Bank America Is Expected To Deal Again
Despite the enormous task of absorbing Security Pacific Corp., BankAmerica Corp. is not expected to stay out of the acquisition arena for long.
"This hardly quashes Mr. Rosenberg's aspiration to make BankAmerica a truly nationwide bank," said Nancy Bush, an analyst with Brown Brothers Harriman in New York, speaking of BankAmerica chairman Richard M. Rosenberg.
The megadeal with Security Pacific is expected to close in six months. Until then, most analysts do not expect another major acquisition.
But BankAmerica could take a large equity position in an East Coast bank, such as Shawmut National Corp., to pave the way for a future acquisition, they suggest.
Handling Several Deals
"BankAmerica has an almost unique capacity to do multiple transactions," said H. Rodgin Cohen, a lawyer with the law firm of Sullivan & Cromwell.
The Security Pacific deal is believed to lessen the chances of BankAmerica's making a run for two large troubled banks: Southeast Banking Corp. of Miami and MNC Financial Corp. of Baltimore. But don't count the West Coast giant out entirely, industry observers cautioned.
Frank Newman, chief financial officer of BankAmerica, said, "Clearly, we need to give this [merger] very focused attention, but it doesn't mean we can't do some other things."
Once the Security Pacific deal is completed, observers expect the expansion-minded bank to forge ahead. The new BankAmerica will have about $10.9 billion of Tier 1 capital and a 5.5% ratio of common equity to assets - ample capital for another big buyout.
Active in Due Diligence
The bank's due-diligence team has been extremely busy this year. The San Francisco-based banking company has snapped up a string of failed thrifts and recently announced plans to acquire Valley Capital Corp., a healthy Nevada company.
BankAmerica is said to have held inconclusive talks with First City Bancorporation of Texas and with Valley National Corp. of Phoenix about buying its Utah unit.
Talks are said to be continuing with the $3 billion-asset Honfed Bank of Hawaii.
BankAmerica recently opted not to bid on two insolvent Connecticut banks. This "suggests that they have another deal pending in New England," said John Lyons of Lyons, Zombach and Ostrowski Inc.