It appears that southeastern superregional NationsBank Corp. will be growing again - only this time against its wishes.
A Georgia Supreme Court ruling this month let stand a lower-court decision forcing NationsBank to purchase First Federal Savings Bank of Brunswick, Ga., six years after the then friendly companies first decided on the deal.
NationsBank asked the high court in December 1994 to reconsider a superior-court decision that required it to follow through on a 1988 merger agreement with the $240 million thrift.
The agreement was made by C&S/Sovran Corp., which became part of NationsBank in 1991.
But the court returned a decision on Dec. 4 denying the motion. NationsBank then asked the Georgia Supreme Court for a reconsideration, which was denied on Dec. 19.
Ben T. Slade 3d, president and chairman of First Federal, said a jury trial would be held sometime next year to determine a closing date for the transaction, which will set the final stock-exchange ratio. First Federal has insisted that the date should be based on stock prices as of June 1991.
Mr. Slade said he thought the case would go no further.
"I don't see how they can appeal it anymore," Mr. Slade said. "There aren't any issues that warrant consideration by the U.S. Supreme Court."
In December 1994, a Glynn County (Ga.) superior court ordered $182 billion-asset NationsBank to honor the merger agreement, which was reached six years earlier but never consummated.
The court ordered NationsBank to make on offer within 60 days of the December 1994 ruling, but NationsBank appealed the case to Georgia's Supreme Court.
NationsBank spokeswoman Julie Turner said the superregional had always intended to complete the transaction with First Federal. She said the dispute between the two institutions rested with a disagreement over which date the exchange of stock should be based upon.
Ms. Turner said she was uncertain why NationsBank, if it intended to execute the transaction, had appealed the lower court's decision forcing it to buy First Federal.
The deal was originally struck between First Federal and Citizens and Southern Corp. Citizens and Southern Corp. later merged with Sovran Financial Corp. of Virginia. The resulting C&S/Sovran Corp. was in turn taken over by NCNB Corp. in 1991, to form NationsBank. First Federal said C&S/Sovran Corp. ultimately refused to complete the merger in light of the deal with NCNB.
"They tried to say we didn't have a contract because our shareholders never voted on the deal," Mr. Slade said. "But when they breached the contract, it prevented our shareholders from voting."
The Brunswick thrift had tried but failed to halt the merger of NCNB Corp. and C&S/Sovran Corp. until the contract dispute was resolved.
"We feel this is a validation of position," Mr. Slade said of the Georgia Supreme Court decision. "It's cost us more than $1 million, but we didn't feel we had any choice but to pursue the case. Our stockholders expected us to."
"What the judge ordered in December 1994 was that NationsBank was to present an offer to our bank's stockholders," he added. "They didn't, instead appealing the case to the Georgia Supreme Court."
