{"data":{"id":"us-ky/krs-286.3-100","jurisdiction":"us-ky","citation":"KRS 286.3-100","heading":"Investment of bank funds -- Property that may be held -- Accounting","body":"standards.\n(1) A bank may do any or all of the following:\n(a) Hold personal property that has been transferred to it as collateral for the\npayment of any debt;\n(b) Acquire and hold title to real estate if:\n1. The real estate is necessary or appropriate for the transaction of\nlegitimate business; and\n2. Except with prior written approval of the commissioner, the cost of the\nreal estate, including furniture and fixtures, less accumulated\ndepreciation does not exceed forty percent (40%) of the bank's total\npaid-in capital, unimpaired surplus, and undivided profits determined on\naccrual basis;\n(c) Acquire and hold title to real estate if:\n1. The title is held for not longer than ten (10) years; and\n2. The real estate is conveyed to the bank in satisfaction of debts:\na. Previously contracted in the course of its business; or\nb. That it purchases under a judgment in its favor;\n(d) Invest in obligations issued separately or collectively by or for federal land\nbanks, federal intermediate credit banks, and banks for cooperatives under the\nFarm Credit Act of 1971, 12 U.S.C. sec. 2001 et seq., as amended;\n(e) Invest, subject to the appro val of the commissioner, in the capital stock or\nbonds or both of any domestic realty corporation organized or existing for the\nsole purpose of acquiring and holding title to real property used by the bank,\nthrough lease or otherwise, for the transaction o f the bank's legitimate\nbusiness;\n(f) Purchase, hold, and convey the shares of any open end registered investment\ncompany registered under the Investment Company Act of 1940, or a series of\nthe company, whose shares are registered under the Securities Act of 1933\nand whose investments are limited to any or all of the following:\n1. Bonds or other interest-bearing obligations of the United States, or those\nfor the payment of the principal and interest on which the faith and\ncredit of the United States is pledged;\n2. Stocks, bonds, or other interest -bearing or dividend-yielding obligations\nissued or guaranteed as to the payment of principal and interest or\ndividends by any instrumentality presently or hereafter incorporated by\nauthority of an Act of Congress;\n3. General obligation bonds or revenue bonds issued and guaranteed as to\npayment of principal and interest by any state, county, or municipal\ngovernments legally authorized to issue these instruments of\nindebtedness; or\n4. Any other obligations in which nat ional banks are permitted to invest in\ndirectly;\n(g) Purchase and hold shares of a bank service corporation, as that term is used in\nthe Bank Service Company Act, 12 U.S.C. sec. 1861 et seq., as amended;\n(h) Invest in any or all of the following:\n1. Bonds of any federal home loan bank;\n2. Bonds or other interest-bearing obligations:\na. Of the United States; or\nb. For the payment of the principal and interest on which the faith\nand credit of the United States is pledged;\n3. Stocks, bonds, or other interest -bearing or dividend-yielding obligations\nissued or guaranteed as to the payment of principal and interest or\ndividends by any instrumentality presently or hereafter incorporated by\nauthority of an Act of Congress; or\n4. General obligation bonds or revenue b onds issued and guaranteed as to\npayment of principal and interest by any state, county, or municipal\ngovernments legally authorized to issue such instruments of\nindebtedness;\n(i) 1. Invest in real estate in the bank's generally accepted banking market if\nthe investment does not exceed ten percent (10%) of the bank's actual\npaid-in capital and surplus, calculated at the time the investment is\nmade, for each real estate investment.\n2. As used in this paragraph, \"the bank's generally accepted banking\nmarket\" means the bank's geographic banking market, as determined by\nthe federal reserve bank in the federal reserve district in which the bank\nis located, at the time the investment is made;\n(j) Invest in other real estate acquired in satisfaction of a debt previ ously\ncontracted by the bank if:\n1. The investment is for the purpose of improving the real estate for sale;\nand\n2. The real estate is disposed of within five (5) years of the date of\nacquisition, except the commissioner may extend the disposition upon\nwritten request of the bank for good cause shown on a year-to-year basis\nnot exceeding an additional five (5) years;\n(k) Own or operate, either through the bank or a bona fide subsidiary of the bank,\nany or all of the following:\n1. A discount brokerage service;\n2. A travel agency; or\n3. A courier service;\n(l) Invest, with the prior approval of the commissioner, in the capital stock or\nbonds of a trust company;\n(m) Engage, either through the bank or a bona fide subsidiary of the bank, in the\nsale of insurance; or\n(n) Except for real estate provided in paragraph (c) of this subsection, acquire and\nhold for not more than one (1) year, or for an additional period allowe d in\nwriting by the commissioner, any assets taken as security for debts previously\ncontracted in the ordinary course of business.\n(2) Investments made in accordance with subsection (1)(f) or (1)(h)2., 3., or 4. of this\nsection are subject to KRS 286.3-280 and 286.3-290.\n(3) (a) Except as provided in paragraph (b) of this subsection, for purposes of\ncomputing the maximum investment of a bank in bonds, notes, and other\ninvestments, book value shall be used.\n(b) For deep discount bonds or zero coupon bonds, a ccreted book value shall be\nused.\n(4) (a) Except as provided in paragraph (b) of this subsection, when accounting for\nreal estate acquired under subsection (1)(c) or (j) of this section, a bank shall\ncomply with the other real estate owned, or OREO, accoun ting standards\nestablished under federal law, including federal regulations and other\nguidance, for national banks.\n(b) When accounting for real estate acquired under subsection (1)(c) of this\nsection, a bank may, in lieu of complying with paragraph (a) of  this\nsubsection, elect to write down the acquisition at ten percent (10%) per year.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=55150","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:57:10Z","sha256":"13be2f9de97c386b8d211bbddcc22ae1f8947ed1a1b2977c8df21b2c03ecde18","source_id":"us-ky","stale":false,"prev":"us-ky/krs-286.3-095","next":"us-ky/krs-286.3-101"},"notice":"GroundRules: Original legal text. Not legal advice."}