Moving forward with plans to get rid of undesired branches, Wells Fargo & Co. is selling 77 branches in six western states to Zions Bancorporation and a collection of community banks.

The deals, announced Thursday and Friday, would bring to about 100 the number of branches that Wells has sold in small towns or rural areas since it bought Los Angeles-based First Interstate Bancorp last year.

The sales would leave Wells with 1,873 branches in 10 states. The transactions would put Wells on track to complete its integration of First Interstate on schedule, analysts said.

All of the branches to be sold are former First Interstate locations in rural areas or small towns. Wells has made clear that it plans to get out of such areas and focus instead on urban areas, which it will serve through telephone and computer banking, and a network of supermarket branches.

The bank still has sizable presences in urban areas outside California, such as Phoenix; Portland, Ore.; Las Vegas; and Boise, Idaho.

"Wells has been selling off rural, outlying California branches to small community banks in the state, and now it is addressing those outside of California," said analyst Joseph Morford of Alex. Brown & Sons.

In the largest of the planned transactions, Salt Lake City-based Zions Bancorp. said it would pay $34 million for 32 branches and $550 million in deposits in Arizona, Idaho, Nevada, and Utah. The price represents a 6.17% premium on the deposits, plus the book value of the real estate-about average for such transactions, analysts said.

"These branches are a very nice fit for us," said Harris Simmons, chief executive officer of $6.5 billion-asset Zions. "This is a great opportunity to extend into the rural communities of Arizona and Nevada. These are very attractive small communities that, by and large, have some good growth ahead."

In Washington, Spokane-based United Security Bancorportion led a consortium of four community banks that agreed to purchase 14 Wells branches, for an undisclosed premium.

United Security, which has 10 branches and $229 million of assets, said it would acquire five of the branches, with $41 million in deposits. First Community Financial Corp. said it would buy five branches, with $54 million in deposits; Cowlitz Bank is planning to buy three, with $30 million; and Bank of Sumner said it would acquire one, with $16 million.

"It was an extremely good opportunity for us as community banks to be able to put together as a group an offer that Wells was able to entertain," said William C. Dashiell, president and chief executive officer of United Security.

In Oregon, Klamath First Bancorp, Klamath Falls, would quadruple its small branch network, with its planned purchase of 25 Wells branches with $273 million in deposits. No purchase price or premium was disclosed. And Lake Oswego, Ore.-based West Coast Bancorp subsidiary Bank of Newport said it would buy one branch, with $30 million in deposits.

Under the transactions, the buyers would receive the branch facilities and personnel, but no loans would be transferred. All of the transactions, which are still subject to regulatory approval, are expected to close in the third quarter, probably in July.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.