Disclosure FR MM-AC

INSTRUCTIONS FOR PREPARATION OF

Application for Conversion of a
Mutual Holding Company to Stock
Inquiries regarding the preparation and filing of applications should
Form
be directed to the Reserve Bank responsible for supervising the
applicant. For applicants not currently supervised by a Reserve Bank,
(FR MM-Form AC) 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").

Who May Use This Form
This form should be used for applications filed with the
Federal Reserve System (the “Federal Reserve”) under
section 10(o) of Home Owners’ Loan Act of 1933, as
amended (“HOLA”), 12 U.S.C. § 1467a(o); and
12 CFR Subpart E, that involve mutual holding companies converting to stock form.

tifying the specific type of information that should be
provided in the application.
The applicant must submit the information required by
this form to the appropriate Reserve Bank. Applicants
are strongly encouraged to submit their applications
electronically through the Federal Reserve System’s
web-based application E-Apps.3 Additional information on E-Apps may be found on the Board’s public
website.4 Alternative formats to this form, if used,
must provide all requested information. In order to be
considered properly filed in accordance with the
requirements of HOLA and Regulations LL and MM,
the application must be substantially complete and
responsive to each item of information requested
(including an indication that the answer is “not applicable” or “none” if such is the case).

DRAFT

Applicability of Regulation LL and MM

The Board’s Regulations LL and MM (12 CFR
Parts 238 and 239) apply to savings and loan holding
companies in mutual form (each, a “mutual holding
company”). An applicant should consult these regulations, copies of which are available on the Board’s public website or from any one of the Reserve Banks of the
Federal Reserve (“Reserve Bank”). Additional filing
information is also available on the Board’s public
website.1 An applicant may submit a pre-filing before
filing an application.2

Preparation of the Application
Inquiries regarding the preparation and filing of applications should be directed to the Reserve Bank of the
Federal Reserve district in which the company’s banking operations are principally conducted, as measured
by total domestic deposits in its subsidiary savings
association on the date it became, or will become,
mutual holding company (the “appropriate Reserve
Bank”). Applicants are encouraged to contact Federal
Reserve staff as soon as possible for assistance in iden-

The appropriate Reserve Bank will review the submitted application to determine if it is substantially complete. If the application is considered complete, an
acknowledgement letter will be sent indicating the date
that the application has been formally accepted for
processing. If the application is not considered complete, the application will be returned to the applicant.
As necessary to complete the record, a request for
additional information may be sent to the contact person named in the application. Under certain circumstances, name check and financial information related
to individuals involved in a proposed transaction may
be required. Such information for individuals must be
submitted on the Interagency Biographical and Financial Report (FR 2081c; OMB No. 7100-0134), and may
be submitted in advance of the application. Contact
the appropriate Reserve Bank for further information.

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

of the largest subsidiary savings association, of an applicant
and of each savings association, shares of which are to be
directly or indirectly acquired, are located.

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.

stock offering. The Board considers a number of factors in deciding whether to approve the application,
including the record of performance of savings associations we own in helping to meet the convenience and
needs of the their communities.

Publication Requirement

You are invited to submit comments in writing on this
application to the Federal Reserve Bank of (appropriate Reserve Bank and address or email address of
Reserve Bank). The comment period will not end
before (date must be no less than 30 days from the date
of publication of the application) and may be somewhat
longer. The Board’s procedures for processing applications may be found at 12 CFR Part 262. Procedures for
processing protested applications may be found at
12 CFR 262.25. To obtain a copy of the Board’s procedures, or if you need more information about how to
submit your comments on the application, contact
(name of Reserve Bank contact and telephone number).
The Board will consider your comments and any
request for a public meeting or formal hearing on the
application if they are received in writing by the
Reserve Bank on or before the last day of the comment
period.
personnel and medical and similar files

The applicant must publish a notice in a newspaper of
general circulation in the community(ies) in which the
head offices of the applicant and its subsidiary savings
association. The newspaper notice should provide
opportunity for the public to submit written comments
on the proposal for at least 30 calendar days after the
date of publication, and must be published no more
than 15 calendar days before and no later than 7 calendar days after the date that the application is filed with
the appropriate Reserve Bank. The Board will publish
notice of the proposal in the Federal Register upon
receipt of the application. On written request by the
applicant, the notice in the Federal Register may be
published up to no more than 15 calendar days before
the application is filed.

DRAFT

The applicant should contact the appropriate Reserve
Bank or visit the Board’s public website for the recommended publication format. A copy of the newspaper
notice publication must be provided to the appropriate
Reserve Bank, as required by Section 262.3(b) of the
Board’s Rules of Procedure (12 CFR 262.3(b)).
The following is a sample notice:
Notice of Application for
(Mutual Holding Company to Convert
from Mutual to Stock Form)

(Name of mutual holding company and location of head
offıce), the parent company of (name of savings association and location of head office) [intends to apply/
has applied] to the Board of Governors of the Federal
Reserve System (Board) to (convert from mutual to
stock form). Pursuant to the Plan of Conversion,
which has been adopted by a vote of at least two-thirds
of the directors of (name of mutual holding company),
[provide brief description of the steps that would be
taken in the conversion. For example: (name of midtier holding company), which is currently in the mutual
holding company form, will reorganize to a fully public
stock holding company.] Simultaneously, (mutual
holding company) will sell its majority ownership in
(name of mid-tier holding company) in a “second-step”
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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

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

FR MM-Form AC

General Instructions

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
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.

TIAL.” 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

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 “CONFIDEN-

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
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 for 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.

Requested Information
Sequence, Timing, and Structure of the
Proposed Conversion
(1) Provide the expected chronological order of
events related to the proposed conversion beginning with the filing of this application through
consummation of the proposed conversion.
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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.
Indicate the proposed timing of all aspects of
the subscription offering, as defined in 12 CFR
239.52(n). If a selling agent will assist in the
community offering, or if an underwriter will
offer shares in the public offering, indicate the
proposed timing of all aspects of the community
offering and public offering.

(2) Indicate whether the mutual holding company
has held a meeting of its members to vote on the
plan of conversion 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).

a. For an Applicant that would not be subject to
consolidated capital standards following consummation of the proposed conversion,5 provide a pro
forma parent company balance sheet as of the end
of the most recent quarter, showing separately
each principal group of assets, liabilities, and capital accounts; and debit and credit adjustments
(explained by detailed footnotes) reflecting the
proposed conversion. The pro forma balance sheet
must reflect the adjustments required under business combination and fair value accounting
standards.
b. For an Applicant that would be subject to consolidated capital standards following consummation
of the proposed conversion, provide: parent
company-only 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 conversion; and the resulting pro
forma balance sheets.

DRAFT

(3) If the date for determining eligible account
holders, as defined in 12 CFR 239.52(c), in the
plan of conversion is more than one year before
the board of directors of the Applicant adopted
the plan of conversion, state why the earlier date
was selected

The financial information provided in response to
6(a) or 6(b) above must be prepared in accordance with
generally accepted accounting principles (“GAAP”),
and be in sufficient detail to reflect any:6
• Common equity and preferred stock;

(4) Provide a list of all regulatory approvals and filings required for the proposed conversion, and
the expected timing of required approvals by
other regulatory authorities.

• Other qualifying capital;

(5) Confirm that the proposed conversion complies
with the Board’s Regulation MM, 12 CFR
Part 239 or, if not, identify and describe in detail
any proposed deviations from the regulation
(including citations). Provide in response to this
item or separately (in writing) any request for a
waiver of any provision of Regulation MM that
complies with 12 CFR 239.50(c). The Board’s
approval of an application that does not include
a request in writing for a waiver of an applicable
requirement of Regulation MM shall not constitute a waiver of any provision for which the
Applicant does not comply.

• Material changes between the date of the balance
sheet and the date of the application (explained by
footnotes).

Financial and Managerial Information
(6) Pro Forma Balance Sheet

• Long- and short-term debt;
• Goodwill and all other types of intangible assets; and

5. This type of applicant 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; Appendix C to Part 225.
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

(7) Capital

Expenses; Indemnification

For an Applicant that would be subject to consolidated capital requirements under Regulation Q (12 CFR Part 217) following consummation of the proposed conversion, provide a breakdown of the organization’s pro forma riskweighted assets as of the end of the most recent
quarter, showing each principal group of on and
off-balance sheet assets and the relevant riskweight. Also, identify the pro forma components
of common equity tier 1, additional tier 1 and tier
2 capital, pursuant to the capital adequacy
requirements of Regulation Q as of the end of
the most recent quarter, and provide calculations
of applicant’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 Applicant’s
pro forma supplementary leverage ratio, pursuant
to the capital adequacy regulations.
(8) Management

(9) Provide a detailed listing of expenses associated
with the proposed conversion, including (but
not limited to) legal fees, escrow fees, underwriting fees, valuation (appraisal) fees, transfer agent
fees, auditing and accounting expenses.
(10) If the Applicant will insure or indemnify any
underwriter, appraiser, lawyer, accountant, other
expert, or director or officer against any liability
which he or she may incur in his or her capacity
under any charter provisions, bylaw provisions,
contract, arrangement, statute, or regulation,
state the general effect of the charter provision,
bylaw provisions, contract, arrangement, or
regulation.

DRAFT

List any changes in management or other principal relationships related to the proposed conversion. For each proposed new management official
or principal provide:
a. Name, address, and title or position with
Applicant;

b. Number and percentage of shares of the
Applicant to be purchased by each individual;
c. Principal occupation if other than with the
Applicant; and
d. Percentage of direct or indirect ownership
held in the other depository institution or
depository institution holding company if
such ownership represents 10 percent of more
of any class of shares.
Interagency Biographical and Financial
Reports (“IBFRs”) are required for certain
individuals. Consult with the appropriate
Reserve Bank for guidance on who must provide an IBFR. See SR 15-8, Name Check Process for Domestic and International Applications, for more details.

Exhibits

Provide the following exhibits as attachments to this
form.
Exhibit 1. Notice to Members

Provide evidence that you have notified your members
as required by 12 CFR 239.54(c)(1). Such notification
may contain the information specified in 12 CFR
239.54(c)(2).
Exhibit 2. Plan of Conversion
Provide the complete written plan that your board of
directors adopted for the conversion to stock form that
meets the requirements of 12 CFR 239.54.
Exhibit 3. Business Plan
Provide a copy of the Applicant’s proposed business
plan, submitted as a separately bound, confidential
exhibit, that contains the information specified in
12 CFR 239.53(b). Provide the related certifications as
required 12 CFR 239.53(c)(2).
Exhibit 4. Resolution(s) of Board of Directors
Provide a certified copy or copies of your board of
directors’ resolution or resolutions relating to the proposed conversion, as set out in 12 CFR Part 239,
including: (1) adopting the plan of conversion; and
(2) authorizing this application.

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Exhibit 5. Charter and Bylaws
Provide copies of the prosed charter (including a liquidation account provision) and bylaws.
Exhibit 6. Appraisal Materials
Provide a copy of the appraisal materials as required
by 12 CFR 239.55(b)(1)(ii).
Exhibit 7. Proxy Soliciting Materials
Furnish copies of all proxy soliciting materials, including a preliminary proxy statement with signed financial
statements; a form of proxy; and any additional proxy
soliciting materials, including press releases, personal
solicitation instructions, radio or television scripts that
the mutual holding company plans to use or furnish to
the members, and a legal opinion indicating that any
marketing materials comply with all applicable securities laws.

(3) The type and extent of each class of voting
rights after conversion. The opinion must discuss any state law that requires you to provide
savings account holders or borrowers with voting rights.
Exhibit 11. Federal and State Tax Opinions or Ruling

(1) Furnish an opinion of the Applicant’s tax advisor or, if applicable, a ruling from the Internal
Revenue Service as to the federal income tax
consequences of the plan of conversion. The
opinion or ruling must address the tax consequences for the Applicant and to the various
account holders who receive nontransferable
subscription rights to purchase shares.
(2) Furnish an opinion of the Applicant’s tax advisor or, if applicable, a ruling from the appropriate state taxing authority on any tax consequences of the plan of conversion under the
laws of the state where applicant will be located.
The opinion must address the tax consequences
to the Applicant and to its eligible account
holders.

DRAFT

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 conversion.
Exhibit 8. Offering Circular

Provide a copy of the Offering Circular as required by
12 CFR 239.55(b)(1)(iv).

Exhibit 12. Miscellaneous Documentation
Provide the following documents:

Exhibit 9. Charitable Organization

(1) Proposed forms of stock certificates.

If the proposed conversion includes a contribution to a
charitable organization, provide the documentation
required by 12 CFR 239.64, including current and proposed charter and bylaws (or trust agreement) for the
charitable organization. Describe how the charitable
organization complies with the requirements of
12 CFR 239.64.

(2) Proposed order forms with respect to the subscription rights.

Exhibit 10. Opinion of Counsel
Furnish a legal opinion of counsel that addresses, at a
minimum:

(1) The legal sufficiency of the proposed forms of
stock certificates, order forms, and marketing
materials to be issued by the Applicant.
(2) The state law requirements applicable to the
plan of conversion, including citations to applicable state law and a statement regarding
whether such requirements will be fulfilled by
the plan.

(3) Any proposed stock benefit plan(s), form of
stock option agreement(s), and management or
employee stock benefit plan(s).
(4) Any proposed management employment
contracts.
(5) Any material loan agreements relating to your
borrowing other than from a Federal Home
Loan Bank and other than subordinated debt
securities approved by the Board.
(6) Any actual or proposed valuation (appraisal)
agreements, underwriting contracts, agreements
among underwriters, or selling agent
agreements.
(7) Any required undertaking or affidavits by officers or directors purchasing shares in the con-

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version stating that they are acting
independently.

(8) Any documents referred to in the answer to item
Indemnification above.
(9) Any trustee agreements or indentures.
(10) Any agreements for the making of markets or
the listing on exchanges of your conversion
stock.

(11) Proposed marketing materials.
If you provide any document, contract, or agreement
in draft form under this exhibit, the Applicant must
provide the final form immediately after the meeting of
your members to consider the plan of conversion. The
Applicant may provide documents required by subsection (f) above, that by their nature cannot be practically
expected until a later time, in substantially final form.

DRAFT

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