Occasionally it is deemed advisable by the directors and other shareholders of a state or private bank to enter the national banking system by reorganization rather than conversion. The controlling motive for so doing is generally the desire to effect such distribution of stock as will promote the best interests of the bank, but sometimes it is owing to the specific desire to provide for a more satisfactory investment of capital and other loanable funds.

In order to reorganize a state or private bank into a national bank it is necessary to close the old bank's affairs in conformity with the laws of the state in which the bank conducts its business, and then effect a new organization in accordance with the requirements of national bank laws. The procedure as to the execution of corporate papers and the subscriptions and payment of capital is the same as if the new bank were not to succeed an old one. A resolution is passed by the shareholders, or other legal action taken, whereby the interests of the stockholders of the old bank are conserved in the new. It is assumed that the owners of a private bank may as individuals terminate their business and sell or transfer the assets to the succeeding national bank.

The law requires that the capital stock of a national bank be paid in cash; it is therefore necessary for the old bank to liquidate enough of its assets to enable the shareholders to pay their subscriptions in cash. If it is impossible to liquidate in a short time enough assets to pay these subscriptions, the old bank may loan to the stockholders. The directors of the new bank then contract with the liquidating agent of the old bank to assume the liabilities to depositors and other creditors of the old bank if the old bank transfers an equivalent amount of assets of a character which can be held by a national bank. Some of the capital paid in may at once be reinvested in the assets of the state bank. The directors of the new bank certify to the Comptroller that the bank will not acquire any of the old bank's assets the holding of which contravenes the provisions of the national bank laws. If it is proposed to buy the old bank's building and equipment the Comptroller requires a detailed statement as to the cost, rent, and expense for taxes, repairs, and insurance. The purchase of these and other assets is covered by a specific contract, legally made only after the charter is granted. The transition from the old to the new bank may be made without a halt in business.