|Copyright:||(c) 2010 SourceMedia Inc , Source: The Financial Times Limited|
|Source:||Financial Times Limited|
In August of last year First State hired an investment bank. Experts have long touted the franchise’s attractiveness, but it has yet to find a buyer willing to take on its troubles. Though recapitalization is an option, experts said buzzards are likely starting to circle the biggest bank still based in the Land of Enchantment, hoping for a possible deal brokered by the
“For the right buyer, it could be a really good opportunity to acquire a good franchise across the markets of
“The question of ‘who’ runs the list of everyone from who is there, who is nearby, and who wants to start a franchise in the West,” Blaylock said.
First State is one of many struggling multibillion-asset community banks that have made good-faith efforts to survive by shrinking assets. First State bought itself some time, but deteriorating asset quality has remained an issue. As capital vanishes, its options seem to be running out.
“They continue to live and they have done enough to continue to exist,” said
First State did not return calls for comment. During the height of the last decade, First State was a consolidator, making three acquisitions and increasing its assets by 65% from 2006 to 2009.
Last year it sold 20 Colorado branches, including
Shrinking the balance sheet has provided some relief, but losses largely tied to construction loans continue to erode capital. At
In September of this year First State issued a statement indicating that it had held talks for a possible recapitalization. In its third-quarter filing, it expressed doubt in an ability to continue as a going concern. “There can be no assurance that the bank will be successful in raising capital,” the filing said.
Analysts said would-be investors have likely been struggling to get comfortable with the portfolio. At
“Someone should have stepped in by now,” Davis said.
Blaylock said it is premature to rule out a recapitalization. “Getting everyone on the same page can take months,” he said.
Observers said there should be ample interest, given the attractiveness of the company’s 7.6% deposit share in
“They are very well regarded as a depository institution,” said
That hasn’t been lost on potential buyers. Several investment bankers and possible candidates declined to comment due to interest in the bank. That’s not surprising, said
“Buyers want something that is going to take them somewhere competitively when they get it,” said Buerger, who is not familiar with First State specifically.