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Wells-First Interstate: it's finally showtime
Los Angeles Business Journal, July 22, 1996 by Liz Mullen
It's D-Day for Wells Fargo.
The San Francisco-based bank legally completed its merger with Los Angeles-based First Interstate Bancorp on April 1. But as far as most consumers are concerned, the real merger will begin unfolding this weekend when branches from both banks are closed, First Interstate accounts are moved to Wells Fargo & Co, and remaining First Interstate branches are converted into Wells Fargo branches.
The Wells-First Interstate merger is not the biggest bank merger in U.S. history, but banking experts say it's likely to be the fastest consolidation of bank branches on a massive scale.
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Altogether, Wells will close 255 bank branches on the weekends of July 27 and Aug. 10. That includes 176 First Interstate branches and 79 Wells branches.
"The plan is to have a First Interstate branch on Friday, and on Monday to have a Wells branch with the look and feel of Wells Fargo," said Marcia Donner, Wells Fargo senior vice president of retail banking, who will oversee the conversion of the branches from a former Wells Fargo branch in Glendale.
There, task force leaders will make sure that branches are meeting the timetables for the conversion, she said.
Wells' plan to essentially complete the consolidation of branches on two weekends two weeks apart "is very ambitious," said Jim Neckopulos, partner in charge of the financial markets business consulting practice for the L.A. office of Arthur Andersen & Co.
"I would have to say it's unprecedented," said Neckopolus, who has advised a number of banks on consolidations, including Bank of America when it merged with Security Pacific National Bank in 1992.
Bert Ely, an Alexandria, Va.-based banking consultant, said he has not heard of any bank consolidating so many branches so soon.
"Wells is moving very quickly; there is no question about that," Ely said. "But I would expect nothing less from Wells. Their reputation is that they move quickly."
Ely noted that a bank consolidation "is almost like a very precise military operation. It has to be very well thought out."
The Plan
Thought out it is. For weeks, teams of Wells executives have been mounting a detailed plan to seamlessly consolidate the two banking giants. During the two weekends, thousands of tasks will have to be accomplished, making an ordinary office move look like child's play.
More than 45 outside companies will provide services in the consolidation, according to Douglas Sharp, principal of the San Francisco-based Satulla Group, a real estate company that is helping Wells coordinate all the vendors.
Those vendors include sign-hangers, safe deposit box movers, computer monitor installers and paper shredders, who will troop through the branches at different times during the two weekends.
Wells Fargo banners will be placed over First Interstate signs.
About 1.4 million safe deposit boxes will be moved.
Cables and computer boxes will be installed in the former First Interstate branches so that they will be hooked into the Wells computer systems and telephone lines.
Wells officials would not say just how many of its employees are involved in the conversions (nor would they indicate the price tag).
For all branch personnel, it will be a working weekend - including those employees who are expected to be laid off later this year. In addition, about 100 corporate Wells employees who don't usually deal with customers have been tapped to work the conversion weekends.
A Wells employee will be stationed at each closing branch for a few days after the conversion. And signs will be placed on the closing branches directing customers to the new branches, Donner said.
Since April, First Interstate customers have received numerous mailings from Wells Fargo alerting them to the upcoming change and explaining what it will mean.
Over the last few months, First Interstate customers have received letters of welcome from Wells Chairman and CEO Paul Hazen, as well as a full-color booklet explaining the differences in the various financial products.
Donner said she doesn't anticipate any major problems involving First Interstate customers switching over to Wells.
"This merger has received so much publicity, most of the customers know what is going on," Donner said. "What some don't know about is the timing."
Weeks in the planning
Donner said that in the last few weeks, Wells has posted schedules of branch conversions at the individual branches.
Joseph Laughlin, vice president in charge of corporate strategic planning for Wells Fargo and the executive in charge of the overall transition, has been working on the merger before some First Interstate executives were even aware that Wells was planning a takeover.
It was in September of 1995 that Laughlin began studying First Interstate's operations, looking at everything that was publicly available about the L.A.-based bank.
Laughlin worked up the business plan that Wells used when it first made its hostile bid to acquire First Interstate in October of 1995.
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