Orders Issued Under Sections 3 and 4 of the Bank Holding Company Act

Federal Reserve Bulletin, Nov, 1999

A number of factors indicate that the competitive effects of the proposal are not likely to be significantly adverse in this market. After consummation of the proposal, ten depository institutions would continue to operate in the market. One depository institution would control a larger percentage of market deposits than Firstar and five of the ten depository institutions in the market would each control more than 10 percent of market deposits.

The Department of Justice has reviewed the proposal, including its effect on competition in the Clinton banking market, and advised the Board that consummation of the proposal would not likely have a significantly adverse effect on competition in any relevant banking market. The Office of the Comptroller of the Currency ("OCC") and the Federal Deposit Insurance Corporation ("FDIC") 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, the Board concludes that consummation of the proposal would not result in any significantly adverse effects on competition or on the concentration of banking resources in the markets in which Firstar and Mercantile now compete or any other relevant market.

Convenience and Needs Factor

In acting on a proposal under section 3 of the BHC Act, the Board is required to consider the effect of the proposal on the convenience and needs of the communities to be served. The Board has carefully considered the effect of the proposal on the convenience and needs of the communities to be served in light of all the facts of record, including comments on the proposal submitted by the Wisconsin Rural Development Center, Inc., Ettrick, Wisconsin, and ICP ("Commenters"). Commenters opposed the merger proposal, alleging that Firstar has an inadequate record of meeting the banking and credit needs of the communities it serves, particularly in areas with predominantly low- and moderate-income ("LMI") and minority populations. Commenters also expressed concern about Firstar's record of lending on the basis of data submitted under the Home Mortgage Disclosure Act (12 U.S.C. [sections] 2801 et seq.) ("HMDA"). One Commenter also expressed concern about Firstar's record of lending and providing services to rural and LMI communities in Wisconsin and its record of participation in state and federally guaranteed loan programs designed to assist LMI individuals, small businesses, and owners of small farms.

A. CRA Performance Examinations

The Board has long held that consideration of the convenience and needs factor includes a review of the records of the relevant depository institutions under the Community Reinvestment Act (12 U.S.C. [sections] 2901 et seq.) ("CRA"). As provided in the CRA, the Board has evaluated this factor in light of examinations of the CRA performance records of the relevant institutions by the appropriate federal financial supervisory agency.(22)

All of Firstar's subsidiary banks received "outstanding" or "satisfactory" ratings in the most recent examinations of their CRA performance. Firstar's lead subsidiary bank, Firstar Ohio, received an "outstanding" rating in its most recent CRA performance evaluation by the OCC, as of December 1996.(23) Firstar's largest subsidiary bank in Wisconsin, Firstar Bank Milwaukee, National Association, Milwaukee, Wisconsin ("Firstar Milwaukee"), received a "satisfactory" rating in its most recent CRA performance evaluation by the OCC, as of November 1997.(24) The subsidiary banks of Mercantile also received "outstanding" or "satisfactory" ratings in the most recent examinations of their CRA performance.(25)