This excerpt taken from the FCF 10-K filed Mar 1, 2007.
Bank Holding Company Act
As a bank holding company, First Commonwealth is subject to the provisions of the Bank Holding Company Act of 1956, as amended. First Commonwealth is registered with and subject to supervision and regulation by the Federal Reserve Board. As a registered bank holding company, First Commonwealth is required to file an annual report and other information with the Federal Reserve Board, and First Commonwealth is subject to examinations and inspections by the Federal Reserve Board.
The Bank Holding Company Act and Regulation Y of the Federal Reserve Board require every bank holding company to obtain prior approval of the Federal Reserve Board before it may acquire direct or indirect ownership or control of more than 5% of the outstanding voting shares or substantially all of the assets of a bank to merge or consolidate with another bank holding company. The Federal Reserve Board may not approve acquisitions by First Commonwealth of such percentage of voting shares or substantially all of the assets of any bank located in any state other than Pennsylvania unless the laws of such state specifically authorize such an acquisition.
The Bank Holding Company Act generally prohibits a bank holding company from engaging in a nonbank business or acquiring direct or indirect ownership or control of more than 5% of the outstanding voting shares of any nonbank corporation subject to certain exceptions. The principal exception is where the business activity in question is determined by the Federal Reserve Board to be closely related to banking or to managing or
FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES
Supervision and Regulation (Continued)
Bank Holding Company Act (Continued)
controlling banks to be a proper incident thereto. The Bank Holding Company Act does not place territorial restrictions on the activities of such banking related subsidiaries of bank holding companies.
Under the Federal Reserve Act, subsidiary banks of a bank holding company are subject to certain restrictions on extensions of credit to the bank holding company or any of its subsidiaries, investments in the stock or other securities thereof, or acceptance of such stock or securities as collateral for loans to any one borrower. Under the Pennsylvania Banking Code, there is no limit on the number of Pennsylvania banks that may be owned or controlled by a Pennsylvania bank holding company.