(1)The board of directors of a
state bank shall meet at least once each calendar quarter, unless the banking
board directs that meetings be held on a more frequent basis, or a less frequent
basis in the case of disaster or emergency. The banking board, the commissioner, or
an executive officer may call a special meeting. A majority of the board of directors
constitutes a quorum. The board shall keep minutes of each meeting, including a
record of attendance. Any director who fails to attend meetings of the board of
directors for three consecutive months automatically ceases to be a director,
unless the absence is satisfactorily explained to the banking board or the
commissioner, who shall, in that event, notify the president of the bank of the
approval of the continuation of the
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(1) The board of directors of a
state bank shall meet at least once each calendar quarter, unless the banking
board directs that meetings be held on a more frequent basis, or a less frequent
basis in the case of disaster or emergency. The banking board, the commissioner, or
an executive officer may call a special meeting. A majority of the board of directors
constitutes a quorum. The board shall keep minutes of each meeting, including a
record of attendance. Any director who fails to attend meetings of the board of
directors for three consecutive months automatically ceases to be a director,
unless the absence is satisfactorily explained to the banking board or the
commissioner, who shall, in that event, notify the president of the bank of the
approval of the continuation of the director.
(2) The board of directors or the executive committee of the board shall
review at least monthly the following transactions occurring since the last review:
(a) Each loan, advance, discount, overdraft, and purchase or sale of a
security that exceeds in amount one percent of the capital of the corporation
pursuant to the rules promulgated by the banking board, and each loan, advance,
discount, and overdraft that makes the total obligations from one obligor exceed
that amount;
(b) Each purchase or sale of a security that, together with the bank's other
purchases and sales in the security during the preceding two months, involves such
amount.
(3) (a) The board of directors shall cause the financial statements of the
state bank to be prepared in accordance with generally accepted accounting
principles consistently applied, except as the banking board may otherwise provide
in order to establish regulatory and competitive parity and pursuant to the policies
expressed in section 11-101-102.
(b) The board of directors shall cause an audit of the state bank to be
completed by an accounting firm composed of certified public accountants or a
directors' examination by a public accountant or any other independent person or
persons as determined by the banking board at least annually but at intervals of not
more than fifteen months, as may be required by the banking board or its rules. The
banking board shall adopt rules regarding the qualifications of such public
accountant and other independent person or persons, who shall assume the
responsibility for due care in such director's examinations. The banking board's
rules shall also establish the scope of such directors' examinations, which shall
include safeguards to ensure that such examinations adequately describe the
financial condition of the financial institution. The banking board may require an
audit to be completed by an accounting firm composed of certified public
accountants under certain circumstances. A report of the audit or directors'
examination and any related management letters and documents shall be
completed and submitted to the banking board within the time periods, in the form,
and containing such information as the banking board may require in its rules. Such
report of the audit or directors' examination and any related management letters
and documents shall be reviewed by the directors at the next meeting of the board
of directors.
(c) If a bank is owned or controlled by a bank holding company, the
requirement of paragraph (b) of this subsection (3) may be fulfilled if:
(I) As required by the banking board and its rules, the controlling bank
holding company is audited or examined in a directors' examination annually at
intervals of not more than fifteen months and the bank is included in the annual
audit or directors' examination of the bank holding company by that firm;
(II) A report of the audit or directors' examination for the controlling bank
holding company and any related management letters and documents is completed
and submitted to the banking board within the time periods, in the form, and
containing such information as the banking board may require in its rules; and
(III) An annual internal examination of the bank is prepared by the internal
examination staff of the controlling bank holding company and kept available for
submission to the banking board immediately upon the banking board's request.
(4) A state bank authorized to exercise trust powers shall not accept, or
voluntarily relinquish, a fiduciary account without the approval or ratification of the
board of directors, or of a committee of officers or directors designated by the
board to perform this function, but the board of directors or the committee may
prescribe general rules governing acceptances or relinquishment of fiduciary
accounts, and action taken by an officer in accordance with these rules is sufficient
approval. Any committee so designated shall keep minutes of its meetings and
report at each monthly meeting of the board of directors all action taken since the
previous meeting of the board. The board of directors shall designate one or more
committees of not less than three qualified officers or directors to supervise the
investment of fiduciary funds. No such investment of any account for which the
bank has investment discretionary authority shall be made, retained, or disposed of
without the approval of a board-approved committee as to which the bank has
investment or review responsibility. At least once in every calendar year, the
committee shall review the records of each fiduciary account as to which the bank
has investment or review responsibility and shall determine the current value,
safety, and suitability of the investments and whether the investments should be
modified or retained. The committee shall keep minutes of its meetings and shall
report at each monthly meeting of the board of directors its conclusions on all
questions considered and all action taken since the previous meeting of the board.
The board of directors shall establish the policies and procedures necessary for the
proper exercise of fiduciary powers by the state bank and in accordance with any
rule established by the banking board.