By JULIE MEHTA
The takeover of First Interstate Bancorp by Wells Fargo & Company last week means a bigger bank for local customers and uncertainty for local branch employees. Wells Fargo estimated that a total of around 350 Wells Fargo and First Interstate branches will close because of the consolidation. Cupertino has one First Interstate and two Wells Fargo locations.
Wells Fargo spokeswoman Janet Otsuki said the company will not announce which branches will close or how many employees will be laid off until after the merger deal closes in April or May. This means more questions for a city already trying to deal with layoffs at Apple Computer and the imminent closure of the Vallco Emporium.
The proximity of branches to each other will be a major factor in determining which branches will close, Otsuki said. In Cupertino, the First Interstate on Wolfe Road and the Wells Fargo on Stevens Creek Boulevard are within half a mile of each other. Other factors that will be considered will be the size, location, electronic capability and parking arrangements of the facilities. Both Wells Fargo and First Interstate branches could be affected, though any remaining First Interstate branches will take on the Wells Fargo name.
Despite the closures, the combined bank will have far more branches than each individual one does now. Otsuki said the higher number of locations will make the bank more convenient for customers and the bank will potentially have more competitive fees and a broader product range. First Interstate spokesman Ken Preston said the merger will also mean more services for small-business owners and customer access to services Wells Fargo offers that First Interstate does not, such as postage stamps from ATMs and mutualfund statements.
The hostile takeover, announced on Jan. 24, cost Wells Fargo $11.6 billion, making it the biggest bank merger in U.S. history. The new company will have more than $108 billion in assets and be headquartered in San Francisco and Los Angeles. In the arrangement, First Interstate agreed to pay a $200 million settlement to First Bank System Inc., with whom it had a merger agreement dated Nov. 5, 1995.
Wells Fargo agreed to give shareholders a tax-free exchange of two-thirds of a share of Wells Fargo stock for each share of First Interstate stock. Preston said this is a tremendous return on the investment of First Interstate stockholders, whose shares will be worth more than twice what they were at the beginning of last year.
The merger also means the Wells Fargo name will spread outside California, since First Interstate has a total of 1,140 offices in 13 Western states, with only 406 of them in California. Wells Fargo currently has 983 banking locations.
Otsuki said customers shouldn't worry about getting lost in the shuffle now that they are affiliated with the nation's eighth-largest bank. "One of our main goals has always been excellent customer service. People will still be able to talk to their tellers face to face."
This article appeared in the Cupertino Courier, January 31, 1996
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