Edward M. Carson takes over today as chairman and chief executive of First Interstate Bancorp, succeeding Joseph J. Pinola.
The transition at the nation's eighth-largest banking company has been under way since the announcement in January that Pinola, 65, was retiring.
William E. B. Siart, 43, who heads the Los Angeles banking firm's largest unit, First Interstate Bank of California, is replacing Carson as president of the parent company.
Carson, 60, faces several critical tests. The company's interstate network has two huge problems, in Texas and Arizona. Those units, hurt by a slowdown in Arizona's economy and an ill-timed acquisition in Texas, were responsible for a $124.5-million loss last year.
In addition, the Arizona native is under pressure to trim First Interstate's operating expenses and to take measures to boost its sagging stock price--a circumstance that has made First Interstate an attractive takeover target. Executives of two of the bank's California rivals, Wells Fargo & Co. and Security Pacific Corp., have said they would be interested in buying First Interstate if it became available.
Pinola's retirement comes at a bittersweet time for him. The strong-willed Pennsylvania native was lauded as a visionary when he built First Interstate into the largest interstate banking network in the country during the 1980s.
In the past two years, however, investors and analysts have criticized Pinola for several surprise losses and for his acquisition of Allied Bancshares in early 1988. In an interview this year, Pinola called the Allied acquisition "one giant mistake," but defended his record in other areas by noting that he had expanded the bank throughout the West.
Pinola may be best known for shocking the normally staid banking world with an audacious, unsuccessful bid to take over BankAmerica in 1986. The San Francisco firm was in deep trouble at the time but has since turned around and is now outperforming First Interstate.
Pinola will remain on First Interstate's board and will be chairman of the executive committee.