skip to main navigation skip to secondary navigation skip to content
Board of Governors of the Federal Reserve System
skip to content

Semiannual Report on Banking Applications Activity


This report provides information regarding the applications filed by banking organizations and reviewed by the Federal Reserve as of the most recent reporting period ending on June 30 and December 31 of each calendar year.

The Federal Reserve, in its role as a primary federal regulator, reviews applications submitted by bank holding companies (BHCs), state member banks, savings and loan holding companies (SLHCs), foreign banking organizations, and other entities and individuals for approval to undertake various transactions, including mergers and acquisitions, and to engage in new activities.

The Federal Reserve reviews and acts on proposals filed under the Bank Holding Company Act; the Bank Merger Act; the Change in Bank Control Act (CIBCA); the Federal Reserve Act; section 914 of the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA); section 10 of the Home Owners' Loan Act (HOLA); the International Banking Act; and other provisions of law.1

Overview of Activity

The Federal Reserve reviewed 654 proposals in the first half of 2015, of which 582 were approved, 60 were withdrawn, 4 were mooted, and 8 were returned (table 1).2 Total dispositions were nearly unchanged with 654 in the first half of 2015, compared with 645 in the first half of 2014. Similarly, the composition of proposals were consistent for both periods. The majority of proposals were merger and acquisition (M&A) proposals, FIRREA notices, branch applications, and CIBCA notices.

Table 1. Dispositions and processing times of approved proposals, 2010-14 and 2014:H1 and 2015:H1
All proposals 2010 2011 2012 2013 2014 2014:H1 2015:H1
Approved 1,260 1,265 1,361 1,305 1,218 588 582
Withdrawn 206 169 157 123 101 45 60
Denied 0 0 0 1 1 1 0
Mooted 23 19 20 10 11 5 4
Returned 8 12 18 6 11 6 8
Total 1,497 1,465 1,556 1,445 1,342 645 654
Percent withdrawn of total 14% 12% 10% 9% 8% 7% 9%
Processing time of
approved proposals (days)
Average 49 51 49 37 44 46 43
Median 30 30 30 28 30 30 30

Table 1 also illustrates that the average number of days to approve a proposal was 43 days in the first half of 2015, compared with 46 days in the first half of 2014. The median processing time has remained steady at 30 days.

Nine percent of the proposals disposed of in the first half of 2015 were withdrawn, which is similar to the percentage in recent years. Proposals are withdrawn most often at the initiative of the applicant. However, proposals also may be withdrawn after the Federal Reserve informs the applicant that a significant issue exists that precludes an approval recommendation by staff based on staff's review of the statutory standards for approval.3 For example, the applicant or resulting banking organization's financial or managerial condition may be less than satisfactory; the Community Reinvestment Act (CRA) or consumer compliance record, including fair lending (see the section on Consumer Compliance and CRA), may be less than satisfactory or there may be other significant consumer compliance issues; or there may be significant competitive issues.4

Of the 60 proposals withdrawn in the first half of 2015, 45 proposals were withdrawn at the initiative of the applicant without input by the Federal Reserve. Fifteen proposals raised significant issues regarding the statutory factors that must be considered by the Federal Reserve and were withdrawn after consultation with staff. Specifically, these proposals raised financial and managerial issues at the applicant (including two proposals that raised Bank Secrecy Act/anti-money-laundering compliance program issues), legal regulatory conformance issues, and CRA and fair lending issues.

Back to section top


Mergers and Acquisitions

In the first half of 2015, the volume of approved M&A proposals increased to 136, compared with 115 approved in the first half of 2014 (table 2).5 These types of proposals accounted for 23 percent of total approved proposals in the first half of 2015. In reviewing M&A proposals, the Federal Reserve considers the applicant's current and pro forma financial condition and future prospects, managerial resources, consumer compliance record and performance under the CRA and the Bank Secrecy Act/anti-money-laundering compliance programs, public benefits, and the competitive and financial stability effects of the proposal. Other considerations may include a review of ownership changes of the resultant banking organization or policy questions.

Table 2. Merger and acquisition proposals, dispositions and processing times of approved proposals, 2011-14 and 2014:H1 and 2015:H1
Mergers and acquisitions 2011 2012 2013 2014 2014:H1 2015:H1
Approved 194 226 190 248 115 136
Withdrawn 43 43 40 25 8 16
M&A as a percentage of
total approved proposals
15% 17% 15% 20% 20% 23%
Processing time of
approved proposals (days)
Average 72 67 56 60 58 63
Median 41 41 40 41 40 41

M&A proposals generally are more complex than other proposals because they typically require review of several organizations under multiple statutory factors. As table 2 illustrates, the average and median number of days to approve an M&A proposal in the first half of 2015 were 63 and 41 days, respectively. In comparison, for the same period, the average and median number of days to approve all proposals were 43 and 30 days, respectively (table 1).

The Federal Reserve may receive adverse comments on a proposal from the public.6 Such proposals typically require additional time to allow the applicant the opportunity to respond to the comments and for the Federal Reserve to evaluate the comments. The majority of public comments received by the Federal Reserve are based on the CRA and the fair lending records of the applicant. Comments also may be directed at other considerations of a proposal. Proposals that involve an adverse public comment are required to be acted on by the Board as opposed to the Reserve Banks.7

Table 3 breaks down M&A processing times for proposals that did and did not receive adverse public comments. Although M&A proposals receiving adverse public comments represent a small proportion of total M&A proposals approved by the Federal Reserve, processing times for these proposals are considerably greater than those M&A proposals not receiving such comments. In the first half of 2015, the average number of days to approve M&A proposals that did not receive adverse public comments was 53 days, compared with an average of 208 days for the eight M&A proposals that received adverse public comments.8

Table 3. Merger and acquisition approved proposals, volume and processing times by proposals that did not receive adverse public comments and those that received adverse public comments, 2011-14 and 2014:H1 and 2015:H1
Mergers and acquisitions 2011 2012 2013 2014 2014:H1 2015:H1
Proposals not receiving adverse public comments
Approved 182 219 184 237 109 128
Processing time (days)
Average 62 60 52 53 50 53
Median 41 41 39 40 40 41
Proposals receiving adverse public comments
Approved 12 7 6 11 6 8
M&A receiving adverse public comments as a percentage of total approved M&A proposals 6% 3% 3% 4% 5% 6%
Processing time (days)
Average 212 283 203 209 212 208
Median 144 219 191 188 210 211

Back to section top

Pre-filing Process

Processing delays can be avoided by using the pre-filing process, which provides applicants the opportunity to work with Federal Reserve staff to receive feedback on potential issues related to acquisitions or other proposals before filing a formal application. The pre-filing process is described in the Federal Reserve's Supervisory and Regulation Letter SR 12-12/CA 12-11 titled "Implementation of a New Process for Requesting Guidance from the Federal Reserve Regarding Bank and Nonbank Acquisitions and Other Proposals."

The Federal Reserve reviewed 77 pre-filings in 2013, 72 in 2014, and 36 in the first half of 2015. The majority of pre-filings were related to potential M&A proposals and CIBCA notices. To a lesser degree, pre-filings were submitted by SLHCs that sought preliminary documentation review for dividend waiver requests. Pre-filings may or may not result in a formal filing.

Back to section top

Consumer Compliance and CRA

In evaluating M&A proposals, the Federal Reserve reviews the consumer compliance and CRA records of the acquiring and target organizations as part of its assessment of the managerial factor and convenience and needs factors. An organization's strong consumer compliance and CRA records can facilitate the review process. Conversely, unaddressed consumer compliance and CRA weaknesses in an organization can cause significant delays in the review process and may pose barriers to approval. With respect to M&A proposals, an applicant should ensure that its consumer compliance program, policies, and procedures are adequate to ensure successful integration of the target and that the combined organization would maintain satisfactory consumer compliance and CRA programs following consummation.

Back to section top

Other Analysis

Community Banking Organizations

Table 4 provides the volume and processing times of proposals most commonly submitted by community banking organizations (CBOs) according to their asset size. Small CBOs are those under $1 billion in assets, and large CBOs are those with $1 billion to $10 billion in assets. Noteworthy is that the number of state member bank branch applications submitted by small CBOs (stand-alone transactions, not related to an M&A proposal) increased to 44 in the first half of 2015, from 28 in the second half of 2014 and 37 in the first half of 2014. The increase in branch applications is due to six state member banks opening more than one branch in the first half of 2015.

Table 4. Proposals from CBOs, volume and processing times (days) of approved proposals, 2014:H1, 2014:H2, and 2015:H1
Proposals by applicant
asset size
2014:H1 2014:H2 2015:H1
Approved Average Median Approved Average Median Approved Average Median
Under $1 billion
Change in control 66 67 52 56 63 58 63 63 56
Federal Reserve membership 25 16 15 15 24 15 10 14 14
FIRREA 82 12 7 86 11 5 82 8 6
Mergers and acquisitions 75 48 40 78 59 41 75 59 40
Branch establishment 37 24 27 28 29 23 44 26 22
$1 billion-$10 billion
Change in control 4 78 58 3 106 57 9 97 55
Federal Reserve membership 0 - - 6 24 22 5 38 30
FIRREA 18 8 6 18 7 5 6 15 12
Mergers and acquisitions 35 67 40 47 69 41 49 63 42
Branch establishment 22 20 21 33 24 22 19 23 19

Back to section top

1. For the purpose of this report, the term "proposal" is defined as one filing, which may have been submitted pursuant to multiple statutes. For example, an applicant BHC with a subsidiary state member bank could file to acquire another BHC and merge the target's subsidiary bank with its own state member bank and thereby establish branches. This one "proposal" would include filings under the Bank Holding Company Act, the Bank Merger Act, and the Federal Reserve Act. Further information on banking applications and regulation is available on the Federal Reserve website at Return to text

2. Beginning with this report, table 1 includes mooted and returned dispositions. As a result, historical total dispositions will not exactly match with previous reports (vol. 1, no. 1 and vol. 2, no. 1). A mooted proposal generally is one that no longer requires Federal Reserve action because of a change in circumstances that renders the filing to be no longer required. A returned proposal is one in which the Federal Reserve determines that the filing documentation is significantly insufficient and cannot be processed as presented. Return to text

3. Supervision and Regulation Letter SR 14-2/CA 14-1 "Enhancing Transparency in the Federal Reserve's Applications Process" provides the general public with a better understanding of the Federal Reserve's approach to applications and notices that may not satisfy statutory requirements for approval of the proposal or otherwise raise supervisory or regulatory concerns. This guidance applies to all financial institutions supervised by the Federal Reserve, including those with $10 billion or less in consolidated assets and is available on the Federal Reserve website at Return to text

4. Under section 3 of the Bank Holding Company Act, for example, the Federal Reserve must assess whether the following statutory factors are consistent with approval: financial, managerial, future prospects, financial stability, competition, convenience and needs (including CRA performance), and public benefits. Return to text

5. M&A proposals are defined as those filed by BHCs, SLHCs, or state member banks that seek approval to acquire additional ownership interest or to merge with another banking organization. These proposals also include BHC and SLHC formations. Return to text

6. The applicant is required to publish notice of its proposal, typically in newspapers serving certain communities in which the applicant or target has operations. The Federal Reserve also publishes notice in the Federal Register. The notices inform the public of the opportunity to submit written comments on any proposal. Return to text

7. Generally, Reserve Banks can act under delegated authority with respect to proposals that do not receive adverse public comments; do not present significant concerns relative to the statutory factors; do not raise a policy issue; or are not novel, complex, or otherwise required to be acted upon by the Board. Return to text

8. Delays in the processing of M&A proposals with adverse comments may also be caused by other significant policy or supervisory issues raised in the application. Return to text

Last update: October 13, 2015

Back to Top