Chase Texas Unit Faces Another Suit
A Chase Manhattan Corp. subsidiary has been hit with its second lawsuit in a month over loans to a mortgage company that went bankrupt.Chase Bank of Texas NA was "grossly negligent" in monitoring a $25 million line of credit that it extended to Southfield, Mich.-based Mortgage Corporation of America in November 1998 for a warehouse, said Coastal Bancorp. in a suit filed Jan. 12.
Coastal, a $3 billion-asset Houston thrift holding company, bought a 40% participation in the loan, but Mortgage Corporation of America defaulted when it filed for bankruptcy protection in January 1999.
Mortgage Corporation of America is liquidating its assets, yet Coastal has collected only a little more than $1 million of the $10 million it is owed. Coastal said it would take a fourth-quarter charge of $3.5 million to write off the remainder of the loan that was not recovered and was not covered by loan-loss reserves.
"It's unfortunate this happened in the fourth quarter, because our performance has been very good," said Manuel J. Mehos, Coastal's chairman and chief executive officer.
"Our fee income is growing, and we're happy with our core performance. We have a lot of momentum."
In mid-December, Guaranty Federal Bank of Dallas slapped Chase with a suit over a $185 million loan, of which Guaranty Federal committed $25 million.
A Chase Bank of Texas official declined to discuss either lawsuit.
- Craig Woker
BancFirst Ohio Buying Local Thrift for $33M
An eastern Ohio bank said it plans to buy a thrift on the other side of the state for $33.3 million of stock and cash.BancFirst Ohio Corp. of Zanesville said last week that it will exchange 0.444 shares of its common stock and $6.80 in cash for each outstanding share of Milton Federal Financial Corp. That is a 33.2% premium to Milton's equity value.
The buyer has $1.2 billion assets and owns First National Bank of Zanesville.
Milton Federal has $256.7 million of assets and owns Milton Federal Savings Bank in West Milton.
BancFirst said the deal is expected to be completed in the second quarter and should improve its per-share earnings within a year.
Gary N. Fields, BancFirst's president and chief executive officer, said he expects Milton to help his company expand in high-growth markets along Interstate 70, which slices east to west through central Ohio, past such cities as Dayton and Columbus.
- Craig Woker
Ill. Thrift to Acquire Bank for $6.8 Million
A central Illinois thrift said it plans to buy a smaller nearby bank for $6.8 million in cash.Jacksonville Savings Bank said it will pay $412.12 for each share of Chapin State Bank. The price works out to 173.7% of book value; the transaction should close in the second quarter, Jacksonville said.
The buyer has $169.2 million of assets and the seller $52.3 million. Chapin, Ill., is about 10 miles west of Jacksonville.
Jacksonville Savings plans to form a trust and agricultural lending subsidiary to be headed by John Williams, Chapin Savings' president and chief executive. Chapin Savings already has a trust and agricultural division.
Jacksonville Savings also said it plans to continue operating both of Chapin Savings' facilities, retain all of its personnel, and add two Chapin directors to its own board.
- Craig Woker