Few banks have a retail presence in three of the top four U.S. population centers. There are the likes of Citicorp, and then, of course, there's First Banks Inc.
Who?
St. Louis-based First Banks Inc. - not to be confused with the much larger First Bank System of Minneapolis - recently bought two banks in Orange County, outside Los Angeles.
And, rumor has it, the $2.7 billion-asset banking company is not through with its expansion there.
Earlier this year First Banks bought a thrift in Chicago and a 60% equity stake in BancTexas Group Inc., which has a large indirect auto business with outlets in Houston.
Sitting atop this small, yet suddenly expensive banking empire is James F. Dierber , the 56-year-old owner. He and his family control 100% of the company.
In the 1980s Mr. Dierber, ruffled some feathers with hostile takeovers - uncommon in the banking industry - and two years ago he made unsolicited bids to the management of local Missouri banks and thrifts.
In a recent interview he conceded he may make more unsolicited bids for banks. But thus far his style in California, like the state, has been more laid back.
And his fascination with California, and Texas, could foreshadow an onrush of buyers into those states as the more than 1,200 community banks located there face the realities of declining profits and increased competition.
"We needed to go to California if we are going to be a survivor in the next 100 years," Mr. Dierberg said. "The Midwest is a mature market for acquisitions. But there are going to be acquisitions for the next 10 years in California and Texas."
Mr. Dierberg, who spoke from a hotel pay phone in California, is scouring the state for further prospects. The first acquisition, $310 million-asset CCB Bancorp, was brought to his attention by Keefe, Bruyette & Woods Inc.
He is expected to cement First Banks' presence in Orange County with more acquisitions by the end of the year, making it one of the largest banks in that conservative county.
If successful, Mr. Dierberg could represent the prototype of the future community bank - a nimble, aggressive competitor that can parachute into areas dominated by superregionals and offer services struggling local community banks can no longer afford.
And while the expanding superregionals are criticized for their bureaucratic indifference, community banks are defined by their caring, local services.
This means the dangers national banks face in managing far-flung operations - losing touch with their customers - may not be problematic for First Banks.
"We play well against Fargo and Bank of America in the sense that they are more interested in the 60% to 70% of the market, but we are interested in that 30% to 40% of the market that requires a closer touch," he said.
This may sound like the typical argument of the community bankers who are fearful as their territories are surrounded by superregionals. But it is Mr. Dierberg who is on the move.
If community banks do follow in Mr. Dierberg's footsteps, they will have to face one obstacle he did not. As a private company, First Bankt need not allay shareholder concerns about costly and dilutive expansion.
But even if he did, said one analyst, there would be few problems.
"Jim is a value buyer," said analyst Joseph A. Stieven of Stifel, Nicolaus & Co. in St. Louis, which has provided investment banking services to First Banks in the past. "He buys value situations and runs them efficiently."
California is a value situation, Mr. Dierberg said, because there are few buyers who will venture into the state due to its economic travails.
In fact, aside from Comerica Inc., First Banks may be the only out-of-state bank to buy into California in the last few years.
According to Mr. Stieven, First Banks routinely delivers 15% return on equity, uncommon in an industry known for its highs and lows.
Mr. Dierberg also owns equity stakes in a number of midwestern institutions. When he made an unsolicited bid for Home Federal Bancorp in 1992, the board rejected the offer, but accepted a better offer from Roosevelt Financial Group.
As a result, Home Federal shareholders - including Mr. Dierberg - did very well.
Mr. Dierberg dismisses claims he has upset the staid world of midwestern community banking by launching unsolicited bids and tender offers.
Of course, criticism surrounding layoffs and loss of independence are to be expected when one bank acquires another.
And when it comes to sour grapes, Mr. Dierberg is particularly sensitive: He also owns the Hermannhof Winery in Herman, Mo.
The winery's white wine, vignola, won a prestigious award at the Orange County wine festival in 1992, the first non-California wine to do so.
It is only coincidence, Mr. Dierberg said with a laugh, that he now buys banks there too.
Expansion, in Texas is also high on his priority list. In May he agreed to invest $30 million in the $370 million asset BancTexas Group Inc.
Mr. Dierberg said he plans to use that holding as a base to expand further. Into Texas by purchasing small banks that larger acquirers may ignore.
First Banks grew out of the Dierberg grocery chain before the two businesses had to be legally separated after passage of the Bank Holding Company Act during the Depression.
Since that time, and particularly of late, it has slowly and aggressively expanded its midwestern presence, from a few outlets in the St. Louis area to 85 offices in Missouri and Illinois.
Mr. Dierberg made the strategic decision to expand the bank into large metropolitan areas.
In January, First Banks completed the acquisition of First Federal Savings Bank, a $230 million-asset thrift in Chicago.
But now, Mr. Dierberg says, the area is mature and the opportunities are elsewhere.
"The possibilities are limited in Illinois," he said. "The people who wanted to sell have sold. There is just not a big out there waiting to be sold."
Mr. Dierberg said he will look to make a few more acquisitions this year, and then bide his time in 1995 managing his new holdings.
