Banking: Down and Out in Dallas

Down and Out in Dallas

When petroleum was still a pricey commodity, Texas oil barons had little trouble getting loans. But as the value of oil has plummeted in recent months, the state's banks have watched in alarm while many borrowers were unable to make payments. Last week InterFirst of Dallas, the third- largest Texas bank holding company, said that it expects second-quarter loan-related losses of at least $260 million.

Its problems may stem partly from questionable policies. One of InterFirst's subsidiary banks gave an $80 million loan to former Director Edwin Cox Jr., a wealthy Texas rancher. Cox resigned last month after the value of...

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