Other large out-of-state banks with California holdings, including Minneapolis-based U.S. Bancorp and Detroit-based Comerica Inc., are considered potential buyers and sellers. If these so-called super-regional banks began merging, it could trigger another wave of consolidations similar to those in the 1990s that claimed most of California's biggest banks and savings and loans.
This much seems certain: The number of takeover targets is shrinking. Today there are fewer than 300 California-based banks, down from more than 400 a decade ago, with most experts predicting a continued decline.
"There will be more mergers, particularly now that there is more confidence that the economy is going to be better," predicted Wells Chairman Richard Kovacevich, who headed Minneapolis' Norwest Corp. when it bought the old Wells Fargo in 1998. He has since made 66 acquisitions of financial companies across the West and Midwest, including 21 banks.
Kovacevich said he sees room for Wells to add 400 to 500 branches in California alone, but high prices made it tough during 2001 and 2002. "Now, prices are down," he said. Three months ago, Wells agreed to buy Seattle-based Pacific Northwest Bancorp, with 58 offices and $3 billion in assets, for about $600 million in stock.