Wells Fargo Has Crush on California
Editor's note: This column was submitted by Stockpickr member Susanne Owen, also known as the Trading Nymph.
Come on, we can tell. You have a crush. You're thinking about California, aren't you, Wells Fargo (WFC)?
During the bank's Oct. 16 conference call, something jumped out at me: "California continued to be one of our fastest growing states with a 16% increase in core product sales from the third quarter of 2006 on a comparable basis."
Wells went on to indicate that its M&A strategy was to focus on "niche opportunities" combined with investments "to build and strengthen our distribution." Then finally these sweet words: "Given the challenging environment, we expect to see additional acquisition and portfolio purchase opportunities."So why do I believe California is a likely target for a Wells' M&A initiative? California is the eighth-largest economy in the world. Wells' corporate offices are located in San Francisco. And hey, Wells Fargo doesn't seem to like the East all that much -- maybe it's one of those East Coast/West Coast things. None of its branches is located there. But mainly, Wells Fargo's preference is evident in its two latest buys. On Oct. 1, the company completed the acquisition of Greater Bay Bancorp, the third- largest bank acquisition in Wells Fargo's history. Greater Bay had 41 banking stores across the San Francisco Bay Area. It also acquired 39 Placer Sierra Bancshares stores, this year for $645 million. Placer Sierra is based in Sacramento.
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