My merger history

This is a summary account by another wonderful secretary. Originally joining a US bank in 1979, she experienced six takeovers, two wholesale reorganisations and one downsizing before retiring from the same office 18 years later.

It is taken from the Journal of Lending & Credit Risk Management for July 1998.

"My merger history starts in 1987 when Rainier Bank merged with Security Pacific. In 1992, Security Pacific merged with Bank of America. I stayed on to baby–sit the small business loan portfolio as Bank of America sold it, along with 86 branches and some departments (at the direction of a number of government agencies). I followed part of that small business portfolio sold to West One Bank (Idaho) only to see West One merge with US Bank in 1995. Less than two years later, US Bank merged with First Bank Systems.

Through it all, I participated with and listened to the personal tragedies and triumphs mergers bring, without once moving from the 20th floor of the same downtown Seattle head office building. Yes, I ended my Seattle banking career 30 feet and 17 years from where I started.

I manoeuvred the minefields of emotional highs and lows, survived the self–doubts and participated in or ignored endless and sometimes silly rumours. I whined with the best and growled with the worst, but, in the end, I learned what to expect and did my part to help ease the pain of transition. In the last two mergers, I counselled employees more often than I counselled bank clients. To the merger virgin, the world had ended. To the vets, it was just another day in the banking business.

While each merger had its own flavour, the six mergers I experienced shared several elements:

  • The merger virgins were blind scared for two reasons: they did not know what would happen to them, and they were haunted by memories of empire–building turf–wars during past mergers in which they were the acquiring bank.
  • I remember the arrogant disdain of the victors – how they looked down on us and how that made us feel. One head office vice–president told me that our acquisition had occurred because we did a poor job running our bank (at a time when our bank sold significantly over book).
  • The acquired bank´s employees felt like second class citizens. We begged, borrowed or stole equipment to set up a working office. We settled for hand–me–down computers and surplus desks. Turf scoundrels hunted the floors and departments like hungry sharks.
  • Strangers invaded our offices, unannounced, to plough through our files, ignore our questions and disrupt our lives – all in the name of ‘due diligence’.
  • After the invaders left, the unsung heroes, who made the merger happen and the transition work, arrived. These people bent over backwards to help us. They explained the new way of banking. And for every one member of the transition team who shouted "my way or the highway", dozens more came laden with policy and procedures manuals and with patient instructions. These angels of mercy trained us, supported us, and gave us back our self–esteem. They made us feel like part of the team. They listened to our "but we did it this way" litany and patiently showed us that we took separate paths to accomplish the same things and meet the same goals. Official merger communication became an important part of our daily lives. Every employee studied the ‘transition newsletter´ with an electron microscope. But each of us read into the newsletter what we hoped to read. We wanted to believe that there would be fewer lay–offs than the newspapers reported, and that after the merger everything would be, magically, better. I remember the bitter disappointment when actual events diverged from the earlier announcements. The official communication lines often added to the confusion as later announcements clarified any misunderstandings from previous ones.
  • Confusion added fodder to the rumour mill. Phone lines rang with stories of obscene pay–offs to the executives, of secret deals, diamond–studded golden parachutes for the few and enough concrete parachutes to bury the rest of us. It became commonplace to hear hallway and office whispering of people speculating which department would make it, or which homeboy executive would make the cut and save his or her division from slaughter. There were rumours of white knights coming to the rescue with last minute bids to save us from the ´hostile’; merger, with the hope that everything would return to normal. In each merger I lived through, Norwest Bank was that white knight, and that rumour persisted until the merger ink lay drying on the parchment.
  • Morale tumbled and productivity slipped, as each phone call meant 45 minutes of merger madness and 15 minutes of productive work. Senior management walked the halls with stunned expressions that slowly turned to resignation that they no longer directed the future of the bank. That direction would come from their counterpart at the new head office. Many of us thought the president or the CEO sold us out. Loyalty became as vague as our future. Those that buckled, bailed out – many with a job to land in. Others, too frightened to quit, did nothing except hope for a position, any position, in the new bank.
  • When the decisions are made about who stays and who goes, a not–so–subtle shift develops. Those employees that stay, settle down to business, their future now determined – they have a job. Those that will lose their job discuss job prospects, interviews, vacations and two pay cheques. One group congratulates itself for surviving the merger, while the other group develops a short–timer´s attitude. After a few weeks, the two groups hardly interact.
  • For most of us, the bright spot was the severance package. A package softened the blow of a lost lob. While a good severance payment may hold someone until the very end, so will a package that offers less payment but more services. We worked just as hard for two weeks of salary for every year as we did for four weeks. All bets were off, however, when the bank could direct who received the better package. While this may make economic sense, it devastated personnel. On April Fool´s Day in 1997, while I froze my toes off during a wicked equipment repossession (yes, I was a workout specialist), our department was informed of the termination date. When I joined the office meeting, the mood was stunned anger. I learned that our group would get the inferior severance package, a decision that reduced some severance packages by as much as 66 weeks of salary. I laughed. I told the merger virgins the decision would be changed very soon; senior management would not let that happen once they knew the repercussions. However, as word spread, others in the bank were terrified that they, too, would get the inferior severance package. Morale and productivity fell to a new low, while bad press and legal tangles began to mount. As is true with any well–run merger, the transition management team quickly reversed the decision – everyone was to get the superior severance package.
  • The last ones out the door have a bittersweet memory. It is unnerving to be the last one to leave a department – forever – and to turn off the lights, close the door and know that no one will perform the job again. I did that twice, and I still get goose–bumps thinking about it. Even merger veterans go through a self–worth evaluation. Were we really that bad? Why do we feel like cattle being bought and sold at auction? Do we blame the bank´s executives for the merger? Who is to blame? How can we stop this merger? Why us? these are gut–wrenching questions that torment us from the merger announcement to the point that we finally accept the merger, let go of the past and embrace the future."

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