RELATIVE TO THE APPLICATION OF
UCBH HOLDINGS, INC.
AND ITS WHOLLY OWNED SUBSIDIARY
UNITED COMMERCIAL BANK, SAN FRANCISCO, CALIFORNIA
ASIAN AMERICAN BANK & TRUST COMPANY, BOSTON, MASSACHUSETTS
UCBH Holdings, Inc. ("UCBH") and its wholly owned subsidiary, United Commercial Bank, ("United"), San Francisco, California have petitioned the Board of Bank Incorporation (the "Board") pursuant to the provisions of Massachusetts General Laws chapter 167A, sections 2 and 4 to acquire Asian American Bank & Trust Company ("Asian American"), Boston, Massachusetts. The application before the Board is part of a multi-step transaction involving the merger of Asian American with and into United. The merger application is before the Commissioner of Banks. Following the merger, the banking offices of Asian American will become branches of United.
Notice of the application was published and posted as directed by the Board, thereby affording opportunity for interested parties to submit comments. Other standard procedures informing the public of this matter before the Board were implemented. The Board held a public hearing on the petition on November 9, 2005. At the hearing several representatives of UCBH and United, as well as a representative of Asian American made presentations and responded to questions from the Board. On November 16, 2005, the Board received additional information which supplemented responses made to three matters raised by the Board. The comment period on the proposed transaction ended November 18, 2005.
The Board has reviewed the application and oral testimony received at the public hearing and received in the supplemental filing. That review focused on the statutory and administrative criteria which includes, among other things, whether competition among banking institutions will be unreasonably affected; whether public convenience and advantage would be promoted; and the record of performance under the Community Reinvestment Act ("CRA") by the two involved banks. The additional statutory requirements set out in sections 2 and 4 of said chapter 167A were also significant factors in the Board's deliberations on the matter before it. All such requirements are specifically addressed in the application documents.
One such statutory provision requires the Board to have received notice from the Massachusetts Housing Partnership Fund (the "MHPF") that satisfactory arrangements have been made by United consistent with statute and the MHPF's various affordable housing loan programs. The Board received notice from the MHPF that arrangements satisfactory to it had been made for this transaction in a letter dated October 18, 2005.
As an interstate transaction, the reciprocity of the law of United's home state must be reviewed. Under Massachusetts law, the determination of reciprocity of the laws of another state rests solely with the Commissioner of Banks. The Commissioner has ruled that California law is reciprocal and does expressly authorize a similar transaction by a Massachusetts bank holding company under conditions no more restrictive than those imposed by Chapter 167A. Moreover, the Board is aware that on more than one occasion it has approved a holding company in Massachusetts to acquire a bank in California and that the Commissioner has approved a Massachusetts-chartered bank to merge with a bank in California and retain those banking offices in California as branch offices. Accordingly, the proposed transaction is permissible under the Commonwealth's Interstate Banking Act and therefore, the Board will proceed to consider whether the other statutory requirements are met by this application.
UCBH is a Delaware corporation and a registered holding company under the Bank Holding Company Act. It had total assets on a consolidated basis of approximately $7.037 billion at June 30, 2005. UCBH owns all of the outstanding stock of United, a California state-chartered bank. UCBH functions primarily as a holding company for United. United's main office is located in San Francisco, California and it operates forty-six branch offices in California, two branch offices in greater New York City, and a branch office in Hong Kong. United also operates representative offices in China and Taiwan. At June 30, 2005, United had total assets of approximately $7.033 billion.
Asian American is a Massachusetts-chartered trust company with full commercial banking powers. It was established in 1993 to serve the banking needs of the Asian American community in the greater Boston area. Asian American operates a main office in Boston's Chinatown neighborhood and branch offices in Quincy and Allston, Massachusetts. At June 30, 2005, Asian American had total assets of $127.1 million.
The Board has reviewed the transaction to determine that competition among banks will not be unreasonable affected by the proposed acquisition. It is the position of the Board to consider a transaction light of its impact on the citizens, communities and banking structure in the Commonwealth on a community by community basis. As set out in the application, there is no overlap in the banking offices of United and Asian American since they conduct business in different states. Upon review the Board does not find that the transaction will unreasonably affect competition.
The Board has considered whether public convenience and advantage will be promoted by this transaction. United's application and testimony at the public hearing offered reasons why this criteria is met. The acquisition of Asian American by, and subsequent merger of Asian American into it if the application before the Commissioner of Banks is approved, will result in additional products and services being available to customers of Asian American. United's expertise in international trade has been noted in its application and testimony as well as its expertise in lending to companies in the high technology market. Additionally, the application provides a full listing of the commercial lending and residential mortgage loan products of United. Numerous deposit accounts with varied features will become available to the banking customers of Asian American. In the application and the supplemental filing, United presented information on its financial literacy programs.
Related to the issue of public convenience and advantage is the record of performance under CRA by the banks which are parties to this transaction. Such review for a Massachusetts state-chartered bank includes examination by personnel of the Division of Banks as well as analysis of concerns received from the bank's community and its response to those concerns fairly raised. For other institutions, the Board looks to a publicly available descriptive rating and evaluation by a federal or state bank regulatory agency. The matter was specifically addressed at the public hearing. The Board has noted that United received an "Outstanding" rating in its last four examinations of performance under CRA while Asian American received a "Satisfactory" at its most recent examination conducted by the Commonwealth's Division of Banks. The Board's review of factors related to public convenience and advantage are consistent with approval.
The Board has considered United's analysis "net new benefits" related to the transaction. That term includes initial capital investments, job creation plans, consumer and business services, and commitments to maintain and open branch offices, among other factors. United has addressed this requirement. According to United, the acquisition will enhance the continuing bank's financial capability to invest in the communities it serves and to develop new products and services for its customers. The maintenance of Asian American's three banking offices as branch offices of the continuing bank as well as United's ability to provide future employment opportunities for Massachusetts residents are also cited as support for meeting such criteria. The impact of the transaction on jobs was discussed at the public hearing and further information was provided in UCBH's supplemental filing. The acquisition will also greatly increase the financial resources available to customers of Asian American and banking customers within the Commonwealth.
The financial aspects and tax consequences from the structure of the transaction were also considered by the Board. Management factors reviewed were also found supportive of approval. In compliance with section 4 of chapter 167A, executive officers who are residents of the Commonwealth will be retained by United. Additionally, all other requirements of statute relating to a bank holding company transaction have been met.
The application and supporting documents and the comments received at the public hearing have established an extensive record on this petition, which has been reviewed consistent with statutory provisions and the policies of the Board. Based on the record of this matter considered in light of all relevant statutory and administrative requirements, the Board finds that public convenience and advantage will be promoted and that competition among banking institutions will not be unreasonably affected and that record of performance under CRA by the banks involved in this transaction are consistent with its approval. Having considered the record established on this application, the Board has found that the applicable statutory and administrative criteria have been met and hereby approves the acquisition of Asian American by UCBH and United.
The approval herein is subject to the condition that all related transactions are completed within one year of date of this Decision.
|Steven L. Antonakes |
Commissioner of Banks
|Alan L. LeBovidge |
Commissioner of Revenue
|Timothy P. Cahill |
Treasurer and Receiver General
|November 23, 2005 |