Texas Administrative Code › Title 7 - BANKING AND SECURITIES › Part 2 - TEXAS DEPARTMENT OF BANKING › Chapter 15 - CORPORATE ACTIVITIES › Subchapter F - APPLICATIONS FOR MERGER, CONVERSION, AND PURCHASE OR SALE OF ASSETS › Section 15.101 - Definitions

Current through Reg. 49, No. 28; July 12, 2024
(a) Words and terms
				  used in this subchapter that are defined in the Finance Code, Title 3, Subtitle
				  A, have the same meanings as defined in the Finance Code.
(b) When these words and terms are used in
				  this subchapter they will have these meanings, unless the context clearly
				  indicates otherwise.
(1) Annual
				  report--Formal financial statements and accompanying narrative of management
				  issued yearly for the benefit of shareholders and other interested
				  parties.
(2) Chartering agency--A
				  government authority that has chartering jurisdiction over an entity involved
				  in a transaction under this subchapter.
(3) Conversion--The conversion of a state
				  bank into a successor form of financial institution pursuant to the Finance
				  Code, §
											RSA
				  32.501, or the conversion of a financial
				  institution into a state bank pursuant to the Finance Code, §
											RSA
				  32.502.
(4) Corporation or domestic corporation--A
				  corporation for profit subject to the provisions of the Texas Business
				  Organizations Code, except a foreign corporation.
(5) CRA--The federal Community Reinvestment
				  Act,
				  RSA
				  2901 et seq.
(6) Current financial statements--Audited
				  financial statements dated as of a date not more than 180 days prior to the
				  date of submission of an application, or unaudited financial statements dated
				  as of a date not more than 90 days prior to the date of submission of an
				  application.
(7) Financial
				  institution--An entity defined as a financial institution under Finance Code
				  §
											RSA 201.101(1)(A) -
				  (D).
(8) Foreign corporation--A corporation for
				  profit organized under laws other than the laws of this state.
(9) Low-quality asset--An asset as defined in
				  RSA
				  371c(b)(10), currently an
				  asset that falls in any one or more of these categories:
(A) an asset classified as "substandard,"
				  "doubtful," or "loss," or treated as "other loans especially mentioned" in the
				  most recent report of examination or inspection of an affiliate prepared by
				  either a federal or state supervisory agency;
(B) an asset in a nonaccrual
				  status;
(C) an asset on which
				  principal or interest payments are more than 30 days past due; or
(D) an asset whose terms have been
				  renegotiated or compromised due to the deteriorating financial condition of the
				  obligor.
(10) Material
				  administrative proceeding--A past or pending proceeding by a state, federal, or
				  foreign regulatory agency against the applicant or other person involved in a
				  transaction under this subchapter that resulted in or could result in the
				  issuance of a cease and desist, removal, enforcement action, determination
				  letter or other order, including an order of supervision or conservatorship;
				  excluding, however, a past proceeding that resulted in an order, other than a
				  removal order, that has been satisfied or otherwise terminated more than five
				  years prior to the date the application or notice requesting the information is
				  submitted.
(11) Material legal
				  proceeding--
(A) a past or pending criminal
				  proceeding against the applicant or other person involved in a transaction
				  under this subchapter that resulted or may result in conviction of the
				  applicant or other person of a crime under a state or federal law or the law of
				  a foreign country relating to banks, other financial institutions, securities,
				  financial instrument reporting, or another crime involving moral turpitude;
				  or
(B) a past or pending proceeding
				  that has or may result in a judgment against the applicant or other person or
				  entity involved in a transaction under this subchapter and the loss contingency
				  must be disclosed in the financial statements of the entity under generally
				  accepted accounting principles, or is otherwise material.
(12) Merger--A transaction that is:
(A) the division of a financial institution
				  into two or more new financial institutions or into a surviving financial
				  institution or one or more new financial institutions, domestic or foreign
				  corporations, or other entities, at least one of which is a state bank or is
				  not a financial institution; or
(B)
				  the combination of one or more financial institutions with one or more
				  financial institutions, domestic or foreign corporations, or other entities, at
				  least one of which is a state bank, resulting in:
(i) one or more surviving financial
				  institutions, domestic or foreign corporations, or other entities;
(ii) the creation of one or more new
				  financial institutions, domestic or foreign corporations, or other entities;
				  or
(iii) one or more surviving
				  financial institutions, domestic or foreign corporations, or other entities and
				  the creation of one or more new financial institutions, domestic or foreign
				  corporations, or other entities; or
(C) another transaction involving a financial
				  institution or other entity, at least one of which is a state bank, which is
				  considered a merger under the Texas Business Organizations Code.
(D) an interstate merger transaction as
				  defined in Finance Code, §
												RSA
				  201.002(a)(27).
(13) Other entity--An entity,
				  whether or not organized for profit, other than a financial institution or a
				  domestic or foreign corporation, including without limitation a not-for-profit
				  corporation, limited or general partnership, joint venture, joint stock
				  company, cooperative, association, insurance company, trust company, or other
				  legal entity organized pursuant to the laws of this state or another state or
				  country to the extent the laws or the constituent documents of that entity,
				  consistent with the laws, permit that entity to enter into a merger or share
				  exchange subject to this subchapter.
(14) Principal executive officer--An officer
				  primarily responsible for the execution of board policies and operation of the
				  bank in accordance with the Finance Code, §
											RSA 33.106.
(15) Purchase of assets--The purchase other
				  than in the ordinary course of business of all or substantially all of the
				  assets of a state bank or another entity. This may include an interstate merger
				  transaction as defined in Finance Code, §
											RSA
				  201.002(a)(27)(B).
(16) Regulatory restriction--A memorandum of
				  understanding, determination letter, notice of determination, order to cease
				  and desist, or other state or federal administrative enforcement order issued
				  by a state or federal banking regulatory agency, or another limitation imposed
				  on a financial institution by a state or federal banking regulatory agency that
				  restricts its ability to act without authorization from the regulatory agency
				  imposing the condition.
(17)
				  Resulting state bank--A state bank subject to the provisions of this subchapter
				  that is a surviving entity in a merger.
(18) Sale of assets--The sale, lease,
				  exchange, or other disposition of substantially all of the assets of a state
				  bank other than in the ordinary course of business. This may include an
				  interstate merger transaction as defined in Finance Code, §
											RSA
				  201.002(a)(27)(B).
(19) Share exchange--A transaction by which
				  one or more financial institutions, domestic or foreign corporations, or other
				  entities acquire all of the outstanding shares of one or more classes or series
				  of one or more state banks under the authority of the Finance Code, §
											RSA
				  32.008, and the Texas Business Organizations
				  Code.
(20) Substantially all of the
				  assets--More than 50% of the assets or assets sufficient to materially impact
				  the net earnings of a state bank involved in a transaction under this
				  subchapter.
(21)
				  Verified--Documents submitted by the applicant that have been attested to as
				  true and correct. Attested documents filed pursuant to this subchapter are not
				  required to be notarized.