Orders issued under Bank Holding Company Act - Legal Developments - Allied Irish Banks P.L.C. to acquire share of M&T's subsidiary banks

Federal Reserve Bulletin, May, 2003 by Robert DeV. Frierson

The acquisition of up to 25 percent of M&T may not be consummated before the fifteenth calendar day after the effective date of this order, or later than three months after the effective date of this order, unless such period is extended for good cause by the Board or the Federal Reserve Bank of Richmond, acting pursuant to delegated authority.

By order of the Board of Governors, effective March 11, 2003.

(1.) Under the terms of the proposal, Allied Irish would sell its wholly owned subsidiary bank holding company, Allfirst Financial Inc., Baltimore, Maryland ("Allfirst"), to M&T in exchange for the shares of M&T and other consideration. M&T and Trust Company have filed related applications with the Board to acquire Allfirst and Allfirst's nonbanking subsidiaries; to merge Allfirst's lead subsidiary bank, Allfirst Bank, also in Baltimore, into Trust Company; and for Trust Company to retain and operate branches at the locations of Allfirst Bank's offices. By order dated today, the Board has approved the M&T proposal. M&T Bank Corporation (Order dated March 11, 2003) ("M&T Order").

(2.) M&T's other subsidiary bank is M&T Bank, N.A., Oakfield, New York.

(3.) Allied Irish proposes to acquire shares in: (1) Martindale Andres & Company, LLC, West Conshohocken, Pennsylvania, and thereby engage in financial and investment advisory activities pursuant to section 225.28(b)(6) of Regulation Y (12 C.F.R. 225.28(b)(6)); and (2) Keystone Financial Life Insurance Corporation, Phoenix, Arizona, and thereby engage in providing credit insurance as principal, agent, or broker pursuant to section 225.28(b)(11) of Regulation Y (12 C.F.R. 225.28(b)(11)).

(4.) Asset data and ranking are as of September 30, 2002, and are based on the exchange rate then available.

(5.) Asset data and ranking are as of September 30, 2002. All other banking data are as of June 30, 2002, unless otherwise noted.

(6.) A bank holding company's home state is the state in which the total deposits of all banking subsidiaries of the company were the largest on July 1, 1966, or the date on which the company became a bank holding company, whichever is later. 12 U.S.C. [section] 1841(o)(4)(C). For purposes of section 3(d) of the BHC Act, the Board considers a bank to be located in the states in which the bank is chartered, headquartered, or operates a branch.

Pursuant to the IBA and section 211.22(b)(2) of Regulation K (12 C.F.R. 211.22(b)(2)), Allied Irish has applied to change its home state from Maryland to New York on consummation of the proposed transaction. The Board has determined that Allied Irish satisfies the criteria for changing its home state and that allowing the proposed change would be consistent with competitive equity between foreign and domestic banks.

(7.) 12 U.S.C. [section] 1842(d)(2)(A). Insured depository institutions include all insured banks, savings banks, and savings associations.

(8.) 12 U.S.C. [section] 1842(d)(2)(B)-(D).

(9.) Maryland's deposit cap is the same as that set forth in section 3(d)(2)(B) of the BHC Act. See Md. Code Ann., Fin. Inst. [section] 5-906(b) (Michie 2001) (30 percent). New York and Pennsylvania do not have deposit caps applicable to the proposal.