With its $1.2-billion acquisition of Seattle-based Rainier Bancorporation set to become final Monday, Security Pacific Corp. unveiled steps Thursday designed to cut costs by merging the two banks' Asian and data processing operations.
Security also said the 49 branches of its Oregon Bancorp subsidiary will be consolidated with Rainier's 15-branch operation in Oregon. The 64-branch system will be administered by Rainier but will be called Oregon Bank.
Security officials said there would be no large staff reduction, although some cutback is expected. Most savings will come from consolidating communication and information systems and eliminating duplication, such as selling Rainier's nine branches in Hong Kong.
Security, based in Los Angeles, has long been a strong presence in Asia and Rainier, for its size, has surprising strength there. Merging their Asian operations will result in a 27-branch organization with $2.8 billion in assets and offices throughout the Pacific region. It will be called Security Pacific Merchant Bank and will be headed by S. Lachlan Hough, a 15-year veteran at Security Pacific.
Joint Task Force
Security Pacific Automation Co. will assume management of Rainier's information systems and some bank operations, including check processing, cash management, data processing and electronic banking. Earlier this year, Security Pacific Automation took over the data processing operations of its subsidiaries in Arizona and Oregon.
Analysts were not surprised by the moves, which had been under study since the merger was announced in February.
"This is all very logical, and it's one of the appeals of mergers in the financial industry," said Dan B. Williams, an analyst with Sutro & Co. in San Francisco.
Williams said Security Pacific and Rainier are undoubtedly studying additional areas where duplication can be eliminated, such as combining their trust departments, and examining the possible sale of some Rainier assets.
Richard J. Flamson III, chairman and chief executive officer of Security Pacific, said the Rainier merger is an important strategic move.
Security Pacific Corp. operates 600 branches in California, 107 in Arizona and 49 in Oregon. The merger with Rainier will add 164 branches in Washington, 15 in Oregon and five in Alaska and will increase the holding company's total assets to $74 billion.