Consolidation may be effected by placing one or both of the banks in liquidation, to which end three methods are in use:

1. Without an increase of the capital the directors of the absorbing bank may contract with the directors of the liquidating bank to purchase its assets, assume its liabilities, and pay the value of assets purchased in excess of liabilities, less any expenses incident to liquidation.

2. By increasing the capitalization of the absorbing bank by an amount equal to that of the liquidated bank the additional shares may be sold to stockholders of the latter. This requires the previous consent of the stockholders of the absorbing bank. The directors of the absorbing bank then proceed to contract for the purchase of the assets and the assumption of the liabilities of the liquidated bank.

3. Having first placed both the interested banks in voluntary liquidation, the interested officers may proceed to organize a new bank under a different corporate title and acquire the business of the liquidating banks.

In any of these three methods there should be a contract covering the transfer of assets and assumption of liabilities, and an examination of the assets to be taken over will be made by a national bank examiner at the expense of the bank acquiring the assets. The bonds of the liquidating bank, deposited with the United States Treasury for security for its bank notes, are assigned to the acquiring bank, which assumes responsibility thereafter for the outstanding notes.