For immediate release

The Federal Reserve Board today announced its approval of the application and notice by Mercantile Bancorporation Inc., St. Louis, to acquire Roosevelt Financial Group, Inc., Chesterfield, and thereby acquire Missouri State Bank and Trust Company, St. Louis, and Roosevelt Bank, a federal savings bank, Chesterfield, all in Missouri. Attached is the Board's Order relating to this action.

Mercantile Bancorporation Inc. St. Louis, Missouri Ameribanc, Inc. St. Louis, Missouri Order Approving the Acquisition of a Savings Association

Mercantile Bancorporation Inc., and its subsidiary Ameribanc, Inc., both of St. Louis, Missouri (collectively "Mercantile"), bank holding companies within the meaning of the Bank Holding Company Act ("BHC Act"), have requested the Board's approval under section 4(c)(8) of the BHC Act (12 U.S.C. § 1843(c)(8)) to acquire Roosevelt Financial Group, Inc. ("Roosevelt"),1 and thereby acquire Roosevelt's wholly owned savings association subsidiary, Roosevelt Bank, a federal savings bank ("Roosevelt FSB"), both of Chesterfield, Missouri.2 Notice of the proposal, affording interested persons an opportunity to submit comments, has been published (62 Federal Register 11,454 and 17,828 (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 4 of the BHC Act. Mercantile is the second largest depository institution in Missouri, controlling deposits of $10.5 billion, representing approximately 14.4 percent of the total deposits in depository institutions in the state.3 Roosevelt, with total consolidated assets of $7.8 billion, controls one bank and one thrift in Missouri. On consummation of the proposal and all proposed divestitures, totalling $268.4 million, Mercantile would become the largest depository institution in Missouri, controlling approximately 21.5 percent of total deposits in depository institutions in that state.4 The Board previously has determined by regulation that operating a savings association is closely related to banking for purposes of section 4(c)(8) of the BHC Act.5 The Board requires savings associations acquired by bank holding companies to conform their direct and indirect activities to those permissible for bank holding companies under section 4 of the BHC Act and Regulation Y. Mercantile has committed that it will conduct this activity in accordance with the Board's regulations.6 Competitive Considerations In order to approve the proposal, the Board also must determine that the performance of the proposed activities are a proper incident to banking, that is, that the proposed transaction "can reasonably be expected to produce benefits to the public . . . that outweigh possible adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices." As part of the Board's evaluation of these factors, the Board has carefully considered the competitive effects of the proposed transaction in light of all the facts of record. Mercantile and Roosevelt compete directly in 19 banking markets in Missouri. The Board has carefully reviewed the competitive effects of the proposal in these banking markets in light of all the facts of record, including the number of competitors that would remain in the markets, the characteristics of the markets, the projected increase in the concentration of total deposits in depository institutions in the markets ("market deposits"),7 as measured by the Herfindahl-Hirschman Index ("HHI") under the Department of Justice Merger Guidelines ("DOJ Guidelines"),8 and commitments made by Mercantile to divest certain branches.9 Consummation of the proposal would be consistent with the DOJ Guidelines in 12 banking markets without divestitures,10 and in five banking markets with divestitures.11 Consummation of the proposal in the two remaining banking markets -- Pettis County and Phelps County12 -- would exceed the DOJ Guidelines. The HHI would increase 223 points to 2522 in the Pettis County banking market, and 204 points to 2234 in the Phelps County banking market. The Board previously has indicated that HHI levels are guidelines that are used by the Board, the Department of Justice, and other banking agencies to help identify cases in which a more detailed competitive analysis is appropriate to assure that the proposal would not have a significantly adverse effect on competition in any relevant market. A proposal that fails to pass the HHI market screen may, nonetheless, be approved because other information may indicate that the proposal would not have a significantly adverse effect on competition. Several factors mitigate the increases in concentration, as measured by the HHI, in the Pettis and Phelps County banking markets. After consummation of the proposal, six competitors, including a large bank holding company competitor with a substantial share of market deposits, would remain in each market and Mercantile would control less than 30 percent of the market deposits in each market as a result of the proposal.13 In addition, the proposed transaction would not reduce the number of competitors in the Pettis County banking market because Mercantile would divest a branch office to an out-of-market competitor. The Board also has considered certain aspects of the Pettis and Phelps County banking markets that indicate that the markets are attractive for entry to potential competitors. In both Pettis and Phelps Counties, for example, the population has increased at a higher rate than in other non-MSA counties in Missouri, and per capita income, deposits per banking office, and increases in total deposits are all greater in both counties than the same statistics are for other non-MSA counties in Missouri. In addition, population per banking office in Phelps County is larger than for other non-MSA counties in Missouri, and entry into the Phelps County banking market occurred as recently as 1995. The Board sought comments from the United States Attorney General ("Attorney General"), the Office of the Comptroller of the Currency ("OCC"), and the FDIC on the competitive effects of this proposal. The Attorney General has stated that in light of the proposed divestitures, the transaction is not likely to have significantly adverse competitive effects in any relevant banking market. The OCC and the FDIC also have not objected to consummation of the proposal. Based on all the facts of record, including the proposed divestitures, the Board concludes that consummation of the proposal would not have a significantly adverse effect on competition or on the concentration of banking resources in the Pettis and Phelps Counties banking markets or in any relevant banking market.14 Other Considerations As part of its evaluation of the public interest factors, the Board has carefully considered the financial and managerial resources of Mercantile, Roosevelt, and their subsidiaries, and the effect the transaction would have on such resources in light of all the facts of record. These facts of record include supervisory reports of examination assessing the financial and managerial resources of the organizations and recent pro forma financial information provided by Mercantile. The Board notes that Mercantile and Roosevelt, and each of their insured depository institutions, meet or exceed the "well capitalized" thresholds under applicable law, and Mercantile is expected to continue to do so after consummation of the proposal. Based on all the facts of record, the Board has concluded that the financial and managerial resources of the organizations involved in the proposal are consistent with approval. A. Record of Performance Under the Community Reinvestment Act In acting on applications to acquire a savings association, the Board reviews the records of performance of the depository institutions involved under the Community Reinvestment Act (12 U.S.C. § 2901 et seq.) ("CRA"). As provided in the CRA, the Board evaluates these records in light of examinations by the primary federal supervisor of the CRA performance of the relevant institutions. An institution's most recent CRA performance evaluation is a particularly important consideration in the applications process because it represents a detailed, on-site evaluation of the institution's overall record of performance under the CRA by its primary federal supervisor.15 The Board also considers information on an institution's lending and other activities that assist in meeting the credit needs of low- and moderate-income ("LMI") neighborhoods and an institution's policies and practices for compliance with applicable fair lending laws. The Board has carefully considered the records of performance by the insured depository institution subsidiaries of Mercantile and Roosevelt, including their CRA performance examinations and comments that focused on the CRA performance record of Mercantile's lead bank, Mercantile Bank of St. Louis, National Association, St. Louis, Missouri ("Mercantile St. Louis").16 CRA Performance Examinations Mercantile St. Louis, which represents approximately 34.3 percent of Mercantile's total assets, received an "outstanding" rating from its primary federal supervisor, the OCC, in its most recent CRA performance examination, as of May 5, 1995 ("Mercantile St. Louis CRA examination"). The Board also considered updated supervisory information from the OCC regarding the bank's CRA performance. All of Mercantile's remaining insured depository institution subsidiaries that have been examined for CRA performance received satisfactory or better ratings from their primary federal supervisor at their most recent examinations for CRA performance.17 Roosevelt's two insured depository institution subsidiaries received "satisfactory" ratings from their primary federal supervisors, the FDIC (Missouri State Bank) and the Office of Thrift Supervision (Roosevelt FSB), in the most recent examinations of their CRA performance. Mercantile's Lending Record Mercantile offers various lending programs designed to enhance its lending to minorities and to residents of LMI communities through each of its depository institution subsidiaries. Mercantile St. Louis, for example, offers several flexible home lending programs through its Community Partnership Program ("CPP mortgage program") that focus on LMI borrowers. The Mercantile St. Louis CRA examination noted that the CPP mortgage program featured lower down payments, closing cost grants, various fixed and adjustable-rate mortgages, and higher qualifying debt ratios than were available for conventional home loan products. In addition, examiners noted that Mercantile made several changes to the CPP mortgage program, such as increasing the debt-to-income ratio guidelines for home improvement loans, in order to increase the number of loans to LMI borrowers. Mercantile St. Louis made 115 loans, totalling approximately $5 million, through the CPP program in 1996. Mercantile also assists in meeting the affordable housing needs of LMI residents throughout its delineated community with a variety of community development programs with government agencies, non-profit organizations, and private developers. These programs include the Federal Home Loan Bank Affordable Housing Programs. The programs provide down payment and closing cost assistance through the Federal Home Loan Bank and the City of St. Louis. The Mercantile St. Louis CRA examination found that Mercantile St. Louis was one of the largest lenders for several of the programs.18 In addition, examiners noted that Mercantile St. Louis began to offer mortgage loans through programs offered by the Federal Housing Administration ("FHA") and the Department of Veterans Affairs in 1994. Mercantile intends to enhance Roosevelt's community development efforts by carefully considering whether additional products or services would be required to better serve the communities and customers served by Roosevelt. Mercantile also has designed special products to meet the housing needs of LMI residents. For example, the bank's CRA examination noted that Mercantile supported the St. Louis Equity Fund, which is a real estate investment partnership that focuses on the development and redevelopment of affordable rental housing for low-income families. Mercantile St. Louis and a subsidiary bank recently acquired by Mercantile have invested approximately $1.8 million in the fund. Mercantile St. Louis also participates with various charitable and non-profit organizations in the Home Ownership Purchase Services program. This program is designed to assist individuals in obtaining a mortgage, including individuals with a history of credit problems. Examiners concluded in the Mercantile St. Louis CRA examination that the bank actively solicited applications from all segments of its community, including LMI areas. In addition, examiners found that the geographic distribution of loans required to be reported under the Home Mortgage Disclosure Act (12 U.S.C. 2801 et seq.)("HMDA") for Mercantile subsidiary banks in general represented a reasonable penetration of their respective delineated communities. Ascertainment and Outreach Efforts Mercantile uses various methods to ascertain community credit needs, including direct contacts with public officials, neighborhood organizations, and community groups involved in affordable housing, small business, economic and community development, and minority affairs. The Mercantile St. Louis CRA examination found that the bank's board of directors and management established useful contacts with a number of groups and organizations that enabled the bank to assess the community's credit needs. Management was also found to have identified and as noted, responded to several credit-related needs for LMI residents in its community, including home purchase and home improvement loans with lower down payments and higher qualifying ratios than conventional loan products. The Mercantile St. Louis CRA examination concluded that the bank offered a full range of credit products that were well-suited to meeting the community's identified credit needs, including modifying or creating products that focused on the needs of LMI individuals. In addition, examiners found that Mercantile marketed its products and services to reach all segments of its community by using advertising that was widely circulated in the local media, including advertising that focused on residents in LMI and predominately minority communities. Branch Locations The Mercantile St. Louis CRA examination stated that the bank's office locations and services reasonably served all segments of the delineated community, including LMI areas. Examiners also found that when closing branches, management used adequate branch closing policies. Examiners noted that, when deciding to close a branch, Mercantile considered the proximity of potential branches to be closed to other Mercantile branches, and the location of competitors. Comments on the Proposal Commenter maintains that HMDA data from 1993 to 1996 indicate a growing disparity in the volume and rates of HMDA-reported loans originated to minority loan applicants and LMI neighborhoods as compared to rates of loan originations to nonminority loan applicants and high income neighborhoods.19 In addition, Commenter contends that the ascertainment efforts of, and branch locations for, Mercantile St. Louis do not adequately meet the credit and banking needs of residents in LMI and predominately minority communities.20 The 1996 HMDA data generally indicate that Mercantile improved its record of home mortgage lending in LMI census tracts and its record of home mortgage loans to African-American applicants for loans. These data indicate an increase in the percentage of loans originated to African Americans compared to all loan applications. These data also indicate a narrowing of the disparity between the denial rates to African Americans compared to the denial rates to nonminority applicants. The data reflect, however, some disparities at Mercantile St. Louis in the rate of loan origination, denials, and applications by racial group or income level. The Board is concerned when the record of an institution indicates disparities in lending to minority applicants, and it believes that all banks are obligated to ensure that their lending practices are based on criteria that assure not only safe and sound lending, but also equal access to credit by creditworthy applicants regardless of race. The Board recognizes, however, that HMDA data alone provide an incomplete measure of an institution's lending in its community. The Board also recognizes that HMDA data have limitations that make the data an inadequate basis, absent other information, for concluding that an institution has engaged in illegal discrimination in making lending decisions. In light of the limitations of HMDA data, the Board has carefully reviewed the record of Mercantile's lending to minorities, particularly African Americans, and to LMI residents in light of information from the OCC, the primary federal supervisor of Mercantile St. Louis, that includes the bank's CRA examination and other confidential supervisory information. The Mercantile St. Louis CRA examination found no evidence of practices intended to discourage individuals from applying for credit.21 In addition, examiners found no evidence of disparate treatment on a prohibited basis, and concluded that the bank was in substantial compliance with antidiscrimination laws and regulations.22 Mercantile St. Louis also has a second review process prior to denial for loan applications subject to HMDA reporting requirements. The process is designed to ensure that all applicants, including minority applicants, receive equal consideration in credit decisions. Auditors review rejected minority and accepted nonminority applications to determine if applicants are being treated differently because of their race. Moreover, Mercantile has adopted a fair lending policy and Mercantile St. Louis's mortgage lending division regularly conducts fair lending classes and testing for its staff. Based on all the facts of record, and for the reasons discussed in the order, the Board concludes that the record of Mercantile St. Louis under the CRA in the areas of lending, fair lending law compliance, ascertainment and branch locations is consistent with approval of the proposal.23 B. Conclusion Regarding CRA Considerations In light of all the facts of record, including information provided by Commenter, Mercantile's responses, and the relevant reports of examination and other confidential supervisory information provided by the OCC, the Board concludes that considerations relating to the CRA performance records of Mercantile and Roosevelt24 are consistent with approval.25 Public Benefits The record also indicates that consummation of the proposal would result in public benefits. The proposal would result in a broader financial network through which Mercantile may serve its customers, and in Roosevelt's customers having access to the increased services offered at Mercantile's subsidiary banks. Additionally, there are public benefits to be derived from permitting capital markets to operate so that bank holding companies may make potentially profitable investments in nonbanking companies when those investments are consistent, as in this case, with the relevant considerations under the BHC Act, and from permitting banking organizations to allocate their resources in the manner they believe is most efficient. Based on all the facts or record, the Board has determined that the Mercantile proposal can reasonably be expected to produce public benefits that outweigh possible adverse effects under the proper incident to banking standard of section 4(c)(8) of the BHC Act. Accordingly, the Board has determined that the balance of public interest factors it must consider under section 4(c)(8) of the BHC Act is favorable and consistent with approval. Conclusion Based on the foregoing, and all the facts of record, the Board has determined that the notice should be, and hereby is, approved. The Board's approval is specifically conditioned on compliance by Mercantile with all the commitments made in connection with this application, including the divestiture commitments discussed in the order.26 For the purpose of this action, the commitments and conditions relied on by the Board in reaching its decision are 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 of Missouri State Bank shall not be consummated before the fifteenth calendar day following the effective date of this order, and the proposal shall not be consummated later than three months after the effective date of this order, unless such period is extended for good cause by the Board, or by the Federal Reserve Bank of St. Louis, acting pursuant to delegated authority.

By order of the Board of Governors,27 effective June 4, 1997. (signed) Jennifer J. Johnson Jennifer J. Johnson Deputy Secretary of the Board

Appendix A Missouri banking markets in which consummation of the proposal would be consistent with the DOJ Guidelines without divestitures: (1) Boone County: Approximated by Boone County, Missouri. After consummation of the proposal, Mercantile would control 11.5 percent of the market deposits and would become the fourth largest depository institution in the market. The HHI would not increase as a result of this proposal. (2) Cape Girardeau: Approximated by Cape Girardeau County plus Kelso township in Scott County, all in Missouri. After consummation of the proposal, Mercantile would control 21.9 percent of the market deposits and would remain the third largest depository institution in the market. The HHI would increase 81 points to 2353. (3) Clinton: Approximated by Henry County, plus St. Clair County, except the area around the town of Appleton City, all in Missouri. After consummation of the proposal, Mercantile would control 21.2 percent of the market deposits and would become the second largest depository institution in the market. The HHI would increase 88 points to 1801. (4) Dexter: Approximated by Stoddard County, less the community of Bernie, all in Missouri. After consummation of the proposal, Mercantile would control 26.6 percent of the market deposits and would become the second largest depository institution in the market. The HHI would increase 193 points to 2454. (5) Joplin: Approximated by Jasper and Newton Counties, Missouri, plus the communities of Galena and Baxter Springs in Cherokee County, Kansas. After consummation of the proposal, Mercantile would control 31.3 percent of the market deposits and would remain the largest depository institution in the market. The HHI would increase 315 points to 1545. (6) Kansas City: Approximated by the Kansas City Ranally Metro Area. After consummation of the proposal, Mercantile would control 14.9 percent of the market deposits and would become the second largest depository institution in the market. The HHI would increase 57 points to 972. (7) Nodaway County: Approximated by Nodaway County, Missouri. After consummation of the proposal, Mercantile would control 9.3 percent of the market deposits and would remain the fourth largest depository institution in the market. The HHI would not increase as a result of the proposal. (8) Poplar Bluff: Approximated by Butler County, Missouri. After consummation of the proposal, Mercantile would control 27.1 percent of the market deposits and would become the largest depository institution in the market. The HHI would increase 174 points to 1906. (9) Sikeston: Approximated by Mississippi County, Scott County, excluding Kelso township, plus New Madrid County, excluding Como and Anderson townships and the western half of Portage township, all in Missouri. After consummation of the proposal, Mercantile would control 25.7 percent of the market deposits and would become the largest depository institution in the market. The HHI would increase 206 points to 1740. (10) Springfield: Approximated by Greene and Christian Counties, plus the area around the community of Rogersville in Webster County, all in Missouri. After consummation of the proposal, Mercantile would control 21.5 percent of the market deposits and would become the largest depository institution in the market. The HHI would increase 178 points to 1372. (11) St. Joseph: Approximated by the St. Joseph Ranally Metro Area. After consummation of the proposal, Mercantile would control 25.6 percent of the market deposits and would become the largest depository institution in the market. The HHI would increase 97 points to 1523. (12) St. Louis: Approximated by the city of St. Louis, Missouri; St. Louis, St. Charles and Jefferson Counties, Missouri; plus Calvey and Boles townships in Franklin County, Missouri; Madison, St. Clair and Monroe Counties, Illinois; plus Sugar Creek and Looking Glass townships in Clinton County, Illinois. After consummation of the proposal, Mercantile would control 31.3 percent of the market deposits and would become the largest depository institution in the market. The HHI would increase 358 points to 1666.

Appendix B Missouri banking markets in which consummation of the proposal would be consistent with the DOJ Guidelines with divestitures: (1) Barton County: Approximated by Barton County, Missouri. After consummation of the proposal, Mercantile would control 18.1 percent of the market deposits and would remain the third largest depository institution in the market. The HHI would not increase as a result of the proposal. (2) Grundy County: Approximated by Grundy County, Missouri. After consummation of the proposal, Mercantile would control 31.1 percent of the market deposits and would remain the second largest depository institution in the market. The HHI would not increase as a result of the proposal. (3) Vernon County: Approximated by Vernon County, Missouri. After consummation of the proposal, Mercantile would control 45.2 percent of the market deposits and would become the largest depository institution in the market. The HHI would not increase as a result of the proposal. (4) Warrenton: Approximated by Warren County, Missouri, except the area surrounding the community of Dutzow. After consummation of the proposal, Mercantile would control 6.7 percent of the market deposits and would remain the fifth largest depository institution in the market. The HHI would not increase as a result of the proposal. (5) Washington: Approximated by Franklin County, Missouri, except for Boles and Calvey townships and the area around Burger in Boeuf township, plus the community of Dutzow in Warren County, Missouri. After consummation of the proposal, Mercantile would control 25.9 percent of the market deposits and would become the second largest depository institution in the market. The HHI would increase 91 points to 2232.

Footnotes 1 Roosevelt has granted Mercantile an option to purchase up to 19.9 percent of the outstanding common stock of Roosevelt under certain conditions. The option would terminate on consummation of the proposal. 2 Mercantile also has requested the Board's approval under section 3 of the BHC Act (12 U.S.C. § 1842) to acquire Roosevelt's subsidiary bank, Missouri State Bank and Trust Company, St. Louis, Missouri ("Missouri State Bank"). Mercantile has committed to divest Missouri State Bank simultaneously with the acquisition of Roosevelt and Roosevelt FSB. Based on the foregoing and all the facts of record, the Board has determined that the proposal is consistent with approval under the factors required to be considered under section 3 of the BHC Act and that the application should be, and hereby is, approved. 3 State and market data are as of June 30, 1996. In this context, depository institutions include commercial banks, savings banks, and savings associations. 4 Missouri law prohibits a bank holding company from obtaining control of any bank if the total deposits in the bank together with the total deposits in all banks in Missouri controlled by the bank holding company exceed 13 percent of the total deposits in all financial institutions in Missouri. The Division of Finance of the Missouri Department of Economic Development has determined that the state deposit cap would not apply in this case because Mercantile has committed to divest Missouri State Bank simultaneously with consummating the proposal and would therefore not acquire a Missouri state bank within the meaning of state law. See Mo. Ann. Stat. § 362.915 (West 1997). 5 12 C.F.R. 225.28(b)(4)(ii). 6 Mercantile intends to merge Roosevelt FSB with and into Mercantile's subsidiary state non-member bank, Mercantile Bank of Plattsburg, Plattsburg, Missouri. The merger is subject to the approval of Federal Deposit Insurance Corporation ("FDIC") under section 18(c) of the Federal Deposit Insurance Act (12 U.S.C. § 1828(c)). 7 Market share data before consummation are based on calculations in which the deposits of thrift institutions are included at 50 percent. The Board previously has indicated that thrift institutions have become, or have the potential to become, significant competitors of commercial banks. See WM Bancorp, 76 Federal Reserve Bulletin 743 (1984). Because the deposits of Roosevelt FSB would be controlled by a commercial banking organization after consummation of the proposal, those deposits are included at 100 percent in the calculation of Mercantile's pro forma market share. See Norwest Corporation, 78 Federal Reserve Bulletin 452 (1992); First Bank, Inc., 76 Federal Reserve Bulletin 669, 670 n. 9 (1990). 8 Under the revised DOJ Guidelines, 49 Federal Register 26,823 (June 29, 1984), a market in which the post-merger HHI is less than 1000 is considered unconcentrated, and a market in which the post-merger HHI is between 1000 and 1800 is considered moderately concentrated. The Justice Department 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 effect of limited-purpose lenders and other non-depository financial institutions. 9 In each market in which Mercantile has committed to divest offices to mitigate the anticompetitive effects of the proposal, Mercantile has committed to execute sales agreements with a competitively suitable purchaser prior to consummation of the acquisition of Roosevelt and to complete the divestitures within 180 days of consummation of the acquisition. Mercantile also has committed that, in the event it is unsuccessful in completing any divestiture within 180 days of consummation of the proposal, Mercantile will transfer the unsold branch(es) to an independent trustee that is acceptable to the Board and that will be instructed to sell the branches promptly. BankAmerica Corporation, 78 Federal Reserve Bulletin 338 (1992); United New Mexico Financial Corporation, 77 Federal Reserve Bulletin 484 (1991). Mercantile has further committed to submit to the Board, prior to consummation, an executed trust agreement acceptable to the Board stating the terms of these divestitures. 10 These banking markets are discussed in Appendix A. 11 These banking markets are discussed in Appendix B. 12 The Pettis and Phelps County banking markets are approximated by Pettis County and Phelps County, respectively, both in Missouri. 13 Mercantile's pro forma share of market deposits is adjusted to account for its proposed divestiture in the Pettis County banking market. 14 A commenter maintains that the proposal would increase market concentration and adversely affect competition for loans in the St. Louis, Missouri, banking market ("St. Louis banking market"). As noted in Appendix A, consummation of the proposal in the St. Louis banking market would not exceed the DOJ Guidelines and the market would remain moderately concentrated after Mercantile's acquisition of Roosevelt. In addition, numerous competitors would remain in the market. The comments also rely on dividing the relevant product market in a manner that is inconsistent with the Board's precedent. The Board traditionally has recognized that the appropriate product market for evaluating the competitive effects of mergers and acquisitions of depository institutions is the cluster of products (various kinds of credit) and services (such as checking accounts and trust administration) offered by such institutions. See Chemical Banking Corporation, 82 Federal Reserve Bulletin 239 (1997); First Hawaiian, Inc., 79 Federal Reserve Bulletin 966 (1993), and discussions of relevant case law and economic studies therein. Commenter presents no facts to support an alternative product market that would consider only lending. Based on all the facts of record, the Board concludes that competitive considerations in the St. Louis banking market are consistent with approval for the reasons discussed above. The effects of the proposal in helping to meet the credit needs of the community are discussed later in the order. 15 The Statement of the Federal Financial Supervisory Agencies Regarding the Community Reinvestment Act provides that a CRA examination is an important and often controlling factor in the consideration of an institution's CRA record and that reports of these examinations will be given great weight in the applications process. See 54 Federal Register 13,742 and 13,745 (1989). 16 Comments on the proposal were received from the Association of Community Organizations for Reform Now and the Missouri Association of Community Organizations for Reform Now (collectively, "Commenter"). 17 Eighteen of Mercantile's remaining insured depository institutions received "outstanding" ratings, and 12 received "satisfactory" ratings, at their most recent examinations for CRA performance. 18 The Mercantile St. Louis CRA performance examination also noted that the bank participated in the Missouri Housing Development Commission's Home Improvement Loan Program, which provided state-subsidized, below-market interest rates for terms of up to ten years to LMI borrowers. 19 Commenter states that communication between Roosevelt and Commenter has been adversely affected by the proposal. The Board has indicated in previous orders and in the Agency CRA Statement that communication by depository institutions with community groups provides a valuable method of assessing and determining how best to address the credit needs of the community. However, both the CRA and the Agency CRA Statement require the Board's review to focus on the established record of performance of the institutions involved and the programs and policies that the institutions have in place to assist in meeting the credit needs of their entire communities. See Fifth Third Bancorp, 80 Federal Reserve Bulletin 838 (1994). In this case, the facts discussed above and the other facts of record indicate that the relevant institutions have programs to help serve the credit needs of their communities. 20 Commenter also maintains that the fees charged by Mercantile St. Louis are excessive. As discussed above, Mercantile St. Louis provides a full range of credit products and banking services that assist in meeting the credit and banking needs of LMI individuals. In addition, there is no evidence in the record that the fees charged by Mercantile St. Louis are based on any factor that would be prohibited under law. Although the Board has recognized that banks help serve the banking needs of their communities by making basic services available at nominal or no charge, the CRA does not impose any limitation on the fees or surcharges for services. 21 Commenter contends that Mercantile illegally "steers" minority loan applicants to federally subsidized loan programs like the programs offered by the FHA. As noted, examiners found no evidence of illegal credit practices in any of the bank's lending programs. 22 Examiners compared a sample of African-American and nonminority applicants for mortgage loans as part of the CRA examination and found no evidence of discrimination or other illegal credit practices. Examiners also sampled denied housing-related loan applications from African-American applicants and approved housing-related loan applications from nonminority borrowers and found no evidence of discrimination or other illegal credit practices. 23 The Board has provided a copy of Commenter's submissions to the OCC, the primary federal supervisor for Mercantile St. Louis, for its consideration and use. The Board also notes that Commenter submitted oral and written comments to the OCC, in connection with the OCC's examination of Mercantile St. Louis, that relate to the bank's record of CRA performance and the OCC's examination policies and practices. In reviewing this proposal, the Board has considered the OCC's response to Commenter and other confidential information from the OCC, in addition to all the comments provided by Commenter. 24 Commenter also contends that Roosevelt has an inadequate record of helping to meet the credit needs of predominantly minority communities in St. Louis. As discussed above, the Board has given substantial consideration to the existing CRA record of Mercantile as reflected in its performance examination, policies and programs, and other confidential supervisory information because Mercantile will acquire Roosevelt. In addition, the Board has reviewed Roosevelt's record of CRA performance in light of all the facts of record, including its most recent CRA performance examinations. 25 Commenter has requested that the Board hold a public hearing or public meeting to consider the record of Mercantile in meeting its responsibilities under the CRA. Section 3(b) of the BHC Act does not require the Board to hold a hearing or meeting on an application unless the appropriate supervisory authority of the bank to be acquired makes a timely written recommendation of denial of the application. The Board has not received such a recommendation, in this case. The Board's rules also provide for a hearing on notices under section 4 of the BHC Act to acquire a savings association if there are disputed issues of material fact relating to the acquisition of the savings association that cannot be resolved in some other manner. After careful review of all the facts of record, the Board has concluded that Commenter's arguments amount to a dispute with the weight that should be accorded to, and the conclusions that the Board should draw from, the facts of record, but do not identify disputed issues of fact that are material to the Board's decision. In addition, Commenter has had an opportunity to present its views, and has submitted substantial written comments that have been considered by the Board. The request fails to show why a written presentation would not suffice, to identify specifically any questions of fact that are in dispute, and to summarize what evidence would be presented at a hearing or meeting. See 12 C.F.R. 262.3(e). In light of all the facts of record, the Board has determined that a public hearing or meeting is not necessary to clarify the factual record in this application, and is not otherwise warranted in this case. Accordingly, Commenter's request for a public hearing or meeting on the application is denied. 26 Commenter requests that the Board delay action on the proposal until the OCC has publicly released the final version of its most recent CRA examination of Mercantile St. Louis and released more information concerning the bank's lending, investment, and small business lending data. The Board is required under the BHC Act to act on applications and notices within specified time periods. As noted, moreover, the Board has considered confidential supervisory information from the OCC and concludes that the record is complete without Commenter's analysis of data that may be disclosed in the OCC's examination of Mercantile St. Louis. In addition, Commenter has had a reasonable opportunity to comment as provided under the Board's application processing procedures and has, in fact, submitted comments that have been carefully considered by the Board. Based on all the facts of record, and for the reasons discussed above, the Board concludes that the record is sufficient to act on the proposal at this time, and that delay or denial of the proposal on the grounds of informational insufficiency is not warranted. 27 Voting for this action: Vice Chair Rivlin and Governors Kelley and Phillips. Absent and not voting: Chairman Greenspan. Abstaining from this action: Governor Meyer.

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1997 Orders on banking applications