Magazine article American Banker

First American Optimistic on Sale: Predicts Deal with Foreign Buyer, Maybe within a Year

Magazine article American Banker

First American Optimistic on Sale: Predicts Deal with Foreign Buyer, Maybe within a Year

Article excerpt

Predicts Deal with Foreign Buyer, Maybe Within a Year

WASHINGTON - Ailing First American Bankshares Inc. could be sold within 12 months to a foreign buyer, according to George L. Davis, president and chief executive.

A sale by then would meet the U.S. government's target.

The buyer will probably come from "across the water," Mr. Davis said. Tuesday at a press conference, where he announced that the $6.5 billion-asset company had earned $8.2 million in the second quarter. The profit breaks a string of eight consecutive quarterly losses.

Mr. Davis said there were interested parties abroad as well as among domestic banks in the South and individual U.S. investors. He declined to name names. He recently hired Dillon Read Inc. to sell the company. No one is conducting due diligence at this point, he added.

Mr. Davis said the bank will put together a bidding book for potential buyers to review by fall.

Illegally Owned

The Federal Reserve ordered the sale of First American more than a year ago, after discovering that the Bank of Credit and Commerce International illegally owned the Washington-based company.

In May, First American's parent voted to place it in a trustee's hands to facilitate sale.

The second-quarter profit contrasts with a $59.3 million loss a year ago. For the first six months of the year, First American lost $23.6 million, compared to an $80 million loss in first-half 1991.

"I would not like to say we are out of the woods until we get a couple of [profitable] quarters back to back. …

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