Chapter 1115: BANKS - ACQUISITIONS AND REORGANIZATIONS

1115.01 Converting state bank into national.

(A)

(1) A state bank may do any of the following:

(a) Convert into a national bank if the conversion is approved by both the comptroller of the currency and the affirmative vote or written consent of the holders of two-thirds, or such other proportion not less than a majority as the bank's articles of incorporation require, of the outstanding shares of each class of the bank's stock;

(b) Convert into a federal savings association if the conversion is approved by both the office of thrift supervision and the affirmative vote or written consent of the holders of two-thirds, or such other proportion not less than a majority as the bank's articles of incorporation require, of the outstanding shares of each class of the bank's stock;

(c) Convert into a savings and loan association pursuant to section 1151.64 of the Revised Code or the laws of another state if the conversion is approved by the affirmative vote or written consent of the holders of two-thirds, or such other proportion not less than a majority as the bank's articles of incorporation require, of the outstanding shares of each class of the bank's stock;

(d) Convert into a savings bank pursuant to section 1161.631 of the Revised Code or the laws of another state if the conversion is approved by the affirmative vote or written consent of the holders of two-thirds, or such other proportion not less than a majority as the bank's articles of incorporation require, of the outstanding shares of each class of the bank's stock;

(e) Convert into a bank doing business under authority granted by the bank regulatory authority of another state, pursuant to the laws of that state, if the conversion is approved by the affirmative vote or written consent of the holders of two-thirds, or such other proportion not less than a majority as the bank's articles of incorporation require, of the outstanding shares of each class of the bank's stock.

(2) A state bank that converts into a national bank, a bank doing business under authority granted by the bank regulatory authority of another state, or a federal savings association shall, immediately upon the conversion being effective, file with the superintendent of financial institutions all information the superintendent determines is necessary to reflect in the state's records that the bank or federal savings association is no longer a corporation organized and doing business under the laws of this state.

(B)

(1) A national bank, bank doing business under authority granted by the bank regulatory authority of another state, savings association, or savings bank may, with the approval of the superintendent, convert into a state bank.

(2) A national bank, bank doing business under authority granted by the bank regulatory authority of another state, savings association, or savings bank proposing to convert into a state bank shall submit to the superintendent an application for the superintendent's approval of the conversion that includes all of the following:

(a) A plan of conversion;

(b) The proposed articles of incorporation and code of regulations of the proposed state bank;

(c) An officers' certification that the directors and shareholders of the national bank, bank doing business under authority granted by the bank regulatory authority of another state, savings association, or savings bank have approved the plan of conversion and the proposed articles of incorporation and code of regulations in accordance with the applicable state or federal law and with the bank's, savings association's, or savings bank's articles of association or incorporation and code of regulations or bylaws;

(d) Any other information the superintendent requires.

(3) Within ten business days after receiving an application required under division (B)(2) of this section, the superintendent shall determine whether to accept the application. Within ninety days after accepting an application required under division (B)(2) of this section, the superintendent shall approve or disapprove the application. In determining whether to approve the bank's, savings association's, or savings bank's conversion into a state bank, the superintendent shall consider all of the following:

(a) The adequacy of the capital and paid-in capital of the proposed state bank;

(b) Whether the competence, experience, and integrity of each director, executive officer, and controlling shareholder of the proposed state bank meet the criteria for acquiring control of a state bank as provided in section 1115.06 of the Revised Code;

(c) Whether the proposed state bank affords reasonable promise of successful operation;

(d) Whether the proposed state bank meets the requirements of Chapters 1101. to 1127. of the Revised Code.

(4) The superintendent may condition an approval of the conversion of a national bank, bank doing business under authority granted by the bank regulatory authority of another state, savings association, or savings bank into a state bank in any manner the superintendent considers appropriate.

(5)

(a) If the superintendent approves a conversion of a national bank, bank doing business under authority granted by the bank regulatory authority of another state, savings association, or savings bank into a state bank, the superintendent shall forward a certificate of the approval of the conversion and the state bank's articles of incorporation to the secretary of state, and shall issue to the new state bank a certificate of authority to commence business as a state bank.

(b)

(i) In the case of a state bank resulting from the conversion of a savings association organized under Chapter 1151. of the Revised Code or a savings bank organized under Chapter 1161. of the Revised Code, the secretary of state shall file the certificate of the superintendent's approval of the conversion and the state bank's articles of incorporation in a manner reflecting the corporation is no longer doing business under Chapter 1151. or 1161. of the Revised Code.

(ii) In the case of a state bank resulting from the conversion of a national bank, a bank, savings association, or savings bank doing business under authority granted by the regulatory authority of another state, or a federal savings association, the secretary of state shall file the certificate of the superintendent's approval of the conversion and the state bank's articles of incorporation in a manner reflecting the state bank is newly authorized to do business under the laws of this state.

(6) The conversion shall be effective on the date indicated in the superintendent's approval. Without further act or deed, the state bank resulting from the conversion shall have all property, rights, interests, and powers of its predecessor bank, savings association, or savings bank within the limits of the charter of the resulting state bank, and all duties, trusts, obligations, and liabilities of the predecessor bank, savings association, or savings bank shall continue in the state bank resulting from the conversion.

Cite as R.C. § 1115.01

Effective Date: 05-21-1997

1115.02, 1115.021 Amended and Renumbered RC 1105.01, 1105.02.

Cite as R.C. § 1115.02, 1115.021

Effective Date: 01-01-1997

1115.03 [Repealed].

Cite as R.C. § 1115.03

Effective Date: 01-01-1997

1115.04 Amended and Renumbered RC 1105.03.

Cite as R.C. § 1115.04

Effective Date: 01-01-1997

1115.05 Interstate acquisitions and branch banks.

(A) As used in this section:

(1) "Acquire" or "acquisition" means any of the following transactions or actions:

(a) A merger or consolidation with, or purchase of assets from, a bank holding company that has acquired an Ohio bank;

(b) The acquisition of the direct or indirect ownership or control of voting shares of an Ohio bank if, after the acquisition, the acquiring bank holding company will directly or indirectly own or control the Ohio bank, unless the superintendent of financial institutions determines, in the superintendent's discretion, due to the nature of the acquisition, it should not be subject to the limitations of this section;

(c) The merger or consolidation of an Ohio bank with, or the transfer of assets from an Ohio bank to, another bank, whether previously existing or chartered for the purpose of the transaction;

(d) Any other action that results in the direct or indirect control of an Ohio bank.

(2) "Ohio bank" means a state bank or a national bank whose principal place of business is in this state.

(B) Subject to divisions (C) and (D) of this section, a bank or bank holding company whose principal place of business is in this state or any other state may charter or otherwise acquire an Ohio bank, and a bank may acquire banking offices in this state by merger or consolidation with or transfer of assets and liabilities from a bank, savings bank, or savings association that has offices in this state, if, upon consummation of the acquisition, both of the following will apply:

(1) The acquiring bank with, or the acquiring bank holding company through, its affiliate banks, savings banks, and savings associations, does not control more than ten per cent of the total deposits of banks, savings banks, and savings associations in the United States, and either of the following applies:

(a) The acquiring bank with, or the acquiring bank holding company through, its affiliate banks, savings banks, and savings associations, does not control more than thirty per cent of the total deposits of banks, savings banks, and savings associations in this state.

(b) The acquiring bank with, or the acquiring bank holding company through, its affiliate banks, savings banks, and savings associations, controls more than thirty per cent of the total deposits of banks, savings banks, and savings associations in this state, and the superintendent approved the acquisition after determining the anticompetitive effects of the acquisition were clearly outweighed in the public interest by the probable effect of the transaction.

(2) Except in the case of a foreign bank subject to Chapter 1119. of the Revised Code or a bank that by the terms of its articles of incorporation or association is not permitted to solicit or accept deposits other than trust funds, the Ohio bank or any bank that has banking offices in this state will be an insured bank as defined in section 3(h) of the "Federal Deposit Insurance Act," 92 Stat. 614 (1978), 12 U.S.C.A. 1813(h) .

(C)

(1) Any bank holding company proposing to charter a state bank under this section shall comply with Chapter 1113. of the Revised Code and any rules adopted to implement that chapter.

(2) If, after the proposed acquisition, the acquiring bank or bank holding company will control an existing state bank the acquiring bank or bank holding company did not control before the acquisition, and the acquisition does not include the merger or consolidation of the existing state bank with another bank, the acquiring bank or bank holding company shall comply with section 1115.06 of the Revised Code and any rules adopted to implement that section.

(3) If the proposed acquisition will be accomplished by means of a merger or consolidation with a state bank and the resulting bank of the merger or consolidation will be a state bank, the state bank shall comply with section 1115.11 of the Revised Code and any rules adopted to implement that section.

(4) If the proposed acquisition will be accomplished by means of a transfer of assets and liabilities to a state bank, the state bank shall comply with section 1115.14 of the Revised Code and any rules adopted to implement that section.

(5) If the proposed acquisition will be accomplished by forming a bank to which the bank to be acquired will transfer assets and liabilities, or with which the bank to be acquired will be merged or consolidated and the resulting bank will be a state bank, the acquiring bank holding company shall comply with section 1115.23 of the Revised Code and any rules adopted to implement that section.

(D)

(1) If the acquiring bank is a bank doing business under authority granted by the bank regulatory authority of another state and the acquisition will be accomplished by agreeing to assume all or substantially all of the deposit liabilities of an existing branch located in this state of a savings association doing business under authority granted by the superintendent pursuant to Chapter 1151. of the Revised Code, the acquisition shall be subject to the superintendent's approval, which shall include a determination that the laws of the state in which the acquiring bank has its principal place of business permit a bank with its principal place of business in Ohio to acquire all or substantially all of the deposit liabilities of an existing branch of a savings association located in that state on terms that are, on the whole, substantially no more restrictive than those established under section 1151.052 of the Revised Code.

(2) If the acquiring bank is a bank doing business under authority granted by the bank regulatory authority of another state and the acquisition will be accomplished by agreeing to assume all or substantially all of the deposit liabilities of an existing branch located in this state of a savings bank doing business under authority granted by the superintendent pursuant to Chapter 1161. of the Revised Code, the acquisition shall be subject to the superintendent's approval, which shall include a determination that the laws of the state in which the acquiring bank has its principal place of business permit a bank with its principal place of business in Ohio to acquire all or substantially all of the deposit liabilities of an existing branch of a savings bank located in that state on terms that are, on the whole, substantially no more restrictive than those established under section 1161.07 of the Revised Code.

Cite as R.C. § 1115.05

Effective Date: 05-21-1997

1115.06 Notifying superintendent of proposed acquisition.

(A) As used in this section:

(1) "Control" of a state bank means either of the following:

(a) Power, directly or indirectly, to direct the management or policies of a state bank;

(b) Ownership or control of or power to vote twenty-five per cent or more of any class of voting securities of a state bank.

(2) "State bank" includes any bank holding company that controls a state bank, and any other company that controls a state bank and is not a bank holding company.

(B)

(1) No person, acting directly or indirectly or through or in concert with one or more other persons, shall acquire control of a state bank through a purchase, assignment, transfer, pledge, or other disposition of voting securities of a state bank unless the superintendent of financial institutions has been given sixty days' prior written notice of the proposed acquisition and within that sixty days the superintendent has not done either of the following:

(a) Disapproved the acquisition;

(b) Extended the time during which the superintendent may disapprove the acquisition, as provided in division (B)(2) of this section.

(2) The superintendent may extend the time during which the superintendent may disapprove a proposed acquisition of control, as follows:

(a) For an additional thirty days in the discretion of the superintendent;

(b) For two additional extensions of not more than forty-five days each, if any of the following applies:

(i) The superintendent determines any acquiring party has not furnished all of the information required under division (C) of this section.

(ii) In the superintendent's judgment, any material information submitted is substantially inaccurate.

(iii) The superintendent has been unable to complete the investigation of an acquiring person under division (E)(1) of this section because of any delay caused by, or the inadequate cooperation of, that acquiring person.

(iv) The superintendent determines additional time is needed to investigate and determine whether any acquiring person has a record of failing to comply with the requirements of subchapter II of Chapter 53 of subtitle IV of Title 31 of the United States Code.

(3) An acquisition may be made prior to the expiration of the disapproval period if the superintendent issues written notice of the superintendent's intent not to disapprove the acquisition of control.

(C) Except as the superintendent otherwise provides by rule, a notice required under division (B) of this section shall contain the following information:

(1) The identity, personal history, and business background and experience of each person by whom or on whose behalf the acquisition is to be made, including each person's material business activities and affiliations during the past five years; a description of any material pending legal or administrative proceedings in which each person is a party; and any criminal indictment or conviction of each person by a state or federal court.

(2) A statement of the assets and liabilities of each person by whom or on whose behalf the acquisition is to be made, as of the end of the fiscal year for each of the five years immediately preceding the date of the notice, together with related statements of income and source and application of funds for each of the fiscal years then concluded, all prepared in accordance with generally accepted accounting principles consistently applied; and an interim statement of the assets and liabilities for each person, together with related statements of income and source and application of funds, as of a date not more than ninety days prior to the date of the filing of the notice.

(3) The terms and conditions of the proposed acquisition and the manner in which the acquisition is to be made.

(4) The identity, source, and amount of the funds or other consideration used or to be used in making the acquisition and, if any part of these funds or other consideration has been or is to be borrowed or otherwise obtained for the purpose of making the acquisition, a description of the transaction, the names of the parties, and any arrangements, agreements, or understandings with the parties.

(5) Any plans or proposals any acquiring person may have to liquidate the state bank, to sell its assets or merge it with any company, or to make any other major change in its business or corporate structure or management.

(6) The identification of any person employed, retained, or to be compensated by an acquiring person, or by any person on an acquiring person's behalf, to make solicitations or recommendations to shareholders for the purpose of assisting in the acquisition, and a brief description of the terms of the employment, retainer, or arrangement for compensation.

(7) Copies of all invitations or tenders or advertisements making a tender offer to stockholders for purchase of their stock to be used in connection with the proposed acquisition.

(8) Any additional relevant information in the form the superintendent may require by rule or by specific request in connection with any particular notice.

(D) Unless the superintendent determines an emergency exists or disclosure of a proposed acquisition of control would seriously threaten the safety or soundness of the state bank, each person who gives a notice required under division (B) of this section shall, within a reasonable time after receiving the superintendent's acceptance of the notice, do both of the following:

(1) Publish the name of the state bank proposed to be acquired and the name of each person identified in the notice as a person by whom or for whom the acquisition is to be made;

(2) Solicit public comment on the proposed acquisition, particularly from persons in the geographic area where the state bank proposed to be acquired is located, before final consideration of the notice by the superintendent.

(E) Upon accepting a notice required under division (B) of this section, the superintendent shall do both of the following:

(1) Conduct an investigation of the competence, experience, integrity, and financial ability of each person named in the notice as a person by whom or for whom the acquisition is to be made;

(2) Make an independent determination of the accuracy and completeness of all information required to be in the notice.

(F) The superintendent may disapprove any proposed acquisition of control if the superintendent finds any of the following:

(1) The proposed acquisition of control would result in a monopoly or further any combination or conspiracy to monopolize or to attempt to monopolize the business of banking in any part of this state or any markets served by the state bank.

(2) The effect of the proposed acquisition of control in any part of this state and any markets served by the state bank may be to substantially lessen competition, tend to create a monopoly, or in any other manner restrain trade, and the anticompetitive effects of the proposed acquisition of control are not clearly outweighed in the public interest by the probable effect of the acquisition in meeting the convenience and needs of the community to be served.

(3) The financial condition of any acquiring person might jeopardize the financial stability of the state bank or prejudice the interests of the depositors of the state bank.

(4) The competence, experience, or integrity of any acquiring person or of any of the proposed management personnel indicates that it would not be in the interest of the depositors of the state bank, or in the interest of the public, to permit the acquiring person to control the state bank.

(5) The acquiring person neglects, fails, or refuses to furnish to the superintendent all of the information required by the superintendent.

(6) The superintendent determines the proposed transaction would have an adverse effect on the bank insurance fund or the savings association insurance fund administered by the federal deposit insurance corporation.

(G) Within three days after deciding to disapprove any proposed acquisition of control of a state bank, the superintendent shall notify the acquiring person in writing of the disapproval. The notice of disapproval shall provide a statement of the basis for the disapproval.

(H) Within ten days after receipt of a notice of the disapproval, the acquiring person may, in accordance with Chapter 119. of the Revised Code, request a hearing conducted in accordance with that chapter on the proposed acquisition.

(I) Whenever a change in control of a state bank occurs, the state bank shall promptly report to the superintendent any changes in or replacement of its chief executive officer or of any director that occurs in the next twelve-month period, and include in the report a statement of the past and current business and professional affiliations of the new chief executive officer or director.

(J)

(1) The superintendent may exercise any authority vested in the superintendent under Chapter 1121. of the Revised Code in the course of conducting any investigation under division (E) of this section or any other investigation the superintendent, in the superintendent's discretion, considers necessary to determine whether any person has filed inaccurate, incomplete, or misleading information under this section or otherwise is violating, has violated, or is about to violate any provision of this section or any rule implementing this section.

(2) Whenever it appears to the superintendent any person is violating, has violated, or is about to violate any provision of this section or any rule implementing this section, the superintendent may, in the superintendent's discretion, apply to the court of common pleas of any county in which the state bank is doing business for either of the following:

(a) A temporary or permanent injunction or restraining order enjoining the person from violating this section or any rule implementing this section;

(b) Other equitable relief, including divestiture, that may be necessary to prevent violation of this section or of any rule implementing this section.

(3)

(a) The courts of this state have the same jurisdiction and power in connection with the exercise of any authority by the superintendent under this section as they have under Chapter 1121. of the Revised Code.

(b) The courts of this state have jurisdiction and power to issue any injunction or restraining order or grant any equitable relief described in division (J)(2) of this section. When a court finds it appropriate, the court may grant the injunction, order, or other equitable relief without requiring the posting of any bond.

(K) The resignation, termination of employment or participation, divestiture of control, or separation of or by a regulated person, including a separation caused by the closing of a state bank, shall not affect the jurisdiction and authority of the superintendent to issue any notice and otherwise proceed under this section against the regulated person, if the notice is issued no later than six years after the date of the regulated person's resignation, termination of employment or participation, or separation from or divestiture of control of a state bank.

For purposes of this division, "regulated person" has the same meaning as in section 1121.01 of the Revised Code.

Cite as R.C. § 1115.06

Effective Date: 01-01-1997

1115.07 Report of outstanding credit.

(A) As used in this section:

(1) "Credit outstanding" means any loan, extension of credit, issuance of a guarantee, acceptance, or letter of credit, including an endorsement or standby letter of credit, or other transaction that extends financing to a person or group of persons.

(2) "Financial institution" means a state bank, national bank, savings bank, savings association, or a bank doing business under authority granted by the bank regulatory authority of another state of the United States or another country.

(3) "Group of persons" includes any number of persons the financial institution reasonably believes are either of the following:

(a) Persons who are acting together, in concert, or with one another to acquire or control shares of the same state bank, including an acquisition of shares of the same state bank at approximately the same time under substantially the same terms.

(b) Persons who have made, or have proposed to make, a joint filing under section 13 of Title I of the "Securities Exchange Act of 1934," 48 Stat. 881, 15 U.S.C.A. 78m , as amended, regarding ownership of the shares of the same state bank.

(B)

(1) Except as provided in division (D) of this section, any financial institution or any affiliate of a financial institution that has credit outstanding to any person or group of persons that is secured, directly or indirectly, by shares of a state bank shall file a consolidated report with the superintendent of financial institutions if the credits outstanding are, in the aggregate, secured, directly or indirectly, by twenty-five per cent or more of the outstanding shares of any class of the same state bank.

(2) For purposes of division (B)(1) of this section, any shares of the state bank held by the financial institution or any of its affiliates as principal shall be included in the calculation of the number of shares in which the financial institution or its affiliates has a security interest.

(C) The report required under division (B)(1) of this section shall be a consolidated report on behalf of the financial institution and all its affiliates, and shall be filed in writing within thirty days after the date on which the financial institution or any of its affiliates first believes the security for any outstanding credit consists of twenty-five per cent or more of the outstanding shares of any class of a state bank.

The report shall indicate the number and percentage of shares securing each credit outstanding, the identity of the borrower, and the number of shares held as principal by the financial institution or any of its affiliates. It also shall contain all of the information required in a notice under section 1115.06 , and any other relevant information the superintendent may require by rule or by specific request in connection with a particular report.

(D) A financial institution and its affiliates shall not be required to report a transaction under this section if either of the following applies:

(1) The person or group of persons to whom the credit is outstanding has disclosed to the superintendent the amount borrowed from the financial institution or its affiliate and the security interest of the financial institution or its affiliate in connection with a notice given under section 1115.06 of the Revised Code or with any other application filed with the superintendent, such as an application for an interim bank charter.

(2) The transaction involves either of the following:

(a) A person or group of persons that has been the owner of record of the shares for at least one year;

(b) Shares issued by a newly chartered state bank before the state bank's opening.

Cite as R.C. § 1115.07

Effective Date: 01-01-1997

1115.08, 1115.09 [Repealed].

Cite as R.C. § 1115.08, 1115.09

Effective Date: 01-01-1997

1115.10 Amended and Renumbered RC 1105.04.

Cite as R.C. § 1115.10

Effective Date: 01-01-1997

1115.11 State bank consolidations or mergers.

(A) A state bank may consolidate or merge with another state bank, a bank doing business under authority granted by the bank regulatory authority of another state, or a national bank, savings bank, or savings association, regardless of where it maintains its principal place of business, with the approval of all of the following:

(1) The directors of both constituent corporations;

(2) The shareholders of each constituent state bank by the affirmative vote or written consent of the holders of two-thirds, or such other proportion not less than a majority as the state bank's articles of incorporation provide, of the outstanding shares of each class of the state bank's stock;

(3) The shareholders of the other constituent bank, savings bank, or savings association as required by the applicable state or federal law;

(4) One of the following, as applicable:

(a) If the resulting corporation will be a state bank, a savings bank doing business under authority granted pursuant to Chapter 1161. of the Revised Code, or a savings and loan association doing business under authority granted pursuant to Chapter 1151. of the Revised Code, the superintendent of financial institutions;

(b) If the resulting corporation will be a national bank, the comptroller of the currency;

(c) If the resulting corporation will be a federal savings association, the director of the office of thrift supervision;

(d) If the resulting corporation will be a bank, savings bank, or savings association doing business under authority granted by the regulatory authority of another state, the state regulatory authority under which the bank, savings bank, or savings association is doing business.

(B) For a merger or consolidation in which the resulting or surviving corporation will be a state bank, the constituent corporations, in the case of a consolidation, and the constituent corporation that will be the surviving corporation, in the case of a merger, shall file with the superintendent an application for the superintendent's approval that includes all of the following:

(1) An officers' certification that the transaction has been approved by the directors and shareholders of each constituent corporation in accordance with the applicable state or federal law, articles of incorporation or association, code of regulations, or bylaws;

(2) A copy of the consolidation or merger agreement;

(3) Any other information the superintendent requires.

(C) The consolidation or merger agreement required under division (B)(2) of this section shall include all of the following:

(1) The names of the constituent corporations;

(2) The agreement that the named constituent corporations will consolidate into a new state bank or the other named constituent corporations will merge with or into one specified constituent corporation;

(3) Subject to the limitations set forth in section 1103.07 of the Revised Code, the name of the state bank resulting from the consolidation or surviving the merger;

(4) The place in this state where the resulting or surviving bank's principal place of business is to be located;

(5) In the case of a consolidation, the contents of the resulting bank's articles of incorporation, consistent with section 1103.06 of the Revised Code;

(6) In the case of a merger, any amendment to the surviving bank's articles of incorporation;

(7) The names and addresses of the directors of the resulting or surviving bank;

(8) The terms of the consolidation or merger, how the consolidation or merger will be effected, and how any consideration provided for will be distributed to the shareholders of the constituent corporations.

(D) Within ten business days after receiving an application required under division (B) of this section, the superintendent shall determine whether to accept the application. If the transaction is with a bank, savings bank, or savings association doing business under authority granted by a regulatory authority other than the superintendent, the superintendent shall notify the regulatory authority under which the bank, savings bank, or savings association is doing business of the application and solicit that regulatory authority's comments. Within ninety days after accepting an application required under division (B) of this section, the superintendent shall approve or disapprove the application. In making that determination, the superintendent shall consider all of the following:

(1) Whether the transaction would result in a monopoly or would further any combination or conspiracy to monopolize or to attempt to monopolize the business of banking in any part of this state and any markets served by the resulting or surviving bank;

(2) Whether the effect of the proposed transaction in any part of this state and any markets served by the resulting or surviving bank may be to substantially lessen competition, tend to create a monopoly, or in any other manner restrain trade, unless the superintendent finds the anticompetitive effects of the transaction would clearly be outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served;

(3) The financial and managerial resources and future prospects of the banks involved;

(4) The convenience and needs of the communities to be served;

(5) Whether, upon completion of the transaction, the resulting or surviving state bank will meet the requirements of Chapters 1101. to 1127. of the Revised Code;

(6) The comments of any regulatory authority notified in accordance with division (D) of this section.

(E) The superintendent may condition approval of an application under division (D) of this section in any manner the superintendent considers appropriate.

(F) Before consummating a consolidation or merger authorized under division (A) of this section, a state bank shall deliver to the superintendent a certificate of consolidation or merger that satisfies the requirements of section 1701.81 of the Revised Code. The superintendent shall file the certificate of consolidation or merger with the secretary of state and, if the resulting or surviving bank of the consolidation or merger is a state bank, shall file a certified copy of the superintendent's approval of the consolidation or merger with the certificate.

(G) In the case of a consolidation or merger in which the resulting or surviving corporation is a state bank, the directors and other officers named in the agreement of consolidation or merger shall serve until the date fixed in the agreement or provided in the resulting or surviving bank's code of regulations or by statute for the next annual meeting.

(H) When a consolidation or merger becomes effective, the existence of each of the constituent corporations ceases as a separate entity, but continues in the resulting or surviving corporation, within the limits of the charter of the resulting or surviving corporation and subject to section 1115.20 of the Revised Code, without further act or deed and within the limits of the charter of the resulting or surviving corporation, the resulting or surviving corporation has all assets and property, the rights, privileges, immunities, powers, franchises, and authority, and all obligations and trusts of each party to the merger or consolidation and the duties and liabilities connected with them. The resulting or surviving corporation shall perform every trust or relation it has in the same manner as if it had itself originally assumed the trust or relation and the obligations and liabilities connected with it.

Cite as R.C. § 1115.11

Effective Date: 05-21-1997

1115.111 Management or consulting fees.

(A) Except as provided in division (C) of this section, no bank shall pay to any person, other than reasonable compensation for services provided in his capacity as an employee, any management or consulting fee, including fees for legal, accounting, brokerage, or other similar professional services, not having a direct relationship to the value of actual services rendered, based on reasonable costs consistent with current market values for such services.

(B) The records of the bank shall contain adequate information to permit a determination as to what services are being provided and on what basis they are being priced. At a minimum the records shall disclose a thorough review by the board of directors demonstrating all of the following:

(1) That such fees are paid for specific services provided, as detailed in a fee analysis presented to the board;

(2) The basis for the cost for each function or service;

(3) A conclusion by the board of directors that the fees are reasonable.

(C) This section does not prevent a bank from paying any of the following:

(1) Dividends to shareholders that have been properly declared by the bank;

(2) Reasonable compensation to officers and employees of the bank for services rendered to the bank in their capacities as officers or employees of the bank;

(3) Fees to directors for their attendance at meetings of the board of directors, the executive committee, or other committees established by the board.

Cite as R.C. § 1115.111

Effective Date: 07-14-1987

1115.12 [Repealed].

Cite as R.C. § 1115.12

Effective Date: 01-01-1997

1115.121 Amended and Renumbered RC 1121.50.

Cite as R.C. § 1115.121

Effective Date: 01-01-1997

1115.13 [Repealed].

Cite as R.C. § 1115.13

Effective Date: 01-01-1997

1115.14 Transferring assets and liabilities.

(A) A state bank may transfer assets and liabilities to, and acquire assets and liabilities from, another state bank, a bank doing business under authority granted by the bank regulatory authority of another state, or a national bank, savings bank, or savings association, regardless of where it maintains its principal place of business, with the approval of all of the following:

(1) The directors of both constituent corporations;

(2) If the assets to be transferred equal more than fifty per cent of the assets of a transferring or acquiring state bank at the time of the transfer, the shareholders of the state bank by the affirmative vote or written consent of the holders of two-thirds, or such other proportion not less than a majority as the state bank's articles of incorporation provide, of the outstanding shares of each class of the state bank's stock;

(3) The shareholders of the other constituent bank, savings bank, or savings association as required by the applicable state or federal law;

(4) If the assets to be transferred equal more than fifty per cent of the assets of the acquiring state bank, the superintendent of financial institutions.

(B) In the case of a transfer of assets and liabilities for which the superintendent's approval is required under division (A)(4) of this section, the acquiring state bank shall file with the superintendent an application that includes all of the following:

(1) An officers' certification that the transaction has been approved by the directors and shareholders of each constituent corporation in accordance with the applicable state or federal law, articles of incorporation or association, code of regulations, or bylaws;

(2) A copy of the transfer agreement;

(3) Any other information the superintendent requires.

(C) The transfer agreement required under division (B)(2) of this section shall include all of the following:

(1) The names of the constituent corporations;

(2) The agreement of the named constituent corporations that specified assets and liabilities of one will be transferred to the other in exchange for specified consideration;

(3) Any changes to be made in the directors of officers of the acquiring state bank;

(4) Any amendments to the acquiring state bank's articles of incorporation;

(5) The terms of the transfer, how the transfer will be effected, and how any consideration provided for will be distributed to the transferring corporation or its shareholders.

(D) Within ten business days after receiving an application required under division (B) of this section, the superintendent shall determine whether to accept the application. If the transaction is with a bank, savings bank, or savings association doing business under authority granted by a regulatory authority other than the superintendent, the superintendent shall notify the regulatory authority that granted the authority under which the bank, savings bank, or savings association is doing business of the application and solicit that regulatory authority's comments. Within ninety days after accepting an application required under division (B) of this section, the superintendent shall approve or disapprove the application. In making that determination, the superintendent shall consider all of the following:

(1) Whether the transaction would result in a monopoly or would further any combination or conspiracy to monopolize or to attempt to monopolize the business of banking in any part of this state and any markets served by the acquiring bank;

(2) Whether the effect of the proposed transaction in any part of this state and any markets served by the acquiring bank may be to substantially lessen competition, tend to create a monopoly, or in any other manner restrain trade, unless the superintendent finds that the anticompetitive effects of the transaction would clearly be outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served;

(3) The financial and managerial resources and future prospects of the banks involved;

(4) The convenience and needs of the communities to be served;

(5) Whether, upon completion of the transaction, the acquiring state bank will meet the requirements of Chapters 1101. to 1127. of the Revised Code;

(6) The comments of any regulatory authority notified in accordance with division (D) of this section.

(E) The superintendent may condition approval of an application under division (D) of this section in any manner the superintendent considers appropriate.

(F) In the case of a transfer of assets and liabilities involving a state bank that is not the acquiring corporation and that will not continue operations after the transaction, the state bank shall, immediately upon the transfer of assets and liabilities being effective, provide the superintendent with the necessary dissolution certificates and affidavits for the superintendent to file the dissolution with the secretary of state.

(G) When a bank, savings bank, or savings association transfers its assets and liabilities to a state bank, the acquiring state bank shall be possessed of the rights, privileges, and powers of the transferor with respect to the transferred assets within the limits of the charter of the acquiring state bank.

Cite as R.C. § 1115.14

Effective Date: 05-21-1997

1115.15 Transferring assets and liabilities in an emergency.

Whenever an emergency, as defined by the superintendent of financial institutions, exists with regard to a state bank, national bank, savings bank, or savings association that warrants, in the opinion of the superintendent and of a majority of the members of the respective boards of directors of the constituent corporations concerned, an immediate transfer of assets and liabilities, the board of directors of a state bank may, by majority vote, transfer the assets and liabilities of the state bank or acquire the assets and liabilities of another state bank or a national bank, savings bank, or savings association without the vote or approval of the shareholders of each constituent corporation involved in the proposed transfer. No transfer pursuant to this section involving a state bank shall be made without the consent of the superintendent. Certified copies of all proceedings of its board of directors shall be filed with the superintendent by each constituent corporation involved in the transfer. A copy of the agreement between the constituent corporations shall accompany the copies of the proceedings of the boards of directors.

Cite as R.C. § 1115.15

Effective Date: 01-01-1997

1115.16, 1115.17 [Repealed].

Cite as R.C. § 1115.16, 1115.17

Effective Date: 01-01-1968

1115.18 Notice of consummation of reorganization.

Each state bank resulting from a consolidation or merger pursuant to this chapter, and each state bank that is an acquiring bank in a transfer of assets and liabilities made pursuant to this chapter, shall publish once, in a newspaper of general circulation in the county in which the principal office of each constituent corporation to the consolidation, merger, or transfer is located, the fact of consummation of the reorganization within two weeks after the effective date of the reorganization. The state bank shall file a copy of the publication in the office of the superintendent of financial institutions within thirty days after its publication.

Cite as R.C. § 1115.18

Effective Date: 01-01-1997

1115.19 Paying fair cash value of shares to dissenting shareholders.

Unless the articles of incorporation of the state bank otherwise provide, any shareholder of a state bank that has been consolidated or merged with, or whose assets have been transferred to, another state bank or a national bank, savings bank, or savings association pursuant to any provision of this chapter other than section 1115.15 of the Revised Code, who did not vote in favor of the consolidation, merger, or transfer, shall be paid the fair cash value, as of the day before the vote was taken authorizing the action, of the shares held, excluding from the fair cash value any appreciation or depreciation in consequence of the consolidation, merger, or transfer which entitled the shareholder to this relief. Section 1701.85 of the Revised Code shall govern with respect to the shareholder's rights and any limitations on those rights. Any shareholder who does not object and demand in writing the payment of the fair cash value of the shares in the manner and at the time provided in section 1701.85 of the Revised Code, shall be bound by the vote of the board of directors or the assenting shareholders of the state bank.

Cite as R.C. § 1115.19

Effective Date: 01-01-1997

1115.20 Protecting rights of creditors.

In any transfer, consolidation, or merger under this chapter, the rights of creditors shall be preserved unimpaired, and the constituent corporations shall be deemed to continue their separate existence if the continuation is necessary to preserve any creditor's rights.

Cite as R.C. § 1115.20

Effective Date: 01-01-1997

1115.21, 1115.22 [Repealed].

Cite as R.C. § 1115.21, 1115.22

Effective Date: 01-01-1968

1115.23 Interim banks.

(A) Any person, singly or jointly with others, may, with the approval of the superintendent of financial institutions, incorporate an interim bank for the purpose of facilitating the creation of a bank holding company, the acquisition of or transaction with an existing bank, savings association, or savings bank, or any other transaction the superintendent may approve. Prior to commencing business, an interim bank shall be a party to a reorganization with an existing bank, savings association, or savings bank pursuant to this chapter.

(B) The person or persons proposing to incorporate an interim bank under this section shall make application for approval of the proposed interim bank in the manner and form prescribed by the superintendent, which shall include delivering to the division of financial institutions the items required in divisions (B)(1) and (2) of section 1113.01 of the Revised Code.

(C) Approval of the interim bank pursuant to this section does not authorize the interim bank to commence business. Approval of the interim bank shall be specifically conditioned on approval of the subsequent reorganization. The approval of the interim bank becomes void, and the interim bank shall be dissolved, if the reorganization is not approved and consummated within one year after the approval of the interim bank, unless the superintendent grants one or more extensions in writing. If no extension is granted or upon the expiration of the last extension granted, the interim bank shall provide the superintendent with the necessary dissolution certificates and affidavits for the superintendent to file the dissolution with the secretary of state.

(D) The superintendent shall not disapprove an interim bank charter solely because the interim bank's paid-in capital and surplus do not aggregate more than five hundred dollars.

Cite as R.C. § 1115.23

Effective Date: 01-01-1997

1115.24 [Repealed].

Cite as R.C. § 1115.24

Effective Date: 01-01-1968

1115.25 Public hearing regarding fairness of terms and conditions of exchange of shares.

(A) If an agreement required by section 1115.11 or 1115.14 of the Revised Code provides for an exchange of the shares of one constituent corporation for shares of another constituent corporation or for an exchange of the shares of either or both constituent corporations for shares of a holding company, any party to the agreement or any individual or individuals representing at least ten per cent of the shares of a constituent corporation the shares of which will be exchanged may, any time prior to the consummation of the agreement, request in writing a public hearing regarding the fairness of the terms and conditions of the exchange. If the superintendent of financial institutions receives a written request for a public hearing, or if the superintendent determines that a public hearing is desirable, the superintendent or the superintendent's designee shall conduct the public hearing.

(B) The superintendent shall provide notice of the date, time, and place of the hearing by mail to the applicant. The superintendent also shall provide notice of the date, time, and place of the hearing by publishing once each week for two consecutive weeks prior to the hearing and by mail to each shareholder, at the shareholder's address of record, to whom it is proposed securities be issued wholly or partially in exchange for outstanding securities as part of the reorganization, and every other shareholder of record, at the shareholder's address of record, of any constituent corporation of the reorganization.

(C) Only the following persons have the right to appear at the hearing to present statements and witnesses on the fairness of the terms and conditions of the proposed exchange of shares:

(1) Representatives of the applicant and each constituent corporation of the reorganization;

(2) All persons who are shareholders of record of any constituent corporation of the reorganization, and all other persons to whom it is proposed securities be issued in the reorganization.

(D) When this section requires notice to persons other than the applicant, the superintendent may require the applicant to provide the notice on the superintendent's behalf and to provide the superintendent with evidence, in a form satisfactory to the superintendent, the notice has been given. The superintendent may require the applicant to provide the stenographic record when a hearing is held pursuant to this section.

Cite as R.C. § 1115.25

Effective Date: 01-01-1997

1115.26 [Repealed].

Cite as R.C. § 1115.26

Effective Date: 01-01-1968

1115.27 Merging with affiliate.

(A) A bank may merge with any of its affiliates with the approval of all of the following:

(1) The directors of all constituent corporations to the merger;

(2) The shareholders of each constituent bank by the affirmative vote or written consent of the holders of two-thirds, or any other proportion not less than a majority as the bank's articles of incorporation provide, of the outstanding shares of each class of the bank's stock;

(3) The shareholders of each other constituent to the merger as required by the applicable state or federal law;

(4) The superintendent of financial institutions.

(B) The bank that will be the surviving bank in the merger shall file with the superintendent an application for the superintendent's approval that includes all of the following:

(1) An officers' certification that the transaction has been approved by the directors and shareholders of each constituent corporation in accordance with the applicable state or federal law, articles of incorporation or association, code of regulations, or bylaws;

(2) A copy of the merger agreement;

(3) Any other information the superintendent requires.

(C) The merger agreement required under division (B)(2) of this section shall include all of the following:

(1) The names of the constituent corporations;

(2) The agreement of the other named constituent corporations to merge with or into one specified bank;

(3) Subject to the limitations set forth in section 1103.07 of the Revised Code, the name of the bank surviving from the merger;

(4) The place in this state where the surviving bank's principal place of business is to be located;

(5) Any amendment to the surviving bank's articles of incorporation;

(6) The names and addresses of the directors of the surviving bank;

(7) The terms of the merger, how it will be effected, and how any consideration provided for will be distributed to the shareholders of the constituent corporations.

(D) Within ten business days after receiving an application required under division (B) of this section, the superintendent shall determine whether to accept the application. Within ninety days after accepting an application required under division (B) of this section, the superintendent shall approve or disapprove the application. In making that determination, the superintendent shall consider all of the following:

(1) The financial and managerial resources and future prospects of the surviving bank;

(2) The convenience and needs of the communities to be served;

(3) Whether, upon completion of the merger, the surviving bank will meet the requirements of Chapters 1101. to 1127. of the Revised Code;

(4) Whether any of the constituents to the merger are subject to limitations that are inconsistent with the merger.

(E) The superintendent may condition approval of an application under division (D) of this section in any manner the superintendent considers appropriate.

(F) Before consummating a merger authorized under division (A) of this section, the bank that is to be the surviving bank of the merger shall deliver to the superintendent a certificate of merger that satisfies the requirements of section 1701.81 of the Revised Code. The superintendent shall file the certificate of merger and a certified copy of the superintendent's approval of the merger with the secretary of state.

(G) The directors and other officers named in the agreement of merger shall serve until the date fixed in the agreement or provided in the surviving bank's code of regulations or by statute for the next annual meeting.

(H) When a merger authorized by division (A) of this section becomes effective, the existence of each of the constituent corporations ceases as a separate entity, but continues in the surviving bank, within the limits of the charter of the surviving bank and subject to section 1115.20 of the Revised Code. Without further act or deed and within the limits of the charter of the surviving bank, the surviving bank has all assets and property, the rights, privileges, immunities, powers, franchises, and authority, and all obligations and trusts of each party to the merger and the duties and liabilities connected with them. The surviving bank shall perform every trust or relation it has in the same manner as if it had itself originally assumed the trust or relation and the obligations and liabilities connected with it.

Cite as R.C. § 1115.27

Effective Date: 01-01-1997

1115.30 [Repealed].

Cite as R.C. § 1115.30

Effective Date: 01-01-1968

1115.99 [Repealed].

Cite as R.C. § 1115.99

Effective Date: 01-01-1997