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[¶10,121A] In the Matter of BancTexas Houston, National Association, Houston,
Texas, Docket No. 90-151kk (10-16-90).
FDIC issues order conditionally granting approval for waiver of
cross-guaranty.
[.1] Cross-Guaranty—Waiver—Recapitalization—Minimum Requirements
[.2] Cross-Guaranty—Waiver—Applicable only to Applicant
[.3] Cross-Guaranty—Waiver—Reasonable Losses
[.4] Cross-Guaranty—Waiver—Applicable only to Specific Institution
[.5] Cross-Guaranty—Waiver—Compliance with Federal Reserve Act
Restrictions—Required
[.6] Cross-Guaranty—Waiver—Permanence—Minimum Requirements
[.7] Cross-Guaranty—Waiver—Revocation for Non-Compliance
In the Matter of
BANCTEXAS HOUSTON, NATIONAL ASSOCIATION
HOUSTON, TEXAS
(Insured Depository Institution)
and
BANCTEXAS MCKINNEY, NATIONAL ASSOCIATION
MCKINNEY, TEXAS
(Insured Depository Institution)
Related to
BANCTEXAS DALLAS, NATIONAL ASSOCIATION
DALLAS, TEXAS
(Commonly Controlled InsuredDepository Institution)
ORDER CONDITIONALLY GRANTING APPROVAL FOR WAIVER OF CROSS-GUARANTY
FDIC-90-151kk
BE ADVISED that the Board of Directors ("Board") of the
Federal Deposit Insurance Corporation ("FDIC"), having fully
considered the facts and information relating to the application for an
exemption from assessment for losses incurred or reasonably anticipated
to be incurred by the FDIC in connection with the default of BancTEXAS
Dallas, National Association, Dallas, Texas, filed pursuant to the
provisions of section 5(e)(5)(A) of the Federal Deposit Insurance Act
("Act"), 12 U.S.C. §1815(e)(5)(A), by BancTEXAS Group Inc.,
Dallas, Texas ("Applicant"), relating to its proposal to
recapitalize BancTEXAS Houston, National Association, Houston, Texas,
and BancTEXAS McKinney, National Association, McKinney, Texas
("Insured Institutions"), has concluded that approval of the
application for waiver should be granted, subject to the conditions and
restrictions set forth below.
IT IS THEREFORE ORDERED:
[.1]1. This ORDER CONDITIONALLY GRANTING APPROVAL FOR WAIVER OF
CROSS-GUARANTY ("ORDER") is conditional upon the recapitalization
of the Insured Institutions according to the terms of the proposal as
accepted by the FDIC, which includes the following conditions:
(a) The Applicant shall inject capital of not less than $6,750,000
total into the Insured Institutions within the later of 30 days from
the date of this ORDER or one business day after receipt of required
regulatory approval.
(b) Each Insured Institution shall maintain a risk-based capital ratio
and an equity capital ratio as required by its primary regulator.
(c) Neither Insured Institution shall declare or pay any cash dividends
during the life of this ORDER.
(d) All service subsidiaries of the Applicant shall cease to be
subsidiaries of the Applicant and shall become subsidiaries of the
Insured Institutions, within the later of 45 days from the date of this
ORDER or one business day after receipt of required regulatory
approval, at no cost to the Insured Institutions, to the extent such
activities are permitted by the primary regulator.
(e) Within 45 days from the date of this ORDER, the Insured
Institutions and the Applicant shall adopt a written plan, acceptable
to the Regional Director (Supervision) of the Dallas Regional Office of
the FDIC ("Regional Director"), which requires and implements a
reduction in fees paid by the Insured Institutions or their
subsidiaries to the Applicant.
(f) Within 45 days from the date of this ORDER, the Applicant shall
enter into an agreement with the FDIC with respect to the outstanding
warrants issued by the Applicant to the FDIC on July 17, 1987, pursuant
to an Assistance Agreement dated June 3, 1987. The Applicant shall
amend such warrants, which are exercisable for 10% of the Applicant's
common stock, so that the exercise price shall equal $0.05 per share of
common stock.
(i) The FDIC agrees that subject warrants shall not be
transferable or exercisable before five years from the effective date
of this ORDER, except as indicated in subparagraph (f)(ii) below; and
(ii) The subject warrants shall be transferable or exercisable within
five years from the effective date of this ORDER if either or both of
the Insured Institutions are transferred or sold or if the Applicant
and the FDIC both consent to the transfer or exercise of the warrants
within the aforementioned five year period.
In the event that the Applicant is liquidated or dissolved, the
holder of the warrants will receive a share in any distribution as
though the warrants had been exercised prior to such liquidation or
dissolution; and
(g) Within 45 days from the date of this ORDER, the Applicant shall
enter into an agreement with the FDIC stating that in the event either
or both of the Insured Institutions are transferred or sold, the
proceeds from said transfer or sale shall be injected into the
remaining Insured Institution as capital or be retained by the
Applicant in a manner approved by the Regional Director. This Agreement
will survive the ORDER and terminate five years after the effective
date of this ORDER.
[.2]2. This ORDER will remain in effect only so long as the Insured
Institutions are controlled by the Applicant, and its applicability may
not be conveyed or otherwise transferred by the Applicant.
[.3]3. Contingent upon compliance by the Insured Institutions, the
Applicant, or any insured depository institution affiliates controlled
by the Applicant with the conditions set forth in this ORDER, this
ORDER constitutes a conditional waiver from assessment for losses
incurred or reasonably anticipated to be incurred by the FDIC in
connection with the default of BancTEXAS Dallas, National Association,
Dallas, Texas.
[.4]4. The conditional waiver granted by this ORDER will apply only to
losses resulting from the default of, or FDIC assistance to, BancTEXAS
Dallas, National Association, Dallas, Texas, a commonly controlled
depository institution of the Insured Institutions. Liability for loss
resulting from the default of, or FDIC assistance to, any other insured
depository institution controlled by Applicant will remain with all
other commonly controlled insured depository institutions, including
the Insured Institutions.
[.5]5. During the life of this ORDER, the Insured Institutions, the
Applicant, and all other insured depository institution affiliates
controlled by the Applicant shall comply fully with the restrictions of
sections 23A and 23B of the Federal Reserve Act, 12 U.S.C. §§ 371c
and 371c-1, without regard to section 23A(d)(1) of the Federal Reserve
Act, 12 U.S.C. §371c(d)(1).
[.6]6. If the Applicant shall increase its equity capital account by an
outside cash investment of not less than $10,000,000 before January 26,
1992, and such additional capital is downstreamed to the Insured
Institutions to the extent necessary to achieve and maintain the
capital requirements established by the primary regulator, and
contingent upon the compliance by the Insured Institutions, the
Applicant, or any insured depository institution affiliates controlled
by the Applicant with the conditions set forth in this ORDER, this
ORDER will constitute a permanent exemption from assessment for losses
incurred or reasonably anticipated to be incurred by the FDIC in
connection with the default of BancTEXAS Dallas, National Association,
Dallas, Texas.
7. The Applicant agrees to pursue all regulatory approvals necessary to
consummate this ORDER's transactions.
[.7]8. Failure of the Applicant to recapitalize the Insured Institutions as
required herein will render this ORDER null and void. Notwithstanding
the foregoing, should the FDIC determine that the Insured Institutions,
the Applicant, or any insured depository institution affiliates
controlled by the Applicant, fail to comply fully with any other
conditions contained herein, the FDIC shall have the right to revoke
this conditional waiver, after giving the Applicant written notice of
said revocation and a reasonable opportunity to be heard on the matter.
By direction of the Board of Directors.
Dated at Washington, D.C., this 16th day of October, 1990.
