TITLE 5

Banking

Banks and Trust Companies

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

Subchapter IV. Acquisition of Stock in Delaware Banks and Bank Holding Companies


This subchapter may be cited as "The Delaware Interstate Banking Act."

66 Del. Laws, c. 32, § 1; 70 Del. Laws, c. 112, § 28.;

For purposes of this subchapter, the following words and phrases shall have the meanings ascribed to them herein:

(1) "Bank" shall mean a "bank" as defined in § 2(c) of the Bank Holding Company Act of 1956, as amended, 12 U.S.C. § 1841(c), that is:

a. A bank organized and existing under the laws of this State; or

b. A national bank organized and existing as a national banking association pursuant to the National Bank Act, as amended (12 U.S.C. § 21 et seq.), and maintaining its principal office in Delaware; or

c. Where the context clearly provides, a state-chartered bank organized and located in, or a national bank principally located in, either any state or group of states other than Delaware; or any state or states including Delaware;

(2) "Out-of-state bank holding company," "Commissioner," "divest" and "subsidiary" shall have the meanings ascribed to them in § 801 of this title;

(3) "Existing bank" means a bank whose initial Delaware charter (whether or not subsequently amended or converted to a national charter) or authorization to conduct a banking business in Delaware pursuant to the National Bank Act bears an effective date not less than 5 years prior to the effective date of the acquisition of such bank, or a building and loan association which has become a bank pursuant to § 794 of this title whose initial Delaware charter or authorization to conduct a building and loan business in Delaware bears an effective date not less than 5 years prior to the effective date of the acquisition of such building and loan association;

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

(5) "Location" or "located" when referring to the state of domicile of a bank holding company means the state in which the amount of aggregate deposits in the United States offices of all its directly or indirectly owned or controlled bank or nonbank subsidiaries (as well as all of the bank or nonbank subsidiaries of any bank holding company which owns or controls that bank holding company) is greatest;

(6) "Acquisition" means:

a. The merger or consolidation of 1 bank holding company with another bank holding company; or

b. The assumption by a bank holding company of direct or indirect ownership or control of the voting shares of another bank holding company or a bank if, after the effective date thereof, the bank holding company making the acquisition will directly or indirectly own or control more than 5 percent of any class of voting shares of the other bank holding company or bank; or

c. The assumption of ownership or control of all or substantially all of the assets of a bank holding company or bank;

(7) "Control" shall have the same meaning as set forth in § 2(a)(2) of the federal Bank Holding Company Act of 1956, as amended (12 U.S.C. § 1841(a)(2));

(8) "Deposit" shall be as defined in § 204.2(a) of Regulation D of the Federal Reserve Board (12 C.F.R. § 204.2(a)).

66 Del. Laws, c. 32, § 1; 69 Del. Laws, c. 165, § 18; 70 Del. Laws, c. 112, §§ 29-31.;

(a) An out-of-state bank holding company or subsidiary thereof may acquire or retain ownership or control of a bank or bank holding company located in Delaware; provided, that the out-of-state bank holding company makes application under and at all times complies with all regulations, decrees, cooperative agreements and orders duly promulgated by the Commissioner with respect to both the implementation of this subchapter generally, and the operations of such bank holding company and the bank which it acquires specifically; and further provided that, except as otherwise provided in this title, no out-of-state bank holding company or any subsidiary thereof may acquire or retain ownership or control of either a bank located in Delaware created before September 29, 1995, that is not an existing bank or a bank holding company that owns or controls such bank.

(b) The Commissioner may approve an acquisition, in accordance with subsection (a) of this section, even though the out-of-state bank holding company, or any subsidiary thereof, that acquires a bank or bank holding company located in Delaware, would control, together with any affiliated insured depository institution (as defined in the Federal Deposit Insurance Act at 12 U.S.C. § 1813(c)), 30 percent or more of the total amount of deposits of insured depository institutions in this State. In determining whether to approve an acquisition pursuant to this subsection (b), the Commissioner shall consider the convenience and needs of the public of this State.

(c) Except as otherwise provided in this title or by applicable law of the United States, no out-of-state bank holding company or subsidiary thereof may acquire or retain ownership or control of a bank or bank holding company located in Delaware.

66 Del. Laws, c. 32, § 1; 70 Del. Laws, c. 112, §§ 32-34.;

(a) An out-of-state bank holding company shall make application to acquire a bank or bank holding company located in this State which owns or controls a bank upon such forms and in accordance with such regulations and rulings as are promulgated from time to time by the Commissioner. 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 nonrefundable filing fee in the amount of $5,750 for the use of the State and a nonrefundable processing fee in such amount as the Commissioner shall from time to time fix by regulation, payable to and for the use of the Office of the Bank Commissioner.

(b) Following publication, notice and hearing in the manner prescribed by the Commissioner, the Commissioner shall approve or disapprove an application by an out-of-state bank holding company to own or control a bank or a bank holding company located in this State upon a determination of whether such an acquisition will serve the public convenience and advantage. As part of such determination, but not by way of limitation, the Commissioner shall consider the following criteria:

(1) Whether the acquisition will, based upon the managerial and financial resources, financial history and business plan of the applicant, adversely affect the safe and sound operation of the bank or any other bank located in this State which is owned or controlled by the bank holding company;

(2) Whether the acquisition will adversely affect the quantity or quality of banking services available to 1 or more communities served by the bank prior to the acquisition;

(3) Whether, as a result of a prior or simultaneous acquisition of another bank, the acquisition of the bank will result in an undue concentration of resources or a substantial lessening of competition in this State; and

(4) Whether the acquisition will foster economic development and the financing of business enterprises to the end that employment opportunities will either be increased or, where there is a prospect for a reduction, retained.

(c) In conjunction with the approval of any application filed under this section, the Commissioner may require as a condition of such approval that the out-of-state bank holding company enter into a cooperative agreement binding it to such special terms and conditions regarding its operations and its maintenance and preservation of the capital and assets in Delaware of the bank as the Commissioner shall deem to be necessary to assure that the acquisition serves the public convenience and advantage.

66 Del. Laws, c. 32, § 1; 68 Del. Laws, c. 303, § 18; 70 Del. Laws, c. 112, §§ 35-37.;

In order to effectuate the provisions of this subchapter, the Commissioner shall, in addition to exercising the authority provided in §§ 844 and 846 of this title:

(1) Adopt and issue such regulations, decrees, orders, rulings and forms, and enter into such cooperative agreements with out-of-state bank holding companies, as the Commissioner deems to be necessary and proper;

(2) Require by negotiation, administrative order or cooperative agreement the maintenance and production of such documents and reports, the periodic conduct of such examinations, and otherwise supervise and govern the activities of the out-of-state bank holding companies as the Commissioner deems necessary and proper;

(3) Have the authority to examine any out-of-state bank holding company owning a bank. The Commissioner may require reports of each out-of-state bank holding company subject to this subchapter. Such report shall be filed under oath with such frequency and in such scope and detail as may be appropriate for the purpose of assuring continuing compliance with this subchapter and the safety and soundness of the bank;

(4) Prior to approving the acquisition of the bank or bank holding company located in Delaware by an out-of-state bank holding company, the Commissioner may enter into cooperative agreements with the appropriate regulatory authorities for the periodic examination of any out-of-state bank holding company that has a bank subsidiary or bank holding company located in Delaware or any subsidiary of such holding company, and may accept reports of examination and other records from such authorities in lieu of conducting the Commissioner's own examination. The Commissioner may enter into joint actions with other regulatory authorities having concurrent jurisdiction over any out-of-state bank holding company that owns or controls a bank or bank holding company subsidiary or may take such actions independently to carry out the responsibilities under this subchapter to assure the safety and soundness of any bank and to assure compliance with this subchapter and applicable Delaware banking laws.

66 Del. Laws, c. 32, § 1; 70 Del. Laws, c. 112, § 38; 70 Del. Laws, c. 186, § 1.;

Upon the Commissioner's determination that an out-of-state bank holding company is in violation of the requirements of this subchapter or any order, regulation, ruling, cooperative agreement or decree issued or entered into by the Commissioner or any order of a court of competent jurisdiction, or is otherwise operating a bank in an unsafe and unsound manner, the Commissioner shall have the authority to order such out-of-state bank holding company or subsidiary thereof to remedy such violation by a date certain, or to cease and desist from operating in an unsafe and unsound manner, in default of which the Commissioner shall have the authority to order such out-of-state bank holding company or subsidiary thereof to divest itself of any shares or assets of any bank located in this State. The procedure governing such divestiture, and the authority of the Commissioner to enforce an order directing the same, shall be the same as provided in § 807(b)—(d) of this title.

66 Del. Laws, c. 32, § 1; 70 Del. Laws, c. 112, § 39.;

Except as to subchapter I of this chapter, nothing contained in this chapter shall be construed as abridging the rights, powers and authorities granted to any bank acquired under any subchapter of this chapter by its charter, the provisions of this title or any other current, former or future law of the State governing the formation, conversion, merger, corporate powers, branching, operation or dissolution of a bank.

66 Del. Laws, c. 32, § 1; 70 Del. Laws, c. 112, §§ 40-42.;