| (a) Scope. This section governs the application for
conversion of a financial institution into a state bank pursuant to
the Finance Code, §32.502.
(b) Form of application. The applicant must submit
a fully completed, verified application on a form prescribed by the
banking commissioner and simultaneously tender a filing fee in the
amount required for the filing of an application for a new bank charter
pursuant to §15.2 of this title (relating to Filing and Investigation
Fees). The application must, except to the extent waived by the banking
commissioner, include:
(1) a summary of the proposed transaction;
(2) a statement explaining whether the proposed state
bank will be in compliance with each standard detailed in the Finance
Code, §32.502(b), certified by the principal executive officer
of the applicant;
(3) a copy of the plan of conversion executed by an
authorized representative of the applicant;
(4) certificate of conversion, including:
(A) the plan of conversion;
(B) the certificate of formation of the proposed state
bank;
(C) a provision conditioning the conversion upon the
approval of the banking commissioner;
(5) a certified copy of those portions of the minutes
of board meetings and shareholder or participant meetings at which
action was taken regarding approval of the conversion, or a certificate
of an officer verifying the action taken by the board of directors
and the shareholders or participants approving the conversion;
(6) an assessment of the future prospects, proposed
officers and directors, and proposed branches and other locations
of the proposed state bank;
(7) an assessment of the current regulatory and financial
condition of the applicant;
(8) if the conversion changes the existing CRA delineated
community, a copy of a map depicting the proposed delineated community
of the resulting state bank;
(9) a copy of the latest annual report for the applicant
and, if applicable, its holding company;
(10) a copy of that portion of the most recent watch
list for the applicant that identifies low-quality assets;
(11) a description of all material legal or administrative
proceedings involving the applicant or an officer, director, or principal
shareholder of the applicant;
(12) an opinion of legal counsel that conforms with §15.109
of this title (relating to Opinion of Legal Counsel), concluding:
(A) the conversion of the applicant has been duly authorized
by its board and shareholders in accordance with governing law, and
the applicant has in all material respects complied with the procedures
prescribed by the federal, state, or foreign laws governing the exit
of the applicant from its current regulatory system;
(B) the conversion will not cause or result in any
material violation of the laws of this state concerning the organization
and operation of state banks;
(C) the proposed state bank will not be engaged in
a business other than banking or a business incidental to banking;
and
(D) all conditions with respect to the conversion imposed
by the banking commissioner have been satisfied or otherwise resolved
or, to the best knowledge of legal counsel, no conditions have been
imposed;
(13) a copy of each filing regarding the proposed conversion
that is required by another governmental authority, complete with
all related attachments, exhibits and related correspondence;
(14) a current pro forma balance sheet and income statement
of the applicant, with adjustments, reflecting the proposed conversion
as of the most recent quarter ended immediately prior to the filing
of the application;
(15) a copy of the applicant's current strategic plan
with a comparison to the strategic plan requirements contained in
the department's Memorandum 1009, including projections of the balance
sheet and income statement of the resulting state bank as of the quarter
ending one year from the date of the pro forma financial statement
required by paragraph (14) of this subsection;
(16) an explanation of compliance with or nonapplicability
of the provisions of governing law relating to rights of dissenting
shareholders to the conversion;
(17) a copy of all securities offering documents, proxy
statements, or other disclosure materials delivered or to be delivered
to shareholders in connection with the proposed conversion;
(18) an explanation of the manner and basis of converting
any shares or other evidences of ownership of the applicant into shares,
obligations, evidences of ownership, rights to purchase securities
or other securities of the proposed state bank, into cash or other
property, including shares, obligations, evidences of ownership, rights
to purchase securities or other securities of another person or entity,
or into any combination of these;
(19) other information that the banking commissioner,
in the exercise of discretion, considers necessary to make an informed
decision to approve or deny the proposed conversion; and
(20) in addition to all other requirements of this
subsection, with respect to conversion of an out-of-state financial
institution into a state bank:
(A) any additional opinions and information the applicant,
by contacting the department, determines the banking commissioner
requires; and
(B) information regarding applicable host state law
and evidence of compliance with the law.
(c) Applicant's duty to disclose. The applicant must
supply all material information necessary for the banking commissioner
to make a fully informed decision on the application.
(d) Public notice. Within 14 days prior to or 14 days
after submission of an initial application under this section, the
applicant must publish notice in accordance with §15.5 of this
title (relating to Public Notice) in the specified communities where
the home office of the applicant is located, and where the home office
of the proposed state bank will be located, if different. With respect
to a conversion of an out-of-state financial institution into a Texas
state bank, the applicant must inform the department of the publication
requirements in the host state for the banking commissioner to determine,
pursuant to §15.5(e) of this title, whether those requirements
satisfy the publication requirements of this subsection.
(e) Approval by the banking commissioner. The banking
commissioner will approve a conversion only if the application indicates
substantial compliance with all conditions of the Finance Code, §32.502(b).
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| Source Note: The provisions of this §15.108 adopted to be effective September 15, 1997, 22 TexReg 8948; amended to be effective January 7, 2004, 29 TexReg 80; amended to be effective November 8, 2012, 37 TexReg 8779; amended to be effective November 7, 2013, 38 TexReg7687; amended to be effective January 2, 2020, 44 TexReg 8232 |
