(a) Scope. This section governs an application for
the sale of assets pursuant to the Finance Code, §32.405. A state
bank that seeks to continue engaging in the business of banking after
selling assets for a sales price exceeding an amount equal to three
times the bank's unimpaired capital and surplus, pursuant to Finance
Code, §32.405(a), may not consummate the sale of assets without
the written approval of the banking commissioner. A state bank seeking
to sell all or substantially all of its assets after obtaining approval
of its shareholders must submit a plan of voluntary dissolution and
liquidation to the banking commissioner for approval under the Finance
Code, §32.405(c) and §§36.101 et seq, and the transaction
is outside the scope of this section. A sale of assets requiring shareholder
approval in which all liabilities of the seller are assumed by a depository
institution, which is in substance and intent a merger, is considered
to be a merger subject to §15.104 of this title (relating to
Application for Merger or Share Exchange) or §15.107 of this
title (relating to Notice of Merger, Reorganization, or Conversion
of a State Bank into Another Form of Financial Institution).
(b) Subsection (f) of this section specifically addresses
a sale of assets without shareholder approval under the Finance Code, §32.405(c)
or Finance Code, §203.003.
(c) Form of application. The applicant must submit
a fully completed, verified application on 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 application must, except to the extent waived by the banking
commissioner, include:
(1) a summary of the proposed transaction, including
a description of the types and total dollar amounts of assets and
liabilities transferred;
(2) a copy of all agreements related to the proposed
transaction executed by an authorized representative of each party
to the transaction;
(3) for each party to the transaction, 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 transaction, or a certificate of an officer verifying the action
taken by the board of directors and the shareholders or participants
approving the transaction, or an explanation of the basis for concluding
that this action was not required;
(4) an assessment of the continuing viability of the
applicant, including a description of its future prospects, proposed
officers and directors, and proposed branches and other locations;
(5) an assessment of the current regulatory and financial
condition of each party to the transaction;
(6) if the proposed transaction will change the existing
CRA delineated community of the applicant, a copy of the proposed
CRA map depicting the proposed delineated community of the applicant;
(7) a copy of current financial statements for each
entity involved in the proposed transaction, accompanied by an affidavit
of no material change dated no earlier than 30 days prior to the date
of submission of the application;
(8) a copy of the latest annual report for each financial
institution and bank holding company involved in the proposed transaction;
(9) that portion of the watch list of the applicant
that identifies low-quality assets being sold or related liabilities
being transferred;
(10) a description of all material, legal or administrative
proceedings involving the applicant;
(11) an opinion of legal counsel that conforms with §15.109
of this title (relating to Opinion of Legal Counsel), concluding:
(A) the sale of assets by the applicant has been duly
authorized by the board and shareholders or participants of the applicant
in accordance with the Texas Business Organizations Code, or that
such authorization is not required, stating the basis for that conclusion;
(B) the transaction will not cause or result in a material
violation of the laws of this state relative to the organization and
operation of state banks;
(C) all deposit liabilities transferred in the transaction
will be discharged or otherwise assumed or retained by a financial
institution that is authorized by law to do so;
(D) each purchasing entity that is not a financial
institution will not be engaged in the unauthorized business of banking;
and
(E) all conditions with respect to the transaction
imposed by the banking commissioner have been satisfied or otherwise
resolved or, to the best knowledge of legal counsel, no conditions
have been imposed;
(12) a copy of each filing regarding the proposed transaction
that is required by another governmental authority, complete with
all related attachments, exhibits, and correspondence;
(13) a current pro forma balance sheet and income statement
of the applicant, with adjustments, reflecting the proposed sale of
assets as of the most recent quarter ended immediately prior to the
filing of the application;
(14) a copy of the applicant's strategic plan that
complies with the department's Memorandum 1009, including projections
of the balance sheet and income statement of the applicant as of the
quarter ending one year from the date of its current pro forma financial
statement required in accordance with paragraph (13) of this subsection;
(15) an explanation of compliance with or nonapplicability
of the provisions of governing law relating to the rights of dissenting
shareholders;
(16) an explanation of the manner and basis of valuing
any of the shares or other evidences of ownership of a party that
will constitute part of the consideration received for the sold assets;
(17) for antitrust purposes, an analysis of the anticipated
competitive effect of the proposed transaction in the affected markets
and a statement of the basis of the analysis of the competitive effects,
or alternatively, a copy of the analysis of competitive effects of
the proposed transaction addressed in the companion federal regulatory
agency application, if applicable; and
(18) other information that the banking commissioner,
in the exercise of discretion considers necessary to make an informed
decision to approve or deny the proposed transaction.
(d) 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.
(e) Public notice. Within 14 days prior to or 14 days
after submission of the initial application, the applicant must publish
notice in accordance with the requirements of §15.5 of this title
(relating to Public Notice) in the community where its home office
is located and in other communities as the banking commissioner may
direct.
(f) Sale of assets without shareholder approval under
the Finance Code, §32.405(c). The board of a state bank, with
the prior written approval of the banking commissioner, may cause
a bank to sell all or substantially all of its assets without shareholder
or participant approval if the banking commissioner finds the interests
of depositors and creditors are jeopardized because of insolvency
or imminent insolvency and that the sale is in their best interest.
(1) To obtain approval of the banking commissioner
under this subsection, the applicant must submit a verified application
on a form prescribed by the banking commissioner and simultaneously
tender the required filing fee pursuant to §15.2 of this title.
The application must, except to the extent waived by the banking commissioner
under §15.12 of this title (relating to Waiver of Requirements),
include:
(A) a copy of each filing regarding the sale that is
required by another governmental authority, complete with all related
attachments, exhibits, and correspondence;
(B) a copy of the transaction agreement executed by
an authorized representative of each party to the transaction, which
must include an assumption and promise by the buyer to pay or otherwise
discharge:
(i) all of the applicant's liabilities to depositors;
(ii) all of the applicant's liabilities for salaries
of the applicant's employees incurred before the date of the sale;
(iii) obligations incurred by the banking commissioner
arising out of the supervision or sale of the applicant; and
(iv) fees and assessments due the department;
(C) for each party to the transaction, a certified
copy of those portions of the minutes of board meetings and, with
respect to the purchaser, shareholder or participant meetings at which
action was taken regarding approval of the transaction or a certificate
of an officer verifying the action taken by the board of directors
and the shareholders or participants approving the transaction, or
in the alternative, an explanation of the basis for concluding that
this action was not required;
Cont'd... |