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   [10,012A] In the Matter of The First National Bank of Canton, Canton, Texas, Docket No. 89-177kk (10-12-89).

   FDIC issues contingent waiver of assessment of liability. (This order has been terminated by order of the FDIC dated 5-29-90; see ¶15,125.)

   [.1] Assessment of Liability—Waiver—Contingent on Timely Sale

In the Matter of
THE FIRST NATIONAL BANK OF CANTON
CANTON, TEXAS
(Insured Depository Institution)
Related to
FIRST STATE BANK
PFLUGERVILLE, TEXAS
(Commonly Controlled Insured Depository Institution)
CONTINGENT WAIVER OF ASSESSMENT OF LIABILITY

FDIC-89-177kk

   WHEREAS, the Federal Deposit Insurance Corporation ("FDIC"), on August 24, 1989, pursuant to the provisions of section 206(a)(7) of the Financial Institution Reform, Recovery, and Enforcement Act of 1989 ("FIRREA"), Pub. L. No. 101-73, §206(a)(7), 103 Stat. 183, 201 (1989) (to be codified at 12 U.S.C. §1815(e)), and the FDIC's Rules of Practice and Procedures, 12 C.F.R. Part 308, issued a NOTICE OF ASSESSMENT OF LIABILITY, FINDINGS OF FACT AND CONCLUSIONS OF LAW, ORDER TO PAY, AND NOTICE OF HEARING ("ASSESSMENT OF LIABILITY"), which is attached hereto and made a part hereof, assessing a liability of $5,823,000 against The First National Bank of Canton, Canton, Texas ("Liable Institution"), for loss incurred or reasonably anticipated by the FDIC in connection with the default of First State Bank of Pflugerville, Pflugerville, Texas ("Bank"), a commonly controlled depository institution; and

   WHEREAS, the Liable Institution and the Bank are both controlled by TransTexas Bancshares, Inc. ("Holding Company"); and

   WHEREAS, in 1983, the Holding Company financed the purchase of the Bank through a note issued to First Republic Bank of Dallas, Texas ("RepublicBank"), in the approximate amount of $3.9 million which is secured by 100 percent of the stock of the Liable Institution ("Note"); and

   WHEREAS, NCNB Dallas, Texas ("NCNB"), subsequently purchased RepublicBank, and while the liability evidenced by the Note was not assumed by NCNB in its purchase of RepublicBank, the liability was assigned to a special account known as the Special Asset Bank ("SAB"), administered by NCNB on behalf of the FDIC; and

   WHEREAS, as a result of the foregoing transactions, the Holding Company remains liable to the SAB for the amount of the Note; and

   WHEREAS, the SAB is currently negotiating a sale of the Note, subject to a waiver of the ASSESSMENT OF LIABILITY by the FDIC; and

   WHEREAS, the ASSESSMENT OF LIABILITY would render the Bank technically insolvent; and

   WHEREAS, a waiver of the ASSESSMENT OF LIABILITY by the FDIC appears to be in the best interests of the Bank Insurance Fund maintained and administered by the FDIC.

   [.1] IT IS HEREBY ORDERED, pursuant to section 206(a)(7) of the FIRREA, Pub. L. No. 101-73, §206(a)(7), 103 Stat. 183, 203 (1989) (to be codified at 12 U.S.C. §1815(e)(5)), that the ASSESSMENT OF LIABILITY issued against the Liable Institution on August 24, 1989, is hereby waived, contingent upon the consummation of the sale of the Note within 120 days.

   By order of the Board of Directors.

   Dated at Washington, D.C., this 12th day of October, 1989.

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Last Updated 6/6/2003 legal@fdic.gov