Financial Institutions Corporate and Regulatory

Financial Institutions Corporate and Regulatory

Hunton & Williams LLP's financial institutions corporate and regulatory group focuses on bank regulatory and corporate matters. Lawyers within the practice represent banks, thrifts, foreign banks, their branches and agencies and other financial institutions, as well as bank and thrift holding companies and their officers, directors and owners. We have established and represent trust companies and bank trust departments. Decades of experience representing clients in the banking industry provide a solid foundation for our representation of clients in a broad range of transactions. Our practice includes substantial regulatory representation at state and federal levels.

We represent clients in public and private offerings of debt and equity securities, including subordinated debt, assisting clients with TARP, as well with other federal programs to enhance liquidity and capital to financial institutions, the full range of corporate transactions, ownership succession and estate planning issues, officer and director compensation packages and retirement planning, negotiating and restructuring stock loan programs and negotiating and defending regulatory administrative actions, as well as responding to penalty referrals and providing advice about all aspects of banking statutes and regulations and interpretation of the same. We also represent bank clients engaging in nontraditional activities and acquisitions involving insurance, securities brokerage and investment advisory services.

  • The lawyers of our financial institutions corporate and regulatory group have participated in more than 200 banking merger and acquisition transactions over the past 14 years. For 2013, they have been involved with over 10 percent of all bank M&A transactions.
  • Over the past six years they have assisted clients with over 300 issuances of equity and debt securities as well as with preparation and assistance implementation of their capital plans.
  • Our lawyers are intimately involved with the formation and regulatory approval of shelf charters, acquisitions of inflatable charters or rent-a-banks and acquisitions from the FDIC as Receiver of both failed banks and assets of failed banks.
  • The financial institutions corporate and regulatory group lawyers have assisted over 100 new bank charter organizing groups in 25 states in the past 12 years, and worked with over 10 percent of all new bank charters over the past five years.
  • The group has assisted over 200 banking companies with corporate reorganization transactions to achieve eligibility to elect Subchapter S tax treatment.

Regulatory Practice
Our lawyers provide daily legal and regulatory advice regarding the scope and impact of new and existing statutes, regulations and interpretations, such as regulatory capital guidelines, fair lending, BSA and privacy. In addition to keeping abreast of developments, we seek to anticipate trends and assist individuals in designing plans and taking action to meet their obligations, helping them avoid or minimize potential liability.

Through many years of advice and counsel to individuals and institutions in the banking industry, we have developed solid working relationships with federal and state regulatory agencies and with the influential trade associations that represent independent banks in the process of legislative and regulatory rulemaking.

The types of regulatory matters and issues on which we advise our clients include:

  • Assisting in Preparation for Examinations
  • Capital Adequacy Guidance
  • Informal and Formal Enforcement Actions
  • Patriot Act, Bank Secrecy Act and Anti-Money Laundering Programs
  • Fraud Prevention Detection and Control
  • Truth in Lending, Regulation B, Community Reinvestment Act, Predatory Lending and Other Consumer Compliance Issues
  • Legal Lending Limit, Regulation O and Affiliated Transactions Issues
  • Bank and Thrift Powers Issues
  • Bank Structure Issues
  • Electronic Banking and E-Commerce
  • Subsidiary formations
  • Privacy and Information Sharing
  • Preemption

Our lawyers have advised clients operating complex bank and thrift holding company structures where the bank or thrift regularly cross-sells to and enters into joint-marketing and other business arrangements with the other subsidiaries. We have advised these multi-billion dollar financial institutions on numerous compliance issues; e.g., Reg. W (23A and 23B), privacy, RESPA, and affiliate-sharing of customer information under FCRA, to name a few.

Financial Institution Transactions
Our practice includes assisting clients with assistance under TARP with the FDIC Guaranty Program as well with other federal programs to enhance liquidity and capital to financial institutions, chartering new banks and thrifts, forming bank holding companies, merging and acquiring banks and their holding companies, engaging in stock repurchases, tender offers, proxy contests, reverse stock splits, strategic planning, and other shareholder ownership issues, orderly ownership transition, forming family limited partnerships, gifting programs, redemptions and other methods to provide for acquiring failed and failing banks with government financial assistance, charter conversions and change in bank control.

We represent sellers, purchasers and investors in connection with stock acquisitions, mergers and purchase and assumption transactions involving healthy, troubled and failed banks and thrifts. In eight of the last ten years, the financial institutions corporate and regulatory lawyers have participated in more bank M&A transactions than any other law firm in the United States. We provide assistance in structuring acquisition transactions to resolve differences as to the value of assets, to minimize risk to buyers, sellers and their officers, directors and shareholders, while helping them maximize available tax strategies. We have the experience to guide parties through the regulatory, securities, corporate and contractual maze inherent in such transactions. We also guide our clients in structuring their entry into nontraditional activities as they seek to enhance profitability and customer relationships.

Community Bank Independence
We have been instrumental in facilitating board and management strategic planning. When appropriate, we have assisted in implementation of defensive techniques and in contesting proxy fights and tender offers. We have structured succession arrangements consisting of, among other things, holding company redemptions funded with insurance or otherwise, ESOPs, family limited partnerships and trusts, and buy/sell, co-sale, right of first refusal and other shareholder level agreements. Our efforts have assisted management in arranging appropriate compensation packages, including deferred compensation, stock options, phantom stock, death benefits, redemption and "put" arrangements and severance provisions.

Recent transactions include:

Representation of Cascade Bancorp in its effort to acquire Home Federal Bancorp, Inc. after Home Federal had entered into an acquisition with Banner. This transaction is believed to be the first time in banking that an acquirer successfully exploited a "go shop."  

Strategic combination of LegacyTexas Group, Inc. ($2 billion in total assets) with ViewPoint Financial Group, Inc. (3.8 billion in assets) with LegacyTexas Bank charter surviving.

Representation of the Third Party Payment Processors Association on development of their compliance management systems.

Four successful transactions involving use of bankruptcy under §363 in order to effect a sale of its banking platform to one acquirer and recapitalization from a separate merger partner or acquisition of assets of a target that filed under §363.

Approval of the first shelf charter to bid on FDIC resolutions of failed banks.

Represented United Central Bank ($1.1 billion in total assets) in a purchase and assumption transaction with the FDIC as Receiver for Mutual Bank ($1.6 billion in total assets)

Represented investor group in connection with successful proxy contest to elect slate of directors to Board of Cape Fear Bank Corp., Wilmington, North Carolina.

Plains Capital Corporation - Acquisition of First Southwest Securities, a leading municipal securities firm.

Heritage Bank, N.A. - Assisting with its $62 million and $20 million secondary offering initial public offering, which is the largest capital raise ever for a New York-based new bank charter, including negotiating private equity investments from Palladium Equity, FrontPoint Partners, LLC and Carpenter Community BancFund.

Representation of a private equity fund as a bank holding company in its noncontrolling investment in TriState, the biggest de novo bank in Pennsylvania history, and its controlling investment in Xenith Bank in Richmond, Virginia.

TBank, N.A. - Formation of trust department for a de novo bank that reached in excess of $1 billion under administration in its first year.

Westbound Bank - Recapitalization transaction for the bank’s going private transaction.

Representation of Bank of the Cascades in its $44 million debt offering under the FDIC’s Temporary Debt Guaranty Program.

Town Center Bank - Frankfort, Illinois, in its $22 million initial public offering, which is the largest capital raise ever for an Illinois state bank.

EuroBancshares, Inc. - Hato Rey, Puerto Rico in its $65 million initial public offering and its purchase of Bank & Trust of Puerto Rico for $16.5 million.

State National Bancshares, Inc. - Lubbock, Texas in its $50 million initial public offering, its purchase of Heritage Financial Corporation, Granbury, Texas for $53 million and its purchase of Mercantile Bank, Ft. Worth, Texas for $51 million and its sale to BBVA.

Underwriter/placement agent counsel in the $72 million offering of Oriental Financial Group, Inc., San Juan, Puerto Rico, the $46 million offering of Fidelity Bankshares, Inc., West Palm Beach, Florida and the $16 million offering of First Southern Bancorp, Inc., Boca Raton, Florida.

TexasBanc Holding Co. - Ft. Worth, Texas in its sale to Compass Bancshares, Inc., Birmingham, Alabama for $464 million.

Pacific Coast National Bancorp, Inc. and Pacific Coast National Bank - San Diego, California in the charter of Pacific Coast National Bank and their $19 million initial public offering.

INB Financial Corp. - McAllen, Texas in its sale to Grupo Financiero Banorte, Mexico City, Mexico for $370 million.

The Adam Corporation - Bryan, Texas in its sale to Citigroup, Inc.

Pacific Capital Bancorp - Santa Barbara, California in its purchase of Pacific Crest Capital, Inc., Agoura Hills, California for $136 million and its purchase of First Bancshares, Inc., San Luis Obispo, California for $60 million.

Hibernia Corporation - New Orleans, Louisiana in its purchase of Coastal Bancorp, Inc., Houston, Texas for $233 million.

Interchange Financial Services Corp. - Saddlebrook, New Jersey in its purchase of Bridge View Bancorp, Englewood Cliffs, New Jersey for $87 million and in its purchase of Franklin Bank, Nutley, New Jersey for $25 million.

Centennial Bank Holdings, Inc. - Fort Collins, Colorado in its sale to Castle Creek Capital, LLC for $155 million.

Republic Corporation - Trinidad, Colorado in its going private transaction and Subchapter S election for company with 2300 shareholders.

HFB Financial Corporation - Middlesboro, Kentucky in a going private transaction.

Capital Formation
Lawyers in this practice advise existing and newly formed institutions and holding companies in raising capital through private and public offerings of equity and debt securities. We have worked extensively with national and regional investment banking firms. We practice extensively in matters applying the securities rules and regulations of the SEC, OCC and the FDIC, as well as state blue sky laws. We have represented dozens of clients in connection with funding under the US Treasury's capital purchase program under TARP.

Troubled Banks and Holding Companies
Institutions and holding companies that have experienced economic difficulties are faced with regulatory and lender pressures. We regularly assist clients in their efforts to return financial institutions to strength and stability.

Following are examples of some of the projects in which we have helped restore failing banks and thrifts to financial health:

  • Prepared capital plans.
  • Advised regarding compliance with administrative actions.
  • Negotiated and defended in administrative proceedings.
  • Assisted in restructuring institutions, including using the bankruptcy code.
  • Developed alternatives to restructuring or refinancing debt and raising capital.
  • Involved in litigation of bond claims and other insurance policies.
  • Counseled potential investors and merger partners and offered proficiency in effecting corporate transactions.
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