By Clarence Cromwell
Saratoga residents who bank at Wells Fargo's Westgate branch or the First Interstate branch a block north on Saratoga Avenue can expect better service if the banks successfully merge, Wells Fargo Bank CEO Paul Hazen said last week.
Customers and employees of First Interstate Bank, 1705 Saratoga Ave., appear to be wary of the deal, which they suspect will bring higher fees, changes in service and the closing of one of the two branches. Wells Fargo's Westgate branch is located at 1730 Saratoga Ave.
At a Jan. 24 press conference in Los Angeles, Hazen and First Interstate chairman and CEO William Siart announced the $11.6 billion merger that will combine their banks into one firm, Wells Fargo & Co. They said the merger will include worker layoffs and branch closures. Neither bank would disclose the number of customers served by their local branches.
Saratogan Robert Rung, who banks at First Interstate, expressed concern. "I have several benefits here I don't think I'll have at Wells Fargo."
Rung said he enjoys the senior-citizen discounts that First Interstate offers on some services.
Wells Fargo does not offer similar senior incentives and is undecided about whether it will do so in the future, said Kathleen Shilkret, a Wells Fargo spokeswoman.
Pete Sesody, another Saratogan who banks at First Interstate, was pleased that the merger would allow him to use Wells Fargo's numerous ATMs. "As a matter of fact, it would work out better for me because it would give me more places to go," he said. "As long as they don't raise my fees for my account."
The bankers said that by "consolidating" similar operations and combining close-together branches of the two banks, they'll save customers money.
Some of First Interstate's 14 Westgate branch employees were anxious about possible closures.
"We know it's coming," said a bank officer who asked not to be named, "but right now we're in limbo. Nobody knows anything."
Wells Fargo workers appeared unconcerned. Bank Teller Bryan Martin said most of his coworkers believed the company would close the First Interstate branch. But he said no official decision has come from company headquarters yet.
Hazen said severance packages would be offered to employees who are dismissed, but the company will retain as many employees as possible.
People now working for the banks will have first rights to any job openings, Hazen said. Wells Fargo established a hiring freeze in October after announcing its proposal to merge. First Interstate enacted a similar freeze in December.
"We've both been trying to save new job openings for our new people," Wells Fargo spokeswoman Janet Otsuki said.
Some of the jobs will be in services that offer banking over the phone and in grocery stores. Wells Fargo plans to expand both departments, she said.
Otsuki said the decisions to close branches will be based on the locations of the banks, available parking and lighting conditions.
"We don't know if a branch is going to close in your area." Otsuki said. "And nothing will happen until the merger is closed.
"If there is a consolidation, the customer accounts of that one branch could be moved into the nearest branch that's left open. But it's not going to be all the First Interstate banks closing," Otsuki continued. "We have a lot of similarities in our businesses. By reaching some efficiencies, we can pass on the savings to customers. It's going to help us to remain competitive."
The combined resources of Wells Fargo and First Interstate will give First Interstate customers access to three times as many branches in California. They'll be able to make deposits and withdrawals at any branch. Wells Fargo customers will be able to bank in a dozen other states where First Interstate has branches.
Wells Fargo owns 980 branches, all in California. First Interstate runs 406 branches in the state. By the end of the year, Wells Fargo & Co. is expected to pare down to 1,100 California branches, if the merger is approved.
The deal must be approved by the SEC, the Federal Reserve Bank, the Justice Department and First Interstate shareholders, who would receive two-thirds of a share of Wells Fargo Stock for every share of First Interstate stock they own.
Approval "can happen in as little as two months, and it also can extend beyond that," First Interstate Vice President Ken Preston said.
Wells Fargo applied for the government approvals on Dec. 15.
Hazen will be chairman and chief executive officer of the new company. William Zuendt will be president and chief operating officer. Siart, the First Interstate chairman, plans to leave the company.
The board of directors will consist of Wells Fargo's current board and seven directors from the First Interstate board. Wells Fargo & Co. will operate from headquarters in San Francisco and Los Angeles.
The merger, if approved, will end efforts of First Bank Systems of Minneapolis to acquire First Interstate.
In addition to the Westgate branch, Wells Fargo operates an eight-employee branch on Big Basin Way in Saratoga. Officials there referred all questions to the corporate office.
This article appeared in the Saratoga News, February 7, 1996.
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