HomeMy WebLinkAbout1995-11-07 - AGENDA REPORTS - WELLS FARGO FIRST INTERSTATE (2)AGENDA REPORT
City Manager Approv
Item to be presented by:
Steve Stark
NEW BUSINESS
DATE: November 7, 1995
SUBJECT: Wells Fargo/First Interstate Proposed Merger
DEPARTMENT: Administrative Services
BACKGROUND
This item is being presented to the City Council at the request of Councilmember Heidt.
On October 18, 1995, Wells Fargo & Co., California's second largest bank, made an
unsolicited bid for First Interstate Bancorp, California's third largest bank. First Interstate
has not responded to the offer and has said that the bank is seeking other alternatives to the
takeover by Wells Fargo. It is the opinion of many industry experts that a consolidation of
California's second and third largest banks is not desirable for the State's economy as jobs
and capital would be lost.
There are two branches of each bank located within Santa Clarita. If Wells Fargo is
successful in buying First Interstate, it's possible that local branches could close. Based upon
conversations with the Public Communications office of First Interstate, generally, if the
takeover bank is close in proximity to the bank being bought, only one branch will remain
open.
According to recent newspaper reports, a Wells Fargo/First Interstate merger could create
a "large bank" environment which tends to be impersonal and have higher fees.: On the
positive side, however, small local banks may see this as an opportunity to provide more
personalized and specialized services to customers dissatisfied with the large banks.
The Wells Fargo/First Interstate merger is only a proposal at this time, and generally it takes
months for an actual merger to go through, and even longer before any visible changes to
occur due to complex processes that must be followed involving shareholders and regulators.
Receive and discuss staff reports regarding the proposed Wells Fargo/First Interstate merger.
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