§ 19-3-6 - Special investments.
SECTION 19-3-6
§ 19-3-6 Special investments. – (a) Subject to the limitations contained in this section, a financialinstitution may invest in the capital stock of any financial institution orother insured-deposit-taking institution duly organized under the laws of anystate or of the United States or of any holding company for the institution asdefined in this section.
(b) For the purpose of this section, a company shall be aholding company:
(1) If it is a corporation registered and regulated under thelaws of the United States as a bank holding company; or
(2) If it is a corporation (whether or not so registered)organized under the laws of the United States or any state thereof and it ownsa majority of the capital stock of one or more insured-deposit-takinginstitutions duly organized under the laws of the United States or any statethereof, the stock of which is an authorized investment under the provisions ofthis section, provided a majority in value of the corporation's assets shall beinvested in stock and/or securities of the insured-deposit-taking institution.
(c) Except as hereinafter provided, the aggregate amount ofstocks held by a financial institution pursuant to this section shall notexceed ten percent (10%) of the assets of the financial institution.
(2) The amount of stock of any one institution held pursuantto this section shall not exceed three percent (3%) of the financialinstitution's total assets, and
(ii) The amount of stock of any one institution held pursuantto this section shall not exceed five percent (5%) of the total issued andoutstanding voting stock of the institution being held.
None of the limitations set forth in this subsection shallapply to holdings at any time by a financial institution of the stock of anyone or more banks of which the financial institution is the holder, directly orindirectly and with the approval of the director or the director's designeepursuant to this title, of fifty percent (50%) or more of the issued andoutstanding voting stock.
(d) Nothing in this section shall be construed to renderunlawful any holdings of bank stocks at any time arising out of any merger orconsolidation, or occurring from stock dividends or the exercise of rights tosubscribe to stock, or arising out of operation of law, or accruing or arisingout of foreclosure or other right of acquisition taken as security in theregular course of business. In determining the amount of stock of a bank heldby a financial institution, the stock shall in all cases be valued at its cost.