In its fifth such acquisition in the last year, Bank of New York Co. said it agreed to buy the corporate trust business of Meridian Trust Co. of California for an undisclosed sum.
The move, announced last Thursday, will give the New York-based bank more than 300 municipal trust and agency relationships, representing over $2.4 billion in principal amount of securities.
Meridian's portfolio is composed primarily of trust and agency accounts for local municipal issuers in the Northern California market.
Analysts said the acquisition was broadly in line with Bank of New York's goals for expanding its already extensive securities custody and processing business.
"It's an add-on to their existing municipal trust business," said Ronald I. Mandle, an analyst with Sanford C. Bernstein & Co.
"This is definitely an addition to their existing securities processing business and what they're taking advantage of is the scale of their operations," said Susan L. Roth of Bear, Stearns & Co. She predicted Bank of New York's trustee business will see further consolidation this year.
The acquisition does not include any other type of trust, agency, or other fiduciary relationships, such as personal or employee benefit accounts.
Meridian Trust, based in San Francisco, is a subsidiary of the Malvern, Pa.-based Meridian Asset Management, a unit of Meridian Bancorp.
Bank of New York, with $50 billion in total assets, made its first acquisition in this recent series in December 1993. This latest transaction is expected to be completed during the first quarter of 1995, and will add to earnings immediately, Bank of New York said.
Combining the Meridian Trust portfolio with those from earlier acquisitions will add more than 10% to BONY's corporate trust business.
Bank of New York's existing securities processing business will contribute an estimated 20%, or about $740 million after taxes, to the bank's 1994 earnings.
