By KENNETH CLINE
Bolstering its already dominant market share in Florida, Barnett Banks Inc. said Monday it would acquire 60 branches and $3.6 billion in deposits from California-based Glendale Federal Bank.
Barnett said it would pay $243.5 million in cash for the branches, which are mostly concentrated in southeast and west central Florida, representing a 6.68% premium on the deposits. The deal, expected to close before yearend following regulatory approvals, will increase Barnett's share of bank and thrift deposits in the Sunshine State from 18% to nearly 20%.
Barnett shares closed Monday trading up 12.5 cents to $46.25. Glendale Federal's stock was up 75 cents to $7.375.
No Earnings Dilution Seen
Barnett said it would suffer no earnings dilution from the transaction. President and chief operating officer Allen L. Lastinger Jr. said in a telephone conference call that he estimates the acquisition will not be "material" during the first three years, but should add between 5% and 10% to Barnett's earnings per share by the fourth year and beyond.
Mr. Lastinger declined to say how many of Glendale's 60 branches and 500 Florida employees will be jettisoned, but he noted that 80% of the Glendale offices are located within one mile of a Barnett branch.
The sale of the Florida branches allows the Glendale, Calif.-based thrift to concentrate on its home state, where it has the majority of its $16 billion in assets.
Stephen J. Trafton, Glendale's chairman and CEO, estimated the deal will place the thrift within regulatory definitions of a "well capitalized" institution, with core capital in excess of 5% and more than 10% in risk-based capital on a fully phased-in basis.
Glendale completed a successful recapitalization last fall, which raised $425 million. But since then, it has lost nearly $60 million, which left it just $29 million above the 4% core capital level below which regulatory sanctions take effect.
Glendale had announced last year that it would sell 23 branches on Florida's west coast, but rescinded the decision in the wake of the recapitalization. Then, last Thursday, Glendale said all 60 Florida branches were on the block and that CS First Boston was shopping around for the best bid.
Actually, at that point, the deal was about to close. Mr. Lastinger said Monday that Barnett had been negotiating with Glendale for nearly two months. Mr. Trafton said, in a telephone interview, that the process had attracted "several other" bidders, whom he declined to name.
Glendale said it will write off approximately $133 million of goodwill associated with the Florida franchise, which will reduce its quarterly expense for goodwill amortization by approximately $3.2 million.
