Norwest selling five LV branches

Wednesday, Oct. 14, 1998 | 11:48 a.m.

Norwest Bank will sell five Las Vegas branches because of its merger with Wells Fargo Bank. It's unknown what bank will buy the branches.

Wells and Norwest are also deciding what other Las Vegas branches to close or sell when they merge. Closures or more sales appear to be inevitable because Wells and Norwest have branches just blocks apart at several locations.

The two companies, which are expected to complete their $34 billion merger early next year, are required by federal anti-trust laws to divest $721 million in assets in Nevada for the merger to be approved.

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 other Norwest outlets in Carson City, Elko, Winnemucca and two in Reno and two Wells Fargo branches in Fallon and Yerington also will be sold. The transition is expected to occur by the first quarter of 1999.

Customers at those banks will be notified by mail that a new organization will be taking possession of their accounts if they choose to stay at those locations. The change won't affect customers who have mortgages financed by Norwest.

The process of finding a buyer already has begun with informational packets being made available to qualified bidders. Norwest and Wells Fargo officials already have said they prefer to sell the banks in one package to one buyer. The deal is complicated by the fact that the sale would be in conjunction with the companies' assets in Arizona.

Nevada State Bank and First Security Bank have been mentioned as potential suitors for the assets, although some smaller banks have indicated they would be interested if Wells and Norwest sold any branches individually.

As for the 83 employees at the banks to be sold, they'll still have jobs, company officials said.

Kirk Clausen, president of Southern Nevada commmunity banking for Norwest, said it's expected the new owner would offer positions to employees. But if they don't, employees will get jobs elsewhere with the combined Wells Fargo-Norwest bank.

"It's a great disappointment to have to part with our loyal team members at these stores and the customers they serve," Laura Schulte, the newly appointed president of Norwest Banks in Nevada, said in a statement issued by both banks.

"But government regulations like these are a fact of life. We made recommendations on which stores to sell. The regulators accepted some and rejected others. And the final decisions were a product of our negotiations. We've tried to ensure that this process was as fair as possible to everyone concerned -- our team members, our customers, our shareholders and potential buyers."

Bryan Waters, senior vice president and division manager for Wells Fargo in Nevada, said meetings are planned with affected employees to discuss severance issues.

"Our goal has been to sell as few stores, deposits and loans as possible in the smaller markets," Wells said. "In the larger markets, we've tried to offer a fair cross-section of loans or deposits for sale so the buyer could compete effectively."

Most of the branches being sold are Norwest rather than Wells Fargo because the Justice Department takes the approach that the surviving entity and name remain more visible to consumers. Although Norwest is driving the merger, the Wells Fargo name will remain with the remaining bank.

The divestiture is part of $1.18 billion package involving Nevada and Arizona. It covers 14 branches with deposits of $457 million in Flagstaff, Lake Havasu City, Mesa, Payson, Phoenix, Pinetop, Scottsdale, Sierra Vista, Tempe and Yuma, Ariz., as well as the branches in Nevada.

The merger was approved by the Justice Department Tuesday on condition the Nevada deposits be sold and also must be approved by the Federal Reserve System's board of governors.

Norwest, headquartered in Minneapolis, has $57.8 billion in deposits, $96.1 billion in assets and offices in 16 Midwestern and Western states.

Wells Fargo, headquartered in San Francisco, has $72.3 billion in deposits, $94.8 billion in assets, and offices in nine Western states.

One bank analyst said the sale of the 26 branches won't harm the banks' operations in the two states. "I think it's a small price to pay to get the combination that can really be one of the foremost financial institutions in the country," said Frank Barkocy, Josepthal & Co.

SUN wire services contributed to this report.