Mitsubishi Combining Its 2 Banks in State

Bank of California signs will replace the familiar red diamond logo of Mitsubishi Bank next month when the two Japanese-owned financial institutions complete a merger that will create the sixth-largest bank in California.

Although state-chartered Mitsubishi bank of Los Angeles and San Francisco-based Bank of California were owned and operated by the same parent company--Mitsubishi Bank Ltd. of Tokyo--officials decided to combine the two institutions in anticipation of full interstate banking competition, which will be allowed starting in 1991. The merged bank will be called Bank of California.

“We were bumping into each other in the marketplace,” according to Bank of California spokeswoman Joelle Yuna. “But this was not a merger for economies of scale or retrenchment, it was a merger for growth.”

The venerable Bank of California, whose corporate logo depicted a miner’s gold pan and crossed pick and shovel until it was changed in 1979, was founded in 1864. The bank once had nearly 80 branches in the state. It now has 26 branches and about 2,400 employees.

Mitsubishi Bank of Tokyo formed Mitsubishi Bank of California as a subsidiary in the state in 1972. The bank has about 850 employees.

Beginning in 1991, banks from the East Coast and elsewhere will be allowed to start operations here and to buy existing banks in the hotly competitive California banking market.

Acquired in 1983

Mitsubishi Bank recently sent about 55,000 notices announcing the merger to account holders. The 26 branches of Mitsubishi Bank will complete their name change to Bank of California by Nov. 7, Yuna said.

The union consolidates the state-chartered Mitsubishi branches under the federally chartered Bank of California and achieves combined assets of about $7 billion. But the merger, which received federal approval Aug. 1, will otherwise have little or no effect on customers, experts said.

“It just follows a trend of bank consolidations (spawned by) deregulation; it’s no big deal,” said Gerry Findley, a bank analyst who publishes an industry newsletter in Brea.

Following an unsuccessful bid by Wells Fargo, Mitsubishi Bank Ltd. purchased Bank of California in 1983 for about $282 million. Since acquiring the bank, Mitsubishi has expanded Bank of California from 19 branches to 26 and changed its primary focus from being a retail bank to concentrate on commercial lending.

Bank of California now operates three branches in Washington state as well as one branch in Portland, Ore. Mitsubishi’s 26 branches are primarily in Southern California.

Officials of the merged bank said they intend to close only one of the combined 52 branches--one in Oakland. They added, however, that no employee layoffs are planned.