SEC, OTS, FDIC Issue Investor Alert
The Securities and Exchange Commission, the Office of Thrift Supervision and the Federal Deposit Insurance Corporation held a joint press conference to announce the issuance of an Investor Alert that is geared for depositors of mutual savings institution that are in the process of conversion. Issued along with the Alert was a document entitled” Mutual-to-Stock” Conversions: Tips for Investors. This document reminds depositors that only legitimate depositors of the converting institution are eligible account holders for purposes of participating in the subscription offering. There have been several instances in which non depositors have worked with legitimate account holders to purchase shares in the subscription fraudulently. The document provides background on some of the cases. Click here for a copy of the alert.

FASB Issues Exposure Draft on Business Combinations
The Financial Accounting Standards Board has issued the long-awaited Exposure Draft on Business Combinations. This Exposure Draft will replace FASB’s Statement No. 141. FASB will accept comments until October 28, 2005. FASB also announced that it would hold a roundtable as part of the comment process. ACB plans to be involved in every step of the comment process, including participating in the roundtable and submitting a letter.

The Exposure Draft provides that in a combination of only mutual entities in which the only consideration is the exchange of the acquirer’s and acquiree’s member interests, the fair value of the acquiree and the fair value of the member interests exchanged as consideration are presumed to be equal. The amount equal to the fair value of the acquiree shall be recognized as a direct addition to capital or equity, not retained earnings. The Appendix provides some further measurement guidance on determining the fair value of a mutual entity in a combination. Click here for the Exposure Draft.

OTS Certifies Conversion Vote
On June 29, 2005, the Office of Thrift Supervision certified the member vote in the proposed conversion of Community Credit Union in Plano, Texas to a state-chartered mutual savings bank. The OTS found that Community Credit had complied with all applicable requirements. Click here to read the OTS order.

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