| First Union Corp. | One First Union Center, Charlotte, NC 28288 |
| www.firstunion.com | (704) 374-6565 Fax: (704) 374-3425 |
 |
|
Fast Eddie picks it up
Because of deregulation that has allowed financial services firms to move into new businesses and geographic regions, The financial services industry has become an eat-or-be-eaten world in the past decade, forcing banks to acquire and diversify or get lost in the tide. For example, NationsBank, First Union's most prominent competitor, recently snapped up Barnett Banks, and then merged with Bank of America.
But led by a man nicknamed "Fast Eddie," First Union has kept pace. Former First Union CEO Edward Crutchfield, a Wharton graduate, picked up his moniker as he led the bank through a 10-year acquisition spree, during which the bank made more than 70 deals. (Crutchfield resigned as CEO in March 2000 to battle lymphoma. He will remain as chairman until December 31, 2000. First Union President G. Kennedy Thompson was named CEO.) Since the late 1980s, First Union has transformed itself from a regional bank into a financial services powerhouse, and America's sixth-largest banking company, with 16 million customers.
The high point in the company's acquisition run was the November 1997 purchase of Philadelphia-based CoreStates Financial Corp., which at $17.1 billion was at the time was the most expensive acquisition in U.S. banking history. Acquired at about 5.4 times book value CoreStates increased First Union's assets to more than $200 billion. The deal has created an East Coast banking giant - First Union now can claim to be either first, second, or third in share of deposits in more than two-thirds of the 30 largest East coast metropolitan areas.
But First Union wasn't finished. In March 1998, the bank acquired New Jersey-based lender The Money Store for $2.1 billion, making First Union the largest provider of home equity and small business loans in the country. "Fast Eddie" inked the deal with the wildly successful consumer loan company while on a fishing trip in New Zealand. Based in Charlotte, N.C., First Union is now the second-largest home equity lender, the 12th-largest mortgage service company, and the 18th-largest mutual fund provider in the U.S. Although Crutchfield has made it known that he would like to pursue a "merger of equals" with another giant bank in order to make First Union even larger, it does not appear that any such deal is in the offing in the near future.
We wanna play on Wall Street
In addition to acquiring competitors, commercial banks have been buying firms with I-banking capabilities. First Union is no exception. In 1997, First Union added equity underwriting to its businesses when it acquired Wheat First Butcher Singer, (thankfully renaming it Wheat First Union). And in 1998, the firm purchased M&A advisory boutique Bowles Hollowell Conner & Co. (which was co-founded by former White House Chief of Staff Erskine Bowles).
But it is First Union's organic growth of a securities business that is most impressive. As of January 1999, more than 5000 people were employed by the bank's capital markets group (its securities business); the firm began the group five years earlier with about 700 employees. First Union underwrote $20 billion in debt and equity offerings in 1998.
Not all roses
First Union has made a name for itself with its swift, efficient assimilation of acquisitions, its wide offering of financial products, and its sophisticated database marketing system. The company is considered very well-managed. However, some analysts have taken the company to task for its affinity for overpriced deals. Indeed, the firm has had some difficulty digesting the CoreStates deal. In early 1999, the company announced that it had not met its savings target from the acquisition, and cut its 1999 earnings forecast. (It fell $50 million short of the $300 million it expected to save through layoffs.) The company's stock price fell 11 percent in one day because of the announcement.
Meanwhile, the bank has racked up more than its share of penalties and lawsuits. After its November acquisition of CoreStates, Florida regulators slapped it with a $300,000 fine for unregistered brokerage activities. Eight other states have penalized the bank for unregistered activity. It has also been charged with a variety of fraudulent and misleading sales practices and securities law violations. One former financial planner at the bank charged that the company trained its brokers to mislead customers - using words like "safe" and "government-backed" to coerce customers into risky investments. In addition, she revealed that the bank used its logo to confuse people: "customers did not know whether they were dealing with the bank, which was FDIC insured, or the brokerage, which was not." She also explained that it was company policy to advise customers of risks only after a deal was closed.
|
|
First Union recruits aggressively on college campuses and at job fairs. The company web site, located at www.firstunion.com, features a thorough listing of employment opportunities, training programs, and benefits. Go directly to the site map to find the employment page. A large percentage of candidates come through headhunters and referrals, insiders says. The company also advertises in newspapers, though insiders say it is "highly unusual" for people to get in that way.
Candidates generally have an interview with Human Resources, followed by "a full day of interviewing" with a number of people. One contact says "usually you would interview with HR first, then with the department manager, and then with the group leader." Those with little or no experience in the industry need not worry; employees say the company "is very interested in 'people' people. You need to be a team player," adding that the interview process is "in between moderately relaxed to somewhat stressful."
|
|
Varied experience
Insiders have different takes on the corporate culture at First Union. Says one insider: "The atmosphere is very political, but for a bank, it isn't bad. Not bad for a bank, though, is a hell of a lot worse than anywhere else. I've had government jobs where you'd think politics would be a lot worse, but they are nothing compared to this." Another disagrees, saying "from my perspective, the corporate culture is fairly easygoing with a lot of emphasis on teamwork. There is no need nor room for prima donnas or empire builders, hence, no jealousies, back-biting or in-house political control fights."
The company is varied when it comes to dress, too. "In Charlotte, there is a suburban First Union campus that is extremely casual, but then many units are still uptown in suits and ties," says one contact. Reports another: "I have friends that have to wear suits or heels every day. Personally, I haven't worn a tie to work in five months."
A "better than average" employer
Despite the office politics, employees say management at First Union is "better than average in trying to create a good working environment for its employees." Employees applaud the company's efforts to promote a balance between work and family life through flex-time options. Though the company claims to offer "competitive salaries," most employees say the pay scale is "average," and one describes it as "slightly substandard." Annual salary increases are "around 4 percent," and promotional increases are "approximately 7 percent." The company offers "adequate" medical insurance, a subsidized fitness center, "excellent daycare," and an "excellent" 401(k) plan. Under this plan, the company matches dollar for dollar up to 6 percent and vests from day one. Employees may elect to join the stock option plan after one year.
Insiders also point out that "First Union promotes itself as a FUN place to work and it actually lives up to that image." The company puts an emphasis on teamwork, and sponsors an annual Employee Appreciation day and quarterly Awards Celebrations. Employees also report that the firm rates highly on diversity issues. "As a woman who has worked primarily in a 'man's field,' I have never seen or heard of anyone being treated unfairly or with prejudice of any kind." Says one contact: "I do not believe that First Union gets the recognition that it should for its work environment."
Grow up, and old with First Union
Once you get into the company, employees say "it's fairly easy to move within the organizational structure." The company promotes internal movement through in-house cross-training and development programs. One insider says that "everyone is encouraged to take advantage of any and all training provided." Says a longtime First Union employee who has switched positions several times: "Once you are in the bank, I think the interviews to move to another group are much easier." However, when it comes to switching jobs within a company "they do require that you spend at least one or two years in a job before applying to another position."
|
|
Don R. Johnson
Human Resources
|
|
Annuities;Capital markets;Cash & capital management;Home equity lending;Mortgage banking;Mutual funds;Traditional banking services;Trust services
|
|
Bank of New York;BANK ONE;Bank America;Chase Manhattan;Citigroup;Commonwealth Bancorp;Fleet Bank;Household International;MBNA;Merrill Lynch;Northwest Bancorp;PNC Bank;SunTrust;Wells Fargo
More Company Profiles
For more career information, go to Vault.com
©2000, Vault.com Inc
Click here to email this page to a friend  |
|
|
|
||||||||||||||||||||||||||||||
|
||||||||||
|
||||||