PORTLAND, Ore. -- The Pacific Northwest's largest banking company said Thursday it has finalized the $118 million purchase of a California savings and loan, which it plans to turn into a commercial bank.
U.S. Bancorp said the thrift's parent, HeartFed Financial Corp., of Auburn, Calif., and its Heart Federal Savings and Loan Association have become wholly owned subsidiaries.
The Portland-based company said by the end of this year or early next year it will turn Heart Federal into a commercial bank and combine it with U.S. Bank of California, already a U.S. Bancorp subsidiary.
HeartFed stockholders will receive .975 shares of U.S. Bancorp stock for each share of HeartFed stock they now hold, which amounts to $27.06 per share of the California company.
Heart Federal has 29 branches in northern California, and had $934 million in assets at the beginning of the year. U.S. Bank of California has 11 branches in the northern part of the state.
U.S. Bancorp owns United States National Bank of Oregon, the largest bank in the state, and U.S. Bank of Washington, the third largest bank in that state. At the beginning of the year, U.S. Bancorp had $17.6 billion in assets.
Tim Hardin, an investor relations officer for U.S. Bancorp, said despite the problems in the savings and loan industry, Heart Federal is a solid thrift with most of its loan portfolio in residential mortgages.
'They haven't dabbled in any high-risk areas,' Hardin said.
HeartFed earned $8.07 million in 1990 and its nonperforming assets were a relatively low 0.23 percent of its total assets.
The two institutions first announced the deal last July 17 and HeartFed shareholders approved the transaction on March 6.