Ms. Bird is a partner of Financial Management Advisors, a New York-based consulting firm, and author of "Supercommunity Banking: A Superstrategy for Success."

Is a merger of equals a myth? Many say it cannot be done. After my conversations with Jim Large and Dick Parsons, the respective CEOs of Anchor and Dime Savings Bank, which recently agreed to merge in an MOE, I believe if anyone can do it, they can. Mergers of equals are so difficult to implement because the personalities almost invariably get in the way. Parsons and Large are determined that, in their case, they will not let that happen.

"We both went into this committed to make decisions on. the basis of what will make the most sense for the new entity, what will create the best potential for success as a combined force," says Parsons.

"It took a lot of courage and vision for Jim to make the right decisions for the shareholders and the new company," he adds. "For example, we did a lot of research on the name, and discovered that the image attributes associated with a bank were better recognized in conjunction with the Dime name than with Anchor, so Jim said, 'That's the name we're going to go with.' That took courage, vision and commitment to succeed."

The new entity will be the fourth-largest savings institution in the country, and the largest on the East Coast. Jim Large is very excited about the new company and its prospects.

"We both thought that consolidation will take place in the industry and that size will be important to command better market presence. An MOE will normally be scary, but not this one. Our corporate styles and philosophy are similar and supportive of each other. We share the same geographic ambition as well, creating a major franchise in the greater New York market. We even have the same customer: Middle America, New York style."

Both Anchor and the Dime based their philosophy on supercommunity banking features. "Big Bank Banking, Small Bank Caring;' was the Anchor's advertising motto.

New Yorkers do respond to service levels, says Large. They are looking for a warm, friendly caring place which has more interest in their community to do business with, and money center banks do not have these characteristics.

Given their market preferences, both the Dime and Anchor created branches where "when someone walks in they feel at home," says Large.

"Our tellers and branch managers live around the comer from the branch. They speak the language of our customer, whether Russian, Chinese, or just plain Brooklyn."

Both Large and Parsons are committed to this philosophy's going forward. Considering the scale-aspects of money center banks, differentiating through service indeed makes sense.

But is it enough? A broad product line is important too, I said. "We already have a good product base tailored for middle America, bread-and-butter services," says Large. "We want to go beyond residential mortgages and CDs for total relationship banking."

Parsons acknowledged the need to build upon that platform: "Banking is a tough but not a bad business. It has low margins, is highly regulated and suffers from overcapacity. But we are in the business of providing an essential service; we are a financial intermediary which a modem society cannot do without. We have existing customer relationships that give us a tremendous leg up. We need to figure out not only how to hang on to our customers but also how to increase our share of their wallet. With both enhanced size and resource base we will be able to make investments going forward and growing other lines of business. We must round out the product offering to a full service consumer financial service company.'

Large and Parsons envision a strong consumer-oriented financial services organization that can compete effectively in the toughest money center in America using service, well-planned branch coverage, and effective cost management, another cornerstone of supercommunity banking.

They plan to realize $50 million of cost savings off this merger. while closing only six of their 100 combined branches.

Shareholders could benefit from this combination as early as year one, capitalizing upon a combined No. 1 share in one major New York market and No. 2 in another. The average branch size is an enviable $127 million, contributing to the cost efficiencies of the operation. Consolidation benefits in data processing and mortgage banking will round out the cost savings of an in-market merger. Jim Large, who has already implemented credible cost containment at Anchor, and Dick Parsons, who, together with Larry Toal, has led a similar effort at the Dime, are both committed to repeat the experience with the combined entity. While both parties are highly enthusiastic about this merger, they are also realistic, 'We found compatibility in all important things, good chemistry in personalities, and working as a team despite the anxiety about personal survival," says Large. "All it takes .now is not to let egos get in the way," confirms Parsons. "We can't let anything but the success of the combined entity dictate how we're going forward." Knowing Jim and Dick, they are likely to stick to this difficult target and make this an MOE in every sense of the word, an MOE that will work.

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