Bank of the West, as expected, emerged as the big winner in the bidding war for divested Wells Fargo & Co. and First Security Corp. branches.
The San Francisco bank said late Thursday that it would pay roughly $115 million for 30 of the 39 branches Wells and First Security were ordered to sell as a condition of their merger. Twenty-three of the branches are located in New Mexico, mainly in Albuquerque, and seven are in Las Vegas and its suburbs.
"This is a wonderful opportunity to expand our brand of community banking to two western cities with dynamic growth," said Don J. McGrath, president of $10.5 billion-asset Bank of the West and its holding company, Honolulu-based Banc West Corp.
Glacier Bancorp in Kalispell, Mont., and Colonial BancGroup of Montgomery, Ala., are splitting the remaining nine branches.
Glacier, with $1 billion of assets, plans to buy four Wells branches and three First Security offices in Idaho and Utah with total deposits of $185 million. The purchase would be Glacier's entry into Utah and double its number of branches and Idaho, to 10.
Colonial, meanwhile, is buying two First Security branches in Nevada with a combined $105 million of deposits. The $11.6 billion-asset company has 230 branches in six states, including 10 in Nevada.
San Francisco-based Wells announced in April that it was acquiring First Security of Salt Lake City for $3 billion. The divestitures, which totaled nearly $1.5 billion of deposits, were ordered by regulators because of antitrust concerns.
"It is a tremendous disappointment to have to part with great team members and the customers at these stores, yet government regulations are a fact of life and we must abide by them," said Richard Kovacevich, Wells' president and chief executive officer.
Bank of the West operates 118 branches in California, Nevada, Oregon, Washington, and Idaho. In acquiring the 23 New Mexico branches it would have the third-largest deposit share in that state. The bank also said that it plans to establish a 25-employee administrative headquarters in Albuquerque.
The deal for the New Mexico and Nevada branches includes $1.2 billion of deposits and $300 million of loans. Bank of the West would pay a 10% to 11% premium for the deposits and its holding company expects to take a pretax charge of $4 million in the first quarter, when the deal is expected to close.