N.J. Admin. Code § 3:1-2.19

Current through Register Vol. 56, No. 19, October 7, 2024

Section 3:1-2.19 - Minimum and maximum stock subscriptions

(a) Each charter application for a depository shall provide for stated capital of at least $ 6,000,000. If the depository is a stock institution, capital shall include at least $ 3,000,000 in capital stock, or such other amount as required by the Commissioner; except that an application for a charter for a trust company, which does not have authority to take deposits, may provide for a stated capital of $ 2,000,000 in capital stock; and except that an application for a charter incident to the purchase of a failed institution or a branch or branches of a failed institution, may provide for stated capital of $ 5,000,000, or more, or six percent of deposits acquired, whichever is greater, with at least $ 2,500,000 in capital stock for a stock institution, so long as the depository agrees to raise additional capital to reach $ 6,000,000 within one year following issuance of the Certificate of Authority while also satisfying the capital requirements set forth in N.J.A.C. 3:4.

(b) The incorporators of a depository shall subscribe to all stock listed as issued on the certificate of incorporation, which shall be at least 25 percent of the total capital required by (a) above.

(c) After a charter application is accepted, the balance of the capital stock, if any, shall be offered to the general public in the area to be served by the depository. The proceeds of such sale shall be placed in escrow and remain in escrow and not released until the bank obtains a Certificate of Authority. The form of the escrow agreement shall be approved by the Department.

(d) On or after May 7, 2007, no individual may subscribe, directly or indirectly (which term shall include, but not be limited to, ownership of a holding company that owns a depository institution, and ownership through the individual's spouse, children, siblings or parents, or business associates acting in concert), for stock in excess of 24.9 percent of the total voting shares of the depository institution, either at formation of the depository or any time subsequent thereto, except where the acquisition is made pursuant to N.J.S.A. 17:9A-411b. Notwithstanding this restriction, the Commissioner may approve the direct or indirect ownership by an individual of more than 24.9 percent of the voting shares of a depository institution if he or she finds that such ownership will not be detrimental to the safety and soundness and proper corporate governance of the depository. In making this determination, the Commissioner shall consider, without limitation, whether:

1. There is a voting trust for the individual's shares in excess of 24.9 percent and whether there are appropriate rules governing the voting of the trust shares that limit the impact of the ownership in excess of 24.9 percent by providing for the independence of the voting of such shares;

2. There is a plan by which the individual will reduce his or her ownership to 24.9 percent or less over time;

3. The individual has experience in banking, and whether his or her involvement in banking institutions demonstrates an appropriate level of expertise in banking;

4. Management of the depository involved demonstrates an appropriate level of expertise in banking;

5. There are independent directors on the board, and if so, their percentage membership of the board;

6. There is a detailed corporate governance plan;

7. There is a policy in place to take detailed corporate minutes;

8. There is a policy in place for the recusal of the individual owner on matters affecting his or her personal interests related to the depository; and

9. There is a policy for review of insider transactions that is independent of the parties involved.

(e) The determination made pursuant to (d) above shall constitute a final agency decision.

N.J. Admin. Code § 3:1-2.19

Amended by R.1984 d.119, eff. 4/16/1984.
See: 16 N.J.R. 174(a), 16 N.J.R. 870(a).
Specific minimums deleted, Commissioner granted greater discretion; (d) deleted.
Amended by R.1991 d.48, effective 2/4/1991.
See: 22 N.J.R. 3425(a), 23 N.J.R. 294(b).
Minimum changed from $ 2,000,000 to $ 7,000,000.
Amended by R.1992 d.483, effective 12/7/1992.
See: 24 N.J.R. 3034(a), 24 N.J.R. 4341(a).
Revised heading and (a)-(c); added (d)-(e).
Amended by R.1993 d.258, effective 6/7/1993.
See: 25 N.J.R. 1033(a), 25 N.J.R. 2248(a).
Revised (a).
Recodified from 3:1-2.21 and amended by R.1996 d.483, effective 10/7/1996.
See: 28 N.J.R. 2661(a), 28 N.J.R. 4417(b).
Former N.J.A.C. 3:1-2.20, "Charter applications; conditions for approval", recodified to 3:1-2.19.
Recodified from N.J.A.C. 3:1-2.20 and amended by R.2001 d.112, effective 4/2/2001.
See: 33 N.J.R. 213(a), 33 N.J.R. 1087(a).
Rewrote (c). Former N.J.A.C. 3:1-2.19, Charter applications; conditions for approval, recodified to N.J.A.C. 3:1-2.18.
Amended by R.2002 d.38, effective 2/4/2002.
See: 33 N.J.R. 3598(a), 34 N.J.R. 731(a).
In (a), inserted references to stock institutions and updated capital amounts.
Amended by R.2007 d.130, effective 5/7/2007.
See: 38 N.J.R. 4777(a), 39 N.J.R. 1668(a).
Deleted (d); recodified (e) as (d); rewrote (d); and added new (e).