[Federal Register Volume 80, Number 72 (Wednesday, April 15, 2015)]
[Rules and Regulations]
[Pages 20153-20158]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-08513]
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FEDERAL RESERVE SYSTEM
12 CFR Parts 217, 225, and 238
[Docket No. R-1509]
RIN 1700-AE 30
Regulations Q, Y, and LL: Small Bank Holding Company Policy
Statement; Capital Adequacy of Board-Regulated Institutions; Bank
Holding Companies; Savings and Loan Holding Companies
AGENCY: Board of Governors of the Federal Reserve System (Board).
ACTION: Final rule.
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SUMMARY: The Board is adopting final amendments (Final Rule) to the
Small
[[Page 20154]]
Bank Holding Company Policy Statement (Regulation Y, Appendix C)
(Policy Statement) that: raise from $500 million to $1 billion the
asset threshold to qualify for the Policy Statement; and expand the
scope of companies eligible under the Policy Statement to include
savings and loan holding companies. The Board is also adopting final
conforming revisions to Regulation Y and Regulation LL, the Board's
regulations governing the operations and activities of bank holding
companies and savings and loan holding companies, respectively, and
Regulation Q, the Board's regulatory capital rules.
DATES: The final rule is effective May 15, 2015.
FOR FURTHER INFORMATION CONTACT: Constance M. Horsley, Assistant
Director, (202) 452-5239, Cynthia Ayouch, Manager, (202) 452-2204,
Thomas Boemio, Manager, (202) 452-2982, Douglas Carpenter, Senior
Supervisory Financial Analyst, (202) 452-2205, Page Conkling,
Supervisory Financial Analyst, (202) 912-4647, or Noah Cuttler, Senior
Financial Analyst, (202) 912-4678, Division of Banking Supervision and
Regulation; Laurie Schaffer, Associate General Counsel, (202) 452-2272,
or Tate Wilson, Counsel, (202) 452-3696, Legal Division; Board of
Governors of the Federal Reserve System, 20th and C Streets NW.,
Washington, DC 20551.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Background
II. Overview of Comments
III. Summary of the Final Rule
IV. Administrative Law Matters
A. Regulatory Flexibility Act
B. Paperwork Reduction Act
C. Plain Language
I. Background
On February 3, 2015, the Board invited comment on a proposed rule
(Proposed Rule) \1\ to implement Public Law 113-250 (the Act).\2\ The
Proposed Rule proposed increasing the amount of assets qualifying
holding companies may have, expanding the application of the Policy
Statement to qualifying savings and loan holding companies, revising
the applicability of the Board's regulatory capital rules \3\ to
exclude savings and loan holding companies subject to the Policy
Statement, and revising certain reporting requirements. Specifically,
the Proposed Rule would allow bank holding companies and savings and
loan holding companies with less than $1 billion in total consolidated
assets to qualify under the Policy Statement, provided the holding
companies also comply with three qualitative requirements (Qualitative
Requirements). Previously, only bank holding companies with less than
$500 million in total consolidated assets that complied with the
Qualitative Requirements could qualify under the Policy Statement. With
the exception of the proposed changes to the reporting requirements,
the Board is adopting as final the Proposed Rule without changes.\4\
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\1\ 80 FR 5694 (February 3, 2015) (Proposed Rule).
\2\ Pub. L. 113-250 (December 18, 2014) (Pub. L. 113-250). The
Act was enacted on December 18, 2014, and became immediately
effective.
\3\ 12 CFR part 217 (Regulation Q).
\4\ The comment period for the proposed changes to the reporting
requirements in the Proposed Rule runs through April 6, 2015. Once
the comment period for the proposed reporting requirements closes,
the Board will consider any and all reporting and Paperwork
Reduction Act-related comments before finalizing any reporting
changes.
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The Board issued the Policy Statement in 1980 to facilitate the
transfer of ownership of small community-based banks in a manner
consistent with bank safety and soundness. The Board has generally
discouraged the use of debt by bank holding companies to finance the
acquisition of banks or other companies because high levels of debt can
impair the ability of the holding company to serve as a source of
strength to its subsidiary banks. The Board has recognized, however,
that small bank holding companies have less access to equity financing
than larger bank holding companies and that the transfer of ownership
of small banks often requires the use of acquisition debt. Accordingly,
the Board adopted the Policy Statement to permit the formation and
expansion of small bank holding companies with debt levels that are
higher than typically permitted for larger bank holding companies. The
Policy Statement contains several conditions and restrictions designed
to ensure that small bank holding companies that operate with the
higher levels of debt permitted by the Policy Statement do not present
an undue risk to the safety and soundness of their subsidiary banks.
Previously, the Policy Statement applied only to bank holding
companies with pro forma consolidated assets of less than $500 million
that met the following Qualitative Requirements: (i) Were not engaged
in significant nonbanking activities either directly or through a
nonbank subsidiary; (ii) did not conduct significant off-balance sheet
activities (including securitization and asset management or
administration) either directly or through a nonbank subsidiary; \5\
and (iii) did not have a material amount of debt or equity securities
outstanding (other than trust preferred securities) that are registered
with the Securities and Exchange Commission. The Board last raised the
asset threshold in 2006 when it increased it from $150 million to $500
million.\6\
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\5\ The examples provided in the Policy Statement--
securitization and asset management or administration--are not
exhaustive and serve to highlight off-balance sheet activities that
may involve substantial risk. Other activities may present similar
concerns. See also 71 FR 9897, 9899, fn. 2 (February 28, 2006) (2006
Final Rule).
\6\ See 2006 Final Rule.
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Under the Policy Statement, holding companies that meet the
Qualitative Requirements may use debt to finance up to 75 percent of
the purchase price of an acquisition (that is, they may have a debt-to-
equity ratio of up to 3.0:1), but are subject to a number of ongoing
requirements. The principal ongoing requirements are that a qualifying
holding company: (i) Reduce its parent company debt in such a manner
that all debt is retired within 25 years of being incurred; (ii) reduce
its debt-to equity ratio to .30:1 or less within 12 years of the debt
being incurred; (iii) ensure that each of its subsidiary insured
depository institutions is well capitalized; and (iv) refrain from
paying dividends until such time as it reduces its debt-to-equity ratio
to 1.0:1 or less. The Policy Statement also specifically provides that
a qualifying bank holding company may not use the expedited procedures
for obtaining approval of acquisition proposals or obtaining a waiver
of the stock redemption filing requirements applicable to bank holding
companies under the Board's Regulation Y (12 CFR 225.4(b), 225.14, and
225.23) unless the bank holding company has a pro forma debt-to-equity
ratio of 1.0:1 or less.
II. Overview of Comments
The Board received 11 comments on the Proposed Rule. Comments were
submitted by financial trade associations, individuals associated with
financial institutions, and a law firm that represents bank holding
companies and savings and loan holding companies. While each commenter
expressed general support for the Proposed Rule, some commenters
recommended revisions to the Proposed Rule. For instance, one commenter
expressed support for raising the asset threshold higher than $1
billion. Another commenter expressed support for the nonbanking and
off-balance sheet activity requirements but suggested that the Board
consider rescinding or revising
[[Page 20155]]
the requirement relating to outstanding debt or equity securities
registered with the SEC. The Board's responses to these comments are
discussed below.
III. Summary of the Final Rule
Increase in Amount of Qualifying Assets
Under the Final Rule, a holding company with less than $1 billion
in total consolidated assets may qualify under the Policy Statement,
provided it also complies with the Qualitative Requirements. This new
asset limit is set by statute.\7\ As noted above, commenters generally
supported the Board's proposal to increase the scope of the Policy
Statement by allowing firms with less than $1 billion in total assets
to qualify. One commenter suggested that the threshold be increased to
$5 billion. The Act directs the Board to increase the threshold to $1
billion, and section 171 of the Dodd-Frank Wall Street Reform and
Consumer Protection Act (Dodd-Frank Act) \8\ effectively prevents the
threshold from being raised any higher.
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\7\ Public Law 113-250.
\8\ 12 U.S.C. 5371, as amended.
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Policy Statement's Application to Savings and Loan Holding Companies
The Act also directs the Board to propose revisions to the Policy
Statement that would extend its application to certain savings and loan
holding companies. Consistent with the Proposed Rule, the Final Rule
applies the revised Policy Statement to savings and loan holding
companies by amending Appendix C to 12 CFR part 225 and adding new
section 238.9 to Subpart A of Regulation LL.
As explained in the Proposed Rule, this change requires other
modifications to the Policy Statement to take into account the status
of savings associations under the Bank Holding Company Act of 1956, as
amended (BHC Act). The first Qualitative Requirement uses the terms
``nonbanking activities'' and ``nonbank subsidiary'' to refer to the
activities of a bank holding company. Under the BHC Act, however,
control of a savings association by a bank holding company is
considered a nonbanking activity.\9\ Because savings and loan holding
companies control savings associations, all activities of savings and
loan holding companies, including the control of savings associations
would be considered nonbanking activities under the Policy Statement.
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\9\ See 12 U.S.C. 1841(c)(2)(B), 1841(j), and 1843(i)(1).
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This outcome would be inconsistent with Congressional intent to
apply the Policy Statement to savings and loan holding companies.\10\
The Board therefore will treat subsidiary savings associations of
savings and loan holding companies as if they were banks for purposes
of applying the Policy Statement.
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\10\ See, e.g., Pub. L. 113-250, sec. 2(b).
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As is the case with bank holding companies, whether a savings and
loan holding company engages in ``significant'' nonbanking activities
will depend on the scope of the activities of the savings and loan
holding company, the nature and level of risk of the activities, the
condition of the savings and loan holding company, and other criteria
as appropriate.\11\
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\11\ For purposes of applying the Policy Statement to savings
and loan holding companies, the term ``nonbank subsidiary'' as used
in the Policy Statement refers to a subsidiary of a savings and loan
holding company other than a savings association or a subsidiary of
a savings association.
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Consistent with the Policy Statement's provisions for bank holding
companies, the Board retains the right to exclude any savings and loan
holding company, regardless of size, from the Policy Statement if the
Board determines that such action is warranted for supervisory
purposes.
Policy Statement's Qualitative Requirements
The Final Rule retains the Qualitative Requirements without change.
One commenter noted that the Qualitative Requirements concerning
nonbanking and off-balance sheet activities adequately cover bank
holding companies and savings and loan holding companies that meet the
size threshold but have unusually complex activities at the holding
company level. None of the commenters expressed concerns related to the
nonbanking or off-balance sheet activities requirements. Consistent
with the Board's previously-issued guidance on these two Qualitative
Requirements,\12\ whether a bank holding company or savings and loan
holding company engages in significant nonbanking or off-balance sheet
activities will continue to depend on a consideration of the scope of
the activities, the nature and level of risk of the activities, the
condition of the holding company and its subsidiary depository
institution, and other criteria as appropriate. As previously stated,
determinations of significance are made on a case-by-case basis, and
relatively few bank holding companies or savings and loan holding
companies are likely to be excluded from the Policy Statement due to
the Qualitative Requirements concerning nonbanking and off-balance
sheet activities.\13\
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\12\ See Proposed Rule, 80 FR 5695; 2006 Final Rule, 71 FR 9899-
9900.
\13\ 2006 Final Rule, 71 FR 9900.
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One commenter urged the Board to rescind the Qualitative
Requirement that would disqualify a bank holding company or savings and
loan holding company with a material amount of outstanding SEC-
registered debt or equity securities. In the alternative, the commenter
suggested the Board clarify whether bank holding companies and savings
and loan holding companies that meet the asset size threshold and would
otherwise qualify under the Policy Statement but for having SEC-
registered debt or equity could qualify under the Policy Statement.
The exclusion from the Policy Statement of any bank holding company
that has a material amount of SEC-registered debt or equity securities
reflected the view that SEC registrants typically exhibited a degree of
complexity of operations and access to multiple funding sources that
warranted exclusion from the Policy Statement.\14\ Determinations of
materiality are made on a case-by-case basis in order to assess the
complexity of a firm. In considering whether a savings and loan holding
company or bank holding company has a material amount of SEC-registered
debt or equity securities outstanding that contributes to its
complexity (other than trust preferred securities), the Board may
consider, among other factors: The number and type of classes and
series of stock issued; the holding company's market capitalization;
the number of outstanding shares; the average trading volume; the
holding company's history of issuing equity and debt securities,
including whether the entity has issued any other securities that are
not registered with the SEC (e.g., privately-placed securities); the
nature and distribution of ownership; whether the securities are listed
on a national exchange; whether the holding company qualifies as a
``smaller reporting company'' pursuant to the SEC's regulations and
related interpretations; and the amount, type, and terms of any debt
instruments issued by the entity. While the Policy Statement has
included the ``materiality'' standard since 2006, as a general matter,
application of this standard has not resulted in many bank holding
companies being excluded from the Policy Statement. After considering
the concerns raised by the commenter, the Board is adopting the
Qualitative Requirements unchanged.
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\14\ 2006 Final Rule, 71 FR 9899.
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[[Page 20156]]
Regulation Q Change
When the Board proposed the Proposed Rule, the Board separately
revised Regulation Q, 12 CFR part 217, through issuance of an interim
final rule (Interim Final Rule), to exclude a qualifying savings and
loan holding company from consolidated regulatory capital
requirements.\15\ The Interim Final Rule gave effect to the Act, which
immediately excepted savings and loan holding companies that complied
with the Policy Statement then in effect from the provisions of section
171 of the Dodd-Frank Act.\16\ At that time, the Policy Statement
applied to firms with less than $500 million in total consolidated
assets so the Interim Final Rule contained the same limit. In the
Proposed Rule, the Board proposed further revisions to Regulation Q
that would expand the scope of the exclusion for savings and loan
holding companies to firms with less than $1 billion in total
consolidated assets that also meet the Qualitative Requirements. The
proposed revisions to Regulation Q in the Proposed Rule would supersede
the changes to Regulation Q from the Interim Final Rule. The Board did
not receive any comments concerning the proposed change to Regulation
Q. The Board is adopting as final the proposed revisions to Regulation
Q that conform it to reflect the revised Policy Statement.
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\15\ 80 FR 5666 (February 3, 2015).
\16\ See Pub. L. 113-250.
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Conforming Amendments
A number of filing and other provisions in Regulations Y and LL are
triggered by the asset size established in the Policy Statement. The
Board is adopting as final the proposed changes that enable qualifying
small bank holding companies and savings and loan holding companies to
take advantage of the streamlined informational, notice, and other
regulatory requirements. These technical and conforming amendments
provide relief to most bank holding companies and savings and loan
holding companies with less than $1 billion of total consolidated
assets. The Final Rule includes the following technical and conforming
amendments:
In section 217.1(c)(1)(iii), Regulation Q (12 CFR part
217) excludes savings and loan holding companies that are subject to
the Policy Statement through operation of section 238.9 of the Board's
Regulation LL (12 CFR part 238).
In section 225.2(r), footnote 2, the footnote describing
the application of the definition of ``well-capitalized'' in the
Board's Regulation Y (12 CFR part 225) applies to entities with less
than $1 billion of total assets.
In section 225.4(b)(2)(iii), different pro forma financial
information is required of smaller bank holding companies with less
than $1 billion in total assets than for larger bank holding companies
under section 225.4(b)(1) of the Board's Regulation Y.
In section 225.14(a)(1)(v), different pro forma financial
information is required of smaller bank holding companies with less
than $1 billion in total assets than for larger bank holding companies
under section 225.14 of the Board's Regulation Y.
In section 225.17(a)(6), footnote 6, a bank holding
company with less than $1 billion in assets can satisfy the debt
requirement if it complies with the Policy Statement.
In section 225.23(a)(1)(iii), different pro forma
financial information is required of smaller bank holding companies
with less than $1 billion in total assets than for larger bank holding
companies under section 225.23 of the Board's Regulation Y.
IV. Administrative Law Matters
A. Regulatory Flexibility Act Analysis
The Board is providing a final regulatory flexibility analysis with
respect to the Final Rule. As discussed above, the Final Rule reduces
regulatory burden on small entities by excluding many bank holding
companies and savings and loan holding companies with total
consolidated assets of less than $1 billion that meet the Qualitative
Requirements from the application of Regulation Q.
The Regulatory Flexibility Act, 5 U.S.C. 601 et seq., generally
requires that an agency provide a final regulatory flexibility analysis
in connection with a final rule. Under regulations issued by the Small
Business Administration, a small bank holding company, bank, or savings
and loan holding company is defined as having assets of $550 million or
less (collectively, small banking organizations).\17\ As of December
31, 2014, there were approximately 3,862 small bank holding companies
and 275 small savings and loan holding companies.
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\17\ See 13 CFR 121.201. Effective July 14, 2014, the Small
Business Administration revised the size standards for banking
organizations to $550 million in assets from $500 million in assets.
79 FR 33647 (June 12, 2014).
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The Board received no comments from the public or from the Chief
Counsel for Advocacy of the Small Business Administration in response
to the initial regulatory flexibility analysis provided with the notice
of proposed rulemaking. Thus, no issues were raised in public comments
related to the Board's initial regulatory flexibility act analysis and
no changes are being made in response to such comments.
The Final Rule impacts small bank holding companies and small
savings and loan holding companies with total consolidated assets of
$500 to $550 million that meet the Qualitative Requirements by
providing an exclusion for these companies from Regulation Q. The Board
believes that most affected small banking organizations already hold
more capital than is required under Regulation Q, so the burden
reduction from the exclusion from Regulation Q is primarily related to
compliance and systems necessary to comply with Regulation Q. In
addition, affected small bank holding companies will now be able to
take advantage of the applications processing procedures provided to
qualifying companies under the Policy Statement.
There are no significant alternatives to the Final Rule that have
less economic impact on small banking organizations, and the Final Rule
significantly reduces burden on nearly all small banking organizations.
B. Paperwork Reduction Act
At this time, the Board is not adopting as final the changes to
reporting requirements in the Proposed Rule. The comment period for the
proposed changes to the reporting requirements in the Proposed Rule
runs through April 6, 2015. Once the comment period for the proposed
reporting requirements closes, the Board will consider any and all
reporting and Paperwork Reduction Act-related comments before
finalizing any reporting changes.
C. Plain Language
Section 722 of the Gramm-Leach-Bliley Act (Pub. L. 106-102, 113
Stat. 1338, 1471, 12 U.S.C. 4809) requires the Federal banking agencies
to use ``plain language'' in all proposed and final rules published
after January 1, 2000. In light of this requirement, the Board has
sought to present the Final Rule in a simple and straightforward
manner. The Board sought to present the Proposed Rule in a simple and
straightforward manner and solicited comment on how to make the
Proposed Rule easier to understand. No comments were received on the
use of plain language.
List of Subjects
12 CFR Part 217
Administrative practice and procedure, Banks, banking, Capital,
Federal Reserve System, Holding
[[Page 20157]]
companies, Reporting and recordkeeping requirements, Securities.
12 CFR Part 225
Administrative practice and procedure, Banks, banking, Federal
Reserve System, Holding companies, Reporting and recordkeeping
requirements.
12 CFR Part 238
Administrative practice and procedure, Banks, banking, Federal
Reserve System, Holding companies, Reporting and recordkeeping
requirements.
Federal Reserve System
12 CFR CHAPTER II
Authority and Issuance
For the reasons set forth in the preamble, chapter II of title 12
of the Code of Federal Regulations is amended as set forth below:
PART 217--CAPITAL ADEQUACY OF BANK HOLDING COMPANIES, SAVINGS AND
LOAN HOLDING COMPANIES, AND STATE MEMBER BANKS (REGULATION Q)
0
1. The authority citation for part 217 continues to read as follows:
Authority: 12 U.S.C. 248(a), 321-338a, 481-486, 1462a, 1467a,
1818, 1828, 1831n, 1831o, 1831p-l, 1831w, 1835, 1844(b), 1851, 3904,
3906-3909, 4808, 5365, 5368, 5371.
0
2. In Sec. 217.1, revise paragraph (c)(1)(iii) to read as follows:
Sec. 217.1 Purpose, applicability, reservations of authority, and
timing.
* * * * *
(c) * * *
(1) * * *
(iii) A covered savings and loan holding company domiciled in the
United States, other than a savings and loan holding company that has
total consolidated assets of less than $1 billion and meets the
requirements of 12 CFR part 225, appendix C, as if the savings and loan
holding company were a bank holding company and the savings association
were a bank. For purposes of compliance with the capital adequacy
requirements and calculations in this part, savings and loan holding
companies that do not file the FR Y-9C should follow the instructions
to the FR Y-9C.
* * * * *
PART 225--BANK HOLDING COMPANIES AND CHANGE IN BANK CONTROL
(REGULATION Y)
0
3. The authority citation for part 225 continues to read as follows:
Authority: 12 U.S.C. 1817(j)(13), 1818, 1828(o), 1831i, 1831p-1,
1843(c)(8), 1844(b), 1972(1), 3106, 3108, 3310, 3331-3351, 3906,
3907, and 3909; 15 U.S.C. 1681s, 1681w, 6801 and 6805.
0
4. In Sec. 225.2, paragraph (r), revise footnote 2 to read as follows:
Sec. 225.2 Definitions.
* * * * *
(r) * * *
Footnote 2: For purposes of this subpart and subparts B and C of
this part, a bank holding company with consolidated assets of less
than $1 billion that is subject to the Small Bank Holding Company
Policy Statement in appendix C of this part will be deemed to be
``well-capitalized'' if the bank holding company meets the
requirements for expedited/waived processing in appendix C.
0
5. In Sec. 225.4, revise paragraph (b)(2)(iii) to read as follows:
Sec. 225.4 Corporate practices.
* * * * *
(b) * * *
(2) * * *
(iii)(A) If the bank holding company has consolidated assets of $1
billion or more, consolidated pro forma risk-based capital and leverage
ratio calculations for the bank holding company as of the most recent
quarter, and, if the redemption is to be debt funded, a parent-only pro
forma balance sheet as of the most recent quarter; or
(B) If the bank holding company has consolidated assets of less
than $1 billion, a pro forma parent-only balance sheet as of the most
recent quarter, and, if the redemption is to be debt funded, one-year
income statement and cash flow projections.
* * * * *
0
6. In Sec. 225.14, revise paragraph (a)(1)(v) to read as follows:
Sec. 225.14 Expedited action for certain bank acquisitions by well-
run bank holding companies.
* * * * *
(a) * * *
(1) * * *
(v)(A) If the bank holding company has consolidated assets of $1
billion or more, an abbreviated consolidated pro forma balance sheet as
of the most recent quarter showing credit and debit adjustments that
reflect the proposed transaction, consolidated pro forma risk-based
capital ratios for the acquiring bank holding company as of the most
recent quarter, and a description of the purchase price and the terms
and sources of funding for the transaction;
(B) If the bank holding company has consolidated assets of less
than $1 billion, a pro forma parent-only balance sheet as of the most
recent quarter showing credit and debit adjustments that reflect the
proposed transaction, and a description of the purchase price, the
terms and sources of funding for the transaction, and the sources and
schedule for retiring any debt incurred in the transaction;
* * * * *
0
7. In Sec. 225.17, in paragraph (a)(6), revise footnote 6 to read as
follows:
Sec. 225.17 Notice procedure for one-bank holding company formations.
* * * * *
(a) * * *
(6) * * *
Footnote 6--For a banking organization with consolidated assets, on
a pro forma basis, of less than $1 billion (other than a banking
organization that will control a de novo bank), this requirement is
satisfied if the proposal complies with the Board's Small Bank
Holding Company Policy Statement (appendix C of this part).
0
8. In Sec. 225.23, revise paragraph (a)(1)(iii) to read as follows:
Sec. 225.23 Expedited action for certain nonbanking proposals by
well-run bank holding companies.
* * * * *
(a) * * *
(1) * * *
(iii) If the proposal involves an acquisition of a going concern:
(A) If the bank holding company has consolidated assets of $1
billion or more, an abbreviated consolidated pro forma balance sheet
for the acquiring bank holding company as of the most recent quarter
showing credit and debit adjustments that reflect the proposed
transaction, consolidated pro forma risk-based capital ratios for the
acquiring bank holding company as of the most recent quarter, a
description of the purchase price and the terms and sources of funding
for the transaction, and the total revenue and net income of the
company to be acquired;
(B) If the bank holding company has consolidated assets of less
than $1 billion, a pro forma parent-only balance sheet as of the most
recent quarter showing credit and debit adjustments that reflect the
proposed transaction, a description of the purchase price and the terms
and sources of funding for the transaction and the sources and schedule
for retiring any debt incurred in the transaction, and the total
assets, off-balance sheet items, revenue and net income of the company
to be acquired;
(C) For each insured depository institution whose Tier 1 capital,
total capital, total assets or risk-weighted assets change as a result
of the transaction, the total risk-weighted
[[Page 20158]]
assets, total assets, Tier 1 capital and total capital of the
institution on a pro forma basis;
* * * * *
0
9. In appendix C to part 225, revise the heading and, under section 1,
revise the first undesignated paragraph to read as follows:
Appendix C to Part 225--Small Bank Holding Company and Savings and Loan
Holding Company Policy Statement
* * * * *
1. Applicability of Policy Statement
This policy statement applies only to bank holding companies
with pro forma consolidated assets of less than $1 billion that (i)
are not engaged in significant nonbanking activities either directly
or through a nonbank subsidiary; (ii) do not conduct significant
off-balance sheet activities (including securitization and asset
management or administration) either directly or through a nonbank
subsidiary; and (iii) do not have a material amount of debt or
equity securities outstanding (other than trust preferred
securities) that are registered with the Securities and Exchange
Commission. The Board may in its discretion exclude any bank holding
company, regardless of asset size, from the policy statement if such
action is warranted for supervisory purposes.\1\ With the exception
of section 4 (Additional Application Requirements for Expedited/
Waived Processing), the policy statement applies to savings and loan
holding companies as if they were bank holding companies.
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\1\ Footnote 1: [Reserved]
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* * * * *
PART 238--SAVINGS AND LOAN HOLDING COMPANIES (REGULATION LL)
0
10. The authority citation for part 238 continues to read as follows:
Authority: 5 U.S.C. 552, 559; 12 U.S.C. 1462, 1462a, 1463, 1464,
1467, 1467a, 1468, 1813, 1817, 1829e, 1831i, 1972; 15 U.S.C. 78l.
0
11. Add Sec. 238.9 to subpart A to read as follows:
Sec. 238.9 Small Bank Holding Company Policy Statement.
(a) The Board's Small Bank Holding Company Policy Statement (12 CFR
part 225, appendix C) (Policy Statement) applies to savings and loan
holding companies as if they were bank holding companies. To qualify or
rely on the Policy Statement, savings and loan holding companies must
meet all qualifying requirements in the Policy Statement as if they
were a bank holding company. For purposes of applying the Policy
Statement, the term ``nonbank subsidiary'' as used in the Policy
Statement refers to a subsidiary of a savings and loan holding company
other than a savings association or a subsidiary of a savings
association.
(b) The Board may exclude any savings and loan holding company,
regardless of asset size, from the Policy Statement under paragraph (a)
of this section if the Board determines that such action is warranted
for supervisory purposes.
By order of the Board of Governors of the Federal Reserve
System, April 9, 2015.
Margaret McCloskey Shanks,
Deputy Secretary of the Board.
[FR Doc. 2015-08513 Filed 4-14-15; 8:45 am]
BILLING CODE 6210-01-P