For immediate release

The Federal Reserve Board announced today its approval of the application by G.B. Financial Services, Inc., Greenbush, to merge with Border Bancshares, Inc., Greenbush, and thereby acquire Border State Bank, Roseau, all in Minnesota. Attached is the Board's Order relating to this action.

G.B. Financial Services, Inc. Greenbush, Minnesota Order Approving the Merger of Bank Holding Companies

G.B. Financial Services, Inc., Greenbush ("G.B. Financial"), 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 merge with Border Bancshares, Inc., Greenbush ("Border Bancshares"), and thereby acquire Border State Bank, Roseau ("Border Bank"), all in Minnesota.1 Notice of the proposal, affording interested persons an opportunity to submit comments, has been published (62 Federal Register 2368 (1997)). The time for filing comments has expired, and the Board has considered the application and all comments received in light of the factors set forth in section�3 of the BHC Act. G.B. Financial, with total consolidated assets of $38.2�million, operates one subsidiary bank, Border State Bank of Greenbush, Greenbush, Minnesota ("Greenbush Bank").2 G.B. Financial is the 204th largest commercial banking organization in Minnesota, controlling deposits of approximately $30.2�million, representing less than 1�percent of total deposits in commercial banks in the state.3 Border Bancshares is the 238th largest depository institution in Minnesota, controlling deposits of approximately $26.7�million, representing less than 1�percent of total deposits in commercial banking organizations in the state. On consummation of this proposal, G.B.�Financial would become the 112th largest commercial banking organization in Minnesota, controlling approximately $56.9�million in deposits, representing less than 1�percent of total deposits in commercial banking organizations in the state. G.B. Financial and Border Bancshares compete directly in the Roseau, Minnesota, banking market ("Roseau banking market").4 Greenbush Bank is the third largest of four commercial banks in the Roseau banking market, controlling deposits of $30.2�million, representing 15.3 percent of total deposits in commercial banking organizations in the market ("market deposits").5 Border Bank is the fourth largest bank in the market, controlling deposits of $26.7�million, representing 13.5�percent of market deposits. On consummation, Greenbush Bank and Border Bank would control total deposits of $56.9�million, representing 28.8�percent of market deposits. The market, as measured by the Herfindahl-Hirshman Index ("HHI"), is and would remain highly concentrated.6 In accordance with the BHC Act, the Board sought comments from the Department of Justice on the competitive effects of the proposal in the relevant banking market. The Department of Justice has advised the Board that consummation of the proposal would not likely have any significantly adverse effects on competition in the Roseau banking market or any relevant banking market. The FDIC also has not objected to the proposal. G.B. Financial and Border Bancshares have a long history of affiliation through individual shareholders, and are under the control of the same individual shareholders.7 Based on all the facts of record, including the history of affiliation and the System's prior reviews, and the financial support provided by the common shareholders to the banks involved, the Board does not believe that the proposal is likely to have a significantly adverse effect on competition or on the concentration of banking resources in the Roseau banking market, or any other relevant banking market. The BHC Act also requires the Board to consider the financial and managerial resources and future prospects of the companies and banks involved, the convenience and needs of the community to be served, and certain other supervisory factors. The Board has carefully reviewed the factors in light of all the facts of record, including relevant supervisory reports of examination. The Board concludes that the financial and managerial resources and future prospects of the institutions involved in this proposal, and considerations relating to the convenience and needs of the communities to be served, are consistent with approval, as are the other supervisory factors the Board must consider under section 3 of the BHC Act. 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 of the proposal is conditioned on compliance by G.B.�Financial with the commitments made in connection with this application. The commitments and conditions relied on by the Board in reaching this decision shall be 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 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 Board or the Federal Reserve Bank of Minneapolis, acting pursuant to delegated authority.

By order of the Board of Governors,8 effective April 21, 1997. (signed) Jennifer J. Johnson Jennifer J. Johnson Deputy Secretary of the Board

Footnotes 1 After the merger, G.B. Financial will change its name to Border Bancshares, Inc. 2 Asset data are as of December 31, 1996. 3 State deposit data are as of June 30, 1996. 4 The Roseau banking market is approximated by Roseau County, Minnesota. No savings associations operate in the market. 5 Market data are as of June 30, 1996. 6 The HHI would increase by 414 points to 3769. Under the revised Department of Justice Merger Guidelines, 49 Federal Register 26,823 (1984), a market in which the post-merger HHI is above 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 Justice Department 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 non-depository institutions. 7 Common shareholders own a substantial majority in each organization -- 77.4�percent of G.B. Financial and 97.3�percent of Border Bancshares -- and both organizations have had identical boards of directors since 1993. The directors comprise most of the common shareholders and own approximately 70�percent of G.B. Financial and approximately 93 percent of Border Bancshares. 8 Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and Governors Kelley, Phillips, and Meyer.

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1997 Orders on banking applications