Banking and Finance Law Daily Wrap Up, DIRECTORS, OFFICERS AND EMPLOYERS—Fed allows Dr. Hawks to become a director on IFC’s board, (Dec 4, 2025)

By Sherri M. Schroeder, J.D.

Because Dr. Stephen Hawks already serves as a director of First Financial Corporation and Impact Bank in the same area, Hawks needed an exemption to serve with INTRUST Financial Corporation.

In a letter to INTRUST Financial Corporation’s (IFC’s) General Counsel, the Board of Governors of the Federal Reserve System has granted an exemption so that Dr. Stephen W. Hawks can become a director on the board of IFC, which is based in Wichita, Kansas. Because Dr. Hawks already serves as a director of First Financial Corporation (FFC) and as a director of FFC’s subsidiary depository institution, Impact Bank, both of Wellington, Kansas, the Depository Institution Management Interlocks Act and its implementing regulation, Regulation L, would typically prohibit him from holding that position without such an exemption.

The Interlocks Act and Regulation L prohibit a management official of a depository organization from serving at the same time as a management official of an unaffiliated depository organization if the depository organizations in question, or an affiliate thereof, have offices in the same metropolitan statistical area and each depository organization has total assets of $50 million or more. However, under the general exemption provision of Regulation L, the Fed’s Board of Governors may permit an interlock that otherwise would be prohibited if the Board determines that the interlock would not result in a monopoly or in a substantial lessening of competition and would not present safety and soundness concerns.

Here, the Board determined that the interlocks would not result in a monopoly or in a substantial lessening of competition. Although both IFC and FFC have subsidiary banks competing directly in the Wichita, Kansas, banking market, if the proposed interlocks were evaluated as a merger, the competitive effects of the combination in the local retail banking market, as measured by the Herfindahl-Hirschman Index and the combined market share in the market, “would be consistent with Board precedent and within the thresholds of the 1995 Bank Merger Competitive Review guidelines,” stated Michele Taylor Fennell, Associate Secretary of the Board, in the Board’s letter. Furthermore, because Dr. Hawks has experience serving on the board of directors of FFC and Impact Bank since 2009, the interlocks would not present safety and soundness concerns.

However, according to the Board’s letter, “The Board reserves the right to revoke the exemption should the interlock result in a monopoly or a substantial lessening of competition or present safety and soundness concerns.”

Attorneys: Brad Mirakian, INTRUST Financial Corporation.

Companies: First Financial Corporation; Impact Bank; INTRUST Financial Corporation

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