Consolidated Bank Holding Company Report of Equity Investments in Nonfinancial Companies

Board of Governors of the Federal Reserve System

Instructions for Preparation of

Consolidated Bank Holding Company Report of
Equity Investments in Nonfinancial Companies
Reporting Form FR Y-12
Effective March 31, 2010

General Instructions

General Instructions for Preparation of Consolidated Bank Holding
Company Report of Equity Investments in Nonfinancial Companies
FR Y-12
Purpose of Report
The information collected on the FR Y-12 allows the Federal Reserve to monitor the growth of domestic
bank holding company (BHC) investments in nonfinancial companies and their contributions to capital,
profitability, risk, and volatility. The FR Y-12 provides more timely information than can be obtained
through periodic supervisory reviews of this business line and serves to identify institutions that are
significantly changing their risk profiles in this business line or devoting significant resources to this line
of business.

GENERAL INSTRUCTIONS
Scope of the Information
Consolidation rules for the FR Y-12 are the same as the FR Y 9C/SP. That is, for a BHC meeting the
reporting criteria described below, the BHC should consolidate its subsidiaries on the same basis as it
does for its annual reports to the Securities and Exchange Commission (SEC) or, for those BHCs that do
not file reports with the SEC, on the same basis as described in generally accepted accounting principles
(GAAP). Generally, under the rules for consolidation established by the SEC and by GAAP, BHCs should
consolidate any company in which it owns more than 50 percent of the outstanding voting stock. The
report should include all nonfinancial equity investments, regardless of where they are reflected on the
balance sheet. BHCs should exclude only those equity securities held in a trading account that are shortterm in nature (namely, those that are managed or purchased with the intent to sell in relation to shortterm movement in the price of the investment). In a multi-tiered organization with one or more BHCs,
only the top-tier BHC should complete the FR Y-12, which would be prepared on a consolidated basis.
However, if a lower-tier BHC is functioning as the consolidated top-tier reporter for other financial
reports (for example, when the top-tier is a non-U.S. BHC, ESOP, or limited partnership), this lower-tier
BHC should file the FR Y-12 on a consolidated basis.
Who Must Report
The FR Y-12 reporting form must be filed by each top-tier domestic BHC that files an FR Y-9C and has
aggregate nonfinancial equity investments (as defined below) that equal or exceed the lesser of $100
million (on an acquisition cost basis), or 10 percent of the BHC’s consolidated Tier 1 capital as of the
report date.
The FR Y-12 reporting form also must be filed by each top-tier domestic BHC that files an FR Y-9SP and
has aggregate nonfinancial equity investments (as defined below) that equal or exceed 10 percent of the
BHC’s total capital (as reported in item 16(f) of the balance sheet on the FR Y-9SP) as of the report date.
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General Instructions

A domestic BHC is a BHC that is incorporated in one of the 50 States of the United States, the District of
Columbia, Puerto Rico, or any U.S. territory or possession.
What is a Nonfinancial Equity Investment?
This report collects information on nonfinancial equity investments held by a BHC on a consolidated
basis. For the purposes of this report, a nonfinancial equity investment means an equity investment
made by the BHC or any of its subsidiaries (see the Scope of the Information section above):
• pursuant to the merchant banking authority of section 4(k)(4)(H) of the BHC Act (12 U.S.C. 1843
(k)(4)(H)) and subpart J of the Board’s Regulation Y,
• under section 4(c)(6) or 4(c)(7) of the BHC Act (12 U.S.C. 1843(c)(6) and (c)(7)) in a nonfinancial
company (as defined in the glossary) or in a company that makes investments in nonfinancial
companies, including mutual funds that hold equity investments.
• investments made through a Small Business Investment Company (SBIC) that is consolidated with the
BHC or subsidiary, or in an SBIC that is not consolidated, under section 302(b) of the Small Business
Investment Act of 1958,
• in a nonfinancial company under the portfolio investment provisions of the Board’s Regulation K (12
CFR 211.8(c)(3), or
• in a nonfinancial company under section 24 of the Federal Deposit Insurance Act (12 U.S.C. 1831a).
This report does not collect information on equity investments that a BHC or any of its subsidiaries may
make under other legal authorities. For example, this report does not collect information on
nonfinancial investments made by an insurance company subsidiary of a financial holding company
(FHC) under section 4(k)(4)(I) of the BHC Act (12 U.S.C. 1843(k)(4)(I)). Also, this report does not collect
information on DPC investments.
Filing of Reports
The report is to be prepared quarterly for BHCs that file the FR Y-9C, as of the end of March, June,
September, and December, and semi-annually for those BHCs that file the FR Y-9SP, as of the end of
June and December. The report must be submitted within 45 calendar days of the reporting date.
Reporting BHCs should submit an original and one copy of the report to the appropriate Federal Reserve
Bank. Each report submitted should be signed and certified by an executive officer of the BHC.
‘‘Executive Officer’’ is defined in 12 CFR 215.2(d).
Alternative Report Forms
In lieu of using the printed FR Y-12 report form, the respondent may report the required data on
computer print-outs that are in the identical format and size as the printed form, including line items
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General Instructions
and columns in the order in which they appear on the printed form. The form must be signed by an
executive officer of the reporting institution.
Electronic submission of report form -Any holding company interested in submitting the FR Y-12
electronically should contact the appropriate Federal Reserve Bank. Holding companies choosing to
submit these reports electronically must maintain in their files a manually signed and attested printout
of the data submitted. Holding companies should use the cover page of the report form to fulfill the
signature requirement and attach it to the data printout or declaration page.
Reporting in Dollars
All dollar amounts should be converted to U.S. dollars using the spot exchange rate on the report date,
regardless of the currencies in which the transactions reported are denominated. The translations
should be made on the same basis as used by the reporter to prepare its FR Y-9C and FR Y-9SP. If the
BHC has no activity to report, enter a zero where appropriate.
Rounding
Round all dollar amounts reported on this form to the nearest million dollars.
Negative Entries
Paper filers should report negative amounts in parentheses or with a minus (-) sign and electronic filers
should report negative amounts with a minus (-) sign.
Confidentiality
The completed version of this report generally is available to the public upon request on an individual
basis. However, a reporting BHC may request confidential treatment for certain portions of the FR Y-12
if the BHC is of the opinion that disclosure of specific commercial or financial information in the report
would likely result in substantial harm to its competitive position, or that disclosure of the submitted
information would result in an unwarranted invasion of personal privacy.
A request for confidential treatment must be submitted in writing concurrently with the submission of
the report. The request must discuss in writing the justification for which confidentiality is requested
and must demonstrate the specific nature of the harm that would result from public release of the
information. Merely stating that competitive harm would result or that information is personal is not
sufficient. The Federal Reserve System may subsequently release information for which confidential
treatment is requested, if the Board of Governors determines that the disclosure of such information is
in the public interest.

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General Instructions

LINE ITEM INSTRUCTIONS FOR

Preparation of Consolidated Bank Holding
Company Report of Equity Investments in
Nonfinancial Companies
FR Y-12
Column Instructions
Column A: Acquisition Cost (Schedules A, B, and C)
Report in column A the aggregate acquisition cost of the nonfinancial equity investments of the BHC. For
purposes of this report, acquisition cost represents the amount paid by the BHC for the nonfinancial
equity investment when it was acquired. This value should only be adjusted to reflect permanent writedowns taken, as well as any partial returns of capital received.
Column B: Net Unrealized Holding Gains Not Recognized as Income (Schedules A and C)
Report in column B the net unrealized holding gains, net of applicable taxes; on all nonfinancial equity
investments that are reported in accumulated other comprehensive income on the FR Y-9C or FR Y-9SP.
For example, for nonfinancial equity investments treated as available-for-sale securities under FAS 115,
report the unrealized gains reported in other comprehensive income. When calculating unrealized
holding gains on nonfinancial equity investments, the amount should be reduced by any unrealized
holding losses. If unrealized holding losses exceed unrealized gains (i.e. net unrealized holding losses),
record the net loss in parentheses rather than with a minus (-) sign.
Column C: Carrying Value (Schedules A, B (Col. B), and C)
Report in column C (and schedule B, column B) the carrying value of all nonfinancial equity investments
as of the end of the reporting period. For the purposes of this report, carrying value refers to the
amount of the investment as reflected in the BHC’s consolidated financial statements prepared in
accordance with GAAP.
For example:
• Equity securities accounted for under FAS 115 as available-for-sale are accounted for under FAS 115 at
fair value on the balance sheet. Therefore the fair values would be considered the carrying value of
these securities.

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• For nonfinancial equity investments that are accounted for under the equity method of accounting,
the carrying value is the acquisition cost adjusted for pro-rata share of earnings/losses and decreased by
cash dividends or similar distributions.
• For nonfinancial equity investments that do not have readily determinable fair values, carrying value
should be reported at historical cost.
(Schedule A only)
Column D: Publicly Quoted Value
Report in column D the publicly quoted market value of all publicly traded nonfinancial equity
investments as of the end of the reporting period (e.g., the number of shares held times the closing
market price per share on the last business day of the reporting period). For purposes of this report, a
public company is a company that has one or more issues of publicly traded stock. If no quoted market
price is available, enter zero.
(Schedule D only)
Column A, Column C, and Column E: Acquisition Cost
Report in column A the aggregate acquisition cost of all direct public investments subject to the listed
transactions during the reporting period. Report in column C the aggregate acquisition cost of all direct
nonpublic investments subject to the listed transactions during the reporting period. For purposes of
this report, acquisition cost represents the amount paid by the BHC for the nonfinancial equity
investment when it was acquired, adjusted for any permanent write-downs taken in prior reporting
periods, or any partial returns of capital received in prior reporting periods. Report in column E the
aggregate acquisition cost of all indirect (fund) investments subject to the listed transactions during the
reporting period.
Column B, Column D, and Column F: Carrying Value
Report in column B the carrying value of all direct public investments subject to the listed transactions
during the reporting period. Report in column D the carrying value of all direct nonpublic investments
subject to the listed transactions during the reporting period. For the purposes of this report, carrying
value refers to the amount of the investment as reflected in the BHC’s consolidated financial statements
prepared in accordance with GAAP. For example, available-for-sale equity securities generally are
accounted for under FAS 115 at fair value on the balance sheet. Therefore fair value would be
considered the carrying value of these securities. Report in column F the carrying value of all indirect
(fund) investments subject to the listed transactions during the reporting period.

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General Instructions

Instructions for Specific Lines of Schedule A: Type of Investments
Line item 1

Direct investments in public entities

For purposes of this report, a public entity is an entity that has one or more issues of publicly traded
stock. Report in column A the acquisition cost of the BHC’s nonfinancial equity investment in public
entities. Report in column B net unrealized holding gains not recognized as income. Report in column C
the carrying value of the BHC’s investments in public entities. Report in column D the publicly quoted
value of the BHC’s investments in public entities.
Line item 2

Direct investments in nonpublic entities

For purposes of this report, a nonpublic entity is one that does not have any issue of publicly traded
stock. Report in column A the acquisition cost of these investments. Report in column B net unrealized
holding gains not recognized as income. Report in column C the carrying value of these investments.
Line item 3

All indirect investments

Report in column A the acquisition cost of the BHC’s nonfinancial equity investments in these funds or
other entities. See the glossary for a definition of indirect investments. Report in column B net
unrealized holding gains not recognized as income. Report in column C the carrying value of these
investments. For purposes of this report, the total amount of the equity investment in the fund is
reportable even if only a portion of the fund investments is made in nonfinancial companies.
Line item 4

Total portfolio

Report in columns A through C the totals of items 1, 2, and 3 for Schedule A.

Memoranda
Line item M1

Total portfolio

Check the box that represents the total number of companies in which the BHC has nonfinancial equity
investments. For indirect investments, count the number of investment funds or similar entities in which
the BHC has an indirect investment.
Line item M2

Investments held under merchant banking authority (FHCs only)

This item only applies to FHCs. Report in column A the acquisition cost of investments held by the FHC
(on a consolidated basis) under the merchant banking authority of the Gramm-Leach-Bliley Act (GLBA)
(12 U.S.C. 1843(k)(4)(H)) and Federal Reserve regulation. Report in column B net unrealized holding
gains of these investments not recognized as income. Report in column C the carrying value as defined
above. The carrying value should be reported using the same valuation method used in preparing the FR
Y-9C or FR Y-9SP.

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General Instructions
Line item M3

Pre-tax impact on net income from items 1, 2, and 3 above (FR Y-9C filers only)

For direct or indirect investments reported in items 1, 2, and 3 above, report the impact that these
investments had on the BHC’s consolidated net income (loss). The information reported for this line
item should reflect the pre-tax year-to-date net gain (loss) that the nonfinancial equity investments
reported on lines 1, 2, and 3 of the form had on the filer’s net income (loss) reported in Schedule HI,
item 8 of the FR Y-9C. Filers should not include overhead or other expense related items when
calculating the net gain (loss) produced by the nonfinancial equity investments captured on the form.
This item should not be reported by BHCs that file the FR Y-9SP report. If the impact on net income is a
loss, report in parentheses. Include the net gain (loss) of all nonfinancial equity investments not held in
the trading account, regardless of where such investments are reflected in the financial statements of
the reporting BHC.
Line item M4

Investments managed for others

This item applies to all BHCs that manage nonfinancial equity investments for others by serving as a
general partner in a limited partnership or performing a similar function in a private equity fund. These
investments are not owned by the BHC and are not consolidated in the BHC’s financial statements.
Exclude investments managed through a bank trust department in a fiduciary capacity. While this is an
off-balance sheet item, report the carrying value of all investments managed for others, as established
by the general partner (in the case of a fund) or as established by the BHC in its investment
management capacity. If the BHC does not manage nonfinancial equity investments for others,
proceed to Schedule B.
Line item M5
filers only)

Pre-tax impact on net income for management fees from item M4 above (FR Y-9C

Report the impact on the BHC's consolidated net income (loss) from management fees generated from
investments managed for others reported in item M4. The information reported for this line item should
reflect the pre-tax year-to-date net gain (loss) that the management fees for the investments reported
on line M4 of the form had on the filer’s net income (loss) reported in Schedule HI, item 8 of the FR Y9C. Filers should not include overhead or other expense related items when calculating the net gain
(loss) produced by the nonfinancial equity investments captured on the form. This item should not be
reported by BHCs that file the FR Y-9SP report. If the impact on net income is a loss, report the net loss
in parentheses or with a minus (-) sign (paper filers) or with a minus (-) sign (electronic filers).

Instructions for Specific Lines of Schedule B: Type of Security
Line item 1

Common stock

Report in column A the acquisition cost of the BHC’s nonfinancial equity investments that are in the
form of voting and non-voting common stock. Report in column B the carrying value of all such voting
and nonvoting common stock held by the BHC.

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General Instructions
Line item 2

Convertible debt and convertible preferred stock

Report in column A the acquisition cost of the BHC’s nonfinancial equity investments that are in the
form of convertible debt and convertible preferred stock. Report in column B the carrying value of such
convertible bonds and convertible preferred stock held by the BHC. This item would include mezzanine
debt that is convertible into equity.
Line item 3

Other equity instruments

Report in column A the acquisition cost of all of the BHC’s other nonfinancial equity investments not
specified in items 1 and 2. Report in column B the carrying value of these nonfinancial equity
investments. See the glossary definition of equity investment for what types of securities to include in
this item.
Line item 4

Total portfolio

Report the sum of items 1 through 3 for columns A and B. Item 4, columns A and C of Schedule A must
equal item 4, columns A and B of Schedule B, respectively.

Memoranda
Line item M1

Unused equity commitments

Report any unused portion of legally binding commitments to make a nonfinancial equity investment.
Line item M2

Warrants

Does the BHC hold any Warrants or similar instruments received in connection with equity investment
activity? (See the glossary definition) Enter ‘‘1’’ if yes, ‘‘0’’ if no.

Instructions for Specific Lines of Schedule C: Type of Entity Within the Banking
Organization
Line item 1 Depository institutions
Line item 1(a) SBICs
Report in columns A, B, and C, the acquisition cost, net unrealized holding gains not recognized as
income, and carrying value, respectively, of the nonfinancial equity investments held by all SBICs that
are consolidated in the financial statements of a subsidiary depository institution of the BHC. Also
include the acquisition cost and carrying value of any nonfinancial equity investment made by a
subsidiary depository institution in a SBIC that is not consolidated with the depository institution for
accounting purposes.

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General Instructions
Line item 1(b) Edge and agreement corporations
Report in columns A, B, and C, the acquisition cost, net unrealized holding gains not recognized as
income, and carrying value, respectively, of the direct and indirect nonfinancial equity investments of all
Edge or agreement corporations that are owned or controlled by subsidiary depository institutions of
the BHC. Edge corporations are formed under Section 25A of the Federal Reserve Act and agreement
corporations are formed under Section 25 of the Federal Reserve Act.
Line item 1(c) All other
Report in columns A, B, and C, the acquisition cost, net unrealized holding gains not recognized as
income, and carrying value, respectively, of the direct and indirect nonfinancial equity investments of
the subsidiary depository institutions of the BHC that are not reported in items 1(a) or 1(b). All other
nonfinancial equity investments owned or controlled directly or indirectly through a depository
institution should be reported on this line item.
Line item 2

Parent holding company and other nonbank subsidiaries

Line item 2(a) SBICs
Report in columns A, B, and C, the acquisition cost, net unrealized holding gains not recognized as
income, and carrying value, respectively, of the direct and indirect nonfinancial equity investments
(including nonfinancial equity investments held under Merchant Banking Authority) of all SBICs that are
consolidated with the BHC for accounting purposes and that are not owned or controlled by the BHC
through a depository institution. Also include any nonfinancial equity investment made directly or
indirectly by the BHC or a nondepository subsidiary in a SBIC that is not consolidated for accounting
purposes.
Line item 2(b) Edge and agreement corporations
Report in columns A, and B, and C, the acquisition cost, net unrealized holding gains not recognized as
income, and carrying value, respectively, of the direct and indirect nonfinancial equity investments of all
Edge or agreement corporations that are not owned or controlled by the BHC through a depository
institution. Edge corporations are formed under Section 25A of the Federal Reserve Act and agreement
corporations are formed under Section 25 of the Federal Reserve Act.
Line item 2(c) Broker-Dealers
Report in columns A, B, and C, the acquisition cost, net unrealized holding gains not recognized as
income, and carrying value, respectively, of the direct and indirect nonfinancial equity investments
(including nonfinancial equity investments held under Merchant Banking Authority) of subsidiaries of
the BHC that are registered with the SEC as a broker-dealer. Exclude any nonfinancial equity investment
held in a trading account in accordance with applicable accounting principles and as part of an
underwriting, market making or dealing activity. Also, exclude nonfinancial equity investments of
broker-dealers that are controlled by the BHC through a depository institution.
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Line item 2(d) Private Equity subsidiaries
Report in columns A, B, and C, the acquisition cost, net unrealized holding gains not recognized as
income, and carrying value, respectively, of the all direct and indirect nonfinancial equity investments
held in a nonbank subsidiary predominantly engaged in investing and managing nonfinancial equity
investments authorized under section 4(c)(6) or 4(c)(7) of the BHC Act, or under Merchant Banking
authority of GLBA (excluding investments held by SBICs, Edge or agreement corps, and Broker-Dealers
reported in 2(a), 2(b), and 2(c) above.
Line item 2(e) All other
Report in columns A, B, and C, the acquisition cost, net unrealized holding gains not recognized as
income, and carrying value, respectively, of all other direct and indirect nonfinancial equity investments
of the BHC and its nondepository institution subsidiaries that are not reported in items 2(a) through
2(d).
Line item 3

Total portfolio

Columns A, B, and C must equal the sum of items 1 and 2 of Schedule C, and item 4, columns A, B, and C
of Schedule A.

Memoranda
Line item M1

Domestic investments

Report in columns A, B, and C, the acquisition cost, net unrealized holding gains not recognized as
income, and carrying value, respectively, of the direct and indirect nonfinancial equity investments of
the consolidated BHC in companies domiciled in the 50 States of the United States, the District of
Columbia, Puerto Rico, and U.S. territories and possessions. The sum of memoranda items 1 and 2,
columns A, B, and C, should equal Schedule A, item 4, columns A, B, and C.
Line item M2

Foreign investments

Report in columns A, B, and C, the acquisition cost, net unrealized holding gains not recognized as
income, and carrying value, respectively, of the direct and indirect nonfinancial equity investments of
the consolidated BHC in companies domiciled outside the 50 States of the United States, the District of
Columbia, Puerto Rico, and U.S. territories and possessions. The sum of memorandum item 1 and
memorandum item 2, columns A, B, and C, should equal Schedule A, item 4, columns A, B, and C.

Instructions for Specific Lines of Schedule D: Nonfinancial Investment
Transactions During Reporting Period
Line item 1

Purchases

Report in columns A and B for direct public investments, columns C and D for direct nonpublic
investments, and columns E and F for indirect (fund) investments, the aggregate acquisition cost and
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carrying value, respectively, of all nonfinancial equity investment purchases made during the reporting
period. In most cases carrying value will equal acquisition cost. This item is reported as a net addition to
the portfolio.
Line item 2

Less: Return of Capital

Report in columns A and B for direct public investments, columns C and D for direct nonpublic
investments, and columns E and F for indirect (fund) investments, the aggregate acquisition cost and
carrying value of all investments that realized returns of capital (exclusive of realized gains/losses)
during the reporting period. This item is reported as a net reduction to the portfolio.
Line item 3

Net Valuation Changes

Report in column B for direct public investments, column D for direct nonpublic investments, and
column F for indirect (fund) investments, the aggregate net change to the portfolio carrying value since
the last reporting period. Changes should include adjustments to all nonfinancial equity investments
reflecting write-ups, write-downs, or write-offs during the reporting period. If the aggregate change is a
negative value, enclose the amount in parentheses or with a minus (-) sign (paper filers) or use a minus
(-) sign (electronic filers).
Line item 4

Other

Report in columns A and B for direct public investments, columns C and D for direct nonpublic
investments, and columns E and F for indirect (fund) investments, any other transactions affecting the
aggregate acquisition cost or carrying value of the portfolio during the reporting period. (e.g., writedowns for permanent impairment or investments acquired through mergers. BHCs have the option of
including permanent impairment write-downs to carrying value in net valuation changes in line item 3).
If a negative value, enclose the amount in parentheses or with a minus (-) sign (paper filers) or use a
minus (-) sign (electronic filers).
Line item 5

Total Transactions

Report the sum of items 1 through 4, for columns A, B, C, D, E, and F.

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Glossary
For the definition of Appropriate Federal Reserve Bank, BHC, BHC Act, Company, Control, Depository
Institution, Edge Corporation, FHC, and Foreign Investment, please refer to the glossary of the FR Y-10.
Acquisition Cost: For purposes of this report, acquisition cost refers to the aggregate acquisition cost of
nonfinancial equity investments currently held. This value should be adjusted to reflect permanent
write-downs as well as any partial returns of capital. Exclude adjustments for temporary impairment
write-downs, amortization of discounts or premiums (e.g., on convertible debt), and fair value
adjustments.
Carrying Value: For the purposes of this report, carrying value refers to the amount of the investment as
reflected in the BHC’s consolidated financial statements prepared in accordance with GAAP. Carrying
value includes adjustments for return of capital as well as impairment write-downs, amortization of
discounts or premiums (e.g., convertible debt), and fair value adjustments that are reflected on the
balance sheet.
Convertible Bonds and Convertible Preferred Stock: For the purposes of this report, bonds or preferred
stock that can be converted into or redeemed for a company’s common stock at a prearranged price are
considered convertible.
Direct Investment: For the purposes of this report, a direct investment is any nonfinancial equity
investment that the BHC or any of its consolidated subsidiaries holds directly in a nonfinancial entity.
Equity Investment: For purposes of this report, an equity investment refers to common stock,
partnership interests, convertible preferred stock, convertible debt, and warrants, options, and other
rights that give the holder the right to acquire common stock or instruments convertible into common
stock. An equity investment does not include any position or security held in a trading account on a
short-term basis, in accordance with applicable accounting principles, and as part of an underwriting,
market-making or dealing activity.
Indirect Investment: For the purposes of this report, an indirect investment is a nonfinancial equity
investment that the BHC or any of its consolidated subsidiaries has in an investment fund or similar
entity that is engaged in the business of making equity investments in nonfinancial companies. An
investment fund can be organized in any form, including as a partnership, corporation, or limited liability
company. An example of an indirect investment is an investment in a private equity fund that makes
merchant banking investments under section 4(k)(4)(H) of the BHC Act (12 U.S.C. 1843(k)(4)(H)).
Mezzanine Financing: Mezzanine generally refers to that subordinated layer of financing between a
company’s senior debt and equity. This type of financing combines the characteristics of debt and equity
funding, and, in many instances, is convertible into equity securities or comes with warrants attached.
Mezzanine debt is often used to finance acquisitions and buyouts, and is viewed as an attractive
investment because of its higher returns that are unavailable to senior lenders. However, in a liquidation
situation mezzanine lenders’ repayment status is only better than that of the equity holders.
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Nonfinancial Company: A nonfinancial company is a company that is engaged in any activity that has
not been determined to be financial in nature or incidental to a financial activity under section 4(k) of
the BHC Act (12 U.S.C. 1843(k)). Examples of activities that are considered nonfinancial in nature are:
Telecommunications, Health Care, Entertainment, Transportation, and Manufacturing.
Nonpublic Company: A nonpublic company has equity shares that are not traded on the open market.
This type of company is also called a private company, which is the opposite of a public company.
Public Company: A public company has issued securities through a “public offering” and are now traded
on the open market (i.e., NYSE, NASDAQ). This type of company is also called “publicly held” or publicly
traded, and the opposite of a private company.
Subsidiary: For purposes of this report, subsidiary means any company in which the BHC, directly or
indirectly, owns or controls more than 50 percent of the outstanding voting stock and which is
consolidated under GAAP in the parent holding company’s financial statements.
Warrant: A type of security, usually issued together with a subordinated debt instrument (Mezzanine
Debt), restructured debt, or a bond or preferred stock offer, that entitles the holder to buy (exercise) a
proportionate amount of common stock at a specified price, for a period of years or to perpetuity.

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