Bank Holding CompanyChapter 3

A bank holding company, as provided by the Bank Holding Company Act of 1956 ,is broadly defined as any company that has control over a bank.

New or smaller banks often re-structure themselves into bank holding companies to take advantage of the greater financial flexibility this corporate and legal status permits. Becoming a bank holding company makes it easier for the firm to raise capital than as a traditional bank. The holding company can assume debt of shareholders on a tax free basis, borrow money, acquire other banks and non-bank entities more easily, and issue stock with greater regulatory ease. It also has a greater legal authority to conduct share repurchases of its own stock.

The downside includes responding to additional regulatory authorities, especially if there are more than 300 shareholders, at which point the bank holding company is forced to register with the Securities and Exchange Commission. There are also added expenses of operating with an extra layer of administration.

Top 10 bank holding companies (BHCs) as of 12/31/2009

1. BANK OF AMERICA CORPORATION (1073757) CHARLOTTE, NC   $2,252,813,550

2. JPMORGAN CHASE & CO. (1039502) NEW YORK, NY   $2,041,009,000

3. CITIGROUP INC. (1951350) NEW YORK, NY   $1,888,599,000 4. WELLS FARGO & COMPANY (1120754) SAN FRANCISCO, CA  

$1,228,625,000 5. GOLDMAN SACHS GROUP, INC., THE (2380443) NEW YORK, NY  

$882,586,000 6. MORGAN STANLEY (2162966) NEW YORK, NY   $769,503,000 7. METLIFE, INC. (2945824) NEW YORK, NY   $535,192,209 8. HSBC NORTH AMERICA HOLDINGS INC. (3232316) METTAWA, IL

  $390,657,817 9. BARCLAYS GROUP US INC. (2914521) WILMINGTON, DE  

$377,926,385 10. TAUNUS CORPORATION (2816906) NEW YORK, NY  

$368,225,000

The most important Nonbank financially related businesses a BHC can acquire

Finance companies Mortgage companies Data Processing

companies Factoring companies Security Brokerage firms Financial Advising Credit Insurance

Underwriters Merchant Banking Security Underwriting

Firms Trust Companies Credit Card Companies Leasing Companies Real Estate Services Savings And Loan

Associations

Presentation of Accounts

consolidated Unconsolidated