Bill Klich was cruising Interstate 75 in his Mercedes just south of Sarasota at 6:15 p.m. Aug. 13 when the text message came in: "Eagle is a go."
Project Eagle, which drew its name from Colonial Bank's logo, stood for BB&T's attempt to buy the assets of the deeply troubled Colonial Bank.
As head of BB&T's Florida operation, Klich (pronounced "click") knew the cell phone alert meant that the feds had seized Alabama-based Colonial in the country's biggest bank failure of the year and that his North Carolina bank had placed the winning bid with the Federal Deposit Insurance Corp.
It meant hundreds of BB&T employees would be getting on chartered jets that night, ferried to destinations around the country that they couldn't even tell their families about. They would have to stay low-key in airport hotels the next day, then show up at one of Colonial's 354 branches at 6 p.m. Friday, Aug. 14, to take charge.
The message meant BB&T would more than triple its footprint in Florida overnight, double its deposits in the Tampa Bay area to $3.3 billion and suddenly arrive as a big player in new markets like Miami-Dade County.
On a personal level for Klich, it also meant thoughts of retirement would have to wait. Again.
This Monday — Aug. 31 — was supposed to be Klich's retirement day, the end of a 40-year career in banking coming just a week after he turned 65.
He and his wife, Lyle, had planned to spend more time in their second home in the mountains of North Carolina. He mulled over post-retirement work as a financial consultant, perhaps teaching at his alma mater, the Citadel.
Last year, Klich met privately with BB&T CEO Kelly King and decided to postpone retirement 10 months, until June 2010, so he could complete a yearlong term as chairman of the Florida Bankers Association. That would give him time to champion the causes of Florida bankers, like fighting a proposed, new consumer regulatory body in Washington. He would gradually be able shift duties to a successor.
Then came Colonial.
Klich had seen his share of banking booms and busts. From his office in downtown St. Petersburg's BB&T headquarters, Klich recalled the tricky conversion of the former Coast Bank from a savings and loan to a commercial bank and his close friendship with the bank's owner, former Tampa Bay Buccaneers owner Hugh Culverhouse. He remembered staying up nights trying to save Republic Bank from his predecessor's ill-fated excursion into high-risk mortgages. (Republic, at one time the largest bank based in Tampa Bay, was sold to BB&T after a costly turnaround).
Colonial was altogether different.
Even though bankers and Wall Street had been bracing for Colonial's demise for months, the end of Alabama's fourth-largest bank came as a whirlwind.
Klich, a former Air Force captain, described the military-style campaign.
About 425 BB&T employees were told to head to a nearby airport the Thursday night before the takeover; more than 50 chartered jets were waiting. Some 250 rental cars and hotel rooms were reserved in all markets Colonial served where BB&T didn't have a nearby office.
Klich was among the relatively few inside BB&T privy to details of Project Eagle. Many employees arrived at an airport with no idea where they were headed. They were handed envelopes with destination details after boarding and directed not to share information. They were dispatched to Texas, Nevada, Alabama and Georgia.
Florida, though, was ground central in the mission. It was the state where Colonial devoted the lion's share of its empire building and the state that had saddled the bank with $1.7 billion in bad real estate loans it couldn't overcome.
Nationally, BB&T dwarfed Colonial, but in Florida it had just $4 billion in deposits compared with $14 billion for Colonial. Overnight, BB&T went from 107 branches statewide to 305.
Klich headed to Miami for the Friday night conversion, a market where BB&T was jumping from zero branches to 23. He wound up on familiar turf, at a Colonial branch across the street from his old elementary school in Coral Gables.
Colonial branch managers received an e-mail blast telling them to stay in their offices until 6 p.m. Friday, so they could turn over their keys when BB&T reps arrived. That Sunday, BB&T chief Kelly King flew to Orlando. The bank booked a meeting room at the Orlando Sheraton off Interstate 4 expecting 250 Colonial branch reps. More than 400 showed up.
King's message to the group: It's not your fault; you took care of your customers. And he promised those in the branch networks they would still have a job even if their branch happened to be one of the relatively few that would be closed.
Klich said BB&T was greeted by Colonial workers with a sense of relief. "These poor guys and gals had been under tremendous stress and tremendous pressures," he said. "It was more like a liberation."
Florida key to growth
BB&T hopes it has learned from the mistakes of its predecessors, another Carolina bank, in particular. When the former Wachovia Corp. bought Golden West Financial, it inherited so many toxic, exotic mortgages that Wachovia was overwhelmed and nearly collapsed.
In contrast, under its loss-sharing agreement with the government, BB&T minimized its exposure to some of Colonial's legacy burdens.
BB&T's balance sheet also has been stronger than Colonial's. More than 95 percent of Colonial's loan portfolio was in real estate and heavily concentrated in Florida's troubled market. BB&T's loan portfolio has been less than 40 percent real estate and spread across 11 states.
Among the bank's immediate challenges is to avoid a major siphoning of deposits.
A year ago, BB&T was one of the biggest beneficiaries when thousands of customers pulled money out of the struggling Wachovia before its arranged sale to Wells Fargo. Now BB&T is trying to bring back Colonial customers who bolted in recent months and persuade the remainder to stay.
Banks often estimate that they will lose up to 25 percent of the customer base of the bank being acquired. The more overlapping branches that are closed in a merger, the greater the opportunity for community banks and others to increase market share.
BB&T aims to be as close to zero loss of deposits as possible. The bank says it has already lured back some Colonial customers who had pulled their money out as Colonial's demise became apparent. Out of $14 billion in Florida deposits coming from Colonial, "we're probably close to that same number today, give or take a million or two," Klich said.
Ken Thomas, a Miami-based bank consultant and economist, is among those who wonder how well BB&T will fare entering South Florida, a culture unique among Florida areas. But Klich says he has a leg up in that area, having grown up there.
Though the bank's challenges are arguably toughest in Florida, so too is the opportunity once the state's population eventually starts growing again. "At some point, we see Florida becoming the engine that pulls BB&T's train," Klich said.
The two banks have some geographic overlap statewide, most pronounced in the Tampa Bay area, where BB&T has 33 branches and Colonial 30. It will take months to decide which redundant branches will be closed, though BB&T executives say the number will be small.
Some easier transitions have been made already. There are no ATM fees for BB&T customers using a Colonial ATM and vise versa. And Klich was quick to restructure the Florida market from three regions to five, naming new executives to head the two additional regions.
More complicated changes will take time. Klich estimated it could take upward of a year, for instance, to convert all the Colonial branches to BB&T's electronic network.
Until then, his retirement and the mountains of North Carolina will have to wait.
Jeff Harrington can be reached at email@example.com or (727) 893-8242.