Case Studies
FLEETBOSTON FINANCIAL CORP.
Creating National Presence for a One-time Regional Banking Company as it Develops into one of the Nation's Ten Largest Banks
Nicolazzo & Associates' relationship with Fleet is unusual from a number of standpoints, not the least of them being that our firm was the agency of record for Fleet for more than 16 years. More notable than the longevity of the assignment was what Fleet and N&A achieved in that time in terms of positioning and creating a regional and then a national brand.
Background and Situation Analysis
In 1982, when N&A's assignment began, Industrial National Bank, as Fleet was then called, was a powerhouse in its home base of Rhode Island, but was virtually unknown outside of the state. With $3.5 billion in assets making it the 57th largest bank in the nation, Industrial National was hardly viewed as a potentially significant player on the regional and national banking scene. With relaxation of interstate banking laws and powerful economic forces pushing consolidation within banking, Industrial National and many other banks embarked on the acquisition trail.
Taking the helm of Industrial National in 1982 was Terry Murray, then a 37-year-old who had earned a reputation as a hard-nosed banker while cleaning up the bank's troubled real estate lending operation. Murray was not the archetypical New England banker. Raised in a triple-decker house in Woonsocket, Rhode Island, Murray had worked his way through Harvard University and the bank through pure ability and grit. Murray was determined that Industrial National would be one of the surviving entities once the dust of bank consolidation had settled at some future date. One of his early initiatives was to change the bank's name to Fleet, a name that easily transferred to other markets and evoked the bank's and the region's heritage in maritime trade.
Nicolazzo & Associates was hired to assist Fleet in its bid to become a winner in the industry consolidation sweepstakes. N&A determined that the uncertainty surrounding the shape and form of bank consolidation regionally and nationally created an opportunity for a banker to step forward with a convincing vision of how interstate banking, new services, and technology were going to transform the business of banking. Equally important, for such a banker's vision to be credible, his bank's financial performance had to be "head-of-class."
The Plan
With this strategy in place, N&A set about to position Murray as a key figure in the next generation of U.S. banking leadership. By leveraging the bank's financial progress, its successful track record of acquisitions, and Murray's persona, N&A was able to successfully focus the news media spotlight on Fleet and Murray, in the face of its better-known and more established competitors, such as Bank of Boston. This strategy resulted in extensive broadcast and print coverage that echoed the positioning that N&A had developed for Fleet and Murray. Coverage included a page one profile in The Wall Street Journal as well as prominent coverage in Business Week, The New York Times, and numerous broadcast and print outlets. N&A also assisted Fleet with its outreach to the investor community, its acquisition communications, and its annual meetings.
This strategy proved especially useful to Fleet when it was bidding for the assets of the failed Bank of New England. In a daring gambit, Fleet enlisted the Kohlberg Kravis & Roberts buyout firm as an investor to strengthen its bid financially. This move fit well with the message and image that N&A had developed regarding Murray's and Fleet's "outside-the-box" thinking. N&A worked to position the ultimately successful Fleet/KKR bid as the best option from both the perspective of the federal government and the New England economy. In hindsight, the Bank of New England auction proved to be a turning point for both Fleet and banking, and it helped cement Fleet's reputation as one of the nation's most dynamic financial services companies.
Nicolazzo & Associates also provided Fleet with crisis counseling in various situations, including an incident when questions regarding the legality of certain lending practices arose in one of the states where it operated. Key elements in N&A's crisis plan called for placing the employees in question on paid administrative leave and appointing a respected outsider, in this case former U.S. Attorney General Griffin Bell, to conduct an independent investigation. N&A recommended sharing the independent investigator's findings publicly. The strategy was embraced by Fleet and enabled management to effectively address and contain the issue.
The Results
Communications proved to be an important element in stimulating investor interest in Fleet and creating the Fleet brand in the minds of customers. These efforts enabled Fleet stock to trade at a higher earnings multiple than its competitors, thereby attracting investment dollars and enhancing its ability to make acquisitions effectively and economically. Terry Murray's success in making Fleet the dominant banking company in New England was due in no small part to his ability to communicate cogently a clear and convincing strategy for his institution and his industry. N&A is proud of its role in helping to make this possible.