After the close of business Oct. 22, Wells Fargo & Co. will move another small step closer to finally absorbing Wachovia.

Branch transition teams in Georgia will activate an awaiting computer system and transfer all cash on hand at the state's 280 Wachovia branches into Wells accounts. Then the staff will check out a little before 8 p.m., with the stores ready to open on Saturday morning.

Having so little to do, however, took a lot of work.

Two years after reaching a deal for Wachovia's crisis-time acquisition, and long after JPMorgan Chase & Co.'s conversion of Washington Mutual's branch network was completed, Wells is only now beginning to integrate Wachovia's core markets.

The process, measured from the beginning, has been intentionally slowed down in some cases — a pace dictated by the fear of doing a sloppy job on high-profile retail operations and informed by Wells' successful merger with Norwest Corp. in the late 1990s.

Given the importance of the conversion, it might have seemed appropriate to bring in a veteran of serial mergers to handle the process. Instead, Wells picked an employee who had spent a full career as a banker on the front lines.

Jim Snow, who now leads the team converting Wachovia branches nationwide, had spent 35 years in Wells' retail and commercial banking operations before being promoted to a Colorado strategic planning role in 2007.

As an expansion territory for both Wells and Wachovia, Colorado was chosen as the guinea pig among the 14 regional conversions Wells had planned. While some of the territories have as many as 300 branches each, Colorado was smaller — barely 20 branches. But finishing the conversion still required a bit of juggling and a very late final Friday night. When it was over, Wells put Snow in charge of the next 13 stages. The final one, North Carolina, is due to be completed in October 2011.

"The good news is that I didn't screw up the first one too bad," Snow said. "A lot of the lessons we learned are in how compressed all of the activity was," he said. "The things we now do three or four months out, we were doing in Colorado 30 days before."

Eight regions still have to be converted, and the preparations in Georgia provide a window into Wells' method.

Starting a half-year in advance, Wells' transition team began working on securing municipal permits for new signage and remodeling Wachovia's stores to account for the greater number of sales staff in a Wells' branch. At 12 weeks out, the San Francisco-based company sent five-part training kits to each branch, each one accompanied by an online checklist that allowed headquarters to monitor every component of a region's progress in real time. Accompanying the online training were "buddy bankers," legacy Wells employees from other regions who volunteer to work in branches elsewhere in the country.

A delegation from Wells' 180 full-time trainers arrived shortly thereafter, and parallel computer systems were installed in the branches with two months to go. A few weeks before the switch, Wells conducted a mail drop reassuring customers that they would be enrolled in services identical to those offered by Wachovia. With a week to go, the last training of the tellers using the "training bank" — a mock-up of Wells' computer system complete with fake money and customer accounts — wraps up.

"When the first customer comes in on Saturday morning, [the branch staff] isn't practicing," Snow said. Because Wachovia customers have had their entire account mapped into Wells' system — all product details are the same, regardless of whether it's a service offered by legacy Wells — "it feels like more of a brand change than an account change."

To some degree, pinch-hitters like Snow — and at the top of the integration, Executive Vice President Pat Callahan — helped take the strain off the day-to-day operations of Wells' retail banking group, headed by Executive Vice President Carrie Tolstedt. But given Wachovia's size — slightly larger than Wells — and the scope of its business lines, almost every component of the company has waded into the integration.

Nowhere has the impact been larger than in technology, where the bulk of the Wells' spending on the integration — estimated at $5.7 billion — is going. In a recent interview, Chief Executive John Stumpf said the costs were essential to maintaining Wells' customer service standards.

"There are big differences between us and competitors of ours who are on three different operating systems," he said. "They have a difficult time cross-selling."

Wells, of course, says it doesn't. Despite the merger, legacy Wells' number of products sold per household has risen steadily, now standing at six. And rates at the old Wachovia operation have risen, too.

Beginning in early 2009, Wells' ATM division set about replacing every Wachovia machine in the country, nearly 7,000 in all. Alicia Moore, who heads the division, said she expects to finish the project at the end of October — at which point her staff will return to updating legacy Wells machines in the upper Midwest that were scheduled to be replaced two years ago.

"Minnesota is complaining," Moore joked.

Beyond standardization, she said, the goal was to show some tangible service improvements to Wachovia customers before the actual branch integration arrived. The best Wells can tell, it worked: its own research found that the percentage of Wachovia customers who considered the bank to be "on the cutting edge of technology" jumped to 65% from 52%, and loyalty rates were higher among users of the new automated teller machines' more advanced features.

Similar calculated delays have occurred elsewhere, such as with online services.

At the time of Wells' last transformative merger, with Minneapolis-based Norwest, the Internet wasn't nearly so delicate an issue. "Norwest didn't have an online banking site," said Jim Smith, head of Wells' Internet operations for two decades. "They had three people and a PowerPoint presentation."

This time was different. Unlike in the early years of the Web, Wells' online customers are not early adopters who readily forgive quirky sites.

There was no way that Smith and his staff could handle online integration without cutting back somewhere. The compromise, he said, was slowing down certain new tools' systemwide launch but keeping the company's Internet product development division working at full speed in a lab environment.

For the most part, Wells has worked on migrating Wachovia's online banking functions to Wells' system, though Wachovia's online asset management functions were sufficiently advanced that Wells chose to do the reverse.

"We can still do some nimble development for our customers, so when we get through the heavy lifting of integration, we're not years behind," Smith said. "We've been able to continue thinking and designing."

It should be considered a victory for Wells that, whatever difficulties its Internet team might have run into along the way, they haven't been the sort of troubles that draw public attention, said Lawrence Baxter, a law professor at Duke University who headed Wachovia's e-commerce division until 2006. He recalled the scrambling of account data and other problems associated with First Union Bank Corp.'s hurried integration of CoreStates Financial Corp. in the late '90s.

"Think how many times this has been a disaster," Baxter said, "Think [Wachovia predecessor First Union] when they bought CoreStates. Wells has not had any of those pratfalls on this point."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.