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Merger Of Savings And Loan Association Or Savings Bank Into A Savings And Loan Association

Please refer to the Department's Application Fee Schedule to determine the proper fee for the application being filed.


UNOFFICIAL COPY: Supervisory Procedure SL 110

Sec.

110.1 General Information.
110.2 Information Required In The Application.
110.3 General Information.
110.4 Additional Documents.
110.5 Confidential Information.

History: Procedure filed Aug. 21, 1969; amds. filed: April 28, 1971; Nov. 29, 1977; Feb. 23, 1984 eff. Feb. 23, 1984. Amended 110.2

SL 110 - § 110.1 -- General Information.

(a) The instructions set forth in this Procedure shall apply to a merger proposed pursuant to Banking Law, section 600(3) and (4), where the surviving institution is a savings and loan association.

(b) A separate application shall be filed with respect to each merger for which the approval of the Superintendent is sought and six copies thereof, together with all exhibits thereto, including two executed copies of the exhibits referred to in section 110.3(a)-(c) of this Procedure, shall be filed with the Superintendent of Financial Services, One State Street, New York, N.Y. 1000]. The application shall contain the information specified in sections 110.2 and 110.3 of this Procedure and shall be accompanied by a check for payable to the order of the "Superintendent of Financial Services of the State of New York". Inquiries concerning the preparation of the application should be addressed to the Superintendent.

(c) Before the application for the Superintendent's approval is submitted, the following approvals shall be obtained:

(1) the plan of merger shall be approved, in the manner prescribed by Banking Law, section 601(3), by the board of directors of each savings and loan association and the board of trustees of each savings bank which is a party to the merger; and

(2) the board of trustees of each such savings bank shall approve, in the manner prescribed by Banking Law, section 277, the discontinuance of a life insurance department operated by such savings bank pursuant to article VI-A of the Banking Law.

(d) Approval by the Superintendent will be conditioned in all cases upon the insurance by the Federal Savings and Loan Insurance Corporation of deposit accounts acquired as a result of the merger to the extent permitted by Federal law.

(e) If the surviving association plans to maintain as a branch office one or more offices, or maintain as its principal office the principal office of any bank or association being merged, the plan of merger must specifically provide therefor.

(f) After the merger, the powers of the surviving savings and loan association will be subject to the laws governing savings and loan associations, except to the extent it has, as a result of the merger, succeeded to any deposits, loans and borrowings which are legal for a savings bank but not legal for an association. While the surviving association will ordinarily be required to dispose of such deposits, loans and borrowings within two years after the date of the merger, it may discharge any legal obligations previously undertaken by the bank in connection with such nonconforming deposits, loans and borrowings. The plan of merger must specifically describe, by type and amount, any such nonconforming deposits, loans and borrowings, and indicate the manner in which they are to be disposed of by the surviving association.

(g) The Superintendent reserves the right to require additional information in connection with the application. The applicants may, of course, submit any information in addition to that required by this Procedure which they deem pertinent to the application.

(h) Unless otherwise indicated, all statistical data required to be submitted in the application shall be furnished as of the December 31st preceding the date of submission.

SL 110 - § 110.2 -- Information Required In The Application.

(a) General information. Set forth the name and address of the applicants; the name and address of the officer to whom all communications from the Department should be addressed; and the date or proposed date of filing of any required applications or other documents with the Federal Deposit Insurance Corporation, the Federal Savings and Loan Insurance Corporation or the Federal Home Loan Bank System.

(b) Banking offices. List the name and address of the principal office of each party to the proposed merger and of the surviving savings and loan association; the branch office locations of each party; the road distance between the nearest offices of each party and the offices, if any, which will be closed if the application is approved.

(c) Deposits. (1) Number and volume. List in tabular form the number of accounts and dollar amount of deposits of each party to the merger, by type of account and type of depositor, as of December 31st for each of the preceding three years. For purposes of this Procedure, the terms deposits and depositors include shares and shareholders of any association.

(2) Primary and secondary service areas. Indicate the deposits, by number of accounts and dollar amount, which originate in the primary service area and the secondary service area, respectively, of each party to the merger. This computation should also be made for any office if the service area thereof is reasonably close to or overlaps any service area of the other party or any of its offices. The term primary service area, of a bank, association or any office thereof, means the area from which is derived approximately 75 percent of the dollar amount of deposits based on the record addresses of the depositors thereof. (1) The term secondary service area, of a bank, association or any office thereof, means the area contiguous to but outside of the primary service area from which is derived approximately an additional 15 percent of the dollar amount of deposits based on the record addresses of the depositors thereof. (2)

1 The computation may be based on a fair sampling of accounts.

2 The computation may be based on a fair sampling of accounts.

(3) Overlap. Indicate the deposits, by number of accounts and dollar amount, that each party to the merger draws from the primary and secondary service areas of the other, separately itemized for savings and other time deposits.

(4) Rates. For each party, describe the rates paid on savings and other time deposits and the methods of computation. If any of the rates or the methods of computation differ between the parties to the merger, include a statement specifically indicating how the differences will be resolved if the application is approved.

(d) Loans. (1) Breakdown of loans. For each party, list in tabular form for each of the preceding three calendar years the breakdown of all major types of loans outstanding on each December 31st. The breakdown should be by number and dollar amount of loans on properties located (a) without New York State; (b) within New York State; and (c) within such party's primary and secondary service areas. Major types of loans should include at least the following categories: (i) FHA and VA loans on one- and two-family residences; (ii) conventional loans on one- and two-family residences; (iii) FHA and VA loans on other residential properties; (iv) conventional loans on other residential properties; and (v) nonresidential mortgage loans.

(2) Overlap. Indicate the outstanding mortgage loans, by number and dollar amount, of each party to the merger on properties located in the primary and secondary service areas of the other party, separately itemized for each major type of loan.

(3) Loan policies. Describe the policies of each party with respect to the rates charged and the maximum maturities and maximum loan-value ratios on the major types of loans offered by such party. If any of the policies differ between the parties to the merger, include a statement specifically indicating how the differences will be resolved if the application is approved.

(4) Participation. List the loan participations, by number and dollar amount, which each party to the merger has originated or participated in during the three preceding calendar years, and the amount of such party's participation. List the participants in each such ease.

(e) Other information. (1) Economic characteristics. Describe the economic characteristics of each party's primary and secondary service areas and the population and average income, growth trend during the preceding 10-year period and current economic outlook thereof.

(2) Management. List the names, ages and salaries of the senior executive and administrative officers of each party to the merger, including the composition of the board of trustees or board of directors and any advisory or similar committee, together with a brief summary of the educational background, banking experience and other qualifications of each such officer.

Provide similar information with respect to the proposed management of the surviving savings and loan association. If management succession is a problem for any party to the merger, indicate specifically what attempts have been made in recent years to recruit management personnel and state how the merger is expected to solve the management succession problem.

(3) Inducements. State whether any consideration, monetary or otherwise, has been paid, given or offered to any shareholder, director, trustee or officer of any party, or to any other person, as compensation or inducement for assistance in consummating the proposed merger, and the details thereof and reasons therefor.

(f) Reasons for approval. Include a separate statement setting forth in detail the reasons why the applicants believe the application should be approved, including a discussion as to: (1) whether the proposed merger will meet specific needs for banking services in the designated service areas which are not now being met; (2) the competitive consequences of the proposed merger within the designated service areas; and (3) the manner in which the proposed merger will otherwise serve the public interest. 

SL 110 - § 110.3 -- Exhibits.

The following exhibits shall be filed as part of the application:

(a) Plan of merger, setting forth the terms and conditions of the merger, executed by each party to the merger and otherwise complying with the requirements of Banking Law, section 601.

(b) Copies of resolutions adopted by the board of directors of each association and by the board of trustees of each savings bank which is a party to the merger, certified in each case by the president or secretary of the association or bank as to compliance with the requirements of Banking Law, section 601(3).

(c) Copy of resolution adopted by the board of trustees of each savings bank which is a party to the merger and which operates a life insurance department pursuant to article VI-A of the Banking Law, approving the discontinuance of such department, certified by the president or vice-president and the treasurer or assistant treasurer of the bank as to compliance with the requirements of Banking Law § 277.

(d) A statement as of the preceding December 31 of the assets and liabilities of each party to the merger and, on a pro forma basis, of the surviving savings and loan association.

(e) Copies of the income and expense reports of each party to the merger (as reported to the supervisory authorities) for each of the three preceding calendar years and, on a pro forma basis, of the surviving savings and loan association for the preceding calendar year.

(f) A statement showing a 12-months' projection for the surviving savings and loan association of (1) the asset structure, (2) the indicated yield for each asset category and for total assets, (3) earnings, (4) book net worth, (5) ratio of book net worth to total assets and (6) liquidity. Describe any anticipated material changes in the business of the surviving savings and loan association which will affect projected net worth.

(g) Maps, including (1) the primary and secondary service areas of each party to the merger, (2) the location of the respective offices of each of the parties and (3) the location, except in the case of a service area wholly within New York City, of every commercial bank, savings bank and savings and loan association office located in or near such primary and secondary service areas. A key to office numbers, scale of miles and compass points should be provided.

(h) Copy of the proposed by-laws for the surviving association.

(i) Copies of any agreements, in addition to the plan of merger, relating to the merger.

SL 110 - § 110.4 -- Additional Documents.

The following additional documents shall be submitted to the Superintendent as they become available to the parties:

(a) Copies of all approvals obtained pursuant to Federal law and regulations.

(b) Opinion of counsel for each party to the merger as to compliance of that party with all requirements of Federal and State law in connection with the merger.

SL 110 - § 110.5 -- Confidential Information.

The following information is considered confidential and should be furnished on separate pages which can be detached from the rest of the application:

(a) that portion of the plan of merger which specifically describes nonconforming deposits, loans and borrowings (see section 110.1(f)), as required;

(b) the computation of deposits for any office of each party to the merger required by section 110.2(c)(2);

(c) the listing of loan participations and loan participants required by section 110.2(d)(6);

(d) the information required by section 110.2(e)(2);

(e) the income and expense reports required by section 110.3(e); and

(f) the statement required by section 110.3(f).