Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a)
Applications filed pursuant to the provisions of Section
9200,
9202,
9203,
9215 and
9216 of the law shall contain all
of the information herein required under subsections (c) through (q), inclusive
of this section. They shall further contain a table of contents indicating
titles and corresponding page numbers. All amendments shall be filed under
cover of the application, shall be clearly identified as amendments, numbered
consecutively, and shall comply with all pertinent requirements of the
application.
(b) Where the
surviving association is a federal association, in lieu of the information
required under the provisions of this section, the application may incorporate
by reference information filed with the Federal Home Loan Bank Board provide
three (3) copies thereof filed as an exhibit to the application.
(c) Stock Ownership and Investment if
Constituent Associations and in Holding Companies.
(1) The total number of shares of stock
outstanding for each constituent association on the date of the application. If
the association has more than one class of stock or more than one series of
stock, the total number of shares in each class and/or series.
(2) On the date of filing the application,
description and number of stock options, profit sharing, pension plans,
employment contracts, and other employee benefit plans, if any, outstanding of
the disappearing association and setting forth the method of handling them upon
such merger.
(3) The total number
of shares of stock of the corporate holding company whose stock is being used
to acquire the assets or the stock of the disappearing association. The latest
available market price quotations (closing or bid and ask prices) for the stock
of the corporate holding company and each association, and quarterly range of
sales of bid and ask prices over the preceding two (2) years, if available, on
the basis of any adequate market.
(4) For any stockholder and affiliate, their
officers and directors or partners and any associates thereof, who, on the
filing date of the application, are known to own of record or beneficially then
percent (10%) of the voting stock of any savings and loan holding company:
(A) Name of savings and loan association or
savings and loan holding company;
(B) Number of shares held in each type of
stock;
(C) Percentage (of
outstanding stock) held in each entity;
(D) Number of shares acquired within one year
prior to the date the application is filed.
(E) Stockholder's
name(s).
(5) Total number
of shares of stock of the surviving association which will be outstanding on
the effective date of the merger.
(6) For any stockholder and affiliate, their
officers or directors or partners and any associates thereof, who directly or
indirectly will own ten percent (10%) or more of the outstanding stock of any
class and/or series of stock which carries a voting right of the surviving
association when the merger becomes effective:
(A) Stockholder's name(s);
(B) Number of shares of each type of stock
estimated to be held on the effective date of the merger;
(C) Estimated percentage of the total
outstanding stock held by said stockholders on the effective date of the
merger.
(7) For any
constituent association that is a mutual association, the total number of
voting rights on the filing date of the application. Specify the estimated
appropriate number of votes represented by valid proxies held by the
management.
(8) For any "person" or
"company" who owns of record or beneficially or controls ten percent (10%) or
more of the voting proxies or voting rights (on the filing date of the
application) of any constituent association that is a mutual association:
(A) Name of the "person" or
"company";
(B) Number of proxies or
voting rights held;
(C) Number of
proxies or voting right acquired within two years prior to the date the
application is filed;
1. Specify whether all
of such proxies were solicited from the mutual shareholders in the name of such
person or company.
2. If such
proxies were not solicited in the name of such person or company, whether they
were acquired by substitution of a previous proxy holder or by some form of
assignment or agreement, and set forth the consideration that may have been
given for the acquisition of such proxies.
(9) For any disappearing association that is
a mutual association:
(A) The amount of
investment in the disappearing association of each officer, director and his
associates of all constituent associations:
1. On the filing date of the
application;
2. One year prior
thereto;
3. Two years prior
thereto.
(B) Name,
address, business and personal relationship, if any, to each constituent
association and its officers and directors, of each person whose investment in
the disappearing association on the record date for determination of ownership
has increased more than $20,000 over his investment two years prior thereto,
and the amount of his investment of each of the dates stated in (A)
above.
(d)
Describe the nature and total dollar amount of business or financial
transactions occurring within the past three years between each constituent
association, with each affiliate, as defined in Section
5075 of the
Financial Code, (including a description of the nature of such affiliate
relationship) and with the holding company where the amount involved in the
transaction or series of similar transactions exceeds the sum of $30,000 in any
one year.
(1) Describe any arrangements or
agreements with respect to any affiliate which will be associated with or
serving the surviving association or its borrowers.
(e) A brief outline of the facts
substantiating the fairness of the consideration, including:
(1) The number of shares to be acquired by
cash purchase, the amount proposed to be paid per share, and in total; the
method by which the purchase price was determined and the source of the funds
to be applied to the purchase.
(2)
The number of shares to be acquired by exchange of stock, the exchange ratio,
the method by which the ratio was determined, and classes or series of shares
to be exchanged.
(3) The
difference, if any, in per share amount of consideration to be paid to holders
of various classes of stock, or of the same class.
(4) The latest available market price
quotations (closing or bid and ask prices) and trading volume for the stock of
each association and each holding company, and quarterly range of sales or bid
and asked prices over the preceding two years and trading volume, if available,
on basis of an adequate market.
(5)
Statement of dividends for each year of the three years prior to the date of
the application paid by each of the constituent associations and the dividends
paid by the holding company if the holding company stock is to be a
consideration in the transaction.
(f) List of principal officers and proposed
directors of surviving association, including a brief description of business
experience, proposed salary, profit sharing, bonus, pensions, stock options and
other similar benefits of each such officer and director.
(g) Competitive Factors. (Date presented in
this section should be consistent so that relationship between each constituent
association and the surviving association can be adequately analyzed.)
(1) Furnish map showing the location of all
offices of each constituent.
(2)
Furnish a map showing the authorized lending territories of the surviving and
disappearing associations.
(3) A
brief summary of the net effect of the proposed merger upon the lending
territories of the constituent associations should be provided.
(4) Include a comprehensive discussion
setting forth any relevant statistics plus supporting statements as to the
effect of this merger on competition for savings and for loans.
(5) Furnish as of December 31 for each of the
last three (3) calendar years and for the most recent month available the
dollar amount of total assets, total savings, and real estate loans outstanding
of the constituent associations, the dollar volume of real estate loans by each
such constituent association for the last three (3) calendar years and the
current calendar year to the end of the above most recent month.
(6) For constituent associations which are
overlapping lending institutions:
(A) List
each overlapping lending area defined as each area in which a significant
volume of lending operations of a constituent association overlaps with a
significant volume of lending operations of one or more of the other
constituent associations. If an overlapping lending area lies within or mostly
within a Standard Metropolitan Statistical Area then the overlapping lending
area should be taken to be the Standard Metropolitan Statistical Area. In other
case the overlapping lending area should be taken to be a county or group of
contiguous counties in which the overlap occurs.
(B) For each overlapping constituent
association furnish as of the most recent feasible date the number and dollar
volume of its real estate loans outstanding by county. This should be based
upon a random sampling of at least thirty percent (30%) of the portfolio. Loan
date should be shown as on the following Table 1.
|
TABLE 1 |
|
For Each Overlapping
Area |
|
SUMMARY OF LOAN DATA |
|
|
Loans |
No. of |
Loans |
No of. |
|
Held by |
Loans |
Held by |
Loans |
|
Surviving |
Held by |
Disappearing |
Held by |
|
Association |
Surviving |
Association |
Disappearing |
|
County |
($1,000) |
Association |
($1,000) |
Association |
(C)
For each overlapping constituent association furnish the total number and
dollar volume of total real estate loans made by county and state for the
preceding calendar year and for the current calendar year to date.
(D) For each of the counties that constitute
a whole or part of any of the overlapping lending area or contain overlapping
constituent associations, furnish data for each of the three (3) most recent
calendar years on the following where available:
1. The number and dollar volume of trust deed
recordings from all sources;
2. The
number and dollar volume of trust deed recordings where available for each
major class of institutional lender: savings and loan associations, commercial
banks, life insurance companies, and others;
3. The number and dollar volume of trust deed
recordings for each constituent association regardless of where the association
is located.
(E) List each
overlapping savings area defined as each area in which a significant volume of
the savings accounts of a constituent association overlaps with a significant
volume of the savings accounts of one or more of the other constituent
associations. The institutions above whose savings areas overlap to a
significant degree shall be referred to as overlapping savings institutions and
should be listed under the appropriate overlapping savings area.
(F) For each overlapping savings institution
take a random sampling of twenty percent (20%) of its savings accounts. This
random sampling should be used to ascertain the number and dollar volume of
savings accounts by census tracts or postal zip code and by counties of account
holders. Savings data should be shown as on the following Table 2.
|
TABLE 2 |
|
For each Overlapping
Area |
|
SUMMARY OF SAVINGS DATA |
|
|
Zip |
Savings |
No. of |
Savings |
No. of |
|
Code |
Held by |
Accounts |
Held by |
Accounts |
|
or |
Surviving |
Held by |
Disappearing |
Held by |
|
Census |
Association |
Surviving |
Association |
Disappearing |
|
Tract |
($1,000) |
Association |
($1,000) |
Association |
(h) Financial Statements.
(1) A statement of condition of each
constituent association as of a date within ninety (90) days prior to the
filing date of the application. In addition, the constituent associations shall
include an audited statement of condition as of a date within one (1) year of
the filing date of the application, in which case the statement of condition as
of the end of the latest fiscal year may be unaudited, but the application
shall also contain an audited statement of condition as of the end of the
preceding fiscal year.
(2) An
audited statement of operations of each constituent association for each of the
last three fiscal years and an interim unaudited statement of operations for
the period between the end of the last fiscal year and the date of the latest
statement of condition in the application. If the last fiscal year ended within
ninety (90) days prior to the filing date of the application and an audited
statement is not available for that fiscal year, there shall be included with
the application audited statements of operations for the latest three years
available and an unaudited statement of operations for the last fiscal year and
following interim period.
(3) A pro
forma statement of condition and statement of operations giving effect to the
proposed merger. The pro forma statement of condition shall be as of a date
within ninety (90) days prior to the filing date of the application and as of
the end of the preceding fiscal year. The pro forma statement of operations
should cover the year to date period ended within ninety (90) days prior to the
filing date of the application and the prior fiscal year.
(4) Any differences from generally accepted
accounting principles in the individual and pro forma financial statements
which have a material effect on the financial statements shall be fully
explained. The amounts and effects of those differences shall be
stated.
(5) A calculation of book
value per share for each constituent association as of the same dates as the
statement of condition referred to in (1) above and pro forma statements of
condition referred to in (3) above.
(6) A calculation of the earnings per share
on a comparable basis for each constituent association as of the same dates as
the statement of operations referred to in (2) above and pro forma statement of
operations referred to in (3) above.
(7) If the constituent association is a
subsidiary of a corporate holding company, as defined by Section
11500 of
the Financial Code, the applicant shall file both unconsolidated financial
statements of the parent holding company and consolidated financial statements
of the parent holding company and its subsidiaries as follows:
(A) A statement of condition as of a date
within ninety (90) days prior to the filing date of the application and an
audited statement of condition as of a date within one (1) year of the filing
date of the application unless the fiscal year of the constituent has ended
within ninety (90) days prior to the filing date of the application, in which
case the latest statement of condition may be unaudited, but the application
shall also contain an audited statement of condition as of the end of the
preceding fiscal year.
(B) An
audited statement of operations covering a fiscal year ended within one (1)
year of the application filing date; provided that if the fiscal year of the
constituent has ended within ninety (90) days prior to the filing date of the
application, the audited statement of operations may cover the preceding fiscal
year. An interim unaudited statement of operations shall also be included for
the period, if any, between the close of the latest fiscal year and the date of
the latest statement of condition.
(C) If stock or obligations of the parent
holding company are used as consideration for the transaction, include audited
consolidated statements of operations covering the two (2) fiscal years prior
to the year referred to in (B) above giving calculations of earnings per share
for each fiscal year and book value per share as of the date of the statements
of condition required in (A) above.
(8) The audited financial statements shall be
accompanied by the report of the independent accountant who examined such
financial statements and by a letter from each independent accountant, dated
not more than five (5) days prior to the date of the application, consenting to
the use of his accountant's report in the applications.
(9) When unaudited financial statements are
used as the basis for determining the purchase price or value for the exchange,
or when requested by the Commissioner, the independent accountant shall perform
certain specified procedures with respect to the unaudited financial statements
and issue a separate letter to the Commissioner describing the procedures
performed. Such procedures as a minimum shall include:
(A) A reading of the unaudited financial
statements, comparison of such statements to the prior comparable period and,
if practicable, agreement of such statements with the underlying
books.
(B) A test to determine if
the unaudited financial statements include normal recurring accruals.
(C) A reading of the minutes of the
stockholders, shareholders and board of directors.
(D) Appropriate inquiries to officials of the
company and its subsidiaries who have responsibility for financial and
accounting matter which may affect such financial
statements.
(i)
Supplementary Information. Such other financial information as the Commissioner
may require as to operating efficiency, market policy and performance, capital
and profit experience.
(j) Debt
Securities. If debt securities are issued or assumed as consideration in
connection with a proposed merger, the application shall clearly indicate the
means by which the surviving entity intends to service the debt until the debt
is fully amortized. The terms of any debt securities other than advances by the
Federal Home Loan Bank should be described. If there are no debt securities,
the applicant shall so state.
(k)
Taxability. State the basis for nontaxability (including applicable Internal
Revenue Code sections) of the merger, reorganization, or acquisition. If the
transaction is not tax-free either as to the association or the stockholders,
it should be so stated and the estimated amount of any tax liability to the
association should be stated.
(l)
Special Consideration. The application shall contain information:
(1) Regarding any special consideration,
monetary or otherwise, that has been paid, given, or offered, directly or
indirect, to any stockholder, shareholder, directory or officer of any
constituent association or of the holding company thereof in connection with
the proposed merger or a statement that none has been paid or promised. Include
information as to any formal or informal agreements relating to payment of
compensation, after consummation of the proposed transaction, in any form, such
as salary, bonus or retirement allowance, or consulting fee, showing to what
extent and in what manner such information has been or will be disclosed to all
stockholders or shareholders of the constituent association. If none, so
indicate.
(2) If any person to whom
fees or commissions have been or are to be paid in connection with merger is an
affiliate or associate, or a holding company of any constituent association,
set forth the facts with respect thereto, including but not limited to:
(A) Name of affiliate or holding
company;
(B) Description of service
performed;
(C) Basis for
determination of amount of such fees, commissions, and expenses;
(D) Name of the constituent association
paying such fees, commissioners, and expenses.
(3) Estimated Expenses. Information as to
fees, commissions and expenses paid or incurred by the constituent associations
to persons other than these mentioned in (1) and (2) above.
(m) Advisory Opinions. The application shall
contain an undertaking by the constituent associations to bear the expense of
an advisory opinion to the Commissioner on the fairness of the terms of the
merger, and as to any anticompetitive effects of the merger, should the
Commissioner deem such advisory opinion necessary.
(n) Address. List in the application the
complete address of each branch office which will be acquired by the surviving
association by reason of said merger.
(o) Exhibits.
(1) Certified copies of the resolutions of
the board of directors of each constituent association authorizing the
submission of the application for approval of merger.
(2) If a stockholders' or shareholders'
meeting is to be held or stockholders' or shareholders' approval obtained as
required under Section
103.211:
(A) Draft of proxy statement to be
used.
(B) Draft of stockholder's or
shareholder's proxy (in form permitting a vote either for or against the
merger) to be used.
(C) Draft of
written solicitation for consent of stockholder or shareholder
approval.
(D) Draft of notice of
meeting of stockholders or shareholders to approve merger to be
used.
(3) Draft of all
letters or other communications relating to the merger to be sent to
stockholders, shareholders, investment certificate holders, and members. Copies
of any proposed tender or exchange offer to stockholders.
(4) Copy of merger agreement, any amendments
thereto, and copy of any contract or agreement or any other means of
acquisition providing for cash purchase or exchange of stock for the voting
shares.
(5) The documents referred
to in (2) and (3) above shall not be used until approval of the Commissioner
has been obtained. Such approval may be obtained prior to the filing of the
application but submission thereof should be accompanied by a statement setting
forth the details of the stock acquisition and information required under these
regulations unless such information is furnished in the proxy
statements.
(p)
Supplement to Application. Applicant shall file the following information
either with the application or as a supplement to the application:
(1) A copy of the notice that has been sent
to each stockholder or shareholder by each constituent association showing the
date on which approval of said merger by the stockholders or shareholders took
place, which shall be filed ten (10) days after such approval.
(2) Evidence of compliance with the
applicable provisions of the Financial Code and the Corporations Code including
but not limited to the provisions of each of the following sections of the
Financial Code: Section
9207,
9209,
9210,
9213,
9215 and
9216. Applicant shall state the
mailing date of notice to stockholders and/or shareholders specified in (1)
above.
(3) Where the vote required
for the merger has been obtained by written consents, applicant shall attach a
copy of the written consent and a certification by the secretary of the
association obtaining consent as to the number of consents obtained and the
stock or share interest represented thereby.
(4) Copy of proxy statement used by each
constituent association.
(5) Copy
of proxy and notice of meeting used by each constituent association.
(6) Copy of all letters and other
communications relating too the merger sent or proposed to be sent to
stockholders, shareholders, investment certificate holders and borrowing
members.
(7) A copy of the notice
that has been or will be sent to depositors, promptly after consummation of the
merger, showing the effective date of the merger and the effect of the merger
on the depositor's FSLIC insurance if they are also depositors of any other
constituent association.
(8) A
statement setting forth the proposed form of the accounting for the merger by
the surviving association. The statement shall describe the accounting method
to be employed and set forth in reasonable detail the reasons justifying the
accounting method and the underlying generally accepted accounting principles
including a reference to the substantial authoritative support for such
principles.
If the surviving association has a parent company, the
accounting method employed by the parent company should be described and any
inconsistency with the accounting method employed by the subsidiary association
should be fully explained and justified.
This statement may be prepared by management of the
surviving association or by the independent accountant, it must contain an
opinion that the proposed accounting treatment conforms with generally accepted
accounting principles. If the statement is prepared by management of the
surviving association, it shall be accompanied by an opinion from the
independent certified public accountant who will audit the surviving
association, it shall be accompanied by an opinion from the independent
certified public accountant who will audit the surviving association that he
has reviewed the proposed accounting treatment and concurs that it conforms
with generally accepted accounting principles.
(9) The supplement shall be signed and
verified that all copies attached are true copies in the same manner as the
application by the chief executive officer and chief financial officer of the
surviving association.
(q) Marketing Policies and Programs. On and
after November 1, 1976, each application filed under the provisions of this
Subchapter shall describe how the marketing policies and programs of the
surviving association, as described in the document maintained on file with the
Commissioner pursuant to Section
104.504, would be changed or
affected if the application is approved.
(r) Consideration of Information. In reaching
a decision on applications filed under this Subchapter, the Commissioner shall
consider data received pursuant to this section.
1. Change
without regulatory effect renumbering former Section
204.2 to Section
103.208 (Register 87, No. 14). For
prior history, see Register 77, Nos. 32 and 11.
Note: Authority cited: Section
5255,
Financial Code. Reference: Section
5500-5515,
5700-5702,
6000,
6010,
8708,
9000,
9200-9218 and Chapter 10,
Financial Code.
