Code of Virginia

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Code of Virginia
Title 6.2. Financial Institutions and Services
Chapter 8. Banks
9/28/2021

Article 4. Bank Mergers and Conversions.

§ 6.2-822. Merger and share exchange by state banks.

A. Virginia banks as defined in § 6.2-849 may merge upon compliance with the provisions of Article 12 (§ 13.1-715.1 et seq.) of the Virginia Stock Corporation Act. The provisions of:

1. Section 13.1-716 that relate to a merger with a foreign corporation as foreign eligible entity shall not apply, except that the provisions of § 13.1-716 relating to merger shall apply to the merger of a state and a national bank if the national bank is engaged in business in Virginia, and if the state bank is to be the surviving bank; and

2. Section 13.1-730 shall not apply to a merger under this section.

B. A national bank shall be treated as if it were a foreign corporation and as if the United States were the state where it is organized. A bank may enter into a share exchange, as permitted by § 13.1-717, provided there is also compliance with Chapter 7 (§ 6.2-700 et seq.). The exclusion in subdivision G 3 of § 6.2-705 shall not apply in the case of such an exchange of shares.

C. In the event of a merger authorized by subsection A or B, the merged corporation, whether it be one of merging banks, or a new bank formed by means of such merger, shall without further act or deed succeed to, and be vested with all offices, rights, obligations and relations of trust or of a fiduciary nature, including appointments, designations and nominations, existing immediately prior to the time at which such merger became effective, or then belonging or pertaining to any one or more of the banks, parties to such merger, or which would then inure to any one or more of such banks.

D. No state bank resulting from any merger shall do business in the Commonwealth until it shall have obtained from the Commission a certificate of authority authorizing it to do so. The provisions of § 6.2-816 shall apply to the issuance, or refusal of the Commission to issue, the certificate herein provided for, to the same extent as if the merged bank were a new bank.

E. In the case of a merger heretofore or hereafter effected, the surviving or new bank shall be deemed to have been in actual operation for the period during which the oldest of the banks involved in the merger has been in actual operation.

Code 1950, §§ 6-20, 6-21; 1952, c. 571; 1956, c. 433; 1966, c. 584, §§ 6.1-43, 6.1-44; 1970, c. 536; 1987, c. 423; 1995, c. 301; 2005, c. 765; 2010, c. 794.

§ 6.2-823. Conversion of national banking association to state bank; certificate of authority.

A. A national banking association, organized under the laws of the United States and doing business in the Commonwealth, may be converted into and become a state bank by the following procedure:

1. The directors of the national banking association shall cause to be incorporated under the laws of the Commonwealth a corporation authorized by its certificate of incorporation to conduct the business of banking as the successor of the national banking association. With regard to such incorporation:

a. The certificate of incorporation of the corporation shall conform as nearly as may be legally permissible to that of the national banking association;

b. The principal office of the corporation shall be in the county or city wherein the national banking association has its principal office; and

c. The amount of the capital stock of the corporation, its division into shares, the par value of shares, their classification and preferences, if any, shall conform to those of the national banking association, and the minimum capital of the state bank shall comply with that required for a bank under § 6.2-816.

2. The national banking association shall effect its conversion to a state bank in accordance with the procedure prescribed by Subchapter XV of Chapter 2 of Title 12 of the United States Code (12 U.S.C. § 214 et seq.), as it now exists or as it may hereafter be amended.

3. Upon completion of the procedures required by subdivision 2, the president of the national banking association and the official having custody of its records shall execute, under the seal of the association, a certificate showing in detail the procedures followed, the number of shares of each class of stock of the national banking association issued and outstanding, and the vote of each class of stockholders in favor of the plan of conversion. The national banking association shall then file the certificate with the Commission.

B. The Commission shall examine the certificate filed pursuant to subdivision A 3. If from such examination it appears that the procedure required by subdivision A 2 has been followed and that the conversion has been approved by the stockholders of the national banking association in the manner and by the percentage vote required by federal law, the Commission may issue to the newly incorporated state bank a certificate of authority to do business as a bank, in accordance with the provisions of § 6.2-816. Upon the issue of such certificate, the conversion of the national banking association into a state bank shall become effective and be automatically completed.

Code 1950, §§ 6-14, 6-15.1; 1952, c. 571; 1966, c. 584, §§ 6.1-33, 6.1-38; 1993, c. 244; 1996, c. 26; 2010, c. 794.

§ 6.2-824. Status of converted bank.

Upon the conversion of a national banking association to a state bank as provided in § 6.2-823, the state bank shall be considered to be the same business and corporate entity as the former national banking association, except that the state bank shall have the rights, powers, and duties as prescribed by state law. Any reference to the former national banking association in any contract, will, or document shall be deemed to be a reference to the state bank if not inconsistent with the provisions of the contract, will, or document or with applicable law.

Code 1950, § 6-15.2; 1952, c. 571; 1966, c. 584, § 6.1-34; 2010, c. 794.

§ 6.2-825. State bank becoming national bank; notice required; effect on liabilities.

A. Any bank incorporated under the laws of the Commonwealth may, upon compliance with federal law, be converted into a national banking association.

B. When any state bank becomes a corporation for carrying on the business of banking under federal law, it shall notify the Commission of such fact and file with the Commission a copy of its authorization as a national banking association certified by the Comptroller of the Currency. Such bank shall thereupon cease to be a corporation under the laws of the Commonwealth, except that, for a period not exceeding three years thereafter, its corporate existence shall be deemed to continue for the purposes of (i) prosecuting or defending suits by or against it and (ii) enabling it to settle and close its affairs, to dispose of and convey its property, and to divide its capital, but not for the purpose of continuing the business for which such bank was established.

C. A conversion from a state to a national bank shall not release the state bank from its obligations to pay and discharge (i) all the liabilities created by law or incurred by it before becoming a national banking association, (ii) any tax imposed by the laws of the Commonwealth up to the date of its becoming such national banking association in proportion to the time which has elapsed since the next preceding payment therefor, or (iii) any assessment, penalty, or forfeiture imposed or incurred under the laws of the Commonwealth up to the date it became a national banking association.

Code 1950, § 6-18; 1966, c. 584, § 6.1-35; 2010, c. 794.

§ 6.2-826. Effect of conversion of state bank to national bank.

A. When a conversion of a state bank into a national banking association under the authority granted by § 6.2-825 becomes effective, all the property of the former state bank, including all its right, title, and interest in and to all property of every 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, belonging, or pertaining to it, or which would inure to it, shall immediately, by act of law and without any conveyance or transfer, and without any further act or deed, be vested in and become the property of such national bank. The national bank 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, or enjoyed by the state bank. The national bank shall be deemed to be a continuation of the entity and identity of the state banking corporation that is operated under and pursuant to federal law.

B. All the rights, obligations, and relations of the converted state bank to or in respect to (i) any person, estate, creditor, depositor, trustee, or beneficiary of any trust and (ii) any executorship or trusteeship or other trust or fiduciary function, including appointments, designations, and nominations, shall remain unimpaired. The national bank, as of the beginning of its corporate existence, shall, by operation of this section, succeed to all such rights, obligations, relations, and trusts, including appointments, designations, and nominations, and the duties and liabilities connected therewith. The national bank shall execute and perform each and every such trust and relation in the same manner as if such national bank had itself assumed the trust or relation, including the obligations and liabilities connected therewith.

C. If the state banking corporation is acting as administrator, coadministrator, executor, coexecutor, trustee, or cotrustee of, or in respect to, any estate or trust being administered under the laws of the Commonwealth, such relation, as well as any other or similar fiduciary relation, and all rights, privileges, duties, and obligations connected therewith, shall remain unimpaired and shall continue in such national bank from and as of the beginning of its corporate existence, irrespective of (i) the date when any such relation may have been created or established, (ii) the date of any trust agreement relating thereto, or (iii) the date of the death of any testator or decedent whose estate is being so administered.

D. Nothing done in connection with a conversion from a state to a national bank, in respect to any such executorship, trusteeship, or similar fiduciary relation, shall (i) be deemed to be or to effect, under the laws of the Commonwealth, a renunciation or revocation of any letters of administration or letters testamentary pertaining to such relation or a removal or resignation from any such executorship or trusteeship or (ii) be deemed to be of the same effect as if the executor or trustee had died or otherwise become incompetent to act. Nothing in this section shall in any way affect any provisions of law if a national bank becomes a state bank.

Code 1950, § 6-19; 1966, c. 584, § 6.1-36; 2010, c. 794.

§ 6.2-827. Rights of national bank stockholders dissenting from conversion.

The rights of stockholders of a national banking association who dissent from the approval by the stockholders of the conversion of the national banking corporation into a state bank shall be governed by the provisions of 12 U.S.C. § 214a (b), as now existing or as hereafter amended.

Code 1950, § 6-15.3; 1952, c. 571; 1966, c. 584, § 6.1-37; 2010, c. 794.

§ 6.2-828. Conversion of state bank to federal savings institution.

A. A state bank may convert into a federal savings institution as follows:

1. At any meeting of the stockholders called and held in accordance with the Virginia Stock Corporation Act (§ 13.1-601 et seq.) or the Virginia Nonstock Corporation Act (§ 13.1-801 et seq.) to consider such action, the stockholders, by an affirmative vote of those holding and voting two-thirds of the votes present in person or by proxy, may resolve to convert the bank into a federal savings institution;

2. A copy of the minutes of the meeting duly certified by the president or vice-president and the secretary or assistant secretary of the state bank shall be transmitted to the Commission;

3. Thereafter, the state bank shall take such action as is necessary under federal law to make it a federal savings institution; and

4. The bank shall file with the Commission a certified copy of the charter issued to it by the federal chartering authority, or a certificate of that authority showing the organization of the bank as a federal savings institution.

B. Upon the filing of the certified copy of a charter or certificate of authority as provided in subdivision A 4, the bank shall cease to be a state bank.

C. No state bank shall convert into a federal savings institution until it has been in operation as a state bank for a period of at least five years.

D. When a conversion of a state bank into federal savings institution becomes effective, the state bank shall cease to be a Virginia corporation and all its property, by operation of law and without any further act or deed, shall continue to be vested in it under its new name as a federal savings institution and under its federal charter. The federal savings institution shall have, hold and enjoy the same in its own right as fully and to the same extent as the same was possessed, held and enjoyed by it as a state bank. The federal savings institution, at the time of the taking effect of the conversion, shall become and continue to be responsible for all of the obligations of the state bank including taxes and other liabilities created by law or incurred by it before becoming a federal savings institution to the same extent as though the conversion had not taken place.

Code 1950, §§ 6-201.43; 6-201.44; 1960, c. 402; 1966, c. 584, §§ 6.1-173, 6.1-174; 1972, c. 796, §§ 6.1-195.52, 6.1-195.53; 1982, c. 156; 1985, c. 425; 1990, c. 3; 1995, c. 133; 2010, c. 794.

§ 6.2-829. Conversion from state savings bank to state bank; conversion from state bank to state savings bank.

A. A state savings bank may be converted into a state bank upon compliance with the procedure set forth in subsection A of § 6.2-1144.

B. A state bank may be converted into a state savings bank by the amendment of its articles of incorporation in compliance with the procedure established by Title 13.1, provided that such conversion is approved in advance by the Commission. Prior to approving or disapproving a conversion, the Commission shall investigate the application to convert as if it were an application for a certificate of authority to begin a savings bank, and approval shall not be granted unless the applicant meets the standards established by § 6.2-1118. Within one year of the date of the conversion, the resulting state savings bank shall conform its assets and operations to the provisions of law regulating the operation of state savings banks. The Commission may grant such resulting state savings bank additional one-year periods, not to exceed a total of four additional years, in which to conform its assets and operations to the provisions of law regulating the operation of state savings banks.

1991, c. 230, § 6.1-194.129; 2010, c. 794.

§ 6.2-830. Conversion from stock association to bank; conversion from bank to stock association.

A. A state stock association may be converted into a bank upon compliance with the procedure set forth in § 6.2-1144.

B. A bank may be converted into a stock association by the amendment of its articles of incorporation in compliance with the procedure established by Title 13.1, provided that such conversion is approved in advance by the Commission. Prior to approving or disapproving a conversion, the Commission shall investigate the application to convert as if it was an application for a certificate of authority to begin a savings and loan business, and approval shall not be granted unless the applicant meets the standards established by § 6.2-1118. Within one year of the date of the conversion, the resulting stock association shall conform its assets and operations to the provisions of law regulating the operation of savings and loan associations. The Commission may grant such resulting stock association additional one-year periods, not to exceed a total of four additional years, in which to conform its assets and operations to the provisions of law regulating the operation of savings and loan associations.

1982, c. 224, § 6.1-195.57:2; 1985, c. 425, § 6.1-194.38; 2010, c. 794.