The Federal Reserve announced Friday that it had approved an application by First National Bank Group Inc. of Edinburg, Tex., to obtain up to 14.99% of the voting shares of Alamo Corp. of Texas.
First National is the holding company for the $2.6 billion-asset First National Bank, and Alamo is the holding company for the $284 million-asset Alamo Bank. The two companies compete against each other in the Brownsville and McAllen markets.
The Fed's decision came over the objection of Alamo's management, which claimed that First National did not have the resources to buy the stake and that attempting to do so would hurt its ability to support its own subsidiary. But the regulator said First National was well-capitalized and would remain so even after buying the Alamo shares.
First National pledged that it would seek regulators' permission before any future move to increase its stake in Alamo.
