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[¶5221] In the Matter of A.G. Cummings, The Citizens State Bank of Lometa, Lometa, Texas, Docket No. FDIC-94-44e (3-29-95).
FDIC Associate Regional Director grants application to engage in actions necessary to complete sale and merger of a bank by its controlling shareholder who had entered a consent order of prohibition. (This order modifies ¶11,145, issued by the FDIC on 3-6-95.)
[.1] Order of Prohibition—Modification—Sale of Bank
Where sale and merger of bank had been approved by FDIC, but not consummated, before controlling shareholder entered a consent prohibition agreement, modification of the consent order is in the best interests of banks and their depositors to permit shareholder to take those actions necessary to consummate the sale and merger transactions.
In the Matter of
A.G. CUMMINGS, individually,
and as an officer, director, and/or
person participating in the
conduct of the affairs of and
as an institution-affiliated party of
THE CITIZENS STATE BANK OF
LOMETA
LOMETA, TEXAS
(Insured State Nonmember Bank)
DECISION AND ORDER APPROVING
APPLICATION TO MODIFY ORDER
OF PROHIBITION FROM FURTHER
PARTICIPATION
FDIC-94-44e
STATEMENT OF THE CASE
Introduction
On March 13, 1995, A.G. Cummings ("Respondent"), through a letter ("Application") addressed to the Dallas Regional Office of the Federal Deposit Insurance Corporation ("FDIC"), made application to the FDIC for written consent to a modification of an Order of Prohibition From Further Participation issued by the FDIC to engage in all actions necessary to consummate the sale and merger of The Citizens State Bank of Lometa, Lometa, Texas ("Lometa"), with First State Bank, Temple, Texas ("Temple"), and the sale and merger of Citizens State Bank, Gorman, Texas ("Gorman"), with Security State Bank, Abilene, Texas ("Abilene"). This application arises under section 8(e)(7)(B) of the Federal Deposit Insurance Act ("Act"), 12 U.S.C. § 1818(e)(7)(B), and section 8(j) of the Act, 12 U.S.C. § 1818(j).
Background
Respondent served as the President and Chairman of the Board of Directors of Lometa until June 1, 1993 and as Chairman of the Board of Directors of Gorman until June 1, 1993. On July 8, 1994, the FDIC issued a Notice of Intention to Prohibit from Further Participation against Respondent based on his activities at Lometa. On January 31, 1995, Respondent entered into a Stipulation and Consent to the Issuance of an Order of Prohibition From Further Participation ("Consent Agreement"). On March 6, 1995, the FDIC accepted the Consent Agreement pursuant to section 8(e) of the Act, 12 U.S.C. § 1818(e), and issued an Order of Prohibition From Further Participation ("Order"). The Order prohibits Respondent from participating in any manner in the conduct of the affairs of any financial institution or organization enumerated in 12 U.S.C. § 1818(e)(7)(A) and from voting for a director, or serving or acting as an institution-affiliated party without the prior written consent of the FDIC.
The Application
By letter dated March 18, 1995, Respondent applied to the FDIC for written consent to a modification of the Order. Respondent seeks permission to engage in transactions necessary to consummate the sale and merger of The Citizens State Bank of Lometa, Lometa, Texas, with First State Bank, Temple, Texas, and the sale and merger of Citizens State Bank, Gorman, Texas, with Security State Bank, Abilene, Texas. The Regional Director of the Dallas Regional Office approved both sale and merger applications on March 16, 1995, pursuant to delegated authority. At the time the Consent Agreement was entered into, it was contemplated that both sales and mergers would have been consummated prior to the issuance of the Order. Due to factors beyond the control of the FDIC and the Respondent, the sales and mergers were not consummated as soon as anticipated.
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FINDINGS OF FACT
[.1] In his application for modification of the Order, Respondent states that he is the controlling shareholder, sole officer and sole director of Lometa Bancshares, Inc. and of Mid-Texas Bancshares, Inc., the bank holding companies owning Lometa and Gorman, respectively. Further, Respondent states that the purpose such a modification serves is to allow him to take such actions as are necessary to consummate the sale and merger transactions, including executing documents to finalize the sale of Lometa and Gorman, taking the purchase money and paying off bank loans which were secured by the stock of banks and made to the bank holding company, transferring the stock to the purchasers, paying miscellaneous bills of the holding companies and distributing the remaining money to the shareholders of the two holding companies.
It is in the best interests of Lometa, Gorman and their depositors that the sales and mergers of Lometa and Gorman be consummated.
DECISION AND ORDER
Upon review of the record as a whole, the FDIC finds that Respondent should be permitted to engage in all transactions necessary to consummate the sale and merger of Lometa with Temple and the sale and merger of Gorman with Abilene.
Accordingly, Respondent is hereby authorized to engage in any transactions necessary to consummate the sale and merger of The Citizens State Bank of Lometa, Lometa, Texas with First State Bank of Temple, Temple, Texas and the sale and merger of Citizens State Bank, Gorman, Texas with Security State Bank, Abilene, Texas, respectively, as approved by the Regional Director of the Dallas Regional Office on March 16, 1995. Specifically, Respondent is authorized to take such actions as are necessary to consummate the sale and merger transactions including executing documents to finalize the sale of Lometa and Gorman, taking the purchase money and paying off bank loans which were secured by the stock of banks and made to the bank holding companies, transferring the stock to the purchasers, paying miscellaneous bills of the holding companies and distributing the remaining money to the shareholders of the two holding companies.
Dated at Washington, D.C., this 29th day of March, 1995.
Pursuant to delegated authority.
/s/ A. David Meadows
Associate Director
