Organization and Corporate Functions

C.R.S. tit. 11, art. 103

in effect

C.R.S. § 11-103-101 General corporate powers

11-103-101. General corporate powers. (1) A state bank may be organized to exercise the powers provided in this code. (2) Subject to the provisions of section 11-103-102, a state bank organized under the laws of this state shall, without specific mention thereof in its charter, have all the powers conferred by this code and the following additional general corporate powers: (a) To continue perpetually as a corporation; (b) To make contracts; (c) To sue and be sued, complain, and defend in its corporate name; (d) To have a corporate seal, which may be altered at pleasure, and to use the same by causing it or a facsimile thereof to be impressed or affixed, or in any manner reproduced; (e) To make, alter, amend, and repeal bylaws, not inconsistent with its charter or with law, for the administration and regulation of the affairs of the corporation; (f) To elect, appoint, or remove officers and agents of the bank and to define their duties and fix their compensation; (g) To adopt and operate reasonable bonus, profit-sharing, and pension plans for officers and employees; (h) To grant, subject to approval of the banking board, and by vote of two-thirds of the outstanding voting stock voted at a meeting of the stockholders, options to purchase, sell, or enter into agreements to sell shares of its capital stock to its employees, whether or not such transactions qualify for special tax treatment under the "Internal Revenue Code", as amended, and rules promulgated thereunder. (3) A state bank, organized under the laws of this state, if so provided in its charter, has the general corporate power to eliminate or limit the personal liability of a director to the corporation or to its stockholders for monetary damages for breach of fiduciary duty as a director; except that such provision shall not eliminate or limit the liability of a director to the corporation or to its shareholders for monetary damages for: Any breach of the director's duty of loyalty to the corporation or its stockholders, acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, or any transaction from which the director derived an improper personal benefit. No such provision shall eliminate or limit the liability of a director to the corporation or to its shareholders for monetary damages for any act or omission occurring prior to the date when such provision becomes effective. (4) A state bank, organized under the laws of this state, without specific mention in its charter, shall also have the power, in addition to all other powers, to make contributions to, or for the use or benefit of, the following: (a) The United States, any state, territory, or political subdivision thereof, the District of Columbia, or any possession of the United States for exclusively public purposes; (b) A corporation, foundation, trust, community chest, or other organization created or organized in the United States, or in any state or territory, or the District of Columbia, or any possession of the United States, and organized and operated exclusively for religious, charitable, scientific, veteran rehabilitation service, civic enterprise, or literary or educational purposes, or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, and no substantial part of the activities of which is carrying on propaganda or otherwise attempting to influence legislation; or , charitable, scientific, veteran rehabilitation service, civic enterprise, or literary or educational purposes, or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, and no substantial part of the activities of which is carrying on propaganda or otherwise attempting to influence legislation; or (c) Other lawful expenditures, contributions, and donations to the extent authorized, approved, or ratified by action of the board of directors of the corporation, except as otherwise specifically provided or limited by its articles of incorporation, its bylaws, or resolution duly adopted by its stockholders. (5) A state bank organized under the laws of this state, without specific mention in its charter, shall also have the power to act as escrow agent. (6) If the name of a state bank organized under the laws of this state contains the word "bank", said bank need not comply with the requirements of part 6 of article 90 of title 7, C.R.S. (7) No state bank shall commit itself, either directly or indirectly, to undertake the responsibility for the tax liability of its shareholders or members.

C.R.S. § 11-103-102 Trust, fiduciary, and agency powers - when authorized

11-103-102. Trust, fiduciary, and agency powers - when authorized. In addition to its other powers, a state bank that is authorized by its charter to exercise trust powers, upon proper qualification under this code, has the power to act as a fiduciary in any capacity. It may also act as registrar, transfer agent, fiscal agent, or attorney-in-fact and have the power to receive, manage, and apply sinking funds. Every state bank that is authorized by its charter to exercise trust powers pursuant to this section shall make and file with the commissioner an annual report of trust assets and such other reports as the banking board may require by rule, on such forms as may be prescribed by the banking board. No report filed pursuant to this section shall be required to be published.

C.R.S. § 11-103-103 State bank organized as a limited liability company

11-103-103. State bank organized as a limited liability company. (1) Pursuant to section 11-102-104 (5.5)(a), a state bank charter may be issued to a limited liability company that otherwise meets the requirements of this code. (2) A state bank organized as a limited liability company shall not be required to exist in perpetuity; except that the articles of organization of such a state bank shall provide for a method to extend the existence of the state bank in the event that termination occurs. In addition, the articles of organization of such a state bank shall require that liquidation of the limited liability company conform with the requirements of this code. (3) Upon approval of the banking board, a state bank organized as a limited liability company may be merged with or converted into another entity regardless of the form of the surviving entity, so long as the surviving entity satisfies the requirements of this code. (4) Upon approval of the banking board, a state bank organized as a corporation may be merged with or converted into a limited liability company, so long as it satisfies the requirements of this code. (5) (a) A state bank organized as a limited liability company shall have a written operating agreement containing any provisions for the affairs of the bank and the conduct of its business as may be agreed upon by the members and which provisions are consistent with this code and the "Colorado Limited Liability Company Act", article 80 of title 7, C.R.S. (b) A copy of the written operating agreement shall be filed with the banking board prior to the granting of a charter to the state bank, and any amendments to the operating agreement shall be filed with and approved by the banking board prior to adoption. (c) The banking board may promulgate rules establishing additional requirements relating to operating agreements to implement the provisions of this section. (6) All distributions made by a state bank organized as a limited liability company to its members shall be subject to the requirements applicable to dividends issued by a state bank organized as a corporation under this code and the rules of the banking board. (7) For purposes of implementing this section, the following definition constructions shall apply: (a) Where this code refers to "articles of incorporation", that term shall be construed to apply to a limited liability company's articles of organization, as that term is defined in section 7-80-102 (1), C.R.S.; (b) Where this code refers to "bylaws", that term shall be construed to apply to a limited liability company's operating agreement, as that term is defined in section 7-80-102 (11), C.R.S.; (c) Where this code refers to "common stock" or "shares" of a state bank, such terms shall be construed to apply to a limited liability company's membership interests; (d) Where this code refers to a "corporation", such term shall be construed to include a limited liability company organized under the "Colorado Limited Liability Company Act", article 80 of title 7, C.R.S., which limited liability company conforms to this section and the requirements established by the banking board pursuant to section 11-102-104 (5.5); (e) Where this code refers to a "director" or a "board of directors" of a state bank, such terms shall be construed to apply to a manager or the managers of a limited liability company; (f) Where this code refers to an "incorporator", such term shall be construed to apply to the organizers of a limited liability company; (g) Where this code refers to a "shareholder" or a "stockholder" of a state bank, such terms shall be construed to apply to a member of a limited liability company.

C.R.S. § 11-103-201 Capital

11-103-201. Capital. The banking board shall establish by rule the capital standards and guidelines, the methods for measuring capital, and the definitions of "capital", "capital adequacy", "capital inadequacy", and other related terms for banks subject to this code, that may differ for specific purposes. In promulgating such rules, the banking board shall consider all relevant factors, including, without limitation, the policies set forth in section 11-101-102 and relevant federal laws and rules. Each bank subject to this code shall at all times comply with the capital rules promulgated by the banking board.

C.R.S. § 11-103-202 Inadequacy of capital - assessments

11-103-202. Inadequacy of capital - assessments. (1) If the banking board has reason to believe that the capital of any bank is inadequate under the rules of the banking board, the banking board may ascertain the facts and furnish the bank with a copy of its determination. If the banking board determines an inadequacy of capital based upon such determination, the commissioner, with the approval of the banking board, may direct the state bank to levy an assessment in a designated amount upon the holders of record of common stock to remedy an inadequacy of capital. Upon receipt of an order to levy an assessment, the directors shall cause to be sent to all holders of common stock, at their addresses, a copy of the order and a copy of this subsection (1). If an assessment is not paid within the time prescribed in the order or such shorter period as the directors decide, but not less than thirty days, the state bank may, within sixty days thereafter as the banking board may prescribe in its order, offer the shares of the defaulting stockholders for sale at public auction or private sale at a price that shall not be less than the amount of the assessment and the cost of the sale. Any excess shall be paid to the prior owners. Except under circumstances where section 11-103-203 applies, the method of collection provided in this section shall be the sole method of collecting assessments. If an assessment is not paid within ninety days after the date of the order to levy or at such other date as may be specified in the order, but in no event less than thirty days, the commissioner may, with the approval of the banking board, proceed pursuant to part 8 of this article; however, for good cause shown to the banking board by the affected bank, the banking board may extend the ninety-day limit. (2) If the banking board determines that the capital or reserves of any bank are inadequate, the banking board may order the bank not to make new loans or discounts.

C.R.S. § 11-103-203 Liability of shareholders

11-103-203. Liability of shareholders. (1) The shareholders of every state bank shall be held individually responsible, equally and ratably, and not for another, for all contracts, debts, and engagements of said bank, to the extent of double the amount of their stock therein, at the par value thereof, in addition to the amount invested in such shares. (2) The term "shareholder" shall apply not only to such persons as appear on the books of the bank as shareholders, but also to every owner of stock, legal or equitable, although the stock may stand on such books in the name of another person, but not to a person who holds the stock as collateral security for the payment of a debt. (3) Any shareholder of any state bank who has transferred the shareholder's shares or caused such transfer to appear on the books of the bank within sixty days immediately preceding the capital inadequacy of such bank, or who has made such transfer with knowledge of such impending capital inadequacy, is liable to the same extent that the transferee or subsequent transferee fails to meet such liability. This section shall not be construed to affect in any way any recourse that such shareholder might otherwise have against those in whose names such shares appear upon the books of the bank at the time of such capital inadequacy. (4) If the capital of any state bank becomes inadequate, and its assets and affairs have been taken possession of by the banking board pursuant to this code, and the banking board is of the opinion that it will become necessary in the course of liquidation of such bank to resort to the liability of the shareholders as provided for in this section, in order to make good the contracts, debts, or engagements of such bank, it shall be lawful for the banking board to file in the office of the county clerk and recorder of any county in this state, wherein any real estate belonging to any shareholder of such bank is situated, a statement in writing to the effect that such person is a stockholder of such bank (naming it) and that such bank is in process of liquidation, and stating the number of shares held by such shareholder and their aggregate par value and the extent of such shareholder's liability under this code. (5) Such statement shall be duly endorsed as filed by such county clerk and recorder, giving the date of filing, and shall be indexed with the name of the shareholder as grantor and the name of the bank as grantee, and shall be recorded as mortgages of real estate are required to be recorded, and from the date of filing of such statement the same shall be a lien upon any real estate of such shareholder located in such county. (6) If such shareholder thereafter deposits with the banking board an amount of money equal to double the amount of the par value of the stakeholder's shares, to be held by the banking board as security for the shareholder's liability under this section, then the banking board shall execute and file with such county clerk and recorder a release of such lien and, upon completing the liquidation of such bank, shall return to such shareholder any excess of such deposit, if such shareholder's ultimate liability shall prove to be less than the amount so deposited with the banking board; and in all cases where the liability of the shareholder has been satisfied, either as the result of litigation or otherwise, such liens so filed shall be released by the banking board. The expense of filing and recording such liens and releases of the liens shall be paid out of any assets of the bank in the possession of the banking board. less than the amount so deposited with the banking board; and in all cases where the liability of the shareholder has been satisfied, either as the result of litigation or otherwise, such liens so filed shall be released by the banking board. The expense of filing and recording such liens and releases of the liens shall be paid out of any assets of the bank in the possession of the banking board. (7) The liability imposed by this section shall not extend to shareholders in any bank that has become a member of the federal deposit insurance corporation; but if any bank that has become a member of the federal deposit insurance corporation ceases to remain a member thereof, the double liability mentioned in this section shall extend to the shareholders in any such bank as provided in this section. (8) A stockholder of a state bank shall not set off against the stockholder's liability any claim the stockholder may have as a depositor in or creditor of any insolvent bank.

C.R.S. § 11-103-301 Incorporators

11-103-301. Incorporators. Five or more individual incorporators of a de novo bank or organizers of a converting bank desiring to organize or convert to a state bank must file with the banking board an application for charter on the form prescribed therefor and together with all other documents required by section 11-103-303, all of which instruments shall be duly signed by each of the incorporators or organizers and sworn to before an officer authorized by the laws of this state to administer oaths. A majority of the incorporators must be residents of the state and citizens of the United States. Each incorporator of a de novo bank shall, prior to the filing of said application, subscribe and pay in full in cash for stock having a par value of not less than one percent of the minimum capital and paid-in surplus requirements.

C.R.S. § 11-103-302 Application fees

11-103-302. Application fees. Each application for charter shall be accompanied by a fee established by the banking board pursuant to section 11-102-104 (11). The fee may be refunded to the incorporators if the application for charter is withdrawn prior to the date set for public hearing.

C.R.S. § 11-103-303 Application for de novo charter or charter conversion

11-103-303. Application for de novo charter or charter conversion. (1) After the capital stock has been fully subscribed, the incorporators may apply to the banking board for a de novo bank charter. The incorporators or organizers of the converting bank must submit to the banking board the following: (a) Its proposed articles of incorporation in duplicate, in such form as the banking board prescribes and as acceptable to the secretary of state for purposes of filing, containing the following information: The name of the state bank; whether the state bank is to exercise trust powers; the community in which it is to be located; the amount of capital, the number of shares of each class, the relative preferences, powers, and the rights of each class, the par value of the shares of each class, and the amount of the paid-in surplus; a statement whether voting for directors is or is not cumulative, and the extent of the preemptive rights of stockholders; and such other proper provisions to govern the business and affairs of the state bank as may be desired by the incorporators or organizers. (b) An application for a charter in such form and containing such information as the banking board requires, including but not limited to the following: The name, business and residence address, and business and professional affiliations of each director and executive officer; the name, residence, citizenship, and occupation of each subscriber or shareholder and the number of shares for which the subscriber or shareholder has subscribed or owns directly or indirectly; the past and present connection with any bank, other than as a customer, on terms generally available to the public of each director and each subscriber or shareholder to more than five percent of the capital stock, including beneficial interests; the amount to be borrowed and from whom borrowed on any stock issued to a subscriber to or shareholder of more than five percent of the capital stock; the address at which the converting bank's main office and existing branches are located or the address at which the de novo state bank proposes to do business or, if such address is not known, the area within a radius of one-half mile in which the proposed bank is to be located and the community that it proposes to serve; a statement that all the proposed bylaws have been attached as an exhibit to the application; and such other information as the banking board may reasonably require to enable it to determine whether a charter should be issued. The proposed bylaws must be attached to the application as an exhibit. (2) If the proposed articles of incorporation or application do not comply with the requirements of this code, and with the requirements of the banking board issued pursuant thereto, the banking board shall, within thirty days after the receipt thereof, return both of the documents to the incorporators or organizers, calling attention to the defects therein. If such articles of incorporation and application are not so returned by the banking board within thirty days after the receipt thereof, they shall be deemed to have been filed with the banking board as of the date received in its office; otherwise they shall be deemed filed as of the date the amended documents, with all defects corrected, are received in the commissioner's office. efects therein. If such articles of incorporation and application are not so returned by the banking board within thirty days after the receipt thereof, they shall be deemed to have been filed with the banking board as of the date received in its office; otherwise they shall be deemed filed as of the date the amended documents, with all defects corrected, are received in the commissioner's office. (3) Not more than forty days after the date upon which the completed application for a de novo state bank charter and all required documents are properly filed with the banking board, the banking board shall mail notice of such filing by registered or certified mail to each bank within a three-mile radius of the location of the proposed bank and to such other persons or banks as the banking board may designate. The notice must be in the form prescribed therefor by the banking board and must include a statement that an application for a state banking charter has been filed, the date of the filing, the names and addresses of the incorporators, and the location of the proposed bank. The banking board shall also cause such notice to be published, at least one time, not more than forty days after the date of filing the completed application, in a newspaper of general circulation within the community in which the proposed bank is to be located.

C.R.S. § 11-103-304 Procedure for granting or denying charter

11-103-304. Procedure for granting or denying charter. (1) Within sixty days following the filing of the completed application for a de novo charter or conversion of an established bank, the commissioner shall make or cause to be made a careful investigation to determine that the following requirements have been met: (a) That the applicant has proceeded in a lawful manner; (b) That the name is not deceptively similar to that of another bank or otherwise misleading; (c) That the persons who will serve as directors or officers, insofar as such persons are known, possess the qualifications and experience required under rules promulgated by the banking board and that the qualifications and financial status of the incorporators, directors, officers, and persons in control of the bank, as defined in section 11-102-302 (2), are consistent with their responsibilities and duties; (d) That the proposed capital satisfies the standards and guidelines in the rules promulgated by the banking board; (e) That the proposed or amended articles of incorporation and bylaws are appropriate or may be amended to be appropriate. (2) If the commissioner determines that any of the requirements in subsection (1) of this section have not been met in any respect, the commissioner shall notify the applicant of such deficiencies and of corrective measures deemed appropriate. Within six months after the filing of an application for charter, and prior to the hearing prescribed in subsection (3) of this section, the commissioner shall report to the banking board that the applicant has met all of the requirements of subsection (1) of this section, if such be the case, or shall report which requirements have been met and which have not been met, together with the circumstances respecting such deficiencies. This report shall be introduced by the banking board into the record of the hearing on such application. (3) (a) The banking board, within six months after the filing of an application for charter, and subject to subsection (7) of this section, shall hold a public hearing to consider the application; except that the banking board, for valid reasons and good cause, may postpone such hearing. At such hearing, the applicant for a de novo bank charter has the burden of proving: (I) That the proposed bank will serve a public need and advantage in the community or area of the community that the bank will serve; and (II) That the volume of business in the community or area of the community that the proposed bank will serve is such that profitable operation of the bank may be reasonably projected. (b) Notwithstanding any other provision of this section, if the banking board has given notice pursuant to subsection (5) of this section of a hearing on any application for charter filed pursuant to this section and the banking board has received no written protests against such charter application on or before the tenth day preceding the date fixed for the hearing, the banking board may grant such charter without a hearing as otherwise required in this section if the applicants for such charter are known to the banking board. (4) On hearing, the banking board may admit in evidence the application for charter and any other relevant information in the files of the division. The applicant and all others receiving notice by registered or certified mail under subsection (5) of this section are also entitled to be heard and to introduce testimony at such hearing, as well as such others as the banking board may determine to be necessary. ng, the banking board may admit in evidence the application for charter and any other relevant information in the files of the division. The applicant and all others receiving notice by registered or certified mail under subsection (5) of this section are also entitled to be heard and to introduce testimony at such hearing, as well as such others as the banking board may determine to be necessary. (5) The banking board shall give notice of the hearing on application for a de novo bank charter provided in subsection (3) of this section at least thirty days in advance of the hearing date fixed by the banking board, by registered or certified mail, to the applicant, to each bank within a three-mile radius of the location of the proposed bank, and to such other persons or banks as the banking board may designate. The notice must be in the form prescribed by the banking board and must include the names of the incorporators, the name of each stockholder subscribing to ten percent or more of the stock of the bank, the name and location of the proposed bank, the date, time, and place of the hearing, and a statement declaring that the application and proposed articles of incorporation or amended articles of incorporation are available for inspection in the office of the banking board. The banking board shall also cause such notice to be published at least one time not less than twenty days prior to the date fixed for such hearing in a newspaper of general circulation within the community in which the proposed bank is to be located. (6) Within one hundred twenty days following the date of conclusion of the hearing, the banking board shall issue a written order requiring the commissioner to grant a charter if a majority of the banking board finds that the requirements of subsection (1) of this section have been met and that the applicant for a de novo bank charter has met the burden of proof prescribed in subsection (3) of this section. The banking board shall make execution of its order to grant a de novo bank charter contingent upon the proposed bank making a bona fide application for membership in the federal deposit insurance corporation or the federal reserve system. In applications where the directors or management has not been fully disclosed at the time of the hearing, the banking board may make execution of its order to grant a charter contingent upon its subsequent approval of the directors and management. If a majority of the banking board finds that the requirements of subsection (1) of this section or the burden of proof of subsection (3) of this section have not been met, the banking board shall deny the application for a de novo charter. The banking board may revoke a charter in any case where the proposed bank has not exercised its charter and opened for business within six months after the date of the order to grant the charter. (7) If, within a ninety-day period, there have been filed with the banking board two or more applications for a de novo bank charter for state banks to serve the same community, the banking board may hold a single hearing to consider the applications. The banking board may grant or deny a de novo bank charter to one or more of the applicants without regard to the priority in time of filing applications. The determination of the banking board to deny a charter to an applicant who might otherwise qualify for a charter under subsections (1) and (3) of this section must be based upon a finding that the public need or advantage of the community or area of the community in which the proposed bank will be located will best be served by such denial and by the granting of a de novo bank charter on another application or other applications heard at such single hearing. pplicant who might otherwise qualify for a charter under subsections (1) and (3) of this section must be based upon a finding that the public need or advantage of the community or area of the community in which the proposed bank will be located will best be served by such denial and by the granting of a de novo bank charter on another application or other applications heard at such single hearing. (8) It is a criminal offense under this code for a proposed de novo state bank to perform any act as a state bank other than to perfect its organization, obtain and equip a place of business, or otherwise prepare to do business as a state bank prior to receiving a charter. (9) Unless otherwise provided by law to the contrary, the banking board must first approve the articles of incorporation, amended articles of incorporation, or amendments to articles of incorporation, which the applicant shall then deliver and file as follows: (a) Duplicate originals shall be delivered to the secretary of state for filing in accordance with the general corporate laws of this state; (b) A verified copy shall be filed in the office of the clerk and recorder for the county in which the state bank is located; (c) A copy to which the commissioner shall affix the charter, or certificate of approval in the case of amendments, shall be delivered by the commissioner to the applicant.

C.R.S. § 11-103-401 Subscription calls

11-103-401. Subscription calls. After a de novo charter has been granted, the directors may call for the payment of the subscriptions in full within thirty days after the date of the notice that the charter has been granted. The bank shall not issue any shares until the bank has paid in full, in cash, the par value and the pro rata portion of the paid-in surplus specified in the de novo charter.

C.R.S. § 11-103-402 First meetings of stockholders - director's oath - bylaws

11-103-402. First meetings of stockholders - director's oath - bylaws. (1) After the capital and surplus have been fully paid in cash and before any business is transacted, the incorporators shall call a meeting of the stockholders, on at least ten days' notice, to elect directors and to adopt bylaws, and shall direct the call, on at least five days' notice, of the first meeting of directors for election of officers. (2) Every director of a state bank shall take and subscribe to an oath before a disinterested notary public that the director will, insofar as the duty devolves upon the director, diligently and honestly administer the affairs of the bank and that the director will not knowingly violate nor willingly permit to be violated any provision of the law. (3) Bylaws may be adopted and amended by a majority vote at a stockholders' meeting, but the bylaws may provide for adoption or amendment by the board of directors of any provisions other than those relating to the duties, term of office, remuneration, reimbursement, or indemnification of a director. Copies of all bylaws and amendments thereto shall be filed with the commissioner.

C.R.S. § 11-103-403 Stockholders' meetings - voting trusts - preemptive right - transfer of stock - rules

11-103-403. Stockholders' meetings - voting trusts - preemptive right - transfer of stock - rules. (1) A regular annual meeting of stockholders shall be held each year as the bylaws direct. A special meeting may be called at any time by the banking board or the commissioner, by not less than one-third of the directors, or by the holders of twenty-five percent of the outstanding voting shares. The regular annual meeting and special meetings of the stockholders shall be held at such place as may be designated in the bylaws. Notice shall be mailed at least ten days before a meeting to every person who is a stockholder of record twenty days before the date of the meeting or at such longer period as may be provided in the bylaws. Such notice shall be mailed to the stockholder's address on the records of the bank. No business shall be transacted at a special meeting that is not specified in the notice thereof or necessary or proper in connection with or incidental to the business specified. The holders of a majority of the outstanding voting shares, or their authorized representatives, shall constitute a quorum. In the absence of a quorum, a meeting may be adjourned from time to time without notice to the stockholders. (2) Except on the election of directors, when cumulative voting is provided for in the charter, each share of common stock shall have one vote, which may be cast by the owner of record on the record date or by such owner's proxy, whether or not the owner of record has the beneficial interest therein. The bank may not vote shares that it holds in any capacity other than as fiduciary. (3) A stockholder authorized to vote may, by means of a proxy executed in writing, appoint a representative to cast the shareholder's vote. The banking board may promulgate rules governing proxies and the solicitation thereof. (4) No shares deposited under a voting trust agreement shall be voted by the trustee unless the agreement has been approved by the banking board. Approval shall be withheld or, if previously granted, revoked if it appears that the existence of the trust would tend to reduce competition among lending institutions or to affect adversely the character or competence of the management or the bank's policies or operating procedures. In the absence of such approval, the record owner may vote his or her shares. (5) Unless otherwise provided in the charter, if additional stock of a class is offered for sale, stockholders of record of the same class on the date of the offer shall have the right to subscribe to such proportion of the shares as the stock held by them bears to the total of the outstanding stock. This right shall be transferable, but shall terminate if not exercised within thirty days after the offer. If the right is not exercised, the stock shall not be offered for sale to others at a lower price, or on other more favorable terms, without the stockholders again being accorded a preemptive right to subscribe. (6) No transfer of shares of stock shall be effective with respect to the bank until it has been entered upon the transfer books. The stock book shall be available for examination by a stockholder of the corporation at the principal place of business during its business hours.

C.R.S. § 11-103-404 Waiver of notice - meeting or vote

11-103-404. Waiver of notice - meeting or vote. (1) When a notice is required to be given to stockholders under this code, or the charter or bylaws of any state bank, a waiver thereof in writing, signed by the person entitled to said notice, either before or after the time stated therein, shall be deemed equivalent thereto. (2) If the vote of stockholders at a meeting thereof is required or permitted to be taken in connection with any corporate action by any section of this code, the meeting and vote of stockholders may be dispensed with, if all of the stockholders who would have been entitled to vote upon the action if such meeting were held consent in writing to such corporate action being taken. (3) In the event that the action that is consented to is such as would have required the filing of a certificate under any of the other sections of this code if such action had been voted upon by the stockholders at a meeting thereof, the certificate filed under such other section shall state that written consent has been given under this section, in lieu of stating that the stockholders have voted upon the corporate action in question, if such last mentioned statement is required thereby.

C.R.S. § 11-103-405 Amendment of articles - change of location - authorized but unissued stock

11-103-405. Amendment of articles - change of location - authorized but unissued stock. (1) A state bank may apply to the banking board to amend its articles of incorporation or to change its location. (2) An application for an amendment of the articles of incorporation to change the authorized capital and the number and par value of the shares, to acquire or abandon trust powers, or to change its location shall be authorized by the vote of two-thirds of the outstanding voting stock voted at a meeting of the stockholders. Any other application may be authorized by the vote of a majority of the outstanding voting stock voted at a meeting of the stockholders. (3) Notice of the application shall be sent to such persons and organizations as the banking board may require. (4) The banking board shall approve an application: (a) To change the name of the corporation if the proposed name is not deceptive or misleading; (b) To increase the total capital by increasing the amount of capital stock; but an amendment increasing the total capital shall not become effective until the banking board finds that the new capital has been fully paid in cash; except that amendments increasing the capital stock of the bank in the category of authorized but unissued stock shall be approved pursuant to the provisions of subsection (6) of this section. (5) In making its determination thereon, the banking board shall consider whether the public need and advantage would be served by granting the application and shall be guided by the standards prescribed for the approval of an application for a charter, insofar as they are reasonably applicable. In making its determination upon an application for change of location, the banking board shall consider the need and advantage of both the community or area of the community in which the bank will be located and the community or area of the community from which the bank will be moved. (6) A state bank, upon application to and approval by the banking board and by vote of two-thirds of the outstanding voting stock voted at a meeting of the stockholders, by an amendment of the articles of incorporation, may authorize an increase in the capital stock of the bank in the category of authorized but unissued stock. Such authorized but unissued stock may be issued from time to time to employees of the bank pursuant to stock option or stock purchase plans adopted in accordance with the provisions of section 11-103-101 (2)(h), or in exchange for convertible preferred stock or convertible capital debentures in accordance with the terms and provisions of such securities. Authorized but unissued stock may also be issued from time to time for such other purposes and considerations as may be approved by the board of directors of the state bank and the banking board.

C.R.S. § 11-103-406 Dividends - when payable

11-103-406. Dividends - when payable. The board of directors of a state bank may declare dividends from retained earnings and from other components of capital specifically approved by the banking board so long as the declaration is made in compliance with the rules established by the banking board.

C.R.S. § 11-103-501 Directors and officers

11-103-501. Directors and officers. (1) The affairs of a state bank shall be managed by a board of directors, which shall exercise its powers and be responsible for the discharge of its duties. The number of directors, not fewer than three nor more than twenty-five, shall be as fixed by the bylaws, and the number so fixed shall be the board, regardless of vacancies. At least three-fourths of the directors shall be citizens of the United States, and a majority shall be residents of this state. A director need not own shares. A director may not serve who has been convicted of fraud involving any financial institution or of a felony, but the banking board may waive this provision regarding a felony if it determines that the particular felony does not jeopardize the person's ability to act as a director. A director who is disqualified may be removed by the board of directors or by the banking board. An action taken by a director prior to the director's resignation or removal is not subject to attack on the ground of the director's disqualification. (2) Directors shall receive such reasonable compensation as the bylaws may prescribe and shall serve until their successors are elected and qualify. (3) Directors shall be elected by the stockholders at the first meeting, and thereafter, at the annual meeting or at a special meeting called for the purpose. If the charter provides for cumulative voting, the votes of each share may be cast for one person or divided among two or more, as the stockholder may choose. The person (to the number of directors to be elected) having the largest number of votes shall be elected. (4) The term of office of directors shall be one year. Vacancies may be filled by vote of the board of directors until the next meeting of the stockholders. (5) A director may be removed by the stockholders at a meeting. Where cumulative voting for directors is provided in the charter, a director shall not be removed unless the votes cast against a motion for the director's removal are less than the total number of shares outstanding divided by the number of authorized directors, but all of the directors shall be removed if a majority of the outstanding shares approves a motion for the removal of all. (6) The officers designated by the bylaws shall be elected by the board of directors. A member of the board of directors shall be elected president. No officer shall be elected for a period longer than one year. No person may be employed as an officer of a state bank who has been convicted of fraud involving any financial institution or of a felony, but the banking board may waive this provision regarding a felony if it determines that the particular felony does not jeopardize the person's ability to act as an officer. An officer may be removed by the board of directors at any time, but removal shall not prejudice any rights that the officer may have to damages for breach of contract of employment, unless the officer falsely answered any question or made any material misstatement of facts relating to any matter leading to or constituting any inducement to such employment.

C.R.S. § 11-103-502 Directors' meetings - duties

11-103-502. Directors' meetings - duties. (1) The board of directors of a state bank shall meet at least once each calendar quarter, unless the banking board directs that meetings be held on a more frequent basis, or a less frequent basis in the case of disaster or emergency. The banking board, the commissioner, or an executive officer may call a special meeting. A majority of the board of directors constitutes a quorum. The board shall keep minutes of each meeting, including a record of attendance. Any director who fails to attend meetings of the board of directors for three consecutive months automatically ceases to be a director, unless the absence is satisfactorily explained to the banking board or the commissioner, who shall, in that event, notify the president of the bank of the approval of the continuation of the director. (2) The board of directors or the executive committee of the board shall review at least monthly the following transactions occurring since the last review: (a) Each loan, advance, discount, overdraft, and purchase or sale of a security that exceeds in amount one percent of the capital of the corporation pursuant to the rules promulgated by the banking board, and each loan, advance, discount, and overdraft that makes the total obligations from one obligor exceed that amount; (b) Each purchase or sale of a security that, together with the bank's other purchases and sales in the security during the preceding two months, involves such amount. (3) (a) The board of directors shall cause the financial statements of the state bank to be prepared in accordance with generally accepted accounting principles consistently applied, except as the banking board may otherwise provide in order to establish regulatory and competitive parity and pursuant to the policies expressed in section 11-101-102. (b) The board of directors shall cause an audit of the state bank to be completed by an accounting firm composed of certified public accountants or a directors' examination by a public accountant or any other independent person or persons as determined by the banking board at least annually but at intervals of not more than fifteen months, as may be required by the banking board or its rules. The banking board shall adopt rules regarding the qualifications of such public accountant and other independent person or persons, who shall assume the responsibility for due care in such director's examinations. The banking board's rules shall also establish the scope of such directors' examinations, which shall include safeguards to insure that such examinations adequately describe the financial condition of the financial institution. The banking board may require an audit to be completed by an accounting firm composed of certified public accountants under certain circumstances. A report of the audit or directors' examination and any related management letters and documents shall be completed and submitted to the banking board within the time periods, in the form, and containing such information as the banking board may require in its rules. Such report of the audit or directors' examination and any related management letters and documents shall be reviewed by the directors at the next meeting of the board of directors. nd any related management letters and documents shall be completed and submitted to the banking board within the time periods, in the form, and containing such information as the banking board may require in its rules. Such report of the audit or directors' examination and any related management letters and documents shall be reviewed by the directors at the next meeting of the board of directors. (c) If a bank is owned or controlled by a bank holding company, the requirement of paragraph (b) of this subsection (3) may be fulfilled if: (I) As required by the banking board and its rules, the controlling bank holding company is audited or examined in a directors' examination annually at intervals of not more than fifteen months and the bank is included in the annual audit or directors' examination of the bank holding company by that firm; (II) A report of the audit or directors' examination for the controlling bank holding company and any related management letters and documents is completed and submitted to the banking board within the time periods, in the form, and containing such information as the banking board may require in its rules; and (III) An annual internal examination of the bank is prepared by the internal examination staff of the controlling bank holding company and kept available for submission to the banking board immediately upon the banking board's request. (4) A state bank authorized to exercise trust powers shall not accept, or voluntarily relinquish, a fiduciary account without the approval or ratification of the board of directors, or of a committee of officers or directors designated by the board to perform this function, but the board of directors or the committee may prescribe general rules governing acceptances or relinquishment of fiduciary accounts, and action taken by an officer in accordance with these rules is sufficient approval. Any committee so designated shall keep minutes of its meetings and report at each monthly meeting of the board of directors all action taken since the previous meeting of the board. The board of directors shall designate one or more committees of not less than three qualified officers or directors to supervise the investment of fiduciary funds. No such investment of any account for which the bank has investment discretionary authority shall be made, retained, or disposed of without the approval of a board-approved committee as to which the bank has investment or review responsibility. At least once in every calendar year, the committee shall review the records of each fiduciary account as to which the bank has investment or review responsibility and shall determine the current value, safety, and suitability of the investments and whether the investments should be modified or retained. The committee shall keep minutes of its meetings and shall report at each monthly meeting of the board of directors its conclusions on all questions considered and all action taken since the previous meeting of the board. The board of directors shall establish the policies and procedures necessary for the proper exercise of fiduciary powers by the state bank and in accordance with any rule established by the banking board.

C.R.S. § 11-103-503 Waiver of notice - meeting or vote

11-103-503. Waiver of notice - meeting or vote. (1) When a notice is required to be given to directors under this code, or the charter or bylaws of any state bank, a waiver thereof in writing, signed by the person entitled to said notice, either before or after the time stated therein, shall be deemed equivalent thereto. (2) If the vote of directors at a meeting thereof is required or permitted to be taken in connection with any corporate action by any section of this code, the meeting and vote of directors may be dispensed with, if all of the directors who would have been entitled to vote upon the action if such meeting were held consent in writing to such corporate action being taken. (3) In the event that the action that is consented to is such as would have required the filing of a certificate under any of the other sections of this code if such action had been voted upon by the directors at a meeting thereof, the certificate filed under such other section shall state that written consent has been given under this section.

C.R.S. § 11-103-601 Director and officer insurance and fidelity bonds - legislative declaration

11-103-601. Director and officer insurance and fidelity bonds - legislative declaration. (1) The directors of a state bank shall require good and sufficient fidelity bonds on all active officers and employees, whether or not they draw salary or compensation, which bonds shall provide for indemnity to such bank on account of any losses sustained by it as the result of any dishonest, fraudulent, or criminal conduct by them acting independently or in collusion or combination with any person. Such bonds may be in individual, schedule, or blanket form, and the premiums therefor shall be paid by the bank. (2) The said directors shall also require suitable insurance protection to the bank against burglary, robbery, theft, and other insurable hazard to which the bank may be exposed in the operations of its business on the premises or elsewhere. (3) The directors shall be responsible for prescribing, at least once in each calendar year, the amount or penal sum of the bonds and policies specified in this section and the sureties or underwriters thereon after giving due and careful consideration to all known elements and factors constituting such risk or hazard. Such action shall be recorded in the minutes of the board of directors. (4) (a) The general assembly hereby finds, determines, and declares that the following is enforceable and in conformity with the public policy of this state, as expressed in this code, including the provisions of section 11-101-102: (I) Any insurance policy, form, contract, endorsement, or certificate in effect or issued on or after April 30, 1993, that provides insurance coverage to directors or officers, or both, of a bank but that does not grant coverage or that excludes coverage for claims made by any depository insurance organization or any other state or federal corporation, organization, or entity acting as receiver, conservator, or liquidator of such bank, whether in its own name or on behalf of any other person or entity; or (II) Any fidelity bond, financial institution bond, or depository institution bond in effect or issued on or after April 30, 1993, that provides for termination of such bond upon the taking over of the bank by a receiver or other liquidator or by state or federal officials. (b) No provision of part 8 of this article shall be construed to contravene or modify the expressed public policy set forth in this subsection (4).

C.R.S. § 11-103-602 Indemnification and personal liability of directors, officers, employees, and agents

11-103-602. Indemnification and personal liability of directors, officers, employees, and agents. A state bank has the same powers, rights, and obligations and is subject to the same limitations as apply to corporations for profit as set forth in article 109 of title 7. State bank directors, officers, employees, and agents have the same rights as directors, officers, employees, and agents, respectively, of corporations for profit as set forth in article 109 of title 7. State bank directors and officers have the benefit of the same limitations on personal liability for any injury to person or property arising out of a tort as set forth in section 7-108-403, for directors and officers, respectively, of corporations for profit. Any reference in said sections to shareholders shall be construed to refer to stockholders for the purposes of this section.

C.R.S. § 11-103-603 Deposit insurance - membership in federal reserve system - federal national mortgage association

11-103-603. Deposit insurance - membership in federal reserve system - federal national mortgage association. (1) A state bank is authorized to do any act necessary to obtain insurance of its deposits by the United States or any agency thereof and to acquire and hold membership in the federal reserve system or to take advantage of any other act or resolution of congress that may be enacted to aid, regulate, or safeguard state banks and their depositors, including any amendments of the same or any substitutions thereof. It may also subscribe for and acquire any stock, debentures, bonds, or other types of securities of the federal deposit insurance corporation and comply with the lawful regulations and requirements from time to time issued or made by such corporation. (2) A state bank that is a member of the federal reserve system, or of the federal deposit insurance corporation, or of both may make payments to the federal national mortgage association, a constituent agency of the national housing and home finance agency, of nonrefundable capital contributions, receive stock evidencing such capital contributions and hold and dispose thereof, contract with said association, and incur the expenses and otherwise comply with the then lawful regulations and requirements issued by said association from time to time to the extent a national bank in like circumstances is authorized by any act or resolution by the United States congress or by any lawful rule issued pursuant thereto.

C.R.S. § 11-103-701 Merger or conversion

11-103-701. Merger or conversion. (1) Upon approval of the banking board, banks may be merged with, or converted into, a resulting state bank as prescribed in this article; except that the action by a constituent national bank shall be taken in the manner prescribed by, and is subject to, any limitation or requirements imposed by any law of the United States, which law also governs the rights of its dissenting shareholders. Further, the action by a constituent bank chartered in another state shall be taken in the manner prescribed by, and is subject to, any limitation or requirements imposed by any law of the chartering state, which law also governs the rights of its dissenting shareholders. (2) Nothing in the law of this state restricts the right of a state bank to merge with, or convert into, a resulting national bank or bank chartered by another state. The action to be taken by a constituent state bank and its rights and liabilities and those of its shareholders are the same as those prescribed for national banks at the time of the action by the applicable laws of the United States or the other chartering state and not by the law of this state.

C.R.S. § 11-103-702 Approval of merger by directors

11-103-702. Approval of merger by directors. (1) Where there is to be a resulting state bank, the board of directors of each constituent state bank shall, by a majority of the entire board, approve a merger agreement, which agreement shall contain: (a) The name of each constituent bank and the location of each office; (b) With respect to the resulting bank, the name and the location of each proposed office; the name and residence of each director to serve until the next annual meeting of the stockholders; the name and residence of each officer; the amount of capital, the number of shares, and the par value of each share; whether preferred stock is to be issued and the amount, terms, and preferences; the amendments to the charter and bylaws; (c) The terms for the exchange of shares of the constituent banks for those of the resulting bank; (d) A statement that the agreement is subject to approval by the banking board and by the stockholders of each constituent bank; (e) Provisions governing the manner of disposing of the shares of the resulting state bank not taken by dissenting shareholders of constituent banks; (f) Such other provisions as the banking board requires to enable it to discharge its duties with respect to the merger.

C.R.S. § 11-103-703 Approval by banking board

11-103-703. Approval by banking board. (1) After approval by the board of directors of each constituent bank, the merger agreement shall be submitted to the banking board for approval, together with certified copies of the authorizing resolutions of the several boards of directors showing approval by a majority of the entire board and evidence of proper action by the board of directors of any constituent national bank or bank chartered by another state. (2) Without approval by the banking board, no asset shall be carried on the books of the resulting bank at a valuation higher than that on the books of the constituent bank at the time of the last examination by a state or national bank examiner before the effective date of the merger. (3) Within thirty days after receipt by the banking board of the papers specified in subsection (1) of this section, the banking board shall approve or disapprove the merger agreement. The banking board shall approve the agreement if it appears that: (a) The resulting state bank meets all the requirements of state law as to the formation of a new state bank or conversion of an existing bank; (b) The agreement provides for adequate capital as established by the banking board in its rules; (c) The agreement is fair; (d) The merger is not contrary to the public interest. (4) If the banking board disapproves an agreement, it shall state its objections and give an opportunity to the constituent banks to amend the merger agreement to obviate such objection. (5) Where the resulting state bank is not to exercise trust powers, the banking board shall not approve a merger until satisfied that adequate provision has been made for successors to fiduciary positions held by constituent banks.

C.R.S. § 11-103-704 Approval by stockholders - rights of dissenters

11-103-704. Approval by stockholders - rights of dissenters. (1) To be effective, a merger must be approved by the stockholders of each constituent state bank by a vote of two-thirds of the outstanding voting stock, at a meeting called to consider such action, which vote shall constitute the adoption of the charter and bylaws of the resulting state bank, including the amendments set forth in the merger agreement. (2) The notice of the meeting of stockholders shall state that dissenting stockholders will be entitled to payment of the value of only those shares that are voted against the approval of the plan. (3) The owners of shares that were voted against the approval of the merger shall be entitled to receive their value in cash, if and when the merger becomes effective, upon written demand made to the resulting state bank at any time within thirty days after the effective date of the merger, accompanied by the surrender of the stock certificates. The value of such shares shall be determined as of the date of the shareholders' meeting approving the merger by three appraisers, one to be selected by the owners of two-thirds of the dissenting shares involved, one by the board of directors of the resulting state bank, and the third by the two so chosen. The valuation agreed upon by any two appraisers shall govern. If the appraisal is not completed within ninety days after the merger becomes effective, the commissioner shall cause an appraisal to be made. (4) The expenses of appraisal shall be paid by the resulting state bank. (5) The resulting state bank may fix an amount that it considers to be not more than the fair market value of the shares of a constituent bank at the time of the stockholders' meeting approving the merger, which it will pay dissenting shareholders of that constituent bank entitled to payment in cash. The amount due under such accepted offer or under the appraisal shall constitute a debt of the resulting state bank.

C.R.S. § 11-103-705 Effective date of merger - certificate

11-103-705. Effective date of merger - certificate. (1) Unless a later date is specified in the agreement, a merger becomes effective upon the approval by the banking board of the executed agreement, together with copies of the resolutions of the stockholders of each constituent bank approving it, certified by the bank's president or a vice-president and a secretary. The charters of the constituent banks, other than the resulting bank, shall thereupon be deemed surrendered. (2) After approval of the agreement, the banking board shall issue to the resulting bank a certificate of merger, setting forth the name of each constituent bank and the name of the resulting state bank. The certificate is conclusive evidence of the merger and of the correctness of all proceedings for the merger in all courts and places and may be recorded in any office for the recording of deeds to evidence the new name in which the property of the constituent banks is held.

C.R.S. § 11-103-706 Continuation of corporate entity

11-103-706. Continuation of corporate entity. (1) The resulting state bank shall be considered the same business and corporate entity as each constituent bank with all of the rights, powers, and duties of each constituent bank, except as limited by the charter and bylaws of the resulting state bank. (2) The resulting state bank has the right to use the name of any constituent bank whenever it can do any act under such name more conveniently. (3) Any reference to any constituent bank in any writing, whether executed or taking effect before or after the merger, shall be deemed a reference to the resulting state bank if not inconsistent with the other provisions of such writing.

C.R.S. § 11-103-707 Conversion from state bank to national and vice versa

11-103-707. Conversion from state bank to national and vice versa. (1) Nothing in the law of this state shall restrict the right of a state bank to convert into a national bank upon compliance with the laws of the United States, and, upon completion of such conversion, it shall surrender its charter as a state bank. (2) The board shall grant a state charter to a national bank located in this state that follows the procedure prescribed by federal law to convert into a state bank if it meets the requirements established by the banking board in its rules. Any requirement that shares must be paid in cash may be satisfied by the exchange of shares of the converted state bank for those of the converting national bank, which may be valued at no more than their fair cash market value. The procedure for incorporation of a state bank may be modified to the extent made necessary by the difference between an ordinary incorporation and a conversion as established by the banking board in its rules. The converting bank shall cause to be published a notice of the conversion once a week for three successive weeks in a newspaper of general circulation in the county in which the converting bank has its principal office. The converting bank shall file proof of the publication with the division. (3) The converted bank shall be considered the same business and corporate entity as the converting bank with all of the rights, powers, and duties of the converting bank except as limited by the charter and bylaws of the resulting bank. It may use the name of the converting bank whenever it can do any act under such name more conveniently. (4) Any reference to the converting bank in any writing, whether executed or taking effect before or after the conversion, shall be deemed a reference to the converted bank if not inconsistent with the other provisions of such writing.

C.R.S. § 11-103-708 Nonconforming assets

11-103-708. Nonconforming assets. If a constituent bank has assets that do not conform to the requirements of state law for the resulting bank, or if a converting national bank has assets that do not conform to the requirements of a state law for the converted state bank, or if, in either case, there are business activities that are not permitted for the resulting or converted state bank, the banking board may permit a reasonable time to conform with state law.

C.R.S. § 11-103-709 Sale of all assets of bank, branch, or department

11-103-709. Sale of all assets of bank, branch, or department. (1) Any state bank may sell to any other bank all, or substantially all, of the selling bank's assets and business, or all, or substantially all, of the assets and business of any department or branch of the selling bank. (2) Any state bank may, upon assuming the liabilities relating thereto, purchase all, or substantially all, of the assets and business of another bank, or all, or substantially all, of the assets and business of any department or branch of another bank. (3) The agreement of purchase and sale shall be authorized and approved by the banking board and by the vote of a majority of the stockholders of the purchasing and selling banks at meetings called for the purpose in like manner as meetings to approve mergers are called, and filed with the commissioner, accompanied by evidence of such stockholders' approval in like manner as agreements of merger are filed. After such approval is given by the stockholders, a notice of such sale shall be published once a week for three successive weeks in a newspaper of general circulation in the county in which the selling bank has its principal office. Proof of such publication shall be filed with the division. (4) Notwithstanding any term of the agreement, or of his or her contract of deposit, any depositor whose business is thus sold has the right, upon payment of any indebtedness owing by the depositor to the bank, to withdraw his or her deposit in full on demand after such sale unless, by dealing with the purchasing bank with knowledge of the purchase, the depositor ratifies the transfer. (5) The agreement of sale may provide for the transfer to the purchasing bank of all fiduciary positions held by the selling bank pursuant to section 11-106-105. (6) No right against, or obligation of, the selling bank, in respect of the assets or business sold, shall be released or impaired by the sale until one year from the last date of publication of the notice, pursuant to subsection (3) of this section, but, after the expiration of such year, no action shall be brought against the selling bank on account of any deposit, obligation, trust, or asset transferred to or liability assumed by the purchasing bank.

C.R.S. § 11-103-801 Voluntary liquidation and dissolution

11-103-801. Voluntary liquidation and dissolution. (1) With the approval of the banking board, a state bank may liquidate and dissolve. The banking board shall grant such approval if it appears that the proposal to liquidate and dissolve has been approved by a vote of two-thirds of the outstanding voting stock at a meeting called for that purpose and that the capital of the state bank is adequate and such state bank has sufficient liquid assets to pay off depositors and creditors immediately. (2) (a) Upon approval by the banking board, the bank shall forthwith cease to do business, shall have only the powers necessary to effect an orderly liquidation, and shall proceed to pay its depositors and creditors and to wind up its affairs. (b) Within thirty days after the approval, a notice of liquidation shall be sent by mail to each depositor, creditor, person interested in funds held as a fiduciary, lessee of a safe deposit box, and bailor of property at the address of such person as shown on the books of the bank. The notice shall be posted conspicuously on the premises of the bank and shall be given such publication as the banking board may require. The bank shall send with each notice a statement of the amount shown on the books to be the claim of the depositor or creditor. The notice shall demand that property held by the bank as bailee or in a safe deposit box be withdrawn by the person entitled thereto and that claims of depositors and creditors, if the amount claimed differs from that stated in the notice to be due, be filed with the bank before a specified date not earlier than sixty days thereafter, in accordance with the procedure prescribed in the notice. (c) As soon after approval as may be practicable, the state bank shall resign all fiduciary positions and take such action as may be necessary to settle its fiduciary accounts. (d) Safe deposit boxes, the contents of which have not been removed within thirty days after demand, shall be opened. Sealed packages containing the contents of such box, with a certificate of inventory of contents, together with any other unclaimed property held by the bank as bailee and certified inventories thereof shall be transferred to the banking board, which shall retain them for six years unless sooner claimed by the person entitled to them. After six years the banking board shall sell or otherwise appropriately dispose of the property. The proceeds of any sale shall be transferred to the state treasurer as abandoned funds. (e) The approval of an application for liquidation shall not impair any right of a depositor or creditor to payment in full, and all lawful claims of creditors and depositors shall promptly be paid. The unearned portion of the rental of a safe deposit box shall be returned to the lessee. pose of the property. The proceeds of any sale shall be transferred to the state treasurer as abandoned funds. (e) The approval of an application for liquidation shall not impair any right of a depositor or creditor to payment in full, and all lawful claims of creditors and depositors shall promptly be paid. The unearned portion of the rental of a safe deposit box shall be returned to the lessee. (f) Any assets remaining after the discharge of all obligations shall be distributed to the stockholders in accordance with their respective interests. No such distribution shall be made before all claims of depositors and creditors have been paid or, in the case of any disputed claim, the bank has transmitted to the banking board a sum adequate to meet any liability that may be judicially determined and any funds payable to a depositor or creditor and unclaimed have been transmitted to the banking board. (3) Any unclaimed distribution to a stockholder or depositor shall be held until ninety days after the final distribution and then transmitted to the banking board. Such unclaimed funds shall be held by the banking board for six years and, unless sooner claimed by the person entitled thereto, shall be transferred to the treasury of the county in which the bank is located. The county treasurer and the county treasurer's successors shall hold such money in trust for a period of six years, unless the same shall be sooner paid out to the beneficial owner thereof or a suit is instituted to recover such money or a portion thereof. Any money remaining in said fund six years after the same is paid into the treasury of the county, for the recovery of which no action is pending, shall be transferred to the general fund of the county, and all rights of the former beneficial owners therein to recover the same shall be forever barred. (4) If the banking board finds that the assets will be insufficient for the full discharge of all obligations, or that completion of the liquidation has been unduly delayed, it may take possession and complete the liquidation in the manner provided in this code for involuntary liquidations. (5) The banking board may require reports of the progress of liquidation. If it is satisfied that the liquidation has been properly completed, it shall cancel the charter and enter an order of dissolution.

C.R.S. § 11-103-802 Involuntary liquidation by banking board - reorganization

11-103-802. Involuntary liquidation by banking board - reorganization. (1) (a) Except as otherwise provided in this code, only the banking board may take possession of a state bank if, after a hearing before the banking board, the banking board finds: The bank's capital is inadequate or it is otherwise in an unsound condition; the bank's business is being conducted in an unlawful or unsound manner; the bank is unable to continue normal operations; examination of the bank has been obstructed or impeded; or control of the bank has been assumed by any person or persons convicted of fraud or a felony in this state or any other jurisdiction, or by any partnership, association, or corporation controlled, directly or indirectly, by any person so convicted, unless the banking board determines that such person has been duly rehabilitated or otherwise that the bank will be honestly and efficiently managed. (b) Notice of hearing shall be mailed by first-class mail to the bank and the directors of the bank no less than ten days prior to the hearing. Any proceedings conducted pursuant to this subsection (1) shall be exempt from any provision of law requiring that proceedings of the banking board be conducted publicly. (2) (a) The commissioner, upon order of the banking board, shall take possession by posting upon the premises a notice reciting that the commissioner is assuming possession pursuant to this code and the time, not earlier than the posting of the notice, when possession is deemed to commence. A copy of the notice shall be filed in the district court in and for the county in which the bank is located. The commissioner shall notify the federal reserve bank of the district of taking possession of any state bank that is a member of the federal reserve system and shall notify the federal deposit insurance corporation of taking possession of any state bank that is a member of the federal deposit insurance corporation. (b) When the commissioner has taken possession of a state bank, the commissioner shall be vested with the full and exclusive power of management and control, including the power to continue or to discontinue the business; to stop or to limit the payment of its obligations; to employ any necessary assistants, including legal counsel; to execute any instrument in the name of the bank; to commence, defend, and conduct in its name any action or proceeding to which it may be a party; to terminate such possession by restoring the bank to its board of directors; and to reorganize or liquidate the bank in accordance with this code. As soon as practicable after taking possession, the commissioner shall make an inventory of the assets and file a copy thereof with the court in which the notice of possession was filed. (c) When the commissioner is in possession and while the commissioner's possession continues, there shall be a postponement, until six months after such taking, of the date upon which any period of limitation fixed by statute or agreement would otherwise expire on a claim or right of action of the bank, or upon which a review must be taken, or a pleading, or other document must be filed, by the bank in any pending action or proceeding. (3) (a) If the banking board determines, after hearing before the banking board, to liquidate the state bank, it shall give notice of its determination by posting upon the premises a notice reciting that the determination has been made to liquidate the bank. A copy of the notice shall be filed in the district court in and for the county in which the bank is located. The commissioner, upon order of the banking board, shall tender to the federal deposit insurance corporation or its successor the appointment as liquidator under section 11-103-805. n by posting upon the premises a notice reciting that the determination has been made to liquidate the bank. A copy of the notice shall be filed in the district court in and for the county in which the bank is located. The commissioner, upon order of the banking board, shall tender to the federal deposit insurance corporation or its successor the appointment as liquidator under section 11-103-805. (b) If, in the opinion of the banking board, an emergency exists that may result in serious losses to the depositors, it may take possession of a state bank and may immediately appoint the federal deposit insurance corporation or its successor as liquidator in accordance with section 11-103-805 without notice of a hearing. Notice of the banking board's emergency determination shall be posted and filed in the same manner as prescribed in paragraph (a) of this subsection (3). Within ten days after the banking board's emergency determination, the bank or the directors of the bank may file an application with the banking board to rescind its determination. The filing of an application shall not act as a stay of the banking board's action pursuant to this subsection (3). The banking board shall grant the application if it finds that its action was unauthorized and shall rescind its action taking possession and restore the bank to its board of directors. If no application is filed within ten days after the banking board's emergency determination, all action taken by the banking board shall be final. (c) Notice of hearing shall be mailed by first-class mail to the bank and the directors of the bank no less than ten days prior to the hearing. Any proceeding conducted pursuant to this subsection (3) shall be exempt from any provision of law requiring that proceedings of the banking board be conducted publicly. (d) If the federal deposit insurance corporation or its successor does not accept the tender of appointment as liquidator, the banking board as liquidator shall proceed to liquidate the institution, upon first providing a bond executed by some surety company authorized to do business in this state, running to the people of the state of Colorado, that meets with the approval of the banking board, for the faithful discharge of its duties in connection with such liquidation and the accounting for all moneys coming into its hands. The cost of such bond shall be paid from the assets of the bank. Suit may be maintained on such bond by any person injured by a breach of conditions thereof. (e) If the commissioner determines to reorganize the state bank or if the banking board, after staying its liquidation, orders such reorganization, the commissioner, after according a hearing to all interested persons, shall enter an order proposing a reorganization plan. A copy of the plan shall be sent to each depositor and creditor who shall not receive payment of the depositor's or creditor's claim in full under the plan, together with notice that, unless within fifteen days the plan is disapproved in writing by persons holding one-third or more of the aggregate amount of such claims, the commissioner will proceed to effect the reorganization. A department, agency, or political subdivision of this state holding a claim that will not be paid in full is authorized to participate as any other creditor. (4) No judgment, lien, or attachment shall be executed upon any asset of the state bank while it is in the possession of the banking board. Upon the election of the banking board, in connection with a liquidation or reorganization: (a) Any lien or attachment, other than an attorney's or mechanic's lien, obtained upon any asset of the state bank during the banking board's possession, or within four months prior to commencement thereof, shall be vacated and voided, except liens created by the banking board while in possession and further excepting liens or security interests obtained by the federal reserve bank; organization: (a) Any lien or attachment, other than an attorney's or mechanic's lien, obtained upon any asset of the state bank during the banking board's possession, or within four months prior to commencement thereof, shall be vacated and voided, except liens created by the banking board while in possession and further excepting liens or security interests obtained by the federal reserve bank; (b) Any transfer of an asset of the state bank made after or in contemplation of its insolvency, with intent to effect a preference, shall be voided. (5) With the approval of the banking board, the commissioner may borrow money in the name of the state bank and may pledge its assets as security for the loan. (6) All necessary and reasonable expenses of the commissioner's possession of a state bank and of its reorganization or liquidation shall be defrayed from the assets thereof.

C.R.S. § 11-103-803 Reorganization plan

11-103-803. Reorganization plan. (1) A plan of reorganization shall not be prescribed under this code unless: (a) The plan is feasible and fair to all classes of depositors, creditors, and stockholders; (b) The aggregate face amount of the interest accorded to any class of depositors, creditors, or stockholders under the plan does not exceed the value of the assets upon liquidation, less the full amount of the claims of all prior classes, subject to any fair adjustment for new capital that any class will pay in under the plan; (c) The plan provides for the issuance of capital stock and, if necessary, debentures and other securities and instruments in an amount that will comply with the rules promulgated by the banking board; (d) Any exchange of new common stock for obligations or stock of the bank will be effected in inverse order to the priorities in liquidation of the classes that will retain an interest in the bank and upon terms that fairly adjust any change in the relative interests of the respective classes that will be produced by the exchange; (e) The plan assures the removal of any director, officer, or employee responsible for any unsound or unlawful action or the existence of an unsound condition; (f) Any merger or consolidation provided by the plan conforms to the requirements of this code. (2) If, in the course of reorganization, supervening conditions render the plan unfair or its execution impractical, the commissioner, upon approval of the banking board, may modify the plan or liquidate the institution. Any such action shall be taken by order of the banking board upon appropriate notice.

C.R.S. § 11-103-804 Liquidation by commissioner - procedure

11-103-804. Liquidation by commissioner - procedure. (1) In liquidating a state bank, the commissioner may exercise any power thereof, but the commissioner shall not, without the approval of the court in which notice of possession has been filed: (a) Sell any asset of the bank having a value in excess of five hundred dollars; (b) Compromise or release any claim if the amount of the claim exceeds five hundred dollars, exclusive of interest; (c) Make any payment on any claim, other than a claim upon an obligation incurred by the commissioner, before preparing and filing a schedule of the commissioner's determinations in accordance with this code. (2) Within six months after the commencement of liquidation, the commissioner may elect to terminate any executory contract for services or advertising to which the state bank is a party or any obligation of the bank as a lessee. A lessor who receives at least sixty days' notice of the commissioner's election to terminate the lease shall have no claim for rent, other than rent accrued to the date of termination, nor for damages for such termination. (3) As soon after the commencement of liquidation as is practicable, the commissioner shall take the necessary steps to terminate all fiduciary positions held by the state bank and take such action as may be necessary to surrender all property held by the bank as a fiduciary and to settle its fiduciary accounts. (4) The right of any agency of the United States insuring deposits to be subrogated to the rights of depositors upon payment of their claims shall not be less extensive than the law of the United States requires as a condition of the authority to issue such insurance or make such payments to depositors of national banks. (5) As soon after the commencement of liquidation as is practicable, the commissioner shall send notice of the liquidation to each known depositor, creditor, and lessee of a safe deposit box and bailor of property held by the bank at the address shown on the books of the institution. The notice shall also be published in a newspaper of general circulation in the county in which the institution is located once a week for three successive weeks. The commissioner shall send with each notice a statement of the amount shown on the books of the institution to be the claim of the depositor or creditor. The notice shall demand that property held by the bank as bailee, or in a safe deposit box, be withdrawn by the person entitled thereto and the claim of a depositor or creditor, if the amount claimed differs from that stated in the notice to be due, be filed with the commissioner before a specified date, not earlier than sixty days thereafter, in accordance with the procedure prescribed in the notice. (6) Safe deposit boxes, the contents of which have not been removed before the date specified, shall be opened by the commissioner. Sealed packages containing the contents of such box, with a certificate of inventory of contents, together with any unclaimed property held by the bank as bailee and certified inventories thereof, shall be held by the commissioner for six years unless sooner claimed by the person entitled thereto. After six years the commissioner may sell or otherwise appropriately dispose of the property. The proceeds of a sale shall be transferred and disposed of in accordance with the provisions of subsection (11) of this section. (7) Within six months after the last day specified in the notice for the filing of claims, or within such longer period as may be allowed by the court in which notice of possession has been filed, the commissioner shall: (a) Reject any claim if the commissioner doubts the validity of the claim; (b) Determine the amount, if any, owing to each known creditor or depositor and the priority class of such claim under this code; (c) Prepare a schedule of the commissioner's determinations for filing in the court in which notice of possession was filed; which notice of possession has been filed, the commissioner shall: (a) Reject any claim if the commissioner doubts the validity of the claim; (b) Determine the amount, if any, owing to each known creditor or depositor and the priority class of such claim under this code; (c) Prepare a schedule of the commissioner's determinations for filing in the court in which notice of possession was filed; (d) Notify each person whose claim has not been allowed in full and publish once a week for three successive weeks, in a newspaper of general circulation in the county in which the institution is located, a notice of the time when and the place where the schedule of determinations will be available for inspection and the date, not sooner than thirty days thereafter, when the commissioner will file the schedule in court. (8) Within twenty days after the filing of the commissioner's schedule, any creditor, depositor, or stockholder may file an objection to any determination made that adversely affects such objector. Any objections so filed shall be heard and determined by the court upon such notice to the commissioner and interested claimants as the court may prescribe. If the objection is sustained, the court shall direct an appropriate modification of the schedule. After filing the schedule, the commissioner may, from time to time, make partial distribution to the holders of claims that are undisputed or have been allowed by the court if a proper reserve is established for the payment of disputed claims. As soon as is practicable after the determination of all objections, the commissioner shall make final distribution. (9) (a) On liquidation of a state bank, after payment of federal deposit insurance, claims for payment have the following priority: (I) Obligations incurred by the commissioner, fees and assessments due to the division, and expenses of liquidation, all of which may be covered by a proper reserve of funds; (II) Claims of depositors having an approved claim against the general liquidating account of the bank; (III) Claims of general creditors having an approved claim against the general liquidating account of the bank; (IV) Claims otherwise proper that were not filed within the time prescribed by this code; (V) Approved claims of subordinate creditors; and (VI) Claims of stockholders of the bank. (b) On liquidation of a state bank, after payment of federal deposit insurance, claims by governmental units for payment of uninsured deposits collateralized pursuant to the "Public Deposit Protection Act of 1975", article 10.5 of this title, shall be governed by the provisions of said article. Claims by governmental units for payment of uninsured deposits not collateralized pursuant to article 10.5 of this title shall have the same priority assigned to depositors under subparagraph (II) of paragraph (a) of this subsection (9). (10) Any assets remaining after all claims have been paid shall be distributed to the stockholders in accordance with their respective interests. (11) Unclaimed money remaining after completion of the liquidation shall be retained for six years by the commissioner unless sooner claimed by the owner. At the expiration of such period, the remaining sum shall be transferred to the treasury of the county in which the bank is located. The county treasurer and the county treasurer's successors shall hold such money in trust for a period of six years, unless the same is sooner paid out to the beneficial owner or owners thereof or a suit is instituted to recover such money or a portion of the money. Any money remaining in said fund six years after the same is paid into the treasury of the county, for the recovery of which no action is pending, shall be transferred to the general fund of the county, and all rights of the former beneficial owners therein to recover the same shall be forever barred. owner or owners thereof or a suit is instituted to recover such money or a portion of the money. Any money remaining in said fund six years after the same is paid into the treasury of the county, for the recovery of which no action is pending, shall be transferred to the general fund of the county, and all rights of the former beneficial owners therein to recover the same shall be forever barred. (12) When the assets have been distributed in accordance with this code, the commissioner shall file an account with the court. Upon approval thereof, the commissioner shall be relieved of liability in connection with the liquidation, and shall cancel the charter.

C.R.S. § 11-103-805 Federal deposit insurance corporation or successor as liquidator

11-103-805. Federal deposit insurance corporation or successor as liquidator. (1) The federal deposit insurance corporation, created by section 12B of the "Federal Reserve Act", as amended, or its successor is authorized to act without bond as liquidator of any banking institution, the deposits in which are to any extent insured by said corporation or its successor pursuant to section 11-103-802. (2) Pursuant to section 11-103-802, the commissioner, upon order of the banking board, shall tender to said corporation or its successor the appointment as liquidator of such banking institution. (3) After being notified in writing of the acceptance of such an appointment, the commissioner shall file in the office of the clerk and recorder in the county in which the bank is situated a certificate evidencing the appointment of the federal deposit insurance corporation or its successor. Upon such an appointment, the possession of all the assets, business, and property of such bank of every kind and nature, wheresoever situated, shall be deemed transferred from such bank and the banking board to the federal deposit insurance corporation or its successor. Without the execution of any instruments of conveyance, assignment, transfer, or endorsement, the title to all such assets and property shall be vested in the federal deposit insurance corporation or its successor, and the banking board and the commissioner shall be forever thereafter relieved from all responsibility and liability in respect to the liquidation of such bank; except that the banking board may retain jurisdiction over and responsibility for liquidation of eligible collateral pledged pursuant to the "Public Deposit Protection Act", article 10.5 of this title, to secure public deposits not insured by the federal deposit insurance corporation or its successor. (4) If the corporation or its successor accepts said appointment, it has all the powers and privileges provided by the laws of this state with respect to the liquidation of a banking institution, its depositors, and other creditors. (5) (a) When a state bank is liquidated, after payment of federal deposit insurance, claims for payment shall have the following priority: (I) Obligations incurred by the banking board, fees and assessments due to the division of banking, and expenses of liquidation, all of which may be covered by a proper reserve of funds; (II) Claims of depositors having an approved claim against the general liquidating account of the bank; (III) Claims of general creditors having an approved claim against the general liquidating account of the bank; (IV) Claims otherwise proper that were not filed within the time prescribed by this code; (V) Approved claims of subordinate creditors; and (VI) Claims of stockholders of the bank. (b) When a state bank is liquidated, after payment of federal deposit insurance, claims of official custodians of public funds for payment of uninsured public funds pursuant to the "Public Deposit Protection Act", article 10.5 of this title, shall be governed by the provisions of this subsection (5). In the event that the state bank holds collateral that is pledged for the safekeeping and protection of uninsured public funds on deposit pursuant to article 10.5 of this title, such collateral shall be considered to be held in trust on behalf of the official custodian, and the liquidator shall not use such collateral to pay any claim or liability other than that of the official custodian until all claims for uninsured public funds have been paid. In the event that such collateral is insufficient to pay all claims made by official custodians, the payment of such claims shall be made according to a pro rata formula. Claims by official custodians for payment of uninsured deposits not collateralized pursuant to article 10.5 of this title shall have the same priority as that assigned to depositors under subparagraph (II) of paragraph (a) of this subsection (5).

C.R.S. § 11-103-806 Assets sold or pledged as security

11-103-806. Assets sold or pledged as security. (1) With respect to any banking institution closed on account of inability to meet the demands of its depositors or by action of the banking board or by action of its directors or in the event of its capital inadequacy or suspension, the liquidator of such institution may borrow from the federal deposit insurance corporation and furnish any part or all of the assets of said institution to said corporation as security for a loan from same, but, if said corporation is acting as such liquidator, the order of a court of record of competent jurisdiction shall be first obtained approving such loan. Upon the order of a court of record of competent jurisdiction, all or any part of the assets of such institution may be sold. (2) The provisions of this section shall not be construed to limit the power of any banking institution, the commissioner, or the liquidators to pledge or sell assets in accordance with any existing law.

C.R.S. § 11-103-807 Enforcement of directors' liability

11-103-807. Enforcement of directors' liability. Among its other powers, the federal deposit insurance corporation, in the performance of its powers and duties as such liquidator, has the right and power, upon the order of a court of record of competent jurisdiction, to enforce the individual liability of the directors of any such banking institution.

C.R.S. § 11-103-808 Emergency grant of new charter

11-103-808. Emergency grant of new charter. In addition to powers regarding liquidation or reorganization, the banking board may, in the interest of protecting the public and the depositors of a closed state bank or national banking association with its principal office in this state, issue a new bank charter to qualified individuals for the same location as the closed bank, contingent upon the new bank assuming full liability for such deposits of the closed bank as may be transferred to it. Under such conditions, a new charter may be issued summarily without the publication of notice, without the holding of a public hearing, and without complying with any of the other provisions and procedures specified in this code.

C.R.S. § 11-103-809 Emergency grant of branch facility - legislative declaration

11-103-809. Emergency grant of branch facility - legislative declaration. (1) The general assembly hereby finds, determines, and declares that the economy of this state and its communities and the public interest will be better served by permitting financial institutions, as defined in section 11-101-401 (35), to operate at the same location as a closed bank. (2) (a) In addition to powers regarding liquidation or reorganization, the banking board, in the interest of protecting the public and the depositors of a closed bank or national banking association with its principal place of business in this state, may issue an emergency grant of authority to another financial institution, which financial institution has acquired assets and liabilities of the closed bank, to operate a branch facility at the same location as the closed bank, or within a one-half mile radius of the location of the nearest point on the boundary of the premises of the closed bank's place of business, contingent upon the bank assuming full liability for the deposits of the closed bank as may be transferred to it. Such branch facility shall not be located at any other location if the other location is within three hundred feet of the boundary of the premises of another bank unless the other bank consents to a closer location. (b) Under such conditions, the authority to operate the branch facility may be issued summarily without the publication of notice, without the holding of a public hearing, and without complying with any of the other provisions and procedures specified in this code. (3) No financial institution may hold, acquire, control, or operate more than two branch facilities pursuant to this section; however, if the banking board determines that, because of this limitation, no qualified financial institution can bid on the assets and liabilities of the closed bank, the banking board may authorize and issue such an emergency grant to another financial institution, in excess of such limit, but in no event more than two additional branch facilities. (4) Notwithstanding any other provision of this section, a branch facility operated pursuant to this section on or before August 1, 1991, may continue to operate in perpetuity as a branch without being subject to any percentage limitation on branches as set forth in section 11-105-602.

C.R.S. § 11-103-810 Preapproved shelf charter

11-103-810. Preapproved shelf charter. The board may preapprove a shelf charter for a new bank to qualified individuals, contingent upon the new bank completing all specified requirements and purchasing the assets and assuming the liabilities of a bank in receivership as the federal deposit insurance corporation may determine, if the proposed bank has its principal place of business in Colorado and has assets and liabilities held in receivership by the federal deposit insurance corporation. The shelf charter may be preapproved and summarily issued without publication of a notice, without the holding of a public hearing, and without complying with all of the other provisions and procedures specified in this code. Upon federal deposit insurance corporation approval of the purchase and assumption by the new bank, the final charter approval may be granted, together with final approval of deposit insurance by the federal deposit insurance corporation. If the bid is not accepted by the federal deposit insurance corporation, the charter remains on the shelf for up to eighteen months. During that time, the charter may be used for other bids.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://leg.colorado.gov/sites/default/files/images/olls/crs2024-title-11.docxFetched: 10/6/2026