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Bank of America Name Lives On in Merger

Finance: Union of NationsBank and BofA creates, at least briefly, the nation's largest bank.

October 01, 1998|LIZ PULLIAM | TIMES STAFF WRITER

In the end, Bank of America won--at least in name.

The bank created Wednesday by the merger of BankAmerica Corp. and NationsBank Corp. will carry the Bank of America moniker, as will its network of 5,000 branches coast to coast.

"We share a vision . . . starting today, we share a name," said Hugh McColl, who headed NationsBank and who now heads the merged banks' holding company, which also retains the BankAmerica Corp. name. McColl announced the changes Wednesday night during a 90-second commercial that aired during CNN's "Moneyline."

The new BankAmerica, with $570 billion in assets, will briefly reign as the country's largest bank until it is eclipsed by the pending merger between Citicorp and Travelers Group Inc., scheduled to close Oct. 8.

The BankAmerica deal is off to an inauspicious start. Its value, at $37 billion, has dropped 29% because of the plunge in stock prices since the banks announced their agreement four months ago.

The shares of both companies fell again Wednesday as investors continued to punish bank stocks, fearing further losses from Asia, Russia and Latin America. BankAmerica has revealed $330 million in such losses so far, although analysts predict the merger will actually cushion shareholders from further damage, since NationsBank had comparatively few overseas investments.

Bank officials have said they plan to lay off 5,000 to 8,000 of the combined company's 180,000 employees. Many of the cuts are expected at BankAmerica's former San Francisco headquarters, which is moving to NationsBank's Charlotte, N.C., site. The company will also shed branches and employees in Texas and New Mexico, the only states where the two bank networks overlapped.

One employee who won't be out of work is former BankAmerica Chief Executive David A. Coulter, the combined company's new president and heir apparent. Coulter's five-year employment agreement guarantees that he will be paid at least as much as McColl, who received $4.5 million last year. Coulter will also receive 300,000 shares of the new company's stock and options on 2 million more.

In picking the Bank of America moniker, company officials chose history over regionalism.

The Bank of America name dates back 70 years to when A.P. Giannini combined his San Francisco-based Bank of Italy with the 21-branch Bank of America of Los Angeles.

By contrast, NationsBank was a newcomer; the name was picked in 1991 by the former North Carolina National Bank to announce its ambitions to go coast-to-coast.

That became possible when Congress and regulators approved interstate banking.

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