Wells Fargo & Co. made a technology decision and a high-level executive appointment that point to a continued role for First Interstate Bancorp's infrastructure after the companies merge.
Wells said that while it will rely on its own computer system for the combined bank in California, it will retain some of First Interstate's operations outside the state. Wells plans to consolidate its two southern California computer centers into First Interstate's in Tempe, Ariz., which will force 130 Wells employees to relocate or find other jobs within the bank.
In a concurrent tilt toward First Interstate's Los Angeles headquarters, Wells promoted its commercial banking officer, Paul M. Watson, from executive vice president to vice chairman, and said he will be based in Los Angeles.
Under political pressure during the merger talks, San Francisco-based Wells committed to running some of its major business lines out of the Southern California metropolis. The appointment of Mr. Watson, 56, "fulfills our commitment to having a senior presence in Los Angeles," said Wells chairman Paul Hazen.
At the same time, Wells promoted executive vice president Terri Dial, 46, to vice chairman. Ms. Dial, who becomes one of the highest-ranking female executives in the top tier of U.S. banking, spearheads one of the industry's leading small-business programs and a major profit center for Wells Fargo.
Mr. Watson is to assume his Los Angeles post after April 1, when the deal is scheduled to close. A 38-year Wells employee, he will oversee all corporate and commercial banking and cash management services.
Wells Fargo spokeswoman Lorna Doubet confirmed reports that Wells has decided to make at least a temporary retreat from First Interstate's ballyhooed effort of the last six years to consolidate onto a single set of core computer systems for its 13-state territory.
Ms. Doubet said Wells plans initially to convert to two sets of systems, Wells' in California and at least some of First Interstate's elsewhere.
First Interstate had consolidated core systems to cut costs and prepare for interstate branching. It became one of the first multistate banks with a single account structure, that is designed to allow commercial customers to make deposits in any state where First Interstate had a presence.
A First Interstate official said privately that Wells would probably have to design a complicated software "bridge" to retain this capability across separate systems.
Ms. Doubet also said Wells plans to move its computer centers near Los Angeles and San Diego into First Interstate's main data center in Arizona, starting this summer. The move will not affect Wells' two Northern California data centers.
The fates of most of the top-level managers at First Interstate were disclosed in an internal First Interstate newsletter Tuesday.
Previously reported departures and hirings were confirmed but some new appointments were disclosed. For one, First Interstate executive vice president John Lewis, who is based in Phoenix and runs retail banking in the Southwest, will stay on in that capacity.
Also staying will be Texas commercial banking head Robert Chereck, northwest commercial banking head Linda Tubbs, Nevada gaming industry specialist Jay Kornmayer, Houston-based payment system and check processing manager Hayden Watson, and Scottsdale, Ariz.-based financial planning head Steve Scheid.
Nearly every other senior executive will leave. On top of those already reported, other departures will include human resources head Lillian Gorman, cash management group head Jan Cloyde, investment management group head Tom Slonaker, California private banking and trust manager Russell Snow, and California retail head Jaynie Studenmund.
Wells has decided on the seven First Interstate directors that it will add to its 13-member board after the merger. One surprise is the inclusion of former First Interstate chairman Edward M. Carson.
Mr. Carson, who presided over First Interstate's vaunted recovery, was said by knowledgeable sources to have been one of the biggest critics of Wells' hostile takeover bid. A First Interstate spokeswoman said Mr. Carson would not comment on why he agreed to the directorship.
According to a proxy filed last week, Wells chairman Paul Hazen is being handsomely rewarded for his work last year. His salary increased 10% to $812,500, his bonus 60% to $2 million, and his stock option grants 11% to 44,400 shares.
