Otto Bremer Foundation ("Foundation") and its wholly owned subsidiary, Bremer Financial Corporation ("BFC"), bank holding companies within the meaning of the Bank Holding Company Act ("BHC Act"), have requested the Board=s approval under section 3 of the BHC Act (12 U.S.C. § 1842) to acquire all the outstanding voting stock of Dean Financial Services, Inc., St. Paul, Minnesota ("Dean"), and thereby to acquire its subsidiary banks, First National Bank of Aitkin, Aitkin; State Bank of Edgerton, Edgerton; First State Bank of Eden Prairie, Eden Prairie; and Princeton Bank, St. Paul, all in Minnesota.

Notice of the proposal, affording interested persons an opportunity to submit comments, has been published (64 Federal Register 4873 (1999)). 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.

BFC is the fifth largest depository institution in Minnesota, controlling deposits of approximately $1.5 billion, representing 2.5 percent of total deposits in depository institutions in the state ("state deposits").¹ Dean controls total deposits of $264.6 million, representing less than 1 percent of state deposits. On consummation of the proposal, BFC would remain the fifth largest depository institution in Minnesota, controlling deposits of $1.8 billion, representing approximately 2.9 percent of state deposits.

Competitive Considerations
The BHC Act prohibits the Board from approving an application under section 3 the BHC Act if the proposal would result in a monopoly or would be in furtherance of any attempt to monopolize the business of banking. The BHC Act also prohibits the Board from approving a proposed combination that would substantially lessen competition or tend to create a monopoly in any relevant banking 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.²

BFC and Dean compete in the Minneapolis-St. Paul, Minnesota, banking market ("Minneapolis banking market").³ BFC is the 14th largest depository institution in the Minneapolis banking market, controlling $268 million in deposits, representing less than 1 percent of market deposits.⁴ Dean is the 32nd largest depository institution in the market, controlling $104 million in deposits, representing less than 1 percent of market deposits. On consummation of the proposal, BFC would become the 12th largest depository institution in the market, controlling deposits of $372 million, representing approximately 1 percent of market deposits. The change in market concentration, as measured by the Herfindahl-Hirschman Index ("HHI"), would not exceed the threshold level set in the Department of Justice Merger Guidelines ("DOJ Guidelines").⁵

Based on all the facts of record, and for the reasons discussed above, the Board concludes that consummation of the proposal is not likely to result in any significantly adverse effects on competition or on the concentration of banking resources in the Minneapolis banking market or any other relevant banking market, and that competitive factors are consistent with approval of the proposal.

Other Considerations
The BHC Act also requires the Board, in acting on an application, to consider the financial and managerial resources and future prospects of the companies and banks involved, the convenience and needs of the communities to be served, and certain other supervisory factors. The Board has reviewed these factors in light of all the facts of record, including supervisory reports of examination assessing the financial and managerial resources of the organizations.

Based on all the facts of record, the Board concludes that the financial and managerial resources and future prospects of Foundation, BFC, Dean, and their subsidiary banks are consistent with approval, as are the other supervisory factors the Board must consider under section 3 of the BHC Act. Considerations related to the convenience and needs of communities to be served, including the records of performance of the institutions involved under the Community Reinvestment Act (12 U.S.C. § 2901 et seq.), also are consistent with approval of the proposal.

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. Approval of the application is specifically conditioned on compliance by Foundation and BFC with all the commitments made in connection with the application. For the purposes of this order, 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 transaction shall not be consummated before the fifteenth calendar day after 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 Minneapolis, acting pursuant to delegated authority.

By order of the Board of Governors,⁶ effective June 16, 1999.

(signed) Robert deV. Frierson

Robert deV. Frierson