Since the merger last fall, top corporate lenders at the former BankAmerica Corp. and NationsBank Corp. had seemed the very picture of harmony.
Not only had no one left the business, but top executives had promised that the combined talent of the banks would help the new BankAmerica rival No. 1 syndicated lender Chase Manhattan Corp. in market share and profitability.
Yet last week's departure of three top syndicated lending executives suggests that the transition may not be going as smoothly as believed.
That the defectors-Keith Barnish, Steve Capp, and Mark Lies-were the former leaders of BankAmerica's loan team is more than coincidence, say people familiar with the matter. Before the merger, BankAmerica's loan business was of near equal size to that of NationsBank, and each viewed the other as a competitor, albeit a friendly one.
"The question was: Could they really transform into the credit culture of NationsBank?" said a source close to the bank. "A lot of them were sidelined after the merger. It didn't take long to find out who was the stronger of the two."
T. Lee Pomeroy, a executive recruiter with Egon Zehnder in New York, said the post-merger euphoria has been followed by the realization among former BankAmerica executives that a majority of the top jobs are going to NationsBank executives. The trend, Mr. Pomeroy said, comes from the merge- and-conquer strategy of chief executive officer Hugh L. McColl Jr., a former Marine.
"NationsBank has the track record of being a heavy-handed kind of acquirer," Mr. Pomeroy said. In the case of BankAmerica, "The Marines have taken the beaches, and the departures on the other side have been many."
In their defense, top lenders at the new BankAmerica argue that the loss of the executives was inevitable. The merger, they say, united two of the top-five corporate lenders in the nation, and there was too much talent at the table.
Thomas W. Bunn, the former NationsBank executive who heads syndications and leveraged finance as a senior managing director at BankAmerica, said the merger has created "tremendous bench strength."
Mr. Lies, who joined Mr. Barnish as co-head of the leveraged loan group at Bear Stearns, said his move had more to do with a new challenge than with unhappiness with his role at the new BankAmerica.
"I thought we had good representation," Mr. Lies said. But in regard to assigning authority, "They wanted to shake it through and see what happened, and it probably took longer than needed to be taken."
But sources close to the group say that is not the only reason for the departures. A former BankAmerica lending executive who left last fall said it became clear to almost everyone in the division that NationsBank was "devouring" its merger partner.
"If you sit down and do the math, it becomes quite obvious," the banker said. "For someone like Keith, who had a lot of responsibility about the way the business was run, it became clear that there were too many layers between him and the top."
Some BankAmerica lenders say they were surprised Mr. Barnish took so long to leave. San Francisco-based BankAmerica agreed to merge with Charlotte-based NationsBank Corp. in April 1998. Only a few weeks later, management was named for a syndicated lending shop that would eventually rival No. 1 Chase Manhattan Corp.
Mr. Barnish was placed behind NationsBank's Mr. Bunn in the new unit. The relationship seemed to work well at first, with Mr. Bunn in Charlotte and Mr. Barnish in control of loan structuring in New York.
But as the hard-charging NationsBankers asserted themselves, lenders from the former BankAmerica, in the words of one banker, "flourished or felt left out."
As the merger progressed, former BankAmerica executives saw several departures as evidence that their influence was diminishing in the new bank.
In August 1998 a rumor floated among employees of the former BankAmerica that the bank's former CEO, David S. Coulter, was trying to unwind the merger. A key part of the rumor suggested that Mr. Coulter's action was spurred by anti-BankAmerica decisions and appointments made by Mr. McColl.
"It was just a rumor," said a former employee who was there at the time. "But it gives you an idea what people were thinking."
By late October it didn't matter. The merger had been completed and Mr. Coulter had been fired. By Dec. 31, 14 of the top 45 executives at the old BankAmerica had resigned or otherwise left the bank.
Mr. Bunn denies that former BankAmerica loan executives were being passed over for top jobs. He points to Michael Rushmore, Peter Chan, and John Finan, who have leadership jobs on the research, Asian lending, and syndications desks.
And, Mr. Bunn added, the departure of Messrs. Barnish, Capp, and Lies "will create opportunity for everyone on the platform."
Bear Stearns' Mr. Lies said the new bank's syndicated lending shop was "swamped" with new business, "but there wasn't room for a creative idea, and we weren't No. 1 on the deal."
"BankAmerica used a very much tried-and-true, let's-make-a-loan approach," he said.
However, until last week there had been no significant departures in syndicated lending, where Mr. Barnish was gaining a reputation as a pragmatist. He often deliberated over which loans the bank should make and about credit-a habit that drew some frustration from former NationsBank syndicators.
"It was very hard to get a credit decision at the old BofA," said one insider. "The attitude that Tom (Bunn) exudes is not 'can we do it?' but 'how can we get it done?'"
Mr. Barnish did not return repeated phone calls seeking comment. But other market sources said Mr. Barnish was "more entrepreneurial" than many considered him to be.
"From top to bottom, the old BofA was slow to catch on," a banker said. "Much of it was out of his hands."
Still, after the merger, Mr. Barnish was viewed as top talent at the new bank. He continued to have a strong hand over the loan business, including a recent lead role in deciding whether BankAmerica would commit to $22.5 billion loan to finance a hostile takeover in Europe.
In fact, one senior banker said that Mr. Barnish was told weeks ago to give Mr. Lies and Mr. Capp more responsibility at BankAmerica. But neither banker had been given more authority before his eventual departure.
Ultimately, the sentiment among former BankAmerica executives became restlessness, which finally boiled over last week. One banker said his position at the bank was like being captain of the Exxon Valdez.
"We were at the top," he said. "There was no place to go but down."
