September 1, 1993

Re: ________ – Acquisition of Control of ________

Dear Mr. ________:

This confirms our telephone conversation of June 14, 1993 in which we discussed the issue of a potential acquisition of control by ________ of ________. (“Bancshares”), parent company of (“Bank”).

Financial Code Section 701 provides that no person shall directly or indirectly acquire control of a bank or control person of a bank unless the Superintendent has first approved such acquisition of control. In pertinent part, Financial Code Section 700(b)(2) provides that “a person who, directly or indirectly, owns . . . 10 percent or more of the then outstanding voting securities issued” by a bank or control person of the bank is presumed to control such bank or control person of such bank.

In your letters of October 5, December 23, and December 29, 1992, and June 8, 1993, you described a situation by which ________ will gain ownership of 10 percent or more of the outstanding voting securities of Bancshares by operation of Bancshares’ stock repurchase plan (the “Plan”). In essence, ________ percentage interest in Bancshares is increasing because Bancshares is buying and retiring outstanding shares of its stock. You have indicated that ________ has not participated, nor does she intend to participate, in the Plan. You have also represented that ________ has no control over the operation of the Plan.

In accordance with your letters and verbal representations, and our understanding that ________ was passive in the events leading to the increase of her ownership percentage of Bancshares, we do not believe ________ will acquire control of Bank by operation of the Plan.

Our determination applies to the present set of circumstances. Any purchase of any shares of Bancshares, any agreement regarding voting of such shares, or any other action which may be construed to be exercising control over Bank in accordance with the provisions of Section 700 et sea., will raise the rebuttable presumption of control. The Department strongly recommends that contact us in the future before any such purchase or action is undertaken.

If you have any further questions or comments regarding this matter, please do not hesitate to contact me.

Very truly yours,

Superintendent of Banks




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Last updated: Jun 28, 2019 @ 11:59 am