Magazine article American Banker

First Interstate, Back on Prowl, Buying Cal Rep in Stock Deal

Magazine article American Banker

First Interstate, Back on Prowl, Buying Cal Rep in Stock Deal

Article excerpt

SAN FRANCISCO -- Signaling that its acquisition machinERY Is again in gear, First Interstate Bancorp on Tuesday said it will buy Cal Rep Bancorp of Bakersfield, Calif., for $68 million in stock.

The transaction, if approved, would be the Los Angeles-based company's first unassisted acquisition in four years.

Cal Rep, the holding company for California Republic Bank, has assets of $569.5 million and 12 branches in the southern end of California's Central Valley region. The deal would make First Interstate, now a bit player in the Bakersfield area, its second-largest bank by market share.

Strategy of Dominance

The acquisition is consistent with 'the company's strategy of acquiring a dominant position in local banking markets.

As First Interstate has repaired its capital and credit quality over the past two years, it has purchased branches and deposits of failed institutions from the federal government.

In one deal earlier this year, it bought five thrift branch the Central Valley.

A spokesman said that First Interstate's last acquisition of a whole bank occurred in 1989.

The company, the nation's 12th-largest bank, with $49 billion of assets, said last year that it would become an active acquirer again. It identified Southern California, Texas, and Washington as priorities.

Edward Carson, First Interstate's chairman and chief executive, said in Baltimore Tuesday that the company will continue to explore expansion opportunities, particularly in its home markets, Reuters reported. …

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