Application Guidelines for Capital Assistance Program

This application is used to request participation in the Treasury Capital Assistance Program 

(CAP). Under the CAP, the U.S. Department of the Treasury (Treasury) may purchase 

qualifying capital in U.S. banking organizations. 

The application must be submitted to the appropriate Federal banking agency (FBA) for the 

applicant. If the applicant is a bank holding company, the application should be submitted to 

both the applicant's holding company supervisor and the supervisor of the largest insured 

depository institution controlled by the applicant. All inquiries regarding preparation of the 

application should be directed to the appropriate FBA for the applicant. 

All applications must be submitted no later than 5pm (EST), May 25, 2009. Institutions will 

have up to six months after receiving preliminary approval to close the transaction. Institutions 

taking part in the special forward-looking economic assessments in conjunction with their 

supervisors (those with assets in excess of $100 billion) need not wait for the conclusion of those 

assessments to apply. 

More detailed information, including submission instructions, can be found at the applicable 

FBA’s website: 

1. For the Federal Deposit Insurance Corporation: www.fdic.gov

2. For the Federal Reserve: www.federalreserve.gov 

3. For the Office of the Comptroller of the Currency: www.occ.treas.gov

4. For the Office of Thrift Supervision: www.ots.treas.gov

The terms of the CAP are described generally in this application. However, this description is 

not binding on the Treasury and is intended to provide general information only. The actual 

terms and conditions of the CAP are contained in documentation that will be available from the 

Treasury Department on the following websites: http://www.treas.gov/initiatives/eesa/ and 

http://financialstability.gov/. 

Eligible Institutions

The CAP is available to bank holding companies, financial holding companies, insured 

depository institutions and savings and loan holding companies that engage solely or 

OMB Control No. 1505-0213 

An agency is not authorized to conduct, and persons are not required to respond to, an information collection request 

unless it displays a valid control number. 
 

predominately in activities that are permissible for financial holding companies under relevant 

law. To qualify, the applicant must be established and operating in the United States and may 

not be controlled by a foreign bank or company. For purposes of CAP eligibility, the deadline 

for approval of any holding company application is January 15, 2009, i.e. the same as the 

deadline for such eligibility under the Capital Purchase Program. 

Institutions must consult with their appropriate FBA prior to submitting this application. 

Certain Conditions for Participation in the CAP

To be eligible for the CAP, the applicant must receive the approval of the Treasury. In addition, 

the applicant must agree to certain terms and conditions and make certain representations and 

warranties described in various agreements that will be prepared by the Treasury and available 

on Treasury’s website. A summary term sheet for publicly traded institutions is currently 

available on Treasury’s website and separate term sheets are expected to be made available for 

institutions that are not publicly traded or are organized as subchapter S corporations or in 

mutual form. Detailed investment agreements and associated documentation will be posted 

soon. Each applicant must obtain and review a copy of these agreements and agree to all of the 

terms and conditions, including representations and warranties, contained in these agreements. 

In the event the applicant files an application with the appropriate FBA prior to the availability of 

the investment agreement, the applicant must file an amended application which includes 

updated responses to any items in the application that required prior review of the investment 

agreement. 

In the event that an applicant cannot, by May 25, 2009, take action to be in compliance with all 

of the terms and conditions, including the representations and warranties, contained in the 

Treasury agreements, the applicant must provide an explanation of the condition or conditions 

that cannot be met and the reasons the condition or conditions cannot be met. This explanation 

must be attached to the application. Failure to agree to all terms and conditions may result in 

disqualification from the CAP. 

If the applicant receives preliminary approval to participate in the CAP from the Treasury, the 

applicant will have up to six months from the date of notification to submit the investment 

agreements and related documentation. 

Among the conditions to participation in the CAP is the requirement that the applicant and its 

covered officers and employees must agree to comply with the rules, regulations and guidance of 

the Treasury with respect to executive compensation, transparency, accountability and 

monitoring, as published and in effect at the time of the investment closing. These rules, 

regulations and guidance are explained on the following websites: 

http://www.treas.gov/initiatives/eesa/ and http://financialstability.gov/. 

Form of Capital Qualifying for Purchase

The capital eligible for purchase by the Treasury under the CAP is cumulative mandatorily 

convertible preferred stock of the publicly traded bank holding company, financial holding 

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company, savings and loan holding company, or insured depository institution. The shares must 

be pari passu with the most senior preferred shares of the applicant that are outstanding. 

The issuance by the applicant of the convertible preferred stock to the Treasury will be a 

“Qualified Equity Offering” under Treasury’s Capital Purchase Program to the extent the 

proceeds from the sale of the convertible preferred stock are used to redeem the preferred shares 

sold to the Treasury under the Capital Purchase Program in whole or in part in accordance with 

their terms (thus effecting an “exchange” of the convertible preferred stock for the preferred 

shares sold under the Capital Purchase Program). Proceeds that are used to redeem the preferred 

shares sold to the Treasury under the Capital Purchase Program will count towards the Qualified 

Equity Offering proceeds that are required to be raised in order to reduce the number of shares of 

common stock underlying the warrant issued to the Treasury under the Capital Purchase 

Program. If applicable, the proceeds from the sale of the convertible preferred stock may also be 

used to redeem the preferred shares sold to the Treasury under the Targeted Investment Program 

in whole or in part in accordance with their terms. 

Each applicant may issue an amount of convertible preferred stock equal to not less than 1% of 

its risk-weighted assets and not more than 2% of its Total Risk-Weighted Assets (RWA) plus 

any amount of convertible preferred stock to the extent the proceeds of such additional 

convertible preferred stock are used to redeem preferred shares sold under the Capital Purchase 

Program and, if applicable, the Targeted Investment Program as described above. An applicant 

must receive the approval of its FBA to issue convertible preferred in excess of this amount and 

will be deemed as needing “exceptional assistance.” The determination to provide such 

exceptional assistance will be solely in the discretion of Treasury in consultation with the 

appropriate FBA and will be made on a case-by-case basis to ensure or promote financial market 

stability. Applicants receiving exceptional assistance may be subject to additional terms and 

conditions. 

All measurements will be based on the information contained in the latest quarterly 

supervisory report filed by the applicant with its appropriate FBA, updated to reflect events 

materially affecting the financial condition of the applicant occurring since the filing of such 

report. 

The convertible preferred stock will have a dividend rate of 9% per year, subject to increase in 

the event certain stockholder approvals are required and not received. Dividends not paid will 

cumulate over the life of the investment, compounding quarterly. 

The convertible preferred stock is convertible into the applicant’s common stock in whole or 

from time to time in part at the conversion price at the option of the applicant at any time, subject 

to the approval of the applicant’s FBA, and convertible at the option of the holder upon specified 

corporate events, including certain sales, mergers or changes of control of the applicant. The 

convertible preferred stock is mandatorily convertible into the applicant’s common stock at the 

conversion price after 7 years. The conversion price is 90% of the average closing price for the 

applicant’s common stock for the 20 trading day period ending February 9, 2009, subject to 

reduction in the event certain stockholder approvals are required and not received and subject to 

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customary anti-dilution adjustments. Upon any conversion, the issuer will also pay any accrued 

and unpaid dividends at its option in either cash or shares of common stock. 

The convertible preferred stock may be redeemed, subject to the approval of the applicant’s 

FBA, in whole or in part at any time solely with the proceeds of an issuance of common stock for 

cash which results in aggregate gross proceeds to the applicant of not less than 25% of the issue 

price of the convertible preferred, or additions to retained earnings. Convertible preferred shares 

redeemed within the first two years of issuance will be redeemable at par, plus any accrued and 

unpaid dividends. After the first two years of issuance, convertible preferred shares will be 

redeemable at the greater of par plus accrued and unpaid dividends and the as-converted value. 

In all cases, the Treasury also must obtain warrants for common stock of the applicant. The 

terms of the warrants are explained in the Treasury agreements that will be available on the 

Treasury’s web site. A summary term sheet is currently available on Treasury’s website. In 

general, the warrants must be exercisable for an amount of common stock of the applicant 

equivalent in value to 20% of the amount of the capital purchased by the Treasury from the 

applicant under the CAP, calculated based on the conversion price, and must have an exercise 

price equal to the conversion price, subject to reduction in the event certain stockholder 

approvals are required and not received and subject to customary anti-dilution adjustments.

Other Information

The applicant must identify and describe any mergers, acquisitions, or other capital raisings that 

are currently pending or are under negotiation and the expected consummation date. 

Confidentiality

Any applicant desiring confidential treatment of specific portions of the application must submit 

a request in writing with the application. The request must discuss the justification for the 

requested treatment. The applicant's reasons for requesting confidentiality should specifically 

demonstrate the harm (for example, loss of competitive position, invasion of privacy) that would 

result from public release of information (5 U.S.C. 552). 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." The applicant should follow the same procedure when requesting confidential 

treatment for the subsequent filing of supplemental information to the application. 

The applicant should contact the appropriate regulatory agency for specific instructions 

regarding requests for confidential treatment. The appropriate regulatory agency will determine 

whether the information will be treated as confidential and will advise the applicant of any 

decision to make available to the public information labeled as "Confidential." 
 

Application for TARP Capital Assistance Program (CAP)

Please complete the following information and follow the submission instructions as described 

on your Federal banking agency’s website. In addition to completing the information on this 

form, please provide a description of any mergers, acquisitions, or other capital raisings that are 

currently pending or are under negotiation and the expected consummation date (no longer than 

1 page). 

In the event the applicant files an application with the appropriate Federal banking agency 

prior to the availability of the investment agreement, the applicant must file an amended 

application which includes updated responses to any items in the application that required prior 

review of the investment agreement. 

Institution Name: 

Address of Institution: 

Primary Contact Name: 

Primary Contact Phone Number: 

Primary Contact Fax Number: 

Primary Contact Email Address: 

Secondary Contact Name: 

Secondary Contact Phone Number: 

Secondary Contact Fax Number: 

Secondary Contact Email Address: 

OMB Control No. 1505-0213 

An agency is not authorized to conduct, and persons are not required to respond to, an information collection request 

unless it displays a valid control number. 
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RSSD, Holding Company Docket 

Number and/or FDIC Certificate 

Number, as Relevant: 

Amount of Convertible Preferred 

Shares Requested: 

Indicate whether the Institution will 

“exchange” Preferred Shares under 

the Capital Purchase Program and, 

if applicable, the Targeted 

Investment Program for Convertible 

Preferred Shares and if so, the 

amount to be exchanged: 

Amount of Institution’s Authorized 

but Unissued Preferred Stock 

Available for Purchase: 

Amount of Institution’s Authorized 

but Unissued Common Stock: 

Amount of Total Risk-Weighted 

Assets as Reported on the Holding 

Company’s or Applicable 

Institution’s Most Recent FR-Y9, 

Call Report, or TFR, as Relevant: 

Institution has Reviewed the 

Investment Agreements and Related 

Documentation on Treasury’s 

Website (Yes/No): 

Describe any Condition, Including a 

Representation or Warranty, 

Contained in the Investment 

Agreements and Related 

Documentation the Institution 

Believes it Cannot Comply With by 

May 25, 2009 and Provide a 

Timeline for Reaching 

Compliance1

: 

 

1

 May be provided as an attachment, no longer than 1 page 
Type of Company2

: 

Signature of Chief Executive 

Officer (or Authorized Designee): 

Date of Signature: 

 

OMB Control No. 1505-0213 

An agency is not authorized to conduct, and persons are not required to respond to, an information collection request 

unless it displays a valid control number. 

2

 Publicly Traded Stock Company; Stock Company Without Publicly Traded Shares; Other (please specify)