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Posted 24 Feb 2001   For week ended December 08, 2000
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Sent on Mormon-News: 12Dec00

By Rosemary Pollock

How Zions Bank Is Recovering From Failed First Security Merger

SALT LAKE CITY -- After a failed merger with First Security Corp., Zions bank is being instructed by analysts to return to its original strategy. U.S. Bancorp analyst, Erick Reim said, "They go back to the formula that made Zions one of the best-performing banks of the 1990s." Zions formula is a simple one of making small acquisitions and not big mistakes.

The disastrous deal with First Security left Zion with only a dream of assets of more than $40 billion and a place among the top 25 largest banks in the country. The harsh reality is that the failed deal left Zions with a loss of about $137 million and a badly bruised reputation on Wall Street.

"We try to preach in this organization that banking is a local business," said Harris Simmons, Zions' chief executive. In the past, Zions has operated like a collector of small banks, gathering products and services that left it with nearly $22 billion in assets. Zions is now trying to concentrate on markets the bank knows.

Zions acquired Aspen Bancshares in 1997 and Vectra Banking Corp. in 1998. Eight other acquisitions followed that year. "We don't try to be all things to all people," said Bruce Alexander, Vectra's president and CEO. "They allow us to grow in the markets we know," he said.

Simmons has talked about the "McDonaldization of the banking industry" adding that McDonalds is his favorite 10 minute lunch. "How do you compete with larger banks? In some sense, it's by remaining very small and local."

Zions is hopeful of finding attractive buys even though there is widespread consolidation in the industry. "There is still a lot of opportunities, at any given time, we find ourselves considering a half a dozen or more," Simmons stated.

Simmons has increased Zions size fivefold since becoming chief executive in 1990. David Winton, analyst for Keefe Bruyette &Woods Inc. said, " Zions is a tremendous company."


Zions back to basics after failed merger deal
Denver Post pgL01 3Dec00
By Guy Boulton: Special to The Denver Post


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