Lawsuits filed in recent days may have done irreparable harm to the relationship between this city and one of its most important corporate citizens.
Allegations that BankAmerica Corp. mismanaged "hundreds of millions of dollars' of municipal bond money, and then tried to cover it up, have led to an unusually bitter exchange of words.
At the least, the developments could prompt the city to stop doing business with the bank, pulling out its $10 million to $20 million from about 70 deposit accounts, according to city officials.
"That's something that is being evaluated," said Donald R. Tickle, the deputy city attorney who has been investigating the bond problems. "The bank has admitted that it overcharged us, and that's not something that you expect from your banker."
At the outside, though much less probable, the bank could reconsider the importance of having its headquarters in San Francisco.
The relationship between the city and the bank, though long and storied, has been tested in several ways over the past few years. This most recent battle could lead BankAmerica to question whether it really needs to remain here, current and former bank officials said.
"The bank does not need to be downtown anymore," said a BankAmerica official who requested anonymity. "It has tried to work with the city, but at the moment the efforts do not seem to be mutual. Divorce isn't imminent, but counseling might be in order."
What is clear is that BankAmerica chief executive officer David A. Coulter and other senior bank officials are furious at the way the city is handling the recent lawsuit.
In an internal voice mail to company officials last Friday, the day after the first suit was filed, Mr. Coulter said he "personally resented the city's behavior," according to a source. Mr. Coulter added that it wasn't so much the issue or the facts that the city raised, "but just that they blindsided us," the source said.
A bank official who requested anonymity confirmed that in recent days Mr. Coulter has talked about plans, drawn up originally by his predecessor, Richard M. Rosenberg, to move the headquarters out of San Francisco.
The city has said the bank's alleged actions "will shock the harshest critic of the banking industry."
The city is seeking between $12 million and $17 million in damages, and maybe more, to compensate for various problems, including the alleged overcharging for services and a failure by the bank to release millions of dollars of unclaimed interest on bonds.
The state of California took its own action late Monday, filing a similar suit seeking "hundreds of millions of dollars" in damages. Analysts are saying they accept the bank's assertions that the legal actions will not have a material effect on earnings.
BankAmerica has acknowledged that mistakes were made and said Monday that it has agreed with the state to have an independent accountant determine whether the claims can be substantiated from bank records.
"Our approach here is to be constructive and get this solved and put it behind us," said John Keane, a BankAmerica spokesman. "It's regrettable that some of the rhetoric we have observed seems inappropriate."
On relocating headquarters, Mr. Keane said, "That is not at all the direction we are taking."
Most observers said the company's historical ties to the city-it's founder A.P. Giannini, for example, was the first banker to make loans in the wake of the 1906 earthquake-and San Francisco's "quality of life" advantages make a move unlikely.
If the company does consider a new site, one candidate may be Concord, about 30 miles east. The bank has a massive data processing center there, along with various relocated business units and about 3,600 employees. About 9,300 BankAmerica employees work in San Francisco.