By: Parker S.B. No. 1223
73R3332 LJD-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the merger, reorganization, or conversion of state or
1-3 federal savings banks, state or federal savings and loan
1-4 associations, and state banks.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section E, Article 5, Chapter III, The Texas
1-7 Banking Code (Article 342-305, Vernon's Texas Civil Statutes), is
1-8 amended to read as follows:
1-9 E. The provisions of the Administrative Procedure and Texas
1-10 Register Act (Article 6252-13a, Vernon's Texas Civil Statutes)
1-11 governing contested cases do not apply to charter applications
1-12 filed for the purpose of assuming the assets and liabilities of any
1-13 bank, state or federal savings bank, or state or federal savings
1-14 and loan association deemed by the Banking Commissioner to be in an
1-15 unsafe condition.
1-16 SECTION 2. Article 8, Chapter III, The Texas Banking Code
1-17 (Article 342-308, Vernon's Texas Civil Statutes), is amended to
1-18 read as follows:
1-19 Art. 8. MERGER--TRUST POWERS. Any two or more state banks,
1-20 or if national banks are hereafter authorized by the laws of the
1-21 United States to participate in such a merger, any one or more
1-22 state banks and any one or more national banks domiciled in this
1-23 State, or any state bank and any state or federal savings and loan
1-24 association or state or federal savings bank authorized by the laws
2-1 of this state or the United States to participate in a merger, may,
2-2 with the approval of the Banking Commissioner and the written
2-3 consent of the owners of record of two-thirds of the capital of
2-4 each of said institutions <banks>, be merged. Said merging
2-5 institutions <banks> shall file with the Banking Commissioner:
2-6 (1) A statement of the plan of merger approved by the
2-7 board of directors of each merging institution <bank>, by a
2-8 majority vote of the qualified directors.
2-9 (2) Certificate of merger stating the facts required
2-10 by Article 4 of this chapter and executed and acknowledged by a
2-11 majority of the qualified directors of each merging institution
2-12 <bank>.
2-13 The Banking Commissioner shall thereupon investigate the
2-14 condition of the merging institutions <banks> and if the
2-15 Commissioner <he> finds that the state bank which will result from
2-16 the merger (hereafter called the "resulting bank") will be solvent
2-17 and its capital unimpaired; that it will have adequate capital
2-18 structure; that such merger does not violate the anti-trust laws of
2-19 this state; and that the resulting bank has in all respects
2-20 complied with the laws of this State relative to the incorporation
2-21 of State banks, the Commissioner <he> may approve such merger, and,
2-22 if the Commissioner <he> so approves, the Commissioner <he> shall
2-23 deliver to the resulting bank a certified copy of the certificate
2-24 of merger, which certificate shall constitute the charter and
2-25 articles of association of the resulting bank. The resulting bank
2-26 shall be deemed a continuation in entity and identity of each of
2-27 the institutions <banks> involved in the merger; shall be subject
3-1 to all the liabilities, obligations, duties and relations of each
3-2 merging institution <bank>; and shall without the necessity of any
3-3 conveyance, assignment or transfer become the owner of all of the
3-4 assets of every kind and character formerly belonging to the
3-5 merging institutions <banks>; further, provided, that if any
3-6 merging institution <bank> shall at the time of the merger be
3-7 acting as trustee, guardian, executor, administrator, or in any
3-8 other fiduciary capacity, the resulting bank shall, without the
3-9 necessity of any judicial action or action by the creator of such
3-10 trust, continue such office, trust or fiduciary relationship and
3-11 shall perform all of the duties and obligations and exercise all of
3-12 the powers and authority connected with or incidental to such
3-13 fiduciary relationship in the same manner as though the resulting
3-14 bank had been originally named or designated as such fiduciary.
3-15 The naming or designating by a testator, or the creator of a
3-16 living trust, of any one of the merging institutions <banks> to act
3-17 as trustee, guardian, executor or in any other fiduciary capacity
3-18 shall be considered the naming or designating of the bank resulting
3-19 from the merger.
3-20 A stockholder may dissent from the merger by following the
3-21 procedure provided by Article 5.12, Texas Business Corporation Act.
3-22 That procedure applies to a merger under this article, as if the
3-23 state bank were a corporation organized under the Texas Business
3-24 Corporation Act.
3-25 SECTION 3. Article 9, Chapter III, The Texas Banking Code
3-26 (Article 342-309, Vernon's Texas Civil Statutes), is amended to
3-27 read as follows:
4-1 Art. 9. REORGANIZATION--INCORPORATION TO TAKE OVER BUSINESS
4-2 OF OTHER BANKS OR STATE OR FEDERAL SAVINGS BANKS OR SAVINGS AND
4-3 LOAN ASSOCIATIONS--TRUST POWERS. A state bank may be incorporated
4-4 to take over the business of any incorporated bank or banks, state
4-5 or national, or of any state or federal savings bank or state or
4-6 federal savings and loan association, as a step in the
4-7 reorganization of such institution <bank> or institutions <banks>,
4-8 (which institution <bank> or institutions <banks>, whether one or
4-9 more, will be hereafter referred to as the "reorganizing
4-10 institution") <"reorganizing bank")>, and shall, subject to the
4-11 provisions of this article, be authorized to purchase assets from
4-12 the reorganizing institution <bank> and as consideration therefor,
4-13 assume all liabilities, known or unknown, of the reorganizing
4-14 institution <bank>, other than its liability to stockholders as
4-15 such.
4-16 Persons desiring to incorporate a state bank under the
4-17 provisions of this article shall proceed in the manner provided in
4-18 Article 5 of this Chapter, and in addition, shall file with the
4-19 Banking Commissioner:
4-20 (1) The proposed contract whereby the state bank is to
4-21 purchase the assets from and assume the liabilities of the
4-22 reorganizing institution <bank>, as above mentioned.
4-23 (2) Contracts, if any, whereby the proposed state bank
4-24 is to purchase for cash the whole or any part of the right of any
4-25 or all of the stockholders of the reorganizing institution <bank>
4-26 to receive liquidating dividends upon liquidation of the
4-27 reorganizing institution <bank>, which contracts shall expressly
5-1 provide that they shall be binding and effective only in event the
5-2 reorganizing institution <bank> is placed in voluntary liquidation
5-3 within ten (10) days of the granting of the application for the
5-4 charter applied for. Such contracts shall be executed on behalf of
5-5 the proposed bank by the persons applying for the charter.
5-6 If the Banking Commissioner, after investigation, determines
5-7 that the proposed bank, if incorporated, will, after its capital
5-8 has been paid in full and all contracts above mentioned finally
5-9 consummated, be solvent, its capital adequate and unimpaired, that
5-10 such reorganization is to the best interest of the reorganizing
5-11 institution <bank>, its depositors, creditors and stockholders and
5-12 the public in general, and that upon incorporation such bank will
5-13 have in all other respects complied with the law, the Commissioner
5-14 <he> shall recommend to the State Banking Board that the charter be
5-15 granted.
5-16 If the State Banking Board concurs in the findings of the
5-17 Banking Commissioner, it shall grant the application, and the
5-18 Banking Commissioner shall deliver a certified copy of the articles
5-19 of association in the manner provided in Article 5 of this chapter.
5-20 Provided, however, that the Banking Commissioner shall not deliver
5-21 a certificate of authority until the contracts above mentioned have
5-22 been fully consummated, and the requirements of Article 7 of this
5-23 chapter have been met. The state bank so incorporated shall be
5-24 deemed a reorganization of the reorganizing institution <bank>, and
5-25 a continuation of such institution <bank> in entity and identity,
5-26 subject to all of its liabilities, obligations, duties and
5-27 relations, save and except its liability to stockholders as such,
6-1 and shall pay and perform each and every obligation, duty and
6-2 liability of the reorganizing institution <bank> in exactly the
6-3 same manner as the reorganizing institution <bank> was obligated to
6-4 do; further provided that if the reorganizing institution <bank>
6-5 was at the time of incorporation of the new state bank, named or
6-6 acting as guardian, trustee, executor, administrator or in any
6-7 other fiduciary capacity, such state bank shall, without the
6-8 necessity of any judicial action, or action by the creator of such
6-9 trust, continue the trusteeship or other fiduciary relation and
6-10 perform all of the duties and obligations of the reorganizing
6-11 institution <bank> and exercise all the powers and authority
6-12 relative thereto; and neither the reorganization of such
6-13 institution <bank>, nor any liquidation of such institution <bank>
6-14 in connection therewith, shall be deemed a resignation or refusal
6-15 to act. The naming or designating by a testator or the creator of
6-16 a living trust of the reorganizing institution <bank> to act as
6-17 trustee, guardian, executor, or in any other fiduciary capacity
6-18 shall be considered the naming or designating of the bank resulting
6-19 from the reorganization.
6-20 The new state bank shall give notice of its assumption of the
6-21 liabilities of the reorganizing institution <bank> by publishing
6-22 notice thereof once each week for a period of two (2) weeks in some
6-23 newspaper of general circulation published in the county of its
6-24 domicile, or in event no such newspaper is published in said
6-25 county, then in a newspaper of general circulation published in an
6-26 adjacent county. The first notice shall be published within ten
6-27 (10) days after the delivery of the certificate of authority to
7-1 such bank.
7-2 SECTION 4. Article 10, Chapter III, The Texas Banking Code
7-3 (Article 342-310, Vernon's Texas Civil Statutes), is amended to
7-4 read as follows:
7-5 Art. 10. PURCHASE OF ASSETS OF ANOTHER BANK OR STATE OR
7-6 FEDERAL SAVINGS BANK OR SAVINGS AND LOAN ASSOCIATION--DISBURSING
7-7 AGENT. Any state bank may, with the consent of the Banking
7-8 Commissioner, purchase the whole or any part of the assets of any
7-9 other state bank or of any national bank domiciled in this State,
7-10 or of a state or federal savings bank or state or federal savings
7-11 and loan association, and may hold the purchase price and any
7-12 additional funds delivered to it by the selling institution <bank>
7-13 in trust for or as a deposit to the credit of the selling
7-14 institution <bank>. The purchasing bank may act as agent of the
7-15 selling institution <bank> in disbursing the funds so held in trust
7-16 or on deposit by paying the depositors and creditors of the selling
7-17 institution <bank>, provided that if the purchasing bank acts under
7-18 written contract of agency which specifically names each depositor
7-19 and creditor and the amount to be paid each, and if such agency is
7-20 confined to the purely ministerial act of paying such depositors
7-21 and creditors the amounts due them as determined by the selling
7-22 institution <bank> and reflected in the contract of agency and
7-23 involves no discretionary duties or authority other than the
7-24 identification of the depositors and creditors named, and if such
7-25 contract is approved by the Banking Commissioner, then the
7-26 purchasing bank may rely upon such contract of agency and the
7-27 instructions included therein, and shall not be in any way liable
8-1 or responsible for any error made by the selling institution <bank>
8-2 in determining its liabilities, the depositors and creditors to
8-3 whom such liabilities are due, or the amounts due such depositors
8-4 and creditors; nor liable or in any way responsible for any
8-5 preference which may result from the payments made pursuant to such
8-6 contract of agency and the instructions included therein. Further
8-7 provided that, in event the selling institution <bank> should, at
8-8 any time after such sale of assets, be closed and come into the
8-9 hands of the Banking Commissioner or<, if a national bank> into the
8-10 hands of a receiver, then the purchasing bank shall pay to the
8-11 Banking Commissioner as statutory liquidator or to the receiver of
8-12 such state or national institution <bank> the balance of the funds
8-13 held by it in trust or on deposit for the selling institution
8-14 <bank>, not theretofore paid to the depositors and creditors of the
8-15 selling institution <bank>, and shall thereupon stand discharged of
8-16 any and all liabilities, obligations or responsibilities to the
8-17 selling institution <bank>, its receiver, the Banking Commissioner
8-18 as its statutory liquidator, or to the depositors, creditors or
8-19 stockholders thereof. Provided further that payment to any
8-20 depositor or creditor of the selling institution <bank> of the
8-21 amount to be paid him under the terms of the contract of agency may
8-22 be effected by the purchasing bank opening an account in the name
8-23 of such depositor or creditor, crediting such account with the
8-24 amount to be paid the depositor or creditor under the terms of such
8-25 agency contract, and mailing a duplicate deposit ticket evidencing
8-26 such credit to such depositor or creditor at his address as
8-27 reflected by the records of the selling institution <bank>, or
9-1 delivering it to him personally, and the relation of debtor to
9-2 creditor shall thereupon arise between the purchasing bank and such
9-3 depositors and creditors to the extent and only to the extent of
9-4 the credit reflected by such deposit tickets. Further provided,
9-5 that if any such depositor or creditor checks upon the credit so
9-6 created, or if he does not within sixty (60) days of the mailing or
9-7 the personal delivery of such deposit ticket protest the
9-8 transaction and demand payment from the selling institution <bank>,
9-9 he shall be deemed to have ratified the transaction and to the
9-10 extent of the credit so created to have accepted the obligation of
9-11 the purchasing bank as reflected by said deposit ticket in
9-12 satisfaction of the obligation of the selling institution <bank>,
9-13 and the obligation of the selling institution <bank> to the extent
9-14 of such credit shall be deemed paid and satisfied within the
9-15 meaning of this article.
9-16 SECTION 5. Article 13, Chapter III, The Texas Banking Code
9-17 (Article 342-313, Vernon's Texas Civil Statutes), is amended to
9-18 read as follows:
9-19 Art. 13. MERGER, REORGANIZATION, OR CONVERSION OF STATE BANK
9-20 INTO NATIONAL BANK OR STATE OR FEDERAL SAVINGS BANK OR SAVINGS
9-21 AND LOAN ASSOCIATION. The owners of record of two-thirds of the
9-22 capital of any solvent state bank may, by vote or written consent,
9-23 authorize its officers and directors to take such action as may be
9-24 necessary under the laws of the United States or the state laws
9-25 governing savings and loan associations and savings banks to merge,
9-26 reorganize, or convert it into a national bank, state or federal
9-27 savings bank, or state or federal savings and loan association,
10-1 provided, however, that the state bank shall not cease to be a
10-2 state bank subject to the supervision of the Banking Commissioner
10-3 until (1) the Banking Commissioner has been given written notice of
10-4 the intention to merge, reorganize, or convert for at least thirty
10-5 (30) days, (2) such bank has published notice thereof at least once
10-6 a week for four (4) weeks in a newspaper of general circulation
10-7 published in the county of its domicile, or, if no such newspaper
10-8 is published in the county, in an adjacent county, (3) the bank has
10-9 filed with the Banking Commissioner a transcript of the merger,
10-10 reorganization, or conversion proceedings, sworn to by a majority
10-11 of the qualified directors and a publisher's certificate showing
10-12 publication of the notice above provided, and (4) such bank has
10-13 received a certificate of authority to do business as a national
10-14 bank, state or federal savings bank, or state or federal savings
10-15 and loan association.
10-16 SECTION 6. Article 13a, Chapter III, The Texas Banking Code
10-17 (Article 342-313a, Vernon's Texas Civil Statutes), is amended to
10-18 read as follows:
10-19 Art. 13a. CONVERSION OF NATIONAL BANK OR STATE OR FEDERAL
10-20 SAVINGS BANK OR SAVINGS AND LOAN ASSOCIATION INTO STATE BANK. A
10-21 national bank, state or federal savings bank, or state or federal
10-22 savings and loan association <or association> located in this state
10-23 which follows the procedures prescribed by the laws of the United
10-24 States or this state to convert into a state bank, shall be granted
10-25 a certificate of incorporation in the state when the State Banking
10-26 Board finds that the institution <bank> meets the standards as to
10-27 location of office, capital structure and business experience of
11-1 officers and directors for the incorporation of a state bank. In
11-2 considering the application for conversion from a national bank,
11-3 state or federal savings bank, or state or federal savings and loan
11-4 association into a state bank the Board shall consider and
11-5 determine that the new bank meets with all the requirements of a
11-6 new state bank applicant. The conversion is governed by this
11-7 Article and not by Article 9 of this chapter. Included also in the
11-8 application of a national bank for conversion and to be considered
11-9 along with the other information submitted shall be the terms of
11-10 the transition from a national bank into a state bank which shall
11-11 also show that the provisions of Public Law 706 of the 81st
11-12 Congress of the United States have been fully satisfied. <Such
11-13 conversion shall be governed by the provisions of this Article and
11-14 shall not be governed by Article 9, now codified as Article
11-15 342-309, Vernon's Texas Civil Statutes.>
11-16 SECTION 7. Section 4, Article 12, Chapter IX, The Texas
11-17 Banking Code (Article 342-912, Vernon's Texas Civil Statutes), is
11-18 amended to read as follows:
11-19 Sec. 4. APPLICATION AND FILINGS BY OUT-OF-STATE BANK HOLDING
11-20 COMPANY SEEKING ACQUISITION. An out-of-state bank holding company
11-21 that seeks to take an action specified in Section 1 of this article
11-22 for which a copy of the application must be filed with the banking
11-23 commissioner shall also file with the banking commissioner, when it
11-24 delivers the application:
11-25 (1) evidence that the out-of-state bank holding
11-26 company is authorized to take the action under Article 16 of this
11-27 chapter;
12-1 (2) evidence that the out-of-state bank holding
12-2 company and each state bank, national bank in this state, and bank
12-3 holding company being acquired will, after the acquisition, comply
12-4 with applicable capital adequacy guidelines, and that the
12-5 consolidated equity capital condition of these banks in this state
12-6 during the first three years after being acquired will be
12-7 maintained at least at the level existing immediately prior to the
12-8 acquisition less the consolidated net loss of these banks, if any;
12-9 (3) agreements, subject to any contrary provision of
12-10 applicable federal law, that while the out-of-state bank holding
12-11 company directly or indirectly owns or controls any national bank
12-12 in this state,<:>
12-13 <(A)> a majority of the directors of each
12-14 national bank shall be residents of the State of Texas, except that
12-15 directors who are employees or officers or spouses of employees or
12-16 officers of the bank, out-of-state bank holding company, or an
12-17 affiliate of the bank or out-of-state bank holding company may not
12-18 be counted as residents of the State of Texas for the purpose of
12-19 this subdivision <paragraph>; and
12-20 <(B) the out-of-state bank holding company will
12-21 not directly or indirectly own or control:>
12-22 <(i) an institution located in this state,
12-23 the deposits of which are insured by the Federal Deposit Insurance
12-24 Corporation or any successor performing similar functions, unless
12-25 the institution is a bank as defined by Section 2, Bank Holding
12-26 Company Act of 1956 (12 U.S.C. Sec. 1841); or>
12-27 <(ii) an institution located in this
13-1 state, the deposits of which are insured by the Federal Savings and
13-2 Loan Insurance Corporation or any successor performing similar
13-3 functions; and>
13-4 (4) an agreement to provide such additional
13-5 information as may be required by rules promulgated by the banking
13-6 commissioner.
13-7 SECTION 8. Sections 3 and 4, Article 16, Chapter IX, The
13-8 Texas Banking Code (Article 342-916, Vernon's Texas Civil
13-9 Statutes), are amended to read as follows:
13-10 Sec. 3. <The authority granted by Section 1 of this article
13-11 is not available to an out-of-state bank holding company that
13-12 directly or indirectly owns or controls:>
13-13 <(1) an institution located in this state, the
13-14 deposits of which are insured by the Federal Deposit Insurance
13-15 Corporation or any successor performing similar functions, unless
13-16 such institution is a bank as defined by Section 2, Bank Holding
13-17 Company Act of 1956 (12 U.S.C. Sec. 1841); or>
13-18 <(2) an institution located in this state, the
13-19 deposits of which are insured by the Federal Savings and Loan
13-20 Insurance Corporation or any successor performing similar
13-21 functions.>
13-22 <Sec. 4.> The authority granted in Section 1 of this article
13-23 is not available to an out-of-state bank holding company if after
13-24 the transaction the aggregate deposits of the state banks and
13-25 national banks domiciled in this state owned or controlled,
13-26 directly or indirectly, by the out-of-state bank holding company
13-27 would exceed 25 percent of the total deposits of all state banks
14-1 and national banks in this state as reported in the most recently
14-2 available reports of condition or similar reports filed with state
14-3 or federal authorities. For purposes of this section, the term
14-4 "deposit" has the meaning assigned by Section 2(3), Federal Deposit
14-5 Insurance Act (12 U.S.C. Sec. 1813).
14-6 SECTION 9. Section 10.02, Texas Savings and Loan Act
14-7 (Article 852a, Vernon's Texas Civil Statutes), is amended to read
14-8 as follows:
14-9 Sec. 10.02. CONVERSION INTO STATE CHARTERED ASSOCIATION.
14-10 Any Federal association or state or national bank may convert
14-11 itself into an association under this Act upon a majority vote of
14-12 the members, shareholders, or stockholders of such Federal
14-13 association or state or national bank cast at an annual meeting or
14-14 any special meeting called to consider such action. Copies of the
14-15 minutes of the proceedings of such meeting of members,
14-16 shareholders, or stockholders, verified by affidavit of the
14-17 secretary or an assistant secretary, shall be filed in the office
14-18 of the Commissioner and with the Office of Thrift Supervision or
14-19 its successor <mailed to the Federal Home Loan Bank Board,
14-20 Washington, D.C.,> within ten (10) days after such meeting. Such
14-21 verified copies of the proceedings of the meeting when so filed
14-22 shall be presumptive evidence of the holding and action of such
14-23 meeting. At the meeting at which conversion is voted upon, the
14-24 members, shareholders, or stockholders shall also vote upon the
14-25 directors who shall be the directors of the state-chartered
14-26 association after conversion takes effect. Such directors then
14-27 shall execute two (2) copies of the application for certificate of
15-1 incorporation provided in this Act. The Commissioner shall, upon
15-2 receipt of such application, cause the converting institution
15-3 <association> to be examined and if the Commissioner <he> finds
15-4 that it is in sound condition, approve the conversion and insert in
15-5 the certificate of incorporation, at the end of the paragraph
15-6 preceding the testimonium clause, the following: "This association
15-7 is incorporated by conversion from _____ (a Federal savings and
15-8 loan association, state bank, or national bank, as applicable)."
15-9 Each of the directors chosen for the new association shall sign and
15-10 acknowledge the application for certificate of incorporation as
15-11 subscribers thereto and the proposed bylaws as incorporators of the
15-12 new association. The provisions of this Act shall, so far as
15-13 applicable, apply to such conversion. The state-chartered
15-14 association shall be a continuation of the corporate entity of the
15-15 converting Federal association or state or national bank and
15-16 continue to have all of its property and rights.
15-17 SECTION 10. Chapter 10, Texas Savings and Loan Act (Article
15-18 852a, Vernon's Texas Civil Statutes), is amended by adding Section
15-19 10.021 to read as follows:
15-20 Sec. 10.021. CONVERSION INTO OTHER FINANCIAL INSTITUTION.
15-21 (a) An association subject to this Act may convert itself into a
15-22 state or national bank or state or federal savings bank on
15-23 application to the commissioner.
15-24 (b) A conversion under this section may be initiated by the
15-25 adoption of a resolution declaring that the association is to be
15-26 converted. The resolution must be adopted by a majority vote of
15-27 the members or shareholders of the association entitled to vote at
16-1 an annual or special meeting called to consider the conversion. A
16-2 copy of the minutes of the proceedings of the meeting, verified by
16-3 an affidavit of the secretary or an assistant secretary, shall be
16-4 filed in the office of the commissioner not later than the 10th day
16-5 after the date of the meeting. A sworn and filed copy of the
16-6 proceedings of the meeting is presumptive evidence of the meeting
16-7 and action taken.
16-8 (c) An application for conversion shall be approved by the
16-9 commissioner if the commissioner determines that the association is
16-10 in good standing. For purposes of this subsection, an association
16-11 is in good standing if the association has paid all fees,
16-12 assessments, and money due and payable to the Savings and Loan
16-13 Department of Texas.
16-14 (d) A copy of the charter issued to the new financial
16-15 institution by the appropriate financial institution regulatory
16-16 agency or a certificate showing the organization of the new
16-17 institution as a financial institution, certified by the secretary
16-18 or assistant secretary of the appropriate financial institution
16-19 regulatory agency, shall be filed with the commissioner. Failure
16-20 to file the charter or certificate with the commissioner does not
16-21 affect the validity of the conversion.
16-22 (e) Following the approval of the application for conversion
16-23 by the commissioner and on the granting of a charter by the
16-24 appropriate financial institution regulatory agency, the
16-25 institution receiving the new charter ceases to be an association
16-26 incorporated under this Act and is no longer subject to the
16-27 supervision and control of the commissioner, as provided by this
17-1 Act.
17-2 (f) On the conversion of an association into another
17-3 financial institution, the corporate existence of the association
17-4 does not terminate, but the new financial institution is a
17-5 continuation of the converting association. All property of the
17-6 converting association, including its rights, titles, and interests
17-7 in and to all property, whether real, personal, or mixed, and
17-8 things in action, and every right, privilege, interest, and asset
17-9 of any value or benefit then existing, or pertaining to it, or
17-10 which would inure to it, immediately by operation of law and
17-11 without any conveyance or transfer and without any further act or
17-12 deed remains and vests in and continues to be the property of the
17-13 financial institution into which the association has converted.
17-14 The new financial institution has, holds, and enjoys those
17-15 properties, rights, privileges, interests, and assets in its own
17-16 right as fully and to the same extent as they were possessed, held,
17-17 and enjoyed by the converting association. The new financial
17-18 institution at the time the conversion takes effect has and
17-19 succeeds to all the rights, obligations, and relations of the
17-20 converting association. A pending action or other judicial
17-21 proceeding to which the association is a party is not abated or
17-22 discontinued by reason of the conversion but may be prosecuted to
17-23 final judgment, order, or decree in the same manner as if the
17-24 conversion into the new financial institution had not been made.
17-25 The new financial institution may continue a pending action in its
17-26 corporate name as the new financial institution, and a judgment,
17-27 order, or decree may be rendered for or against it that might have
18-1 been rendered for or against the converting association.
18-2 SECTION 11. Section 10.03, Texas Savings and Loan Act
18-3 (Article 852a, Vernon's Texas Civil Statutes), is amended to read
18-4 as follows:
18-5 Sec. 10.03. REORGANIZATION, MERGER, AND CONSOLIDATION.
18-6 (a) Pursuant to a plan adopted by the board of directors and
18-7 approved by the Commissioner, and subject to the provisions of
18-8 Chapter 9 of this Act, an association shall have power to
18-9 reorganize or to merge or consolidate with another association,
18-10 <or> Federal association, foreign association, state or national
18-11 bank, or state or federal savings bank; provided, that the plan of
18-12 such reorganization, merger or consolidation shall be approved by a
18-13 majority of the total vote the members or shareholders are entitled
18-14 to cast. Approval may be voted at either an annual meeting or at a
18-15 special meeting called to consider such action. A shareholder of a
18-16 capital stock association has the same dissenter's rights as a
18-17 shareholder of a domestic corporation under the Texas Business
18-18 Corporation Act. In all cases the corporate continuity of the
18-19 resulting corporation shall possess the same incidents as that of
18-20 an entity <association> which has converted in accordance with this
18-21 Act. The home office of the association in the proposed merger
18-22 possessing the largest assets shall be designated as the home
18-23 office of the surviving entity <association>, unless otherwise
18-24 approved by the Commissioner.
18-25 (b) Upon being presented with a plan of reorganization,
18-26 merger, or consolidation, the Commissioner shall give public notice
18-27 of the proposed reorganization, merger, or consolidation in the
19-1 county or counties in which the association or associations
19-2 participating in the proposed plan have offices and give any
19-3 interested party an opportunity to appear, present evidence, and be
19-4 heard for or against the proposed plan. The hearing shall be held
19-5 before a hearing officer designated by the Commissioner. If a
19-6 protest is not received on or before the date of hearing, the
19-7 hearing may be dispensed with by the Commissioner or hearing
19-8 officer. The provisions of the Administrative Procedure and Texas
19-9 Register Act (Article 6252-13a, Vernon's Texas Civil Statutes)
19-10 applicable to a contested case apply to the hearing, except that
19-11 the notice and hearing provisions of that Act and of this section
19-12 do not apply to an application under this section if the
19-13 Commissioner has designated the merger to be a supervisory merger,
19-14 under rules adopted by the Finance Commission, and in that event,
19-15 the application and all information relating to the application is
19-16 confidential and privileged from public disclosure.
19-17 (c) The Commissioner shall issue an order denying the
19-18 proposed plan if the Commissioner finds that:
19-19 (1) the reorganization, merger, or consolidation would
19-20 substantially lessen competition or be in restraint of trade and
19-21 would result in a monopoly or be in furtherance of a combination or
19-22 conspiracy to monopolize or attempt to monopolize the savings and
19-23 loan industry in any part of the state, unless the anticompetitive
19-24 effects of the proposed reorganization, consolidation, or merger
19-25 are clearly outweighed in the public interest by the probable
19-26 effect of the reorganization, merger, or consolidation in meeting
19-27 the convenience and needs of the community to be served;
20-1 (2) in a merger or consolidation, the financial
20-2 condition of either entity <association> would jeopardize the
20-3 financial stability of any <the other> association that is a party
20-4 to the plan;
20-5 (3) the proposed plan is not in the best interest of
20-6 any association <the associations> that is a party <are parties> to
20-7 the plan;
20-8 (4) the experience, ability, standing, competence,
20-9 trustworthiness, or integrity of the management of the entities
20-10 <associations> proposing the plan is such that the reorganization,
20-11 merger, or consolidation would not be in the best interest of the
20-12 associations that are parties to the plan;
20-13 (5) after reorganization, merger, or consolidation the
20-14 surviving entity <association> would not be solvent, have adequate
20-15 capital structure, or be in compliance with the laws of this state;
20-16 (6) the entities <associations> proposing the plan
20-17 have not furnished all of the information pertinent to the
20-18 application reasonably requested by the Commissioner; or
20-19 (7) the entities <associations> proposing the plan are
20-20 not acting in good faith.
20-21 SECTION 12. The importance of this legislation and the
20-22 crowded condition of the calendars in both houses create an
20-23 emergency and an imperative public necessity that the
20-24 constitutional rule requiring bills to be read on three several
20-25 days in each house be suspended, and this rule is hereby suspended,
20-26 and that this Act take effect and be in force from and after its
20-27 passage, and it is so enacted.