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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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