FCAL » Topics » General

These excerpts taken from the FCAL 10-K filed Mar 31, 2009.

General

Banking is a complex, highly regulated industry. The primary goals of the regulatory scheme are to maintain a safe and sound banking system, protect depositors and the FDIC insurance fund, and facilitate the conduct of sound monetary policy. This regulatory scheme is not designed for the benefit of stockholders of the Company or its successors. In furtherance of these goals, Congress and the states have created several largely autonomous regulatory agencies and enacted numerous laws that govern banks, bank holding companies and the financial services industry. Consequently, the growth and earnings performance of the Company or its successors and the Bank can be affected not only by management decisions and general economic conditions, but also by the requirements of applicable state and federal statues, regulations and the policies of various governmental regulatory authorities, including the Board of Governors of the Federal Reserve System (“FRB”), the FDIC, and the California Department of Financial Institutions (“DFI”) and the United States Department of the Treasury (“Treasury”).

 

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Table of Contents

The commercial banking business is also influenced by the monetary and fiscal policies of the federal government and the policies of the FRB. The FRB implements national monetary policies (with objectives such as curbing inflation and combating recession) by its open-market operations in United States Government securities, by adjusting the required level of reserves for financial intermediaries subject to its reserve requirements and by varying the discount rates applicable to borrowings by depository institutions. The actions of the FRB in these areas influence the growth of bank loans, investments and deposits and also affect interest rates charged on loans and paid on deposits. Indirectly, such actions may also impact the ability of non-bank financial institutions to compete with the Bank. The nature and impact of any future changes in monetary policies cannot be predicted.

The system of supervision and regulation applicable to financial services businesses governs most aspects of the business of the Company and the Bank, including: (i) the scope of permissible business; (ii) investments; (iii) reserves that must be maintained against deposits; (iv) capital levels that must be maintained; (v) the nature and amount of collateral that may be taken to secure loans; (vi) the establishment of new branches; (vii) mergers and consolidations with other financial institutions; and (viii) the payment of dividends.

From time to time laws or regulations are enacted which have the effect of increasing the cost of doing business, limiting or expanding the scope of permissible activities, or changing the competitive balance between banks and other financial and non-financial institutions. Proposals to change the laws and regulations governing the operations of banks and bank holding companies are frequently made in Congress, in the California legislature and by various bank and other regulatory agencies. Future changes in the laws, regulations or polices that impact the Company or its successors and the Bank cannot necessarily be predicted, but they may have a material effect on the business and earnings of the Company and the Bank.

Set forth below is a summary description of certain of the material laws and regulations that relate to our operations and those of the Bank. The description does not purport to be a complete description of these laws and regulations and is qualified in its entirety by reference to the applicable laws and regulations.

General

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">Banking is a complex, highly regulated industry. The primary goals of the regulatory scheme are to maintain a safe and sound banking system, protect
depositors and the FDIC insurance fund, and facilitate the conduct of sound monetary policy. This regulatory scheme is not designed for the benefit of stockholders of the Company or its successors. In furtherance of these goals, Congress and the
states have created several largely autonomous regulatory agencies and enacted numerous laws that govern banks, bank holding companies and the financial services industry. Consequently, the growth and earnings performance of the Company or its
successors and the Bank can be affected not only by management decisions and general economic conditions, but also by the requirements of applicable state and federal statues, regulations and the policies of various governmental regulatory
authorities, including the Board of Governors of the Federal Reserve System (“FRB”), the FDIC, and the California Department of Financial Institutions (“DFI”) and the United States Department of the Treasury
(“Treasury”).

 


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Table of Contents


The commercial banking business is also influenced by the monetary and fiscal policies of the federal
government and the policies of the FRB. The FRB implements national monetary policies (with objectives such as curbing inflation and combating recession) by its open-market operations in United States Government securities, by adjusting the required
level of reserves for financial intermediaries subject to its reserve requirements and by varying the discount rates applicable to borrowings by depository institutions. The actions of the FRB in these areas influence the growth of bank loans,
investments and deposits and also affect interest rates charged on loans and paid on deposits. Indirectly, such actions may also impact the ability of non-bank financial institutions to compete with the Bank. The nature and impact of any future
changes in monetary policies cannot be predicted.

The system of supervision and regulation applicable to financial services businesses
governs most aspects of the business of the Company and the Bank, including: (i) the scope of permissible business; (ii) investments; (iii) reserves that must be maintained against deposits; (iv) capital levels that must be
maintained; (v) the nature and amount of collateral that may be taken to secure loans; (vi) the establishment of new branches; (vii) mergers and consolidations with other financial institutions; and (viii) the payment of
dividends.

From time to time laws or regulations are enacted which have the effect of increasing the cost of doing business, limiting or
expanding the scope of permissible activities, or changing the competitive balance between banks and other financial and non-financial institutions. Proposals to change the laws and regulations governing the operations of banks and bank holding
companies are frequently made in Congress, in the California legislature and by various bank and other regulatory agencies. Future changes in the laws, regulations or polices that impact the Company or its successors and the Bank cannot necessarily
be predicted, but they may have a material effect on the business and earnings of the Company and the Bank.

Set forth below is a summary
description of certain of the material laws and regulations that relate to our operations and those of the Bank. The description does not purport to be a complete description of these laws and regulations and is qualified in its entirety by
reference to the applicable laws and regulations.

General

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">Banking is a complex, highly regulated industry. The primary goals of the regulatory scheme are to maintain a safe and sound banking system, protect
depositors and the FDIC insurance fund, and facilitate the conduct of sound monetary policy. This regulatory scheme is not designed for the benefit of stockholders of the Company or its successors. In furtherance of these goals, Congress and the
states have created several largely autonomous regulatory agencies and enacted numerous laws that govern banks, bank holding companies and the financial services industry. Consequently, the growth and earnings performance of the Company or its
successors and the Bank can be affected not only by management decisions and general economic conditions, but also by the requirements of applicable state and federal statues, regulations and the policies of various governmental regulatory
authorities, including the Board of Governors of the Federal Reserve System (“FRB”), the FDIC, and the California Department of Financial Institutions (“DFI”) and the United States Department of the Treasury
(“Treasury”).

 


5







Table of Contents


The commercial banking business is also influenced by the monetary and fiscal policies of the federal
government and the policies of the FRB. The FRB implements national monetary policies (with objectives such as curbing inflation and combating recession) by its open-market operations in United States Government securities, by adjusting the required
level of reserves for financial intermediaries subject to its reserve requirements and by varying the discount rates applicable to borrowings by depository institutions. The actions of the FRB in these areas influence the growth of bank loans,
investments and deposits and also affect interest rates charged on loans and paid on deposits. Indirectly, such actions may also impact the ability of non-bank financial institutions to compete with the Bank. The nature and impact of any future
changes in monetary policies cannot be predicted.

The system of supervision and regulation applicable to financial services businesses
governs most aspects of the business of the Company and the Bank, including: (i) the scope of permissible business; (ii) investments; (iii) reserves that must be maintained against deposits; (iv) capital levels that must be
maintained; (v) the nature and amount of collateral that may be taken to secure loans; (vi) the establishment of new branches; (vii) mergers and consolidations with other financial institutions; and (viii) the payment of
dividends.

From time to time laws or regulations are enacted which have the effect of increasing the cost of doing business, limiting or
expanding the scope of permissible activities, or changing the competitive balance between banks and other financial and non-financial institutions. Proposals to change the laws and regulations governing the operations of banks and bank holding
companies are frequently made in Congress, in the California legislature and by various bank and other regulatory agencies. Future changes in the laws, regulations or polices that impact the Company or its successors and the Bank cannot necessarily
be predicted, but they may have a material effect on the business and earnings of the Company and the Bank.

Set forth below is a summary
description of certain of the material laws and regulations that relate to our operations and those of the Bank. The description does not purport to be a complete description of these laws and regulations and is qualified in its entirety by
reference to the applicable laws and regulations.

This excerpt taken from the FCAL 10-Q filed May 15, 2007.

GENERAL

1.01 Definitions. As used in this Agreement, the following terms shall have the indicated meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

Acquisition Agreement has the meaning given to such term in Section 6.05 of this Agreement.

Acquisition Proposal has the meaning given to such term in Section 6.05 of this Agreement.

Action means any legal action, administrative, arbitration, audit, hearing, investigation, proceeding, litigation, claim or suit (whether civil, criminal, administrative, investigative or informal) commenced, brought, conducted or heard by or before, or otherwise involving, any governmental body or arbitrator.

Affiliate means, with respect to any corporation, any person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such corporation and, without limiting the generality of the foregoing, includes any executive officer, director or 10% equity owner of such corporation.

Agreement means this Agreement and Plan of Merger, including any amendment or supplement, exhibit or schedule attached hereto.

Application means any application or notice or request for waiver to a Regulatory Authority for the purpose of effecting the transactions contemplated hereby.

Business Day shall mean a day that is not a Saturday, Sunday or a statutory or civic holiday in the State of California.

Closing has the meaning given to such term in Section 2.01 of this Agreement.

Closing Date has the meaning given to such term in Section 2.01(b) of this Agreement.

Confidentiality Agreement means the confidentiality agreement among TIB, FCFG and SBB.

Contemplated Transactions means all of the transactions contemplated by this Agreement, including (a) the Merger and (b) the performance by SBB, FCFG and TIB of their respective covenants and obligations under this Agreement.

CRA means the Community Reinvestment Act of 1977 or any successor law, and regulations and rules issued pursuant to that Act or any successor law.

Damages has the meaning given to such term in Section 9.02 of this Agreement.

Effective Time has the meaning given to such term in Section 2.01(b) of this Agreement.

 

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FCB has the meaning given to such term in the recitals.

FCBank has the meaning given to such term in the recitals.

FCFG has the meaning given to such term in the heading of this Agreement.

FDIC means the Federal Deposit Insurance Corporation.

FINCEN means the Financial Crimes Enforcement Network.

FRB means the Board of Governors of the Federal Reserve System, including the appropriate Reserve Bank.

Indemnified Persons has the meaning given to such term in Section 9.02 of this Agreement.

Indemnity Agreement means the Indemnity Agreement in the form of Exhibit A.

Initial Mergers has the meaning given to such term in the recitals.

Initial Purchase Agreement has the meaning given to such term in the recitals.

Initial Purchase Closing Date has the meaning given to such term in Article III of this Agreement.

IRC means the Internal Revenue Code of 1986 or any successor law, and regulations issued by the IRS pursuant to the Internal Revenue Code or any successor law.

Knowledge means (a) an individual is actually aware of a particular fact or other matter; or (b) a prudent individual could be expected to discover or otherwise become aware of such fact or other matter in the course of conducting a reasonably comprehensive investigation concerning the existence of such fact or other matter.

Knowledge of FCFG means the Knowledge of the executive officers and directors (or persons serving in any similar capacity) of FCFG.

Knowledge of SBB means the Knowledge of executive officers and directors (or persons serving in any similar capacity) of SBB and FCFG.

Laws means all applicable laws, statutes, ordinances, rules, regulations, orders, writs, injunctions, judgments or decrees entered, enacted, promulgated, enforced or issued by any court or other governmental or regulatory authority, domestic or foreign.

Material Adverse Effect means, with respect to any Person (unless otherwise specified), a material adverse effect on:

(a) the business, condition (financial or otherwise), liabilities, properties, assets or results of operations of such Person, or

 

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(b) the ability of such Person to perform its obligations under this Agreement or to consummate the Contemplated Transactions.

Merger means the merger of SBB with and into TIB, with TIB surviving such merger, as contemplated by this Agreement.

Merger Consideration has the meaning given to such term in Section 2.05(a) of this Agreement.

NMB has the meaning given to such term in the recitals.

OCC means the Office of the Comptroller of the Currency, the primary regulator of national banks.

Organization Certificate means with respect to any Person, the articles or certificate of incorporation, by-laws or other organizational documents.

Person means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

Pro Forma Balance Sheet has the meaning given to such term in Section 3.05.

Purchase and Assumption Agreement has the meaning given to such term in the recitals.

Reasonable Best Efforts means prompt, substantial and persistent efforts as a prudent Person desirous of achieving a result would use in similar circumstances.

Regulatory Agreement has the meaning given to that term in Section 3.08(e) of this Agreement.

Regulatory Authority means any agency, department or unit of any United States federal, state or local governmental body or of any self-regulatory organization located in the United States, including without limitation the FDIC, the FRB, FINCEN, the CDFI, the TDB, the OCC, and the respective staffs thereof.

Rights means warrants, options, rights, convertible securities and other capital stock equivalents which obligate an entity to issue its securities.

SBB has the meaning given to such term in the heading of this Agreement.

SBB Capital Stock has the meaning given to such term in Section 3.02(a) of this Agreement.

Schedule means, collectively, the disclosure schedules delivered by SBB to TIB at or prior to the execution and delivery of this Agreement.

Stock Certificate has the meaning given to such term in Section 2.05(c) of the Agreement.

 

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Stock Transfer has the meaning given to such term in Section 2.01 of this Agreement.

Stockholders means the holders of SBB Capital Stock.

Subsidiary means any corporation, 10% or more of the capital stock of which is owned, either directly or indirectly, by another entity, except any corporation the stock of which is held in the ordinary course of the lending activities of a bank.

Surviving Bank has the meaning given to that term in Section 2.01(a) of this Agreement.

Tax (and, with correlative meaning, “Taxes” and “Taxable”) shall mean (i) any federal, state, local, municipal or foreign net income, gross income, gross receipts, windfall profit, severance, property, production, sales, use, license, excise, franchise, employment, payroll, withholding, alternative or add-on minimum, ad valorem, value-added, transfer, stamp, or environmental tax, or any other tax, custom, duty, tariff levy, import fee or other like assessment or charge of any kind whatsoever, together with any interest or penalty, addition to tax or additional amount imposed by any governmental authority, domestic and foreign, and (ii) any liability for the payment of any amount of the type described in clause (i) as a result of being or having been before the Closing a member of an affiliated, consolidated, combined, unitary or similar group.

Tax Return shall mean any return, report or similar statement required to be filed with respect to any Tax (including any attached schedules), including, without limitation, any information return, claim for refund, amended return or declaration of estimated Tax.

TDB means the Texas Department of Banking or any successor governmental body.

TIB has the meaning given to such term in the heading of this Agreement.

ARTICLE II

This excerpt taken from the FCAL 10-K filed Apr 2, 2007.

General

Banking is a highly regulated industry. Congress and the states have enacted numerous laws that govern banks, bank holding companies and the financial services industry, and have created several largely autonomous regulatory agencies which have authority to examine and supervise banks and bank holding companies, and to adopt regulations furthering the purpose of the statutes. The primary goals of the regulatory scheme are to maintain a safe and sound banking system, to protect depositors and the FDIC insurance fund, and to facilitate the conduct of sound monetary policy; they were not adopted for the benefit of shareholders of the Company or its successors. As a result, the financial condition and results of operations of regulated entities and their ability to grow and engage in various business activities can be affected not only by management decisions and general economic conditions, but the requirements of applicable federal and state laws, regulations and the policies of the various regulatory authorities.

Further, these laws, regulations and policies are reviewed often by Congress, state legislatures and federal and state regulatory agencies. Changes in laws, regulations and policies can materially increase the cost of doing

 

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business, limit certain business activities, require additional capital, or materially adversely affect competition between banks and other financial intermediaries. While it can be predicted that significant changes will occur, what changes, when they will occur, and how they will impact the Company cannot be predicted.

Set forth below is a summary description of certain of the material laws and regulations that relate to our operations and those of the Banks. The description does not purport to be a complete description of these laws and regulations and is qualified in its entirety by reference to the applicable laws and regulations.

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