NBC Housecleaning

Executive juggling continues at the National Bank of Commerce as the bank tries to set its house in order for a forced sale. The latest shift came when former senior vice president Ed Nash Jr. was named president, succeeding Lewis Johnson Jr., who was shoved out in August.

Nash’s appointment marks what looks like the end of a housecleaning which began 18 months ago when chairman John Gray departed. What Gray left behind was a portfolio full of bad loans, written off last year as a $10 million operating loss. Because of The Bank Holding Company Act, Arkansas Best must sell its controlling interest in NBC by 1981, and selling an unprofitable bank is a tough proposition, especially when everybody knows you have to sell it.

Arkansas Best unabashedly told its stockholders NBC was holding $13 million in “doubtful loans,” reportedly including substantial personal loans to Jim Ling, and promised NBC would be sold at a profit. The loans were written off, John Gray was shoved out as chairman, taking a number of his loan officers with him over to Dallas International Bank. That left Johnson behind as president, who operated with much the same freewheeling loan philosophy as did Gray. By August new chairman John Hazard and Arkansas Best moved Johnson out, completing the management purge.

NBC is back in the black and before long Hazard and Nash will be courting prospective buyers. But NBC’s options are limited. Being the fifth largest bank in town, not just any bank holding company can swallow NBC.

Texas has four giant holding companies, but three of them, Republic, First in Dallas and Houston’s First City, already own downtown Dallas banks. That leaves Houston’s other giant, Texas Commerce Bancshares, as the lone possibility among the big four. It looks like a buyer’s market.