text: incidental to a financial activity. Thus, with the enactment of the Gramm-Leach-Bliley Act, banks, securities firms 
  and insurance companies find it easier to acquire or affiliate with each other and cross-sell financial products. The 
  act permits a single financial services organization to offer a more complete array of financial products and services 
  than historically was permitted. 
  
  A financial holding company is essentially a bank holding company with significantly expanded powers. Under 
  the Gramm-Leach-Bliley Act, among the activities that will be deemed “financial in nature” for financial holding 
  companies are, in addition to traditional lending activities, securities underwriting, dealing in or making a market in 
  securities, sponsoring mutual funds and investment companies, insurance underwriting and agency activities, 
  activities which the Federal Reserve Board determines to be closely related to banking, and certain merchant 
  banking activities. The Federal Reserve Board has proposed permitting a number of additional financial activities, 
  but we cannot predict whether any of these additional proposals will be adopted or the form any final rule will take. 
  
  We elected to become a financial holding company in September 2001. As a financial holding company, we 
  have very broad discretion to affiliate with securities firms and insurance companies, make merchant banking 
  investments, and engage in other activities that the Federal Reserve Board has deemed financial in nature. In order 
  to continue as a financial holding company, we must continue to be well-capitalized, well-managed and maintain 
  compliance with the Community Reinvestment Act. Depending on the types of financial activities that we may 
  engage in in the future, under Gramm-Leach-Bliley’s fractional regulation principles, we may become subject to 
  supervision by additional government agencies. The election to be treated as a financial holding company increases 
  our ability to offer financial products and services that historically we were either unable to provide or were only 
  able to provide on a limited basis. As a result, we will face increased competition in the markets for any new 
  financial products and services that we may offer. Likewise, an increased amount of consolidation among banks and 
  securities firms or banks and insurance firms could result in a growing number of large financial institutions that 
  could compete aggressively with us. 