Evening star., 1954-05-26
10 Million Cash
Effects Merger
Of Two Banks
Cotton of NBW
Elected President
Of Hamilton
By Donald B. HodIey

It took around SO million in
cold cash. but the way has been
cleared for merger of the Hamil-
ton National Bank into the
National Bank of Washington as
soon as the necessary paper work
can be completed.
This was learned today from
authoritative sources, who esti-
mated that an offer of $110 a
share from an unnamed client of
Johnston, Lemon & Co., brought
in around 10000 shares of the
total Hamilton stock of 100000
shares.
Deadline for the offer was 5
pm. yesterday. Early in March,
$4,000 shares of Hamilton stock
were reported to have found their
way into the same hands for $50
a share, for a total cost of $1.2
million.
Significantly, neither bank has
issued an announcement, but
Johnston, Lemon & Co. informed
newspapers yesterday that direc-
tors of Hamilton National Bank
has elected Barnum L. Cotton
president of that institution. He
has been president of the Ma
tional Bank of Washington.
Waller Becomes Chairman.
The announcement also said
that Wilmer j. Waller, formerly
Hamilton president, had been
elevated to board chairman and
that all other Hamilton officers
would remain unchanged.
1t said Hamilton directors had
accepted an invitation from the
American Security & Trust Co.
to rescind approval of the pro-
posed merger of those institu-
tionS.
However, the announcement
left unanswered the question as
to whether Mr.. Colton's election
would take effect some time
later or whether he would re-
linquish the presidency of Ma
tional Bank of Washington tenn
porarily until consolidation de-
tails are worked out.
He is prohibited by law from
serving as an officer OF director
of both institutions. He could
not be reached for comment
early today.
Merger to Take Weeks.
It is expected to take from four
to six weeks for the merger plans
to be worked out between Hamil-
ton and National. Both boards
of directors must act and spe-
cial meetings of stockholders
must be advertised. National is
the oldest bank in Washington.
Hamilton is the youngest.
The consolidation of the two
banks will create an institution
with $237 million of assets. It
will rank as the city's second
largest bank, next to Riggs Ma
tional, with around 1910 million
Of resources. It will outrank
American Security, formerly in
second place with $218 million.
The consolidation also will
bring together deposits aggre-
eating 1928 million and capital
funds of more than $12.5 mil
lion.
Former Hamilton Stockhold-
ers, the last of whom met the
deadline for the $11O a share
offer yesterday, were counting
their profits today. Many ac-
Quired their shares at only $25
a share back in 1888, and had a
profit of nearly $50 per cent.
- Doubles in Short Time.
At $25 a share, 10000 shares
would have cost only So million.
At $110 a share they brought
$8.8 million. The actual book
value of the Hamilton shares
was around 500 each and not
long ago they were selling as
low at $54.
Executives of other banks
shook their heads at the price
OF $110 a share and said it was
abnormally high. Some COM
mented that it took hard feel
ings and the beginnings of a
feud to push the price up that
high.
1t is known that the National
Bank, with large United Mine
Workers funds, as well as COM
mercial deposits, has long been
seeking more outlets to put
these funds to work.
For many months it sought
through banking channels to
gain approval for a branch on
K street. but it's efforts were op-
posed by officials of some other
banks.
The National Bank directors
authorized a letter to the board
of the Hamilton National Bank
on March 3 proposing consolida-
tion through an exchange of two
NBW shares for each Hamilton
share or $50 cash for each Ham
ilton share. This offer was re-
jected by the Hamilton board
and never submitted to stock
holders.
Rival Raises offsr.
A counter proposal to merge
Hamilton with American Secur-
ity & Trust Co. then appeared.
It also provided for two shares
of the new institution in ex-
change for each Hamilton share
but raised the cash offer to the
equivalent of $82 a share for
Hamilton. This proposal was
approved promptly by the boards
of both the Hamilton and
American Security.
On the following Monday,
Johnston, Lemon g. Co. an
nounced the offer of $110 a share
for Hamilton stock. There never
was much real doubt that at that
price the unnamed client would
get practically all Of the 100, 900
outstanding shares.
IT didn't takn American Sc.