Filing Exchange Act reports without a holding company

By Brittany McIntosh

Since the Bank of the Ozarks—now known as Bank OZK—reorganized and dissolved its holding company in 2017, banks and their advisers have debated the need for a bank to have a holding company, and the advantages and disadvantages for doing so. However, what remains unclear to many bank management teams, in-house attorneys and boards of directors are the practical points and advantages related to being a publicly traded bank rather than a publicly traded bank holding company.

In June 2017, Bank of the Ozarks Inc. reorganized and merged with and into its wholly owned subsidiary, Bank of the Ozarks. As a result of the reorganization, Bank of the Ozarks shed its holding company, began trading on the Nasdaq Stock Market as the publicly traded entity, became a successor issuer of the holding company for purposes of the Securities Exchange Act of 1934, and began filing its Exchange Act reports (Form 10-K, Forms 10-Q, Forms 8-K, etc.) with the FDIC rather than the Securities and Exchange Commission.

In October 2017, BancorpSouth Inc. followed and reorganized, with BancorpSouth Bank surviving and continuing to trade on the New York Stock Exchange. Thereafter, in 2021, BancorpSouth Bank survived its merger with Cadence Bancorporation, changed its name to Cadence Bank, and the surviving bank continues to file its Exchange Act reports with the FDIC. Additionally, in September 2018, Zions Bancorporation completed its internal reorganization and merged with Zions Bancorporation, N.A. and files its Exchange Act reports with the OCC but continues to file with the SEC as a “voluntary filer.”

Exchange Act filings with the FDIC

Under Section 12(i) of the Exchange Act, the FDIC, OCC and the Federal Reserve Board of Governors are vested with the powers, functions and duties of the SEC to administer and enforce sections of the Exchange Act. In January 2022, the FDIC said that there are 15 banks that file Exchange Act reports with the regulator.

Because it is more common for the FDIC to exercise these powers, this article will only address the practical points (and certain advantages) of being a publicly traded bank that files Exchange Act reports with the FDIC.

Here are a few practical considerations for banks considering such a reorganization.

How to file

All Exchange Act filings should be prepared in paper form in accordance with guidelines and requirements set forth in the applicable SEC regulations and submitted to the FDIC Accounting and Securities Disclosure Section. However, the bank may voluntarily file such reports electronically using the FDICconnect portal.

To make a filing, banks first must have access to the Part 335 system of FDICconnect. Once you have access, you go to the section titled Reporting Required by the Securities Exchange Act under the “Applications, Filings and Institution Information” tab and follow the instructions and menus with respect to the specific filing. FDICconnect is only accessible by FDIC-insured institutions; thus, outside counsel and filing agents will not be able to make filings on behalf of the bank. Exchange Act reports are reflected immediately on the FDIC’s website when submitted electronically during each business day from 8 a.m. until 10 p.m. ET. All Exchange Act filings not received during such hours on business days will be posted to the FDIC’s website at 8 a.m. ET on the following business day. Once public, Exchange Act reports indicate the date filed but are not time stamped.

Costs and time savings

There is no equivalent to the SEC’s EDGAR, the Electronic Data Gathering, Analysis and Retrieval system, at the FDIC. Exchange Act filers simply upload a PDF of the filing or file a paper copy, which saves time and substantial costs. There is also no equivalent to iXBRL tagging for these FDIC filings and no required hyperlinking to other filed documents. And per statute, filing fees will generally not be charged relative to any filings or submissions of Exchange Act reports made with the FDIC.

Special considerations

There’s no need for Forms S-1, S-3, S-4 or S-8 registration statements, but a Form 10 is still required. Securities issued by a bank are “exempt securities” under Section 3(a)(2) of the Securities Act and under most state securities and “blue sky” laws. Accordingly, there is no need to register offers and sales of bank securities under the Securities Act as they are “exempt securities.” Although a Form S-1 is not required, bank issuers going public for the first time will need to file a concurrent Form 10 registration statement to register under the Exchange Act, which is subject to review by the FDIC.

When issuing bank securities, a bank may have to follow securities offering rules from, and pay filing fees to, bank regulators. The bank regulators’ practice may differ with respect to review and comment on such offering materials. Generally, the absence of filing and potential review of offering materials allows all banks the ability to quickly access the capital markets in a manner similar to large SEC registrants that have effective shelf registration statements.

Preliminary proxy statements are required

The FDIC’s practice differs from the SEC’s practice with respect to proxy statements because all proxy statements are required to be filed in preliminary form with the FDIC for review by the staff, whose comments should be received and considered before definitive copies are filed and distributed.

Brittany McIntosh is a partner at Nelson Mullins, where her practice focuses on banking mergers and acquisitions, securities offerings, SEC reporting requirements, stock exchange listing compliance, and corporate governance and general corporate matters.