ORDERS ISSUED UNDER BANK HOLDING ACT.

Orders Issued Under Section 3 of the Bank Holding Company Act

Australia & New Zealand Banking Group Limited Melbourne, Australia

Order Approving the Acquisition of a Bank

Australia & New Zealand Banking Group Limited, a foreign banking organization subject to the Bank Holding Company Act ("BHC Act"), has requested the Board's approval under section 3 of the BHC Act (12 U.S.C. [sections] 1842) to acquire all voting shares of Amerika Samoa Bank, Pago Pago, American Samoa ("Amerika Samoa").

Notice of the proposal, affording interested persons an opportunity to submit comments, has been published (65 Federal Register 34,182 (2000)). The time for filing comments has expired, and the Board has considered the proposal in light of the factors set forth in section 3 of the BHC Act.

ANZ has total consolidated assets of approximately $88 billion and is the second largest banking organization in Australia.(1) ANZ operates a branch in New York, New York, and engages in limited nonbanking activities in the United States.

Amerika Samoa is the second largest banking operation in American Samoa, controlling deposits of $44 million, representing 44 percent of all deposits in commercial banking organizations in American Samoa. ANZ does not have banking operations in the, banking market in which Amerika Samoa operates. Based on this and the other facts of record, the Board concludes that consummation of the proposal would not have a significantly adverse effect on competition or on the concentration of banking resources in any relevant banking market, and that competitive considerations are consistent with approval.

Certain Supervisory Considerations

Under section 3 of the BHC Act, the Board may not approve an application involving a foreign bank unless the bank is "subject to comprehensive supervision or regulation on a consolidated basis by the appropriate authorities in the bank's home country."(2) The Board has made the following findings with regard to the supervision of ANZ.

The home country supervisor of ANZ is the Australian Prudential Regulation Authority ("APRA").(3) The Board previously determined, in an application filed under section 3 of the BHC Act, that another Australian bank was subject to home country supervision on a consolidated basis.(4) The Board finds that ANZ is supervised in substantially the same manner as the other Australian bank. Based on this finding and all the facts of record, the Board concludes that ANZ is subject to comprehensive supervision on a consolidated basis by its home country supervisor.

The BHC Act also requires the Board to determine that ANZ has provided adequate assurances that it will make available to the Board such information on its operations and activities and those of its affiliates that the Board deems appropriate to determine and enforce compliance with the BHC Act.(5) The Board has reviewed the restrictions on disclosure in jurisdiction where ANZ has material operations and has communicated with relevant government authorities concerning access to information. ANZ has committed that it will make available to the Board such information on its operations and the operations of any of its affiliates that the Board deems necessary to determine and enforce compliance with the BHC Act, the International Banking Act (12 U.S.C. 3101 et seq.), and other applicable federal law. ANZ also has committed to cooperate with the Board to obtain any waivers or exemptions that may be necessary in order to enable ANZ to make any such information available to the Board. In light of these commitments and other facts of record, the Board concludes that ANZ has provided adequate assurances of access to any appropriate information the Board may request.

Other Factors Under the BHC Act

The Board also has carefully considered the financial and managerial resources and future prospects of the banks and companies involved in this proposal, the convenience and needs of the communities to be served, and other supervisory factors applicable under the BHC Act.(6) ANZ's capital levels exceed the levels required under Australian capital guidelines.

The capital levels of ANZ also exceed the capital levels under the Basle Capital Accord and are considered equivalent to the capital levels that would be required of a U.S. banking organization under similar circumstances.

The Board has reviewed supervisory information from the home country authorities responsible for supervising ANZ, confidential financial information from ANZ, and reports of examination from the appropriate federal and state supervisors of the organizations involved in the proposal assessing the financial and managerial resources of the organizations. Based on all the facts of record, the Board has concluded that the financial and managerial resources and future prospects of the organizations involved in the proposal are consistent with approval, as are other supervisory factors that the Board must consider under section 3 of the BHC Act. Considerations related to the convenience and needs of the communities to be served, including the performance record of Amerika Samoa under the Community Reinvestment Act (12 U.S.C. [sections] 2901 et seq.) ("CRA"), also are consistent with approval of the proposal.(7)

Conclusion

Based on the foregoing and all the facts of record, the Board has determined that the application should be, and hereby is, approved. The Board's approval is specifically conditioned on ANZ's compliance with all the commitments made in connection with this application. The approval is also specifically conditioned on the Board's receiving access to information on the operations or activities of ANZ and any of its affiliates that the Board determines to be appropriate to determine and enforce compliance by ANZ and its affiliates with applicable federal statutes. The commitments and conditions imposed in writing by the Board in connection with its findings and decision and, as such, may be enforced in proceedings under applicable law.

The acquisition of Amerika Samoa shall not be consummated before the fifteenth calendar day following the effective date of this order, and the proposal shall not be consummated later than three months after the effective date of this order, unless such period is extended for good cause by the Board or the Federal Reserve Bank of New York, acting pursuant to delegated authority.

By order of the Board of Governors effective August 7, 2000.

Voting for this action: Chairman Greenspan, Vice Chairman Ferguson, and Governors Kelley, Meyer, and Gramlich.

(1.) Asset data are as of December 31, 1999, and use exchange rates then in effect, and deposit data are as of June 30, 1999.

(2.) 12 U.S.C.[sections] 1842(c)(3)(B). As provided in Regulation Y, the Board determines whether a foreign bank is subject to consolidated home country supervision under the standards set forth in Regulation K. See 12 C.F.R. 225.13(a)(4). Regulation K provides that a foreign bank may be considered subject to consolidated supervision if the Board determines that the bank is supervised or regulated in such a manner that its home country supervisor receives sufficient information on the worldwide operations of the foreign bank, including the relationships of the bank to its affiliates, to assess the foreign bank's overall financial condition and compliance with law and regulation. See 12 C.F.R. 211.24(c)(1)(ii).

(3.) In July 1998, the APRA assumed the bank supervisory functions formerly exercised by the Reserve Bank of Australia. This transfer of supervisory responsibilities has not resulted in any material changes in the scope or nature of the supervision of Australian banks.

(4.) See National Australia Bank Ltd., 81 Federal Reserve Bulletin 1153 (1995).

(5.) See 12 U.S.C. [sections] 1842(c)(3)(A).

(6.) The Board received one comment from an individual who objected to the manner in which Amerika Samoa selects outside real estate appraisers in American Samoa. An institution's selection of its outside contractors generally is beyond the scope of factors that the Board is permitted to consider under section 3 of the BHC Act, and the record does not indicate that Amerika Samoa's selection criteria has had an adverse effect on the bank. The Board has forwarded the comment to the Federal Deposit Insurance Corporation ("FDIC") and the Department of Legal Affairs of the Territory of American Samoa, the appropriate federal and state supervisors of Amerika Samoa.

(7.) Amerika Samoa was rated "outstanding" in its most recent CRA performance evaluation conducted by the FDIC, as of June 8, 1998.

ROBERT DEV. FRIERSON
Associate Secretary of the Board

First Bancorp Troy, North Carolina

Order Approving the Acquisition of a Bank Holding Company

First Bancorp, a bank holding company within the meaning of the Bank Holding Company Act ("BHC Act"), has requested the Board's approval under section 3 of the BHC Act (12 U.S.C. 1842) to acquire First Savings Bancorp, Inc. ("First Savings") and its wholly owned subsidiary bank, First Savings Bank of Moore County, Inc., SSB ("Bank"), both of Southern Pines, North Carolina.(1)

Notice of the proposal, affording interested persons an opportunity to submit comments, has been published (65 Federal Register 21,198 (2000)). The time for filing comments has expired, and the Board has considered the proposal and all comments received in light of the factors set forth in section 3 of the BHC Act.

First Bancorp, with total consolidated assets of approximately $624 million, is the 15th largest depository institution in North Carolina, controlling approximately $452 million in deposits, representing less than 1 percent of total deposits in depository institutions in the state ("state deposits").(2) First Savings, with total consolidated assets of approximately $330 million, is the 26th largest depository institution in North Carolina, controlling deposits of approximately $232 million, representing less than 1 percent of state deposits. On consummation of the proposal and taking into account the proposed divestiture discussed in this order, First Bancorp would become the tenth largest depository institution in North Carolina, controlling deposits of approximately $668 million, representing less than 1 percent of state deposits.

Competitive Considerations

Section 3 of the BHC Act prohibits the Board from approving an application to acquire a bank holding company if the proposal would result in a monopoly or would be in furtherance of any attempt to monopolize the business of banking. Section 3 of the BHC Act also prohibits the Board from approving a proposed combination that substantially would lessen competition or tend to create a monopoly in any relevant banking market, unless the Board finds that the anticompetitive effects of the proposal clearly are outweighed in the public interest by the probable effects of the proposal in meeting the convenience and needs of the community to be served.(3)

First Bancorp and First Savings compete directly in the Moore County banking market, which the Federal Reserve Bank of Richmond (the "Reserve Bank") has defined as Moore County, North Carolina. The Board has carefully reviewed the competitive effects of the proposal in the relevant banking market in light of all the facts of record, including the attractiveness of the market for entry, the number of competitors that would remain in the market on consummation of the proposal, the concentration levels of market deposits and the increase in these levels as measured by the Herfindahl--Hirschman Index ("HHI") under the Department of Justice Merger Guidelines ("DOJ Guidelines"), and other characteristics of the market.(4)

In order to determine the effect of a particular transaction on competition, it is necessary to designate the area of effective competition between the parties, which the courts have held is decided by reference to the relevant "line of commerce," or product market, and geographic market. The Board and the courts consistently have recognized that the appropriate product market for analyzing the competitive effects of mergers and acquisitions is the cluster of products (various kinds of credit) and services (such as checking accounts and trust administration) offered by banking institutions, and First Bancorp has not challenged that definition of the product market.(5) However, First Bancorp has suggested that the relevant geographic market includes not only Moore County, but also all the counties that are contiguous to Moore County.

In defining the relevant geographic market, the Board consistently has sought to identify the area in which the cluster of banking products and services is provided by competing institutions and in which purchasers of the products and services seek to obtain these products and services.(6) In applying these standards to bank acquisition proposals, the Board and the courts repeatedly have held that the geographic market for the cluster of banking products and services is local in nature.(7) In delineating the relevant geographic market in which to assess the competitive effects of a bank merger or acquisition, the Board reviews population density; worker commuting patterns; the usage and availability of banking products; advertising patterns of financial institutions; the presence of shopping, employment, healthcare, and other necessities; and other indicia of economic integration and transmission of competitive forces among banks.(8)

Commuting data for 1990 from the U.S. Bureau of the Census indicated that only one contiguous county, Hoke County, had a significant number of its workforce commuting to Moore County. However, an equal number of Hoke County residents commuted to Cumberland County, which includes the city of Fayetteville. All the bank offices in Hoke County are located in a town included in the Fayetteville Ranally Metropolitan Area ("RMA"). These data suggest that the banking activity in Hoke County is aligned more closely with Cumberland County and the Fayetteville RMA than with Moore County. In addition to reviewing carefully commuting patterns, the Board has considered other data, including information obtained from local economic officials in the Moore County area, and has concluded that the facts of record do not support expanding the Moore County banking market.

Based on the Reserve Bank's analysis of the appropriate market definition and all the facts of record, including commuting patterns and other commercial patterns throughout Moore County and the contiguous counties, the Board concludes that the appropriate geographic market for considering the competitive effects of the proposal is Moore County.

First Bancorp's subsidiary bank is the third largest depository institution in the Moore County banking market and controls deposits of $104.5 million, representing 11.3 percent of total deposits in depository institutions in the market ("market deposits").(9) The First Savings subsidiary bank is the second largest depository institution in the banking market and controls deposits of $115.9 million, representing 12.5 percent of market deposits. To reduce the potential for adverse effects on competition, First Bancorp has committed to divest one branch that controls approximately $15.6 million in deposits to an out-of-market firm.(10) After the proposed merger and divestiture, First Bancorp would become the second largest competitor in the market, controlling 30.8 percent of market deposits, and the HHI would increase 349 points to 2146.

Numerous factors suggest that the increase in concentration as measured by the HHI does not indicate a significantly adverse effect on competition in the Moore County banking market in this case after the proposed divestiture. Because the proposed divestiture would be to an out-of-market banking organization, a new competitor would enter the banking market as a result of the proposal. The total number of competitors in the banking market would remain unchanged at twelve, including four large multistate banking organizations, one of which would be the largest depository institution in the market, controlling 31.5 percent of market deposits.

In addition to the structural factors discussed above, the Moore County banking market has characteristics that indicate it is attractive for entry. Two depository institutions have entered the banking market de novo since June 1997, including one entrant earlier this year. The banking market is a relatively large rural county with deposits of approximately $1 billion, ranking third among the 65 rural counties in North Carolina in total deposits.(11) In the last three years the population of Moore County has increased 2.1 percent, which is almost twice the average rate of population increase in rural counties in North Carolina. Moreover, the per capita income level in Moore County exceeds the average for rural counties in the state.

The Board believes that the foregoing considerations, including the number of competitors that would remain in the Moore County banking market after consummation of the proposal and the structure and attractiveness of that market, mitigate the potential anticompetitive effects of the transaction in this case.

The Department of Justice has conducted a detailed review of the proposal and advised the Board that consummation of the proposal likely would not have a significantly adverse effect on competition in any relevant banking market. The Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation also have been afforded an opportunity to comment and have not objected to consummation of the proposal.

After carefully reviewing all the facts of record, and for the reasons discussed in this order, the Board concludes that consummation of the proposal would not be likely to result in a significantly adverse effect on competition or on the concentration of banking resources in the Moore County banking market or in any other relevant banking market. Accordingly, based on all the facts of record and subject to completion of the proposed divestiture and compliance with related commitments, the Board has determined that competitive effects are consistent with approval of the proposed transaction.

Other Considerations

Section 3 of the BHC Act requires the Board, in acting on an application, to consider the financial and managerial resources and future prospects of the companies and banks involved and certain supervisory factors. The Board has reviewed these factors in light of the record, including supervisory reports of examination assessing the financial and managerial resources of the organizations and financial information provided by First Bancorp. Based on all the facts of record, the Board concludes that the financial and managerial resources and future prospects of First Bancorp, First Savings, and their respective subsidiary banks are consistent with approval, as are the other supervisory factors the Board must consider under section 3 of the BHC Act.

Section 3 of the BHC Act also requires the Board to consider the convenience and needs of the communities to be served. The Board has reviewed information presented by First Bancorp related to the convenience and needs factor and the records of performance of the relevant depository institutions under the Community Reinvestment Act (12 U.S.C. [sections] 2901 et seq.) ("CRA"). Based on all the facts of record, the Board concludes that considerations relating to the convenience and needs of the communities to be served, including the CRA performance records of the depository institutions of First Bancorp and First Savings, are consistent with approval.

Conclusion

Based on the foregoing, and in light of all the facts of record, the Board has determined that the application should be, and hereby is, approved. Approval of the application is conditioned specifically on compliance by First Bancorp with all the commitments made in connection with the proposal, including First Bancorp's divestiture commitments, and with the conditions stated or referred to in this order. For the purpose of this action, the commitments and conditions relied on by the Board in reaching its decision are deemed to be conditions imposed in writing by the Board in connection with its findings and decision and, as such, may be enforced in proceedings under applicable law.

The acquisition of First Savings shall not be consummated before the fifteenth calendar day following the effective date of this order, or later than three months after the effective date of this order, unless such period is extended for good cause by the Reserve Bank acting pursuant to delegated authority.

By order of the Board of Governors, effective August 21, 2000.

Voting for this action: Chairman Greenspan, Vice Chairman Ferguson, and Governors Kelley, Meyer, and Gramlich.

(1.) First Bancorp also has requested approval to exercise an option to acquire up to 19.9 percent of First Savings's voting shares on the occurrence of certain events. The option would expire on consummation of this proposal. In addition, First Bancorp intends to merge Bank with and into First Bancorp's existing subsidiary bank after consummation of the holding company merger.

(2.) Asset data are as of June 30, 2000, and deposit and ranking data are as of June 30, 1999. In this context, depository institutions include commercial banks, savings banks, and savings associations.

(3.) 12 U.S.C. [sections] 1842(c).

(4.) Under the DOJ Guidelines, 49 Federal Register 26,823 (1984), a market in which the post-merger HHI is more than 1800 is considered highly concentrated. The Department of Justice has informed the Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anticompetitive effects) unless the post-merger HHI is at least 1800 and the merger increases the HHI by more than 200 points. The Department of Justice has stated that the higher than normal thresholds for screening bank mergers for anticompetitive effects implicitly recognize the competitive effects of limited-purpose lenders and other nondepository financial institutions.

(5.) See First Security Corporation, 86 Federal Reserve Bulletin 122 (2000) ("First Security"); see also Chemical Banking Corporation, 82 Federal Reserve Bulletin 239 (1996) ("Chemical"), and the cases and studies cited therein. The Supreme Court has emphasized that it is the cluster of products and services that, as a matter of trade reality, makes banking a distinct line of commerce. See United States v. Philadelphia National Bank, 374 U.S. 321,357 (1963) ("Philadelphia National"); accord United States v. Connecticut National Bank, 418 U.S. 656 (1974); United States v. Phillipsburg National Bank, 399 U.S. 350 (1969) ("Phillipsburg National").

(6.) See, e.g., First Security; Sunwest Financial Services, Inc., 73 Federal Reserve Bulletin 463 (1987); Pikeville National Corporation, 71 Federal Reserve Bulletin 240 (1985); Wyoming Bancorporation, 68 Federal Reserve Bulletin 313 (1982); aff'd 729 F.2d 687 (10th Cir., 1984).

(7.) See Philadelphia National, 374 U.S. at 357; Phillipsburg National; First Security; First Union Corporation, 84 Federal Reserve Bulletin 489 (1998); Chemical; St. Joseph Valley Bank, 68 Federal Reserve Bulletin 673 (1982).

(8.) See Chemical; Crestar Bank, 81 Federal Reserve Bulletin 200, 201 n.5 (1995); Pennbancorp, 69 Federal Reserve Bulletin 548 (1983).

(9.) Market share data are as of June 30, 1999, and have been adjusted to reflect acquisitions consummated since that time. Market share data are based on calculations in which the deposits of thrift institutions, including Bank and other savings banks, are included at 50 percent. The Board previously has indicated that thrift institutions have become, or have the potential to become, significant competitors of commercial banks. See Midwest Financial Group, 75 Federal Reserve Bulletin 386 (1989); National City Corporation, 70 Federal Reserve Bulletin 743 (1984). Because the deposits of the First Savings Bank of Moore County, Inc., would be acquired by a commercial banking organization, those deposits are included at 100 percent in the calculation of pro forma market share. See Norwest Corporation, 78 Federal Reserve Bulletin 452 (1992); First Banks, Inc., 76 Federal Reserve Bulletin 669 (1990).

(10.) First Bancorp has committed to execute, before consummating the acquisition of First Savings, a sales agreement for the proposed divestiture with an out-of-market purchaser. First Bancorp also has committed that if it is unsuccessful in completing the proposed divestiture within 180 days of acquiring First Savings, it will transfer the unsold branch to an independent trustee to sell the branch promptly to an alternative purchaser determined by the Board to be competitively suitable.

(11.) In this context, "rural county" means a county that is not included in a metropolitan statistical area.

ROBERT DEV. FRIERSON
Associate Secretary of the Board

Westamerica Bancorporation San Rafael, California

Order Approving the Acquisition of a Bank

Westamerica Bancorporation ("Westamerica"), a bank holding company within the meaning of the Bank Holding Company Act ("BHC Act"), has requested the Board's approval under section 3 of the BHC Act (12 U.S.C. [sections] 1842) to acquire all the common stock of First Counties Bank, Clearlake, California ("Bank").

Notice of the proposal, affording interested persons an opportunity to submit comments, has been published (65 Federal Register 30,410 (2000)). The time for filing comments has expired, and the Board has considered the proposal and all comments received in light of the factors set forth in section 3 of the BHC Act.

Westamerica, with total consolidated assets of $3.9 billion, is the 17th largest commercial banking organization in California, controlling deposits of $3.1 billion, representing less than 1 percent of total deposits in depository institutions in the state ("state deposits").(1) Bank, with total consolidated assets of $90.7 million, is the 255th largest banking organization in California, controlling deposits of $80 million, representing less than 1 percent of state deposits. On consumation of the proposal, Westamerica would remain the 17th largest banking organization in California, controlling deposits of $3.2 billion.

Competitive Considerations

Section 3 of the BHC Act prohibits the Board from approving a proposal that would result in a monopoly in any relevant banking market. That section also prohibits the Board from approving a proposal that may substantially lesson competition in any relevant banking market, unless the anticompetitive effects of the proposal are clearly outweighed in the public interest by the probable effect of the proposal in meeting the convenience and needs of the community to be served.(2)

Westamerica and Bank compete directly in two California banking markets, the Napa banking market and the Lake County banking market.(3) Consummation of the proposal would be consistent with the Department of Justice Merger Guidelines ("DOJ Guidelines")(4) and Board precedent in the Napa banking market. On consummation of the proposal, Westamerica would remain the second largest banking organization in the Napa banking market and control $220 million in deposits, representing 15.4 percent of total deposits in depository institutions in the market ("market deposits"). The HHI would increase 19 points to 1154.(5)

In the Lake County banking market, consummation of the proposal would increase the level of market concentration, as measured by the HHI, to levels that exceed the DOJ Guidelines. Westamerica is the largest of 10 banking organizations in the Lake County banking market and controls deposits of $79.3 million, representing approximately 17.4 percent of market deposits. Bank is the third largest banking organization in the market and controls deposits of $67.5 million, representing approximately 14.8 percent of market deposits. On consummation of the proposal Westamerica would control deposits of $146.9 million, representing approximately 32.2 percent of market deposits, and the HHI would increase 516 points to 1808.

As the Board has indicated in previous cases, in a market in which the competitive effects of a proposal exceed the DOJ Guidelines, the Board will consider whether other factors tend to mitigate the competitive effects of the proposal. The number and strength of factors necessary to mitigate the competitive effects of a proposal depend on the level of market concentration and size of the increase in market concentration.

In this case, several factors indicate that the likely effect of the proposal on competition in the Lake County banking market would not be significantly adverse. Nine depository institutions, including Westamerica, would operate in the market after consummation of the proposal. Although Westamerica would control approximately 32.2 percent of the market deposits, three other institutions, including one large multistate banking organization that is the largest depository organization in California measured by deposits, would each control over 12 percent of market deposits. In addition, three other depository institutions would each control between 5 and 10 percent of market deposits. The Lake County banking market also has characteristics that indicate that it is attractive for entry. The number of employees living in the market increased 18 percent from 1990 to 1999, a rate of increase substantially greater than that for the rest of California, where the number of employees grew less than 10 percent over the same period. Wells Fargo & Company, the second largest depository organization in California measured by deposits, entered the market de novo in 1995.

The Department of Justice has advised the Board that consummation of the proposal would not likely have any significant adverse competitive effects in the Lake County banking market or any other relevant banking market.

After carefully reviewing all the facts of record, and for the reasons discussed in this order, the Board concludes that consummation of the proposal is not likely to result in any significantly adverse effects on competition or on the concentration of banking resources in the Lake County banking market or any other relevant market. On this basis, the Board has determined that the competitive factors are consistent with approval of the proposal.

Other Considerations

The BHC Act requires the Board, in acting on an application, to consider the financial and managerial resources and future prospects of the companies and banks involved, the convenience and needs of the communities to be served, and certain supervisory factors. The Board has reviewed these factors in light of the record, including supervisory reports of examination assessing the financial and managerial resources of the organizations and financial information provided by Westamerica. Based on all the facts of record, the Board concludes that the financial and managerial resources and the future prospects of Westamerica, Bank, and Westamerica's subsidiary banks are consistent with approval, as are the other supervisory factors the Board must consider under the BHC Act. In addition, considerations related to the convenience and needs of the communities to be served, including the records of performance of the institutions involved under the Community Reinvestment Act (12 U.S.C. [sections] 2901 et seq.), are consistent with approval of the proposal.

Conclusion

Based on the foregoing, and in light of all the facts of record, the Board has determined that the application should be, and hereby is, approved. The Board's approval is specifically conditioned on compliance by Westamerica with all the commitments made in connection with the proposal. For the purpose of this action, the commitments and conditions relied on by the Board in reaching its decision are deemed to be conditions imposed in writing by the Board in connection with its findings and decision and, as such, may be enforced in proceedings under applicable law.

The acquisition of Bank shall not be consummated before the fifteenth calendar day following the effective date of this order, or later than three months after the effective date of this order, unless such period is extended for good cause by the Federal Reserve Bank of San Francisco, acting pursuant to delegated authority.

By order of the Board of Governors, effective August 2, 2000.

This action was taken pursuant to the Board's Rules Regarding Delegation of Authority (12 C.F.R. 265.4(b)(1)) by a committee of Board members. Voting for this action: Chairman Greenspan and Governors Kelley and Gramlich. Absent and not voting: Vice Chairman Ferguson and Governor Meyer.

(1.) In this context, depository institutions include commercial banks, savings banks, and savings associations. Asset data are as of December 31, 1999, and deposit and ranking data are as of June 30, 1999.

(2.) 12 U.S.C. [sections] 1842(c)(1).

(3.) The Napa banking market is defined as the Napa Ranally Metropolitan Area and the towns of St. Helena and Calistoga, and the Lake County banking market is defined as Lake County.

(4.) Under the revised Department of Justice Merger Guidelines, 49 Federal Register 26,823 (June 29, 1984), a market in which the post-merger Herfindahl-Hirschman Index ("HHI") is above 1800 points is considered to be highly concentrated. The Department of Justice has informed the Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anticompetitive effects) unless the post-merger HHI is at least 1800 and the merger increases the HHI by more than 200 points. The Department of Justice has stated that the higher than normal HHI thresholds for screening bank mergers for anticompetitive effects implicitly recognize the competitive effects of limited-purpose lenders and other nondepository financial entities.

(5.) Market share data are as of June 30, 1999, and are based on calculations in which the deposits of thrift institutions are included at 50 percent. The Board previously has indicated that thrift institutions have become, or have the potential to become, significant competitors of commercial banks. See WM Bancorp, 76 Federal Reserve Bulletin 788 (1990); National City Corporation, 70 Federal Reserve Bulletin 743 (1984). Thus, the Board has regularly included thrift deposits in the calculation of market share on a 50-percent weighted basis. See, e.g., First Hawaiian, Inc., 77 Federal Reserve Bulletin 52 (1991).

ROBERT DEV. FRIERSON
Associate Secretary of the Board