February 27, 1981
Subject:
Savings and Loan Associations; Merger.
Requested By:
W. L. Cole, Administrator Savings and Loan Division
Question:
Under State law can a stock-owned savings and loan association merge with a bank?
Conclusion:
No.
In this state financial institutions such as banks and savings and loan associations are creatures of statute. Thus, those statutes which give them being must be followed with respect to provisions for their existence, powers, rights and liabilities. 13 Am. Jur. 2d Building and Loan Associations, § 6, 11 (1964).
Stock-owned savings and loan associations are governed by Chapter 54A of the General Statutes.
N.C.G.S. § 54A-2 states that, "Except as otherwise provided in this Chapter, the provisions of Chapter 54 and the regulations promulgated thereunder shall apply to stock-owned savings and loan associations." Chapter 54 deals with building and loan associations in general (the terms "building and loan association" and "savings and loan association" are synonymous. N.C.G.S. § 54-1). N.C.G.S. § 54-12.1 specifically governs mergers of building and loan associations and provides that:
"Any two or more building and loan associations organized or to be organized, or existing under the laws of this state and operating under the provisions of this Subchapter, may merge into a single association which may be either one of said merging associations. . . . (Emphasis added)"
A bank is not a building and loan association. N.C.G.S 53-1(1). Banks operate under Chapter 53 and not under Chapter 54 of the General Statutes.
Conversely, N.C.G.S. § 53-12 provides that "A bank may consolidate with or transfer its assets and liabilities to another bank. . . ." (Emphasis added)
It is clear that neither N.C.G.S. § 54-12.1 nor N.C.G.S. § 53-12 provides for merger of a bank with a savings and loan association.
The only other statute that might be construed as authority for such a merger is N.C.G.S. § 55106 which states that "One or more domestic corporations may merge into another corporation. . . ." Both Chapter 54A and Chapter 53 incorporate the provisions of law relating to private corporations so long as those provisions are not inconsistent with Chapter 54A and 53 or with the business of banks and building and loan associations. N.C.G.S. § 54A-2(b); N.C.G.S. § 53-135.
The intent of the legislature is, of course, controlling in the interpretation of these statutes, and the question must be whether the legislature intended to allow the merger of a bank and a building and loan association under the general merger provisions of N.C.G.S. § 55-106.
It is significant that the legislature has specifically defined merger authority in N.C.G.S. 53-12 with respect to banks and in N.C.G.S. § 54-12.1 with respect to savings and loan associations. If the General Assembly had intended to permit other types of mergers, it is logical to infer it would have specifically done so in these statutes as well. Further, if the sections incorporating Chapter 55 are interpreted to allow merger of all types, N.C.G.S. § 53-12 and N.C.G.S. § 54-12.1 become mere surplusage- a result to be avoided. 12 Strong’s N.C. Index 3d Statutes, § 5.1 (1978).
In summary, it is the opinion of this Office that the legislature did not intend to permit the mixing of apples and oranges and has not provided for the merger of a bank and a stock-owned savings and loan association.
Rufus L. Edmisten Attorney General
Lucien Capone, III Assistant Attorney General