Orders issued under Bank Merger Act - Legal Developments

Federal Reserve Bulletin, Feb, 2002

(1.) The Florida operations of Huntington include 106 branches and 5 Private Client Services offices. Bank also is acquiring the deposits associated with Huntington's 35 supermarket branches in Florida, although it would not establish branches or any other physical presence at those locations. The deposits associated with the supermarket branches would be reassigned to the nearest branch of Bank after the proposed transaction.

(2.) Asset data are as of September 30, 2001.

(3.) In this context, depository institutions include commercial banks, savings banks, and savings associations. Deposit and market share data are as of June 30, 2000, and have been adjusted to reflect mergers and acquisitions that have occurred since that time.

(4.) 12 U.S.C. [section] 1831u.

(5.) See 12 U.S.C. [section] 1831u(a)(4) and (g)(4).

(6.) See 12 U.S.C. [section] 1831u. Bank is adequately capitalized and adequately managed, as defined in the Riegle-Neal Act. The Florida Department of Banking has indicated that this transaction would comply with applicable Florida law, and the Georgia Department of Banking and Finance approved Bank's application to establish branches at the locations of the Huntington branches on November 2, 2001. See Fla. Stat. Ann. [section] 658.2953; Ga. Code Ann. [subsection] 7-1-601 and 7-1-628. Florida law only imposes an age requirement for mergers involving Florida-chartered banks and national banks with their main office in Florida. In this case, Huntington is a national bank with its main office in Ohio. On consummation of the proposal, Bank would control less than 10 percent of the total amount of deposits in insured institutions in the United States, and less than 30 percent of the total amount of deposits in insured institutions in Florida. All other requirements of section 102 of the Riegle-Neal Act would also be met on consummation of the proposal.

(7.) 12 U.S.C. [section] 1828(c)(5)(A).

(8.) 12 U.S.C. [section] 1828(c)(5)(B).

(9.) Banking market definitions are discussed in Appendix B.

(10.) Unless otherwise noted, market share data are based on calculations in which the deposits of thrift institutions, which include savings banks and savings associations, are weighted at 50 percent. The Board has previously indicated that thrift institutions have become, or have the potential to become, significant competitors of commercial banks. See, e.g., Midwest Financial Group, 75 Federal Reserve Bulletin 386 (1989); National City Corporation, 70 Federal Reserve Bulletin 743 (1984). Thus, the Board regularly has included thrift deposits in the market share calculation on a 50-percent weighted basis. See, e.g., First Hawaiian, Inc., 77 Federal Reserve Bulletin 52 (1991).

(11.) 49 Federal Register 26,823 (1984). Under the DOJ Guidelines, a market is considered unconcentrated if the post-merger HHI is under 1000, moderately concentrated if the post-merger HHI is between 1000 and 1800, and highly concentrated if the post-merger HHI is more than 1800. The Department of Justice has informed the Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anticompetitive effects) unless the post-merger HHI is at least 1800 and the merger increases the HHI by more than 200 points. The Department of Justice has stated that the higher than normal HHI thresholds for screening bank mergers for anticompetitive effects implicitly recognize the competitive effects of limited-purpose lenders and other nondepository financial institutions.