In late March, credit analysts with Travelers Group were told to run the numbers on Citicorp.

The analysts, with Travelers' Salomon Smith Barney unit, thought the request was routine-preparation for a deal their firm would help Citicorp underwrite.

Several days later, they found out the true reason. They were crunching numbers to help put together the financial services industry's biggest merger ever- Travelers' teaming with Citicorp.

Such an approach to due diligence is fairly typical in today's fevered merger market. Financial institutions are under pressure to get deals done quickly and with as little advance information getting out as possible.

By doing deals quickly and quietly, would-be merger partners can avoid news leaks. But they may also compromise the depth and precision of the review, experts say.

For instance, the credit analysts at Salomon Smith Barney said they would have preferred to have known why they were looking at Citicorp.

"We didn't know we were going to merge with them," one said. If they had been told, the credit analysts would have conducted the review with more of an analytical bent, he said-especially given the size of the transaction.

Indeed, in the first half of 1998, banks embraced the idea that bigger- much, much bigger-is better, and mega deals came with rapid fire regularity.

But as the initial awe wears off, veteran deal makers are questioning if enough advance work is being done to justify the fanfare-and projections- that accompany announcements of both large and small mergers.

"You have to wonder if the acquirer has done the level of due diligence that is necessary," said H. Rodgin Cohen, a partner with Sullivan and Cromwell, a law firm that has long advised banks on mergers.

Complacency could jeopardize domestic deals and be disastrous for banks that team with foreign financial service companies before considering all their complexities, observers say.

No deal has yet to "splatter against the wall" because of a lack of due diligence, said Nancy Bush, banking analyst with Ryan, Beck & Co.

But one-Wells Fargo's purchase of First Interstate-did "fizzle," as Wells failed to gauge the difficulty of holding on to customers, Ms. Bush said.

Wells also did not look closely enough at First Interstate's computer systems and could not get them on track after the merger, analysts said.

Now, Wells itself is slated for a takeover, by Norwest Corp.

Also, a failure by banks to consider management issues has caused the loss of top employees at acquired brokerage and investment management firms.

"They've got to sit down beforehand and consider personalities, compensation, and their different management styles," said Gerard Cassidy, banking analyst with Tucker Anthony.

Mellon Bank Corp. learned this first hand when it acquired Boston Co. and saw many of the investment firm's top executives leave, Mr. Cassidy said.

The managers, including key investment officers, bristled at the new owner's perceived heavy-handedness and ultimately became competitors of their former employer.

Indeed, missteps defeat the purpose of consolidation-to make banks more efficient and competitive.

A stumble could be costly for the bank's shareholders, who could receive reduced returns, and for customers, who could see fees rise. And the institutions themselves, instead of being pace setters, could become vulnerable to takeovers.

"Everyone would suffer," Mr. Cohen said.

To be sure, executives at all of the acquiring banks say they have looked long and hard at the institutions they are purchasing. They add that current due diligence is backed by years of information gathered by internal merger units and outside researchers such as credit ratings firms.

Some market observers support the view. Jeffrey Appelgate, chief market strategist at Lehman Brothers, said banks were doing more due diligence than ever to avoid being tripped up by issues like the Year 2000.

"My sense is that people are not rushing randomly into things," Mr. Appelgate said.

But there is no denying that the latest deals, in many cases, appear to have come together very, very quickly.

"They look like they were done almost on the spur of the moment," said Donald Smith, a banking lawyer with Kirkpatrick & Lockhart, Washington.

That impression couldn't come at a worse time, banking analysts say, because operations have never required more attention. Sophisticated systems, multibillion-dollar loan portfolios and foreign exchange activities are the norm.

At the same time, banks lack a formal checklist to tick through when conducting due diligence. The process, instead of being formally regulated, "is really very vague and broad, covering, 'What is it I am buying,'" one banking executive said.

Generally, buyers want to gauge the target's financial reliability and whether its management is accurately describing operations and growth prospects.

When conducted correctly, due diligence is the linchpin for a merger's success, said Kerry Killinger, chairman of Washington Mutual, which has successfully used purchases to grow. "We want to come out of the review with a blueprint of how to make the merger work," he said.

Years ago, it was not unusual for banks to deploy a team of auditors and other evaluators to spend weeks at the target institution. They would pore over balance sheets, get to know employees, and even observe customers.

One longtime banker said his due diligence team would joke about all the time they spent in the basements of other institutions, depending on the kindness of employees for folding chairs and coffee.

Pressures to cut deals will likely become more acute in coming years- putting more strain on the due diligence process.

A growing scarcity of trophy institutions will compel banks to leap before they look, said Richard X. Bove, banking analyst with Raymond James & Associates.

"When one becomes available for sale, you really don't think as much about due diligence," Mr. Bove said. "You're more focused on wanting to be in that market."

Also, banks feel competitive pressures to broaden their product lines and are looking to brokerage houses, leasing firms, insurance carriers, and other businesses as potential partners. The affiliations could prove troublesome unless the right people are involved in the review. For instance, in purchases of brokerage businesses, Mr. Cohen said banks would do well to bring in seasoned securities managers to review operations.

"Unless you go in with a specialized team that knows where the problems are, you are unlikely to find them," Mr. Cohen said.

Some observers say that while mistakes will be made, the timing of recent deals will temper negative impacts. The economy is vibrant, banks have never been in better shape, and credit quality is high.

"What we are seeing now is combinations of some of the highest-quality institutions during the top of the credit cycle," said Carla D'Arista, a banking analyst with Friedman, Billings, Ramsey & Co.

She is more worried about the next crop of mergers: "What will happen in the second wave when we're not enjoying a peak economy?"

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