§ 19-7-6 - Interstate purchases of assets and assumptions of liabilities.
SECTION 19-7-6
§ 19-7-6 Interstate purchases of assetsand assumptions of liabilities. – (a) In addition to any other power granted under the laws of this state, afinancial institution may, with the approval of the director or the director'sdesignee, purchase all or part of the assets of, and assume all or part of theliabilities of, an out-of-state bank and operate any office or branch of theout-of-state bank acquired in connection with the out-of-state bank.
(b) An out-of-state bank may, with the approval of thedirector or the director's designee, purchase substantially all of the assetsand assume substantially all of the liabilities of a financial institution andoperate any office or branch of the bank acquired in connection therewith;provided, however, that the law of the state in which the out-of-state bank hasits principal office:
(1) Permits such a purchase of assets, assumption ofliabilities, and operation of offices and branches; and
(2) Authorizes, under conditions not substantially morerestrictive than those imposed by the laws of this state, as determined by thedirector or the director's designee, a financial institution to purchaseassets, assume liabilities, and operate offices and branches in another state.No out-of-state bank shall apply to the director or his or her designee forapproval of such a purchase, assumption, and operation unless the purchase,assumption, and operation shall first be approved as follows:
(i) With respect to financial institutions having capitalstock, by the board of directors and shareholders pursuant to the applicableprovisions of § 7-1.2-1102, except that the purchase, assumption, andoperation must receive the affirmative vote of two-thirds (2/3) or more of theshareholders entitled to vote thereon;
(ii) With respect to a mutual savings bank organized underthis title, by a two thirds (2/3) vote of the board of trustees thereof and amajority vote of the depositors of the mutual savings bank present in person orby proxy, at a meeting called by the board of trustees; and
(iii) With respect to each such bank not organized under thelaws of this state, in accordance with the applicable provisions imposed by thelaws under which it is organized.
(c) Upon the filing of an application to purchase assets andassume liabilities under this section, together with duplicate originals of theagreement of purchase and assumption entered into in connection therewith, thedirector or the director's designee shall furnish the applicant a form ofnotice specifying the names of the purchasing financial institution and theselling financial institution and the location of the offices or branches to beacquired and assigning a date and place for public hearing on the application.The applicant shall publish the notice at least once a week for three (3)successive weeks, in one or more newspapers designated by the director or thedirector's designee. Upon a finding that the public interest so requires, thedirector or the director's designee may lessen the period and the mannerprescribed for giving notice.
In determining whether to approve the application, thedirector or the director's designee shall consider whether the purchase,assumption, and operation is consistent with the safety and soundness of, andthe convenience and advantage of the communities served by, each financialinstitution that is a party to the agreement. The procedures for conductinghearings by the director or the director's designee and the rights of appealfrom decisions of the director or the director's designee shall be governed bythe applicable provisions of this title. If the director or the director'sdesignee approves the application, he or she shall endorse his or her approvalupon each original of the agreement of purchase and assumption and shalldeliver the agreement to the applicant. One original of the agreement bearingthe director's or the director's designee's approval in writing shall be filedwith the director or the director's designee and the other shall be retained bythe applicant as evidence of the approval. The applicant shall cause notice ofany abandonment of a transaction approved pursuant to this subsection to befiled with the director or the director's designee, and in the event of suchabandonment, any approval granted hereunder shall be null and void.
(d) A shareholder of a selling financial institution shallhave the right to dissent from the corporate action involved in accordance withthe provisions of § 7-1.2-1201 and on the terms and conditions set forthin § 7-1.2-1202. No shareholder or depositor of a financial institutionwithout capital stock that is a party to an agreement of purchase andassumption shall have any appraisal or dissenting right with respect to thiscorporate action.
(e) An out-of-state bank that is to be the purchasing bankshall file the following with the director or the director's designeecontemporaneously with the filing of any application for approval under thissection:
(1) An agreement that it may be served with process in thisstate in any proceeding for the enforcement of any obligation arising out ofits business transacted in this state and any obligation assumed by it; and
(2) An irrevocable appointment of the director as its agentto accept service of process in any proceeding in the courts of this state orthe courts of the United States situated in this state.
(f) The offices or branches acquired pursuant to an agreementof purchase and assumption approved by the director or the director's designeemay be operated as branch offices of the purchasing bank with the writtenpermission of, and under conditions, if any, approved by the director or thedirector's designee, whether or not the branch offices shall be in more thanone state.