Zions Bancorp. of Salt Lake City has agreed to a branch swap with one of the West's fastest-growing banking companies.
A Zions branch in Greeley, Colo., would be traded for a Nephi, Utah, branch owned by $6 billion-asset Community First Bankshares of Fargo, N.D.
Zions, which has $16.7 billion of assets, has been looking to expand in Utah. It suggested the swap after first proposing to buy the Nephi branch outright. Nephi is about 80 miles south of Salt Lake City.
"We have an office that makes more sense in their network, and they have one that makes more sense in ours," said Harris H. Simmons, Zions' president and chief executive officer.
Such swaps are not unprecedented. In 1994, for example, Cullen/Frost Bancshares in San Antonio traded one of its Dallas branches for a Texas Commerce Bancshares branch in Corpus Christi.
But neither Zions nor Community First, two of the most acquisitive bank companies in the West, has ever done a branch swap.
"This certainly is not an ordinary transaction," said Donald R. Mengedoth, chairman and CEO at Community First.
The trade, structured as complementary purchases so as not to complicate getting clearance from regulators, is expected to close in July. Financial terms were not disclosed, but Mr. Mengedoth said Community First would pay slightly more because the Colorado branch has more deposits-$20 million versus $15.4 million.
Zions and Community First are shedding branches where their presences are small.
Community First, which has branches in 11 states, inherited the Nephi branch last year from Bank One Corp. in a package 37-branch deal. The North Dakota company runs a distant second in local deposits; First Security Corp. of Salt Lake City holds 66%.
Similarly, Zions has only a tiny market share in Greeley - less than 2%. And Mr. Mengedoth said Community First is eager to expand there. "It has been a very good market for us," he said.
Community First entered Greeley last year by buying First National Bank of Colorado. Its two branches there have $66 million of deposits, 6.4% of the market. The Zions deal would boost that to 8.3%. u