Californians Fear Kiss-Off from New BankAmerica

The planned move of BankAmerica Corp.'s headquarters clear across the country has some of the company's hometown constituents in a tizzy.

In the days after last Monday's announcement that the bank would merge with NationsBank Corp. of Charlotte, N.C., some people passing the main Bank of America branch on California Street seemed indifferent to the news.

But many reacted very negatively.

"This is going to hurt the city," said Sharon Gaeta, a travel industry accountant outraged enough to say she will close her account. "BankAmerica has contributed heavily to San Francisco and to California charities," she said, "but after the merger their interests will lie elsewhere."

"It is just ridiculous they are leaving," said an elderly customer-a former BankAmerica employee and longtime city resident who would be identified only as Jenny. "This bank was born in San Francisco, and it helped San Francisco become reborn."

She was referring to the bank's place in the city's lore-its founding as a "bank of the people" by the legendary A.P. Giannini, whose opening of a makeshift office after the 1906 earthquake quickly restored faith and liquidity in the local economy.

Giannini, though, had national and product-expansion ambitions of his own that had to be reined in by restrictive banking laws.

"Everything I know about the guy said he would have done this transaction in a minute, because he wasn't going to be bound in by San Francisco," said David A. Coulter, BankAmerica Corp.'s chairman and chief executive officer, last week.

"When you look at this franchise," Mr. Coulter said of the combination with NationsBank, "I think it is the dream he was pursuing."

At a press conference last Tuesday in BankAmerica's boardroom, Mr. Coulter, who would be president of the combined BankAmerica-NationsBank, gestured to a looming portrait of Mr. Giannini. The founder would be proud of this transaction, he suggested.

Mr. Coulter, who intends to keep his San Francisco base, answered complaints by saying the merger could actually be a plus for the city.

"We've enjoyed the benefits of being part of this community for some time, so our commitment is certainly not going to slacken going forward," he said. "It may well increase. We are not leaving San Francisco."

But news of the deal, or what it symbolized, was hard for some to accept.

"They are already pretty big and impersonal, and now they are going to get that much bigger and more impersonal," said B.J. Young, a stockbroker who works in San Francisco. "I'm really pissed off about this."

"I really liked the fact that I was dealing with a bank that had a long history in California," added a patent attorney who asked to remain anonymous.

"The overriding concern is that this new bank does not fully understand California's huge retail market potential," said Robert Gnaizda, general counsel of an often vocal local advocacy group, the Greenlining Institute. "NationsBank has no experience with the huge Asian and Latino communities in this state."

Others lamented that California, despite having one of the most vibrant economies in the world, has been losing its large, prestigious locally based institutions.

If Wells Fargo & Co. succumbs to the pressure to sell, as many analysts say it will, San Francisco will have lost its last big commercial bank-like Dallas, Denver, Los Angeles, and Seattle before it.

"The stature of San Francisco as a banking center is slipping away," said Richard D. Puntillo, professor of finance at the University of San Francisco. "I can't believe that the new center is going to be Charlotte, of all places. That just doesn't sound right to me."

After Wells Fargo, the largest bank holding company with headquarters in the Golden State is $5.7 billion-asset City National Corp. of Beverly Hills. The last sizable thrift that has not been acquired by out-of-staters is World Savings and Loan Association, a $40 billion-asset institution in Oakland.

Some at the BankAmerica branch seemed unperturbed that they would be dealing with a $570 billion-asset behemoth after the merger with NationsBank.

"I don't think it will have much of an effect on me," said Jonathan Kelly, a stock options trader who keeps a checking and savings account at Bank of America. "I'm pretty low-maintenance when it comes to my banking. BofA has always been good for me, and I don't think that will change."

"In all of these deals, everyone is so focused on the customer," said James Bradshaw, an analyst with Pacific Crest Securities in Portland, Ore. "The new regime will do everything in its power to keep California intact, because it is such a very valuable portion of the franchise.

"I don't think from a customer perspective you are going to see much of a change."

NationsBank chief executive officer Hugh L. McColl, designated to be chairman and CEO of the new institution, argued that the location of headquarters is a nonissue.

"Look, we operate in way more than 1,000 cities and communities in this country," Mr. McColl said. The new BankAmerica's headquarters will be wherever it has a branch office, he added.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER