Even if the line to buy failed banks grows longer, Tom C. Nichols and Don E. Cosby say they'll stay on it.

The veteran Texas bankers' Carlile Bancshares Inc. in Fort Worth announced this week that the government has granted it a shelf charter, which enables companies that do not already own banks to bid on failures. It was only the second such charter approved since the Office of the Comptroller of the Currency introduced the option in the fall. The first was granted to Gerald J. Ford, the Dallas billionaire — who just happens to be a former boss of Nichols and Cosby.

Regulators' efforts to attract private equity to the banking sector, coupled with the fact that the Federal Deposit Insurance Corp. has taken over some institutions without buyers in waiting, suggest there has been a scarcity of bidders for failed banks. It is too early to tell how much difference the availability of shelf charters will make.

Ford has yet to make a deal, but the OCC says it has two other shelf charter applications pending in New York, and industry advisers said there are more bidders in the pipeline.

Carlile's charter is good for 18 months without an extension. And Nichols and Cosby, who have lined up $50 million of capital to do as many as three deals over the next several years, say that if the right failed bank doesn't come along, they will look at deals for operating banks.

"We don't think of it as money burning a hole in our pocket," Cosby said.

Dan Bass, the managing director in the Houston office of Carson Medlin Co., said the best-looking failed banks have lots of interest from bidders, and that makes winning the bid more difficult.

"We have been helping a number of clients bidding on failed-bank deals," he said. "Conceptually it makes sense, but it is always harder than people think and there is a lot of competition. They aren't the only one looking to this strategy of buying banks and building from there."

Charles Greef, a managing partner in the Dallas office of Hunton & Williams LLP, worked on both Ford's and Carlile's shelf charter applications. He said several others are in the works and the process is becoming more streamlined.

"As the regulators process these and they get more comfortable with them and the applicants understand the process better, the time frames will go down," he said, noting the dense application is very similar to the work related to starting a bank from scratch. (Carlile's organizers said their application took six to eight months to get approved.)

Nichols and Cosby said that they are looking for targets with assets of $50 million to $500 million, primarily in New Mexico, Oklahoma and Texas, but that they will also consider banks in Arizona and Colorado.

The two bankers have worked together for 25 years, most recently at State National Bancshares Inc. of Fort Worth, a serial acquirer they started in 1996.

The $1.7 billion-asset State National did nine acquisitions between 1996 and 2005. It was sold to the Spanish bank Banco Bilbao Vizcaya Argentaria SA last year for $470 million.

Ford is the chairman of a private-equity firm, Flexpoint Ford LLC, that has raised nearly $1.3 billion. He is famous for having bought failed banks and thrifts in the last banking crisis, repaired them and later sold them for top dollar. In 1994, he led a group that bought the $15.5 billion-asset First Nationwide Bank. Over the next four years, First Nationwide merged with four other thrifts, including Golden State Bancorp, whose name it took. In 2002 Golden State was sold to Citigroup Inc. for about $5.2 billion.

Nichols joined the investor's Ford Bank Group, which later became First United Bank Group, in 1978, and was the company's president and chief operating officer by the time it was sold to Norwest Corp., for about three times book value, in 1994. (Norwest is now a part of Wells Fargo & Co.)

Cosby was Ford Bank Group's chief financial officer from 1981 to 1989. He also held the CFO title at State National, where Nichols was the chairman, president and chief executive.

In their 40 years as bankers, Nichols and Cosby said they have been involved in 35 acquisitions of commercial banks, including four failures acquired from the FDIC.

For the new venture, Nichols (whose middle name is Carlile) said he isn't shy about expanding into new territories without having a lending team already on board, because many bankers are looking for a new employer.

"There has been a number of consolidations," he said. "There is a lot of displacement of people in banking. This is probably going to be a time where recruiting talent could be less expensive than it was in the past. There are a lot of people out there who have been right-sized. That is going to be one of the benefits to going back in at this time."

Lenders from several big banks with internal problems or where FDIC-assisted deals were done are reportedly looking for new jobs.

For example, Wells Fargo's takeover of Wachovia Corp. — which had 229 offices in Texas, 16 in Arizona and 34 in Colorado — created opportunities to pick up lenders, several bankers have said.

Carlile's organizers are most familiar with Texas and New Mexico, because State National had 42 branches in those states, Nichols said, and the surrounding states are a natural extension.

"From a business standpoint, both Colorado and New Mexico have some similarities as far as the Rocky Mountains and what drives their economies," he said. "Same thing with Texas and Oklahoma. The types of businesses and economies in those areas are fairly similar as well."

Once a deal is closed, the plan is do about two more acquisitions within two years, Nichols said. Those acquisitions could be more failed banks, but wouldn't necessarily have to be, he said.

Eventually, he and Cosby plan to build the company to approximately the same size as State National.

Stephen Skaggs, the president of Bank Advisory Group, an investment bank in Austin, said that Carlile will have fewer competitors for failed banks in the $500 million asset range than it will for those in the $50 million range, and that the organizers stand a good chance of putting together another valuable banking operation.

"They have proven their ability to mesh a diverse, disparate organization," he said.

"So if anybody can do it, I would say they can do it. One of the criticisms of their last banking franchise is it wasn't very logical or it was a hodgepodge of banks put together. But they demonstrated their ability to make that work."

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