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 15.108 - Conversion of a Financial Institution into a State Bank

Current through Reg. 49, No. 28; July 12, 2024
(a) Scope. This section governs the
				  application for conversion of a financial institution into a state bank
				  pursuant to the Finance Code, §
										RSA
				  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
				  §
										RSA
				  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, §
											RSA
				  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 §
											RSA
				  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.