Magazine article American Banker

Wells to Acquire Brenton of Iowa under a New Law

Magazine article American Banker

Wells to Acquire Brenton of Iowa under a New Law

Article excerpt

Taking advantage of a recent change in Iowa banking law, Wells Fargo & Co. said Friday that it would buy Des Moines-based Brenton Banks Inc. for $264.5 million in stock. The deal would shore up San Francisco-based Wells Fargo's position as the largest bank in the state, adding $2 billion-asset Brenton and its subsidiary mortgage and insurance businesses and boosting Wells Fargo's share of deposits in Iowa to 15%, with $6.5 billion. The acquisition is slated to close by the end of the year. Brenton Banks is the largest Iowa-based bank holding company, with 43 offices and 679 employees in the state. Only Wells Fargo and Mercantile Bank, which was recently acquired by Milwaukee-based Firstar Corp., have more deposits in the state. The company is also the second largest mortgage originator in the state, behind Wells Fargo. Just a few months ago, Wells Fargo could not have done this deal because Iowa law prevented any single bank from holding more than a 10% share of deposits in the state. Norwest Bank Iowa, which changed its name to Wells Fargo Bank Iowa NA on May 12, reached that limit with its last big Iowa acquisition in 1992. Things changed, however. By the time discussions between Wells Fargo and Brenton began in the early spring, the two banks were fairly sure that the cap would be lifted. "We knew at this point we had enough votes in legislature," to pass the new banking law, said Lynn Horak, chairman and chief executive officer of Wells Fargo Bank Iowa. …

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