Magazine article American Banker

Wells Fargo Deal to Cause Fewer Branch Closings Than Originally Expected

Magazine article American Banker

Wells Fargo Deal to Cause Fewer Branch Closings Than Originally Expected

Article excerpt

Wells Fargo & Co. has decided to scale back its original plans for branch consolidation from its April 1 merger with First Interstate Bancorp.

During the hostile takeover battle, word that the San Francisco-based company planned to close 350 branches in southern California became a powerful argument for opponents of the deal.

Out-of-state "white knight" First Bank System Inc. stated it had no plans to close any California branches if it had acquired First Interstate. And Wells' adversaries seized on that difference to argue that a First Bank acquisition of First Interstate would be better for the California economy.

As it turns out, Wells will be shuttering only 259 branches. all but 87 of them from First Interstate.

In addition, the Justice Department, citing antitrust concerns, is requiring Wells to divest 61 branches, more than twice the bank's initial projections.

Still, the bank has decided to close 30 fewer branches than originally planned. Wells spokeswoman Kim O. Kellogg said that of the 30 escaping the ax, 24 will undergo a reduction in operations.

She said that Wells is sticking with its initial projections for cost savings - $500 million a year, beginning 18 months after completion of the deal. Wells plans to close an initial batch of branches on July 27, and the final group on Aug. 10.

After the divestitures, which are expected by Sept. 1, Wells will have 1,050 branches in California and 737 branches in 12 other western states. …

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