by Mike Sharkey
Staff Writer
On the way home from the Jacksonville Jaguars game Sunday night, fans heading west will notice a new sign adorning the downtown skyline. After years of seeing ‘First Union’ light the night sky, the name ‘Wachovia’ will now be visible on the Water Street office tower.
By Nov. 18, the change over will be complete as First Union’s two million-plus customers will be converted to Wachovia customers. Although it will still take a few months to issue customers Wachovia ATM and debit cards and checks, the logistical challenges for bank officials will be met — in Florida, anyway.
“We are converting Georgia next, in the winter of 2003, and working north,” said Mary Beth Navarro, corporate spokesperson for Wachovia. “In the spring of 2003, we’ll convert North and South Carolina and in the summer, Virginia, Maryland and the Washington, D.C. area. Florida is our first regional conversion and rather than flip the switch for the whole East Coast, we are doing it state-by-state.”
Eventually, the Wachovia name will stretch all the way to Connecticut, making the bank one of the East Coast’s largest.
Florida CEO Bob Helms said Florida was chosen as the bank’s first region to become fully converted mainly because the state represented both tremendous growth potential, but with no Wachovia presence, and a region that would be easier to convert.
“One of the main reasons was there was less overlap with Wachovia here,” said Helms. “It’s a great way to execute the integration and make certain we are not impacting a large number of people who might be affected by any systems failures. I think we are incredibly well-prepared.”
There’s a laundry list of items that must be addressed during a bank merger — and this was a true merger, according to Navarro.
“This was a merger of equals. From an accounting standpoint, First Union bought Wachovia. But this was a merger of two equal banks,” said Navarro, adding First Union and Wachovia customers are the top priority.
“There are a lot of challenges associated with integrating two banks,” she said. “Communicating with our customers throughout the process was at the top of the list. It was very important that they learn about things from us. We wanted nothing to come as a surprise. By the time we are fully integrated, which will be the first quarter of 2004, we will have sent out 100 million pieces of direct mail. Seven million of those have been sent to the two million customers in Florida.”
Other challenges facing bank officials during the merger process include standard items such as converting customer accounts from one bank to the other and simple things like proper letterhead. One of the more interesting decisions centered around what to call the bank. With all things being equal, bank executives realized the distinctiveness of the Wachovia name may ultimately prove beneficial.
“It’s a unique name and with a lot of banks having the name ‘First’ or ‘Union’ in their name, we saw a great marketing opportunity in the name Wachovia,” said Navarro.
Although First Union is succumbing to Wachovia in name, Charlotte-based Wachovia thought enough of First Union’s account information system that every current Wachovia customer will be converted to First Union’s system. That process has involved training many Wachovia employees about the First Union system and installing new equipment at hundreds of bank branches throughout Florida and the East Coast. And, within the next 90 days, Wachovia will issue every Florida customer a Wachovia debit or ATM card.
The whole process certainly begs one big question: How much?
“There is a one-time expense for all the states of $1.5 billion,” said Navarro, adding the bank expects to recoup those expenses within a couple of years and, ultimately, the merger will save the bank money. “By the time we are done with the merger, our first quarter run rate in 2004 will show a savings of $890 million a year.”
Locally, the merger is certainly good news. Navarro said not a single branch employee will lose their job and the corporate decision to keep Helms and regional president Winston Wilkerson in Jacksonville was made based on their track records.
“It was driven by the fact that the first merger for First Union was with Atlantic Bank and Wachovia liked the system. Plus, it’s an attractive place to live,” said Helms, adding Jacksonville’s economy was a real plus. “The growth potential in Florida and Jacksonville played a big role in Wachovia’s decision to establish a presence in Florida.”
Helms said only one thing could enhance the merger: a win by the Jaguars over the Washington Redskins Sunday in a game Wachovia is sponsoring, and one in which Helms and Wilkerson will serve as honorary captains.