Cal Fed to buy merging banks’ leftovers in state

Monday, Nov. 2, 1998 | 11:27 a.m.

California Federal Bank said today it's buying 12 Nevada branches that Wells Fargo and Norwest banks were forced to sell because of their merger.

The San Francisco-based savings and loan, the second largest in the nation, operates almost exclusively in California. Today's acquisition more than doubles its presence in Nevada.

Prior to today's deal, it had 359 branches. Seven were in Nevada with two each in Las Vegas and Henderson.

Terms of the acquisition were not disclosed by Cal Fed or Norwest-Wells Fargo officials. A Norwest executive said he could not disclose how many bidders sought the branches, but he said it was "a significant number."

The 12 branches have about $637 million in total deposits.

The Norwest-Wells Fargo merger closes today. The surviving bank, called Wells Fargo, was forced by the Justice Department to divest itself of some of its branches because it was determined that it would have had too great a market share in Nevada and Arizona. Regulators generally prohibit banks from holding more than 30 percent of the deposits in any market.

Southern Nevada Norwest branches to be sold are at 2625 E. Desert Inn Road; 9325 W. Sahara Ave.; 3333 E. Tropicana Ave.; 103 S. Rainbow Blvd.; and 546 S. Boulder Highway in Henderson.

Five Norwest outlets in Carson City, Elko, Winnemucca and two in Reno and two Wells Fargo branches in Fallon and Yerington also were part of the Cal Fed deal.

The Arizona branches were acquired by a separate undisclosed buyer and were not a part of the Cal Fed deal.

Bank industry experts said they were surprised that Cal Fed emerged as the buyer, since it hasn't been a large player in Nevada banking. First Security Bank and Zions Bancorporation, two Salt Lake City-based institutions, were considered the favorites in the bid to acquire the branches. Zions operates as Nevada State Bank in this state.

With the acquisition of the 12 branches, Cal Fed moves into the No. 3 position in market share by deposits in Nevada behind Bank of America and the new Wells Fargo, a Cal Fed spokeswoman said.

Cal Fed will increase from about $500 million in deposits in Nevada to $1.2 billion, Janis Tarter of Cal Fed said.

Cal Fed will take over the Nevada branches in April, but will start communicating with customers earlier, she said.

Kirk Clausen, president of Southern Nevada community banking for Norwest, said the initial notice to customers could begin as early as this month with direct mailings and statement stuffers explaining the transition.

One of the most important aspects of the acquisition by Cal Fed was the agreement by the company to offer jobs to all the employees at the 12 branches, Clausen said. Cal Fed has agreed to that, but Clausen said Wells Fargo or Norwest would have offered positions to any that weren't offered jobs.

Cal Fed's expansion in Nevada will be marked by a reunion. Scott Kisting, executive vice president of Cal Fed's retail bank, was a Norwest executive with responsibility for three community banking regions, including Nevada. Kisting joined Cal Fed in September and will oversee the Nevada branches.

"Scott Kisting will be a very strong competitor in the Nevada market," Clausen said. "We were very sorry to see him go when he left Norwest, and I think employees and customers will be very happy with his management style."

Because Cal Fed is acquiring customer accounts, it will be that company's responsibility for making the transition of records. As a result, there won't be a need for computer systems to be compatible between Norwest and Cal Fed.

Cal Fed also has some experience in acquisitions. In September, the company acquired Glendale Federal Bank in California. The transition of Glendale branches to the Cal Fed name is expected to be completed by Nov. 16. In that acquisition, Cal Fed picked up 56 branches and 244,000 mortgage loans.

As a savings and loan, Cal Fed still operates under most of the same regulations as other commercial banks. The company offers checking and savings accounts, certificates of deposit and other financial vehicles and offers services through automatic teller machines.

Tarter said customers with Cal Fed ATM cards would be able to access their Nevada accounts in California without additional charge.