GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1991

S	2 

SENATE BILL 995
Second Edition Engrossed 6/16/92

Short Title:  Bank to Thrift Mergers.	(Public)
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Sponsors: Senators Staton, Carpenter, Conder, and Plyler; Forrester and Bryan.
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Referred to:  Banks and Thrift Institutions.
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May 27, 1992

A BILL TO BE ENTITLED
AN ACT TO ALLOW BANKS AND SAVINGS ASSOCIATIONS TO MERGE OR CONSOLIDATE AND TO TRANSFER ASSETS AND LIABILITIES TO ONE ANOTHER.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 53-1 is amended by adding a new subdivision to read:
"(2a)	Commissioner. – The term ‘Commissioner' means the Commissioner of Banks."
Sec. 2.  G.S. 53-1 is amended by adding a new subdivision to read:
"(5a)	Savings association. – The term ‘savings association,' when used in Article 2A of this Chapter, means a savings and loan association as defined in G.S. 54B-4 or a savings bank as defined in G.S. 54C-4(27)."
Sec. 3.  Chapter 53 of the General Statutes is amended by designating G.S. 53-12 through G.S. 53-17.2 as Article 2A with the heading "Corporate Changes."
Sec. 4.  Article 2A of Chapter 53 of the General Statutes is amended by adding a new section to read:
"§ 53-12.1.  Merger or consolidation of banks and savings associations.
(a)	A bank and a savings association may merge or consolidate.  A bank may transfer its assets and liabilities to a savings association; a savings association may transfer its assets and liabilities to a bank.
(b)	Before a merger, consolidation, or transfer becomes effective, each institution concerned in the merger, consolidation, or transfer shall file with the Commissioner certified copies of all proceedings had by its directors and stockholders or, in the case of a mutual savings association, as defined in G.S. 54B-4, its members.  In the case of banks, the proceedings shall set forth that holders of a majority of the stock of the bank voted in the affirmative on the proposed merger, consolidation, or transfer.  In the case of savings associations, the proceedings shall set forth that the percentage of stockholders or of members required by law also voted in the affirmative on the proposed merger, consolidation, or transfer.  The proceedings shall also contain a copy of the entire agreement between the bank and savings association regarding the merger, consolidation, or transfer.
(c)	No merger, consolidation, or transfer where the surviving institution or transferor is a State chartered bank may be made without the consent of the Commissioner. In these cases and upon filing the proceedings, the Commissioner shall investigate each bank and savings association to determine whether (i) the interests of their depositors, creditors, and stockholders or members are protected, (ii) the merger, consolidation, or transfer is in the public interest, and (iii) the merger, consolidation, or transfer is made for legitimate purposes.  The Commissioner shall consent to or reject the merger, consolidation, or transfer based upon the investigation. The expense of the investigation shall be paid by the bank and savings association involved in the proposed merger, consolidation, or transfer.  The Commissioner shall publish notice of the merger, consolidation, or transfer for four weeks before or after the same is to become effective, at the discretion of the Commissioner, in a newspaper published in a city, town, or county in which each bank and savings association is located, and a certified copy of the notice shall be filed with the Commissioner.
(d)	After the effective date of the merger, consolidation, or transfer, each institution is considered to continue in existence for the next three years in order to preserve the rights of the creditors of each institution."
Sec. 5.  G.S. 53-13 reads as rewritten:
"§ 53-13. Merged or consolidated banks and savings associations deemed one bank or savings association.
In case of merger or consolidation when the agreement of merger or consolidation is made, and a duly certified copy of the agreement is filed with the Secretary of State, together with a certified copy of the approval of the Commissioner to the merger or consolidation, the parties to the merger or consolidation shall be held to be one company, possessed of the rights, privileges, powers, and franchises of the several companies, but subject to all the provisions of law under which it is created. The directors and other officers named in the agreement of consolidation shall serve until the first annual meeting for election of officers and directors, the date for which shall be named in the agreement. On filing the agreement, the property and rights of every kind of the several companies shall be transferred and vested in the surviving company in the case of merger or in the new company in the case of consolidation, and be as fully its property as they were of the companies parties to the agreement."
Sec. 6.  G.S. 53-17 reads as rewritten:
"§ 53-17. Fiduciary powers and liabilities of banks, trust companies, or savings associations merging or transferring assets and liabilities.
Whenever any bank, trust company, or savings association, organized under State or federal law, and doing business in this State, consolidates or merges with or sells to and transfers its assets and liabilities to any other bank, trust company, or savings association doing business in this State, as provided by State or federal law, all the then existing fiduciary rights, powers, duties and liabilities of the consolidating or merging or transferring institutions, including the rights, powers, duties and liabilities as executor, administrator, guardian, or trustee, or in any other fiduciary capacity, whether under appointment by order of court, will, deed, or other instrument, shall, upon the effective date of the consolidation or merger or sale and transfer, vest in the transferee institution or the consolidated or merged institution, and that institution is substituted for and shall have all the rights and powers of the transferring institution."
Sec. 7.  This act is effective upon ratification.