Thursday Jan 11 2007
Placer Sierra to merge with Wells Fargo bank
By: Gus Thomson, Journal Staff Writer
Foothills fixture to be sold in $645 million transaction
Wells Fargo & Company is poised to buy Placer Sierra Bancshares, a corporation that traces its banking roots back to a savings and loan established in post-World War II Auburn. The two corporations announced late Tuesday that they had signed an agreement for the nation's No. 2 bank to acquire Placer Sierra in a stock swap. Pending approval from federal regulators and Placer Sierra shareholders, Wells Fargo regional president Felix Fernandez said the sale could be final in April or May. Fernandez, regional president for Wells Fargo community banking in Northern California, visited Placer Sierra's Auburn branches Wednesday. The corporation's roots stretch back to a branch established in Auburn in 1946. "I wanted them to know absolutely they are key to our success -- to calm their fears for lack of a better term," Fernandez said. "They are key." The stock-to-stock merger is valued at $645 million. Shares of the now-Sacramento-based Placer Sierra Bancshares leaped $3.66 to $27.19 in trading Wednesday on the New York Stock Exchange following the merger announcement. Bancshares is the holding company for Placer Sierra Bank, with assets of $2.6 billion and more than 650 employees. It has 32 branches in eight counties and 18 locations in Southern California. Wells Fargo has $483 billion in assets and more than 23 million customers in 6,100 locations. Placer Sierra marked its 60th anniversary last April, celebrating its growth from opening its first branch on Auburn's Lincoln Way with $25,000 in assets. Founded by community booster Paul Claiborne to serve the needs of a growing post-war demand for housing and small-business loans in the Auburn area, the bank was headquartered in Auburn until about three years ago. While Placer Sierra Bancshares officials couldn't be reached Wednesday for comment, Fernandez said it would be too early to say what changes Wells Fargo would decide on after the merger is completed. The Placer Sierra branches would take on the Wells Fargo corporate identity some time in September and October, he said. Wells Fargo has acquired hundreds of smaller banks and retained a community focus, Fernandez said. "What distinguishes us from the rest is we are a federation of hundreds and hundreds of community banks," Fernandez said. In a statement released with the announcement, Placer Sierra CEO Frank Mercandante said Wells Fargo shares the smaller company's commitment to service. The change in ownership will also mean a broader array of products and services, the convenience of about 3,200 banking locations in 23 states, and free use of 6,600 ATMs, he said. Auburn land surveyor Emerson Smith said he's been doing business with Placer Sierra Bank for 50 years and has no problems with a merger and the Wells Fargo sign on his bank. "I feel fine about it and have no plans of changing banks," Smith said Wednesday. "But it remains to be seen what Wells Fargo does with it." Smith said he also purchased a small number of shares in Placer Sierra Bancshares a month ago so he's happy with the increase in the stock price over such a short period of time. Into the early part of this decade, Placer Sierra employed about 100 people at its Auburn headquarters on Lincoln Way but recent growth spurred by purchases of other banks in California has moved many of its back-office, administrative functions to Sacramento and southern California. Bob Haydon, a former Placer Sierra CEO who now serves as Auburn's Community First Bank chairman of the board, said that the merger is a natural transition for a bank. "It's no secret they've been looking for a merger partner for several years to best serve their investors," Haydon said. The Placer Sierra Bancshares holding company's takeover of Placer Sierra in 1997 was predicated on the idea that it would protect smaller banks from becoming part of a bigger corporation, he said. "What happened was that it became what it had started out protecting little banks from," Haydon said. Newer, smaller banks like Community First Bank and Granite Community Bank are filling the void in Auburn, he said. David Kaiser, president of Granite Community Bank, said that while he hadn't had time to study the merger it sounds like a good deal for Placer Sierra shareholders. Kaiser, whose bank opened in Auburn two years ago, said Wells Fargo is a premiere corporation with a focus on regional, national and international business. "For this bank and others, it's a chance to fill a void," Kaiser said. "But it will be a challenge for Placer Sierra customers to adjust to the Wells Fargo model." Former Auburn mayor Kathy Sands worked at Placer Savings and then Placer Sierra Bank for four decades. Today she's on the Auburn advisory board of Granite Community Bank. By the end of the year, a bank with 60 years of history in Placer County will be absorbed into the Wells Fargo corporation and the Placer Sierra identity in local financial circles will be no more. "It's really kind of sad but it's what's happening," Sands said. "We've thought for a long time that only a few banks will remain." Sands banks with Granite and said she likes the idea of smaller financial institutions like her bank, Community First and the newly opened Citizens Bank in Downtown Auburn establishing footholds in the shadows of larger corporations. "I like what I see in those banks - it's like what it was 30 years ago," Sands said. The Journal's Gus Thomson can be reached at email@example.com.