(1) One or more individual incorporators desiring to organize a bank shall file with the Commissioner of Banking and Financial Institutions an application to the State Banking Board for a certificate of authorization for a state-chartered bank. The Division of Banking and Financial Institutions of the Department of Administration adopts and incorporates by reference:

(a) the Interagency Charter and Federal Deposit Insurance Application (Expiration Date: August 31, 2019) as the form that shall be completed when applying for a certificate of authorization; and

(b) the Interagency Biographical and Financial Report (Expiration Date: April 30, 2017) for use by individuals in conjunction with the Interagency Charter and Federal Deposit Insurance Application. The application and biographical and financial report are available at the Division of Banking and Financial Institutions, P.O. Box 200546, Helena, Montana 59620-0546, or on the division web site located at https://banking.mt.gov/Home/Forms.

(2) An application fee of $10,000 shall be paid to the state of Montana at the time of application and thereafter shall not be refundable in whole or in part.

(3) With the application, the applicant must submit a summary of the evidence the applicant intends to present at the hearing for a new bank charter to demonstrate the applicant meets the standards listed in 32-1-203, MCA, so that the board may determine whether to grant or deny the application.

(4) In the event that an application is incomplete in any respect or if additional information is required, the applicants will be so notified by the Division of Banking and Financial Institutions and allowed up to 60 days in which to perfect the application or provide additional information. An extension of this 60-day period may be obtained from the Division of Banking and Financial Institutions by showing good cause why it should be so extended.

(5) The board may request additional information from an applicant if, in its discretion, additional information is needed to reach a decision on the application.

(1) The State Banking Board and the division adopt and incorporate by reference the following Attorney General's model rules in effect February 27, 2017, ARM 1.3.101, ARM 1.3.102, ARM 1.3.201, ARM 1.3.202, ARM 1.3.211 through ARM 1.3.224, and ARM 1.3.226 through ARM 1.3.233. These rules may be found at sos.mt.gov. Prehearing discovery procedures shall be allowed in the same manner as specified under the Montana Rules of Civil Procedure relative to district court actions. The time period established in discovery may be shortened at the discretion of the board.

(2) The State Banking Board adopts "Roberts Rules of Order."

(3) The Division of Banking and Financial Institutions and the State Banking Board adopt the following rules for hearings on applications for certificates of authorization for new banks and protests of applications for the formation, relocation, closure or sale of a branch bank or for the consolidation, merger or relocation of a bank if the application is approved by the division and if the board determines that there is a substantial basis for the protest. The division also may request a hearing before the board.

(a) a notice of filing for a hearing on the application for a certificate of authorization for a new bank must be mailed to all banks within 100 miles of the proposed location, measured in a straight line. The notice of hearing on applications approved by the division in which the board determines there is a substantial basis for the protest must also be mailed to all banks within 100 miles of the proposed location, measured in a straight line. All of the rights and procedures of contested case proceedings apply to a person or bank filing a written protest with the board;

(b) a written protest must be filed with the division no later than 15 calendar days following the notice of the filing of an application for a certificate of authorization for a new bank. A written protest on all other applications must be filed no later than 15 calendar days upon the filing of the application with the division; and

(c) a substantial basis for the protest as determined by the board shall include, but not be limited to:

(i) to the extent required by law, failure to inform and advise all ownership interests, including shareholders, of the determination to submit an application for the proposed decision;

(ii) the proposed application threatens the solvency and financial integrity of the institution;

(iii) the proposed application changes the ownership and management of the institution so as to affect the financial integrity of the institution; or

(iv) other reasons that may be considered by the board.

(2) In making this determination the following are among the factors which the board may consider:

(a) the number of banks already serving the area in which the proposed bank would locate;

(b) the size of the area;

(c) the population of the area;

(d) the wealth of residents of the area;

(e) the commercial and industrial development of the area;

(f) the socio-economic trends of the area;

(g) the adequacy of the services being provided by existing banks compared to the needs of residents and the services to be offered by the proposed bank, including a detailed list of banking services that will be offered the community to be served by the new bank;

(h) the capability of existing banks to handle potential growth of the area;

(i) the convenience of the location of existing banks to residents of the area as compared to convenience of the proposed bank;

(j) the size of financial institutions in the area;

(k) the history of financial institutions in the area;

(l) an indication of the support the proposed bank could reasonably expect to receive from representative segments of the businesses and residents of the area; and

(m) the probability of the success of the proposed bank.

(2) In the event that the application for a state bank charter does not include the name and qualifications of the proposed managing officer, the board will direct that if a charter is to be issued for the proposed bank it shall be conditioned upon the submission of the name and qualifications of a proposed managing officer to the division of banking and financial institutions at least 60 days prior to the opening of the bank and that the division of banking and financial institutions find said proposed managing officer unobjectionable.

(1) The applicant must provide a reasonable assurance that the proposed new bank will have adequate initial paid-in capital sufficient to accomplish the following:

(a) establish an undivided profits account in an amount great enough to absorb initial operating losses under foreseeable business conditions;

(b) total capital and surplus accounts of adequate size to permit the proposed investment in building, land, furniture, and fixtures within the limitation of 100% of capital and surplus as imposed by 32-1-423, MCA;

(c) provide protection for depositors' funds to the same extent that the average of all insured commercial banks in the proposed bank's peer group provides capital protection, measured by the most current peer group data available on total capital accounts and reserves as a percentage of total assets. The proposed bank's reasonably estimated total assets at the end of its first three years of operation shall be the basis upon which this standard shall be projected; and

(d) to enable the bank to furnish competitive services that will ensure an amount of business sufficient to assure its success.

(a) the division of banking and financial institutions has received official notice that the proposed bank has been accepted for insurance of deposits; or,

(b) the division of banking and financial institutions has received satisfactory assurance from the FDIC or the federal reserve bank of Minneapolis that the proposed bank will be accepted for insurance when the proponents comply with certain stated minor requirements imposed by the FDIC Such "minor requirements" must be of a type and character which the board determines can be promptly complied with by the proponents without serious difficulty.

(a) a projected three-year comparative balance sheet and income projection,

(b) information on start-up costs, including legal fees, and other costs that may be amortized, and

(c) costs associated with fixed assets and their maintenance.

(2) The statement will reasonably estimate the volumes of business the new bank anticipates in the first three-year period, and will show its reasons for believing it will develop such business aggregates.

This rule has been repealed.

(1) All provisions of ARM 2.60.202 and 2.60.203, application procedures, apply except ARM 2.60.203(3), summary of evidence demonstrating reasonable public necessity and demand for a new bank. The provisions of ARM 2.60.302 through 2.60.304 also apply.

(2) Prior to submitting a bid for the assets and liabilities of a closed bank, organizers must:

(a) appoint a spokesperson who is empowered to speak for and sign documents on behalf of the organization;

(b) have written verification in hand that capital for the new bank is on deposit and will be available prior to the new bank opening;

(c) have written verification of blanket bond coverage for the new bank;

(d) provide all details of the proposed purchase arrangement along with a copy of the purchase and assumption agreement and other related documents required by the closed bank receiver.

(3) If the bidder for the closed bank contemplates using an existing state bank to acquire assets and assume liabilities of a closed bank only ARM 2.60.303 applies.

(4) Details of the proposed purchase along with a copy of the purchase and assumption agreement must be submitted to the Division of Banking and Financial Institutions prior to submitting a bid for the closed bank.

(5) Approval of charter application under this rule will be accomplished through a telephone conference call with a quorum of the board participating.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

(1) If a shell bank is being organized for the purpose of acquiring control of or acquiring all or substantially all of the assets of an existing bank or savings association, the organizers shall comply with 32-1-202 through 32-1-206 and 32-1-301 through 32-1-307, MCA, and the rules adopted thereunder.

(2) An application for a shell bank organized solely for the purpose of merging with an existing bank or savings association is governed by this subchapter.

(3) A shell bank organized solely for the purpose of merging with an existing bank or savings association is referred to as an interim bank in this subchapter. An interim bank has no authority to conduct a banking business until merged with an existing bank or savings association.

(4) The provisions of this subchapter do not apply to a state bank organized for the purpose of assuming deposit liabilities of any closed bank governed by ARM 2.60.501.

(1) An application to form an interim bank must be on the form in ARM 2.60.903.

(2) The application to form an interim bank must be filed with the department.

(3) The applicant shall publish a notice in a newspaper of general circulation in the community in which the main office of the proposed interim bank is to be located. If there is no such newspaper in the community, then in a newspaper of general circulation published nearest the community will suffice. The notice must run once a week for two consecutive weeks. The public notice must include:

(a) the name of the proposed interim bank;

(b) a brief summary of the purpose of the interim bank;

(c) a reference to ARM 2.60.903, under which the proposed interim bank is to be formed; and

(d) notice that interested persons are invited to comment on the application before the State Banking Board.

(4) The applicant shall provide the affidavit of publication to the department after it is received.

(1) The application to form an interim bank must be in the following form:

INTERIM BANK CHARTER APPLICATION

Any individual or entity desiring confidential treatment of specific portions of the application shall specifically identify the information for which they request confidentiality, separately bind it, and label it "Confidential." The individual or entity shall follow the same procedure for a request for confidential treatment for the subsequent filing of supplemental information to the application. Inquiries concerning the preparation and filing of this or any other application with the department should be directed to the Montana Division of Banking and Financial Institutions, P.O. Box 200546, Helena, MT 59620-0546.

1. State the name, address, and phone number of the person(s) who will represent the applicant.

2. State the purpose for forming the proposed interim bank.

3. State the name and location of the proposed interim bank.

4. State the names and addresses of the organizer(s) and first board of directors of the proposed interim bank. See 32-1-322, MCA.

5. State the positions and names of the officers of the proposed interim bank.

6. Provide full details of the capital structure of the proposed interim bank including number and types of authorized shares, par value, total capital stock, surplus, and any other components of capital. Also, state the initial amount of reserves to be established, if any.

7. Describe in detail the entire transaction in which the interim charter is proposed to be used and identify the resulting bank after completion of the transaction.

We, the undersigned Board of Directors of the proposed interim bank, do solemnly swear or affirm that the statement and representations made herein are true and correct to the best of our knowledge and belief, and that the personal data and financial statements submitted with this application are true and correct and that this application is made in good faith, with the purpose and intent that the affairs and business of the proposed interim bank shall be honestly conducted upon good and sound business principles.

NAME		ADDRESS		DATE

State of _____________________________________________

County of ___________________________________________

Signed and sworn to before me this _______day of _________________________,

By ____________________________________________

_____________________________________________

Notary Public for the State of Montana

_____________________________________________

Printed Name

Residing at ____________________________, Montana

My commission expires __________________________

EXHIBITS

In order for the interim bank application to be considered complete, the following exhibits must be furnished:

1. Attach brief resumes of past business and banking or related experience of the principal shareholders, directors, and executive officers of the proposed interim bank. "Principal shareholder" means a person who directly or indirectly owns, controls, or holds (either individually or as a member of a group) the power to vote 10% or more of any class of voting securities or other voting equity interest of the entity.

If the proposed principal shareholders, directors, and executive officers are not currently serving as principal shareholders, directors, or executive officers of an insured depository institution, attach an Interagency Biographical and Financial Report for each person not currently so serving. The Interagency Biographical and Financial Report is available at the Division of Banking and Financial Institutions, P.O. Box 200546, Helena, Montana 59620-0546, or on the division web site located at https://www.fdic.gov/formsdocuments/6200-06.pdf.

2. Attach a summary of the facts in support of the applicant's contention that the conditions for incorporation set forth in 32-1-203, MCA, are met.

3. Attach the proposed articles of incorporation and by-laws of the proposed interim bank.

4. Attach a copy of all agreements or plans which detail how the interim bank will be used in a merger or consolidation.

(1) Approval of an application for an interim bank certificate of authority under this rule will be accomplished through a telephone conference call with a quorum of the board participating.

(2) The provisions of ARM 2.60.202 and 2.60.204(1) and (2) apply to an application for an interim bank certificate of authority.

(3) Within two weeks after the conclusion of the hearing before the State Banking Board, the State Banking Board shall issue a decision as to whether to approve the application for the interim bank. This two-week period may be extended by two additional weeks if the State Banking Board or the department requires more time or information.

(4) The receipt and approval of the information in ARM 2.60.902 and 2.60.903 constitute sufficient authority for the State Banking Board to approve the issuance of a certificate of authorization to the interim bank.

(5) The State Banking Board may require additional information as it sees fit from an applicant before approving the application.

(6) The State Banking Board's approval shall be specifically conditioned on:

(a) the commissioner's approval of the subsequent merger; and

(b) the new institution being accepted for deposit insurance by the Federal Deposit Insurance Corporation.

(7) Upon the State Banking Board's approval of the interim bank application, the incorporator shall take the necessary steps to conform the articles of incorporation and by-laws to the requirements of the State Banking Board. The commissioner shall approve the articles and the department shall then file the necessary documents with the Secretary of State.

(1) An interim bank may take only those corporate and fiduciary steps and actions reasonably incidental and necessary to facilitate and complete the merger. Such limitation does not preclude the State Banking Board from ordering the department to grant a certificate of authorization, and to otherwise facilitate and authorize the formation and incorporation of the interim bank.

(1) From the date an interim bank is authorized according to this rule, the parties to the interim bank agreement have six months in which to effect the merger with the existing bank or savings association. The merger must proceed under 32-1-370 or 32-1-371, MCA.

(2) The department may grant extensions if the parties to the interim bank agreement show good cause as to why an extension is needed to complete the merger.

(3) The department may cancel or revoke the certificate of authorization of the interim bank (and may take such other steps as are appropriate at any time) if:

(a) proof of the merger between the interim bank and the existing bank or savings association has not been provided to the department at the end of the authorized time;

(b) the interim bank actually conducts any banking business prior to its proposed merger; or

(c) any related merger or consolidation application is denied or withdrawn.

(1) A nonrefundable fee of $1,000 to offset the administrative expense of the department must be included with the application, provided, however, the fee is considered a part of and not in addition to any fee being paid at the same time to the department in connection with a contemporaneous application for a merger.

(2) Depending on the structure of the transaction, other fees may be required in accordance with applicable statutes or rules.