WASHINGTON

Bank earnings from derivatives trading fell more than 10% in the third quarter to $1.73 billion, the OCC said. Page 2

Deposit insurance does not give banks a significant competitive advantage over their uninsured rivals, according to an OCC study. Page 3

COMMUNITY BANKING

Illinois community bankers took the state government to court over its decision to allow a Texas savings bank to branch north of Chicago. Page 6

CREDIT/DEBIT/ATMs

This year's edition of CardTech/SecurTech West in San Jose, Calif., which boasted speakers who made Silicon Valley famous, was tailored for techies. Page 7

MORTGAGES

Lenders are finding that the models they use for evaluating credit have not been effective in predicting the payment behavior of borrowers. Some say the surge in the number of first-time mortgage holders with low incomes and the heavy promotion of credit cards are changing the traditional formulas for judging credit. Some statistics even suggest homeownership is a negative factor. Page 10

The home equity industry is forging a link between mortgage lending and credit cards with a product that lets homeowners borrow up to 125% of their home's value. Page 11

Wall Street is embracing highly leveraged mortgages as one of the year's hottest products. But just how safe are these offerings for investors? Page 11

INVESTMENT PRODUCTS

INSURANCE: Selling fixed annuities has been one of the real success stories of bank investment programs, and many banks are now searching for ways to underwrite the investments. Page 12

An Allstate Life Insurance unit in Oregon is offering to run back-office operations to help support marketing efforts for bank insurance programs. Page 12

A former Fed researcher is telling investment managers to move past stereotypes of the emerging affluent, by examining what prospects actually need and developing more products to pitch to them. Page 13

REGIONAL BANKING

If NationsBank's buyout of Boatmen's Bancshares is any indication, industry consolidation is lining the pockets of banking's top executives. Page 14

Banc One moved a step closer to consolidating its bank charters, merging its 14 Wisconsin banks into one state-chartered bank in Milwaukee. Page 15

MARKET MONITOR

Bank stocks big and small gained ground in a generally upbeat trading session Monday, as NationsBank and Republic Bancorp won new "buy" ratings. Page 18

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