Incorporation and Organization of Banks

Miss. Code Ann. tit. 81, ch. 3

in effect

Miss. Code Ann. § 81-3-1 Definition of words “bank,” “corporation,” “eligible bank,” as used in title.

Whenever the word “bank” is used in any statute, unless the context clearly shows that it is intended to be limited in its application to a particular character of bank, it shall include trust companies, savings banks, branches of banks and trust companies, and all other institutions subject to the provisions of this title. The term “corporation,” when used in this title, or “trust company” when used in this title, shall be construed and held to embrace every character of bank, branch bank, trust company or any branch thereof, which is subject to the jurisdiction of the Department of Banking and Consumer Finance. The term “eligible banks,” when used in this title, means an institution which is well capitalized as defined by regulations of the Federal Deposit Insurance Corporation, has examination ratings of two (2) or higher, has Community Reinvestment Act (CRA) ratings of satisfactory or higher, and has no supervisory enforcement actions pending.

Miss. Code Ann. § 81-3-3 Use of words “bank,” “banking,” “bankers,” “trust company,” etc.; supervision and assessment of banks.

Every banking corporation organized under the laws of this state shall include the word “bank” or “banking” in its name. No corporation hereafter organized shall include in its name the words “bank,” “banker,” “bankers,” “banking” or “trust company,” or any of them, or any combination thereof, or any words of similar import, unless such corporation shall, by the express provisions of its charter, be limited solely to the doing of a banking or trust business, or a combination of banking and trust business as contemplated in this chapter; and all such corporations shall be incorporated and organized under and pursuant to the terms of this chapter providing for the incorporation of banking corporations and not otherwise. Every corporation organized under the laws of this state for the purpose of conducting or carrying on a commercial banking business, or the business of a savings bank, or trust company, or the exercise of trust powers as defined in this title, or any combination thereof, shall be subject to supervision by the department of bank supervision and the state comptroller, and to assessments for the maintenance of said department as provided by law.

Miss. Code Ann. § 81-3-5 Incorporation of banks.

Five or more persons of full age and of good moral and sound business character may organize themselves into a banking corporation. Banking corporations may be created for the purpose of conducting and carrying on a bank and trust company business, such trust company business to be limited as herein provided, and to establish offices of loan and deposit to be known as savings banks, or to establish banks having departments for carrying on all of the above classes of business; and said banking corporations may, under the provisions of the banking laws of Mississippi, establish branch banks and branch offices within territorial limitations as hereinafter provided in Chapter 7 of this title. No private individual, or partnership, or association of persons other than a corporation shall be allowed to conduct any type of banking business within this state.

Miss. Code Ann. § 81-3-7 Articles of incorporation.

The articles of incorporation of every banking corporation shall be signed and acknowledged before an officer authorized by the laws of this state to take acknowledgments and shall specify: The name assumed by such corporation which shall be in no material respect similar to the name of any other corporation organized under the laws of this state. The county and city, town or village where such corporation will be domiciled and conduct its business. The nature of its business, whether that of a commercial bank, savings bank, trust company or any combination thereof. That the amount of capital stock shall be divided into shares of not less than One Dollar ($1.00) each. The names and places of residence of the stockholders and the number of shares held by each of them. The period for which the corporation is organized which shall not exceed ninety-nine (99) years, but which may be renewed for additional periods of ninety-nine (99) years each, as set out in Section 81-3-15. The articles of incorporation shall be executed in triplicate, and after the proper incorporation fee has been paid, and the articles approved by the Secretary of State, the State Comptroller, the Attorney General and the Governor, one (1) copy shall be filed in the office of the Secretary of State and recorded there as required by law; one (1) copy in the office of the Department of Bank Supervision and one (1) copy filed for record in the office of the chancery clerk of the county in which the banking corporation is domiciled, and then returned to said banking corporation and kept in its files. Every banking corporation shall adopt appropriate bylaws to govern its operation, which shall harmonize with the provisions of its articles of incorporation and the laws of the state. Every banking corporation shall designate a person to serve as president and a person to serve as cashier. When the period of existence of a banking corporation heretofore created for a period of fifty (50) years shall expire, if such banking corporation shall continue to do business thereafter for a period of ninety (90) days, the same shall operate as an acceptance of an extension of the life of such banking corporation to a full period of ninety-nine (99) years from the date of the original charter thereof, and such banking corporation shall continue in existence as a de jure corporation as fully and completely as if the charter thereof had been thus amended prior to the end of the original period of fifty (50) years.

Miss. Code Ann. § 81-3-9 Number of directors; payment for capital stock; increases in authorized but unissued capital stock.

Every banking corporation shall have at least five (5) directors, and before transacting any business its entire capital stock shall be paid in full in cash except as herein otherwise provided. Any banking corporation, with the approval of the state comptroller, by amendment to its articles of incorporation approved by the affirmative vote of stockholders owning two-thirds (2/3) of the capital stock of the banking corporation entitled to vote, at a meeting setting forth the purpose thereof, may authorize an increase in the capital stock of the banking corporation in the category of authorized but unissued capital stock, either with or without preemptive rights, provided that the total authorized amount of such authorized but unissued capital stock shall not exceed fifteen percent (15%) of the amount issued and outstanding capital stock of such banking corporation entitled to vote on the amendment authorizing such authorized but unissued capital stock. Authorized but unissued capital stock may be issued, from time to time, as stock dividends or for such other purposes and considerations as may be approved by the stockholders, the board of directors of the banking corporation and by the state comptroller.

Miss. Code Ann. § 81-3-11 Capital stock and surplus required.

No banking corporation shall be permitted to operate in the State of Mississippi under the provisions of this chapter unless it has the minimum capital of Two Million Dollars ($2,000,000.00) or any additional amounts required by the supervising federal regulatory agencies. However, this requirement of capital shall not apply to banks in operation in this state before July 1, 1994. At any time that the commissioner finds that an operating bank has an insufficient amount of capital, it shall be his duty to call upon such bank to restore the capital to an amount to be determined to be adequate to safeguard the depositors of the bank. For the purpose of strengthening its capital structure, every banking corporation organized under the laws of this state shall, except as otherwise provided herein, at the close of business each year set aside to the credit of a separate surplus account, to be denominated on its books “Earned Surplus,” an amount not less than twenty-five percent (25%) of its net earnings, after providing for the payment of dividends on its preferred stock, if any, until the “Earned Surplus” account on its books shall amount to a sum equal to three (3) times the total of its common and preferred stock. However, any bank having at the close of the business year a ratio of total deposits to total capital, surplus and earned surplus not in excess of a ratio of Ten Dollars ($10.00) of deposits to One Dollar ($1.00) of total capital (such deposits to be the average of the deposits shown by all of the calls for the business year and such capital to include all stock, surplus and earned surplus) shall be required to set aside twenty-five percent (25%) of its earnings only to the extent necessary to cause its “Earned Surplus” account to equal its total capital. When such ratio of total deposits to total capital of any bank at the close of business any year does not exceed that specified above and the “Earned Surplus” account is equal to or more than the amount of its total capital, then such bank shall not be required to set aside twenty-five percent (25%) of its earnings for that year to the credit of its “Earned Surplus” account, but may so set aside any part of its earnings until its “Earned Surplus” account is equal to three (3) times its total capital. The net earnings of every bank set aside to its “Earned Surplus” account shall be exempt from all state, county, municipal, levee district and other ad valorem taxes. Every national banking association doing business in this state which shall comply with the provisions hereof, shall be entitled to the same exemption from taxation on its earned surplus and to the same rights and privileges hereby given to state banks. “Earned Surplus” as referred to in this chapter shall be construed to mean only the earned surplus account as shown on the books of the bank on the effective date of this chapter and such earnings as may thereafter be credited to such account. Surplus actually carried on the books of the bank on April 2, 1934, shall remain taxable, and if charged off for any purpose other than to transfer it to taxable common stock, it shall be restored either out of the earned surplus account or from earnings. But if the state comptroller, or in the case of a national bank, the comptroller of the currency, shall determine that on April 2, 1934, there were actually existing losses among the assets of a bank and that the surplus shown on the books of such bank was not actually worth the amount at which it was then being carried, he may issue his certificate to the bank showing the actual value of its surplus on April 2, 1934, and the bank may reduce the amount thereof to the actual value as shown by such certificate and shall not be required to restore it. The paid-in surplus of any bank derived from sale of shares of its capital stock after January 1, 1961, shall be considered as earned surplus in an amount not to exceed the common stock and shall be treated as earned surplus for the purpose of ad valorem taxation. In rendering the annual statement required by section 27-35-35, Code of 1972, banks may exclude from the value of their shares the total “earned surplus” as shown on their books, and such earned surplus shall not be taken into consideration by the assessing officers or equalizing authority, in arriving at the amount of the personal assessment.

Miss. Code Ann. § 81-3-12 State board of banking review; members; appointment; compensation; ineligibility to consider certain matters; meetings and hearings.

There is created the State Board of Banking Review, which shall be composed of five (5) members appointed by the Governor as provided in this section, one (1) of whom shall be from the First Supreme Court District, one (1) of whom shall be from the Second Supreme Court District, one (1) of whom shall be from the Third Supreme Court District, and two (2) of whom shall be from the state at large. The members appointed from the state at large shall be designated as representatives of the banks and shall be active executive officers or directors of state chartered banks with actual practical experience of at least five (5) years therein. The members appointed from each Supreme Court District shall be persons knowledgeable in economic affairs and of recognized ability in a trade or business, with at least three (3) years’ actual experience therein, but shall not presently be officers or directors in any banking corporation, shall not have been officers or directors in any banking corporation for the past five (5) years immediately prior to their appointment to the board, shall not become officers or directors of any banking corporation while serving on the board, and shall not be the beneficial owner, directly or indirectly, of five percent (5%) or more of the capital stock in any banking corporation; such persons shall be designated representatives of borrowers and depositors. Each member shall be eligible for reappointment at the discretion of the Governor. The board shall elect from its number a chairman and a vice chairman. Each member of the board shall be a citizen of the United States, a resident of the State of Mississippi and a qualified elector therein, of integrity and sound and nonpartisan judgment. Each member shall qualify by taking the oath of office and shall hold office until his successor is appointed and qualified. On March 21, 1980, the board shall be appointed as follows: The Governor shall appoint one (1) member from the Third Supreme Court District for a term of one (1) year, one (1) member from the Second Supreme Court District for a term of two (2) years, one (1) member from the First Supreme Court District for a term of three (3) years, one (1) member from the state at large for a term of four (4) years, and one (1) member from the state at large for a term of five (5) years. Upon the expiration of the foregoing terms, members shall be appointed by the Governor for terms of five (5) years. The Governor shall fill any vacancy in the above terms by appointment of a member for the unexpired term. All appointments shall be with the advice and consent of the Senate. The members of the board shall serve without compensation except that members shall be paid their actual and necessary expenses in connection with the performance of their duties as members of the board, including mileage, as authorized in Section 25-3-41, plus a per diem as is authorized by law while engaged in the performance of such duties. Such expenses, mileage and per diem allowance shall be paid out of the maintenance fund of the Department of Banking and Consumer Finance. If an application for authority to establish a bank, branch bank or branch office be filed with the commissioner for consideration from any municipality or county of which the member of the board who is a representative of the banks is a resident, or if such application is filed from any county in which the member’s bank has a branch bank or branch office, such member shall be ineligible to serve in consideration and determination of such application, and the commissioner shall certify such fact to the Governor who shall thereupon appoint another banker from the same geographical location as the member who is ineligible to serve on the board in the place and stead of such member during consideration of such application. In addition to its other duties and powers, the board may adopt reasonable rules or regulations, consistent with applicable provisions of law, concerning the conduct of board meetings and hearings and all formal and informal board procedures relating to such meetings and hearings. The board shall have authority, with respect to its hearings or meetings, to determine the order and form in which evidence may be presented and to impose reasonable time limitations on presentation of evidence.

Miss. Code Ann. § 81-3-13 Certificate to incorporate and organize.

Before any bank may be organized and formed, the prospective incorporators shall give notice to the Commissioner of Banking and Consumer Finance of their desire to engage in banking and apply for a certificate of authority to incorporate, and shall at the time file with the commissioner a copy of the proposed articles of incorporation, duly sworn to by one (1) of the prospective incorporators. The commissioner shall promptly give consideration to the application and make an examination of the proposed articles of incorporation to determine if they meet all requirements of law. The commissioner shall then make an investigation of the number of parent banks, branch banks, branch offices and branch facilities, and location thereof then serving the area in which the proposed new bank is to be located, the ratio of capital funds to total deposits therein, the record of earnings and condition of existing banks and what effect, if any, a new unit bank would have on them, the number of previous bank failures in the area and their liquidation record and banking history generally in the area, the population of the area wherein the proposed bank will be located and relation to number of banks operating therein, reasonable prospects of growth of the area and its financial resources and whether the same are static, progressive or retrogressive, expectation of profitable operation of the proposed new bank, and the morals and business character of the prospective incorporators and such further investigation to determine whether the public necessity requires that the proposed new bank should be chartered and permitted to operate. When the commissioner has completed the examination and made his investigation, he shall record his findings in writing and shall draw up his recommendations to the State Board of Banking Review, established in Section 81-3-12. At the request of the chairman, he shall thereupon, in writing, call a meeting of the board to give consideration to his findings and recommendations, such call to be issued at least ten (10) days in advance of the meeting. Such meetings shall be held within one hundred twenty (120) days from the date on which the prospective incorporators gave notice to the commissioner of their desire to engage in banking, applied for a certificate of authority to incorporate, and filed with the commissioner a copy of the proposed articles of incorporation. The commissioner shall at the same time give notice of the meeting of the board to the prospective incorporators of the proposed new bank and to any and all other interested persons and shall extend to them an invitation to be heard in writing or in person by the board. The board, at its meeting, shall consider the findings and recommendations of the commissioner and shall hear such oral testimony as he may wish to give, and shall also receive information and hear testimony from the prospective organizers of the proposed bank and from any and all other interested persons bearing upon the public necessity for the organization and operation of the new bank. After considering the record submitted to it by the commissioner and his oral testimony and considering such other information and evidence, either written or oral, which has come before it, the board shall decide if it has before it sufficient information and evidence upon which it can dispose of the application to form the new bank. If it is determined that evidence and information is not sufficient, then the board shall order the commissioner to secure such additional information and evidence as it may prescribe or shall request from the prospective incorporators and from other interested persons. The board shall thereupon set a date for a future meeting to be held before the expiration of the aforementioned one hundred twenty (120) day time limit and shall give to the prospective incorporators and other interested persons notice of such meeting, and shall recess the meeting then being held until such future date. The board shall have and is hereby vested with the power to compel attendance of witnesses just as is the commissioner or examiner as provided for in Section 81-1-85, and all testimony given before said board shall be taken down and transcribed by a stenographer in the manner prescribed in Section 81-1-87. If the board, or a majority thereof, shall determine that it has before it sufficient evidence and information upon which to base a decision, then it shall render a written opinion and decision in the matter within sixty (60) days after the conclusion of the final board hearing. If its decision is favorable, then the board shall order the commissioner to give to such prospective incorporators a certificate under his hand and official seal of the Department of Banking and Consumer Finance authorizing the prospective incorporators to proceed to incorporate and organize as is provided in Section 81-3-7. When a certificate of incorporation is sought in order to effect the acquisition of an insolvent bank sold pursuant to the provisions of Chapter 9, Title 81, Mississippi Code of 1972, any constraints of time imposed by this subsection shall not apply if the commissioner determines that an emergency exists which requires expedition of the procedure for granting a certificate in order to protect the interests of the public and the interests of depositors and creditors of the insolvent bank. Appeal from unfavorable decision of State Board of Banking review. If the decision of the board, or a majority thereof, is unfavorable to the organization of the proposed new bank, it shall render a written opinion and decision giving its reason for rejection within sixty (60) days after the conclusion of the final board hearing in the matter, and the commissioner shall so advise the prospective incorporators, giving them a copy of the written decision and opinion of the board. If the prospective incorporators be aggrieved at the unfavorable decision of the board in denying a certificate authorizing them to proceed with the incorporation of the proposed new bank and the organization thereof, they shall have the right of appeal to the chancery court of the county in which the proposed bank shall be located, which appeal shall be taken and perfected within sixty (60) days from the date of the denial of such certificate. The denial of said certificate by the board shall be construed as a judicial finding and appealable as such. All such appeals shall be taken, perfected, heard and determined either in termtime or vacation, and such appeals shall be heard and disposed of promptly by the court. Appeals from the board shall be taken and perfected by the filing of a bond in the sum of Two Hundred Fifty Dollars ($250.00), with two (2) sureties, or with a surety company qualified to do business in Mississippi as surety, conditioned to pay the costs of the appeal, the bond to be approved by the clerk of the chancery court, and such bond shall be payable to the state and may be enforced in its name as other judicial bonds filed in the chancery court, and judgment may be entered upon such bonds and process and execution shall issue upon such judgments as provided by law in other cases. Appeals may be taken from the chancery court to the Supreme Court in the manner now provided by law. Upon approval of the bond by the clerk of the chancery court the clerk shall give notice to the commissioner of the appeal from the decision of the board, and it thereupon shall be the duty of the commissioner to promptly transmit to the clerk of the chancery court in which the appeal is pending the original or a certified copy of the application, proposed charter of incorporation, and his findings or decision thereon together with the opinion and decision of the board, including a transcript of pleadings and testimony, both oral and documentary, which shall be docketed by the clerk and shall be tried by the court. In perfecting such appeals, the provisions of law respecting notice to reporters and allowance of bills of exception, now or hereafter in force respecting appeals from the chancery court to the Supreme Court shall be applicable thereto. If the prospective incorporators of the proposed new bank shall prevail, a decree shall be entered requiring the issuance by the commissioner of the certificate authorizing applicants to incorporate and organize in the same manner as if the application therefor had been approved by the board, and the costs therein incurred shall be paid by the commissioner out of the maintenance fund of the Department of Banking and Consumer Finance. If, however, the action of the board be affirmed by the court, a decree shall be entered to that effect taxing costs of the proceedings to the applicants. The commissioner or the applicants shall have the right of appeal from the decision of the chancery court. During the time the cause is pending in the office of the commissioner or before the board or the court, the commissioner shall not issue a certificate to a subsequent applicant to incorporate and organize a new bank or authorize any bank then existing to establish a branch bank, or branch office within the area wherein the proposed new bank is to be domiciled, and neither shall he consent to the removal of the domicile of an existing bank from another place into the area where the proposed new bank will be domiciled. A cause shall not be considered as pending in the office of the commissioner or before the board if the prospective incorporators or their representative have only given notice to the commissioner of their desire to engage in banking and apply for a certificate of authority to incorporate, but have not filed with the commissioner a copy of the proposed articles of incorporation and other documents required by statute or administrative regulation. If the decision of the board, or a majority thereof, is favorable to the organization of the proposed bank, it shall in like manner as above render a written opinion and decision within sixty (60) days after the conclusion of the final board hearing on the matter, and an appeal in the manner herein set forth shall be available to any interested organizations, person or persons who have participated in the proceedings and feel aggrieved by the decision of the board. Certificate to begin business. When a bank has been incorporated and the capital stock thereof has been paid in full, the incorporators shall notify the commissioner of such fact, whereupon the commissioner himself or through an examiner shall make a special examination of the proposed new bank and, finding the capital stock to have been paid in full, he shall under his hand and seal of the Department of Banking and Consumer Finance issue to the bank a certificate authorizing it to commence business, and when such business has been commenced the bank shall notify the commissioner to that effect. Upon completion of such special examination, the bank shall pay to the Department of Banking and Consumer Finance as an assessment an amount sufficient to reimburse for the actual costs and expenses incurred during such special examination. The commissioner or examiner shall give a receipt therefor in duplicate, and the assessment shall be turned over by the Department of Banking and Consumer Finance to the State Treasurer for credit to the maintenance fund of the Department of Banking and Consumer Finance. The proposed new bank shall not transact any business except as is necessarily preliminary to its incorporation and organization until it has been authorized by the commissioner to begin business. However, in the event the board shall reject any application for a certificate of convenience and necessity, all costs incurred by this board in making a survey or holding a hearing on such application shall be borne by the petitioners. Expiration of certificate to incorporate and organize a bank. Notwithstanding the foregoing and any other provision of law to the contrary, if a bank has not been established and is not in operation within two (2) years from the date of the certificate to incorporate and organize such bank or within two (2) years from the date upon which any appellate litigation with respect to such certificate has been concluded, the certificate shall expire. Provided, however, the State Board of Banking Review may extend for good cause shown said two-year period a maximum number of two (2) times for periods not exceeding six (6) months each. This provision shall in no way affect certificates issued prior to March 21, 1980.

Miss. Code Ann. § 81-3-14 Repealed.

Repealed by Laws, 2001, ch. 374, § 2, eff from and after July 1, 2001. [Laws, 1979, ch. 301, § 49; Laws, 1980, ch. 312, § 39; Laws, 1982, ch. 302, § 2; Laws, 1990 Ex Sess, ch. 46, § 34; Laws, 1993, ch. 442, § 35; reenacted, 1994, ch. 622, § 36; Laws, 1997, ch. 497, § 43, eff from and after July 1, 1997.]

Miss. Code Ann. § 81-3-15 Renewals and amendments of charters.

The charter or articles of incorporation of banking corporations heretofore created or that may hereafter be created, may be renewed or amended in the following manner: The stockholders in a special or regular meeting, shall first, by a vote of a majority in amount of all stock outstanding, adopt a resolution setting forth the proposed renewal or amendment, subject to the approval of the state comptroller. Three copies of such resolution duly certified by the president or vice-president of such bank shall be forwarded to the state comptroller for his approval, together with the fee required by statute. If the proposed amendment is approved by the state comptroller, he shall attach his certificate of approval to each of the copies and forward all three copies to the Attorney General for his approval, and shall forward the fee required by statute to the Secretary of State. If and when approved by the Attorney General, all three copies of said amendment shall be forwarded to the Governor for his approval, and when approved by him shall be forwarded by the Governor to the Secretary of State. The Secretary of State shall retain one copy and file and record the same in his office. He shall forward one copy thereof to the state comptroller, who shall retain and file the same in his office. The remaining copy shall be returned to the bank, and the bank shall immediately record the same in the office of the chancery clerk of the county in which the bank is domiciled. Said copy after being so recorded, shall be returned to the bank and retained by it in its files. It shall not be necessary to publish such renewal or amendment.

Miss. Code Ann. § 81-3-17 Ownership by holding company.

Subject to the prohibitions provided in Section 81-5-28, Mississippi Code of 1972, but notwithstanding any other provision of law, any bank may simultaneously with its incorporation provide for its ownership by a holding company. Subject to the prohibitions provided in Section 81-5-28, Mississippi Code of 1972, but notwithstanding any other provision of law, any bank may reorganize its ownership to provide for ownership by a holding company upon adoption of a plan of reorganization by a favorable vote of not less than two-thirds (2/3) of the members of the board of directors of the bank and approval of such plan of reorganization by the holders of not less than a majority of the issued and outstanding shares of stock of the bank. The plan of reorganization shall provide that (a) the resulting ownership shall be vested in a Mississippi corporation; (b) all stockholders of the stock bank shall have the right to exchange shares; (c) the exchange of stock shall not be subject to state or federal income taxation; (d) stockholders not wishing to exchange shares shall be entitled to dissenters’ rights as provided under Section 79-4-13.01 et seq., Mississippi Code of 1972; and (e) the plan of reorganization is fair and equitable to all stockholders.

Source: Public.Resource.Org MS CodeURL: https://unicourt.github.io/cic-code-ms/transforms/ms/ocms/r78/gov.ms.code.title.81.htmlFetched: 6/10/2026