Tribune Nov 19-57 Up and Down the Street 3 Banks Expect Merger To Lift Loan Capacity By Robert W. Bernick Tribune Business Editor Loan limit and lending ability of First National Bank of Salt Lake City will be greatly increased as result of merger With Zion's Savings Bank & Trust Co. and Utah Savings and Trust Co., it was disclosed Monday. Copies of the merger agreement, which involves reorganization of the capital structure of ; First National ahd re-naming of the institution as Zions First National Bank, are now available ifor inspection of stockholders* at the various i banks. The merger is based on condition of the \ three banks as of April 30, 1957. Shareholders of the three banks will meet ! at varying times on the morning of Dec. 11 to ^approve action of the directors. Preliminary ap- Mr. Bernick proval of the mergers already has been gained Of the Comptroller of the Currency at Washington, D.C. It is hoped that final and formal approval will be obtained promptly after the stockholders meetings, so that Zions First National Bank will be fully operative at the beginning of 1958. Church of Jesus Christ of Latter-day Saints has majority interests in each of the three banks.' Under the merger agreement, First National Bank will contribute 47 per cent of the assets and earning power, Zion's Savings Bank, 42 per cent and Utah Savings, 11 per cent. The new Zions First National Bank will have an authorized capital of $2,550,000 with 255,000 shares outstanding of $10 "par Value stock. This compares with present capital of $750,000 made up of 30,000 shares of $25 par value stock. _ . Book Value of Assets Tallies to $11,895,275 Total book value of assets of the continuing bank (Zions First National Bank) will be $11,895,275 and the stock will have a book value of $46.65 a share, subject to adjustment for earnings since April 30, 1957, of the merging banks. As bank regulation relates the size of any single loan to the capital and surlus of the institution, the greater capital and surplus of the Zions First National Bank will place the institution in position to make correspondingly larger loans. The contributions of assets and capital of Zions Savings Bank and Utah Savings and Trust should also increase the overall lending power of Zions First National Bank, as compared with First National Bank as now constituted. Under the merger agreement and reorganization of First National, shareholders of the three banks would receive the new $10 par value stock of Zions First National on the following basis: First National Bank stockholders will receive 3.995 shares of Zions First National for each share held of First National, or a total of 119,850 shares of Zions stock. Zion's Savings Bank & Trust Co. stockholders will receive 3.57 shares of Zions First National Bank stock for each share held of Zior’s Savings, or total of 107,100 shares. Utah Savings & Trust Co. stockholders would receive 9.35 shares of Zions First National stock for each share held of Utah Savings, or total of 28,050 shares. Zion's Savings Bank & Trust has some 30,000 shares of $50 par value stock; First National of Salt Lake City, 30,000 shares of $25 par value stock, and Utah Savings & Trust, 3,000 shares of $100 par value stock. Note on Book Valuation of Stock It is stressed that book value of stock does not necessarily reflect current market values. A committee of seven, including two directors from each bank, and Dr. William F. Edwards, financial secretary of the LDS Church, worked out the details of the merger agreement. In arriving at ratios of exchange of shares, they considered: f(l) book values, (2) appraised values of assets of the banks, ,(3) relative earning power of the banks. The merger agreement furnishes the full information on the values of the stockholders equity in each of the banks. But it does not contain any information on total deposits or total resources of the Zions First National Bank. It is expected this deposit and resource information will be released at the time of the stockholders meetings. Analysis of the book values of the three institutions based on information' in the merger agreement discloses that stockholders of First National Bank, with assets of $5,088,553, have shares now equal to $169.62 each in terms of book value. The book value of their new shares in Zions First National will be equal to $186.37 a share. Stockholders of Zion's Savings Bank & Trust Co., with assets of $5,200,522, have present stock with book value of $173.35 a share. Book value of shares converted to Zions First National .Will be $166.54 a share. Stockholders of Utah Savings and Trust, with assets of $1,606,200 have stock at book value of $535.40 a share. Converted to Zions First National, book value will be $436.18 a share. It is believed that any decrease in the assets position of Zion's Savings and Utah Savings will be fully compensated for by the increased earning power of Zions First National Bank stock. With a larger issue outstanding of Zions First National stock, shareholders will be presented a greater "liquidity" and marketability. In case of Utah Savings and Trust, stock of that bank has not sold in recent years anywhere near its asset value, so far as can be determined from existing records. A part of the reorganization of First National Bank into Zions First National Bank involves an increase in the number of directors. There are now 15 directors of this bank. President McKay to Head Merged Board Chairman of the board of Zions First National Bank will be President David O. McKay of the LDS Church. Orval Adams, executive vice president of First National Bank of Salt Lake City, will be president. W. LaMar Webb, former senior vice president of Wachovia Bank & Trust Co., Winston-Salem, N.C., has returned to his native Utah to become a senior vice president in Zions First N tional. Wendell M. Smoot, executive vice president of Zions ings Bank & Trust Co., also will be a senior vice president Report on P