Cultures clash as banks leap into high finance.

• Author: McMillan, Alex Frew

When Mike Greco and Larry Brown walked out of First Union Corp.'s real-estate capital-markets division in February, they took 27 of their colleagues with them - a fourth of the unit. Like advertising or pro sports, investment banking is the kind of industry where job hopping is a full-time occupation. But these investment bankers worked at a commercial bank, where people sometimes toil 9 to 5 the same place their whole careers.

They didn't even have the decency to leave town, setting up shop a few blocks down Charlotte's Trade Street as WMF Capital Corp.

After courting investment bankers from Wall Street, First Union and NationsBank Corp: have wed their basic bank business to hot-shot high-finance departments. The departure of Greco and Brown, who ran the First Union real-estate division after being wooed from a New York firm, is a sign the marriage is one of convenience at best.

Their main reason for leaving was that they could make more money on their own. But culture clashes and power struggles helped drive them out. "The same thing is going on at NationsBank," says Jim Smith, a finance professor at UNC Chapel Hill's Kenan-Flagler Business School. Free-wheeling investment bankers often feel stifled by big-bank bureaucracy. "There are different values, different ways of doing things, different lifestyles."

Greco and Brown say their parting with First Union was amicable - a banker's version of rock bands splitting over creative differences. "There was no fist-pounding fight," Brown insists. There was tension. In a meeting to explain the departures to the division's remaining members, First Union blamed "miscommunication" with the credit division, which must OK the deals investment bankers put together.

Where NationsBank and First Union were once the New South upstarts to New York's old guard, the banks now have competition in their own back yard. And it is from talent they brought to town. Lee Lloyd, managing director of the Greensboro-based investment bank Lloyd & Co., is opening a four-person office in Charlotte. One of his hires is from NationsBank. "Lots and lots of investment bankers don't like being part of a larger and larger company," Lloyd says. "I expect there will be a large number of smaller firms starting."

Four years ago, First Union lured Greco, Brown and eight others from Donaldson, Lufkin & Jenrette Inc. They built commercial banking's largest commercial-real-estate bond department, securitizing $2.2 billion in loans last...