1. A. Real estate and equipment necessary to bank's operation.

   1. 1. A bank or trust company may purchase and hold real estate, equipment, furniture and fixtures necessary for the convenient transaction of its business, the cost of which shall not exceed its capital. This limitation may be exceeded upon written approval of the Commissioner.
   2. 2. A bank or trust company may purchase and hold fixtures, facilities and real estate as may be approved by the Commissioner, including but not limited to storage facilities, facilities for civic or public use or facilities for the benefit of employees of the bank, bank customers or the community. No banking business of any type shall be engaged in or conducted at such facilities.
   3. 3. A bank or trust company may lease out to such tenants as it deems appropriate any portion of its banking house or premises not utilized in the conduct of its banking operations.
   4. 4. Upon written approval of the Commissioner, a bank or trust company may purchase real estate at a location where the bank or trust company could lawfully establish an office.
   5. 5. A state bank may purchase or construct a municipal building, such as a school building, or other similar public facility and, as holder of legal title, lease the same to a municipality or other public authority having resources sufficient to make payment of all rentals as they become due. The lease agreement shall provide that upon its expiration the lessee will become owner of the building or facility.

2. B. Real estate acquired in satisfaction of debt.

   1. 1. A bank or trust company may purchase and hold real estate conveyed to it in satisfaction of debts previously contracted in good faith in the course of business.
   2. 2. All such real estate shall be accounted for individually at the lower of the recorded investment in the loan satisfied or its fair market value on the date of the transfer.
   3. 3. The recorded investment in the loan satisfied is the unpaid balance of the loan, increased by accrued and uncollected interest, unamortized premium, and loan acquisition costs, if any, and decreased by previous direct write down, finance charges and unamortized discount, if any.
3. C. Improvement of real estate. Upon notification by the bank to the Commissioner that such conditions exist that require the expenditure of funds for the development and improvement of such real estate, and subject to such conditions and limitations as the Commissioner shall prescribe, the bank may expend its funds to enable such bank to recover its total investment.
4. D. Real estate acquired under judgment, decree or mortgage foreclosure. A bank or trust company may acquire and hold real estate such as it shall purchase at sale under judgment, decree or mortgage foreclosure, under securities held by it.

5. E. Sale of real estate acquired under subsections B and D.

   1. 1. Without the written approval of the Commissioner, real estate acquired in the cases contemplated in subsections B and D of this section may be held for an initial holding period of no longer than five (5) years from the date of acquisition.
   2. 2. Following the expiration of the initial holding period, one additional extension period of up to five (5) years may be granted upon the written approval of the Commissioner.
   3. 3. A bank or trust company must begin to write down the book value for each property held as other real estate owned a minimum of ten percent (10%) each year during the additional extension period. The bank or trust company shall then be required to write off the remaining balance of the other real-estate-owned property at the end of the additional extension period.
   4. 4. Banks or trust companies shall be required to keep current appraisals on file to substantiate their other real-estate-owned property book values.
   5. 5. Banks or trust companies shall also continue efforts to dispose of the real estate at the earliest possible opportunity.
   6. 6. At the conclusion of the additional extension period, real estate may be disposed of or carried as prescribed by the Commissioner.
   7. 7. For purposes of this section, ownership interests in oil, gas and other subsurface mineral rights other than mere leasehold interests shall be considered real estate; provided, however, notwithstanding the holding limitation of this section or any other provision contained herein, any bank or trust company which on October 15, 1982, held, directly or indirectly, any oil, gas and other subsurface mineral rights, other than mere leasehold interests, that since December 31, 1979, had not been valued on the books of such bank or trust company for more than a nominal amount, may continue to hold such subsurface rights or interests without limitation.
6. F. Investments and loans to corporation holding bank and trust company premises. Any bank or trust company organized under the laws of this state may invest its funds in the stocks, bonds, debentures or other such obligations of any corporation holding the premises of such bank or trust company, and may make loans to or upon the security of any such corporation, but the aggregate of all such investments and loans together with the investments provided for in subsection A of this section shall not exceed its capital. This limitation may be exceeded upon the written approval of the Commissioner.
7. G. Conveyance of real estate. Every conveyance of real estate and every lease thereof made by a bank or trust company, must have the name of such bank or trust company subscribed thereto, either by an attorney-in-fact, president, vice-president, chairman or vice-chairman of the board of directors of such corporation.
8. H. Nothing in this section shall preclude or limit in any manner, investments by a bank permitted under any other section of this Code.

Laws 1965, SB 1, c. 161, § 414; Amended by Laws 1967, SB 209, c. 84, § 1, emerg. eff. April 18, 1967; Amended by Laws 1967, SB 428, c. 258, § 5, emerg. eff. May 8, 1967; Amended by Laws 1975, SB 159, c. 109, § 10, emerg. eff. May 7, 1975; Amended by Laws 1984, SB 521, c. 133, § 5, eff. October 1, 1984; Amended by Laws 1986, SB 502, c. 316, § 4, emerg. eff. June 24, 1986; Amended by Laws 1987, SB 17, c. 135, § 3, emerg. eff. June 3, 1987; Amended by Laws 1990, HB 2240, c. 173, § 4, emerg. eff. May 3, 1990; Amended by Laws 1991, HB 1706, c. 128, § 3, emerg. eff. April 29, 1991; Amended by Laws 1992, HB 2182, c. 295, § 2, emerg. eff. July 1, 1992; Amended by Laws 1994, c. 238, § 1, eff. September 1, 1994; Amended by Laws 1995, HB 1454, c. 36, § 10, emerg. eff. July 1, 1995; Amended by Laws 1997, HB 2173, c. 111, § 47, emerg. eff. July 1, 1997 (superseded document available).