U.S. Approves Wells Fargo Acquisition Of Crocker National
WASHINGTON (AP) _ The Federal Reserve Board announced approval today for Wells Fargo & Co. to buy Crocker National Corp., an acquisition that would make Wells Fargo the 10th largest bank holding company in the country.
Both banks have their headquarters in San Francisco. Wells Fargo is now the nation’s 13th largest bank holding company; Crocker National is the 25th largest.
The Federal Reserve Board’s approval, which was necessary before the merger could go through, came on a 5-0 vote.
Britain’s Midland Bank PLC on Feb. 7 announced it had agreed to sell its 100 percent interest in Crocker National Corp. to Wells Fargo in a deal valued at $1.07 billion.
The board said it was granting approval for the acquisition even though it would mean that California’s third and fifth largest banks would be merging, creating a bank that will control 16.8 percent of the state’s total bank deposits.
Midland, one of Britain’s four largest commercial banks, first bought a stake in the financially troubled Crocker National in 1981. Midland took full control of the company in May 1985 by purchasing $400 million in domestic assets and about $3.1 billion in foreign loans.
San Francisco-based Crocker National, with $19.2 billion in assets, is the parent of Crocker National Bank, the nation’s 11th-largest bank.
Crocker suffered a series of losses stemming from bad real estate, agriculture and energy loans in the early 1980s, posting losses of about $20 million in 1983 and $216 million in the final quarter of 1984. Crocker posted a profit of $38 million in 1985 compared with a net loss of $324 million for all of 1984.
Wells Fargo, with $29.4 billion in assets, is the parent of Wells Fargo Bank, the 10th-biggest in the United States. The acquisition of Crocker would make Wells Fargo the second biggest bank in California behind Bank of America.
Wells Fargo had indicated in its merger application to the Federal Reserve Board that it would shed a total of $5.9 billion in assets if the acquisition was approved.
Midland’s shareholders approved the sale last Wednesday. It still must be approved by Wells Fargo shareholders. Officials of Wells Fargo said they expect all legal requirements for the sale to be completed by the end of June.
The selling price represented Crocker’s net asset value as incorporated in Midland Bank’s balance sheets at the end of 1985, and will be transacted entirely in cash.