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6000 - Bank Holding Company Act
Subpart BAcquisition of Bank Securities or
Assets
§ 225.11 Transactions requiring Board approval.
The following transactions require the Board's prior approval under
section 3 of the Bank Holding
Company Act except as exempted under § 225.12 or as otherwise
covered by § 225.17 of this subpart:
(a) Formation of bank holding company. Any action that
causes a bank or other company to become a bank holding company.
(b) Acquisition of subsidiary bank. Any action that
causes a bank to become a subsidiary of a bank holding company.
(c) Acquisition of control of bank or bank holding company
securities.
(1) The acquisition by a bank holding company of direct or
indirect ownership or control of any voting securities of a bank or
bank holding company, if the acquisition results in the company's
control of more than 5 percent of the outstanding shares of any class
of voting securities of the bank or bank holding company.
(2) An acquisition includes the purchase of additional securities
through the exercise of preemptive rights, but does not include
securities received in a stock dividend or stock split that does not
alter the bank holding company's proportional share of any class of
voting securities.
(d) Acquisition of bank assets. The acquisition by a
bank holding company or by a subsidiary thereof (other than a bank) of
all or substantially all of the assets of a bank.
(e) Merger of bank holding companies. The merger or
consolidation of bank holding companies, including a merger through the
purchase of assets and assumption of liabilities.
(f) Transactions by foreign banking organization. Any
transaction described in paragraphs (a) through (e) of this section
by a foreign banking organization that involves the acquisition of an
interest in a U.S. bank or in a bank holding company for which
application would be required if the foreign banking organization were
a bank holding company.
[Codified to 12 C.F.R. § 225.11]
[Section 225.11 amended at 57 Fed. Reg. 13001, April 15,
1992; 58 Fed. Reg. 6362, January 28, 1993; 59 Fed. Reg. 54808, November
2, 1994; 62 Fed. Reg. 9324, February 28, 1997, effective April 21,
1997]
{{2-28-97 p.6093}}
§ 225.12 Transactions not requiring Board approval.
The following transactions do not require the Board's approval under
§ 225.11 of this subpart:
(a) Acquisition of securities in fiduciary
capacity. The acquisition by a bank or other company (other than
a trust that is a company) of control of voting securities of a bank or
bank holding company in good faith in a fiduciary capacity, unless:
(1) The acquiring bank or other company has sole discretionary
authority to vote the securities and retains this authority for more
than two years; or
(2) The acquisition is for the benefit of the acquiring bank or
other company, or its shareholders, employees, or subsidiaries.
(b) Acquisition of securities in satisfaction of debts
previously contracted. The acquisition by a bank or other company
of control of voting securities of a bank or bank holding company in
the regular course of securing or collecting a debt previously
contracted in good faith, if the acquiring bank or other company
divests the securities within two years of acquisition. The Board or
Reserve bank may grant requests for up to three one-year extensions.
(c) Acquisition of securities by a bank holding company with
majority control. The acquisition by a bank holding company of
additional voting securities of a bank or bank holding company if more
than 50 percent of the outstanding voting securities of the bank or
bank holding company is lawfully controlled by the acquiring bank
holding company prior to the acquisition.
(d) Acquisition involving bank mergers and internal corporate
reorganizations--(1) Transactions subject to Bank Merger
Act. The merger or consolidation of a subsidiary bank of a bank
holding company with another bank, or the purchase of assets by such a
subsidiary bank, or a similar transaction involving subsidiary banks of
a bank holding company, if the transaction requires the prior approval
of a federal supervisory agency under the Bank Merger Act
(12 U.S.C. 1828(c)). This
exception does not include:
(i) The merger of a nonsubsidiary bank and a nonoperating
subsidiary bank formed by a company for the purpose of acquiring the
nonsubsidiary bank; or
(ii) Any transaction requiring the Board's prior approval under
section 225.11(e) of this subpart.
The Board may require an application under this subpart if it
determines that the merger or consolidation would have a significant
adverse impact on the financial condition of the bank holding company
or otherwise requires approval under section 3 of the BHC Act.
(2) Certain acquisitions subject to the Bank Merger
Act. The acquisition by a bank holding company of shares of a
bank or company controlling a bank or merger of a company controlling a
bank with the bank holding company, if the transaction is part of the
merger or consolidation of the bank with a subsidiary bank (other than
a nonoperating subsidiary bank) of the acquiring bank holding company,
or is part of the purchase of substantially all of the assets of the
bank by a subsidiary bank (other than a nonoperating subsidiary bank)
of the acquiring bank holding company, and if:
(i) The bank merger, consolidation, or asset purchase occurs
simultaneously with the acquisition of the shares of the bank or bank
holding company or the merger of holding companies, and the bank is not
operated by the acquiring bank holding company as a separate entity
other than as the survivor of the merger, consolidation or asset
purchase;
(ii) The transaction requires the prior approval of a federal
supervisory agency under the Bank Merger Act (12 U.S.C. 1828(c));
(iii) The transaction does not involve the acquisition of any
nonbank company that would require prior approval under section 4 of
the BHC Act (12 U.S.C. 1843);
(iv) Both before and after the transaction, the acquiring bank
holding company meets the Board's Capital Adequacy Guidelines
(Appendixes A, B, C, D, and E of this part);
(v) At least 10 days prior to the transaction, the acquiring bank
holding company has provided to the Reserve Bank written notice of the
transaction that contains:
{{2-28-97 p.6094}}
(A) A copy of the filing made to the appropriate federal banking
agency under the Bank Merger Act; and
(B) A description of the holding company's involvement in the
transaction, the purchase price, and the source of funding for the
purchase price; and
(vi) Prior to expiration of the period provided in paragraph
(d)(2)(v) of this section, the Reserve Bank has not informed the bank
holding company that an application under § 225.11 is required.
(3) Internal corporate reorganizations. (i) Subject
to paragraph (d)(3)(ii) of this section, any of the following
transactions performed in the United States by a bank holding company:
(A) The merger of holding companies that are subsidiaries of the
bank holding company;
(B) The formation of a subsidiary holding
company; 1
(C) The transfer of control or ownership of a subsidiary bank or
a subsidiary holding company between one subsidiary holding company and
another subsidiary holding company or the bank holding company.
(ii) A transaction described in paragraph (d)(3)(i) of this
section qualifies for this exception if:
(A) The transaction represents solely a corporate reorganization
involving companies and insured depository institutions that, both
preceding and following the transaction, are lawfully controlled and
operated by the bank holding company;
(B) The transaction does not involve the acquisition of
additional voting shares of an insured depository institution that,
prior to the transaction, was less than majority owned by the bank
holding company;
(C) The bank holding company is not organized in mutual form; and
(D) Both before and after the transaction, the bank holding
company meets the Board's Capital Adequacy Guidelines (Appendixes A, B,
C, D, and E of this part).
(e) Holding securities in escrow. The holding of any
voting securities of a bank or bank holding company in an escrow
arrangement for the benefit of an applicant pending the Board's action
on an application for approval of the proposed acquisition, if title to
the securities and the voting rights remain with the seller and payment
for the securities has not been made to the seller.
(f) Acquisition of foreign banking organization. The
acquisition of a foreign banking organization where the foreign banking
organization does not directly or indirectly own or control a bank in
the United States, unless the acquisition is also by a foreign banking
organization and otherwise subject to § 225.11(f) of this subpart.
[Codified to 12 C.F.R. § 225.12]
[Section 225.12 amended at 57 Fed. Reg. 13001, April 15, 1992; 57
Fed. Reg. 28778, June 29, 1992; 58 Fed. Reg. 6363, January 28, 1993; 62
Fed. Reg. 9324, February 28, 1997, effective April 21,
1997]
§ 225.13 Factors considered in acting on bank acquisition
proposals.
(a) Factors requiring denial. As specified in section
3(c) of the BHC Act, the Board may not approve any application under
this subpart if:
(1) The transaction would result in a monopoly or would further
any combination or conspiracy to monopolize, or to attempt to
monopolize, the business of banking in any part of the United States;
(2) The effect of the transaction may be substantially to lessen
competition in any section of the country, tend to create a monopoly,
or in any other manner be in restraint of trade, unless the Board finds
that the transaction's anti-competitive effects are clearly outweighed
by its probable effect in meeting the convenience and needs of the
community;
{{10-31-07 p.6095}}
(3) The applicant has failed to provide the Board with adequate
assurances that it will make available such information on its
operations or activities, and the operations or activities of any
affiliate of the applicant, that the Board deems appropriate to
determine and enforce compliance with the BHC Act and other applicable
federal banking statutes, and any regulations thereunder; or
(4) In the case of an application involving a foreign banking
organization, the foreign banking organization is not subject to
comprehensive supervision or regulation on a consolidated basis by the
appropriate authorities in its home country, as provided in
§ 211.24(c)(1)(ii) of the Board's Regulation K
(12 CFR 211.24(c)(1)(ii)).
(b) Other factors. In deciding applications under this
subpart, the Board also considers the following factors with respect to
the applicant, its subsidiaries, any banks related to the applicant
through common ownership or management, and the bank or banks to be
acquired;
(1) Financial condition. Their financial condition and
future prospects, including whether current and projected capital
positions and levels of indebtedness conform to standards and policies
established by the Board.
(2) Managerial resources. The competence, experience,
and integrity of the officers, directors, and principal shareholders of
the applicant, its subsidiaries, and the banks and bank holding
companies concerned; their record of compliance with laws and
regulations; and the record of the applicant and its affiliates of
fulfilling any commitments to, and any conditions imposed by, the Board
in connection with prior applications.
(3) Convenience and needs of community. The
convenience and needs of the communities to be served, including the
record of performance under the Community Reinvestment Act of 1977 (12
U.S.C. 2901 et seq.) and regulations issued thereunder,
including the Board's Regulation BB (12 CFR part 228).
(c) Interstate transactions. The Board may approve any
application or notice under this subpart by a bank holding company to
acquire control of all or substantially all of the assets of a bank
located in a state other than the home state of the bank holding
company, without regard to whether the transaction is prohibited under
the law of any state, if the transaction complies with the requirements
of section 3(d) of the BHC Act (12
U.S.C. 1842(d)).
(d) Conditional approvals. The Board may impose
conditions on any approval, including conditions to address
competitive, financial, managerial, safety and soundness, convenience
and needs, compliance or other concerns, to ensure that approval is
consistent with the relevant statutory factors and other provisions of
the BHC Act.
[Codified to 12 C.F.R. § 225.13]
[Section 225.13 amended at 57 Fed. Reg. 13003, April 15, 1992; 58
Fed. Reg. 474, January 6, 1993, effective February 4, 1993; 62 Fed.
Reg. 9325 February 28, 1997, effective April 21,
1997]
§ 225.14 Expedited action for certain bank acquisitions by
well-run bank holding companies.
(a) Filing of notice--(1) Information required
and public notice. As an alternative to the procedure provided in
§ 225.15, a bank holding company that meets the requirements of
paragraph (c) of this section may satisfy the prior approval
requirements of § 225.11 in connection with the acquisition of
shares, assets or control of a bank, or a merger or consolidation
between bank holding companies, by providing the appropriate Reserve
Bank with a written notice containing the following:
(i) A certification that all of the criteria in paragraph (c) of
this section are met;
(ii) A description of the transaction that includes
identification of the companies and insured depository institutions
involved in the transaction 2
and identification of each banking market affected by the
transaction;
{{10-31-07 p.6096}}
(iii) A description of the effect of the transaction on the
convenience and needs of the communities to be served and of the
actions being taken by the bank holding company to improve the CRA
performance of any insured depository institution subsidiary that does
not have at least a satisfactory CRA performance rating at the time of
the transaction;
(iv) Evidence that notice of the proposal has been published in
accordance with § 225.16(b)(1);
(v)(A) If the bank holding company has consolidated assets of
$500 million or more, an abbreviated consolidated pro forma
balance sheet as of the most recent quarter showing credit and
debit adjustments that reflect the proposed transaction, consolidated
pro forma risk-based capital ratios for the acquiring bank
holding company as of the most recent quarter, and a description of the
purchase price and the terms and sources of funding for the
transaction;
(B) If the bank holding company has consolidated assets of less
than $500 million, a pro forma parent-only balance sheet as
of the most recent quarter showing credit and debit adjustments that
reflect the proposed transaction, and a description of the purchase
price, the terms and sources of funding for the transaction, and the
sources and schedule for retiring any debt incurred in the transaction;
(vi) If the bank holding company has consolidated assets of less
than $300 million, a list of and biographical information regarding any
directors or senior executive officers of the resulting bank holding
company that are not directors or senior executive officers of the
acquiring bank holding company or of a company or institution to be
acquired;
(vii) For each insured depository institution whose Tier 1
capital, total capital, total assets or risk-weighted assets change as
a result of the transaction, the total risk-weighted assets, total
assets, Tier 1 capital and total capital of the institution on a
pro forma basis; and
(viii) The market indexes for each relevant banking market
reflecting the pro forma effect of the transaction.
(2) Waiver of unnecessary information. The Reserve
Bank may reduce the information requirements in paragraph (a)(1)(v)
through (viii) of this section as appropriate.
(b)(1) Action on proposals under this section. The Board
or the appropriate Reserve Bank shall act on a proposal submitted under
this section or notify the bank holding company that the transaction is
subject to the procedure in § 225.15 within 5 business days after the
close of the public comment period. The Board and the Reserve Bank
shall not approve any proposal under this section prior to the third
business day following the close of the public comment period, unless
an emergency exists that requires expedited or immediate action. The
Board may extend the period for action under this section for up to 5
business days.
(2) Acceptance of notice in event expedited procedure not
available. In the event that the Board or the Reserve Bank
determines after the filing of a notice under this section that a bank
holding company may not use the procedure in this section and must file
an application under § 225.15, the application shall be deemed
accepted for purposes of § 225.15 as of the date that the notice was
filed under this section.
(c) Criteria for use of expedited procedure. The
procedure in this section is available only if:
(1) Well-capitalized organization--(i) Bank
holding company. Both at the time of and immediately after the
proposed transaction, the acquiring bank holding company is
well-capitalized;
(ii) Insured depository institutions. Both at the time
of and immediately after the proposed transaction:
(A) The lead insured depository institution of the acquiring bank
holding company is well-capitalized;
{{2-28-01 p.6097}}
(B) Well-capitalized insured depository institutions control at
least 80 percent of the total risk-weighted assets of insured
depository institutions controlled by the acquiring bank holding
company; and
(C) No insured depository institution controlled by the acquiring
bank holding company is undercapitalized;
(2) Well-managed organization. (i) Satisfactory
examination ratings. At the time of the transaction, the acquiring
bank holding company, its lead insured depository institution, and
insured depository institutions that control at least 80 percent of the
total risk-weighted assets of insured depository institutions
controlled by the holding company are well-managed and have received at
least a satisfactory rating for compliance at their most recent
examination if such rating was given;
(ii) No poorly managed institutions. No insured
depository institution controlled by the acquiring bank holding company
has received 1 of the 2 lowest composite ratings at the later of the
institution's most recent examination or subsequent review by the
appropriate federal banking agency for the institution;
(iii) Recently acquired institutions excluded. Any
insured depository institution that has been acquired by the bank
holding company during the 12-month period preceding the date on which
written notice is filed under paragraph (a) of this section may be
excluded for purposes of paragraph (c)(2)(ii) of this section if:
(A) The bank holding company has developed a plan acceptable to
the appropriate federal banking agency for the institution to restore
the capital and management of the institution; and
(B) All insured depository institutions excluded under this
paragraph represent, in the aggregate, less than 10 percent of the
aggregate total risk-weighted assets of all insured depository
institutions controlled by the bank holding company;
(3) Convenience and needs criteria--(i) Effect
on the community. The record indicates that the proposed
transaction would meet the convenience and needs of the community
standard in the BHC Act; and
(ii) Established CRA performance record. At the time
of the transaction, the lead insured depository institution of the
acquiring bank holding company and insured depository institutions that
control at least 80 percent of the total risk-weighted assets of
insured institutions controlled by the holding company have received a
satisfactory or better composite rating at the most recent examination
under the Community Reinvestment Act;
(4) Public comment. No comment that is timely and
substantive as provided in § 225.16 is received by the Board or the
appropriate Reserve Bank other than a comment that supports approval of
the proposal;
(5) Competitive criteria--(i) Competitive
screen. Without regard to any divestitures proposed by the
acquiring bank holding company, the acquisition does not cause:
(A) Insured depository institutions controlled by the acquiring
bank holding company to control in excess of 35 percent of market
deposits in any relevant banking market; or
(B) The Herfindahl-Hirschman index to increase by more than 200
points in any relevant banking market with a post-acquisition index of
at least 1800; and
(ii) Department of Justice. The Department of Justice
has not indicated to the Board that consummation of the transaction is
likely to have a significantly adverse effect on competition in any
relevant banking market;
(6) Size of acquisition--(i) In
general--(A) Limited Growth. Except as provided in
paragraph (c)(6)(ii) of this section, the sum of the aggregate
risk-weighted assets to be acquired in the proposal and the aggregate
risk-weighted assets acquired by the acquiring bank holding company in
all other qualifying transactions does not exceed 35 percent of the
consolidated risk-weighted assets of the acquiring bank holding
company. For purposes of this paragraph other qualifying
transactions means any transaction approved under this section or
§ 225.23 during the 12 months prior to filing the notice under this
section; and
(B) Individual size limitations. The total
risk-weighted assets to be acquired do not exceed $7.5
billion;
{{2-28-01 p.6098}}
(ii) Small bank holding companies. Paragraph
(c)(6)(i)(A) of this section shall not apply if, immediately following
consummation of the proposed transaction, the consolidated
risk-weighted assets of the acquiring bank holding company are less
than $300 million;
(7) Supervisory actions. During the 12-month period
ending on the date on which the bank holding company proposes to
consummate the proposed transaction, no formal administrative order,
including a written agreement, cease and desist order, capital
directive, prompt corrective action directive, asset maintenance
agreement, or other formal enforcement action, is or was outstanding
against the bank holding company or any insured depository institution
subsidiary of the holding company, and no formal administrative
enforcement proceeding involving any such enforcement action, order, or
directive is or was pending;
(8) Interstate acquisitions. Board-approval of the
transaction is not prohibited under section 3(d) of the BHC Act;
(9) Other supervisory considerations. Board approval
of the transaction is not prohibited under the informational
sufficiency or comprehensive home country supervision standards set
forth in section 3(c)(3) of the BHC Act; and
(10) Notification. The acquiring bank holding company
has not been notified by the Board, in its discretion, prior to the
expiration of the period in paragraph (b)(1) of this section that an
application under § 225.15 is required in order to permit closer
review of any financial, managerial, competitive, convenience and needs
or other matter related to the factors that must be considered under
this part.
(d) Comment by primary banking
supervisory--(1) Notice. Upon receipt of a notice
under this section, the appropriate Reserve Bank shall promptly furnish
notice of the proposal and a copy of the information filed pursuant to
paragraph (a) of this section to the primary banking supervisor of the
insured depository institutions to be acquired.
(2) Comment period. The primary banking supervisor
shall have 30 calendar days (or such shorter time as agreed to by the
primary banking supervisor) from the date of the letter giving notice
in which to submit its views and recommendations to the Board.
(3) Action subject to supervisor's comment. Action by
the Board or the Reserve Bank on a proposal under this section is
subject to the condition that the primary banking supervisor not
recommend in writing to the Board disapproval of the proposal prior to
the expiration of the comment period described in paragraph (d)(2) of
this section. In such event, any approval given under this section
shall be revoked and, if required by section 3(b) of the BHC Act, the
Board shall order a hearing on the proposal.
(4) Emergencies. Notwithstanding paragraphs (d)(2) and
(d)(3) of this section, the Board may provide the primary banking
supervisor with 10 calendar days' notice of a proposal under this
section if the Board finds that an emergency exists requiring
expeditious action, and may act during the notice period or without
providing notice to the primary banking supervisor if the Board finds
that it must act immediately to prevent probable failure.
(5) Primary banking supervisor. For purposes of this
section and § 225.15(b), the primary banking supervisor
for an institution is:
(i) The Office of the Comptroller of the Currency, in the case of
a national banking association or District bank;
(ii) The appropriate supervisory authority for the State in which
the bank is chartered, in the case of a State bank;
(iii) The Director of the Office of Thrift Supervision, in the
case of a savings association.
(e) Branches and agencies of foreign banking organizations.
For purposes of this section, a U.S. branch or agency of a foreign
banking organization shall be considered to be an insured depository
institution. A U.S. branch or agency of a foreign banking organization
shall be subject to paragraph (c)(3)(ii) of this section only to the
extent it is insured by the Federal Deposit Insurance Corporation in
accordance with section 6 of the International Banking Act of 1978
(12 U.S.C. 3104).
{{10-31-07 p.6099}}
[Codified to 12 C.F.R. § 225.14]
[Section 225.14 amended at 57 Fed. Reg. 41642, September 11, 1992,
effective October 13, 1992; 59 Fed. Reg. 54808, November 2, 1994; 62
Fed. Reg. 9325, February 28, 1997, effective April 21, 1997; 66 Fed.
Reg. 415, January 3, 2001, effective February 2, 2001; 71 Fed. Reg.
9902, February 28, 2006; effective March 30,
2006]
§ 225.15 Procedures for other bank acquisition proposals.
(a) Filing application. Except as provided in
§ 225.14, an application for the Board's prior approval under this
subpart shall be governed by the provisions of this section and shall
be filed with the appropriate Reserve Bank on the designated form.
(b) Notice to primary banking supervisor. Upon receipt
of an application under this subpart, the Reserve Bank shall promptly
furnish notice and a copy of the application to the primary banking
supervisor of each bank to be acquired. The primary supervisor shall
have 30 calendar days from the date of the letter giving notice in
which to submit its views and recommendations to the Board.
(c) Accepting application for processing. Within 7
calendar days after the Reserve Bank receives an application under this
section, the Reserve Bank shall accept it for processing as of the date
the application was filed or return the application if it is
substantially incomplete. Upon accepting an application, the Reserve
Bank shall immediately send copies to the Board. The Reserve Bank or
the Board may request additional information necessary to complete the
record of an application at any time after accepting the application
for processing.
(d) Action on applications--(1) Action under
delegated authority. The Reserve Bank shall approve an application
under this section within 30 calendar days after the acceptance date
for the application, unless the Reserve Bank, upon notice to the
applicant, refers the application to the Board for decision because
action under delegated authority is not appropriate.
(2) Board action. The Board shall act on an
application under this subpart that is referred to it for decision
within 60 calendar days after the acceptance date for the application,
unless the Board notifies the applicant that the 60-day period is being
extended for a specified period and states the reasons for the
extension. In no event may the extension exceed the 91-day period
provided in § 225.16(f). The Board may, at any time, request
additional information that it believes is necessary for its decision.
[Codified to 12 C.F.R. § 225.15]
[Section 225.15 added at 59 Fed. Reg. 54808, November 2, 1994;
amended at 62 Fed. Reg. 9327, February 28, 1997, effective April 21,
1997]
§ 225.16 Public notice, comments, hearings, and other provisions
governing applications and notices.
(a) In general. The provisions of this section apply to
all notices and applications filed under § 225.14 and § 225.15.
(b) Public notice--(1) Newspaper
publication--(i) Location of publication. In the case
of each notice or application submitted under § 225.14 or § 225.15,
the applicant shall publish a notice in a newspaper of general
circulation, in the form and at the locations specified in § 262.3 of
the Rules of Procedure (12 CFR 262.3);
(ii) Contents of notice. A newspaper notice under this
paragraph shall provide an opportunity for interested persons to
comment on the proposal for a period of at least 30 calendar days;
(iii) Timing of publication. Each newspaper notice
published in connection with a proposal under this paragraph shall be
published no more than 15 calendar days before and no later than 7
calendar days following the date that a notice or application is filed
with the appropriate Reserve Bank.
(2) Federal Register notice.
(i) Publication by Board. Upon receipt of a notice or
application under § 225.14 or § 225.15, the Board shall promptly
publish notice of the
{{10-31-07 p.6100}}proposal in the Federal Register
and shall provide an opportunity for interested persons to comment
on the proposal for a period of no more than 30 days;
(ii) Request for advance publication. A bank holding
company may request that, during the 15-day period prior to filing a
notice or application under § 225.14 or § 225.15, the Board publish
notice of a proposal in the Federal Register. A request for
advance Federal Register publication shall be made in
writing to the appropriate Reserve Bank and shall contain the
identifying information prescribed by the Board for Federal
Register publication;
(3) Waiver or shortening of notice. The Board may
waive or shorten the required notice periods under this section if the
Board determines that an emergency exists requiring expeditious action
on the proposal, or if the Board finds that immediate action is
necessary to prevent the probable failure of an insured depository
institution.
(c) Public comment--(1) Timely comments.
Interested persons may submit information and comments regarding a
proposal filed under this subpart. A comment shall be considered timely
for purposes of this subpart if the comment, together with all
supplemental information, is submitted in writing in accordance with
the Board's Rules of Procedure and received by the Board or the
appropriate Reserve Bank prior to the expiration of the latest public
comment period provided in paragraph (b) of this section.
(2) Extension of comment period--(i) In
general. The Board may, in its discretion, extend the public
comment period regarding any proposal submitted under this subpart.
(ii) Requests in connection with obtaining application or
notice. In the event that an interested person has requested a
copy of a notice or application submitted under this subpart, the Board
may, in its discretion and based on the facts and circumstances, grant
such person an extension of the comment period for up to 15 calendar
days.
(iii) Joint requests by interested person and acquiring
company. The Board will grant a joint request by an interested
person and the acquiring bank holding company for an extension of the
comment period for a reasonable period for a purpose related to the
statutory factors the Board must consider under this subpart.
(3) Substantive comment. A comment will be considered
substantive for purposes of this subpart unless it involves individual
complaints, or raises frivolous, previously-considered or wholly
unsubstantiated claims or irrelevant issues.
(d) Notice to Attorney General. The Board or Reserve
Bank shall immediately notify the United States Attorney General of
approval of any notice or application under § 225.14 or § 225.15.
(e) Hearings. As provided in section 3(b) of the BHC
Act, the Board shall order a hearing on any application or notice under
§ 225.15 if the Board receives from the primary supervisor of the
bank to be acquired, within the 30-day period specified in
§ 225.15(b), a written recommendation of disapproval of an
application. The Board may order a formal or informal hearing or other
proceeding on the application or notice, as provided in § 262.3(i)(2)
of the Board's Rules of Procedure. Any request for a hearing (other
than from the primary supervisor) shall comply with § 262.3(e) of the
Rules of Procedure (12 CFR 262.3(e)).
(f) Approval through failure to
act--(1) Ninety-one day rule. An application or notice
under § 225.14 or § 225.15 shall be deemed approved if the Board
fails to act on the application or notice within 91 calendar days after
the date of submission to the Board of the complete record on the
application. For this purpose, the Board acts when it issues an order
stating that the Board has approved or denied the application or
notice, reflecting the votes of the members of the Board, and
indicating that a statement of the reasons for the decision will follow
promptly.
(2) Complete record. For the purpose of computing the
commencement of the 91-day period, the record is complete on the latest
of:
(i) The date of receipt by the Board of an application or notice
that has been accepted by the Reserve Bank;
(ii) The last day provided in any notice for receipt of comments
and hearing requests on the application or notice;
{{10-31-07 p.6101}}
(iii) The date of receipt by the Board of the last relevant
material regarding the application or notice that is needed for the
Board's decision, if the material is received from a source outside of
the Federal Reserve System; or
(iv) The date of completion of any hearing or other proceeding.
(g) Exceptions to notice and hearing requirements.
(1) Probable bank failure. If the Board finds it must
act immediately on an application or notice in order to prevent the
probable failure of a bank or bank holding company, the Board may
modify or dispense with the notice and hearing requirements of this
section.
(2) Emergency. If the Board finds that, although
immediate action on an application or notice is not necessary, an
emergency exists requiring expeditious action, the Board shall provide
the primary supervisor 10 days to submit its recommendation. The Board
may act on such an application or notice without a hearing and may
modify or dispense with the other notice and hearing requirements of
this section.
(h) Waiting period. A transaction approved under
§ 225.14 or § 225.15 shall not be consummated until 30 days after
the date of approval of the application, except that a transaction may
be consummated:
(1) Immediately upon approval, if the Board has determined under
paragraph (g) of this section that the application or notice involves a
probable bank failure;
(2) On or after the 5th calendar day following the date of
approval, if the Board has determined under paragraph (g) of this
section that an emergency exists requiring expeditious action; or
(3) On or after the 15th calendar day following the date of
approval, if the Board has not received any adverse comments from the
United States Attorney General relating to the competitive factors and
the Attorney General has consented to the shorter waiting period.
[Codified to 12 C.F.R. § 225.16]
[Section 225.16 added at 62 Fed. Reg. 9327, February 28, 1997,
effective April 21, 1997]
§ 225.17 Notice procedure for one-bank holding company
formations.
(a) Transactions that qualify under this section. An
acquisition by a company of control of a bank may be consummated 30
days after providing notice to the appropriate Reserve Bank in
accordance with paragraph (b) of this section, provided that all of the
following conditions are met:
(1) The shareholder or shareholders who control at least 67
percent of the shares of the bank will control, immediately after the
reorganization, at least 67 percent of the shares of the holding
company in substantially the same proportion, except for changes in
shareholders' interests resulting from the exercise of dissenting
shareholders' rights under state or federal
law; 3
(2) No shareholder, or group of shareholders acting in concert,
will, following the reorganization, own or control 10 percent or more
of any class of voting shares of the bank holding company, unless that
shareholder or group of shareholders was authorized, after review under
the Change in Bank Control Act of 1978
(12 U.S.C. 1817(j)) by the
appropriate federal banking agency for the bank, to own or control 10
percent or more of any class of voting shares of the
bank; 4
{{10-31-07 p.6102}}
(3) The bank is adequately capitalized (as defined in section 38
of the Federal Deposit Insurance Act
(12 U.S.C. 1831o));
(4) The bank received at least a composite "satisfactory"
rating at its most recent examination, in the event that the bank was
examined;
(5) At the time of the reorganization, neither the bank nor any
of its officers, directors, or principal shareholders is involved in
any unresolved supervisory or enforcement matters with any appropriate
federal banking agency;
(6) The company demonstrates that any debt that it incurs at the
time of the reorganization, and the proposed means of retiring this
debt, will not place undue burden on the holding company or its
subsidiary on a pro forma
basis; 5
(7) The holding company will not, as a result of the
reorganization, acquire control of any additional bank or engage in any
activities other than those of managing and controlling banks; and
(8) During this period, neither the appropriate Reserve Bank nor
the Board objected to the proposal or required the filing of an
application under § 225.15 of this subpart.
(b) Contents of notice. A notice filed under this
paragraph shall include:
(1) Certification by the notificant's board of directors that the
requirements of 12 U.S.C.
1842(a)(C) and this section are met by the proposal;
(2) A list identifying all principal shareholders of the bank
prior to the reorganization and of the holding company following the
reorganization, and specifying the percentage of shares held by each
principal shareholder in the bank and proposed to be held in the new
holding company;
(3) A description of the resulting management of the proposed
bank holding company and its subsidiary bank, including:
(i) Biographical information regarding any senior officers and
directors of the resulting bank holding company who were not senior
officers or directors of the bank prior to the reorganization; and
(ii) A detailed history of the involvement of any officer,
director, or principal shareholder of the resulting bank holding
company in any administrative or criminal proceeding; and
(4) Pro forma financial statements for the holding
company, and a description of the amount, source, and terms of debt, if
any, that the bank holding company proposes to incur, and information
regarding the sources and timing for debt service and retirement.
(c) Acknowledgment of notice. Within 7 calendar days
following receipt of a notice under this section, the Reserve Bank
shall provide the notificant with a written acknowledgment of receipt
of the notice. This written acknowledgment shall indicate that the
transaction described in the notice may be consummated on the 30th
calendar day after the date of receipt of the notice if the Reserve
Bank or the Board has not objected to the proposal during that time.
(d) Application required upon objection. The Reserve
Bank or the Board may object to a proposal during the notice period by
providing the bank holding company with a written explanation of the
reasons for the objection. In such case, the bank holding company may
file an application for prior approval of the proposal pursuant to
§ 225.15 of this subpart.
[Codified to 12 C.F.R. § 225.17]
[Section 225.17 added at 62 Fed. Reg. 9328, February 28, 1997,
effective April 21, 1997; amended at 71 Fed. Reg. 9902, February 28,
2006, effective March 30, 2006]
1In the case of a transaction that results in the formation or
designation of a new bank holding company, the new bank holding company
must complete the registration requirements described in § 225.5. Go Back to Text
2If, in connection with a transaction under this subpart, any
person or group of persons proposes to acquire control of the acquiring
bank holding company for purposes of the Bank Control Act or
§ 225.41, the person or group of persons may fulfill the notice
requirements of the Bank Control Act and § 225.43 by providing, as
part of the submission by the acquiring bank holding company under this
subpart, identifying and biographical information required in paragraph
(6)(A) of the BankControl Act (12 U.S.C.
1817(j)(6)(A)), as well as any financial or other information
requested by the Reserve Bank under § 225.43. Go Back to Text
3A shareholder of a bank in reorganization will be considered
to have the same proportional interest in the holding company if the
shareholder interest increases, on a pro rata basis, as a
result of either the redemption of shares from dissenting shareholders
by the bank or bank holding company, or the acquisition of shares of
dissenting shareholders by the remaining shareholders. Go Back to Text
4This procedure is not available in cases in which the exercise
of dissenting shareholders' rights would cause a company that is not a
bank holding company (other than the company in formation) to be
required to register as a bank holding company. This procedure also is
not available for the formation of a bank holding company organized in
mutual form. Go Back to Text
5For a banking organization with consolidated assets, on a
pro forma basis, of less than $500 million (other than a
banking organization that will control a de novo bank), this
requirement is satisfied if the proposal complies with the Board's
Small Bank Holding Company Policy Statement (Appendix C of this
part). Go Back to Text
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