B of A Sale May Cause Shift in Arizona

The Justice Department said Thursday that the fifth-largest bank in Arizona will be created when BankAmerica Corp. sells 49 branches in the state to gain approval for its merger with Security Pacific.

The branches have deposits of $2.4 billion and loans of $225 million. They will be divested by BankAmerica to assure that competition remains strong in Arizona, the department said in a letter to the Federal Reserve Board, which must approve the merger.

BankAmerica entered Arizona and Oregon in 1990 through the acquisition of insolvent savings and loans. The bank does not now have a significant market “presence,” the Justice Department said, although Security Pacific does. In order to assure that competition remains lively, the government insisted that BankAmerica sell the 49 Arizona outlets.

Altogether BankAmerica has agreed to sell a total of 211 branches with $8.8 billion in deposits, and $2.7 billion in loans, in California, Arizona, Nevada, Oregon and Washington state. James F. Rill, assistant attorney general in charge of the antitrust division, said in a letter to Fed Chairman Alan Greenspan the divestitures will assure that there will be “no substantial lessening of competition in local markets in all five states.”

In Seattle, Las Vegas and Reno, the sales “should create a major competitor with an extensive branch network and a significant competitive presence,” Rill said.