Glendale Federal Bank agreed Wednesday to sell its Seattle-based University Savings Bank unit to First Interstate Bancorp for $190.4 million, plus whatever University earns between now and the deal's expected close in early 1995.
Glendale Federal, with $17.3 billion in assets, will get another $9 million to $12 million on top of the agreed upon purchase price, to cover the next several quarters of University's earnings.
The bank's chairman and chief executive, Stephen Trafton, said the deal will allow Glendale to concentrate on its core operations in the Golden state.
"We've been focusing very hard on developing the California banking franchise, specifically, expanding our business line offerings," he said.
Sale Follows April Selloff
The sale of University comes in the wake of Glendale's April sale of 60 branches in Florida. In June, the bank sold $226 million in problem assets.
"The Florida and Washington franchises represented mature markets and mature values. The time was right to sell those franchises and to focus on the relative immaturity and developing value in California," Mr. Trafton said.
Meanwhile, Los Angeles-based First Interstate said it saw an opportunity to increase its market share. "We're trying to be among the top three banks in all the markets we're in," said Gary Severson, chairman of First Interstate Bank of Washington.
University brings $1.1 billion in assets and a 25% increase to the $4.3 billion-asset base of First Interstate's Washington subsidiary.
