(a) Any bank, asdefined in G.S. 53‑1, may convert to a stock association as provided inthis section.
(b) Any bank, upon amajority vote of its board of directors, may apply to the Commissioner of Banksfor permission to convert to a stock association and for certification ofappropriate amendments to the bank's certificate of incorporation to effect theconversion.
(c) The bank shallsubmit a plan of conversion as a part of the application to the Commissioner ofBanks. The Commissioner of Banks may recommend approval of the plan ofconversion with or without amendment. The Commissioner of Banks shall recommendapproval of the plan of conversion if upon examination and investigation hefinds that:
(1) The resulting stockassociation will operate in a safe, sound, and prudent manner with adequatecapital, liquidity, and earnings prospects;
(2) The directors,officers, and other managerial officials of the bank are qualified by characterand financial responsibility to control and operate in a legal and propermanner the stock association proposed to be formed as a result of theconversion;
(3) The interest of thedepositors, the creditors, and the public generally will not be jeopardized bythe proposed conversion; and
(4) The proposed namewill not mislead the public as to the character or purpose of the resultingstock association, and the proposed name is not the same as one already adoptedor appropriated by an existing association in this State or so similar as to belikely to mislead the public.
(d) Any action taken bythe Commissioner of Banks pursuant to this section shall be subject to reviewby the Commission which may approve, modify, or disapprove any action taken orrecommended by the Commissioner of Banks. The Commission may promulgate rulesto govern conversions undertaken pursuant to this section. The requirements fora converting bank shall be no more stringent than those provided by rule orregulation applicable to other FDIC‑insured stock associations. Therequirements for a converting bank shall be no less stringent than thoseprovided by rule or regulation applicable to other FDIC‑insured stockassociations, except as may be allowed during transition periods permitted bysubdivisions (e)(4) and (h)(2) of this section.
(e) In the absence ofthe promulgation of rules under subsection (d), the conditions to be met forapproval of the application for conversion should include the following:
(1) Condition. Theapplicant's general condition must reflect adequate capital, liquidity,reserves, earnings, and asset composition necessary for safe and soundoperation of the resulting stock association.
(2) Management. Themanagement and the board of directors must be capable of supervising a soundstock association operation and overseeing the changes that must beaccomplished in the conversion from a bank to a stock association.
(3) Public Convenience.The Commission must determine that the conversion will have a positive impacton the convenience of the public and will not substantially reduce the servicesavailable to the public in the market area.
(4) Transition. Within areasonable time after the effective date of the conversion, the resulting stockassociation must divest itself of all assets and liabilities that do notconform to State banking law or rules. The length of this transition periodshall be determined by the Commissioner of Banks and shall be specified whenthe application for conversion is approved.
In evaluating each of theseconditions, the Commission shall consider a comparison of the relevantfinancial ratios of the applicant with the average ratios of North Carolinastock associations of similar asset size. The Commission may not approve aconversion where the applicant presents an undue supervisory concern or has notbeen operated in a safe and sound manner.
(f) If theCommissioner of Banks approves the plan of conversion, then the bank shallsubmit the plan to the stockholders as provided in subsection (g). Afterapproval of the plan of conversion, the Commissioner of Banks shall superviseand monitor the conversion process and shall ensure that the conversion isconducted pursuant to law and the bank's approved plan of conversion.
(g) After lawful noticeto the stockholders of the bank and full and fair disclosure of the plan ofconversion, the plan must be approved by a majority of the total votes thatstockholders of the bank are eligible and entitled to cast. The vote by thestockholders may be in person or by proxy. Following the vote of thestockholders, the bank shall file with the Commissioner of Banks the results ofthe vote certified by an appropriate officer of the bank. The Commissioner ofBanks shall approve the requested conversion and the bank shall file with theSecretary of State amended articles of incorporation with the certificate ofthe Commissioner of Banks attached. The conversion of the bank to a stockassociation shall be effective upon this filing.
(h) The Commissioner ofBanks may authorize the resulting stock association to do the following:
(1) Wind up anyactivities legally engaged in by the bank at the time of conversion but notpermitted to stock associations.
(2) Retain for atransitional period any assets and deposit liabilities legally held by the bankat the effective date of the conversion that may not be held by stockassociations.
The length, terms, and conditionsof the transitional periods under subdivisions (1) and (2) are subject to thediscretion of the Commissioner of Banks, but may not exceed five years afterthe effective date of the conversion.
(i) Upon conversion ofa bank to a stock association, the legal existence of the bank does notterminate, and the resulting stock association is a continuation of the bank.The conversion shall be a mere change in identity or form of organization. Allrights, liabilities, obligations, interest, and relations of whatever kind ofthe bank shall continue and remain in the resulting stock association. Exceptas may be authorized during a transitional period by the Commissioner of Bankspursuant to subsection (h), a stock association resulting from the conversionof a bank shall have only those rights, powers, and duties which are authorizedfor stock associations by the laws of this State and the United States. Allactions and legal proceedings to which the bank was a party prior to conversionshall be unaffected by the conversion and proceed as if the conversion had nottaken place. (1989(Reg. Sess., 1990), c. 845, s. 2; 2001‑193, s. 16.)
(a) Any bank, asdefined in G.S. 53‑1, may convert to a stock association as provided inthis section.
(b) Any bank, upon amajority vote of its board of directors, may apply to the Commissioner of Banksfor permission to convert to a stock association and for certification ofappropriate amendments to the bank's certificate of incorporation to effect theconversion.
(c) The bank shallsubmit a plan of conversion as a part of the application to the Commissioner ofBanks. The Commissioner of Banks may recommend approval of the plan ofconversion with or without amendment. The Commissioner of Banks shall recommendapproval of the plan of conversion if upon examination and investigation hefinds that:
(1) The resulting stockassociation will operate in a safe, sound, and prudent manner with adequatecapital, liquidity, and earnings prospects;
(2) The directors,officers, and other managerial officials of the bank are qualified by characterand financial responsibility to control and operate in a legal and propermanner the stock association proposed to be formed as a result of theconversion;
(3) The interest of thedepositors, the creditors, and the public generally will not be jeopardized bythe proposed conversion; and
(4) The proposed namewill not mislead the public as to the character or purpose of the resultingstock association, and the proposed name is not the same as one already adoptedor appropriated by an existing association in this State or so similar as to belikely to mislead the public.
(d) Any action taken bythe Commissioner of Banks pursuant to this section shall be subject to reviewby the Commission which may approve, modify, or disapprove any action taken orrecommended by the Commissioner of Banks. The Commission may promulgate rulesto govern conversions undertaken pursuant to this section. The requirements fora converting bank shall be no more stringent than those provided by rule orregulation applicable to other FDIC‑insured stock associations. Therequirements for a converting bank shall be no less stringent than thoseprovided by rule or regulation applicable to other FDIC‑insured stockassociations, except as may be allowed during transition periods permitted bysubdivisions (e)(4) and (h)(2) of this section.
(e) In the absence ofthe promulgation of rules under subsection (d), the conditions to be met forapproval of the application for conversion should include the following:
(1) Condition. Theapplicant's general condition must reflect adequate capital, liquidity,reserves, earnings, and asset composition necessary for safe and soundoperation of the resulting stock association.
(2) Management. Themanagement and the board of directors must be capable of supervising a soundstock association operation and overseeing the changes that must beaccomplished in the conversion from a bank to a stock association.
(3) Public Convenience.The Commission must determine that the conversion will have a positive impacton the convenience of the public and will not substantially reduce the servicesavailable to the public in the market area.
(4) Transition. Within areasonable time after the effective date of the conversion, the resulting stockassociation must divest itself of all assets and liabilities that do notconform to State banking law or rules. The length of this transition periodshall be determined by the Commissioner of Banks and shall be specified whenthe application for conversion is approved.
In evaluating each of theseconditions, the Commission shall consider a comparison of the relevantfinancial ratios of the applicant with the average ratios of North Carolinastock associations of similar asset size. The Commission may not approve aconversion where the applicant presents an undue supervisory concern or has notbeen operated in a safe and sound manner.
(f) If theCommissioner of Banks approves the plan of conversion, then the bank shallsubmit the plan to the stockholders as provided in subsection (g). Afterapproval of the plan of conversion, the Commissioner of Banks shall superviseand monitor the conversion process and shall ensure that the conversion isconducted pursuant to law and the bank's approved plan of conversion.
(g) After lawful noticeto the stockholders of the bank and full and fair disclosure of the plan ofconversion, the plan must be approved by a majority of the total votes thatstockholders of the bank are eligible and entitled to cast. The vote by thestockholders may be in person or by proxy. Following the vote of thestockholders, the bank shall file with the Commissioner of Banks the results ofthe vote certified by an appropriate officer of the bank. The Commissioner ofBanks shall approve the requested conversion and the bank shall file with theSecretary of State amended articles of incorporation with the certificate ofthe Commissioner of Banks attached. The conversion of the bank to a stockassociation shall be effective upon this filing.
(h) The Commissioner ofBanks may authorize the resulting stock association to do the following:
(1) Wind up anyactivities legally engaged in by the bank at the time of conversion but notpermitted to stock associations.
(2) Retain for atransitional period any assets and deposit liabilities legally held by the bankat the effective date of the conversion that may not be held by stockassociations.
The length, terms, and conditionsof the transitional periods under subdivisions (1) and (2) are subject to thediscretion of the Commissioner of Banks, but may not exceed five years afterthe effective date of the conversion.
(i) Upon conversion ofa bank to a stock association, the legal existence of the bank does notterminate, and the resulting stock association is a continuation of the bank.The conversion shall be a mere change in identity or form of organization. Allrights, liabilities, obligations, interest, and relations of whatever kind ofthe bank shall continue and remain in the resulting stock association. Exceptas may be authorized during a transitional period by the Commissioner of Bankspursuant to subsection (h), a stock association resulting from the conversionof a bank shall have only those rights, powers, and duties which are authorizedfor stock associations by the laws of this State and the United States. Allactions and legal proceedings to which the bank was a party prior to conversionshall be unaffected by the conversion and proceed as if the conversion had nottaken place. (1989(Reg. Sess., 1990), c. 845, s. 2; 2001‑193, s. 16.)
(a) Any bank, asdefined in G.S. 53‑1, may convert to a stock association as provided inthis section.
(b) Any bank, upon amajority vote of its board of directors, may apply to the Commissioner of Banksfor permission to convert to a stock association and for certification ofappropriate amendments to the bank's certificate of incorporation to effect theconversion.
(c) The bank shallsubmit a plan of conversion as a part of the application to the Commissioner ofBanks. The Commissioner of Banks may recommend approval of the plan ofconversion with or without amendment. The Commissioner of Banks shall recommendapproval of the plan of conversion if upon examination and investigation hefinds that:
(1) The resulting stockassociation will operate in a safe, sound, and prudent manner with adequatecapital, liquidity, and earnings prospects;
(2) The directors,officers, and other managerial officials of the bank are qualified by characterand financial responsibility to control and operate in a legal and propermanner the stock association proposed to be formed as a result of theconversion;
(3) The interest of thedepositors, the creditors, and the public generally will not be jeopardized bythe proposed conversion; and
(4) The proposed namewill not mislead the public as to the character or purpose of the resultingstock association, and the proposed name is not the same as one already adoptedor appropriated by an existing association in this State or so similar as to belikely to mislead the public.
(d) Any action taken bythe Commissioner of Banks pursuant to this section shall be subject to reviewby the Commission which may approve, modify, or disapprove any action taken orrecommended by the Commissioner of Banks. The Commission may promulgate rulesto govern conversions undertaken pursuant to this section. The requirements fora converting bank shall be no more stringent than those provided by rule orregulation applicable to other FDIC‑insured stock associations. Therequirements for a converting bank shall be no less stringent than thoseprovided by rule or regulation applicable to other FDIC‑insured stockassociations, except as may be allowed during transition periods permitted bysubdivisions (e)(4) and (h)(2) of this section.
(e) In the absence ofthe promulgation of rules under subsection (d), the conditions to be met forapproval of the application for conversion should include the following:
(1) Condition. Theapplicant's general condition must reflect adequate capital, liquidity,reserves, earnings, and asset composition necessary for safe and soundoperation of the resulting stock association.
(2) Management. Themanagement and the board of directors must be capable of supervising a soundstock association operation and overseeing the changes that must beaccomplished in the conversion from a bank to a stock association.
(3) Public Convenience.The Commission must determine that the conversion will have a positive impacton the convenience of the public and will not substantially reduce the servicesavailable to the public in the market area.
(4) Transition. Within areasonable time after the effective date of the conversion, the resulting stockassociation must divest itself of all assets and liabilities that do notconform to State banking law or rules. The length of this transition periodshall be determined by the Commissioner of Banks and shall be specified whenthe application for conversion is approved.
In evaluating each of theseconditions, the Commission shall consider a comparison of the relevantfinancial ratios of the applicant with the average ratios of North Carolinastock associations of similar asset size. The Commission may not approve aconversion where the applicant presents an undue supervisory concern or has notbeen operated in a safe and sound manner.
(f) If theCommissioner of Banks approves the plan of conversion, then the bank shallsubmit the plan to the stockholders as provided in subsection (g). Afterapproval of the plan of conversion, the Commissioner of Banks shall superviseand monitor the conversion process and shall ensure that the conversion isconducted pursuant to law and the bank's approved plan of conversion.
(g) After lawful noticeto the stockholders of the bank and full and fair disclosure of the plan ofconversion, the plan must be approved by a majority of the total votes thatstockholders of the bank are eligible and entitled to cast. The vote by thestockholders may be in person or by proxy. Following the vote of thestockholders, the bank shall file with the Commissioner of Banks the results ofthe vote certified by an appropriate officer of the bank. The Commissioner ofBanks shall approve the requested conversion and the bank shall file with theSecretary of State amended articles of incorporation with the certificate ofthe Commissioner of Banks attached. The conversion of the bank to a stockassociation shall be effective upon this filing.
(h) The Commissioner ofBanks may authorize the resulting stock association to do the following:
(1) Wind up anyactivities legally engaged in by the bank at the time of conversion but notpermitted to stock associations.
(2) Retain for atransitional period any assets and deposit liabilities legally held by the bankat the effective date of the conversion that may not be held by stockassociations.
The length, terms, and conditionsof the transitional periods under subdivisions (1) and (2) are subject to thediscretion of the Commissioner of Banks, but may not exceed five years afterthe effective date of the conversion.
(i) Upon conversion ofa bank to a stock association, the legal existence of the bank does notterminate, and the resulting stock association is a continuation of the bank.The conversion shall be a mere change in identity or form of organization. Allrights, liabilities, obligations, interest, and relations of whatever kind ofthe bank shall continue and remain in the resulting stock association. Exceptas may be authorized during a transitional period by the Commissioner of Bankspursuant to subsection (h), a stock association resulting from the conversionof a bank shall have only those rights, powers, and duties which are authorizedfor stock associations by the laws of this State and the United States. Allactions and legal proceedings to which the bank was a party prior to conversionshall be unaffected by the conversion and proceed as if the conversion had nottaken place. (1989(Reg. Sess., 1990), c. 845, s. 2; 2001‑193, s. 16.)
