There's been so much gossip about BankAmerica Corp. and its transition to a new chief executive that it's easy to forget the company is at one of the most stable points in its history.
A sampling of the rumors and speculation over the past 12 months: that retiring chairman Richard M. Rosenberg may be secretly trying to craft a merger with NationsBank Corp.; that he may be so enamored of his job that he will be unwilling to give total control to his nice-guy successor, David A. Coulter; and that some key executives may be so mad about being passed over for promotions that a brain drain is imminent.
Yet while there may be a grain of truth in even the most exaggerated of these reports, it's also looking less and less likely that any of the talk matters.
Instead, the signs are that Mr. Coulter is executing a steady transition at the San Francisco-based bank, as top executives and outside observers are reporting a renewed sense of teamwork, and a tighter focus on shareholder returns.
"So far, the vibrations of what's going on over there are very good," said Peter Peracca, an investment banker and San Francisco-based consultant to Salomon Brothers Inc.
The rumors swirling around BankAmerica are hardly surprising since - from a personality standpoint - the change now taking place at the top could hardly be more dramatic.
The 65-year-old Mr. Rosenberg, who stepped down as chief executive at yearend and is scheduled to retire as chairman in May, is by all accounts a remarkably driven man. Impatient and intimidating, with a track record as an audacious dealmaker and an impressive marketer, he is described as warm to those he cares for and short with those who don't perform.
It had been expected that Mr. Rosenberg would be replaced by the bank's highly regarded chief financial officer, Lewis W. Coleman, who is in many ways his equal in force of personality.
But in a surprise choice announced in August, the nod went to Mr. Coulter, a 20-year BankAmerica veteran then heading the bank's wholesale and international divisions. Like Mr. Rosenberg, Mr. Coulter, 48, is said to be bright, and to have a strong track record. But he also has a nerdier, more collegial style. He is a banker schooled as a mathematician, and a networker par excellence.
"Dick is such high energy, he energizes everyone around him," said Donald A. Mullane, the bank's community development chief. "You cannot be around Dick Rosenberg and not walk fast, talk fast, think fast. Dave, he's not as tightly wound."
The party line from the top levels of the bank is that this change is just what the doctor ordered. Mr. Rosenberg, it is said, secured BankAmerica's leadership by more than doubling its assets to $230 billion through such acquisitions as the 1994 purchase of Chicago's Continental Bank Corp., and the 1992 in-market merger with Security Pacific Corp. Now, the spiel goes, a disciplined, by-the-numbers manager like Mr. Coulter is needed to make the bank work.
"Dick's given us the ability to say: 'Well, maybe you don't need to worry about size and scale," Mr. Coulter said in a recent interview. "Maybe there's some other things you can focus on."
Mr. Coulter signals that other things are ahead for BankAmerica: greater skepticism about big deals, increased stock buybacks and loan securitizations, and surgical shedding of under-performing business units. Most analysts think anything sold will be relatively small, and that blockbuster sales, like the one divesting the Texas operation that was rumored last year, are unlikely in the near term.
Strategic investments also will be continued. For example, BankAmerica says it will in no way retreat from bulking up its wholesale business in the Pacific Rim, even though the area is posting returns below the average for the bank.
Mr. Coulter said returns will materialize because the Pacific Rim will undoubtedly become "the world's best capital market over the next couple of decades."
On the retail said, where Mr. Coulter is a relative novice, a strategy is in the making. Mr. Coulter said that experimentation is still needed to figure out the ideal mix of traditional and alternative delivery channels. He added that the bank can make gains by mining its massive customer data bases. Meanwhile, one goal is the adoption of "zero defect customer management" - an attempt to eliminate the kinds of errors that cause people to change banks.
Mr. Coulter said his hope is that each of these steps, combined with strong cost controls and healthy performance of the bank's loan portfolio, will enable the institution to continue its recent history of slowly but steadily improving performance ratios.
BankAmerica's return on equity in the fourth quarter was 15%, 180 basis points above last year but still below the 17% average of banks with more than $75 billion of assets, and well below rival Wells Fargo & Co.'s unmatched 35%. But Keefe, Bruyette & Woods Inc. research director David Berry said he believes that if Mr. Coulter sticks with his game plan, BankAmerica's stock will be an attractive buy. Mr. Berry expects the bank's ratio of price to earnings per share - 9.2 of late - to move closer to the 10.1 average of its peers.
But what about the stories of intrigue and turmoil? Mr. Coulter took on each rumor separately.
Regarding a merger with NationsBank, Mr. Coulter hinted that reports of exploratory talks last year were true, but were given more attention than they deserved.
"For me today, and I'm sure it was true for Dick Rosenberg during his tenure, when people come through and want to talk about, 'well, gee, where's the future, and how might it impact us,' I think it's part of my job to talk to them, because there's always that one in 1,000 chance that something could make real sense," Mr. Coulter said.
"If there was any contact with NationsBank, that was the spirit in which there was contact," he said.
Mr. Coulter went on to dismiss speculation - raised last year by a prominent Wall Street analyst - that Mr. Rosenberg may be trying to put together a NationsBank merger without Mr. Coulter's approval or involvement. "I think that's absolutely crazy," Mr. Coulter said.
Mr. Coulter also insisted that he is firmly in charge, and that Mr. Rosenberg has retreated from day-to-day management.
One sign of is Mr. Coulter's new surroundings. He is now working in what had been Mr. Rosenberg's suite on the 40th floor of BankAmerica's headquarters building, celebrated for its stunning view of San Francisco Bay. Mr. Coulter took over the office when he became CEO and promptly moved the desk so he could better see the Golden Gate Bridge.
Eyebrows were raised in the fall when Mr. Rosenberg said he would be taking a new position overseeing marketing for both the retail and wholesale banks.
But Mr. Rosenberg left that position at yearend, Mr. Coulter said. The job has now been assumed by executive vice president Gary Matus, who also has oversight of product management and the bank's huge "data store" of customer information. Insiders add that there is little doubt that Mr. Coulter will become chairman once Mr. Rosenberg retires.
Mr. Coulter did not dispute what many have said - that top executives have at times been more concerned with bureaucratic turf wars than with improving returns at the bank.
"Can we do better as a team? Undoubtedly," Mr. Coulter said.
But he added that reports of extensive infighting have been greatly exaggerated. "I am definitely not spending every hour on this floor breaking up arguments. That's crazy," he said.