The merger with hometown rival Zions Bancorp. would achieve two goals for First Security Corp. chairman and chief executive officer Spencer F. Eccles: pleasing shareholders and keeping First Security from falling into the hands of an out-of-state company.
Mr. Eccles and his erstwhile rival, Zions CEO Harris H. Simmons, have repeatedly stressed how much they value independence.
"I did say I would never agree to sell," Mr. Eccles, 64, said Monday. "But I looked at the realities of the rapidly consolidating marketplace and the needs of shareholders," he said. "This allows us to work on a common vision for Utah."
To Mr. Eccles and Mr. Simmons, who are both from illustrious Utah families, the state's well-being is of paramount concern. They say that the leadership of the combined bank will work harder than an out-of-state management would to minimize the impact on employment-even as they plan big cuts in their number of branches.
Both men see the world from a Salt Lake City perspective. They say that a $40 billion banking company would preserve their city's status as a banking center, though the merged entity, to be called First Security, would remain small relative to the biggest banks with their hundreds of billions of assets.
"A real driving factor is the benefits this will bring to Salt Lake City," Mr. Eccles said in an interview. "There is an old saying in this part of the country: A fair exchange is no robbery."
Zions traces its ancestry back to a bank founded by Brigham Young in 1873. The Mormon Church owned a majority stake until 1960, when it sold its shares to Harris Simmons' father.
The Eccles family co-founded First Security in 1928. Marriner S. Eccles, Spencer's uncle, was chairman of the Federal Reserve Board during the Franklin D. Roosevelt administration. Another uncle, George S. Eccles, succeeded Marriner at First Security and was CEO for 37 years.
The two companies have been spirited but respectful rivals, as reflected in the relationship between CEOs.
"We've been longtime competitors, but seldom has it gotten even close to a level of animosity," Mr. Simmons said. "This is a small enough town that you won't succeed if that's how you're going to compete."
There is an element of torch-passing from Mr. Eccles to Mr. Simmons, who, "at age 44, has the energy and proven leadership" to take on the CEO role by himself in 2002, Mr. Eccles said. They plan to be co-chief executives until April that year, when Mr. Eccles would become nonexecutive chairman.