Industry Alerts & Publications

Federal Regulators Propose a Community Bank Leverage Ratio Capital Framework for Community Banks with Less Than $10 Billion in Assets

December 21, 2018

On November 21, 2018, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation (the “Federal Agencies”) jointly issued a proposed rule to simplify the regulatory capital requirements for eligible community banks and holding companies, as required by Section 201 of the Economic Growth, Regulatory Relief and Consumer Protection Act.

Under the proposed rule, community banks and holding companies that have less than $10 billion in consolidated assets, that meet risk-based qualifying criteria and have a tangible equity ratio (referred to as the “community bank leverage ratio”) greater than 9% would be eligible to opt into a community bank leverage ratio framework. If this election is made, the qualifying community bank or holding company would satisfy its regulatory capital standards by calculating and reporting the community bank leverage ratio instead of the risk-weighted capital ratios and minimum leverage ratio currently required, and would be deemed “well capitalized” under the Federal Agencies’ prompt corrective action framework.

For more information, including a summary of the proposed rule, please see the attached News Alert.

Luse Gorman is Legal Counsel to BSB Bancorp, Inc. in its Proposed Merger with People’s United Financial, Inc.

November 27, 2018

On November 27, 2018, BSB Bancorp, Inc., Belmont, Massachusetts, the holding company for Belmont Savings Bank, and People’s United Financial, Inc., Bridgeport, Connecticut, the holding company for People’s United Bank, announced a definitive merger agreement pursuant to which BSB Bancorp will merge with and into People’s United, with People’s United as the resulting company.

IRS Issues Guidance on New Code Section 162(m)

October 26, 2018

On August 21, 2018, the Internal Revenue Service released Notice 2018-68 which provides guidance regarding the changes made to Section 162(m) of the Internal Revenue Code by the Tax Cuts and Jobs Act of 2017, which is effective for tax years after January 1, 2018.

OCC Releases Proposed Rule to Allow Certain Federal Savings Associations to Elect to Operate with National Bank Powers

September 20, 2018

On September 10, 2018, the Office of the Comptroller of the Currency (the “OCC”) issued a proposed rule implementing Section 206 of the Economic Growth, Relief and Consumer Protection Act, which permits federal savings associations with total consolidated assets of $20 billion or less as of December 31, 2017 to elect to operate with national bank powers without converting to a national bank charter. This election would allow an eligible federal savings association to exceed its statutory commercial and consumer lending limits and avoid compliance with the qualified thrift lender test.

For more information, including a summary of the OCC’s proposed rule, please see the attached News Alert.