The board of directors of the Federal Deposit Insurance Corp. on Tuesday approved V.I. Community Bank's purchase of Chase Manhattan Bank's assets in the territory.
More than a year ago, the V.I. Banking Board began the approval that would allow VICB to purchase Chase's seven branches in the USVI. After a disagreement over the local board's initial approval of the deal last May, VICB threatened to drop its bid. The banking board and VICB reentered negotiations and the two parties then agreed on an amended approval at the end of July.
Final approval of the acquisition rested with the FDIC, which blessed the deal at a meeting in Washington, D.C., on Tuesday.
"This approval allows us to go forward with the acquisition, which we expect will be completed in the first quarter of 2001," said Michael Dow, VICB president.
VICB is owned by Jeffrey Prosser, who also sits as the bank's chairman of the board. Other board members include his wife, Dawn Prosser, J'ada Finch Sheen, John Raynor and Dow.
"This acquisition will allow us to expand our operations and continue to concentrate on meeting the needs of small- and medium-sized businesses," Prosser said in a statement. "Chase has been a leader in home mortgages, and we will continue that trend."
VICB has 49 employees, $78 million in assets and two branches on St. Croix. The VICB release said a third branch will open on Nov. 20.
Chase has 250 employees, $342 million in assets and seven branches in the territory: four on St. Thomas, one on St. John and two on St. Croix. VICB officials have previously said that Chase employees in the territory would be kept on after the sale.
Meanwhile, Dow said VICB will now concentrate on a separate approval process for the acquisition of Chase's assets in the British Virgin Islands.
As part of the deal, VICB, which is the only bank in the territory that receives tax breaks from the Industrial Development Commission, will pay an annual banking fee of $400,000 over and above current licensing fees for each year remaining on its IDC certificate, which ends in 2004. While VICB's IDC benefits will accrue to the Chase acquisitions until the end of the IDC certificate, the bank won't seek a renewal at the end of the term.
VICB must also receive a commitment from the Federal Home Loan Bank that it will extend a line of credit in excess of $100 million to VICB and that the local bank will maintain its eligibility.
VICB began in December of 1994 with the acquisition by Prosser of the two Core-States First Pennsylvania Bank branches on St. Croix.
