The blockbuster deal of 1996 - Wells Fargo & Co.'s takeover of First Interstate Bancorp. - helped set off an extraordinary surge of acquisitions across California and the West.
The result: One-third of the value of all bank merger and acquisitions unveiled during 1996 were sales of banks and thrift institutions in the Golden State. Put another way, three of the six billion-dollar-plus deals put on the books last year were in California.
After a rocky courtship, Wells Fargo and First Interstate announced their $10.9 billion combination in January and completed it in the spring. In the wake of the Big One, there were seven other major deals worth nearly $3.6 billion and smaller ones as well.
Not surprisingly, the heavy West Coast activity required the talents of many investment bankers and lawyers. Montgomery Securities, San Francisco, assisted eight deals, while CS First Boston Corp. helped arrange six, and Goldman, Sachs & Co. had a role in four.
Perhaps the most notable transactions of the year involved big thrifts, where consolidation has long been expected. American Savings Bank, Irvine, was sold to Washington Mutual Inc. for $1.4 billion, doubling the size of the Seattle thrift, while Cal Fed Bancorp, Los Angeles, went to First Nationwide Bank for $1.2 billion.
But in a relatively less noticed development, a troupe of California's "second-tier" banking companies also went under the hammer last year, some to out-of-staters and some to close neighbors.
Moving to raise its West Coast presence, especially in the San Francisco area, U.S. Bancorp. paid $327 million, or 2.5 times book value, for California Bancshares of San Ramon. Meanwhile, WestAmerica Bancorp., Fairfield, Calif., acquired Vallicorp Holdings, Fresno, for $304 million and Commerce Security Bancorp. bought Eldorado Bancorp, Tustin, for $90 million.