N.Y. Banking Law § 143-b: Acquisition by companies of control of banking institutions

§ 143-b. Acquisition by companies of control of banking institutions.

1. It shall be unlawful except with the prior approval of the

superintendent for any company to acquire control of any banking

institution, directly or indirectly, provided, however, that the

provisions of this section shall not apply to a company which has

submitted to the superintendent a plan of acquisition pursuant to

section one hundred forty-three-a of this article for an acquisition not

involving a change of control of the banking institution. As used in

this section, the term "control" means the possession, directly or

indirectly, of the power to direct or cause the direction of the

management and policies of a banking institution, whether through the

ownership of voting stock of such banking institution, the ownership of

voting stock of any company which possesses such power or otherwise.

Control shall be presumed to exist if any company, directly or

indirectly, owns, controls or holds with the power to vote ten per

centum or more of the voting stock of any banking institution or of any

company which owns, controls or holds with power to vote ten per centum

or more of the voting stock of such banking institution, but no person

shall be deemed to control a banking institution solely by reason of his

or her being an officer or director of such banking institution or

company. The superintendent may in the superintendent's discretion, upon

the application of a banking institution or any company which, directly

or indirectly, owns, controls or holds with power to vote or seeks to

own, control or hold with power to vote any voting stock of such banking

institution, determine whether or not the ownership, control or holding

of such voting stock would constitute control of such banking

institution for purposes of this section.

2. A company desiring to acquire control of a banking institution may

file application therefor, in writing, with the superintendent and pay

an investigation fee as prescribed pursuant to section eighteen-a of

this chapter to the superintendent. The application shall contain such

information as the superintendent, by rule or regulation, may prescribe

as necessary or appropriate for the purpose of making the determination

required by subdivision three of this section.

3. Upon receipt of such application, the superintendent shall post

notice of the receipt thereof upon the bulletin board of the department

of financial services. The superintendent shall by order grant or deny

the application and shall state the reasons for such grant or denial. An

order shall be issued within one hundred twenty days after the date of

the submission of the application to the superintendent and a copy

thereof shall be posted upon the bulletin board of the department of

financial services. In determining whether or not to approve any such

application, the superintendent shall take into consideration (i) the

declaration of policy contained in section ten of the chapter, (ii)

whether the effect of such action shall be consistent with adequate or

sound banking and the preservation thereof, or result in a consolidation

of assets beyond limits consistent with effective competition, (iii)

whether such acquisition of control may result in such a lessening of

competition as to be injurious to the interest of the public or tend

toward monopoly, and (iv) primarily, the public interest and the needs

and convenience thereof.

4. A company does not control a banking institution by virtue of its

ownership or control of: (a) stock acquired by a company in good faith

in a fiduciary capacity, except where such stock is held for the benefit

of stockholders or members of such company; (b) voting rights of stock

acquired in the course of a proxy solicitation by a company formed for

the sole purpose of participating in proxy solicitations by virtue of

its control of voting rights of stock acquired in the course of such

solicitation; (c) stock acquired by a company in connection with its

underwriting of securities if such shares are held only for such period

of time as will permit the sale thereof on a reasonable basis; (d) stock

acquired by a company in settlement or reduction of a loan, or advance

of credit, or in exchange for an investment previously made in good

faith and in the ordinary course of business, provided that any stock so

acquired shall be disposed of within a period of two years from the date

upon which it was acquired unless the superintendent shall, in writing,

authorize such banking institution to hold such stock for a longer

period; or (e) stock dividends, stock splits, or additional stock

acquired by a bank holding company, or by any subsidiary thereof, in

exercise of its preemptive right as a stockholder.

5. For a period of six months from the date of qualification thereof

and for such additional period of time as the superintendent may

prescribe in writing, the provisions of subdivisions one, two and three

of this section shall not apply to a transfer of control by operation of

law to the legal representative, as hereinafter defined, of a company

which has control of a banking institution. Thereafter, such legal

representative shall comply with the provisions of subdivisions one and

two of this section. The provisions of subdivision three of this section

shall be applicable to an application made under this section by a legal

representative.

The term "legal representative," for the purposes of this section,

shall mean one duly appointed by a court of competent jurisdiction to

act as executor, administrator, trustee, committee, conservator or

receiver, including one who succeeds a legal representative and one

acting in an ancillary capacity thereto in accordance with the

provisions of such court appointment.

If any provision of this section, or the application of such provision

to any individual, company, corporation or circumstance, shall be held

invalid, the remainder of this section, and the application thereof to

anyone other than one to which it is held invalid, shall not be affected

thereby.