Rosenberg Spurred Talks
The nation's biggest banking merger was set in motion in early February when BankAmerica Corp. chairman Richard M. Rosenberg telephoned his counterpart, Robert H. Smith, at Security Pacific Corp. to propose that their two companies unite.
Mr. Rosenberg, according to California banking sources, wanted to move quickly after talks collapsed in December between Security Pacific and Wells Fargo & Co.
Retaining No. 1 Rank
"I think the BankAmerica management was probably alarmed by the prospect of not being No. 1 in California," said a high-ranking executive of a rival California bank.
Mr. Rosenberg said the talks accelerated about six weeks ago when he met with Mr. Smith in Los Angeles. After that meeting, top executives of each bank moved in quickly.
Frank Newman, BankAmerica's vice chairman and chief financial officer, said that the most senior people from every loan and credit policy area at BankAmerica were shuttled to Security's Los Angeles headquarters to review the bank's major loans.
Mutual Loan Reviews
Security Pacific officials reviewed BankAmerica's major loans. "There is a little bit of oneupsmanship that goes on when we do this," said Jerry Grunhofer, president of Security Pacific's lead bank. "There is nothing that they asked for that we didn't ask for."
Unlike NCNB Corp., which bragged a few weeks ago that more than 200 people participated in its due diligence at C&S/Sovran Corp., BankAmerica relied on a small cadre of experts.
"We didn't think it made sense to have hordes of junior loan officers combing through files," Mr. Newman said. "It was much better to have people who had good, experienced noses."
California banking sources said there was considerable fear that Security Pacific employees would put up enormous resistance to a deal if it were telegraphed ahead of time. In fact, they said, such resistance is believed to have played a part in the collapse of the Wells-Security Pacific talks.
Neither company is estimating how many people will lose their jobs. Mr. Newman said officials are very sensitive to the human costs. These will involve the firing of a good number of senior managers. The two companies are projecting annual expense savings of $1 billion a year within three years.
After the deal was signed Sunday, relief was visible, executives said.
Sam Zuckerman in San Francisco and Teresa Carson in Los Angeles contributed to this article.