Park Cities Bank’s holding company, North Texas Bancshares Inc., filed for bankruptcy, citing soured commercial real-estate loans and declining natural gas prices.
The Dallas-based commercial and consumer bank had more than $396 million in total deposits, four branches and 71 employees as of Sept. 30, according to the filing. The holding company listed debt of $39.3 million, and a deposit account containing $363, in Chapter 11 documents filed today in U.S. Bankruptcy Court in Wilmington, Delaware.
As a result of the financial crisis in 2007 and 2008, the bank became under-capitalized and “the values of real estate declined in the bank’s market area, which negatively impacted the ability of the bank’s borrowers to repay loans, primarily with respect to commercial real estate related loans,” the company said in its filing.
The decline in natural gas prices also affected “certain energy related loans of the bank in a very adverse fashion,” the company said.
An affiliated holding company, North Texas Bancshares of Delaware Inc., also sought court protection.
The company said in court papers that it plans to sell all the stock in Park Cities Bank and other assets to Park Cities Financial Group Inc. for about $7.4 million in cash. The buyer would make a capital investment of as much as $40 million “in order to obtain certain required regulatory approvals,” as part of the sale closing.
The bank holding company will also seek court approval to borrow $750,000 in bankruptcy financing to help fund operations while it seeks approval of the sale.
Park Cities is a full-service bank that includes deposit-gathering and lending. It opened in Dallas in November 2000. The company owes unsecured creditors about $34 million on trust preferred securities, according to court papers. North Texas Bancshares owes Providence Bank about $5.2 million in secured debt.
The case is In re North Texas Bancshares of Delaware Inc., 13-12699, U.S. Bankruptcy Court, District of Delaware (Wilmington).