Magazine article American Banker

Visit from Hawke Kept 'National' in Bank's Name

Magazine article American Banker

Visit from Hawke Kept 'National' in Bank's Name

Article excerpt


The chairman and chief executive officer of a $7.1 billion-asset bank in Tennessee said Thursday that his board was talked out of switching to a state charter by Comptroller of the Currency John D. Hawke Jr.

On Jan. 6, a few weeks after National Bank of Commerce filed to become a state-chartered bank, Mr. Hawke and his agency's chief counsel, Julie L. Williams, flew to Memphis to meet with some of the bank's directors and senior managers. The bank's board voted not to pursue the charter switch nearly two weeks later.

At the meeting, the two regulators offered to take National Bank of Commerce into the agency's large-bank supervision program, chairman and CEO William R. Reed Jr. said. That will give the institution an on-site regulator -- treatment usually reserved for only the three dozen largest national banks in the country. (National Bank of Commerce is the 72d-largest, ranked by asset size, according to Federal Deposit Insurance Corp. statistics.)

Mr. Reed said Mr. Hawke and Ms. Williams also persuaded the bankers that one of the institution's stated goals -- merging the multiple thrift charters owned by its holding company -- could best be accomplished under a national bank charter. Mr. Reed said that they pointed out specific provisions of the Gramm-Leach-Bliley Act of 1999 that made such consolidation more advantageous under a national charter.

"They made a very good case for the benefits of staying a national bank, especially under the new bill," said Mr. Reed. "It kind of enlightened us."

According to agency officials, the comptroller's offer of entry into the large-bank supervision program did not amount to special treatment for National Bank of Commerce.

"We didn't offer the bank any inducements at all," an agency spokesman said. "This is an extremely well-managed, high-performing bank, and all of us felt that we would benefit from a more continuous supervisory relationship. …

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