2005 Idaho Code - 26-707 — REAL ESTATE HOLDINGS

                                  TITLE  26
                              BANKS AND BANKING
                                  CHAPTER 7
               LIMITATIONS ON LOANS, INVESTMENTS, AND PRACTICES
    26-707.  REAL ESTATE HOLDINGS. A bank may purchase, acquire, hold and
convey real estate for the following purposes only:
    (1)  Such as shall be necessary for the convenient transaction of its
business, including at the same location as its banking offices other property
to rent as a source of income; provided, however, that no bank shall invest in
buildings and lots and furniture, fixtures and equipment in an amount greater
than fifty percent (50%) of the capital structure of such bank.
    (2)  Such as shall be conveyed to it in satisfaction of debts previously
contracted in the course of business.
    (3)  Such as it shall purchase at sale on judgments, decrees, mortgage
foreclosure or trustees sale for debts previously contracted, but a bank shall
not bid at such sale a larger amount than is necessary to satisfy all debts
and costs necessary to obtain clear title. Such real estate shall be carried
on the books of the bank at the lower of cost or market value. Market value
shall be determined by a current appraisal prepared by an independent
qualified appraiser approved by the director. Thereafter, but no more
frequently than annually, the director may in his discretion request that the
bank obtain from an independent qualified appraiser approved by the director,
a further appraisal of market value or certification by the appraiser that the
market value has not declined.
    (4)  No real estate acquired under subsections (2) and (3) of this section
may be held for a longer period than five (5) years, provided, however, that
upon application by the bank, the director shall approve the continued holding
of any such real estate by the bank for an additional period of five (5) years
upon the bank's showing of its good faith attempt to dispose of the real
estate within the first five (5) year period, or that disposal within the
first five (5) year period would be detrimental to the bank; and provided
further that the bank shall, during the second five (5) year period, at the
end of each year beginning at the end of the sixth year in which the property
is held, write down the value of such real estate by twenty percent (20%) of
the value at which such real estate is carried on its books at the beginning
of the second five (5) year period. Value at the beginning of the second five
(5) year period shall be the lower of cost or market value as determined
pursuant to appraisal as provided in subsection (3) of this section. Nothing
in this section shall be construed to prevent a bank from making loans secured
by real estate as provided in this act, or a trust department holding and
conveying real estate in trust.
    (5)  A bank may, with the approval of the director and the board of
governors of the Federal Reserve System or the Federal Deposit Insurance
Corporation invest in bank premises or in the stock, bonds, debentures, or
other obligations of any corporation holding the banking buildings, lots and
furniture, fixtures and equipment of such bank in an amount not to exceed the
capital and surplus of the bank.