First Interstate Bancorp will eliminate up to 5 1 % of its work force in San Diego and close several branches in connection with its acquisition of San Diego Financial Corp., the bank company announced Friday.

The consolidations are needed to reduce expenses in a transaction that cost First Interstate dearly. The Los Angeles-based banking company agreed to pay $340 million, or 2.55 times book value, for San Diego Financial's $2 billion in assets. The deal is expected to close March 1.

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