B of A to Buy Third-Largest Oregon Bank
BankAmerica expanded its West Coast banking empire with an agreement announced Friday to acquire Oregon’s third-largest commercial bank.
The San Francisco-based parent of Bank of America, the nation’s biggest bank, signed a deal with Orbanco Financial Services to buy the 49-branch system of its subsidiary, the Oregon Bank.
The $57-million transaction is expected to be completed in July, 1986. If the takeover is approved by shareholders and federal regulators, BankAmerica will become the first giant out-of-state bank holding company to take advantage of a recent Oregon law permitting such acquisitions.
BankAmerica already owns Seafirst Bank, based in Seattle, the largest bank in Washington.
Los Angeles-based First Interstate Bancorp, one of BankAmerica’s big West Coast competitors, owns a 165-branch Oregon subsidiary acquired before passage of restrictions on interstate banking.
“The Oregon Bank is a well-managed institution with an established position in the Oregon market,” said BankAmerica President Samuel H. Armacost. “This acquisition will accomplish our strategic objective of building the leading banking network on the entire West Coast.”
Orbanco lost $9.5 million in 1983 and $3.9 million in 1984. It has not paid dividends since September, 1983, and is saddled with about $80 million in debt.
Because of losses from bad loans and weak interest income, the Oregon bank has closed a quarter of its branches and laid off a third of its employees since 1983. Its assets have not grown appreciably since 1979.
