Citizens National Bank of Texas wants to go public while the market for bank stocks is hot, so it can get into the acquisition game.

In fact the $273 million-asset bank is in such a hurry to raise $10 million that it's not stopping to form a holding company first.

John T. Unger, an attorney with Snell & Smith, Houston, said the Bellaire-based bank feared it would miss out on the bull market if it took the time-possibly a few months-to form a holding company.

"Community bank stocks are doing well right now, and you never know when the securities market is going to change," he said.

The 14-year-old bank would use the new capital to buy or build free- standing branches in Houston's north and northwest suburbs, according to Citizens National's registration statement filed with the Office of the Comptroller of the Currency.

But Ralph Williams, president of the five-branch bank, said Citizens National has no expansion deals in the works.

Citizens National's decision to forego the holding company step before an initial public offering does have its drawbacks, said Samuel J. Malizia, an attorney at Malizia, Spidi, Sloane & Fisch in Washington.

Mr. Malizia said other banks go public without first forming a holding company because it's a quick and inexpensive way to raise capital in a favorable stock market. The public bank can always go back later, usually at an annual shareholders meeting, and vote to form a holding company, he said.

"The market's been receptive to this kind of offering," Mr. Malizia said.

Citizens National's original private shareholders also should do well when the bank goes public, Mr. Malizia said. A bank's initial public stock price is usually higher than when the original investors bought in. And after an IPO, the investors' stakes are more liquid, making it easier for them to sell their shares.

On the downside, however, publicly held national banks are limited by their bank charters. Mr. Malizia said the "antiquated" charters do not address common public company issues such as scheduling shareholder meetings, naming directors or allowing for anti-take-over provisions.

"The bank gets a canned, very old-fashioned charter," he said. "You can't put those shark repellents into a bank charter."

Furthermore, should Citizens National complete an acquisition as a public company, the acquired bank would have to be classified as a branch under the Citizens National's charter.

Should the bank go public as planned, Citizens National would continue to be regulated by the Office of the Comptroller of the Currency and would not be monitored by the Securities and Exchange Commission.

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