Terrence Murray casually listed the immediate challenges for FleetBoston Financial Corp., where he has spent 40 years building an empire.
"We have a tough stock market, we have a capital market that has gone to hell in a handbasket in the last 12 months, we have a private equity/venture capital market that is collapsing, and we have a slow business cycle right now," he said.
"None of these is insurmountable. This is the fourth time in my career I've been through it. It just takes time and hard work."
At 62, Mr. Murray, is at a watershed. After a 20-year reign spent assembling FleetBoston, he is scheduled to give up his chief executive title next month and become executive chairman.
The secret of his success, he said, is not to be distracted - by operating problems, collapsed deals, defecting employees, and other potentially daunting issues. Knowing how to control costs and when to jettison certain businesses and build on others has also been important, Mr. Murray said.
Under his leadership FleetBoston has grown from a $2.7 billion- asset Rhode Island company to a $202 billion-asset financial services conglomerate in less than 20 years. It is the eighth-largest bank holding company in the nation, with the largest network of branches - 1,550 - in the Northeast, banking operations in Latin America, and a long list of subsidiaries, including such well-known names as Robertson Stephens and Quick & Reilly. Mr. Murray will be succeeded by Chad Gifford, Fleet's president and COO.
Mark Fitzgibbon, an analyst at Sandler O'Neill & Partners in New York, describes Mr. Murray as a trailblazer.
"He was someone who didn't follow the crowd," Mr. Fitzgibbon said. "He was usually leading the crowd - doing things years ahead of the competition, like expanding the bank's product line into fee income."
Mr. Murray, however, denies that he was a pioneer.
"There was a generation of bankers - we're all about the same age - who have lived through the '70s, '80s, and '90s and built big companies," he said. (He named among others NationsBank's Hugh L. McColl Jr., First Union's Edward Crutchfield, Bank One's John McCoy, and the old Wells Fargo & Co.'s Paul Hazen.) "We went through a revolutionary period in the history of banking in this country, and most of us survived it.
"It was a very dangerous time - not only the economic ups and downs, but kind of walking through the minefield of an acquisition program."
During New England's profound recession in the early 1990s, it was anyone's guess which banks would remain standing. "We and our peers were worried sick about our safety and soundness and even surviving," Mr. Murray said.
Bank of New England was one that failed, and many of the region's top banking companies - BankBoston Corp., Shawmut National Corp., and even Fleet - were struggling. "It was the only time in my life when I didn't sleep well," Mr. Murray recalled.
Despite the tough times, Fleet went on the offensive, bidding to buy the failed Bank of New England from the Federal Deposit Insurance Corp.
Mr. Murray said he thought the purchase would protect Fleet from the recession in addition to advancing its expansion agenda.
"I thought the cure might be to buy a 'clean bank,' " he said. "It would, on a melded basis, make us much stronger."
Fleet was the underdog, he said, competing with larger banks. But that was not the main reason the early-1991 victory was so sweet.
"It gave us a leg up against our competition, which is what opened the door to these subsequent transactions," Mr. Murray said. "It gave Fleet the momentum to roll up the rest of the region, and gave us the currency to be able to do that."
The FDIC kept the failed bank's bad loans. With a stronger multiple, a bigger balance sheet, and a larger market cap, Fleet was preparing to dominate the region.
Analyst Nancy A. Bush of Ryan, Beck & Co. in Livingston, N.J., said that though the acquisition and a series of others that ended in 1999 with the purchase of BankBoston posed integration problems, they were relatively minor ones. "If you can fault Terry Murray for anything, I think it's that his reach exceeded his grasp," Ms. Bush said. In other words, he was juggling too much at once. "But it all turned out OK in the end."
Fleet's emergence from the New England recession as a stronger player is a highlight of Mr. Murray's career. But his proudest accomplishment is Fleet's size and strength.
"We are a $200-plus billion institution. We're a dominant institution in the Northeast. We have an enormously strong balance sheet and operating performance."
Mr. Murray gives John J. Cummings Jr., whom he succeeded, much of the credit for propelling the company onto the national stage.
"Strangely enough, John Cummings, who has been dead now for 20 years, helped draw a road map for me," Mr. Murray said. "Very little that has happened in 20 years we didn't predict - or he didn't predict."
Interestingly enough, Mr. Murray said he "stumbled into banking."
In 1962 he had a wife, a baby, a new Harvard English degree, and perfect strikeout record of interviews for stockbroker jobs - at 26 firms. His father-in-law goaded him to "try one of the local banks," so he walked into one, which hired him as a management trainee at $85 a week.
The bank was Industrial National of Providence, R.I., the forerunner to Fleet.
"It was brutally uninteresting, at least for the first couple of years," Mr. Murray said. "It was a lot of tedious jobs." But senior management took notice of him, and within a few years he was moved to the real estate department - which he was running by around 1965.
"I think they thought I had some moxie and was willing to work and go beyond the textbooks."
Along the way, Mr. Murray said, he was fortunate to have mentors, particularly Mr. Cummings.
"John was a real tough taskmaster" who also worked his way up through the bank, learning the accounting, financial, and control sides, he said. "But he was a brilliant man . and he was clearly clairvoyant as to where the banking industry was going to go, in terms of interstate banking, diversification, and the overlapping with insurance and investment banking."
Under Mr. Cummings, Industrial National was one of the first banks to form a holding company, in 1969, after changes in the law permitted the move. Running a small bank in the smallest state and unable to expand beyond it because of interstate banking laws, management was looking to expand the only way it could - through nonbank finance- related companies.
Mr. Murray, still in his early 30s, became an officer of the holding company. "John put me in the holding company, where I spent a lot of time looking at deals: mortgage banking companies, consumer finance companies, processing businesses, factoring companies."
By the early '70s, when many banks were focused on simply building a branch network, Industrial National was becoming diversified.
Gerard S. Cassidy, an analyst at Royal Bank of Canada's RBC Capital Markets, said Mr. Murray was always an innovative thinker, taking his company beyond traditional banking horizons.
"He did this with the full knowledge that deregulation of the banking industry was under way, and he saw the opportunity to exploit those changes."
Earnings doubled in the five years after the holding company was formed, setting the stage for further growth, Mr. Murray said. He was elected president in 1978 and succeeded Mr. Cummings as chairman and CEO in 1982.
He then began to expand the franchise, though interstate banking was still in its infancy. He worked hard, he said, getting state legislatures in the region to change their laws and forming the "New England compact" so banks could acquire other banks in the region.
"So we immediately started buying banks," he said. "If you unbundled Fleet today, we're like 180 banks going back 20 years - 180 separate banks."
Mr. Murray credits Fleet's survival to its aggressive posture.
"We were always on the offense," he said. "And we were able to control our own destiny, which is ultimately what you hope to do and simultaneously build shareholder value. Many, many companies fell by the wayside."
Andrew B. Collins, an analyst at U.S. Bancorp in New York, echoes what many industry observers say about Mr. Murray: that he is one of the most savvy dealmakers in banking. However, because Fleet has always moved fast to grab market share, it did not have a much time to address customer service issues, Mr. Collins said.
"Maybe customer service was not always high priority" for Mr. Murray, "but he's coming around to it," Mr. Collins said. Fleet said in May that it would put acquisitions on hold to focus on such issues as customer attrition and satisfaction.
Mr. Murray plans to fully retire from FleetBoston at the end of 2002. He said he will continue to serve on several corporate boards and take offices in Boston, where he will be working with several "prominent businesses in the world of investing."
Though he is largely responsible for creating a financial services powerhouse, Mr. Murray said that, given a crystal ball decades ago, he might not have chosen a New England career.
"The growth patterns in this region are slower than the rest of the country, and you're always to some degree working against the tide," he said. "I might have started my career in New York. . It might have been more robust to do it in the Southeast or Southwest.
"But I don't have any regrets," he adds. "I mean, I grew up here and love living here. It's just a tougher sell."
