Wells Fargo revives the Phila. bank lender

Seventeen years after its predecessor bought the last big Philadelphia bank, Wells Fargo & Co. remains the dominant bank in the region, with $22 billion in deposits in the five-county region, $10 billion or more ahead of rivals Citizens, PNC and TD.

But its branch network is down nearly half, to 153 offices, from 290 back in 1998, as more customers go online. After waves of automation and consolidation, Wells Fargo employment here is down, too -- to around 5,000 across the Philadelphia area, from 15,000 after it bought CoreStates Financial. Market share has slipped to 22% of Philadelphia-area branch deposits, from 37% in 1998, according to FDIC data, though that's partly a result of big banks shifting business and online accounts around the country. 

One element that hasn't been replaced is Susanne Svizeny, who has logged nearly 35 years (starting at the former New JerseyNational Bank) at what is now Wells Fargo's East Coast hub, where she serves as Executive Vice President in charge of business lending in Pennsylvania, South Jersey, Delaware, upstate New York, Montreal and Toronto -- "Conshohocken to Canada," as she says

Svizeny says Wells Fargo, which took over First Union (then known as Wachovia Corp.) during the financial collapse of 2008, has reinstated here what was once a staple of high-end Philadelphia banking: a months-long training program in commmecial-lending management, once a foundation and finishing school for graduates of the region's best colleges en route to wide-ranging careers as corporate lenders, advisors and top bosses at the now-vanished Philadelphia banks.

In-house training was less prominent under former executives like Kennedy Thompson, the last CEO of First Union/Wachovia Corp., the bank that bought CoreStates. According to another veteran Philadelphia banker, Thompson once told a roomful of CoreStates veterans that First Union could replace them all, and customers wouldn't much notice, because people had become interchangeable. If that's how you see the world, it might not make a lot of sense to pour energy into training, because trainees are likely to end up taking your investment  someplace else.

But Wells Fargo, which took over Wachovia to save it from collapsing in 2009, sees the value in growing its own, according to Svizeny. "What's neat about (Wells Fargo) is the understanding that you have to train the next generation," the College of New Jersey (corrected) graduate told me. "It's my job to find appropriate talent. We bring in sophomore and juinor (university) interns and MBA interns. If we like them we make an offer. If you want diversity, you start early."

This summer four interns are training in Philadelphia, in an eight-week leg of a four-and-a-half-month program. There are finance majors --and arts and sciences specialists: Like rival PNC Bank's Philadelphia boss, Paula Fryland, Svizeny says Wells Fargo wants a mix of humanities and business grads as rising managers.

"It's about having good solid understanding and background," rather than being ready to deliver instant financial proficiency from the day of hire, Svizeny said. "We can teach our trainees finance and banking. That's what we do."

The training program includes stints at Wells Fargo' main offices, San Francisco or Charlotte, N.C. "They meet everyone in senior management," Svizeny told me. "They learn the culture. The do case studies. They have practice in the field, and the educational compoent. It's an expensive investment. It pays dividends," as trainees develop into "really good bankers."

Sounds old-time? "The model hasn't changed," Svizeny says. "A lot of banks did change things to be more efficient. Wells believes you need to understand relationships. Bankers calling on companies need to have credit accountability. You can't divide the functions."

Wells Fargo says it's the nation's largest agricultural and food-industry lender, among its other specialities. Svizeny's fellow lenders need to understand commodity-price volatility, production cycles, business risks.

One "global banking team," including "legacy" bankers who trained in Philadelphia National Bank days (a CoreStates predecessor), is based at the old Fidelity Bank headquarters, 123 S. Broad St., and focuses on U.S. subsidiaries of foreign companies. It links to the Wells Fargo trade finance offices in Hong Kong and Singapore, which also date to PNB. Wells Fargo's top European lender, Mike Schmitlein, came up under the PNB system.

Business students (who have maybe read Michael Lewis' books) tend to gravitate toward investment banking, in hopes of making fat fees on big deals. "They don't think of commercial banking so much," says Svizeny. "But as commercial bankers we work side-by-side with investment banks. It's creative, putting together a capital structure. We've aligned our investment bank with our middle-market businesses. So our commercial bankers are not fighting for resources against the Unisys (investment) banker or the Shell Oil bankers." Instead, "I have my own investment bankers calling with my (commercial lenders) side by side, asking, what is the (client) CEO thinking about? Do they want to expand? Do they want to pay a dividend? Do they want to be sold?"

Who's borrowing, these days? "Money is still inexpensive. Companies have gained a lot of efficiencies. They are looking for acquisitions internationally. We are well poised to help them."

With Fed interest rates finally poised to rise, "we know we are not going to live in this low-interest-rate environment forever. " Which is good for business: "There' s a rush" to borrow before rates rise. "There is a surge to buy new equipment. Business owners understand the Fed's signals that something will happen. My gut is that a lot of this will get factored into the long rates. We will see the terms creep up. But our business sector is still healthy. It has the capacity to absorb a little bit of increase." Diversified markets like Philadelphia might not grow as fast as energy or tech centers. But that "makes for stability."

There are a lot of lenders searching for borrowers. BB&T's planned purchase of Susquehanna Bank brings another multibillion-dollar bank into the Northeast. "Competition keeps us sharp," Svizeny says. That's why "we are always investing in people and talents. The business owner wants to invest with someone who will add value. If we add value, they are not going to switch banks as quickly, over a small change in pricing or a new entry to the market."

The idea, as usual for big banks, is to balance loan income with fee income, protecting against market and credit cycles; and to find which team drawn from Wells Fargo's speciality groups -- asset-based, commercial, investment bankers -- can work best with which client.

Obvious, no? "But I worked in different structures where that's not how things went," Svizeny says. "What I love about Wells Fargo is that the bank has handled these cycles in the past," successfully, Svizeny concluded. The bank "has the longterm view." (Revised)