Fed OKs Wells Fargo-Crocker Deal

SAN FRANCISCO —  Wells Fargo & Co. will take over century-old Crocker National Corp. to become the nation’s 10th-largest bank holding company following approval Tuesday by the Federal Reserve Board.

Wells Fargo will control 16.8% of California’s total bank deposits but will remain the state’s third-largest bank after the acquisition with $42.5 billion in assets. It will trail only Security Pacific National Bank, with $50.1 billion of assets, and Bank of America, with $117.7 billion.

The approval of the San Francisco-based banks’ merger came on a 5-0 vote of the board’s governors in Washington.

Wells Fargo officials expect to complete the acquisition of Crocker by the end of May. Crocker, the state’s fifth-largest bank, employs about 12,000 people. Wells Fargo employs 14,000 people.

“We are committed to carrying out the consolidation of the two companies without disruption in service,” Wells Fargo Chairman Carl E. Reichardt said. “We believe the combination of Wells Fargo and Crocker will allow us to make an even greater contribution to California and the West in the years ahead.”

Bad real estate, agricultural and energy loans dealt Crocker a series of severe losses within the past three years. The bank posted losses of $20 million in 1983 and $324 million in 1984.

Under the leadership of Crocker Chairman Frank V. Cahouet, who imposed an economy blitz, the bank posted a profit of $38 million in 1985.

“All of us at Crocker are proud of the accomplishments which have made us strong and thus attractive to Wells Fargo,” Cahouet said. “During the past two years, we have resolved serious problems, created a very solid balance sheet and restored our earnings.

In February, Britain’s Midland Bank agreed to sell Wells Fargo its 100% interest in Crocker for $1.07 billion.

One of Britain’s four largest commercial banks, Midland first bought a stake in Crocker National in 1981. It took full control of the company in May, 1985, by purchasing $400 million in domestic assets and about $3.1 billion in foreign loans. Midland’s shareholders approved the Crocker sale last Wednesday, and no approval is needed from Wells Fargo shareholders, according to bank officials.

Selling Some Assets

Crocker now has $19.2 billion in assets and Wells Fargo $29.4 billion. Some assets will be dropped before the acquisition is completed, Wells Fargo spokesman Dave Murray said.

Wells Fargo, now the nation’s 13th-largest bank holding company, 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 were approved.

The Fed’s approval of the merger was conditioned on Wells Fargo selling one of its own or one of Crocker’s branch offices in each of seven Northern California cities.

Wells Fargo said it has received preliminary offers to buy branches in all of the cities: Eureka, Redding, Red Bluff, Yuba City, Williams, Placerville and Salinas.