Bank Safe Harbor 401(k)-funding 3% with bank stock from holding compan

[Guest SHP]

Start up bank wants to establish Safe Harbor 401(k) Plan and fund 3% Employer contribution with bank stock contributed and expensed by bank holding company (will keep bank earnings up for first several years). I was thinking that this was ok and that bank stock would still be considered qualifying employer securities (ok to fund Safe Harbor obligation) but thought someone might have been involved with something similar and could share thoughts/problems with doing so.

Aware that bank stock (ER contributions) will not be afforded any 404© protection (employee deferrals will be invested in mutual funds), but wondering about other issues to consider.