Bank Merger Policy and the Third National Bank Decision

As measured by regional standards, banking in Tennessee's capital for years centered around three very large institutions and one of middle size. The latter, Nashville Bank and Trust Company(hereinafter Nashville Bank), merged into Third National Bank (the second largest bank in the area) in August, 1964, after the Justice Department failed to secure a preliminary injunction blocking the merger. This left Davidson County (the county in which Nashville is located) with seven banks, four of which were quite small. Nashville Bank was less than one-fourth the size of third-ranking Commerce Union Bank, but almost seven times as large as the fifth-ranking bank.

As the second largest state-regulated bank in Tennessee,Nashville Bank was an institution of substantial size. The two largest banks in Davidson County in the decade preceding the litigated merger had over 70 per cent of both the resources and demand deposits owned by individuals, partnerships and corporations, while the top three banks had over 90 per cent of the assets and demand deposits of the Davidson County market.