Writer: Max Crampton-Thomas
2 min read April 2021 — Charlotte’s reputation for growth takes effort from the whole community. Wells Fargo – Charlotte works hard to contribute in meaningful and effective ways to Charlotte’s most pressing issues like affordable transit and housing. With an ongoing shift to digital services, the company positions itself for the post-pandemic landscape.
What were the milestones and highlights of Wells Fargo – Charlotte 2020?
The thing that most impressed me in 2020 was how our employees responded to the challenges brought on by the pandemic. Most of us stopped coming to the office in March and then we all realized just how impactful it was going to be to the economy. We were forced to figure out how to move most of our people to a work-from-home model, and operate our branches with minimal access. Our employees went through a transition where not only were they deemed essential workers to ensure that the financial system continued to operate, but they also had families and friends who they care about who were impacted in the COVID environment. Watching our employees work through the year and seeing what they accomplished made me proud to work for Wells Fargo. We were able to take care of our employees and our customers from the safety and security standpoints that were required. We reviewed information and options, and made decisions to ensure that our facilities were as safe as possible. Wells Fargo has approximately 5,000 retail branches located around the country, so it was imperative for us to move quickly and in a big manner.
We had a contingency plan in place, and then when the pandemic hit, it got tested. We were able to find out in real time how effective our planning was. Wells Fargo provided $225 million in philanthropic investments across the country through our foundation. Part of our efforts involved combining with Feeding America and their 200 member food banks to provide 82 million meals to families in-need. In Charlotte, we gave an additional $100,000 grant to Second Harvest Food Bank of Metrolina, allowing them to purchase 8,000 fresh produce boxes, which they delivered to counties in our region that have the highest rates of racial disparity among those living in poverty.
We all continue to grapple with the impact of COVID-19. Wells Fargo is honored to serve our customers, support our employees and continue providing philanthropic support focused on helping address food, shelter, small business and housing stability across the Charlotte region.
Can you speak to the significance of Wells Fargo’s digital first strategy?
We’ve been transitioning to a mobile-first approach in our traditional branches for quite some time. The pandemic created a perfect environment for us to enhance that focus. Our customers can complete a variety of transactions on their own, and that’s especially helpful as many are dealing with a lack of access created by the pandemic. We are focused on educating customers about our mobile options by showing them how their phone can be a powerful tool if they have any concerns about visiting a branch or ATM. In addition to giving customers more convenience, mobile banking is also a great way for customers to have better control of their day-to-day finances.
There are multiple ways for our customers to connect with us. They can continue to do business with us over the phone, through an ATM, or by visiting a traditional branch. We’ve been working hard on the platform of self-service tools that we provide–from mobile deposit, which we started offering several years ago, to today with the way payments are transferred and the ways our customers can check their balances, as well as new cybersecurity digital capabilities on their debit cards. We work closely with our customers to be sure they are aware of all of their options and what works best for them.
Our traditional branches continue to offer our customers the opportunity to connect with us and learn about what services we offer with a personal touch. Wells Fargo’s new digital-first branch concept – which we formerly called Express Centers – debuted in Charlotte last year. The Prosperity Church branch, which has received great feedback from customers and employees, allows us to test this new format as a complement to traditional branches. Prosperity Church is a non-traditional branch without teller lines. Bankers there do not handle cash, and are able to help with account openings, servicing, and referrals to specialist partners. These bankers are also skilled in empowering customers to access self-service tools on their mobile phones, via online banking, and to use our ATMs.
Customers will see our new digital-first approach expand into our traditional network. The format is an important step in exploring options and creating blueprints for the future to ensure our branch formats meet our customers’ financial needs.
What were major takeaways from the PPP loan experience?
First and foremost, we were happy to partner with the Treasury to be part of the Payment Protection Plan (PPP) and all the other stimulus efforts that came through with it. If you recall, the Treasury said ‘let’s do this,’ but then had to say, ‘let’s figure out how to do this.’ Overall, Wells Fargo funded loans under the PPP for more than 179,000 customers, with an average loan amount of $54,000, totaling $10.5 billion. Of the loans made, 84 percent of those were for companies that have fewer than 10 employees; 61 percent were for amounts of $25,000 or less; and 90 percent of these applicants had $2 million or less in annual revenue. The approved loans went to companies that have more than 1.3 million employees.
The PPP process helped us learn how to access small businesses better. It also helped small business owners learn more about our digital capabilities because our application process was completely online. We learned together how to build the process and how to make it work.
Wells Fargo put nearly 10 years-worth of loans out there to small businesses and we’re seeing the impact of that. Those loans kept many small businesses alive and we’ve got to ensure that we continue doing that because we all know that the employment base in small businesses is vitally important to the overall economy.
By donating approximately $400 million in processing fees to assist small businesses in need, Wells Fargo’s Open for Business Fund created opportunities for near-term access to capital and addressed the road ahead to meaningful economic recovery, especially for minority-owned businesses. Wells Fargo is committed to helping small businesses impacted by COVID-19 stay open and get back to growth.
We have also elevated the drive-through abilities and lobby activities in our branches with the socially distanced requirements of COVID. We opened the PPP application at Wells Fargo on January 19, along with other large financial institutions, and the first full day of the reopened program highlighted the significant needs of the small businesses we serve. Both the average requested loan size and the number of applicants seeking a second draw loan highlighted the importance of our continued support for these businesses.
What are your considerations for the commercial real estate lending side of the business?
As I mentioned earlier, most of Wells Fargo’s employees haven’t been in our offices since the pandemic hit, and we’re in the process of rethinking and reevaluating how we utilize our real estate space when things return to normal. We made loans to companies that are also learning lessons from the pandemic.
There’s the power of having your employees working from the same physical space and being together as a team. How do you balance that to be most effective and efficient with the capabilities you have? Those who believe in the power of having their teams together will need more real estate space, while those that best execute on a remote basis may not need as much space going forward. What we’re seeing is that companies are evolving and we will have an assortment of options in terms of how things can be executed. Workspaces are going to be changed going forward based on what we have learned about the COVID environment. From a risk management and cash flow perspective, that is going to give positives or negatives to a deal based on what a company’s individual needs are.
How have you made efforts to bolster Wells Fargo’s investment banking strategy?
We are the fourth biggest bank in the U.S. and we have been a consistently strong lender to the middle market. We’ve had an investment bank at Wells Fargo since our merger in 2009 with legacy Wachovia, and our view has always been that we can do more to serve our clients with these capabilities and we can do so in a manner that is careful, strategic and always measured from a risk and balance sheet perspective. Our strategy within our Corporate and Investment Banking business is to be the best in our chosen businesses and take advantage of our strengths, for example our debt capital markets, equity capital markets and asset backed finance capabilities as well as our leading position in key industries such as Energy & Power and commercial real estate. We understand the relationship we have with our clients is the cornerstone of our success, and we believe our investment bank can be an important partner by serving our clients. We are proud of our long standing client relationships in the U.S., and that includes here in Charlotte, home to a sizable portion of our investment banking business.
What are your main concerns for the city of Charlotte?
The economic mobility challenge in Charlotte is an on-going issue, and we continue to attack it. Affordable housing is one of the biggest components of Charlotte’s needs and Wells Fargo invested $20 million several years ago to help address it. Part of that effort included bringing our Neighborhood Lift program back to Charlotte. We invested $6 million through down payment assistance grants that go directly into individuals’ homes. The program has helped put more than 400 people in homes in Charlotte over the last two and a half years.
We also provided a $5 million equity grant to the Housing Opportunity Investment Fund to help match the City of Charlotte’s $50 million bond referendum. In addition, we’ve made more than $9 million in commitments to support local community development nonprofit organizations focused on addressing the issues of affordable housing, workforce development, small business development, financial empowerment and neighborhood revitalization in Charlotte.
All of the incredible growth taking place across the region has created displacement. We have seen effective solutions provided through mixed use—so it’s not affordable housing but affordable communities. People can live together and prosper. There is opportunity for Charlotte to enhance who we are and where we are going.
Transit provides another challenge. It’s great to put people into homes but if they can’t get to work, then we have a problem. Every community in America is challenged by issues related to infrastructure. Charlotte is building a plan over the next three years to make sure we’re competitive in addressing those issues.
The pandemic has caused us to pause and ask if parking decks are as important as they used to be? Are there other ways for people to commute back and forth into the city? We do have an effective light rail system and expansions that have been added to it. Renovation work is ongoing at Charlotte Douglas International Airport, which continues to be an economic driver for the entire region.
As we invest in infrastructure, it provides us an opportunity to help address affordable housing. We can make this an even better place to live and work. People see opportunity for growth in Charlotte and we have to work hard to support that and make sure economic mobility is a reality for everyone. There exists in Charlotte a public-private partnership that is unique. People and companies are putting their hands up and saying, “Here’s what I can do to help.” We need everyone to adopt an All In approach.
What are your goals and priorities for 2021?
Charlotte has been and will continue to play a big role in Wells Fargo’s plans. We are a substantial employer, lender and donor. We’re proud of the 27,000 employees we have here and we take pride in the fact that we have been very impactful in Charlotte from a philanthropic and volunteer standpoint. Wells Fargo is committed to remaining active and engaged in Charlotte.
We will also continue to bring people together through public-private partnerships. Unfortunately, challenges are growing so we have to ensure we’re doing the best we can to address them. We have all talked about things we need and want to do, but the pandemic has slowed much of that work down. The question is, how can we go about achieving our goals? Affordable housing offers a clear example. Our collective focus has to be on effective corporate, individual, and government collaboration.
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