Valley National Corp., whose principal subsidiaries include Valley Bank & Trust Co. of Utah and Valley National Bank of Arizona, has been acquired by Banc One Corp. of Columbus, Ohio.
The agreement calls for the exchange of 1.2 shares of Banc One common stock for each share of Valley National Corp. Based on Monday's closing price, total value of the transaction is approximately $1.2 billion. The transaction, subject to shareholder and regulatory approval, should be completed by Jan. 1, 1993.The agreement was announced jointly Tuesday morning by Banc One Corp. and Valley National Corp. officials.
"We have looked long and hard at the prospects of Valley National joining Banc One. We are particularly impressed with the new senior management team put in place by the Valley National board of directors. After substantial due diligence, we are satisfied that they have acted aggressively to get problem loans under control," said John B. McCoy, chairman and chief executive officer of Banc One, in a prepared statement.
Banc One is a bank holding company, which owns 57 affiliate banks with 869 offices in Indiana, Kentucky, Michigan, Ohio, Texas and Wisconsin.
Its 1991 net income was $529 million, ranking fifth among U.S. banks. Banc One's return on assets was 1.56 percent, first among U.S. banks. Banc One had assets of $46.3 billion as of Dec. 31, 1991, and total equity of $3.4 billion.
Valley National Corp. had assets of $10.7 billion as of Dec. 31, 1991, and operates 206 offices in Arizona, 35 in Utah and seven in California.
Mike Danielson, president and chief executive officer of Valley Utah, said Tuesday the merger should not affect either the bank's customers or employees.
Utah customers should notice little difference in service other than a name change and availability of new products. Banc One helped pioneer automatic teller machines, Danielson said.
"Banc One Corp. has a practice of retaining the existing management and letting them continue to make their own decisions," he said.
Danielson said the merger should be a positive partnership. "Banc One recognized the value of the Utah and Arizona franchises, and it is paying a good premium for that. It lets us go forward with a very sound financial partner," Danielson said.
Valley Bank was founded in 1948 years ago by a group of South Salt Lake businessmen with $75,000 capital. It now employs 506 people at its 35 Utah offices, 22 of which are in the Salt Lake metropolitan area. It was acquired by Valley National Corp. about five years ago.
Danielson said Valley Utah has undergone a "back room consolidation," trimming its work force by nearly 200 employees within the past three years.
Valley Bank Utah was originally put on the block in June 1990, when cash-strapped Valley National announced it wanted to focus its operations in Arizona.
First Boston Corp. of New York was retained by Valley National to solicit offers for Valley Utah and another subsidiary bank, California Valley Bank. Valley National officials stressed at the time that they would sell the subsidiaries only at a price they deemed beneficial to Valley National's shareholders.
At the time, industry watchers speculated that the most likely buyer of Valley Utah would be BankAmerica or Wells Fargo in California and Security Pacific or U.S. Bank in Oregon. Utah's Zions Bancorp and First Security Corp. were also possible candidates.
But in March 1991, Valley National announced it had reversed its decision to sell its Utah and California subsidiaries, saying its once precarious financial condition had improved.