Shareholders kill merger of Nevada State Bank, First Security Bank parent corporations

Phil Levine

Friday, March 31, 2000 | 3:19 a.m.

Shareholders of Zions Bancorporation -- parent of Nevada State Bank -- Friday voted down the proposed merger between their company and Salt Lake City crosstown rival First Security Corp.

Despite delays and last minute nail biting, in the end it wasn't even close.

By a wide margin, Zions' shareholders gave thumbs down to the proposed union of the Utah-based banks because of a decline in the stock price and financial fortunes of First Security since the merger was announced last year.

"Only 33.7 percent of shareholders voted yes, while 45 percent said no, and an additional 20 percent didn't vote which is considered as a no vote," said Joe Morford, analyst with San Francisco-based Dain Rauscher Wessels.

Zions'-owned Nevada State recently acquired Reno-based Pioneer Citizens Bank and has 58 Nevada branches. First Security has 22 offices in Nevada.

The vote ends an arduous and complex chapter in the region's banking history.

The union would have created the state's third-largest bank under the First Security banner.

Instead, current Nevada customers will -- at least for now -- continue on as clients of either First Security or Nevada State Bank.

"It remains unclear as to whether the banks will be interested in re-pricing this deal," said Morford. "Up until today, they were just focused on this vote."

Morford said the "added friction" in recent weeks may mean both banks will simply want to get back to business, rather than renegotiate terms of the deal.

Leaders of Nevada's banking community predicted little immediate fallout from the merger's defeat.

"It's not the end of the world," said Ted Wehking, executive vice-president of the Nevada Bankers Association. "Banking in Nevada is essentially the same today as it was a year ago today."

Bryan Waters, president of Wells Fargo's Southern Nevada operations, said the merger's defeat would "have nil effect on our business."

"It's business as usual for us come Monday," said Waters, whose bank has been mentioned as a possible buyer of First Security if the deal fell through.

"For us, all it means is that there will be one more competitor out there than there might have been if the deal had been suscessful."

Waters declined to comment on whether his bank might be interested in acquiring First Security.

Representatives from both First Security and Zions could not be reached for comment.

In Las Vegas, Nevada State Bank is the third largest bank in the market with local deposits of $1.1 billion. First Security is No. 4 in Las Vegas with local deposits of $879 million. The largest banks in Las Vegas are Bank of America and Wells Fargo, which last year merged with Norwest Bank.