Cal Fed looks at more growth in Vegas

Tuesday, Nov. 3, 1998 | 11:24 a.m.

California Federal Bank, the savings and loan that is buying 12 Norwest and Wells Fargo offices in Nevada, is also considering opening branches in some nontraditional locations.

The San Francisco-based S&L, the second-largest in the nation with $52 billion in assets, has a limited number of nontraditional branch locations in California, where the company operates 352 of its 359 offices.

Janis Tarter, a spokeswoman for Cal Fed, said the company has only 16 offices inside partner stores -- seven in supermarkets. The grocery stores in which Cal Fed operates don't have any Nevada operations.

Cal Fed's Nevada expansion announced on Monday would more than double the number of branches it operates in the state. Cal Fed moves into the No. 3 position in market share by deposits in Nevada behind Bank of America and Wells Fargo. The S&L will increase from about $500 million in deposits in Nevada to $1.2 billion.

In acquiring about $637 million in deposits in the Norwest-Wells Fargo branch acquisition, Cal Fed also picked up servicing about $40 million in loans.

"That means we will be servicing the existing loans at all of those branches," Tarter explained. "It's mostly mortgages, small-business and home-equity loans."

Southern Nevada branches affected by the sale 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 other 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.

Cal Fed and the former branch operators will be contacting their customers about the transition, which is expected to be completed by April. Letters announcing changes and statement stuffers are expected to be distributed as early as this month.

When Cal Fed takes over at the 12 branches, five of which are in Las Vegas and Henderson, it will offer a menu of loans and credit as well as deposit accounts. In addition to offering cash reserve accounts, credit cards and lines of credit, Cal Fed sells home mortgages and commercial real estate loans.

The company also has a variety of checking accounts, savings and money market accounts, certificates of deposit, retirement accounts in IRAs.

Cal Fed's ATM Check Card -- a debit card product with ATM access that can be used without charge at any Cal Fed ATM in Nevada or California -- is affiliated with Visa.

Norwest, which merged with Wells Fargo Bank in a deal that closed Monday, 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.

Michael Hodes, an analyst who covers the savings and loan industry for Goldman Sachs, said Cal Fed has a solid management team in place as a result of a merger between private and public companies.

Cal Fed's new parent company, Golden State Bancorp Inc., is publicly traded on the New York Stock Exchange. Early last year, the original parent company, privately held First Nationwide Holding Inc., merged with Golden State, the parent of Glendale Federal Bank. When that deal closed in August, Cal Fed became the No. 4 bank by deposits in California with 6.4 percent of that state's market share.

The emerging parent company continues to be publicly traded. Hodes said because of the recent combination of public and private companies managed primarily by the private company's team, there's little history about the organization available.

"It's a very strong, massive operating company, known for being opportunistic in its West Coast market," Hodes said.

He believes the Nevada expansion is another example of pursuing an opportunity, since the state is considered a growth market.

Experts also say the Cal Fed acquisition may be helpful to Bank of America and Wells Fargo, the two market leaders in Nevada, since it didn't strengthen either of the two companies considered to be the hardest-charging competitors.

First Security Bank and Zions Bancorporation, which operates as Nevada State Bank, were considered to be among the favorites to acquire the 12 branches.

Norwest and Wells Fargo have not disclosed details of the auction, including how many bidders there were or what the purchase price was.