1 The Commissioner's motion to strike the attachments to the amicus curiae brief of the

Consumer Bankers Association and Bankers Roundtable is granted. United States Court of Appeals,

Fifth Circuit.

No. 96-10818.

Catherine A. GHIGLIERI, in her official capacity as Texas Banking Commissioner, PlaintiffAppellee,

v.

Eugene A. LUDWIG, in his official capacity as United States Comptroller of the Currency;

Commercial National Bank of Texarkana, Texarkana, Texas, Defendants-Appellants.

Oct. 29, 1997.

Appeals from the United States District Court for the Northern District of Texas.

Before REAVLEY, JOLLY and BENAVIDES, Circuit Judges.

PER CURIAM:

The questions presented in t his appeal are whether a national bank that relocated its main

office across state lines before June 1, 1997, could retain its pre-existing branches in its former home

and whether it could establish a new branch at the site of its former main office. The district court

concluded that Comme r cial National Bank of Texarkana could do neither. In light of this court's

recent decision in Ghiglieri v. Sun World Nati onal Associat ion, 117 F.3d 309 (5th Cir.1997) and

Arkansas law, we vacate and remand for entry of judgment in favor of appellants. 1

I.

In 1994, Commercial National Bank of Texarkana ("CNB" or "the bank") applied to the

Office of the Comptroller of the Currency ("the Comptroller" or "t he OCC") to rel ocate i ts m ai n

offi ce fro m Texarkana, Arkansas to Texarkana, Texas. At that time, the bank also operated two

branch offices and an automated teller machine in Texarkana, Arkansas, and a third branch office in

Fouke, Arkansas. When the bank requested approval for the relocation of its main o ffice, it

simultaneously sought the Co mpt roller's authorization to establish a new branch at its soon-to-be

former main office in Texarkana, Arkansas. The Comptroller approved both applications over the2 The Arkansas State Bank Department was not a party to the district court proceedings nor is

it a party on appeal. objections of the Texas Banking Commissioner ("the Commissioner") and the Arkansas State Bank

Department. 2

The Commissioner brought suit against the Co mpt roller and CNB in federal district court,

seeking review of the Comptroller's decision and asking for declaratory and injunctive relief. All

parties filed motions for summary judgment. The Commissioner moved for summary judgment on

the grounds that (1) CNB could not relocate its main office across state lines, even if the move was

within the 30-mile limit established by 12 U.S.C. § 3 0(b); (2) procedural defects in CNB's

applications should have defeated their approval; (3) CNB's temporary main office was actually a

branch office; (4) CNB could not retain its branches after relocating its main office to Texas; and

(5) CNB co uld not create a new branch at its former main office in Arkansas. The district court

granted summary judgment to the Commissioner on the fourth and fift h grounds. The district court's

order set aside the Comptr o ller's decisions with respect to the retention of CNB's pre-existing

branches and its establishment of a new branch at the site of its former main office; enjoined CNB's

banking operations in the State of Texas; and enjoined t he Co mpt roller from approving similar

relocation applications.

II.

Whether a national bank that relocated its main office across state lines before June 1, 1997,

could retain its pre-existing branches in its former home state was resolved squarely by this court in

Ghiglieri v. Sun World, 117 F.3d at 313-15. In that case, we concluded that the National Bank Act,

12 U.S.C. § 21 et seq., is silent with respect to the retenti o n o f branches following a main office

relocation and that the Comptroller's interpretation of the statute to allow retention of pre-existing

branches was reasonable. Accordingly, under the Supreme Court's decision in C hevron, U.S.A., Inc.

v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984),

we deferred to the Compt ro ller's interpretation. We are bound by our holding in S un World.

Accordingly, CNB can relocate its main office from Texarkana, Arkansas to Texarkana, Texas andretain its pre-existing Arkansas branches, and the district court erred in concluding to the contrary.

III.

We next address the issue of whether CNB could establish its former main office as a new

branch. Section 36(c) governs the resolution of this issue. S ee 12 U.S.C. § 36(c); S un World, 117

F.3d at 315. Under that provision, a national bank can establish and operate a new branch "[w]ithin

the limits of the city, town or village in which said association is situated, if such establishment and

operati on are at the time expressly authorized to State banks by the law of the State in question." 12

U.S.C. § 36(c)(1). Under this court's analysis in S un World, CNB is situated in both Texas and

Arkansas, and the creation of a new branch in Texarkana, Arkansas is governed by the law applicable

to Arkansas state banks. 117 F.3d at 316 (citing S eattle Trust & Sav. Bank v. Bank of Calif., 492

F.2d 48 (9th Cir.1974)).

The district court concluded that CNB could not establish its former main office as a branch

office under Arkansas law. This conclusion was based in part on the premise that CNB was not

entitled to retain its pre-existing Arkansas branches after relocating its main office. Our decision in

Sun World established that that premise is faulty and that the bank can indeed retain its pre-existing

br anches. But that does not end the inquiry in the Comptroller's favor. We still must determine

whether Arkansas branching l aw wo uld allow a state bank in CNB's position to establish a new

branch in Texarkana, Arkansas.

The Comptroller concluded that two provisions of Arkansas law permitted the establishment

of CNB's former main office as a new branch. The first allows an Arkansas state bank to establish

a branch "anywher e wit hin the county in which the establishing bank's principal banking office is

located." A RK .C ODE A NN . § 23-32-1202(b)(1).

The Comptroller relied on the Third Circuit's reasoning in the Seattle Trust case to conclude

that the county of CNB's "principal banking office" for the purpose of Arkansas branching law was

Miller County, Arkansas, where CNB's former main office and pre-existing branches were located.

In Seattle Trust, the Third Circuit reviewed the Comptroller's construction of a Washington branching

statute that mirrors Section 23-32-1202(b)(1) of the Arkansas Code. 492 F.2d at 52. TheWashington statute restricted a state bank t o branching in "the city or town in which its principal

place of business is l ocated...." Id. The court concluded that a national bank's principal place of

business under this statute was Seattle, Washington, even though the bank's corporate headquarters

were in San Francisco, California. 492 F.2d at 52-53. The Third Circuit agreed with the Comptroller

that "principal place of business," as used in Washington banking law, should be construed to mean

"the principal place of business within the State of Washington." I d. at 52. As the S eattle Trust court

explained, "There is no such thing as a Washington state ban k with its principal place of business

outside Washington." I

d. at 52-53. The Comptroller in this case reasoned that there is no such thing

as an Arkansas bank with its principal banking office outside of Arkansas, and , accordingly, that

Miller County, Arkansas, where all CNB's facilities were located before the main office relocation,

must be the location of its principal banking office within Arkansas.

We need not, how ever, adopt the Third Circuit's analysis on this point because, as the

Comptroller concluded, the propriety of the conversion of CNB's former main office into a branch

office is answered plainly by Section 23-32-1202(b)(2) of the Arkansas Code, which provides:

A bank which relocates its principal banking office may continue to use its former principal

banking office location as a full service branch and customer-bank communication terminal

so long as the use as a banking facility is uninterrupted.

A RK .C ODE A NN . § 23-32-1202(b)(2). Because the Comptroller on March 8, 1995, simultaneously

allowed CNB to relocate its main office to Texarkana, Texas and to establish its former main office

in Arkansas as a branch, there is no question that the use o f t his o ffice as a banking facility was

uninterrupted. The district court should have upheld the Comptroller's approval of the establishment

of a new branch at the site of CNB's former main office based on Section 23-32-1202(b)(2).

IV.

Accordingly, we VACATE the decision of the district court and RE MAND to the di stri ct

court for entry of judgment in favor of the Comptroller and CNB.

REAVLEY, Circuit Judge, concurring:

I concur in the judgment because I accept the construction of 12 U.S.C. § 36(c) to permit the

establishment of branches within Arkansas when branches, though now not th e ho me o ffice, havebeen located there. The statute allows this "within the state in which said association is situated...."

A prior panel has agreed with the Ninth Circuit and the Com ptrol ler t hat this describes situated

branches as well as main office. I do not disagree and can read the statute to allow branches to be

retained where new branches could be established. My esteemed colleagues are in error, however,

when they say that § 36 is silent with respect to the retention of branches after relocation of the main

office. Section 36 begins: "The conditions upon which a national banking association may retain or

establish and operate a branch or branches are the following:" We are required to f i nd the

authorization in the language of § 36(c). Because I agree that we can, I concur.