Texas Administrative Code › Title 7 - BANKING AND SECURITIES › Part 2 - TEXAS DEPARTMENT OF BANKING › Chapter 15 - CORPORATE ACTIVITIES › Subchapter E - CHANGE OF CONTROL APPLICATIONS › Section 15.81 - Application for Acquisition or Change of Control of State Bank

Current through Reg. 49, No. 28; July 12, 2024
(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 §
										RSA
				  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.