Chase Selling Its Last Small-Town Texas Bank To Focus on Profitable

Chase Manhattan Corp., continuing its effort to refocus on urban markets, is selling its smallest banking subsidiary to a Texas community bank.

Abilene-based First Financial Bankshares has agreed to buy Texas Commerce Bank San Angelo for an undisclosed cash price. The $180 million- asset Chase unit, which has two branches in central Texas, is affiliated with Chase's primary Texas subsidiary, Houston-based Texas Commerce Bank.

First Financial, which has $1.3 billion of assets, is paying a premium "slightly higher" than 8% for $62 million in loans and $155 million of deposits, said chief financial officer Curtis R. Harvey. The eight-bank holding company would also purchase Texas Commerce San Angelo's trust department, which manages $150 million of assets.

The acquisition would give First Financial "a dominant presence in the market," Mr. Harvey said. "We're probably fifth in the market now, but we'll jump to first."

The Abilene company, which already owns $95 million-asset Southwest Bank of San Angelo, plans to convert Southwest to a national bank and then merge the two San Angelo banks. The new subsidiary, which would have $250 million of assets, would be called San Angelo National Bank, reviving a name Texas Commerce abandoned after buying the bank 24 years ago.

The new bank would use the Texas Commerce main office as its headquarters and retain all 45 employees of Texas Commerce-San Angelo. The acquisition, which is subject to regulatory approval, is expected to close in the third quarter.

San Angelo, a city of about 84,000, is about 400 miles west of Houston. Texas Commerce entered the market in 1973 when it bought the old San Angelo National Bank.

Since buying Houston-based First City Banks and Ameritrust Texas in 1993, $21 billion-asset Texas Commerce Bank has sold off branch operations in five small Texas markets, concentrating its retail energies instead on eight large metropolitan areas.

The San Angelo sale would take Texas Commerce out of the last of its small-town markets. The bank concluded that cities would be more profitable because their more sophisticated customers would need more of Chase's wide array of products, said David Byford, a spokesman in Houston.

But Chase, the nation's largest banking company, would retain the Texas Commerce charter in San Angelo to avoid interrupting service to clients of Texas Commerce's cash-management service.

"This is not the beginning of a retrenching," he said. "San Angelo's a good market. But we found that there's a better value for us to invest in larger metropolitan areas."

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