Formation & Acquisition

Our Practice

There are two ways in which to enter the financial institution business. One is through de novo entry, and the other is through a change-in-control process.

De novo entry for banks and savings institutions starts with attracting a strong local group of organizers, a qualified CEO and a business plan, including a demographic analysis and an evaluation of the viability of a new bank in the local market. Regulatory applications, raising capital, and other organizational steps, including adoption of sound banking systems and controls, follow. We have more than twenty years of experience forming banks and have successfully formed more than twenty.

It is essential that de novo banks start off on the right foot, building quality in management, the board, systems and controls, policies, and business plan from the beginning. We help support this effort throughout the organizational period, and for virtually all of the banks that we have formed, we have remained as counsel.

Our legal services for de novo banks include:

Assistance on the business plan
Drafting of regulatory applications and managing the regulatory approval process
Drafting the offering documents and addressing all federal and state securities laws
Assisting in the development of a strategy to raise capital in a manner calculated to raise the requisite level of capital consistent with law and to enhance the prospective customer base of the institution
Review of bank policies and procedures
Assistance in establishing "best practices" in corporate governance
Drafting of employment agreements
Assistance in developing a stock option plan and grants to organizers, directors and management
Due diligence on prospective third-party providers such as data processing firms, and negotiating and drafting of contracts with such parties
Development of joint ventures with third-parties through which the bank could offer banking and nonbanking services to its customer base without incurring the overhead costs associated with de novo entry into a new product.
Counseling of board members as to their fiduciary duties and responsibilities, and how to minimize personal liability.

Entry through a change-in-control process involves an entirely different set of issues than a de novo application. We work closely with our clients putting together an investment group, negotiating a shareholder agreement if appropriate, identifying acquisition targets, negotiating with the acquisition targets, applying for financing, preparing a change in bank control application, and developing a viable business plan.