[Code of Federal Regulations]

[Title 12, Volume 6]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 12CFR611.515]



[Page 57-58]

 

                       TITLE 12--BANKS AND BANKING

 

                 CHAPTER VI--FARM CREDIT ADMINISTRATION

 

PART 611_ORGANIZATION--Table of Contents

 

                    Subpart E_Transfer of Authorities

 

Sec. 611.515  Information statement.



    (a) The bank and association shall prepare an information statement 

which will inform stockholders about the provisions of the proposed 

transfer of authorities and the effect of the proposal on the bank and 

the association.

    (b) The information statement for each institution involved shall 

contain the following materials as applicable to the institution:

    (1) A statement either on the first page of the materials or on the 

notice of the stockholders meeting, in capital letters and boldface 

type, that:



 THE FARM CREDIT ADMINISTRATION HAS NEITHER APPROVED NOR PASSED UPON THE 

   ACCURACY OR ADEQUACY OF THE INFORMATION ACCOMPANYING THE NOTICE OF 

    MEETING OR PRESENTED AT THE MEETING AND NO REPRESENTATION TO THE 

                 CONTRARY SHALL BE MADE OR RELIED UPON.



    (2) A description of the material provisions of the plan under Sec. 

611.520 and the effect of the transaction on the institution, its 

stockholders, and the territory to be served.

    (3) A statement enumerating the potential advantages and 

disadvantages of the proposed transfer including, but not limited to, 

changes in operating efficiencies, one-stop service, branch offices, 

local control, and financial condition.

    (4) A summary of the provisions of the charter and bylaws following 

the transfer that differ materially from the charter or bylaws currently 

existing.

    (5) A brief statement by the board of directors of the institution 

setting forth the board's opinion on the advisability of the transfer.

    (6) A presentation of the following financial data:



[[Page 58]]



    (i) An audited balance sheet and income statement and notes thereto 

of the bank or the association, as applicable, for the preceding 2 

fiscal years.

    (ii) If the transfer of authority includes any material transfer of 

assets, a balance sheet and income statement of the bank and the 

association showing its financial condition before the transfer of 

authority and a pro forma balance sheet and income statement for the 

bank or association, as applicable, showing its financial condition 

after the transfer. The statements shall meet the following conditions:

    (A) Such financial statements shall be presented in columnar form, 

showing the financial condition as of the end of the most recent quarter 

of the institution, and operating results since the end of the last 

fiscal year through the end of the most recent quarter of the 

institution.

    (B) If the request is made within 90 days after the end of the 

fiscal year, the institution's financial statements shall be as of the 

most recent fiscal yearend.

    (C) If the request is made within 45 days after the end of the most 

recent quarter, the institution's financial statements shall be as of 

the end of the quarter preceding the quarter just ended.

    (D) If the request is made more than 45 days after the end of the 

most recent quarter, the institution's financial statements shall be as 

of the end of that quarter.

    (E) The financial statements must be accompanied by appropriate 

notes, describing any assets being transferred and including data 

relating to high-risk assets and other property owned, allowance for 

loan losses, and current year-to-date chargeoffs.

    (F) The amount and nature of start-up costs estimated to be 

associated with the transfer.

    (7) A description of the type and dollar amount of any financial 

assistance that has been provided to the bank or the association, as 

applicable, during the past year; the conditions on which the financial 

assistance was extended, the terms of repayment or retirement, if any; 

and, the liability for repayment of this assistance by the bank or the 

association if the transfer were approved.

    (8) A statement as to whether the bank or the association, as 

applicable, would require financial assistance during the first 3 years 

of operation, the estimated type and dollar amount of the assistance, 

and terms of repayment or retirement, if known.

    (9) A statement indicating the possible tax consequences to 

stockholders and whether any legal opinion, ruling or external auditor's 

opinion has been obtained on the matter.

    (10) A presentation of the association's interest rate and fee 

programs, interest collection policy, capitalization plan and other 

factors that would affect a borrower's cost of doing business with the 

association.

    (11) A description of any event subsequent to the date of the last 

quarterly report, but prior to the stockholder vote, that would have a 

material impact on the financial condition of the bank or the 

association.

    (12) A statement of any other material fact or circumstances that a 

stockholder would need in order to make an informed and responsible 

decision, or that would be necessary in order to provide a disclosure 

that is not misleading.

    (13) A form of written proxy, together with instructions on its 

purpose, use and authorization by the stockholder. The proxy 

instructions must ensure the secrecy of the stockholder's ballot if the 

stockholder votes by proxy.

    (14) A copy of the plan of transfer provided for in Sec. 611.520 of 

this part.

    (c) No bank or association director, officer, or employee shall make 

any untrue or misleading statement of a material fact, or fail to 

disclose any material fact necessary under the circumstances to make 

statements made not misleading, to a stockholder of the association in 

connection with a transfer under this subpart.



[53 FR 50393, Dec. 15, 1988, as amended at 58 FR 48790, Sept. 20, 1993]