SEATTLE -- Balloons of many colors, trays of cookies and urns of coffee greeted employees and patrons of the 162 Seattle-First National Bank branches in Washington state Friday, heralding the biggest merger in U.S. banking history.
The balloons showing the emblem of Seafirst Corp., holding company of the state's largest bank, said 'Thank you' to customers who kept their accounts with the bank as it struggled to offset the impact of heavy losses in poor energy loans.
The endangered banking company found its rescue in a merger with the giant BankAmerica Corp. of San Francisco.
Seafirst's losses in energy loans, much of them through the defunct Penn Square National Bank of Oklahoma, amounted to $224 million in 1982 and the first quarter of this year. More losses are anticipated in the Seafirst energy portfolio.
Seafirst executives and employees sighed in relief Tuesday when stockholders, as expected, gave overwhelming approval to the merger.
Employees at Seattle-First banks appeared to be in a perked-up mood as they worked through the first day of their company operating as a subsidiary of BankAmerica.
Yvonne Jamison, a secretary at a Seattle branch, said she felt 'great.'
'Everything is settled and we can get back on the right track again,' she said.
Other than the festive decor of balloons and refreshments, there was nothing visible to mark the merger.
The big immediate effect will be a $150 million cash infusion to put new financial life into Seafirst and help the bank win back large deposits that were parked elsewhere as the company fought to weather its problems.
Under terms of the merger, Seafirst stockholders will receive for each share a cash payment from BankAmerica of $7.60 plus .30 share of nonvoting BankAmerica preferred stock currently valued at about $25 a share.
If additional energy loan losses exceed $350 by 1988, the preferred stock will be devalued. In a worst case situation, its value could sink to $2.
Through 1988, Seafirst stockholders are guaranteed a fixed dividend on the BankAmerica preferred stock.