Reporting FR MM-PS

INSTRUCTIONS FOR PREPARATION OF

Proxy Statement
FR MM-Form PS

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").

Who May Use This Form
This form should be used to file information with the
Federal Reserve System (the “Federal Reserve”) pursuant to 12 CFR Part 239, regarding certain transactions,
including reorganizations, stock issuances and conversions. By using this form, mutual members will receive
information necessary in order to vote on a particular
transaction.

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 iden1. See https://www.federalreserve.gov/apps/reportforms/.
2. See SR letter 12-12 at https://www.federalreserve.gov/supervisionreg/
srletters/sr1212.htm

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.

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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personnel and medical and similar files

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

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.

onstrate 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.

Confidentiality

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.’’

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).

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.

DRAFT

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 dem-

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.

Supporting Information

261.17

The Federal Reserve specifically reserves the right to
require the filing of additional statements and infor-

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mation. 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 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.

(4) The Applicant must state that the proxy is solicited for the meeting and any adjournment of the
meeting, and that the Applicant will not vote the
proxy at any other meeting.
Item 3. Persons making the solicitation
(1) The Applicant must state whether its management is soliciting the proxy. If any director
informs the Applicant in writing that he or she
intends to oppose any action, the Applicant must
name the director and indicate the action any
such director intends to oppose.
(2) The Applicant must describe the method that it
will use to solicit proxies, unless it solicits by mail.
(3) If the Applicant’s management is not soliciting
the proxies, it must name the persons on whose
behalf the solicitation is made. The Applicant
does not have to respond to items 5 through 16
for such solicitations.
and 6
Item 4. Voting rights and vote required for approval

DRAFT

Requested Information

Item 1. Notice of meeting
The Applicant must include the following information
on the cover page of the proxy statement:

(1) The Applicant must describe briefly:

(1) Notice of the members’ meeting to vote on the
conversion;

(a) the voting rights of each class of its
members;

(2) The meeting date, time, and place;

(b) the approximate total number of votes
entitled to be cast at the meeting; and

(3) A brief description of each matter that will be
voted at the meeting;
(4) The date of record for determining which members are entitled to vote at the meeting;
(5) The date of the proxy statement; and
(6) The Applicant’s mailing address, zip code, and
telephone number.
Item 2. Revocability of proxy
(1) The Applicant must state that a member may
revoke his or her proxy before it is exercised.
(2) The Applicant must briefly describe the procedures a member must follow to revoke his or her
proxy.
(3) The Applicant must describe any charter provision, bylaw, or federal or state law that limits voting by proxy.

(c) the voting rights of beneficiaries of accounts
held in a fiduciary capacity, such as IRA
accounts.
(2) The Applicant must give the record date for members entitled to vote at the meeting.
(3) The Applicant must state the vote required for
approval of each matter that will be submitted to
a vote of members.
(4) You may not use previously executed proxies to
vote on the conversion.
Item 5. Directors and executive officers
(1) The Applicant must furnish the information on
directors and executive officers and certain relationships and related transactions required in
items 401 and 404 of Regulation S-K, 17 CFR
229.401 and 404, and item 6 of Regulation 14A,
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17 CFR 240.14a-101. Unless the context otherwise requires, the words “registrant” and “issuer”
in those regulations refer to the Applicant and the
word “Board” refers to the Board of Governors
of the Federal Reserve System.
(2) If the Applicant’s conversion application includes
a charitable contribution, it must disclose:
(a) The proposed number of directors (or trustees) and officers of the charitable
organization;
(b) The name and background of each person
proposed as a director (or trustee) or officer
of the charitable organization; and
(c) The position, if any, that each proposed
director (or trustee) and officer holds with
the Applicant.

the information is material to understand
how its business developed. The Applicant
must discuss material changes in the way it
conducts business.
its
(c) The Applicant must describe your historical
lending practices, and state its plans for
lending. The Applicant must address
whether it will offer real estate or other types
of loans, the nature of security it will
receive, the terms of loans it will offer,
whether the loans will carry fixed or variable
interest rates, and whether it will retain the
loans or resell them in secondary mortgage
markets.
(d) The Applicant must explain whether any
material acquisitions have had or will have
significant impact on it, and the nature of
the impact.

DRAFT

(3) The Applicant must state whether anyone will
exercise control through the use of proxies and
describe the nature of the control.

Item 6. Management compensation
The Applicant must furnish the information on executive compensation required in item 402 of Regulation S-K, 17 CFR 229.402, and item 7 of Regulation 14A, 17 CFR 240.14a-101. Unless the context
otherwise requires, the words “registrant” and “issuer”
in those regulations refer to the Applicant and the
word “Board” refers to the Board of Governors of the
Federal Reserve System.

(2) Selected financial data. The Applicant must furnish a summary of its selected financial data in
tabular form. The Applicant must provide this
information in columns that permit the comparison of data in each of the last three fiscal years.
The Applicant must provide data for any additional fiscal years, if the data is necessary to keep
the summary from being misleading. Financial
data should be provided on a consolidated and/or
parent-only basis as appropriate, for Applicant
and for its consolidated subsidiaries.
Instructions.

Item 7. Business
(1) Description of business.
(a) The Applicant must discuss briefly its organizational history, including the year of
organization.
(b) The Applicant must describe the business
that it and its subsidiaries conduct and
intend to conduct. The Applicant must
describe how its business and any predecessor(s)’ business developed over the past five
years. If the Applicant has been engaged in
business less than five years, the Applicant
must provide information from when it
began operations. The Applicant must disclose this information for earlier periods if

(a) The Applicant must include the following
items in the summary: Total interest income;
total interest expense; income (loss) from
continuing operations; net income; total
loans; total investments; total assets; total
deposits; total borrowings; total retained
earnings; total shareholders’ equity; total
regulatory capital; and total number of customer service facilities, indicating the number which provide full service. The Applicant may vary this data if the variance is
appropriate to conform to the nature of its
business. The Applicant may include additional items if it believes the items would
enhance understanding and highlight trends
in its financial condition and results of

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operations. The Applicant must discuss significant business combinations. The Applicant may combine the discussion of liquidity and capital resources, if the two topics
are interrelated. If a discussion of the subdivisions of its business is appropriate to
understand the Applicant’s business, it must
focus its discussion on each relevant, reportable segment or other subdivision of the
business, and on its business as a whole.

operations. The Applicant must briefly
describe factors that materially affect the
comparability of the financial data, such as
accounting changes, business combinations,
or dispositions of business operations. The
Applicant may describe such factors by a
cross reference to other discussions in the
proxy statement. The Applicant must also
discuss any material uncertainties that may
cause the data not to be indicative of its
future financial condition or results of
operations.

(i) Liquidity. The Applicant must identify
any known trends or any known
demands, commitments, events, or
uncertainties that are reasonably likely
to cause its liquidity to materially
increase or decrease. If the Applicant
identifies a material deficiency, indicate
what it has done or will do to remedy
the deficiency. The Applicant must
identify and separately describe internal and external sources of liquidity,
and briefly discuss any material unused
sources of liquid assets. The Applicant
must comment on maturity imbalances
between assets and liabilities.

(b) If the Applicant elects to provide three-year
summary information in accordance with
the Financial Accounting Standards Board’s
Statement of Financial Accounting Standards No. 89 (“SFAS 89”) “Financial
Reporting and Changing Prices,” it may
combine this information with the selected
financial data required in this item.

DRAFT

(c) If the Applicant includes interim-period
financial statements, or it is required to
include interim-period financial statements
under item 14, it must update the selected
financial data for the interim period to
reflect any material change in the trends
indicated. If updating information is necessary, it must provide the information on a
comparative basis, unless the comparison is
not necessary to understand the updating
information. The Applicant must provide a
management statement of presentation for
the required interim-period financial data
reported.

(3) Management's discussion and analysis of financial
condition and results of operations.
(a) The Applicant must discuss its financial
condition, changes in financial condition,
and results of operations for Applicant and
its subsidiaries. The Applicant must discuss
the information in paragraphs (i), (ii), and
(iii) of this paragraph (c) with respect to
liquidity, committed resources, and results
of operations. The Applicant must also provide all other information necessary to
understand its financial condition, changes
in its financial condition, and results of its

a

(ii) Committed resources. The Applicant
must describe its material commitments for funding loans or other
expenditures as of the end of the latest
fiscal period. The Applicant must indicate the general purpose of the commitments and the anticipated source of
funds to fulfill the commitments. The
Applicant must describe known material trends, favorable or unfavorable, in
its committed resources. The Applicant
must indicate any expected material
changes in the mix and the relative cost
of the resources. The Applicant must
discuss changes between deposits,
equity, debt, and any off-balance- sheet
financing arrangements.

(iii) Results of operations.
(a) The Applicant must describe any
unusual or infrequent events or
transactions or any significant economic changes that materially
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its

affected the amount of reported
income from continuing operations.
In each case, the Applicant must
indicate the extent to which these
events, transactions, or changes
affected income. In addition, the
Applicant must describe any other
significant components of revenues
or expenses necessary to understand its results of operations.
(b) The Applicant must describe any
known trends or uncertainties that
have had, or will have, a materially
favorable or unfavorable impact on
revenue or net income from its continuing operations. If the Applicant
knows of events that will cause a
material change in the relationship
between costs and revenues, it must
disclose the change in the
relationship.

Securities Act Industry Guide 3,
section III C).
(iv) The Applicant must provide a qualitative and quantitative discussion of its
market risk analysis.
Instructions.
(a) The Applicant’s discussion and
analysis must address your financial statements and other statistical
data that will enhance a reader's
understanding of the Applicant’s
financial condition, changes in its
financial condition, and results of
operations. Generally, the Applicant must discuss the three-year
period covered by the financial
statements and use year-to-year
comparisons to enhance a reader's
understanding.

DRAFT

(c) If the Applicant’s financial statements disclose material increases in
interest expense, it must discuss the
extent to which the increases are
attributable to increases in rates or
to increases in volume.

(d) For the Applicant’s three most
recent fiscal years, or for those fiscal years in which it has been
engaged in business, whichever
period is shorter, the Applicant
must discuss the impact of inflation
and changing prices on revenue and
net income from continuing
operations.
(e) For the most recent financial statement, the Applicant must discuss
any unusual risk characteristics in
its assets, including real estate
development, significant amounts
of commercial real estate held as
loan collateral, and significant
increases in amounts of nonaccrual, past due, restructured, and
potential problem loans (see Securities and Exchange Commission’s

(b) The Applicant’s discussion and
analysis should provide members
with relevant information to assess
its financial condition and results
of operations, based on the members’ evaluation of the amounts
and certainty of cash flows from
operations and from outside
sources.
(c) The Applicant’s discussion and
analysis must specifically focus on
material events and uncertainties
known to it that would cause
reported financial information not
to be indicative of future operating
results or of future financial
condition.
(d) If the consolidated and/or parentonly financial statements reveal
material changes from year to year
in one or more line items, the
Applicant must state the causes for
the changes if the causes are necessary to understand its business as a
whole.

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General Instructions
(3)(a)

changes in the items specifically listed in paragraph (c)(1) of this item 7. However, the Applicant does not have to address the impact of inflation and changing prices on operations for
interim periods.

(e) The Board of Governors of the
Federal Reserve System (“Board”)
encourages the Applicant, but does
not require it, to supply forwardlooking information. The Applicant must disclose known data that
will have an impact upon future
operating results, such as known
future increases in rates or other
costs.

(a) Material changes in financial condition. The
Applicant must discuss any material changes
in financial condition from the end of the
preceding fiscal year to the date of the most
recent interim balance sheet that it provides.
If the Applicant provides an interim balance
sheet as of the corresponding interim date of
the preceding fiscal year, it must discuss any
material change in financial condition from
that date to the date of the most recent
interim balance sheet that it provides.

(f) If the Applicant discloses narrative
explanations of supplementary
information in accordance with
SFAS 89, it may combine these
explanations with its discussion
and analysis required under this
provision or it may supply the
information separately. If the
Applicant combines the information, it must place it reasonably
near the discussion and analysis. If
the Applicant does not combine the
information, it may omit the
required discussion of the impact
of inflation and cross reference the
explanations provided under
SFAS 89.

DRAFT

b

(g) If the Applicant does not disclose
explanations of supplementary
information in accordance with
SFAS 89, it may discuss the effects
of inflation and changes in prices in
an appropriate manner. However,
the Applicant must include a brief
textual presentation of management's views. The Applicant does
not have to present specific numerical financial data.

a

(4) If the Applicant includes interim-period financial
statements, it must provide management’s discussion and analysis of the financial condition and
results of operations. This discussion and analysis
must enable the reader to assess material changes
in its financial condition and results of operations
between the periods specified in subdivisions
(i) and (ii) of this paragraph . The Applicant’s
discussion and analysis must address material

(b) Material changes in results of operations. The
Applicant must discuss any material changes
in its results of operations from the most
recent fiscal year-to-date period for which
the Applicant provides an income statement
to the corresponding year-to-date period of
the preceding fiscal year. If the Applicant
provides an income statement for the most
recent fiscal year quarter, it must discuss
material changes with respect to that fiscal
quarter and the corresponding fiscal quarter
in the preceding fiscal year.

(5) Lending activities.
(a) The Applicant must describe briefly the
areas where it normally lends.

2

(b) The Applicant must describe briefly its longterm investments in mortgage loans, and the
effect of these investments on its earnings
spread. The Applicant must provide the normal maturity of loans that it made on the
security of single family dwellings and estimate the average length of time these loans
are outstanding.
(c) For each of the periods required by
item 14(b), the Applicant must provide the
following information in tabular form. The
Applicant may exclude fees that are not
adjustments of yield.
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14(2)

(i) Average yield during the period on:
(A) the Applicant’s loan portfolio,
(B) its investment portfolio, (C) other
interest-earning assets, and (D) all
interest-earning assets. The Applicant
must compute average yield at least
monthly.

(iii) Equity-to-assets ratio (average equity
divided by average total assets).

14(1)

(e) The Applicant must briefly describe federal
and state restrictions on its lending activities
and laws affecting mortgage lending or other
lending.
(f) The Applicant must describe briefly the risk
elements in its loan and investment portfolios and its procedures for delinquent loans.
As of the end of each of the periods covered
by the statements of operation required by
item 14(b)(1), and as of the date of the latest
statement of financial condition required by
item 14(a), the Applicant must set forth in
tables the amounts and categories of nonaccrual, past due, restructured, and potential
problem loans (see Securities and Exchange
Commission’s Securities Act Industry
Guide 3, section III. C.) and the ratio of
such loans to total assets.

(ii) Average rate paid during the period
on: (A) deposits, (B) borrowings and
Federal Home Loan Bank advances,
(C) other interest-bearing liabilities,
and (D) all interest-bearing liabilities
((A), (B), and (C)). You must compute
average rate paid at least monthly.
(iii) The net yield on average interestearning assets (i.e., net interest earnings divided by average interestearning assets. Net interest earnings is
the difference between the amount of
interest earned and interest paid).

DRAFT

2

(iv) For each of the periods required by
item 14(b), you must provide in tabular
form: (A) The amount of change in
interest income and (B) the amount of
change in interest expense. For each
major category of interest-earning
asset and interest- bearing liability (as
stated in items (i) and (ii) of paragraph (4)), you must attribute the
amount of change to: (1) changes in
volume (change in volume multiplied
by old rate), (2) changes in rates
(change in rate multiplied by old volume), and (3) changes in rate volume
(change in rate multiplied by the
change in volume). You must allocate
the rate/volume variances consistently
between rate and volume variance and
disclose the basis of allocation in a
note to the table.

5(c)

(6) Savings Activities. The Applicant must state, if it
liquidates after conversion, it will fully pay savings account holders before it pays shareholders.
(7) Federal Regulation. The Applicant must describe
briefly, to the extent not otherwise covered by
other items, how federal agencies regulate it and
its operations. The Applicant must describe federal regulatory capital requirements, what will
happen to the Applicant if it fails to meet those
capital requirements, and whether its regulatory
capital position complies with those requirements.
(8) Federal and State Taxation
(a) The applicant must describe briefly applicable federal income tax laws including:
(i) Permissible bad debt reserves;

14(2)

14(1)

(i) Return on assets (net income divided
by average total assets).

(ii) The applicant’s position with respect
to the maximum bad debt reserve limitations as of the date of the latest
statement of financial condition
required under item 14(a);

(ii) Return on equity (net income divided
by average equity).

(iii) Future increases in the applicant’s
effective income tax rate;

(d) For each of the periods required by item 14,
the Applicant must present the following:

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required by this item, or to substitute appropriate
information of comparable character. The Board
may permit the Applicant to omit or substitute
information where it is consistent with the protection of account holders. The Board may also
require the Applicant to furnish other additional
or substitute information if the information is
necessary or appropriate to adequately describe
past and future business.

(iv) The date through which the Internal
Revenue Service audited the applicant’s federal income tax returns; and
(v) How the payment of cash dividends on
the applicant’s capital stock after conversion will effect its federal income
taxes.
(b) The applicant must briefly describe applicable state tax laws.
(9) Competition. The Applicant must describe the
material sources of competition for savings associations generally. The Applicant must indicate, to
the extent practicable, its position in its principal
lending and savings markets.

13

Items 8 through 15 below are applicable only in the case
of conversion of a mutual holding company to the stock
form of ownership.

Item 8. Description of the plan of conversion
(10) Office and other material properties. The Appli(1) The Applicant must state in the proxy statement
cant must furnish the location of its home office,
before the information required by this item 8
branch offices, and other office facilities (such as
that the plan of conversion is attached as an
mobile or satellite offices). The Applicant must
14(1)
exhibit to the proxy statement and that the reader
state the total net book value of all offices as of
may consult the plan for further information.
the date of the latest statement of financial condition required by item 14(a). The Applicant must
(2) The Applicant must describe its plan of converstate the expiration date of the lease on every
sion. The Applicant must describe the informaleased office. The Applicant must describe briefly
tion required by paragraphs (c) through (j) of this
any undeveloped land that it owns, including the
item. The Applicant must include any additional
location, net book value, prospective use, and
information necessary to accurately describe the
3
holding period.
material provisions of the plan.

DRAFT

(11) Employees. The Applicant must state the number
of full-time employees, including executive officers listed under item 5. The Applicant must summarize briefly any loan, profit sharing, retirement, medical, hospitalization or other compensation plans that it provides to its employees,
unless it has already included this information
under item 6.
(12) Subsidiaries. The Applicant must describe briefly
its investment in each subsidiary, and the major
lines of the subsidiary’s business (including any
joint ventures) that are material to its operations.
(13) Legal proceedings. The Applicant must furnish
the information on legal proceedings required by
item 103 of Regulation S-K, 17 CFR 229.103.
Unless the context otherwise requires, “registrant” in that regulation means the Applicant.
(14) Additional information. The Applicant may
request permission to omit any information

(3) The Applicant must briefly describe the effects of
conversion from a mutual to a stock form of
organization, including all of the following:
11

(a) That the Applicant’s savings account holders will continue to hold FDIC-insured
accounts in the savings association, with the
same dollar amount, rates of return, and
general terms as existing accounts;
(b) That the Applicant’s savings and borrowing
members will not have voting rights after
conversion. In the mutual holding company
context, however, the Applicant must
describe what voting rights, if any, its savings and borrowing members will have after
reorganization;
(c) That the account holders have liquidation
rights. The Applicant must describe the liquidation account it will establish and maintain, including when it will pay the account,
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the interest of eligible account holders and
supplemental eligible account holders in the
account, and the formula that it will use to
adjust the account;
(d) That the conversion will not affect borrowers’ loans, including the amount, rate, maturity, security, or other contractual terms;
(e) That the FDIC will not insure your stock;
(f) That the Applicant will not distribute any
assets other than to pay conversion expenses
or to make a charitable contribution; and
(g) The reasons management recommends the
conversion, including any advantages to the
community that the Applicant serves.

of the shares, as determined by its management and the underwriter; and
(c) The Applicant must state that it must sell all
of the shares.
(6) Unless the Applicant will not begin the offering
until after its members’ meeting, it must discuss
the following concerning stock it will sell:
(a) the earnings per share on a pro forma basis
as of the most recent year-end and interim
period required by item 14(b); and 14(2)
(b) the book value per share on a pro forma
basis as of the most recent year-end and
interim period required by item 14(a).

DRAFT
Instructions.

(4) The Applicant must furnish the following information regarding the subscription rights of
members:

(i) The Applicant must provide earnings
and book value per share data (a) without giving effect to the estimated net
proceeds from the sale of the stock and
(b) after giving effect to such proceeds.
The Applicant must clearly state all of
its assumptions.

(a) The formula that the Applicant will use to
determine the subscription rights of account
holders to purchase shares under
12 CFR 239.59;

(b) The purchase priorities, total purchase limitations, total number of shares that mem- 7(5)(c)(i)(D)
bers may purchase, and the allocation formula in the plan of conversion;
(c) The allocation formulas that the Applicant
will use if shares are oversubscribed during
the sale under the plan of conversion; and
(d) The use and timing of the order forms for
the exercise of subscription rights.
(5) The Applicant must furnish the following information regarding the price of the shares it will sell
in the public offering under the plan of
conversion:
(a) The Applicant must estimate the price range
per share of the shares it will sell in the public offering under its plan of conversion. The
Applicant does not have to estimate the
price range if it will not begin the offering
until after its members’ meeting;
(b) The Applicant must indicate that the offering price will be the pro forma market value

14(1)

7(5)(c)(ii)(A)

(ii) In computing pro forma earnings, the
Applicant must use the average of
(i) the average yield on all interestearning assets (item 7(d)(4)(i)(D)) and
(ii) the average rate paid on deposits
(item 7(d)(4)(ii)(A)).

(iii) If interest rates have significantly
changed during the applicable periods,
the Board may permit the Applicant to
use properly supported alternative
computations.
(iv) The Applicant must explain that pro
forma data may not be indicative of its
actual financial position or the results
of continuing operations after the
conversion.
(7) The Applicant must state when the proposed subscription period will begin and end, and must
describe whether the plan of conversion permits it
to change or extend these dates. The Applicant
must also state the following:

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nature of communications or contracts
with potential purchasers).

(a) The Applicant will set a maximum subscription price in the offering circular that it will
use for the offering of subscription rights;
(b) The actual subscription price will be the
public offering price;

(iv) Any preferences that you will give to
any geographic area or to any class of
potential purchasers.

(c) The actual subscription price will not exceed
the maximum subscription price on the
order form; and

(v) The limitations on purchases by potential purchasers.
(c) If a selling agent assists in offering shares,
the Applicant must identify the selling agent,
disclose how the selling agent will offer the
shares, and disclose the commissions and
fees you will pay to the selling agent.

(d) The Applicant will refund any difference
between the maximum and actual subscription prices, unless the subscriber affirmatively elects to apply the difference to the
purchase of additional shares.

(d) If the Applicant will offer any shares
through underwriters, it must identify the
names of the principal underwriters and the
amounts that each will underwrite. The
Applicant must identify each principal
underwriter that has a material relationship
with the Applicant and describe the
relationship.

(8) The Applicant must also:

DRAFT

(a) Describe, to the extent practicable, whether
the Applicant intends to list its shares on an
exchange, or how it will otherwise provide a
market for the purchase and sale of shares in
the future; and
(b) Describe briefly the tax effect of the conversion on the Applicant and on the various
classes of account holders receiving nontransferable subscription rights in the
conversion.

(9) The Applicant must state whether the plan of
conversion permits it to offer unsubscribed shares
to the public directly or through underwriters:
(a) The Applicant must include the following
information in substantially the tabular
form set forth below.

Per Share
Total

Price to Public

Selling
Discounts
and
Commissions

$
$

$
$

(e) The Applicant must briefly disclose the discounts and commissions that it may allow or
may pay dealers in connection with the sale
of unsubscribed shares for the public
offering

(10) The Applicant must furnish the following information on proposed purchases of shares by its
directors and officers in a table:

1
Proceeds to
Applicant
$
$

(b) If the Applicant sells any unsubscribed
shares to the public, you must indicate:
(i) The timing for the offering.
(ii) The geographic area where you will
make the offering.
(iii) The method you will employ to market
the shares (including the frequency and

(a) The total proposed number of shares that all
officers, directors, and their associates as a
group may purchase.
(b) The name and position of each officer and
director in item 5(a) and the number of
shares each will purchase.
(c) If any officer, director, or his or her associate
proposes to purchase one percent or more of
the total number of shares that will be outstanding, the name, position, and the number of shares that the officer, director, or
associate will purchase.
(d) Indicate separately the number of shares
that will be purchased in each offering category with respect to the information
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General Instructions
(a), (b), and (c) of paragraph (10).

required by items (1), (2), and (3) of paragraph (j).
(11) If the Applicant’s conversion application includes
a charitable contribution, it must disclose the following additional information:
(a) The amount and percentage of shares that
each proposed director (or trustee) and officer of the charitable organization will purchase in the conversion.
(b) The aggregate number and percentage of
shares that the charitable organization and
its proposed officers and directors (or trustees) will hold.
(c) The number of shares and value of the contribution at the minimum, midpoint, maximum, and maximum as adjusted, of the
valuation range.

(3) The Applicant must discuss the trading market
that it expects will exist for its shares. The Applicant must estimate the number of market makers
and shareholders, and describe its plans for listing
the stock.
Instruction. The Applicant must describe the
basic requirements it must meet to list its stock.
(4) If the rights of the Applicant’s stockholders will
be materially limited or qualified by the rights of
savings account holders or borrowers, it must
describe these limitations or qualifications so that
members can understand their stock rights.
Item 10. Capitalization
The Applicant must set forth the amounts of its capitalization in substantially the tabular form indicated
below. The Applicant may modify the captions as
appropriate.

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(d) The decrease in shares that the Applicant
will sell in the conversion, in number of
shares and dollar amounts, at the minimum,
midpoint, maximum, and maximum as
adjusted, of the valuation range.
(e) The dilution in ownership and book value
per share from the proposed contribution.

(f) The Applicant’s plans for additional charitable contributions over the next three years.
knows
Instruction.
The Applicant is only required to furnish information
on associates of officers and directors to the extent
that it know this information. If the Applicant is
unable to confirm the number of shares an associate
will purchase, it must disclose the number of shares
the associate is given subscription rights to purchase.

(A) Capitalization on
most recent
balance
sheet date

Deposits
FHLB
Advances
Other
Borrowings
Capital Stock
Preferred
Stock
Paid-in
Capital
Retained
Earnings
Restricted
Unrestricted
TOTAL

(B) Pro forma
adjustments
as a result of
conversion

(C) Pro forma
capitalization,
after giving
effect to the
conversion

$

$

$

$

$

$

Instructions.
Item 9. Description of stock
(1) The Applicant must furnish the information
required in item 202 of Regulation S-K, 17
CFR 229.202. Unless the context otherwise
requires, “registrant” refers to the Applicant.

(1) The Applicant must indicate in the table, or in a
footnote to the table, the total number of shares it
will authorize, the par or stated value of the
shares, and the number of shares it will sell in the
conversion.

(2) The Applicant must undertake to use its best
efforts to encourage and assist a professional market maker to establish and maintain a market for
its shares.

(2) The Applicant must estimate in the table the total
amount of funds it will receive when it sells its
stock. In a footnote, it must state the price per
share that it used for the estimate. The Applicant

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14(1)

must clearly indicate that the total amount and
price per share are estimates.
(3) In Column A, the Applicant must use the most
recent balance sheet date required by item 14.
Item 11. Use of proceeds
The Applicant must explain how it will use the new
proceeds of the conversion, including the approximate
amount that it will use for each purpose. For example,
use of proceeds may include expanded secondary market activities, larger scale lending projects, loan portfolio diversification, increased liquidity investments,
repayment of debt, additional branch offices or other
facilities, service corporation investments, and
acquisitions.

selected financial data and a Management’s
Discussion and Analysis section of significant variances.
(2) Consolidated statements of income and cash flows.
(a) The Applicant, its subsidiaries, and its predecessors must furnish consolidated,
audited statements of income and cash
flows for each of the three fiscal years preceding the date of the most recent balance
sheet furnished.
(b) In addition, the Applicant must furnish
statements of income and cash flows (i) for
any interim period between the latest
audited balance sheet and the date of the
most recent interim balance sheet that it
files, and (ii) for the corresponding period of
the preceding fiscal year. The interim financial statements may be unaudited.

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Item 12. New charter, bylaws, or other documents
The Applicant must describe the material changes to
its existing charter, bylaws, and other similar documents that will take effect after conversion.

Item 13. Other matters
The Applicant must state that it will register its stock
under section 12(g) of the Securities Exchange Act of
1934, and that it will not deregister the stock for three
years after the date of conversion.
Item 14. Financial statements
(1) Consolidated balance sheets.

1(a)

(a) The Applicant and its subsidiaries must furnish consolidated, audited balance sheets as
of the end of each of the two most recent
fiscal years, even if it is filing using the provisions of Regulation S-B.
(b) If the latest balance sheets the Applicant
furnishes under (1) of this paragraph are
dated 135 days or more before the date the
Board approves the conversion, it must furnish an interim balance sheet dated within
135 days of Board approval. This interim
balance sheet may be unaudited.
(c) If the latest balance sheets the Applicant
furnishes under (1) of this paragraph are
dated 105 days or more before the date the
Board approves the conversion, it must furnish a Recent Development section of

(3) Changes in stockholders' equity. The Applicant
must analyze the changes in each caption of
stockholders’ equity in the balance sheets. The
Applicant must present this analysis in a note or
separate statement that reconciles the beginning
balance with the ending balance for each period
for which it is required to furnish an income statement. The Applicant must describe all significant
reconciling items with appropriate captions. The
Applicant must reconcile total generally accepted
accounting principles (GAAP) capital with actual
tangible, core, and risk-based capital in the notes
to the financial statements.
(4) Financial statements of business acquired or to be
acquired. The Applicant must furnish the information required by 17 CFR 210.3-05 and
210.11-01 to -03 for any business that it has
acquired or will acquire.
(5) Separate financial statements of subsidiaries not
consolidated and persons for whom its ownership is
50 percent or less. The Applicant must furnish the
information required by 17 CFR 210.3-09 on
separate financial statements of subsidiaries not
consolidated and persons for whom its ownership
is 50 percent or less.

(6) Filing of other statements in certain cases. The
Applicant may request permission to omit any of
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the statements required by this item, or to substitute appropriate statements of comparable character. The Board may permit the Applicant to
omit or substitute statements where it is consistent with the protection of account holders. The
Board may also require the Applicant to include
other additional or substitute statements, if the
statements are necessary or appropriate to
adequately present the financial condition of any
person whose financial statements are required,
or whose statements are otherwise necessary for
the protection of account holders and others.

Instructions.
(a) If the Applicant previously used an audit
period for its certified financial statements
and this audit period does not coincide with
its fiscal year, it may use the audit period
instead of any required fiscal year. The
Applicant may use this audit period, however, only if it covers a full twelve months’
operations and it has used this period
consistently.
(b) Interim financial statements must be comparative and reported in the same format as
the audited financial statements.

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