Academic journal article Federal Reserve Bulletin

Veritex Holdings, Inc. Dallas, Texas

Academic journal article Federal Reserve Bulletin

Veritex Holdings, Inc. Dallas, Texas

Article excerpt

Order Approving the Merger of Bank Holding Companies, the Merger of Banks, and the Establishment of Branches

FRB Order No. 2017-18 (July 6, 2017)

Veritex Holdings, Inc. ("Veritex Holdings"), Dallas, Texas, a bank holding company within the meaning of the Bank Holding Company Act of 1956 ("BHC Act"), (1) has requested the Board's approval under section 3 of the BHC Act (2) to merge with Sovereign Bancshares, Inc. ("Sovereign Bancshares"), and thereby indirectly acquire Sovereign Bank, both of Dallas, Texas.

In addition, Veritex Holdings' subsidiary state member bank, Veritex Community Bank ("Veritex Bank"), Dallas, Texas, has requested the Board's approval under section 18(c) of the Federal Deposit Insurance Act ("Bank Merger Act") to merge with Sovereign Bank, with Veritex Bank as the surviving entity (3) Veritex Bank also has applied under section 9 of the Federal Reserve Act ("FRA") to establish and operate branches at the main office and branches of Sovereign Bank. (4)

Notice of the proposal, affording interested persons an opportunity to submit comments, has been published (82 Federal Register 8425 (January 25, 2017)). (5) The time for submitting comments has expired, and the Board has considered the proposal and all comments received in light of the factors set forth in section 3 of the BHC Act, the Bank Merger Act, and the FRA. As required by the Bank Merger Act, a report on the competitive effects of the merger was requested from the United States Attorney General, and a copy of the request has been provided to the Federal Deposit Insurance Corporation ("FDIC").

Veritex Holdings, with consolidated assets of approximately $1.4 billion, is the 524th largest insured depository organization in the United States. (6) Veritex Holdings controls approximately $1.1 billion in consolidated deposits, which represent less than 1 percent of the total amount of deposits of insured depository institutions in the United States. (7) Veritex Holdings controls Veritex Bank, which operates only in Texas. Veritex Holdings is the 64th largest insured depository organization in Texas, controlling deposits of approximately $1.0 billion, which represent less than 1 percent of the total deposits of insured depository institutions in that state. (8)

Sovereign Bancshares, with consolidated assets of approximately $1.1 billion, is the 670th largest insured depository organization in the United States, controlling approximately $857.3 million in consolidated deposits, which represent less than 1 percent of the total amount of deposits of insured depository institutions in the United States. Sovereign Bancshares controls Sovereign Bank, which operates only in Texas. Sovereign Bancshares is the 80th largest insured depository organization in Texas, controlling deposits of approximately $814.7 million, which represent less than 1 percent of the total deposits of insured depository institutions in that state.

On consummation of this proposal, Veritex Holdings would become the 338th largest insured depository organization in the United States, with consolidated assets of approximately $2.5 billion, which represent less than 1 percent of the total assets of insured depository institutions in the United States. Veritex Holdings would control consolidated deposits of approximately $2.0 billion, which represent less than 1 percent of the total amount of deposits of insured depository organizations in the United States. Veritex Holdings would become the 38th largest insured depository organization in Texas, controlling deposits representing less than 1 percent of the total deposits of insured depository institutions in that state.

Competitive Considerations

Section 3 of the BHC Act and the Bank Merger Act prohibit the Board from approving a proposal that would result in a monopoly or would be in furtherance of an attempt to monopolize the business of banking in any relevant market. …

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