Wells Fargo & Co. said Wednesday that it has agreed to buy Nebraska's First Commerce Bancshares for $480 million. The deal, expected since last week, would make Wells the second-largest bank in the state by deposits.
San Francisco-based Wells would fold $2.55 billion-asset First Commerce into its Norwest Bank Nebraska NA subsidiary, bringing its share of deposits in the state to 13%. Only First National of Nebraska, with an 18% share, would have a greater hold on deposits there.
The acquisition would fit into Wells' strategy of acquiring banks in states that are adjacent to its main market and that help bring the $207 billion-asset company into the No. 1 or No. 2 position in a market.
The deal would add 23 branches to the Wells network in Nebraska, bringing its total to 53, though Wells said it expects regulators to require some divestiture of branches. The two banking companies' operations overlap in Lincoln, Hastings, and Grand Island, said Wells spokesman Michael Bares.
He said the company expects some duplication of personnel in Nebraska, but said it was too early to put a number on how many jobs would be eliminated.
The acquisition, which is awaiting the approval of regulators and First Commerce shareholders, is expected to be completed in the third quarter, Wells said in a statement.
Wells would pay $35.95 for every share of class A and class B common stock of First Commerce, making the price around two times book value.
Rumors about the deal surfaced last Thursday, when shares in Lincoln-based First Commerce rose 20%, or $6.25, before the deal was announced. The timing of such a rise often raises questions of possible leaks about the impending announcement.
Mr. Bares confirmed that similar trading surges had occasionally preceded past acquisitions by Norwest, the acquisitive Minneapolis bank that bought Wells Fargo and took its name last year. "There's no reason to suspect any internal problem, but it's unfortunate when it does happen," he said.
The family of James Stuart Jr., the chairman and chief executive officer of First Commerce, owns 57% of the shares. Mr. Stuart will leave when the merger closes, Mr. Bares said.
Several First Commerce subsidiaries,including First Commerce Mortgage Co., which has a service portfolio of $1.8 billion; the investment advisory firm First Commerce Investors Inc.; and a data processing outsourcing company, First Commerce Technologies, are part of the deal. First Commerce also owns a credit life insurance company, Commerce Affiliated Life Insurance, and some commercial real estate in Lincoln.
Wells would also gain correspondent relationships with 280 customers.