Court Opinion

ID: 3261473
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:32:26.69155+00
Date Added: 2024-06-11T13:08:17.041940
License: Public Domain

Mr. Bill J. Ford Arkansas State Bank Commissioner Tower Building, Suite 500 323 Center Street Little Rock, Arkansas 72201-2613
Dear Mr. Ford:
This is in response to your request for an opinion on the following issue: Whether Sec. 23-32-308, Arkansas Code of 1987 Annotated, which sets a limitation on total eligible deposits that may be owned or controlled by a bank holding company in this state, is applicable to acquisitions only and does not apply to a deposit base that exceeds that percentage through normal growth?
It is my opinion that, "yes" the statute you mention is "applicable to acquisitions only" and does not apply to a deposit base that exceeds the percentage through  normal growth.
The statute you have cited, A.C.A. 23-32-308, provides in relevant part as follows:
     (a)  A bank holding company is prohibited from acquiring ownership or control of the stock or the assets of any bank if, after giving effect to the acquisition of the stock or the assets of that bank, the acquiring bank holding company would own or control, directly or indirectly, banks having in the aggregate more than fifteen percent (15%) of the total deposits held by all state and national banks having principal offices within the state.
     (b)  Determinations of the percentage of total deposits required by subsection (a) of this section shall be made as of the date of the acquisition of the stock or assets.  The determinations shall be made with reference to the average total deposits of the respective banks as reflected on their quarterly financial reports for the four (4) fiscal quarters immediately preceding the date of acquisition. . . [Emphasis added]
As can be seen from the statute above, the determination of whether a bank holding company holds more than the allowable percentage is calculated as of the date of acquisition.  If, based upon that calculation, the bank holding company will own, after the acquisition, banks having more than fifteen percent of the total deposits of all state and national banks having principal offices in this state, then the acquisition is impermissible.  The date of acquisition, however, is the controlling date as to the valuation of the deposits held. If the acquisition is permissible, that is if a calculation of the deposits held on the date of acquisition yields exactly the fifteen percent figure or less than the fifteen percent figure, there is nothing in the statute to prohibit the future growth of the deposits to exceed the fifteen percent limitation.  In this sense, the statute regulates "acquisitions only" as you have phrased it.
The foregoing opinion, which I hereby approve, was prepared by Assistant Attorney General Elana L. Cunningham.
Sincerely,
RON FIELDS Attorney General
RF:arb