Newspaper article THE JOURNAL RECORD

California Law Expected to Impact Lenders' Consolidations / Pace Expected to Pick Up

Newspaper article THE JOURNAL RECORD

California Law Expected to Impact Lenders' Consolidations / Pace Expected to Pick Up

Article excerpt

LOS ANGELES - As California's regional interstate banking law goes into effect, the pace of consolidation between lenders in the West and Southwest is expected to pick up steam, industry officials say.

That consolidation is expected to continue for 3 1/2 years when California will begin permitting nationwide interstate banking, giving the financial behemoths of New York an opportunity to tap California's rich deposit base.

California's Legislature, in a compromise, last year agreed to permit regional interstate banking beginning Wednesday. But it deferred until Jan. 1, 1991, the opening of California's borders nationwide.

Already, many of California's major banks and thrifts have agreed to buy institutions in the West and Southwest, and Arizona has received particular attention by lenders as a region where growth is expected in the future.

But the biggest deals were farther afield. Security Pacific Corp. of Los Angeles agreed to acquire Seattle-based Rainier Bancorp for $1.1 billion, and Los Angeles-based First Interstate Bancorp agreed to gobble up Allied Bancshares of Houston for between $415 and $450 million.

The states covered by the California's regional banking law are Alaska, Arizona, Hawaii, Idaho, Nevada, New Mexico, Oregon, Texas, Utah and Washington.

Besides going into Washington, Security Pacific, the nation's sixth-largest bank holding concern, has spread into Oregon and Arizona. First Interstate, the nation's ninth-largest banking company, is in New Mexico, and Union Bank bought an institution in Arizona.

Among savings and loan companies, H.F. Ahmanson, Great Western, CalFed and First Nationwide have acquired foothoolds in Arizona, while Gibraltar and Great American First Savings are expanding in Washington.

``I don't see any immediate flurry of new mergers because of the July 1 date,'' says Nancy Sheppard of the California Bankers Association in San Francisco. …

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