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March 9, 1999

Timothy M. Sisson, Esq.
Senior Counsel
Michigan National Corporation
P.O. Box 9065
Farmington Hills, Michigan 48333-9065

Dear Mr. Sisson:

Pursuant to your request, this letter describes the implications under the Bank Holding Company Act of 1956 (“BHC Act”) of the continued ownership by Michigan National Corporation, Farmington Hills, Michigan (“MNC”), of all the SeriesA Preferred Stock (“Preferred Shares”) of Bloomfield Hills Bancorp, Bloomfield Hills, Michigan (“BHB”).

As indicated in your letter, dated January 19, 1999, MNC owns 100percent of the issued and outstanding Preferred Shares. Pursuant to ArticleIII(D)(6) of the Amended and Restated Articles of Incorporation of BHB, the holders of the Preferred Shares, voting together as a class, have the right to elect one director of BHB. Because holders of Preferred Shares are entitled to vote on the selection of directors of BHB, the shares are “voting securities” for purposes of the BHC Act. See 12 C.F.R. 225.2(q)(1)(i), (2)(iii).11 In addition, since the Preferred Shares vote as a separate class in the election of directors, the Preferred Shares constitute a separate class of voting shares for purposes of the BHC Act. See 12 C.F.R. 225.2(q)(3).

The Board has defined “control” of a bank or other company to include ownership, control, or the power to vote 25 percent or more of the outstanding shares of any class of voting securities of the bank or other company. 12 C.F.R. 225.2(e)(1)(i). Because MNC owns 100 percent of the Preferred Shares, MNC owns more than 25percent of a class of voting securities of BHB and, thus, is deemed to control BHB.

If BHB’s Amended and Restated Articles of Incorporation are amended to eliminate the right of the Preferred Shares to vote on the election of directors of BHB in any manner, the Preferred Shares would no longer constitute voting securities for purposes of the BHC Act.

I hope this information is useful. Please contact me, at (202) 452-2534, or Kieran Fallon, at (202) 452-5270, if you have any questions concerning this letter.

Very truly yours,

(Signed) Gordon L. Miller

Gordon L. Miller

Senior Attorney

cc: Kieran Fallon
Patrick Wilder, Federal Reserve Bank of Chicago


1. You have indicated that since 1995 MNC has not exercised its right, as owner of all the Preferred Shares, to select a director of BHB. Although MNC has voluntarily decided not to exercise the voting rights associated with the Preferred Shares, BHB’s Amended and Restated Articles of Incorporation continue to entitle the Preferred Shares to select a director of BHB. Accordingly, the Preferred Shares continue to constitute “voting securities” for purposes of the BHC Act despite MNC’s decision not to exercise its voting rights. See 12 C.F.R. 225.2(q)(1). Return to text

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Last update: December 10, 1999