Four months after saying that it would switch to a state charter, Trustmark National Bank of Jackson, Miss., has decided to keep the Office of the Comptroller of the Currency as its regulator.
Richard G. Hickson, the president and chief executive of the $8.2 billion-asset Trustmark Corp., said the board reversed its decision because it believes the national charter is stronger for banks that operate in multiple states. He pointed out that several large banks with state charters, including J.P. Morgan Chase & Co. and HSBC Bank USA, have recently switched or announced plans to do so.
“We have moved our franchise into Texas and have a strategic goal of moving into higher-growth markets, and we feel there is strength in the national charter as we operate a multistate company,” Mr. Hickson said in an interview Friday.
Trustmark entered Texas in March by buying nearly all the assets of the $210 million-asset Allied Bank of Houston. A year ago it entered Florida by acquiring branches from the $1.2 billion-asset Banc Corp. of Birmingham, Ala.
Mr. Hickson would not go into detail about what aspects of the national charter were more favorable than the Mississippi state charter, except to say that the national charter has a more “holistic” appeal.
Howard Cayne, a partner in the Washington law firm of Arnold & Porter LLP, said the national charter is more attractive because it lets banks operate in multiple states without having to sort out different laws.
“In order to operate efficiently on a national basis, a bank needs certainty and consistency with respect to regulatory requirements,” Mr. Cayne said. The OCC’s recent court victories on preempting state law have only made the case for a national charter stronger, he said.
J.P Morgan Chase announced in July that it would switch from a New York state charter to a national charter.
The $100 billion-asset HSBC recently changed to a national charter. And Harris Bank, the $54 billion-asset Chicago unit of Bank of Montreal, announced in June that it would consolidate its 28 charters, including 17 state ones, into a single national charter.
Trustmark had originally said it would switch to a state charter because it wanted a regulator that knows the marketplace and was more accessible. Switching would also have saved it about $300,000.
Backing out of a change is extremely rare, according to the OCC. The only other large bank to do so in recent years was National Commerce Financial Corp. In February 2000, two weeks after announcing it would switch to a state charter, the Memphis company said a visit from Comptroller of the Currency John D. Hawke convinced it that it should remain a national bank. (National Commerce has a deal pending to sell itself to SunTrust Banks Inc. of Atlanta).
An OCC spokesman said it did not talk with Trustmark and did not influence its decision to remain a national bank.
But John W. Ryan, the executive vice president of the Conference of State Bank Supervisors, said the OCC is “extremely aggressive” about promoting the national charter. “They very heavily market the charter to the largest institutions. They cherry pick.”
