U.S. Bancorp Approaches B of A About Seafirst
U.S. Bancorp, parent of the largest bank in Oregon, has approached BankAmerica about buying the ailing banking giant’s Seafirst unit in Washington.
“We are absolutely interested in expanding into the state of Washington and have expressed our interest to both Seafirst and BankAmerica,” Roger Breezley, vice chairman of Portland-based U.S. Bancorp, said in an interview Wednesday. Neither has responded, Breezley added.
Seafirst, acquired by BankAmerica in 1983, has received many such expressions of interest, the Associated Press reported, quoting Chairman Richard P. Cooley, who said he refers all such inquiries to BankAmerica.
Industry sources said other possible buyers, should BankAmerica decide to sell Seafirst, include Los Angeles-based Security Pacific, First Bank System of Minneapolis and a number of New York concerns such as Citicorp and Chase Manhattan. Other possible bidders include Japanese banks and a group of Seattle investors--perhaps including Cooley himself.
Seafirst’s share of the Washington banking market is about 40%, making the company a tempting target for expansion-minded bankers from out of state. Washington’s interstate banking law will open the state to outsiders next July 1.
(BankAmerica acquired Seafirst in 1983 under a loophole that permitted out-of-state companies to acquire failing banks. At the time, Seafirst was reeling under the impact of hundreds of millions of dollars of bad energy loans.)
Salomon Bros. has been analyzing BankAmerica’s options and will likely present its report to BankAmerica’s board at the next scheduled meeting on Nov. 3, Cooley said.
Cooley is a director of BankAmerica, which has posted a net loss of $600 million so far this year and has been rapidly selling off assets to replace capital depleted by huge loan losses.
BankAmerica may also be considering the sale of its Charles Schwab & Co. discount brokerage subsidiary. The sale of Seafirst and Schwab was repeatedly ruled out by BankAmerica’s former president and chief executive, Samuel H. Armacost. His successor, Chairman A. W. Clausen, is apparently giving the subsidiaries a fresh look.
Said Patrick F. Patrick, president of Seattle’s Prudential Bank: “Clausen has less of an emotional attachment to Seafirst and Schwab,” both of which were acquired under Armacost. “He is more concerned about saving the corporation as a whole rather than with preserving the empire he has built.”
U.S. Bancorp, whose U.S. National Bank dominates the Oregon market, is a logical partner for Seafirst. “We both have the largest banking networks in our respective states,” Breezley said.
Combining U.S. Bancorp’s assets of $8.5 billion with Seafirst’s assets of $9.8 billion would create a regional banking powerhouse in the Pacific Northwest.
Seafirst, according to various sources, could fetch about $1 billion for BankAmerica, while Schwab might be worth $400 million.
U.S. Bancorp. has yet to present a formal offer, however, Breezley said. “We just want to be given a shot if they decide to sell it.”
Separately, BankAmerica said it had agreed to sell its New York securities-clearing operations to a Security Pacific unit for an undisclosed sum. BankAmerica said the sale will allow it to concentrate on securities-clearing operations in California and to shed 180 employees.
