For immediate release

The Federal Reserve Board today announced its approval of the application by First National Security Company, DeQueen, Arkansas, to acquire all of the voting shares of First Financial Corporation of Idabel and thereby acquire its subsidiary bank, First State Bank of Idabel, both in Idabel, Oklahoma. Attached is the Board's Order relating to this action.

First National Security Company DeQueen, Arkansas Order Approving the Acquisition of a Bank Holding Company

First National Security Company, DeQueen, Arkansas ("First National"), 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 acquire all of the voting shares of First Financial Corporation of Idabel ("First Financial"), and thereby acquire its subsidiary bank, First State Bank of Idabel, both in Idabel, Oklahoma ("Bank"). Notice of this proposal, affording interested persons an opportunity to submit comments, has been published (62 Federal Register 53,007 (1997)). The time for filing comments has expired, and the Board has considered the proposal and all comments received in light of the factors set forth in section 3 of the BHC Act. First National operates subsidiary banks in Arkansas and Oklahoma. First National is the 144th largest depository institution in Oklahoma, controlling approximately $41.9 million in deposits, representing less than 1 percent of total deposits in depository institutions in the state.1 First Financial is the 216th largest depository institution in Oklahoma, controlling approximately $23 million in deposits. On consummation of this proposal, First National would become the 96th largest depository institution in Oklahoma, controlling deposits of $64.9 million, representing less than 1 percent of the total deposits in depository institutions in the state. Interstate Banking Analysis Section 3(d) of the BHC Act, as amended by Section 101 of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, allows the Board to approve an application by a bank holding company to acquire a bank located in a state other than the home state of such bank holding company if certain conditions are met.2 For purposes of the BHC Act, the home state of First National is Arkansas, and First National proposes to acquire a bank in Oklahoma. The conditions for an interstate acquisition under section 3(d) of the BHC Act are met in this case.3 Competitive Considerations The BHC Act prohibits the Board from approving a proposal submitted under section 3 of the Act if the proposal would result in a monopoly or if the effect of the proposal may be to substantially lessen competition in any relevant market unless the Board finds that the anticompetitive effects of the proposed transaction are clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served. First National and First Financial compete directly in the McCurtain County, Oklahoma, banking market.4 First National is the fourth largest commercial banking organization in the McCurtain County banking market, controlling deposits of approximately $41.9 million, representing 16.1 percent of the total deposits in commercial banking organizations in the market ("market deposits").5 First Financial is the sixth largest commercial banking institution in the market, controlling deposits of approximately $23 million, representing 8.8 percent of market deposits. On consummation of this proposal, First National would become the largest commercial banking organization in the McCurtain County banking market, controlling deposits of approximately $64.9 million, representing 24.9 percent of market deposits. Concentration in the market, as measured by the Herfindahl-Hirschman Index ("HHI"), would increase by 285 points to 1971.6 In evaluating the competitive effects of the proposal in the McCurtain County banking market, the Board has considered several factors. The McCurtain County banking market is a relatively small rural market in southeastern Oklahoma and six competitors would remain in the market after consummation of the proposal, including a large multistate bank holding company. Each of the five banks that would compete with First National after consummation would have a market share of more than 5 percent, and three of the banks control more than 15 percent of market deposits. The Department of Justice has reviewed the proposal and advised the Board that consummation of the proposal would not likely have any significantly adverse competitive effects in the McCurtain County banking market or any other relevant banking market. Based on 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 McCurtain County banking market or any other relevant banking market. Other Factors The BHC Act also requires the Board to consider the financial and managerial resources and future prospects of the companies and banks involved in the proposal, the convenience and needs of the communities to be served, and certain supervisory factors. The facts of record include supervisory reports of examination assessing the financial and managerial resources of the organizations and financial information provided by First National. Based on all the facts of record, the Board concludes that the financial and managerial resources and the future prospects of First National, First Financial, and their respective subsidiary banks, are consistent with approval, as are the other supervisory factors the Board must consider under section 3 of the BHC Act. In addition, considerations relating to the convenience and needs of the communities to be served are consistent with approval of the application. Conclusion Based on the foregoing, and in light of all the facts of record, the Board has determined that the application should be, and hereby is, approved. The Board's approval is specifically conditioned on compliance by First National with all the commitments made in connection with this application. 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 First Financial 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 St. Louis, acting pursuant to delegated authority.

By order of the Board of Governors,7 effective November 24, 1997. (signed) Jennifer J. Johnson Jennifer J. Johnson Deputy Secretary of the Board

Footnotes 1 Deposit data are as of June 30, 1996. In this context, depository institutions include commercial banks, savings banks, and savings associations. 2 Pub. L. No. 103-328, 108 Stat. 2338 (1994). A bank holding company's home state is the state in which the operations of the bank holding company's banking subsidiaries were principally conducted on July 1, 1966, or the date on which the company became a bank holding company, whichever is later. 3 12 U.S.C. §§ 1842(c)(1)(A) and (B) and 1842(d)(2)(A) and (B). First National is adequately capitalized and adequately managed. On consummation of the proposal, First National would control less than 10 percent of the total amount of deposits of insured depository institutions in the United States, and less than 30 percent of the total amount of deposits of insured depository institutions in Oklahoma. In addition, Bank has been in existence for the minimum period of time necessary to satisfy age requirements established by applicable state law. See Okla. Stat. Ann. tit. 6 § 506(D)(1)(a). All other requirements of section 3(d) of the BHC Act also would be met on consummation of the proposal. 4 The McCurtain County banking market is approximated by McCurtain County, Oklahoma. 5 Market share data are as of June 30, 1996. No savings associations operate in the McCurtain County banking market. 6 Under the revised Merger Guidelines, 49 Federal Register 26,823 (June 29, 1984), a market above 1800 is considered to be 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 Department of Justice 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 entities. 7 Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and Governors Kelley, Phillips, Meyer, Ferguson, and Gramlich.

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1997 Orders on banking applications