Alabama State Banking Department Memorandum on De Novo Branching into Other States

[STATE OF ALABAMA SEAL]
STATE OF ALABAMA
STATE BANKING DEPARTMENT

[STATE BANKING DEPARTMENT SEAL]

Bob Riley
Governor

John D. Harrison
Superintendent of Banks

July 11, 2007

MEMORANDUM

TO: Chief Executive Officers of State-Chartered Trust Companies

FROM: John D. Harrison, Superintendent of Banks

SUBJECT: De Novo Branching into Other States

We're writing to inform you about a recent change in the Alabama Banking Code. During the 2007 legislative session, we were successful in gaining approval and Governor Riley's signature on a series of amendments to Title 5.

Among other things, amended Sections 5-11A-1.1 now allow corporations organized under chapter 11A open new branches in states that allow reciprocity. If you desire to do so, you only need to follow our enclosed branch procedures and we will handle all correspondence with the state(s) where you desire to open a full-service branch. Your branching ability at present is limited to the twenty-three (23) states on the enclosed list that have reciprocity provisions within their respective state laws.

We hope that our efforts to allow you access into new retail markets will yield positive results for your respective entities. You can review our 2007 Banking Bill (HB60/SB39) in its entirety by visiting our website www.banking.alabama.gov. If you have any questions about your new branching ability, please contact Trabo Reed or Michael A. Seals at (334) 242-3452.

Encl: July 2, 2003 Branch Applications Memo from Superintendent of Banks List of States with Interstate Branching for Trust Companies

CENTER FOR COMMERCE • 401 ADAMS AVENUE • P.O. BOX 4600 • MONTGOMERY, AL 36103-4600 TELEPHONE (334) 242-3452 • FAX (334) 242-3500 OR BUREAU OF LOANS (334) 353-5961

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[STATE OF ALABAMA SEAL]
STATE OF ALABAMA
STATE BANKING DEPARTMENT

[STATE BANKING DEPARTMENT SEAL]

July 2, 2003

MEMORANDUM – PROPERTY ACQUIRED FOR FUTURE EXPANSION & BRANCH APPLICATION POLICIES

TO: Chief Executive Officers of All Alabama State-Chartered Banks

FROM: Anthony Humphries
Superintendent of Banks

SUBJECT: Property Acquired for Future Expansion and Branch Applications

This memorandum supersedes the Policy Memorandum of May 19, 2003 which addressed branch applications. This memorandum is issued to provide further clarification of department policy regarding property acquired for future expansion.

Property Acquired for Future Expansion

Effective this date, letter notification is required within 10 days after the acquisition of property to be held for future expansion. Property acquired for future expansion includes property where construction on bank premises will not begin for an indeterminate time or where the bank has purchased the property as a site for possible future bank premises. Purchases of real estate for purposes other than bank premises must be approved in advance by the Superintendent.

The letter notification should state the street address (or best location description if no street address) of the property, the purchase price, and full details of any insider¹ involvement in or benefit received or to be received from the acquisition of the property. Notice only is required for such acquisitions, and our previous policy of allowing banks five years after the property's acquisition to begin construction of bank premises remains in place. The Superintendent, however, reserves the right to object to such acquisitions and demand divestiture in the event of earnings problems resulting in a troubled condition or in the event of improper insider involvement.

¹ Insiders include: Anyone employed by the bank or an affiliate of the bank, any director of the bank or an affiliate of the bank; any individual, firm; or company providing professional services to the bank or an affiliate including audit, legal, loan review, or appraisal services; and any relative or related interest of the bank’s or affiliate’s director, employee, or professional service provider.

CENTER FOR COMMERCE • 401 ADAMS AVENUE • SUITE 680 • MONTGOMERY, AL 36130-1201 TELEPHONE (334) 242-3452 • FAX (334) 242-3500 OR BUREAU OF LOANS (334) 353-5961

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Branch Applications

Effective this date, letter notification will be required of all Alabama state-chartered banks wishing to establish a new branch office. This letter notification should state the street address, city, county, and state where the proposed branch will be located, and full details of any insider involvement in or benefit received or to be received from the establishment of the branch including its acquisition, construction, equipping, furnishing, leasing, or ownership.

The notification should be made before construction begins on the new branch location. If the bank does not receive a notice of objection from the Superintendent of Banks within 10 calendar days from the date of receipt of the notification by the State Banking Department, establishment of the branch may commence. If the Superintendent does object, he or she may require such additional information as is deemed appropriate. If such request(s) for additional information is made, operations of the branch may not begin until the bank receives the Superintendent’s written approval. Such written approval may be conditional. If conditions are imposed, acceptance of the conditions by the bank’s board of directors may be required prior to the opening of the branch.

Upon the opening of the branch, the bank must, within 30 days of the branch opening, provide a letter notifying the Superintendent of the exact date on which the branch opened.

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STATES WITH INTERSTATE BRANCH
RECIPROCITY FOR TRUST COMPANIES

11-Jul-07

ARKANSAS
CONNECTICUT
ILLINOIS
INDIANA
LOUISIANA
MAINE
MARYLAND
MASSACHUSETTS
MINNESOTA
NEBRASKA
NEW HAMPSHIRE
NEW JERSEY
NEW MEXICO
NORTH CAROLINA
OKLAHOMA
PENNSYLVANIA
RHODE ISLAND
TENNESSEE
TEXAS
VERMONT
VIRGINIA
WASHINGTON
WEST VIRGINIA