First National Bank Affiliate Companies
Question
First National Bank is a wholly owned subsidiary of Bank Holding Company, Inc. Which of the following companies is NOT an affiliate of First National Bank?
Answers
Explanations
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A. B. C. D.B
Under the Bank Holding Company Act, a bank holding company is defined as any company that owns or controls one or more banks. Affiliates of a bank include companies that are directly or indirectly controlled by the bank holding company, as well as companies that control the bank holding company.
Given that First National Bank is a wholly owned subsidiary of Bank Holding Company, Inc., we need to identify which of the following companies is not an affiliate of First National Bank.
A. A company that owns 60 percent of Bank Holding Company, Inc. This company is an affiliate of First National Bank since it controls the bank holding company that owns First National Bank.
B. A company of which First National owns 100 percent of the stock, set up solely to hold the title to the First National Bank building. This company is a subsidiary of First National Bank, but it is not an affiliate since it is not controlled by the bank holding company.
C. A company established to sell securities and that is 100 percent owned by Bank Holding Company, Inc. This company is an affiliate of First National Bank since it is directly controlled by the bank holding company that owns First National Bank.
D. Another bank that is owned by Bank Holding Company, Inc. This bank is an affiliate of First National Bank since it is owned by the same bank holding company that owns First National Bank.
Therefore, the answer is B. A company of which First National owns 100 percent of the stock, set up solely to hold the title to the First National Bank building, is not an affiliate of First National Bank.
