Community banks and one regional bank in the West are hoping to profit from buying almost 60 branches from Wells Fargo & Co.
The most significant gain occurred in Oregon, where Klamath Falls-based Klamath First Bancorp nearly doubled its size last week with its purchase of 25 former First Interstate Bancorp branches that Wells divested after it bought the Los Angeles-based regional.
Gerald V. Brown, Klamath president and chief executive officer, said he plans to use the new branches to increase the banks' customer base and diversify its products away from mortgage lending.
The thrift has designed four consumer checking accounts, a business sweep account, four business checking accounts, and an indexed money market account.
"We don't intend to just retain customers, we intend to grow," Mr. Brown said. "And because of the size of the towns, there aren't many competitors."
Klamath is one of a slew of West Coast banks that stand to gain from Wells Fargo's troubled acquisition of First Interstate.
Spokane, Wash.-based United Security Bancorpation, which has $192 million of assets, added five Wells Fargo branches to its 10 existing offices.
Eugene, Ore.-based Centennial Bancorp, which has $318 million of assets and seven branches, also bought a Wells branch.
Salt Lake City-based Zions Bancorp., which has $5.6 billion of assets, bought 27 branches in four states from the San Francisco-based regional. The Utah company has also agreed to buy four others.
The acquisition boosted Klamath from seven branches to 32, doubled its account total to 82,000, and increased deposits to $659 million from $418 million.
What's more, 12 of the branches Klamath bought are the only financial institutions in the towns they serve, and Mr. Brown said he wants to expand the products available there.
Unlike Wells, Klamath kept all the former First Interstate employees and plans to add staff to manage its new small-business division.
"We like to think we have a pretty good reputation, and a lot of the employees were looking forward to working for us," Mr. Brown said.