St. Louis' First Banks Inc. is on the lookout for acquisitions to fill in its 26-branch California franchise, the CEO of two Golden State subsidiaries said.
The company is also moving a branch and loan office in anticipation of possibly merging the two subsidiaries.
An official of the $3.7 billion-asset company, whose controlling owner is chairman James F. Dierberg, said they are seeking to make the branch networks of First Commercial Bancorp and Sunrise Bank of California more efficient and convenient for customers.
A third California subsidiary, $500 million-asset First Bank and Trust of Santa Ana, has plans to buy several branches from BankAmerica Corp. and Highland Federal Bank.
First Banks is also eyeing further expansion in the Golden State.
The company has branches throughout the San Francisco Bay area but is still "pretty thinly distributed," said Donald W. Williams, executive vice president of First Banks and chief executive officer of both First Commercial and Sunrise. And in Southern California, the company has a "nice presence" in Santa Barbara and Santa Maria, as well as Long Beach and Orange County, but nothing in between.
In particular, he said, the company would like to expand in the San Fernando Valley, Los Angeles, Ventura County, and the San Diego area.
"We would like to add to and fill in the franchise that we've developed," Mr. Williams said. "Our goal is to expand our business in California."
Rumors have been flying in the Sacramento area that the parent company may be interested in buying Surety Bank, Vallejo, a lackluster performer sited between the Bay area and Sacramento.
"If they were interested in us, we would be interested in them," Mr. Williams said.
"In order to have a meaningful presence in a state as large as California, both geographically and in terms of its economy, 26 branches is not enough to have a complete franchise," he said. "We need to add to it. North, south, central, we're interested."
As for the plan to cut overlap and costs by moving a branch and a loan production office of Sunrise Bank, "it's really a repositioning," Mr. Williams said. "We're trying to put our physical locations where our customers are. We'll be able to serve our existing client base better out of the new locations."
First Commercial, with $150 million of assets and six branches, is based in Sacramento; and $100 million-asset Sunrise, with two branches, is based in Roseville, 20 miles to the north. Sunrise also has a loan production office that specializes in lending to condominium and homeowners associations.
No plan has been announced by First Banks to merge the two banks, but Mr. Williams noted that they "operate in an overlapping marketplace, so it would make sense to do something."
Already, the two banks are operating under an agency agreement that allows them to process transactions for each other. That means customers of one bank can do business at branches of the other.
"We've already taken steps so that the banks can act in concert with each other," Mr. Williams said. "What we have not done is take the legal step of combining those entities."
First Banks is also looking to expand in Texas, where it has $275 million of assets, as well as in its primary markets of Missouri and Illinois. "We're interested in expanding our business in all of our markets," Mr. Williams said.