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 15.104 - Application for Merger or Share Exchange

Current through Reg. 49, No. 28; July 12, 2024
(a) Scope. This section governs an
				  application for merger or share exchange pursuant to the Finance Code,
				  §§
										RSA
				  32.301-RSA
				  32.303 and
				  RSA
				  32.008, or §203.001(b). This section
				  does not apply to a merger, reorganization, or conversion of a state bank into
				  another form of financial institution pursuant to the Finance Code, §
										RSA
				  32.501, governed by §
										RSA
				  15.107 of this title (relating to Notice of
				  Merger, Reorganization, or Conversion of a State Bank into Another Form of
				  Financial Institution).
(b) 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 §
										RSA
				  15.2 of this title (relating to Filing and
				  Investigation Fees). The Interagency Bank Merger Act application may be used in
				  lieu of the commissioner prescribed form if it is accompanied by the signature
				  page and supplemental page of the commissioner prescribed form. The application
				  must, except to the extent waived by the banking commissioner, include:
(1) a summary of the proposed
				  transaction;
(2) a copy of all
				  agreements related to the proposed transaction executed by an authorized
				  representative of each party to the merger or share exchange;
(3) certificate and plan of merger or share
				  exchange in accordance with the Texas Business Organizations Code, which must
				  include:
(A) a current draft of the
				  certificate of merger or share exchange, and additional copies equal to the
				  number of surviving, new, or acquired entities, executed and acknowledged by an
				  authorized officer for each party to the merger or share exchange;
(B) the plan of merger or share
				  exchange;
(C) the restated
				  certificate of formation of each resulting state bank;
(D) the restated certificate of formation, or
				  other constitutive documents, of each surviving entity other than the resulting
				  state bank;
(E) the certificate of
				  formation, or other constitutive documents, of each new resulting
				  entity;
(F) if a party to a merger
				  is an entity required to file documents with the Texas secretary of state
				  before the transaction can be legally consummated, a provision in the
				  certificate of merger conditioning the merger upon the approval of the banking
				  commissioner, containing wording substantially as follows, as applicable: This
				  merger will become effective upon the final approval and filing of the
				  certificate of merger by the Secretary of State of Texas and with the Banking
				  Commissioner of Texas which must be on or before ________ (date), which is the
				  90th day after the date of filing of the certificate of merger with the
				  Secretary of State;
(4)
				  for each party to the merger or share exchange, 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 merger or share
				  exchange, or a certificate of an officer verifying the action taken by the
				  board of directors and the shareholders or participants approving the merger or
				  share exchange, or an explanation of the basis for concluding that this action
				  was not required;
(5) for each
				  resulting state bank, an assessment of its future prospects, proposed officers
				  and directors, and proposed branches and other locations;
(6) an assessment of the current regulatory
				  and financial condition of each party to the transaction;
(7) if a merger or share exchange will change
				  the existing CRA delineated community of a resulting state bank, a copy of a
				  map depicting the proposed delineated community of the resulting state
				  bank;
(8) 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;
(9) a copy of the latest annual report for
				  each financial institution and bank holding company involved in the proposed
				  transaction;
(10) a copy of that
				  portion of the most recent watch list for each financial institution involved
				  in the proposed transaction that identifies low-quality assets;
(11) a description of the due diligence
				  review conducted by or for a state bank that is a party to the transaction and
				  a summary of findings;
(12) a
				  description of all material legal or administrative proceedings involving any
				  party to the merger or share exchange;
(13) an opinion of legal counsel that
				  conforms with §
											RSA
				  15.109 of this title (relating to Opinion of
				  Legal Counsel), concluding:
(A) the merger or
				  share exchange has been duly authorized by the board and shareholders or
				  participants of each participating state bank in accordance with the Finance
				  Code, §
												RSA 32.301, and
				  the Texas Business Organizations Code;
(B) the merger or share exchange 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 and other liabilities of
				  every state bank that is a party to the merger or share exchange will be
				  discharged or otherwise assumed or retained by a financial institution that is
				  authorized by law to do so;
(D)
				  each surviving, new, or acquiring entity that is not a financial institution
				  will not be engaged in the unauthorized business of banking, and each resulting
				  state bank will not be engaged in a business other than banking or a business
				  incidental to banking; and
(E) all
				  conditions with respect to the merger or share exchange that have been imposed
				  by the banking commissioner have been satisfied or otherwise resolved or, to
				  the best knowledge of legal counsel, no conditions have been imposed;
(14) a copy of each filing or
				  application regarding the proposed merger or share exchange required by another
				  governmental authority, complete with all related attachments, exhibits, and
				  correspondence;
(15) a current pro
				  forma balance sheet and income statement for each party to the transaction,
				  with adjustments, reflecting the proposed merger or share exchange as of the
				  most recent quarter ended immediately prior to the filing of the
				  application;
(16) a copy of the
				  strategic plan that complies with the department's Memorandum 1009, including
				  projections of the balance sheet and income statement of each resulting state
				  bank as of the quarter ending one year from the date of the pro forma financial
				  statement required by paragraph (15) of this subsection;
(17) an explanation of compliance with or
				  nonapplicability of provisions of governing law relating to rights of
				  dissenting shareholders or participants to the merger or share
				  exchange;
(18) a copy of all
				  securities offering documents, proxy statements, or other disclosure materials
				  delivered or to be delivered to shareholders or participants of a party
				  concerning the merger or share exchange;
(19) an explanation of the manner and basis
				  of converting or exchanging any of the shares or other evidences of ownership
				  of an entity that is a party to the merger or share exchange into shares,
				  obligations, evidences of ownership, rights to purchase securities, or other
				  securities of one or more of the surviving, acquiring, or new entities, 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 a combination of the foregoing;
(20) 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;
(21) other information
				  that the banking commissioner, in the exercise of discretion, considers
				  necessary to make an informed decision to approve or deny the proposed merger
				  or share exchange; and
(22) in
				  addition to all other requirements of this subsection, with respect to an
				  interstate merger transaction:
(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.