(a) Acquisitions by savings and loan holding companies. No savings
and loan holding company shall be deemed to control a savings association
solely by reason of the purchase by such savings and loan holding
company of shares issued by such savings association, or issued by
any savings and loan holding company (other than a bank holding company)
which controls such savings association, in connection with a qualified
stock issuance if prior approval of such acquisition is granted by
the Board under this subpart, unless the acquiring savings and loan
holding company, directly or indirectly, or acting in concert with
1 or more other persons, or through one or more subsidiaries, owns,
controls, or holds with power to vote, or holds proxies representing,
more than 15 percent of the voting shares of such savings association
or holding company.
(b) Qualification. For purposes of this section, any issuance of
shares of stock shall be treated as a qualified stock issuance if
the following conditions are met:
(1) The shares of stock are issued by—
(i) An undercapitalized savings association, which for purposes of
this paragraph (b)(1)(i) shall mean any savings association—
(A) The assets
of which exceed the liabilities of such association; and
(B) Which does not comply with
one or more of the capital standards in effect under section 5(t)
of HOLA; or
(ii) A savings and loan holding company
which is not a bank holding company but which controls an undercapitalized
savings association if, at the time of issuance, the savings and loan
holding company is legally obligated to contribute the net proceeds
from the issuance of such stock to the capital of an undercapitalized
savings association subsidiary of such holding company.
(2) All shares of stock
issued consist of previously unissued stock or treasury shares.
(3) All shares of stock
issued are purchased by a savings and loan holding company that is
registered, as of the date of purchase, with the Board in accordance
with the provisions of section 10(b) of the HOLA and the Board’s regulations
promulgated thereunder.
(4) Subject to paragraph (c) of this section, the Board approves
the purchase of the shares of stock by the acquiring savings and loan
holding company.
(5)
The entire consideration for the stock issued is paid in cash by the
acquiring savings and loan holding company.
(6) At the time of the stock
issuance, each savings association subsidiary of the acquiring savings
and loan holding company (other than an association acquired in a
transaction pursuant to section 13(c) or 13(k) of the Federal Deposit
Insurance Act, or section 408(m) of the National Housing Act, as in
effect immediately prior to enactment of the Financial Institutions
Reform, Recovery and Enforcement Act of 1989) has capital (after deducting
any subordinated debt, intangible assets, and deferred, unamortized
gains or losses) of not less than 6½ percent of the total assets
of such savings association.
(7) Immediately after the stock issuance,
the acquiring savings and loan holding company holds not more than
15 percent of the outstanding voting stock of the issuing undercapitalized
savings association or savings and loan holding company.
(8) Not more than one of the
directors of the issuing association or company is an officer, director,
employee, or other representative of the acquiring company or any
of its affiliates.
(9) Transactions between the savings association or savings and loan
holding company that issues the shares pursuant to this section and
the acquiring company and any of its affiliates shall be subject to
the provisions of section 11 of HOLA and the Board’s regulations promulgated
thereunder.
(c) Approval of acquisitions.
(1) Criteria. The Board, in deciding whether to approve or deny an application
filed on the basis that it is a qualified stock issuance, shall apply
the application criteria set forth in section 238.15(a), (b), and
(c).
(2) Additional capital commitments not required. The Board shall not disapprove any application for the purchase
of stock in connection with a qualified stock issuance on the grounds
that the acquiring savings and loan holding company has failed to
undertake to make subsequent additional capital contributions to maintain
the capital of the undercapitalized savings association at or above
the minimum level required by the Board or any other Federal agency
having jurisdiction.
(3) Other conditions. The Board shall
impose such conditions on any approval of an application for the purchase
of stock in connection with a qualified stock issuance as the Board
determines to be appropriate, including—
(i) A requirement that
any savings association subsidiary of the acquiring savings and loan
holding company limit dividends paid to such holding company for such
period of time as the Board may require; and
(ii) Such other conditions as the Board
deems necessary or appropriate to prevent evasions of this section.
(4) Application
deemed approved if not disapproved within 90 days.
(i) An application
for approval of a purchase of stock in connection with a qualified
stock issuance shall be deemed to have been approved by the Board
if such application has not been disapproved by the Board before the
end of the 90-day period beginning on the date of submission to the
Board of the complete record on the application as defined in section
238.14(g)(3)(ii).
(d) No limitation on class of
stock issued. The shares of stock issued in connection with a
qualified stock issuance may be shares of any class.
(e) Application form. A savings and
loan holding company making application to acquire a qualified stock
issuance pursuant to this subpart shall submit the appropriate form
to the appropriate Reserve Bank.
