Magazine article American Banker

Finance Firm Purchasing Troubled Bank in N. Carolina, Eyeing More Southeast Deals

Magazine article American Banker

Finance Firm Purchasing Troubled Bank in N. Carolina, Eyeing More Southeast Deals

Article excerpt

An Atlanta financing company is buying a troubled minority-owned bank in North Carolina and plans to expand it.

Omni Financial Services Inc. last month agreed to buy $34.6 million-asset United National Bank of Fayetteville, which has come under regulatory scrutiny because of its lending practices. The buyer and seller are both privately held.

The deal is unusual in that banks buy financing companies more often than financing companies buy banks.

Stephen Klein, Omni's chief executive, would not reveal specifics of the agreement but said the purchase should close by March 31. Officials at United did not return calls.

United National and Omni both serve low-income minority communities; Omni provides real estate financing in such communities.

"We believe that because of the type of business we're in, we could rehabilitate the bank and make an impact in the community," Mr. Klein said.

Rehabilitating United may be tough. The bank has been losing money for three years, and its assets have shrunk by 25% since 1995. …

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