Security Pacific Bank
| Industry | Banking, Financial services |
|---|---|
| Predecessor | Hellman, Temple and Co.; Farmers and Merchants Bank; Security First National Bank; Pacific National Bank |
| Founded | 1868 |
| Defunct | 1992 |
| Fate | Acquired by Bank of America |
| Headquarters | Los Angeles , United States |
Area served | United States, International (including Asian markets) |
Key people | Robert H. Smith (final chairman and CEO) |
| Products | Banking services |
Security Pacific National Bank (SPNB) was a prominent American bank headquartered in Los Angeles, California. In 1992, it was purchased by Bank of America.
History
Originating from Hellman, Temple and Co. established in 1868, SPNB developed from the Farmers and Merchants Bank (founded in 1870) into Security First National Bank. By the middle of the 20th century, it had become the fifth-largest bank in the United States and the third-largest in California by deposit volume, benefiting from economic expansion in the Western U.S. and extending its operations internationally.
In 1967, Security First National Bank merged with Pacific National Bank of San Francisco, resulting in the formation of Security Pacific National Bank. Four years later, in 1971, SPNB acquired a 69% stake in Bank of Canton. Its growth strategy included erecting a 55-story skyscraper in downtown Los Angeles in 1975, now known as Bank of America Plaza.
The bank encountered a significant setback in 1978 when consultant Stanley Rifkin exploited its telegraph transfer system to steal $10.2 million electronically. The misappropriated assets were converted into Russian diamonds, which were subsequently sold at a loss by the bank.
The Norco robbery in 1980 exposed security weaknesses but had minimal lasting effects on SPNB’s operations. By 1984, SPNB completed full ownership of Bank of Canton for approximately $42 million while retaining its existing leadership to bolster its foothold in Asian markets.
In 1985, SPNB faced legal disputes concerning fees charged on trust accounts; nevertheless, it continued expanding through acquisitions such as The Arizona Bank (1985) and California Pacific National Bank (1986), focusing on serving ethnic banking communities. Negotiations with American Asian Bank further extended its influence within Chinese-American markets.
The acquisition of Rainier Bancorp for $1.15 billion in 1987 marked SPNB’s entry into the Pacific Northwest region. Late in the decade, additional consolidation occurred with the purchase of Bank of Canton (which was renamed Security Pacific Asian Bank) and American Asian Bank, strengthening its presence in Asian-American banking sectors.
Although aggressive acquisitions during the 1980s contributed to rapid expansion, SPNB’s financial health declined due to risky financial practices and vulnerability to the early 1990s recession coupled with Southern California’s real estate downturn. Regulatory authorities increased oversight amid concerns about possible repercussions linked to the savings and loan crisis.
On April 22, 1992, SPNB merged with San Francisco-based BankAmerica (presently known as Bank of America), constituting one of the largest banking mergers at that time. Regulators mandated the divestiture of SPNB’s Washington subsidiary, Rainier Bank, to avoid excessive market dominance; its branches were sold to West One Bancorp (now U.S. Bancorp) and KeyBank. Following this, BankAmerica expanded into Nevada by acquiring Valley Bank of Nevada.
After the merger, rebranding efforts included renaming Security Pacific Asian Bank as Bank of America (Asia) in 1993. In 1994, Arab-Malaysian Bank purchased SPNB’s operations in Malaysia.
In 2000, Robert H. Smith—the final chairman and CEO of SPNB—authored Dead Bank Walking: One Gutsy Bank's Struggle For Survival And The Merger That Changed Banking Forever, which chronicles the merger and challenges encountered by the bank.
New Security Pacific Bank
In February 2005, Network Bank USA, previously known as Golden Pacific Bank, adopted the name Security Pacific Bank. Although it featured a comparable interlocking "S" emblem, this institution was not affiliated with Bank of America or the original Security Pacific National Bank. The bank ceased operations on November 7, 2008, with its assets subsequently purchased by Pacific Western Bank.