Magazine article American Banker

New Management Faces Old Problem of Keeping First Oklahoma in Business

Magazine article American Banker

New Management Faces Old Problem of Keeping First Oklahoma in Business

Article excerpt

New Management Faces Old Prolblem Of Keeping First Oklahoma in Business

A dramatically smaller First Oklahoma Bancorp. has a new management facing the company's old problem--whether it can stay in business.

First Oklahoma was put in this increasingly tenuous position following the declared insolvency Monday of the company's principal banking subsidiary, the First National Bank and Trust Company of Oklahoma City.

On Tuesday, one day after First National was closed and then reopened as a subsidiary of Los Angeles-based First Interstate Bancorp, First Oklahoma dashed out a press release stating that the holding company "remains in existence and its stockholders are still owners of that organization.' But the company was without leadership as its officers resigned to assume new duties at First Interstate Bank of Oklahoma City, the newly chartered bank that succeeded First National.

Not until Wednesday did First Oklahoma hire a new president. His identity wasn't immediately released.

The new president faces a difficult future. The closing of the $1.6 billion-asset First National left its once proud and mighty parent company with precious few assets--worth an estimated $80 million to $100 million.

Those assets include the 31-story, 1930s building that housed the former First National, a "material amount' of cash, and a trust company operated through the former bank, said Gary Fuller, an attorney with McAffee & Taft, an Oklahoma City-based law firm hired about a month ago by the former First National management.

The company said its ability to repay its debts may depend on whether it can continue as an ongoing concern. The trust company, for example, operated through the bank subsidiary, but the holding company might be able to get some value out of the trust company's charter, said Mr. Fuller.

Any value left in First Oklahoma will be sought by a group of nine banks owed some $55 million by First Oklahoma. …

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