Md. Code, Financial Institutions, Title 3

Md. Code, Financial Institutions, Title 3
in effect

Md. Code, Financial Institutions § 3-101

(a) In this title the following words have the meanings indicated. (b) “Capital stock” includes both common and preferred stock of a commercial bank. (c) “Debt instrument” means any capital note, debenture, bond, or certificate of beneficial interest issued by a commercial bank. (d) “Inhabitants” means the population of a municipal area, as determined by the latest federal or State census. (e) “Nondepository trust company” means a trust company that is not insured by the Federal Deposit Insurance Corporation. (f) “State bank” means an institution that is incorporated under the laws of this State as a bank. (g) “Trust company” means an institution that is incorporated under the laws of this State as a trust company.

Md. Code, Financial Institutions § 3-102

Every trust company has the powers granted by, and is subject to, the provisions of this article that relate to trust companies. However, except as provided in § 3-209(b) of this title as to the establishment of branches, the provisions of this article do not repeal, modify, or affect any special right, privilege, or power given by charter to a trust company that was organized and doing business before April 8, 1910.

Md. Code, Financial Institutions § 3-103

(a) This section applies to a commercial bank that: (1) Is not in the business of accepting deposits or retaining funds in a deposit account as defined in § 5-509 of this article; and (2) Is not controlled by or under common control with a banking institution or a national banking association with its principal office located in this State. (b) A commercial bank subject to this section shall operate in compliance with all requirements and standards for the exercise of fiduciary powers that are applicable under 12 C.F.R. Part 9 to a trust department of a State-chartered trust company that is in the business of accepting deposits or retaining funds in a deposit account as defined in § 5-509 of this article.

Md. Code, Financial Institutions § 3-201

Three or more adult individuals, each of whom is a citizen of the United States, and at least one of whom is a citizen of this State, may act as incorporators to form a State bank or a trust company under this subtitle.

Md. Code, Financial Institutions § 3-202

(a) The incorporators shall sign and acknowledge two copies of articles of incorporation. (b) The articles of incorporation shall include: (1) The name and address of each incorporator; (2) A statement that: (i) Each incorporator is at least 18 years old; (ii) Each incorporator is a citizen of the United States; and (iii) At least one of the incorporators is a citizen of this State; (3) A statement that the incorporators are associating to form a State bank or a trust company under this subtitle; (4) The name of the State bank or trust company, which may not be similar in any material respect to the name of any other bank or trust company in this State; (5) The municipal area and county where the principal banking office of the State bank or trust company is to be located; (6) The number of directors and the names and residence addresses of those who will serve as directors until their successors are elected and qualify; and (7) As to its capital stock: (i) The total number of shares that the State bank or trust company has authority to issue; (ii) The par value of the shares, which may not be less than $10 a share; and (iii) The total par value of all shares. (c) The articles of incorporation may include: (1) Any provision that requires for any purpose the concurrence of a greater proportion of the votes of all classes or of any class of capital stock than the proportion required by this article for that purpose; and (2) Any provision that defines, limits, or denies the preemptive rights of stockholders to acquire additional stock of the State bank or trust company.

Md. Code, Financial Institutions § 3-203

(a) The incorporators shall file with the Commissioner for examination the two copies of the articles of incorporation. (b) The Commissioner shall investigate and determine if: (1) The articles are framed in accordance with law; (2) The character, responsibility, and general fitness of the incorporators and directors named in the articles command confidence and warrant belief that the business of the proposed commercial bank will be conducted honestly and efficiently, in accordance with the intent of this article; and (3) Allowing the proposed commercial bank to engage in business: (i) Will promote public convenience and advantage; and (ii) Is expedient and desirable. (c) After the investigation, the Commissioner may require any change in the articles of incorporation that the Commissioner considers necessary. (d) (1) Within 6 months after the articles are filed for examination, the Commissioner shall sign, date, and endorse each copy of the articles as “approved” or “refused”. (2) If formation of the commercial bank is refused, the Commissioner shall return one of the endorsed copies of the articles to the incorporators. (3) If formation of the commercial bank is approved, the Commissioner shall: (i) Return one of the endorsed copies of the articles to the incorporators; and (ii) Keep and record one of the endorsed copies.

Md. Code, Financial Institutions § 3-203.1

§3–203.1. (a) In this section, “executive officer” has the meaning stated in 12 C.F.R. § 215.2. (b) In connection with the filing of articles of incorporation of a commercial bank with the Commissioner, each incorporator, executive officer, and director of a proposed or incorporated commercial bank shall provide fingerprints for use by the Federal Bureau of Investigation and the Criminal Justice Information System Central Repository of the Department of Public Safety and Correctional Services to conduct criminal history records checks. (c) An individual required by this section to provide fingerprints shall pay any processing or other fee required by the Federal Bureau of Investigation or the Criminal Justice Information System Central Repository of the Department of Public Safety and Correctional Services.

Md. Code, Financial Institutions § 3-204

(a) If the Commissioner approves the articles of incorporation, the incorporators shall file for record one of the endorsed copies of the articles with the State Department of Assessments and Taxation. (b) Articles of incorporation that are filed for record are not effective unless the Commissioner has endorsed the articles as approved.

Md. Code, Financial Institutions § 3-205

(a) When articles of incorporation are filed for record in accordance with § 3-204 of this subtitle, the commercial bank becomes a corporation. (b) Notwithstanding any charter provision or provision of law, each commercial bank has the right to perpetual existence until forfeiture.

Md. Code, Financial Institutions § 3-206

(a) Except as otherwise provided in this article, a commercial bank has all of the general powers granted to Maryland corporations under the Maryland General Corporation Law. (b) In addition to the powers set forth elsewhere in this article, a commercial bank may: (1) Receive deposits of money on which interest may be paid; (2) Buy and sell coin and bullion; (3) Buy and sell foreign and domestic exchange; (4) Subject to § 3-604 of this title, accept drafts drawn on it; (5) Issue letters of credit that authorize the holder to draw drafts on it or on its correspondents payable at sight or at a time not exceeding 1 year; (6) Issue its debt instruments for money that is borrowed or received on deposit or for investment; (7) Lend money on personal security or on real or personal property; (8) Subject to § 3-605 of this title, become owner and lessor of personal property; (9) Subject to § 5-503 of this article, buy, hold, lease, and convey real property; (10) Pledge collateral to secure deposits of: (i) The federal government or its agencies; or (ii) Any state or its political subdivisions; (11) Pledge securities to secure the money of an estate administered under the federal bankruptcy laws; (12) Without being deemed a branch of a depository institution affiliate, act in accordance with § 101(d) of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, as agent of any depository institution affiliate in: (i) Receiving deposits; (ii) Renewing time deposits; (iii) Closing loans; (iv) Servicing loans; or (v) Receiving payments on loans and other obligations; and (13) Exercise all of the powers usual in carrying on a banking business.

Md. Code, Financial Institutions § 3-207

In addition to the powers set forth elsewhere in this article, a trust company may: (1) Receive deposits of money, securities, and other personal property from any person; (2) Act as the agent of any foreign or Maryland corporation for any lawful purpose; (3) Act as the fiscal or transfer agent of any state, any political subdivision of any state, or any corporation; (4) Accept and execute any trust and any powers that are conferred on or entrusted to it in any manner, including any grant, assignment, transfer, devise, or bequest by any person or by order of a court; (5) Accept and hold trust property; (6) Act as trustee under a mortgage or bond issue of a corporation or political subdivision; (7) Act as personal representative of the estate of any deceased individual; and (8) Act as guardian, receiver, or trustee of the estate of any person under order or appointment of a court and as depositary of money paid to the court for the benefit of the person.

Md. Code, Financial Institutions § 3-209

(a) (1) Before the Commissioner issues a certificate to do business, the required capital stock and the required surplus shall be paid in full. (2) A commercial bank shall have required capital stock that equals at least: (i) $750,000, if it is in a municipal area with not more than 50,000 inhabitants; and (ii) $1.5 million, if it is in a municipal area with more than 50,000 inhabitants. (3) A commercial bank shall have a surplus in an amount that equals at least 20 percent of its required capital stock. (b) (1) Before a commercial bank establishes a branch, the commercial bank shall have capital stock and surplus as provided in this subsection. (2) For a branch that is to be located inside the municipal area of the principal banking office of the commercial bank, the commercial bank shall have capital stock and surplus that equal at least the sum of the amounts required by subsection (a) of this section. (3) For a branch that is to be located outside the municipal area of the principal banking office of the commercial bank, the commercial bank shall have capital stock and surplus that equal at least the sum of: (i) The amount required by subsection (a) of this section; and (ii) 1. $120,000, if it is in a municipal area with not more than 25,000 inhabitants; 2. $180,000, if it is in a municipal area with more than 25,000 and not more than 100,000 inhabitants; 3. $240,000, if it is in a municipal area with more than 100,000 and not more than 250,000 inhabitants; and 4. $900,000, if it is in a municipal area with more than 250,000 inhabitants. (c) Unless otherwise provided by law, the unimpaired capital and surplus of a commercial bank include its debt instruments issued under § 3–312 of this title.

Md. Code, Financial Institutions § 3-211.1

§3–211.1. (a) In this section, “receivership” means a proceeding in which: (1) The Commissioner takes possession of a nondepository trust company in accordance with § 5–601, § 5–602, or § 5–602.1 of this article; and (2) A receiver is appointed in accordance with § 5–605 of this article. (b) (1) A nondepository trust company shall pledge securities or deliver a surety bond to the Commissioner, for the benefit of the Commissioner, to defray the costs of a receivership. (2) The amount of the securities or surety bond shall be determined by the Commissioner in an amount that the Commissioner deems appropriate to defray such costs, but in no event shall the amount exceed: (i) $1,000,000 for a nondepository trust company with a composite rating, using the Uniform Interagency Trust Rating System, of 1 or 2; or (ii) $3,000,000 for a nondepository trust company with a composite rating, using the Uniform Interagency Trust Rating System, of 3, 4, or 5. (c) Subject to the provisions of Title 5, Subtitle 6 of this article, in the event of a receivership, the Commissioner or a receiver appointed under § 5–605 of this article may, without regard to any priorities, preferences, or adverse claims, reduce the pledged securities or the surety bond to cash and use the cash to defray the costs associated with the receivership. (d) (1) If a nondepository trust company chooses to pledge securities to satisfy the requirement of subsection (b) of this section, the securities shall be held at a depository institution or a federal reserve bank approved by the Commissioner. (2) The Commissioner may specify the types of securities that may be pledged. (3) Any fees associated with holding pledged securities shall be the responsibility of the nondepository trust company. (4) Securities pledged by a nondepository trust company may not be assets relied on by the nondepository trust company to meet the minimum capital requirements of § 3–209 of this subtitle. (5) Any income earned on securities pledged by a nondepository trust company: (i) Shall be paid to the nondepository trust company; and (ii) May not be held by the Commissioner. (e) (1) If a nondepository trust company chooses to purchase a surety bond to satisfy the requirement of subsection (b) of this section, the surety bond shall be issued by a bonding company that: (i) Is authorized to do business in this State; and (ii) Has a rating in one of the three highest grades as determined by a national rating service. (2) The surety bond shall be in a form approved by the Commissioner. (3) A nondepository trust company may not obtain a surety bond from any affiliate, as defined in § 5–401 of this article.

Md. Code, Financial Institutions § 3-212

(a) After its articles of incorporation are filed for record and its required capital stock and surplus are paid in full, the commercial bank shall give to the Commissioner: (1) Notice that the commercial bank has complied with all of the applicable provisions of this title; and (2) A certified list of all of its stockholders, including their names and residence addresses and the number of shares of capital stock for which each paid. (b) The Commissioner shall examine the condition of the commercial bank to determine: (1) The name and residence of each director; (2) If the required capital stock and surplus are paid in full; and (3) If the commercial bank has complied with all other applicable provisions of this title. (c) If, after examination, it appears that the commercial bank lawfully is entitled to do business, the Commissioner shall issue the certificate of authority to do business. (d) (1) If, after examination, it appears that the required capital stock and surplus have not been paid in full, the Commissioner may not issue the certificate of authority to do business. (2) If, after examination, the Commissioner has reason to believe that the stockholders formed the commercial bank for any purpose other than legitimate business under this article, the Commissioner, with the advice and consent of the Secretary of Labor, may withhold the certificate.

Md. Code, Financial Institutions § 3-213

(a) Any commercial bank may amend its charter, in any manner not inconsistent with law, as provided in this section. (b) A proposed amendment shall be approved at a meeting called for that purpose, by the affirmative vote of the holders of two thirds of the capital stock of the commercial bank. (c) If the proposed amendment is to authorize the issuance of preferred stock, the proposed amendment shall be approved by the affirmative vote of the holders of a majority of the capital stock of the commercial bank. (d) After an amendment is approved by the stockholders: (1) The president of the commercial bank and either its cashier or treasurer shall certify the amendment; and (2) The amendment shall be signed, filed with the Commissioner for examination, and, if approved by the Commissioner, filed for record as required for articles of incorporation. (e) On filing the amendment for examination, the commercial bank shall pay to the Commissioner an examination fee of $20.

Md. Code, Financial Institutions § 3-301

(a) A subscription for the original capital stock of a commercial bank shall conform, to the extent applicable, to the provisions of the Maryland General Corporation Law that relate to stock subscriptions. (b) An increase in the outstanding capital stock of a commercial bank is not valid unless: (1) The commercial bank has sufficient surplus so that after the increase in capital stock its surplus will equal at least 20 percent of its capital stock; or (2) The amount of the increase is subscribed for and paid as required for subscription for original capital stock. (c) (1) Each share of common stock is entitled to one vote. (2) A stockholder may vote in person or by proxy the capital stock that the stockholder owns of record.

Md. Code, Financial Institutions § 3-302

(a) If the Commissioner approves, a commercial bank may issue preferred stock, in the amount and with the par value that the Commissioner approves, as provided in this section. (b) Unless otherwise provided by law, preferred stock issued under this section is not valid until the commercial bank receives the purchase price in an amount that equals at least par value. (c) If the Commissioner approves, preferred stock may be convertible into common stock on the terms and conditions that the charter provides. However, preferred stock is not convertible: (1) Into common stock of a greater total par value; or (2) At any time when the commercial bank would not have a surplus in an amount that equals at least 20 percent of its capital stock outstanding immediately after the conversion. (d) (1) The holder of preferred stock is entitled to cumulative dividends at a rate not exceeding six percent a year of its par value. (2) Dividends on common stock may not be declared or paid until the cumulative dividends on the preferred stock are fully paid. (e) Each holder of preferred stock has the voting rights that the charter provides and the Commissioner approves. (f) (1) A commercial bank may retire preferred stock in the manner and on the terms and conditions that the charter provides and the Commissioner approves. (2) If the Commissioner approves, the commercial bank may retire its preferred stock out of any surplus above that required by this title. (3) The commercial bank may not have at any time less than its required capital stock. (g) If a commercial bank dissolves voluntarily or a receiver is appointed for it, the holders of its common stock may not be paid until the holders of its preferred stock are paid, for each of their shares: (1) The amount that the charter provides, but not more than the purchase price under subsection (b) of this section and not less than the par value; and (2) All accumulated and unpaid dividends.

Md. Code, Financial Institutions § 3-303

A commercial bank may not make any loan the proceeds of which are to be used to pay for any part of a subscription to its capital stock unless the loan is secured adequately by other collateral.

Md. Code, Financial Institutions § 3-304

(a) Except as necessary to prevent a loss on a loan previously made in good faith, a commercial bank may not: (1) Make any loan secured by any of its outstanding capital stock; or (2) Buy or hold any of its outstanding capital stock. (b) If a commercial bank buys or holds any of its outstanding capital stock, the commercial bank shall sell the stock at public or private sale within: (1) 1 year after the date of acquisition; or (2) Any longer period that the Commissioner authorizes.

Md. Code, Financial Institutions § 3-305

(a) A reduction of the outstanding capital stock of a commercial bank: (1) Is not valid unless approved by the Commissioner; and (2) May not be made to an amount that is less than that required in § 3-209(b) of this title. (b) The Commissioner shall base approval on a finding that the assets of the commercial bank remaining after the proposed reduction of its capital stock will be sufficient to pay all of the claims of existing creditors.

Md. Code, Financial Institutions § 3-306

(a) If the surplus of a commercial bank at any time is less than 100 percent of its capital stock, then, until the surplus is 100 percent of the capital stock, the commercial bank: (1) Shall transfer to its surplus annually at least 10 percent of its net earnings; and (2) May not declare or pay any cash dividends that exceed 90 percent of its net earnings. (b) Any losses of a commercial bank that exceed its undivided profits may be charged to its surplus.

Md. Code, Financial Institutions § 3-307

(a) The board of directors of a commercial bank may declare a cash dividend only from the following, after providing for due or accrued expenses, losses, interest, and taxes: (1) Its undivided profits; or (2) With the prior approval of the Commissioner, its surplus in excess of 100 percent of its required capital stock. (b) If any stockholder receives a cash dividend that was declared or paid in violation of this section or § 3-306 of this subtitle, the stockholder is liable to the commercial bank for the full amount of the dividend to the extent that the capital and surplus of the commercial bank fails to meet the requirements of § 3-306 of this subtitle. (c) If any director of a commercial bank votes for or assents to the declaration of any cash dividend when the director knows that the commercial bank is insolvent or is in danger of insolvency or when the director does not have reason to believe that there are sufficient undivided profits or surplus properly available to pay the dividend under this section, the director is liable, individually and jointly with all other directors so voting or assenting, to the persons who were creditors of the commercial bank when the dividend was declared for the amount by which these creditors remain unpaid, but not more than twice the amount of the dividend.

Md. Code, Financial Institutions § 3-308

(a) The board of directors of a commercial bank may not declare a stock dividend unless its surplus, after the increase in capital stock, is equal to at least 20 percent of the outstanding capital stock as increased. (b) If the surplus of the commercial bank, after the increase in capital stock, is less than 100 percent of its capital stock as increased, the commercial bank annually shall transfer to surplus at least 10 percent of its net earnings until the surplus is 100 percent of its capital stock as increased.

Md. Code, Financial Institutions § 3-309

(a) (1) Each commercial bank shall keep a stock ledger, which shall contain the name and address of each stockholder and the number of shares of stock that the stockholder holds. (2) In any proceeding, the stock ledger is presumptive evidence of the facts stated in it. (b) (1) Any stockholder, director, or officer of a commercial bank may inspect the stock ledger during usual business hours. (2) Failure to show the stock ledger to an individual on that individual’s rightful demand subjects the officer responsible for the failure to a civil penalty of $50, payable to the Commissioner.

Md. Code, Financial Institutions § 3-310

(a) The annual meeting of the stockholders of a commercial bank shall be held at the time and place that the bylaws provide. (b) (1) In addition to any other required notice, at least one notice of the annual meeting shall be published at least 10 days before the meeting in a newspaper published or circulated in the county where the commercial bank has its principal banking office. (2) The board of directors need not publish notice of the annual meeting if every stockholder entitled to vote at the meeting executes a written waiver of the notice before the date set for the publication.

Md. Code, Financial Institutions § 3-311

(a) On demand of a stockholder, a person may not vote any share of capital stock that, on the stock ledger of a commercial bank, appears to have been transferred within the preceding year, unless the person takes an oath as provided in this section. (b) The challenged voter shall take an oath, before the judges of election or other officers of the meeting: (1) That the voter is the true owner of the capital stock and that, without any understanding that the capital stock be transferred to the party from whom it was received, the voter: (i) Bought and paid or secured payment for it with full consideration; or (ii) Received it by inheritance, bequest, survivorship, distribution, or gift; or (2) If the challenged voter is voting for a principal, by proxy or power of attorney: (i) That the voter believes the principal bought and paid or secured payment for the capital stock with full consideration; or (ii) That, to the best of the voter’s knowledge and belief, the principal is the true owner of the capital stock, having received it by inheritance, bequest, survivorship, distribution, or gift. (c) This section does not prevent a stockholder from voting any share of capital stock that is pledged in good faith for a loan but has not been sold.

Md. Code, Financial Institutions § 3-312

(a) If the Commissioner approves, a commercial bank may issue and sell debt instruments that are repayable on the terms and bear the rate of interest, if any, stated in the instruments. (b) The issuance of a debt instrument does not impair the capital stock of a commercial bank if the amount of the debt instrument is represented by cash or sound assets that exceed the impairment determined by the Commissioner. (c) The holder of a debt instrument is not subject to any liability imposed on stockholders under any law of this State. (d) In the event of liquidation, a debt instrument is: (1) Subordinate to the claims of any depositor or creditor; and (2) Preferred to the claim of any stockholder. (e) (1) Each holder of a debt instrument has the voting rights that the charter provides and the Commissioner approves. (2) A reference in this article to a required vote of the holders of the capital stock of a commercial bank includes holders of debt instruments to the extent that they are entitled to vote under this subsection. (f) Before a commercial bank retires or pays any debt instrument: (1) It shall obtain the approval of the Commissioner; and (2) Any existing deficit in its capital, disregarding any debt instrument to be retired, shall be paid in cash so that the sound capital assets of the commercial bank are at least equal to its capital stock.

Md. Code, Financial Institutions § 3-314

(a) (1) In this section the following words have the meanings indicated. (2) “Bank holding company” has the meaning stated in the Federal Bank Holding Company Act of 1956. (3) “Stock acquisition” means: (i) An acquisition of the outstanding voting stock of a commercial bank or bank holding company in this State, if the acquisition will affect the power to direct or to cause the direction of the management or policy of any banking institution or bank holding company; or (ii) An acquisition of any voting stock of a commercial bank, if the acquisition will give any one person control of 25 percent or more of the voting stock of the commercial bank. (b) Except as provided in this section, a person may not make a stock acquisition. (c) (1) A person who intends to make a stock acquisition shall apply to the Commissioner for approval, at least 60 days before the acquisition becomes effective. (2) The application shall include: (i) A description of the proposed stock acquisition; and (ii) All other information that is available to inform the Commissioner of the effect of the acquisition on the power to direct or to cause direction of the management or policy of a banking institution or bank holding company. (3) If there is any doubt as to whether the stock acquisition will affect the power to direct or cause direction of the management or policy of a commercial bank or bank holding company, the doubt shall be resolved in favor of reporting to the Commissioner. (d) The Commissioner may deny approval for a stock acquisition that the Commissioner determines to be anticompetitive or to threaten the safety or soundness of a banking institution. (e) Voting stock that is acquired in violation of this section may not be voted for 5 years. (f) The provisions of this section do not apply to an acquisition for which an application is required under § 5-904 of this article.

Md. Code, Financial Institutions § 3-315

(a) Except as provided in subsection (b) of this section, the chief executive officer of a commercial bank shall report to the Commissioner as soon as the officer becomes aware that any person has applied for or has received a loan from the commercial bank that is to be secured by 25 percent or more of the voting stock of any commercial bank. (b) This section does not apply if: (1) The loan applicant or borrower has been the owner of record of the stock for at least 1 year; or (2) The stock is stock of a newly organized but not yet opened commercial bank. (c) A report required by this section shall describe the loan transaction and contain whatever information is available to inform the Commissioner of the effect of the loan on the power to direct or cause direction of the management or policy of the commercial bank whose stock is involved. (d) The chief executive officer of a commercial bank may not knowingly: (1) Fail to make promptly a report required by this section; or (2) Make a report under this section that contains any statement that the officer knows to be false.

Md. Code, Financial Institutions § 3-316

(a) Unless the charter provides otherwise, a stockholder does not have any preemptive rights with respect to: (1) Stock issued to obtain any of the capital required to initiate the enterprise of the State bank or trust company; (2) Stock issued for at least its fair value in exchange for consideration other than money; (3) Stock remaining unsubscribed for after being offered to stockholders; (4) Treasury stock sold for at least its fair value; (5) Stock issued or issuable under an agreement of merger; (6) Stock which is not presently entitled to be voted in the election of directors issued for at least its fair value; (7) Stock, including treasury stock, issued to an officer or other employee of the State bank or trust company or its subsidiary on terms and conditions approved by the stockholders by the affirmative vote of two-thirds of all the votes entitled to be cast on the matter; and (8) Any other issuance of shares if the applicability of preemptive rights is impracticable. (b) In the absence of actual fraud or gross disparity in the determination, the fair value of stock determined by the board of directors and recorded in the resolution authorizing the issuance is conclusive. (c) Unless the articles of incorporation provide otherwise, holders of the following securities do not have any preemptive rights: (1) Bonds, notes, debentures, or other obligations convertible into stock; and (2) Stock not presently entitled to be voted in the election of directors.

Md. Code, Financial Institutions § 3-403

(a) (1) After the initial issuance of capital stock by a commercial bank, each of its directors shall own in good faith and of record unencumbered shares of the capital stock of: (i) The commercial bank; or (ii) A corporation that owns more than 80 percent of the capital stock of the commercial bank. (2) The unencumbered capital stock owned by the director shall be in the amount of at least: (i) $500; or (ii) $250, if the commercial bank is a State bank that has $50,000 or less in capital stock. (3) To determine the amount of capital stock owned by a director: (i) Based on the value of the stock on the date of purchase or on the date the director took office, whichever is greater, any one or more of the following may be considered: 1. Aggregate par value in the amount required under either paragraph (2)(i) or (ii) of this subsection; 2. Aggregate shareholder’s equity in the amount required under either paragraph (2)(i) or (ii) of this subsection; or 3. Aggregate fair market value in the amount required under paragraph (2)(i) or (ii) of this subsection; and (ii) Debt instruments of the commercial bank or corporation may not be considered. (b) At least 30% of the directors of a commercial bank shall be residents of this State.

Md. Code, Financial Institutions § 3-404

Each director of a commercial bank shall take an oath: (1) To perform diligently and honestly the duties of the office; and (2) Not to violate knowingly or permit knowingly a violation of any law that relates to the commercial bank.

Md. Code, Financial Institutions § 3-405

(a) Until successors are elected and qualify, the board of directors of a commercial bank consists of the individuals named as directors in the articles of incorporation. (b) (1) Except as provided in paragraph (2) of this subsection, at each annual meeting of stockholders, the stockholders shall elect directors to hold office until the earlier of: (i) The next annual meeting of stockholders and until their successors are elected and qualify; or (ii) The time provided in the terms of any class or series of stock pursuant to which the directors are elected. (2) (i) Subject to subparagraphs (ii) and (iii) of this paragraph, if the directors are divided into classes, the term of office may be provided in the bylaws. (ii) The term of office of a director may not be longer than 5 years or, in the case of an initial or substitute director, shorter than the period between annual meetings. (iii) The term of office of at least one class of directors shall expire each year.

Md. Code, Financial Institutions § 3-406

(a) Each director of a commercial bank shall attend at least one half of the regularly scheduled board meetings that are held during the director’s term of office. (b) (1) Any director who fails to attend meetings of the board of directors as required by this section is disqualified automatically from serving as director for a succeeding term. (2) The Commissioner may waive the disqualification of a director if the director shows to the Commissioner good cause for the failure to attend the meetings.

Md. Code, Financial Institutions § 3-407

The board of directors of a commercial bank may fill any vacancy on the board by electing an individual to serve until the next annual meeting of the stockholders and until a successor is elected and qualifies.

Md. Code, Financial Institutions § 3-408

(a) A majority of the directors of a State bank then serving is a quorum. (b) The articles of incorporation or bylaws of a trust company may specify the number of directors that is a quorum, but the number shall be at least the greater of one third of the directors or four directors.

Md. Code, Financial Institutions § 3-409

(a) Within 15 days after the annual meeting of the stockholders and after the directors–elect have qualified, the board of directors of a commercial bank shall meet and elect the officers of the commercial bank. (b) Unless the bylaws provide otherwise, each officer serves for a term of 1 year and until a successor is elected and qualifies. (c) The board of directors may remove any officer at any time.

Md. Code, Financial Institutions § 3-501

(a) In this subtitle the following words have the meanings indicated. (b) “Common trust fund” means a fund that a trust company maintains under this subtitle solely for the collective investment of money held by the trust company as fiduciary. (c) “Fund plan” means a written plan for the establishment and administration of a common trust fund. (d) “Trust company” includes a national banking association that has powers similar to those given to a trust company under the laws of this State. (e) “Valuation date” means a date as of which a trust company determines the value of the assets in a common trust fund that it administers.

Md. Code, Financial Institutions § 3-504

(a) A trust company shall establish and maintain a common trust fund only in accordance with a fund plan that is approved: (1) By resolution of the board of directors of the trust company; and (2) By legal counsel. (b) Notwithstanding any provision of law that applies to a participating fiduciary account, a fund plan controls: (1) Participations in the fund; and (2) The rights and benefits in participating accounts of all persons who have interests in the fund.

Md. Code, Financial Institutions § 3-505

Except as provided in § 3-507 of this subtitle, a fund plan shall state the name of the fund and include detailed provisions, not inconsistent with this subtitle, as to: (1) The intervals at which the trust company will determine the value of the assets in the fund; (2) The intervals at which the trust company will have an audit made of the fund; (3) The manner in which the fund is to be operated; (4) The investment powers of the trust company with respect to the fund; (5) The terms and conditions that govern entry in and withdrawal from the fund; (6) The auditing and settling of accounts of the trust company with respect to the fund; (7) The basis and method to be used for valuing fund assets; (8) The circumstances and manner in which the fund may be terminated; and (9) Any other matters that are necessary to define clearly the rights and duties of the trust company and fund participants.

Md. Code, Financial Institutions § 3-506

(a) A fund plan may provide for: (1) The amortization of premiums on bonds or other obligations; (2) The disposition of discounts, profits, stock rights, stock dividends, and extraordinary dividends; (3) The allocation or apportionment between principal or income of the items specified in item (2) of this subsection; and (4) Any other similar matters. (b) To the extent that a fund plan does not provide otherwise as to the determination, allocation, and apportionment of principal and income, the principles of Titles 14 and 14.5 of the Estates and Trusts Article apply.

Md. Code, Financial Institutions § 3-507

Notwithstanding any other provision of this subtitle, a trust company may provide in a fund plan that the fund shall be administered in accordance with those federal rules and regulations that relate to the collective investment of trust funds by national banking associations.

Md. Code, Financial Institutions § 3-508

(a) A copy of the fund plan and any amendments to it shall be filed at the principal banking office of the trust company, where it shall be available during regular business hours for inspection by any cofiduciary or person who has an interest in a participating account. (b) On a reasonable request, a copy of the fund plan shall be provided to any cofiduciary or person who has an interest in a participating account.

Md. Code, Financial Institutions § 3-510

A trust company, acting in a fiduciary capacity, may invest money in one or more common trust funds if: (1) The trust company holds the money for investment; and (2) The instrument or authorization that created the fiduciary relationship does not contain any terms inconsistent with this type of investment.

Md. Code, Financial Institutions § 3-511

(a) A trust company may invest in a common trust fund money from an account that it administers as a cofiduciary if the trust company: (1) Otherwise may do so under § 3-510 of this subtitle; and (2) First obtains the written consent of all other cofiduciaries of that account. (b) A trust company that administers a common trust fund, in which an account held by the trust company as cofiduciary participates, is solely responsible for management and control of the fund. (c) A cofiduciary, other than the trust company, who consents in good faith to the participation of an account in a common trust fund is not liable to the beneficiaries for the management of the fund. (d) On receipt of the written request of a cofiduciary to do so, the trust company shall withdraw the participation of a fiduciary account in a common trust fund at the earliest date that the fund plan permits.

Md. Code, Financial Institutions § 3-512

(a) Except as otherwise provided in this section, a trust company may not: (1) Invest its own funds in a common trust fund that it administers; or (2) Have any interest, other than its fiduciary interest, in the assets in a common trust fund that it administers. (b) If, because of a creditor relationship or otherwise, a trust company acquires an interest in a participation in a common trust fund that it administers, the participation shall be withdrawn on the next valuation date allowed by the fund plan. (c) A trust company does not have a prohibited interest in the assets of a common trust fund that it administers merely because the trust company owns in its own right any stocks, bonds, or other obligations issued by a person from whom the fund also holds stocks, bonds, or other obligations.

Md. Code, Financial Institutions § 3-513

(a) Entry into and withdrawal from participation in a common trust fund may occur only on a valuation date, or, if provided by the plan, within 2 business days after a valuation date. (b) Participation shall be based on the valuation as of the valuation date associated with the entry or withdrawal. (c) When participation is withdrawn from a common trust fund, the trust company may make distribution in cash, ratably in kind, or both, but all distributions associated with a valuation date shall be made in the same way.

Md. Code, Financial Institutions § 3-514

(a) (1) A trust company that administers a common trust fund may issue a certificate of participation for each participating account. (2) A certificate of participation is not assignable and may not be issued in any form that purports to be negotiable or assignable. (b) In any report or accounting required from the trust company by law, a statement that is signed and verified by one of its officers as to the existence, extent, and value of a participation in a common trust fund that it administers may be accepted as evidence of those facts by any court, trust clerk, or supervisory authority.

Md. Code, Financial Institutions § 3-515

(a) The trust company that establishes a common trust fund has exclusive management and control of the fund, including the sole right to transfer, change, or dispose of the assets in the fund. (b) (1) Except as otherwise provided in paragraph (2) of this subsection, a trust company may not: (i) Charge a fee for the management of a common trust fund; or (ii) Receive from the fund or from any participating account any additional fee, commission, or compensation of any kind because of the participation of the account in the fund. (2) A trust company may reimburse itself, from a common trust fund that it administers, for: (i) Those reasonable expenses incurred in the administration of the fund that could have been charged to a separate fiduciary account if that account were not participating in the fund; and (ii) Reasonable expenses incurred for audits of the fund by independent certified public accountants or court auditors as permitted or required under the fund plan or as otherwise required by law.

Md. Code, Financial Institutions § 3-516

(a) For each common trust fund that it administers, a trust company shall set valuation dates at regular intervals of not more than 3 months. (b) At regular intervals of not more than 12 months, a trust company shall have an audit of each common trust fund by an independent certified public accountant who shall report directly to the board of directors of the trust company. (c) (1) A trust company that administers a common trust fund may apply to a court for approval of an accounting of the fund. (2) A petition for approval of an accounting under this section shall be made to the court of equity for the county where the trust company has its principal banking office. (3) A court may impose conditions and notice requirements before approving an accounting under this section.

Md. Code, Financial Institutions § 3-517

(a) The ownership of and title to the individual assets in a common trust fund are solely in the trust company, as trustee of the fund. (b) A trust company shall show clearly on its records: (1) The name of each fiduciary account on behalf of which the trust company holds a participation in a common trust fund; and (2) The extent of the interest held for that fiduciary account.

Md. Code, Financial Institutions § 3-518

(a) A trust company may register in the name of a nominee any assets of a common trust fund that it administers. (b) The nominee may be either an individual or a partnership. (c) A trust company that registers assets in the name of a nominee shall: (1) Show the assets and the name of the nominee on its records; and (2) If the nominee is operated or controlled by the trust company, supervise any possession or control of the assets by the nominee. (d) A transfer agent or registrar of a corporation whose stocks, bonds, securities, or other obligations are registered in the name of a nominee under this section is not required to investigate and may not be held liable for treating the nominee as the owner of the assets.

Md. Code, Financial Institutions § 3-519

A trust company may invest the assets of a common trust fund in any investment in which a fiduciary who is not restricted by investment limitations under the governing instrument or authorization may invest under the laws of this State.

Md. Code, Financial Institutions § 3-520

(a) A transfer agent or a transferee of an asset held in the name of a trustee of a common trust fund may presume conclusively that the trustee has an absolute right to transfer or assign the asset. (b) (1) A transfer agent or a transferee of an asset held in the name of a trustee of a common trust fund is not chargeable with any duty in relation to the fund, a participating account, or any beneficiary of a participating account. (2) A transferee of an asset held in the name of a trustee of a common trust fund is not liable for the application of any purchase money paid to the trustee.

Md. Code, Financial Institutions § 3-601

(a) This section does not apply to: (1) Any readily marketable bond or like obligation that is held by a commercial bank as an investment; (2) Any loan that is made to this State or to a political subdivision and that matures in less than 1 year; (3) Any loan of $3,500 or less, unless that loan exceeds 20 percent of the unimpaired capital and surplus of the commercial bank; or (4) Any liability lawfully incurred before June 1, 1937. (b) The total of all liabilities of any one person to a commercial bank, including all liabilities referred to in this section, may not exceed at any time 30 percent of the unimpaired capital and surplus of the commercial bank. (c) (1) In this subsection, “loan”: (i) Includes an obligation under a standby letter of credit; and (ii) Does not include any discount or obligation that is subject to subsection (d) or (e) of this section. (2) The total liability of any one person to a commercial bank for loans may not exceed at any time: (i) 10 percent of the unimpaired capital and surplus of the commercial bank; or (ii) 30 percent of the unimpaired capital and surplus of the commercial bank if the excess over 10 percent is approved by a two-thirds vote of the board of directors and is secured by currency or obligations of the United States or obligations of this State or any political subdivision. (d) (1) In this subsection, “commercial paper” means any commercial paper issued in connection with a commercial transaction or any chattel paper, if the person negotiating the commercial paper or chattel paper owns it. (2) The total liability of any one person to a commercial bank for discounts of commercial paper may not exceed at any time 25 percent of the unimpaired capital and surplus of the commercial bank. (e) (1) In this subsection, “obligations secured by goods” means obligations that are drawn in good faith against actual existing values and are: (i) Secured by goods in the process of shipment; or (ii) When accepted, accompanied by documents of title for these goods. (2) The total liability of any one person to a commercial bank for obligations secured by goods may not exceed at any time 25 percent of the unimpaired capital and surplus of the commercial bank. (f) For purposes of this section, the rules set forth in subsections (g) through (j) of this section apply in computing the total liabilities of any one person to a commercial bank. (g) (1) Except as provided in paragraph (2) of this subsection, the total liabilities of any individual to a commercial bank include: (i) All liabilities to the commercial bank of any partnership or unincorporated association of which the individual is a member; and (ii) All loans that the commercial bank makes for the benefit of the individual or for the benefit of any partnership or unincorporated association of which the individual is a member. (2) If the individual holds only a limited interest in a limited partnership, the liabilities of the limited partnership and the loans made for its benefit that are included in the individual’s total liabilities may not exceed the value of the individual’s interest in the limited partnership. (h) The total liabilities of any partnership or unincorporated association to a commercial bank include: (1) All liabilities of its individual members to the commercial bank; and (2) All loans that the commercial bank makes for the benefit of the partnership or association or for the benefit of any member of the partnership or association. (i) The total liabilities of any corporation to a commercial bank include all loans that the commercial bank makes for the benefit of the corporation. (j) For purposes of this section, a loan is considered to be made for the benefit of a corporation, partnership, or unincorporated association to the extent that the proceeds of the loan are transferred to the corporation, partnership, or association. (k) For purposes of this section, “unimpaired surplus” of a commercial bank includes surplus, retained earnings, and 100 percent of the reserve for possible loan losses.

Md. Code, Financial Institutions § 3-604

(a) A commercial bank may accept for payment at a later date a draft issued in connection with a transaction that involves the importation, exportation, or domestic shipment of goods, if the draft: (1) Is payable not more than 6 months after the date of acceptance; and (2) When accepted, is accompanied by a document of title. (b) A commercial bank may accept a draft that a bank or banker in any foreign country or any possession or territory of the United States draws on the commercial bank to provide dollar exchange required by trade usage in the foreign country, possession, or territory if: (1) The draft is payable not more than 3 months after the date of acceptance; (2) The amount of the exchange does not exceed 50 percent of the unimpaired capital and surplus of the commercial bank; and (3) For any exchange that exceeds 10 percent of the unimpaired capital and surplus of the commercial bank, the draft is accompanied by a document of title or other adequate security.

Md. Code, Financial Institutions § 3-605

(a) This section does not apply to a leasehold interest in real property. (b) Subject to the rules and regulations of the Commissioner, a commercial bank may become the owner and lessor of personal property if: (1) The personal property is acquired on the specific request of and for the use of a customer; and (2) The investment of the commercial bank in personal property does not exceed: (i) For any one customer, 10 percent of the unimpaired capital and surplus of the commercial bank; and (ii) For all of its customers, the total of its unimpaired capital and surplus.

Md. Code, Financial Institutions § 3-606

(a) An officer, employee, or agent of a commercial bank may not certify any draft drawn on the commercial bank unless the drawer has on deposit an amount equal to at least the amount of the draft. (b) If a draft is certified in violation of this section by a person who is authorized to certify drafts, it is a valid obligation of the commercial bank.

Md. Code, Financial Institutions § 3-607

(a) (1) In this section the following words have the meanings indicated. (2) “Demand deposit” means a deposit that is payable within 30 days. (3) (i) “Time deposit” means a deposit that is payable after 30 days. (ii) “Time deposit” includes a savings account or certificate of deposit that requires at least a 30–day notice before payment. (b) This section does not apply to any deposit of public funds for which the commercial bank pledges collateral. (c) (1) A commercial bank shall have at all times a reserve equal to at least 15 percent of its demand deposits. (2) The board of directors of a commercial bank by resolution shall direct the commercial bank to keep the demand deposit reserve required by this section in: (i) Cash on hand; (ii) Demand deposits in a bank of good standing in any state; or (iii) As to 5 percent of its demand deposits, on approval of the Commissioner: 1. Registered or coupon bonds; or 2. General obligations of or obligations guaranteed by the United States government, an agency of the United States government, this State, or any political subdivision. (d) (1) A commercial bank shall have at all times a reserve equal to at least 3 percent of its time deposits. (2) The board of directors of a commercial bank by resolution shall direct the commercial bank to keep the time deposit reserves required by this section in: (i) Cash on hand; (ii) Deposits in a bank of good standing in any state; or (iii) Direct obligations of the United States government or of this State. (e) (1) If the Commissioner determines that a change in the demand deposit reserve or in the time deposit reserve requirements is advisable to maintain sound banking practices or to prevent injurious credit expansion or contraction, the Commissioner may change the requirements as provided in this subsection. (2) Subject to paragraph (3) of this subsection, the Commissioner may adopt rules or regulations to change the requirements as to reserves for commercial banks. (3) The rules and regulations may: (i) Increase the demand deposit reserve to an amount equal to not more than 30 percent of those deposits; (ii) Increase the time deposit reserve to an amount equal to not more than 6 percent of those deposits; (iii) Decrease the demand deposit reserve to an amount equal to not less than 15 percent of those deposits; (iv) Decrease the time deposit reserve to an amount equal to not less than 3 percent of those deposits; and (v) Notwithstanding items (i) through (iv) of this paragraph, increase or decrease the demand deposit reserve or time deposit reserve to conform to the reserve requirements that apply to a member bank of the Federal Reserve System.

Md. Code, Financial Institutions § 3-701

(a) In this subtitle the following words have the meanings indicated. (b) “Bank” means a commercial bank, a national banking association, an other-state bank, or a federally chartered savings bank or savings and loan association. (c) “Constituent bank” means a party to a consolidation, merger, or transfer of assets. (d) “Successor” means the bank that carries on the business of the constituent banks after a consolidation, merger, or transfer of assets. (e) “Transfer assets”, “transfer its assets”, or “transfer of assets” means to sell, lease, exchange, or otherwise transfer all or substantially all of the property and assets of a constituent bank.

Md. Code, Financial Institutions § 3-702

(a) Any bank may, as provided in this subtitle: (1) Consolidate with one or more other banks to form a new consolidated bank; (2) Merge into another bank or have one or more other banks merged into it; or (3) Transfer its assets to another bank. (b) If the successor will be a commercial bank: (1) The consolidation, merger, or transfer of assets shall be made in accordance with the provisions of this subtitle; and (2) If one of the constituent banks is a national banking association or a federally chartered savings bank or savings and loan association, federal law governs its actions and the rights of its stockholders. (c) If the successor will be a national banking association or a federally chartered savings bank or savings and loan association: (1) Federal law governs: (i) The actions of a constituent bank; (ii) The rights of its stockholders; and (iii) The effect of the consolidation, merger, or transfer of assets on its rights, franchises, interests, and fiduciary duties; and (2) Except for this section and § 3-710 of this subtitle, the other provisions of this subtitle do not apply to the consolidation, merger, or transfer of assets. (d) If one of the constituent banks is an other-state bank: (1) Maryland law governs: (i) The actions of the banking institution; (ii) The rights of its stockholders; and (iii) The effect of the consolidation, merger, or transfer of assets on its rights, franchises, interests, and fiduciary duties; and (2) The law of the other state governs: (i) The actions of the other-state bank; (ii) The rights of its stockholders; and (iii) The effect of the consolidation, merger, or transfer of assets on its rights, franchises, interests, and fiduciary duties.

Md. Code, Financial Institutions § 3-703

(a) An agreement of consolidation, merger, or transfer of assets shall be approved by the affirmative vote of a majority of the full authorized membership of the board of directors of each constituent commercial bank. (b) The agreement shall include: (1) The name of each constituent bank and the address of its principal banking office; (2) The terms of the proposed transaction; (3) A statement that the agreement is subject to approval by the Commissioner and by the stockholders of each constituent bank; (4) Provisions for disposing of any stock of the successor that is not taken by objecting stockholders of the constituent banks; (5) As to the successor: (i) The address of the proposed principal banking office; (ii) The authorized capital stock, including the number of shares and the par value of each share of stock; (iii) Whether it will issue preferred stock in the proposed transaction and, if so, the amount, terms, and preferences; and (iv) Any amendments to its charter and bylaws; and (6) Any other provisions that the Commissioner requires to carry out the Commissioner’s duties with respect to the proposed transaction. (c) After the board of directors of each constituent bank has approved the agreement, the following shall be filed with the Commissioner for approval: (1) The agreement; (2) The name and address of each office of the constituent banks and of the successor; (3) The name and residence address of each individual who will be a director when the proposed transaction becomes effective; (4) The name and residence address of each individual who will be an officer when the proposed transaction becomes effective; (5) A certified copy of the approving resolution of each board of directors, showing the required approval by the board; and (6) Evidence of proper action by the board of directors of any constituent national banking association. (d) (1) Except as otherwise provided by law, any person who knowingly submits false information to the Commissioner while complying with subsection (c) of this section is guilty of a misdemeanor. (2) A person who violates this section is subject to a fine of not more than $1,000, or imprisonment for not more than 5 years, or both.

Md. Code, Financial Institutions § 3-704

(a) (1) Except as provided in subsection (b) of this section, the Commissioner shall publish a notice of the filing of the agreement. (2) The notice shall be published in the Maryland Register as provided in the State Documents Law. (b) Subject to confirmation by the Secretary of Labor, the Commissioner may approve an agreement without the notice required by this section if: (1) The agreement and proposed transaction meet the requirements of § 3–706 of this subtitle; (2) The financial condition or stability of one of the constituent banks is such that a delay of the proposed transaction will cause an economic hardship to it; and (3) Approval of the agreement is in the public interest.

Md. Code, Financial Institutions § 3-705

Within 6 months after the papers specified in § 3–703(c) of this subtitle have been filed with the Commissioner, the Commissioner shall approve or disapprove the agreement.

Md. Code, Financial Institutions § 3-706

(a) The Commissioner shall approve the agreement if: (1) The successor meets the requirements of State law for the formation of a new commercial bank; (2) The agreement provides an adequate capital structure, including surplus, for the successor in relation to its deposit liabilities and other activities; (3) The agreement is fair; and (4) The proposed transaction is not against the public interest. (b) If the successor will not exercise trust powers, the Commissioner may not approve the agreement until the Commissioner is satisfied that successor fiduciaries have been provided adequately for all fiduciary positions held by the constituent banks.

Md. Code, Financial Institutions § 3-707

If the Commissioner disapproves an agreement, the Commissioner shall give the constituent banks written notice of the reasons for the disapproval and an opportunity to amend the agreement.

Md. Code, Financial Institutions § 3-708

(a) The agreement shall be submitted to the stockholders of each constituent bank for approval by them at a meeting called for that purpose. (b) (1) In addition to any other required notice, the directors of each constituent bank shall give 2 weeks’ public notice of the meeting of stockholders. (2) The public notice shall be published once in at least one newspaper published in the county where the constituent bank has its principal banking office. (3) Each notice of the meeting of stockholders shall state that objecting stockholders will be entitled to payment of the fair value of only those shares of stock that are voted against approval of the agreement. (c) The agreement shall be approved by the stockholders of each constituent bank by the affirmative vote of two thirds of all the votes entitled to be cast on the matter.

Md. Code, Financial Institutions § 3-709

(a) When the executed agreement and a copy of the resolution of the stockholders of each constituent bank, certified by its secretary or cashier, have been filed with the Commissioner and the Commissioner has approved the transaction, the Commissioner shall issue to the successor a certificate of consolidation, merger, or transfer of assets that sets forth the name of each constituent bank and the name of the successor. (b) The constituent banks may designate an effective date and time, not earlier than the date of the certificate, to be included in the certificate of consolidation, merger, or transfer of assets. (c) Unless the certificate of consolidation, merger, or transfer of assets specifies a later effective date and time, the consolidation, merger, or transfer of assets becomes effective upon issuance of the certificate by the Commissioner. (d) This certificate is conclusive evidence of the consolidation, merger, or transfer of assets and of the correctness of all proceedings relating to it.

Md. Code, Financial Institutions § 3-710

(a) The successor shall act promptly to file and record the agreement in the same manner as required for articles of incorporation. (b) One of the following certificates may be recorded in any office where deeds are recorded to evidence the new name in which the property of the constituent banks is held: (1) A certificate of consolidation, merger, or transfer of assets that the Commissioner issues; (2) A certificate that the Comptroller of the Currency of the United States or the Director of the Office of Thrift Supervision issues to effect a merger or consolidation in which a national banking association or a federally chartered savings bank or savings and loan association is the successor; or (3) A certificate of consolidation, merger, or transfer of assets issued by the bank supervisory agency of the State by which an other-state bank is chartered.

Md. Code, Financial Institutions § 3-711

The stockholders’ approval of a merger agreement constitutes the adoption of the charter and bylaws of the successor, including any amendments set forth in the agreement.

Md. Code, Financial Institutions § 3-712

(a) Consummation of a consolidation or merger has the effects provided in this section. (b) The separate existence of each constituent bank, except the successor, ceases. (c) (1) The successor shall be considered the same business and corporate entity as each of the constituent banks and has all of the rights, powers, and duties of each constituent bank, except: (i) As limited by the successor’s charter or bylaws; and (ii) As limited by the Commissioner or the bank supervisory agency of the state by which an other-state bank is chartered under subsection (e) of this section. (2) Each constituent bank’s rights, franchises, and interests in any property become the property of the successor without any deed, transfer, or other action. (3) The successor has the same powers that each constituent bank had as to any property held in any fiduciary capacity, without any deed, transfer, or other action. The successor may be removed or replaced as fiduciary in the same manner and to the same extent as the constituent bank. (d) (1) Unless this construction would be unreasonable, any reference to any constituent bank in any writing, whether executed or taking effect before or after the consolidation or merger, shall be interpreted as a reference to the successor. (2) The successor may use the name of any constituent bank if it can do any act more conveniently under that name. (e) If a constituent bank has assets or engages in business activities that do not conform to the law governing the successor, the Commissioner or the bank supervisory agency of the state by which an other-state bank is chartered may allow a reasonable time for the successor to conform to that law. (f) Unless the Commissioner approves, the successor may not carry on its books an asset received from a constituent bank at a higher value than that on the books of the constituent bank at the time of the last examination by a State or federal bank examiner before the effective date of the consolidation or merger.

Md. Code, Financial Institutions § 3-718

(a) The successor in a consolidation, merger, or transfer of assets may offer to pay in cash to the objecting stockholders of a constituent bank not more than what it considers to be the fair value of their shares of stock as of the time of the stockholders’ meeting approving the transaction. (b) An objecting stockholder who accepts the offer is barred from receiving the appraised fair value of the shares of stock under § 3-719 of this subtitle.

Md. Code, Financial Institutions § 3-719

(a) The owner of shares of stock that were voted against a consolidation, merger, or transfer of assets is entitled to receive the fair value of those shares, in cash, if the transaction becomes effective. (b) A stockholder who desires to receive payment of the fair value for shares under this section, within 30 days after the transaction becomes effective, shall: (1) Make a written demand on the successor for payment; and (2) Surrender the stock certificates.

Md. Code, Financial Institutions § 3-720

(a) The fair value of the shares of stock shall be determined as of the date of the stockholders’ meeting approving the consolidation, merger, or transfer of assets. (b) (1) The determination of fair value shall be made by three appraisers as follows: (i) One chosen by the owners of two thirds of the shares involved; (ii) One chosen by the board of directors of the successor; and (iii) The third chosen by the other two appraisers. (2) The fair value to which any two appraisers agree shall govern. (3) The appraisers shall give notice of the fair value determination to the successor and to each stockholder who has made demand for the determination under § 3-719 of this subtitle. (c) (1) Within 5 days after the appraisers give the notice of the fair value determination, a stockholder who is dissatisfied with that value may notify the Commissioner. (2) The Commissioner shall have the shares reappraised. (3) This reappraisal is final and binding as to the value of the shares of stock of that stockholder. (d) (1) If the appraisal to be made under subsection (b) of this section is not completed within 90 days after the consolidation, merger, or transfer of assets becomes effective, the Commissioner shall have an appraisal made. (2) This appraisal is final and binding as to the value of the shares of stock of all objecting stockholders. (e) The successor shall pay the expenses of each appraisal made under this section.

Md. Code, Financial Institutions § 3-801

(a) (1) In this section the following words have the meanings indicated. (2) “Capital stock” includes both common and preferred stock. (3) “Converting institution” means a national banking association, a federal stock savings and loan association, or a federal stock savings bank. (4) “Federal stock savings and loan association” means an institution that is incorporated under federal law as a savings and loan association that has authority to issue capital stock. (5) “Federal stock savings bank” means an institution that is incorporated under federal law as a savings bank that has authority to issue capital stock. (6) “National banking association” has the meaning stated in § 1–101(p) of this article. (b) A converting institution that is located in this State may convert into a commercial bank as provided by federal law and this section. (c) (1) The converting institution shall meet the requirements of this title for incorporation of a commercial bank. (2) The procedures for incorporation may be modified as required by the difference between incorporation and conversion. (3) Pursuant to regulations adopted by the Commissioner, any interested person may request that the Commissioner conduct a hearing regarding the conversion. (d) The consenting stockholders of the converting institution shall sign, acknowledge, and file articles of incorporation. The articles shall state that the conversion has been approved by the stockholders in the manner required by federal law. (e) The requirement for cash payment for stock may be met by exchanging shares of the new commercial bank for those of the converting institution valued at not more than fair cash market value. (f) (1) The new commercial bank shall be considered the same business and corporate entity as the converting institution and, except as limited by this article or by its charter or bylaws, has all of the rights, powers, and duties of the converting institution. (2) The converting institution’s rights, franchises, and interests in any property become the property of the new commercial bank, subject to the liabilities of the converting institution that exist at the time of the conversion. (g) (1) Unless this construction would be unreasonable, any reference to the converting institution in any writing, whether executed or taking effect before or after the conversion, shall be interpreted as a reference to the new commercial bank. (2) The new commercial bank may use the name of the converting institution if it can do any act more conveniently under that name. (h) If a converting institution has assets or engages in business activities that do not conform to the law governing commercial banks, the Commissioner may allow a reasonable time for the new commercial bank to conform to that law.

Md. Code, Financial Institutions § 3-802

(a) Any commercial bank may convert into a national banking association as provided by federal law. (b) When a commercial bank applies to the Comptroller of the Currency for conversion into a national banking association, it shall file with the Commissioner a written notice of its intent to convert. (c) When the Comptroller of the Currency issues a certificate of authority to do business as a national banking association, the charter of the commercial bank terminates and the new national banking association shall: (1) Take all property of the commercial bank, subject to all of its liabilities that exist at the time of conversion; (2) Notify the Commissioner of the conversion and the taking of property; and (3) File with the Commissioner a copy of the certificate of authority issued by the Comptroller of the Currency. (d) The Commissioner shall file a copy of the certificate of authority with the State Department of Assessments and Taxation.

Md. Code, Financial Institutions § 3-803

(a) A commercial bank may dissolve voluntarily, if the stockholders of the commercial bank and the Commissioner approve the dissolution as provided in this section. (b) A proposed voluntary dissolution shall be approved by the affirmative vote of the stockholders of the commercial bank who own two thirds of its capital stock. (c) (1) After a proposed voluntary dissolution is approved by the stockholders, the board of directors of the commercial bank shall give the following notices. (2) The board shall give written notice to the Commissioner of the intended dissolution. This notice shall be certified under the corporate seal of the commercial bank by its president and by its cashier or treasurer. (3) The board also shall give notice to creditors of the commercial bank to present for payment any claim against it. This notice shall be published once each week for 8 consecutive weeks in a newspaper published in the county where the commercial bank has its principal banking office. (d) The Commissioner may approve the intended dissolution only if the Commissioner determines that the commercial bank is solvent.

Md. Code, Financial Institutions § 3-804

In the distribution of the general assets of a trust company that dissolves voluntarily, the person who succeeds the trust company as a personal representative, guardian, trustee, receiver, or other fiduciary has a preference for all debts and accounts that are due to or held by it as fiduciary over all other debts and liabilities, including salaries and wages of employees.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://mgaleg.maryland.gov/mgawebsite/Laws/StatutesFetched: 10/16/2026

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