BankAmerica to Sell Units to Get Merger OK

BankAmerica Corp. is preparing a plan to ease antitrust concerns by federal officials through the sale of some branches and deposits in the wake of its proposed acquisition of Security Pacific Corp., industry sources said Wednesday.

The heart of the plan involves selling some branches in Washington state, where the combined bank would be the dominant institution by far, and in Arizona, where BankAmerica has expanded aggressively by purchasing failed thrifts from the government.

It would also involve selling some branches in California, where the combined bank would not have as great a share of the market because of extensive competition. Sources identified the most likely sites for California branch sales as areas in Riverside County and in parts of the San Joaquin Valley around Fresno.

Peter Magnani, a spokesman for the San Francisco-based bank, declined to specify BankAmerica’s plans other than to say the bank “plans to divest some branches in markets where both firms now compete to facilitate regulatory approval.”

Banking sources said gaining quick regulatory approval of the acquisition--now projected by the end of February--is BankAmerica’s clear priority as reflected in its willingness to shed some operations of the combined banks to satisfy regulators and Justice Department officials. BankAmerica plans to acquire Security Pacific in a stock swap valued Wednesday at $4.7 billion.

BankAmerica officials have publicly downplayed antitrust concerns, noting that they face fierce competition not only from other banks but also from thrifts and non-banks such as financial units of Sears, Roebuck & Co.; Ford Motor Co.; General Electric Co., and American Telephone & Telegraph. But sources said BankAmerica is showing no signs of pressing the competition argument, presumably to speed up the approval process. Rather, it is addressing the traditional method of evaluating antitrust concerns, which is to look at the concentration of banking services in various markets.

Bankers in Washington, where BankAmerica operates as Seafirst and Security Pacific under its usual name, said they have heard that BankAmerica plans to sell 35 to 60 branches. Edward A. Sheldon, president of National Bank of Bremerton, said the number he hears most often is 39. American Banker, a banking industry trade publication, said BankAmerica is expected to sell more than $1 billion of deposits in Washington.

Mike Edwards, president of Prairie Security Bank in Yelm, Wash., and the state’s former top banking regulator, said BankAmerica would most likely sell the branches in a package to an institution that it doesn’t already compete against in the state. Bankers and other sources mentioned two Minneapolis-based banks, Norwest and First Bank System, as possible buyers. Others include San Francisco-based Wells Fargo, major Canadian banks and institutions from Hong Kong and Japan.