San Francisco’s Bank of the West, which spent the last decade on an acquisition spree, will finalize its biggest deal yet--the $2.4-billion takeover of United California Bank--on Monday, when its name will go up on 70 former UCB branches in Southern California.
In acquiring UCB, Bank of the West also adds about 45 branches in Northern California and the Central Valley, its established markets, where it emphasizes lending to small businesses and farms.
Adding the branches in Los Angeles, Orange, San Diego, Ventura, San Bernardino and Santa Barbara counties will help Bank of the West position itself as a statewide alternative to giants such as Wells Fargo & Co., Bank of America Corp. and Washington Mutual Inc. Like many smaller banks, it pitches its ability to provide more personalized service than its much bigger rivals.
“Our model is to put service back in the branches,” said Bank of the West’s chief executive, Don J. McGrath. “You can call and talk to a human being. We think people are opting out of impersonal models.”
Still, with $25 billion in assets, earnings that nearly doubled to $137 million the first half of this year and a deep-pocketed French parent, Bank of the West is a sizable institution. And its growth shows that banking consolidation is continuing on a smaller scale after the tumultuous deals of the 1990s, which erased familiar names such as Security Pacific Bank and First Interstate Bank in Los Angeles and saw out-of-state institutions take over San Francisco stalwarts Wells and Bank of America.
Bank of the West’s roots go back to 1874, when it was Farmers National Gold Bank. It remained a small Northern California player until it began expanding in the early ‘90s with financial backing from France’s largest bank, BNP Paribas. After a complex series of deals, Bank of the West now is part of Honolulu-based BancWest Corp., itself a subsidiary of BNP Paribas.
The deal also underscores how Japan’s troubled banks have pulled back from their own once-aggressive expansion into California. UCB was formed last year in the merger of Sanwa Bank California and Tokai Bank of California before it was sold by its Japanese parent, UFJ Holdings, for the $2.4 billion in cash.
McGrath said the bank is ahead of schedule in realizing its goal of wringing nearly $75 million a year in cost savings from the merger. The combined work force of Bank of the West and UCB, which equaled 6,300 full-time employees, will be reduced by about 600 positions, including cutbacks at a Monterey Park data processing center. After a hiring freeze and reassignments, fewer than 200 people will lose their jobs, McGrath said.