As word of the proposed megamerger between First Bank System Inc. and U.S. Bancorp spread Thursday, community bankers in the Pacific Northwest said they are eager to compete with what would be a $70 billion-asset institution.
These bankers said they looked forward to taking advantage of the confusion, unhappiness, and dislocation among customers and employees that they said was sure to result from the deal.
"It's a tremendous opportunity for our bank," said John V. Evans Jr., chief executive officer of $135 million-asset D.L. Evans Bancorp in Burley, Idaho. "We've already been targeting the merger activity, and we're going to hit them hard again."
Many western community bankers are seeing dollar signs as they recall how much they benefited, both in branch purchases and new business, from Wells Fargo & Co.'s purchase last year of First Interstate Bancorp.
But the current merger is markedly different. Significant overlap and a different culture led Wells to shed many First Interstate branches and employees and drop the First Interstate name. Neither condition exists with the partners in Thursday's deal.
"That's a much different situation than we see with the U.S. Bank-First Bank deal," said Gary L. Sirmon, president and chief executive officer of $996 million-asset First Savings Bank of Washington Bancorp in Walla Walla. If U.S. Bancorp's name were being changed, "we'd have more of a positive reaction because of the uneasiness that corporate change creates in small rural markets. In this case, I just don't see that happening."
The planned merger between $33 billion-asset U.S. Bancorp and $37 billion-asset First Bank would create a national banking powerhouse, with nearly 900 branches in 17 midwestern and western states.
But the community bankers weren't daunted by the size or strength of their potential new competitor.
"We were competing against a $33 billion institution, and now we'll compete against a $70 billion institution. What's the difference?" said William E. Martin, president and chief executive officer of $631 million- asset Pioneer Bancorp. in Reno, Nev. "At some point, they can only be so competitive, and how much worse can it be?"
Community bankers said the personal service they can provide far outweighs any technological advantage the larger bank would have.
And they claimed that such relationship banking is more important to customers in the Pacific Northwest than in other parts of the country.
"For us and for other community banks in the state, this will be positive," said Victor L. Bartruff, president and chief executive officer of $712 million-asset West Coast Bancorp in Lake Oswego, Ore. "The community banks in Oregon are very relationship-based, and that will be the difference."
