1-1 By: Parker S.B. No. 1223
1-2 (In the Senate - Filed March 12, 1993; March 16, 1993, read
1-3 first time and referred to Committee on Economic Development;
1-4 March 30, 1993, reported favorably by the following vote: Yeas 9,
1-5 Nays 0; March 30, 1993, sent to printer.)
1-6 COMMITTEE VOTE
1-7 Yea Nay PNV Absent
1-8 Parker x
1-9 Lucio x
1-10 Ellis x
1-11 Haley x
1-12 Harris of Dallas x
1-13 Harris of Tarrant x
1-14 Leedom x
1-15 Madla x
1-16 Rosson x
1-17 Shapiro x
1-18 Wentworth x
1-19 A BILL TO BE ENTITLED
1-20 AN ACT
1-21 relating to the merger, reorganization, or conversion of state or
1-22 federal savings banks, state or federal savings and loan
1-23 associations, and state banks.
1-24 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-25 SECTION 1. Section E, Article 5, Chapter III, The Texas
1-26 Banking Code (Article 342-305, Vernon's Texas Civil Statutes), is
1-27 amended to read as follows:
1-28 E. The provisions of the Administrative Procedure and Texas
1-29 Register Act (Article 6252-13a, Vernon's Texas Civil Statutes)
1-30 governing contested cases do not apply to charter applications
1-31 filed for the purpose of assuming the assets and liabilities of any
1-32 bank, state or federal savings bank, or state or federal savings
1-33 and loan association deemed by the Banking Commissioner to be in an
1-34 unsafe condition.
1-35 SECTION 2. Article 8, Chapter III, The Texas Banking Code
1-36 (Article 342-308, Vernon's Texas Civil Statutes), is amended to
1-37 read as follows:
1-38 Art. 8. MERGER--TRUST POWERS. Any two or more state banks,
1-39 or if national banks are hereafter authorized by the laws of the
1-40 United States to participate in such a merger, any one or more
1-41 state banks and any one or more national banks domiciled in this
1-42 State, or any state bank and any state or federal savings and loan
1-43 association or state or federal savings bank authorized by the laws
1-44 of this State or the United States to participate in a merger, may,
1-45 with the approval of the Banking Commissioner and the written
1-46 consent of the owners of record of two-thirds of the capital of
1-47 each of said institutions <banks>, be merged. Said merging
1-48 institutions <banks> shall file with the Banking Commissioner:
1-49 (1) A statement of the plan of merger approved by the
1-50 board of directors of each merging institution <bank>, by a
1-51 majority vote of the qualified directors.
1-52 (2) Certificate of merger stating the facts required
1-53 by Article 4 of this chapter and executed and acknowledged by a
1-54 majority of the qualified directors of each merging institution
1-55 <bank>.
1-56 The Banking Commissioner shall thereupon investigate the
1-57 condition of the merging institutions <banks> and if the
1-58 Commissioner <he> finds that the state bank which will result from
1-59 the merger (hereafter called the "resulting bank") will be solvent
1-60 and its capital unimpaired; that it will have adequate capital
1-61 structure; that such merger does not violate the anti-trust laws of
1-62 this state; and that the resulting bank has in all respects
1-63 complied with the laws of this State relative to the incorporation
1-64 of State banks, the Commissioner <he> may approve such merger, and,
1-65 if the Commissioner <he> so approves, the Commissioner <he> shall
1-66 deliver to the resulting bank a certified copy of the certificate
1-67 of merger, which certificate shall constitute the charter and
1-68 articles of association of the resulting bank. The resulting bank
2-1 shall be deemed a continuation in entity and identity of each of
2-2 the institutions <banks> involved in the merger; shall be subject
2-3 to all the liabilities, obligations, duties and relations of each
2-4 merging institution <bank>; and shall without the necessity of any
2-5 conveyance, assignment or transfer become the owner of all of the
2-6 assets of every kind and character formerly belonging to the
2-7 merging institutions <banks>; further, provided, that if any
2-8 merging institution <bank> shall at the time of the merger be
2-9 acting as trustee, guardian, executor, administrator, or in any
2-10 other fiduciary capacity, the resulting bank shall, without the
2-11 necessity of any judicial action or action by the creator of such
2-12 trust, continue such office, trust or fiduciary relationship and
2-13 shall perform all of the duties and obligations and exercise all of
2-14 the powers and authority connected with or incidental to such
2-15 fiduciary relationship in the same manner as though the resulting
2-16 bank had been originally named or designated as such fiduciary.
2-17 The naming or designating by a testator, or the creator of a
2-18 living trust, of any one of the merging institutions <banks> to act
2-19 as trustee, guardian, executor or in any other fiduciary capacity
2-20 shall be considered the naming or designating of the bank resulting
2-21 from the merger.
2-22 A stockholder may dissent from the merger by following the
2-23 procedure provided by Article 5.12, Texas Business Corporation Act.
2-24 That procedure applies to a merger under this article, as if the
2-25 state bank were a corporation organized under the Texas Business
2-26 Corporation Act.
2-27 SECTION 3. Article 9, Chapter III, The Texas Banking Code
2-28 (Article 342-309, Vernon's Texas Civil Statutes), is amended to
2-29 read as follows:
2-30 Art. 9. REORGANIZATION--INCORPORATION TO TAKE OVER BUSINESS
2-31 OF OTHER BANKS OR STATE OR FEDERAL SAVINGS BANKS OR SAVINGS AND
2-32 LOAN ASSOCIATIONS--TRUST POWERS. A state bank may be incorporated
2-33 to take over the business of any incorporated bank or banks, state
2-34 or national, or of any state or federal savings bank or state or
2-35 federal savings and loan association, as a step in the
2-36 reorganization of such institution <bank> or institutions <banks>,
2-37 (which institution <bank> or institutions <banks>, whether one or
2-38 more, will be hereafter referred to as the "reorganizing
2-39 institution") <"reorganizing bank")>, and shall, subject to the
2-40 provisions of this article, be authorized to purchase assets from
2-41 the reorganizing institution <bank> and as consideration therefor,
2-42 assume all liabilities, known or unknown, of the reorganizing
2-43 institution <bank>, other than its liability to stockholders as
2-44 such.
2-45 Persons desiring to incorporate a state bank under the
2-46 provisions of this article shall proceed in the manner provided in
2-47 Article 5 of this Chapter, and in addition, shall file with the
2-48 Banking Commissioner:
2-49 (1) The proposed contract whereby the state bank is to
2-50 purchase the assets from and assume the liabilities of the
2-51 reorganizing institution <bank>, as above mentioned.
2-52 (2) Contracts, if any, whereby the proposed state bank
2-53 is to purchase for cash the whole or any part of the right of any
2-54 or all of the stockholders of the reorganizing institution <bank>
2-55 to receive liquidating dividends upon liquidation of the
2-56 reorganizing institution <bank>, which contracts shall expressly
2-57 provide that they shall be binding and effective only in event the
2-58 reorganizing institution <bank> is placed in voluntary liquidation
2-59 within ten (10) days of the granting of the application for the
2-60 charter applied for. Such contracts shall be executed on behalf of
2-61 the proposed bank by the persons applying for the charter.
2-62 If the Banking Commissioner, after investigation, determines
2-63 that the proposed bank, if incorporated, will, after its capital
2-64 has been paid in full and all contracts above mentioned finally
2-65 consummated, be solvent, its capital adequate and unimpaired, that
2-66 such reorganization is to the best interest of the reorganizing
2-67 institution <bank>, its depositors, creditors and stockholders and
2-68 the public in general, and that upon incorporation such bank will
2-69 have in all other respects complied with the law, the Commissioner
2-70 <he> shall recommend to the State Banking Board that the charter be
3-1 granted.
3-2 If the State Banking Board concurs in the findings of the
3-3 Banking Commissioner, it shall grant the application, and the
3-4 Banking Commissioner shall deliver a certified copy of the articles
3-5 of association in the manner provided in Article 5 of this chapter.
3-6 Provided, however, that the Banking Commissioner shall not deliver
3-7 a certificate of authority until the contracts above mentioned have
3-8 been fully consummated, and the requirements of Article 7 of this
3-9 chapter have been met. The state bank so incorporated shall be
3-10 deemed a reorganization of the reorganizing institution <bank>, and
3-11 a continuation of such institution <bank> in entity and identity,
3-12 subject to all of its liabilities, obligations, duties and
3-13 relations, save and except its liability to stockholders as such,
3-14 and shall pay and perform each and every obligation, duty and
3-15 liability of the reorganizing institution <bank> in exactly the
3-16 same manner as the reorganizing institution <bank> was obligated to
3-17 do; further provided that if the reorganizing institution <bank>
3-18 was at the time of incorporation of the new state bank, named or
3-19 acting as guardian, trustee, executor, administrator or in any
3-20 other fiduciary capacity, such state bank shall, without the
3-21 necessity of any judicial action, or action by the creator of such
3-22 trust, continue the trusteeship or other fiduciary relation and
3-23 perform all of the duties and obligations of the reorganizing
3-24 institution <bank> and exercise all the powers and authority
3-25 relative thereto; and neither the reorganization of such
3-26 institution <bank>, nor any liquidation of such institution <bank>
3-27 in connection therewith, shall be deemed a resignation or refusal
3-28 to act. The naming or designating by a testator or the creator of
3-29 a living trust of the reorganizing institution <bank> to act as
3-30 trustee, guardian, executor, or in any other fiduciary capacity
3-31 shall be considered the naming or designating of the bank resulting
3-32 from the reorganization.
3-33 The new state bank shall give notice of its assumption of the
3-34 liabilities of the reorganizing institution <bank> by publishing
3-35 notice thereof once each week for a period of two (2) weeks in some
3-36 newspaper of general circulation published in the county of its
3-37 domicile, or in event no such newspaper is published in said
3-38 county, then in a newspaper of general circulation published in an
3-39 adjacent county. The first notice shall be published within ten
3-40 (10) days after the delivery of the certificate of authority to
3-41 such bank.
3-42 SECTION 4. Article 10, Chapter III, The Texas Banking Code
3-43 (Article 342-310, Vernon's Texas Civil Statutes), is amended to
3-44 read as follows:
3-45 Art. 10. PURCHASE OF ASSETS OF ANOTHER BANK OR STATE OR
3-46 FEDERAL SAVINGS BANK OR SAVINGS AND LOAN ASSOCIATION--DISBURSING
3-47 AGENT. Any state bank may, with the consent of the Banking
3-48 Commissioner, purchase the whole or any part of the assets of any
3-49 other state bank or of any national bank domiciled in this State,
3-50 or of a state or federal savings bank or state or federal savings
3-51 and loan association, and may hold the purchase price and any
3-52 additional funds delivered to it by the selling institution <bank>
3-53 in trust for or as a deposit to the credit of the selling
3-54 institution <bank>. The purchasing bank may act as agent of the
3-55 selling institution <bank> in disbursing the funds so held in trust
3-56 or on deposit by paying the depositors and creditors of the selling
3-57 institution <bank>, provided that if the purchasing bank acts under
3-58 written contract of agency which specifically names each depositor
3-59 and creditor and the amount to be paid each, and if such agency is
3-60 confined to the purely ministerial act of paying such depositors
3-61 and creditors the amounts due them as determined by the selling
3-62 institution <bank> and reflected in the contract of agency and
3-63 involves no discretionary duties or authority other than the
3-64 identification of the depositors and creditors named, and if such
3-65 contract is approved by the Banking Commissioner, then the
3-66 purchasing bank may rely upon such contract of agency and the
3-67 instructions included therein, and shall not be in any way liable
3-68 or responsible for any error made by the selling institution <bank>
3-69 in determining its liabilities, the depositors and creditors to
3-70 whom such liabilities are due, or the amounts due such depositors
4-1 and creditors; nor liable or in any way responsible for any
4-2 preference which may result from the payments made pursuant to such
4-3 contract of agency and the instructions included therein. Further
4-4 provided that, in event the selling institution <bank> should, at
4-5 any time after such sale of assets, be closed and come into the
4-6 hands of the Banking Commissioner or<, if a national bank> into the
4-7 hands of a receiver, then the purchasing bank shall pay to the
4-8 Banking Commissioner as statutory liquidator or to the receiver of
4-9 such state or national institution <bank> the balance of the funds
4-10 held by it in trust or on deposit for the selling institution
4-11 <bank>, not theretofore paid to the depositors and creditors of the
4-12 selling institution <bank>, and shall thereupon stand discharged of
4-13 any and all liabilities, obligations or responsibilities to the
4-14 selling institution <bank>, its receiver, the Banking Commissioner
4-15 as its statutory liquidator, or to the depositors, creditors or
4-16 stockholders thereof. Provided further that payment to any
4-17 depositor or creditor of the selling institution <bank> of the
4-18 amount to be paid him under the terms of the contract of agency may
4-19 be effected by the purchasing bank opening an account in the name
4-20 of such depositor or creditor, crediting such account with the
4-21 amount to be paid the depositor or creditor under the terms of such
4-22 agency contract, and mailing a duplicate deposit ticket evidencing
4-23 such credit to such depositor or creditor at his address as
4-24 reflected by the records of the selling institution <bank>, or
4-25 delivering it to him personally, and the relation of debtor to
4-26 creditor shall thereupon arise between the purchasing bank and such
4-27 depositors and creditors to the extent and only to the extent of
4-28 the credit reflected by such deposit tickets. Further provided,
4-29 that if any such depositor or creditor checks upon the credit so
4-30 created, or if he does not within sixty (60) days of the mailing or
4-31 the personal delivery of such deposit ticket protest the
4-32 transaction and demand payment from the selling institution <bank>,
4-33 he shall be deemed to have ratified the transaction and to the
4-34 extent of the credit so created to have accepted the obligation of
4-35 the purchasing bank as reflected by said deposit ticket in
4-36 satisfaction of the obligation of the selling institution <bank>,
4-37 and the obligation of the selling institution <bank> to the extent
4-38 of such credit shall be deemed paid and satisfied within the
4-39 meaning of this article.
4-40 SECTION 5. Article 13, Chapter III, The Texas Banking Code
4-41 (Article 342-313, Vernon's Texas Civil Statutes), is amended to
4-42 read as follows:
4-43 Art. 13. MERGER, REORGANIZATION, OR CONVERSION OF STATE BANK
4-44 INTO NATIONAL BANK OR STATE OR FEDERAL SAVINGS BANK OR SAVINGS
4-45 AND LOAN ASSOCIATION. The owners of record of two-thirds of the
4-46 capital of any solvent state bank may, by vote or written consent,
4-47 authorize its officers and directors to take such action as may be
4-48 necessary under the laws of the United States or the state laws
4-49 governing savings and loan associations and savings banks to merge,
4-50 reorganize, or convert it into a national bank, state or federal
4-51 savings bank, or state or federal savings and loan association,
4-52 provided, however, that the state bank shall not cease to be a
4-53 state bank subject to the supervision of the Banking Commissioner
4-54 until (1) the Banking Commissioner has been given written notice of
4-55 the intention to merge, reorganize, or convert for at least thirty
4-56 (30) days, (2) such bank has published notice thereof at least once
4-57 a week for four (4) weeks in a newspaper of general circulation
4-58 published in the county of its domicile, or, if no such newspaper
4-59 is published in the county, in an adjacent county, (3) the bank has
4-60 filed with the Banking Commissioner a transcript of the merger,
4-61 reorganization, or conversion proceedings, sworn to by a majority
4-62 of the qualified directors and a publisher's certificate showing
4-63 publication of the notice above provided, and (4) such bank has
4-64 received a certificate of authority to do business as a national
4-65 bank, state or federal savings bank, or state or federal savings
4-66 and loan association.
4-67 SECTION 6. Article 13a, Chapter III, The Texas Banking Code
4-68 (Article 342-313a, Vernon's Texas Civil Statutes), is amended to
4-69 read as follows:
4-70 Art. 13a. CONVERSION OF NATIONAL BANK OR STATE OR FEDERAL
5-1 SAVINGS BANK OR SAVINGS AND LOAN ASSOCIATION INTO STATE BANK. A
5-2 national bank, state or federal savings bank, or state or federal
5-3 savings and loan association <or association> located in this state
5-4 which follows the procedures prescribed by the laws of the United
5-5 States or this state to convert into a state bank, shall be granted
5-6 a certificate of incorporation in the state when the State Banking
5-7 Board finds that the institution <bank> meets the standards as to
5-8 location of office, capital structure and business experience of
5-9 officers and directors for the incorporation of a state bank. In
5-10 considering the application for conversion from a national bank,
5-11 state or federal savings bank, or state or federal savings and loan
5-12 association into a state bank the Board shall consider and
5-13 determine that the new bank meets with all the requirements of a
5-14 new state bank applicant. The conversion is governed by this
5-15 Article and not by Article 9 of this chapter. Included also in the
5-16 application of a national bank for conversion and to be considered
5-17 along with the other information submitted shall be the terms of
5-18 the transition from a national bank into a state bank which shall
5-19 also show that the provisions of Public Law 706 of the 81st
5-20 Congress of the United States have been fully satisfied. <Such
5-21 conversion shall be governed by the provisions of this Article and
5-22 shall not be governed by Article 9, now codified as Article
5-23 342-309, Vernon's Texas Civil Statutes.>
5-24 SECTION 7. Section 4, Article 12, Chapter IX, The Texas
5-25 Banking Code (Article 342-912, Vernon's Texas Civil Statutes), is
5-26 amended to read as follows:
5-27 Sec. 4. APPLICATION AND FILINGS BY OUT-OF-STATE BANK HOLDING
5-28 COMPANY SEEKING ACQUISITION. An out-of-state bank holding company
5-29 that seeks to take an action specified in Section 1 of this article
5-30 for which a copy of the application must be filed with the banking
5-31 commissioner shall also file with the banking commissioner, when it
5-32 delivers the application:
5-33 (1) evidence that the out-of-state bank holding
5-34 company is authorized to take the action under Article 16 of this
5-35 chapter;
5-36 (2) evidence that the out-of-state bank holding
5-37 company and each state bank, national bank in this state, and bank
5-38 holding company being acquired will, after the acquisition, comply
5-39 with applicable capital adequacy guidelines, and that the
5-40 consolidated equity capital condition of these banks in this state
5-41 during the first three years after being acquired will be
5-42 maintained at least at the level existing immediately prior to the
5-43 acquisition less the consolidated net loss of these banks, if any;
5-44 (3) agreements, subject to any contrary provision of
5-45 applicable federal law, that while the out-of-state bank holding
5-46 company directly or indirectly owns or controls any national bank
5-47 in this state,<:>
5-48 <(A)> a majority of the directors of each
5-49 national bank shall be residents of the State of Texas, except that
5-50 directors who are employees or officers or spouses of employees or
5-51 officers of the bank, out-of-state bank holding company, or an
5-52 affiliate of the bank or out-of-state bank holding company may not
5-53 be counted as residents of the State of Texas for the purpose of
5-54 this subdivision <paragraph>; and
5-55 <(B) the out-of-state bank holding company will
5-56 not directly or indirectly own or control:>
5-57 <(i) an institution located in this state,
5-58 the deposits of which are insured by the Federal Deposit Insurance
5-59 Corporation or any successor performing similar functions, unless
5-60 the institution is a bank as defined by Section 2, Bank Holding
5-61 Company Act of 1956 (12 U.S.C. Sec. 1841); or>
5-62 <(ii) an institution located in this
5-63 state, the deposits of which are insured by the Federal Savings and
5-64 Loan Insurance Corporation or any successor performing similar
5-65 functions; and>
5-66 (4) an agreement to provide such additional
5-67 information as may be required by rules promulgated by the banking
5-68 commissioner.
5-69 SECTION 8. Sections 3 and 4, Article 16, Chapter IX, The
5-70 Texas Banking Code (Article 342-916, Vernon's Texas Civil
6-1 Statutes), are amended to read as follows:
6-2 Sec. 3. <The authority granted by Section 1 of this article
6-3 is not available to an out-of-state bank holding company that
6-4 directly or indirectly owns or controls:>
6-5 <(1) an institution located in this state, the
6-6 deposits of which are insured by the Federal Deposit Insurance
6-7 Corporation or any successor performing similar functions, unless
6-8 such institution is a bank as defined by Section 2, Bank Holding
6-9 Company Act of 1956 (12 U.S.C. Sec. 1841); or>
6-10 <(2) an institution located in this state, the
6-11 deposits of which are insured by the Federal Savings and Loan
6-12 Insurance Corporation or any successor performing similar
6-13 functions.>
6-14 <Sec. 4.> The authority granted in Section 1 of this article
6-15 is not available to an out-of-state bank holding company if after
6-16 the transaction the aggregate deposits of the state banks and
6-17 national banks domiciled in this state owned or controlled,
6-18 directly or indirectly, by the out-of-state bank holding company
6-19 would exceed 25 percent of the total deposits of all state banks
6-20 and national banks in this state as reported in the most recently
6-21 available reports of condition or similar reports filed with state
6-22 or federal authorities. For purposes of this section, the term
6-23 "deposit" has the meaning assigned by Section 2(3), Federal Deposit
6-24 Insurance Act (12 U.S.C. Sec. 1813).
6-25 SECTION 9. Section 10.02, Texas Savings and Loan Act
6-26 (Article 852a, Vernon's Texas Civil Statutes), is amended to read
6-27 as follows:
6-28 Sec. 10.02. CONVERSION INTO STATE CHARTERED ASSOCIATION.
6-29 Any Federal association or state or national bank may convert
6-30 itself into an association under this Act upon a majority vote of
6-31 the members, shareholders, or stockholders of such Federal
6-32 association or state or national bank cast at an annual meeting or
6-33 any special meeting called to consider such action. Copies of the
6-34 minutes of the proceedings of such meeting of members,
6-35 shareholders, or stockholders, verified by affidavit of the
6-36 secretary or an assistant secretary, shall be filed in the office
6-37 of the Commissioner and with the Office of Thrift Supervision or
6-38 its successor <mailed to the Federal Home Loan Bank Board,
6-39 Washington, D.C.,> within ten (10) days after such meeting. Such
6-40 verified copies of the proceedings of the meeting when so filed
6-41 shall be presumptive evidence of the holding and action of such
6-42 meeting. At the meeting at which conversion is voted upon, the
6-43 members, shareholders, or stockholders shall also vote upon the
6-44 directors who shall be the directors of the state-chartered
6-45 association after conversion takes effect. Such directors then
6-46 shall execute two (2) copies of the application for certificate of
6-47 incorporation provided in this Act. The Commissioner shall, upon
6-48 receipt of such application, cause the converting institution
6-49 <association> to be examined and if the Commissioner <he> finds
6-50 that it is in sound condition, approve the conversion and insert in
6-51 the certificate of incorporation, at the end of the paragraph
6-52 preceding the testimonium clause, the following: "This association
6-53 is incorporated by conversion from _____ (a Federal savings and
6-54 loan association, state bank, or national bank, as applicable)."
6-55 Each of the directors chosen for the new association shall sign and
6-56 acknowledge the application for certificate of incorporation as
6-57 subscribers thereto and the proposed bylaws as incorporators of the
6-58 new association. The provisions of this Act shall, so far as
6-59 applicable, apply to such conversion. The state-chartered
6-60 association shall be a continuation of the corporate entity of the
6-61 converting Federal association or state or national bank and
6-62 continue to have all of its property and rights.
6-63 SECTION 10. Chapter 10, Texas Savings and Loan Act (Article
6-64 852a, Vernon's Texas Civil Statutes), is amended by adding Section
6-65 10.021 to read as follows:
6-66 Sec. 10.021. CONVERSION INTO OTHER FINANCIAL INSTITUTION.
6-67 (a) An association subject to this Act may convert itself into a
6-68 state or national bank or state or federal savings bank on
6-69 application to the commissioner.
6-70 (b) A conversion under this section may be initiated by the
7-1 adoption of a resolution declaring that the association is to be
7-2 converted. The resolution must be adopted by a majority vote of
7-3 the members or shareholders of the association entitled to vote at
7-4 an annual or special meeting called to consider the conversion. A
7-5 copy of the minutes of the proceedings of the meeting, verified by
7-6 an affidavit of the secretary or an assistant secretary, shall be
7-7 filed in the office of the commissioner not later than the 10th day
7-8 after the date of the meeting. A sworn and filed copy of the
7-9 proceedings of the meeting is presumptive evidence of the meeting
7-10 and action taken.
7-11 (c) An application for conversion shall be approved by the
7-12 commissioner if the commissioner determines that the association is
7-13 in good standing. For purposes of this subsection, an association
7-14 is in good standing if the association has paid all fees,
7-15 assessments, and money due and payable to the Savings and Loan
7-16 Department.
7-17 (d) A copy of the charter issued to the new financial
7-18 institution by the appropriate financial institution regulatory
7-19 agency or a certificate showing the organization of the new
7-20 institution as a financial institution, certified by the secretary
7-21 or assistant secretary of the appropriate financial institution
7-22 regulatory agency, shall be filed with the commissioner. Failure
7-23 to file the charter or certificate with the commissioner does not
7-24 affect the validity of the conversion.
7-25 (e) Following the approval of the application for conversion
7-26 by the commissioner and on the granting of a charter by the
7-27 appropriate financial institution regulatory agency, the
7-28 institution receiving the new charter ceases to be an association
7-29 incorporated under this Act and is no longer subject to the
7-30 supervision and control of the commissioner, as provided by this
7-31 Act.
7-32 (f) On the conversion of an association into another
7-33 financial institution, the corporate existence of the association
7-34 does not terminate, but the new financial institution is a
7-35 continuation of the converting association. All property of the
7-36 converting association, including its rights, titles, and interests
7-37 in and to all property, whether real, personal, or mixed, and
7-38 things in action, and every right, privilege, interest, and asset
7-39 of any value or benefit then existing, or pertaining to it, or
7-40 which would inure to it, immediately by operation of law and
7-41 without any conveyance or transfer and without any further act or
7-42 deed remains and vests in and continues to be the property of the
7-43 financial institution into which the association has converted.
7-44 The new financial institution has, holds, and enjoys those
7-45 properties, rights, privileges, interests, and assets in its own
7-46 right as fully and to the same extent as they were possessed, held,
7-47 and enjoyed by the converting association. The new financial
7-48 institution at the time the conversion takes effect has and
7-49 succeeds to all the rights, obligations, and relations of the
7-50 converting association. A pending action or other judicial
7-51 proceeding to which the association is a party is not abated or
7-52 discontinued by reason of the conversion but may be prosecuted to
7-53 final judgment, order, or decree in the same manner as if the
7-54 conversion into the new financial institution had not been made.
7-55 The new financial institution may continue a pending action in its
7-56 corporate name as the new financial institution, and a judgment,
7-57 order, or decree may be rendered for or against it that might have
7-58 been rendered for or against the converting association.
7-59 SECTION 11. Section 10.03, Texas Savings and Loan Act
7-60 (Article 852a, Vernon's Texas Civil Statutes), is amended to read
7-61 as follows:
7-62 Sec. 10.03. REORGANIZATION, MERGER, AND CONSOLIDATION.
7-63 (a) Pursuant to a plan adopted by the board of directors and
7-64 approved by the Commissioner, and subject to the provisions of
7-65 Chapter 9 of this Act, an association shall have power to
7-66 reorganize or to merge or consolidate with another association,
7-67 <or> Federal association, foreign association, state or national
7-68 bank, or state or federal savings bank; provided, that the plan of
7-69 such reorganization, merger or consolidation shall be approved by a
7-70 majority of the total vote the members or shareholders are entitled
8-1 to cast. Approval may be voted at either an annual meeting or at a
8-2 special meeting called to consider such action. A shareholder of a
8-3 capital stock association has the same dissenter's rights as a
8-4 shareholder of a domestic corporation under the Texas Business
8-5 Corporation Act. In all cases the corporate continuity of the
8-6 resulting corporation shall possess the same incidents as that of
8-7 an entity <association> which has converted in accordance with this
8-8 Act. The home office of the association in the proposed merger
8-9 possessing the largest assets shall be designated as the home
8-10 office of the surviving entity <association>, unless otherwise
8-11 approved by the Commissioner.
8-12 (b) Upon being presented with a plan of reorganization,
8-13 merger, or consolidation, the Commissioner shall give public notice
8-14 of the proposed reorganization, merger, or consolidation in the
8-15 county or counties in which the association or associations
8-16 participating in the proposed plan have offices and give any
8-17 interested party an opportunity to appear, present evidence, and be
8-18 heard for or against the proposed plan. The hearing shall be held
8-19 before a hearing officer designated by the Commissioner. If a
8-20 protest is not received on or before the date of hearing, the
8-21 hearing may be dispensed with by the Commissioner or hearing
8-22 officer. The provisions of the Administrative Procedure and Texas
8-23 Register Act (Article 6252-13a, Vernon's Texas Civil Statutes)
8-24 applicable to a contested case apply to the hearing, except that
8-25 the notice and hearing provisions of that Act and of this section
8-26 do not apply to an application under this section if the
8-27 Commissioner has designated the merger to be a supervisory merger,
8-28 under rules adopted by the Finance Commission, and in that event,
8-29 the application and all information relating to the application is
8-30 confidential and privileged from public disclosure.
8-31 (c) The Commissioner shall issue an order denying the
8-32 proposed plan if the Commissioner finds that:
8-33 (1) the reorganization, merger, or consolidation would
8-34 substantially lessen competition or be in restraint of trade and
8-35 would result in a monopoly or be in furtherance of a combination or
8-36 conspiracy to monopolize or attempt to monopolize the savings and
8-37 loan industry in any part of the state, unless the anticompetitive
8-38 effects of the proposed reorganization, consolidation, or merger
8-39 are clearly outweighed in the public interest by the probable
8-40 effect of the reorganization, merger, or consolidation in meeting
8-41 the convenience and needs of the community to be served;
8-42 (2) in a merger or consolidation, the financial
8-43 condition of either entity <association> would jeopardize the
8-44 financial stability of any <the other> association that is a party
8-45 to the plan;
8-46 (3) the proposed plan is not in the best interest of
8-47 any association <the associations> that is a party <are parties> to
8-48 the plan;
8-49 (4) the experience, ability, standing, competence,
8-50 trustworthiness, or integrity of the management of the entities
8-51 <associations> proposing the plan is such that the reorganization,
8-52 merger, or consolidation would not be in the best interest of the
8-53 associations that are parties to the plan;
8-54 (5) after reorganization, merger, or consolidation the
8-55 surviving entity <association> would not be solvent, have adequate
8-56 capital structure, or be in compliance with the laws of this state;
8-57 (6) the entities <associations> proposing the plan
8-58 have not furnished all of the information pertinent to the
8-59 application reasonably requested by the Commissioner; or
8-60 (7) the entities <associations> proposing the plan are
8-61 not acting in good faith.
8-62 SECTION 12. The importance of this legislation and the
8-63 crowded condition of the calendars in both houses create an
8-64 emergency and an imperative public necessity that the
8-65 constitutional rule requiring bills to be read on three several
8-66 days in each house be suspended, and this rule is hereby suspended,
8-67 and that this Act take effect and be in force from and after its
8-68 passage, and it is so enacted.
8-69 * * * * *
8-70 Austin,
9-1 Texas
9-2 March 30, 1993
9-3 Hon. Bob Bullock
9-4 President of the Senate
9-5 Sir:
9-6 We, your Committee on Economic Development to which was referred
9-7 S.B. No. 1223, have had the same under consideration, and I am
9-8 instructed to report it back to the Senate with the recommendation
9-9 that it do pass and be printed.
9-10 Parker,
9-11 Chairman
9-12 * * * * *
9-13 WITNESSES
9-14 FOR AGAINST ON
9-15 ___________________________________________________________________
9-16 Name: Catherine A. Ghiglieri x
9-17 Representing: Dept. of Banking
9-18 City: Austin
9-19 -------------------------------------------------------------------
9-20 Name: Bob Norcross x
9-21 Representing: Texas Bankers Association
9-22 City: Austin
9-23 -------------------------------------------------------------------
9-24 Name: Don Adams x
9-25 Representing: Ind. Bankers Assn. of Texas
9-26 City: Austin
9-27 -------------------------------------------------------------------
9-28 Name: Jim Pledger x
9-29 Representing: Tx Savings & Loan Dept.
9-30 City: Austin
9-31 -------------------------------------------------------------------