LOS ANGELES -- The proposed merger announced this week by BankAmerica Corp. and Security Pacific Corp. could help both firms' public finance efforts, market participants said yesterday.

A Bank of America public finance official stressed that it is far too early to predict what might happen if the merger goes through.

He added, however, that Bank of America would "welcome the opportunity" to review Security Pacific's existing public finance operation.

Last spring, San Francisco-based Bank of America expanded its public finance operation by hiring two investment bankers for a new Los Angeles office. Security Pacific is based in Los Angeles and already has clients in Southern California.

Richard A. Clark, managing director of Security Pacific's public finance department, has primarily worked as a financial adviser recently. His clients range from Los Angeles to the Bonneville Power Administration.

Roderick Carter, a vice president of Security Pacific, specializes in school district financings. The firm also has two associates in public finance.

Bank of America's approach to public finance "is similar to our's," including an emphasis on retail business, Mr. Clark said. "I think it's a great opportunity, to be very honest."

The Bank of America official, who asked not to be identified, noted that the same rationale that justifies the overall merger "also could hold true for public finance" by providing an expansion possibility. He added, however, that comments about future possibilities are premature.

Bank of America, currently the nation's second-largest bank, said on Monday it planned to acquire fifth-ranked Security Pacific in a stock transaction.

It remains unclear whether there is overlap between the banks' municipal operations that would result in layoffs. An investment banker at another commercial bank said yesterday that he believes the "core of each office could survive," based on existing business opportunities.

Security Pacific used to have about 10 professionals in its public finance department, a size similar to that of Bank of America today. In late 1989, however, Security Pacific pared its public finance staff because of intense competition that was squeezing the margins on certain municipal bond deals. The firm cut its investment banking staff in half as a result.

Security Pacific also has a public finance presence in Seattle thanks to its previous acquisition of the former Rainier Bank. But the investment bankers in Seattle do not report to the Los Angeles office, Mr. Clark noted.

Security Pacific in the late 1980s attempted a broader push into the capital markets with a merchant banking group. But it eventually pulled back from that effort.

Bank of America usually ranks high in California managing underwriting volume, primarily because of its prowess in capturing State of California general obligation issues.

In 1990, Bank of America ranked first in California in full credit to lead manager volume, with 38 issues totaling $3.7 billion, producing a 23.4% market share, according to Securities Data Co./Bond Buyer figures. Based on full credit to book manager for national rankings, Bank of America last year ranked 10th for a 2.9% market share.

By contrast, Security Pacific ranked 19th in California in 1990, with 16 issues totaling $207.9 million, based on full credit to lead manager. Security Pacific ranked 60th nationally last year.

For 1991 to date, Bank of America will hold California and national ranking similar to those of 1990 after factoring in its winning of the $1.2 billion California GO issue yesterday.

Security Pacific ranks 24th in California year-to-date, and 66th nationally.

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