9-1111.   Branch banking;transactions by remote service units authorized; conditions and restrictions;remote service unit defined.The general business of every bank shall be transacted at the place of businessspecified in its certificate of authority and at one or more branchbanks established and operated as provided in this section. Except for theestablishment or operation of a trust branch bank or the relocation of anexisting trust branch bank pursuant to K.S.A. 9-1135, andamendmentsthereto, it shall be unlawful forany bank to establish and operate any branch bankor relocate an existing branch bank except as hereinafter provided.Notwithstanding the provisions of this section, any location at which adepository institution, as defined by K.S.A. 9-701, and amendmentsthereto, receives deposits, renews time deposits, closes loans, services loansor receives payments on loans or other obligations, as agent, for a bankpursuant to subsection (25) of K.S.A. 9-1101, and amendmentsthereto, or other applicable state or federal law, or is authorized toopen accounts or receive deposits under subsection (28) of K.S.A. 9-1101, andamendments thereto, shall not be deemed to be a branch bank:

      (a)   For the purposes of this section, the term "branch bank" means anyoffice, agency or other place of business located within this state, otherthan the place of business specified in the bank's certificate ofauthority, at which deposits are received, checks paid, money lent or trustauthority exercised, if approval has been granted by the state bankcommissioner, under K.S.A. 9-1602, and amendments thereto;

      (b)   establishment of a new branch or relocation of an existing branch foreligible banks:

      (1)   After first applying for and obtaining the approval of the commissioner,an eligible bank incorporated under the laws of this state, may establish andoperate one or more branch banks or relocate an existing branch bank, anywherewithin this state;

      (2)   the application shall include the nature of the banking business to beconducted at the proposed branch bank, the primary geographical area tobe served by it, the personnel and office facilities to be provided at theproposed branch bank and other information the commissioner may require;

      (3)   the application shall include the name selected for the proposed branchbank. The name selected for the proposed branch bank shall not be the name ofany other bank or branch bank doing business within a 15 mile radius of thesame city or town, nor shall the name selected be required to contain the nameof the applicant bank. If the name selected for the proposed branch bank doesnot contain the name of the applicant bank, the branch bank shall provide inthe public lobby of such branch bank, a public notice that it is a branch bankof the applicant bank;

      (4)   the application shall include proof of publication of notice that theapplicant bank intends to file or has filed an application to establish abranch bank or relocate an existing branch bank. The notice shall be publishedin a newspaper of general circulation in the county where the applicant bankproposes to locate the branch bank. The notice shall be in the form prescribedby the commissioner and at a minimum shall contain the name and address of theapplicant bank, the location of the proposed branch and a solicitation forwritten comments. The notice shall be published on the same day for twoconsecutive weeks and provide for a comment period of not less than 10 daysafter the date of the second publication;

      (5)   upon receipt of the application, and following expiration of the commentperiod, the commissioner may hold a hearing in the county in which theapplicant bank seeks to operate the branch bank. The applicant shall publishnotice of the time, date and place of such hearing in a newspaper of generalcirculation in the county where the applicant bank proposes to locate thebranch bank, not less than 10 nor more than 30 days prior to the date of thehearing, and proof of publication shall be filed with the commissioner. At anysuch hearing, all interested persons shall be allowed to present written andoral evidence to the commissioner, or the commissioner's designee, in supportof or in opposition to the branch bank. Upon completion of a transcript of thetestimony given at any such hearing, the transcript shall be filed in theoffice of the commissioner;

      (6)   if the commissioner determines a public hearing is not warranted, thecommissioner shall approve or disapprove the application within 15 days afterreceipt of a complete application but not prior to the end of the commentperiod. If a public hearing is held, the commissioner shall approve ordisapprove the application within 60 days after consideration of the completeapplication and the evidence gathered during the commissioner's investigation.The period for consideration of the application may be extended if thecommissioner determines the application presents a significant supervisoryconcern. If the commissioner finds that:

      (A)   There is a reasonable probability of usefulness and success of theproposed branch bank; and

      (B)   the applicant bank's financial history and condition is sound, the newbranch or relocation shall be granted, otherwise, it shall be denied;

      (7)   within 15 days after any final action of the commissioner approving ordisapproving an application, the applicant, or any adversely affected oraggrieved person who provided written comments during the specified commentperiod, may request a hearing with the state banking board. Upon receipt of atimely request, the board shall conduct a hearing in accordance with theprovisions of the Kansas administrative procedure act. Any decision of thestate banking board is subject to review in accordance with the act forjudicial review and civil enforcement of agency actions;

      (c)   establishment of a new branch or relocation of an existing branch forbanks which do not meet the definition of "eligible bank":

      (1)   After first applying for and obtaining the approval of the state bankingboard, a bank incorporated under the laws of this state, which does not meetthe definition of "eligible bank," may establish and operate one or more branchbanks, or relocate an existing branch bank, anywhere within this state;

      (2)   an application under paragraph (1) of thissubsection, to establish and operate a branch bank or to relocate anexisting branch bank shall be in such form and contain such information as therules and regulations of the state bank commissioner, adopted pursuant toK.S.A. 9-1713, and amendments thereto, shall provide;

      (3)   the application shall include estimates of the annualincome and expenses of the proposed branch bank, the annual volume of businessto be transacted by it, the nature of the banking business to be conducted atthe proposed branch bank, the primary geographical area to be served by it andthe personnel and office facilities to be provided at the proposed branch bank;

      (4)   the application shall include the name selected for theproposed branch bank. The name selected for the proposed branch bank shall notbe the name of any other bank or branch bank doing business withina 15 mile radius of the same city or town, nor shall the nameselected be required to contain the name of the applicant bank. If the nameselected for the proposed bank does not contain the name of the applicant bank,the branch bank shall provide in the public lobby of such branch bank, a publicnotice that it is a branch bank of the applicant bank;

      (5)   the application shall includeproof of publication of notice that applicant bank intends to file anapplication to establish a branch bank or relocate an existing branch bank. Thenotice shall be published in a newspaper of general circulation in the countywhere the applicant bank proposes to locate the branch bank. The notice shallbe in the form prescribed by the state banking board and at a minimum shallcontain the name and address of the applicant bank, the location of theproposed branch and a solicitation for written comments. The notice shall bepublishedon the same day for two consecutive weeks and provide for a comment period ofnot less than 10 days after the date of the second publication;

      (6)   upon receipt of an application meeting the aboverequirements, and following the expiration of the comment period,within 60 days the state banking boardmay hold a hearing in the county in which the applicantbank seeks to establish and operate a branch bank. Notice of the time, date andplace of such hearing if one is to beheld shall be published in a newspaper of general circulation in the countywhere theapplicant bank proposes to locate the branch bank not less than 10 or morethan 30 days prior to the date of the hearing, andproof of publication shall be filed with thecommissioner. Atany such hearing, all interested persons shall be allowed to present writtenand oral evidence to the board in support of or in opposition to theapplication. Upon completion of a transcript of the testimony given at any suchhearing, the transcript shall be filed in the office of the commissioner andcopies shall be furnished to the members of the state banking board not lessthan 10 days prior to the meeting of the board at which theapplication will be considered;

      (7)   the state banking board shall approve or disapprove theapplication within 90 days after consideration of the application andthe evidence gathered during the board's investigation. If the board findsthat:

      (A)   There is a reasonable probability of usefulness andsuccess of the proposed branch bank; and

      (B)   the applicant bank's financial history and condition issound, theapplication shall be granted, otherwise, the application shall be denied;

      (8)   any final action of the board approving or disapprovingan application shall be subject to review in accordance with the act forjudicial review and civil enforcement of agency actions upon the petition ofthe applicant or any adversely affected or aggrieved person whoprovided written comments during the specified comment period;

      (d)   any branch bank lawfully established and operating onthe effective date of this act may continue to be operated by the bank thenoperating the branch bank and by any successor bank;

      (e)   branch banks which have been established and are beingmaintained by a bank at the time of its merger into or consolidation withanother bank or at the time its assets are purchased and its liabilities areassumed by another bank may continue to be operated by the surviving, resultingor purchasing and assuming bank. The surviving, resulting or purchasing andassuming bank, with approval of the state bank commissioner, may establish andoperate a branch bank or banks at the site or sites of the merged, constituentor liquidated bank or banks;

      (f)   any state bank or national banking associationmayprovide and engage in banking transactions by means of remote service unitswherever located, which remote service units shall not be considered to bebranch banks. Any banking transaction effected by useof a remote service unit shall be deemed to be transacted at a bank and not ata remote service unit;

      (g)   as a condition to the operation and use of any remoteservice unitin this state, a state bank or national banking association, each hereinafterreferred to as a bank, which desires to operate or enable its customersto utilize a remote service unit must agree that such remote service unitwill be available for use by customers of any other bank or banks upon therequest of such bank or banks to share its use and the agreement of suchbank or banks to share all costs, including a reasonable return on capitalexpenditures incurred in connection with its development, installationand operation. The owner of the remote service unit, whether a bank or anyother person, shall make the remote service unit available for use by otherbanks and their customers on a nondiscriminatory basis, conditioned uponpayment of a reasonable proportion of all costs, including a reasonablereturn on capital expenditures incurred in connection with the development,installation and operation of the remote service unit. Notwithstanding theforegoing provisions of this subsection, a remote service unit located onthe property owned or leased by the bank where the principal place of businessof a bank, or an attached auxiliary teller facility orbranch bank of a bank, is located need notbe made availablefor use by any other bank or banks or customers of any other bank or banks;

      (h)   for purposes of this section, "remote service unit"means an electronic information processing device, including associatedequipment, structures and systems, through or by means of which informationrelating to financial services rendered to the public is stored andtransmitted, whether instantaneously or otherwise, to a bank and which, foractivation and account access, is dependent upon the use of a machine-readableinstrument in the possession and control of the holder of an account with abank. The term shall include "online" computer terminals and "offline"automated cash dispensing machines and automated teller machines, but shall notinclude computer terminals or automated teller machines or automated cashdispensing machines using systems in which account numbers are not machine readand verified. Withdrawals by means of "offline" systems shall not exceed $300per transaction and shall be restricted to individual not corporate orcommercial accounts;

      (i)   for purposes of this section, "eligible bank" means a state bank thatmeets the following criteria:

      (1)   Received a composite rating of 1 or 2 under the uniform financialinstitutions rating system as a result of its most recent federal or stateexamination;

      (2)   meets the following three criteria for a well capitalized bank:

      (A)   Has a total risk based capital ratio of 10% or greater;

      (B)   has a tier one risk based capital ratio of 6% or greater; and

      (C)   has a leverage ratio of 5% or greater; and

      (3)   is not subject to a cease and desist order, consent order, promptcorrective action directive, written agreement, memorandum of understanding orother administrative agreement with its primary federal regulator or the officeof the state bank commissioner.

      History:   L. 1947, ch. 102, § 40; L. 1957, ch. 72, § 1; L. 1967,ch. 70, § 1; L. 1973, ch. 46, § 1; L. 1975, ch. 43, § 1; L. 1975,ch. 44, § 16; L. 1978, ch. 45, § 2; L. 1984, ch. 49, § 2; L. 1984, ch. 50,§ 1; L. 1984, ch. 48, § 5;L. 1986, ch. 57, § 8; L. 1986, ch. 58, § 1;L. 1987, ch. 53, § 1;L. 1990, ch. 58, § 1;L. 1992, ch. 61, § 1;L. 1994, ch. 51, § 5;L. 1995, ch. 79, § 15;L. 1997, ch. 180, § 12;L. 2001, ch. 87, § 7; July 1.