Wells Fargo to buy Century Bancshares in Early 90’s Flashback

So, is this a repeat of 1990-1991? While the other banks are going bust, shedding assets and dumping garbage on their books for pennies on the dollar, Wells Fargo (WFC) quietly stays above the fray and expands. Today it announced the purchase of Century Bancshares (

From the release:
“Wells Fargo & Company (NYSE:WFC) and Century Bancshares, Inc. said today they have signed a definitive agreement for Wells Fargo to acquire Century Bancshares and its banking operations in Dallas-Fort Worth, and Texarkana, Texas and Arkansas in a stock-for-stock merger. As a result of the acquisition, Arkansas will become Wells Fargo’s 24th community banking state.

The acquisition – requiring approval of regulators and Century Bancshares shareholders, and expected to be completed by the end of this year – will increase Wells Fargo’s presence in Dallas-Forth Worth, the U.S. metro area with the largest population increase from 2006 to 2007, according to census data. It also will make Wells Fargo No. 1 in deposit market share in Texarkana.

Closely held and based in Dallas, Century Bancshares has $1.4 billion in assets, $1.3 billion in deposits, $1.2 billion in loans, 32 banking locations and 485 employees. It has 28 Century Bank locations in nine Texas communities – Dallas (11); Atlanta; Addison; Farmers Branch (2); Frisco; The Colony; Plano (3); New Boston; and Texarkana (7). Four Century Bank locations are in Arkansas – Texarkana (3); and Ashdown. Century Bank is the leading financial institution in Texarkana and surrounding communities.

“The combination of Century Bank and Wells Fargo will be a great benefit for our customers, our employees and the communities we serve,” said Joe Nichols, CEO, Century Bancshares. “By teaming with Wells Fargo, we can continue delivering the excellent personal service and financial advice our customers expect, and offer them more products and services, and more convenience throughout Texas and the western United States. We also will remain a leader in supporting our north Texas and Texarkana communities.”

The key here is that Wells Fargo is now one of the largest institutions on a region that is growing at a break-neck pace and up until this point, has been relatively immune to the economic malaise affecting so much of the country.

This is the same playbook Wells Fargo played by at the turn of the 1990’s during the last housing downturn. It worked stunningly for shareholders then and looks to be loading them up for similarly out-sized gains now in the year to come. You’ll remember that Wells latest 10-Q did not contain the despair that other banks like Citi (C), Wachovia (WB) or even JP Morgan (JPM) did.

Berkshire’s (BRK.A) Warren Buffett bought heavily into WFC then, one has to wonder if he is picking up more now..

Disclosure (“none” means no position):Long WFC, C, WB, None