B of A to Drop 14 More Branches to Satisfy Merger Concerns

BankAmerica Corp. said Wednesday that it is selling 14 more branches in California as part of its merger with Security Pacific Corp. to satisfy antitrust concerns of state Atty. Gen. Dan Lungren.

The divestiture is in addition to 38 branches that B of A agreed to sell last month after negotiations with the U.S. Justice Department.

It agreed to sell the additional branches--bringing the total to 52 with assets of nearly $2 billion--to satisfy antitrust questions of state officials.

BankAmerica has already arranged to sell 10 of the 14 branches, as part of earlier announced transactions with Oregon’s U.S. Bancorp and San Francisco-based Union Bank. The other branches yet to be sold are in the Fresno area, a bank spokesman said.

The agreement with the state comes after Justice Department antitrust officials last week said they would not stand in the way of the merger between San Francisco-based BankAmerica and its Los Angeles rival. The merger the biggest in U.S. banking history, still needs approval from the Federal Reserve Board.

Under federal laws, states are not given authority to approve or veto the merger. But state officials, notably in Washington, have previously asserted that they could have sued to challenge the merger under the state’s consumer protection laws. Bank merger specialists say that whether states can challenge bank mergers is a murky area of the law.

In any event, BankAmerica chose to head off opposition in states by addressing antitrust issues. Last week, it settled with Washington officials, where it faced by far the toughest antitrust issues, and also reached agreements with officials in Arizona, another state where there had been opposition to the deal.