Magazine article American Banker

BankAmerica Hits Snag Selling Arizona Branches

Magazine article American Banker

BankAmerica Hits Snag Selling Arizona Branches

Article excerpt

SAN FRANCISCO -- BankAmerica Corp. is finding little demand for the 49 Arizona branches it must unload to satisfy antitrust concerns related to its acquisition of Security Pacific Corp., according to sources.

The lack of interest is raising the possibility that BankAmerica could be forced to pay one or more buyers to take the branches off its hands.

The major obstacle: Relatively few loans would be included with the $2.4 billion in deposits on sale. That would leave a buyer with the uneviable task of having to invest the deposits at a time of slack loan demand and low interest rates.

Problems Seen as 'Premature'

Frank N. Newman, BankAmerica's chief financial officer, said Tuesday it is "premature" to say the company is having problems selling the Arizona branches. The details of the branch package have just become known, he said in a television phone interview.

BankAmerica late last month agreed with Arizona's attorney general to dispose of 49 branches to settle antitrust issues raised by its merger with Security Pacific. About 28 of the branches are in the Phoenix area.

No one has yet submitted a formal proposal to acquire any of the branches, sources said. But an investor group led by former Valley National Corp. chairman James P. Simmons may ask BankAmerica to pay it to acquire some Phoenix-area branches, sources said.

Reverse Payments Hinted

A second, unidentified investor group, is reportedly considering a bid requiring BankAmerica to pay it more than $1 million to acquire branches and deposits outside Phoenix. …

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