Section 58-4-13 - Conversion of savings association to a state bankA. Any association may convert to a state bank pursuant to this section. A mutual association shall first convert to a stock association before applying for conversion to a state bank. A transaction in which the resulting bank is a subsidiary or an affiliate of a bank holding company or bank that has been in existence for at least two years shall not be subject to the provisions of this section but shall be subject to the approval of the director of the division. B. Any association, upon a majority vote of its board of directors, may apply to the director of the division for permission to convert to a bank and for certification of appropriate articles of incorporation and bylaws to effect the conversion. C. The association shall submit a plan of conversion as a part of the application to the director of the division. The director may recommend approval of the plan of conversion with or without amendment. The director shall recommend approval of the plan of conversion if upon examination and investigation he finds that: (1) the resulting bank will operate in a safe, sound and prudent manner with adequate capital, liquidity and earning prospects; (2) the directors, officers and other managerial officials of the association are qualified by character and financial responsibility to control and operate in a legal and proper manner the bank proposed to be formed as a result of the conversion; (3) the interest of the depositors, the creditors and the public generally will not be jeopardized by the proposed conversion; and (4) the proposed name will not mislead the public as to the character or purpose of the resulting bank, and the proposed name is not the same as one already adopted or appropriated by an existing bank in this state or so similar as to be likely to mislead the public. D. The director of the division may promulgate rules to govern conversion undertaken pursuant to this section. The requirements for a converting association shall be no more stringent than those provided by rule or regulation applicable to other federal-deposit-insurance-corporation insured commercial banks. The requirements for a converting association shall be no less stringent than those provided by rule or regulation applicable to other federal-deposit-insurance-corporation insured commercial banks, except as may be allowed during transition periods permitted by this section. E. In the event the director of the division fails to promulgate rules, the conditions to be met for approval of the application for conversion shall include the following: (1) the applicant's general condition shall reflect adequate capital, liquidity, reserves, earning and asset composition necessary for safe and sound operation of the resulting bank; (2) the management and the board of directors shall be capable of supervising a sound banking operation and overseeing the changes that must be accomplished in the conversion from an association to a bank; (3) the director of the division shall determine that the conversion will have a positive impact on the convenience of the public and will not substantially reduce the services available to the public in the market area; and (4) within a reasonable time after the effective date of the conversion, the resulting bank shall divest itself of all assets and liabilities that do not conform to state banking law or rules. The length of this transition period shall be determined by the director of the division and shall be specified when the application for conversion is approved. F. In evaluating each of the conditions described in Subsection E of this section, the director of the division shall consider a comparison of the relevant financial ratios of the applicant with the average ratios of New Mexico banks of similar asset size. G. If the director of the division approves the plan of conversion, then the association shall submit the plan to the stockholders. After approval of the plan of conversion, the director shall supervise and monitor the conversion process and shall ensure that the conversion is conducted pursuant to law and the association's approved plan of conversion. H. After lawful notice to the stockholders of the association and full and fair disclosure of the plan of conversion, the plan shall be approved by a majority of the total votes that stockholders of the association are eligible and entitled to cast. Stockholders may vote in person or by proxy. Following the vote of the stockholders, the association shall file with the director of the division the results of the vote certified by an appropriate officer of the association. The director shall then approve the requested conversion, and the association shall file with the state corporation commission [public regulation commission] articles of incorporation with the certificate of the approval of the director attached. The conversion of the association to a bank shall be effective upon this filing. I. The director of the division may authorize the resulting bank to: (1) wind up any activities legally engaged in by the association at the time of conversion but not permitted to state banks; and (2) retain for a transitional period any assets and deposit liabilities legally held by the association at the effective date of the conversion that may not be held by state banks. J. Upon conversion of an association to a bank, the legal existence of the association does not terminate, and the resulting bank is a continuation of the association. The conversion shall be a mere change in identity, form or organization. All rights, liabilities, obligations, interest and relations of whatever kind of the association shall continue and remain in the resulting bank. Except as may be authorized during a transitional period by the director of the division, a bank resulting from the conversion of an association shall have only those rights, powers and duties that are authorized for banks by law. All actions and legal proceedings to which the association was a party prior to conversion shall be unaffected by the conversion and shall proceed as if the conversion had not taken place. K. As used in this section, "conversion" includes: (1) a transaction in which a state bank assumes all or substantially all of the liabilities and purchases all or substantially all of the assets of an association; and (2) any other transaction that results in a change of identity of an association to a state bank. 1978 Comp., § 58-4-13, enacted by Laws 1993, ch. 210, § 3.