Orders Issued under Section 4 of the Bank Holding Company Act

By Frierson, Robert deV. | Federal Reserve Bulletin, February 2014 | Go to article overview

Orders Issued under Section 4 of the Bank Holding Company Act


Frierson, Robert deV., Federal Reserve Bulletin


Investors Bancorp, MHC

Short Hills, New Jersey

Investors Bancorp, Inc.

Short Hills, New Jersey

Order Approving the Acquisition of a Mutual Savings and Loan Holding Company FRB Order No. 2013-16 (December 23, 2013)

Investors Bancorp, MHC ("Investors MHC"), and Investors Bancorp, Inc. ("Investors Bancorp," and jointly with Investors MHC, "Investors"), both of Short Hills, New Jersey, have requested the Board's approval under section 4(c)(8) and 4(j) of the Bank Holding Company Act of 1956, as amended ("BHC Act"), and section 225.4 of the Board's Regulation Y (1) to acquire Gateway Community Financial, MHC ("Gateway MHC") and its wholly-owned subsidiary, Gateway Community Financial Corporation ("GCF," and jointly with Gateway MHC, "Gateway"), and thereby indirectly acquire Gateway's subsidiary savings association, GCF Bank, all of Sewell, New Jersey. Immediately following the proposed acquisition, GCF Bank would be merged into Investors Bancorp's subsidiary bank, Investors Bank, Short Hills, New Jersey. (2)

Notice of the proposal, affording interested persons an opportunity to submit comments, has been published (78 Federal Register 35271 (2013)). The time for filing comments has expired, and the Board has considered the application and all comments received in light of the factors set forth in section 4 of the BHC Act.

Investors, with consolidated assets of approximately $15.4 billion, is the 77th largest insured depository organization in the United States, controlling approximately $10 billion in consolidated deposits. Investors Bank operates in New Jersey and New York. Investors Bank is the 10th largest depository institution in New Jersey, controlling deposits of approximately $8.7 billion, which represent 3 percent of the total deposits of insured depository institutions in the state. (3) Investors Bank is the 53rd largest insured depository institution in New York, controlling deposits of approximately $1.3 billion, which represent less than 1 percent of the total deposits of insured depository institutions in the state.

GCF, with total consolidated assets of $301 million, controls GCF Bank, which operates in New Jersey. GCF Bank is the 77th largest insured depository institution in New Jersey, controlling deposits of approximately $272 million, which represent less than 1 percent of the total deposits of insured depository institutions in that state.

On consummation of this proposal, Investors would remain the 77th largest depository organization in the United States, controlling consolidated assets of approximately $15.7 billion, which represent less than 1 percent of the total amount of assets of insured depository institutions in the United States. In New Jersey, Investors Bank would remain the seventh largest insured depository institution, controlling deposits of approximately $9 billion, which would represent 3 percent of the total deposits of insured depository institutions in the state.

Factors Governing Board Review of the Transaction

The Board previously has 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. (4) The Board requires that savings associations acquired by bank holding companies or financial holding companies conform their direct and indirect activities to those permissible for bank holding companies under section 4(c)(8) of the BHC Act. (5) Investors has committed that Gateway and the nonbanking subsidiary that Investors proposes to acquire engage in activities that will conform to those permissible under section 4 of the BHC Act and Regulation Y.

Section 4(j)(2)(A) of the BHC Act requires the Board to consider whether the proposed acquisition of Gateway "can reasonably be expected to produce benefits to the public, such as greater convenience, increased competition, or gains in efficiency, that outweigh possible adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interest, unsound banking practices, or risk to the stability of the United States banking or financial system. …

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