Do they have a good marriage? You can take that to the bank: San Francisco Chronicle, June 2006

world savings bank

He’s tall, has wispy red hair and is given to wisecracks. She’s shorter and more serious, with dark hair and a dark complexion. But don’t mistake Herb and Marion Sandler for a study in opposites.

Instead, this couple, now in their 70s and making headlines for selling Golden West Financial Corp. to Wachovia Corp. for slightly more than $24 billion in cash and stock last month, achieved extraordinary success by working as a team.

With adjoining 17th-story offices overlooking Oakland’s Lake Merritt, the Sandlers achieved something rare indeed: Not only have they stayed married for more than 40 years, but they jointly ran a savings and loan that grew from mom-and-pop status into one of the nation’s largest financial institutions, with 285 branches (mostly under the name World Savings Bank) and more than $125 billion in assets.

The deal was valued at $25.5 billion when it was announced May 8. But Wachovia’s stock has dropped from $59.39 when trading closed before the deal to $55.15 Friday. The Sandlers’ combined stake of 10 percent of Golden West is worth about $2.4 billion.

It’s not only the Sandlers who have done well. Golden West’s stock has performed spectacularly over the long run. If someone invested $10,000 in Golden West at its initial public offering in 1968, the investment would have grown to nearly $3.4 million as of Dec. 31, 2005, according to the Golden West Web site.

“We’ve almost never not worked together,” Marion Sandler said recently week in a joint interview in her husband’s office as she pulled out knitting needles and yarn. “It’s extraordinarily wonderful. We decided our marriage was the most important thing,” and that if working together caused too much strain, they would come to a new work arrangement.

That never happened. “We are extraordinarily compatible,” she said. “I just can’t describe it.”

“Are you going to cry?” Herb Sandler asked.

“Yeah,” she said, dabbing at her eyes.

The sale of Golden West has turned the spotlight on a couple who defied convention by melding a conservative approach to business philosophy with a liberal approach to philanthropy.

On the business side, the Sandlers owe their success to sticking to a few basic products and serving their customers well. They specialize in adjustable-rate mortgages. They offer good rates on savings accounts. They make predominantly low-risk loans, and their borrowers tend to have a lot of equity in their homes. When other savings and loans branched out into a wide array of services and products, some very risky, Golden West became known for its focus, discipline and prudence.

They also attribute their success to a corporate culture that encourages teamwork, shared credit and promotion of women managers, right up to the co-chief executive officer.

Herb Sandler, 74, met Marion Osher, 75, through a mutual friend when both were staying in the Hamptons, on Long Island, in weekend rentals. He was a lawyer at a small firm in New York; she was one of the first women to work as a security analyst on Wall Street. “She didn’t let me know that” at the time, he recalls. “I just saw a terrific looking woman.”

“His line,” says Marion Sandler, “is that I was on the beach, ‘disguised in her bathing suit.’ ”

When their courtship led them to live together, he decided to move into her apartment on lower Fifth Avenue. He can still recall his brother’s friend warning him: “This will never work.”

“He thought I’d always be one down, that there would be an imbalance,” Herb Sandler said. “I just thought it was a great apartment.”

“You married me for my apartment!” she exclaims in mock surprise. “I never knew that.”

Of the friend, Herb Sandler is characteristically blunt: “What a jerk.”

“Herb is very, very comfortable with himself,” Marion Sandler says. “He calls it like it is. (Working with women) doesn’t threaten him.”

The Sandlers were married in 1961, and had two children. In her work on Wall Street, Marion Sandler began looking at savings and loans, and saw profitable companies in California. Some of Herb Sandler’s clients owned thrifts in the state as well. The Sandlers decided to move west and buy one.

They bought the two-branch Golden West Savings in Oakland in 1963 for $38 million, a transaction largely financed by Marion Sandler’s brother Bernard Osher. He was successful in real estate and business, and later went on to own the San Francisco auction house Butterfield & Butterfield. He is also a prominent Bay Area philanthropist.

In the early days, they did everything together. “We were a small institution, and we were very hands-on,” Marion Sandler says. “It was such fun.”

They opened accounts, appraised loans, solicited business. But as they grew, they came to a necessary division of labor. In a 2004 interview with The Chronicle, Marion Sandler said she was “more active in the day-to-day management than Herb is. I do things like funding for loans, acquisitions, marketing. I do the mutual funds.” Herb said he was more involved on the asset side and in the loan area.

They sought to develop a culture of teamwork, in which people are respectful of each other’s ideas. “Everybody is supportive,” Herb Sandler says.

According to Konrad Alt, an executive who worked at Golden West for three years in the 1990s, that comes from the Sandlers themselves. “One has to say that their marriage in many respects has to be an accomplishment almost on a level with their business success,” said Alt, who now runs the San Francisco office of banking consultancy Promontory Financial Group. “I know very few couples who could work together so regularly and disagree so forcefully and still maintain a happy marriage.

“In the banking industry,” Alt added, “people are in a hurry to catch the wave, adopt the latest technology, follow the crowd. The Sandlers are unusually comfortable waiting to see if the latest great new thing actually pans out. Ultimately, if it did, there was time for them to adopt it too.”

Most notably, the Sandlers were slow to add ATMs. But by waiting, Alt said they took very little risk, and probably got a good deal on the machines.

The ATM story, along with analyst comments about spartan branches and a modest reception area at headquarters, often lead to stories of the Sandlers’ frugality — what some have called penny pinching. Herb Sandler resents it.

“It is an unfair rap,” he says. The lack of receptionist — a sign on an unmanned desk tells visitors to pick up a phone when they arrive — “has nothing whatsoever to do with being efficient.”

They say they do spend money on quality branches, and have even hired well-known architects, like William Turnbull and Frank Gehry. They also spend on technology, training, and other ways to “unleash productivity,” Herb Sandler says.

The Sandlers expect to remain active with Wachovia, but figure they’ll be spending a lot more time on charitable works.

Both are the products of immigrant Jewish families. He tells how his father, the son of a Russian barber, became a lawyer without even attending college. Characteristically, Herb Sandler says his wife’s story is more interesting.

Her parents arrived in Biddeford, Maine, a mill town near Portland. They established a successful hardware store and invested in real estate. They had four boys — an orthodontist, two cardiologists, and Bernard, or Barney, the businessman — and then Marion, the only daughter.

Marion Sandler joined a brother in New York. “I started at Bloomingdale’s, but I didn’t want to make a career there,” she says. “Wall Street was very exciting.”

When she met with rejection, she was unbowed. “I kept knocking on doors,” she says.

Now Wall Street knocks on hers. The Sandlers

Herb Sandler

Age: 74

Place of birth: Bronx, N.Y.

Job: Co-chairman and co-chief executive officer, Golden West Financial Corp.

Education: Bachelor’s degree, City College of New York; law degree from Columbia Law School

Marion Sandler

Age: 75

Place of birth: Biddeford, Maine

Job: Co-chairman and co-chief executive officer, Golden West Financial Corp.

Education: Bachelor’s degree, Wellesley College; one-year Harvard-Radcliffe studies program in business administration; MBA from New York University

Source: Chronicle research

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