Reporting FR MM-10(o)-2

INSTRUCTIONS FOR PREPARATION OF

Application for Approval of a Stock
Issuance by a Subsidiary Holding
Company of a Mutual Holding
Company

Inquiries regarding the preparation and filing of applications should be directed to the
Reserve Bank responsible for supervising the applicant. For applicants not currently
supervised by a Reserve Bank, inquiries should be directed to the Reserve Bank of the
Federal Reserve district in which the company's banking operations would be
principally conducted, as measured by total domestic deposits in its subsidiary savings
association(s) on the date it will become a mutual holding company (the "appropriate
Reserve Bank").
Reserve staff as soon as possible for assistance in idenWho May Use This Form
tifying the specific type of information that should be
This form should be used for applications filed with the
provided in the application.
Federal Reserve System (the “Federal Reserve”) under
The applicant must submit the information required by
section 10(o) of Home Owners’ Loan Act of 1933, as
this form to the appropriate Reserve Bank. Applicants
amended (“HOLA”), 12 U.S.C. § 1467a(o); and
are strongly encouraged to submit their applications
12 CFR 239.24 and 239.25, that involve a stock issuelectronically through the Federal Reserve System’s
ance by a subsidiary holding company of a mutual
web-based application E-Apps.3 Additional informaholding company, including stock issuances associated
tion on E-Apps may be found on the Board’s public
with mutual holding company reorganizations.
website.4 Alternative formats to this form, if used,
must provide all requested information. In order to be
Applicability of Regulation LL and MM
considered properly filed in accordance with the
requirements of HOLA and Regulations LL and MM,
The Board’s Regulations LL and MM (12 CFR Parts
the application must be substantially complete and
238 and 239) apply to savings and loan holding comparesponsive to each item of information requested
nies in mutual form (each, a “mutual holding com(including an indication that the answer is “not applipany”). An applicant should consult these regulations,
cable” or “none” if such is the case).
copies of which are available on the Board’s public
The appropriate Reserve Bank will review the submitwebsite or from any one of the Reserve Banks of the
ted application to determine if it is substantially comFederal Reserve (“Reserve Bank”). Additional filing
plete. If the application is considered complete, an
information is also available on the Board’s public
acknowledgement letter will be sent indicating the date
website.1 An applicant may submit a pre-filing before
2
that the application has been formally accepted for
filing an application.
processing. If the application is not considered complete, the application will be returned to the applicant.
Preparation of the Application
As necessary to complete the record, a request for
additional information may be sent to the contact perInquiries regarding the preparation and filing of applison named in the application. Under certain circumcations should be directed to the Reserve Bank of the
stances, name check and financial information related
Federal Reserve district in which the company’s bankto individuals involved in a proposed transaction may
ing operations are principally conducted, as measured
be required. Such information for individuals must be
by total domestic deposits in its subsidiary savings
submitted on the Interagency Biographical and Finanassociation on the date it became, or will become,
cial Report (FR 2081c; OMB No. 7100-0134), and may
mutual holding company (the “appropriate Reserve
be submitted in advance of the application. Contact
Bank”). Applicants are encouraged to contact Federal
the appropriate Reserve Bank for further information.

(FR MM-10(o)-2)

DRAFT

1. See https://www.federalreserve.gov/apps/reportforms/
2. See SR letter 12-12 at
https://www.federalreserve.gov/supervisionreg/srletters/
sr1212.htm.

3. The application may alternatively be submitted in paper form.
4. See https://www.federalreserve.gov/supervisionreg/afi/
eapps_contacts.htm

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General Instructions
personnel and medical and similar files

If any information initially furnished in the application
changes significantly during processing of the application, these changes must be communicated promptly to
the appropriate Reserve Bank.

Confidentiality
Under the provisions of the Freedom of Information
Act (the “FOIA”—5 U.S.C. § 552), the application is a
public document and available to the public upon
request. Once submitted, an application becomes a
record of the Board and may be requested by any
member of the public. Board records generally must be
disclosed unless they are determined to fall, in whole or
in part, within the scope of one or more of the FOIA
exemptions from disclosure. See 5 U.S.C. § 552(b)(l)-(9).
The exempt categories include (but are not limited to)
“trade secrets and commercial or financial information
obtained from a person and privileged or confidential”
(exemption 4), and information that, if disclosed,
“would constitute a clearly unwarranted invasion of
personal privacy” (exemption 6). An applicant may
request confidential treatment for any information,
submitted in or in connection with the application, that
the applicant believes is exempt from disclosure under
the FOIA. For example, if the applicant is of the opinion that disclosure of commercial or financial information would likely result in substantial harm to its competitive position or that of its subsidiaries, or that
disclosure of information of a personal nature would
result in a clearly unwarranted invasion of personal
privacy, confidential treatment of such information
may be requested.
Any request for confidential treatment must be submitted in writing concurrently with the filing of the application (or subsequent related submissions), and must
discuss in detail the justification for confidential treatment. Such justification must be provided for each portion of the application (or related submissions) for
which confidential treatment is requested. Applicant’s
reasons for requesting confidentiality must specifically
describe the harm that would result from public release
of the information. A statement simply indicating that
the information would result in competitive harm or
that it is personal in nature is not sufficient. (A claim
that disclosure would violate the law or policy of a foreign country is not, in and of itself, sufficient to exempt
information from disclosure. The applicant must demonstrate that disclosure would fall within the scope of

information is nonpublic commercial or financial
information, which is both customarily and actually
treated as private,

one or more of the FOIA exemptions from disclosure.)
The applicant must follow the steps outlined immediately below, and certify in the application (or related
submissions) that these steps have been followed.
Information for which confidential treatment is
requested should be: (1) specifically identified in the
public portion of the application (by reference to the
confidential section); (2) separately bound; and
(3) labeled “CONFIDENTIAL.”
With respect to applications that include information
regarding an individual or individuals associated with
the proposed transaction, the Board expects the applicant to certify that it has obtained the consent of the
individual(s) to public release of such information
prior to its submission to the Board or, in the absence
of such consent, to submit (or ensure that the individual(s) submit(s)) a timely request for confidential treatment of the information in accordance with these
instructions. Information submitted directly by an
individual or individuals will become part of the relevant application record, and, accordingly, will be a
Board record subject to being requested by any member of the public under FOIA.
The Federal Reserve will determine whether information submitted as confidential will be so treated and
will advise the applicant of any decision to make available to the public information labeled “CONFIDENTIAL.” However, it shall be understood that, without
prior notice to the applicant, the Board may disclose or
comment on any of the contents of the application in
an Order or Statement issued by the Board in connection with its decision on the application. The Board’s
staff normally will notify the applicant in the course of
the review process that such information may need to
be disclosed in connection with the Board’s action on
the application.
For further information on the procedures for requesting confidential treatment and the Board’s procedures
for addressing such requests, consult the Board’s Rules
Regarding Availability of Information, 12 CFR
Part 261, including 12 CFR 261.15, which governs
requests for confidential treatment.

DRAFT

261.17

Supporting Information
The Federal Reserve specifically reserves the right to
require the filing of additional statements and information. The questions in the application are not

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General Instructions

Add: Where the subsidiary or target savings associations have elected to
utilize the Community Bank Leverage Ratio framework, applicants are not
required to identify risk-weighted assets or provide risk-weighted capital
ratios where requested.

intended to limit an applicant’s presentation. An applicant bears the full burden for presenting and documenting a case that meets the statutory criteria for
approval. Supporting information may accompany the
application, even if this information is not required
under the applicable law, rule, or reporting form.

Compliance
The applicant is expected to comply with all commitments made in connection with the application, and
the Board may condition approval of the application
on the applicant’s compliance with any commitments.
The applicant should immediately contact the appropriate Reserve Bank if there is any change in compliance with such commitments or any change with
respect to the representations made in the application.

tributed to a charitable organization that complies with 12 CFR 239.64(b) to 239.64(f).

(6) Confirm that the stock issuance plan, pursuant
to 12 CFR 239.2(w) (Stock Issuance Plan), complies with 12 CFR 239.24, 239.25, and 239.59. If
applicable, describe in detail any proposed
deviations from the regulations and why such
deviation is appropriate under the
circumstances.

Financial Information; Expenses
(7) For an organization that would not be subject to
consolidated capital standards following consummation of the proposed stock issuance,5 provide a
parent company balance sheet as of the end of
the most recent quarter, showing separately each
principal group of assets, liabilities, and capital
accounts; debit and credit adjustments (explained
by detailed footnotes) reflecting the proposed
stock issuance; and the resulting pro forma balance sheet(s).

DRAFT

Requested Information

Sequence, Timing, and Structure of the
Proposed Stock Issuance

(1) Provide the expected chronological order of
events related to the proposed stock issuance
beginning with the filing of this application
through completion of the stock issuance.

(2) Indicate whether the mutual holding company
has held a meeting of its members to vote on the
proposed stock issuance and, if so, the date of
the vote and the results, including (i) the total
votes eligible to be cast, (ii) the total votes represented in person or by proxy, (iii) the total votes
cast in favor of and against each matter, and
(iv) the percentage of votes necessary to approve
each matter. If the meeting of members has not
taken place, indicate the date on which the meeting is scheduled and, when available, provide the
results of the vote. In addition, provide the opinions of counsel as required by 12 CFR 239.56(d).
(3) Provide a list of all regulatory approvals and filings required for the proposed stock issuance,
and the expected timing of required approvals
by other regulatory authorities.
(4) Discuss how the Applicant proposes to deploy
the proceeds of the stock issuance.
(5) Discuss whether a reasonable amount of shares
or proceeds of the stock issuance will be con-

(8) For an organization that would be subject to consolidated capital standards following consummation of the proposed stock issuance, provide parent company and consolidated balance sheets as
of the end of the most recent quarter, showing
separately each principal group of assets, liabilities, and capital accounts; debit and credit adjustments (explained by detailed footnotes) reflecting
the proposed stock issuance; and the resulting pro
forma balance sheets; and The financial information provided in items 7 and 8 above must be prepared in accordance with generally accepted
accounting principles (“GAAP”) and be in sufficient detail to reflect any:6

5. This type of organization includes, for example, a company that
on a pro forma basis would be subject to the Board’s Small Bank Holding Company and Savings and Loan Holding Company Policy Statement. See 12 CFR 238.9; 12 CFR 225, Appendix C.
6. Pursuant to 12 USC § 5371(c)(3)(A), mutual insurance companies
that are persons regulated by a state insurance regulator that engage in
the business of insurance and that file financial statements with a State
insurance regulator or the National Association of Insurance Commissioners utilizing only Statutory Accounting Principles in accordance
with State law, shall not be required by the Board to prepare such financial statements in accordance with Generally Accepted Accounting
Principles.

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General Instructions

• Common equity and preferred stock;
• Other qualifying capital;
• Long- and short-term debt;
• Goodwill and all other types of intangible
assets; and
• Material changes between the date of the balance sheet and the date of the application
(explained by footnotes).
(9) For an organization that would be subject to consolidated capital requirements under the Board’s
Regulation Q (12 CFR Part 217) following consummation of the proposed stock issuance, provide a breakdown of the organization’s pro forma
risk-weighted assets as of the end of the most
recent quarter, showing each principal group of
on- and off-balance sheet assets and the relevant
risk-weight. Also, identify the pro forma components of common equity tier 1, additional tier 1,
and tier 2 (if any) capital pursuant to the capital
adequacy regulations as of the end of the most
recent quarter, and provide calculations of the
mutual holding company’s pro forma common
equity tier 1 capital, tier 1 capital, total capital,
and leverage ratios pursuant to the capital
adequacy regulations. If applicable, also provide
the organization’s pro forma supplementary
leverage ratio pursuant to the capital adequacy
regulations.

Provide the Stock Issuance Plan adopted by the board
of directors of the Applicant’s subsidiary depository
institution. The plan must contain all of the information specified in 12 CFR 239.25.
Exhibit 2: Business Plan(s)
Provide a copy or copies of the business plan(s) for the
mutual holding company and Applicant (submitted as
a separately bound, confidential exhibit) consistent
with the requirements of 12 CFR 239.53(b), if any
changes to the business plan(s) would result from the
proposed stock issuance.
Exhibit 3. Resolution(s) of Board of Directors
Provide a certified copy or copies of your board of
directors’ resolution or resolutions relating to the proposed stock issuance, as set out in 12 CFR Part 239,
including: (1) adopting the Stock Issuance Plan; and
(2) authorizing this application.

DRAFT

(10) Provide detailed listing of the expenses associated
with the proposed stock issuance, including (but
not limited to) legal fees, escrow fees, underwriting fees, valuation (appraisal) fees, transfer agent
fees, auditing and accounting expenses.

Convenience and Needs
(11) Discuss how the proposed stock issuance will
affect the convenience and needs of the communities served by the Applicant. See 12 CFR
239.55(g)(3).

Exhibits
Provide the following exhibits as attachments to this form.
Exhibit 1: Stock Issuance Plan

Exhibit 4. Charters and Bylaws

Provide copies of the Applicant’s charter and bylaws
reflecting any proposed amendments regarding the
authority to issue stock, as referenced in 12 CFR
239.24(b)(2).
Exhibit 5. Appraisal Materials

Provide a copy of the appraisal materials related to the
proposed stock issuance, consistent with the requirements of 12 CFR 239.55(g)(2).
Exhibit 6. Proxy Soliciting Materials
Furnish copies of all proxy soliciting materials, including proxy statements and forms of proxy proposed to
be circulated to members of the mutual holding company, and a legal opinion indicating that any marketing
materials comply with all applicable securities laws.
Proxy statements and forms of proxy must contain the
information specified in 12 CFR 239.57.
Documents that are furnished in proposed form, pursuant to the foregoing, must be furnished in final form
immediately after the meeting(s) of members to vote
on the proposed stock issuance.
Exhibit 7. Offering Circular
Provide a copy of the Offering Circular for the proposed stock issuance pursuant to 12 CFR 239.58(a).

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Exhibit 8. Opinion of Counsel
Furnish a legal opinion of counsel for the Applicant
that addresses, at a minimum:

(1) The legal sufficiency of the proposed forms of
stock certificate and order forms for the stock to
be issued by the Applicant;
(2) The state law requirements applicable to the
Stock Issuance Plan, including citations to
applicable state law and a statement regarding
whether such requirements will be fulfilled by
the Stock Issuance Plan; and
(3) Whether the Stock Issuance Plan is consistent
with the terms of the Applicant’s charter,
including terms governing the type and amount
of stock that may be issued.

(2) Any trustee agreements or indentures, or other
agreements or documents defining or affecting
the rights of persons acquiring stock in the proposed issuance.
(3) Any employee stock benefit plan and form of
employee stock benefit plan agreement for any
tax-qualified or non-tax-qualified employee
stock benefit plan of the association that will
purchase any of the stock to be issued.
(4) Any actual or proposed valuation (appraisal)
agreement, underwriting contracts, or agreements among underwriters.
(5) Any required undertaking or affidavits by officers or directors purchasing shares in the issuance stating that they are acting independently.

DRAFT

Exhibit 9: Miscellaneous Documentation
Provide the following documents:

(1) Proposed forms of stock certificates, and similar
forms for any other securities to be issued, and
proposed order forms.

Documents that are furnished in proposed form, pursuant to the foregoing, must be furnished in final form
immediately after the meeting(s) of members to vote
on the proposed stock issuance.

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