WASHINGTON - Taking a key step toward its long-awaited sale, First American Bankshares Inc. sent bidding information to prospective buyers last week, the company confirmed Monday.
The data gave details of the finances of First American's three largest subsidiaries, in Washington, Virginia, and Maryland.
The banks hold $4.9 billion in assets and will probably be sold together, said Paul Adams, an executive vice president.
Sale Ordered by Fed
First American sent the bid packages Friday to 25 or 30 possible investors, Mr. Adams said Monday in response to questions. The deadline for bids is Sept. 18 but may be extended, he added.
The Federal Reserve Board ordered the sale of the Washington-based company more than a year ago after discovering it had been illegally acquired by the Bank of Credit and Commerce International, which was subsequently implicated in a massive fraud.
The sale was mired in legal red tape until two months ago, when a federal court approved the appointment of former regulator Harry Albright as trustee to oversee the sale.
Mr. Adams said First American expects to complete the sale before next July, the deadline set by the Fed. He added that prospective bidders were likely to begin examining First American's books in October.
First American, which had $6.5 billion in assets on June 30, has already sold its $1.3 billion-asset Georgia bank and is peddling its $1.2 billion-asset New York subsidiary separately.
While First American was badly damaged by its BCCI ties and the real estate downturn, analysts say the Middle Atlantic banks, which have a total of 174 branches remain attractive.
They are First American Bank of Virginia, $2.5 billion in assets; First American Bank of Washington, $1.2 billion; and First American Bank of Maryland, $1.1 billion.
"Does [the franchise] have value? You bet it has value, but it has hiccups that come with it," said John Lyons, president of Lyons, Zomback & Ostrowski, a New York bank and thrift consulting firm. He said a portfolio of troubled real estate was among the problems.
Others analysts have criticized management for taking too long to sell the banks, and say they are losing value each day.
Possible suitors, according to industry analysts, include Core-States Financial Corp, Philadelphia; Mellon Bank Corp., Pittsburgh; First Union Corp., Charlotte, N.C.; and Allied Irish Banks, which operates First Maryland Bancorp in Baltimore.
George L. Davis, First American's president and chief executive, said last month the buyer would probably come from overseas.
First American's three area banks earned $6.8 million in the second quarter. Nonperforming assets at the Virginia bank were 10.5% of total assets in the second quarter; 9% at the Washington bank, and 8.5% in Maryland.
Overall, the company earned $8.2 million in the second quarter, snapping a string of eight consecutive quarterly losses.
It would have posted a loss if it waren't for the sale of its Georgia subsidiary and for gains on securities.