Orders issued under Bank Holding Company Act - Legal Developments - acquisition of RBC Centura Bank by Royal Bank of Canada

Federal Reserve Bulletin, August, 2002 by Robert DeV. Frierson

The merger may not be consummated before the fifteenth calendar day after the effective date of this order, and not 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 June 24, 2002.

Voting for this action: Chairman Greenspan, Vice Chairman Ferguson, and Governors Gramlich, Bies, and Olson.

Appendix

Addresses of Branches to be acquired by Bank

1. 1052 Peachtree Industrial Blvd. Suwanee, GA 30024

2. 4855 Briarcliff Rd. Atlanta, GA 30345

3. 1300 Dunwoody Village Pkwy. Dunwoody, GA 30338

4. 2710 Wesley Chapel Rd. Decatur, GA 30034

5. 1500 Mansell Rd. Alpharetta, GA 30201

6. 4650 Jonesboro Rd. Union City, GA 30291

7. 9115 Roosevelt Hwy. Palmetto, GA 30268

8. 1585 Southlake Pkwy. Morrow, GA 30260

9. 7906 Tara Blvd. Jonesboro, GA 30236

10. 2550 Odum St. Snellville, GA 30045

11. 395 Grayson Hwy. Lawrenceville, GA 30045

12. 494 Indian Trail Rd. Lilburn, GA 30247

13. 5424 Buford Hwy. Doraville, GA 30340

14. 4419 Cowan Road Tucker, GA 30084

(1.) RBC would engage in lending and lending-related activities through its acquisition of Eagle subsidiaries, Eagle Bancshares Capital Group, Inc.; Prime Eagle Mortgage Corporation; and Eagle Service Corporation, all in Tucker, Georgia, and TFB Management Inc., TFB Management (NC) Inc., and TFB Management (RE) Inc., all in Wilmington, Delaware. RBC also would engage in discount brokerage activities through its acquisition of Eagle Service Corporation, and in community development activities through its acquisition of Eagle's subsidiary, Hampton Oaks, LLP, also in Tucker.

(2.) The transaction would be effected through a series of steps. Eagle would merge with and into a wholly owned subsidiary of Royal Bank, with Eagle surviving. Eagle then would merge with and into Bank, and Bank would be the surviving entity. Immediately thereafter, Tucker would merge with and into Bank, and Bank would be the survivor.

(3.) The Tucker branches to be acquired by Bank are listed in the Appendix.

(4.) Royal Bank is treated as a financial holding company ("FHC") in accordance with sections 225.90 and 225.91 of Regulation Y (12 C.F.R. 225.90 and 225.91). Through its subsidiaries and affiliates, Royal Bank engages in a variety of nonbanking activities, including investment banking, asset management, and mortgage lending.

(5.) Deposit data are as of June 30, 2001. Asset data are as of March 31, 2002. In this context, depository institutions include commercial banks, savings banks, and savings associations.

(6.) 12 C.F.R. 225.28(b)(4)(ii).

(7.) 12 C.F.R. 225.28(b)(1); 12 C.F.R. 225.28(b)(2)(ii); 12 C.F.R. 225.28(b)(2)(iv); 12 C.F.R. 225.28(b)(12)(i).

(8.) 12 U.S.C. [section] 1843(j)(2)(A).

(9.) One commenter criticized Royal Bank for its oversight of its U.S. subsidiaries, particularly RBC Mortgage Company ("RBC Mortgage") and RBC's subprime lenders, First Greensboro Home Equity, Inc. ("First Greensboro") and NCS Mortgage Lending Co. ("NCS"). RBC stated that its ownership interest in First Greensboro was divested fully by the end of September 2001, and that RBC has sold substantially all the assets of NCS and is not originating any new loans through that subsidiary.