irst Interstate, with assets of around $55 Billion is the nation's 14th largest bank. Both are regional banks, with primary emphasis on California holdings (Mulligan, 1995, p. A1). However, Wells Fargo is a bit more regionalized than is First Interstate, with its main area of operation being in California, while First Interstate operates in 13 Western States. However, while First Interstate is the only major bank headquartered in Southern California, Wells Fargo actually maintains a greater presence in many Southern California areas, particularly in Orange County, than does First Interstate. Despite the overlapping territory, however, there are some serious questions about the compatibility of the two banks.
Wells Fargo is among the most highly prized banking stocks in the country, with current stock prices in excess of $200 per share. Many of the nation's most prominent investors maintain major holdings in the issue, such as Walter Annenberg with an 8.8 percent holding and Warren Buffet with a 13.3 percent stake. First Interstate, on the other hand, typically traded in the $100 per share range, with a much more diverse set of investors, although Kohlberg, Kravis, & Roberts did maintain a sizable 7.6 percent holding (Mulligan, 1995, p. A1).
The primary area of difference, however, lies in the operational philosophy of the two banks. As noted above, Wells Fargo has traditionally focused on the lucrative California banking market, while First Interstate has expanded into all Western states. Additionally, Wells is an industry leader in automated and home-computer banking. Recently, Wells has expanded aggressively in the area of kiosk banking, wherein small outlets, staffed by a single bank clerk, were placed in hundreds of supermarkets. Wells plans further expansion in this latter area, having recently gained exclusive agreements with four of California's top five supermarket chains. These agreements will allow Wells to: (...