Wells Fargo to Buy Alaskan Bank
Wells Fargo & Co. on Tuesday agreed to buy National Bancorp of Alaska Inc., the state’s biggest bank, for $907 million in stock to expand into Alaska.
San Francisco-based Wells Fargo, already in 21 states with about 6,000 branches, will pay $30 a share for National Bancorp, below Monday’s closing price of $32.88. The Anchorage-based bank’s stock, which was halted on Nasdaq pending the announcement, is up 50% in the past seven trading days. It rose to $39.75 before being halted.
National Bancorp, founded in 1916, has $3 billion in assets, 1,250 employees and 54 branches under the name National Bank of Alaska, including a full-service branch in Seattle. Wells Fargo, which is paying two times book value, had no branches in Alaska. The acquisition is expected to close in the second quarter.
“It’s a great deal,” said Andrew Collins, a bank analyst for ING Barings in New York. “It’s an extension up the Pacific coastline and there really aren’t a lot of competitors up there on the ground.”
National Bancorp Chairman Edward Rasmuson said he felt the bank needed to be part of a large financial company to compete in an era where the walls between banks, brokers and insurers have crumbled.
“We want to make sure that we keep up with e-commerce,” Rasmuson said on a conference call.
Wells Fargo is the largest U.S. Internet bank with more than 1 million Web customers now and 100,000 new ones every month, it claims.
Rasmuson’s grandfather, an attorney for the bank at its inception, became the bank’s president in 1919. His son, Elmer, now 90, has been part of the bank for more than 60 years and is chairman emeritus. Rasmuson became president and chief executive in 1975 and chairman in 1985.
Wells Fargo shares fell 66 cents to close at $40 on the New York Stock Exchange.
The bank said in a conference call it had to move quickly to announce the acquisition because of the rapid rise in National Bancorp’s share price. “Left up to our own, we probably would have delayed this until we had a formalized merger agreement which would be about another three weeks,” Wells’ Robert Strickland said.
