There were no fireworks, no lowering the flag to half-staff, no solemn goodbyes and tearful hugs, but a major era in Utah banking ended Wednesday as First Security Corp. officially became a part of San Francisco-based Wells Fargo.
"We went to sleep Tuesday night as First Security and today we find ourselves members of the Wells Fargo team," Scott Nelson told the Women in Business Conference Wednesday afternoon.
More personally, Nelson went to sleep Tuesday night as president and chief executive officer of First Security Bank and awoke Wednesday as regional president and CEO of Wells Fargo's Utah/Southwest Wyoming Community Region.
Meanwhile, it is business as usual for First Security customers and employees locally because the conversion of First Security's products and systems into the Wells Fargo system won't occur until March, said spokeswoman Jackelin Slack.
That's when the First Security signs will begin coming down, customer checks will be changed and employees will have acclimated to answering the phone "Wells Fargo" rather than "First Security," something they weren't doing Wednesday afternoon.
Slack assured that First Security customers will get "plenty of notice" before they need to take any action, such as changing their checkbooks. She said the conversion is being done in phases to make the merger as painless as possible.
First Security banks in Utah, Idaho and Nevada converge in March; California and Nevada in December of this year; and Oregon and New Mexico will complete the changeover in late February, she said. All of the conversions are expected to be completed by mid-2001.
Although the changes are "pretty invisible" to First Security customers at this point, Slack did say that they may already use Wells Fargo ATMs with no changes to their PINs. Conversely, Wells Fargo customers may use First Security ATMs.
Despite the official transition, FSCO (First Security's stock symbol) shares still traded throughout the day on NASDAQ. Slack said the bank filed for delisting Wednesday morning but was told that a stock couldn't be delisted during a trading day. Thus, FSCO was to be delisted Thursday, meaning that Wednesday's closing price was the final price of FSCO shares.
That final closing price was $14.88, down 38 cents. A total of 13.81 million shares were traded on the final day. Over the past 52 weeks, FSCO shares have ranged from a high of $31 to a low of $10.75.
Wells Fargo shares closed Wednesday on the New York Stock Exchange at $42.50, down 81 cents. Their 52-week range is $31 to $49.94.
However, those closing prices have nothing to do with the ratio that FSCO shareholders will receive for their shares: 0.355 of a share of Wells Fargo stock for each FSCO share.
At the time that First Security Chairman and CEO Spencer F. Eccles and Wells Fargo President and CEO Dick Kovacevich reached a "gentlemen's agreement" to merge, on April 3, Eccles negotiated a firm price of $15.50 per FSCO share while Wells Fargo was trading at $43.66 per share. The 0.355 exchange ratio was based on those set prices, according to Brad Hardy, former chief financial officer of First Security and now merger transition manager for the company.
Slack said FSCO shareholders will be receiving information in coming weeks on exchanging their shares for Wells Fargo shares.
The merger was first announced publicly April 10, approved by First Security shareholders July 31, and given a thumb's up by the Federal Reserve Bank on Oct. 10.
With the merger completed, Wells Fargo is now the largest banking franchise in the West, the largest by market share in Utah, Nevada, Idaho and New Mexico, and one of the largest in the United States.
"This merger is not an end in itself, it's the next stage of our vision to satisfy all of our customers' financial needs and help them succeed financially," Kovacevich said Wednesday in a news release.
Although Wells Fargo has the most deposits of any bank in those four states, Kovacevich said Wells has only about 3 percent of its customers' assets when it comes to all of the financial services and products that they need and he vowed to go after a larger share of that business.
Eccles, whose title now is chairman of Wells Fargo's Intermountain Banking Region, said in the same release that the merger "helps all of us in the new Wells Fargo get even closer to becoming one of America's great companies."
With the acquisition of First Security, Wells Fargo now has assets of more than $263 billion and some 114,000 employees in 5,600 locations nationwide. It ranks seventh nationally in assets and third in the market value of its stock among U.S. bank holding companies.
Among other top First Security officers, Morgan Evans, former president and chief operating officer of First Security Corp., will retire. Scott C. Ulbrich, former executive vice president, will stay on as regional managing director of the Wells Fargo Private Client Services, Intermountain Region. Mark Howell, former head of business banking services, will become executive vice president and division manager for wholesale banking in the Intermountain Division of Wells Fargo.
Hardy, former First Security chief financial officer, remains as merger transition manager with a year's contract, but he would not say whether he will stay on with Wells Fargo after the conversion process is completed.
Historically, at least some of the roots of First Security Corp. can be traced back to 1871 when The Bank of Deseret was founded by Brigham Young. It later became Deseret National Bank and then, in 1932, it was merged into the First Security organization, which operated under the names Security National Bank, First National Bank and, in 1948, as First Security Bank N.A.
What became First Security Corp. was launched by brothers Marriner S. and George S. Eccles in June 1928 using the extensive business entities and the six banks that had been the legacy left them by their father, David Eccles, who died in 1912.
The end of the First Security legacy was not the original intent of Spencer F. Eccles. In June 1999, he announced a "merger of equals" with Zions Bancorp. that would have meant Zions' acquiring First Security but the First Security name was to remain for the merged entity.
But it was not to be. A week before the deal was due to close last December, federal regulators ordered Zions to restate the accounting methods used in some of its prior purchases of several other banks. That put the closing on hold, which proved fatal to the deal when the stock of both banks tumbled in March after First Security said its quarterly earnings would be below expectations.
As a result, Zions shareholders voted down the deal as no longer favorable to them and a week later, Eccles announced the merger with Wells Fargo.