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Decisions on Bank Applications

Untitled Document

Legg Mason Trust Bank, FSB (Proposed New Federal Savings Bank)


IN RE: Legg Mason Trust Bank, FSB (Proposed New Federal Savings Bank) Baltimore, Maryland

Applications for Federal Deposit Insurance (Savings Association Insurance Fund) and for Consent to Merge


Pursuant to Sections 5 and 18(c) and other provisions of the Federal Deposit Insurance (FDI) Act, applications have been filed on behalf of Legg Mason Trust Bank, FSB ("LMB"), Baltimore, Maryland, a proposed new federal savings bank in organization, for deposit insurance with membership in the Savings Association Insurance Fund, and for consent to merge under its charter and title with Legg Mason Trust Company ("LMC"), Baltimore, Maryland, an uninsured trust company. Notice of the proposed transaction, in a form approved by the FDIC, has been published pursuant to the FDI Act.

The proposal is the result of Legg Mason, Inc.'s corporate reorganization whereby LMC would convert its charter from a state trust company to that of a federal savings bank through this merger with LMB. The proposed transaction would allow Legg Mason, Inc. to serve trust clients in a multi-state environment on a nationwide basis. It would not affect the structure of banking or the concentration of banking resources within the relevant market. Services offered in the market by LMB would not differ materially from those presently offered by LMC.

Since LMB's principal focus will remain trust services, it anticipates being designated a special purpose savings association" by the Office of Thrift Supervision. The Community Reinvestment Act ("CRA") is not applicable to special-purpose savings associations.

In connection with the applications, the FDIC has also taken into consideration the competitive effects of the proposed transaction; the financial and managerial resources and future prospects of the proponent institution and the resultant bank; and the convenience and needs of the community to be served. The examination of LMC by Maryland's Commissioner of Financial Regulations disclosed a generally satisfactory condition. Management is considered capable with extensive trust-related experience. Capital is adequate and expected to be well in excess of 10 percent throughout the first three-year period after receiving deposit insurance. Earnings prospects are favorable. Having found favorable, on the statutory factors and having considered all other relevant information, including any reports on the competitive factors furnished by 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 of the United States, it is the FDIC's judgment that the applications should be and hereby are approved, subject to the following conditions:

1. That beginning paid-in-capital funds of not less that $2,422,000 be provided;

2. That any changes in proposed management or proposed ownership (10 percent or more of stock), including new acquisitions of or subscriptions to 10 percent or more of stock, will render this commitment null and void unless such proposal is approved by the Regional Director of the FDIC's New York Regional Office ("Regional Director") prior to opening of the bank;

3. That federal deposit insurance shall not become effective unless and until the applicant has been established as a federal savings bank, that it has authority to conduct a banking business, and that its establishment and operation as a bank have been fully approved by appropriate Federal authorities;

4. That Legg Mason, Inc., Baltimore, Maryland, obtain approval from the Office of Thrift Supervision to establish a unitary thrift holding company and acquire voting stock control of the bank prior to its opening;

5. That the insured institution shall be engaged in the business of receiving deposits other than trust funds;

6. That the transaction shall not be consummated less than fifteen calendar days after the date of this Order or later than six months after the date of this Order, unless such period is extended for good cause by the FDIC;

7. That until the date that this conditional commitment for deposit insurance and for consent to merge becomes effective, the FDIC shall have the right to alter, suspend, or withdraw the said commitment should any interim development be deemed to warrant such action; and

8. That if federal deposit insurance has not become effective within twelve months from the date of this Order, or unless, in the meantime, a request for an extension of time has been approved by the FDIC, the consent granted herein shall expire at the end of the said twelve-month period.

By Order of the Associate Director of the Division of Supervision, acting pursuant to delegated authority for the Board of Directors of the FDIC.

Dated at Washington, D.C., this 22nd June 1999.

By: Mark S. Schmidt
Associate Director
Division of Supervision

June 22, 1999

Thomas J. Delaney, Esquire
Shaw. Pitman, Potts & Trowbridge
2300 N Street, N.W.
Washington, D.C. 20037

Subject: Legg Mason Trust Bank, FSB (Proposed) Baltimore, Maryland

Dear Mr. Delaney:

The applications for federal deposit insurance and for consent to merge with Legg Mason Trust Company, Baltimore, Maryland, were conditionally approved today, subject to the conditions stated in the enclosed copy of the Order and Basis for Corporation Approval ("Order") adopted by the Division of Supervision. As an insured federal savings bank, it will be a member of the Savings Association Insurance Fund.

Also enclosed is a form for the bank's use in certifying that its board of directors has adopted a resolution approving the action of the prospective incorporates in preparing and presenting the bank's application for federal deposit insurance. After incorporation has been duly effected and the bank is chartered to do business by the Office of Thrift Super-vision, the properly executed form must be transmitted to the Regional Director of the FDIC's New York Regional Office. The form must be accompanied by a copy of the bank's articles of incorporation or association and a copy of the bank's license or authorization to conduct a banking business, unless those documents have previously been submitted to the FDIC. If the bank's board cannot yet act in its corporate capacity to adopt the resolution prescribed; please furnish a statement signed by the majority of the persons who will act as directors of the new bank agreeing to adopt the resolution at such time as the board is legally organized.

Please furnish the New York Regional Office satisfactory evidence of the institution's compliance with, or definite and certain arrangements to comply with, the conditions stated in the enclosed Order. The Regional Office will furnish that information to the Office of the Executive Secretary. which will inform you of the effective date of Federal deposit insurance. If an extension of the time limitation prescribed in the order is required, a letter of application requesting a specified extension should be submitted to the Regional Office.


Mark S. Schmidt
Associate Director


cc: Board of Directors
Legg Mason Trust Company
100 Light Street
Baltimore, MD 21202