Wells Fargo to Fire 1,650, Close 120 Crocker Offices
Wells Fargo & Co. formally completed its purchase of Crocker National Corp. on Friday and announced that about 1,650 employees will be fired immediately and that 120 branch banks will be closed within the next year.
The $1.07-billion merger, the largest in U.S. banking history, will result in the discharge of about 1,600 Crocker employees and 43 Wells Fargo workers, Wells Fargo officials announced Frid1635331616virtually all of them former Crocker workers, will lose their jobs by the end of 1987.
The occasion of the disappearance of 116-year-old Crocker National Bank was marked in different ways by the two institutions.
Wells Fargo went about its business in its customary no-nonsense manner, except for a press conference held by its top executives to explain their plans for implementation of the merger, including the changeover of customer accounts, within the next year.
Crocker employees, however, littered the streets of San Francisco’s Financial District with pages from calendars thrown from windows of Crocker buildings, a San Francisco tradition usually reserved for New Year’s Eve.
Many Crocker workers sported black armbands, badges reading “R.I.P” or T-shirts with the messages “Sold Before Its Time” and “Only the Good Die Young.”
Downtown bartenders also got a heavier-than-usual noontime workout.
At the Wells Fargo press conference, bank officials said they planned to “consolidate"--a banking euphemism for “close"--about 120 of the combined banks’ 623 California branches during the next 12 months. Before the merger, each bank had about 310 branches.
Wells Fargo President Paul Hazen said 70 of the branches to be closed are in Northern California and 50 are in the Southland. He added that about 60% (72) of the doomed branches are existing Crocker branches and 40% (48) are Wells Fargo offices.
Nearly all of the closings will occur where current Wells Fargo and Crocker branches stand within a few blocks of one another, he said. In such cases, customers’ accounts will be transferred to the remaining office.
Effect on Customers
Hazen said the merger will have little immediate effect on Crocker customers.
“Their checks, ATM (automated teller machine) cards and credit cards will all remain valid. The terms of their loans will not change, and their certificates of deposit will continue to earn the agreed rates of interest.” However, new loans will follow Wells Fargo’s current loan interest schedule.
Hazen asked that Crocker customers continue to use their current offices for all business. Meshing the teller machine networks will be completed by fall, he said, and offices will be completely interchangeable by the end of the year.
“By late fall or early winter, there is going to be little recognition of any difference between Crocker and Wells Fargo,” he added.
Only the landmark Crocker branch at 1 Montgomery St. in downtown San Francisco will retain the Crocker name and symbol. All other signs and Crocker emblems will be removed by year-end and replaced with Wells Fargo symbols.
Wells Fargo bought Crocker from Midland Bank, one of Britain’s largest banks, which had acquired Crocker in stages beginning in 1980. Midland bailed out of its U.S. investment because of large losses in 1983 and 1984, shareholder unhappiness with the deal and a desire to use the $1 billion elsewhere.
Stock Bid Up 50%
Most banking analysts think that Wells Fargo got a bargain, and investors have bid up the bank’s stock by more than 50% since the acquisition was announced Feb. 7.
The transfer of ownership was completed about 10 a.m. Friday with the signing of more than 100 documents and the transfer by wire of the $1.07-billion purchase price.
Wells Fargo officials said they had to send the money in two chunks because the Federal Reserve, which handles wire money transfers, could not accommodate a $1-billion transaction. The money was sent to a Midland subsidiary in New York.
The merger will create the nation’s 10th-largest bank, with more than $42 billion in assets. The new Wells Fargo’s California market share will jump to 9% from the current 5% of total deposits.
“Our view is that this sort of merger is a precursor of things to come in a deregulated environment,” Wells Fargo Chairman Carl E. Reichardt said at the news conference. “In California there is an overcapacity in the (banking) system in terms of savings and loans and banks.”
Wells Fargo holds the accounts of about 2 million California households, including the 900,000 families that banked with Crocker.
Letter to Crocker Customers
Early next week, Crocker customers will receive a letter from Wells Fargo welcoming them to the bank and assuring them of uninterrupted service. “It will be business as usual for all customers as we combine the banks,” Hazen says in the letter.
He also says that, starting this summer, Crocker customers will be given a choice of various types of Wells Fargo checking accounts and will receive new checks at no charge.
Wells Fargo has established a toll-free number for customers who have questions about the merger. The number is 1-800-446-4046.
Hazen also announced Friday that Wells Fargo will immediately reduce interest rates for Crocker MasterCard and Visa credit card holders to match those in effect at Wells Fargo. The current 21% rate will be reduced to 20%, and Crocker customers who have had their credit cards for more than five years will get a further three percentage-point interest rate cut.
Crocker Chairman Frank V. Cahouet, who was not offered a post-merger job at Wells Fargo, spent his last day in his office, bidding farewell to his staff.
In mid-afternoon, a group of employees serenaded the departing chairman with a song-and-dance routine performed to the Motown hit, “Stop, In the Name of Love.”
John G. Harris, a senior Midland Bank official who served for a time as Crocker’s vice chairman, remarked during the performance: “It’s the end of an era. Very sad. Very sad.”