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V
STATEMENT ON
( H.R. 4701, LEGISLATION TO STRENGTHEN THE
EMERGENCY INTERSTATE ACQUISITION PROVISIONS
OF
TITLE II OF THE GARN-ST GERMAIN ACT)
PRESENTED TO

a 045




/ A c.

SUBCOMMITTEE ON FINANCIAL INSTITUTIONS SUPERVISION,
REGULATION & INSURANCE>
COMMITTEE ON BANKING, FINANCE & URBAN AFFAIRS; )
HOUSE-flMŒPREÆNTftH-VES

BY

B

L. WILLIAM SEIDMAN
CHAIRMAN
FEDERAL DEPOSIT INSURANCE CORPORATION

Room 2128, Rayburn House Office Building
May 8, 1986 #
10:00 a.m.

E

INTRODUCTION
Mr. Chairman, I want to start by expressing my appreciation to you for

initiating prompt hearings on H.R. 4701, a proposal to broaden the emergency
interstate acquisition provisions of Title II of the Garn-St Germain Act.

We

at the FDIC, in conjunction with the other federal bank regulators, seek to
anticipate potential bank problems.

Our goal is to resolve these problems

with minimal disruption to our financial system and at minimal cost to our
insurance fund.

You know from experience that we are not infallible, but I

trust you will agree that we are right to try.
I

will center my testimony today on the economic conditions underlying the

need for expanded emergency interstate bank acquisition authority.

First,

however, I would like to share with you some of our recent insights on the
handling of bank failures.

I believe this experience bears directly on the

legislation you are considering.
II.

HANDLING OF BANK FAILURES
Coping with bank failures has proved a formidable administrative

challenge in recent years.
transactions in 1985.

The FDIC handled 120 bank failures and assistance

We expect a similar volume in 1985, possibly

including some institutions that are larger than those which failed last
year.




2

We are attempting to handle these failures through purchase and assumption
transactions whenever we are authorized to do so by law.

P&A transactions are

desirable for three distinct reasons.

First, P&As are less disruptive than

payoffs to the affected communities.

A P&A minimizes customer disruption by

keeping the failing bank’
s doors open -- albeit under a new name.

Moreover,

under a P&A, all deposits and most other liabilities to general creditors
are assumed by the acquiring bank.
creditors come out whole.

Thus, all depositors and most general

In contrast, when a bank is liquidated through a

payoff, uninsured depositors and other general creditors usually do not
receive the full amount of their claims.

v

Second, reliance on P&As in lieu

of payoffs helps dispel the perception that we handle small bank failures
differently than large bank failures.

Third, experience shows that P&As are

less costly than payoffs to the Insurance Fund.

\J The exception to this statement involves general creditor obligations,
where they exist, in state-chartered banks located in states that have
depositor preference statutes.

2/ In early 1984 the FDIC utilized "modified payoffs," under which insured
depositors’accounts -- but not the liabilities of uninsured depositors and
other general creditors -- are transferred to an acquiring bank. These
transactions proved less disruptive than straight payoffs, while retaining
some market discipline from bank creditors. Modified payoffs have been used
infrequently in the past two years, usually in situations where a P&A was not
feasible. See L. W. Seidman, Statement on Deposit Insurance Reform 6-7,
Senate Comm, on Banking, Housing, and Urban Affairs, 99th Cong., 2d Sess.
(Mar. 13, 1986).




3
III.

EMERGENCY INTERSTATE TAKEOVER LEGISLATION
Now let me return to the legislation currently before you.

H.R. 4701

pertains to bank acquisitions involving FDIC assistance, as well as trans­
actions not involving such aid.
transactions.

I will confine my remarks to assisted

Before discussing specific provisions, I will review the

changes in the banking environment that have created a need for the statutory
modifications we seek.
Most of the failing banks we have seen in the past two years have been
small.

We have been able to deal with most of them effectively through

intrastate acquisitions.

In some cases, however, we have been unable to

arrange P&As, due to a lack of interested within-state bidders.
The potential problems we face today are greater.
threatened by a continuation of today’
s oil prices.

Oil and gas banks are
Assets of all the 62 farm

banks that failed in 1985 would not equal the assets of the lead bank in some
of those companies.
"energy" banks.

In a recent survey, we identified 563 commercial banks as

Eighteen percent of them -- 103 institutions -- are on the

problem bank list.

At the April 1985 shared national credit review, 17.5

percent of oil and gas credits were criticized.

The volume of problem loans

is expected to expand dramatically in the next review, now under way.
While we prefer to rely on intrastate solutions, many of the failing bank
situations we see today simply may not be resolvable through intrastate P&As.
In some states, it may not be possible to find a buyer that is strong enough
financially to make an acquisition of a failed or failing bank of moderate
size.

As recently as a year or two ago we had a sellers’market.

In some

areas of the country, we find we have to make deals increasingly attractive,
even with very small banks.

Furthermore, even healthy within-state

institutions may not have an incentive to bid for troubled banks.




4
As we confront situations where few or no within-state buyers are to be
found, it becomes important to expand the number of potential bidders.
can be done by allowing out-of-state institutions to make bids.

This

Opening up

P&As to out-of-state bidders greatly increases the pool of potential
purchasers.
price.

It thereby heightens competition and maximizes a bank’
s sales

This reduces costs to the FDIC and thus to other banks around the

country.

The new combined institutions tend to be more diversified and

healthier than the unions that result from more limited auctions.

As a

result, both the stability of the banking system and economic efficiency are
enhanced.
We prefer to rely on within-state solutions to troubled bank situations
whenever feasible.

We fully respect the deference to state authority over

banking embodied in the Douglas Amendment and the McFadden Act.

But if

interstate banking is necessary, it should be accomplished directly.

Our aim

is to be given adequate tools to cope effectively with the failing bank
situations we may confront.
The current interstate acquisition provisions have some very helpful
features.

They provide for out-of-state purchases of failed commercial banks

and failed or failing mutual savings banks with assets of $500 million or
more.

These provisions have materially increased the FDIC’
s options and

reduced its costs in handling several bank failures.

In February of this

year, for example, they were used in the failure of Park Bank in Florida, and
at least $37 million was saved by the FDIC as a result of this transaction
alone.




5
But these provisions have significant limitations.
banks may be acquired only if they are closed.

Eligible commercial

In contrast, an eligible

mutual savings bank may be acquired prior to closing.

Absent specific state

legislation, existing law does not provide for acquisition of holding company
affiliates of a failed or failing bank.

In addition, if a bank is acquired by

an out-of-state bank holding company, the bank may expand throughout the state
by branching if permitted, but not by holding company acquisitions.

This

means in unit banking states, the out-of-state bank holding company s entry is
limited to the site of the bank it acquires.
As a result, we believe that existing law needs not only to be extended
but also to be broadened and improved.

Our purpose is to provide the FDIC

greater flexibility in order to reduce the cost to the Federal Deposit
Insurance Fund and therefore to member banks, minimize disruption of financial
services to the communities involved, and maintain the safety and soundness of
the banking system as a whole.
Briefly, our proposal would do four things.

First, it would lower the

size threshold of a bank eligible for acquisition.

Second, it would permit

the acquisition of failing as well as failed commercial banks.

Third, it

would extend the scope of interstate acquisition authority to include bank
holding company systems when the failing bank exceeds the statutory size
threshold and represents a sizeable part of the holding company system.
Fourth, it would authorize acquiring banks to expand to the three largest
metropolitan statistical areas in the state of acquisition.

Our proposal also

reflects our sensitivity to federalism concerns and to the continued
importance of the dual banking system.




6
Lowering the Size Threshold
Now for some specifics.
way.

The existing interstate provision works this

When a bank of $500 million or more in total assets is closed, the FDIC,

receiver, may arrange the sale of assets and assumption of liabilities of
the closed bank by an out-of-state bank or holding company.

The $500 million

threshold is too high a hurdle, as most troubled banks are considerably
smaller.

We propose a reduction to at least $250 million.

As of the end of 1985, 953 insured commercial banks had assets greater
.nan $250 million, of which 78 were on our problem list.
banks had between $250 million and $500 million in assets.

Of this total, 443
Thus, our proposal

would almost double the number of institutions eligible for emergency acquisi­
tion transactions.

An attachment to this testimony provides a detailed

state-by-state breakdown of banks falling into the "$250-500 million" and
"over $500 million" asset categories.
Others have suggested that the threshold should be lowered further or
eliminated altogether for a temporary period for farm banks.

Should the

Congress decide to do this, the FDIC would have no objection.

We would note

however, that a small farm bank in a unit banking state would probably not
attract many out-of-state bids.

On the other hand, in unit banking states

that permit multibank holding companies, interstate buyers might be attracted
to purchasing the holding company.

Permitting this at a threshold lower than

$250 million might help resolve some problems in the agricultural sector.
Failing Bank Assistance
Second, arranging an assistance transaction for a failing bank before
failure can be cost effective.

Franchise value would be less eroded by the

flight of bank customers and tax benefits may be retained.




This would

7
increase the bank’
s sales price, thereby decreasing the FDIC’
s costs and
increasing our flexibility to pass assets.

In addition, this could avoid the

process of decline into insolvency that might create a ripple effect in the
financial community.

Thus, an out-of-state acquisition should be permitted

not only for failed banks, but also for banks in danger of closing, i.e.,
banks that are expected to close if assistance is not provided.
Holding Company Acquisitions
Third, if the failing bank or banks exceed the statutory size threshold
and represent a sizeable part of the bank holding company system, an
out-of-state holding company should have the ability to buy the stock of the
failing bank and to buy stock of any of the bank’
s affiliates.

The existing

law does not provide for the situation where a failing bank is an integral
part of a larger banking organization.

Because healthy holding company

affiliates cannot be acquired, potential acquirers may be willing to pay far
less than otherwise for a troubled bank.
value may raise the FDIC’
s costs.

This diminution in a bank’
s sales

It may also result in the dismember­

ment of existing established systems, with disruptive effects in the local
community.
Post-Acquisition Expansion
Fourth, acquiring institutions would automatically be entitled to expand
into the three largest metropolitan areas in the acquired bank’
s state, under
the same conditions applied to bank holding companies already located in that
state.

This would enhance institutions’incentives to bid on troubled banks

and thereby increase the total number of troubled bank P&As that can be
carried out -- to the benefit of depositors, creditors, and affected




communities.

At the same time, the limitations on the scope of expansion

would allow states to retain substantial control over bank expansion within
their borders.
Safeguards
The proposal reflects our continued sensitivity to federalism concerns and
the importance of the dual banking system.

When the existing interstate

legislation was enacted in 1982, Congress provided specific safeguards to
protect the states’interests.

Our proposal retains these safeguards.

It does this: (1) by providing state bank supervisors notice and an
opportunity to object to proposed out-of-state assistance transactions; (2) by
authorizing state bank authorities to determine whether a state-chartered
institution is "failing", for purposes of out-of-state bids; and (3) by
providing for rebidding procedures under certain circumstances.

These

safeguards provide an important role for state banking supervisors.
IV.

CONCLUSION
Mr. Chairman, that concludes my prepared remarks.

answer any questions you may have.

Attachment




I would be pleased to

A T T Â T ^ ^ ÎN T

All Insured Commercial Banks witn Assets greater than $250 Million
A s o f December 31» 1985
( $ Am o u n ts i n M i l l i o n s )

STATE

ALABAMA
ALASKA
ARIZONA
ARKANSAS
CALIFORNIA
COLORADO
CONNECTICUT
DELAHARE
DISTRICT OF COLUMBIA
FLORIDA
GEORGIA
HAHAII
IDAHO
ILLINOIS
INDIANA
IOHA
KANSAS
KENTUCKY
LOUISIANA
MAINE
MARYLAND
MASSACHUSETTS
MICHIGAN
MINNESOTA
MISSISSIPPI
MISSOURI
MONTANA
NEBRASKA
NEVADA
NEH HAMPSHIRE
NEH JERSEY
NEH MEXICO
NEH YORK
NORTH CAROLINA
NORTH DAKOTA
OHIO
OKLAHOMA
OREGON
PENNSYLVANIA
RHODE ISLAND
SOUTH CAROLINA
SOUTH DAKOTA
TENNESSEE
TEXAS
UTAH
VERMONT
VIRGINIA
HASH1NGT0N
HEST VIRGINIA
HISCONSIN
HYOMING
PUERTO RICO



Number o f B a n k s
w/ A s s e t s o f
$ 2 5 0 - $ 5 00
7
6
0
8
22
6
6
6
3
27
7
1
2
36
20
6

8
6
13
1
2
21
26
10
5
10
3
1
1
6
16
3
15
2
1
16
8
2
18
1
1
1
7
52
2
6
7
2
6
9
2
4
443

A s s e t s o f Banks
w/ A s s e t s o f
$250 - $500
$2,134
$1,477
$0
$2,793
$8,167
$1,969
$1,156
$1,583
$1,089
$9,255
$2,369
$360
$ 7 18
$11,409
$6,308
$1,370
$2,676
$1,825
$4,733
$387
$661
$7,775
$8,910
$3,191
$1,652
$3,302
$ 9 38
$4 87
$461
$2,103
$4,418
$951
$5,624
$534
$275
$5,463
$2,512
$577
$6,245
$396
$312
$252
$2,469
$18,580
$5 26
$1,809
$2,308
$791
$1,999
$2,697
$ 5 58

Number o f B a n k s
m/ Assets

Over $ 5 0 0
5
3

6
2
29
4

6
6
5
29
9
4
3
17
13
4

2
5
14
5
11
17
17

6

$1,527

5
11
0
4
4
1
29
2
46
10
0
28
5
4
41
2
5
4
11
41
5
1
10
7
1
7
0
* 4

$152,081

510

Assets of Banks
Assets
Over $500

m/

$14,013
$2,605
$22,850

$ 1,866
$259,559
$8,103
$21,385
$7,171
$13,315
$52,277 .
$29,370
$8,605
$5,671
$90,551
$18,152
$3,808
$2,229
$10,826
$15,678
$3,691
$26,769
$50,559
$61,686
$23,758
$7,555
$19,029

$0
$6,573
$6,616
$667
$67,119
$2,585
$602,987
$65,322

$0
$57,163
$8,361
$16,862
$108,635
$8,216
$11,035
$11,898
$19,226
$97,572
$7,967
$ 8 50
$33,796
$26,937
$535
$10,265

$0
$8,754
$1.896,332

FEDERAL DEPOSIT INSURANCE CORPORATION,

Washington. DC 20429

OFFICE OF THE C H A IR M A N

May 6, 1986
Honorable Fernand J. St Germain
Chairman
Subcommittee on Financial Institutions
Supervision, Regulation and Insurance
Committee on Banking, Finance
and Urban Affairs
U.S. House of Representatives
Washington, D.C. 20515-6051
Dear Chairman St Germain:
The following is provided in response to your questions regarding H.R. 4701
provided in your letter of May 1, 1986:
1. H.R. 4701, the Financial Institutions Emergency Acquisitions Amendments
of 1986 , would allow assisted and unassisted extraordinary acquisitions of
insured banks (and their parent holding companies and affiliates) if the
bank is Min danger of closing.”
Please provide the Subcommittee with estimates on the number of institutions
presently qualifying under the legislation's definition of "in danger of
closing," the location on a state-by-state basis of these institutions, and
the asset s i z e levels of these institutions.
The chartering authority would have to make the determination of which banks
are "in danger of closing" under the proposed legislation. Presently, there
are about 1,000 banks with assets greater than $250 million of which 78 are on
our problem list. Recent experience indicates about 10 percent of the banks on
the problem list fail or need FDIC assistance. We are reluctant to provide
detailed information regarding the size or location of problem banks but there
is an increasing number of larger institutions on the problem list.
2. Is it possible for a nonfinancial institution to avail itself of any of
the provisions of H.R. 4701 in order to acquire an insured bank?
It is possible for a nonfinancial institution to acquire an insured bank under
existing law and it would remain possible under H.R. 4701. This bill neither
authorizes nor prohibits such a transaction.
3. Section 2 of H.R. 4701 confirms the FDIC's powers under section 13(c)
of the Federal Deposit Insurance Act to assist a transaction. The
Subcommittee is interested in the FDIC's use of section 13(c) in the past,
the current level of outstanding assistance under 13(c) by the FDIC, and




2

FDIC’
s estimates on the future use of section 13(c) both generally, and in
connection with certain extraordinary acquisitions under section 13(f) as
amended by the legislation. Accordingly, please answer the following:
a. From 1982 to the present, provide an annual compilation of the FDIC’
s
assistance under section 13(c), with a breakdown of the total number of
institutions assisted each year, including assistance to those persons
acquiring control of insured banks under 13(f) as it is currently written,
together with the name and location of each assisted institution or
acquiring person, and an indication as to whether the action was taken to
prevent the closing of an insured bank, to restore an insured closed bank
to normal operation, or if such assistance was accorded to lessen the risk
to the FDIC posed by the threat of instability due to severe financial
conditions. Please include the amount of 13(c) assistance given in each
transaction, broken down by the amount of loans to, deposits in, purchases
of the assets of, or securities of, assumption of the liabilities of, or
contributions made to insured banks or persons under section 13(c).
b. Please state the level of FDIC assistance under section 13(c) currently
outstanding, including an identical breakdown as specified above.
We have provided the information requested in tabular form on subsequent
pages. In the interest of providing a timely response and in providing useful
information we have excluded detail on assistance provided to facilitate
within-state purchase and assumption transactions for banks that failed and
were closed by their chartering authority. Such P§A transactions represent by
far the most common form of assistance and will continue to be the most common
form with or without new legislation. In 1982 there were 25 such transactions,
36 in 1983, 62 in 1984, 87 in 1985 and 29 through April 30, 1986. Information
on these transactions can be provided at a later date if it is so desired.
c. Please estimate the level of assistance anticipated under section 13(c)
for the remainder of 1986, and for 1987, including separate estimates on
the anticipated levels of assistance for transactions under the provisions
in H.R. 4701 to amend section 13(f).
The circumstances surrounding problem banks and failing banks are constantly
changing, often in unforeseen ways. It is not possible to anticipate the level
or type of assistance with any degree of assurance beyond a very short time.
However, we have had roughly 40 failures to date in 1986 and 120 in 1985. We
do not foresee any improvement in those rates in 1986 and, therefore, expect
approximately 80 or more additional failures by year-end. Presently there is
little reason to expect significant improvement in 1987 but estimates that far
in the future have little meaning.
During 1985, the FDIC disbursed $2.3 billion in connection with bank failures
and assistance transactions, about one quarter of these cases were depositor




3

payoffs with the rest being purchase and assumption or assistance transactions.
We note however, the ultimate cost to the insurance fund will be considerably
less than the amount disbursed.
We have used the interstate provisions of section 13(f) three times. Only once
has it resulted in an acquisition by an out-of-state bank. However, thè
existence of out-of-state bidders is believed to have been an important
influence in obtaining a satisfactory bid from within-state institutions in the
other two instances. We have not formally used the interstate provisions in
handling any of the larger savings banks but in several cases we did informally
make out-of-state inquiries to see if there was any interest. The interstate
provisions are not expected to be needed frequently but may well be critical in
handling selected institutions of modest to large size in a manner that
provides the least disruption to the banking system and minimizes the impact to
the FDIC fund.
4. H.R. 4701 would preserve the eligibility of insured banks (or their
parent holding company or affiliated banks) to be acquired by an
out-of-state bank or bank holding company, even after FDIC assistance has
been granted under section 13(c) of the Federal Deposit Insurance Act,
provided such assistance was initially granted after April 15, 1986, and
remains outstanding.
Should out-of-state banks and bank holding companies continue to be allowed
to acquire institutions receiving FDIC assistance, even after those
institutions may no longer be in danger of closing or when the severe
financial conditions which precipitated the assistance have subsided?
Our proposal envisions situations where the institution would fail but for FDIC
assistance. Therefore, even though assistance has prevented failure the bank
is not financially independent. The FDIC as a matter of policy does not desire
to routinely maintain long-term financial involvement in insured banks. Having
given assistance, which may involve continuing exposure to the FDIC fund, we
would like to be able to seek a private market solution if the opportunity
exists. Given the size of the banks involved, the normal inability of banks in
the same area to diversify through acquisition of another area bank, and the
potential that other major within state banks would be financially strained due
to common economic problems, a private market solution is likely to require
involvement of an out-of-state bank. Broadening the possible alternatives
should also allow the FDIC to reduce the potential impact on the insurance fund.
Therefore, so long as the FDIC is at risk in a given institution, that
institution should be available for acquisition by out-of-state banks.




1. William Seidman
Chairman

Name of Institution
1982

Amount

De scriptio n

Current Bai.

Reason

Acquiring Institution

Farmers and Merchants Savings Bank
Minneapolis, Minnesota

$30 million
$50 million

Cash Contribution
Income Maintenance
Payments
Purchase Assets of

-0$20.2 million

Facilitate Merger

Marquette National Bank of
Minneapolis
Minneapolis, Minnesota

$40 million

Facilitate Merger

$24.3 million
$21.5 million
$30.0 million

Income Maintenance
Payments
Loan to
Purchase Assets of
Deposit in

First Interstate Bank of
Washington, N.A.
Seattle, Washington

Abilene National Bank
Abilene, Texas

$50 million

Deposit In

$50 million

Facilitiate Purchase

Mercantile Texas Corporation
Dallas, Texas

Oklahoma National Bank
Oklahoma City, Oklahoma

$28.8 million

Purchase Assets of

$23 million

Facilitate Merger

First National Bank and Trust
Company of Oklahoma City
Oklahoma City, Oklahoma

Western Savings Bank
Buffalo, New York

$30 million

Cash Contribution

-0 -

Facilitate Merger

Buffalo Savings Bank
Buffalo, New York

New York Bank for Savings
New York, New York

$ 20 million
$35 million
$80 million
$204 million

Cash Contribution
Cash Contribution
Loan to
Income Maintenance
Payments

-0-

Facilitate Merger

Buffalo Savings Bank
Buffalo, New York

$32 million

Fidelity Mutual Savings Bank
Spokane, Washington




$15.7 million

-

0

-

-0-0 -0 -

-

0

-

-0 -

$308.5 million

Name of Institution

Amount

Descriotion

Reason

Acquiring Institution

Western Savings Fund Society
of Philadephia
Haverford, Pennsylvania

$112 million
$180 million
$216 million
$ 2 million

Loan To
Income Maintenance
Loan To
Loss Indemificatioi

Facilitate Merger

PSFS
Phildelphia, Pennsylvania

United Mutual Savings Bank
New York, New York

$30 million

Loan To

Facilitate Merger

American Savings Bank
New York, New York

Mechanics Savings Bank
Elmira, New York

$2.5 million

Loan To

Facilitate Merger

Syracuse Savings Bank
Syracuse, New York

United States Savings Bank
Newark, New Jersey

$29.8 million
$11.4 million
$28 million

Assume Liabilitity
Cash Contribution
Cash Contribution

Facilitate Merger

Hudson City Savings Bank
Paramus, New Jersey

Dry Dock Savings Bank
New York, New York

$32 million
$25 million

Income Maintenance
Net Worth Cert.

Facilitate Merger

Dollar Dry Dock Savings Bank
New York, New York

Oregon Mutual Savings Bank
Portland, Oregon

$11.9 million

Cash Contribution

Facilitate Merger

Moore Financial Group
Boise, Idaho

1983




Name of Institution

Amount

Description

Current Bai.

Reason

Acquiring Im t itution

Auburn Savings Bank
Auburn, New York

$2.9 million

Loan to

$2.9 million

Facilitate Merger

Syracuse Savings Bank
Syracuse, New York

First National Bank of Midland
Midland, Texas

$100 million

Interim Loan to

-

0

-

Stabilize situation

Later Acquired by
Republic Bancorporation
Dallas, Texas, in a closed bank
purchase and assumption transaction

Orange Savings Bank
Livingston, New Jersey

$26 million

Cash Contribution

-

0

-

Facilitate Merger

Hudson City Savings Bank
Paramus, New Jersey

Continental Illinois National
Bank and Trust Company
Chicago, Illinois

$1.5 billion
$3.5 billion
$1.0 billion

-0 Interim Loan to
Assumption of Liab $3.0 billion
Purchase of Prefer. $ 1.0 billion
Stock

Stabilize situation
Prevent Closing

None,

The Commercial Bank
Andalusia, Alabama

$0.1 million

Assumption of
Liabilities

Facilitate Merger

First Alabama Bancshares, Inc.
Montgomery, Alabama

Bowery Savings Bank
New York, New York

$165 million
$183 million

Cash Contribution
Income Maintenance
Payments
Loan to
Purchase Assets of

1984

1985




$100 million
$115 million

$0.1 million

-0 -

$183 million
$100 million
$110 million

Facilitate Acquisition Bowery Savings Bank
New York, New York

Name of Institution

Amount

Description

Current Bal.

Reason

Acquiring Institution

Home Savings Bank
White Plains, New York

$8.5 million
($2.4 million)

-0-0-

Facilitate Merger

Home Hamburg Savings Bank
New York, New York

$15 million
$1.2 million

Cash Contribution
Income Maintenance
Payments
Loan to
Purchase Assets of

$15 million
$1.2 million

$19.9 million

Purchase of Assets

$13 million

Facilitate Merger

Alaska Pacific Bancorporation
Anchorage, Alaska

$1.7 million

Loan to

$1.7 million

Prevent Closing

Bank of Oregon
Uoodburn, Oregon

1986
The TaImage State Bank
TaImage, Kansas

In addition there was one purchase and assumption transaction under section 13(f). In 1986, the FDIC purchased $240 million of assets in the Park Bank of
Florida, St Petersburg, Florida. There were four bids received for this bank, only one of which was from a Florida institution (a second Florida bank was
a subsidiary of a major out*of-state holding company and their bid represented those interests rather than the Florida bank's interests). The winning bid
was approximately $38 million higher that the within-state bid. In 1983, First National Bank of Midland, Midland, Texas and United American Bank,
Knoxville, Tennessee were offered for bid interstate under section 13(f). In both instances a within-state institution submitted the winning bid.

Figures displayed under the heading Current Bal. in reference to Income Maintenance Payments are the current (as of 12-31-85) estimate of the amounts that
the FDIC will be required to disburse given the current level of interest rates. Current estimates can vary significantly from original estimates due to
the terms of the assistance agreement and the difference in the level of interest rates.