most part, and the credits were even amounts, representing Q but it clearly indicates that the account balance was increasing, so that it appears that there was a conscious decision by someone in the National Bank of Georgia to significantly increase the balances of BG at Manufacturers Hanover; is that correct? A. Well, only to the extent that this was taking the place of a previous banking relationship, and these exact same totals would undoubtedly have gone to this other account, had it continued active, so it was just a natural turn of events. Q Were you aware, in fact, that the balances were being shifted from one bank to Manufacturers Hanover? Q Did you discuss that with anyone at the Bank? A None other than when it was determined that we were have our main account in New York 17 going to do business That that would be the Bank through which we would send out clearings, rather than the other Bank. Q Was that decision, by any chance, influenced, as far as your own personal knowledge is concerned, by the fact that Mr. Lance was borrowing money from Manufacturers Hanover? A. Not that I was aware of. 25 Could you repeat, if you will, your explanation for why you believe the National Bank of Georgia transferred its PAGE 16 account from Citibank to Manufacturers Hanover "rust? А My recollection about the initiation of that change seems to me to sten from the fact that Mr. Lance, in his pre vious other banking connections, had had some business with Nanufacturers which he thought was more satisfactory than, the service we were getting from our then New York major Bank, 7 and felt that they could do a better job for us. That's my 333 BRANDENBURG & HASTY SCIENTIFIC REPORTING Did you ever hear anybody suggest, Mr. Dickson, that Mr. Lance was required to maintain a compensating balance of 20% of the amount of his loan at the Manufacturers Hanover? Did you ever evaluate the balances that NBC maintained at Manufacturers Hanover to assure yourself that they were reasonable, such that you would be effectively employing your funds? I don't recall that I made any deep analysis. I wast separated somewhat fror the lending function and the activities that went on there in the way of participations laid off, over 23 lines, and so forth, to the New York banks varied from time to 24 25 time, and as e rule when, of course, we laid off participations we had to provide certain compensating balances on behalf of PAGL 17 the Bank for those participations, and just as a general rule I had a list of what I called basic balances, and I got reports, 3 4 5 6 7 8 9 10 frequent reports, so that I could compare the basic balance which was considered appropriate, not only from our standpoint, but also from the standpoint of the other bank, to keep cur balance at what level it was supposed to be kept, and I would watch the actual collecting balance versus the so-called base balance and I'm sure this was one of those, and I don't re member what the figure was. He would never let it get too badlý out of line because we wanted to make the most usage of our moneys. Q Did you by chance ever receive from Manufacturers Hanover Trust Company a monthly balance analysis that they would produce on reflecting the cost from your account? A I can't recall any specific one that I received, hecause we did receive, from most of our correspondent banks from time to time, these analysis reports. Let me show you, if I may, CC-4, which is a Balance Analysis dated January, 1977, produced by the Manufacturers Hanover Trust Company. Do you recall ever seeing either that that type of document? Well, of course I have seen this type of document on various accounts. I don't recall ever having seen this particu 5 PAGE 18 (The document heretofore referred to was marked Exhibit CC-4 for identification.) BY MF. SERINO If I may just visit with you for a moment on that particular document, and take it through. - January, '77 account it indicates that the average gross BRANDENBURG & HASTY SCIENTIFIC REPORTING from that figure the costs for services, which are listed in the left-hand columns of that document, and comes up with - 17 out to an average collected balance of $968,054. 18 From that, Manufacturers then subtracts, does it not, the costs for var PAGE 19 1 2 Q Now if you will look on the richt-hand columns, it indicates account history, and has three columns; the date, 3 average gross balance, average collected balance, and a column 4 which reads "Available for loans and other services." understanding, Mr. Dickson, is "Available for loans and other 6 services" are those funds which are left after subtracting the 10 of those funds for investment purposes, or otherwise. = 12 4 Provided they did not furnish other services than those itemized on this statement. 14 15 16 17 18 19 20 21 BRANDENBURG & HASTY SCIENTIFIC REPORTING Now in evaluating, from the National Bank of Ceorgia's standpoint, would you be looking at that particular figure, "Available for loans and other services," to determine whether in fact you were putting too much money in Manufacturers which to begin to analyze the account. As to profitability Yes. Do you recall doing any of that evaluation |