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Summer 2014

Cyber Risks: Board Responsibilities

By Anthony Spina and Jeffery E. Smith

With developments over the recent years that include a number of high profile data breaches (e.g., Snowden and Target), the National Institute of Standards and Technology release of its recommendations titled the "Framework for Improving Critical Infrastructure Cybersecurity," and the enhanced regulatory exam focus on identifying an institution’s preparation and protections related to cyber risks, institutions and boards that fail to focus and create plans to deal with cyber risks do so at their own peril. Read more.

Mutuals: A Capital Conundrum

By Jeffery E. Smith

Life as a mutual thrift is a good news/bad news proposition.

The "good news" is that you’re not constantly facing shareholder pressures for performance and returns because you don’t have shareholders to worry about.

The "bad news" is that your only current direct option for raising capital, when needed or desired, is severely restricted to the long-term mechanism of accumulating retained earnings. Read more.

Raising Capital Through Convertible Preferred Stock Offerings

By Anthony D. Weis

While the "big" banks and bank holding companies have been issuing preferred stock to raise capital for years, we have recently seen increased interest from community banks and bank holding companies in issuing convertible preferred stock to raise capital.  In the past 12 to 18 months, there have been a number of convertible preferred stock offerings, including both registered offerings and private placements, by community bank and thrift holding companies.  The capital raised in these offerings has been used to bolster regulatory capital levels, to repay outstanding TARP and debt obligations, or to provide additional capital for growth and expansion (including potential acquisitions). Read more.

Federal Reserve Identifies Common Issues in the Application Process

By Kimberly J. Schaefer and Lauren Brown

On February 24, 2014, the Federal Reserve provided better insight into issues that may delay or prevent its approval of applications and notices relating to transactions, including mergers and branch or line of business expansions. The Federal Reserve’s supervisory letter also announced that it would begin publishing a semi-annual report in the second half of 2014 to enhance transparency in the bank applications and notice process. The report will identify the primary issues leading to the denial or withdrawal of filings and include statistics on the length of time taken to process applications as well as the volume of approvals, denials and withdrawals. Read more.

About the Vorys Banking Group

With nearly 20 lawyers dedicated to our banking practice, we have hundreds of years of combined practical, hands-on experience in the banking industry. We have been named a “Top Lead Legal Advisor” by American Banker magazine and a Go-To Law Firm® in banking and finance, securities and corporate transactions by Fortune 500 general counsel. Our group has extensive experience with all aspects of bank corporate and regulatory legal matters, and our attorneys are in constant contact with senior representatives of state and federal banking agencies concerning a diverse variety of significant client matters. We have been intimately involved in the comprehensive rewrite of Ohio banking laws, currently underway with the Ohio Division of Financial Institutions. In fact, since the inception of this project, one of our lawyers, along with representatives from the Ohio Division of Financial Institutions and the Ohio Bankers League, has been a member of the four-person team tasked with handling the rewrite. We represent public and non-public institutions, from community banks and thrifts to large, multinational financial institutions throughout the United States including clients in Ohio, Washington, D.C., Maryland, Virginia, Arizona, Florida, Indiana, Michigan, Kentucky, Missouri, New York, North Carolina, South Carolina and West Virginia. We assist our clients with bank, thrift, holding company and non-bank affiliate formations; securities law matters; board governance and education; regulatory enforcement actions involving state and federal agencies; mergers, acquisitions and divestitures; branch acquisitions and divestitures; regulatory compliance; capitalization, recapitalization and private equity as well as debt transactions; employment law matters; executive compensation and benefit plans; tax matters; and the negotiation of all types of contracts. We also represent financial institutions and other institutional lenders, as well as borrowers, in all types of complex commercial and real estate financings, bankruptcies and restructurings.

If you have an idea for an article you would like us to pursue, please contact your Vorys attorney. We hope you enjoy the read.



Aaron S. Berke

Elizabeth Turrell Farrar

Jason L. Hodges

Michael D. Martz

Kimberly J. Schaefer

Jeffery E. Smith

Anthony Spina

J. Bret Treier

Anthony D. Weis



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This alert is for general information purposes and should not be regarded as legal advice. As always, please let us know if you want more information or have questions about how these developments apply to your situation.