96 Fed. Res. Bull. B1 (2010)

handle is hein.journals/fedred96 and id is 1 raw text is: February 2010
Legal Developments: Fourth Quarter, 2009

ORDER ISSUED UNDER BANK
HOLDING COMPANY ACT
ORDER ISSUED UNDER SECTION 3 OF
THE BANK HOLDING COMPANY ACT
Sandhills Bancshares, Inc.
Iraan, Texas
Order Approving the Formation of a Bank
Holding Company
Sandhills Bancshares, Inc. (Sandhills) has requested the
Board's approval under section 3 of the Bank Holding
Company Act (BHC Act)' to become a bank holding
company and to acquire all the voting shares of TransPecos
Banks-Iraan (Bank),2 both of Iraan, from TransPecos
Financial Corp., San Antonio, all of Texas.3
Notice of the proposal, affording interested persons an
opportunity to comment, has been published (74 Federal
Register 34,015 (2009)). The time for filing comments has
expired, and the Board has considered the application and
all comments received in light of the factors set forth in
section 3 of the BHC Act.
Sandhills is a newly organized corporation formed for
the purpose of acquiring control of Bank. Bank, with total
assets of approximately $23.7 million, is the 583rd largest
insured depository institution in Texas, controlling deposits
of approximately $21.2 million, which represent less than
1. 12 U.s.c.  1842.
2. Bank's name will change to Tejas Bank after the acquisition.
Bank currently has one branch in Iraan, Texas, and had filed an
application with the Federal Deposit Insurance Corporation (FDIC)
and the Texas Department of Banking (TDOB), Bank's primary
federal and state supervisors, to establish a second branch in Mona-
hans, Texas, on consummation of this proposal. The Board received
one comment in opposition and fourteen comments in support of the
proposal to establish the Monahans branch. Those comments were
forwarded to the TDOB and FDIC, and both agencies have approved
the proposed branch (September 8 and September 11, 2009, respec-
tively).
3. The seller is a bank holding company with one other subsidiary
bank, TransPecos Banks, Pecos, Texas.

1 percent of the total amount of deposits of insured
depository institutions in the state.4
COMPETITIVE CONSIDERATIONS
Section 3 of the BHC Act prohibits the Board from
approving a proposal that would result in a monopoly or
that would be in furtherance of an attempt to monopolize
the business of banking in any relevant banking market.
The BHC Act also prohibits the Board from approving a
proposal that would substantially lessen competition in any
relevant banking market, unless the anticompetitive effects
of the proposal are clearly outweighed in the public interest
by the probable effect of the proposal in meeting the
convenience and needs of the community to be served.5
Sandhills does not currently control a depository institu-
tion. Based on all the facts of record, the Board has
concluded that consummation of the proposal would not
have a significantly adverse effect on competition or on the
concentration of banking resources in any relevant banking
market and that competitive considerations are consistent
with approval.
FINANCIAL, MANAGERIAL, AND SUPERVISORY
CONSIDERATIONS AND FUTURE PROSPECTS
Section 3 of the BHC Act requires the Board to consider the
financial and managerial resources and future prospects of
the companies and depository institutions involved in the
proposal and certain other supervisory factors.6 The Board
has considered the factors in light of all the facts of record,
including supervisory and examination information re-
ceived from the relevant federal and state supervisors of
Bank and publicly reported and other available financial
information, including information provided by Sandhills.
In addition, the Board has consulted with the primary
federal and state supervisors of Bank.
In evaluating financial factors in proposals involving
newly formed small bank holding companies, the Board
reviews the financial condition of both the applicant and the
target depository institution. The Board also evaluates the
financial condition of the pro forma organization, including
its capital position, asset quality, and earnings prospects,
4. Asset and deposit data are as of June 30, 2009. State ranking is
based on 2008 FDIC Summary of Deposit data. In this context, insured
depository institutions include commercial banks, savings banks, and
savings associations.
5. 12 U.S.C.  1842(c)(1).
6. 12 U.S.C.  1842(c)(2) and (3).

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