Fed OKs Protective Life's Plans To Become Bank Holding Co
January 15 2009 - 2:30PM
Dow Jones News
Protective Life Corp. (PL) has won approval from the Federal
Reserve to reorganize as a bank holding company in a move that
could give the Birmingham-based insurer access to bailout funds
from the Treasury Department.
Protective Life was seeking to become a bank holding company by
acquiring Bonifay Holding Co. and its subsidiary bank, the Bank of
Bonifay - both of which are based in Bonifay, Fla.
The Fed announced Thursday that it has signed off on those
plans.
In its order approving the application, the Fed noted that
Protective Life is an insurance and financial-services firm that
also offers annuity and other investment products, and the firm's
consolidated assets total $41.1 billion.
Meanwhile, the Fed described the bank Protective Life is
acquiring, the Bank of Bonifay, as the "143rd largest depository
institution in Florida."
The Federal Reserve Board found Protective Life to be
well-capitalized and said the insurer "would remain well
capitalized on consummation of the proposal." The board also
concluded that the proposal wouldn't result in any significantly
averse effects on competition in any relevant banking market.
Since Congress approved the $700 billion financial bailout
package last autumn, several other firms recently have opted to
become bank holding companies. The Fed, for instance, approved
global commercial finance company CIT Group Inc.'s (CIT)
application in December. The company had announced that changing
its status would allow it to possibly receive a capital injection
from the Treasury. Additionally, bank holding companies are
eligible to borrow from the Fed's discount window.
Also last month, the Fed approved auto-financing company GMAC
LLC.'s application to become a bank holding company. The following
week, the Treasury Department announced $6 billion in support for
the firm.
-By Maya Jackson Randall, Dow Jones Newswires; 202-862-9255;
maya.jackson-randall@dowjones.com
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