B of A Says Merger to Close 450 Branches

BankAmerica Corp. said Monday that its merger with Security Pacific Corp. will result in the closing of nearly one-third of the new bank’s branches statewide--the majority in Southern California where the two institutions once competed fiercely for business.

Monday’s announcement of plans to shutter 450 offices in California marked the first time that BankAmerica has publicly disclosed the scope of its consolidation with Security Pacific. The new bank will operate about 990 branch offices in the state, compared to a combined total of 1,440 at the time of the merger in April.

The closings are roughly in line with earlier industry estimates. BankAmerica has not disclosed the locations of many targeted branches, and it was not clear whether any offices in poorly served inner-city areas would be among those closing.

In Orange County, Bank of America already has confirmed over the past several months that it would close 40 of its 129 branches. Monday’s announcement included all of those and will not mean additional Orange County closures, said Adrian Rodriguez, a bank spokesman. The company has yet to decide the fate of Security Pacific’s county headquarters at the South Coast Metro Center in Costa Mesa, although a branch office on the ground floor there will be closed.

B of A spokesman Richard Beebe said the branches will be closed over the next eight months and that the bank will decide after it finishes the closings how many employees it will need.

“The heaviest burden will be in Southern California, and that’s because there’s more duplication there,” Beebe said, referring to Security Pacific and B of A offices located close to each other.

The majority of closures will be Security Pacific branches.

BankAmerica held to its earlier estimate that the merger of the state’s two biggest banks would result in the eventual loss of 10,000 to 12,000 jobs worldwide. However, some industry analysts have said that the bank will likely need to cut about 20,000 employees to achieve its projected savings of $1.2 billion a year.

Analysts estimate that a typical branch employs about 20 people, so the closing of 450 offices would result in the loss of about 9,000 positions. Some employees are expected to be relocated.

B of A spokesman Charles Coleman said customers’ accounts will be moved from branches targeted for closure. But he maintained that customers will not be seriously inconvenienced because their new branches, in about two-thirds of the closings, will be less than half a mile away.

The merger of BankAmerica and Security Pacific--ranked No. 1 and No. 2 in the state, respectively--created the nation’s second-largest banking company with assets of about $200 billion and established BankAmerica as the dominant banking presence in the western United States. Only New York-based Citicorp is larger.

Based in Los Angeles, Security Pacific concentrated its operations more heavily in Southern California. About 60% of the combined bank’s 1,440 branches are located between San Luis Obispo and the Mexican border.

In the merger, San Francisco-based B of A made commitments to South-Central Los Angeles and other economically starved areas that no branches would be closed if they left neighborhoods without service.

There are B of A and Security Pacific branches within blocks of each other in South-Central and, if the pattern of closings holds, some will be shut down.

But the Greenlining Coalition, which consists of a number of minority and community action groups, has been monitoring B of A’s moves and believes that the bank will keep its commitments.

“I have faith in the bank’s word, but as a lawyer, I have an obligation to look at what they’re doing,” said Robert L. Gnaizda, a lawyer for the coalition, which focuses attention on lending practices in poorer communities.

So far, 81 branches have been closed statewide, mostly Security Pacific offices. In addition, BankAmerica has said that 82 branches in other states will be closed.

The number of branch closings should not be a surprise, said Stephen McLin, a former strategic plannerA. To reach $1 billion in savings a year, the bank is going to have to lay off workers, he said.

“That’s the engine that drives the cost savings, not fewer telephone lines,” said McLin, now president of America First Financial Corp., a San Francisco savings and loan holding company. “This is a shoe that shouldn’t surprise anyone when it drops.”

At the time of the merger, the bank’s parent company, BankAmerica Corp., had 91,000 employees worldwide. By the end of September, staffing was down to 83,500 full-time positions, but only 700 came from layoffs or attrition prompted by the merger.

Most of the decline--6,800 employees--was attributed to sales of branches and divestitures that BankAmerica had to make to appease antitrust regulators so that the Security Pacific merger could be completed.

B of A has instituted an extensive merger-transition program that provides job counseling, retraining and outplacement services for laid-off employees. It also is providing a generous severance package.

Branches to Be Closed in Orange County

Bank of America will close 40 of its 129 branches in Orange County early next year. The following is a listing of the Bank of America and Security Pacific branches that will close.

Anaheim: Security Pacific, 100 S. Harbor Blvd. and 191 S. Imperial Highway.

Brea: Security Pacific, 230 S. State College Blvd.

Buena Park: Security Pacific, 8061 Stanton Ave; Bank of America, 5305 Beach Blvd.

Corona del Mar: Security Pacific, 3451 E. Coast Highway.

Costa Mesa: Security Pacific, 196 E. 17th St., and 555 Anton Blvd.

Dana Point: Bank of America, 33282 Street of the Golden Lantern.

Lake Forest: Security Pacific, 24417 Rockfield Blvd.

Fullerton: Security Pacific at 101 N. Harbor Blvd., 255 W. Orangethorpe Ave. and 3200 E. Yorba Linda Blvd.; Bank of America, 1901 N. Euclid St.

Garden Grove: Security Pacific, 9862 Chapman Ave.; Bank of America, 11887 Valley View St. and 10901 Westminster Ave.

Huntington Beach: Security Pacific, 19022 Beach Blvd.; Bank of America, 3166 Admiralty Drive, 15672 Springdale St. and 9881 Adams Ave.

Irvine: Security Pacific at 4980 Irvine Blvd.

Laguna Beach: Security Pacific at 381 Forest Ave.

Laguna Hills: Security Pacific, 24260 El Toro Road; Bank of America, 24061 Calle de la Plata. Laguna Niguel: Security Pacific, 30202 Crown Valley Parkway.

Mission Viejo: Bank of America, 25952 Muirlands Blvd. and 26991 Crown Valley Parkway.

Newport Beach: Security Pacific, 4000 MacArthur Blvd. and 550 Newport Center Drive.; Bank of America, 3444 Via Lido.

San Clemente: Security Pacific, 115 N. El Camino Real.

San Juan Capistrano: Security Pacific, 32201 Camino Capistrano.

Santa Ana: Security Pacific, 890 N. Main St., 1601 N. Tustin Ave. and 3501 S. Harbor Blvd.

Seal Beach: Security Pacific, 770 Pacific Coast Highway.

Tustin: Security Pacific, 13471 Newport Ave. and 1095 Irvine Blvd.

Villa Park: Security Pacific, 17769 Santiago Blvd.

Source: Bank of America