SierraWest plans to cut 60 positions in Truckee
The first effects of last month’s merger between Bank of the West and SierraWest Bank are being felt locally -nearly half of SierraWest employees in Truckee have received notice their positions will be eliminated.
Of the 132 job positions in Truckee administration offices and branches, 60 will be discontinued when the merger is finalized in September, according to Bob Silver, senior vice president of human resources for SierraWest Bank. Most of the discontinued positions are administration level jobs, he said. SierraWest has a total of 360 employees. There are 23 employees in the other three Tahoe branches located in Tahoe City, Kings Beach, and South Lake Tahoe.
Bank of the West sent a total of 95 SierraWest employees letters last week indicating their positions will be discontinued. While most discontinued positions are in Truckee, 20 are in an operations center in Fairfield. The remaining 15 positions cut are in bank branches outside of Truckee.
“Our expectation is that a good portion of the 90 or so jobs being discontinued won’t result in layoffs,” said Silver.
For those whose positions are being cut, a compensation package was described in each letter depending on the employee’s position and length of service, he said.
“I have already extended five offers to people who received letters saying their jobs are being discontinued. All five have accepted,” said Frank Bonetto, senior executive vice president of Bank of the West. “Some branch jobs have been discontinued, but all will be offered positions in other branches or the branch they are being consolidated with. It’s important to us that customers see the same faces.”
He also mentioned that some positions will be retained in Truckee.
“There are people who are going to lose SierraWest positions but are very likely to have parallel jobs with Bank of the West,” said Silver.
According to an analyst report issued by First Security Van Kasper, a San Francisco-based investment brokerage firm, Bank of the West’s management ultimately plans to reduce
SierraWest’s staff count by 44 percent. The report indicates that the cut will affect approximately 140-150 positions.
The report also indicated, however, that Bank of the West instituted a company-wide hiring freeze, and as a result many of the staff cuts will be done through attrition or by transferring people into new positions.
“That’s a number I hadn’t heard before,” said president and chief executive of SierraWest Bill Fike. “I think that number is really hard to make anything of. The analysts have to do their own research and make their own assumptions.”
Joe Morford, one of the authors of the Van Kasper report, said Bank of the West’s cost savings projections seem aggressive.
“It is important to keep in mind that there is a tremendous amount of attrition and turnover in the banking industry. Bank of the West is a growing, diversified, healthy regional bank. There is likely to be opportunity for SierraWest employees to be absorbed into Bank of the West. Some of that may mean switching job functions or relocating,” explained Morford. “SierraWest is teaming with a strong, growing institution.”
“Some people will have to be flexible. A number of positions are here in the Bay area,” said Bonetto.
Cost savings aren’t necessarily out of the employee base, explained Fike. They also come from eliminating data processing systems, contracts and out-sourcing.
Most of the positions that are eliminated will be in administration, said Fike.
“That’s where the redundancies are. They don’t need two C.E.O.s and they don’t need two data processing systems,” said Fike. “But the actual number of layoffs hasn’t been determined yet.”
Fike said there will not be any layoffs until the closing of the merger transaction, which will most likely take place at the end of the summer.
“We want to run the bank as if we’re going to run it forever,” said Fike.
At least four branch closures are expected due to the merger, according to Fike, because there are four markets of overlaps. The four areas include, South Lake Tahoe, Sacramento, Fairfield and Concord, where both banks have overlapping branches.
“Branches that are duplicated will be closed,” said Fike. “One physical space will be closed in favor of another.”
SierraWest Bank started as Truckee River Bank almost 20 years ago in a double-wide trailer on Jibboom Street downtown. The bank started with eight original employees.
As Truckee River Bank branched out of Truckee and began acquiring banks, SierraWest became one of the top originators of U.S. Small Business Administration lending activities in California, Nevada, Oregon, Washington, Colorado and Tennessee.
In a stock transaction valued at approximately $194 million, the merger with Bank of the West was announced on February 25. BancWest Corp., holding company for Bank of the West, is headquartered in Honolulu, with administrative headquarters in San Francisco.
San Francisco-based Bank of the West was found 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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