First Interstate Workers in O.C. Brace for Layoffs

With the fate of dozens of banking offices and hundreds of jobs in Orange County up in the air, Wells Fargo & Co. on Tuesday began to roll out details to managers on which of its newly acquired First Interstate branches will be shuttered.

Most employees of First Interstate, which operates 34 branches throughout Orange County, are expected to be told today whether their workplaces will survive one of the biggest bank mergers in U.S. history.

Wells Fargo officials declined to comment Tuesday, but a knowledgeable source confirmed that details of the branch closures were being announced this week. The company previously has said it plans to close about 350 branches statewide by autumn and eliminate 7,200 jobs by year-end.

Many branch managers learned Tuesday of the bank’s plans. One First Interstate customer service representative in Orange County said her supervisor told employees that layoff notices to most workers will go out by mid-May and that branches would be closed in late July and early August.

Analysts say the toll in Orange County is likely to be heavy because many First Interstate and Wells Fargo branches are located near each other in a market that is already overcrowded.

“There will be a significant level of bank closings in Orange County,” said Edward Carpenter, chairman of Carpenter & Co., a national banking consultant in Irvine.

The branch closings in Orange County--where the two banks currently have about 110 branches, including small ones at supermarkets--will further drain employment in the banking industry, which has fallen by 25% since 1990 to 17,450 last year amid a wave of consolidations.

The 1992 merger of Bank of America and Security Pacific resulted in the closure of 40 of the combined bank’s 129 branches in Orange County. Roughly 800 jobs were eliminated.

First Interstate employees, who number more than 400 in Orange County, have been bracing for the worst since Wells Fargo launched its hostile takeover of First Interstate last October. And a number of workers have already defected to other banks. But as word spread Tuesday that details were imminent, many workers became increasingly anxious.

Though some Wells Fargo branches could be closed as well, the brunt of the consolidation is expected to fall on First Interstate.

“We just want to know so we can go on with our lives,” said a branch service assistant at one of First Interstate’s Costa Mesa offices who requested anonymity.

Janette Bock, customer service representative at First Interstate in Seal Beach, said she was concerned about her job. But she also said, “I think it’s harder on the customers. A lot of them are retirees from Leisure World. This branch is very convenient for them. They don’t want to change.”

Last fall, many First Interstate customers expressed resignation and outrage at yet another bank merger that they worry will mean fewer branches and more inconvenience.

Wells Fargo has tried to allay those concerns with letters to customers and other public announcements, and that message seems to have resonated with some clients.

“I’m a 20-year customer of First Interstate, but I don’t look at this as a negative,” Costa Mesa business owner Dan Potter said of the possible closing of First Interstate branches.

“Wells Fargo has always had the edge in retail banking . . . and I think they’ll continue being innovative. I don’t know anything about Wells, but I’m not going to have a problem being one of their customers,” he said.

Still, others have not given up doubts about Wells and on Tuesday they expressed the kinds of worries that smaller rivals have been hammering in ad campaigns that say big bank mergers will cause hassles and inconvenience for customers.

Indeed, Ray Dellerba, chairman of Eldorado Bank in Irvine, said he expected to capitalize on the “significant confusion” caused by post-merger adjustments to both employees and customers.

Dellerba said his bank has already targeted customers of First Interstate and Wells Fargo with direct mail and personal calls.

“I don’t see it causing any pain for Eldorado,” he said.

Carpenter, the banking analyst, said he expects a “feeding frenzy” because of the large number of First Interstate branches expected to be closed. About 20 of First Interstate’s 34 branches are within about a mile of Wells Fargo branches.

Besides proximity, Carpenter said profitability would be another factor in selecting the branches to be eliminated. About a third of the 34 First Interstate branches have seen their deposits shrink since 1993, according to Findley Cos., a banking consultant in Anaheim.

Overall, First Interstate’s deposits in Orange County totaled $1.8 billion as of mid-1995, a 5% increase from 1993. Wells Fargo had deposits of $2.8 billion in 1995, down 2% from two years earlier.

Times staff writers James S. Granelli, John O’Dell, Debora Vrana and Marla Dickerson contributed to this report.