Chapter 1301:2-2 -- Reserve Funds

(A) Net worth as referred to in 1151.33 of the revised code shall consist of the following:

(1) Common stockholders’ equity, which is common stock and related surplus, undivided profits, capital reserves that represent a segregation of undivided profits, and foreign currency translation adjustments, less net unrealized losses on available-for-sale securities with readily determinable fair values;

(2) Noncumulative perpetual preferred stock, including any related surplus where the issuer has the option to waive payment of dividends and where dividends waived do not accumulate to future periods or represent a contingent claim on the issuer, but is not preferred stock where the dividend is reset periodically based, in whole or in part, on the savings and loan association’s current credit standing, including, but not limited to, auction rate, money market, and remarketable preferred stock regardless of whether the dividends are cumulative or noncumulative;

(3) Minority interests in consolidated subsidiaries, unless the minority interests fail to provide meaningful capital support to the consolidated savings and loan association.

(B) The minimum net worth of a savings and loan association with a composite rating of one as defined in the Uniform Financial Institutions Rating System shall be not less than three per cent of adjusted total assets.

(C) For all other savings and loan associations not meeting the conditions set forth in paragraph (A) of this rule, the minimum acceptable net worth or capital requirement shall be not less than four per cent of total assets.

(D) Nothing is this or any other rule shall preclude the superintendent from requiring a savings and loan association to maintain a higher net worth level commensurate with the savings and loan association’s risk profile.

HISTORY: Prior Eff. 12-27-84, 1-17-92; Replaces 1301:2-1-11, eff. 6-3-04

Rule promulgated under: RC 119.03

Rule authorized by: RC 1155.20

Rule amplifies: RC 1151.33

R.C. 119.032 review dates: 05/24/2009

(A) The reserves required pursuant to section 1151.33 of the Revised Code shall be 0 per cent of total assets for savings and loan associations that meet all of the following conditions:

(1) Maintain reserves as required by federal law;

(2) Maintain all appropriate allocations for loan and lease loss that are consistent with generally accepted accounting principles, unless the superintendent has determined otherwise for a savings and loan association.

(B) For all savings and loan associations that do not meet the requirements of paragraph (A) of this rule, the reserve required by 1151.33 of the Revised Code shall be at least 3 percent of total assets, unless the superintendent approves a lower percentage for a savings and loan association.

(C) Savings and loan associations may include permanent or capital stock, contributed surplus, undivided profits, specific and general loss or valuation reserves, and any other nonwithdrawable accounts as reserves meeting the requirement of paragraph (B) of this rule.

HISTORY: Prior Eff. 12-27-84, 1-17-92; Replaces 1301:2-1-11, eff. 6-3-04

Rule promulgated under: RC 119.03

Rule authorized by: RC 1155.20

Rule amplifies: RC 1151.33

R.C. 119.032 review dates: 05/24/2009