Form 1680, 1681, 1682, 1680, 1681, 1682, Application for Conversion

Appendix A
Office of Thrift Supervision

FORM AC
APPLICATION FOR CONVERSION
Paperwork Reduction Act Statement
The Office of Thrift Supervision will use this information to provide OTS with all
necessary information to evaluate the application for conversion to meet all agency safety
and soundness requirements. See Part 563b.
Public reporting burden for this collection of information is estimated to average 299
hours if not creating a foundation and 309 hours if creating a foundation, per response,
including the time for reviewing instructions and completing and reviewing the collection
of information. If a valid OMB Control Number does not appear on this form, you are
not required to complete this form. Send comments on these information collections to
Information Collection Comments, Attention: 1550-0014, by e-mail to
infocollection.comments@ots.treas.gov; by facsimile transmission to (202) 906-6518; or
by mail to Chief Counsel's Office, Office of Thrift Supervision, 1700 G Street, NW,
Washington, DC 20552. Send a copy of comments to Alexander T. Hunt, Attention:
1550-0014, by e-mail to ahunt@omb.eop.gov or by mail to him at Office of Information
and Regulatory Affairs, Office of Management and Budget New Executive Office
Building, Washington, DC 20503.

2
OMB No. 1550-0014

Expiration Date:

FORM AC
APPLICATION FOR CONVERSION
[Not to be codified in the Code of Federal Regulations]
OFFICE OF THRIFT SUPERVISION
1700 G Street, NW., Washington, DC 20552
Application for Conversion
________________________________________________________________
(Name of Applicant in charter)
(Docket No.)
________________________________________________________________
(Street address of Applicant)
________________________________________________________________
(City, State and Zip Code)
Index to Items
Item 1. Form of Application
Item 2. Plan of Conversion
Item 3. Proxy Statement and Offering Circular
Item 4. Form of Proxy
Item 5. Additional Information Required for Conversion with a Charitable
Contribution
Item 6. Sequence and Timing of the Plan
Item 7. Record Dates

3
Item 8. Expenses Incident to the Conversion

Item 9. Indemnification
Item 10. Federally Chartered Stock Savings Associations
Exhibits

General Instructions
A. Use of Form AC
You must use Form AC to seek OTS approval of a conversion from the
mutual to the stock form of organization under 12 CFR part 563b. You must
indicate on the cover if you are filing using Regulation S-B.
B. Application of Rules and Regulations
You should follow the general requirements in this section when you prepare
and file this Form AC and all other forms required under 12 CFR part 563b.
(1) Method of preparation. In your applications, you must furnish
information in item-and-answer form, and must include the captions on the
form. You may omit the text of items and instructions. In a proxy statement
or offering circular, you may present the required information in any order
and omit the captions and text of all items and instruction. You must not
present the information in a way that obscures any of the required information
or other information necessary to keep the required information from being
incomplete or misleading. Where an item requires you to provide information
in tabular form, you must provide the information substantially in the tabular
form specified in the item.
You must set out all information in the plan of conversion, proxy statement or
offering circular under appropriate headings that reasonably indicate the
principal subject matter. Except for financial statements and other tabular
data, you must present all information in reasonably short paragraphs or
sections. You must set out financial statements, including interim financial
statements, in comparative form, and must include all notes and the
accountants' certificate or certificates. You must follow 12 CFR 563c.1,

4

which governs the certification, form, and content of financial statements,
including the basis of consolidation.
In a proxy statement or offering circular, you must present all information in
a clearly understandable format. The reader should not have to refer to the
OTS form or 12 CFR part 563b to understand the document. You must
include a reasonably detailed table of contents in each proxy statement and
offering circular.
In every application, you must include a cross-reference sheet showing where
the responses to each item of the appropriate form are located in the proxy
statement and offering circular. In the cross-reference sheet, you must state
where any item is inapplicable, or where you omitted an answer because it
was no.
(2) Additional information. In addition to the information required under 12
CFR part 563b, you must include any material information necessary to make
the required statements, in the light of the circumstances under which you
have made them, not misleading.
(3) Information unknown or not reasonably available. You must provide
information to the extent you know the information or it is reasonably
available to you. You may omit any required information that you do not
know or is not reasonably available to you. You must explain why such
information is not known or reasonably available to you. Information is not
reasonably available if obtaining it would involve an unreasonable effort or
expense, or if it rests peculiarly within the knowledge of another person who
is not your affiliate. You must provide all information on the subject that you
possess or can acquire without unreasonable effort or expense, together with
the sources of the information.
(4) Incorporation by reference. If an item in an application calls for certain
information and the proxy statement or offering circular does not require you
to include it, you may incorporate the information by reference from any part
of the application, including exhibits, in the answer, or partial answer, to the
item. In a proxy statement or offering circular, you may not incorporate
information by reference unless you attach, summarize, or outline the
document containing the information. To summarize or outline a document,
you must make a brief statement of the most important provisions of the
document. In addition, you may incorporate by reference particular items,
sections, or paragraphs of any exhibit, and your summary or outline may be

5

qualified in its entirety by the reference. In an offering circular, you may
incorporate by reference information from a proxy statement that you have
delivered. You do not need to summarize or outline the information. If you
incorporate material by reference you must clearly identify the material in the
reference. You must expressly state that the specified matter is incorporated
by reference at the particular place in the application where the information is
required. You may not incorporate information by reference if the
incorporation would render the statement incomplete, unclear or confusing.
(5) Signatures Required. The following individuals must manually sign at least
two copies of every application and every amendment to an application that
you file with OTS:
(a) Your duly authorized representative.
(b) Your principal executive officer.
(c) Your principal financial officer.
(d) Your principal accounting officer.
(e) At least two-thirds of your directors.
(6) Consents of persons about to become directors. If you indicate in a proxy
statement or offering circular that a person is about to become a director, and
that person has not signed your application, you must file that person’s written
consent to the application with the appropriate form.
(7) Consents of experts. If you indicate that an accountant, attorney,
investment banker, appraiser, or other professional prepared, reviewed,
passed upon, or certified any part of an application, or any report or valuation
used in connection with the application, you must file the written consent of
that person to use their name in connection with the stated action with the
application. If you quote or summarize any portion of a report of an expert in
any filing under 12 CFR part 563b, you must file a written consent of the
expert that expressly states that the expert consents to the quotation or
summarization. All written consents must be dated and signed manually by
the expert. You must file a list of consents with the application. If the
expert’s report contains his or her consent, you must refer to the report
containing the consent in your list. You must file a new consent for any
accounting amendment.
(8) Date of filing. Your documents are filed as of the date the last OTS office
where they are filed receives them, and you paid any applicable fee.

6

(9) Amendments. You must file all amendments to any application with an
appropriate facing sheet. You must number your amendments consecutively
in the order in which you file them. You must comply with all regulations
applicable to the original application.
Item 1. Form of Application
You must include the following form in your application for approval of the
plan of conversion. You must set out the names and titles of the officers and
directors below their signatures:
The undersigned applies for approval to convert into a stock association. We have
attached a statement of the proposed plan of conversion and other information and
exhibits as required by 12 CFR Part 563b.
In submitting this application, we understand and agree that, if OTS requires further
examinations or appraisals, OTS will conduct or approve the examination or appraisal at
our expense. We will pay the costs as computed by OTS.
At least two-thirds of the board of directors approved the application. By filing this
application, the undersigned officers and directors severally represent that: (1) Each
person read this application; (2) Each person adequately examined and investigated this
application and concluded that this application complies with 12 CFR Part 563b.
Attest:
______________________________________________________________
(Duly Authorized Representative)
(Principal Executive Officer)
______________________________________________________________
(Principal Financial Officer)
(Principal Accounting Officer)
______________________________________________________________
(Director)
(Director)
______________________________________________________________
(Director)
(Director)

(Signatures of at least two-thirds of the Board of Directors)
Item 2. Plan of Conversion
You must furnish the complete written plan that your board of directors

7

adopted for the conversion to the stock form. You must prepare the plan of
conversion in accordance 12 CFR 563b.320 through 563b.395. OTS will
base its approval on the terms of this plan. You must distribute the approved
plan as an attachment to the proxy statement.
Item 3. Proxy Statement and Offering Circular
You must furnish preliminary copies of the proxy statement and offering
circular. You must prepare the proxy statement and offering circular in
accordance with Forms PS and OC, respectively.
Item 4. Form of Proxy
You must furnish preliminary copies of the form of proxy that your
management will distribute to your members.
Item 5. Additional Information Required for Conversion with a
Charitable Contribution
If your conversion application includes a charitable contribution, you must
include the following information in your application:
(a) Your reasons for concluding that the proposed contribution is
reasonable.
(b) The impact of the proposed contribution on the appraised valuation.
(c) A description of the charitable organization.
(d) The exhibits required under Exhibit 9.
Item 6. Sequence and Timing of the Plan
You must describe the expected chronological order of the events for your
conversion. Begin with the filing of this application and end with the sale of
all the stock under the plan. Estimate the timing of any requisite approvals by
state or other regulators other than OTS. Indicate the proposed timing of all
aspects of the subscription offering. If a selling agent will assist in the
community offering, or if an underwriter will offer shares in the public
offering, indicate the proposed timing of all aspects of the community offering

8

and public offering.
Item 7. Record Dates
If the eligibility record date in your plan of conversion is more than one year
before your board of directors adopted the plan of conversion, you must state
why you selected the earlier date.
You must indicate what circumstances may require you to use a supplemental
eligibility record date.
Item 8. Expenses Incident to the Conversion
You must estimate the expense of your conversion in the tabular form
indicated below:
Legal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Postage and Mailing. . . . . . . . . . . . . . . . . . . . .
Printing . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Escrow or Agent Fees . . . . . . . . . . . . . . . . . . .
Underwriting Fees. . . . . . . . . . . . . . . . . . . . . .
Appraisal Fees . . . . . . . . . . . . . . . . . . . . . . . .
Transfer Agent Fees. . . . . . . . . . . . . . . . . . . . .
Auditing and Accounting . . . . . . . . . . . . . . . . .
Proxy Solicitation Fees . . . . . . . . . . . . . . . . . .
Advertising. . . . . . . . . . . . . . . . . . . . . . . . . .
Other Expenses . . . . . . . . . . . . . . . . . . . . . . .
Total. . . . . . . . . . . . . . . . . . . . .

$.....
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Instructions. 1. Expenses that you incur in the conversion must be reasonable.
2. You may exclude salaries and wages of regular employees and officers, if you state
that you excluded these items. You must state solicitation costs by specially engaged
employees or paid solicitors under paragraph (b) of item 3 of Form PS under “Proxy
Solicitation Fees" in this item.
3. You may not include any category of expense exceeding $10,000 in “Other
Expenses.” If an expense exceeds $10,000 and is not specified above, you must itemize
the expense under an appropriate category.

9
4. If your management does not conduct the solicitation, you must provide the
information under “Proxy Solicitation Fees” for the cost of the solicitation.

Item 9. Indemnification
If you will insure or indemnify any underwriter, appraiser, lawyer, accountant
or expert, or director or officer against any liability which he or she may
incur in his or her capacity under any charter provisions, bylaw, contract,
arrangement, statute, or regulation, you must state the general effect of the
charter provision, bylaw, contract, arrangement or regulation.
Item 10. Federally Chartered Stock Savings Associations
You must state whether you are applying to amend your charter and bylaws to
comply with 12 CFR part 552.
Exhibits
You must attach the following exhibits to this Form.
Exhibit 1. Resolution of Board of Directors
You must include a certified copy or copies of your board of directors’
resolution or resolutions: (1) adopting the plan of conversion; and (2)
authorizing this application. Two-thirds of your board of directors must
approve the plan of conversion and authorize this application.
Exhibit 2. Copies of Documents, Contracts and Agreements
You must furnish the following documents, contracts, and agreements.
(a) Proposed certificates for shares.
(b) Proposed order forms with respect to the subscription rights.
(c) Proposed charter (including a liquidation account provision) and
bylaws.
(d) Any proposed stock option plan, form of stock option agreement, and
management or employee stock benefit plan.
(e) Any proposed management employment contracts.
(f) Any contract described in response to item 6 of Form PS.

10

(g) Contracts or agreements with paid solicitors described in response to
item 3(b) of Form PS.
(h) Any material loan agreements relating to your borrowing other than
from a Federal Home Loan Bank and other than subordinated debt
securities approved by OTS.
(i) Any appraisal agreement or proposed agreement, underwriting
contract, agreement among underwriters, or selling agent agreement.
(j) Any required undertaking or affidavits by officers or directors
purchasing shares in the conversion stating that they are acting
independently.
(k) Any documents referred to in the answer to item 9 of Form AC.
(l) Any trustee agreements or indentures.
(m)Any agreements for the making of markets or the listing on exchanges
of your conversion stock.
(n) Proposed marketing materials.
If you furnish any document, contract, or agreement in draft form under this
exhibit, you must furnish the final form immediately after the meeting of your
members to consider the plan of conversion. You may provide documents
required by subsection (i) above, that by their nature cannot be practically
expected until a later time, in substantially final form.
Exhibit 3. Opinion of Counsel
You must furnish an opinion of counsel discussing each of the following
matters:
(a) The legal sufficiency of your proposed certificates and order forms for
any shares.
(b) State law requirements that apply to the plan of conversion. The
opinion must cite to applicable state law and address whether the plan
will fulfill the requirements.
(c) The legal sufficiency of your bylaws.
(d) The type and extent of each class of voting rights after conversion.
The opinion must discuss any state law that requires you to provide
savings account holders or borrowers with voting rights.
(e) A certification or statement that the proposed charter and bylaws
conform to 12 CFR part 552 of this chapter.
(d) The legal sufficiency of your marketing materials.
You must discuss the matters listed in subdivisions (b), (c) and (d) of this
Exhibit only if you are converting to a state-chartered stock association.

11

Exhibit 4. Federal and State Tax Opinions or Ruling
(a) You must furnish an opinion of your tax advisor or an Internal Revenue
Service ruling on the federal income tax consequences of the plan of
conversion. The opinion or ruling must address the tax consequences to you
and to the various account holders who receive nontransferable subscription
rights to purchase shares.
Instruction. OTS may require you to obtain a ruling from the Internal Revenue
Service if the IRS has not issued a favorable ruling to plans of conversion that are
substantially similar to your plan. OTS also may require you to obtain a ruling if your
plan of conversion contains novel provisions or raises questions with federal income tax
consequences.

(b) You must furnish an opinion of your tax advisor or, if applicable, a ruling
from the appropriate state taxing authority on any tax consequences of the
plan of conversion under the laws of the state where you will be located. The
opinion must address the tax consequences to you and to your eligible
account holders.
Exhibit 5. Valuation Materials
You must furnish the materials required under 12 CFR 563b.200(b) regarding
the valuation of your shares. You are not required to file the materials if you
will not begin to offer shares before your members’ meeting to vote on the
plan of conversion.
Exhibit 6. Notice to Members
You must furnish evidence that you have notified your members as required
by 12 CFR 563b.135 and 563b.180.
Exhibit 7. Other Materials
(a) If you do not provide information required by an appropriate form because
you do not know the information or the information is not reasonably
available, you must:
(1) show that you will incur unreasonable effort or expense to obtain
the information; or
(2) indicate that you have no affiliation with the person who has the
information, state that you have requested the person to provide the

12

information, and indicate the result of that request.
(b) You must furnish all required consents.
(c) If anyone has signed an application or any amendment to an application
using a power of attorney, you must furnish four copies of the power of
attorney. Two copies must be manually signed.
(d) You must furnish the cross-reference sheet.
(e) If you request a waiver under 12 CFR 563b.5(c), you must furnish the
materials required by that section.
Exhibit 8. Business Plans
(a) You must furnish a consolidated business plan as required by 12 CFR
563b.105. You must detail how you will use the capital that you acquire in
the conversion. You should not project stock repurchases, returns of capital
or payment of extraordinary dividends in your business plan. OTS views a
return of capital to shareholders as a material deviation from the business plan
that requires the prior written approval of the Regional Director.
(b) You must follow 12 CFR 563b.160 if you wish OTS to deem any portion
of your business plan confidential.
Exhibit 9. Conversion Application that Includes a Charitable Organization
If your conversion includes a contribution to a charitable organization you
must provide:
(a) The current and proposed charter and bylaws (or trust agreement) for
the charitable organization.
(b) The proposed gift instrument.
(c) A three year operating plan for the charitable organization, including
the following:
(1) Pro-forma financial statements, including a balance sheet and
income statement.
(2) Plans and expenses for any office space, employees, office
equipment, supplies, and other items.
(3) A description and the estimated annual value of any contributed
office space, personnel, furniture, equipment, and supplies and the
name of the organization that will make the contribution.
(4) Any director, officer, and employee requirements and job
descriptions.
(5) The terms of employment and any expected compensation for
the directors (or trustees), officers, and employees.

13

(6) The charitable causes that the charitable organization will
support, including their location and a description of how the
activities will aid the local community.
(7) Plans, policies, and procedures for soliciting and accepting
grant applications.
(8) Decision standards for grant approval.
(9) The anticipated number and dollar amount of grants the
charitable organization will make each year for the three years after
it is established.
(10) Projected sources of revenues, including whether the
operations and grant activities will be funded by dividends, stock
sales, or additional contributions.
(11) An explanation of how the charitable organization will select
directors (or trustees) and how much experience the directors (or
trustees) will have with local community charitable organizations
and grant making.
(d) A conflicts of interest policy for the charitable organization that
prohibits grants to your officers, directors, and employees, your
affiliates’ officers, directors, and employees, and members of their
immediate families.
(e) A legal opinion from independent counsel discussing whether the
charitable organization’s proposed charter and bylaws (or trust
agreement), including the required pro-rata voting provision discussed
in 12 CFR 563b.575, comply with applicable state law.
(f) A tax opinion from an independent accountant or independent tax
counsel discussing whether the proposed contribution and any other
contributions during the same year are deductible under federal and
state law. The tax opinion must address deductibility for the year that
you will make the contribution and for a five-year carry forward
period.

OTS Form 1680
March 2002

14

Appendix B
Office of Thrift Supervision

FORM PS
PROXY STATEMENT
Paperwork Reduction Act Statement
The Office of Thrift Supervision will use this information to provide mutual members
with information necessary for voting on the transaction. See Part 563b.
Public reporting burden for this collection of information is estimated to average 50
hours, per response, including the time for reviewing instructions and completing and
reviewing the collection of information. If a valid OMB Control Number does not appear
on this form, you are not required to complete this form. Send comments on these
information collections to Information Collection Comments, Attention: 1550-0014, by
e-mail to infocollection.comments@ots.treas.gov; by facsimile transmission to (202) 9066518; or by mail to Chief Counsel's Office, Office of Thrift Supervision, 1700 G Street,
NW, Washington, DC 20552. Send a copy of comments to Alexander T. Hunt,
Attention: 1550-0014, by e-mail to ahunt@omb.eop.gov or by mail to him at Office of
Information and Regulatory Affairs, Office of Management and Budget New Executive
Office Building, Washington, DC 20503.

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OMB No. 1550-0014

Expiration Date:

FORM PS
PROXY STATEMENT
[Not to be codified in the Code of Federal Regulations]
OFFICE OF THRIFT SUPERVISION
1700 G Street, NW., Washington, DC 20552
Proxy Statement
________________________________________________________________
(Name of Applicant in charter)
(Docket No.)
________________________________________________________________
(Street address of Applicant)
________________________________________________________________
(City, State and Zip Code)
Index to Items
Item 1. Notice of meeting
Item 2. Revocability of proxy
Item 3. Persons making the solicitation
Item 4. Voting rights and vote required for approval
Item 5. Directors and executive officers
Item 6. Management compensation
Item 7. Business
Item 8. Description of conversion

16

Item 9. Description of stock
Item 10. Capitalization
Item 11. Use of new capital
Item 12. New charter, bylaws or other documents
Item 13. Other matters
Item 14. Financial statements
Item 15. Consents of experts and reports
Item 16. Attachments
General Information
If OTS requests information on your directors, officers, or other persons
holding specified positions or relationships during a specified period, you
must give the information for every person who held the positions or
relationships any time during the period. You do not have to include
information for any portion of the period when a person did not hold any
position or relationship. You must state, however, that you did not include
this information.
Item 1. Notice of meeting
You must include the following information on the cover page of your proxy
statement:
(a) notice of the members’ meeting to vote on the conversion;
(b) the meeting date, time and place;
(c) a brief description of each matter that will be voted at the meeting;
(d) the date of record for determining which members are entitled to vote
at the meeting;
(e) the date of the proxy statement; and
(f) your mailing address, zip code, and telephone number.

17

Item 2. Revocability of proxy
(a) You must state that a member may revoke his or her proxy before it is
exercised.
(b) You must briefly describe the procedures a member must follow to
revoke his or her proxy.
(c) You must describe any charter provision, bylaw, or federal or state law
that limits voting by proxy.
(d) You must state that the proxy is solicited for the meeting and any
adjournment of the meeting, and that you will not vote the proxy at any
other meeting.
Item 3. Persons making the solicitation
(a) You must state whether your management is soliciting the proxy. If any
director informs you in writing that he or she intends to oppose any
action, you must name the director and indicate the action he or she
intends to oppose.
(b) You must describe the method that you will use to solicit proxies, unless

you solicit by mail. If specially engaged employees or paid solicitors will
solicit proxies, you must state the material features of any contract or
arrangement and must identify the parties.
(c) If your management is not soliciting the proxies, you must name the

persons on whose behalf the solicitation is made. You do not have to
respond to items 5 through 16 for such solicitations, but must comply with
§ 563b.285 on false and misleading statements and other prohibited
matters.
Item 4. Voting rights and vote required for approval
(a) You must describe briefly:
(1) the voting rights of each class of your members,
(2) the approximate total number of votes entitled to be cast at the
meeting, and
(3) the approximate number of votes to which each class is entitled.
(4) the voting rights of beneficiaries of accounts held in a fiduciary
capacity, such as IRA accounts.
(b) You must give the record date for members entitled to vote at the meeting.

18

(c) You must state the vote required for approval of each matter that you will
submit to a vote of members.
(d) You may not use previously executed proxies to vote on the conversion.
Item 5. Directors and executive officers
(a) You must furnish the information on directors and executive officers and
certain relationships and related transactions required in items 401 and 404 of
Regulation S-K, 17 CFR 229.401 and 404, and item 6 of Regulation 14A, 17
CFR 240.14a-101. Unless the context otherwise requires, the words
"registrant" and "issuer" in those regulations refer to you and the word
"Commission" refers to OTS.
(b) If your conversion application includes a charitable contribution, you must
disclose:
(1) The proposed number of directors (or trustees) and officers of the
charitable organization.
(2) The name and background of each person proposed as a director (or
trustee) or officer of the charitable organization.
(3) The position, if any, that each proposed director (or trustee) and
officer holds with you.
(c) You must state whether anyone will exercise control through the use of
proxies and describe the nature of the control.
Item 6. Management compensation
You must furnish the information on executive compensation required in item
402 of Regulation S-K, 17 CFR 229.402, and item 7 of Regulation 14A, 17
CFR 240.14a-101. Unless the context otherwise requires, the words
"registrant" and “issuer” in those regulations refer to you and the word
“Commission” refers to OTS.
Item 7. Business
(a) Narrative description of business. (1) You must discuss briefly your
organizational history, including the year of organization, the identity of the
chartering authority, and any material charter conversions.

19

(2) You must describe the business that you and your subsidiaries conduct and
intend to conduct. You must describe how your business and any
predecessor(s) business developed over the past five years. If you have been
engaged in business less than five years, you must provide information from
when you began operations. You must disclose this information for earlier
periods if the information is material to understand how your business
developed. You must discuss material changes in the way you conduct
business.
Instruction. If you are filing under Regulation S-B, you must include audited
comparative balance sheets for the two most recent fiscal years.
(3) You must describe your historical lending practices, including the average
remaining term to maturity of your portfolio of mortgage loans. You must
state your plans for lending. You must address whether you will offer real
estate or other types of loans, the nature of security you will receive, the
terms of loans you will offer, whether the loans will carry fixed or variable
interest rates, and whether you will retain the loans or resell them in
secondary mortgage markets. You must identify the magnitude of various
activities.
(4) You must explain whether any material acquisitions have had or will have
significant impact on you, and the nature of the impact.
(b) Selected financial data. You must furnish a summary of your selected
financial data. You must provide this information in columns that permit the
comparison of data in each of the last five fiscal years. You must provide
data for any additional fiscal years, if the data is necessary to keep the
summary from being misleading.
Instructions. 1. The purpose of this summary is to supply selected data highlighting
significant trends in your financial condition and results of operations in a convenient and
readable format.
2. You must include the following items in the summary: Total interest income; total
interest expense; income (loss) from continuing operations; net income; total loans; total
investments; total assets; total deposits; total borrowings; total retained earnings; total
shareholders’ equity; total regulatory capital; and total number of customer service
facilities, indicating the number which provide full service. You may vary this data if the
variance is appropriate to conform to the nature of your business. You may include
additional items if you believe the items would enhance understanding and highlight
trends in your financial condition and results of operations. You must briefly describe

20
factors that materially affect the comparability of the financial data, such as accounting
changes, business combinations, or dispositions of business operations. You may
describe such factors by a cross reference to other discussions in the proxy statement.
You must also discuss any material uncertainties that may cause the data not to be
indicative of your future financial condition or results of operations.
3. If you elect to provide five-year summary information in accordance with the Financial
Accounting Standards Board's Statement of Financial Accounting Standards No. 89
("SFAS 89") "Financial Reporting and Changing Prices," you may combine this
information with the selected financial data required in this item.
4. If you include interim-period financial statements, or you are required to include
interim-period financial statements under item 14, you must update the selected financial
data for the interim period to reflect any material change in the trends indicated. If
updating information is necessary, you must provide the information on a comparative
basis, unless the comparison is not necessary to understand the updating information.
You must provide a management statement of presentation for the required interim-period
financial data reported.
5. “You” in the summary and in these instructions refers to you and your consolidated
subsidiaries.

(c) Management's discussion and analysis of financial condition and results of
operations. (1) You must discuss your financial condition, changes in financial
condition, and results of operations. You must discuss the information in
paragraphs (i), (ii), and (iii) of this paragraph (c) with respect to liquidity,
capital resources, and results of operations. You must also provide all other
information necessary to understand your financial condition, changes in your
financial condition, and results of your operations. You must discuss
significant business combinations. You may combine the discussion of
liquidity and capital resources, if the two topics are interrelated. If a
discussion of the subdivisions of your business is appropriate to understand
your business, you must focus your discussion on each relevant, reportable
segment or other subdivision of the business, and on your business as a
whole.
(i) Liquidity. You must identify any known trends or any known
demands, commitments, events, or uncertainties that are reasonably likely
to cause your liquidity to materially increase or decrease. If you identify
a material deficiency, indicate what you have done or will do to remedy
the deficiency. You must identify and separately describe internal and
external sources of liquidity, and briefly discuss any material unused
sources of liquid assets. You must comment on maturity imbalances
between assets and liabilities, and planned activities in the secondary

21

mortgage market.
(ii) Committed resources. You must describe your material commitments
for funding loans or other expenditures as of the end of the latest fiscal
period. You must indicate the general purpose of the commitments and
the anticipated source of funds to fulfill the commitments. You must
describe known material trends, favorable or unfavorable, in your
committed resources. You must indicate any expected material changes in
the mix and the relative cost of the resources. You must discuss changes
between deposits, equity, debt, and any off-balance-sheet financing
arrangements.
(iii) Results of operations. (A) You must describe any unusual or
infrequent events or transactions or any significant economic changes that
materially affected the amount of reported income from continuing
operations. In each case, you must indicate the extent to which these
events, transactions, or changes affected income. In addition, you must
describe any other significant components of revenues or expenses
necessary to understand your results of operations.
(B) You must describe any known trends or uncertainties that have had, or
will have, a materially favorable or unfavorable impact on net sales or
revenues or income from your continuing operations. If you know of
events which will cause a material change in the relationship between
costs and revenues you must disclose the change in the relationship.
(C) If your financial statements disclose material increases in interest
expense, you must discuss the extent to which the increases are
attributable to increases in rates or to increases in volume.
(D) For your three most recent fiscal years, or for those fiscal years in
which you have been engaged in business, whichever period is shorter,
you must discuss the impact of inflation and changing prices on your
revenues and on income from continuing operations.
(E) For the most recent financial statement, you must discuss any unusual
risk characteristics in your assets, including real estate development,
significant amounts of commercial real estate held as loan collateral, and
significant increases in amounts of nonaccrual, past due, restructured, and
potential problem loans (see Securities and Exchange Commission's
Securities Act Industry Guide 3, section III C).

22

(iv) You must provide a qualitative and quantitative discussion of your
market risk analysis.
Instructions. 1. Your discussion and analysis must address your financial statements
and other statistical data that will enhance a reader's understanding of your financial
condition, changes in your financial condition, and results of your operations. Generally,
you must discuss the three-year period covered by the financial statements and use yearto-year comparisons or other formats to enhance a reader's understanding. However,
where trend information is relevant, you should refer to the five-year selected financial
data appearing in item 7(b) above.
2. Your discussion and analysis should provide investors and other users with relevant
information to assess your financial condition and results of operations, based on the
user’s evaluation of the amounts and certainty of cash flows from operations and from
outside sources. You must only provide information that you may obtain without undue
effort or expense, and that does not clearly appear in your financial statements.
3. Your discussion and analysis must specifically focus on material events and
uncertainties known to you which would cause reported financial information not to be
indicative of future operating results or of future financial condition. You should
describe (a) matters that would affect future operations, but have not affected reported
operations, and (b) matters that have affected reported operations, but would not affect
future operations.
4. If the consolidated financial statements reveal material changes from year to year in
one or more line items, you must state the causes for the changes if the causes are
necessary to understand your business as a whole. If the causes for a change in one line
item also relate to other line items, you do not have to repeat the explanation. You do
not have to provide a line-by-line analysis of the financial statements as a whole. You do
not have to recite the amounts of changes from year to year, if the reader may readily
compute these changes from the financial statements. You must not merely repeat
numerical data contained in the consolidated financial statements.
5. "Liquidity," as used in paragraph (c)(1)(i) of this item 7, refers to your ability to
generate adequate amounts of cash to meet your cash needs. You must identify the
balance sheet conditions or income or cash flow items that indicate your liquidity
condition. You must discuss liquidity in the context of your own business or businesses.
Liquidity means more than "liquid assets," as defined in OTS liquidity regulations at 12
CFR Part 566.
6. OTS encourages you, but does not require you, to supply forward-looking information.
You must disclose known data that will have an impact upon future operating results,
such as known future increases in rates or other costs. If you provide any forwardlooking information, you may have a safe-harbor from liability for the projections under
12 CFR 563d.3b-6.

23

7. If you disclose narrative explanations of supplementary information in accordance with
SFAS 89, you may combine these explanations with your discussion and analysis required
under this provision or you may supply the information separately. If you combine the
information, you must place it reasonably near the discussion and analysis. If you do not
combine the information, you may omit the required discussion of the impact of inflation
and cross reference the explanations provided under SFAS 89.
8. If you do not disclose explanations of supplementary information in accordance with
SFAS 89, you may discuss the effects of inflation and changes in prices in an appropriate
manner. OTS encourages you to voluntarily comply with SFAS 89. However, you must
include a brief textual presentation of management's views. You do not have to present
specific numerical financial data.
9. “You” in the discussion and in these instructions means you and your consolidated
subsidiaries.

(2) If you include interim-period financial statements, you must provide
management's discussion and analysis of the financial condition and results of
operations. This discussion and analysis must enable the reader to assess
material changes in your financial condition and results of operations between
the periods specified in subdivisions (i) and (ii) of this paragraph. Your
discussion and analysis must address material changes in the items specifically
listed in paragraph (c)(1) of this item 7. However, you do not have to address
the impact of inflation and changing prices on operations for interim periods.
(i) Material changes in financial condition. You must discuss any material
changes in financial condition from the end of the preceding fiscal year to
the date of the most recent interim balance sheet that you provide. If you
provide an interim balance sheet as of the corresponding interim date of
the preceding fiscal year, you must discuss any material change in
financial condition from that date to the date of the most recent interim
balance sheet that you provide. You may combine any discussion of
changes from the end, and the corresponding interim date, of the
preceding fiscal year.
(ii) Material changes in results of operations. You must discuss any
material changes in your results of operations from the most recent fiscal
year-to-date period for which you provide an income statement to the
corresponding year-to-date period of the preceding fiscal year. If you
provide an income statement for the most recent fiscal year quarter, you
must discuss material changes with respect to that fiscal quarter and the
corresponding fiscal quarter in the preceding fiscal year. In addition, if

24

you provide an income statement for the 12-month period ended as of the
date of the most recent interim balance sheet you provide, you must
discuss material changes with respect to that 12-month period and the 12month period ended as of the corresponding interim balance sheet date of
the preceding fiscal year.
Instructions. 1. If you present interim financial statements and financial statements for
full fiscal years, you must discuss the interim financial information under paragraph
(c)(2) and the full fiscal year information under paragraph (c)(1) of this item 7. You may
combine the discussions.
2. In your discussion and analysis required by paragraph (c)(2), you must focus on
material changes. If your interim financial statements reveal material change from period
to period in one or more significant line items, you must describe the causes for the
changes, unless you have already disclosed these causes. You do not have to repeat the
description if the causes for a change in one line item relate to other line items. You do
not have to recite the amounts of changes from period to period, if a reader may readily
compute the amounts from the financial statements. You must not merely repeat
numerical data from the financial statements. You must only provide information that
you may obtain without undue effort or expense, and that does not clearly appear in your
interim financial statements.
3. In your discussion of material changes in results of operations, you must identify
significant elements of your income or loss from continuing operations that do not arise
from or are not necessarily representative of your ongoing business.
4. You are encouraged, but not required, to supply forward-looking information. You
must disclose known data that will have an impact upon future operating results, such as
known future increases in rates or other costs. If you provide any forward-looking
information, you may have a safe-harbor from liability for the projections under 12 CFR
563d.3b-6.

(d) Lending activities. (1) You must briefly describe federal and state
restrictions on your lending activities and laws affecting mortgage lending or
other lending. You must also briefly describe your general policy on loan-tovalue ratios; your customary methods of obtaining loan originations, (e.g., the
use of loan consultants or brokers); your general policy on approval of
properties as security for loans; your use of a loan committee, if any; and
your title, fire, and casualty insurance requirements on security properties.
You must indicate your future plans for secondary mortgage market activities,
such as transactions with Freddie Mac or other secondary mortgage agency.
You must identify significant loan service fee income as a percentage of net
interest income for the years required by item 14(b).

25

(2) You must describe briefly (i) the areas where you normally lend; and (ii)
any areas where you have a material concentration of loans. You may include
maps illustrating these areas. You must estimate the housing vacancy rates in
areas where you have a concentration of loans, if practicable.
(3) You must describe briefly your long-term investments in mortgage loans,
and the effect of these investments on your earnings spread. You must
provide the normal maturity of loans that you made on the security of singlefamily dwellings and estimate the average length of time these loans are
outstanding.
(4) For each of the periods required by item 14(b), you must provide the
following information in tabular form. You may exclude fees that are not
adjustments of yield.
(i) Average yield during the period on: (A) your loan portfolio, (B) your
investment portfolio, (C) other interest-earning assets, and (D) all interestearning assets. You must compute average yield at least monthly.
(ii) Average rate paid during the period on: (A) deposits, (B) borrowings
and Federal Home Loan Bank advances, (C) other interest-bearing
liabilities, and (D) all interest-bearing liabilities ((A), (B), and (C)). You
must compute average rate paid at least monthly.
(iii) Weighted-average yield at end of the latest required period, for items
(i) and (ii) of paragraph (4).
(iv) The net yield on average interest-earning assets (i.e., net interest
earnings divided by average interest-earning assets. Net interest earnings
is the difference between the amount of interest earned and interest paid).
You must determine average interest-earning assets no more frequently
than monthly.
(v) For each of the periods required by item 14(b), you must provide in
tabular form: (A) The amount of change in interest income and (B) the
amount of change in interest expense. For each major category of
interest-earning asset and interest-bearing liability (as stated in items (i)
and (ii) of paragraph (4)), you must attribute the amount of change to: (1)
changes in volume (change in volume multiplied by old rate), (2) changes
in rates (change in rate multiplied by old volume), and (3) changes in rate-

26

volume (change in rate multiplied by the change in volume). You must
allocate the rate/volume variances consistently between rate and volume
variance and disclose the basis of allocation in a note to the table.
(5) For each of the periods required by item 14(b), you must present the
following:
(i) Return on assets (net income divided by average total assets).
(ii) Return on equity (net income divided by average equity).
(iii) Equity-to-assets ratio (average equity divided by average total assets).
Instruction. You must supply any additional ratios if the ratios are necessary to
explain your operations.

(6) As of the end of the latest reported fiscal year, you must present
separately the amounts of loans in each category required by balance sheet
item 7(b), 12 CFR 563c.102, which are due:
(i) in each of the three years following the balance sheet,
(ii) after three through five years,
(iii) after five through ten years,
(iv) after ten through fifteen years, and
(v) after fifteen years.
In addition, you must present separately the total amount of all loans due after
one year which have predetermined interest rates, and floating or adjustable
interest rates.
Instructions. 1. You must report scheduled principal repayments in the maturity
category in which the payment is due.
2. You must report demand loans, loans having no stated schedule of repayments and no
stated maturity, and overdrafts as due in one year or less.
3. You must base your maturities on contract terms. If terms vary due to your "rollover
policy," you must revise the maturity and briefly discuss the rollover policy.

(7) You must describe briefly the risk elements in your loan and investment
portfolios, and your procedures for delinquent loans. As of the end of each of
the periods covered by the statements of operation required by item 14(b)(1)

27

and as of the date of the latest statement of financial condition required by
item 14(a), you must set forth in tables the amounts and categories of
nonaccrual, past due, restructured, and potential problem loans (see Securities
and Exchange Commission's Securities Act Industry Guide 3, section III. C.)
and the ratio of such loans to total assets. If the amount of real estate that has
been in substance foreclosed, or acquired by foreclosure or by deed in lieu of
foreclosure is significant, you must briefly describe the major properties. You
must also estimate your probable losses, if any, on disposition of the
properties.
(e) Savings activities. (1) You must state that, if you liquidate after
conversion, you will fully pay savings account holders before you pay
shareholders. You also must indicate the percentage of total savings accounts
that are from out-of-state sources, if the total is significant.
(2) You must set forth in a table the amounts of time deposit accounts
categorized by interest rates on the dates of each balance sheet that you filed.
You must use interest-rate categories that are not more than 200 basis points
wide. As of the date of the latest balance sheet, you must set forth, in a table
for each interest-rate category, the amounts of savings that will mature during
each of the three years following the balance sheet date, and the total amount
that will mature after three years.
Instruction. This information is not required for S-B filers.
(3) You must disclose the weighted-average rate and general terms (as well as
formal provisions for the extension of the maturity) of each category of shortterm borrowings required by Balance Sheet Caption 14, 12 CFR 563c.102.
You must also disclose the maximum amount of borrowings in each category
that are outstanding at any month-end during each period for which an end-ofperiod balance sheet is required. You must disclose the approximate average
short-term borrowings outstanding during the period and the approximate
weighted-average interest rate for such aggregate short-term borrowings. You
must briefly describe how you computed these averages. You do not have to
disclose borrowings in each category if the aggregate amount of the
borrowings at the balance sheet date does not exceed one percent of assets at
that date. However, if the weighted average of your borrowings outstanding
during the year exceeds one percent of assets at year-end and significantly
exceeds the amount of your borrowings at year-end, you must furnish this
disclosure. You are not required to provide this information for any category
of short-term borrowings if the average balance outstanding during the period

28

was less than 30 percent of shareholders equity at the end of the period.
(f) Federal regulation. You must describe briefly, to the extent not otherwise
covered by other items, how federal agencies regulate you and your
operations. In particular, you must describe briefly how the Federal Deposit
Insurance Corporation (FDIC) insures your accounts and how FDIC and OTS
regulate your operations. You must describe federal regulatory capital
requirements, what will happen to you if you fail to meet those capital
requirements, and whether your regulatory capital position complies with
those requirements. You must also describe how the FDIC and OTS charge
assessments on your operations. In addition, you must describe briefly the
liquidity requirements under section 6 of the Home Owners' Loan Act and
OTS liquidity regulations, and state law. You must state whether you meet
those liquidity requirements.
(g) Federal Home Loan Bank System. You must describe briefly the Federal
Home Loan Bank (FHLB) System and state whether you are a member. If
you are a member, you must describe the following:
(1) Limitations on your borrowings,
(2) Recent loan policies of your FHLB and the current interest rates your
FHLB charges, and
(3) FHLB share purchase requirements and the amount of FHLB stock
you own.
(h) State savings association law. If you are converting to a state-chartered
stock association, you must describe state law provisions that materially affect
your business.
(i) Federal and state taxation. (1) You must describe briefly applicable federal
income tax laws including:
(i) Permissible bad debt reserves;
(ii) Your position with respect to the maximum bad debt reserve
limitations as of the date of the latest statement of financial condition
required under item 14(a);
(iii)Future increases in your effective income tax rate;

29

(iv)The date through which the Internal Revenue Service audited your
federal income tax returns; and
(v) How the payment of cash dividends on your capital stock after
conversion will effect your federal income taxes.
(2) You must briefly describe applicable state tax laws.
(j) Competition. You must describe the material sources of competition for
savings associations generally. You must indicate, to the extent practicable,
your position in your principal lending and savings markets.
(k) Office and other material properties. (1) You must furnish the location of
your home office, branch offices, and other office facilities (such as mobile or
satellite offices). You must state the total net book value of all offices as of
the date of the latest statement of financial condition required by item 14(a).
You must state the expiration date of the lease on every leased office.
(2) You must describe briefly any undeveloped land that you own, including
its location, net book value, prospective use, and holding period.
(l) Employees. You must state the number of full-time employees, including
executive officers listed under item 5. You must state whether employees are
represented by a collective bargaining group, and whether you have
satisfactory relations with your employees. You must summarize briefly any
loan, profit sharing, retirement, medical, hospitalization or other
compensation plans that you provide to your employees, unless you have
already included this information under item 6.
(m) Subsidiaries. You must describe briefly your investment in each
subsidiary, and the major lines of the subsidiary’s business (including any
joint ventures) that are material to your operations.
(n) Legal proceedings. You must furnish the information on legal
proceedings required by item 103 of Regulation S-K, 17 CFR 229.103.
Unless the context otherwise requires, "registrant" in that regulation means
you.
(o) Additional information. You may request permission to omit any
information required by this item, or to substitute appropriate information of

30

comparable character. OTS may permit you to omit or substitute information
where it is consistent with the protection of account holders. OTS may also
require you to furnish other additional or substitute information if the
information is necessary or appropriate to adequately describe past and future
business.
Item 8. Description of the plan of conversion
(a) You must include the following statement in the proxy statement. You
must place this statement before the information required by this item 8.
“OTS has approved the plan of conversion, subject to member approval the
plan and certain other conditions. OTS approval does not mean that OTS
recommends or endorses the plan.”
(b) You must describe your plan of conversion. You must describe the
information required by paragraphs (c) through (j) of this item. You must
include any additional information necessary to accurately describe the
material provisions of the plan.
(c) You must briefly describe the effects of conversion from a mutual to a
stock association, including all of the following:
(1) That your savings account holders will continue to hold FDIC-insured
accounts in the converted savings association, with the same dollar amount,
rates of return, and general terms as existing accounts;
(2) That your savings and borrowing members will not have voting rights after
conversion. In the mutual holding company context, however, you must
describe what voting rights, if any, your savings and borrowing members will
have after reorganization;
(3) That the account holders have liquidation rights. You must describe the
liquidation account you will establish and maintain, including when you will
pay the account, the interest of eligible account holders and supplemental
eligible account holders in the account, and the formula that you will use to
adjust the account;
(4) That the conversion will not effect borrowers’ loans, including the amount,
rate, maturity, security, or other contractual terms;
(5) That the FDIC will not insure your stock;

31

(6) That you will not distribute any assets other than to pay conversion
expenses or to make a charitable contribution; and
(7) The reasons management recommends the conversion, including any
advantages to the community that you serve.
(d) You must furnish the following information regarding the subscription
rights of members:
(1) The formula that you will use to determine the subscription rights of
account holders to purchase shares under 12 CFR 563b.320 through
563b.395;
(2) The purchase priorities, total purchase limitations, total number of shares
that members may purchase, and the allocation formula in the plan of
conversion;
(3) The allocation formulas that you will use if shares are oversubscribed
during the sale under the plan of conversion; and
(4) The use and timing of the order forms for the exercise of subscription
rights.
(e)(1) You must estimate the price range per share of the shares you will sell
in the public offering under your plan of conversion. You do not have to
estimate the price range if you will not begin the offering until after your
members’ meeting;
(2) You must indicate that the offering price will be the pro forma market
value of the shares, as determined by your management and the underwriter;
and
(3) You must state that you must sell all of the shares.
(f) Unless you will not begin the offering until after your members’ meeting,
you must discuss the following for stock you will sell:
(1) the earnings per share on a pro forma basis as of the most recent year-end
and interim period required by item 14(b); and
(2) the book value per share on a pro forma basis as of the most recent year-

32

end and interim period required by item 14(a).
Instructions. 1. You must provide earnings and book value per share data (a) without
giving effect to the estimated net proceeds from the sale of the stock and (b) after giving
effect to such proceeds. You must clearly state all of your assumptions.
2. In computing pro forma earnings, you must use the average of (i) the average yield on
all interest-earning assets (item 7(d)(4)(i)(D)) and (ii) the average rate paid on deposits
(item 7(d)(4)(ii)(A)).
3. If interest rates have significantly changed during the applicable periods, OTS may
permit you to use properly supported alternative computations.
4. You must explain that pro forma data may not be indicative of your actual financial
position or the results of continuing operations after the conversion.

(g) You must state when the proposed subscription period will begin and end,
and must describe whether the plan of conversion permits you to change or
extend these dates. You must also state the following:
(1) You will set a maximum subscription price in the offering circular that
you will use for the offering of subscription rights;
(2) The actual subscription price will be the public offering price;
(3) The actual subscription price will not exceed the maximum
subscription price on the order form; and
(4) You will refund any difference between the maximum and actual
subscription prices, unless the subscriber affirmatively elects to apply
the difference to the purchase of additional shares.
(h) You must also:
(1) Describe, to the extent practicable, whether you intend to list your
shares on an exchange, or how you will otherwise provide a market
for the purchase and sale of shares in the future;
(2) Describe briefly the tax effect of the conversion on you and on the
various classes of account holders receiving nontransferable
subscription rights in the conversion;

33

(3) State that the plan of conversion is attached as an exhibit to the proxy
statement and that the reader may consult the plan for further
information.
(i) You must state whether the plan of conversion permits you to offer
unsubscribed shares to the public directly or through underwriters. If so, you
must provide the information, to the extent known, required by item 6 of
Form OC, and indicate the estimated timing of the proposed offering.
(j) You must furnish the following information on proposed purchases of
shares by your directors and officers in a table:
(1) The total proposed number of shares that all officers, directors and
their associates as a group may purchase.
(2) The name and position of each officer and director in item 5(a) and the
number of shares each will purchase.
(3) If any officer, director or his or her associate proposes to purchase one
percent or more of the total number of shares that will be outstanding,
the name, position, and the number of shares that the officer, director
or associate will purchase.
(4) Indicate separately the number of shares that will be purchased in each
offering category with respect to the information required by items (1),
(2) and (3) of paragraph (j).
(5) If your conversion application includes a charitable contribution, you must

disclose the following additional information:
(i) The amount and percentage of shares that each proposed director (or

trustee) and officer of the charitable organization will purchase in the
conversion.
(ii) The aggregate number and percentage of shares that the charitable
organization and its proposed officers and directors (or trustees) will
hold.
(iii) The number of shares and value of the contribution at the minimum,
midpoint, maximum, and maximum as adjusted, of the valuation
range.
(iv) The decrease in shares that you will sell in the conversion, in number
of shares and dollar amounts, at the minimum, midpoint, maximum,

34

and maximum as adjusted, of the valuation range.
(v) The dilution in ownership and book value per share from the proposed
contribution.
(vi) Your plans for additional charitable contributions over the next three
years.
Instruction. You are only required to furnish information on associates of officers and
directors to the extent that you know this information. If you are unable to confirm the
number of shares an associate will purchase, you must disclose the number of shares the
associate is given subscription rights to purchase.

Item 9. Description of stock
(a) You must furnish the information required in item 202 of Regulation S-K,
17 CFR 229.202. Unless the context otherwise requires, "registrant" refers
to you.
(b) You must undertake to use your best efforts to encourage and assist a
professional market maker to establish and maintain a market for your shares.
(c) You must discuss the trading market that you expect will exist for your
shares. You must estimate the number of market makers and shareholders,
and describe your plans for listing the stock.
Instruction. You must describe the basic requirements you must meet to list your
stock.

(d) If the rights of your stockholders will be materially limited or qualified by
the rights of savings account holders or borrowers, you must describe these
limitations or qualifications so that investors can understand their stock rights.

35

Item 10. Capitalization
You must set forth the amounts of your capitalization in substantially the
tabular form indicated below. You may modify the captions as appropriate.
(A) Capitalization
on most recent
balance sheet date

(B) Pro forma
adjustments as a
result of
conversion

(C) Pro forma
capitalization,
after giving effect
to the conversion

Deposits
FHLB advances
Other
Borrowings
Capital stock
Preferred stock
Paid-in capital
Retained earnings
Restricted
Unrestricted
Total
Instructions. 1. You must indicate in the table, or in a footnote to the table, the total
number of shares you will authorize, the par or stated value of the shares, and the number
of shares you will sell in the conversion.
2. You must estimate in the table the total amount of funds you will receive when you sell
your stock. In a footnote, you must state the price per share that you used for the
estimate. You must clearly indicate that the total amount and price per share are
estimates.
3. In Column A, you must use the most recent balance sheet date required by item 14.

Item 11. Use of new capital
You must explain how you will use the new proceeds of the conversion,
including the approximate amount that you will use for each purpose.
Instruction. You do not have to detail proposed investments. You must, for example,
only briefly describe any investment or other activity that will be affected materially by
availability of the proceeds. Examples of such activities include: expanded secondary
market activities, larger scale lending projects, loan portfolio diversification, increased
liquidity investments, repayment of debt, additional branch offices and other facilities,
service corporation investments, and acquisitions.

36

Item 12. New charter, bylaws, or other documents
You must describe the material changes to your existing charter, bylaws, and
other similar documents that will take effect after conversion.
Instruction. You only have to briefly summarize provisions that are pertinent from an
investment and a voting standpoint. You do not have to provide a complete legal
description of each provision.

Item 13. Other matters
You must state that you will register your stock under section 12(g) of the
Securities Exchange Act of 1934, and that you will not deregister the stock
for three years after the date of conversion. You are subject to the proxy
rules, insider trading reporting and restrictions, annual and periodic reporting
and other requirements of that Act when you register your stock.
Item 14. Financial statements
Subpart A of 12 CFR Part 563c governs the certification, form, and content of
the financial statements, including the basis of consolidation.
(a) Consolidated balance sheets. (1) You and your subsidiaries must furnish

consolidated, audited balance sheets as of the end of each of the two most
recent fiscal years, even if the applicant is filing using the provisions of
Regulation S-B.
(2) If the latest balance sheets you furnish under (1) of this paragraph are
dated 135 days or more before the date OTS approves the conversion, you
must furnish an interim balance sheet dated within 135 days of OTS approval.
This interim balance sheet may be unaudited.
(3) If the latest balance sheets you furnish under (1) of this paragraph are

dated 105 days or more before the date OTS approves the conversion, you
must furnish a Recent Development section of selected financial data and a
Management’s Discussion and Analysis section of significant variances.
(b) Consolidated statements of income and cash flows. (1) You, your
subsidiaries, and your predecessors must furnish consolidated, audited
statements of income and cash flows for each of the three fiscal years

37

preceding the date of the most recent balance sheet furnished.
(2) In addition, you must furnish statements of income and cash flows (i) for
any interim period between the latest audited balance sheet and the date of the
most recent interim balance sheet that you file, and (ii) for the corresponding
period of the preceding fiscal year. The interim financial statements may be
unaudited.
(c) Changes in stockholders' equity. You must analyze the changes in each
caption of stockholders' equity in the balance sheets. You must present this
analysis in a note or separate statement that reconciles the beginning balance
with the ending balance for each period for which you are required to furnish
an income statement. You must describe all significant reconciling items with
appropriate captions. You must reconcile total generally accepted accounting
principles (GAAP) capital with actual tangible, core, and risk-based capital in
the notes to the financial statements.
(d) Financial statements of business acquired or to be acquired. You must
furnish the information required by 17 CFR 210.3-05 and 210.11-01 to -03
for any business that you have acquired or will acquire.
(e) Separate financial statements of subsidiaries not consolidated and 50percent- or less-owned persons. You must furnish the information required by
17 CFR 210.3-09 on separate financial statements of subsidiaries not
consolidated and 50-percent- or less- owned persons.
(f) Filing of other statements in certain cases. You may request permission to
omit any of the statements required by this item, or to substitute appropriate
statements of comparable character. OTS may permit you to omit or
substitute statements where it is consistent with the protection of account
holders. OTS may also require you to include other additional or substitute
statements, if the statements are necessary or appropriate to adequately
present the financial condition of any person whose financial statements are
required, or whose statements are otherwise necessary for the protection of
account holders and others.
Instructions. 1. If you previously used an audit period for your certified financial
statements and this audit period does not coincide with your fiscal year, you may use the
audit period instead of any required fiscal year. You may use this audit period, however,
only if it covers a full twelve months' operations and you have used this period
consistently.

38
2. Interim financial statements must be comparative and reported in the same format as
the audited financial statements.

Item 15. Consents of experts and reports
(a) You must briefly describe all consents of experts filed under the
instructions in the Form AC.
(b) You must provide a report of the independent public accountants who
certified your financial statements and other matters in the proxy statement.
Instruction. You must summarize only the provisions of the consents that are
pertinent from an investment and a voting standpoint. You do not have to provide a
complete legal description of each consent.

Item 16. Attachments
You must attach a copy of your plan of conversion as approved by OTS to the
proxy statement distributed to members and others. Alternatively, in a
transaction that does not utilize a state-chartered holding company, you may
disclose in the proxy statement that you will provide the plan of conversion, if
a recipient requests it within a specified period by means of a postage-paid
postcard or other written communication.

OTS Form 1681
March 2002

39

Appendix C
Office of Thrift Supervision

FORM OC
OFFERING CIRCULAR
Paperwork Reduction Act Statement
The Office of Thrift Supervision will use this information to ensure that the public
receives adequate information about the Applicant and the securities being offered. See
Part 563b and Part 563g.
Public reporting burden for this collection of information is estimated to average 150
hours, per response, including the time for reviewing instructions and completing and
reviewing the collection of information. If a valid OMB Control Number does not appear
on this form, you are not required to complete this form. Send comments on these
information collections to Information Collection Comments, Attention: 1550-0014, by
e-mail to infocollection.comments@ots.treas.gov; by facsimile transmission to (202) 9066518; or by mail to Chief Counsel's Office, Office of Thrift Supervision, 1700 G Street,
NW, Washington, DC 20552. Send a copy of comments to Alexander T. Hunt,
Attention: 1550-0014, by e-mail to ahunt@omb.eop.gov or by mail to him at Office of
Information and Regulatory Affairs, Office of Management and Budget New Executive
Office Building, Washington, DC 20503.

40
OMB No. 1550-0014

Expiration Date:

FORM OC
OFFERING CIRCULAR
[Not to be codified in the Code of Federal Regulations]
OFFICE OF THRIFT SUPERVISION
1700 G Street, NW., Washington, DC 20552
Offering Circular
________________________________________________________________
(Name of Applicant in charter)
(Docket No.)
________________________________________________________________
(Street address of Applicant)
________________________________________________________________
(City, State and Zip Code)
Index to Items
Item 1. Information Required by and Use of Form OC
Item 2. Additional Current Information Required
Item 3. Statement Required in Offering Circulars
Item 4. Preliminary Offering Circular
Item 5. Information with Respect to Exercise of Subscription Rights
Item 6. Stock Selling Arrangements

41

Item 1. Information Required by and Use of Form OC
You must date the offering circular as of the effective date. You must include
in your offering circular substantially the same information that you must
include in the proxy statement that you distribute to your members to vote on
the conversion. You may omit information from the offering circular that you
included in the proxy statement only to the extent the information is clearly
inapplicable and only if the offering circular is delivered with the proxy
statement.
Instructions. 1. The "offering circular" is the offering circular for the subscription
offering and the offering circular for any community offering or public offering, or both.
It may also be called a “prospectus.”
2. If you previously furnished a copy of the proxy statement to your members, you do not
need to include the proxy statement with your offering circular in the subscription
offering. However, you must state in the offering circular that you previously furnished
a copy of the proxy statement to the members, and that you will furnish an additional
copy promptly upon request. You also must state your telephone number and mailing
address.

Item 2. Additional Current Information Required
You must include the following additional current information in your
offering circular, if the information is available and you did not already
include the information in the proxy statement:
(a) If your members’ meeting took place before you mailed the Form OC, the
result of the vote of your members on the conversion and any other proposals
considered at the meeting.
(b) Any recent material developments in your business or affairs.
(c) The trading market that you expect for your conversion shares.
(d) A summary of the results of any separate subscription offering. You must
include the number of shares that you sold to eligible account holders,
supplemental eligible account holders, and other voting members, the price at
which you sold the shares, and the number of unsubscribed shares. You must
include this summary on the outside front cover page.

42

(e) The information required by Items 8(e)(1) and 8(f) of Form PS.
(f) Any other information necessary to make the offering circular current,
including full financial statements dated within six months before the date you
mail the offering circular. You must also include, in your subscription
offering circular, any more recent financial statements if, at the time you
commence your subscription offering, you determine that you must include
the financial statement in an offering circular in the community offering or
public offering, or both.
Item 3. Statement Required in Offering Circulars
If you are not forming a holding company as part of your reorganization, you
must set out the following statement on the outside front cover page of every
offering circular. You must set out the statement printed in bold-face Roman
type at least as large as ten-point modern type:
The Office of Thrift Supervision has not approved or disapproved these
shares. The office has not passed on the accuracy or adequacy of this
offering circular. Any representation to the contrary is unlawful.
Item 4. Preliminary Offering Circular
You must include the caption "Preliminary Offering Circular," the date you
issue the preliminary offering circular, and the following statement on the
outside front cover page of any preliminary offering circular. You must set
out the statement in red ink, printed in type as large as you use generally in
the body of the offering circular.
"We have filed this offering circular with the Office of Thrift Supervision, but
it has not been authorized for use in final form. We may complete or amend
the information in this offering circular. We may not sell or accept offers to
buy the shares covered by this offering circular before the Office of Thrift
Supervision declares the offering circular effective. The offering circular is
not an offer to sell or the solicitation of an offer to buy. We will not sell
these shares in a state that prohibits offers, solicitations or sales before
registration or qualification under the securities laws of that state."

43

Item 5. Information with Respect to Exercise of Subscription Rights
In any offering circular that you will deliver to subscribers, you must describe
all material terms of the offering relating to the exercise of subscription
rights. You may exclude this information if you have already included this
information in the proxy statement. Material terms include the expiration
date, any subscription agent, method of exercising subscription rights,
payment for shares, delivery of stock certificates for shares purchased,
maximum subscription price, possible reduction of subscription price,
relationship of subscription price to public offering price, requirement that all
unsubscribed shares be sold, and any other material conditions relating to the
exercise of subscription rights.
Item 6. Stock Selling Arrangements
In each offering circular you must describe the material terms of the plan or
plans of distribution for all shares.
(a) You must include the following information in substantially the tabular

form set forth below. You must set out this information on the outside front
cover page of the offering circular.
Price to Public
Per share
Total

$
$

Selling discounts
and commissions
$
$

Proceeds
to Applicant
$
$

(b) If there is a community offering or public offering, or both, you must

provide an offering circular. You may omit the description relating to the
exercise of subscription rights required by item 5, unless you commence your
community offering or public offering, or both, simultaneously with your
subscription offering.
(c) If you sell any shares through a community offering, you must indicate:

(1) the timing for the offering, (2) the geographic area where you will make
the offering, (3) the method you will employ to market the shares (including
the frequency and nature of communications or contracts with potential
purchasers), (4) any preferences that you will give to any geographic area or
to any class of potential purchasers, and (5) the limitations on purchases by
potential purchasers.

44

(d) If a selling agent assists in offering shares, you must identify the selling
agent, disclose how the selling agent will offer the shares, and disclose the
commissions and fees you will pay to the selling agent.

(e) If you will offer any shares through underwriters, you must include in the
offering circular for the public offering the names of the principal
underwriters and the amounts that each will underwrite. You may omit this
information for principal underwriters, other than the managing underwriters,
from the offering circular for the subscription offering if you include the
following conditions: (1) that all subscription rights will be exercisable by
delivery of order forms to the underwriters or selling group for the public
offering; and (2) that orders of persons exercising subscription rights will be
filled prior to orders for stock in the direct community or public offerings, or
both. You must identify each principal underwriter that has a material
relationship with you and describe the relationship. In each offering circular,
you must state briefly the underwriter's obligation to take unsubscribed
shares.
(f) You must briefly disclose in the offering circular the discounts and
commissions that you may allow or may pay dealers in connection with the
sale of unsubscribed shares for the community or public offering, or both.
You may omit this information from the offering circular for any subscription
offering, unless you use the subscription offering circular for the community
offering or public offering, or both.
Instructions. 1. Commissions include all cash, securities, contracts, or anything else
of value, paid, to be set aside, or disposed of. Commissions also include understandings
made with or for the benefit of any persons in which any underwriter or dealer is
interested, in connection with the sale of the shares.
2. You must include any cash commissions in the table. You must describe other
consideration you will make to the underwriters following the table with a reference in
the second column of the table. You also must appropriately disclose any finder's fees or
similar payments.
3. You must state whether the selling agents or underwriters are or will be committed to
take and to pay for all of the shares if any are taken, or whether it is merely an agency or
"best efforts" arrangement under which the selling agents or underwriters are required to
take and pay for only the shares that they sell to the public.

OTS Form 1682
March 2002

45

Appendix D
Office of Thrift Supervision

FORM OF
ORDER FORM
Paperwork Reduction Act Statement
The Office of Thrift Supervision will use this information to ensure subscribers to
Applicant’s stock receive adequate disclosures regarding the purchase of Applicant’s
stock. See Part 563b and Section 563.76.
Public reporting burden for this collection of information is estimated to average one
hour, per response, including the time for reviewing instructions and completing and
reviewing the collection of information. If a valid OMB Control Number does not appear
on this form, you are not required to complete this form. Send comments on these
information collections to Information Collection Comments, Attention: 1550-0014, by
e-mail to infocollection.comments@ots.treas.gov; by facsimile transmission to (202) 9066518; or by mail to Chief Counsel's Office, Office of Thrift Supervision, 1700 G Street,
NW, Washington, DC 20552. Send a copy of comments to Alexander T. Hunt,
Attention: 1550-0014, by e-mail to ahunt@omb.eop.gov or by mail to him at Office of
Information and Regulatory Affairs, Office of Management and Budget New Executive
Office Building, Washington, DC 20503.

46
OMB No. 1550-0014

Expiration Date:

FORM OF
ORDER FORM
[Not to be codified in the Code of Federal Regulations]
OFFICE OF THRIFT SUPERVISION
1700 G Street, NW., Washington, DC 20552
Order Form for purchase of conversion shares
(Name of Applicant in charter)

(Docket No.)

(Street address of Applicant)
(City, State and Zip Code)

(1) After OTS declares your offering circular for the subscription offering
effective, you must promptly distribute order forms for the purchase of shares of
stock to: (a) all eligible account holders, (b) supplemental eligible account
holders, and (c) other voting members who may subscribe for shares under the
plan of conversion.
(2) You must provide a final offering circular for the subscription offering or any
community or public offerings with the order form (unless you previously
provided a final offering circular). You must include detailed instructions
explaining how to complete the order forms.
(3) You must state the maximum subscription price on each order form. This
amount is the amount that is payable to you when the subscriber returns the
order form. You must establish a maximum subscription price and an actual
subscription price that is within the subscription price range stated in OTS's
approval and in the offering circular. If the maximum subscription price or the

47

actual subscription price is not within the subscription price range, you must
receive OTS approval to amend the range. If appropriate, OTS may require you
to resolicit proxies and order forms as a condition to its approval. If the public
offering price is less than the maximum subscription price on the order form,
you must reduce the actual subscription price to correspond to the public offering
price. You must refund the difference to those subscribers who paid the
maximum subscription price, unless the subscriber affirmatively elects to apply
the difference to the purchase of additional shares.
(4) You must describe in a simple, clear and intelligible manner the actions that
are required or available to the persons who will receive the order form.
Specifically, you must provide all of the following information:
(i) Indicate the maximum number of shares that the person may purchase
under the subscription rights;
(ii) Indicate the time period during which the person must exercise the
subscription rights. This period must be at least 20 days and not more than
45 days after you mail the subscription offering order form;
(iii) State the maximum subscription price per share;
(iv) Indicate any minimum share purchase requirements;
(v) Specifically designate blank space or spaces for the person to indicate the
number of shares he or she wishes to purchase;
(vi) Indicate how the person must pay. If the person withdraws funds from a
certificate of deposit, you must indicate that the person may withdraw the
funds without penalty. If the person pays by withdrawing from a savings
account or certificate of deposit, you must provide for the person to check a
box on the order form. If a person pays by withdrawing from a savings
account or certificate of deposit, you may, but need not, withdraw funds from
the account when you receive the order form. If the person withdraws funds
before the closing date of the public offering, you must pay interest to the
account holder as if the amount remained in the account until the closing date;
(vii) Specifically designate blank spaces for the person to date and sign the
order form;
(viii) Include an acknowledgment that the person who signed the order form

48

received a final offering circular before he or she signed the form; and
(ix) Indicate what will happen if the person does not properly complete and
return the order form. You must state that the person may not transfer the
subscription rights to another and state that the subscription rights are void at
the end of the subscription period. You must include in the instructions to the
form the address where the person must send the order form and the date that
you will deem the order form received, (for instance, by date and time of
actual receipt at the indicated address, or by date and time of postmark.)
(5) You may state that no one may modify the order form without your consent.
(6) You must include the following statements in bold print in your order form:
(a) “Federal Regulations prohibit any person from transferring or
entering into any agreement directly or indirectly to transfer the legal
or beneficial ownership of conversion subscription rights, or the
underlying securities to the account of another.”
(b) “Under penalty of perjury, I certify that I,_______________, am
purchasing shares solely for my account and that there is no
agreement or understanding regarding the sale or transfer of such
shares, or my right to subscribe for shares.”
(7) You must also include the following certification on your order form.
“I ACKNOWLEDGE THAT THIS SECURITY IS NOT A DEPOSIT
OR ACCOUNT AND IS NOT FEDERALLY INSURED, AND IS
NOT GUARANTEED BY [insert name of savings association] OR BY
THE FEDERAL GOVERNMENT.”
If anyone asserts that this security is federally insured or guaranteed, or is
as safe as an insured deposit, I should call the Office of Thrift Supervision
Regional Director [insert Regional Director’s name and telephone number
with area code].
I further certify that, before purchasing the [description of security being
offered] of [name of issuer, name of savings association and affiliation to
issuer (if different)], I received an offering circular.

49

The offering circular that I received contains disclosure concerning the
nature of the security being offered and describes the risks involved in the
investment including: [list briefly the principle risks involved and cross
reference certain specified pages of the offering circular where a more
complete description of the risks is made.]
Signature: ___________________
Date:_______________________
OTS Form 1683
March 2002