A wave of layoffs and resignations is gutting the top-level management of First Interstate Bancorp's investment businesses - including its highly regarded private bank - as the company prepares to merge with Wells Fargo & Co.
At least five senior executives announced plans in the past week to leave the Los Angeles company by April 1, when the merger is scheduled to close, according to sources with detailed knowledge of the changes.
The departures are in First Interstate's investment management, brokerage, and private banking units, according to the sources, who include First Interstate officers, consultants, and service vendors. Neither Wells Fargo nor First Interstate would comment. The merger plan calls for Wells to eliminate 8,000 jobs.
Among those leaving: Thomas N. Slonaker, chief investment officer and head of investment management, and Russell K. Snow Jr., executive vice president in charge of private banking.
About half the company's private bankers have been offered jobs at Wells, but "the management level is wiped out," said Daniel J. Wroblewski, a senior vice president for trust and private-client services, who said he expects his job to be cut as well. Employment totals about 1,000 in the private banking and trust units.
The high-level departures came as little surprise given Wells' solid foothold in those businesses. But some industry experts were surprised that Wells chose not to retain the management of First Interstate's private bank.
For two years First Interstate's private-client and trust unit had aggressively built its sales force in an effort to tap the assets of California's affluent. The unit has won plaudits in private banking circles for taking innovative approaches to drumming up business.
Les Dinkin, a managing principal at NBW Consulting, Westport, Conn., said Wells may have decided that First Interstate's private banking strategy doesn't mesh well with its own retail focus.
"Wells' approach to the retail business is focused around mass distribution" through teller machines and supermarket branches, Mr. Dinkin said. "Given that direction, the traditional private banking business, which is built on face-to-face relationships, would not fit in with the strategy at Wells."
The departing executives opted for an employee severance package rather than accept lower-ranking posts at Wells, sources said.
Other executives departing First Interstate include its treasurer, Theodore F. Craver Jr., who oversaw the bank's brokerage, First Interstate Investments, and Arthur Rutzen, who ran the day-to-day operations of the brokerage unit. Mr. Craver resigned last week; Mr. Rutzen was not offered a postmerger job.
Amru Khan, who heads institutional trust for First Interstate, said he would run the master trust and custody business for Wells. He will report to Michael Niedermeyer, executive vice president of Wells Fargo Investment Management Group.
Mr. Khan said that after the merger Wells would manage more than $40 billion of assets in institutional trusts and $16 billion in personal trust assets.