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TAMPA - Wachovia is on a tear again, growing its deposits. But this time Ben Jenkins has a full head of hair.
Jenkins, 59, is head of general banking for the Charlotte, N.C., megabank that's the second biggest bank in Florida. He's in charge of the bank's 2,600 retail branches as well as commercial operations and corporate customer service.
In spring 2002, he shaved his head, making good on a promise to do so if the bank could grow deposits during two usually slow months. The shearing ceremony was broadcast live on the bank's in-house video network. At the time it was the company's highest-viewed telecast.
His wagering days are behind him now, Jenkins said during a recent visit to Tampa. But that didn't stop him from tossing out a new challenge to employees: Open 500,000 new checking accounts in 2004. "I think that number is achievable," he said.
Recent history backs him up. After opening 86,000 net new checking accounts in 2002, Wachovia set a goal to open 300,000 new accounts in 2003. Then, in a recent conference call with analysts, bank executives raised the 2003 goal to 400,000.
Altogether, Wachovia says it has 9-million residential customers and 900,000 business customers.
"In our third quarter, year over year, we've had (deposit) growth of about 22 percent," Jenkins said. "If you take our five biggest competitors and average them together, they're in the 11 to 12 to 13 percent range."
To fuel all those deposits, Wachovia plans to open 40 to 50 branches a year nationally over the next several years. "Florida will probably get more new offices than any other state," Jenkins said.
In the Tampa Bay area, four new branch locations have been announced and three more are pending.
All these plans for new branches, and the talk of adding new depositors one at a time, is a bit out-of-character for Wachovia.
It grew to the size it is almost entirely by acquisitions, much like its bigger crosstown rival in Charlotte, Bank of America.
For a while in the 1990s, Ed Crutchfield (head of Wachovia predecessor First Union) and Hugh McColl (head of Bank of America predecessor NationsBank) were keeping up with each other in acquisitions deal-for-deal. First Union alone made more than 100 acquisitions during Crutchfield's reign.
The two banks turned their hometown of Charlotte into a major hub of U.S. banking.
But McColl's NationsBank leapfrogged over all consumer banks with its landmark acquisition of BankAmerica in California in 1998, a deal that created the Bank of America. It cemented its status as the largest consumer bank in the country with a deal in October to buy FleetBoston Financial.
First Union's last big deal, the buyout of Wachovia of North Carolina in 2001, gave it a new name and made it the fifth largest bank in the country with $389-billion in assets.
Jenkins, whose 32-year history with the bank includes a stint running First Union's Florida operation in 1999 and 2000, said his boss, Ken Thompson, hasn't ruled out another merger of the "quality" of Wachovia. But he insists there is no pressure to make a big acquisition to match Bank of America's FleetBoston deal.
Jenkins said the bank can meet its goals the old-fashioned way, one branch opening at a time.
The openings are starting slowly, with as few as 10 expected this year. Jenkins acknowledges the bank's a bit rusty.
"We have not done a lot of branch expansions because we've been busy for the last dozen years with combinations, mergers and rationalizing," he said.
A few years ago, Wachovia predecessor First Union had a chilly relationship with Wall Street after a series of missed earnings estimates and the drain of its money-losing Money Store mortgage unit. The situation has been much improved by a major restructuring under Thompson, the closing of the Money Store and a smooth, slow integration of the old Wachovia and First Union.
Since July, four analysts have upgraded Wachovia's stock. According to Thomson/First Call, 13 analysts now recommend the stock as a "buy" or "strong buy" and nine have a "hold." There are no longer any sell ratings.
Chris Blum, bank analyst with Edward Jones & Co. in St. Louis who has a "buy" rating on Wachovia, gave the bank kudos for stability, strong management and a healthy market share in attractive states like Florida.
Lately, Wachovia's biggest problems have arisen outside Jenkins' direct supervision: the brokerage side. Wachovia's purchase of Prudential Securities last summer came right before a mutual fund scandal erupted, hurting the entire industry.
Massachusetts' top securities regulator, William Galvin, recently filed fraud charges against five former Prudential Securities brokers.
In the retail branches that Jenkins oversees, financial specialists urging customers to invest in mutual funds work next to the general bank's sales team trying to build deposits. Jenkins said the two competing elements work well together, but he acknowledges it takes a bit of work.
"If someone said to you, "No, it's not a problem, it happens just naturally,' you need to ask some more questions," he said.
Wachovia encourages brokers, the bank's wealth management group and sales staff in the branches to share leads, handing out personal notes of recognition and public praise in addition to financial incentives. "You make heroes out of those people who do hand off the right way," he said.
Looking ahead, Wachovia's toughest challenge probably lies in the changing economy.
The expected rise in interest rates will cut sharply into interest income that banks have grown to rely on the past couple of years.
It also will put a crimp on mortgage originations and refinancings. Wachovia expects to close the year originating between $26-billion and $28-billion in mortgage loans, Jenkins said. "Next year, we won't have the refis . . . and it'll probably be in the $16-billion to $17-billion range.
"But something else will grow to make up for it," he added. "I think our model is pretty sound that we can deal with the customer in most any kind of environment."
Richard Bove, a longtime bank analyst with Hoefer & Arnett in St. Petersburg, agrees that Wachovia is well-positioned for the economic shift.
Bove recommends that his clients drop 80 percent of their bank stocks, but not stocks such as Wachovia, Bank One and Bank of America. That's because those three are strong in industries that will do well as the economy improves: commercial and industrial loans, investment management and brokerage.
Yet Bove isn't entirely sold on the "new Wachovia." He thinks the bank's campaign to open a rash of branches is "ludicrous" since technology is giving customers less need to visit traditional branches for most transactions.
"Branches could be Burger Kings in the next couple of years," he said.
- Jeff Harrington can be reached at harrington@sptimes.com or 813 226-3407.
Benjamin P. Jenkins IIITitle: Head of the general bank, Wachovia Corp.
Duties: Oversees retail branches, commercial operations and corporate customer service
Age: 59
Education: bachelor's degree in textile chemistry, North Carolina State University; MBA, University of Alabama.
Career: Joined Wachovia predecessor First Union in 1971; president of First Union's Florida operation in 1999-2000; other posts include running First Union's state operations in Georgia, South Carolina, Virginia, Maryland and Washington, D.C., and head of First Union's mid Atlantic region; in current position since 1999.