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Thursday, Jul. 23, 1998
First National loan record `outstanding'
Nueces National group continuing to fight takeover
By JEFFREY TOMICH
Staff WriterThe company trying to take over Nueces National Bank has a strong record of serving low- to moderate-income consumers and small businesses, according to federal regulators.
That's contrary to warnings raised by some Nueces National directors who are fighting the hostile takeover attempt.
Edinburg-based First National Bank does a better-than-average job meeting customers' credit needs, including those in low and moderate-income neighborhoods, according to its most recent Community Reinvestment Act evaluations.
The bank's owner, First National Bank Group Inc., based in the same border town, filed papers with federal regulators July 7 as part of a hostile takeover attempt for Nueces National, Corpus Christi's lone minority-owned bank.
First National's last two Community Reinvestment Act evaluations on file with the Office of the Comptroller of the Currency show that the bank has a strong record of lending to individuals and businesses.
The bank's 1996 evaluation states: ``First National Bank has exhibited an excellent record of serving the credit needs of the most economically disadvantaged areas of its assessment area (Hidalgo County and the city of Brownsville), low income individuals and very small businesses.''
The bank was rated outstanding by the OCC in December 1996 -- a notch better than Nueces National's satisfactory rating for its April 1997 evaluation.
Amador C. Garcia, a Corpus Christi attorney and director of Nueces Bank, said the ratings don't guarantee that First National's holding company will have the same commitment to serving small businesses and other customers in Corpus Christi.
``Even though they may have a good record . . . we're an established bank with an established record and customer base and I don't think anyone can do it better than we've done it here,'' said Garcia, a spokesman for the group fighting the takeover.
Steve Rodriguez, president of First National's Corpus Christi branch, described the two banks as comparable in commitment to the community. He referred other questions to First National President Robert Gandy III, who couldn't be reached Wednesday.
In its application to the Federal Reserve, First National said it intends to continue serving as a full-service bank in Corpus Christi, maintaining the same services, interest rates and loan portfolio.
The banks' histories of lending to small businesses are part of their Community Reinvestment Act evaluation.
Of 118 commercial loans analyzed by the OCC in First National's December 1996 evaluation, 55 percent went to businesses with less than $100,000 in annual revenues and 83 percent went to businesses with revenues less than $1 million.
According to an April 1997 evaluation by the OCC, Nueces National made 28 percent of business loans to firms with annual revenues of less than $100,000 and 84 percent went to businesses with revenues under $1 million.
The Community Reinvestment rating is one of many factors that will be considered by regulators evaluating First National's proposed acquisition of Nueces National's stock.
The OCC's last report says First National has ``an excellent record of serving the credit needs of the most economically disadvantaged areas . . . low income individuals and very small businesses.''
The report on First National states the bank does a good job of distributing credit to borrowers of different income levels and businesses of different sizes. Specifically, it shows:
-- Of 571 residential loans, 35 percent went to low- and moderate-income families, according to the 1996 Home Mortgage Disclosure Act Loan Application Register, which tracks home purchase, home improvement, refinancing and multifamily housing loans.
-- The bank made $2 million in loans so families could purchase vacant lots, including loans for low- to moderate-income families to buy lots and slowly build their own homes, a common practice among low-income families in the Rio Grande Valley.
-- The bank has gone beyond its depository contract agreement to assist financially challenged municipalities such as the cities of Elsa and Edcouch on the Texas-Mexico border.
-- The bank extended 10 loans and commitments totaling more than $3 million to help revitalize downtown Edinburg.
-- The president of one of its branches has co-hosted a Spanish radio program providing advice on how to obtain credit and services at banks or other financial institutions.
The Fed's review of First National's $3.4 million bid to buy Nueces is expected to take 60 to 90 days to complete.
Garcia said Nueces has mailed a form letter urging customers to write letters to the Fed protesting the takeover plan. The remaining board members have also hired an attorney to represent them.
Garcia said it's not just bank customers whose interest he's trying to protect.
Shareholders who chose not to sell or didn't meet First National's July 14 tender offer deadline could also lose out if the deal goes through, he said.Post your comments about local news eventsFront Page || Main Index || News || Business || Texas || South Texas Outdoors || Birdwatching || Sports || Entertainment || Selena || Education || South Texas Attractions || World Wide Web