11 BY MR. SERINO: The function of the money committee is to -- correct me if I am wrong - 4 but is to assure that the bank uses its dollars and obtains the best return on its dollars, is that So that the evaluation of a particular loan by the money committee would depend significantly on the rate of return that it is receiving, is that correct, that the bank 9 Significantly, was that the word you used? You said it depends significantly on it? 16 Now, when you have discussions among your group in the National Division concerning loans, do you prepare memo I draw your attention to the spring of 1975, and ask you if you recall the first contact you had concerning a loan being made to Mr. Bert Lance. Do you have any recollection 21 of that particular loan, and when you first became aware of 22 it? 23 24 A I was out of the bank when Mr. Lance originally came in to discuss the loan. I imagine I was on a business 1 12 trip, I am quite sure that I was. My first knowledge of it was upon returning from the trip, and being updated on those activities, which transpired in my absence, which involved my territory. MR. SERINO: I show you a document which we wilf mark C of C Number 2, dated April 16, 1975, and ask you if you can identify that particular document. (The document referred to was marked for identification as C of C Exhibit No. 2.) THE WITNESS: Yes, this is the memo that was written by Tom Gerwin, discussing the original visits by Mr. Bert Lance, and Mr. King Cleveland. BY MR. SERINO: 14 Q What does that document' reflect as far as the dates 2 3 4 13 Q You indicated that you were out of town at the time of that particular visit? A That is correct. Would you have been present at that particular meet 9 10 11 12 13 14 15 April 16, What was the purpose of that particular meeting on 1975? Α The purpose was to discuss Mr. Lance's interest in our making a loan to him in the range of $2.253 million to $3.25 million for the purpose of purchasing up to approximately 180,000 shares of the National Bank of Georgia. Q who would be present at those meetings from the National Division as a normal course of bank business? A As a matter of course, if a customer comes in to dist cuss a ban request, the District head would be present. That is Mr. Brougham. Tom Gerwin very likely would be present. He is functioning as Assistant District Head, and was at this time. I take that back. Mr. Gerwin is presently Assistant District Head. At the time, he may have been head of the Florida Unit while I was head of the other three states that I mentioned. In my absence, he attended the meeting. I am not really sure of the chronology whether or not I was Assistant 1 14 District Head at that time or just since I was absent he Who was the Assistant District Head at that time? 4 5 6 7 8 9 10 11 12 13 A There was not. It is a new development in the system, and I am not sure it had taken place by that date. I don' believe it had. All right. So if there is an Assistant District Head, it would be appropriate for that person to be present. Then whatever members of the unit that is responsible for the state from which the loan would be coming. Q You were not present at that particular meeting, howt ever, is that correct? 14 Do you have any independent recollection of that meeting of April 16, 1975, from information you received sub Q Can you relate briefly the contents of that memo and your knowledge, where you learned the information concerning that particular meeting? 6 In paragraph - 7 if you look on the second page, the third paragraph from the bottom, there is a statement that Mr. 8 Brougham explained to Mr. Lance our policy of not lending 9 10 against more than 10 percent of the bank stock, and also our policy of not doing acquisition loans. 11 Could you explain for us what that policy is, the A BY MR. SERINO: Or was at that time. Well, as stated here, any decision on our bank's part to make an acquisition loan or to land against more than 10 percent of the bank stock is what we consider a policy loan which means it has to be approved by the senior lending author ity of the bank. MR. HEINMANN: Who is that senior lending authority? THE WITNESS: In April 1957, it was Mr. Woodruff, the Vice Chairman. 24 Q BY MR. SERINO: This loan qualified for his approval because of that |