Tenn. Comp. R. & Regs. 0180-07-.06 - FORMATION OF INTERIM BANKS

(1) Definitions. An "interim bank merger" is the technique by which a bank holding company obtains a new bank charter solely for the purpose of merging an existing bank into the bank for which the charter is sought or solely for the purpose of merging the bank for which the charter is sought into an existing bank; the technique is a transaction intended to qualify the exchange of stock between the bank holding company and the stockholders of the existing bank as a reorganization within the meaning of § 368 (a) of the Internal Revenue Code of 1954, as amended (U.S.C., Title 26, § 368 (a)).
(2) Capital Structure. An interim bank shall have such capital structure as will meet the expenses of organization of the interim bank, but not less than $1,000. The capital requirements contained in T.C.A. § 45-2-207 do not apply to an interim bank.
(3) Application Procedure. Application forms for the creation of an interim bank may be obtained from the Department of Financial Institutions. The application should include a description of the reorganization, including the reasons therefore. Financial information of the incorporators need not be furnished if they are executive officers or directors of the existing bank. Public notice shall be made in accordance with Chapter 0180-5.
(4) Decisions. Preliminary approval of all interim banks will be specifically conditioned on approval of the subsequent merger or consolidation. This preliminary approval will be rescinded automatically if the merger or consolidation is not filed within six (6) months of preliminary approval of the interim bank; the preliminary approval shall automatically be withdrawn unless an extension has been requested and granted by the Commissioner of Financial Institutions.
(5) Subsequent Merger or Consolidation. When the formation of the interim bank has been approved by the Commissioner of Financial Institutions and the filing fee received, the interim bank becomes a body corporate and may then legally enter into the merger or consolidation agreement.
(6) Interim Bank as Survivor. If, after the merger or consolidation, the interim bank, rather than the existing bank, is the surviving bank, the certificate of authority issued to the existing bank shall be endorsed over to the surviving bank and the surviving bank shall therefore have the age of the existing bank.

Notes

Tenn. Comp. R. & Regs. 0180-07-.06
Original rule filed September 30, 1983; effective December 14, 1983. Amendment filed February 17, 1984; effective May 15, 1984. Amendment filed December 30, 1992; effective March 31, 1993. Amendment filed October 19, 2000; effective February 28, 2001. Amendment filed November 30, 2001; effective March 30, 2002.

Authority: T.C.A. §§ 45-1-107, 45-2-204(c), 45-2-204(e), and 45-2-1403.

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