Resignations of Clark M. Clifford and Robert A. Altman as the top officers of First American Bankshares Inc., the holding company for First American of Maryland and its 45 branches, are welcome if they serve to protect depositors and set the stage for the early sale of the Washington area's largest bank to an institution unmarred by the worldwide BCCI scandal.
Like most banks in this region, First American had its share of problems with bad real estate loans long before its connection with the Bank of Credit and Commerce International placed it uncomfortably in the headlines. Yet, curiously enough, its links with Sheik Zayed bin Sultan al-Nahyan of Abu Dhabi, one of the principal investors in BCCI and its affiliates, has helped First American maintain a relatively strong capital position. The Middle Eastern ruler has put $94 million into First American so far this year.
First American is a federal bank with deposit insurance of up to $100,000 per account, average customers need not fear for their funds. But some larger accounts have been lost. Publicity mentioning the regional bank has swirled around BCCI and Mr. Clifford, long a doyen of the Democratic Party establishment.
First American, concentrated in the Washington suburbs but with more than a dozen locations in metropolitan Baltimore, is part of an international network through which BCCI obtained illegal ownership of perhaps 60 percent of its shares. BCCI has been shut down in many countries on charges of criminal activities, but these moves do not seem to threaten First American per se, which is one of BCCI's more profitable operations.
First American's new operating team, led by former Sen. Charles Mathias and former Attorney General Nicholas Katzenbach, will have the task of setting up a trust to hold the stock of First American's parent corporation, Commercial and Credit American Holdings. The arrangement is so complicated that even people close to the situation confess they do not know precisely who owns what.
Until matters are settled, no potential buyers can be expected to go much beyond exploratory inquiries. Then, in a year or two, industry sources expect to see strong interest in the purchase of First American by a super-regional bank moving into interstate branching. Like Baltimore-based MNC Financial, First American is a strong franchise in a lucrative region that does not have any super-regional candidates of its own. The job now is to make First American as sound as conditions permit so it can serve this region in the future.