8151_1965-1969

TABLE 12

Branches of National banks opened for business, by communitysize and size of bank, calendar 1965

In cities with population: 1965Less than 5,000 1765,000 to 24,999 25925,000 to 49,999 8250,000 to 99,999 56100,000 to 249,999 53250,000 to 499,999 25500,000 to 1,000,000 31Over 1,000,000 159

Total *841

By banks with total resources (in millions of dollars):Less than 10.0 11910.0 to 24.9 10625.0 to 49.9 6450.0 to 99.9 60100.0 to 999.9 227Over 1,000 265

Total *841Includes 587 de novo branches, 162 branches of newly con-

verted banks, and 92 branches acquired through merger.

TABLE 13

Mergers,* calendar 1965

Applications carried over from 1964 15Applications received 1965 77Disposition of applications 1965:

Withdrawn 3Applications pending December 31, 1965 7Transactions completed 1965:

Mergers 59Consolidations 5Purchase of assets 12

Total 76Aggregate total of capital stock and capital accounts for the certificates issued, 1965

Merging,Charter or consolidating,

purchasing bank or selling bank CombinedCapital stock $470, 298, 596 $24, 227, 204 $491, 519, 326Capital accounts 1,492,914,898 81,999,991 1,552,439,088

Includes mergers, consolidations, and purchase and sale transactions, where the resultingbank is a National bank.

27

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1965-1966

THE FIRST NATIONAL EXCHANGE BANK OF CLAYTON, CLAYTON, N.Y., AND THE NATIONAL BANK OF NORTHERNNEW YORK, WATERTOWN, N.Y.

Name of bank and type of transaction

The First National Exchange Bank of Clayton, Clayton, N.Y. (5108), withand the National Bank of Northern New York, Watertown, N.Y. (2657),

which hadmerged Jan. 15, 1965, under charter and title of the latter bank (2657). The

merged bank at the date of merger had

Total assets

$4, 502,42254, 740,086

59, 242,508

Banking offices

In operation

1

6

To be operated

7

COMPTROLLER'S DECISION

On November 2, 1964, the $52.8 million NationalBank of Northern New York, Watertown, N.Y., andthe $4.7 million First National Exchange Bank ofClayton, Clayton, N.Y., applied to the Comptrollerof the Currency for permission to merge under thecharter and title of the former.

Watertown, which has a population in excess of33,000, is located in north-central New York 80 milesnorthwest of Utica and 10 miles east of Lake Ontario.The town has shown considerable growth in industrialdevelopment in recent years with a diverse group ofmanufacturers now present in the community. Itserves, in addition, a large portion of the north-centralregion of the State which is mainly an agricultural,dairy, and resort area. It is also the commercial andfinancial center for this upstate region.

Clayton, with a population of 2,000 persons, islocated in the Thousand Islands on the St. LawrenceRiver 23 miles north of Watertown. Although thesurrounding area is devoted chiefly to dairy farming,summer resort and recreational facilities play a largerole in the local economy. Economic growth in thecommunity should be spurred by completion of thefinal segment of a limited access interstate highwayrunning from Canada through New York and Penn-sylvania to western Maryland with access provided forClayton, Watertown, and Syracuse.

While the single office merging bank has been op-erated soundly, its growth, and its consequent impacton the community economy, has been limited by con-servative and unaggressive management. In addition,a succession problem due to the age of the operatingofficers has reached a critical point so that some pro-vision for adequate future banking in the communitymust be made. Merger with the charter bank, a pro-

gressive, full-service institution, will alleviate the suc-cession problem and better serve the convenience andneeds of the community.

The regional banking structure, comprised of thecharter bank and one other relatively large bank, aswell as six smaller ones, should be strengthened byconsummation of the proposed merger. Due to thelocal nature of their business, none of the small banksnear Clayton compete significantly with each other.Consequently, they will remain unaffected by substitu-tion of a branch of the charter bank. The new branch,however, will enable the charter bank to compete moreeffectively with the larger institution, the Marine Mid-land Trust Co. of Northern New York, in providingfull service, progressive banking for the north-centralNew York region.

Applying the statutory criteria to this application,we conclude that it is in the public interest and the ap-plication is, therefore, approved.

JANUARY 11, 1965.

SUMMARY OF REPORT BY ATTORNEY GENERAL

Commercial banking in the Watertown, N.Y., areais already highly concentrated. Two banks, theMarine Midland Trust Co. of Northern New Yorkand the National Bank of Northern New York, theacquiring bank herein, account for about 90 percentof the bank loans and deposits in the area. Sixbanks presently compete with these comparative giants.The elimination of one of the six smaller banks bymerger into one of the two large banks serves to in-crease this extraordinary degree of concentration andaggravate the competitive difficulties of the remainingfive.

Therefore, the effect of the proposed consolidationupon competition must be deemed to be adverse.

43


1965-1966

T H E FORT MCINTOSH NATIONAL BANK OF BEAVER, BEAVER, PA. , AND WESTERN PENNSYLVANIA NATIONAL BANK,MCKEESPORT, P A .


The Fort McIntosh National Bank of Beaver, Beaver, Pa. (8185), withand Western Pennsylvania National Bank, McKeesport, Pa. (2222), which

hadmerged Jan. 15,1965, under charter and title of the latter bank (2222). The


Total assets

$4, 537, 524556, 018, 962

570, 556,486

Banking offices

In operation

1

51

To be operated

52


On November 13, 1964, the $543.5 million WesternPennsylvania National Bank, McKeesport, Pa., andthe $4.4 million Fort McIntosh National Bank ofBeaver, Beaver, Pa., applied to the Comptroller ofthe Currency for permission to merge under the charterand with the title of the former.

McKeesport, a city of 46,000, is situated 11 milessoutheast of Pittsburgh in Allegheny County and isconsidered part of the Pittsburgh standard metro-politan area, a highly industrialized region with theprincipal industries being iron, steel, and related lines.

Beaver, the county seat of Beaver County, is located29 miles northwest of McKeesport. Although basi-cally a residential community of 6,160 persons rep-resenting the county's higher income families, Beaversupports a Westinghouse Corp. plant employing 1,800people. Other residents commute to work through-out the Greater Pittsburgh area.

The Western Pennsylvania National Bank has 48branches, of which 37 are situated in Allegheny County,6 in Washington County, 2 in Westmoreland County,and 3 in Beaver County. The charter bank ranks thirdin size in the Pittsburgh metropolitan area behind theMellon National Bank & Trust Co. and the PittsburghNational Bank. The Fort McIntosh National Bankis the smaller of the two banks in Beaver and main-tains no branches.

Consummation of this merger will neither alter thecharter bank's competitive position in the frameworkof the Pittsburgh metropolitan area's banking struc-ture nor will it eliminate any significant competitionbetween the applicants since the charter bank's branchnearest to Beaver is more than 3 miles away acrossthe Beaver River. The merger will introduce a newcompetitive element into Beaver. The $32.6 millionBeaver Trust Co., the other bank in Beaver, whichhas shown an impressive record of growth under ag-gressive management, should continue to thrive not-

withstanding the increased competition that may resultfrom a branch of the charter bank.

Besides increasing competition, this merger shouldimprove the banking service available in the Beavercommunity. Operation of the merging bank as abranch of the merged institution will provide stronger,more efficient banking services and sufficient capitalresources to meet the growing credit needs of theBeaver area. In addition, the new branch will offertrust services through the experienced trust depart-ment of the charter bank.

Applying the statutory criteria to the proposal, weconclude that it is in the public interest and the appli-cation is, therefore, approved.

JANUARY 12, 1965.


Western Pennsylvania National Bank is the thirdlargest bank in the Pittsburgh area (AlleghenyCounty), accounting for approximately 10 percent ofthe commercial banking business therein. This areahas for many years been characterized by an unusuallyhigh degree of concentration in commercial banking,the result to a large extent of a great many mergers andacquisitions by and among the leading banks. The topthree banks currently account for approximately 85percent of total Allegheny County deposits and loanswhile the top four account for approximately 93 per-cent. The remaining deposits and loans are shared by19 banks.

Western itself has been an extremely active par-ticipant in the consolidation movement having since1953 acquired 22 small and medium-sized banks inAllegheny County and the adjoining counties of West-moreland, Washington, and Beaver. The instant pro-posal is Western's fourth merger in Beaver County inless than a year. With Mellon National Bank & TrustCo. and Pittsburgh National Bank, the two largestbanks, having acquired or opened branches through-

44


1965-1966

out the counties adjoining Allegheny and with West-ern acquiring formerly independent banks in generallythe same localities, the dominance enjoyed by thesethree banks is being extended throughout the broaderfour-county area constituting "Greater Pittsburgh."

It does not appear that any significant competitionexists between Western and Fort Mclntosh NationalBank. However, the Beaver Trust Co. and the Free-dom National Bank will suddenly be faced with com-petition from a branch of a bank many times theirsize. Western has not presented any overriding rea-

sons why it should enter Beaver by acquisition ratherthan by establishing its own branch. The continuingelimination of independent banks from Beaver Countyand the rest of the Greater Pittsburgh area does notseem necessary or justified, particularly when de novobranching, which appears possible, would increaserather than restrict alternative sources of bankingservice.

We, therefore, believe that approval of this mergerwill have an adverse effect on competition in theGreater Pittsburgh area, especially Beaver County.

* * *

CITIZENS STATE BANK, ARLINGTON, WASH., AND SEATTLE-FIRST NATIONAL BANK, SEATTLE, WASH.


Citizens State Bank, Arlington, Wash., withwas purchased Jan. 22, 1965, by Seattle-First National Bank, Seattle, Wash.

(11280), which hadAfter the purchase was effected, the receiving bank had

Total assets

$5,217,0001,219,690,0001, 224, 907, 000

Banking offices

In operation

1

*115

To be operated

116

Including 2 facilities.


On October 1, 1964, the $1,299 million Seattle-FirstNational Bank, Seattle, Wash., applied to the Comp-troller of the Currency for permission to purchasethe assets and assume the liabilities of the $5.2 millionCitizens State Bank, Arlington, Wash.

Seattle, with a present estimated population in ex-cess of 560,000, is the largest city in the State and thecenter of an urban area numbering about 1 million in-habitants. The city is primarily a manufacturing cen-ter dependent chiefly on the aircraft and aerospaceindustry, with shipbuilding, transportation, lumber-ing, food processing and extensive port facilities pro-viding some diversification and stability.

Arlington, located about 47 miles north of Seattle,has a population of 2,200 with an additional 7,500 inits immediate trade area. The local economy dependsupon dairy farming, logging, and general agriculture.

The purchasing bank maintains 117 offices through-out the State, although the majority of these are con-centrated in the Seattle-Puget Sound area. The bankoffers all of the services of a progressive statewidebanking institution catering to the specialized require-ments of industry, agriculture, lumbering, and fishing.As the largest commercial bank in the State, it com-petes chiefly with the $689 million National Bank ofCommerce of Seattle operating 79 offices throughout

the State; the $278 million Peoples National Bank ofWashington, Seattle, with 34 offices throughout theState; the $202 million Old National Bank of Wash-ington, Spokane, with 31 offices; the $251 million Na-tional Bank of Washington, Tacoma, with 32 offices;and the $433 million Washington & Mutual SavingsBank, operating 12 offices.

The single office selling bank is the only bank inArlington. The bank has experienced steady growth,but is presently confronted with a management succes-sion problem occasioned by the senior officer's desire towithdraw from banking in the near future and by thedeath of one of the bank's other senior officers.

In addition to solving the selling bank's managementproblem, consummation of the proposed transactionwill result in greater operating efficiency and the in-troduction of a complete line of banking services of-fered by a modern diversified banking institution.

Although a small independent bank will disappear asa result of the purchase, no adverse effect on competi-tion can be foreseen. The very slight increase in totalassets of the purchasing bank will not affect the com-petitive banking picture in the Seattle-Puget Soundregion. No competition between the parties to thistransaction will be eliminated. The public in the sell-ing bank's service area will continue to have access tocompetitive banks around Arlington. It should also

45


1965-1966

be noted that an application to incorporate a newState bank in Arlington has been filed with the StateDivision of Banking.

Applying the statutory criteria to this proposal, thisapplication is hereby approved.

JANUARY 13, 1965.


As of June 30, 1964, Citizens State was reportedto have total assets of $5,238,000, total deposits of$4,450,000 and gross loans and discounts of $2,528,000.As of the same date Seattle-First National was reportedto have total assets of $1,298,979,000, total depositsof $1,161,327,000 and gross loans and discounts of$679,915,000.

Seattle-First National is the largest bank in the Stateof Washington (main office in Seattle, 117 branchesscattered statewide). However, its acquisitions ofother banks in 1959, 1960, and 1961 have not beensignificantly deleterious to competition and its acqui-sition program has not contributed markedly to con-centration of banking power within the State. Ifanything, Seattle-First National has lagged in match-ing average increases of deposits and loans of com-

mercial and mutual savings banks within the State.Its ratio of control of deposits and loans of commercialand mutual savangs banks has decreased over the years,and would still be below 1956 levels even after itsproposed acquisition of Citizens State.

Seattle-First National's acquisition of Citizens State,the only bank in Arlington, Wash., a small communityof 2,165 persons in the northwest section of the State,50 miles due north of Seattle, would mean the sub-stitution of one bank for another, offering the com-munity improved banking services over what it hadenjoyed in the past. After the acquisition, therewould remain 8 other banks within a radius of roughly20 miles of Arlington. The probable competitiveimpact of the imposition of a bank of the size ofCitizens State upon these banks is difficult to predict;however, it would appear to be clear that their com-petitive position would not be improved.

Close ties in stock ownership and management,moreover, already exist between Citizens State andSeattle-First National. The acquisition, it wouldseem, would only serve to emphasize these ties indifferent form.

No significant anticompetitive effects, therefore, arediscernible from the proposed acquisition.

THE FIRST NATIONAL BANK & TRUST CO. OF RAMSEY, RAMSEY, N J., AND CITIZENS FIRST NATIONAL BANK OFRlDGEWOOD, RlDGEWOOD, N . J .


The First National Bank & Trust Co. of Ramsey, Ramsey, N.J. (9367), withand Citizens First National Bank of Ridgewood, Ridgewood, N.J. (11759),

which h a d . . . .merged Jan. 29, 1965, under charter and title of the latter bank (11759). The


Total assets

$13, 770, 09079, 141,623

92,911,713

Banking offices

In operation

2

6

To be operated

8


On November 11, 1964, the $77.8 million CitizensFirst National Bank of Ridgewood, Ridgewood, N.J.,and the $14.5 million First National Bank & Trust Co.,Ramsey, N.J., applied to the Comptroller of theCurrency for permission to merge under the charterand title of the former.

The applicant banks are located in the north-centralsection of Bergen County, which is bounded on theeast by the Hudson River and on the north by NewYork's Rockland County. Ridgewood, the site ofcharter bank's home office, is basically a residentialcommunity with a population of approximately 28,600,

many of whom are employed in the Greater New YorkCity area. The charter bank presently operates fourbranches, all in communities within 5 miles of Ridge-wood, and has received approval to open a fifthbranch.

Ramsey, also almost entirely residential and witha population of about 10,000, is the site of the merg-ing bank's home office and is about 6 miles north ofRidgewood. Industrial activity is anticipated to in-crease since an aggregate of 19 acres has been recentlyzoned for industry in Ramsey and the adjoining com-munity of Upper Saddle River. The merging bankoperates its only branch in Mahwah, a small town of3,500 about 3 miles north of Ramsey.

46


1965-1966

The service areas of the two banks are primarilyresidential and overlap to some extent. However, dueeither to the nature of the locale or to the unaggres-sive policy of the merging bank, there is little or nocompetition in the Ramsey-Mahwah area which wouldbe eliminated by the proposed merger.

The resulting bank, because of its increased size,will be better able to compete with the other largerbanks in Bergen County, as well as with the variousother lending institutions in the area. The countyhas 26 banks with a total of 62 offices. Three of thesebanks are triple the size of the resulting bank and arevery aggressive competitors throughout northern NewJersey. Of course, the large New York banks, withbranches conveniently located near the place of em-ployment of the Ridgewood area commuters, cannotbe ignored as a serious source of competition to thecharter bank, as well as to all northern New Jerseybanking institutions. There are 11 State charteredsavings and loan institutions in the service area ac-tively competing for savings funds and mortgage loans.

Although the resulting bank will provide the onlybanking facilities between Ridgewood and the NewYork border, it will offer more aggressive, forward-looking service to the whole community by adding newservices, including an experienced trust department.Relatively young officers will be available to solve amanagement problem in the merging bank.

Applying the statutory criteria to the proposedmerger, we conclude that it is in the public interestand the application is, therefore, approved.

JANUARY 18, 1965.


Citizens First National Bank, with five offices andover $70 million in deposits, proposes to merge withFirst National Bank & Trust Co., with two offices and$13 million in deposits. The head offices of the merg-ing banks are located approximately 6 miles apart,their closest offices are less than 3 miles apart, and alltheir offices are located in the northwestern sectionof Bergen County. Citizens is the 6th largest bankin Bergen and ranks itself 12th among its competi-tors. Ramsey is among the smallest of Bergen Coun-ty's 27 banks, but it is the only independent bankin the largest segment of the growing northwesternsection of Bergen.

The proposed merger would eliminate direct com-petition between Citizens and Ramsey, eliminate 1 ofonly 3 existing Bergen banking alternatives in a largearea of northwestern Bergen, and add 1 more stepin the notable decline in the number of banks inBergen County's 70 municipalities from 37 in 1958 tothe present total of 27. The competitive effect ofthe merger will therefore be adverse.

THE BANK OF GLADE SPRING, GLADE SPRING, VA., AND VIRGINIA NATIONAL BANK, NORFOLK, VA.


The Bank of Glade Spring, Glade Spring, Va., withand Virginia National Bank, Norfolk, Va. (9885), which hadmerged Jan. 29, 1965, under charter and title of the latter bank (9885). The


Total assets

$3, 191, 704426,563,913

429, 176,324

Banking offices

In operation

145

To be operated

46


On September 2, 1964, the $422 million VirginiaNational Bank, Norfolk, Va., and the $2.7 million Bankof Glade Spring, Glade Spring, Va., made applica-tion to merge under the charter and title of the former.

The 46 offices of the Virginia National are locatedthroughout Virginia, primarily in the Norfolk-Portsmouth metropolitan area in the eastern sectionof the State, a 12-county area in central Virginia, theDanville-Martinsville area in southern Virginia, andthe Abingdon-Bristol area of southwestern Virginia.

The economic base of the charter bank is as compre-hensive and diverse as that of the State of Virginiaand has been amply discussed in previous decisionsof this Office. The effect of this merger on thecharter bank will be imperceptible; discernible effectswill be realized only in the Glade Spring area.

The Bank of Glade Spring is located in the com-munity of Glade Spring in Washington County, whichis in the southwest portion of Virginia near the statelines of Tennessee and North Carolina. The servicearea of the merging bank is considered to be the easternportion of Washington County and the western por-

47


1965-1966

tion of Smyth County. Approximately 62 percent ofthe real estate in the area of the Glade Spring bank isdevoted to agricultural pursuits, the principal incomeproducers being burley tobacco, dairy farming, and theraising of beef cattle and sheep. Agricultural sales inthe year 1960 exceeded $6 million. Industrial payrollsin the area presently exceed $20 million, with severalnationally known concerns being among the principalemployers. During the last 10 years this area ex-perienced a population increase of nearly 2.5 percent.The widely diversified economy is an assurance ofprosperity in the future.

Although the merging bank is the only commercialbanking institution in Glade Spring, the town limitsby no means describe the relevant market. The smalllending limit of the Glade Spring Bank and its lack offull-service conveniences have redounded to the benefitof eight other commercial banking facilities locatedin relatively close proximity to Glade Spring. Withthe exception of a branch of the charter bank locatedat Bristol, Va., all of these banks are larger than themerging bank. The introduction of a well-managed,full-service institution possessing the large lendingcapacity of the Virginia National Bank will be a tonicto competition among the remaining banks in the area.At the same time, the residents will benefit from theassurance of sound and responsible management suc-

cession and the availability of services heretoforedenied them.

Applying the statutory criteria to the facts of thiscase, we find that the proposed merger will be in thepublic interest, and the application is, therefore,approved.

JANUARY 27, 1965.


Virginia National, the second largest bank in Vir-ginia, with assets of $422 million, proposes to mergethe Bank of Glade Spring, a bank with assets of$2,702,000, located in a small community in south-eastern Virginia. Since April 1963, Virginia Na-tional has merged 7 banks in 4 widely separated sec-tions of Virginia, which had combined deposits at thetime merged equal to 42 percent of the present depositsof Virginia National and operated 27 of the 46present banking offices of Virginia National. Sevenindependent banks have been eliminated and a rapidlyincreasing concentration of banking in Virginia hasbeen fostered. The proposed merger, while notsignificantly adverse to competition, would continuethat trend and it is the view of this Department thatthe cumulative effect on competition of this series ofacquisitions will be adverse.

FIRST STATE BANK OF HOAGLAND, HOAGLAND, IND., AND LINCOLNFORT WAYNE, IND.

NATIONAL BANK & TRUST CO.


First State Bank of Hoagland, Hoagland, Ind., withand Lincoln National Bank & Trust Co. of Fort Wayne, Fort Wayne, Ind.

(7725), which hadmerged Jan. 30, 1965, under the charter and title of the latter bank (7725).

The merged bank at the date of merger had

Total assets

$2, 545, 056177,638,718

179,823,846

Banking offices

In operation

1

5

To be operated

6

COMPTROLLER S DECISION

On October 29, 1964, the $170.8 million LincolnNational Bank & Trust Co. of Fort Wayne, FortWayne, Ind., and the $2.5 million First State Bankof Hoagland, Hoagland, Ind., applied to the Comp-troller of the Currency for permission to merge underthe charter and with the title of the former.

The applicant banks are located in Allen Countyin the northeastern part of Indiana. Fort Wayne, thecounty seat, has a population of 161,776 in an esti-

mated service area of 225,000. The economy is of adiverse industrial nature including two manufacturingplants of national reputation, each employing approxi-mately 7,500 persons. There are also a number oflarge wire-manufacturing companies, electronic com-panies, pump manufacturers, diamond die industries,and machine tool industries. Recent statistics indi-cate a 2.4 percent unemployment rate, the lowestin the State. The predominance of skilled and semi-skilled labor results in a high per capita income andgeneral prosperity.

48


1965-1966

The merging bank, located at Hoagland, 14.8 milesto the southeast of the charter bank, has an estimatedpopulation of 535. Its primarily agricultural economysupports about a dozen commercial establishments.The farming area served by the merging bank is re-garded as prosperous and has an exceptionally highratio of owner-occupied homes.

The general area served by the charter bank in-cludes 5 commercial banks with 23 offices. Competi-tion is furnished by the $106.3 million Fort WayneNational Bank and the $68.4 million Peoples Trust& Savings Co. Competition furnished by insurancecompanies, sales finance companies, credit unions, andpersonal loan companies is considered to be sub-stantial.

A problem of management succession at the merg-ing bank is indicated by the desire of the chief operat-ing officer to retire and the inability to find a satis-factory successor. It is only through merger with thecharter bank, with its experienced officers and capablestaff of junior officers, that the merging bank canobtain the effective management it requires.

The resulting bank will offer complete banking serv-ices not now offered by the merging bank, includingtrust services, a consumer credit division and the avail-ability of data processing. Greater operationalefficiency and more advantageous use of capital willresult from the proposed merger. Moreover, the re-sulting bank will be able to meet the credit needs ofworthy borrowers in the community because of itsgreater lending limit.

The effect of the proposed merger on competitionwill be minimal, since there is presently no significantcompetition between the applicant banks. No adverseeffect on competition in the area can be foreseen.

Applying the statutory criteria to this proposal, weconclude that the merger is in the public interest andthe application is, therefore, approved.

JANUARY 27, 1965.


Under the proposed merger agreement the FirstState Bank of Hoagland is to be merged into Lincoln

National Bank & Trust Co. of Fort Wayne under thecharter and title of the latter.

The Lincoln bank is presently the largest bank inFort Wayne and operates three branches in Fort Wayneand one in New Haven, Ind. The bank to be acquiredis located in the town of Hoagland, Ind. (population535), approximately 15 miles southeast of the headoffice of the Lincoln bank and 9 miles from the nearestbranch of the Lincoln bank. The relative size of thetwo banks is reflected in the following table:

Lincoln StateTotal deposits $151,273,000 $2,285,000Total loans 72,548,000 994,000Total fixed assets 2,469,000 29,000Total resources 170, 806,000 2, 507,000

There is no evidence that there is any significantdirect competition betwen the two banks. The areaserved by the Lincoln bank is primarily commercialand industrial whereas the area served by the Statebank is almost exclusively agricultural. State is theonly bank in Hoagland and in view of its small sizeit is unlikely that any additional bank will be openedin that community. Consequently, there is no likeli-hood that potential competition will be eliminated.

Although this merger does not immediately resultin the elimination of any significant direct or potentialcompetition, it is another instance of a large bankabsorbing a small independent bank which has experi-enced a record of substantial growth over the past 10years. It thus contributes to the trend toward concen-tration in banking through the elimination of smallbanks and is likely to induce additional mergers be-cause of the impetus it may generate for other smallbanks to merger in order to secure the competitiveadvantages which the bank in Hoagland will obtainby reason of its association with the larger Lincolnbank.

While this proposed merger will enhance, to a de-gree, the position of the largest bank in Fort Wayneand vicinity where banking resources are alreadyheavily concentrated and may induce further mergers,on balance, we do not believe that the proposed mergerwill have significant adverse effects.

# *

49


1965-1966

THE FIRST NATIONAL BANK OF MILTON, MILTON, N.Y., AND THE FIRST NATIONAL BANK OF HIGHLAND,HIGHLAND, N.Y.


The First National Bank of Milton, Milton, N.Y. (11649), withand the First National Bank of Highland, Highland, N.Y. (5336), which had. .consolidated Feb. 11, 1965, under charter and title of the latter bank (5336).

The consolidated bank at the date of consolidation had

Total assets

$1, 998, 28212,195,482

14, 193, 764

Banking offices

In operation

11

To be operated

2


On November 25, 1964, the $11.9 million FirstNational Bank of Highland, Highland, N.Y., and the$1.9 million First National Bank of Milton, Milton,N.Y., applied to the Comptroller of the Currency forpermission to consolidate under the charter and titleof the former.

The banks are located 5 miles apart in Highlandand Milton. Both communities are located in thesoutheastern corner of Ulster County overlooking theHudson River and both share the same economicbase. The Highland-Milton region, one of the largestfruitgrowing areas in New York State, is the locationof numerous large packinghouses for the storage, proc-essing, and distribution of apples. A large number ofthe residents, however, find it necessary to commuteto the nearby industrial plants located in Newburgand Poughkeepsie.

Highland, with a population of 6,300 and a tradearea of 20,500 is growing and prosperous. The FirstNational Bank of Highland has contributed greatly tothis growth through its progressive outlook and aggres-sive management.

Milton, on the other hand, with a population of 600,is static. The main north-south highway at one timeran through the center of town but the relocation ofthat highway bypassing Milton, marked the beginningof a steady decline in the community. About 50 per-cent of the retail stores, on the main street, are vacantand dilapidated. The First National Bank of Miltonhas suffered with the community decline; its ultracon-servative lending policies, and its low lending capacityhave prevented it from bringing new economic life tothe community. Businessmen seeking business loans,homeowners seeking mortgage loans, consumers seek-ing consumer credit, and farmers seeking mortgageand improvement loans cannot be and are not ade-quately served by their existing "home town bank."As a result these residents now travel to Highland or

Marlboro, 5 and 3 miles distant, respectively, to obtainsatisfaction for their credit needs.

The competition between the consolidating bankswhich will be eliminated is minimal. The consolidatedbank will rank 12th of the 13 existing banks in thearea and will bring into one institution for greateroperating efficiency and better use the capital resourcesof both banks. This addition of capital will increasethe First National Bank of Highland's lending limitand will place it in a better competitive position betterable to serve the residents of the area.

The community of Milton will be the greatest bene-ficiary of this consolidation. It will gain a strong,aggressive, imaginative bank as the first step in re-versing its downhill economic trend.

Applying the statutory criteria to the proposed con-solidation, we conclude that it is in the public interestand the application is, therefore, approved.

FEBRUARY 11, 1965.


The proposed consolidation seeks to combine theFirst National Bank of Highland, an aggressive bankwith assets of $11,960,000, and the First National Bankof Milton, a small unit bank with $1,969,000 in assets.The two banks are located only 5 miles from each otherand there is substantial competition. It will also re-duce the number of banks in the Highland-Milton-Marlboro area, the primary service locale of both in-stitutions, from three to two and will give the resultingbank an extremely high percentage, 75 and 82 percent,respectively, of deposits and loans held by area bankingoffices. Taken in conjunction with the proposedKingston Trust-First National Bank of Marlboromerger, presently pending before the Federal ReserveBoard, it presents an unfavorable merger trend thatwill eliminate from competition two of three inde-pendent institutions. We, therefore, believe that theeffect of the proposed consolidation will be adverse.

50


1965-1966

T H E H O P BOTTOM NATIONAL BANK, H O P BOTTOM, PA., AND THE FIRST NATIONAL BANK OF HALLSTEAD,HALLSTEAD, PA.


The Hop Bottom National Bank, Hop Bottom, Pa. (9647), withand the First National Bank of Hallstead, Hallstead, Pa. (7702), which had..merged Feb. 19, 1965, under charter of the latter bank (7702) and under title

of "Peoples National Bank of Susquehanna County." The merged bank atthe date of merger had

Total assets

$3,408, 6954,413,540

7, 822, 235

Banking offices

In operation

11

To be operated

2


On December 1, 1964, the $4.3 million First Na-tional Bank of Hallstead, Hallstead, Pa., and the $3.4million Hop Bottom, Pa., applied to the Comptrollerof the Currency for permission to merge under thecharter of the former and with the title "Peoples Na-tional Bank of Susquehanna County."

Hallstead, with a population of 1,600 persons anda trade area serving some 16,500 persons, is located inSusquehanna County in rural northeast Pennsylvanianear Binghamton, N.Y. Although an iron foundryand a meatpacking plant provide employment for ap-proximately 250 residents, the community benefits sub-stantially from its proximity to Binghamton with almostone-half of the town's working population employedthere. Notwithstanding the trend of the area's econ-omy toward reliance upon manufacturing industry,dairy farming and related activities still account for thelargest segment of the area's income.

Hop Bottom, located approximately 15 miles southof Hallstead in the same county, has a population of400 persons and serves a trade area of approximately5,500. This community, with no industry and littlecommercial activity, relies for its livelihood primarilyon the dairy and agricultural output of the surroundingarea.

At present, neither the charter bank nor the merg-ing bank is in a position to offer serious competition tothe larger County National Bank of Montrose. Theproposed merger will enable the resulting bank tocompete with the County National Bank for loans tosome of the larger farms and businesses in the area.Approval of the merger, therefore, will work toward amore competitive balance in the banking structure.

Applying the statutory criteria to the proposal, weconclude that it is in the public interest and the appli-cation, therefore, is approved.

FEBRUARY 16,1965.


The proposed merger would eliminate no significantdirect competition between the applicants. It will,however, aggravate the present concentration of bank-ing power in Susquehanna County and eliminate oneindependent bank from an area in which there arepresently only five independents. But in view of thepresent dominance of the largest bank in the countyand the small size and location of the applicants, we donot feel that the proposal would have substantiallyadverse competitive effects.

THE FARMERS' NATIONAL BANK OF MCALISTERVILLE, MCALISTERVILLE, PA., AND THE FIRST NATIONAL BANK OFPORT ROYAL, PORT ROYAL, PA.


The Farmers' National Bank of McAlisterville, McAlisterville, Pa. (9526), with. . .The First National Bank of Port Royal, Port Royal, Pa. (11369), withthe Port Royal National Bank, Port Royal, Pa. (11373), withand the Juniata Valley National Bank, Mifflintown, Pa. (5147), which had. . .merged Feb. 20, 1965, under charter and title of the latter bank (5147). The


Total assets

$3,592, 1902, 532,4483, 114, 6017, 708, 541

16, 947, 780

Banking offices

In operation

1112

To be operated

5

51


1965-1966


On December 7, 1964, the $7.4 million Juniata Val-ley National Bank, Mifflintown, Pa., the $3.4 millionFarmers' National Bank of McAlisterville, Pa., $2.4million First National Bank of Port Royal, Pa., andthe $2.9 million Port Royal National Bank, Port Royal,Pa. applied to the Office of the Comptroller of theCurrency for permission to merge under the charterand with the title "The Juniata Valley NationalBank."

The applicants are located in Juniata County, arural agricultural area in south-central Pennsylvaniaabout 50 miles northwest of Harrisburg, which has apopulation of nearly 16,000 persons. The area ischaracterized by the small size of its farms and busi-nesses. Mountainous terrain in the northern andsoutheastern sections of the county, and lack of aneast-west highway form an effective barrier to contactwith neighboring counties. Because of its isolation,the county's economy has failed to grow.

Mifflintown, home of the charter bank, is a resi-dential community with a population of approxi-

. mately 900 persons which serves a trade area in thecenter of the county containing an estimated 4,000 per-sons. Port Royal, home of two of the merging banks,and McAlisterville, home of the third merging bank,are smaller communities near Mifflintown serving tradeareas with populations estimated at 2,100 and 1,000persons, respectively. None of the three communi-ties has shown more than nominal growth or popula-tion increase over the past 20 years.

Eight banking offices serve Juniata County. Threeof these are branches of noncounty banks, one is a unitbank in Mifflintown, and the remaining four are theoffices of the applicant banks. While approval of thismerger will combine four banks into one, little competi-tions exists between any of the four at present withthe possible exception of the two banks in Port Royal.In that community, the merger will eliminate a localbanking alternative. Notwithstanding this fact, thenonmerging unit bank in Mifflintown and the threebranches of the noncounty banks appear to provideacceptable alternatives since they are located nearby.

It is apparent that lack of size has contributed tothe inability of the county's locally owned banks to offertheir communities better banking services. Consum-mation of the proposed merger, with the consequentcreation of a somewhat broader based bank, may

remedy this situation. The savings achieved throughelimination of the redundant Port Royal office, theeconomy of branch operation, and the centralizationof management should provide at least the impetus fora partial institution of more adequate bankingservices.

Two special problems face these small unit banks:Provision for future management and lending limitstoo small to satisfy community credit demands. Con-summation of the proposed merger should result in abank more capable of training or attracting potentialfuture management. As regards lending limits, in1963, the applicants as a group placed or shared onlytwo loans which exceeded the lending limit of theoriginating bank. However, it is expected that themerger will have a beneficial impact on the county'seconomy through stimulating the creation of largerbusiness and agricultural units and attracting newindustry to the area which will need larger loans. Inthe past, mergers of a similar nature have providedthe nucleus for economic stimulation in areas compara-ble to Juniata County and there is no reason to ex-pect a different result in this case. This merger willprovide another tool in the current effort to improveeconomic conditions in Appalachia.

Applying the statutory criteria, we find the applica-tion to be in the public interest and it is, therefore,approved.

FEBRUARY 16, 1965.


The Juniata Valley National Bank, Mifflintown, Pa.,had, as of October 1, 1964, assets of $7,464,000, de-posits of $6,255,000, loans and discounts of $4,372,000and capital accounts of $ 1,208,000. Its principal officeis located in Mifflintown, Pa., and it has one branchoffice.

The Farmers' National Bank of McAlisterville, Mc-Alisterville, Pa., operates a single office in McAlister-ville, Pa., 9 miles northeast of the principal office ofJuniata Valley National Bank. The First NationalBank of Port Royal, Port Royal, Pa., and the PortRoyal National Bank, Port Royal, Pa., both operatesingle offices in Port Royal, Pa., 3 miles south ofthe principal office of Juniata Valley National Bank.As of October 1, 1964, the financial position of thesebanks was as follows:

52


1965-1966

[In thousands of dollars]

Assets Deposits Loans and Capitalaccounts

The Farmers' National Bank of McAlisterville.The First National Bank of Port RoyalThe Port Royal National Bank

$3,4882,4932,984

$3, 1212,2492,640

$1,8991,4811,507

$367244326

The application is silent with respect to any pres-ently existing competition among the four banks inthe proposed merger. Two of the banks operate in thesame town, Port Royal, and are only 3 miles from theprincipal office of the Juniata Valley National Bank.In addition, the application indicates the banks havecommon direct competitors. Consequently, it appears

that there is substantial direct competition among thebanks which would be eliminated if the merger wereconsummated.

The proposed merger would also eliminate three ofonly seven banks and materially increase concentra-tion in commercial banking in Juniata County, Pa.,and would have an adverse effect upon competition.

* * *

FIRST NATIONAL BANK OF SOUTH GATE, SOUTH GATE, CALIF., AND CITY NATIONAL BANK, BEVERLY HILLS, CALIF.


First National Bank of South Gate, South Gate, Calif. (14899), withand City National Bank, Beverly Hills, Calif. (14695), which hadmerged Feb. 26, 1965, under charter and title of the latter bank (14695).


Total assets

$7, 640,489256, 001, 666263, 642, 155

Banking offices

In operation

112

To be operated

13


On December 14, 1964, the $242 million City Na-tional Bank, Beverly Hills, Calif., and the $8.5 millionFirst National Bank of South Gate, South Gate, Calif.,applied to the Office of the Comptroller of the Cur-rency for permission to merge under the charter andwith the title of the former.

Beverly Hills, a city of 34,000 in Los Angeles County,is unique in its economic influence. Long a nationallyfamiliar community because of its association with thecinema industry, Beverly Hills has also gained promi-nence in the financial, insurance and real estate fieldsdue to the high average family income of $16,335 of itsdenizens, as well as to its proximity to the bustlingbusiness center of Los Angeles. Service and luxuryretail establishments, which serve an area much widerthan Beverly Hills, account for a substantial portion ofbusiness income in the city. Altogether, the economicimpact of the commercial and financial enterprises inBeverly Hills is not confined to the city's corporateboundaries but is augmented by patronage from thewhole of Los Angeles County. Prospects for the futureindicate continued prosperity in Beverly Hills.

City National Bank, with 11 branches in Beverly

Hills and the Los Angeles metropolitan area and 1branch in Palm Springs, serves an area population ofsome 1.1 million persons. In the city of Beverly Hills,the charter bank competes with branches of such majorinstitutions as Bank of America, Security First NationalBank, Crocker-Citizens National Bank, and UnitedCalifornia Bank. In all, there are 18 banking facili-ties in Beverly Hills with 4 banks having their headoffices there. In the entire area served by all branchesof City National Bank, there are some 189 bankingoffices.

South Gate, also in Los Angeles County, has a popu-lation of 57,312. The city is a center of manufactur-ing industries which employ more than one-half ofthe local labor force. Skilled and semiskilled bluecollar workers dominate local employment in the plantsof such companies as General Motors, Firestone Tire& Rubber Co., and American Pipe & Construction Co.The difference in the economic status of citizens andworkers in South Gate and in Beverly Hills is well il-lustrated by the average family income in South Gate,which is $7,682, or some $8,500 per year less than thatof Beverely Hills' families. The South Gate figure iswell above that of the nation as a whole ($5,417), how-ever. In addition, the community's commercial busi-

53


1965-1966

nesses serve citizens outside South Gate. Thus, thepresent economic condition of the city can be describedas prosperous.

The First National Bank of South Gate is a unitbank which has been in operation since May 1960. Itcompetes in South Gate with two branches of the Bankof America and with a branch of Crocker-Citizens Na-tional Bank. Within a 5-mile radius of South Gate,there are 41 additional banking offices.

It is evident that the applicant banks are in one ofthe most flourishing and competitive banking areasin the country. The charter bank, taking advantageof its opportunities in Beverly Hills and the surround-ing area, and because of progressive management anda well-capitalized position, has offered extensive serv-ices to the banking public during its relatively shortexistence since 1953. An average annual growth ratein resources of City National Bank of 23.4 percentduring 1960-64 graphically illustrates this progress.The merging bank, on the other hand, has not offeredthe South Gate public the dynamic banking advancescharacteristic of other banks in the area. While show-ing slightly increased earnings during the past 3 years,the First National Bank of South Gate does not con-sider that it can adequately serve the community in itspresent form.

A union with City National Bank will provide a sal-utary solution to this problem. Such services as mobilehome loans, interim construction financing, escrowservices, domestic credit information, and other serv-ices not offered by the merging bank will now be avail-able at the South Gate office of the resulting bank.The single loan limit for South Gate will increase from$79,000 to in excess of $2.25 million and will thuspermit the bank to handle loan accounts of the heavyand light industries in South Gate. The InternationalBanking Department of the resulting bank will be ableto service the accounts of the several South Gate indus-tries which buy and sell products abroad. Finally,

present management of the merging bank will bebolstered by the proven and forward-looking manage-ment of the charter bank.

These benefits, which will come as a result of themerger, are particularly persuasive in the provision ofa full-service alternative bank to compete with thelarge banks in South Gate to a degree not now possiblebecause of the limitations of the merging bank.

Applying the statutory criteria to the proposedmerger, we conclude that it is in the public interest andthe application is, therefore, approved.

FEBRUARY 18, 1965.


Application has been made to merge the First Na-tional Bank of South Gate, South Gate, Calif., intoCity National Bank of Beverly Hills, Calif., both ofwhich are located in the greater Los Angeles area.

Banking in the Los Angeles area is presently highlyconcentrated in four of the large California branchbank systemsBank of America, Security First Na-tional Bank, United California Bank, and Crocker-Citizens National Bank. Of the total bank depositsin the Los Angeles metropolitan area these four bankspossess approximately 35.4, 25.6, 13.6, and 6 percent,respectively. The acquiring bank will add only ap-proximately 0.06 percent to its much smaller share ofthe total bank deposits in the county as a result of themerger.

In view of the relatively minor size of the applicantbanks in relation to this highly concentrated bankingmarket in which they compete and the fact that theirrespective areas are currently served by numerous othercompetitor banks, as well as numerous branch offices ofthe large California branch bank systems, it is ouropinion that but for the slight increase in concentra-tion the merger of the applicant banks will have littleadverse competitive effect.

THE BIRMINGHAM NATIONAL BANK, DERBY, CONN., AND THE SECOND NATIONAL BANK OF NEW HAVEN, NEWHAVEN, CONN.


The Birmingham National Bank, Derby, Conn. (1098), withand Home National Bank of Derby, Derby, Conn. (15487), withand the Second National Bank of New Haven, New Haven, Conn. (227),

which hadmerged Feb. 26, 1965, under charter and title of the latter bank (227). The


Total assets

$12,532,4551,177,989

125,137, 719

138,844,608

Banking offices

In operation

11

12

To be operated

13

54


1965-1966


On January 4, 1965, the $13 million BirminghamNational Bank, Derby, Conn., and the $1 millionHome Trust Co., Derby, Conn., which has since thattime converted into a National bank with the title"Home National Bank of Derby," applied to theComptroller of the Currency for permission to mergewith the $125 million Second National Bank of NewHaven, New Haven, Conn., under the charter andtitle of the Second National Bank of New Haven.

The applicant banks are located in New HavenCounty in south-central Connecticut. New Haven, thecounty seat, has a population of 152,000 and an im-mediate trade area of 270,000. The city has a strong,stable economy supported by a variety of light andheavy industry, as well as by Yale University, whichis New Haven's largest single employer. Recent urbanrenewal developments have reshaped the center ofthe city, thereby revitalizing the area. Recent auto-motive transport route improvements, as well as im-proved port facilities, have tended to increase NewHaven's role as distribution center for central Con-necticut.

Derby, approximately 10 miles west of New Haven,has a population of 12,000, an increase of 18 percentover the preceding decade. The trade area is pri-marily industrial and residential.

The two merging banks are the only banking officesin Derby. The Home National Bank of Derby, how-ever, is entirely owned by the Birmingham NationalBank. Because of the relationship between the HomeNational Bank of Derby and the Birmingham NationalBank, there is no competition between them which willbe affected by the merger. Further, there is onlynegligible competition from the Second National Bankof New Haven due to the distance between NewHaven and Derby and because the Second National

Bank has done no soliciting of business or intensiveadvertising in Derby. The increased deposit structureof the Second National Bank in relation to the otherNew Haven banks will not substantially change therelative status of any of the New Haven banks.

The proposed merger will solve a lending limit prob-lem, as the present limits at both Derby banks are notsufficient to meet the needs of the area and the in-creased limit will allow the resultant bank to competemore effectively for loans there.

Consummation of the proposed merger will intro-duce to the Derby area improved banking services, in-cluding check credit accounts, auto dealer financingplans, retail sales financing, and improved fiduciaryfacilities and services.


FEBRUARY 26,1965.


The proposed merger of two relatively small bankssome 10 miles west of New Haven into that city'ssecond largest commercial bank would end independ-ent banking in Derby. It would increase by about10 percent the deposits of the acquiring bank and thusadd further to the already dominant position whichthe city's three largest banks enjoy. The mergerwould continue the series of acquisitions which hasbeen responsible for much of the charter bank's recentgrowth. Finally, it would eliminate a degree of bothpresent and prospective competition between themerging banks.

For these reasons, it is our opinion that theproposed merger would have an adverse effect uponcompetition.

THE HOLLISTER NATIONAL BANK, HOLLISTER, CALIF., AND THE BANK OF CALIFORNIA, NATIONAL ASSOCIATION,SAN FRANCISCO, CALIF.


The Hollister National Bank, Hollister, Calif. (13510), withand the Bank of California, National Association, San Francisco, Calif. (9655),

which hadmerged Mar. 12, 1965, under charter and title of the latter bank (9655).


Total assets

$10, 749, 7361,244,107,569

1, 254, 650, 218

Banking offices

In operation

1

54

To be operated

55

55


1965-1966


On December 16, 1964, the $1.17 billion Bank ofCalifornia, National Association, San Francisco, Calif.,and the $11 million Hollister National Bank, Hollister,Calif., applied to the Comptroller of the Currency tomerge under the charter and with the title of the for-mer. San Francisco, a city of over 742,000 inhabi-tants, is a major port and financial center. It enjoys adiverse and prosperous economy based on industry,commerce, finance, and agriculture.

Hollister, located about 95 miles southeast of SanFrancisco, has a population of about 6,500 in a trad-ing area of about 17,000. Its economy is oriented toagriculture and food processing and has experiencedsteady development in recent years.

The charter bank is a full-service, modern bank of-fering the commercial and trust banking services re-quired by a highly organized and industrialized society.It operates 47 branches serving 34 northern, central,and southern California communities and the cities ofSeattle and Tacoma, Wash., and Portland, Oreg. Al-though the sixth largest commercial bank in the State,it holds only about 2.4 percent of total bank depositsin California. Among its competitiors are the $14.8billion Bank of America, the $4.5 billion Security FirstNational Bank, the $3.6 billion Wells Fargo Bank, the$3 billion United California Bank, and $1.3 billionUnion Bank.

The single-office, merging bank is the only independ-ent bank in its service area. It is a well-managedinstitution and has experienced steady development inrecent years. Over the long run, however, it may notbe able to effectively meet the competition offered bythe Hollister Branch of the Bank of America and therecently announced branch in Hollister of Wells Fargo.

The entry of the charter bank into the mergingbank's service area through merger will bring to thatarea the advantages of another large, full-service bank.Trust services, not now offered by the merging bank,will become available to its customers.

The office of the charter bank nearest to the merg-ing bank is 20 miles away and, consequently, the com-petition between them which might be eliminated as aresult of the merger is minimal. The additional re-sources which will be acquired by the charter bank willhave no effect upon the banking structure in Califor-nia except to achieve a somewhat greater efficiencyin use of capital. In Hollister, the competitive picturewill be improved with the arrival of a new broad based

Applying the statutory criteria to this proposal, theapplication is hereby approved.

MARCH 5, 1965.


Hollister National is a successful single-office bankwith assets of $11,049,000, deposits of $10,057,000, andloans of $4,773,000. It is located in Hollister, Calif.,the county seat and principal commercial center ofSan Benito County, an inland agricultural area in thecentral coast region of the State. The only otherfinancial institution in the county is Bank of America,which has a branch office in Hollister and another inSan Juan Bautista, 6 miles west of Hollister.

Bank of California is the 6th largest commercialbank in California and 38th in the Nation, with assetsof $1,165,052,000, deposits of $1,057,383,000, loans of$661,436,000, and substantial trust accounts. It has45 banking offices in California and 1 each in Portland,Oreg., and in Seattle and Tacoma, Wash. Bank ofCalifornia has engaged in seven acquisitions in thepast decade of which the most substantial was con-summated in June 1964.

There appears to be little direct competition betweenHollister National and Bank of California because thelatter's closest offices are from 20 to 45 miles from thecommunities served by Hollister National. The mergerwould, however, eliminate some potential competitionbetween the applicants. By reason of their geographiclocation, the three nearest offices of Bank of Californiaare among the next available alternatives for thosecustomers who are or may in the future become dis-satisfied with the services rendered by the banks withoffices in San Benito County.

The proposed merger would also eliminate the onlylocally owned and controlled bank now serving SanBenito County by converting that bank into anotherbranch of one of California's giant branch bank sys-tems. The excellent earnings record and depositgrowth compiled by Hollister National in recent yearsreflect considerable local demand for the services itoffers and augurs well for its future prospects as an in-dependent competitor in the event the proposed mergeris disapproved.

There is a high level of concentration in California'sbanking industry. The Bank of California and most ofthe State's other largest banks have helped to create thisconcentration by carrying out extensive and aggressivemerger programs. The proposed acquisition wouldaggravate the competitive problems inherent in this

56


1965-1966

merger trend by further concentrating banking re-sources in California's largest banks, by eliminating asuccessful and effective institution which is the onlylocally owned and controlled bank serving its com-

munity, and by eliminating some potential competitionbetween the applicants.

We conclude that the proposed merger would havean adverse effect upon competition.

THE PEOPLES NATIONAL BANK OF LEXINGTON, LEXINGTON, VA., AND THE FIRST NATIONAL EXCHANGE BANK OFVIRGINIA, ROANOKE, VA.


The Peoples National Bank of Lexington, Lexington, Va. (7173), withand the First National Exchange Bank of Virginia, Roanoke, Va. (2737),

which hadmerged Mar. 17, 1965, under charter and title of the latter bank (2737). The


Total assets

$9, 328,046251, 575, 692

260, 542, 308

Banking offices

In operation

3

21

To be operated

24


On January 7, 1965, the First National ExchangeBank of Virginia, Roanoke, Va., and the PeoplesNational Bank of Lexington, Lexington, Va., appliedto the Comptroller of the Currency for permission tomerge under the charter and with the title of theformer.

The First National Exchange Bank maintains head-quarters and five of its branch offices in Roanoke,whose population exceeds 100,000. The Roanokemetropolitan area is the chief commercial and indus-trial complex in southwestern Virginia and servesadditionally as the major distribution center for mostof western Virginia and neighboring sectors of Ten-nessee, West Virginia, and North Carolina. The widevariety and dynamism of the economy fully supportexpectations for continued growth.

In addition to its Roanoke offices, the charter bankoperates 15 branches in 9 outlying communitiesof southwestern Virginia. In varying degree, each ofthese communities is experiencing transition from alargely agricultural economic base to a more diversi-fied base, including light manufacturing, industry, andmining. The city of Bristol, located on the Virginia-Tennessee border, is an exception in that it has alreadybecome a manufacturing and commercial center ofsome importance.

The $8 million merging bank maintains its head-quarters and one of its two recently opened branchesin Lexington, some 45 miles northeast of Roanoke.This town of 8,000 is the county seat, and the majortrading and shopping center of Rockbridge County.Livestock raising and general agricultural pursuits

provide a substantial portion of income in the Lexing-ton area. Economic activity in Lexington dependsin great part on the operations of Washington andLee University and Virginia Military Institute.

The merging bank operates its second branch officein Buena Vista, a town of some 6,500 located 6 milessoutheast of Lexington. Buena Vista has, in contrastto its sister community, enjoyed a recent accelerationin industrial activity which is now providing the majorimpetus for growth. In spite of different economiccircumstances, Lexington and Buena Vista because oftheir geographic proximity and ready access have beenfused into a common trading market and a commonarea for banking competition.

Consummation of the merger will neither appreci-ably affect the relative standing of the charter bankas a major banking competitor in the Commonwealthnor eliminate a significant amount of competitionbetween the merging institutions. The office of thecharter bank nearest Lexington is some 43 milesdistant.

The competitive impact of this merger will be feltchiefly in the Lexington-Buena Vista area. Bankingcompetition in these communities is composed of anadmixture of local institutions and of branches andaffiliates of larger statewide or regional banking oper-ations. Thus, in Lexington, existing banking facili-ties are provided by the merging bank, the $7 millionRockbridge National Bank, and the $3.3 million FirstNational Bank of Lexington. The latter is a sub-sidiary of the large Financial General Corp. whichcontrols a number of banks throughout Virginia. InBuena Vista, banking competition is provided by the

226-60167- 57


1965-1966

recently opened office of the merging bank; the PeoplesBank of Buena Vista, another subsidiary of FinancialGeneral; and a branch office of Virginia NationalBank, the second largest bank in Virginia. The localinstitutions are viable and the introduction of an officeof the charter bank cannot be expected to have sub-stantially adverse results for these institutions. Theaffiliate banks and the branch office of Virginia Na-tional Bank will, to a greater degree, be substantiallyunaffected by consummation of the merger. Thecompetitive effects of the merger on banks in sur-rounding communities will be negligible as the com-petitive efforts of these institutions have historicallybeen directed to local banking markets. It is ourjudgment, therefore, that the merger will not haveadverse consequences on the banking structure in theLexington-Buena Vista area.

The merger will prove to be of distinct benefit tothe Lexington-Buena Vista community. As experi-ence had demonstrated in like circumstances, thecharter bank and other similar major regional bankinginstitutions make available a broadened range of bank-ing services and specialties. It is of particular im-portance to developing areas such as the Lexington-Buena Vista region that the introduction of regionalbanking facilities has frequently proven a catalyst tothe establishment and growth of needed industry and

commerce. To this end, the charter bank is equippedto offer the full range of trust facilities, specializedfarm credit services, larger lending limits to assist inindustrial expansion, and the capital funds necessaryto meet local loan demand that cannot be satisfiedout of locally generated deposits.


MARCH 16, 1965.


Since October of 1960, First National ExchangeBank, the largest bank in southwestern Virginia, hasmerged 9 banks with 15 banking offices. From thesebanks, at the time merged, 45 percent of the presentdeposists and over 71 percent of the present bankingoffices of First National Exchange Bank were acquired.

The explosive growth of First National ExchangeBank via the merger process and the resultant elimina-tion of nine independent banks in the space of about 4years is a source of concern from a competitive stand-point; particularly so since it contributes to the rapidlyincreasing concentration of banking in Virginia bylarge banking institutions. The approval of the instantmerger would further encourage this trend and resultin an adverse effect on competition.

TRYON BANK & TRUST CO., TRYON, N.C., AND NORTH CAROLINA NATIONAL BANK, CHARLOTTE, N.C.


Tryon Bank & Trust Co., Tryon, N.C, withand North Carolina National Bank, Charlotte, N.C. (13761), which hadmerged Mar. 22, 1965, under the charter and title of the latter bank (13761).


Total assets

$8, 978, 708708, 867, 916

717,068,468

Banking offices

In operation

270

To be operated

72


On January 19, 1965, the North Carolina NationalBank, Charlotte, N.C, and the Tryon Bank & TrustCo., Tryon, N.C, applied to the Comptroller of theCurrency for permission to merge under the charterand with the title of the former.

The charter bank, with 68 offices, serves 12 principalcities in North Carolina. Charlotte, the site of themain office of the charter bank, is the largest city of thetwo Carolinas, with a city population exceeding 225,000and trade area population of 500,000. It is the com-mercial, financial, and distribution center of the largest

industrial area in the two States and one of the largestin the South. Many nationally known and diverseconcerns have factories in the area. Other majorcities served by the charter bank include Greensboro,the second largest city in the State with an estimatedpopulation of 135,000, and Winston-Salem, thirdlargest city in the State with an estimated populationof 112,000. Both cities lie in areas containing im-portant concentrations of the textile, tobacco, andinsurance industries.

Tryon is located at the western part of the Statein the foothills of the Blue Ridge Mountains, approxi-mately 3 miles from the South Carolina border. With

58


1965-1966

a population of 2,200 persons, Tryon is in Polk County,which has some 11,400 residents. Due to an unusualthermal belt which extends through the area bringingmild winters and cool summers, the area has become ahaven for wealthy retired individuals. Industry con-sists of a number of textile mills and smaller concernsdealing in wood products. In all, some 85 manufac-turing and commercial firms in Polk County have anannual payroll exceeding $4.5 million. The county,heretofore considered remote because of location andinferior road networks, anticipates increased economicactivity and industrial expansion when north-southInterstate Route 26 is completed.

The charter bank, although second in size amongbanks in North Carolina, operated only 8.2 percentof the banking offices located within the State andholds only 15 percent of the total deposits held byall banks in the State. It is in direct competition withthe Wachovia Bank & Trust Co., Winston-Salem; theFirst Union National Bank, Charlotte; and the First-Citizens Bank & Trust Co., Smithfield. The majorityof the charter bank's offices are located in the indus-trialized and economically well-diversified Piedmontsection of the State. It has no offices in the westernpart of the State.

The merging bank is the only bank in Tryon. Itoperates a branch at Columbia, approximately 4 milesnorth of Tryon. Competition is offered by 5 banksoperating 11 offices within a radius of 23 miles fromTryon. Tryon Trust is the smallest, holding 1 percentof the total deposits in the service area. The principalcompetition to Tryon Trust is provided by the $150 mil-lion First Commercial National Bank of South Caro-lina, which operates a branch 5 miles from Tryon.Other competition is offered by the $500 million FirstUnion National Bank of North Carolina and the $200million Northwestern Bank, North Wilkesboro.

The addition of the merging bank to the charterbank will have no adverse effects on competition on astatewide basis or in the primary service areas of thecharter bank. Consummation of the proposed mergerwill increase the charter bank's share of total depositsin the State by only 0.2 percent. The nearest officesof the participating banks are located in Charlotteand Tryon, some 100 miles apart. With the possibleexception of a limited amount of competition for trustaccounts, there is no competition between the partici-pating banks which would be eliminated by the pro-posed merger.

Consummation of the proposed merger will servethe convenience and needs of the Tryon community

more adequately than at present. Tryon Trust pres-ently has a lending limit of some $65,000. The result-ing bank will have a lending limit in excess of $4.5 mil-lion, and will thus be better equipped to compete foraccounts of the large- and moderate-size business firmsin the Tryon area and to meet their credit needs. Theretired residents in Tryon, many of whom have majortrust accounts with large banks elsewhere due to theinability of the local bank to service such accounts, willbe better served by the resulting bank. The charterbank operates an extensive trust department and holdssubstantial trust assets of Tryon residents. The charter,bank will also bring to Tryon diversified services, in-cluding an industrial development department staffedwith specialized personnel who will assist in develop-ing the anticipated economic and industrial growthof the area. The merging bank, due to its size andlimited resources, is not in a position to entice industryto locate in the area.

Although the Tryon bank has long been a soundlymanaged bank, its leadership and policies have pro-vided for no management succession. Merger withthe charter bank will bring with it strong and extensivemanagement.


MARCH 19, 1965.


North Carolina National Bank, the second largestbank in North Carolina in deposits, which operatesover 64 offices throughout the State proposes to acquireTryon Bank & Trust Co., a small independent bank inTryon which has a small branch office located to thenortheast in Columbus.

The merger, if approved, will eliminate any poten-tial competition between the two banks and it willresult in the disappearance of another prosperous in-dependent bank in North Carolina where commercialbanking has shown a constant trend toward concentra-tion. The North Carolina National Bank itself hasmaterially contributed toward this concentration bymerging into it since September 1960, five smallerbanks and increasing its share of total deposits in theState to over 15 percent.

We believe that the overall effect of this mergerupon competition in banking in North Carolina againstthe background of growing concentration by merger,will be adverse.

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1965-1966

THE LIVE STOCK NATIONAL BANK IN CHICAGO, CHICAGO, I I I . , AND CENTRAL NATIONAL BANK IN CHICAGO,CHICAGO, I I I .


The Live Stock National Bank in Chicago, Chicago, 111. (13674), withand Central National Bank in Chicago, Chicago, 111. (14362), which hadmerged Mar. 26, 1965, under the charter and title of the latter bank (14362).


Total assets

$56, 033, 278260, 559, 166

311,592,444

Banking offices

In operation

11

To be operated

1


On December 16, 1964, the $247 million CentralNational Bank in Chicago, Chicago, III, and the $59million Live Stock National Bank of Chicago, Chicago,111., applied to the Comptroller of the Currency forpermission to merge under the charter and with thetitle of the former.

Chicago, with a population in excess of Zl/i million,is the focal point of a large metropolitan area number-ing over 6 million inhabitants. It is one of the largestcities in America, strategically located in the middlepart of the country close to sources of raw materialsand markets. It is one of the great industrial com-plexes of America. It is the hub of the Nation's majorrailroad systems and has a large port on the GreatLakes which connects it by water to the rest of theworld. In addition to being an important industrialcity leading all others in the production of steel, tele-phone equipment, metal wares, and machinery, it is thefinancial center for the Midwest.

The charter bank was organized in 1936. As one ofthe banks located in the financial district of Chicago,it presently ranks seventh among the metropolitan areabanks. Chief among its many competitors are theContinental Illinois National Bank, the First NationalBank, the Harris Trust Co., the Northern Trust Co.,the American National Bank, and the La Salle Na-tional Bank.

The merging bank is located about 5 miles southof the charter bank. The Chicago stockyards, whichwere the source of most of the merging bank's bankingactivities, have been declining since 1950, resulting indepressed conditions throughout the bank's servicearea. Nevertheless, the bank has been successful inmaintaining active correspondent banking relation-ships with banks located primarily in the cattle feedingareas of the Midwest. It is doubtful, however, that themaintenance of the merging bank as an independentinstitution can contribute in any measure to the growthand prosperity of the Chicago metropolitan area.

Consummation of the proposed merger will solve theproblem of a bank faced with an uncertain futurecaused by economic deterioration of its neighborhood.The Chicago public will benefit from the resulting bet-ter use of capital and operating efficiency. Moreover,the merger will be a step in the progressive movementto create larger regional banks which must grow bymerger in Illinois because of the anachronistic anti-branching laws there.

This proposal will have no significant adverse effectsupon competition in the Chicago area. The dollaramount of the resulting bank's assets in relation to thesize of its relevant market, to the needs of its relevantmarket, or to the size and number of its competitors arehardly overwhelming. Indeed, although the Chicagometropolitan area largely generates the necessary bank-ing resources to support a dynamic economy withoutexcessive reliance on banking resources located else-where, these resources are so scattered among some 135banks that only a minority of banks have sufficientresources to satisfy the demands of the area's substantialcorporate manufacturing and other enterprises and toabsorb the risks inherent in financing newer andhealthy younger enterprises.

Applying the statutory criteria to this proposal, theapplication is hereby approved.

MARCH 22,1965.


The proposed merger of Central National Bank inChicago and Live Stock National Bank of Chicagowould have significantly adverse effects upon competi-tion in the Chicago area.

The commercial banking structure in the city ofChicago is characterized by heavy concentration of re-sources, particularly among the Loop banks, of whichCentral is one. With such degree of heavy concentra-tion, percentage shares of banks other than the twolargest may not at first glance seem very large. How-ever, their absolute dollar amounts are substantial.

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1965-1966

Thus, to argue, as the application does, that the result-ing bank in the proposed merger would have a smallpercentage share of the market ignores that it wouldhave $306.7 million in assets, and would be $41.6 mil-lion larger than the next largest bank, La SalleNational.

The present Chicago banking structure intensifiesthe competitive pressure felt by its many small bankseach time one of the larger banks is permitted to merge.Such pressure may well induce these smaller banks toseek similar unions with other banks, with consequentcumulative anticompetitive results.

The proposed merger would eliminate the sub-stantial competition between Central and Live Stockfor the deposits and loans originating in those areas ofChicago in which both compete. This competition, interms of percentages as well as dollar amounts, is sig-nificant. Moreover, since Illinois is a unit bankingState, the independent banking facility now operatedby Live Stock would be denied to the public.

Central has thus far had an extensive merger his-tory which presently shows no signs of abating. Within

the past 10 years, Central has caused, through acquisi-tions, the closing of 4 banking facilities in Chicago.These 4 banks brought to Central 48 percent of itspresent dollar amount in deposits and 36 percent of itsdollar amount in loans.

That Live Stock's area currently has a relativelyshort-term unfavorable economic outlook should notjustify the merger with the much larger Central.Merger with other and smaller banks in Live Stock'simmediate area or in the city of Chicago could makeLive Stock's future brighter without the anticompeti-tive effects that would flow from its merger with Cen-tral. To use the present urban redevelopment disloca-tion as justification for the approval of mergers withanticompetitive effects is to establish a poor precedent.The very progress our cities are seeking could well beimpeded by the absence of experienced banks in theredeveloped areas.

The proposed merger would have significantly ad-verse effects upon competition in commercial bankingin the Chicago area.

THE CENTRAL BANK OF HOWARD COUNTY, CLARKSVILLE, MD., AND THE CITIZENS NATIONAL BANK OF LAUREL,LAUREL, MD.


The Central Bank of Howard, County, Clarksville, Md., withand the Citizens National Bank of Laurel, Laurel, Md. (4364), which had. . .merged Mar. 31, 1965, under the charter of the latter bank (4364) and under

title "The Citizens National Bank." The merged bank at the date of mergerhad

Total assets

$4, 793, 15423, 665, 674

28, 454, 838

Banking offices

In operation

25

To be operated

7


On January 21, 1965, the Citizens National Bank ofLaurel, Laurel, Md., and the Central Bank of HowardCounty, Clarksville, Md., applied to the Comptrollerof the Currency for permission to merge under thecharter of the former and with the title "The CitizensNational Bank."

Laurel, the headquarters of the charter bank, is lo-cated about midway between Baltimore and Washing-ton in the approximate center of the rapidly mergingBaltimore-Washington metropolitan area. AlthoughLaurel is essentially a residential and commercial com-munity, many of its 10,000 residents are engaged in awide diversification of local industries, including pri-vate research and development, small manufacturing

plants, military and Government facilities, and localbusinesses. There are presently over 80,000 employeesworking within 12 miles of the city.

The merging bank maintains its main office and itsone branch in Howard County. Clarksville is the siteof Central's main office, and is a predominantly agri-cultural community, with an estimated population of2,000, located 13 miles to the northwest of Laurel.There has been a recent population increase in thisarea due to the local development of new researchfacilities. Simpsonville, a farm community approxi-mately 5 miles southeast of Clarksville and the site ofCentral's branch office, has a population of 1,000.There are long-range plans for the establishment of anew city, Columbia City, to contain 100,000 peoplein the Howard County area.

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1965-1966

As the merging banks are 13 miles apart, there willbe no significant elimination of competition. Othercompetitors in this area include such major banks asEquitable Trust Co., Baltimore, Md.; American Na-tional Bank of Maryland, Silver Spring, Md.; Sub-urban Trust Co., Hyattsville, Md.; and Citizens Bankof Maryland, Riverdale, Md.

Applying the statutory criteria to the proposedmerger, we find that this proposal is in the public in-terest and it is, therefore, approved.

MARCH 22, 1965.


The Citizens National Bank of Laurel (Citizens)has requested permission to merge with the CentralBank of Howard County (Central), under the titleof "The Citizens National Bank."

The main offices of the two banks are located 13

miles apart and their service areas do not overlap toany substantial degree. Because of the distance be-tween the banks, the proposed merger is not expectedto eliminate any substantial competition between Citi-zens and Central.

Citizens is the smallest bank in its service area withapproximately 2.67 percent of total area deposits.The addition of Central's deposits to those of Citizenswould increase Citizens percentage approximatelyone-half of 1 percent. In view of the size of the largebanks in Citizens' service area, it is unlikely that theaddition of Central's assets would result in a substan-tial lessening of competition.

Although Central is presently the only bank withina radius of 9 miles any advantage derived from itslocation is expected to be of short duration in view ofthe intention of two large banks to open branches inCentral's service area.

GUARANTY BANK, TORRANCE, CALIF., AND CITY NATIONAL BANK, BEVERLY HILLS, CALIF.


Guaranty Bank, Torrance, Calif., withand City National Bank, Beverly Hills, Calif. (14695), which hadmerged Apr. 2, 1965, under charter and title of the latter bank (14695). The


Total assets

$5, 235, 895268, 858, 640

274, 094, 536

Banking offices

In operation

113

To be operated

14


On January 26, 1965, the City National Bank, Bev-erly Hills, Calif., and the Guaranty Bank, Torrance,Calif., applied to the Office of the Comptroller of theCurrency for permission to merger under the charterand with the title of the former.

Beverly Hills, a city of 34,000 in Los Angeles County,is prominent in the financial, insurance, and real estatefields. Its wealthy residents, as well as its proximityto the business center of Los Angeles, indicate continu-ing prosperity for the future.

Torrance, with a population in excess of 125,000,is located in the southwestern part of Los AngelesCounty, about 22 miles south of downtown LosAngeles. It has a diversified industrial economy whichsupports a rapidly increasing population.

The charter bank operates 10 branches in the LosAngeles metropolitan area and 1 at Palm Springs, allbut 1 of which were established de novo.

The single office merging bank is over two yearsold and is experiencing competition from 20 existing

or approved offices of other banks, as well as savingsand loan associations, within a 3-mile radius. Thebank has had management problems since its incep-tion and has not made provision for managementsuccession.

Consummation of the proposed merger will resultin greater efficiency in operations and use of capital,as well as provide the merging bank's customers withservices not now available. Moreover, the availabilityof the charter ba

8151_1965-1969

Documents

size of bank

themerged bank

bank combinedcapital

federal reserve bank

branches of national

single office merging

northcentral new york

total resources