A Texas banking company that had planned to sell more stock to finance an acquisition has opted to fund the deal traditionally, through borrowing.

Hurst-based Surety Capital Corp., which announced plans in October to acquire Texstar National Bank of Universal City, decided to change course after it posted a $5 million loss in the fourth quarter and a $3.5 million loss for the year. Selling additional shares would only further dilute the bank's stock-which fell 58 cents per share during 1997-Surety officials said.

Surety, with $176.8 million of assets, had agreed to pay about $9.5 million for Texstar, which has $74 million of assets. The company is negotiating with lenders to help finance the acquisition.

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