Speech to Bank’s Shareholders : First Interstate Chairman Still Interested in B of A Bid
First Interstate Bancorp’s bid to acquire Bank of America is not dead, First Interstate Chairman J. J. Pinola said Friday.
Although Bank of America has twice rebuffed Pinola’s offer of a friendly merger, Pinola told First Interstate’s shareholders that the combination makes sense and that he will continue to pursue it.
“The troubles besetting Bank of America have been well publicized,” Pinola said. “However, the information available to us . . . leads us to believe that our two companies could be forged into a banking organization with presence and power such to assure a position of banking prominence, not only throughout the West but throughout all of the United States and, in fact, the world.”
It was Pinola’s first public comment on his merger talks with Bank of America, which were first disclosed in early March.
BofA ‘Not Interested’ in Merger
B of A, in a curt statement Friday, rejected Pinola’s advances once again, saying it was “not interested” in a merger with First Interstate.
Bank of America, the second-largest U.S. bank, lost $337 million last year because of massive loan losses and high operating costs. The San Francisco bank’s continuing problems have led to speculation about a management shake-up or the possibility of a friendly or unfriendly takeover.
By contrast, First Interstate, the nation’s ninth-largest banking company, earned a record $313 million last year. The Los Angeles bank has $49 billion in assets and subsidiaries in 15 Western states.
A B of A-First Interstate combination would have nearly $170 billion in assets, rivaling Citicorp, America’s biggest banking firm.
BankAmerica Corp., B of A’s parent, is asking its shareholders to approve an anti-takeover measure at the firm’s annual meeting next week. The plan would require that any shareholder action--such as approval of a merger--be taken only at a full meeting of the shareholder body.
Obstacles Could Be Overcome
Pinola said First Interstate thoroughly researched the proposed merger and concluded that, at the right price, it would be possible and advantageous to both companies. He said his lawyers have assured him that legal and regulatory obstacles could be overcome.
“We continue to believe that banking services will ultimately be delivered by only a handful of very strong nationwide financial firms,” he said. “And the combination would solidly place us in that position.”
The combined bank would be better able to withstand the arrival of New York banks when full interstate banking is approved, he added, and to “weather the economic uncertainties of the future.”
Pinola, 60, is known as a bold and expansion-minded banker. He was at Bank of America for 25 years before joining First Interstate in 1976. He has been that company’s chief executive since 1978.