Sec. 34.105. OTHER DIRECT EQUITY INVESTMENTS

(a) A state bank may purchase for its own account equity securities of any class issued by:

(1) a bank service corporation, except that the bank may not invest more than an amount equal to 15 percent of the bank's unimpaired capital and surplus in a single bank service corporation or more than an amount equal to five percent of its assets in all bank service corporations;

(2) an agricultural credit corporation, except that the bank may not invest more than an amount equal to 30 percent of the bank's unimpaired capital and surplus in the agricultural credit corporation unless the bank owns at least 80 percent of the equity securities of the agricultural credit corporation;

(3) a small business investment company if the aggregate investment does not exceed an amount equal to 10 percent of the bank's unimpaired capital and surplus;

(4) a banker's bank if the aggregate investment does not exceed an amount equal to 15 percent of the bank's unimpaired capital and surplus or result in the bank acquiring or retaining ownership, control, or power to vote more than five percent of any class of voting securities of the banker's bank; or

(5) a housing corporation if the sum of the amount of investment and the amount of loans and commitments for loans to the housing corporation does not exceed an amount equal to 10 percent of the bank's unimpaired capital and surplus.

(b) On written application, the banking commissioner may authorize investments in excess of a limitation of Subsection (a) if the banking commissioner concludes that:

(1) the excess investment is not precluded by other applicable law; and

(2) the safety and soundness of the requesting bank would not be adversely affected.

(c) For purposes of this section:

(1) "Agricultural credit corporation" means a company organized solely to make loans to farmers and ranchers for agricultural purposes, including the breeding, raising, fattening, or marketing of livestock.

(2) "Banker's bank" means a bank insured by the Federal Deposit Insurance Corporation or a bank holding company that owns or controls such an insured bank if:

(A) all equity securities of the bank or bank holding company, other than director's qualifying shares or shares issued under an employee compensation plan, are owned by depository institutions or depository institution holding companies; and

(B) the bank or bank holding company and all its subsidiaries are engaged exclusively in providing:

(i) services to or for other depository institutions, depository institution holding companies, and the directors, officers, and employees of other depository institutions and depository institution holding companies; and

(ii) correspondent banking services at the request of other depository institutions, depository institution holding companies, or their subsidiaries.

(3) "Bank service corporation" has the meaning assigned by the Bank Service Corporation Act (12 U.S.C. Section 1861 et seq.) or a successor to that Act.

(4) "Housing corporation" means a corporation organized under Title IX of the Housing and Urban Development Act of 1968 (42 U.S.C. Section 3931 et seq.), a partnership, limited partnership, or joint venture organized under Section 907(a) or (c) of that Act (42 U.S.C. Section 3937(a) or (c)), or a housing corporation organized under the laws of this state to engage in or finance low-income and moderate-income housing developments or projects.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2007, 80th Leg., R.S., Ch. 110 , Sec. 8, eff. September 1, 2007. Acts 2007, 80th Leg., R.S., Ch. 237 , Sec. 38, eff. September 1, 2007.