§215a Merger of National Banks or State Banks Into National Banks

Summary

Banks can join together by merging into an existing national bank in the same State if the Comptroller approves. The merger must be written and approved by a majority of each participating bank’s board. Shareholders must also approve by at least two-thirds of the bank’s outstanding capital stock (or a larger share if State law requires). Directors must call a meeting and give notice by publishing the meeting time, place, and purpose for four consecutive weeks in a local newspaper and by sending certified or registered mail at least ten days before the meeting, unless shareholders waive notice or the Comptroller allows a waiver in an emergency. The merger plan must say how much capital stock the receiving bank will have after the merger (at least the amount required by law), how much stock or cash shareholders will get, and must make the receiving bank responsible for all the merged bank’s debts. Any shareholder who voted against the merger or gave written notice of dissent can ask for cash for their shares instead of taking new stock. They must request payment in writing and turn in their stock certificates no later than thirty days after the merger is finished. Share value is set as of the merger date by three appraisers: one picked by the majority cash-entitled shareholders, one by the receiving bank’s directors, and a third chosen by those two. Two appraisers’ agreement controls. A shareholder who objects has five days to ask the Comptroller for a final reappraisal. If appraisers aren’t chosen or fail within ninety days, the Comptroller will order an appraisal and the receiving bank pays the Comptroller’s costs and the resulting value. The receiving bank must promptly pay dissenting shareholders, sell the shares it would have issued at public auction (it may bid), and resell any purchased shares within thirty days; any auction excess over what was paid to dissenters goes to those dissenters. The merging banks’ corporate existence, property, and fiduciary roles transfer to the receiving bank automatically, and courts can remove the receiving bank as a fiduciary in the same way as before, but not in a way that unfairly targets national banks. The receiving bank may issue stock as the merger agreement allows, without giving existing shareholders preemptive rights.