For immediate release

The Federal Reserve Board announced today its approval of the applications by Bank SinoPac, Taipei, Taiwan, and SinoPac Bancorp, Los Angeles, California, to become bank holding companies by acquiring all the voting shares of Far East National Bank, Los Angeles, California. Attached is the Board's Order relating to this action.

Bank SinoPac Taipei, Taiwan SinoPac Bancorp Los Angeles, California Order Approving the Formation of Bank Holding Companies

Bank SinoPac, Taipei, Taiwan ("SinoPac"), and its wholly owned subsidiary, SinoPac Bancorp, Los Angeles, California ("Bancorp"), have requested the Board's approval under section 3 of the Bank Holding Company Act (12 U.S.C. � 1842(a)) ("BHC Act") to become bank holding companies by acquiring all the voting shares of Far East National Bank, Los Angeles, California ("Far East Bank").1 Notice of the proposal, affording interested persons an opportunity to submit comments, has been published (61 Federal Register 69,096 (1996)). The time for filing comments has expired, and the Board has considered the notice and all comments received in light of the factors set forth in section 3 of the BHC Act. SinoPac, with total assets equivalent to approximately $4.4 billion,2 is the 26th largest banking organization in Taiwan. SinoPac does not currently operate in the United States. Far East Bank is the 71st largest depository institution in California, controlling approximately $447 million in deposits, representing less than 1 percent of total deposits in depository institutions in the state.3 Competitive Considerations The BHC Act prohibits the Board from approving an application under section 3 of the BHC Act if the proposal would result in a monopoly or if the effect of the proposal may be substantially to lessen competition in any relevant market, unless the Board finds that the anticompetitive effects of the proposal are clearly outweighed in the public interest by the probable effect of the proposal in meeting the convenience and needs of the community to be served. SinoPac and Far East Bank do not compete directly in any banking market. Accordingly, the Board has determined that consummation of the proposal would not have a significantly adverse effect on competition or on the concentration of banking resources in any relevant banking market. Certain Supervisory Considerations Under section 3 of the BHC Act, as amended by the Foreign Bank Supervision Enhancement Act of 1991,4 the Board may not approve an application involving a foreign bank unless the bank is "subject to comprehensive supervision or regulation on a consolidated basis by the appropriate authorities in the bank's home country."5 The Board previously has determined, in applications under the International Banking Act (12 U.S.C. � 3101 et seq.) ("IBA"), that certain Taiwan commercial banks were subject to comprehensive consolidated supervision by their home country authorities.6 In this case, the Board has determined that SinoPac is supervised on substantially the same terms and conditions as other Taiwan commercial banks. Based on all the facts of record, the Board concludes that SinoPac is subject to comprehensive supervision and regulation on a consolidated basis by its home country supervisor. The BHC Act also requires the Board to determine that the applicant has provided adequate assurances that it will make available to the Board such information on its operations and activities and those of its affiliates that the Board deems appropriate to determine and enforce compliance with the BHC Act. The Board has reviewed the restrictions on disclosure in jurisdictions where SinoPac has material operations and has communicated with the relevant authorities concerning access to information. SinoPac has committed that, to the extent not prohibited by applicable law, it will make available to the Board such information on the operations of SinoPac and any of its affiliates that the Board deems necessary to determine and enforce compliance with the BHC Act, the IBA, and other applicable federal law. SinoPac also has committed to cooperate with the Board to obtain any waivers or exemptions that may be necessary in order to enable SinoPac to make any such information available to the Board. In light of these commitments and other facts of record, the Board has concluded that SinoPac has provided adequate assurances of access to any appropriate information the Board may request. For these reasons, and based on all the facts of record, the Board has concluded that the supervisory factors the Board is required to consider under section 3(a)(3) of the BHC Act are consistent with approval. Financial, Managerial, and Convenience and Needs Considerations In considering the financial and managerial factors in this case, the Board notes that SinoPac's capital exceeds the minimum levels that would be required under the Basle Capital Accord, and is considered equivalent to the capital that would be required of a U.S. banking organization. The Board also has considered other aspects of SinoPac's financial condition, as well as the capital position and other aspects of the financial condition of Far East Bank and the other institutions involved in the transaction. The proposed transaction is not expected to have a significantly adverse effect on the financial resources of the institutions involved. Far East Bank is well-capitalized and all the institutions involved are expected to remain so after consummation of this proposal. The Board also has considered the size of the acquisition relative to the assets of SinoPac, and the effect of this proposal on the liquidity positions of the institutions. The Board also has considered the managerial resources of the institutions involved in the proposal in light of all the facts of record, including assessments of their managerial resources by United States and Taiwan banking authorities. Based on the foregoing and all the facts of record, the Board has concluded that considerations relating to the financial and managerial resources and future prospects of SinoPac, Bancorp and Far East Bank are consistent with approval of the proposal, as are the other supervisory factors the Board must consider under section 3 of the BHC Act.7 The Board also has concluded that considerations relating to the convenience and needs of the community to be served are consistent with approval of this proposal. Based on the foregoing and all the other facts of record, the Board has determined that these applications should be, and hereby are, approved. Should any restrictions on access to information on the operations or activities of SinoPac or any affiliates of SinoPac subsequently interfere with the Board's ability to determine the compliance by SinoPac or any affiliates of SinoPac with applicable federal statutes, the Board may require termination by SinoPac or by any affiliates of SinoPac of their direct or indirect activities in the United States. The Board's approval of this proposal is expressly conditioned on SinoPac's compliance with all the commitments made in connection with these applications and with the conditions in this order. For purposes of this action, these commitments and conditions 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. This transaction 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 by the Federal Reserve Bank of San Francisco, acting pursuant to delegated authority.

By order of the Board of Governors,8 effective June 11, 1997. (signed) Jennifer J. Johnson Jennifer J. Johnson Deputy Secretary of the Board

Footnotes 1 Far East Bank would become a wholly owned subsidiary of Bancorp. In connection with the proposal, Bancorp would establish an interim national bank subsidiary that would be merged with and into Far East Bank. Approval of this proposal is conditioned on SinoPac receiving all required regulatory approvals. 2 Asset data are as of December 31, 1996, and use exchange rates then in effect. 3 Deposit data are as of June 30, 1996. In this context, depository institutions include banks, savings and loan associations, and savings banks. 4 Pub. L. No. 102-242, � 201 et seq., 105 Stat. 2286 (1991). 5 12 U.S.C. � 1842(c)(3)(B). As provided in Regulation Y, the Board determines whether a foreign bank is subject to consolidated home country supervision under the standards set forth in Regulation K (International Banking Operations). 12 C.F.R. 225.13(a)(4). Regulation K provides that a foreign bank may be considered subject to consolidated supervision if the Board determines that the bank is supervised or regulated in such a manner that its home country supervisor receives sufficient information on the worldwide operations of the foreign bank, including the relationship of the bank to its affiliates, to assess the foreign bank's overall financial condition and compliance with law and regulation. 12 C.F.R. 211.24(c)(1)(ii). 6 See, e.g., First Commercial Bank, 83 Federal Reserve Bulletin 315 (1997); Taiwan Business Bank, 81 Federal Reserve Bulletin 746 (1995); Bank of Taiwan, 79 Federal Reserve Bulletin 541 (1993). 7 Several shareholders of Far East Bank have submitted comments objecting to the transaction fee paid to an officer of the bank in connection with the proposal, past compensation and benefits paid to the bank's officers, and the amount paid for their shares in bank. The Board notes that the transaction fee discussed in these comments was disclosed in the shareholder proxy materials, and that shareholders owning more than 80 percent of Far East Bank's stock voted in favor of the proposal. In addition, there is no indication in the supervisory information from the bank's primary federal supervisor, the OCC, that the compensation paid to bank's management was excessive. Commenters also present no facts to substantiate that the compensation to be paid for their shares is inadequate, and Commenters may exercise dissenting shareholder rights under the National Bank Act if they believe the consideration they have been offered is unreasonable. 12 U.S.C. � 215 and 215a. The Board notes, moreover, that the limited jurisdiction to review applications under the specific statutory factors in the BHC Act does not authorize the Board to consider matters relating to stock pricing, exchange ratios, and similar matters. See Western Bancshares, Inc. v. Board of Governors, 480 F.2d 749 (10th Cir. 1973). 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