(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;
4(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;
5(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 has 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;
6(7) the holding company would 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 section
225.15 of this subpart.
4-029.21
(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;
(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.
4-029.22
(c) Acknowledgment
of notice. Within seven 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 section 225.15 of this subpart.
