FIRST EXCHANGE BANK CORP. BANKS SOLD

All five subsidiary banks owned by First Exchange Corp., a bank holding company headquartered in Cape Girardeau, were sold Thursday.

The Missouri Division of Finance declared the Exchange Banks in Cape Girardeau, Jackson, Fredericktown and St. Louis insolvent Thursday afternoon and ordered all of the banks to be closed and liquidated.

Earl Manning, state commissioner of finance, recommended the Federal Deposit Insurance Corp. be appointed liquidating agent. The orders to place the banks under FDIC control were signed Thursday afternoon by circuit judges in the counties where the banks are situated.

The FDIC announced the sale of all five banks late Thursday. The banks were to reopen today under the new ownerships. All banks will honor Exchange Bank checks.

The new owners are:

Commerce Bank of Poplar Bluff, which acquired First Exchange Bank of Cape Girardeau, which lists assets of $79 million.

Boatmen's Bank of Cape Girardeau, which acquired Jackson Exchange Bank and Trust Co., which lists assets of $117 million and has branches at Fruitland and Highway 61 East in Jackson.

Commerce Bank of St. Francois County in Farmington, which acquired First Exchange Bank of Madison County in Fredericktown, which lists assets of $33 million and has branches at Marquand and at West Main in Fredericktown.

Magna Bank of Clayton, which purchased First Exchange Bank of St. Louis on Butler Hill Road. It lists assets of $52 million and has a branch on Bayless Avenue in St. Louis County.

First Bank, a savings bank at Clayton, which purchased First Exchange Bank of North St. Louis County, which lists assets of $43 million and has branches on Riverview Drive and in Florissant.

Examinations of First Exchange Corp. revealed institutions whose capital was rapidly depleted through massive losses on loans and other assets, according to court records.

The Federal Reserve Bank of St. Louis concluded that the First Exchange Bank of St. Louis was insolvent following a Jan. 21 examination. The FDIC tentatively estimated the cost of liquidating the First Exchange Bank of St. Louis at $15 million.

At the time, the aggregate remaining capital in all of the First Exchange Banks was about half that amount. The capital account represents the shareholders' investment. The assets were much higher, and included such things as investor deposits, loans, government securities, property and cash reserves.

In addition, as a group, First Exchange banks were losing about $500,000 a month from operations, according to court records.

The new acquisitions will result in a new bank at Cape Girardeau.

Roger Tolliver, chairman and chief executive officer of Commerce Bank of Poplar Bluff, announced late Thursday that Commerce Bank will staff the banking facility at 160 S. Broadview with representatives who will assist former Exchange Bank customers.

Cord Polen of Cape Girardeau, a senior vice president and senior loan officer of Commerce Bank at Poplar Bluff, has been assigned to head banking operations as community president for Commerce at Cape Girardeau.

"We are pleased to have this opportunity to move quickly to meeting the needs of our new Cape Girardeau customers," said Polen. "We know many people will be concerned, but we want to assure them we are well prepared to make the transition as easy and comfortable as possible.

"Our goal will to be grow profitably by contributing to building a stronger and healthier local economy," said Polen. "We will be particularly sensitive to our new customers' needs. We'll bring additional services, expertise and efficiencies to the marketplace, including investment management and trust services, discount brokerage and credit card services."

In the transfer, most loans at First Exchange were not transferred to Commerce, but were retained by the FDIC, which will continue to collect balances due.

First Exchange Bank of Cape Girardeau employed 29 people, who were released Thursday by the FDIC. A spokesman said Commerce Bank intends to retain certain positions on a temporary basis. Applications will be taken for permanent positions as staffing requirements are determined.

Commerce Bank of Poplar Bluff is an affiliate of Commerce Bancshares Inc., a bank-holding company with more than 125 locations.

Jackson Exchange's main bank at 101 Court Street in Jackson and a branch at Fruitland will reopen this morning as Boatmen's branches. The Highway 61 East branch will not reopen.

"We welcome the opportunity to serve Jackson Exchange Bank and Trust Co. customers with our broad range of financial services," said Jim Limbaugh, president and chief executive officer of Boatmen's at Cape Girardeau. "We are particularly pleased to maintain deposits of residents in this longtime, area-based institution.

"Former Exchange customers may continue to conduct their business as usual," said Limbaugh. "We at Boatmen's pledge to make this transition as smooth and worry-free as possible. We're pleased with this unique opportunity for Boatmen's to increase its market share in the Jackson area."

Limbaugh stressed that "the deposits of former Jackson Exchange customers are safe, sound and accessible. Deposits continue to be protected up to $100,000 by the FDIC." He said, "Since Boatmen's is so strong financially, any concerns that these customers may have had about the health of their former bank should be relieved."

In addition to the two former Jackson Exchange Bank facilities, Boatmen's has six other bank facilities in Cape Girardeau and Jackson.