A: The one big thing that remains is the system conversions and the branch conversions in the eastern part of the company.
The way we rolled this out ... we started with the West Coast branches Wachovia had. Then we moved to the states where there was overlap between Wells and Wachovia, and now we’re entering the third and final phase, which is the standalone branch market [conversion]. This is the most important part of the conversion, and it is going extremely well.
Q: Is it on schedule?
A: Everything is on schedule, and everything is coming in at lower cost than we thought. When we announced the deal at the end of 2008, we thought we’d need to spend about $8 billion on systems conversions and severance. It now looks like that number will be shy of $6 billion.
Q: Wells Fargo is hiring?
A: We have roughly 7,000 employees and 300 stores [branches and other retail banking centers] in Georgia. We’re looking to hire. And the interesting thing about Wells is that we’ve never stopped hiring salespeople in the company. The simple logic is salespeople equal revenue. You hire more salespeople, and you keep them productive, they bring in more business.
Q: Are we moving to a double-dip recession?
A: We don’t really see a double dip. The way I would characterize the economy is that we’re in the midst of the recovery, but it’s very uneven. It’s uneven from one quarter to the next, and it’s also uneven in different parts of the United States. Certain parts of the country are beginning to improve -- Atlanta, for instance.
Q: Are more people coming to Wells Fargo for mortgage modifications, or is it lessening?
A: It hasn’t lessened. Wells is the second-largest mortgage servicer in the country -- one out of every six mortgages is serviced by Wells Fargo. We always have had a process in place for trying to get to homeowners before they have a problem, to modify mortgages, way before the economic crisis occurred.
The practice of modifying mortgages has not been a new practice to Wells Fargo. When the crisis hit, we stepped up that process. Then the government came in with HAMP [Home Affordable Modification Program] and other programs, which we’ve also been very active in.
So far, we’ve modified more than a half million mortgages in the last six quarters.
Q: Have the federal government programs helped?
A: We think our program has helped. I’m not sure about the [Home Affordable Modification Program]. These things are helping. There are lots of homeowners out there that are stressed and need help with their mortgages. In the right situations, we’re here to help them. On the other hand, if you don’t have a job and no prospects and you’re way over your head, there’s only so much [banks] can do.
Q: How does [lending] compare to pre-recession?
A: Demand is not as strong overall compared to pre-recession. But my point is we never stopped lending money, and if anything, we’re accelerating our lending, particularly to business.
Three and a half billion dollars [in Georgia] since the first of the year. Again, that may not be reflective of economic growth as much as it is doing the right thing for customers and taking some market share.
Atkins on why mortgage modifications have helped Wells Fargo recoup expected losses from the merger:
"We’ve been the most active bank in the country in modifying residential mortgages for homeowners ... . We are actively modifying the interest rates or in some cases forgiving some of the principal and in any case helping them stay in their homes, and that’s having the benefit of improving the losses in [the former Wachovia] portfolio.”