First Oklahoma Completes Merger with Landmark Unit/first National Center Is Main Asset Involved

Article excerpt

The historic First National Center, an Art Deco landmark building in downtown Oklahoma City since 1936, is the principal asset involved in the merger closed Thursday of First Oklahoma Bancorporation Inc. with FN Corp., a subsidiary of Landmark Land Development Corp., a national real estate developer based in Carmel, Calif.

Landmark is infusing $20 million in secured debt and equity capital and $12 million in the form of a first mortgage loan from a group of creditors, consisting of about 20 Oklahoma banks and savings and loan associations, to finance a major renovation of the First National Center, under the terms of the merger.

The merger was accompanied by the signing of a master settlement agreement with First Oklahoma's major creditors, restructuring $122.5 million of the firm's debt.

As a result of the merger, First Oklahoma becomes a subsidiary of Landmark.

First Oklahoma has been basically broke since July 14, 1986, when it lost its main subsidiary, the $1.6 billion-asset First National Bank & Trust Co. of Oklahoma City. The bank had once been Oklahoma's financial "Rock of Gibraltar," the largest bank in the state, until large losses - driven by problem energy loans - began accumulating.

The historic bank building now houses First Interstate Bank of Oklahoma NA, of Oklahoma City, which assumed the failed First National's good business base on July 14 and opened on July 15.

Under the master settlement agreement, creditors will receive various amounts of cash, plus participations in second and third mortgages on the First National Center, in addition to other instrements providing participations in the proceeds from various First Oklahoma assets.

The merger, which required First Oklahoma shareholders to take a $54.7 million loss, was the only way for the former bank holding company to escape bankruptcy, it was previously reported by James R. …