Surety Bank in Fort Worth, which has been riddled with troubles in recent years, has a definitive agreement to sell itself to First Graham Bancorp Inc. for about $8.7 million, or $3 million above equity.
An earlier deal to sell the $37 million-asset Surety to Pax Holdings Inc., a Fort Worth company formed for the transaction, fell apart in May. A month later the Office of the Comptroller of Currency banned the chief executive officer of Surety’s holding company, Surety Capital Corp., from banking for "unsafe and unsound banking practices." In December the holding company filed for bankruptcy protection to pave the way for a sale.
In 2007 Surety Bank lost about $1 million. In 2005 and 2006 it earned a total of $648,000, but before that it had not made money since 1999, losing $9.3 million from 2000 to 2004.
Data released last week from Carson Medlin Co. shows that even though the price is 1.5 times book value, Surety’s owners would receive a higher price than what other money-losing Texas banks with less than $50 million of assets drew from 2005 and February.
The price represented 23.8% of assets, while the median for deals for other banks in that group was 17.2%, Carson Medlin said. Surety’s ratio of price to deposits was 28.2%, compared with the median of 18.9%
"I’m impressed they got the price they got, given all the negative press," said Dan Bass, the managing director in Carson Medlin’s Houston office.
Surety would not discuss the deal, and First Graham did not return calls seeking comment.
The deal was reached early last month, according to Carson Medlin, and is expected to close by midyear.
