Wells Fargo Will Take Over 116-Year-Old Bank This Week : Crocker Nearly Gone but Not Forgotten

Times Staff Writer

Crocker National Bank had but three weeks to live, and its employees were not about to let it die without a proper send-off.

So they organized a wake at a downtown San Francisco hotel two weeks ago, complete with miniature Lucite tombstones as party favors and the consecration of a Crocker “time capsule” to carry the bank’s memory into the vault of history.

The several hundred employees attending filled the capsule, a borrowed coffin, with precious bits of Crocker history--long-forgotten policy manuals, pens and paperweights, dusty photographs and old promotional gimmicks such as stuffed toy “Crocker spaniels.”


They drank and they danced, they reminisced and they cried, and at the end of the evening they bade good night to a 116-year-old institution that was born with the transcontinental railway and died in the age of electronic banking and mega-mergers.

Crocker will cease to exist Friday when its acquisition by Wells Fargo & Co. is completed. It will be missed.

“It will be a disappointment to many people to see the Crocker name disappear,” Crocker Chairman Frank V. Cahouet said in an interview last week. “But it really won’t be forgotten by the old guard in the state, because it has contributed to the success of a lot of companies.

“I’m sorry to see it happen. But that’s progress, the change that goes on all the time.”

The $1.07-billion merger, the largest in U.S. commercial bank history, joins two banks rich in California history but with very different identities and cultures.

From its founding in 1870 by railroad baron Charles Crocker, Crocker Bank was a conservative institution associated with the elite of California businesses and individuals. It expanded statewide by acquiring 70 smaller banks but for most of its life remained, in essence, a provincial bank.

Crocker changed dramatically in the early 1970s under Chairman Thomas Wilcox, who wanted to make it a major player in global markets. It lent aggressively across the United States and in the Third World to meet Wilcox’s goal of a 15% annual growth of assets.


Many observers today say the ultimate failure of that strategy led first to Crocker’s 1980 acquisition by London’s Midland Bank and then to its recent sale to Wells Fargo.

Wells Fargo Bank is a direct descendant of the Wells Fargo stagecoach and freight-forwarding firm created in 1852 to serve the prospectors and suppliers of the California gold rush.

Under its iron-willed current chairman, Carl E. Reichardt, Wells Fargo has become a highly profitable bank with a tight focus on its core business in California and a passion for efficiency. It is more feared and respected than loved.

Preparing for the melding of the two companies has been the chief challenge that has faced both Crocker and Wells Fargo since the merger was announced Feb. 7. Reichardt has said the merger will be successful only if expensive duplication can be eliminated.

That means closing dozens of branches where service areas overlap and laying off thousands of workers--virtually all Crocker workers--whose jobs will be redundant in the combined company.

Wells Fargo has tightly guarded the locations of the branches to be shuttered--though most of them are expected to be in Northern California--and the number of jobs to be eliminated. Earlier this month, it acknowledged that it would fire two-thirds of Crocker’s top 70 executives shortly after the merger is completed.

The bank will reveal the size and shape of the new combined institution on Friday, although it will be months before all of the branches are closed, the workers laid off and the signs changed.

The bank hopes to complete the changeover of customer accounts by the end of the year, including distribution of new checks, credit cards and loan documents. In the interim, Wells Fargo will ask most of its Crocker customers to continue dealing with their old branches.

One knowledgeable California bank analyst said he expects about 100 of the combined bank’s 630 branches to be closed. And, in private, Wells Fargo officials do not dispute estimates that as many as 5,000 of the new bank’s 26,000 employees will ultimately be fired.

It is clear, too, that the majority of the staff-support jobs at Crocker will disappear. Workers are bracing for the wholesale elimination of departments that provide such support functions as accounting, auditing, legal and governmental relations, personnel, planning and communications.

Branch workers and loan officers, especially in Southern California, are expected to fare better. The chief rationale for the Crocker deal was to expand Wells Fargo’s relatively weak presence in the rich Southland banking market.

Suppliers Will Suffer

Scores of outside contractors and suppliers will also lose lucrative Crocker business. The prominent San Francisco law firm of Morrison & Foerster, for example, did nearly $4 million in legal business for Crocker last year. Although it will continue to handle some current cases after the merger, Crocker officials said, the bulk of the business will evaporate quickly.

Many of the staff units to be eliminated are in Crocker’s handsome San Francisco corporate headquarters. One worker said the effect of the merger on these departments will be “like a neutron bomb. Only the building will be left.”

Disposing of Crocker’s leased quarters in the 37-story tower after the merger will pose problems for Wells Fargo’s real estate staff. Crocker sold the building to raise cash and now pays $400,000 a floor on long-term leases for about one-third of the building. Wells’ more-modest 12-story building in downtown San Francisco will be the combined bank’s headquarters.

Harold Reichwald, executive vice president and Crocker’s chief legal counsel, will lose his job in the deal, as will 12 of the 20 lawyers in his unit. He said the past several months have been a difficult time for everyone at Crocker.

“A lot of lives have been disrupted by this process,” Reichwald said. “But you have to be prepared in this world to adapt to change. People in Crocker have to come to grips with that. Change also presents opportunities. I hope people, as they look back, will recognize that.”

In conversations with Crocker employees from the smallest branch office to the executive suite, the themes that Reichwald struck are sounded with regularity.

To some extent, that is by design. Since the merger announcement in February, the bank has taken pains to help employees work through their reactions, much as grief-stricken relatives are counseled following a death in the family.

The aim was to transform the employees’ initial shock and anger into acceptance of the inevitable. In internal publications and transition counseling sessions, the necessity of adapting to change was stressed repeatedly.

Overseeing this effort is San Francisco psychologist Stephen G. White, a specialist in workplace trauma who was retained by Crocker three years ago to counsel bank employees who had been branch holdup victims. He said that while the stress of having one’s life threatened by a gunman is more acute than that suffered by having one’s job eliminated in a merger, there are similarities.

People Feel Victimized

“This is not the same. But metaphorically, many express the feeling, ‘We wuz robbed,’ ” White said. “People feel victimized. I don’t want to be overdramatic or hysterical, but there are analogies.”

He said he has identified several characteristics of what he calls “merger stress syndrome,” among them a feeling of betrayal, a sense of loss, insecurity about the future and resistance to the “invaders.”

Resistance can take several forms. Although no outright cases of sabotage have been reported, a fair amount of company time has been burned up in the last several weeks by going-away parties. One staffer said she disconnected the odometer on a company car and took a 200-mile pleasure trip. Another worker, perhaps suffering a mild case of paranoia, told a reporter he was convinced that his phone was bugged by Wells Fargo because he was a known opponent of the merger.

For the most part, however, Crocker people today accept the deal and are facing the future with equanimity, if not enthusiasm.

“I really don’t see us ceasing to exist. The name won’t be there, but we’ll still be there,” said Kathy Dunham, a Los Angeles-area sales manager for Crocker. “I think a lot of us are proud of what we have done. We feel Wells is very fortunate to get us.”

Carolyn Castle, a mid-level San Francisco manager, said: “It’s the passing and the loss of a friend. But life goes on. Everything that happens happens for a reason.”

Anxiety appears to increase with the job level. One senior Crocker executive in San Diego said top-level people are feeling “tremendous nervousness,” more so than line staff, because “they have much more invested, and they have much more to lose.”

Echoing a concern expressed by many Crocker employees about making the transition to a company known for its crisp, no-nonsense management style, the San Diego executive said: “I wonder whether I have the spunk to go back to a good, sound, let’s-make-a-decision-and-get-this-done” way of doing business instead of the heavily bureaucratic Crocker system.

Some Hostility Exists

There is hostility, though, even among those that have been offered jobs at Wells Fargo. One longtime employee in Crocker’s capital markets department said the merger has had a profound effect on how he views his career and loyalty to an employer. As a new Wells Fargo employee, he’ll be looking out only for himself.

“I just feel my 18-19 years (at Crocker) are down the drain. I feel very bitter. I even feel corroded. To survive in corporate America, I’m going to have to be a bastard, too.”

Crocker’s customers appear to be staying with the bank, despite efforts by the bank’s big California competitors to lure them away. In fact, Crocker’s business and consumer loan growth has been healthy so far this year and led to a record profit of $19 million in April.

A few customers, however, were apprehensive. Sheila Hopkins of Santa Ana said she and her husband may move their business account to the savings and loan where they do their personal banking if there are any post-merger foul-ups.

Janice Sunday of Garden Grove said she has had a number of service disputes with Crocker during her several years of banking there and said she hoped the Crocker problems would not rub off on Wells Fargo.

Throughout the bank, Crocker’s 11,700 employees are trying to lighten their sense of loss with a sense of humor.

A satirical videotape is making the rounds of Crocker headquarters in San Francisco, featuring quick clips of speeches by former Crocker executives, sales pep talks and old television commercials. It closes with a crew of Crocker workers performing a maudlin rendition of “Happy Trails” and a close-up of the tombstone party favor.

It reads, simply, “Crocker Bank, 1870-1986. R.I.P.”

Times staff writers James Granelli in Orange County and Bill Ritter in San Diego contributed to this story.