It’s been a rough year for Wells Fargo & Co., but the bank is still managing to grow in Connecticut.
Earlier this month, the San Francisco-based bank extended its executive advisor program to Connecticut with the hiring of John Ritacco to cover Middle Market Banking for greater New York, which includes Connecticut. The advisor program began in Boston in 2013 and has been extended to other Northeast locations including New Jersey and Philadelphia.
The program uses local banking veterans to make connections for Wells Fargo, which has offices in 42 countries, said Kevin Burke, a Guilford resident who is regional vice president of Middle Market Banking for Connecticut and greater New York. Ritacco is a 30-year veteran of New England and New York area banking, according to the Dec. 2 press release that announced his appointment.
“We are leveraging folks with a lot of expertise to help our position in the market,” Burke said in a recent phone interview. “It’s really about increasing our brand recognition.”
Market research played a role in extending the advisors program to Connecticut, said John Manning, head of Wells Fargo Middle Market Banking, East Region.
“By bringing strong, strategic advisors into these growth markets, we gain additional insight through the lens of our industry veterans,” he said. “Our customers benefit from the seasoned business acumen of these incredibly talented local business leaders.”
Having well-respected familiar faces to reassure customers amid scandals is an added benefit, market observers say. For the past 10 years Ritacco was president and CEO of White Plains, New York-based CMS Bancorp prior to its acquisition by Putnam County Savings Bank, another New York-based institution, earlier this year.
A national scandal over Wells Fargo’s sales tactics lead to Congressional grilling and the resignation of Chairman and CEO John Stumpf on Oct. 12. President and Chief Operating Officer Timothy Sloan took over from Stumpf, vowing to repair confidence.
“We know that it will take time and a lot of hard work to earn back our reputation, but I am confident because of the incredible caliber of our team members,” Sloan said in the company’s third-quarter earnings release, issued two days after Stumpf’s resignation. “We will work tirelessly to build a stronger and better Wells Fargo for generations to come.”
The scandal’s storm clouds have not completely dissipated in Connecticut yet. Attorney General George Jepsen has “substantial concerns” about possible unauthorized opening of accounts for Connecticut residents and an investigation is being conducted, said Jaclyn Falowski, spokeswoman for Jepsen. The investigation started at the time that the scandal broke nationally earlier this year, she said.
“Our office has been in contact with Wells Fargo related to this matter, and while this investigation is pending, we would decline any further comment at this time,” she wrote in an email.
The Connecticut Department of Banking hasn’t received any consumer complaints about unauthorized opening accounts pertaining to the scandal, spokesman Matthew Smith said.
Officially entering Connecticut in 2008 with its takeover of North Carolina-based Wachovia during the financial crisis, Wells Fargo is Connecticut’s fourth largest bank, controlling 6.95 percent of the market, according to Smith. It has been a member of the Connecticut Bankers Association since its acquisition of Wachovia, said Lindsey Pinkham, president and CEO of the Farmington-based association. The group doesn’t have any Wells Fargo employees on its executive committee.
Wells Fargo traces its Connecticut lineage back to the 1850 founding of Waterbury Savings Bank as the well as the 1862 founding of the Savings Bank of Ansonia and the 1868 founding of Union and New Haven Trust Co. These banks and others merged with First Union Corp., which became Wachovia in 2001.
Wells Fargo has 71 community banking offices in Connecticut, 102 ATMs, 19 Wells Fargo Advisors branches, and five mortgage offices, a company fact sheet states. Its Connecticut workforce totals 1,524.
The Middle Market Banking division has 13 employees working out of offices in Hartford and Shelton. Two employees are to be added to the team next year, Burke said.
Personal diplomacy was key to reassuring Connecticut customers in the wake of the scandal and Stumpf’s resignation, Burke said.
“There were certainly questions about it,” he said. “We explained the steps we took in how we worked through the problems. While there was some general disappointment, folks appreciated our candor.”
Wells Fargo took another hit this week when the Federal Reserve Board and Federal Deposit Insurance Corp. declined to endorse the bank’s prospective bankruptcy plan, known as a “living will,” as required under the Dodd/Frank law. Wells Fargo must submit a new plan by March 31. Until then the company is barred from setting up new international banking businesses or buying any nonbank businesses including wealth advisory firms. Burke declined to say what impact this might have on Wells Fargo’s Connecticut operations, referring to the company’s press release that was issued this week.
“While we are disappointed with the determination issued by the agencies, we continue to be dedicated to sound resolution planning and preparedness,” Wells Fargo said in its Dec. 13 statement. “We believe we will be able to address the concerns raised today in the March 2017 revised submission.”
The Connecticut segment of the company’s Middle Marketing Banking, which covers firms with $20 million to $500 million in annual sales, has been growing by low double-digit percentages in recent years, Burke said. Ritacco’s appointment and the addition of the two new staff members will help that trend continue.
“We are continuing our ability to grow,” Burke said.
With 140 offices in 38 states and four Canadian provinces, Middle Market Banking is part of Wells Fargo’s Wholesale Banking unit. Wholesale Banking net income rose 6 percent to $2 billion in the third quarter compared with the year-ago quarter but was down 1 percent compared with the second quarter, Wells Fargo reported. Revenue was up 13 percent to $7.1 billion compared to the year-earlier period but down 2 percent compared to the second quarter.
Overall, Wells Fargo, which has $1.9 trillion in assets, posted net income of $5.6 billion for the latest quarter, down from $5.8 billion a year earlier. Revenue rose 2 percent to $22.3 billion, the company said.