Sec. 36a-125. (Formerly Sec. 36-193u). Merger and consolidation of Connecticut banks.
Sec. 36a-125. (Formerly Sec. 36-193u). Merger and consolidation of Connecticut banks. (a) Except as provided in subsection (i) of this section, any two or more
Connecticut banks may, with the approval of the commissioner, merge or consolidate
into a single Connecticut bank. As used in this section, a "constituent temporary bank"
means a constituent Connecticut bank that has a temporary certificate of authority but
does not have a final certificate of authority to commence business, and a "constituent
final bank" means a constituent Connecticut bank that has a final certificate of authority
to commence business. Any plan of merger or consolidation approved by the commissioner shall specify whether the resulting bank shall operate as a bank and trust company,
or a capital stock or mutual savings bank or savings and loan association.
(b) The governing board of each constituent final bank and the organizers of each
constituent temporary bank proposing to merge or consolidate shall enter into an
agreement, approved and executed by a majority of the governing board or all of the
organizers, as the case may be, of each bank, prescribing the terms and conditions of
such proposed merger or consolidation. Such agreement shall include the proposed
certificate of incorporation of the resulting bank and shall state the name and corporate
form of the resulting bank, the town in which its main office is located, the minimum
and maximum number of directors and any other details necessary to effectuate such
proposed merger or consolidation. In the case of a capital stock resulting bank, the
agreement shall include the amount of capital stock with which the resulting bank shall
commence business, the number of shares into which the capital stock is to be divided
and the manner of converting the shares of the capital stock of the constituent banks
into shares of the capital stock of the resulting bank and, if any shares of the capital
stock of any of the constituent banks are not to be converted solely into shares of the
capital stock of the resulting bank, the amount of cash, property or other securities of
the resulting bank or the shares or other securities of any other corporation which the
holders of such shares are to receive in exchange for or upon the conversion of such
shares, which cash, property or other securities of the resulting bank, or shares or other
securities of any other corporation, may be in addition to or in lieu of the shares of the
resulting bank. In the case of a merger or consolidation involving a mutual constituent
bank and a capital stock constituent bank, if the resulting bank is to be a mutual bank,
the agreement shall include the amount of cash or property of the resulting mutual bank
which the holders of the shares of the capital stock constituent bank are to receive in
exchange for such shares.
(c) Such agreement may provide for the effective date of the proposed merger or
consolidation, which shall not be earlier than the filing of the agreement and the commissioner's approval in the office of the Secretary of the State. If the agreement does not
provide an effective date, the merger or consolidation shall become effective on the first
business day following the filing of the agreement and approval in the office of the
Secretary of the State. In the case of capital stock constituent banks, the merger or
consolidation agreement may provide that no new certificates of stock need be issued
to holders of stock of the constituent bank which continues its corporate existence and
that the certificates of stock of any other constituent bank may be deemed to be the
certificates of stock of the resulting bank or any other corporation, provided that holders
of certificates of stock of such other constituent bank shall be entitled to exchange
their certificates of stock for certificates of stock of the resulting bank or such other
corporation.
(d) In addition to the vote of the governing board or organizers as required by subsection (b) of this section, in the case of a capital stock constituent final bank, the merger
or consolidation shall be approved by the affirmative vote of the holders of at least two-thirds of the issued and outstanding shares of each class of the capital stock. Such vote
shall be taken at separate meetings of the shareholders called for the purpose of considering the proposed merger or consolidation, and not less than ten days' notice of the time,
place and purpose of such meeting shall be mailed to the last-known address of each
shareholder. Any person entitled to notice under this subsection may waive such notice
in accordance with section 33-700. The vote may approve the merger or consolidation
either upon the terms of the agreement as approved and executed by the governing board
or organizers or with such additions or amendments as may be so approved at such
shareholders' or incorporators' meetings of each of the constituent banks.
(e) In the case of a merger or consolidation involving at least one mutual constituent
bank, after adoption of the merger or consolidation agreement, notice thereof shall be
published once each week for two consecutive weeks in one or more newspapers having
a circulation in the town in which the main office of each such mutual constituent bank
is located. Copies of the record of the meetings adopting the agreement of merger or
consolidation, and setting forth the agreement in full, attested by the secretary and president of the respective meetings, shall be certified to and filed in the office of each such
mutual constituent bank, there to remain, subject to public inspection, for fifteen days.
(f) Upon application by the constituent banks, and upon receipt of a copy of the
agreement of merger or consolidation, certified by the secretaries of the respective constituent final banks and certified by the agents for the organizers of the respective constituent temporary banks as having been duly approved in accordance with subsection (b)
of this section, the commissioner shall determine whether such merger or consolidation
will promote public convenience, whether benefits to the public clearly outweigh possible adverse effects, including, but not limited to, an undue concentration of resources
and decreased or unfair competition, and whether the terms thereof are reasonable and
in accordance with law and sound public policy. The commissioner, if the commissioner
so determines, shall approve the merger or consolidation. The commissioner shall not
approve such merger or consolidation: (1) If it involves the acquisition of a Connecticut
bank that has not been in existence and continuously operating for at least five years,
unless the commissioner waives this requirement; (2) if the resulting bank including all
insured depository institutions which are affiliates of the resulting bank, upon consummation of the merger or consolidation, would control thirty per cent or more of the total
amount of deposits of insured depository institutions in this state, unless the commissioner permits a greater percentage of such deposits; or (3) if the programs, policies and
procedures relating to anti-money-laundering activities of the constituent banks, or the
proposed programs, policies and procedures of the resulting bank relating to anti-money-laundering activities, are inadequate, or the constituent banks do not have a record of
compliance with anti-money-laundering laws and regulations. In addition, the commissioner shall not approve such merger or consolidation unless the commissioner considers
whether: (A) The investment and lending policies of the constituent banks, or the proposed investment and lending policies of the resulting bank, are consistent with safe
and sound banking practices and will benefit the economy of this state; (B) the services
or proposed services of the resulting bank are consistent with safe and sound banking
practices and will benefit the economy of this state; (C) the constituent banks have
sufficient capital to ensure, and agree to ensure, that the resulting bank will comply with
applicable minimum capital requirements; (D) the constituent banks have sufficient
managerial resources to operate the resulting bank in a safe and sound manner; and (E)
the proposed merger or consolidation will not substantially lessen competition in the
banking industry of this state. The commissioner shall not approve such merger or consolidation unless the commissioner makes the findings required by section 36a-34 and,
in the case of a merger or consolidation of a mutual banking institution, determines
that the interests of depositors are protected or served by the agreement of merger or
consolidation. After approval of the merger or consolidation by the commissioner, a
copy of the agreement and a copy of the commissioner's approval shall be filed in the
office of the Secretary of the State. The resulting bank shall not commence business
unless its insurable accounts and deposits are insured by the Federal Deposit Insurance
Corporation or its successor agency.
(g) Upon the completion of a merger or consolidation (1) the constituent banks shall
become a Connecticut bank by the name provided in the certificate of incorporation of
the resulting bank; (2) the corporate existence of the constituent banks shall be continued
by and in the resulting bank; (3) the resulting bank shall possess all the rights, privileges
and franchises of each of the constituent banks including the authority to exercise fiduciary powers without further express authority of the commissioner, except that the
resulting bank shall be empowered to exercise only those powers that are provided by
the laws of this state to the resulting bank and trust company, savings bank or savings
and loan association, as the case may be; (4) the entire assets, business, good will and
franchises of each of the constituent banks shall be vested in the resulting bank without
any deed or transfer, provided the constituent banks may execute such deeds or instruments of conveyance as may be convenient to confirm the same; (5) the resulting bank
shall assume and be liable for all debts, accounts, undertakings, contractual obligations
and liabilities of the constituent banks and shall exercise and be subject to all the duties,
relations, obligations, trusts and liabilities of each of the constituent banks, whether as
debtor, depository, registrar, transfer agent, executor, administrator, trustee or otherwise, and shall be liable to pay and discharge all such debts and liabilities, to perform
all such duties and to administer all such trusts in the same manner and to the same
extent as if the resulting bank had itself incurred the obligation or liability or assumed
the duty, relation or trust; (6) all rights of creditors and all liens upon the property of
any of such constituent banks shall be preserved unimpaired; and (7) the resulting bank
shall be entitled to receive, accept, collect, hold and enjoy any and all gifts, bequests,
devises, conveyances, trusts and appointments in favor of or in the name of any of such
constituent banks whether made or created to take effect prior to or after such merger
or consolidation, and the same shall inure to and vest in such resulting bank. No suit,
action or other proceeding pending at the time of the merger or consolidation before
any court or tribunal in which any of such constituent banks is a party shall be abated
or discontinued because of such merger or consolidation but may be continued and
prosecuted to final effect by or against the resulting bank. The resulting bank shall have
the right to use the name of any of the constituent banks whenever it can do any act or
discharge any duty or obligation or endorse any right under such name more conveniently or with greater advantage to itself or to any person to whom it holds any relation
of trust or owes any duty under any contract or conveyance, and no other corporation
shall take or use the name of any of such constituent banks.
(h) Upon the effectiveness of the agreement of merger or consolidation, the shareholders, if any, of the constituent banks, except to the extent that they have received
cash, property or other securities of the resulting bank or shares or other securities of
any other corporation in exchange for or upon conversion of their shares, shall be shareholders of a capital stock resulting bank. Unless such agreement otherwise provides,
the resulting bank may require each shareholder to surrender such shareholder's certificates of stock in the constituent bank and in that event no shareholder, until such surrender of that shareholder's certificates, shall be entitled to receive a certificate of stock of
the resulting bank or to vote thereon or to collect dividends declared thereon, or to receive
cash, property or other securities of the resulting bank, or shares or other securities of
any other corporation. Any shareholder of any such constituent bank is entitled to assert
appraisal rights and to obtain payment of the fair value of such shareholder's shares
under sections 33-855 to 33-872, inclusive. The rights and obligations of shareholders
who assert appraisal rights and the bank shall be determined in accordance with said
sections. The stock of a capital stock resulting bank up to an amount of the combined
stock of the constituent banks shall be exempt from any franchise tax.
(i) A mutual savings bank or a mutual savings and loan association and a capital
stock bank shall not merge or consolidate if the resulting bank is to be a capital stock
bank, unless prior to or as part of such merger or consolidation, the mutual savings bank
or mutual savings and loan association first converts to a capital stock bank in accordance
with section 36a-136, provided the commissioner may waive any of the provisions of
section 36a-136 if the commissioner certifies in writing that the protection of depositors
and other creditors of one of the merging or consolidating banks or associations requires
that the merger or consolidation proceed without delay. No such conversion shall be
required if the resulting bank is to be a mutual savings bank or a mutual savings and
loan association.
(1949 Rev., S. 5811; 1955, S. 2663d; 1963, P.A. 74, S. 5; 251, S. 2; 1969, P.A. 598, S. 5, 6; 1971, P.A. 327, S. 1-3;
P.A. 77-614, S. 587, 610; P.A. 78-95, S. 1-5; 78-303, S. 42-44, 85, 136; P.A. 83-411, S. 11, 12, 20; P.A. 87-9, S. 2, 3;
P.A. 88-65, S. 32; P.A. 91-189, S. 4, 13; 91-357, S. 43, 78; P.A. 92-12, S. 58; P.A. 94-122, S. 61, 340; P.A. 95-155, S. 10,
29; P.A. 96-20, S. 1., 2; 96-54, S. 1, 9; 96-271, S. 198, 199, 254; P.A. 98-260, S. 2; P.A. 02-47, S. 5; P.A. 03-259, S. 8.)
History: 1963 acts deleted provisions re change in name, amount of stock, etc. by corporation following merger or
consolidation in Subsec. (3) and deleted reference to number of shares "of the par value of not less than ten dollars each"
in Subsec. (2); 1969 act clarified action where shares are not to be converted into shares of new corporation and specified
that new certificates of stock need not be issued in certain instances under Subsec. (2) and amended Subsec. (5) to reflect
new provisions of Subsec. (2); 1971 act substituted "signed by a majority of the board of each corporation" for "signed
by them" in Subsec. (2) and deleted reference to banking commission's findings under Subsec. (3) and deleted reworded
Subsec. (3) and specified that conditions of federal law must be met as condition for approval of banking commission and
that preemptive rights of stockholders are to be determined pursuant to Sec. 33-343 and replaced Subsec. (5) provisions
re procedure for compensation awarded stockholders who object to consolidation or merger with new provisions; P.A. 78-95 amended provisions to distinguish between temporary and final corporations and added Subsec. (6); P.A. 78-303
substituted banking commissioner for banking commission for conformity with changes enacted in P.A. 77-614; P.A. 83-411 amended Subsec. (1) to substitute "capital stock banks" for "banks, trust companies and banks and trust companies"
and to require plan of merger or consolidation to specify type of corporation which will result and amended Subsec. (3)
to add reference to approval by Federal Savings and Loan Insurance Corporation; Sec. 36-92 transferred to Sec. 36-193u
in 1985; (Revisor's note: Pursuant to P.A. 87-9 "banking commissioner" was changed editorially by the Revisors to
"commissioner of banking"); P.A. 88-65 narrowed the application of the section by deleting a reference to industrial banks
in Subsec. (1); P.A. 91-189 amended Subsec. (3) by adding factors to be considered and findings to be made by the
commissioner prior to approving a merger or consolidation and, in conjunction with P.A. 91-357, deleting reference to
Federal Savings and Loan Insurance Corporation; P.A. 92-12 redesignated Subsecs., Subdivs. and Subparas. and made
technical changes; P.A. 94-122 rewrote Subsec. (a) for clarity, deleted the requirement that three-fourths of the merged or
consolidated bank's directors be Connecticut residents and added the requirement that the agreement include the proposed
certificate of incorporation and any other necessary details in Subsec. (b), divided Subsec. (b) into Subsecs. (b) and (c),
divided former Subsec. (c) into Subsecs. (d) and (f), made the effective date of the agreement the first business day after
it is filed and approved in the Secretary of the State's office, unless otherwise specified, in Subsec. (c), renumbered former
Subsec. (c) as Subsec. (d), increased the notice required for shareholders' meeting from five to ten days in Subsec. (d),
added new Subsec. (e) re notice of the agreement's adoption and the availability of certified copies of shareholders'
meetings, added language re federal and FDIC approval of the merger or consolidation and replaced community reinvestment provisions with a reference to Sec. 36a-34 in new Subsec. (f), renumbered former Subsecs. (d) and (e) as Subsecs.
(g) and (h), deleted former Subsec. (f), added new Subsec. (i) re merger of a mutual institution with a capital stock bank,
and made technical changes, effective January 1, 1995; Sec. 36-193u transferred to Sec. 36a-125 in 1995; P.A. 95-155
amended Subsec. (f) by adding Subdiv. (1) re the five-year requirement and Subdiv. (2) re controlling deposits, and by
changing former Subdivs. (1) to (5), inclusive, to Subparas. (A) to (E) within new Subdiv. (3), and made technical amendments to Subsecs. (b), (c) and (h), effective June 27, 1995 (Revisor's note: In Subsec. (h) the phrase "Any shareholder of
any of such constituent bank who" was changed editorially by the Revisors to "Any shareholder of any such constituent
bank who"); P.A. 96-20 amended Subsec. (b) requiring that certain merger agreements between mutual constituent banks
and capital stock constituent banks include amount of cash or property which shareholders in capital stock constituent
bank are to receive for their shares and added language in Subsec. (i) to let capital stock banks and mutual banks merge
without first converting stock if the resulting bank is a mutual savings bank or mutual savings and loan, effective April
29, 1996; P.A. 96-54 made a technical change in Subsec. (f), effective May 7, 1996; P.A. 96-271 amended Subsec. (d) to
replace reference to Sec. 33-308 with Sec. 33-700 and amended Subsec. (h) to replace provision re the right of any shareholder of any such constituent bank to object and demand the constituent bank to purchase the shareholder's shares at fair
value, and the procedure therefor, with provision authorizing any shareholder of any such constituent bank who dissents
from the merger or consolidation to assert dissenters' rights under Secs. 33-855 to 33-872, inclusive, and replace reference
to Sec. 33-374 with reference to Secs. 33-855 to 33-872, inclusive, effective January 1, 1997; P.A. 98-260 amended Subsec.
(f) by deleting requirement for shareholder approval prior to commissioner's approval, by deleting requirement for notice
that all federal approvals have been obtained and any federal waiting period has expired, and by adding requirement for
FDIC insurance prior to commencing business; P.A. 02-47 amended Subsec. (h) by deleting provisions re dissenter's rights
and adding provisions re assertion of appraisal rights and to obtain payment of fair market value of shareholder's shares;
P.A. 03-259 added Subsec. (f)(3) re anti-money-laundering activities and compliance.
Annotations to former section 36-92:
Cited. 31 CS 407.
Subsec. (1):
Distinction between merger and consolidation. 116 C. 183.
Subsec. (5):
Cited. 1 CA 14.