Suburban Bankshares, Lake Worth, Ha., said it has broken off a planned merger with Long Island-based Command Credit Corp., a deal that was supposed to have cured Suburban's ongoing capital problems.

In a written statement, Suburban chairman Dean Vegosen said the $177 million-asset bank will be able to pursue a number of capital alternatives from organizations that have expressed interest in Suburban as a result of its continuing improvements in all areas of operations."

While profitable, Suburban has had credit quality problems and a core capital base that equaled just 3.26% of its assets on March 31. An outstanding cease-and-desist order from the Federal Deposit Insurance Corp. calls on the bank to raise it to 6%.

The Command Credit merger would have contributed $4 million of the $5 million Suburban needs to comply with the order.

Secured Card Issuer

Command Credit is a national issuer of secured credit cards, usually issued to customers who have been rejected by traditional credit card issuers and secured by a cash deposit equal to the credit line.

While losing money, Command has been very successful at raising capital since its inception five years ago.

Without detailing the reasons for calling off the merger, Mr. Vegosen said that closing the deal proved impossible

"Over the recent past, it has become obvious to both Suburban and Command Credit that a timely merger between the two parties was going to be extremely challenging and it was in the best interest of both parties to pursue opportunities that would expeditiously enhance their respective financial positions," Mr. Vegosen said.

Stock Purchase

Instead of. merging, however, Command Credit bought about 7% of Suburban's Class A stock for an undisclosed price.

In addition, Suburban said it had signed an agreement with Command Credit under which the company will become a marketer and servicer for Suburban's credit card portfolio.

Change in Strategy

The statement from Suburban said the deal was a result of a change in Command's strategy.

"The board of directors of Command has decided to pursue an equity interest in a variety of banks in several regions of the country rather than being confined to a single area," the statement said.

Command Credit officials could not be reached.

This was Command's second attempt at buying a bank. In 1991, it agreed to purchase Republic Bancorp of Phoenix, but the deal was never approved by federal regulators.

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