July 5, 2023 

 

Agata S. Troy, Esq.

Luse Gorman, PC

5335 Wisconsin Avenue NW, Suite 780

Washington, D.C. 20015

Dear Ms. Troy: 

This is in response to your letter to the Federal Reserve Bank of 

Philadelphia (“Reserve Bank”), dated May 5, 2023, requesting a determination that no 

filing would be required under the Bank Holding Company Act of 1956 (“BHC Act”),1

for First Bank, Hamilton, New Jersey, a stand-alone state nonmember bank, to acquire 

Malvern Bancorp, Inc. (“Malvern”), a bank holding company, and its wholly owned bank 

subsidiary, Malvern Bank NA (“Malvern Bank”), both of Paoli, Pennsylvania. 

The purpose of the proposed transaction is to facilitate the merger of

Malvern Bank with and into First Bank. The transaction would occur as follows: 

(1) Malvern would merge with and into FB Merger Subsidiary LLC (“Merger Sub”), a 

wholly owned subsidiary of First Bank formed for the purpose of facilitating the 

transaction, with Merger Sub as the surviving entity; and (2) Malvern Bank would merge 

with and into First Bank, with First Bank as the surviving entity (“Bank Merger”).2

 You 

have represented that the above transaction steps would occur in immediate succession

and that First Bank would never operate Malvern Bank as a separate entity.

Section 3 of the BHC Act and the Board’s Regulation Y require the 

approval of the Board before any action is taken that causes any company to become a 

1

 12 U.S.C. § 1841 et seq. 

2

 You have represented that after consummation of the Bank Merger, Merger Sub would 

continue to exist for a period of time but would not own or control a depository 

institution and would not conduct any business activities. 
2 

bank holding company.3 Through the transaction described above, First Bank would 

become a bank holding company for a moment in time through its acquisition of Malvern 

Bank. Accordingly, First Bank would be required to obtain the Board’s approval under 

section 3 of the BHC Act and Regulation Y.

In order to avoid duplication of regulatory review by federal banking 

regulators, however, section 225.12(d)(2) of the Board’s Regulation Y provides that a 

bank holding company seeking to merge with another bank holding company or acquire 

control of a bank need not obtain the Board’s prior approval if the transaction is subject 

to review by a federal banking agency under section 18(c) of the Federal Deposit 

Insurance Act (“Bank Merger Act”)4 and meets certain other criteria.5

 Although section 

225.12(d)(2) does not apply to transactions that involve a depository institution becoming 

a bank holding company, your proposal is consistent with the purposes of that section.

The transaction requires the prior approval of the Federal Deposit Insurance 

Corporation (“FDIC”) under the Bank Merger Act.

6

 In reviewing the Bank Merger Act 

application, the FDIC must consider the impact the acquisition would have on 

competition, the financial and managerial resources and future prospects of the combined 

organization, the convenience and needs of the communities served by First Bank and 

Malvern Bank, the institutions’ records of performance under the Community 

Reinvestment Act, the institutions’ effectiveness in combating money laundering 

activities, and risks to the stability of the United States banking or financial system.7

 

These criteria are substantially similar to the criteria that the Board would consider under 

section 3 of the BHC Act.

8

At no time would Malvern Bank operate as a separate subsidiary bank of 

First Bank. Following the transaction, the separate corporate existence of Malvern Bank 

would cease, and First Bank would continue to operate as a state nonmember bank. 

3

 12 U.S.C. § 1842(a); 12 CFR 225.11.

4

 12 U.S.C. § 1828(c). 

5

 12 CFR 225.12(d)(2).

6

 12 U.S.C. § 1828(c). First Bank filed two Bank Merger Act applications with the 

FDIC, dated February 10, 2023, and March 30, 2023, requesting prior approval of the 

transaction. The FDIC provided the Board with a copy of the applications, which were

approved on June 29, 2023. 

7

 12 U.S.C. §§ 1828(c)(5) & (11), 2902(3)(E), 2903(a)(2).

8

 See 12 U.S.C. § 1842(c); 12 CFR 225.13. Malvern Bank is located in Florida, New 

Jersey, and Pennsylvania, while First Bank’s home state is New Jersey. See 12 U.S.C. § 

1841(o)(4). The acquisition is consistent with section 3(d) of the BHC Act. See U.S.C. §

1842(d).
3 

Under these circumstances, review of the transaction under section 3 of the BHC Act 

would be duplicative of the review under the Bank Merger Act.

Based on a review of all the facts presented, the Legal Division believes 

that no regulatory purpose would be served by requiring First Bank to file an application 

under section 3 of the BHC Act. The Legal Division, therefore, would not recommend 

that the Board take action to require the filing of an application by First Bank in 

connection with the transaction described above. This opinion is subject to the receipt by

First Bank, Merger Sub, Malvern, and Malvern Bank of all other necessary regulatory 

approvals and compliance with any terms and conditions that may be imposed in 

connection with those approvals.

This opinion is based on all the facts and representations presented to 

Federal Reserve staff. Any material change in those facts or representations should be 

communicated immediately to Federal Reserve staff and may cause this opinion to be 

reconsidered. This opinion is limited to this proposal and does not apply to any other 

transaction.

If you have any questions regarding this matter, please contact Derald Seid 

at (202) 452-2246 or Evan Hechtman at (202) 263-4810, both of the Legal Division staff.

Sincerely,

Charles Gray

Deputy General Counsel

cc: Federal Deposit Insurance Corporation