Section 3(a) of the Bank Holding Company Act of 1956, 12 U.S.C. § 1842(a), prohibits any company from acquiring control of a bank without prior approval by the Board of Governors of the Federal Reserve System (Board).1 Under § 3 (c)(1) of the Act, 12 U.S.C. § 1842(c)(1), the Board may not approve a transaction that would create a monopoly or further an attempt to monopolize the business of banking. In addition, it must disapprove a transaction that would generate anticompetitive effects not clearly outweighed by beneficial effects upon the bank's ability to serve the community. § 1842(c)(2). The final sentence of § 3(c) directs that

"[i]n every case, the Board shall take into consideration the financial and managerial resources and future prospects of the company or companies and the banks concerned, and the convenience and needs of the community to be served."2

The threshold question before us is whether this final sentence authorizes the Board to disapprove a transaction on grounds of financial unsoundness in the absence of any anticompetitive impact. If so, we must decide whether the Board can only exercise that authority when the transaction would cause or exacerbate the financial unsoundness of the holding company or a subsidiary bank.

* The First National Bank of Lincolnwood, Ill., is controlled by four individuals who hold 86% of its stock in a voting trust. These individuals organized respondent, the First Lincolnwood Corp., to serve as a bank holding company. They planned to exchange their shares in the bank for shares of respondent and, in addition, to have respondent assume a $3.7 million debt they had incurred in acquiring control of the bank.3 Respondent intended to use the dividends it would receive on the bank's shares to retire this debt over a 12-year period. Further, in order to augment the bank's capital, respondent would issue $1.5 million in capital notes and then use the proceeds to purchase new shares issued by the bank. The purpose of restructuring ownership interests in this fashion was to enable the holding company and the bank to file a consolidated tax return and thereby realize substantial tax savings.4

Because under the proposed transaction respondent would become a bank holding company, § 3(a) of the Act required that the proposal be submitted for the Board's approval. See n. 1, supra. Respondent filed its application with the Federal Reserve Bank of Chicago, as specified by Board regulations.5 The Chicago Reserve Bank concluded that the Lincolnwood bank's capital position—in essence, the difference between its assets and its liabilities—was inadequate and, under respondent's proposal, was unlikely to improve enough to attain the minimum level the Board had determined necessary to protect the bank's depositors.6 Nonetheless, the Lincolnwood bank's favorable earnings prospects and strong management led the Chicago Reserve Bank to recommend that the transaction be approved. The Comptroller of the Currency, however, independently reviewed respondent's application and concluded that it should be denied unless the bank's capital position was strengthened.

Respondent thereupon modified its proposal to accommodate the Comptroller's objections. Instead of issuing $1.5 million in capital notes and using the proceeds to purchase new bank stock, respondent proposed that the bank itself sell $1 million in long-term capital notes and $1.1 million in new common stock. In addition, respondent proposed a substantial reduction in the dividends to be paid on the bank stock. Upon review of the modified proposal, the Chicago Reserve Bank adhered to its original recommendation, finding the modification salutary insofar as it increased the total addition to the bank's capital, though "slightly unfavorable" insofar as it decreased the addition to the bank's equity capital from $1.5 to $1.1 million.7 The Comptroller considered the revised plan superior to the original proposal; therefore, he, too, recommended approval.

The Board staff independently evaluated the application and determined that the bank's projected capital position would fall below the Board's requirements.8 The staff also found that respondent had not established its ability to raise the additional capital without the individual shareholders' incurring more debt. Although acknowledging that the bank's management was capable, the staff concluded that

"it would appear desirable that Bank's overall capital position should be materially improved and that financing arrangements for the proposed capital injections into Bank [should] be made more definite." App. 54-55.

The Board concurred. It reviewed each of the elements enumerated in § 3(c), determining first that the proposal had no anticompetitive impact because the transaction merely transferred control of the bank "from individuals to a corporation owned by the same individuals." First Lincolnwood Corp., 62 Fed.Res.Bull. 153 (1976). Similarly, the Board found that the proposal would effect no significant changes in the services offered by the bank to customers, so factors relating to the convenience and needs of the community militated neither for nor against approval. Id., at 154. Thus, the financial and managerial considerations specified in the final sentence of § 3(c) were dispositive of respondent's application.

Addressing these considerations, the Board ruled that a bank holding company "should provide a source of financial and managerial strength to its subsidiary bank(s)." 62 Fed.Res.Bull., at 153. Here, the Board found, even if the bank's optimistic earnings projections were realized, respondent would lack the financial flexibility necessary both to service its debt and to maintain adequate capital at the bank. This, as well as the uncertainty regarding the proposed source of the capital injections, raised serious doubts as to respondent's financial ability to resolve unforeseen problems that could arise at the bank. The Board therefore concluded that

"it would not be in the public interest to approve the formation of a bank holding company with an initial debt structure that could result in the weakening of Bank's overall financial condition." Id., at 154.

A divided panel of the Court of Appeals for the Seventh Circuit affirmed, the majority finding substantial evidence to support the denial of respondent's application. 546 F.2d 718, 720-721 (1976).9 On rehearing en banc, the court unanimously set aside the Board's order. The court recognized that Congress had empowered the Board "to deny approval of a bank acquisition upon finding it not to be in the public interest for reasons other than an anticompetitive tendency." 560 F.2d 258, 261 (1977). However, in the court's view, § 3(c) of the Act did not permit the Board to withhold approval because of financial or managerial deficiencies unless those deficiencies were "caused or enhanced by the proposed transaction." 560 F.2d, at 262. This transaction, the court observed, merely reshuffled ownership interests in the bank. Apart from the proposed addition to capital and the tax advantage, which could accelerate reduction of the $3.7 million debt, respondent's proposal was without financial consequence. The court therefore held that the Board had overstepped its authority under § 3(c) in denying respondent's application. 560 F.2d, at 262-263.

We granted certiorari because of the impact of this holding on the Board's ability to fulfill its regulatory responsibilities under the Bank Holding Company Act. 434 U.S. 1061, 98 S.Ct. 1231, 55 L.Ed.2d 760 (1978). We conclude that the court below improperly restricted the Board's authority, and, accordingly, we reverse.

Respondent contends that the Court of Appeals misinterpreted the legislative history of the Bank Holding Company Act in sustaining the Board's authority to deny applications for holding-company status solely on grounds of financial or managerial unsoundness. As respondent reads the legislative history, Congress' only concern in passing the Act was with the anticompetitive potential in the concentration of banking resources and the combination of banking and nonbanking enterprises. See S.Rep.No.1095, 84th Cong., 1st Sess., 2 (1955), U.S.Code Cong. & Admin.News 1956, p. 2482; S.Rep.No.1179, 89th Cong., 2d Sess., 2 (1966), U.S.Code Cong. & Admin.News 1966, p. 2385. This focus on competitive considerations was reflected in the amendment of the Act in 1966 to conform § 3(c) with the standards enunciated in the Bank Merger Act amendments of the same year. See 80 Stat. 8, 12 U.S.C. § 1828(c)(5). The amended standards in the Bank Merger Act were intended to provide an exception to the antitrust laws for those bank mergers in which the benefits to the community outweighed the anticompetitive impact. See United States v. Third Nat. Bank, 390 U.S. 171, 88 S.Ct. 882, 19 L.Ed.2d 1015 (1968). By incorporating these same standards into the Bank Holding Company Act, respondent infers, Congress intended to authorize the Board to consider financial and managerial resources only as counterweights to a transaction's anticompetitive impact. We do not agree that the Board's authority under the Bank Holding Company Act is so limited.

The language of the statute supports the Board's interpretation of § 3(c) as an authorization to deny applications on grounds of financial and managerial unsoundness even in the absence of any anticompetitive impact. Section 3(c) directs the Board to consider the financial and managerial resources and future prospects of the applicants and banks concerned "[i]n every case," not just in cases in which the Board finds that the transaction will have an anticompetitive effect.

Moreover, the Board's interpretation of § 3(c) draws support from the legislative history. Section 19 of the original version of the Banking Act of 1933, 48 Stat. 186, authorized the Board to regulate the financial and managerial soundness of bank holding companies and their banking subsidiaries. Holding companies were required to obtain a permit from the Board before voting the shares of a national bank. Section 19 directed the Board to consider, in acting upon an application for a voting permit, the financial condition of the company and the general character of its management. 48 Stat. 186. In addition, an applicant had to submit to financial examination by the Board and to maintain a prescribed reserve of liquid assets. 48 Stat. 187. However, the voting-permit provisions applied only if the bank was a member of the Federal Reserve System and the holding company sought to exercise control by actually voting the bank shares. Because of this limitation, § 19 ultimately proved of little value in ensuring the financial responsibility of bank holding companies and their subsidiaries. See H.R.Rep.No.609, 84th Cong., 1st Sess., 4-5 (1955).

To ameliorate this deficiency, Congress expanded the Board's authority by enacting the Bank Holding Company Act of 1956. Section 3(c) of the Act enumerated five factors for the Board to consider whenever a company sought to acquire control of a bank:

"(1) the financial history and condition of the company or companies and the banks concerned; (2) their prospects; (3) the character of their management; (4) the convenience, needs, and welfare of the communities and the area concerned; and (5) whether or not the effect of such acquisition or merger or consolidation would be to expand the size or extent of the bank holding company system involved beyond limits consistent with adequate and sound banking, the public interest, and the preservation of competition in the field of banking." 70 Stat. 135.

The House Report on the Act noted the similarity between these factors and those specified in other banking statutes as the basis for admitting state banks to membership in the Federal Reserve System and for granting federal deposit-insurance coverage. H.R.Rep.No.609, supra, at 15. In both instances, the adequacy of the bank's capital is an important factor to be considered by the reviewing agency. See 12 U.S.C. §§ 329, 1816.10

In amending § 3(c) to conform to the language of the Bank Merger Act in 1966, see supra, at 243, Congress did not intend to confine the Board's consideration of financial and managerial soundness only to transactions that would have an anticompetitive impact. The sole reason given for the change was "the interests of uniform standards" in regulating both mergers and acquisitions in the banking industry. S.Rep.No.1179, supra, at 9. Regardless of whether Congress intended to limit the inquiry under the Bank Merger Act,11 there is no indication that it intended to incorporate that limitation into the Bank Holding Company Act. Indeed, in 1966 Congress repealed the voting-permit provisions of the 1933 Act, which had been left intact in 1956, because it believed that the Board retained authority under § 3(c), even as amended, to ensure the financial and managerial soundness of holding companies and their subsidiary banks. The Senate Committee on Banking and Currency stated:

"Since the Bank Holding Company Act makes it necessary for any bank holding company to obtain the Board's prior approval before acquiring the stock of any bank (whether member or nonmember) and since, in granting that approval, the Board must consider the financial condition and management of the holding company, the voting permit procedure . . . serves no substantial purpose." S.Rep.No.1179, supra, at 12, U.S.Code Cong. & Admin.News 1966, p. 2396.

In 1970, Congress amended the Bank Holding Company Act to extend its coverage to holding companies that controlled only one bank. 84 Stat. 1760, 12 U.S.C. § 1841(a). Previously, the Act had applied only to multibank holding companies. The principal purpose of this change was to prevent one-bank holding companies from entering businesses not related to banking. S.Rep.No.91-1084, pp. 2-4 (1970), U.S.Code Cong. & Admin.News 1970, p. 5519. Nothing in the legislative history of the 1970 amendments suggests that in extending the Act, Congress intended to depart from its prior understanding of the Board's authority or to establish a different rule for one-bank holding companies.12

Our conclusion as to the scope of the Board's authority is bolstered by reference to the principle that an agency's long-standing construction of its statutory mandate is entitled to great respect, "especially when Congress has refused to alter the administrative construction." Red Lion Broadcasting Co. v. FCC, 395 U.S. 367, 381, 89 S.Ct. 1794, 1802, 23 L.Ed.2d 371 (1969); Zemel v. Rusk, 381 U.S. 1, 11-12, 85 S.Ct. 1271, 1278-1279, 14 L.Ed.2d 179 (1965); Udall v. Tallman, 380 U.S. 1, 16, 85 S.Ct. 792, 801, 13 L.Ed.2d 616 (1965). The Board has regularly treated deficiencies in the financial and managerial resources of holding companies and their banking subsidiaries as sufficient grounds for denying an application. Clayton Bancshares Corp., 50 Fed.Res.Bull. 1261, 1264-1265 (1964); Mid-Continent Bancorporation, 52 Fed.Res.Bull. 198, 200-201 (1966); Midwest Bancorporation, Inc., 56 Fed.Res.Bull. 948, 950 (1970); Citizens Bancorp, 61 Fed.Res.Bull. 806 (1975); Bankshares of Hawley, Inc., 62 Fed.Res.Bull. 610 (1976); see 12 CFR § 265.2(f)(22)(vii) (1978). Moreover, Congress has been made aware of this practice,13 yet four times has "revisited the Act and left the practice untouched." Saxbe v. Bustos, 419 U.S. 65, 74, 95 S.Ct. 272, 279, 42 L.Ed.2d 231 (1974). See 80 Stat. 236; 84 Stat. 1760; 91 Stat.1388; 92 Stat. 3641.14 We therefore agree with the Court of Appeals that the Board can disapprove formation of a bank holding company solely on grounds of financial or managerial unsoundness.

While the Court of Appeals recognized the Board's authority to treat financial or managerial unsoundness as a dispositive consideration, it held that this authority was limited to instances in which the unsoundness was caused or exacerbated by the proposed transaction.15 The Court of Appeals rejected the Board's argument that permission to form a holding company is "a reward which it may withhold until the applicant's financial status fulfills the Board's standard of desirability." 560 F.2d, at 262. The legislative history, the court held, revealed nothing that would allow the Board to disapprove formation of a bank holding company where the transaction would not weaken a subsidiary bank's financial condition. In addition, the already extensive regulation of the financial integrity of banks by the Comptroller of the Currency and state regulatory agencies persuaded the court that Congress could not have intended to extend identical authority to the Federal Reserve Board. Id., at 262-263.

We perceive no basis for the limitation the Court of Appeals imposed. Certainly, it is not compelled by the language of the statute. By its terms, § 3(c) requires the Board to consider financial and managerial factors in "every case." Just as we observed earlier that this language encompasses cases in which the proposed transaction would have no anticompetitive effect, supra, at 243, so, too, it encompasses cases in which the transaction would not weaken the bank or the bank holding company. Indeed, the Court of Appeals' construction of the statute would require the Board to approve formation of a bank holding company with corrupt management simply because management would become no more corrupt by virtue of the transaction. We hesitate to adopt a construction that would yield such an anomalous result.

Furthermore, the legislative record does provide support for the Board's actions. In deliberations on the Bank Holding Company Act, see, e. g., H.R.Rep.No.609, 84th Cong., 1st Sess., 4-5 (1955); H.R.Rep.No.95-1383, p. 19 (1978), and in subsequent inquiries into banking regulation, see, e. g., Hearing on Problem Banks, supra, n. 6; Hearings on the Safe Banking Act of 1977, pts. 1-4, supra, n. 13, Congress has evinced substantial concern for the financial soundness of the banking system. And Congress has long regarded capital adequacy as a measure of bank safety. See, e. g., 12 U.S.C. § 329 (Federal Reserve Act), § 1816 (Federal Deposit Insurance Act); S.Rep.No.133, 63d Cong., 1st Sess., pt. 2, p. 11 (1913); S.Rep.No.1623, 82d Cong., 2d Sess., 2 (1952). To rule that the Board could not require applicants for holding-company status and their subsidiary banks to meet minimum capital-adequacy requirements would be inconsistent with this general legislative mandate.

Nor can we accept the conclusion that Congress intended to reserve questions of bank safety to the Comptroller or state agencies except where a transaction would harm the financial condition of an applicant or the bank. The history of the Bank Holding Company Act nowhere suggests that Congress sought to delineate such a jurisdictional boundary. Indeed, our decision in Whitney Nat. Bank v. Bank of New Orleans, 379 U.S. 411, 85 S.Ct. 551, 13 L.Ed.2d 386 (1965), indicates that the Board's jurisdiction is paramount. We ruled there that the Comptroller could not deny a new bank a license to do business—a decision normally within his competence, see 12 U.S.C. §§ 26, 27—once the Board approved a bank holding company transaction that entailed formation of the new bank. 379 U.S., at 419, 423, 85 S.Ct., at 557, 559, 13 L.Ed.2d 386. It follows that the Federal Reserve Board's actions here are not invalid merely because the powers exercised duplicate those of other regulators.

Again, our conclusion is influenced by the principle that courts should defer to an agency's construction of its own statutory mandate, Red Lion Broadcasting Co. v. FCC, 395 U.S., at 381, 89 S.Ct., at 1801; Commissioner v. Sternberger's Estate, 348 U.S. 187, 199, 75 S.Ct. 229, 235, 99 L.Ed. 246 (1955), particularly when that construction accords with well-established congressional goals. The Board has frequently reiterated that holding companies should be a source of strength to subsidiary financial institutions. See, e. g., Northern States Financial Corp., 58 Fed.Res.Bull. 827, 828 (1972); Citizens Bancorp, 61 Fed.Res.Bull. 806 (1975); Downs Bancshares, Inc., 61 Fed.Res.Bull. 673 (1975). It has used the substantial advantages of bank holding-company status to induce applicants to improve their own and their subsidiaries' capital positions. See P. Heller, Handbook of Federal Bank Holding Company Law 127, and n. 195 (1976); The Bank Holding Company—1973, pp. 35, 83 (R. Johnson ed. 1973).16 In fact, between 1970 and 1975, the Board convinced 397 applicants to provide additional capital totaling $788 million and indirectly prompted the infusion of even more capital. Hearings on Financial Institutions and the Nation's Economy, supra n. 13, at 2403 (testimony of Philip Coldwell, member of the Board of Governors of the Federal Reserve System). Congress has been apprised of this consistent administrative practice, ibid.; Compendium of Major Issues in Bank Regulation, supra n. 13, at 379, and has not undertaken to change it. Indeed, a Report of the Senate Committee on Banking, Housing, and Urban Affairs in 1977 echoed the exact language of the Board's standard. S.Rep.No.95-323, p. 11 ("Holding companies are supposed to be a source of strength to subsidiary financial institutions").17

We hold that the Board may deny applications for holding-company status solely on grounds of financial or managerial unsoundness, regardless of whether that unsoundness would be caused or exacerbated by the proposed transaction.18

Respondent contends that the Board's denial of its application was arbitrary and capricious. We have already determined that the Board's "source of strength" requirement is consistent with the language, purpose, and legislative history of the Bank Holding Company Act. Our only remaining inquiry is whether substantial evidence supports the Board's finding that respondent fell short of this standard. 12 U.S.C. § 1848.19

The Court of Appeals panel had "no difficulty" in finding substantial evidence to sustain the Board's decision, 546 F.2d, at 720, and respondent did not press this issue in its petition for rehearing en banc. We, too, find in this record more than the amount of evidence "a reasonable mind might accept as adequate to support [the Board's] conclusion." Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 217, 83 L.Ed. 126 (1938); accord, Richardson v. Perales, 402 U.S. 389, 401, 91 S.Ct. 1420, 1427, 28 L.Ed.2d 842 (1971); Consolo v. FMC, 383 U.S. 607, 619-620, 86 S.Ct. 1018, 1026-1027, 16 L.Ed.2d 131 (1966). The application failed to establish that respondent could raise the $2.1 million in additional capital in the manner proposed. Moreover, it revealed that even with this infusion, the bank's capital would have been well below the level the Board had determined necessary to sustain the financial soundness of the enterprise. Thus, the Board was entitled to conclude that respondent would not be a sufficient source of financial and managerial strength to its subsidiary bank. Having so determined, the Board was entitled to deny the application.20

We hold that the Board's actions were within the authority conferred by Congress and were supported by substantial evidence. Consequently, the judgment is

Reversed.

Mr. Justice STEVENS, with whom Mr. Justice REHNQUIST joins, dissenting.

This case involves a proposal to restructure the ownership of a relatively small bank in order to reduce its income taxes. From the standpoint of the bank's competitors, its creditors, its owners, and its customers, as well as the public at large, the proposed transaction is at worst completely harmless, and at best substantially beneficial.

The Federal Reserve Board nevertheless refused to approve the transaction, not because of any concern about adverse effects of the transaction itself, but rather to induce the owners of the bank to take action that the Board has no authority to require of bank owners generally. In the Board's view, its approval power is a sort of lever that it may use to bend the will of independent bank owners and managers. I share the opinion expressed by Chief Judge Fairchild for the unanimous Court of Appeals for the Seventh Circuit sitting en banc that the application of this kind of leverage has not been authorized by Congress.1

The normal reason for subjecting any type of transaction to advance administrative approval is a concern about the possible consequences of the transaction itself. I can think of no judicial precedent or statutory analog authorizing an agency to use approvals as an all-purpose tool to accomplish objects entirely unrelated to the approved transaction. Before concluding that Congress intended to pass such an unprecedented approval statute, therefore, I would insist upon a clear expression of that intent from Congress itself. Because the language, structure, and legislative history of § 3(c) of the Bank Holding Company Act of 1956, 12 U.S.C. § 1842(c), belie any such intent, I cannot accept the Board's interpretation.

Read in its entirety, the language of § 3(c) confines the Board's authority to the evaluation of the effects of proposed holding company transactions.2 Specifically, the statute commands the Board to disapprove any acquisition "which would result in a monopoly," or "whose effect " may be substantially to lessen competition, unless it finds that the "anticompetitiveeffects " are outweighed "by the probable effect of the transaction in meeting the convenience and needs of the community." Although the last sentence in § 3(c) does not also explicitly limit the Board's consideration to the financial and managerial "effects" of the proposed reorganization, when read in context its reference to "future prospects" surely reflects the same concern for the consequences of the transaction rather than pre-existing or unrelated conditions.3

The overall structure of the federal banking laws lends credence to this interpretation. It is not the Board but instead the Comptroller of the Currency that has day-to-day regulatory jurisdiction over existing financial and managerial conditions at national banks such as the one involved here.4 If the Board can employ its holding-company approval power as a lever for inducing banks to achieve more satisfactory financing, management, future prospects, and community service, it can indirectly exercise authority that Congress has denied it and given directly to another agency.5

The sparse legislative history cited by the Court on this point, ante, at 250, is of no help to the Board's position. It is true that Congress has been concerned with the "financial soundness" and "capital adequacy" of banks controlled by holding companies. But that concern is simply irrelevant to the issue whether Congress intended the Board to deny holding-company approval that would not adversely affect, but rather would enhance, the bank's financial soundness and capital adequacy.

The authority claimed by the Board is also illogical. If certain capital ratios are essential for sound banking operations, and if the Comptroller is unable to achieve them, then the Board should be given power to require them by a general rule or standard applicable to all banks. Haphazard enforcement of a policy against only those banks that seek approval of holding company status is a most unusual and disorderly way to administer any significant policy.

In the end, the Court's decision rests entirely on "the principle that courts should defer" to the administrative agency's own interpretation of its statutory authority. Ante, at 251. The Court assumes that the Board's asserted authority originated with the passage of the Bank Holding Company Act of 1956. Ante, at 244. Not until eight years later, however, did the Board purport to exercise that authority, and it did so without explaining the statutory basis for its actions. Clayton Bancshares Corp., 50 Fed.Res.Bull. 1261, 1264-1265 (1964); see opinion of the Court, ante, at 248. Such a belated and casual assertion of power by the Board, no matter how long it has persisted, hardly qualifies as the type of administrative policy that may stand in place of an expression of legislative intent. See SEC v. Sloan, 436 U.S. 103, 98 S.Ct. 1702, 56 L.Ed.2d 148 (overturning as beyond the authority of the SEC a policy followed by that agency for 34 years). See also Adamo Wrecking Co. v. United States, 434 U.S. 275, 287-289, and n. 5, 98 S.Ct. 566, 574, 54 L.Ed.2d 538. I would not allow this agency, no matter how well respected and how well motivated, to construe vague statutory language as conferring such wide-ranging power on itself. Like Chief Judge Fairchild and his colleagues, I "do not find this power or breadth of discretion in the statute." 560 F.2d 258, 262 (CA7 1977).6

I respectfully dissent.