Magazine article American Banker

Orbanco to Shrink with Sale of Largest Asset to BankAmerica

Magazine article American Banker

Orbanco to Shrink with Sale of Largest Asset to BankAmerica

Article excerpt

PORTLAND, Ore. -- The Orbanco Financial Services Corp. will shrink dramatically as the result of the sale of its largest asset, the Oregon Bank, to the BankAmerica Corp.

An agreement for the sale of the bank, the third largest commercial bank in Oregon, and related subsidiaries was announced two weeks ago. BankAmerica will pay at least $57 million in cash when the transaction is closed.

That is expected to be July 1, 1986, the first day that out-of-state banks can acquire Oregon banks under legislation passed in Oregon this year. The agreement allows the Oregon Bank to pay up to $3 million in dividends to Orbanco prior to closing.

The purchase will round out BankAmerica's West Coast coverage. It acquired Seafirst Corp., owner of the largest bank in Washington state, in mid-1983 after losses on energy loans wiped out Seafirst's capital.

Orbanco's yearend balance sheet shows that the Oregon Bank accounted for 80% of Orbanco's assets. The bank had 920 employees at yearend, or 70% of Orbanco's total.

The bank's 49 offices are concentrated in Portland, Salem, and Eugene. At yearend it had $787.8 million of deposits and net loans of $589.7 million.

In addition to the Oregon Bank, BankAmerica will acquire Orbanco Real Estate Services Co., which originates loans for the Oregon Bank and services a mortgage portfolio; American Data Services, which provides data processing to Orbanco and other financial institutions; and Orbanco Securities, a broker-dealer.

Orbanco, hard hit in the 1980s by the near-depression in the forest industry in Oregon, had announced in February it was up for sale. On Friday, Francis J. O'Connor, Orbanco president, said the company is continuing discussions regarding the sale of its other principal subsidiary, Northwest Acceptance Corp. Sale of that subsidiary would effectively result in Orbanco's liquidation. …

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