Bank America Corp. and Security Pacific Corp. announced Monday they will merge, creating an institution with $190 billion in assets and a commanding position in the western United States.
The merger will also combine extensive international operations, particularly in Asia.The merger was approved Sunday by the boards of directors of both institutions, calling for a stock-for-stock transaction with each share of Security Pacific common stock being exchanged for .88 new shares of Bank America common stock on a tax-free basis.
The new company will be called BankAmerica Corp.
Richard Rosenberg, chairman and chief executive officer of Bank America, will be chairman and chief executive officer of the new BankAmerica. Robert Smith, chairman and chief executive officer of Security Pacific, will be president and chief operating officer.
The new BankAmerica will have more capital and more domestic assets - along with the largest branch network of any existing or proposed U.S. banking company.
"We intend to build on the strengths of both institutions to create a highly profitable new banking enterprise that will become pre-eminent in the United States and even better positioned on a global basis," Rosenberg said in a statement.
He said the merger is part of a process "necessary to make U.S. banks more competitive in the world again."
Bank America Corp. is parent to the largest banks in California and Washington. It also has banking operations in Arizona, Idaho, Nevada, New Mexico, Oregon, Texas and Utah.
Founded in 1904, Bank America is the nation's second-largest bank holding company.
Security Pacific is the parent company of banking operations in seven Western states and has other financial services activities in more than 40 states. Founded in 1871, it is the nation's fifth-largest bank holding company.