| (a) Definitions. Words and terms used in this chapter
that are defined in the Finance Code, Title 3, Subtitle A, have the
same meanings as defined in the Finance Code.
(b) General. Without the prior written consent of the
banking commissioner, a person or entity may not, directly or indirectly,
acquire a legal or beneficial interest in voting securities of a state
bank or a corporation or other entity owning voting securities of
a state bank if, after the acquisition, the person or entity would
control the state bank. Except as otherwise provided in this section,
an application must be filed with the banking commissioner for review
and consideration of the proposed transaction.
(c) Form of application. The applicant must submit
a fully completed, verified application in a form prescribed by the
banking commissioner and simultaneously tender the required filing
fee pursuant to §15.2 of this title (relating to Filing and Investigation
Fees). The Interagency Notice of Change of Control and the Interagency
Biographical and Financial Report may be submitted in lieu of the
commissioner prescribed forms if they are accompanied by the executed
and notarized signature pages of the commissioner prescribed forms.
The application must, except to the extent expressly waived in writing
by the banking commissioner, disclose:
(1) the identity, biographical data, business background,
and experience relating to banking matters, and a current statement
of financial condition, a statement of changes in net worth and a
statement of cash flows of each person by whom, or on whose behalf,
the acquisition is to be made and by each person acting in concert
with others seeking to acquire voting securities subject to the Finance
Code and to this section. Financial statements will be considered
current if audited and dated within 180 days of the date of the application
or will be considered current if unaudited and dated within 90 days
of the date of the application. All financial statements must be accompanied
by an affidavit of no material change dated as of the date of application;
(2) a completed authorization to release employment,
financial, credit, fingerprint information and criminal history records
to the department;
(3) a completed confirmation inquiry form;
(4) the identity of each entity other than a natural
person seeking to acquire control or working in concert with others
to acquire control of a state bank or bank holding company and a copy
of the entity's most recent audited financial statement. Financial
statements will be considered current if audited and dated within
180 days of the date of the application or will be considered current
if unaudited and dated within 90 days of the date of the application.
All financial statements must be accompanied by an affidavit of no
material change dated as of the date of application;
(5) a description of all material, pending or adjudicated
legal or administrative proceedings in which each acquiring person
or entity is or was a party. A material legal proceeding includes
a proceeding in which the person or entity has been charged with,
cited for, or convicted under a state or federal law relating to banking
or other financial institutions, securities or financial instrument
reporting, or a felony or crime involving moral turpitude under the
laws of a state, the United States, or another country. A material
legal proceeding also includes a proceeding that resulted in a material
unsatisfied judgment, or may result in a judgment, against the acquiring
person or entity and this loss contingency must be disclosed in the
financial statements of the acquiring person or entity under generally
accepted accounting principles, or is otherwise material. A material
administrative proceeding includes a proceeding in which the person
or entity is or has been subject to a cease and desist, removal, enforcement,
or other order, including an order of supervision or conservatorship
issued by a state, federal, or foreign regulatory agency;
(6) the terms and conditions of the proposed acquisition
or change of control and the manner in which the acquisition or change
of control is to be made;
(7) the identity, source, and amount of the funds or
other consideration used or to be used in making the acquisition or
change of control;
(8) if a portion of the funds or other consideration
to be used in making the acquisition has been borrowed or is to be
borrowed or otherwise obtained for the purpose of making the acquisition,
a complete description of the transaction, the names of the parties
to the transaction, and a summary of all arrangements, agreements,
or understandings with the parties including terms of repayment;
(9) the applicant's current or proposed business or
strategic plan including amendments to a current plan;
(10) plans or proposals to liquidate the state bank
or bank holding company, to sell its assets or merge it with another
bank or holding company, or to make other major changes in its business,
corporate structure, or management;
(11) plans or proposals to change officers and directors
of the state bank or bank holding company and the related bank or
financial institution management experience of proposed or current
officers and directors;
(12) the terms and conditions of an offer, invitation,
agreement, or arrangement under which a voting security will be acquired
and any contract affecting the security or its financing after it
is acquired;
(13) pro forma financial statements with projections
indicating whether the acquired or controlled state bank or bank holding
company will be adequately capitalized for a period of not less than
two years from the date of acquisition; and
(14) other information that the banking commissioner,
in the exercise of discretion, considers necessary to make an informed
decision to approve or reject the proposed acquisition. The applicant
must supply all material information necessary for the banking commissioner
to make a fully informed decision on the application.
(d) Public notice. Not later than 21 days from the
date the banking commissioner notifies the applicant of acceptance
of the initial application, the applicant must publish notice as required
by the Finance Code, §33.002(d), and §15.5 of this title
(relating to Public Notice) in the county where the state bank's or
bank holding company's home office is located. One publication under
this subsection is adequate unless the banking commissioner expressly
requires additional notice.
(e) Confidentiality. Information obtained by the banking
commissioner under this section is confidential and may not be disclosed
by the banking commissioner or an officer or employee of the department,
subject only to disclosure as may be permitted by the Finance Code, §§31.301
- 31.308 or 33.002(d), or by §3.111 of this title (relating to
Confidential Information).
(f) Grandfather clause. A person or entity considered
to be in control solely as a result of changed standards in the Texas
Banking Act as effective September 1, 1995 (codified as Finance Code,
Title 3, Subtitle A, effective September 1, 1997), is exempt from
filing an application under this section as long as the person or
entity was in compliance with applicable law immediately prior to
September 1, 1995, and has not acquired additional shares of voting
securities on or after September 1, 1995. This subsection specifically
applies to a principal shareholder or principal participant of a state
bank or bank holding company that directly or indirectly owns or has
the power to vote a greater percentage of voting securities of the
state bank or holding company than another shareholder or participant.
(g) Exemptions. In addition to the acquisitions specifically
exempted pursuant to the Finance Code, §33.005, these involuntary
acquisitions of control do not require prior written approval of the
banking commissioner pursuant to the Finance Code, §33.001:
(1) the inadvertent acquisition of control of a state
bank or bank holding company by a shareholder as a result of a stock
redemption or repurchase by the issuer if the potential controlling
shareholder or participant of a state bank or bank holding company
did not vote or have any direct or indirect input into the issuer's
decision to repurchase or redeem the voting securities;
(2) the acquisition and control by a qualified employee
stock ownership plan (ESOP) of less than 25% of voting securities
of a state bank or bank holding company unless an officer, director,
or principal shareholder or participant directly or indirectly controls
the voting securities held by the ESOP, in which event an application
for acquisition of control must be filed by the officer, director
or principal shareholder or participant, if as a result that person
would control over 25% of the voting securities;
(3) the acquisition of control of a state bank as a
result of a shareholder receiving proportionate voting securities
in a state bank arising from the liquidation of a bank holding company;
Cont'd... |
