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78-2

CONVENIENCE AND NEEDS CONSIDERATIONS:
A POST-AUDIT SURVEY
David R. Ailardice

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Research Paper No. 78-2

Convenience and Needs Considerations:
A Post-Audit Survey

By

David R. Allardice
Department of Research
Federal Reserve Bank of Chicago

The views expressed herein are solely those of the author and do not
necessarily represent the views of the Federal Reserve Bank of Chicago or
the Federal Reserve System. The material contained is of a preliminary
nature, is circulated to stimulate discussion, and is not to be quoted
without permission of the author.




Table of Contents

I.
II.

Introduction . . . . .

Page
........................................ .. . 1

Evolution of Convenience and Needs Considerations in Bank
Holding Company Legislation........................................ 2

III. Research Methodology, Objectives

andProcedures...........

8

IV. Application R e v i e w .................................................. 10
V. Analysis of "Realized11 Public Benefits.............................. 11
1. Impact on demand deposits.................. ...................13
2. Interest rates on time and savings accounts.................... 14
3. Alteration in loan rates and maturities........................ 16
4. Changes in the loan and investment portfolio.................. 17
5. Changes in physical facilities ................................ 19
6 . Changes in banking h o u r s ....................................... 20
7. New or expanded services....................................... 22
VI.

Reasons for Alteration in TargetBank’s Services .................... 25

VII.

Summary.............................................................. 28

VIII.

Conclusions and Recommendations...................................... 30

IX. Footnotes..............................................

35

Tables
Table 1:

Characteristics of Banks and Holding Companies Surveyes. . . .

Table 2:

Factors Responsible for Changes in Target Bank’s Services and
Operations................................................. 27

Table 3:

Summary of Findings................................ ..




12

29

I.

Introduction
Under

Board
of

of

bank

the

Section

Governors

of

of

the

the

Federal

formations

competitive

impact,

financial

the

community

to

be

shall

approve

not

country

may

be

monopoly..."
transaction
the

parties
served.
any

are

acquisition

it

to b e

are

required

to

changes

or

new

services

that

company

formation

within

Exhibit

Responses
detailed

that
the

will

with"

has

these

viewed
of

or

The
planned

failing
purpose

In m o r e

to w h i c h

in

basic

bank




relating

and

vary
to

or

Few

ever

the

acquired

bank

by
is

Board

to

create

tend

of

the
and

a

proposed
needs

requirements,

relating

to

proposed

proposed

holding

are

contained

"no

change"

forms.'*'

extremes

of

services

and

For
as

operations

the m o s t

being

part

"consistent

substantially

convenience
deemed

the

to

questions

involving

outweighed

that

the

the

the

applicants

cases

of

of

application.

by

needs

statutory

application

expanded

the

made

if

consider

future

convenience

These

between

of

application.

the

Y-2

new

statements

where

result

to

section

questions

approved.

approval

are

to

the merits

and

effects

these

the

to b e

and
in

needs
a

floun­

condition.
of

convenience

applicants

is

and

or

resulting

certain

likely

questions

issues

except

to

on

required

any

competition,

the

amended,

directed

in

In k e e p i n g w i t h

are

is

resources

has

effect

as

ruling

anticompetitive

by

respond

in

convenience

Congress

the

B o a r d ’s Y - l

upon
the

the

competitive

considerations
dering

the

provided

approval

adverse

to

of

that

acquisition

discussions

be

Board

D

the

lessen

served.

System,

Act,

acquisitions,

"whose

outweighed

applicants

or

to

finds

clearly

community

and

addition,

substantially

unless

or

Company

and managerial

involved
In

Holding

Reserve

company

of

to

Bank

holding

prospects

of

3(c)

this
and

Exhibit

terms,

holding

D)

the

study was
needs

have

to

determine

considerations

been

objective

companies

(those

translated

of

live

the

up

to

the

into

study

the

is

extent
items

to w h i c h
mentioned

realized

to

public

determine

commitments

made

the

the
by

benefits.

extent

relative

to

-2-

convenience
several

and

policy

specific

against
issues

and

cases

may
of

II.

calling

this

for

and

of

the

Evolution

deal

planned

public

benefits,

then

of

and

needs

slightly

the

latter.

The

considerations

in b a n k

holding

company

study,

research

and

(4)

techniques

conclusions

employed

and

considerations

adverse

of

of

Convenience

to

1933

the

Board

activities

"Banking

Act

of

control

over

companies

bank

to

the

interest."
"consider
its

the

in

competitive

remaining

development

of

legislation,

this

study,

recommendations

(3)

derived

from

Board
In

the

benefits




from

its

acting

upon

permit

of

and

nor

might

the

such

did

the

of

probable

the

arise

from

such

and

Act

Board

in

order

bank
upon

the

of

call

in

the
no

for

an

light

of

was

the

explicit

stock

the

of

in

"public
to

character

such

permit
made

surrounding

of

the

Act

mention was

issues

of

holding

1933

general

to

regulatory

directed

evaluation

transaction.

the

The

granting

competitive

bank

to v o t e

Board

passage

ineffective

required

applicant,
of

authority

the

subsidiary.
and

However,

a

With

1933

effect

1933 Act

statutory

The

the

recognition

no

limited

requests,

bank...'

the

given

decision

condition

had

companies.

any member

base

concerning

that

holding

companies.

of

Considerations

Governors

Board was

permits

financial

issuance

of

to

affairs

the Act

the

Needs

Legislation

bank

directors

management,

the

permit

of

of

holding

obtain

selection

directed

1933"

and

Company

the

in

favor

certain

translate

convenience
even

or

have

to

re view

regulate

upon

failed

realized

or

general

a brief

the

with

in

questions

(1)

Bank Holding

Prior

of

into
of

these

companies
to h a v e

adverse,
in

to

study.

in

the

shown

a balancing

determined

needs
of

can be

adverse,

be

Answers

If h o l d i n g

considerations

paper

discussion

findings
this

needs

already

convenience
a

companies

substantially

portions

(2)

considerations.

implications.

holding

convenience
future

needs

public

3-

-

In
until
bank
of

every

1955,

bills

holding

1956."

intended

session

law

to

its

guide

acquisitions,
by

were

(1)
character

of

or

not

of

system
in

the

The
the

same

factors

the

four

factors")
creating

(the

consider

are

competition
not

many

guide

Board

Terms

such

the

the

convenience,

area

concerned;

or merger
of

the

the

with

over

Company

holding

company

directed

of

the

company
(3)

Act

standards

3(c)

needs
and

or

the bank

control

Board was

prospects;

Act:

or

the

and

(5) w h e t h e r

consolidation
holding

adequate

preservation

to

as

"banking

adopted

in

the

and

needs

standards

express

effect

of

problems

Bank Holding
these

"adequate




(4)

extent

bank

the

of

1933

certain

Section

condition

of

of

company

and

sound

competition

of

surrounding

a proposed
call

and

that

their

requirement

that

Banking

factors")

concern

of

factors")

had

five
the

of

the

Holding
upon

the w i s d o m

of

basically

1933.

(the

However,

"competitive

potential

implementation.

transaction
for

Act

were

As

Company
the

for
Governor

Act

that

preservation

Solomon—

and

there

them around."^

the

competitions"

been

problems

"The

policy,
as

in

of

Act

Holding

concerning

the

and

scope

established

their

(referred

had

new

presents

of

Although

of

that

administrative

the

and

Banking

"Bank

(2)

consistent

interest,

factors

represented

Board

limits

"convenience

remarked:

or

the

enumerated

acquisition

size

the

Specifically,

history

and

the

banking.

three

Robertson

of

beyond

of

provisions

such

the

public

field

first

of

expand

passed

determination

concerned;

of

broaden

the Act

factors

financial

communities

involved

banking,

its

their management;

effect

to

in May,

consolidations.

the b a n k s

the

the
be

in

passage

further

provisions,

following

the
and

welfare

or

the

to

Congress,

Board

mergers,

companies

following

introduced

other

the

consider

would

Congress

companies.

Among
to

of

and

Company

standards

and

sound

"convenience

Act

were

of

vague

banking,"
and

1956

needs"

and

"public
were

established

standards

not

defined.

clearly

interest,"

left

to

"preservation

undefined

and,

as

4-

-

such,
the

became

Act

did

tion was

subject
not

that

equal weight

to

both

specify

each
in

of

the

how

the

Board
the

and

five

factors

factors

was

decision-making

judicial

of

interpretation.

should

equal

be

weighed.

importance

process.

As

such,

impacts

could,

a

Furthermore,
The

implica­

and would
case

carry

possessing

y

adverse
if

the

and

remaining

While
Merger
to b e
and

unfavorable

the

Act

of

four

Bank

forth

in

the

set

and

acquisitions

the

be

substantially

of

’’s o m e

both

and

Clayton

lessen

of

Supreme

Antitrust

Bank

case

of

social

and

the

be

Acts.

in

ruling

are

not

on

outweighed

1963

bank

the

economic

debits

as

set

which

on

and

standards

Supreme

mergers

justifiable

Bank

bank mergers

standards

In

that

subsequent

noncompetitive

antitrust

ruled

or

(and

Court

strict

competition”

reckoning

1956

competitive

the

theoretically,

adverse.

Act

the

apply

National

to

ultimate

to

not

Company

forth

tended

Philadelphia

were

evaluated,

Sherman

in

factors

Holding

1960)

considered

competitive

the

Court
nm a y

grounds

credits”

that

o
may

be

considered

further
acts,

beneficial

concluded

was

that

determined
alike,"

social

economic

A
issued
and

and/or
study
by

December

Board
of

acquisitions.^
competitive
1.

prevent

even

conducted

the

by

respect

factors

be

decisive

needs,

all

except

and welfare




to

Professor

appeared

In

interest.
of

the

anticompetitive
it m i g h t

Backman

passage

With

found

2.

light

of

The

Sherman

in

a

Supreme

and

mergers,

result

factors

Backman

bank

Court

Clayton

” the

antitrust

benign

certain

history

in

the

were

given

holding

of

published

and

amount

of

the

and
in

company

de

Act

in

1956

formations

and

needs,

and

and

following:^

conditions,

every

decisions

Company

convenience

B o a r d ’s

establishment

61

Holding

concluded

"satisfactory"

factor

the

Bank

the banking,

(financial

to b e

analyzed
the

connection with

were
a

Jules

between

management)
to

public

loss.

in

Banking

in

though

1962

factors

the

Congress,

to

the m a l i g n a n t

to

prospects,

decision

and

and

rarely

decision.

novo

banks,

only minor weight.

convenience,

As w i t h

banking

-5-

factors,
reason

this

for

factor

did

approving

or

not

appear

denying

to b e

a bank

either

holding

a

decisive

company

or

compelling

formation

or

acqui­

sition.
3.
factor

The
had

been

These
reflecting
of

needs,
great

competitive

conclusions,

for

the

the

and

policy

and

in

In

fact,

in

the

and
The

ations
holding

In

balancing

Reserve
to

competitive
conclusion

is n o t

In

accepted

the

Board

during

Act.

With

essential
early

each
of

that

Bulletin
place

by

needs

a bank
Board

the

the

second

interest

analyzed

a

is,

in

"segmented"
convenience,

as

three

separate

appeared

competitive
company
1956

years

convenience,

decision

the

on

the

were

analyzed

and

under

to

public

That

holding

importance"

factors.

case

Act

to

published

reflects

the

convenience

and

to

competitive

consider­

factors.^
"main weight"

surprising

for

it

reflected

applications

in

strictly

the

decisive

formative

adopted

factors.

final

the

applied

Board

cases

the

most

adequately

respect

decisive,

and

and

the

place

discussed

of

"special

not

the

as

decisions

the

needs

convenience
analysis

to

Board

perhaps

and

a number
of

are

reveal

and

considerations.

that

company

that

were

detailed

intent

previously

appears

aspects

first

is

"main weight"

part,

of

although

orders

the

Company

convenience

factors.

Federal

Holding

aspects,

analyzing

the

most

elaboration

Published

the

B o a r d ’s

Bank

perspective.

and welfare

upon

needs

the

however,

detail.

related

rest

as

approach

and welfare

needs,

that

the

in p r o p e r

approach

concluded

of

conclusion,

the

that

administering

aspects

study

to

nonfinancial

Board was

eager

to

was
the

given

B o a r d ’s p o l i c y

keeping with

sectors

adopt

the

of

the

strict

of

antitrust

evaluating
standards

economy.

In

fact,

standards

of

the

it

g
Bethlehem-Youngstown

steel

strable

irrelevant

benefits"

lessening

of




as

case,

competition may

which

and

of

result.9

viewed

no

The

"good

motives"

defense where

Board's

early

a

and

"demon­

substantial

decisions

indicate

-6-

that

its

policy was

bank

case,

in

that,

anticompetitive
reckoning

consistent with

of

bank

elements

social

or

standards

Bank Holding
defense

so

as

to

noncompetitive
3(c)

of

read

follows:

The

to m o n o p o l i z e
in any
tion
any

part

of

tion

or

would

effects
public
the

of

the

financial

companies
munities
Company

must

laws.

the

banks

Company

a

may

proposed

and

be




if

be

Act

changes

the

first

both

and

in

July

process.
of

or merger

1966

conspiracy

it

in

finds
the

the

proposed

any

other manner

anticompetitive

outweighed

Board

in

the

convenience

every

prospects

in

in

the

in m e e ting

served.

future

adopted

in

competi­

transaction

to b e

acquisi­

effect

lessen

the

clearly
of

a monopoly,

section whose
to

to

or

of b a n k i n g

other

needs"

considerations,

or

any

the

and

case

of

the

needs

to to w h e n

to

consider

company

of

the

the

or

com­

Bank

Holding

1970.
in

Supreme

the

amended

the bus i n e s s

and

were

strict

"convenience

amended

or which

are

of

combination

community

and

ultimate

in

this

effect

resources

nsome

decision-making

substantially

directed

possessing

result

(2)

unless

the

to

the

1966

Court

and

1970

decisions

outweigh

transaction must

determine whether

Second,

of

concerned,

argued

or

under

a

1966

acquisition

any

transaction

specified

Act

any

a monopoly,

needs

in

Act was

of

States,

probable

These

amended

the

to m o n o p o l i z e

trade,

amended

served.

was

that

and

the

procedures

benefits

the

in

section which would

of

and managerial

to b e

The

justify

and

Act

Holding

by

convenience

competitive

furtherance

proposed

interest

to

a p p r o v e (1)

create

in

addition

Company

of

application

include

country may

to

and

to

considered

attempt

restraint

Furthermore,
the

not

acquisitions

Acts

consolidation

the

tend

in

be

this

in

or

of

to

be

in

the United

or m e r g e r
section

that,

to

banking,

Bank Merger

Philadelphia

credits."

Congress

of

the

the basis

field

would

be

and

on

the

shall

or

justified

in

and

to

under

or which would

be

debits

Bank Holding

Board

consolidation

not

formations

C o u r t ’s a d h e r e n c e

insure

the

company

expressed

the

and

factors

Section
as

to

Company

would

economic

Dissatisfied with
antitrust

holding

the views

meet

amendments

have made

anticompetitive
a

twofold

it

test.^

or

acquisition

offends

question

is

answered

the

the

clear

aspects

formation

in

to

the

that

and

First,

Bank
the

thus
the

Board

antitrust

affirmative,

-7-

it m u s t
the

be

determined whether

grounds

that

the

and

needs

"convenience

and

needs"

be

inure

to

obtainable

lative

clearer

than

January
period

of

74 w e r e
tive

analysis

denied.

due

one was

or

Of

a

on

the
no

formation where
However,

tive

were

analyzing
some

existing
of

basis

these

future

or

analyzed

by

somewhat

more

competitive




Backman,

issues.

of

found where

convenience

Board

and

state
the

not

legis­

greatly

that

no

five

issues
appears
needs

decisions

factors

the

five were

In
an

involved
relating

the
to

review­

were

adverse"

competi­

relative

considerations

In

elimination

elimination

the

of

concentration
to

have

slightly

and

acquisi­

effects

the

and

competi­

considerations.

involved

involving

For

law.

"slightly

that,

The

issues,

approved

to

between

on

and

banking

needs

tends

approved

denied

competitive

eight

1974

issues.

factors

Board

where
and

and

456 w e r e

banking

adverse"

approved

it

were

Bulletin

44 w e r e

banking

a violation

general,

the

observations.

of w h i c h

of

convenience
in

following

adverse

involved

the

must

Board were

1971

Reserve

denied,

competition,

two

In

important

the

found

the

competitive

Federal

and

it w a s

and

to

competitive

by

potential

resources.

given

reviewed,

were

analyzing

the

benefits

benefits

procedures

between

of

cases

cases

competition

banking

18

Board

the

to

simply

on*

Act.

the

"substantially

outweighed
18

due

to

not

In

guide,

and

applications

denied

means.

by

Furthermore,

these

by,

in

were

and

the

yield

instance was

present.^

of

74

combination

cases,

issues

1974

and

justified

outweighed

served."

that while

still

forth

cases

the

24 w e r e

denied

these

tion

to

set

is

clearly

in na t u r e ,

original
on by

nonetheless

are

transaction;

used

the

emphasis

530

the

to b e

December

public

evident

acted

Orders

and

grounds,

denied

ing

major

Board

1971

cases

be

is

to b e

anticompetitive

appears

in

effects

community

of

less

they were

that

of

it

of

the

must

standards

review

indicate
review

the

of

parties

through

changes,

modified,

A

the

transaction

anticompetitive

"convenience

which

the

the

cases

become
adverse

8-

-

This
ations

discussion

and

of

Board

of

the

evolution

interpretation

of

of

the

these

convenience
issues

and

leads

to

needs
the

consider­

general

A

theme

of

provide
these

the
in

III.

is

discussed

of

needs

a

become

are

providing

studies
(both

in

have

the

acquired
of

efforts

into

necessary

applications
services
the

changes

or

be

were

to w h i c h

applicants

factors

the

and

benefits?

planned

to

to w h a t

extent

Each

these

of

have

forth

in b a n k
upon

holding

approval
or

in

their

relating

to

changes

acquisition

data
in

for
an

this

effort

that

applicants

Then

by

"planned"

a

public

needs

to

a

in

company

of

the

has

to

"planned"

the

bank

bank

holding

to

performance

of

To

company

upon

survey

the

provide

of

in

approval
the

determination

can be

made

benefits

become

"realized"

have

banks

research

changes

institute

numerous

companies,

holding

those

"post-audit"

companies

Whereas

constrained

determine

convenience

application.

holding

bank

determine

applications,

developments."^

past

"planned"

conducting

approval,

by

study,

not

was

applications.

measures
and

project

to w h i c h

forth

convenience

upon

research

is w h e t h e r

quantifiable

of

Procedures

extent

benefits

set

and

instant

answered

reviewed

policies

set

novo) upon

empirical

implemented

actual

concerning

benefits.

Bank
within

area

application.

extent

public

de

the

public

statistically
the

as

conducted

and

have

public

Objectives,

survey,

services

been

needs

realized

of

"post-audit"

to

and

what

turn.

objective

question

absence

the

become

"realized"

basic

To wit,

convenience

considerations,

The

of

of

changes

primary

means

have

the

project.

Research Methodology,
The

and

the w a y

planned

issues

by

research

holding

the




Seventh

company
Federal

applications
Reserve

submitted,

District

approved,

between

January

and
1,

consummated
1971,

and

-9-

December

31,

1976,

were

reviewed

benefits.

The

review

process

Wisconsin—

the

states

within

multibank

holding

acquisitions

one-bank holding

acquiring
eral

panies,

bank

company

These

examination

necessary

information was

for

its

where

adequate.

In

received

a

needs

they

of

factors,

statements.

A

cations

in

services

company

applications

One

of

advantage

strained
cedure
between

by

is

that

the




the

the

two

method
also

are

commitments
secondary

creates

types

of

of

minor

One

problems

of

bank
that

or

that

and

allow

primarily
number

and

modified

in part,

banks

and

personal
of

questionnaire
the

elaborate,

to

the

to
of

company was

extent
holding
the

company

to

the

the

sev­
com­

obtaining
(copy
time

the

attached
required

was

not

surveyed
convenience
of

its

to m o d i f i ­

filing

to w h i c h

of

from

interviews with

aware

respondent

disadvantage
respect

to

relating

currently

the

via written

company

pertaining

by

holding

question(s)

holding

information

the

or

to

holding

with

Michigan,

limited

to m i n i m i z e

each

is

a

timely means

Applicants

procedure

responses.

and

application

on previous

format.

however,

instituted

response

discuss

limited

public

reviewed.

encouraged

each

planned

District

review was

a mail

obtaining

to

Reserve

structured

employed.

requested

questionnaire

use

their

of

Iowa,

reports

direct

was

that

of

either wholly

questionnaire,

insuring

states

directories,

,,y e s ,,- ,fn o n

of

the

services

bank

were

the

also

annual

the

of

the

were

the m o s t

portion

was

this

it

include

nature

Federal

obtained,

through

to

secondary

prior

be

that

a

thus

complied with

can

felt

the

to

the

companies;

to b a n k i n g

Respondents

addition

copy

holding

questionnaire

completion.

responses,

and

decided

The

Seventh

reports,

It w a s

A).

limited

Furthermore,

sources

bankers.

as A p p e n d i x

identify

applications

pertaining

holding

sources.

the

by multibank
company

Information

was

companies.

made

to

holding

they

have

applications.
is

not

secondary

lack

of

con­
pro­

uniformity

-10-

IV.

Application Review
In

of

the

all,

a

total

survey:

companies

were

sition

42

of

An

18

the

application
relate

to

changes

fications

to

the

charges

nine

(or

"no

applications

(o r

62

in

rates

paid

other

lending

terms.

the

applicants

The

general

review

companies1 replies
and

It w a s
or




contacted

1

in

with

Iowa.

in

the

These

respect

to

that
these

refute

this

that

of

Exhibit

charges

on

demand

portfolio.
that

they

time

course

holding

the

acqui­

paid

on

impression.

Of

29

(or

and

and

applications

to
50

on

proposed

be

"no

and

are

replies

and

that
being

to

69

change"

prior

the

that

to

few

and

"no

in

physical

modi­
re­

change"

stated
and

that
seven

they would

deposits.

indicated

that

the

in

physical

percent,
in

either

receiving
substantial

proposed

by

there
of

Thirtyacquisition
or

facilities

respectively,
of
the

these

of

areas.

holding

modifications

bank

questionnaires

in

raise

maximum maturities,

changes

percent

accounts,

accounts,

savings

loans,

questions

applications

to m a k e

indicated

the

and Y-2

six

changes

percent)

savings

time

rates

69

These

terms,

42

in

information with

deposit

the

made

the Y- l

D.)

loan

planned

percent)

impression

the

of

in

applications

were

D

changes

there would

factors

Exhibit

hours,

interest

the

general

deposits,

reviewed

42

in

statements

savings

16.7

hours,

needs

and

on

respect

and

copy

accounts;

paid
(or

in

With

believed

time

rates

the

produced

needs

a

indicated

in b a n k i n g

of

on

deposit

change"

stated

for

investment

raising)

"no

confirm

and

following

forth

service

rates

of

B

the

set

banking

reviewed

produce

panies.

in

percent)

modifications

and

demand

change"

and

of

percent)

on

convenience

questions

changes

would

convenience

six

loan

consider
93

were

questionnaire

yielded

(See A p p e n d i x

applications

(or w o u l d

companies

in Wis c o n s i n ,

the

"planned"

modification

service

42

12

complete

the

interest

26

the

to

first

viewed,

be

42

forms.

facilities,

would

of

expected

in

holding

banks.

above-mentioned
to

31 b a n k

in Michigan,

asked

analysis

respect

of

holding

would

com­

either

in

-11V.

Analysis of ,tReali2ed,l Public Benefits
Utilizing

in b a n k
to

holding

actual

total

24

44

bank

the

banks

Michigan
of

companies

the

million
to

terms

the

of

and

these
seven

application




average

two

in

public

the

these

With

44

within

44

the

detailed

analysis

applications

Table

two

1

as

1976,

December

applications

involving

Iowa

31,

the

an

average

Iowa holding
size

respectively.
are

questions

set

forth

asked

in

of

The

the

a

detailed

and

Exhibit

D

all

of
In

the M i c h i g a n
Wisconsin

banks

breakdown
the
terms
banks

also

surveyed was

of

the
of

Dis­

holding

company were

findings

below

the

submitted

companies.

involving

a

14 b a n k h o l d i n g

for

of

of

Reserve

applications,
holding

of

by

relative

operations,

were

Federal

submitted

(See
of

and

Seventh

were

exception

a

provided

information

services

involved multibank

applications

forms.

for

These

(information

collecting

b a n k ’s

of M i c h i g a n .

million,

specific

secondary

of

selected

benefits.

Eleven

applications

$14.0

were

the

size,

and

methods

applications

state

and

acquired

located

analyzed

In W i s c o n s i n

relative

made

$29.1 million.

and

analyzed.

Y-2

the

applications

surveyed was

$18.7

in

of

analyzed.)

deposits,

applications)

companies

majority

located

(questionnaires)

applications

realized

holding

The

companies
of

company

usable

versus

trict.

primary

modifications

of

planned
by

the

the

survey

discussion

the

is

B o a r d ’s Y - l

in
and

-12-

Table
Characteristics

1.

of

Banks

and

1
Holding

Companies

Surveyed

Location.
Number

of

Number

banks

State

holding

of
companies

Iowa
in

2

SMSA

not

in

0

SMSA
31

Michigan
in
not

in

12

SMSA

11

Wisconsin
in

5

SMSA

not

in

6

SMSA
44

Total
Bank

3.

14
19

SMSA

size,

deposits

as

of

State

Mean

26

December

31,

1976

(million

$).

Largest

Smallest

Iowa

14.0

14.6

13.3

Michigan

29.1

175.6

2.7

Wisconsin

18.7

33.4

8.8

Holding

company

State

size,

deposits
Mean

as

of

December

31,

Largest

1976

(million
Smallest

Iowa
Michigan

501.8

501.8

501.8

987.4

4,801.7

22.5

Wisconsin

526.7

2,356.7

10.2




$),

-13-

1.

Impact on demand deposits - Question 1
Exhibit

made

in

the

benefits
are

should

question

of

of

asks

target

lowered

cost

D

or

new

generally

service

ceteris

types

fall

of

into

indicate

charges

paribus,
accounts

two

(e.g.,

the m i n i m u m b a l a n c e

required

for

or

types

of

tailored

accounts
for

Twenty-five
their

"no

accounts

had

checking
that

instances

the

offer

some

the

target

determine

of

that

persons

bank.

65

the
In

years

bank would
indicated
whether

deposit

or

to

this

affecting

charges

of

charges

Responses

(2)

types

Public

service

directly

service

(or

the

cost

adopt

offer

age)

any

or
of

or

changes

the

lowering

in

statements

percent)
bank

types
the

either

the
or

quan

ac­

of

demand

or

indicated

there would

reviewed
full

had

be

deposit

applications

limited

checking;

six

applicants

overdraft

checking;

and

in

analyze

changes

were

provide

or would

mail

the

four

situation

necessary.
itemized

the

(e.g.,

free

they would

services,

56.8

target

they would

not

that

of

eight

of

that

or

changes

of

surveyed

they would

over

b a n k ’s

be

customers).

either

indicated

demand

post-audit

plied with

mined

target

(1)

that w i l l

accounts.

available.

special

acquisition

to

target

made

changes

To

and,
a

lesser

statements,

statements

to

customers

service.

The

deposit

the

applicants

packages

a new

respect

the

of

deposit

checking")

(e.g.,
of

nature

demand

lowering

"free

classes

upon

if
are

applications

that

applicants

approval,

extent,

by

44

indicated
for

indicated

upon

the

made with

provided

applicants
free

of

applications

change"

provided

certain

on

the

categories:

accounts

counts

as

b a n k ’s

to

deposit

tity

in

applicant

result,
if

demand

the

the

planned

services.

not




to

revealed

have

that

changes

Eight

of

complied—

the

32

out

affecting
audited

to v a r y i n g

of

the

either

44

applicants

the

applications
degrees— with

cost

or

(7 3 p e r c e n t )

quantity

(1 8 p e r c e n t )
the

changes

of

were
set

com­

demand
deter­

forth

in

-14-

the

application.

making

"no

In

change"

four

in

out

demand

of

these

deposit

eight

costs

cases

or

the

applicants

had

planned

However,

the

post-audit

services.

on

i
revealed

that

varying

degrees

ments

or

cient

funds.

the

by

raising

checking
of

they had

In

costs

in

raising

the

cost

the

other

or had

survey had

not
that

cases

was

due

rising

their

plans.
four

to h a v e

of

the

provided

44

example,

required,

due

to

cases

one

Another

approval

the

the

which

analyzed
and

it

pressure,

applicant
an

to

had

the

had

had

of

planned

expanded

as

them

applicants
proprosed
to m a k e

service

on making

selection

by

of

the
the
in

were
in

"no

lower
time

holding
these

carry

out

determined

their

appli­

change"

charges
"no

require­

either
of

to

on

change,"

checking

to

insuffi­

compliance

for

been

the

and

to

Responses

proposed

lower

accounts

with

planned

services

absence

(9 p e r c e n t )

that

had

impossible

above what

applicant

accounts

changes.

the

deposit

minimum balance

against

expanded

for

made

demand

increasing

proposed

reason

of

applicants

provide

instituted

cost

processed

cases
to

over

competitive

accounts.
to

costs

services

For

subsequent

four

the

charges,

checks

the maj o r

cations.

mercial

for

instituted

reveal

In

raised

service

intended

companies

to

effect

was

com­
but

account

services.

2.

Interest
The

ceteris

be

time

savings

accounts

of

the banking

public

paribus,

by

an

in

two

of

Exhibit

made

in

the

Twenty-four
alteration
(type)

on

segment

Question
will

rates

of

out
in

of




D

the

44

the

that

rates

offered

by

paid
the

on

paid

on

of

paid

on

2

net

time

applicants

b a n k ’s r a t e s
applications

Question

composed

rates

requests

target

either

accounts

increase

-

savers
and

time

and

(54.5

time

savings

target

bank.

savings

benefit,
deposits.

indicate whether

surveyed
and

will

Eight

savings

percent)

any

changes

deposits.

envisioned

accounts

applicants

or

the

no

quantity

indicated

-15-

that

they would

eight

stated

Christinas
The
"no

that

Club

not

savings
were

savings

in

to h a v e

posed.

Both

and

applicants

perceived
these
have
of

demand)

expanded
six

reason

indicated

Six

of

the

the

alteration

in

regulation

be

providing

introduction
deposit
reviewed

and

of
a

had

new

the

to

the

savings

or

time

than

Q).

over

of

applicant

survey,
deposit

In

and

range

none

had

that

the

of

above

proposed
of

the

accounts

to

since

no

the

(32 p e r c e n t )
rates

paid

instances

of

were

on

time

community

acquired

in

b a n k fs

that
by

where

time

of

of

have

determined

The

discussed
were

change
of

of

acquisition.

Four
had
major

as

an

found

involved

certificates

the

according
lowered

to

a modification

banks

variety

and

(no

institute

interest

been

the

In n o n e

accounts,

c h a n g e . 11

had

the

level,

rates,

were

(primarily

expanded

banks

"no

to

pro­

application.

rate

there

law

the

of

interest

bank

and

(4 p e r c e n t )

types

(1 4 p e r c e n t )

accounts).

the

institute

new

forecast

acquired

to

addition

cases

lower

planned

the m o d i f i c a t i o n

forecast

was

(e.g.,

passbook

two

anticipated

the

the

accounts
of

and

(e.g.,

comply with

target

had

had

interest
Only

of

been

payable

two

in

reviewed

in plans

interest

accounts,

accounts

reviewed

there was
part

application

of

types

broader

sponses




amount

services

more

alteration

in

either
the

to
the

applications

revealed

(increase)

failed

on

savings

savings

applicants

applications

involved

that

the

24

offered.

had

of

acquisition.

whereas
the

types

expanded

accounts

interest

this

or

either

no

by

new

certain

alteration

or

whereas

for

of

of

instances

applications

given

14

on

upon

that

some

services

increased,

offer

applicant

these

services.

the

been

of

only

types

the

paid

accounts)

made
or

found where

rates

revealed

fact,

accounts

the

the

they would

post-audit

change,"

found

raise

the

to
the
of

applications
to

the

rates

re­
paid

on

-16-

3.

Alteration In loans rates and maturities - Question 3
Question

cant's

three

comments

of

rates

found
on

of

these

would

on

indicated

dents
all

respect

to

indicated

certain
that

and mortgage

loan

audit

this

providing

had

rates;

changes.




with

of

bank.

as

changes,

such

as m o r e

of

they

that

that

the
had

been

they

had

indicated

its

application

however,

lower

not
Six

in

response

b e e n made.
of

rates

the
or

outside

to

It

companies
expanded

the

did

and

survey

state

that

(14 p e r c e n t )

terms

over

it

and

and

of

the

were
above

rates

ex­

rates).

for

with
Most
The

automobile
that

extended

determined
their

or

change."

rates

lower

in

some

Except
"no

of

respon­

pressures.

had

they

others

terms,

indicated
it

that

alteration

be

it w o u l d

in any

Seventeen

interest

competitive

interest

interest

terms.

or m o r t g a g e

that

in

comply with

there w o uld

automobile

to

no

surveyed,

change"

lower

Seven

increased

loans,

indicated

made

to

appli­

the holding

flexible

bank.

rates

that

"no

acquisition.

unable

loan

of

commercial);

they had

target

to

(e.g.,

upon

due

in

they would

on

changes

be

Three

the

the banks

Thirty-one

such

changes

to

any

there would

that

for

rates

respect

loans,

for

ask

interest

terms.

applications

loans

Y-2

to m a k i n g

target

respect

found

in

increase was

however.

either

of

and

With

that

indicated

that

their

it w a s

reduction had

terms,

in

types

the

acquisition

changes

other

indicated

analysis

Y-l

themselves

of

types

indicated

R.

changes

indicated

three

percent)

upon

indicated

applicant

proposed

(39

F.

terms.

or

institute

and/or

terms

upon

loan

committed

specific

proposed

all had

However,

other

terms,

or

the

other

acquisition

they w o uld

(16 p e r c e n t )

of

one,

upon

surveyed

rates

few

expected

(70 p e r c e n t )

certain

loan

any

competitive";

that

banks

loan

very

surveyed

"remain

tended

and

any

forms

maximum maturities,

factors

(usually

the

that

loans,

companies

Board's

concerning

maximum maturities,
it w a s

the

the
some
to b e

anticipated

-17-

All

of

these

Involved

interest

or maturity

rates

some

on

various

4.

In
the

of

in

the

composition

not

they

Most

applicants

investment
indicated

loan

four
of

they

had

fact

made

the most

and

Investment

surveyed

quently
the

makes
the

had

are

made

an

that

"no

they

extension

in

portfolio

requested
and

detailed
the

some
Only

the

to

change"

had

of

12

of

discuss

to

changes

the

in

either

maturity

lowered

dates

for

only

in

expected

the

a

of

the

in

While

question,

some

more

often

generalized manner.

acquired

bank's

reviewed

acquisition

the

changes

portfolio.

this

in

upon

7 of

composition

4

applications

change"

that

Question

investment

alteration

"no

found

-

responses

proposed

to m a k e

it w a s

change

loan

or

to

lending

one

discussed

or more

the

of

a

of

applicants

acquired

loan

or

(27 p e r c e n t )
the

(16

bank's

portfolio
or

terms

(16 p e r c e n t )
proposed

bank.

of

of
were

a

nature.

certain

the

target

percent)
loan

or

dollar
be

found
For

to

type(s)

of

lending

one

bank.
or

The

involve

lending,

and

However,

none were

the

the

a

two

planned
able

Only

holding

to

infre­

seven
of

of

non-

companies

Increase
comply

share

specifics

Only

instances

to

appli­

specific

lack of

difficult.

example,

to

of

amounts

changed.

respect

Many

acquired

compliance,

changes.

agricultural

acquired

at

that w i l l
lack

implemented with

expand

lending)
in

and

quantitative

they would

compliance,

increase
at

are

planned

installment

investment
of

changes

that

applications

of




the

portfolio

changes

evaluation

planned

part

expand

the

reviewed

sumer

and

both.

indicated

(e.g.,

compliance

anticipated

portfolio.

For

activity

of

no

are

to m a k e

planned

post-audit

cants

or had

had

responded

b a n k s ’ loan

discuss

or

Upon

loan

that

they

investment

target

proposed

portfolio,

investment

loans

and

to

bank.
in

of

specific

tended

that

however,

applicants

the

provided

than

companies

loans.

Question

applicants

terms;

catagories

types

Changes

holding

con­

due,

-18-

according
loan.

the

While

planned
This

to

applicants,

these

areas,

they more

substitution

loans)

makes

companies

it

to

were

often

effect

an

to

not

than

(e.g.,

difficult

absence
able

not

demand

to

increase

expanded

commercial

evaluate

of

the

for

particular

lending

loans

loans

the

in

an

company

activity

in

alternative

substituted

holding

type

for

of

the

area.

agricultural

impact

on

"net"

public

benefits.
Some
target

applicants

bank,

such

as

lending

guidance

quality

of

lack

compliance)

of

highly
loan

the

subjective.

profitability
of

had

not

do

not

and

company

investment




changes

by

refute

conclusions
are:

as

(1)

alterations

to

it

upon
the

is

that

the

an

as

beyond

scope

the

clear

that

in

of

b a n k ’s

changes

However,

effect

alterations

that

a

quality

of

this

this

the

measure
study

and

changes

holding

and

of

the

particular
com­

investment

being

results

made
this

relationship

existing

the

b a n k ’s

acquired

in

planned

the b a n k

are

(or

is

surrogate

loan

supply

aspects

of

the

overall

changes

the

from analyzing

is

and

of

of

compliance

and

catagories

the a c q u i r e d

cause

of

the

qualitative

analysis

in

analysis,

improve

degree

a majority

acquisition.

and

of

or

assertion

derived

acquisition

administration
bank,

to

the

upon

the m a n a g e m e n t

loan

or

post-audit

to

resorting

different

changes

involving

relating

confirm

factor

loan

acquired

analysis

acquisitions

portfolio.

the

an

b a n k ’s p o r t f o l i o s
proof

b a n k ’s

Determination

judged

basic

on

qualitative

such

to m a k e

conclusive

holding

be

needs

(2)

to

Improvements

The

and

the

proposed

However,

plan

portfolio
acquired

with

associated with

b e e n made.

panies

improve

portfolio.

necessarily

convenience

certain

expertise

might

compliance.

would

to

and

loan

portfolio

propose

in

the

study
between

loan

and

are

-19-

5.

Changes

in p h y s i c a l

Applicants
be

made

from
and

in

the

the n e w

are

convenient.

ated

ih

their

not

In

Sixteen

the

six

cases

cants

had

yet

facility

has

sition),

it

plans

for

more

phies,

its

not
is

the

which

application

have

not

changes

that

the

of

cases

involving




(25

a new

involving
higher

approval

demand

percent)

physical

facility

priority.
the

the

bank.

for

were

facilities

it

determined

over

and

the

in

intended
to

and
This

near

the
that

facili­

forth

of

the

in

appli­

the

after

new

acqui­

responded

since

the

that

company

philoso­

indicated
to

had

the holding

and management

respondent

only

company

that whi l e

company

drive-in banking
for

that

set

One

indic­

acquired

where

delayed

response

adequate

as

three months

procedures
Another

the

holding

instances

been

banking."

unwarranted

it w a s

had

In

the

holding

application

drive-in

cost

facilities

Another

efficient

found

facility.

and

more

alteration

indicated

(one y e a r

facilities
for

a new

alteration

in

facilities

involved

build

operating

of

at

additional

such

cases

that

benefit

(36 p e r c e n t )

it w a s
any

that w i l l

should

banking

change"

made

changes

public

make

"no

not

any

surveyed

determined

considered.
of

that

in p h y s i c a l

established

parking
a

these

The

post-audit

had

it w a s

planned

facilities"

indicated
that

of

its

received
upon

banks

changes

discuss

companies

upon

they would

being

problems

had

indicated

11

that

been

still

that

construction

six

construction

cant

In

yet

banking

indicated

All

to

facilities

However,

planned

five

they would make

acquired

comply with

basic

drive-in

the

indicated

to

that

5

facilities.

holding

(14 p e r c e n t )

application.

company

of

facilities.

complied with

their

had

banking

of

Question

in Q u e s t i o n

modernized

(20 p e r c e n t )

ties.

-

b a n k fs p h y s i c a l

applications

b a n k ’s p h y s i c a l
nine

requested

acquired

and

facilities

in

its

"construct

survey,
the

the

appli­

"customers

applicant
facilities

further
made

the

future.

that

the

applicants

had

made

above

the

planned modifications.

-20-

In nine
that

out

"no

or

noted

that
had

that

cations
question

planning
holding

6.

in

six of

tion.

should

the

target

would
the

to m a k e

Five

be

the

bank's

given

to

30

to

be

in

to

1975.

can be

However,

From

the

the

expected
to

It

to m a j o r

adequately

to m a k e

If

to

this
modi­

after
are

acqui­

not

investment

such

conveyed

be

appli­

major

years

capital

facili­

should

whose

companies

acquired banks.

being

the post-audit

responses

four

holding

applications

new banking

companies

three

respect

their

facilities.

holding

about

in

constructed

existing

that

their

is n o t

and

long-range

in

their

bank

that

such

of

6

applicants
target

increased

change"

hours

Question

the

hours

bank's

hours

the

bank

of

operation,

(68 p e r c e n t )

they would

expand

(12 p e r c e n t )

operation;

however,

expansion

after

reviewed

indicated

any

bank's

the

the

the

hours

of

indicate

The

acquiring
of

the

specific

they
target
on

any

In general,

acquired were

open

holding

applicants

company
surveyed

hours

of

commitment

indicated

that

acquired.

the

of

operation.

to

opera­
expand

consideration

bank was
part

either

application

target bank's

no

intention

to

operation.

or both.

Nine

made

of

to b e

where

hours.

target

requested

if

an

the

are

in banking

applicants

decrease




to

Exhibit D

instances

indicated
of

-

convenient

"no

applications

company

respect

be made

or more

percent)

in

appears

it

either

companies

forecasting with

in banking hours

review disclosed

(20

also

facilities.

involved
prior

indicated

applications.6

benefits

planned

of

facilities

conducted,

that w i l l

longer

or

holding

programs with

In Question

for

had

remodeling

during

It

had

in physical

companies

physical

sooner.

is b e i n g

applicants

applications

that

long-range

Changes

public

holding

approved

their

company

changes

the

be made

these

appears

to

remodeling

of

been

if n o t

engaging

cases

would

these

all

it

fications

11

conducted major

had

sition,

the

change"

revealed
ties

of

the

None

acquiring

of

-21-

Up on post-audit
complied
as

with

planned).

change

in

the

applicants

the

planned
"no

audit

their

planned

alteration

in

banking

It

noteworthy

the

at

stance

being

primary

b a n k 1s h o u r s

of

operation.

only

In

the

open

three

cases

by

applicant

had

to

that

changes

firms
made
not

that
no

by

that

of

the

planned
the

hours

as m u c h

as

indicated

in

target
the

hours

during which

were

operation

the ma i n

decreased

planned




of

but

by
not

or

(2)

for

hours

may

a

may

have

have

drive-in
open.

per

instituted,

On

week.
the

the

target

planned

the

In
the

the

to

post­
opera­

banking
one

in­

target

machines

for

no

above

b a n k fs

at

teller

surveyed

and

additional

hours

change"

made

had

However,

bank

(ATMs).

extension

of

service.
that

banking

38

extended

been

one

a net

but

instance

convenience

three
and

the

it

the

b a n k ’s

cases
needs

of

either

reduced

reduced

case

the

indicated

percent

operating

basis

In all

each

they

hours

slightly

office

applicants
In

however,

operating

In

the

hours.

approximately

expand

over

office(s).

operation;

is,

to

in

"no

had

(18 p e r c e n t )

applicant

determined

application.

hours

bank was

£.5

That

their

b a n k ’s o p e r a t i n g

it

cases

providing

that

made

hours

the

branch

added

of

the

automated

alteration
hours

eight

expanded

or b y

the

was

intended

In

had

(75 p e r c e n t )

(59 p e r c e n t )

operating

companies

in

percent)

they

had

24-hour

interest

operating

the

of

(or

operation.

indicated

b e e n made.

that

of

or m o r e

holding

in

operation

hours

stated

one

applicants

hours

instances

Saturday

company

expand

not

these

at

change

extended
hours

had

or

(6.8

their

had

on

installation

customer

planned

of

the

applicants

expanded

companies

either
bank

have

b a n k fs h o u r s

eight

comply with

such

each

holding

given

was

to

target

these

the

reason

hours

to

of

the m a i n

via

of

26

determined

responding

expanded

failed

that

either

operating

in

33

that

alteration.

by

the

In

is

were

revealed

hours

The

that

change"

ting hours

were

determined

acquired

the

make

it w a s

the
(1)

hours

but

appears
in

that

number
total

where

it
of

hours

longer

considerations,

-22-

expressed

in

the

approval

order,

slight weight

toward

approval

were

one

the

the

cited

as

acquisition.

cial

7.

or

expanded

Question

seven

indicate which
the

many
a

the

result,

the

applicants
For

example,

to

Question

It

should

an

list what

also

be

appears

specific

issues

if

is

there
be

question by
of

the

may

noted

new

in

to b e

demand,

little
The

six new

or

they




remaining

often

than

to

be

hours

approval

issues

in

the

as

or

of
finan­

the

deposit

response

survey

three

D.

impression

As

that

provided.
in

response

might

be

termed

Frequently,

an

applicant will

for

regard

these

that,

instituted

(6.8 p e r c e n t )
no

on

new

indicated

to

services
they

and

service

average,

holding

acquisition.

responded

that

the

the

upon

two.

a

services,

specifying when

to b e

applicants

listed

Question

reveal

institute

approval

Exhibit

be

to

to

demand
to

upon

program

possible without

given

of

reality will

same

applicants

frequently

sections

employ what

or

the

introduced

leaves

savings

services

only

43

banking

from

asks

applicants

question.

is

forms

will

that

need

this

planned

lent

issue.

in p r e v i o u s

a new

any

improved

stating

The

found

this

of

surveyed,

application.

expanded,

attention

applications
that

competitive

applicants

is

arise

and

7

services

results

were

provided

to

there

cases

services

most

as m a n y

to

cited

have

responding

were

application

or

mention

Furthermore,

which

application

more

consistent with

significant

it w a s

an

also

that

a

Y-2

were

of

may

of w h e t h e r

mention

the

that

provide

be

and

either

reading

and

instituted.

companies
Of

a

the Y-l

applicant

seven

-

Generally,

to

"shotgun” approach

will

Question

of

first

three

services

services

intend

benefits

these

to b e

application.

to

services,

same

of

the

found

considered

acquisition.

of

of

public

In n o n e

considerations

New

of

of

were

to

upon

this
approval

intended

to

-23-

institute
a

great

review
were

new

deal
of

or
of

the

Thirty

services

variation

planned

proposed

expanded

expanded

new

in

about

30

service

which

was

out

of

44

(o r

68

in

the

or

improved

different
to b e

either

upgrade

acquired

bank.

second

most

computer

services.

services

would

the

acquiring

more

services,

the

11

accounts

loan

establishing
is

in-plant

much

service will

acquired

via

cost

most

surveyed
novo

trust
new

applications

or

mentioned

lending

provide
of

Other

and

what

any

specific

local

by what

The

demand

amount

the

lead

lead

computer
bank

with

one

or

of

the
audit
and

included

services,

survey

assis­

assistance,

and

provided

the

to w h e n
the

of

agricultural

branch

to

of

finance,

and

information

it w i l l

that

result

banks

financing

for

the

introducing

a

consumer

exists

upon

service was

and marketing

reference

services.

expanded

mentioned

services,

municipal

programs.

lacking

services

expanded
finance

as

or

at

commercial

advertising

new

implementation

acquired

leasing,

financing.

the

limits

the

services

that

indicated

applicants

expanding

A

services

through

discussed

trust

indicated

Fifteen

14

that

to b e

frequently mentioned

acquisition was

de

appears

proposed.

reveals

or

assistance,

or

services

subsidiary

banking

implemented,

There

a

purchasing,

banking

frequently

will

the

be

management

upon

reviewed

introduction

central

of

proposed

The

provide

applicant-sponsored

services
the

the

or

they would

international

personnal

applications

that

areas.

another.

kinds

services

system(s),

receivable

management,

services,

tance,

of

either

10 m e n t i o n e d

stated

introduction

the

card

or

frequently mentioned

company.

credit

7 discussed

and

portfolio

in

bank

programs,

affiliation,

payroll

provided

holding

national

training

be

and

applications

they would

of

type

provided

percent)

Ninteen

one

number

approval

The

of

in

aforementioned

service,

cost

aid

and

reductions

how
at

bank.

Given the generalized nature of these responses, one finds, as expected, a
substantial amount of deviation between the planned and the realized changes in




-24-

this area.

Thirty-two out of the 44 companies surveyed (73 percent) were shown

to have deviated from what they had originally stated in their applications.

Of

the 32, 26 were not able to comply completely with either one or more of their
proposed changes.

Seven of the surveyed holding companies were determined to be

providing more services than indicated in their applications.

Of the seven that

exceeded their planning expectations, two had stated in their applications that
they were going to provide no new services; however, upon review they indicated
some new services were being provided.

One of the holding companies had intro­

duced credit card services, had implemented IRA programs, and had established
corporate savings accounts.

The other holding company introduced IRA programs

and viewed gold sales as a new service.
With respect to the 26 holding companies that were not able to fulfill all
of their commitments, the following were found to be the areas of noncompliance.
Six of the holding companies indicated that they had either not established or
had not significantly expanded the trust services at the acquired bank.

This

means that out of the 30 holding companies that had proposed to establish or
expand trust services, 20 percent' of them have been unable to or have decided
not to expand or establish the service as planned.

One of the respondent’s

replies to the questionnaire is typical of other responses.

In Exhibit D the

applicant had stated that upon approval of the application "the following services
would become immediately available to Bank or Bank’s customers," and among the
list of proposed new services was "a full range of trust services."

Convenience

and needs considerations were found by the Board to be "consistent with and lend
some slight weight toward approval."

The only service explicitly cited in the

Board’s Order as a new service to the public was trust services.

In response to

our questionnaire, the applicant stated that it does not provide trust services




-25-

as planned on a regular basis and that the means of providing these services on
a regular basis is still being considered, but no determination has been made.
The major problem cited by the respondent was that the acquired bank was over
100 miles from the main office of applicant’s lead bank, and, furthermore, there
was ’’little or no public interest in trust services” in the area.

This statement

illustrates one of the major reasons cited by holding companies for the lack of
compliance— little or no public demand for the proposed service.
Another area where applicants have yet to provide the planned service is in
the area of accounts receivable financing, payroll accounting, and billing
services.

Seven of the applicants specifically mentioned introducing this ser­

vice, and upon audit it was found that four were not providing the service.
While six applicants had planned to introduce in-plant banking, only two in­
dicated that they were actively providing this service.

In at least one instance

each of the following services was found not to be currently provided by the
applicants as planned:

certain computer services, training programs, expanded

lending limit (the acquired bank was awash in liquidity due to the lack of loan
demand), international services, municipal financing, check credit program,
expansion of mortgage lending, and a program designed to attract industry to the
community of the acquired bank.

VI.

Reasons for Alteration in Target Bank’s Services
In conjunction with the survey, the holding companies were asked to specify

those factors which, in their view, were most responsible for bringing about
changes in the target bank’s services and operations.

The survey listed nine

possible reasons for changes in the target bank’s services.

The list included:

(1) the holding company’s philosophy, (2) the acquired bank’s philosophy, (3)




-26-

competitive pressures from banks either inside or outside the local community,
(4)

competitive pressure from nonbank financial institutions either inside or

outside the local community, (5) changes in government regulation, (6) customer
interest, and (7) technological changes in banking.

From the list provided the

holding companies were requested to rank in order of importance (i.e., 1st, 2nd,
3rd, etc.) those factors that they felt were most responsible for bringing about
service and operational changes at the acquired bank.

Of the holding companies

responding to his question, the consensus was that the holding company's phi­
losophy and policies were the primary factors responsible for changes in con­
venience and needs factors at the acquired bank.

The second most important

factor cited was customer interest in these services.

The third and fourth most

important factors, respectively, were considered to be competitive pressures
from commercial banks located within the local community and the acquired bank's
philosophy and policies.

According to the respondents, the least important

factor influencing changes in services and operations at acquired banks was
competitive pressure from nonbank financial institutions located outside the
local community.

Interestingly, technological changes in banking (e.g,. auto­

matic teller machines) were not viewed by the responding holding companies as a
highly significant factor promoting changes in the target bank's services and
operations.

The following table summarizes the holding company responses to the

question concerning those factors responsible for changes made in the services
and operations of acquired banks.




/

-27-

Table 2
Factors Responsible for Changes in Target Bank is Services
and Operations

Factor cited

Holding company
philosophy

Number of holding companies
ranking the factor as most
important (ranked 1st)

Number of times holding
companies cited the factor as being influential

10

18

Customer interest

3

15

Local commercial
bank competition

4

12

Acquired bank’s
philosophy

1

12

Local nonbank
competition

2

7

Commercial bank com­
petition from out­
side the community

1

7

Nonbank competition
from outside the
community

0

3

Changes in government
regulation

0

5

Technological changes
in banking

0

4

Other factors mentioned

0

0




-28-

VII•

Summary
Table 3 summarizes the findings of the survey.

As discussed previously and

as shown in Table 3, the holding companies surveyed tended to deviate to a large
degree between planned and realized changes in convenience and needs factors.
In all of the areas analyzed, the percentage of holding companies that actually
had "no change" in services is less than the percentage of holding companies
planning to make "no change" in the target bank’s services.

The results of the

survey seem to indicate that we can expect, as the holding companies have stated,
new services (per Question number 7) to be introduced at the acquired bank.

In

only two percent of the cases surveyed was there no change with respect to new
services.

However, the survey also revealed that there is less than perfect

correlation between the new services mentioned in the application and the services
ultimately instituted.

We have also found that the holding companies surveyed

were less inclined to alter the hours of operation at the acquired bank and are
also not too inclined to make any changes affecting the service charges on
demand deposit accounts.

On the other hand, it was found that the holding

companies surveyed had the greatest problem in complying with commitments made
concerning changes in service charges on demand deposit accounts, changes in the
composition of the loan and investment portfolio, and lowering interest rates on
loans and terms related to these loans.

Clearly, these are three areas that

should be given closer and more detailed attention by applicants.

The study

revealed the holding companies are likely to make improvements in the physical
facilities of the acquired bank; if the hours of operation are changed, they
tend to be longer rather than shorter; and interest rates paid on time deposits
can be expected to be higher rather than lower (assuming that interest rate
ceilings so permit).




Table 3
Summary of Findings

________ Planned Changes______
Some alteration
"No change"
mentioned
(percent)
(percent)

Actual changes______________________
More services Less services
"No change"
than planned
than planned
(percent)
(percent)
(percent)

Demand deposits

57

43

45

9

18

Time & savings
deposits

54

46

32

14

4

Loan rates &
maturities

70

30

39

14

16

Portfolio
alteration

27

73

16

N/A

16

Physical
facilities

36

64

20

25

14

Banking hours

68

32

59

18

6.8

7

93

2

14

New/expanded
services

N/A = Not applicable due to nature of question or type of response.




N/A

-30-

VIII.

Conclusions and Recommendations
What conclusions and recommendations can be drawn from the instant survey?

Before addressing this question, a few points must be emphasized.

First, the

findings set forth herein are based on what is considered to be a representa­
tive, though limited sample.

It involved only bank holding companies located in

the Seventh Federal Reserve District and only companies in the states of Iowa,
Michigan, and Wisconsin.

There is no reason to believe that the same study

methodology employed in other states and districts would yield similar findings.
Furthermore, not all of the holding companies surveyed responded.

This leaves

open the question as to whether or not the survey is biased in that only those
holding companies that have complied to the greatest extent with their planned
changes in convenience and needs considerations were the ones that responded to
the survey.
The survey tends to reveal that on an aggregate basis holding companies
appear to have committed themselves to making very few changes in the services
and operations of acquired banks.

As such it would appear difficult, on the

basis of the findings reported herein, to defend a position that bank holding
companies per se are a driving force, in and of themselves, towards the intro­
duction of new and expanded banking services.

It should be noted that on an

aggregate basis data such as this may be misleading.

In the first place a

response of "no change" may merely indicate that the banks being acquired by
holding companies are banks that in the past have been adequately meeting the
convenience and needs of their communities.

That is, bank holding companies may

be acquiring banks that have already been offering free or low-cost checking and
longer hours relative to their competitors, and banks that have recently built
new banking offices and pay maximum Regulation Q rates.

Another possible ex­

planation may be that the holding companies are not familiar enough with all




-31-

phases and aspects of the acquired bank’s operations and competitive environment
to be able to commit themselves to any major changes in the bank’s operations
prior to acquisition.

Another possible explanation, and somewhat related to the

first, is that the prevalence of the ffno change11 response may reflect the lack
of flexibility open to the banks to modify certain services and rates.

With

respect to rates paid on time and savings deposits, for example, applicants
frequently respond ,!no change11— except as permitted by regulation.

They often

state or infer that the bank to be acquired is currently paying the maximum
rates allowable under existing legislation and that this policy will be con­
tinued.

Clearly, the answers to these questions require additional research

before the convenience and needs issue is resolved.
It is interesting to note that the post-audit revealed only two holding
companies that had responses immediately available to the questions asked in the
survey.

Both of these holding companies conduct their own holding company ap­

plication internal audits on an annual basis.

They have made an on-going and

concerted effort to keep abreast of what commitments they had made with respect
to convenience and needs factors, and they document when the changes were made
or the reason(s) responsible for no change.

On the whole, the responses from

these holding companies were quite frank, which may reflect the fact that they
were generating this information for internal use by the holding company as a
tool for measuring management effectiveness.

It is felt that similar internal

audits would prove beneficial to other bank holding companies.
The survey also revealed that changes in the types of services and opera­
tions, as proposed in holding company applications, can be instituted somewhat
more rapidly than had been anticipated.

Two of the respondents to the survey

provided information with respect to banks acquired in late 1976.




By February

-32-

of 1977 the holding companies had been able to institue a number of the proposed
changes set forth in the application.

For example, interest rates on certain

categories of loans had been lowered, facility remodeling was under way, rates
paid on saving accounts had been raised to the maximum allowable by law, simple
interest loans were being extended and trust services were available via the
lead bank of the holding companies.
In general, the survey leads to the conclusion that planned changes and
alterations that have not been instituted or established within 12 to 18 months
after approval are not likely to be implemented.
framework assumes no extenuating circumstances.

This 12- to 18-month time
Within this time period the

acquiring company should be aware of those services that can be provided and
those that will not be feasible due to whatever reason.
There are, in general, three possible ways to react to the study findings,
which may be classified as:
approach.

a soft line, rule of reason, or letter of the law

The soft line approach takes the view that convenience and needs

changes are just so much "boiler plate."

When Congress directed the Board to

examine the convenience and needs considerations, it did not intend much weight
to be applied to this factor and, as such, it is of little or no importance
whether the applicant complies with its planned changes in services and opera­
tions.

It should be clear upon reading the Congressional hearings surrounding

the Bank Holding Company Act and its amendments that Congress expected more than
just "boiler plate" be provided with respect to convenience and needs factors.
The rule of reason approach may be viewed as a middle-of-the-road approach.
According to this approach, the Board recognizes that applicants will not be
able to transform 100 percent of all planned convenience and needs factors into
realized public benefits.




Therefore, if the applicants are able to comply with

-33-

say,

seven

those
to

or

they

the

eight

are

Board

unable

and

the

also

recognize

that

more

important

in

involve
titive

some

out
to

ten

those
of

exist,

planned

provide,

public.
the

degree

factors

of

changes,

then

Under

a

they
rule

and

cases

banking

where

adversity.
then

they

substitute

adequately met

reason

needs

If n o

convenience

have
of

convenience

or

approach,

considerations

factors

adverse

or

needs

the

law

their
the

become

commitment

significantly
considerations

managerial,

considerations

for

Board would

competitive

financial,

and

services

are

or

of

compe­

lesser

importance.
The
f,h a r d

third

line"

statement
venience
such,

approach.

made
and

by

needs

deviation

Followed
not

approach,

to

its

providing

trative
extend

legal

type

of

hours

the

service

or

an

the

company

might

adopted,
with

factors

the v i e w
respect

planned

should
and

be

equivalent

if

additions

viewed

an

to

then

An

to

that

the m o s t

reasonable

In

compensate

is
be

or

legal
to

found

appropriate

be

lieu
the

for

public

service

for

the

in

of

to h a v e

example,

the

the

affirmative

breach

to

as

con­

commitment.

judicial

required

of

any

modifications

firm

is

characterized
that

tantamount

should

substitute.

required

a

applicant,

comply

be

is

as

applicant

changes,

taken.

failed

to

be

approach,

taken would

commitments

conclusion,

the

of

should

application

logical

action

banking

If

letter

applicants

from

all

the

contract.

deviated
or

planned

either

provide

a

by

adminis­

that

or

As

to

substitute,

foregone

public

benefits.
It

appears

middle-of-the-road
result were
the
it

the

applicant's
is

not

previous

approach.

Board

failure

unreasonable

commitments)




to

It

is

doubtful

require

an

applicant

to
to

to

and workable

comply with
expect

be

used

that
to

type

of

as

determining

public

divest

convenience

this

a

net

solution

and

of

lies w i t h

benefits

would

a

subsidiary

needs

proposals.

information

factor

(failure

in

to

subsequent

the

based

on

However,

comply with

applications.

-34-

The

post-audit

have

a

did

tendency

realized

towards

public

applicants

reveal

should

be

of

changes

report

on

a periodic

compliance with

holding

and

made,

basis

and

the

and
it

to

the

Board

planned

of

suggested

holding

convenience

applications

Board

companies

appear

and

changes

track

record

as

to b e

informed

So
that

applicants

appropriate

Reserve

involving

convenience

and

might

concerning

well

be

handled

compliance with

such

as

these would

informed

of

changes

in

keep

needs

the

or

post-audit

reports

number

considered*

is

substitutions

on-going

Annual

limited

future

evaluated

being

or

a

converting
On

companies1 reports

capital.
Banks,

not

benefits*

nature

reporting

that

the

be

into

these
of

the

required

Bank

needs

in

of

to

to

concerning

factors.

This

conjunction with

the

commitments

to

applicants,

the Reserve

convenience

and

needs

augment

factors

bank

as

they

develop.
The
Reserve

results

this

survey

have

of

Chicago

to p a y

in b ank holding

company

applications

convenience

needs

ments

Bank

of

made

reflect
survey
have

also

conveyed
cations

in

not

been

and

the

only

identified

unable
to

true

to

future

in a manner

incumbent
statements

upon
made




public

fully

with

areas

respect

be

are

should

where

should

it

their
assist

both within

applicants

convenience

and

to

to

causing

statements
to

of
be

is

proposed

their

them

in

reason

that

applicants

changes

involving

their

in

the

feasible.

of

and

their

state­

should

scope.

past

their
It

is

consider

The

applicants

information,

structuring
and

that

in

This

evaluate

portion

made by

informed

feasible
felt

the Federal

applications

commitments.

closely

needs

in

explicitly

section

but

comply with

that will

the

attention

needs

needs,

applicants,

instrumental

Applicants
and

certain

prospective
in

closer

factors.

convenience

been

when

appli­
also
future

application.

-35-

This

survey—

first

represents

a

respect

convenience

to

modified

at

step

the

a

later

Nevertheless,

the

understanding

of

translate

planned




towards

results
the

its

kind

post-auditing

and

date

of

needs

in

light

of

extent

this

and

the

of
and

the

Seventh

bank holding

statements.

to w h i c h

convenience

in

The

findings

future

company

factors

applications with

procedures
of

this

post-audits

bank holding

needs

Federal Reserve District—

and

other

should

companies

into

employed may be

have

realized

studies.

lead
been

to

a better

able

to

public benefits.

-36-

FOOTNOTES

*The

author

and

t o R o b y L.

the

author

bears

1-Prior
within

to

^Banking
L.

Commercial

F

5Jules

The

IQu.S.
H i t
weighed

referred

by

of

the

be

noted

"probable

community

"failing

firm"

substantially

the

Bank

by

J.E.

to

Holding

Steel




F.R.

of

her

typing
of

efforts,

course,

and

needs

questions

Holding

Company

were

found

Y-2.

the
1,

Bank

1956,

B a n k , 10 L E d
Company

24-25,

C o r p . et

N e w York,

to

the

p.
2d

Act,"

1855.
915,

The

April-June

Act,"

at

949.

Bulletin

of

the

C.J.

Devine

1963.

that

the

effect
be

to

and

Economic

B.

al,

Federal

Bank

of

1958,

p.

(168 F

12.
Supp.

576,

U.S.

District

1958).

standards

See

expressed
Reserve

in

the

US

Board

30,

on December

adverse
the

convenience
National

1976,

needs

issues.

did

issues
a

Corporation

of

p.

the

have

Board
the

approve

141.

an

which were

classic

factors
See:

1959,

(1968).

in meeting

represents

and

competitive

71

competitive

transaction
This

Bethlehem-Youngstown

Bulletin, February

in N a s h v i l l e , 390

served."

adverse

Research

Rossman

and Needs,"

and

Long View

of

(63 F R B

relating
the

for

assistance;

errors.

convenience

Y-l

Bulletin, January

doctrine where

Michigan

12studies

See:

a

acquisition by Manufacturers

conducted

all

Lee

editorial

19.

substantially

outweigh

Southfield,

to M a r y a n n e

their

Chronicle, November

passage.

involving

the

Sec.

Third National

should

for

F.R.

B u l l e t i n NO.

Reserve

after

v.

application
needs

"The

Bethlehem

Board

for

revision,

forms

"Taking

Southern District

shortly

Cowen

4547

Federal

^The
case

1973
of

1933,

Finance,

y.

appreciation

Philadelphia National

Backman,
of

foj.S.A.
Court,

G

Financial

6 I b i d . , pp.
^See

and
of

his

Sandra

responsibility

Robertson,

y.

Institute

sole

Act

and

4u . S .

and

the M a r c h

exhibits

3j.

expresses

Sloan

out­

convenience
case
been

Order

National

of

and

the

used

to

approving
Bank

of

75) .

convenience
Department
Frank

King,

and
of

needs

considerations

the Federal

Reserve

"Multibank Holding

R e v i e w , July/August

1977.

have

Bank of

Companies:

recently been
Atlanta.
Convenience

APPENDIX

Appendix A
Appendix




-

B -

Survey
Exhibit

Questionnaire.
D

f r o m F O R M F.

R.

Y-l.

APPENDIX A

Federal Reserve Bank of Chicago

CONFIDENTIAL
September

SURVEY

Please
the
will

Federal
be

held

respondents

1.

In
any

answer

all

Reserve

your

be

of

in

and

Chicago

confidential

COMPANIES

return
in

the

and

no

the

completed

questionnaire

enclosed

envelope.

individual

answers

All
or

to

answers

names

of

disclosed.

application

changes

BANK HOLDING

questions

Bank

strictly
will

OF

1976

(Exhibit

service

D— Paragraph

charges

on

demand

1)

did

you

deposit

contemplate

accounts?

making

Y E S _____

NO
a.

If

your

response
Y E S _____

made?
Specify
or

b.

the

nature

indicate

the

in

bank

If

response

application,
Y E S _____
If

your

change

2.

In y o u r
any

Y E S _____
a.




If

YES,

have

the

changes

contemplated

been

the

to

have

change

(e.g.,

instituted

for

change

(e.g.,

no

free

time

checking)

factor,

costs,

etc.)

question

there

been

#1 w a s
any

NO,

since

changes

in

approval

these

of

service

your
charges?

N O _____
answer

(i.e.,

is YES,
what

in

specify

changes

(Exhibit

interest

the

were

nature

made

D— Paragraph

rates

paid

on

of

and

and w h e n

2)

time

did

and

reasons

they were

you

for

contemplate

savings

the

made)

making

deposits?

N O _____

your

made?

response
Y E S _____

Specify
when

of

policy,

application

changes

was

reason(s)

changes

your

above
N O _____

the

above was

nature

they were

YES,

have

the

changes

contemplated

been

N O _____
of

made)

the
or

change

indicate

(i.e.,
the

what

changes

reason(s)

for

no

were

made

change.

and

b.

If

your

response

application
Y E S _____
If

In
any

answer

is Y E S ,

(i.e.,

what

your

application

changes
loan

If

your

If

in

terms?

(Exhibit

response

above

of

made)

response
have

If

your

In

your

to

is

application

portfolio?

Y E S _____




If

your

Specify
when

in

response
Y E S _____
the

in

approval

these

of

your

interest

rates?

nature

made

loans,

of

and

and w h e n

3)

did

reason

for

they were

you

the

made).

contemplate

maximum maturities,

and

making
any

YES,

have

the

changes

contemplated

been

change

question
been
and

any

other

NO,

Paragraph
of

of

and

did

of

rates

reason

they were

you

expect

loan

and

made

and

change.

Y E S _____

and w h e n

B A N K ’S

were

no

approval

terms?

4)

for

interest

nature

made

composition

changes

since

in

loan

the

were

what

reason(s)

changes

specify

D—

the

#3 w a s

any

changes

the

(i.e.,

indicate

your

on

ap­

loans,

N O _____
for

the

made)

to m a k e

any

investment

N O _____
above

was

YES,

have

the

changes

contemplated

been

N O _____

nature

they were

the

(Exhibit

changes

made?

on

was

YES,

what

significant

a.

since

N O _____

£r

there

answer
(i.e.,

the

were

D— Paragraph

rates

maximum maturities,

change

NO,

changes

N O _____

the nature

plication

specify

Y E S _____

they were

your

#2 w a s
any

changes

interest

Y E S _____

Specify
when

been

N O _____

your

made?

b.

question

there

changes

other
a.

to

have

of

made)

the
or

change

indicate

(i.e.,
the

what

changes

reason(s)

for

no

were

made

change.

and

b.

If

your

response
have

position

B A N K ’S

If

your

In y o u r

of

answer

change.

If

your

in

If

the

indicate

your

Specify

a.

your

If

in

your

since

approval

changes

portfolio?

nature

If

your

Y E S _____

to

of

and

in

of

your

the

com­

Y E S _____
reason

NO

for

the

5)

did

Y E S _____
have

the

you

expect

to m a k e

any

N O _____

changes

contemplated

been

change

(i.e.,

constructed

new

for

change

(e.g.,

factor,

no

time

building)
con­

______________________________________________________

been

#5

any

was

NO ,

changes

or

since

approval

modifications

of

your

ap­

in physical

N O _____

of

c h a n g e ________________________________________________

(Exhibit

above

D—

Paragraph

hours?
was

YES,

6)

did

you

Y E S _____

N O _____

have

changes

the

contemplate

making

contemplated

been

N O _____

nature
the

have

YES,

question

banking

of

the

reason(s)

response

plication

was

etc.)

nature

response

the

D— Paragraph

the

Y E S _____

Y E S _____

indicate

of

there

your

or

Specify

the

facilities?

reason(s)

application

Specify

b.

the

have

the

changes

made?

investment

specify

above

nature

response

facilities?

In

NO,

significant

N O _____

delays,

plication

any

#4 w a s
any

and

(Exhibit

response

struction

b.

loan

physical

Y E S _____

Specify
or

been

is Y E S ,

application

made?

question

there

__ _______________________________________________________________________

improvements
a.

to

application

to

change

(e.g.,

for

change.

question

there

been

any

no

#6

was

NO ,

changes

in

now

open

Saturday,

etc.)

_______________________________

since

approval

banking

of

your

ap­

hours.

N O _____
the

nature

of

and

reason

for

the

change(s).

________________

In your application (Exhibit D— Paragraph 7) did you contemplate pro­
viding any other new or expanded services? YES
NO




a.

If

your

been

response

made?

Specify
plan,

b.

If

the

Y E S _____

and
been

of

to

you

response

have

to

the

change

the

(e.g.,

reason(s)

question

provided

is Y E S ,

changes

factors,
for

#7 w a s

any

holding

______ Y o u r

b a n k ’s

_______C u s t o m e r

of

bringing

______ Y o u r

rank

c o m p a n y ’s

in

order

and

and

these

in

your

pressure

from

pressure

from non-bank

_______C h a n g e s

In

your

were

in




your

ap­

of

and

reason

for

the

to b e
you

made

feel

(If m o r e

importance,

in

have

convenience
been

than

1st,

most

one

2nd,

has
etc.)

policy.

banks

(e.g.

in y o u r

credit

community.

unions)

financial

commercial

banks

out-side

financial

your

community.

institutions

out-side

government
changes

regulations.
in b a n k i n g .

S p e c i f y ________________________________________________________________

provide
be

any

service(s)

obtained

Y E S _____

response

was

application

going

of

services?

community.

______ T e c h n o l o g i c a l

your

approval

expanded

community.

_______C o m p e t i t i v e

If

credit

services.
commercial

_______C o m p e t i t i v e

community?

check

policy.

from non-bank

institutions

do

of

pressure

cannot

or

changes:

philosophy

philosophy
in

these

_______C o m p e t i t i v e

you

a

change.

since

new

contemplated

from

they

no

nature

following

about

please

interest

or

the

pressure

Do

contemplated

instituted

NO,

the

_______C o m p e t i t i v e

______ O t h e r .

changes

for

other

specify

made

which

responsible,

your

the

__________________________________________________________________________

respect

responsible

YES,

N O _____

your

need

was

indicate

have

changes.

With

or

response

plication

If

nature

etc.)

your

above

Y E S _____ N O _____

to

your

another

community
financial

that

are

unique

institution

in

in

that

your

N O _____
YES,

did

unserved?

from

you

specify

cite

Y E S _____

what

certain
N O _____

those

services

community

are.

banking

____________

services

that

a.

If

your

answer

plication

as

______ T r u s t

was

YES,

being

______ L e a s i n g

______ C o n s u m e r
_______C r e d i t

finance

credit

your

ap­

services

services

services

S p e c i f y _____________________________________________________

approval

of

cited

______ T r u s t

your

are

acquisition,
by

you

as

which

being

of

the

above

unserved?

services

services

______ C o n s u m e r

finance

_______C o m m e r c i a l
______ C r e d i t

services

finance

card

services

plans

checking

______ C h e c k

credit

______ O t h e r .

provide

or

considered

services

_______C o m p u t e r

______ F r e e

formation

still

services

______ L e a s i n g

this

in

appropriate).

plans

_______I n t e r n a t i o n a l

Please

as

services

finance

card

______ O t h e r .

11.

cited

many

checking

______ C h e c k

Since

were

as

services

______ C o m m e r c i a l

services

(Check

services

_______C o m p u t e r

b.

services

services

_______I n t e r n a t i o n a l

______ F r e e

which

unserved?

services

S p e c i f y __________________________________________________________ 1

the

following

with

respect

to

the

person(s)

filling

out

form:

N a m e ( s ) : __________________________________________________________ ____________________

Position(s): ____________________________________ _______ __________
Phone




Number(s):

____________________________________________________________________

APPENDIX B

F O R M F.

R.

Y-l

EXHIBIT

D—

Convenience

Indicate
by

each

tion

the

BANK and

and

present
the

Needs
and

extent

anticipated

to w h i c h

of

Applicant.

1.

Expected

changes

in

service

2.

Expected

changes

in

3.

Expected

changes

in

other

loan
4.

Comments

shall

banking

those

needs

include,

but

needs
will

need

charges

or

interest

rates

paid

interest

rates

on

not

demand
on

of

be

be

communities

and

met

by

limited

deposit

time

loans,

the

better

the

served
forma­

to:

accounts;

savings

deposits;

maximum maturities,

and

any

terms;

Expected

significant

changes

in

composition

of

B A N K ’S

loan

and

investment

portfolio;
5.

Expected

improvements

6.

Expected

changes

7.

The

extent

to w h i c h

other

The

extent

to w h i c h

Applicant

8.
panded

services

community.




will

meet

in

physical

in b a n k i n g

existing,

facilities;

hours;

new

or

or

expanded

believes

services

that

anticipated,

the

will

be

provision

convenience

and

provided;
of

and

new

or

ex­

needs

of

the