Arizona Insurance

Direction: Good, the acquisition of Phoenix-minded savings bank, Mera Bank FSB, today was the first financial institution outside of Texas to invest in this state of the maroden savings and credit industry under a federal program.

A healthy, the acquisition of Phoenix-minded savings bank, Mera Bank FSB, today was the first financial institution outside of Texas to invest in this state of the maroden savings and credit to the industry under a federal program.

Several analysts have indicated that the transaction was crucial for the Federal Home Loan Bank Board, the Agency are not been successful so far in the acquisition of Out-of-National Capital in economies Texas-ravaged industry. Two previous acquisitions announced by the Bank in his office in southwestern plan has only $ 3.5 million in capital, all in an economy Houston institution.

”This shows that the South-West has few real terms of substance,’’said James Causey, Senior Vice President of Kaplan, Smith & Associates, an industry consulting firm in Washington. ”I did not find any better for the bank to do business on board.”5 years has doubled in size

Mera Bank, which has size over the past five years, control of two savings associations maroden, First Financial El Paso Federal Savings and Brownfield, West Texas in rural areas, with a collective $ 350 million assets. The transactions were least as many analysts expected, but the Bank Mera agreed to acquire at least $ 650 million in assets of one or more institutions by the end of September Texas.

The institution of Phoenix, $ 27.8 million in fresh capital in a new subsidiary, the Bank Mera Texas, on the assumption that you will succeed, $ 1 billion in assets, which ultimately be acquired by the Federal Savings and Loan Insurance Corporation Agency deposit guarantee for the nation’s savings and credit industry. The sum was invested $ 8.8 million today, $ 19 million, more mature, more if the second stage of treatment is finished.

Gene E. Rice, Chairman and Chief Executive, said Mera Bank hoped to earn more worried savings institutions in the FSLIC transactions, and perhaps negotiated independently offers of the Bank board.

Mera bank, with $ 6.4 billion in assets at the end of the first quarter, mainly through acquisitions. He earned $ 29.1 million in 1987, but lost $ 12.4 million this year’s first quarter, partly because of their problems in mortgage subsidiary of the company, “said Rice. Mera’s net banking income was worth $ 424.2 million at the end of March, or nearly 7 percent of total commitments.

The Pinnacle West Capital Corporation, the parent company of the largest public service in his country of origin, Arizona utilities, Mera Bank acquired late in the year 1986. Pinnacle West is also the largest companies based in Arizona.

Mr Rice said Mera Bank plan was to build their assets in Texas, according to its size in Arizona over the next 20 years. ”We believe that Texas has reached bottom and is on the way back,”he said, referring to the state of the economy, employment has gradually since early 1987 after the major reductions in the petroleum, real estate and building industry.

Mr Rice added that sei”ein right place for a good and solid financial institutions play a role in the reconstruction of Texas.”He added:”We are very pleased to be part of it. ”

Roger Martin, a member of the Bank board, told journalists in Dallas, that the Agency estimate their costs to cover losses in the two institutions today would be sold about $ 83 million over the next 10 years.

The F.S.L.I.C. Mera Bank Texas A 10-year note for $ 38.2 million in interest payable quarterly, on the average cost ways to achieve savings and associations in Texas. It also guarantees to cover losses on assets Delinquent the two institutions, totaling $ 99.1 million. Partners in a limited way

In a way Mera Bank and the FSLIC is a partner of the transaction announced today, a condition that makes possible the Agency again a part of their cost estimate of $ 83 million.