Small Banks Predict Windfall From Merger

Chief executives of the nine independently owned banks in Ventura County said Wednesday that they anticipate a windfall of business from the proposed merger of Wells Fargo & Co. and First Interstate Bancorp.

The $11.6-billion deal would lead to a huge change in the way many Californians do their banking. But as local banks learned following the 1994 merger of Oxnard-based Bank of A. Levy with First Interstate, bigger does not always mean better.

“We just today got a call from a Wells Fargo customer who wants to move 14 accounts over to us, totaling $1.2 million,” said Robert B. Hamilton, president and chief executive of Los Robles Bank, a Thousand Oaks-based bank with three branches and assets of $81 million. “These mergers are just very positive for us.”

Most independently owned banks reported a boost in business after the Bank of A. Levy-First Interstate consolidation.

Hamilton said his bank grew more than estimated in large part because of acquiring former Bank of A. Levy customers. The anticipated Wells Fargo-First Interstate merger has pushed his growth estimate for 1996 to 20%, he says, up from 9% in 1995.

Edward Paul, CEO of Channel Islands National Bank, said his small-business loan portfolio grew by 30% last year, thanks in part to local businesses choosing to finance loans through a community bank rather than a large one.

“Wells Fargo is aggressive when it comes to small-business loans,” he said. “But it just doesn’t have the time to follow up on them. Here, the loan officer has to live with the loan that was made.”

Wells Fargo says it is gearing up to aggressively keep First Interstate’s customer base happy throughout the merger process, mostly by offering additional automated banking centers, including more in supermarkets.

But local banking executives believe that this tactic will backfire with a certain population of customers in Ventura County, particularly the elderly, who are tired of the constant flux at the major banks.

“Those who stay with Wells Fargo are probably those who are used to it by now,” Paul said.

The increase in technology-based banking, promised by Wells Fargo CEO Paul Hazen, may also prompt customers to seek out smaller, more personal banks.

“We’re seeing a reluctance of people to deal with 800 numbers anymore,” said Douglas Shearer, chief executive of Camarillo Community Bank. “The CEO of Wells Fargo doesn’t answer his own phone. I do.”

But the business boon to smaller, independent banks may also take its toll on the local economy, when the fallout of layoffs and branch closings takes effect.

“It’s a mixed blessing,” said Robert P. Zingg, president of First National Bank of Ventura. “It depends on what side of the coin you’re looking at. Los Angeles County will be hardest hit, and we’ll feel the waves of that up here.”

Wells Fargo has said it plans to close a majority of First Interstate’s 430 branches in California, and total job losses could reach 8,000.

There are 18 First Interstate offices in Ventura County, employing 261 full- and part-time people, said Ken Preston, spokesman for First Interstate.

A manager at the First Interstate branch on Channel Islands Boulevard and Ventura Avenue, who asked not to be identified, said the majority of his staff had been hired from the Bank of A. Levy branch that had been acquired during the merger.

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