0

1
0
0
0
0
30
0
0
0
0

13
0
1
0
1
44
30
2
3
0

0
0
0
0
1
0
0
0
0
0

3
1
0
0
0
0
0
73
0
0

0
0
0
0
0

2
0
0
0
0
0
0
0
0
0

1
1
0
0
1
0
0
73
0
0

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

1
0
4
1
0
0
0
0
0
0

2
0
80
0
11
13
66
8
1
0

o

0
0
0
0

0
0
9
0
0
0
0
0

o

o
0

3
0
75
1
11
13
66
8
1
0

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

1
0
0
0
0
0
1
0
0
0
0

4
3
43
0
0
0
14
9
0
69
0

0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
1
0
5
0

5
3
43
0
0
0
15
8
0
64
0

District of Columbia - allt

1

0

0

0

1

12
1
0
0
1
0
0
0
0
1
0

De novo
branches
opened for
business
Jan. 1 to
Dec. 31, 1977
564
2
2
0
1
3
0
0
0
0
31

Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine

0
0
0
0
0
0
0
0
0
0

Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire

Branches
in
operation
December 31,
1976
All national banks
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida

Branches
acquired
through
merger or
conversion
Jan. 1 to
Dec. 31, 1977
0

o
0
0
0
0
0
0
0

0

o

Branches
in
operation
December 31,
1977
527
3
2
0
2
3
0
0
0
1
30

* Customer-Bank Communications Terminal branches.
f Includes national and non-national banks in the District of Columbia, all of which are supervised by the Comptroller of the Currency.




11

Table 9
De novo branch applications of national banks, by states, calendar 1977
Received*
Total

997

Approved
703

Rejected

Abandoned

75

Pending
December 31, 1977

211

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

30
7
19
16
86
5
2
1
10
82

25
6
16
12
69
5
0
1
5
53

1
1
2
0
1
0
0
0
3
5

0
0
0
1
0
0
1
0
0
0

4
0
1
3
16
0
1
0
2
24

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

13
0
6
64
29
7
6
17
17
4

9
0
5
55
20
5
4
14
16
3

0
0
0
0
3
0
0
0
0
0

0
0
0
1
0
0
0
0
0
0

4
0
1
8
6
2
2
3
1
1

19
5
131
5820
17
0
5

10
3
45
42
20
13
0
4
5
6

0
1
49
2
0
2
0
0
0
0

1
0
1
0
0
1
0
0
0
0

1
36
14
0
1
0
1
3
0

25
9
18
21
2
54
13
16
43
1

17
7
14
15
2
37
5
14
37
1

0
0
0
0
0
0
0
1
1
0

0
0
0
1
0
0
0
0
0
0

2
4
5
0
17
8
1
5
0

16
5
3
3
19
18
13
11
8
5
2
2
16
14
13
12
4
4
11
9
0
0
* Includes 256 applications pending as of December 31, 1976.

1
0
1
0
0
0
1
0
0
0
0

0
0
0
0
1
0
0
0
0
0
0

10
0
0
2
2
0
1
1
0
2
0

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

12



Table 10
De novo branches * of national banks opened for business, by community size and by size of bank,
calendar 1977

Population of cities

Branches

Total resources of banks
(millions of dollars)

Branches

Less than 5,000

122

Less than 10.0

40

5,000 to 24,999
25,000 to 49,999
50,000 to 99,999
100,000 to 249,999
250,000 to 499,999

239
86
46
60
16

10.0 to 24.9
25.0 to 49.9
50.0 to 99.9
100.0 to 999.9

77
92
125
162

1,000.0 and over

JJJ2

Total

608

500,000 to 1,000,000
Over 1,000,000
Total

24
__T5
608

*Does not include CBCT branches.

Table 11
Mergers*, calendar 1977
Transactions
involving
two or more
operating banks

Others pursuant
to
corporate
reorganization

Total

Applications received, 1977:
Mergers
Consolidations
Purchases and Assumptions

42
1
24

25
4
0

67
5
24

Total received

67

29

96

Approvals issued, 1977:
Mergers
Consolidations
Purchases and Assumptions

44
0
20

23
4
0

67
4
20

Total approvals

64

27

91

Denials issued, 1977:
Mergers
Consolidations
Purchases and Assumptions

0
0
1

0
0
0

0
0
1

1

0

1

3
0
1

1
1
0

4
1
1

4

2

6

47
1
22

22
2
0

69
3
22

70

24

94

Total denials
Abandoned, 1977:
Mergers
Consolidations
Purchases and Assumptions
Total abandoned
Consummated, 1977:
Mergers
Consolidations
Purchases and Assumptions
Total consummated

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




13




IV. Bank Examinations and Related Activities
By statute, all national banks are required to be
examined twice in each calendar year. However, the
Comptroller of the Currency, in the exercise of his discretion, may waive one such examination in each
2-year period, or may cause such examinations to be
made more frequently, if considered necessary. The
Code of the District of Columbia authorizes the Comptroller to examine each non-national bank and trust
company located in the District.
For the year ended December 31, 1977, the Office
examined 2,886 banks, 838 trust departments, 96 affiliates and subsidiaries and conducted 61 special
examinations. The Office received 47 applications to
establish new banks, processed 721 applications for
de novo branches and 2 applications to convert state
banks to national banking associations.
National bank examinations are designed to determine the condition and performance of banks, the




quality of their operations and the capacity of management and to enforce compliance with federal laws.
At year-end 1977, the Office had fully implemented new
examination policies and procedures which place
greater emphasis on analysis and interpretation of financial data and less on detailed verification. Also,
considerable reliance is placed on systems for internal
control and work performed by internal and external
auditors.
As of December 31, 1977, the Office employed
2,082 examiners, 1,939 commercial and 143 trust
examiners.
A select group of examiners especially trained in
computer operation and technology examine bank
computer operations. This area of the examination
function also has been updated to coincide with the
new concepts employed by the Office in regular bank
examination.

15




V. Law Department
The Law Department advises the Comptroller of the
Currency and his staff on legal matters arising in the
administration of laws and regulations governing the
National Banking System. Attorneys in the Law Department deal directly with the management of national
banks, with bank attorneys and accountants and with
the staffs of other government agencies and
Congressional committees. The Department also participates in litigation involving the Office and exercises
certain direct responsibility in enforcement and securities matters. Some of the Department's major activities
are described below.

Litigation
As of January 1, 1977, there were 56 lawsuits pending
in the Litigation Division. During the year 27 new cases
were filed and 28 cases were closed. As of December
31, 1977, 55 cases were pending.
Several significant cases were commenced or
concluded during 1977. For only the second time
since enactment of the Financial Institutions Supervisory Act in 1966, the Comptroller's authority to issue a
temporary cease and desist order was challenged. In
First City National Bank of Jacksonville v. Heimann,
Civ. No. 77-729 (M.D. Fla.), the court denied a motion
for a temporary restraining order to restrain the Comptroller's enforcement of the order. Two final cease
and desist orders issued by the Comptroller after a
hearing before an administrative law judge were also
challenged. In Groos National Bank of San Antonio, et
al. v. United States, et ai, No. 77-1398 (5th Cir.), the
bank petitioned the court for review of the Comptroller's order. Oral argument in this case was scheduled
for March 1978. In First National Bank of Eden v. Department of the Treasury, 568 F.2d 610 (8th Cir. 1978),
the Eighth Circuit Court of Appeals, on a petition to review, upheld the Comptroller's order which, among
other things, limited salaries paid to bank personnel
and ordered the bank's president and vice president
to reimburse the bank for bonuses paid to them in
1975. This is believed to be the first decision by a U.S.
court of appeals on a petition to review a final order issued by a bank regulatory agency under the Financial
Institutions Supervisory Act.
Two cases involving the sale of credit life insurance
were filed or decided during 1977. In First National




Bank of La Marque v. Smith, 436 F. Supp. 824 (S.D.
Tex. 1977), the court upheld informal directives from
the Comptroller's Office instructing the banks to cease
paying credit life insurance income to insiders. The
court held that the income belonged to the bank, and
that the Comptroller has not only the right but the obligation to bring cease and desist proceedings to halt
bank insiders from taking the income for themselves.
An appeal is now pending in the U.S. Court of Appeals
for the Fifth Circuit. In another case, IBAA v. Heimann,
Civ. No. 77-2189 (D. D.C.), the Independent Bankers
Association of American sued to invalidate the Comptroller's regulation prohibiting payment of credit life
insurance income to insiders of national banks. On
December 29, 1977, the court denied the IBAA's motion for a temporary restraining order and preliminary
injunction, and the regulation went into effect as
scheduled on January 1, 1978. A hearing on the
IBAA's motion for a permanent injunction will be held in
1978.
In the area of bank powers, the U.S. Court of Appeals for the Ninth Circuit in M&M Leasing Corp. v.
Smith, 563 F.2d 1377 (9th Cir. 1977), upheld the Comptroller's conclusion that certain types of leasing are
the functional equivalent of extensions of credit and
are permissible for national banks. In New York Stock
Exchange v. Bloom, 562 F.2d 736 (D.C. Cir. 1977), the
circuit court of appeals reviewed a lower court decision which upheld an informal expression of opinion by
the Comptroller that a bank automatic stock purchasing service does not violate the Glass-Steagall Act of
1933. On review, the court of appeals held that the
Comptroller's opinions were not ripe for judicial review
and ordered the lower court to dismiss the complaint.
In Association of Data Processing Service Organizations, Inc. v. Citibank, N.A. and Robert Bloom, 11 Civ.
2574 (S.D. N.Y.), the complaint alleged that a national
bank is selling excess capacity on its computers in violation of the National Bank Act.
In Consumers Union of the United States, Inc. v.
Robert Bloom, Civ. No. 76-1529 (D. D.C), the U.S. District Court for the District of Columbia rejected the argument that the disclosure policy of the Truth-inLending Act supercedes the exemption from disclosure accorded to bank examination reports in the
Freedom of Information Act. The court held that the

17

Comptroller's reports of examination of national banks
on the subject of consumer protection statutes need
not be disclosed to the public.
In National State Bank of Elizabeth v. Heimann, Civ.
No. 76-1479 (D. N.J.), a federal district court ruled that
the Comptroller could not issue a charter to a new national bank which would exercise only trust powers. An
appeal has been taken to the U.S. Court of Appeals for
the Third Circuit.
National Urban League, et al. v. Office of the Comptroller of the Currency, Civ. No. 76-0718 (D. D.C.), a
suit brought by 10 civil rights and other organizations
contesting the enforcement of the fair housing laws by
the federal financial institution regulatory agencies,
was settled between the Comptroller's Office and the
organizations on mutually satisfactory terms.
Finally, numerous cases have been brought as a result of the failure of national banks, including U.S. National Bank in San Diego and Franklin National Bank in
New York. All of the federal district courts which have
ruled to date have held that the examination and
supervisory powers of the federal banking agencies
are not intended for the specific benefit of the bank
involved and do not result in an actionable duty to the
bank or its shareholders on the part of the agencies.

Enforcement
The number of formal administrative actions under the
Financial Institutions Supervisory Act of 1966 in 1977,
was nearly 50 percent greater than the 1976 total, with
attention directed to matters ranging from violations of
laws to questionable managerial practices. There were
55 administrative actions during the year; 30 of
which dealt with insider transactions, seven with overdraft problems and six with possible abuse of correspondent accounts. In addition to their function of halting certain banking practices which the Comptroller's
Office considers unsafe or unsound, most of the
agreements and orders mandate positive action in
areas such as budgeting for operating expenses, improving management competency, and developing or
improving lending and investment policies. Particular
attention has been paid to abuse of banks by insiders
and controlling shareholders. Several cases have required further investigation by audit committees of the
banks and follow-up on the findings.
As in previous years, the Law Department's enforcement staff participated in examinations leading to
major white-collar crime referrals. In one case, the enforcement staff participated with other Washington and
regional personnel when examiners uncovered substantial potential criminal activity on the part of a
controlling stockholder. A temporary cease and desist
order was issued immediately while the investigation
proceeded. Four senior officials of the bank resigned
during the examination. A permanent cease and desist
order prohibited the controlling stockholder from
operating or influencing the bank. Further examination
uncovered possible links to organized crime and a potential multimillion dollar fraud involving international
loans and currency. Numerous violations of banking
laws and regulations were also discovered, and criminal referrals were made to the Treasury and the Justice
18



Departments. The Enforcement Division is continuing
the coordination of that investigation with local, state
and federal authorities.
In an effort to strengthen the OCC's ability to better
identify factual situations that may constitute bank
frauds and related white-collar crimes, a special training session was conducted under the direction of the
Enforcement Division. Experienced examiners from
each region received concentrated instruction in a
number of subjects such as investigative techniques,
presentation of evidence, methods of identifying fraud
and working with investigators and prosecuting agencies. Representatives from various federal and state
prosecutorial and investigative agencies presented
several portions of that seminar, while experts from
within the OCC handled matters concerning examinations and testifying as an expert witness. The division
also is developing a computer system which will record all criminal referrals made by the Comptroller's
Office. It is hoped that the system will lead to better
coordination with the Department of Justice, the 94
United States Attorneys' offices and state and local
prosecuting authorities.
Each of the 51 actions taken during 1977 under the
Financial Institutions Supervisory Act is described below. (Similar detail is available for 1976 on pp. 228-230
of this report.)
1. A Letter Agreement was entered into with a bank
requiring corrections of past violations of law
including reduction of loans in excess of the
bank's legal lending limit, reduction of classified
assets through collection or additional collateral,
formulation of a capital improvement program,
correction of credit file deficiencies, an increase in
the loan valuation reserve, revisions in the loan
policy, and implementation of a formal audit plan.
In addition, the bank was to ensure that income
from the sale of credit life insurance would not be
improperly diverted from the bank's earnings.
2. An Agreement prohibited further violations of the
legal lending limit to bank affiliates and required
correction of past violations. The bank was required to eliminate criticized loans and to draft
new loan policies for the regional administrator's
approval. Specific components to be included in
the loan policies were listed, and the bank was required to secure adequate credit information on all
loans. The Agreement required the appointment of
a discount committee, an examining and audit
committee, and a compliance committee, as well
as the formulation of a plan for capital augmentation.
3. An Agreement prohibited further violations of the
bank's legal lending limit and forbade loans to officers and directors which violated 12 USC 375a.
Past violations of law were to be corrected. It required the board to adopt specific loan policies
and required approval of the regional administrator before their adoption. The Agreement specifically restricted the bank's president from selfdealing practices. It also required reductions of
several large concentrations of credit, elimination
of criticized assets, and the maintenance of an

4.

5.

6.

7.

8.

adequate loan valuation reserve. The bank was
required to submit written policies, for regional office approval, concerning its investments, trading
account, and the collection of delinquent loans.
A Cease and Desist Order prohibited further violations of Truth-in-Lending laws and regulations requiring credit information. The bank was required
to draft a new loan policy for regional office approval. It was also required to appoint a discount
committee to review loans and an examining and
audit committee to ensure proper internal controls.
The bank was ordered to eliminate its criticized
assets, improve liquidity, and to inject capital into
the bank. The Order also made provision for a new
chief executive officer and required review of the
chairman's excessive salary.
An administrative hearing was held based on a
Notice of Charges which alleged that the bank
had violated its legal lending limit, had made excessive out-of-trade area loans, had excessive
criticized assets and past due loans, had failed to
obtain adequate credit information and secure its
collateral for various loans, and had inadequate
capital and excessive problems with its internal
controls. After 6 days of hearings, the Administrative Law Judge issued a recommended decision
finding in favor of the Comptroller on all points.
Based on the findings of fact and conclusions of
law, the Comptroller issued a permanent Order to
Cease and Desist against the bank directing the
bank to correct all of the problems addressed in
the Notice of Charges. The bank has filed a Notice
of Appeal with the United States court of appeals.
A Cease and Desist Order required reduction of
rate-sensitive certificates of deposit and improvement of liquidity, reduction of loans proportional to
total deposits, and reductions of concentrations of
credit. It prohibited further violations of the bank's
legal lending limit and restricted overdrafts to officers. Past violations of law were to be corrected.
New loan policies were required and were to be
subject to regional office approval. Criticized assets were to be eliminated, and a compliance
committee was ordered to oversee implementation
of the provisions of the Order.
An Agreement prohibited further violations of the
bank's legal lending limit and restricted overdrafts
to officers as well as the purchase of illegal
investment securities. Past violations of law were
to be corrected. It required a written investment
policy subject to regional office approval, the
elimination of criticized assets, reduction of concentrations of credit, and a written program for
internal control. The Agreement forbade payments
to management resulting from credit life insurance
sales and also limited loans to certain individuals.
An Agreement prohibited further violations of the
bank's legal lending limit and improper loans to
executive officers. Past violations of law were to be
corrected. The bank was to hire a new chief
executive officer, to eliminate classified loans and
to formulate a new loan policy for approval by the
regional administrator. Past due loans were to be




9.

10.

11.

12.

collected and collateral exceptions eliminated.
Liquidity and the loan valuation reserves also were
to be increased. Written earnings and investment
programs were requested. Additional articles addressed capital and internal control procedures.
Noncompliance with this Agreement resulted in a
second Agreement with new owners of the bank
which addressed the bank's noncompliance, the
self-dealing transactions of the new owners and
the continued deterioration in the bank's condition.
That Agreement required capital, a budget, a
comprehensive external audit, a schedule of
salaries and bonuses for the regional Administrator's approval, and reimbursement of the unwarranted expenses charged to the bank for housing
and for charter applications for other b'anks.
Six Agreements were entered into with six separate banks and boards of directors which prohibited extensions of credit to certain shareholders
of the holding company and prohibited payment of
management fees to the bank's holding company
without prior regional office approval. An investment committee was required for each bank. The
authority of certain individuals at the banks was
curtailed. All six agreements were modified to
prohibit the payment of dividends by any of the
banks without the prior written approval of the regional administrator. An additional Agreement between one of these banks and the holding company required an immediate subordinated deposit
by the holding company to partially recapitalize
the bank.
An Agreement required a new chief executive officer subject to regional office approval, a budget,
improved internal control procedures, and an
increase in equity capital. It prohibited the bank
from paying dividends without regional office approval and required analysis of the valuation reserve, elimination of criticized assets and a written
investment policy.
An Agreement required the board to elect an
executive committee which excluded directors
whose loans were criticized, to raise equity capital
for the bank, and to refrain from further violations
of the bank's legal lending limit and of limits on
loans to affiliated insiders. Past violations of law
were to be corrected. It forbade the payment of
dividends, without regional office approval, and
required reduction of criticized assets and concentrations of credit.
An Agreement prohibited further violations of the
bank's legal lending limit and required correction
of past violations. It also required the elimination of
criticized assets and the acquisition of credit
information and adequate collateral for all loans.
The bank was to hire a new chief executive officer
and a new operations officer, subject to regional
office approval, and the board of directors was
required to submit a new loan policy and an
investment policy for regional office review. An
outside auditor was to be hired to evaluate internal
control procedures and a new internal control plan
was to be submitted for regional office approval.
19

13.

14.

15.

16.

17.

Payment of management fees was prohibited, as
was diversion of credit life insurance sale proceeds to officers of the bank. The bank was further
required to correct deficiencies in its trust department, to reduce concentrations of credit, to
develop an operating budget and to secure
additional capital.
After issuance of a Notice of Charges and a Temporary Order to Cease and Desist, a permanent
Order to Cease and Desist was consented to by
the bank. The permanent Order directed the bank
to refrain from making loans in excess of its legal
fending limit, to stop making loans to its affiliates in
excess of the limits set by law, to make loans to
executive officers in compliance with the statutory
provisions and to accept drafts or bills of exchange only as prescribed by 12 USC 372. Past
violations of law were to be corrected. The Order
also directed the bank to procure statements of its
directors' interests, limited its transactions with
certain, specific entities, restricted the payment4 of
dividends and required the bank to hire a new
chief executive officer. The bank was also to adopt
new lending policies, define its position regarding
overdrafts, formulate a capital improvement program, evaluate and increase its valuation reserve
for loan losses, obtain adequate credit information
and secure its collateral on all loans, maintain current information on file concerning its affiliates,
provide adequate fidelity insurance coverage and
reduce fees paid to its directors to a reasonable
level.
An Agreement was entered into with an individual
and a bank restricting the individual's participation
in the management of the bank and limiting his financial dealings with that bank.
An Agreement prohibited further violations of the
bank's legal lending limit and required correction
of past violations. It also required that a written
loan policy be submitted and that a new lending
officer be hired, both subject to regional office approval. In addition, the board was to eliminate
criticized assets, obtain satisfactory credit information and collateral for all loans and correct internal
control deficiencies.
An Agreement prohibited further violations of the
bank's legal lending limit and required correction
of past violations. It also required that written loan
and overdraft policies be submitted for regional office approval, criticized assets be eliminated, a
new chief executive officer be hired, subject to regional office approval, a complete external audit
be performed and satisfactory credit information
and collateral for all loans be obtained.
An Agreement prohibited violations of the bank's
legal lending limit and of laws governing borrowing by bank affiliates. Past violations of law were to
be corrected. It also required statements of directors' business interests, filed in accordance
with 12 CFR 23, and enforcement of Federal Reserve Board Regulation U. Preferential loans to
bank directors and officers and their interests
were forbidden, and the board was directed to col-

20



18.

19.

20.

21.

22.

23.

lect loans extended to certain individuals. In addition, an executive committee was to approve all
loans above $25,000, transactions in international
finance were restricted, and the board was to hire
a new chief executive officer subject to regional office approval.
A Cease and Desist Order ordered the bank to
submit both a general investment policy and an
investment trading policy for regional office approval and required accurate valuation of foreign
government bonds held by the bank. The bank
was forbidden to trade in securities until those actions were taken.
A Cease and Desist Order forbade further violations of the bank's legal lending limit, required the
bank to conform with state laws in accepting state
deposits and required the bank to adhere to its
contract in handling deposits for the U.S. Customs
Service. Past violations of law were to be corrected. Criticized loans to directors were to be
removed. The bank's liquidity position was to be
improved and equity capital was to be injected.
The Order required reductions of large concentrations of credit, collection of past due loans, and
acquisition of satisfactory credit information for all
loans.
An Agreement prohibited the bank from exceeding its legal lending limit and required correction
of past violations. It also required a liquidity program and elimination of criticized assets. The
bank was prohibited from permitting any overdrafts, and was required to inject new equity capital.
A Cease and Desist Order prohibited the bank
from extending credit to certain individuals and
their interests. It also limited the authority of the
bank's president. It further required the board to
eliminate criticized assets and mandated accurate
accounting for interest accrual accounts.
An Agreement prohibited the bank from making
further loans in violation of its legal lending limit
and from violating laws governing loans to bank
affiliates. Correction of past violations of law was
required. In addition, the board was required to
raise additional capital, to evaluate officers'
salaries, to eliminate criticized assets and to obtain satisfactory credit information on all loans. An
external audit was necessary to remedy internal
control deficiencies.
A Cease and Desist Order prohibited further violations of the bank's legal lending limit and required
correction of past violations. Loans to specific
individuals and their interests were restricted. The
Agreement also limited directors' fees, required
corrections of violations of law involving loans to
directors and officers, and mandated reimbursement to the bank by the board of improper expenses. The Order also forbade acquisition of
fixed assets, maintenance of certain large correspondent accounts with other banks, and violation
of the Bank Secrecy Act. Removal of criticized assets was required, as was acquisition of satisfactory credit information on all loans. The bank was

24.

25.

26.

27.

28.

29.

30.

prohibited from lending outside its trade area, diverting proceeds from credit life insurance sales to
its officers, hiring additional officers, and increasing officer's salaries without regional office approval. Written investment and capital augmentation programs were to be submitted for regional office approval.
An Agreement required a new chief executive officer, the training of bank officers, upgrading of the
bank's electronic data processing system, securing of additional capital and removal of classified
loans. Improved liquidity was required and a new
internal control policy was to be implemented. The
Agreement also required satisfactory credit
information for loans and an increase in the loan
valuation reserve.
An Agreement prohibited further violations of the
bank's legal lending limit, excess credit or overdrafts to affiliates, and the purchase of government bonds. Past violations of law were to be corrected. It also required removal of classified loans,
acquisition of satisfactory credit information for all
loans and that a loan policy be submitted to the
regional administrator for approval. The bank was
to secure additional capital, refrain from paying
dividends without regional office approval, and
improve its liquidity position. A review of management was required, as was a program of improve
internal control procedures.
A Notice of Charges and a Temporary Order to
Cease and Desist was served which prohibited
the bank's chief executive officer from making
loans, authorizing expenditures of bank funds,
investing bank funds and participating in the management of the bank. The board of directors subsequently consented to enter into a permanent
Cease and Desist Order.
An Agreement was entered into under which certain depositors agreed to subordinate their rights
to those of other creditors at the bank for a certain
period of time in order to strengthen the capital
position of the bank.
An Agreement required the bank to raise capital
through the use of subordinated certificates of deposit and required the bank's compliance with
regulations governing HEW-guaranteed student
loans. A new chief executive officer was to be
hired, subject to regional office approval.
A Cease and Desist Order required the bank to
review the adequacy of its management and to
raise new equity capital. Criticized assets were to
be eliminated and the loan valuation reserve was
to be increased. The Order required that a new
loan policy be submitted for regional office approval, that past due loans be collected, that satisfactory credit information for loans be acquired,
and that internal control deficiencies be corrected.
A Cease and Desist Order required the removal of
loans to certain individuals and forbade loans to
certain other individuals and their interests. It also
prohibited further violations of the bank's lending
limit and required conformance with 12 USC 375a
in loans to insiders. Past violations of law were to




31.

32.

33.

34.

be corrected. The Order also prohibited bank employees from acting as shareholder proxies and
required directors to file financial statements. It
further required adherence to state law in loans
made to municipalities, a full external audit of the
bank, formulation of a plan to raise additional capital, a review of management salaries, a new lending policy, elimination of criticized loans and correction of deficiencies in the bank's electronic
data processing system. Payment of dividends
without prior regional office approval was also forbidden.
An Agreement required the bank to hire a new
chief executive office, subject to regional office
approval, to formulate a new budget, and to correct deficiencies in its internal control system. The
bank was also required to increase its loan valuation reserve, to reduce large concentrations of
credit, and to eliminate criticized assets. The
Agreement prohibited the bank from investing in
speculative precious metals or foreign securit;es,
and mandated close supervision of HEWguaranteed student loans.
A Notice of Charges and Temporary Order to
Cease and Desist required the bank to stop violating the bank's legal lending limit and making improper loans to bank officers. The Order required
a reduction of classified loans to insiders. The
bank, after unsuccessfully seeking a temporary
restraining order in U.S. District Court, against the
Temporary Cease and Desist Order, consented to
a permanent Cease and Desist Order.
An Agreement prohibited further violations of the
bank's legal lending limit and required correction
of past violations of law. Compliance with the
Truth-in-Lending Act and implementing regulations
was also required. A new chief executive officer
was to be hired subject to regional office approval
and the bank was required to raise additional capital. Statements of directors' business interests
were to be filed and satisfactory credit information
and collateral for all loans was to be obtained. The
Agreement further required an increase in the
bank's loan valuation reserve, a budget, fidelity
insurance, and the elimination of criticized loans,
particularly those to directors, executive officers
and their interests. Internal control deficiencies
were to be corrected, a loan and discount committee to be established, and a compliance committee to be formed to implement and monitor adherence to the requirements of thts Agreement.
A Cease and Desist Order, prohibited lending limit
violations and required loans to officers to conform
with the requirements of applicable law. Loans to
certain directors were to be •removed and extensions of credit to certain individuals and their
interests were prohibited. The Order also required
that two directors be relieved of all decisionmaking authority, and that all expenses paid by
the bank for the personal benefit of directors be
repaid. A new chief executive officer was to be
hired, subject to regional office approval. A new
loan policy was to be formulated and the bank
21

35.

36.

37.

38.

39.

40.

was instructed to limit extensions of credit to its
trade area. In addition, criticized assets were to be
eliminated and liquidity increased. Payment of dividends was prohibited unless approved by the regional office, and internal control deficiencies
were to be corrected.
An Agreement required that a new chief executive
officer be hired, that additional capital be provided, that credit extended to directors and their
interests be limited, that past violations of law be
corrected, that dividend payments be restricted,
that a program to improve earnings be adopted,
that the bank increase its loan valuation reserve,
and that an internal auditor be hired for the bank's
staff.
A Letter Agreement required the bank to hire a new
chief executive officer and prohibited the chairman of the board from participating in the bank's
operations. An investment committee was charged
with developing an investment policy, subject to
regional office approval, as well as a lending policy covering specific areas. Criticized assets were
to be eliminated and an adequate loan valuation
reserve established. A liquidity improvement
program and audit program were to be submitted
for regional office approval.
An Agreement prohibited further legal lending limit
violations and required correction of past violations. Additional capital was to be raised, the
payment of dividends was prohibited, except with
regional office approval, and the loan valuation reserve was to be increased. The Agreement required that the bank improve its liquidity position,
eliminate criticized loans, develop a budget, and
evaluate management salaries. Satisfactory credit
information for all loans was required, as was the
development of a plan to improve internal controls.
An Agreement required that an asset and liability
management plan be submitted to the regional
administrator. The bank was also to eliminate
criticized loans, appoint an executive committee
composed of non-officers, amend its lending
policies, define its trade area, increase its loan
valuation reserve, and evaluate officers' salaries.
The Agreement further required the bank to adopt
an investment policy, establish a personnel committee, and develop a policy for supervision of
internal operations.
An Agreement required the bank to hire a new
chief executive officer and to formulate an earnings program. Further violations of the bank's legal
lending limit were prohibited and corrections of
past violations were required. Additional capital
was to be provided and criticized loans were to be
eliminated. The Agreement required a new loan
policy and the obtaining of satisfactory credit
information and collateral for loans.
An Agreement required regional office approval of
a new president to be hired by the bank, quarterly
review of the bank's loan valuation reserve, and
elimination of criticized assets. Liquidity was to be
increased, a new loan policy was required, and a
financial forecast was to be submitted for regional

22



41.

42.

43.

44.
45.

46.

office review. Dividends were prohibited unless
approved by the regional office, and a compliance
program related to consumer laws was to be established.
An Agreement prohibited loans to certain
individuals and their interests, prohibited the
bank's president from granting loans over
$25,000, except with board approval, and forbade
the bank's dealings with other entities. Violations
of the lending limit were prohibited and correction
of past violations of law required.
An Agreement prohibited violations of the bank's
legal lending limit and violations of credit information regulations. Past violations were required to
be corrected. Additional equity capital was required, as was regional office approval prior to the
payment of dividends. Liquidity was to be improved and the board was required to submit a
new loan policy for regional office approval. The
Agreement further required the board to reduce
criticized assets and to maintain satisfactory credit
information for all loans. An audit committee was
to be established and the bank was required to
pursue claims against its bonding company.
An Agreement dealt with numerous bank problems, primarily involving insider abuses. Among
the problems addressed were violations of the
bank's legal lending limit; the necessity for an external audit relating to salaries paid, leasing of
personal property and loans on preferential terms
to insiders; establishment of a compliance committee to secure restitution to the bank in various
areas; sale of a luxury automobile purchased by the
bank for a director; general investigation of leasing
operations at the bank; definition of the bank's
trade area; and, reductions of concentrations of
credit. Internal control deficiencies were to be corrected, the bank was prohibited from paying dividends without regional office approval, and new
loan policies were to be developed and submitted
for regional office review.
An Agreement with another bank, controlled by
the same individual as the bank discussed in 43,
above, dealt with substantially similar problems.
An Agreement required the bank to hire a new
chief executive officer, subject to regional office
approval, to review its management structure and
to raise new equity capital. The Agreement halted
the payment of dividends, unless approved by the
regional office, and required that the bank develop
an earnings program. Criticized loans were to be
eliminated and the loan valuation reserve to be
increased.
An Agreement prohibited further violations of the
bank's legal lending limit and required correction
of past violations. Loans to specific individuals
were to be removed from the bank and the bank
was required to bring loans to executive officers
into compliance with 12 USC 375a. An external
CPA audit was required to study loans to
directors, payment of questionable bank expenses, officers' salaries and legal fees paid by
the bank. The Agreement required the bank to se-

47.

48.

49.

50.

cure interest payments lost through loans granted
at preferential interest rates, to secure restitution of
excessive legal fees, and to adjust salaries of officers to be commensurate with services performed. The loan valuation reserve was to be
increased, as was capital, and the payment of dividends was prohibited except with regional office
approval.
A Cease and Desist Order required the board to
provide a new chief executive officer subject to
regional office veto, to formulate an earnings program, and to halt and correct all violations of the
bank's legal lending limit. An overdraft policy was
required, as was elimination of criticized assets.
Collection of delinquent loans and current credit
information on all loans was required, as was an
increase in the loan valuation reserve. The Order
required the issuance of additional equity capital
and reductions of a large concentration of credit.
Better internal control procedures and a new loan
policy were to be adopted, both subject to regional office approval. An oversight committee
was to monitor compliance with the Order.
An Agreement required formulation of a program
to improve earnings, development of a loan pricing policy, increase of the bank's loan valuation
reserve, a comprehensive audit, modification of
the bank's lending policies, a program to eliminate
criticized assets, justification for the bank's computer system and restrictions on the bank's future
investments in fixed assets.
A permanent Cease and Desist Order was
consented to after the issuance of a Notice of
Charges and a Temporary Cease and Desist Order. This permanent Order prohibited further violations of the bank's lending limit and required the
bank to conform to 12 USC 375a in making loans
to insiders. Past violations of law were to be corrected. In addition, correspondent accounts were
to be limited, and the Order directed the board to
withdraw all lending authority from two executive
officers. A new chief executive officer was to be
hired and a review of directors' expenses charged
to the bank was ordered. This Order also required
reimbursement of improperly paid expenses,
payment of interest on insider overdrafts, and
elimination of bonuses paid to directors. The bank
was prohibited from extending credit to specified
individuals and their related interests and from giving preferential interest rates on loans to insiders.
Liquidity was to be increased, as was the loan
valuation reserve, and new capital was to be
raised.
An administrative hearing was held in 1976 in
connection with a Notice of Charges. After recieving a favorable recommendation from the Administrative Law Judge, a permanent Cease and Desist
Order was issued which required the board to
reimburse the bank for excessive salaries paid to
the bank's two top officers. The case was appealed to the United States Court of Appeals for
the Eighth Circuit by the bank. Oral argument was
heard by that court and a favorable decision was




rendered in early 1978 which affirmed the Comptroller's power to order reimbursement. The opinion also held that the testimony of three national
bank examiners and the fact that the bank had repeatedly ignored warnings from the Comptroller
over an extended period of time to correct its
criticized practices constituted substantial evidence in support of the Comptroller's Order to
Cease and Desist. Consequently, the Order could
only be altered if it was shown to have been issued in an arbitrary or capricious manner, which
the court did not find was the case.
51. During 1977, this Office also terminated or removed two Cease and Desist Orders and seven
Agreements in cases where banks had complied
with their provisions or circumstances had materially altered the relevance of their provisions in
some other way.

Securities Disclosure
Approximately 340 national banks have a class of securities registered pursuant to the Securities Exchange
Act of 1934 (1934). The Securities Disclosure Division
has reviewed registration statements, annual and special meeting proxy materials, periodic reports and materials required to be filed in connection with tender offers and election contests for those banks. Reports of
beneficial ownership, changes in beneficial ownership
and changes in control have been recorded, and a
public file of 1934 Act filings has been maintained.
During 1977, the division prepared proposed
amendments to 12 CFR 11, "Securities Exchange Act
Rules," designed to make the Comptroller's regulations under the 1934 Act substantially similar to rules of
the Securities and Exchange Commission (SEC), in response to statutory mandate.
Five regional conferences were presented in
Chicago, Atlanta, Richmond, New York and San Francisco for the benefit of national banks having a class of
securities registered with the Comptroller pursuant to
the 1934 Act. Those conferences were designed to
assist banks in complying with the reporting requirements of the 1934 Act, and to inform them of proposed
changes in 12 CFR 11 and regulations of the (SEC)
which will affect banks.
A new regulation, 12 CFR 10, "Municipal Securities
Dealers," was adopted under Section 15B of the 1934
Act on September 9, 1977. That regulation concerns
the registration and qualification of persons associated
with national bank municipal securities dealers. Those
bank dealers must also comply with rules adopted by
the Municipal Securities Rulemaking Board (MSRB)
subject to oversight of the SEC and enforced by the
Comptroller of the Currency. The division coordinated
with other bank regulatory agencies to consider and
comment upon proposed MSRB rules as they relate to
banks and participated informally in the development
of MSRB rules. The division assisted banks in complying with the new registration and qualification requirements.
The Division assisted the Trust Operations Division
of the Comptroller's Office in federal securities law
matters. Participation in a seminar for trust examiners
23

was designed to help examiners recognize possible
violations of Section 10b of the 1934 Act and SEC Rule
10b-5, thereunder. The division assisted with the drafting of proposed amendments to 12 CFR 9, "Fiduciary
Powers of National Banks and Collective Investment
Funds," relating to variable amount master notes, securities handling procedures and use by trust departments of material inside information available to the
bank as a result of its commercial banking activities.
The revision of 12 CFR 9.7(d), which requires national
banks with fiduciary powers to adopt written policies
and procedures to ensure that they will not use material inside information in connection with any decision
or recommendation to purchase or sell any security,
was adopted on February 16, 1978.
The division suspended trading in the stock of two
national banks pending the public dissemination of
information which might affect the market price of the
banks' stocks. The division assisted the SEC in enforcement actions against national banks allegedly in
violation of the federal securities laws.
The division also had numerous meetings and
discussions with the SEC on such matters as access to
and disclosure of bank examination reports, activities
of trust departments, and 1934 Act filings of bank holding companies which are parents of national banks.
The division assisted in advising the SEC in connection
with its report on bank securities activities and participated in the special subcommittee of the Interagency
Supervisory Committee for the purpose of responding
to the recommendations of the report.
Accountants assigned to the division, along with
representatives of other banking agencies, advised the
SEC concerning the impact of its proposed revision of
its accounting regulation on quarterly condition reports
required by banking agencies. Division accountants
advised the Comptroller's Office and national banks on
various accounting matters, including sale-lease back
transactions, accounting for dividends, accounting
treatment relating to the establishment of charitable
trusts and accounting for leases, and assisted in the
preparation of Banking Circular 95, "Lease Reporting
Requirements of National Banks."
In February 1977, the division implemented a revised 12 CFR 16, "Securities Offering Disclosure
Rules," which expanded the disclosure requirements
for offering circulars used by existing and organizing
national banks to offer and sell their own securities.
The scope of the regulation was expanded to include
equity as well as debt securities. Approximately 39 offering circulars of existing banks were reviewed and
declared effective under the new regulation. Regional
counsel have been assisted by the division in the review of offering circulars of organizing banks.

Legal Advisory Services
Legal advice on a wide variety of questions arising
under the banking laws is provided to the Comptroller,
to national banks, and to the public by the Legal Advisory Services Division, the largest unit in the Law Department. As of year-end 1977, the division had received 2,140 written inquiries. That figure does not re


flect the large number of telephone calls answered,
interim correspondence or supporting memoranda required for many inquiries, or the numerous meetings
attended by members of the legal staff.
Separate records maintained by the division's
consumer protection branch indicate that 3,553
consumer inquiries were received during 1977. Of
those, 286 were received from members of Congress
or referred to this Office by the White House. About
1,088 inquiries received from sources other than the
Congress or the Executive Branch were referred to the
proper regional counsel for appropriate handling. In
1977, division staff responded to 2,465 consumer
inquiries.
Members of the division participated in numerous
meetings with bankers, banking lawyers, consumers
and federal and state regulatory authorities, as well as
representatives of other branches of the federal government, to discuss various topics affecting national
banks and their regulation. Topics covered at those
meetings included lending limits, branching, CBCT's,
electronic transfer of funds, investment securities, the
Bank Protection Act, the National Flood Insurance Program, Federal Reserve Regulations B and Z, fair housing, redlining and privacy. In addition, members of the
staff attended regular interagency meetings with representatives of the Federal Reserve Board, Federal
Trade Commission and Department of Housing and
Urban Development, among others, in an effort to
coordinate activities and inform those agencies of
OCC views.
During 1977, the division drafted and published in
the Federal Register a proposed revision of the
Interpretive Ruling 7.3400 concerning the application
of lending limits to lease transactions; an amendment
to Interpretive Ruling 7.6125 concerning the meaning
of "bad debt" as used in 12 USC 56, which governs
payment of dividends; Interpretive Ruling 7.7479 relating to charitable contributions; and a procedural
amendment to 12 CFR 1 — Investment Securities. The
division also participated in drafting a proposed enforcement policy jointly issued by the three banking
agencies to cure violations of the Truth-in-Lending Act
and Regulation Z. Papers were prepared addressing
the application of 12 USC 82 and 371 d to lease transactions; the legality of proposed branch offices under
the laws of several different states; the Arab boycott;
and redlining. Division members worked on the
interagency task forces studying proposed revisions to
12 USC 371c, the Bank Protection Act and the Community Reinvestment Act. Other legal issues addressed during 1977 included CBCT's; electronic
funds transfer; fair housing; travel services; forward
and futures contracts backed by U.S. Treasury bills,
GNMA mortgages and other financial instruments; and
the authority of a national bank to participate in the
development and restoration of urban real estate. Assistance was also rendered in the sale of Midland National Bank, Milwaukee, Wise, and the closings of Republic National Bank of New Orleans, La., and Drovers
National Bank, Chicago, III.
Staff attorneys also participated in the preparation of
the Comptroller's Handbook for Consumer Examina-

tions and assisted as instructors at the consumer
examination school for examiners.

Antitrust
On May 26, 1977, the Department of Justice filed suit
to block a merger of The Second National Bank and
Trust Company of Lexington and Bank of Lexington in
Lexington, Kentucky. United States v. The Second National Bank and Trust Company of Lexington and Bank
of Lexington, Inc., Civ. No. 77-87. The complaint alleged that the merger would violate Section 7 of the
Clayton Act by eliminating competition between the
two banks in Fayette County, Ky., and in the surrounding five counties. Because the Comptroller had approved the merger, the Office exercised its right under
the Bank Merger Act to intervene as a full party.
In another development, the Federal Trade Commission affirmed the decision of an administrative law
judge holding that Perpetual Federal Savings and
Loan Association, Washington, D.C., had violated Section 5 of the Federal Trade Commission Act by having
on its board persons who were simultaneously
directors of three commercial banks in that city. A petition to review the Commission's decision has been
filed with the U.S. Court of Appeals for the Fourth Circuit. Separately, the Department of Justice appealed
to the U.S. Court of Appeals for the Ninth Circuit on an
adverse ruling by a lower court in another case, United
States v. Crocker National Corporation, 422 F. Supp.
686 (N.D. Cal. 1976), which held that Section 8 of the
Clayton Act does not prohibit interlocking directorates
between a commercial bank and an insurance company. Although the Comptroller's Law Department participated in neither case, the litigation is being studied
with a view to advising national banks and
Congressional committees on pending legislation.

Legislative Counsel
The principal responsibilities of the Legislative Counsel
Division relate to the legal aspects of legislation. The
subject matter covers virtually every area of the Office's jurisdiction and almost every legislative measure
of interest to national banks. In addition, the division
deals with matters of intergovernmental and operational interest. In connection with those general responsibilities, the division maintains such information
as status of bills, reports on bills, press information and
the primary legislative documents, as well as files on
Public Laws passed in the current and immediately
preceding Congresses.
Division attorneys prepare testimony to be given before Congressional committees and letters of comment
on pending bills to be sent to members of Congress.
They draft legislation and write memoranda and briefing papers concerning various legislation. Division attorneys are in frequent contact with members of
Congress and their staffs; personnel in Treasury, Office of Management and Budget and other federal
and, occasionally, state agencies; Office staff in the
regions and in Washington; and public representatives
who want information on banking legislation. They also
attend relevant hearings on the Hill and participate in



meetings with Treasury and other agencies to consult
on and keep abreast of legislation of interest to this Office. In addition, division attorneys speak to various
groups, including bar associations, foreign bankers
and Office staff, on legislative matters.
The following are the legislative initiatives of the 95th
Congress which are of significance to the Comptroller's Office.
Fair Debt Collection Practices Act of 1977 (P.L. 95-109;

Sept. 20, 1977) — This Act amends the Consumer
Credit Protection Act to protect borrowers from abusive debt collection practices such as threatening
telephone calls and disclosure of a customer's personal affairs to third persons. The prohibitions of the
Act apply only to debts for personal, family or
household purposes, but the Act does reach bank reciprocal collection agreements.
Housing and Community Development Act of 1977

(P.L 95-147; Oct. 28, 1977) — Title VIII of this Act
contains the Community Reinvestment Act which requires the federal bank regulatory agencies to consider an institution's record of meeting the credit needs
of its community when acting on an application for a
charter or branch. The Act also requires the agencies
to submit reports to Congress outlining their actions
under the Act as well as to issue appropriate regulations implementing the Act.
Extensions of Regulation Q (P.L. 95-22; April 19, 1977;
P.L. 95-188, Nov. 16, 1977) — P.L 95-22 extended
through December 15, 1977, the authority of the Federal Reserve Board, in consultation with the FDIC and
the FHLBB, to set interest rate ceilings. This law also
expands the powers of credit unions. P.L. 95-188
further extended Regulation Q through December 15,
1978, and also provides for Senate confirmation of the
Chairman and Vice-Chairman of the Federal Reserve
Board beginning in January 1979.
Export Administration Act Amendments of 1977 P.L.

95-52; June 22, 1977) — This Act makes it illegal to refuse to employ or transact business with any U.S. person on the basis of race, religion, sex or national origin. American companies are also prohibited, with
broad exceptions, from collaborating in any boycott
against other American firms.
Overseas Bribes (P.L. 95-213; Dec. 22, 1977) — Title I
of this Act requires that issuers subject to SEC jurisdiction maintain reasonably complete records of all of the
issuer's transactions. Title I also makes it a crime for
U.S. companies to make payments to a foreign government official for specific corrupt purposes. Title II
requires increased disclosure by those already filing
with the SEC in order to uncover foreign ownership of
U.S. companies.
Tax and Loan Accounts (P.L. 95-147; Oct. 28, 1977) —
This law permits the Secretary of the Treasury to invest
excess operating cash balances of the United States
in either interest-bearing obligations of financial
institutions which hold tax and loan accounts or obligations of the U.S. or its agencies.
Banking Agency Enforcement Powers (S. 71) — This

bill is designed to strengthen the enforcement powers
of the federal bank regulators. It would grant broad
cease and desist and removal powers and would per25

mit the agencies to order individual directors to halt
unsafe or unsound practices. Civil money penalties
could be imposed for violations of banking laws or
cease and desist orders and regulations. Loans to
bank officers, directors and principal shareholders
would be limited, and loans to all bank insiders, including directors, could not be made on preferential terms.
In another respect, the bill would prohibit interlocking directorates between depositary institutions and
unaffiliated depositary holding companies of a certain
size or geographical location. Heads of the federal
banking agencies would be prohibited from working in
the banking industry for 2 years after leaving office unless a full term has been served. Remaining titles deal
with credit union restructuring and standby letters of
credit.
S. 71 was passed by the Senate on August 5, 1977.
The Comptoller's Office supports the provisions of S.71
relating to agency enforcement powers. However, it
opposes the treatment of standby letters of credit in
the last title of the bill.
Safe Banking Act of 1977 (H.R. 9600) — This bill
incorporates many of the provisions of S.71 with major
modifications and additions. Generally, the provisions
of the bill are stricter than those in S. 71. For example,
loans to a bank's directors and their businesses, in
addition to loans to its officers and principal shareholders, would be severely limited. A broader prohibition would be imposed against interlocking
directorates of banks, bank holding companies and
other companies. The bill would authorize the federal
banking agencies to approve or deny changes in
control of banks they supervise. Other titles cover correspondent banking relationships; disclosure of material facts, including classified loans; establishment of a
financial institutions examination council; financial privacy; federal chartering of mutual savings banks; and
bank holding company activities.
The Comptroller's Office supports most of the provisions in Title I of H.R. 9600, except for aggregation of
loans to outside directors and their businesses and an
overall cap on insider loans. We have a multitude of
technical and substantive problems with provisions in
the remaining 12 titles, which are the continuing subject of debate and revision.
Comptroller of the Currency Housekeeping Bill (Titles
VI and VII, H.R. 9450) — H.R. 9450 is patterned after
S. 71 with respect to strengthening the enforcement
powers of federal banking agencies. Titles VI and VII
contain fundamentally non-controversial provisions designed to streamline OCC operations and certain activities of national banks. The Comptroller would be
permitted to schedule national bank examinations at
appropriate intervals; extend the 5 year real estate
holding period for an additional 5 years; delegate any
of his powers; revoke national bank trust powers; and
dispose of the funds he holds as successor to receivers of closed national banks. The bill also reaffirms the
Comptroller's authority to issue rules and regulations.
As the principal draftsman of Titles VI and VII, the
Comptroller's Office fully supports those provisions.
International Banking Act of 1978 (H.R. 10899) — This
bill would permit the Comptroller of the Currency to

26


charter federal branches and agencies of foreign
banks which would be regulated and supervised like
national banks. The bill would require special federal
review of applications by foreign banks to establish
facilities within the U.S. A Committee amendment,
grandfathering branches in operation prior to May 1,
1976, would subject foreign branches to the same location limitations as domestic banks. Another Committee amendment would subject federally chartered
foreign branches to the same requirements as member
banks. The Federal Reserve Board, after consultation
with state authorities, could impose reserve requirements on state-chartered foreign branches.
Federal deposit insurance would be required for
federally chartered foreign branches and for those
state branches located in states requiring such
insurance for state-chartered banks. In addition, the
FDIC could require a surety bond or pledge of assets
to protect against the additional risks involved in insuring a foreign branch. Finally, existing securities affiliates of foreign banks would be permanently grandfathered. The Comptroller's Office generally supports
H.R. 10899.
Nationwide NOW Accounts (S. 2055) — This proposed
legislation provides for the nationwide extension of authority to offer negotiable orders of withdrawal which
resemble interest-bearing checking accounts. In an attempt to stem the attrition of membership in the Federal Reserve System, the bill also would permit the
payment of interest on the reserves which member
banks must maintain on deposit at Federal Reserve
Banks. Federal chartering of mutual savings banks
also would be initiated. The bill was reported to the
Senate floor on August 17, 1977, and awaits action
there. The Department of the Treasury, on behalf of the
Administration, supports this legislation.
Federal Banking Agency Audit Act (H.R. 2176) — This
bill would authorize the General Accounting Office
(GAO) to conduct audits of the federal bank regulatory
agencies. The bill would prohibit on-site examinations
by GAO without written agency consent. GAO would
also be required to protect the identity of banks and
their customers and to submit advance drafts of its
report to the agencies. GAO would be permitted access to a sampling of bank examination reports and
GAO employees with such access would be subject to
the same criminal sanctions as federal bank regulators
and their employees. The bill has passed the House
and been ordered favorably reported by the Senate
Governmental Affairs Committee.
The Comptroller's Office does not object to periodic
reviews by GAO provided there are sufficient
safeguards to protect our ability to carry out our regulatory functions. Accordingly, we have urged deletion
of that provision of the bill which would permit
disclosure of the identities of banks and their customers to Congressional committees when sitting in executive session.
Federal Bank Commission Act (S. 684) — This bill
would establish a Federal Bank Commission consisting
of a Chairman and four other members, one of whom
would be designated by the Chairman of the Federal
Reserve. One year after its creation, the examination

functions of OCC, FDIC and the Federal Reserve
would be transferred to the Commission. The Commission would be required to grant deposit insurance for
state-chartered banks which are not members of the
Federal Reserve System based solely upon a charter
granted by a state whose supervisory authority is
adequate to assure the safety and soundness of its
banks. The Commission would also be subject to the
Congressional appropriations process. The Comptroller's Office has opposed the creation of a single Federal Bank Commission at least until such time as the
state system develops as an effective alternative.
Federal Bank Examination Council Act (S. 711) — This

bill would establish a three-member Federal Bank
Examination Council composed of the Comptroller of
the Currency, the Chairman of the Board of Directors
of the FDIC, and the Chairman of the Board of Governors of the Federal Reserve System. The Council
would be authorized to create uniform federal bank
examination standards and procedures in order to
achieve greater consistency in the operations of the
three federal banking agencies. The bill also would
provide for a liaison committee composed of state
bank supervisory representatives to work with the
Council to promote uniformity of federal and state
examination standards and procedures. Hearings on
the bill were held in September 1977 before the Senate
Banking Committee.
The Comptroller's Office has endorsed the concept
of a Federal Bank Examination Council in the event sufficient progress is not forthcoming on various matters
of financial institution regulation. However, the Office has recommended amending S. 711 to expand
the Council's membership, to provide for the rotation of
the Chairmanship among the Council members, and to
make clear that the Council's recommendations would
not be binding on the agencies.
Truth-In-Lending Simplification Act (S. 2802) — This bill

would simplify the truth in lending disclosure statement. It is an attempt to make compliance with the Act
substantially easier for creditors by authorizing the




Federal Reserve Board to promulgate model forms
and clauses. A creditor's civil liability would be limited
only to non-disclosures of central importance to understanding the costs or terms of a credit transaction.
Administrative enforcement of the Act also would be
strengthened.
The Comptroller's Office has supported simplification of the Truth-in-Lending Act. We have offered technical suggestions concerning the bills in testimony before a Subcommittee of the House Banking Committee.
Competition in Banking Act of 1977 (S. 72)-— This bill

is intended to restrict concentration in banking by
legislating standards for bank mergers and for bank
holding company acquisitions of banks. The standards
for bank mergers would be uniform for all federal banking agencies. The bill would prohibit the approval of a
proposed merger or acquisition where the resulting
bank or bank holding company would hold more than
20 percent of the assets held by all banks in the state
in which the bank or bank holding company is located.
The Comptroller's Office opposes enactment of this
legislation. There has been no clear trend toward concentration of banking assets in this country. In addition, no other industry is subject to such a strict numerical standard for determining the illegality of a proposed merger or acquisition.
Electronic Fund Transfers (H.R. 8753, S. 2065, S. 2546)
— These bills and others deal with the burgeoning
field of electronic funds transfers. Most of the bills
contain provisions designed to implement the recommendations of the National Commission on Electronic
Fund Transfers. The issues addressed include
disclosure, documentation of transfers, revocation and
reversibility of transfers, error resolution, liability for unauthorized use and privacy.
The Comptroller's Office has endorsed most of the
provisions of S. 2065. However, as to the issues of
stop payment and reversibility, the Office has
suggested it would be wiser to treat those transactions
as cash transactions. The Office has also suggested
that the federal legislation pre-empt state regulation.

27




VI. Fiduciary Activities of National Banks
The Trust Operations Division has completed its first
full year of experience in using the new trust examination procedures. By year-end 1977, 45 percent of the
1,824 active trust departments had been examined.
Those trust departments managed 53 percent of the
fiduciary assets in the National Banking System.
The effectiveness of the new trust examinations was
scrutinized throughout the year. Minor modifications
and clarifications of the procedures were transmitted
periodically to field personnel through the trust newsletter. Formal revisions to the Comptroller's Handbook
for National Trust Examiners were developed so that
an updated version could be issued in 1978. Almost
every region conducted a training program in the new
examination procedures for its trust personnel. Various
regional directors for trust operations and other field
examiners gave formal presentations to the fiduciary
sections of their local banking associations. Seventeen
representatives of the Office presented three 1-day regional clinics to 600 bankers and auditors in cooperation with Bank Administration Institute. A task force of
examiners was temporarily assigned to Washington to
develop educational courses for newly hired examiners. Twenty-six people took those courses at a 2-week
trust orientation school in Kansas City, Mo., during
September. Nineteen trust examiners received formal
training during the year. That was the largest number
of trust personnel that has attended formal schools at
any one time.
The year marked a period of increased coordination
with the other bank regulatory agencies. That coordination included the joint collection of trust department
statistics, coordination of examination procedures,
development of a uniform rating system for trust departments, and development of uniform proposed regulations concerning disclosure of securities transactions and trading records. In December the first
interagency trust school was held. The Comptroller of
the Currency, The Board of Governors of the Federal
Reserve System, and The Federal Deposit Insurance
Corporation each sent seven trust examiners to participate in that school, which concerned federal securities laws and regulations.
The division's operating objectives were furthered by
increased interface with other divisions of the Comptroller's Office. Several significant matters were acted
upon in conjunction with the Enforcement and Com-




pliance Division of the Law Department. Creation of automated data processing standards and compliance
with those standards by trust departments and outside
providers were coordinated with the EDP Examination
Division. The Consumer Affairs Division developed
trust examination procedures to monitor national
banks' compliance with consumer laws and regulations when acting as fiduciary. The Consumer Affairs
Division also revised their examination procedures to
include examination of trust department transactions
for compliance with consumer laws and regulations.
Throughout the year several regulatory proposals
were published for comment. The Office proposed an
amendment to revise Section 18(c)(2)(ii) of Regulation
9 to require that all variable amount notes be issued,
only on a demand basis. That action was based upon
comments received on the proposal to limit variable
amount notes to 10 percent of a bank's capital and
surplus. Another regulatory proposal published for
comment was a revision of section 7(d) of Regulation 9
requiring that trust departments establish policies and
procedures to insure that material inside information is
not used in connection with any decision or recommendation to purchase or sell securities.
In November, the Office proposed an amendment to
Regulation 9 which would rescind the requirement for
filing an annual report of equity holdings and a quarterly report of equity transactions with this Office. That
action was taken in contemplation of the Securities and
Exchange Commission's (SEC) institution of similar reporting requirements for all institutional investors. In
December, a proposed amendment to Regulation 9
was signed, requiring national banks to establish uniform procedures and records relating to the handling
of securities transactions for trust department accounts
and for customers. That proposed regulation would
require confirmations of all securities transactions, except those in obligations of the U.S., federal agencies,
or municipalities, which are effected for customers and
non-discretionary agency accounts. Specific data,
including the bank's compensation for effecting the
transactions would be required. The Comptroller also
proposed to require national banks to establish and
maintain uniform procedures providing for proper
safeguards to permit effective supervision by the
banks and by bank supervisors, and to protect the
interests of bank customers. Those proposals, in part,
29

result from the recommendations in the final report on
bank securities activities by the Securities and Exchange Commission.
During 1977, examination procedures and regulations were implementated to ensure the prompt and
safe handling of securities. Of major importance were:
(1) the SEC Regulation 240.17A 1-7 which deals with
the turnaround and processing of securities, (2) the
expiration of the time period for fingerprinting banking
personnel involved in securities transactions, and (3)
the implementation of the lost and stolen security pro-

30



gram. Discussions were also held with other banking
agencies and the SEC in reference to the transfer
agent registration from (Form TA-1). That form was
Substantially revised to make it more convenient for
registered transfer agents to use and to ensure prompt
processing. In the area of clearing agencies, this Office, in conjunction with the other banking agencies
and the SEC, promulgated supervisory regulations. In
addition, regulations were proposed concerning the
uniform registration of clearing agencies. That proposal was still pending at year-end.

VII. International Banking and Finance
Although economic and financial conditions stabilized
in many parts of the world during 1977, most countries
still struggled to restore order to their economies after
the unprecedented disturbances of the mid-1970's.
Because of those disruptions, including surging inflation, severe recession and the world oil crisis, the
international economic situation at year-end 1977 remained unsatisfactory by past standards.
With the exception of the United States and a few
other highly industrialized countries, 1977 economic
growth was generally beneath pre-recession peaks, in
an environment of high unemployment, excess plant
capacity, lagging investment and lingering inflation.
Government policies in most countries were aimed at
reducing inflation, absorbing the unemployed, and adjusting external payments imbalances. The stronger
industrailized nations were able to compensate satisfactorily for the increasing consumption/price of oil,
inflation and recession. However, their weaker counterparts — industrial, developing and planned
economies — were forced to continue borrowing to finance their 1977 external deficits.
The non-oil producing, developing nations continued
to face depressed commodity prices and persistent
payments imbalances. Deficits, which collectively
amounted to $37 billion in 1977, were substantially lower
than 1976's $56 billion. The stronger, less-developed
nations financed their needs through private bank
sources, sometimes with the assistance of multinational institutions. The weaker, less-developed countries relied on direct credit from international
institutions, aid from foreign governments, and private
credits guaranteed by official agencies.
The world financial community, prompted by the
payments imbalances caused by OPEC surpluses;
non-oil producing, developing country deficits; inflation; recession; and unemployment, continued to cope
with the pressures of recycling the funds without
disturbing world financial markets and with the decline
in the value of the world's primary reserve currency,
the United States dollar. That decline was attributed to
concern about the United States' ability to effectively
deal with its two primary problems, energy consumption and inflation.
International banking issues which confronted the
Office of the Comptroller of the Currency during 1977
included the rapid growth in foreign assets/deposits/




earnings, substantial lending to foreign public sector
borrowers and the applicability of the statutory legal
lending limit to such credits, and expanded
international money market and foreign exchange activity.
As of year-end 1977, foreign loans of United States
banks and bank holding companies aggregated $194
billion. Sixty-five percent of that total represented extensions of credit to borrowers in industrialized developed countries and offshore banking centers. Credits
to borrowers in non-oil producing, developing nations
aggregated $47 billion, or 24 percent, of the total.
By the end of 1977, the international assets of national banks were estimated to total over $175 billion,
and total assets of the 629 foreign branches of national
banks aggregated $162 billion, a 20 percent increase
over the $135 billion held at the end of 1976. During
the year, the number of foreign branches of national
banks showed an overall net decrease of six, mainly
because of the consolidation of several branch systems into subsidiary banks. National banks also
continued to hold investments in foreign financial
institutions, either directly or through Edge Act subsidiaries.
Within the Office of the Comptroller of the Currency,
the International Operations Division is responsible for
supervising the international activities of national
banks. The Office's primary bank supervisory tool is
the examination function. Examinations of international
divisions, foreign branches, and foreign affiliates are
especially tailored to the organizational, geographical
and reporting structure of the national bank organizations under examination. Examiners evaluate the quality of international loan and investment portfolios,
analyze foreign exchange activities and reporting procedures, accounting and bookkeeping systems, and
the adequacy of internal controls and audit programs.
International examination procedures, especially
developed during 1976, were fully implemented in
1977. Approximately 150 national bank examiners
regularly participate in examinations of international
banking divisions within the 14 regions. During 1977,
101 examiners also traveled overseas to 20 countries
to examine 58 foreign branches. The assets of the
remaining branches, including "shell" branches in the
Caribbean, were examined using records maintained
at bank head offices. Two foreign subsidiaries and two
31

electronic data processing centers were also
examined on-site. The Office continued to maintain a
permanent staff of six examiners in London, responsible for continuously supervising the activities of the
branches of 24 national banks there.
The uncertain and sensitive area of direct and
indirect lending by national banks to foreign governments, especially those in the developing world,
continued to present a supervisory issue for the Office.
The accurate and uniform assessment of the quality of
such credits held in the loan portfolios of national
banks remained the task of the Office Foreign Public
Sector Credit Review Committee, working in conjunction with the International Operations Division. The
Comptroller's Office, the Board of Governors of the
Federal Reserve System and the Federal Deposit
Insurance Corporation began developing an
interagency approach to evaluating foreign public sector credits, as well as the assessing of country risk in
general.
During 1977, the three bank regulatory agencies
developed and implemented a joint, semiannual,
Consolidated Country Exposure Report that shows, by
country, the foreign claims held by United States
banks and bank holding companies. Information from
that report permits the systematic monitoring of overseas lending by United States banks. The monthly
Foreign Currency Report continued to be used by the
International Operations Division to monitor the foreign
exchange trading activities of national banks.
To meet the ever-increasing need for international
examiners, during 1977, the International Operations
Division conducted two training schools in
Washington. Those were on the subjects of
international banking and foreign exchange. During
1978 and 1979, those schools will be incorporated into
the Office's continuing education program. To keep
field examiners and other staff informed, the

32



International Operations Division prepared and circulated a twice-monthly "International Report" containing
news articles and other reference data. That report
was mailed to approximately 300 national bank
examiners in all 14 regions, as well as to selected staff
of the Comptroller's Office, the Federal Reserve System, the Federal Deposit Insurance Corporation, and
the Treasury, and members of Congress. Division staff
participated in outside international conferences and
seminars held in London, England; Washington, D.C.;
San Francisco, Calif.; Seattle, Wash.; New Hampshire;
and Puerto Rico. The Office was also represented at
the 1977 annual meeting of the Banker's Association
for Foreign Trade.
The division arranged for examiners to attend outside seminars and schools on international banking.
Those schools included the Colgate Darden Graduate
School/Banker's Association for Foreign Trade
international lending seminars, various Robert Morris
Associates international workshops, and the American
Bankers Association's School for International Banking
at the University of Colorado.
During 1977, the International Operations Division
represented the Office on international banking matters with other United States government departments
and
agencies,
foreign
bank
supervisors,
Congressional staff members, outside private agencies, and American and foreign bankers. The
International Operations Division continued to work
closely with the Congress, the Federal Deposit
Insurance Corporation, the Federal Reserve System,
the Bankers' Association for Foreign Trade, and
foreign officials and bankers to strengthen the quality
and supervision of the National Banking System
throughout the world by strengthening both supervisory techniques and communications among the regulatory agencies, bankers, and foreign governments.

Table 12
Examinations of overseas branches, subsidiaries, and EDP centers of national banks, 1972-1977
Year

Banks

Examinations
Branches and
subsidiaries
EDP centers
184
4
92
3
137
4
80
15
145
13
60
2

1972
1973
1974
1975
1976
1977

Examiners

Countries

24
28
26
25
37
20

16
22
23
23
25
25

58
59
96
153
215
101

Table 13
Outstanding external currency claims of U.S. banks on foreign borrowers, December 31, 1977
(Dollars in billions)

Type of County

Banks

By residence of borrower
Other
Public
Borrowers

Other
Private
Borrowers

Total

Percent of
Total

$55.5

$10.1

$29.0

$94.5

48.8

14.5
9.2
7.4
1.3
.6

4.2
5.9
11.3
1.8
1.7

5.7
9.9
9.4
3.7
1.0

24.4
25.0
28.1
6.8
3.3

12.6
12.9
14.5
3.5
1.7

.9

.4

.6

1.9

.9

Centrally planned

3.0

2.3

.5

5.5

2.8

Other

3.6

.3

.5

4.4

2.3

96.0
49.6

38.0
19.6

60.0
30.9

194.0
100

100.0

Industrialized
Developing, by income group:
High income
Upper middle income
Middle income
Lower middle income
Low income
Oil exporting surplus

Total
Percent of total claims




33




VIII. Administration
The Administration Department is responsible for
providing a range of administrative services which
support the on-going functions of the Office of the
Comptroller of the Currency. The Department is
headed by the Deputy Comptroller for Administration
and is divided into three primary operating divisions —
Finance and Administration, Bank Organization and
Structure, and Human Resources. The functions of the
Personnel Management Division were assumed by the
new Human Resources Division in January. A fourth
division, Financial Accounting and Reporting, is organizationally authorized; however, it was not staffed
during 1977 and its duties were accomplished by
other units.

Bank Organization and Structure Division
The Bank Organization and Structure Division is responsible for supervising the processing of bank structure applications. The division, consists of four
branches: new banks, new branches, capital increase,
and mergers. 1977 was the first full year of operations
under the Comptroller's revised corporate activity procedures, developed to improve efficiency and to expand the role of the regional offices in the decisionmaking process, particularly in the area of branching.
Initial review of the year's activities indicate that the
new procedures have resulted in more expeditious
processing of applications, more consistent application of policy, and improved analyses. It is expected
that 1978 will see further improvement in those areas.
The division staff continues to monitor industry
changes as a result of innovations in technology and
marketing practices and changes in law. The Community Reinvestment Act of 1977 is expected to have a
significant effect on division activities. That Act, which
was signed by the President in late 1977, requires federal financial institution regulators to encourage the
institutions they regulate to meet the credit needs of
their communities, including low and moderate income
neighborhoods. It also requires regulators to take an
institution's record in meeting those needs into account when deciding on applications for deposit
facilities. Division staff members and representatives of
other divisions and the other regulatory agencies are
currently engaged in developing regulations and procedures to implement the Act. Regulations must be effective by November 1978.




Technology also affects the division. As a result of
court decisions ruling that customer-bank communications terminals constitute branches, the division certificated over 500 such branches in 1977.

Finance and Administration Division
The Finance and Administration Division is responsible
for accounting and promoting optimum utilization of
the Office of the Comptroller of the Currency's financial
and physical resources such as accounting, budgeting, contracting, office space leasing and management, and publications control and distribution. The
division was reorganized in April 1977 and was expanded to include four branches — financial management, procurement and contracting, distribution
services, and administrative services.
The Financial Management Branch develops policy
for and directs Office fiscal and budgetary operations.
In 1977, that branch refined the computer-based financial information system (FIS), which was developed
in 1976 and became fully operational in 1977. The FIS
is based on the concept of cost center responsibility
accounting, which helps to promote optimum utilization
of financial and physical resources. The system provides managers with financial information to use in
evaluating and controlling the costs of their operations.
More stringent internal controls were also established
in 1977, which will result in substantial error reduction
in 1978.
The Financial Management Branch also further refined the computerized budget monitoring system
which compares actual versus budgeted expenses by
individual expense account in monthly budget performance reports for each organizational unit. That system, which was fully operational in 1977, also identifies
potential areas where cost savings may be effected
and increases managers' awareness of the need to
control expenses.
The first year's results under the Office's new budget
process were very satisfactory. Actual 1977 expenses
were 4.5 percent under budget and revenues were 0.1
percent under budget.
The Procurement and Contracting Branch is responsible for purchasing goods and services for the Office.
During 1977, the branch concentrated on developing
more comprehensive and consistent policies and procedures. As a result, significant improvements were
35

made in contract quality and documentation and in
controlling procurement costs.
The Distribution Services Branch provides printing
and supply operations and mail and messenger services for the Office. In 1977, the branch developed
and implemented a mail distribution accountability system which identified internal mail and postal cost
areas. As a result of that accountability system, mailing
consolidations and folding procedures were instituted
and increased postal costs were avoided despite a
substantial increase in mailing volume.
Productivity significantly increased in the Distribution
Services Branch in 1977 because of divisional coordination and work requirement planning. Printing requirements increased by 100 percent, but overtime
costs decreased by $55,000, with no permanent staff
increases.
The Administrative Services Branch has a dual function, it provides both facilities management and records management services. Growth and organizational
changes in the Office required the Facilities Management Section of the Administrative Services Branch to
oversee construction management and space design
projects to renovate and relocate several departments
in the Washington headquarters. Five regional offices
— Dallas, New York, Memphis, Cleveland and Kansas
City — were also relocated and redesigned in 1977
because of increased space requirements.
The Facilities Management Section also arranged for
the installation of a new telephone system which allows
direct dialing of certain employees. The system utilizes
less expensive computer software rather than large
multi-button telephone hardware. Cost savings and
higher secretarial productivity are expected in 1978 as
a result of that system.
The Publications and Records Section conducted a
word processing/administrative support study in
cooperation with the Law Department. Function and
equipment recommendations are to be effected in
1978. The section, in conformance with the Presidential management initiative, also reduced all Office records retention schedules by 10 percent in 1977.

Human Resources Division
With the approval of the Department of the Treasury on
January 18, 1977, the Office of the Comptroller of the
Currency (OCC) began implementation of its human
resources programs. To accomplish that massive undertaking, six functional groups were created within
the new Human Resources Division. Under the group
concept, the Office has been successful in establishing ongoing programs in staff analysis, national recruitment, compensation, employee relations, personnel development, and staffing and operations. To improve communications, regional directors of human
resources were designated in each of OCC's 14 regional offices.
The Staff Analysis Program is designed to identify
and analyze the OCC's present and future staff and
skills needs. Through the development and maintenance of a computer-based human resources information system (HRIS), staff analysis will soon be capable
of providing management with projections, personnel
36



trends, and skill searches. HRIS is expected to become fully operational in 1978. The system will support
position and job monitoring so that career ladders,
training and development activities, and recruiting can
be scheduled to coincide with continuously changing
staff and skill requirements. In addition to the continuous development of the HRIS, staff analysis was responsible for coordinating the Office's conversion to
the Treasury Personnel/Payroll System (TPPIS). TPPIS
has provided OCC with an automated system for
payroll and personnel management information which
will be totally compatible and fully integrated with
HRIS.
To recruit the highest caliber applicants for the
supervision and regulation of national banks, the
Human Resources Division implemented a National
Recruitment Program. Because of professional/
financial community competition, national recruitment
is a multiphased program for identifying and locating
highly qualified candidates most suited to careers in
bank examination. National and regional recruiters
were designated and were provided with professional
training in interviewing techniques. The college and
university relations program was implemented to better
acquaint university placement officials and faculty
members with the Office. As a result of those recruitment efforts, over 2,000 direct-mail applications were
received and 185 colleges and universities were visited by regional recruiters. The success of the national
recruitment program is reflected by the 1,550 initial
interviews conducted by regional recruiters. Those
interviews produced 310 prospective candidates who
were invited to regional offices for follow-up interviews
and further screening. In conjunction with the national
recruitment effort, the Office has established a minority
placement program to identify and attract highly qualified minorities to careers in bank examination.
In keeping with our goal of attracting only the most
highly qualified individuals, the Compensation Group
was charged with the responsibility for developing a
compensation program which will be comparable to
that in the professional/financial community. A line
management committee, comprised of deputy comptrollers, regional administrators, and Department of the
Treasury representatives, was designated to develop
salary administration policies based on the value of
work performed. Development of that system requires
accurate position information and a factor evaluation
system for all professional, administrative, and technical positions. Design of the salary administration program is projected for completion by the summer of
1978. Implementation plans will then be finalized for a
smooth transition of the new program.
The Employee Relations Program has been established to provide solutions to employee problems and
to recognize deserving employees in a positive management relations environment. The program is designed to bring traditional government personnel programs to the attention of all personnel, supervisors and
employees alike, as well as to promote employee
well-being and to identify emerging problems. Primary
emphasis for the Employee Relations Program has
been placed on the development of new and uniform

policies for the administration of adverse and
disciplinary actions, grievances, incentive awards,
employee travel, performance evaluation, and jobrelated expenses. Although those new policies will not
be firmly established until 1978, employee relations is
providing advice and guidance to employees and
management officials. They also are responsible for
employee counseling, health benefits, and retirement
information.
High quality performance was highlighted in 1977
when four employees received the Department of the
Treasury Meritorious Service Awards. Additionally, 26
employees were recognized by the Secretary of the
Treasury for outstanding or exemplary service which
served to effect significant monetary savings, increase
efficiency, or improve government operations.
Internally, 232 employees received either cash awards
or high quality increases for outstanding performance
or special acts.




The Human Resources Division has implemented a
comprehensive Personnel Development Program to
ensure that all professional and technical employees
develop to their maximum potential and keep abreast
of current trends and changing procedures. Accomplishments for 1977 include the implementation of
the Introductory Bank Examiner School, which provided training for 220 newly appointed commercial
examiners. The Introductory Trust Examiner School
also was implemented and trained 27 newly appointed
trust examiners. An Advanced Development Center
was established to provide management training for
senior employees, and four sessions were conducted.
A Senior Development Center was also established to
focus on individual career development plans for the
Office's highest level managers.

37




IX. Consumer Affairs
The Consumer Affairs Division was established in
March 1974, almost one year before it was legislatively
mandated by the Federal Trade Commission Improvements Act of 1974. By September 1974, the division was fully operational. Responsibility for enforcement of consumer laws with respect to national banks
rests with the Consumer Affairs Division. In fulfilling
that responsibility the division performs several basic
functions:
• Advising the Comptroller of the Currency on
consumer-related policy matters.
• Resolving consumer complaints and responding to inquiries.
• Coordinating and monitoring the consumer
examination program.
• Implementing corrective action for violations
discovered during the examination.
• Monitoring electronic funds transfer (EFT)
developments.
• Maintaining liaison with consumer groups, trade
associations and other agencies.
• Developing consumer education materials.
• Compiling new and revised laws and regulations and disseminating them to banks and the
public.
The Comptroller has publicly expressed his commitment to protecting the rights of consumers.
Consumers' rights can best be protected by guaranteeing that national banks comply with consumer laws
and by informing consumers of their rights and available remedies.
In 1977, the Associate Deputy Comptroller for
Consumer Affairs continued to serve as the Comptroller's representative on the National Commission on
Electronic Fund Transfers. During the year, his
involvement with the Commission expanded to include
the role of Chairman of the Consumer Affairs Committee. The Committee studied the possible effects of EFT
on consumers in areas such as privacy, convenience
and cost.

Compliance
Compliance is achieved through the bank examination
process and by the review and resolution of consumer
complaints. Through the complaint handling process,
the division is notified of particular problem areas




which may need greater scrutiny in future examinations.
In 1977, 8,224 written complaints, a 25 percent
increase over 1976 figures, were received in the
Washington Office and the 14 regions. A large but undetermined number of complaints were also received
by telephone and walk-ins.
Written complaints are handled by staff attorneys
who contact the bank and review the documentation
and explanations of both parties. If warranted, an
examiner will visit the bank and conduct a more
thorough investigation. All complaints are entered into
an automated system known as the consumer complaint information system (CCIS). The CCIS
categorizes complaints by region, bank and nature of
complaint. That information is furnished to regional offices and is then made available to consumer examiners for use in consumer bank examinations.
The Consumer Affairs Division began preparations
of a consumer complaint pamphlet for consumers to
use in filing complaints against national banks with this
Office. The pamphlet briefly describes state and federal consumer banking laws and explains how to file a
complaint. A tear-out postage-paid form is provided for
the consumer to fill out and mail to the appropriate regional office. The pamphlet will be available in lobbies
of national banks.
The second means by which compliance is
achieved is the consumer bank examination process.
Since the inception of the consumer compliance
examination program in late 1976, 69 percent of all national banks (3,196) have been examined. A computer
information system has been developed to streamline
the recording and processing of consumer law violations and resulting corrective action. The consumer
examination information system (CEIS) captures,
stores and categorizes information obtained from
consumer examinations. Analyses of the information
provide data on such topics as number of customers
affected, dollar impact of violations, and total number
of violations in a specific category.
The consumer examination has been expanded in
two specific areas, fair housing and trust department
consumer loans. Comprehensive procedures have
been developed for processing fair housing complaints. Those procedures are triggered by consumer

39

complaints and are supplemental to the fair housing
portion of the regular consumer examination. The expanded fair housing procedures were field tested in a
series of six joint fair housing pilot examinations with
representatives from the Civil Rights Division of the
Department of Justice acting as observers. The Department of Justice observers accompanied national
bank examiners into six national banks to view the fair
housing examination process. The observers later offered their comments and suggestions and collaborated with this division in refining the procedures to the
present form.
The consumer examination program broadened its
scope to include consumer transactions of bank trust
departments. Trust department consumer loans are
reviewed in the same manner as all other consumer
loans.
The Consumer Affairs Division conducted six more
2-week schools across the country this year to train
assistant national bank examiners in consumer laws.
The schools stress examination techniques and rely
heavily on case studies to give the examiners a good
functional background in consumer laws and regulations. Particular emphasis is placed on evaluating
policies and practices to detect unlawful discrimination. Representatives from bank trade associations,
consumer groups and federal and state regulatory
agencies were also invited to attend the schools.
The Comptroller's Handbook for Consumer Examinations was revised in 1977, from its original form in
1976. The finalized handbook, the first of its kind, was
published in September 1977. The handbook is
divided into 14 sections, each relating to a specific
law, regulation or banking practice. Examination and
verification procedures are provided in each section.
Although the handbook was designed primarily as an
examining tool for consumer bank examiners, it has
been made widely available to interested groups.
Among those who received complimentary copies
were all national banks, consumer groups, public libraries, state banking commissions and banking trade
associations. The handbook is also available to the
public.
The division participated in two interagency
consumer schools with the Federal Reserve Board and
the Federal Deposit Insurance Corporation. The purpose of those schools was to give administrators from
each agency an overview of the consumer compliance
program.
Favorable resolution of consumer complaints and
corrective action resulting from consumer examinations had a monetary impact of $799,298 for 13,022
consumers during 1977. In 1977, 1,043 complaints
involving $371,563 were resolved in favor of bank customers. Generally, reimbursements to consumers for
violations of law have been made by banks on a voluntary basis. The Comptroller had the authority to issue

40



cease and desist orders and has referred several
cases of willful violations to the Justice Department.
The Office of the Comptroller of the Currency has
participated in an interagency task force established to
develop uniform Truth-in-Lending enforcement
guidelines. The proposed guidelines were published
for comment in the Federal Register on October 18,
1977. The proposed guidelines describe the circumstances under which an institution must make reimbursement and detail the procedures it must follow
when reimbursing consumers for violations. Enforcement of guidelines for Regulation B are also being
drafted by the agencies.

Legislation
In 1977, the Consumer Credit Protection Act (CCPA)
was expanded by the enactment of the Fair Debt Collection Practices Act (the Act), Title VIII of the CCPA.
Although the Federal Trade Commission has primary
enforcement authority, the Office of the Comptroller of
the Currency is responsible for enforcement of the Act
with respect to national banks. Members of the division
participated in an interagency task force to study the
Act and prepare a banking circular and examination
procedures. The banking circular (No. 100) contains a
fact sheet, question and answer summary and a copy
of the Act. The examination procedures will be used by
consumer examiners in testing for bank compliance.
The Community Reinvestment Act of 1977 requires
the Office of the Comptroller of the Currency, along
with other financial regulatory agencies, to assess a
bank's record of meeting the credit needs of its community when making decisions to grant or deny charters, branch applications, relocation approvals and
mergers. A series of public hearings have been
scheduled to receive comments and recommendations from interested parties on the implementation of
the Act.

Liaison
The Consumer Affairs Division maintains continuing
liaison with federal regulatory agencies, state banking
departments, consumer interest groups and industry
associations. Consumer groups contribute significantly
to program planning, supplying feedback on the
needs of consumers. In August, the Comptroller of the
Currency met with representatives from 22 consumer
and civil rights groups to discuss areas of mutual
concern. That meeting represents the prominence of
consumer interests in the policies of the Office of the
Comptroller of the Currency.
Preparations have begun on a consumer booklet
describing consumer rights and responsibilities under
consumer credit and fair lending laws. Libraries,
consumer groups, schools and banks are among the
intended recipients of the booklet.

X. Other Activities
Operations Review
During 1977, the range of Operations Review activity
was widened to include: (1) development and use of
programs designed to assess the effectiveness and efficiency of functions other than examinations; (2) performance of investigations of a special, non-recurring
nature; and (3) implementation of review procedures
for solicitation of comments from national banks. Plans
were developed for 1978 to reemphasize the peer review concept through the conduct of on-site reviews to
assess examiner compliance with revised examination
procedures.
Review emphasis in 1977 was placed on the Office's
consumer affairs activity. Following a review of approximately 100 consumer reports of examination and a
sampling of consumer complaints received by the Office, a formal report was issued. The report contained
recommendations to revise examiner instruction and
administrative controls in ways that would promote
consistency in preparation of the examination reports
and recommendations designed to simplify and, therefore, speed the process of responding to consumer
complaints.
Procedures were instituted to supplement selfassessment of Office performance with the views of
regulated national banks. A short questionnaire was
developed to solicit comments about benefits derived
from the examination, areas requiring more emphasis,
and the relationship between banks and the Office.
Approximately 900 responses were received covering
all types of examinations. From those responses,
periodic reports were prepared and issued to the
Deputy for Operations Review and to regional administrators. The reports provided a cross-section of
the responses received. A similar questionnaire, put in
place late in the year, is being sent to national banks
who have recently received decisions on applications
to charter, branch, merge, change location or title or to
increase capital. The questionnaire solicits comments
on the timeliness of the decision, obstacles in the process and adequacy of the explanation of the decision.
Protestants of the same applications were sent questionnaires to ask it they had adequate opportunity to
be heard. It is anticipated that the questionnaire format
will continue with periodic changes made in subject
matter.
The Internal Audit Staff of the Office of the Comptrol-




ler of the Currency is assigned to the Deputy Comptroller for Operations Review. The Deputy Comptroller, in
addition to auditing, has overall responsibility for reviewing, evaluating, and monitoring the quality and effectiveness of the OCC supervisory and regulatory
functions.
Audit assignments during 1977 included the verification of securities; the examination of activities relating
to assessment and investment policies; tests of outstanding travel advances; and reviews of financial
statements, selected expenditures, procurement practices and accounting controls. All recommendations on
the financial and operations systems have been implemented or are in the process of being included in
management plans to improve Office acitivities.

Operations Planning
The Operations Planning Department, under the direction of the Deputy Comptroller for Operations Planning,
manages the process by which each functional and
operational unit prepares results-oriented operating
plans for the oncoming budget year and the three
years thereafter. As each 18-month cycle begins, assumptions pertaining to the ever-changing economic,
political, social and technological environments in
which the Office and the banking industry operate are
compiled and distributed to all units. Those assumptions, together with the policy objectives set and updated by the Comptroller and operating goals established by functional unit heads in support of those objectives, form the base for results-oriented, measurable, realistic performance targets and action programs
set out in the unit plans. Those unit plans are
consolidated into an overall Office plan, and the performance of each unit is periodically monitored to see
the extent to which planned results are achieved.
During 1977, the department continued conducting
orientation sessions for newly appointed key executives and planning personnel in Washington and in
the regions, to ensure the effective functioning of the
planning process. Through feedback sessions with
planning associates and extensive research on available authorities and other planning systems, the planning process was refined and paperwork requirements
substantially reduced. By year-end, the operations
planning guide was completely revised and now reflects the best current thought on planning systems.
41




XI. Financial Operations of the Office of the
Comptroller of the Currency
Total revenue of the Office of the Comptroller of the
Currency for 1977 was $87.9 million, an increase of 6.1
percent over 1976, compared to a 40.6 percent
increase in the previous year. Assessment receipts,
which account for 92 percent of total revenue,
amounted to $80.9 million, an increase of $4.8 million
due principally to an increase in national bank assets.
Revenue from trust examinations totaled $2,747,000,
an increase of $220,000. Revenue from applications
for new charters and mergers and consolidations
increased by $22,000 and $32,000 respectively. Fees
for special supervisory examinations and applications
for new branches declined $144,000 and $25,000 respectively. Interest on investments increased
$149,000, a rise of 5.8 percent, to a total of $2,696,000.
The other revenue categories remained at substantially
the same levels as in 1976.
Total expenses amounted to $83.9 million, compared to $80.4 million for 1976, an increase of $3.5 million. That represents only a 4.4 percent increase in
1977, compared to the 17.1 percent increase from
1975 to 1976.
Salaries, personnel benefits and travel expenses
amounted to $70.1 million, or 83.6 percent of total ex-




penses for the year. Those three expenses amounted
to $66.3 million in 1976. Salary increases were caused
by a full year under the government-wide general pay
increase of 4.8 percent, effective October 1976;
another general pay increase of 7.05 percent, effective
October 1977; and an increase in our examining staff
and support personnel. Travel expenses totaled $10.7
million, a decline of $1.5 million from 1976.
The remaining expenses totaled $13.7 million, a decrease of $289,000 from the previous year. The most
significant changes occurred in rent, which increased
$535,000, and consultants, which decreased $1.8 million. The 1976 consultants expense included the cost
of implementing the procedures study recommendations.
The equity account is in reality a reserve for
contingencies. Financial operations in 1977 increased
that reserve by the $3.9 million excess of revenue over
expenses, to $30.4 million at year-end. That represents
a 4-month reserve for operating expenses, based on
the level of expenses during the last 3 months of 1977.
The equity account has been administratively restricted in the amount of $2,511,000, as explained in
note 2 to the financial statements.

43

Table 14

COMPTROLLER OF THE CURRENCY
BALANCE SHEETS
December 31
1977
1976
ASSETS
Current assets:
Cash
Obligations of U.S. government, at amortized cost (approximates market value) (Note 1)
Accrued interest on investments
Accounts receivable
Travel advances
Prepaid expenses and other assets
Total current assets

$ 1,436,692
13,336,032
344,474
726,793
725,636
313,809

$

167,876
15,619,372
410,908
506,308
589,041
317,227

16,883,436

17,610,732

17,990,955

13,426,442

Fixed assets and leasehold improvements, at cost (Note 1):
Furniture and fixtures
Office machinery, equipment and software
Leasehold improvements

3,453,415
1,250,094
5,005,914

2,719,323
934,731
4,394,285

Less accumulated depreciation and amortization .

9,709,423
2,051,371

8,048,339
1,517,084

Long-term obligations of U.S. government, at amortized cost (approximates market value) (Note 1).

7,658,052

6,531,255

$42,532,443

$37,568,429

$ 3,161,167
2,425,071

$ 2,065,099
193,881
2,759,575

5,586,238

5,018,555

3,804,739
2,705,716

3,377,354
2,705,297

12,096,693

11,101,206

2,511,000
27,924,750

2,330,000
24,137,223

30,435,750

Total assets

26,467,223

$42,532,443

$37,568,429

LIABILITIES AND COMPTROLLER'S EQUITY
Current liabilities:
Accounts payable and accrued expenses .,
Taxes and other payroll deductions
Accrued travel and salaries
Total current liabilities
Long-term liabilities:
Accumulated annual leave
Closed Receivership Funds (Note 2)
Total liabilities
Comptroller's equity:
Administratively restricted (Note 2)
Unrestricted

Total liabilities and Comptroller's equity . . . .
See notes at end of tables.


44


Table 15

COMPTROLLER OF THE CURRENCY
STATEMENTS OF REVENUE, EXPENSES AND COMPTROLLER'S EQUITY
Year ended December 31

1977

Expenses:
Salaries
Retirement and other employee benefits (Note 3)
Per diem
Travel
Rent and maintenance (Note 3)
Communications
Moving and shipping
Employee education and training
Data processing
Printing, reproduction and subscriptions
Office machine repairs and rentals
Depreciation and amortization
Supplies
Consulting services
Conferences
Remodeling
Other

Excess of revenue over expenses
Comptroller's equity at beginning of year .
Comptroller's equity at end of year

1976

$80,890,627
3,911,277
2,695,547
105,058
247,922

$76,128,296
3,828,929
2,546,640
219,977
85,682

87,850,431

Revenue (Note 1):
Semiannual assessments
Examinations and investigations .
Investment income
Examination reports sold
Other

82,809,524

54,207,151
5,280,343
6,072,674
4,580,710
3,512,347
1,389,048
908,311
1,641,971
1,950,627
1,215,583
474,167
635,063
439,162
747,899
157,435
384,724
284,689
83,881,904

49,305,710
4,898,077
7,972,002
4,152,614
2,977,690
1,219,463
1,095,522
1,700,485
1,690,655
993,668
425,457
498,720
431,249
2,525,685
162,144
49,407
260,132

3,968,527
26,467,223
$30,435,750

80,358,680
2,450,844
24,016,379
$26,467,223

See notes at end of tables.




45

Table 16

COMPTROLLER OF THE CURRENCY
STATEMENTS OF CHANGES IN FINANCIAL POSITION
Year Ended December 31
1977
1976
Financial resources were provided by:
Excess of revenue over expenses
Charges and (credits) not affecting working capital in the period:
Additions to accumulated annual leave
Depreciation and amortization
Amortization of premium and accretion of discount on long-term U.S. government obligations, net
Net loss (gain) on sale of fixed assets
Working capital provided by operations for the period
Long-term U.S. government obligations transferred to current assets
Proceeds from sale of fixed assets
Net closed receivership fund receipts

$3,968,527

$2,450,844

805,397
635,063

391,114
498,720

24,007
(2,559)

(16,872)
207

5,430,435
2,554,204
12,006
419
7,997,064

Total
Increase (decrease) in working capital

481,088
458',011
315,180

9,292,043

Financial resources were used for:
Purchase of long-term investments
Purchase of leasehold improvements
Purchase of fixed assets
Payment of accrued leave

9,015,397

7,142,725
611.629
1,159,678
378,011

Total

3,324,013
5,682,382
8,448
554

1,254,279

$(1,294,979)

$7,761,118

$1,268,816
(2,283,340)
(66,434)
220,485
136,595
(3,418)

$ (435,390)
9,617,424
(59,930)
164,571
8,184
91,849

Analysis of Changes in Working Capital

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

(727,296)

See notes on next page.


46


....

(1,002,793)
17,863
(640,660)

(567,683)
Increase (decrease) in working capital

9,386,708

(1,096,068)
193,881
334,504

(Increase) decrease in current liabilities:
Accounts payable and other accruals
Taxes and other payroll deductions
Accrued travel and salaries

(1,625,590)

$(1,294,979)

$7,761,118

Notes to Financial Statements
December 3 1 , 1977 and 1976
Note 1—Organization and Accounting Policies
The Comptroller of the Currency (Comptroller's Office) was
created by an Act of Congress for the purpose of establishing and
regulating a National Banking System. The National Currency Act of
1863, rewritten and re-enacted as The National Banking Act of 1864,
created the Comptroller's Office, provided for its supervisory functions and the chartering of banks. The revenue of the Comptroller's
Office is derived principally from assessments and fees paid by the
national banks and interest on investments in U.S. government obligations. Assessments paid by national banks are not construed to
be government funds. No funds derived from taxes or federal appropriations are allocated to or used by the Comptroller's Office in
any of its operations. The Comptroller's Office is exempt from federal
income taxes.
The accounts of the Comptroller's Office are maintained on the
accrual basis. Furniture, fixtures, office machinery and equipment
are depreciated on the straight-line basis over estimated useful lives
of 5 to 10 years. Leasehold improvements are amortized over the
terms of the related leases (including renewal options) or the estimated useful lives, whichever is shorter. Premiums and discounts on
investments in U.S. government obligations are amortized or accreted ratably over the terms of the obligations. U.S. government obligations having a maturity date more than 12 months from the date
of the financial statements are classified as long-term investments.
Note 2—Closed Receivership Funds
Prior to the assumption of closed national bank receivership functions by the Federal Deposit Insurance Corporation in 1936, the
Comptroller of the Currency appointed individual receivers for all
closed national banks. After settling the affairs of the closed banks
and issuing final distributions to the creditors of the banks (principally depositors), the receivers transferred to the custody of the
Comptroller's Office all remaining funds which represented distributions which were undeliverable or had not been presented for payment. Closed Receivership Funds in the accompanying balance
sheets represent the potential claims for such funds by the original
creditors of the receiverships. Since inception of the receivership
function, unclaimed funds have been invested in U.S. government
securities. The income from investments has been applied as an
offset to expenses incurred by the Comptroller's Office in performing
this function and accordingly has been recorded as revenue in the
statements of revenue, expenses and Comptroller's equity. Through
December 31, 1977, income has exceeded direct expenses by approximately $2,511,000 (including $180,000 and $170,000 in 1977
and 1976, respectively), which excess amount is included in the
Comptroller's equity. An analysis of allocable indirect expenses has
not been made.
In its reexamination of the legal status of Closed Receivership
Funds and related excess income earned thereon, the Comptroller's

legal staff has been unable to locate any definitive statutory or case
law which specifies the ultimate disposition of such funds. In the absence of legal precedent, the legal staff is unable to currently give a
definitive opinion as to the appropriate disposition of either the unclaimed receivership funds or the excess income from investment of
such funds. The Comptroller is in the process of seeking legislative
resolution of these matters.
Pending a resolution of the legal uncertainties and legislative action surrounding these funds, the Comptroller's Office has included a
liability for Closed Receivership Funds in its balance sheets and
recognized income from investment of such funds as revenue in its
statements of revenue, expenses and Comptroller's equity. In recognition of these uncertainties, the Comptroller had administratively
restricted a portion of the Comptroller's equity in an amount that approximates the excess income earned from investment of Closed
Receivership Funds since custody of the funds commenced.
Note 3 —Commitment and Contingencies
Regional and sub-regional offices lease office space under
agreements which expire at varying dates through 1992. Minimum
rental commitments under 100 leases in effect at December 31,
1977 aggregate approximately $1,586,000 for 1978 and varying
lesser amounts each year thereafter, to approximately $837,000 for
1982, $2,388,000 for the period 1983-1987, and $664,000 for the
period 1988-1992. In addition, the Comptroller's Office occupies office space in Washington, D.C., under a lease agreement which provided for an initial 5-year term with five consecutive 5-year renewal
options. The Comptroller's Office has exercised two of its options
through 1989. Rent is at an annual rate of $1,753,000. Certain of the
leases provide that annual rentals may be adjusted to provide for
increases in taxes and other related expenses.
The Comptroller's Office contributues to the Civil Service retirement plan for the benefit of all its eligible employees. Contributions
aggregated $3,697,700 and $3,381,600 in 1977 and 1976, respectively. The plan is participatory, with 7 percent of salary being
contributed by each party.
The accompanying balance sheets include a liability for annual
leave accumulated within specified limits, which if not taken by employees prior to retirement is paid at that date.
Various banks in the District of Columbia have deposited securities with the Comptroller's Office as collateral for those banks entering into and administering trust activities. These securities, having a
par or stated value of $13,318,000 are not assets 'of the Comptroller's Office and accordingly are-not included in the accompanying
financial statements.
The Comptroller's Office is a defendant, together with other bank
supervisory agencies and other persons, in litigation generally related to the closing of certain national banks. In the opinion of the
Comptroller's legal staff, the Comptroller's Office will be able to defend successfully against these complaints and no liability is expected to result therefrom.

OPINION OF INDEPENDENT ACCOUNTANT
To the Comptroller of the Currency
In our opinion, the accompanying balance sheets, the related statements of revenue, expenses and Comptroller's
equity and of changes in financial position present fairly the financial position of the Comptroller of the Currency at
December 31, 1977 and 1976, and the results of its operations and the changes in its financial position for the years
then ended, in conformity with generally accepted accounting principles consistently applied. Our examinations of
these statements were made in accordance with generally accepted auditing standards and accordingly included
such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances, including confirmation of securities owned at December 31, 1977 and 1976, by correspondence with
the custodians.
Price Waterhouse & Co.

Washington, D.C.
March 31, 1978.



47







APPENDIX A

Merger Decisions, 1977




Merger* Decisions, 1977
/. Mergers consummated, involving two or more operating banks
Jan. 1, 1977:
Page
Barnett Bank of Miami Beach National Association, Miami
Beach, Fla.
Barnett Bank of Bay Harbor Islands, National Association,
Bay Harbor Islands, Fla.
Barnett Bank at Westchester, National Association, Unincorporated area of Dade County, Fla.
Barnett Bank of Miami, Miami, Fla.
Barnett Bank at Midway, National Association, Unincorporated area of Dade County, Fla.
Merger
55
Jan. 1, 1977:
Barnett Bank of Ocala, National Association, Ocala, Fla.
Barnett Bank of East Ocala, National Association, Ocala,
Fla.
Merger
56
Jan. 1, 1977:
Barnett Bank of Winter Haven, National Association, Winter Haven, Fla.
Barnett Bank of Cypress Gardens, National Association,
Winter Haven, Fla.
Merger
56
Jan. 1, 1977:
Barnett Bank of Winter Park, National Association, Winter
Park, Fla.
Barnett Bank of Orlando, Orlando, Fla.
Barnett Mall Bank, National Association, Winter Park, Fla.
Barnett Bank of West Orlando, Orlando, Fla.
Barnett Bank of South Orlando, Orlando, Fla.
Merger
57
Jan. 1, 1977:
City National Bank of Miami, Miami, Fla.
City National Bank of Miami Beach, Miami Beach, Fla.
The City National Bank of Coral Gables, Coral Gables,
Fla.
City National Bank of North Miami, North Miami, Fla.
City National Bank of South Dade, Unincorporated area
of Dade County, Fla.
Purchase
58
Jan. 1, 1977:
The First National Bank of Homestead, Homestead, Fla.
First National Bank of Princeton-Naranja, Princeton-Naranja,
Fla.
Merger . . .
59
Jan. 1, 1977:
Sun Bank of Semoran, National Association, Unincorporated area of Seminole County, Fla.
Sun Bank of Seminole, Altamonte Springs, Fla.
Merger
59
Jan. 3, 1977:
The Citizens National Bank, Laurel, Md.
Belair National Bank, Bowie, Md.
Consolidation
60
Jan. 3, 1977:
Landmark Union Trust Bank of St. Petersburg, National
Association, St. Petersburg, Fla.
Landmark Bank of Clearwater, National Association,
Clearwater, Fla.
Landmark Bank of Seminole, National Association, Unincorporated area of Pinellas County, Fla.
Landmark Bank at Tyrone, St. Petersburg, Fla.
Landmark Bank of Tarpon Springs, National Association,
Tarpon Springs, Fla.
Merger
61




Jan. 31, 1977:
Page
First Security Bank of Utah, National Association, Ogden,
Utah
First Security State Bank of Springville, Springville, Utah
Purchase
62
Feb. 1, 1977:
Sun First National Bank of Delray Beach, Delray Beach,
Fla.
Sun Second National Bank of Delray Beach, Delray
Beach, Fla.
Merger
62
Mar. 1, 1977:
Deposit National Bank, Dubois, Pa.
Farmers and Merchants Bank, St. Marys, Pa.
Merger
*
63
Mar. 3, 1977:
United Virginia Bank/Seaboard National, Norfolk, Va.
National Bank of Northampton, Nassawadox, Va.
Merger
64
Mar. 4, 1977:
Dominion National Bank, Fairfax County, Va.
Potomac Bank and Trust Company, Fairfax, Va.
Merger
66
Mar. 24, 1977:
Peoples National Bank of Washington, Seattle, Wash.
Bank of Yakima, Yakima, Wash.
Purchase
67
Mar. 25, 1977:
Metropolitan National Bank, Richmond, Va.
Second National Bank of Richmond, Richmond, Va.
Merger
68
Mar. 31, 1977:
American National Bank and Trust Company of Fort
Lauderdale, Fort Lauderdale, Fla.
Sunrise American National Bank of Fort Lauderdale, Fort
Lauderdale, Fla.
Southport American National Bank of Fort Lauderdale,
Fort Lauderdale, Fla.
Merger
69
Mar. 31, 1977:
Central Bank, National Association, Oakland, Calif.
Peninsula National Bank, Burlingame, Calif.
Purchase
70
Mar. 31, 1977:
The First National Bank of Maryland, Baltimore, Md.
The Hancock Bank, Hancock, Md.
Merger
71
Apr. 1, 1977:
Flagship Bank of St. Petersburg, N.A., St. Petersburg,
Fla.
Flagship Bank North of St. Petersburg, N.A., St. Petersburg, Fla.
Flagship Bank South, St. Petersburg, St. Petersburg, Fla.
Merger
72
Apr. 1, 1977:
The National Bank of Washington, Washington, Iowa
Ainsworth State Bank, Ainsworth, Iowa
Merger
73
Apr. 1, 1977:
Southern National Bank of North Carolina, Lumberton,
N.C.
Lafayette Bank & Trust Company, Fayetteville, N.C.
Merger
74

51

Apr. 1,1977:
Wachovia Bank and Trust Company, N.A., WinstonSalem, N.C.
Town and Country Bank, Lumberton, N.C.
Merger

Page

75

Apr. 29, 1977:
Old National Bank of Washington, Spokane, Wash.
The Industrial Park Branch of First National Bank in Spokane, Spokane, Wash.
Purchase

77

May 2, 1977:
First National Bank of Pompano Beach, Pompano Beach,
Fla.
First National Bank of Broward County, Lighthouse Point,
Fla.
First National Bank of Margate, Margate, Fla.
First National Bank on the Beach, Pompano Beach, Fla.
Merger

77

May 13, 1977:
First National Bank of Mansfield, Mansfield, Ohio
The Peoples National Bank of Plymouth, Plymouth, Ohio
Merger

78

May 20, 1977:
The First National Bank of Atlanta, Atlanta, Ga.
The First Augusta Bank and Trust Company, Augusta,
Ga.
Purchase

83

May 27, 1977:
The National Bank of Northern New York, Watertown, N.Y.
The First National Bank of Mexico, Mexico, N.Y.
Merger
June 1, 1977:
Sun First National Bank of Melbourne, Melbourne, Fla.
Sun First National Bank of Palm Bay, Palm Bay, Fla.
Merger
June 10, 1977:
The First National Bank of Allentown, Allentown, Pa.
The Northampton National Bank of Easton, Easton, Pa.
Purchase
June 17, 1977:
Valley National Bank, Passaic, N.J.
Bankers National Bank, Elmwood Park, N.J.
Purchase
June 30, 1977:
First National Bank of Florida, Tampa, Fla.
First Financial National Bank of Tampa, Unincorporated
area of Hillsborough County, Fla.
Merger
June 30, 1977:
First National Bank of Lakeland, Lakeland, Fla.
Second National Bank of Lakeland, Lakeland, Fla.
Merger
June 30, 1977:
The Russell National Bank, Lewistown, Pa.
The Reedsville National Bank, Reedsville, Pa.
Merger
July 1, 1977:
First National Bank in Venice, Venice, Fla.
First State Bank of Sarasota County, Unincorporated area
of Osprey, Fla.
Merger

84

85

85

87

88

89

90

91

July 1, 1977:
Landmark First National Bank of Fort Lauderdale, Fort
Lauderdale, Fla.
Landmark Bank of North Fort Lauderdale, National Association, Fort Lauderdale, Fla.
Landmark Bank of Plantation, National Association, Plantation, Fla.
Landmark Bank of West Broward, National Association,
Plantation, Fla.
Landmark Bank at the Ocean, National Association, Fort
Lauderdale, Fla.
Landmark Bank of Sunrise, National Association, Sunrise,
Fla.
Landmark Bank of Pompano Beach, N.A., Pompano
Beach, Fla.
Merger

52




July 1, 1977:
Page
Sun First National Bank of Orlando, Orlando, Fla.
Sun Bank of South Orlando, National Association, Orlando, Fla.
Sun Bank of College Park, National Association, Orlando,
Fla.
Sun Bank of East Orlando, National Association, Orlando,
Fla.
Sun Bank of Pine Hills, National Association, Unincorporated area of Orange County, Fla.
Sun Bank of Central Park, National Association, Unincorporated area of Orange County, Fla.
Merger
93
July 5, 1977:
First Peoples National Bank of New Jersey, Haddon
Township (P.O. Westmont), N.J.
Independent National Bank, Stone Harbor, N.J.
Merger
93
July 8, 1977:
Southeast National Bank of Bradenton, Bradenton, Fla.
Southeast Bank of West Bradenton, National Association,
Unincorporated area of Manatee County, Fla.
Merger
95
July 23, 1977:
The National Bank of Wisconsin in LaCrosse, LaCrosse,
Wise.
Midland National Bank, Milwaukee, Wise.
Purchase
96
July 29, 1977:
Rainier National Bank, Seattle, Wash.
The Sixth Avenue Branch of North Pacific Bank, Tacoma,
Wash.
Purchase
97
Aug. 1, 1977:
Columbus National Bank, Columbus, N. Dak.
First National Bank of Crosby, Crosby, N. Dak.
Purchase
98
Aug. 13, 1977:
The Central Trust Company of Northeastern Ohio, N.A.,
Canton, Ohio
The Dime Bank, Canton, Ohio
Purchase
98

Aug. 15, 1977:
Garden State National Bank, Paramus, N.J.
Shore National Bank, Brick Township, N.J.
Purchase
Aug. 15, 1977:
Southeast National Bank of Naples, Naples, Fla.
Southeast Bank of Naples, N.A., Naples, Fla.
Merger
Aug. 22, 1977:
Merchants and Farmers Bank, Portsmouth, Va.
First National Bank of Tidewater, Norfolk, Va.
Merger
Aug. 31, 1977:
First Security Bank of Utah, National Association, Ogden,
Utah
First Security Bank of Bountiful, National Association,
Bountiful, Utah
Merger
Aug. 31, 1977:
Kentwood National Bank, Kentwood, Mich.
Kentwood Bank, N.A., Kentwood, Mich.
Purchase

100

101

101

102

103

Sept. 1, 1977:
Los Angeles National Bank, Los Angeles, Calif.
The Silverlake/Sunset Branch of the Hongkong Bank of
California, San Francisco, Calif.
Purchase

103

Sept. 9, 1977:

92

Puget Sound National Bank, Tacoma, Wash.
Valley National Bank of Auburn, Auburn, Wash.
Purchase
Sept. 30, 1977:
Century National Bank of Broward, Fort Lauderdale, Fla.
Century National Bank of Fort Lauderdale, Fort Lauderdale, Fla.
Merger

104

105

Sept. 30, 1977:
Page
Century National Bank of Broward, Fort Lauderdale, Fla.
Lauderdale Lakes National Bank, Lauderdale Lakes, Fla.
Broward National Bank of Plantation, Plantation, Fla.
Purchase
106
Sept. 30, 1977:
Colonial First National Bank, Red Bank, N.J.
The First National Bank of Hamilton Square, Hamilton
Square, N.J.
Merger
107
Nov. 7, 1977:
The Florida First National Bank at Pensacola, Pensacola,
Fla.
Florida First National Bank at Brent, Brent (P.O. Pensacola), Fla.
Merger
108
Nov. 14, 1977:
The Boatmen's National Bank of St. Louis, St. Louis, Mo.
The National Stock Yards National Bank of National City,
National City, III.
Purchase
108
Nov. 14, 1977:
First National Bank at East St. Louis, East St. Louis, III.
The National Stock Yards National Bank of National City,
National City, III.
Purchase
110
Nov. 28, 1977:
The Fishkill National Bank, Beacon, N.Y.
The Dover Plains National Bank, Dover Plains, N.Y.
Merger
111
Nov. 30, 1977:
Flagship National Bank of Miami, Miami, Fla.
Flagship National Bank of Westland, Hialeah, Fla.
Merger
111
Nov. 30, 1977:
Virginia National Bank, Norfolk, Va.
Virginia National Bank/Fairfax, Springfield, Va.
Merger
112
Dec. 1, 1977:
Florida Coast Bank of Margate, Margate, Fla.
Florida Coast Bank of Coral Springs, National Association, Coral Springs, Fla.
Merger
113
Dec. \ 1977:
The Third National Bank of Circleville, Circleville, Ohio
TNB National Bank, Circleville, Ohio
Purchase
113
Dec. 19, 1977:
First National Bank of Jackson County, Ocean Springs,
Miss.

The Biloxi Branch of Southern National Bank of Hatties- Page
burg, Hattiesburg, Miss.
Purchase
114
Dec. 30, 1977:
Deposit Guaranty National Bank, Jackson, Miss.
Southern National Bank of Hattiesburg, Hattiesburg,
Miss.
Merger
115
Dec. 30, 1977:
The Florida National Bank and Trust Company at Miami,
Miami, Fla.
Florida National Bank at Coral Gables, Coral Cables, Fla.
Florida First National Bank at Opa-Locka, Opa-Locka,
Fla.
Merger
116
Dec. 30, 1977:
Pan American Bank of Miami, Miami, Fla.
Pan American Bank of Dade County, Dade County, Fla.
Pan American Bank of Miami Beach, Miami Beach, Rla.
Pan American Bank of West Dade, Dade County, Fla.
Pan American Bank of Kendale Lakes, National Association, Dade County, Fla.
Merger
116
Dec. 31, 1977:
Atlantic National Bank of West Hollywood, Hollywood,
Fla.
Atlantic National Bank of Hollywood, Hollywood, Fla.
Atlantic National Bank of Davie, Davie, Fla.
Atlantic National Bank of Fort Lauderdale, Fort Lauderdale, Fla.
Merger
117
Dec. 31, 1977:
First & Merchants National Bank, Richmond, Va.
Mountain Trust Bank, Roanoke, Va.
Merger
118
Dec. 31, 1977:
First Bank and Trust Company of Boca Raton, National
Association, Boca Raton, Fla.
University National Bank of Boca Raton, Boca Raton, Fla.
First Bank of West Boca Raton, Boca Raton, Fla.
Merger
119
Dec. 31, 1977:
First National Bank of San Diego County, Escondido, Calif.
Balboa Bank, Chula Vista, Calif.
Merger. . .
119
Dec. 31, 1977:
Heritage Bank National Association, Cherry Hill, N.J.
Pineland State Bank, Brick Town, N.J.
Purchase
:...
120

//. Mergers consummated, involving a single operating bank
Mar. 16, 1977:
The First National Bank of Athol, Athol, Mass.
First Bank of Athol (National Association), Athol, Mass.
Merger
May 2, 1977:
Dallas National Bank in Dallas, Dallas, Tex.
3300 Commerce National Bank, Dallas, Tex.
Merger
May 2, 1977:
First National Bank in Garland, Garland, Tex.
Glenbrook & Avenue A National Bank, Garland, Tex.
Merger
May 31, 1977:
The Iron River National Bank, Iron River, Mich.
The First Iron River National Bank, Iron River, Mich.
Merger
June 7, 1977:
The First National Bank of Lapeer, Lapeer, Mich.
Lapeer Bank, N.A., Lapeer, Mich.
Consolidation
July 1,1977:
The First National Bank of Albany, Albany, Ga.




Page
121

122

122

123

123

First National Interim Bank of Albany, Georgia, Albany, Page
Ga.
Merger
124
July 1, 1977:
The National Bank of Commerce of Jackson, Jackson,
Tenn.
The Fourth National Bank of Jackson, Jackson, Tenn.
Merger
125
July 28, 1977:
City National Bank of Austin, Austin, Tex.
New City National Bank, Austin, Tex.
Merger
125
Aug. 1, 1977:
The First National Bank of Brunswick, Brunswick, Ga.
First National Interim Bank of Brunswick, Brunswick, Ga.
Merger
126
Aug. 1, 1977:
The Millikin National Bank of Decatur, Decatur, III.
Second National Bank of Decatur, Decatur, III.
Merger
126
Aug. 29, 1977:
The First National Bank of Yarmouth, Yarmouth, Mass.

53

The Yarmouth Bank, National Association, Yarmouth, Page
Mass.
Merger
127

Sept. 1, 1977:
Midway National Bank of Grand Prairie, Grand Prairie,
Tex.
Parkway National Bank, Grand Prairie, Tex.
Merger

128

128

129

First National Bank of Mercer County, Celina, Ohio
The Central Trust Company of Mercer County, Celina,
Ohio
Merger
The First National Bank, Dayton, Ohio, Dayton, Ohio
New National Bank, Dayton, Ohio
Merger
Dec. 30, 1977:
American National Bank, Humble, Tex.
Allied Humble Bank, N.A., Humble, Tex.
Merger

130

The First National Bank of Newton, Newton, Tex.
Allied First National Bank, Newton, Tex.
Merger
Dec. 31, 1977:
The Franklin National Bank, Franklin, Ohio
The Huntington National Bank of Franklin, Franklin, Ohio
Merger

130

132

133

133

Dec. 31, 1977:

Oct. 24, 1977:
The Central National Bank of London, London, Ohio
The Huntington National Bank of London, London, Ohio
Merger

131

Dec. 30, 1977:

Oct. 17, 1977:
University National Bank, Rockville, Md.
New University National Bank, Rockville, Md.
Merger

Page

Dec. 29, 1977:

Oct. 11, 1977:
Bellefontaine National Bank, Bellefontaine, Ohio
The Huntington National Bank of Bellefontaine, Bellefontaine, Ohio
Merger

The City National Bank of Bryan, Bryan, Tex.
New City National Bank of Bryan, Bryan, Tex.
Merger

Dec. 2, 1977:

Sept. 12, 1977:
Main Street National Bank of Dallas, Dallas, Tex.
Main Street Commerce Bank National Association, Dallas, Tex.
Merger
Sept. 30 1977:
National Union Bank, Columbiana, Ohio
X National Bank, Columbiana, Ohio
Consolidation

Nov. 1, 1977:

131

Randolph Field National Bank, Universal City, Tex.
Randolph Field Bank of Commerce, N.A., Universal City,
Tex.
Merger

134

135

135

///. Mergers approved but in litigation

IV. Mergers denied

Apr. 27, 1977:
Page
Second National Bank and Trust Company of Lexington,
Lexington, Ky.
Bank of Lexington, Lexington, Ky.
Merger
136

Dec. 1, 1977:
Page
First Peoples National Bank of New Jersey, Haddon
Township, N.J.
The Mainland Bank, Linwood, N.J.
Purchase
139

54




/. Mergers consummated, involving two or more operating banks.
BARNETT BANK OF MIAMI BEACH, NATIONAL ASSOCIATION,
Miami Beach, Fla., and Barnett Bank of Bay Harbor Islands, National Association, Bay Harbor Islands, Fla., and
Barnett Bank at Westchester, National Association, Unincorporated area of Dade County, Fla., and Barnett Bank of
Miami, Miami, Fla., and Barnett Bank at Midway, National Association, Unincorporated area of Dade County, Fla.
Banking offices
Names of banks and type of transaction

Total
assets

Barnett Bank of Bay Harbor Islands, National Association, Bay Harbor Islands, Fla.
(15413), with
and Barnett Bank of Miami, Miami, Fla., with
and Barnett Bank at Midway, National Association, Unincorporated area of Dade County,
Fla. (15870), with
and Barnett Bank at Westchester, National Association, Unincorporated area of Dade
County, Fla. (15337), with
and Barnett Bank of Miami Beach, National Association, Miami Beach, Fla. (13828),
which had
merged Jan. 1, 1977, under charter of the latter bank (13828) and title "Barnett Bank
of Miami, National Association." The merged bank at date of merger had

COMPTROLLER'S DECISION
Barnett Bank of Bay Harbor Islands, National Association, Bay Harbor Islands, Fla. ("Bay Harbor Islands
Bank"); Barnett Bank of Miami, Miami, Fla. ("Miami
Bank"); Barnett Bank at Midway, National Association,
Unincorporated area of Dade County, Fla. ("Midway
Bank"); Barnett Bank at Westchester, National Association, Unincorporated area of Dade County, Fla.
("Westchester Bank") (collectively, "Merging Banks");
and Barnett Bank of Miami Beach, National Association, Miami Beach, Fla. ("Charter Bank"), have applied
to the Comptroller of the Currency for prior permission
to effectuate a merger under the charter of Barnett
Bank of Miami Beach, National Association, and with
the title of "Barnett Bank of Miami, National Association," with headquarters in Miami. The instant application rests upon an agreement executed between the
proponent banks, incorporated herein by reference the
same as if fully set forth.
Bay Harbor Islands Bank, with deposits aggregating
approximately $37 million as of June 30, 1976, was
chartered as a national banking institution on October
26, 1964. Miami Bank is a state-chartered banking institution and has total commercial bank deposits of
$30.7 million. With total depostis of $14.3 million, Midway Bank was organized on June 30, 1970; and Westchester Bank with deposits of $40 million was chartered on June 11, 1964. Charter Bank holds total deposits of $82.5 million and was chartered as a national
bank on November 6, 1933. Collectively, the combined
deposits of the new bank, Barnett Bank of Miami, National Association, will be approximately $184 million.




In
operation

$ 49,409,000
39,555,000

1
1

21,995,000

2

46,596,000

1

101,624,000

To be
operated

2

259,179,000

7

Because of the common ownership and control
which exists among the proponent banks (Merging
Banks and Charter Bank are subsidiaries of the second largest commercial banking organization headquartered in Florida, Barnett Banks of Florida, Inc.,
Jacksonville, Fla.), no meaningful competition exists
among the banks, nor is there any potential for increased competition in the future.
Essentially a corporate reorganization, this application would result in certain economies of scale and increased efficiency of operation among certain subsidiaries of Barnett Banks of Florida, Inc. Those economies and efficiencies of operation should better serve
the banking community as sources of full-service
banking. Accordingly, applying the statutory criteria as
outlined in 12 USC 1828(c), it is the opinion of the Office of the Comptroller of the Currency that this application is in the public interest and should be, and
hereby is, approved. Although this proposal is in compliance with the Florida state banking statutes, the proposal may not be consummated prior to January 1,
1977, the effective date of the newly enacted
branching statute.
November 30, 1976.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are all wholly-owned subsidiaries
of the same bank holding company. As such, their proposed merger is essentially a corporate reorganization
and would have no effect on competition.

55

BARNETT BANK OF OCALA, NATIONAL ASSOCIATION,
Ocala, Fla., and Barnett Bank of East Ocala, National Association, Ocala, Fla.
Banking offices
Total
assets

Names of banks and type of transaction

Barnett Bank of East Ocala, National Association, Ocala, Fla. (15647), with
and Barnett Bank of Ocala, National Association, Ocala, Fla. (10578), which had
merged Jan. 1, 1977, under charter and title of the latter bank (10578). The merged
bank at date of merger had

COMPTROLLER'S DECISION
Barnett Bank of East Ocala, National Association,
Ocala, Fla. ("Merging Bank"), and Barnett Bank of
Ocala, National Association, Ocala, Fla. ("Charter
Bank"), have applied to the Comptroller of the Currency for prior permission to effectuate a merger under
the charter and with the title of,-Barnett Bank of Ocala,
National Association. The subject application rests
upon an agreement executed between the proponent
banks, incorporated herein by reference the same as if
fully set forth.
Merging Bank was organized in September 1966,
and as of June 30, 1976, had total commercial bank
deposits of $18.8 million. Charter Bank was chartered
as a national banking association on July 7, 1914, and
had deposits of $42.2 million as of mid-year 1976.
Both Charter Bank and Merging Bank are subsidiaries of Barnett Banks of Florida, Inc., Jacksonville,
Fla., a registered multi-bank holding company (the
second largest banking organization domiciled in Florida) with 58 commercial banking subsidiaries that had
combined deposits of approximately $2 billion as of
year-end 1975. Inasmuch as both of the proponent
banks are owned and controlled by the same bank
holding company, approval of this proposal will not

$56,020,000
22,344,000

In
To be
operation operated
1
1
2

78,034,000

have the effect of eliminating any meaningful degree of
existing competition, or of foreclosing the potential for
future competition between the two banks.
The subject proposal must be regarded essentially
as a corporate reorganization whereby Barnett Banks
of Florida, Inc., is consolidating its banking interests in
an effort to produce a more efficient and less costly
manner of operation. Additionally, consummation of
the instant proposal will be in accord with Florida's
newly enacted banking statutes.
Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that the intent of the subject application is not
adverse to the public interest and should be, and
hereby is, approved. The merger may not be consummated prior to January 1, 1977, the date that the Florida state banking statutes become effective.
November 30, 1976.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging
sidiaries of the
their proposed
ganization and

banks are both wholly-owned subsame bank holding company. As such,
merger is essentially a corporate reorwould have no effect on competition.

BARNETT BANK OF WINTER HAVEN, NATIONAL ASSOCIATION,
Winter Haven, Fla., and Barnett Bank of Cypress Gardens, Winter Haven, Fla.
Banking offices
Total
assets

Names of banks and type of transaction

Barnett Bank of Cypress Gardens, National Association, Winter Haven, Fla. (15270), with,
and Barnett Bank of Winter Haven, National Association, Winter Haven, Fla. (13383),
which had
merged Jan. 1, 1977, under charter of the latter bank (13383) and title "Barnett Bank
of East Polk County, National Association." The merged bank at date of merger had

COMPTROLLER'S DECISION
Barnett Bank of Cypress Gardens, National Association, Winter Haven, Fla. ("Merging Bank"), and Barnett
Bank of Winter Haven, National Association, Winter
Haven, Fla. ("Charter Bank"), have applied to the
Comptroller of the Currency for prior permission to effectuate a merger under the charter of Barnett Bank of
Winter Haven, National Association, and with the title
of "Barnett Bank of East Polk County, National Association." The subject application rests upon an agreement

56




In
To be
operation operated

$19,991,000

1

50,398,000

2

50,398,000

3

executed between the proponent banks, incorporated
herein by reference, the same as if fully set forth.
Merging Bank, a subsidiary of Barnett Banks of Florida, Inc., Jacksonville, Fla., the second largest commercial banking organization in Florida, was chartered
as a national banking association on February 25,
1964, and as of June 30, 1976, had total deposits of
approximately $17 million.
Charter Bank, also a subsidiary of Barnett Banks of
Florida, Inc., was organized as a national bank on October 11,1929. At mid-year 1976, Charter Bank's com-

mercial bank deposits aggregated $43.2 million. Because of the common ownership, control and affiliation
existing between Merging Bank and Charter Bank, approval of this proposal would not have the effect of
eliminating a significant degree of existing competition, or of foreclosing the potential for increased competition between the two banks.
The subject application must be regarded as a portion of a corporate reorganization whereby Barnett
Banks of Florida, Inc. is consolidating its banking interests in order to provide a more streamlined, efficient
operation. Also, this proposal does not appear to be in
violation of the recently enacted Florida branching
statutes.

It is, therefore, the opinion of this Office that the
banking public is well served by approval of this, application and that the application should be, and hereby
is, approved. This merger may not be consummated
prior to January 1, 1977, the effective date of the new
state branching statute.
November 30, 1976.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are both wholly-owned subsidiaries of the same bank holding company. As such,
their proposed merger is essentially a corporate reorganization and would have no effect on competition.

BARNETT BANK OF WINTER PARK, NATIONAL ASSOCIATION,
Winter Park, Fla., and Barnett Bank of Orlando, Orlando, Fla., and Barnett Mall Bank, National Association, Winter
Park, Fla., and Barnett Bank of West Orlando, Orlando, Fla., and Barnett Bank of South Orlando, Orlando, Fla.
Banking offices
Names of banks and type of transaction

Total
assets

Barnett Bank of Orlando, Orlando, Fla., with
and Barnett Bank of South Orlando, Orlando, Fla., with
Barnett Bank of West Orlando, Orlando, Fla., with
and Barnett Mall Bank, National Association, Winter Park, Fla. (15900), with
and Barnett Bank of Winter Park, National Association, Winter Park, Fla. (14767),
which had
merged Jan. 1, 1977, under charter of the latter bank (14767) and title "Barnett Bank
of Orlando/Winter Park, National Association." The merged bank at date of merger had

COMPTROLLER'S DECISION
Barnett Bank of Orlando, Orlando, Fla. ("Orlando
Bank"); Barnett Bank of South Orlando, Orlando, Fla.
("South Orlando Bank"),- Barnett Bank of West Orlando, Orlando, Fla. ("West Orlando Bank"); Barnett
Mall Bank, National Association, Winter Park, Fla.
("Mall Bank") (collectively, "Merging Banks"); and
Barnett Bank of Winter Park, National Association, Winter Park, Fla. ("Charter Bank"), have applied to the
Comptroller of the Currency for prior permission to effectuate a merger under the charter of Barnett Bank of
Winter Park, National Association, and with the title of,
"Barnett Bank of Orlando/Winter Park, National association." The subject application rests upon an agreement executed between the proponent banks, incorporated herein by reference the same as if fully set
forth.
Orlando Bank, South Orlando Bank and West Orlando Bank are all state-chartered commercia! banking
institutions which, as of June 30, 1976, had total deposits of $9.2 million, $5.1 million and $8.3 million, respectively. Mall Bank and Charter Bank are both national banking associations. Chartered on September
28, 1971, as of June 30, 1976, Mall Bank had deposit
of $9.1 million. Charter Bank had deposits aggregating
$115.7 million as of the same date.
All five of the proponent banks are subsidiaries of
the second largest commercial banking organization in




In
operation

$ 11,296,000
7,006,000
9,796,000
10,142,000

1
1
1
2

137,518,000

To be
operated

2

175,758,000

7

Florida, Barnett Banks of Florida, Inc., Jacksonville,
Fla. Given the fact of common ownership and control
of these banks, there is no existing competition among
the banks, nor is there any potential for the development of increased competition, absent the termination
of their present affiliation.
This application must be considered essentially as a
corporate reorganization whereby Barnett Banks of
Florida, Inc., is realigning and consolidating its banking interests in the Orlando/Winter Park area in an attempt to improve the efficiency, effectiveness and
profitability of five of its subsidiary banks. Furthermore,
consummation of this proposal will be in accord with
recently enacted branching statutes for commercial
banks in the state of Florida.
Accordingly, it is the conclusion of this Office that
the banking public is well served by the end result of
the instant proposal and that the application should
be, and hereby is, approved. The merger may not be
consummated prior to January 1, 1977, the date that
the Florida branching statutes become effective.
November 30, 1976.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are all wholly-owned subsidiaries
of the same bank holding company. As such, their proposed merger is essentially a corporate reorganization
and would have no effect on competition.

57

CITY NATIONAL BANK OF MIAMI,
Miami, Fla., and City National Bank of Miami Beach, Miami Beach, Fla., and The City National Bank of Coral Gables,
Coral Gables, Fla., and City National Bank of North Miami, North Miami, Fla., and City National Bank of South Dade,
Unincorporated area of Dade County, Fla.
Banking offices
Names of banks and type of transaction

Total
assets'

The City National Bank of Coral Gables, Coral Gables, Fla.''(14792), with
and City National Bank of Miami Beach, Miami Beach, Fla. (15173), with
and City National Bank of North Miami, North Miami, Fla. (16530), with
and City National Bank of South Dade, Unincorporated area of Dade County, Fla. (16447)
with
were purchased Jan. 1, 1977, by City National Bank of Miami, Miami, Fla. (14718) which
had
After the purchase was effected, the receiving bank had

COMPTROLLER'S DECISION
City National Bank of Miami, Miami, Florida ("Purchasing Bank"), has applied to the Comptroller of the Currency for prior permission to purchase all of the assets
and assume all of the liabilities of The City National
Bank of Coral Gables, Coral Gables, Fla. ("Coral Gables Bank"); City National Bank of Miami Beach,
Miami Beach, Fla. ("Miami Beach Bank"); City National Bank of North Miami, North Miami, Fla. ("North
Miami Bank"); and, City National Bank of South Dade,
Unincorporated area of Dade County, Fla. ("South
Dade Bank") (collectively, "Selling Banks"). The instant application rests upon an agreement executed
between the proponent banks, incorporated herein by
reference, the same as if fully set forth.
Purchasing Bank, with total deposits of approximately $237 million as of March 31, 1976, serves as
the lead bank for the 16th largest commercial banking
organization domiciled in the state of Florida, City National Bank Corporation, Miami, Fla. As of December
31, 1975, City National Bank Corporation controlled
five subsidiary banks, Purchasing Bank and Selling
Banks, which had deposits aggregating $420.4 million.
Coral Gables Bank was chartered as a national
banking association on September 24, 1956, and as of
March 31, 1976, had total deposits of $41 million.
Miami Beach Bank was organized on August 15, 1963,
and as of March 31, 1976, held total deposits of
$112.6 million. Chartered on December 12, 1975,
North Miami Bank's deposits aggregated $8.3 million
* Asset figures are as of call dates immediately before and after
transaction.

58



.

To be
In
operation operated

$ 49,538,000
134,293,000
11,868,000

1
1
1

6,070,000

1

248,378,000
421,229,000

1
5

at the end of the first quarter of 1976. The smallest of
the subject banks, with deposits of approximately $3
million, South Dade Bank was chartered on April 2,
1975. In view of the affiliation and'Common ownership
and control existing among the proponent banks, there
is no meaningful existing competition nor any potential
for increased competition among these banks.
The subject application therefore must be considered essentially as a corporate reorganization whereby
City National Bank Corporation is realigning and consolidating its banking interests in an effort to improve
the efficiency, effectiveness and profitability of its operations. Also, consummation of this proposal will allow
the bank holding company's largest subsidiary to avail
itself of the applicable provisions of Florida's recently
enacted state branching statutes.
Accordingly, it is the conclusion of the Office of the
Comptroller of the Currency that this application is not
adverse to the public interest and that consummation
of the proposal will provide the banking public with a
financially sound, well-managed, convenient source of
full-service banking. The application is, hereby, approved, but may not be consummated prior to January
1, 1977, the effective date of the Florida branching
statutes.
November 11, 1976.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The banks involved are all wholly-owned subsidiaries
of the same bank holding company. As such, the proposed transactions are essentially corporate reorganizations and would have no effect on competition.

THE FIRST NATIONAL BANK OF HOMESTEAD,
Homestead, Fla., and First National Bank of Princeton-Naranja, Princeton-Naranja, Fla.
Banking offices
Names of banks and type of transaction

Total
assets

First National Bank of Princeton-Naranja, Princeton-Naranja, Fla. (15469), with
and The First National Bank of Homestead, Homestead, Fla. (13641), which had
merged Jan. 1, 1977, under charter and title of the latter bank (13641). The merged
bank at date of merger had

COMPTROLLER'S DECISION
First National Bank of Princeton-Naranja, PrincetonNaranja, Fla. ("Merging Bank") and The First National
Bank of Homestead, Homestead, Fla. ("Charter
Bank"), have applied to the Comptroller of the Currency for prior permission to effectuate a merger under
the charter and with the title of The First National Bank
of Homestead. The subject application rests upon an
agreement executed between the proponent banks,
which is incorporated herein by reference, the same
as if fully set forth.
Charter Bank was chartered as a national banking
association on October 24, 1932, and as of March 31,
1976, had commercial bank deposits aggregating
$39.6 million.
Merging Bank, which had total deposits of $4.8 million on March 31, 1976, was organized in 1965 at the
direction and under the guidance of Charter Bank's
senior management. Since the time of Merging Bank's
organization, a close working relationship has existed
between Merging Bank and Charter Bank; the same
individual is the chairman and president for both
banks. Additionally, the two banks have four directors
in common and the same group of shareholders own
the majority of the stock of each bank involved in this
proposal. Consequently, consummation of the proposed merger would not have the effect of eliminating

$ 5,050,000
44,086,000

In
To be
operation operated
•j

1
2

49,136,000

any meaningful degree of existing competition between Merging Bank and Charter Bank. Furthermore,
due to the existing affiliation between the two proponent banks, there does not appear to be any possibility for increased competition in the foreseeable future.
Consummation of this proposal should result in certain efficiencies, and increase profitability through certain economies of scale to be realized by the combined institution. Also, the banking public would be
served by a financially sound, well-managed source of
banking services.
Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that this proposal is not adverse to the public
interest and should be, and hereby is, approved. It is
further concluded that consummation of the instant
proposal will be in order with Florida's recently
enacted state branching statutes; the merger may not,
however, be consummated prior to January 1, 1977,
the date that the Florida branching statutes become
effective.
November 11, 1976.
SUMMARY OF REPORT BY ATTORNEY GENERAL
We have reviewed this proposed transaction and conclude that it would have no consequential adverse effects upon competition.

SUN BANK OF SEMORAN, NATIONAL ASSOCIATION,
Unincorporated area of Seminole County, Fla., and Sun Bank of Seminole, Altamonte Springs, Fla.
Banking offices
Names of banks and type of transaction

Total
assets *

Sun Bank of Seminole, Altamonte Springs, Fla., with
and Sun Bank of Semoran, National Association, Unincorporated area of Seminole County,
Fla. (16108), which had
merged Jan. 1, 1977, under charter of the latter bank (16108) and title "Sun Bank of
Seminole, National Association." The merged bank at date of merger had

COMPTROLLER'S DECISION
Sun Bank of Seminole, Altamonte Springs, Fla. ("Merging Bank"), and Sun Bank of Semoran, National Association, Unincorporated area of Seminole County, Fla.
("Charter Bank"), have applied to the Comptroller of
the Currency for prior permission to effectuate a
* Asset figures are as of call dates immediately before and after
transaction.



In
operation

To be
operated

$10,105,000
33,407,000
36,083,000

merger under the charter of Sun Bank of Semoran, National Association, and with the title of "Sun Bank of
Seminole, National Association." The instant application rests upon an agreement executed between the
proponent banks, which is incorporated herein by reference, the same as if fully set forth.
Merging Bank was organized de novo by Sun Banks
of Florida, Inc., Orlando, Fla and commenced business
on July 17, 1975 Sun Banks of Florida, Inc., the third
59

largest of 32 multi-bank holding companies operating
in the state of Florida, presently has 40 commercial
banking subsidiaries that control 6.2 percent of total
state deposits. As of March 31, 1976, Merging Bank
had deposits aggregating $5.8 million.
Charter Bank was also organized de novo by Sun
Banks of Florida, Inc., Orlando, Fla. and commenced
business as a national banking association on April 17,
1973. Like Merging Bank, Charter Bank is also
wholly-owned (except for directors' qualifying shares)
by the same bank holding company. Charter Bank, at
the end of the first operating quarter for 1976, had total
commercial bank deposits of $7.6 million. In view of
the affiliation and common ownership existing between
the two proponent banks, there is no existing competition nor any potential for increased competition between the two banks.
Essentially, the instant application represents a corporate reorganization whereby Sun Banks of Florida,

Inc., is realigning and consolidating its banking interests in an effort to improve the efficiency, effectiveness
and profitability of two of its banking subsidiaries. Also,
consummation of this proposal will be in order with
Florida's newly enacted branching statutes..
Accordingly, it is the conclusion of the Office of the
Comptroller of the Currency that this proposal is not
adverse to the public interest and should be, and
hereby is, approved. The merger may not be consummated prior to January 1, 1977, the date that the Florida branching statutes become effective.
October 26, 1976.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are both wholly-owned subsidiaries of the same bank holding company. As such,
their proposed merger is essentially a corporate reorganization and would have no effect on competition.

THE CITIZENS NATIONAL BANK,
Laurel, Md., and Belair National Bank, Bowie, Md.
Banking offices
Total
assets

Names of banks and type of transaction

Belair National Bank, Bowie, Md. (15285), with
and The Citizens National Bank, Laurel, Md. (4364), which had
consolidated Jan. 3, 1977, under charter and title of the latter bank (4364). The
consolidated bank at date of consolidation'had

COMPTROLLER'S DECISION
The Citizens National Bank, Laurel, Md. ("CNB"), the
charter bank, and Belair National Bank, Bowie, Md.
("Belair Bank"), the selling bank, have applied to the
Comptroller of the Currency for prior permission to effectuate a consolidation under the charter and with the
title of The Citizens National Bank. The instant application rests upon an agreement executed between the
proponent banks which is incorporated herein by reference, the same as if fully set forth.
CNB became a national banking association on July
11, 1890, and as of December 31, 1975, had total
commercial bank deposits of $65.8 million. The charter
bank operates 11 offices domiciled in northern Prince
Georges County, western Anne Arundel County, eastern Howard County and the extreme eastern portion of
Montgomery County.
Belair Bank was chartered as a national banking association on March 24, 1964, and at year-end 1975
controlled deposits aggregating $19.3 million. The
bank operates a total of four banking offices that serve
Bowie, Crofton and Mitchellville, Md.
Both the charter bank and the selling bank are subsidiaries of Mercantile Bankshares Corporation, Baltimore, Md. ("Mercantile"), the sixth largest banking institution operating in the state of Maryland, with ten
banking subsidiaries which have total deposits of $622

60



$22,366,000
73,637,000
94,936,000

In
operation

To be
operated

4
11
15

million, approximately 7.1 percent of the state's total
commercial bank deposits.
Although the geographic markets of the proponent
banks are nearly adjacent, competition between the
subject banks is virtually nonexistent because of their
common ownership and control. The subject application, therefore, essentially represents a corporate reorganization whereby Mercantile is realigning its banking
interests in an attempt to produce a more economically efficient operation.
Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that the subject proposal is not adverse to the
public interest and that consolidation of CNB and Belair Bank will improve the efficiency of the operations of
the banks and enhance their ability to provide better
banking services. The resulting bank will, thereby, become a more viable and effective competitor that will
better meet the convenience and needs of the banking
public. The application is, hereby, approved.
October 15, 1976.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The consolidating banks are both majority-owned subsidiaries of the same bank holding company. As such,
their proposed consolidation is essentially a corporate
reorganization and would have no effect on competition.

LANDMARK UNION TRUST BANK OF ST. PETERSBURG, NATIONAL ASSOCIATION,
St. Petersburg, Fla., and Landmark Bank of Clearwater, National Association, Clearwater, Fla., and Landmark Bank
of Seminole, National Association, Unincorporated area of Pinellas County, Fla., and Landmark Bank at Tyrone, St.
Petersburg, Fla., and Landmark Bank of Tarpon Springs, National Association, Tarpon Springs, Fla.
Banking offices
Names of banks and type of transaction

Total
assets

Landmark Bank of Clearwater, National Association, Clearwater, Fla. (15426), with
and Landmark Bank of Seminole, ational Association, Unincorporated area of Pinellas
County, Fla. (16036), with
and Landmark Bank at Tyrone, St. Petersburg, Fla., with
Landmark Bank of Tarpon Springs, National Association, Tarpon Springs, Fla. (16391), with
and Landmark Union Trust Bank of St. Petersburg, National Association, St. Petersburg,
Fla. (15507), which had
merged Jan. 3, 1977, under charter and title of the latter bank (15507). The merged bank
at date of merger had

COMPTROLLER'S DECISION
Landmark Bank of Clearwater, National Association,
Clearwater, Fla. ("Clearwater Bank"); Landmark Bank
of Seminole, National Association, Unincorporated
area of Pinellas County, Fla. ("Seminole Bank"); Landmark Bank at Tyrone, St. Petersburg, Fla. ("Tyrone
Bank"); Landmark Bank of Tarpon Springs, National
Association, Tarpon Springs, Fla. ("Tarpon Springs
Bank") (collectively, "Merging Banks"); and, Landmark
Union Trust Bank of St. Petersburg, National Association, St. Petersburg, Fla. ("Charter Bank"), have applied to the Comptroller of the Currency for prior permission to effectuate a merger under the charter and
with the title of Landmark Union Trust Bank of St. Petersburg, National Association. The instant application
rests upon an agreement executed between the proponent banks, incorporated herein by reference, the
same as if fully set forth.
Ciearwater Bank was chartered as a national banking association on November 12, 1964, and as of June
30, 1976, held total commercial bank deposits of $14.9
million. Seminole Bank, which as of the same date had
deposits of $12.1 million, was chartered on November
8, 1972. Tyrone Bank was organized as a statechartered institution in 1972 and currently has deposits
of approximately $10 million. Tarpon Springs Bank,
which has total deposits of $3 million, became a national bank on October 18, 1974. Charter Bank was
chartered on April 28, 1965, and now has deposits aggregating $201.7 million. All five of the proponent




In
operation

$ 18,273,000

1

14,916,000
12,183,000
6,215,000

1
1
1

290,239,000

To be
operated

1

340,193,000

5

banks are wholly-owned (except for directors' qualifying shares), banking subsidiaries of Landmark Banking Corporation of Florida, Fort Lauderdale, Fla., a
registered multi-bank holding company that, as of December 31, 1975, had 16 subsidiary banks with deposits of $953.5 million. In view of the affiliation and
common ownership and control existing among the
banks, there is no present competition nor any potential for increased competition.
The subject application essentially represents a corporate reorganization whereby Landmark Banking
Corporation of Florida is realigning and consolidating
its banking interests in an effort to improve the efficiency, effectiveness and profitability of five of its
banking subsidiaries. Additionally, consummation of
this proposal will be in order with Florida's newly
enacted state branching statutes.
Accordingly, it is the conclusion of the Office of the
Comptroller of the Currency that this proposal is not
adverse to the public interest and should be, and
hereby is, approved. The merger may not be consummated prior to January 1, 1977, the date that the Florida branching statutes become effective.
November 5, 1976.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are wholly-owned subsidiaries of
the same bank holding company. As such, their proposed merger is essentially a corporate reorganization
and would have no effect on competition.

61

FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION,
Ogden, Utah and First Security State Bank of Springville, Springville, Utah
Banking offices
Total
assets *

Names of banks and type of transaction

First Security State Bank of Springville, Springville, Utah, with
was purchased Jan. 31, 1977, by First Security Bank of Utah, National Association,
Ogden, Utah (2597), which had
After the purchase was effected, the receiving bank had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency requesting prior permission for First Security
Bank of Utah, National Association, Ogden, Utah
("Purchasing Bank"), to purchase the assets and assume the liabilities of First Security State Bank of
Springville, Springville, Utah ("Selling Bank"). The instant application rests upon an agreement executed
between the proponent banks which is incorporated
herein by reference, the same as if fully set forth.
Purchasing Bank was chartered as a national banking association on December 9, 1881. As of December
31, 1975, the subject bank held total commercial bank
deposits of $900.6 million and operated a total of 62
offices in 20 of 29 counties in the state.
Selling Bank was organized in 1971 by officers and
directors of First Security Corporation, Salt Lake City,
Utah, the largest registered multi-bank holding company in Utah. Selling Bank controls commercial bank
deposits aggregating $4.8 million at its only office in
Springville.
Applicable Utah state branching statutes provide
home office protection to banks in communities which
have populations of less than 100,000 persons. Thus,
state statutes prevented entry into Springville via ate
novo branching but made allowance for the formation
and establishment of a new banking institution in the
community. Also, state law prevents the sale, merger
or purchase of a newly organized bank by another

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

In
To be
operation operated

$6,619,000
1,125,970,000
1,190,374,000

59

60

bank for a period of 5 years from the time of establishment of the new bank.
Both Purchasing and Selling Banks are whollyowned subsidiaries of First Security Corporation. Inasmuch as Selling Bank has now been in operation for
the minimum required period of 5 years, the bank
holding company is desirous of consolidating its banking interests through the combination of the subject
banks. This application, therefore, essentially represents a corporate reorganization. In consideration of
their common ownership and control, there is no significant existing competition nor any potential for increased competition between Purchasing Bank and
Selling Bank. Likewise, consummation of this proposal
would not alter the share of deposits held in any relevant market by the parent bank holding company.
Approval of this proposal will increase the legal
lending limit of the surviving institution, and the
Springville banking public will benefit from the more
comprehensive services available from a larger, wellmanaged and financially sound bank.
Accordingly, applying the statutory criteria, it is the
conclusion of this Office that this application is not adverse to the public interest and should be, and hereby
is, approved.
December 14, 1976.
SUMMARY OF REPORT BY ATTORNEY GENERAL
Since both banks are subsidiaries of, and more than
98 percent owned by First Security Corporation, a
bank holding company, the proposed transaction is
simply a corporate reorganization and would have no
competitive effect.

SUN FIRST NATIONAL BANK OF DELRAY BEACH,
Delray Beach, Fla., and Sun Second National Bank of Delray Beach, Delray Beach, Fla.
Banking offices
Names of banks and type of transaction

Total
assets

Sun Second National Bank of Delray Beach, Delray Beach, Fla. (15787), with
and Sun First National Bank of Delray Beach, Delray Beach, Fla. (14556), which had
merged Feb. 1, 1977, under charter and title of the latter bank (14556). The merged
bank at date of merger had

COMPTROLLER'S DECISION
Sun Second National Bank of Delray Beach, Delray
Beach, Fla. ("Merging Bank"), was chartered as a na
62


$ 14,349,000
88,493,000
102,842,000

In
To be
operation operated
-j

2
q

tional banking association on February 27, 1970, and
as of December 31, 1975, controlled commercial bank
deposits aggregating $11.3 million at its sole office located in the community of Delray Beach.

Sun First National Bank of Delray Beach, Delray
Beach, Fla. ("Charter Bank"), became a national banking association on June 20, 1946, as of year-end 1975
had total deposits of $73.7 million. Charter Bank operates its main office and a remote facility in Delray
Beach.
The proponent banks are both wholly-owned (except for directors' qualifying shares) subsidiaries of
Sun Banks of Florida, Inc., Orlando, Fla., the state's
third largest banking organization, which has 40 banking subsidiaries throughout Florida that control 6.2 percent of the total deposits held by all commercial banks
in the state of Florida. In view of their affiliation, there is
neither significant existing competition nor potential for
increased competition between Merging Bank and
Charter Bank.
Essentially, this application represents a corporate
reorganization whereby Sun Banks of Florida, Inc., is
consolidating its banking interests in order to take ad-

vantage of Florida's newly enacted branching statutes
(to become effective January 1, 1977) which provide
for the establishment of two branches per calendar
year within the county in which the parent bank is located (in this instance Palm Beach County) and establish
branches by merger with other banks located within
the same county in which the parent bank is located.
Accordingly, applying the statutory criteria, it is the
opinion of this Office that the subject proposal is not
adverse to the public interest and should be, and
hereby is, approved.
September 17, 1976.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are both wholly-owned subsidiaries of the same bank holding company. As such,
their proposed merger is essentially a corporate reorganization and would have no effect on competition.

DEPOSIT NATIONAL BANK,
DuBois, Pa., and Farmers and Merchants Bank, St. Marys, Pa.
Total
assets

Names of banks and type of transaction

Farmers and Merchants Bank, St. Marys, Pa., with
and Deposit National Bank, DuBois, Pa. (5019), which had
merged Mar. 1, 1977, under charter and title of the latter bank (5019). The merged bank
at date of merger had

COMPTROLLER'S DECISION
Farmers and Merchants Bank, St. Marys, Pa. ("Merging Bank"), and Deposit National Bank, DuBois, Pa.
("DNB"), the charter bank, have made application to
the Comptroller of the Currency for prior permission to
effectuate a merger under the charter and title of Deposit National Bank. The subject application rests
upon an agreement executed between the proponent
banks, which is incorporated herein by reference, the
same as if fully set forth.
Merging Bank was organized in 1903 and now operates its main office in St. Marys and one branch in Kersey, approximately 7 miles southwest of St. Marys. As
of June 30, 1976, Merging Bank held total deposits of
$15.4 million.
DNB received its charter as a national banking association on September 30, 1895, and now has deposits
of $80.3 million. In addition to its main office in DuBois,
DNB operates four branches in Clearfield County,
three branch offices in Jefferson County and one
branch in Elk County. (DNB has also received approval from this Office for the establishment of an additional office in DuBois.)
The main offices of Merging Bank and DNB are approximately 33 miles apart; and the closest offices of
the two banks, Merging Bank's branch in Kersey and
DNB's Weedville office, are approximately 11 miles
apart. There are, however, offices of two other commercial banks in the area between the closest offices




$18,454,000
102,025,000
121,204,000

Banking offices
In
operation

To be
operated

2
8
10

of the merger proponents. It is, therefore, concluded
that existing competition between the proponent banks
is minimal.
Pursuant to applicable Pennsylvania branching statutes, both Merging Bank and DNB may legally establish de novo branches in the principal area served by
the other. However, given the current economic conditions (unemployment in the relevant market area is
markedly higher than both the national and state averages), the relatively sparse population and the mountainous topography (the preponderance of Elk County
is within the Allegheny National Forest) which tends to
severely inhibit the flow of trade and mobility of the
populace that might otherwise occur, de novo expansion by DNB into the immediate St. Marys area appears unlikely within the reasonably foreseeable future.
Merging Bank's only branch office was opened in
1903, the year that the bank was founded, and it appears that Merging Bank does not have either the inclination or the financial or managerial resources to be
considered a prospective de novo entrant into the
principal area served by DNB. It is, therefore, concluded that consummation of the subject proposal
would not eliminate any meaningful degree of either
existing or potential competition between the two proponent banks.
The proposed merger will expand the ability of the
combined institution to offer new and broader banking
services such as free checking accounts, increased
lending limits and expanded trust services. Further63

more, DNB will be in a position to provide for management succession at Merging Bank and the financial resources of DNB and Merging Bank, in combination,
will have the effect of providing the banking public with
a sound commercial banking institution better able to
adequately serve the needs of the banking public in
the future.
Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that this application is in the public interest and
should be, and hereby is, approved.
January 18, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The area which will be primarily affected by the proposed acquisition is Elk County in which both the
Bank's offices are located. Elk County (1970 population 37,770) is situated in the mountainous northcentral portion of the state. Manufacturing, particularly
the carbon and paper products industries, is its principal source of employment. Although unemployment in
the county is higher than national and state levels, the
county's economic prospects, according to information in the application, do not appear to be unfavorable.
Applicant's and Bank's main offices are 33 miles
apart. Their closest offices, however, both of which are
located in Elk County, are approximately 10 miles
apart (Applicant's office in Weedville [1970 population
1,500] and Bank's office in Kersey [1970 population

800]). There are no other banks located in the
sparsely-populated, mountainous area separating
these two offices. It therefore appears that there is
some degree of direct competition between Applicant
and Bank which the proposed acquisition will eliminate.
There are presently five banks operating a total of
nine offices in Elk County. The largest of these, The
Pennsylvania Bank & Trust Co., controls approximately
54 percent of the deposits held by banks located in
Elk County. Applicant controls less than 1 percent and
the three other banks operating in Elk County (including Bank) each control approximately 15 percent of
those deposits. Thus, while the proposed acquisition
would reduce the number of banking alternatives in Elk
County, it would not significantly affect banking concentration there.
Under Pennsylvania law Applicant could be permitted to establish additional branch offices in Elk County
and the potential, therefore, exists for an increase in
competition between Applicant and Bank. It does not
appear, however, that this potential is likely to be realized in the reasonably foreseeable future in light of the
area's economic prospects, and Applicant's failure to
achieve more than minimal penetration of the Elk
County market since it opened its branch office in
Weedville approximately 10 years ago.
We conclude that, overall, the proposed acquisition
is unlikely to have any significantly adverse effect upon
competition.

UNITED VIRGINIA BANK/SEABOARD NATIONAL,
Norfolk Va., and National Bank of Northampton, Nassawadox, Va.
Banking offices
Total
assets

Names of banks and type of transaction

National Bank of Northampton, Nassawadox, Va. (14544), with
and United Virginia Bank/Seaboard National, Norfolk, Va. (10194), which had
merged Mar. 3, 1977, under charter and title of the latter bank (10194). The merged
bank at date of merger had

COMPTROLLER'S DECISION
National Bank of Northampton, Nassawadox, Va.
("Merging Bank"), and United Virginia Bank/Seaboard
National, Norfolk, Va. ("UVB"), the charter bank, have
applied to the Comptroller of the Currency for prior
permission to effectuate a merger under the charter
and with the title of United Virginia Bank/Seaboard National. The subject application rests upon an agreement executed between the proponent banks, which is
incorporated herein by reference, the same as if fully
set forth.
Merging Bank received its charter as a national
bank on April 16, 1945, and as of September 30, 1976,
held commercial bank deposits aggregating $5.2 million. In addition to its main office in Nassawadox,
Merging Bank operates one newly opened branch in
Cheriton, also in Northampton County, Va.

64



$

6,113,000
366,190,000
372,303,000

In
operation

To be
operated

1
32
33

UVB, a wholly-owned banking subsidiary of
Virginia's largest bank holding company, United Virginia Bankshares Incorporated, Richmond, Va., was
chartered on May 13, 1912. As of September 30, 1976,
UVB's total deposits were $302.2 million. The charter
bank operates 30 offices in the Tidewater area of Virginia, four of which are located in Accomack County
on the Delmarva Peninsula.
This application has been protested by residents of
the Nassawadox area and by shareholders of the
Merging Bank ("Protestants"). Protestants assert certain irregularities in the results of the vote cast by
shareholders of Merging Bank in approving a motion
to merge with the charter bank.
Further, Protestants take exception to UVB's and its
parent bank holding company's reliance upon Section
3(a)(11) of the Securities Act of 1933 and Rule 147 of
the Securities and Exchange Commission's interpreta-

tions of Section 3(a)(11). As a third argument against
approval of this application, Protestants allege that approval of this application would result in certain anticompetitive effects and be in furtherance of a monopolistic position held by UVB within the relevant banking
market (approximated by the whole of Northampton
and Accomack counties). A review of the record, as
established, leads the Comptroller to conclude that
while Protestants' arguments against approval of the
subject application are not totally without substance,
the arguments, from a legal and/or statutory reference, are not so compelling as to dictate denial of
this application. Protestants' request that this application be denied is, therefore, rejected.
With respect to the relevant market, there are seven
commercial banks operating within the political boundaries of Accomack County, of which UVB is the third
largest. Also, the second, fourth and fifth largest banks
within the county are bank holding company subsidiaries. Four banks operate within Northampton
County where the largest bank, controlling approximately 35 percent of deposits within the county, is a
subsidiary of a bank holding company. Merging Bank
is the smallest of the commercial banks domiciled in
Northampton County, controlling approximately 12
percent of total deposits. The closest offices of UVB
and Merging Bank are approximately 9 miles apart.
Between those two offices is a branch of the largest
bank in Accomack County, Farmers & Merchants National Bank. It is therefore concluded that competition
between UVB and Merging Bank is ate minimus, and
approval of this proposal would have no adverse effect
upon existing competition.
Pursuant to applicable Virginia branching statutes,
UVB may not legally establish de novo branches within
Northampton County, although its parent bank holding
company could be permitted to establish a de novo
subsidiary within the county. As aforenoted, however,
there are three other bank holding companies with
subsidiary banks in Accomack County which could
also legally establish new banking subsidiaries in Northampton County. Therefore, there is virtually no likelihood that the proponent banks would become significant competitors within the foreseeable future.
Merging Bank has not been a party to any merger or
acquisition transaction during its existence. At present,
there is only one bank within the Merging Bank's service area that is able to offer full-service banking. Upon
consummation of the merger, Merging Bank's lending




limit would be significantly increased. Also, greater
capital would permit Merging Bank to increase its loan
production (Merging Bank's current loan to deposit ratio is less than 25 percent), thereby better serving the
local residents of the area. The introduction of new and
expanded banking services to the area will better
serve the banking public and lends additional weight
toward approval of the application.
Both UVB and Merging Bank are considered to be in
generally satisfactory financial condition and both
have adequate management. Merging Bank has operated in a conservative manner throughout its history;
the bank has, however, only one accomplished day-today banker, and many of the bank's directors take little
active part in the actual operations of the bank. Although, as stated above, management is adequate,
qualified personnel and management succession are
not available for the future. Those problems could be
solved by UVB and its parent with a minimum of difficulty. The future prospects of Merging Bank are therefore considered to be greatly enhanced through affiliation with UVB.
Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that this proposal is in the public interest and
should be, and hereby is, approved.
January 31, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The closest offices of the merging parties are approximately 9 miles apart. Between these offices there is a
branch of the largest bank in Accomack County,
Farmers & Merchants National Bank ($23 million total
deposits), an independent bank with 24 percent of Accomack County deposits.
Applicant derives 725 deposit accounts, amounting
to $1.7 million, from customers residing in Northampton County. These deposits constitute 0.67 percent of
Applicant's total deposits, and are equal to 4.2 percent
of total bank deposits held in Northampton County.
Under Virginia law Applicant cannot branch de novo
into Northampton County, but its parent bank holding
company could be permitted to establish a de novo
subsidiary there. However, there are three other bank
holding companies with subsidiaries in Accomack
County which could also be permitted to establish de
novo subsidiary banks in Northampton County.
In sum, the proposed merger will have a slightly adverse effect upon competition.

DOMINION NATIONAL BANK,
Fairfax County, Va. and Potomac Bank and Trust Company, Fairfax, Va.
Banking offices
Total
assets *

Names of banks and type of transaction

Potomac Bank and Trust Company, Fairfax, Va., with
and Dominion National Bank, Fairfax County, Va. (14904), which had
merged Mar. 4, 1977, under charter of the latter bank (14904) and title "Dominion
National Bank of Northern Virginia." The merged bank at date of merger had

COMPTROLLER'S DECISION
Potomac Bank and Trust Company, Fairfax, Va.
("PBTC"), the merging bank, and Dominion National
Bank, Vienna, Va. ("Dominion"), the charter bank, have
applied to the Comptroller of the Currency for prior
permission to effectuate a merger under the Charter of
Dominion National Bank and with the title "Dominion
National Bank of Northern Virginia." The subject application rests upon an agreement executed between the
proponent banks which is incorporated herein by reference, the same as if fully set forth.
PBTC was organized in 1959, and operates its main
office and one branch within the city.of Fairfax and one
office within the community of Centreville, in the western section of Fairfax County. As of March 31, 1976,
PBTC held commercial bank deposits aggregating
$31.4 million.
Dominion was chartered as a national banking association on June 30, 1960, and now has deposits of approximately $89 million. A wholly-owned subsidiary of
Dominion Bankshares Corporation, Roanoke, Va., the
fifth largest commercial banking organization in the
Commonwealth of Virginia, Dominion operates a total
of 18 banking offices (13 in Fairfax County, four in
Alexandria, and one in Falls Church).
The closest offices of PBTC and Dominion are approximately 5 miles apart and the main offices of the
two subject banks are 9 miles apart. In the areas intervening between the closest offices and the main offices, there are offices of competing banking institutions. Additionally, there are no offices of any other
subsidiary bank of Dominion Bankshares Corporation
within 50 miles of the proposed bank. There is negligible competition between the PBTC and Dominion; that
is, however, mitigated by the fact that all of the major
bank holding companies headquartered in Virginia are
represented in the relevant market, and further by the
very substantial daily commuting between portions of
Northern Virginia and the District of Columbia.
Pursuant to applicable state branching statutes, a
bank may branch within the town, city or county limits
of its principal office. Thus, both PBTC and Dominion
could be permitted to establish additional offices
within Fairfax County. (It is noted that Dominion has
received permission from this Office to establish an
additional office in Fairfax County which is not yet
open. It also has an application pending to establish
an additional branch in Alexandria.) The elimination of
that potential competition is deemed to be of little significance because of the local representation of other
large bank holding companies which are also capable
66



$ 35,043,000
75,354,000
110,397,000

In
To be
operation operated
3
19
22

of establishing branches in the area, and because of
the small shares of market deposits controlled by the
proponent banks.
PBTC is currently restricted in its ability to offer a full
range of services to the public because of its relatively
small size, the small number of offices it operates, and
a shortage of capital funds. As a result of this merger,
the existing customers of the merging bank will be
able to enjoy the benefits of the introduction of new
and expanded banking services, a resulting larger
lending limit and more conveniently located offices for
its present and new customers.
Additionally, the charter bank, in conjunction with its
bank holding company parent, appears to possess
both the financial and managerial resources necessary
to provide for PBTC's succession of management and
to augment the merging bank's capital resources,
thereby resulting in a well-managed and financially
sound banking institution better able to serve the
banking public in the future.
Accordingly, it is the conclusion of the Office of the
Comptroller of the Currency that this application is in
the public interest and should be and hereby is, approved.
January 31, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
Fairfax County, located within the Washington, D.C.
SMSA, is a suburban area with substantial local business and industrial activity. Its population is growing
steadily (population increased from 455,000 in 1970 to
an estimated 537,000 in 1975) and its economic prospects appear to be very favorable. Indeed, according
to the Application (p. 35), "Banking concerns, including Dominion Bankshares, view Fairfax County as the
premier banking market within the Northern Virginia
area" (emphasis in original).
It is in this banking market that Applicant and Bank
compete. As noted above, both Applicant and Bank
have offices located within Fairfax County (two of
Bank's offices are located in the City of Fairfax which is
situated in the heart of Fairfax County) and their closest offices are about 5 miles apart. Applicant derives
about $73 million in deposits from within the county
market and thus directly competes with Bank for deposits. Thus, the proposed acquisition would eliminate
a fair amount of existing competition.
The four largest banking institutions in the market
controlled more than 60 percent of the county's deposits as of June 30, 1975. Applicant, the fourth
largest banking organization in the county, controlled,

as of that date, $73 million or approximately 8 percent
of county deposits. Bank, the seventh largest bank in
the county, controlled, as of the same date, $27 million, or approximately 3 percent of county deposits. If
the proposed acquisition is consummated, Applicant
would remain the fourth largest banking organization in
the county, controlling approximately 11 percent of
county deposits, and concentration among the top four
banking organizations in the county would be increased from 60 to 63 percent.
Under Virginia law a bank may branch within the
town, city or county limits of its principal office. Thus,
both Applicant and Bank could be permitted to estab-

lish additional branches in Fairfax County. Applicant
appears to possess the resources necessary to establish additional branch offices in the county. Furthermore, the rapid growth of the county and the projected
continuation of the high growth rate indicates that it is
economically feasible to establish branch offices.
In sum, the proposed acquisition will eliminate direct
competition, will increase concentration in Fairfax
County, and will eliminate the potential for increased
competition. We conclude that, overall, the proposed
acquisition would have an adverse effect on competition.

PEOPLES NATIONAL BANK OF WASHINGTON,
Seattle, Wash., and Bank of Yakima, Yakima, Wash.
Banking offices
Names of banks and type of transaction

Total
assets *

Bank of Yakima, Yakima, Wash., with
was purchased Mar. 24, 1977, by Peoples National Bank of Washington, Seattle, Wash.
(14394), which had
After the purchase was effected, the receiving bank had

COMPTROLLER'S DECISION
Peoples National Bank of Washington, Seattle, Wash.
("PNB"), the purchasing bank, has applied to the
Comptroller of the Currency for prior permission to purchase the assets and assume the liabilities of Bank of
Yakima, Yakima, Wash. ("Selling Bank"). The subject
application rests upon an agreement executed between the proponent banks which is incorporated
herein by reference, the same as if fully set forth.
PNB received its charter as a national banking association on October 30, 1937, and now ranks as the
fourth largest commercial bank headquartered in the
state of Washington. As of June 30, 1976, PNB had
total deposits of $706 million and operated 62
branches, 50 of which are located west of the Cascade Mountains. The remaining 12 branches are located within the Columbia Basin in east-central
Washington.
Selling Bank, the 12th largest commercial bank in
Washington commenced operations in 1960. With midyear 1976 deposits of $82.4 million, Selling Bank operates 11 branches, eight of which are in the city of
Yakima and one each in Ellensburg, Proseer and Sunnyside. Bank of Yakima also has approved applications for the establishment of two branches within the
city of Yakima and a pending application for an additional branch, also to be located within the city.
The main offices of PNB and Selling Bank are approximately 140 miles apart, and the banks do not appear to compete in the other's respective market area.
The two closest offices of the proponent banks are
* Asset figures are as of call dates immediately before and after
transaction.




In
To be
operation operated

$94,711,000

15

930,147,000
1,031,199,000

64

79

more than 40 miles apart, and serve entirely different
service areas. Due to applicable Washington state restrictive branching statutes, there is little likelihood that
future competition will develop between PNB and Selling Bank. Thus, the proposal does not appear to
present any adverse competitive consequences.
PNB provides a full range of commercial banking
services to its customers, including complete foreign
service and trust activities. Selling Bank provides standard commercial banking services to the communities
it serves, including limited trust services. The additional capabilities of PNB would substantially expand
the banking services available to Selling Bank's
customers in the areas of foreign and international
business, investments, trust services and specialized
computer services. A number of the proposed new
and expanded banking services acquire additional importance in relation to the agriculturally rich Yakima
Valley region; those services should prove to be of significant benefit to both personal and corporate accounts of the region. Accordingly, considerations of
convenience and needs add weight to approval of this
application.
The financial and managerial resources of both PNB
and Selling Bank are regarded as satisfactory. The
Comptroller's decision on this application takes into
consideration the progress PNB has made toward improving its capital adequacy, and the decision
reached herein incorporates PNB's commitments and
plans to continue to augment its capital position.
Applying the statutory criteria, it is the conclusion of
the Office of the Comptroller of the Currency that this
application is not adverse to the public interest and
should be, and hereby is, approved.
February 16, 1977.

67

SUMMARY OF REPORT BY ATTORNEY GENERAL
The majority of Bank's offices (nine out of 12) are located in the city of Yakima in Yakima County. Applicant
presently operates no offices in that area and the
^closest offices of the respective banks are more than
40 miles apart. Thus, there is little if any existing competition between Applicant and Bank that would be
foreclosed by virtue of the proposed acquisition.
Washington permits branching outside of a home
county only in unbanked, unincorporated areas. The
market that would be primarily affected by the proposed acquisition is Yakima which is neither unbanked
nor unincorporated. Therefore, Applicant could enter
the market only through acquisition. However, the instant transaction cannot be characterized as a toehold
acquisition inasmuch as Bank ranks fifth in Yakima

County in terms of deposits with 17 percent of total
commercial deposits. The proposed acquisition, thus,
is much more objectionable than would have been the
case had Applicant entered the Yakima area through
the acquisition of a much smaller bank.
Applicant would increase its share of total state deposits from 7.4 to 8.3 percent as a result of the proposed acquisition. Nevertheless, given Seattle-First
National Bank's 34.5 percent share of the state's total
commercial deposits (as of December 31, 1975), an
0.87 percent increase in statewide concentration is not
substantial.
In sum, the proposed acquisition would not eliminate
existing competition and would only slightly increase
statewide concentration. It would, nonetheless, have
some adverse competitive effect because of the "nontoehold" character of the acquired bank.

METROPOLITAN NATIONAL BANK,
Rjchmond, Va., and Second National Bank of Richmond, Richmond, Va.
Banking offices
Total
assets

Names of banks and type of transaction

Second National Bank of Richmond, Richmond, Va. (15567), with
and Metropolitan National Bank, Richmond, Va. (15530), which had
merged Mar. 25, 1977, under charter of the latter bank (15530) and title "Dominion
National Bank of Richmond." The merged bank at date of merger had

COMPTROLLER'S DECISION
Second National Bank of Richmond, Richmond, Va.
("SNB"), the merging bank, and Metropolitan National
Bank, Richmond, Va. ("Charter Bank"), have applied
to the Comptroller of the Currency for prior permission
to effectuate a merger under the charter of Metropolitan National Bank, and with the title of "Dominion National Bank of Richmond." This application rests upon
an agreement executed between the proponent banks
which is incorporated herein by reference, the same
as if fully set forth.
Charter Bank received its charter as a national banking association on July 8, 1965, and as of June 30,
1976, held commercial bank deposits aggregating
$60.9 million. A wholly-owned subsidiary of the fifth
largest banking organization headquartered within the
Commonwealth of Virginia, Dominion Bankshares Corporation, Roanoke, Va. ("Dominion"), Charter Bank
currently operates eight offices (two within the city of
Richmond, five in Henrico County and one in Chesterfield County).
SNB became a national bank on January 6, 1966,
and as of mid-year 1976 held total deposits of $34.4
million. SNB operates from one branch in Henrico
County and three offices in the city of Richmond.
The closest offices of Charter Bank and SNB are
across the street from each other in South Richmond.
The area in which those two branches are located is
very active commercially, however, and a number of
other large Richmond-based banks operate branches
in close proximity. Additionally, if this application is ap68



$ 35,043,000
75,354,000
110,397,000

In
To be
operation operated
4
8
12

proved, Charter Bank has indicated that it will relocate
its South Richmond office to another commercially active site and, thereby, better serve another segment of
the banking public. In sum, it appears that approval of
the subject proposal would eliminate a smali degree of
existing competition between Charter Bank and SNB;
but the effect will not be substantially adverse.
Pursuant to applicable Virginia branch banking statutes, a bank may branch within the town, city or county
limits of its principal office. Thus, both Charter Bank
and SNB could legally be permitted to establish additional offices within the Richmond banking market (approximated by the city of Richmond and the whole of
both Henrico and Chesterfield counties). Inasmuch as
there are several banking alternatives conveniently
available to the public, the foreclosure of any potential
competition between the proponent banks is not considered to be significant.
The banking public should benefit by approval of
this application through the introduction of new and
expanded banking services, a larger lending limit, additional convenient banking offices and specialized expertise. Considerations relating to convenience and
needs are, therefore, regarded as being consistent
with approval.
The financial condition of Charter Bank is considered to be satisfactory. SNB has a poor earnings performance and the quality of some of its assets are
poor. Additionally, SNB is in need of competent and
capable managerial direction and, as a subsidiary of
Dominion, the combined strength of bank management, financial resources and Dominion's willingness

and ability to serve the needs of both the banking public and its subsidiary banks (Dominion has committed
to augment the capital of the surviving bank) greatly
enhance the favorable future prospects of the combined institution.
Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that this application is not adverse to the public
interest and should be, and hereby is, approved.
February 9, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The city of Richmond is Virginia's manufacturing and
financial center. Although the city of Richmond's population is declining, the population of the entire Richmond metropolitan area is increasing. The economy of
the Richmond metropolitan area is well diversified and,
according to the application, its economic prospects
are favorable.
The closest offices of Applicant and Bank are across
the street from each other in South Richmond. The
South Richmond branch offices of Applicant and Bank
produce 6 and 8.4 percent of the total deposits of
each institution, respectively. Applicant operates a total of seven offices, and Bank operates four in the
Richmond city/Henrico County market area. It thus appears that the proposed acquisition will eliminate existing competition between Applicant and Bank.
As noted, it appears that the area of effective competition between Applicant and Bank is an area con-

sisting of the city of Richmond and Henrico County. As
of June 30, 1975, 14 banking organizations operated
in that area. Applicant, the sixth largest banking organization operating there, held, as of that date, total
deposits of $53.8 million, or 2.54 percent of the area's
deposits (Applicant's Chesterfield County office held
total deposits of approximately $7 million). Bank, the
ninth largest of the 14 banking organizations operating
in that area, held, as of the same date, total deposits of
$34.4 million, or 1.57 percent of the area's deposits.
Commercial banking is highly concentrated in the area
in which Applicant and Bank compete. The four largest
banks operating in the city of Richmond /Henrico
County area control 83.1 percent of that area's deposits. The proposed acquisition would not, however,
significantly increase concentration. If the proposed
acquisition is consummated, Applicant would remain
the sixth largest banking organization in the area, controlling only 4.2 percent of area deposits.
Under Virginia law, a bank may branch within the
town, city, or county limits of its principal office. Thus,
both Applicant and Bank could be permitted to establish additional branches in the Richmond area. The
proposed acquisition eliminates this potential for increased competition between Applicant and Bank.
In sum, the proposed acquisition will eliminate some
direct competition, will slightly increase concentration
in the Richmond/Henrico County area, and will eliminate the potential for increased competition. We conclude that, overall, the proposed acquisition would
have some adverse effect on competition.

AMERICAN NATIONAL BANK AND TRUST COMPANY OF FORT LAUDERDALE,
Fort Lauderdale, Fla., and Sunrise American National Bank of Fort Lauderdale, Fort Lauderdale, Fla., and Southport
American National Bank of Fort Lauderdale, Fort Lauderdale, Fla.
Banking offices
Total
assets

Names of banks and type of transaction

Sunrise American National Bank of Fort Lauderdale, Fort Lauderdale, Fla. (15191), with
and Southport American National Bank of Fort Lauderdale, Fort Lauderdale, Fla. (16064),
with
and American National Bank and Trust Company of Fort Lauderdale, Fort Lauderdale, Fla.
(14741), which had
merged Mar. 31, 1977, under charter and title of the latter bank (14741). The merged
bank at date of merger had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency for prior permission to merge Sunrise American National Bank of Fort Lauderdale, Fort Lauderdale, Fla. ("Sunrise Bank"), and Southport American
National Bank of Fort Lauderdale, Fort Lauderdale, Fla.
("Southport National") (collectively, "Merging Banks"),
into American National Bank and Trust Company of
Fort Lauderdale, Fort Lauderdale, Fla. ("Charter
Bank") under the charter and title of American National
Bank and Trust Company of Fort Lauderdale, Fort
Lauderdale, Fla. The subject application rests upon an
agreement executed between the proponent banks




In
To be
operation operated

$ 35,297,000
22,032,000
103,414,000
161,524,000

which is incorporated herein by reference, the same
as if fully set forth.
Sunrise Bank was chartered as a national banking
association on October 18, 1963, and as of August 31,
1976, had total commercial bank deposits of $30.7 million.
With August 31, 1976 deposits aggregating approximately $15.5 million, Southport National is the smallest
of the three proponent banks.
Charter Bank received its charter on May 19, 1955,
and now has deposits of $77.6 million.
All three banks are wholly-owned banking subsidiaries of the 12th largest banking organization headquartered in Florida, First Bancshares of Florida, Inc.,

69

Boca Raton, Fla. The subject proposal is, therefore, regarded as a corporate reorganization and, as such,
would have no adverse effect upon competition within
the Fort Lauderdale banking market.
The proposed merger should enhance the surviving
bank's ability to better serve the banking needs of the
public. The lending capacity of Sunrise Bank and
Southport National as branches of Charter Bank will be
greatly increased in comparison to their present individual capacities. Additionally, the merger will allow
the new branches of Charter Bank to offer trust services and specialized commercial, installment and
mortgage lending. Convenience and needs considerations are, therefore, considered to be consistent with
approval.
The managerial resources of the Merging Banks and
Charter Bank are regarded as generally satisfactory.
The financial resources of Charter Bank are regarded
as satisfactory while the financial resources of the

*

Merging Banks are considered to be in less than satisfactory condition. Approval of this proposal would
have the effect of combining the financial resources of
the three banks and certain efficiencies and economies of scale through a consolidated operation should
favorably impact upon the overall condition of the surviving association; thereby increasing the favorable future prospects of the Charter Bank.
Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that this application is in the public interest, and
should be, and hereby is, approved.
February 28, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are wholly-owned subsidiaries of
the same bank holding company. As such, their proposed merger is essentially a corporate reorganization
and would have no effect on competition.
*

*

CENTRAL BANK, NATIONAL ASSOCIATION,
Oakland, Calif., and Peninsula National Bank, Burlingame, Calif.
Banking offices
Names of banks and type of transaction

Total
assets *

Peninsula National Bank, Burlingame, Calif. (15310), with
was purchased Mar. 31, 1977, by Central Bank, National Association, Oakland, Calif.
(6919), which had
After the purchase was effected, the receiving bank had

COMPTROLLER'S DECISION
Central Bank, National Association, Oakland, Calif.
("Assuming Bank"), has made application to the
Comptroller of the Currency for prior permission to purchase the assets and assume the liabilities of Peninsula National Bank, Burlingame, Calif. ("Selling Bank").
The subject application rests upon an agreement executed between the proponent banks which is incorporated herein by reference, the same as if fully set
forth.
A wholly-owned subsidiary of Central Banking Systems, Inc., Oakland, Calif. ("CBS"), a registered multibank holding company, Assuming Bank received its
charter as a national banking association on August
11, 1903, and as of September 30, 1976, held total
commercial bank deposits of $372.2 million. In addition to its main office in the city of Oakland, Assuming
Bank operates 35 branch offices located throughout
the Central Valley and San Francisco-Oakland metropolitan area of California.
Selling Bank was organized in December 1963 and,
as of September 30, 1976, had deposits aggregating
approximately $20 million. Selling Bank operates only
one office in addition to its main office; a branch in San
Mateo.
* Asset figures are as of call dates immediately before and after
transaction.

70




In
To be
operation operated

19,980,000

2

444,317,000
467,738,000

33
35

Although Selling Bank's branch in San Mateo is only
1 mile northwest of Assuming Bank's El Camino office,
the proximity of those two offices does not present the
level of competition which might be indicated by such
a short distance because of the distinct and isolated
nature of the area serviced by Selling Bank's branch
office. That isolation is created by awkward street patterns and barriers provided by railroad tracks, land
rights of way and a flood control channel. The only
practical route between the offices entails entering and
leaving a freeway with difficult access at both ends.
Additionally, Selling Bank's main office is located
slightly less than 4 miles from a branch of Assuming
Bank; there are, however, several alternative intervening banking facilities. It is, therefore, concluded that
existing competition between the proponent banks is
minimal and, as further outlined herein below, it is seriously questionable as to how effective Selling Bank
competes within its intensely competitive market area.
From 1969 until 1974, Selling Bank was owned by
CBS, then the holding company sold its interest in Selling Bank to a private investor. Under the ownership
and control of that investor, Selling Bank suffered from
a distinct lack of qualified and competent senior management. Also, as a result of the investor's default on
the purchase of Selling Bank, Pacific Atlantic Bank
Inc., of the Republic of Panama ("Pacific"), as a guarantor of Selling Bank's major stockholder's loan, suc-

ceeeded to the stockholder's 78 percent interest in
Peninsula National Bank. As a consequence of the default, 20 percent of Selling Bank's stock was not transferred from CBS to the stockholder and CBS has continued to retain that interest in Selling Bank. Furthermore, the bank was the victim of imprudent and unsound loans and investments initiated by its major
stockholder. As a result of numerous bad loans, almost
all of which have been written off as a total loss, Selling
Bank's present capital resources have declined to a
position which is of serious concern to the Office of the
Comptroller of the Currency. It is readily obvious from
an analysis of the latest financial data available for
Selling Bank, that this bank is no longer a viable competitor in its market and, absent a sizeable contribution
to Selling Bank's capital accounts within the very near
future, the ability of Selling Bank to continue to survive
is highly questionable and very much in doubt. In light
of Selling Bank's deteriorating financial condition, its
lack of qualified management and the fact that Pacific
does not possess the capacity and/or willingness to
provide additional capital for Selling Bank or to operate a banking institution located thousands of miles
from its own base of operation, Pacific has chosen to
terminate its interest in Selling Bank.
Approval of the subject proposal would have the effect of replacing a weak and ineffectual banking alternative with a more viable bank that proposes to offer

the banking public a substantially larger legal lending
limit, bank credit card accounts, auto leasing, international department services and estate loans, and additional new and expended banking services, as well as
a large branch banking system throughout Northern
California. Considerations relating to convenience and
needs are, therefore, deemed to add additional weight
toward approval of this application.
As previously noted, Selling Bank has suffered from
a lack of managerial direction through the loss of competent and capable bankers. At present, Selling Bank
is operating with senior officers supplied by CBS. Approval of this proposal would alleviate Selling Bank's
managerial problems, and Assuming Bank's financial
resources are judged to be of sufficient proportion to
assure the favorable future prospects of the surviving
institution.
Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that this application is in the public interest and
should be, and hereby is, approved.
March 1, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
We have reviewed this proposed transaction and conclude that it would not have a substantial competitive
impact.

THE FIRST NATIONAL BANK OF MARYLAND,
Baltimore, Md., and The Hancock Bank, Hancock, Md.
Banking offices
Total
assets

Names of banks and type of transaction

The Hancock Bank, Hancock, Md., with
and The First National Bank of Maryland, Baltimore, Md. (1413), which had
merged Mar. 31, 1977, under charter and title of the latter bank (1413). The merged bank
at date of merger had

COMPTROLLER'S DECISION
The Hancock Bank, Hancock, Md. ("Merging Bank"),
and The First National Bank of Maryland, Baltimore,
Md. ("Charter Bank"), have applied to the Comptroller
of the Currency for prior permission to effectuate a
merger under the charter and title of The First National
Bank of Maryland, Baltimore, Md. The subject application rests upon an agreement executed between the
two banks which is incorporated herein by reference,
the same as if fully set forth.
Charter Bank, a wholly-owned banking subsidiary of
the third largest banking organization headquartered
in Maryland, First Maryland Bancorp, Baltimore, Md.,
received its charter as a national banking association
on July 10, 1865. As of June 30, 1976, Charter Bank
had total commercial bank deposits of approximately
$951 million and, in addition to its main office in Baltimore, Charter Bank operates 74 branch offices
throughout the state.




$

11,926,000
1,377,375,000
1,389,301,000

In
To be
operation operated

1
140
141

Merging Bank, a unit bank, was established in 1896
as a state-chartered banking institution and, as of midyear 1976, had total deposits of $10.3 million. Merging
Bank's sole office is located only 0.5 miles north of the
West Virginia-Maryland border, and 1 mile south of the
Pennsylvania-Maryland border.
On December 29, 1976, the Board of Governors of
the Federal Reserve System approved an application
submitted by First Maryland Bancorp to acquire 51
percent of the outstanding voting shares of Merging
Bank. Thus, there is no meaningful competition existent between Merging Bank and any of Charter Bank's
branches, the nearest of which is approximately 27
miles east of Hancock, in Hagerstown, Md. The subject application is, therefore, regarded essentially as a
corporate reorganization, and serves as the vehicle for
the acquisition of the minority interest of Merging Bank.
The financial and managerial resources of First
Maryland Bancorp, its subsidiaries and Merging Bank

71

are satisfactory, and their individual and combined future prospects appear favorable.
With regard to the convenience and needs of the
community to be served, Merging Bank's affiliation
with Charter Bank and its corporate parent will result in
new and expanded banking services being offered in
the Hancock banking market; these services include a
larger legal lending limit, trust services, individual retirement accounts and credit card services (all of
which are currently unavailable from Hancock area
banks).

Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that this application is not adverse to the public
interest and should be, and hereby is, approved.
February 25, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging
sidiaries of the
their proposed
ganization and

banks are both wholly-owned subsame bank holding company. As such,
merger is essentially a corporate reorwould have no effect on competition.

FLAGSHIP BANK OF ST. PETERSBURG, N.A.,
St. Petersburg, Fla., and Flagship Bank North of St. Petersburg, N.A., St. Petersburg, Fla., and Flagship Bank
South, St. Petersburg, St. Petersburg, Fla.
Banking offices
Total
assets

Names of banks and type of transaction

Flagship Bank North of St. Petersburg, N.A., St. Petersburg, Fla. (15905), with
and Flagship Bank South, St. Petersburg, St. Petersburg, Fla., with
and Flagship Bank of St. Petersburg, N.A., St. Petersburg, Fla. (15281), which had
merged Apr. 1, 1977, under charter and title of the latter bank (15281). The merged
bank at date of merger had

COMPTROLLER'S DECISION
Flagship Bank North of St. Petersburg, N.A., St. Petersburg, Fla. ("North Bank"), Flagship Bank South, St. Petersburg, St. Petersburg, Fla. ("South Bank") (collectively, "Merging Banks"), and Flagship Bank of St. Petersburg, N.A., St. Petersburg, Fla. ("Charter Bank"),
have applied to the Comptroller of the Currency for
prior permission to merge under the charter and title of
Flagship Bank of St. Petersburg, N.A., St. Petersburg,
Fla.
North Bank received its charter as a national banking association on October 8, 1971, and as of June 30,
1976, had commercial bank deposits aggregating
$15.6 million.
South Bank is a state-chartered banking institution,
organized in 1972, and as of mid-year 1976, had total
deposits of $11.4 million.
Charter Bank was organized on September 27,
1963, and now has total deposits of $45.2 million.
All three of the proponent banks are wholly-owned

72



$19,154,000
13,640,000
53,102,000
85,896,000

In
To be
operation operated
1
1
2
4

subsidiaries of the fourth largest bank holding company in Florida, Flagship Banks, Inc., Miami Beach,
Fla. Accordingly, there is no existing competition
among Merging Banks and/or Charter Bank; and approval of this proposal, essentially a corporate reorganization, would have no adverse effect upon either existing or potential competition.
Applying the statutory criteria, it is the conclusion of
the Office of the Comptroller of the Currency that this
application presents no feature adverse to the public
interest and the application should be, and hereby is,
approved.
February 14, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are wholly-owned subsidiaries of
the same bank holding company. As such, their proposed merger is essentially a corporate reorganization
and would have no effect on competition.

THE NATIONAL BANK OF WASHINGTON,
Washington, Iowa, and Ainsworth State Bank, Ainsworth, Iowa
Banking offices
Names of banks and type of transaction

Total
assets

Ainsworth State Bank, Ainsworth, Iowa, with
and The National Bank of Washington, Washington, Iowa (13849), which had
merged Apr. 1, 1977, under charter and title of the latter bank (13849). The merged bank
at date of merger had

COMPTROLLER'S DECISION
Ainsworth State Bank, Ainsworth, Iowa ("Merging
Bank"), and The National Bank of Washington, Washington, Iowa ("Charter Bank"), have applied to the
Comptroller of the Currency for prior permission to effectuate a merger under the charter and title of The
National Bank of Washington. The subject application
rests upon an agreement executed between the proponent banks which is incorporated herein by reference, the same as if fully set forth.
Merging Bank was organized in 1945 and currently
operates as a unit banking institution with headquarters in Ainsworth, Iowa, in the southeastern quadrant of
Iowa. As of November 1, 1976, Merging Bank held total deposits of $7.4 million.
Charter Bank received its charter as a national banking association on November 29, 1933, and as of
March 15, 1976, had deposits aggregating $16.3 million. Charter Bank has no branch operations.
Both Charter Bank and Merging Bank are domiciled
within Washington County (the approximate relevant
banking market) and are approximately 7 miles apart.
There are no banks within the intervening area. Within
the relevant market, there are ten commercial banking
organizations. Charter Bank ranks as the second
largest bank, controlling approximately 17 percent of
market deposits; and Merging Bank is the sixth largest
with slightly in excess of 7 percent of the area's total
deposits. If this proposal is approved, the resulting
bank would become the largest bank and control approximately 1 percent more in deposits than does the
present largest bank, Washington State Bank. It, therefore, appears that some degree of existing competition
between Charter Bank and Merging Bank would be
eliminated via approval of this proposal. This factor is
highly mitigated however, by the fact that a group of
four individuals own and control both of the proponent
banks. It is thus conjectural as to the degree of actual
competition that exists between the banks.
Pursuant to applicable Iowa branching statutes,
both Charter Bank and Merging Bank could legally establish de novo offices within Washington County and
the six surrounding counties, except in communities
where a commercial bank already operates. The potential for increased competition between Charter
Bank and Merging Bank via de novo branching is considered remote, however, because of the market's
overbanked status and Iowa's restrictive branching




In
To be
operation operated

$ 8,017,000
21,588,000

1
1

29,286,000

—

laws. The proposed merger would not have the effect
of foreclosing significant future competition.
The relevant area within which Charter Bank and
Merging Bank operate is primarily oriented toward
agriculture. Operating expenses and capital requirements for building and machinery, along with a rapid
increase in land costs, have all contributed to a real
need for a commercial bank of sufficient size to meet
the needs of the local banking public. The introduction
of both new and expanded banking services should
better serve the public, and those residents wno commute between Washington and Ainsworth will be able
to enjoy an added convenience of doing business with
their local bank in two locations. Also, proposed expansion and improvements of the physical facility in
Washington will result in additional convenience to
customers.
The resulting bank will be better able to utilize management personnel and officers of the two proponent
banks and will be of sufficient size to attract additional
qualified personnel. Both banks are considered to be
in generally satisfactory overall condition and, although Merging Bank has not been without some
operating difficulties in the past, the bank's new management and ownership has made noteworthy
progress in solving those problems. The future prospects of both banks appear favorable.
Accordingly, applying the statutory criteria it is the
conclusion of the Office of the Comptroller of the Currency that this application is in the public interest and
should be, and hereby is, approved.
February 1, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
Both Applicant and Bank are located approximately 7
miles from each other in Washington County (population 19,000) in the southeast section of Iowa. There are
no banks in the intervening area. Hence, it appears
that the proposed acquisition will eliminate existing
competition.
The proposed merger would also significantly increase existing banking concentration in Washington
County. The four largest of the ten banks currently
operating in Washington County presently control 70
percent of county deposits: the largest controls 23 percent, Applicant, the second largest controls 17 percent and the third and fourth each control 15 percent.
Bank is the sixth largest bank in the county, controlling

73

7 percent of county deposits. If the proposed merger
is consummated, Applicant would become the largest
bank in the county with 24 percent of county deposits
and the concentration ratio among the top four banks
would increase from 70 to 11 percent.
We conclude that, overall, the proposed merger
would have an adverse effect upon competition.*

* It is claimed in the application that the proposed merger would not
adversely affect competition because the same group of four individuals owns virtually all of the stock of both Applicant and Bank.
The application also indicates that Bank was an independent institution until May of this year when the group purchased its stock. Accordingly, we submit that in assessing the competitive effect of the
proposed merger, the Comptroller should' disregard the recent acquisition of Bank's stock by the owners of Applicant.

SOUTHERN NATIONAL BANK OF NORTH CAROLINA,
Lumberton, N.C., and Lafayette Bank & Trust Company, Fayetteville, N.C.
Banking offices
Names of banks and type of transaction

Total
assets

Lafayette Bank & Trust Company, Fayetteville, N.C, with
and Southern National Bank of North Carolina, Lumberton, N.C. (10610), which had
merged Apr. 1, 1977, under charter and title of the latter bank (10610). The merged bank
at date of merger had

COMPTROLLER'S DECISION
Lafayette Bank & Trust Company, Fayetteville, N.C.
("Merging Bank"), and Southern National Bank of
North Carolina, Lumberton, N.C. ("SNB"), the Charter
Bank, have made application to the Comptroller of the
Currency for prior permission to effectuate a merger
under the charter and title of Southern National Bank of
North Carolina. The subject application rests upon an
agreement executed between the proponent banks
which is incorporated herein by reference, the same
as if fully set forth.
Merging Bank was organized in 1973 and commenced operations in January 1974. As of December
31, 1976, Merging Bank held total deposits of $7.9 million. In addition to its main office in the city of Fayetteville, Merging Bank also operates two branch offices in
the Fayetteville area.
SNB received its charter as a national banking association on September 8, 1914, and as of December 31,
1976, the Charter Bank's commercial bank deposits
aggregated $338.5 million. A wholly-owned subsidiary
of Southern National Corporation, Lumberton, N.C,
SNB ranks as the state's eighth largest banking organization and operates a total of 57 banking offices,
the preponderence of which are located within the
east-central section of the state.
Within the relevant banking market (approximated
by the whole of Cumberland County), there are 10
banking organizations that operate 62 offices. SNB operates eight branches within the market and is the
fourth largest institution, controlling approximately 9
percent of market deposits. Merging Bank's three offices control approximately 3 percent of the total deposits of the market and Merging Bank ranks as the
eighth largest bank. Consummation of this proposal
would have the effect of placing slightly less than 13
percent of the market's deposits in SNB's control and,
on a pro forma basis, SNB would become the third
largest banking organization in Cumberland County.
Within the downtown area of Fayetteville, there are
14 banking offices, and Merging Bank's main office is
74




$

7,830,000
377,920,000
385,750,000

In
To be
operation operated
3
57
60

located three blocks from one office of SNB. That area
of the city is, however, no longer economically vibrant
and the immediate area surrounding SNB's downtown
office is scheduled for a major urban renewal effort.
Both Merging Bank and SNB operate one branch each
in the Bordeaux section of the city, about five city
blocks apart. There are, however, six banking offices
within a 1 mile radius of that section of Fayetteville and
the major arterial highway, which has limited access,
effectually separates the primary service areas of the
branches of the proponent banks in the Bordeaux section. The third office of Merging Bank is located near
the Fort Bragg military reservation, northwest of downtown Fayetteville, and at least 5 miles from any office
of SNB. It, therefore, appears that approval of this proposal would have the effect of eliminating only an insubstantial degree of existing competition between the
proponent banks and would not result in a monopoly
or substantially lessen competition within the Fayetteville banking market.
Applicable North Carolina branching statutes allow
statewide branch banking; therefore, those banks not
currently represented within the market can enter de
novo, should they so desire. There does not appear to
be any trend toward concentration of banking resources within Cumberland County, especially since
six of the nine largest commercial banking organizations headquartered in the state have availed themselves of the liberal branching laws in order to establish offices within the county. In view of the number of
banking institutions serving the Fayetteville area and
the intense competition among those institutions, the
immediate Fayetteville area is not considered to be an
attractive location for additional banking facilities
within the foreseeable future. Moreover, it is quite
doubtful that, given Merging Bank's small size and
range of operation, the bank would seek to establish
any additional offices within the near future.
It is not anticipated that the resulting institution will
offer any services to its customers that are not currently offered by SNB. The resulting bank will, however, provide a wide range of new and expanded

banking services to the customers of Merging Bank,
including full trust services, consumer credit services,
an increased emphasis upon personal banking services, an increased legal lending limit, mortgage services, leasing operations, farm services, and a bank
credit card program. Many of those services are not
currently offered to Merging Bank's customers and will
be of significant convenience and benefit to the banking public.
Both Merging Bank and SNB are financially sound,
well-managed banks. The future prospects of SNB are
considered to be favorable, but the future prospects of
Merging Bank as an independent institution appear
questionable. Within its short operating history, Merging Bank has been plagued by a constant succession
of management problems and, although Merging
Bank's senior management appears capable, the bank
has not been successful in attracting competent junior
officers in all fields of the bank's operations. Additionally, Merging Bank has recently experienced a loss of
its market shares of deposits, due in large measure, to
the bank's inability to offer a full range of banking services. SNB possesses both the financial and managerial resources to aid Merging Bank in becoming a
more vibrant competitor and a more meaningful banking alternative. The combined future prospects of
Merging Bank and SNB are considered to be substantially more favorable.
Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that this proposal is in the public interest and
should be, and hereby is, approved.
February 28, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
Bank confines its activities to Fayetteville, Cumberland
County. Applicant operates eight offices in Cumberland County, five of which are located in Fayetteville where all three of Bank's offices are located. Two
of the offices of Applicant appear to be within blocks
of offices of Bank. It thus appears that the proposed
acquisition will eliminate existing direct competition to
an appreciable extent.

Applicant currently ranks as the fourth largest commercial bank in Cumberland County with 9.8 percent
of total deposits, while Bank ranks eighth with 3.5 percent of total deposits. The four largest commercial
banks in the county collectively hold slightly less than
70 percent of total county deposits, which is indicative
of a concentrated banking market. First Citizens Bank
& Trust Company is the largest with 33.4 percent of
total deposits, North Carolina National Bank is second
with 15.6 percent and Cape Fear Bank & Trust Company, a subsidiary of United Carolina Bancshares, is
third with 10.4 percent. Thus, the three largest banks
in Cumberland County collectively hold 59.4 percent of
total deposits. If the proposed acquisition occurs, Applicant will become the third largest bank in the market
with a 13.3 percent share of total deposits, and the
concentration ratio for the three largest banks in Cumberland County will increase from 59 to 62 percent and
the concentration ratio for the four largest banks will
increase from 69 to 72 percent.
There does not appear to be a trend toward concentration in Cumberland County. Indeed, there has been
new entry by banks other than Bank, which itself commenced operations in 1974. Furthermore, since North
Carolina permits statewide branch banking, out-ofcounty banks can enter de novo should the economic
climate suggest the desirability of doing so. Indeed,
six of the nine largest commercial banking organizations in the state have availed themselves of the liberal
branching law to establish offices in the county. The
remaining three each have at least $100 million in deposits and therefore can be deemed potential entrants
via either branching or acquisition. Should they elect
the latter, there will remain several small banks in the
county that could serve as entry vehicles. Of course,
the proposed acquisition will eliminate the potential
competition that would have occurred had Applicant
entered the county by branching rather than acquisition.
Overall, the proposed acquisition will have an adverse competitive effect.

WACHOVIA BANK AND TRUST COMPANY, N.A.,
Winston-Salem, N.C., and Town and Country Bank, Lumberton, N.C.
Banking offices
Total
assets

Names of banks and type of transaction

Town and Country Bank, Lumberton, N.C, with
and Wachovia Bank and Trust Company, N.A., Winston-Salem, N.C. (15673), which had
merged Apr. 1, 1977, under charter and title of the latter bank (15673). The merged bank
at date of merger had

COMPTROLLER'S DECISION
Town and Country Bank, Lumberton, N.C. ("TCB"), the
merging bank, and Wachovia Bank and Trust Company, N.A., Winston-Salem, N.C. ("Wachovia"), the
charter bank, have applied to the Comptroller of the



$

8,639,000
3,415,829,000
3,424,468,000

In
To be
operation operated
1
196

197

Currency for prior permission to effectuate a merger
under the charter and with the title of Wachovia Bank
and Trust Company, N.A. The instant application rests
upon an agreement executed between the proponent
banks which is incorporated herein by reference, the
same as if fully set forth.
75

Wachovia was chartered as a national banking association on December 20, 1968. As of June 30, 1976,
Wachovia held total commercial bank deposits (domestic and foreign) of $2.7 billion, representing 21.3
percent of commercial bank deposits in the state of
North Carolina. A wholly-owned subsidiary of The Wachovia Corporation, Winston-Salem, N.C., a registered
one-bank holding company, Wachovia operates a total
of 186 banking offices throughout the state, inclutling
a single office in Robeson County (the approximate
relevant market) in Maxton.
TCB, a state-chartered, unit bank, commenced operations on March 20, 1973. Domiciled within the city
of Lumberton, the county seat of Robeson County,
TCB controls commercial bank deposits aggregating
$6.9 million and is the smallest of four commercial
banks operating within Lumberton.
As previously noted, Wachovia presently operates
one banking office in Robeson County; that office is,
however, approximately 25 miles distant from the site
of TCB, and serves a different primary service area.
There are two offices of Wachovia that are physically
closer to TCB than is the Maxton office; one is in
Dublin and one in Tar Heel, 18 miles and 22 miles
away, respectively, in adjacent Bladen County to the
east of Lumberton. The combination of Wachovia's 3
percent of the market's deposits with the 5 percent
controlled by TCB would rank Wachovia as the fourth
largest banking organization in Robeson County; but it
would still be less than one-half the deposit size of the
third largest organization therein.
Pursuant to applicable state banking statutes, Wachovia could legally establish a de novo office in Lumberton. However, given the declining population and
economic trends of the area, it is highly unlikely that
the charter bank would consider that means of entering Lumberton. Also, the merging bank could legally
establish a de novo office in any service area of Wachovia, but is not likely to do so given the small size
and financial resources of TCB.
If the proposed merger is consummated, the resulting institution would offer more viable competition to
the significantly larger competitors of TCB. Furthermore, the Lumberton banking community would benefit from a substantially larger lending limit at the new

76



bank as well as from the addition of more and specialized banking services, and the future prospects of the
combined banks would be enhanced.
It is, therefore, the conclusion of the Office of the
Comptroller of the Currency that any slightly adverse
competitive effects associated with this proposal are
clearly outweighed by the benefits accruing to the
banking public. In addition, the financial and managerial resources and future prospects of the combined
institutions add additional weight toward approval of
the subject proposal. It is, therefore, the opinion of this
Office that this application is in the public interest and
should be, and hereby is, approved.
February 28, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
Applicant's closest offices to Bank are located about
18 miles and 22 miles, respectively, to the east in
Dublin and Tar Heel, Bladen County. Applicant also
operates two offices about 25 miles from Bank, one to
the west in Maxton, Robeson County, and the other to
the east in Elizabethtown, Bladen County.
There are six banks in Robeson County operating 21
offices; together they held total county deposits of
$146.5 million, as of June 30, 1975. Four of these
banks operate offices in Lumberton. As of June 30,
1975, Applicant and Bank controlled approximately 3
and 5 percent, respectively, of total county bank deposits; three other banks, subsidiaries of large bank
holding companies, controlled approximately 40, 30,
and 19 percent of those deposits.
In view of the distances between their closest offices, there appears to be only a small amount of existing competition between Applicant and Bank which
the proposed merger would eliminate. The proposed
merger also would eliminate the potential for increased
competition between the parties, since statewide de
novo branching is permitted in North Carolina. There
are, however, five banking organizations in North
Carolina with deposits in excess of $100 million which
could be permitted to enter Robeson County de novo.
In sum, the proposed merger will have a slightly adverse effect upon competition.

OLD NATIONAL BANK OF WASHINGTON,
Spokane, Wash., and The Industrial Park Branch of First National Bank in Spokane, Spokane, Wash.
Banking offices
Names of banks and type of transaction

Total
assets *

The Industrial Park Branch of First National Bank in Spokane, Spokane, Wash. (13331), with
was purchased Apr. 29, 1977, by Old National Bank of Washington, Spokane, Wash. (4668),
which had
After the purchase was effected, the receiving bank had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency by Old National Bank of Washington, Spokane, Wash. ("Old National"), the purchasing bank, to
purchase the assets and assume the liabilities of The
Industrial Park Branch of First National Bank in Spokane, Spokane, Wash. ("Selling Bank"). The subject
application rests upon an agreement executed between the proponent banks which is incorporated
herein by reference, the same as if fully set forth.
Old National, the fifth largest commercial bank
headquartered within the state of Washington, is a
wholly-owned subsidiary of Old National Bancorporation, Spokane, Wash. Presently operating 76 branches
throughout the state, Old National, as of June 30,
1976, had total deposits of approximately $689 million.
Selling Bank, also a wholly-owned subsidiary of Old
National Bancorporation, received its charter as a national banking association on May 25, 1929, and as of
mid-year 1976, had total deposits of $54.4 million. The
bank operates six branches within the Spokane area;
The Industrial Park Branch was opened for business
on October 18, 1965, and has total deposits of $2.1
million.
The primary service area of The Industrial Park
Branch of Selling Bank is mainly comprised of a large
industrial park complex and the small residential area
of Trentwood wherein are located numerous
businesses engaged in manufacturing, fabricating and
distribution. The nearest office of Old National to The
* Asset figures are as of call dates immediately before and after
transaction, branch figures are deposits only.

In
To be
operation operated

$2,138,000

1

830,665,000
845,481,000

76
77

Industrial Park Branch is approximately 2.5 miles distant. Due to the fact that both of the proponent banks
are owned and controlled by the same parent bank
holding company, there would be no lessening of
competition.
During its years of operation, The Industrial Park
Branch has failed to generate a satisfactory profit or
volume of business to, in the opinion of its parent corporation, sufficiently justify the continued existence of
this branch. Old National is of the opinion that, due to
its larger lending limit and statewide branching system, it could better serve the business potential within
this heavily industrial area. (Old National presently has
several large deposit and loan accounts from companies located within the park complex.) Additionally,
Old National has stated its interest to introduce corporate trust services at the Industrial Park Branch location.
Both the financial and managerial resources and future prospects of the proponent banks and its holding
company parent are regarded as satisfactory.
Accordingly, applying the statutory criteria, it is the
conclusion of this Office that this application is in the
public interest and should be, and hereby is, approved.
February 17, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The banks are both wholly-owned subsidiaries of the
same bank holding company. As such, the proposed
transaction is essentially a corporate reorganization
and would have no effect on competition.

FIRST NATIONAL BANK OF POMPANO BEACH,
Pompano Beach, Fla., and First National Bank of Broward County, Lighthouse Point, Fla., and First National Bank of
Margate, Margate, Fla., and First National Bank on the Beach, Pompano Beach, Fla.
Names of banks and type of transaction

First National Bank of Broward County, Lighthouse Point, Fla. (15004), with
and First National Bank of Margate, Margate, Fla. (15113), with
and First National Bank on the Beach, Pompano Beach, Fla. (15724), with
and First National Bank of Pompano Beach, Pompano Beach, Fla. (14723), which had
merged May 2, 1977, under charter of the latter bank (14723) and title "First National
Bank of Broward County." The merged bank at date of merger had




Total
assets
$ 52,911,000
30,594,000
27,865,000
120,675,000
214,495,000

Banking offices
In
To be
operation operated
1
1
1
1
4

77

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency for prior permission to merge First National
Bank of Broward County, Lighthouse Point, Fla.
("Lighthouse Point Bank"); First National Bank of
Margate, Margate, Fla. ("Margate Bank"); and First
National Bank on the Beach, Pompano Beach, Fla.
("Pompano Beach Bank") (collectively, "Merging
Banks"), into First National Bank of Pompano Beach,
Pompano Beach, Fla. ("Charter Bank"), under the
charter of First National Bank of Pompano Beach, and
with the title of "First National Bank of Broward
County." The subject application rests upon an agreement executed between the proponent banks, incorporated herein by reference, the same as if fully set
forth.
Lighthouse Point Bank received its charter as a national banking association on August 31, 1962, and as
of September 30, 1976, held commercial bank deposits aggregating $44.2 million.
Margate Bank was chartered on June 25, 1963, and
at the conclusion of the third quarter of 1976, held total
deposits of $25.4 million.
With total deposits of approximately $21 million,
Pompano Beach Bank is the smallest of the Merging
Banks, and was organized on May 1, 1969.
Charter Bank was organized on June 28, 1954, and
received its charter on December 28, 1954. As of September 30, 1976, Charter Bank had total deposits of
approximately $83 million.

All of the proponent banks are subsidiaries of the
20th largest commercial banking organization headquartered within the state of Florida, First Bankers Corporation of Florida, Pompano Beach, Fla. Accordingly,
the subject application is regarded essentially as a
corporate reorganization of a registered multi-bank
holding company, and would have no adverse effect
upon competition.
The application indicates that the larger combined
bank will have the capacity and ability to be a more
meaningful competitor, result in better and more efficient utilization of deposits, produce certain economies of scale and efficiencies of operation and result
in greater location conveniences for customers. Considerations relating to convenience and needs benefits
are, therefore, considered to be consistent with approval.
The financial and managerial resources and future
prospects of the Merging Banks and Charter Bank are
regarded as satisfactory.
This application is therefore regarded as being in
the public interest and should be, and hereby is, approved.
March 22, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are wholly-owned subsidiaries of
the same bank holding company. As such, their proposed merger is essentially a corporate reorganization
and would have no effect on competition.

FIRST NATIONAL BANK OF MANSFIELD,
Mansfield, Ohio, and The Peoples National Bank of Plymouth, Plymouth, Ohio
Banking offices
Total
assets

Names of banks and type of transaction

The Peoples National Bank of Plymouth, Plymouth, Ohio (7035), with
and First National Bank of Mansfield, Mansfield, Ohio (2577), which had
merged May 13, 1977, under the charter and title of the latter bank (2577). The merged
bank at date of merger had

COMPTROLLER'S DECISION
The Peoples National Bank of Plymouth, Plymouth,
Ohio ("Peoples"), the merging bank, and First National
Bank of Mansfield, Mansfield, Ohio ("FNB"), the charter bank, have made application to the Comptroller of
the Currency for prior permission to effectuate a
merger under the charter and title of First National
Bank of Mansfield with corporate headquarters in Plymouth, Ohio. The subject application rests upon an
agreement executed between the proponent banks,
incorporated herein by reference, the same as if fully
set forth.
Peoples was organized as a national bank on October 30, 1903, and as of September 30, 1976, had total
commercial bank deposits aggregating $15.4 million.
In addition to its main office, Peoples operates one
branch office, also domiciled within the village of Plymouth.
78



$ 17,502,000
208,777,000
226,279,000

In
To be
operation operated
2
17
19

FNB received its charter as a national banking association on October 24, 1881, and as of September 30,
1976, FNB's total deposits were approximately $170
million. FNB operates its head office and ten branches
in the city of Mansfield, and additional branch offices
(one in Lexington, one in Shiloh, two in Ontario, one in
Crestline and one in Bellville) in various sections of
Richland County, Ohio.
All offices of FNB are located within Richland
County, while both locations of Peoples are in Huron
County. The village of Plymouth is somewhat unique in
that it is situated on the boundary separating the counties of Huron and Richland. Therefore, Peoples could
legally, pursuant to applicable state branching statutes
(Ohio Revised Code Annotated, Section 1111.03), establish branch operations within the political boundaries of both Huron and Richland counties.
On April 5, 1976, the Comptroller's Office ac-

knowledged receipt of the application and notified the
Attorney General of the United States, the Board of
Governors of the Federal Reserve System and the
Board of Directors of the Federal Deposit Insurance
Corporation of the application, requesting that they
prepare a report concerning the competitive factors involved in the proposed merger. Peoples and FNB
caused notice of the proposed merger to be published
in newspapers of general circulation in Mansfield on
April 8, 15, 22 and 29 and May 6 and 8, 1976, and in
Plymouth on April 8, 15, 22 and 29 and May 6, 1976.
Both Peoples and FNB submitted proposed proxy solicitation materials to the Comptroller's Office for review
and, on April 15, 1976, the Director of the
Comptroller's Securities Disclosure Division advised
Peoples and FNB that the Comptroller's Office would
interpose no objection to the materials being distributed to shareholders. On May 12, 1976, the shareholders of both Peoples and FNB met and approved
the proposed merger.
A commissioned national bank examiner was dispatched to conduct a field investigation relative to the
proposed merger and, during the course of his
investigation, the examiner contacted officers of ten
banks in the area to solicit their comments on the application. Of those ten institutions contacted, three
Huron County banks objected to the application—
Union Bank & Savings Company, Bellevue, Ohio; The
Huron County Banking Company, N.A., Norwalk, Ohio;
and The Willard United Bank, Willard, Ohio. Of those
three, The Huron County Banking Company, N.A., and
The Willard United Bank (hereinafter "Protestants")
elected to pursue their initial objections. On April 11,
1976, the investigating national bank examiner submitted a written report of his findings. The Deputy Regional Administrator for the Fourth National Bank Region reviewed the application and the examiner's report and, on April 23, 1976, he submitted his own
analysis and recommendation.
On June 2, 1976, the Protestants, through counsel,
transmitted their written objections on the application
and requested that a public hearing be convened. The
Protestants request was determined to be untimely
since it was received nearly 45 days after the time to
request a public hearing under 12 CFR 5.4 had expired. In that the Protestants had an opportunity to
present their views "in person" to the investigating national bank examiner and that a public hearing, which
is a fact-gathering rather than a fact-finding proceeding, would not be the vehicle best suited to efficiently
receiving the Protestants' arguments, it was determined that the Protestants would be invited to submit
written materials in support of their objections and that
a public hearing would not be convened. On July 8,
1976, Protestants, again through counsel, submitted a
lengthy legal memorandum and an equally lengthy
economic brief in opposition to the application and formally withdrew their request for a public hearing. On
August 27, 1976, Protestants filed a supplemental
memorandum in opposition to the application. Thus,
Protestants were given every reasonable opportunity
to make their views known. In addition, the submissions of Peoples and FNB have been made available



to Protestants, as have the reports of the Department
of Justice, the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation relating to competitive factors.
On May 4, 7, and 11, 1976, respectively, the Board
of Governors of the Federal Reserve System, the Department of Justice and the Federal Deposit Insurance
Corporation submitted their reports on the competitive
effects of the merger to the Comptroller's Office. The
merger application received different responses from
each of the agencies. The Federal Deposit Insurance
Corporation concluded that the proposal would have a
substantially adverse effect; the Board of Governors of
the Federal Reserve System concluded that the proposal would have only a slightly adverse competitive
effect; the Department of Justice took a position somewhat in the middle and concluded that the merger
would have an adverse competitive effect. Those reports, as well as the remainder of the entire administrative record compiled on the merger application (which
record includes staff analyses and recommendations
and materials submitted by Protestants) were submitted to the Acting Comptroller for ultimate disposition.
Although the Protestants' arguments do not warrant
either a further delay in reaching a determination on
the merits of this application or a denial of the application, Protestants' contentions are examined in greater
detail at this time.
Protestants' first argument contends that "the application must be denied by the Comptroller because the
applicants have failed to publish proper notice of the
transactions contemplated by the application." Notice
with respect to a proposed merger must be published
in a newspaper of general circulation pursuant to 12
USC 1828 (c) (3) (D). Applicable regulations, 12 CFR
5.1 and 5.2, issued by the Comptroller in connection
with (1) a merger where the resulting bank is a national
bank, (2) a relocation of the main office of a national
bank, and (3) the establishment of a branch by a national bank, require the publication of a notice containing the name of the applicant, the subject matter of the
application and the date upon which the application
was filed. The notice published by the charter and
merging banks referred only to the proposed merger.
The merger notice omitted any reference to the interchange of the original office of FNB with the main office of Peoples. Protestants argue that the proposed
merger involves three separate and distinct
transactions—merger, main office relocation and
branch establishment (at old main office of FNB)—and
contend further that each (emphasis added) transaction must meet the notice requirements of 12 CFR 5.1
and 5.2.
Protestants' arguments relative to the first issue obviously are based upon a restrictive literal reading and
interpretation of the applicable regulations of this Office. Realizing the advantage in treating mergers and
interchange of main offices of the merging banks in a
single application, the Office of the Comptroller of the
Currency has allowed national banks to file merger applications which expressly contemplate more than the
merger transaction per se, i.e., branch interchange.
This "package" concept has been utilized by numer79

ous prior applicants. To require Peoples and FNB to
republish notice of the transaction setting forth the
designation of a particular office as a branch and another as the main office of the resulting bank does not
appear warranted in this application. In fact, the Protestants have had full knowledge of what is contemplated through this merger and have addressed themselves to the substantive issues concerning all aspects of the transaction. A close examination of Protestants' arguments indicates that the
Protestants do not dispute that proper notice was
published pursuant to the requirements of 12 USC
1828(c) but, rather, Protestants ask that the merger be
dissected into several piecemeal transactions and to
require a publication of notice for each of the merger
components. Thus, the Protestants contend that there
was no notice of any proposed relocation of First
National's main office to Plymouth or of the retention of
First National's present main office in Mansfield as a
branch office.
The merger of two commercial banks necessarily
encompasses several component elements, each of
which could be accomplished by an individual bank
outside of the structure of a merger. For example, an
individual national bank may apply to the Comptroller
for permission to relocate its main office and retain its
existing main office as a branch office. When such relocation and retention is done by an individual bank,
outside of the scope of a merger, separate notice of
those proposed actions is indeed appropriate. When,
however, such relocation and retention are to be accomplished within the scope of a merger, separate notice of such component actions is neither appropriate
nor required; separate notice would confuse more than
enlighten the public.
The publication of notice of a proposed merger
serves as notice for all the several components which
may be incorporated into the merger agreement. In
that the merger agreement becomes an integral part of
the public file in every proposed merger, every component part of the merger becomes public knowledge
and is available to any interested party.
The Comptroller finds that little, if any, useful purpose would be served by requiring applicants to republish notice of the entire transaction at this date and
that Protestants' arguments relative to this issue are
not so compelling as to warrant denial of this application, and must, therefore, be denied.
Protestants' second argument in opposition to the
proposed merger is somewhat related to the first argument and contends that "the application must be denied because it fails to provide information necessary
for the Comptroller in consideration of the proposed
relocation of First National's main office." Neither an
"Application for a Change in Location of Head Office,"
12 CFR 4.6 (1976), nor an "Application for Permission
to Establish a Branch," 12 CFR 4.5 (1976), have been
filed by the proponent banks, and pertinent information
which would be required in connection with a main office relocation application and a branch establishment
application has not been included within the subject
pending application. Protestants argue that, as a result
of such omission, there is no information before the
80



Comptroller at this time upon which a decision can be
made with respect to the proposed main office relocation and subsequent retention of the original main office as a branch. Accordingly, Protestants argue that
the application is incomplete and must be denied.
Again, the Protestants are attempting to dissect the
proposed merger for no apparent good reason. The
merger agreement clearly sets forth which of the existing offices of Peoples and FNB is to be designated as
the main office of the resulting bank, thus indicating
with equal clarity that the remaining offices are to be
designated branch offices. Accordingly, there is nothing in the structure of the merger which would remain
hidden without the filing of the application. The Protestants, nevertheless, argued that the failure to file such
applications denies the Comptroller information necessary for the approval of the merger. Such an argument
is irrelevant here, however, precisely because the actions come within the framework of a merger.
When an individual bank applies for permission to
relocate its main office, the intended result is that a
banking services office will be established in a community where it had not previously existed. When an
individual bank applies for permission to establish a
branch office, the intended result is, again, the establishment of a banking services office in a community
where it had not previously existed. The Comptroller's
application forms for such actions are designed to
elicit information necessary for the Comptroller to determine whether or not to approve those entries into
new communities. In this case, however, the merger of
Peoples and FNB would not result in the establishment
of any new banking service offices in any new communities. To require Peoples and FNB to file main office relocation or branch applications would serve only
to increase the already voluminous burden of paperwork without any useful purpose. Finally, the Comptroller, through the application and attendant material
filed therewith, has been fully apprised of all facets of
this transaction. Accordingly, the Protestants' second
contention must be dismissed as being without merit.
The next argument which Protestants submit is that
"the Comptroller must deny the application because
the proposed transaction violates federal and state law
governing the establishment of branches by national
banks" and, further, "the application must be denied
because the proposed change in the location of First
National's main office is a sham maneuver designed
solely to avoid the Ohio branching restrictions." The
protesting banks state that FNB, domiciled within Richland County, Ohio, is prohibited by Ohio law from establishing a branch at the location of either the main
office or branch office of Peoples because both offices
of Peoples are located within Huron County. Twelve
USC 36 (c) prohibits the establishment by a national
bank of a branch if, under applicable state statutes,
state-chartered banks are not authorized to establish
such a branch. Section 1111.03 of the Ohio Revised
Code Annotated provides that:
No bank shall establish a branch in any place
other than that designated in the articles of incorporation as its principal place of business, except
in a municipal corporation contiguous to such

designated place, or in other parts of the country
in which the municipal corporation in which the
principal place of business of the bank is located
. . . (Emphasis added).
Where branching occurs as a result of a merger, a
national bank is also bound by the branching limitations of applicable state law (12 USC 36(b)(2)). Thus,
inasmuch as FNB is domiciled within Richland County
and both the main office and branch of Peoples are
located within Huron County, Protestants conclude that
FNB, pursuant to the above cited statutory provisions,
cannot establish, either de novo or by merger, a
branch office at the locations presently occupied by
Peoples.
In Ohio Bank and Savings Co. v. Tri-County National
Bank, 411 F.2d.8O1 (6th Cir. 1969), the court held that
a bank with its main office in a municipality that is located in more than one county is permitted, under Ohio
Revised Code, Section 1103.09 (currently Ohio Revised Code Annotated, Section 1111.03), to have
branches in each county. The proposed merger of
Peoples into FNB and the redesignation of the main
office of Peoples as the main office of the surviving
bank would allow the resulting bank to have branches
in both Richland and Huron County. There are no statutory restrictions preventing the Comptroller from approving the redesignation of the main office of FNB
from Mansfield to Plymouth. Furthermore, 12 USC
36(c) provides that the Comptroller may authorize a
national bank to establish and operate new branches
if, when, where and how state law permits statechartered banks to do so. Hence, FNB may legally retain its present branches in Mansfield and other areas
within Richland County after the redesignation of the
main office of the bank to Plymouth. Accordingly, Protestants' arguments relative to this point must be dismissed as having no merit.
The last point of opposition, as put forward by Protestants, is that "the application must be denied because the proposed transactions would substantially
lessen competition and the anticompetitive effects are
not clearly outweighed by public interest considerations." Protestants further take exception to the methodology employed by FNB and Peoples by delineating
the "primary service area" affected by the proposed
merger. Traditionally, regulatory authority has defined,
in general terms, the "primary service area" of a bank
as that most concise geographic area in which 75 percent of the bank's loan and deposit business is derived. The methodology employed by the proponent
banks in determining the primary service area is the
utilization of postal ZIP codes, to which Protestants
take exception for several reasons. (One argument
which Protestants present is that postal ZIP codes are
irregular in shape and FNB and Peoples did not reveal
from where 75 percent of their loans were derived.)
This Office has, on numerous occasions in the past,
been presented with merger applications wherein the
"relevant geographic market areas" have been defined by the use of postal ZIP code analysis of deposit
and loan accounts. It must be stated that there is not
now, nor has there been in the past, one method or
one best method to be employed in determining the



"relevant geographic market." Irrespective of the
method employed, the end results can, at best, only
be termed as an "approximation" or a "workable compromise."1 Insofar as the subject banks have chosen
ZIP codes in analyzing the transaction, the Comptroller
finds no reason to take exception to the use of this
method, based upon the record as established. Moreover, such "ZIP code delineations" have received
court approval in another case involving a merger in
which the resulting institution was a national bank.2
Thus, this line of attack upon the competitive factors of
the proposed merger is without merit.
It is worth noting that the Department of Justice,
Federal Reserve Board and Federal Deposit Insurance
Corporation all differed in their definition of the relevant
market area. This Office prefers to define the approximate relevant market area (that geographic area in
which the surviving bank will operate and impact subsequent to consummation of the merger) as the whole
of Huron and Richland counties. Within that market
there are 12 commercial banking organizations operating 58 offices. FNB is the largest of the 12 banks with
deposits of $166.8 million, as of June 30, 1976, representing 28.02 percent of total market deposits. Peoples, as of mid-year 1976, had total deposits of $14.7
million and was the second smallest of all commercial
banks domiciled within the area, holding 2.5 percent of
deposits. Consummation of this proposal would therefore have the effect of combining the largest and second smallest banks in the area, thereby giving the surviving bank 30.5 percent of total deposits. The second
largest bank, The Richland Trust Company, Mansfield,
Ohio, with deposits of approximately $87 million, controls 14.6 percent of total market deposits.
The main offices of FNB and Peoples are approximately 20 miles apart, and the nearest office of FNB to
Peoples, is FNB's Shiloh branch, slightly less than 5
miles from Plymouth. FNB is essentially oriented toward Richland County, in general, and the immediate
Mansfield area, in particular. While Peoples has the legal ability to expand its operations into both Huron and
Richland counties, both its main office and one branch
are in Huron County. There appears to be no obvious
desire or interest to expand into its neighboring county
to the south and, due to its small size and limited financial and managerial resources, it does not appear that,
left to employ its own facilities, Peoples would become
a significant competitor in Richland County. It, therefore, is the opinion of this Office that the overall competitive aspects of this merger could be termed as
only "slightly adverse."
Because this Office differs with Protestants on the
degree of severity of the competitive effects of this
proposal, the Comptroller must declare that Protestants appear to have emphasized incorrectly a point of
law; specifically, 12 USC 1828(c) (5) (B) which provides in relevant part that the responsible agency shall
not approve 1

United States v. Philadelphia National Bank, 374 U.S. 321, 361
(1963).
2

United States v. Idaho First National Bank, 315 F. Supp. 261 (D.
Idaho 1970).

81

. . . any other proposed merger transaction whose
effect in any section of the country may be substantially to lessen competition, or tend to create a
monopoly, or which in any other manner would be
in restraint of the trade, unless it finds that the anticompetitive effects of the proposed transaction
are clearly outweighed in the public interest by the
probable effect of the transaction in meeting the
convenience and needs of the community to be
served . . . (Emphasis added).
Inasmuch as this Office is of the opinion that the
competitive effects of this proposal do not reach the
level of "substantially" or "significantly" adverse, the
Comptroller need not weigh the adverse competitive
effects of the proposal against the probable convenience and needs benefits accruing to the banking
public.
With respect to the convenience and needs aspects
of the proposal, which the Comptroller must consider
pursuant to the provisions of 12 USC 1828(c) (5) (B), it
is the opinion of this Office that the overall effect of this
proposal may prove to be pro-competitive in that it will
allow a larger institution which is well-managed and
financially sound to offer new and expanded banking
services in the Huron County portion of the market,
thereby forcing the other banks in the area to become
more viable competitors and more meaningful banking
alternatives. It is the Comptroller's hope that the entry
of FNB into the Huron County portion of the market will
have the effect of stimulating competition within that
area. In the opinion of this Office, the services that
FNB would offer to former customers of Peoples and
others in the Plymouth area are not trivial: commercial
lending in larger amounts, IRA accounts, overdraft
checking, bank credit cards, and trust services (none
of which are presently offered by Peoples). Considerations relating to convenience and needs are thus deemed to add additional weight in approving this application.
Both FNB and Peoples are well-managed, financially
sound banks. Consummation of. this proposal would,
however, have the effect of providing for management
succession at Peoples, as well as providing additional
capital. Independently, and in combination, the future
prospects of both FNB and Peoples appear favorable,
and are enhanced by this merger.

82



Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that this proposal is in the public interest and
should be, and hereby is, approved. Further, for the
reasons herein enunciated, Protestants' request that
this application be denied is, hereby, rejected.
March 30, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
As noted above, Applicant is essentially oriented toward Richland County in general and Mansfield in particular. Mansfield, an industrial center with a population of 130,000, is the dominant economic factor in
Richland County. Plymouth (population 2,000), where
Bank is located, is either entirely within Richland
County (see Polk's and the Rand McNally Commercial
Atlas) or partially in Richland and partially in Huron
County, depending upon the map that is used. In either event, Plymouth is only about 20 miles from Mansfield and is deemed by us to be properly includable
within the Mansfield SMSA.
Applicant maintains a branch office in Shiloh, which
is only 4 miles from Plymouth. It appears that Applicant
derives more than $3 million in deposits (1,211 accounts) from Plymouth and adjacent portions of Huron
County, and that Bank derives about $1.6 million of its
deposits (1,027 accounts) from Richland County. In
addition, it should be noted that Applicant and Bank
operate the only banking offices in the Plymouth-Shiloh
area. There thus appears to be a considerable amount
of direct competition between Applicant and Bank.
There appear to be six banks operating 40 offices
within the Mansfield SMSA. As of June 30, 1975, Applicant ranked as the largest with approximately 42 percent of total deposits in the area. Bank, which is on the
border of the Mansfield SMSA, ranked sixth and last in
size, with about 4 percent of total deposits. As a consequence of the proposed acquisition, Applicant's
share of the market would increase to 46 percent and
the top three banks would control almost 90 percent of
total deposits.
In sum, the proposed acquisition would both eliminate direct competition and produce an increase in
concentration. Accordingly, it would have an adverse
competitive effect.

THE FIRST NATIONAL BANK OF ATLANTA,
Atlanta, Ga., and The First Augusta Bank and Trust Company, Augusta, Ga.
Banking offices
Total
assets *

Names of banks and type of transaction

The First Augusta Bank and Trust Company, Augusta, Ga., with
was purchased May 20, 1977, by The First National Bank of Atlanta, Atlanta, Ga. (1559),
which had
After the purchase was effected, the receiving bank had

COMPTROLLER'S DECISION
On May 20, 1977, application was made to the Comptroller of the Currency by The First National Bank of
Atlanta, Atlanta, Ga. ("Purchasing Bank"), for permission to purchase certain assets and assume certain
liabilities of The First Augusta Bank and Trust Company, Augusta, Ga. ("First Augusta"). First Augusta
was placed in receivership and taken over by the Federal Deposit Insurance Corporation ("FDIC") on May
20, 1977. The instant application rests upon an agreement executed between the FDIC, as receiver, and
Purchasing Bank, which is incorporated herein by reference, the same as if fully set forth. For reasons enunciated below, the application is deemed to be in the
public interest and is, hereby, approved. Furthermore,
Purchasing Bank is authorized to immediately consummate this purchase and assumption transaction.
Pursuant to the Bank Merger Act of 1966, 12 USC
1828(c), the Comptroller of the Currency cannot approve a purchase and assumption transaction which
would have certain proscribed anticompetitive effects
unless he finds those anticompetitive effects to be
clearly outweighed in the public interest by the effects
of the transaction on the convenience and needs of
the community to be served. Additionally, the Comptroller is directed to consider the financial and managerial resources and future prospects of the existing
and proposed institution and the convenience and
needs of the community to be served. When necessary, however, to prevent the evils attendant upon the
interruption of banking services to customers, the
Comptroller may proceed without reports on the competitive consequences of the transaction ordinarily solicited from the Department of Justice and other banking agencies. He is authorized in such circumstances
* Asset figures are as of call dates immediately before and after
transaction.




$

In
To be
operation operated

23,711,000

3

1,954,867,000
2,053,487,000

53
56

to act immediately, in his sole discretion, to approve
an acquisition and to authorize the immediate consummation of the transaction.
The proposed acquisition will be in accord with all
pertinent provisions of The National Banking Act and
will prevent a disruption of banking services to the
community and potential losses to a number of uninsured depositors. The Purchasing Bank has sufficient
financial and managerial resources to absorb First Augusta and this acquisition will enable it to enhance the
banking services offered in the Augusta community.
Thus, the approval of this transaction will help to avert
a loss of public confidence in the banking system and
will provide for a continuance of banking services offered to customers of First Augusta.
The Comptroller finds that the anticompetitive effects
of the proposed transaction, if any, are clearly outweighed in the public interest by the probable effect of
the proposed transaction in meeting the convenience
and needs of the community to be served. For those
reasons, the Purchasing Bank's application to purchase certain of the assets and to assume certain of
the liabilities of First Augusta, as set forth in the agreement between FDIC and Purchasing Bank, is approved. This approval also includes specific approval
to operate all offices of First Augusta as branches of
the Purchasing Bank. The Comptroller further finds that
the failure of First Augusta requires him to act immediately, as contemplated by the Bank Merger Act, to prevent disruption of banking services to the Augusta
community; the Comptroller, thus, waives publication
of notice, dispenses with the solicitation of competitive
reports from other agencies and authorizes the transaction to be consummated immediately.
May 20, 1977.
Due to the emergency nature of the situation, no Attorney General's report was requested.

83

THE NATIONAL BANK OF NORTHERN NEW YORK,
Watertown, N.Y., and The First National Bank of Mexico, Mexico, N.Y.
Banking offices
Names of banks and type of transaction

Total
assets

The First National Bank of Mexico, Mexico, N.Y. (5293), with
and The National Bank of Northern New York, Watertown, N.Y. (2657), which had
merged May 27, 1977, under charter and title of the latter bank (2657). The merged bank
at date of merger had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency requesting prior permission to effectuate a
merger of The First National Bank of Mexico, Mexico,
N.Y. ("FNB"), the merging bank, into The National
Bank of Northern New York, Watertown, N.Y. ("Watertown Bank"), the charter bank, under the charter and
title of The National Bank of Northern New York, Watertown, N.Y. The subject application rests upon an
agreement executed between the proponent banks,
incorporated herein by reference the same as if fully
set forth.
FNB was established in 1900 and, as of December
31, 1976, held total commercial bank deposits aggregating $10.1 million. FNB's main office in the village of
Mexico, a community of approximately 1,600 residents, is the only banking office within the community.
Likewise, the New Haven branch of FNB is the only
bank is that town. FNB's third office is located within
the city of Fulton where there are three competing
banks.
Watertown Bank received its charter as a national
banking association on April 12, 1882, and as of yearend 1976, had total deposits of almost $154 million.
The closest offices of the merging bank and charter
bank are the main office of FNB and Watertown Bank's
Adams Center branch, about 36 miles apart. There are
numerous offices of competing banks situated within
the intervening area. Due to the distance separating
the closest offices of the proponent banks and the natural geographic barriers between the two banks and/
or their respective branch offices, approval of this proposal would have no adverse effect upon existing
competition. Additionally, approval of the subject application will remove home office protection from the
village of Mexico, thereby facilitating branch establishment by other commercial banks within Mexico.
In addition to a substantially increased legal lending
limit, the resulting bank will provide new and expanded banking services to the Mexico banking community including, but not limited to, specialized commercial lending, farm credit specialization, bank
charge cards and revolving credit plans. Also, higher
effective rates on time deposit instruments, trust services and computer services will be furnished. Of additional note, the merger of FNB and Watertown Bank
will enable the surviving institution to better compete


84


$ 14,571,000
191,361,000
202,660,000

In
To be
operation operated

3
13
16

with its significantly larger bank holding company affiliated competitors. Considerations relating to convenience and needs benefits are, therefore, regarded as
lending weight to approval.
The financial and managerial resources of both FNB
and Watertown Bank are considered to be satisfactory,
although FNB does not possess adequate management depth. The merger will provide for management
succession at FNB and the combined financial resources will perpetuate a sound institution. Furthermore, the future prospects of the charter bank and
merging bank, independently and in combination, are
regarded as favorable.
Accordingly, applying the statutory criteria, it is the
opinion of the Office of the Comptroller of the Currency
that this application is in the public interest and should
be, and hereby is, approved.
April 26, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
Bank's offices are located in Mexico, Fulton and New
Haven. Its main office in Mexico is the only bank in a
community of 1,600. Its branch in New Haven is the
only bank in a town of 300. Fulton, a city of 14,000, is
the only community in which Bank faces competition;
three commercial banks, including two offices of Marine Midland and one of First Commercial Banks, and
a $56 million-deposit savings bank are located there.
Fulton is the only area of the three that appears to be
making economic progress. County per capita income
runs 30 percent below the statewide average.
Applicant's nearest office to any Bank office is 36
miles north of Mexico. It is unlikely that there is much
significant competition between them, but the application simply stated that the amount of business that Applicant draws from Bank's service area is negligible
and the volume of those accounts is minimal.
In the area are seven banking organizations, each
with deposits in excess of $1 billion. Even were Applicant to move southwest into Oswego County, its de
novo entry would not materially change the banking
structure.
In light of the distance between Applicant and Bank,
the apparent lack of competition between them, the
presence of other competitors, the rural nature of the
area in which Bank has two offices, the effect of the
proposal does not appear adverse.

SUN FIRST NATIONAL BANK OF MELBOURNE,
Melbourne, Fla., and Sun First National Bank of Palm Bay, Palm Bay, Fla.
Banking offices
Total
assets

Names of banks and type of transaction

Sun First National Bank of Melbourne, Melbourne, Fla. (14845), with
and Sun First National Bank of Palm Bay, Palm Bay, Fla. (16107), which had
merged June 1, 1977, under charter of the latter bank (16107) and title "Sun First National
Bank of Melbourne." The merged bank at date of merger had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency seeking prior approval of the merger of Sun
First National Bank of Melbourne, Melbourne, Fla.
("Merging Bank"), into Sun First National Bank of Palm
Bay, Palm Bay, Fla. ("Charter Bank"), under the charter of Sun First National Bank of Palm Bay and with the
title of Sun First National Bank of Melbourne with corporate headquarters in Melbourne. The subject application rests upon an agreement executed between the
proponent banks, incorporated herein by reference the
same as if fully set forth.
Merging Bank, a subsidiary of the third largest commercial banking organization headquartered within the
state of Florida, Sun Banks of Florida, Inc., Orlando,
Fla., received its charter as a national banking association on November 13, 1958, and as of September
30, 1976, held total deposits of $24.7 million.
Charter Bank, also a subsidiary of Sun Banks of Florida, Inc., was established de novo by its bank holding
company parent in 1973. As of September 30, 1976,
Charter Bank's total deposits aggregated $7.3 million.
Inasmuch as both Merging Bank and Charter Bank
are affiliated with the same multi-bank holding company, approval of this proposal would have no adverse

$31,373,000
10,133,000

In
To be
operation operated
3
1
A

41,506,000

effect upon competition. Additionally, it appears that
the proposal is in compliance with the newly effective
Florida state branching statutes.
The effect of this corporate reorganization should be
to cause certain operating efficiencies and produce
additional banking services, such as trust and an increased lending capacity, offered at more convenient
locations. Considerations relating to convenience and
needs benefits are, therefore, deemed to be consistent
with approval.
The financial and managerial resources of both
Merging Bank and Charter Bank are satisfactory and
future prospects of the banks are regarded as favorable.
Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that this application is in the public interest and
should be, and hereby is, approved.
April 25, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are both wholly-owned subsidiaries of the same bank holding company. As such,
their proposed merger is essentially a corporate reorganization and would have no effect on competition.

THE FIRST NATIONAL BANK OF ALLENTOWN,
Allentown, Pa., and The Northampton National Bank of Easton, Easton, Pa.
Banking offices
Names of banks and type of transaction

Total
assets *

The Northampton National Bank of Easton, Easton, Pa. (5118), with
was purchased June 10, 1977, by The First National Bank of Allentown, Allentown, Pa.
(373), which had
After the purchase was effected, the receiving bank had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency by The First National Bank of Allentown, Allentown, Pa. ("FNB"), the purchasing bank, requesting
prior permission to purchase the assets and assume
the liabilities of The Northampton National Bank of Easton, Easton, Pa. ("Northampton N/B"), the selling
bank. The subject application rests upon an agree* Asset figures are as of call dates immediately before and after
transaction.



In
To be
operation operated

$ 38,049,000

5

599,027,000
656,836,000

21
26

ment executed between the proponent banks which is
incorporated herein by reference, the same as if fully
set forth.
FNB received its charter as a national banking association on April 8, 1864, and as of December 31,1976,
had total deposits of $541.3 million.
Northampton N/B was chartered on April 30, 1898,
and at year-end 1976, the Selling Bank's deposits aggregated approximately $35 million.
In addition to its main office in Lehigh County, FNB
operates 16 branches within the county. Two of FNB's
branch offices are domiciled within Northampton

County and one each in Bucks and Berks counties.
Northampton N/B operates its main office and four
branches all within Northampton County. (The main office and two branches of the Selling Bank are located
within the city of Easton.) Selling bank's Bethlehem
Township Office, located slightly outside the northern
limits of the city of Bethlehem, is nearest to any office
of purchasing bank, approximately 5 miles distant.
There are, however, banking offices of competing institutions situated between the closest offices of the proponent banks. The main offices of the proponent
banks are about 17 miles separated. Consequently, an
adequate number of conveniently located banking alternatives are available within this area and approval
of this proposal would have no more than a slightly
adverse effect upon existing competition.
Applicable Pennsylvania state branching statutes
would allow both FNB and Northampton N/B to expand ofe novo into the respective service area of the
other proponent bank. However, given the present
condition of Northampton N/B, its geographical location and provisions of applicable branching statutes
that limit branching to contiguous counties, the potential for competition between selling bank and purchasing bank is slight.
The overall condition of Northampton N/B is regarded by this Office as extremely grave. The serious
problems currently confronting the selling bank are the
result of rapid expansion (especially into real estaterelated ventures) attempts on the part of previous controlling interests. The present owners, who are not professional bankers, while having made noteworthy
progress in improving the condition of the bank since
they gained control in 1974, have not been totally successful in reversing the deteriorating trends present
within Northampton N/B. Although present management is considered capable, the condition of the real
estate industry will preclude an early resolution of the
bank's loan problems. Likewise, an infusion of new
capital funds may temporarily assist the bank to some
degree, however, that tactic most probably would
prove only to be a delaying maneuver. Both the financial and managerial resources of FNB are regarded as
good and FNB's management is considered to be
composed of competent and capable bankers. Those
factors weigh heavily for approval of this application.
Purchasing bank's assumption of selling bank will insure the uninterrupted provision of banking services to
the banking community in the Easton area and new
and expanded banking services will be to the benefit
of the banking public. Considerations relating to convenience and needs benefits also lend weight to approval.
Due to the overall condition of Northampton N/B, as
herein aforenoted, the bank is not considered to be an
effective competitor or a meaningful source of banking
services. Absent consummation of this proposal, the
future prospects of selling bank are highly questionable. The future prospects of FNB, both independently
1

Source: FDIC Summary of Deposits (1976). Figures shown represent only those deposits held at branches in the Bethlehem area, defined as Bethlehem, Fountain Hill and Hellertown.

86



and in conjunction with Northampton N/B, are favorable.
SUMMARY OF REPORT BY ATTORNEY GENERAL
As noted above, applicant's primary service area is Allentown and its suburbs and Bank's primary service
area is Easton. There is an overlap in their service
areas only in the city and surrounding communities of
Bethlehem (1970 population: 72,686), in which Applicant operates three offices, located at distances of 4.5
miles, 5.5 miles, and 6 miles to the west-southwest of
an office at the eastern outskirts of the city operated by
Bank. In addition, Applicant operates an office in the
community of Hellertown, a town contiguous to the
southern portion of Bethlehem. To the extent that the
city of Bethlehem constitutes a separate banking market, a conclusion that appears appropriate at least with
respect to competition for consumer deposits and
loans, the acquisition would have an adverse effect on
competition in this central area of the AllentownBethlehem-Easton SMSA through the elimination of direct competition between Applicant and Bank.
An examination of the Bethlehem banking market indicates, however, that the adverse effect will not be
significant. As shown below, ten banks presently compete in the Bethlehem area.1

Bank
First Valley Bank
Union Bank & Trust Co.
Applicant
Merchants NB of Allentown
Industrial Valley Bank & Tr.
Bank
Bank of Pennsylvania
American Bank & Trust
Philadelphia Savings Fund Society
Savings Fund Society of Germantown
Total

IPC
Total
Demand
Deposits
($ thousands) ($ thousands)
51,729
22,446
6,147
2,759
1,168
264
171
46
0
0
84,730

267,831
130,828
39,333
11,666
5,552
2,548
758
1,592
5,939
3,152
469,199

Since the four largest banks control over 75 percent of
the IPC demand deposits and total deposits in the
Bethlehem area, the market is highly concentrated.
Applicant controls 7.2 percent of the IPC demand deposits and Bank only 0.4 percent and Applicant controls 8.4 percent of the total commercial banks deposits and Bank only 0.5 percent in the Bethlehem
area. Also, there is no evidence of increasing concentration in the area. Bethlehem straddles the line between Lehigh and Northampton counties, making it
possible for many of the large Philadelphia banks
headquartered in Montgomery County (which is contiguous to Lehigh County) to open branches in the western part of Bethlehem, if they so chose. Numerous
such banks have already done so in Allentown. Moreover, there is evidence of vigorous competition for
consumer deposits in the market; free checking accounts prevail and interest rates paid on time deposits

are normally at the legal maximums. Finally, the record
evidences strong competition from thrift institutions in
the area.
The three Pennsylvania cities of Allentown, Bethlehem and Easton and their environs compose the ABE
SMSA (1970 population of nearly 500,000), with Allentown on the west, Bethlehem in the center, and Easton
to the east, ending at the Pennsylvania/New Jersey
state line. The entire SMSA is overly broad to be considered the relevant market. Thirty-six commercial
banks, including Applicant and Bank, compete within
the three-county area embracing the ABE SMSA,2 and
the banking market for the entire SMSA is not highly
concentrated. Applicant controls 19.9 percent of the
total deposits in the market and Bank 1.5 percent.
The proposed acquisition could adversely affect potential competition in the city of Easton by removing a
vehicle for entry by competitors of Applicant. This effect will be slight, however. The remote location of Nor*

thampton County, coupled with its location on the state
line, limits the number of potential entrants because of
Pennsylvania's banking laws limiting branching to contiguous counties. In addition, the capital problems experienced by Bank due to its deficits in recent years
probably lessen Bank's attractiveness as an acquisition.
In sum, the proposed acquisition would have an adverse effect on actual competition and a slightly adverse effect on potential competition.
Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that this application is in the public interest and
should be, and hereby is, approved.
April 15, 1977.

2

*

The three counties are Lehigh, Northampton and Carbon.

*

VALLEY NATIONAL BANK,
Passaic, N.J., and Bankers National Bank, Elmwood Park, N.J.
Banking offices
Total
assets *

Names of banks and type of transaction

Bankers National Bank, Elmwood Park, N.J. (11543), with
was purchased June 17, 1977, by Valley National Bank, Passaic, N.J. (15790), which had
After the purchase was effected, the receiving bank had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency by Valley National Bank, Passaic, N.J.
("VNB"), the assuming bank, seeking prior permission
to purchase the assets and assume the liabilities of
Bankers National Bank, Elmwood Park, N.J. ("Bankers
N/B"), the selling bank. The subject application rests
upon an agreement executed between the proponent
banks, incorporated herein by reference the same as if
fully set forth.
VNB was organized as a national banking association on March 10, 1970, and as of December 31, 1976,
had commercial bank deposits aggregating $246.8
million. The assuming bank operates eight banking offices in southern Passaic County and two branches in
eastern Morris County, N.J. (VNB has also received
prior approval of this Office for the establishment of an
office in Bloomfield, Essex County, N.J.)
Bankers N/B received its charter as a national bank
on December 12, 1919, and as of year-end 1976, had
total deposits of approximately $57 million. The selling
bank operates a total of four banking offices, three in
Bergen County and one in Nutley, Essex County, N.J.
The Nutley branch is located only a few hundred feet
from the Bergen County line, and serves both northern
Essex County and southern Bergen County.
* Asset figures are as of call dates immediately before and after
transaction.




$ 63,001,000
276,577,000
353,107,000

In
To be
operation operated

4
10
14

The two proponent banks operate in the densely
populated northeastern New Jersey area, approximately 15 miles from New York City. There are 17 commercial banks operating 67 offices within Passaic
County; of those, 16 are headquartered within the
county. VNB ranks ninth largest of those banks operating within Passaic County, controlling approximately
4.1 percent of total deposits. Following the proposed
acquisition, VNB's rank within Passaic County would
remain unchanged. Bankers N/B is the tenth largest of
24 commercial banks headquartered within Bergen
County; there are 11 additional commercial banks
which operate within Bergen County. Of the total 35
banks operating within Bergen County, Bankers N/B
ranks as the 20th largest and, pro forma, the combined bank would become the tenth largest among the
35 banks.
VNB's main office is approximately 5 miles from the
head office of Bankers N/B. Seven of VNB's branch
offices are located within 9 miles of Bankers N/B's
main office. The closest offices of the proponent banks
are VNB's Allwood Road, Clifton office, and Bankers
N/B's Park Avenue, Nutley office, approximately 2.5
miles apart. There are numerous offices of several
competing banking institutions located in and around
the areas between the assuming bank's and selling
bank's offices. It is, therefore, concluded that the proposed transaction would not eliminate any significant
existing competition, and the overall effect upon existing competition would be only slightly adverse.
87

Applicable New Jersey state branching statutes permit de novo expansion into any municipality (except
those with a population of less than 10,000 inhabitants
wherein the principal office of another bank is located).
This proposal would, therefore, foreclose the possibility of increased competition between the proponent
banks, but that result of the proposal is not considered
competitively significant.
The purchase of Bankers N/B by VNB will result in
the people and businesses in the 11 municipalities
currently served by the selling bank within Bergen
County being served by the facilities of a larger, wellmanaged and financially sound banking institution.
The resultant bank would offer new and expanded
banking services including, but not limited to, Economic Development Authority loans, accounts receivable financing, lease financing and trust services. Ad-,
ditionally, the legal lending limit of the resultant bank
would accommodate the requests and needs of larger
loan demands. Considerations relating to convenience
and needs are, therefore, deemed to be consistent
with approval.
The assuming bank and the selling bank are financially sound institutions that are managed by capable
and competent bankers. Also, the future prospects of
the banks, both independently and jointly, are considered to be favorable.
Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that this application is in the public interest and
should be, and hereby is, approved.
April 22, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
Both Applicant and Bank operate in the densely populated northeastern New Jersey area. The population of
the area, which includes a substantial amount of persons who commute to work in New York City, has been
relatively stable and no significant population changes
are expected in the near future. There are numerous
commercial, industrial and retail facilities located
within the area, and it has become an attractive and
important trading area.

Applicant's main office is located 4.9 miles from
Bank's main office, and seven of Applicant's nine
branch offices are located within 9 miles of Bank's
main office. The closest offices of Applicant (its AlIwood Road, Clifton office) and Bank (its Park Avenue,
Nutley office) are about 2.5 miles apart. However, offices of several banks are located in and around the
areas between Applicant's and Bank's offices. According to the Application, Applicant draws approximately
$4.2 million in deposits (approximately 1.7 percent of
its total deposits) from the 12 communities in Bergen
County from which Bank draws 68 percent of its deposits. It therefore appears that there is some direct
competition between Applicant and Bank which the
proposed acquisition will eliminate.
There are a total of 43 banking organizations operating approximately 200 offices in Bergen and Passaic
counties (an area which overstates the market), including seven of the state's largest institutions, with total
deposits in excess of $500 million. As of June 30,
1976, commercial bank offices located in these two
counties held $5.1 billion in deposits; Applicant held
$226.5 million (4.4 percent) and Bank held $52.7 million (1 percent) of these deposits; the eighth and 15th
largest shares. Thus, the proposed acquisition would
not materially increase banking concentration in the
Passaic County-Bergen County area.
New Jersey law permits de novo branching into any
municipality, except those with a population of less
than 10,000 in which the principal office of another
bank is located. Applicant is capable and appears desirous of expanding into Essex County. As noted
above, it has received approval to open a branch in
Bloomfield, in northeastern Essex County. Bank recently expanded into northeastern Essex County; in
January of this year it opened an office in Nutley in the
extreme northeastern portion of the county. The proposed acquisition eliminates the likely prospect for increased competition between Applicant and Bank in
that area.
We conclude that, overall, the proposed acquisition
would have some adverse effect upon competition.

FIRST NATIONAL BANK OF FLORIDA,
Tampa, Fla., and First Financial Bank of Tampa, Unincorporated area of Hillsborough County, Fla.
Banking offices
Total
assets

Names of banks and type of transaction

First Financial National Bank of Tampa, Unincorporated area of Hillsborough County, Fla.
(16135), with
and First National Bank of Florida, Tampa, Fla. (3497), which had
merged June 30, 1977, under charter and title of the latter bank (3497). The merged bank
at date of merger had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency seeking prior permission to effectuate a
merger of First Financial National Bank of Tampa, Un88



$

In
To be
operation operated

6,019,000
450,196,000
453,983,000

incorporated area of Hillsborough County, Fla. (P.O.
Tampa) ("FFNB"), the merging bank, into First National
Bank of Florida, Tampa, Fla. ("Tampa Bank"), the
charter bank, under the charter and title of First Na-

tional Bank of Florida, Tampa, Fla. The subject application rests upon an agreement executed between the
proponent banks, incorporated herein by reference the
same as if fully set forth.
FFNB was established in 1973 and, as of December
31,1976, had total deposits of $4.4 million.
Tampa Bank received its charter as a national banking association on May 6, 1886, and as of year-end
1976, the charter bank's commercial bank deposits
aggregated $371.5 million.
Both the merging bank and the charter bank share
common ownership and control by First Financial Corporation, Tampa, Fla., a registered multi-bank holding
company. Thus, given the affiliation existent between
the proponent banks, there is no meaningful existing
competition between them, nor is there any potential
for competition in the future. This application is, there-

fore, regarded essentially as a corporate reorganization by First Financial Corporation whereby the parent
bank holding company is consolidating its banking interests.
Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that this application is not adverse to the public
interest, and should be, and hereby is, approved.
April 19, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are both wholly-owned subsidiaries of the same bank holding company. As such,
their proposed merger is essentially a corporate reorganization and would have no effect on competition.

FIRST NATIONAL BANK OF LAKELAND,
Lakeland, Fla., and Second National Bank of Lakeland, Lakeland, Fla.
Banking offices
Names of banks and type of transaction

Total
assets

Second National Bank of Lakeland, Lakeland, Fla. (16561), with
and First National Bank of Lakeland, Lakeland, Fla. (15066), which had
merged June 30, 1977, under charter and title of the latter bank (15066). The merged bank at date of
merger had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency requesting prior permission to effectuate a
merger of Second National Bank of Lakeland, Lakeland, Fla. ("SNB"), the merging bank, and First National Bank of Lakeland, Lakeland, Fla. ("FNB"), the
charter bank, under the charter and title of First National Bank of Lakeland, Lakeland, Fla. The subject application rests upon an agreement executed between
the proponent banks, incorporated herein by reference
the same as if fully set forth.
SNB received its charter as a national banking association on March 11, 1976, and as of December 31,
1976, had total commercial bank deposits aggregating
$1.2 million.
FNB was organized in 1962, and as of the aforenoted date, had total deposits of $45.7 million.
Both FNB and SNB are subsidiaries of First Financial
Corporation, Tampa, Fla., a registered multi-bank holding company. Accordingly, inasmuch as the proponent




$ 2,729,000
47,213,000
49,942,000

In
To be
operation operated
2
3

banks share common ownership and control, there is
no meaningful degree of existing competition between
the two banks, nor is there any potential for such competition in the future. The application is therefore regarded essentially as a corporate reorganization
whereby First Financial Corporation is consolidating its
banking interests. It also appears that the proposal will
be in accord with the newly effective Florida branch
banking statutes.
Therefore, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that this application is in the public interest and
should be, and hereby is, approved.
April 22, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are both wholly-owned subsidiaries of the same bank holding company. As such,
their proposed merger is essentially a corporate reorganization and would have no effect on competition.

89

THE RUSSELL NATIONAL BANK,
Lewistown, Pa., and The Reedsville National Bank, Reedsville, Pa.
Banking offices
Names of banks and type of transaction

Total
assets

The Reedsville National Bank, Reedsville, Pa. (4538), with
and The Russell National Bank, Lewistown, Pa. (10506), which had
merged June 30, 1977, under charter and title of the latter bank (10506). The merged bank
at date of merger had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency seeking his prior permission for a merger of
The Reedsville National Bank, Reedsville, Pa. ("Merging Bank"), into The Russell National Bank, Lewistown,
Pa. ("Charter Bank"), under the charter and title of The
Russell National Bank. The subject application rests
upon an agreement executed between the proponent
banks, incorporated herein by reference the same as if
fully set forth.
Merging Bank received its charter as a national
banking association on March 26, 1891, and as of
September 30, 1976, had commercial bank deposits
aggregating $7.5 million.
Charter Bank commenced operations as a national
bank in 1914, and as of the aforenoted date, held total
deposits of $64.3 million.
Merging Bank operates its sole office in Reedsville,
Mifflin County, Pa. Charter Bank, the largest commercial bank headquartered within Mifflin County, operates a total of five banking offices; its main office and
one branch in Lewistown and one branch in Burnham,
in Mifflin County; and in Mifflin and Thompsontown in
Juniata County. The relevant geographic market (approximated by the whole of Mifflin and Juniata counties) is divided into two segments by Jacks Mountain,
which traverses Mifflin County from the northeast to the
southwest. The Burnham office of Charter Bank is the
most closely situated branch of Charter Bank's operations to Merging Bank's site; approximately 4 road
miles from Reedsville. (Reedsville is located on the
north side of Jacks Mountain, Burnham on the south,
and, although these towns are connected by a good
road, there is considered to be only a small degree of
existing competition between the proponent banks.)
Furthermore, for reasons enunciated below, given the
present condition of Merging Bank, it is conjectural as
to how effective this bank presently competes within
the market.
Although applicable Pennsylvania state branching
statutes would permit Charter Bank to establish a c/e
novo branch in Reedsville, given the small size of the
community, it appears unlikely that Charter Bank
would employ this mode of expansion within the foreseeable future. Also, as outlined in greater detail
herein below, Merging Bank does not possess the
financial and managerial resources to facilitate ate
novo expansion.
Considerations relating to convenience and needs
will have a beneficial effect upon the Reedsville area
through the introduction of new and expanded bank90




In
To be
operation operated

$ 8,299,000
76,275,000
84,600,000

ing services including, but not limited to, complete
trust services, both major bank credit cards will be
available, and an increased legal lending limit.
The present financial condition of Merging Bank is
considered to be critical and there is an immediate
need of competent and capable management. The
previous liberal and unsound lending practices and
overdraft policies are directly responsible for the current problems facing Merging Bank. Charter Bank's
management is considered sound, especially in the installment loan and collection areas. This expertise
should prove to be of particular benefit to Merging
Bank considering its high loan delinquency rate. Also,
Charter Bank's capital position is considered adequate
and capable of absorbing Merging Bank without impairing its own financial well-being. Considerations
with respect to financial and managerial resources are,
therefore, regarded as adding significant weight to approval of this application.
The future prospects of Charter Bank are regarded
as good. The future prospects of Merging Bank, absent this proposed merger, are highly questionable,
and not regarded as favorable. The combination of
Merging Bank with Charter Bank would insure the continued, uninterrupted provision of banking services in
the Reedsville area.
Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that any adverse competitive effects of this proposal are clearly outweighed by considerations relating to convenience and needs benefits, financial and
managerial resources and combined future prospects.
The subject proposal is, therefore, regarded as being
in the public interest and should be, and hereby is,
approved.
April 18, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
Mifflin County (1970 population 45,268) is primarily a
rural and mountainous area located in central Pennsylvania. Lewistown (1970 population 11,098), the county
seat and largest town in Mifflin County, has an economy based on a mix of industry and agriculture. The
town of Reedsville, also in Mifflin County (1970 population 950), is located approximately 5 miles north of Lewistown.
Applicant's main office in Lewistown is located approximately 5 miles from Bank. Its Burnham office is
located approximately 3 miles from Bank, and there
are no bank offices in the intervening area. Lewistown,
Burnham and Reedsville are linked by a major high-

way. It therefore appears that there is a substantial degree of direct competition between Applicant and
Bank which the proposed acquisition will eliminate.
Banking is highly concentrated in Mifflin County. Six
banks operate a total of 13 offices in the county. Applicant is the largest bank in the county, controlling as of
June 30, 1976, 38 percent of the county's commercial
bank deposits. The three largest banks controlled 85
percent, and the four largest controlled 92 percent of
county deposits as of the same date. Bank, the fifth
largest bank in the county, controlled 6 percent of
county deposits. If the proposed acquisition is consummated, Applicant will control 44 percent of total

county bank deposits, the top three banks in the
county will control 91 percent, and the top four will
control 98 percent. (Mifflin County may understate the
market; a market composed of both Mifflin and Juniata
counties might be more appropriate. However, the
proposed acquisition would also materially increase
the high concentration of banking resources. In this
larger area, the top four banks control over 80 percent.
Applicant controls approximately 33 percent - the
largest share - and Bank controls approximately 4 percent of total bank deposits.)
We conclude that the proposed acquisition will have
an adverse effect on competition.

FIRST NATIONAL BANK OF VENICE,
Venice, Fla., and First State Bank of Sarasota County, Unincorporated area of Osprey, Fla.
Banking offices
Total
assets

Names of banks and type of transaction

First State Bank of Sarasota County, Unincorporated area of Osprey, Fla., with
and First National Bank of Venice, Venice, Fla. (15071), which had
merged July 1, 1977, under charter and title of the latter bank (15071). The merged bank
at date of merger had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency seeking prior permission to merge First State
Bank of Sarasota County, Unincorporated area of Osprey, Fla., the merging bank, into First National Bank of
Venice, Venice, Fla., the charter bank, under the charter and title of First National Bank of Venice, Venice,
Fla. The subject application rests upon an agreement
executed between the proponent banks, incorporated
herein by reference the same as if fully set forth.
Merging bank, with total deposits of $4.8 million as
of year-end 1976, was organized in 1974 by directors
of the charter bank.
Charter bank received its charter as a national banking association on March 26, 1963, and as of December 31, 1976, had total deposits of approximately $71
million.
The proponent banks share the same chief execu-




In
To be
operation operated

$ 7,012,000
83,405,000
90,418,000

tive officer, and ten individuals comprise the majority
of each bank's board of directors. Given the common
management, ownership and control of merging bank
and charter bank, there is no significant existing competition, nor does there appear to be any potential for
competition to increase in the foreseeable future between these two banks. Approval of the proposal does
not appear to be violative of applicable state branching statutes.
Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that this application is in the public interest and
should be, and hereby is, approved.
May 2, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed transaction is essentially a corporate reorganization and would have no effect on competition.

91

LANDMARK FIRST NATIONAL BANK OF FORT LAUDERDALE,
Fort Lauderdale, Fla., and Landmark Bank of North Fort Lauderdale, National Association, Fort Lauderdale, Fla.,
and Landmark Bank of Plantation, National Association, Plantation, Fla., and Landmark Bank of West Broward,
National Association, Plantation, Fla., and Landmark Bank at the Ocean, National Association, Fort Lauderdale, Fla.,
and Landmark Bank of Sunrise, National Association, Sunrise, Fla., and Landmark Bank of Pompano Beach, N.A.,
Pompano Beach, Fla.
Banking offices
Names of banks and type of transaction

Total
assets

Landmark Bank of North Fort Lauderdale, National Association, Fort Lauderdale, Fla. (15143),
with
and Landmark Bank of Plantation, National Association, Plantation, Fla. (14802), with
and Landmark Bank at the Ocean, National Association, Fort Lauderdale, Fla. (15213), with
and Landmark Bank of West Broward, National Association, Plantation, Fla. (15859), with
and Landmark Bank of Sunrise, National Association, Sunrise, Fla. (16292), with
and Landmark Bank of Pompano Beach, N.A., Pompano Beach, Fla. (16574), with
and Landmark First National Bank of Fort Lauderdale, Fort Lauderdale, Fla. (14376), which
had
merged July 1, 1977, under charter and title of the latter bank (14376). The merged bank
at date of merger had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency requesting prior permission to effectuate a
merger of Landmark Bank of North Fort Lauderdale,
National Association, Fort Lauderdale, Fla. ("NFL
Bank"); Landmark Bank of Plantation, National Association, Plantation, Fla. ("Plantation Bank"); Landmark
Bank at the Ocean, National Association, Fort Lauderdale, Fla. ("Ocean Bank"); Landmark Bank of West
Broward, National Association, Plantation, Fla. ("West
Broward Bank"); Landmark Bank of Sunrise, National
Association, Sunrise, Fla. ("Sunrise Bank"), and; Landmark Bank of Pompano Beach, N.A., Pompano Beach,
Fla. ("Pompano Beach Bank") (collectively, "Merging
Banks"), into Landmark First National Bank of Fort
Lauderdale, Fort Lauderdale, Fla. ("FNB"), the charter
bank, under the charter and title of Landmark First National Bank of Fort Lauderdale, Fort Lauderdale, Fla.
The subject application rests upon an agreement executed between the proponent bainks, incorporated
herein by reference the same as if fully set forth.
NFL Bank was organized as a national banking association on June 11, 1963, and now has commercial
bank deposits totaling $53.3 million.1
Chartered as a national bank on January 2, 1957,
Plantation Bank now has total deposits of $43.2 million.
Ocean Bank was organized in 1963, and the bank's
total deposits are currently $25.1 million.
1

All deposit data are as of September 30, 1976.

92



In
To be
operation operated

$ 74,554,000
50,256,000
31,282,000
33,556,000
18,969,000
4,321,000
316,751,000
529,662,000

West Broward Bank currently has deposits of $24.5
million.
Sunrise Bank commenced operations in 1963, and
its total commercial bank deposits are now $13.6 million.
Pompano Beach Bank, with total deposits of $3.4
million, is the smallest of the Merging Banks.
Charter bank became a national banking association on March 15, 1937, and now has deposits of approximately $207 million.
All of the Merging Banks and the charter bank are
affiliated with the eighth largest holding company
headquartered in Florida, Landmark Banking Corporation, Fort Lauderdale, Fla. Accordingly, the subject application is essentially regarded as a corporate reorganization whereby Landmark Banking Corporation is
consolidating its banking interests. Also, the pro forma
result of this proposal appears to be consistent with
the latest amendments to the Florida state banking
statutes.
This application is, therefore, regarded by the Office
of the Comptroller of the Currency to be in the public
interest and should be, and hereby is, approved.
May 11, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are wholly-owned subsidiaries of
the same bank holding company. As such, their proposed merger is essentially a corporate reorganization
and would have no effect on competition.

SUN FIRST NATIONAL BANK OF ORLANDO,
Orlando, Fla., and Sun Bank of South Orlando, National Association, Orlando, Fla., and Sun Bank of College Park,
National Association, Orlando, Fla., and Sun Bank of East Orlando, National Association, Orlando, Fla., and Sun
Bank of Pine Hills, National Association, Unincorporated area of Orange County, Fla., and Sun Bank of Central Park,
National Association, Unincorporated area of Orange County, Fla.
Banking offices
Total
assets

Names of banks and type of transaction

Sun Bank of South Orlando, National Association, Orlando, Fla. (14883), with
and Sun Bank of College Park, National Association, Orlando, Fla. (14675), with
and Sun Bank of Pine Hills, National Association, Unincorporated area of Orange County,
Fla. (14892), with
and Sun Bank of Central Park, National Association, Unincorporated area of Orange County,
Fla. (15803), with
and Sun Bank of East Orlando, National Association, Orlando, Fla. (15062), with
and Sun First National Bank of Orlando, Orlando, Fla. (14003), which had
merged July 1, 1977, under charter and title of the latter bank (14003). The merged bank
at date of merger had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency seeking prior permission to merge Sun Bank
of South Orlando, National Association, Orlando, Fla.
("South Orlando Bank"); Sun Bank of College Park,
National Association, Orlando, Fla. ("College Park
Bank"); Sun Bank of Pine Hills, National Association,
Unincorporated area of Orange County, Fla. ("Pine
Hills Bank"); Sun Bank of Central Park, National Association, Unincorporated area of Orange County, Fla.
("Central Park Bank"); and Sun Bank of East Orlando,
National Association, Orlando, Fla. ("East Orlando
Bank") (collectively, "Merging Banks"), into Sun First
National Bank of Orlando, Orlando, Fla. ("Charter
Bank"), under the charter and title of Sun First National
Bank of Orlando, Orlando, Fla. The subject application
rests upon an agreement executed between the proponent banks, incorporated herein by reference the
same as if fully set forth.
South Orlando Bank was organized in 1959, and as
of September 30, 1976, held total commercial bank
deposits of $46.5 million.
Chartered as a national banking association on September 30, 1952, College Park Bank now has deposits
of approximately $38 million.
Pine Hills Bank has deposits of about $30 million,
and was chartered on March 31, 1960.
Central Park Bank, with deposits of $19.9 million, is
the smallest and youngest of the Merging Banks, having been organized on March 4, 1969.

In
To be
operation operated

$ 56,405,000
47,041,000

3
1

35,892,000

2

26,457,000
40,036,000
380,348,000

1
2
1
10

587,925,000

East Orlando Bank was chartered as a national bank
on February 25, 1963, and has deposits of $33.9 million.
As is the case with each of the Merging Banks,
Charter Bank, with deposits of $255.8 million, is a
wholly-owned subsidiary of the third largest bank holding company headquartered in Florida, Sun Banks of
Florida, Inc., Orlando, Fla., and serves as the lead
bank for its parent corporation. Accordingly, inasmuch
as all of the Merging Banks and Charter Bank share
common ownership and control, there is no meaningful
competition among these banks.
This application is regarded essentially as a corporate reorganization whereby Sun Banks of Florida, Inc.,
is consolidating its banking interests in the Orlando
area, and the proposal appears to be consistent with
the newly effective Florida branch banking statutes.
It is, therefore, the opinion of the Office of the Comptroller of the Currency that this proposal is not adverse
to the public interest and should be, and hereby is,
approved.
February 23, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are all wholly-owned subsidiaries
of the same bank holding company. As such, their proposed merger is essentially a corporate reorganization
and would have no effect on competition.

FIRST PEOPLES NATIONAL BANK OF NEW JERSEY,
Haddon Township (P.O. Westmont), N.J.., and Independent National Bank, Stone Harbor, N.J.
Banking offices
Names of banks and type of transaction

Independent National Bank, Stone Harbor, N.J. (12978), with
and First Peoples National Bank of New Jersey, Haddon Township, (P.O. Westmont), N.J. (399),
which had
merged July 5, 1977, under charter and title of the latter bank (399). The merged bank
at date of merger had




Total
assets

In
To be
operation operated

$ 66,597,000

5

647,731,000

39

715,490,000

44

93

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency seeking prior permission to effectuate a
merger of Independent National Bank, Stone Harbor,
N.J. ("INB"), the merging bank, into First Peoples National Bank of New Jersey, Haddon Township (P. 0.
Westmont), N.J. ("First Peoples"). The subject application rests upon an agreement executed between the
proponent banks which is incorporated herein by reference, the same as if fully set forth.
INB commenced commercial banking operations in
1926 and, as of December 31, 1976, had total deposits of $46.4 million.--In addition to its main office in
Cape May County, INB operates three branches within
Cape May County and one office in Burlington County.
(The merging bank has received prior permission from
this Office to establish an additional office in Cape
May County that, to date, is unopened.)
First Peoples, with year-end 1976 total deposits of
$564.2 million, received its charter as a national banking association on April 25, 1864. The charter bank's
principal area of operation is the Camden County area,
wherein it operates 15 banking offices including its
main office. Presently, First Peoples operates a total of
39 offices in seven central and southern New Jersey
counties and has received permission for the establishment of another office.
As herein aforenoted, with the exception of its Willingboro branch in Burlington County, all of the offices
of INB are in Cape May County, on the southernmost
peninsula of the New Jersey shore. Willingboro, approximately 5 miles east of Philadelphia, serves as a
"bedroom community" for Philadelphia's commuting
work force. Although the closest offices of the proponent banks are only about 0.5 miles apart in Willingboro, with no intervening offices of competing commercial banks, there are numerous alternative sources
of commercial banking services serving this community inasmuch as Willingboro is encompassed within
the Philadelphia-Camden banking market wherein 50
commerical banks operate more than 780 offices.
Also, the charter bank does not presently operate any
offices within Cape May County where INB operates
four offices. It is further noted that INB's Burlington
County and Cape May County service areas are separated by a distance in excess of 60 air miles, and
the main offices of the participating institutions are 80
road miles removed from one another. Consummation
of this proposal would, therefore, have no more than a
slightly adverse effect upon existing competition.
New Jersey state banking statutes make provision
for de novo branch expansion by commercial banks
into any municipality within the state (except for those
municipalities whose population is less than 10,000 inhabitants where the principal banking office of a commercial bank is domiciled). Approval of this proposal
would thus have the effect of foreclosing the development of any competition between the proponent banks
in the future. This foreclosure is not regarded as significant, however, and inasmuch as approval of the proposal would remove home office protection from the
city of Stone Harbor, thereby allowing other commer94



cial banks to branch into the area; the long-term effect
of the transaction may prove to be pro-competitive.
INB's two service areas resulted from a prior merger
of INB and The First National Bank of Stone Harbor,
effective May 3, 1976. The record reflects that, due to
the geographical distance separating INB's one
Burlington County office from the remainder of the
Merging Bank's operation, certain unforeseen operational difficulties have arisen. The charter bank appears to possess the capacity and capability to realize
certain economies of scale through a combined operation and the banking public would be better served
through the provision of banking services at a lower
cost than now charged by INB and by the payment of
a higher return on time and savings deposits. Furthermore, First Peoples has indicated an intention to introduce new and expanded banking services into the
areas currently served by INB. Considerations relating
to convenience and needs benefits are, therefore, regarded as being consistent with approval.
The financial resources of both INB and First Peoples are regarded as generally satisfactory and the
managements of both participating banks are considered to be competent, capable bankers. Also, the future prospects of INB and First Peoples, independently
and combined, are regarded as favorable.
Accordingly, applying the statutory criteria, based
upon the record as compiled and herein summarized,
this application is considered to be in the public interest, and should be, and hereby is, approved.
June 3, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
Applicant operates no offices in the Cape May County
trade area and its closest branch to Bank's Cape May
County service area is approximately 25 miles distant.
However Applicant operates five Burlington County offices, four of which (including a drive-in facility) are located within the town of Willingboro, all within 1 mile of
Bank's single Burlington County office. In addition, five
of Applicant's Camden County offices are located from
approximately 10 to 15 miles of Willingboro. Applicant,
with three offices in Willingboro, held total deposits in
those offices of $32.3 million as of June 30, 1976.
Bank's single Willingboro office has total deposits of
$17.0 million.
Willingboro (population 44,607) is located at the
fringes of the suburban Philadelphia/Camden metropolitan area. According to a 1973 New Jersey Department of Labor and Industry survey, 56 percent of all
Willingboro workers commuted outside of Burlington
County to their place of employment; of these, 49 percent worked in Philadelphia, 18 percent in Camden
County, and 11 percent in the Trenton area. Thus,
while the Philadelphia market has an undeniable impact in Willingboro, only 27 percent of Willingboro's
workers are actually employed in Philadelphia.
In addition to Bank and Applicant, five other commercial banking institutions operate single offices in
the Willingboro market (as defined by Applicant),
which has total deposits of $74.4 million. Thus, Applicant holds 43.4 percent of the total commercial bank-

ing deposits in the Willingboro market and Bank holds
22.8 percent of total deposits.1 While some direct competition in the Willingboro market may be felt from the
large metropolitan areas of Philadelphia and Camden
County, it is clear that Applicant and Bank compete
directly in the Willingboro market at present, and together hold 66.2 percent of commercial banking deposits there. Even allowing for competition in the Willingboro market attributable to these other areas, it still
appears that there is substantial direct competition between the banks at present. In addition, given the
commutation patterns and proximity of the markets it
appears likely that Applicant's Camden County offices
compete to some extent in the relevant market. Concentration in the area banking market, already significant, will increase; at present, the three largest banks
in Camden County control 71.8 percent of total commercial banking deposits in that county. In Camden
and Burlington counties combined, these same three
banks control 52.7 percent of total deposits.
New Jersey law permits de novo branching by com1

Using Burlington County as the relevant market, a measure which
considerably overstates the actual competitive market. Applicant's
market share based on June, 1976 figures was $34.5 million, or 4.6
percent of the total and Bank's share was $17 million or 2.3 percent
of the county total.

mercial banks in any municipality in the state except
for municipalities in which another banking institution
maintains its principal office and whose population is
less than 10,000. Applicant, the 12th largest commercial banking institution in New Jersey, currently competes in the Vineland market in southern New Jersey,
approximately 25 miles from Cape May County, and in
Tuckerton in the southeastern portion of the state, approximately 30 miles from Cape May County. Bank,
operating three offices at present in Cape May County,
holds approximately 9.2 percent of total commercial
banking deposits in the county. Further, Bank has received approval to establish two additional Cape May
County offices and has pending an application for a
third new office. It thus appears that Cape May County
is an attractive area for growth. Applicant, given its
past history of expansion, would be a likely candidate
for de novo entry absent the proposed merger. Therefore, it appears the proposed merger eliminates the
prospect for increased competition from de novo entry
by Applicant in that area.
In sum, overall the proposed acquisition would have
an adverse effect upon competition, particularly in the
Willingboro/Burlington County areas. Obviously, our
concern would be significantly reduced should Applicant spin off the Willingboro branch of Bank while retaining the Bank's Cape May properties.

SOUTHEAST NATIONAL BANK OF BRADENTON,
Bradenton, Fla., and Southeast Bank of West Bradenton, National Association, Unincorporated area of Manatee
County, Fla.
Banking offices
Names of banks and type of transaction

Total
assets

Southeast Bank of West Bradenton, National Association, Unincorporated area of Manatee
County, Fla. (16276), with
and Southeast National Bank of Bradenton, Bradenton, Fla. (14704), which had
merged July 8, 1977, under charter and title of the latter bank (14704). The merged bank
at date of merger had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency requesting prior permission to effectuate a
merger of Southeast Bank of West Bradenton, National
Association, Unincorporated area of Manatee County,
Fla. ("Merging Bank"), into Southeast National Bank of
Brandenton, Brandenton, Fla. ("Charter Bank"), under
the charter and title of Southeast National Bank of
Brandenton, Brandenton, Fla. The subject application
rests upon an agreement executed between the proponent banks, incorporated herein by reference the
same as if fully set forth.
Merging Bank commenced commercial banking operations in 1974 and, as of December 31, 1976, had
total deposits of $4.4 million.
Charter Bank received its charter as a national bank-




$ 5,376,000
87,212,000
92,046,000

In
To be
operation operated
1
1
2

ing association on May 13, 1954, and as of year-end
1976, its total deposits aggregated approximately $75
million.
Both Merging Bank and Charter Bank are subsidiaries of the largest multi-bank holding company
headquartered within the state of Florida, Southeast
Banking Corporation, Miami, Fla. In consideration of
the common ownership and control of the proponent
banks, there is no existing competition, nor any potential for increased competition in the future between the
banks. This application is thus regarded essentially as
a corporate reorganization whereby Southeast Banking Corporation is consolidating its banking interests in
the Bradenton, Fla. area. Furthermore, the proposal
does not appear to be at odds with applicable Florida
state branching statutes.

Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that this application is in the public interest and
should be, and hereby is, approved.
June 7, 1977.

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

THE NATIONAL BANK OF WISCONSIN IN LA CROSSE,
La Crosse, Wise, and Midland National Bank, Milwaukee, Wise.
Banking offices
Names of banks and type of transaction

Total
assets *

Midland National Bank, Milwaukee, Wise. (15510), with
was purchased July 23, 1977, by The National Bank of Wisconsin in La Crosse, La Crosse,
Wise. (7347), which had
After the purchase was effected, the receiving bank had

COMPTROLLER'S DECISION
The Comptroller of the Currency has been requested
to approve a transaction whereby The National Bank of
Wisconsin in La Crosse, La Crosse, Wise. ("Purchasing Bank"), will purchase the assets and assume the
liabilities of Midland National Bank, Milwaukee, Wise.
("Selling Bank" or "MNB"). In addition, Purchasing
Bank will change its corporate title to "First Bank,
(N.A.)," will exercise fiduciary powers and will assume
the trust assets of Selling Bank. The subject application rests upon an agreement executed between the
proponent banks which is incorporated herein by reference, the same as if fully set forth.
MNB was organized as a national bank on May 5,
1965, when it was granted charter number 15510. As
of year-end 1976, the Selling Bank had total deposits
of $337.3 million and ranked as the fourth largest commercial banking institution headquartered within the
state of Wisconsin. MNB does not operate any branch
offices in addition to its main office in Milwaukee, but
the bank presently operates two CBCT's, one in Milwaukee and one in Whitefish Bay. (MNB has received
approval from this Office to operate one other CBCT in
Milwaukee that, to date, is not in operation. Purchasing
Bank also requested permission to operate that CBCT
unit.)
Purchasing Bank, at December 31, 1976, had total
commercial bank deposits of $54.4 million; however, it
is a wholly-owned banking subsidiary of First Bank
System, Inc., Minneapolis, Minn., a registered multibank holding company that controls 86 banks which
have total deposits exceeding $6 billion.
Serious asset problems became critical in MNB during 1976, resulting in a substantial net operating loss
for the year. Most of the losses were attributable to the
real estate loan portfolio. The severity and complexity
of the real estate loan problems, as well as the volatility
of the bank's deposit structure, threatened the MNB's
survival without a massive injection of capital. During
* Asset figures are as of call dates immediately before and after
transaction.



In
To be
operation operated

$402,867,000

1

66,015,000
464,687,000

1

the early months of 1977, efforts by bank management
to secure needed capital were unsuccessful. At the
same time, close monitoring of the bank by the
Comptroller's Office indicated that its condition was
continuing to deteriorate.
An offer has been made to MNB contemplating the
sale of its assets to and the assumption of its liabilities,
including all deposit liabilities, by The National Bank of
Wisconsin in La Crosse. Because of the precarious
financial condition of MNB and the likelihood that a failure immediately to consummate this proposed transaction will result in the probable failure of this Milwaukee institution, with all of the attendant injury to depositors, creditors, and shareholders, the Comptroller has
considered this proposed transaction under the emergency provisions of 12 USC 181 and 1828 (c) (6). Title
12 USC 181 was designed to permit a troubled national bank, such as MNB, heading for a possible insolvency and in the midst of an emergency, to move
swiftly through its board of directors, to sell its assets
to another bank which will also assume its deposit
liabilities. The requirement of shareholder approval of
such an offer or agreement may be specifically waived
by the Comptroller if an emergency is found to exist.
The Comptroller is not required to wait until a bank is
insolvent, but may make such a determination when
the facts demonstrate a combination of circumstances,
less than insolvency, sufficiently serious to require
swift action to consummate the sale.
After consideration of the competitive environment
within the Milwaukee area, existing concentration of
deposits among the larger banks in the community
and the extraordinary financial and managerial resources which will be necessary to sustain the operations of MNB, the Comptroller has determined that the
proposed acquisition and the retention of the existing
office of Selling Bank as a branch of the Purchasing
Bank is consistent with the emergency branching statute of the State of Wisconsin (General Banking Law
221.04 (1) (j)) and 12 USC 36(c). In particular, the
Comptroller has concluded that no bank in the Milwaukee area can properly be considered a prospective
purchaser in these circumstances.

Accordingly, the Comptroller finds that the proposed
transaction will be in accord with all pertinent provisions of applicable Federal and Wisconsin statutes.
The Purchasing Bank, backed by the strength of its
parent holding company, should provide strong financial and managerial resources and insure uninterrupted banking services to all segments of the Milwaukee community. The anticompetitive effects of the proposed transaction, if any, are deemed to be de
minim is.
For the foregoing reasons, Purchasing Bank's application to purchase the assets and to assume the liabilities of MNB as set forth in their agreement is approved; pursuant to 12 USC 181, MNB shareholder
approval of the transaction is waived. Pursuant to 12
USC 1828(c) (6), the Comptroller further finds that

probable failure of MNB requires him to act immediately. The Comptroller thus waives publication of notice, dispenses with solicitation of competitive reports
from other agencies, and authorizes the transaction to
be consummated immediately.
The Comptroller also hereby approves the three
CBCT branches of MNB as CBCT branches of
Purchasing Bank; the change in corporate title of
Purchasing Bank to "First Bank, (N.A.);" the exercise
of fiduciary powers by Purchasing Bank; and the assumption of the trust assets of MNB by Purchasing
Bank.
July 23, 1977.
Due to the emergency nature of the situation, no Attorney General's report was requested.

RAINIER NATIONAL BANK,
Seattle, Wash., and The Sixth Avenue Branch of North Pacific Bank, Tacoma, Wash.
Banking offices
Names of banks and type of transaction

Total
assets *

The Sixth Avenue Branch of North Pacific Bank, Tacoma Wash with
....
was purchased July 29, 1977, by Rainier National Bank, Seattle, Wash. (4375), which had
After the purchase was effected, the receiving bank had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency by Rainier National Bank, Seattle, Wash.
("RNB"), the purchasing bank, seeking prior permission to purchase the assets and assume the liabilities
of Sixth Avenue Branch of North Pacific Bank, Tacoma,
Wash. ("Selling Bank"). The subject application rests
upon an agreement executed between the proponent
banks, incorporated herein by reference the same as if
fully set forth.
RNB, the second largest commercial bank headquartered within the state of Washington, received its
charter as a national banking association on July 21,
1890. As of December 31, 1976, the bank had total
deposits of $2.5 billion and maintained 112 banking
offices throughout the state.
Selling Bank is a state-chartered commercial banking institution which, in addition to its main office in
Tacoma, operates three branches. The Sixth Avenue
Branch of Selling Bank is situated approximately six
blocks west of Tacoma's downtown business district.
At year-end 1976, Sixth Avenue Branch held approximately $1.5 million of Selling Bank's total deposits of
$32 million.
RNB is not presently represented in the Tacoma
banking market (approximated by the whole of Pierce
County) and, inasmuch as the closest office of RNB to
* Asset figures are as of call dates immediately before and after
transaction, branch figures are deposits only.




$
1 508 000
3,010,445,000
3,094,370,000

In
operation

To be
operated

1
121
122

any office of the Selling Bank is almost 8 miles distant,
there is no meaningful existing competition between
the proponent banks. This acquisition is of such cfe
minimus scope that it is tantamount to de novo entry
into the Tacoma banking market by RNB. Additionally,
applicable state statutes prohibit de novo branching
into Tacoma by RNB; thus there is no potential for increased competition to develop between the proponents within the foreseeable future.
RNB proposes to expand upon current banking
services offered to the banking public in the Tacoma
area and will also introduce new banking services to
the present customers of the Sixth Avenue Branch.
The introduction of RNB into Tacoma will also stimulate
the competitive atmosphere within the Tacoma market,
thereby better serving the public.
The financial and managerial resources of both RNB
and Selling Bank are regarded as satisfactory. Likewise, the future prospects of both banks are considered favorable.
Accordingly, applying the statutory criteria, it is the
conclusion of this Office that this proposed transaction
is in the public interest and should be, and hereby is,
approved.
June 20, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
We have reviewed this proposed transaction and conclude that it would not have a substantial competitive
impact.

97

FIRST NATIONAL BANK OF CROSBY,
Crosby, N. Dak., and Columbus National Bank, Columbus, N. Dak.
Banking offices
Names of banks and type of transaction

Total
assets *

Columbus National Bank, Columbus, N. Dak. (15973), with
was purchased Aug. 1, 1977, by First National Bank of Crosby, Crosby, N. Dak. (16661),
which had
After the purchase was effected, the receiving bank had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency by First National Bank of Crosby (organizing), Crosby, N. Dak. ("FNB"), the assuming bank, for
prior permission to purchase the assets and assume
the liabilities of Columbus National Bank, Columbus,
N. Dak. ("Selling Bank"). The subject application rests
upon an agreement executed between the proponent
banks, incorporated herein by reference the same as if
fully set forth.
Selling Bank was granted its charter as a national
banking association by the Comptroller of the Currency on May 25, 1972, and as of December 31,1976,
had total deposits of approximately $3 million.
FNB received preliminary approval to organize on
January 8, 1976. FNB was organized by principals of
Dakota Bancorporation, Rapid City, S. Dak., a registered bank holding company; FNB will serve as the vehicle for the acquisition of Selling Bank by Dakota Bancorporation. The subject purchase and assumption
transaction would therefore have the effect of merely
*Asset figures are as of call dates immediately before and after
transaction.

In
To be
operation operated

$3,260,000

750,000
4,416,000

combining an existing bank with a non-operating institution and as such, without regard to the acquisition of
the surviving bank by Dakota Bancorporation, would
have no adverse effect upon competition. It is noted
that upon consummation of this proposal, Selling Bank
will be liquidated and its banking facility in Columbus
and its paying and receiving station in Lignite, N. Dak.,
will then become paying and receiving stations of
FNB.
Accordingly, applying the statutory criteria, it is the
conclusion of this Office that this application is not adverse to the public interest and should be, and hereby
is, approved.
April 18, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed transaction is part of a plan through
which Columbus National Bank would become a subsidiary of Dakota Bancorporation, a bank holding company. The instant transaction, however, would merely
combine an existing bank with a non-operating institution; as such, and without regard to the acquisition of
the surviving bank by Dakota Bancorporation, it would
have no effect on competition.

THE CENTRAL TRUST COMPANY OF NORTHEASTERN OHIO, N.A.,
Canton, Ohio and The Dime Bank, Canton, Ohio
Total
assets *

Names of banks and type of transaction

The Dime Bank, Canton, Ohio, with
was purchased Aug. 13, 1977, by The Central Trust Company of Northeastern Ohio, N.A.,
Canton, Ohio (76), which had
After the purchase was effected, the receiving bank had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency by The Central Trust Company of Northeastern Ohio, N.A., Canton, Ohio ("Purchasing Bank"), to
purchase the assets and assume the liabilities of The
Dime Bank, Canton, Ohio ("Selling Bank"). The subject
application rests upon an agreement executed between the proponent banks, incorporated herein by
reference, the same as if fully set forth.
* Asset figures are as of call dates immediately before and after
transaction.

98



Banking offices
In
To be
operation operated

$ 33,197,000

4

249,333,000
291,369,000

16
20

Purchasing Bank was chartered in 1863, and is a
wholly-owned commercial banking subsidiary of Central Bancorporation, Cincinnati, Ohio ("Central"), the
eighth largest banking organization headquartered in
Ohio, which controls nine banks with deposits aggregating approximately $1.1 billion. As of December 31,
1976, Purchasing Bank had total deposits of $205.6
million and ranked as the second largest commercial
bank operating within Stark County.
The Dime Bank received its charter as a state banking institution in 1895, and is a wholly-owned subsidiary of Great Lakes Bancshares, Cleveland, Ohio,
also a registered bank holding company. As of calen-

dar year-end 1976, The Dime Bank had total deposits
of $31.3 million and ranked as the seventh largest
commercial bank in Stark County.
Both of the proponent banks are located and operate within the Canton, Ohio SMSA (approximated by
Stark and Carroll counties). The main offices of
Purchasing Bank and The Dime Bank are within blocks
of each other in the downtown business area of the
city of Canton. Additionally, both proponents operate
branches within Belden Village, to the northwest of
Canton, and The Dime Bank maintains a second
branch office only 1 mile southwest of Belden Village.
The Dime Bank's one remaining branch is domiciled in
East Canton, approximately 5 miles from any office of
Purchasing Bank. Although there are intervening and/
or adjoining offices of other competitors within these
relevant service areas, it appears that under normal
circumstances, the proponent banks could be considered as being significant direct competitors. As outlined below, however, the present financial condition of
The Dime Bank greatly mitigates any adverse competitive factors of this proposal and, further, due to the
general condition of The Dime Bank, its position as being a viable competitor within its market is regarded by
this Office as highly conjectural.
The Dime Bank has suffered substantial loan losses
for the past two operating years. At the end of 1975,
the bank charged-off $1.6 million in loan assets and, in
1976, the net charge-off aggregated in excess of $2.5
million. Consequently, The Dime Bank's earnings record sharply declined from a net profit of $126,000 for
1974 to a net deficit of $267,000 for 1975 and a net
loss of $2.1 million at the conclusion of 1976. Because
The Dime Bank has suffered heavy loan losses which
have seriously depleted its capital structure, the bank
currently is only making personal loans and small business loans, thereby severely crippling its ability to adequately meet the credit demands of its service area
and, further, limiting its ability to compete and its
meaningfulness as a viable banking alternative. To further exacerbate the steadily deteriorating situation,
current classified loans represent almost 700 percent
of The Dime Bank's remaining capital and the financial
condition of Great Lakes Bancshares has rendered the
parent bank holding company unable to successfully
augment either its own or its banking subsidiary's capital account. (Of significant additional note, on December 16, 1976, the Federal Deposit Insurance Corporation ("FDIC"), issued a Notice of Intention to Terminate
Insured Status to The Dime Bank. The Superintendent
of Banks for the State of Ohio has certified to this Office that it is his opinion that if the FDIC withdraws depositors' insurance from The Dime Bank, such action
will serve as the impetus for the probable failure of the
bank.)
The financial and managerial resources of the
Purchasing Bank and its parent bank holding company are regarded as satisfactory and will be of sufficient scope to aid The Dime Bank in overcoming its
present weakened status. Furthermore, the ability of
the Purchasing Bank to improve upon the present
banking services offered to customers of The Dime




Bank and the introduction of new banking services will
better serve the banking public in the Canton area.
The future prospects of Purchasing Bank are favorable, as are the future prospects of The Dime Bank
when combined with Purchasing Bank.
Accordingly, applying the statutory criteria, it is the
opinion of this Office that this application is in the public interest and should be, and hereby is, approved.
August 4, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
Canton (population 104,500) is the principal city in
Stark County (population 386,500) and in the Canton
two-county (Stark and Carroll) SMSA (population
410,900). The county's other cities are Massillon (population 30,800), 6 miles west of Canton, and Alliance
(population 24,600), 20 miles northeast of Canton in
the northeast corner of the county. Canton is within
Ohio's heavily industrialized belt. Over 40 percent of
the work force is engaged in manufacturing. Stark
County experienced a 9.4 percent growth in population during the 1960's and 3.8 percent growth during
the 1970's. Ohio's population grew by 9.8 and 1.2 percent during the same periods.
Applicant and Bank are direct competitors. Their
main offices are within a few blocks of each other in
downtown Canton; both have branches in Belden Village just northwest of Canton. Bank has another
branch approximately 1 mile southwest of Belden Village. Bank's remaining branch in East Canton is approximately 5 miles from Applicant's nearest branch.
Although there are intervening or adjacent offices of
other banks in these areas, it appears that the proposed transaction would eliminate a substantial
amount of existing competition.
Eleven banks, which together held total deposits of
$922 million as of June 30, 1976, operate a total of 72
offices in Stark County. They can be divided into three
groups: the four largest (including Applicant) operate
throughout the county; the next three (including Bank)
operate in or near one of the county's three cities; and
the remaining banks are small, rural banks. Banking is
highly concentrated in Stark County; the four largest
banks hold 77.5 percent of Stark County commercial
bank deposits. Applicant is second largest with 21.7
percent; Bank is seventh largest with 3.6 percent. If
this application is approved, Applicant, which would
continue to be the second largest bank in the county,
would control 25.3 percent of county bank deposits,
and concentration among the four largest banks would
increase from 77.5 to 81.1 percent.
Normally, a consolidation such as this one of direct
competitors which eliminated existing competition and
resulted in a significant increase in banking concentration would be deemed to have a significantly adverse
effect upon competition. In view of Bank's condition,
however, the proposed transaction might be justified
under the Bank Merger Act on the ground that its anticompetitive effects are clearly outweighed by its effect
in meeting the convenience and needs of the community. Whether the proposed transaction could be so

99

United States v. Greater Buffalo Press, Inc., 402 U.S.
549, 555 (1971).) We understand that at least two bank
holding companies not represented in Stark County have
considered acquiring Bank but have decided not to do
so in light of its problems.

justified depends upon whether Bank's problems may
be resolved by means short of merger and, if not,
whether there are prospective purchasers whose acquisition of Bank would be less anticompetitive than
the proposed transaction. (See United States v. Third
National Bank in Nashville, 390 U.S. 171 (1968);
*

*

*

GARDEN STATE NATIONAL BANK,
Paramus, N.J., and Shore National Bank, Brick Township, N.J.
Banking offices
Total
assets *

Names of banks and type of transaction

Shore National Bank, Brick Township, N.J. (15913), with
was purchased Aug. 15, 1977, by Garden State National Bank, Paramus, N.J. (15570), which
had
After the purchase was effected, the receiving bank had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency requesting prior consent for Garden State
National Bank, Paramus, N. J. ("Purchasing Bank"), to
purchase the assets and assume the liabilities of
Shore National Bank, Brick Township, N.J. ("SNB"),
the selling bank. The subject application rests upon an
agreement executed between the proponent banks,
incorporated herein by reference the same as if fully
set forth.
Purchasing Bank was granted charter number
15570 as a national banking association on January
19, 1966. As of December 31, 1976, Purchasing
Bank's total commercial bank deposits aggregated
$583.2 million. Purchasing Bank ranks as the ninth
largest commercial banking institution headquartered
within the state of New Jersey. In addition to its main
office in Bergen County, Purchasing Bank operates 13
branches in its home office county, 14 branches in
Hudson County, four in Sussex County, and one office
in Warren County. Also, Purchasing Bank is a subsidiary of Warner Communications, Inc., New York, N.Y.,
a public company primarily engaged in the communications and entertainment business.
SNB commenced operations as a national bank in
1971. As of year-end 1976, SNB had total deposits of
$20.4 million and operated its main office and two
branches in Brick Township.
The main offices of the proponent banks are almost
80 miles apart and the closest offices of the two banks,
Purchasing Bank's Bayonne branch and SNB's main
office, are approximately 55 miles apart. Given the
geographic distance involved, and the presence of numerous, and intervening, banking alternatives, approval of this proposal would not have the effect of
eliminating any meaningful degree of existing competition between Purchasing Bank and SNB.
Applicable New Jersey state branching statutes
would allow the proponent banks to legally expand de
* Asset figures are as of call dates immediately before and after
transaction.

100




In
To be
operation operated

$ 24,369,000

3

665,048,000
724,657,000

30
33

novo into each other's service areas. It does not appear likely that this would occur, however, considering
the distance separating Brick Township from Purchasing Bank's present operations. Also, given SNB's limited financial resources, it does not appear likely that
the selling bank would seek to employ this mode of
expansion into any area currently served by Purchasing Bank. Therefore, the acquisition will not adversely
affect potential competition.
Purchasing Bank intends to offer new and expanded
banking services to the customers of SNB including,
but not limited to, overdraft banking, trust department
services and an expanded credit limit. Considerations
relating to convenience and needs are consistent with
approval.
The financial and managerial resources of Purchasing Bank are regarded as satisfactory and the financial
and managerial resources of SNB are generally satisfactory. The future prospects of proponents, both separately and jointly, are favorable.
Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that this application is not adverse to the public
interest and should be, and hereby is, approved.
July 15, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The parties' main offices are located 78 miles apart
and Applicant's closest branch office is over 50 miles
distant from Bank's closest branch office. It therefore
appears that the two institutions operate in separate
service areas and do not at present compete. Therefore, the proposed acquisition will have no effect on
existing competition.
New Jersey law permits de novo branching into any
municipality in the state except for municipalities in
which another banking institution maintains its principal office and whose population is less than 10,000.
Applicant, which as recently as 1971 was solely a
Bergen County bank operating 11 offices, has undertaken considerable expansion since that time and at
present its branch system spans 52 miles north to

deposits, will not significantly lessen potential competition from combination with a smaller institution in the
county. Therefore the acquisition will not adversely affect potential competition.
We conclude that, overall, the proposed acquisition
would have no adverse effect upon competition.

south and 62 miles east to west. However, in view of
the distance separating Brick Township and
Applicant's markets, it does not appear that Applicant
is a likely potential entrant into Ocean County. Moreover, merger with Bank, the ninth largest institution in
Ocean County with approximately 2 percent of total

SOUTHEAST NATIONAL BANK OF NAPLES,
Naples, Fla., and Southeast Bank of Naples, N.A., Naples, Fla.
Banking offices
Total
assets

Names of banks and type of transaction

Southeast Bank of Naples, N.A., Naples, Fla. (16268), with
and Southeast National Bank of Naples, Naples, Fla. (15967), which had
merged Aug. 15, 1977, under charter and title of the latter bank (15967). The merged bank
at date of merger had

COMPTROLLER'S DECISION

$ 8,251,000
36,159,000
43,548,000

of year-end 1976, the bank had aggregate deposits of
$27.3 million.
Inasmuch as the proponent banks share common
ownership and control, approval of this proposal would
have no adverse competitive consequences. The subject application essentially represents a corporate reorganization whereby SBC is consolidating its banking
interests in the Naples area and, further, is taking advantage of provisions of newly enacted state branching statutes.
Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that this proposal is not adverse to the public
interest and should be, and hereby is, approved.
July 13, 1977.

Application has been made to the Comptroller of the
Currency requesting prior consent to merge Southeast
Bank of Naples, N.A., Naples, Fla. ("Merging Bank"),
into Southeast National Bank of Naples, Naples, Fla.
("Charter Bank"), under the charter and title of Southeast National Bank of Naples, Naples, Fla. The subject
application rests upon an agreement executed between the proponent banks which is incorporated
herein by reference, the same as if fully set forth.
Merging Bank was established de novo in January
1974 by the now defunct Palmer Bank Corporation,
Sarasota, Fla. In January 1976, Southeast Banking
Corporation, Miami, Fla. ("SBC"), the largest multibank holding company headquartered within the state
of Florida, acquired Merging Bank and, as of December 31, 1976, Merging Bank's deposits totaled $8.4
million.
Charter Bank received its charter as a national banking association on May 4, 1972, and commenced operations with the title of Peoples National Bank. Charter
Bank became affiliated with SBC early in 1974 and, as
*

In
To be
operation operated

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

*

*

MERCHANTS AND FARMERS BANK,
Portsmouth, Va., and First National Bank of Tidewater, Norfolk, Va.
Banking offices
Names of banks and type of transaction

Total
assets

Merchants and Farmers Bank, Portsmouth, Va., with
and First National Bank of Tidewater, Norfolk, Va. (15461), which had
merged Aug. 22, 1977, under charter of the latter bank (15461) and title "Dominion National
Bank of Tidewater." The merged bank at date of merger had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency requesting prior permission to merge Mer


In
To be
operation operated

$ 67,117,000
58,222,000
122,246,000

16

chants and Farmers Bank, Portsmouth, Va. ("Merging
Bank"), into First National Bank of Tidewater, Norfolk,
Va. ("Charter Bank"), under the charter of First National Bank of Tidewater, and with the title of "Domin101

ion National Bank of Tidewater". The subject application rests upon an agreement executed between the
proponent banks, incorporated herein by reference the
same as if fully set forth.
Charter Bank was granted charter number 15461 as
a national banking association on December 30, 1964,
and as of December 31, 1976, had total deposits of
approximately $49 million. On March 24, 1960, Charter
Bank became a wholly-owned subsidiary of Dominion
Bankshares Corporation, Roanoke, Va., a registered
multi-bank holding company.
Merging Bank, a state-chartered commercial banking institution, opened for business in 1885 and, as of
year-end 1976, had total deposits of $55.7 million.
Both Charter Bank and Merging Bank are banking
subsidiaries of Dominion Bankshares Corporation,
Roanoke, Va. Due to the existing close affiliation between the proponent banks, approval of this proposal
would result in no adverse competitive impact, nor

produce any adverse impact upon any relevant area of
consideration.
The subject application is therefore regarded essentially as a corporate reorganization whereby Dominion
Bankshares Corporation is consolidating its banking
interests in the hopes of producing a more efficient
and economical operation.
Accordingly, applying the statutory criteria, it is the
conclusion of this Office that this proposal is not adverse to the public interest and should be, and hereby
is, approved.
July 21, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are both wholly-owned subsidiaries of the same bank holding company. As such,
their proposed merger is essentially a corporate reorganization and would have no effect on competition.

FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION,
Ogden, Utah, and First Security Bank of Bountiful, National Association, Bountiful, Utah
Banking offices
Names of banks and type of transaction

Total
assets

First Security Bank of Bountiful, National Association, Bountiful, Utah (15942), with
and First Security Bank of Utah, National Association, Ogden, Utah (2597), which had
merged Aug. 31, 1977, under charter and title of the latter bank (2597). The merged bank
at date of merger had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency requesting prior permission to merge First
Security Bank of Bountiful, National Association, Bountiful, Utah ("Merging Bank"), into First Security Bank of
Utah, National Association, Ogden, Utah ("FSB"), the
charter bank, under the charter and title of First Security Bank of Utah, National Association, Ogden, Utah.
The subject application rests upon an agreement executed between the proponent banks, incorporated
herein by reference the same as if fully set forth.
Merging Bank was chartered on February 7, 1972,
as a wholly-owned subsidiary of First Security Corporation, Salt Lake City, Utah, the oldest operating
bank holding company within the United States. As of
February 28, 1977, Merging Bank had total deposits of
$7.7 million.
FSB received its charter as a national banking association on December 9, 1881, and as of February 28,
1977, had total deposits of $968.5 million.
At the time of Merging Bank's chartering, the home
office protection provisions of state branching statutes

102




$
9,057,000
1,260,413,000
1,268,680,000

In
operation

To be
operated

1
62
63

prevented de novo entry into Bountiful but did not preclude formation of a new bank within the community.
Applicable state statutes also provide that a newly organized bank may not, for a period of 5 years from the
time of its establishment, be sold, merged, or purchased by another bank. Merging Bank has now been
in existence for the necessary 5 years and its holding
company parent is desirous of effectuating a more
profitable and efficient operation through the combination of two of its banking subsidiaries.
Accordingly, this application is considered to be essentially a corporate reorganization and would
produce no apparent adverse effect upon any relevant
area of consideration. The application is thus deemed
to be in the public interest and is, hereby, approved.
July 12, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are both wholly-owned subsidiaries of the same bank holding company. As such,
their proposed merger is essentially a corporate reorganization and would have no effect on competition.

KENTWOOD BANK, N.A.,
Kentwood, Mich., and Kentwood National Bank, Kentwood, Mich.
Banking offices
Total
assets *

Names of banks and type of transaction

Kentwood National Bank, Kentwood, Mich. (16152), with
was purchased Aug. 31, 1977, by Kentwood Bank, N.A., Kentwood, Mich. (16672), which had
After the purchase was effected, the receiving bank had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency by Kentwood Bank, N.A. (organizing),
Kentwood, Mich. ("Purchasing Bank"), to purchase the
assets and assume the liabilities of Kentwood National
Bank, Kentwood, Mich. ("Selling Bank"). The subject
application rests upon an agreement executed between the proponent banks, incorporated herein by
reference the same as if fully set forth.
This Office, on October 20, 1976, granted preliminary approval for the organization of a new national
bank, Kentwood Bank, N.A., Kentwood, Mich. The
Purchasing Bank was organized by principals of DETROITBANK Corporation, Detroit, Mich., a registered
multi-bank holding company, the third largest banking
organization in Michigan, which controls five subsidiary commercial banks whose total deposits aggregate $2.7 billion. To date, Purchasing Bank has no
operating history and its primary significance is to act
as the vehicle for the acquisition of Selling Bank by
DETROITBANK Corporation. (The Federal Reserve
Bank of Chicago, acting pursuant to delegated authority for the Board of Governors of the Federal Reserve
* Asset figures are as of call dates immediately before and after
transaction.

In
To be
operation operated

$5,403,000
2,500,000
6,781,000

System, on July 7, 1977, granted approval of the application by DETROITBANK Corporation, to acquire 100
percent, less directors' qualifying shares, of Purchasing Bank.)
Selling Bank commenced operations as a national
banking association on July 9, 1973, and as of December 31, 1976, the bank had total deposits of approximately $4 million.
Accordingly, consummation of this proposal would
merely combine a non-operating entity with an existing
commercial bank and, as such, would produce no adverse effect upon any relevant area of consideration.
The application is thus deemed to be not adverse to
the public interest and should be, and hereby is, approved.
July 21, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed acquisition is part of a plan through
which Kentwood National Bank would become a subsidiary of DETROITBANK Corporation, a bank holding
company. The instant transaction, however, would
merely combine an existing bank with a non-operating
institution; as such, and without regard to the acquisition of the surviving bank by DETROITBANK Corporation, it would have no effect on competition.

LOS ANGELES NATIONAL BANK,
Los Angeles, Calif., and The Silverlake/Sunset Branch of Hongkong Bank of California, San Francisco, Calif.
Banking offices
Names of banks and type of transaction

Total
assets *

The Silverlake/Sunset Branch of The Hongkong Bank of California, San Francisco, Calif.,
with
was purchased Sept. 1, 1977, by Los Angeles National Bank, Los Angeles, Calif. (16240),
which had
After the purchase was effected, the receiving bank had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency seeking prior permission for Los Angeles National Bank, Los Angeles, Calif. ("LANB"), the purchasing bank, to purchase the assets and assume the
liabilities of the Silverlake/Sunset Branch ("Branch"), of
* Asset figures are as of call dates immediately before and after
transaction, branch figures are deposits only.



In
To be
operation operated

$ 5,097,000
15,027,000
20,335,000

The Hongkong Bank of California, San Francisco, Calif.
("Selling Bank"). The subject application rests upon an
agreement executed between the proponent banks,
incorporated herein by reference the same as if fully
set forth.
LANB received charter number 16240 as a national
banking association on December 11, 1973, and as of
December 31, 1976, had total deposits of approximately $14 million.
Branch has undergone a series of changes during
103

its corporate existence. The office was originally the
main office of an independent bank, Silverlake National Bank, when it commenced operations on September 8, 1964. That bank was consolidated approximately 4 years later with National Bank of Commerce,
Los Angeles, Calif., at which time it became a branch
office of National Bank of Commerce. In December
1970, The Republic National Bank (formerly, National
Bank of Commerce) was purchased by Selling Bank
and Branch has operated as an office of Selling Bank
for the past 6V2 years. As of February 28, 1977, Branch
held total deposits of $4.6 million.
The service area of LANB is the downtown commercial area of the city of Los Angeles. Branch is located
approximately 4 miles northwest of LANB's only office
and there are several conveniently located banking alternatives throughout that heavily populated residential
and commercial area. It is therefore concluded that the
transfer of these assets from one commercial banking
organization to another, currently represented within
the relevant geographic banking market, would have
no significant competitive impact.

Inasmuch as LANB has formed a close association
with the Spanish-speaking groups of the Los Angeles
area and Branch is located in an area where many
Spanish-speaking citizens reside, LANB will be in a
position to better serve the banking needs of the
community with which it identifies, from the acquisition
of its first branch office. Considerations relating to
convenience and needs add additional weight for approval of the application.
The financial and managerial resources of LANB are
regarded as satisfactory and the future prospects of
the bank appear favorable.
Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that this application is in the public interest and
should be, and hereby is, approved.
July 1, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
We have reviewed this proposed transaction and conclude that it would not have a substantial competitive
impact.

PUGET SOUND NATIONAL BANK,
Tacoma, Wash., and Valley National Bank of Auburn, Auburn, Wash.
Banking offices
Names of banks and type of transaction

Total
assets *

Valley National Bank of Auburn, Auburn, Wash. (15233), with
was purchased Sept. 9, 1977, by Puget Sound National Bank, Tacoma, Wash. (12292), which
had
After the purchase was effected, the receiving bank had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency by Puget Sound National Bank, Tacoma,
Wash. ("PSNB"), the purchasing bank, requesting
prior consent to purchase the assets and assume the
liabilities of Valley National Bank of Auburn, Auburn,
Wash. ("VNB"), the selling bank. The subject application rests upon an agreement executed between the
proponent banks which is incorporated herein by reference, the same as if fully set forth.
PSNB received charter number 12292 as a national
banking association on January 2, 1923, and as of December 31, 1976, had total deposits of approximately
$397 million and ranked as the sixth largest commercial bank headquartered in the state of Washington. In
addition to its main office in Tacoma, PSNB operates
31 of its offices in Tacoma and the immediate vicinity
of Pierce County. Additionally, PSNB maintains two
branches in Mason County, one in Lewis County, and
six offices in King County.
VNB commenced commercial banking activities in
* Asset figures are as of call dates immediately before and after transaction.

104




In
To be
operation operated

$ 15,480,000

3

473,639,000
509,462,000

39

42

1963 and, at year-end 1976, the selling bank's deposits totaled $17.3 million. VNB operates all three of
its banking offices in Auburn, approximately 14 miles
northeast of Tacoma and 25 miles northeast of Seattle.
PSNB's Pacific-East Branch is the nearest to an office of VNB, approximately 3 road miles south of VNB's
main office. The second closest office is PSNB's Federal Way Branch, 5 miles to the west of VNB's main
office. One other branch of PSNB is located within the
immediate area, 9 road miles to the northwest of VNB's
North Auburn Branch. Although there are offices of the
proponent banks in relatively close proximity to each
other, the preponderance of VNB's deposits are obtained from the city of Auburn and its immediate vicinity (in Pierce County). PSNB's offices appear to obtain
only a de minimus amount of their deposits from the
immediate Auburn area. Of additional importance,
VNB enjoys home office protection (that would be removed by approval of this application, thereby stimulating the competitive environment within the city of
Auburn) and VNB offices are all in direct competition
with Auburn area branches of the three largest commercial banking institutions headquartered within the
state as well as with branches of two significantly
larger mutual savings banks. It therefore appears that

approval of the subject proposal would not have the
effect of eliminating a significant degree of existing
competition between the proponent banks and, with
the removal of home office protection from Auburn, the
proposal may serve as the genesis for the provision of
additional competition and additional services to the
banking community. Furthermore, due to restrictive
Washington state branching statutes, the potential for
a significant increase in competition between PSNB
and VNB through de novo branch establishment, is
minimal.
PSNB provides a full range of commercial banking
services to its customers. With the additional capabilities of PSNB and the banking services made available
to present customers of VNB in such areas as international banking services, full trust services and a substantially larger legal lending limit, the banking public
should be better served. Considerations relating to
convenience and needs of the community to be
served provide additional weight toward approval of
the application.
The financial and managerial resources of both
PSNB and VNB are regarded as satisfactory and the
future prospects of both institutions, separately and in
combination, are good.
Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that the subject proposal is in the public interest
and should be, and hereby is, approved.
July 1, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
Auburn (1970 population 23,000) is located in southwestern King County, approximately 15 miles from Tacoma and almost 30 miles from Seattle. Its economy is
primarily based on retail and service businesses. According to the application, the prospects for economic
growth in the Auburn area are good.

The closest offices of Applicant (its branch in Pacific, King County) and Bank are only 3 miles apart
and Applicant's two other branches in King County (in
Federal Way and Kent) are within 5.4 and 8.6 miles of
Auburn, respectively. Seven banks operate a total of
20 branches within this immediate area. It therefore
appears that the proposed transaction will eliminate a
substantial degree of direct competition between Applicant and Bank in southwestern King County.
The area within which to assess the competitive effects of the proposed acquisition appears to be southwestern King County and northeastern Pierce County;
an area within a radius of approximately 15 miles of
Bank which would include Tacoma, the region's principal commercial center. Applicant is the largest bank
within that area, controlling 28.6 percent of the total
deposits held by the 16 banks operating there, and
Bank controls approximately 2 percent of those deposits. Banking concentration in the area is substantial; as of June 30, 1976, the four largest banks controlled 72 percent of the area's deposits. Thus, the proposed acquisition would increase Applicant's dominant share of the market's deposits from 28.6 to 30.6
percent, and it would increase concentration among
the four largest banks there from 72 to 74 percent.
Under Washington law, Applicant may not expand
de novo its presence in King County, and Bank may
not expand de novo into Pierce County. Moreover, in
view of its size, Bank is unlikely to expand de novo in
King County outside of Auburn. Hence, it seems that
there is little potential for increased competition between Applicant and Bank through de novo expansion
by either of them.
In sum, the anticompetitive effect of the proposed
acquisition is somewhat mitigated by Bank's size and
the limitations on the potential for increased competition between Applicant and Bank. We conclude that,
overall, the proposed transaction would have an adverse effect upon competition.

CENTURY NATIONAL BANK OF BROWARD,
Fort Lauderdale, Fla., and Century National Bank of Fort Lauderdale, Fort Lauderdale, Fla.
Banking offices
Total
assets *

Names of banks and type of transaction

Century National Bank of Fort Lauderdale, Fort Lauderdale, Fla. (14567), with
and Century National Bank of Broward, Fort Lauderdale, Fla. (14554), which had
merged Sept. 30, 1977, under charter and title of the latter bank (14554). The merged bank
at date of merger had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency asking prior permission to effectuate a
merger of Century National Bank of Fort Lauderdale,
*Asset figures are as of call dates immediately before and after
transaction. Resulting assets represent this merger and the purchase which follows.




$ 88,393,000
128,073,000
306,702,000

In
operation

To be
operated

1
2
3

Fort Lauderdale, Fla. ("Merging Bank"), into Century National Bank of Broward, Fort Lauderdale, Fla. ("Charter
Bank"), under the charter and title of Century National
Bank of Broward. The subject application rests upon an
agreement executed between the proponent banks,
incorporated herein by reference the same as if fully set
forth.
Charter Bank was established in 1928, and is the
oldest commercial bank in Fort Lauderdale. As of De105

cember 31, 1976, Charter Bank had total deposits of
$107.9 million.
Merging Bank opened for business in 1947 and, at
calendar year-end 1976, its deposits totaled $79.1 million.
Both Charter Bank and Merging Bank are subsidiaries of Century Banks, Inc., Fort Lauderdale, Fla., a
registered multi-bank holding company. Inasmuch as
the two proponent banks are commonly owned and
controlled, approval of this proposal would not
produce an adverse impact upon any relevant area of
consideration.
The subject application essentially represents a corporate reorganization whereby Century Banks, Inc., is
realigning and consolidating its banking interests. The
application is therefore deemed to be not adverse to

the public interest and should be, and hereby is, approved.
In a related action of this date, the Office of the
Comptroller of the Currency has approved the application of Charter Bank to purchase the assets and assume the liabilities of two other affiliated banks in the
Broward County area.
August 25, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The banks are all wholly-owned subsidiaries of the
same bank holding company. As such, the proposed
transactions are essentially corporate reorganizations
and would have no effect on competition.

CENTURY NATIONAL BANK OF BROWARD,
Fort Lauderdale, Fla., and Lauderdale Lakes National Bank, Lauderdale Lakes, Fla., and Broward National Bank of
Plantation, Plantation, Fla.
Banking offices
Names of banks and type of transaction

Total
assets *

Lauderdale Lakes National Bank, Lauderdale Lakes, Fla. (15868), with
and Broward National Bank of Plantation, Plantation, Fla. (16171), with
were purchased Sept. 30, 1977, by Century National Bank of Broward, Fort Lauderdale, Fla.
(14554), which had
After the purchase was effected, the receiving bank had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency requesting prior permission for Century National Bank of Broward, Fort Lauderdale, Fla. ("CNB"),
the purchasing bank, to purchase the assets and assume the liabilities of Lauderdale Lakes National Bank,
Lauderdale Lakes, Fla. ("Lauderdale Bank"), and Broward National Bank of Plantation, Plantation, Fla.
("Plantation Bank") (collectively, "Selling Banks"). The
subject application rests upon an agreement executed
between the proponent banks which is incorporated
herein by reference, the same as if fully set forth.
CNB was granted charter number 14554 as a national banking association on December 6, 1946, and
as of December 31, 1976, had total deposits of $107.9
million.
Lauderdale Bank commenced commercial banking
operations in 1971 and, as of calendar year-end 1976,
had total deposits of $39.3 million.
Plantation Bank is only 4 years of age, and is the
smallest of the proponent banks, with total deposits of
$13.6 million.
All three of the banks involved in the subject proposal are banking subsidiaries of the tenth largest

* Asset figures are as of call dates immediately before and aftertransaction. Resulting assets represent this purchase and the preceding
merger.

106



In
To be
operation operated

$ 44,205,000
18,697,000

2
1

128,073,000
306,702,000

3

commercial banking organization headquartered
within the state of Florida, Century Banks, Inc., Fort
Lauderdale, Fla., a registered multi-bank holding company that controls 16 banks with deposits aggregating
$704.5 million.
Due to the common control and ownership existent
among the proponent banks, the combination of CNB
and the Selling Banks would not have any adverse
competitive impact. Also, this proposal appears to be
in accord with Florida's recently effected branching
statutes and the public should be better served
through the stronger resulting institution.
Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that this application essentially represents a corporate reorganization whereby Century Banks, Inc., is
consolidating its banking interests in the Broward
County area and the proposal will result in no adverse
impact upon any relevant area of consideration. The
application is therefore deemed to be not adverse to
the public interest and should be, and hereby is, approved.
August 25, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The banks are all wholly-owned subsidiaries of the
same bank holding company. As such, the proposed
transactions are essentially corporate reorganizations
and would have no effect on competition.

COLONIAL FIRST NATIONAL BANK,
Red Bank, N.J., and The First National Bank of Hamilton Square, Hamilton Square, N.J.
Banking offices
Total
assets

Names of banks and type of transaction

The First National Bank of Hamilton Square, Hamilton Square, N.J. (12646), with
and Colonial First National Bank, Red Bank, N.J. (2257), which had
merged Sept. 30, 1977, under charter and title of the latter bank (2257). The merged bank
at date of merger had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency requesting prior consent to the merger of
The First National Bank of Hamilton Square, Hamilton
Square, N.J. ("FNB"), the merging bank, into Colonial
First National Bank, Red Bank, N.J. ("Colonial"), the
charter bank, under the charter and title of Colonial
First National Bank. The subject application rests upon
an agreement executed between the proponent
banks, incorporated herein by reference the same as if
fully set forth.
FNB was chartered as a national bank on July 1,
1925, and as of December 31, 1976, had total commercial bank deposits of $58.9 million. In addition to its
main office in Hamilton Square, FNB operates two
other banking offices, also domiciled within Mercer
County.
Colonial commenced operations as a national banking association on June 25, 1974, and as of calendar
year-end 1976, had total deposits of $327.2 million. A
wholly-owned subsidiary of Fidelity Union Bancorporation, Newark, N.J., a registered multi-bank holding
company which controls five subsidiary banks with deposits aggregating $1.3 billion, Colonial operates its
head office and 16 branches in Monmouth County and
two branches in northeastern Mercer County.
The closest offices of the proponents are almost 8
miles apart and there is an office of a competing bank
located between those offices of FNB and Colonial. It,
therefore, appears that only a negligible degree of existing competition will be eliminated by approval of this
proposal. Although FNB and Colonial could legally expand de novo into each other's service areas, the likelihood of this occurring appears remote because of
FNB's conservative operating nature and Colonial's reluctance to utilize that expansion technique in the face
of considerable competition from the other, larger
commercial banks in Mercer County.
As aforenoted, FNB has traditionally operated in an
ultra-conservative manner. The bank is located in an
industrial county but FNB makes few commercial
loans. From a review of the merging bank's loan and
investment portfolios, it appears that the bank has operated in a fashion analogous to a savings institution.
(Seventy percent of its loans are in conventional real
estate mortgages and 60 percent of its total deposits
are invested in U.S. government and agency obligations.) Colonial has committed to offer new and expanded banking services to the customers of FNB,
and those services should make FNB a more viable
competitor and a more attractive and meaningful



$ 71,179,000
411,911,000
477,737,000

in
To be
operation operated
3
20
23

banking alternative in Mercer County. Considerations
relating to convenience and needs add weight toward
approval of this application.
The financial and managerial resources of Colonial
are regarded as satisfactory, while the same relevant
factors of FNB are considered to be less than totally
satisfactory. The senior staff of FNB has an average
age of almost 65 years and the President of FNB is 73
years of age and close to retirement. Additionally, five
of nine directors of the bank are over 70 years of age
and there appears to be little provision for adequate
management succession. The management of Colonial, bolstered by that of its parent bank holding company is young, competent and agressive. Colonial appears well able to aid FNB in its management succession problems. Financial and managerial resource
considerations add additional weight for approval.
The future prospects of Colonial are regarded as
good and those of FNB, independent of Colonial, appear to be only fair. In combination, the future prospects of the resulting bank appear more favorable.
Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that this application is in the public interest and
should be, and hereby is, approved.
August 30, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
Mercer County (1970 population 304,000) is located in
central New Jersey on the Pennsylvania border. Its
principal city, Trenton, is the state capital. The economy of the county is based primarily upon industrial
activity, with government and service and research industries accounting for a substantial portion of employment.
The closest offices of Applicant and Bank are 7.6
road miles apart and both of Applicant's Mercer
County branches are within 10 miles of an office of
Bank. There is one office of another bank located in
the area between Applicant and Bank, and there are
competitive alternatives within short distances of the
offices of both Applicant and Bank. According to the
application, there is only a small amount of deposit
and loan overlap between Applicant and Bank. Nevertheless, it appears that the proposed merger will eliminate some existing competition and the potential,
through promotional efforts and branching, for increased competition in the future.
Bank controls approximately 4.3 percent of the commercial bank deposits in Mercer County (an area
which probably overstates the market) and is the
107

eighth largest bank of the 16 banks operating there.
Applicant controls approximately 2.3 percent of the
commercial bank deposits in the county. Therefore, it
does not appear that the proposed merger would

significantly increase banking concentration in the
county.
We conclude that the proposed merger would have
a slightly adverse effect upon competition.

THE FLORIDA FIRST NATIONAL BANK OF PENSACOLA,
Pensacola, Fla., and Florida First National Bank at Brent, Brent (P.O. Pensacola), Fla.
Banking offices
Total
assets

Names of banks and type of transaction

Florida First National Bank at Brent, Brent (P.O. Pensacola), Fla. (14797), with
and The Florida First National Bank at Pensacola, Pensacola, Fla. (5603), which had
merged Nov. 7, 1977, under charter and title of the latter bank (5603). The merged bank
at date of merger had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency requesting prior consent to effectuate a
merger of Florida First National Bank of Brent, Brent
(P.O. Pensacola), Fla. ("Merging Bank"), into The Florida First National Bank at Pensacola, Pensacola, Fla.
("Charter Bank"), under the charter and title of The
Florida First National Bank at Pensacola. The subject
application rests upon an agreement executed between the proponent banks which is incorporated
herein by reference, the same as if fully set forth.
Merging Bank commenced operations in 1955 and,
as of December 31, 1970, held commercial bank deposits aggregating almost $13 million.
Charter Bank was established in 1900 and, at calendar year-end 1976, its deposits totaled $66.4 million.
Both of the proponent banks are banking subsidiaries of the fifth largest registered multi-bank holding
company headquartered in Florida, Florida National

$15,064,000
63,963,000

In
To be
operation operated
o

2

75,855,000

4

Banks of Florida, Inc., Jacksonville, Fla. Accordingly,
due to the element of ownership and control common
to both banks, there is no meaningful competition existent between them nor is there any potential for the
development of competition in the future.
This application is, therefore, regarded as being essentially a corporate reorganization whereby Florida
National Banks of Florida, Inc., is consolidating its
banking interests in the Pensacola area. The subject
application is deemed to be not adverse to the public
interest and should be, and hereby is, approved.
September 19, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are both wholly-owned subsidiaries of the same bank holding company. As such,
their proposed merger is essentially a corporate reorganization and would have no effect on competition.

THE BOATMEN'S NATIONAL BANK OF ST. LOUIS,
St. Louis, Mo., and The National Stock Yards National Bank of National City, National City,
Banking offices
Names of banks and type of transaction

Total
assets *

The Boatmen's National Bank of St. Louis, St. Louis, Mo. (12916), with
purchased, Nov. 14, 1977, part of the assets and part of the liabilities of The National
Stock Yards National Bank of National City, National City, III. (12991), which had
After the purchase was effected, the receiving bank had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency by The Boatmen's National Bank of St. Louis,
St. Louis, Mo. ("Purchasing Bank"), requesting prior
consent to purchase certain of the assets and assume
certain of the liabilities of The National Stock Yards Na* Asset figures are as of call dates immediately before and after transaction.

108



In
To be
operation operated

$511,474,000

2

202,771,000
821,124,000

1
2

tional Bank of National City, National City, III. ("Selling
Bank"). The subject application rests upon an agreement executed between the proponent banks, incorporated herein by reference the same as if fully set
forth.
Purchasing Bank was granted national banking association charter number 12916 on April 9, 1926, and
as of March 31, 1977, had total commercial bank deposits aggregating $432.8 million. Purchasing Bank is

one of 14 banking subsidiaries of Boatmen's Baneshares, Inc., St. Louis, Md., a registered multi-bank
holding company whose banking subsidiaries' deposits total approximately $988 million at the end of
calendar year 1976.
Selling Bank also commenced operations in 1926
and, as of March 31, 1977, the bank's total deposits
were almost $147 million. Selling Bank is domiciled
within the Stock Yards area of National City, III., immediately across the Mississippi River from the city of St.
Louis, Mo., and just north of the city of East St. Louis,
III.
Although both of the proponent banks are located
within the St. Louis banking market, due to the unique
operation conducted by Selling Bank, any competition
existent between Selling Bank and Purchasing Bank is
primarily limited to correspondent banking. Selling
Bank specializes in correspondent banking, and almost 91 percent of its total deposit structure is comprised of correspondent bank accounts. The Selling
Bank does not offer the usual range of commercial
banking services; for instance, it does not offer time
certificates of deposit, real estate loans, business
loans, bank credit cards, nor does it make consumer
loans. The vast preponderance of Selling Bank's correspondent relationships have developed due to the
bank's particular location and immediate accessibility
for transactions directly related to the primary and related businesses of the stock yards; as of December
31, 1976, Selling Bank ranked as the third largest bank
in the St. Louis market with respect to correspondent
balances, holding slightly in excess of 16 percent of
such deposit balances.
Purchasing Bank is a full-service bank that offers a
variety of both commercial and retail services. The
Purchasing Bank does have correspondent banking
accounts; however, these accounts represent less
than 15 percent of its total deposits (approximately 8
percent of the market's "due to" deposits). There is
some degree of direct competition existent between
Selling Bank and Purchasing Bank; however, this is
highly mitigated by the specialized nature of Selling
Bank's operations and, as aforenoted, the bank's location effectively precludes it from being a significant
competitor for the usual range of banking services.




Additionally, the majority stockholders of Selling Bank
on May 16, 1977, irrevocably voted to place the bank
into voluntary liquidation. Thus, there is virtually no
possibility that approval'of this proposal could eliminate any future competition between the two banks.
Approval of this transaction will automatically transfer all existing correspondent accounts of Selling Bank
to Purchasing Bank (all correspondents will, of course,
be free to transfer their accounts from Purchasing
Bank, should they so desire). In transferring these accounts, there should be far less disruption in the marketplace, the correspondent banking staff of Selling
Bank will retain employment, Purchasing Bank will offer a wider range of correspondent services thereby
becoming a more meaningful competitor within this
area of operations, and the banking public will be better served. Considerations relating to convenience and.
needs benefits, therefore add substantial weight toward approval of this application.
The financial and managerial resources of Selling
Bank are regarded as satisfactory and, due to the decision to voluntarily liquidate, the institution has only
limited future prospects. Likewise, the financial and
managerial resources of Purchasing Bank are regarded as satisfactory and the future prospects of the
bank appear favorable.
Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that this application is in the public interest and
should be approved. Therefore, the application of the
Boatmen's National Bank of St. Louis to assume the
correspondent bank deposit liabilities of The Stock
Yards National Bank of National City and to assume
certain related assets, primarily cash and due from
bank balances, investment securities and loans related to the correspondent bank accounts, is hereby
approved.
October 7, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
We have reviewed this proposed transaction and conclude that it would not have a substantial competitive
impact.

109

FIRST NATIONAL BANK AT EAST ST. LOUIS,
East St. Louis, III., and The National Stock Yards National Bank of National City, National City, III.
Banking offices
Total
assets *

Names of banks and type of transaction

First National Bank at East St. Louis, East St. Louis, III. (14127), with
purchased, Nov. 14, 1977, part of the assets and part of the liabilities of The National
Stock Yards National Bank of National City, National City, III. (12991), which had
After the purchase was effected, the receiving bank had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency by First National Bank at East St. Louis, East
St. Louis, III. ("FNB"), the purchasing bank, to purchase certain of the assets and assume certain of the
liabilities of The National Stock Yards National Bank of
National City, National City, III. ("Selling Bank"). The
subject application rests upon an agreement executed
between the proponent banks, incorporated herein by
reference the same as if fully set forth.
FNB was issued charter number 14127 as a national
banking association on May 1, 1934, and as of March
31, 1977, had total commercial bank deposits of $43.6
million.
Selling Bank, domiciled within the stock yards area
of National City, III., immediately across the Mississippi
River from the city of St. Louis, Mo., and slightly north
of the city of East St. Louis, III., commenced operations
in 1926 and, at the conclusion of the first quarter of
calendar year 1977, had total deposits of almost $147
million.
Although the proponent banks are separated by a
physical distance slightly less than 2 miles, due to the
highly specialized nature of Selling Bank's operations
(almost 91 percent of the total deposits is comprised
of correspondent bank balances; the bank does not
offer the usual scope of commercial banking services,
such as time certificates of deposit, real estate loans,
bank credit cards, etc.) in conjunction with the location
of Selling Bank's office within the stock yards complex,
there appears to be only de minimus existing competition between the proponents. Additionally, the majority
shareholders of Selling Bank, on May 16, 1977, irrevocably voted to voluntarily liquidate the bank. Thus,
there is no possibility for the development of any future
competition between FNB and Selling Bank.
FNB is a full-service commercial banking institution,
and desires to expand its customer base. FNB has
filed a separate application with this Office to establish
a branch office at the present location of Selling Bank,
thereby continuing banking services to the employees
of the stock yards and immediately surrounding area.
* Asset figures are as of call dates immediately before and after
transaction.

110



In
To be
operation operated

$ 48,881,000

1

202,771,000
58,624,000

1
2

Historically, full-service banking within the stock yards
area has been limited due to the specific nature of the
area and the operating policy of Selling Bank. FNB's
presence in the area will introduce a full-service competitor to the employees-and businesses of the stock
yards, and transacting regular banking business
should become more convenient. Considerations
bearing upon convenience and needs benefits add
weight for approval of this proposal.
The financial and managerial resources of Selling
Bank are satisfactory, and the financial and managerial resources of FNB, while being less than totally
satisfactory, are not inconsistent with approval of this
proposal.
Inasmuch as Selling Bank's stockholders have voted
to voluntarily liquidate the bank, its future prospects
are extremely limited. FNB is located within the decaying downtown section of an economically depressed
city. It is anticipated that FNB's acquisition of certain of
the deposits of Selling Bank and the subsequent establishment of a limited service branch, consistent with
applicable Illinois state branching statutes, will result in
FNB operating on a more profitable basis. Approval of
the subject application therefore gives the appearance
of improving the future prospects of FNB.
Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that this application is in the public interest and
should be, and hereby is, approved. This approval extends only to the assumption of all deposit liabilities,
totally exclusive of any assumption of liability for correspondent bank accounts, and provides for the purchase of assets in an amount equal to the total of all
deposits assumed.
In a related action of this date, this Office has approved an application by Boatmen's National Bank of
St. Louis, St. Louis, Mo., to assume all of the correspondent bank deposit liabilities of Selling Bank, and
to acquire certain related assets.
October 7, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
We have reviewed this proposed transaction and conclude that it would not have a substantial competitive
impact.

THE FISH KILL NATIONAL BANK,
Beacon, N.Y., and The Dover Plains National Bank, Dover Plains, N.Y.
Banking offices
Total
assets

Names of banks and type of transaction

The Dover Plains National Bank, Dover Plains, N.Y. (822), with
and The Fishkill National Bank, Beacon, N.Y. (35), which had
merged Nov. 28, 1977, under charter and title of the latter bank (35). The merged bank at
date of merger had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency requesting prior consent to merge Dover
Plains National Bank, Dover Plains, N.Y. ("DPNB"), the
merging bank, into The Fishkill National Bank, Beacon,
N.Y. ("Fishkill National"), the charter bank, under the
charter and title of The Fishkill National Bank, Beacon,
N.Y. The subject application rests upon an agreement
executed between the proponent banks, incorporated
herein by reference the same as if fully set forth.
DPNB received its charter as a national banking association on February 18, 1865, and as of December
31, 1976, had total commercial bank deposits aggregating $9.1 million. The merging bank operates two offices in Dutchess County, with its branch office in
Wingdale.
The charter bank began operations in 1863, and operates its main office and three branches in Dutchess
County. As of year-end 1976, Fishkill National had total
deposits of $36.7 million.
The main offices of DPNB and Fishkill National are
almost 25 miles apart and the closest offices of the
proponent banks are separated by a distance of approximately 15 miles. Given the geographic distance
separating the two institutions and the presence of
other banking alternatives in close proximity to both
DPNB and Fishkill National, approval of this proposal
would not have the effect of eliminating any meaningful
degree of existing competition between the two banks.
Additionally, the potential for increased competition
between the merging bank and charter bank appears
to be minimal.

In
To be
operation operated

$11,045,000
45,703,000
56,748,000

At the present time, DPNB does not offer trust services to its banking customers. Inasmuch as the charter
bank does possess trust powers, this service will be
extended to the customers of DPNB. Other banking
services not currently offered by DPNB, such as automatic savings plans, credit cards, mortgage servicing
and term savings accounts, will also be introduced
into the area now served by DPNB. Considerations relating to convenience and needs of the banking community to be served add additional weight toward approval of this application.
The financial and managerial resources of both
DPNB and Fishkill National are regarded as generally
satisfactory. Of particular note, however, is the fact
that the chief executive officer of DPNB is well beyond
normal retirement age and is presently in ill health.
Fishkill National's senior management is regarded as
capable and well prepared to direct the operations of
the merging bank. Thus, the future prospects of DPNB
are enhanced by the combination of the proponent
banks.
Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that this application is in the public interest and
should be, and hereby is, approved.
October 28, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
We have reviewed this proposed transaction and conclude that it would not have a substantial competitive
impact.

FLAGSHIP NATIONAL BANK OF MIAMI,
Miami, Fla., and Flagship National Bank of Westland, Hialeah, Fla.
Banking offices
Names of banks and type of transaction

Total
assets

Flagship National Bank of Westland, Hialeah, Fla. (15944), with
and Flagship National Bank of Miami, Miami, Fla. (15411), which had
merged Nov. 30, 1977, under charter and title of the latter bank (15411). The merged bank at date of
merger had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency requesting prior permission to merge Flagship National Bank of Westland, Hialeah, Fla. ("Merg


In
To be
operation operated

$ 27,334,000
90,333,000
117,667,000

ing Bank"), into Flagship National Bank of Miami,
Miami, Fla. ("Charter Bank"), under the charter and title of Flagship National Bank of Miami. The subject application rests upon an agreement executed between
111

the proponent banks which is incorporated herein by
reference, the same as if fully set forth.
Charter Bank has operated under national banking
association charter number 15411 since 1964. As of
March 31, 1977, Charter Bank had total commercial
bank deposits aggregating $71.9 million.
Merging Bank was established de novo in 1972 by
its parent bank holding company, Flagship Banks,
Inc., Miami, Fla. At the end of the first quarter of 1977,
Merging Bank had total deposits of almost $24 million.
Both of the proponent banks are subsidiaries of
Flagship Banks, Inc., and, accordingly, because of
their common ownership and control, there is no
meaningful competition existent between the two subject institutions.

This application must be regarded essentially as a
corporate reorganization whereby Flagship Banks, Inc.
is consolidating a portion of its commercial banking interests in Dade County, Fla.
It is, therefore, the opinion of the Office of the Comptroller of the Currency that this proposal is not adverse
to the public interest and should be, and hereby is,
approved.
October 27, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are both wholly-owned subsidiaries of the same bank holding company. As such,
their proposed merger is essentially a corporate reorganization and would have no effect on competition.

VIRGINIA NATIONAL BANK,
Norfolk, Va., and Virginia National Bank/Fairfax, Springfield, Va.
Banking offices
Total
assets

Names of banks and type of transaction

Virginia National Bank/Fairfax, Springfield, Va. (16398), with
and Virginia National Bank, Norfolk, Va. (9885), which had
merged Nov. 30, 1977, under charter and title of the latter bank (9885). The merged bank
at date of merger had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency requesting prior permission to effectuate a
merger of Virginia National Bank/Fairfax, Springfield,
Va. ("Merging Bank"), into Virginia National Bank, Norfolk, Va. ("VNB"), the charter bank, under the charter
and the title of Virginia National Bank. The subject application rests upon an agreement executed between
the proponent banks which is incorporated herein by
reference, the same as if fully set forth.
Merging Bank was chartered as a national banking
association on November 15, 1974, and commenced
operations on November 18, 1974. As of June 30,
1977, Merging Bank had total deposits of $11.2 million.
VNB operates under national banking association
charter number 9885, which it has possessed since
November 5, 1910. Through a series of acquisitions
and corporate reorganizations, VNB has grown to be
the second largest commercial banking organization
headquartered within the Commonwealth of Virginia,
having total deposits of $1.7 billion at calendar midyear 1977 (approximately 10 percent of total state deposits).

112




$

11,521,000
2,043,636,000
2,054,628,000

In
To be
operation operated

3
130
133

Both Merging Bank and VNB are wholly-owned (less
directors' qualifying shares) banking subsidiaries of
Virginia National Bankshares, Inc., Norfolk, Va., a registered multi-bank holding company. Accordingly, this
proposal is regarded as essentially a corporate reorganization whereby Virginia National Bankshares is
consolidating its banking interests in the hopes of producing a more efficient and economical operation
while also better serving the banking public through
such matters as greater depth of organization, a larger
capital base (with the resultant larger lending limit),
and stronger management direction.
Thus, applying the statutory criteria, it is the conclusion of the Office of the Comptroller of the Currency
that this proposal is not adverse to the public interest
and should be, and hereby is, approved.
October 20, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
We have reviewed this proposed transaction and conclude that it is essentially a corporate reorganization
and would have no effect on competition.

FLORIDA COAST BANK OF MARGATE,
Margate, Fla., and Florida Coast Bank of Coral Springs, National Association, Coral Springs, Fla.
Banking offices
Total
assets

Names of banks and type of transaction

Florida Coast Bank of Margate, Margate, Fla., with
and Florida Coast Bank of Coral Springs, National Association, Coral Springs, Fla. (16386),
which had
merged Dec. 1, 1977, under charter and title of the latter bank (16386). The merged bank
at date of merger had

COMPTROLLER'S DECISION

$27,529,000

1

15,925,000

2

43,454,000

northwestern portion of Broward County, Fla., and both
banks are banking subsidiaries of Florida Coast
Banks, Inc., Pompano Beach, Fla., a registered multibank holding company that controls five commercial
banks. Due to the common ownership and control of
Charter Bank and Merging Bank by Florida Coast
Banks, Inc., this application is regarded as essentially
a corporate reorganization, and approval of this proposal would result in no adverse impact upon any relevant area of consideration.
Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that this application is not adverse to the public
interest and should be, and hereby is, approved.
October 11, 1977.

Application has been made to the Comptroller of the
Currency requesting prior consent to effectuate a
merger of Florida Coast Bank of Margate, Margate,
Fla. ("Merging Bank"), into Florida Coast Bank of Coral
Springs, National Association, Coral Springs, Fla.
("Charter Bank"), under the charter and title of Florida
Coast Bank of Coral Springs, National Association,
with corporate headquarters in Margate, Fla. The subject application rests upon an agreement executed between the proponent banks which is incorporated
herein by reference, the same as if fully set forth.
Charter Bank operates under national banking association charter number 16386, as granted by the Office
of the Comptroller of the Currency on October 1, 1974.
As of December 31, 1976, the Charter Bank had total
deposits aggregating $13.8 million.
Merging Bank is a state-chartered, non-member,
commercial banking institution that commenced operations in 1972 and, as of calendar year-end 1976, had
total deposits of $7.8 million.
Both of the proponent banks are located in the
*

In
To be
operation operated

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

*

*

TNB NATIONAL BANK,
Circleville, Ohio, and The Third National Bank of Circleville, Circleville, Ohio.
Banking offices
Total
assets *

Names of banks and type of transaction

The Third National Bank of Circleville, Circleville, Ohio (2817), with
was purchased Dec. 1, 1977, by TNB National Bank, Circleville, Ohio (16685), which had
After the purchase was effected, the receiving bank had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency by TNB National Bank (organizing), Circleville, Ohio ("Purchasing Bank"), to purchase the assets and assume the liabilities of The Third National
Bank of Circleville, Circleville, Ohio ("Selling Bank").
The subject application rests upon an agreement executed between the proponent banks, incorporated
herein by reference the same as if fully set forth.
Purchasing Bank was granted preliminary approval
to organize by this Office on September 20, 1977.
* Asset figures are as of call dates immediately before and after
transaction.



In
To be
operation operated

$ 26,154,000
180,000
29,116,000

Sponsored by principals of First National Cincinnati
Corporation, Cincinnati, Ohio ("Applicant"), a registered bank holding company, Purchasing Bank, to
date, has no operating history.
Selling Bank was chartered as a national banking
association on November 13, 1882, and operates under charter number 2817. As of June 30, 1977, Selling
Bank held total commercial bank deposits aggregating
approximately $24 million, at its main office and two
branches.
On October 31, 1977, the Board of Governors of the
Federal Reserve System approved an application filed
by Applicant pursuant to the dictates of the Bank Holding Company Act of 1956, which sought the Board's
113

prior approval for the acquisition of all of the voting
shares (less directors' qualifying shares) of the successor by merger to Selling Bank. Approval of this application will provide the vehicle for the acquisition of
Selling Bank by Applicant and would result in no adverse effect upon any relevant area of consideration.
Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that this proposal is not adverse to the public
interest and should be, and hereby is, approved.
November 1, 1977.

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

FIRST NATIONAL BANK OF JACKSON COUNTY,
Ocean Springs, Miss., and The Biloxi Branch of Southern National Bank of Hattiesburg, Hattiesburg, Miss.
Banking offices
Names of banks and type of transaction

Total
assets *

The Biloxi Branch of Southern National Bank of Hattiesburg, Hattiesburg, Miss., with
was purchased Dec. 19, 1977, by First National Bank of Jackson County, Ocean Springs, Miss.
(15672), which had
After the purchase was effected, the receiving bank had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency requesting prior permission for First National
Bank of Jackson County, Ocean Springs, Miss.
("Purchasing Bank"), to purchase the assets and assume the liabilities of The Biloxi Branch of Southern
National Bank of Hattiesburg, Hattiesburg, Miss.
("SNB"). The subject application rests upon an agreement executed between the proponent banks which is
incorporated herein by reference, the same as if fully
set forth.
Purchasing Bank has operated under national banking association charter number 15672 since November
21, 1968. As of August 31, 1977, Purchasing Bank
held total commercial bank deposits of $35.5 million.
In addition to its head office in Ocean Springs,
Purchasing Bank operates two branch offices, and has
received permission from this Office to open a third
branch to be located in Gautier, Miss.
On August 15, 1977, the Office of the Comptroller of
the Currency granted prior permission for the proposed merger of Southern National Bank of Hattiesburg, Hattiesburg, Miss. ("SNB"), into Deposit Guaranty National Bank, Jackson, Miss. ("DGNB"). SNB
operated one branch office in Biloxi, Miss, (the subject
of this application), situated approximately 160 miles
from the main office of DGNB, and applicable Mississippi branch statutes (Mississippi Code Annotated,
Section 81-7-7 (1972)), states in relevant part that

In
To be
operation operated

$ 3,457,000
39,182,000
43,242,000

"Branch banks may be established within a radius of
100 miles of the parent bank." It therefore appeared,
prima facie, that retention of the Biloxi branch of SNB
by DGNB would be in violation of applicable state law.
Thus, in approving the merger of SNB and DGNB, the
Comptroller allowed the merger conditioned upon the
disposal of the Biloxi branch of SNB, prior to, or by the
time of, consummation of that transaction. The subject
application arises from the imposition of that condition
and evidences good faith efforts by DGNB to comply
with the Comptroller's condition.
Inasmuch as this application involves the transfer of
slightly less than $3 million in deposit liabilities from
one commercial bank to another, there will be produced no serious anticompetitive effect upon existing
competition. Indeed, the introduction of a new competitor into the Biloxi area should prove to be of benefit
to the banking public, and stimulate the competitive
environment within the growing Biloxi banking market.
The financial and managerial resources of Purchasing Bank are regarded as generally satisfactory, and
the addition of Biloxi branch to Purchasing Bank would
appear to have no detrimental impact upon any relevant area of consideration.
Accordingly, applying the statutory criteria, it is the
conclusion of this Office, that this application is in the
public interest, and should be, and hereby is, approved.
November 17, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL

* Asset figures are as of call dates immediately before and after
transaction, branch figures are deposits only.

114



We have examined the proposal and conclude that
there are no serious anticompetitive effects.

DEPOSIT GUARANTY NATIONAL BANK,
Jackson, Miss., and Southern National Bank of Hattiesburg, Hattiesburg, Miss.
Banking offices
Total
assets

Names of banks and type of transaction

Southern National Bank of Hattiesburg, Hattiesburg, Miss. (15539), with
and Deposit Guaranty National Bank, Jackson, Miss. (15548), which had
merged Dec. 30, 1977, under charter and title of the latter bank (15548). The merged bank
at date of merger had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency seeking prior consent to the proposed
merger of Southern National Bank of Hattiesburg, Hattiesburg, Miss. ("SNB"), the merging bank, into Deposit Guaranty National Bank, Jackson, Miss.
("DGNB"), the charter bank, under the title and charter
of Deposit Guaranty National Bank. The subject application rests upon an agreement executed between the
proponent banks, incorporated herein by reference the
same as if fully set forth.
DGNB was granted national banking association
charter number 15548 on October 8, 1965, and as of
December 31, 1976, the charter bank had total commercial bank deposits of $794.4 million, thereby ranking as the largest commercial bank headquartered
within the state of Mississippi. In addition to its main
office in Jackson, DGNB operates 42 banking offices
in eight western Mississippi counties, 21 of which are
concentrated within the Jackson area of Hinds County.
SNB, the smallest of three commercial banks headquartered in Hattiesburg, with year-end 1976 total deposits of $28.2 million, operates its seven offices in
southeastern Mississippi, six including its main office
within the Hattiesburg area of Forrest County and one
branch in Biloxi, Harrison County, approximately 75
road miles to the south of the merging bank's main
office.
The city of Hattiesburg is located almost 90 miles
southeast of the city of Jackson. The closest offices of
the proponent banks, SNB's offices in Hattiesburg,
and DGNB's office in Monticello, are separated by a
distance slightly in excess of 55 miles. The two banks
appear to have separate and distinct primary service
areas, and due to the geographic distance separating
DGNB from SNB, and the presence of numerous banking alternatives within the area served by both of the
proponent banks, approval of this proposal does not
give the appearance of eliminating a significant degree of existing competition. Although there is some
potential for increased competition between DGNB
and SNB via future de novo branching, this factor appears to be of little significance and presents no bar to
approval of the application.
The record reflects that, due to its limited resources,
SNB has been, and is becoming increasingly, unable
to serve all of the needs of the banking community that




$

33,064,000
1,127,185,000
1,157,286,000

In
To be
operation operated
6
42
48

it serves. The Hattiesburg area is one of progressive
growth, and the need for additional specialized banking services is increasing in demand. Consummation
of this proposal will result in a larger legal lending limit
for the successor to SNB. The introduction of new and
expanded banking services will better serve the banking public and result in SNB's successor becoming a
more viable and meaningful banking alternative in the
Hattiesburg community. Considerations relating to aspects of convenience and needs are deemed to be
consistent with approval.
The financial and managerial resources of both
DGNB and SNB are regarded as satisfactory. Likewise, the future prospects of the subject institutions,
both independently and in combination, appear favorable.
As aforestated, SNB operates one branch office in
Biloxi, Miss. The Biloxi branch is approximately 160
miles from the main office of DGNB, and applicable
Mississippi branch statutes, Mississippi Code Annotated, Section 81-7-7 (1972), states in relevant part that
"Branch banks may be established within a radius of
100 miles of the parent bank." It therefore appears,
prima facie, that retention of the Biloxi office by DGNB
may be in contravention with applicable state law. It is,
thus, the conclusion of the Office of the Comptroller of
the Currency that this proposal is not adverse to the
public interest and should be, and hereby is, approved. This approval is conditioned upon the disposal of the Biloxi branch office of SNB prior to, or by
the time of, consummation of this transaction. Approval
of the subject application expressly precludes permission for DGNB to operate the Biloxi branch of SNB as
a branch of DGNB.
There were protests to the application received from
competing commercial banks objecting to the application on the basis of the apparent violation of Mississippi state branching statutes that would result if
DGNB were allowed to retain the Biloxi branch of SNB.
Additionally, one bank requested a hearing to address
the branch issue. In light of the condition imposed
herein, the requested hearing is deemed unnecessary.
August 15, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
We have reviewed the proposal, and concluded that it
is permissible.

115

THE FLORIDA NATIONAL BANK AND TRUST COMPANY AT MIAMI,
Miami, Fla., and Florida National Bank at Coral Gables, Coral Gables, Fla., and Florida First National Bank at
Opa-Locka, Opa-Locka, Fla.
Banking offices
Total
assets

Names of banks and type of transaction

Florida National Bank at Coral Gables, Coral Gables, Fla. (14497), with
and Florida First National Bank at Opa-Locka, Opa-Locka, Fla. (14895), with
and The Florida National Bank and Trust Company at Miami, Miami, Fla. (13570), which had
merged Dec. 30, 1977, under charter of the latter bank (13570) and title "Florida National
Bank of Miami." The merged bank at date of merger had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency, pursuant to 12 USC 1828(c), requesting
prior consent to merge Florida National Bank at Coral
Gables, Coral Gables, Fla. ("Coral Gables Bank"), and
Florida First National Bank at Opa-Locka, Opa-Locka,
Fla. ("Opa-Locka Bank") (collectively, "Merging
Banks"), into The Florida National Bank and Trust
Company at Miami, Miami, Fla. ("Charter Bank"), under the charter of The Florida National Bank and Trust
Company at Miami, and with the title of "Florida National Bank of Miami." This application rests upon an
agreement executed between the proponent banks,
incorporated herein by reference the same as if fully
set forth.
Coral Gables Bank was granted national banking
association charter number 14497 by this Office on
November 18, 1944. As of February 1, 1977, Coral Gables Bank held total commercial bank deposits of
$71.1 million.
Opa-Locka Bank commenced operations on April
14, 1960, and as of February 1, 1977, its total deposits
were $8.1 million.
Charter Bank is the largest of the three proponent
banks with total deposits of $205.6 million as of February 1, 1977.

$ 94,658,000
10,061,000
279,096,000

In
To be
operation operated
2
1
1

382,767,000

4

Both Merging Banks and Charter Bank are banking
subsidiaries of the fifth largest multi-bank holding company headquartered in the state of Florida, Florida National Banks of Florida, Inc., Jacksonville, Fla. ("FNB").
Accordingly, due to the common ownership and control among the proponent banks, there is no meaningful competition existent among them nor is there any
potential for increased competition in the future. The
subject application is therefore deemed to be essentially a corporate reorganization whereby FNB is combining three of its banks in Dade County, apparently in
accord with provisions of applicable state branching
statutes.
Applying the statutory criteria, it is the conclusion of
the Office of the Comptroller of the Currency that this
application is not adverse to the public interest and
should be, and hereby is, approved.
November 29, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The banks are all wholly-owned subsidiaries of the
same bank holding company. As such, the proposed
transaction is essentially a corporate reorganization
and would have no effect on competition.

PAN AMERICAN BANK OF MIAMI,
MJami, Fla., and Pan American Bank of Dade County, Dade County, Fla., and Pan American Bank of Miami Beach,
Miami Beach, Fla., and Pan American Bank of West Dade, Dade County, Fla., and Pan American Bank of Kendale
Lakes, National Association, Dade County, Fla.
Banking offices
Names of banks and type of transaction

Total
assets

Pan American Bank of Miami, Miami, Fla., with
and Pan American Bank of Dade County, Dade County, Fla., with
and Pan American Bank of Miami Beach, Miami Beach, Fla., with
and Pan American Bank of West Dade, Dade County, Fla., with
and Pan American Bank of Kendale Lakes, National Association, Dade County, Fla. (16442),
which had
merged Dec. 30, 1977, under charter of the latter bank (16442) and title "Pan American
Bank, National Association." The merged bank at date of merger had

COMPTROLLER'S DECISION
Application has been made pursuant to 12 USC
1828(c), to the Comptroller of the Currency requesting
his prior permission to merge Pan American Bank of
116



To be
In
operation operated

$232,132,000
49,101,000
32,248,000
28,748,000

3
1
2
1

18,101,000

1

343,836,000

8

Miami, Miami, Fla. ("Miami Bank"); Pan American Bank
of Dade County, Dade County, Fla. ("Dade County
Bank"); Pan American Bank of Miami Beach, Miami
Beach, Fla. ("Miami Beach Bank"); and Pan American

Bank of West Dade, Dade County, Fla. ("West Dade
Bank") (collectively, "Merging Banks"), into Pan American Bank of Kendale Lakes, National Association,
Dade County, Fla. ("Charter Bank"), under the charter
of Pan American Bank of Kendale Lakes, National Association, with the title of "Pan American Bank, National Association" and with corporate headquarters in
Maimi, Fla. The subject application rests upon an
agreement executed between the proponent banks
which is incorporated herein by reference, the same
as if fully set forth.
Miami Bank is the largest state-chartered commercial banking institution headquartered in Florida, with
year-end 1976 total deposits of $178.9 million.
Likewise, Dade County Bank, Miami Beach Bank,
and West Dade Bank are all state-chartered banks,
with December 31,1976 total deposits of $50.6 million,
$27.1 million, and $19.5 million, respectively.
Charter Bank was granted national banking association charter number 16442 by this Office on March 13,
1975. As of the aforementioned date for banking data,
Charter Bank's total deposits were $4.6 million.
All of the Merging Banks and Charter Bank are
banking subsidiaries of the 11th largest multi-bank
holding company headquartered in Florida, Pan
American Bancshares, Inc., Miami, Fla. This application is, therefore, deemed to be essentially a corporate
reorganization initiated by the parent bank holding
company inasmuch as Pan American Bancshares, Inc.
exercises a controlling influence over each of the proponent banks. The combination of these commonly
owned and controlled affiliates will merely combine a
portion of the holding company's banking interests in
Dade County and will have no adverse effect upon
competition. Additionally, the effects of this proposal
appear to be in compliance with applicable state
branching statutes, and the economies of scale to be
realized, pro forma, should better serve the needs of
the banking public within portions of Dade County.
The management of Pan American Bancshares,
Inc., and its banking subsidiaries is regarded as satisfactory. The financial resources of Charter Bank are
satisfactory, although the financial resources of some
of the Merging Banks, especially Miami Bank, are considered to be somewhat less than totally satisfactory.
As has been the case with many Florida banks,

Miami Bank has felt the effects of the recently-past depressed economy in Florida, particularly with respect
to the real estate industry. The vast majority of Miami
Bank's classified assets are real estate-related, and
this Office has substantial concern with respect to
allowing the largest state-chartered commercial bank
in Florida to convert to a national banking association
charter when the effect upon Charter Bank will be to
greatly increase its level of classified assets. Therefore, while this Office does not regard the financial resources of the resulting bank to be inadequate, the Office does consider it necessary and appropriate to institute measures to insure the financial well-being and
enhance the favorable future prospects of the new
bank resulting from the subject proposal.
Therefore, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that this application is in the public interest and
should be, and hereby is, approved, subject to the following conditions. Prior to consummation of this proposal, the parent holding company, Pan American
Bancshares, Inc. shall set aside in a separate capital
reserve, an amount equal to at least $2.5 million for a
period of 2 years subsequent to, and concurrent with,
the date of this statement. Such capital reserve will
represent a segregation of net worth and will not include any element of known loss. However, that capital
reserve will be available for placement of equity capital
into the resulting bank for indeterminable or unforeseen shrinkage in the book value of classified assets.
The placement of such equity capital in the resulting
bank by the holding company shall be upon any such
written request by the Office of the Comptroller of the
Currency and in the full amount(s) so requested by this
Office. At the end of 2 years, the holding company will
have the option to return the remaining portion of the
capital reserve to the equity capital account from
which the amount was originally set aside.
November 23, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are wholly-owned subsidiaries of
the same bank holding company. As such, their proposed merger is essentially a corporate reorganization
and would have no effect on competition.

ATLANTIC NATIONAL BANK OF WEST HOLLYWOOD,
Hollywood, Fla., and Atlantic National Bank of Hollywood, Hollywood, Fla., and Atlantic National Bank of Davie,
Davie, Fla., and Atlantic National Bank of Fort Lauderdale, Fort Lauderdale, Fla.
Banking offices
Names of banks and type of transaction

Atlantic National Bank of Hollywood, Hollywood, Fla. (15147), with
and Atlantic National Bank of Davie, Davie, Fla. (15739), with
and Atlantic National Bank of Fort Lauderdale, Fort Lauderdale, Fla. (16034), with
and Atlantic National Bank of West Hollywood, Hollywood, Fla. (15166), which had
merged Dec. 31, 1977, under charter of the latter bank (15166) and title "Atlantic National
Bank of Broward." The merged bank at date of merger had




Total
assets
$ 34,768,000
21,202,000
11,987,000
79,927,000
142,835,000

To be
In
operation operated
2
1
1
1
5

117

COMPTROLLER'S DECISION

Established as a de novo entry by its parent bank
holding company, Citizens Bancshares of Florida, Inc.,
in 1972, Fort Lauderdale Bank's total deposits were
$10.8 million on December 31, 1976.
Citizens Bancshares of Florida, Inc., was acquired
via merger, in 1973, by Atlantic Bancorporation, Jacksonville, Fla., the sixth largest multi-bank holding company headquartered in Florida, and all of the Merging
Banks and Charter Bank are commonly owned and
controlled by Atlantic Bancorporation.
Accordingly, this proposal must be regarded essentially as a corporate reorganization and does not appear to be in violation of applicable state branching
statutes.
This application is regarded as being not adverse to
the public interest and should be, and hereby is, approved.
November 15, 1977.

Pursuant to 12 USC 1828(c), application has been
made to the Comptroller of the Currency requesting
prior consent to merge Atlantic National Bank of Hollywood, Hollywood, Fla. ("Hollywood Bank"); Atlantic
National Bank of Davie, Davie, Fla. ("Davie Bank");
and Atlantic National Bank of Fort Lauderdale, Fort
Lauderdale, Fla. ("Fort Lauderdale Bank") (collectively, "Merging Banks"), into Atlantic National Bank of
West Hollywood, Hollywood, Fla. ("Charter Bank"), under the charter of Atlantic National Bank of West Hollywood, and with the title of "Atlantic National Bank of
Broward." The subject application rests upon an
agreement executed between the proponent banks
which is incorporated herein by reference, the same
as if fully set forth.
Charter Bank was established in 1957 as Citizens
National Bank of West Hollywood. As of December 31,
1976, Charter Bank held total commercial bank deposits aggregating approximately $63 million.
Hollywood Bank was established in 1963, operates
under national banking association charter number of
15147 and, as of calendar year-end 1976, had total
deposits of $28.1 million.
Davie Bank was organized as The Citizens National
Bank of Davie in 1969; and, on December 31, 1976,
held deposits of $15.4 million.
*

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

*

*

FIRST & MERCHANTS NATIONAL BANK,
Richmond, Va., and Mountain Trust Bank, Roanoke, Va.
Banking offices
Names of banks and type of transaction

Total
assets *

Mountain Trust Bank, Roanoke, Va., with
and First & Merchants National Bank, Richmond, Va. (1111), which had
merged Dec. 31,1977, under charter and title of the latter bank (1111). The merged bank
at date of merger had

COMPTROLLER'S DECISION
Pursuant to 12 USC 1828(c), the Office of the Comptroller of the Currency has received an application requesting prior consent to merge Mountain Trust Bank,
Roanoke, Va. ("Merging Bank"), into First & Merchants
National Bank, Richmond, Va. ("Charter Bank"), under
the charter and title of First & Merchants National
Bank. The subject application rests upon an agreement executed between the proponent banks, incorporated herein by reference the same as if fully set
forth.
Charter Bank, the second largest commercial bank
headquartered within the Commonwealth of Virginia,
was granted national banking association charter number 1111 by this Office on May 3, 1865. As of June 30,
* Asset figures are as of call dates immediately before and after
transaction.

118



$ 117,508,000
1,270,796,000
1,289,306,000

In
To be
operation operated
10
55
65

1977, Charter Bank held total commercial bank deposits of approximately $1.1 billion. In addition to its
main office in Richmond, Charter Bank operates 53
banking offices in 18 Virginia cities and communities
and one branch office in Nassau, Bahamas.
Merging Bank is a state-chartered banking institution operating six offices within the city of Roanoke and
four offices in Roanoke County. As of June 30, 1977,
Merging Bank's total deposits were $102 million.
Both Charter Bank and Merging Bank are banking
subsidiaries of First & Merchants Corporation, Richmond, Va. ("F&M"), a registered multi-bank holding
company that controls six affiliated banks. Thus, since
the proponent banks became commonly owned and
controlled in 1973, there has been no meaningful degree of existing competition between them. Accordingly, this application is deemed to be essentially a
corporate reorganization whereby F&M is consolidating a portion of its banking interests.

Applying the statutory criteria, it is the conclusion of
this Office that this application is not adverse to the
public interest and should be, and hereby is, approved.
November 29, 1977.

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

FIRST BANK AND TRUST COMPANY OF BOCA RATON, NATIONAL ASSOCIATION,
Boca Raton, Fla., and University National Bank of Boca Raton, Boca Raton, Fla., and First Bank of West Boca
Raton, Boca Raton, Fla.
Banking offices
Total
assets

Names of banks and type of transaction

University National Bank of Boca Raton, Boca Raton, Fla. (15554), with
and First Bank of West Boca Raton, Boca Raton, Fla., with
and First Bank and Trust Company of Boca Raton, National Association, Boca Raton, Fla.
(15421), which had
merged Dec. 31, 1977, under charter and title of the latter bank (15421). The merged bank
at date of merger had

COMPTROLLER'S DECISION
Pursuant to 12 U.S.C. 1828(c), an application has
been filed with the Office of the Comptroller of the Currency requesting prior permission to effectuate a
merger of University National Bank of Boca Raton,
Boca Raton, Fla. ("UNB"), and First Bank of West Boca
Raton, Boca Raton, Fla. ("First Bank") (collectively,
"Merging Banks"), into First Bank and Trust Company
of Boca Raton, National Association, Boca Raton, Fla.
("Charter Bank"), under the charter and title of First
Bank and Trust Company of Boca Raton, National Association. The subject application rests upon an
agreement executed between the proponent banks
which is incorporated herein by reference, the same
as if fully set forth.
UNB was chartered in 1965 and, as of December
31, 1976, its total deposits were $38.2 million.
First Bank was established de novo in 1974 by its
parent bank holding company, First Bancshares of
Florida, Inc., Boca Raton, Fla. ("Bancshares"). As of
year-end 1976, First Bank's total commercial bank deposits were $6.1 million. Charter Bank was granted national banking association charter number 15521 by

In
To be
operation operated

$ 49,349,000
8,481,000
156,072,000
175,047,000

this Office on November 5, 1964, and as of December
31, 1976, it held total deposits of $130.6 million.
Both of the Merging Banks and Charter Bank are
banking subsidiaries of Bancshares, the 13th largest
multi-bank holding company headquartered in Florida,
which controls 13 banks. Due to the common ownership and control of the proponent banks, this application is regarded essentially as a corporate reorganization.
Accordingly, applying the statutory criteria, it is the
conclusion of this Office that the combination of three
of Bancshares' subsidiaries located in the Boca Raton
area will produce no adverse impact upon any relevant area of consideration. Furthermore, the application is deemed to be not adverse to the public interest
and should be, and hereby is, approved.
December 1, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The merging banks are all wholly-owned subsidiaries
of the same bank holding company. As such, their proposed merger is essentially a corporate reorganization
and would have no effect on competition.

FIRST NATIONAL BANK OF SAN DIEGO COUNTY,
Escondido, Calif., and Balboa Bank, Chula Vista, Calif.
Banking offices
Names of banks and type of transaction

Total
assets

Balboa Bank, Chula Vista, Calif., with
and First National Bank of San Diego County, Escondido, Calif. (15453), which had
merged Dec. 31, 1977, under charter and title of the latter bank (15453). The merged bank
at date of merger had

COMPTROLLER'S DECISION
Pursuant to 12 USC 1828(c), an application has been



$ 25 058 000
86,934,000
122,331,000

In
To be
operation operated
2
7
9

filed with the Comptroller of the Currency asking prior
consent to merge Balboa Bank, Chula Vista, Calif.

("Merging Bank"), into First National Bank of San
Diego County, Escondido, Calif. ("Charter Bank"), under the charter and title of First National Bank of San
Diego County. This application rests upon an agreement executed between the proponent banks, incorporated herein by reference the same as if fully set
forth.
Charter Bank was granted national banking association charter number 15453 by this Office on December
17, 1964. As of December 31, 1976, Charter Bank's
total deposits aggregated $65.8 million.
Merging Bank is a state-chartered commercial banking institution that opened for business on June 14,
1972. As of calendar year-end 1976, its total deposits
were $26.2 million.
Charter Bank operates its main office and six
branches in the northern portion of San Diego County,
north of the city of San Diego, and it has not successfully penetrated the city of Chula Vista, situated in the
southern portion of the county.
The proponent banks serve two separate and distinct service areas, and the closest offices of Merging
Bank and Charter Bank are approximately 10 miles
apart, with several intervening offices of competing
banks, including offices of the largest California-based
commercial banks. Accordingly, approval of this application would result in no substantially adverse effect
upon existing competition.
The combination of the proponent banks, resulting
from approval of this proposal, should better serve the
banking public by the creation of a larger independent
competitor that will have a better opportunity to expand the banking services currently offered to customers within the respective service areas of both
Charter Bank and Merging Bank. Additionally, consid-

erable savings in operational costs should be realized
by both banks, thereby creating a more profitable institution. Considerations relating to convenience and
needs benefits are deemed to be a positive factor in
approving this application.
The managements of Charter Bank and Merging
Bank are satisfactory. The financial resources of the
proponent banks are regarded as somewhat less than
totally satisfactory, and both of the proponents are only
marginally capitalized. As of June 30, 1977, Charter
Bank's loans to equity ratio was 11.93 and its equity to
assets ratio was 4.95. As of the same date, the ratios
for Merging Bank were 11.78 and 5.69, respectively. In
a pro forma combination, the resulting bank's loan to
equity ratio would be 12.21, its equity to assets ratio
would be 5.03, and the resulting bank would rank
32nd of 35 California state and national banks in the
$100 million to $500 million size group. Although this
Office is willing to approve this transaction, in order to
insure the favorable future prospects of the resulting
bank, it is understood that Charter Bank will provide
the Regional Administrator of National Banks with an
acceptable equity capital augmentation program, in
the amount of at least $1.5 million, within 6 months of
the date of consummation of this merger. Furthermore,
this Office will not be receptive to further expansion
through branching, acquisitions, or otherwise until the
capital of the bank reaches an acceptable level.
November 29, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
We have reviewed this proposed transaction and conclude that it would not have a substantial competitive
impact.

HERITAGE BANK NATIONAL ASSOCIATION,
Cherry Hill, N.J., and Pineland State Bank, Brick Town, N.J.
Banking offices
Total
assets *

Names of banks and type of transaction

Pineland State Bank, Brick Town, N.J., with
was purchased Dec. 31, 1977, by Heritage Bank National Association, Cherry Hill, N.J.
(1209), which had
After the purchase was effected, the receiving bank had

COMPTROLLER'S DECISION
Application has been made to the Office of the Comptroller of the Currency requesting prior permission for
Heritage Bank National Association, Cherry Hill, N.J.
("HBNA"), the purchasing bank, to purchase the assets and assume the liabilities of Pineland State Bank,
Brick Town, N.J. ("Selling Bank"). The subject application rests upon an agreement executed between the
proponent banks which is incorporated herein by reference, the same as if fully set forth.
HBNA was organized in 1812 and was granted na*Asset figures are of call dates immediately before and after transaction.

120



In
To be
operation operated

$100,813,000

4

568,994,000
686,040,000

42
46

tional banking association charter number 1209 by this
Office on June 2, 1865. As of June 30, 1977, HBNA
held total commercial bank deposits of $488.5 million.
Selling Bank is a state-chartered commercial banking institution which, as of June 30, 1977, had total deposits of $85.5 million. Selling Bank operates four
banking offices, all located within Ocean County.
HBNA is a wholly-owned banking subsidiary of Heritage Bancorporation, Cherry Hill, N.J. ("Heritage"), a
registered bank holding company that controls two
commercial banks and ranks as the sixth largest banking organization headquartered in New Jersey. Presently, HBNA does not operate any of its 41 banking
offices in Ocean County and the acquisition of Selling

Bank would constitute HBNA's initial entry into the
county. The closest office of HBNA to any office of
Selling Bank is HBNA's Vicentown Office, approximately 37 miles distant from Selling Bank's Brick Plaza
Office. Due to the geographic distance involved and
the presence of numerous intervening banking alternatives, approval of this proposal would have no more
than a slightly adverse effect upon existing competition.
The combination of HBNA and Selling Bank should
introduce new and expanded banking services into
the Brick Town area of the fastest growing county in
New Jersey. Additionally, the introduction of Heritage
into Ocean County should provide additional competition to its two larger bank holding competitors within
Ocean County, thereby better serving the banking
public. Considerations relating to convenience and
needs benefits are, therefore, regarded as being consistent with approval.
The financial and managerial resources of HBNA
and Selling Bank are regarded as generally satisfactory. Likewise, the future prospects of both proponent
banks are considered to be favorable.
Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that the subject application is not adverse to the
public interest and should be, and hereby is, approved.

December 1, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
Bank's four offices are separated by approximately 40
miles from the closest office of Applicant. It does not
appear that Applicant competes to any significant extent in Bank's primary service area and therefore the
proposed acquisition will not have any significant effects on existing competition.
New Jersey law permits de novo branching into any
municipality except those with a population of less
than 10,000 in which the principal office of another
bank is located. Bank is the fourth largest commercial
banking institution by total deposits in the Ocean
County market, a market presently served by 15 banks
holding total deposits of $3.2 billion as of June 30,
1976. Bank's market share in the county is 9.27 percent. Applicant holds 11.1 percent of total deposits in
Burlington County (which is adjacent to Ocean County)
and 25.0 percent of total deposits in nearby Camden
County. Therefore, Applicant would appear to be a
possible candidate for de novo branching in Ocean
County absent the proposed acquisition. It thus appears that the proposed acquisition will have some adverse effects on potential competition presently available through branching.
We conclude that, overall, the proposed acquisition
will have a slightly adverse effect on competition.

//. Mergers consummated, involving a single operating bank.
THE FIRST NATIONAL BANK OF ATHOL,
Athol, Mass., and First Bank of Athol (National Association), Athol, Mass.
Banking offices
Names of banks and type of transaction

Total
assets

The First National Bank of Athol, Athol, Mass. (13733), with
and First Bank of Athol (National Association), Athol, Mass. (13733), which had
merged Mar. 16, 1977, under the charter of the latter bank (13733) and title "The First
National Bank of Athol." The merged bank at date of merger had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency for prior permission to effectuate a merger
between The First National Bank of Athol, Athol, Mass.
("FNB"), the merging bank, and First Bank of Athol
(National Association) (organizing), Athol, Mass.
("Charter Bank"), under the charter of First Bank of
Athol (National Association) and with the title of The
First National Bank of Athol.
FNB received its charter as a national banking association on July 18, 1933, and as of June 30, 1976, had
total commercial bank deposits of $12.7 million.
Charter Bank is a newly organized institution and, to
date, has no operating history. Charter Bank will act as
the vehicle for the acquisition of FNB by T.N.B. Financial Corporation, Springfield, Mass., a registered bank
holding company; and as such, would have the effect



$15,655,000
120,000
15,905,000

In
To be
operation operated
2
0
2

of merely combining an existing bank with a nonoperating institution, with no resultant adverse competitive effect.
Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that this proposal is not adverse to the public
interest and should be, and hereby is, approved.
February 14, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed merger is part of a plan through which
First National Bank of Athol would become a subsidiary of T.N.B. Financial Corporation, a bank holding
company. The instant merger, however, would merely
combine an existing bank with a non-operating institution; as such, and without regard to the acquisition of
the surviving bank by T.N.B. Financial Corporation, it
would have no effect on competition.
121

DALLAS NATIONAL BANK IN DALLAS,
Dallas, Tex., and 3300 Commerce National Bank, Dallas, Tex.
Banking offices
Names of banks and type of transaction

Total
assets

Dallas National Bank in Dallas, Dallas, Tex. (14563), with
and 3300 Commerce National Bank, Dallas, Tex. (14563), which had
merged May 2, 1977, under charter of the latter bank (14563) and title "Dallas National
Bank in Dallas." The merged bank at date of merger had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency requesting prior permission to effectuate a
merger of Dallas National Bank in Dallas, Dallas, Tex.
("Merging Bank"), into 3300 Commerce National Bank
(organizing), Dallas, Tex. ("Charter Bank"), under the
charter of 3300 Commerce National Bank and with the
title of Dallas National Bank in Dallas. The subject application rests upon an agreement executed between
the proponent banks, incorporated herein by reference
the same as if fully set forth.
Merging Bank was chartered as a national bank on
October 15, 1946, and as of June 30, 1976, had total
deposits of $32.7 million.
The Office of the Comptroller of the Currency on November 18, 1976, granted preliminary approval for
Charter Bank to organize. To date, Charter Bank has
no operating history. Charter Bank will serve as the vehicle for the acquisition of Merging Bank by Republic
of Texas Corporation, Dallas, Tex. ("Republic"), a registered multi-bank holding company. This application

In
To be
operation operated

$40,011,000
250,000
40,261,000

would, therefore, have the effect of merely combining
an existing bank with a non-operating entity; and as
such, without regard to the acquisition of the surviving
bank by Republic, would not adversely affect competition within the Dallas area.
Accordingly, applying the statutory criteria, it is the
conclusion of this Office that this application is not adverse to the public interest and should be, and hereby
is, approved.
April 1, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed merger is part of a plan through which
Dallas National Bank in Dallas would become a subsidiary of Republic of Texas Corporation, a bank holding company. The instant merger, however, would
merely combine an existing bank with a non-operating
institution; as such, and without regard to the acquisition of the surviving bank by Republic of Texas Corporation, it would have no effect on competition.

FIRST NATIONAL BANK IN GARLAND,
Garland, Tex., and Glenbrook & Avenue A National Bank, Garland, Tex.
Banking offices
Total
assets

Names of banks and type of transaction

First National Bank in Garland Garland Tex (7989) with
and Glenbrook & Avenue A National Bank, Garland, Tex. (7989), which had
merged May 2, 1977, under charter of the latter bank (7989) and title "First National Bank
in Garland " The merged bank at date of merger had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency requesting prior permission to merge First
National Bank in Garland, Garland, Tex. ("Merging
Bank"), into Glenbrook & Avenue A National Bank (organizing), Garland, Tex. ("Charter Bank"), under the
charter of Glenbrook & Avenue A National Bank, and
with the title of First National Bank in Garland. The subject application rests upon an agreement executed between the proponent banks, incorporated herein by
reference the same as if fully set forth.


122


$85,978,000
250,000
86,228,000

In
To be
operation operated
1
0
1

Merging Bank received its charter as a national
banking association on November 27, 1905, and as of
June 30, 1976, had total commercial bank deposits of
$72.5 million.
Charter Bank received preliminary approval to organize from this Office on June 11, 1974, and, to date,
has no operating history. Charter Bank was organized
by principals of Republic of Texas Corporation, Dallas,
Tex. ("Republic"), a registered multi-bank holding
company, and Charter Bank will serve as the vehicle
for the acquisition of Merging Bank by Republic. The
subject merger would, therefore, have the effect of

merely combining an existing bank with a nonoperating institution; and as such, with no regard to
the acquisition of the surviving bank by Republic,
would have no effect upon competition.
Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that this application is not adverse to the public
interest and should be, and hereby is, approved.
March 28, 1977.

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

THE IRON RIVER NATIONAL BANK,
Iron River, Mich., and The First Iron River National Bank, Iron River, Mich.
Total
assets

Names of banks and type of transaction

The Iron River National Bank, Iron River, Mich. (14102), with
and The First Iron River National Bank, Iron River, Mich. (14102), which had
merged May 31, 1977, under charter of the latter bank (14102) and title "The Iron River
National Bank." The merged bank at date of merger had

COMPTROLLER'S DECISION
The Iron River National Bank, Iron River, Mich. ("Merging Bank"), and The First Iron River National Bank (organizing), Iron River, Mich. ("Charter Bank"), have
made application to the Comptroller of the Currency
for prior permission to effectuate a merger under the
charter of The First Iron River National Bank and with
the title of The Iron River National Bank. The subject
application rests upon an agreement executed between the proponent banks, incorporated herein by
reference the same as if fully set forth.
Charter Bank is a newly formed entity and, to date,
has no operating history. A wholly-owned subsidiary of
Michigan Financial Corporation, Marquette, Mich., a
multi-bank holding company that controls seven subsidiary banks with aggregate deposits of $184.4 million, Charter Bank is the facility whereby Merging Bank
will become a wholly-owned subsidiary of Michigan
Financial Corporation.
Chartered as a national banking association on April
12, 1934, Merging Bank, as of September 30, 1976,

Banking offices
In
To be
operation operated

$15,172,000
125,000
15,297,000

had total deposits of $13.7 million, and was the fourth
largest of eight commercial banks located within its
relevant banking market (approximated by the southeastern half of Iron County, the southwestern half of
Dickinson County and the northwestern corner of
Menominee County).
Accordingly, applying the statutory criteria, it is the
conclusion of this Office that the subject application
essentially represents a corporate reorganization and
is not adverse to the public interest in any respect.
March 31, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed merger is part of a plan through which
Iron River National Bank would become a subsidiary of
Michigan Financial Corporation, a bank holding company. The instant merger, however, would merely combine an existing bank with a non-operating institution;
as such, and without regard to the acquisition of the
surviving bank by Michigan Financial Corporation, it
would have no effect on competition.

THE FIRST NATIONAL BANK OF LAPEER,
Lapeer, Mich., and Lapeer Bank, N.A., Lapeer, Mich.
Total
assets

Names of banks and type of transaction

Lapeer Bank, N.A., Lapeer, Mich. (1731), with
and The First National Bank of Lapeer, Lapeer, Mich. (1731), which had
consolidated June 7, 1977, under the charter and title of the latter bank (1731). The
consolidated bank at date of consolidation had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency requesting prior permission to consolidate



$

Banking offices
In
To be
operation operated

130,000
68,982,000

69,114,000

The First National Bank of Lapeer, Lapeer, Mich.
("FNB"), the charter bank, and Lapeer Bank, N.A. (organizing), Lapeer, Mich. ("Lapeer Bank"), the consoli123

dating bank, under the charter and title of The First
National Bank of Lapeer, Lapeer, Mich. The subject
application rests upon an agreement executed between the proponent banks, incorporated herein by
reference the same as if fully set forth.
FNB received its charter as a national banking association on November 2, 1870, and as of June 30, 1976,
held total deposits of $58.2 million.
Lapeer Bank was given preliminary approval to organize by this Office on November 9, 1976. To date,
Lapeer Bank has no operating history.
This application is a portion of a transaction to facilitate the acquisition of FNB by Peoples Banking Corporation, Bay City, Mich., a registered bank holding
company, and would merely combine an existing bank
with a non-operating institution.

Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that this application is not adverse to the public
interest and should be, and hereby is, approved.

May 6, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed consolidation is part of a plan through
which First National Bank of Lapeer would become a
subsidiary of Peoples Banking Corporation, a bank
holding company. The instant transaction, however,
would merely combine an existing bank with a nonoperating institution; as such, and without regard to
the acquisition of the surviving bank by Peoples Banking Corporation, it would have no effect on competition.

THE FIRST NATIONAL BANK OF ALBANY,
Albany, Ga., and First National Interim Bank of Albany, Georgia, Albany, Ga.
Banking offices
Total
assets *

Names of banks and type of transaction

The First National Bank of Albany, Albany, Ga. (14907), with
and First National Interim Bank of Albany, Georgia, Albany, Ga. (14907), which had
merged July 1, 1977, under charter of the latter bank (14907) and title "The First National
Bank of Albany." The merged bank at date of merger had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency requesting prior permission to effectuate a
merger of The First National Bank of Albany, Albany,
Ga. ("FNB"), the merging bank, into First National Interim Bank of Albany, Georgia (organizing), Albany,
Ga., the charter bank, under the charter of First National Interim Bank of Albany, Albany, Ga., and with
the title of The First National Bank of Albany, Albany,
Ga. The subject application rests upon an agreement
executed between the proponent banks, incorporated
herein by reference the same as if fully set forth.
The Comptroller of the Currency on December 30,
1976, gave preliminary approval for the charter bank
to organize and, to date, the bank has no operating
history.
FNB was organized as a national banking association in 1960 and, as of year-end 1976, held total commercial bank deposits of $31.6 million.
On March 16, 1977, the Federal Reserve Bank of
Atlanta, acting pursuant to delegated authority for the
Board of Governors of the Federal Reserve System,
approved an application filed by Trust Company of
Georgia, Atlanta, Ga. ("Applicant"), a registered multibank holding company, to acquire all of the outstand*Asset figures are as of call dates immediately before and after transaction.

124



In
To be
operation operated

$39,344,000
250,000
37,653,000

ing voting shares (less directors' qualifying shares) of
the successor by merger to FNB. Applicant currently
ranks as the third largest banking organization headquartered in Georgia and controls eight subsidiary
banks with total deposits of $1.2 billion, approximately
10 percent of deposits in all commercial banks within
the state.
Charter bank will act as the means to facilitate the
acquisition of FNB by Applicant; and as such, would
merely combine a non-operating entity with an existing
commercial bank, with no resultant adverse consequences impacting upon any relevant area of consideration.
Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that this application is in the public interest and
should be, and hereby is, approved.
May 31, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed merger is part of a plan through which
First National Bank of Albany would become a subsidiary of Trust Company of Georgia, a bank holding company. The instant merger, however, would merely combine an existing bank with a non-operating institution;
as such, and without regard to the acquisition of the
surviving bank by Trust Company of Georgia, it would
have no effect on competition.

THE NATIONAL BANK OF COMMERCE OF JACKSON,
Jackson, Tenn., and The Fourth National Bank of Jackson, Jackson, Tenn.
Banking offices
Names of banks and type of transaction

Total
assets

The National Bank of Commerce of Jackson, Jackson, Tenn. (12790), with
and The Fourth National Bank of Jackson, Jackson, Tenn. (12790), which had
merged July 1, 1977, under charter of the latter bank (12790), and title "The National
Bank of Commerce of Jackson." The merged bank at date of merger had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency requesting prior permission to effectuate a
merger of The National Bank of Commerce of Jackson,
Jackson, Tenn. ("Jackson Bank"), the merging bank,
and The Fourth National Bank of Jackson (organizing),
Jackson, Tenn., the charter bank, under the charter of
The Fourth National Bank of Jackson, and with the title
of The National Bank of Commerce of Jackson, Jackson, Tenn. The subject application rests upon an
agreement executed between the proponent banks,
which is incorporated herein by reference the same as
if fully set forth.
The Office of the Comptroller of the Currency on
January 5, 1977, granted preliminary approval for
charter bank to organize. To date, the bank has no
operating history.
Merging bank received its charter as a national
banking association on July 15, 1925, and as of December 31, 1976, had total deposits of $71.5 million.
On April 6, 1977, the Board of Governors of the Federal Reserve System granted approval of the application of NBC Corporation, Jackson, Tenn. ("NBC"), to
become a bank holding company through the acquisition of Jackson Bank and The First National Bank of
Gibson County, Humboldt, Tenn. ("FNB"). Upon con-

$83,785,000
120,000
84,734,000

In
To be
operation operated
6
0
6

summation, NBC will rank as the 11th largest of 12
multi-bank holding companies headquartered within
the state, controlling approximately 0.6 percent of the
total deposits held by commercial banks in Tennessee.
The primary significance of charter bank is to act as
the vehicle for the acquisition of Jackson Bank by
NBC; and, accordingly, would merely have the effect
of combining a non-operating entity with an existing
commercial bank. The merger of the proponent banks,
therefore, would have no adverse competitive impact.
Thus, applying the statutory criteria, it is the conclusion of this Office that this application is in the public
interest and should be, and hereby is, approved.
May 10, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The Proposed merger is part of a plan through which
National Bank of Commerce of Jackson would become
a subsidiary of NBC Corporation, a bank holding company. The instant merger, however, would combine an
existing bank with a non-operating institution; as such,
and without regard to the acquisition of the surviving
bank by NBC Corporation, it would have no effect on
competition.

CITY NATIONAL BANK OF AUSTIN,
Austin, Tex., and New City National Bank, Austin, Tex.
Total
assets

Names of banks and type of transaction

City National Bank of Austin, Austin, Tex. (14728), with
and New City National Bank, Austin, Tex. (14728), which had
merged July 28, 1977, under charter of the latter bank (14728) and title "City National Bank of Austin." The merged bank at date of merger had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency seeking prior permission to merge City National Bank of Austin, Austin, Tex. ("Merging Bank"),
into New City National Bank (organizing), Austin, Tex.
("Charter Bank"), under the charter of New City National Bank, and with the title of City National Bank of
Austin, Austin, Tex. The subject application rests upon
an agreement executed between the proponent




Banking offices
In
To be
operation operated

$378,941,756
242,000
361,992,310

banks, which is incorporated herein by reference the
same as if fully set forth.
On February 16, 1977, the Office of the Comptroller
of the Currency granted prior permission for Charter
Bank to organize; and, to date, the bank has no
operating history. Charter Bank was organized by principals and directors of First City Bancorporation of
Texas, Inc., Houston, Tex., Inc., Houston, Tex., and will
serve as the vehicle for the acquisition of City National

125

Bank of Austin, year-end 1976 total deposits of $302.7
million, by the bank holding company.
Accordingly, approval of this transaction would
merely have the effect of combining a non-operating
entity with an existing commercial bank, and would
produce no adverse effect upon any relevant area of
consideration. The application is regarded as not being adverse to the public interest and is, hereby, approved.
June 22, 1977.

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

THE FIRST NATIONAL BANK OF BRUNSWICK,
Brunswick, Ga., and First National Interim Bank of Brunswick, Georgia, Brunswick, Ga.
Banking offices
Names of banks and type of transaction

Total
assets

The First National Bank of Brunswick, Brunswick, Ga. (4944), with
and First National Interim Bank of Brunswick, Georgia, Brunswick, Ga. (4944), which had
merged Aug. 1, 1977, under charter of the latter bank (4944) and title "The First National
Bank of Brunswick." The merged bank at date of merger had

COMPTROLLER'S DECISION

$75,190,000
250,000
75,190,000

of FNB by Trust Company of Georgia, the third largest
banking organization headquartered in Georgia. As
such, this transaction would have the effect of merely
combining a non-operating entity with an existing commercial banking institution, and no adverse consequences within any relevant area of consideration
would result.
Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that this proposal is not adverse to the public
interest and should be, and hereby is, approved.
June 30, 1977.

Application has been made to the Comptroller of the
Currency requesting prior permission to merge The
First National Bank of Brunswick, Brunswick, Ga.
("FNB"), the merging bank, into First National Interim
Bank of Brunswick, Georgia (organizing), Brunswick,
Ga. ("Charter Bank"), under the charter of First National Interim Bank of Brunswick, Georgia and with the
title of The First National Bank of Brunswick,
Brunswick, Ga. The subject application rests upon an
agreement executed between the proponent banks,
incorporated herein by reference the same as if fully
set forth.
FNB received charter number 4944 as a national
banking association on March 19, 1894, and as of December 31, 1976, had total commercial bank deposits
of $61.5 million.
Charter Bank was organized by principals and
directors of Trust Company of Georgia, Atlanta, Ga.,
with preliminary approval to organize granted by this
Office on December 30, 1976. To date, Charter Bank
has no operating history. The primary significance of
Charter Bank is to act as the vehicle for the acquisition
*

In
To be
operation operated

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

*

*

THE MILLIKIN NATIONAL BANK OF DECATUR,
Decatur, III., and Second National Bank of Decatur, Illinois, Decatur,
Banking offices
Names of banks and type of transaction

The Millikin National Bank of Decatur, Decatur, III. (5089), with
and Second National Bank of Decatur, Illinois, Decatur, III. (5089), which had
merged Aug. 1, 1977, under charter of the latter bank (5089) and title "The Millikin
National Bank of Decatur." The merged bank at date of merger had

126



Total
assets
$197,786,000
254,000
198,040,000

In
To be
operation operated

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency requesting prior permission to effectuate a
merger of The Millikin National Bank of Decatur, Decatur, III ("MNB"), the merging bank, into Second National Bank of Decatur, Illinois (organizing), Decatur, III.
("Second National"), the charter bank, under the charter of Second National Bank of Decatur, Illinois, Decatur, III., and with the title of The Millikin National Bank of
Decatur, Decatur, III. The subject application rests
upon an agreement executed between the proponent
banks, incorporated herein by reference the same as if
fully set forth.
The Comptroller of the Currency, on December 22,
1975, granted preliminary approval for the organization of Second National. To date, the charter bank has
no operating history.
MNB was chartered as a national banking association on September 28, 1897, and, as of June 30, 1976,
had total deposits of approximately $148 million.
In a related matter, on November 5, 1976, the Board
of Governors of the Federal Reserve System gave approval to the application of Millikin Bancshares, Inc.,
Decatur, III. ("Applicant"), to become a bank holding
company through the acquisition of 100 percent (less

directors' qualifying shares) of the successor by
merger to MNB. Additionally, on the same date, the
Board gave permission for the estate of James Millikin,
deceased, Decatur, III., to acquire 55 percent of the
voting shares of Applicant.
The significance of Second National lies in the fact
that the new national bank will serve as the vehicle for
the acquisition of MNB by Applicant. Accordingly, the
merger will merely have the effect of combining a nonoperating entity with an existing commercial bank, with
no adverse effects upon any relevant statutory topic.
This application is, therefore, deemed to be in the
public interest and should be, and hereby is, approved.
June 23, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed merger is part of a plan through which
Millikin National Bank of Decatur would become a subsidiary of Millikin Bancshares, Inc., a bank holding
company. The instant merger, however, would merely
combine an existing bank with a non-operating institution; as such, and without regard to the acquisition of
the surviving bank by Millikin Bancshares, Inc., it
would have no effect on competition.

THE FIRST NATIONAL BANK OF YARMOUTH,
Yarmouth, Mass., and The Yarmouth Bank, National Association, Yarmouth, Mass.
Banking offices
Names of banks and type of transaction

Total
assets

The First National Bank of Yarmouth, Yarmouth (P.O. Yarmouth Port), Mass. (516), with
and The Yarmouth Bank, National Association, Yarmouth (P.O. Yarmouth Port), Mass. (516),
which had
merged Aug. 29, 1977, under charter of the latter bank (516) and title "Old Colony Bank
of Barnstable County, N.A." The merged bank at date of merger had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency requesting prior permission to effectuate a
merger of The First National Bank of Yarmouth, Yarmouth (P.O. Yarmouth Port), Mass. ("Merging Bank"),
into The Yarmouth Bank, National Association (organizing), Yarmouth (P.O. Yarmouth Port), Mass.
("Charter Bank"), under the charter of The Yarmouth
Bank, National Association, and with the title of "Old
Colony Bank of Barnstable County, N.A." The subject
application rests upon an agreement executed between the proponent banks, incorporated herein by
reference the same as if fully set forth.
Charter Bank was organized by principals of First
National Boston Corporation, Boston, Mass., the
largest commercial banking organization headquartered within the state of Massachusetts, controlling
four subsidiary banks, with aggregate deposits of $3.5
billion. This Office granted preliminary approval on No-




To be
In
operation operated

$44,490,000

6

737,000

0

45,227,000

6

vember 26, 1976, for Charter Bank to organize; but, to
date, the bank has no operating history.
Merging Bank was granted national banking association charter number 516 on September 12, 1864,
and as of December 31, 1976, had total commercial
bank deposits of $35.5 million, and operated six banking offices.
Accordingly, consummation of this proposal would
merely have the effect of combining a non-operating
entity with an existing commercial bank; and as such,
would have no adverse impact upon any relevant area
of consideration. It is noted that the Board of Governors of the Federal Reserve System, on February 9,
1977, granted prior approval for First National Boston
Corporation to acquire 100 percent of the outstanding
voting shares of the successor by merger to The First
National Bank of Yarmouth.
This application is therefore deemed to be not adverse to the public interest, and should be, and hereby
is, approved.
July 27, 1977.
127

SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed merger is part of a plan through which
First National Bank of Yarmouth would become a subsidiary of First National Boston Corporation, a bank

holding company. The instant merger, however, would
merely combine an existing bank with a non-operating
institution; as such, and without regard to the acquisition of the surviving bank by First National Boston Corporation, it would have no effect on competition.

MIDWAY NATIONAL BANK OF GRAND PRAIRIE,
Grand Prairie, Tex., and Parkway National Bank, Grand Prairie, Tex.
Banking offices
Total
assets

Names of banks and type of transaction

Midway National Bank of Grand Prairie, Grand Prairie, Tex. (15120), with
and Parkway National Bank, Grand Prairie, Tex. (15120), which had
merged Sept. 1, 1977, under charter of the latter bank (15120) and title "Midway National
Bank of Grand Prairie." The merged bank at date of merger had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency seeking prior permission to effectuate a
merger of Midway National Bank of Grand Prairie,
Grand Prairie, Tex. ("Merging Bank"), into Parkway
National Bank (organizing), Grand Prairie, Tex. ("Charter Bank"), under the charter of Parkway National Bank
and with the title of Midway National Bank of Grand
Prairie. The subject application rests upon an agreement executed between the proponent banks, incorporated herein by reference the same as if fully set
forth.
Principals of Republic of Texas Corporation, Dallas,
Tex., a registered multi-bank holding company, the
fourth largest banking organization headquartered in
Texas which controls eight commercial banking
subsidiaries with aggregate deposits of $2.8 billion, received preliminary approval from this Office on April 8,
1977, to organize Charter Bank. To date, Charter Bank
has no operating history; the primary significance of
this new national banking association is to serve as the
vehicle for the acquisition of Merging Bank by Republic of Texas Corporation. (In an order dated June 20,
1977, the Board of Governors of the Federal Reserve
Systerfi granted prior approval of the application by
Republic of Texas Corporation to acquire 100 percent,

$32,446,000
240,000

In
To be
operation operated
1
0
1

32,686,000

less directors' qualifying shares, of the successor by
merger to Midway National Bank of Grand Prairie,
Grand Prairie, Tex.)
Merging Bank was granted a national banking charter on June 3, 1963, and as of December 31, 1976,
had total deposits of $28.2 million.
Accordingly, applying the statutory criteria, consummation of this proposal would merely combine a nonoperating entity with an existing commercial bank; as
such, the merger would produce no adverse impact
upon any relevant area of consideration. The application is, therefore, regarded as being not adverse to the
public interest and should be, and hereby is, approved.
July 29, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed merger is part of a plan through which
Midway National Bank of Grand Prairie would become
a subsidiary of Republic of Texas Corporation, a bank
holding company. The instant merger, however, would
merely combine an existing bank with a non-operating
institution; as such, and without regard to the acquisition of the surviving bank by Republic of Texas Corporation, it would have no effect on competition.

MAIN STREET NATIONAL BANK OF DALLAS,
Dallas, Tex., and Main Street Commerce Bank National Association, Dallas, Tex.
Banking offices
Names of banks and type of transaction

Main Street National Bank of Dallas, Dallas, Tex. (15328), with
and Main Street Commerce Bank National Association, Dallas, Tex. (15328), which had.
merged Sept. 12, 1977, under charter of the latter bank (15328) and title "Main Street
National Bank of Dallas." The merged bank at date of merger had

128



Total
assets
$26,372,000
240,000
27,573,000

In
To be
operation operated
1
0
1

COMPTROLLER'S DECISION
Application has been .made to the Comptroller of the
Currency requesting prior permission to merge Main
Street National Bank of Dallas, Dallas, Tex. ("Merging
Bank"), into Main Street Commerce Bank National Association (organizing), Dallas, Tex. ("Charter Bank"),
under the charter of Main Street Commerce Bank National Association and with the title of Main Street National Bank of Dallas. The subject application rests
upon an agreement executed between the proponent
banks, incorporated herein by reference the same as if
fully set forth.
Merging Bank commenced business on June 8,
1964, after having been granted national banking
charter number 15328. As of December 31, 1977,
Merging Bank's commercial bank deposits aggregated approximately $25 million, and the bank was the
46th largest of 110 banking organizations in the Dallas
banking market (approximated by Dallas County and
portions of six adjacent counties as defined by the
Dallas RMA).
On May 23, 1977, this Office granted preliminary approval for the organization of Charter Bank. Charter
Bank was organized by principals of the second

largest banking organization headquartered in Texas,
Texas Commerce Bancshares, Inc., Houston, Tex. The
primary significance of Charter Bank is to act as the
vehicle for the acquisition of the surviving institution by
the registered multi-bank holding company. Accordingly, the effect of the transaction will be to merely
combine an existing bank with a non-operating entity,
and as such, it will produce no adverse impact upon
any relevant area of consideration.
This application is, therefore, deemed to be not adverse to the public interest and should be, and hereby
is, approved.
August 9, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed merger is part of a plan through which
Main Street National Bank of Dallas would become a
subsidiary of Texas Commerce Bancshares, Inc., a
bank holding company. The instant merger, however,
would merely combine an existing bank with a nonoperating institution; as such, and without regard to
the acquisition of the surviving bank by Texas Commerce Bancshares, Inc., it would have no effect on
competition.

NATIONAL UNION BANK,
Columbiana, Ohio, and X National Bank, Columbiana, Ohio
Total
assets

Names of banks and type of transaction

X National Bank, Columbiana, Ohio (15694), with
and National Union Bank, Columbiana, Ohio (15694), which had
consolidated Sept. 30, 1977, under charter and title of the latter bank (15694). The consolidated bank at date of consolidation had

$ 5,500,000
40,300,000
45,800,000

Banking offices
In
To be
operation operated
0
1
1

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency requesting prior permission to consolidate
National Union Bank, Columbiana, Ohio ("Charter
Bank"), with X National Bank (organizing), Columbiana, Ohio ("New Bank"), under the charter and title
of National Union Bank. The subject application rests
upon an application executed between the proponent
banks, incorporated herein by reference, the same as
if fully set forth.
Charter Bank was granted national banking association charter number 15694 on January 30, 1969, and
as of December 31, 1976, had total commercial bank
deposits of approximately $34 million.
The Office of the Comptroller of the Currency, on
March 25, 1977, granted preliminary approval for the
organization of X National Bank. To date, the New
Bank has no operating history. The primary significance of New Bank is to act as the vehicle for the acquisition of Charter Bank by the third largest banking
organization headquartered within the state of Ohio,
National City Corporation, Cleveland, Ohio, a registered multi-bank holding company that controls five



banks with total deposits of $1.8 billion. (The Board of
Governors of the Federal Reserve System on August
24, 1977, announced its approval of the application of
National City Corporation, Cleveland, Ohio, to acquire
National Union Bank, Columbiana, Ohio.)
Accordingly, applying the statutory criteria, it is the
conclusion of this Office that the instant transaction
would merely combine an existing commercial bank
with a non-operating institution, and as such, would
have no adverse impact upon any relevant area of
consideration. The application is hereby approved.
August 31, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed consolidation is part of a plan through
which National Union Bank, would become a subsidiary of National City Corporation, a.bank holding company. The instant transaction, however, would merely
combine an existing bank with a non-operating institution; as such, and without regard to the acquisition of
the surviving bank by National City Corporation, it
would have no effect on competition.
129

BELLEFONTAINE NATIONAL BANK,
Bellefontaine, Ohio, and The Huntington National Bank of Bellefontaine, Bellefontaine, Ohio
Banking offices
Names of banks and type of transaction

Total
assets

Bellefontaine National Bank, Bellefontaine, Ohio (13749), with
and The Huntington National Bank of Bellefontaine, Bellefontaine, Ohio (13749), which had
merged Oct. 11,1977, under charter and title of the latter bank (13749). The merged bank
at date of merger had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency seeking prior permission to effectuate a
merger of Bellefontaine National Bank, Bellefontaine,
Ohio ("Merging Bank"), into The Huntington National
Bank of Bellefontaine (organizing), Bellefontaine, Ohio
("Charter Bank"). The subject application rests upon
an agreement executed between the proponent
banks, incorporated herein by reference the same as if
fully set forth.
Merging Bank was granted national banking association charter number 13749 on August 9, 1933, and
as of December 31, 1976, the bank had total commercial bank deposits aggregating $29.9 million.
On June 6, 1977, this Office granted preliminary approval for the organization of Charter Bank. Charter
Bank was organized by principals of Huntington Baneshares Incorporated, Columbus, Ohio, and to date,
has no operating history. The primary significance of
Charter Bank is to act as the vehicle for the acquisition

$41,122,000
120,000
42,493,000

In
To be
operation operated

4
0

of Merging Bank by the registered multi-bank holding
company and, as such, it would merely combine an
existing commercial bank with a non-operating entity.
Accordingly, the proposal would produce no adverse
impact upon any relevant area of consideration.
This application is thus deemed to be not adverse to
the public interest and should be, and hereby is, approved.
September 9, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed merger is part of a plan through which
Bellefontaine National Bank would become a subsidiary of Huntington Bancshares Incorporated, a bank
holding company. The instant merger, however, would
merely combine an existing bank with a non-operating
institution; as such, and without regard to the acquisition of the surviving bank by Huntington Bancshares
Incorporated, it would have no effect on competition.

UNIVERSITY NATIONAL BANK,
Rockville, Md., and New University National Bank, Rockville, Md.
Banking offices
Names of banks and type of transaction

Total
assets *

University National Bank, Rockville, Md. (15365), with
and New University National Bank, Rockville, Md. (15365), which had
merged Oct. 17, 1977, under charter of the latter bank (15365) and title "University National Bank." The merged bank at date of merger had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency by University National Bank, Rockville, Md.
("Merging Bank"), and New University National Bank
(organizing), Rockville, Md. ("Charter Bank"), requesting prior permission to merge University National
Bank, Rockville, Md., into New University National
Bank (organizing), under the charter of New University
National Bank and with the title of University National
Bank. The subject application rests upon an agreement executed between the proponent banks, incorporated herein by reference, the same as if fully set
forth. '
*Asset figures are as of call dates immediately before and after
transaction.

130



$120,336,000
240,000
126,882,000

In
To be
operation operated
16
0
16

The Office of the Comptroller of the Currency, on
June 6, 1977, granted preliminary approval for the organization of Charter Bank by principals of Equitable
Bancorporation, Baltimore, Md., a registered multibank holding company which controls five subsidiary
banks that hold aggregate deposits of approximately
$1.3 billion. To date, Charter Bank has no operating
history, and the primary purpose for the creation of
Charter Bank is to act as the vehicle for acquisition of
Merging Bank by Equitable Bancorporation.
Merging Bank was granted national banking association charter number 15365 and commenced commercial banking operations in 1964. As of December
31, 1976, Merging Bank's deposits totaled $96.8 million.

SUMMARY OF REPORT BY ATTORNEY GENERAL

Accordingly, applying the statutory criteria, it is the
conclusion of this Office that approval of this proposal
would merely permit the combination of a nonoperating entity with an existing commercial bank, and
as such, it would have no adverse effect upon any relevant area of consideration. The application is thus regarded as being not adverse to the public interest and
should be, and hereby is, approved.
September 15, 1977.

*

The proposed merger is part of a plan through which
University National Bank would become a subsidiary
of Equitable Bancorporation, a bank holding company.
The instant merger, however, would merely combine
an existing bank with a non-operating institution; as
such, and without regard to the acquisition of the surviving bank by Equitable Bancorporation, it would
have no effect on competition.
*

*

THE CENTRAL NATIONAL BANK OF LONDON,
London, Ohio, and The Huntington National Bank of London, London, Ohio
Banking offices
Total
assets

Names of banks and type of transaction

The Central National Bank of London, London, Ohio (10373) with
and The Huntington National Bank of London, London, Ohio (10373), which had
merged Oct. 24, 1977, under charter and title of the latter bank (10373). The merged bank
at date of merger had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency seeking prior permission to effectuate a
merger of The Central National Bank of London, London, Ohio ("Merging Bank"), into The Huntington National Bank of London (organizing), London, Ohio
("Charter Bank"). The subject application rests upon
an agreement executed between the proponent banks,
incorporated herein by reference the same as if fully set
forth.
Merging Bank was granted national banking association charter number 10373 on April 23, 1913, and
as of December 31, 1976, the bank had total commercial bank deposits aggregating $24.9 million.
On June 6, 1977, this Office granted preliminary approval for the organization of Charter Bank. Charter
Bank was organized by principals of Huntington Baneshares Incorporated, Columbus, Ohio, and, to date,
has no operating history. The primary significance of
Charter Bank is to act as the vehicle for the acquisition

$25,173,000
120,000

In
To be
operation operated
2
0
2

25,490,000

of Merging Bank by the registered multi-bank holding
company; as such, it would merely combine an existing commercial bank with a non-operating entity. Accordingly, the proposal would produce no adverse impact upon any relevant area of consideration.
This application is thus deemed to be not adverse to
the public interest and should be, and hereby is, approved.
September 23, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed merger is part of a plan through which
Central National Bank of London would become a subsidiary of Huntington Bancshares Incorporated, a bank
holding company. The instant merger, however, would
merely combine an existing bank with a non-operating
institution; as such, and without regard to the acquisition of the surviving bank by Huntington Bancshares
Incorporated, it would have no effect on competition.

THE CITY NATIONAL BANK OF BRYAN,
Bryan, Tex., and New City National Bank of Bryan, Bryan, Tex.
Banking offices
Total
assets

Names of banks and type of transaction

The City National Bank of Bryan, Bryan, Tex. (4070), with
and New City National Bank of Bryan, Bryan, Tex. (4070), which had
merged Nov. 1, 1977, under charter of the latter bank (4070) and title "The City National
Bank of Bryan." The merged bank at date of merger had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency requesting prior permission to merge The



$64,694,000
243,000
65,190,000

In
To be
operation operated
1
0
1

City National Bank of Bryan, Bryan, Tex. ("Merging
Bank"), into New City National Bank of Bryan (organizing), Bryan, Tex. ("Charter Bank"), under the charter of
New City National Bank of Bryan, and with the title of
131

The City National Bank of Bryan. The subject application rests upon an agreement executed between the
proponent banks, incorporated herein by reference,
the same as if fully set forth.
Merging Bank commenced operations as a national
banking association on February 1, 1886, and as of
December 31, 1976, had total commercial bank deposits of $54.8 million.
This Office, on June 10, 1977, granted preliminary
approval for the organization of Charter Bank. Organized by principals of First City Bancorporation of
Texas, Inc., Houston, Tex., a registered multi-bank
holding company, to date, Charter Bank has no
operating history and its main significance is to serve
as the vehicle for the acquisition of Merging Bank by
the bank holding company.
Accordingly, the subject proposal would merely

combine an existing commercial bank with a nonoperating entity; as such, it would produce no adverse
effect upon any relevant area of consideration.
The application is therefore regarded as being not
adverse to the public interest, and is hereby approved.

September 19, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed merger is part of a plan through which
City National Bank of Bryan would become a subsidiary of First City Bancorporation of Texas, Inc., a bank
holding company. The instant merger, however, would
merely combine an existing bank with a non-operating
institution; as such, and without regard to the acquisition of the surviving bank by First City Bancorporation
of Texas, Inc., it would have no effect on competition.

FIRST NATIONAL BANK OF MERCER COUNTY,
Celina, Ohio, and The Central Trust Company of Mercer County, National Association, Celina, Ohio
Banking offices
Total
assets *

Names of banks and type of transaction

First National Bank of Mercer County, Celina, Ohio (5523), with
and The Central Trust Company of Mercer County, National Association, Celina, Ohio (5523),
which had
merged Dec. 2, 1977, under charter of the latter bank (5523) and title "First National Bank
of Mercer County." The merged bank at date of merger had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency pursuant to the Bank Merger Act (12 USC
1828(c)), requesting prior approval to merge First National Bank of Mercer County, Celina, Ohio ("Merging
Bank"), into Central Trust Company of Mercer County,
National Association (organizing), Celina, Ohio ("Charter Bank"), under the charter of Central Trust Company
of Mercer County, National Association and with the
title of First National Bank of Mercer County. The subject application rests upon an agreement executed between the proponent banks, incorporated herein by
reference, the same as if fully set forth.
The Office of the Comptroller of the Currency, on
June 21, 1977, granted preliminary approval to organize Charter Bank and, to date, Charter Bank has no
operating history.
Merging Bank has operated under national banking
association charter number 5523 since July 31, 1900.
As of March 31, 1977, Merging Bank had total deposits of $66.6 million.
Charter Bank was organized by principals of the
eighth largest banking organization headquartered
within the state of Ohio, The Central Bancorporation,
Inc., Cincinnati, Ohio ("Central"), a registered multi* Asset figures are as of call dates immediately before and after
transaction.

132



In
To be
operation operated

$75,540,000

6

120,000

0

80,822,000

bank holding company which controls nine commercial banking subsidiaries with total deposits of approximately $1.1 billion.
Merging Bank is the largest bank domiciled within
Mercer County and is situated approximately 11 miles
from Central's closest existing subsidiary in St. Marys,
Ohio.
The primary purpose of Charter Bank is to serve as
the vehicle for the acquisition of all of Merging Bank's
voting shares (less directors' qualifying shares) by
Central. Accordingly, the effect of this proposal is
merely to combine a non-operating entity with an existing commercial bank and would cause no adverse impact upon any relevant area of consideration.
This application is, therefore, regarded as being not
adverse to the public interest and should be, and
hereby is, approved.
October 27, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed merger is part of a plan through which
First National Bank of Mercer County would become a
subsidiary of Central Bancorporation, Inc., a bank
holding company. The instant merger, however, would
merely combine an existing bank with a non-operating
institution; as such, and without regard to the acquisition of the surviving bank by Central Bancorporation,
Inc., it would have no effect on competition.

THE FIRST NATIONAL BANK, DAYTON, OHIO,
Dayton, Ohio, and New National Bank, Dayton, Ohio
Banking offices
Total
assets

Names of banks and type of transaction

The First National Bank, Dayton, Ohio, Dayton, Ohio (1788), with
and New National Bank, Dayton, Ohio (1788), which had
merged Dec. 29, 1977, under charter of the latter bank (1788) and title "The First National
Bank." The merged bank at date of merger had

COMPTROLLER'S DECISION

18
0
18

375,971,000

Governors of the Federal Reserve System, granted its
prior approval, pursuant to 12 USC 1842(a)(3), for National City Corporation to acquire 100 percent of the
outstanding voting shares of the successor by merger
to FNB. The primary function of Charter Bank is, therefore, to serve as the vehicle for the acquisition of FNB
by National City Corporation. Accordingly, approval of
this application would have the effect of merely combining a non-operating institution with an existing commercial bank, and as such, would have no adverse effect upon any relevant area of consideration.
The application is thus deemed to be not adverse to
the public interest, and should be, and hereby is, approved.
November 29, 1977.

Pursuant to applicable provisions of 12 USC 1828(c),
an application has been filed with the Comptroller of
the Currency requesting his prior permission to merge
The First National Bank, Dayton, Ohio, Dayton, Ohio
(i:FNB"), the merging bank, into New National Bank
(organizing), Dayton, Ohio ("Charter Bank"), under the
charter of New National Bank and with the title of "The
First National Bank." The subject application rests
upon an agreement executed between the proponent
banks, incorporated herein by reference, the same as
if fully set forth.
The Office of the Comptroller of the Currency, by an
action dated September 20, 1977, granted preliminary
approval for the organization of Charter Bank. The new
national banking association charter application was
sponsored by principals of Ohio's third largest banking
organization, National City Corporation, Cleveland,
Ohio, a registered multi-bank holding company which
controls six banks with aggregate deposits of $1.7 billion. To date, the Charter Bank has no operating history.
FNB was chartered as a national banking association on February 11, 1871, and as of June 30, 1977,
FNB had total deposits of $310.6 million.
By action dated November 16, 1977, the Board of
*

$375,730,000
241,000

In
To be
operation operated

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

*

AMERICAN NATIONAL BANK,
Humble, Tex., and Allied Humble Bank, N.A., Humble, Tex.
Names of banks and type of transaction

Total
assets *

American National Bank, Humble, Tex. (15809), with
and Allied Humble Bank, N.A., Humble, Tex. (15809), which had
merged Dec. 30, 1977, under charter of the latter bank (15809) and title "Allied Humble
Bank, N.A." The merged bank at date of merger had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency seeking prior consent to the proposed
merger of American National Bank, Humble, Tex.
("Merging Bank"), into Allied Humble Bank, N.A. (organizing), Humble, Tex. ("Charter Bank"), under the
charter and title of Allied Humble Bank, N.A. The sub*Asset figures are as of call dates immediately before and after
transaction.



$19,365,000
120,000
20,835,000

Banking offices
In
To be
operation operated
1
0
1

ject application rests upon an agreement executed between the proponent banks, incorporated herein by
reference, the same as if fully set forth.
Merging Bank has operated under national banking
association charter number 15809 since June 17,
1970. As of June 30, 1977, Merging Bank's total commercial bank deposits aggregated $17.9 million.
The Office of the Comptroller of the Currency, in a
letter dated October 12, 1977, granted preliminary approval for the organization of Charter Bank and, to
133

date, Charter Bank has no operating history. On November 3, 1977, the Board of Governors of the Federal
Reserve System granted its prior approval to an application submitted pursuant to the Bank Holding Company Act of 1956 (12 USC 1842(a)(3)) for the acquisition of 100 percent of the voting shares of the successor by merger to American National Bank, Humble,
Tex. by the tenth largest banking organization in
Texas, Allied Bancshares, Inc., Houston, Tex., a registered multi-bank holding company.
The primary function of Charter Bank is to act as the
vehicle for the acquisition of Merging Bank by Allied
Bancshares, Inc. and the transaction would merely
combine a non-operating institution with an existing
commercial bank. Accordingly, this proposal would
produce no adverse consequence upon any relevant
area of consideration.

This application is therefore deemed to be not adverse to the public interest and should be, and hereby
is, approved.
November 22, 1977.

SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed mergers are part of a plan through
which American National Bank and First National Bank
of Newton, would become subsidiaries of Allied Bancshares, Inc., a bank holding company. The instant
mergers, however, would merely combine existing
banks with non-operating institutions; as such, and
without regard to the acquisition of the surviving banks
by Allied Bancshares, Inc., they would have no effect
on competition.

THE FIRST NATIONAL BANK OF NEWTON,
Newton, Tex., and Allied First National Bank, Newton, Tex.
Banking offices
Names of banks and type of transaction

Total
assets *

The First National Bank of Newton, Newton, Tex. (12898), with
and Allied First National Bank, Newton, Tex. (12898), which had
merged Dec. 30, 1977, under charter of the latter bank (12898) and title "Allied First
National Bank." The merged bank at date of merger had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency seeking prior consent to the proposed
merger of The First National Bank of Newton, Newton,
Tex. ("Merging Bank"), into Allied First National Bank
(organizing), Newton, Tex. ("Charter Bank"), under the
charter and title of Allied First National Bank. The subject application rests upon an agreement executed between the proponent banks, incorporated herein by
reference, the same as if fully set forth.
Merging Bank has operated under national banking
association charter number 12898 since March 6,
1926. As of June 30, 1977, Merging Bank's total commercial bank deposits aggregated $10.8 million.
The Office of the Comptroller of the Currency, in a
letter dated October 12, 1977, granted preliminary approval for the organization of Charter Bank; to date,
Charter Bank has no operating history. On November
3, 1977, the Board of Governors of the Federal Reserve System granted its prior approval to an application submitted pursuant to the Bank Holding Company
Act of 1956 (12 USC 1842(a)(3)) for the acquisition of
100 percent of the voting shares of the successor by
*Asset figures are as of call dates immediately before and after
transaction.

134



in
To be
operation operated

$12,318,000
60,000
13,720,000

merger to The First National Bank of Newton, Newton,
Tex. by the tenth largest banking organization in Texas,
Allied Bancshares, Inc., Houston, Tex., a registered
multi-bank holding company.
The primary function of Charter Bank is to act as the
vehicle for the acquisition of Merging Bank by Allied
Bancshares, Inc. Thus, the transaction would merely
combine a non-operating institution with an existing
commercial bank. Accordingly, this proposal would
produce no adverse consequence upon any relevant
area of consideration.
This application is, therefore, deemed to be not adverse to the public interest and should be, and hereby
is, approved.
November 22, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed mergers are part of a plan through
which American National Bank and First National Bank
of Newton, would become subsidiaries of Allied Bancshares, Inc., a bank holding company. The instant
mergers, however, would merely combine existing
banks with non-operating institutions; as such, and
without regard to the acquisition of the surviving banks
by Allied Bancshares, Inc., they would have no effect
on competition.

THE FRANKLIN NATIONAL BANK,
Franklin, Ohio, and The Huntington National Bank of Franklin, Franklin, Ohio
Banking offices
Total
assets *

Names of banks and type of transaction

The Franklin National Bank, Franklin, Ohio (5100), with
and The Huntington National Bank of Franklin, Franklin, Ohio (5100), which had
merged Dec. 31,1977, under charter of the latter bank (5100) and title "The Huntington
National Bank of Franklin." The merged bank at date of merger had

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency requesting prior permission to effectuate a
merger of The Franklin National Bank, Franklin, Ohio
("Merging Bank"), into The Huntington National Bank
of Franklin (organizing), Franklin, Ohio ("HNB"), the
charter bank, under the charter and title of The Huntington National Bank of Franklin. The subject application rests upon an agreement executed between the
proponent banks, incorporated herein by reference,
the same as if fully set forth.
On July 5, 1977, the Office of the Comptroller of the
Currency granted preliminary approval for the organization of HNB; to date, the charter bank has no operating history.
Merging Bank has operated pursuant to national
banking association charter number 5100 since December 8, 1897. As of December 31, 1976, Merging
Bank had total deposits of $24.8 million.
HNB was organized by principals of Huntington Na-

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

In
To be
operation operated

$31,785,000
120,000
32,985,000

tional Bancshares Incorporated, Columbus, Ohio, a
registered multi-bank holding company which, as of
year-end 1976, controlled 12 banking subsidiaries with
commercial bank deposits aggregating $1.4 billion.
The combination of HNB and Merging Bank would
have merely the effect of combining a non-operating
entity with an existing commercial banking institution
and, as such, would produce no adverse effect upon
any relevant area of consideration.
Accordingly, applying the statutory criteria, it is the
conclusion of this Office that the proposal consioered
herein is not adverse to the public interest and the application should be, and hereby is, approved.
November 17, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed merger is part of a plan through which
Franklin National Bank would become a subsidiary of
Huntington Bancshares Incorporated, a bank holding
company. The instant merger, however, would merely
combine an existing bank with a non-operating institution; as such, and without regard to the acquisition of
the surviving bank by Huntington Bancshares Incorporated, it would have no effect on competition.

RANDOLPH FIELD NATIONAL BANK,
Universal City, Tex., and Randolph Field Bank of Commerce, N.A., Universal City, Tex.
Names of banks and type of transaction

Total
assets *

Randolph Field National Bank, Universal City, Tex. (15236), with
and Randolph Field Bank of Commerce, N.A., Universal City, Tex. (15236), which had . .
merged Dec. 31, 1977, under charter of the latter bank (15236) and title "Randolph Field
National Bank." The merged bank at date of merger had

COMPTROLLER'S DECISION
Pursuant to 12 USC 1828(c), a merger application has
been filed with the Office of the Comptroller of the Currency, requesting prior permission to effectuate a
merger of Randolph Field National Bank, Universal
City, Tex. ("Merging Bank"), into Randolph Field Bank
of Commerce, N.A. (organizing), Universal City, Tex.
("Charter Bank"), under the charter of Randolph Field
Bank of Commerce, N.A., and with the title of Ran*Asset figures are as call dates immediately before and after transaction.



$22,599,000
120,000
23,902,000

Banking offices
In
To be
operation operated
1
0
1

dolph Field National Bank. The subject application
rests upon an agreement executed between the proponent banks, incorporated herein by reference, the
same as if fully set forth.
Merging Bank has operated under national banking
association charter number 15236 since January 2,
1964. As of December 31, 1976, the bank held total
deposits of $16.4 million.
By action dated October 14, 1977, this Office
granted its preliminary approval for the organization of
Charter Bank which, to date, has no operating history.
Charter Bank's application to organize was sponsored
135

by principals of National Bancshares Corporation of
Texas, San Antonio, Tex. ("NBC"), a registered multibank holding company that presently owns 53.4 percent of the outstanding voting shares of Merging Bank.
The primary function of Charter Bank is, therefore, to
serve as the vehicle for the acquisition of Merging
Bank by NBC and, thus the transaction would have no
adverse effect upon any relevant area of consideration.
As noted above, NBC currently exercises majority
control over Merging Bank through its 53.4 percent
ownership of Merging Bank's stock. In passing upon
the application for the chartering of Charter Bank, this
Office considered, among other factors, the business
reasons for NBC eliminating Merging Bank's minority
shareholders' interests, the treatment of those minority
shareholders and the benefits and convenience to the
banking public within the Universal City area. Therefore, applying the statutory criteria, it is the conclusion
of this Office that this application is not adverse to the
public interest or the minority shareholders and

should be, and hereby is, approved, subject to the following condition: Evidence must be presented to this
Office that a minimum of 90 percent of the total outstanding voting shares of Merging Bank, have been
voted in the affirmative for this proposed merger, and
such evidence must be submitted to the Office of the
Comptroller of the Currency prior to consummation of
the proposal.
December 1, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The proposed merger is part of a plan through which
Randolph Field National Bank would become a subsidiary of National Bancshares Corporation of Texas, a
bank holding company. The instant merger, however,
would merely combine an existing bank with a nonoperating institution; as such, and without regard to
the acquisition of the surviving bank by National Bancshares Corporation of Texas, it would have no effect
on competition.

///. Mergers approved but in litigation.
THE SECOND NATIONAL BANK AND TRUST COMPANY OF LEXINGTON,
Lexington, Ky., and Bank of Lexington, Lexington, Ky.
Names of banks and type of transaction
Bank of Lexington, Lexington, Ky., and The Second National Bank and Trust Company of Lexington, Lexington, Ky. (2901), applied for permission
to merge Aug. 18, 1976, under charter of the latter bank (2901) and title "Second National/Bank of Lexington." The application was approved Apr.
27, 1977. The pending merger was challenged by Justice Department May 26, 1977, and is presently in litigation.

COMPTROLLER'S DECISION
Application has been made to the Comptroller of the
Currency for prior permission to merge Bank of Lexington, Lexington, Ky. ("BL"), the merging bank, and
The Second National Bank and Trust Company of Lexington, Lexington, Ky. ("SNB"), the charter bank, under the charter of The Second National Bank and Trust
Company of Lexington, Lexington, Ky., and with the
title of "Second National/Bank of Lexington." The application rests upon an agreement executed between
the proponent banks which is incorporated herein by
reference.
SNB received its charter as a national banking association on March 15, 1883, and as of December 31,
1976, held total commercial bank deposits of $81.8
million.
BL is a state-chartered bank which commenced operations in 1966. As of December 31, 1976, BL had
total deposits of $52.3 million.
Geographic Market
This application represents the first participation in a
merger, consolidation or purchase and assumption
transaction for both SNB and BL. For purposes of anal136



ysis and consideration of impact, it is the opinion of
this Office that the relevant geographic banking market to be considered herein is approximated by the
Lexington, Ky. Standard Metropolitan Statistical Area
("SMSA") which consists of the counties of Bourbon,
Clark, Jessamine, Scott and Woodford and, in addition, an area that is coterminous with Fayette County
but which is presently designated as "LexingtonFayette Metro Government." Within the Lexington
SMSA, there are 22 commercial banks operating a total of 80 banking offices. SNB operates seven
branches and ranks as the fifth largest commercial
bank headquartered within the market. The seventh
largest bank within the market, BL, operates a total of
six banking offices. On a pro forma basis, the resulting
bank would control approximately 10-percent of total
market deposits and rank as the fourth largest banking
institution in the SMSA.
This Office regards the present SMSA as the relevant geographic market despite the view expressed in
the Justice Department advisory opinion that only Fayette County, the legal branching area, should be so
considered. Fayette County was also considered the
relevant geographic market in a 1964 case decided by

the U. S. Supreme Court (U.S. vs. First National Bank
and Trust Company of Lexington, 376 U.S. 665 (1964).1
We believe that the Justice advisory opinion did not
give sufficient weight to the substantial changes which
have taken place in Fayette County and the surrounding counties since 1964. Since then there has been an
increasing economic integration within the 6-county
area which has resulted in its designation as a Standard Metropolitan Statistical Area. The present Lexington SMSA was also determined to be the relevant geographic market area in the advisory opinions of the
Board of Governors of the Federal Reserve System
and the Federal Deposit Insurance Corporation.
Reflecting some of the changes that have occurred
since the First National Bank decision is the fact that
Fayette County is no longer a legal entity. The city of
Lexington and Fayette County were merged several
years ago into the Lexington-Fayette Urban Government Area, more commonly known as LexingtonFayette Metro Government. Creation of the Metro Government Area reflected Fayette County's rapid growth
of population, the increasingly extensive urbanization
of the county and its economic integration with the city
of Lexington.
Since the early 1960's, a large number of manufacturing plants have located within the Lexington SMSA,
but most of that expansion has been within the counties outside the former Fayette County. Residential
growth outside the Metro Government Area has accelerated in recent years, reflecting not only the geographic dispersion of employment opportunities but
also limitations affecting further growth in the Metro
Government Area, e.g., land prices and land-use restrictions. At the same time, Lexington has also experienced major growth and development as a retail trade
center. The pattern of development within the SMSA is
that an increasing proportion of the population resides
outside the Lexington-Fayette Metro Government Area,
that future expansion in manufacturing employment will
be mainly outside the Metro Area, and that the Metro
Area will be the retail-trade services center of the
SMSA.
At the present time, about two-thirds of the population in the SMSA reside within the Metro Government
Area. The residents of the Metro Government Area receive approximately 70 percent of the annual personal
income from the SMSA. Applicant claims that, depending upon the type of function involved, BL and SNB
derive between 10 percent and 30 percent of their deposit and loan business from SMSA areas outside the
Lexington-Fayette Metro Government Area. Data are
not available to estimate the proportion of business
that other banks within the Metro Government Area derive from the non-Metro portion of the SMSA nor are
data available to estimate the proportion of business
that non-Metro banks attract from the Metro Area.
As additional empirical evidence indicating that the
relevant geographic market is the present SMSA, there
is evidence indicating that The Second National Bank
has a heavier preponderance of agricultural loans than
other banks headquartered in Lexington. (Second National Bank's ratio is 13.2 percent of gross loans, less
personal loans, as opposed to 7.3 percent for all other



Lexington banks.) Considering that about two thirds of
the inhabitants of the Lexington SMSA reside within the
Metro Government Area, a significant proportion of
these loans have been made outside the Metro Government Area in the more rural portions of the SMSA.
In view of the growth and changes that have taken
place since the early 1960's, we find that the Lexington
SMSA is the appropriate relevant section of the country for evaluation of the competitive effects of the proposed merger of BL and SNB.
Negative Effects on Competition
Some existing and potential competition between the
merging banks will be eliminated. The head offices of
SNB and BL are located approximately 0.3 mile apart
in the downtown center area of the city of Lexington. In
one instance, the Woodhill Drive area, branches of the
two proponent banks are situated directly across the
street from each other. Two other offices of SNB are
located within approximately 0.5 mile of two branches
of BL. In all four cases, there are no intervening offices
of competing banks. The maximum distance separating any two offices of the charter bank and the merging bank is approximately 2.4 miles. Additionally, in
accordance with applicable Kentucky branching statutes which limit branching to the county within which a
commercial bank is headquartered, all offices of the
proponent banks are domiciled within the Metro Government area. It is, therefore, evident that approval of
this proposal would have the effect of eliminating some
degree of existing competition between SNB and BL.
However, in terms of the whole market, the degree
does not appear to be "substantial".
Positive Effects on Competition
Currently, BL does not offer trust services to its customers. A major basis for pursuing this merger, according to the record, is to enable the surviving bank to
more effectively compete for trust business. There now
exists a large volume of trust business within the board
of directors of the merging bank which, absent this
proposal, if placed locally, must be put into the hands
of a competing bank. That increased trust business
alone would enable the resultant bank to compete
more effectively and provide a much more viable
source of trust services to the banking public by the
expansion of SNB's present trust assets and the probable attraction of additional business.
Branch expansion by the market's largest bank was
prohibited from 1967 to 1972 under a consent decree
that resulted from a merger in 1961.2 (The bank currently operates 12 branches and 2 CBCT's.) As presently constituted, neither SNB nor BL could afford, on
its own, to meet the increased branching competition
inasmuch as both banks have reached their respective
maximum level for fixed asset investments.
The relevant banking market is one which may properly be characterized as having an intense and ag1

Only Fayette County was considered the SMSA at the time of this
decision.
2
United States v. First National Bank and Trust Company of Lexington, 376 U.S. 665(1964).

137

gressive competitive atmosphere within which the
area's banks must operate, notwithstanding that the
banking resources of the area are concentrated. The
largest bank in the market, First Security National Bank
& Trust Co., controls approximately 31 percent of the
total commercial bank deposits derived from the relevant geographic market and almost 75 percent of the
market area's trust assets are in the hands of this institution.3 Central Bank & Trust Co., the second largest
bank headquartered within the relevant market, serves
as the "lead bank" for a group of six banks located
within the Lexington SMSA, known as "The Kentucky
Group." This de facto multi-bank holding company
controls, in the aggregate, almost 24 percent of the
market's total deposits. Also, the third largest bank,
Citizens Union Bank, holds 11 percent of total deposits
within the area. Thus, almost two-thirds of the market's
total commercial bank deposits are concentrated
among the three largest banking organizations.
In addition to applicable state branching statutes
that prohibit branching across the political boundaries
of counties, state statutes also prohibit multi-bank
holding companies; there is virtually no prospect of entry by banking organizations headquartered outside
the market area. The two dominant banking organizations are thereby insulated from meaningful competitive challenge- from banking organizations of comparable size located elsewhere within the state. Any significant competitive challenge to these dominant banking
organizations must come from the other banking organizations located within the market. The charter
bank and the merging bank have tended to specialize
in different deposit, loan and investment activities.
(SNB's deposit business has been oriented toward the
more affluent income levels and to public funds in
comparison to BL's relatively large number of small individual accounts and SNB has specialized in real estate mortgage loans and agriculturally related loans,
whereas BL has emphasized construction lending and
small business loans.) This "dovetailing" of operations
is complementary, not opposing, and will enable the
merged bank to be a more meaningful banking alternative and a far more viable competitor. The end
result should prove to be procompetitive by the creation of a vibrant challenger to the dominant banking
institutions within the market. Although a competitive
entity would be eliminated, there would remain sufficient competing banking alternatives to adequately
serve the banking public. It is thus the opinion of this
Office that the adverse competitive effects of this
merger, through the elimination of existing competition
between SNB and BL, will not diminish substantially
the degree of competition existent among all of the
commercial banking institutions represented within the
relevant market; nor is there any apparent trend toward the creation of any monopoly or any restraint of
trade.
3

In 1964, the Antitrust Division of the U.S. Department of Justice
alleged that trust business within Fayette County was monopolized
by Security Trust Company and First National Bank and Trust Company of Lexington (now, First Security National Bank & Trust Co.).
See United States v. First National Bank and Trust Company of Lexington, 376 U.S. 665 (1964).

138




Based upon the foregoing analysis of the relevant
geographic market, we do not find that the lessening
of competition within the area, as a result of the
merger, will be substantial or tend to create a monopoly, therefore, it is not necessary to determine that the
convenience and needs of the public clearly outweigh
the anticompetitive effects of this merger.
The merged bank should be able to compete more
effectively with First Security Corporation and The Kentucky Group. In particular, the merged bank would be
positioned to be ready to meet the re-entry of First Security into the trust business upon the expiration of the
consent decree in 1977. BL does not now have a trust
department and is not in a good position to establish
one.
The resulting bank will also be in a better position to
develop a greater degree of specialization in various
types of commercial and agricultural credits. Supplemental services such as data processing, wire transfers and "money desk" functions are to be offered. An
increased loan limit will of course, facilitate the merged
bank's competitive power.
Banking Factors
Probably the strongest arguments in favor of the
merger lie in the banking factors. BL lacks depth in
management which will be remedied by the merger.
Through better application of personnel to current duplicative functions, the merged bank will be able to
"buy some time" in the development of its managerial
resources, in general, and will have a stronger senior
management team.
BL has had an earnings problem, at least partly due
to the high costs of penetrating the local banking market. BL's low earnings pose obvious constraints upon
its further growth and development as well as on the
accumulation of more adequate reserves against adverse contingencies.
Both banks could use improvement in their capital
positions. The earnings problem at BL is an obstacle
to the sale of additional stock and SNB has been a
closely held "family" bank. The merged bank therefore
should be better positioned to raise capital.
Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that the elimination of direct and potential competition between SNB and BL will not constitute a
"substantial" lessening of competition within the meaning of 12 USC 1828(c) in the relevant geographic market (Lexington SMSA). Even if it did, we find the anticompetitive effect to be "clearly outweighed in the
public interest by the probable effect of the transaction
in meeting the convenience and needs of the community to be served."
The future prospects of both SNB and BL, independently, are considered generally satisfactory, but in
combination are regarded as significantly more favorable. Approval of this proposal will favorably impact
upon the future prospects of the combined institutions
and adds additional weight to approval of this application.
In view of the improved financial and managerial resources, competitive ability, and more favorable future
prospects of the proposed institution, and the absence

of significant negative effects, we find the subject application to be in the public interest and it is, hereby,
approved.
April 27, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
The head offices of Applicant and Bank are located
0.3 mile apart in the center of Lexington. The Woodhill
Drive offices of the two banks are directly across the
street from each other. Applicant's New Circle Road
office is 0.2 mile from Bank's North Park office and
there are no competing bank offices between them.
Applicant's Gardenside office is 0.6 miles from Bank's
Versailles Road office. It is apparent that the proposed
merger will eliminate substantial direct competition between Applicant and Bank in Fayette County.
Fayette County is currently served by seven banks
operating 50 offices. Among these Applicant ranks

fourth and Bank sixth with 9.1 and 4.8 percent of total
deposits, respectively. Banking is highly concentrated
in Fayette County; as of December 31, 1975 the two
largest banks held 61.9 percent of total deposits, the
three largest banks held 76.8 percent of total deposits
and the four largest banks held 85.9 percent of total
deposits. If the proposed merger were consummated,
the resulting bank would hold 14 percent of total deposits, and the four largest of the then existing six
banks would hold 90.7 percent of total deposits. Moreover, Fayette County is insulated from de novo entry
by banking organizations headquartered outside of the
county, since present Kentucky law prohibits banks
from branching across county lines and also prohibits
multi-bank holding companies.
For these reasons, we conclude that the proposed
merger would have a significantly adverse effect on
competition.

IV. Mergers denied.
FIRST PEOPLES NATIONAL BANK OF NEW JERSEY,
Haddon Township, N.J., and The Mainland Bank, Linwood, N.J.
Names of banks and type of transaction
First Peoples National Bank of New Jersey, Haddon Township, N.J. (399), was denied permission on Dec. 1, 1977, to purchase The Mainland
Bank, Linwood, N.J.

COMPTROLLER'S DECISION
Pursuant to 12 USC 1828(c), application has been
made to the Comptroller of the Currency seeking prior
consent for First Peoples National Bank of New Jersey,
Haddon Township (P.O. Westmont), N.J. ("FPNB"), the
purchasing bank, to purchase the assets and assume
the liabilities of The Mainland Bank, Linwood, N.J.
("Mainland"), the selling bank. The subject application
rests upon an agreement executed between the proponent banks which is incorporated herein by reference, the same as if fully set forth.
FPNB, operating under national banking association
charter number 399, commenced operations in 1864.
As of March 31, 1977, the purchasing bank had total
deposits of $583.3 million. FPNB's principal area of operation is Camden County wherein it operates 15
banking offices, including its main office. FPNB also
operates 30 other branch offices throughout the southern portion of New Jersey.
Mainland was organized in 1972 and, as of March
31, 1977, the bank's total deposits were $31.9 million.
Mainland operates its main office and four branches in
the eastern portion of Atlantic County, and holds less
than 6 percent of total commercial bank deposits
within the county.
FPNB currently operates one branch in northwestern
Atlantic County (Hammonton Office), bordering on
Camden County. The nearest offices of FPNB and
Mainland are the two offices of FPNB inTuckerton, approximately 7 and 8 miles distant from Mainland's Pomona Office. Additionally, FPNB's Ocean View Office



is about 10 miles south of Mainland's southernmost
branch. There are, however, numerous intervening
banks that provide competition and Mainland is subject to the competitive impact of numerous and substantially larger Atlantic City-based banks. It is therefore concluded that approval of this proposal would
have only a slightly adverse effect upon existing competition.
Pursuant to applicable New Jersey branch statutes,
FPNB could legally expand de novo into Mainland's
service areas. Inasmuch as FPNB has undergone significant expansion in recent years (presently the 12th
largest commercial banking institution headquartered
in New Jersey), primarily via merger and purchase acquisition of smaller banks, this proposed acquisition
would foreclose the potential for future competition between the proponent banks.
FPNB has stated its intent to offer new and expanded banking services to the customers of Mainland. Furthermore, approval of this proposal would
have the effect of eliminating a relatively small, presently ineffectual competitor by replacing it with a larger
more aggressive competitor. The potential for FPNB to
offer expanded and better services to customers now
served by Mainland is a positive factor in considering
approval of this application, particularly in relation to
considerations of convenience and needs benefits.
As previously stated, FPNB has undergone an extensive and rapid expansion during the recent past. In
1969, FPNB's deposits totaled $117.3 million, and it
operated a branch network of 14 offices. Since that
139

time, FPNB has merged with, or purchased, seven
smaller institutions and has opened 17 de novo branch
offices. (FPNB acquired 13 of its total 45 offices as a
result of merger transactions during this period.) This
accelerated growth has placed considerable strain
upon both the purchasing bank's capital and senior
management. Although FPNB's net earnings have increased in recent years, those earnings have been
largely supplemented by pre-tax securities transactions. The bank's capital resources have been required to support an inordinate and increasing volume
of resources primarily due to rapid growth. Stated
briefly, deposit and asset growth have outpaced capital.
Of particular concern to this Office is the thin line of
executive management and the need for additional senior management in FPNB. FPNB has demonstrated
an ability to generally cope with problems inherited
from past acquisitions, and its management has provided the direction required by those institutions. The
myriad problems now confronting Mainland, however,
would place a substantial additional strain upon
FPNB's senior management, thereby further diverting
the attention of FPNB's management from addressing
existing problems of that bank.
Accordingly, applying the statutory criteria, it is the
conclusion of the Office of the Comptroller of the Currency that the financial and managerial resources of
FPNB do not warrant further expansion, by acquisition,
at this time. Furthermore, it is the opinion of this Office
that the attention of FPNB's senior management should
be directed toward correcting internal deficiencies and
not toward incurring any additional problems through
acquisition. The application is, hereby, denied.
December 1, 1977.
SUMMARY OF REPORT BY ATTORNEY GENERAL
Although Applicant operates only one branch within
Atlantic County at present, it operates ten branches
within approximately 15 miles of existing branches of
Bank. Applicant's branches in Tuckerton, Ocean
County, are approximately 8 miles from Bank's Pomona branch; in addition, Applicant's Ocean View,

140




Cape May County, branch is approximately 10 miles
south of Bank's southernmost branch. However, there
are numerous intervening banks that provide considerable competition and also Bank experiences competition from nearby Atlantic City area banks. The proposed acquisition thus would eliminate some existing
competition.
Defining the relevant market to includ'e the Cape
May and Atlantic County markets as well as portions of
Cumberland, Ocean and Burlington counties adjacent
to Bank's principal trade area (an area that somewhat
overstates the relevant market), Applicant states that
22 institutions operate 144 offices in that market; that
Applicant's 16 offices hold 10 percent of the total deposits in that area; and that Bank's share of total deposits is 2.1 percent in that market. Thus, while the
parties' trade areas overlap to some extent, there is
significant competition overall within the trade area. It
therefore appears that the proposed acquisition will
have slightly adverse effects on present competition.
Applicant, the 12th largest banking institution in New
Jersey, is a significant competitor in several markets
surrounding the communities comprising Bank's principal trade area. New Jersey law, which permits de
novo branching by commercial banks in any municipality in the state except for those in which another
banking institution maintains its principal office and
whose population is less than 10,000, allows Applicant
to enter Bank's service areas de novo. Applicant has
undergone significant expansion in recent years principally by merger with smaller institutions. Given the
likelihood of expanding growth in the eastern Atlantic
County market, Bank's service area would appear to
offer an attractive opportunity for de novo entry absent
the proposed acquisition. Thus, the proposed acquisition would eliminate potential competition. However,
given Bank's present financial circumstances (Bank's
operating losses as of mid-May 1977 were in excess
of $162,000), it does not appear that the proposed acquisition will have a substantial effect on potential
competition.
We conclude that, overall, the proposed acquisition
will have some adverse competitive consequences.




APPENDIX B

Statistical Tables

Statistical Tables
Table
No.
Title
Page
B-1
Comptrollers of the Currency, 1863 to
the present
143
P-2
Deputy Comptrollers of the Currency ..
144
B-3
Regional administrators of national
banks
144
B-4
Changes in the structure of the National
Banking System, by states, 1863-1977
145
B-5
Charters, liquidations and changes in
issued capital stock of national banks,
calendar 1977
146
B-6
Applications for national bank charters,
approved and rejected, by states, calendar 1977
147
B-7
Applications for national bank charters,
pursuant to corporate reorganizations,
by states, calendar 1977
148
B-8
Newly organized national banks, by
states, calendar 1977
148
B-9
Mergers consummated pursuant to corporate reorganizations, by states, calendar 1977
149
B-10 State-chartered banks converted to national banks, by states, calendar 1977 .
151
B—11 National bank charters issued pursuant
to corporate reorganizations, by states,
calendar 1977
152
B-12 National banks reported in voluntary liquidation, by states, calendar 1977
153
B-13 National banks merged or consolidated
with state banks, by states, calendar
1977
154
B-14 National banks converted into state
banks, by states, calendar 1977
154
B-15 Purchases of state banks by national
banks, by states, calendar 1977
156
B-16 Consolidations of national banks or national and state banks, by states, calendar 1977
156
B-17 Mergers of national banks or national
and state banks, by states, calendar
1977
157
B-18 Mergers resulting in national banks, by
assets of acquiring and acquired
banks, 1960-1977
160
B-19 Total assets, liabilities and equity capital
of domestic offices and subsidiaries of
national banks, United States and other
areas, June 30, 1977
161

142




Table
Title
Page
No.
Total assets, liabilities and equity capital
B-20
of domestic offices and subsidiaries of
national banks, United States and other
areas, December 31, 1977
169
B-21 Loans of national banks, by states, December 31, 1977
177
B-22 Outstanding balances, credit cards and
related plans of national banks, December31, 1977
178
B-23 National banks engaged in direct lease
financing, December 31, 1977
179
B-24 Income and expenses of foreign and
domestic offices and subsidiaries of national banks, United States and other
areas, year ended December 31, 1977 . . 180
B-25 Principal domestic assets, liabilities and
capital accounts of national banks, by
asset size, year-end 1977
196
B-26 Income and expenses of national
banks, including foreign offices, by asset
size, December 31, 1977
197
B-27 Assets and equity capital, net income
and dividends of national banks,
1967-77
198
B-28 Loan losses and recoveries of national
banks, domestic offices only, 1961-1977
199
B-29 Assets and liabilities of domestic operations of national banks, date of last report of condition, 1961-1977
200
B-30 Consolidated assets and liabilities of
national banks with foreign operations,
December 31, 1977
201
B-31 Foreign branches of national banks, by
region and country, December 31, 1977
202
B-32 Total foreign branch assets of national
banks, year-end 1953-1977
203
B-33 Foreign branches of national banks,

1960-1977
B-34
B-35

Foreign branch assets and liabilities of
national banks, December 3 1 , 1977 . . .
Trust assets and income of national
banks, by states, calendar 1977

203
203
204

Table B-1
Comptrollers of the Currency, 1863 to the present
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24

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 0. .
Williams, John Skelton
Crissinger, D.R
Dawes, Henry M
Mclntosh, Joseph W. .
Pole, John W
O'Connor, J. F. T
Delano, Preston
Gidney, Ray M
Saxon, James J
Camp, William B
Smith, James E
Heimann, John G




Date of
appointment
May
Mar.
Feb.
Apr.
May
Apr.
May
Aug.
Apr.
Jan.
Oct.
Apr.
Feb.
Mar.
May
Dec.
Nov.
May
Oct.
Apr.
Nov.
Nov.
July
July

9,
21,
1,
25,
12,
20,
2,
26,
1,
1,
27,
2,
17,
1,
20,
21,
11,
24,
16,
16,
16,
5,
21,

1863
1865
1867
1872
1884
1886
1889
1892
1893
1898
1901
1908
1914
1921
1923
1924
1928
1933
1938
1953
1961
1966
1973
1977

Date of
resignation
Mar.
July
Apr.
Apr.
Mar.
Apr.
June
Apr.
Dec.
Sept.
Mar.
Apr.
Mar.
Apr.
Dec.
Nov.
Sept.
Apr.
Feb.
Nov.
Nov.
Mar.
July

8,
24,
3,
30,
1,
30,
30,
25,
31,
30,
28,
27,
2,
30,
17,
20,
20,
16,
15,
15,
15,
23,
31,

1865
1866
1872
1884
1886
1889
1892
1893
1897
1901
1908
1913
1921
1923
1924
1928
1932
1938
1953
1961
1966
1973
1976

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.
South Dakota.
New York.

143

Table B-2
Deputy Comptrollers of the Currency
No.

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53

Dates of tenure
9, 1963 Aug.
May
Aug.
1, 1865 Jan.
Mar. 12, 1867 Apr.
8, 1872 Jan.
Aug.
5, 1886 Jan.
Jan.
Jan. 27, 1887 May
Aug. 11, 1890 Mar.
7, 1893 Mar.
Apr.
Mar. 12, 1896 Aug.
Sept. 1, 1898 June
June 29, 1899 Mar.
1, 1908 Feb.
July
May 21, 1923 Dec.
July
1, 1923 June
Jan.
6, 1925 Nov.
July
1, 1927 Feb.
July
6, 1927 Oct.
Dec. 1, 1928 Jan.
Jan. 24, 1933 Jan.
Feb. 24, 1936 Jan.
Jan. 16, 1938 Sept.
Jan. 16, 1938 Sept.
1938 Dec.
Oct.
1939 Aug.
May
1941 Mar.
July
1941 Sept.
Sept.
1944 Feb.
Oct.
1949 Aug.
Jan.
1950 May
Sept.
1951 Apr.
Mar.
Feb. 18, 1952 Dec.
Sept. 15, 1959 Aug.
May 16, 1960 Aug.
Apr.
2, 1962 Nov.
Aug.
4, 1962 Oct.
Sept. 3, 1962 July
Dec. 23, 1962
Jan.
1, 1963
July 13, 1964 June
Sept. 1, 1964 Sept.
Sept. 1, 1964 June
July 19, 1965 Oct.
1,1966
July
Feb. 21,1967 Dec.
July
5, 1973
5, 1973
July
2, 1975
Feb.
Aug. 31, 1975
Aug. 31, 1975 Nov.
Aug. 31, 1975
Aug. 31, 1975 Sept.
Aug. 31, 1975
Aug. 31, 1975

Name
Howard, Samuel T. . .
.
Hulburd, Hiland R
Knox, John Jay
Langworthy, John S. . .
Snyder, V. P
Abrahams, J. D
Nixon, R. M
Tucker, Oliver P
Coffin, George M
Murray, Lawrence O. .
Kane, Thomas P
Fowler, Willis J
Mclntosh, Joseph W. .
Collins, Charles W. . ..
Stearns, E. W
Await, F. G
Gough, E. H
Proctor, John L
Lyons, Gibbs
Prentiss, Jr., William ..
Diggs, Marshall R
Oppegard, G. J
Upham, C. B
Mulroney, A. J
McCandless, R. B
Sedlacek, L H
Robertson, J. L
Hudspeth, J.W
Jennings, L. A
Taylor, W. M
Garwood, G. W
Fleming, Chapman C. .
Haggard, Hollis S
Camp, William B
Redman, Clarence B. .
Watson, Justin T
Miller, Dean E
DeShazo, Thomas G. .
Egertson, R. Coleman .
Blanchard, Richard J. .
Park, Radcliffe
Faulstich, Albert J
Motter, David C
Gwin, John D
Howland, Jr., W. A.
Mullin, Robert A
Ream, Joseph M
Bloom, Robert
Chotard, Richard D. ..
Hall, Charles B
Jones, David H
Murphy, C. Westbrook
Selby, H. Joe

State
New York.
Ohio.
Minnesota.
New York.
New York.
Virginia.
Indiana.
Kentucky.
South Carolina.
New York.
2, 1923 District of Columbia
14, 1927 Indiana.
19, 1924 Illinois.
30, 1927 Illinois.
30, 1928 Virginia.
15, 1936 Maryland.
16, 1941 Indiana.
23, 1933 Washington.
15, 1938 Georgia.
15, 1938 California.
30, 1938 Texas.
30, 1938 California.
31, 1948 Iowa.
31, 1941 Iowa.
1, 1951 Iowa.
30, 1944 Nebraska.
17, 1952 Nebraska.

1, 1865
31, 1867
24, 1872
3, 1886
3, 1887
25, 1890
16, 1893
11, 1896
31, 1898
27, 1899

31, 1950
16, 1960
1, 1962
31, 1962
31, 1962
3, 1962
15, 1966
26, 1963
18, 1975
30, 1966
26, 1975
1, 1967
26, 1974
31, 1974

25, 1977
20, 1976

Texas.
New York.
Virginia.
Colorado.
Ohio.
Missouri.
Texas.
Connecticut.
Ohio.
Iowa.
Virginia.
Iowa.
Massachusetts.
Wisconsin.
Louisiana.
Ohio.
Mississippi.
Georgia.
Kansas.
Pennsylvania.
New York.
Missouri.
Pennsylvania.
Texas.
Maryland.
Texas.

Table B-3
Regional administrators of national banks
Region
Name
1 Charles H. Paterson
2
3
4
5
6
7
8
9
10
11
12
13
14

Charles M. Van Horn
R. Coleman Egertson
Larry T. Gerzema
Clifton A. Poole
John G. Hensel
Billy C. Wood
John W. Schaffer, Jr
Kenneth W, Leaf
John R. Burt
Michael Doman
Kent D. Glover
M. B. Adams
Victor E. DelTredici

144



Headquarters
Boston, Mass
New York, N.Y
Philadelphia, Pa
Cleveland, Ohio
Richmond, Va
Atlanta, Ga
Chicago, III
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, Puerto Rico, Virgin Islands.
Pennsylvania, Delaware.
Indiana, Kentucky, Ohio.
District of Columbia, Maryland, North Carolina, Virginia, West Virginia.
Florida, Georgia, South Carolina.
Illinois, Michigan.
Alabama, Arkansas, Louisiana, Mississippi, Tennessee.
Minnesota, North Dakota, South Dakota, Wisconsin.
Iowa, Kansas, Missouri, Nebraska.
Oklahoma, Texas.
Arizona, Colorado, New Mexico, Utah, Wyoming.
Alaska, Idaho, Montana, Oregon, Washington.
California, Guam, Hawaii, Nevada.

Table B-4
Changes in the structure of the National Banking System, by states, 1863-1977
Organized
ctiiu openeu
for business
1863-1977
O K*\ Si

/"*\ /""\ /""i

/O /~\ yrV

Consolidated and meraed
under 12> USC 215
Insolvencies

Liquidated

12 USC 214
Merged or
Converted to consolidated
with state
state banks
banks

In

operation
Dec. 31,
1977

Consolidated

Merged

6,704

730

971

2,841

6,793

322

392

4,655

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

237
9
33
174
627
290
141
32
44
400

4
0
1
1
21
5
11
0
8
2

26
0
0
3
56
4
10
0
1
41

45
0
6
39
69
59
7
1
7
43

64
2
21
55
397
86
69
18
13
48

1
0
1
4
6
3
7
0
0
0

0
1
1
0
20
0
16
8
0
3

97
6
3
72
58
133
21
5
15
263

Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine

219
8
114
457
569
465
253
130
131

8
1
0
20
14
4
6
11
4
8

6
0
2
20
8
2
4
3
3
11

43
0
35
228
98
206
77
37
17
13

89
4
65
299
205
243
198
110
53
79

9
1
2
25
7
13
19
8
0
1

0
0
4
2
4
2
1

64
2
6
423
121
99
160
82
53
17

Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire

162
403
413
527
107
354
213
416
18
91

4
45
11
8
6
13
4
2
1
4

20
30
36
0
7
12
1
3
0
13

17
28
77
116
16
59
76
83
4

69
208
158
193
36
149
76
199
8
23

3
4
3
6
4

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

505
104

57
1
127
8
3
33
12
2
112
3

97
1
132
23
0
51
11
4
123
2

63
25
132
44
100

8
14
9
45
4

All national banks

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

Puerto Rico

1,017

1,066
170
265
763
795
154

1,304
70
140
225
240
53
85
313
252
226
314
85

23
19
11
9
0

14
3
15
81
3
9
66
10
2
1
1

2
2

0
0

0
0

1,517

3

2
0
2
13
16

36
72
123
204

5

5
0
2
1
0
0
1
0

113
85
31
211
2

158
37
444
58
119
340
454
103
497
58

1
0
14
0
0
2
40
0
18
0

29
0
90
9
0
6
0
7
110
0

100
40
127
28
43
218
193
7
233
5

44
93
36
142
6
18
28
52
38
54
12

49
81
95
574
23
29
74
149
68
118
26

2
2
10
66
3
3
5
0
1
4
0

4
0
2
5
2
9
14
1
0

19
32
73
604
12
14
103
21
106
128
46

1

0

1
1

0
0

0
0

5

7
0
12
0

0
0

36
113
56
117
4
41

o
1

Does not include one non-national bank in the District of Columbia supervised by the Comptroller of the Currency.




145

Table B - 5
Charters, liquidations, and changes in issued capital stock of national banks, calendar 1977
(Dollar amounts in thousands)
Capital stock
Number of
banks
Increases:
Banks newly chartered:
Primary organization:
Conversion of State banks
Capital stock:
Preferred: 6 cases by new issue
Common:
436 cases by statutory sale
475 cases by statutory stock dividends
28 cases by statutory merger
23 cases by conversion of preferred stock
32 cases by conversion of capital notes
Capital notes and debentures: 228 cases by new issue . . . .
Total increases
Decreases:
Banks ceasing operations:
Voluntary liquidations:
Succeeded by National banks
Succeeded by State banks
Statutory consolidations
Statutory mergers
Converted into State banks
Merged or consolidated into State banks
Capital stock:
Preferred: 21 Retired
Common:
5 cases by statutory reduction
22 cases by statutory merger
Capital notes and debentures:
135 retirements
32 converted to common stock
Total decreases
Net change
Charters in force Dec. 31, 1976
Charters in force Dec. 31, 1977

60*
6

Common

Preferred

$ 27,398
13,960

Capital
notes and
debentures

$

1,000

$7,250
296,613
209,195
12,875
254
451
66

17
3
1
71t
44
11

560,746

7,250

418,657
419,657

11,906
1,549
497

175

50,583
10,491

8,017
950
2,144

2,080
15,969
35,869
1,442
147

93,075

2,144

46,453

-81
4,741

467,671

5,106

373,204

4,660

* Includes 25 reorganized banks with capital stock of $3,500.
t Includes 21 reorganized banks.
NOTE: Premium on sale of common stock
Premium on sale of convertible notes
Total

146




$232,472 (349 cases)
991 ( 32 cases)
$233,463 (381 cases)

Table B-6
Applications for national bank charters *, approved and rejected, by states, calendar 1977
ALABAMA

Approved

Rejected

Aug. 26

Vernon
ARKANSAS

Sept. 29
Aug. 15

Conway
Harrisburg
CALIFORNIA

Mar. 28
Jan. 17

Sonoma
Thousands Oaks
COLORADO

United Bank of Arvada National Association,
Arvada
Westland National Bank, Arvada
The Women's Bank, N.A., Denver
Vail National Bank, Vail

Feb. 10
Aug. 2
July 6
Mar. 31
Dec. 6

Aug. 22

NEW MEXICO

Cedar Crest
Southwest National Bank, Hobbs
Las Vegas
Roswell

Mar. 31
Dec. 22
Aug. 30
July 7
Mar. 24
June 3

Jan. 7

June 3
Coral Gables
First National Bank of West Delray, Delray
Sept. 30
Beach
Mar. 28
Unincorporated Area of Escambia County
July 11
Hialeah
Maitland
June 27
The Hemisphere National Bank, Miami
June 13
Miami
July 15
First National Bank of Jefferson County, Monticello
Sept. 29
Dec .6
Pahokee
Security Trust Company of Sarasota, N.A.,
Jan. 25
Sarasota
July 11
Tallahassee
Tampa
Feb. 2
Nov. 1
All American National Bank, Virginia Gardens . .
GEORGIA

Aug. 4

Unincorporated Area of Cobb County. . .
HAWAII

July 11

INDIANA

Aug. 11

Lafayette . . .
LOUISIANA

Oct. 13

MICHIGAN

Apr. 20
Aug. 4
July 20
Jan. 4

Cincinnati
TNB National Bank, Circleville

Apr. 28
Sept. 20

Owasso
Woodward

July 6

FLORIDA

Old Kent Bank of Norton Shores National Association, Norton Shores
Michigan National Bank - Port Huron, Port
Huron
The Detroit Bank - Sterling, N.A., Sterling
Heights
Michigan National Bank - Sterling, Sterling
Heights

MISSOURI

Commerce Bank of Clay County, National Association, Kansas City

OKLAHOMA

May 18

DISTRICT OF COLUMBIA

National Bank of Commerce of DeRidder,
DeRidder

June 3
June 14

NEW YORK

DELAWARE

Bank of Maui, National Association, Wailuku . .

Rejected

OHIO

Danbury

The Women's National Bank, Washington
Washington

Approved

Twin Tiers National Bank, Elmira
Rochester

CONNECTICUT

First National Bank of Georgetown, Georgetown

MISSISSIPPI

Brookhaven
Citizens National Bank of Columbus, Columbus.

Sept. 23
Aug. 17

PUERTO RICO

Municipality of Naranjito
Old San Juan

June 3
Oct. 6

SOUTH CAROLINA

Liberty National Bank, Charleston
Charleston

Oct. 6
Oct. 6

TEXAS
Alvin

Withdrawn

Apr. 25

Arlington
First National Bank of Dimmit County, Carrizo
Springs
May 24
Carrollton First National Bank, Carrollton
Jan. 6
First National Bank, Copperas Cove
Jan. 10
American National Bank of Dallas, Dallas
July 21
Dallas
Dallas
Euless
Overton Park National Bank, Fort Worth
July 26
Fort Worth
Fort Worth
National Bank of Commerce, Kerrville
Oct. 6
Kerrville
Lake Worth National Bank, Lake Worth
Aug. 12
Lake Worth
Longview
Southwest Lubbock National Bank, Lubbock . . .
Oct. 6
City National Bank of Piano, Piano
Jan. 13
Northwest Bank of Commerce National Association, San Antonio
Oct. 7
San Antonio
American National Bank, Texarkana
Sept. 29
Weslaco

Aug. 19
Aug. 11
June 14
Jan. 18
July 11
Oct. 17
Oct. 6
Aug. 12
July 28

Nov. 3
June 7

UTAH
Logan

.

Withdrawn

O c t . 17

WEST VIRGINIA

U n i n c o r p o r a t e d A r e a of S h a d y Springs . . .

Mar. 17

WISCONSIN

Menasha . . . .

Jan. 6

WYOMING

Mills

Mar. 31

* Does not include applications for conversion or pursuant to corporate reorganization.




147

Table B-7
Applications for national bank charters pursuant to corporate reorganizations, by states, calendar 1977
MASSACHUSETTS

Approved

Old Colony Bank of Worcester County, National
Association, Northbridge

Rejected

The Fourth National Bank of Jackson, Jackson .
Aug. 5

MICHIGAN

National Bank of Traverse City, Traverse City. . .
PBT Bank, National Association, Trenton

TENNESSEE

July 15
Aug. 17

OHIO

The Huntington National Bank of Bellefontaine,
Bellefontaine
June 3
The Central Trust Company of Mercer County,
National Association, Celina
June 15
X National Bank, Columbiana
Mar. 25
New National Bank, Dayton
Sept. 20
Second National Bank, Flushing
Sept. 23
The Huntington National Bank of Franklin,
Franklin
July 1
The Huntington National Bank of London, London
June 3
The Central Trust Company of Lorain County,
National Association, Lorain
June 15

Approved

Rejected

Jan. 3

TEXAS

New City National Bank, Austin.New City National Bank of Bryan, Bryan
Main Street Commerce Bank National Association, Dallas
South Main National Bank, Duncanville
Parkway National Bank, Grand Prairie
Allied Humble Bank, N.A., Humble
McAllen Commerce Bank National Association,
McAllen
Allied First National Bank, Newton
American Servicemen's National Bank, San
Antonio
Randolph Field Bank of Commerce, N.A., Universal City
City Bank, National Association, Wichita Falls . .

Feb. 15
June 9
May 18
Dec. 5
Apr. 7
Oct. 12
Aug. 24
Oct. 12
June 9
Oct. 14
Oct. 18

Table B-8
Newly organized national banks, by states, calendar 1977
Charter
No.

Title and location of bank
Total, United States: 35 banks

Total capital
accounts
$53,124,850

ARKANSAS

16665 First National Bank of Sheridan, Sheridan . .

1,000,000

CALIFORNIA

16645 Fidelity National Bank, Concord
16633 National Bank of Long Beach, Long Beach .
Total: 2 banks

1,500,000
1,500,000
3,000,000

COLORADO

16690 Vail National Bank, Vail

1,000,000

FLORIDA

16670
16641
16652
16642

West Broward National Bank, Lauderdale Lakes
First National Bank of Marathon, unincorporated area of Monroe County .
Security Trust Company of Sarasota N.A., Sarasota
Vero Beach National Bank, Vero Beach
Total: 4 banks

1,500,000
1,000,000
2,000,000
1,000,000
5,500,000

ILLINOIS

16643 Market Place National Bank, Champaign
16688 Washington National Bank of Chicago, Chicago
16684 The Guaranty National Bank of Rockford, Rockford
Total: 3 banks

1,000,000
1,524,850
1,500,000
4,024,850

INDIANA

16669 South Lake National Bank, Lowell

1,500,000

MICHIGAN

16660 Michigan National Bank-Farmington, Farmington Hills.
16672 Kentwood Bank, N.A., Kentwood
Total: 2 banks

1,500,000
2,500,000
4,000,000

MINNESOTA

16650 First National Bank of Burnsville, Burnsville . . .

1,700,000

NEW JERSEY

16631 City Trust Services, National Association, Elizabeth
16636 The Montgomery National Bank, Montgomery Township.
Total: 2 banks

148



1,000,000
1,620,000
2,620,000

Table B-8—Continued
Newly organized national banks, by states, calendar 1977
Charter
No.

Total
capital
accounts

Title and location of bank
NEW YORK

16646 Golden Pacific National Bank, N e w York

$ 3,500,000

NORTH DAKOTA

16661

First National Bank of Crosby, Crosby . . .

750,000

OHIO

16685 TNB National Bank, Circleville

180,000

OKLAHOMA

16637 Lakeshore Bank, N.A., Oklahoma City . . .
16659 Western National Bank of Tulsa, Tulsa . . .
Total: 2 banks

1,500,000
5,000,000
6,500,000

TEXAS

16634
16683
16635
16655
16653
16686
16658
16677
16649

Republic National Bank of Austin, Austin
First National Bank, Copperas Cove
Citizens National Bank, Denton
Sugar Creek National Bank, unincorporated area of Fort Bend County.
Las Colinas National Bank of Irving, Irving
South Texas National Bank of Laredo, Laredo
Western National Bank, Odessa
City National Bank of Piano, Piano
University National Bank, San Antonio
Total: 9 banks

1,200,000
1,000,000
1,050,000
1,200,000
1,250,000
1,650,000
2,500,000
1,750,000
1,500,000

12,550,000

WASHINGTON

16663 Pioneer National Bank, Yakima. . . .

1,500,000

WEST VIRGINIA

16675 Central National Bank, Morgantown
16687 Mountaineer National Bank, Morgantown
Total: 2 banks

1,250,000
1,000,000
2,250,000

WISCONSIN

16638 The First National Bank of Boscobel, Boscobel

1,000,000

Table B-9
Mergers consummated pursuant to corporate reorganizations, by states, calendar 1977
(Dollar amounts in thousands)
Effective
date of
merger

Operating bank
New bank
Resulting bank

Total
capital
accounts

Total
assets

GEORGIA

July 1

Aug. 1

The First National Bank of Albany, Albany
First National Interim Bank of Albany, Albany
Charter issued June 30, 1977
The First National Bank of Albany
The First National Bank of Brunswick, Brunswick
First National Interim Bank of Brunswick, Brunswick
Charter issued July 29, 1977
The First National Bank of Brunswick, Brunswick.

$4,571

$39,344

6,773

75,190

....

15,355

198,040

....

8,341

120,754

ILLINOIS

Aug. 1

The Millikin National Bank of Decatur, Decatur
Second National Bank of Decatur, Decatur
Charter issued July 25, 1977
The Millikin National Bank of Decatur
MARYLAND

Oct. 17

University National Bank, Rockville
New University National Bank, Rockville
Charter issued October 14, 1977
University National Bank, Rockville




149

Table B-9—Continued
Mergers consummated pursuant to corporate reorganizations, by states, calendar 1977
(Dollar amounts in thousands)
Effective
date of
merger

Operating bank
New bank
Resulting bank

Total
capital
accounts

Total
assets

MASSACHUSETTS

Mar. 16

Aug. 29

The First National Bank of Athol, Athol
First Bank of Athol National Association, Athol
Charter issued March 15, 1977
The First National Bank of Athol, Athol
The First National Bank of Yarmouth, Yarmouth
The Yarmouth Bank, National Association, Yarmouth
Charter issued August 23, 1977
Old Colony Bank of Barnstable County, N.A., Yarmouth . . . .

....

$ 1,841

$15,905

....

2,969

45,227

1,422

15,297

4,193

69,114

4,468

42,493

4,700

75,540

3,704

45,800

39,689

375,971

4,348

33,782

3,895

25,490

5,920

84,734

19,335

361,992

4,132

65,190

4,342

40,261

2,730

27,573

6,974

86,228

MICHIGAN

May 31

June 7

The Iron River National Bank, Iron River
The First Iron River National Bank, Iron River
Charter issued May 31, 1977
The Iron River National Bank, Iron River
The First National Bank of Lapeer, Lapeer
Lapeer Bank, N.A., Lapeer
Charter issued June 6, 1977
The First National Bank of Lapeer, Lapeer
OHIO

Oct. 11

Dec. 2

Sept. 30

Dec. 29

Dec. 31

Oct. 24

Bellefontaine National Bank, Bellefontaine
The Huntington National Bank of Bellefontaine
Charter issued October 5, 1977
The Huntington National Bank of Bellefontaine, Bellefontaine
First National Bank of Mercer County, Celina
The Central Trust Company of Mercer County, National Association, Celina
Charter issued December 2, 1977
First National Bank of Mercer County, Celina
National Union Bank, Columbiana
X National Bank, Columbiana
Charter issued September 27, 1977
National Union Bank, Columbiana
The First National Bank, Dayton
New National Bank, Dayton
Charter issued December 21, 1977
The First National Bank, Dayton
The Franklin National Bank, Franklin
The Huntington National Bank of Franklin, Franklin
Charter issued December 21, 1977
The Huntington National Bank of Franklin, Franklin . . . .
The Central National Bank of London, London
The Huntington National Bank of London, London
Charter issued October 21, 1977
The Huntington National Bank of London, London. . . .
TENNESSEE

July 1

The National Bank of Commerce of Jackson, Jackson
The Fourth National Bank of Jackson, Jackson
Charter issued June 28, 1977
The National Bank of Commerce of Jackson, Jackson . . .
TEXAS

July 28

Nov. 1

May 2

Sept. 12

May 2

150

City National Bank of Austin, Austin
New City National Bank, Austin
Charter issued July 25, 1977
City National Bank of Austin, Austin
The City National Bank of Bryan, Bryan
New City National Bank of Bryan, Bryan
Charter issued October 25, 1977
The City National Bank of Bryan, Bryan
Dallas National Bank in Dallas, Dallas
3300 Commerce National Bank, Dallas
Charter issued April 29, 1977
Dallas National Bank in Dallas, Dallas
Main Street National Bank of Dallas, Dallas
Main Street Commerce Bank National Association, Dallas
Charter issued September 6, 1977
Main Street National Bank of Dallas, Dallas
First National Bank in Garland, Garland
Glenbrook & Avenue A National Bank, Garland
Charter issued April 29, 1977
First National Bank in Garland, Garland




Table B-9—Continued
Mergers consummated pursuant to corporate reorganizations, by states, calendar 1977
(Dollar amounts in thousands)
Effective
date of
merger

Operating bank
New bank
Resulting bank

Total
capital
accounts

Total
assets

TEXAS—Continued

Sept. 1

Dec. 30

Dec. 30

Dec. 31

Midway National Bank of Grand Prairie, Grand Prairie
Parkway National Bank, Grand Prairie
Charter issued August 29, 1977
Midway National Bank of Grand Prairie, Grand Prairie. . . .
American National Bank, Humble
Allied Humble Bank, N.A., Humble
Charter issued December 23, 1977
Allied First National Bank, Humble
First National Bank of Newton, Newton
Allied First National Bank, Newton
Charter issued December 23, 1977
Allied First National Bank, Newton
Randolph Field National Bank, Universal City
Randolph Field Bank of Commerce, N.A., Universal City
Charter issued December 23, 1977
Randolph Field National Bank, Universal City

$2,318

$32,686

1,073

19,365

1,132

12,318

1,768

22,599

Table B-10
State-chartered banks converted to national banks, by states, calendar 1977
Charter
No.

Title and location of bank

Effective
date of
charter

Outstanding
capital stock

Surplus, undivided profits
and reserves

Total assets

$13,959,935

Total: 6 banks

$27,761,843

$471,564,554

IDAHO

16654

Citizens National Bank of Idaho, Boise
Conversion of Commercial State Bank, Boise

May

31

1,000,000

784,000

32,050,000

Feb.

25

178,575

309,620

11,616,823

Oct.

28

350,000

365,684

6,786,521

Jan

17

12 000 000

25 212 669

403 366 000

Feb.

25

231,360

370,004

4,631,210

Apr.

29

200,000

728,866

13,114,000

NEW MEXICO

16640
16682

First National Bank of Socorro, Socorro
Conversion of The Bank of Socorro, Socorro
First Sierra National Bank, Truth or Consequences
Conversion of First State Bank of Sierra
County, Truth or Consequences
TEXAS

16632

First International Bank in Houston, N.A., Houston
Conversion of First International Bank in
Houston, Houston. .
WEST VIRGINIA

16639
16651

First Wetzel National Bank, New Martinsville
Conversion of First Wetzel Savings & Loan
Company, New Martinsville
Weirton National Bank, Weirton
Conversion of Weirton Bank & Trust Company, Weirton . . .




151

Table B-11
National bank charters issued pursuant to corporate reorganizations, by states, calendar 1977
Charter
No.

Title and location of bank

Date of
issuance

Total: 25 banks
GEORGIA

14907
4944

First National Interim Bank of Albany, Georgia, Albany
First National Interim Bank of Brunswick, Georgia, Brunswick
Total: 2 banks

June
July

30
29

July

25

Oct.

14

Mar.
Aug.

15
23

May
June
Dec.

31
6
28

Oct.
Dec.
Sept.
Dec.
Dec.
Oct.

5
2
27
21
21
21

June

28

July
Oct.
Sept.
Apr.
Apr.
Aug.
Dec.

25
25

ILLINOIS

5089

Second National Bank of Decatur, Illinois, Decatur
MARYLAND

15365

New University National Bank, Rockville
MASSACHUSETTS

13733
516

First Bank of Athol (National Association), Athol
The Yarmouth Bank, National Association, Yarmouth
Total: 2 banks
MICHIGAN

14102
1731
16571

13749
5523
15694
1788
5100
10373

12790

The First Iron River National Bank, Iron River
Lapeer Bank, N.A., Lapeer
PBT Bank, National Association, Trenton
Total: 3 banks
OHIO

The Huntington National Bank of Bellefontaine, Bellefontaine
The Central Trust Company of Mercer County, National Association, Celina .
X National Bank, Columbiana
New National Bank, Dayton
The Huntington National Bank of Franklin, Franklin
The Huntington National Bank of London, London
Total: 6 banks
TENNESSEE

The Fourth National Bank of Jackson, Jackson
14728
4070
15328
14563
7989
15120
15809
12898
15236

152

TEXAS

New City National Bank, Austin
New City National Bank of Bryan, Bryan
Main Street Commerce Bank National Association, Dallas
3300 Commerce National Bank, Dallas
Glenbrook & Avenue A National Bank, Garland
Parkway National Bank, Grand Prairie
Allied Humble Bank, N.A., Humble
Allied First National Bank, Newton
Randolph Field Bank of Commerce, N.A., Universal City
Total: 9 banks




Dec

Dec.

6
29
29
29
23
23
23

Table B-12
National banks reported in voluntary liquidation, by states, calendar 1977
(Dollar amounts in thousands)

Title and location of bank

Date of
liquidation

Total capital
accounts of
liquidated
bank*

$164,232

Total: 20 national banks
CALIFORNIA

31

28,652

Sept.

30

3,075

Sept.

30

22,426

Peninsula National Bank (15310), Burlingame, absorbed by Central Bank, National Association (6919), Oakland . Mar.
FLORIDA

Lauderdale Lakes National Bank (15868), Lauderdale Lakes, absorbed by Century National Bank of Broward
(14554), Fort Lauderdale
Broward National Bank of Plantation (16171), Plantation, absorbed by Century National Bank of Broward (14554),
Fort Lauderdale
The City National Bank of Coral Gables (14792), Coral Gables, absorbed by City National Bank of Miami (14718),
Miami
City National Bank of Miami Beach (15173), Miami, absorbed by City National Bank of Miami (14718), Miami...
City National Bank of North Miami (16530), North Miami, absorbed by City National Bank of Miami (14718), Miami
City National Bank of South Dade (16447), Dade County, absorbed by City National Bank of Miami (14718),
Miami

Jan.
Jan.
Jan.

3,626
9,527
1,566

Jan.

1,229

ILLINOIS

The National Stock Yards National Bank of National City (12991 )t, National City, absorbed by First National Bank
Nov.
at East St. Louis (14127), East St. Louis

14

50,558

Aug.

1

186

Aug.

31

701

The First National Bank of Cape May Court House (7945), Cape May Court House, absorbed by Guarantee Bank,
Jan.
Atlantic City
Dec.
The First National Bank of Dunellen (8501), Dunellen, absorbed by Provident Savings Bank, Jersey City
Aug.
Shore National Bank (15913), Brick Township, absorbed by Garden State National Bank (15570), Paramus
June
Bankers National Bank (11543), Elmwood Park, absorbed by Valley National Bank (15790), Passaic

1
30
15
17

4,254
2,638
2,148
4,053

Aug.

1

339

Dec.

1

1,958

The Northampton National Bank of Easton (5118), Easton, absorbed by The First National Bank of Allentown (373),
Allentown
June

10

2,252

Sept.

9

2,745

July

23

22,299

Oct.

26

0

LOUISIANA

Republic National Bank of Louisiana (16339), New Orleans, absorbed by First City Bank, New Orleans
MICHIGAN

Kentwood National Bank (16152), Kentwood, absorbed by Kentwood Bank, N.A. (16672), Kentwood
NEW JERSEY

NORTH DAKOTA

Columbus National Bank (15973), Columbus, absorbed by First National Bank of Crosby (16661), Crosby
OHIO

The Third National Bank of Circleville (2817), Circleville, absorbed by T N B National Bank (16685), Circleville.
PENNSYLVANIA

WASHINGTON

Valley National Bank of Auburn (15233), Auburn, absorbed by Puget Sound National Bank (12292), Tacoma
WISCONSIN

Midland National Bank (15510), Milwaukee, absorbed by The National Bank of Wisconsin in La Crosse (7347), La
Crosse
VIRGIN ISLANDS

Deposit Insurance National Bank of the Virgin Islands, Charlotte Amalie was terminated

* Includes subordinated notes and debentures, if any.
t Certain assets and liabilities of The National Stockyards National Bank (Charter No. 12991) were purchased by The Boatmen's National Bank
of St. Louis Mo. (Charter No. 12991) as of the same date.




153

Table B - 1 3
National banks merged or consolidated with state banks, by states, calendar 1977
(Dollar amounts in thousands)

Title and location of bank

Total capital
accounts of
national
bank*

Effective
date

Total: 11 banks

$30,623

FLORIDA

Sun Bank of Bal Harbour, National Association (14696), Bal Harbour, merged into Sun Bank of Miami, Coral
Gables, under title "Sun Bank of Miami"
Nov.
Capital Bank of Miami, N.A. (15307), Miami, merged into Capital Bank, North Bay Village under title "Capital
Bank"
Dec.
Atlantic National Bank of Winter Park (15135), Winter Park, merged into Atlantic Bank of Conway," Orange County,
under title "Atlantic Bank of Orlando"
Nov.

25

5,885

30

748

1

1,066

IDAHO

The First National Bank of Grace (11179), Grace, merged into First Bank & Trust of Idaho, Malad City, under title
"First Bank & Trust of Idaho"
Dec.

20

582

KANSAS

The Citizens National Bank of Minneapolis (4931), Minneapolis, merged into The Ottawa County Bank, Minneapolis, under title "The Ottawa County Bank"
Jan.

1

871

MARYLAND

The Citizens National Bank of Havre De Grace (5445), Havre De Grace, merged into Elkton Banking and Trust
Company of Maryland, Elkton, under title "County Banking and Trust Company"
Oct.
Potomac National Bank (14856), Potomac, merged into The Commerce Bank and Trust Company of Maryland,
under title "Potomac Valley Bank"t
MISSISSIPPI

The First National Bank of Canton (6847); Canton, merged into The Mississippi Bank, Jackson, under title "The
Mississippi Bank"
NEW YORK

Chemical Bank Hudson Valley, National Association (14734), Nyack, merged into Chemical Bank, New York, New
York, under title "Chemical Bank"
PENNSYLVANIA

Oct.

3

2,437
3

1,616
Dec.

31

4,925
Mar.

31

Sullivan County National Bank (9528), Laporte, merged into Citizens & Northern Bank, Ralston, under title "Citizens & Northern Bank"
VIRGINIA

524
Sept.

30

Bank of Virginia N.A. (16485), Roanoke, merged into Bank of Virginia-Southwest, Bristol, under title "Bank of
Virginia-Southwest"
* Includes subordinated notes and debentures, if any.
t Formerly The Commerce Bank and Trust Company of Maryland.

908

11,061
June

30

Table B-14
National banks converted into state banks, by states, calendar 1977
(Dollar amounts in thousands)

Charter
No.

Title and location

Effective
date

Total capital
accounts of
national
banks *
$202,605

Total' 44 banks
ARKANSAS

10087
11367

Citizens First National Bank of Arkadelphia, Arkadelphia, converted into Citizens First State
Bank of Arkadelphia
Arkansas National Bank of Heber Springs, Heber Springs, converted into Heber Springs
State Bank

May

24

1,573

May

24

1,239

June

13

2,698

Jan.
Apr.

1
1

32,845
28,871

CALIFORNIA

15241

San Luis Obispo National Bank, San Luis Obispo, converted into First Central Coast Bank
CONNECTICUT

780
2

The City National Bank of Connecticut, Bridgeport, converted into Citytrust
The First New Haven National Bank, New Haven, converted into First Bank

See footnote at end of table.

154



Table B-14—Continued
National banks converted into state banks, by states, calendar 1977
(Dollar amounts in thousands)

Charter
No.

Total capital
accounts of
national
banks *

Effective
date

Title and location
ILLINOIS

3190
14363
14575
14854

United Bank of Belvidere, National Association, Belvidere, converted into United Bank
Belvidere
Upper Avenue National Bank, Chicago, converted into Upper Avenue Bank
Union National Bank of East St. Louis, East St. Louis, converted into Union Trust Company
East St Louis
.
American National Bank of Granite City, Granite City, converted into American Heritage Bank
Granite City, Illinois

of
June
July

2,197
9,063

Jan.

13

3,757

Apr.

2

1,287

Nov.

21

498

Mar.
Nov.
Mar.

31
3
29

1,294
1,168
578

Jan.
Jan.
June

1
1
30

838
584
528

Nov
Nov

1
1

579
1,689

Mar.
Nov.

31
1

14,262
8,809

Jan.
Jan.
Jan.

21
21
21

8,454
17,189
8,434

Apr.
Mar.

22
30

20,562
852

Sept.
May
Apr.

26
11
9

1,284
811
198

Jan.
July

3
31

491
1,153

May
Jan.
Dec.
June

9
31
1
30

1,379
573
230
3,542

Apr.

17

4,170

May

30

1,549

May
Oct.
Feb.
Apr.

of
. .
of

30
28

15
3
15
14

3,040
1,660
3,462
416

1

1,810

IOWA

14970

First National Bank of Evansdale, Evansdale, converted into Evansdale State Bank .

7303
14961
14048
3687

14999

The Home National Bank of Eureka, Eureka, converted into Home Bank and Trust Company of Eureka
The First National Bank in Hoisington, Hoisington, converted into First Kansas Bank
The Chandler National Bank of Lyons, Lyons, converted into The Chandler Bank of Lyons
The First National Bank and Trust Company, Norton, converted into First Security Bank & Trust
Company
The First National Bank of Troy, Troy, converted into First Bank of Troy
First National Bank of WaKeeney, WaKeeney, converted into The First Bank of WaKeeney
The National Bank of Com.merce of Wellington, Wellington, converted into Bank of Commerce and
Trust Company
City National Bank of Wichita, Kansas, Wichita, converted into City Bank and Trust Company

14937
15154

American National Bank of Maryland, Silver Spring, converted into American Bank of Maryland
Peoples National Bank of Maryland, Suitland, converted into Peoples Security Bank of Maryland

KANSAS

8162
11855
8399

MARYLAND

MASSACHUSETTS

14798
1135

First Agricultural National Bank of Berkshire County, Pittsfield, converted into First Agricultural
Bank
South Shore National Bank, Quincy, converted into South Shore Bank
The Mechanics National Bank of Worcester, Worcester, converted into Mechanics Bank

14528
15242

St. Louis County National Bank, Clayton, converted into St. Louis County Bank
Dexter National Bank, Dexter, converted into First State Bank of Dexter

9731
8760
13446

The City National Bank of Crete, Crete, converted into Citibank and Trust Company of Crete
The First National Bank of Hay Springs, Hay Springs, converted into Northwestern State Bank
The Overton National Bank, Overton, converted into Bank of Overton

1082

MISSOURI

NEBRASKA

NEW HAMPSHIRE

5151
537

The First National Bank of Briston, Briston, converted into The Briston Bank
Connecticut River National Bank, Charleston, converted into Connecticut River Bank
OKLAHOMA

10804
9008
12104
14960

The First National Bank of Beaver, Beaver, converted into The First Security Bank
The Alfalfa County National Bank of Cherokee, Cherokee, converted into Alfalfa County Bank
State National Bank of Depeu, Depeu, converted into Central Oklahoma Bank
Community National Bank of Warr Acres, Warr Acres, converted into Community Bank

14344

The Hanover National Bank of Wilkes-Barre, Wilkes-Barre, converted into Hanover Bank of Pennsylva-

PENNSYLVANIA

1 11 C l

•

•

•

TENNESSEE

14822

The First National Bank of Rogersville, Rogersville, converted into City & County Bank of Hawkins
County
TEXAS

15125
14634
15764
5710

White Rock National Bank of Dallas, Dallas, converted into White Rock Bank of Dallas . . First National Bank of Edna, Edna, converted into First Bank of Edna
Northwest National Bank, Houston, converted into Northwest Bank and Trust
The First National Bank of Roxton, Roxton, converted into The First Bank, Roxton, Texas

15390

First Virginia
Bank-Central

VIRGINIA

Bank-Monticello

National,

Charlottesville,

converted

into

First

Virginia

Sept.

See footnote at end of table.




155

Table B-14—Continued
National banks converted into state banks, by states, calendar 1977
(Dollar amounts in thousands)

Charter
No.

Total capital
accounts of
national
banks *

Effective
date

Title and location
WEST VIRGINIA

4775

14

2,927

3
3

Dec.

T h e First N a t i o n a l B a n k of C e r e d o , C e r e d o , c o n v e r t e d into First B a n k of C e r e d o ...

2,574
948

WISCONSIN

11783
13932
;

Jan.
Jan.

First National Bank and Trust Company, Burlington, converted into First Bank & Trust Company
First National Bank of Edgerton, Edgerton, converted into First State Bank of Edgerton

Includes subordinated notes and debentures, if any.

Table B-15
Purchases of state banks by national banks, by states, calendar 1977
(Dollar amounts in thousands)
Effective
date

Title and location of bank
Total: 5 banks

•

Total capital
accounts of
state banks *
$16,802

GEORGIA

The First National Bank of Atlanta (1559), Atlanta, purchased The First Augusta Bank and Trust Company, AuMay
gusta

20

1,873

Dec.

31

6,506

Aug.

13

948

First Security Bank of Utah, National Association (2597), Ogden, purchased First Security State Bank of
Jan.
Springville, Springville

31

390

24

7,085

NEW JERSEY

H e r i t a g e B a n k N a t i o n a l A s s o c i a t i o n ( 1 2 0 9 ) , C h e r r y Hill, p u r c h a s e d P i n e l a n d S t a t e B a n k , B r i c k T o w n . . .
OHIO

The Central Trust Company of Northeastern Ohio, N.A., (76), Canton, purchased The Dime Bank, Canton
UTAH

WASHINGTON

Mar.

Peoples National Bank of Washington (14394), Seattle, purchased Bank of Yakima, Yakima
* Includes subordinated notes and debentures, if any.

Table B-16
Consolidations of national banks, or national and state banks, by states, calendar 1977
(Dollar amounts in thousands)
Effective
date

Consolidating banks
Resulting bank

Outstanding
capital
stock

Surplus

Undivided
profits and
reserves

Total assets

Total: 1 consolidation
MARYLAND

Jan. 3

The Citizens National Bank (4364), Laurel
Belair National Bank (15285), Bowie
The Citizens National Bank (4364), Laurel

156



$1,342
494
1,339

$2,500
471
3,468

$2,723
1,490
4,229

$73,637
21,299
94,936

Table B-17
Mergers of national banks, or national and state banks, by states, calendar 1977
(Dollar amounts in thousands*)
Merging banks
Resulting bank

Effective
date

Outstanding
capital
stock

Undivided
profits and
reserves

Surplus

Total assets

Total: 47 merger actions
CALIFORNIA

Dec.

31

$621

$694

$323

$25,058

933

1,589

1,617

86,934

1,308

Balboa Bank, Chula Vista
First National Bank of San Diego County, Escondido (15453)

2,559

2,131

122,331

500

350

150

10,105

952

498

370

33,407

952

498

381

36,083

1,500
1,330

905
979

1,324
324

49,409
39,555

300

200

202

21,995

440

440

1,598

46,596

2,200

2,800

3,281

101,624

5,770

5,324

6,729

259,179

500
2,200
2,779
564
500
400

650
2,514
3,085
250
400
240

403
1,150
1,553
186

22,344
56,020
78,034
11,296
7,006

171

9,796

700

216

34

10,142

2,320

3,942

4,824

137,518

3,119

200
600
694

6,413
215
1,800
2,121

5,313
95
740
835

175,758
5,050
44,086
49,136

1,500

1,789

1,487

50,398

309

477

454

19,991

1,880

2,195

1,941

72,814

300

400

748

18,273

755
550

608
350

75
16

14,916
12,183

400

400

66

6,215

3,600

4,200

6,429

290,239

4,907

6,656

7,334

340,193

400

450

403

14,349

1,142

2,200

3,395

88,493

1,362

2,830

3,798

102,842

550

850

429

35,297

800

842

231

22,905

1,807

2,927

2,426

103,414

1,807

5,969

3,086

161,524

First National Bank of San Diego County, Escondido (15453)
FLORIDA

Jan.

Jan.

Jan.

Jan.

Jan.

Jan.

Jan.

Feb.

Mar

Sun Bank of Seminole, Altamonte Springs
Sun Bank of Semoran, National Association, Seminole
County (16108)
1 Sun Bank of Seminole, National Association, Seminole
County (16108)
Barnett Bank of Bay Harbor Islands, National Association,
Bay Harbor Islands (15413)
Barnett Bank of Miami, Miami
Barnett Bank at Midway, National Association, Dade County
(15870)
Barnett Bank at Westchester, National Association, Dade
County (15337)
Barnett Bank of Miami Beach, National Association, Miami
Beach (13828)
Barnett Bank of Miami, National Association, Miami Beach
(13828)
Barnett Bank of East Ocala, National Association, Ocala
(15647)
Barnett Bank of Ocala, National Association, Ocala (10578)
Barnett Bank of Ocala, National Association, Ocala (10578)
Barnett Bank of Orlando, Orlando
Barnett Bank of South Orlando, Orlando
Barnett Bank of West Orlando, Orlando . . .
Barnett Mall Bank, National Association, Winter Park (15900)
Barnett Bank of Winter Park, National Association, Winter
Park (14767)
Barnett Bank of Orlando/Winter Park, National Association,
Winter Park (14767)
First National Bank of Princeton-Naranja, Princeton-Naranja
(15469)
The First National Bank of Homestead, Homestead (13641)
The First National Bank of Homestead, Homestead (13641)
Barnett Bank of Cypress Gardens, National Association,
Winter Haven (15270)
Barnett Bank of Winter Haven, National Association, Winter
Haven (13383)
Barnett Bank of East Polk County, National Association, Winter Haven (13383)
Landmark Bank of Clearwater, National Association,
Clearwater (15426)
Landmark Bank of Seminole, National Association, Pinellas
County (16036)
Landmark Bank at Tyrone, St. Petersburg
Landmark Bank of Tarpon Springs, National Association,
Tarpon Springs (16391)
Landmark Union Trust Bank of St. Petersburg, National Association, St. Petersburg (15507)
3 Landmark Union Trust Bank of St. Petersburg, National Association, St. Petersburg (15507)
Sun Second National Bank of Delray Beach, Delray Beach
(15787)
Sun First National Bank of Delray Beach, Delray Beach
(14556)
1 Sun First National Bank of Delray Beach, Delray Beach
(14556)
Sunrise American National Bank of Fort Lauderdale, Fort
Lauderdale (15191)
Southport American National Bank of Fort Lauderdale, Fort
Lauderdale (16064)
American National Bank and Trust Company of Fort Lauderdale, Fort Lauderdale (14741)
Arc-lean National Bank and Trust Company of Fort Lauderdale. Fort Lauderdale (14741)

98

oee footnotes at end of table.




157

Table B-17—Continued
Mergers of national banks, or national and state banks, by states, calendar

1977

(Dollar amounts in thousands*)
Effective
date

Merging banks
Resulting bank

Outstanding
capital
stock

Undivided
profits and
reserves

Surplus

Total assets

FLORIDA—Continued

Apr.

May

June

1

June

30

June

30

July

July
July

July
Aug.

Sept.

15

30

Nov.

Nov.

30

Flagship Bank North of St. Petersburg, N.A., St. Petersburg
(15905)
Flagship Bank South, St. Petersburg, St. Petersburg
Flagship Bank of St. Petersburg, N.A., St. Petersburg
(15281)
Flagship Bank of St. Petersburg, N.A., St. Petersburg
(15281)....
First National Bank of Broward County, Lighthouse Point
(15004)
First National Bank of Margate, Margate (15113)
First National Bank on the Beach, Pompano Beach (15724)
First National Bank of Pompano Beach, Pompano Beach
(14723)
First National Bank of Broward County, Pompano Beach
(14723)
Sun First National Bank of Melbourne, Melbourne (14845). .
Sun First National Bank of Palm Bay, Palm Bay (16107)....
Sun First National Bank of Melbourne, Melbourne (16107). .
Second National Bank of Lakeland, Lakeland (16561)
First National Bank of Lakeland, Lakeland (15066)
First National Bank of Lakeland, Lakeland (15066)
First Financial National Bank of Tampa, Hillsborough County
(16135)
First National Bank of Florida, Tampa (3497)
First National Bank of Florida, Tampa (3497)
Landmark Bank of North Fort Lauderdale, National Association, Fort Lauderdale (15143)
Landmark Bank of Plantation National Association, Plantation (14802)
Landmark Bank at the Ocean, National Association, Fort
Lauderdale (15213)
Landmark Bank of West Broward, National Association,
Plantation (15859)
Landmark Bank of Sunrise, National Association, Sunrise
(16292)
Landmark Bank of Pompano Beach, N.A., Pompano Beach
(16574)
Landmark First National Bank of Fort Lauderdale, Fort
Lauderdale (14376)
Landmark First National Bank of Fort Lauderdale, Fort
Lauderdale (14376)
Sun Bank of South Orlando, National Association, Orlando
(14883)
Sun Bank of College Park, National Association, Orlando
(14675)
Sun Bank of Pine Hills, National Association, Orange County
(14892)
Sun Bank of Central Park, National Association, Orange
County (15803)
Sun Bank of East Orlando, National Association, Orlando
(15062)
Sun First National Bank of Orlando, Orlando (14003)
Sun First National Bank of Orlando, Orlando (14003)
First State Bank of Sarasota County, Osprey
First National Bank of Venice, Venice (15071)
First National Bank of Venice, Venice (15071)
Southeast Bank of West Bradenton, National Association,
Manatee County (16276)
Southeast National Bank of Bradenton, Bradenton (14704) .
Southeast National Bank of Bradenton, Bradenton (14704) .
Southeast Bank of Naples, N.A., Naples (16268)
Southeast National Bank of Naples, Naples (15967)
Southeast National Bank of Naples, Naples (15967)
Century National Bank of Fort Lauderdale, Fort Lauderdale
(14567)
Century National Bank of Broward, Fort Lauderdale (14554)
Century National Bank of Broward, Fort Lauderdale (14554)
Florida First National Bank at Brent, Brent (14797)
The Florida First National Bank at Pensacola, Pensacola
(5603)
The Florida First National Bank at Pensacola, Pensacola
(5603)
Flagship National Bank of Westland, Hialeah (15944)
Flagship National Bank of Miami, Miami (15411)
Flagship National Bank of Miami, Miami (15411)

See footnotes at end of table.

158


$400
350

$400
310

$366
101

$19,154
13,640

654

1,755

1,457

53,102

1,404

2,465

1,924

85,896

1,100
500
500

1,400
750
500

1,674
1,344
1,138

52,911
30,594
27,865

3,000

3,000

4,153

120,675

5,597
440
200
640
400
585
780

5,597
810
200
1,010
520
1,215
1,940

7,866
1,174
248
1,422
42
1,100
1,142

214,495
31,373
10,133
41,506
2,729
47,213
49,942

400
7,590
7,860

650
17,410
18,190

42
5,661
5,703

6,019
450,196
453,983

800

2,161

1,869

74,554

1,826

1,531

387

50,256

520

616

1,006

31,282

973

621

436

33,556

500

300

306

18,969

270

135

121

4,321

4,600

5,880

7,984

316,751

8,192

12,542

12,108

529,662

709

1,841

1,961

56,405

500

2,000

1,567

47,041

565

1,285

1,248

35,892

441

659

523

26,457

540
2,876
2,876
500
1,201
1,401

1,710
16,124
26,374
400
1,703
2,404

804
7,991
14,103
28
2,610
2,638

40,036
380,348
587,925
7,012
83,405
90,418

500
1,500
1,500
1,000
1,658
1,658

300
4,500
4,500
350
1,373
1,373

0
2,410
2,414
0
461
461

5,376
87,212
92,046
8,251
36,159
43,548

1,000
2,500
3,483
200

2,500
8,500
11,017
750

2,538
4,388
7,295
537

88,393
128,073
306,702
15,064

1,200

4,800

3,334

63,963

1,200
1,050
1,800
2.068

4,800
160
2,700
3,642

3,364
0
2,819
2,699

75,855
27,334
90,333
117,667

Table B-17—Continued
Mergers of national banks, or national and state banks, by states, calendar 1977
(Dollar amounts in thousands*)
Effective
date

Merging banks
Resulting bank

Outstanding
capital
stock

Undivided
profits and
reserves

Surplus

Total assets

FLORIDA—Continued

Dec.

Florida Coast Bank of Margate, Margate
Florida Coast Bank of Coral Springs, National Associations,
Coral Springs (16386)
Florida Coast Bank of Coral Springs, National Association,
Coral Springs (16386)
Pan American Bank of Miami, Miami
Pan American Bank of Dade County, Dade County
Pan American Bank of Miami Beach, Miami Beach
Pan American Bank of West Dade, Dade County
Pan American Bank of Kendale Lakes, National Association,
Dade County (16442)
30 Pan American Bank, National Association, Dade County
(16442)
Florida National Bank at Coral Gables, Coral Gables (14497)
Florida First National Bank at Opa-Locka, Opa-Locka
(14895)
The Florida National Bank and Trust Company at Miami,
(13570)
30 Florida National Bank of Miami, Miami (13570)
First Bank of West Boca Raton, Boca Raton
University National Bank of Boca Raton, Boca Raton (15554)
First Bank and Trust Company of Boca Raton, National Association, Boca Raton (15421)
31 First Bank and Trust Company of Boca Raton, National Association, Boca Raton (15421)
Atlantic National Bank of Hollywood, Hollywood (15147)t . .
Atlantic National Bank of Davie, Davie (15739)t
Atlantic National Bank of Fort Lauderdale, Fort Lauderdale
(16034)t
Atlantic National Bank of West Hollywood, Hollywood
(15166)t
31 Atlantic National Bank of Broward, Broward (15166)

Apr.

Ainsworth State Bank, Ainsworth
The National Bank of Washington, Washington (13849) . . . .
The National B a n k of W a s h i n g t o n , W a s h i n g t o n (13849) . . . .

Mar.

31

The Hancock Bank, Hancock
The First National Bank of Maryland, Baltimore (1413)
The First National Bank of Maryland, Baltimore (1413)

30

Southern National Bank of Hattiesburg, Hattiesburg (15539)
Deposit Guaranty National Bank, Jackson (15548)
Deposit Guaranty National Bank, Jackson (15548)

Dec.

Dec.

Dec.

Dec.

$

27,529

$ 500

$ 950

1,000

750

205

15,925

1,500
2,380
1,000
1,000
500

1,700
7,620
2,500
740
500

410
4,216
1,459
500
607

43,454
232,132
49,101
32,248
28,748

500

300

117

18,101

6,471
1,500

10,569
3,300

6,899
2,467

343,836
94,658

300

540

379

10,061

7,200
7,200
350

13,500
13,500
350
1,277

10,260
10,260
161
1,046

279,096
382,767
8,481
49,349

3,948

4,313

156,072

3,948
856
468

5,096
1,047
514

175,047
34,768
21,202

338
1,795

$ 205

1,795
1,075
581
667
1,854
3,568

200

0

11,987

1,722
3,855

2,355
3,907

79,927
142,835

110
120
173

390
180
470

206
1,377
1,833

8,017
21,588
29,286

200
15,745
15,945

350
34,534
34,884

465
27,912
28,377

11,926
1,377,375
1,389,301

885
10,809
11,359

2,534
58,972
61,841

23
0
23

33,067
1,127,185
1,157,286

1,074

3,263

1,366

66,597

7,859

8,144

7,975

647,731

7,859

8,144

5,341

715,490

500
4,965
4,965

750
11,155
11,155

2,232
14,513
12,686

71,179
411,911
477,737

200
2,979
3,279
150
484
589

200
2,979
3,279
150
936
1,131

631
10,426
10,857
821
2,146
2,967

14,571
191,361
202,660
11,045
45,703
56,748

1,500

1,000

281

10,652

6,553

8,633

9,517

377,920

6,553

8,633

9,517

385,750

IOWA

MARYLAND

MISSISSIPPI

Dec.

NEW JERSEY

July

Sept.

Independent National Bank, Stone Harbor (12978)
First Peoples National Bank of New Jersey, Haddon Township (399)
First Peoples National Bank of New Jersey, Haddon Township (399)
The First National Bank of Hamilton Square, Hamilton
Square (12646)
Colonial First National Bank, Red Bank (2257)
30 Colonial First National Bank, Red Bank (2257)
NEW YORK

May

27

Nov.

28

The First National Bank of Mexico, Mexico (5293)
The National Bank of Northern New York, Watertown (2657)
The National Bank of Northern New York, Watertown (2657)
The Dover Plains National Bank, Dover Plains (822)
The Fishkill National Bank, Beacon (35)
The Fishkill National Bank, Beacon (35)
NORTH CAROLINA

Lafayette Bank & Trust Company, Fayetteville
Southern National Bank of North Carolina, Lumberton
(10610)
Apr.
Southern National Bank of North Carolina, Lumberton
(10610)
See footnotes at end of table.




159

Table B-17—Continued
Mergers of national banks, or national and state banks, by states, calendar 1977
(Dollar amounts in thousands*)
Outstanding
capital
stock

Merging banks
Resulting bank

Effective
date

Undivided
profits and
reserves

JS

Total assets

NORTH CAROLINA—Continued

Town and Country Bank, Lumberton
Wachovia Bank and Trust Company, N.A., Winston-Salem
(15673)
Wachovia Bank and Trust Company, N.A., Winston-Salem
(15673)

Apr.

658

$ 729

$ 249

$ 8,639

•51,360

72,000

112,367

3,415,829

51,360

73,387

112,616

3,424,468

117
5,146
5,412

531
13,154
13,685

471
1,942
2,324

17,502
208,777
226,279

300
1,560
2,145
78
1,287
1,412

900
4,190
5,090
369
2,482
2,804

1,087
2,592
3,370
142
2,101
2,163

18,454
102,025
121,204
8,299
76,275
84,600

200

200

214

9,057

22,000

42,000

16,579

1,260,413

22,150

42,350

16,693

1,268,680

200
7,519
8,125
1,000
1,775

200
9,841
9,574
758
3,038

322
12,281
12,304
276
922

6,113
366,190
372,303
35,043
75,354

2,368
1,000
1,775
2,368
1,409
1,216
2,625
502
20,552
20,552
2,015
19,967
21,982

4,203
746
3,038
4,202
1,547
2,396
3,943
1,032
31,803
33,337
4,800
33,223
38,023

1,198
249
1,124
1,309
1,437
705
2,070
7
60,735
60,742
1,826
30,156
32,963

110,397
35,191
75,807
110,683
67,117
58,222
122,246
11,521
2,043,636
2,054,628
117,508
1,306,488
1,457,952

$

OHIO

The Peoples National Bank of Plymouth, Plymouth (7035) . .
First National Bank of Mansfield, Mansfield (2577)
13 First National Bank of Mansfield, Mansfield (2577)

May

PENNSYLVANIA

Mar.
June

Farmers and Merchants Bank, St. Mary's
Deposit National Bank, DuBois (5019)
1 Deposit National Bank, DuBois (5019)
The Reedsville National Bank, Reedsville (4538)
The Russell National Bank, Lewiston (10506)
30 The Russell National Bank, Lewiston (10506)
UTAH

Aug.

31

First Security Bank of Bountiful, National Association, Bountiful (15942)
First Security Bank of Utah, National Association, Ogden
(2597)
First Security Bank of Utah, National Association, Ogden
(2597)
VIRGINIA

Mar.

3

Mar.

4

Mar.

25

Aug.

22

Nov.

30

Dec.

31

National Bank of Northampton, Nassawadox (14544)
United Virginia Bank/Seaboard National, Norfolk (10194) . .
United Virginia Bank/Seaboard National, Norfolk (10194) . .
Potomac Bank and Trust Company, Fairfax
Dominion National Bank, Fairfax County (14904)
Dominion National Bank of Northern Virginia, Fairfax County
(14904)
Second National Bank of Richmond, Richmond (15567) . . .
Metropolitan National Bank, Richmond (15530)
Dominion National Bank of Richmond, Richmond (15530) . .
Merchants and Farmers Bank, Portsmouth
First National Bank of Tidewater, Norfolk (15461)
Dominion National Bank of Tidewater, Norfolk (15461)
Virginia National Bank/Fairfax, Springfield (16398)
Virginia National Bank, Norfolk (9885)
Virginia National Bank, Norfolk (9885)
Mountain Trust Bank, Roanoke
First & Merchants National Bank, Richmond (1111)
First & Merchants National Bank, Richmond (1111)

* In some cases nearest Report of Condition figures have been used.
t These banks submitted individual call reports as of December 31, 1977.

Table B-18
Mergers resulting in national banks, by assets of acquiring and acquired banks, 1960-1977*
Assets of acquired banks
Assets of acquiring banksf
Under $10 million
$10 to 24.9 million
$25 to 49.9 million
$50 to 99 9 million
$100 million and over
Total

Acquired
banks
1960-1977

Under $10
million

$10 to 24.9
million

$25 to 49.9
million

$100 million
and over

$50 to 99.9
million

101
155
185
217
705

101
137
119
120
256

0
18
51
57
242

0
0
15
35
115

0
0
0
5
45

0
0
0
0
47

1,363*

733

368

165

50

47

* Includes all forms of acquisitions involving two or more banks from May 13, 1960 through December 31, 1977.
t In each transmission, the bank with the larger total assets was considered to be the acquiring bank.
t Comprises 1,272 transactions, 32 involving three banks, 11 involving four banks, seven involving five banks, one involving six banks, one
involving seven banks and one involving nine banks.

160



Table B-19
Total assets, liabilities and equity capital of domestic offices and subsidiaries of national banks,
United States and other areas, June 30, 1977
(Dollar amounts in thousands)
Total, U.S. and
Total,
other areas United States

Alabama

Alaska

Arizona

Arkansas

California

4,703

4,701

97

6

3

71

58

$74,665,758
51,205,681
16,725,015
60,667,149
3,027,428
992,847
4,320,807
27,470,292

$74,641,134
51,203,586
16,723,338
60,661,347
3,027,428
992,649
4,320,807
27,467,342

$814,482
480,972
276,999
1,187,233
19,766
10,104
21,978
188,492

$158,236
60,563
36,536
170,311
471
2,669
0
52,390

$660,425
534,455
110,977
439,045
6,063
6,611
8,433
347,200

$504,218
276,623
173,542
554,930
9,042
4,839
29,934
255,677

$9,118,646
5,934,343
1,806,585
5,970,673
200,912
114,586
410,741
6,123,119

316,262,334
3,758,720
312,503,614

316,246,449
3,758,426
312,488,023

4.376.371
52,472
4,323,899

691,414
6,508
684,906

3,382,150
26,092
3,356,058

2,376,077
20,471
2,355,606

46,917,061
524,454
46,392,607

3,947,745

3,947,745

23,583

9,937

5,427

5,582

1,528,437

10,227,244
1,830,382
1,930,294
7,595,446
22,688,662

10,227,031
1,829,529
1,930,294
7,595,328
22,687,914

151,498
6,535
118
20,272
102,180

43,530
1,735
486
0
35,904

149,953
6,985
0
3,622
85,531

88,763
4,272
132
1,145
70,432

1,526,302
94,921
519,583
2,055,757
4,690,976

599,798,364

599,743,495

7,628,111

1,257,674

5,720,785

4,334,737

86,488,188

144,241,945
252,384,821
2,188,579
38,492,458
5,337,624
. . . . 26,642,073
7,141,935

144,237,857
252,354,366
2,188,528
38,487,845
5,337,624
26,635,999
7,139,341

1,950,170
3,555,634
50,537
707,261
0
226,831
42,936

502,890
369,208
10,935
149,051
0
1,748
30,603

1,667,923
3,009,282
18,513
215,313
5,339
40,101
83,633

1,145,347
1,906,398
11,997
342,016
0
230,714
22,173

19,783,961
39,320,228
264,364
3,816,172
1,286,139
2,076,900
1,167,027

476,429,435

476,381,560

6,533,369

1,064,435

5,040,104 *

3,658,645

67,714,791

185,874,180
290,555,255

185,866,756
290,514,804

2,428,861
4,104,508

591,731
472,704

1,875,308
3,164,796

1,500,562
2,158,083

23,087,122
44,627,669

53,727,845
3,555,963
447,061
7,684,371
11,991,566

53,727,845
3,555,963
447,061
7,684,253
11,990,302

313,964
22,221
2,198
20,272
136,275

64,268
18,338
42
0
11,294

259,219
339
4,155
3,622
46,369

279,327
2,548
77
1,146
56,507

7,918,057
1,521,957
59,691
2,057,759
1,692,092

553,836,241

553,786,984

7,028,299

1,158,377

5,353,808

3,998,250

80,964,347

2,815,397

2,813,597

24,496

950

77,638

28,520

408,671

21,559
9,295,127
16,257,521
16,586,711
985,808

21,559
9,291,607
16,253,703
16,590,237
985,808

0
115,897
220,669
231,443
7,307

0
27,635
38,743
30,035
1,934

0
40,913
99,872
141,140
7,414

0
69,621
89,131
135,211
14,004

0
924,778
2,223,244
1,924,231
42,917

43,146,726

43,142,914

575,316

98,347

289,339

307,967

5,115,170

Total liabilities, subordinated notes and debentures and equity capital . . . '599,798,364

599,743,495

7,628,111

1,257,674

5,720,785

4,334,737

86,488,188

Number of banks
Assets
Cash and due from banks
U.S. Treasury securities
Obligations of other U.S. government agencies and corporations
Obligations of states and political subdivisions
Other bonds, notes and debentures
Federal Reserve stock and corporate stock
Trading account securities
Federal funds sold and securities purchased under agreements to resell
Loans, total (excluding unearned income)
Reserve for possible loan losses
Loans, net of reserve
Dirprt Ipase financina
.. .
Bank premises, furniture and fixtures and other assets representing bank
premises
Real estate owned other than bank premises
Investments in unconsolidated subsidiaries and associated companies
Customers' liabilities to this bank on acceptances outstanding
Other assets
Total assets
Liabilities
Demand deposits of individuals, partnerships and corporations
Time and savings deposits of individuals, partnerships and corporations
Deoosits of U S aovernment
Deposits of states and political subdivisions
Deposits of foreign governments and official institutions
Deposits of commercial banks
. .
Certified and officers' checks
Total deposits
Total demand deposits
Total time and savings deposits
Federal funds purchased and securities sold under agreements to repurchase . ..
Liabilities for borrowed money
Mortgage indebtedness
Acceptances executed by or for account of this bank and outstanding
Other liabilities
Total liabilities
Subordinated notes and debentures
Equity Capital
Preferred stock
Common stock
Surplus ..
Undivided profits
Reserve for contingencies and other capital reserves
Total equity capital




Table B-19—Continued
Total assets, liabilities and equity capital of domestic offices and subsidiaries of national banks,
United States and other areas, June 30, 1977
(Dollar amounts in thousands)
Colorado
Number of banks
Assets

Cash and due from banks
U.S. Treasury securities
Obligations of other U.S. government agencies and corporations
Obligations of states and political subdivisions
Other bonds, notes and debentures
Federal Reserve stock and corporate stock .
Trading account securities
Federal funds sold and securities purchased under agreements to resell
Loans, total (excluding unearned income)
Reserve for possible loan losses
Loans, net of reserve
Direct lease financing
Bank premises, furniture and fixtures and other assets representing bank
premises
Real estate owned other than bank premises
Investments in unconsolidated subsidiaries and associated companies
Customers' liabilities to this bank on acceptances outstanding
Other assets
Total assets
Liabilities

Demand deposits of individuals, partnerships and corporations . . . .
Time and savings deposits of individuals, partnerships and corporations
Deposits of U.S. government
Deposits of states and political subdivisions
Deposits of foreign governments and official institutions
Deposits of commercial banks
Certified and officers' checks
Total deposits
Total demand deposits
Total time and savings deposits
Federal funds purchased and securities sold under agreements to repurchase . . .
Liabilities for borrowed money
Mortgage indebtedness
Acceptances executed by or for account of this bank and outstanding
Other liabilities
Total liabilities
Subordinated notes and debentures
Equity Capital

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



Connecticut

District of
Columbia

Delaware

Florida

Georgia

Hawaii

132

21

5

15

288

64

$1,032,268
449,125
160,416
716,414
1,013
9,465
26,817
368,443

$588,971
263,134
101,126
253,952
94,507
5,467
9,360
70,640

$5,586
8,960
2,695
3,850
383
98
0
1,350

$695,240
511,088
113,283
631,046
15,687
8,948
7,627
343,475

$2,442,734
2,663,555
1,154,731
1,896,127
140,078
28,116
24,505
940,711

$1,361,734
481,737
142,943
636,987
12,529
54,826
37,357
342,627

$20,566
17,849
5,771
1,276
0
206
0
6,000

4,136,707
39,718

44,762
184

2,455,601
31,136

7,966,266
97,701

4,414,186
57,922

86,150
899

4,096,989

1,677,771
16,719
1,661,052

44,578

2,424,465

7,868,565

4,356,264

85,251

37,812

8,672

0

26,256

50,315

36,681

0

140,460
20,218
2,494
20,959
102,850

72,590
9,340
2,069
25,802
167,651

1,014
73
0
0
465

49,907
1,500
0
2,723
64,431

392,592
96,063
3,234
12,661
311,214

239,084
146,797
85,204
66,421
105,031

2,396
4
0
67
1,347

7,185,743

3,334,333

69,052

4,895,676

18,025,201

8,106,222

140,733

1,993,213
2,875,638
41,999
650,169
0
387,096
76,003

1,023,324
1,362,248
19,047
224,289
0
208,887
29,073

16,788
42,703
511
1,385
0
0
467

1,803,033
1,877,065
77,763
6,059
162,209
60,937
129,003

5,243,603
8,123,966
49,656
1,278,799
5,098
597,899
183,905

2,501,833
2,569,364
33,419
654,790
14,389
467,916
42,428

43,730
62,488
639
18,147
0
2,387
2,269

6,024,118

2,866,868

61,854

4,116,069

15,482,926

6,284,139

129,660

2,575,359
3,448,759

1,347,689
1,519,179

17,919
43,935

2,172,628
1,943,441

6,378,197
9,104,729

3,206,515
3,077,624

49,723
79,937

462,560
49,471
11,030
20,959
101,201

195,901
7,246
113
25,802
20,833

300
598
0
0
426

301,712
9,929
60
2,723
50.727

881,571
13,867
7,695
12,662
172,624

600
0
0
67
1,452

6,669,339

3,116,763

63,178

4,481,220

16,571,345

834,686
38,125
34,128
67,404
180,965
7,439,447

131,779

34,400

10,935

200

13,105

37,416

63,048

1,500

0
100,644
164,691
210,256
6,413

0
49,542
103,704
50,669
2,720

0
1,580
1,676
2,349
69

374
64,213
134,781
197,360
4,623

1,001
361,743
558,622
469,856
25,218

0
154,929
220,187
160,080
68,531

0
3,799
2,508
1,147
0

482,004

206,635

5,674

401,351

1,416,440

603,727

7,454

7,185,743

3,334,333

69,052

4,895,676

18,025,201

8,106,222

140,733

2

Table B-19—Continued
Total assets, liabilities and equity capital of domestic offices and subsidiaries of national banks,
United States and other areas, June 30, 1977
(Dollar amounts in thousands)
Idaho
Number of banks
Assets
,
Cash and due from banks
U.S. Treasury securities
Obligations of other U.S. government agencies and corporations
Obligations of states and political subdivisions
Other bonds, notes and debentures
Federal Reserve stock and corporate stock
Trading account securities
Federal funds sold and securities purchased under agreements to resell
Loans, total (excluding unearned income)
Reserve for possible loan losses
Loans, net of reserve
Direct lease financing
Bank premises, furniture and fixtures and other assets representing bank
premises
Real estate owned other than bank premises
Investments in unconsolidated subsidiaries and associated companies
Customers' liabilities to this bank on acceptances outstanding
Other assets
Total assets
Liabilities
Demand deposits of individuals, partnerships and corporations
Time and savings deposits of individuals, partnerships and corporations
Deposits of U.S. government
Deposits of states and political subdivisions
Deposits of foreign governments and official institutions
Deposits of commercial banks
Certified and officers' checks
Total deposits
Total demand deposits
Total time and savings deposits
Federal funds purchased and securities sold under agreements to repurchase
Liabilities for borrowed money
Mortgage indebtedness
Acceptances executed by or for account of this bank and outstanding
Other liabilities
Total liabilities
Subordinated notes and debentures
Equity Capital
Preferred stock
Common stock
Surplus
Undivided profits
Reserve for contingencies and other capital reserves
Total equity capital
Total liabilities, subordinated notes and debentures and equity capital ...



Illinois

Indiana

Iowa

Kansas

Kentucky

Louisiana

424

120

100

164

82

54

$280,119
220,027
59,335
286,312
4,021
4,393
0
67,718

$5,329,449
4,654,943
2,002,473
5,961,738
427,752
98,633
341,382
1,444,783

$1,544,603
1,487,399
603,892
1,514,910
184,716
17,062
32,521
705,378

$595,479
408,482
190,131
582,867
15,004
4,771
10,542
129,512

$635,134
518,539
240,244
635,738
11,640
7,903
12,270
322,635

$609,258
509,813
120,482
617,088
3,125
6,442
7,408
263,450

$963,076
1,338,118
190,377
897,578
8,670
10,344
477
539,176

1,680,340
13,611

6,779,713
82,398

2,749,154
21,945

6,697,315

2,727,209

2,672,425
24,712
2,647,713

2,907,663
27,420
2,880,243

3,878,925
43,212

1,666,729

29,069,941
387,165
28,682,776

3,835,713

7,517

72,556

130,075

1,819

3,602

68,560

26,245

47,360
1,425
0
0
37,586

630,717
216,329
209,168
673,772
1,132,515

236,244
27,671
8,024
36,027
432,121

69,073
5,457
1,253
889
86,065

120,269
3,503
1,729
0
56,114

94,052
5,967
74
11,232
77,868

158,338
18,265
1,578
6,717
157,816

2,682,542

51,878,986

13,657,958

4,828,553

5,217,033

5,275,062

8,152,488

697,691
1,433,714
5,672
168,288
0
9,584
21,628

10,294,134
21,293,012
140,945
2,375,510
1,435,738
2,808,278
470,579

2,871,220
6,265,256
41,478
1,482,927
0
379,055
119,969

1,063,282
2,492,160
15,786
265,033
0
262,982
25,893

1,286,151
2,216,487
17,463
657,196
2
238,261
30,019

1,481,471
2,463,576
21,592
354,494
0
223,563
38,279

2,235,810
3,053,768
36,934
1,060,804
5,052
352,898
61,472

2,336,577

38,818,196

11,159,905

4,125,136

4,445,579

4,582,975

6,806,738

796,710
1,539,867

13,435,989
25,382,207

3,991,778
7,168,127

1,412,071
2,713,065

1,716,036
2,729,543

1,834,717
2,748,258

2,811,680
3,995,058

130,519
1,578
249
0
28,348

7,527,273
37,495
18,703
674,480
981,932

1,222,762
27,237
9,617
36,027
222,648

274,313
6,863
438
889
70,017

255,849
15,655
276
0
43,426

206,108
9,523
2,536
11,232
62,228

570,156
12,514
19,197
6,717
99,096

2,497,271

48,058,079

12,678,196

4,477,656

4,760,785

4,874,602

7,514,418

14,806

98,177

20,875

27,729

24,216

12,111

18,104

0
37,630
106,879
21,703
4,253

0
194,207
363,798
382,304
18,578

0
63,012
86,664
160,839
12,653

0
93,414
152,274
178,838
7,506

958,887

323,168

432,032

0
75,127
126,878
173,825
12,519
388,349

1,650
104,680
226,468
261,812
25,356

170,465

3,115
777,317
1,624,468
1,218,122
99,708
3,722,730

619,966

2,682,542

51,878,986

13,657,958

4,828,553

5,217,033

5,275,062

8,152,488

Table B-19—Continued
Total assets, liabilities and equity capital of domestic offices and subsidiaries of national banks,
United States and other areas, June 30, 1977
(Dollar amounts i n thousands)
Maryland

Maine
Number of banks
Assets

Cash and due from banks
U S Treasury securities
.
Obliaations of other U S aovernment aaencies and coroorations
Obligations of states and political subdivisions
Other bonds notes and debentures
Fpdpral Reserve stock and corDorate stock
Tradino account securities
Federal funds sold and securities purchased under agreements to resell
Loans total (excluding unearned income)
Reserve for possible loan losses
Loans, net of reserve
Direct lease financing
Bank premises, furniture and fixtures and other assets representing bank
oremises
. .
Real estate owned other than bank premises
Investments in unconsolidated subsidiaries and associated companies
Customers' liabilities to this bank on acceptances outstanding
Other assets
Total assets
Liabilities

Demand deposits of individuals, partnerships and corporations
Time and savings deposits of individuals, partnerships and corporations
Deposits of U S government
. . .
Deposits of states and political subdivisions
Deposits of foreign governments and official institutions
Deposits of commercial banks
Certified and officers' checks
Total deposits
Total demand deposits
. .
Total time and savings deposits
Federal funds purchased and securities sold under agreements to repurchase . . .
Liabilities for borrowed money
Mortgage indebtedness
. . .
Acceptances executed by or for account of this bank and outstanding
Other liabilities
Total liabilities
Subordinated notes and debentures . .

Massachusetts

Michigan

Minnesota

Mississippi
38

Missouri

M

39

72

123

204

$104,981
63,506
63,768
166,608
1,485
1,314
0
13,915

$576,113
261,894
98,105
476,231
8,258
5,632
14,026
275,895

$1,867,929
1,546,786
184,801
719,304
53,839
30,765
76,426
351,585

$2,772,149
2,026,071
414,316
2,362,192
145,973
29,564
17,257
1,066,362

$1,537,923
903,936
386,592
1,380,478
67,432
17,036
408,755
440,628

649,305
5,441
643,864

3,340,107
28,970
3,311,137

5,761,427
87,802
5,673,625

11,858,858
117,496
11,741,362

7,122,877
66,947
7,055,930

1,855,226
19,938
1,835,288

4,913,916
58,444
4,855,472

0

36,645

57,649

45,190

92,196

188

50,323

22,111
1,470
3
0
13,650

86,136
9,874
3,224
48,937
319,397

226,639
27,530
72,955
192,799
1,295,820

329,956
38,654
54,227
72,891
569,681

152,846
67,035
12,445
104,165
230,475

74,694
5,788
79
3,017
53,933

162,377
21,130
12,294
42,457
117,379

1,096,675

5,531,504

12,378,452

21,685,845

12,857,872

3,586,493

10,146,790

273,642
586,570
5,950
74,036
0
4,630
6,935

1,503,051
2,701,936
16,992
224,120
7,988
107,885
41,410

3,201,744
4,055,312
53,869
782,442
143,638
707,040
125,117

4,638,033
10,825,421
85,881
1,720,760
4,772
412,380
557,662

2,726,622
5,621,887
27,853
730,804
332
583,824
100,510

869,407
1,490,488
7,201
537,075
6,599
156,913
10,982

2,509,723
3,482,244
68,266
528,300
126
836,466
58,917

951,763

4,603,382

9,069,162

18,244,909

9,791,832

3,078,665

7,484,042

314,166
637,597

1,761,160
2,842,222
409,390
21,328
428
48,937
75,980

6,036,589
12,208,320
1,379,973
14,256
6,936
72,891
321,315

3,562,213
6,229,619
1,489,592
188,335
6,375
104,383
268,174

1,220,305
1,858,360

53,156
2,352
325
0
9,858

4,445,370
4,623,792
1,775,008
133,424
2,692
193,386
219,965

211,148
1,718
2,101
3,017
30,346

3,500,411
3,983,631
1,578,157
31,554
35,294
42,457
209,062

1,017,454

5,159,445

11,393,637

20,040,280

11,848,691

3,326,995

9,380,566

1;550

4,959

43,263

96,264

132,096

9,430

29,752

0
20,480
23,541
32,761
889

0
65,221
120,090
167,232
14,557

0
164,672
398,516
354,743
23,621

100
305,698
615,975
594,023
33,505

0
260,636
274,552
311,198
30,699

0
45,293
187,334
13,887
3,554

2,129
149,886
234,813
336,699
12,945

77,671

367,100

941,552

1,549,301

877,085

250,068

736,472

1,096,675

5,531,504

12,378,452

21,685,845

12,857,872

3,586,493

10,146,790

$471,8141
329,343
99,664
524,906
7,618
7,031
45,857
127,273

113
$1,643,220
642,434
319,995
1,144,878
16,507
14,867
73,238
1,030,219

Equity Capital

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



Table B-19—Continued
Total assets, liabilities and equity capital of domestic offices and subsidiaries of national banks,
United States and other areas, June 30, 1977
(Dollar amounts n thousands)
Montana
Number of banks
Assets
Cash and due from banks
U S Treasurv securities
Obligations of other U.S. government agencies and corporations
Obligations of states and political subdivisions
Other bonds notes and debentures
Federal Reserve stock and corporate stock
Tradina account securities
Federal funds sold and securities purchased under agreements to resell
Loans, total (excluding unearned income)
Reserve for possible loan losses
Loans, net of reserve
Direct lease financing
Bank premises, furniture and fixtures and other assets representing bank
oremises
Real estate owned other than bank premises
Investments in unconsolidated subsidiaries and associated companies
Customers' liabilities to this bank on acceptances outstanding
Other assets
Total assets
Liabilities
Demand deposits of individuals, partnerships and corporations
Time and savings deposits of individuals, partnerships and corporations
Deposits of U S government
Deposits of states and political subdivisions
Deposits of foreign governments and official institutions
Deposits of commercial banks
Certified and officers' checks
Total deposits
Total demand deposits
Total time and savings deposits
Federal funds purchased and securities sold under agreements to repurchase . ..
Liabilities for borrowed money
Mortgage indebtedness
Acceptances executed by or for account of this bank and outstanding
Other liabilities
Total liabilities
Subordinated notes and debentures
Equity Capital
Preferred stock
Common stock
Surplus
Undivided profits
Reserve for contingencies and other capital reserves
Total equity capital
en

Total liabilities, subordinated notes and debentures and equity capital . ..




Nebraska

New
Hampshire

Nevada

New Jersey

New Mexico

New York

56

118

4

42

104

39

128

$199,861
158,021
62,698
278,997
3,541
3,486
1,009
31,545

$606,716
266,868
160,581
531,713
10,594
5,632
31,014
154,259

$180,848
188,405
88,581
152,540
18,199
1,837
0
37,100

$153,947
120,406
14,427
176,380
1,590
1,895
0
11,825

$1,975,492
1,877,340
1,103,748
2,461,391
500,705
23,480
3,808
335,085

$276,224
193,515
113,307
318,869
1,339
3,818
0
131,305

$11,949,151
4,194,002
587,650
4,450,441
328,194
156,733
1,555,492
1,309,297

1,297,118
11,864

2,799,404
28,234

844,497
9,090

9,455,121
112,584

1,305,490
14,489

1,285,254

2,771,170

835,407

803,019
7,655
795,364

9,342,537

1,291,001

35,036,641
596,179
34,440,462

3,794

42,587

27,174

73

79,485

1,598

477,513

36,928
2,480
0
253
28,740

76,715
4,569
695
1,271
66,197

35,087
307
0
0
17,353

29,945
829
0
453
10,190

360,348
79,531
32
21,504
352,461

57,502
6,327
469
75
32,961

802,948
358,770
771,832
2,745,599
6,793,013

2,096,607

4,730,581

1,582,838

1,317,324

18,516,947

2,428,310

70,921,097

476,262
1,153,084
5,005
164,228
0
26,363
15,923

1,131,387
2,223,327
12,333
300,596
0
301,753
22,127

538,556
674,641
6,629
165,993
0
3,556
26,103

360,475
654,519
9,045
103,845
0
1,911
12,413

4,603,291
9,801,478
97,592
1,337,129
1,622
166,978
206,821

687,398
963,762
28,198
412,784
0
37,611
25,960

15,018,553
21,516,568
196,080
1,787,729
1,937,081
8,630,570
1,870,962

1,840,865

3,991,523

1,415,478

1,142,208

16,214,911

2,155,713

50,957,543

563,163
1,277,702

1,539,533
2,451,990

621,745
793,733

435,811
706,397

5,557,550
10,657,361

831,785
1,323,928

25,582,802
25,374,741

69,484
73
335
253
28,096

302,626
8,840
1,126
1,271
51,925

27,222
1,618
394
0
13,948

34,310
14,975
1,406
453
15,053

678,549
47,403
8,836
21,683
220,646

73,042
219
438
75
24,463

6,578,361
450,955
18,077
2,826,971
3,220,000

1,939,106

4,357,311

1,458,660

1,208,405

17,192,028

2,253,950

64,051,907

15,382

23,850

0

1,475

81,241

13,062

365,866

0
56,270
56,600
25,912
3,337

101
73,843
96,919
169,249
9,308

0
27,518
28,718
66,025
1,917

0
15,174
46,631
43,211
2,428

2,367
303,503
463,889
445,633
28,286

1,500
46,626
59,686
50,156
3,330

1,421
1,590,380
2,197,774
2,666,416
47,333

142,119

349,420

124,178

107,444

1,243,678

161,298

6,503,324

2,096,607

4,730,581

1,582,838

1,317,324

18,516,947

2,428,310

70,920,097

Table B-19—Continued
Total assets, liabilities and equity capital of domestic offices and subsidiaries of national banks,
United States and other areas, June 30, 1977
(Dollar amounts in thousands)
North Carolina
North Dakota
Number of banks
Assets
Cash and due from banks
U S Treasurv securities
Obligations of other U.S. government agencies and corporations
Oblioations of states and oolitical subdivisions
Other bonds notes and debentures
Federal Reserve stock and corporate stock
..
Tradina account securities
Federal funds sold and securities purchased under agreements to resell
Loans, total (excluding unearned income)
Reserve for possible loan losses

Oklahoma

Oregon

Pennsylvania

Rhode Island

28

Subordinated notes and debentures
Equity Capital
Preferred stock
.. .
Common stock
Surplus
Undivided profits
Reserve for contingencies and other capital reserves

$142,289
115,595
52,132
226,193
2,452
2,000
0
14,645
1,026,182
9,109
1,017,073

$2,796,781
2,659,895
619,249
3,700,701
98,691
41,620
86,871
827,429

$1,217,562
1,002,976
109,877
1,338,785
28,139
13,614
47,142
530,418

$785,067
410,093
106,268'
802,561
5,545
9,367
5,816
320,252

11,789,740
143,945
11,645,795

4,617,245
45,214
4,572,031

3,571,888
30,707
3,541,181

$4,201,896
4,041,553
1,485,734
3,777,098
258,806
75,286
624,121
2,389,372
21,314,885
247,811
21,067,074

$250,173
343,767
50,299
269,043
21,716
5,205
59,047
47,125
1,741,495
16,002
1,725,493

53,987

224

115,822

30,942

26,988

223,411

95,630

189,748
27,225
11,082
108,026
300,162

30,608
1,307
5
376
22,430

406,313
12,738
13,701
59,123
984,963

178,749
13,405
424
1,343
106,733

149,395
10,461
7,170
98,038
503,033

492,672
97,610
77,517
612,845
1,290,197

45,521
14,968
708
53,478
76,027

1,627,329

24,069,692

9,192,140

6,781,235

40,715,192

3,058,200

380,030
936,630
5,180
99,409
0
13,123
12,349

5,978,495
11,572,891
71,060
1,462,875
1,007
319,644
206,716

2,497,197
3,770,327
40,470
1,050,870
0
434,566
68,917

1,759,307
2,908,478
11,618
379,601
0
81,044
54,266

8,484,225
17,907,782
98,522
2,045,820
228,133
1,270,917
251,823

527,147
1,578,345
6,572
213,240
0
10,484
26,795

1,446,721

19,612,688

7,862,347

5,194,314

30,287,222

2,362,583

436,358
1,010,363

7,100,987
12,511,701

3,131,153
4,731,194

2,050,847
3,143,467

10.126,487
20,160,735

628,993
1,733,590

885,955
39,916
3,718
108,026
154,729

26,337
4,290
393
376
19,581

2,035,018
11,915
7,272
59,123
354,449

458,842
28,304
3,215
1,343
84,990

878,289
17,346
708
98,038
100,228

5,046,799
469,194
15,191
615,688
1,238,358

333.677
12,355
0
53,478
74,209

1,497,698

22,080,465

8,439,041

6,288,923

37,672,452

2,836,302

13,300

46,950

57,999

100,750

237,871

14,454

o

o

o

30,449
36,260
43,315
6,307

386,129
853,124
670,433
32,591

500
142,423
184,747
356,074
11,356

92,532
124,633
164,448
9,949

1 153
499,676
1,183,981
1,068,816
51,243

0
30,390
88,986
81,056
7,012

705,006
...

o

166,709
252,684
276,377
9,236

Total equity capital
Total liabilities, subordinated notes and debentures and equity capital

$1,329,385
487,397
258,310
1,092,876
37,763
12,947
118,665
394,571

133,794

Total liabilities

5

9,115,893

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

235

3,409,480
4,514,069

Total demand deposits
Total time and savings deposits

7

7,923,549

Total deposits

195

2,891,047
4,015,743
27,974
622,641
19,321
283,491
63,332

Total assets
Liabilities
Demand deposits of individuals, partnerships and corporations
Time and savings deposits of individuals, partnerships and corporations
Deposits of U S government
. . . .
Deposits of states and political subdivisions
Deposits of foreign governments and official institutions
Deposits of commercial banks
Certified and officers' checks

218

9,954,693

Direct lease financing
Bank premises, furniture and fixtures and other assets representing bank
nremises
.
Real estate owned other than bank premises .
Investments in unconsolidated subsidiaries and associated companies
Customers' liabilities to this bank on acceptances outstanding
Other assets

43

5,596,348
63,799
5,532,549

.. .

Loans, net of reserve




Ohio

116,331

1,942,277

395,100

391,562

2,804,869

207,444

9,954,693

1,627,329

24,069,692

9,192,140

6,781,235

40,715,192

3,058,200

Table B-19—Continued
Total assets, liabilities and equity capital of domestic offices and subsidiaries of national banks,
United States and other areas, June 30, 1977
(Dollar amounts in thousands)
South CaroSouth Dakota
lina

Tennessee

19

32

73

602

13

14

106

$383,280
186,306
90,550
372,733
258
3,601
16,010
145,755
1,558,712
17,318

$182,672
155,985
67,076
280,592
17,384
2,607
0
18,676
1,353,734
14,016

$1,181,910
869,661
296,419
775,674
17,065
14,703
13,118
372,274

$6,051,377
4,344,297
1,281,606
5,710,814
117,385
58,599
57,879
2,657,573

$267,778
157,958
51,547
166,476
3,563
2,850
8,685
21,993

$35,302
31,442
8,128
57,397
3,643
832
0
7,095

$1,166,049
860,380
298,957
1,346,049
13,655
17,443
15,185
325,687

4,503,741
56,387

21,741,139
244,483

1,387,935
11,311

299,694
2,458

5,942,835
61,337

1,541,394

1,339,718

4,447,354

21,496,656

1,376,624

297,236

5,881,498

5,475

2,004

36,766

113,804

17,015

151

10,655

74,845
6,625
0
3,239
34,680

41,062
1,307
0
478
28,620

196,447
64,923
39
3,229
273,480

838,373
97,880
31,819
246,189
907,520

37,236
1,912
0
56
25,691

8,618
830
0
0
3,512

270,534
26,843
736
5,532
141,855

2,864,751

2,138,181

8,563,062

44,011,771

2,139,384

454,186

10,381,058

1,196,391
957,418
13,934
177,867
0
26,334
27,924

447,268
1,238,888
7,734
173,399
0
20,202
10,773

2,121,116
3,876,251
30,134
755,511
1,114
450,545
50,807

12,122,407
14,998,329
221,266
5,164,826
18,609
2,471,821
365,472

527,332
1,012,033
2,947
232,762
0
25,586
28,255

86,690
298,280
1,554
21,392
0
1,089
4,748

2,722,336
5,267,394
45,131
750,314
117
114,463
67,057

2,399,868

1,898,264

7,285,478

35,362,730

1,828,915

413,753

8,966,812

1,372,420
1,027,448

2,754,257
4,531,221

15,642,495
19,720,235

630,242
1,198,673

99,985
313,768

3,150,714
5,816,098

187,963
10,500
150
3,239
29,023

511,731
1,386,533
41,092
0
2,327
478
27,926

538,879
1,362
5,551
3,229
114,940

4,213,231
96,777
103,733
246,204
613,107

119,721
7,693
98
56
27,757

1,179
1,555
0
0
2,404

381,536
54,773
39,271
5,532
145,727

2,630,743

1,970,087

7,949,439

40,635,782

1,984,240

418,891

9,593,651

7,600

21,176

31,955

183,150

24,342

3,442

45,838

0
40,460
76,017
106,396
3,535

0
142,367
211,866
209,742
17,693
581,668

133
758,385
916,640
1,335,137
182,544

226,408

0
38,550
43,229
60,940
4,199
146,918

3,192,839

0
35,103
55,917
38,067
1,715
130,802

0
7,506
9,514
13,856
977
31,853

0
168,549
269,036
290782
13,202
741,569

Total liabilities, subordinated notes and debentures and equity capital . .. 2,864,751

2,138,181

8,563,062

44,011,771

2,139,384

454,186

10,381,058

Number of banks
Assets
Cash and due from banks
U.S. Treasury securities
Obligations of other U.S. government agencies and corporations
Obligations of states and political subdivisions
Other bonds, notes and debentures
Federal Reserve stock and corporate stock
Trading account securities
Federal funds sold and securities purchased under agreements to resell
Loans, total (excluding unearned income)
Reserve for possible loan losses
Loans, net of reserve
Direct lease financing
Bank premises, furniture and fixtures and other assets representing bank
premises
Real estate owned other than bank premises
Investments in unconsolidated subsidiaries and associated companies
Customers' liabilities to this bank on acceptances outstanding
Other assets
Total assets
Liabilities
Demand deposits of individuals, partnerships and corporations
Time and savings deposits of individuals, partnerships and corporations
Deposits of U.S. government
Deposits of states and political subdivisions
Deposits of foreign governments and official institutions
Deposits of commercial banks
..
Certified and officers' checks
Total deposits
Total demand deposits
Total time and savings deposits
Federal funds purchased and securities sold under agreements to repurchase . ..
Liabilities for borrowed money
..
....
Mortgage indebtedness
Acceptances executed by or for account of this bank and outstanding
Other liabilities
Total liabilities
Subordinated notes and debentures
Equity Capital
Preferred stock
Common stock
Surplus
....
Undivided profits
Reserve for contingencies and other capital reserves
Total equity capital




Vermont

Utah

Texas

Virginia

Table B-19—Continued
oo

Total assets, liabilities and equity capital of domestic offices and subsidiaries of national banks,
United States and other areas, June 30, 1977
(Dollar amounts in thousands)
Wisconsin

Other areas
Puerto Rico Virgin Islands

Wyoming

District of
Columbia
non-national*

Washington
21

Total liabilities, subordinated notes and debentures and equity capital

$24,284
998
0
5,802
0
198
0
2,950

$340
1,097
1,677
0
0
0
0
0

$2,419
13,902
8,575
5,870
2,200
1
0
3,700

2,071,794
21,992
2,049,802

4,660,177
53,178
4,606,999

880,303
8,338
871,965

15,879
294
15,585

6
0
6

15,258
174
15,084

216,840

10,225

27,521

2,794

0

0

0

271,978
13,907
23,343
221,705
190,442

106,267
2,126
0
614
39,297

195,912
141,308
296
9,570
116,961

24,379
2,800
53
0
22,964

210
853
0
118
666

3
0
0
0
82

467
0
0
0
484

4,435,991

8,342,078

1,532,858

51,664

3,205

52,702

1,013,323
2,393,508
14,558
222,214
0
66,259
34,911

1,746,846
4,026,385
30,768
683,953
42,634
256,739
69,477

371,542
703,583
45,261
180,420
0
27,022
13,541

3,312
28,328
45
4,613
0
6,074
2,481

776
2,127
6
0
0
0
113

16,818
32,239
91
3
0
136
445

3,744,773

6,856,802

1,341,369

44,853

3,022

49,732

1,211,133
2,533,640

2,204,715
4,652,087

466,336
875,033

6,529
38,324

895
2,127

17,403
32,329

1,160,978
42,302
1,997
221,705
156,201

258,082
13,030
6,975
614
38,401

754,213
21,283
298
9,586
106,672

46,891
10,814
1,196
0
14,309

0
0
0
118
644

0
0
0
0
620

0
0
0
0
93

4,061,875

7,748,854

1,414,579

45,615

3,642

49,825

7,156

52,543

6,925

1,800

0

130

0
65,697
133,700
156,185
11,378

0
133,350
217,059
176,883
13,389

0
9,605
38,354
59,082
4,313

0
3,520
3,818
3,089
0

0
0
0
437
0

0
278
1,000
1,469
0

653,542
...

$167,063
124,373
66,797
213,487
2,748
1,640
0
31,795

6,015
157,846
207,661
254,283
27,737

Total equity capital

$915,662
843,448
252,436
756,489
59,668
12,980
24,889
377,939

89,265

Subordinated notes and debentures
Equity Capital
Preferred stock
Common stock
Surplus
Undivided profits . . . .
.
...
Reserve for contingencies and other capital reserves

$412,114
474,651
315,283
743,887
13,043
6,068
3,227
259,387

10,982,475

Total liabilities

1

3,735,225
5,664,067

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

1

9,399,292

Total demand deposits
Total time and savings deposits

1

3,221,440
4,848,669
33,701
953,187
10,565
208,753
122,977

Total deposits

46

11,725,282

Total assets
Liabilities
Demand deposits of individuals, partnerships and corporations
Time and savings deposits of individuals, partnerships and corporations
Deposits of U S government
Deposits of states and political subdivisions
Deposits of foreign governments and official institutions
Deposits of commercial banks
Certified and officers' checks

129

6,882,919
71,149
6,811,770

Direct lease financing
.
Bank premises, furniture and fixtures and other assets representing bank
Dremises
Real estate owned other than bank premises
Investments in unconsolidated subsidiaries and associated companies
Customers' liabilities to this bank on acceptances outstanding
Other assets

105

$1,478,182
501,557
121,899
927,489
5,251
12,714
31,918
896,287

Number of banks
Assets
Cash and due from banks
. ..
U S Treasury securities
Obligations of other U.S. government agencies and corporations
Obligations of states and political subdivisions
Other bonds notes and debentures
Federal Reserve stock and coroorate stock
Trading account securities
Federal funds sold and securities purchased under agreements to resell
Loans total (excludino unearned income)
Reserve for possible loan losses
Loans, net of reserve

West Virginia

366,960

540,681

111,354

4,249

437

2,747

11,725,282

4,435,991

8,342,078

1,532,858

51,664

3,205

52,702

* Non-national banks in the District of Columbia are supervised by the Comptroller of the Currency.



Table B-20
Total assets, liabilities and equity capital of domestic offices and subsidiaries of national banks,
United States and other areas, December 31, 1977
(Dollar amounts in thousands)

Number of banks
Assets
Cash and due from banks
U.S. Treasury securities
Obligations of other U.S. government agencies and corporations
Obligations of states and political subdivisions
Other bonds notes and debentures
Federal Reserve stock and corporate stock
Trading account securities
.
Federal funds sold and securities purchased under agreements to resell
Loans, total (excluding unearned income)
Reserve for possible loan losses
Loans, net of reserve
Direct lease financing
Bank premises, furniture and fixtures and other assets representing bank
premises
Real estate owned other than bank premises
Investments in unconsolidated subsidiaries and associated companies
Customers' liabilities to this bank on acceptances outstanding
Other assets
Total assets
Liabilities
Demand deposits of individuals, partnerships and corporations
Time and savings deposits of individuals, partnerships and corporations
Deposits of U S government
Deposits of states and political subdivisions . . .
Deposits of foreign governments and official institutions
Deposits of commercial banks
Certified and officers' checks
Total deposits
Total demand deposits
Total time and savings deposits
Federal funds purchased and securities sold under agreements to repurchase . . . .
Liabilities for borrowed money
Mortgage indebtedness
Acceptances executed by or for account of this bank and outstanding
Other liabilities
Total liabilities
Subordinated notes and debentures
Equity Capital
Preferred stock
Common stock
Surplus
Undivided profits
Reserve for contingencies and other capital reserves
Total equity capital
CD

Total liabilities, subordinated notes and debentures and equity capital . . . .




Total, U.S.
Total,
and
United States
other areas
4,654
4,655

Alabama

Arizona

Alaska

Arkansas

California

97

6

3

72

58

$92,071,598
49,922,441
17,822,093
62,791,959
2,929,095
1,010,144
3,813,999
32,124,054
344,522,088
3,895,860
340,626,228

$92,050,089
49,919,457
17,822,093
62,783,122
2,929,095
1,009,946
3,813,999
32,096,454
344,500,990
3,895,360
340,605,630

$1,029,878
497,381
289,746
1,216,648
22,184
10,216
27,970
353,694
4,767,094
53,204
4,713,890

$147,824
71,230
35,996
168,344
468
2,828
0
42,100
765,354
6,359
758,995

$906,959
459,037
90,635
435,636
6,662
6,611
6,385
363,800
3,679,583
27,167
3,652,416

$589,151
293,502
168,722
570,708
7,871
4,993
14,402
305,713
2,558,885
22,388
2,536,497

$12,734,245
5,760,850
1,841,390
6,888,754
166,837
126,147
304,402
5,095,174
51,686,794
591,864
51,094,930

4,406,264

4,406,264

26,282

8,981

8,503

8,065

1,638,953

10,797,941
1,821,489
2,249,034
6,796,548
22,261,054

10,797,725
1,820,653
2,249,034
6,796,401
22,260,269

159,482
6,795
63
18,595
112,713

60,222
2,327
0
0
20,919

150,972
7,650
0
2,777
89,866

99,502
5,035
131
1,087
83,447

1,578,827
80,824
615,239
1,968,732
4,925,732

651,443,941

651,360,231

8,485,537

1,320,234

6,187,909

4,688,826

94,821,036

164,473,198
266,071,033
4,820,633
41,964,341
5,587,928
30,612,999
6,713,892

164,466,534
266,035,034
4,820,602
41,943,170
5,587,928
30,600,750
6,713,454

2,287,891
3,764,743
69,795
759,980
0
316,189
54,804

476,492
397,420
34,165
191,968
0
3,133
19,163

1,864,977
3,115,399
58,462
188,991
3,109
45,502
83,236

1,300,015
2,031,901
20,543
364,782
0
235,244
25,069

22,328,197
42,731,729
652,919
4,547,738
1,323,184
2,926,799
1,126,414

520,244,024

520,167,472

7,253,402

1,122,341

5,359,676

3,977,554

75,636,980

211,650,059
308,593,965

211,640,981
308,526,491

2,871,037
4,382,365

567,048
555,293

2,106,609
3,253,067

1,681,523
2,296,031

26,301,352
49,335,628

59,336,268
3,882,171
473,816
6,848,094
12,625,958

59,336,268
3,882,171
473,816
6,847,947
12,624,983

388,773
34,949
1,351
18,595
150,024

52,527
23,127
1,032
0
14,378

358,425
6,507
3,906
2,777
66,771

273,171
15,680
460
1,092
68,409

8,508,569
923,244
58,318
1,969,431
1,887,306

603,410,331

603,332,657

7,847,094

1,213,405

5,798,062

4,336,366

88,983,848

28,102

409,192

3,034,830

3,033,030

35,496

950

86,634

25,246
9,551,745
16,649,723
17,733,303
1,038,763

25,246
9,548,225
16,645,905
17,736,405
1,038,763

0
116,066
236,086
244,813
5,982

0
31,626
39,782
32,579
1,892

0
40,913
99,876
156,260
6,164

0
70,124
93,519
147,964
12,751

0
951,324
2,251,104
2,182,664
42,904

44,998,780

44,994,544

602,947

105,879

303,213

324,358

5,427,996

651,443,941

651,360,231

8,485,537

1,320,234

6,187,909

4,688,826

94,821,036

Table B-20—Continued
Total assets, liabilities and equity capital of domestic offices and subsidiaries of national banks,
United States and other areas, December 31, 1977
(Dolla r amounts in thousands)
Colorado

.

Florida

Georgia

Hawaii

Federal funds purchased a n d securities sold under agreements to repurchase

....

I iahilitip^ for horrowpd monpv
Mortoaop indphtpdnpss
Acceptances executed by or for account of this bank and outstanding
Other liabilities
Total liabilities
Subordinated notes and debentures
Equity Capita!
Prpfprrpd StOPk

Common stock
Surolus
I JnriiviHprl nrofite
Reserve for contingencies and other capital reserves
Total equity capital
Total liabilities, subordinated notes and debentures and equity capital

—

$1,271,274
491,995
150,915
770,158
1,620
9,729
7,846
414,960
4,431,984
45,871

$929,636
258.461
107,745
265,822
85,167
5,527
11,145
318,599
1,796,216
18,768

$6,583
9,266
1,896
3,384
302
98
0
2,300
48,099
198

$793,046
513,119
106,847
626,139
14,981
8,925
2,028
351,074
2,772,337
33,312

$3,016,465
2,663,730
1,257,773
1,944,149
138,472
29,729
3,466
1,402,097
8,771,596
101,673

$1,543,910
485,700
131,948
611,127
12,691
52,490
26,271
503,424
4,673,497
67,296

$23,042
18,257
7,160
578
0
200
0
7,575
82,343
1,379

1,777,448

47,901

2,739,025

8,669,923

4,606,201

80,964

45,320

9,635

0

24,670

58,024

40,498

4,594

156,417
18,764
2,542
25,790
111,117
7,864,560

71,580
9,407
2,432
18,121
92,560
3,963,285

1,004
122
0
0
489
73,345

63,355
3,444
0
4,729
74,437
5,325.819

412,679
92,838
3,458
16,642
325,675
20,035,120

244,848
149.401
93,809
82,046
153,037

2,458
1.109
0
13
1.323

8,737,401

147.273

1,194,948
1,455,980
55,215
227,203
0
388,688
25,848

18,057
44,593
722
1,374
0
0
1,158

1,914,889
1,929,802
136,396
22,777
183,264
85,155
69,844

6,138,866
8,461,051
119,679
1,461,443
2,679
685.054
200,459

2,790,113
2,580,188
69,031
647,972
13,569
473,211
83,727

47,223
64,071
568
20,186
0
2,647
3,241

3,347,882

65,904

4,342,127

17,069,231

6,657,811

137,936

3,109,343
3,569,979
452,584
59,407
14,617
25,790
88,336

1,706,997
1,640,885

20,079
45,825

2,316,720
2,025,407

7,512,545
9,556,686

3,583,495
3,074,316

54,290
83,646

175,946
161.680
5
18,121
32,198

0
894
0
0
509

476,773
21,462
0
4,729
50,764

1,244,056
22,899
6,748
16,643
179,575

1,030.403
87.776
32,613
84,033
178,003

0
0
0
13
833

3,735,832

67,307

4,895,855

18,539,152

8,070,639

138,782

15,435

200

12,508

34,952

59,816

1,500

0
49,543
107,197
52,754
2,524

0
1,580
1,726
2,476
56

349
64,241
134,746
215,742
2,378

1,001
356,588
582,529
508,501
12,397

0
155,554
221,503
156,068
73,821

0
3,799
2,508
684
0

507,275

Total t i m e a n d s a v i n g s d e p o s i t s

2

0
102,923
166,181
233,863
4.308

Total dpmand dpoosits

64

37,229

Total deposits

263

7,320,056

Dprnand dpoo^ite nf individuals oartnershios and coroorations
Time and savings deposits of individuals, partnerships and corporations
Deoosits of U S aovernment
Deoosits of states and oolitical subdivisions
Dpno^its of foreion oovernmpnts and official institutions
Dpno^its of rommprcial banks
Certified and officers' checks

15

6,679,322

Total assets
Liabilities

5

2,406,348
3,052,869
81,318
602,654
0
454,814
81,319

Direct lease financing
.
Bank premises, furniture and fixtures and other assets representing bank
premises
.
Real estate owned other than bank oremises
Investments in unconsolidated subsidiaries and associated companies
Customers' liabilities to this bank on acceptances outstanding
Other assets

21

4,386,113

...

Federal funds sold and securities purchased under agreements to resell
Loans total (excluding unearned income)
Reserve for possible loan losses
Loans, net of reserve




District of
Columbia

Delaware

133

Number of banks
Assets
Cash and due from banks
U S Treasurv securities
Ohlioations of othpr U S oovernment aaencies and coroorations
Ohlinations of states and oolitical subdivisions
Other bonds notes and debentures
Federal Reserve stock and coroorate stock
Tradina account securities

Connecticut

212,018

5,838

417,456

1,461,016

606,946

6,991

7,864,560

3,963,285

73,345

5,325,819

20,035,120

8,737,401

147,273

Table B-20—Continued
Total assets, liabilities and equity capital of domestic offices and subsidiaries of national banks,
United States and other areas, December 31, 1977
(Dolla r amounts in thousands)
Idaho
Number of banks
Assets
Cash and due from banks
U.S. Treasury securities
Obligations of other U.S. government agencies and corporations
Obligations of states and political subdivisions
Other bonds, notes and debentures
Federal Reserve stock and corporate stock
Trading account securities
Federal funds sold and securities purchased under agreements to resell

Iowa

Kansas

Kentucky

Louisiana

Total liabilities

.

.

Total equity capital
Total liabilities, subordinated notes and debentures and equity capital . . . .

160

82

53

$364,146
270,008
73,703
314,029
2,932
4,681
0
54,800

$6,448,173
4,114,872
2,370,850
5,844,283
429,268
98,803
421,662
1,524,658

$1,806,648
1,626,946
583,779
1,489,626
197,265
17,265
24,447
782,364

$702,608
411,528
189,572
580,203
15,668
4,772
6,910
252,692

$811,647
568,133
230,674
632,534
14,651
7,899
18,788
523,227

$719,337
514,655
117,421
641,087
6,200
6,397
10,642
440,150

$1,217,968
1,305,355
171,189
908,529
8,255
10,487
154
757,909

31,318,092
377,776

7,291,434
77,612

2,890,945
23,009

2,829,079
26,536

3,233,330
29,832

4,209,469
45,138

30,940,316

7,213,822

2,867,936

2,802,543

3,203,498

4,164,331

6,052

80,235

140,689

1,957

4,705

75,894

25,940

54,201
1,216
0
0
37,415

671,730
276,626
242,047
665,242
883,440

242,916
40,473
8,556
28,427
458,249

73,672
5,760
1,280
601
84,314

121,599
3,878
1,790
0
63,394

105,317
7,193
98
4,863
94,301

169,930
23,941
887
8,244
134,716

2,934,924

55,012,205

14,661,472

5,199,473

5,805,462

5,947,053

8,907,835

778,371
1,509,254
14,882
196,595
0
11,657
24,833

11,680,528
22,185,628
322,920
2,562,565
1,475,446
2,816,840
488,823

3,298,950
6,577,251
118,013
1,480,359
35
379,615
138,996

1,245,730
2,595,222
33,038
252,680
0
287,432
28,757

1,452,673
2,276,177
47,863
710,975
0
331,816
33,477

1,770,417
2,608,157
48,791
356,929
0
278,517
42,334

2,547,780
3,243,583
63,152
1,064,345
2,810
410,042
71,521

41,532,750

11,993,219

4,442,859

4,852,981

5,105,145

7,403,233

15,043,308
26,489,442

4,517,050
7,476,169

1,623,208
2,819,651

2,055,410
2,797,571

2,200,360
2,904,785

3,250,912
4,152,321

163,409
1,444
180
0
34,773

7,662,167
77,267
18,980
668,693
1,142,117

1,379,981
13,401
9,503
28,428
209,347

316,316
4,197
686
601
66,247

415,622
21,000
268
0
46,718

323,156
12,819
2,595
4,863
75,946

691,510
20,634
20,559
8,244
92,763

51,101,974

13,633,879

4,830,906

5,336,589

5,524,524

8,236,943

20,351

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

99

2,735,398

Total demand deposits
Total time and savings deposits

121

916,901
1,618,691

Total deposits

423

2,535,592

Total assets
Liabilities
Demand deposits of individuals, partnerships and corporations
Time and savings deposits of individuals, partnerships and corporations
Deposits of U.S. government
Deposits of states and political subdivisions
Deposits of foreign governments and official institutions
Deposits of commercial banks
Certified and officers' checks

6

1,751,741

Direct lease financing
Bank premises, furniture and fixtures and other assets representing bank
premises
Real estate owned other than bank premises
Investments in unconsolidated subsidiaries and associated companies
Customers' liabilities to this bank on acceptances outstanding
Other assets




Indiana

1,766,942
15,201

Loans, total (excluding unearned income)
Reserve for possible loan losses
Loans, net of reserve

Subordinated notes and debentures
Equity Capital
Preferred stock
Common stock
.
Surolus
Undivided profits
Reserve for contingencies and other capital reserves

Illinois

101,490

28,568

29,028

24,217

13,635

26,586

0
37,605
116,654
21,314
3,602

6,715
780,608
1,677,223
1,252,963
91,232

400
195,525
371,639
412,813
18,648

0
63,339
90,144
172,346
13,710

0
93,899
153,237
190,341
7,179

0
75,359
128,158
193,240
12,137

1,650
111,707
228,250
281,620
21,079

179,175

3,808,741

999,025

339,539

444,656

408,894

644,306

2,934,924

55,012,205

14,661,472

5,199,473

5,805,462

5,947,053

8,907,835

Table B-20—Continued
Total assets, liabilities and equity capital of domestic offices and subsidiaries of national banks,
United States and other areas, December 31, 1977
(Dollar amounts in thousands)
Maryland

Maine
Number of banks
Assets
Cash and due from banks
U.S. Treasury securities
Obligations of other U.S. government agencies and corporations
Obligations of states and political subdivisions
Other bonds, notes and debentures
Federal Reserve stock and corporate stock
Trading account securities
Federal funds sold and securities purchased under agreements to resell
Loans, total (excluding unearned income)
Reserve for possible loan losses
Loans, net of reserve
Direct lease financing
Bank premises, furniture and fixtures and other assets representing bank
premises
Real estate owned other than bank premises
Investments in unconsolidated subsidiaries and associated companies
Customers' liabilities to this bank on acceptances outstanding
Other assets
Total assets
Liabilities
Demand deposits of individuals, partnerships and corporations
Time and savings deposits of individuals, partnerships and corporations
Deposits of U.S. government
Deposits of states and political subdivisions
Deposits of foreign governments and official institutions
Deposits of commercial banks
Certified and officers' checks
Total deposits
Total demand deposits
Total time and savings deposits
Federal funds purchased and securities sold under agreements to repurchase
Liabilities for borrowed money
Mortgage indebtedness
Acceptances executed by or for account of this bank and outstanding
Other liabilities
Total liabilities
Subordinated notes and debentures
Equity Capital
Preferred stock
Common stock
Surplus

Undivided profits
Reserve for contingencies and other capital reserves
Total equity capital
Total liabilities, subordinated notes and debentures and equity capital



Massachusetts

Michigan

Minnesota

Mississippi

Missouri

17

36

72

123

204

36

113

$132,631
64,355
59,849
153,681
731
1,325
499
24,275
682,791
5,942
676,849

$797,104
251,243
79,936
477,038
6,143
5,409
3,231
290,170
3,467,552
31,348
3,436,204

$2,113,425
1,446,320
185,124
768,693
49,408
30,175
190,545
540,858
5,952,338
83,469
5,868,869

$2,919,465
1,872,200
416,327
2,490,075
109,648
30,212
24,140
1,361,702
12,819,836
120,171
12,699,665

$1,996,298
871,551
489,821
1,579,867
55,943
17,683
264,891
423,541
7,582,676
66,299
7,516,377

$557,044
350,178
107,253
509,744
7,337
7,123
12,540
193,283
1,994,857
21,318
1,973,539

$2,291,632
658,849
325,025
1,178,799
14,890
15,013
73,311
1,690,156
5,377,398
61,667
5,315,731

0

39,578

58,753

50,339

139,699

176

52,876

24,100
1,305
159
0
13,019
1,152,778

87,122
9,393
3,387
63,401
139,551
5,688,910

229,622
31,811
81,394
253,925
1,083,407
12,932,329

345,124
41,367
46,890
73,874
632,188
23,113,216

163,384
58,640
17,462
104,534
245,960
13,945,651

92,431
5,497
79
2,766
53,767
3,872,757

166,982
16,617
12,331
28,415
160,697
12,001,324

301,506
607,584
13,302
81,792
0
6,208
8,904

1,592,315
2,589,291
47,260
274,708
689
95,551
48,834

3,769,692
4,160,467
108,575
760,127
140,092
730,336
108,822

5,375,957
11,120,988
196,701
1,868,769
871
453,342
552,248

3,230,050
5,900,104
82,976
902,272
327
695,869
101,493

1,016,080
1,604,405
16,156
502,342
5,629
163,138
14,434

3,076,535
3,664,730
118,104
619,419
235
1,231,861
60,384

1,019,296

4,648,648

9,778,011

19,568,876

10,913,091

3,322,184

8,771,268

361,572
657,724
39,812
1,679
321
0
9,971

1,845,244
2,803,404
505,699
14,802
2,308
63,401
78,860

5,047,867
4,730,144
1,596,880
57,186
2,747
256,773
231,820

6,895,964
12,672,912
1,407,027
38,824
7,057
73,874
334,581

1,331,842
1,990,342
230,956
17,670
874
2,766
30,857

4,549,552
4,221,716
2,193,079
26,368
35,989
28,415
156,018

1,071,079

5,313,718

11,923,417

21,430,239

4,216,168
6,696,923
1,310,946
256,284
6,044
104,891
306,288
12,897,544

3,605,307

11,211,137

1,550

3,127

40,596

103,037

133,094

9,850

29,971

0
20,480
23,641
35,313
715

0
62,568
117,518
179,685
12,294

0
164,826
401,586
382,501
19,403

0
311,740
623,200
611,261
33,739

0
264,654
298,448
321,751
30,160

0
45,165
205,613
3,923
2,899

2,129
150,186
235,743
358,765
13,393

80,149

372,065

968,316

1,579,940

915,013

257,600

760,216

1,152,778

5,688,910

12,932,329

23,113,216

13,945,651

3,872,757

12,001,324

Table B-20—Continued
Total assets, liabilities and equity capital of domestic offices and subsidiaries of national banks,
United States and other areas, December 31, 1977
(Dollar amounts ir thousands)
Nebraska

Montana

Number of banks . .
Assets
Cash and due from banks
U.S. Treasury securities
Obligations of other U.S. government agencies and corporations
Obligations of states and political subdivisions
Other bonds notes and debentures
Federal Reserve stock and corporate stock
Trading account securities
Federal funds sold and securities purchased under agreements to resell

Nevada

New Hampshire

New Jersey

New Mexico

New York

56

117

4

41

100

40

127

$242,775
168,490
50,907
296,714
3,513
3,560
0
60,937

$842,479
253,681
153,619
535,753
9,935
6,305
36,280
360,996

$197,490
199,747
76,856
172,227
5,948
1,957
0
53,900

$182,520
122,882
13,365
167,806
1,713
1,885
0
28,705

$2,274,105
1,920,461
1,096,732
2,555,078
484,315
23,639
10,419
488,637

$326,947
231,657
112,508
318,358
1,718
4,314
0
158,661

$14,127,466
4,363,847
644,762
4,233,173
345,447
166,102
1,093,913
1,504,534

1,361,856
12,256

2,857,154
31,085

843,425
8,128

10,092,449
109,877

1,420,396
16,021

40,122,582
587,893

1,349,600

2,826,069

918,275
9,051
909,224

835,297

9,982,572

1,404,375

39,534,689

4,957

41,214

39,824

20

84,654

1,946

529,665

38,432
1,807
0
322
27,489
2,249,503

76,714
5,583
167
1,423
66,066
5,216,284

40,281
372
0
0
19,164
1,716,990

30,246
651
0
315
10,575
1,395,980

367,521
78,220
165
19,041
403,838
19,789,397

74,740
5,842
300
0
32,507
2,673,873

898,399
352,438
938,681
1,894,355
5,989,801
76,617,272

557,738
1,192,973
8,704
190,064
0
39,180
18,845

1,304,410
2,298,558
23,966
290,349
0
424,023
28,236

603,097
720,086
11,525
152,055
0
3,856
24,367

396,546
680,663
15,976
113,841
0
7,855
13,238

5,075,618
10,047,506
206,919
1,512,900
4,480
243,464
227,513

769,533
1,027,972
27,472
446,479
0
48,849
29,855

16,353,306
22,794,844
351,904
2,177,334
2,151,524
8,812,524
1,187,636

2,007,504

4,369,542

1,514,986

1,228,119

17,318,400

2,350,160

53,829,072

671,311
1,336,193

1,823,506
2,546,036

684,814
830,172

502,930
725,189

6,282,112
11,036,288

916,648
1,433,512

26,655,830
27,173,242

44,799
30
590
322
31.105

399,838
2,656
1,058
1,423
56,288

30,564
17,819
0
0
17,580

38,259
1,886
1,479
315
14,035

770,539
100,978
8,448
19,233
227,036

88,517
19,070
378
0
30,041

9,649,654
707,187
26,296
1,936,276
3,182,916

2,084,350

4,830,805

1,580,949

1,284,093

18,444,634

2,488,166

69,331,401

Subordinated notes and debentures
Equity Capital

16,698

23,850

0

2,075

79,470

14,477

359,392

Preferred stock
Common stock
Surplus
Undivided profits
Reserve for contingencies and other capital reserves

0
62,877
63,140
19,364
3,074

101
74,143
99,793
179,586
8,006

0
27,518
33,018
74,109
1,396

0
15,032
46,579
46,143
2,058

2,277
302,017
466,188
467,626
27,185

1,500
55,292
71,526
40,129
2,783

1,421
1,757,800
2,290,993
2,733,781
142,484

148,455

361,629

136,041

109,812

1,265,293

171,230

6,926,479

2,249,503

5,216,284

1,716,990

1,395,980

19,789,397

2,673,873

76,617,272

Loans, total (excluding unearned income)
Reserve for possible loan losses
Loans, net of reserve
Direct lease financing
Bank premises, furniture and fixtures and other assets representing bank
premises
Real estate owned other than bank premises
Investments in unconsolidated subsidiaries and associated companies
Customers' liabilities to this bank on acceptances outstanding
Other assets
Total assets .
Liabilities
Demand deposits of individuals, partnerships and corporations
Time and savings deposits of individuals, partnerships and corporations
Deposits of U.S. government
Deposits of states and political subdivisions
Deposits of foreign governments and official institutions
Deposits of commercial banks
Certified and officers' checks
Total deposits
Total demand deposits
Total time and savings deposits
Federal funds purchased and securities sold under agreements to repurchase . . . .
Liabilities for borrowed money
Mortgage indebtedness
Acceptances executed by or for account of this bank and outstanding
Other liabilities
.
Total liabilities

Total equity capital
CO

Total liabilities,




subordinated

notes and debentures

and equity capital

...

Table B-20—Continued
Total assets, liabilities and equity capital of domestic offices and subsidiaries of national banks,
United States and other areas, December 31, 1977
(Dollar amounts in thousands)
North Carolina
North Dakota
Number of banks
Assets
Cash and due from banks
U.S. Treasury securities
Obligations of other U.S. government agencies and corporations
Obligations of states and political subdivisions
Other bonds, notes and debentures . . .
.
Federal Reserve stock and corporate stock
Trading account securities
Federal funds sold and securities purchased under agreements to resell
Loans total (excluding unearned income)
Reserve for possible loan losses

Oklahoma

Oregon

Pennsylvania

Rhode Island

28

....

Loans, net of reserve
Direct lease financing
Bank premises, furniture and fixtures and other assets representing bank
premises
Real estate owned other than bank premises
Investments in unconsolidated subsidiaries and associated companies
Customers' liabilities to this bank on acceptances outstanding
Other assets
Total assets
Liabilities
Demand deposits of individuals partnerships and corporations
Time and savings deposits of individuals, partnerships and corporations
Deposits of U S government
Deposits of states and political subdivisions
Deposits of foreign governments and official institutions
Deposits of commercial banks
...
Certified and officers' checks
Total deposits
Total demand deoosits
Total time and savings deposits
Federal funds purchased and securities sold under agreements to repurchase . . . .
Liabilities for borrowed money
Mortaaae indebtedness
.
Acceptances executed by or for account of this bank and outstanding
Other liabilities
Total liabilities
Subordinated notes and debentures
Equity Capital
Preferred stock
Common stock
Surplus
Undivided orofits
Reserve for contingencies and other capital reserves
Total equity capital
Total liabilities, subordinated notes and debentures and equity capital . . . .



Ohio

43

218

193

7

233

5

$1,783,813
486,667
327,793
1,184,161
7,884
12,812
136,138
633,348

$187,165
123,154
44,477
237,740
3,733
2,111
0
49,588

$1,582,234
985,580
92,042
1,396,130
25,055
15,394
61,993
761,975

5,856,999
64,057

1,063,956
9,322

$3,347,569
2,404,881
649,665
3,736,848
93,311
41,444
39,250
1,284,931
12,763,807
150,950

5,120,656
50,005

$778,126
387,982
83,579
866,744
5,557
9,343
22,181
402,089
4,023,118
31,937

$4,985,993
3,648,009
1,972,596
3,829,562
281,977
63,428
690,832
1,984,029
22,815,986
258,196

$330,692
370,960
48,788
312,905
24,059
4,198
79,864
60,621
1,858,062
15,872

5,792,942

1,054,634

12,612,857

5,070,651

3,991,181

22,557,790

1,842,190

62,155

214

132,637

33,870

29,239

240,254

90,685

198,517
19,592
11,715
156,625
401,657

32,028
1,712
10
352
21,973

457,895
13,248
13,512
39,547
885,080

160,451
12,533
437
1,134
140,385

149,541
9,980
8,158
109,013
628,324

527,436
89,629
80,392
595,142
1,446,639

45,217
11,284
498
53,580
93,636

11,215,819

1,758,891

25,752,675

10,339,864

7,481,037

42,993,708

3,369,177

3,461,912
4,203,885
133,725
777,759
9,000
357,016
63,203

461,094
986,443
8,470
98,058
0
18,019
13,527

6,808,478
12,070,697
214,899
1,566,574
7
529,012
233,066

2,912,378
4,019,804
113,297
1,082,919
0
616,683
97,258

1,970,410
3,062,946
40,254
518,939
0
92,257
58,965

9,679,139
18,800,701
260,135
2,504,791
216,827
1,515,709
247,691

605,720
1,708,315
19,816
202,431
0
16,808
19,775

9,006,500

1,585,611

21,422,733

8,842,339

5,743,771

33,224,993

2,572,865

4,195,072
4,811,428

526,029
1,059,582

8,283,868
13,138,865

3,759,155
5,083,184

2,281,810
3,461,961

11,648,079
21,576,914

718,260
1,854,605

997,359
22,353
3,689
156,625
157,560

11,846
561
986
352
22,804

1,849,555
26,731
25,619
39,548
322,059

570,695
34,770
3,020
1,134
101,511

924,602
87,756
1,718
109,013
104,565

4,099,106
602,944
11,631
595,088
1,305,647

360,295
36,878
0
53,580
112,878

10,344,086

1,622,160

23,686,245

9,553,469

6,971,425

39,839,409

3,136,496

135,585

13,300

47,726

63,887

100,750

258,328

22,000

0
166,864
253,944
307,290
8,050

0
32,519
39,801
43,569
7,542

0
390,852
866,462
730,272
31,118

500
143,516
189,502
378,885
10,105

0
92,532
125,108
183,548
7,674

1,070
500,132
1,186,276
1,145,588
62,905

0
30,390
88,061
85,390
6,840

736,148

123,431

2,018,704

722,508

408,862

2,895,971

210,681

11,215,819

1,758,891

25,752,675

10,339,864

7,481,037

42,993,708

3,369,177

Table B-20—Continued
Total assets, liabilities and equity capital of domestic offices and subsidiaries of national banks,
United States and other areas, December 31, 1977
(Dollar amounts in thousands)
South
Carolina
Number of banks
Assets
Cash and due from banks
U S Treasury securities
.
Obligations of other U.S. government agencies and corporations
Obligations of states and political subdivisions
Other bonds, notes and debentures
Federal Reserve stock and corporate stock
Trading account securities
Federal funds sold and securities purchased under agreements to resell
Loans, total (excluding unearned income)
Reserve for possible loan losses
Loans, net of reserve

. . .

Total assets
Liabilities
Demand deposits of individuals, partnerships and corporations
Time and savings deposits of individuals, partnerships and corporations
Deposits of U S government
Deposits of states and political subdivisions
Deposits of foreign governments and official institutions
Deposits of commercial banks
Certified and officers' checks
. •
Total deposits
Total demand deposits
Total time and savings deposits
Federal funds purchased and securities sold under agreements to repurchase . . . .
Liabilities for borrowed money
Mortgage indebtedness
Acceptances executed by or for account of this bank and outstanding
Other liabilities
Total liabilities
Subordinated notes and debentures
Equity Capital
Preferred stock
Common stock
Surolus
Undivided profits
Reserve for contingencies and other capital reserves
i

Total equity capital
Total liabilities, subordinated notes and debentures and equity capital . . . .




Tennessee

Utah

Texas

Virginia

Vermont

19

Direct lease financing
Bank premises, furniture and fixtures and other assets representing bank
premises ..
Real estate owned other than bank premises
Investments in unconsolidated subsidiaries and associated companies
Customers' liabilities to this bank on acceptances outstanding
Other assets

en

South Dakota
32

73

604

12

14

103

$478,977
220,313
74,768
371,507
258
3,753
16,564
227,985

$230,394
137,209
45,840
292,379
8,894
2,617
0
25,350

$1,336,243
886,013
285,512
782,642
16,609
14,537
12,938
521,618

$7,636,581
4,273,565
1,310,300
6,021,930
131,487
59,539
72,956
3,312,890

$322,048
158,535
52,482
170,522
1,054
2,853
7,574
117,935

$37,991
32,279
6,672
62,454
3,417
828
0
14,210

$1,359,297
865,860
296,807
1,360,150
12,804
17,598
15,990
317,814

1,656,263
18,159

1,454,383
13,631

4,775,017
56,349

23,967,197
258,887

1 563 303
13,397

322,321
2,648

6,396,069
63,022

1,638,104

1,440,752

4,718,668.

23,708,310

1,549,906

319,673

6,333,047

11,420

2,116

39,637

143,474

19,148

133

9,849

76,684
5,227
0
302
42,008

42,105
2,020
0
342
28,730

202,277
51,468
42
6,678
235,411

884,307
100,110
36,909
356,100
1,043,047

36,969
1,770
0
30
30,885

10,435
408
0
0
4,576

275,321
29,294
24
9,494
145,352

3,167,870

2,258,748

9,110,293

49,091,505

2,471,711

493,076

11,048,653

1,319,002
1,003,181
53,725
223,556
0
43,068
23,696

519,673
1,292,508
10,783
158,566
0
28,405
14,755

2,362,180
3,981,846
69,528
774,841
1,147
534,200
56,742

14,400,588
16,308,251
369,794
5,303,824
17,977
2,971,557
456,484

640,590
1,123,321
12,280
281,825
0
39,240
21,409

94,083
317,378
2,909
30,922
0
1,373
5,433

3,017,660
5,440,072
82,218
782,739
134
109,344
84,673

2,666,228

2,024,690

7,780,484

39,828,475

2,118,665

452,098

9,516,840

1,574,622
1,091,606

597,468
1,427,222

3,090,483
4,690,001

18,649,677
21,178,798

757,226
1,361,439

112,529
339,569

3,454,887
6,061,953

211,605
9,437
325
302
36,809

25,863
420
. 2,284
342
27,921

553,101
10,121
5,692
6,678
119,866

4,394,053
167,893
99,808
356,195
646,500

135,410
1,702
93
30
33,211

713
1,358
0
0
2,899

502,811
25,124
39,155
9,494
138,628

2,924,706

2,081,520

8,475,942

45,492,924

2,289,111

457,068

10,232,052

7,600

22,476

31,740

269,825

45,090

3,434

46,095

0
41,460
80,239
110,990
2,875

0
39,489
46,509
64,387
4,367

0
143,214
213,091
229,914
16,392

133
769,575
935,113
1,446,579
177,356

0
35,053
56,087
44,700
1,670

0
7 541
9 646
14,403
984

0
164,881
274 728
318,974
11,923

235,564

154,752

602,611

3,328,756

137,510

32,574

770,506

3,167,870

2,258,748

9,110,293

49,091,505

2,471,711

493,076

11,048,653

Table B-20—Continued
Total assets, liabilities and equity capital of domestic offices and subsidiaries of national banks,
United States and other areas, December 31, 1977
(Dollar amounts in thousands)
Wisconsin

Other areas
Puerto Rico

Wyoming

UISUHJI Ul

Columbia
non-national*

Washington
Number of banks
Assets
Cash and due from banks
U.S. Treasury securities
Obligations of other U.S. government agencies and corporations
Obligations of states and political subdivisions
Other bonds, notes and debentures
Federal Reserve stock and corporate stock
Trading account securities
Federal funds sold and securities purchased under agreements to resell.
Loans, total (excluding unearned income)
Reserve for possible loan losses
Loans, net of reserve
Direct lease financing
Bank premises, furniture and fixtures and other assets representing bank
premises
Real estate owned other than bank premises
Investments in unconsolidated subsidiaries and associated companies
Customers' liabilities to this bank on acceptances outstanding
Other assets
Total assets
Liabilities
Demand deposits of individuals, partnerships and corporations
Time and savings deposits of individuals, partnerships and corporations
Deposits of U.S. government
Deposits of states and political subdivisions
Deposits of foreign governments and official institutions
Deposits of commercial banks
Certified and officers' checks
Total deposits
Total demand deposits
Total time and savings deposits
Federal funds purchased and securities sold under agreements to repurchase
Liabilities for borrowed money
Mortgage indebtedness
Acceptances executed by or for account of this bank and outstanding
Other liabilities
Total liabilities
Subordinated notes and debentures
Equity Capital
Preferred stock
Common stock
Surplus
Undivided profits
Reserve for contingencies and other capital reserves
Total equity capital
Total liabilities, subordinated notes and debentures and equity capital ..

West Virginia

21

106

128

46

1

1

$1,856,020
505,311
151,168
970,910
15,316
17,576
27,252
809,196

$454,404
436,533
310,122
- 769,082
15,080
6,209
3,265
357,847

$1,071,448
738,119
258,958
843,474
51,816
11,494
30,915
479,943

$207,173
149,001
70,479
225,238
2,601
1,713

$21,509
2,984

$2,240
16,947
7,960
3,714
2,187

58,420

27,600

1
0
0

7,613,359
78,330

2,206,877
22,698

5,062,928
50,166

914,031
8,626

21,098

19,202

500

237

7,535,029

•2,184,179

5,012,762

905,405

20,598

18,965

286,992

10,962

38,428

2,353

0

0

276,034
10,023
23,411
159,885
252,509

112,512
2,008

204,970
112,541

29,217
1,460

573

54
0

565
0
0
0
792

12,896,632

0

0
8,837

0
198
0

39,121

19,897
172,617

23,146

216
836
0
147
785

4,701,324

9,047,955

1,676,260

83,710

53,371

3,599,645
5,170,220
89,495
1,022,107
12,099
237,030
161,916

1,077,644
2,479,715
28,817
223,313

426,653
740,648
52,557
209,719

6,664
35,999

15,865
32,854

31

0

0

91,549
30,137

2,144,837
4,290,014
80,888
626,320
22,794
272,626
83,605

38,443
13,287

12,249

438

585
4
0
112
310

10,292,512

3,931,175

7,521,084

1,481,307

76,552

49,730

4,211,713
6,080,799

1,297,332
2,633,843

2,711,461
4,809,623

547,763
933,544

9,078
67,474

16,856
32,874

1,379,076
40,501
3,838
159,885
217,451

322,244
14,619
6,823

35,819
10,356
1,163

39,027

742,158
17,821
2,562
19,939
123,695

19,539

0
0
0
147
975

0
0
0
0
504

12,093,263

4,313,888

8,427,259

1,548,184

77,674

50,234

111,152

6,758

55,867

8,341

1,800

110

6,000
158,031
208,432
292,705
27,049

0

0

0

0

68,508
137,685
163,085
11,400

137,301
215,879
197,727
13,922

9,746
40,294
65,457
4,238

3,520
3,818
3,102

0
278
1,000
1,749

0

0

692,217

380,678

564,829

119,735

4,236

3,027

12,896,632

4,701,324

9,047,955

1,676,260

83,710

53,371

0
0

0

0

 * Non-national banks in the District of Columbia are supervised by the Office of the Comptroller of the Currency.


0

21,171

Table B-21
Loans of national banks, by states, December 31, 1977
(Dollar amounts in millions)
Total
loans
All national banks . . . .

$352,648

Personal
Commercial
Loans to
Loans
Loans to
loans to
Loans to
and induspurchase
secured
financial
individuals
farmers
trial loans
or carry
by real
institutions
securities
estate
$98,047
$23,434
$78,838
$9,597
$120,740
$12,359

$9,634

$344,522
4,767
765
3,680
2,559
51,687
4,432
1,796
48
2,772
8,772

270
134
1,819
473
13
1
1
83

1,544
225
1,057
750
16,175
1,411
531
7
660
2,287

1,687
216
1,143
760
10,657
1,209
474
15
598
2,874

145
10
71
50
1,367
120
57

51
0
10
1,846
74
66
107
22
60

40
1
245
881
211
617
651
143
64
12

1,663
17
475
13,244
1,814
703
762
836
1,641
205

1,612
16
518
4,704
2,064
592
740
1,082
1,099
192

101
14
1,198
131
49
52
73
112
8

4,673
82
1,767
31,318
7,291
2,891
2,829
3,233
4,209
683

144
562
813
355
55
345
4
27
8
3

50
75
203
300
29
301
2
111
4
1

27
7
128
458
70
276
229
990
21
2

829
3,027
3,447
2,739
535
1,908
366
672
213
266

1,102
1,121
2,859
1,344
691
1,250
430
690
266
280

94
138
577
258
50
158
19
40
5
7

3,468
5,952
12,820
7,583
1,995
5,377
1,362
2,857
918
843

4,533
360
6,540
986
295
4,415
1,158
1,239
7,098
761

327
31
4,775
305
1
342
203
475
2,233
87

55
6
3,069
72
2
91
230
37
452
5

9
113
253
104
209
205
567
184
178

2,709
470
19,989
2,349
324
3,443
1,790
1,281
7,730
690

2,589
487
4,657
2,162
251
4,575
1.168
817
5,062
304

184
13
1,368
113
10
212
106
60
648
43

10,092
1,420
40,123
5,857
1,064
12,764
5,121
4,023
22,816
1,858

1,722
1,495
4,949
24,434
1,591
330
6,657
7,685
2,370
5,154
947
22

331
397
1,322
4,485
641
173
2,611
1,959
998
1,985
265
2

26
4
218
1,318
35

8
4
88
816
13

145
336
10
285
2

37
45
8
96
4
0

30
411
97
1,165
48
7
98
411
13
131
142
0

554
352
1,569
10,232
501
72
1,486
2,936
416
1,530
292
15

735
315
1,571
5,325
332
73
2,142
1,837
887
1,032
230
1

39
12
84
1,092
21
5
138
160
39
95
11
4

1,656
1,454
4,775
23,967
1,563
322
6,396
7,613
2,207
5,063
914
21

2,828

1,016

387

36

1

665

600

122

2,792

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

4,966
790
3,867
2,634
52,891
4,518
1,830
50
2,809
9,045

1,288
338
1,092
842
18,019
1,064
636
27
1,005
3,215

156
1
179
23
4,089
183
93
0
386
328

27
1
54
74
765
59
26
0
36
105

Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky :
Louisiana
Maine

4,879
84
1,817
31,708
7,535
2,920
2,855
3,344
4,341
693

1,221
50
533
6,083
3,069
856
520
1,094
1,169
273

190
0
23
3,752
173
37
53
94
197
2

Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire

3,565
6,037
13,086
7,701
2,065
5,452
1,429
2,913
957
875

1,319
1,108
5,059
2,248
635
1,212
379
383
441
317

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

10,406
1,479
40,651
6,092
1,090
13,283
5,222
4,092
23,401
1,891

South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
Puerto Rico
District of Columbiaall*

Total loans
less unearned
income^

Other
loans

119

122
152

* Includes national and non-national banks in the District of Columbia, all of which are supervised by the Comptroller of the Currency.
t Equals total loans from the balance sheet before the deduction of the reserve for possible loan losses.
Note: Data may not add to totals because of rounding. Dashes indicate amounts of less than $500,000.




177

Table B-22
Outstanding balances, credit cards and related plans of national banks, December 31, 1977
Other related credit plans

Credit cards
Outstanding
volume
(dollars in
thousands)

Number of
banks
All national banks

Outstanding
volume
(dollars in
thousands)

Number of
banks

1,020

$10,679,513

1,305

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

16
2
2
7
25
64
3
0
2
82
24

118,690
23,444
132,185
37,900
2,282,270
225,543
82,864
0
82,848
326,185
269,327

10
1
3
5
37
76
11
0
10
51
14

4,755
297
35,154
833
494,074
30,594 *
24,388
0
47,236
26,647
29,197

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

1
3
45
60
11
7
36
6
12

1,211
41,239
907,522
168,883
55,745
75,575
95,024
84,365
17,084

1
2
127
24
23
18
13

824
11,299
66,799
17,037
2,937
2,935
5,217
7,580
6,310

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

4
34
45
41
2
20
12
5
3

230,176
159,435
439,541
48,348
42,302
272,941
4,082
173,584
27,389

14
49
51
118
1
38
22
26
1

30,019
101,541
64,305
72,435
798
19,281
4,308
4,838
4,984

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

18
18
6
26
8
6
118
8
3
17
4

20,801
123,140
27,560
1,049,787
182,247
2,110
539,185
129,277
153,123
420,174
39,318

15
61
5
49
24
13
62
28
0
50
2

3,687
104,628
892
519,661
76,644
3,065
38,302
4,472
0
197,241
15,776

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

5
1
11
61
5
4
31
7
11
71
7

67,232
688
168,228
477,222
58,612
4,129
278,207
307,094
30,735
171,250
3,692

10
6
11
85
0
1
26
4
10
65
15

10,552
1,700
14,247
35,689
0
8
15,855
17,698
1,282
15,648
2,700

11

47,303

Wisconsin
Wyoming
Puerto Rico .
District of Columbia — all*.

* Non-national banks in the District of Columbia are supervised by the Comptroller of the Currency.

178



0

0
82,848

2,196,369

Table B-23
National banks engaged in direct lease financing, December 31, 1977
Number of banks
engaged in direct
lease financing

Total number
of banks
All national banks .

Amount of direct
lease financing
(dollars in thousands)

4,655

840

$ 4,406,264

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

97
6
3
72
58
133
21
5
15
263

10
2
1
10
19
41
1
0
4
54

26,282
8,981
8,503
8,065
1,638,953
45,320
9,635
0
24,670
58,024

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

64
2
6
423
121
99
160
82
53
17

12
1
2
72
30
17
25
16
10
0

40,498
4,594
6,052
80,235
140,689
1,957
4,705
75,894
25,940
0

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

36
72
123
204
36
113
56
117
4
41

3
10
23
23
7
24
16
24
3
2

39,578
58,753
50,339
139,699
176
52,876
4,957
41,214
39,824
20

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

100
40
127
28
43
218
193
7
233
5

9
10
14
6
1
62
91
2
14
3

84,654
1,946
529,665
62,155
214
132,637
33,870
29,239
240,254
90,685

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

19
32
73
604
12
14
103
21
106
128
46

2
4
13
65
4
2
6
11
17
24
18

11,420
2,116
39,637
143,474
19,148
133
9,849
286,992
10,962
38,428
2,353

Puerto Rico.
District of Columbia — all*.

1

0

17

24,670

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




179

Table B-24

00

o

Total income and expenses of foreign and domestic offices and subsidiaries of national
banks *, United States and other areas, year ended December 31, 1977
(Dollar amounts in thousands)
Total,
U.S. and
other areas
Number of banks
Operating income:
Interest and fees on loans
Interest on balances with banks
Income on Federal funds sold and securities .purchased under agreements to
resell in domestic offices
U.S. Treasury securities
Obligations of other U.S. government agencies and corporations
Obligations of states and political subdivisions
Other bonds, notes and debentures
Dividends on stock
Income from direct lease financing
Income from fiduciary activities
Service charges on deposit accounts in domestic offices
Other service charges, commissions and fees
Other income
Total operating income
Operating expenses:
Salaries and employee benefits
Interest on time certificates of deposit of $100,000 or more, issued by domestic
offices
Interest on deposits in foreign offices
Interest on other deposits
Expense of Federal funds purchased and securities sold under agreements to
repurchase in domestic offices
Interest on borrowed money
Interest on subordinated notes and debentures
Occupancy expense of bank premises, net
Furniture and equipment expense
Provision for possible loan losses (or actual net loan losses)
Other expenses
Total operating expenses
Income before income taxes and securities gains or losses
Applicable income taxes (domestic and foreign)
Income before securities gains or losses
Securities gains (losses), gross
Applicable income taxes (domestic and foreign)
Securities gains (losses), net
Income before extraordinary items
Extraordinary items, net of tax effect
Net income




Total
United States

Alabama

Alaska

Arizona

Arkansas

California

4,655

4,654

97

6

3

72

58

$35,446,288
3,243,048

$35,445,040
3,241,705

$414,238
1,540

$78,306

$309,154
5,163

$211,952

59

$6,154,500
874,709

1,532,133
3,319,382
1,212,580
2,929,628
578,815
61,291
537,633
1,131,299
986,925
1,566,644
1,243,253

1,531,766
3,319,277
1,212,580
2,929,205
578,815
61,291
537,633
1,131,299
986,898
1,566,623
1,242,926

13,041
33,244
20,605
59,842
2,199

2,389
4,441
2,879
9,663

14,081
18,855
12,209

599
877

143
185
936

19,878
34,967
7,547
2,869

13,627
19,308
21,869
9,104

1,301
5,379
6,297
1,043

10,608
24,815
8,637
7,757

1,000
3,850
10,531
8,888
9,492

206,408
329,781
124,409
237,895
122,782
8,015
163,656
124,636
173,101
283,334
230,546

53,788,919

53,785,058

610,093

113,021

450,777

321,450

9,033,772

9,486,853

9,486,362

122,475

35,488

111,469

64,446

1,615,471

4,031,501
7,123,000
11,956,920

4,029,884
7,123,000
11,956,132

61,355

9,400

19,328

24,996

0

0

425

0

170,393

15,852

146,295

98,846

584,730
1,947,416
1,812,949

3,116,094
603,986
202,668
1,710,294
1,140,820
1,985,113
5,598,346

3,116,094
603,986
202,623
1,710,137
1,140,681
1,984,791
5,597,783

19,563
5,788
2,076
18,553
16,981
22,333
81,662

3,035

16,480

506
68

52

6,293
5,153
2,465
12,772

5,014
22,796
10,428
18,153
47,591

13,598
1,030
2,043
12,889
10,636
8,308
39,853

339,718
84,752
26,256
278,675
150,783
301,590
731,030

46,955,595

46,951,473

521,179

91,032

398,031

276,645

7,873,370

6,833,324
1,767,061
5,066,263

6,833,585
1,767,061
5,066,524

88,914
11,507
77,407

21,989
5,837
16,152

52,746
13,290
39,456

44,805
6,578
38,227

1,160,402
474,284
686,118

52,456
16,000

52,456
16,000

2,807
1,337

782
313

-659
-332

1,752

49

767

-343

36,456
5,102,719
36,029

36,456
5,102,980
36,029

1,470
78,877

469

-327
39,129

985

392

16,621

39,212
215

686,510
18,406

5,138,748

5,139,009

78,981

16,746

39,129

39,427

704,916

104

125

542
206
634

0

782

28,756
755
297

Equity capital, beginning of period
Net income (loss)
Sale, conversion, acquisition or retirement of capital
Changes incident to mergers and absorptions
Cash dividends declared on common stock
Cash dividends declared on preferred stock
Stock dividends issued
Other increases (decreases)

40,939,975
5,138,748
577,447
129,850
-1,993,176
-1,090
-1
206,993

40,937,968
5,139,009
574,957
129,850
-1,993,176
-1,090
-1
206,993

545,606
78,981
2,037
-17
-27,033
0
0
3,374

91,007
16,746
82
0
-1,839
0
0
-116

277,102
39,129
32
0
-13,050
0
0
0

290,044
39,427
2,254
0
-8,438
0
0
1,077

4,774,768
704,916
69,821
543
-267,093
0
0
145,041

Equity capital, end of period

44,998,746

44,994,510

602,948

105,880

303,213

324,364

5,427,996
533,307
79,731
628
301,590
-288,063

Reserve for possible loan losses, beginning of period
Recoveries credited to reserve
Changes incident to mergers and absorptions
Provision for possible loan losses
Losses charged to reserve
Reserve for possible loan losses, end of period . .
Ratios:
Net income before dividends to equity capital (percent)
Total operating expense to total operating income (percent)
See footnotes at end of table.

oo




3,685,837
508,933
45,946
1,985,113
-2,179,836

3,685,107
506,695
45,946
1,984,791
-2,177,046

46,899
7,971
0
22,333
-24,001

6,439
1,328
0
2,465
-3,877

23,826
2,682
0
18,153
-17,494

19,366
2,025
0
8,308
-7,314

4,045,993

4,045,493

53,202

6,355

27,167

22,385

627,193

11.42

11.42

13.10

15.82

12.90

12.16

12.99

87.30

87.29

85.43

80.54

88.30

86.06

87.15

Table B-24—Continued

00

Total income and expenses of foreign and domestic offices and subsidiaries of national
banks *, United States and other areas, year ended December 31, 1977
(Dollar amounts in thousands)

Colorado
Number of banks
Operating income:
Interest and fees on loans
Interest on balances with banks
Income on Federal funds sold and securities purchased under agreements to
resell in domestic offices
U.S. Treasury securities
Obligations of other U.S. government agencies and corporations
Obligations of states and political subdivisions
Other bonds, notes and debentures
Dividends on stock
Income from direct lease financing
Income from fiduciary activities
Service charges on deposit accounts in domestic offices
Other service charges, commissions and fees
Other income
Total operating income
Operating expenses:
Salaries and employee benefits
Interest on time certificates of deposit of $100,000 or more, issued by domestic
offices
Interest on deposits in foreign offices
Interest on other deposits
Expense of Federal funds purchased and securities sold under agreements to
repurchase in domestic offices
Interest on borrowed money
Interest on subordinated notes and debentures
Occupancy expense of bank premises, net
Furniture and equipment expense
Provision for possible loan losses (or actual net loan losses)
Other expenses
Total operating expenses
Income before income taxes and securities gains or losses
Applicable income taxes (domestic and foreign)
Income before securities gains or losses

Securities gains (losses), gross
Applicable income taxes (domestic and foreign).
Securities gains (losses), net
Income before extraordinary items . .
Extraordinary items, net of tax effect .

Net income




Connecticut

133

21

$404,943
614

$162,612
13,226

17,937
30,572
10,878
37,701
175
519
4,053
19,408
18,776
19,844
11,428

Delaware

District of
Columbia

Florida

Georgia

Hawaii

15

263

64

$4,205
0

$224,849
16,783

$748,276
11,551

$446,542
12,970

$8,759
0

5,762
16,831
7,645
11,811
5,861
405
962
14,674
3,806
8,423
5,832

159
616
191
181
28
6
0
0
112
57
82

14,000
33,476
7,628
27,463
1,169
360
1,802
15,256
11,143
6,681
2,800

25,457
30,693
9,964
32,337
900
2,094
4,240
20,856
30,169
20,543
37,835

358
1,066
538
59
0
12
200
0
112
759
36

576,848

257,850

5,637

363,410

64,984
173,906
79,044
95,773
9,873
1,725
6,223
43,603
40,223
38,307
26,961
1,340,449

674,600

11,899

122,416

62,641

1,042

81,947

259,104

157,361

3,654

50,115
351
137,832

16,548
5,251
63,378

76
0
2,277

23,719
23,249
74,153

81,539
645
410,077

51,019
11,939
117,341

1,538
0
2,967

22,568
1,790
2,555
21,448
17,478
19,598
92,780

16,721
588
788
12,635
8,536
t3,691
32,246

0
24
14
188
132
198
734

54,615
2,108
2,393
44,529
35,131
61,308
260,530

59,682
4,684
4,987
25,641
23,180
67,710
116,787

23
5
75
836
387
1,018
2,264

488,931

233,023

4,685

16,930
949
706
15,500
9,841
12,046
39,666
298,706

1,211,979

640,331

12,767

87,917
22,602
65,315

24,827
6,787
1*8,040

952
327
625

64,704
18,359
46,345

128,470
16,148
112,322

34,269
-2,835
37,104

-868
-34
-834

1,861
909

339
169

1,308
657

4,059
1,510

2,245
960

123
12

952
66,267
105

170
18,210
292

10
635
0

651
46,996
161

2,549
114,871
3,718

1,285
38,389
65

111
-723
45

66,372

18,502

635

47,157

118,589

38,454

-678

Equity capital, beginning of period
Net income (loss)
Sale, conversion, acquisition or retirement of capital
Changes incident to mergers and absorptions
Cash dividends declared on common stock
Cash dividends declared on preferred stock
Stock dividends issued
Other increases (decreases)

458,548
66,372
5,629
0
-23,701
0
0
428

202,857
18,502
14
0
-9,612
0
0
256

5,375
635
0
0
-172
0
0
0

389,335
47,157
0
0
-18,590
-147
0
-299

1,294,338
118,589
20,223
76,179
-58,408
-60
0
10,145

592,357
38,454
779
0
-24,919
0
0
276

7,666
-678
4
0
0
0
0
0

Equity capital, end of period .

507,276

212,017

5,838

417,456

1,461,006

606,947

6,992

Reserve for possible loan losses, beginning of period . . . .
Recoveries credited to reserve
Changes incident to mergers and absorptions
Provision for possible loan losses
Losses charged to reserve

36,332
8,790
69
19,598
-18,918

18,031
2,826
0
13,691
-15,780

153
27
0
198
-180

29,351
2,153
0
12,046
-10,238

85,338
18,403
5,115
61,308
-68,491

56,739
9,064
0
67,710
-65,433

981
1,483
0
1,018
-2,103

45,871

18,768

198

33,312

101,673

68,080

1,379

Ratios:
Net income before dividends to equity capital (percent). . . .

13.08

8.73

10.88

11.30

8.12

6.34

-9.70

Total operating expense to total operating income (percent)

84.76

90.37

83.11

82.20

90.42

94.92

107.29

Reserve for possible loan losses, end of period .

See footnotes at end of table.

CO
CO




Table B-24—Continued

00

Total income and expenses of foreign and domestic offices and subsidiaries of national
banks *, United States and other areas, year ended December 31, 1977
(Dollar amounts in thousands)
Idaho

Total operating expenses
Income before income taxes and securities gains or losses
Applicable income taxes (domestic and foreign)
Income before securities gains or losses

:

Securities gains (losses), gross
Applicable income taxes (domestic and foreign)
. . . .

121

99

160

82

53

$164,222
619

$2,983,446
398,972

$625,551
19,935

$240,809
807

$241,326
390

$273,596
2,832

$353,841
5,271

3,262
16,002
4,506
13,897
225
266
975
1,807
7,368
5,933
1,768

91,056
304,492
149,423
281,807
50,850
7,451
12,215
107,674
42,499
119,455
121,936

35,386
100,526
40,964
77,791
16,012
1,017
9,654
23,315
20,853
25,818
14,522

11,520
27,333
14,162
28,718
1,136
277
239
7,407
6,474
14,461
3,049

18,371
34,876
16,355
31,366
944
442
742
6,688
8,253
11,700
3,614

18,661
35,091
8,875
33,198
256
354
5,524
4,202
7,928
11,876
6,690

29,620
84,728
12,388
43,618
654
810
2,988
6,610
16,281
19,472
6,281

4,671,276

1,011,344

356,392

375,067

409,083

582,562

45,663

629,839

179,087

59,504

69,312

76,355

104,576

13,112
0
76,446

498,658
775,892
913,916

78,503
8,757
328,168

13,219
0
141,801

29,440
0
123,978

30,379
3,489
127,004

81,285
2,516
133,795

4,931
71
1,077
6,037
5,637
5,092
26,004

481,940
39,333
7,205
110,036
77,790
187,238
352,323

64,319
5,520
1,518
35,018
28,375
30,996
114,380

16,703
244
2,202
10,387
7,722
5,836
46,950

13,834
1,550
1,786
11,403
10,874
8,141
42,749

16,298
669
1,000
13,482
12,917
10,636
49,164

30,653
1,417
1,529
20,277
21,976
22,872
71,821

4,074,170

874,641

304,568

313,067

341,393

492,717

36,780
11,145
25,635

597,106
148,140
448,966

136,703
20,645
116,058

51,824
10,337
41,487

62,000
13,799
48,201

67,690
13,876
53,814

89,845
19,745
70,100

-38
-18

Operating expenses:
Salaries and employee benefits
Interest on time certificates of deposit of $100,000 or more, issued by domestic
offices
Interest on deposits in foreign offices
Interest on other deposits
Expense of Federal funds purchased and securities sold under agreements to
repurchase in domestic offices
Interest on borrowed money
Interest on subordinated notes and debentures
Occupancy expense of bank premises, net
Furniture and equipment expense
Provision for possible loan losses (or actual net loan losses)
Other expenses

423

184,070

Total operating income




Louisiana

Kentucky

Kansas

220,850

Operating income:
Interest and fees on loans
Interest on balances with banks
Income on Federal funds sold and securities purchased under agreements to
resell in domestic offices
U S Treasury securities
Obligations of other U.S. government agencies and corporations
Obligations of states and political subdivisions
Other bonds, notes and debentures
Dividends on stock
Income from direct lease financing
Income from fiduciary activities
Service charges on deposit accounts in domestic offices
Other service charges, commissions and fees
Other income

Net income

Iowa

Indiana

6

Number of banks

Securities gains (losses) net
Income before extraordinary items
Extraordinary items, net of tax effect

Illinois

13,469
5,152

5,348
2,459

948
453

1,155
378

270
124

940
290

-20
25,615
23

8,317
457,283
1,426

2,889
118,947
61

495
41,982
95

111
48,978
172

146
53,960
201

650
70,750
589

25,638

458,709

119,008

42,077

49,150

54,161

71,339

Equity capital, beginning of period
Net income (loss)
Sale, conversion, acquisition or retirement of capital.
Changes incident to mergers and absorptions
Cash dividends declared on common stock
Cash dividends declared on preferred stock
Stock dividends issued
Other increases (decreases)

159,518
25,638
1,733
0
-7,778
0
0
64

3,484,165
458,709
14,742
652
-150,347
-116
0
932

918,158
119,008
4,022
0
-42,922
0
0
760

304,880
42,077
1,407
688
-12,506
0
0
2,991

408,757
49,150
495
0
-14,144
0
0
396

368,953
54,161
0
0
-14,113
0
0
-105

592,869
71,339
2,273
0
-21,798
-82
0
-294

Equity capital, end of period

179,175

3,808,737

999,026

339,537

444,654

408,896

644,307

Reserve for possible loan losses, beginning of period .
Recoveries credited to reserve
Changes incident to mergers and absorptions
Provision for possible loan losses
Losses charged to reserve

13,719
2,228
0
5,092
-5,838

387,331
31,778
441
187,238
-207,548

77,154
8,547
0
30,996
-39,084

21,146
1,905
37
5,836
-5,916

24,801
3,797
0
8,141
-10,204

26,212
2,904
0
10,636
-9,920

41,336
6,824
0
22,872
-25,894

Reserve for possible loan losses, end of period

15,201

399,240

77,613

23,008

26,535

29,832

45,138

12.39

11.05

13.25

11.07

85.46

83.47

83.45

84.58

Ratios:
Net income before dividends to equity capital (percent). . . .

14.31

12.04

11.91

Total operating expense to total operating income (percent)

83.35

87.22

86.48

See footnotes at end of table.

CO

en




Table B-24—Continued

00
CD

Total income and expenses of foreign and domestic offices and subsidiaries of national
banks *, United States and other areas, year ended December 31, 1977
(Dollar amounts in thousands)

Maine
Number of banks
Operating income:
Interest and fees on loans
Interest on balances with banks
Income on Federal funds sold and securities purchased under agreements to
resell in domestic offices
U.S. Treasury securities
Obligations of other U.S. government agencies and corporations
Obligations of states and political subdivisions
Other bonds, notes and debentures
Dividends on stock
Income from direct lease financing
Income from fiduciary activities
Service charges on deposit accounts in domestic offices
Other service charges, commissions and fees
Other income
Total operating income
Operating expenses:
Salaries and employee benefits
Interest on time certificates of deposit of $100,000 or more, issued by domestic
offices
Interest on deposits in foreign offices
Interest on other deposits
Expense of Federal funds purchased and securities sold under agreements to
repurchase in domestic offices
Interest on borrowed money
Interest on subordinated notes and debentures
Occupancy expense of bank premises, net
Furniture and equipment expense
Provision for possible loan losses (or actual net loan losses)
Other expenses
Total operating expenses . . .
Income before income taxes and securities gains or losses.
Applicable income taxes (domestic and foreign)
Income before securities gains or losses
Securities gains (losses), gross
Applicable income taxes (domestic and foreign). .
Securities gains (losses), net
Income before extraordinary items .
Extraordinary items, net of tax effect .

Net income




Maryland

Massachusetts

Michigan

Minnesota

Mississippi

Missouri

17

36

72

123

204

36

113

$62,389
126

$307,537
16,777

$757,670
166,588

$1,124,323
59,931

$620,450
19,412

$175,379
2,867

$438,155
15,489

1,999
4,327
3,468
7,149
54
78
0
2,928
2,128
2,979
833

19,835
16,942
6,505
21,962
521
314
6,974
6,140
10,964
8,720
5,352

38,387
96,757
13,190
34,106
35,914
1,590
24,539
56,068
16,418
48,655
37,242

56,070
128,277
28,109
116,952
11,332
1,870
3,787
40,169
33,027
27,334
23,940

25,643
62,482
30,402
69,428
4,782
1,003
11,225
26,879
14,118
38,998
43,469

8,751
21.525
7,074
24,299
471
403
98
2,918
9,269
9,812
5,300

64,568
44,647
23,576
55,281
1,238
785
7,876
25,695
10,917
27,188
14,087

88,458

428,543

1,327,124

1,655,121

968,291

268,166

729,502

20,564

90,392

256,658

312,721

154,453

49,619

130,495

4,470
0
30,017

27,185
10,322
118,660

89,982
290,570
156,691

87,081
74,455
584,549

75,431
18,959
278,851

29,677
0
75,074

63,951
10,834
158,877

2,097
85
136
3,995
2,542
3,187
11,930

28,916
756
262
16,842
12,466
16,296
47,636

128,418
19,833
3,133
51,721
27,559
53,194
134,577

72,210
1,629
6,714
59,391
37,681
33,728
168,896

83,895
12,690
9,521
21,394
16,058
29,879
118,754

12,923
482
520
9,726
8,370
10,642
32,085

99,215
1,735
1,471
21,115
21,032
20,733
91,855

79,023

369,733

1,212,336

1,439,055

819,885

229,118

621,313

9,435
872
8,563

58,810
15,001
43,809

114,788
40,510
74,278

216,066
40,264
175,802

148,406
39,322
109,084

39,048
5,997
33,051

108,189
25,028
83,161

300
137

116
-11

-1,319
-970

5,385
2,364

-997
-766

-103
-185

2,205
1,001

163
8,726
-4

127
43,9'36
-621

-349
73,929
2,577

3,021
178,823
253

-231
108,853
461

82
33,133
-15

1,204
84,365
40

8,722

43,315

76,506

179,076

109,314

33,118

84,405

-quity capital, beginning of period
Net income (loss)
Sale, conversion, acquisition or retirement of capital
Changes incident to mergers and absorptions
Cash dividends declared on common stock
Cash dividends declared on preferred stock
Stock dividends issued
Other increases (decreases)

75,521
8,722
284
0
-4,376
0
0
-1

339,836
43,315
1,818
3,520
-15,882
0
0
-544

918,425
76,506
290
3,414
-33,716
0
0
3,394

1,472,184
179,076
4,471
972
-86,774
-6
0
10,012

839,286
109,314
2,356
2,727
-37,624
0
0
-1,047

230,441
33,118
1,134
3,157
-11,144
0
0
893

714,469
84,405
1,354
0
-40,329
-128
0
441

Equity capital, end of period .

80,150

372,063

968,313

1,579,935

915,012

257,599

760,212

Reserve for possible loan losses, beginning of period
Recoveries credited to reserve
Changes incident to mergers and absorptions
Provision for possible loan losses
Losses charged to reserve

5,764
987
0
3,187
-3,996

26,101
2,697
250
16,296
-13,997

77,052
19,106
104
53,194
-64,228

114,454
11,513
33
33,728
-38,162

61,585
4,366
594
29,879
-29,392

18,668
3,592
300
10,642
-11,884

56,561
7,903
215
20,733
-23,745

Reserve for possible loan losses, end of period

5,942

31,347

85,228

121,566

67,032

21,318

61,667

Ratios:
Net income before dividends to equity capital (percent)

10.88

11.64

7.90

11.33

11.95

12.86

11.10

89.33

86.28

91.35

86.95

84.67

85.44

85.17

Total operating expense to total operating income (percent)
See footnotes at end of table.

oo




Table B-24—Continued

00
00

Total income and expenses of foreign and domestic offices and subsidiaries of national
banks *, United States and other areas, year ended December 31, 1977
(Dollar amounts in thousands)

Nebraska

Montana
Number of banks

Operating expenses:
Salaries and employee benefits
Interest on time certificates of deposit of $100,000 or more, issued by domestic
offices
Interest on deposits in foreign offices
Interest on other deposits
Expense of Federal funds purchased and securities sold under agreements to
repurchase in domestic offices
Interest on borrowed money
Interest on subordinated notes and debentures
Occupancy expense of bank premises, net
Furniture and equipment expense
Provision for possible loan losses (or actual net loan losses)
Other expenses

Securities gains (losses), gross
Applicable income taxes (domestic and foreign)
Securities gains (losses), net
Income before extraordinary items
Extraordinary items, net of tax effect
Net income




New York

....

117

4

41

100

40

127

$123,331
206

$257,639
519

$82,648
34

$77,585
604

$813,729
14,426

$127,712
1,420

$6,874,142
1,009,584

3,328
10,137
4,320
14,070
238
196
493
892
3,750
4,925
1,810

11,557
18,443
11,378
28,353
702
334
3,949
9,305
6,223
16,767
5,832

2,422
12,962
6,898
8,090
1,132
101
3,819
2,626
6,550
1,578
1,431

1,845
8,250
1,046
7,688
100
114
17
2,542
2,502
2,061
1,210

29,792
124,195
78,691
120,353
38,051
1,483
7,998
22,326
29,276
24,668
24,687

7,801
12,797
8,115
14,905
171
228
174
2,716
6,151
7,434
1,455

76,418
272,359
45,137
224,997
212,191
9,512
147,703
143,956
53,384
337,272
279,233

167,696

Total operating income . .

Income before income taxes and securities gains or losses
Applicable income taxes (domestic and foreign)
Income before securities gains or losses

New Mexico

56

Operating income:
Interest and fees on loans
Interest on balances with banks
Income on Federal funds sold and securities purchased under agreements to
resell in domestic offices
U.S. Treasury securities
Obligations of other U.S. government agencies and corporations
Obligations of states and political subdivisions
Other bonds, notes and debentures
Dividends on stock
Income from direct lease financing
Income from fiduciary activities
Service charges on deposit accounts in domestic offices
Other service charges, commissions and fees
Other income

Total operating expenses

New Jersey

New
Hampshire

Nevada

371,001

130,291

105,564

1,329,675

191,079

9,685,888

28,148

67,416

31,110

23,407

279,088

38,132

1,492,055

9,246
0
66,646

21,527
0
121,622

10,826
0
27,836

4,079
0
33,714

60,843
6,879
494,186

24,014
0
53,077

578,896
3,300,148
790,575

2,405
90
1,158
3,878
3,994
2,224
20,801

15,978
1,590
1,868
12,661
11,797
10,592
45,318

1,340
906
0
5,361
3,379
1,668
16,031

2,243
322
108
5,213
3,158
4,128
18,142

38,359
2,971
4,957
58,636
37,860
38,620
160,361

3,901
135
1,149
8,234
6,567
8,587
22,294

442,867
344,187
25,821
303,423
127,270
468,894
829,674

138,590

310,369

98,457

94,514

1,182,760

166,090

8,703,810

29,106
7,000
22,106

60,632
13,208
47,424

31,834
10,400
21,434

11,050
1,149
9,901

146,915
11,206
135,709

24,989
5,761
19,228

982,078
350,799
631,279

-147
-95

883
366

-857
-407

488
197

5,747
2,557

1,411
687

-9,758
-7,111

-52
22,054
47

517
47,941
117

-449
20,985
0

291
10,192
35

3,190
138,899
898

724
19,952
752

-2,647
628,632
209

22,101

48,058

20,985

10,227

139,797

20,704

628,841

Equity capital, beginning of period
Net income (loss)
Sale, conversion, acquisition or retirement of capital
Changes incident to mergers and absorptions
Cash dividends declared on common stock
Cash dividends declared on preferred stock
Stock dividends issued
Other increases (decreases)

134,384
22,101
756
0
-8,226
0
0
-561

328,955
48,058
401
0
-16,455
-6
0
679

117,841
20,985
0
0
-6,599
0
0
3,814

103,414
10,227
215
0
-3,954
0
0
-85

1,193,785
139,797
11,109
-6,517
-71,227
-72
0
-1,581

153,045
20,704
4,225
0
-6,271
-23
-1
-446

6,223,448
628,841
357,236
11,436
-301,645
0
0
7,162

Equity capital, end of period .

148,454

361,632

136,041

109,817

1,265,294

171,233

6,926,478

Reserve for possible loan losses, beginning of period
Recoveries credited to reserve
Changes incident to mergers and absorptions
Provision for possible loan losses
Losses charged to reserve

11,082
2,166
0
2,224
-3,217

27,423
3,755
0
10,592
-10,681

8,291
1,308
0
1,668
-2,216

6,897
842
0
4,128
-3,738

106,602
9,579
236
38,620
-45,162

13,328
2,445
0
8,587
-8,339

631,709
110,021
30,539
468,894
-577,086

Reserve for possible loan losses, end of period

12,255

31,089

9,051

8,129

109,875

16,021

664,077

14.89

13.29

15.43

9.31

11.05

12.09

9.08

82.64

83.66

75.57

89.53

88.95

86.92

89.86

Ratios:
Net income before dividends to equity capital (percent). .
Total operating expense to total operating income (percent)
See footnotes at end of table.

oo
CD




Table B-24—Continued

8

Total income and expenses of foreign and domestic offices and subsidiaries of national
banks *, United States and other areas, year ended December 31, 1977
(Dollar amounts in thousands)

North Carolina North Dakota
Number of banks
Operating income:
Interest and fees on loans
Interest on balances with banks
Income on Federal funds sold and securities purchased under agreements to
resell in domestic offices
U.S. Treasury securities
Obligations of other U.S. government agencies and corporations
Obligations of states and political subdivisions
Other bonds, notes and debentures
Dividends on stock
Income from direct lease financing
Income from fiduciary activities
Service charges on deposit accounts in domestic offices
Other service charges, commissions and fees
Other income
Total operating income
Operating expenses:
Salaries and employee benefits
Interest on time certificates of deposit of $100,000 or more, issued by domestic
offices
Interest on deposits in foreign offices
Interest on other deposits
Expense of Federal funds purchased and securities sold under agreements to
repurchase in domestic offices
Interest on borrowed money. . .
Interest on subordinated notes and debentures
Occupancy expense of bank premises, net
Furniture and equipment expense
Provision for possible loan losses (or actual net loan losses)
Other expenses
Total operating expenses
Income before income taxes and securities gains or losses
Applicable income taxes (domestic and foreign)
Income before securities gains or losses
Securities gains (losses), gross
Applicable income taxes (domestic and foreign)
Securities gains (losses), net
Income before extraordinary items
Extraordinary items, net of tax effect
Net income




Ohio

Oklahoma

Oregon

Pennsylvania Rhode Island

28

43

218

193

$529,529
44,257

$93,724
178

$1,119,925
47,467

$428,127
2,732

$340,381
23,658

$1,984,492
149,341

$158,372
2,469

34,402
34,762
21,498
53,949
2,969
740

2,074
8,426
3,624
11,205
228
113
9

28,842
66,099
8,125
65,203

2,210
2,030
3,893
1,038

58,062
183,443
43,785
178,724
7,343
2,263
11,820
47,730
48,860
48,923
26,521

2,522
11,557
16,506
14,184
20,446

13,812
27,798
7,995
40,545
468
559
2,797
12,041
21,604
20,828
7,012

138,583
262,333
120,565
184,462
21,246
5,843
23,426
89,384
29,571
59,613
87,503

3,187
22,609
3,108
13,156
1,595
293
7,492
11,856
3,394
3,684
10,965

824,873

128,752

1,824,866

667,308

519,498

3,156,362

242,180

177,276

21,534

342,126

117,339

115,741

535,983

44,845

46,813
48,547
200,662

4,404
0
56,299

94,727
10,827
578,333

96,839
269
172,200

25,011
10,397
144,249

292,167
198,491
836,995

26,637
7,461
64,241

57,294
2,725
10,217
32,990
21,197
20,910
97,843

817
326
1,072
3,368
2,529
1,644
13,721

110,529
734
3,154
62,452
47,345
48,575
228,690

27,908
1,411
4,376
16,700
16,644
31,968
79,759

36,997
1,604
7,482
16,999
12,757
9,263
54,518

287,294
31,745
17,409
100,716
66,740
145,464
286,349

17,884
813
1,089
8,614
4,022
8,316
29,256

716,474

105,714

1,527,492

565,413

435,018

2,799,353

213,178

108,399
24,039
84,360

23,038
5,775
17,263

297,374
49,460
247,914

101,895
11,810
90,085

84,480
23,678
60,802

357,009
38,542
318,467

29,002
7,037
21,965

-434
-258

18
-36

-2,257
-1,267

1,709
404

-1,082
-554

844
110

604
312

-176
1,098

54
17,317
157

-990
246,924
121

1,305
91,390
555

-528
60,274
0

734
319,201
83

292
22,257
0

85,282

17,474

247,045

91,945

60,274

319,284

22,257

8,585
25,478
25,380
22,259
21,065

84,184

2,034
931

233

Equity capital, beginning of period
Net income (loss)
Sale, conversion, acquisition or retirement of capital
Changes incident to mergers and absorptions
Cash dividends declared on common stock
Cash dividends declared on preferred stock
Stock dividends issued
Other increases (decreases)

677,604
85,282
625
1,306
-28,622
0
0
-50

109,676
17,474
965
0
-5,113
0
0
428

1,863,267
247,045
5,292
9,478
-105,023
0
0
-1,353

645,818
91,945
7,315
0
-25,419
-30
0
2,872

372,916
60,274
0
0
-24,375
0
0
47

2,702,329
319,284
2,988
-1,405
-134,940
-59
0
7,772

202,193
22,257
0
0
-10,957
0
0
-2,812

736,145

123,430

2,018,706

722,501

408,862

2,895,969

210,681

62,758
8,266
67
20,910
-26,194

9,138
339
0
1,644
-1,798

137,460
17,288
423
48,575
-52,706

42,395
10,108
0
31,968
-34,464

28,562
2,859
0
9,263
-8,747

248,548
16,408
99
145,464
-148,393

15,099
1,537
0
8,316
-9,080

65,807

9,323

151,040

50,007

31,937

262,126

15,872

Ratios:
Net income before dividends to equity capital (percent). . . .

11.58

14.16

12.24

12.73

14.74

11.03

10.56

Total operating expense to total operating income (percent)

86.86

82.11

83.70

84.73

83.74

88.69

88.02

Equity capital, end of period
Reserve for possible loan losses, beginning of period
Recoveries credited to reserve
Changes incident to mergers and absorptions
Provision for possible loan losses
Losses charged to reserve
Reserve for possible loan losses, end of period . .

See footnotes at end of table.

CD




Table B-24—Continued

CO

Total income and expenses of foreign and domestic offices and subsidiaries of national
banks *, United States and other areas, year ended December 31, 1977
(Dollar amounts in thousands)

South Carolina South Dakota
Number of banks .
Operating income:
Interest and fees on loans
Interest on balances with banks
Income on Federal funds sold and securities purchased under agreements to
resell in domestic offices
U.S. Treasury securities
Obligations of other U.S. government agencies and corporations
Obligations of states and political subdivisions
Other bonds, notes and debentures
Dividends on stock
Income from direct lease financing
Income from fiduciary activities
Service charges on deposit accounts in domestic offices
Other service charges, commissions and fees
Other income
Total operating income
Operating expenses:
Salaries and employee benefits
Interest on time certificates of deposit of $100,000 or more, issued by domestic
offices
Interest on deposits in foreign offices
Interest on other deposits
Expense of Federal funds purchased and securities sold under agreements to
repurchase in domestic offices
Interest on borrowed money
Interest on subordinated notes and debentures
Occupancy expense of bank premises, net
Furniture and equipment expense
Provision for possible loan losses (or actual net loan losses)
Other expenses
Total operating expenses .
Income before income taxes and securities gains or losses.
Applicable income taxes (domestic and foreign)
Income before securities gains or losses
Securities gains (losses), gross
Applicable income taxes (domestic and foreign).
Securities gains (losses), net
Income before extraordinary items .
Extraordinary items, net of tax effect

Net income




Tennessee

Utah

Texas

Vermont

Virginia

19

32

73

604

12

14

103

$148,802
445

$127,089
411

$419,533
9,478

$2,077,682
227,260

$140,695
936

$28,019
42

$581,549
8,864

9,081
13,715
6,059
18,230
23
218
545
5,432
12,406
7,666
4,003

1,964
9,991
4,664
14,564
1,009
178
244
980
3,616
5,437
1,294

27,233
58,672
20,466
39,358
1,385
849
3,379
14,556
21,481
29,209
13,368

162,807
289,176
94,456
277,244
10,759
3,169
7,293
79,235
74,141
71,219
45,504

4,024
11,149
4,080
8,214
151
191
2,037
3,218
5,798
6,596
1,909

940
2,286
626
2,767
285
31
19
291
1,020
569
463

18,941
58,094
21,305
68,709
1,075
966
542
18,025
15,140
23,272
11,380

226,625

171,441

658,967

3,419,945

188,998

37,358

827,862

66,514

27,100

130,553

520,948

32,469

8,012

160,144

4,933
12
51,112

7,216
0
76,854

59,079
3,327
192,440

418,008
282,503
728,250

20,814
0
50,680

479
0
16,836

45,779
669
279,285

10,216
633
601
9,267
9,692
7,901
33,973

1,149
329
1,712
4,451
3,316
2,171
16,381

34,089
602
1,993
23,542
24,188
34,530
86,051

249,560
13,596
13,884
77,665
72,340
95,320
377,293

8,061
327
2,111
5,930
6,584
7,244
22,196

78
25
281
1,338
977
710
4,557

25,032
1,049
3,845
29,845
22,624
25,234
143,008

194,854

140,679

590,394

2,849,367

156,416

33,293

736,514

31,771
5,568
26,203

30,762
8,004
22,758

68,573
12,443
56,130

570,578
126,370
444,208

32,582
11,682
20,900

4,065
384
3,681

91,348
6,791
84,557

222
83

441
222

2,132
988

5,498
1,611

296
141

42
3

205
30

139
26,342
129

219
22,977
151

1,144
57,274
1,164

3,887
448,095
2,474

155
21,055
1

39
3,720
0

175
84,732
-103

26,471

23,128

58,438

450,569

21,056

3,720

84,629

614
-7,580
0
0
-52

30,273
3,720
153
0
-1,568
0
0
-6

703,909
84,629
1,249
14,934
-35,085
0
0
867

3,328,745

137,511

32,572

770,503

52,044
12,176
0
34,530
-42,402

234,673
34,144
0
95,320
-103,214

.10,074

969
0
7,244
-4,890

2,529
230
0

56,436
7,312
1,535
25,234

13,630

56,348

260,923

11.24

14.95

9.70

85.98

82.06

89.59

Equity capital, beginning of period
Net income (loss)
Sale, conversion, acquisition or retirement of capital
Changes incident to mergers and absorptions
Cash dividends declared on common stock
Cash dividends declared on preferred stock
Stock dividends issued
Other increases (decreases)

218,536

563,123
58,438
1,261
120

2,997,043
450,569
23,803

-9,356
0
0
-89

138,277
23,128
0
62
-7,338
0
0
625

-19,415
0
0
-916

1,124
-154,678
0
0
10,884

Equity capital, end of period

235,562

154,754

602,611

Reserve for possible loan losses, beginning of period
Recoveries credited to reserve
Changes incident to mergers and absorptions
Provision for possible loan losses
Losses charged to reserve

15,841
2,278
0
7,901
-7,860

12,990
2,116
0
2,171
-3,647

Reserve for possible loan losses, end of period .

18,160

Ratios:
Net income before dividends to equity capital (percent). . . .
Total operating expense to total operating income (percent)
See footnotes at end of table.

CD
CO




26,471
0
0

123,473
21,056
0

710
-821

-27,495

13,397

2,648

63,022

13.54

15.31

11.42

10.98

83.32

82.76

89.12

88.97

Table B-24—Continued

CO
p

Total income and expenses of foreign and domestic offices and subsidiaries of national
banks *, United States and other areas, year ended December 31, 1977
(Dollar amounts in thousands)
Other areas

Number of banks
Operating income:
Interest and fees on loans
Interest on balances with banks
Income on Federal funds sold and securities purchased under agreements tc
resell in domestic offices
U.S. Treasury securities
Obligations of other U.S. government agencies and corporations
Obligations of states and political subdivisions
Other bonds, notes and debentures
Dividends on stock
Income from direct lease financing
Income from fiduciary activities
Service charges on deposit accounts in domestic offices
Other service charges, commissions and fees
Other income
Total operating income
Operating expenses:
Salaries and employee benefits
Interest on time certificates of deposit of $100,000 or more, issued by domestic
offices
Interest on deposits in foreign offices
Interest on other deposits
Expense of Federal funds purchased and securities sold under agreements to
repurchase in domestic offices
Interest on borrowed money
Interest on subordinated notes and debentures
Occupancy expense of bank premises, net
Furniture and equipment expense
Provision for possible loan losses (or actual net loan losses)
Other expenses
Total operating expenses
Income before income taxes and securities gains or losses.
Applicable income taxes (domestic and foreign)
Income before securities gains or losses
Securities gains (losses), gross
Applicable income taxes (domestic and foreign).
Securities gains (losses), net
Income before extraordinary items .
Extraordinary items, net of tax effect
Net income




West Virginia

Wi^cnn^in

District of

Puerto Rico

Washington

C^DII lmhtizi
non-national

Wyoming

21

106

128

46

1

$693,954
20,901

$183,788
1,447

$408,675
27,420

$86,888

$1,248
1,343

$1,394
0

44,619
32,769
8,955
48,234
1,125
701
25,180
20,131
38,709
29,059
16,301

17,857
31,862
22,774
35,072
1,068
359
1,283
4,572
3,108
5,390
2,826

21,779
52,106
17,859
38,597
4,412
731
4,584
12,860
8,662
22,021
22,971

2,813
8,391
4,517
10,592

1,061
3,664
2,056
1,700

367
105
0
423
0
0
0
0
27
21
327

167
870
547
331
163
0
0
0
182
49
7

980,638

311,406

642,677

122,523

3,861

3,710

230,866

49,798

107,380

21,626

491

922

60,271
43,023
242,888

17,943
0
122,114

39,481
25,377
216,176

13,116

1,617
0
788

466
0
1,034

63,020
5,412
8,437
37,691
27,166
22,487
113,937

15,155
1,292
553
8,052
8,290
6,509
34,304

42,769
2,042
3,755
19,019
17,738
10,673
82,530

3,285
2,842
4,271
13,757

0
0
45
157
139
322
563

33
0
10
90
46
116
698

855,198

264,010

566,940

100,808

4,122

3,415

125,440
31,201
94,239

47,396
4,130
43,266

75,737
18,235
57,502

21,715
4,858
16,857

-261
0
-261

295
0
295

-591
-331

1,566
589

2,102
955

1,015

0
0

-4
0

-260
93,979
235

977
44,243
-409

1,147
58,649
-94

17,438

-85

,0
-261
0

-4
291
0

94,214

43,834

58,555

17,353

-261

291

193

239
105
304

0
38,675
1,864

830
542

434
581

Equity capital, beginning of period
Net income (loss)
Sale, conversion, acquisition or retirement of capital
Changes incident to mergers and absorptions
Cash dividends declared on common stock
Cash dividends declared on preferred stock
Stock dividends issued
Other increases (decreases)

628,294
94,214
1,807
-6,292
-25,127
-361
0
-318

343,442
43,834
4,620
0
-11,228
0
0
5

503,186
58,555
12,716
13,155
-22,270
0
0
-505

103,272
17,353
967
0
-4,397
0
0
2,538

2,007
-261
2,490
0
0
0
0
0

2,816
291
0
0
-80
0
0
0

Equity capital, end of period

692,217

380,673

564,837

119,733

4,236

3,027

71,840
9,271
39
22,487
-20,618

20,895
2,038
0
6,509
-6,746

41,815
3,385
5,222
10,673
-10,931

8,032
1,225
0
4,271
-4,901

730
2,238
0
322
-2,790

166
34
0
116
-79

83,019

22,696

50,164

8,627

500

237

13.61

11.51

10.37

14.49

-6.16

9.61

87.21

84.78

88.22

82.28

106.76

92.05

Reserve for possible loan losses, beginning of period
Recoveries credited to reserve
Changes incident to mergers and absorptions
Provision for possible loan losses
Losses charged to reserve
Reserve for possible loan losses, end of period . . .
Ratios:
Net income before dividends to equity capital (percent)
Total operating expense to total operating income (percent)

* Includes all banks operating as national banks at year-end, with full year data for state-chartered banks that converted to national banks during the year.
t Non-national banks in the District of Columbia are supervised by the Comptroller of the Currency.

co




Table B-25
Principal domestic assets, liabilities and capital accounts of national banks, by asset size, year-end 1977

CO
CD

(Dollars in thousands)
Banks with assets of—
All national
banks
Number of banks
Assets

Cash and due from banks
U.S. Treasury securities
Obligations of other U.S. government agencies and corporations
Obligations of states and political subdivisions
Other bonds, notes and debentures
Federal Reserve stock and corporate stock
Trading account securities
Federal funds sold and securities purchased under agreements to resell
Loans, total (excluding unearned income)
Less: Reserve for possible loan losses
Loans, net
Direct lease financing
Bank premises, furniture and fixtures and other assets representing bank premises
Real estate owned other than bank premises
Investments in unconsolidated subsidiaries and associated companies
Customers' liabilities to this bank on acceptances outstanding
Other assets
Total assets
Liabilities

Demand deposits of individuals, partnerships and corporations
Time and savings deposits of individuals, partnerships and corporations
:
Deposits of U.S. government
Deposits of states and political subdivisions
Deposits of foreign governments and official institutions
Deposits of commercial banks
Certified and officers' checks
Total deposits
Total demand deposits
Total time and savings deposits
Federal funds purchased and securities sold under agreements to
repurchase
Liabilities for borrowed money
Mortgage indebtedness
Acceptances executed by or for account of this bank and outstanding
Other liabilities
Total liabilities
Subordinated notes and debentures
Equity Capital

Preferred stock
Common stock
Surplus
Undivided profits
Reserve for contingencies and other capital reserves
Total equity capital



Less than
$5 million

$5 to $10
million

$10 to $25
million

$25 to $100
million

$100 to $300 $300 to $1,000 $1,000 million
million
million
and more

4,655

155

461

1,441

1,885

446

172

95

$92,071,598
49,922,441
17,822,093
62,791,959
2,929,095
1,010,144
3,813,999

$70,686
93,846
35,876
28,425
3,455
1,601
00

$393,829
469,860
233,131
249,032
13,261
5,995
00

$2,599,883
2,773,314
1,415,964
2,724,350
133,446
31,289
00

$9,827,624
8,897,822
4,300,624
12,047,362
493,821
115,962
9,936

$8,783,631
6,837,431
3,012,31
9,523,874
484,305
92,868
47,611

$13,494,194
7,940,058
2,744,427
10,014,432
681,122
118,777
162,430

$56,901,751
22,910,110
6,079,756
28,204,484
1,119,685
643,652
3,594,022

32,124,054
344,522,088
3,895,860
340,626,228

53,675
270,454
1,579
268,875

235,347
1,792,099
14,049
1,778,050

1,260,847
12,807,432
111,985
12,695,447

3,324,321
48,479,550
450,191
48,029,359

2,825,351
37,733,910
388,890
37,345,020

5,799,385
48,040,891
517,831
47,523,060

18,625,128
195,397,752
2,411,335
192,986,417

4,406,264

854

1,449

22,216

132,824

156,197

493,923

3,598,801

10,797,941
1,821,489

15,428
752

78,323
2,517

426,953
21,921

1,683,186
108,072

1,354,703
113,104

1,773,826
251,050

5,465,522
1,324,073

2,249,034
6,796,548
22,261,054
651,443,941

00
50
3,593
577,116

00
358
25,322
3,486,474

626
680
197,485
24,304,421

7,308
20,733
1,065,468
90,064,422

6,477
19,102
872,464
71,474,453

7,817
93,753
1,436,487
92,534,741

2,226,806
6,661,872
18,660,235
369,002,314

164,473,198

186,768

1,018,640

6,736,512

23,916,742

18,649,051

25,419,616

88,545,869

266,071,033
4,820,633
41,964,341
5,587,928
30,612,999
6,713,892

240,350
3,033
54,307
00
2,394
5,141

1,696,331
40,449
304,882
05
11,019
34,569

12,634,801
255,475
2,053,498
203
73,221
226,168

47,404,390
741,399
7,449,558
583
530,953
821,092

35,268,328
471,366
5,881,796
5,910
1,703,119
644,809

37,317,662
805,238
7,991,656
49,524
4,559,982
898,222

131,509,171
2,503,673
18,228,644
5,531,703
23,732,311
4,083,891

520,244,024
211,650,059
308,593,965

491,993
215,302
276,691

3,105,895
1,196,602
1,909,293

21,979,878
7,936,888
14,042,990

80,864,717
27,966,190
52,898,527

62,624,379
22,777,306
39,847,073

77,041,900
32,963,365
44,078,535

274,135,262
118,594,406
155,540,856

59,336,268
3,882,171
473,816

850
101
36

15,303
1,422
553

116,773
30,458
4,144

1,144,688

2,599,112
148,629
42,979

7,269,826
440,132
83,122

48,189,716
3,140,913
308,931

6,848,094
12,625,958
603,410,331

50
2,839
495,869

358
16,369
3,139,900

680
168,818
22,300,751

20,781
897,788
83,082,541

19,120
758,658
66,192,877

93,961
1,117,401
86,046,342

6,713,144
9,664,085
342,152,051

3,034,830

337

2.651

37,539

269,950

325,296

453,707

1,945,350

25,246
9,551,745
16,649,723
17,733,303
1,038,763
44,998,780

00
26,079
27,269
26,033
1,529
80,910

00
93,704
104,423
134,166
11,630
343,923

1,501
419 424
575,631
888,036
81,539
1,966,131

12,289
1,418,133
2,241,862
2,790,958
248,689
6,711,931

2,629
1,107,146
1,754,315
1,978,991
113,199
4,956,280
71 474 453

8,478
1,442,179
2,314,880
2,168,745
100,410
6,034,692
92.534.741

349
5,045,080
9,631,343
9,746,374
481,767
24,904,913
369.002.314

AA1 Q41

3 4ftfi 474

9 A IDA A91

Table B-26
Income and expenses of national banks, including foreign offices, by asset size, December 31, 1977
(Dollars in thousands)

Banks with assets of—
All national
banks
Number of banks
Interest and fees on loans
Interest on balances with banks
Income on federal funds sold and securities purchased under
agreements to resell in domestic offices
Interest on U.S. Treasury securities
Interest on obligations of other U.S. government agencies and corporations
Interest on obligations of states and political subdivisions of the U.S.
Interest on other bonds, notes, and debentures
Dividends on stock
Income from direct lease financing
Income from fiduciary activities
Service charges on deposit accounts in domestic offices
Other service charges, commissions and fees
Other income
Total operating income
Salaries and employee benefits
Interest on time certificates of deposit of $100,000 or more issued by
domestic offices
'
Interest on deposits in foreign offices
Interest on other deposits
Expense of federal funds purchased and securities sold under agreements to repurchase in domestic offices
Interest on borrowed money
Interest on subordinated notes and debentures
Occupancy expense of bank premises, gross
Less: rental income
Occupancy expense of bank premises, net
Furniture and equipment expense
Provision for possible loan losses (or actual net loan losses)
Other expenses
Total operating expenses
Income before income taxes and securities gains or losses
Applicable income taxes (domestic and foreign)
Income before securities gains or losses
Securities gains (losses), gross
Applicable income taxes
Securities gains (losses), net
Income before extraordinary items
Extraordinary items, net of tax effect
Net income
CD
1




Less than
$5 million

$5 to $10
million

$10 to $25
million

$25 to $100
million

$100 to $300 $300 to $1,000 $1,000 million
million
million
and more

4,655

155

461

1,441

1,885

446

172

95

35,446,288
3,243,048

22,145
380

152,413
1,088

1,112,030
7,427

4,227,957
34,177

3,232,920
28,948

4,027,875
52,125

22,670,948
3,118,903

1,532,133
3,319,382

2,455
5,880

12,122
32,091

65,202
188,000

185,100
607,787

135,569
464,014

238,544
523,947

893,141
1,497,663

1,212,580
2,929,628
578,815
61,291
537,633
1,131,299
986.925
1,566,644
1,243,253

2,504
1,415
263
47
42
17
1,116
808
455

16,115
12,445
788
248
172
2,846
9,089
7,418
2,667

101,660
132,760
10,324
1,665
2,535
14,916
56,081
33,131
17,045

313,871
579,825
38,890
6,333
14,141
47,319
185,075
115,276
60,015

216,267
451,337
38,691
5,603
15,008
106,356
116,940
117,584
64,966

190,826
475,970
52,209
6,941
50,582
180,361
153,585
212,896
111,781

371,337
1,275,876
437,650
40,454
455,153
779,484
465,039
1,079,531
986,324

53,788,919

37,527

249,502

1,742,776

6,415,766

4,994,203

6,277,642

34,071,503

9,486,853

10,415

59,249

348,326

1,181,012

961,183

1,288,204

5,638,464

4,031,501
7,123,000
11,956,920

1,196
00
12,288

7,813
00
90,508

64,494
00
682,763

337,776
00
2,515,210

336,418
1,138
1,790,706

554,676
20,624
1,732,801

2,729,128
7,101,238
5,132,644

3,116,094
603,986
202,668
2,082,507
372,213
1,710,294
1,140,820
1,985,113
5,598,346

77
50
19
1,611
69
1,542
1,108
1,399
7,204

587
171
176
10,541
558
9,983
7,343
8,971
37,918

8,009
1,795
2,724
57,777
2,641

58,278
7,825
19,337
228,573
19,677

124,932
7,992
21,934

350,175
17,184
29,904

2,574,036
568,969
128,574

324,655
67,794

55,136
43,365
51,963
226,554

208,896
153,155
173,013
786,964

211,775
35,069
176,706
132,563
128,856
623,962

256,861
197,006
214,502
859,547

1,247,575
246,405
1,001,170
606,280
1,406,409
3,056,197

46,955,595

35,298

222,719

1,485,129

5,441,466

4,306,390

5,521,484

29,943,109

6,833,324
1,767,061
5,066,263
52,456
16,000
36,456
5,102,719
36,029

2,229
565
1,664
141
18
123
1,787
-53
1,734

26,783
5,065
21,718
1,294
325
969
22,687
338

257,647
48,426
209,221
9,386
2,780
6,606
215,827
912

687,813
104,831
582,982
18,490
8,291
10,199
593,181
4,302

216,739

756,158
117,811
638,347
17,011
8,443
8,568
646,915
8.979
655,894

4,128,394
1,315,987
2,812,407
-19,773
-12,934
-6,839
2,805,568
16,773

23,025

974,300
174,376
799,924
25,907
9,077
16,830
816,754
4,778
821,532

5,138,748

597.483

2,822,341

Table B-27

CD

00

Assets and equity capital, net income, and dividends of national banks, 1967-1977
(Dollars in millions)
Capital stock (par value)

Year

1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977

Number
of
banks
4,758
4,716
4,669
4,621
4,600
4,614
4,661
4,708
4,744
4,737
4,655

Total
assets *
(domestic)

Preferred

Common

$263,375
296,594
310,263
337,070
372,539
430,768
484,887
529,233
548,170
583,349
651,444

$55
58
62
63
43
42
37
13
14
19
25

$5,312
5,694
6,166
6,457
6,785
7,458
7,904
8,336
8,809
9,106
9,552

Total

$5,367
5,752
6,228
6,520
6,828
7,500
7,941
8,349
8,823
9,125
9,577

Ratios (percent)
Total
equity
capital*
$18,495
20,268
22,134
23,714
25,624
28,223
30,935
33,572
36,688
41,325
44,999

Net income
before
dividends
$1,757
1,932
2,534
2,829
3,041
3,308
3,768
4,044
4,259
4,591
5,139

Cash
dividends
on
capital
stock
$796
897
1,068
1,278
1,390
1,310
1,449
1,671
1,821
1,821
1,994

Net income
before
dividends to
total
assets

Net income
before
dividends to
total
equity capital

Cash
dividends to
net income
before
dividends

9.50
9.53
11.45
11.93
11.87
11.72
12.18
12.05
11.61
11.11
11.42

45.30
46.43
42.15
45.17
45.71
39.60
38.46
41.32
42.76
39.66
38.80

.67
.65
.82
.84
.82
.77
.78
.76
.78
.79
.79

* Data are not exactly comparable because assets through 1975 are net of reserves on loans and securities and since then are net of valuation reserves and unearned discount of loans. Also, equity capital beginning for 1976 is reported including certain portions of the reserves on loans and securities which were not reported separately for the years 1969-1975.




Cash
dividends
to total
equity
capital
4.30
4.43
4.83
5.39
5.42
4.64
4.68
4.98
5.00
4.41
4.43

Table B-28
Loans losses and recoveries of national banks, domestic offices only, 1961-1977

Year

1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977

Total loans,
end of year, net*
$ 67,308,734
75,548,316
83,388,446
95,577,392
116,833,479
126,881,261
136,752,887
154,862,018
168,004,686
173,456,091
190,308,412
226,354,896
266,937,532
292,732,965
287,362,220
299,833,480
340,605,630

Net losses or
recoveries
$ 112,412
97,617
121,724
125,684
189,826
240,880
279,257
257,280
303,357
601,734
666,190
545,473
731,633
1,193,730
2,047,643r
1,819,748
1,380,261

Ratio of net losses
or net recoveries^
to loans
Percent
0.17
0.13
0.15
0.13
0.16
0.19
0.20
0.17
0.18
0.35
0.35
0.24
0.27
0.41
0.71 r
0.61
0.41

* Loans used in all years are net of reserves; and 1976 loans are also net of unearned discount.
t Ratios are based on end-of-year-loans.
r
Restated.
Note: For earlier data, see Annual Reports of the Comptroller of the Currency, 1947, p. 100; 1968, p. 233 and 1975, p. 161.




199

Table B-29
Assets and liabilities of domestic operations of national banks, date of last report of
condition, 1961-1977
(Dollar amounts in millions)
Assets
Year
1961
1962
1963
1964
1965
1966
1967
1968 . .
1969
1970 . . .
1971
1972
1973
1974
1975 . . .
1976
1977

Number
of
banks
4,513
4,503
4,615
4,773
4,815
4,799
4,758
4,716
4,669
4,621
4,600
4,614
4,661
4,708
4,744
4,737
4,655

Total
assets *

Cash
and due
from banks

Total
securities

$150,809
160,657
170,233
190,113
219,103
235,996
263,375
296,594
310,263
337,070
372,538
430,768
484,887
529,232
548,170
583,349
651,444

$31,078
29,684
28,635
34,066
36,880
41,690
46,634
50,953
54,728
56,040
59,201
67,401
70,724
76,557
78,050
76,078
92,072

$49,094
51,706
52,602
54,367
57,310
57,667
69,656
76,872
70,030
84,157
95,949
103,659
104,607
106,931
125,332
135,932
138,290

Liabilities
Loans,
net*

Other
assets

Total
deposits

$67,309
75,548
83,388
95,577
116,833
127,454
136,753
154,862
168,005
173,456
190,308
226,355
266,938
292,733
287,362
299,847
340,626

$3,328
3,270
5,608
6,103
8,079
9,185
10,332
13,907
17,500
23,416
27,080
33,354
42,619
53,012
57,426
71,492
80,456

$135,511
142,825
150,823
169,617
193,860
206,456
231,374
257,884
256,427
283,784
314,212
359,427
395,881
431,225
447,712
469,409
520,244

* For years 1961-1975, data are net of securities and loan reserves. Since 1975 data are net of valuation reserves and unearned discount on loans.
t Includes subordinated capital notes and debentures.




Other
liabilities^
$3,424
5,083
5,907
5,922
8,943
12,243
13,506
18,442
31,703
29,571
32,702
43,117
58,072
64,435
63,769
72,615
86,201

Total
equity
capital
$11,875
12,750
13,503
14,573
16,300
17,298
18,495
20,268
22,134
23,714
25,623
28,223
30,935
33,572
36,688
41,325
44,999

Table B-30
Consolidated assets and liabilities of national banks with foreign operations, December 31, 1977
(Dollar amounts in thousands)
Foreign and
domestic assets
and liabilities

Domestic
assets and
liabilities

Foreign assets
and liabilities
(Column 1
minus column 2)

Assets

$114,572,943

$56,136,564

60,823,160

56,783,058

$58,436,379
4,040,102

22,391,871
6,004,870
27,505,128
4,921,291

22,263,192
5,994,762
27,382,636
1,142,468

128,679
10,108
122,492
3,778,823

769,479
4,363,981

633,914
3,609,570

135,565
754,411

65,956,620

61,026,542

4,930,078

18,415,367

18,387,705

27,662

Total loans (excluding unearned income)

280,584,735
2,535,402

191,743,095
2,385,257

88,841,640
150 145

Reserve for possible loan losses

278,049,333

189,357,838

88,691,495

4,365,278

3,512,800

852,478

5,887,839
1,466,160
825,145
8,425,989
10,193,665

5,298,516
1,369,695
2,224,547
6,689,392
18,747,670

589,323
96,465
-1,399,402
1,736,597
-8,554,005

508,158,339

362,751,269

145,407,070

Deposits:
Total demand deposits, domestic
Total time and savings deposits, domestic
Total deposits in foreign offices

116,792,437
151,530,183
134,398,475

117,013,352
151,894,726
N/A

-220,915
-364,543
134,398,475

Total deposits in domestic and foreign offices

402,721,095

268,908,078

133,813,017

47,986,576
8,126,205
331,777
8,513,420
14,144,819

47,762,636
3,130,567
323,951
6,740,677
9,550,913

223,940
4,995,638
7,826
1,772,743
4,593,906

481,823,892

336,416,822

145,407,070

1,881,273

1,881,273

0

24,453,174

24,453,174

0

508,158,339

362,751,269

145,407,070

Cash and due from banks
Investment securities
U.S. Treasury securities
Obligations of other U.S. government agencies and corporations
Obligations of states and political subdivisions
Other bonds, notes, and debentures
Federal Reserve stock and corporate stock
Trading account securities
Total securities
Federal funds sold and securities purchased under agreements to resell

Loans, net of reserve
Direct lease financing
•
Bank premises, furniture and fixtures, and other assets representing bank
premises
Real estate owned other than bank premises
Investments in unconsolidated subsidiaries and associated companies
Customers' liability, to this bank on acceptances outstanding
Other a s s e t s . . . . . '
Total assets
Liabilities

Federal funds purchased and securities sold under agreements to repurchase
Liabilities for borrowed money
Mortgage indebtedness
Acceptances executed by or for account of this bank and outstanding
Other liabilities
Total liabilities
Subordinated notes and debentures
Total equity capital
Total liabilities subordinated notes and debentures and equity capital
N/A — Not applicable.




201

Table B-31
Foreign branches of national banks, by region and country, December 31, 1977
Region and country

Number

Central America . . .

48

El Salvador. . . .
Guatemala....
Honduras
Mexico
Nicaragua . . . .
Panama

2
3
3
5
4
31

South America
Argentina .
Bolivia. . . .
Brazil
Chile
Ecuador..
Guyana. . .
Paraguay .
Peru
Uruguay. .
Venezuela
West Indies — Caribbean.
Bahamas
Barbados
-.
British Virgin Islands
Cayman Islands
Dominican Republic
French West Indies
Haiti
Jamaica
Netherlands Antilles
St. Lucia
Trinidad Tobago
West Indies Federation of States.
Europe.
Austria
Belgium
Denmark
England
France
Germany
Greece
Ireland
Italy
Luxembourg. . . .
Monaco
Netherlands
Northern Ireland.
Scotland

202



88
32
4
19
1
13
1
5
3
6
4

158
60
6
2
43
19
2
4
8
4
1
6
3

127

1
6
3
33
13
18
18
4
9
5
1
6
1
3

Region and country

Number

Europe—Continued
Switzerland. . . .
Africa.

15

Egypt
Gabon
Ivory Coast.
Kenya
Liberia
Mauritius. . .
Senegal . . .
Seychelles .
Middle East.
Bahrain
Jordan
Lebanon
Oman
Qatar
Saudi Arabia
United Arab Emirates. .
Yemen Arab Republic.
Asia-and Pacific
Brunei
Fiji Islands
Hong Kong
India
Indonesia
Japan
Korea
Malaysia
Pakistan
Philippines
Republic of China
Singapore
Thailand
Vietnam
U.S. overseas areas and trust territories.
Canal Zone (Panama)
Caroline Islands
Guam
Marianas Islands
Marshall Islands
Puerto Rico
Virgin Islands
Total

24

3
3
3
2
1
2
9
1
115

2
4
27
10
5
24
6
5
4
8
4
13
2
1
54
2
1
3
1
1
23
23
629

Table B-32
Total foreign branch * assets of national banks, year-end

1953-1977

(Dollar amounts in thousands)
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965

$1,682,919
1,556,326
1,116,003
1,301,883
1,342,616
1,405,020
1,543,985
1,628,510
1,780,926
2,008,478
2,678,717
3,319,879
7,241,068

$9,364,278
11,856,316
16,021,617
28,217,139
38,877,627
50,550,727
54,720,405
83,304,441
99,810,999
111,514,147
134,790,497
161,768,609

1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977

* Includes military facilities operated abroad by national banks from 1966 through 1971.
r Revised.

Table B-33
Foreign branches of national banks,

End of year

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

National bank
Number of branches
branches as a
operated by
percentage of total
foreign branches
national banks
of U.S. banks
75 0
93
102
75 6
111
76 6
124
77.5
138
76.7
196
93.5
230
94.3
278
95.5
95.0
355
428
93.0

1960-1977

End of year

National bank
Number of branches
branches as a
operated by
percentage of total
national banks
foreign branches
497
528
566
621
649
675
635
629

1970
1971
1972
1973
1974
1975r
1976
1977

92.7
91.5
90.2
89.5
89.4
88.6
87.2
86.2

r Revised.

Table B-34
Foreign branch assets and liabilities of national banks, December 31, 1977

(Dollar amounts in thousands)
ASSETS
Cash and cash items in process of collection
Demand balances with other banks
Time balances with other banks
Securities
Loans, discounts and overdrafts, etc
Customers' liability on acceptances outstanding . . . .
Customers' liability on deferred payment letters of
credit
Premises, Furniture and Fixtures
Accruals—interest earned, foreign exchange profits,
etc
Due from other foreign branches of this bank
Due from head office and its domestic branches . . . .
Other assets

Total assets




$560,051
4,565,686
51,635,732
2,752,981
74,710,776
2,316,736
107,608
316,112
2,281,587
17,950,940
3,687,493
882,907

$161,768,609

LIABILITIES
Demand deposits
Time deposits
Liabilities for borrowed money
Acceptances executed
Deferred payment letters of credit outstanding
Reserve for interest, taxes and other accrued expenses
Other Liabilities
Due to other foreign branches of this bank
Due to head office and its domestic branches
Total liabilities

$8,806,441
111,358,052
3,070,678
2,342,882
107,479
2,230,838
825,020
18:885,506
14,141,713
$161,768,609

=
MEMORANDA
Letters of credit outstanding
$2,885,186
Future contracts to buy foreign exchange and bullion
$69,064,399
Future contracts to sell foreign exchange and bullion
$66,155,653

203

Table B-35
Trust assets* and income of national banks, by states, calendar 1977
(Dollar amounts in millions)
Other
trust
accountst

Employee
benefit
accounts^

Number
of banks

Total
trust
accounts

Trust
department
income
(Dollar
amounts in
thousands)

Total
trust and
agency
accounts

Agency
accounts^

1,990

$103,357

$110,517

$213,876

$68,076

$281,954

$1,130,328

44
4
2
43
11
42
9
2
5

961
50
480
149
15,960
1,125
722
0
900

1,625
58
1,189
394
10,755
1,580
1,736
0
1,600

2,586
108
1,670
543
26,715
2,705
2,458
0
2,500

466
172
258
120
4,828
491
1,024
0
1,831

3,052
280
1,927
664
31,543
3,196
3,482
0
4,331

13,627
1,301
10,608
3,849
124,636
19,408
14,674
0
15,256

101
32
0
4
205
100
66
60
57
26
15

612
1,344
0
215
10,298
1,218
271
265
107
509
71

5,206
1,505
0
228
7,860
3,044
856
890
550
581
272

5,818
2,848
0
444
18,157
4,262
1 127
1 155
657
1,090
343

886
2,226
0
39
7,225
2,314
689
500
203
276
179

6,704
5,074
0
483
25,382
6,576
1,816
1,655
860
1,367
522

43,448
20,856
0
1,807
107,252
23,307
7,407
6,685
4,202
6,610
2,928

Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire

14
60
49
29
22
53
17
37
4
31

316
4,652
11,657
2,411
136
1,778
13
509
54
35

746
3,993
3,638
2,335
346
3,509
65
881
429
314

1,062
8,646
15,295
4,746
483
5,287
79
1,389
483
349

161
1,783
2,917
974
27
2,519
9
944
72
171

1,223
10,430
18,212
5,721
509
7,806
88
2,333
555
519

6,140
56,068
40,169
26,879
2,918
25,695
888
9,305
2,626
2,542

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

66
20
68
16
15
68
50
2
112
4

769
75
18 788
2 991
107
3,870
915
584
9,005
439

2,237
369
10 537
2 228
213
6,567
1,409
880
11,051
1,316

3,007
444
29,325
5,218
319
10,438
2,324
1.464
20,055
1,756

1,319
56
12,502
1,131
96
2,572
997
324
9,159
442

4,327
500
41,827
6,349
415
13,010
3,321
1,788
29,214
2,197

22,326
2,716
143,956
25,478
2,210
47,730
11,557
12,041
89,384
11,856

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

9
12
38
180
3
7
55
10
45
46
20

258
37
656
5 831
191
2
590
755
119
540
16

599
89
1,777
7,681
371
40
1,880
2,108
812
2,022
144

858
127
2,433
13,513
562
42
2,470
2,863
931
2,563
160

199
155
563
3,092
68
6
968
625
108
356
35

1,057
281
2,996
16,605
630
48
3,438
3,488
1,040
2,919
194

5,432
980
14,554
79,132
3,218
291
18,023
20,131
4,572
12,589
1,061

0
0

0
0

0
0

0
0

0
0

0
0

0
0

All national banks
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia //
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine

.

Puerto Rico
Virgin Islands

...

* As of December 31, 1977.
t Employee benefit accounts include all accounts for which 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, for 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 for which
the bank acts as registrar of stock and bonds, assignee, receiver, safekeeping agent, custodian, escrow agent or similar capacities.
§ Includes both managing agency and advisory agency accounts.
// 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.

204






APPENDIX C

Addresses and Selected
Congressional Testimony

Addresses and Selected Congressional Testimony
Date and Topic
Feb. 2, 1977, Statement of Robert Bloom, Acting Comptroller of the Currency, before the Financial Institutions Subcommittee of the Senate Committee on Banking, Finance and Urban Affairs, and the Commerce, Consumer and Monetary Affairs Subcommittee of the House Committee on Government Operations, Washington, D.C

Page

207

Feb. 9, 1977, Statement of Thomas W. Taylor, Associate Deputy Comptroller of the Currency for Consumer
Affairs, before the Consumer Affairs Subcommittee of the House Committee on Banking, Finance and
Urban Affairs, Washington, D.C

213

Feb. 24, 1977, Statement of Robert Bloom, Acting Comptroller of the Currency, before the Family Farms
Rural Development and Special Studies Subcommittee of the House Committee on Agriculture, Washington, D.C

216

Mar. 3, 1977, Statement of Robert Bloom, Acting Comptroller of the Currency, before the Commerce,
Consumer and Monetary Affairs Subcommittee of the House Committee on Government Operations,
Washington, D.C

218

Mar. 11, 1977, Statement of Robert Bloom, Acting Comptroller of the Currency, before the Senate Committee on Banking, Housing and Urban Affairs, Washington, D.C

219

May 2, 1977, Remarks of Robert R. Bench, Associate Deputy Comptroller of the Currency for International
Banking, before the 55th Annual Meeting of the Bankers' Association for Foreign Trade, Cerromar
Beach, Puerto Rico

234

May 24, 1977, Statement of Robert Bloom, Acting Comptroller of the Currency, before the Senate Committee on Banking, Housing and Urban Affairs, Washington, D.C

237

July 11,1977, Statement of Thomas W. Taylor, Associate Deputy Comptroller of the Currency for Consumer
Affairs, before the Consumer Affairs Subcommittee of the Senate Committee on Banking, Housing and
Urban Affairs, Washington, D.C

240

Sept. 16, 1977, Statement of John G. Heimann, Comptroller of the Currency, before the Senate Committee
on Banking, Housing and Urban Affairs, Washington, D.C

244

Sept. 28, 1977, Statement of Thomas W. Taylor, Associate Deputy Comptroller of the Currency for Consumer Affairs, before the Consumer Affairs Subcommittee of the House Committee on Banking, Finance and Urban Affairs, Washington, D.C

263

206




Statement of Robert Bloom, Acting Comptroller of the Currency, before the Financial
Institutions Subcommittee of the Senate Committee on Banking, Finance and Urban
Affairs and the Commerce, Consumer and Monetary Affairs Subcommittee of the
House Committee on Government Operations, Washington, D.C., February 2, 1977
We appreciate the opportunity to discuss the Government Accounting Office (GAO) report entitled, "Study
of Federal Supervision of our Nation's Banks."
The report, in a straightforward and objective manner, describes what bank examiners do and the common problems which bank supervisory agencies face.
The report shows that the agencies have been relatively successful in encouraging rehabilitation of bank
weaknesses. Finally, the report makes a number of
recommendations to the agencies designed to
strengthen their supervisory techniques.
Our specific comments on the report, which are attached as an appendix to this statement, show that the
Office of the Comptroller of the Currency has little difficulty with most of the recommendations. Indeed, the
report recommends many of our new examination procedures and agency procedures for the consideration
of the other agencies. As the members of this Committee know, almost 3 years ago, the Comptroller
engaged the management consulting division of
Haskins & Sells to conduct a major study of the
Comptroller's Office. Many of the recommendations resulting from this study including, particularly, a wholesale revision of examination procedures, have been
implemented by the Office over the last 2 years. Examinations using the new procedures have been conducted in all 14 national bank regions. The recommendations of the report largely confirm that the actions
embarked upon by the Office of the Comptroller of the
Currency over the last 2 years have been appropriate.
We do not intend to rest on those procedural
achievements. All of the procedures now in place, as
well as the implementation of those procedures, are
being regularly reviewed by a special division of the
Comptroller's Office under the direction of a Deputy
Comptroller. That official acts as an internal inspector
general to insure that our techniques keep pace with
the industry and are properly executed.
Apart from the new techniques and procedures already in place which the GAO has now, at least qualifiedly endorsed, we are favorably impressed by and
intend to support a number of additional recommendations made by the Comptroller General. In particular,
we believe that increased interagency cooperation on
such matters as shared national credits and country
risk classifications is desirable. In addition, economies
in the conduct of international examinations may be
achieved through a sharing of facilities and, possibly,
personnel. Combination of examiner schools and curricula in a number of areas similarly seems feasible.
The GAO also recommends legislation to strengthen
the enforcement powers of the bank regulatory agen-




cies in a number of ways and to accord the
Comptroller's Office the same statutory flexibility in the
scheduling of examinations already accorded the
other agencies. We fully support that legislation. Indeed, a number of the additional statutory enforcement powers recommended by the GAO have been
requested by several Comptrollers over the past 10
years.
We do not fully concur with the GAO report in a few
areas. For example, while we agree that the powers
given under the Financial Institutions Supervisory Act
of 1966 are useful and should be employed in a timely
fashion, there are some instances where the use of
such power may be counterproductive. For that reason, the Office evaluates closely each case on its own
facts to determine whether, in the particular instance, a
formal or informal action is the most appropriate remedy. To some extent the choice of remedy has been
affected by certain inadequacies in the Act.
We also believe that the conclusions contained in
the GAO report do not fully recognize the effectiveness
of the informal enforcement efforts of the agencies. In
our judgment, improvements in informal procedures
promise far greater returns in terms of early corrective
action by bank management than overreliance on formal procedures such as the issuance of cease and
desist orders. Among the significant changes we have
recently made in our informal procedures is the addition of a requirement that Comptroller personnel meet
with the board of directors of each national bank at
least once each calendar year and, in certain cases,
following each examination. That increased use of
meetings with directors, coupled with our new examination procedures and early warning system, will, we
believe, make our first-line informal supervisory techniques more effective.
We also have reservations about the GAO's emphasis on agency uniformity as a desired goal. The report
does not make the crucial distinction between uniformity in the development of policy and technique and
uniformity in the execution of proven ideas. We believe
that while uniformity in the execution of agreed policies
may be desirable, it is not equally desirable in the development of new approaches. Complete uniformity
could result in the worst of both worlds: restriction on
innovation without the theoretical economies of a single staff.
The basic interest of the government in bank supervision has been correctly stated by the GAO:
Government involvement in the American banking
industry has consisted of recurring attempts to
207

balance the need for healthy competition among
banks with the need for a sound banking system.
The report understandably concentrates on the
safety and soundness side of the equation. We must
not lose sight of the equally important need for a

healthy, competitive environment, free of overregulation.
The GAO report should not be misunderstood as a
call for overregulaton. Our goal continues to be a
sound but responsive and competitive banking industry.

Appendix to February 2 Statement by Robert Bloom
Bank Examination and the Office of the
Comptroller of the Currency
The Office of the Comptroller of the Currency (OCC)
commends the General Accounting Office (GAO) for
the objective and workmanlike quality of GAO's report
and for the positive attitude shown by the GAO staff
which prepared the report.
The GAO report correctly states that one important
goal of bank regulation is maintaining the soundness
of the banking system; achievement of that goal requires minimizing the number of bank failures. We
agree with that goal, and suggest that the banking
agencies' record over the last 40 years has been a
good one. For example, 1974 witnessed a severe economic recession and the two largest bank failures in
the history of the United States, yet no depositor in
those banks lost money, and confidence in the banking system was maintained. The average annual bank
failure rate since 1937 has been 0.08 percent, a remarkably low failure rate for any human endeavor.
But it is the other goal of supervision which is not
stressed in the GAO report. The ultimate measure of
how well a bank supervisory agency operates is how
well the banking system operates. The OCC believes
that one of its major functions is to preserve a competitive, responsive and innovative system. Bank
supervision's role is to ensure that the banking system
is able to provide the widest possible array of banking
services to both the depositor and the borrower.
Thus, the bank supervisory agency has two contradictory goals: monitoring soundness, and sponsoring
competitive, innovative response. It is that dual role
which presents the basic paradox for the bank supervisory agency. An intensely competitive industry can
never be completely safe.
Striking the balance between those two goals is the
basic problem of the bank supervisory agency. According to a former Comptroller of the Currency:
One regulatory approach is to identify a problem
in one area and remedy across the board, taking
no notice of the different characteristics, or idiosyncracies of the components of the whole. That
approach is acceptable if the object is to produce
a "fail-safe" banking system. Believe me, I can
screw down the National Banking System with
enough regulations to prevent bank failure. But,
under that regime, the banking industry would be
financing the capital needs of the country and its
citizens at about 60 percent of capacity, and that
is not in the public interest. Equally important, it is
contrary to the economic principles of our nation.
208




Instead, I would advocate that we free up the system to manage itself, loosen the bonds and take
the quite limited risks that some unit will slip
through the supervisory net and founder.
A well-known critic of bank supervision, economist
George J. Benston, has addressed the question of the
costs of bank regulation, both the direct cost of running the agencies and the indirect costs of limiting
competition by the banking industry, and has suggested that the best solution is improved supervisory
techniques. Specifically he recommended:
1. A primary responsibility of the supervisory
agencies is to determine the most effective
method of examining banks;
2. Supervisory agencies should be able to use
bank reporting as a guide to self-examination
by the banks and as a preliminary examination
tool;
3. Models should be developed that predict possible problems; and
4. Banks that are likely to get into trouble should
be examined more frequently and in greater
depth.
That list, although not complete, is similar to the revisions of examination procedures proposed by the consulting firm of Haskins & Sells and implemented by the
Office of the Comptroller of the Currency. Examination
of the larger banks has moved from a detailed examination of the bank's assets to an in-depth evaluation of
the bank's management, auditing and control systems.
Instead of concentrating on the bank's loan customers,
the OCC has moved to an evaluation of the bank itself.
During 1976, the OCC began to use bank financial reports as a preliminary examination tool, identifying potential difficulties at individual banks.
The GAO reviewed those and other new procedures
being adopted by the OCC, and concluded:
As discussed in Chapter 4, we believe that the traditional examinations of the three agencies have
concentrated too much on the review of loans and
not enough on bank policies, procedures, practices, controls, and audit. The changes made by
FDIC and FRS will not substantially remedy this
defect. In our view the new procedures being implemented by the OCC offer the best opportunity
for improvement. The OCC's revised commercial
examination procedures should provide the
agency with more meaningful information regarding the banks it supervises and result in more

complete and consistent examinations. More importantly, the new approach should result in early
detection of situations which could lead to deterioration in some aspect of banking operations. This
approach could help avoid bank problems after
they have occurred.
Thus, the OCC is not attempting to improve bank
supervision through arbitrary regulations which might
limit bank services to the public. Instead the OCC is
attempting to foster procedures in each bank through
which that bank can better manage itself.
The GAO report, although endorsing the new OCC
procedures, implies criticism of the OCC for not developing its new programs in conjunction with the two
other agencies. As pointed out in the OCC responses
to the GAO recommendations, the OCC has attempted
to share its new ideas with the other two agencies. The
OCC also endorses the GAO recommendation of more
formalized communication among the agencies concerning new examination techniques. The OCC takes
issue, however, with the apparent GAO assumption
that the best way to generate new ideas is through an
interagency committee (or, as some have proposed,
through a giant monolith combining the three agencies). A primary virtue of three agencies, each with
somewhat differing statutory responsibilities, is the
ability of a single agency to experiment with a new
idea or procedure. It is doubtful that the new OCC examining techniques endorsed by GAO could have
been developed otherwise. A unified approach is important and appropriate after a new idea has been
proved successful, not when it is being first developed.
In summary, the purpose of the OCC is to operate
so that economic progress and change is not inhibited
and, at the same time, to prevent unsound banking
practices. It is that fine line of promoting innovative response while supervising the banking system that
makes bank supervision so difficult. The banking system has just come through its first major economic crisis since the world wide depression of the 1930's.
There were some casualties. But, in fact, the
threatened financial crisis did not develop and the
banking system seems to be stronger today than it
was before. New procedures have been developed by
the banking system and the continuing dynamic future
of American banking is assured. For the first time we
are assured that, just as the industry has changed, the
tactics and techniques of a major bank supervisor, the
Office of the Comptroller of the Currency, have
changed in a similar, positive fashion.

Responses to Specific Recommendations
Recommendation (2-21): Accordingly, we recommend
that the Comptroller of the Currency (1) develop more
definitive criteria for evaluating charter applications
and (2) thoroughly document the decision-making process, including an identification by reviewers of each
factor as favorable or unfavorable.
OCC Response: The OCC is the only federal agency
with the responsibility for chartering banks. It charters




banks in all of the 50 states and in Puerto Rico and the
Virgin Islands. The widely differing banking environments found in the U.S. make it most impossible to
develop definitive criteria which can be universally applied both in states like Arizona, which has six national
banks, and in states like Illinois, which has over 400
national banks. The diversity of criteria therefore, is a
function primarily of the differing political, social and
economic environments in which the OCC must operate. The OCC's chartering criteria, of necessity, must
be somewhat flexible. That is only to be expected
since the OCC does not charter in one environment.
Also, under the terms of the McFadden Act, the OCC's
actions are often affected by applicable state law.
New corporate guidelines {Annual Report, 1976, pp.
274-282), the development of which began in September 1975, and which became effective on November
1, 1976, answer many of the GAO's criticisms. Written
opinions containing reasons are now sent to applicants receiving denials. As examples, we present excerpts from three recent letters denying charter applicants. One letter, in part, states:
Based upon the population and the median income per household, it would appear difficult for
many individuals in the primary service area to
qualify for a loan. Furthermore, income levels are
inadequate to provide a sufficient deposit base for
the proposed bank to become a viable institution.
In another case, we quote in part:
In view of the Supreme Court decision in Whitney
and the Federal Reserve Board's decision in InterMountain Bank Shares, it would be an exercise in
administrative futility for this Office to approve the
present charter application. . . . Should West Virginia change its statutes or should the statute be
successfully challenged, then this Office could
consider a new application in light of these
changed circumstances.
In still another case, the denial letter to the applicants stated:
The new guidelines state that a new banking office will not be approved, if its establishment
would threaten the viability of a newly chartered
independent bank. Such protection will typically
not exceed 1 year. As you are aware, the new
bank opened on September 27, 1976. It is the
opinion of this Office that this newly chartered independent state bank is entitled to the protection
set forth in the Comptroller's policy statement.
Every attempt is now made to document thoroughly
the decision-making process. Further efforts will be
made by our Office to identify each factor as favorable
or unfavorable.
Our decisions have been subject to judicial review
for many years. In the long series of court cases concerning our chartering process, the Comptroller's decision on a charter application has never been finally
overturned by a reviewing court. See annotations to 12
USC 21 etseq.
Our Department of Research and Economic Analysis has undertaken a market study of 35 national
209

banks chartered between 1969 and 1971. The economic study attempts to identify, statistically, those
factors which can be identified with the growth or lack
of growth of these new banks. The results of that
study, if positive, will be incorporated into our
decision-making process. We are hopeful that quantification of a sufficient number of pertinent factors applicable to a majority of cases will result.
Recommendation (4-7): Therefore, we recommend that
the Board of Directors of the FDIC, the Board of Governors of the FRS, and the Comptroller of the Currency
establish scheduling policies and procedures which
would avoid the setting of examination patterns.
OCC Response: Historically, the OCC has viewed surprise as an important element of an examination. However, a primary feature of our new examination approach entails the pre-examination analysis wherein
the examiner will determine the adequacy of internal
control and audit activity. The OCC feels the best deterrent for fraud is not periodic unannounced visits by
examiners but rather the existence of sound bank policies, procedures, internal control and audit activity on
a continuing basis. The element of surprise is necessary only in those cases where such factors are suspect.
Recommendation (4-8): We recommend that the Board
of Directors of the FDIC, and the Board of Governors
of the FRS, adopt flexible policies for examination frequency which would allow them to concentrate their
efforts on banks with significant problems.
We recommend that the Congress amend the National Bank Act to allow the Comptroller of the Currency to examine national banks at his/her discretion.
OCC Response: We support the recommendation of
legislation to permit the OCC discretion in scheduling
the frequency of examinations. The current method of
adapting the depth of examinations to the needs of
each bank, based on NBSS data and pre-examination
analysis, fully complies with law. However, greater
statutory discretion would enhance our effectiveness in
this regard.
Recommendation (4-29): We recommend that the
Board of Governors of the FRS, and the Comptroller of
the Currency develop and use a single approach to
the classification of loans subject to country risk.
OCC Response: The OCC has a well established procedure using a single approach to the classification of
country credits. This procedure makes use of information from many governmental and non-governmental
sources and examiners in all 14 national bank regions.
Copies of the minutes of our committee meetings
and any resulting classifications have always been
provided to members of the staff of the Board of Governors.
The process of country risk evaluation is more precisely an art than a science. Most of the evaluation
210




process is judgmental. However, the interagency
meetings held to date have been beneficial in determining basic differences in philosophies.
Recommendation (4-30): We recommend that the
Board of Governors of the FRS, and the Comptroller of
the Currency implement procedures whereby major
foreign branches and subsidiaries, including subsidiaries of Edge Act corporations, are examined periodically and whenever adequate information about
their activities is not available at the home office.
Also, we recommend that the Board of Governors of
the FRS, and the Comptroller of the Currency exchange each other's examiners to cut expenses when
conducting examinations in foreign countries.
OCC Response: a) Overseas Examination — National
banks are required by regulations K and M to provide
examiners with whatever credit and financial information the examiner deems necessary to evaluate the
condition of the bank's foreign branches and subsidiaries. Those regulations require such information be
transmitted to and maintained at the bank's head office. The OCC has, for practical purposes, defined
"head office" to include any foreign or domestic office
of the bank which is readily accessible to examiners.
For example, all international credits of one large national bank are examined from two domestic offices
and four foreign offices located in London, Caracas,
Tokyo and Manila. All of that bank's many branches
and subsidiaries located in Europe, the Middle East
and Africa are examined from duplicate records in
London.
Supplemental examinations to determine the quality
of the bank's operations are made on-site overseas
when necessary. In 1972, for the purpose of performing asset and operational examinations, the OCC established a London office permanently staffed by six
examiners. In fulfilling its overseas examination obligations, in 1976 the OCC examined 141 overseas
branches and subsidiaries of 25 banks located in 37
countries; 154 on-site examinations were performed by
215 national bank examiners.
b) Joint Examinations — The GAO recommendation
has merit. As a bare minimum the physical support of
the three agencies could be jointly provided. Further
arrangements could be made so that any of the agencies could jointly commission overseas examiners. In
this regard, the OCC is willing to seek a cooperative
solution with our sister agencies.
Under present statutes, however, such a sharing of
examiner forces may be difficult. Section 481 of Title
12 (12 USC 481) directs the Comptroller of the Currency to appoint examiners who shall examine every
national bank. That same section empowers the
Comptroller to make a thorough examination of all the
affairs of the banks under his jurisdiction including the
affairs of all affiliates of national banks "other than
member banks" in order to disclose fully the relations
between the bank and its affiliates and the "effect of
such relations upon the affairs of such bank." (Emphasis added)

Recommendation (7-25): We recommend that the
Comptroller of the Currency invite FDIC and FRS to
jointly review and evaluate its new examination approach. Further, we recommend that, in the event of a
favorable assessment of the new process, the Board
of Directors of the FDIC and the Board of Governors of
the FRS revise their examination processes to incorporate the features of OCC's new examination approach.
OCC Response: Examination Approach — On November 23, 1976 OCC staff members made a presentation
to approximately 20 FRS and FDIC staff members on
the revised examination procedures. Copies of our
draft Handbook of Examination Procedures were
furnished. Their review and evaluation on an ongoing
basis is welcomed. The Acting Comptroller has proposed to the Interagency Coordinating Committee that
a permanent staff group be set up for that purpose.
Recommendation (7-26): Additionally, we recommend
that the Board of Directors of the FDIC, the Board of
Governors of the FRS, and the Comptroller of the Currency jointly staff a group to analyze shared national
credits at state and national lead banks under federal
supervision, and that the three agencies use the uniform classification of these loans when they examine
the participating banks.
OCC Response: Shared National Credits — In 1974,
meetings were held with representatives of the OCC,
FRS and FDIC present to discuss the possibilities of
using a uniform program for the review of selected
large shared loans. Both the FRS and the FDIC found
merit in the program but they believed sufficient pitfalls
existed to delay their participation in the program.
Also, in March 1974 this Office met with representatives of the Conference of State Bank Supervisors to
discuss the proposed program. They indicated interest
and agreed to work out arrangements with various
bank supervisors.
In 1975, the Office of the Comptroller of the Currency conducted uniform reviews of shared national
credits in applicable national banks. The loan writeups generated by these reviews were made available
to both the FRS and the FDIC. In March 1975, the FRS
expressed their continued interest in the program and
hoped they could participate if the "pitfalls" could be
overcome. In November 1975, the FRS revealed they
were instituting a test review program involving state
member banks paralleling our methods and procedures. In July 1975, the FDIC again expressed interest
and a meeting was held in September 1975 with representatives of the FDIC. This Office indicated FDIC involvement would be welcomed in whatever way they
deemed appropriate.
During May 1976, the second uniform review was
conducted and again the data generated was made
available to the FRS and FDIC.
In July 1976, the Comptroller of the Currency and
the Vice Chairman of the Federal Reserve Board met
to discuss the approaches of the two agencies to
shared national credits. It was agreed that the OCC
should continue to provide FRS with the information




developed under its program and to explore at a staff
level whether uniform procedures could be developed
between the two agencies which would be acceptable
to all of the Federal Reserve Banks. It is our understanding that the New York Federal Reserve Bank is
conducting a pilot project involving shared credits
which may assist in resolving some of the anticipated
problems associated with a combining of the approaches of the two agencies.
Recommendation (7-26): We also recommend that the
Board of Directors of the FDIC, the Board of Governors
of the FRS, and the Comptroller of the Currency work
together in refining their monitoring systems and their
approach to consumer credit compliance examinations.
OCC Response: Monitoring — The OCC has met on
several occasions with officials of the other two federal
supervisory agencies to present its NBSS system.
Those orientations were given both orally and with
complete submission of all relevant documents. Further, we have offered the other supervisory agencies
computer programs and technical knowledge to implement the programs.
Consumer Credit Compliance — With reference to
consumer credit compliance examinations the draft report does not fully recognize that our new program is
already operational. Over 6 percent of our field staff is
currently allocated to the consumer area. We have
conducted three 2-week schools which trained over
140 examiners in the new procedures. A second series of three schools is scheduled for March and April
and a third series will take place in the Fall. The
schools stress examination techniques and feature
heavy reliance on case studies to give experience in
examining for compliance. The procedures are tailored
to spot problems most likely to result in harm to consumers. We make use of sophisticated advanced
financial calculators, specially programmed for banking applications, and sampling techniques designed
to increase our effectiveness.
Eleven percent of the country's 4,700 national banks
have been examined under the new procedures. Preliminary analysis of those examination reports indicates that our expanded efforts in this area are both
justified and effective.
The draft report also does not reflect the extent to
which other agencies have cooperated in developing
our new program. The Federal Reserve Board and The
Department of Housing and Urban Development
(HUD) aided in reviewing our procedures. Speakers
from the Federal Reserve Board, HUD and the Justice
Department participated in our schools. Observers
from the Federal Reserve Board, FDIC, National Credit
Union Administration and HUD attended the schools to
assess the new procedures. As a result, many of our
examination procedures and teaching materials have
been adopted by those four agencies. This experience
has reinforced our awareness of the benefits of such
cooperative efforts.
211

Recommendation (8-20): a) Formal Actions — We recommend that the Board of Directors of the FDIC, the
Board of Governors of the FRS and the Comptroller of
the Currency establish more aggressive policies for
using formal actions.
b) Written Criteria — Written criteria should be developed to identify the types and magnitudes of problems
that formal actions appropriately could correct.
OCC Response: We believe that in supervising the
vast majority of national banks, our most effective remedy continues to be the examination process and the
meetings held as part of that process between the
bank's board of directors and OCC personnel. Since
December 23, 1975, the OCC has required meetings
with the board of directors of each national bank at
least once every calendar year and, in certain cases,
following every examination. We believe that the increased use of such meetings together with our new
examination procedures and early warning system will
make our first-line, informal supervisory techniques
even more effective.
As the GAO report elsewhere notes, our informal supervisory techniques even without the improvements
noted above, have proven effective in rehabilitation of
most of the so-called problem bank situations. For example, over the period reviewed by the GAO, informal
procedures utilized by OCC were successful 84 percent of the time. Nonetheless, we agree that increased
use of formal agreements and cease and desist orders
under the Financial Institutions Supervisory Act may
accelerate correction of problems in the more recalcitrant institutions.
OCC use of such formal agreements and orders has
increased tenfold from 1970 to 1975. The OCC has originated slightly more than half of the combined total
formal agreements and cease and desist orders (179)
issued by all three agencies during the last 5 years.
The OCC, however, supervises fewer than half the
number of banks supervised by the other two agencies combined. When compared to the number of
banks supervised, the OCC over the past 5 years, has
used the formal enforcement tools of the Financial Institutions Supervisory Act about two and one half times
as often as the other two agencies.
It should also be noted that the three banking agencies jointly requested Congress in 1975 to refine and
increase the agencies' formal enforcement powers.
Congress failed to pass the necessary legislation.
The OCC has developed as part of its National Bank
Surveillance System an anomaly severity ranking system which identifies, every 3 months, the national
banks most likely to require special supervisory attention. A computerized action control system is designed
to assure that the OCC responds promptly and appropriately to those situations. The criteria built into these
systems identify more systematically and promptly
those cases in which formal enforcement action is appropriate.
Recommendation (8-47): We recommend that the
Board of Directors of the FDIC, the Board of Governors
212



of the FRS, and the Comptroller of the Currency develop uniform criteria for identifying problem banks.
OCC Response: The term "problem bank" is banking
agency jargon for many different fact patterns. To an
outsider it appears reasonable and logical to expect a
uniform definition of the term. An agency staff person,
on the other hand, recognizes the difficulty of reducing
all the variables to a single definition. At the same time,
such a staff person has little difficulty in communicating with colleagues in other banking agencies on particular bank situations.
OCC's approach is to computerize to the greatest
extent possible the many variables which characterize
a bank's condition and management. That results in a
capability to rank all banks in relation to their peers.
The final selection of banks needing special supervision can only be done subjectively by trained personnel using all the tools available and the results of our
revised examinations. The dividing line on the spectrum between "problem" and "non-problem" status is
hard to define but OCC is more than willing to consult
and cooperate with the other agencies in seeking such
dividing lines.
Recommendation (10-6): We recommend that, where
feasible, the Comptroller of the Currency, the Board of
Directors of the FDIC, and the Board of Governors of
the FRS, combine their examiner schools and standardize their curricula.
OCC Response: The OCC recognizes that a common
training effort and a combined examiners' school
would be highly desirable both in terms of expense
and coordination of examination policy. Our Office
stands ready to cooperate fully with all such efforts.
Indeed, our Office is in receipt of a letter from Chairman Barnett of the FDIC asking our cooperation and
financial support for a combined training facility to be
constructed at a Rosslyn, Va. site. This matter is receiving serious attention.
The practical difficulty is that our Office has implemented the Haskins & Sells report which has created
fundamental changes in our examination process.
Those changes are so basic to our examination process that it would be difficult to coordinate a curriculum. A combined examiners' school is viable only if the
other agencies modernize their techniques in line with
those being implemented at the OCC. It would be possible, however, to offer jointly courses in more generalized subjects such as economics and accounting.
Recommendation (10-10): We recommend that the
Board of Governors of the FRS (1) establish a full-time
training office to operate its examiner training program
and (2) carry out the revision of examiner school curricula which it has recognized as needed for some
time.
We also recommend that the Comptroller of the Currency, the Board of Directors of the FDIC, and the
Board of Governors of the FRS, increase their training
in EDP, law and accounting, as desired by their examiners.

OCC Response: As part of our acknowledged need for
specialized training, and consistent with the advice of
our consultants, the Training Division of the Personnel
Management Department has identified a multitude of
different specialized courses which selected examiners will take: Those courses include seven different
commercial examination schools, three trust examination schools, an EDP school, an international school
and a consumer examination school. That program
has now been implemented and is in full operation.
The schools are programmed for examiners at different stages of their professional development. Among
the many courses that will be offered by skilled personnel, both from within the OCC and, where necessary, from outside, are ones in EDP, law and accounting. Among the other areas that will be covered in that
curriculum development will be specialized work in
economics, bank marketing, finance, auditing and
similar topics.
Recommendation

(11-8): We recommend that the

Board of Directors of the FDIC, the Board of Governors
of the FRS, and the Comptroller of the Currency either

(1) jointly establish a more effective mechanism for the
three agencies to combine their forces in undertaking
significant new initiatives to improve the bank supervisory process or in attacking and resolving problems
common to the three agencies, or (2) the Congress
enact legislation to establish a mechanism for more effective coordination.
OCC Response: The OCC has always stood for the
strongest possible working relationships between federal supervisory authorities. At the December 1976
meeting of the Interagency Coordinating Committee,
Mr. Robert Bloom, Acting Comptroller of the Currency,
asked that the committee take up at its next meeting
the subject of strengthening coordination of examination procedures. It will be proposed that a permanent
staff group be set up for this purpose. We anticipate
modification and refinement of our newly implemented
examination approach on an ongoing basis. Review
and evaluation of such changes as they affect problems common to the three agencies would be most
useful.

Statement of Thomas W. Taylor, Associate Deputy Comptroller of the Currency for
Consumer Affairs, before the Consumer Affairs Subcommittee of the House
Committee on Banking, Finance and Urban Affairs, Washington, D.C., February 9,
1977
I welcome this opportunity to appear before the Committee to discuss the continuing commitment of the
Office of the Comptroller of the Currency to the protection of consumers' interests in their dealings with national banks. Because of the intimate involvement of
banks with our daily affairs, this industry is a unique
focal point of many consumer interests.
Banks serve their communities and their customers
in many important ways. By financing new and established businesses, they help provide gainful employment for a substantial part of their community's
work force. By investing in municipal securities, banks
help fund education, sanitation, and other essential
community services and programs. And, through the
purchase of tax anticipation notes, they help provide
funds necessary for communities to continue the regular, day-to-day functioning of their governments and local economies.
In more personal terms, banks, through savings
plans and loan services, make it possible for individuals to improve their standards of living. Banks also enable their customers to organize their daily financial affairs through the use of checking, bill-paying and trust
services.
For our part, the Comptroller's Office has pursued
policies intended to insure that the development of the
National Banking System will be in the interest of the
banking public. In fostering aggressive competition
among banks and other financial institutions, we have




encouraged the provision of an ever-growing number
of financial services.
Recognizing that particular attention to individual
consumers would help reinforce public confidence in
the banking system and promote safety and soundness, the Comptroller commenced a study in the summer of 1973 to determine what this Office should do to
carry out our legal responsibilities in protecting consumer interests. As a result of that internal review, a
special division for consumer affairs was established
in September 1974, before the Magnuson-Moss Warranty — Federal Trade Commission Improvement Act
of 1974 mandated that each bank regulatory agency
have such a division. Since its creation, our Consumer
Affairs Division has grown rapidly in staff and budget,
and has become a central point for consumer assistance and consumer protection law enforcement.
We believe that compliance with consumer protection statutes is a prerequisite to successful retail banking, because a bank acts in its own best interest when
it serves the public fairly and within the scope of the
law. Consumer laws are many and complex and cover
a wide variety of banking services. They include Truthin-Lending, Equal Credit Opportunity, Fair Credit Reporting, Fair Credit Billing, Fair Housing, Home Mortgage Disclosure, Real Estate Settlement Procedures,
Consumer Leasing, advertising, usury and applicable
state laws. In its role as supervisor of national banks,
the Comptroller's Office attempts to educate bankers

213

on the requirements of these laws and to detect and
correct noncompliance. Over the past 3 years we have
intensified our activities in this area.
As the foremost example, the Comptroller has assigned a specially trained corps of national bank examiners to conduct consumer compliance investigations of every national bank during the coming year.
Over 6 percent of our field staff currently is allocated to
the consumer area. Support for that staff is provided
by Consumer Specialists in each region. We have conducted three 2-week schools which trained over 140
examiners in the new procedures. A second series of
three schools is scheduled for March and April, and a
third series will take place in the Fall.
The schools stress examination techniques and feature heavy reliance on case studies to give experience
in examining for compliance. The procedures are
tailored to spot problems most likely to result in harm
to consumers. We make use of sophisticated financial
calculators, specially programmed for consumer transactions, and sampling techniques designed to increase our effectiveness. Particular emphasis is
placed on evaluating policies and practices to detect
unlawful discrimination.
Statistical sampling of a bank's loans is taken as
part of a review for conformity with various statutory
and regulatory requirements. Bank lending policies are
examined as are policies implementing consumer protection laws. Extensive interviews with lending officers
are conducted, as well, to assist us in assuring that a
bank adheres to its policy standards.
Where violations are detected during the examination, we will use the full authority of our Office to see
that they are corrected. In most cases, when made
aware of unlawful overcharges, banks volunteer to
reimburse their customers. For the few recalcitrant institutions, however, we may find it necessary to rely
upon our additional cease-and-desist powers under
the Financial Institutions Supervisory Act.
As of this date, approximately 12 percent of the
country's 4,700 national banks have been examined
under the new procedures. Preliminary analysis of
those examination reports indicates that our expanded
efforts in the consumer area are both justified and effective. Significant evidence of noncompliance with the
consumer protection laws has been detected. In some
areas, that noncompliance has resulted in overcharges to consumers, sums which now will be reimbursed.
As the new laws take hold and consumer consciousness rises, we find that consumer complaints account
for an increasingly large part of the work load of the
Consumer Affairs Division. In 1976, the first year for
which we kept a tally, the number of complaints
handled by all of our offices around the country totaled
6,234. In our Washington Office alone, the volume increased 46 percent over the previous year.
Complaints against national banks cover numerous
consumer banking activities. Among the complaints
received are ones dealing with check cashing privileges, interest charges, deposits not credited, rebates
and individual credit decisions. Notably, credit card
difficulties account for a substantial part of all com-

214



plaints. Most of those complaints involve allegations of
billing errors or denial of applications on the grounds
of sex or marital status or failure of the applicant to
meet bank credit standards.
We have designed a computer program to catalog
consumer complaints. When such a complaint is received, a letter of inquiry is sent to the bank against
which the complaint was made. If necessary, an examiner visits the bank to complete the investigation. Depending on what we discover, either the bank is asked
to correct its error or the complainant is informed that
no basis for remedial action has been found. Sometimes facts essential to resolution of a controversy are
disputed and may turn on such issues as credibility of
witnesses. Those controversies can be resolved, consistent with due process, only in a judicial forum. In
those instances we advise the complainant to seek legal counsel.
In order to deal more efficiently with the sizable increase in consumer complaints, we are attempting
presently to streamline our procedures by requesting a
number of national banks throughout the country to
designate specific personnel who are available to discuss consumer problems with members of our staff
and with the consumers themselves. As a large number of questions posed by complainants involve a misunderstanding of the reason for a bank's actions or
lack of action, the problems frequently can be resolved readily by our staff's telephoning bank officials
to review the matters and to determine what actions, if
any, are necessary. In many instances, bank officials
may clear up misunderstandings by communicating
directly with the complainants.
In addition to our own examination efforts, I would
like to outline some of the other activities in the consumer protection area which the Comptroller of the
Currency has undertaken in recent months. In March
1976, this Office, together with the Civil Rights Division
of the Justice Department, the Department of Housing
and Urban Development (HUD), the Federal Reserve
Board, the FDIC and the Federal Home Loan Bank
Board, created the Interagency Task Force on Fair
Housing Enforcement. The purpose of the task force is
to consider the various aspects of fair housing enforcement and seek solutions to the problems encountered. Discussions so far have centered on the powers
of each agency to implement regulations concerning
fair housing and the desirability of keeping records on
applicants' race, color, sex, etc.; examining procedures, training and techniques; appropriate and permissible corrective mechanisms; and whether consumer examinations should be worked into regular
commercial examinations or should be completely
separate.
The task force has developed a memorandum of understanding by which any agency receiving a fair
housing complaint will give notice to other agencies
which might be interested in such a complaint. For instance, if HUD receives a complaint of discrimination
against a national bank, it will investigate the complaint
but, at the same time, will give notice to us and to the
Justice Department.
Separately, our Office has signed a special memo-

randum of understanding with the Civil Rights Division
of the Department of Justice to the effect that this Office will select several banks at which Department of
Justice attorneys will be present as observers during
the fair housing portion of the consumer examination. •
That understanding should result in a training technique by which the experts at Justice will be able to 1
offer our examiners the benefit of their experience in
investigating discrimination allegations. The program
is expected to be operational by mid-March.
A third major activity in the fair housing area is a
data collection survey which our Office currently is
conducting in a number of banks across the nation.
Loan applicants at selected national banks are being
asked to complete a special form which records their
personal and economic characteristics. The bank involved then is required to provide a written explanation
of why any application is rejected. Location of property
also is recorded, and we anticipate that a comparison
of that information will be made with census tract data
available from the Commerce Department. Upon completion of the pilot project, we will evaluate the suitability of the program for nationwide use.
As you can see, the Comptroller of the Currency is
devoting extensive resources to the consumer protection area. We have found that, generally, both consumers and banks have benefitted from the changes
brought about by the new consumer protection laws.
Despite the complexity of many of the regulations, increased disclosure and more rigorous, nondiscriminatory credit guidelines have served to educate the public and improve relations between banks and their customers.
However, our involvement also has shown us that
legislation designed to protect consumer interests has
produced some undesirable aspects. It is with that
perspective that we offer for the Committee's consideration the following observations to maximize the benefits of consumer protection legislation.

Truth-in-Lending
A consensus now is forming among all those responsible for enforcing the Truth-in-Lending Act that
substantial changes in the Act and Federal Reserve
Regulation Z are needed. By simplifying a number of
provisions in the law, Congress can achieve a much
higher level of consumer understanding of basic loan
terms. Specifically, we recommend that required disclosures for all types of credit be limited to these core
terms — annual percentage rate; amount financed; finance charge expressed as a dollar amount; number
of payments, amount of payments and due dates or
periods of payment; and security interests.
Because late fees, rebates, etc., are not likely to be
considerations in comparison shopping, disclosure of
such terms is of questionable value. Congress might
consider legislating a standardization of some of those
terms because the ability of the free market to regulate
such items effectively via arm's length bargaining is
somewhat suspect.
We believe that the present civil liability provisions in
the law also need to be reexamined. It appears that
many creditors making good faith efforts to comply



with the law become involved in litigation for trivial,
technical violations resulting in harm to no one. Thus, it
has been our experience that those provisions tend to
benefit attorneys, printers and defaulting borrowers
more than the consumer.
As a final note on the subject of Truth-in-Lending, we
wish to go on record in support of the proposals for
changes in the Act made by the Federal Reserve
Board in their 1976 Annual Report. We agree with the
Board that adoption of its recommendations for simplification would not deprive consumers of essential information needed to shop for credit.

Home Mortgage Disclosure
Federal Reserve Regulation C recently was adopted
pursuant to the authority of the Home Mortgage Disclosure Act. Early indications bear out what we had
warned of at the time that law was passed; that is, that
disclosure of data showing geographic distribution of
loans granted is not very valuable in pinpointing banks
that discriminate.
Geocoding, or pairing the street address of
mortgaged property with the appropriate census tract,
poses another problem for banks seeking to comply
with the Act. Given that loan officers are not necessarily expert map readers, the lack of clarity in many census maps causes considerable trouble. The sporadic
availability of those maps only compounds the problem.

Real Estate Settlement Procedures
Of the first 126 national banks given careful review
for consumer law compliance under our new procedures, 43 were found to violate some section of the
Real Estate Settlement Procedures Act (RESPA). Most
of those violations involved the failure of a bank to give
a good faith estimate to the loan applicant. Fortunately,
that type of oversight normally does not harm the consumer because it is given only to persons making written application and occurs at a point in the transaction
when the applicant already has completed his or her
shopping for loan terms.
As you recall, the original purpose of RESPA was to
disclose settlement costs to borrowers sufficiently in
advance of closing to allow them to compare terms.
Congress became aware soon after enactment that
the 12-day notice requirement was delaying many simple transactions needlessly. Accordingly, the law was
amended to require only a 1-day waiting period. Unfortunately, the dilemma persists, because now borrowers are denied the opportunity to shop around if they
wish. In light of those problems, we question whether
RESPA offers anyone any real benefit.

Electronic Funds Transfers
Electronic funds transfer is fast becoming a major
area of consumer concern. Consumer protection and
security safeguards are two key issues which the National Commission on Electronic Fund Transfers can
be expected to address in their interim report, scheduled for release February 23, 1977. Thus far, the Commission has developed a data base and gathered
background material through numerous public hear-

215

ings. We look forward to reviewing their recommendations.
For our part, the Comptroller's Office has worked to
keep national banks informed and aware of the problems confronting the creation of an electronic funds
transfer system. We have produced a publication,
"EFTS Guidelines," which attempts to characterize the
current state of the art. We intend in the near future to
revise and update those guidelines to reflect recent
developments.

Consumer Education
By now it should be evident that the Comptroller of
the Currency has a strong commitment to the enforcement of the consumer protection laws. However, we
also recognize that, no matter how noble the intent or
how powerful the language, no law fully can accomplish its purpose without those whom it is designed to
protect having a fundamental awareness of their
rights.
Our experience continues to demonstrate that customers of national banks normally learn of their rights
under the various consumer protection laws only when
they write to us with specific complaints. For that reason, we view education of the public at large as the
most important challenge to the efficiency of federal
statutory protections. As a partial solution we now are
preparing a consumer guide to national banks which
will explain how consumers can use banking services
to their best advantage and what legal rights they may
exercise to protect their interests.
The ultimate solution cannot be wholly within the
means of a bank regulatory agency. Although consumer education by federal agencies may not have
been contemplated at the time of enactment of the
various consumer protection laws, we suggest to the
Committee that the Education Division of the Department of Health, Education and Welfare (HEW) already
possesses the necessary authority to develop a broad
program of that sort. Within its broad mandate, that

Division is responsible for acting as the key advocate
for assuring the provisions of professional and financial assistance to strengthen education in accordance
with federal laws and regulations.
Some progress in that direction already has been
made. In the latter half of 1976 the Office of Consumer
Affairs in HEW established the Interagency Consumer
Education and Information Liaison (CEIL). Representatives from more than 50 government agencies, including our own, convene once monthly to develop and
disseminate information to our nation's schools and
communities. The potential of that panel is apparent,
but, whether through CEIL, the Education Division, or
some other vehicle, our Office is ready to support fully
any efforts in behalf of consumer education in the
financial area, and we pledge all facilities at our disposal in aid of producing an effective educational program.
I deliberately have concentrated my remarks today
on the benefits resulting from the federal consumer
protection laws. Before closing, however, I would draw
the Committee's attention to the countervailing considerations of cost and paperwork generated by those
statutes.
It is a timeworn truism that every benefit carries a
price tag. Invariably, the cost of compliance with any
law becomes a business expense which is passed
along proportionately to the consumer.
Recognizing that, we favor periodic revaluation of
the consumer protection laws by those federal agencies charged with their enforcement. Where the agencies, as a result of their regulatory experience, have
not found requirements to be cost effective or particularly helpful to the consumer, we would hope that Congress would give consideration to repeal or revision.
As part of that process, we think it appropriate for the
Committee to conduct a survey of financial institutions
and consumers to ascertain the level of public interest
in the consumer protection laws now on the books.

Statement of Robert Bloom, Acting Comptroller of the Currency, before the Family
Farms, Rural Development and Special Studies Subcommittee of the House Committee
on Agriculture, Washington, D.C., February 24, 1977
We are pleased to have an opportunity to state the position of the Comptroller of the Currency with respect
to the Ag-Land Fund proposed by the Continental Illinois National Bank of Chicago. The Committee has
previously been supplied with a copy of our letter dated August 2, 1976 to the bank's attorney granting
waivers to certain technical requirements of our regulations in connection with the fund. Before commenting
on the specific provisions of the fund, it might be helpful to describe the functions of our agency.
The Office of the Comptroller of the Currency is responsible for the supervision of the National Banking
System. Our primary role is to maintain the solvency
and liquidity of national banks. To carry out that responsibility with respect to the banks' trust depart-

216




ments, we must see to it that the bank carries out its
fiduciary responsibilities in a manner which protects
the interests of beneficiaries.
Title 12 USC 92a authorizes national banks to exercise all fiduciary powers permitted of competing state
banks, trust companies or other corporations. That
statute also authorizes the Comptroller to promulgate
regulations governing the proper exercise of fiduciary
powers by national banks. Pursuant to that authority,
we have issued Regulation 9, found at Title 12 CFR 9.
That regulation is designed to ensure that national
banks operating trust departments do so in a manner
that fully protects the beneficiaries, and the bank itself,
from liability arising out of the operation of fiduciary accounts.

Section 18 of Regulation 9 prescribes rules for the
operation of collective investment funds. Paragraph
(a) (2) of this section authorizes the collective investment of pension and profit-sharing trusts by national
banks. Subsection (b) sets forth certain rules applicable to these funds. As described above, those rules
are designed to protect the interests of the holders of
beneficial interests in fiduciary accounts which are invested in the funds and the banks' depositors and
shareholders. The rules were designed to cover the
operation of funds composed of stocks and bonds and
other intangibles, not real estate.
Regulation 9 is issued by this Office pursuant to the
authority contained in Section 92a of Title 12. That section, in its last sentence, confers authority on the
Comptroller to issue whatever regulations he deems
necessary in order to carry out the intent of the section. Paragraph (c) (5) of the regulations gives the
Comptroller the authority to grant waivers of parts of
the regulations in his or her discretion. Pursuant to that
authority it is not uncommon for the Comptroller to
grant waivers to particular requirements of the regulation whenever it can be demonstrated that the interests
of the beneficiaries of a particular trust would not be
served by the application of the regulation. For example, when a bank proposes to offer a new form of trust
service such as a collective investment account for a
small or a specialized type of account, the bank will
submit its proposal to the Office for advance review. If
the Office believes that the plan has potential for service to the public and does not involve imprudent risk to
the bank or its beneficiaries, it is our policy to permit
competitive innovation, when possible. It is also not
unusual for such new services to require waivers of
some of the operating requirements of Regulation 9.
After a new service has been in successful operation
for a period of time and is accepted by the industry
and the public, we issue permanent amendments to
Regulation 9 to cover the activity.
The rules were adopted in 1963. Before that, the authority to provide rules governing the fiduciary powers
of national banks rested with the Board of Governors
of the Federal Reserve System. The Board first authorized the pooling of pension and profit-sharing trusts in
1957. However, other than authorizing such pooling,
the Board's rules did not impose any limitations governing the handling of pooled funds. When the regulatory authority over national bank trust departments was
transferred to the Comptroller in the early 1960's, this
Office decided to impose limitations on the operation
of such funds similar to the limitations applicable to
other types of collective funds. To date, no similar limitations are applicable to such funds operated by state
banks. It is interesting to note that the Bank of New
York, earlier, initiated plans to establish a fund similar
to the Ag-Land proposed by Continental, but has not
acted on them. As a state-chartered institution, that
bank did not have to conform to the regulations of this
Office.
None of the statutes governing the activities of the
Comptroller authorize him or her to restrict the types of
investments which banks can make for their fiduciary




accounts, except to protect beneficiaries or the bank
itself. Other public policy considerations involved in
the investment choices by banks as trustees are governed by the same laws applicable to all investors. For
example, whatever laws and precedents govern the
purchase of agricultural interests or concentrations or
monopolies are applicable to banks as they are to any
other party.
That is not to say that we were oblivious to the
broader policy implications of the Ag-Land Fund. We
fully recognize the unique nature of the proposal and
the possible issue it raised of undesirable concentration of farm ownership. We fully expected, and subsequent events have confirmed our expectation, that that
issue would be fully aired and debated before the fund
became operational.
We did not believe that a request for exception from
technical provisions of the Comptroller's regulation
was the proper way to raise the larger issues. There
was too much doubt as to the Comptroller's jurisdiction
over those issues and we knew that the bank would
have to obtain rulings from at least two other agencies
as well as from the court of public opinion and the
Congress. We felt confident that the larger issues of
public policy involved would be raised in those forums.
The specifics of the Continental Bank's application
to this Office were as follows. On June 3, 1976, counsel for the bank requested an opinion from this Office
as to whether a proposed collective investment fund,
entitled Ag-Land Fund-I, fulfilled the requirements applicable to funds permitted under paragraph (a) (2) of
Section 18 of Regulation 9, and, to the extent that it did
not, requesting that written authority be given to establish the fund with necessary exceptions to the requirements. The proposed fund, as originally presented to
us, contained certain provisions which we did not accept, and the plan was amended accordingly. The
amendments were:
(1) A revision of Section 2.03(a) of the plan to
place specific limitations upon the occasions
when the fund could deal with commercial customers of the bank;
(2) An amendment to Section 5.01 to provide a
means whereby withdrawals from the fund could
be effected during the first 5 years a trust may be
holding a unit of the fund;
(3) An amendment to Section 8.03 that an annual
audit be made by a certified public accountant
selected by and responsible to the board of directors of the bank.
Permission was asked and granted for the five following exceptions.
(1) A requirement that written notice be made to the
trustee requesting withdrawals from the fund at least 1
year prior to the valuation date at which the withdrawal
is to be made. Sub-paragraph (b) (4) of Section 18 of
Regulation 9 requires that there be no prior notice required for withdrawals so that an account may be withdrawn at any quarterly valuation date. Experience has
shown that advance notice provisions are troublesome
in the case of liquid asset funds used by personal
217

trusts and estates. In a corporate fund such as this,
however, with the announced policy of investing in assets possessing a unique and illiquid character, advance notice of withdrawals is necessary so that the
fund administrator can invest the fund assets in an orderly manner, and such waivers have been permitted.
In large pension trusts it is usually quite possible to
isolate amounts which can safely be placed in long
term investments. Accordingly, the exception permitting the advance notice requirement was permitted.
(2) A provision that the trustee is not obliged to
honor withdrawal requests in excess of the amount of
cash reserves and amounts necessary for the acquisition of pending investments. Subsection (b) of Section
18 has required that a fund have such cash and readily marketable investments as shall be deemed necessary to provide adequately for the needs of the participants. As in the case of the previous exception, this
could impose a burden on the managers of Ag-Land
Fund-I, which would impair the ability to provide for the
orderly operation of its investments. The requested exception would prevent a single participant from forcing
the sale of a farm to the possible detriment of the other
participants, an obviously essential feature in a fund of
this type. In cases where a participant wished to withdraw from the fund and insufficient cash exists, the
plan calls for the withdrawing participant to become a
creditor of the fund, entitled to interest, to be paid
when additional cash becomes reasonably available.
Protection of the withdrawing participant could be supplied, we believed, by our monitoring of the fund during examinations of the bank and by our insistence
that bona fide efforts be made to acquire funds to pay
off the withdrawing participant at the earliest opportunity. That consideration, plus the realization that the
provision would be understood and assented to by all
pension accounts being invested in the fund, enabled
us to decide to permit the provision.
(3) A number of cash reserves are permitted by
Section 6.02 of the plan for this fund. In each case
they appear to be prudent provisions for a fund investing in working farms. Regulation 9's provisions providing for only one type of reserve account simply reflect
a mode of operation which has become standard for
funds invested in securities and mortgages. Thus, the
regulation was needlessly specific as to an administra-

tive matter in that respect. For that reason the exception was permitted.
(4) Real estate brokers' commissions and other
sales expenses which might be incurred on future
sales are permitted to be considered in determining
the value of assets. Regulation 9 requires that assets
be valued at market value. In a fund invested in securities, the amount of commissions which may be paid
may vary widely depending upon the investment policy of the fund. No one has suggested that valuations
should contemplate amounts which might be paid as
commissions, and this Office has seen no reason for
attempting to permit the practice. On the other hand,
the amount to be expended to sell real estate held by
the fund is usually predictable and is, typically, quite
substantial. It appeared reasonable, therefore, that the
value of real estate be adjusted to reflect the fairly certain amount which would have to be paid to realize
that value. For that reason the exception was permitted.
(5) No new participants are to be admitted to the
fund except to the extent that there are withdrawing
participants. That requirement would be viewed by this
Office as imposing an unnecessary inflexibility on
funds investing in securities. However, for reasons
touched upon previously, it was deemed necessary
that the trustee be able to manage the portfolio of
unique illiquid assets in an orderly fashion. Because
the requirement would not affect participants in the
fund, it was deemed to be acceptable. This exception
had the incidental effect of providing more control over
the orderly growth of the fund.
In summation, it appeared to us that some of the
restrictions which have been devised over the year for
collective funds in which personal trusts and estates
are invested, which in turn are invested in securities or
mortgages, are unnecessary for pooled funds for pension trusts and, needlessly, impair the ability of the
trustee to manage a portfolio including real estate and
other unique and illiquid assets. Because it appeared
further that our oversight of the banks through regular
examination would enable us to ensure that the interests of the beneficiaries of trusts of this type were being properly administered, we could see no reason to
deny the waivers requested.

Statement of Robert Bloom, Acting Comptroller of the Currency, before the
Commerce, Consumer and Monetary Affairs Subcommittee of the House Committee
on Government Operations, Washington, D.C., March 3, 1977
I appreciate this opportunity to give the views of our
Office on H.R. 2176, which would provide for audits by
the Government Accounting Office (GAO) of the banking regulatory agencies. We understand the purpose
of the legislation is to provide the Congress with periodic data as to the adequacy of the performance of
the three banking agencies as well as with audits of
their internal finances.
We have, as you know, recently undergone a perfor218




mance review by the GAO. While this Office has not
previously been subject to GAO review, we voluntarily
entered into agreement for such a review last April.
The review was performed-in accordance with a memorandum of agreement setting forth the scope of the
review and clarifying issues of accessibility to, and
confidentiality of, information derived from our examinations of national banks.
Our experience with that GAO review indicated that

we could work productively with the GAO under mutually satisfactory guidelines. The final report was an objective description of our Office's duties and recent developments which have occurred in the bank regulatory field, although we do not necessarily agree with all
of the conclusions.
In light of that recent experience, we would not object to reasonably spaced periodic reviews by the
GAO. It is essential, however, to preserve the environment which permits us to carry out our mandate to examine every aspect of a national bank's activities in
depth and on a regular basis. The examination process is only possible where we can protect the confidentiality of information divulged to us by the banks,
including detailed information on customers' private affairs.
The broad language of H.R. 2176 would seriously
interfere with that traditional relationship. We, therefore, urge the Committee to adopt the following important provisions of our April 19, 1976, agreement with
the GAO in any bill that might be reported out on this
subject.
(1) It should be made explicit in any bill that the
GAO will not conduct separate examinations of banks
in order to evaluate the accuracy of factual findings in
examination reports. GAO did not have such access in
connection with the review it has just completed, and
the quality of the review does not seem to have been
impaired. To our knowledge, the GAO team did not
discover any evidence that examiners have been
negligent in the examination process or have otherwise failed to carry out their duties.
Direct examination by the GAO for verification would
create an unconscionable duplication of government
effort in the banks where there is no demonstrable
need to justify it. Commercial banks already are examined in depth on a regular basis and are open to
scrutiny to a degree unknown by other types of businesses. We do not think that, in the absence of clear
proof of the need for another series of examinations,
banks should be subjected to still more governmental

interference.
(2) As I previously noted, confidentiality is absolutely
essential to effective bank examination. Therefore, any
bill should include the provision that the GAO will not
identify any bank customers or any bank or provide
details that can lead to identification of any bank or
bank customer.
(3) An advance draft of the GAO report should be
made available to the agency at least 30 days prior to
its release for agency comment. The final report
should include any written comments submitted by the
agency within that period.
Our memorandum of agreement with the GAO provided for inclusion of our views and we are under the
impression that that both helped the GAO and provided a more balanced report to the Congress and the
public. We understand that current GAO procedures
call for a review of reports by the audited agencies
within 30 days, and we do not think that time frame
would cause any problems. We do, however, think it
would be advisable to ensure the opportunity for
agency comment by including such a provision in law,
rather than depending on organizational procedures
which could change without notice.
Other protections contained in the memorandum of
agreement, such as the provision that GAO workpapers and copies of sensitive agency documents be
kept in secure facilities on the premises of the audited
agency, contributed materially to our satisfaction with
the procedures employed. We suggest that the Committee carefully consider such provisions in its deliberations.
Finally, we understand that a revised bill might be
introduced on this subject with changes to make the
audit more appropriate to the particular and unique
circumstances of bank examination. Our staff has
worked with the Committee and GAO staff in the past
and we stand ready to cooperate in the future in formulating a bill which will permit adequate Congressional oversight while at the same time permitting an
effective bank examination and supervisory process.

Statement of Robert Bloom, Acting Comptroller of the Currency, before the Senate
Committee on Banking, Housing and Urban Affairs, Washington, D.C., March 11,
1977
I appreciate this opportunity to discuss the condition of
the National Banking System and the Government Accounting Office (GAO) report on federal supervision of
banks.
My testimony will cover four basic areas:
(1) The condition of the National Banking System;
(2) The status of national banks requiring special
supervisory attention;
(3) Measuring capital adequacy, liquidity and bank
management; and
(4) The GAO report recommendations.



I am attaching to my statement, as an appendix, the
detailed statistical data requested in the Chairman's
letter of November 15, 1976.

The Condition of the National Banking System
In his statement before the Committee on February
5, 1976, the previous Comptroller of the Currency stated that, despite the economic problems which the
country had recently experienced, "the National Banking System . . . is sound and prosperous." The accuracy of that observation has been confirmed in 1976.
During 1976, the condition of the National Banking
System improved significantly as the economy contin219

ued its recovery from the severest recession since the
Great Depression of the 1930's. Reflecting the halting
pace of the economic recovery, national banks grew
slowly during the first half of 1976, but grew much
more rapidly in the second half, particularly in the
fourth quarter. Comparing adjusted December 31,
1975 data to preliminary and virtually complete December 31, 1976 data, total domestic and foreign assets grew 9.3 percent, net loans grew 8.4 percent,
U.S. government investment securities grew 13.2 percent and total capital grew 10.1 percent. As a result,
the total capital to assets ratio increased slightly from a
December 31, 1975 figure of 6.2 percent, adjusted for
reporting changes, to 6.3 percent on December 31,
1976.
Earnings and loan losses are two important measures of the health of national banks. Net income as a
percent of total assets was 0.65 percent in 1976, virtually the same return on assets as in each of the three
preceding years. Loan losses as a percent of total
loans improved slightly in 1976, declining to 0.56 percent from 0.58 percent in 1975. Although the loss rate
remains high compared to prior years, the continued
improvement in the economy and the health of business firms should cause the loss ratio to continue its
fall toward more normal levels.
Key indicators of the ability of national banks to respond flexibly to changing economic conditions show
little change from 1975. The loan to assets ratio, an
indicator of the degree to which bank financial resources are committed to lending activity, declined
slightly from an adjusted 53.9 to 53.4 percent. That decline was complemented by an increase in holdings of
U.S. government investment securities relative to total
assets from 9.5 to 9.9 percent. The ratio of cash items
plus U.S. government securities to assets, a traditional
measure of bank liquidity, remained unchanged at
27.8 percent.
Those ratios, by themselves, do not reveal the full
extent of the improvements in 1976. Dependence on
interest-sensitive funds declined and deposit stability
improved as large denomination certificates of deposit
decreased and time and savings deposits increased.
National banks' access to funds was ample as demonstrated by the availability of Federal funds at low rates.
In short, these changes increased the liquidity of national banks and enhanced their flexibility.
As an indication of the breadth of the improvement
during the first 6 months of 1976, 18 of the 19 national
bank peer groups used by our National Bank Surveillance System to monitor the condition of national
banks, showed increases in the return on average assets. Gross loan chargeoffs as a percent of loans declined in 17 groups, and end-of-period assets to endof-period capital declined in 18 groups. Coverage of
net loan chargeoffs by current earnings before taxes
and loan loss provisions, a key indicator of a bank's
ability to absorb loan losses, showed great improvement, exceeding ten times losses in 18 of the 19 peer
groups. In the remaining peer group, net chargeoff
coverage was 3.9 times losses.
The 12 largest national banks, which hold over 40
percent of the assets and deposits of all national
220



banks, showed some improvement during 1976, but
not as much as smaller national banks. Those large
banks were hit harder by the 1973-75 recession and,
as a consequence, it has taken them longer to work
out their problems. More substantial improvements in
the condition of the 12 largest national banks are likely
in 1977.
Total net income of the 12 largest national banks
was $1.5 billion in 1976. Year-end 1976 data show that
the rate of return on average assets increased from
0.55 percent in 1975 to 0.56 percent in 1976. Net
chargeoff coverage remained at 3.9 times loan losses;
however, gross loan chargeoffs as a percent of average loans worsened from 0.69 percent, in 1975, to
0.85 percent, in 1976. A bright spot was the improvement in the ratio of total capital to assets from 4.6 percent, in 1975, to 4.8 percent, in 1976. In addition, an
analysis of the 12 largest national banks revealed that:
• Total assets increased $23.9 billion, or 9.0 percent, to $289.7 billion; gross loans increased
approximately $12.3 billion, or 7.9 percent, to
$168.1 billion; and total deposits increased
$14.9 billion, or 6.8 percent, to $233.6 billion.
• Loan loss reserves increased $55 million, to
$1.5 billion, and reserves were 1.36 times net
chargeoffs in 1976.
• Total capital increased $1.72 billion, or 14.0
percent, to $14.0 billion; $880 million came
from the retention of earnings, $190 million from
new subordinated note and debenture issues
and $650 million from new stock issues and
other additions to equity capital.
• Total capital to asset ratios increased in 9 of the
12 banks.
As the economic recovery continues into 1977, further improvement in the condition of national banks,
especially the largest ones, is likely. Because of the
improvement in liquidity, earnings and capital that has
occurred over the last 2 years, national banks are in a
position to support economic expansion.

Banks Requiring Special Supervisory Attention
A history of the methods the Office of the Comptroller of the Currency (OCC) has used to identify banks
requiring special supervisory attention has been previously submitted to the Committee. (See Annual Report of the Comptroller of the Currency, 1976, pp.
189-190 and 198-200.) OCC considers its "problem"
banks to be those banks that are receiving special supervisory attention and whose continued liquidity and
solvency is in question. Our professional staff rates the
condition of those banks as either "critical" or "serious." A detailed description of the characteristics
which we consider in placing a bank in either of those
categories is furnished in the appendix.
As of December 31, 1976, there were 23 national
banks in the "serious" and "critical" categories combined. Of those, five, with total assets of $1,689 million
and deposits of $1,396 million, had a combination of

weaknesses and adverse trends constituting a nearterm threat to liquidity or solvency. At the time of our
February 5, 1976 testimony before this Committee,
there were seven such banks, with total assets of
$1,669 million and deposits of $1,359 million.
The remaining 18 "problem" banks, with total assets
of $8,635 million and deposits of $6,074 million, exhibited weaknesses which could lead to insolvency if not
corrected, but they were in no immediate danger.
Twenty-one banks, with total assets of $9,856 million
and deposits of $6,242 million, were in that "serious"
category at the time of our last testimony on this subject before the Committee.
In addition, the OCC reviews, monitors and provides
special supervision to a number of other banks that
have adverse performance characteristics but whose
prospects of failure are remote. Those banks are assigned a "close supervision" designation. As of December 31, 1976 there were 124 banks under "close
supervision," compared to 57 banks at year-end 1975.
The increase in the number of banks being monitored
does not reflect a deterioration in the National Banking
System. The increase is, instead, largely the result of a
number of OCC procedural, policy and timing
changes, as follows:
(1) The 1976 downgrading of some 39 banks resulted from adverse 1974-1975 economic
conditions captured for the first time in 1976
examination reports. That time lag is inherent
in the bank examination process.
(2) Some banks, which would ordinarily not be of
concern to the OCC based on their individual
conditions, were nevertheless added to the
"close supervision" category and followed for
the first time in 1976 because of their affiliation
with parent holding companies which were experiencing financial difficulties.
(3) The Washington unit, whose sole responsibility it is to identify such banks, analyze their
problems, and insure that corrective measures are taken, did not become fully staffed
and operational until early in 1976. That, together with improved procedural and review
processes, has led to the identification of
more banks for inclusion.
(4) The National Bank Surveillance System, since
it became operational in the summer of 1976,
has enabled the Office to detect adverse
trends at an earlier stage and, thereby, to single out banks for review and monitoring which
would have escaped such early special attention under preexisting procedures.
In addition to pointing out banks that require special
supervisory attention, our new monitoring systems are
designed to alert us, at the earliest possible stage, to
incipient weaknesses in any national bank. A bank experiencing a temporary adverse trend is not automatically considered a "problem" bank. Rather, each bank
is analyzed individually to determine the cause of the
trend and the appropriate remedial action.



In recent years, we have greatly increased our capacity to assure the best efforts of both the agency
and the banks to correct problems, but no competitive
system can be completely fail-safe. There must be
some room for innovations based on bank management judgments. From time to time, therefore, failures
will occur. We believe that some failures are an inevitable and acceptable cost of preserving a healthy, competitive and responsive banking system.

Capital Adequacy, Liquidity and Bank Management
OCC has developed significant new tools to measure and monitor the traditional indices of performance
— capital, liquidity and management. The National
Bank Surveillance
System
(NBSS) combines
computer-based analysis of national bank performance statistics with bank examiner experience.
It may be helpful to the Committee to provide a brief
comparison of our new procedures with earlier practices. Supervisory rating of a bank's capital adequacy,
liquidity and management has always required that the
examiner engage in a complex series of subjective
judgments based only in part on ratio analysis. Capital
and liquidity ratios alone do not necessarily indicate
the financial condition of a bank, but they are useful
when calculated frequently and observed in relation to
other ratios and trends. It is our experience that capital
and liquidity ratios are usually lagging indicators of existing problems. To judge properly the health of the
National Banking System, this Office now tries to identify leading indicators of potential problems.

Capital Adequacy
Past Examination Procedures — In the past, techniques for measuring the adequacy of capital have
varied somewhat from region to region and even from
examiner to examiner. Quite properly, an examiner did
not base his or her entire analysis of the bank's capital
adequacy on ratios alone. He or she was also directed
to evaluate, subjectively, such factors as quality of assets, quality of management, liquidity, earnings,
ownership, occupancy needs, volatility of deposits,
operational procedures and capacity to meet the
community's needs. That subjective process was and
is as important as the calculation of objective ratios. In
making those complex judgments, however, the examiner lacked significant current information on the performance of the bank under examination in relation to
other similar banks operating in similar environments.
If the examiner felt that the trends in capital adequacy were adverse, he or she commented on the situation in the report of examination's confidential section addressed to the regional administrator. Discussion with bank management was not mandatory.
Examiner-mandated board meetings typically were not
held until the situation was considered serious.
Current Examination Procedures — In the current examination, the examiner must follow well-defined procedures leading to a conclusion about the bank's capital position. That conclusion is supported by detailed
221

workpapers and the conclusion is discussed in the
open section of the report of examination presented to
the board of directors. The examination, in general,
and the adequacy of the bank's capital position, specifically, are thoroughly discussed with both management and the board of directors at a meeting required
at the conclusion of each examination.
In addition to the review of a bank's capital position
during the examination, a trained analyst in the regional office reviews quarterly NBSS data on banks exhibiting the most significant changes or unusual performance. That review includes an analysis of the
bank's capital adequacy. Thus, review or tracking of a
bank does not wait until the next examination.
Each condition of concern indicated by the analysis
of capital adequacy is investigated by the regional office and monitored on the Action Control System. That
system requires the regional office to report, at least
once a month, the bank's progress or lack of progress
toward correcting the conditions of concern. A capital
problem usually cannot be corrected after a bank is in
a serious condition. But, under the procedures required by the Action Control System, a potential capital deficiency, detected in this "early warning system,"
is more likely to be corrected before a crisis occurs.

Liquidity
Adequate liquidity can be defined as a bank's ability
to provide funds to its customers, including borrowers,
in response to reasonable demand. A liquidity ratio
should measure all liquidity requirements against all
sources of liquidity. However, all liquidity demands
and sources, by their nature, are not recordable in the
traditional financial reports produced by banks. Unrecordable factors include the ability of the bank to secure new liabilities as needed and its ability to liquidate certain assets. Those are qualitative factors which
cannot be captured by ratios.
Past Examination Procedures — In the past, our analysis of a bank's liquidity position was based primarily
upon a single traditional ratio. A bank's net liquid assets were generally deemed acceptable by the Office
if they exceeded 15 percent of net liabilities. If a
bank's liquidity dropped below that point, additional
analysis of the bank's recorded assets and liabilities
and their contractual maturities was usually performed.
That analysis included a somewhat subjective review
of the bank's liquidity position as well as the composition of its deposit structure. Procedures for making
those subjective judgments were not formalized, thus,
there was some*undue dependence on the ratio.
Current Examination Procedures — Recognizing the
limitations of trying to analyze a bank's liquidity with a
single, static ratio, comprehensive analytical procedures encompassing the entire area of funds management are now in effect. Those work programs entail a
careful weighing of the bank's historical funding requirements, current liquidity position, earnings, stability of sources and uses of funds, anticipated future
222



needs and options for reducing funding needs or attracting additional liquid funds.
As far as quantitative measures are concerned, we
continue to use the basic liquidity ratio, but it is complemented by NBSS data which enable the examiner
to analyze trends within the bank and significant variations from peer group averages.
Since liquidity sources are dependent upon the confidence that others have in the bank, an analysis of the
factors affecting that confidence is important. One of
the principal trends affecting such confidence is a decline in the bank's earnings. NBSS is designed to
monitor earnings and significant changes in asset and
liability composition on a quarterly basis. All banks selected for priority review through analysis of the quarterly call reports are reviewed, with subsequent followup of all problem areas. Continued improvements in
NBSS will be geared toward improving our methods of
quantitatively measuring a bank's liquidity position.

Management
Past Examination Procedures — Examiners were previously required to state their evaluation of management in the confidential section of the report of examination. Their written comments were usually preceded
by a one word caption — "Excellent," "Good," "Fair"
or "Poor." The primary officers and directors were listed with a narrative evaluation of each. Examiners were
told that those evaluations "should reconcile with the
bank's condition." Instructions recommended that,
"When an unsafe management is encountered the examiner should take pains to nail down the indictment
both in the open and confidential sections of the report." In practice, however, comments pertaining to
unsafe management appeared all too frequently only
in the confidential section.
Current Examination Procedures — Current instructions to examiners state:
Examiners must not restrict their appraisals to the
past and present. . . the determination of what the
management will do for the bank in the future is
most significant. Senior management should be
judged by the sufficiency of earnings to date and
by its plans for the bank's assets and liability mix
to achieve both maximized future earnings and a
strong liquid future condition.
Those views are now presented to the bank's board of
directors.
The leading indicators and significant ratios tracked
by NBSS on a quarterly basis all reflect the actions of
bank management. Banks which are designated for
quarterly priority review by NBSS are analyzed in detail
by regional specialists. Their recommendations for immediate investigation usually require discussion with
bank management.
Adverse evaluations of bank management from reports of examination or from the more frequent NBSS
reviews can be placed in the Action Control System.
Any condition of concern placed in the Action Control

System requires review of corrective progress at least
once a month.
We believe that the regular distribution of NBSS
bank performance reports to national banks will make
a significant contribution to the improvement of bank
management. That distribution will begin shortly.

The GAO Report
As I have previously testified, we have little difficulty
with many of the recommendations in the GAO report.
Many of the recommendations endorsed, in some
measure, procedures and approaches which the
Comptroller's Office was already taking. Thus, the
GAO recommended that the OCC invite the Federal
Deposit Insurance Corporation (FDIC) and the Federal
Reserve System (FRS) to evaluate jointly the OCC's
new examination procedures with the goal of incorporating our new concepts, after proper testing, into
their approaches. We have provided such orientation.
The latest edition of our revised examination procedures handbook is being made available to the other
agencies as it comes off the press. Our new "small
bank" examination procedures have just been released for field testing and have been forwarded to the
FDIC for their review. Perhaps most significant, the Interagency Coordinating Committee has formed a top
level staff subcommittee composed of the Director of
Banking Supervision and Regulation, FRS; The First
Deputy Comptroller of the Currency for Operations; the
Director, Division of Bank Supervision, FDIC; and the
Director, Office of Examination and Supervision of the
Federal Home Loan Bank Board for the purpose of
coordinating, on a regular and continuing basis, the
examination policies and procedures of the four agencies. One of the first assignments for this new group is
to explore approaches to development of uniform criteria for the identification of "problem" banks.
The GAO recommended that the Federal Reserve
System and the Comptroller's Office develop a single
approach to country risk classification. We are continuing to work with the FRS to develop a coordinated program in that area.
The GAO made certain recommendations about
how the FRS and the OCC might combine their foreign
examination efforts to better utilize examiners and facilities. There are some legal obstacles, but we are receptive to the idea. In particular, I have requested that
senior examination officials on my staff explore, with
their Federal Reserve counterparts, increased coordi-

nation in matters of mutual interest such as minimum
standards for foreign exchange operation and country
risk analysis. I have also asked that, in such exchanges, they specifically review the advantages and
disadvantages of joint overseas examinations.
With regard to the GAO recommendation that all supervisory agencies establish more aggressive policies
for using formal actions, we believe that statistics
quoted in the GAO report are adequate testimony to
our increasingly aggressive posture. However, formal
actions taken under the Financial Institutions Supervisory Act are only part of the story. As I pointed out in
my testimony before the joint session of committees of
the House, the present formal enforcement powers of
the agencies are inadequate in a number of respects.
Improvements recommended by the agencies have
been contained in a number of bills before committees
of the present and past Congresses. However, bank
problems arising from managerial incompetence and
poor economic conditions cannot always be solved
through cease and desist actions. When we conclude
that formal action will assist in rehabilitating an institution, we will use it. I suspect that increasing use of the
formal enforcement tools will continue and, perhaps
accelerate, particularly if legislation granting the agencies additional flexibility in that area is enacted by the
Congress. For most institutions, however, we believe
that recent improvements in the examination process,
including better communication with bank directors
and methods for early detection of adverse trends, will
achieve an even greater impact.
The GAO recommended that, where possible, the
bank regulatory agencies coordinate and combine
their examiner training efforts. The OCC has contacted
the FRS on the development of common courses and
has responded positively to the FDIC's proposal for
establishment of a joint training facility in Rosslyn, Va.
The GAO specifically recommended that all agencies jointly staff a group to analyze shared national
credits. That recommendation has met with positive response from all three agencies. Examiners from the
three agencies, meeting in joint session, will analyze
and classify such credits. The results of those joint
meetings will be binding on both national and state
member banks. The FDIC shares its responsibility in
that area with state agencies, and its inclusion in the
process promises to be more complex. Nonetheless,
the FDIC will be included. We anticipate that the program will begin in early May.

Appendix to March 11 Statement by Robert Bloom
(In the interest of space, this is not a complete reproduction of the information provided. It represents, however, the
most significant portions. Complete data are available elsewhere. Item numbers have been altered to be consecutive.)

Explanation of Bank Descriptions Used
Critical — Banks so characterized exhibit a combination of weaknesses and adverse financial trends which
are pronounced to a point where the ultimate liquidity




and solvency of the institution and its continuance as
an independent entity are in question. The probability
of failure is high for such banks.
223

Usually these banks are suffering from a variety of
ills which may include combinations of:
1. Mismanagement, arising from ineptness or
fraudulent and self-serving practices.
2. Inadequate earnings or loss operations
emanating from high loan losses; excessive
overhead and operating expenses; deficient
asset/liability/liquidity management which has
failed to properly match interest-sensitive assets and liabilities to provide the bank with a
profitable interest spread and a means to meet
current demands placed upon it; heavy concentrations in non-accrual loans, renegotiated
reduced interest rate loans and non-earning
foreclosed real estate; imprudent or speculative dealing and trading in securities; and the
like.
3. Inadequate capitalization in terms of the bank's
earnings capacity and retention rate, its growth
pattern, the quality of its assets, management
capacity, the liquidity of assets, the efficiency
of operations, liquidity/liability management,
and its capacity to meet present and future
financial needs of its trade area, considering
the competition it faces.
4. Poor quality assets, especially when excessive
rigidity is prevalent and concentrations exist in
assets of doubtful collectibility.
5. Lack of liquidity emanating from an excessive
reliance on interest-sensitive purchased funds
which have become confidence-sensitive due
to adverse financial trends and which have not
been properly matched against interestsensitive assets. Secondary liquidity sources
through the sale of loans or securities are generally not available to such banks, except at a
substantial discount due to heavy concentrations in low yielding fixed-rate securities and
loans, their poor quality, or their lack of
marketability.
6. Other unsafe and unsound policies and practices.
The precarious condition of these banks and the attendant uncertainties as to possible contingent losses
arising from threatened or protracted litigation or from
the prospects for further financial deterioration, com-

224



bine to virtually preclude outside support from existing
or prospective shareholders. Moreover, the traditional
remedy of merger with or sale to a stronger institution
is obviated by the same considerations and uncertainties.
Such institutions obviously require the most intense
supervision and monitoring by the Comptroller's Office.
Serious — Banks in this category reflect combinations
of all or some of the adverse factors noted for critical
banks, except that the weaknesses and financial
trends are not so severe as to threaten the immediate
liquidity and solvency of the institution. The potential
for failure is present but not pronounced. In addition to
financial and management considerations, banks may
also be placed in this category when significant violations of law or regulation are evident, when unsafe and
unsound banking practices or policies first become
apparent, or when self-dealing practices of officers
and directors come to light. This is true even though
such violations or practices may not yet be actually
threatening the viability of the bank. Such banks also
require continuous monitoring, supervision and attention from the OCC.
Close Supervision — This category includes banks
that may be experiencing a combination of adverse
factors noted for banks rated critical and serious to the
same or lesser degree than those banks in the serious
category. However, they possess certain characteristics more favorable than banks in the problem bank
categories. Those favorable characteristics might include all or a combination of the following: a strong
market position with solid fund sources and a diversified asset structure; a strong ownership affiliation;
management quality; earnings capacity; and capital
protection. These banks are less vulnerable than serious banks and their strength and financial capacity as
a whole is such as to make failure a remote possibility.
Nevertheless, certain problems remain and require
more than ordinary supervisory concern and monitoring. Such banks have typically identified their problems and have implemented remedial action, but because of the nature of some of their problems, such as
depressed real estate conditions, a return to a satisfactory condition is primarily dependent upon the rate
of economic recovery or other factors beyond the
bank's control.

Table 1
National Banks Requiring Special Supervisory Attention, by Category
(Dollars in millions)
Critical
Date of list

Number
of banks

12/31/75*
7
12/31/76t
5
Increase, 1975-76

Close Supervision

Serious

Assets

Deposits

Number
of banks

Assets

Deposits

Number
of banks

Assets

Deposits

$1,669
1,689

$1,359
1,396

21
18

$9,856
8,635

$6,242
6,074

57
124t

$60,597
72,930

$49,285
59,285

Total
Number
of banks

85
147
73%

Assets

Deposits

$72,122
83,254
15%

$56,886
,66,755
17%

* Asset and deposit figures are from the latest 1975 report of examination,
t Asset and deposit figures are from the June 30, 1976 report of condition.
$ The increase in the number of banks assigned to "Close Supervision" category during 1976 is more attributable to improved identification
procedures than it is to deterioration in bank condition (See text p! 221).

Table 2A

Table 2B

Reconciliation of National Banks Rated
"Critical", 12/31 /75 and 12/31 /76
(Dollars in millions)

Reconciliation of National Banks Rated
"Serious", 12/31 /75 and 12/31 /76
(Dollars in millions)

Number
of banks
12/31/75:

Total
assets

7

$1,669

$1,359

Number
of banks

Total
assets

Total
deposits

12/31/75:

21

$9,856

$6,242

14
1

1,428
13

1,167
12
1,179

Total
deposits

Less:
Banks Re-rated
Banks Merged
Banks Failed

2
2
2

20
36
590

16
31
482

Less:
Banks Re-rated
Banks Merged
Banks Failed

Total subtractions

6

646

529

Total subtractions

15

1,441

Plus:
Banks Re-rated

12

985

824

18

9,400

5,887

(765)

187

18

8,635

6,074

Plus:
Banks Re-rated

4

734

580

Total

5

1,757

1,410

Adjustments*
Reconciled Total, 12/31/76

(68)
5

1,689

(14)
1,396

* Adjustments for growth and shrinkage of assets and deposits between 12/75 and 6/76 and to convert from examination report figures used in the 12/75 calculations to report of condition figures
as of 6/76 used for "Critical" rated banks on 12/31 /76.




Total
Adjustments*
Reconciled Total, 12/31 /76

* Adjustments for growth and shrinkage of assets and deposits between 12/75 and 6/76 and to convert from examination report figures used in the 12/75 calculations to report of condition figures
as of 6/76 used for "Serious" rated banks on 12/31176.

225

Table 2C
Reconciliation of National Banks Rated "Close
Supervision", 12/31175 and 12/31 /76
(Dollars in millions)
Number
of banks

Total
assets

Total
deposits

12/31/75:

57

$61

$49

Less:
Banks Re-rated
Banks Merged
Banks Failed

29
2

5
t

3
t

Total subtractions

31

5

4

Plus:
Banks Re-rated

98

17

14

124

73

60

(t)

Total

(t)

73

59

Adjustments*
Reconciled Total, 12/31 /76

124

* Adjustments for growth and shrinkage of assets and deposits between 12/75 and 6/76 and to convert from examination report figures used in the 12/75 calculations to report of condition figures
as of 6/76 used for "Close Supervision" rated banks on 12/31 /76.
t Less than $500,000.

Table 3
National Banks Requiring Special Supervisory Attention, Selected Report of Condition Data,
December 31, 1975 and June 30, 1976, by size of bank
(Dollars in Millions)

Total
risk
assets

Debt
Total
capital as capital as
Equity
percent
percent
Equity
Total
Total
Total as percent as percent
of risk
of total
assets deposits liabilities of assets of deposits
capital
assets

Total
Total
capital as capital as
percent
percent
of total
of total
liabilities
assets

Size of bank
(assets)

Total Debt
Total
equity capital capital

June 30, 1976:
0-$100 million
$100 million - 1 billion
Over $1 billion

$201
458
3,523

$15
71
568

$216 $2,309
529
5,918
4,091 52,608

$3,189
8,130
71,935

$2,868
6,848
57,040

$2,973
7,601
67,844

6.3
5.6
4.9

7.0
6.7
6.2

6.9
13.4
13.9

9.4
8.9
7.8

6.8
6.5
5.7

7.3
7.0
6.0

December 31, 1975:
0-$100 million
$100 million - 1 billion
Over $1 billion

194
395
3,437

13
71
376

207
2,259
466
5,433
3,813 55,535

3,009
7,372
71,172

2,658
6,260
57,377

2,802
6,906
67,359

6.4
5.4
4.8

7.3
6.3
6.0

6.3
15.2
9.9

9.2
8.6
6.9

6.9
6.3
5.4

7.4
6.7
5.7

226



Table 4A
Extensions of credit to directors, officers, employees, and their interests, by asset size of bank, for
national banks with assets of over $1 billion, during 1976
(Dollar amounts in millions)
Number
of loans

$1 to 5 billion
Amount
direct

Amount
indirect

Number
of loans

Over $5 billion
Amount
direct

Amount
indirect

Obligations of directors, officers, employees, and
their unincorporated companies

N.A.

$571

$135

N.A.

$839

$15

Obligations of corporations in which directors, officers or employees, individually, or with members of
their families, own 10 percent or more of the outstanding stock

615

667

71

Obligations of others, or portions thereof, collateraled
by securities issued by corporations in which directors, officers, or employees, individually, or with members of their families, own 10 percent or more

327

80

121

49

Investments in stocks, bonds, or other obligations of
corporations in which directors, officers, or employees, individually, or with their families, own 10 percent or more
Less duplications within and between groups . . .

39

1,279

Total

18

107
105

$960

Source: U.S. Comptroller of the Currency examination reports.

Table 4B
Extensions of credit to directors, officers, employees, and their interests, by asset size of bank, for
national banks requiring special supervisory attention, during 1976
(Dollar amounts in millions)
Less than $100 million
More than $1 billion
$100 million to 1 billion
Number Amount Amount Number Amount Amount Number Amount Amount
of loans
direct
indirect of loans
direct
indirect of loans
direct
indirect
Obligations of directors, officers, employees, and
their unincorporated companies

N.A.

$40

Obligations of corporations in which directors, officers or employees, individually, or with members of
their families, own 10 percent or more of the outstanding stock

368

19

Obligations of others, or portions thereof, collateraled
by securities issued by corporations in which directors, officers, or employees, individually, or with members of their families, own 10 percent or more

37

$56

58

$189

84

74

$32

N.A.

118

111

N.A.

228

$34

14

$20

Investments in stocks, bonds, or other obligations of
corporations in which directors, officers, or employees, individually, or with their families, own 10 percent or more
Less duplications within and between groups
Total

21

25
55

11

132

18

10
319

18

Source: U.S. Comptroller of the Currency examination reports.




227

Table 5
National Banks Rated 3 and 4*
(Dollars in millions)

Date of
list

12/70
6/71
12/71
6/72
12/72
6/73
12/73
6/74
12/74
6/75
12/75
6/76

Total
number of
national
banks

Total
assets of
national
banks

Total
deposits of
national
banks

4,348 $323,359 $269,690
4,366 354,327 299,254
4,385
373,870 315,212
4,417
398,278 333,843
4,449 425,550 354,442
4,495 466,265 388,516
4,546 497,583 410,471
4,612
545,290 444,084
4,659
579,715 469,181
4,703
599,803 489,624
4,709 600,860 490,594
4,748
657,234 545,663

Group 3
Number
of banks

104
112
101
105
61
56
71
110
169
251
251
256

Assets

$3,058
5,002
13,084
13,558
10,693
11,601
13,742
119,603
225,164
249,725
249,747
227,201

Group 4

Percent of all natione banks
3/
Deposits Number
Assets
Deposits

$2,685
4,311
10,990
11,399
9,107
9,472
10,735
97,397
180,916
201,919
201,917
182,543

2.4
2.6
2.3
2.4
1.4
1.2
1.6
2.4
3.6
5.3
5.3
5.4

.9
1.4
3.5
3.4
2.5
2.5
2.8
21.9
38.8
41.6
41.6
34.6

1.0
1.4
3.5
3.4
2.6
2.4
2.6
21.9
38.6
41.2
41.2
33.5

Number
of banks

Assets

8
8
8
5
6
8
8
11
17
25
24
27

$211
328
121
93
81
131
144
225
2,376
3,527
3,487
5,987

Percent of all national banki
Deposits Number Assets Deposits

$193
294
109
83
73
116
131
202
1,779
2,901
2,866
4,672

.2
.2
.2
.1
.1
.2
.2
.2
.4
.5
.5
.6

.1
.1
—
—
—
—
—
—
.4
.6
.6
.9

.1
.1
—
—
—
—
—
—
.4
.6
.6
.9

NOTE: Dashes indicate amounts less than .05 percent.
*A reconstruction based on examination reports of banks still in existence.

Formal Proceedings Brought by the Comptroller Pursuant to the
Cease and Desist Provisions of the Financial Institutions
Supervisory Act of 1966, 12 USC 1818 (b), 1976

(Similar detail for 1971-1975 is available on pp. 211-214 of 1976 report.)
1. A written formal Agreement to eliminate selfserving concentrated loans to certain individuals
and their interests and extensions of credit in violation of 12 USC 84. A requirement that the bank
raise additional capital, institute lending policies
and obtain current and satisfactory credit information from all borrowers.
2. A Temporary Cease and Desist Order, Notice of
Charges, Permanent Cease and Desist Order and
a Stipulation and Consent to the Issuance of a
Permanent Cease and Desist Order requiring
elimination of self-dealing through loans to relatives and friends and extensions of credit made in
violation of 12 USC 84. Provisions requiring the
bank to raise additional capital and to restrict dividends. Requirements that the bank improve the
status of all criticized loans and secure adequate
collateral for loans. These requirements include
improvements to the internal controls and audit
procedures, reduction in concentrations of credit,
formulation of a collection plan for previously
charged off assets and provision for a written loan
policy. The bank was also required to obtain a
new executive officer.
3. A written formal Agreement requiring elimination of
extensions of credit made in violation of 12 USC
84. Provisions requiring compliance with Truth-inLending Act (15 USC 1601) and Regulation Z (12
CFR 226). Requirements that the bank raise addi228



4.
*

5.

6.

7.

tional capital and improve liquidity. Requirements
for a new written lending policy and written investment policy. Requirement to improve the status of
criticized assets. Provision requiring the bank to
hire a new executive officer.
A written formal Agreement to eliminate problems
related to the bank's holding company and to improve classified status of loans and to prohibit extensions of credit to criticized borrowers. Provisions to eliminate extensions of credit made in violation of 12 USC 84. Requirements that the bank
raise additional capital and hire a new executive
officer.
A written formal Agreement to improve status of
criticized assets and adoption of written loan policy, including the requirement to eliminate extensions of credit made in violation of 12 USC 84.
Limitations on the payment of dividends. Provision
requiring the hiring of a new executive officer and
full time auditor.
A Notice of Charges and Temporary Order to
Cease and Desist from self-dealing and selfserving practices of extending credit through the
use of overdrafts. An administrative hearing before
an administrative law judge resulted in a finding
by the law judge favorable to the Office of the
Comptroller of the Currency.
A Cease and Desist Order, Notice of Charges,
and a Consent Stipulation to the Issuance of a

8.

9.

10.

11.

Cease and Desist Order requiring the improvement of inadequate management through the
hiring of an operations officer, trust officer and an
auditor. Requirements to eliminate violations of 12
USC 24, 12 CFR Part 21, 12 CFR 328.1 and 31
CFR 103.33. Requirements to eliminate collateral
exceptions, criticized status of certain loans and
establish new internal operations policies.
A written formal Agreement to eliminate selfserving concentrations of credit to a director. Provisions to improve the bank's liquidity position and
to require compliance with 12 USC 60. Requirement to remove loans from criticized status. Requirements to improve the loan portfolio by providing new written loan policies. Restrictions of outof-trade area loans. Provisions requiring conformity with 12 USC 371c.
A written formal Agreement to prohibit payment of
self-serving and self-dealing management and
consulting fees to the bank's holding company.
Provisions to require conformity with 12 USC 56,
60 and 84, and the elimination of loans from criticized status. Requirement of new written lending
and investment policies. Provisions to improve
bank's liquidity position and raise additional capital.
A written formal Agreement prohibiting selfserving and self-dealing practices, prohibitions of
financial transactions with certain persons and
corporations, elimination of violations of 12 USC
84, 375a and 1829(b), 12 CFR 23, 221, 1134 and
7.2120, and 31 CFR 103.33. Provision requiring
the hiring of a new executive officer and loan officer. Provision to improve the condition of the loan
portfolio by prohibiting extensions of credit to criticized borrowers, reducing concentrations of
credit, and adopting a written program improving
internal operations and lending policies. Requirement of audit by outside auditing firm. Requirement of additional capital and prohibitions on paying dividends.
A written formal Agreement eliminating extensions
of credit in violation of 12 USC 84. Requirements
to improve the bank's liquidity position and improve the capital base. Requirement that the bank
improve the status of all criticized loans by
correcting collateral imperfections, reducing loan
delinquencies and obtaining current and satisfactory credit information. Requirements that the bank
develop new written lending and investment policies. Requirement that the bank hire a new executive officer.

12. A formal written Agreement to increase the bank's
capital to protect the bank from potential loss from
concentrations of investments.
13. A letter Agreement eliminating the upstreaming of
funds and use of the bank's correspondent accounts for the benefit of the bank's holding company.
14. A written formal Agreement directed specifically at
eliminating violations of consumer laws, in particu


lar violations of the Truth-in-Lending Act (15 USC
1601) and Regulation Z (12 CFR 226). Requirement that the bank obtain current and satisfactory
credit information from certain borrowers.
15. A written formal Agreement to limit management
fees and extensions of credit to the bank's holding
company and to eliminate self-dealing practices
reflected in violations of 12 USC 56, 60, 84 and
371c. Requirements that the bank develop written
investment and collection policies. Requirement
that the bank improve the status of certain loans
by obtaining current and satisfactory credit information. Requirement that the bank increase its
capital.
16. A written formal Agreement eliminating selfserving and self-dealing by controlling shareholders and elimination of violations of 12 USC
371c and 375a. Requirement that the bank eliminate violations of the Truth-in-Lending Act (15
USC 1601) and Regulation Z (12 CFR 226). A restriction of extensions of credit to certain directors,
other persons and their increases. A requirement
that the bank recoup certain expenses and review
officers' salaries and bonuses. Requirements that
the bank improve its operations by hiring an independent auditing firm and developing written lending policies.
17. A written formal Agreement eliminating selfdealing and requiring the hiring of a new management team. Requirement that the bank improve
the status of criticized loans by developing new
written lending policies, obtaining current and
satisfactory credit information, and reducing concentrations of credit. Requirement that violations
of 12 USC 84 be eliminated. Requirements that
the bank maintain a certain liquidity position, improve its capital base and adjust its loan valuation
reserve. Requirement that the bank improve its internal controls and audit procedures.
18. A written formal Agreement eliminating violations
of 12 USC 84. Requirements that the bank improve the status of criticized loans by hiring a new
lending officer, implementing lending and collection policies, obtaining current and satisfactory
credit information, and correcting collateral imperfections. Requirements that the bank improve its
liquidity and capital base.
19. A written formal Agreement eliminating selfdealing as reflected in violations of 12 USC 84 and
375a, and correcting irregularities in the bank's
trust department. Requirements that the bank improve the status of criticized loans by obtaining
current satisfactory credit information. Requirement that the bank implement an asset and liability management program.
20. A written formal Agreement to eliminate selfdealing by majority owners by prohibiting extensions of credit to certain individuals and corporations.
21. A Notice of Charges, Permanent Order to Cease
and Desist and a Consent Stipulation to the Is229

22.

23.

24.

25.

26.

27.

230

suance of a Cease and Desist Order to eliminate
self-dealing practices as reflected in violations of
12 USC 84, 371a, 375a and 1829b. A requirement
to eliminate large lines and concentrations of
credit to controlling individuals and their interests.
A Board of Director's resolution requiring an extensive evaluation of certain officers' salaries,
bonuses and expenses. A provision requiring the
hiring of a new executive officer. A provision requiring the disposal of certain real estate. Requirements that the bank improve its liquidity and capital positions. Requirement that the bank improve
the status of criticized loans by obtaining current
and satisfactory credit information, and eliminating
collateral imperfections. Requirement of complete
audit.
A written formal Agreement to eliminate the selfserving payment of management fees to the
bank's holding company and a limitation of extension of credit to the bank's affiliates. Requirements
to eliminate violations of 12 USC 84 and 371c, the
Truth-in-Lending Act (15 USC 1601), Regulation Z
(12 CFR 226) and Regulation U (12 CFR 221). A
requirement that the bank hire a new management
team. Requirement that the status of criticized assets be improved through the implementation of
new written lending and collection policies, maintenance of current and satisfactory credit information and elimination of collateral imperfections. Requirements that the bank improve its capital and
liquidity position and improve its earnings.
A written formal Agreement to eliminate selfdealing loans to certain directors and former
directors. Requirement that violations of 12 USC
84 be eliminated. Requirements to improve the
status of criticized loans through hiring a new senior lending officer, implementing new written
lending and collection policies, and obtaining current and satisfactory credit information. Requirement that the bank improve its capital position.
Temporary Order to Cease and Desist and a Notice of Charges to prevent extensions of credit to
certain criticized borrowers. A requirement
eliminating violations of the Truth-in-Lending Act
(15 USC 1601), Regulation Z (12 CFR 226), Regulation Q (12 CFR 217) and 12 CFR 103.33. An administrative hearing is pending.
A board of directors' Resolution requiring the elimination of violations of law, improvement of the
bank's internal controls, the filing of adequate
credit information on all loans, and the planning of
a program of growth for the bank.
An Order to Cease and Desist, a Notice of
Charges and a Stipulation and Consent to the Issuance of the Order eliminating self-dealing extensions of credit in violation of 12 USC 84 and 375a.
Requirement eliminating violations of the Truth-inLending Act (15 USC 1601), Regulation Z (12 CFR
226), and Regulation U (12 CFR 221). Requirement for the improvement of the status of criticized
assets through implementing new written lending




28.

29.

30.

31.

32.

33.

policies, obtaining current and satisfactory credit
information, eliminating collateral exceptions, and
extending credit only within the trade area of the
bank. Requirement that the bank increase its capital base, limit dividends, and review officers' salaries and bonuses. A requirement for the hiring of a
new executive officer.
Board of directors' Resolution requiring compliance with the reporting requirements of 12 USC
161. The bank, on two occasions, was assessed
civil monetary penalties totalling $12,300 pursuant
to 12 USC 164 for failure to file timely call reports.
The resolution required the directors to personally
reimburse the bank for the penalty.
A written formal Agreement requiring the hiring of
a new chief executive officer and the reviewing of
all officers' salaries and bonuses. A requirement
that: the bank secure additional capital.
A Notice of Charges and Temporary Order to
Cease and Desist to eliminate the self-dealing
practices of granting excessive salaries and
bonuses to certain officers and majority shareholders. A requirement that the bank improve its
internal controls and audit procedures. An administrative hearing before an administrative law
judge resulted in a finding by the law judge favorable to the Office of the Comptroller of the Currency.
A Notice of Charges and a Temporary Order to
Cease and Desist to eliminate the self-dealing
practices of overdrafts and loans outside the
bank's trade area. Requirements to eliminate violations of 12 USC 84 and 375a. Requirements to
eliminate loans from criticized status through
timely collection of past due loans and the perfection of current and satisfactory credit information.
A requirement to improve the internal controls and
audit procedures of the bank. A provision to increase the bank's capital base. An administrative
hearing is pending.
A board of directors' Resolution eliminating violations of 12 USC 84. Requirements limiting credit
extended to directors. Requirement that the bank
hire a new senior executive vice president/chief
operations officer. Requirements that the bank improve its capital base and loan valuation reserve.
Requirement that the bank improve the status of
loans through the implementation of a written loan
policy, and the review of classified assets and
past due loans.
A written formal Agreement eliminating selfdealing as reflected in violations of 12 USC 84 and
375a. Requirements to hire a new executive officer
and retain an independent auditing firm. Requirement of a program to improve the status of criticized assets through the implementation of new
written lending policies and acquisition of current
and satisfactory credit information. Requirement
that the bank- secure additional capital. Requirement that the income from the sale of insurance
be distributed only to the bank.

Failed National Banks, 1972- 1976
Date declared
insolvent

Name
Skyline National Bank
Denver, Colo.
First National Bank of Eldora
Eldora, Iowa
U.S. National Bank of San Diego
San Diego, Calif.
Franklin National Bank
New York, N.Y.
Swope Parkway National Bank
Kansas City, Mo.
American City Bank & Trust
Company, N.A.
Milwaukee, Wise.
Hamilton National Bank of
Chattanooga
Chattanooga, Tenn.
Coronado National Bank
Denver, Colo.

Mar. 26, 1973
Oct.

5, 1973

Oct. 18, 1973
Oct.

8, 1974

United States National Bank of San Diego, San Diego,
Calif.

Jan.

3, 1975

Declared insolvent: Oct. 18, 1973
Total asssets on that date: $1,265,868,000

Oct. 21,1975
Feb.

16, 1976

June 25, 1976

Declared insolvent: Mar. 26, 1973
Total assets on that date: $6,527,124
Total Assets and Deposits for 5 Years Preceding
Failure

(Dollars in thousands)
12/31/68 12/31/69 12/31/70 12/31/71 12/31/72
Chartered Dec. 29, 1971

$642
$ 48

$6,399
$5,370

Summary of facts leading to failure: Due to imprudent
lending policies the bank began to suffer significant
loan losses shortly after it was chartered. During February and March 1973, liquidity deteriorated to the extent that the bank was able to meet its obligations only
by the sale of loans. The bank was declared insolvent
on March 23, 1973, when loan losses were determined
to exceed its capital funds by $149 thousand and it
became apparent that the bank would not be able to
meet future deposit withdrawals.

First National Bank of Eldora, Eldora, Iowa

Declared Insolvent: Oct. 5, 1973
Total assets on that date: $8,071,962
Total Assets and Deposits for 5 Years Preceding
Failure

(Dollars in thousands)
Assets
Deposits

12/31/68 12/31/69 12/31/70 12/31/71 12/31/72
$4,831
$5,244
$5,384
$5,957
$8,292
4,459
4,742
4,860
5,421
7,740




Total Assets and Deposits for 5 Years Preceding
Failure

(Dollars in thousands)

Skyline National Bank, Denver, Colo.

Assets
Deposits

Summary of facts leading to failure: Self-dealing and
other irregular activities by the president involving the
payment of cash items and loans to a related company
caused the bank to sustain losses of approximately
$1.3 million, in excess of the bank's capital. When the
directorate was unable to provide the necessary additional capital, the bank was placed into receivership
and sold by the FDIC to another group of investors.

Assets
Deposits

12/31/68 12/31/69 12/31/70 12/31/71 12/31/72
$488,257 $535,762 $596,460 $737,441 $994,218
429,155 424,212 504,098 632,544 831,402

Summary of facts leading to failure: Failure of the
United States National Bank resulted from massive
fraud, perpetrated by a handful of individuals through
the use of bank credit to their corporations and other
affiliated organizations. Borrowings by those non-bank
companies were used to roll-over debt of other nonbank companies with no legitimate reduction experience. Loans ostensibly made to one corporation were
surreptiously funneled to or used for the benefit of
others. Cash flow problems of the companies precluded adherence to agreed repayment programs, necessitating an ever-increasing pyramid of debt.
Significant questionable transactions were first detected during a routine examination which commenced on June 26, 1972. The culmination of that examination led to the disclosure of two extremely large
concentrations of bank credit, the repayment of which
was highly questionable at the time. The next examination of the bank was commenced on January 8, 1973,
and reflected, in essence, a continued deterioration in
the condition of the bank, due in large part to the
credit weaknesses inherent in the large concentrations
of credit, as well as recurring violations of law.
On May 24, 1973, the Comptroller's Office issued a
Cease and Desist Order which severely curtailed the
lending activities of the bank and which called for the
removal of the bank's chairman of the board and principal shareholder. Despite those supervisory efforts,
the adverse publicity surrounding the bank and its parent holding company continued to cause a steady
drain on the bank's liquid reserves. U.S. National was
forced to borrow extensively both from other banks
and the Federal Reserve, which borrowings reached
over $80 million in early July.
A special examination of the credits comprising the
two large concentrations of credit was completed in
late August 1973. The examiner concluded at that time
that some $45 million in credits was loss and another

231

$98 million was viewed as being of doubtful collectability. After intensive review of the examiner's findings,
efforts were put in motion to effect an FDIC-assisted
sale of the bank, which was achieved on October 18,
1973.

Total Assets and Deposits for 5 Years Preceding
Failure

(Dollars in thousands)
Assets
Deposits

Franklin National Bank, New York, N.Y.

Declared insolvent: Oct. 8, 1974
Total assets on that date: $3,771,801,000
Total Assets and Deposits for 5 Years Preceding
Failure

(Dollars in millions)
Assets
Deposits

12/31/69 12/31/70 12/31/71 12/31/72 12/31/73
$4,397
$4,996
$3,489
$3,537
$2,875
2,062
2,632
2,840
3,461
3,732

Summary of facts leading to failure: During the 1960's
and early 1970's, the bank experienced rapid asset
growth funded principally by volatile short-term, ratesensitive funds. The quality of assets booked during
that period was not generally high, due in part to the
aggressively competitive market in which the bank operated. The penchant for growth had its impact on the
bank's earnings, which declined substantially during
the period 1970 to 1973. Net income from operations
for 1973 equaled $11 million, down from $24 million in
1970. Of the $11 million experienced in 1973, $7.7 million was generated from foreign exchange trading.
Government efforts to counter the most severe inflation since World War II by restricting growth in money
and credit resulted in a rapid run-up in short-term interest rates. The Federal funds rate, the rank banks
charge other banks for the use of their excess reserves, rose to an average of 12.92 percent in July
1974. The prime rate also averaged about 12 percent
during that month. That run-up in short-term rates not
only created pressure on Franklin's cost of funds, but it
also, through disintermediation, forced Franklin to acquire even greater amounts of volatile funds to finance
its operations.
Moreover, the sharp deterioration in the economy
that developed in 1974 was reflected in widespread
layoffs, rising unemployment and declining real incomes. All of those stresses were reflected in slower
loan growth and rising loan losses, which served to the
detriment of Franklin.
Franklin, with a history of marginal existence as a
New York City bank, as well as poor earnings and an
unimpressive management reputation, was simply too
weak in too many areas of its operation to withstand
the pressures exerted upon it in 1974. The final blow
came with the loss of confidence in Franklin by the
financial community.

Swope Parkway National Bank, Kansas City, Mo.

Declared insolvent: Jan. 3, 1975
Total assets on that date: $7,575,960

232




12/31/70 12/31/71 12/31/72 12/31/73 12/31/74
$9,725 $14,324 $12,188 $9,765
$7,980
8,455
13,233
11,344
9,407
7,748

Summary in facts leading to failure: Substantial loan
losses arising from the imprudent lending policies of
the bank's original management was the primary
cause of insolvency. Operating losses resulting from a
steady decline in deposits also had a negative impact
on capital. All efforts made to generate additional capital funds failed and losses resulted in insolvency.
American City Bank & Trust Co., N.A., Milwaukee,
Wise.

Declared insolvent: Oct. 21, 1975
Total assets on that date: $158,000,000
Total Assets and Deposits for 5 Years Preceding
Failure

(Dollars in thousands)
Assets
Deposits

12/31/70*12/31/71* 12/31/72 12/31/73 12/31/74
$239,809 $229,754 $188,170
200,344 181,741 145,614

* Bank converted to national charter 12 /22112. Figures from prior
years as state bank not available.

Summary of facts leading to failure: The bank's principal problem was attributable to a preoccupation with
rapid growth with concomitant disconcern for asset
quality, liability management and capital adequacy.
Desire for growth and profitability during the latter
parts of 1972 and 1973 was fulfilled through solicitation of poor quality loans to marginal borrowers. Over
70 percent of the bank's loan portfolio in September
1975 was centered in speculative real estate development and construction loans which had been affected
significantly by the escalation of building cost overruns and a general recessionary economy. Many of
the development projects were to out-of-area borrowers, intensifying the difficulties of problem credit supervision, which management proved incapable of accomplishing. The bank underwent serious crises of
confidence in both 1974 and 1975, which were further
exacerbated by the failure of its parent holding company, American Bancshares Corporation, to publish its
annual report for the fiscal year ended December 31,
1974. Further contributing to the adverse publicity surrounding the two banking companies was the April
1975 suspension of trading in the shares of the bank's
parent by the State of Wisconsin Securities Commission.
Beginning in February 1975, it became more apparent that the bank was steadily losing the confidence of
its customers and approaching a crisis point. Losses
in ACB's portfolio had steadily mounted. Between February and October 1975, the bank experienced a de-

posit run-off exceeding $35 million, coupled with an
inability to raise funds in the money market. Sustained
reliance by the bank on the purchase of Federal funds
to maintain its liquidity, and a corresponding loss of
credibility to sellers of Federal funds, resulting from
adverse published reports had, since June 1974, virtually foreclosed the bank from the Federal funds market.
During the fall of 1975, bank management engaged
in numerous discussions with bank holding companies
and individuals to try to effect a take-over by qualified
purchasers of the bank and, concomitantly, to inject
additional needed capital without FDIC assistance.
However, it increasingly became apparent that a solution short of FDIC assistance could not be accomplished because of the massive problems in the bank.
The Marine National Exchange Bank of Milwaukee purchased certain assets and assumed certain liabilities
of the insolvent institution from the FDIC acting as receiver.

The Hamilton National Bank of Chattanooga,
Chattanooga, Tenn.

Declared insolvent: Feb. 16, 1976
Total assets on that date: $441,267,000
Total Assets and Deposits for 5 Years Preceding
Failure

(Dollars in thousands)
Assets
Deposits

12/31/71 12/31/72 12/31/73 12/31/74 12/31/75
$360,033 $414,074 $464,781 $551,074 $476,073
298,691 336,593 372,892 448,194 408,004

Summary of facts leading to failure: Hamilton National
Bank was chartered by the Comptroller's Office in
1905. As of December 31, 1975, Hamilton National
Bank ranked as the largest of the seven banks located
in Chattanooga, Tenn.
In 1969, Hamilton National Bank became a subsidiary of Hamilton Bancshares, Inc., a registered multibank holding company. The bank and the holding
company had been closely associated since 1930 because of common ownership. Hamilton National Bank
was the largest of the 18 banks operated by the holding company in Tennessee and Georgia. The holding
company also had several non-banking subsidiaries
which were engaged in real estate, data processing,
mortgage banking, loan servicing, life insurance and
factoring. Those subsidiaries were formed between
1971 and 1974. The principal non-bank subsidiary,
Hamilton Mortgage Corporation, was located in Atlanta, Ga.
An examination of Hamilton National Bank begun on
September 30, 1974, and continuing into November
1974, revealed substantial asset difficulties. The examiner criticized the creditworthiness of loans and other
assets amounting to 154 percent of gross capital
funds. The poor condition of Hamilton National Bank
was directly attributable to the large number of real estate loans originated or acquired from Hamilton Mort-




gage Corporation, a wholly-owned subsidiary of Hamilton Bancshares, Inc. Many of those loans represented
100 percent financing of acquisition, development and
construction costs for large real estate projects. Most
borrowers were highly leveraged and lacked the ability
to complete or sell the projects undertaken.
The Comptroller of the Currency entered into an
agreement with the board of directors of the bank on
December 18, 1974, restricting extensions of credit or
loan participations between Hamilton National Bank
and the holding company and its affiliates and subsidiaries. Successive examinations and visitations revealed further deterioration. The September 29, 1975
examination revealed that assets acquired from Hamilton Mortgage Corporation aggregated 87 percent of
total assets whose creditworthiness was questioned
and 243 percent of gross capital funds. Non-accrual
loans and non-income producing real estate exceeded
$77 million. Almost 27 percent of the loan portfolio was
past due. Of those delinquent loans, 97 percent had
been acquired from Hamilton Mortgage Corporation.
During the first 11 months of 1975, the bank had a net
operating loss of $8.2 million, principally as a result of
heavy loan losses and non-accrual assets.
During the period between January 31, 1975 and
January 31, 1976, the bank underwent considerable
retrenchment and suffered an absolute deposit decline
of $76.9 million as well as a decline in borrowings of
$15.7 million. Those reductions, which aggregated
$92.6 million, were met primarily through the liquidation of assets, including cash and due from banks, securities and Federal funds. That steady drain on liquid
assets of the bank was, in the end, to cause its demise.
At the end of 1975, it became apparent that, without
a massive capital infusion, Hamilton National Bank
would be unable to sustain operations over the time
period necessary to work out its real estate and other
problems. Without such assistance, the bank and
Hamilton Mortgage Corporation could not fund out the
real estate projects or otherwise complete them. In
view of the extended litigation on many of the properties, their location in economically depressed areas
and the inactive and incomplete nature of some of the
developments, it was the OCC's opinion that the liquidating value of the bank's portfolio of Hamilton
Mortgage Corporation-related loans and foreclosed
properties was much less than the value shown on the
bank's books and records. In early February 1976, the
Comptroller's Office estimated that, on a liquidating
basis, the loss inherent in the bank's $73 million of
Hamilton Mortgage Corporation-related assets and the
securities portfolio would exceed the gross capital
funds of approximately $28.5 million shown on the
bank's books as of January 31, 1976.
The Comptroller decided at that time that, unless the
bank or its parent holding company was able to raise
the needed capital immediately, the bank could no
longer be viewed as a going concern. There were no
available sources of capital to rescue the bank as an
entity and place it on its feet. Hamilton Bancshares,
Inc., was in an extended financial condition at the time
233

and was incapable of raising sufficient funds to recapitalize the bank. No other banking company or other
private group had shown any interest in assuming the
bank without considerable federal assistance. After
months of negotiations, the FDIC had been unable to
agree with major lenders of the holding company (a
group of banks) on a plan calling for financial assistance to Hamilton National Bank by the FDIC pursuant
to 12 USC 1823 (c).
In early February 1976, the bank faced a severe liquidity crisis. Up until that time the bank had been
able to meet deposit withdrawals through the liquidation of assets. It could, however, no longer continue to
do so. Hamilton Mortgage Corporation-related mortgages and real estate were steadily becoming a
higher and higher proportion of the asset structure of
the bank and could not be sold to meet the demands
of the depositors and other creditors. Additionally, the
securities portfolio of $82 million was largely pledged
or sold under agreements to repurchase, leaving little
margin for liquidity purposes. Finally, the adverse publicity surrounding the bank seriously hindered its ability
to borrow from private sources to meet excessive deposit withdrawals.
On February 16, 1976, having become satisfied that
Hamilton National Bank was insolvent, the Comptroller
appointed the FDIC as receiver.

Coronado National Bank, Denver, Colo.

Declared insolvent: June 25, 1976
Total assets on that date: $2,612,693
Total Assets and Deposits for 5 Years Preceding
Failure

(Dollars in thousands)
Assets
Deposits

12/31/71 12/31/72 12/31/73 12/31/74 12/31/75
Chartered Mar. 31, 1973
$2,905
$3,393
$4,127
2,364
2,876
3,895

Summary of facts leading to failure: The bank opened
March 31, 1973, for the purpose of serving the
Mexican-American community in Denver, and was plagued with both operating and loan losses from inception. The problems resulted mainly from a lack of effective and experienced management in the bank. The
bank's first two chief executive officers exercised extremely liberal policies and were lax in supervision of
bank operations. The third president resigned in February 1975 at the request of the Comptroller's Office.
His replacement, although considered capable, was
unable to stem the flow of losses. Operating and loan
losses had depleted capital funds to a deficit $9,630
as of April 21, with continued monthly operating losses
of $7,000. The bank was declared insolvent when it
became apparent that the board of directors could not
succeed in recapitalization or reorganization of the
bank.

Remarks of Robert R. Bench, Associate Deputy Comptroller of the Currency for
International Banking, before the 55th Annual Meeting of the Bankers' Association
for Foreign Trade, Cerromar Beach, Puerto Rico, May 2, 1977
"Country Risk Analysis and Classification"
It is a pleasure to visit with you to discuss the manner in which national bank examiners evaluate foreign
public sector loans.
There is a great deal of misunderstanding in the industry about the Comptroller's evaluation procedures.
Today I shall explain the bankground of the Office of
the Comptroller of the Currency (OCC) Foreign Public
Sector Credit Review Committee, that Committee's
evaluation process, and the issues arising from those
evaluations.
The Bankers' Association for Foreign Trade also has
requested that I perform a collateral duty and express
any concerns the Comptroller's Office may have about
U.S. bank claims on foreign borrowers, particularly
non-oil, less-developed countries.
Multinational bank supervision is the business of the
Comptroller of the Currency. The OCC has about 150
national bank examiners trained in international examining and, since 1967, annually has performed examinations in more than 20 countries. We have sent
abroad an average of 116 examiners annually since
1972. During the fall of that year, the Comptroller
opened a London branch where six national bank ex234




aminers are assigned to continually examine the London branches of 23 national banks.
National bank examiners are responsible for evaluating the quality of loan portfolios as part of their overall
examinations of national banks. Traditionally, the examiner in charge of a particular examination has been
the deciding OCC official in the evaluation of loans
made by the bank under examination. That OCC policy of examiner autonomy reflects the basic principle
that loan evaluation is a judgment, based on the
evaluator's knowledge of technical credit analysis and
application of subjective experience factors.
The increase in international lending by national
banks during the late 1960's and early 1970's forced
the OCC to review its policy of examiner autonomy as
applied to foreign public sector loans. Those loans
contain a large number of complex credit considerations with which OCC examiners are variously skilled
or experienced. Furthermore, such loans are often syndicated among a wide number of national banks which
use different quality date to support granting the loans.
That diversity of examiners' abilities to evaluate foreign
public sector loans and the diversity of credit information developed by the banks, led OCC examiners to

evaluate the same loan dissimilarly in the various participant banks. The banking industry, properly, complained about that dissimilar treatment and the OCC
shared the bankers' concern. The OCC sought uniform
evaluations of the same loan for all national banks and,
further, believed that evaluations should be current
and accurate. The OCC also wanted its evaluations to
remain a part of the traditional bank examination process.
Aside from improving the procedural aspects of the
evaluation process, the OCC needed to strengthen its
supervision because several banks were observed to
be lending abroad without adequate information. Indeed, there were instances in which well informed institutions were recognizing certain problem borrowers
while, concurrently, less well informed banks were
lending to them.
In July 1974, the OCC modified its traditional policy
of examiner autonomy by placing the authority to evaluate foreign public sector loans in a committee comprised of the OCC's most experienced international examiners from Washington, New York, Chicago and San
Francisco. They continually examine, both in the U.S.
and overseas, our country's major multinational banks.
Through their examinations, those examiners have developed the skills necessary to evaluate foreign public
sector loans. They compile a great deal of information
from the multinational banks' country files and from
discussion with the senior international lending officers
of those banks. Those major banks' international portfolios generally contain every type of foreign public
sector loan, therefore, the situations which the committee members evaluate through their examinations of
them are applicable to the examination of all national
banks that lend internationally.
The OCC recognizes that countries do not disappear as corporate borrowers may, and that, traditionally, foreign public sector loans in national banks have
an excellent record of ultimate repayment. The OCC
also recognizes, however, that, historically, national
banks have not held the increased levels of foreign
public sector loans which they hold today. Furthermore, today's portfolios contain credits to a group of
fresh borrowers who are still establishing a repayment
record. The OCC has a supervisory responsibility to
evaluate those loans, not only for ultimate loss potential, but even more so for early detection of performance difficulties which can result in illiquid assets in
the portfolios of national banks.
The purpose of the Committee, therefore, is to evaluate the loans granted by national banks to the public
sector of foreign countries. The borrowers generally
are governments, central banks, government agencies
and quasi-governmental entities. The Committee's
evaluations result in those loans being placed into one
of five categories. The Committee disseminates its decisions to all national bank examiners who then apply
them uniformly during their examinations.
Those categories relate to the liquidity and soundness of the bank asset. They are:
1. Pass — The loan is repaying as structured,
and analysis of the loan indicates no forseeable



interruption in regular payments or eventual payout;
2. Especially Mentioned — The loan is repaying
as structured, but analysis indicates factual inherent conditions which could lead to an interruption
of regular payments;
3. Substandard — Orderly repayment is jeopardized or has been interrupted, resulting in a slow
paying or "frozen" loan, ultimate payment in full is
expected;
4. Doubtful — There is no performance and full
repayment appears tenuous;
5. Loss — There is no performance and no repayment is expected during the near future, the
loan is not bankable, requiring its removal from
the bank's assets, this classification does not
mean that principal never will be recovered.
The Committee's evaluation procedures represent
an extension of the traditional OCC examination process. The three Committee examiners from New York,
Chicago and San Francisco, independently of each
other, continually conduct examinations of the major
national banks in those cities. The national bank examiners who are not Committee members have access to
the Committee process. Occasionally, examiners outside of New York, San Francisco and Chicago receive,
through their examinations of regional money center
banks, information relevant to the Committee process.
Those examiners document their findings and forward
their information to OCC headquarters for use and research by the Committee.
The Committee's examiners begin their examinations of foreign public sector loans by determining the
amounts of each borrower's liabilities due the bank under examination. The examiners also determine the
structure of the loans, e.g., whether the loans are payable in the borrower's local currency or in an external
currency, whether the loans are short or long term, or
whether the loans are secured or unsecured. The examiners then review the borrowers' financial information held by the bank as support for making the loans.
The examiners next analyze the financial condition of
the borrower in relation to the loans outstanding. Finally, the examiners discuss their analysis with the
bank's lending officers in order to receive information
about the loans which may not yet be on file and in
order to receive the officers' opinions about the borrowers' ability to pay those loans.
The Committee members meet quarterly in Washington to discuss their individual findings from examinations conducted during the quarter. The members also
review data in OCC headquarters' files including data
available from other U.S. government sources. The
members then evaluate, as a committee, the foreign
public sector loans repayable in a currency external to
that of the borrower and assess whether those borrowers have, or likely will have, the external currency
available to pay the national bank loans when payments are due.
The Committee weighs the myriad social, political
and economic factors which influence the borrowers'
235

cash flows for external debt service. Generally, the
Committee first looks to external economic information,
e.g., balance of payments trends over the last few
years, the expected results for the next 12 months (the
short term), and the external debt structure as well as
the service requirements for the same period. The
Committee's evaluations of loans maturing within 12
months are influenced by such factors as available International Monetary Fund facilities, reserve levels, official and private loan commitments, foreign investment
trends and the attitude among bankers toward further
lending. Generally, if a borrower appears to have the
capacity to repay short term loans and appears willing
to honor the indebtedness, the Committee will "pass"
the loan. Should a borrower appear to face a severe
short term shortage of foreign exchange and lack
availability of credit, the Committee may "especially
mention" the short term loans. The Committee normally
does not criticize short term trade credits unless they
become delinquent or require refinancing.
The Committee's evaluations of medium and long
term loans generally stress that the risk in these loans
increases as the maturities lengthen. This risk-maturity
relationship arises from the inherent uncertainties in
lending over an extended period, e.g., 10 years. Those
uncertainties are the many changes which can occur
in the social, political and economic fabric of the borrowers and which directly affect the borrowers' capacities to repay their external currency loans.
Significant to the Committee are the social-political
effects of the borrowers' economic trends. Economic
projections for many foreign public sector borrowers
are based on assumptions such as world prices for
expanded exports, restrictions on import expenditures,
future levels of foreign investment and expected bilateral assistance. Those assumptions are always influenced by environmental factors, some of which are
beyond the control of the lender or the borrower.
Global commodity prices react to varying demand and
supply factors. Imports essential to political and social
stability can be difficult to restrict. Bilateral assistance
and direct investment flows respond to political events.
It is uncertainties such as those which concern the
Committee. The Committee evaluates the borrowers'
present financial condition and the trends in the borrowers' external currency flows. Generally, the Committee does not criticize long term loans which are
paying as agreed and which show positive trends for
continued performance. Borrowers that indicate marginal or decreasing availability of foreign exchange for
debt service might be "especially mentioned" by the
Committee, depending on the degree of uncertainty
surrounding future social, political and economic
trends affecting the foreign exchange flows. The Committee classifies more severely loans which are not
meeting scheduled payments and/or which show
trends indicating protracted repayment difficulties. It is
emphasized that the Committee evaluations do not apply to foreign public sector loans denominated in the
currency of the country where the borrower is located.
The Committee evaluations also do not apply directly
to foreign private sector loans, unless the private bor236




rowers' debt service is heavily reliant on central government support. Otherwise, loans to the foreign private sector are evaluated independently by national
bank examiners during their examinations.
The Committee's criticisms arise only when overwhelming factual information is available. There have
been observations that when criticisms do arise the result is "unfortunate" because the borrower receives
criticism at a time when it is in a highly sensitive financial and political position trying to maintain its creditworthiness. The concerns of the Comptroller of the
Currency are the banks under its supervision; the concerns of national bank directors are the loan assets
under their supervision. It is "unfortunate" that borrowers fail to maintain their creditworthiness. Indeed, international bankers have conceded to us that it has
been "fortunate" for bankers and borrowers that the
OCC's loan criticisms have reintroduced credit principles in the face of which borrowers institute disciplinary action to improve their creditworthiness.
Commercial banks require a more conservative approach to loan repayment than do government-togovernment credit transactions. Commercial banks
analyze country risk to determine which countries may
experience repayment difficulties over the life of the
loans outstanding. Such determinations are made by
analyzing the key variables which affect debt performance, not the least of which are social-political factors in relation to a country's economic difficulties.
Commercial banks believe that reserve levels and a
country's cash flow composition are significant, traditional concepts which must receive close scrutiny. The
OCC and the national banks are taking a more discriminating approach to foreign public sector loans.
The OCC's Committee evaluations do not block further credit to countries and do not represent a "blacklisting" or "redlining" of a country. The evaluations represent judgments of the quality of national bank loan
portfolios and the multinational banks recognize the
Committee criticisms as only one source of objective
opinion. Generally, the OCC's criticisms are consistent
with the loan appraisals performed by the multinational
banks which maintain sizeable and sophisticated economic staffs as well as networks of reliable overseas
public and private sector contacts.
The Office of the Comptroller of the Currency has
never directed any national bank to cease lending in
any country. The major multinational banks allocate
and structure their foreign public sector loans based
on their own in-house classifications of the borrowers.
It is the civil responsibility of bank directors to determine a bank's overall goals as well as to allocate bank
capital and resources accordingly. Bank directors
have been exercising that responsibility and the result
has been more conservative credit facilities for certain
borrowers.
The OCC is disappointed that it becomes the scapegoat when a bank decides to take a more conservative
approach with a borrower. Too often, bankers tell borrowers that the credit lines have been reduced by order of the Comptroller of the Currency. In far too many
cases, bankers say that about loans which the OCC

Committee has never criticized. The OCC also is disappointed, and concerned, with the number of loan officers from banks who telephone OCC staff asking
whether they should or should not lend to a particular
borrower.
It is the policy of the Comptroller of the Currency that
lending decisions be left to the bankers who are qualified professional lenders. The OCC must not become
a credit allocation agency or an agency which dictates
that banks cease or restrict lending to certain borrowers. For those reasons, the OCC emphasizes that its
Foreign Public Sector Credit Review Committee is an
in-house bank examination vehicle which does not distribute its criticisms nationwide, but rather communicates those criticisms only to bankers during the normal course of a regular bank examination.
It is the policy of the OCC that the Committee evaluations be applied as accurately as possible by national bank examiners during their examinations. The
Committee carefully distinguishes the various facilities
which national banks grant to borrowers, i.e., trade
credits, letters of credit, long-term loans, loans in external or foreign currency, and loans guaranteed by
U.S. government agencies. National bank examiners
are expected to make these distinctions in their reports
of examination.
The OCC examination process results in the national

bank examiner submitting to the Comptroller, as required by 12 USC 481, a report of examination containing the examiner's findings about the liquidity,
soundness and legality of the bank's activities. The
Comptroller sends a copy of the report to the bank
directors to assist them in supervising the affairs of the
bank. That process has been in effect for 113 years.
A recent survey of national banks conducted jointly
by national bank examiners and Federal Reserve staff
sought opinions about the OCC method of evaluating
foreign public sector loans. Practically all of the respondents reported that the evaluations by national
bank examiners were warranted and fair. A few
bankers indicated, however, that they would prefer the
examiners' loan criticisms not to appear under traditional loan categories in the reports of examination, because directors became concerned.
Bank directors have a civil responsibility to manage
a bank's affairs. Directors are responsible to employees, customers, shareholders and bank regulators.
The directors are responsible for bankwide objectives,
plans, policies, organization, management succession
and allocation of resources. Consequently, directors
increasingly are taking steps to know what is going on
in your bank. They understand that, unlike countries,
banks can disappear.

Statement of Robert Bloom, Acting Comptroller of the Currency, before the Senate
Committee on Banking, Housing and Urban Affairs, Washington, D.C., May 24, 1977
I appreciate this opportunity to present my views on S.
71, S. 73, S. 895 and S. 1433. Those bills represent
significant banking legislative proposals and warrant
careful attention. Given the limitations of time, I would
like to concentrate my oral testimony this morning on
section 8 of S. 71 because I feel strongly that the proposed changes in the budgetary system of the Comptroller and FDIC contained in that section would substantially and adversely affect the way we regulate and
supervise commercial banks in this country. I will discuss briefly our views on the other legislative proposals before the Committee today.
Each of the federal banking agencies (Federal Reserve, FDIC, and Comptroller) is now assured, by Congress, of a source of funds independent from appropriations. The agencies have not been required to
seek the approval of the appropriations committees in
allocating those funds for the supervision and regulation of the nation's banking and monetary systems.
Section 8 of S. 71 would subject the budgets of two of
the banking agencies (FDIC and Comptroller) to a
modified Congressional review akin to the process
used for appropriated funds. Specifically, the bill, although stopping short of changing the mechanism for
raising funds, provides that the Comptroller's
" . . . expenditures . . . during any fiscal year beginning
September 30, 1977, may not exceed the limitation
provided for such expenditures for that year in an appropriation Act."




The Office of the Comptroller of the Currency
strongly opposes that legislation for the following reasons:
1. Other, more suitable and completely adequate
mechanisms exist for Congressional oversight of
the budgetary decisions of the agencies;
2. The system contemplated for Congressional
approval of expenditures threatens the flexibility
now possessed by the agencies to respond
quickly and without prior publicity to problem situations; and
3. The legislation could create a situation wherein
private banking and other interests might attempt
to subject important elements of the Federal bank
regulatory system to pressures inconsistent with
the sensitive mission of those agencies.
I would like to summarize the essential considerations which underlie these points.
Budgetary Oversight
Present mechanisms for oversight of expenditures
by OCC are fully adequate. They include (1) a rigorous, computer-assisted, internal budget review system
based on cost center responsibility accounting principles and administered by a budget review committee
which includes two representatives of the Secretary of
the Treasury; (2) annual audits of our income and expenditures by a major national accounting firm and
237

publication of the resulting report; (3) periodic performance audits by the Government Accounting Office
(GAO) authorized either by agreements such as those
recently used or by legislation such as H.R. 4469,
which we have recently supported; and (4) regular appearances of agency representatives before House
and Senate banking committees. Such approaches as
the GAO performance audit, in particular, offer a
sound means for Congress to conduct a thorough, objective review of the management decisions of the
banking agencies.
Flexibility of Present Financing

The bank regulatory agencies must, on occasion,
commit unusually large resources in the contemplation
of unforeseen emergency situations — most of which
can be satisfactorily resolved by discreet and careful
handling. Those financing needs are affected by
events of the marketplace beyond the agencies' control. We have recently come through the most severe
recession since the Depression of the 1930's. Some
banks did not survive in that environment. Because of
the unique method of financing of the banking agencies, however, extraordinary resources could be devoted, with a short lead time, to intensified supervision
and rescue plans for troubled institutions. Corps of examiners and support personnel were transferred from
one part of the country to another notwithstanding the
impact upon projected budgets. As a result, public
confidence in the banking system remains intact.
If the agencies had been forced to go to Congress
for authority to expend funds in these unforeseen situations, significantly different consequences could have
occurred. First, premature disclosure in appropriations
hearings of contemplated problems could have led to
runs on the banks and the impossibility of salvaging
resources. In effect, staff projections by the bank regulatory agencies would become self-fulfilling prophecies. In addition, because of the procedures and delays involved in making supplemental appropriations
requests, timely action might not have been possible
at all. As it was, long, discreet, sometimes costly efforts by the banking agencies permitted rehabilitations
and other orderly solutions. Even the failure of a few
large institutions did not result in a dollar of depositor
losses.
Bank examination is an extraordinarily peopleintensive function. The 2,700 national bank examiners
who make up our field forces daily critique the performance of management of the nation's largest and
most sophisticated banks. Traditionally, and by any
measure, bank examiners have performed that role
well. However, the 60's and 70's have seen an enormous growth in the complexity and sophistication of
our nation's financial institutions. Examination procedures and skills have not always kept pace. In recognition of the need to eliminate such lags, the
Comptroller's Office, in 1974, commissioned the management consulting firm of Haskins & Sells to conduct
a thorough review of Office procedures and practices.
After a year-long study, the firm recommended revolutionary revisions of our examination procedures and
238



other fundamental changes designed to ensure that
the quality of our examination keeps pace with the
complexity of the institutions we regulate. Those
improved procedures, which have received favorable
comment from the GAO in its study of our Office, require examiners with highly-developed analytical and
communications skills to deal directly with the highest
levels of bank'management of multibillion dollar banks.
The study also concluded that maintaining an examination force with such capabilities can be done effectively only if the Office undertakes recruitment, training
and compensation programs equal to the task. Such
programs have been designed and approved by the
Secretary of the Treasury.
The experience of state banking departments
operating on appropriated funds or under other fiscal
approval of the legislature is not reassuring. A study
by the Conference of State Bank Supervisors concluded that 29 of 46 state banking departments which
operate on appropriated funds or which must receive
fiscal approval from the legislature conclude that their
budgets are inadequate to support professional and
effective examination programs. We believe that the
demonstrated ability of the federal banking agencies
to maintain a group of experienced, competent professionals is directly related to present budgetary flexibility. The present system has worked well. It should not
be changed.
Safeguarding the Bank Regulatory System from Pressure

The federal bank regulatory agencies have functions
which are to some extent similar, and to some extent
unique. All the agencies have bank examination and
enforcement responsibilities. However, the Comptroller
is the sole franchiser for federally chartered banking
institutions, the FDIC is the insurer on which depositors
rely in the event of insolvency, and the Federal Reserve conducts monetary policy, licenses foreign offices and regulates holding companies. That is a delicately balanced structure, the components of which
must work together to work at all. Under the present
structure, both the agencies and the Congress are well
insulated against possibly improper constituent demands.
All three agencies share the sensitive bank examination function and, thus, possess unique access to private financial details on millions of Americans that are
contained in the loan files of the nation's banks. Likewise, each of the agencies possesses extremely sensitive, and frequently controversial, enforcement responsibilities, including the power to issue and enforce
cease and desist orders and to initiate the removal of
officers and directors. Almost always, such individuals
are among the most important leaders of their communities.
Similarly, OCC grants valuable franchises for new
national banks and has responsibility for approving or
denying applications for new branches, mergers and
national bank security issues. Many, if not most, such
matters involve serious financial consequences to the
public and interested parties, and they are, therefore,

often contested. We are now able to make such decisions on the basis of professional, objective judgment,
without consideration of possible future budgetary impact.
It is precisely a concern for maintaining the objectivity of the banking agencies in those matters that has
prompted Congress to adopt various measures designed to ensure the independence of the agencies.
Senator Burnet R. Maybank, as Chairman of the Senate Banking and Currency Committee, voiced the following concern, in 1950, opposing reorganization proposals which could conceivably have eroded the
Comptroller's independence in franchising decisions:
The power of life and death over about 5,000
banks . . . would pass into other less independent
hands. Likewise would pass the general supervision and examination of the banks with power to
control and shape credit policies which could lead
to political domination and control of the money
and credit of this country . . . . Political considerations are often demanding and the urge to exercise power hard to resist.
Similar concerns were expressed in 1947 by Senator
Vandenberg in the course of a bipartisan effort to prevent requiring the FDIC to submit a budget annually to
the Bureau of the Budget. (94 Cong. Record 10121)
(1947). In the absence of the clearest evidence that
other mechanisms for Congressional oversight of the
operations of the banking agencies are insufficient, the
objectivity resulting from the banking agencies not being subject to the appropriations process should not
be abandoned.
Strengthening the Enforcement Powers of the Banking
Agencies

In the last Congress, this Office, together with the
other banking agencies, proposed a strengthening of
the agencies' supervisory authority over financial institutions and their affiliates. Those enforcement provisions, which were embodied in S. 2304 (94th Congress), were not enacted.
We again support legislation improving our enforcement powers. We particularly endorse Titles II and IV
of the expanded substitute bill to S. 71 proposed to the
Congress by the Federal Reserve Board, with some
perfecting amendments of our own. Those amendments, detailed below, have been drafted after consultation with the staffs of the Federal Reserve Board and
the FDIC.
We recommend incorporating civil money penalty
assessment procedures in the model form recommended by the Administrative Conference of the
United States. Unlike the procedure in S. 71 and the
original Board proposal, which would allow a bank or
person charged with a violation and assessed a penalty by a Federal banking agency to challenge that determination in a trial de novo in a U.S. district court,
this proposal would provide for a formal administrative
hearing at the request of the bank or person charged.
The determination of the Administrative Law Judge at
the hearing then would be subject to judicial review,




albeit more limited in scope than a trial de novo, in the
U.S. Court of Appeals. We believe that this type of administrative assessment procedure would facilitate the
use of the civil money penalties remedy and, thereby,
make it much more effective than it otherwise would be
were the agency required to undertake protracted litigation in the face of any challenge, no matter how
frivolous.
We recommend that the imposition of civil money
penalties be made applicable to violations of the National Bank Act in addition to violations of the Federal
Reserve Act, the Bank Holding Company Act and the
Federal Deposit Insurance Act. The deterrent effect of
those penalties should be expanded to include some
of the most important statutes which govern national
banks, including 12 USC 84 (national bank lending
limits) and 12 USC 82 (indebtedness of national
banks).
We recommend defining "felony" in connection with
section 401 (f) of the Board's proposed bill which authorizes a federal banking agency to remove or suspend officers, directors or other individuals from participating in the affairs of a bank on the ground, inter
alia, of commission of a felony involving dishonesty or
breach of trust. As some states consider a number of
crimes which would constitute felonies under federal
law, only as "high misdemeanors," we propose defining "felony" as "a crime involving dishonesty or breach
of trust and which is punishable by imprisonment for a
term exceeding 1 year under state or federal law."
We recommend a change in connection with the
anomolous situation under present law in which the
suspension of an individual is terminated upon any
disposal of an indictment, including disposal by conviction. Under current procedures, once a judgment of
conviction is rendered, the suspended individual may
participate in the affairs of the bank unless or until the
appropriate banking agency is notified of the conviction and issues a second order permanently removing
the individual. To correct that problem, we suggest an
amendment giving the individual the opportunity to appear at a hearing before the appropriate agency on
the issue of suspension or removal, while, at the same
time, obviating the necessity of issuing a second order
permanently removing a suspended individual upon
conviction.
Finally, we recommend that our Office be permitted
to schedule examinations of national banks in the most
appropriate intervals, without the rigid requirement of
present law that examinations of national banks be
conducted twice each calendar year, with the right of
the Comptroller to waive one examination every 2
years. That revision is identical to a recommendation
(p. 4-9) made in the recent General Accounting Office
report on federal supervision of state and national
banks, and would give the Comptroller the same discretion now possessed by the Federal Reserve and
the FDIC.
S. 73 — Prohibition of Management Interlocks

Turning to S. 73, we believe that the limited prohibition against interlocks among management officials of
239

depository institutions in the same Standard Metropolitan Statistical Area (SMSA), or within 50 miles of each
other, is appropriate and will help to strengthen public
confidence in the nation's financial.institutions. The bill,
wisely, provides needed flexibility by permitting the
Board to exempt interlocks which are in the public interest.
A reservation we have about the bill, and one that
can be easily remedied by a simple deletion of a subsection, is the removal from the Clayton Act of the enforcement authority of the Federal Reserve Board. We
urge that section 8(c), which makes that change, be
struck from the bill.
S. 895 — FDIC "Housekeeping" Bill

we do not have any objections. We do, however, urge
the Committee to include employees of all federal
bank regulatory agencies in section 7 of the bill which
would amend 18 USC 1114 to make it a felony to kill or
to otherwise harm or intimidate FDIC employees.
S. 1433 — Restrictions on Subsequent Activities of
Financial Regulatory Agency Officials

Finally, we urge the Committee to consider S. 1433
in the context of the President's "Ethics in Government" program. The President's proposals deal comprehensively, on a government-wide basis, with issues
of conflict of interest and in our view deal more thoroughly and equitably with the problem than does S.
1433.

In regard to S. 895, the FDIC "housekeeping" bill,

Statement of Thomas W. Taylor, Associate Deputy Comptroller for Consumer
Affairs, before the Consumer Affairs Subcommittee of the Senate Committee on
Banking, Housing and Urban Affairs, Washington, D.C., July 11, 1977
Thank you for this opportunity to present the views of
the Comptroller of the Currency on the legislative proposals which are designed to simplify and clarify the
Truth-in-Lending Act. As the agency responsible for
enforcing that Act and Federal Reserve Regulation Z
as they apply to national banks, our Office recognizes
the need for sharpening the focus of the law to improve consumer understanding of basic loan information. We commend the Committee for undertaking the
important task of perfecting this consumer legislation.
The Comptroller's Office has had considerable experience with administration of the Truth-in-Lending
Act since its enactment. The Office has recently assigned a specially trained corps of national bank examiners to conduct consumer law compliance investigations of every national bank. As part of that new program we have committed substantial resources to examining for compliance with the requirements of Truthin-Lending.
The results so far, in this particular regard, indicate
too many instances of noncompliance with key provisions of the law, impairing the ability of consumers in
some areas to shop in an informed way for credit.
However, clear breaches of legal duty can be
corrected as they are discovered through regular enforcement mechanisms. We are concerned today
about the technical noncompliance which may not impair the consumers' interest but greatly interferes with
enforcement of the Truth-in-Lending laws, efficient
bank examination and sound management of the
nation's banks. Instances of technical noncompliance
have run the gamut from failure to disclose the amount
of loan proceeds, in contravention of the statute but in
compliance with Federal Reserve Regulation Z, to inadequate disclosure of a security interest taken in
automobile insurance premiums which were ruled to
be "proceeds of the insurance policy" but not, as stated, "of the automobile."
240




A review of the litigation spawned by Truth-inLending reveals that comparatively few actions are
brought against creditors for substantive violations of
the Act. Rather, most involve issues not at all material
to the consumer's ability to evaluate and compare
credit terms. Creditors who attempt to comply scrupulously, as well as those who do not, must, unfortunately, without distinction be prepared to cope with
costly lawsuits. Such a situation is intolerable and calls
loudly for revision of the statutory requirements to accomplish a return to the original purposes of the Act.

Simplification of Disclosures
It is useful to examine the original intent of the drafters. As stated at the outset, the Truth-in-Lending Act
was meant "to assure a meaningful disclosure of credit
terms so that the consumer will be able to compare
more readily the various credit terms available . . . and
avoid the uninformed use of credit." In practice, however, events have not quite worked out that way. Some
of the information currently disclosed under Regulation
Z is of dubious value to the consumer. In exchange for
marginal utility, those disclosures have been permitted
to fuel the bulk of wasteful litigation which adds enormously to the cost of lawful compliance by creditors.
Ironically, the additional information actually may serve
to distract the consumer's attention from the core of
disclosures which are of value in shopping for credit.
It is in that light that we endorse the approach of the
staff of the Board of Governors of the Federal Reserve
System (Board), as outlined in their proposed draft of
May 24; 1977, limiting disclosure in closed-end transactions (exclusive of residential mortgages) to the
amount financed, the finance charge, the schedule
and total of payments, the annual percentage rate,
and the deferred payment price (in the case of credit
sales). However, we would expand the list of items to
include late fees, security interests, prepayment penal-

ties and rebates, as these items also are important to
comparison credit shopping.
The argument often is heard that disclosures, no
matter how meaningful, are not actually used by consumers in obtaining the most favorable credit arrangements. The Committee may consider appropriate a requirement that each core disclosure be followed by a
brief and simple explanation, as recommended by the
Board staff in the sample form attached to its proposed draft, e.g., Finance Charge (this is the amount
the credit is costing you).

Provisions Ripe for Amendment
At this point I would like to comment upon several
aspects of the law which should be reviewed as part of
any serious inquiry into Truth-in-Lending simplification.
In shopping for credit, consumers, out of necessity or
convenience, rely heavily on information conveyed
through telephone inquiries and printed and broadcast
media. Consequently, we find it disturbing that even a
cursory review of newspaper advertisements for loans,
especially in connection with real estate, reveals widespread promotion of rates other than the annual percentage rate, with the APR disclosed in fine print. Although that practice is prohibited under existing law, it
is likely to continue to frustrate the public because no
civil remedy is available for violations of the advertising
provisions of the Truth-in-Lending Act. Therefore, we
suggest that the law be amended to require that the
annual percentage rate (APR) be stated more conspicuously than any other rate in all advertising, including
responses to oral inquiries by telephone or otherwise.
Appropriate penalties for violations should be provided.
Currently, a number of charges are excludable from
the finance charge if particular conditions are met.
One of those charges, for optional insurance, is excludable if certain disclosures are made and the borrower indicates in writing that insurance is desired.
Serious questions exist as to whether those charges
really are optional, despite the fact that borrowers sign
statements to that effect. Other charges involving costs
associated with perfecting security interests are excludable from the finance charge as a matter of
course. Because they constitute a basic part of the
cost of credit, we believe that such charges should be
reflected in the finance charge at all times. Moreover,
the rules for exclusion are complex and, therefore,
lead to confusion and increasing litigation.
The right of rescission was incorporated into the law
to deal with a particular class of creditors involved in
indirect sales of goods and services, frequently solicited and consummated at the borrower's residence.
While we believe that right to be beneficial in connection with that type of transaction, we question the need
for its extension to loan transactions conducted directly between a borrower and a financial institution.
Typically, in the latter situation the borrower approaches the lender with the intent of obtaining credit.
He or she is not caught unawares or in a weak moment
and, therefore, needs no period to "cool off" or
reassess the matter. Unless evidence of abuses in di-




rect loan transactions can be produced, we would advocate restriction of rescission rights to indirect paper
and home solicitation sales only. In a related aspect,
we also believe that a considerable amount of paper is
wasted in providing a borrower with two copies of the
notice of rescission rights when a single copy would
serve the same purpose,
With respect to the avoidance of civil liability, section
130(b) of the Truth-in-Lending Act allows the creditor
to notify the borrower and adjust the account within 15
days of discovering an error. That time period may be
unrealistically brief for many large creditors and for
problems involving a large class of borrowers. The
Board staff has proposed that the law be amended to
allow notification of borrowers within 30 days of discovery of an error. We support that proposal. Such a
modification would not jeopardize consumer rights but
would help to curtail court actions on failure to meet
technical deadlines.
We also support the Board's proposal to clarify the
meanings of "notice" and "discovery" with regard to
the civil liability provisions. Those amendments will
avoid the present uncertainty concerning application
of the statutory language in cases where problems are
discovered during the course of examinations conducted by regulatory agencies.
Under the current law, tolerances allowed in the
quoting of the annual percentage rate are confusing
and unfair. Section 107(c) of the Truth-in-Lending Act
permits rounding of the disclosed APR to the nearest
one-quarter of 1 percent. The Federal Reserve Board
has taken the position that creditors either must disclose the precise APR or round to the nearest onequarter of 1 percent. Thus, a creditor who chooses to
disclose the exact rate is allowed no tolerance for
error. As a simple solution to that problem, we suggest
that the law be amended to allow a uniform tolerance
of one-eighth of 1 percent, more or less, than the APR
which a creditor discloses.
As I have mentioned, the Comptroller possesses
substantial authority under present statutes for administrative enforcement of Truth-in-Lending requirements. Section 8 of the Federal Deposit Insurance Act
permits the federal banking agencies to require banks
"to take affirmative action to correct the conditions resulting from any . . . violation or practice." We use that
authority to take any steps necessary, including the
compulsion of reimbursement to customers, to insure
full compliance by national banks. Unfortunately, we
cannot ignore the prospect that that may embroil the
Comptroller in costly and time-consuming litigation
against recalcitrant banks. Clarification of the law to
reaffirm that authority in express terms would eliminate
the problem.

S. 1312 — The Truth-in-Lending Simplification
and Reform Act
I turn now to the specific legislative proposals before
the Committee today — S. 1312, "The Truth-inLending Simplification and Reform Act," and S. 1501,
"The Truth-in-Lending Simplification Act of 1977." I will
concentrate my comments on those provisions in each
241

bill which especially interest the Office of the Comptroller of the Currency.
Section 2 of S. 1312, exempting agricultural credit,
is a sensible amendment. We see no reason to afford
greater protection to farmers than to other small businesses. S. 1501 shares that approach.
Section 3 of S. 1312, authorizing state authorities to
enforce the Truth-in-Lending laws against all creditors,
is not as welcome a change. The national banking
laws provide for the thorough supervision and regulation of national banks by the Comptroller of the Currency. Crucial to that comprehensive scheme is the
bank examination process embodied in 12 USC 481,
et seq. Through the grant of exclusive visitorial powers
under 12 USC 484, Congress has created a special
working relationship between national banks and the
Comptroller's Office. Our effectiveness in carrying out
broad responsibilities concerning the National Banking
System depends on our ability to maintain this high
level of confidentiality and supervisory trust.
Ever since the creation of the National Banking System in 1863, Congress has always included, as part of
the statutory provision for bank examinations, an express statement which limits the exercise of visitorial
powers. Only once, when it established the Federal
Reserve Board, has Congress elected to expand authority to conduct examinations of national banks, and
that expansion was justified on the basis of "the close
and intimate relationships" that would exist between
Federal Reserve Banks and their member banks. Even
then, the expressed concern about the potentially burdensome impact of additional examinations on national banks was apparently strong enough to make
Federal Reserve examinations discretionary rather
than mandatory.
We continue to perceive no need to upset the
present division of enforcement authority so pivotal to
the balance of the dual banking system. With state
laws proliferating in the Truth-in-Lending field, it is
easy to envision, under proposed section 3 of S. 1312
multiple enforcement efforts on the state and federal
level which would cause agencies to work at crosspurposes, unduly encumber the operations of individual banks, and pose a serious threat to the maintenance of a stable and competitive National Banking
System.
In requiring the banking agencies to direct banks to
reimburse borrowers for creditor violations, section 4
of S. 1312 appears to fall short of explicitly reaffirming
our present enforcement powers under section 8 of the
Federal Deposit Insurance Act with respect to Truth-inLending. We also question the desirability of the companion provision requiring an agency to notify customers of the facts in the event a creditor refuses to
reimburse. In order to minimize costs to the regulators,
we think it would be more efficient to require such
creditors to mail a proper notice to all affected accounts, as is now our practice.
Section 5 of S. 1312, through what appears to be a
technical error, would provide a longer statute of limitations, applicable to actions brought for violation of
Truth-in-Lending, only in states exempted from the re242



quirements of the federal statute. We would prefer that
the new enforcement flexibility afforded by such an extension apply instead to violations uncovered by any of
the regulators designated in section 4 of the bill.
We have additional difficulty with the blanket limitation section 5 would place on all actions against creditors brought more than 3 years from the date of the
transaction. Without that restriction, borrowers who
have entered into long-term contracts, such as 30-year
mortgages, could bring suit for continuing overcharges for the duration of their loans. We doubt the
wisdom of eliminating all limitations on civil actions,
however, on the other hand, our experience has demonstrated that a borrower normally is not equipped to
discover Truth-in-Lending violations and must rely on
expert bank examiners or attorneys. Therefore, in the
interest of fairness, we would suggest a 3-year limitation, measured, in the alternative, either from the date
of the transaction or from the date of enactment of the
amendment, whichever comes later. That approach
would permit borrowers who now are repaying loans
which were taken more than 3 years ago to sue creditors when notified, by a regulatory agency during the
first 3 years the law is in effect, that violations have
occurred.
Sections 11 and 12 of S. 1312 deal with default
charges and security interests, respectively. We are
pleased to note the improvements offered by S. 1312
in clarifying default charge disclosure and by the common approach of S. 1312 and S. 1501 in requiring only
a simple statement that a security interest is taken.
Under S. 1312 all disclosures now required by the
Truth-in-Lending Act would remain fundamentally intact. However, section 13 of the bill would attach civil
liability only to a failure to disclose certain items. What
results is that civil liability is eliminated for failure to
disclose deferred payment price, a disclosure peculiar
to credit sales. As civil liability is valuable principally
as a spur to compliance, credit sale customers dealing
with creditors who choose not to comply, in the absence of such a threat, will have difficulty in comparing
the cost of a financed purchase with that of a cash
transaction. For that reason, we are opposed to any
limitation on civil liability which would remove coverage from any of the core items that I have described
earlier in my statement.
The issues of set-off rights under Truth-in-Lending
has been a matter of controversy since enactment of
the statute. A number of courts have ruled that creditor
violations may only be used offensively by aggrieved
borrowers and not as grounds for recoupment or offset. Section 14 of S. 1312 would ratify the more widely
held interpretation that set-off is permissible as a defense. As its sole weakness, that provision of the bill
leaves open to question the applicability of the Truthin-Lending Act statute of limitations to defensive use of
claims for violations. We urge that that point be clarified to suspend operation of the statute in such cases.
Dissemination of annual percentage rates, as proposed in section 15 of S. 1312, is a concept which we
endorse in principle. We would point out, however, that
the concept poses practical problems of implementa-

tion. How should those rates be computed and how
often? What categories of loans would be broken out?
We also are seriously troubled by the bill's coverage
of "all creditors" in the most populous metropolitan
areas across the nation. Section 15 would have the
Federal Reserve Board undertake a herculean task in
gathering and verifying the accuracy of such a vast
range of data from unregulated, as well as regulated,
businesses. We hope the Committee will devote careful attention to the practical import of that proposal in
formulating a requirement which is useful and informative to the public.

S. 1501 — The Truth-in-Lending Simplification
Act of 1977
Focusing on S. 1501, we believe this bill offers a
constructive approach to Truth-in-Lending simplification. As noted, section 2 pairs with section 2 of S. 1312
in exempting agricultural credit, but the provision in S.
1501 goes farther in its intent to exempt all consumer
loans made by farm credit institutions. The language of
that exemption, however, raises a question as to the
true breadth of its scope when it speaks of "borrowerowned federal instrumentalities which extend credit
under the supervision of an agency of the United
States." For the sake of clarity, that provision should
state specifically who is intended to be exempted from
coverage of Truth-in-Lending.
Section 4 of S. 1501 heads in the wrong direction in
its attempt to simplify Truth-in-Lending disclosures by
eliminating the requirement under present law to itemize certain charges not included in the finance charge.
Rather, we think these charges should be included in
the finance charge. Earlier I stressed that fees relating
to the filing of security interests, or insurance in lieu of
such fees, are peculiar to credit sales and are very
definitely a part of the cost of credit. If those charges
are not included in the calculation of the finance
charge, the consumer's ability to compare the cost of
a cash purchase with a deferred payment sale will remain seriously impaired.
I have already discussed the problems created by
the rules now governing disclosure of the annual percentage rate. Section 10(f) of S. 1501 would correct
the shortcomings of the existing provisions by allowing
disclosure within a tolerance of one-eighth of 1 percent
of the actual APR.
Ostensibly to avoid forcing creditors to commit hypertechnical violations of the law, subsections (a), (d)
and (g) of section 10 provide tolerances for the disclosed number of payments and the finance charge
with regard to transactions payable in more than 120
installments. The presence of those provisions, which
seem to be unjustified even under existing rounding
principles, is apparently attributable to a faulty example incorporated into remarks in the Congressional
Record of May 12, 1977. There it was explained that
the large, 1 percent tolerance for such calculations is
necessary to cope with the effects of rounding payments to the nearest penny. On the contrary, such
minor deviations are well within current tolerances. For
example, the 30-year, $30,000 loan carrying a dis-




closed APR of 9 percent cited in the Record can legitimately be disclosed as 9 percent, even if payments
are rounded to the nearest penny ($241.39). Here the
true APR would be only 9.000148942 percent. In fact,
payments of as much as $244.08 per month could be
charged without the APR (9.124543188 percent) having to be disclosed at a level higher than 9 percent.
Eliminating civil liability for violations not material to
the consumer's awareness of the cost of credit is a
commendable idea. In practical terms, though, the
question to be answered is which disclosures are important enough to trigger liability. Section 12 of S. 1501
would have liability turn on an ex post facto determination of exactly what information was most useful to the
individual credit shopper. That provision, however,
easily can be made more precise and workable once
the core items, as suggested earlier, are settled upon.
Thus, we would favor language imposing civil liability
only for failure to disclose any terms which the statute
expressly deems material to an intelligent comparison
of credit offers.
The final provision of S. 1501, affecting the relation
of the relevant federal statutes to state laws, appears
to be a case of unintentional overkill. As it now reads,
section 15 would preempt all state laws in the consumer credit area, thereby nullifying retail installment
sales acts, small loan acts and all adaptations of the
Uniform Consumer Credit Code. The Committee is well
aware that those and similar state laws provide important substantive rights not at all duplicated by existing
federal law. Therefore, we urge that the effect of section 15 be redesigned to pre-empt only state laws
which attempt to deal specifically with matters pertaining to disclosure of credit cost information.

Consumer Education
In closing, I want to reemphasize the interest of the
Comptroller of the Currency in simplification of the
Truth-in-Lending statutes and regulations. But we also
recognize that no law, no matter how clear and salutory, can fully accomplish its purpose without those
whom it is designed to protect having a fundamental
awareness of their rights.
Without a comprehensive educational program, efforts to simplify and enhance enforcement of Truth-inLending requirements are largely futile gestures. Our
experience continues to demonstrate that customers
of national banks normally learn of their rights under
any of the various consumer protection laws only when
they contact us with specific complaints or default on
their loans, leaving their attorneys to raise creditor violations as a defense. For that reason, we view education of the' public as the most important challenge to
the effectiveness of federal statutory protections. As a
partial solution we now are preparing a consumer
guide to national banks which will explain how consumers can use banking services to their best advantage and what legal rights they may exercise to protect
their interests.
The ultimate solution cannot be wholly within the
means of a bank regulatory agency. Although consumer education by federal agencies may not have
243

been contemplated at the time of enactment of the
Truth-in-Lending Act or any of the other important consumer protection laws, we suggest to the Committee
that the Education Division of the Department of
Health, Education and Welfare (HEW) already possesses the necessary authority to develop a comprehensive program of this sort. Within its broad mandate, that division is responsible for providing professional and financial assistance to strengthen education
in accordance with federal laws and regulations.
Some progress in that direction already has been
made. In the latter half of 1976 the Office of Consumer

Affairs in HEW established the Interagency Consumer
Education and Information Liaison (CEIL). Representatives from more than 50 government agencies, including our own, convene once a month to develop and
disseminate information to our nation's schools and
communities. The potential of this panel is apparent,
but, whether through CEIL, the Education Division or
some other vehicle, our Office is ready to support fully
any efforts on behalf of consumer education in the
financial area, and we pledge all facilities at our disposal in aid of producing an effective educational program.

Statement of John G. Heimann, Comptroller of the Currency, before the Senate
Committee on Banking, Housing and Urban Affairs, Washington, D.C., September
16, 1977
I am very pleased to be here today, Mr. Chairman, to
discuss the important issue of the bank regulatory
structure, specifically the proposals for change contained in S. 684 and S. 711. Although I have appeared
previously before the Senate Banking Committee, this
is my first appearance as Comptroller of the Currency.
My experience as a state bank supervisor and now as
the Comptroller gives me a unique opportunity to comment from a first-hand view of both the state and national bank systems.
As you know, I testified last year before this Committee on a bill similar to S. 684. I was then the Superintendent of Banks of the State of New York and I viewed
the regulatory problems primarily from the vantage
point of one who was acquainted with those problems
at the state level. It was my opinion then, as state bank
superintendent, and it continues to be now, as Comptroller, that the dual banking system is necessary for a
competitive and healthy banking structure. Strong
state banks and bank regulators are necessary for an
effective dual banking system. In my prior appearance, I envisioned a change in the federal regulatory
structure that would include a consolidated federal
agency to supervise and regulate federally chartered
financial institutions, with a strong FDIC taking a special role in helping to strengthen state supervisory efforts.
My present opinion on the agency consolidation
question continues to be predicated on a strong dual
banking system. That system would depend on state
regulators who would have as adequate resources
and firm commitments to effective regulation as the
federal supervisors. A uniformly effective state system
would provide the counterbalance to a consolidated
agency for federally chartered financial institutions.
Unfortunately, a uniformly strong state system does
not exist at the present time. Some states have regulatory structures which are comparable to federal agencies, but many do not. A healthy diversity in the financial system now exists because of the divided federal
authority, not because of the strength of the state systems. If we are going to move toward an ideal, dual,
244



state/federal system, we must first improve the state
system. Although that development can be advanced
through FDIC support, it must also come from the
commitment of the states themselves. I believe that a
time will come when we can have a Federal Banking
Commission regulating federally chartered institutions,
but it is not yet here.
At this time, I believe the present structure is sufficiently effective to maintain the necessary diversity at
the federal level which will preclude a monolithic and
stultifying centralization, and will permit freedom of
choice. Within the present structure, however, interim
solutions include working through the recently established Interagency Supervisory Committee or creation of a new Federal Bank Examination Council to
reconcile some of the problems which exist in regulation of financial institutions.
In explaining the reasons for my present position, I
would like to present an overall view of the total U.S.
financial system and its regulatory structure. I am
aware that the literature and testimony on the subject
is voluminous. I think, however, it would be helpful to
present, in one document, a succinct description of
the current financial regulatory system and the capital
market within which it functions. Then we can evaluate
advantages and deficiencies and consider the proposals which have been made to address the problem. Because of time limitations, I would like to submit
that material for the record as a supplement to my
statement and concentrate my remarks on the major
problems which I perceive in the system.
The reality of the dual banking system in the United
States is that state systems do not yet provide an effective alternative to the federal system. On one hand,
the various federal agencies have thousands of examiners similarly trained and similarly paid with access to
sophisticated staff support and the latest computer
systems. On the other hand, states with wellstructured, well-financed supervisory agencies exist
side by side with other state agencies which are not
comparably structured and financed.
The statistics put that inequality into stark relief. The

Comptroller's Office has 1,938 commercial bank examiners in the field examining 4,737 banks. On average, a field examiner handles $301 million in domestic
bank assets and 2.4 banks. The FDIC has 1,798 field
examiners jointly responsible for 9,064 banks; on average, each examiner is responsible for $204 million in
domestic assets and 5 banks. The Federal Reserve
Banks have 611 examiners jointly responsible for
1,029 banks, or $294 million in domestic assets and
1.7 banks per examiner. Those differing numbers reflect the different types of banks administered by the
three agencies. As a basis for comparison, the more
simple depository institutions, credit unions, utilize 318
federal examiners who handle an average of 40 federally chartered institutions per examiner but only $77
million of assets per examiner.
According to the Conference of State Bank Supervisors there are 1,918 state bank examiners who handle,
jointly with the FDIC and the Federal Reserve Banks,
10,093 commercial banks with $547 billion in domestic
assets. Thus, there are 5.3 banks and $285 million of
assets per state examiner. But when we look at individual states, we see considerable disparities.
For example, in New York, there is less than one
commercial bank and an average of $490 million in
assets per bank examiner. In Oklahoma there are 11
banks and only $157 million in assets per examiner. In
Florida, the dollar value per examiner is identical to
Oklahoma, but there are only 5.6 state banks to each
examiner. In Ohio, there are 5.9 banks to an examiner,
but the examiner is responsible for an average of $490
million in state bank deposits. Perhaps the disparity is
due to the differing structures of state banks, but I am
not sure that is the case.
To view the problem in another light, it is my firm
belief that in reality there is one large capital market in
the U.S. which is linked in various ways to an even
larger international capital market. Commercial banks,
regardless of type of charter or structure, compete for
the public's savings with various types of other financial intermediaries — savings and loan associations,
mutual savings banks, credit unions, insurance companies, consumer credit companies, public and private pension funds and the securities markets. Institutional specialization and varied legal environments
prevent across-the-board competition. But competition
really does exist among institutions.
On the liability side, banks and thrift institutions of
various types all compete for the public's savings.
Banks offer a greater variety of specialized accounts
and, as a result, control 65 percent of all monies
placed in depository institutions in the United States.
That is down 2 percentage points from 1971; $32 billion of potential growth lost to savings and loans or
credit unions. Banks get the lion's share of corporate
deposits because they offer demand deposits, but that
business is the most vulnerable to the fine tuned efforts of modern corporations to hold minimal cash balances.
On the asset side, banks compete with all other
types of financial institutions for their share of business. Thus, the 14,698 banks compete with the 473




mutual savings banks and 4,858 savings and loans for
the public's home mortgages. They compete with
credit unions and consumer credit companies for the
public's installment paper. And they compete with the
commercial paper firms for the short-term debt of major corporations. They must now compete with foreign
banks for American business in the increasingly important international money market.
There is a single U.S. capital market with 42,637 depository institutions competing for their respective
shares. Over $1 trillion is in the U.S. commercial banking system — out of a total of $1,612 billion in the
domestic depository market. The figures are truly imposing. But, despite the strength of the banking system, savings and loan associations have grown 38
percent faster in the last 5 years than have banks, and
credit unions, with their small part of the market, have
grown even faster, 63 percent faster, in the same time
period. Each of the financial institution regulators is responsible for a segment of that complex market, with
the SEC also involved in enforcing disclosure laws for
investors.
Although a more rational structure of regulation is
desirable, what is eventually desirable may not be immediately possible. For example, there is a movement
to broaden the powers of thrift institutions. I am in favor
of that movement, provided we place all directly competitive institutions on the same basis. But, broadening
the powers of thrifts, which possibly may result in a
shift of resources to them, may diminish the power of
the Federal Reserve Board to regulate the money supply. The financial structure of the United States is a
vastly more complicated matter than the federal/state
problem. There is a problem of segmented financial
markets, each with its own special interests and its
own dedicated supervision.
As discussed in the portion of the supplement to this
statement dealing with various recommendations for
regulatory structural change, experts have proposed
different solutions to the problem of an imperfect system. Several noted authorities have proposed a centralized Federal Bank Commission, such as provided
in S. 684. Some proposals, especially the Hunt Commission recommendations, have been more comprehensive by addressing the roles of the financial institutions, as well as the regulators, in an integrated capital
market. Last year, I made a proposal for a strong Federal Bank Commission for federally chartered financial
institutions, which would be counterbalanced by a
strong FDIC and a vigorous state regulatory structure.
Although I continue to work for the ideal, I hope that
the art of the possible will permit us to address immediately some of the pressing needs in that area. The
Senate has taken a very important step in passing S.
71, and I hope that the House will complete action on
a similar measure this year. Another important development has been this Committee's approval of the
NOW account bill.
Much work is needed to make the state financial
systems and regulatory structures uniformly more effective. I do not have any easy answers to give you
today. I shall, however, use my position as a director of
245

the FDIC to help in developing new and improved
measures to bring about the strengthening of the state
system.
In addition, I would request Congressional consideration of legislation concerning the present regulatory
structure of bank holding companies, which continues
to present problems. That system, with divided authority between bank regulators and the Federal Reserve
System, has not always worked smoothly. A bank holding company shares common identity and assets with
its subsidiaries. However, the Comptroller has no authority to issue cease and desist orders, to approve or
disapprove applications or to take other supervisory
measures against a holding company, even if the only
subsidiary of the holding company is a national bank.
Divided responsibility between the supervisor of the
bank and the holding company has led to problems.
Therefore, I recommend that the federal regulatory
agency which is responsible for supervising the bank
or banks which hold a majority of assets of a bank
holding company also serve as the principal supervisor of that holding company. It is possible for a shifting
of charters within a multi-bank holding company to result in undesirably frequent changes in regulators. To
address that problem, I suggest that after the initial
regulator has been determined by the majority of assets in a holding company, change of regulators would
not occur unless two-thirds of the assets changed from
one type of charter to another.
As I have previously stated, creation of a monolithic
regulatory agency at the present time would be unwise. However, closer coordination among the financial regulatory agencies is desirable to resolve any uncertainties that might exist in the regulated industries,
to share improvements in financial regulation and to
standardize examining techniques.
One of the means of improved coordination is
through the Interagency Supervisory Committee, established in February 1977, a subcommittee of the Interagency Coordinating Committee. Already, substantive progress has been made in the following areas:
1. Uniform bank rating system — There has been
criticism, notably by the Government Accounting Office (GAO), because the three federal
banking agencies utilize different approaches
to the classification and monitoring of "problem
banks." Progress is being made toward standardizing these approaches.
2. Shared national credits — In certain situations
involving a loan in excess of $20 million, a
group of domestic banks may join in making
the loan. Not all the members of the lending
group may be banks supervised by the same
federal banking agency. Under the terms of an
agreement which already has been implemented, teams of examiners, representing the
various agencies, inspect the lead banks and
distribute their classification of the loan among
the agencies. As part of a preliminary summary
of the program's initial results, one agency has
indicated a considerable savings of time on a
recent examination of a large bank.
246




3. Uniform approach to nonaccrual loans — A
uniform approach in defining nonaccrual loans
and the application of that concept in the supervisory process were agreed upon by the
subcommittee.
4. Uniform approach to concentrations of credit
— A concentration of credit involves a group
of loans to similarly situated individuals or companies by one bank. An interagency task force
proposed a compromise definition of concentrations of credit for supervisory purposes
which was adopted by the subcommittee. Implementation will take place via instructions to
each agency's examining personnel.
5. Uniform trust department rating system — An
interagency joint training session for senior
trust examiners of the three agencies is
planned for this year. In addition, an interagency task force will study the trust rating system and report when substantive results are
achieved.
6. Consumer affairs — The subcommittee has
agreed to pursue a uniform consumer examination manual, procedures and training. An initial interagency training session has already
been held in that area.
7. International banking — Agencies have
agreed to coordinate examinations of Edge Act
corporations, foreign branches and foreign
wholly-owned subsidiaries to achieve supervisory objectives more efficiently and effectively.
8. Restitution — The subcommittee has concluded that a uniform policy with respect to restitution of overcharges is desirable and should
be pursued through the agencies' respective
offices dealing with consumer matters.
If sufficient progress is not forthcoming on those and
other matters of financial institution regulation and supervision, creation of a Federal Bank Examination
Council would become more feasible. While S. 711
provides the framework for such an agency, the following changes in the bill would, in my opinion, improve
its effectiveness.
The membership should be expanded to include
representatives from other regulators of financial institutions such as the Federal Home Loan Bank Board
and the National Credit Union Administration and state
bank supervisory agencies. That recommendation was
also made by the GAO.
The chair of the Council should rotate periodically
among the Council members. That is another GAO
recommendation.
The possibilities for experimentation inherent in the
present system should be preserved by making it
clear that the recommendations of the Council would
not be binding on the agencies.
The GAO has presented an alternative which I consider to be satisfactory in the event that one agency
does not consider a Council recommendation to be
feasible When a recommendation of the Council is
found unacceptable by an agency, the agency must

submit to the Council, within a time period specified by
the Council, a written statement of the reasons that the
recommendation is not acceptable.
Again, I would like to thank you for this opportunity

to present my views. Let me assure you of my desire to
work with you and this Committee on all matters concerning the improvement of the financial system and
its regulators.

Supplement to September 16 Statement by John G. Heimann
(In the interest of space, this is not a complete reproduction of the information submitted. It represents, however,
the most significant portions. Complete data are available elsewhere. Item numbers have been altered to be consecutive.)

General Functions and Responsibilities of Supervisory Agencies
Office of the Comptroller of the Currency

The Office of the Comptroller of the Currency (OCC)
was established in 1863 as a bureau of the Treasury
Department. It is headed by the Comptroller who is appointed by the President, with the advice and consent
of the Senate, for a 5-year term. The OCC regulates
national banks by its power to:
• Approve or deny applications for new charters,
branches, capital, or other changes in corporate or banking structure;
• Examine the banks;
• Take various supervisory actions against banks
which do not conform to laws and regulations
or which otherwise engage in unsound banking
practices, including removal of officers, negotiation of agreements to change existing bank
practices, and issuance of cease-and-desist
orders; and,
• Issue rules and regulations concerning banking
practices, and governing bank lending and investment practices and corporate structure.
The OCC has divided the country into 14 geographical regions, each of which is headed by a regional administrator.
The Office is funded through assessments on the
assets of national banks.

• Approval or denial of applications for mergers
and acquisitions by state member banks and
bank holding companies.
The Board is aided in the formulation of monetary
policy by the statutory mandated Federal Open Market Committee, which consists of all seven Board
members and the presidents of five Reserve Banks on
a rotating basis. Implementation of policy decisions is
carried out by the 12 District Federal Reserve Banks,
each of which has operational authority within a specific geographical area. Each District Bank has a president and other officers, is under the general supervision of a nine-member board of directors and is an
incorporated institution. The stock of the Banks is held
by commercial banks that are members of the Federal
Reserve System. All national banks must be members,
and state-chartered banks may apply and be accepted for membership.
The funding for the District Banks is derived primarily from interest payments on federal government debt
held by them. The funds for such investments are derived primarily from non-interest earning reserves
which member banks are required to hold at the Reserve Banks. The District Banks pay assessments to
the Board which are used to meet its expenses, with
revenue in excess of expenses and dividends to
stockholder-members paid to the U.S. Treasury.

Federal Reserve System

The Federal Reserve System (FRS) was established
in 1913. It is headed by a seven-member Board of
Governors, each of whom is appointed by the President with the advice and consent of the Senate for a
14-year term. The President selects two Board members to serve 4-year terms as Chairman and Vice
Chairman.
The Board establishes policies in the area of:
• Design and implementation of monetary (and
foreign exchange rate) policy;
• Provision of a national funds transfer system;
• Provision of fiscal agent services to the federal
government;
• Examination, supervision, and regulation of
state member banks and bank holding companies; and,




Federal Deposit Insurance Corporation

The Federal Deposit Insurance Corporation (FDIC)
was created in 1933 as the third federal bank regulatory agency. It is headed by a three-member Board of
Directors, no more than two of whom may be of the
same political party. Two of the Directors are appointed by the President with the advice and consent
of the Senate for 6-year terms, and one of those two is
elected by the Board to be Chairman. The Comptroller
of the Currency is the third Board member and serves
on the Board during his or her tenure as Comptroller.
The FDIC was established to provide:
• Deposit insurance for banks;
• Ongoing supervision of insured state banks
(and mutual savings banks) that are not members of the Federal Reserve System; and,
247

• Services as receiver of all closed national
banks and insured state-chartered banks, if appropriate.
Deposit insurance is provided through the maintenance of a fund which may be used for several purposes. It can cover deposits, up to the insured limit, in
banks that have been closed; advance funds to facilitate a merger or absorption of a troubled bank; extend
direct assistance to distressed banks through loans,
purchases of assets, or deposits of funds; and maintain banking services in communities in which the failure of a bank has left inhabitants without such services, by establishing a "deposit insurance national
bank."
The bank supervisory functions of the FDIC are
shared with state and other federal authorities. All national banks and state banks that are members of the
Federal Reserve System must be insured by the FDIC.
The FDIC examines and supervises those banks under
its purview that are not examined by the other federal
regulators, approves or denies their applications for
structural or corporate changes and rules on applications for insurance.
The FDIC has divided the country into 14 geographical regions, each of which is headed by a Regional
Director. The Corporation is funded by assessments
on average total deposits of insured banks.
Federal Home Loan Bank Board

The Federal Home Loan Bank Board (FHLBB) was
established in 1932. It is headed by a bi-partisan
three-member Board. Members of the Board are appointed by the President with the advice and consent
of the Senate. Each member is appointed for a 4-year
term. The Board is headed by a Chairman who is designated by the President. The Board regulates federally chartered savings and loan associations and supervises the Federal Home Loan Bank System and the
Federal Savings and Loan Insurance Corporation
(FSLIC).
The Federal Home Loan Bank System is composed
of 12 geographical districts, each of which has a District Federal Home Loan Bank. As with the Federal Reserve System, the District Banks are owned by their
member institutions. In addition to federally chartered
savings and loans, mutual savings banks and life in-

surance companies have applied and been accepted
as members of the System.
Federal Home Loan Banks provide credit and other
services to member institutions. District Banks have
three sources of funds:
• Subscription to their stock by member associations;
• Safe of consolidated obligations; and,
• Deposits by members.
The FSLIC, under supervision of the Board, insures
individual accounts. All federally chartered savings
and loan associations must be insured, and statechartered institutions may apply and be accepted for
insurance.
The FHLBB is funded by assessments on District
Banks and the FSLIC, and by fees charged to the institutions it examines.
National Credit Union Administration

The National Credit Union Administration (NCUA)
was created in 1970 to charter, examine, supervise
and provide insurance for all federal credit unions and
those state-chartered credit unions which apply and
are accepted for insurance.
The NCUA is headed by a seven-member Board appointed by the President with the advice and consent
of the Senate, for 6-year terms. The Board consists of
a Chairman, named by the President, and one member from each of the six regions.
Major responsibilities of the NCUA are:
•
•
•
•

Chartering federal credit unions;
Supervising federal credit unions;
Examining federal credit unions;
Providing administrative services for federal
credit unions; and,
• Administering the National Credit Union Share
Insurance Fund (NCUSIF).
The NCUSIF is the insurance fund for federal credit
unions and other credit unions that apply and are accepted for insurance, much like the FDIC or the FSLIC
programs.
The NCUA is financed solely by funds received from
federal credit unions for services performed.

Description of the Depository Institutions
Statistical Profile of Depository Institutions, 1971 and
1976

Tables 1 through 4 show the relative size of the significant categories of depository institutions for yearend 1971 and 1976 and present annual rates of
growth over that 5-year period. Figures are presented
for the number of branches, number of institutions and
total assets of commercial banks, mutual savings
banks, savings and loan associations and credit
unions, according to primary regulator. Also, for each
of the year-end tables, the proportion of the total for all
248




depository institutions, excluding credit unions, is
given. Credit unions were excluded from that computation because their very large number but relatively
insignificant assets would have made comparison with
the larger depository institutions difficult.
Commercial banks, holding $1,040 billion of a total
of $1,612 billion in domestic assets, remain the most
significant category of depository institutions. However, that 66.4 percent share of the assets of all banks
and savings and loans is a decrease from the 68.6
percent share they held just 5 years ear'ier. In addi-

tion, FRB member banks have seen their share of the
total market decline even more. National banks and
state member banks combined held 54.5 percent of
the assets of all major depository institutions at the end
of 1971, but that share had decreased to 49.6 percent
by the end of 1976. That sharp drop was only partially
offset by an increase in the share held by state nonmember banks, both FDIC-insured and other, from
14.1 to 16.8 percent.
The decline in the relative importance of commercial
banks has been caused primarily by the very rapid
growth of savings and loan associations. During the
5-year period, total savings and loan assets grew at an
annual rate of 13.73 percent, compared to 9.98 percent for all commercial banks and 8.52 percent for mutual savings banks. That rapid growth in assets was
accompanied by an even greater growth in the average size of savings and loans and reflected, in part,
the FHLBB's liberal branching policy. Although the actual number of savings and loans declined, the number of branches operated by savings and loans de-

clined, the number of branches operated by savings
and loans increased at an annual rate of 19 percent,
much higher than the corresponding rate of 6.1 percent for commercial banks and 11.7 percent for mutual
savings banks. Indeed, federally chartered savings
and loans, which are solely under the supervision of
the FHLBB, increased their branches at an annual rate
of 25.1 percent. As a result, savings and loans increased their total share of assets from 21.9 to 25 percent, and their share of branches from 16.8 to 26.1
percent, at the same time that their share of number of
institutions dropped from 27.7 to 24.2 percent.
Only credit unions, which have not been included in
the aggregate figures, grew at a more rapid rate. Their
assets increased at an annual rate of 16.25 percent
over the last 5 years, and reached $45 billion at the
end of 1976. However, their average size remains
small and their number has declined only slightly, to
22,608, which is more than the total number of commercial banks, mutual savings banks and savings and
loan associations.

Table 1

Depository Institutions in the United States, December 31, 1971
Type of institution
Commercial Banks:
FDIC Insured —
National
State Fed Member
State Nonmember
Total FDIC Insured
State non-FDIC Insured
Total Commercial Banks

Percent of all
Branches banks and S&L's

Number

Percent of all
banks and S&L's

Assets
Percent of all
(millions) banks and S&L's

13,322
3,821
6,163
23,306
64
23,370

23.2
5.7
39.9
68.8
1.0
69.8

4,600
1,128
7,884
13,612
192
13,804

45.1
12.9
20.9
78.9
0.2
79.1

$378,104
135,517
126,282
639,903
6,380
646,283

40.1
14.4
13.4
67.9
0.7
68.6

Mutual Savings Banks:
FDIC Insured
Non-FDIC Insured
Total Mutual Savings Banks

984
212
1,196

1.7
0.8
2.5

327
163
490

0.7
3.4
4.1

77,892
11,681
89,573

8.3
1.2
9.5

Savings and Loan Associations:
FHLBB Members —
Federal S&L's (FSLIC Insured)
State FSLIC Insured S&L's
Total FHLBB Members
State non-FSLIC Insured S&L's
Total Savings and Loan Associations

1,998
2,032
4,030
931
4,961

10.4
11.2
21.6
6.1
27.7

2,049
2,222
4,271
1,203
5,474

6.7
6.9
13.6
3.2
16.8

114,229
85,755
199,984
6,039
206,023

12.1
9.1
21.2
0.7
21.9

29,527

100.0

19,768

100.0

941,879

100.0

Total Commercial Banks, Mutual Savings Banks and
S&L's
Credit Unions:
Federally Insured CU's (NCUA) —
Federal CU's
Federally Insured State CU's
Total Federally Insured CU's
State non-Federally Insured CU's
Total Credit Unions

12,717
793
13,510
9,774
23,284

10,553
1,955
12,508
8,626
21,134

Total Depository Institutions

43,052

$963,013

Note: Includes depository institutions in Puerto Rico and U.S. Trust Territories; foreign assets are excluded.




249

Table 2
Depository Institutions in the United States, December 31, 1976
Type of institution
Commercial Banks:
FDIC Insured —
National
State Fed Member
State Nonmember
Total FDIC Insured
State non-FDIC Insured
Total Commercial Banks

Percent of all
Branches banks and S&L's

Number

Percent of all
banks and S&L's

Percent of all
Assets
(millions) banks and S&L's

16,723
4,672
9,927
31,322
82
31,404

36.9
10.3
21.9
69.1
02
.
69.3

4,737
1,023
8,651
14,411
287
14,698

23.7
51
.
43.2
72.0
14
.
73.4

$ 586,989
189,574
234,766
1,011,329
28,761
1,040,090

37.5
12.1
15.0
64.6
18
.
66.4

1,796
284
2,080

40
.
06
.
4.6

329
144
473

17
.
07
.
2.4

120,840
13,980
134,820

77
.
09
.
8.6

Savings and Loan Associations:
FHLBB Members —
Federal S&L's (FSLIC Insured)
State FSLIC Insured S&L's
Total FHLBB Members
State non-FSLIC Insured S&L's
Total Savings and Loan Associations

6,125
4,939
11,064
779
11,843

13.5
10.9
24.4
1.7
26.1

2,020
2,023
4,043
815
4,858

10.1
10.1
20.2
4.0
24.2

225,763
157,409
383,172
8,827
391,999

14.4
10.0
24.4
0.6
25.0

Total Commercial Banks, Mutual Savings Banks and '
S&L's

45,327

100.0

20,029

100.0

1,566,909

100.0

Mutual Savings Banks:
FDIC Insured
Non-FDIC Insured
Total Mutual Savings Banks

Credit Unions:
Federally Insured CU's (NCUA) —
Federal CU's
Federally Insured State CU's
Total Federally Insured CU's
State non-Federally Insured CU's
Total Credit Unions

12,757
3,519
16,276
6,332
22,608

24,396
10,700
35,096
9,765
44,861

Total Depository Institutions

42,637

$1,611,770

Note: Includes depository institutions in Puerto Rico and U.S. Trust Territories; foreign assets are excluded.

250




Table 3
Growth of Depository Institutions in the United States, 1971 to 1976
(Percent Annual Increase)
Type of institution

Branches

Banks

Assets

Commercial Banks:
FDIC Insured —
National
State Fed Member
State Nonmember
Total FDIC Insured
State non-FDIC Insured
Total Commercial Banks

4.65
4.10
10.00
6.09
5.08
6.09

0.59
(1-94)
1.87
1.15
8.37
1.26

9.20
6.94
13.20
9.59
35.14
9.98

Mutual Savings Banks:
FDIC Insured
Non-FDIC Insured
Total Mutual Savings Banks

12.79
6.02
11.70

0.12
(2.45)
(0.70)

9.18
3.66
8.52

Savings and Loan Associations:
FHLBB Members —
Federal S&L's (FSLIC Insured)
State FSLIC Insured S&L's
Total FHLBB Members
State non-FSLIC Insured S&L's
Total Savings and Loan Associations

25.11
19.44
22.38
(3.50)
19.01

(0.28)
(1.86)
(1.09)
(7.49)
(2.36)

14.60
12.92
13.89
7.89
13.73

8.95

0.26

10.72

Credit Unions:
Federally Insured CU's (NCUA) —
Federal CU's
Federally Insured State CU's
Total Federally Insured CU's
State non-Federally Insured CU's
Total Credit Unions

0.06
34.72
3.80
(8.32)
(0.59)

18.25
40.49
22.92
2.51
16.25

Total Depository Institutions

(0.19)

10.85

Total Commercial Banks, Mutual Savings Banks and S&L's




251

Table 4
Commercial Banks, Mutual Savings Banks and Savings and Loan Associations Including Foreign
Operations of Commercial Banks, December 31, 1976
Type of institution

Number

Commercial Banks:
FDIC Insured —
National
State Fed Member
State Nonmember
Total FDIC Insured
State non-FDIC Insured
Total Commercial Banks

4,737
1,023
8.651
14,411
287
14,698

-

Total Banks and Savings and Loan Associations

23.7
5.1
43.2
72.0
1.4
73.4

$ 704,329
242,330
235.849
1,182,508
28,644
1,211,152

40.5
13.9
13.6
68.0
1.7
69.7

329
144
473

Mutual Savings Banks:
FDIC Insured
Non-FDIC Insured
Total Mutual Savings Banks
Savings and Loan Associations:
FHLBB Members —
Federal S&L's (FSLIC Insured)
State FSLIC Insured S&L's
Total FHLBB Members
State non-FSLIC Insured S&L's
Total Savings and Loan Associations

Percent of all
Foreign and domestic
Percent of all
banks and S&L's
assets (millions)
banks and S&L's

1.7
0.7
2.4

120,840
13,980
134,820

7.0
0,8
7.8

2,020
2,023
4,043
815
4,858

10.1
10.1
20.2
4J)
24.2

225,763
157.409
383,172
8,827
391,999

13.0
9.0
22.0
0.5
22.5

20,029

100.0

$1,737,971

100.0

Note: Foreign assets of commercial banks include holdings of foreign branches and Edge Act and Agreement Corporations in the U.S.

Commercial Banking

Commercial banks constitute the major form of
financial intermediary in the United States. The
14,698 commercial banks control approximately twothirds of all depository institution assets. They perform
their intermediary function by accepting deposits of
households, businesses and governments and lending
them back to the same group and to foreigners. The
two major liabilities of commercial banks are demand
deposits (those subject to checking) and time deposits
(those which are deposited at interest and are not
withdrawable prior to 30 days or more after deposit).
In providing funds for the borrowing public, banks
provide a wide list of varied services. They provide
short-term credit to both households and businesses,
much of which is in the form of installment credit. Further, commercial banks purchase as assets various
types of securities, primarily issued by various governmental bodies both federal and state and local governments. Although they provide many long-term loans,
commercial banks typically prefer to maintain an average shorter maturity on their assets to coincide with
the shorter maturity of their liabilities. Commercial
banks provide long-term and mortgage loans to both
households, businesses and governments, but that
does not represent a major proportion of their assets.
In order to expand their services, banks have developed, in recent years, highly specialized forms of lending via equipment lease financing, mortgage backed
bonds, credit cards and other specialized forms of
credit. In addition to their lending and depository functions, many banks offer trust services. Those banks act
252



as fiduciary agents for individuals, corporations and
governments to provide investment services, estate
management, pension management and all other
forms of financial management which require a fiduciary relationship.
Because of the increasing importance of the United
States as the major power in international commerce
and finance, approximately 150 large American banks
have expanded overseas.
Savings & Loan Associations

The next most numerous depository institutions in
the United States are the savings and loan associations. There are 4,858 such associations that control
approximately 24 percent of all depository assets in
the United States. Traditionally, the role of the savings
and loan is to provide a safe place for community savings at interest and to use those funds to provide individual home mortgage credit based upon the collateral
of family housing. In recent years, savings and loans
have increased their functions so that they provide
funds for all forms of real estate development, home
improvement loans, trailers, education loans, and, in
the case of some state associations, general consumer credit. The structure of the savings and loan industry is such that approximately 20 percent of industry assets is controlled by stock companies. The balance is in mutual organizations.
In the three great credit crises over the last decade,
the savings and loan industry has experienced serious
problems of disintermediation — the process of investors removing funds from institutions at legally fixed

rates of interest to take advantage of money market
instruments at free market rates. The general thinking
of both the industry and the government has been that
the process of disintermediation could only be
prevented by allowing the asset structure and the
liability structure of the industry to become more
varied. Thus, there have been several attempts,
legislatively, to give the industry broader lending
powers and a greater variety of deposit accounts to
offer to their depositors. Savings and loans also are
the direct beneficiaries of Federal Reserve Regulation
Q which guarantees that they may pay one-quarter
percent more on all forms of interest-bearing deposits
than commercial banks.
Mutual Savings Banks

There are 473 mutual savings banks controlling
approximately 8.5 percent of all assets in depository
institutions. Mutual savings banks are concentrated
most heavily in the northeastern part of the United
States. These savings institutions pre-date the
organization of the savings and loan industry. As
savings banks, they were early promoters of small
public deposits, not subject to check, on which
interest was paid. While mutual savings banks are
heavy providers of funds for mortgages, typically their
portfolios of assets are much more varied than those of
savings and loans. They do provide credit through the
purchase of state and local bonds and are

empowered, in most states, to provide many of the
same credit services as commercial banks. Mutual
savings banks are among the leaders of a program to
provide more varied services to the public. They
pioneered the introduction of NOW accounts and a
more varied approach to lending. In the New England
area, many mutual savings banks are the owners of
allied commercial banks, often domiciled in the same
building.
Credit Unions

A fourth form of depository institution is the credit
union. There are 22,608 credit unions holding $45
billion in assets, approximately 3 percent of total
assets in depository institutions. Credit unions are
typically organized in a very simple manner. There is,
invariably, a common thread between the depositors.
Usually they are fellow-employees or union members
who organize themselves to provide a common pool of
credit. Usually, office space and, often, the clerical
help are provided gratis by an employer. Almost all
credit unions have, as a common practice, a rule that
they lend only to depositors in the association. The
majority of their credits are in the form of installment
credit which rarely matures in more than 5 years.
Recently, credit unions have expanded their activities
to provide mortgage credit and to provide,
experimentally, share draft accounts to deposit
members.

Significant Aspects of the Financial Regulatory System
A review of the significant functions performed by the
financial regulatory agencies is helpful in evaluating
the present condition of the financial regulatory system
and determining its strengths and deficiencies.
The present financial system is defined by the vast
body of laws, regulations and practices that have
developed over the past 100 years. Different types of
financial institutions have developed in response to
market forces, specialized needs and governmental
intervention in the market process designed to
accomplish a particular national goal. As a
consequence, the institutions developed specialties
and the regulators have become as specialized as the
institutions they regulate.
Examination by Federal Authorities

There are 42,635 depository institutions in the United
States which run the gamut from giant New York banks
with numerous foreign and domestic branches to
municipal employees' credit unions in Kansas. All of
those financial intermediaries are conduits for the flow
of savings from households, businesses, and
government to the users of such funds.
The financial history of the United States has
revealed the vulnerability of financial institutions. As a
result, our law, both state and federal, has mandated
that such institutions be subject to examination and
oversight by governmental authorities and that they
operate in the public interest.
The five major federal agencies which examine
depository institutions employ approximately 5,600



commissioned and non-commissioned examining
personnel. That total does not include headquarters
personnel who are commissioned or noncommissioned examiners (totalling approximately 400
people). That is not an official census, and the numbers are not as of a coincidental date, but a number of
6,000 examiners is accurate within 2 percent. As a
rough guide, that means there is one federal examiner
for every seven depository institutions. When the approximate number of state examiners is added, that
proportion drops to five institutions per examiner.
Examination of financial institutions has become a
very specialized profession, with most federal
agencies now having specialists in electronic data
systems,
international,
trust
and
consumer
examinations. The myriad types of examinations are so
complex that it has been estimated that the Office of
the Comptroller of the Currency, although the present
statutory requirement is for approximately 7,100 bank
examinations annually, actually performs at least
26,000 examinations annually. That includes all
consumer, EDP, international and trust examinations
as well as all charter and branch investigations, all
special visitations, and the bank-by-bank NBSS
reviews performed by examiners. The other Federal
agencies could develop similar statistics to show the
incredible workload for supervising the nation's
financial system. The last annual report of the Federal
Home Loan Bank Board complains of the increasing
load on its examiners and the difficulty of maintaining
its examination cycle with its present work force.
253

The only agency that publishes any statistics
regarding cost effectiveness of examinations is the
Federal Home Loan Bank Board. In its annual report of
1976, the FHLBB demonstrates conclusively that the
cost of examination per million dollars of savings and
loan assets drops dramatically as the size of the
institution increases. It takes only 14 percent as much
time per million dollars of assets to examine the largest
savings and loan as to examine associations with less
than $25 million in assets.
The Comptroller of the Currency's Office has
undertaken a similar internal study of examiner
productivity. It must be understood that a bank is a
much more complex bundle of assets than most
savings and loans, but the relationship in examination
is similar to that shown by the Federal Home Loan
Bank Board. For national banks, examination of the
largest banks (those with more than $1 billion in
assets) requires only 40 percent as much time per
million dollars in assets as does examination of the
smallest banks (those with less than $25 million in
assets.)
It is difficult to compare relative efficiencies of
examinations by the Federal Reserve, the FDIC, the
Federal Home Loan Banks, the OCC and the NCUA.
T