§ 6-1111 — Merger with parent bank holding company, nonbank

subsidiary of parent bank holding company or subsidiary. A. Upon approval by the Banking Board, and subject to satisfying each of the criteria contained in subsection B of this section and complying with the procedures required by subsection C of this section, a state bank may merge with: 1. Its parent bank holding company; 2. One or more nonbank subsidiaries of its parent bank holding company; or 3. One or more subsidiaries of the state bank. B. The form and effect of any merger pursuant to this section must be consistent with the following criteria: 1. The state bank must be the resulting entity which is the survivor of the merger; 2. The merger shall not result in any additional branch office of the state bank, unless such additional branch is approved pursuant to the bank's de novo branching authority under Section 501.1 of this title; 3. Any activity carried on by any nonbank company which is a party to the merger shall be terminated at the effective time of the merger unless that activity is permissible for the resulting state bank; 4. Any asset or investment which is held by a constituent nonbank company and which is not permitted to be held by a resulting state bank shall be divested at or before the effective time of the merger, unless the state bank obtains prior approval for a longer divestiture period from the Commissioner in the manner provided in Section 1108 of this title and from appropriate federal banking agencies in accordance with any applicable federal banking laws or regulations; 5. The merger shall not create an unsafe weakening of the resulting state bank's condition. However, the Board shall have discretion to approve a merger which will have the effect of materially strengthening a weakened bank, even if the resulting state bank's condition or capital will remain less than satisfactory; and 6. The applicant bank shall present an acceptable plan for minimizing or eliminating the potential adverse impact of any significant debt or other direct or contingent liabilities of any nonbank company that will be merged into the resulting state bank. C. A merger pursuant to this section shall be governed by all of the provisions and procedures of Sections 1102 through 1106 of this title. For this purpose such sections shall be interpreted so far as reasonably applicable as if any nonbank company which is a party to the merger were instead a constituent state bank being merged into the resulting state bank.

Legislative History

Added by Laws 1993, c. 183, § 19, eff. July 1, 1993. Amended by Laws 1997, c. 111, § 92, eff. July 1, 1997; Laws 2003, c. 180, § 5, eff. Nov. 1, 2003.