Section 103.208 - Applications' Content(a) Applications filed pursuant to the provisions of Section 9200, 9202, 9203, 9215 and 9216 of the law shall contain all of the information herein required under subsections (c) through (q), inclusive of this section. They shall further contain a table of contents indicating titles and corresponding page numbers. All amendments shall be filed under cover of the application, shall be clearly identified as amendments, numbered consecutively, and shall comply with all pertinent requirements of the application.(b) Where the surviving association is a federal association, in lieu of the information required under the provisions of this section, the application may incorporate by reference information filed with the Federal Home Loan Bank Board provide three (3) copies thereof filed as an exhibit to the application.(c) Stock Ownership and Investment if Constituent Associations and in Holding Companies. (1) The total number of shares of stock outstanding for each constituent association on the date of the application. If the association has more than one class of stock or more than one series of stock, the total number of shares in each class and/or series.(2) On the date of filing the application, description and number of stock options, profit sharing, pension plans, employment contracts, and other employee benefit plans, if any, outstanding of the disappearing association and setting forth the method of handling them upon such merger.(3) The total number of shares of stock of the corporate holding company whose stock is being used to acquire the assets or the stock of the disappearing association. The latest available market price quotations (closing or bid and ask prices) for the stock of the corporate holding company and each association, and quarterly range of sales of bid and ask prices over the preceding two (2) years, if available, on the basis of any adequate market.(4) For any stockholder and affiliate, their officers and directors or partners and any associates thereof, who, on the filing date of the application, are known to own of record or beneficially then percent (10%) of the voting stock of any savings and loan holding company: (A) Name of savings and loan association or savings and loan holding company;(B) Number of shares held in each type of stock;(C) Percentage (of outstanding stock) held in each entity;(D) Number of shares acquired within one year prior to the date the application is filed.(E) Stockholder's name(s).(5) Total number of shares of stock of the surviving association which will be outstanding on the effective date of the merger.(6) For any stockholder and affiliate, their officers or directors or partners and any associates thereof, who directly or indirectly will own ten percent (10%) or more of the outstanding stock of any class and/or series of stock which carries a voting right of the surviving association when the merger becomes effective: (A) Stockholder's name(s);(B) Number of shares of each type of stock estimated to be held on the effective date of the merger;(C) Estimated percentage of the total outstanding stock held by said stockholders on the effective date of the merger.(7) For any constituent association that is a mutual association, the total number of voting rights on the filing date of the application. Specify the estimated appropriate number of votes represented by valid proxies held by the management.(8) For any "person" or "company" who owns of record or beneficially or controls ten percent (10%) or more of the voting proxies or voting rights (on the filing date of the application) of any constituent association that is a mutual association: (A) Name of the "person" or "company";(B) Number of proxies or voting rights held;(C) Number of proxies or voting right acquired within two years prior to the date the application is filed;1. Specify whether all of such proxies were solicited from the mutual shareholders in the name of such person or company.2. If such proxies were not solicited in the name of such person or company, whether they were acquired by substitution of a previous proxy holder or by some form of assignment or agreement, and set forth the consideration that may have been given for the acquisition of such proxies.(9) For any disappearing association that is a mutual association:(A) The amount of investment in the disappearing association of each officer, director and his associates of all constituent associations: 1. On the filing date of the application;2. One year prior thereto;3. Two years prior thereto.(B) Name, address, business and personal relationship, if any, to each constituent association and its officers and directors, of each person whose investment in the disappearing association on the record date for determination of ownership has increased more than $20,000 over his investment two years prior thereto, and the amount of his investment of each of the dates stated in (A) above.(d) Describe the nature and total dollar amount of business or financial transactions occurring within the past three years between each constituent association, with each affiliate, as defined in Section 5075 of the Financial Code, (including a description of the nature of such affiliate relationship) and with the holding company where the amount involved in the transaction or series of similar transactions exceeds the sum of $30,000 in any one year. (1) Describe any arrangements or agreements with respect to any affiliate which will be associated with or serving the surviving association or its borrowers.(e) A brief outline of the facts substantiating the fairness of the consideration, including: (1) The number of shares to be acquired by cash purchase, the amount proposed to be paid per share, and in total; the method by which the purchase price was determined and the source of the funds to be applied to the purchase.(2) The number of shares to be acquired by exchange of stock, the exchange ratio, the method by which the ratio was determined, and classes or series of shares to be exchanged.(3) The difference, if any, in per share amount of consideration to be paid to holders of various classes of stock, or of the same class.(4) The latest available market price quotations (closing or bid and ask prices) and trading volume for the stock of each association and each holding company, and quarterly range of sales or bid and asked prices over the preceding two years and trading volume, if available, on basis of an adequate market.(5) Statement of dividends for each year of the three years prior to the date of the application paid by each of the constituent associations and the dividends paid by the holding company if the holding company stock is to be a consideration in the transaction.(f) List of principal officers and proposed directors of surviving association, including a brief description of business experience, proposed salary, profit sharing, bonus, pensions, stock options and other similar benefits of each such officer and director.(g) Competitive Factors. (Date presented in this section should be consistent so that relationship between each constituent association and the surviving association can be adequately analyzed.) (1) Furnish map showing the location of all offices of each constituent.(2) Furnish a map showing the authorized lending territories of the surviving and disappearing associations.(3) A brief summary of the net effect of the proposed merger upon the lending territories of the constituent associations should be provided.(4) Include a comprehensive discussion setting forth any relevant statistics plus supporting statements as to the effect of this merger on competition for savings and for loans.(5) Furnish as of December 31 for each of the last three (3) calendar years and for the most recent month available the dollar amount of total assets, total savings, and real estate loans outstanding of the constituent associations, the dollar volume of real estate loans by each such constituent association for the last three (3) calendar years and the current calendar year to the end of the above most recent month.(6) For constituent associations which are overlapping lending institutions:(A) List each overlapping lending area defined as each area in which a significant volume of lending operations of a constituent association overlaps with a significant volume of lending operations of one or more of the other constituent associations. If an overlapping lending area lies within or mostly within a Standard Metropolitan Statistical Area then the overlapping lending area should be taken to be the Standard Metropolitan Statistical Area. In other case the overlapping lending area should be taken to be a county or group of contiguous counties in which the overlap occurs.(B) For each overlapping constituent association furnish as of the most recent feasible date the number and dollar volume of its real estate loans outstanding by county. This should be based upon a random sampling of at least thirty percent (30%) of the portfolio. Loan date should be shown as on the following Table 1. TABLE 1 |
For Each Overlapping Area |
SUMMARY OF LOAN DATA |
|
| Loans | No. of | Loans | No of. |
| Held by | Loans | Held by | Loans |
| Surviving | Held by | Disappearing | Held by |
| Association | Surviving | Association | Disappearing |
County | ($1,000) | Association | ($1,000) | Association |
(C) For each overlapping constituent association furnish the total number and dollar volume of total real estate loans made by county and state for the preceding calendar year and for the current calendar year to date.(D) For each of the counties that constitute a whole or part of any of the overlapping lending area or contain overlapping constituent associations, furnish data for each of the three (3) most recent calendar years on the following where available: 1. The number and dollar volume of trust deed recordings from all sources;2. The number and dollar volume of trust deed recordings where available for each major class of institutional lender: savings and loan associations, commercial banks, life insurance companies, and others;3. The number and dollar volume of trust deed recordings for each constituent association regardless of where the association is located.(E) List each overlapping savings area defined as each area in which a significant volume of the savings accounts of a constituent association overlaps with a significant volume of the savings accounts of one or more of the other constituent associations. The institutions above whose savings areas overlap to a significant degree shall be referred to as overlapping savings institutions and should be listed under the appropriate overlapping savings area.(F) For each overlapping savings institution take a random sampling of twenty percent (20%) of its savings accounts. This random sampling should be used to ascertain the number and dollar volume of savings accounts by census tracts or postal zip code and by counties of account holders. Savings data should be shown as on the following Table 2. TABLE 2 |
For each Overlapping Area |
SUMMARY OF SAVINGS DATA |
|
Zip | Savings | No. of | Savings | No. of |
Code | Held by | Accounts | Held by | Accounts |
or | Surviving | Held by | Disappearing | Held by |
Census | Association | Surviving | Association | Disappearing |
Tract | ($1,000) | Association | ($1,000) | Association |
(h) Financial Statements. (1) A statement of condition of each constituent association as of a date within ninety (90) days prior to the filing date of the application. In addition, the constituent associations shall include an audited statement of condition as of a date within one (1) year of the filing date of the application, in which case the statement of condition as of the end of the latest fiscal year may be unaudited, but the application shall also contain an audited statement of condition as of the end of the preceding fiscal year.(2) An audited statement of operations of each constituent association for each of the last three fiscal years and an interim unaudited statement of operations for the period between the end of the last fiscal year and the date of the latest statement of condition in the application. If the last fiscal year ended within ninety (90) days prior to the filing date of the application and an audited statement is not available for that fiscal year, there shall be included with the application audited statements of operations for the latest three years available and an unaudited statement of operations for the last fiscal year and following interim period.(3) A pro forma statement of condition and statement of operations giving effect to the proposed merger. The pro forma statement of condition shall be as of a date within ninety (90) days prior to the filing date of the application and as of the end of the preceding fiscal year. The pro forma statement of operations should cover the year to date period ended within ninety (90) days prior to the filing date of the application and the prior fiscal year.(4) Any differences from generally accepted accounting principles in the individual and pro forma financial statements which have a material effect on the financial statements shall be fully explained. The amounts and effects of those differences shall be stated.(5) A calculation of book value per share for each constituent association as of the same dates as the statement of condition referred to in (1) above and pro forma statements of condition referred to in (3) above.(6) A calculation of the earnings per share on a comparable basis for each constituent association as of the same dates as the statement of operations referred to in (2) above and pro forma statement of operations referred to in (3) above.(7) If the constituent association is a subsidiary of a corporate holding company, as defined by Section 11500 of the Financial Code, the applicant shall file both unconsolidated financial statements of the parent holding company and consolidated financial statements of the parent holding company and its subsidiaries as follows: (A) A statement of condition as of a date within ninety (90) days prior to the filing date of the application and an audited statement of condition as of a date within one (1) year of the filing date of the application unless the fiscal year of the constituent has ended within ninety (90) days prior to the filing date of the application, in which case the latest statement of condition may be unaudited, but the application shall also contain an audited statement of condition as of the end of the preceding fiscal year.(B) An audited statement of operations covering a fiscal year ended within one (1) year of the application filing date; provided that if the fiscal year of the constituent has ended within ninety (90) days prior to the filing date of the application, the audited statement of operations may cover the preceding fiscal year. An interim unaudited statement of operations shall also be included for the period, if any, between the close of the latest fiscal year and the date of the latest statement of condition.(C) If stock or obligations of the parent holding company are used as consideration for the transaction, include audited consolidated statements of operations covering the two (2) fiscal years prior to the year referred to in (B) above giving calculations of earnings per share for each fiscal year and book value per share as of the date of the statements of condition required in (A) above.(8) The audited financial statements shall be accompanied by the report of the independent accountant who examined such financial statements and by a letter from each independent accountant, dated not more than five (5) days prior to the date of the application, consenting to the use of his accountant's report in the applications.(9) When unaudited financial statements are used as the basis for determining the purchase price or value for the exchange, or when requested by the Commissioner, the independent accountant shall perform certain specified procedures with respect to the unaudited financial statements and issue a separate letter to the Commissioner describing the procedures performed. Such procedures as a minimum shall include: (A) A reading of the unaudited financial statements, comparison of such statements to the prior comparable period and, if practicable, agreement of such statements with the underlying books.(B) A test to determine if the unaudited financial statements include normal recurring accruals.(C) A reading of the minutes of the stockholders, shareholders and board of directors.(D) Appropriate inquiries to officials of the company and its subsidiaries who have responsibility for financial and accounting matter which may affect such financial statements.(i) Supplementary Information. Such other financial information as the Commissioner may require as to operating efficiency, market policy and performance, capital and profit experience.(j) Debt Securities. If debt securities are issued or assumed as consideration in connection with a proposed merger, the application shall clearly indicate the means by which the surviving entity intends to service the debt until the debt is fully amortized. The terms of any debt securities other than advances by the Federal Home Loan Bank should be described. If there are no debt securities, the applicant shall so state.(k) Taxability. State the basis for nontaxability (including applicable Internal Revenue Code sections) of the merger, reorganization, or acquisition. If the transaction is not tax-free either as to the association or the stockholders, it should be so stated and the estimated amount of any tax liability to the association should be stated.(l) Special Consideration. The application shall contain information: (1) Regarding any special consideration, monetary or otherwise, that has been paid, given, or offered, directly or indirect, to any stockholder, shareholder, directory or officer of any constituent association or of the holding company thereof in connection with the proposed merger or a statement that none has been paid or promised. Include information as to any formal or informal agreements relating to payment of compensation, after consummation of the proposed transaction, in any form, such as salary, bonus or retirement allowance, or consulting fee, showing to what extent and in what manner such information has been or will be disclosed to all stockholders or shareholders of the constituent association. If none, so indicate.(2) If any person to whom fees or commissions have been or are to be paid in connection with merger is an affiliate or associate, or a holding company of any constituent association, set forth the facts with respect thereto, including but not limited to: (A) Name of affiliate or holding company;(B) Description of service performed;(C) Basis for determination of amount of such fees, commissions, and expenses;(D) Name of the constituent association paying such fees, commissioners, and expenses.(3) Estimated Expenses. Information as to fees, commissions and expenses paid or incurred by the constituent associations to persons other than these mentioned in (1) and (2) above.(m) Advisory Opinions. The application shall contain an undertaking by the constituent associations to bear the expense of an advisory opinion to the Commissioner on the fairness of the terms of the merger, and as to any anticompetitive effects of the merger, should the Commissioner deem such advisory opinion necessary.(n) Address. List in the application the complete address of each branch office which will be acquired by the surviving association by reason of said merger.(o) Exhibits. (1) Certified copies of the resolutions of the board of directors of each constituent association authorizing the submission of the application for approval of merger.(2) If a stockholders' or shareholders' meeting is to be held or stockholders' or shareholders' approval obtained as required under Section 103.211: (A) Draft of proxy statement to be used.(B) Draft of stockholder's or shareholder's proxy (in form permitting a vote either for or against the merger) to be used.(C) Draft of written solicitation for consent of stockholder or shareholder approval.(D) Draft of notice of meeting of stockholders or shareholders to approve merger to be used.(3) Draft of all letters or other communications relating to the merger to be sent to stockholders, shareholders, investment certificate holders, and members. Copies of any proposed tender or exchange offer to stockholders.(4) Copy of merger agreement, any amendments thereto, and copy of any contract or agreement or any other means of acquisition providing for cash purchase or exchange of stock for the voting shares.(5) The documents referred to in (2) and (3) above shall not be used until approval of the Commissioner has been obtained. Such approval may be obtained prior to the filing of the application but submission thereof should be accompanied by a statement setting forth the details of the stock acquisition and information required under these regulations unless such information is furnished in the proxy statements.(p) Supplement to Application. Applicant shall file the following information either with the application or as a supplement to the application: (1) A copy of the notice that has been sent to each stockholder or shareholder by each constituent association showing the date on which approval of said merger by the stockholders or shareholders took place, which shall be filed ten (10) days after such approval.(2) Evidence of compliance with the applicable provisions of the Financial Code and the Corporations Code including but not limited to the provisions of each of the following sections of the Financial Code: Section 9207, 9209, 9210, 9213, 9215 and 9216. Applicant shall state the mailing date of notice to stockholders and/or shareholders specified in (1) above.(3) Where the vote required for the merger has been obtained by written consents, applicant shall attach a copy of the written consent and a certification by the secretary of the association obtaining consent as to the number of consents obtained and the stock or share interest represented thereby.(4) Copy of proxy statement used by each constituent association.(5) Copy of proxy and notice of meeting used by each constituent association.(6) Copy of all letters and other communications relating too the merger sent or proposed to be sent to stockholders, shareholders, investment certificate holders and borrowing members.(7) A copy of the notice that has been or will be sent to depositors, promptly after consummation of the merger, showing the effective date of the merger and the effect of the merger on the depositor's FSLIC insurance if they are also depositors of any other constituent association.(8) A statement setting forth the proposed form of the accounting for the merger by the surviving association. The statement shall describe the accounting method to be employed and set forth in reasonable detail the reasons justifying the accounting method and the underlying generally accepted accounting principles including a reference to the substantial authoritative support for such principles. If the surviving association has a parent company, the accounting method employed by the parent company should be described and any inconsistency with the accounting method employed by the subsidiary association should be fully explained and justified.
This statement may be prepared by management of the surviving association or by the independent accountant, it must contain an opinion that the proposed accounting treatment conforms with generally accepted accounting principles. If the statement is prepared by management of the surviving association, it shall be accompanied by an opinion from the independent certified public accountant who will audit the surviving association, it shall be accompanied by an opinion from the independent certified public accountant who will audit the surviving association that he has reviewed the proposed accounting treatment and concurs that it conforms with generally accepted accounting principles.
(9) The supplement shall be signed and verified that all copies attached are true copies in the same manner as the application by the chief executive officer and chief financial officer of the surviving association.(q) Marketing Policies and Programs. On and after November 1, 1976, each application filed under the provisions of this Subchapter shall describe how the marketing policies and programs of the surviving association, as described in the document maintained on file with the Commissioner pursuant to Section 104.504, would be changed or affected if the application is approved.(r) Consideration of Information. In reaching a decision on applications filed under this Subchapter, the Commissioner shall consider data received pursuant to this section.Cal. Code Regs. Tit. 10, § 103.208
1. Change without regulatory effect renumbering former Section 204.2 to Section 103.208 (Register 87, No. 14). For prior history, see Register 77, Nos. 32 and 11. Note: Authority cited: Section 5255, Financial Code. Reference: Section 5500-5515, 5700-5702, 6000, 6010, 8708, 9000, 9200-9218 and Chapter 10, Financial Code.
1. Change without regulatory effect renumbering former Section 204.2 to Section 103.208 (Register 87, No. 14). For prior history, see Register 77, Nos. 32 and 11.