[Federal Register Volume 80, Number 72 (Wednesday, April 15, 2015)]
[Rules and Regulations]
[Pages 20153-20158]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-08513]


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FEDERAL RESERVE SYSTEM

12 CFR Parts 217, 225, and 238

[Docket No. R-1509]
RIN 1700-AE 30


Regulations Q, Y, and LL: Small Bank Holding Company Policy 
Statement; Capital Adequacy of Board-Regulated Institutions; Bank 
Holding Companies; Savings and Loan Holding Companies

AGENCY: Board of Governors of the Federal Reserve System (Board).

ACTION: Final rule.

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SUMMARY: The Board is adopting final amendments (Final Rule) to the 
Small

[[Page 20154]]

Bank Holding Company Policy Statement (Regulation Y, Appendix C) 
(Policy Statement) that: raise from $500 million to $1 billion the 
asset threshold to qualify for the Policy Statement; and expand the 
scope of companies eligible under the Policy Statement to include 
savings and loan holding companies. The Board is also adopting final 
conforming revisions to Regulation Y and Regulation LL, the Board's 
regulations governing the operations and activities of bank holding 
companies and savings and loan holding companies, respectively, and 
Regulation Q, the Board's regulatory capital rules.

DATES: The final rule is effective May 15, 2015.

FOR FURTHER INFORMATION CONTACT: Constance M. Horsley, Assistant 
Director, (202) 452-5239, Cynthia Ayouch, Manager, (202) 452-2204, 
Thomas Boemio, Manager, (202) 452-2982, Douglas Carpenter, Senior 
Supervisory Financial Analyst, (202) 452-2205, Page Conkling, 
Supervisory Financial Analyst, (202) 912-4647, or Noah Cuttler, Senior 
Financial Analyst, (202) 912-4678, Division of Banking Supervision and 
Regulation; Laurie Schaffer, Associate General Counsel, (202) 452-2272, 
or Tate Wilson, Counsel, (202) 452-3696, Legal Division; Board of 
Governors of the Federal Reserve System, 20th and C Streets NW., 
Washington, DC 20551.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background
II. Overview of Comments
III. Summary of the Final Rule
IV. Administrative Law Matters
    A. Regulatory Flexibility Act
    B. Paperwork Reduction Act
    C. Plain Language

I. Background

    On February 3, 2015, the Board invited comment on a proposed rule 
(Proposed Rule) \1\ to implement Public Law 113-250 (the Act).\2\ The 
Proposed Rule proposed increasing the amount of assets qualifying 
holding companies may have, expanding the application of the Policy 
Statement to qualifying savings and loan holding companies, revising 
the applicability of the Board's regulatory capital rules \3\ to 
exclude savings and loan holding companies subject to the Policy 
Statement, and revising certain reporting requirements. Specifically, 
the Proposed Rule would allow bank holding companies and savings and 
loan holding companies with less than $1 billion in total consolidated 
assets to qualify under the Policy Statement, provided the holding 
companies also comply with three qualitative requirements (Qualitative 
Requirements). Previously, only bank holding companies with less than 
$500 million in total consolidated assets that complied with the 
Qualitative Requirements could qualify under the Policy Statement. With 
the exception of the proposed changes to the reporting requirements, 
the Board is adopting as final the Proposed Rule without changes.\4\
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    \1\ 80 FR 5694 (February 3, 2015) (Proposed Rule).
    \2\ Pub. L. 113-250 (December 18, 2014) (Pub. L. 113-250). The 
Act was enacted on December 18, 2014, and became immediately 
effective.
    \3\ 12 CFR part 217 (Regulation Q).
    \4\ The comment period for the proposed changes to the reporting 
requirements in the Proposed Rule runs through April 6, 2015. Once 
the comment period for the proposed reporting requirements closes, 
the Board will consider any and all reporting and Paperwork 
Reduction Act-related comments before finalizing any reporting 
changes.
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    The Board issued the Policy Statement in 1980 to facilitate the 
transfer of ownership of small community-based banks in a manner 
consistent with bank safety and soundness. The Board has generally 
discouraged the use of debt by bank holding companies to finance the 
acquisition of banks or other companies because high levels of debt can 
impair the ability of the holding company to serve as a source of 
strength to its subsidiary banks. The Board has recognized, however, 
that small bank holding companies have less access to equity financing 
than larger bank holding companies and that the transfer of ownership 
of small banks often requires the use of acquisition debt. Accordingly, 
the Board adopted the Policy Statement to permit the formation and 
expansion of small bank holding companies with debt levels that are 
higher than typically permitted for larger bank holding companies. The 
Policy Statement contains several conditions and restrictions designed 
to ensure that small bank holding companies that operate with the 
higher levels of debt permitted by the Policy Statement do not present 
an undue risk to the safety and soundness of their subsidiary banks.
    Previously, the Policy Statement applied only to bank holding 
companies with pro forma consolidated assets of less than $500 million 
that met the following Qualitative Requirements: (i) Were not engaged 
in significant nonbanking activities either directly or through a 
nonbank subsidiary; (ii) did not conduct significant off-balance sheet 
activities (including securitization and asset management or 
administration) either directly or through a nonbank subsidiary; \5\ 
and (iii) did not have a material amount of debt or equity securities 
outstanding (other than trust preferred securities) that are registered 
with the Securities and Exchange Commission. The Board last raised the 
asset threshold in 2006 when it increased it from $150 million to $500 
million.\6\
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    \5\ The examples provided in the Policy Statement--
securitization and asset management or administration--are not 
exhaustive and serve to highlight off-balance sheet activities that 
may involve substantial risk. Other activities may present similar 
concerns. See also 71 FR 9897, 9899, fn. 2 (February 28, 2006) (2006 
Final Rule).
    \6\ See 2006 Final Rule.
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    Under the Policy Statement, holding companies that meet the 
Qualitative Requirements may use debt to finance up to 75 percent of 
the purchase price of an acquisition (that is, they may have a debt-to-
equity ratio of up to 3.0:1), but are subject to a number of ongoing 
requirements. The principal ongoing requirements are that a qualifying 
holding company: (i) Reduce its parent company debt in such a manner 
that all debt is retired within 25 years of being incurred; (ii) reduce 
its debt-to equity ratio to .30:1 or less within 12 years of the debt 
being incurred; (iii) ensure that each of its subsidiary insured 
depository institutions is well capitalized; and (iv) refrain from 
paying dividends until such time as it reduces its debt-to-equity ratio 
to 1.0:1 or less. The Policy Statement also specifically provides that 
a qualifying bank holding company may not use the expedited procedures 
for obtaining approval of acquisition proposals or obtaining a waiver 
of the stock redemption filing requirements applicable to bank holding 
companies under the Board's Regulation Y (12 CFR 225.4(b), 225.14, and 
225.23) unless the bank holding company has a pro forma debt-to-equity 
ratio of 1.0:1 or less.

II. Overview of Comments

    The Board received 11 comments on the Proposed Rule. Comments were 
submitted by financial trade associations, individuals associated with 
financial institutions, and a law firm that represents bank holding 
companies and savings and loan holding companies. While each commenter 
expressed general support for the Proposed Rule, some commenters 
recommended revisions to the Proposed Rule. For instance, one commenter 
expressed support for raising the asset threshold higher than $1 
billion. Another commenter expressed support for the nonbanking and 
off-balance sheet activity requirements but suggested that the Board 
consider rescinding or revising

[[Page 20155]]

the requirement relating to outstanding debt or equity securities 
registered with the SEC. The Board's responses to these comments are 
discussed below.

III. Summary of the Final Rule

Increase in Amount of Qualifying Assets

    Under the Final Rule, a holding company with less than $1 billion 
in total consolidated assets may qualify under the Policy Statement, 
provided it also complies with the Qualitative Requirements. This new 
asset limit is set by statute.\7\ As noted above, commenters generally 
supported the Board's proposal to increase the scope of the Policy 
Statement by allowing firms with less than $1 billion in total assets 
to qualify. One commenter suggested that the threshold be increased to 
$5 billion. The Act directs the Board to increase the threshold to $1 
billion, and section 171 of the Dodd-Frank Wall Street Reform and 
Consumer Protection Act (Dodd-Frank Act) \8\ effectively prevents the 
threshold from being raised any higher.
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    \7\ Public Law 113-250.
    \8\ 12 U.S.C. 5371, as amended.
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Policy Statement's Application to Savings and Loan Holding Companies

    The Act also directs the Board to propose revisions to the Policy 
Statement that would extend its application to certain savings and loan 
holding companies. Consistent with the Proposed Rule, the Final Rule 
applies the revised Policy Statement to savings and loan holding 
companies by amending Appendix C to 12 CFR part 225 and adding new 
section 238.9 to Subpart A of Regulation LL.
    As explained in the Proposed Rule, this change requires other 
modifications to the Policy Statement to take into account the status 
of savings associations under the Bank Holding Company Act of 1956, as 
amended (BHC Act). The first Qualitative Requirement uses the terms 
``nonbanking activities'' and ``nonbank subsidiary'' to refer to the 
activities of a bank holding company. Under the BHC Act, however, 
control of a savings association by a bank holding company is 
considered a nonbanking activity.\9\ Because savings and loan holding 
companies control savings associations, all activities of savings and 
loan holding companies, including the control of savings associations 
would be considered nonbanking activities under the Policy Statement.
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    \9\ See 12 U.S.C. 1841(c)(2)(B), 1841(j), and 1843(i)(1).
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    This outcome would be inconsistent with Congressional intent to 
apply the Policy Statement to savings and loan holding companies.\10\ 
The Board therefore will treat subsidiary savings associations of 
savings and loan holding companies as if they were banks for purposes 
of applying the Policy Statement.
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    \10\ See, e.g., Pub. L. 113-250, sec. 2(b).
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    As is the case with bank holding companies, whether a savings and 
loan holding company engages in ``significant'' nonbanking activities 
will depend on the scope of the activities of the savings and loan 
holding company, the nature and level of risk of the activities, the 
condition of the savings and loan holding company, and other criteria 
as appropriate.\11\
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    \11\ For purposes of applying the Policy Statement to savings 
and loan holding companies, the term ``nonbank subsidiary'' as used 
in the Policy Statement refers to a subsidiary of a savings and loan 
holding company other than a savings association or a subsidiary of 
a savings association.
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    Consistent with the Policy Statement's provisions for bank holding 
companies, the Board retains the right to exclude any savings and loan 
holding company, regardless of size, from the Policy Statement if the 
Board determines that such action is warranted for supervisory 
purposes.

Policy Statement's Qualitative Requirements

    The Final Rule retains the Qualitative Requirements without change. 
One commenter noted that the Qualitative Requirements concerning 
nonbanking and off-balance sheet activities adequately cover bank 
holding companies and savings and loan holding companies that meet the 
size threshold but have unusually complex activities at the holding 
company level. None of the commenters expressed concerns related to the 
nonbanking or off-balance sheet activities requirements. Consistent 
with the Board's previously-issued guidance on these two Qualitative 
Requirements,\12\ whether a bank holding company or savings and loan 
holding company engages in significant nonbanking or off-balance sheet 
activities will continue to depend on a consideration of the scope of 
the activities, the nature and level of risk of the activities, the 
condition of the holding company and its subsidiary depository 
institution, and other criteria as appropriate. As previously stated, 
determinations of significance are made on a case-by-case basis, and 
relatively few bank holding companies or savings and loan holding 
companies are likely to be excluded from the Policy Statement due to 
the Qualitative Requirements concerning nonbanking and off-balance 
sheet activities.\13\
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    \12\ See Proposed Rule, 80 FR 5695; 2006 Final Rule, 71 FR 9899-
9900.
    \13\ 2006 Final Rule, 71 FR 9900.
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    One commenter urged the Board to rescind the Qualitative 
Requirement that would disqualify a bank holding company or savings and 
loan holding company with a material amount of outstanding SEC-
registered debt or equity securities. In the alternative, the commenter 
suggested the Board clarify whether bank holding companies and savings 
and loan holding companies that meet the asset size threshold and would 
otherwise qualify under the Policy Statement but for having SEC-
registered debt or equity could qualify under the Policy Statement.
    The exclusion from the Policy Statement of any bank holding company 
that has a material amount of SEC-registered debt or equity securities 
reflected the view that SEC registrants typically exhibited a degree of 
complexity of operations and access to multiple funding sources that 
warranted exclusion from the Policy Statement.\14\ Determinations of 
materiality are made on a case-by-case basis in order to assess the 
complexity of a firm. In considering whether a savings and loan holding 
company or bank holding company has a material amount of SEC-registered 
debt or equity securities outstanding that contributes to its 
complexity (other than trust preferred securities), the Board may 
consider, among other factors: The number and type of classes and 
series of stock issued; the holding company's market capitalization; 
the number of outstanding shares; the average trading volume; the 
holding company's history of issuing equity and debt securities, 
including whether the entity has issued any other securities that are 
not registered with the SEC (e.g., privately-placed securities); the 
nature and distribution of ownership; whether the securities are listed 
on a national exchange; whether the holding company qualifies as a 
``smaller reporting company'' pursuant to the SEC's regulations and 
related interpretations; and the amount, type, and terms of any debt 
instruments issued by the entity. While the Policy Statement has 
included the ``materiality'' standard since 2006, as a general matter, 
application of this standard has not resulted in many bank holding 
companies being excluded from the Policy Statement. After considering 
the concerns raised by the commenter, the Board is adopting the 
Qualitative Requirements unchanged.
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    \14\ 2006 Final Rule, 71 FR 9899.

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[[Page 20156]]

Regulation Q Change

    When the Board proposed the Proposed Rule, the Board separately 
revised Regulation Q, 12 CFR part 217, through issuance of an interim 
final rule (Interim Final Rule), to exclude a qualifying savings and 
loan holding company from consolidated regulatory capital 
requirements.\15\ The Interim Final Rule gave effect to the Act, which 
immediately excepted savings and loan holding companies that complied 
with the Policy Statement then in effect from the provisions of section 
171 of the Dodd-Frank Act.\16\ At that time, the Policy Statement 
applied to firms with less than $500 million in total consolidated 
assets so the Interim Final Rule contained the same limit. In the 
Proposed Rule, the Board proposed further revisions to Regulation Q 
that would expand the scope of the exclusion for savings and loan 
holding companies to firms with less than $1 billion in total 
consolidated assets that also meet the Qualitative Requirements. The 
proposed revisions to Regulation Q in the Proposed Rule would supersede 
the changes to Regulation Q from the Interim Final Rule. The Board did 
not receive any comments concerning the proposed change to Regulation 
Q. The Board is adopting as final the proposed revisions to Regulation 
Q that conform it to reflect the revised Policy Statement.
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    \15\ 80 FR 5666 (February 3, 2015).
    \16\ See Pub. L. 113-250.
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Conforming Amendments

    A number of filing and other provisions in Regulations Y and LL are 
triggered by the asset size established in the Policy Statement. The 
Board is adopting as final the proposed changes that enable qualifying 
small bank holding companies and savings and loan holding companies to 
take advantage of the streamlined informational, notice, and other 
regulatory requirements. These technical and conforming amendments 
provide relief to most bank holding companies and savings and loan 
holding companies with less than $1 billion of total consolidated 
assets. The Final Rule includes the following technical and conforming 
amendments:
    <bullet> In section 217.1(c)(1)(iii), Regulation Q (12 CFR part 
217) excludes savings and loan holding companies that are subject to 
the Policy Statement through operation of section 238.9 of the Board's 
Regulation LL (12 CFR part 238).
    <bullet> In section 225.2(r), footnote 2, the footnote describing 
the application of the definition of ``well-capitalized'' in the 
Board's Regulation Y (12 CFR part 225) applies to entities with less 
than $1 billion of total assets.
    <bullet> In section 225.4(b)(2)(iii), different pro forma financial 
information is required of smaller bank holding companies with less 
than $1 billion in total assets than for larger bank holding companies 
under section 225.4(b)(1) of the Board's Regulation Y.
    <bullet> In section 225.14(a)(1)(v), different pro forma financial 
information is required of smaller bank holding companies with less 
than $1 billion in total assets than for larger bank holding companies 
under section 225.14 of the Board's Regulation Y.
    <bullet> In section 225.17(a)(6), footnote 6, a bank holding 
company with less than $1 billion in assets can satisfy the debt 
requirement if it complies with the Policy Statement.
    <bullet> In section 225.23(a)(1)(iii), different pro forma 
financial information is required of smaller bank holding companies 
with less than $1 billion in total assets than for larger bank holding 
companies under section 225.23 of the Board's Regulation Y.

IV. Administrative Law Matters

A. Regulatory Flexibility Act Analysis

    The Board is providing a final regulatory flexibility analysis with 
respect to the Final Rule. As discussed above, the Final Rule reduces 
regulatory burden on small entities by excluding many bank holding 
companies and savings and loan holding companies with total 
consolidated assets of less than $1 billion that meet the Qualitative 
Requirements from the application of Regulation Q.
    The Regulatory Flexibility Act, 5 U.S.C. 601 et seq., generally 
requires that an agency provide a final regulatory flexibility analysis 
in connection with a final rule. Under regulations issued by the Small 
Business Administration, a small bank holding company, bank, or savings 
and loan holding company is defined as having assets of $550 million or 
less (collectively, small banking organizations).\17\ As of December 
31, 2014, there were approximately 3,862 small bank holding companies 
and 275 small savings and loan holding companies.
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    \17\ See 13 CFR 121.201. Effective July 14, 2014, the Small 
Business Administration revised the size standards for banking 
organizations to $550 million in assets from $500 million in assets. 
79 FR 33647 (June 12, 2014).
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    The Board received no comments from the public or from the Chief 
Counsel for Advocacy of the Small Business Administration in response 
to the initial regulatory flexibility analysis provided with the notice 
of proposed rulemaking. Thus, no issues were raised in public comments 
related to the Board's initial regulatory flexibility act analysis and 
no changes are being made in response to such comments.
    The Final Rule impacts small bank holding companies and small 
savings and loan holding companies with total consolidated assets of 
$500 to $550 million that meet the Qualitative Requirements by 
providing an exclusion for these companies from Regulation Q. The Board 
believes that most affected small banking organizations already hold 
more capital than is required under Regulation Q, so the burden 
reduction from the exclusion from Regulation Q is primarily related to 
compliance and systems necessary to comply with Regulation Q. In 
addition, affected small bank holding companies will now be able to 
take advantage of the applications processing procedures provided to 
qualifying companies under the Policy Statement.
    There are no significant alternatives to the Final Rule that have 
less economic impact on small banking organizations, and the Final Rule 
significantly reduces burden on nearly all small banking organizations.

B. Paperwork Reduction Act

    At this time, the Board is not adopting as final the changes to 
reporting requirements in the Proposed Rule. The comment period for the 
proposed changes to the reporting requirements in the Proposed Rule 
runs through April 6, 2015. Once the comment period for the proposed 
reporting requirements closes, the Board will consider any and all 
reporting and Paperwork Reduction Act-related comments before 
finalizing any reporting changes.

C. Plain Language

    Section 722 of the Gramm-Leach-Bliley Act (Pub. L. 106-102, 113 
Stat. 1338, 1471, 12 U.S.C. 4809) requires the Federal banking agencies 
to use ``plain language'' in all proposed and final rules published 
after January 1, 2000. In light of this requirement, the Board has 
sought to present the Final Rule in a simple and straightforward 
manner. The Board sought to present the Proposed Rule in a simple and 
straightforward manner and solicited comment on how to make the 
Proposed Rule easier to understand. No comments were received on the 
use of plain language.

List of Subjects

12 CFR Part 217

    Administrative practice and procedure, Banks, banking, Capital, 
Federal Reserve System, Holding

[[Page 20157]]

companies, Reporting and recordkeeping requirements, Securities.

12 CFR Part 225

    Administrative practice and procedure, Banks, banking, Federal 
Reserve System, Holding companies, Reporting and recordkeeping 
requirements.

12 CFR Part 238

    Administrative practice and procedure, Banks, banking, Federal 
Reserve System, Holding companies, Reporting and recordkeeping 
requirements.

Federal Reserve System

12 CFR CHAPTER II

Authority and Issuance

    For the reasons set forth in the preamble, chapter II of title 12 
of the Code of Federal Regulations is amended as set forth below:

PART 217--CAPITAL ADEQUACY OF BANK HOLDING COMPANIES, SAVINGS AND 
LOAN HOLDING COMPANIES, AND STATE MEMBER BANKS (REGULATION Q)

0
1. The authority citation for part 217 continues to read as follows:

    Authority: 12 U.S.C. 248(a), 321-338a, 481-486, 1462a, 1467a, 
1818, 1828, 1831n, 1831o, 1831p-l, 1831w, 1835, 1844(b), 1851, 3904, 
3906-3909, 4808, 5365, 5368, 5371.


0
2. In Sec.  217.1, revise paragraph (c)(1)(iii) to read as follows:


Sec.  217.1  Purpose, applicability, reservations of authority, and 
timing.

* * * * *
    (c) * * *
    (1) * * *
    (iii) A covered savings and loan holding company domiciled in the 
United States, other than a savings and loan holding company that has 
total consolidated assets of less than $1 billion and meets the 
requirements of 12 CFR part 225, appendix C, as if the savings and loan 
holding company were a bank holding company and the savings association 
were a bank. For purposes of compliance with the capital adequacy 
requirements and calculations in this part, savings and loan holding 
companies that do not file the FR Y-9C should follow the instructions 
to the FR Y-9C.
* * * * *

PART 225--BANK HOLDING COMPANIES AND CHANGE IN BANK CONTROL 
(REGULATION Y)

0
3. The authority citation for part 225 continues to read as follows:

    Authority: 12 U.S.C. 1817(j)(13), 1818, 1828(o), 1831i, 1831p-1, 
1843(c)(8), 1844(b), 1972(1), 3106, 3108, 3310, 3331-3351, 3906, 
3907, and 3909; 15 U.S.C. 1681s, 1681w, 6801 and 6805.


0
4. In Sec.  225.2, paragraph (r), revise footnote 2 to read as follows:


Sec.  225.2  Definitions.

* * * * *
    (r) * * *

Footnote 2: For purposes of this subpart and subparts B and C of 
this part, a bank holding company with consolidated assets of less 
than $1 billion that is subject to the Small Bank Holding Company 
Policy Statement in appendix C of this part will be deemed to be 
``well-capitalized'' if the bank holding company meets the 
requirements for expedited/waived processing in appendix C.


0
5. In Sec.  225.4, revise paragraph (b)(2)(iii) to read as follows:


Sec.  225.4  Corporate practices.

* * * * *
    (b) * * *
    (2) * * *
    (iii)(A) If the bank holding company has consolidated assets of $1 
billion or more, consolidated pro forma risk-based capital and leverage 
ratio calculations for the bank holding company as of the most recent 
quarter, and, if the redemption is to be debt funded, a parent-only pro 
forma balance sheet as of the most recent quarter; or
    (B) If the bank holding company has consolidated assets of less 
than $1 billion, a pro forma parent-only balance sheet as of the most 
recent quarter, and, if the redemption is to be debt funded, one-year 
income statement and cash flow projections.
* * * * *

0
6. In Sec.  225.14, revise paragraph (a)(1)(v) to read as follows:


Sec.  225.14  Expedited action for certain bank acquisitions by well-
run bank holding companies.

* * * * *
    (a) * * *
    (1) * * *
    (v)(A) If the bank holding company has consolidated assets of $1 
billion or more, an abbreviated consolidated pro forma balance sheet as 
of the most recent quarter showing credit and debit adjustments that 
reflect the proposed transaction, consolidated pro forma risk-based 
capital ratios for the acquiring bank holding company as of the most 
recent quarter, and a description of the purchase price and the terms 
and sources of funding for the transaction;
    (B) If the bank holding company has consolidated assets of less 
than $1 billion, a pro forma parent-only balance sheet as of the most 
recent quarter showing credit and debit adjustments that reflect the 
proposed transaction, and a description of the purchase price, the 
terms and sources of funding for the transaction, and the sources and 
schedule for retiring any debt incurred in the transaction;
* * * * *

0
7. In Sec.  225.17, in paragraph (a)(6), revise footnote 6 to read as 
follows:


Sec.  225.17  Notice procedure for one-bank holding company formations.

* * * * *
    (a) * * *
    (6) * * *

Footnote 6--For a banking organization with consolidated assets, on 
a pro forma basis, of less than $1 billion (other than a banking 
organization that will control a de novo bank), this requirement is 
satisfied if the proposal complies with the Board's Small Bank 
Holding Company Policy Statement (appendix C of this part).


0
8. In Sec.  225.23, revise paragraph (a)(1)(iii) to read as follows:


Sec.  225.23  Expedited action for certain nonbanking proposals by 
well-run bank holding companies.

* * * * *
    (a) * * *
    (1) * * *
    (iii) If the proposal involves an acquisition of a going concern:
    (A) If the bank holding company has consolidated assets of $1 
billion or more, an abbreviated consolidated pro forma balance sheet 
for the acquiring bank holding company as of the most recent quarter 
showing credit and debit adjustments that reflect the proposed 
transaction, consolidated pro forma risk-based capital ratios for the 
acquiring bank holding company as of the most recent quarter, a 
description of the purchase price and the terms and sources of funding 
for the transaction, and the total revenue and net income of the 
company to be acquired;
    (B) If the bank holding company has consolidated assets of less 
than $1 billion, a pro forma parent-only balance sheet as of the most 
recent quarter showing credit and debit adjustments that reflect the 
proposed transaction, a description of the purchase price and the terms 
and sources of funding for the transaction and the sources and schedule 
for retiring any debt incurred in the transaction, and the total 
assets, off-balance sheet items, revenue and net income of the company 
to be acquired;
    (C) For each insured depository institution whose Tier 1 capital, 
total capital, total assets or risk-weighted assets change as a result 
of the transaction, the total risk-weighted

[[Page 20158]]

assets, total assets, Tier 1 capital and total capital of the 
institution on a pro forma basis;
* * * * *

0
9. In appendix C to part 225, revise the heading and, under section 1, 
revise the first undesignated paragraph to read as follows:

Appendix C to Part 225--Small Bank Holding Company and Savings and Loan 
Holding Company Policy Statement

* * * * *

1. Applicability of Policy Statement

    This policy statement applies only to bank holding companies 
with pro forma consolidated assets of less than $1 billion that (i) 
are not engaged in significant nonbanking activities either directly 
or through a nonbank subsidiary; (ii) do not conduct significant 
off-balance sheet activities (including securitization and asset 
management or administration) either directly or through a nonbank 
subsidiary; and (iii) do not have a material amount of debt or 
equity securities outstanding (other than trust preferred 
securities) that are registered with the Securities and Exchange 
Commission. The Board may in its discretion exclude any bank holding 
company, regardless of asset size, from the policy statement if such 
action is warranted for supervisory purposes.\1\ With the exception 
of section 4 (Additional Application Requirements for Expedited/
Waived Processing), the policy statement applies to savings and loan 
holding companies as if they were bank holding companies.
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    \1\ Footnote 1: [Reserved]
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* * * * *

PART 238--SAVINGS AND LOAN HOLDING COMPANIES (REGULATION LL)

0
10. The authority citation for part 238 continues to read as follows:

    Authority: 5 U.S.C. 552, 559; 12 U.S.C. 1462, 1462a, 1463, 1464, 
1467, 1467a, 1468, 1813, 1817, 1829e, 1831i, 1972; 15 U.S.C. 78l.

0
11. Add Sec.  238.9 to subpart A to read as follows:


Sec.  238.9  Small Bank Holding Company Policy Statement.

    (a) The Board's Small Bank Holding Company Policy Statement (12 CFR 
part 225, appendix C) (Policy Statement) applies to savings and loan 
holding companies as if they were bank holding companies. To qualify or 
rely on the Policy Statement, savings and loan holding companies must 
meet all qualifying requirements in the Policy Statement as if they 
were a bank holding company. For purposes of applying the Policy 
Statement, the term ``nonbank subsidiary'' as used in the Policy 
Statement refers to a subsidiary of a savings and loan holding company 
other than a savings association or a subsidiary of a savings 
association.
    (b) The Board may exclude any savings and loan holding company, 
regardless of asset size, from the Policy Statement under paragraph (a) 
of this section if the Board determines that such action is warranted 
for supervisory purposes.

    By order of the Board of Governors of the Federal Reserve 
System, April 9, 2015.
Margaret McCloskey Shanks,
Deputy Secretary of the Board.
[FR Doc. 2015-08513 Filed 4-14-15; 8:45 am]
BILLING CODE 6210-01-P