Hired in 1989 to turn around Pioneer Bancorp. of Reno, William E. Martin has delivered.

Last week Zions Bancorp. of Salt Lake City agreed to pay five times book value, or $341 million, for $1 billion-asset Pioneer. If an investor had bought $10,000 of Pioneer stock in 1989, it would be worth $350,000 today.

"We like to think that John Elway, Michael Jordan, and Pioneer all went out on top," said Mr. Martin, president and chief executive officer.

Ten years ago Pioneer's subsidiary, Pioneer Citizens Bank of Nevada, had just $130 million of assets and was losing money. Without making any acquisitions, Mr. Martin built Pioneer into the state's largest independent bank. Pioneer has been a top performer for the past six years, consistently returning 22% on equity and 1.45% on assets.

Before the May 7 deal, Mr. Martin had rebuffed offers to sell-including one from Zions in January.

He changed his mind last month when the Financial Accounting Standards Board decided that starting Jan. 1, 2001, mergers may no longer be accounted for as a poolings of interest. The pooling structure typically pay sellers 25% to 40% higher premiums than deals that use purchase accounting.

"The day after FASB's announcement, I was on the phone to my investment banker," Mr. Martin said.

Mr. Martin attributes Pioneer's turnaround to two factors: location and consolidation.

Nevada has ranked among the nation's fastest-growing states for much of the decade. Construction of new casinos has created huge demand for single- family housing and small-business lending. Growth has been especially brisk in Las Vegas, where Pioneer Citizens added three branches in 1998 to bring its total to eight.

"It sure helps to be in the fastest-growing city in the U.S.," Mr. Martin said.

Nevada has also witnessed its share of bank mergers. In 1992, Bank of America Corp. bought the state's largest community bank company, Valley Capital Corp. in Las Vegas. Wells Fargo & Co. of San Francisco, Zions, and First Security Corp., also in Salt Lake City, are the market's other big players.

Pioneer Citizens positioned itself as the independent alternative to large, out-of-state banks.

"Pioneer capitalized on large bank mergers better than any other community bank in the state," said Hans Schroeder, a bank analyst at Hoefer & Arnett in San Francisco.

Even competitors agree. Under Mr. Martin, Pioneer developed a reputation for superior customer service.

"Bill Martin hired good people and stuck to the old-fashioned principles of banking," said Larry L. Woodrum, president and CEO at BankWest of Nevada in Las Vegas.

Mr. Martin joined Pioneer Citizens after 20 years with the Office of the Comptroller of the Currency and a stint as president of Nevada National Bank.

His first move was to improve Pioneer's employee-to-asset ratio and clean up $34 million in soured auto loans. In his first three months Mr. Martin fired 70 employees-60% of the bank's staff-and hired a specialist to collect the bad loans.

When the Zions merger closes in the third quarter, Pioneer Citizens will be merged into Nevada State Bank in Las Vegas, a subsidiary of the $17 billion-asset Zions and the oldest state-chartered bank in Nevada.

"Pioneer did an excellent job of taking care of its clients," said George Hofmann, president and CEO of Nevada State Bank. "We were always looking over our shoulder."

Mr. Martin is slated to become president and CEO of the combined operation, which would have the third-largest market share in the state. All but 15% of Pioneer's employees are expected to stay aboard.

Mr. Hofmann, meanwhile, is to become executive vice president and retail banking manager at Zions Bank in Utah.

Mr. Martin said he aims to retain the "local flavor" of Nevada State Bank, which would have $2.1 billion of assets. Still, he expects to face the same kind of pressure from small, aggressive banks that his bank has been applying on larger banks for the last decade.

"The new banks will be nipping at our heels like Pioneer did to Bank of America," Mr. Martin said. "But they'll have a tough time competing with us."

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