BANKING: A $4 Billion Texas Bailout

A $4 Billion Texas Bailout

The sound of collapsing banks has echoed through the depressed Texas oil fields for two years now, but the crash heard last week was the loudest of all. Federal regulators disclosed that they would pledge $4 billion to rescue Dallas-based First RepublicBank (assets: $32.5 billion), the state's largest banking firm. The initial federal commitment is second in size only to the $4.5 billion bailout of Chicago's Continental Illinois in 1984.

As part of the plan, management of First RepublicBank will be taken over by NCNB Corp., a Charlotte, N.C.-based institution (assets: $28.6 billion) that won a bidding war with several other...

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