SAN FRANCISCO - First Interstate Bancorp, on the rebound from big loan problems, is now ready to make acquisitions, chairman and chief executive Edward M. Carson said Wednesday.
At a conference here, Mr. Carson said his Los Angeles-based company wants to fill out its franchise with acquisitions in Texas, Southern California, and Washington State - areas where First Interstate is not among the top three deposit takers.
"We do not expect to expand beyond our current boundaries," Mr. Carson said. "We will do in-market acquisitions if there is minimal asset risk and cost synergies."
Mr. Carson initially did not volunteer possible targets, but in response to a question said he was interested in ailing First City Bancorporation of Texas.
Responding to a question in a subsequent interview, he also expressed interest in Pacific First Bank, a Seattle thrift with $6.9 billion in assets that is on the block.
The chief executive's remarks, at a conference sponsored by Montgomery Securities, underscore rising confidence at First Interstate. In recent years, the company. which has $49.5 billion in assets, has usually been connected with takeover speculation rather than acquisition rumors.
But Mr. Carson has met with success in reducing problem loans, and last week told Wall Street analysts that First Interstate's earnings this year would be higher than expected.
At the conference, when asked by an investor if he was interested in buying troubled First City, Mr. Carson responded, "Sure."
But he cautioned that the Houston company has said it is now trying to go it alone. "God help them if they do," Mr. Carson added.
At another point, he said First Interstate prefers government-assisted purchases in which it is protected from loan problems. Taken together, Mr. Carson's comments suggest that First Interstate would not acquire First City unless it were seized by the government.
In response, First City said its survival prospects are good. "We're going down the road with our recapitalization plan." said chief financial officer Robert W. Brown. He declined to comment on a possible acquisition by First Interstate.
Pacific First, which has more than 130 branches in Washington and Oregon, has been put up for sale by its financially troubled owner, Royal Trustco Ltd.. Toronto.
Asked about Pacific First, Mr. Carson said: "We would look at it. It fits pretty well." But he said he was concerned about the thrift's high level of problem assets.
Pacific First representatives were unavailable for comment.
If First Interstate bids for Pacific First, it presumably would want only the Washington branches since it already operates the second-largest bank in Oregon. That could set the stage for a joint bid with KeyCorp. That Albany, N.Y.-based company is looking to expand in Oregon.
