Washington Mutual Savings Bank and Grays Harbor Savings & Loan Association v. Federal Deposit Insurance Corporation

The Federal Deposit Insurance Corporation (FDIC) appeals from an order enjoining it from withholding its approval of a bank merger. We affirm.

I. THE CASE.

Washington Mutual Savings Bank is the largest thrift institution in the State of Washington holding $744 million or 22.9% of the deposits as of June 30, 1970. Washington Mutual has its main offices in Seattle and twenty-two branches throughout the state, principally in the Seattle area.

Grays Harbor Savings & Loan Association is one of the smallest thrift institutions in Washington holding $4.7 million or 0.15% of the deposits. Grays Harbor is the fourth largest of five thrift institutions in Aberdeen, Washington and is located fifty miles from Washington Mutual’s nearest branch. Because of a management succession problem, Grays Harbor sought out Washington Mutual as a merger partner in 1970. After entering into a merger agreement both banks sought approval from state and federal banking authorities.

Washington law requires the approval of the State Supervisor of Banking. 12 U.S.C. § 1828 (c)(2)(C) requires the written approval of the FDIC when the acquiring bank is a nonmember insured bank. Federal law also requires the…