MISSISSIPPI LEGISLATURE

2000 Regular Session

To: Business and Financial Institutions

By: Senator(s) Thames

AN ACT TO AMEND SECTIONS 81-8-1, 81-8-3 AND 81-23-9, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR A DEFINITION OF BANKER'S BANK; TO REVISE THE DEFINITION OF THE TERM "PRINCIPAL PLACE OF BUSINESS"; TO ALLOW OUT-OF-STATE BANK HOLDING COMPANIES TO ACQUIRE BANKER'S BANKS THAT HAVE BEEN IN EXISTENCE LESS THAN FIVE YEARS; TO ALLOW INTERSTATE BRANCHING TRANSACTIONS INVOLVING BANKER'S BANKS; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Section 81-8-1, Mississippi Code of 1972, is amended as follows:

81-8-1. For the purposes of this chapter, the following words shall have the following meanings:

(a) The term "acquire" means:

(i) The merger or consolidation of one bank holding company with another;

(ii) The acquisition by a bank holding company of the direct or indirect ownership or control of voting shares of a bank or of another bank holding company if, after such acquisition, such bank holding company will directly or indirectly own or control more than five percent (5%) of any class of voting shares of such bank holding company or bank;

(iii) The direct or indirect acquisition by a bank holding company of all or substantially all of the assets of a bank or of another bank holding company; or

(iv) Any other action that would result in the direct or indirect control by a bank holding company of a bank or of another bank holding company.

(b) "Bank" means any "insured bank" as such term is defined in Section 3(h) of the Federal Deposit Insurance Act, 12 USCS Section 1813(h), or any institution eligible to become an insured bank as such term is defined therein, which, in either event:

(i) Accepts deposits that the depositor has a legal right to withdraw on demand; and

(ii) Engages in the business of making commercial loans.

(c) "Banker's bank" has the same meaning as the term is defined in 12 USCS Section 24.

(d) "Banking office" means any bank, branch of a bank, or any other office at which a bank accepts deposits; however, the term "banking office" shall not include:

(i) Unmanned automatic teller machines, point of sale terminals, or other similar unmanned electronic banking facilities at which deposits may be accepted;

(ii) Offices located outside the United States; or

(iii) Loan production offices, representative offices or other offices at which deposits are not accepted.

(e) "Bank holding company" means any company which is a bank holding company under the federal Bank Holding Company Act of 1956, as amended, 12 USCS Section 1841(a)(1).

(f) "Commissioner" means the Commissioner of Banking and Consumer Finance as provided for in Section 81-1-61.

(g) "Control" has the meaning set forth in Section 2(a)(2) of the federal Bank Holding Company Act of 1956, as amended, 12 USCS Section 1841(a)(2).

(h) "Department" means the Mississippi Department of Banking and Consumer Finance established in Section 81-1-59.

(i) "Deposits" means all demand, time and savings deposits, without regard to the location of the depositor; provided, however, that "deposits" shall not include any deposits by banks. For purposes of this chapter, determinations of deposits shall be made by reference to regulatory reports of condition or similar reports made by or to state and federal regulatory agencies.

(j) "Mississippi bank" means a bank organized under the laws of this state, or a bank organized under the laws of the United States which has its main office in Mississippi.

(k) "Mississippi bank holding company" means a bank holding company in which the total Mississippi deposits of all bank subsidiaries of such company exceed the total deposits of such bank subsidiaries in any other state.

(l) The "principal place of business" of a bank holding company is the state in which the total deposits of the bank subsidiaries of the bank holding company are the largest, or the state designated by the bank holding company.

(m) "Out-of-state bank holding company" means a bank holding company other than a Mississippi bank holding company.

(n) "Subsidiary" means that which is set forth in Section 2(d) of the federal Bank Holding Company Act of 1956, as amended, 12 USCS Section 1841(d).

SECTION 2. Section 81-8-3, Mississippi Code of 1972, is amended as follows:

81-8-3. (1) An out-of-state bank holding company may establish a bank in Mississippi only by acquiring a Mississippi bank or Mississippi bank holding company upon approval by the commissioner, which approval:

(a) Determines that the Mississippi bank sought to be acquired has been in existence and continuously operating for more than five (5) years or that the Mississippi bank subsidiary of the Mississippi bank holding company sought to be acquired has been in existence and continuously operating for more than five (5) years;

(b) Determines that the acquisition will not result in a violation of Sections 81-5-28, 81-7-7, 81-7-8 and 81-7-19.

(c) Determines that a copy of the completed application or applications which are filed with the appropriate federal bank regulatory authority seeking approval of the acquisition, and a consent to service of process (all on such form or forms as the commissioner by regulation may require) shall have been filed with the commissioner for at least sixty (60) days, and notice of such acquisition, specifying the name of the out-of-state bank holding company, the name of the Mississippi bank or Mississippi bank holding company sought to be acquired and a brief description of the transaction shall have been published once in a newspaper of general circulation in each county in which the Mississippi bank or the subsidiary of the Mississippi bank holding company has banking offices.

(2) Nothing in this section shall prohibit the acquisition by an out-of-state bank holding company of all or substantially all of the shares of (a) a bank organized solely for the purpose of facilitating the acquisition of a bank which has been in existence and continuously operated as a bank for more than five (5) years, or (b) a banker's bank that has been in existence less than five (5) years, if the acquisition has otherwise been approved pursuant to this section.

(3) Notwithstanding the foregoing or any other provision of this chapter to the contrary, a Mississippi bank may enter into an interstate branching transaction as defined by and pursuant to Chapter 23, Title 81, Mississippi Code of 1972, known as the Interstate Bank Branching Act.

SECTION 3. Section 81-23-9, Mississippi Code of 1972, is amended as follows:

81-23-9. (1) An interstate branching transaction shall not be permitted under this chapter if, upon consummation of such transaction, the resulting bank would control in excess of twenty-five percent (25%) of the total deposits of all offices located in the State of Mississippi of commercial banks, savings banks, savings and loan associations and credit unions in the State of Mississippi, as determined according to Section 81-7-8.

(2) An interstate branching transaction resulting in:

(a) The acquisition by an out-of-state bank of a Mississippi bank,

(b) The acquisition of all or substantially all of the assets (including all or substantially all of the branches) of a Mississippi bank, or

(c) The merger or consolidation of a Mississippi bank with or into another bank shall not be permitted unless such Mississippi bank has been in continuous operation as a state or federally chartered bank, savings bank or savings association for at least its previous five (5) years of existence, as determined according to Section 81-7-8, or is defined as a banker's bank according to Section 81-8-1.

(3) In the sale of any insolvent bank made pursuant to the provisions of Chapter 9, Title 81, Mississippi Code of 1972, or pursuant to federal banking laws, the restrictions contained in subsections (1) and (2) of this section shall not apply to prevent the acquisition of such insolvent bank by another bank; and, additionally, neither restriction shall apply to prohibit any purchasing bank from retaining any established branches of the insolvent bank which the purchasing bank would otherwise be prohibited from establishing.

SECTION 4. This act shall take effect and be in force from and after July 1, 2000.