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Security Pacific Bids for 2 Texas Banking Firms

June 13, 1989|DOUGLAS FRANTZ | Times Staff Writer

Security Pacific Corp. said Monday that it is bidding for two large, ailing Texas banking companies.

The Los Angeles banking company said it has submitted a proposal to the Federal Deposit Insurance Corp. to acquire the subsidiary banks of Texas American Bancshares in Ft. Worth and National Bancshares in San Antonio.

The proposal calls for creating a single 64-branch Texas bank through a government assistance package in which the FDIC would assume the risks of existing bad loans, said Robert H. Smith, president and chief executive of Security Pacific Bank, the company's principal subsidiary.

The two Texas banking companies have combined assets of about $7 billion. They had losses totaling $700 million in 1988, largely because of severe problems with real estate loans.

The FDIC, which regulates banks and insures deposits, has been seeking a single buyer for the two banks for more than a year. Monday was the deadline for submitting bids.

An FDIC spokesman in Washington said the agency is evaluating several proposals. The only other bidder identified by the spokesman was Minneapolis businessman Carl Pohlad, but some Texans are also reported to have submitted offers.

Several Weeks' Study

A team from Security Pacific has been examining the Texas banks for several weeks. Smith said in an interview that details of the offer depend on how the FDIC handles taking over the 64 separate banks that form the Texas holding companies.

Smith said, however, that existing bad loans would be switched to a separate new institution. The FDIC would provide funds to cover all losses, and Security Pacific would manage the "bad" bank's loan portfolio.

The arrangement would leave Security Pacific with a healthy operation that would focus on consumers and small and medium-sized businesses, Smith said.

"If the losses can be defined as someone else's, we will take the remaining portfolio," he said. "We think it can be very attractive, and we can compete very well. There is a lot of efficiency to be gained and a lot of creative products that can be provided."

Frank Anderson, a bank analyst at Stephens Inc., a regional brokerage firm in Little Rock, Ark., said, "Security Pacific can see, as others have, that Texas is the third-largest market in the country and won't stay depressed forever."

Pohlad agreed last year to take over the two Texas banks in a deal that required $475 million in FDIC assistance. But after examining the books, Pohlad found the banks to be in worse shape than he had expected and withdrew the offer. Sources have said he wants at least $875 million in federal assistance and other concessions.

Security Pacific, which owns banks in six Western states, made an unsuccessful offer for InterFirst, a big Dallas bank, two years ago. Security Pacific also had been considered a potential bidder for 20 MCorp banks in Texas that were taken over by regulators this year and put up for sale.

'Extension of California'

"This would be a natural extension of California," said Thomas H. Hanley, banking analyst with the New York investment firm of Salomon Bros. "Security Pacific is bidding on what in the old days were viewed as two very good banks."

The collapse of the Texas energy and real estate markets has reduced that state's banking industry to rubble. Out-of-state banks, including First Interstate of Los Angeles, have already acquired most of the other big Texas banks.

The sale of Texas American and National Bancshares, along with the pending sale of the 20 MCorp banks, will conclude the federal auction of big Texas banks.

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