House Bill 1046

AN ACT TO AMEND SECTION 81-7-7, MISSISSIPPI CODE OF 1972, TO AUTHORIZE OUT-OF-STATE BANKS THAT DO NOT ALREADY MAINTAIN A BRANCH IN MISSISSIPPI TO ESTABLISH AND MAINTAIN A BRANCH IN MISSISSIPPI THROUGH THE ACQUISITION OF A BRANCH BANK OR BRANCH OFFICE OR THE ESTABLISHMENT OF A BRANCH BANK DE NOVO; TO AMEND SECTION 81-7-23, MISSISSIPPI CODE OF 1972, TO CONFORM TO THE PRECEDING SECTION; TO BRING FORWARD SECTION 81-7-8, MISSISSIPPI CODE OF 1972, WHICH PROVIDES CERTAIN RESTRICTIONS ON THE ESTABLISHMENT OF BRANCH BANKS; AND FOR RELATED PURPOSES.

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

SECTION 1. Section 81-7-7, Mississippi Code of 1972, is amended as follows:

81-7-7. (1) For purposes of this section and Section 81-7-8, "branch bank de novo" or "branching de novo" refers to a branch established by the opening of a new branch bank and includes a branch bank or branch office acquired from another bank without acquiring substantially all of the assets of the other bank.

(2) Subject to the restrictions contained in Section 81-7-8, a bank may establish:

(a) Branch banks de novo * * *, subject to compliance with the procedures set forth in Section 81-7-1; and

(b) Branch banks by the merger or consolidation with, or the purchase of all or substantially all of the assets of, any other bank located in Mississippi * * *.

* * *

Compliance with the procedures set forth in Section 81-7-1 is not required to establish branch banks under paragraph (b) of this subsection.

* * *

(3) The bank resulting from a merger, consolidation or purchase may retain and operate as branch banks any of the parent offices, branch banks or branch offices of the banks participating in the transaction.

* * *

(4) An out-of-state bank that does not already maintain a branch in Mississippi and that meets the requirements of this title may establish and maintain a branch in Mississippi through the acquisition of a branch bank or branch office or the establishment of a branch bank de novo, subject to compliance with the procedures set forth in Section 81-7-1 for establishment of a branch bank de novo. However, no branch of an out-of-state bank may be established through the acquisition of a branch bank or branch office or the establishment of a branch bank de novo unless the laws of the home state of the out-of-state bank permit Mississippi banks to establish and maintain branches in that state through the acquisition of a branch bank or branch office or the establishment of a branch bank de novo under substantially the same terms and conditions as set forth in this title.

SECTION 2. Section 81-7-23, Mississippi Code of 1972, is amended as follows:

81-7-23. The provisions of this chapter apply to branching within the State of Mississippi by:

(a) Banks chartered by the State of Mississippi or national banks having their headquarters in the State of Mississippi; * * *

(b) Out-of-state banks which maintain a branch in the State of Mississippi subsequent to an interstate branching transaction pursuant to Chapter 23, Title 81, Mississippi Code of 1972, known as the "Interstate Bank Branching Act"; and

(c) Out-of-state banks that establish a branch in Mississippi through the acquisition of a branch bank or branch office or the establishment of a branch bank de novo.

SECTION 3. Section 81-7-8, Mississippi Code of 1972, is brought forward as follows:

81-7-8. (1) A bank chartered after October 16, 1985, may neither establish a branch by merger, consolidation or purchase as provided in Section 81-7-7(2)(b) nor become a branch as the result of such a transaction, unless such bank has been in continuous operation as a state or federally chartered bank, savings association or savings bank for at least its previous five (5) years of existence. For purposes of the five-year requirement, a bank which has been involved in an interim bank merger shall be deemed to have been in operation from the date it began operation under the original charter. "Interim bank merger" means the technique by which a bank holding company obtains a new bank charter solely for the purpose of merging an existing bank into the bank for which the charter is sought or solely for the purpose of merging the bank for which the charter is sought into an existing bank.

(2) A bank is prohibited from establishing a branch by merger, consolidation or purchase, as provided for in Section 81-7-7(2)(b), if upon such merger, consolidation or purchase the surviving bank and all of its branch banks and branch offices located in Mississippi would have combined deposits which exceed twenty-five percent (25%) of the total deposits of all offices located in Mississippi of commercial banks, savings banks, savings and loan associations and credit unions. Determination of the percentage of total deposit concentration limited by this subsection shall be made based on data contained in the most recent call reports or reports of condition furnished immediately prior to the merger, consolidation or purchase to the appropriate regulatory officials by the banks involved in the merger, consolidation or purchase. "Appropriate regulatory officials" means, for any national bank in Mississippi, the Comptroller of the Currency of the United States or the Board of Governors of the Federal Reserve System of the United States; "appropriate regulatory officials" means, for any state-chartered bank in Mississippi, the Commissioner of Banking and Consumer Finance. In determining total deposits of all offices located in Mississippi of commercial banks, savings banks, savings and loan associations and credit unions, data shall be used as furnished by the Department of Banking and Consumer Finance as of the most recent calendar quarter for which complete data are available. For the purpose of furnishing such data, the department shall obtain from appropriate federal regulatory agencies the most recent data available regarding the deposits of federally chartered institutions. For purposes of this subsection and subsection (4) of this section, "deposits" mean all individual, partnership, corporate and government deposits (including, without limitation, all demand, savings, time, certificates of deposit and other similar depository accounts of individuals, partnerships, corporations and governmental bodies).

(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.

(4) For branching purposes, a parent bank is considered to be located where it was domiciled on June 30, 1986. For any bank opening for business after that date, a parent bank shall be considered for branching purposes to be located where it is first domiciled. Upon a merger, consolidation or purchase as provided for in Section 81-7-7(2)(b), the parent bank for branching purposes of the surviving bank shall be considered to be at the location of the parent bank for branching purposes of the bank involved in such transaction which had the greater amount of deposits based on data contained in the most recent call reports or reports of condition furnished immediately prior to the merger, consolidation or purchase to the appropriate regulatory officials referred to in subsection (2) of this section.

(5) In order for a parent bank to establish a branch bank through de novo branching, merger, consolidation or purchase after June 30, 1986, the parent bank shall have prior to the approval of any such branch application, and shall be expected to maintain, primary capital and total capital ratios equal to or above the minimum acceptable ratios established by the federal bank regulatory agency which primarily regulates and examines such bank. The components of capital and the method of computing the capital ratios shall be those defined by the applicable federal bank regulatory agency.

SECTION 4. This act shall take effect and be in force from and after its passage.