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Subject: 8 Firms Want Twice-Failed First City Bank Finance: Regulators seized it again last week. That means it can be
Date: Wed, 4 Nov 92 06:47:12 EST
Message-ID: <money89.1992Nov4.064712@AmeriCast.com>

HEADLINE: 8 Firms Want Twice-Failed First City Bank Finance: Regulators seized it again last week. That means it can be
Publication Date: Tuesday November 3, 1992
BYLINE: 

For at least a year, bankers have been waiting for ailing First
City Bancorp to be closed by the U.S. government so they could buy it at
less risk. Now the question is, to which victor belongs the spoils?

   Regulators shut First City late Friday, the second bailout for the
banking company.

   The FDIC already has plowed almost $1 billion into the First City
banking system since 1988, when it was bailed out the first time.

   Regulators estimated that the new action will cost the federal
government another $500 million--making it by one account the
third-largest banking bailout in history.

   "The original bailout was no good," PaineWebber Inc.'s Lawrence Cohn
said. "They never got enough money going in from the government, which
didn't realize how bad the asset quality was. Then the new management
compounded the problems by being aggressive lenders outside their
market."

   Now that the government has taken control, there are at least eight
contenders for First City, with Chemical Banking Corp. topping most
analysts' lists.

   First Interstate Bancorp, BankAmerica Corp., First Union Corp.,
Nationsbank Corp., Comerica Inc., Norwest Corp. and Banc One Corp. are
also possible buyers for First City, with its $8.8 billion in assets.

   First City spent much of 1992 trying to sell itself with limited
government protection against loan losses. Bankers were not interested in
the terms.

   "In-market acquirers--Chemical, First Interstate, Banc One and
Nationsbank--are in the best position to buy First City, because they can
get the most cost savings," Cohn said. "Banks will be standing in line to
bid."

   Cohn would not rule out BankAmerica, "which has made no secret of the
fact" that it would like to have First City's commercial banking
franchise.


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