Orders Issued Under Section 4 of the Bank Holding Company Act
Queens County Bancorp, Inc. Flushing, New York
Order Approving Notice to Acquire a Savings Association and to Engage in Nonbanking Activities
Queens County Bancorp, Inc. ("Bancorp"), a bank holding company within the meaning of the Bank Holding Company Act ("BHC Act"), has requested the Board's approval under sections 4(c)(8) and 4(j) of the BHC Act (12 U.S.C. [subsections] 1843(c)(8) and 1843(j)) and section 225.24 of the Board's Regulation Y to acquire all the voting shares of Haven Bancorp, Inc., Westbury, New York ("Haven"), and thereby indirectly acquire its subsidiary savings association, CFS Bank, Woodhaven, New York, ("CFS Bank").(1) Bancorp also has requested the Board's approval to acquire indirectly CFS Investments, Inc. ("CFS Investments") and thereby engage in providing securities brokerage services, and Columbia Preferred Capital Corporation ("CPCC") and thereby engage in extending credit and servicing loans and activities related to extending credit.
Notice of the proposal, affording interested persons an opportunity to submit comments, has been published (65 Federal Register 50,992 (2000)). The time for filing comments has expired, and the Board has considered the notice and all comments received in light of the factors set forth in section 4 of the BHC Act.
Bancorp, with total consolidated assets of $2 billion, operates a single subsidiary bank, QCSB, which is the 50th largest depository institution in New York State, controlling deposits of $1 billion, representing less than 1 percent of total deposits in insured depository institutions in the state ("state deposits").(2) Haven's subsidiary savings association, CFS Bank, is the 35th largest depository institution in the state, controlling deposits of $2.1 billion, representing less than 1 percent of state deposits. On consummation of the proposal, Bancorp would become the 22nd largest depository organization in New York State, controlling deposits of $3 billion.
The Board has previously determined by regulation that the operation of a savings association by a bank holding company is closely related to banking for purposes of section 4(c)(8) of the BHC Act.(3) The Board has also determined that securities brokerage activities, extending credit and servicing loans, and activities related to extending credit, are closely related to banking.(4) Bancorp has committed to conform the activities of CFS Bank and Haven to, and conduct those activities in accordance with, the requirements of section 4(c)(8) of the BHC Act and Regulation Y.
In reviewing the proposal, the Board is required by section 4(j)(2)(A) of the BHC Act to determine that the acquisition of Haven by Bancorp "can reasonably be expected to produce benefits to the public ... that outweigh possible adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices."(5) As part of its evaluation of the public interest factors, the Board reviews the financial and managerial resources of the companies involved.(6)
Financial and Managerial Considerations
The Board has carefully reviewed the financial and managerial resources of Bancorp and Haven and their respective subsidiaries and the effect the transaction would have on such resources in light of all the facts of record. The Board has considered, among other things, confidential reports of examination and other supervisory information received from the primary federal supervisors of the organizations. The Board also has considered publicly available financial and other information on the organizations and their subsidiaries, and all the information submitted on the financial and managerial aspects of the proposal by Bancorp. Based on all the facts of record, the Board concludes that the financial and managerial resources of the organizations involved are consistent with approval.
As part of its consideration of the public interest factors under section 4 of the BHC Act, the Board has considered carefully the competitive effects of the proposal in light of all the facts of record.(7) QCSB and CFS Bank compete directly in the Metropolitan New York/New Jersey banking market ("New York banking market").(8) On consummation of the proposal, Bancorp would become the 27th largest depository institution in the market, controlling deposits of approximately $3 billion, representing less than 1 percent of total deposits in depository institutions in the market ("market deposits").(9) The Herfindahl-Hirschman Index ("HHI") for the New York banking market would remain unchanged at 786 points. Market concentration, as measured by the HHI, would remain unconcentrated and within the parameters contained in the Department of Justice Merger Guidelines ("DOJ Guidelines") and the Board's precedent.(10) Based on all the facts of record, the Board concludes that consummation of the proposal would not result in any significantly adverse effect on competition or on the concentration of banking resources in the New York banking market or any other relevant banking market.
Convenience and Needs Considerations
In acting on notices to acquire a savings association, the Board reviews the records of performance of the relevant depository institutions under the Community Reinvestment Act (12 U.S.C. [sections] 2901 et seq.).(11) The CRA requires the appropriate federal financial supervisory agency to "assess the institution's record of meeting the credit needs of its entire …