The late Tom Miller, the legendary Indianapolis banker, didn't sugarcoat the truth when he decided to retire in 1994, about a year after selling local powerhouse INB Financial Corp. to Detroit-based NBD Bancorp.
"I'm not accustomed to saying, 'May I?'" he said at the time, explaining the awkward transition from running his own bank to answering to an out-of-state owner.
That mind-set helps explain why the days of the imperial bank CEO are long over in Indianapolis. Until the succession of sales in the 1980s and '90s, the heads of the city's local financial institutions were imposing men who wielded clout that's hard to imagine today.
But such figures are rarely content running a subsidiary of a parent, and often the buyer wants to start fresh with a new CEO, anyway.
"I have been involved in over 100 bank mergers. I can only think of one where the CEO of the selling bank stayed on more than a year or so," said John Reed, president of David A. Noyes & Co.'s Investment Banking Group.
"In my experience, either when the buyer really, really wanted the selling CEO to stay, or the other way around, it just doesn't work. When you have a guy calling his own shots for some period of time, and all of a sudden he has someone to answer to, it doesn't fit."
We're taking this trip down memory lane because another storied name in Indianapolis banking is stepping from the stage. When Milwaukee-based Marshall & Ilsley Corp. completes its $529 million cash purchase of First Indiana late this year or early next year, the McKinney family will hand over the reins. Robert McKinney, 81, previously stepped away from day-to-day management but remains chairman of First Indiana's executive committee. His daughter, Marni McKinney, 50, is the company's chairwoman.
Neither Marni McKinney nor CEO Robert Warrington, 59, are slated to run M&I's Indianapolis outpost, according to a draft of a proxy statement filed with the Securities and Exchange Commission. Instead, each is expected to sign on to a consulting gig paying $160,000 over two years. As part of those duties, each will serve on M&I's soon-to-be-formed Indiana community bank board. Neither executive could be reached for comment.
Banking observers would have been surprised if either was looking to stick around. For Marni, First Indiana is effectively the family business-she, her father and other family members own 21 percent of the stock. And Warrington is developing a reputation as a seller of banks, not as a mid-tier executive in a larger hierarchy. Before joining First Indiana in 2004, he helped orchestrate the sale of Grand Rapids, Mich.-based Old Kent Financial Corp. to Cincinnatibased Fifth Third Bancorp.
And neither executive needs to fret about collecting a paycheck anytime soon. The McKinney family stake is fetching more than $111 million in the sale, while Warrington's is worth around $5.9 million. In addition, the proxy shows that both Marni McKinney and Warrington are in line for plump changein-control payments. McKinney is entitled to $1.2 million, while Warrington is set to collect $3.7 million.
UBS plays both sides
Swiss financial giant UBS would like nothing better than to wiggle out of its commitment to provide up to $1.6 billion in financing to Finish Line Inc., the Indianapolis retailer that agreed over the summer to buy Tennessee-based Genesco Inc.
It wants a judge to declare that a "material adverse change" has occurred at Genesco, which would give UBS the right to walk away from the financing agreement. Its motivation is simple: Recent turmoil in the credit markets makes the financing far less profitable and even leaves the financial-services concern vulnerable to steep losses.
It's true that UBS also serves as financial adviser to Finish Line, a role that would earn it a multimillion-dollar fee if the deal closes. But as a Wall Street Journal blogger recently noted, that fee "is likely to pale in comparison to the losses" it could suffer on the financing.
Take a look at another troubled deal with central Indiana implications, however, and UBS is singing a different tune. It badly wants a group of private equity firms to complete its $25 billion purchase of Virginia-based Sallie Mae, the student lender with more than 2,800 area employees.
What's the difference? In the Sallie Mae sale, UBS is advising the seller and isn't providing financing. So, in that deal, it's all about the fee, which the Journal says would top $50 million.