Drawing of State Library BuildingConnecticut State Library Home

Connecticut Public Acts 1996

Previous Page TOC Next Page Public Acts Listings


Senate Bill No. 312

PUBLIC ACT NO. 96-20

AN ACT CONCERNING THE MERGER OF MUTUAL AND CAPITAL STOCK BANKS.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 36a-125 of the general statutes, as amended by section 10 of public act 95-155, is repealed and the following is substituted in lieu thereof:

(a) Except as provided in subsection (i) of this section, any two or more Connecticut banks may, with the approval of the commissioner, merge or consolidate into a single Connecticut bank. As used in this section, a "constituent temporary bank" means a constituent Connecticut bank that has a temporary certificate of authority but does not have a final certificate of authority to commence business, and a "constituent final bank" means a constituent Connecticut bank that has a final certificate of authority to commence business. Any plan of merger or consolidation approved by the commissioner shall specify whether the resulting bank shall operate as a bank and trust company, or a capital stock or mutual savings bank or savings and loan association.

(b) The governing board of each constituent final bank and the organizers of each constituent temporary bank proposing to merge or consolidate shall enter into an agreement, approved and executed by a majority of the governing board or all of the organizers, as the case may be, of each bank, prescribing the terms and conditions of such proposed merger or consolidation. Such agreement shall include the proposed certificate of incorporation of the resulting bank and shall state the name and corporate form of the resulting bank, the town in which its main office is located, the minimum and maximum number of directors and any other details necessary to effectuate such proposed merger or consolidation. In the case of a capital stock resulting bank, the agreement shall [also] include the amount of capital stock with which the resulting bank shall commence business, the number of shares into which the capital stock is to be divided and the manner of converting the shares of the capital stock of the constituent banks into shares of the capital stock of the resulting bank and, if any shares of the capital stock of any of the constituent banks are not to be converted solely into shares of the capital stock of the resulting bank, the amount of cash, property or other securities of the resulting bank or the shares or other securities of any other corporation which the holders of such shares are to receive in exchange for or upon the conversion of such shares, which cash, property or other securities of the resulting bank, or shares or other securities of any other corporation, may be in addition to or in lieu of the shares of the resulting bank. IN THE CASE OF A MERGER OR CONSOLIDATION INVOLVING A MUTUAL CONSTITUENT BANK AND A CAPITAL STOCK CONSTITUENT BANK, IF THE RESULTING BANK IS TO BE A MUTUAL BANK, THE AGREEMENT SHALL INCLUDE THE AMOUNT OF CASH OR PROPERTY OF THE RESULTING MUTUAL BANK WHICH THE HOLDERS OF THE SHARES OF THE CAPITAL STOCK CONSTITUENT BANK ARE TO RECEIVE IN EXCHANGE FOR SUCH SHARES.

(c) Such agreement may provide for the effective date of the proposed merger or consolidation, which shall not be earlier than the filing of the agreement and the commissioner's approval in the office of the Secretary of the State. If the agreement does not provide an effective date, the merger or consolidation shall become effective on the first business day following the filing of the agreement and approval in the office of the Secretary of the State. In the case of capital stock constituent banks, the merger or consolidation agreement may provide that no new certificates of stock need be issued to holders of stock of the constituent bank which continues its corporate existence and that the certificates of stock of any other constituent bank may be deemed to be the certificates of stock of the resulting bank or any other corporation, provided that holders of certificates of stock of such other constituent bank shall be entitled to exchange their certificates of stock for certificates of stock of the resulting bank or such other corporation.

(d) In addition to the vote of the governing board or organizers as required by subsection (b) of this section, in the case of a capital stock constituent final bank, the merger or consolidation shall be approved by the affirmative vote of the holders of at least two-thirds of the issued and outstanding shares of each class of the capital stock. Such vote shall be taken at separate meetings of the shareholders called for the purpose of considering the proposed merger or consolidation, and not less than ten days' notice of the time, place and purpose of such meeting shall be mailed to the last-known address of each shareholder. Any person entitled to notice under this subsection may waive such notice in accordance with section 33-308. The vote may approve the merger or consolidation either upon the terms of the agreement as approved and executed by the governing board or organizers or with such additions or amendments as may be so approved at such shareholders' or incorporators' meetings of each of the constituent banks.

(e) In the case of A MERGER OR CONSOLIDATION INVOLVING AT LEAST ONE mutual constituent [banks] BANK, after adoption of the merger or consolidation agreement, notice thereof shall be published once each week for two consecutive weeks in one or more newspapers having a circulation in the town in which the main office of each SUCH mutual constituent bank is located. Copies of the record of the meetings adopting the agreement of merger or consolidation, and setting forth the agreement in full, attested by the secretary and president of the respective meetings, shall be certified to and filed in the office of each SUCH mutual constituent bank, there to remain, subject to public inspection, for fifteen days.

(f) Upon application by the constituent banks, and upon receipt of a copy of the agreement of merger or consolidation, certified by the secretaries of the respective constituent final banks and certified by the agents for the organizers of the respective constituent temporary banks as having been duly approved in accordance with [subsection] SUBSECTIONS [4m(b) [0m AND (d) of this section, and of notification from the constituent banks that all approvals required under federal law, including approvals needed for insurance by the Federal Deposit Insurance Corporation or its successor agency, have been obtained and that any waiting period prescribed by federal law has expired, the commissioner shall determine whether such merger or consolidation will promote public convenience, whether benefits to the public clearly outweigh possible adverse effects, including, but not limited to, an undue concentration of resources and decreased or unfair competition, and whether the terms thereof are reasonable and in accordance with law and sound public policy. The commissioner, if the commissioner so determines, shall approve the merger or consolidation. The commissioner shall not approve such merger or consolidation: (1) If it involves the acquisition of a Connecticut bank that has not been in existence and continuously operating for at least five years, unless the commissioner waives this requirement; (2) if the resulting bank including all insured depository institutions which are affiliates of the resulting bank, upon consummation of the merger or consolidation, would control thirty per cent or more of the total amount of deposits of insured depository institutions in this state, unless the commissioner permits a greater percentage of such deposits; and (3) unless the commissioner considers whether: (A) The investment and lending policies of the constituent banks, or the proposed investment and lending policies of the resulting bank, are consistent with safe and sound banking practices and will benefit the economy of this state; (B) the services or proposed services of the resulting bank are consistent with safe and sound banking practices and will benefit the economy of this state; (C) the constituent banks have sufficient capital to ensure, and agree to ensure, that the resulting bank will comply with applicable minimum capital requirements; (D) the constituent banks have sufficient managerial resources to operate the resulting bank in a safe and sound manner; and (E) the proposed merger or consolidation will not substantially lessen competition in the banking industry of this state. The commissioner shall not approve such merger or consolidation unless the commissioner makes the findings required by section 36a-34 AS AMENDED and, in the case of a merger or consolidation of a mutual banking institution, determines that the interests of depositors are protected or served by the agreement of merger or consolidation. After approval of the merger or consolidation by the commissioner, a copy of the agreement and a copy of the commissioner's approval shall be filed in the office of the Secretary of the State.

(g) Upon the completion of a merger or consolidation (1) the constituent banks shall become a Connecticut bank by the name provided in the certificate of incorporation of the resulting bank; (2) the corporate existence of the constituent banks shall be continued by and in the resulting bank; (3) the resulting bank shall possess all the rights, privileges and franchises of each of the constituent banks including the authority to exercise fiduciary powers without further express authority of the commissioner, except that the resulting bank shall be empowered to exercise only those powers that are provided by the laws of this state to the resulting bank and trust company, savings bank or savings and loan association, as the case may be; (4) the entire assets, business, good will and franchises of each of the constituent banks shall be vested in the resulting bank without any deed or transfer, provided the constituent banks may execute such deeds or instruments of conveyance as may be convenient to confirm the same; (5) the resulting bank shall assume and be liable for all debts, accounts, undertakings, contractual obligations and liabilities of the constituent banks and shall exercise and be subject to all the duties, relations, obligations, trusts and liabilities of each of the constituent banks, whether as debtor, depository, registrar, transfer agent, executor, administrator, trustee or otherwise, and shall be liable to pay and discharge all such debts and liabilities, to perform all such duties and to administer all such trusts in the same manner and to the same extent as if the resulting bank had itself incurred the obligation or liability or assumed the duty, relation or trust; (6) all rights of creditors and all liens upon the property of any of such constituent banks shall be preserved unimpaired; and (7) the resulting bank shall be entitled to receive, accept, collect, hold and enjoy any and all gifts, bequests, devises, conveyances, trusts and appointments in favor of or in the name of any of such constituent banks whether made or created to take effect prior to or after such merger or consolidation, and the same shall inure to and vest in such resulting bank. No suit, action or other proceeding pending at the time of the merger or consolidation before any court or tribunal in which any of such constituent banks is a party shall be abated or discontinued because of such merger or consolidation but may be continued and prosecuted to final effect by or against the resulting bank. The resulting bank shall have the right to use the name of any of the constituent banks whenever it can do any act or discharge any duty or obligation or endorse any right under such name more conveniently or with greater advantage to itself or to any person to whom it holds any relation of trust or owes any duty under any contract or conveyance, and no other corporation shall take or use the name of any of such constituent banks.

(h) Upon the effectiveness of the agreement of merger or consolidation, the shareholders, if any, of the constituent banks, except to the extent that they have received cash, property or other securities of the resulting bank or shares or other securities of any other corporation in exchange for or upon conversion of their shares, shall be shareholders of [the] A CAPITAL STOCK resulting bank. Unless such agreement otherwise provides, the resulting bank may require each shareholder to surrender such shareholder's certificates of stock in the constituent bank and in that event no shareholder, until such surrender of that shareholder's certificates, shall be entitled to receive a certificate of stock of the resulting bank or to vote thereon or to collect dividends declared thereon, or to receive cash, property or other securities of the resulting bank, or shares or other securities of any other corporation. Any shareholder of any such constituent bank who, on or before the date of such meeting of shareholders of the constituent bank of which that shareholder holds shares, gave written notice to the secretary of the constituent bank of objection thereto may, provided none of that shareholder's shares shall have been voted in favor of the merger or consolidation, require the constituent bank to purchase that shareholder's shares at fair value by delivering to the secretary of such constituent bank a demand to that effect in writing within ten days after the date of such meeting. Any such demand shall comply with the requirements of section 33-374 and, after the delivery of such demand, it shall be deemed for all purposes to have been delivered pursuant to section 33-374, and the effect of such demand and the rights and obligations of the objecting shareholders and the bank shall be determined in accordance with section 33-374. The stock of [the] A CAPITAL STOCK resulting bank up to an amount of the combined stock of the constituent banks shall be exempt from any franchise tax.

(i) A mutual savings bank or a mutual savings and loan association and a capital stock bank shall not merge or consolidate IF THE RESULTING BANK IS TO BE A CAPITAL STOCK BANK unless prior to or as part of such merger or consolidation, the mutual savings bank or mutual savings and loan association first converts to a capital stock bank in accordance with section 36a-136, provided the commissioner may waive any of the provisions of section 36a-136 if the commissioner certifies in writing that the protection of depositors and other creditors of one of the merging or consolidating banks or associations requires that the merger or consolidation proceed without delay. NO SUCH CONVERSION SHALL BE REQUIRED IF THE RESULTING BANK IS TO BE A MUTUAL SAVINGS BANK OR A MUTUAL SAVINGS AND LOAN ASSOCIATION.

Sec. 2. This act shall take effect from its passage.

Approved April 29, 1996. Effective April 29, 1996.

[footer.htm]