US Banking Industry Wades Deeper into A Wave of Mergers

By Mark Trumbull, writer of The Christian Science Monitor | The Christian Science Monitor, May 11, 1995 | Go to article overview

US Banking Industry Wades Deeper into A Wave of Mergers


Mark Trumbull, writer of The Christian Science Monitor, The Christian Science Monitor


THE bank-merger wave keeps rolling along.

This week it hit two financial linchpins of the Pacific Northwest: US Bancorp of Portland, Ore., and West One Bancorp of Boise, Idaho, which are joining to create a $30 billion regional giant, comparable to other "superregional" banks such as New England's Bank of Boston.

The bank-industry consolidation trend is no longer driven by dire circumstances, such as the severe real estate loan losses that many banks suffered in the last recession. The theme today is pleasing shareholders. They want an even better return, despite the industry's record earnings in the last two years.

Monday's deal is typical for today.

"Our shareholders deserve better," says US Bancorp chairman Gerry Cameron. (The company's stock price is little changed from 1991.)

Mr. Cameron argues that the merger will create a larger and more efficient bank in one of the nation's fastest-growing regions. The new US Bancorp bank would be dominant in Oregon and Idaho and stronger than before in Seattle, the region's biggest market.

US Bancorp currently faces tough competition in this city, lagging behind BankAmerica's Seafirst Bank, Key Bank of Washington, and First Interstate Bank. The merger would make US Bancorp No. 3 in Seattle, passing First Interstate.

Position solidified

"This clearly solidifies our position as the premier Northwest banking institution," Cameron says.

Analysts say more such mergers can be expected this year.

For many bank chiefs, this is a good time to sell the company at a premium to a bank that is hungry to expand, says Warren Heller, research director at Veribanc in Wakefield, Mass.

For buyers, the motive is often to expand geographically into a superregional or even a nationwide bank. Also, well-managed banks can reap profits by buying their less-efficient peers and reforming them.

"It's the low average-cost banks that are winning," says Alan Hess, a finance professor at the University of Washington in Seattle.

Leading the acquisition charge over the past few years have been NationsBank in the Southeast, Banc One Corporation in the Midwest, and Fleet Financial Group in New England, Mr. Heller says.

Some other banks, such as Wells Fargo & Co., have been trying to please shareholders by buying back their own stock. This boosts the value of remaining shares.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

US Banking Industry Wades Deeper into A Wave of Mergers
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.