As soon as you sit down to talk with Laura Schulte, you know Wells Fargo has installed someone who is fully comfortable in leading and shaping its newest acquisition, Wachovia Corporation. She’s done similar duty, more than once.She took the job soon after the Wells Fargo-Wachovia merger was completed January 1, but she just moved her family from Los Angeles to Charlotte in July.
She had been running the Wells Fargo western region.
Now, Schulte is president of Community Banking in the Eastern Region, which is the Wachovia footprint. Operating from Charlotte, she’s in charge of the branches—or stores in Wells Fargo parlance—in Alabama, Connecticut, Delaware, Florida, Georgia, Maryland, Mississippi, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Virginia and Washington, D.C.
When she and other executives learned last fall that Wells Fargo would be buying the mortgage-troubled Wachovia, Schulte was “very excited,” she says. “We have actually always admired Wachovia,” she adds.
Schulte acknowledges her San Francisco-based employer has let go more than 500 Wachovia workers in the Charlotte area, but points out Wachovia still has about 19,000 employees here, including 10,000 at the Customer Information Center (CIC) on the bank’s University City campus.
“All the work they do has to get done,” she says of the CIC workers, whom she calls team members. “I don’t see a lot of changes there.”
She also points out that a mortgage servicing center in Fort Mill is hiring and many of those new team members live in Charlotte.
Out her 40th floor office window looms the nearly completed 48-story tower that was meant to bear the Wachovia name. It will be called the Duke Energy Center, instead.
Schulte acknowledges the symbolism, but calls Charlotte the eastern “hub-quarters” for Wells Fargo. It will retain that designation permanently, she adds.
“Charlotte is the most important city on the East Coast,” she says matter-of-factly. “That’s why I moved here. My move was very purposeful. I need to live in Charlotte so I can understand what is special and important here.”
Biggest adjustment: Traffic (the relative lack of it). “Interestingly, I’m always early,” she says of her appointments in Charlotte. “Having lived in Los Angeles and even Las Vegas, people here talk about traffic, but when you’re from a large urban area, it’s really incredible to get around Charlotte.”
But she’s got much more than traffic on her mind. She’s in charge of bringing Wachovia into the Wells Fargo fold. And she’s got long experience at it, to go with a 26-year career of learning the way of Wells Fargo and predecessors.
While growing up in Omaha, where she attended high school with Warren Buffet’s youngest son, Schulte took a part-time job with Wells Fargo predecessor Norwest. After she graduated from the University of Nebraska with an accounting degree, she returned to Norwest as an auditor, then moved into finance. Soon, she gravitated to mergers and acquisitions, using her accounting skills in due diligence on buyout prospects.
In 1996, she moved from Norwest headquarters in Minneapolis to take charge of community banking activities in Northern Nevada where the firm had made a couple of acquisitions. Two years later, Norwest bought Wells Fargo and kept its name and the headquarters.
“I was right in the middle of that,” she says.
Through that and a subsequent acquisition of Salt Lake City-based First Security, Schulte wound up as president of Western Division that includes California, Oregon, Washington, Idaho and Alaska and more than 1,300 stores.
Now her Eastern Seaboard territory has more than 2,800 stores and in excess of 4,600 automatic teller machines.
Schulte, 50, knows and appreciates that the Wachovia brand is strong and respected. A priority, she says, is not losing any of that.
“We like to keep as many people from the legacy organization as possible,” she says, “because those are the people who know the communities and know the customers.
“The customers tell us our service is outstanding,” she continues. “Wachovia has a very loyal customer following. The companies are very similar in that we are very community bank-oriented.”
When pressed, she easily explains what the term “community bank” means to Wells Fargo. “It is understanding the needs of the community, the types of businesses that exist in that community,” she says.
She feels Wachovia can improve its store staffing. There are plenty of transaction people, tellers and such. But the stores are light on service people who can offer business and personal financial advice.
“We want to make sure we have enough people in each store that we can sit down and have conversations with customers, and understand what their financial needs are, what their aspirations are, what their goals are,” Schulte says. “Right now, I think we’re fairly lean in that.”
That means bringing more people on board, she says, adding that Wells Fargo sees new hires as an investment. “And they provide a return,” she says, “by helping the customer, providing solutions and adding revenues to the business.”
In five years, she says, head count in the legacy Wachovia footprint will be higher than today. And though there won’t be a lot of expansion in the East, Schulte expects to see a couple dozen new stores open in her territory this year.
Working in Tandem
Still, there are those immediate adjustments to get through. Most of the job eliminations so far have come in centralized functions such as corporate marketing and corporate human resources.
Some critics have charged Wells Fargo is not moving fast enough with consolidation, leaving too many people in job limbo. Schulte takes issue, saying she and her compatriots have quickly communicated job reduction initiatives.
“There are probably some instances where we are still analyzing and trying to make thoughtful decisions,” she says. “I’m not sure if I were in the position some of these people are in, it would be fast enough for me. But we want to make sure we make decisions that are in the best interests of the company. So it’s going slower than some mergers. It took us three years to get the Wells Fargo-Norwest merger done, and we actually have about that kind of timeframe here.”
She advises people to try not to worry. “Work on contributing your best every day,” she says. “Take care of your customers and each other. And be flexible.”
Wells Fargo operates a program it calls “Retain and Retrain,” in which team members who lose their jobs can elect to enter an employment pool. The bank looks there first when hiring for other positions.
Though Schulte will travel a great deal, and though she has legacy Wachovia executive Kendall Alley moving from Atlanta to be the regional face here, she still plans to be involved strongly in Charlotte.
She’d never been to the Queen City before the merger, but likes its urban feel with an authentic, friendly atmosphere. Because she was commuting, she missed the Quail Hollow Championship, a popular stop on the PGA tour that bore Wachovia’s name until this year.
“It’s a very good event for Charlotte,” she says. “It was a customer event. And a large portion of the money went to charity—Teach for America.”
Already, she’s working with leaders of the United Way of Central Carolinas and the Arts & Science Council to address funding that has dropped precipitously. Further, she’s joined the board of Charlotte Center City Partners (CCCP) and will serve on its executive committee.
“Charlotte is redefining itself on many different levels,” says Michael Smith, CCCP’s president and chief executive. “Laura Schulte will bring unique experiences and perspectives. We look forward to Laura’s contributions as we chart our course for the coming decade.”
She’s impressed Jennifer Roberts, chair of the Mecklenburg Board of County Commissioners. “It’s wonderful to see new leaders like Laura Schulte stepping into a strong community role so quickly,” Roberts says. “It’s clear she understands the connections that companies have with human service needs, and she brings a strong personal commitment to improving her community.”
For much of that commitment, Schulte credits her mentor of almost 20 years, Carrie Tolstedt, who runs the Wells Fargo Community Banking nationwide from her San Francisco base.
“She and I were together as colleagues and now she is my boss,” Schulte says of Tolstedt. “She has definitely taught me the link between the engagement of a team member and the health of the company.”
At some point, the Wachovia name will fade and the blue and green colors will change to the red and gold of the Wells Fargo stagecoach. But that will be only after Wachovia customers can do business in Wells Fargo stores. It won’t happen this year, but it will by the end of 2010.
That might coincide with the end of the recession, by Schulte’s reckoning. While Charlotte has been impacted by the banking industry’s struggles, most areas are suffering from oversupply of residential real estate. That includes Florida and the Atlanta area on the East Coast and California and Arizona in the West.
Meanwhile, the bank is “open for business” in Charlotte, Schulte says. “We are absolutely making loans,” she adds. “It’s difficult because a lot of borrowers are not borrowing. They’re using cash reserves; they’re hunkering down.”
She sees challenge in changing the mindset. “Our ratio of approved loans to closed loans is much lower than it’s been in the past,” she explains. “It’s not that we’re having as much of a problem approving credit, but customers are having second thoughts.”
Then there’s the other kind of prospective borrower, the bad risk. “We have a responsibility not to lend if it’s not in the best interest of borrowers,” Schulte says. “And that’s part of what got the country in trouble, lending to people who did not have the ability to repay.”
Meanwhile, Wells Fargo still has the $25 billion it got in the Troubled Asset Relief Program.
“We’re paying healthy dividends to the government,” Schulte says. “It’s a good investment for the taxpayer.”
Schulte’s husband Mike is also with Wells Fargo; he’s a 22-year veteran who works in the private bank. Their son Jack, 12, will enter Charlotte Country Day School this fall. They’re living uptown but looking for a house in south Charlotte.
Schulte leaves a last message for the Charlotte business community.
“It is in our best interest for you to succeed,” she says. “Small-to-medium-sized businesses are the backbone of any community. We understand that and we want to be there for you. We want to help you grow.
“That’s really the business we’re in,” she concludes.