Metrocorp, Inc. - Page 41




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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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