Word: seafirst
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...billion in case the bank's Latin American debtors start defaulting on $7.3 billion in loans. This dose of preventive medicine, prompted by archrival Citicorp's similar move, may eventually strengthen BankAmerica. But it could force the company to sell off some major assets, including the Seattle-based Seafirst bank, acquired...
...emergency meetings through telephone conference calls. Then Ferris convened a 3 p.m. session last Tuesday at the Manhattan offices of Morgan Stanley, one of the airline's investment bankers. Among the 17 directors present were Ferris, Olson, former Secretary of Commerce Juanita Kreps, Chairman Richard Cooley of Seattle's Seafirst banking company, and Charles Luce, former chairman of New York City's Consolidated Edison power company. The directors were ready for decisive action, and before the meeting had even started, Luce told Chairman Ferris that his job was on the line...
...problems at Seafirst apparently run deeper than Cooley realized when he became chairman on Jan. 3. On Sept. 30 the bank had $134 million in loan-loss reserves, mostly to cover losses on energy loans acquired from Penn Square Bank, the notorious Oklahoma City institution that failed last July. But last week Seafirst announced that it had added $125 million to the reserve in the fourth quarter alone. Notes a Seattle banker: "Their problems go far beyond Penn Square...
...Seafirst revealed that its portfolio contains $800 million in problem, or nonperforming, loans that have not been written off, a figure that is some $200 million more than analysts had thought. The trouble spots include a $40 million credit to Mexico's bankrupt Grupo Industrial Alfa, the largest private firm in Latin America. The so-called nonperforming loans amount to nearly 8% of Seafirst's $10 billion in total assets; the banking industry average is about 3%. What is more, the loans exceed by 7% the sum of the bank's shareholders' equity and loss reserves...
...Seafirst began seeking a bailout about two weeks ago. Cooley first called Alfred Brittain III, chairman of Bankers Trust in New York and a longtime friend, to ask him to put together a two-year loan with other lenders. That effort fell through, but telephone lines were soon buzzing between banks over a different arrangement. The terms will allow Seafirst to draw on the $1.5 billion for 24-hr, loans if it loses other sources of funding and needs money. The participating banks include BankAmerica, Citibank, Chase Manhattan and Continental Illinois...