TITLE 5

Banking

Banks and Trust Companies

CHAPTER 8. ACQUISITION OF INTERESTS IN BANKING INSTITUTIONS; BANK HOLDING COMPANIES

Subchapter I. Acquisition of Stock in New Banks in Delaware before September 29, 1995


As used in this subchapter:

(1) "Bank" means a bank or trust company created under this title or a national banking association created under the National Bank Act (12 U.S.C. § 21 et seq.) after February 18, 1981.

(2) "Out-of-state bank holding company" has the meaning specified in the Bank Holding Company Act of 1956, as amended (12 U.S.C. § 1841 et seq.).

(3) "Commissioner" means the State Bank Commissioner of the State of Delaware.

(4) "Divest" means to transfer all interest, legal or equitable, to a person or other entity in which the transferor has no interest, direct or indirect, or which has no interest, direct or indirect, in the transferor.

(5) "Located in this State" means, with respect to state-chartered banks, banks created under the law of this State and, with respect to national banking associations, banks whose organization certificate identifies an address in this State as the place at which its discount and deposit operations are to be carried out.

(6) "Subsidiary" means, with respect to an out-of-state bank holding company:

a. Any company 25% or more of whose voting shares is directly or indirectly owned or controlled by such bank holding company, or is held by it with power to vote; or

b. Any company the election of a majority of whose directors is controlled in any manner by such bank holding company.

63 Del. Laws, c. 2, § 2; 63 Del. Laws, c. 186, §§ 3, 4; 68 Del. Laws, c. 303, § 15; 70 Del. Laws, c. 112, § 18.;

This subchapter deals with conditions under which out-of-state bank holding companies or subsidiaries thereof may acquire and hold shares of voting stock in banks located in this State before September 29, 1995; it shall not be construed to limit the powers granted to any bank in this State to conduct its business.

63 Del. Laws, c. 2, § 2; 63 Del. Laws, c. 186, §§ 3, 4; 70 Del. Laws, c. 112, § 19.;

(a) Except as provided in 12 U.S.C. § 1842 and as provided in this chapter, no out-of-state bank holding company or any subsidiary thereof may acquire or hold, directly or indirectly, more than 5% of any voting shares of, interest in, or all or substantially all of the assets of any bank located in this State. Notwithstanding the foregoing, an out-of-state bank holding company or any subsidiary thereof may acquire and hold all or substantially all of the voting shares of not more than 2 banks located in this State when and for so long as the following conditions are satisfied:

(1) Each bank whose stock is to be acquired is a newly established bank that has or will have when chartered no more than a single office located in this State open to the public for the conduct of banking business;

(2) At least 1 of the banks whose stock is to be acquired has or will have on the date of commencement of banking business in this State a minimum capital stock and paid-in surplus of $10,000,000 and will have within 1 year of the date of its commencement of banking business in this State a minimum capital stock and paid-in surplus of $25,000,000;

(3) The bank whose stock is to be acquired employs on the date of commencement of its banking business in this State or will employ within 1 year of such date not less than 100 persons in this State in its business and, if the stock of a second bank is acquired, that bank, together with its "affiliates" as that term is defined in § 773 of this title, will employ within 1 year of its commencement of business in this State at least 200 persons within the State;

(4) Each bank whose stock is to be acquired is operated in a manner and at a location that is not likely to attract customers from the general public in this State to the substantial detriment of existing banking institutions located in this State; provided that each such bank may be operated in a manner likely to attract and retain customers with whom that bank, the out-of-state holding company or such holding company's bank or nonbanking subsidiaries have or have had business relations; and

(5) Such acquisitions have received the prior approval of the Commissioner.

(b) The provisions of subsection (a) of this section apply only to banks first acquired pursuant to this subchapter before September 29, 1995. Subsequent acquisitions of such banks shall not affect the application of the provisions of subsection (a) of this section, except as provided in subsection (c) of this section.

(c) Notwithstanding subsection (a) of this section, any bank described in subsection (a) of this section may file an application with the Commissioner for the waiver of any or all of the conditions specified in subsections (a)(1), (a)(2), (a)(3) and (a)(4) of this section, except as otherwise provided in this title. Such application shall contain such information as the Commissioner may by regulation require, shall be accompanied by a fee of $6,000 payable to the Office of the State Bank Commissioner and shall be approved by the Commissioner upon finding that the applicable provisions of law have been complied with. In determining whether to approve an application pursuant to this subsection (c), the Commissioner shall consider the convenience and needs of the public of this State.

63 Del. Laws, c. 2, § 2; 63 Del. Laws, c. 186, §§ 3, 5; 64 Del. Laws, c. 42, § 6; 64 Del. Laws, c. 461, § 2; 70 Del. Laws, c. 112, §§ 20-22; 71 Del. Laws, c. 19, § 36.;

(a) Any out-of-state bank holding company or subsidiary thereof proposing an acquisition pursuant to § 803 of this title before September 29, 1995 shall file an application with the Commissioner for approval to make such acquisition. Such application shall contain such information as the Commissioner may by regulation require, and shall specifically acknowledge applicant's agreement to be bound by the conditions set forth in § 803 of this title. In addition, such application shall designate a resident of this State as applicant's agent for the service of any paper, notice or legal process upon applicant in connection with matters arising out of this subchapter and shall be accompanied by a filing fee in the amount of $5,750 for the use of the State.

(b) In determining whether to approve an acquisition by an out-of-state bank holding company or any subsidiary thereof of any voting stock of a bank located in this State, the Commissioner shall consider:

(1) The financial and managerial resources of the out-of-state bank holding company or its subsidiary;

(2) The future prospects of the out-of-state bank holding company and the bank whose assets or shares it will acquire or its subsidiary;

(3) The financial history of the out-of-state bank holding company or its subsidiary;

(4) Whether such acquisition or holding may result in undue concentration of resources or substantial lessening of competition in this State; and

(5) The convenience and needs of the public of this State.

(c) No application shall be filed pursuant to this section on or after September 29, 1995.

63 Del. Laws, c. 2, § 2; 63 Del. Laws, c. 186, §§ 3, 4; 68 Del. Laws, c. 303, § 16; 70 Del. Laws, c. 112, §§ 23, 24.;

An out-of-state bank holding company that directly or indirectly, through any subsidiary, acquires and holds voting stock of a bank pursuant to this subchapter shall file with the Commissioner upon the Commissioner's request copies of all regular and periodic reports which such bank holding company is required to file under § 13 or § 15(d) of the Securities and Exchange Act of 1934, as amended [15 U.S.C. § 78m or § 78o(d)], but excluding any portions not available to the public.

63 Del. Laws, c. 2, § 2; 63 Del. Laws, c. 186, §§ 3, 4; 70 Del. Laws, c. 112, § 25.;

The Commissioner may adopt rules and regulations and issue orders under this subchapter including, but not limited to, rules, regulations and orders for the following purposes:

(1) To prescribe information or forms required in connection with an application pursuant to § 804(a) of this title;

(2) To establish procedures in connection with approvals pursuant to § 804(b) of this title and the filing of required reports pursuant to § 805 of this title;

(3) To issue orders under § 807 of this title and establish procedures governing such issuances.

63 Del. Laws, c. 2, § 2; 63 Del. Laws, c. 186, §§ 3, 4; 70 Del. Laws, c. 112, § 26.;

(a) Upon the Commissioner's determination that any out-of-state bank holding company or subsidiary thereof is holding stock in a bank located in this State in violation of the conditions set forth in § 803 of this title or of its agreement pursuant to § 804(a) of this title the Commissioner may order such out-of-state holding company or subsidiary thereof to take steps to remedy such violation by a date certain.

(b) The Commissioner shall have the authority to order an out-of-state bank holding company or subsidiary thereof to divest any shares of a bank that it has acquired under this subchapter upon the Commissioner's determination that such holding company or subsidiary continues to own shares of stock of a bank located in this State in violation of the conditions contained in § 803 of this title or of its agreement pursuant to § 804(a) of this title after the date fixed for compliance by any order issued under subsection (a) of this section.

(c) An out-of-state bank holding company or subsidiary thereof shall divest any shares of a bank that it has acquired under this subchapter within 2 years of the date an order issued under subsection (b) of this section becomes final and subject to no further judicial review; provided that the Commissioner may extend such 2-year period for a further period or periods upon the Commissioner's determination that such an extension would not be detrimental to the public interest.

(d) The Court of Chancery of the State will have exclusive original jurisdiction of any judicial review of an order issued under subsection (b) of this section, any other provision of law notwithstanding. Such review may be sought by the out-of-state bank holding company or subsidiary thereof that is the subject of such divestiture order at any time within 1 year of the date of such order. Review of a divestiture order shall be de novo and such order will be specifically enforced by the Court of Chancery upon a final determination that, at the time of its issuance, the divestiture order was valid in all respects. An order issued under subsection (a) of this section shall not be subject to judicial review.

63 Del. Laws, c. 2, § 2; 63 Del. Laws, c. 186, §§ 3, 4; 70 Del. Laws, c. 186, § 1.;