Key Bank of Utah confirmed it has reached an agreement in principle to acquire the $160 million deposit business of Citibank Utah, subject to a definitive agreement and regulatory approvals.
Financial terms were not disclosed."Our decision to end branch operations in Utah has been a difficult one," said David E. Poulsen, president and chief executive officer of Citibank Utah, "yet in no way lessens Citibank's commitment to continue serving Utah consumers through a number of national businesses."
Citibank Utah, a subsidiary of the giant New York-based Citicorp, has six branches in Ogden, Bountiful, Salt Lake City, Murray and Orem, but Key Bank of Utah spokesman John Howard said it is unclear at this time whether Key Bank will take over the six Citibank branches. "That's still in the process of negotiation," he said.
Howard said the time frame for completion of the acquisition is also unknown and that Citibank customers should continue to do business with their Citibank office until further information on the merger is forthcoming.
In any case, the acquisition of the deposit accounts and the possible acquisition of the Citibank branch offices does not involve Citibank's other activities in Utah, including its credit card, corporate lending and private banking businesses.
"This agreement is consistent with our national strategy to focus on specific major metropolitan markets," said Poulsen. "Our customers will benefit from the strong presence of Key Bank and the convenience of expanded locations. Key Bank has excellent banking products as well as a strong commitment to service. We feel our customers will benefit from this change."
Citibank came into Utah in January 1986 when it took over Utah First Bank, which had branches at 2 South Main and 3165 S. 1300 East. Utah First Bank had been declared insolvent by state banking officials. Citibank paid $3.1 million to the FDIC to take over Utah First Bank under a measure that had been rushed through the Legislature.
At the time, Utah bankers had opposed the bill allowing the takeover on the grounds that large national banks, such as Citibank, would "gobble them up." Although Citibank gradually expanded to six branches over the next four years, it apparently failed to meet its 1986 stated goal "to establish one of the premier banking organizations in the state . . . "
In addition to the two Utah First Bank offices, Citibank had also merged its six Person-to-Person industrial thrifts into the new Citibank Utah.
"We are extremely pleased with the prospect of having the deposit customers of Citibank join our banking family," said Ross E. Kendell, president and chief executive officer of Key Bank of Utah. "We have a strong consumer and small-to-medium size business focus and commitment."
Key Bank of Utah is a subsidiary of KeyCorp, a financial services company based in Albany, N.Y.