BOARD OF GOVERNORS

OF'THE

FEDERAL RESERVE SYSTEM

WASHINGTON, D. (. 20551

SCOTT G. ALVAREZ

GENERAL COUNSEL.

December 20, 2007

Rebecca H. Laird, Esq.

Kirkpatrick & Lockhart Preston Gates Ellis LLP

1601 K Street, NW

Washington, DC 20006-1600

Dear Ms. Laird:

This is in response to your request for a determination that Davis

Selected Advisers, L.P., Venture Advisers, Inc., and Davis Investments, LLC

(together, "Davis"), all ofTucson, Arizona, may acquire up to 15 percent of any

class ofvoting securities of a bank holding company or bank without being

deemed to have acquired control ofthat institution under the Bank Holding

Company Act ("BHC Act") or the Change in Bank Control Act ("CIBC Act")

when the acquisition complies with certain conditions described in this letter and

related correspondence.

Davis proposes to hold bank holding company and bank shares

through a variety ofinvestment companies registered under the Investment

Company Act of 1940, other pooled investment vehicles, institutional private

accounts, and managed money/wrap accounts that are advised by Davis

(collectively, the "Davis-Advised Entities").

For purposes ofthe BHC Act, a company controls a bank holding

company or bank ifthe first company (i) directly or indirectly or acting through

one or more other persons owns, controls, or has power to vote 25 percent or more

of any class ofvoting securities ofthe bank holding company or bank; (ii) controls

in any manner the election ofa majority ofthe directors ofthe bank holding

company or bank; or (iii) directly or indirectly exercises a controlling influence
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over the management or policies ofthe bank holding company or bank.} The

Board's Regulation Y also sets forth several rebuttable presumptions of control.2

Under the proposal, Davis would not own, control, or hold with power

to vote 25 percent or more of a class of voting securities of, or control the election

of a majority ofthe directors of, any bank holding company or bank. In addition,

Davis would not trigger any ofthe BHC Act rebuttable presumptions of control

under Regulation Y with respect to any bank holding company or bank. Davis

would only be deemed to control a bank holding company or bank under the

BHC Act ifthe Board were to find that Davis exercises a controlling influence

over the management or policies of a bank holding company or bank.

For purposes ofthe CIBC Act, Davis is presumed by Regulation Y to

control a bank holding company or state member bank if "immediately after the

transaction ... [it] will own, control, or hold with power to vote 10 percent or more

of any class of voting securities ofthe institution" and the institution has registered

securities or no other person owns or controls a greater percentage ofthe same

class of voting securities.3 Davis proposes at times to acquire in excess of

10 percent of a class ofvoting securities of a bank holding company or state

member bank through the Davis-Advised Entities, without regard to whether any

such institution has registered securities or whether Davis is the largest shareholder

in the institution.

Davis seeks to establish that it does not exercise a controlling

influence over a bank holding company or bank for purposes ofthe BHC Act and

to rebut the regulatory presumption of control for purposes ofthe CIBC Act in

specific circumstances. In particular, Davis and the Davis-Advised Entities

collectively would not own or control more than 15 percent of any class of voting

securities of a bank holding company or bank; and none ofDavis or any DavisAdvised Entity would individually own or control more than 10 percent of any

class of voting securities of a bank holding company or banle In addition, Davis

1 12 U.S.C. § 1841(a)(2); 12 C.F.R. 225.2(e).

2 12 C.F.R. § 225.31(d).

3 12 C.F.R. § 225.41 (c).
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has committed to use its best efforts to vote shares owned or controlled by Davis or

any ofthe Davis-Advised Entities in excess of 10 percent ("excess shares") in the

same proportion as all other shares that are not excess shares are voted. In the

event that Davis' best efforts are unsuccessful, Davis would not vote any excess

shares.

Moreover, Davis has made a number of commitments designed to

mitigate the ability ofDavis to control a bank holding company or bank. Among

these commitments, Davis has committed that, whenever Davis or the DavisAdvised Entities own or control, in the aggregate, 10 percent or more of any class

of voting securities of a bank holding company or bank, Davis and the DavisAdvised Entities will not, individually or collectively:

1) take any action to control the bank holding company or bank

within the meaning ofthe BHC Act;

2) have any director, officer, or employee interlocks with the bank

holding company or bank;

3) except in the context of a tender offer or in certain other

transactions, dispose of voting shares ofthe bank holding company

or bank (i) to any person seeking control over the institution or

(ii) in block transactions exceeding 5 percent of any class of voting

shares ofthe institution; or

4) threaten to dispose ofvoting shares in any manner as a condition of

specific action or non-action by the bank holding company or

bank.4

In addition to considering the commitments made by Davis, Board

staffhas considered the nature ofDavis and its proposed investments. Davis

operates and provides investment advice to the Davis-Advised Entities. The

proposed acquisitions in bank holding companies or banks would not be

proprietary investments by Davis. Rather, they would be investments made by

Davis-Advised Entities and on behalf ofthe beneficial owners ofthe Davis4 For a complete list ofthe commitments that Davis has made to the Board, see

the Appendix.
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Advised Entities. The Davis-Advised Entities are not operating companies, and

Davis does not lend to the Davis-Advised Entities or to their portfolio companies.

Moreover, Davis is not in the business of operating or controlling banks, bank

holding companies, or other companies. The proposed acquisitions will be made

for investment purposes with the expectation ofresale and not for the purpose of

exercising a controlling influence over the management or policies of any bank

holding company or bank.

In view ofthe commitments made by Davis and the facts described in

this letter, Board staff would not recommend that the Board find that acquisitions

made within the parameters set forth in this letter would cause Davis or any ofthe

Davis-Advised Entities: (i) to control a bank holding company or bank for

purposes ofthe BHC Act; or (ii) to control a bank holding company or state

member bank for purposes ofthe crnc Act. S

The preceding opinions are based expressly on the facts and

circumstances ofthis case as they have been described to Board staff, and any

change in these facts or circumstances may result in a different opinion. In

addition, this letter expresses no opinion as to whether a CIBC Act notice would be

required for transactions involving direct investments in national banks or state

S In your letter, you also request confirmation that Davis has not acquired control

ofCommerce Bancorp, Inc. ("CBI"), Cherry Hill, New Jersey, for purposes ofthe

CIBC Act or BHC Act as a result ofits acquisition of 10.3 percent of outstanding

CBI voting shares. Davis does not own, control, or hold with power to vote 25

percent or more of a class of voting securities ofCBI and does not control the

election ofa majority ofits directors. In addition, Davis does not trigger any ofthe

BHC Act rebuttable presumptions of control under Regulation Y with respect to

CBI. Moreover, although Davis-Advised Entities currently hold in excess of 10

percent ofa class ofvoting shares ofCBI, Davis has voting discretion over only

9.8 percent. Davis also has entered into the passivity commitments discussed

above. Accordingly, Board staff would not recommend that the Board find that

Davis and the Davis-Advised Entities must obtain Board approval to acquire or

retain control ofCBI for CIBC Act or BHC Act purposes, subject to the

commitments discussed in this letter and the Appendix.
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non-member banks. Ifyou have any questions about this matter, please contact

Brian Knestout, Attorney (202-452-2249), ofthe Board's Legal Division.

Sincerely,
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Commitments of Davis to the Board

Investments by Davis and the Davis-Advised Entities in 10 percent or more

of any class of voting securities ofU.S. bank holding companies and banks (each, a

"Bank") will be conducted in accordance with the commitments and restrictions

listed below.

1. Davis and the Davis-Advised Entities in the aggregate:

(a) will not acquire more than fifteen percent of any class or series of

voting securities of any Bank; and

(b) will use best efforts to provide that shares in excess of 10 percent

of any class or series ofvoting securities of a Bank C1excess shares")

will be voted in proportion to the vote taken on all shares that are not

excess shares or, in the event that such efforts to provide for mirror

voting are not successful, will not vote any excess shares.

2. Neither Davis nor any Davis-Advised Entities will, directly or indirectly,

individually or in the aggregate:

(a) take any action to cause a Bank or any ofits subsidiaries to

become a subsidiary ofDavis or any Davis-Advised Entity for

purposes ofthe BHC Act;

(b) unless agreed to by the Federal Reserve Board or its staff, and

permitted by applicable law, seek or accept representation on the

board of directors of any Bank or its subsidiaries;

(c) have or seek to have any representative ofDavis or any DavisAdvised Entity serve as an officer, agent or employee of any Bank or

its subsidiaries;

(d) propose a director or a slate of directors in opposition to any

nominee or slate of nominees proposed by the management or board

of directors of any Bank;

(e) exercise or attempt to exercise a controlling influence over the

management or policies of any Bank or any ofits subsidiaries; or
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(t) attempt to influence the dividend policies; loan, credit, or

investment decisions or policies; pricing ofservices; personnel

decisions; operations activities (including the location of any offices

or branches or their hours of operation, etc.); or any similar activities

or decisions of any Bank or any ofits subsidiaries.

3. Neither Davis nor any Davis-Advised Entity will dispose ofvoting securities

ofaBank:

(a) to any person ifDavis or the Davis-Advised Entity knows that

such person seeks to change the control ofthe Bank in any manner; or

(b) to any person whom Davis or the Davis-Advised Entity knows (i)

has made a filing with the SEC or other federal agency with respect to

the ownership ofmore than five percent ofthe Bank's voting

securities, or (ii) would be required to do so as a result ofthe purchase

from Davis and the Davis-Advised Entity; or

(c) in an amount ofmore than 5 percent ofthe Bank's voting securities

in any single transaction;

provided that notwithstanding paragraphs (a) through (c) above, Davis and

the Davis-Advised Entities may dispose oftheir stock in a Bank in the

following circumstances:

(i) in a cross trade between two Davis-Advised Entities in compliance

with the rules governing such cross trades under the Investment

Company Act of 1940, as amended (the "1940 Act");

(ii) in the case of paragraph (c) above, in a bunched trade effected for

two or more Davis-Advised Entities in compliance with the rules

governing bunched trades under the 1940 Act;

(iii) in a sale by Davis and the Davis-Advised Entities to the Bank or

one ofits subsidiaries;

(iv) in a tender or exchange offer for voting stock ofthe Bank; or

(v) in one or more open market transactions that are effected on a

stock exchange or in the over-the-counter market (which may include
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a sale to one or more broker-dealers acting as market makers or

otherwise intending to resell the shares sold to it or them in

accordance with its or their normal business practices).

4. Neither Davis nor any Davis-Advised Entity will threaten to dispose of

voting shares in any manner as a condition ofspecific action or non-action

by the Bank.

5. Neither Davis nor any Davis-Advised Entity will individually own, control,

or hold with power to vote more than 10 percent of any class ofvoting

securities of a Bank.