A. The board of directors of each merging state bank shall, by a majority of the entire board, approve a merger agreement which shall contain:

(1) a statement or recital that the agreement is subject to approval by the director of the financial institutions division and by the stockholders of each merging bank;

(2) the name of each merging bank and location of each office;

(3) with respect to the resulting bank:

(a) the name and location of the principal and the other offices;

(b) the name and residence of each director to serve until the next annual meeting of the stockholders;

(c) the name and residence of each officer;

(d) the amount of capital, the number of shares and the par value of each share;

(e) the amount, terms and preferences if preferred stock is to be issued; and

(f) the amendments to its charter and bylaws;

(4) provisions governing:

(a) the manner of converting the share of the merging banks into shares of the resulting state bank; and

(b) the manner of disposing of the shares of the resulting state bank not taken by the dissenting stockholders of each merging bank; and

(5) such other provisions as the director of the financial institutions division may require to enable him to discharge his duties with respect to the merger.

B. After approval by the board of directors of each merging state bank, the merger agreement shall be submitted to the director of the financial institutions division for approval, together with certified copies of the authorizing resolutions of each board of directors showing approval by a majority of the entire board of each merging state bank and evidence of proper action by the board of directors of any merging national bank.

C. After receipt by the director of the financial institutions division of the papers specified in Subsection A, the director of the financial institutions division shall approve or disapprove the merger agreement. The director of the financial institutions division shall approve the agreement if he finds that:

(1) the resulting state bank meets the requirements as to the formation of a new state bank;

(2) the agreement provides an adequate capital structure including surplus in relation to the deposit liabilities of the resulting state bank and its other activities which are to continue or are to be undertaken;

(3) the agreement is fair; and

(4) the merger is not contrary to the public interest.

D. If the director of the financial institutions division disapproves an agreement, the objections shall be stated in writing and the merging banks shall be given an opportunity to amend the merger agreement to obviate such objections.

History: 1941 Comp., § 50-1904, enacted by Laws 1951, ch. 37, § 4; 1953 Comp., § 48-13-4; Laws 1977, ch. 245, § 29.

Am. Jur. 2d, A.L.R. and C.J.S. references. — 10 Am. Jur. 2d Banks § 27.

Character as holder in due course of bank which takes over assets and assumes liabilities of another bank, 76 A.L.R. 1329.

Liability of guarantor of or surety for bank deposit as affected by reorganization, merger, or consolidation of bank, 78 A.L.R. 381.

Novation where bank transfers its assets to another bank which assumes its obligation, 79 A.L.R. 82.

9 C.J.S. Banks and Banking § 128.