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,"
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