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Friday, November 28, 2008
Fed gives nod to Bank of America for Merrill Lynch

WASHINGTON: The Federal Reserve on Wednesday gave formal approval to Bank of America’s acquisition of Merrill Lynch, the Wall Street icon battered by the housing and credit crisis.

Merrill Lynch owns First Republic Bank, a very entrepreneurial bank that works almost exclusively with high income, high net worth individuals. Loan officers have a tremendous leeway, their compensation is very tied to successful loans and also tied to whether the loan continues to perform.

I cannot think of a combination that would be more of a mismatch of cultures than Bank of America and First Republic Bank. I talked with several FRB lenders the day after the initial announcement and they were in shock.

I am not disparaging Bank of America in any way, but the customers who are drawn to FRB are ones who may not be attracted to Bank of America.

How about your bank? Is your bank able to take advantage of this opportunity to acquire another bank? Or is it hiring experienced lenders who are coming to you from a very different banking culture? How are you helping them fit in?

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I tend to focus on how to pass along your guidelines and approach to tax return analysis, a critical step in being sure that everyone is making (at least close to) the same loan decisions with the same information. Written guidelines and a clear worksheet or software help here.

But what about the culture? What have your clients come to expect as different about your bank?

Two resources to integrate new lenders into your bank or credit union:
1) In my banker’s online training tutorial, Green Legos, Six Ns and a Map to Tax Return Analysis, you can download a questionnaire I provide to lenders attending my two-day training on Tax Return Analysis. They complete it before coming to class so when I ask what their guidelines are, they are not guessing.

Download it, complete it and make it available to all of your lenders.

2) Read the article on It’s Time for Storytelling by Evelyn Clark. Evelyn works with executives who want to become better leaders. And it turns out that crafting and sharing ‘the story’ is a great way to bring everyone onboard. You can hear an interview Evelyn did with me here.

What are some of the ways your financial institution integrates new lenders into your ‘banking’ culture?

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Linda Keith, CPA


Linda Keith CPA is an expert in credit risk readiness and credit analysis. She trains banks and credit unions throughout the United States, both in-house and in open-enrollment sessions, on Tax Return and Financial Statement Analysis.
She is in the trenches with lenders, analysts and underwriters helping them say "yes" to good loans.
Creator of the Tax Return Analysis Virtual Classroom at www.LendersOnlineTraining.com, she speaks at banking associations on risk management, lending and director finance topics.

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