BancWest purchases SierraWest
Truckee-based SierraWest Bancorp has announced plans to merge with BancWest Corp., parent of Bank of the West and First Hawaiian Bank.
SierraWest Bank, which started as Truckee River Bank almost 20 years ago, will change its name to Bank of the West.
In a stock transaction valued at approximately $194 million, the deal will be a stock for stock exchange, according to a news release issued by SierraWest Bancorp on Feb. 25. SierraWest, with total assets of $879 million, has 20 branches extending along the Interstate 80 corridor from Reno to the East Bay and around the Tahoe basin.
SierraWest Bancorp is the holding company for SierraWest Bank, which is a major employer in Truckee with 132 employees in the two Truckee branches and the administration offices located at the Truckee-Tahoe Airport. In the other three Tahoe branches, Tahoe City, Kings Beach and South Lake Tahoe; there are 23 employees, said Bob Silver, senior vice president of human resources for SierraWest Bank.
The extent to which the merger will impact local employees is not yet clear, according to administration of both banks.
There will most likely be some layoffs in the Truckee administration offices, said William T. Fike, president and chief executive officer of SierraWest.
“You can’t combine two organizations without some overlap,” said Fike. “It’s a very tough situation you have to make the most of.”
Consolidation is expected in certain administration activities, explained Fike.
“When you do that, there will be elimination of duplicated jobs,” he said.
For people who do lose their positions, BancWest is trying to be very accommodating, Fike said. The company will offer employees the opportunity to relocate if there is not a position locally, and there are
compensation packages if that does not work.
“It’s far too early to know what the impact will be,” said Mark Stebbins, vice president of secondary marketing, who has been with the bank since it first opened as Truckee River Bank in 1981.
“It doesn’t leave employees with a lot of comfort as to the strength of what will happen,” he said. “Both parties are looking at where there is overlap.”
“(Bank of the West) will try very hard to communicate what’s going to take place over time,” said Fike.
Douglas Grigsby, executive vice president and chief financial officer of Bank of the West, also said it is too early to determine the merger’s impact.
“Specific determination of what will happen with layoffs has not happened yet,” he said. “We are working with SierraWest on the matter.”
Bank of the West projects four SierraWest branch closures due to the merger. Branch consolidation is not projected for the Truckee area or the North Lake Tahoe area. There may be branch closures in the South Shore area, said Grigsby.
“I don’t think there will be any impact in terms of branch closures in the (North Shore and Truckee) market,” he said.
According to both Fike and Stebbins, customers will benefit from the merger.
“I think local customers will be very pleased with having a broader product line,” said Fike. “What they will see is a broader range of products and services.”
Through the merger, SierraWest (soon to be Bank of the West) will be able to offer more services such as a Trust Department, which can help people with estate planning, income tax planning, retirement planning, investment management and will investment services.
For those customers who are worried about seeing an unfamiliar face at SierraWest, Fike said that won’t be the case.
“I think that people will find they will continue to be served by the same people at the branches here, with just a different logo out front,” he said.
The agreement has been approved by the board of directors of SierraWest, BancWest and Bank of the West, the news release said. The merger requires approval from SierraWest’s shareholders as well as federal and state banking regulators.
“The merger with BancWest is beneficial to SierraWest’s customers and shareholders,” said William T. Fike. “Our customers will now have access to a broader range of products and our shareholders will gain a significant equity position in a large, will-diversified financial services company with a much broader geographic reach.
“We believe that BancWest offers all these things and we are excited about the growth prospects of the combined company going forward,” said Fike.
“The Small Business Administration business line segment of SierraWest complements Bank of the West’s lending in other specialized markets, including religious lending, consumer finance, equipment leasing, real estate and business banking,” said Don J. McGrath, president of BancWest Corp. and president and chief executive officer of Bank of the West, in a news released issued by BancWest Corp. on Feb. 25.
Besides restructuring charges, BancWest does not expect the acquisition to affect earnings in 1999. However, the deal is expected to add two percent to earnings per share in 2000.
It is expected the merger will close in mid-1999, once all approvals have been received.
BancWest Corp. is a bank holding company with total assets of $15 billion and is headquartered in Honolulu, with administrative headquarters in San Francisco.
San Francisco-based Bank of the West was founded in 1874 and is the third oldest and fifth-largest bank in California. It operates 143 branches – 103 in Northern and Central California, 29 in Oregon, eight in Washington, and three in Idaho.
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