Compass Bank: Buyout won't mean job losses
Published: Thursday, March 1, 2007 at 6:01 a.m.
Last Modified: Wednesday, February 28, 2007 at 3:26 p.m.
Compass Bank says it will keep its name and its employees despite its purchase by a Spanish financial group earlier this month. In fact, the company says customers may not notice any difference at all.
Banco Bilbao Vizcaya Argentaria, S.A. of Spain purchased Compass Bancshares, Inc. in a cash and stock deal worth $9.6 billion, the companies announced Feb. 16.
When the deal is complete, Compass will become a subsidiary of BBVA under the same management. BBVA purchased three Texas banks in recent years that will be merged into Compass, making it the largest regional bank across the Sunbelt.
Compass has 44 offices in Florida, including five in Gainesville.
"There's no job loss. In fact, this will allow us to expand more rapidly than we had been in the past," said Steve Mitchener, Compass regional president based in Gainesville. "Customers keep dealing with the same people. They don't have to change their checking account, and shareholders got a nice premium, so it's good all the way around."
Compass shareholders can receive $71.82 worth of cash or stock from the deal.
In an age of conglomeration, Mitchener said the deal means Compass is in better position to keep its identity.
"Our probability of ending up a player at the end is much greater with this financial resource behind us. We're not going to get gobbled up," he said.
Michael D. Ryngaert, University of Florida finance professor, said domestic banks are often happy to be acquired by foreign banks because it means far less disruption.
"People keep their jobs," he said.
He pointed out that BBVA's stock price fell on the deal, meaning they overpaid.
UF Professor Arnie Heggestad said that means BBVA will have to grow deposits or cut costs to make money on the deal.
Mitchener said the deal is all about revenue, not cost savings.
BBVA, with operations in 35 countries, is the largest bank in Mexico and second largest in Latin America. Compass is a $34 billion bank with 415 centers in Alabama, Arizona, Colorado, Florida, New Mexico and Texas, increasing BBVA's presence in large Hispanic markets in the U.S.
Heggestad questioned how North Florida branches fit into a company with interests in a Hispanic market, although he said Compass may have growth potential into Hispanic markets further south.
"The question is what will they do in the longer run," he said. "Your life always changes when you get acquired."
Compass purchased Gainesville State Bank in 1998.
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