SAN FRANCISCO -- Norwest Corp. has agreed to buy Independent Bancorp of Arizona for about $158.6 million in cash, a deal which, if completed, will, end the brief but tumultuous saga of the largest start-up in U.S. banking history. When Combined with another pending acquisition, the purchase will nearly double the size of Norwest's Arizona operations to 103 branches and roughly $4 billion of assets, solidifying its position as the fourth-largest bank in the state. But some analysts question the quality of $1.8 billion-asset Independent and its operating unit, Caliber Bank. The Phoenix-based institution was cobbled together in 1992, mostly from failed savings and loan branches discarded by BankAmerica Corp. as part of its acquisition of Security Pacific Corp. "The franchise is awful," said Lehman Brothers' Mark Lynch. "It is all the branches BankAmerica didn't want." What's more, Independent is selling under distress. At the same time the company announced its agreement to sell, it disclosed approximately $50 million in realized and unrealized losses in its roughly $500 million portfolio of mortgage-backed securities.

Norwest has a record of buying and fixing troubled banks. Jon Campbell, president and chief executive of Norwest Bank Arizona, said that, after a difficult start, Caliber has greatly improved its franchise. "They have a real emphasis on small business lending and they have started to carve out a niche for themselves," he said.

Norwest is not paying much for the acquisition, given its opportunity to achieve in-market cost savings. After completing premerger writeoffs, Mr. Lynch estimated that Independent's equity at the deal's closing, which is expected some time in the first quarter of 1995, will be approximately S112 million, making the purchase price 141% of book value. That would equal a little more than 3.1% of Caliber's $1.5 billion in deposits.

Independent chairman Richard D.C. Whilden said he expects that tangible book value at the closing will be lower, leaving the price nearly 1.7 times the company's book value. His calculation apparently takes into account about $11 million in unrealized losses from Independent's securities portfolio.

Independent was organized two years ago by the Contrarian Group, a partnership sponsored by California businessman Peter V. Ueberroth. When interest rates rose earlier this year, the company was forced to mark its securities to market and take a charge against equity. The losses pushed capital below levels required by regulators.

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