CHAPTER 404

An Act to amend and reenact §§ 6-26, as amended, 6-27 of the Code o
Virginia, and to amend the Code of Virginia by adding a new sectto:
numbered 6-27.1, the amended and added sections relating to brane
banking, so as to allow branch banking, under certain conditions, ant
to prescribe the conditions under which branch banking is permitted

[H 157
Approved March 30, 1962

Be it enacted by the General Assembly of Virginia:

1. That §§ 6-26, as amended, and 6-27 of the Code of Virginia, be
amended and reenacted, and to amend the Code of Virginia by adding :
section numbered 6-27.1, the amended and new sections being as follows

§ 6-26. No bank or trust company heretofore or hereafter incor.
porated under the laws of this State shall be authorized to engage in
business in more than one place, except that the State Corporation Com-
mission, when satisfied that public convenience and necessity will thereby
be served, may authorize banks having paid-up and unimpaired capital and
surplus of fifty thousand dollars or over to establish branches within the
limits of the city, town or county in which the parent bank is located or
to establish branches elsewhere by merger with banks located in any other
county, city or town.

This section shall not be construed to prohibit the operation of existing
branch banks heretofore established.

The term “parent bank’ shall be construed to mean the bank or
yanking office at which the principal functions of the bank are conducted.
The location of a parent bank or of a branch bank may be moved if the
State Corporation Commission determines that public convenience and
necessity will be served by such move; but the location of a parent bank
or of a branch bank may not be moved beyond the limits of the city, town
‘dl county in which it is located except through a merger with another

ank.

§ 6-27. The * preceding section shall * be construed to * allow the
merger of banks * and the operation by the merged company of such
banks, * and to allow the sale of any bank to, and the purchase thereof
hrough merger by, any other bank * and the operation of such banks by
he * merged bank, provided that the State Corporation Commission shall
ye Of the opinion and shall first determine that public convenience and
1ecessity will be served by such operation, and provided further that,
it the time of such merger * the banks involved shall have been in actual
yperation for a period of five years or more. But in any case in which the
Jommission is satisfied that the public interest demands, on account of
mergency conditions, that a merger * be effected, it may enter an order to
uch effect permitting such merger * notwithstanding that the banks
involved, or one or more of them, have not been in actual operation for five
or more years. *

§ 6-27.1. (a) When an application is made to the State Corporation
Commission by a bank pursuant to § 6-81 for a certificate of authority
to commence business in a political subdivision it shall not be necessary
to prove the requirements of the paragraph numbered (4) of § 6-81 or,
under § 6-81 to prove the public necessity for banking or additional bank-
ng facilities in the community where the bank is proposed to be located
when all of the banks located in such political subdivision are owned or
controlled (1) by “bank holding companies” or (2) when all of the banks
located in that political subdivision are owned or controlled by “merged
banks” or (3) when all of the banks located in such political subdivision
Ale pyned or controlled by “bank holding companies” and “mergea

anks’’.

(b) “Merged bank” means any bank which has acquired another bank
under the provisions of § 6-26 and § 6-27 which has its principal office in
one political subdivision and a branch in another political subdivision.

(c) “Bank holding company’ means any company (1) which directly

or indirectly owns, controls or holds with power to vote, twenty-five per
centum or more of the voting shares of each of two or more banks or of
a@ company which is or becomes a bank holding company by virtue of this
section, or (2) which controls in any manner the election of a majority
of the directors of each of two or more banks or, (3) for the benefit of
whose shareholders or members twenty-five per centum or more of the
voting shares of each of two or more banks or a bank holding company
is held by trustees; and for the purpose of this section, any successor to
any such company shall be deemed to be a bank holding company from
the date as of which such successor co-company becomes a bank holding
company. Notwithstanding the foregoing, (A) no bank shall be a bank
holding company by virtue of its ownership or control of shares in a fidu-
ciary capacity, except where such shares are held for the benefit of the
shareholders of such banks, (B) no company shall be a bank holding com-
pany by virtue of its ownership or control of its shares acquired by it in
connection with its underwriting of securities and which are held only
for such period of time as will permit the sale thereof upon a reasonable
basis, (C) no company formed for the sole purpose of participating in a
proxy solicitation shall be a bank holding company by virtue of its control
of voting rights or shares acquired in the course of such solicitation, and
(D) no company shall be a bank holding company if at least eighty per
een fname of its total assets are composed of holdings in the field of agri-
culture.
2. If a court of competent jurisdiction shall adjudge to be invalid or
unconstitutional any clause, sentence, paragraph, section or part of this
act, or shall adjudge any provision to be inoperative in particular cir-
cumstances, such judgment or decree shall not affect, impair, invalidate
or nullify the remainder of this act, or the operation of such provision
in other circumstances, but the effect thereof shall be confined to the
clause, sentence, paragraph, section or part of this act so adjudged to be
invalid or unconstitutional or the particular circumstances so in issue.