Wells Fargo Examines Texas Bank’s Books

SAN FRANCISCO — Wells Fargo & Co., considering whether to bid on ailing First RepublicBank Corp., reviewed the books of Texas’ largest bank Thursday while owners of the Dallas-based company’s bonds sought to get their money back.

Wells Fargo’s eight-member team in Dallas is the third group to go over the finances of First Republic. Citicorp of New York sent a 20-member contingent last month and NCNB Corp. of Charlotte, N.C., said last week that it had submitted a formal bid to the Federal Deposit Insurance Corp.

“We plan to cooperate fully with (Wells Fargo’s) contingent,” said First Republic spokeswoman Martha Larsh.

A Wells Fargo spokeswoman declined to comment on whether the bank was considering a bid on First Republic. But a Wells Fargo employee, who asked not to be named, said Vice Chairman David M. Petrone--Well’s Fargo’s chief real estate expert--was scheduled to be in Dallas until today.

Memo to Workers

Industry analysts said First Republic’s main problem has been its non-performing real estate loans.

Wells Fargo, California’s third-largest banking concern, emerged this week as a possible suitor when First Republic Chairman Albert V. Casey sent a memo to employees telling them of the San Francisco bank’s interest.

“Speculation in the press has centered on interest by . . . Wells Fargo & Co.,” said the memo. “There is truth to that speculation.”

Analysts said Wells Fargo’s interest in Texas’ largest bank probably was spurred by FDIC.

“The FDIC hopes to get more aggressive with more than one suitor,” said Frank Anderson of D. Latin & Co., a Dallas securities firm.

A wide field of suitors would give FDIC an upper hand when negotiating any possible acquisitions, Anderson said.

FDIC is expected to spend nearly $1 billion to assist a buyer in taking over the Texas bank.

First Republic, which has 130 branches and $28 billion in assets, has $4.5 billion to $9 billion in problem loans, according to various estimates. Most are commercial real estate loans, but about $800 million are debts owned by Mexico, Brazil and other Third World borrowers.

In this year’s first quarter, First Republic lost $1.5 billion, in contrast with a gain of $10.4 million for first quarter 1987.

In Dallas, owners of First Republic bonds met with senior officers of the company in an apparent attempt to find out whether bondholders will get their money back.

Bondholders in Dallas and Houston had filed suits last month accusing the bank holding company and FDIC of improperly trying to wipe them out.

Much of First RepublicBank’s $1 billion in debt is held by insurance companies and pension funds that support some of the country’s largest banks.