Idaho lost its last major in-state bank Monday when Boise’s West One Bancorp agreed to merge with U.S. Bancorp of Portland.
The merger, part of a national consolidation in the banking industry, will leave two major players in the Idaho Panhandle along with a handful of expansionminded independent banks.
Bank customers and business observers bemoaned the loss of banking cachet that West One has offered for Idaho. But few expected any major impact on consumers.
“I’d much rather have the bank here in Idaho than elsewhere,” said Susan Wolf as she walked out of a West One branch on North Fourth Street in Coeur d’Alene. She has banked with West One for about 20 years. “I’ll probably keep my account here and see what happens.”
The other large regional bank with extensive North Idaho operations is Salt Lake City-based First Security Bank of Utah.
First Security “will continue business as usual,” said Bob Mink, the bank’s Lewiston-based Northern Division manager. “The competition for banking services is keen, but I see us offering basically the same services.”
It remains to be seen which bank will have the larger North Idaho presence.
If First Security’s plans for a Post Falls branch come through, the bank will have 14 branches in the area.
West One has 13 Panhandle branches. U.S. Bank has four, one of which will close June 30. Consolidation of some branches is possible after the merger is completed.
North Idaho’s smaller community banks see the merger as another chance to hammer home their marketing message, which centers on the benefits of local ownership.
“When super-regional banks get this big, they’ll tend to make more decisions out of state,” said Jack Gustavel, president of Idaho Independent Bank in Coeur d’Alene. “We think that people want to have their banking decisions made here, locally, so I think this may bode well for us.”
Jon Hippler at Mountain West Savings Bank in Coeur d’Alene sees it much the same way. Growth at his locally owned bank has led to the start of construction this week of a 6,000-square-foot headquarters.
“I think this niche of small, community banks have really focused on a particular market and are able to serve that market better than the big ones,” Hippler said.
The community banks have found a niche because some people like the smaller feel of local banks. Jan Krakenberg, an office manager at a medical practice in Coeur d’Alene, said she wouldn’t take her business and personal banking anywhere else.
“When I have something to deposit, they come to me, and they have a great courier service,” Krakenberg said. “You don’t feel like an account number with them. We have banked with several others in the area, and Mountain West’s is by far the best service we’ve seen.”
Big banks do have millions of dollars in assets to leverage and lend. Their size sometimes allows them to offer better interest rates than smaller banks. They also can offer some financial services at lower costs.
That’s why big bank mergers make sense, and have been sweeping the country since the mid-‘80s.
Still, the loss of Idaho’s largest state-chartered financial institution had some Boise residents surprised Monday.
“The bank had a very long tradition in Idaho and people have some attachment to that,” said Jay Clemens, president and CEO of the Boise Chamber of Commerce. “But when a bank becomes extremely profitable like West One, that’s when it’s most likely to get bought.”
West One officials said that up to 1,100 jobs would be lost in the merger, but Clemens said he thought many of those could come from attrition during the merger. “It’s a little too early to tell what the implications are for us here.”