SAN FRANCISCO - Robert H. Smith, who as chief executive of Security Pacific Corp. helped engineer the biggest merger in U.S. banking history, is ready to advise other banks on mergers.
The 57-year-old executive confirmed that he is going into the investment banking business with veteran bank securities analyst Donald K. Crowley.
Mr. Smith, who left BankAmerica Corp. last year following its acquisition of Security Pacific, said the partnership will specialize in advising financial institutions on mergers and acquisitions.
The venture also hopes to help capital-depleted companies find deep-pocketed investors, he said in a telephone interview Wednesday. In addition, he expects to launch an investment fund targeting western banks in about six months. he said.
Mr. Smith and Mr. Crowley. 54. are viewed as a formidable team. "They have a wealth of experience and multiple Rolodexes full of contacts." said James C. Hale, who heads the financial institution merger practice of San Francisco-based Montgomery Securities.
Mr. Crowley followed West Coast banks for Keefe. Bruyette & Woods Inc. for 17 years. He left last year when the brokerage house closed its San Francisco office.
Smith & Crowley Inc., which will be officially launched next month, is hunting for clients among western banks and thrifts with assets of less than $4 billion.
Mr. Smith has plenty of competition from established investment banks. But he maintains that few advisers can match his experience as a bank executive and dealmaker or his contacts in the investor community.
"There are 400-plus small banks in California that are underserved in the level of expertise they can get," Mr. Smith said.
The former executive, who spent 31 years at Security Pacific, said he knows the western banking market intimately from his days scouting potential takeover candidates for his old institution. He says he has already lined up several clients for his new firm.
An Abrupt Resignation
Mr. Smith's emergence as an investment banker comes almost a year after he resigned abruptly as president and chief operating officer of BankAmerica - just two months after the California megamerger was consummated.
At the time, Mr. Smith said he was unhappy with his lack of responsibilities at the merged bank, whose chairman and chief executive remained Richard Rosenberg.
A golden parachute negotiated as part of the merger agreement gave him a severance package worth an estimated $2 million to $3 million.
Before his latest project, Mr. Smith looked for investment opportunities, working out of the Pasadena office of the Secura Group, a consulting firm directed by his friend William M. Isaac, a former chairman of the Federal Deposit Insurance Corp.
One project Mr. Smith pursued was raising some $700 million to buy and merge Glenfed Inc. and CalFed Inc., two ailing California thrifts. The plan never got off the ground.
Mr. Smith's career at Security Pacific included a number of positions in financial, retail, and wholesale management. It culminated with his appointment in January 1990 as chief executive, a position he held for a little more than two years.
His tenure as head of the $73-billion asset company was controversial, coinciding with big losses due to, the problems, poorly managed expansion plans, and a slumping economy.
But there is little dispute about his crowning achievement: the negotiation and execution of the company's sale to its San Francisco rival - a move that rescued Security Pacific shareholders.
Mr. Smith remains intensely proud of the merger. "God gave me, and gave our board, the wisdom to make a very difficult decision," he said.