An end, a beginning
As Fleet nears merger, executives look to future
In the end, it took just 35 minutes for Boston's largest bank to vote itself out of existence.
"Today is like attending Fleet's funeral," said Thomas P. Tatro of Harrisville, R.I., moments before his fellow shareholders of FleetBoston Financial Corp. voted overwhelmingly to approve its merger with Bank of America Corp.
Even for Fleet's top executives, the special meeting yesterday seemed bittersweet. Bank executives spoke of hopeful prospects -- strong dividends for shareholders, better products for customers, and a new, brighter future in a company that bills itself as the fourth most profitable in the world.
But when building the case for the merger, Fleet chief executive Chad Gifford said several times that the decision had been tough. In the end, he said, he had to sell.
"The most difficult, even emotional aspect is the sale of New England's principal bank," Gifford said. "But my job as CEO is to realistically analyze this industry. We will be working hard over these next few years to bring the best of the heritage of FleetBoston into Bank of America."
As Gifford addressed Fleet shareholders in Boston for the last time, Bank of America shareholders in Charlotte, N.C., also gave their consent to merge. Barring a last-minute snag from state regulators, the dual votes mean the deal is done.
In Boston, the audience in the half-full auditorium remained largely silent, no boos or catcalls, and only a smattering of applause for two angry dissenters who begged Gifford to reconsider. One shareholder likened Gifford to the biblical Esau, who sold his birthright to his twin brother, Jacob.
Yesterday marked the end of the line for Fleet customers, long resigned to being jolted from bank to bank as Fleet gobbled up its local competitors to become New England's dominant institution. Some are still reeling from Fleet's tumultuous acquisition of BankBoston five years ago.
Of the region's 25 largest banks a quarter-century ago, Fleet now owns 19, said Eugene McQuade, Fleet's president.
Earlier this week, members of Fleet's board of directors dined on steak and fish at the old Ritz Carlton, meeting as a unit for the last time. A few of the longtime directors stood up to speak, recounting stories of steering Fleet from an obscure Rhode Island company to the nation's seventh-largest bank.
The group took one last photo together as a keepsake. Some, like former Fleet chief executive Terry Murray, will not make the leap to Bank of America.
But though the evening was heavy on nostalgia, there were no tears, according to an account by McQuade. "It's a loss for all of us," McQuade said. "It's a time of change. But as managers, we get paid to recognize the future."
McQuade keeps models of two matching ships in his office overlooking Boston Harbor, one with the Bank of Boston logo on its sails and one with Fleet. He said he has displayed them there for years as a reminder of the importance of building a powerful Boston-based bank.
But when he moves to Charlotte to become president of the Bank of America, he said he has no plans to take the ships with him.
"They have a special meaning in terms of what we've put together in Boston," he said. "Now we're moving into a company that's one of the largest banking operations in the United States, and we'll have a huge stake in that going forward."
Fleet executives also plan to meet with about 2,500 employees tomorrow to thank them for their work.
As Fleet prepares to close its merger with Bank of America in April, it also faced tough questions on layoffs and the future of its flagship headquarters at 100 Federal St. One published report suggested Fleet is looking for tenants for up to half the Federal Street building, but the bank said yesterday that it plans to lease only one or two floors.
The issue of job cuts also remains up in the air. The Wall Street Journal reported yesterday that the combined bank plans to eliminate up to 13,000 jobs, but a Bank of America spokeswoman said no decisions have been made.
In a separate report, two bank analysts said last week the combined bank would need to cut up to 11,000 jobs to meet its promised cost savings. Bank of America has promised to save $1.1 billion in the merger, at least $100 million of which will come from staff cuts. Employment levels will remain the same in New England.
As another part of the merger changes, Bank of America plans to integrate the Fleet computer system into its own network, allowing customers to access ATMs and telephone banking nationally. In some previous mergers, Bank of America has kept the acquired bank's old computer system.
The bank also plans to combine statements for multiple bank accounts and let customers keep one pin number for ATMs, credit cards, and online banking, according to executives involved in the discussions. Bank of America plans to complete its entire conversion of Fleet branches by the summer of 2005.
Another quirk of the merger: The last BankBoston signs, long vanished from New England, will live on in Latin America. When Fleet gobbled up BankBoston five years ago, the bank's Latin American banking operations kept the old name. But, now, Fleet executives said that BankBoston name has become so respected that they do not plan to convert the branches to Bank of America.
Even Murray, sitting in the audience at the Fleet shareholder meeting yesterday, said he felt "mixed" watching Gifford sell the bank he built. But he said Bank of America is the best company for Fleet to join.
"I guess I'm very optimistic long term," he said.
Sasha Talcott can be reached at stalcott@globe.com. 