Decisions on Bank Applications
Peoples State Bank
FEDERAL DEPOSIT INSURANCE CORPORATION
RE: Peoples State Bank Hamtramck, Michigan
Application for Consent to Merge and for Consent to Establish Six Branches
ORDER
The Board of Directors of the Federal Deposit Insurance Corporation has fully considered all facts and information relevant to the factors of Section 18(c) and other provisions of the Federal Deposit Insurance Act ("FDI Act") relating to the application of Peoples State Bank, Hamtramck, Michigan ("Peoples"), an insured State nonmember bank, for the Corporation's consent to merge, under its charter and title, with The Madison National Bank, Madison Heights, Michigan ("Madison"), an insured national bank, and for consent to establish the six offices of Madison as branches of Peoples. Notice of the proposed transaction, in a form approved by the Corporation, has been published pursuant to the FDI Act. Both participants are members of the Bank Insurance Fund.
Upon consideration of all relevant material, having determined that an emergency situation exists which requires expeditious action, and having requested reports from the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Office of Thrift Supervision, and the Attorney General of the United States on the competitive factors involved in the proposed transaction,
IT IS ORDERED, for reasons set forth in the attached Basis for Corporation Approval, that the application be and hereby is approved, subject to the following conditions:
1. That the proposed transaction may not be consummated before the fifth calendar day after the date of this ORDER;
2. That all the necessary and final approvals shall be obtained from the appropriate Federal and state authorities prior to consummation of the proposed transaction;
3. That, if the proposed transaction has not been effected within thirty days from the date of this ORDER or, unless in the meantime, a request for an extension of time has been approved by the Corporation, the consent herein granted shall expire at the end of said thirty-day period; and
4. That until the proposed transaction becomes effective, the Corporation shall have the right to alter, suspend, or withdraw its approval should any interim development be deemed by the Board of Directors to warrant such action.
Dated at Washington, D.C., this 19th day of April, 1998.
BY ORDER OF THE BOARD OF DIRECTORS
Robert E. Feldman
Executive Secretary
FEDERAL DEPOSIT INSURANCE CORPORATION
RE: Peoples State Bank Hamtramck, Michigan
Application for Consent to Merge and for Consent to Establish Six Branches
BASIS FOR CORPORATION APPROVAL
Pursuant to Section 18(c) and other provisions of the Federal Deposit Insurance Act ("FDI Act"), Peoples State Bank, Hamtramck, Michigan ("Peoples"), an insured State nonmember bank with total resources of $193,506,000 and total deposits of $165,226,000, has applied for the Corporation's consent to merge, under its charter and title, with The Madison National Bank, Madison Heights, Michigan ("Madison"), an insured national bank, with total resources of $171,200,000 and total deposits of $168,516,0001, and for consent to establish the six offices of Madison as branches of Peoples. Both participants are members of the-Bank Insurance Fund.
In view of the critically undercapitalized condition of Madison, the Board of Directors of the Corporation has determined that an emergency situation exists which requires expeditious action pursuant to paragraph 6 of Section 18(c) of the FDI Act.
Notice of the proposed transaction, in a form approved by the Corporation, has been published pursuant to the FDI Act.
Competition
Relevant market areas overlap, with both Peoples and Madison doing business in Macomb County. Both institutions are small in relation to the total Detroit Banking Market, and the combined entity will control less than I percent of total deposits in the market. All offices will be converted to branches of Peoples. Services available at each location are not expected to change materially.
Based on the above, the transaction would not have a significantly adverse impact on the competitive environment within the relevant market areas. The Board of Directors is of the opinion that the proposed transaction would not, in any section of the country, substantially lessen competition, tend to create a monopoly, or in any other manner be a restraint of trade or otherwise have an adverse competitive effect that would require disapproval under the Bank Merger Act.
Financial data as of December 31, 1997.
Financial and Managerial Resources; Future Prospects
Peoples is in satisfactory condition. Madison is critically undercapitalized, and consummation of the proposal is expected to result in an institution with adequate capital for the volume and type of business conducted, acceptable management, and favorable future prospects.
Convenience and Needs of the Community
The six offices of Madison will be operated as branches of Peoples, and the consummation of the proposal will result in continued availability of banking services to the customers of Madison. Convenience and needs considerations are consistent with approval of the transaction.
A review of available information, including the Community Reinvestment Act ("CRA") Statements of Peoples and Madison, disclosed no inconsistencies with the purposes of CRA. The resultant institution could be expected to meet the credit needs of its community, consistent with its safe and sound operation.
Based on the foregoing, the Board of Directors has concluded that approval of this application is warranted.