From his perch atop the 37th floor of Fleet Financial Group's Boston headquarters, Brian T. Moynihan scours the nation searching for companies his bank might like to buy.
Mr. Moynihan, 40, is senior vice president in charge of corporate strategy and development for Fleet, one of the nation's most acquisition- minded banks. That means he brings merger ideas to the top brass and board of the $87 billion-asset company, and he often actively takes part in negotiating deals.
As at many banks that have grown rapidly in the 1990s, mergers and acquisitions have been the key in transforming Fleet from a regional banking company to a diversified financial services corporation with nationwide aspirations.
"It's a competitive edge if you understand how the industry is moving from the inside," said Mr. Moynihan, a 40-year-old lawyer-turned-dealmaker who speaks, one investment banker observed, "with a total absence of superfluousness."
Yet his words pour forth so rapidly it's as if he'll miss the next deal opportunity should he slow down.
Mr. Moynihan oversees a staff of 20 devoted to hunting for mergers and plotting corporate strategy.
It's a sign of how much banks think about mergers nowadays. Besides the typical business of collecting deposits and making loans, more than ever banks retain people whose job is plan and analyze acquisitions.
Though big banks still call on outside investment bankers for ideas and opinions on the prices of their deals, they scout potential targets and often negotiate on their own. "Most people know which banks are out there and what they're like," Mr. Moynihan says.
In the last 10 or 15 years, nearly every chief executive at a major bank has seen fit to find an M&A person like Mr. Moynihan.
Frank Gentry serves as top deal adviser and analyst for NationsBank Corp.'s CEO, Hugh McColl; William Boardman serves the same role for John B. McCoy at Banc One Corp.; Terrence Wise has been in-house M&A adviser to First Chicago NBD Corp.; Doyle Arnold for BankAmerica Corp.; Peter Manning for BankBoston Corp.; John Granoe for Norwest Corp.; Andrew Tyson for KeyCorp; Richard Zona for U.S. Bancorp.; and Walter Gregg Jr. for PNC Bank Corp.
Most of these people prefer to operate like investment bankers-behind the scenes, far from the madding crowd of investors, analysts, and reporters. Most aren't even listed among the company's top executives in annual reports or proxy statements. Only Banc One's Mr. Boardman makes appearances on days when deals are announced.
Mr. Moynihan joined Fleet in 1993, after the bank hired the law firm he worked for, Edwards & Angell of Providence, R.I., to advise the bank on its acquisition of the failed Bank of New England, a deal that hoisted Providence-based Fleet into the role of New England's biggest bank.
Fleet has been on a shopping spree since he came aboard. In 1995 the bank acquired Shawmut National Corp. and relocated its headquarters to Boston. In 1996 it bought National Westminster Bank's U.S. division.
Those acquisitions gave Fleet the heft to branch out of basic New England banking. Last year, the company acquired Quick & Reilly Group, the stock brokerage firm, and investment manager Columbia Management Co. It closed its deal for credit card issuer Advanta Corp. in February.
Along the way, Fleet gained a reputation as one of the shrewdest acquirers in the banking business. It acquired Natwest, for example, for only 1.05 times book value when the median for deals was 1.99 times book.
Mr. Moynihan takes some of the credit, but not all.
"Shawmut was a deal done solely by (Fleet CEO J. Terrence) Murray and (Shawmut CEO Joel) Alvord," he recalls. "But on Natwest, I doubt Murray met (Natwest CEO Derek) Wanless more than once or twice, so (vice chairman H. Jay) Sarles and I negotiated that. On Columbia, I did 100% of the negotiations."
The common thread throughout the Natwest, Advanta, and Columbia acquisitions was that all had been on the market for several months before selling to Fleet. "They lie in the weeds for a long time, wait for everyone to go away, and then they make quick strike and get the deal," said an investment banker who has represented parties that sold to Fleet.
The Advanta deal, in particular, stands out as a potential coup for Fleet. Six banks and credit card companies explored buying Advanta, but all turned down a deal. Fleet also initially declined because, Mr. Moynihan said, Advanta was building its subprime mortgage lending operation and Fleet had just gotten out of that business.
Like other banks, Fleet wanted the credit card piece of Advanta, to build that business. But while some companies were unable to strike a deal, and others were scared off by the credit card business altogether because of rising loss rates, Fleet kept at it. Mr. Moynihan said the bank explored doing some sort of venture with its leading investor, the renowned leveraged buyout firm KKR Associates, but nothing came of it.
Finally, after being on the block for more than eight months, Advanta management agreed to sell off just their credit card business to Fleet, for only a $500 million premium-a veritable fire sale price compared to other credit card sales. "We got a very good purchase price," Mr. Moynihan acknowledged.
The question facing Mr. Moynihan and Fleet's other top executives now is whether the company can continue its strategy of buying companies on the cheap.
Fleet continues to look for an investment bank, Mr. Moynihan said, to build its corporate finance and investment management business. He seemed to suggest that the company would be just as interested in buying pieces of companies as entire entities.
"Core banking consolidation is a powerful thing, and we plan to play in it," he said, adding "there are a lot of companies that have lines of business that fit with us."
Some analysts say Legg Mason Inc., a Baltimore investment bank with a big mutual fund business, would fit in well with Fleet's goals.
But the key to Fleet's continued success-and independence-appears to lie in what made it big in the first place: buying big commercial banks. And many question whether the $87 billion bank, for all its acquisitions, has the heft to make the mega-deal needed in the sprint for size.
"They are in an awkward position," said a person close to Fleet. "NationsBank and Banc One have announced their deals, and there isn't a lot left for Fleet to get."
The market seems to think Fleet will set its sights on a merger-of- equals with PNC Bank. PaineWebber recently called that "almost a natural combination" in a recent report.
But a person close to Fleet said such a deal would "satisfy no one" because it wouldn't offer many possibilities for cutting costs nor create the nationwide company so many bankers pine for nowadays.
For bankers like Mr. Moynihan, who devote their careers to plotting moves in the vicious battle for national banking prominence, such somber possibilities are ample reason to keep a close watch from their perches.
