First Security Corp. (FSC) is seeking regulatory approval to merge its First Security Financial subsidiary - the former Murray First Thrift that FSC acquired in 1982 - into First Security Bank of Utah, the bank holding company said Wednesday.
The merger would mean some of the six First Security Financial offices would close - including the flagship office at 135 S. Main - while others would be converted into bank branches.First Security Financial President C.S. Cummings said he expects regulatory approval within 60-90 days for the bank to acquire the assets and liabilities of First Security Financial.
First Security Corp. Chairman Spencer F. Eccles said the move is intended to create better service for FSC customers.
Eccles said that when First Security entered the thrift and loan business in 1982, it did so for two reasons.
"The first was in response to a request made by the state of Utah, which asked us to acquire the failed Murray First Thrift. This we did, stepping in and guaranteeing all of the deposits of that troubled institution so that none of its customers lost money."
The second reason, he said, had to do with banking regulations in force at the time.
"We felt that the acquisition of a thrift and loan company would enable First Security to provide a broader range of products and services to its customers. This proved to be the case, and over the years, many First Security Bank customers have also become customers of First Security Financial.
"In fact, today nearly half of First Security Financial's customers also have one or more relationships with First Security Bank."
Eccles said deregulation of the financial services industry since 1982 has broadened the scope of the products and services that banks may offer customers.
The result, he said, is that the combination of First Security Financial with First Security Bank of Utah "will make more products and services available to Financial's customers than they currently can get from a thrift institution."
A prime selling point of thrifts has been rate of return on deposits, but First Security Bank President Scott Nelson said banks are now competitive in that arena.
"For example," he said, "the recent special certificate of deposit we offered carried a rate that was among the highest available. In addition, there is the peace of mind that comes not only from having deposits insured by the Federal Deposit Insurance Corp. (FDIC), but also having them backed by First Security Bank of Utah, this market's largest, locally owned financial services firm."
Cummings agreed, saying the merger will provide a "tremendous increase" in services available to First Security Financial customers who will have 90 First Security Bank offices to choose from rather than only six First Security Financial branches.