NCNB Buyout of U.S. Share in Texas Bank Comes Early

NCNB Corp. on Wednesday bought out the federal government’s 51% interest in NCNB Texas National Bank, completing the $1.32-billion purchase of the institution created in the nation’s costliest bank failure.

The buyout, announced 10 days ago, comes four years ahead of a timetable established last year when NCNB was selected to manage the 40 failed banks of First RepublicBank Corp.

In that deal, Charlotte, N.C.-based NCNB also got a five-year option to buy all of Texas’ largest bank holding company, which has $27.9 billion in assets. NCNB changed the company’s name to NCNB Texas at that time.

With the acquisition, NCNB becomes the nation’s ninth-largest commercial bank, with about $60 billion in assets and $43.2 billion in deposits.

NCNB paid $210 million for a 20% share of NCNB Texas on Nov. 22, then accelerated its plans, paying $310 million for an additional 29% on April 28 and $800 million for the remaining shares Wednesday.

The price gives a $270-million profit to the Federal Deposit Insurance Corp., which provided $840 million of the initial recapitalization of First RepublicBank. FDIC is also financing part of Wednesday’s purchase through $320 million in a one-year, interest-bearing note.

In all, the government has estimated that the First RepublicBank rescue will cost $3 billion.

Improved profits at the Texas institution led to NCNB’s decision to move up its purchase, the bank said last month. NCNB Texas earned $63.1 million in the second quarter, with $28.8 million going to NCNB Corp.