PART 209—FEDERAL RESERVE BANK CAPITAL STOCK (REGULATION I) Authority: 12 U.S.C. 12 U.S.C. 222, 248, 282, 286-288, 289, 321, 323, 327-328, and 466. Source: 63 FR 37663, July 13, 1998, unless otherwise noted. § 209.1 Authority, purpose, scope, and definitions. (a) Authority. (b) Purpose. (c) Scope. 1 1 (d) Definitions. (1) Capital Stock and Surplus. 2 2 (2) Dividend proration basis (3) Total consolidated assets (i) A new member “total consolidated assets” means (until the next December 31 Call Report becomes available) the total consolidated assets of the new member at the time of its application for capital stock; and (ii) A surviving stockholder after a merger “total consolidated assets” means (until the next December 31 Call Report becomes available) the total consolidated assets reported by that stockholder pursuant to § 209.3(d)(5). [63 FR 37663, July 13, 1998, as amended by Reg. I, 81 FR 9087, Feb. 24, 2016; 87 FR 2030, Jan. 13, 2022] § 209.2 Banks desiring to become member banks. (a) Application for stock or deposit. 3 4 3 4 (b) Issuance of stock; acceptance of deposit. (c) Location of bank General rule. (2) Board determination. [63 FR 37663, July 13, 1998, as amended at 74 FR 25639, May 29, 2009; Reg. I, 81 FR 9087, Feb. 24, 2016; 82 FR 11502, Feb. 24, 2017; 82 FR 52174, Nov. 13, 2017; 83 FR 58467, Nov. 20, 2018; 84 FR 68326, Dec. 16, 2019; 85 FR 79390, Dec. 10, 2020; 86 FR 69579, Dec. 8, 2021; 87 FR 73635, Dec. 1, 2022; 88 FR 83318, Nov. 29, 2023; 89 FR 88878, Nov. 12, 2024; 90 FR 52232, Nov. 20, 2025] § 209.3 Cancellation of Reserve Bank stock; mergers involving member banks. (a) Application for cancellation. (b) Involuntary termination of membership. (c) Effective date of cancellation. (1) Voluntary withdrawal from membership by a state bank, as of the date of such withdrawal; (2) Merger into, consolidation with, or (for a national bank) conversion into, a nonmember bank, as of the effective date of the merger, consolidation, or conversion; and (3) Involuntary termination of membership, as of the date the Board issues the order of termination. (d) Exchange of stock on merger or change in location; stock adjustment upon merger with a nonmember bank; reporting of total consolidated assets following merger Applications. (ii) Before a merger or consolidation of a member bank and a nonmember bank, a surviving member bank shall file an application with the appropriate Reserve Bank to adjust its Reserve Bank capital stock subscription to equal six percent of the member bank's anticipated post-merger capital and surplus, or, in the case of member bank that is a mutual savings bank, six-tenths of 1 percent of the member bank's anticipated post-merger total deposit liabilities. A mutual savings bank not authorized to purchase Reserve Bank stock shall file an application to adjust its deposit obligation in a like manner. (2) Merger of member banks in the same Federal Reserve District. (3) Change of location or merger of member banks in different Federal Reserve Districts. (i) The Reserve Bank of the member bank's former District, or of the nonsurviving member bank, shall cancel the bank's shares and transfer the amount paid in for those shares, plus accrued dividends (as specified in paragraph (d)(1)(ii) of § 209.4) and subject to paragraph (d)(3) of § 209.4 (or, in the case of a mutual savings bank member not authorized to purchase Federal Reserve Bank stock, the amount of its deposit, adjusted in a like manner), to the Reserve Bank of the bank's new District or of the surviving bank; and (ii) The Reserve Bank of the member bank's new District or of the surviving bank shall issue the appropriate number of shares by crediting the bank with the appropriate number of shares on its books (or, in the case of a mutual savings bank, by accepting the deposit or an appropriate increase in the deposit). (4) Merger with a nonmember bank. (5) Statement of total consolidated assets. (e) Voluntary withdrawal. [63 FR 37663, July 13, 1998, as amended by Reg. I, 81 FR 9087, Feb. 24, 2016; 82 FR 11502, Feb. 24, 2017; 82 FR 52174, Nov. 13, 2017; 83 FR 58467, Nov. 20, 2018; 84 FR 68326, Dec. 16, 2019; 85 FR 79390, Dec. 10, 2020; 86 FR 69579, Dec. 8, 2021; 87 FR 2030, Jan. 13, 2022; 87 FR 73635, Dec. 1, 2022; 88 FR 83318, Nov. 29, 2023; 89 FR 88878, Nov. 12, 2024; 90 FR 52232, Nov. 20, 2025] § 209.4 Amounts and payments for subscriptions and cancellations; timing and rate of dividends. (a) Amount of subscription. (b) Mutual savings banks. (c) Payment for subscriptions. (i) One-half of the subscription amount; and (ii) Accrued dividends equal to the paid-in subscription amount in paragraph (c)(1)(i) of this section multiplied by— (A) In the case of a bank with total consolidated assets of more than $13,182,000,000, an annual rate equal to the lesser of the high yield of the 10-year Treasury note auctioned at the last auction held prior to the date of the last dividend payment and 6 percent, adjusted to reflect the period from the last dividend payment date to the subscription date according to the dividend proration basis. (B) In the case of a bank with total consolidated assets of $13,182,000,000 or less, 6 percent, adjusted to reflect the period from the last dividend payment date to the subscription date according to the dividend proration basis. (2) A Reserve Bank shall obtain settlement for the payment described in paragraph (c)(1) of this section by debit to an account on the Reserve Bank's books or other form of settlement to which the Reserve Bank agrees. (3) Upon payment (and in the case of a national banks in organization or state nonmember bank converting into a national bank, upon authorization or approval by the Comptroller of the Currency), the Reserve Bank shall issue the appropriate number of shares by crediting the bank with the appropriate number of shares on its books. In the case of a mutual savings bank not authorized to purchase Reserve Bank stock, the Reserve Bank will accept the deposit or addition to the deposit in place of issuing shares. The remaining half of the subscription or additional subscription (including subscriptions for deposits or additions to deposits) shall be subject to call by the Board. (4) If the dividend rate applied at the next scheduled dividend payment date is based on a different annual rate than the rate used to compute the amount of the accrued dividend payment pursuant to paragraph (c)(1)(ii) of this section, the amount of the dividends paid at the next scheduled dividend payment date should be adjusted accordingly. The amount of the adjustment should equal the difference between— (i) The accrued dividend payment pursuant paragraph (c)(1)(ii) of this section, and (ii) The result of multiplying the subscription amount paid pursuant to paragraph (c)(1)(i) of this section by the dividend rate applied at the next scheduled dividend payment, adjusted to reflect the period from the last dividend payment date to the subscription date according to the dividend proration basis. (d) Payment for cancellations. (i) Reduce the bank's shareholding on the Reserve Bank's books by the number of shares required to be canceled and shall pay the paid-in subscription of the canceled stock; and (ii) Pay accrued dividends equal to the paid-in subscription of the canceled stock in paragraph (d)(1)(i) of this section multiplied by— (A) In the case of a bank with total consolidated assets of more than $13,182,000,000, an annual rate equal to the lesser of the high yield of the 10-year Treasury note auctioned at the last auction held prior to the date of cancellation and 6 percent, adjusted to reflect the period from the last dividend payment date to the cancellation date according to the dividend proration basis; or (B) In the case of a bank with total consolidated assets of $13,182,000,000 or less, 6 percent, adjusted to reflect the period from the last dividend payment date to the cancellation date according to the dividend proration basis. (2) The sum of the payments under paragraph (d)(1) of this section cannot exceed the book value of the stock. 5 5 (3) In the case of any cancellation of Reserve Bank stock under this Part, the Reserve Bank may first apply such sum to any liability of the bank to the Reserve Bank and pay over the remainder to the bank (or receiver or conservator, as appropriate). (e) Dividend. (i) in the case of a bank with total consolidated assets of more than $13,182,000,000, the lesser of the annual rate equal to the high yield of the 10-year Treasury note auctioned at the last auction held prior to the payment of such dividend and an annual rate of 6 percent, or (ii) in the case of a bank with total consolidated assets of $13,182,000,000 or less, an annual rate of 6 percent. (2) The dividend pursuant to paragraph (e)(1) of this section will be adjusted to reflect the period from the last dividend payment date to the current dividend payment date according to the dividend proration basis. (3) The entitlement to dividends under paragraph (e)(1) of this section shall be cumulative. (f) Annual adjustment to total consolidated [63 FR 37663, July 13, 1998, as amended by Reg. I, 81 FR 9088, Feb. 24, 2016; 82 FR 11502, Feb. 24, 2017; 82 FR 52174, Nov. 13, 2017; 83 FR 58467, Nov. 20, 2018; 84 FR 68326, Dec. 16, 2019; 85 FR 79390, Dec. 10, 2020; 86 FR 69579, Dec. 8, 2021; 87 FR 2030, Jan. 13, 2022; 87 FR 73635, Dec. 1, 2022; 88 FR 83318, Nov. 29, 2023; 89 FR 88878, Nov. 12, 2024; 90 FR 52232, Nov. 20, 2025] § 209.5 The share register. (a) Electronic or written record. (b) Certification.