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AT-il
INTERAGENCY BANK MERGER ACT APPLICATION
Check all that apply:
91
0
181
0
Filed Pursuant To
Form of Transaction
Type of Filing
Affiliate/Corporate Reorganization
Combination with Interim
Depository Institution
Nonaffihiate Combination
Other
ll Merger
0 Consolidation
U Purchase and Assumption
U Branch Purchase and Assumption
El Other
151
0
0
0
181
12 U.S.C. 1828(c)
12 U.S.C. 1815(d)(2)
12 U.S.C. 1815(d)(3)
12 U.S.C. 215, 215a
Other
12 U.S.C. 1831u
ARS. 6-322 Cal. Fin
Code H 1684, and
4901(c).
Applicant Depository Institution
Western Alliance Bank
FDIC Cert. No. 57512
Charter/Docket Number
Name
Phoenix
Arizona
City
State
85004
Zip Code
Target Institution
FDIC Cert. No. 32707
Centennial Bank
Charter/Docket Number
Name
18837 Brookhurst Street, Suite 100
Street
Fountain V
California
City
State
92708
Zip Code
Resultant Institution (if different than Applicant)
Same as Applicant
Name
Charter/Docket Number
Street
State
City
Zip Code
Contact Person
Jeffrey L. Hare
Partner/DLA Piper LLP (US)
Name
Title/Employer
Washington
D.C.
City
State
20004
Zip Code
(202) 799-4375
(202) 799-5375
[email protected]
Telephone Number
Fax Number
Email
INTERAGENCY BANK MERGER ACT APPLICATION
1. Describe the transaction’s purpose, structure, significant terms and conditions, and
financing arrangements, including any plan to raise additional equity or incur debt.
Western Alliance Bank (the "Applicant") is a state-chartered, nonmember bank located in
Phoenix, Arizona. The Bank is the wholly owned subsidiary of Western Alliance
Bancorporation (the "Company"), which is also the parent holding company of the Bank of
Nevada, a state-chartered, nonmember bank located in Las Vegas, Nevada, and Torrey Pines
Bank, a state-chartered, nonmember bank located in San Diego, California. The Applicant is
subject to the supervision and regulations of its chartering authority, the Arizona Department of
Financial Institutions (the "Arizona DFI"), and the Federal Deposit Insurance Corporation (the
"FDIC") as its primary federal regulator.
The Applicant is filing this Interagency Bank Merger Act Application (the "Application")
(i) with the FDIC pursuant to the Bank Merger Act’ and the Riegle-Neal Interstate Banking and
Branching Efficiency Act of 1994 (the "Riegle-Neal Act"); 2 and (ii) with the Arizona DFI
pursuant to Articles 3 and 4 of Chapter 1, and Articles 13 and 7 of Chapter 2, of Title 6 of the
Arizona Revised Statutes, 3 for approval of the proposed merger with Centennial Bank, an
industrial bank and insured depository institution located in Fountain Valley, Orange County,
California (the "Target"). The Target is subject to the supervision and regulation of the
California Department of Financial Institutions (the "California DFI") and the FDIC. A copy of
this Application has been provided to the California DFI for consideration of the Interim Merger
(defined below) under Section 4825 of the California Financial Code and of the Merger under
Sections 1684 and 4901(c) of the California Financial Code.
The Applicant believes that the proposed merger with the Target represents a unique
opportunity to acquire an increased presence in the Southwest, and the proposed transaction will
have substantial financial benefits to the Applicant. The Applicant has discussed the transaction
with the FDIC, the Arizona DFI and the Federal Reserve Bank of San Francisco and believes it
represents an approvable transaction that will serve the banking needs of the communities to be
served.
Background.
All of the Target’s outstanding shares are owned by Orange County Bancorp ("OCB"),
which, in turn, is the wholly owned subsidiary of LandAmerica Financial Group, Inc., a Virginia
corporation in dissolution ("LFG"). Neither LFG nor OCB is registered as a bank holding
company because the Target is an industrial bank meeting certain criteria to be excluded from
the definition of "bank" under the Bank Holding Company Act of 1956 (the "BHC Act").
l
2
12 U.S.C. 1828(c). See also, 12 C.F.R. §§ 303.60-303.65.
12 U.S.C. § 1831u.
Ariz. Rev. Stat. §§ 6-121 to 6-139, 6-141 to 6-153, 6-211 to 6-217, and 6-321 to 6-331, respectively.
12 U.S.C. § 1841 etseq. The exception from the definition of "bank" for industrial banks is found at 12 U.S.C.
§ 1841(c)(2)(H).
2
cant
executed a definitive agreement (the "Merger Agreemeæf’) toquire the Target through afultistep merger transaction (the "Merger"). Further details regarding the Merger are set forth in the
Merger Agreement and the short form agreement and
jp of merger betwithe Applicant and Target (the "Short Form Merger Agreement")
Step One
OCB will merge downward into the Target and the Target becomes the direct
wholly owned subsidiary of LFG (the "Prior Reorganization "). 5
Step Two
The Target will merge with a newly created interim subsidiary of the Applicant
(the "Merger Sub"), with the Target as the resulting institution, but with all of its
shares owned by the Applicant (the "Interim Merger"). The Merger Sub will have
no activities or operations or serve no function other than as a vehicle to facilitate
the Merger. As a result of the Interim Merger, the Target will be, for a moment in
time, a subsidiary of the Applicant and an indirect subsidiary of the Company. 6
Step Three
Immediately following the Interim Merger, the Target will merge into the
Applicant in the Merger with the Applicant as the resulting institution. The
Target ceases to exist as a separate corporate entity and, in accordance with
applicable state and federal law, will surrender its charter to the California DFI
and its certificate of deposit insurance to the FDIC.
The current organization structure of the relevant entities is depicted below in Illustration
1. Each of the three multi-steps described above is depicted below in Illustration 2. The
resulting or final organization structure of the relevant entities is depicted below in Illustration 3.
Illustration I
Current Organization Structure
(reflecting relevant entities):
anco
atio
100%
NØstErr.
Ii ncØ an
6
Note that the parties are not seeking approval of the Prior Reorganization pursuant to this Application. Instead,
the Target is filing a separate Interagency Bank Merger Act Application to seek approval of the Prior
Reorganization and the Merger for which the Applicant seeks approval with this Application is contingent on
the consummation of the Prior Reorganization.
Note that Applicant is seeking approval for the Interim Merger and the Merger with this Application, and they
are referred to collectively sometimes in this Application as the Merger.
Illustration 2
Multi-Step Merger Transaction
Step One
(reflecting relevant entities):
-
LWe’ll!1
___________
100%
100%
Merger with
Centennial Bank
as the Survivor
100%
Formation of
Merger Sub
Step Two-
100%
fl__C
100%
Step Three
_’
1111111K.M
Reverse merger with
Centennial Bank, the
Survivor, becoming a
subsidiary of Western
Alliance Bank
lIiaace an
100%
-
MEN% 1i
100%
es
-
lila
Merger with
Western
Alliance Bank as
the Survivor
Illustration 3
Final Organization Structure
(reflecting relevant entities):
1
4
Other Terms and Conditions
As set forth more fully in the Merger Agreement, the Applicant will pay cash
for all of the Target’s issued and outstanding capital stock, which
will be acquired in the Merger. As additional consideration, the Applicant will permit the
distribution of two loans (the "Specified Loans") to LFG immediately prior to the Merger and
will pay up to in the Target’s and LFG’s transaction-related expenses. The cash
consideration may be increased by up to an additional if the Target sells the
Specified Loans prior to closing, and may be reduced to the extent the Target’s and LFG’s
- The Company plans to contribute
transaction-related expenses exceed
of capital to the Applicant and to acquire approximately 10111INWof classified assets from the
Applicant following the Merger. In accordance with its liquidity planning objectives, the
Company expects to engage in a small debt offering during 2013 to increase liquidity at the
holding company level, but the Merger is not contingent on the debt offering. The Company and
the Applicant do not plan to raise any additional equity or incur additional debt in order to
directly finance the Merger.
In accordance with the requirements of state and federal law, public notices have been
submitted to newspapers of general circulation in Orange County, California, and Phoenix,
Arizona. The notices have been or will be published in the Orange County Reporter and The
Record Reporter on January 25, February 6 and February 20, 2013.
Affidavits of publication from the relevant newspapers
will be provided when they are available.
Provide a copy of (a) the executed merger or transaction agreement, including any
amendments, (b) any board of directors ’ resolutions related to the transaction, and (c)
interim charter, names of organizers, and related documents, if applicable.
Resolutions of the board of directors of
ihe Applicant and the Target authorizing the transactions contemplated by the Merger Agreement
are provided as Confidential Exhibit 4.
-
3. Describe any issues regarding the permissibility of the proposal with regard to
applicable state or Federal laws or regulations (for example, nonbank activities,
branching, qualified thrift lender ’s test).
Although the Target is not a "bank" within the meaning of the BHC Act, the Target is
permitted by law to only engage in activities permissible for banks under the Federal Deposit
Insurance Act and bank holding companies under the BHC Act. The Target’s primary line items
on its balance sheet consist of commercial real estate loans, savings accounts and certificates of
deposit. Based on its due diligence review, the Applicant is not aware of any activities,
investments, holdings or assets of the Target that are not permissible for the Applicant.
Please see the response to Item 9 regarding application of the Riegle-Neal Act to the
Merger.
4. Describe any nonconforming or impermissible assets or activities that Applicant or
Resultant Institution may not be permitted to retain under relevant law or regulation,
including the method of and anticipated time period for divestiture or disposal.
The Applicant is not aware of any nonconforming or impermissible assets or activities
that will be acquired from the Target as a result of the Merger under applicable state and federal
laws. The Applicant notes that, as of its most recent Call Report for the quarter ending
September 30, 2012, the Target had approximately in other real estate owned. The
Applicant will divest any such real estate acquired iifthe MFger in accordance with the FDIC’s
rules and policies on the divestiture of assets acquired in satisfaction of debts previously
contracted.
5. Provide the indicated financial information and describe the assumptions used to
prepare the projected statements, including those about the effect of the merger
transaction. Material changes between the date of the financial statements and the date
of the application should be disclosed. If there are no material changes, a statement to
that effect should be made.
a. Pro Forma Balance Sheet, as of the end of the most recent quarter and for the first
year of operation after the transaction. Indicate separately for the Applicant and
Target Institution each principal group of assets, liabilities, and capital accounts;
debit and credit adjustments (explained by footnotes) reflecting the proposed
acquisition; and the resulting pro forma combined balance sheet. Goodwill and all
other intangible assets should be listed separately on the balance sheet. Indicate the
amortization period and method used for any intangible asset and the accretion
period of any purchase discount on the balance sheet.
Pro forma balance sheets are included with the Application as Confidential Exhibit 6.
b. Projected Combined Statement of Income for the first year of operation following
consummation.
Projected income statements are included with the Application as Confidential Exhibit 7.
c. Pro Forma and Projected Regulatory Capital Schedule, as of the end of the most
recent quarter and for the first year of operation, indicating:
Each component item for Tier 1 (Core) and Tier 2 (Supplementary) Capital,
Subtotal for Tier 1 and Tier 2 Capital (less any investment in unconsolidated or
nonincludable subsidiaries), Total Capital (include Tier 3 if applicable).
Total risk-weighted assets.
Capital Ratios: (1) Tier 1 capital to total risk-weighted assets; (2) Total capital
to total risk-weighted assets; and (3) Tier 1 capital to average total consolidated
assets (leverage ratio).
Pro forma and projected regulatory capital schedules are included with the Application as
Confidential Exhibit 8.
6. List the directors and senior executive officers of the Resultant Institution and provide
the name, address, position with and shares held in Resultant Institution or holding
company, and principal occupation (if a director).
The directors and senior executive officers of the Applicant and Company, as the
resulting institution, will remain in place following the Merger. The Merger will not result in
any change to management or director composition for the Applicant or the Company. For your
reference, the information requested for each director and senior executive officer is provided in
Confidential Exhibit 9.
7. Describe how the proposal will meet the convenience and needs of the community. For
the combining institutions, list any significant anticipated changes in services or
products that will result from the consummation of the transaction. If any services or
products will be discontinued, describe and explain the reasons.
Following the Merger, the Applicant will offer the same products and services currently
offered by the Target in the relevant communities served by the Target, and plans to substantially
expand its product and service offerings to include all of those currently offered by the
Applicant. No reductions in the services or products that are offered are expected as a result
from the Merger for either the Target or the Applicant, and no changes are planned that would
reduce the manner in which the convenience and needs of the community are served by these
institutions. The Applicant intends to continue operating the Target’s office location in Fountain
Valley, California as a branch location following the Merger and does not intend to discontinue
any services or products offered at that location.
8. Discuss the programs, products, and activities of the Applicant or the Resultant
Institution that will meet the existing or anticipated needs of its community(ies) under
the applicable criteria of the Community Reinvestment Act (CRA) regulation, including
the needs of low and moderate-income geographies and individuals. For an Applicant
or Target Institution that has received a CRA composite rating of "needs to improve"
or "substantial noncompliance" institution-wide or, where applicable, in a state or a
multi-state MSA, or has received an evaluation of less than satisfactory performance in
an MSA or in the non-MSA portion of a state in which the applicant is expanding as a
result of the combination, describe the specific actions, if any, that have been taken to
address the deficiencies in the institution’s CRA performance record since the rating.
ank of Arizona to its current name, Western Alliance Bank.
The Applicant does not expect to change its CRA program, products and activities
following the Merger but will expand the market it serves to include the markets served by the
Target. The Applicant remains committed to meeting the convenience and needs of the
communities it serves and will deliver banking and credit products to low- and moderate-income
individuals in the new market it enters as a result of the Merger. Examples of the products and
services that the Applicant will provide include grants and initiatives, affordable housing,
9. The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 imposes
additional considerations for certain interstate mergers between insured banks.
Savings associations are not subject to 12 U.S.C. 1831u. If subject to these provisions,
discuss authority; compliance with state age limits and host state(s) filing requirements;
and applicability of nationwide and statewide concentration limits. In addition, discuss
any other restrictions that the states seek to apply (including state antitrust
restrictions).
The Riegle-Neal Act requires, among other things, that an out-of-state bank seeking to
merge with a bank in another state take certain actions and meet certain requirements in order to
consummate the transaction. in order to meet these requirements, the Applicant must, in relevant
part, (i) comply with any state filing requirements required by the California DPI; (ii) be below
state and federal concentration limits; and (iii) meet applicable age limits of the targeted
institution, Further, the Merger must involve financial institutions that are adequately capitalized
and, following the Merger, the Applicant will be a well-capitalized and well-managed institution.
Under California law, no approval from the California DFI is needed for the Target and
Merger Sub, as a California corporation, to merge in the Interim Merger. 7 Additionally, the
Merger of the Target and the Applicant, with the Applicant of the surviving institution is
permitted without approval from the California DFI if it complies with applicable California law,
and the laws of the Applicant’s chartering state. 8 A courtesy copy of this Application is being
provided to the California DFI, and the Applicant will provide any additional information
requested by the California DFI.
Cal. Fin. Code § 4825 (a California industrial bank may merge with a corporation that is not a depository
corporation if the industrial bank is the resulting institution and the merger complies with Division I of the
Corporations Code).
Cal. Fin. Code § 4901(c); see also Cal. Fin. Code § 1684(a)(1).
Under the Rieg1eNeal Act, the Merger can be approved unless the resulting bank would
control more than 10 percent of deposits nationally and 30 percent of the total deposits, including
the deposits any affiliates, in the state. For purposes of the FDIC’s Deposit Market Share
reports, as of June 30, 2012, the Target reported no deposits outside of California, including
Nevada or Arizona (the home states of the Applicant and its affiliate, Bank of Nevada) and
of deposits within the state of California, representing approximately 0.05 percent
of the state’s market share. The Applicant reported no deposits in California. Torrey Pines
Bank, an affiliate of the Applicant, reported no deposits outside the state of California and
within California, representing 0.17 percent of the state’s market sha re.
Accordingly, the Merger will not result in
the Applicant and its affiliated insured depository institutions exceeding any concentration limits
at the state or federal level.
Under California law, an out of state bank may acquire a California bank provided the
California bank has been in existence for at least 5 years. 9 The Target was established on or
around October 25, 1979 and received deposit insurance from the FDIC on November 3, 1989.
The proposed Merger thus satisfies the 5 year age requirement.
10. List all offices that (a) will be established or retained as branches, including the main
office, of the Target Institution, (b) are approved but unopened branch(es) of the
Target Institution, including the date the current federal and state agencies granted
approval(s), and (c) are existing branches that will be closed as a result of the proposal
to the extent the information is available and indicate the effect on the branch
customers served. For each branch, list the popular name, street address, city, county,
state, and ZIP code.
The Applicant will retain the Target’s main office location as a branch office following
the Merger. The location is at:
18837 Brookhurst Street, Suite 100
Fountain Valley, California, 92708
Cal. Fin. Code § 1685.
The Target does not have any approved but unopened branches. No existing branches of
the Applicant or Target will be closed in the Merger.
11. As a result of this transaction, if the Applicant will be or will become affiliated with a
company engaged in insurance activities that is subject to supervision by a state
insurance regulator, provide:
a. The name of company.
b. A description of the insurance activity that the company is engaged in and has plans
to conduct.
c. A list of each state and the lines of business in that state in which the company
holds, or will hold, an insurance license. Indicate the state where the company holds
a resident license or charter, as applicable.
Not applicable. The Merger will not result in the Applicant becoming affiliated with a
company engaged in insurance activities.
If a nonaffiliate transaction, the Applicant also must reply to items 12 through 14.
12. Discuss the effects of the proposed transaction on existing competition in the relevant
geographic market(s) where Applicant and Target Institution operate. Applicant
should contact the appropriate regulatory agency for specific instructions to complete
the competitive analysis.
The Applicant does not currently operate in the state, county or metropolitan-statistical
area in which the Target is located. The Target has no offices or locations, and reports no
of deposits
deposits, outside of California. As of June 30, 2012, the Target had if
within the state of California, representing approximately 0.05 percent of the state’s market
share. For purposes of the FDIC’s Deposit Market Share analysis, all of the Target’s deposits
were reported within Orange County, California, and represented 0.57 percent of the deposits
within the county and, within the Los Angeles-Long Beach-Santa Ana, California Metropolitan
Statistical Areas ("MSA"), represented 0.13 percent of the deposits.
summaries for Orange County and the Los Angeles-Lor Beach-Santa Ana, California MSA are
Within Orange County, California, there are
separate banking entities competing for bank customers of which none are currently affiliated
with the Applicant. Within the Los Angeles-Long Beach-Santa Ana, California MSA, there
were 145 banking organizations operating 2,481 offices competing for bank business.
The Applicant does not believe that the Merger will have a significant or appreciable
effect on existing competition. The Merger represents an opportunity for the Applicant to enter a
highly competitive banking market using an established depository institution but will not reduce
competition within the relevant geographic markets. The Target has no operations in the
geographic markets in which the Applicant operates.
13. If the proposed transaction involves a branch sale or any other divestiture of all or any
portion of the bank, savings association or nonbank company (in the case of a merger
under 12 U.S.C. 1828(c)(1)) to mitigate competitive effects, discuss the timing,
purchaser, and other specific information.
10
As noted in response to Items 9 and 12, above, the Applicant does not believe the Merger
will result in any negative competitive effect that needs to be mitigated. The Applicant does not
propose to divest any portion of its, or the Target’s, offices, branches or other assets to address
competitive issues.
14. Describe any management interlocking relationships (12 U.S.C. 3201-3208) that
currently exist or would exist following consummation. Include a discussion of the
permissibility of the interlock with regard to relevant laws and regulations.
The Applicant is not aware of any existing management interlocking relationships
involving the Applicant or the Target. As a result of the Merger, the Applicant does not expect
to make changes to its management officials which would trigger an interlocks issue.
11
CERTIFICATION
We hereby certify that our board of directors, by resolution, has authorized the filing of this applicatioi, and that to
thebest of our knowledgo, it contains no misrepresentations or omissions of material facts. In additidn, we agrc :o
notifj the agency if the tts described in the filing materially change prior to
reediv - a decision or prior to
consummnion. Any misrcpresentation or omission of a material fact constitutes fraud in the inducement and may
subject usto legal sanctionsprovided by 18 U.S.C. 1001 and 1007.
We aelutowledge that approval of this application is in ’the discretion of the appropriate federal banking agency.
Actions or communications, whether oral, VTiIteU, or electronic, by an agency or its employees in connection with.
this filing, including approval of the applivationifgrand, do ftot constitute.a contact, either express or implied, or
any other Obligation binding un he "a-gency, .othei federal banking aunc.ks, the United Stares, any other agency or
entity of the United States, or ny officer or employee of the United States. Such actions or communications will
not affect the ability of any federal banking agency to exrisc its supervisoty, rcgulatory, or examination powers
underapplicable law and regulations. We further aclowlcdge. that the foregoing my not be waived or modified by
any employee or ngnt Of a federal banking agency or of the United States.
Si gpeLthis:25thdaoiJanuary
WESTERN ALLIANCE. BANXby
Applicant
2013
Signature..
fAorized Officer
Randall Theisen
TedName
Sr VitePres..&.Geteral Counsel
Title
CtNTE$N1ILBAN1( by
rgt1titUtipn
tgn.1Attt1rized Officer
James Lasher
TypectNthe
Executive Vice President
Title
cENNIALACQT.JX$ITION CIa y.
Merger Sub
Signature ofAuthorized Ofiiºr
Rª ridallTFheisen
Typed Nae
Secretary
Title
FEDERAL DEPOSIT INSURANCE CORPORATION
SUPPLEMENT TO INTERAGENCY BANK MERGER ACT APPLICATION
All FDIC Applicants should provide the following supplemental information with their
application:
15. This section supplements question 12 of the Interagency Bank Merger Act Application
for transactions between nonaffiliated parties. Additional guidance relating to the
FDIC’s consideration of the competitive factors in a proposed merger transaction is
contained in the FDIC’s Rules and Regulations (12 C.F.R. 303 Subpart D) and
Statement of Policy on Bank Merger Transactions (2 FDIC Law, Regulations, and
Related Acts (FDIC) 5145).
I. Delineation of the relevant geographic market(s).
The relevant geographic market includes the areas in which the offices to be acquired
are located and from which those offices derive the predominant portion of their loans,
deposits, or other business. The relevant geographic market also includes the areas
where existing and potential customers impacted by the proposed merger may
practically turn for alternative sources of banking services.
(a) Prepare schedules for the Applicant Institution and Target Institution showing the
total number of accounts and total dollar volume of deposits1 for each municipality
or census tract, where applicable, according to the recorded address of the depositor
(do not submit supporting data). Small amounts may be aggregated and identified
as "other." If the Applicant Institution is a multi-office institution, Applicant
Institution deposit information should be provided only for those offices within or
proximate to the area(s) described below under paragraph (b).
As of June 30, 2012, the Applicant (16 offices in 2 states, Nevada and Arizona) and the
Target (1 office in 1 state, California) reported deposits:
- -- Applicant
Number of
Dollar Value
Location
(in S000s)
Accounts
IDI,Is)flliTTi111i1I’
-
Paradise Vflk’
Phoenix
In most cases, total deposits will serve as an adequate proxy for the overall share of banking business in the
relevant geographic market area; however, other analytical proxies may be appropriate in certain cases (for
example, a merger transaction involving trust companies).
13
T1
ilh1I
V1TWhrs]i
I1M1i
11lIiD
Phoenix 2901 N. Central Ave.
Phoenix 2701 East Camelback Road
Pima County
Tucson 200 South Craycroft Road
Tucson 4703 E. Camp Lowell Drive
Yavapai County
Sedona
Nevada
Carson City County
Carson City
Churchill County
Fallon
Washoe County
Reno 5335 Kietzke Lane
Reno 6290 Sharlands Avenue
Sparks 980 South Mccarran Blvd.
Sparks 725 Sparks Blvd.
Sparks 381 Los Altos Parkway
-
-
-
-
-
-
-
-
(b) Identify those areas where existing and potential customers of the offices to be
acquired may practically turn for alternative sources of banking services. If
consideration of the availability of such alternative banking services results in a
market area considerably different from that indicated by the sources of deposits,
discuss and provide necessary supporting information.
As noted above, the Target operates in .a highly competitive market. Within Orange
County, California, there are 94 separate insured depository institutions and 694 office locations
competing for bank customers of which none are currently affiliated with the Applicant. Within
the Los Angeles-Long Beach-Santa Ana, California MSA, there were 145 banking organizations
operating 2,481 offices competing for bank business. Accordingly, customers of the Target have
tremendous access to numerous alternative banking services within the same location and area
currently served by the Target’s sole location.
14
(c) Using the information collected in paragraphs (a) and (b), provide a narrative
description of the delineated relevant geographic market(s).
The Target operates solely from one location within Orange County, California. The
location is within the Los Angeles-Long Beach-Santa Ana, California MSA, where the number
of banking offices and locations reflects strong competition for bank customers. Pursuant to the
Merger, the Applicant will establish a position in the market and bring greater financial strength
and competition for existing market participants. Given the small market share of the Target,
nothing in the Merger poses any potential harm to competition. Finally, the Target does not
operate in the relevant states or MSAs currently served by the Applicant, and the Merger will not
impact the market share or market power of financial institutions located in Arizona and Nevada.
(d) Provide any additional information necessary to support the delineated relevant
geographic market(s). Supporting information may include relevant demographic
information, locations of major employers, retail trade statistics, and/or information
on traffic patterns. Applicants may consult with the applicable FDIC Regional Office
in determining whether additional information is necessary.
The Applicant welcomes the opportunity to respond to, and provide additional
information regarding, the relevant geographic market upon request.
H. Competition in the relevant geographic market(s).
(a) Prepare a schedule of participating and competing banking institutions’ offices,
divided into three sections:
Applicant Institution offices within or proximate to the relevant geographic
(1)
market(s);
Target Institution offices within or proximate to the relevant geographic
(ii)
market(s); and
Competitor banking offices located or competing within the delineated
(iii)
relevant geographic market(s).
To the extent known, also include banking offices approved but not yet open. The
following presentation format is suggested:
Name and Location of Banking
Office
Total
Deposits
Distance and Direction From
Nearest Office
Applicant
Target
Institution
Institution
The Applicant does not operate any office locations within or proximate to the relevant
geographic market defined above. The Target’s office location is some 360 miles away from the
Applicant’s locations in Phoenix, Arizona. None of the Applicant’s other locations are within
400 miles of the Target’s office location. The Applicant does not have a banking office within or
proximate to the relevant geographic markets defined for purposes of the Merger.
15
As noted above, the relevant geographic market has a number of competitors. Within
Orange County, California, there are 94 separate insured depository institutions and 694 office
locations competing for bank customers of which none are currently affiliated with the
Applicant. Within the Los Angeles-Long Beach-Santa Ana, California MSA, there were 145
banking organizations operating 2,481 offices competing for bank business. Accordingly,
customers of the Target have tremendous access to alternative banking services within the same
location and area currently served by the Target’s sole location.
(b) For each office listed in paragraph (a), provide the street address; total deposits as
FDIC Summary of Deposits Data Book
reported in the most recent
(www.fdic.gov/databank); and distance and general direction from the nearest office
of Applicant and Target Institution. In cases where the delineated relevant
geographic market includes a significant portion of a larger metropolitan area, provide
only a listing of financial institutions and the aggregate total deposits of all offices
operated by each within the delineated relevant geographic market(s).
(c) Discuss the extent and intensity of competition in the delineated relevant geographic
market(s) provided by nonbank institutions, such as other depository institutions
(for example, credit unions) and non-depository institutions (for example, industrial
loan companies, finance companies, and/or government agencies). For those
institutions regarded as competing in the delineated relevant geographic market(s),
provide name, address, and services supplied.
Many credit unions and other non-depository institutions provide banking services in the
evant geographic market.
lip
the Applicant does not believe that additional
inTarmation regarding these non-bank instituti6iiIs necessary for the FDIC to determine that the
Merger presents no potential competitive harm. The Applicant welcomes the opportunity to
respond to, and provide additional information regarding, competition upon request.
17