Law:Division 1.5. Depository Corporations--sale, Merger, And Conversion (California)

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Contents

Chapter 1. General Provisions

Article 1. Short Title, Construction, And Severability

Ca Codes (fin:4800-4803) Financial Code Section 4800-4803



4800. This division shall be known and may be cited as the "Depository Corporation Sale, Merger, and Conversion Law."


4801. In this division, unless otherwise expressly provided: (a) A reference to a statute or to a regulation includes the statute or regulation, as amended, whether before or after the effective date of this division, as well as any new statute or regulation substituted for the statute or regulation after the effective date of this division. (b) A reference to a governmental agency or to a public officer includes any governmental agency or public officer which succeeds after the effective date of this division to substantially the same functions as those performed by the governmental agency or public officer on the effective date of this division.


4802. If any provision of this division or the application thereof to any person or circumstances is held invalid, illegal, or unenforceable, such invalidity, illegality, or unenforceability shall not affect other provisions or applications of this division which can be given effect without the invalid, illegal, or unenforceable provision or application, and, to this end, the provisions of this division are declared to be severable.


4803. If and to the extent that any provision of this division is preempted by federal law, the provision does not apply and shall not be enforced.


Article 2. Definitions

Ca Codes (fin:4805.01-4805.18) Financial Code Section 4805.01-4805.18



4805.01. Subject to additional definitions contained in this division that are applicable to specific provisions of this division and unless the context otherwise requires: (a) The definitions in this article apply throughout this division. (b) The definitions in Chapter 1 (commencing with Section 99) of Division 1 and in Section 1700 apply throughout this division. For this purpose, "this division," as used in Sections 123 and 124, means: (1) In the case of a California state bank, Division 1 (commencing with Section 99) and this division. (2) In the case of a California state savings association, this division and Division 2 (commencing with Section 5000).


4805.02. (a) In this division, "bank" means a commercial bank or trust company (other than an industrial loan company authorized to engage in trust business). "Bank" does not include an industrial loan company. (b) Notwithstanding subdivision (a), "foreign (other nation) bank" has the meaning set forth in Section 139.4(b)(1).


4805.03. "California" means: (a) When used with respect to a savings association, in the case of a state savings association, a savings association that is organized under the laws of this state and, in the case of a federal savings association, a savings association that maintains its head office in this state. (b) When used with respect to an industrial loan company, an industrial loan company that is organized under the laws of this state. (c) When used with respect to an office of a savings association or of an industrial loan company, an office located in this state. (d) When used with respect to any corporation other than a depository corporation, a corporation organized under the laws of this state.


4805.04. "California federally licensed foreign (other nation) bank," when used with respect to a sale or merger, means a foreign (other nation) bank that is authorized under federal law to maintain a federal agency or federal branch in this state immediately before the effective time of the sale or merger in case it is the selling or disappearing corporation or at the effective time of the sale or merger in case it is the purchasing or surviving corporation.


4805.05. "California state-licensed foreign (other nation) bank," when used with respect to a sale or merger, means a foreign (other nation) bank that is licensed under Article 3 (commencing with Section 1750) of Chapter 13.5 of Division 1 to maintain an agency or branch office in this state immediately before the effective time of the sale or merger in case it is the selling or disappearing corporation or at the effective time of the sale or merger in case it is the purchasing or surviving corporation.


4805.055. "Commissioner" means the Commissioner of Financial Institutions.

4805.06. "Depository corporation" means a state or federal depository corporation.


4805.07. "Federal depository corporation" means a national banking association or a federal savings association.


4805.08. "Federal savings association" means a savings association or savings bank organized pursuant to Section 5 of the Home Owners' Loan Act (12 U.S.C. Sec. 1464).


4805.09. "Foreign" or "foreign (other state)" means: (a) When used with respect to a savings association, in the case of a state savings association, a savings association that is organized under the laws of any state of the United States other than this state and, in the case of a federal savings association, a savings association that maintains its head office in any state of the United States other than this state. (b) When used with respect to an industrial loan company, an industrial loan company that is organized under the laws of any state of the United States other than this state. (c) When used with respect to an office of a savings association or of an industrial loan company, an office located in any state of the United States other than this state. (d) When used with respect to any corporation other than a depository corporation, a corporation organized under the laws of any state of the United States other than this state.


4805.10. In this division, "industrial loan company" means an industrial bank as defined in Section 105.5.


4805.11. "Insured," when used with respect to a depository corporation, means a depository corporation the deposits of which are insured by the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act (12 U.S.C. Sec. 1811 et seq.).


4805.12. "Law of the domicile" means: (a) When used with respect to a federal depository corporation, the law of the United States. (b) When used with respect to a state depository corporation, the law of the state of the United States under which the depository corporation is organized. (c) When used with respect to a foreign (other nation) bank, the law of the foreign nation under which the bank is organized.


4805.13. "Merger," when used with respect to a merger in a case where the surviving corporation is a federal depository corporation and federal law authorizes a consolidation, includes a consolidation in which the resulting corporation is a federal depository corporation. The provisions of this division that apply to mergers apply with appropriate changes in points of detail to consolidations of that type.


4805.15. "Share" means: (a) When used with respect to a California state savings association that is authorized to issue guarantee stock, a share of guarantee stock. (b) When used with respect to a federal savings association that is authorized to issue capital stock, a share of capital stock.


4805.16. "Shareholder" means: (a) When used with respect to a California state savings association that is authorized to issue guarantee stock, a holder of record of a share of guarantee stock. (b) When used with respect to a federal savings association that is authorized to issue capital stock, a holder of record of a share of capital stock.


4805.17. "State depository corporation" means a state bank, a state savings association, or an industrial loan company.


4805.18. "Uninsured," when used with respect to a deposit, means a deposit or any part of a deposit that is not insured by the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act (12 U.S.C. Sec. 1811 et seq.).


Article 3. Other General Provisions

Ca Codes (fin:4820-4828.7) Financial Code Section 4820-4828.7



4820. For purposes of this division, a national banking association or federal savings association is deemed to be a corporation.


4820.5. For purposes of this division, depository corporations are divided into the following classes: (a) Banks. (b) Savings associations. (c) Industrial loan companies.


4821. The provisions of the General Corporation Law (Division 1 (commencing with Section 100) of Title 1 of the Corporations Code) shall apply to any transaction which is subject to this division. However, whenever any provision of this division or of any regulation or order issued under this division is inconsistent with any provision of the General Corporation Law, the provision of this division or of the regulation or order shall apply and the provision of the General Corporation Law shall not apply.


4821.5. Any certificate of authority, license, or other authorization issued under subdivision (b) of Section 4858, subdivision (b) of Section 4877.13, subdivision (b) of Section 4888, subdivision (b) of Section 4928, or Section 4948 or 4949 is deemed to have been issued under the provisions of Division 1 (commencing with Section 99) or Division 2 (commencing with Section 5000) that would otherwise apply to the issuance of the certificate of authority, license, or other authorization.


4822. (a) References in this division to the voting of the shares of a California state depository corporation shall be construed in accordance with Section 111 of the Corporations Code. (b) If the articles of a California state depository corporation provide for more or less than one vote for any share on any matter that is subject to this division, the references in Sections 123 and 124 (which are made applicable to this division by Section 4805) to a majority or other proportion of shares mean, as to the matter, a majority or other proportion of the votes entitled to be cast. (c) Whenever shares of a California state depository corporation are disqualified under any applicable law from voting on any matter that is subject to this division, the shares shall not be considered outstanding for the determination of a quorum at any meeting to act upon, or the required vote to approve action upon, the matter.


4823. References in this division to shareholders' equity mean shareholders' equity determined in accordance with generally accepted accounting principles, subject (a) in the case of California state banks or California industrial loan companies, to the provisions of Section 118, and (b) in the case of California state savings associations, to the provisions of Division 2 (commencing with Section 5000).


4824. In determining for purposes of this division whether the shareholders' equity of a California state depository corporation will be adequate: (a) In case the corporation is, or is to convert into, a California state bank, the commissioner shall consider the factors specified in Section 660. (b) In case the corporation is, or is to convert into, a California state savings association or a California industrial loan company, the commissioner shall consider factors equivalent to those specified in Section 660.


4825. A California state depository corporation may merge with a corporation or other business entity that is not a depository corporation if the California state depository corporation is the surviving corporation of that merger. The merger of a corporation or other business entity with and into a California state depository corporation shall be effected in accordance with Division 1 (commencing with Section 100) of the Corporations Code.


4826. Notwithstanding any other provision of law, no savings association or industrial loan company may convert into a bank if the ownership of the savings association or industrial loan company is such that the establishment or acquisition of control of a new state bank or national banking association by the same ownership would not be permitted by Section 3(d) of the Bank Holding Company Act of 1956 (12 U.S.C. Sec. 1842 (d)).


4826.5. Notwithstanding any other provision of this division: (a) The provisions of Chapter 22 (commencing with Section 3800) of Division 1 apply to any transaction which is subject to this division. Whenever any provision of Chapter 22 (commencing with Section 3800) of Division 1 or of any regulation or order issued under Chapter 22 (commencing with Section 3800) of Division 1 is inconsistent with any provision of this division or of any regulation or order issued under this division, the provision of Chapter 22 (commencing with Section 3800) of Division 1 or of the regulation or order issued under Chapter 22 (commencing with Section 3800) of Division 1 applies, and the provision or this division or of the regulation or order issued under this division does not apply. (b) Nothing in this division authorizes any sale or merger in a case where the purchasing or surviving depository corporation is a foreign depository corporation if the sale or merger is prohibited by Chapter 22 (commencing with Section 3800) of Division 1. (c) Nothing in this division constitutes an election by this state under federal law to prohibit or permit interstate sales or mergers between banks or industrial loan companies.


4827. Except as expressly provided otherwise in this division: (a) (1) No sale of a whole business unit (as defined in Section 4840) or merger in which the selling or disappearing depository corporation is a California state savings association, in which the purchasing or surviving depository corporation is a California state bank, a California industrial loan company, or a California state-licensed foreign (other nation) bank, and which may be effected with the approval of the commissioner pursuant to this division is prohibited or restricted by any provision of Division 2 (commencing with Section 5000) or requires any approval, consent, or other authorization of the commissioner pursuant to Division 2 (commencing with Section 5000). (2) No conversion in which the converting depository corporation is a California state savings association in which the resulting depository corporation is a California state bank or a California industrial loan company, and which may be effected with the approval of the commissioner pursuant to this division is prohibited or restricted by any provision of Division 2 (commencing with Section 5000) or requires any approval, consent, or other authorization of the commissioner pursuant to Division 2 (commencing with Section 5000). (b) (1) No sale of a whole business unit (as defined in Section 4840) or merger in which the selling or disappearing depository corporation is a California state bank, a California state-licensed foreign (other nation) bank, or a California industrial loan company, in which the purchasing or surviving depository corporation is a California state savings association, and which may be effected with the approval of the commissioner pursuant to this division is prohibited or restricted by any provision of Division 1 (commencing with Section 99), except the provisions of Chapter 22 (commencing with Section 3800) of Division 1, or requires any approval, consent, or other authorization of the commissioner pursuant to Division 1, except as may be required under the provisions of Chapter 22 (commencing with Section 3800) of Division 1. (2) No conversion in which the converting depository corporation is a California state bank or a California industrial loan company, in which the resulting depository corporation is a California state savings association, and which may be effected with the approval of the commissioner pursuant to this division is prohibited or restricted by any provision of Division 1 (commencing with Section 99), except the provisions of Chapter 22 (commencing with Section 3800) of Division 1, or requires any approval, consent, or other authorization of the commissioner pursuant to Division 1, except as may be required under the provisions of Chapter 22 (commencing with Section 3800) of Division 1.


4827.3. Except as otherwise provided in paragraph (2) of subdivision (a) of Section 4827.7 in the case of a California state-licensed foreign (other nation) bank or in federal law in the case of a federally licensed foreign (other nation) bank, nothing in this division except subdivision (c) of Section 4879.02 authorizes any sale or merger in a case where the purchasing or surviving corporation is a foreign (other nation) bank unless the foreign (other nation) bank is at the effective time of the sale or merger licensed under Article 3 (commencing with Section 1750) of Chapter 13.5 of Division 1 or authorized under federal law to transact in this state the business to be acquired in the sale or merger.


4827.7. (a) (1) Except as otherwise provided in paragraph (2): (A) No California state depository corporation may, as the selling or disappearing depository corporation, make a sale or merger pursuant to this division in which it would transfer to a California state-licensed or federally licensed foreign (other nation) bank any deposit or fiduciary account that the foreign bank is not authorized to accept. (B) No California state-licensed foreign (other nation) bank may, as the purchasing or surviving depository corporation, make a sale or merger pursuant to this division in which it would acquire any deposit or fiduciary account that it is not authorized to accept. (2) Notwithstanding paragraph (1) and Section 1755, a California state depository corporation may, as the selling or disappearing depository corporation, make a sale or merger pursuant to this division in which it transfers to a California state-licensed or federally licensed foreign (other nation) bank deposits or fiduciary accounts that the foreign bank is not authorized to accept, and a California state-licensed foreign (other nation) bank may, as the purchasing or surviving depository corporation, make a sale or merger pursuant to this division in which it acquires deposits or fiduciary accounts that it is not authorized to accept, if, concurrently with the effective time of the sale or merger, the foreign bank, pursuant to Article 5 (commencing with Section 4879.01) of Chapter 3 or other applicable law, sells all those deposits and fiduciary accounts to a depository corporation that is authorized to accept them. (b) (1) Except as otherwise provided in paragraph (2): (A) No California state bank or industrial loan company may, as the selling, disappearing, or converting depository corporation, make a sale, merger, or conversion pursuant to this division in which it would transfer to a savings association any deposit or fiduciary account that the savings association is not authorized to accept. (B) No California state savings association may, as the purchasing, surviving, or resulting depository corporation, make a sale, merger, or conversion pursuant to this division in which it would acquire any deposit or fiduciary account that it is not authorized to accept. (2) Notwithstanding paragraph (1) and Division 2 (commencing with Section 5000), a California state bank or industrial loan company may, as the selling, disappearing, or converting depository corporation, make a sale, merger, or conversion pursuant to this division in which it transfers to a savings association deposits or fiduciary accounts that the savings association is not authorized to accept, and a California state savings association may, as the purchasing, surviving, or resulting depository corporation, make a sale, merger, or conversion pursuant to this division in which it acquires deposits or fiduciary accounts that it is not authorized to accept, if, concurrently with the effective time of the sale, merger, or conversion, the savings association, pursuant to Article 5 (commencing with Section 4879.01) of Chapter 3 or other applicable law, sells all those deposits and fiduciary accounts to a depository corporation that is authorized to accept them. (c) (1) Except as otherwise provided in paragraph (2): (A) No California state bank or savings association may, as the selling, disappearing, or converting depository corporation, make a sale, merger, or conversion pursuant to this division in which it would transfer to an industrial loan company any deposit or fiduciary account that the industrial loan company is not authorized to accept. (B) No California industrial loan company may, as the purchasing, surviving, or resulting depository corporation, make a sale, merger, or conversion pursuant to this division in which it would acquire any deposit or fiduciary account that it is not authorized to accept. (2) Notwithstanding paragraph (1) and Division 1 (commencing with Section 99), a California state bank or savings and loan association may, as the selling, disappearing, or converting depository corporation, make a sale, merger, or conversion pursuant to this division in which it transfers to an industrial loan company deposits or fiduciary accounts that the industrial loan company is not authorized to accept, and a California industrial loan company may, as the purchasing, surviving, or resulting depository corporation, make a sale, merger, or conversion pursuant to this division in which it acquires deposits or fiduciary accounts that it is not authorized to accept, if, concurrently with the effective time of the sale, merger, or conversion, the industrial loan company, pursuant to Article 5 (commencing with Section 4879.01) of Chapter 3 or other applicable law, sells all those deposit accounts and fiduciary accounts to a depository corporation that is authorized to accept them.

4828. Subject to the provisions of Sections 4827.3 and 4827.7 but notwithstanding any other provision of law: (a) (1) If, as a result of any sale, merger, or conversion effected pursuant to the provisions of this division, a California state bank acquires any asset or liability, or becomes engaged in any activity, which was permitted to the selling, disappearing, or converting depository corporation but which is prohibited to California state banks, the commissioner may permit the California state bank a reasonable period of time, not to exceed 12 months, within which to divest itself of the asset, liability, or activity or to conform it to law. On a case-by-case basis, the commissioner may permit the California state bank a reasonable period of time in excess of 12 months if the commissioner finds that the bank cannot reasonably accomplish the divestment or conformity within the 12-month period. (2) If, as a result of any sale or merger effected pursuant to the provisions of this division, a California state-licensed foreign (other nation) bank acquires any asset or liability, or becomes engaged in any activity, which was permitted to the selling or disappearing depository corporation but which is prohibited to California state-licensed foreign (other nation) banks, the commissioner may permit the California state-licensed foreign (other nation) bank a reasonable period of time, not to exceed 12 months, within which to divest itself of the asset, liability, or activity or to conform it to law. On a case-by-case basis, the commissioner may permit the California state-licensed foreign (other nation) bank a reasonable period of time in excess of 12 months if the commissioner finds that the bank cannot reasonably accomplish the divestment or conformity within the 12-month period. (b) If, as a result of a sale, merger, or conversion effected pursuant to the provisions of this division, a California state savings association acquires any asset or liability, or becomes engaged in any activity, which was permitted to the selling, disappearing, or converting depository corporation but which is prohibited to California state savings associations, the commissioner may permit the California state savings association a reasonable period of time, not to exceed 12 months, within which to divest itself of the asset, liability, or activity or to conform it to law. On a case-by-case basis, the commissioner may permit the California state savings association a reasonable period of time in excess of 12 months if the commissioner finds that the savings association cannot reasonably accomplish the divestment or conformity within the 12-month period. (c) If, as a result of a sale, merger, or conversion effected pursuant to the provisions of this division, a California industrial loan company acquires any asset or liability, or becomes engaged in any activity, which was permitted to the selling, disappearing, or converting depository corporation but which is prohibited to California industrial loan companies, the commissioner may permit the California industrial loan company a reasonable period of time, not to exceed 12 months, within which to divest itself of the asset, liability, or activity or to conform it to law. On a case-by-case basis, the commissioner may permit the California industrial loan company a reasonable period of time in excess of 12 months if the commissioner finds that the industrial loan company cannot reasonably accomplish the divestment or conformity within the 12-month period.


4828.3. A California state bank or an industrial loan company may, with the approval of the commissioner and its board and, if the transaction constitutes a reorganization as defined in Section 181 of the Corporations Code, subject to the provisions of Chapter 12 (commencing with Section 1200) of Division 1 of Title 1 of the Corporations Code, acquire in a single transaction all (except directors' qualifying shares, if any) of the outstanding shares of another depository corporation in accordance with a plan that provides either of the following: (a) That the other depository corporation shall (1) immediately sell its whole business unit (as defined in Section 4840) to the California state bank or industrial loan company and (2) shall thereafter wind up and dissolve or, if the other depository corporation is a California state bank or an industrial loan company and if the commissioner so approves, change into a nonbank corporation by amending its articles and changing its name. (b) That the other depository corporation shall immediately merge into the California state bank or industrial loan company.


4828.7. (a) The definitions in Section 4840 apply to this section. (b) In case a California state-licensed foreign (other nation) bank sells all or substantially all of its business in this state to another California state-licensed or federally licensed foreign (other nation) bank as part of the sale of a larger partial business unit or the whole business unit of the seller: (1) No provision of Chapter 3 (commencing with Section 4840) applies except as follows: (A) If the sale is of a partial business unit of the seller, Section 4879.14 applies with respect to the part of the seller's business in this state that is sold as if the sale were a sale of the type defined in Section 4879.01. (B) If the sale is of the whole business unit of the seller, Section 4859 applies with respect to the seller's business in this state as if the sale were a sale of the type defined in Section 4845. (2) Promptly after the sale becomes effective, the seller shall: (A) Surrender to the commissioner for cancellation the licenses issued to it by the commissioner for its business in this state. (B) File with the commissioner any report regarding the sale that the commissioner may require. (c) In case a California state-licensed foreign (other nation) bank merges into another California state-licensed or federally licensed foreign (other nation) bank: (1) No provision of Chapter 4 (commencing with Section 4880) applies except that the merger has the same effect with respect to the disappearing bank's business in this state as provided in Section 1107 of the Corporations Code and Section 4889 in the case of a merger of the type defined in Section 4880. (2) Promptly after the merger becomes effective, the surviving bank shall: (A) Surrender to the commissioner for cancellation the licenses issued to the disappearing bank by the commissioner for its business in this state. (B) File with the commissioner any report regarding the merger that the commissioner may require.


Chapter 2. Administration

Ca Codes (fin:4830-4839) Financial Code Section 4830-4839



4830. Every final order, decision, license, or other official act of the commissioner under this division is subject to judicial review in accordance with law.


4831. (a) The commissioner may from time to time issue regulations and orders as may in his or her opinion be necessary to carry out the provisions and purposes of this division. (b) Regulations and orders issued under this division may, among other things, define any term used in this division as well as any term not used in this division. (c) For purposes of regulations and orders issued under this division, the commissioner may classify persons, transactions, and other matters within his or her jurisdiction and may prescribe different regulations or orders for different classes. (d) The commissioner may waive any provision of any regulation or order which he or she has issued under this division in any case where in his or her opinion the provision is not necessary in the public interest.


4832. Whenever the commissioner issues an order or license under this division, he or she may impose conditions as may in his or her opinion be necessary to carry out the provisions and purposes of this division.

4833. In any proceeding under this division: (a) The burden of proving that an application should be approved is upon the applicant. (b) The burden of proving an exemption or an exception is upon the person claiming the exemption or the exception.


4834. The commissioner may honor applications from interested persons for interpretive opinions regarding any provision of this division or of any regulation or order issued under this division.


4835. Each application and report filed with the commissioner under this division or under any regulation or order issued under this division shall be in the form, shall contain the information, shall be signed in the manner, and shall, if the commissioner requires, be verified in the manner that the commissioner may require.


4836. No person shall make any untrue statement of any material fact in any application or report filed with the commissioner under this division or under any regulation or order issued under this division, or willfully omit to state in any application or report filed with the commissioner under this division or under any regulation or order issued under this division any material fact which is required to be stated therein.


4837. In determining whether to approve any application filed under this division or under any regulation or order issued under this division, the commissioner may consider proposals made by the applicant; and, if in the opinion of the commissioner it is probable that the applicant will be able to implement any such proposal, the commissioner may make findings on the basis of the proposal. However, whenever the commissioner approves an application on the basis, in whole or in part, of a proposal made by the applicant, the commissioner shall impose upon the approval appropriate conditions requiring that the applicant implement the proposal within the period of time that the commissioner may specify.


4838. If the commissioner finds, with respect to any application filed under this division or under any regulation or order issued under this division, that not all the information which was required to be provided in or in connection with the application has been provided or that implementation of any proposal contained in the application would violate any applicable law, the commissioner may deny the application.


4839. Fees shall be paid to, and collected by, the commissioner, as follows: (a) The fee for filing an application for approval of a sale under this division shall be two thousand five hundred dollars ($2,500). (b) The fee for filing an application for approval of a merger under this division shall be two thousand five hundred dollars ($2,500). (c) (1) The fee for filing an application for approval of a conversion under this division shall be five thousand dollars ($5,000). (2) The fee for issuing a certificate of authority or license under subdivision (a) of Section 4928 or subdivision (a) of Section 4948 shall be two thousand five hundred dollars ($2,500). (d) The fee for issuing a certificate of authority or license under any other provision of this division shall be twenty-five dollars ($25). (e) The fee for issuing a certificate under Section 4862, 4879.17, 4891, 4930, or 4952 shall be twenty-five dollars ($25). (f) In case the commissioner makes an examination in connection with a pending application, as described in paragraph (1), (2), (3), (4), (5), or (6) the applicant shall pay a fee for the examination in the sum of seventy-five dollars ($75) per hour for each examiner engaged in the examination plus, if in the opinion of the commissioner it is necessary for any examiner engaged in the examination to travel outside this state, the travel expenses of the examiner. (1) Examination of the selling depository corporation in connection with a pending application for approval of a sale of a whole business unit (as defined in Section 4840) under Article 2 (commencing with Section 4845) of Chapter 3. (2) Examination of the partial business unit (as defined in Section 4840) to be sold and any related affairs of the selling depository corporation in connection with a pending application for approval of a sale of a partial business unit (as defined in Section 4840) under Article 2 (commencing with Section 4845) of Chapter 3. (3) Examination of the purchasing depository corporation in connection with a pending application for approval of a sale of a whole business unit (as defined in Section 4880) under Article 3.5 (commencing with Section 4876.01) of Chapter 3 or of a partial business unit (as defined in Section 4880) under Article 4.5 (commencing with Section 4878.01) of Chapter 3. (4) Examination of the surviving depository corporation in connection with a pending application for approval of a merger under Article 4 (commencing with Section 4908.01) of Chapter 4. (5) Examination of the disappearing depository corporation in connection with a pending application for approval of a merger under Article 1 (commencing with Section 4880) or Article 2 (commencing with Section 4895.01) of Chapter 4. (6) Examination of the converting depository corporation in connection with a pending application for approval of a conversion under Article 1 (commencing with Section 4920) or Article 2 (commencing with Section 4940) of Chapter 5.


Chapter 3. Sale

Article 1. General Provisions

Ca Codes (fin:4840-4843) Financial Code Section 4840-4843



4840. In this chapter, unless the context otherwise requires: (a) "Branch business unit" means all or substantially all of the business of a branch office of a depository corporation. (b) "Business unit" means a branch business unit, a partial business unit, or a whole business unit. (c) "Independent trust company" means a trust company that is neither a commercial bank nor a title insurance company. (d) "Fiduciary asset," when used with respect to a depository corporation that transacts trust business, means any asset that the depository corporation holds in its capacity as fiduciary. (e) "Partial business unit" means all or substantially all of any of the following: (1) The business of any office, other than the head office, of a depository corporation. (2) In the case of a depository corporation that transacts trust business: (A) The trust business of the depository corporation, unless the depository corporation transacts only trust business. (B) The trust business of any office of the depository corporation. (C) The business, other than trust business, of the depository corporation. (D) The business, other than trust business, of any office of the depository corporation. In addition, "partial business unit" means any deposit, any fiduciary account, or any portion of the business of a depository corporation that includes a deposit or fiduciary account and that is less than substantially all of the business of the depository corporation. (f) "Partial trust business unit" means: (1) In the case of a California state depository corporation that is an independent trust company: (A) All or substantially all of the business of any office, other than the head office, of the depository corporation. (B) Any partial business unit consisting of one or more fiduciary accounts and no deposits. (2) In the case of a California state depository corporation that is a commercial bank or savings association: (A) All or substantially all of the trust business of the depository corporation. (B) All or substantially all of the trust business of any office, other than the head office, of the depository corporation. (C) Any partial business unit consisting of one or more fiduciary accounts and no deposits. (g) "Purchaser" means a depository corporation that purchases a business unit from another depository corporation pursuant to the provisions of this chapter. (h) "Seller" means a depository corporation that sells a business unit to another depository corporation pursuant to the provisions of this chapter. (i) "Whole business unit" means all or substantially all of the business of a depository corporation.


4841. The provisions of Section 1001 of the Corporations Code shall not apply to any transaction which is subject to this chapter.


4842. If a trust is transferred under this chapter, the transfer shall be good cause for removal of the trustee under the Trust Law (Division 9 (commencing with Section 15000) of the Probate Code).


4843. In case a national banking association or federal savings association that is authorized to transact trust business in this state sells a partial business unit located in this state of the type described in paragraph (1) or subparagraph (A) or (B) of paragraph (2) of subdivision (e) of Section 4840 to a national banking association or federal savings association pursuant to federal law, the sale shall: (a) Have the same effect as provided in subdivision (e) of Section 4879.14 in the case of a sale of the type defined in Section 4879.01. (b) Be subject to the provisions of Section 4842.


Article 2. Sale Of Whole Business Unit To California State Depository Corporation Or California

State-licensed Foreign (other Nation) Bank Ca Codes (fin:4845-4862) Financial Code Section 4845-4862



4845. In this article, unless the context otherwise requires, "sale" means any of the sales described in Section 4846.


4846. With the approval of the commissioner: (a) A bank may sell its whole business unit to a California state bank or a California state-licensed foreign (other nation) bank pursuant to (1) this article, (2) in case the seller is a national banking association or a California federally licensed foreign (other nation) bank, federal law, and (3) in case the seller or purchaser is a foreign bank, the law of the foreign bank's domicile. (b) An industrial loan company may sell its whole business unit to a California industrial loan company pursuant to (1) this article and (2) in case the seller is a foreign (other state) industrial loan company, the law of the foreign industrial loan company's domicile. (c) A depository corporation of any class may sell its whole business unit to a California state depository corporation of another class or a California state-licensed foreign (other nation) bank pursuant to (1) this article, (2) in case the seller is a federal depository corporation or a California federally licensed foreign (other nation) bank, federal law, (3) in case the seller is a foreign depository corporation, the law of the foreign depository corporation's domicile, and (4) in case the purchaser is a California state-licensed foreign (other nation) bank, the law of the foreign bank's domicile.

4847. A seller and purchaser shall make an agreement of sale, providing: (a) That the seller shall sell to the purchaser, and the purchaser shall purchase from the seller, the seller's whole business unit. (b) That the purchaser will assume and be subject to all the debts and liabilities of the seller in the same manner as if the purchaser had itself incurred them. (c) Other provisions as may be appropriate.


4848. The agreement of sale shall be approved by the seller and purchaser, as follows: (a) In the case of a California state depository corporation: (1) If the sale constitutes a reorganization, as defined in Section 181 of the Corporations Code, the agreement of sale shall be approved as required by Chapter 12 (commencing with Section 1200) of Division 1 of Title 1 of the Corporations Code. (2) If the sale does not constitute a reorganization, as defined in Section 181 of the Corporations Code, and if the California state depository corporation is the seller, the agreement of sale shall be approved by the board of the seller, and the principal terms of the agreement of sale shall be approved by the outstanding shares of the seller. (3) If the sale does not constitute a reorganization, as defined in Section 181 of the Corporations Code, and if the California state depository corporation is the purchaser: (A) If, as of the time when the agreement of sale is made, the deposits, if any, of the business unit are less than 10 percent of the total deposits of the purchaser and the fiduciary assets, if any, of the business unit are less than 10 percent of the total fiduciary assets of the purchaser, the agreement of sale shall be approved by the board of the purchaser. (B) Otherwise, the agreement of sale shall be approved by the board of the purchaser, and the principal terms of the agreement of sale shall be approved by the outstanding shares of the purchaser. (4) For purposes of paragraph (3): (A) The amount of deposits shall be determined as of the end of the calendar quarter immediately preceding the making of the agreement of sale. (B) The value of fiduciary assets shall be the net carrying value, as determined in conformity with generally accepted accounting principles, as of the end of the calendar quarter immediately preceding the making of the agreement of sale. (b) In the case of a depository corporation other than a California state depository corporation, the agreement of sale shall be approved as required by the law of the depository corporation's domicile.

4849. (a) Any amendment to an agreement of sale shall be approved by the seller and purchaser, as follows: (1) In the case of a California state depository corporation, by the board of the corporation, and, if the principal terms of the agreement of sale were required to be approved by the outstanding shares of the corporation under Section 4848 and if the amendment changes any of the principal terms of the agreement of sale, by the outstanding shares of the corporation. (2) In the case of a depository corporation other than a California state depository corporation, as required by the law of the depository corporation's domicile. (b) If an agreement of sale is amended and if the amendment is approved as required by subdivision (a), the agreement of sale, as thus amended, constitutes the agreement of sale.


4850. In the case of a seller or purchaser which is a California state depository corporation, any approval of the outstanding shares of the corporation required by Section 4848 or 4849 may be given before or after the approval of the board of the corporation.


4851. In obtaining any approval of outstanding shares required for an agreement of sale, in case the purchaser is a California state depository corporation, the purchaser, and, in case the seller is a California state depository corporation or in case the purchaser is a California state depository corporation that is to issue securities in consideration of the sale, the seller, shall each provide to its shareholders information as the commissioner may require. In determining the information to be required, the commissioner shall give due consideration to regulations relating to proxy statements issued under Section 14 of the Securities Exchange Act of 1934 (15 U.S.C. Sec. 78n) by (a) the Securities and Exchange Commission, (b) in the case of a depository corporation that is a bank, the federal bank regulatory agencies, and (c) in the case of a depository corporation that is a savings association, the Office of Thrift Supervision.

4852. A purchaser or seller that is a California state depository corporation, with the approval of its board and without further approval of the outstanding shares, may, and any other purchaser or seller, with approval as may be required under the law of its domicile, may, abandon the sale at any time before the sale becomes effective, subject to the contractual rights, if any, of other parties, including the seller or purchaser, as the case may be.


4853. In case a purchaser is a California state depository corporation, the provisions of Chapter 13 (commencing with Section 1300) of Division 1 of Title 1 of the Corporations Code do not apply to the shareholders of the purchaser in a sale.


4854. A purchaser shall file the following with the commissioner: (a) A copy of the agreement of sale. (b) An officers' certificate of the purchaser, certifying that the agreement of sale has been approved by the purchaser as required by Sections 4848 and 4849. (c) An officers' certificate of the seller, certifying that the agreement of sale has been approved by the seller as required by Sections 4848 and 4849. (d) An application for approval of the sale.


4855. If the commissioner finds all of the following with respect to an application for approval of a sale, the commissioner shall approve the application: (a) That the sale will not result in a monopoly and will not be in furtherance of any combination or conspiracy to monopolize or to attempt to monopolize the banking, savings association, or industrial loan business in any part of this state. (b) That the sale will not have the effect in any section of this state of substantially lessening competition, tending to create a monopoly, or otherwise being in restraint of trade, or that the anticompetitive effect is clearly outweighed in the public interest by the probable effect of the sale in meeting the convenience and needs of the community to be served. (c) That the shareholders' equity of the purchaser will be adequate and that the financial condition of the purchaser will be satisfactory. (d) That the directors and executive officers of the purchaser will be satisfactory. (e) That the purchaser will afford reasonable promise of successful operation and that it is reasonable to believe that the purchaser will be operated in a safe and sound manner and in compliance with all applicable laws. (f) That the sale will be fair, just, and equitable. For purposes of this subdivision, in the case of any term of the sale that has been determined by agreement between the seller and the purchaser in an arm's length transaction, the commissioner shall find that the term is fair, just, and equitable to the seller and the purchaser. (g) In the case of a sale where the seller is a California savings association, that the sale will not have a seriously adverse effect on the total availability of financing for housing in the market area of the seller in this state or that any effect of that type is clearly outweighed in the public interest by the probable effect of the sale in meeting the convenience and needs of the community to be served. Nothing in this subdivision authorizes the commissioner to require the purchaser to make financing for housing available. If the commissioner finds otherwise, the commissioner shall deny the application for approval of the sale.


4857. After an application for approval of a sale has been approved and all conditions precedent to the sale have been fulfilled, the commissioner shall approve the agreement of sale and endorse the approval on the original or a copy of the agreement of sale, and at that time the sale shall become effective for all purposes.


4858. When a sale becomes effective: (a) Unless the purchaser provided otherwise in the application for approval of the sale or unless the commissioner provided otherwise in the approval of the application: (1) The purchaser may establish and maintain a branch office at the head office of the seller and establish and maintain equivalent offices at the branch offices, places of business, extensions of offices, and other facilities, if any, of the seller. (2) If the seller was authorized to transact and was transacting trust business, the purchaser, if it is a California state bank or savings association, may transact trust business. (b) The commissioner shall issue to the purchaser certificates of authority, licenses, and other authorizations as may be necessary to carry out the provisions of subdivision (a).


4859. When a sale becomes effective: (a) The purchaser shall succeed, without other transfer, to all the rights and property of the seller except any rights and property of the seller which are specifically not sold to the purchasing corporation under the agreement of sale. (b) The purchaser shall assume and be subject to all the debts and liabilities of the seller in the same manner as if the purchaser had itself incurred them. (c) All rights of creditors of the seller and all liens upon the property of the seller shall be preserved unimpaired, provided that such liens upon the property of the seller shall be limited to the property affected thereby immediately prior to the time when the sale becomes effective. (d) Any action or proceeding pending by or against the seller may be prosecuted to judgment, which shall bind the purchaser, or the purchaser may be proceeded against or substituted in place of the seller. (e) Any reference to the seller in any writing, whether executed or taking effect before or after the sale, shall be deemed a reference to the purchaser, if not inconsistent with the other provisions of the writing. (f) In case the seller was transacting trust business, the purchaser shall succeed, without further transfer, to the rights, obligations, properties, assets, investments, deposits, demands, agreements, and trusts of the seller under all trusts, executorships, administrations, guardianships, agencies, and all other fiduciary or representative capacities to the same extent as if the purchaser had originally assumed the fiduciary or representative capacities, and the purchaser shall be entitled to take and execute the appointment to all executorships, trusteeships, guardianships, and other fiduciary or representative capacities to which the seller is or may be named in wills, whenever probated, or to which the seller is or may be named or appointed by any other instrument.


4860. No action on account of any debt or liability assumed by a purchaser in a sale may be commenced against the seller more than one year after the time when the sale becomes effective.


4861. Promptly after a sale becomes effective: (a) The seller shall: (1) Surrender to the commissioner for cancellation the certificates of authority or licenses issued to it by the commissioner. (2) File with the commissioner any report regarding the sale that the commissioner may require. (b) In case the seller is a California state depository corporation, the seller shall wind up and dissolve. However, if the seller is a California state bank, the seller may, in the alternative and with the approval of the commissioner, change into a nonbank corporation by amending its articles and changing its name.


4862. (a) After a sale becomes effective, the commissioner shall issue, upon application, a certificate under his or her official seal, stating that the seller sold its whole business unit to the purchaser and specifying the time at which the sale became effective. (b) Any certificate pursuant to subdivision (a) shall be prima facie evidence of the fact of the sale and of the regularity of the proceedings taken for the sale and shall be conclusive evidence of the matters in favor of any innocent purchaser or encumbrancer for value.


Article 3. Sale Of Whole Business Unit To Federal Depository Corporation, California Federally Licensed

Foreign (other Nation) Bank, Or Insured Foreign (other State) State Depository Corporation Ca Codes (fin:4870-4875) Financial Code Section 4870-4875



4870. In this article, unless the context otherwise requires, "sale" means any of the sales described in Section 4871.


4871. (a) A California state bank may sell its whole business unit to a national banking association, a California federally licensed foreign (other nation) bank, or an insured foreign (other state) state bank pursuant to (1) this article, (2) in case the purchaser is a national banking association or a California federally licensed foreign (other nation) bank, federal law, and (3) in case the purchaser is a California federally licensed foreign (other nation) bank or an insured foreign (other state) state bank, the law of the foreign bank's domicile. (b) A California industrial loan company may sell its whole business unit to an insured foreign (other state) industrial loan company pursuant to (1) this article and (2) the law of the foreign industrial loan company's domicile. (c) A California state depository corporation of any class may sell its whole business unit to a federal depository corporation of another class, a California federally licensed foreign (other nation) bank, or an insured foreign (other state) state depository corporation of another class pursuant to (1) this article, (2) in case the purchaser is a federal depository corporation or a California federally licensed foreign (other nation) bank, federal law, and (3) in case the purchaser is a California federally licensed foreign (other nation) bank or an insured foreign (other state) state depository corporation, the law of the domicile of the foreign bank or foreign depository corporation.


4871.5. (a) No provision of Division 1 (commencing with Section 99), except the provisions of Chapter 22 (commencing with Section 3800) of Division 1, prohibits or restricts a sale in a case where the seller is a California state bank or a California industrial loan company. (b) No provision of Division 2 (commencing with Section 5000) prohibits or restricts a sale in a case where the seller is a California state savings and loan association.


4872. A sale is subject to the provisions of Sections 4847 to 4850, inclusive, and 4852 as if the sale were a sale of the type defined in Section 4845.

4873. A sale shall have the same effect as provided in Sections 4859 and 4860 in the case of a sale of the type defined in Section 4845.

4874. Promptly after a sale becomes effective: (a) The seller shall: (1) Surrender to the commissioner for cancellation the certificates of authority or licenses issued to it by the commissioner. (2) File with the commissioner any report of the sale that the commissioner may require. (b) The seller shall wind up and dissolve. However, if the seller is a California state bank, the seller may, in the alternative and with the approval of the commissioner, change into a nonbank corporation by amending its articles and changing its name.


4875. (a) After a sale becomes effective, the seller or purchaser may issue an officer's certificate stating that the seller sold its whole business unit to the purchaser and specifying the time at which the sale became effective. (b) Any certificate issued pursuant to subdivision (a) shall be prima facie evidence of the fact of the sale and of the regularity of the proceedings taken for the sale and shall be conclusive evidence of the matters in favor of any innocent purchaser or encumbrancer for value.


Article 3.5. Sale Of Whole Business Unit Of California State Independent Trust Company To

Uninsured Foreign (other State) State Depository Corporation Ca Codes (fin:4876.01-4876.09) Financial Code Section 4876.01-4876.09



4876.01. In this article, unless the context otherwise requires, "sale" means any sale described in Section 4876.02.


4876.02. With the approval of the commissioner, a California state independent trust company may sell its whole business unit to an uninsured foreign (other state) state depository corporation pursuant to this article and the law of the purchaser's domicile.


4876.03. A sale is subject to the provisions of Sections 4847 to 4852 as if the sale were a sale of the type defined in Section 4845.


4876.04. A seller shall file the following with the commissioner: (a) A copy of the agreement of sale. (b) An officers' certificate of the purchaser, certifying that the agreement of sale has been approved by the purchaser as required by Sections 4848 and 4849. (c) An officers' certificate of the seller, certifying that the agreement of sale has been approved by the seller as required by Sections 4848 and 4849. (d) An application for approval of the sale.


4876.05. If the commissioner finds all of the following with respect to an application for approval of a sale, the commissioner shall approve the application: (a) That the shareholders' equity of the purchaser will be adequate and that the financial condition of the purchaser will be satisfactory. (b) That the directors and executive officers of the purchaser will be satisfactory. (c) That the purchaser will afford reasonable promise of successful operation and that it is reasonable to believe that the purchaser will operate in a safe and sound manner and in compliance with all applicable laws. (d) That the sale will be fair, just, and equitable. For purposes of this subdivision, in the case of any term of the sale that has been determined by agreement between the seller and the purchaser in an arm's-length transaction, the commissioner shall find that the term is fair, just, and equitable to the seller and the purchaser. If the commissioner finds otherwise, the commissioner shall deny the application for approval of the sale.


4876.06. After an application for approval of a sale has been approved and all conditions precedent to the sale have been fulfilled, the commissioner shall approve the agreement of sale and endorse the approval on the original or a copy of the agreement of sale. The sale shall become effective for all purposes at that time except that, if the law of the purchaser's domicile provides for the sale to become effective at a later time, it shall become effective at the later time.


4876.07. A sale shall have the same effect as provided in Sections 4859 and 4860 in the case of a sale of the type defined in Section 4845.

4876.08. Promptly after a sale becomes effective: (a) The seller shall: (1) Surrender to the commissioner for cancellation the certificates of authority issued to it by the commissioner. (2) File with the commissioner any report of the sale that the commissioner may require. (b) The seller shall wind up and dissolve. However, the seller may, in the alternative and with the approval of the commissioner, change into a nonbank corporation by amending its articles and changing its name.


4876.09. (a) After a sale becomes effective, the seller or purchaser may issue an officers' certificate stating that the seller sold its whole business unit to the purchaser and specifying the time at which the sale became effective. (b) Any certificate issued pursuant to subdivision (a) shall be prima facie evidence of the fact of the sale and of the regularity of the proceedings taken for the sale and shall be conclusive evidence of the matters in favor of any innocent purchaser or encumbrancer for value.


Article 4. Certain Sales Of Partial Business Units

Ca Codes (fin:4877.01-4877.07) Financial Code Section 4877.01-4877.07



4877.01. In this article, unless the context otherwise requires, "sale" means any of the sales described in Section 4877.02.


4877.02. A California state bank or a California industrial loan company may sell a California branch business unit to an insured foreign (other state) bank or an insured foreign (other state) industrial loan company pursuant to (1) this article and (2) the law of the domicile of the insured foreign (other state) bank or the insured foreign (other state) industrial loan company.


4877.03. No provision of Division 1 (commencing with Section 99), except the provisions of Chapter 22 (commencing with Section 3800) of Division 1, prohibits or restricts a sale in a case where the seller is a California state bank or a California industrial loan company.


4877.04. A sale is subject to the provisions of Sections 4879.03 to 4879.06, inclusive, and Section 4879.08 as if the sale were a sale of the type defined in Section 4879.01.


4877.05. A sale shall have the same effect as provided in Sections 4879.14 and 4879.15 in the case of a sale of the type defined in Section 4879.01.

4877.06. Promptly after a sale becomes effective, the seller shall: (a) Surrender to the commissioner for cancellation the certificate of authority or license issued to it by the commissioner that relates to the California branch business unit sold. (b) File with the commissioner any report of the sale that the commissioner may require.


4877.07. (a) After a sale becomes effective, the seller or purchaser may issue an officer's certificate stating that the seller sold a California branch business unit to the purchaser, describing the business unit, and specifying the time at which the sale became effective. (b) Any certificate issued pursuant to subdivision (a) shall be prima facie evidence of the fact of the sale and of the regularity of the proceedings taken for the sale and shall be conclusive evidence of the matters in favor of any innocent purchaser or encumbrancer for value.


Article 4.5. Sale Of Partial Trust Business Unit By California State Bank Or Savings

Association To Uninsured Foreign (other State) State Depository Corporation Ca Codes (fin:4878.01-4878.08) Financial Code Section 4878.01-4878.08



4878.01. In this article, unless the context otherwise requires, "sale" means any sale described in Section 4878.02.


4878.02. With the approval of the commissioner, a California state bank or savings association may sell a partial trust business unit to an uninsured foreign (other state) state depository corporation pursuant to (a) this article and (b) the law of the purchaser's domicile.


4878.03. A sale is subject to the provisions of Sections 4879.03 to 4879.09, inclusive, as if the sale were a sale of the type defined in Section 4879.01.

4878.04. If the commissioner finds all of the following with respect to an application for approval of a sale, the commissioner shall approve the application: (a) That the shareholders' equity of the purchaser will be adequate and that the financial condition of the purchaser will be satisfactory. (b) That the directors and executive officers of the purchaser will be satisfactory. (c) That the purchaser will afford reasonable promise of successful operation and that it is reasonable to believe that the purchaser will operate in a safe and sound manner and in compliance with all applicable laws. (d) That the sale will be fair, just, and equitable. For purposes of this subdivision, in the case of any term of the sale that has been determined by agreement between the seller and the purchaser in an arm's-length transaction, the commissioner shall find that the term is fair, just, and equitable to the seller and the purchaser. (e) That the sale will not have a seriously adverse effect on the safety or soundness of the seller. If the commissioner finds otherwise, the commissioner shall deny the application for approval of the sale.


4878.05. After an application for approval of a sale has been approved by the commissioner and all conditions precedent to the sale have been fulfilled, the commissioner shall approve the agreement of sale and endorse the approval on the original or a copy of the agreement of sale. The sale shall become effective for all purposes at that time, except that, if the law of the purchaser's domicile provides for the sale to become effective at a later time, it shall become effective at the later time.


4878.06. A sale shall have the same effect as provided in Sections 4879.14 and 4879.15 in the case of a sale of the type defined in Section 4879.01.

4878.07. (a) In case a seller is a California state commercial bank and sells all of its trust business in a sale: (1) As of the time when the sale becomes effective, the commissioner shall issue to the seller certificates of authority authorizing it to transact commercial banking business in replacement of the certificates of authority that the seller is required to surrender pursuant to paragraph (2). (2) Promptly after the sale becomes effective, the seller shall surrender to the commissioner for cancellation its certificates of authority authorizing it to transact commercial banking business and trust business and shall file with the commissioner any report of the sale that the commissioner may require. (b) In any other case, promptly after the sale becomes effective, the seller shall: (1) Surrender to the commissioner for cancellation the certificate of authority or license for any office closed as a result of the sale. (2) File with the commissioner any report of the sale that the commissioner may require.


4878.08. (a) After a sale becomes effective, the seller or purchaser may issue an officers' certificate stating that the seller sold a partial trust business unit to the purchaser, describing the business unit, and specifying the time at which the sale became effective. (b) Any certificate issued pursuant to subdivision (a) shall be prima facie evidence of the fact of the sale and of the regularity of the proceedings taken for the sale and shall be conclusive evidence of the matters in favor of any innocent purchaser or encumbrancer for value.


Article 5. Other Sales Of Partial Business Units

Ca Codes (fin:4879.01-4879.17) Financial Code Section 4879.01-4879.17



4879.01. In this article, unless the context otherwise requires, "sale" means any of the sales described in Section 4879.02.


4879.02. With the approval of the commissioner: (a) A bank may sell a partial business unit to a California state bank pursuant to (1) this article, (2) in case the seller is a national banking association or a California federally licensed foreign (other nation) bank, federal law, (3) in case the seller is a foreign bank, the law of the foreign bank's domicile, and (4) in case the partial business unit is located outside this state, the law of the place where the partial business unit is located. (b) A California state bank may sell a partial business unit to another California state bank, a national banking association, or an insured foreign (other state) state bank, pursuant to (1) this article, (2) in case the purchaser is a national banking association, federal law, (3) in case the purchaser is an insured foreign (other state) state bank, the law of the foreign bank's domicile, and (4) in case the partial business unit is located outside this state, the law of the place where the partial business unit is located. However, this subdivision does not apply to any sale of the type defined in Section 4877.01. (c) A California state bank may sell a partial business unit located outside this state to a foreign (other nation) bank pursuant to (1) this article, (2) the law of the foreign bank's domicile, and (3) the law of the place where the partial business unit is located. (d) An industrial loan company may sell a partial business unit to a California industrial loan company pursuant to (1) this article, (2) in case the seller is a foreign (other state) industrial loan company, the law of the foreign industrial loan company's domicile, and (3) in case the partial business unit is located outside this state, the law of the place where the partial business unit is located. (e) A California industrial loan company may sell a partial business unit to an insured industrial loan company pursuant to (1) this article, (2) in case the purchaser is an insured foreign (other state) industrial loan company, the law of the foreign industrial loan company's domicile, and (3) in case the partial business unit is located outside this state, the law of the place where the partial business unit is located. However, this subdivision does not apply to any sale of the type defined in Section 4877.01. (f) A depository corporation of any class may sell a partial business unit to a California state depository corporation of another class pursuant to (1) this article, (2) in case the seller is a federal depository corporation, federal law, (3) in case the seller is a foreign (other state) state depository corporation or foreign (other nation) depository corporation, the law of the foreign depository corporation's domicile, and (4) in case the partial business unit is located outside this state, the law of the place where the partial business unit is located. (g) A California state depository corporation of any class may sell a partial business unit to a federal depository corporation of another class or an insured foreign (other state) state depository corporation of another class pursuant to (1) this article, (2) in case the purchaser is a federal depository corporation, federal law, (3) in case the purchaser is an insured foreign (other state) state depository corporation, the law of the foreign depository corporation' s domicile, and (4) in case the partial business unit is located outside this state, the law of the place where the partial business unit is located. However, this subdivision does not apply to any sale of the type defined in Section 4877.01. (h) A depository corporation may sell a partial business unit located in this state to a California state-licensed foreign (other nation) bank pursuant to (1) this article, (2) in case the seller is a federal depository corporation or a California federally licensed foreign (other nation) bank, federal law, (3) in case the seller is a foreign depository corporation, the law of the foreign depository corporation's domicile, and (4) the law of the purchaser's domicile. (i) A California state-licensed foreign (other nation) bank may sell a partial business unit located in this state to a California state depository corporation, a federal depository corporation, an insured foreign (other state) state depository corporation, another California state-licensed foreign (other nation) bank, or a California federally licensed foreign (other nation) bank pursuant to (1) this article, (2) in case the purchaser is a federal depository corporation or a California federally licensed foreign (other nation) bank, federal law, (3) in case the purchaser is a foreign depository corporation, the law of the foreign depository corporation's domicile, and (4) the law of the seller's domicile. (j) A California state depository corporation may sell a partial business unit located in this state to a California federally licensed foreign (other nation) bank pursuant to (1) this article, (2) federal law, and (3) the law of the purchaser's domicile. (k) A California federally licensed foreign (other nation) bank may sell a partial business unit located in this state to a California state depository corporation pursuant to (1) this article, (2) federal law, and (3) the law of the seller's domicile.


4879.03. A seller and purchaser shall make an agreement of sale, providing: (a) That the seller shall sell to the purchaser, and the purchaser shall purchase from the seller, a partial business unit, describing it. (b) Other provisions as may be appropriate.


4879.04. The agreement of sale shall be approved by the seller and purchaser, as follows: (a) In the case of a California state depository corporation: (1) If, as of the time when the agreement of sale is made, the deposits, if any, of the partial business unit are less than 10 percent of the total deposits of the state depository corporation and the fiduciary assets, if any, of the partial business unit are less than 10 percent of the total fiduciary assets of the state depository corporation, the agreement of sale shall be approved by the board of the state depository corporation. (2) Otherwise, the agreement of sale shall be approved by the board of the state depository corporation, and the principal terms of the agreement of sale shall be approved by the outstanding shares of the state depository corporation. (3) For purposes of paragraphs (1) and (2): (A) The amount of deposits shall be determined as of the end of the calendar quarter immediately preceding the making of the agreement of sale. (B) The value of fiduciary assets shall be the net carrying value, as determined in conformity with generally accepted accounting principles, as of the end of the calendar quarter immediately preceding the making of the agreement of sale. (b) In the case of a depository corporation other than a California state depository corporation, the agreement of sale shall be approved as required by the law of the depository corporation's domicile.


4879.05. (a) Any amendment to an agreement of sale shall be approved by the seller and purchaser, as follows: (1) In the case of a California state depository corporation, by the board of the corporation, and, if the principal terms of the agreement of sale were required to be approved by the outstanding shares of the corporation under Section 4879.04 and if the amendment changes any of the principal terms of the agreement of sale, by the outstanding shares of the corporation. (2) In the case of a depository corporation other than a California state depository corporation, as required by the law of the depository corporation's domicile. (b) If an agreement of sale is amended and if the amendment is approved as required by subdivision (a), the agreement of sale, as thus amended, constitutes the agreement of sale.


4879.06. In the case of a seller or purchaser that is a California state depository corporation, any approval of the outstanding shares of the corporation required by Section 4879.04 or 4879.05 may be given before or after the approval of the board of the depository corporation.


4879.07. In obtaining any approval of outstanding shares required for an agreement of sale, a purchaser or seller that is a California state depository corporation and, in any case where the purchaser is a California state depository corporation that is to issue securities in consideration of the sale, the seller shall each provide to its shareholders information as the commissioner may require. In determining the information to be required, the commissioner shall give due consideration to regulations relating to proxy statements issued under Section 14 of the Securities Exchange Act of 1934 (15 U.S.C. Sec. 78n) by (a) the Securities and Exchange Commission, (b) in the case of a depository corporation that is a bank, the federal bank regulatory agencies, and (c) in the case of a depository corporation that is a savings association, the Office of Thrift Supervision.

4879.08. A purchaser or seller that is a California state depository corporation, with the approval or its board and without further approval of the outstanding shares, may, and any other purchaser or seller, with approval as may be required under the law of its domicile, may, in its discretion, abandon the sale at any time before the sale becomes effective, subject to the contractual rights, if any, of other parties, including the seller or purchaser, as the case may be.

4879.09. A purchaser or seller that is a California state depository corporation or California state-licensed foreign (other nation) bank, shall file the following with the commissioner: (a) A copy of the agreement of sale. (b) An officers' certificate of the purchaser, certifying that the agreement of sale has been approved by the purchaser as required by Sections 4879.04 and 4879.05. (c) An officers' certificate of the seller, certifying that the agreement of sale has been approved by the seller as required by Sections 4879.04 and 4879.05. (d) An application for approval of the sale.


4879.10. (a) In case the purchaser is either, and the seller is not either, a California state depository corporation or California state-licensed foreign (other nation) bank, if the commissioner finds all of the following with respect to an application for approval of a sale, he or she shall approve the application: (1) That the sale will not result in a monopoly and will not be in furtherance of any combination or conspiracy to monopolize or to attempt to monopolize the banking, savings association, or industrial loan business in any part of this state. (2) That the sale will not have the effect in any section of this state of substantially lessening competition, tending to create a monopoly, or otherwise being in restraint of trade, or that the anticompetitive effect is clearly outweighed in the public interest by the probable effect of the sale in meeting the convenience and needs of the community to be served. (3) That the shareholders' equity of the purchaser will be adequate and that the financial condition of the purchaser will be satisfactory. (4) That the directors and executive officers of the purchaser will be satisfactory. (5) That the purchaser will afford reasonable promise of successful operation and that it is reasonable to believe that the purchaser will be operated in a safe and sound manner and in compliance with all applicable laws. (6) That the sale will be fair, just, and equitable. For purposes of this paragraph, in the case of any term of the sale that has been determined by agreement between the seller and the purchaser in an arm's length transaction, the commissioner shall find that the term is fair, just, and equitable to the seller and the purchaser. (7) In the case of a sale where the seller is a California savings association, that the sale will not have a seriously adverse effect on the total availability of financing for housing in any market area of the seller in this state or that any effect of that type is clearly outweighed in the public interest by the probable effect of the sale in meeting the convenience and needs of the community to be served. Nothing in this subdivision authorizes the commissioner to require the purchaser to make financing for housing available. If the commissioner finds otherwise, he or she shall deny the application for approval of the sale. (b) In case the seller is either, and the purchaser is not either, a California state depository corporation or a California state-licensed foreign (other nation) bank, if the commissioner finds all of the following with respect to an application for approval of a sale, he or she shall approve the application: (1) That the sale will not have a seriously adverse effect on the safety or soundness of the seller. (2) That the sale will be fair, just, and equitable. For purposes of this subdivision, in the case of any term of the sale that has been determined by agreement between the seller and the purchaser in an arm's length transaction, the commissioner shall find that the term is fair, just, and equitable to the seller and the purchaser. If the commissioner finds otherwise, he or she shall deny the application for approval of the sale. (c) In case the seller and the purchaser are each either a California state depository corporation or a California state depository corporation or a California state-licensed foreign (other nation) bank, if the commissioner finds all of the factors set forth in subdivisions (a) and (b) with respect to an application for approval of a sale, the commissioner shall approve the application. If the commissioner finds otherwise, the commissioner shall deny the application.


4879.11. After an application for approval of a sale has been approved by the commissioner and all conditions precedent to the sale have been fulfilled, the commissioner shall approve the agreement of sale and endorse the approval on the original or a copy of the agreement of sale, and at that time the sale shall become effective for all purposes.


4879.12. When a sale becomes effective, in case the purchaser is a California state depository corporation or California state-licensed foreign (other nation) bank: (a) Unless the purchaser provided otherwise in the application for approval of the sale or unless the commissioner provided otherwise in the approval of the application: (1) The purchaser may establish equivalent offices at any branch offices, places of business, extensions of offices, and other facilities of the seller transferred in the sale. (2) If the seller was authorized to transact trust business and if the partial business unit sold includes any trust business, the purchaser, if it is a California state bank or savings association, may transact trust business. (b) The commissioner shall issue to the purchaser certificates of authority, licenses, and other authorizations as may be necessary to carry out the provisions of subdivision (a).


4879.13. In case a seller is a California state commercial bank and sells all of its trust business in a sale: (a) As of the time when the sale becomes effective, the commissioner shall issue to the seller certificates of authority authorizing it to transact commercial banking business in replacement of the certificates of authority that the seller is required to surrender pursuant to subdivision (b). (b) Promptly after the sale becomes effective, the seller shall surrender to the commissioner for cancellation its certificates of authority authorizing it to transact commercial banking business and trust business.

4879.14. When a sale becomes effective: (a) The purchaser shall succeed, without other transfer, to all rights and property of the seller which are sold to the purchaser under the agreement of sale. (b) The purchaser shall assume in the same manner as if the purchaser had itself incurred such debts and liabilities, and shall be subject to, all debts and liabilities of the seller transferred to the purchaser under the agreement of sale. (c) All rights of creditors of the seller and all liens upon the property of the seller shall be preserved unimpaired. (d) Any action or proceeding pending by or against the seller which was sold or transferred to the purchaser under the agreement of sale may be prosecuted to judgment, which shall bind the purchaser, or the purchaser may be proceeded against or substituted in place of the seller. (e) (1) In case the partial business unit sold includes trust business, the purchaser shall succeed, without further transfer, to the rights, obligations, properties, assets, investments, deposits, demands, agreements, and trusts of the seller under all trusts, executorships, administrations, guardianships, agencies, and all other fiduciary or representative capacities sold to the purchaser under the agreement of sale, to the same extent as if the purchaser had originally assumed the fiduciary or representative capacities. (2) In case the partial business unit sold constitutes all or substantially all the trust business of the seller, the purchaser shall, in addition, be entitled to take and execute the appointment to all executorships, trusteeships, guardianships, and other fiduciary or representative capacities to which the seller is or may be named in wills, whenever probated, or to which the seller is or may be named or appointed by any other instrument.


4879.15. No action on account of any debt or liability assumed by a purchaser in a sale may be commenced against the seller more than one year after the time when the sale becomes effective.


4879.16. Promptly after a sale becomes effective, the seller shall: (a) Surrender to its regulator for cancellation the certificates of authority or licenses issued to it by the regulator that relate to the partial business unit sold. (b) File with its regulator any report regarding the sale that the regulator may require.


4879.17. (a) After a sale becomes effective, the commissioner shall issue, upon application, a certificate under his or her official seal, stating that the seller sold a partial business unit to the purchaser, describing the business unit, and specifying the time at which the sale became effective. (b) Any certificate pursuant to subdivision (a) shall be prima facie evidence of the fact of the sale and of the regularity of the proceedings taken for the sale and shall be conclusive evidence of the matters in favor of any innocent purchaser or encumbrancer for value.


Chapter 4. Merger

Article 1. Merger Into California State Depository Corporation 4880-4891

Ca Codes (fin:4880-4891) Financial Code Section 4880-4891



4880. In this article, unless the context otherwise requires: (a) "Agreement of merger" includes a certificate of ownership executed pursuant to Section 1110 of the Corporations Code. (b) "Merger" means any of the mergers described in Section 4881.


4881. (a) With the approval of the commissioner, a bank may merge into a California state bank pursuant to (1) this article, (2) in case the disappearing bank is a national banking association or a California federally licensed foreign (other nation) bank, federal law, and (3) in case the disappearing bank is a foreign bank, the law of the foreign bank's domicile. (b) With the approval of the commissioner, an industrial loan company may merge into a California industrial loan company pursuant to (1) this article and (2) in case the disappearing industrial loan company is a foreign (other state) industrial loan company, the law of the foreign industrial loan company's domicile. (c) With the approval of the commissioner, a depository corporation of any class may merge into a California state depository corporation of another class pursuant to (1) this article, (2) in case the disappearing depository corporation is a federal depository corporation or a California federally licensed foreign (other nation) bank, federal law, and (3) in case the disappearing depository corporation is a foreign depository corporation, the law of the disappearing depository corporation's domicile.

4882. In obtaining any approval of outstanding shares required for a merger, the surviving depository corporation and, in case the surviving depository corporation is to issue securities in consideration of the merger, the disappearing depository corporation shall each provide to its shareholders such information as the commissioner may require. In determining the information to be required, the commissioner shall give due consideration to regulations relating to proxy statements issued under Section 14 of the Securities Exchange Act of 1934 (15 U.S.C. Sec. 78n) by (a) the Securities and Exchange Commission, (b) in the case of a depository corporation that is a bank, the federal bank regulatory agencies, and (c) in the case of a depository corporation that is a savings association, the Office of Thrift Supervision.


4883. The provisions of Chapter 13 (commencing with Section 1300) of Division 1 of Title 1 of the Corporations Code shall not apply to the shareholders of the surviving depository corporation in a merger.


4884. A surviving depository corporation shall file with the commissioner an application for approval of the merger.


4885. If the commissioner finds all of the following with respect to an application for approval of a merger, the commissioner shall approve the application: (a) That the merger will not result in a monopoly and will not be in furtherance of any combination or conspiracy to monopolize or to attempt to monopolize the banking, savings association, or industrial loan business in any part of this state. (b) That the merger will not have the effect in any section of this state of substantially lessening competition, tending to create a monopoly, or otherwise being in restraint of trade, or that the anticompetitive effect is clearly outweighed in the public interest by the probable effect of the merger in meeting the convenience and needs of the community to be served. (c) That the shareholders' equity of the surviving depository corporation will be adequate and that the financial condition of the surviving depository corporation will be satisfactory. (d) That the directors and executive officers of the surviving depository corporation will be satisfactory. (e) That the surviving depository corporation will afford reasonable promise of successful operation and that it is reasonable to believe that the surviving depository corporation will be operated in a safe and sound manner and in compliance with all applicable laws. (f) That the merger will be fair, just, and equitable. For purposes of this subdivision, in the case of any term of the merger that has been determined by agreement between the disappearing depository corporation and the surviving depository corporation in an arm's length transaction, the commissioner shall find that the term is fair, just, and equitable to the disappearing depository corporation and the surviving depository corporation. (g) In the case of a merger where the disappearing depository corporation is a California savings association, that the merger will not have a seriously adverse effect on the total availability of financing for housing in any market area of the disappearing savings association in this state or that any effect of that type is clearly outweighed in the public interest by the probable effect of the merger in meeting the convenience and needs of the community to be served. Nothing in this subdivision authorizes the commissioner to require the surviving depository corporation to make financing for housing available. If the commissioner finds otherwise, the commissioner shall deny the application for approval of the merger.


4887. (a) After an application for approval of a merger has been approved and all conditions precedent to the merger have been fulfilled, the commissioner shall approve the agreement of merger and endorse the approval on the agreement of merger. (b) After the agreement of merger has been filed with the Secretary of State, the surviving depository corporation shall file with the commissioner a copy of the agreement of merger certified by the Secretary of State, and at that time the merger shall become effective for all purposes.


4888. When a merger becomes effective: (a) Unless the surviving depository corporation provided otherwise in the application for approval of the merger or unless the commissioner provided otherwise in the approval of the application: (1) The surviving depository corporation may establish and maintain a branch office at the head office of the disappearing depository corporation and may establish and maintain equivalent offices at the branch offices, places of business, extensions of offices, and other facilities, if any, of the disappearing corporation. (2) If the disappearing depository corporation was authorized to transact and was transacting trust business, the surviving depository corporation, if it is a California state bank or savings association, may transact trust business. (b) The commissioner shall issue to the surviving depository corporation certificates of authority, licenses, and other authorizations as may be necessary to carry out the provisions of subdivision (a).

4889. (a) When a merger becomes effective: (1) Any reference to the disappearing depository corporation in any writing, whether executed or taking effect before or after the merger, shall be deemed a reference to the surviving corporation, if not inconsistent with the other provisions of the writing. (2) In case the disappearing depository corporation was transacting trust business, the surviving depository corporation shall succeed, without further transfer, to the rights, obligations, properties, assets, investments, deposits, demands, agreements, and trusts of the disappearing depository corporation under all trusts, executorships, administrations, guardianships, agencies, and all their fiduciary or representative capacities to the same extent as if the surviving depository corporation had originally assumed such fiduciary or representative capacities, and the surviving depository corporation shall be entitled to take and execute the appointment to all executorships, trusteeships, guardianships, and other fiduciary or representative capacities to which the disappearing depository corporation is or may be named in wills, whenever probated, or to which the disappearing depository corporation is or may be named or appointed by any other instrument. (b) Subdivision (a) shall be construed as clarifying and amplifying, not as limiting or restricting, the provisions of Section 1107 of the Corporations Code.

4890. Promptly after a merger becomes effective: (a) The surviving depository corporation shall: (1) Surrender to the regulator of the disappearing depository corporation for cancellation the certificates of authority or licenses issued to the disappearing depository corporation by the regulator; and (2) File with the regulator of the disappearing depository corporation such report regarding the merger as the regulator may require. (b) The commissioner shall file a report regarding the merger with the Secretary of State.

4891. (a) After a merger becomes effective, the commissioner shall, upon application, issue a certificate under his or her official seal, stating that the disappearing depository corporation merged into the surviving depository corporation and specifying the time at which the merger became effective. (b) Any certificate issued pursuant to subdivision (a) shall be prima facie evidence of the fact of the merger and of the regularity of the proceedings taken for the merger and shall be conclusive evidence of such matters in favor of any innocent purchaser or encumbrancer for value.


Article 2. Merger Into California State-licensed Foreign (other Nation) Bank

Ca Codes (fin:4895.01-4895.06) Financial Code Section 4895.01-4895.06



4895.01. In this article, unless the context otherwise requires, "merger" means any of the mergers described in Section 4895.02.


4895.02. With the approval of the commissioner: (a) A California depository corporation may merge into a California state-licensed foreign (other nation) bank pursuant to (1) this article, (2) in case the disappearing depository corporation is a federal depository corporation, federal law, and (3) the law of the foreign bank's domicile. (b) A foreign (other state) depository corporation that has a branch office in this state may merge into a California state-licensed foreign (other nation) bank pursuant to (1) this article, (2) in case the disappearing depository corporation is a federal depository corporation, federal law, and (3) the laws of the domiciles of the disappearing depository corporation and of the foreign bank.


4895.03. In case the disappearing depository corporation is a California state depository corporation, a merger is subject to the provisions of Section 1108 of the Corporations Code.


4895.04. (a) In case the disappearing depository corporation is a California state depository corporation, a merger has the same effect as provided in Section 1107 of the Corporations Code and Section 4889 in the case of a merger of the type defined in Section 4880. (b) In case the disappearing depository corporation is not a California state depository corporation, a merger has the same effect with respect to the disappearing corporation's business in this state as provided in Section 1107 of the Corporations Code and Section 4889 in the case of a merger of the type defined in Section 4880.

4895.05. (a) A merger shall not become effective unless it has been approved by the commissioner. (b) After an application for approval of a merger has been approved and all conditions precedent to the merger have been fulfilled, the commissioner shall approve the merger.


4895.06. A merger is subject to the provisions of Sections 4884 to 4885, inclusive, and 4888 to 4891, inclusive, as if the merger were a merger of the type defined in Section 4880.


Article 3. Merger Into Federal Depository Corporation, California Federally Licensed Foreign (other

Nation) Bank, Or Insured Foreign (other State) State Depository Corporation Ca Codes (fin:4900-4905) Financial Code Section 4900-4905



4900. In this article, unless the context otherwise requires, "merger" means any of the mergers described in Section 4901.


4901. (a) A California state bank may merge into a national banking association, a California federally licensed foreign (other nation) bank, or an insured foreign (other state) state bank pursuant to (1) this article, (2) in case the surviving bank is a national banking association or a California federally licensed foreign (other nation) bank, federal law, and (3) in case the surviving bank is a California federally licensed foreign (other nation) bank or an insured foreign (other state) state bank, the law of the foreign bank' s domicile. (b) A California industrial loan company may merge into an insured foreign (other state) industrial loan company pursuant to (1) this article and (2) the law of the foreign industrial loan company's domicile. (c) A California state depository corporation of any class may merge into a federal depository corporation of another class, a California federally licensed foreign (other nation) bank, or an insured foreign (other state) state depository corporation of another class pursuant to (1) this article, (2) in case the surviving depository corporation is a federal depository corporation or a California federally licensed foreign (other nation) bank, federal law, and (3) in case the surviving depository corporation is a California federally licensed foreign (other nation) bank or an insured foreign (other state) state depository corporation, the law of the domicile of the foreign bank or foreign depository corporation.

4901.5. (a) No provision of Division 1 (commencing with Section 99), except the provisions of Chapter 22 (commencing with Section 3800) of Division 1, prohibits or restricts the merger of a California state bank or California industrial loan company. (b) No provision of Division 2 (commencing with Section 5000) prohibits or restricts the merger of a California state savings and loan association.


4902. A merger is subject to the provisions of Section 1108 of the Corporations Code.


4903. A merger shall have the same effect as provided in Section 1107 of the Corporations Code and as provided in Section 4889 in the case of a merger of the type defined in Section 4880.


4904. Promptly after a merger becomes effective, the surviving depository corporation shall: (1) Surrender to the commissioner for cancellation the certificates of authority or licenses issued by the commissioner to the disappearing depository corporation; and (2) File with the commissioner such report of the merger as the commissioner may require.


4905. (a) After a merger becomes effective, the surviving depository corporation may issue an officer's certificate, stating that the disappearing depository corporation merged into the surviving depository corporation and specifying the time at which the merger became effective. (b) Any certificate issued pursuant to subdivision (a) shall be prima facie evidence of the fact of the merger and of the regularity of the proceedings taken for the merger and shall be conclusive evidence of the matters in favor of any innocent purchaser or encumbrancer for value.


Article 4. Merger Of California State Independent Trust Company Into Uninsured Foreign (other

State) Depository Corporation Ca Codes (fin:4908.01-4908.10) Financial Code Section 4908.01-4908.10



4908.01. In this article, unless the context otherwise requires, "merger" means any of the mergers described in Section 4908.02.


4908.02. With the approval of the commissioner, a California state independent trust company may merge into an uninsured foreign (other state) state depository corporation pursuant to this article and the law of the surviving depository corporation's domicile.


4908.03. A merger is subject to the provisions of Section 1108 of the Corporations Code.


4908.04. A disappearing or surviving depository corporation shall file an application for approval of a merger with the commissioner.


4908.05. A merger shall not become effective unless it has been approved by the commissioner.


4908.06. If the commissioner finds all of the following with respect to an application for approval of a merger, the commissioner shall approve the application: (a) That the shareholders' equity of the surviving depository corporation will be adequate and that the financial condition of the surviving depository corporation will be satisfactory. (b) That the directors and executive officers of the surviving depository corporation will be satisfactory. (c) That the surviving depository corporation will afford reasonable promise of successful operation and that it is reasonable to believe that the surviving depository corporation will be operated in a safe and sound manner and in compliance with all applicable laws. (d) That the merger will be fair, just, and equitable. For purposes of this subdivision, in the case of any term of the merger that has been determined by agreement between the disappearing depository corporation and the surviving depository corporation in an arm's-length transaction, the commissioner shall find that the term is fair, just, and equitable to the disappearing depository corporation and the surviving depository corporation. If the commissioner finds otherwise, the commissioner shall deny the application for approval of the merger.


4908.07. After an application for approval of a merger has been approved and all conditions precedent to the merger have been fulfilled, the commissioner shall approve the merger.


4908.08. A merger shall have the same effect as provided in Section 1107 of the Corporations Code and Section 4889 in the case of a merger of the type defined in Section 4880.


4908.09. Promptly after a merger becomes effective, the surviving depository corporation shall: (a) Surrender to the commissioner for cancellation the certificates of authority or licenses issued by the commissioner to the disappearing depository corporation. (b) File with the commissioner any report regarding the merger that the commissioner may require.


4908.10. (a) After a merger becomes effective, the surviving depository corporation may issue an officers' certificate, stating that the disappearing depository corporation merged into the surviving depository corporation and specifying the time at which the merger became effective. (b) Any certificate issued pursuant to subdivision (a) shall be prima facie evidence of the fact of the merger and of the regularity of the proceedings taken for the merger and shall be conclusive evidence of the matters in favor of any innocent purchaser or encumbrancer for value.


Chapter 5. Conversion

Article 1. Conversion Of California State Depository Corporation Into California State Depository

Corporation Ca Codes (fin:4920-4930) Financial Code Section 4920-4930



4920. In this article, unless the context otherwise requires, "conversion" means any of the conversions described in Section 4921.


4921. With the approval of the commissioner, a California state depository corporation of any class may convert into a California state depository corporation of another class pursuant to this article.

4922. (a) A converting depository corporation shall adopt, and shall file with the commissioner an application for approval of, such amendments to its articles as may be necessary to carry out the conversion. Section 904 of the Corporations Code shall not apply to the amendments. (b) A converting depository corporation shall adopt, and shall file with the commissioner an application for approval of, such amendments to its bylaws as may be necessary to carry out the conversion. The amendments shall not take effect until they are approved by the commissioner and the conversion becomes effective.


4923. In obtaining the approval of outstanding shares or shareholders required for any amendment to articles or bylaws called for in Section 4922, a converting depository corporation shall provide to its shareholders information as the commissioner may require. In determining the information to be required, the commissioner shall give due consideration to regulations relating to proxy statements issued under Section 14 of the Securities Exchange Act of 1934 (15 U.S.C. Sec. 78n) by (a) the Securities and Exchange Commission, (b) in the case of a depository corporation that is a bank, the federal bank regulatory agencies, and (c) in the case of a depository corporation that is a savings association, the Office of Thrift Supervision.


4924. A converting depository corporation shall file with the commissioner an application for approval of the conversion.


4925. If the commissioner finds all of the following with respect to an application for approval of a conversion, the commissioner shall approve the application: (a) That the shareholders equity of the resulting depository corporation will be adequate and that the financial condition of the resulting depository corporation will be satisfactory. (b) That the directors, executive officers, and any controlling person of the resulting corporation will be satisfactory. (c) That the name of the resulting depository corporation will not resemble so closely as to be likely to cause confusion the name of any other bank, savings association, or industrial loan company, as the case may be, that is transacting or has recently transacted business in this state. (d) That the resulting depository corporation will afford reasonable promise of successful operation and that it is reasonable to believe that the resulting depository corporation will be operated in a safe and sound manner and in compliance with all applicable laws. (e) In the case of a conversion of a California state savings association, that the conversion will not have a seriously adverse effect on the total availability of financing for housing in any market area of the converting savings association in this state or that any effect of that type is clearly outweighed in the public interest by the probable effect of the conversion in meeting the convenience and needs of the community to be served. Nothing in this subdivision authorizes the commissioner to require the resulting depository corporation to make financing for housing available. If the commissioner finds otherwise, the commissioner shall deny the application for approval of the conversion.


4927. After an application for approval of a conversion has been approved and all conditions precedent to the conversion have been fulfilled, the commissioner shall approve the amendments to the articles of the converting depository corporation called for in Section 4922, endorse the approval on the certificate of amendment or other instrument containing the amendments, and specify the time at which the certificate of amendment or other instrument is to be filed with the Secretary of State. The certificate of amendment or other instrument shall be filed with the Secretary of State at the time so specified by the commissioner, and at the time of the filing, the conversion shall become effective for all purposes.


4928. When a conversion becomes effective, the commissioner shall: (a) (1) In case the resulting depository corporation is a California state bank, issue to the resulting depository corporation a certificate of authority authorizing it to transact commercial banking business or commercial banking business and trust business, as the case may be. (2) In case the resulting depository corporation is a California state savings association, issue to the resulting depository corporation a license authorizing it to transact business as a state savings association. (3) In case the resulting depository corporation is a California industrial loan company, issue to the resulting depository corporation a certificate of authority authorizing it to transact business as an industrial loan company. (b) In any case, issue to the resulting depository corporation certificates of authority, licenses, or other appropriate authorizations for the branch offices, places of business, extensions of offices, and other facilities, if any, that the converting depository corporation was operating and that the resulting depository corporation is to continue to operate.


4929. Promptly after a conversion becomes effective, the resulting depository corporation shall: (a) Surrender to the commissioner for cancellation the certificates of authority or licenses issued to the converting depository corporation by the commissioner; and (b) File with the commissioner such report regarding the conversion as the commissioner may require.


4930. (a) After a conversion becomes effective, the commissioner shall issue, upon application, a certificate under his or her official seal, stating that the converting depository corporation converted into the resulting depository corporation and specifying the time at which the conversion became effective. (b) Any certificate issued pursuant to subdivision (a) shall be prima facie evidence of the fact of the conversion and of the regularity of the proceedings taken for the conversion and shall be conclusive evidence of such matters in favor of any innocent purchaser or encumbrancer for value.


Article 2. Conversion Of Federal Depository Corporation Into California State Depository Corporation

Ca Codes (fin:4940-4952) Financial Code Section 4940-4952



4940. In this article, unless the context otherwise requires, "conversion" means any of the conversions described in Section 4941.


4941. With the approval of the commissioner: (a) A national banking association may convert into a California state bank pursuant to this article and federal law. (b) A federal depository corporation of any class may convert into a California state depository corporation of another class pursuant to federal law and this article.


4942. A converting depository corporation shall adopt a plan of conversion pursuant to the provisions of federal law.


4943. In obtaining any approval of outstanding shares required for a plan of conversion, a converting depository corporation shall provide to its shareholders information as the commissioner may require. In determining the information to be required, the commissioner shall give due consideration to regulations relating to proxy statements issued under Section 14 of the Securities Exchange Act of 1934 (15 U.S.C. Sec. 78n) by (a) the Securities and Exchange Commission, (b) in the case of a depository corporation that is a bank, the federal bank regulatory agencies, and (c) in the case of a depository corporation that is a savings association, the Office of Thrift Supervision.


4944. A converting depository corporation shall file the following with the commissioner: (a) The plan of conversion. (b) An officer's certificate certifying that the plan of conversion has been approved as required by federal law. (c) An application for approval of the conversion.


4945. If the commissioner finds all of the factors set forth in Section 4925 with respect to an application for approval of a conversion, the commissioner shall approve the application. If the commissioner finds otherwise, the commissioner shall deny the application for approval of the conversion.


4946. After an application for approval of a conversion has been approved by the commissioner but before the conversion becomes effective, the converting depository corporation shall file with the commissioner an application for approval of the articles of the resulting depository corporation. When the commissioner approves the articles, the commissioner shall endorse the approval on the articles. After the articles are filed with the Secretary of State, the resulting depository corporation shall file with the commissioner a copy of the articles certified by the Secretary of State.


4948. (a) After an application for approval of a conversion has been approved and all conditions precedent to the conversion have been fulfilled, the commissioner shall: (1) In case the resulting depository corporation is a California state bank, issue to the resulting depository corporation a certificate of authority authorizing it to transact commercial banking business or commercial banking business and trust business, as the case may be. (2) In case the resulting depository corporation is a California state savings association, issue to the resulting depository corporation a license authorizing it to transact business as a California state savings association. (3) In case the resulting depository corporation is a California industrial loan company, issue to the resulting depository corporation a certificate of authority authorizing it to transact business as an industrial loan company. (b) Upon the issuance of the certificate of authority or license pursuant to subdivision (a), the conversion shall become effective for all purposes.


4949. When a conversion becomes effective, the commissioner shall issue to the resulting depository corporation certificates of authority, licenses, or other appropriate authorizations for the branch offices, places of business, extensions of offices, and other facilities, if any, that the converting depository corporation was operating and that the resulting depository corporation is to continue to operate.


4950. When a conversion becomes effective: (a) The converting depository corporation shall cease to exist. (b) The resulting depository corporation shall succeed, without other transfer, to all the rights and property of the converting depository corporation and shall be subject to all the debts and liabilities of the converting depository corporation in the same manner as if the resulting depository corporation had itself incurred them. (c) All rights of creditors of the converting depository corporation and all liens upon the property of the converting depository corporation shall be preserved unimpaired, provided that such liens upon the property of the converting depository corporation shall be limited to the property affected thereby immediately prior to the time when the conversion becomes effective. (d) Any action or proceeding pending by or against the converting depository corporation may be prosecuted to judgment, which shall bind the resulting depository corporation, or the resulting depository corporation may be proceeded against or substituted in place of the converting depository corporation. (e) Any reference to the converting depository corporation in any writing, whether executed or taking effect before or after the conversion, shall be deemed a reference to the resulting depository corporation if not inconsistent with the other provisions of such writing. (f) In case the converting depository corporation was transacting trust business, the resulting depository corporation shall succeed, without further transfer, to the rights, obligations, properties, assets, investments, deposits, demands, agreements, and trusts of the converting depository corporation under all trusts, executorships, administrations, guardianships, agencies, and all other fiduciary or representative capacities to the same extent as if the resulting depository corporation had originally assumed such fiduciary or representative capacities, and the resulting depository corporation shall be entitled to take and execute the appointment to all executorships, trusteeships, guardianships, and other fiduciary or representative capacities to which the converting depository corporation is or may be named in wills, whenever probated, or to which the converting depository corporation is or may be named or appointed by any other instrument.


4951. Promptly after a conversion becomes effective, the resulting depository corporation shall: (a) Surrender to the regulator of the converting depository corporation for cancellation the certificates of authority or licenses issued to the converting depository corporation by the regulator; and (b) File with the regulator of the converting depository corporation such report regarding the conversion as the regulator may require.

4952. (a) After a conversion becomes effective, the commissioner shall issue, upon application, a certificate under his or her official seal, stating that the converting depository corporation was converted into the resulting depository corporation and specifying the time at which the conversion became effective. (b) Any certificate issued pursuant to subdivision (a) shall be prima facie evidence of the fact of the conversion and of the regularity of the proceedings taken for the conversion and shall be conclusive evidence of such matters in favor of any innocent purchaser or encumbrancer for value.


Article 3. Conversion Of California State Depository Corporation Into Federal Depository Corporation

Ca Codes (fin:4960-4966) Financial Code Section 4960-4966



4960. In this article, unless the context otherwise requires, "conversion" means any of the conversions described in Section 4961.


4961. (a) A California state bank may convert into a national banking association pursuant to this article and federal law. (b) A California state depository corporation of any class may convert into a federal depository corporation of another class pursuant to this article and federal law.


4961.5. (a) No provision of Division 1 (commencing with Section 99), except the provisions of Chapter 22 (commencing with Section 3800) of Division 1, prohibits or restricts the conversion of a California state bank. (b) No provision of Division 2 (commencing with Section 5000) prohibits or restricts the conversion of a California state savings and loan association. (c) No provision of Division 7 (commencing with Section 18000), except the provisions of Chapter 10 (commencing with Section 18660) of Division 7, prohibits or restricts the conversion of a California industrial loan company.


4962. (a) A converting depository corporation shall make a plan of conversion, stating: (1) That the converting depository corporation shall be converted into the resulting depository corporation. (2) Proposed articles of the resulting depository corporation. (3) Manner of converting the securities of the converting depository corporation into securities of the resulting depository corporation. (4) Such other provisions as may be appropriate. (b) (1) The plan of conversion shall be approved by the board of the converting depository corporation, and the principal terms of the plan of conversion shall be approved by the outstanding shares of the converting depository corporation. (2) (A) Any amendment to the plan of conversion shall be approved by the board of the converting depository corporation and, if the amendment changes any of the principal terms of the plan of conversion, by the outstanding shares of the converting depository corporation. (B) If the plan of conversion is amended and if the amendment is approved as required by subparagraph (A), the plan of conversion, as thus amended, shall constitute the plan of conversion. (3) Any approval of the outstanding shares of the converting depository corporation required by this subdivision may be given before or after the approval of the board of the converting depository corporation. (c) The board of the converting depository corporation may, in its discretion and without further approval of the outstanding shares, abandon the conversion at any time before the conversion becomes effective.

4963. A conversion shall have the same effect as provided in Section 4950 in the case of a conversion of the type defined in Section 4940.

4964. Promptly after a conversion becomes effective, the resulting depository corporation shall: (a) Surrender to the commissioner for cancellation the certificates of authority or licenses issued by the commissioner to the converting depository corporation; and (b) File with the commissioner such report of the conversion as the commissioner may require.


4965. (a) After a conversion becomes effective, the resulting depository corporation may issue an officers' certificate, stating that the converting depository corporation converted into the resulting depository corporation and specifying the time at which the conversion became effective. (b) Any certificate issued pursuant to subdivision (a) shall be prima facie evidence of the fact of the conversion and of the regularity of the proceedings taken for the conversion and shall be conclusive evidence of such matters in favor of any innocent purchaser or encumbrancer for value.


4966. (a) Within 60 days after a conversion, the resulting depository corporation shall file with the Secretary of State an officers' certificate reciting the name of the converting depository corporation, the name of the resulting depository corporation, the effective date of the conversion, and that the conversion has been completed in compliance with the provisions of federal law. The Secretary of State shall enter the fact of the conversion on the Secretary of State's corporation records for the converting depository corporation, and the converting depository corporation shall thereafter not be deemed to be a corporation organized under the laws of this state. (b) As to any conversion, whenever effected, if an officers' certificate has not been filed pursuant to subdivision (a) within 60 days after the completion of the conversion, the commissioner may file a report with the Secretary of State setting forth, to the extent the commissioner has knowledge he or she considers reliable, the recitals specified in subdivision (a), and the Secretary of State shall record the fact of the conversion with the same effect as provided in subdivision (a).


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