When the dust settles on any successful bank merger, many people naturally line up to take a bow. Certainly, the due diligence team deserves its share of praise, as do the deal negotiators, accountants, attorneys, and other advisers.
Less visible than the transaction professionals, but equally important, are what we could call the real unsung heroes in any deal done right. Here you will find employees, on both sides of a transaction, who must make it work for the customer after the deal has been struck by the senior executives. That is when the real work begins, after the papers are signed and the change of control occurs.
Data Processing and Accounting
Take for example the systems conversion process. Done right, on time, and within budget, the data processing team will have a profound impact on the success of the deal. In one merger, we saw a technical support person working around the clock to find several gaps and system errors in an otherwise smooth conversion plan.
What this employee did was to find and fix the problems - very few others in the organization ever knew about their significance - with the result that customers of the bank had no interruption in service levels. It wasn't his particular job to do this, he just did it. Initiative is an executive quality, whether or not one inhabits the executive suite at the moment.
Asset Quality Team
Next, those assigned to manage and monitor asset quality during the interim period often also deserve much of the credit. One collection supervisor we saw took it upon herself to go beyond the call of duty during an acquisition's post-closing period, watching the asset quality almost as if the portfolio consisted of her own money. And the results showed.
Delinquencies and chargeoffs dropped during her watch, making the deal more profitable than the initial pro forma profit-and-loss forecast.
The sense of personal ownership these employees took in seeing that their organization's transactions went smoothly was the real behind-the- scene story.
Branch Impact Critical
As we have seen time and time again, the branch staff can make or break a deal. If their customers get the idea that the headquarters team is keeping branch staff abreast of the deal's progress, the same enthusiastic and informed attitude is passed along to customers. The customers then stay more loyal to the merged organization.
In the most successful transactions, long after the regulators have approved the deal and the ink has dried on the new stationery, you will find employees of both institutions in a merger or acquisition going about their business, doing their normal bank jobs, plus the additional duties brought on by the deal. How they perform these extra duties will often determine the merger's success or failure.
In another $400,000,000 deal, we saw several heroes: a buyer's interim- period manger sent on-site being sensitive to the employees of the selling organization, and line mangers at the seller who had the professionalism and pride to pass on the sold portfolio after the lengthy four-month interim period in as good or better condition than when it was sold.
These are the real heroes, often unsung - employees who take it upon themselves to give 100% to make the deal work, not only in their superiors' eyes, but in their customers' eyes.
When you peel back the veneer, what you find can be surprising. One very successful acquisition team at a superregional bank didn't have the budget to get all the deals it thought it could. A separate marketing division within the bank gave up a substantial portion of its annual budget to invest in the activities of the acquisition team. An unselfish act which cost one unit its ability to do some of the things it wanted to do for the greater good of the organization is another hallmark of unsung heroes.
How to Find Unsung Heroes
Where do you find these heroes in a bank merger or acquisition? You will find them in some unlikely places, not in the corner office, or on mahogany row, or in other visible places.
You'll often find them downstairs, perhaps in a supervisor's cubicle in the operations center, or at the desk of someone doing data-mapping in the computer room, or even working a collector's queue.
You will find them wherever you have employees who don't have it in their job description to do billion dollar deals, but whose attitude and work ethic make those deals happen just as assuredly as if they were the lead investment banker.
There you will find your unsung heroes, and the reasons your mergers and acquisitions work as well as they do.