§412:5-305  Permitted investments.  (a) 
To the extent specified herein, a bank may invest its own assets in:



(1)  Securities and obligations of the United States
government and any agency of the United States government whose debt
obligations are fully and explicitly guaranteed as to the timely payment of
principal and interest by the full faith and credit of the United States,
including without limitation Federal Reserve Banks, the Government National
Mortgage Association, the Veterans Administration, the Federal Housing
Administration, the United States Department of Agriculture, the Export-Import
Bank, the Overseas Private Investment Corporation, the Commodity Credit
Corporation, and the Small Business Administration;



(2)  Bonds, notes, mortgage backed securities, and
other debt obligations of the Federal Home Loan Mortgage Corporation, the
Federal National Mortgage Association, and the Federal Home Loan Banks;



(3)  Securities and obligations of United States
government-sponsored agencies which are originally established or chartered by
the United States government to serve public purposes specified by the Congress
but whose debt obligations are not explicitly guaranteed by the full faith and
credit of the United States, including without limitation Banks for
Cooperatives, Federal Agricultural Mortgage Corporation, Federal Farm Credit
Banks, Federal Intermediate Credit Banks, Federal Land Banks, Financing
Corporation, Resolution Funding Corporation, Student Loan Marketing
Association, Tennessee Valley Authority, the United States Postal Service, and
securities and obligations of the Federal Home Loan Mortgage Corporation, the
Federal National Mortgage Association, and the Federal Home Loan Banks that are
not bonds, notes, mortgage backed securities, or other debt obligations of the
Federal Home Loan Mortgage Corporation, the Federal National Mortgage
Association, and the Federal Home Loan Banks; provided that the total amount
invested in obligations of any one issuer shall not exceed twenty per cent of
the bank's capital and surplus; and



(4)  Securities and obligations of quasi-United States
governmental institutions, including without limitation the International Bank
for Reconstruction and Development (World Bank), the Inter-American Development
Bank, the Asian Development Bank, the African Development Bank, the European
Investment Bank, and other multilateral lending institutions or regional
development institutions in which the United States government is a shareholder
or contributing member; provided that the total amount invested in obligations
of any one issuer shall not exceed twenty per cent of the bank's capital and
surplus.



(b)  A bank may invest its own assets in bonds,
securities, or similar obligations issued by this State or any county of this State,
through an appropriate agency or instrumentality.



(c)  To the extent specified herein, a bank may
invest its own assets in bonds or similar obligations issued by any state of
the United States other than this State, the District of Columbia, or any territory
or possession of the United States, by municipal governments of such states,
territories or possessions or by any foreign country or political subdivision
of such country; provided, that:



(1)  The bond, note, or warrant has been issued in
compliance with the constitution and laws of any such government;



(2)  There has been no default in payment of either
principal or interest on any of the general obligations of such government for
a period of five years immediately preceding the date of the investment; and



(3)  The total amount invested in such obligations of
any one issuer by a bank shall not exceed twenty per cent of the bank's capital
and surplus.



(d)  To the extent specified herein, a bank may
invest its own assets in notes, bonds, and other obligations of any corporation
which at the time of the investment is incorporated under the laws of the
United States or any state or territory thereof or the District of Columbia;
provided, that the aggregate amount invested by a bank under this subsection
and subsection (e) in any one corporation shall not exceed twenty per cent of
the bank's capital and surplus.



(e)  To the extent specified herein, a bank may
invest its own assets in securities of an investment grade.  The term
"investment grade" means notes, bonds, certificates of interest or
participation, beneficial interests, mortgage or receivable-related securities,
and other obligations that are commonly understood to be of investment grade
quality, including without limitation those securities that are rated within
the four highest grades by any nationally-recognized rating service or unrated
securities of similar quality as reasonably determined by the bank in its
prudent banking judgment (which may be based in part upon estimates which it
believes to be reliable).  Investment grade does not include investments which
are predominantly speculative in nature.  The aggregate amount invested by a
bank under this subsection and subsection (d) in any one company or other
issuer shall not exceed twenty per cent of the bank's capital and surplus.



(f)  To the extent specified herein, a bank may
purchase, hold, convey, sell or lease real or personal property as follows:



(1)  The real property in or on which the business of
the bank is carried on, including its banking offices, other space in the same
property to rent as a source of income; permanent or vacation residences or
recreational facilities for its officers and employees; other real property
necessary to the accommodation of the bank's business, including but not
limited to parking facilities, data processing centers, and real property held
for future banking use where the bank in good faith expects to utilize the
property as bank premises; provided, if the bank ceases to use any real
property and improvements thereon for one of the foregoing purposes, it shall,
within five years thereafter, sell the real property or cease to carry it or
them as an asset; provided further, such property shall not without the
approval of the commissioner exceed seventy-five per cent of the bank's capital
and surplus;



(2)  Personal property used in or necessary to the
accommodation of the bank's business, including but not limited to furniture,
fixtures, equipment, vaults and safety deposit boxes.  The bank's investment in
furniture and fixtures shall not without the approval of the commissioner
exceed twenty-five per cent of the bank's capital and surplus;



(3)  Personal property and fixtures which the bank
acquires for purposes of leasing to third parties and such real property
interests as shall be incidental thereto;



(4)  Such real property or tangible personal property
as may come into its possession as security for loans or in the collection of
debts; or as may be purchased by or conveyed to the bank in satisfaction of or
on account of debts previously contracted in the course of its business, when
such property was held as security by the bank; and



(5)  The seller's interest under an agreement of sale,
as that term is defined in sections 501-101.5 and 502-85, including without
limitation the reversionary interest in the real estate and the right to income
under the agreement of sale, with or without recourse to the seller.



Except as otherwise authorized in this section
any tangible personal property acquired by a bank pursuant to subsection (f)(4)
shall be disposed of as soon as practicable and shall not without the written
consent of the commissioner be considered a part of the assets of the bank
after the expiration of two years from the date of acquisition.



Except as otherwise authorized in this section
any real property acquired by a bank pursuant to subsection (f)(4) shall be
sold or exchanged for other real property by the bank within five years after
title thereto has vested in it by purchase or otherwise, or within such further
time as may be granted by the commissioner.



Any bank acquiring any real property in any
manner other than provided by this section shall immediately, upon receiving
notice from the commissioner, charge the same to profit and loss, or otherwise
remove the same from assets, and when any loss impairs the capital and surplus
of the bank the impairment shall be made good in the manner provided in this
chapter.



(g)  A bank may own or control the capital
stock:



(1)  Of operating subsidiaries as set forth in this
article;



(2)  Of a corporation organized and existing for the
ownership of real or personal property used or which the bank in good faith
expects to be used in the bank's business;



(3)  Of the Federal National Mortgage Association, the
Student Loan Marketing Association, Federal Home Loan Mortgage Corporation, or
of any other corporation organized for substantially the same purposes;
provided that this subsection shall be deemed to authorize subscription for as
well as purchase of the stock;



(4)  Of small business investment companies operating
under the Federal Small Business Investment Act of 1958;



(5)  Of bank service corporations, subject to the Bank
Service Corporation Act, 12 U.S.C. §§1861-1862;



(6)  Of a corporation whose stock is acquired or
purchased to save a loss on a preexisting debt secured by such stock; provided,
that the stock shall be sold within twelve months of the date acquired or
purchased, or within such further time as may be granted by the commissioner;



(7)  Of an international banking corporation
established pursuant to article 5A of this chapter or an Edge corporation or an
Agreement corporation established or authorized pursuant to section 25a of the
Federal Reserve Act, 12 U.S.C. §631;



(8)  Of a captive insurance company incorporated under
the laws of the United States, or any state or territory thereof, or the
District of Columbia;



(9)  Of a company transacting a business of insurance
or the sale of annuities pursuant to the authority conferred in section
412:5-205.5; and



(10)  Of a company engaging in securities activities
pursuant to the authority conferred in section 412:5-205.7.



(h)  To the
extent specified herein, a bank may invest its own assets in limited
partnerships, limited liability partnerships, limited liability companies, or
corporations formed to invest in residential properties that will qualify for the low income housing tax
credit under section 42 of the Internal Revenue Code of 1986, as amended, and
under chapters 235 and 241; provided that the total amount invested by a bank
under this subsection in any one limited partnership, limited liability
partnership, limited liability company, or corporation shall not, without the
prior approval of the commissioner, exceed two per cent of the bank's capital
and surplus and the aggregate amount invested under this subsection shall not,
without the prior approval of the commissioner, exceed five per cent of the
bank's capital and surplus.  In no case shall the aggregate amount invested by
a bank under this subsection exceed ten per cent of the bank's capital and
surplus. [L 1993, c 350, pt of §1; am L 1995, c 48, §1; am L 1996, c
225, §3; am L 1997, c 258, §14; am L 2001, c 170, §7; am L 2006, c 228, §32; am
L 2009, c 107, §2]