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Statutes > South-carolina > Title-34 > Chapter-28

Title 34 - Banking, Financial Institutions and Money

CHAPTER 28.

SAVINGS ASSOCIATIONS

ARTICLE 1.

GENERAL PROVISIONS

SECTION 34-28-10. Short title of Articles 1 through 10.

Articles 1 through 10 of this chapter are known and may be cited as the "South Carolina Savings Association Act". Wherever "this Act" appears in this chapter, unless the context clearly indicates otherwise, it means Articles 1 through 10 of Chapter 28 of Title 34.

SECTION 34-28-20. Application of the South Carolina Business Corporation Act.

When not in direct conflict with or superseded by specific provisions of this chapter, the provisions of the South Carolina Business Corporation Act, Chapters 1 to 25 of Title 33, apply to any association organized or operated under this chapter.

SECTION 34-28-30. Definitions.

As used in this act, unless the context otherwise requires:

(1) "Assets" means, at any particular time, those properties and rights which are properly entered in the accounts and balance sheets of an association and any of its subsidiaries (to the extent of the association's interest therein) in terms of a monetary value.

(2) "Association" means a mutual or stock-owned savings association, savings and loan association, building and loan association, or savings bank that is subject to the provisions of this chapter.

(3) "Board" means the State Board of Financial Institutions.

(4) "Capital stock" means the aggregate of shares of nonwithdrawable capital represented by stock certificates.

(5) "Company" means any corporation (domestic or foreign), partnership, trust, association, joint venture, syndicate, or any other type of business organization.

(6) "Control" of a company means directly or indirectly acting alone or in concert with one or more other persons or through one or more subsidiaries or through proxies, for the following: (i) ownership of or voting control of more than twenty-five percent of the voting shares or rights of the company; (ii) the right to control in any manner the election or appointment of a majority of the directors or trustees of the company; or (iii) a general partner in or contributor of more than twenty-five percent of the capital of the company.

(7) "Dwelling unit" means a single, unified combination of rooms which is designed for residential use by one family in a multiple dwelling unit structure and which is not "home property".

(8) "Earnings" means that part of the sources available for payment of earnings of a mutual association which is declared payable on savings accounts by the Board of Directors and is the cost of savings money to the association. Earnings also may be referred to as "interest".

(9) "Home property" means real estate on which there is located, or will be located pursuant to a real estate loan, either a structure designed for residential use by one family, or a single condominium unit or cooperative including common elements pertinent thereto, designed for residential use by one family in a multiple-dwelling unit structure or complex and includes fixtures and home furnishings and equipment.

(10) "Impaired condition" means a condition in which the assets of an association as recorded on the books of the association (book value) are less than the aggregate amount of liabilities of the association to its creditors, including the holders of its savings and other deposit accounts or in which an association is unable to meet current obligations as they mature, even though assets may exceed liabilities.

(11) "Improved real estate" means real estate on which there is a structure or an enclosure or which is cultivated, reclaimed, used for the purpose of agriculture in any form, prepared as building lots or sites, or otherwise occupied, made better, more useful, or of greater value by care.

(12) "Insured association" means an association the deposit accounts of which are insured wholly or in part by the Federal Savings and Loan Insurance Corporation or any successor or assignee federal agency established for the purpose of insuring savings and other deposit accounts in associations.

(13) "Liquid assets" means:

(a) Cash on hand;

(b) Cash on deposit in federal home loan banks, federal reserve banks, state banks performing similar reserve functions, or financial depository institutions, which is withdrawable upon not more than thirty days' notice and which is not pledged as security for indebtedness, except that any deposits in a financial depository institution under the control or in the possession of any supervisory authority are not considered as liquid assets;

(c) Obligations of, or obligations which are fully guaranteed as to principal and interest by, the United States or this State; and

(d) Such other assets as may be approved by the Board which are accepted as liquid assets for insured associations by the appropriate federal regulatory agency.

(14) "Member" means a person holding a deposit account in a mutual association, or borrowing from or assuming or obligated upon a loan or interest therein held by a mutual association, or purchasing property securing a loan or interest therein held by a mutual association. A joint and survivorship relationship, whether of depositors or borrowers, constitutes a single membership. A stock association has no members.

(15) "Net income" means the gross revenue of a mutual association for an accounting period less the sum of all expenses paid or incurred, taxes, and losses sustained as have not been charged to reserves pursuant to the provisions of this chapter.

(16) "Officer" means the president, any vice-president (but not an assistant vice-president, second vice-president, or other vice-president having authority similar to an assistant or second vice-president), the secretary, the treasurer, the comptroller, and any other person performing similar functions with respect to any association. "Officer" also includes the chairman of the board of directors of an association if the chairman is authorized by the charter or bylaws of the organization to participate in its operating management or if the chairman in fact participates in this management.

(17) "Person" means an individual, a fiduciary, or a company.

(18) "Primarily residential property" means real estate on which there is located, or will be located pursuant to a real estate loan, any of the following:

(a) structure or structures designed or used primarily for residential rather than nonresidential purposes and consisting of more than one dwelling unit;

(b) structure or structures designed or used primarily for residential rather than nonresidential purposes for students, residents, and persons under care, or primarily for employees, or members of the staff of an educational, health, or welfare institution or facility;

(c) structure or structures which are used in part for residential purposes for not more than one family and in part for business purposes, provided that the residential use of the structure or structures must be substantial and permanent, not merely transitory.

(19) "Primary service area" means a reasonable geographical area from which a proposed or existing association or branch thereof expects to draw approximately seventy-five percent of its deposits.

(20) "Real estate loan" means any loan or other obligation:

(1) secured by property that is real property pursuant to the law of the state where the property is located;

(2) where the security interest of the holder of the loan or obligation may be enforced as a real estate mortgage or its equivalent pursuant to the law of the state where the property is located;

(3) where the security property is capable of separate appraisal;

(4) where the lender relies substantially upon the real estate as the primary security for the loan;

(5) where, with regard to a security property that is a leasehold or other interest for a period of years, the term of the interest extends, or is subject to extension or renewal at the option of the holder of the loan or other obligation, for a term of at least the maturity of the loan.

(21) "Remote service unit" means an information processing device, including associated equipment, structures, and systems by which information relating to financial services rendered to the public is stored and transmitted, instantaneously or otherwise, to an association or other financial institution having its home or approved branch office in this State. The term includes without limitation, point-of-sale terminals, merchant-operated terminals, cash dispensing machines, and automated teller machines. A remote service unit is not a branch of an association and is not subject to any of the provisions of this title applicable to branch offices.

(22) "Savings account" means that part of the savings liability of the association which is credited to the account of the holder. A savings account also may be referred to as and includes a "savings deposit".

(23) "Savings liability" means the aggregate amount of savings accounts of depositors, including earnings credited to these accounts, less redemptions and withdrawals.

(24) "Service corporation" means an organization which is empowered to engage in any activity permitted by this chapter, and which is controlled by one or more associations. It includes any subsidiary of a service corporation.

(25) "Sources available for payment of earnings" means net income of a mutual association for an accounting period less amounts transferred to reserves as provided in or permitted by this chapter, plus any balance of undivided profits from preceding accounting periods.

(26) "Stockholder" means the holder of one or more shares of any class of capital stock of a capital stock association organized or operating pursuant to the provisions of this chapter.

(27) "Subsidiary" means any company which is controlled directly or indirectly by another company.

(28) "Surplus" means the aggregate amount of the undistributed net income of a mutual association held as undivided profits or unallocated reserves for general corporate purposes.

(29) "Withdrawal value" means the amount credited to a savings account, less lawful deductions therefrom, as shown by the records of an association.

ARTICLE 2.

HOME INCORPORATION BRANCH OFFICES AND FACILITIES

SECTION 34-28-100. Application for authority to incorporate; action by Board on application.

(1) When authorized by the Board as provided in this article, an association may be formed under the laws of this State for the purpose of conducting a general savings and loan business and having all the powers and purposes authorized by this chapter and otherwise by Title 34.

(2) A written application for authority to organize an association as provided in subsection (1) must be filed with the Board and include:

(a) the proposed corporate name and evidence that the proposed name has been reserved with the Secretary of State; however, evidence that an association has reserved a corporate name with the Secretary of State does not preclude the Board from disapproving the name on the grounds of potential confusion with the name of an existing financial institution;

(b) detailed financial and biographical information as the Board may require for each proposed director, chief executive officer, and managing officer;

(c) the total amount of the savings account capital or capital stock proposed to be issued, the amount subscribed by each incorporator, and the method to be used to raise any remaining capital required before the proposed association will be authorized to begin business;

(d) the name and address of the proposed managing officer and chief executive officer, if known;

(e) the community and the street and number, if available, where the proposed association is to be located; and

(f) additional information as the Board may reasonably require. The application for authority to organize must be filed with the Board in triplicate and must be accompanied by a nonrefundable filing fee established by the Board.

(3)(a) Upon the filing of an application, the Board shall make an investigation of:

1. the character, reputation, financial standing, experience, and business qualifications of the proposed officers and directors;

2. the character, reputation, financial standing, and motives of the incorporator or incorporators in organizing the proposed association;

3. the public need for an association or additional association, as the case may be, in the primary service area where the proposed association is to be located, giving particular consideration to the ability of the primary service area to support both the proposed and all other existing associations in the community in the conduct of profitable operations and to the benefits of competition to the public.

(b) Any applicant who files an application which requires an investigation to be conducted outside the State shall reimburse the Board for all costs incurred in the normal course of investigation, which reimbursement must be in addition to the filing fee authorized in this section.

(4) The Board shall approve the application unless it finds that one or more of the conditions in (a) through (f) exist:

(a) Public convenience and advantage will not be promoted by the establishment of the proposed association. In determining whether an applicant meets this requirement, the Board shall consider all materially relevant factors, including:

1. the location and services proposed to be offered by the applicant and currently offered by existing associations in the primary service area to be served by the applicant; and

2. the primary service area's general economic and demographic characteristics.

(b) Local conditions do not indicate reasonable promise of the successful operation of the proposed association and of those associations already established in the primary service area community. In determining whether an applicant meets this requirement, the Board shall consider all materially relevant factors, including:

1. Current economic conditions and the growth potential of the primary service area in which the proposed association intends to locate; and

2. The growth rate, size, financial strength, and operating characteristics of other associations in the primary service area of the proposed association.

(c) The proposed officers and directors do not have sufficient experience, ability, standing, and responsibility to indicate reasonable promise of the successful operation of the association.

(d) The applicant's proposed capital structure is inadequate. In no event may the minimum capital required be less than three million dollars or that larger amount as may be specified in a regulation issued by the Board.

(e) The name of the proposed association does not comply with Section 34-28-110.

(f) No provision has been made for suitable quarters at the location specified in the application.

(5) The order approving an application may impose reasonable conditions which must be met before a certificate of authorization to transact business will be issued, which conditions may include employment of suitable personnel, alterations to the proposed capital structure, the obtaining of suitable quarters at the location proposed, or those other matters as the Board may deem necessary. If the Board approves the application for authority to organize, the applicant shall file its articles of incorporation with the Secretary of State and apply for a commitment for appropriate insurance of accounts. Upon approval by the Board of the application for authority to organize, the Board shall forward a copy of its final order to the Federal Savings and Loan Insurance Corporation. The corporate existence of an association begins on the date that the approved articles of incorporation are filed with the Secretary of State, unless otherwise provided in the articles of incorporation, but the association shall not commence business before it is in possession of a certificate of authorization to transact business as provided in Section 34-28-150. Prior to that time, an association may perform only those acts as are necessary to perfect its organization, raise capital, obtain and equip a place of business, and otherwise prepare for a general savings association business.

SECTION 34-28-110. Name of an association.

(1) The name of every association shall include either the words "building and loan association", "savings and loan association", or "savings bank". These words must be preceded by an appropriate descriptive word or words approved by the Board. An ordinal number may not be used as a single descriptive word in the association's name immediately preceding the words "savings association", "savings and loan association", or "savings bank" unless the words are followed by the words "of __________," the blank being filled by the name of the community, town, city, county, or state in which the association has its home office. The use of the words "National", "United States", "insured", or "guaranteed", separately or in any combination thereof with other words or syllables, is prohibited as part of the corporate name of an association. No certificate of incorporation of a proposed association having the same name as a corporation authorized to do business under the laws of this State or a name so nearly resembling it as to be likely to deceive or cause confusion in the mind of the public with any other financial depository institution in this State may be approved by the Board, except for an association formed by the reincorporation, reorganization, conversion, or consolidation of the other financial depository institution with the proposed association or upon the sale of all or substantially all the property and franchise of the other financial institution to the proposed association. Nothing herein may be construed to require or cause any association doing business to change its name from the way it exists on April 1, 1985. In addition to meeting the requirements of this subsection, the name of a stock-owned association must also comply with Section 34-28-130(1)(a).

(2) No person, unless he or it is lawfully authorized to do business in this State under the provisions of this chapter and actually is engaged in carrying on a savings association business, shall do business under any name or title which contains the terms "savings association", "savings and loan association", "savings bank", "building and loan association", "building association", or any combination employing either or both of the words "building" or "loan" with one or more of the words "saving" or "savings", or words of similar import, with one or more of the words "association", "institution", "society", "company", "fund", or "corporation", or words of similar import, or use any name or sign or circulate or use any letterhead, billhead, circular, or paper whatever, or advertise or represent in any manner which indicates or reasonably implies that his business is the character or kind of business carried on or transacted by an association or which is likely to lead any person to believe that his business is that of an association; however, the words "saving", "savings", "company", or "corporation", or the plural of any thereof, may be used by, and in the corporate or other name or title of, any company which is or becomes a savings and loan holding company pursuant to the provisions of this chapter or regulations of the Federal Home Loan Bank Board. Upon application by the Board or any association, a court of competent jurisdiction may issue an injunction to restrain any person from violating or continuing to violate any of the foregoing provisions of this subsection. Any person who violates any provision of this subsection is guilty of a misdemeanor and upon conviction must be punished by a fine of not more than five thousand dollars, and each day of violation shall constitute a separate offense. The prohibitions of this subsection shall not apply to any corporation or association formed for the purpose of promoting the interests of associations, their officers, or other representatives.

SECTION 34-28-120. Capital stock of state stock associations; power and limitations on sale and issuance of stock; characteristics of capital stock; loans secured by capital stock prohibited; restrictions on ownership of stock.

(1) A stock owned association may issue the shares of stock authorized by its articles of incorporation and none other. Capital stock shall have the par value stated in the articles of incorporation and, with the prior approval of the Board, may consist of common stock and preferred stock which may be divided into classes and classes may be divided into series. Each kind, class, and series may have those distinguishing characteristics, including designations, preferences, or restrictions as regards dividends, redemption, voting powers, or restrictions or qualifications of voting powers, as are imposed in the articles of incorporation. The provisions of the articles of incorporation shall control in any case in which any vote or consent of stockholders is now or hereafter required by statute unless the statute shall expressly provide to the contrary.

(2) The consideration for the issuance of shares must be paid in full before their issuance and must not be less than the par value. The consideration for the shares must be paid in cash. Upon payment, the shares are considered to be fully paid and nonassessable.

(3) The total of the par values of all outstanding shares of common and preferred capital stock is the permanent capital of the association and any amount received as consideration for outstanding shares in excess of the par values must be credited to capital surplus. No association shall reduce its permanent capital or distribute any of its capital surplus to shareholders without first obtaining the consent of the Board. Except in supervisory cases, this consent must be withheld if the reduction will cause the permanent capital to be less than the minimum required by the Board at the time of the distribution to capitalize a new stock association.

(4) Unless otherwise provided by the articles of incorporation, no shareholder in a state stock association shall have the preemptive right to acquire unissued shares, or securities convertible or carrying a right to subscribe to or acquire shares, of the association. In the case of any capital stock association in existence prior to the effective date of this chapter, stockholders of this association shall continue to have the preemptive rights in this association which they had immediately prior to this date, unless and until the articles of incorporation are amended to alter or terminate stockholders' preemptive rights.

(5) An association shall not make a loan secured by the pledge of its capital stock.

(6) No subscriber to the stock of a proposed stock-owned association shall own or control as principal more than ten percent of any class of voting shares of the association without prior approval of the Board. No mutual association shall own or control as principal, directly or indirectly, any stock of any association, bank, bank holding company, as defined in 12 U.S.C. Section 1841(a)(1) as amended, or savings and loan holding company, as defined in the Federal Savings and Loan Holding Company Act, 12 U.S.C. Section 1730a(a)(1) (D) as amended, or any other depository financial institution. No association, bank, bank holding company, savings and loan holding company, or other depository financial institution shall own or control as principal, directly or indirectly, ten percent or more of any class of the outstanding voting shares of any stock-owned association without prior approval of the Board, and no stock-owned association shall own or control as principal, directly or indirectly, ten percent or more of any class of the outstanding voting shares of any association, bank, bank holding company, savings and loan holding company, or other depository institution without prior approval of the Board; provided, that no stock-owned association or holding company owning any of the stock of the association, which desires to own stock in any bank doing business in this State or any bank holding company owning any of the stock of the bank, shall own as principal more stock in that bank or bank holding company than that bank or bank holding company is permitted to own in a stock-owned association or holding company owning any of the stock of the association. The prohibitions of this section do not apply to a savings and loan holding company's owning all of the outstanding stock of a stock-owned association. Any stock of a stock-owned association which is used as loan collateral and which is acquired by a financial institution by loan default or is acquired as a result of a bankruptcy does not constitute a violation of this restriction if the acquiring institution divests itself of this stock within five years of acquisition or that longer period as may be approved by the Board. The restriction in Section 34-28-540(3) against an association's owning five percent or more of any class of voting stock in any corporation, other than a service corporation or a subsidiary in which it owns all of the voting shares, is not applicable to the stock ownership permitted by this subsection.

SECTION 34-28-130. Articles of incorporation content; approval by Board; amendment.

(1) The Articles of Incorporation of an association shall contain:

(a) The name of the proposed association, which shall comply with Section 34-28-110, and in the case of a stock-owned association must contain the word "corporation", "incorporated", "limited", or "company" or an abbreviation thereof sufficient to distinguish a stock-owned association from a mutual association;

(b) The address of the principal office of the association in South Carolina, including the county and municipality where it is located, together with a registered agent for receiving service of process and the address of the agent if it differs from that of the principal office of the association;

(c) The period of duration of the corporation which is deemed perpetual unless otherwise stated;

(d) The general nature of the business to be transacted or a statement that the association may engage in any activity or business permitted to associations under this chapter and other provisions of Title 34. This statement shall authorize all those activities and business by the association;

(e) With respect to a stock-owned association, the amount of capital stock authorized, showing the maximum number of shares of par value common stock and of preferred stock, and of every kind, class, or series of each, together with the distinguishing characteristics and the par value of all shares;

(f) The amount of capital with which the association will begin business;

(g) The number of directors, which may not be fewer than five, and the names and street addresses of the members of the first board of directors who, unless otherwise provided by the Articles of Incorporation, the bylaws, or this chapter, shall hold office for the term set forth in Section 34-28-420(4) or until their successors are elected or appointed and have qualified;

(h) The names, and addresses of all the incorporators, not less than ten in number;

(i) Any other provisions authorized or permitted to be in the Articles of Incorporation of a corporation by Chapters 1 to 25 of Title 33 which the incorporators elect to include therein.

(2) The Articles of Incorporation must be in writing, signed by all the incorporators, and submitted to the Board for its approval. Upon approval, the Board shall place the following legend upon the Articles of Incorporation "Approved by the Board of Financial Institutions this ___ day of ___, ___ (herein the name and signature of the Chairman of the Board)". Thereafter, the Articles of Incorporation must be filed with the Secretary of State.

(3) An association shall not amend its Articles of Incorporation without the prior written approval of the Board.

SECTION 34-28-140. Bylaws.

Unless the Articles of Incorporation provide otherwise, the Board of Directors of an association shall have authority to adopt or amend bylaws that do not conflict with bylaws that may have been adopted by the members or stockholders. The bylaws are for the government of the association, subordinate only to the Articles of Incorporation and the laws of the United States and of this State. A current copy of the bylaws must be filed with the Board.

SECTION 34-28-150. Opening for business.

(1) An association shall open and conduct a general savings and loan business no later than twelve months after the commencement of its corporate existence (Section 34-28-100(5)). The Board may extend the opening date for an additional period on its own motion or at the request of the association, for good cause shown.

(2) At the time as subscriptions for stock in a proposed stock association have been fully paid (and in the case of a mutual association, at the time as the capital required by the Board has been paid in cash to the association in the form of pledged savings accounts meeting the standards specified by regulation issued by the Board), but no later than thirty days prior to intended opening date, the association shall file with the Board a statement containing the name and address of each subscriber and the amount of capital subscribed by each and, showing that the entire capital required by the Board has been unconditionally and fully paid in lawful money and that the funds or assets representing the required capital are held by the association, that a commitment for the insurance of all deposit accounts has been obtained from the Federal Savings and Loan Insurance Corporation or any successor or assignee federal agency established for the purpose of insuring savings and other deposit accounts in associations and that all other conditions imposed by the Board pursuant to Section 34-28-100(5) have been satisfied.

(3) If the Board finds that the association has in good faith complied with all the requirements of law, and that the association's deposit accounts are properly insured, it shall promptly issue, in duplicate, under its official seal, a certificate of authorization to transact a general savings and loan business.

(4) Upon opening for business, an association shall have power to engage in a general savings and loan business and to exercise, subject to law and the regulations of the Board, all those incidental powers as may reasonably promote its general savings and loan business.

SECTION 34-28-160. Home, corporate and branch offices; facilities.

(1) Each office must be operated from the home or corporate office. All branch offices are subject to direction from the home or corporate office. The home office of an association must be the principal office specified in the Articles of Incorporation. Nothing in this chapter may be construed to prohibit any association from establishing a corporate office or offices upon prior written notification to the Board. A corporate office must be primarily established for the purpose of managing the administrative functions of the association and any service corporations and shall not accept deposits or issue payment for withdrawals of certificates or accounts. A corporate office may be established in connection with a branch office in which case an application pursuant to subsection (2) must be submitted.

(2)(a) A "branch office" is a legally established place of business of an association, other than the home or a corporate office or a remote service unit (Section 34-28-30), where deposits may be accepted.

(b) No association shall establish or maintain a branch office without the prior written approval of the Board. Each application for approval of the establishment and maintenance of a branch office must be in that form as the Board may prescribe and shall state:

1. The proposed location;

2. The functions to be performed;

3. The estimated volume of business;

4. The estimated annual expense;

5. The mode of payment; and

6. Other information as the Board may require.

(c) Upon receipt by the Board of an application, it shall consider the following criteria:

1. The sufficiency of the association's capital to support the association's deposit base and the additional fixed assets proposed for the branch and its operations, without undue exposure to its depositors, members, or stockholders;

2. The sufficiency of revenue prospects to support the anticipated expenses of the branch without jeopardizing the financial position of the association;

3. The sufficiency and quality of management of the association;

4. Whether the name of the proposed branch reasonably identifies the branch and is not likely to unduly confuse the public;

5. The substantial compliance by the association with all state law and federal law affecting its operations.

(d) The Board shall approve the application unless it finds that one or more of the conditions specified in 1 through 5 exist:

1. Public convenience and advantage will not be promoted by the establishment of the proposed branch. In determining whether an applicant meets the requirements of this paragraph, the Board shall consider all materially relevant factors, including:

a. The location and services proposed to be offered by the applicant and currently offered by existing associations in the primary service area to be served by the applicant;

b. The primary service area's general economic and demographic characteristics.

2. Local conditions do not indicate reasonable promise of the successful operation of the proposed branch and of those associations already established in the primary service area in determining whether an applicant meets the requirements of this paragraph, the Board shall consider all materially relevant factors, including:

a. Current economic conditions and the growth potential of the community in which the proposed applicant intends to locate the proposed branch;

b. The growth rate, size, financial strength, and operating characteristics of associations in the primary service area of the proposed branch.

3. The officers and directors of the applicant do not have sufficient experience, ability, standing, and responsibility to indicate reasonable promise of the successful operation of the branch;

4. The name of the proposed branch does not comply with Section 34-28-110.

5. Provision has not been made for suitable quarters at the location specified in the application.

(e) When the Board has approved a branch application, it shall promptly issue a certificate authorizing the operation of the branch and specifying the date on which it may be opened and the place where it will be located.

(f) A nonrefundable filing fee established by the Board shall accompany each application for a branch.

(3) With prior written notification to the Board, and in order to relieve some of the burdens on the public caused by congestion of public streets, roadways, and parking facilities, promote safety of pedestrians on public ways, or otherwise serve the needs or convenience of the public, an association may operate facilities providing services to customers. It is not necessary that any facility be a part of, or physically connected to, the main structure of the home office or branch if the facility is located on the property on which the main structure of the home office or branch is situated or on property contiguous thereto. Property which is separated from the property on which the main structure of the home office or branch is situated only by a street and one or more walkways and alleyways is, for the purpose of this subsection, considered contiguous. The operation of any facility which is not located on the property on which the main structure of the home office or branch is situated or on property contiguous thereto shall not constitute a facility within the meaning of this subsection.

(4) A home office or branch office may be relocated with the prior written approval of the Board. The Board shall consider the criteria set forth in this section for the establishment of a branch office in the determination of approval for the relocation. A nonrefundable filing fee in the amount specified by the Board shall accompany the application to relocate a home office or branch office.

ARTICLE 3.

CONVERSIONS; MERGERS AND CONSOLIDATIONS WITH OTHER ASSOCIATIONS; DISSOLUTION

SECTION 34-28-200. Conversion of state chartered associations into federal associations without change of business form.

(1) At an annual meeting or at any special meeting of the members or stockholders called to consider the action, any state-chartered association may convert itself into a federal savings association, federal savings and loan association, or federal savings bank, hereinafter called "federal association", in accordance with the laws of the United States, as now or hereafter amended, upon a vote of a majority or more of the total number of votes of the members or stockholders eligible to cast votes at the meeting. A copy of the minutes of the proceedings of the meeting of the members or stockholders, verified by the affidavit of the secretary or an assistant secretary, must be filed with the Board within ten days after the date of the meeting. A sworn copy of the proceedings of the meeting, when so filed, is presumptive evidence of the holding and action of the meeting. Within three months after the date of the meeting, the association shall commence that action in the manner prescribed and authorized by the laws of the United States as shall make it a federal association. There must be filed with the Board a copy of the charter issued to the federal association by the Federal Home Loan Bank Board or a certificate showing the organization of the association as a federal association, certified by the secretary or assistant secretary of the Federal Home Loan Bank Board. A similar copy of the charter, or of the certificate, must be filed by the association with the Secretary of State. No failure to file any of these instruments with either the Board or the Secretary of State shall affect the validity of the conversion. Upon the grant to any association of a charter by the Federal Home Loan Bank Board, the association receiving the charter shall cease to be an association incorporated under this chapter and is no longer subject to the supervision and control of the Board. Upon the conversion of any association into a federal association, the corporate existence of the association shall not terminate, but the federal association is considered to be a continuation of the entity of the association so converted, and all property of the converted association, including its right, title, and interest in all and to all property of whatever kind, whether real, personal, or mixed, and things in action, and every right, privilege, interest, and asset of any conceivable value or benefit then existing, pertaining to it, or which would inure to it, shall immediately by operation of law and without any conveyance or transfer and without any further act or deed remain and be vested in and continue to be the property of the federal association into which the state association has converted itself, and the federal association shall have, hold, and enjoy the same in its own right as fully and to the same extent as if the same were possessed, held, and enjoyed by the converting association. The federal association as of the time of the taking effect of the conversion shall continue to have and succeed to all the rights, obligations, and relations of the converting association. All pending actions and other judicial proceedings to which the converting state association is a party are not considered to have abated or to have discontinued by reason of the conversion, but may be prosecuted to final judgment, order, or decree in the same manner as if the conversion into the federal association had not been made, and the federal association resulting from the conversion may continue those actions in its corporate name as a federal association; and any judgment, order, or decree may be rendered for or against it which might have been rendered for or against the converting state association involved in the judicial proceedings.

(2) Any association or corporation which has converted itself into a federal association under the provisions of the laws of the United States and has received a charter from the Federal Home Loan Bank Board is thereafter recognized as a federal association, and its federal charter must be given full recognition by the courts of this State to the same extent as if the conversion had taken place under the provisions of this section; provided, there must have been compliance with the foregoing requirements with respect to the filing with the Board of a copy of the federal charter or a certificate showing the organization of the association as a federal association. All these conversions are hereby ratified and confirmed, and all the obligations of an association which has so converted shall continue as valid and subsisting obligations of the federal association, and the title to all of the property of the association is considered to have continued and vested, as of the date of issuance of the federal charter, in the federal association as fully and completely as if the conversion had taken place pursuant to this section since the effective date of this chapter.

SECTION 34-28-210. Conversion of federal association into state chartered association without change of business form.

Any federal association may apply to the Board for permission to convert itself without any change in business form into an association operated under the provisions of this chapter, in accordance with the following procedures:

(a) The board of directors shall approve a plan of conversion by resolution adopted by a majority vote of all the directors present at the meeting at which the plan is considered. The plan shall include, among other terms:

1. Financial statements of the association as of the last day of the month preceding adoption of the plan;

2. Financial data as may be required by the Board to determine compliance with federal law or regulations regarding insurance, reserve requirements, liquidity, and those other federal regulatory requirements as may exist respecting financial condition; and

3. Other information as the Board may by regulation require.

(b) The plan of conversion must be executed by a majority of the board of directors and submitted to the Board for approval prior to any vote on conversion by the members or stockholders.

(c) The Board may approve or disapprove the plan in its discretion, but it shall not approve the plan unless it finds that the association complies sufficiently with the requirements of this chapter to entitle it to become an association operating under this chapter and the regulations of the Board. The Board may deny any application from any federal association that is subject to any cease and desist order or other supervisory restriction or order imposed by the federal supervisory authority or insurer.

(d) If the Board approves the plan of conversion, the question of the conversion may be submitted to members or stockholders at an annual meeting or at any special meeting of the members or stockholders called to consider the action. Any federal association may then convert itself into an association under this chapter upon a vote of a majority or more of the total number of votes of the members or stockholders of the federal association eligible to be cast at the meeting. Copies of the minutes of the proceedings of the meeting of members or stockholders, verified by the affidavit of the secretary or an assistant secretary, must be filed in the office of the Board and mailed to the Federal Home Loan Bank Board, Washington, D.C., within ten days after the meeting. Verified copies of the proceedings of the meeting when so filed are presumptive evidence of the holding and action of the meeting. At the meeting at which conversion is voted upon, the members or stockholders shall also vote upon the directors who will be the directors of the state-chartered association after conversion takes effect. These directors shall then execute the Articles of Incorporation and two copies of the bylaws. The association shall insert in the Articles of Incorporation the following: "This association is incorporated by conversion from a federal association." All of the directors who are chosen for the association shall sign and acknowledge the Articles of Incorporation as incorporators. The provisions of this chapter shall, so far as applicable, apply to any conversion governed by this section. All the applicable provisions regarding property and other rights contained in Section 34-28-200 shall apply to the conversion of a federal association into an association incorporated under this chapter, so that the state-chartered association is a continuation of the corporate entity of the converting federal association and continues to have all of its property and rights. All rights, powers, and privileges respecting the holding of proxies of a converting association shall continue in full force and effect after the conversion.

(e) The application for conversion of a federal association into an association operating under the provisions of this chapter must be accompanied by a nonrefundable filing fee established by the Board.

SECTION 34-28-220. Conversion of a state or federal mutual association to a state capital stock association.

(1) Any state or federal mutual association may apply to the Board for permission to convert itself into a stock association operated under the provisions of this chapter in accordance with the following procedures and regulations promulgated by the Board:

(a) The Board of Directors shall approve a plan of conversion by resolution adopted by a majority vote of all the directors present at the meeting at which the plan is considered. The plan shall include, among other terms:

1. Financial statements of the association as of the last day of the month preceding adoption of the plan;

2. Financial data as may be required to determine compliance with applicable regulatory requirements respecting financial condition;

3. A provision that each savings account holder of the mutual association will receive a withdrawable account in the stock association equal in amount to and having the same terms as his withdrawable account in the mutual association;

4. A provision for the establishment and maintenance of a liquidation account for the benefit of savings account holders of the mutual association in the event of the liquidation of the association after its conversion which account shall meet all the requirements established by regulation promulgated by the Board;

5. A provision that each member of record will be entitled to receive rights to purchase voting common stock and the terms and conditions of these rights;

6. Pro forma financial statements of the association as a capital stock association, which shall include data required to determine compliance with applicable regulatory requirements respecting financial condition; and

7. Other information as the Board may by regulation require.

(b) The plan of conversion must be executed by a majority of the board of directors and submitted to the Board for approval prior to any vote on conversion by the members.

(c) The Board may approve or disapprove the plan in its discretion, but it shall not approve the plan unless it finds that the association will comply sufficiently with the requirements of this chapter after conversion to entitle it to become an association operating under this chapter and the regulations of the Board. The Board may deny any application from any federal association that is subject to any cease and desist order or other supervisory restriction or order imposed by a federal supervisory authority or insurer.

(d) If the Board approves the plan of conversion, the question of the conversion may be submitted to the members at a meeting of voting members called to consider the action. A vote of a majority or more of the total number of votes eligible to be cast at the meeting, unless federal law permits a lesser percentage of votes for a federal mutual association to convert, in which case that percentage shall control for conversions of both state and federal mutual associations, is required for approval. Notice of the meeting, giving the time, place, and purpose, together with a proxy statement and proxy form meeting the requirements in Section 33-11-140 and any applicable federal regulations approved by the Board covering all matters to be brought before the meeting, must be mailed at least thirty days prior to the Board and to each voting member at his last address as shown on the books of the association.

(e) Copies of the minutes of the meeting of members, verified by the affidavit of the secretary or assistant secretary of the association, must be filed with the Board, and with the Federal Home Loan Bank Board if applicable, within ten days after the meeting. When so filed, the verified copies of the minutes are presumptive evidence of the holding of the meeting and of the action taken.

(f) The directors of the association shall execute and file with the Board proposed Articles of Incorporation as provided for in Section 34-28-130, together with the application for conversion, and a statement showing that requisite capital required in the conversion plan approved by the Board has been paid to the association in cash, that all other conditions imposed by the Board or specified in the plan of conversion have been satisfied, and that a firm commitment for, or evidence of, insurance of deposits and other accounts of a withdrawable type from the Federal Savings and Loan Insurance Corporation has been obtained. The Articles of Incorporation of the converted association shall contain a statement that the association resulted from the conversion of a state or federal mutual association to a capital stock association. Approval by the Board must be affixed to the Articles of Incorporation. The original copy of the Articles of Incorporation must be filed with the Secretary of State and a certified copy of the Articles of Incorporation must be filed with the Board, provided that failure to file a certified copy of the Articles of Incorporation with the Board shall not affect the validity of the conversion. The association shall cease to be a mutual association at the time and on the date specified in the approved Articles of Incorporation or the date the Articles of Incorporation are filed in the office of the Secretary of State, whichever is later.

(2) Upon conversion of a mutual association to a state-chartered stock association, the legal existence of the association shall not terminate, but the capital stock association is a continuation of the entity of the mutual association, and all property of the mutual association, including its right, title, and interests in and to all property of whatever kind, whether real, personal, or mixed, things in action, and every right, privilege, interest, and asset of every conceivable value or benefit then existing or pertaining to it, or which would inure to it, immediately, by act of law and without any conveyance or transfer and without any further act or deed, shall vest and remain in the stock association into which the mutual association has converted itself. The capital stock association shall have, hold, and enjoy the same in its own right as fully and to the same extent as if the same were possessed, held, and enjoyed by the mutual association. The capital stock association, upon the effective date of the conversion, shall continue to have and succeed to all the rights, obligations, and relations of the mutual association. All pending actions and other judicial proceedings to which the mutual association is a party are not abated or discontinued by reason of the conversion but may be prosecuted to final judgment, order, or decree in the same manner as if the conversion had not been made; and the stock association resulting from the conversion may continue the actions in its corporate name as a mutual association. Any judgment, order, or decree may be rendered for or against the stock association which might have been rendered for or against the mutual association involved in the proceedings.

(3) The application for conversion from a state or federal mutual to a state stock association must be accompanied by a nonrefundable filing fee established by the Board.

SECTION 34-28-230. Power to reorganize, merge, or consolidate or sell assets out of the ordinary course of business.

(1) Pursuant to a plan adopted by the board of directors and approved by the Board as equitable and as adequately protecting the interests of the association, its members or stockholders, its deposit account holders, and the public, an association shall, subject to Article 4 of this chapter, have power to reorganize, to merge, or consolidate into another association or company, or to sell all or substantially all of its assets out of the ordinary course of business to another association or company, provided the plan of the reorganization, merger, or consolidation or sale of assets meets the procedural requirements of the South Carolina Business Corporation Act, Chapters 1 to 25 of Title 33, for these transactions.

(2) The Board may provide by regulation for the procedures to be followed by any association submitting a plan of reorganization, merger, or consolidation pursuant to this section.

(3) The Board may not approve any proposed transactions set forth in this section:

(a) Which would result in a monopoly, or which would be in furtherance of any combination or conspiracy to monopolize or to attempt to monopolize the savings and loan business in this State; or

(b) The effect of which in this State may be substantially to lessen competition, or to tend to create a monopoly, or which in any other manner would be in restraint of trade, unless it finds that the anticompetitive effects of the proposed transaction are clearly outweighed in the public interest by the probable effect of the proposed reorganization, merger, or consolidation or sale of assets in meeting the convenience and needs of the primary service area to be served.

(4) Each application for reorganization, merger, consolidation, or sale of assets out of the ordinary course of business must be accompanied by a nonrefundable filing fee as determined by the Board.

(5) In the event of any conflict between this section and Article 4 of this chapter, the provisions of Article 4 shall control.

SECTION 34-28-240. Voluntary supervisory stock conversions.

(1) A voluntary supervisory stock conversion is a conversion involving the sale of a mutual association's newly issued stock to a third party or parties in a transaction in which the association's members have no rights of approval or participation, and no rights to the continuance of any legal or beneficial ownership interest in the converted association pursuant to a conversion plan approved by the Board and a majority of the board of directors of the converting association.

(2) The Board shall have the discretion to approve a voluntary supervisory stock conversion, subject to regulations it may promulgate, when:

(a) It has the power to appoint a receiver for the purpose of liquidation of the converting association pursuant to Section 34-28-730;

(b) Upon liquidation the mutual account holders of the converting association would not realize any equity value;

(c) The converting association is in receivership, or has been authorized to receive assistance under Section 406 of the National Housing Act, l2 U.S.C. Section 1729, or the Board has determined that a severe financial condition exists which threatens the financial condition of the converting association and that approval of the voluntary supervisory conversion is likely to improve the converting association's financial condition; and

(d) The Board finds that following the conversion, the converting association will be a viable entity.

SECTION 34-28-250. Supervisory case; emergency conversion, reorganization and merger.

(1) The Board may determine that an association is a supervisory case if it finds that:

(a) The association is in an impaired condition (Section 34-28-30(10)); or

(b) The association is in imminent danger of being in an impaired condition. Any of these findings by the Board must be based upon reports furnished to it by a savings and loan association examiner or upon other evidence from which it is reasonable to conclude that the association is a supervisory case.

(2) Notwithstanding any other provisions of this chapter, if the Board finds that immediate action is necessary in order to prevent the probable failure of an association which is a supervisory case, the Board shall have the power, with the concurrence of the appropriate federal regulatory agency in the case of any association the deposits of which are insured by the Federal Savings and Loan Insurance Corporation, to issue an emergency order authorizing:

(a) the conversion of the association into a federal association without change of business form;

(b) the reorganization, merger, or consolidation of the association;

(c) the conversion of the association into a capital stock association; or

(d) any state or federal association to acquire the assets of and assume the liabilities of the failing association.

SECTION 34-28-260. Acquisition of majority control over existing stock-owned association.

Subject to the provisions of Article 4 of this chapter:

(1)(a) In any case in which a person or group of persons propose to purchase or acquire voting common stock of any stock-owned association, which purchase or acquisition would cause the person or group of persons to have control of that association, the person or group of persons shall first make application to the Board for a certificate of approval of the purchase or acquisition.

(b) An application for control must be in that form and contain that information as the Board may by regulation require.

(c) The application for control must be accompanied by a nonrefundable filing fee as determined by the Board.

(2) The Board shall issue a certificate of approval only after it has made an investigation and determined that:

(a) The proposed new owner or owners of voting common stock are qualified by character, experience, and financial responsibility to control the association in a legal and proper manner.

(b) The interests of the public generally will not be jeopardized by the proposed purchase or acquisition of voting common stock.

(c) If the Board does not disapprove a proposed change of control application within sixty days of the time it is filed with the Board, the proposed transaction is considered approved and may take place, provided that all other required regulatory approvals have been obtained, that the transaction is consummated within one year of the time the application is filed, and that there is no material change in the terms and conditions of the transaction disclosed in the application prior to the consummation. The sixty-day period specified in the preceding sentence may be extended by the Board for up to thirty days for any reasons if written notice of the extension is given to the applicant prior to the expiration of the sixty-day period.

(d) The applicant is entitled to notice and a hearing contesting the denial by the Board of any change of control application filed pursuant to this section.

(3) This section shall not apply to the acquisition of:

(a) Directors' voting proxies acquired in the normal course of business as a result of proxy solicitation in conjunction with a stockholders' meeting;

(b) Stock in a fiduciary capacity unless the acquiring person has sole discretionary authority to exercise voting rights;

(c) Stock acquired in securing or collecting a debt contracted in good faith until two years after the date of acquisition; or

(d) Stock acquired by an underwriter in good faith and without any intent to evade the purpose of this section if the shares are held only for a reasonable period of time as will permit the sale.

SECTION 34-28-270. Dissolution.

(1) Any association may, at any special meeting of the members or stockholders called to consider the action, terminate its existence in accordance with the provisions of this section upon a vote of more than a majority of the total number of votes of members or shareholders eligible to be cast at the meeting.

(2) Upon the vote, three copies of a statement of interest to dissolve, which shall state the vote cast in favor of dissolution, must be filed with the Board, which shall examine the association, and, if it finds that the association is not in an impaired condition, it shall so note, together with its approval of the dissolution, upon all the copies of the certificate of dissolution. The Board shall place a copy in its permanent files, file a copy with the Secretary of State, and return the remaining copy to the parties who filed it.

(3) Upon this approval, the association is dissolved and shall cease to carry on business but nevertheless shall continue as a corporate entity for the sole purpose of paying, satisfying, and discharging existing liabilities and obligations, collecting and distributing assets, and doing all other acts required to adjust, wind up, and dissolve its business and affairs.

(4) The board of directors in office at the time of the vote of dissolution shall act as trustees for the liquidation. The board of directors shall proceed as quickly as may be practicable to wind up the affairs of the association and, to the extent necessary or expedient to that end, shall exercise all the powers of the dissolved association and, without prejudice to the general nature of this authority, may fill vacancies, elect officers, carry out contracts, make new contracts, borrow money, mortgage or pledge property, sell its assets at public or private sale, compromise claims in favor of or against the association, apply assets to the discharge of liabilities, distribute assets either in cash or in kind among savings account members of a mutual association or stockholders of a capital stock association according to their respective prorata interests after paying or adequately providing for the payment of other liabilities, and perform all acts necessary or expedient to the winding up of the association. All deeds or other instruments must be in the name of the association and executed by the president or a vice president and the secretary or an assistant secretary. The board of directors shall also have power to exchange or otherwise dispose of or put in trust all, substantially all, or any part of the assets, upon those terms and conditions and for that consideration as the board of directors may consider reasonable or expedient, and may distribute the consideration or the proceeds, trust receipts, or certificates of beneficial interest among the savings account members of a mutual association or stockholders of a stock association in proportion to their prorata interests. In the absence of fraud, any determination of value made by the board of directors for any of these purposes is conclusive.

(5) The association, during the liquidation of the as

State Codes and Statutes

Statutes > South-carolina > Title-34 > Chapter-28

Title 34 - Banking, Financial Institutions and Money

CHAPTER 28.

SAVINGS ASSOCIATIONS

ARTICLE 1.

GENERAL PROVISIONS

SECTION 34-28-10. Short title of Articles 1 through 10.

Articles 1 through 10 of this chapter are known and may be cited as the "South Carolina Savings Association Act". Wherever "this Act" appears in this chapter, unless the context clearly indicates otherwise, it means Articles 1 through 10 of Chapter 28 of Title 34.

SECTION 34-28-20. Application of the South Carolina Business Corporation Act.

When not in direct conflict with or superseded by specific provisions of this chapter, the provisions of the South Carolina Business Corporation Act, Chapters 1 to 25 of Title 33, apply to any association organized or operated under this chapter.

SECTION 34-28-30. Definitions.

As used in this act, unless the context otherwise requires:

(1) "Assets" means, at any particular time, those properties and rights which are properly entered in the accounts and balance sheets of an association and any of its subsidiaries (to the extent of the association's interest therein) in terms of a monetary value.

(2) "Association" means a mutual or stock-owned savings association, savings and loan association, building and loan association, or savings bank that is subject to the provisions of this chapter.

(3) "Board" means the State Board of Financial Institutions.

(4) "Capital stock" means the aggregate of shares of nonwithdrawable capital represented by stock certificates.

(5) "Company" means any corporation (domestic or foreign), partnership, trust, association, joint venture, syndicate, or any other type of business organization.

(6) "Control" of a company means directly or indirectly acting alone or in concert with one or more other persons or through one or more subsidiaries or through proxies, for the following: (i) ownership of or voting control of more than twenty-five percent of the voting shares or rights of the company; (ii) the right to control in any manner the election or appointment of a majority of the directors or trustees of the company; or (iii) a general partner in or contributor of more than twenty-five percent of the capital of the company.

(7) "Dwelling unit" means a single, unified combination of rooms which is designed for residential use by one family in a multiple dwelling unit structure and which is not "home property".

(8) "Earnings" means that part of the sources available for payment of earnings of a mutual association which is declared payable on savings accounts by the Board of Directors and is the cost of savings money to the association. Earnings also may be referred to as "interest".

(9) "Home property" means real estate on which there is located, or will be located pursuant to a real estate loan, either a structure designed for residential use by one family, or a single condominium unit or cooperative including common elements pertinent thereto, designed for residential use by one family in a multiple-dwelling unit structure or complex and includes fixtures and home furnishings and equipment.

(10) "Impaired condition" means a condition in which the assets of an association as recorded on the books of the association (book value) are less than the aggregate amount of liabilities of the association to its creditors, including the holders of its savings and other deposit accounts or in which an association is unable to meet current obligations as they mature, even though assets may exceed liabilities.

(11) "Improved real estate" means real estate on which there is a structure or an enclosure or which is cultivated, reclaimed, used for the purpose of agriculture in any form, prepared as building lots or sites, or otherwise occupied, made better, more useful, or of greater value by care.

(12) "Insured association" means an association the deposit accounts of which are insured wholly or in part by the Federal Savings and Loan Insurance Corporation or any successor or assignee federal agency established for the purpose of insuring savings and other deposit accounts in associations.

(13) "Liquid assets" means:

(a) Cash on hand;

(b) Cash on deposit in federal home loan banks, federal reserve banks, state banks performing similar reserve functions, or financial depository institutions, which is withdrawable upon not more than thirty days' notice and which is not pledged as security for indebtedness, except that any deposits in a financial depository institution under the control or in the possession of any supervisory authority are not considered as liquid assets;

(c) Obligations of, or obligations which are fully guaranteed as to principal and interest by, the United States or this State; and

(d) Such other assets as may be approved by the Board which are accepted as liquid assets for insured associations by the appropriate federal regulatory agency.

(14) "Member" means a person holding a deposit account in a mutual association, or borrowing from or assuming or obligated upon a loan or interest therein held by a mutual association, or purchasing property securing a loan or interest therein held by a mutual association. A joint and survivorship relationship, whether of depositors or borrowers, constitutes a single membership. A stock association has no members.

(15) "Net income" means the gross revenue of a mutual association for an accounting period less the sum of all expenses paid or incurred, taxes, and losses sustained as have not been charged to reserves pursuant to the provisions of this chapter.

(16) "Officer" means the president, any vice-president (but not an assistant vice-president, second vice-president, or other vice-president having authority similar to an assistant or second vice-president), the secretary, the treasurer, the comptroller, and any other person performing similar functions with respect to any association. "Officer" also includes the chairman of the board of directors of an association if the chairman is authorized by the charter or bylaws of the organization to participate in its operating management or if the chairman in fact participates in this management.

(17) "Person" means an individual, a fiduciary, or a company.

(18) "Primarily residential property" means real estate on which there is located, or will be located pursuant to a real estate loan, any of the following:

(a) structure or structures designed or used primarily for residential rather than nonresidential purposes and consisting of more than one dwelling unit;

(b) structure or structures designed or used primarily for residential rather than nonresidential purposes for students, residents, and persons under care, or primarily for employees, or members of the staff of an educational, health, or welfare institution or facility;

(c) structure or structures which are used in part for residential purposes for not more than one family and in part for business purposes, provided that the residential use of the structure or structures must be substantial and permanent, not merely transitory.

(19) "Primary service area" means a reasonable geographical area from which a proposed or existing association or branch thereof expects to draw approximately seventy-five percent of its deposits.

(20) "Real estate loan" means any loan or other obligation:

(1) secured by property that is real property pursuant to the law of the state where the property is located;

(2) where the security interest of the holder of the loan or obligation may be enforced as a real estate mortgage or its equivalent pursuant to the law of the state where the property is located;

(3) where the security property is capable of separate appraisal;

(4) where the lender relies substantially upon the real estate as the primary security for the loan;

(5) where, with regard to a security property that is a leasehold or other interest for a period of years, the term of the interest extends, or is subject to extension or renewal at the option of the holder of the loan or other obligation, for a term of at least the maturity of the loan.

(21) "Remote service unit" means an information processing device, including associated equipment, structures, and systems by which information relating to financial services rendered to the public is stored and transmitted, instantaneously or otherwise, to an association or other financial institution having its home or approved branch office in this State. The term includes without limitation, point-of-sale terminals, merchant-operated terminals, cash dispensing machines, and automated teller machines. A remote service unit is not a branch of an association and is not subject to any of the provisions of this title applicable to branch offices.

(22) "Savings account" means that part of the savings liability of the association which is credited to the account of the holder. A savings account also may be referred to as and includes a "savings deposit".

(23) "Savings liability" means the aggregate amount of savings accounts of depositors, including earnings credited to these accounts, less redemptions and withdrawals.

(24) "Service corporation" means an organization which is empowered to engage in any activity permitted by this chapter, and which is controlled by one or more associations. It includes any subsidiary of a service corporation.

(25) "Sources available for payment of earnings" means net income of a mutual association for an accounting period less amounts transferred to reserves as provided in or permitted by this chapter, plus any balance of undivided profits from preceding accounting periods.

(26) "Stockholder" means the holder of one or more shares of any class of capital stock of a capital stock association organized or operating pursuant to the provisions of this chapter.

(27) "Subsidiary" means any company which is controlled directly or indirectly by another company.

(28) "Surplus" means the aggregate amount of the undistributed net income of a mutual association held as undivided profits or unallocated reserves for general corporate purposes.

(29) "Withdrawal value" means the amount credited to a savings account, less lawful deductions therefrom, as shown by the records of an association.

ARTICLE 2.

HOME INCORPORATION BRANCH OFFICES AND FACILITIES

SECTION 34-28-100. Application for authority to incorporate; action by Board on application.

(1) When authorized by the Board as provided in this article, an association may be formed under the laws of this State for the purpose of conducting a general savings and loan business and having all the powers and purposes authorized by this chapter and otherwise by Title 34.

(2) A written application for authority to organize an association as provided in subsection (1) must be filed with the Board and include:

(a) the proposed corporate name and evidence that the proposed name has been reserved with the Secretary of State; however, evidence that an association has reserved a corporate name with the Secretary of State does not preclude the Board from disapproving the name on the grounds of potential confusion with the name of an existing financial institution;

(b) detailed financial and biographical information as the Board may require for each proposed director, chief executive officer, and managing officer;

(c) the total amount of the savings account capital or capital stock proposed to be issued, the amount subscribed by each incorporator, and the method to be used to raise any remaining capital required before the proposed association will be authorized to begin business;

(d) the name and address of the proposed managing officer and chief executive officer, if known;

(e) the community and the street and number, if available, where the proposed association is to be located; and

(f) additional information as the Board may reasonably require. The application for authority to organize must be filed with the Board in triplicate and must be accompanied by a nonrefundable filing fee established by the Board.

(3)(a) Upon the filing of an application, the Board shall make an investigation of:

1. the character, reputation, financial standing, experience, and business qualifications of the proposed officers and directors;

2. the character, reputation, financial standing, and motives of the incorporator or incorporators in organizing the proposed association;

3. the public need for an association or additional association, as the case may be, in the primary service area where the proposed association is to be located, giving particular consideration to the ability of the primary service area to support both the proposed and all other existing associations in the community in the conduct of profitable operations and to the benefits of competition to the public.

(b) Any applicant who files an application which requires an investigation to be conducted outside the State shall reimburse the Board for all costs incurred in the normal course of investigation, which reimbursement must be in addition to the filing fee authorized in this section.

(4) The Board shall approve the application unless it finds that one or more of the conditions in (a) through (f) exist:

(a) Public convenience and advantage will not be promoted by the establishment of the proposed association. In determining whether an applicant meets this requirement, the Board shall consider all materially relevant factors, including:

1. the location and services proposed to be offered by the applicant and currently offered by existing associations in the primary service area to be served by the applicant; and

2. the primary service area's general economic and demographic characteristics.

(b) Local conditions do not indicate reasonable promise of the successful operation of the proposed association and of those associations already established in the primary service area community. In determining whether an applicant meets this requirement, the Board shall consider all materially relevant factors, including:

1. Current economic conditions and the growth potential of the primary service area in which the proposed association intends to locate; and

2. The growth rate, size, financial strength, and operating characteristics of other associations in the primary service area of the proposed association.

(c) The proposed officers and directors do not have sufficient experience, ability, standing, and responsibility to indicate reasonable promise of the successful operation of the association.

(d) The applicant's proposed capital structure is inadequate. In no event may the minimum capital required be less than three million dollars or that larger amount as may be specified in a regulation issued by the Board.

(e) The name of the proposed association does not comply with Section 34-28-110.

(f) No provision has been made for suitable quarters at the location specified in the application.

(5) The order approving an application may impose reasonable conditions which must be met before a certificate of authorization to transact business will be issued, which conditions may include employment of suitable personnel, alterations to the proposed capital structure, the obtaining of suitable quarters at the location proposed, or those other matters as the Board may deem necessary. If the Board approves the application for authority to organize, the applicant shall file its articles of incorporation with the Secretary of State and apply for a commitment for appropriate insurance of accounts. Upon approval by the Board of the application for authority to organize, the Board shall forward a copy of its final order to the Federal Savings and Loan Insurance Corporation. The corporate existence of an association begins on the date that the approved articles of incorporation are filed with the Secretary of State, unless otherwise provided in the articles of incorporation, but the association shall not commence business before it is in possession of a certificate of authorization to transact business as provided in Section 34-28-150. Prior to that time, an association may perform only those acts as are necessary to perfect its organization, raise capital, obtain and equip a place of business, and otherwise prepare for a general savings association business.

SECTION 34-28-110. Name of an association.

(1) The name of every association shall include either the words "building and loan association", "savings and loan association", or "savings bank". These words must be preceded by an appropriate descriptive word or words approved by the Board. An ordinal number may not be used as a single descriptive word in the association's name immediately preceding the words "savings association", "savings and loan association", or "savings bank" unless the words are followed by the words "of __________," the blank being filled by the name of the community, town, city, county, or state in which the association has its home office. The use of the words "National", "United States", "insured", or "guaranteed", separately or in any combination thereof with other words or syllables, is prohibited as part of the corporate name of an association. No certificate of incorporation of a proposed association having the same name as a corporation authorized to do business under the laws of this State or a name so nearly resembling it as to be likely to deceive or cause confusion in the mind of the public with any other financial depository institution in this State may be approved by the Board, except for an association formed by the reincorporation, reorganization, conversion, or consolidation of the other financial depository institution with the proposed association or upon the sale of all or substantially all the property and franchise of the other financial institution to the proposed association. Nothing herein may be construed to require or cause any association doing business to change its name from the way it exists on April 1, 1985. In addition to meeting the requirements of this subsection, the name of a stock-owned association must also comply with Section 34-28-130(1)(a).

(2) No person, unless he or it is lawfully authorized to do business in this State under the provisions of this chapter and actually is engaged in carrying on a savings association business, shall do business under any name or title which contains the terms "savings association", "savings and loan association", "savings bank", "building and loan association", "building association", or any combination employing either or both of the words "building" or "loan" with one or more of the words "saving" or "savings", or words of similar import, with one or more of the words "association", "institution", "society", "company", "fund", or "corporation", or words of similar import, or use any name or sign or circulate or use any letterhead, billhead, circular, or paper whatever, or advertise or represent in any manner which indicates or reasonably implies that his business is the character or kind of business carried on or transacted by an association or which is likely to lead any person to believe that his business is that of an association; however, the words "saving", "savings", "company", or "corporation", or the plural of any thereof, may be used by, and in the corporate or other name or title of, any company which is or becomes a savings and loan holding company pursuant to the provisions of this chapter or regulations of the Federal Home Loan Bank Board. Upon application by the Board or any association, a court of competent jurisdiction may issue an injunction to restrain any person from violating or continuing to violate any of the foregoing provisions of this subsection. Any person who violates any provision of this subsection is guilty of a misdemeanor and upon conviction must be punished by a fine of not more than five thousand dollars, and each day of violation shall constitute a separate offense. The prohibitions of this subsection shall not apply to any corporation or association formed for the purpose of promoting the interests of associations, their officers, or other representatives.

SECTION 34-28-120. Capital stock of state stock associations; power and limitations on sale and issuance of stock; characteristics of capital stock; loans secured by capital stock prohibited; restrictions on ownership of stock.

(1) A stock owned association may issue the shares of stock authorized by its articles of incorporation and none other. Capital stock shall have the par value stated in the articles of incorporation and, with the prior approval of the Board, may consist of common stock and preferred stock which may be divided into classes and classes may be divided into series. Each kind, class, and series may have those distinguishing characteristics, including designations, preferences, or restrictions as regards dividends, redemption, voting powers, or restrictions or qualifications of voting powers, as are imposed in the articles of incorporation. The provisions of the articles of incorporation shall control in any case in which any vote or consent of stockholders is now or hereafter required by statute unless the statute shall expressly provide to the contrary.

(2) The consideration for the issuance of shares must be paid in full before their issuance and must not be less than the par value. The consideration for the shares must be paid in cash. Upon payment, the shares are considered to be fully paid and nonassessable.

(3) The total of the par values of all outstanding shares of common and preferred capital stock is the permanent capital of the association and any amount received as consideration for outstanding shares in excess of the par values must be credited to capital surplus. No association shall reduce its permanent capital or distribute any of its capital surplus to shareholders without first obtaining the consent of the Board. Except in supervisory cases, this consent must be withheld if the reduction will cause the permanent capital to be less than the minimum required by the Board at the time of the distribution to capitalize a new stock association.

(4) Unless otherwise provided by the articles of incorporation, no shareholder in a state stock association shall have the preemptive right to acquire unissued shares, or securities convertible or carrying a right to subscribe to or acquire shares, of the association. In the case of any capital stock association in existence prior to the effective date of this chapter, stockholders of this association shall continue to have the preemptive rights in this association which they had immediately prior to this date, unless and until the articles of incorporation are amended to alter or terminate stockholders' preemptive rights.

(5) An association shall not make a loan secured by the pledge of its capital stock.

(6) No subscriber to the stock of a proposed stock-owned association shall own or control as principal more than ten percent of any class of voting shares of the association without prior approval of the Board. No mutual association shall own or control as principal, directly or indirectly, any stock of any association, bank, bank holding company, as defined in 12 U.S.C. Section 1841(a)(1) as amended, or savings and loan holding company, as defined in the Federal Savings and Loan Holding Company Act, 12 U.S.C. Section 1730a(a)(1) (D) as amended, or any other depository financial institution. No association, bank, bank holding company, savings and loan holding company, or other depository financial institution shall own or control as principal, directly or indirectly, ten percent or more of any class of the outstanding voting shares of any stock-owned association without prior approval of the Board, and no stock-owned association shall own or control as principal, directly or indirectly, ten percent or more of any class of the outstanding voting shares of any association, bank, bank holding company, savings and loan holding company, or other depository institution without prior approval of the Board; provided, that no stock-owned association or holding company owning any of the stock of the association, which desires to own stock in any bank doing business in this State or any bank holding company owning any of the stock of the bank, shall own as principal more stock in that bank or bank holding company than that bank or bank holding company is permitted to own in a stock-owned association or holding company owning any of the stock of the association. The prohibitions of this section do not apply to a savings and loan holding company's owning all of the outstanding stock of a stock-owned association. Any stock of a stock-owned association which is used as loan collateral and which is acquired by a financial institution by loan default or is acquired as a result of a bankruptcy does not constitute a violation of this restriction if the acquiring institution divests itself of this stock within five years of acquisition or that longer period as may be approved by the Board. The restriction in Section 34-28-540(3) against an association's owning five percent or more of any class of voting stock in any corporation, other than a service corporation or a subsidiary in which it owns all of the voting shares, is not applicable to the stock ownership permitted by this subsection.

SECTION 34-28-130. Articles of incorporation content; approval by Board; amendment.

(1) The Articles of Incorporation of an association shall contain:

(a) The name of the proposed association, which shall comply with Section 34-28-110, and in the case of a stock-owned association must contain the word "corporation", "incorporated", "limited", or "company" or an abbreviation thereof sufficient to distinguish a stock-owned association from a mutual association;

(b) The address of the principal office of the association in South Carolina, including the county and municipality where it is located, together with a registered agent for receiving service of process and the address of the agent if it differs from that of the principal office of the association;

(c) The period of duration of the corporation which is deemed perpetual unless otherwise stated;

(d) The general nature of the business to be transacted or a statement that the association may engage in any activity or business permitted to associations under this chapter and other provisions of Title 34. This statement shall authorize all those activities and business by the association;

(e) With respect to a stock-owned association, the amount of capital stock authorized, showing the maximum number of shares of par value common stock and of preferred stock, and of every kind, class, or series of each, together with the distinguishing characteristics and the par value of all shares;

(f) The amount of capital with which the association will begin business;

(g) The number of directors, which may not be fewer than five, and the names and street addresses of the members of the first board of directors who, unless otherwise provided by the Articles of Incorporation, the bylaws, or this chapter, shall hold office for the term set forth in Section 34-28-420(4) or until their successors are elected or appointed and have qualified;

(h) The names, and addresses of all the incorporators, not less than ten in number;

(i) Any other provisions authorized or permitted to be in the Articles of Incorporation of a corporation by Chapters 1 to 25 of Title 33 which the incorporators elect to include therein.

(2) The Articles of Incorporation must be in writing, signed by all the incorporators, and submitted to the Board for its approval. Upon approval, the Board shall place the following legend upon the Articles of Incorporation "Approved by the Board of Financial Institutions this ___ day of ___, ___ (herein the name and signature of the Chairman of the Board)". Thereafter, the Articles of Incorporation must be filed with the Secretary of State.

(3) An association shall not amend its Articles of Incorporation without the prior written approval of the Board.

SECTION 34-28-140. Bylaws.

Unless the Articles of Incorporation provide otherwise, the Board of Directors of an association shall have authority to adopt or amend bylaws that do not conflict with bylaws that may have been adopted by the members or stockholders. The bylaws are for the government of the association, subordinate only to the Articles of Incorporation and the laws of the United States and of this State. A current copy of the bylaws must be filed with the Board.

SECTION 34-28-150. Opening for business.

(1) An association shall open and conduct a general savings and loan business no later than twelve months after the commencement of its corporate existence (Section 34-28-100(5)). The Board may extend the opening date for an additional period on its own motion or at the request of the association, for good cause shown.

(2) At the time as subscriptions for stock in a proposed stock association have been fully paid (and in the case of a mutual association, at the time as the capital required by the Board has been paid in cash to the association in the form of pledged savings accounts meeting the standards specified by regulation issued by the Board), but no later than thirty days prior to intended opening date, the association shall file with the Board a statement containing the name and address of each subscriber and the amount of capital subscribed by each and, showing that the entire capital required by the Board has been unconditionally and fully paid in lawful money and that the funds or assets representing the required capital are held by the association, that a commitment for the insurance of all deposit accounts has been obtained from the Federal Savings and Loan Insurance Corporation or any successor or assignee federal agency established for the purpose of insuring savings and other deposit accounts in associations and that all other conditions imposed by the Board pursuant to Section 34-28-100(5) have been satisfied.

(3) If the Board finds that the association has in good faith complied with all the requirements of law, and that the association's deposit accounts are properly insured, it shall promptly issue, in duplicate, under its official seal, a certificate of authorization to transact a general savings and loan business.

(4) Upon opening for business, an association shall have power to engage in a general savings and loan business and to exercise, subject to law and the regulations of the Board, all those incidental powers as may reasonably promote its general savings and loan business.

SECTION 34-28-160. Home, corporate and branch offices; facilities.

(1) Each office must be operated from the home or corporate office. All branch offices are subject to direction from the home or corporate office. The home office of an association must be the principal office specified in the Articles of Incorporation. Nothing in this chapter may be construed to prohibit any association from establishing a corporate office or offices upon prior written notification to the Board. A corporate office must be primarily established for the purpose of managing the administrative functions of the association and any service corporations and shall not accept deposits or issue payment for withdrawals of certificates or accounts. A corporate office may be established in connection with a branch office in which case an application pursuant to subsection (2) must be submitted.

(2)(a) A "branch office" is a legally established place of business of an association, other than the home or a corporate office or a remote service unit (Section 34-28-30), where deposits may be accepted.

(b) No association shall establish or maintain a branch office without the prior written approval of the Board. Each application for approval of the establishment and maintenance of a branch office must be in that form as the Board may prescribe and shall state:

1. The proposed location;

2. The functions to be performed;

3. The estimated volume of business;

4. The estimated annual expense;

5. The mode of payment; and

6. Other information as the Board may require.

(c) Upon receipt by the Board of an application, it shall consider the following criteria:

1. The sufficiency of the association's capital to support the association's deposit base and the additional fixed assets proposed for the branch and its operations, without undue exposure to its depositors, members, or stockholders;

2. The sufficiency of revenue prospects to support the anticipated expenses of the branch without jeopardizing the financial position of the association;

3. The sufficiency and quality of management of the association;

4. Whether the name of the proposed branch reasonably identifies the branch and is not likely to unduly confuse the public;

5. The substantial compliance by the association with all state law and federal law affecting its operations.

(d) The Board shall approve the application unless it finds that one or more of the conditions specified in 1 through 5 exist:

1. Public convenience and advantage will not be promoted by the establishment of the proposed branch. In determining whether an applicant meets the requirements of this paragraph, the Board shall consider all materially relevant factors, including:

a. The location and services proposed to be offered by the applicant and currently offered by existing associations in the primary service area to be served by the applicant;

b. The primary service area's general economic and demographic characteristics.

2. Local conditions do not indicate reasonable promise of the successful operation of the proposed branch and of those associations already established in the primary service area in determining whether an applicant meets the requirements of this paragraph, the Board shall consider all materially relevant factors, including:

a. Current economic conditions and the growth potential of the community in which the proposed applicant intends to locate the proposed branch;

b. The growth rate, size, financial strength, and operating characteristics of associations in the primary service area of the proposed branch.

3. The officers and directors of the applicant do not have sufficient experience, ability, standing, and responsibility to indicate reasonable promise of the successful operation of the branch;

4. The name of the proposed branch does not comply with Section 34-28-110.

5. Provision has not been made for suitable quarters at the location specified in the application.

(e) When the Board has approved a branch application, it shall promptly issue a certificate authorizing the operation of the branch and specifying the date on which it may be opened and the place where it will be located.

(f) A nonrefundable filing fee established by the Board shall accompany each application for a branch.

(3) With prior written notification to the Board, and in order to relieve some of the burdens on the public caused by congestion of public streets, roadways, and parking facilities, promote safety of pedestrians on public ways, or otherwise serve the needs or convenience of the public, an association may operate facilities providing services to customers. It is not necessary that any facility be a part of, or physically connected to, the main structure of the home office or branch if the facility is located on the property on which the main structure of the home office or branch is situated or on property contiguous thereto. Property which is separated from the property on which the main structure of the home office or branch is situated only by a street and one or more walkways and alleyways is, for the purpose of this subsection, considered contiguous. The operation of any facility which is not located on the property on which the main structure of the home office or branch is situated or on property contiguous thereto shall not constitute a facility within the meaning of this subsection.

(4) A home office or branch office may be relocated with the prior written approval of the Board. The Board shall consider the criteria set forth in this section for the establishment of a branch office in the determination of approval for the relocation. A nonrefundable filing fee in the amount specified by the Board shall accompany the application to relocate a home office or branch office.

ARTICLE 3.

CONVERSIONS; MERGERS AND CONSOLIDATIONS WITH OTHER ASSOCIATIONS; DISSOLUTION

SECTION 34-28-200. Conversion of state chartered associations into federal associations without change of business form.

(1) At an annual meeting or at any special meeting of the members or stockholders called to consider the action, any state-chartered association may convert itself into a federal savings association, federal savings and loan association, or federal savings bank, hereinafter called "federal association", in accordance with the laws of the United States, as now or hereafter amended, upon a vote of a majority or more of the total number of votes of the members or stockholders eligible to cast votes at the meeting. A copy of the minutes of the proceedings of the meeting of the members or stockholders, verified by the affidavit of the secretary or an assistant secretary, must be filed with the Board within ten days after the date of the meeting. A sworn copy of the proceedings of the meeting, when so filed, is presumptive evidence of the holding and action of the meeting. Within three months after the date of the meeting, the association shall commence that action in the manner prescribed and authorized by the laws of the United States as shall make it a federal association. There must be filed with the Board a copy of the charter issued to the federal association by the Federal Home Loan Bank Board or a certificate showing the organization of the association as a federal association, certified by the secretary or assistant secretary of the Federal Home Loan Bank Board. A similar copy of the charter, or of the certificate, must be filed by the association with the Secretary of State. No failure to file any of these instruments with either the Board or the Secretary of State shall affect the validity of the conversion. Upon the grant to any association of a charter by the Federal Home Loan Bank Board, the association receiving the charter shall cease to be an association incorporated under this chapter and is no longer subject to the supervision and control of the Board. Upon the conversion of any association into a federal association, the corporate existence of the association shall not terminate, but the federal association is considered to be a continuation of the entity of the association so converted, and all property of the converted association, including its right, title, and interest in all and to all property of whatever kind, whether real, personal, or mixed, and things in action, and every right, privilege, interest, and asset of any conceivable value or benefit then existing, pertaining to it, or which would inure to it, shall immediately by operation of law and without any conveyance or transfer and without any further act or deed remain and be vested in and continue to be the property of the federal association into which the state association has converted itself, and the federal association shall have, hold, and enjoy the same in its own right as fully and to the same extent as if the same were possessed, held, and enjoyed by the converting association. The federal association as of the time of the taking effect of the conversion shall continue to have and succeed to all the rights, obligations, and relations of the converting association. All pending actions and other judicial proceedings to which the converting state association is a party are not considered to have abated or to have discontinued by reason of the conversion, but may be prosecuted to final judgment, order, or decree in the same manner as if the conversion into the federal association had not been made, and the federal association resulting from the conversion may continue those actions in its corporate name as a federal association; and any judgment, order, or decree may be rendered for or against it which might have been rendered for or against the converting state association involved in the judicial proceedings.

(2) Any association or corporation which has converted itself into a federal association under the provisions of the laws of the United States and has received a charter from the Federal Home Loan Bank Board is thereafter recognized as a federal association, and its federal charter must be given full recognition by the courts of this State to the same extent as if the conversion had taken place under the provisions of this section; provided, there must have been compliance with the foregoing requirements with respect to the filing with the Board of a copy of the federal charter or a certificate showing the organization of the association as a federal association. All these conversions are hereby ratified and confirmed, and all the obligations of an association which has so converted shall continue as valid and subsisting obligations of the federal association, and the title to all of the property of the association is considered to have continued and vested, as of the date of issuance of the federal charter, in the federal association as fully and completely as if the conversion had taken place pursuant to this section since the effective date of this chapter.

SECTION 34-28-210. Conversion of federal association into state chartered association without change of business form.

Any federal association may apply to the Board for permission to convert itself without any change in business form into an association operated under the provisions of this chapter, in accordance with the following procedures:

(a) The board of directors shall approve a plan of conversion by resolution adopted by a majority vote of all the directors present at the meeting at which the plan is considered. The plan shall include, among other terms:

1. Financial statements of the association as of the last day of the month preceding adoption of the plan;

2. Financial data as may be required by the Board to determine compliance with federal law or regulations regarding insurance, reserve requirements, liquidity, and those other federal regulatory requirements as may exist respecting financial condition; and

3. Other information as the Board may by regulation require.

(b) The plan of conversion must be executed by a majority of the board of directors and submitted to the Board for approval prior to any vote on conversion by the members or stockholders.

(c) The Board may approve or disapprove the plan in its discretion, but it shall not approve the plan unless it finds that the association complies sufficiently with the requirements of this chapter to entitle it to become an association operating under this chapter and the regulations of the Board. The Board may deny any application from any federal association that is subject to any cease and desist order or other supervisory restriction or order imposed by the federal supervisory authority or insurer.

(d) If the Board approves the plan of conversion, the question of the conversion may be submitted to members or stockholders at an annual meeting or at any special meeting of the members or stockholders called to consider the action. Any federal association may then convert itself into an association under this chapter upon a vote of a majority or more of the total number of votes of the members or stockholders of the federal association eligible to be cast at the meeting. Copies of the minutes of the proceedings of the meeting of members or stockholders, verified by the affidavit of the secretary or an assistant secretary, must be filed in the office of the Board and mailed to the Federal Home Loan Bank Board, Washington, D.C., within ten days after the meeting. Verified copies of the proceedings of the meeting when so filed are presumptive evidence of the holding and action of the meeting. At the meeting at which conversion is voted upon, the members or stockholders shall also vote upon the directors who will be the directors of the state-chartered association after conversion takes effect. These directors shall then execute the Articles of Incorporation and two copies of the bylaws. The association shall insert in the Articles of Incorporation the following: "This association is incorporated by conversion from a federal association." All of the directors who are chosen for the association shall sign and acknowledge the Articles of Incorporation as incorporators. The provisions of this chapter shall, so far as applicable, apply to any conversion governed by this section. All the applicable provisions regarding property and other rights contained in Section 34-28-200 shall apply to the conversion of a federal association into an association incorporated under this chapter, so that the state-chartered association is a continuation of the corporate entity of the converting federal association and continues to have all of its property and rights. All rights, powers, and privileges respecting the holding of proxies of a converting association shall continue in full force and effect after the conversion.

(e) The application for conversion of a federal association into an association operating under the provisions of this chapter must be accompanied by a nonrefundable filing fee established by the Board.

SECTION 34-28-220. Conversion of a state or federal mutual association to a state capital stock association.

(1) Any state or federal mutual association may apply to the Board for permission to convert itself into a stock association operated under the provisions of this chapter in accordance with the following procedures and regulations promulgated by the Board:

(a) The Board of Directors shall approve a plan of conversion by resolution adopted by a majority vote of all the directors present at the meeting at which the plan is considered. The plan shall include, among other terms:

1. Financial statements of the association as of the last day of the month preceding adoption of the plan;

2. Financial data as may be required to determine compliance with applicable regulatory requirements respecting financial condition;

3. A provision that each savings account holder of the mutual association will receive a withdrawable account in the stock association equal in amount to and having the same terms as his withdrawable account in the mutual association;

4. A provision for the establishment and maintenance of a liquidation account for the benefit of savings account holders of the mutual association in the event of the liquidation of the association after its conversion which account shall meet all the requirements established by regulation promulgated by the Board;

5. A provision that each member of record will be entitled to receive rights to purchase voting common stock and the terms and conditions of these rights;

6. Pro forma financial statements of the association as a capital stock association, which shall include data required to determine compliance with applicable regulatory requirements respecting financial condition; and

7. Other information as the Board may by regulation require.

(b) The plan of conversion must be executed by a majority of the board of directors and submitted to the Board for approval prior to any vote on conversion by the members.

(c) The Board may approve or disapprove the plan in its discretion, but it shall not approve the plan unless it finds that the association will comply sufficiently with the requirements of this chapter after conversion to entitle it to become an association operating under this chapter and the regulations of the Board. The Board may deny any application from any federal association that is subject to any cease and desist order or other supervisory restriction or order imposed by a federal supervisory authority or insurer.

(d) If the Board approves the plan of conversion, the question of the conversion may be submitted to the members at a meeting of voting members called to consider the action. A vote of a majority or more of the total number of votes eligible to be cast at the meeting, unless federal law permits a lesser percentage of votes for a federal mutual association to convert, in which case that percentage shall control for conversions of both state and federal mutual associations, is required for approval. Notice of the meeting, giving the time, place, and purpose, together with a proxy statement and proxy form meeting the requirements in Section 33-11-140 and any applicable federal regulations approved by the Board covering all matters to be brought before the meeting, must be mailed at least thirty days prior to the Board and to each voting member at his last address as shown on the books of the association.

(e) Copies of the minutes of the meeting of members, verified by the affidavit of the secretary or assistant secretary of the association, must be filed with the Board, and with the Federal Home Loan Bank Board if applicable, within ten days after the meeting. When so filed, the verified copies of the minutes are presumptive evidence of the holding of the meeting and of the action taken.

(f) The directors of the association shall execute and file with the Board proposed Articles of Incorporation as provided for in Section 34-28-130, together with the application for conversion, and a statement showing that requisite capital required in the conversion plan approved by the Board has been paid to the association in cash, that all other conditions imposed by the Board or specified in the plan of conversion have been satisfied, and that a firm commitment for, or evidence of, insurance of deposits and other accounts of a withdrawable type from the Federal Savings and Loan Insurance Corporation has been obtained. The Articles of Incorporation of the converted association shall contain a statement that the association resulted from the conversion of a state or federal mutual association to a capital stock association. Approval by the Board must be affixed to the Articles of Incorporation. The original copy of the Articles of Incorporation must be filed with the Secretary of State and a certified copy of the Articles of Incorporation must be filed with the Board, provided that failure to file a certified copy of the Articles of Incorporation with the Board shall not affect the validity of the conversion. The association shall cease to be a mutual association at the time and on the date specified in the approved Articles of Incorporation or the date the Articles of Incorporation are filed in the office of the Secretary of State, whichever is later.

(2) Upon conversion of a mutual association to a state-chartered stock association, the legal existence of the association shall not terminate, but the capital stock association is a continuation of the entity of the mutual association, and all property of the mutual association, including its right, title, and interests in and to all property of whatever kind, whether real, personal, or mixed, things in action, and every right, privilege, interest, and asset of every conceivable value or benefit then existing or pertaining to it, or which would inure to it, immediately, by act of law and without any conveyance or transfer and without any further act or deed, shall vest and remain in the stock association into which the mutual association has converted itself. The capital stock association shall have, hold, and enjoy the same in its own right as fully and to the same extent as if the same were possessed, held, and enjoyed by the mutual association. The capital stock association, upon the effective date of the conversion, shall continue to have and succeed to all the rights, obligations, and relations of the mutual association. All pending actions and other judicial proceedings to which the mutual association is a party are not abated or discontinued by reason of the conversion but may be prosecuted to final judgment, order, or decree in the same manner as if the conversion had not been made; and the stock association resulting from the conversion may continue the actions in its corporate name as a mutual association. Any judgment, order, or decree may be rendered for or against the stock association which might have been rendered for or against the mutual association involved in the proceedings.

(3) The application for conversion from a state or federal mutual to a state stock association must be accompanied by a nonrefundable filing fee established by the Board.

SECTION 34-28-230. Power to reorganize, merge, or consolidate or sell assets out of the ordinary course of business.

(1) Pursuant to a plan adopted by the board of directors and approved by the Board as equitable and as adequately protecting the interests of the association, its members or stockholders, its deposit account holders, and the public, an association shall, subject to Article 4 of this chapter, have power to reorganize, to merge, or consolidate into another association or company, or to sell all or substantially all of its assets out of the ordinary course of business to another association or company, provided the plan of the reorganization, merger, or consolidation or sale of assets meets the procedural requirements of the South Carolina Business Corporation Act, Chapters 1 to 25 of Title 33, for these transactions.

(2) The Board may provide by regulation for the procedures to be followed by any association submitting a plan of reorganization, merger, or consolidation pursuant to this section.

(3) The Board may not approve any proposed transactions set forth in this section:

(a) Which would result in a monopoly, or which would be in furtherance of any combination or conspiracy to monopolize or to attempt to monopolize the savings and loan business in this State; or

(b) The effect of which in this State may be substantially to lessen competition, or to tend to create a monopoly, or which in any other manner would be in restraint of trade, unless it finds that the anticompetitive effects of the proposed transaction are clearly outweighed in the public interest by the probable effect of the proposed reorganization, merger, or consolidation or sale of assets in meeting the convenience and needs of the primary service area to be served.

(4) Each application for reorganization, merger, consolidation, or sale of assets out of the ordinary course of business must be accompanied by a nonrefundable filing fee as determined by the Board.

(5) In the event of any conflict between this section and Article 4 of this chapter, the provisions of Article 4 shall control.

SECTION 34-28-240. Voluntary supervisory stock conversions.

(1) A voluntary supervisory stock conversion is a conversion involving the sale of a mutual association's newly issued stock to a third party or parties in a transaction in which the association's members have no rights of approval or participation, and no rights to the continuance of any legal or beneficial ownership interest in the converted association pursuant to a conversion plan approved by the Board and a majority of the board of directors of the converting association.

(2) The Board shall have the discretion to approve a voluntary supervisory stock conversion, subject to regulations it may promulgate, when:

(a) It has the power to appoint a receiver for the purpose of liquidation of the converting association pursuant to Section 34-28-730;

(b) Upon liquidation the mutual account holders of the converting association would not realize any equity value;

(c) The converting association is in receivership, or has been authorized to receive assistance under Section 406 of the National Housing Act, l2 U.S.C. Section 1729, or the Board has determined that a severe financial condition exists which threatens the financial condition of the converting association and that approval of the voluntary supervisory conversion is likely to improve the converting association's financial condition; and

(d) The Board finds that following the conversion, the converting association will be a viable entity.

SECTION 34-28-250. Supervisory case; emergency conversion, reorganization and merger.

(1) The Board may determine that an association is a supervisory case if it finds that:

(a) The association is in an impaired condition (Section 34-28-30(10)); or

(b) The association is in imminent danger of being in an impaired condition. Any of these findings by the Board must be based upon reports furnished to it by a savings and loan association examiner or upon other evidence from which it is reasonable to conclude that the association is a supervisory case.

(2) Notwithstanding any other provisions of this chapter, if the Board finds that immediate action is necessary in order to prevent the probable failure of an association which is a supervisory case, the Board shall have the power, with the concurrence of the appropriate federal regulatory agency in the case of any association the deposits of which are insured by the Federal Savings and Loan Insurance Corporation, to issue an emergency order authorizing:

(a) the conversion of the association into a federal association without change of business form;

(b) the reorganization, merger, or consolidation of the association;

(c) the conversion of the association into a capital stock association; or

(d) any state or federal association to acquire the assets of and assume the liabilities of the failing association.

SECTION 34-28-260. Acquisition of majority control over existing stock-owned association.

Subject to the provisions of Article 4 of this chapter:

(1)(a) In any case in which a person or group of persons propose to purchase or acquire voting common stock of any stock-owned association, which purchase or acquisition would cause the person or group of persons to have control of that association, the person or group of persons shall first make application to the Board for a certificate of approval of the purchase or acquisition.

(b) An application for control must be in that form and contain that information as the Board may by regulation require.

(c) The application for control must be accompanied by a nonrefundable filing fee as determined by the Board.

(2) The Board shall issue a certificate of approval only after it has made an investigation and determined that:

(a) The proposed new owner or owners of voting common stock are qualified by character, experience, and financial responsibility to control the association in a legal and proper manner.

(b) The interests of the public generally will not be jeopardized by the proposed purchase or acquisition of voting common stock.

(c) If the Board does not disapprove a proposed change of control application within sixty days of the time it is filed with the Board, the proposed transaction is considered approved and may take place, provided that all other required regulatory approvals have been obtained, that the transaction is consummated within one year of the time the application is filed, and that there is no material change in the terms and conditions of the transaction disclosed in the application prior to the consummation. The sixty-day period specified in the preceding sentence may be extended by the Board for up to thirty days for any reasons if written notice of the extension is given to the applicant prior to the expiration of the sixty-day period.

(d) The applicant is entitled to notice and a hearing contesting the denial by the Board of any change of control application filed pursuant to this section.

(3) This section shall not apply to the acquisition of:

(a) Directors' voting proxies acquired in the normal course of business as a result of proxy solicitation in conjunction with a stockholders' meeting;

(b) Stock in a fiduciary capacity unless the acquiring person has sole discretionary authority to exercise voting rights;

(c) Stock acquired in securing or collecting a debt contracted in good faith until two years after the date of acquisition; or

(d) Stock acquired by an underwriter in good faith and without any intent to evade the purpose of this section if the shares are held only for a reasonable period of time as will permit the sale.

SECTION 34-28-270. Dissolution.

(1) Any association may, at any special meeting of the members or stockholders called to consider the action, terminate its existence in accordance with the provisions of this section upon a vote of more than a majority of the total number of votes of members or shareholders eligible to be cast at the meeting.

(2) Upon the vote, three copies of a statement of interest to dissolve, which shall state the vote cast in favor of dissolution, must be filed with the Board, which shall examine the association, and, if it finds that the association is not in an impaired condition, it shall so note, together with its approval of the dissolution, upon all the copies of the certificate of dissolution. The Board shall place a copy in its permanent files, file a copy with the Secretary of State, and return the remaining copy to the parties who filed it.

(3) Upon this approval, the association is dissolved and shall cease to carry on business but nevertheless shall continue as a corporate entity for the sole purpose of paying, satisfying, and discharging existing liabilities and obligations, collecting and distributing assets, and doing all other acts required to adjust, wind up, and dissolve its business and affairs.

(4) The board of directors in office at the time of the vote of dissolution shall act as trustees for the liquidation. The board of directors shall proceed as quickly as may be practicable to wind up the affairs of the association and, to the extent necessary or expedient to that end, shall exercise all the powers of the dissolved association and, without prejudice to the general nature of this authority, may fill vacancies, elect officers, carry out contracts, make new contracts, borrow money, mortgage or pledge property, sell its assets at public or private sale, compromise claims in favor of or against the association, apply assets to the discharge of liabilities, distribute assets either in cash or in kind among savings account members of a mutual association or stockholders of a capital stock association according to their respective prorata interests after paying or adequately providing for the payment of other liabilities, and perform all acts necessary or expedient to the winding up of the association. All deeds or other instruments must be in the name of the association and executed by the president or a vice president and the secretary or an assistant secretary. The board of directors shall also have power to exchange or otherwise dispose of or put in trust all, substantially all, or any part of the assets, upon those terms and conditions and for that consideration as the board of directors may consider reasonable or expedient, and may distribute the consideration or the proceeds, trust receipts, or certificates of beneficial interest among the savings account members of a mutual association or stockholders of a stock association in proportion to their prorata interests. In the absence of fraud, any determination of value made by the board of directors for any of these purposes is conclusive.

(5) The association, during the liquidation of the as


State Codes and Statutes

State Codes and Statutes

Statutes > South-carolina > Title-34 > Chapter-28

Title 34 - Banking, Financial Institutions and Money

CHAPTER 28.

SAVINGS ASSOCIATIONS

ARTICLE 1.

GENERAL PROVISIONS

SECTION 34-28-10. Short title of Articles 1 through 10.

Articles 1 through 10 of this chapter are known and may be cited as the "South Carolina Savings Association Act". Wherever "this Act" appears in this chapter, unless the context clearly indicates otherwise, it means Articles 1 through 10 of Chapter 28 of Title 34.

SECTION 34-28-20. Application of the South Carolina Business Corporation Act.

When not in direct conflict with or superseded by specific provisions of this chapter, the provisions of the South Carolina Business Corporation Act, Chapters 1 to 25 of Title 33, apply to any association organized or operated under this chapter.

SECTION 34-28-30. Definitions.

As used in this act, unless the context otherwise requires:

(1) "Assets" means, at any particular time, those properties and rights which are properly entered in the accounts and balance sheets of an association and any of its subsidiaries (to the extent of the association's interest therein) in terms of a monetary value.

(2) "Association" means a mutual or stock-owned savings association, savings and loan association, building and loan association, or savings bank that is subject to the provisions of this chapter.

(3) "Board" means the State Board of Financial Institutions.

(4) "Capital stock" means the aggregate of shares of nonwithdrawable capital represented by stock certificates.

(5) "Company" means any corporation (domestic or foreign), partnership, trust, association, joint venture, syndicate, or any other type of business organization.

(6) "Control" of a company means directly or indirectly acting alone or in concert with one or more other persons or through one or more subsidiaries or through proxies, for the following: (i) ownership of or voting control of more than twenty-five percent of the voting shares or rights of the company; (ii) the right to control in any manner the election or appointment of a majority of the directors or trustees of the company; or (iii) a general partner in or contributor of more than twenty-five percent of the capital of the company.

(7) "Dwelling unit" means a single, unified combination of rooms which is designed for residential use by one family in a multiple dwelling unit structure and which is not "home property".

(8) "Earnings" means that part of the sources available for payment of earnings of a mutual association which is declared payable on savings accounts by the Board of Directors and is the cost of savings money to the association. Earnings also may be referred to as "interest".

(9) "Home property" means real estate on which there is located, or will be located pursuant to a real estate loan, either a structure designed for residential use by one family, or a single condominium unit or cooperative including common elements pertinent thereto, designed for residential use by one family in a multiple-dwelling unit structure or complex and includes fixtures and home furnishings and equipment.

(10) "Impaired condition" means a condition in which the assets of an association as recorded on the books of the association (book value) are less than the aggregate amount of liabilities of the association to its creditors, including the holders of its savings and other deposit accounts or in which an association is unable to meet current obligations as they mature, even though assets may exceed liabilities.

(11) "Improved real estate" means real estate on which there is a structure or an enclosure or which is cultivated, reclaimed, used for the purpose of agriculture in any form, prepared as building lots or sites, or otherwise occupied, made better, more useful, or of greater value by care.

(12) "Insured association" means an association the deposit accounts of which are insured wholly or in part by the Federal Savings and Loan Insurance Corporation or any successor or assignee federal agency established for the purpose of insuring savings and other deposit accounts in associations.

(13) "Liquid assets" means:

(a) Cash on hand;

(b) Cash on deposit in federal home loan banks, federal reserve banks, state banks performing similar reserve functions, or financial depository institutions, which is withdrawable upon not more than thirty days' notice and which is not pledged as security for indebtedness, except that any deposits in a financial depository institution under the control or in the possession of any supervisory authority are not considered as liquid assets;

(c) Obligations of, or obligations which are fully guaranteed as to principal and interest by, the United States or this State; and

(d) Such other assets as may be approved by the Board which are accepted as liquid assets for insured associations by the appropriate federal regulatory agency.

(14) "Member" means a person holding a deposit account in a mutual association, or borrowing from or assuming or obligated upon a loan or interest therein held by a mutual association, or purchasing property securing a loan or interest therein held by a mutual association. A joint and survivorship relationship, whether of depositors or borrowers, constitutes a single membership. A stock association has no members.

(15) "Net income" means the gross revenue of a mutual association for an accounting period less the sum of all expenses paid or incurred, taxes, and losses sustained as have not been charged to reserves pursuant to the provisions of this chapter.

(16) "Officer" means the president, any vice-president (but not an assistant vice-president, second vice-president, or other vice-president having authority similar to an assistant or second vice-president), the secretary, the treasurer, the comptroller, and any other person performing similar functions with respect to any association. "Officer" also includes the chairman of the board of directors of an association if the chairman is authorized by the charter or bylaws of the organization to participate in its operating management or if the chairman in fact participates in this management.

(17) "Person" means an individual, a fiduciary, or a company.

(18) "Primarily residential property" means real estate on which there is located, or will be located pursuant to a real estate loan, any of the following:

(a) structure or structures designed or used primarily for residential rather than nonresidential purposes and consisting of more than one dwelling unit;

(b) structure or structures designed or used primarily for residential rather than nonresidential purposes for students, residents, and persons under care, or primarily for employees, or members of the staff of an educational, health, or welfare institution or facility;

(c) structure or structures which are used in part for residential purposes for not more than one family and in part for business purposes, provided that the residential use of the structure or structures must be substantial and permanent, not merely transitory.

(19) "Primary service area" means a reasonable geographical area from which a proposed or existing association or branch thereof expects to draw approximately seventy-five percent of its deposits.

(20) "Real estate loan" means any loan or other obligation:

(1) secured by property that is real property pursuant to the law of the state where the property is located;

(2) where the security interest of the holder of the loan or obligation may be enforced as a real estate mortgage or its equivalent pursuant to the law of the state where the property is located;

(3) where the security property is capable of separate appraisal;

(4) where the lender relies substantially upon the real estate as the primary security for the loan;

(5) where, with regard to a security property that is a leasehold or other interest for a period of years, the term of the interest extends, or is subject to extension or renewal at the option of the holder of the loan or other obligation, for a term of at least the maturity of the loan.

(21) "Remote service unit" means an information processing device, including associated equipment, structures, and systems by which information relating to financial services rendered to the public is stored and transmitted, instantaneously or otherwise, to an association or other financial institution having its home or approved branch office in this State. The term includes without limitation, point-of-sale terminals, merchant-operated terminals, cash dispensing machines, and automated teller machines. A remote service unit is not a branch of an association and is not subject to any of the provisions of this title applicable to branch offices.

(22) "Savings account" means that part of the savings liability of the association which is credited to the account of the holder. A savings account also may be referred to as and includes a "savings deposit".

(23) "Savings liability" means the aggregate amount of savings accounts of depositors, including earnings credited to these accounts, less redemptions and withdrawals.

(24) "Service corporation" means an organization which is empowered to engage in any activity permitted by this chapter, and which is controlled by one or more associations. It includes any subsidiary of a service corporation.

(25) "Sources available for payment of earnings" means net income of a mutual association for an accounting period less amounts transferred to reserves as provided in or permitted by this chapter, plus any balance of undivided profits from preceding accounting periods.

(26) "Stockholder" means the holder of one or more shares of any class of capital stock of a capital stock association organized or operating pursuant to the provisions of this chapter.

(27) "Subsidiary" means any company which is controlled directly or indirectly by another company.

(28) "Surplus" means the aggregate amount of the undistributed net income of a mutual association held as undivided profits or unallocated reserves for general corporate purposes.

(29) "Withdrawal value" means the amount credited to a savings account, less lawful deductions therefrom, as shown by the records of an association.

ARTICLE 2.

HOME INCORPORATION BRANCH OFFICES AND FACILITIES

SECTION 34-28-100. Application for authority to incorporate; action by Board on application.

(1) When authorized by the Board as provided in this article, an association may be formed under the laws of this State for the purpose of conducting a general savings and loan business and having all the powers and purposes authorized by this chapter and otherwise by Title 34.

(2) A written application for authority to organize an association as provided in subsection (1) must be filed with the Board and include:

(a) the proposed corporate name and evidence that the proposed name has been reserved with the Secretary of State; however, evidence that an association has reserved a corporate name with the Secretary of State does not preclude the Board from disapproving the name on the grounds of potential confusion with the name of an existing financial institution;

(b) detailed financial and biographical information as the Board may require for each proposed director, chief executive officer, and managing officer;

(c) the total amount of the savings account capital or capital stock proposed to be issued, the amount subscribed by each incorporator, and the method to be used to raise any remaining capital required before the proposed association will be authorized to begin business;

(d) the name and address of the proposed managing officer and chief executive officer, if known;

(e) the community and the street and number, if available, where the proposed association is to be located; and

(f) additional information as the Board may reasonably require. The application for authority to organize must be filed with the Board in triplicate and must be accompanied by a nonrefundable filing fee established by the Board.

(3)(a) Upon the filing of an application, the Board shall make an investigation of:

1. the character, reputation, financial standing, experience, and business qualifications of the proposed officers and directors;

2. the character, reputation, financial standing, and motives of the incorporator or incorporators in organizing the proposed association;

3. the public need for an association or additional association, as the case may be, in the primary service area where the proposed association is to be located, giving particular consideration to the ability of the primary service area to support both the proposed and all other existing associations in the community in the conduct of profitable operations and to the benefits of competition to the public.

(b) Any applicant who files an application which requires an investigation to be conducted outside the State shall reimburse the Board for all costs incurred in the normal course of investigation, which reimbursement must be in addition to the filing fee authorized in this section.

(4) The Board shall approve the application unless it finds that one or more of the conditions in (a) through (f) exist:

(a) Public convenience and advantage will not be promoted by the establishment of the proposed association. In determining whether an applicant meets this requirement, the Board shall consider all materially relevant factors, including:

1. the location and services proposed to be offered by the applicant and currently offered by existing associations in the primary service area to be served by the applicant; and

2. the primary service area's general economic and demographic characteristics.

(b) Local conditions do not indicate reasonable promise of the successful operation of the proposed association and of those associations already established in the primary service area community. In determining whether an applicant meets this requirement, the Board shall consider all materially relevant factors, including:

1. Current economic conditions and the growth potential of the primary service area in which the proposed association intends to locate; and

2. The growth rate, size, financial strength, and operating characteristics of other associations in the primary service area of the proposed association.

(c) The proposed officers and directors do not have sufficient experience, ability, standing, and responsibility to indicate reasonable promise of the successful operation of the association.

(d) The applicant's proposed capital structure is inadequate. In no event may the minimum capital required be less than three million dollars or that larger amount as may be specified in a regulation issued by the Board.

(e) The name of the proposed association does not comply with Section 34-28-110.

(f) No provision has been made for suitable quarters at the location specified in the application.

(5) The order approving an application may impose reasonable conditions which must be met before a certificate of authorization to transact business will be issued, which conditions may include employment of suitable personnel, alterations to the proposed capital structure, the obtaining of suitable quarters at the location proposed, or those other matters as the Board may deem necessary. If the Board approves the application for authority to organize, the applicant shall file its articles of incorporation with the Secretary of State and apply for a commitment for appropriate insurance of accounts. Upon approval by the Board of the application for authority to organize, the Board shall forward a copy of its final order to the Federal Savings and Loan Insurance Corporation. The corporate existence of an association begins on the date that the approved articles of incorporation are filed with the Secretary of State, unless otherwise provided in the articles of incorporation, but the association shall not commence business before it is in possession of a certificate of authorization to transact business as provided in Section 34-28-150. Prior to that time, an association may perform only those acts as are necessary to perfect its organization, raise capital, obtain and equip a place of business, and otherwise prepare for a general savings association business.

SECTION 34-28-110. Name of an association.

(1) The name of every association shall include either the words "building and loan association", "savings and loan association", or "savings bank". These words must be preceded by an appropriate descriptive word or words approved by the Board. An ordinal number may not be used as a single descriptive word in the association's name immediately preceding the words "savings association", "savings and loan association", or "savings bank" unless the words are followed by the words "of __________," the blank being filled by the name of the community, town, city, county, or state in which the association has its home office. The use of the words "National", "United States", "insured", or "guaranteed", separately or in any combination thereof with other words or syllables, is prohibited as part of the corporate name of an association. No certificate of incorporation of a proposed association having the same name as a corporation authorized to do business under the laws of this State or a name so nearly resembling it as to be likely to deceive or cause confusion in the mind of the public with any other financial depository institution in this State may be approved by the Board, except for an association formed by the reincorporation, reorganization, conversion, or consolidation of the other financial depository institution with the proposed association or upon the sale of all or substantially all the property and franchise of the other financial institution to the proposed association. Nothing herein may be construed to require or cause any association doing business to change its name from the way it exists on April 1, 1985. In addition to meeting the requirements of this subsection, the name of a stock-owned association must also comply with Section 34-28-130(1)(a).

(2) No person, unless he or it is lawfully authorized to do business in this State under the provisions of this chapter and actually is engaged in carrying on a savings association business, shall do business under any name or title which contains the terms "savings association", "savings and loan association", "savings bank", "building and loan association", "building association", or any combination employing either or both of the words "building" or "loan" with one or more of the words "saving" or "savings", or words of similar import, with one or more of the words "association", "institution", "society", "company", "fund", or "corporation", or words of similar import, or use any name or sign or circulate or use any letterhead, billhead, circular, or paper whatever, or advertise or represent in any manner which indicates or reasonably implies that his business is the character or kind of business carried on or transacted by an association or which is likely to lead any person to believe that his business is that of an association; however, the words "saving", "savings", "company", or "corporation", or the plural of any thereof, may be used by, and in the corporate or other name or title of, any company which is or becomes a savings and loan holding company pursuant to the provisions of this chapter or regulations of the Federal Home Loan Bank Board. Upon application by the Board or any association, a court of competent jurisdiction may issue an injunction to restrain any person from violating or continuing to violate any of the foregoing provisions of this subsection. Any person who violates any provision of this subsection is guilty of a misdemeanor and upon conviction must be punished by a fine of not more than five thousand dollars, and each day of violation shall constitute a separate offense. The prohibitions of this subsection shall not apply to any corporation or association formed for the purpose of promoting the interests of associations, their officers, or other representatives.

SECTION 34-28-120. Capital stock of state stock associations; power and limitations on sale and issuance of stock; characteristics of capital stock; loans secured by capital stock prohibited; restrictions on ownership of stock.

(1) A stock owned association may issue the shares of stock authorized by its articles of incorporation and none other. Capital stock shall have the par value stated in the articles of incorporation and, with the prior approval of the Board, may consist of common stock and preferred stock which may be divided into classes and classes may be divided into series. Each kind, class, and series may have those distinguishing characteristics, including designations, preferences, or restrictions as regards dividends, redemption, voting powers, or restrictions or qualifications of voting powers, as are imposed in the articles of incorporation. The provisions of the articles of incorporation shall control in any case in which any vote or consent of stockholders is now or hereafter required by statute unless the statute shall expressly provide to the contrary.

(2) The consideration for the issuance of shares must be paid in full before their issuance and must not be less than the par value. The consideration for the shares must be paid in cash. Upon payment, the shares are considered to be fully paid and nonassessable.

(3) The total of the par values of all outstanding shares of common and preferred capital stock is the permanent capital of the association and any amount received as consideration for outstanding shares in excess of the par values must be credited to capital surplus. No association shall reduce its permanent capital or distribute any of its capital surplus to shareholders without first obtaining the consent of the Board. Except in supervisory cases, this consent must be withheld if the reduction will cause the permanent capital to be less than the minimum required by the Board at the time of the distribution to capitalize a new stock association.

(4) Unless otherwise provided by the articles of incorporation, no shareholder in a state stock association shall have the preemptive right to acquire unissued shares, or securities convertible or carrying a right to subscribe to or acquire shares, of the association. In the case of any capital stock association in existence prior to the effective date of this chapter, stockholders of this association shall continue to have the preemptive rights in this association which they had immediately prior to this date, unless and until the articles of incorporation are amended to alter or terminate stockholders' preemptive rights.

(5) An association shall not make a loan secured by the pledge of its capital stock.

(6) No subscriber to the stock of a proposed stock-owned association shall own or control as principal more than ten percent of any class of voting shares of the association without prior approval of the Board. No mutual association shall own or control as principal, directly or indirectly, any stock of any association, bank, bank holding company, as defined in 12 U.S.C. Section 1841(a)(1) as amended, or savings and loan holding company, as defined in the Federal Savings and Loan Holding Company Act, 12 U.S.C. Section 1730a(a)(1) (D) as amended, or any other depository financial institution. No association, bank, bank holding company, savings and loan holding company, or other depository financial institution shall own or control as principal, directly or indirectly, ten percent or more of any class of the outstanding voting shares of any stock-owned association without prior approval of the Board, and no stock-owned association shall own or control as principal, directly or indirectly, ten percent or more of any class of the outstanding voting shares of any association, bank, bank holding company, savings and loan holding company, or other depository institution without prior approval of the Board; provided, that no stock-owned association or holding company owning any of the stock of the association, which desires to own stock in any bank doing business in this State or any bank holding company owning any of the stock of the bank, shall own as principal more stock in that bank or bank holding company than that bank or bank holding company is permitted to own in a stock-owned association or holding company owning any of the stock of the association. The prohibitions of this section do not apply to a savings and loan holding company's owning all of the outstanding stock of a stock-owned association. Any stock of a stock-owned association which is used as loan collateral and which is acquired by a financial institution by loan default or is acquired as a result of a bankruptcy does not constitute a violation of this restriction if the acquiring institution divests itself of this stock within five years of acquisition or that longer period as may be approved by the Board. The restriction in Section 34-28-540(3) against an association's owning five percent or more of any class of voting stock in any corporation, other than a service corporation or a subsidiary in which it owns all of the voting shares, is not applicable to the stock ownership permitted by this subsection.

SECTION 34-28-130. Articles of incorporation content; approval by Board; amendment.

(1) The Articles of Incorporation of an association shall contain:

(a) The name of the proposed association, which shall comply with Section 34-28-110, and in the case of a stock-owned association must contain the word "corporation", "incorporated", "limited", or "company" or an abbreviation thereof sufficient to distinguish a stock-owned association from a mutual association;

(b) The address of the principal office of the association in South Carolina, including the county and municipality where it is located, together with a registered agent for receiving service of process and the address of the agent if it differs from that of the principal office of the association;

(c) The period of duration of the corporation which is deemed perpetual unless otherwise stated;

(d) The general nature of the business to be transacted or a statement that the association may engage in any activity or business permitted to associations under this chapter and other provisions of Title 34. This statement shall authorize all those activities and business by the association;

(e) With respect to a stock-owned association, the amount of capital stock authorized, showing the maximum number of shares of par value common stock and of preferred stock, and of every kind, class, or series of each, together with the distinguishing characteristics and the par value of all shares;

(f) The amount of capital with which the association will begin business;

(g) The number of directors, which may not be fewer than five, and the names and street addresses of the members of the first board of directors who, unless otherwise provided by the Articles of Incorporation, the bylaws, or this chapter, shall hold office for the term set forth in Section 34-28-420(4) or until their successors are elected or appointed and have qualified;

(h) The names, and addresses of all the incorporators, not less than ten in number;

(i) Any other provisions authorized or permitted to be in the Articles of Incorporation of a corporation by Chapters 1 to 25 of Title 33 which the incorporators elect to include therein.

(2) The Articles of Incorporation must be in writing, signed by all the incorporators, and submitted to the Board for its approval. Upon approval, the Board shall place the following legend upon the Articles of Incorporation "Approved by the Board of Financial Institutions this ___ day of ___, ___ (herein the name and signature of the Chairman of the Board)". Thereafter, the Articles of Incorporation must be filed with the Secretary of State.

(3) An association shall not amend its Articles of Incorporation without the prior written approval of the Board.

SECTION 34-28-140. Bylaws.

Unless the Articles of Incorporation provide otherwise, the Board of Directors of an association shall have authority to adopt or amend bylaws that do not conflict with bylaws that may have been adopted by the members or stockholders. The bylaws are for the government of the association, subordinate only to the Articles of Incorporation and the laws of the United States and of this State. A current copy of the bylaws must be filed with the Board.

SECTION 34-28-150. Opening for business.

(1) An association shall open and conduct a general savings and loan business no later than twelve months after the commencement of its corporate existence (Section 34-28-100(5)). The Board may extend the opening date for an additional period on its own motion or at the request of the association, for good cause shown.

(2) At the time as subscriptions for stock in a proposed stock association have been fully paid (and in the case of a mutual association, at the time as the capital required by the Board has been paid in cash to the association in the form of pledged savings accounts meeting the standards specified by regulation issued by the Board), but no later than thirty days prior to intended opening date, the association shall file with the Board a statement containing the name and address of each subscriber and the amount of capital subscribed by each and, showing that the entire capital required by the Board has been unconditionally and fully paid in lawful money and that the funds or assets representing the required capital are held by the association, that a commitment for the insurance of all deposit accounts has been obtained from the Federal Savings and Loan Insurance Corporation or any successor or assignee federal agency established for the purpose of insuring savings and other deposit accounts in associations and that all other conditions imposed by the Board pursuant to Section 34-28-100(5) have been satisfied.

(3) If the Board finds that the association has in good faith complied with all the requirements of law, and that the association's deposit accounts are properly insured, it shall promptly issue, in duplicate, under its official seal, a certificate of authorization to transact a general savings and loan business.

(4) Upon opening for business, an association shall have power to engage in a general savings and loan business and to exercise, subject to law and the regulations of the Board, all those incidental powers as may reasonably promote its general savings and loan business.

SECTION 34-28-160. Home, corporate and branch offices; facilities.

(1) Each office must be operated from the home or corporate office. All branch offices are subject to direction from the home or corporate office. The home office of an association must be the principal office specified in the Articles of Incorporation. Nothing in this chapter may be construed to prohibit any association from establishing a corporate office or offices upon prior written notification to the Board. A corporate office must be primarily established for the purpose of managing the administrative functions of the association and any service corporations and shall not accept deposits or issue payment for withdrawals of certificates or accounts. A corporate office may be established in connection with a branch office in which case an application pursuant to subsection (2) must be submitted.

(2)(a) A "branch office" is a legally established place of business of an association, other than the home or a corporate office or a remote service unit (Section 34-28-30), where deposits may be accepted.

(b) No association shall establish or maintain a branch office without the prior written approval of the Board. Each application for approval of the establishment and maintenance of a branch office must be in that form as the Board may prescribe and shall state:

1. The proposed location;

2. The functions to be performed;

3. The estimated volume of business;

4. The estimated annual expense;

5. The mode of payment; and

6. Other information as the Board may require.

(c) Upon receipt by the Board of an application, it shall consider the following criteria:

1. The sufficiency of the association's capital to support the association's deposit base and the additional fixed assets proposed for the branch and its operations, without undue exposure to its depositors, members, or stockholders;

2. The sufficiency of revenue prospects to support the anticipated expenses of the branch without jeopardizing the financial position of the association;

3. The sufficiency and quality of management of the association;

4. Whether the name of the proposed branch reasonably identifies the branch and is not likely to unduly confuse the public;

5. The substantial compliance by the association with all state law and federal law affecting its operations.

(d) The Board shall approve the application unless it finds that one or more of the conditions specified in 1 through 5 exist:

1. Public convenience and advantage will not be promoted by the establishment of the proposed branch. In determining whether an applicant meets the requirements of this paragraph, the Board shall consider all materially relevant factors, including:

a. The location and services proposed to be offered by the applicant and currently offered by existing associations in the primary service area to be served by the applicant;

b. The primary service area's general economic and demographic characteristics.

2. Local conditions do not indicate reasonable promise of the successful operation of the proposed branch and of those associations already established in the primary service area in determining whether an applicant meets the requirements of this paragraph, the Board shall consider all materially relevant factors, including:

a. Current economic conditions and the growth potential of the community in which the proposed applicant intends to locate the proposed branch;

b. The growth rate, size, financial strength, and operating characteristics of associations in the primary service area of the proposed branch.

3. The officers and directors of the applicant do not have sufficient experience, ability, standing, and responsibility to indicate reasonable promise of the successful operation of the branch;

4. The name of the proposed branch does not comply with Section 34-28-110.

5. Provision has not been made for suitable quarters at the location specified in the application.

(e) When the Board has approved a branch application, it shall promptly issue a certificate authorizing the operation of the branch and specifying the date on which it may be opened and the place where it will be located.

(f) A nonrefundable filing fee established by the Board shall accompany each application for a branch.

(3) With prior written notification to the Board, and in order to relieve some of the burdens on the public caused by congestion of public streets, roadways, and parking facilities, promote safety of pedestrians on public ways, or otherwise serve the needs or convenience of the public, an association may operate facilities providing services to customers. It is not necessary that any facility be a part of, or physically connected to, the main structure of the home office or branch if the facility is located on the property on which the main structure of the home office or branch is situated or on property contiguous thereto. Property which is separated from the property on which the main structure of the home office or branch is situated only by a street and one or more walkways and alleyways is, for the purpose of this subsection, considered contiguous. The operation of any facility which is not located on the property on which the main structure of the home office or branch is situated or on property contiguous thereto shall not constitute a facility within the meaning of this subsection.

(4) A home office or branch office may be relocated with the prior written approval of the Board. The Board shall consider the criteria set forth in this section for the establishment of a branch office in the determination of approval for the relocation. A nonrefundable filing fee in the amount specified by the Board shall accompany the application to relocate a home office or branch office.

ARTICLE 3.

CONVERSIONS; MERGERS AND CONSOLIDATIONS WITH OTHER ASSOCIATIONS; DISSOLUTION

SECTION 34-28-200. Conversion of state chartered associations into federal associations without change of business form.

(1) At an annual meeting or at any special meeting of the members or stockholders called to consider the action, any state-chartered association may convert itself into a federal savings association, federal savings and loan association, or federal savings bank, hereinafter called "federal association", in accordance with the laws of the United States, as now or hereafter amended, upon a vote of a majority or more of the total number of votes of the members or stockholders eligible to cast votes at the meeting. A copy of the minutes of the proceedings of the meeting of the members or stockholders, verified by the affidavit of the secretary or an assistant secretary, must be filed with the Board within ten days after the date of the meeting. A sworn copy of the proceedings of the meeting, when so filed, is presumptive evidence of the holding and action of the meeting. Within three months after the date of the meeting, the association shall commence that action in the manner prescribed and authorized by the laws of the United States as shall make it a federal association. There must be filed with the Board a copy of the charter issued to the federal association by the Federal Home Loan Bank Board or a certificate showing the organization of the association as a federal association, certified by the secretary or assistant secretary of the Federal Home Loan Bank Board. A similar copy of the charter, or of the certificate, must be filed by the association with the Secretary of State. No failure to file any of these instruments with either the Board or the Secretary of State shall affect the validity of the conversion. Upon the grant to any association of a charter by the Federal Home Loan Bank Board, the association receiving the charter shall cease to be an association incorporated under this chapter and is no longer subject to the supervision and control of the Board. Upon the conversion of any association into a federal association, the corporate existence of the association shall not terminate, but the federal association is considered to be a continuation of the entity of the association so converted, and all property of the converted association, including its right, title, and interest in all and to all property of whatever kind, whether real, personal, or mixed, and things in action, and every right, privilege, interest, and asset of any conceivable value or benefit then existing, pertaining to it, or which would inure to it, shall immediately by operation of law and without any conveyance or transfer and without any further act or deed remain and be vested in and continue to be the property of the federal association into which the state association has converted itself, and the federal association shall have, hold, and enjoy the same in its own right as fully and to the same extent as if the same were possessed, held, and enjoyed by the converting association. The federal association as of the time of the taking effect of the conversion shall continue to have and succeed to all the rights, obligations, and relations of the converting association. All pending actions and other judicial proceedings to which the converting state association is a party are not considered to have abated or to have discontinued by reason of the conversion, but may be prosecuted to final judgment, order, or decree in the same manner as if the conversion into the federal association had not been made, and the federal association resulting from the conversion may continue those actions in its corporate name as a federal association; and any judgment, order, or decree may be rendered for or against it which might have been rendered for or against the converting state association involved in the judicial proceedings.

(2) Any association or corporation which has converted itself into a federal association under the provisions of the laws of the United States and has received a charter from the Federal Home Loan Bank Board is thereafter recognized as a federal association, and its federal charter must be given full recognition by the courts of this State to the same extent as if the conversion had taken place under the provisions of this section; provided, there must have been compliance with the foregoing requirements with respect to the filing with the Board of a copy of the federal charter or a certificate showing the organization of the association as a federal association. All these conversions are hereby ratified and confirmed, and all the obligations of an association which has so converted shall continue as valid and subsisting obligations of the federal association, and the title to all of the property of the association is considered to have continued and vested, as of the date of issuance of the federal charter, in the federal association as fully and completely as if the conversion had taken place pursuant to this section since the effective date of this chapter.

SECTION 34-28-210. Conversion of federal association into state chartered association without change of business form.

Any federal association may apply to the Board for permission to convert itself without any change in business form into an association operated under the provisions of this chapter, in accordance with the following procedures:

(a) The board of directors shall approve a plan of conversion by resolution adopted by a majority vote of all the directors present at the meeting at which the plan is considered. The plan shall include, among other terms:

1. Financial statements of the association as of the last day of the month preceding adoption of the plan;

2. Financial data as may be required by the Board to determine compliance with federal law or regulations regarding insurance, reserve requirements, liquidity, and those other federal regulatory requirements as may exist respecting financial condition; and

3. Other information as the Board may by regulation require.

(b) The plan of conversion must be executed by a majority of the board of directors and submitted to the Board for approval prior to any vote on conversion by the members or stockholders.

(c) The Board may approve or disapprove the plan in its discretion, but it shall not approve the plan unless it finds that the association complies sufficiently with the requirements of this chapter to entitle it to become an association operating under this chapter and the regulations of the Board. The Board may deny any application from any federal association that is subject to any cease and desist order or other supervisory restriction or order imposed by the federal supervisory authority or insurer.

(d) If the Board approves the plan of conversion, the question of the conversion may be submitted to members or stockholders at an annual meeting or at any special meeting of the members or stockholders called to consider the action. Any federal association may then convert itself into an association under this chapter upon a vote of a majority or more of the total number of votes of the members or stockholders of the federal association eligible to be cast at the meeting. Copies of the minutes of the proceedings of the meeting of members or stockholders, verified by the affidavit of the secretary or an assistant secretary, must be filed in the office of the Board and mailed to the Federal Home Loan Bank Board, Washington, D.C., within ten days after the meeting. Verified copies of the proceedings of the meeting when so filed are presumptive evidence of the holding and action of the meeting. At the meeting at which conversion is voted upon, the members or stockholders shall also vote upon the directors who will be the directors of the state-chartered association after conversion takes effect. These directors shall then execute the Articles of Incorporation and two copies of the bylaws. The association shall insert in the Articles of Incorporation the following: "This association is incorporated by conversion from a federal association." All of the directors who are chosen for the association shall sign and acknowledge the Articles of Incorporation as incorporators. The provisions of this chapter shall, so far as applicable, apply to any conversion governed by this section. All the applicable provisions regarding property and other rights contained in Section 34-28-200 shall apply to the conversion of a federal association into an association incorporated under this chapter, so that the state-chartered association is a continuation of the corporate entity of the converting federal association and continues to have all of its property and rights. All rights, powers, and privileges respecting the holding of proxies of a converting association shall continue in full force and effect after the conversion.

(e) The application for conversion of a federal association into an association operating under the provisions of this chapter must be accompanied by a nonrefundable filing fee established by the Board.

SECTION 34-28-220. Conversion of a state or federal mutual association to a state capital stock association.

(1) Any state or federal mutual association may apply to the Board for permission to convert itself into a stock association operated under the provisions of this chapter in accordance with the following procedures and regulations promulgated by the Board:

(a) The Board of Directors shall approve a plan of conversion by resolution adopted by a majority vote of all the directors present at the meeting at which the plan is considered. The plan shall include, among other terms:

1. Financial statements of the association as of the last day of the month preceding adoption of the plan;

2. Financial data as may be required to determine compliance with applicable regulatory requirements respecting financial condition;

3. A provision that each savings account holder of the mutual association will receive a withdrawable account in the stock association equal in amount to and having the same terms as his withdrawable account in the mutual association;

4. A provision for the establishment and maintenance of a liquidation account for the benefit of savings account holders of the mutual association in the event of the liquidation of the association after its conversion which account shall meet all the requirements established by regulation promulgated by the Board;

5. A provision that each member of record will be entitled to receive rights to purchase voting common stock and the terms and conditions of these rights;

6. Pro forma financial statements of the association as a capital stock association, which shall include data required to determine compliance with applicable regulatory requirements respecting financial condition; and

7. Other information as the Board may by regulation require.

(b) The plan of conversion must be executed by a majority of the board of directors and submitted to the Board for approval prior to any vote on conversion by the members.

(c) The Board may approve or disapprove the plan in its discretion, but it shall not approve the plan unless it finds that the association will comply sufficiently with the requirements of this chapter after conversion to entitle it to become an association operating under this chapter and the regulations of the Board. The Board may deny any application from any federal association that is subject to any cease and desist order or other supervisory restriction or order imposed by a federal supervisory authority or insurer.

(d) If the Board approves the plan of conversion, the question of the conversion may be submitted to the members at a meeting of voting members called to consider the action. A vote of a majority or more of the total number of votes eligible to be cast at the meeting, unless federal law permits a lesser percentage of votes for a federal mutual association to convert, in which case that percentage shall control for conversions of both state and federal mutual associations, is required for approval. Notice of the meeting, giving the time, place, and purpose, together with a proxy statement and proxy form meeting the requirements in Section 33-11-140 and any applicable federal regulations approved by the Board covering all matters to be brought before the meeting, must be mailed at least thirty days prior to the Board and to each voting member at his last address as shown on the books of the association.

(e) Copies of the minutes of the meeting of members, verified by the affidavit of the secretary or assistant secretary of the association, must be filed with the Board, and with the Federal Home Loan Bank Board if applicable, within ten days after the meeting. When so filed, the verified copies of the minutes are presumptive evidence of the holding of the meeting and of the action taken.

(f) The directors of the association shall execute and file with the Board proposed Articles of Incorporation as provided for in Section 34-28-130, together with the application for conversion, and a statement showing that requisite capital required in the conversion plan approved by the Board has been paid to the association in cash, that all other conditions imposed by the Board or specified in the plan of conversion have been satisfied, and that a firm commitment for, or evidence of, insurance of deposits and other accounts of a withdrawable type from the Federal Savings and Loan Insurance Corporation has been obtained. The Articles of Incorporation of the converted association shall contain a statement that the association resulted from the conversion of a state or federal mutual association to a capital stock association. Approval by the Board must be affixed to the Articles of Incorporation. The original copy of the Articles of Incorporation must be filed with the Secretary of State and a certified copy of the Articles of Incorporation must be filed with the Board, provided that failure to file a certified copy of the Articles of Incorporation with the Board shall not affect the validity of the conversion. The association shall cease to be a mutual association at the time and on the date specified in the approved Articles of Incorporation or the date the Articles of Incorporation are filed in the office of the Secretary of State, whichever is later.

(2) Upon conversion of a mutual association to a state-chartered stock association, the legal existence of the association shall not terminate, but the capital stock association is a continuation of the entity of the mutual association, and all property of the mutual association, including its right, title, and interests in and to all property of whatever kind, whether real, personal, or mixed, things in action, and every right, privilege, interest, and asset of every conceivable value or benefit then existing or pertaining to it, or which would inure to it, immediately, by act of law and without any conveyance or transfer and without any further act or deed, shall vest and remain in the stock association into which the mutual association has converted itself. The capital stock association shall have, hold, and enjoy the same in its own right as fully and to the same extent as if the same were possessed, held, and enjoyed by the mutual association. The capital stock association, upon the effective date of the conversion, shall continue to have and succeed to all the rights, obligations, and relations of the mutual association. All pending actions and other judicial proceedings to which the mutual association is a party are not abated or discontinued by reason of the conversion but may be prosecuted to final judgment, order, or decree in the same manner as if the conversion had not been made; and the stock association resulting from the conversion may continue the actions in its corporate name as a mutual association. Any judgment, order, or decree may be rendered for or against the stock association which might have been rendered for or against the mutual association involved in the proceedings.

(3) The application for conversion from a state or federal mutual to a state stock association must be accompanied by a nonrefundable filing fee established by the Board.

SECTION 34-28-230. Power to reorganize, merge, or consolidate or sell assets out of the ordinary course of business.

(1) Pursuant to a plan adopted by the board of directors and approved by the Board as equitable and as adequately protecting the interests of the association, its members or stockholders, its deposit account holders, and the public, an association shall, subject to Article 4 of this chapter, have power to reorganize, to merge, or consolidate into another association or company, or to sell all or substantially all of its assets out of the ordinary course of business to another association or company, provided the plan of the reorganization, merger, or consolidation or sale of assets meets the procedural requirements of the South Carolina Business Corporation Act, Chapters 1 to 25 of Title 33, for these transactions.

(2) The Board may provide by regulation for the procedures to be followed by any association submitting a plan of reorganization, merger, or consolidation pursuant to this section.

(3) The Board may not approve any proposed transactions set forth in this section:

(a) Which would result in a monopoly, or which would be in furtherance of any combination or conspiracy to monopolize or to attempt to monopolize the savings and loan business in this State; or

(b) The effect of which in this State may be substantially to lessen competition, or to tend to create a monopoly, or which in any other manner would be in restraint of trade, unless it finds that the anticompetitive effects of the proposed transaction are clearly outweighed in the public interest by the probable effect of the proposed reorganization, merger, or consolidation or sale of assets in meeting the convenience and needs of the primary service area to be served.

(4) Each application for reorganization, merger, consolidation, or sale of assets out of the ordinary course of business must be accompanied by a nonrefundable filing fee as determined by the Board.

(5) In the event of any conflict between this section and Article 4 of this chapter, the provisions of Article 4 shall control.

SECTION 34-28-240. Voluntary supervisory stock conversions.

(1) A voluntary supervisory stock conversion is a conversion involving the sale of a mutual association's newly issued stock to a third party or parties in a transaction in which the association's members have no rights of approval or participation, and no rights to the continuance of any legal or beneficial ownership interest in the converted association pursuant to a conversion plan approved by the Board and a majority of the board of directors of the converting association.

(2) The Board shall have the discretion to approve a voluntary supervisory stock conversion, subject to regulations it may promulgate, when:

(a) It has the power to appoint a receiver for the purpose of liquidation of the converting association pursuant to Section 34-28-730;

(b) Upon liquidation the mutual account holders of the converting association would not realize any equity value;

(c) The converting association is in receivership, or has been authorized to receive assistance under Section 406 of the National Housing Act, l2 U.S.C. Section 1729, or the Board has determined that a severe financial condition exists which threatens the financial condition of the converting association and that approval of the voluntary supervisory conversion is likely to improve the converting association's financial condition; and

(d) The Board finds that following the conversion, the converting association will be a viable entity.

SECTION 34-28-250. Supervisory case; emergency conversion, reorganization and merger.

(1) The Board may determine that an association is a supervisory case if it finds that:

(a) The association is in an impaired condition (Section 34-28-30(10)); or

(b) The association is in imminent danger of being in an impaired condition. Any of these findings by the Board must be based upon reports furnished to it by a savings and loan association examiner or upon other evidence from which it is reasonable to conclude that the association is a supervisory case.

(2) Notwithstanding any other provisions of this chapter, if the Board finds that immediate action is necessary in order to prevent the probable failure of an association which is a supervisory case, the Board shall have the power, with the concurrence of the appropriate federal regulatory agency in the case of any association the deposits of which are insured by the Federal Savings and Loan Insurance Corporation, to issue an emergency order authorizing:

(a) the conversion of the association into a federal association without change of business form;

(b) the reorganization, merger, or consolidation of the association;

(c) the conversion of the association into a capital stock association; or

(d) any state or federal association to acquire the assets of and assume the liabilities of the failing association.

SECTION 34-28-260. Acquisition of majority control over existing stock-owned association.

Subject to the provisions of Article 4 of this chapter:

(1)(a) In any case in which a person or group of persons propose to purchase or acquire voting common stock of any stock-owned association, which purchase or acquisition would cause the person or group of persons to have control of that association, the person or group of persons shall first make application to the Board for a certificate of approval of the purchase or acquisition.

(b) An application for control must be in that form and contain that information as the Board may by regulation require.

(c) The application for control must be accompanied by a nonrefundable filing fee as determined by the Board.

(2) The Board shall issue a certificate of approval only after it has made an investigation and determined that:

(a) The proposed new owner or owners of voting common stock are qualified by character, experience, and financial responsibility to control the association in a legal and proper manner.

(b) The interests of the public generally will not be jeopardized by the proposed purchase or acquisition of voting common stock.

(c) If the Board does not disapprove a proposed change of control application within sixty days of the time it is filed with the Board, the proposed transaction is considered approved and may take place, provided that all other required regulatory approvals have been obtained, that the transaction is consummated within one year of the time the application is filed, and that there is no material change in the terms and conditions of the transaction disclosed in the application prior to the consummation. The sixty-day period specified in the preceding sentence may be extended by the Board for up to thirty days for any reasons if written notice of the extension is given to the applicant prior to the expiration of the sixty-day period.

(d) The applicant is entitled to notice and a hearing contesting the denial by the Board of any change of control application filed pursuant to this section.

(3) This section shall not apply to the acquisition of:

(a) Directors' voting proxies acquired in the normal course of business as a result of proxy solicitation in conjunction with a stockholders' meeting;

(b) Stock in a fiduciary capacity unless the acquiring person has sole discretionary authority to exercise voting rights;

(c) Stock acquired in securing or collecting a debt contracted in good faith until two years after the date of acquisition; or

(d) Stock acquired by an underwriter in good faith and without any intent to evade the purpose of this section if the shares are held only for a reasonable period of time as will permit the sale.

SECTION 34-28-270. Dissolution.

(1) Any association may, at any special meeting of the members or stockholders called to consider the action, terminate its existence in accordance with the provisions of this section upon a vote of more than a majority of the total number of votes of members or shareholders eligible to be cast at the meeting.

(2) Upon the vote, three copies of a statement of interest to dissolve, which shall state the vote cast in favor of dissolution, must be filed with the Board, which shall examine the association, and, if it finds that the association is not in an impaired condition, it shall so note, together with its approval of the dissolution, upon all the copies of the certificate of dissolution. The Board shall place a copy in its permanent files, file a copy with the Secretary of State, and return the remaining copy to the parties who filed it.

(3) Upon this approval, the association is dissolved and shall cease to carry on business but nevertheless shall continue as a corporate entity for the sole purpose of paying, satisfying, and discharging existing liabilities and obligations, collecting and distributing assets, and doing all other acts required to adjust, wind up, and dissolve its business and affairs.

(4) The board of directors in office at the time of the vote of dissolution shall act as trustees for the liquidation. The board of directors shall proceed as quickly as may be practicable to wind up the affairs of the association and, to the extent necessary or expedient to that end, shall exercise all the powers of the dissolved association and, without prejudice to the general nature of this authority, may fill vacancies, elect officers, carry out contracts, make new contracts, borrow money, mortgage or pledge property, sell its assets at public or private sale, compromise claims in favor of or against the association, apply assets to the discharge of liabilities, distribute assets either in cash or in kind among savings account members of a mutual association or stockholders of a capital stock association according to their respective prorata interests after paying or adequately providing for the payment of other liabilities, and perform all acts necessary or expedient to the winding up of the association. All deeds or other instruments must be in the name of the association and executed by the president or a vice president and the secretary or an assistant secretary. The board of directors shall also have power to exchange or otherwise dispose of or put in trust all, substantially all, or any part of the assets, upon those terms and conditions and for that consideration as the board of directors may consider reasonable or expedient, and may distribute the consideration or the proceeds, trust receipts, or certificates of beneficial interest among the savings account members of a mutual association or stockholders of a stock association in proportion to their prorata interests. In the absence of fraud, any determination of value made by the board of directors for any of these purposes is conclusive.

(5) The association, during the liquidation of the as

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