Wells Fargo CEO sees upside in Atlanta market

A: We believe it will take us three years to complete the merger so it will look like one company....  There are five states where Wells Fargo has business and Wachovia has business – Colorado, Texas, Arizona, Nevada and California. Those are the states we are going to do first, because that’s where the most of the confusion is for our customers.

Q: So will Georgia be converted toward the back end of that three-year timetable?

A: We’ve not figured that out yet. All we know is the overlapping states comes first. Then we'll start doing it across the east. We will give plenty of notice before we get that done.

Q: Wachovia is a very well-known brand around here. Wells Fargo is less-known. How do you go about building brand awareness?

A: I think that while brand is important, frankly most important are people -- and how we serve our community, how we serve our customers, how we take care of each other

Q: A lot of banks operate here. Chase is also moving into the Atlanta market aggressively. Is there a fear that with the change-over you might lose some business?

A: We have been very happy with the business that’s going on. We’ve actually been not only holding share but gaining share in many of our markets. Again, this says more to what’s happening locally than any decision I’ve been making in San Francisco.

What I’ve found is the kind of banking we do, we are not Wall Street, we’re Main Street. We’re meat and potatoes. We start with the customer. And what’s good for the customer, that’s my primary motivation. And what customers want is someone who knows them, understands them and rewards them. And when you start with that premise, good things will happen over the long term.

Q: What do you see in Atlanta that those of us living and working here might not?

A: I spent a fair amount of time here [20-25] years ago when I was financing a company that was building Spaghetti Junction. And I am certainly complimentary of what this community has done over the 25-year period. You are a leader in many payment services businesses, you are a leader in networking and communications distribution.

So as tough as things are right now, Atlanta’s got to feel very good about its future. The quality of the work force, the diversity of the work force, the can-do attitude, the entrepreneurial spirit, the location. As I look around the country and I come here, you’ve got to get pretty excited. Now are there going to be some tough times between now and then? Absolutely. [There’s] too much unemployment. Housing has taken a bigger hit than we’ve seen in other places. There’s too much inventory.

Q: Wells Fargo emerged from the financial crisis in relatively strong shape – strong enough to acquire Wachovia. What did Wells Fargo do right to be in such a position, and what lessons have you taken away from the crisis going forward?

A: One of the core elements of [Wells Fargo]’s culture was a conservative balance sheet. I can’t tell you that we were so smart to see what happens that we could predict what happened to the housing market. But the reason we didn’t get hurt as badly – and we didn’t do everything perfectly, but we held to our credit culture well -- is that certain products didn’t’ make sense to us because it didn’t make sense for our customers.

I’ll give you an example. Why didn’t we do option ARM [mortgages]? We were the biggest mortgage company in the country in 2003, and the option-ARM was popular. And we said for a family to potentially owe more on their home mortgage than what they start with made no sense to us. So we didn’t do that.

Q: This region has been hard hit by home foreclosures. What is Wells doing to help people out?

A: So far this year, we’ve modified over 400,000 mortgages. We’re doing about 2,000 modifications a day…. We are now considering people for modifications that are current in their mortgages. And you don’t have to be past due to start that discussion.. . . The best way to deal with this mortgage problem is more jobs. Jobs are the key. And, in fact, jobs should be job one in Washington.

Q: Some business and individuals say it’s become very difficult to get a loan. What’s the lending environment at Wells-Wachovia?

A: I hear the same thing. I hear lots of anecdotal stories about the banks aren’t lending, and credit is not available. I will tell you this. The biggest challenge to our industry in the next couple of years, including this bank, is not enough earning assets. We need more loans. In fact this month were hiring 200 more bankers, to put more feet on the street to help serve customers. We make money when we make loans. I want to make all the loans we can possibly can make. . . .Here in Atlanta in the last two months we’ve seen more commercial loan activity than we’ve seen from January to September. Loans as small as $100,000 to a non-profit, to a $300,000 loan to a restaurant, to an $8 million loan for a software company. So we have our teams (and) as I said, the troops are marching double time to try to find loans.