Norwest Corp. said Monday that it had agreed to buy Amfed Financial Inc. of Reno for about $197 million in stock.
The acquisition, expected to be completed early next year, would make Nevada the 16th state in which $67 billion-asset Norwest has a consumer banking presence.
Amfed is the parent of American Federal Savings Bank, the second-largest thrift and fourth-largest financial institution in Nevada, on the basis of assets. It ranks third in deposits, ahead of the rival thrift, Primerit Bank of Las Vegas.
Minneapolis-based Norwest said it plans to retain Amfed's federal savings bank charter.
According to the definitive agreement, based on Norwest's July 21 share price of $28.50, the company would exchange 1.228 of its shares for each one of Amfed. The agreed-upon value of $32 per Amfed share equals 1.36 times its June 30 book value, and Amfed has the right to terminate the deal if the exchange ratio falls below $31.
Amfed's stock price closed Monday at $28.75, up $3, while Norwest's was down 25 cents to $28.25.
Seeking to join California-based First Interstate Bancorp and BankAmerica Corp. with sizable banking interests in Nevada, Norwest was drawn to the state's healthy economy and growth prospects.
"We see it as, first, an attractive place to be, and second, a natural extension to our geographic range," said Norwest chief executive Richard Kovacevich. "Nevada has been the fastest-growing state, both economically and in population, for the past several years, and that's certainly an important part of our reason for wanting to be there."
As of June 30, Amfed had shareholder equity of $138.3 million, assets of $1.58 billion, and an 11% share of the state's deposits, Norwest said.
The thrift has 506 employees and 43 offices, including 23 in the Las Vegas area and nine in and around Reno. They would add to Norwest's current count of 647 community banking offices and 3,024 "stores" in total, which include mortgage and finance subsidiaries in all 50 states, Canada, and other countries.
Norwest Financial, Norwest Mortgage, and related companies have 24 locations in Nevada.
Amfed will give Norwest "far more meaningful positioning in Nevada," said Advest Inc. analyst Frank Barkocy.
"The price seems to be right," he added.
Mr. Kovacevich said Amfed would immediately boost Norwest earnings.
