First Banks Inc. of St. Louis hopes to raise its profile in California by uniting its banks there and shifting its state headquarters to a building with an important place in banking history.
The $5.2 billion-asset Missouri company, which has been buying banks in California since 1994, said the consolidation should be completed during the fourth quarter.
"We wanted to build on our California presence," said Frank H. Sanfilippo, executive vice president and chief financial officer. "This is where we see our biggest growth opportunities."
James F. Dierberg, chairman and chief executive officer, said First Banks' Redwood Bank in San Francisco will absorb its other two California banks and take the name of one of them - First Bank and Trust. It would have assets of more than $2.5 billion.
The plan is to move its headquarters to 550 Montgomery St. in San Francisco, which A.P. Giannini built it in 1908 as the headquarters of his Bank of Italy, later renamed of Bank of America. Since 1978 the building has been the headquarters of $203 million-asset Bank of San Francisco, which First Banks announced last week that it would acquire for $63 million.
First Banks has cash deals pending for two other San Francisco banks as well. In June it announced it would buy $177 million-asset Commercial Bank of San Francisco, and in August it made a deal for $104 million-asset Millennium Bank of San Francisco.
The Bank of San Francisco, Commercial, and Millennium deals are scheduled to close by the end of the first quarter. First Banks has already acquired 14 California banks, which it consolidated down to three.
Now, Mr. Dierberg is beginning to turn his attention to Texas. Initially, he said, the company's only Texas bank subsidiary - $302 million-asset First Bank Texas in Houston - will be merged into the new First Bank and Trust in California. But Mr. Dierberg said he could foresee the day when First Banks would reorganize its Texas holdings along the lines of its California subsidiaries.
"We don't have a plan for that yet, but I expect that will happen," he said. "There will be a day. It is inevitable."
In 1997 the holding company merged its banks in Missouri and Illinois to create $3.1 billion-asset First Bank, which is based in St. Louis.
Mr. Dierberg and his family control the holding company. He claims that First Banks' strategy - which stresses growth over earnings - might not have worked if he'd had more shareholders to answer to.
"I would have been fired," he joked. "I would have fired me. It's craziness."
Still, First Banks' earnings, if not spectacular over the years, have been solid, and this year the company is having one of its best. For the first six months of 2000, the company reported net income of $29.3 million, up 34% over the same period in 1999.
Mr. Dierberg said he has no plans to slow the pace of acquisitions. First Banks intends to double its assets over the next five years, something he said the company has done regularly since Mr. Dierberg, 63, took the helm in 1966.
"It is a continuation of the past," he said of his plans for the next five years. "It wasn't ordained by God. It has just happened that way, but I see no reason things won't stay that way."
Another thing that is not about to change is the location of First Banks' headquarters.
Raised on a farm near St. Louis, Mr. Dierberg said he has no intention of moving the corporate office to San Francisco.
He admits, however, that he is intrigued by the links to Mr. Giannini.
"We'll have history coming out of our ears," Mr. Dierberg said. "This bank is going to be a force in San Francisco."