Section 1609 - Mergers, consolidations and conversions of savings banks(a) Authority to merge, consolidate or convert--(i) upon compliance with the requirements of sections 1602, 1603, 1604, 1605 and 1606, a savings bank may enter into a merger or consolidation with one or more other savings banks. In the event the book value of the total assets of the acquired savings bank is less than one percent in excess of the book value of the total liabilities, the resulting institution may maintain as a branch, any office operated by the acquired institution.(ii) upon compliance with the requirements of this section and other applicable law, one or more savings banks and one or more associations may merge into a savings bank or consolidate into a new savings bank . The word "association" in this chapter shall mean an association subject to the Savings Association Code of 1967.(iii) upon compliance with the requirements of this section and other applicable law, (A) one or more savings banks, one or more Federal savings banks and one or more Federal savings and loan associations may merge into a savings bank, Federal savings bank or a Federal savings and loan association or consolidate into a new savings bank, a new Federal savings bank or a new Federal savings and loan association, and(B) [Deleted by 2012 Amendment.](C) a business corporation which owns all of the issued and outstanding shares of a savings bank may merge into such savings bank.(iv) the authority of a savings bank to merge or consolidate into a Federal savings bank or Federal savings and loan association shall be subject to the condition that at the time of the transaction the laws of the United States shall authorize a Federal savings bank or Federal savings and loan association to merge or consolidate into a savings bank.(v) upon compliance with the requirements of this section and other applicable law,(A) [Deleted by 2012 Amendment.](B) a savings bank may be converted into a Federal savings bank or a Federal savings and loan association, subject to the condition that at the time of the transaction the laws of the United States shall authorize a Federal savings bank or a Federal savings and loan association to convert into a savings bank, or(C)an association may convert to a savings bank.(vi) upon compliance with the requirements of this section and other applicable law and subject to the laws of the United States, a Federal savings bank or a Federal savings and loan association may be converted into a savings bank.(vii) upon compliance with the requirements of this section, a mutual savings bank may be converted into a stock savings bank. A stock savings bank shall have authority, upon compliance with the requirements of this section, to enter into a merger or consolidation with one or more other stock savings banks, banks, national banking associations, bank and trust companies, trust companies or stock savings and loan associations.(viii) all mergers, consolidations and conversions in which the resulting corporation is a savings bank or an association shall be subject to the approval of the department.(ix) upon compliance with the requirements of 12 CFR Pt. 708a (relating to bank conversions and mergers), other applicable law and this section, a Federal or State credit union may convert to a mutual savings bank.(x) upon compliance with the requirements of this section and other applicable law,(A) a bank or bank and trust company may be converted into a stock savings bank, provided, in the case of a bank and trust company, that the resulting savings bank will have fiduciary powers, or(B) a savings bank may be converted into a bank or a bank and trust company.(b) Requirements for a merger, consolidation or conversion-- The requirements for a merger, consolidation or conversion under clauses (ii), (iii), (v), (vi) , (vii), (ix) or (x) of subsection (a) which must be satisfied by the parties thereto are as follows:(i) the parties shall adopt a plan stating the method, terms and conditions of the merger, consolidation or conversion, including the rights under the plan of the members, depositors and shareholders, if any, of each of the parties, and any agreement concerning the merger or consolidation.(ii) if the proposed merger, consolidation or conversion will result in a Federal savings bank, a savings bank or a Federal savings and loan association , adoption of the plan by each party thereto shall require the affirmative vote, (A) in the case of a mutual savings bank, of at least two-thirds of the trustees present at a meeting at which the plan is proposed, and two-thirds of all the trustees at a subsequent meeting held upon not less than ten days' notice to all the trustees,(B) in the case of a stock savings bank, of at least a majority of the trustees, at a meeting held upon not less than ten days' notice to all the trustees, and of the shareholders entitled to cast at least two-thirds of the votes which all shareholders are entitled to cast thereon, at a meeting held upon not less than ten days' notice to all shareholders,(C) in the case of a Federal savings bank, a federal savings and loan association or an association, of two-thirds of the entire membership of the board of directors,(D) in the case of any other party, such vote as is required by law for merger, consolidation or conversion, and(E) in the case of the notice required to be given to the trustees of a savings bank and to the shareholders of a stock savings bank shall include a copy or summary of the plan. The department may require such vote of the members of an association as it deems proper.(iii) any modification of a plan which has been adopted shall be made by any method provided therein, or in the absence of such provision by the same vote as that required for adoption.(iv) if a proposed merger, consolidation or conversion will result in a savings bank , an application for the required approval thereof by the department shall be made in a manner prescribed by the department. The department may require notice to be given to such persons as it designates. There shall also be delivered to the department: (A) articles of merger, consolidation or conversion,(B) applicable fees payable to the department in connection with the articles and with the conduct of the investigation required by subsection (e),(C)[Deleted by 2012 Amendment.](D) if the proposed name of the resulting savings bank or association is not identical with the name of one of the parties to the plan, evidence of reservation of such name in the Department of State, and(E) if there is any modification of the plan at any time prior to the approval by the department, an amendment of the application and, if necessary, of the articles, signed in the same manner as the originals, setting forth the modification of the plan, the method by which such modification was adopted and any related change in the provisions of the articles of merger, consolidation or conversion.(v) if a proposed merger, consolidation or conversion will result in a national banking association, all requirements of the applicable Federal Law shall be met.(c) Articles of merger, consolidation or conversion--The articles of a merger, consolidation or conversion under clauses (ii), (iii), (v), (vi), (vii), (ix) or (x) of subsection (a) shall be signed by two duly authorized officers of each party to the plan and shall contain:(i) the names of the parties to the plan and of the resulting savings bank,(ii) the location and post office address of the principal place of business of each,(iii) the votes by which the plan was adopted and the time, place and notice of each meeting in connection with such adoption,(iv) the names and addresses of the first trustees of the savings bank,(v) in case of a merger, any amendment of the articles of the resulting savings bank,(vi) [Deleted by 2012 Amendment.](vii) in the case of a consolidation, the provisions required in articles of incorporation of a new savings bank as the case may be,(viii) in the case of a conversion, the provisions required in the articles of incorporation of a new savings bank as the case may be,(d) Action where approval by department not required--If a proposed merger, consolidation or conversion will result in a Federal savings bank or a Federal savings and loan association, a savings bank which is a party to a plan shall: (i) notify the department of the proposed merger, consolidation or conversion,(ii) provide such evidence of the adoption of the plan as the department may request,(iii) notify the department of any abandonment or disapproval of the plan,(iv) file with the department and with the Department of State a certificate of the approval of the merger, consolidation or conversion by the Federal Home Loan Bank Board or its successor which has the right on behalf of the United States to approve such mergers, consolidations or conversions into Federal savings banks or Federal savings and loan associations.(e) Approval of merger, consolidation or conversion by department--(i) upon receipt of an application for approval of a merger, consolidation or conversion under clauses (ii), (iii), (v), (vi), (vii), (ix) or (x) of subsection (a) and of the supporting items required by clause (iv) of subsection (b), the department shall conduct such investigation as it may deem necessary to ascertain whether: (A) the articles of merger, consolidation or conversion and supporting items satisfy the requirements of this act, (B) the name of the resulting, new or converted savings bank conforms with the requirements of law,(C) the plan and any modification thereof adequately protect the interests of depositors, other creditors and shareholders, if any, of a savings bank which is a party to the plan,(D) the requirements for a merger, consolidation or conversion under all applicable laws have been satisfied and the resulting corporation would satisfy the requirements of this act applicable to it, and(E) the merger, consolidation or conversion would be consistent with adequate and sound banking and in the public interest on the basis of (1) the financial history and condition of the parties to the plan,(3) the character of their management,(4) the potential effect of the merger, consolidation or conversion on competition, and(5) the convenience and needs of the area primarily to be served by the resulting corporation.(ii) within sixty days after receipt of the application, articles of merger, consolidation or conversion and the applicable fee payable to the department, or within an additional period of not more than thirty days an amendment to the application the department shall approve or disapprove the application on the basis of its investigation. The department shall immediately give to the parties to the plan written notice of its decision and, in the event of disapproval, a statement in detail of the reasons for its decision.(f) Procedure after approval by department; issuance of certificate of merger consolidation or conversion--(i) if the laws of the United States require the approval of the merger, consolidation or conversion by any Federal agency, the department shall after its approval retain the articles of merger, consolidation or conversion until it receives notice of the decision of such agency. If such agency shall refuse to give its approval, the department shall notify the parties to the plan that the department's approval has been rescinded for that reason. If such agency gives its approval the Department of Banking shall immediately deliver the articles of merger, consolidation or conversion with its written approval to the Department of State for filing as of a date and time specified by the Department of Banking and shall notify the parties to the plan.(ii) if all the taxes, fees and charges required by law shall have been paid and if the name of the resulting savings bank continues to be reserved or is available on the records of the Department of State, the receipt of the articles by the Department of State with the written approval of the Department of Banking shall constitute filing of the articles of merger, consolidation or conversion as of the date and time of receipt or as of any later date and time specified by the Department of Banking. The Department of State shall issue to the resulting corporation a certificate of merger, consolidation or conversion as of the date and time of filing with the approved articles of merger, consolidation or conversion attached thereto and shall make and retain a copy of such certificate and articles.(g) Effect of merger, consolidation or conversion--(i) as of the filing of the articles of merger, consolidation or conversion in the Department of State, the merger, consolidation or conversion shall be effective.(ii) the certificate of merger, consolidation or conversion shall be conclusive evidence of the performance of all conditions precedent to the merger, consolidation or conversion and of the existence or creation of the resulting savings bank, except as against the Commonwealth.(iii) when a merger, consolidation or conversion becomes effective, the existence of each party to the plan, except the resulting savings bank, shall cease as a separate entity but shall continue in, and the parties to the plan shall be, a single corporation which shall be the resulting savings bank and which shall have without further act or deed, all the property, rights, powers, duties and obligations of each party to the plan.(iv) the articles of the resulting savings bank shall be, in the case of a merger, the same as its articles prior to the merger with any change stated in the articles of merger, or in the case of a consolidation, the provisions stated in the articles of consolidation.(v) if the resulting corporation shall be a savings bank it shall engage only in such business and it shall have only such powers as it would have if it had been originally incorporated under this act, except that it may engage in any business and exercise any right that any party to the plan which was an institution subject to this act could lawfully exercise or engage in immediately prior to the merger, consolidation or conversion.(vi) no liability of any party to the plan or of its trustees, officers, members or directors shall be affected, nor shall any lien on any property of a party to the plan be impaired, by the merger, consolidation or conversion. Any claim existing or action pending by or against any party to the plan may be prosecuted to judgment as if the merger, consolidation or conversion had not taken place or the resulting corporation may be substituted in its place.(h) Rights of depositors or shareholders in a merger, consolidation or conversion--A depositor of a mutual savings bank that is a party to the plan shall be entitled to notification of the effective date of the merger, consolidation or conversion and shall have the right, within thirty days of the receipt of such notice, to make written claim for payment in full of his deposit account together with all interest accrued thereon to the date of withdrawal, less any penalties payable under Federal law. A shareholder of a stock savings bank that is a party to a plan which will result in an institution subject to this act who objects to the plan shall be entitled to the rights and remedies of a dissenting shareholder provided under, and subject to compliance with, the provisions of section 1222.(i) [Deleted by 2012 Amendment.] (j) In the event of conversion by a mutual savings bank to a stock savings bank, all depositors shall be given a preemptive right to purchase stock. The preemptive right to depositors shall be nonassignable. The department, by regulation, may define the rights and prescribe the terms on which they may be exercised. In the event the book value of the total assets of the savings bank, determined in accordance with generally accepted accounting principles, is less than two percent in excess of the book value of its total liabilities, no preemptive rights will be given depositors, unless determined to be in the public interest by the Secretary of Banking. A stock savings bank which has converted from a mutual savings bank may not be voluntarily liquidated for a period of ten years from the date of conversion.Amended by P.L. 1336 2012 No. 170, § 50, eff. 12/23/2012.1965, Nov. 30, P.L. 847, § 1609, added 1969, Aug. 1, P.L. 211, § 2. Affected 1971, June 3, P.L. 145, No. 6, §1 ( § 509(a)(172) ). Amended 1982 , April 8, P.L. 262, No. 79, § 18, imd. effective; 1984 , July 6, P.L. 606, No. 125, § 8, imd. effective; 1984 , July 6, P.L. 621, No. 128, § 10, imd. effective; 1986 , July 10, P.L. 1393, No. 119, § 1, imd. effective; 1986 Dec. 18, P.L. 1702, No. 205, § 13, imd. effective; 1990, Dec. 18, P.L. 766, No. 191, § 9, imd. effective; 1994, June 16, P.L. 346, No. 51, § 3, imd. effective.