Decisions on Bank Applications
Bank of Washington
FEDERAL DEPOSIT INSURANCE CORPORATION
RE: Bank of Washington
Application for Consent to purchase certain assets and assume certain deposit liabilities, and to establish a branch
ORDER AND BASIS FOR CORPORATION APPROVAL
Pursuant to Section 18(c) and other provisions of the Federal Deposit Insurance Act ("Act"), Bank of Washington, Washington, Missouri, ("Applicant"), a state nonmember bank with total resources of $296,648,000 and total deposits of $214,927,000 as of September 30, 1999, has filed an application for the Corporation's consent to purchase furniture, fixtures, and equipment totaling $27,000 and assume deposits totaling $3,307,000 of the Gray Summit, Missouri branch of Meramec Valley Bank, Valley Park, Missouri (Other Bank). Bank of Washington has also applied to establish a branch at the Gray Summit, Missouri branch location to be closed by Other Bank. Notice of the proposed transaction, in a form approved by the Corporation, has been published pursuant to the Act.
Applicant's relevant market area generally consists of the northern half of Franklin County and the southern half of Warren County. The relevant market of Applicant's affiliate, United Bank of Union, Union, Missouri, is Franklin County. Deposits held by Applicant and its affiliated bank are combined for purposes of determining the effect of the proposed transaction on competition in the relevant market area. Other Bank's offices, exclusive of the Gray Summit, Missouri branch, are located in St. Louis County, which borders Franklin County on the northeast.
Applicant and its affiliate control 18.2 percent and 12.7 percent, respectively, of deposits in the relevant market area. Applicant and its affiliate will control a total of 31.2 percent of deposits in the market following consummation of the proposed transaction. This would result in an increase in the Herfindahl-Hirschman Index (HHI) of only 19 points, from 1,566 to 1,585. Offices of sixteen insured financial institutions operate in the relevant market, with three of those entities being affiliated with some of the State's largest banking organizations. Applicant will only be acquiring an additional 0.30 percent of the deposits in the relevant market and the proposal will not have a significantly adverse competitive impact.
In connection with the application, the Corporation has taken into consideration the financial and managerial resources and future prospects of the proponents and the resultant bank, the convenience and needs of the community to be served, and risk to the Bank Insurance Fund. Based on an assessment of the Applicant's CRA Statement and other available information that has been considered, no inconsistencies with the purposes of the Community Reinvestment Act appear to exist. Having found favorably on all statutory factors and having considered all relevant material, and having requested reports on the competitive factors from the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Director of the Office of Thrift Supervision, and the Attorney General, it is the Corporation's judgement that the application should be and hereby is approved, subject to the following conditions:
1. That the proposed transaction may not be consummated before the fifteenth calendar day after the date of this Order;
2. That if the proposed transaction has not been effected within six months from the date of this Order, or, unless in the meantime, a request for an extension of time has been approved by the Corporation, the consent granted shall expire at the end of said six-month period; and
3. That until the proposed transaction becomes effective, the Corporation shall have the right to alter, suspend, or withdraw its approval should any interim development be deemed to warrant such action.
By Order of the Associate Director of the Division of Supervision, acting pursuant to delegated authority for the Board of Directors of the Corporation.
Dated at Washington, D.C., this day of , 2000.
John M. Lane
Division of Supervision