DALLAS -- State and federal banking regulators closed four Texas banks Thursday in Fort Worth, San Antonio, Troup and Pflugerville, increasing to 108 the number of bank failures in the state during 1989.
Texas Banking Commissioner Kenneth Littlefield closed three state-chartered banks -- First State Bank of Pflugerville, which had deposits of about $32 million; Troup Bank & Trust Co. of Troup, which had deposits of $24 million; and Summit Bank of San Antonio, which had deposits of $19 million.
The comptroller of the currency's office in Washington, D.C., closed Park Central Bank of Fort Worth.
The four closed banks, which bring to 151 the number of failures nationwide during 1989, will reopen Friday under new ownership.
First State Bank of Pflugerville will become a branch of Hibernia National Bank in Texas, a newly chartered subsidiary of Hibernia Corp. of New Orleans. Hibernia will assume about $32 million in 5,300 deposit accounts and will buy about $8.8 million in the failed bank's assets.
Littlefield said the 56-year-old Pflugerville bank failed due to 'loan losses, writedown of other real estate and heavy volume of non-performing assets.'
'Loan losses were attributed to weak underwriting standards of previous management, poor committee functions and the depressed local real estate market,' he said.
The Troup bank will reopen as a branch of First National Bank of Jacksonville. The Jacksonville bank will assume about $27 million in 3,500 deposit accounts and will buy about $21 million of the failed bank's assets.
Littlefield said loan losses traced to 'liberal lending practices, poor credit administration and numerous violations of state and federal banking laws and regulations' caused the Troup bank to become insolvent.
'Loans to insiders, members of the bank's board of directors and relatives were also found to be of subquality and contributed heavily to the losses ...' he said.
Summit Bank in San Antonio will reopen Friday as a branch of Frost National Bank. Frost will assume about $17.9 milion in 4,100 deposit accounts, not including $2.2 million in 23 accounts that exceeded the federal insurance level of $100,000.
Holders of those accounts will share proportionately with other creditors in proceeds from liquidation of the failed bank's assets.
Littlefield said Summit Bank, organized in 1973, was found insolvent due to 'continued loan losses and increased volume of non-performing loans.'