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| ## Comptroller of the Currency                                        |
|                                                                       |
| > **Administrator of National Banks**                                 |
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**Corporate Decision #2001-29**

**November 2001**

**DECISION OF THE OFFICE OF THE COMPTROLLER OF THE CURRENCY**

**ON THE APPLICATION TO MERGE**

**NEUBERGER BERMAN TRUST COMPANY, NEW YORK, NEW YORK,**

**WITH AND INTO**

**NEUBERGER BERMAN NATIONAL TRUST COMPANY, SEATTLE, WASHINGTON**

**September 28, 2001**

##### I. INTRODUCTION

Neuberger Berman National Trust Company, Seattle, Washington,
("Neuberger National") applied to the Office of the Comptroller of the
Currency ("OCC") for approval to merge Neuberger Berman Trust Company,
New York, New York, ("NBTC") with and into Neuberger National, under the
charter and title of the latter, under 12 U.S.C. § 215a (the "Merger").
Neuberger National is a national bank whose operations are limited to
those of a trust company and activities related thereto. It does not
accept deposits and is not an insured bank. NBTC is a New York state
chartered non-depository trust company whose activities are similarly
limited. It also is not an insured bank. The two institutions are
affiliated under common control by Neuberger Berman Inc.

Neuberger National operates trust offices in New York City and West Palm
Beach, Florida, and a trust representative office in Los Angeles,
California. NBTC operates trust representative offices in Los Angeles
and San Francisco, California. In the proposed Merger the operations of
the two trust companies will be combined under the national charter and
the resulting national bank will have its main office in Seattle, trust
offices in New York City and West Palm Beach, and trust representative
offices in Los Angeles and San Francisco.

**II. DISCUSSION**

In the proposed Merger an uninsured national bank whose main office is
in Seattle would merge with an affiliated uninsured state trust company
in New York. National banks may merge with other entities under several
statutory provisions addressing various kinds of mergers and entities.
The one relevant to the proposed Merger here is 12 U.S.C. § 215a.[^1]
Under section 215a,

> One or more national banking associations or one or more State banks,
> with the approval of the Comptroller, under an agreement not
> inconsistent with this Act, may merge into a national banking
> association located within the same State, under the charter of the
> receiving association.

National Bank Consolidation and Merger Act § 3(a), 12 U.S.C. § 215a(a).
Section 215a has various procedural requirements that Neuberger National
has met. In addition, when the target bank is a state bank, the merger
shall not be in contravention of the law of the state under which the
state bank is incorporated. 12 U.S.C. § 215a(d). The proposed Merger is
not in contravention of state law. NBTC is incorporated under New York
law. No New York law prohibits a New York trust company from merging
with a national bank.[^2]

Neuberger National and NBTC also are located in the same state. NBTC is
organized under New York law and has its principal office in New York.
Clearly, it is located in New York. Neuberger National's main office is
in Seattle, but it has a trust office in New York. Thus, the question is
whether the operation of a trust office in New York makes Neuberger
National, a national bank whose operations are limited to those of a
trust company (and activities incidental thereto), "located" there for
purposes of section 215a.

For many years, the OCC has considered a national bank located in a
state for purposes of mergers under section 215a or consolidations under
section 215 if it has its main office or a branch there.[^3] In the case
of a national bank whose operations are limited to trust functions,
however, the bank will not have "branches," since the bank's trust
offices will not engage in core branching activities.[^4] Nevertheless,
in the context of such a limited purpose trust bank, the key fiduciary
activities performed at a trust office[^5] in the state give the bank
the relevant presence in the state to consider the bank "located"
there.[^6] A limited purpose national trust bank is located in a state
through an office that performs the key fiduciary activities, since
those activities are the heart of its primary line of business, just as
the branching activities of section 36(j) are the heart of traditional
commercial banking. Neuberger National performs such key fiduciary
activities in its New York trust office.

Accordingly, Neuberger National is located in New York for purposes of
section 215a by virtue of its trust office in that state. Therefore, the
proposed Merger is legally authorized.[^7]

**III. CONCLUSION AND APPROVAL**

For the reasons set forth above, including the representations and
commitments of the applicants, we find that the Merger of NBTC into
Neuberger National is legally authorized under 12 U.S.C. § 215a. The
transaction raises no supervisory and policy concerns. Accordingly, the
application is hereby approved.

This approval, and the activities and communications by OCC employees in
connection with the filing, do not constitute a contract, express or
implied, or any other obligation binding upon the OCC, the government of
the United States of America ("U. S."), any agency or entity of the
U.S., or an officer or employee of the U.S, and do not affect the
ability of the OCC to exercise its supervisory, regulatory and
examination authorities under applicable law and regulations. The
foregoing may not be waived or modified by any employee or agent of the
OCC or the U.S.

Signed September 28, 2001

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Alan Herlands Date

Director

Licensing Operations

Application Control Number: 2001-NE-02-0045

[^1]: The banks have different home states, and this is an interstate
    merger. However, it is not an interstate merger transaction
    authorized by, and subject to, the Riegle-Neal Act because the banks
    are not insured banks. *See* 12 U.S.C. § 1831u(a) (authorizing
    mergers between insured banks with different home states). The banks
    are affiliated. However, this is not a merger between a national
    bank and a nonbank subsidiary or affiliate authorized by 12 U.S.C.
    § 215a-3 because NBTC is a state bank for purposes of 12 U.S.C.
    § 215a. *See* 12 U.S.C. § 215b(1) ("'State bank' means any bank,
    banking association, trust company, savings bank . . . which is
    incorporated under the laws of any State . . . ."). Since it is a
    state bank for section 215a, we believe the better view is that it
    would not be considered a nonbank for section 215a-3, since these
    are sections of the same Act. However, arguably Congress intended
    any subsidiary or affiliate that is not a "bank" for purposes of the
    Bank Holding Company Act to be included within the scope of section
    215a-3. In that case, NBTC would be a nonbank affiliate for
    section 215a-3 (as well as a state bank for section 215a), and the
    Merger clearly authorized under section 215a-3. Since the proposed
    Merger is also authorized under section 215a, we need not decide
    this issue in this application.

[^2]: Indeed, New York expressly permits state banks and trust companies
    to merge with national banks, including out-of-state national banks.
    N.Y. Banking Law § 600(6). *See also* N.Y. Banking Law § 225. Under
    New York law, an out-of-state national bank is a national bank the
    main office of which is located outside New York. N.Y. Banking Law
    § 222(3). Neuberger National is a national bank whose main office is
    in Seattle. Thus, it is covered by the statute even though it is
    limited to trust activities and is not insured.

[^3]: ^?^ *See, e.g.,* Decision on the Application to Merge NationsBank
    of Texas, N.A., Dallas, Texas, into NationsBank, N.A. Charlotte,
    North Carolina (OCC Corporate Decision No. 98-19, April 2, 1998)
    (Part II-A-1, citing earlier OCC decisions). *See also Ghiglieri v.
    NationsBank of Texas, N.A.,* No. 3:97-CV-2897-P, 1998 U.S. Dist.
    LEXIS 6637 (N.D. Texas, May 6, 1998) (reviewing OCC Corporate
    Decision No. 98-19; agreeing with OCC position that out-of-state
    bank was located in Texas for section 215a merger purposes because
    it had branches there).

[^4]: ^?^ For national banks, a "branch" is an office "at which deposits
    are received, or checks paid, or money lent." 12 U.S.C. § 36(j). An
    office of a national bank at which the bank engages in other banking
    or trust activities, but does not engage in one of the core
    branching activities, is not a branch. *See* *Clarke v. Securities
    Industry Association,* 479 U.S. 388 (1987) (securities brokerage
    activities). *See also* *First National Bank of McCook, Nebraska v.
    Fulkerson, et al.,* Civil Action No. 98-D-1024, slip op. (D. Colo.
    March 7, 2000) (combination of deposit production office, loan
    production office, and ATM is not a branch because no core branching
    functions are performed); *Bank One, Utah v. Guttau,* 190 F.3d 844
    (8^th^ Cir. 1999), *cert. denied sub nom.* *Foster v. Bank One,
    Utah,* 529 U.S. 1087 (2000) (ATMs excluded from definition of
    branch).

[^5]: ^?^ A trust office is an office of a national bank, other than its
    main office or a branch, at which the bank engages in one or more of
    the following key fiduciary activities: accepting the fiduciary
    appointment, executing the documents that create the fiduciary
    relationship, or making discretionary decisions regarding the
    investment or distribution of fiduciary assets. 12 C.F.R. § 9.2(j).

[^6]: ^?^ The OCC previously adopted a similar interpretation of
    12 U.S.C. § 92. We concluded that a national trust bank is
    considered to be "located and doing business" for purposes of
    12 U.S.C. § 92 where it has a trust office that performs the key
    fiduciary activities and, hence, may sell insurance from such
    office. *See* OCC Interpretive Letter No.  877 (December 13, 1999).

[^7]: ^?^ Because both Neuberger National and NBTC are not insured
    institutions, the Bank Merger Act and the Community Reinvestment Act
    do not apply to this transaction.