Federal Register / Vol. 62, No. 26 / Friday, February 7, 1997 / Notices 5831

funds into residential housing finance—

the statutory mission of the FHLBank

System—in a manner that is similar to,

but functionally more sophisticated

than, that which occurs when a

FHLBank makes an advance to a

member. OGC has concluded, therefore,

that it is reasonable for the Finance

Board to authorize the undertaking of

the MPF program by the FHLBank of

Chicago as an activity incidental to a

FHLBank’s express statutory authority. The MPF is designed to insulate the

FHLBank from virtually all the credit

risk associated with investing in home

mortgages. First loss credit protection

for the MPF loan program would be

provided by a reserve fund established

by the FHLBank, to be funded by a share

of the mortgage loan cash flows. The

excess spread account would be

established in an amount at least equal

to the historical loss experience on the

types of MPF loans originated by the

members (based on historical data over

the past five years, this first loss

coverage is likely to range from two to

five basis points of mortgage loan

principal). In return for a fee, MPF participating

members would provide second loss

credit enhancement at least equal to the

level of subordination afforded doubleA rated mortgage-backed securities. The

FHLBank will determine the amount of

the required credit enhancement based

on the characteristics of the mortgages

and rating agency modeling

methodology. A recent analysis has

shown that over an eight-year period,

investments in mortgage pools rated

double-A had zero losses.

Participating members will benefit

from their ability to provide home

mortgage loans to more customers on

more flexible terms while realizing fees

for mortgage origination, credit

enhancement, and servicing. The

FHLBank and its shareholders will be

compensated for managing the interest

rate and options risk associated with

funding MPF loans. This cooperative

venture could result in increased

competition in the home mortgage loan

market.

The Finance Board has determined

that the proposed pilot program satisfies

the three criteria established by the

Finance Board for considering and

approving new mission-related

activities: (1) the FHLBank’s in-house

expertise, the involvement of its board

and senior management in the

development of the program’s business

plan, policies, underwriting guidelines,

and monitoring and reporting

requirements, the intended

establishment of reserves and member

secondary credit enhancements

appropriate to risk, the FHLBank’s

experience in managing the interest rate

and options risk associated with home

mortgages, and the level of program

oversight contemplated, should ensure

preservation of the triple-A rating of the

FHLBanks and the FHLBank System; (2)

the financial advantages of the program

relative to other funding alternatives

available to members, the capital

treatment which will allow the members

to more effectively leverage their equity,

and the program’s underwriting

standards, which are expected to be

more flexible than those used to

originate home mortgage loans on more

flexible and attractive terms; and (3) in

providing members with a strategic

alternative that will allow them to

compete more effectively in the housing

finance market, the program acts to

promote the cooperative nature of the

FHLBank System. Program

implementation is contingent upon

confirmation by the Finance Board’s

Office of Supervision that appropriate

program policies, procedures, controls

and reserves have been established by

the FHLBank.

The following conditions apply to the

Chicago Pilot Program:

(a) The original principal balances of

the subject loans shall fall within the

conforming loan limits applicable to the

secondary market housing GSEs.

(b) The FHLBank shall employ pricing

methodology in an attempt to direct a

portion of the program’s funding to lowand moderate-income households.

(c) The board of the FHLBank shall

ensure, and certify to, the existence of

appropriate expertise, policies,

procedures, and controls prior to

program implementation.

(d) The board of the FHLBank shall

evaluate the need for and establish,

prior to program implementation, and

on an on-going basis, any appropriate

reserves.

(e) The board of the FHLBank shall

take appropriate precautions, in

structuring its program, to avoid

conflicts of interest, or any appearance

thereof, for board directors.

(f) The board of the FHLBank shall

require at each regular board meeting

program progress reports from

management during the first year of the

program (and at least quarterly reports

thereafter), and shall provide quarterly

evaluations of the progress of the pilot

program to the Finance Board.

Persons wishing to participate in the

hearings should send a written request

to the address listed in the ADDRESSES

portion of this notice, to be received no

later than Wednesday, February 19,

1997. A request to participate in the

hearing must include the following

information:

(A) The name, title, address, business

telephone and fax number of the

participant; and

(B) The entity or entities that the

participant will be representing.

Depending on the number of requests

received, participants may be limited in

the length of their oral presentations.

All submissions will be included as part

of the record, including written

testimony not presented orally, although

extraneous material may be deleted

from the printed record to reduce

printing costs. The Finance Board will

notify those selected to make oral

presentations and provide an

approximate time. The Finance Board

reserves the right to limit the number of

participants and to select, at its

discretion, those persons who may make

oral presentations if more requests are

received for participation than may be

accommodated in the time available.

Participants will be required to

submit written statements in advance of

the hearing date. These written

statements should incorporate the major

points to be presented at the hearings

and should be accompanied by an

executive summary of no more than two

pages. Written statements must be

received no later than March 3, 1997,

and should be sent to the address listed

in the ADDRESSES portion of this notice.

Anyone selected for an oral presentation

whose testimony has not been received

by March 3, 1997, may not testify except

by special permission of the Finance

Board.

By the Federal Housing Finance Board.

Bruce A. Morrison,

Chairman.

[FR Doc. 97–3191 Filed 2–6–97; 8:45 am]

BILLING CODE 6725–01–M

FEDERAL RESERVE SYSTEM

Change in Bank Control Notices;

Acquisitions of Shares of Banks or

Bank Holding Companies

The notificants listed below have

applied under the Change in Bank

Control Act (12 U.S.C. 1817(j)) and §

225.41 of the Board’s Regulation Y (12

CFR 225.41) to acquire a bank or bank

holding company. The factors that are

considered in acting on the notices are

set forth in paragraph 7 of the Act (12

U.S.C. 1817(j)(7)).

The notices are available for

immediate inspection at the Federal

Reserve Bank indicated. Once the

notices have been accepted for

processing, they will also be available

for inspection at the offices of the Board

of Governors. Interested persons may
5832 Federal Register / Vol. 62, No. 26 / Friday, February 7, 1997 / Notices

express their views in writing to the

Reserve Bank indicated for that notice

or to the offices of the Board of

Governors. Comments must be received

not later than February 21, 1997.

A. Federal Reserve Bank of Atlanta

(Lois Berthaume, Vice President) 104

Marietta Street, N.W., Atlanta, Georgia

30303-2713:

1. Eduardo Antonio Masferrer, Miami,

Florida; to acquire an additional 8.51

percent, for a total of 15.2 percent, of the

voting shares of Hamilton Bancorp, Inc.,

Miami, Florida, and thereby indirectly

acquire Hamilton Bank, N.A., Miami,

Florida.

Board of Governors of the Federal Reserve

System, February 3, 1997.

Jennifer J. Johnson,

Deputy Secretary of the Board.

[FR Doc. 97–3044 Filed 2-6-97; 8:45 am]

BILLING CODE 6210-01-F

Formations of, Acquisitions by, and

Mergers of Bank Holding Companies

The companies listed in this notice

have applied to the Board for approval,

pursuant to the Bank Holding Company

Act of 1956 (12 U.S.C. 1841 et seq.)

(BHC Act), Regulation Y (12 CFR Part

225), and all other applicable statutes

and regulations to become a bank

holding company and/or to acquire the

assets or the ownership of, control of, or

the power to vote shares of a bank or

bank holding company and all of the

banks and nonbanking companies

owned by the bank holding company,

including the companies listed below.

The applications listed below, as well

as other related filings required by the

Board, are available for immediate

inspection at the Federal Reserve Bank

indicated. Once the application has

been accepted for processing, it will also

be available for inspection at the offices

of the Board of Governors. Interested

persons may express their views in

writing on the standards enumerated in

the BHC Act (12 U.S.C. 1842(c)). If the

proposal also involves the acquisition of

a nonbanking company, the review also

includes whether the acquisition of the

nonbanking company complies with the

standards in section 4 of the BHC Act,

including whether the acquisition of the

nonbanking company can ‘‘reasonably

be expected to produce benefits to the

public, such as greater convenience,

increased competition, or gains in

efficiency, that outweigh possible

adverse effects, such as undue

concentration of resources, decreased or

unfair competition, conflicts of

interests, or unsound banking practices’’

(12 U.S.C. 1843). Unless

otherwise noted, nonbanking activities

will be conducted throughout the

United States.

Unless otherwise noted, comments

regarding each of these applications

must be received at the Reserve Bank

indicated or the offices of the Board of

Governors not later than March 3, 1997.

A. Federal Reserve Bank of New

York (Christopher J. McCurdy, Senior

Vice President) 33 Liberty Street, New

York, New York 10045-0001:

1. U.S. Trust Corporation, New York,

New York; to acquire 100 percent of the

voting shares of U.S. Trust Bank of

Connecticut, Stamford, Connecticut.

B. Federal Reserve Bank of

Philadelphia (Michael E. Collins, Senior

Vice President) 100 North 6th Street,

Philadelphia, Pennsylvania 19105-1521:

1. Keystone Financial Inc., Harrisburg,

Pennsylvania; to merge with Financial

Trust Corp., Carlisle, Pennsylvania, and

thereby acquire Financial Trust Co.,

Carlise, Pennsylvania; Chambersburg

Trust Co., Chambersburg, Pennsylvania;

First National Bank and Trust Co.,

Waynesboro, Pennsylvania; and

Washington County National Bank,

Williamsport, Maryland.

C. Federal Reserve Bank of Chicago

(James A. Bluemle, Vice President) 230

South LaSalle Street, Chicago, Illinois

60690-1413:

1. Blackhawk Bancorp, Inc., Beloit,

Wisconsin; to acquire 100 percent of the

voting shares of Rochelle Bancorp,

Rochelle, Illinois, and thereby indirectly

acquire Rochelle Savings Bank, S.B.,

Rochelle, Illinois.

In connection with this application,

Applicant also has applied to acquire

Midland Acceptance Corporation,

Rochelle, Illinois, and thereby enage in

making and servicing loans, pursuant to

§ 225.25(b)(1) of the Board’s Regulation

Y.

D. Federal Reserve Bank of San

Francisco (Kenneth R. Binning,

Director, Bank Holding Company) 101

Market Street, San Francisco, California

94105-1579:

1. U.S. Bancorp, Portland, Oregon; to

acquire 100 percent of the voting shares

of Business & Professional Bank,

Woodland, California.

Board of Governors of the Federal Reserve

System, February 3, 1997.

Jennifer J. Johnson,

Deputy Secretary of the Board.

[FR Doc. 97–3045 Filed 2-6-97; 8:45 am]

BILLING CODE 6210-01-F

Notice of Proposals To Engage in

Permissible Nonbanking Activities or

To Acquire Companies That are

Engaged in Permissible Nonbanking

Activities

The companies listed in this notice

have given notice under section 4 of the

Bank Holding Company Act (12 U.S.C.

1843) (BHC Act) and Regulation

Y, (12 CFR Part 225) to engage de novo,

or to acquire or control voting securities

or assets of a company that engages

either directly or through a subsidiary or

other company, in a nonbanking activity

that is listed in § 225.25 of Regulation

Y (12 CFR 225.25) or that the Board has

determined by Order to be closely

related to banking and permissible for

bank holding companies. Unless

otherwise noted, these activities will be

conducted throughout the United States.

Each notice is available for inspection

at the Federal Reserve Bank indicated.

Once the notice has been accepted for

processing, it will also be available for

inspection at the offices of the Board of

Governors. Interested persons may

express their views in writing on the

question whether the proposal complies

with the standards of section 4 of the

BHC Act, including whether

consummation of the proposal can

‘‘reasonably be expected to produce

benefits to the public, such as greater

convenience, increased competition, or

gains in efficiency, that outweigh

possible adverse effects, such as undue

concentration of resources, decreased or

unfair competition, conflicts of

interests, or unsound banking practices’’

(12 U.S.C. 1843). Any request for a

hearing on this question must be

accompanied by a statement of the

reasons a written presentation would

not suffice in lieu of a hearing,

identifying specifically any questions of

fact that are in dispute, summarizing the

evidence that would be presented at a

hearing, and indicating how the party

commenting would be aggrieved by

approval of the proposal.

Unless otherwise noted, comments

regarding the applications must be

received at the Reserve Bank indicated

or the offices of the Board of Governors

not later than February 21, 1997.

A. Federal Reserve Bank of

Minneapolis (Karen L. Grandstrand,

Vice President) 250 Marquette Avenue,

Minneapolis, Minnesota 55480-2171:

1. Farmers State Financial Corp.,

Victor, Montana; to engage de novo

through its subsidiary, Farmers State

Bank, FSB, Stevensville, Montana, in

operating a savings association,

pursuant to § 225.25(b)(9) of the Board’s

Regulation Y.