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CHAPTER 203. INTERSTATE BANK MERGERS AND BRANCHING

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FINANCE CODETITLE 3. FINANCIAL INSTITUTIONS AND BUSINESSESSUBTITLE G. BANK HOLDING COMPANIES; INTERSTATE BANK OPERATIONSCHAPTER 203. INTERSTATE BANK MERGERS AND BRANCHINGSec. 203.001.INTERSTATE BRANCHING BY TEXAS STATE BANKS.(a)With the prior approval of the commissioner, a Texas state bankmay establish and maintain a de novo branch or acquire a branchin a state other than Texas pursuant to Section 32.203.(b)With the prior approval of the commissioner, a Texas statebank may establish, maintain, and operate one or more branches inanother state pursuant to an interstate merger transaction inwhich the Texas state bank is the resulting bank. Not later thanthe date on which the required application for the interstatemerger transaction is filed with the responsible federal banksupervisory agency, the applicant Texas state bank shall file anapplication on a form prescribed by the commissioner and pay thefee prescribed by law. The applicant shall also comply with theapplicable provisions of Sections 32.301-32.303. The commissionershall approve the interstate merger transaction and the operationof branches outside of this state by the Texas state bank if thecommissioner makes the findings required by Section 32.302(b). Aninterstate merger transaction may be consummated only after theapplicant has received the commissioner's written approval.Added by Acts 1999, 76th Leg., ch. 344, Sec. 1.001, eff. Sept. 1,1999.Sec. 203.002.CONDITIONS FOR ENTRY BY DE NOVO BRANCHING.(a)An out-of-state bank may establish a de novo branch in this stateif:(1)the laws of the home state of the out-of-state bank wouldpermit a Texas bank to establish and maintain a de novo branch inthat state under substantially the same terms and conditions asset forth in this subchapter;(2)the out-of-state bank confirms in writing to thecommissioner that as long as it maintains a branch in this state,it will comply with all applicable laws of this state;(3)the applicant provides satisfactory evidence to thecommissioner of compliance with the applicable requirements ofSection 201.102; and(4)the commissioner, acting on or before the 30th day after thedate the commissioner receives notice of an application underSubsection (b), certifies to the responsible federal banksupervisory agency that the requirements of this subchapter havebeen met.(b)An out-of-state bank desiring to establish and maintain a denovo branch shall provide written notice of the proposedtransaction to the commissioner not later than the date on whichthe bank applies to the responsible federal bank supervisoryagency for approval to establish the branch. The filing of thenotice must be accompanied by the filing fee, if any, prescribedby the commissioner.(c)A de novo branch may be established in this state throughthe acquisition of a branch of an existing Texas bank if theacquiring out-of-state bank complies with this section.(d)A depository institution may not establish or maintain abranch in this state on the premises or property of an affiliateif the affiliate engages in commercial activities, except asprovided by Section 92.063(d).Added by Acts 1999, 76th Leg., ch. 344, Sec. 1.001, eff. Sept. 1,1999.Amended by:Acts 2007, 80th Leg., R.S., Ch.217, Sec. 4, eff. May 25, 2007.Sec. 203.003.ENTRY BY INTERSTATE MERGER TRANSACTION.(a)Subject to Sections 203.004 and 203.005, one or more Texas banksmay enter into an interstate merger transaction with one or moreout-of-state banks under this chapter, and an out-of-state bankresulting from the transaction may maintain and operate thebranches in this state of a Texas bank that participated in thetransaction. An out-of-state bank that will be the resulting bankin the interstate merger transaction shall comply with Section201.102.(b)An out-of-state bank that will be the resulting bankpursuant to an interstate merger transaction involving a Texasstate bank shall notify the commissioner of the proposed mergernot later than the date on which it files an application for aninterstate merger transaction with the responsible federal banksupervisory agency, and shall submit a copy of that applicationto the commissioner and pay the filing fee, if any, required bythe commissioner. A Texas state bank that is a party to theinterstate merger transaction shall comply with Chapter 32 andwith other applicable state and federal laws. An out-of-statebank that will be the resulting bank in the interstate mergertransaction shall provide satisfactory evidence to thecommissioner of compliance with Section 201.102.(c)An out-of-state bank that does not operate a branch in thisstate may not establish and maintain a branch in this statethrough the acquisition of a branch of an existing Texas bankexcept as provided by Section 203.002.Added by Acts 1999, 76th Leg., ch. 344, Sec. 1.001, eff. Sept. 1,1999.Sec. 203.004.LIMITATION ON CONTROL OF DEPOSITS.(a)Aninterstate merger transaction is not permitted if, onconsummation of the transaction, the resulting bank, includingall depository institution affiliates of the resulting bank,would control 20 percent or more of the total amount of depositsin this state held by all depository institutions in this state.(b)The commissioner may request and the applicant shall providesupplemental information to the commissioner to aid in adetermination under this section, including information that ismore current than or in addition to information in the mostrecently available summary of deposits, reports of condition, orsimilar reports filed with or produced by state or federalauthorities.Added by Acts 1999, 76th Leg., ch. 344, Sec. 1.001, eff. Sept. 1,1999.Sec. 203.005.REQUIRED AGE OF ACQUIRED BANK.(a)Anout-of-state bank may not acquire a Texas bank in an interstatemerger transaction if the Texas bank has not been in existenceand in continuous operation for at least five years as of theeffective date of the interstate merger transaction. However,this section does not apply if the acquiring out-of-state bankcould establish a de novo branch in this state pursuant toSection 203.002.(b)For purposes of this section:(1)a bank that is the successor as a result of merger oracquisition of all or substantially all of the assets of a priorbank is considered to have been in existence and continuouslyoperated during the period of its existence and continuousoperation as a bank and during the period of existence andcontinuous operation of the prior bank; and(2)a bank effecting a purchase and assumption, merger, orsimilar transaction with or supervised by the Federal DepositInsurance Corporation or its successor is considered to have beenin existence and continuously operated during the existence andcontinuous operation of the bank with respect to which thetransaction was consummated.Added by Acts 1999, 76th Leg., ch. 344, Sec. 1.001, eff. Sept. 1,1999.Sec. 203.006.ADDITIONAL BRANCHES.An out-of-state bank thathas established or acquired a branch in this state under thischapter may establish or acquire additional branches in thisstate to the same extent that a Texas state bank may establish oracquire a branch in this state under applicable state and federallaw.Added by Acts 1999, 76th Leg., ch. 344, Sec. 1.001, eff. Sept. 1,1999.Sec. 203.007.EXAMINATIONS; PERIODIC REPORTS.(a)The bankingcommissioner may make examinations of a branch established andmaintained in this state pursuant to this chapter by anout-of-state bank as the banking commissioner considers necessaryto determine whether the branch is being operated in compliancewith the laws of this state and in accordance with safe and soundbanking practices. Sections 31.105-31.107 or 96.054-96.057, asappropriate, apply to the examinations.(b)The commissioner may prescribe requirements for periodicreports from an out-of-state bank that operates a branch in Texaspursuant to this chapter. Reporting requirements prescribed bythe commissioner under this section must be:(1)consistent with the reporting requirements applicable toTexas state banks or state savings banks, as appropriate; and(2)appropriate to discharge the responsibilities of thecommissioner under this chapter.Added by Acts 1999, 76th Leg., ch. 344, Sec. 1.001, eff. Sept. 1,1999.
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  • FINANCE CODE

    TITLE 3. FINANCIAL INSTITUTIONS AND BUSINESSES

    SUBTITLE G. BANK HOLDING COMPANIES; INTERSTATE BANK OPERATIONS

    CHAPTER 203. INTERSTATE BANK MERGERS AND BRANCHING

    Sec. 203.001. INTERSTATE BRANCHING BY TEXAS STATE BANKS. (a)

    With the prior approval of the commissioner, a Texas state bank

    may establish and maintain a de novo branch or acquire a branch

    in a state other than Texas pursuant to Section 32.203.

    (b) With the prior approval of the commissioner, a Texas state

    bank may establish, maintain, and operate one or more branches in

    another state pursuant to an interstate merger transaction in

    which the Texas state bank is the resulting bank. Not later than

    the date on which the required application for the interstate

    merger transaction is filed with the responsible federal bank

    supervisory agency, the applicant Texas state bank shall file an

    application on a form prescribed by the commissioner and pay the

    fee prescribed by law. The applicant shall also comply with the

    applicable provisions of Sections 32.301-32.303. The commissioner

    shall approve the interstate merger transaction and the operation

    of branches outside of this state by the Texas state bank if the

    commissioner makes the findings required by Section 32.302(b). An

    interstate merger transaction may be consummated only after the

    applicant has received the commissioner's written approval.

    Added by Acts 1999, 76th Leg., ch. 344, Sec. 1.001, eff. Sept. 1,

    1999.

    Sec. 203.002. CONDITIONS FOR ENTRY BY DE NOVO BRANCHING. (a)

    An out-of-state bank may establish a de novo branch in this state

    if:

    (1) the laws of the home state of the out-of-state bank would

    permit a Texas bank to establish and maintain a de novo branch in

    that state under substantially the same terms and conditions as

    set forth in this subchapter;

    (2) the out-of-state bank confirms in writing to the

    commissioner that as long as it maintains a branch in this state,

    it will comply with all applicable laws of this state;

    (3) the applicant provides satisfactory evidence to the

    commissioner of compliance with the applicable requirements of

    Section 201.102; and

    (4) the commissioner, acting on or before the 30th day after the

    date the commissioner receives notice of an application under

    Subsection (b), certifies to the responsible federal bank

    supervisory agency that the requirements of this subchapter have

    been met.

    (b) An out-of-state bank desiring to establish and maintain a de

    novo branch shall provide written notice of the proposed

    transaction to the commissioner not later than the date on which

    the bank applies to the responsible federal bank supervisory

    agency for approval to establish the branch. The filing of the

    notice must be accompanied by the filing fee, if any, prescribed

    by the commissioner.

    (c) A de novo branch may be established in this state through

    the acquisition of a branch of an existing Texas bank if the

    acquiring out-of-state bank complies with this section.

    (d) A depository institution may not establish or maintain a

    branch in this state on the premises or property of an affiliate

    if the affiliate engages in commercial activities, except as

    provided by Section 92.063(d).

    Added by Acts 1999, 76th Leg., ch. 344, Sec. 1.001, eff. Sept. 1,

    1999.

    Amended by:

    Acts 2007, 80th Leg., R.S., Ch.

    217, Sec. 4, eff. May 25, 2007.

    Sec. 203.003. ENTRY BY INTERSTATE MERGER TRANSACTION. (a)

    Subject to Sections 203.004 and 203.005, one or more Texas banks

    may enter into an interstate merger transaction with one or more

    out-of-state banks under this chapter, and an out-of-state bank

    resulting from the transaction may maintain and operate the

    branches in this state of a Texas bank that participated in the

    transaction. An out-of-state bank that will be the resulting bank

    in the interstate merger transaction shall comply with Section

    201.102.

    (b) An out-of-state bank that will be the resulting bank

    pursuant to an interstate merger transaction involving a Texas

    state bank shall notify the commissioner of the proposed merger

    not later than the date on which it files an application for an

    interstate merger transaction with the responsible federal bank

    supervisory agency, and shall submit a copy of that application

    to the commissioner and pay the filing fee, if any, required by

    the commissioner. A Texas state bank that is a party to the

    interstate merger transaction shall comply with Chapter 32 and

    with other applicable state and federal laws. An out-of-state

    bank that will be the resulting bank in the interstate merger

    transaction shall provide satisfactory evidence to the

    commissioner of compliance with Section 201.102.

    (c) An out-of-state bank that does not operate a branch in this

    state may not establish and maintain a branch in this state

    through the acquisition of a branch of an existing Texas bank

    except as provided by Section 203.002.

    Added by Acts 1999, 76th Leg., ch. 344, Sec. 1.001, eff. Sept. 1,

    1999.

    Sec. 203.004. LIMITATION ON CONTROL OF DEPOSITS. (a) An

    interstate merger transaction is not permitted if, on

    consummation of the transaction, the resulting bank, including

    all depository institution affiliates of the resulting bank,

    would control 20 percent or more of the total amount of deposits

    in this state held by all depository institutions in this state.

    (b) The commissioner may request and the applicant shall provide

    supplemental information to the commissioner to aid in a

    determination under this section, including information that is

    more current than or in addition to information in the most

    recently available summary of deposits, reports of condition, or

    similar reports filed with or produced by state or federal

    authorities.

    Added by Acts 1999, 76th Leg., ch. 344, Sec. 1.001, eff. Sept. 1,

    1999.

    Sec. 203.005. REQUIRED AGE OF ACQUIRED BANK. (a) An

    out-of-state bank may not acquire a Texas bank in an interstate

    merger transaction if the Texas bank has not been in existence

    and in continuous operation for at least five years as of the

    effective date of the interstate merger transaction. However,

    this section does not apply if the acquiring out-of-state bank

    could establish a de novo branch in this state pursuant to

    Section 203.002.

    (b) For purposes of this section:

    (1) a bank that is the successor as a result of merger or

    acquisition of all or substantially all of the assets of a prior

    bank is considered to have been in existence and continuously

    operated during the period of its existence and continuous

    operation as a bank and during the period of existence and

    continuous operation of the prior bank; and

    (2) a bank effecting a purchase and assumption, merger, or

    similar transaction with or supervised by the Federal Deposit

    Insurance Corporation or its successor is considered to have been

    in existence and continuously operated during the existence and

    continuous operation of the bank with respect to which the

    transaction was consummated.

    Added by Acts 1999, 76th Leg., ch. 344, Sec. 1.001, eff. Sept. 1,

    1999.

    Sec. 203.006. ADDITIONAL BRANCHES. An out-of-state bank that

    has established or acquired a branch in this state under this

    chapter may establish or acquire additional branches in this

    state to the same extent that a Texas state bank may establish or

    acquire a branch in this state under applicable state and federal

    law.

    Added by Acts 1999, 76th Leg., ch. 344, Sec. 1.001, eff. Sept. 1,

    1999.

    Sec. 203.007. EXAMINATIONS; PERIODIC REPORTS. (a) The banking

    commissioner may make examinations of a branch established and

    maintained in this state pursuant to this chapter by an

    out-of-state bank as the banking commissioner considers necessary

    to determine whether the branch is being operated in compliance

    with the laws of this state and in accordance with safe and sound

    banking practices. Sections 31.105-31.107 or 96.054-96.057, as

    appropriate, apply to the examinations.

    (b) The commissioner may prescribe requirements for periodic

    reports from an out-of-state bank that operates a branch in Texas

    pursuant to this chapter. Reporting requirements prescribed by

    the commissioner under this section must be:

    (1) consistent with the reporting requirements applicable to

    Texas state banks or state savings banks, as appropriate; and

    (2) appropriate to discharge the responsibilities of the

    commissioner under this chapter.

    Added by Acts 1999, 76th Leg., ch. 344, Sec. 1.001, eff. Sept. 1,

    1999.

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