Is Wells Fargo bank the last lender standing

October 12, 2009
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Is Wells Fargo the last bank left standing for small businesses?

CNNMoney.com seems to think so, as the financial Web site recently reported that Wells Fargo was the only top 10 small-business lender to lend more in 2009 than in 2008.

In fact, the report, which used data from the U.S. Small Business Administration, showed that Wells Fargo lent $605 million for fiscal year 2009. The No. 2 lender last year was U.S. Bank at $249.5 million, or 59 percent less than Wells Fargo, creating quite a large gap between the nation’s top two lenders to small businesses last year.

“Wells, I think, has had a very strong perception in terms of its credit quality and financial strength for a lot of years, and on the local level for a bit. Until the credit crisis and until the market really headed south, I think that (lending) was kind of an underappreciated fact,” said Don VanDine, regional vice president for Wells Fargo, whose territory covers the western half of the Lower Peninsula.

“But when you look at some of the anniversaries we’re going by right now with some of the investment houses and large, large financial institutions who just don’t exist any longer, being a triple-A-rated bank, being the strongest financially rated bank in America suddenly became very, very important to people that we were potentially going to do business with a couple of years ago. We’ve expanded dramatically on a local level because of that,” he said.

VanDine opened the Grand Rapids office of Wells Fargo in February 2004 with two departments and about a dozen employees. Since that chilly ribbon-cutting winter day, the bank has grown to 14 departments and 250 employees, and is looking for more office space at a time when at least 98 banks nationwide have closed this year during the country’s worst financial crisis since the Great Depression.

“It’s all been organic growth with local people that we’ve brought on,” said VanDine.

“That’s very exciting. Frankly, we like the community. Culturally, we like Grand Rapids a lot,” said Tim Traudt, executive vice president and Great Lakes regional managing director of the wealth management group for Wells Fargo & Co.

Traudt has been with the company for 26 years, having joined Wells Fargo in 1982. He heads the investment management side of the business for the Upper Midwest region, which consists of nine states, including Michigan, and metro Chicago.

“Our growth has been extraordinary on a percentage basis, but I really don’t measure it that way. My philosophy has always been — and I think it’s also Wells Fargo’s philosophy — that bigger isn’t better, better is better, and our intention is to continue to earn 100 percent of our clients’ business.

“So we’re certainly very excited about the new opportunities that we get almost every day by partnering with these teams that are here,” said Traudt.

“I think we’re going to have a very large presence here over the next 10 years,” he said of Grand Rapids.

The past year created uncertainty among high-worth individuals over where to invest and what instruments to invest in, and Traudt readily acknowledges that tension. But he said everyone in his division builds individual plans for each investor, and that has been the main reason his division has grown dramatically during the crisis.

“I think it’s partly a flight to quality in this whole concept of planning. We’re seeing a tremendous amount of growth and opportunity in traditional private banking. We’ve just added two new private bankers to Grand Rapids — two local folks that we’re very excited about — and we’re seeing great growth from them already,” said Traudt.

Compared to the vast region he covers, Traudt said his bank’s wealth management assets and the number of clients served are smaller here than in other cities, but only because Wells Fargo is relatively new to the local market.

“In many of these other locations, we’ve been there for a much longer period of time. From a pure growth rate, though, relative to markets that we’ve been in less than six years, our growth is near the top here,” he said.

And Traudt expects his wealth management division to prolong its upward climb here.

“We will continue to add resources as we feel the need. We have a team-based approach so we draw upon the expertise of local people. Depending on a client’s needs, we will bring in people from other parts of my region on certain specialty-type transactions.

“But the good news is the relationship team is here in Grand Rapids, so the client and who they deal with day-to-day are local.”

VanDine said Wells Fargo defines a small business as a company with annual revenue of less than $15 million, and Vice President Ben Vanderweide heads the bank’s local SBA loan division. But at the same time, VanDine said his division, which normally serves larger firms, has made loans to small businesses in the past.

“We have done at least a dozen loans to smaller companies because, within our division, like most of Wells Fargo, relationships come first. And with the people I have, they have an average of about 18 years of commercial-lending experience in Grand Rapids,” VanDine said.

“So where they have relationships, we’re going to go where those relationships are and do what it takes for those customers to make it. But it’s not our customary practice. Having said that, we do have a gentleman in town whose sole specialty is Small Business Administration loans, and (Vanderweide) is doing a very robust practice for us.”

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