Wells Fargo & Co., which has been integrating recently acquired First Interstate Bancorp at a record pace, has acknowledged a rarity: a deadline that will be missed.
A recent 10Q filing for the first quarter reported that 120 branch closings planned by yearend will be delayed until the first quarter of 1997.
Though most analysts said this development is of little importance financially, at least one prominent team has labeled it a harbinger of future disappointments.
"We believe that the slower reconfiguration will make it difficult for the company to meet aggressive consensus (earnings) estimates (from analysts) that are about 8% higher than our numbers," Oppenheimer & Co. analysts Cheryl Swaim and Chris Kotowski wrote in a recent note to investors.
The April 1 merger has delayed a previously planned transition to supermarket branching in California. Officials at San Francisco-based Wells had said they expected to close hundreds of traditional branches and open hundreds more in supermarkets to bring their California network to 1,075 outlets by yearend; nearly three-quarters would be in stores.
It had been widely anticipated that the merger, in which 85% of First Interstate's 406-branch network in California is being shuttered or sold, would slow Wells' transition to supermarket branching in California.
Executive vice president and branch banking chief Joseph Stiglich said openings of in-store outlets are continuing apace. The company now has some 535 in-store branches in the Golden State, putting it within spitting distance of the yearend target of 774.
Likewise, no delay is anticipated in merger-related branch closings. These are to happen in two waves, on the weekends of July 27 and Aug. 10.
In early March, the shuttering of traditional branches tied to openings of supermarket outlets started as planned, with closings of an initial batch of 13 branches in Sacramento. But other closings slated to proceed throughout 1996 have been suspended until the fourth quarter.
"We have put it on the back burner very temporarily," Mr. Stiglich said.
Mr. Stiglich added that Wells' efforts to get customers to accept alternative outlets appear to be working.
In Sacramento - the first big test market for the new strategy - Mr. Stiglich said lost business is running below projections, with no measurable decline in account balances, and there is continued growth in new accounts.
Mr. Stiglich added that 70% of the new accounts opened by Wells are ATM- style checking accounts, in which customers are asked not to use tellers. The bank had imposed a $5 surcharge for each month in which an account holder visited a teller; to make those accounts more attractive, Wells last month dropped that surcharge.
