FINANCE: NANCY BUSH, an analyst at Brown Brothers, Harriman & Co., removed her "trading buy" recommendation from the shares of NationsBank Corp. The stock remains attractive on a valuation basis, she said, but the superregional company had reached her price target. Page 24 FEDERAL RESERVE data in a newly released analysis show banks are losing capacity to fund loan growth with deposits, suggesting that many institutions must go to the capital markets to fund double-digit loan growth. Page 24 COMMUNITY BANKING: NEW JERSEY community banks are battling bills supported by the governor that would add millions of dollars to state taxes on their investment portfolios and let out-of-state banks branch into the state. Page 6 THOUGH TEXAS community banks are coming off two very profitable years, a new report suggests eroding net interest margins, credit union strength, and traditionally weak efficiency ratios will force boards of directors to take a hard look at their core business and likely seek mergers. Page 6 COMPLIANCE: THREE NIGHTS a week in the spring and fall, the Bedford-Stuyvesant branch of Roosevelt Savings Bank is transformed into a home repair workshop in a program sponsored by the bank and a neighborhood group. Page 8 INTERNAL REVENUE Service rules on debt-discharge reporting are expected to be adopted and published by July 1 and to take effect in January. Page 9 MORTGAGES: HOME SAVINGS of America and California Federal Bank are among the big California thrifts that have recently turned to home equity lending to fill in for scarce mortgage refinancings. Page 10 THREE DOZEN class-action lawsuits have been filed against lenders over alleged failures to disclose when mortgage insurance is no longer required. Page 11 INVESTMENT PRODUCTS: FIRST UNION has made a strategic alliance with the Legend Group to help market its Evergreen family of funds to public-sector employees. Page 12 TO STRENGTHEN its sales through bank trust departments, T. Rowe Price Associates, a leading no-load mutual fund company, has joined a computer network designed to help simplify customer record keeping. Page 12 TECHNOLOGY: AFTER CITICORP's decision last week to drop most fees for retail electronic transactions, industry observers said others, especially big New York banks, would soon have to follow suit. Page 16 A RECENT HOME banking conference reignited debates over banks' partnering with potential rivals and the merits of various delivery methods. Page 16

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