on the Federal Peserve Bank, for $250,000, and it had to be 2 entered somewhere on the Bank's books, and that check was given 3 to somebody, possibly ever myself, and transmitted to the Bank BRANDENBURG & HASTY SCIENTIFIC REPORTING when they were there, since there is sore interim period, and not recorded on their books until some days later. ? Is that the normal way of opening an account, through check, or do you sometimes wire a transfer? What is the normal way of doing it? A Of the number of accounts that I have handled over the years, it is more common to send a check for the initial deposit, just to establish the account, and then, of course, wire transfers may be coming along later to transfer balances from other banks, and then of course the usual transactions flow through the channels. 2 Mr. Dickson, would it be normal also for the account 17 to be opened, and let's assume the account was opened on 18 April 29, 1975. Assume also that you mailed a check on that A I didn't necessarily assure that I mailed a check, but I said it might have been that way. Right. Would it be normal to do that, prior to the approval such as this in CC-3? It would not be uncommon. Did you ever become aware, during the period April of 3 4 5 6 7 8 9 10 11 12 14 15 16 BRANDENBURG & HASTY SCIENTIFIC REPORTING 1975 that Mr. Lance was negotiating to purchase stock; a large block of stock; in National Bank of Georgia? There was a period along about that time when it was contemplated that the Bank Holding Company laws of the State of Georgia might be changed, and that the National Bank of Georgia would be estopped, you might say, from participating in the Holding Company because of its having a majority stock ownership; in excess of 25%, as I recall; and some overtures were made, discussions had with the representatives of Fina rial General Bancshares, which was our majority stockholder; 60%; to see if they would agree to sell down below 25% so that we might make participate in the possible forthcoming Bank Holding Company arrangements; change in the law; and I remember that there were some discussions of that. And then at some point it became apparent, as I recall sort of out of the blue, Financial General volunteered that they would entertain an 17 offer for all of their stock at something over $7 million, as I -- 18 recall the figure was, and that I think what their reasons were, but I think they had some heavy debts and they would just as soon shed some of their outlying units, such as ours, and concentrate in their home area in Virginia. And I can't recall if I knew that Mr. Lance was personally in volved except as a very interested party in the Bank's progress. Were you ever informed, Mr. Dickson, that the correspondent relationship being established by National Bank of PAGE 12 1 Georgia at Manufacturers Hanover was to be, in any way, asso- 2 ciated with the fact that Mr. Lance was borrowing money from A I don't recall any such. Do you recall any discussion at any of these, either the Executive Committee meeting, the one I have shown you; or at any subsequent meetings where Mr. Lance informed the Board that he was borrowing from MR. SERINO: Let me strike that question. BY MR. SERINO: Q Do you have any recollection, Mr. Dickson, that at borrowing from Manufacturers Hanover? A. No, sir; I don't recall that as having been stated. 18 add something else to the last question. THE WITNESS: What was that? That was in respect MR. SERINO: Set me rephrase the question. I think the questions was: Q BY MF.. SERINO: Did Mr. Lance indicate to anybody at the May Sch 4 (Continuing) --May 12th Executive Committee meeting, that he was horrowing money from Nanufacturers Hanover? but I don't remember that it was at any thinking that at some point along the line I was aware of it, 8 if any, that it was made avere I believe the first I knew that he was borrowing the money was just when the thing was 9 10 there to be closed. The various Directors were offered oppor his financial arrangements were until it came down to the wire. For your information, Mr. Dickson, I think we have a form being submitted to the Executive Committee on July 7, 1975 by Mr. Lance reflecting that he had borrowed on June 30, 18 17 19 A. Would that have been your first knowledge of that? Well, I was involved in getting the paperwork, and that sort of thing, in the Board room the day that the trans 21 action was closed, and trying to see that the shares subscribed 22 for added up to those available, and that tyne thing, so and 23 the Manufacturers, I was aware, too in fact I think I did I had some of the telephone conversation telling Manufacturers Hanover that certain shares had been issued in the name of Lance 2 and Lebelle, I believe; both; and that they were there and they were being transmitted to them as collateral for the loan, and 3 4 they could close the loan, and to make a wire transfer to 5 6 So that was about the extent of my acquaintance with it, and it was just about down to the wire at that point. In fact it was the day 7 8 9 10 11 12 14 15 16 17 SCIENTIFIC REPORTING BRANDENBURG & HASTY · of the closing. I may have been aware some days before, but I wasn't, you know I just wasn't in on the deal, so to speak. Q Do you have any recollection of how the figure $250,000 to be deposited at Manufacturers Hanover was arrived at? A I don't remember precisely. More than likely I asked! Mr. Lance how much he wanted to start it with. ile probably 2 The records, if you look at CC-1, indicate that the accounts grew significantly in balances and as of June 27, 1975 in fact, the balance was $931,859.79. Do you have any idea 18 what caused this increase in the size of that particular this point, not having had any opportunity to check the records 22 - that right as of tay 30th, or at some point there 23 24 near there, and immediately, June 5, 6 and so on, that we started transmitting cash letters, and of course drawing down balances. The debito to the account were odd amounts, for the |