RELATIVE TO THE APPLICATION OF
UNITED COMMERCIAL BANK, SAN FRANCISCO, CALIFORNIA
TO MERGE WITH
ASIAN AMERICAN BANK & TRUST COMPANY
United Commercial Bank, San Francisco, California ("United" or the "Petitioner") has applied to the Division of Banks (the "Division") for permission to merge with Asian American Bank & Trust Company ("Asian American"), Boston, Massachusetts pursuant to the provisions of Massachusetts General Laws chapter 167, section 39B under the terms of an Agreement and Plan of Reorganization (the "Agreement") dated as of August 2, 2005. The Agreement provides for the merger of Asian American with and into United under the charter and by-laws of United and under the name of United Commercial Bank. The main office of United would remain the main office of the continuing institution and the three banking offices of Asian American will become branch offices of the continuing bank. This transaction is also part of a multi-step transaction which included an application before the Board of Bank Incorporation in which UCBH Holdings, Inc, San Francisco, California will acquire Asian American. UCBH Holdings, Inc. is the holding company of the Petitioner.
Notice of the application has been posted and published. The time period for interested persons to submit documents has passed. Accordingly, all documents and materials related to this multi-step transaction have been reviewed. The record has been considered with regard to the financial and managerial resources of each bank, the competitive effects of the proposed transaction, the convenience and needs of the communities to be serviced by the continuing institution, the record of performance under the Community Reinvestment Act ("CRA") of the banks involved in the transaction and other applicable criteria.
United is a California-chartered bank. At June 30, 2005, United had total assets of approximately $7.033 billion. Its 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.
Asian American is a Massachusetts-chartered trust company which operates a main office in Boston's Chinatown neighborhood and branch offices in Quincy and Allston. It has full commercial banking powers. At June 30, 2005, Asian American had total assets of $127.1 million.
As an interstate transaction, the reciprocity of the law of the Petitioner'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. I have determined that California law is reciprocal and does expressly authorize a similar transaction by a Massachusetts bank under conditions no more restrictive than those imposed by chapter 167, section 39B of the General Laws. Additionally, a Massachusetts banking institution has previously been approved to merge with and into a California bank in 2002. Accordingly, the proposed transaction is permissible under the Commonwealth Interstate Banking Act.
Materials have been submitted to address the issue that competition among banks will not be unreasonably affected by the proposed transaction. The branch offices and ATM system of United is located on the West Coast in the states of California and New York. It operates representative offices in China and Taiwan but has no business presence of any kind in Massachusetts. Asian American conducts no business activities of any kind outside of its Boston market area. Since United and Asian American have no banking markets in common and United will continue to operate Asian American's three offices after consummation of the merger, the proposed transaction will not unreasonably impact competition among banking institutions.
The application notes that no current members of the board of directors of Asian American will become directors of the merged institution. However, at least two people from Asian American will continue to serve in executive officer capacity with United upon consummation of the proposed transaction. Financial analysis of the transaction has been considered. Accordingly, upon review, financial and managerial considerations support the application.
As a result of the merger, Asian American indicates that the banking public will benefit in several ways. United offers a broader range of banking products and services than Asian American. These products include international trade financing, letters of credit for imports and international trade documentary services. United also has experience in lending to emerging growth and high technology companies and would bring this experience to the high technology market in Massachusetts. United would also bring state-of-the-art internet banking products and services to customers of Asian American. The Division considered these reasons and others cited in the submitted documents in determining that public convenience and advantage will be promoted by approval of this transaction.
In determining whether or not to approve a petition under the statutory criteria, the Commissioner is also required to consider a showing of "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, which the Commissioner may deem necessary. The applicant bank has addressed this requirement. According to the Petitioner, the merger will result in a larger institution with an additional $200 million in capital and will enhance the continuing bank's financial capability to invest in the communities it serves and to significantly increase the financial levels at its Massachusetts branch offices. 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. In addition, United stressed its commitment to a bi-lingual financial literacy program for the communities served by Asian American.
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 of personnel by the Division as well as analysis of concerns received from the bank's community and its response to those concerns fairly raised. A publicly available descriptive rating and evaluation by a federal bank regulatory agency will also be considered. Upon review, the Division has noted that United received a rating of "Outstanding" and Asian American a rating of "Satisfactory" in their most recent CRA performance examinations. Accordingly, the Division's review of factors related to public convenience and advantage are consistent with approval of the Petitioner's application.
Upon review of this application with reference to the relevant statutory and regulatory criteria, the Division has concluded that all such requirements have been met and that consummation of the proposed merger would be in the public interest. On the basis of these considerations, approval is granted for Asian American to merge with and into General under the charter and by-laws of Untied and under the name United Commercial Bank pursuant to Massachusetts General Laws chapter 167, section 39B and the applicable provisions of chapter 172 of the Massachusetts General Laws. Approval is also granted for United to maintain the three banking offices of Asian American as branch offices.
The approvals granted herein are subject to the following conditions:
- that the merger of Asian American and United shall not become effective until a certificate signed by the Presidents and Clerks or other duly authorized officers of the banks involved in the merger indicating that each such institution has complied with the provisions of Massachusetts General Laws chapter 167, section 39B, or other applicable statute, has been returned;
- that the proposed transaction shall not become effective until Articles of Merger are filed with the Secretary of State;
- that, in accordance with said section 39B, the banking offices of Asian American to be maintained as branch offices of the continuing bank shall be subject to the supervision of the Division and these offices must comply with all provisions of the Community Reinvestment Act and all consumer protection statutes in the Commonwealth; and
- that the proposed merger shall be consummated within one year of the date of this decision.
|November 23, 2005|
|Steven L. Antonakes|
Commissioner of Banks