Orders issued under Bank Merger Act - Legal Developments

Federal Reserve Bulletin, Feb, 2002

(12.) One commenter argued that the proposal would be anticompetitive. In particular, the commenter claimed that Bank's divestiture proposal in three markets would not be sufficient to alleviate the negative competitive effects of the proposal.

(13.) Bank has committed that before consummating the proposed merger, it will execute an agreement consistent with this order to sell the divestiture branches with total deposits in the three divestiture markets of at least $125 million to a banking organization, in a transaction in which the change in and resulting HHI levels are within the DOJ Guidelines. Bank further has committed that, if it is unsuccessful in completing the proposed divestiture with a purchaser determined by the Board to be competitively suitable within i 80 days after consummation of the acquisition of the Huntington branches, Bank will transfer the unsold branches to an independent trustee that will be instructed to sell such branches to an alternate purchaser or purchasers in accordance with the terms of this order and without regard to price. Both the trustee and any alternate purchaser must be deemed suitable by the Board. See BankAmerica Corporation, 78 Federal Reserve Bulletin 338 (1992); United New Mexico Financial Corporation, 77 Federal Reserve Bulletin 484 (1991).

(14.) The moderately concentrated banking markets would be the Fort Myers Area, Indian River County, Ocala Area, Orlando Area, Sarasota Area, and Tampa Bay Area banking markets, all in Florida. The effects of the proposal on the concentration of banking resources in the nine markets without divestitures are described in Appendix C.

(15.) The highly concentrated markets are Brevard County, Daytona Beach Area, and Punta Gorda Area, all in Florida.

(16.) These banking markets are discussed in Appendix D. HHI calculations in the divestiture markets are based on the sale of the branches to a competitively suitable buyer. Bank has signed an agreement for the sale of the divestiture branches to a thrift that is an in-market competitor in the Polk County banking market and would be a new entrant into the Highlands County and North Lake-Sumter Area banking markets. The Board has weighted the deposits of this thrift at 100 percent for purposes of the Board's competitive analysis. In making this decision, the Board took into account the thrift's current commercial lending program and level of lending, and its ability to expand its level of commercial lending through this acquisition. Accordingly, competition from the thrift more closely approximates competition from a commercial bank. The Board previously has indicated that it may consider the competitiveness of a thrift institution at a level greater than 50 percent of the thrift's deposits when appropriate. See Banknorth Group, Inc., 75 Federal Reserve Bulletin 703 (1989).

(17.) As part of this review, the Board has considered comments by a commenter that provide news reports suggesting that individuals believed to be involved in the attacks of September 11 might have had accounts at a Florida office of Bank and might have received foreign wire transfers there. Bank has been cooperating with federal law enforcement authorities regarding accounts and transactions that involve persons on the lists maintained by the Office of Foreign Assets Control.