#### Corporate Decision #2002-05

**Decision Document April 2002**

**DECISION OF THE COMPTROLLER OF THE CURRENCY ON THE APPLICATION**

**TO CONSOLIDATE THE SECURITY STATE BANK, BIRD CITY, KANSAS WITH FIRST
NATIONAL BANK, GOODLAND, KANSAS, UNDER THE CHARTER AND TITLE OF FIRST
NATIONAL BANK.**

##### 

##### Introduction

On January 2, 2002, application was made to the Comptroller of the
Currency for prior authorization to consolidate The Security State Bank,
Bird City, Kansas with First National Bank, Goodland, Kansas under the
charter and the title of First National Bank. This application was based
on an agreement entered into between the proponents on January 10, 2002.

##### Participating Financial Institutions

As of December 31, 2001, The Security State Bank, a state non-member
bank, had total deposits of \$14 million and operated one office. On the
same date, First National Bank had total deposits of \$259 million and
operated eight offices. First National Bank is 100% owned and controlled
by First National Bancshares, Inc., a one bank holding company.

##### Competitive Analysis

The relevant geographic market for this proposal is the Cheyenne County
banking market. This is the area from which Security derives the bulk of
its deposits and where competition between Security and FNB is direct
and immediate. Within this banking market, Security operates its only
office in Bird City and FNB operates one branch office in St. Francis.
Cheyenne County has a population of 3,165. The OCC considers an area
with such a small population to be economically insignificant from a
competitive standpoint. (See Decision of the Comptroller of the Currency
on the application to merge The National Bank and Trust Company of
Norwich, New York, with National Bank of Oxford, Oxford, New York, dated
April 8, 1983.) Because the OCC does not recognize the market as being
economically significant, any anticompetitive effects resulting from
this transaction are considered de minimis.

**Banking Factors**

The Bank Merger Act requires the OCC to consider "\...the financial and
managerial resources and future prospects of the existing and proposed
institutions, and the convenience and needs of the community to be
served." We find that the financial and managerial resources of The
Security State Bank and First National Bank do not raise concerns that
would cause the application to be disapproved. The future prospects of
the proponents, individually and combined, are considered favorable and
the resulting bank is expected to meet the convenience and needs of the
community to be served as no offices will be closed.

Community Reinvestment Act

A review of the record of this application and other information
available to the OCC as a result of its regulatory responsibilities has
revealed no evidence that the applicants' records of helping to meet the
credit needs of their communities, including low- and moderate-income
neighborhoods, is less than satisfactory.

Conclusion

We have analyzed this proposal pursuant to the Bank Merger Act (12 USC
1828(c)) and/or 12 CFR 5.33, and find that it will not lessen
significantly competition in any relevant market. Other factors
considered in evaluating this proposal are satisfactory. Accordingly,
the application is approved.

/s/ February 21, 2002

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Dated: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

James A. Bundy, Licensing Manager

Western District

Control Number: 2002-WE-02-0001