WASHINGTON

THE FDIC had nearly $40 billion in reserves as of June 30 -- a record $4.5 billion more than required by law, the agency reported. Page 2

NATIONAL/GLOBAL

ZIONS AND FIRST SECURITY disclosed an overlooked incentive plan provision that will trigger an increase in charges related to their planned merger. Page 3

CHASE WILL OPEN full-service supermarket branches in central Texas. Five are slated to open in the next two months in Austin and San Antonio. Page 4

COMMUNITY/REGIONAL

BANCORP CONNECTICUT said it will sell the trust department of its Southington Savings Bank to Trust Company of Connecticut. Page 6

MARKETS

MANY STOCKS of smaller banks, beset with lower trading volume, are at the mercy of market demand for liquidity. Chittenden Corp. in Burlington, Vt., is a case in point. Page 22

THRIFT MERGERS and acquisitions this year have stalled, in part because sellers have been angling for last year's high prices in this year's down market. But that is changing, says Ben A. Plotkin, president of Ryan Beck. "Sellers are adjusting to lower valuations," he said. Page 22

INVESTMENT PRODUCTS

NET SALES of international and global mutual funds took a dive during July, as investors took $3.5 billion more out of the sector than they put in. Page 8

FIFTH THIRD of Cincinnati is introducing a unit investment trust with a portfolio of stocks from the technology, financial services, and health-care industries. Page 8

SMART CARDS

MONDEX CANADA said it has regrouped after an 18-month smart card pilot, and is applying what was learned to a new trial in the Sherbrooke, Quebec, area. Page 10

ACTIVCARD, a specialist in authentication technology with an emphasis on smart cards, has announced alliances that are likely to enhance its visibility as an enterprise security vendor. Page 10

ELECTRONIC COMMERCE Page 11

TECHNOLOGY

FIRST ECOM.COM, an Internet payment processor, is helping Asian banks prepare to do business over the Internet. Page 12

ON-LINE BANKING

THERE'S A BASIC FLAW in the belief that on-line banking is less expensive for banks than the traditional methods of account processing, a bank automation consultant writes. Page 13

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