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institution and, after the transfer, all deposits are insured by
the BIF. Pursuant to this method, Metrobank was required to pay
the exit and entrance fees. The other way Metrobank could have
acquired Community’s assets was to effectuate a merger with
Community. If Metrobank had chosen to acquire Community through
a merger it would have avoided the requirement to pay exit and
entrance fees, but the deposits acquired from Community would
have continued to be insured by the SAIF. Metrobank undoubtedly
had its reasons for not entering into a merger transaction. On
brief, petitioner states that among its reasons for choosing to
acquire Community’s assets in a conversion transaction in which
it had to pay the exit and entrance fees were to reduce future
deposit insurance premiums and reduce the future regulatory and
reporting requirements that would otherwise have applied.5
The fact that the expenditures by Metrobank were incurred in
connection with the acquisition of Community’s assets is
5These objectives appear to be significant long-term
benefits that support respondent’s argument. Petitioner states
on page 13 of its brief:
Metrobank’s purposes for incurring the
expenditures were twofold. First, by electing to
convert the deposits assumed from the SAIF to the BIF,
Petitioner hoped to reduce future deposit insurance
assessments because the BIF assessment rate was much
less than the SAIF assessment rate. Second, Petitioner
was already a member of BIF and understood the FDIC
rules and regulations for insurance coverage through
this system. Maintaining insurance coverage under both
funds would significantly increase the reporting and
administrative requirements on an ongoing basis.
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