FCSB requests the FDIC's consent to engage in the acquisition and retention of unlisted bank holding company stock indirectly through a wholly-owned subsidiary. The activity of making investments in unlisted bank holding company stock may not be a permissible activity for a national bank or a subsidiary of a national bank. Consent may not be granted unless the bank is in compliance with applicable capital standards and the FDIC determines that the activity poses no significant risk to the deposit insurance fund. The purchase of any equity stock entails risks related to the loss of investment, price volatility, and lack of market liquidity. However, intrinsic to the corporate charter of a bank holding company are factors that lessen investment risk.
Bank holding companies are subject to a comprehensive and stringent regulatory structure.
As such, they are required to obtain government approval to operate and to maintain regulatory minimum capitalization. They are also subject to periodic supervisory examination and are subject to enforcement jurisdiction. The primary, and frequently only, asset of a single or multiple-bank holding company is the subsidiary bank or banks. In such cases the risk inherent from investing in the bank holding company stock is directly reliant on the financial condition of the subsidiary bank. However, bank holding companies may be invested in entities other than banks, which are authorized to engage in activities not permissible for a bank.