Wells deal nearly done

Pauline Bell

Thursday, March 28, 1996 | 11:59 a.m.

More than a century after it initially entered the Nevada market, San Francisco-based Wells Fargo & Co. will return to the Silver State when its purchase of First Interstate Bank is completed.

Shareholders of both banks were scheduled to meet separately today to vote on the sale which is expected to be finalized Monday.

The sale is still contingent on approval by both sets of shareholders and the divestiture of 61 branches in California to satisfy an antitrust requirement by the U.S. Department of Justice.

Today, Home Savings of America said it has agreed to buy the 61 First Interstate branches for about $200 million.

The branches, in 21 California counties, are being sold at the demand of bank regulators concerned about competition among financial service providers.

The shareholders' approval, which most observers say is just a formality, is the final hurdle to be cleared for the merger, Wells Fargo spokeswoman Janet Otsuki said from her office in San Francisco.

Customers can expect business as usual when the sale is finalized, Otsuki said. First Interstate signage will remain in place for several months, FIB checks will still be good and credit cards will still work, as will automatic teller machine cards.

"All indications are this is going to be a gradual transition rather than an abrupt change," said First Interstate Bank of Nevada spokesman Steve Papinchak. "It's not like a light switch is going to be flipped and the world is going to change. It will be fairly invisible to the average customer for a period of time."

Customers will be given ample notice of any changes to products, services or branches," Otsuki said.

Layoffs and branch closures will occur primarily in California, where both banks have branches in overlapping areas. The only Nevada layoffs announced so far are nine workers in the Las Vegas real estate lending office.

The office will be consolidated with the Phoenix real estate lending office. Those nine displaced workers "will have a chance to post for other jobs in the bank," Otsuki said.

Management changes include the departure of First Interstate Bank of Nevada Chairman and CEO Clint Arnoldus. He turned down an offer from Wells Fargo to remain in the company.

Jay Kornmayer will continue to head commercial banking and gaming lending and Tom Mangione will oversee retail banking in Nevada. Otsuki wasn't sure if a new president would be appointed for Nevada or if the division heads would report to regional senior executives.

As of Dec. 31, First Interstate was Nevada's second largest bank in assets with $3.8 billion, compared with Bank of America Nevada's $4 billion. It was the largest bank in deposits with $3.49 million, compared to Bank of America Nevada's $3.47 million.

Papinchak said those figures and standings aren't expected to change with the sale. What will change is the size of Wells Fargo compared with other banks in the United States.

It will become the seventh or eighth largest bank with combined assets of between $107 billion and $108.4 billion, according to wire service reports. Previously, Wells Fargo was the 17th largest bank, First Interstate 15th.

"What that means is we'll be a much larger, more powerful bank with a lot more assets and resources behind it. This will bring flexibility and the ability to make more loans, for example," Papinchak said.