(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...