Deposits and savings are safe and sound, and it's business as usual as Tracy Collins Bank & Trust undergoes another ownership change - its third in six years.
But bank management and regulators say they believe this change will give the 104-year-old financial institution another chance to start growing again.As of last Friday, Tracy Collins was for sale again under a federally assisted bailout of its former owner, First RepublicBank Corp. in Dallas. Under the plan, Charlotte, N.C.-based NCNB Corp. acquired a 20 percent stake in the Texas holding corporation's banks and assets and an option to buy the remaining 80 percent over the next five years, now controlled by the Federal Deposit Insurance Corp.
Tracy Collins is now owned by a temporary "bridge bank" controlled by NCNB and the FDIC and officials said this latest switch will remove the Utah bank from the shadow of troubled First RepublicBank and give Tracy Collins the chance for the ownership stability it needs to expand.
Tracy Collins officials have been reluctant to comment on the latest development because they haven't been in formal contact with NCNB and they don't want to cause any unwarranted panic among depositors.
"RepublicBank did own Tracy and now somebody else does. But it will be business as usual," said the bank's attorney Daniel Berman.
Customers have no need to worry about the safety of their savings, the FDIC said, because Tracy's $200 million in deposits are federally insured to $100,000 per account, no matter who owns the bank.
"The affect on Tracy Collins is nil at this point," said FDIC official Carl Brancke in San Francisco. "Tracy is not broke and is a long way from being insolvent. The resolution of problems at RepublicBank should be good for Tracy."
Although NCNB has yet to formally contact management of Tracy Collins, the southern banking institution is aware of the Utah asset.
NCNB spokesman Ellison Clary told the Deseret News that it hasn't made a decision about Tracy Collins, but if it does take the Utah bank on, it is committed to improving it by infusing new capital and enthusiasm.
"Everything is going to work out for the better," he said.
And Tracy Collins could use a dose of capital and enthusiasm.
Tracy Collins, the seventh largest bank in Utah with $220 million in assets, has lacked stable ownership and has been surrounded by controversy for much of 1980s. RepublicBank picked up the century old Utah institution in March 1986 when Tracy Collins' former majority shareholder, local attorney John A. Dalhstrom, defaulted on a $15.5 million loan he took out in 1982 to buy controlling interest in Tracy Collins.
Dahlstrom had attempted to sell Tracy Collins to Zions Bankcorp, but that faltered when it was found that the sale's proceeds would not cover Dahlstrom's personal debts.
But RepublicBank's entry didn't improve things much, as Tracy Collins president Chuck Canfield described it: "We were a fly on an elephant's back." Like most institutions in Texas, RepublicBank's loan portfolio began to hemorrage and it couldn't pay much attention to its Utah holdings.
"Tracy may be a good sized bank in Utah, but it wasn't too important to a billion dollar institution bleeding from every wound," Brancke said, noting that RepublicBank's problems didn't help Tracy's marketability.
He said Tracy Collins has been far from insolvent, but RepublicBank's neglect, and Utah's sluggish economy, did cause the Utah bank's assets to shrink from $240 million to about $220 million.
Both Brancke and Canfield said the arrangement with NCNB, a $29 billion institution with banks in six southern states, should clear the way for a new stable owner, be it either NCNB or someone else.
RepublicBank has received offers for Tracy Collins, officials said, and now that RepublicBank's problems are removed those bids could be given more serious attention.