HAR §16-25-36. Criteria for existing institutions

The criteria for proposed institutions and for existing institutions are generally the same. The following criteria may apply to applications submitted by existing institutions: (1) Financial history and condition. The financial history of an operating institution is usually reflected in its present condition. Where the financial history of an operating institution has not been successful, reasonable assurances shall be provided that the cause of any past difficulties of a serious nature have in large measure either been overcome or cease to exist. With respect to an operating institution's financial condition, the general quality of net assets shall be satisfactory and on a par with that of other comparable institutions. In appraising the value and quality of an applicant operating institution's assets, the same appraisal and classification procedures and criteria shall be followed as in regular division examinations. Other information to be considered include: violations of laws and rules, contingent liabilities, existing litigation against the institution, dividend and remuneration policies, policies regarding prompt recognition and charge-off of losses, and other matters which could affect the institution's condition. (2) Adequacy of the capital structure. An existing institution should have sufficient capital to support the volume, type, and character of its business, provide for losses, and meet the reasonable needs of the community for financial services. (3) Future earnings prospects. The earnings capability of an existing institution is reflected in its earnings record. An operating 25-18 §16-25-37 institution's earnings records shall indicate ability to pay all operating expenses with a safe margin for the absorption of losses and for the payment of reasonable dividends. (4) General character of management. In the case of an existing institution, management may be evaluated both from the standpoint of the institution's condition and the vantage point of management's past performance as reflected in the books and records of the institution, and previous examination reports and correspondence. (5) Convenience and needs of the community. This criterion is closely related to those outlined with respect to the "future earnings prospect" criterion. An institution which is successfully and profitably operated, and which has a recognized place and established customer relationships in the community is presumed to promote the convenience and advantage of the community. [Eff 8/13/87; am and comp 1/27/01; comp 8/04/05] (Auth: HRS §§412:2-100, 412:2-107) (Imp: HRS §§412:2-503, 412:2-504, 412:3-102, 412:3-402, 412:3- 503, 412:3-505, 412:3-607, 412:3-608, 412:3-609, 412:5-201, 412:5- 203, 412:5-205, 412:5-205.5, 412:5-205.7, 412:5-302, 412:5-305, 412:5-402, 412:5A-201, 412:5A-205, 412:6-201, 412:6-203, 412:6- 204, 412:6-303, 412:6-306, 412:7-201, 412:7-203, 412:7-204, 412:7-306, 412:7-408, 412:8-202, 412:8-204, 412:8-301, 412:9-201, 412:9-400, 412:9-401, 412:9-403, 412:9-409, 412:10-109, 412:10-201, 412:10-502, 412:10-800, 412:12-102, 412:12-103, 412:12-104, 412:12-107, 412:13-202, 412:13-203, 412:13-205, 412:13-213, 412:13-214, 412:13-216, 412:13-217, 412:13-218, 412:13-222, 412:13-301)