Code of Massachusetts Regulations › 209 CMR - DIVISION OF BANKS AND LOAN AGENCIES › Title 209 CMR 33.00 - Conversion By Co-operative Banks And Savings Banks From Mutual To Stock Form › Section 33.08 - Pricing and Sale of Securities

Current through Register 1525, July 5, 2024
(1) Distribution
			 of preliminary subscription and direct community offering circulars will not be
			 permitted; such circulars must be in final form only. Any preliminary offering
			 circular or prospectus for a public offering of unsubscribed shares which has
			 been filed with the commissioner may be distributed in connection with such
			 offering. No such preliminary offering circular or prospectus shall be
			 distributed without the following legend printed in red on the cover thereof:
			 "This Offering Circular has been filed with the Commissioner of Banks of the
			 Commonwealth of Massachusetts, but has not been authorized for use in final
			 form. Information contained herein is subject to completion or amendment. The
			 securities covered hereby may not be sold nor may offers to buy be accepted
			 prior to the time the Offering Circular is declared effective by the
			 Commissioner of Banks of the Commonwealth of Massachusetts. This Offering
			 Circular shall not consitute an offer to sell or the solicitation of an offer
			 to buy, nor shall there be any sale of these securities in any jurisdiction in
			 which such offer, solicitation or sale would be unlawful prior to registration
			 or qualification under the securities laws of any such jurisdiction." In
			 addition, there will be printed on the cover of this preliminary public
			 offering circular in bold print "Preliminary Offering Circular" along with its
			 date of publication.
(2) Each final
			 prospect us or offering circular as well as any advertisement, order form or
			 instructions prepared by the converting bank and used by it to solicit and
			 effectuate an offer to purchase shares of capital stock in the subscription,
			 direct community and public offerings shall be submitted to the commissioner
			 for his approval. Each preliminary or final prospectus or offering circular
			 shall include a statement that the shares of capital stock are not subject to
			 deposit insurance. No final prospectus or offering circular may be distributed
			 unless approved and declared effective by the commissioner.
(3)
(a) In
			 considering the pricing information for the proposed stock issue, the
			 commissioner will apply the following guide lines :
1. The appraisal report shall be prepared by
			 persons independent of the applicant, experienced and expert in the area of
			 corporate appraisals, and acceptable to the commissioner;
2. The appraisal report shall contain data
			 that are sufficient to support the conclusions reached therein;
3. The appraisal report shall contain a
			 complete and detailed description of the appraisal methodology employed;
			 and
4. To the extent that the
			 appraisal is based on a capitalization of the pro forma income of the converted
			 savings bank, the appraisal report must indicate the basis for determination of
			 the income to be derived from the proceeds of the sale of stock and demonstrate
			 the appropriateness of the earnings multiple used, including assumptions made
			 as to future earnings growth. To the extent that the appraisal is based on a
			 comparison of the proposed capital stock of the applicant with the outstanding
			 capital stock of existing banks, the appraisal report must demonstrate the
			 appropriate comparability of the form and substance of such outstanding capital
			 stock and the appropriate comparability of such existing stock form banks in
			 terms of such factors as size, market area, competitive conditions, profit
			 history, and expected future earnings .
5. The appraisal report shall be updated and
			 filed with the commissioner prior to the pricing of the capital stock offered
			 in the conversion.