First Security buys Reno bank

First Security Corp. of Salt Lake City today announced plans to acquire Reno-based Comstock Bancorp and its five branches in Reno, Sparks and Carson City and lending centers in Reno and Carson City.

The $65 million stock deal is expected to close in the spring.

For First Security, it was the second announced acquisition of a Northern Nevada bank in a month. The company announced it was buying Nevada Banking Co. of Stateline on Dec. 30.

In acquiring the $225 million in assets of Comstock, First Security, which has 13 Las Vegas-area offices, will have about $1.35 billion in Nevada assets.

A First Security spokesman said today it hasn't been determined whether Comstock would retain its corporate identity, but the company's track record has been to have acquired banks use the First Security name.

Terms of the acquisition call for the tax-free exchange of about $65 million in First Security common stock for all of Comstock's outstanding common shares, including options and warrants. That value will stay fixed as long as First Security's average stock price remains between $18.70 and $24.05 during the 10 consecutive trading days preceding the closing date.

"First Security is extremely pleased to expand in northern Nevada with this outstanding bank," Dave Smith, president and chief executive officer of First Security Bank of Nevada, said in a statement. "Comstock Bank has developed a distinguished reputation serving northern Nevada businesses and consumers since 1981. The bank is very well capitalized and profitable and makes an excellent strategic fit."

Robert Barone, chairman and chief executive of Comstock, said in a statement: "While we have modernized our technology platform over the past three years, we have found that, as a small community bank competing with global financial services organizations, we simply do not have the resources to keep pace.

"As a result, while our profitability remains excellent, we decided to seek a partner that is financially sound and community oriented, has a complete array of products and services and has an orientation toward the West. We found that partner in First Security, a company in which many of the senior managers began as we did, as community bankers, and who continue to hold community banking values."

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