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Friday, Sep. 25, 1998
Fed approves hostile takeover of Nueces National
Go-ahead from U.S. Department of Justice still required
By JEFFREY TOMICH
Staff WriterThe Federal Reserve Board has approved First National Bank Group's bid to buy a controlling interest in Corpus Christi-based Nueces National Bank.
All that's required now for the Edinburg bank holding company to complete its $3.4 million hostile takeover bid, launched three months ago, is approval from the U.S. Department of Justice.
Steve Rodriguez, a vice president of First National and head of the bank's Corpus Christi branch, said that isn't expected until mid-October. He wouldn't discuss the bank's plans.
Officials for the banks met for the first time in Corpus Christi last week.
Amador C. Garcia, a Corpus Christi attorney and Nueces National board member, said First National requested the meeting to discuss the banks' histories, policies and goals.
Garcia declined to discuss how Nueces National board members might challenge the takeover. ``I think we have some options still, and those are things we need to discuss among ourselves,'' he said.
Acquiring Nueces National would give First National total local deposits of $34.1 million, making it the 16th-largest deposit-taking institution in Corpus Christi in market share.
Nueces National is the city's only locally owned, Hispanic-owned bank - a fact that has been the rallying cry of the half-dozen board members who have fought the takeover attempt.
In filings with regulators, First National said it will maintain Nueces National as a separately chartered national bank and make no changes in senior management. It also said it won't significantly change any banking services or policies.
First National said it's well-equipped to serve Corpus Christi's Hispanic community and noted that its South Texas service area is predominantly Hispanic, that a majority of its employees are Hispanic and that the employees own a substantial majority of the bank.
The bank launched its hostile takeover attempt with a June 24 letter offering Nueces National's 200-plus shareholders $80 per share for up to 51 percent of the bank's 90,900 outstanding shares.
It's seeking to acquire 46 percent of Nueces National's stock to go along with the 5 percent it already owned.
The bank said it will finance the acquisition using $1.5 million from the sale of 18,275 shares of its stock, plus $1.9 million borrowed under a $5 million line of credit from Texas State Bank in McAllen.
First National's takeover attempt caught most of Nueces National's nine-member board by surprise. Six directors fought the buyout plan and urged shareholders to rebuff First National's tender offer.
They claimed that the change in ownership would leave Corpus Christi's Hispanic community, a large share of the bank's customer base, without an ownership voice.
In approving the bank's application, however, the Fed cited First National's Community Reinvestment Act rating from the Office of the Comptroller of the Currency in December 1996, describing the rating as outstanding.
``Examiners determined that the bank extended a substantial majority of its loans within its assessment area and that the bank's credit was well distributed to borrowers of different income levels and businesses of different sizes,'' the agency said in a news release.
First National quietly moved into Corpus Christi earlier this year, opening a branch at 10935 Leopard St. in the Annaville area. The branch had less than $1 million in deposits when the bank filed its application with the Fed in July.
First National operates 13 branches in South Texas, with most concentrated in the Rio Grande Valley. The bank employs about 220 people and has assets of $310 million.
Nueces National, founded 25 years ago by seven Hispanic businessmen, operates two bank offices, including its headquarters at 1434 S. Port Ave. It opened a branch in south Corpus Christi last year.
Staff writer Jeffrey Tomich can be reached at 886-4316 or by e-mail at tomichj@scripps.comPost 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