Inside this issue: Action on Applications 3 for the Month DBF Outreach 6 News and topics of interest to financial institutions regulated by the Department of Banking and Finance August 2018 Legal Lending Limit: Combination of Debt Questions have been recently posed to the Department related to the interpretation of Rule 80-15-.11, which deals with the combination of debt for legal lending limit (LLL) purposes. While the Rule details multiple debt combination requirements, the two most common instances for combining loans occur when a) control or ownership is 25% or more and b) when guarantees are present, to the extent of the guaranteed amount. In addition, it is important to note that pursuant to O.C.G.A. 7-1-285(a.1) and (b), obligations are calculated at the time the bank issues the binding commitment. The following three examples described below clarify the Department's interpretation: Ownership Combinations The following example details debt combinations based on control and ownership for multiple debts of individuals. The debts of any entity where there is 25% or more control or ownership will be aggregated as debt for the individual legal lending limit. Company Alpha Beta Products, LLC C Company, Inc. Doing Good, LLC, a not-for-profit (Smith, Hall, and Williams serve as the only three directors, so they "control" 33% of the non-profit) Debts included in the Secured LLL Jack Smith 50% 25% 20% 33% Frank Hall 50% 25% 30% 33% Company Alpha, Beta Products, and Doing Good All companies included Susan Williams 0% 25% 50% 33% Beta Products, C Company, and Doing Good Ownership and Guarantee Combinations As set forth in the example on the following page, ownership and guarantee combinations for multi-layer limited LLC can be a much more complex calculation. For combination purposes, ownership interests will flow through corporate entities to the individual proportional ownership of corporate obligations. Guarantee commitments extend only to the specific individuals or entities to the extent of the guaranteed amount. In the example, ownership of 25% or more and the amount of the guarantee will be included to determine the legal lending limit for the natural person or legal entity. The full amount of the loan will be considered on day one, corresponding to credit exposure at the time of binding commitment. Page 2 Kim Jones 50% Owner of Hotel Holdings, LLC $1,000,000 Limited Personal Guarantee on Best Hotel Ever, LLC Debt 15% Personal Ownership of Best Hotel Ever, LLC August 2018 Pat Smith 50% Owner of Hotel Holdings, LLC $1,000,000 Limited Personal Guarantee on Best Hotel Ever, LLC Debt 5% Personal Ownership of Best Hotel Ever, LLC Hotel Holdings, LLC 20% Owner of Best Hotel Ever, LLC 100% Corporate Guarantee of Best Hotel Ever, LLC $4MM Debt Best Hotel Ever, LLC Loan Amount $4,000,000 Guarantee Amount Personal Ownership Corporate Ownership Kim Jones $1,000,000 15% 10% (personal ownership 50% of Hotel Holdings, LLC who holds 20% ownership of Best Hotel Ever, LLC / 50% x 20% = 10%) Pat Smith $1,000,000 5% 10% (personal ownership 50% of Hotel Holdings, LLC who holds 20% ownership of Best Hotel Ever, LLC / 50% x 20% = 10%) Hotel Holdings, LLC $4,000,000 N/A 20% Debt required to be aggregated with any other existing bank obligations and legal reason $4,000,000 Ownership of 25% (personal ownership of 15% plus corporate own- ership of 10%) $1,000,000 Personal guarantee amount applies. Total ownership of 15% is less than 25% LLL threshold. $4,000,000 Full Corporate Guaran- tee Credit Participation Programs The Department has also reviewed the question of loan combinations in certain credit participation programs. Generally, when the credit originator provides credit enhancements or creates a contingent liability commitment that demonstrates an ongoing financial obligation, the credits should be aggregated as debt to the credit originator. Credit enhancements and ongoing financial commitments include, but are not limited to, interest rates discounted from the original note; access to an established reserve account from the third-party for past due payments; collateral substitution options; pooling of payments; the third-party having sole authority to negotiate changes to a repayment schedule, refinance, or collection proceedings; and the third-party performing all origination, servicing, and ongoing credit administration. Further, many of these credit participation programs consist of loans that are underwritten based on a cash flow analysis since the bank may not be assured of a first lien position, loan proceeds are used for leasehold improvements, or the collateral may not qualify as good collateral or other ample security per O.C.G.A. 7-1-285(b). Such underwriting would result in these loans being limited to the unsecured legal lending limit of the acquiring bank. The Department welcomes all questions regarding interpretations of the legal lending limit. Please contact your Supervisory Manager or Deputy Commissioner for Supervision Melissa Sneed at 770-986-1646 or msneed@dbf.state.ga.us. Page 3 August 2018 Action on Applications for the Month The following is a summary of official action taken by the Department on applications by Georgia state-chartered financial institutions under Title 7, Chapter 1 of the O.C.G.A. and petitions for certificate of incorporation of financial institutions and other matters of interest during the month of August 2018: FINANCIAL INSTITUTION Georgia Heritage Bank Dallas, GA 30132 Southern Bank Sardis, GA 30456-0100 APPLICATIONS FOR DISSOLUTION APPROVAL DATE 08-06-2018 Pending EFFECTIVE DATE APPLICATIONS TO ESTABLISH A BRANCH OFFICE FINANCIAL INSTITUTION BRANCH OFFICE APPROVAL DATE Delta Community Credit Union Atlanta Jonesboro Road 210 Jonesboro Road McDonough, GA 30253 Henry County 08-22-2018 BEGIN BUSINESS DATE Delta Community Credit Union Atlanta Coweta Crossroads 90 Glenda Trace Newnan, GA 30265 Coweta County 12-19-2017 08-09-2018 Georgia's Own Credit Union Atlanta Main Office 100 Peachtree Street Atlanta, GA 30303 Fulton County 09-23-2016 08-10-2018 SunTrust Bank Atlanta SunTrust Bank Atlanta Ruskin 5090 N. US Highway 41 Apollo Beach, FL 33572 Hillsborough County Arbutus Plaza 1064 Maiden Choice Lane Baltimore, MD 21229 Baltimore County Pending Pending SunTrust Bank Atlanta SunTrust Bank Atlanta United Community Bank Blairsville Rockville Town Square 100 Gibbs Street, Unit A Rockville, MD 20850 Montgomery County Sunrise 3499 N University Drive Sunrise, FL 33351 Broward County Spartanburg 439 E. Main Street Spartanburg, SC 29302 Spartanburg County Pending Pending 08-28-2018 Page 4 First Bank Dalton Colony Bank Fitzgerald Colony Bank Fitzgerald SunMark Community Bank Hawkinsville The Brand Banking Company Lawrenceville The Brand Banking Company Lawrenceville The Brand Banking Company Lawrenceville The Brand Banking Company Lawrenceville Southwest Georgia Bank Moultrie South Thornton 905 South Thornton Avenue Dalton, GA 30720 Whitfield County Albany 113 North Westover Boulevard Albany, GA 31707 Dougherty County Statesboro 104 Springhill Drive Statesboro, GA 30458 Bulloch County Byron 202 W White Road Byron, GA 31008 Peach County Alpharetta 3960 Old Milton Parkway Alpharetta, GA 30005 Fulton County Buckhead 3328 Peachtree Road NE Atlanta, GA 30326 Fulton County Dacula 485 Fence Road Dacula, GA 30019 Gwinnett County Kennesaw 3415 George Busbee Parkway NW Kennesaw, GA 30144 Cobb County Tifton 205 East 8th Street Tifton, GA 31794 Tift County 08-29-2018 08-22-2018 08-29-2018 08-22-2018 06-25-2018 06-25-2018 04-24-2018 06-25-2018 01-19-2017 August 2018 08-15-2018 08-15-2018 08-31-2018 08-15-2018 08-13-2018 FINANCIAL INSTITUTION SunTrust Bank Atlanta SunTrust Bank Atlanta APPLICATIONS TO CHANGE LOCATION CHANGE LOCATION OF APPROVAL DATE EFFECTIVE DATE Sandy Springs From: 5898 Roswell Road NE Atlanta, GA 30328 Fulton County To: 6240 Roswell Road Atlanta, GA 30328 Fulton County 04-30-2018 08-17-2018 Scenic Promenade From: 1905 Scenic Highway Snellville, GA 30078 Gwinnett County To: 1689 Scenic Highway North Snellville, GA 30078 Gwinnett County 03-05-2018 08-24-2018 Page 5 Pinnacle Bank Elberton LGE Community Credit Union Marietta Franklin Springs From: 2311 West Main Street Franklin Springs, GA 30639 Franklin County To: 25 Westclock Circle Franklin Springs, GA 30639 Franklin County Woodstock From: 12186 Highway 92, #11-B Woodstock, Georgia 30188 Cherokee County To: 12900 Highway 92 Woodstock, Georgia 30188 Cherokee County 08-27-2018 08-31-2018 August 2018 SURVIVOR Cadence Bank, N.A. Birmingham, AL National Bank of Commerce Birmingham, AL Bank of Early Blakely, GA Synovus Bank Columbus, GA Family First Credit Union Hapeville, GA LGE Community Credit Union Marietta, GA FNB Bank Scottsboro, AL North Georgia Credit Union Toccoa, GA FINANCIAL INSTITUTION MERGERS MERGED INSTITUTION State Bank and Trust Company Macon, GA First Landmark Bank Marietta, GA One South Bank Chipley, FL Florida Community Bank, National Association Weston, FL Atlanta Federal Credit Union Atlanta, GA Georgia Heritage Bank Dallas, GA Capital Bank Fort Oglethorpe, GA Rabun-Tallulah Federal Credit Union Tiger, GA APPROVAL EFFECTIVE DATE DATE 08-23-2018 06-26-2018 08-01-2018 Pending Pending 08-29-2018 08-06-2018 Pending 08-13-2018 APPLICATIONS TO ACQUIRE VOTING STOCK OF A FINANCIAL INSTITUTION BANK HOLDING COMPANY TO ACQUIRE APPROVAL DATE Synovus Financial Corp. Columbus, GA FCB Financial Holdings, Inc. Weston, FL Pending Page 6 August 2018 DBF Outreach and Upcoming Speaking Engagements GBA Compliance Conference Deputy Commissioner for Supervision Melissa Sneed will be speaking at the Georgia Bankers Association's Compliance Conference, held on September 12-14 at Crowne Plaza Atlanta SWPeachtree City, Peachtree City, Georgia. GBA De Novo Bank Accelerator Webinar Series Deputy Commissioner for Supervision Melissa Sneed will be presenting in the Georgia Bankers Association's De Novo Bank Accelerator Webinar Series on October 31 under the topic Regulatory Views on De Novo Banks. The Department is the state agency that regulates and examines Georgia state-chartered banks, state-chartered credit unions, state-chartered trust companies, and bank holding companies that own Georgia state-chartered financial institutions. The Department also has responsibility for the supervision, regulation, and examination of Merchant Acquirer Limited Purpose Banks chartered in Georgia. In addition, the Department has regulatory and/or licensing authority over mortgage brokers, lenders and processors, mortgage loan originators, check cashers, sellers-issuers of payment instruments, money transmitters, and international banking organizations. Our Mission is to promote safe, sound, competitive financial services in Georgia through innovative, responsive regulation and supervision. Our Vision is to be a willing and able partner with our regulated entities in order to support vibrant economic growth and prosperity in Georgia. Subscribe to Receive this Publication: Notice of this publication is delivered to interested parties via e-mail. To subscribe to this publication as well as other items of interest, please visit our website at https://dbf.georgia.gov/. Department of Banking and Finance 2990 Brandywine Road, Suite 200 Atlanta, Georgia 30341-5565 Phone: (770) 986-1633 Fax: (770) 986-1654 or 1655