567.9—Tangible capital requirement.
(a)
Savings associations shall have and maintain tangible capital in an amount equal to at least 1.5% of adjusted total assets.
(b)
The following elements, less the amount of any deductions pursuant to paragraph (c) of this section, comprise a savings association's tangible capital:
(3)
Nonwithdrawable accounts and pledged deposits that would qualify as core capital under § 567.5 of this part; and
(c) Deductions from tangible capital.
In calculating tangible capital, a savings association must deduct from assets, and, thus, from capital:
(1)
Intangible assets (as defined in § 567.1) except for mortgage servicing assets to the extent they are includable in tangible capital under § 567.12, and credit enhancing interest-only strips and deferred tax assets not includable in tangible capital under § 567.12.
(2)
Investments, both equity and debt, in subsidiaries that are not includable subsidiaries (including those subsidiaries where the savings association has a minority ownership interest), except as provided in paragraphs (c)(3) and (c)(4) of this section.
(3)
If a savings association has any investments (both debt and equity) in one or more subsidiary(ies) engaged as of April 12, 1989 and continuing to be engaged in any activity that would not fall within the scope of activities in which includable subsidiaries may engage, it must deduct such investments from assets and, thus, tangible capital in accordance with this paragraph (c)(3). The savings association must first deduct from assets and, thus, capital the amount by which any investments in such a subsidiary(ies) exceed the amount of such investments held by the savings association as of April 12, 1989. Next, the savings association must deduct from assets and, thus, tangible capital the lesser of:
(i)
The savings association's investments in and extensions of credit to the subsidiary as of April 12, 1989; or
(ii)
The savings association's investments in and extensions of credit to the subsidiary on the date as of which the savings association's capital is being determined.
(4)
If a savings association holds a subsidiary (either directly or through a subsidiary) that is itself a domestic depository institution the Office may, in its sole discretion upon determining that the amount of tangible capital that would be required would be higher if the assets and liabilities of such subsidiary were consolidated with those of the parent savings association than the amount that would be required if the parent savings association's investment were deducted pursuant to paragraphs (c)(2) and (c)(3) of this section, consolidate the assets and liabilities of that subsidiary with those of the parent savings association in calculating the capital adequacy of the parent savings association, regardless of whether the subsidiary would otherwise be an includable subsidiary as defined in § 567.1 of this part.