When Wells Fargo acquired Wachovia Bank in October 2008, the acquisition of the troubled bank essentially doubled the size of Wells Fargo, a major undertaking in an era of change and stress in the banking industry.

Wachovia was and is still number one in local deposits market share in the 13-county Savannah area, so Wells Fargo’s plans for the local market are of vital interest.

Wells Fargo has moved slowly and carefully in making changes, according to Darryl Harmon, named Regional President for Wells Fargo’s Southeast Region in January 2009, responsible for Mississippi, Alabama, Georgia and Florida operations. He was previously based in California, and is now operating the Southeast region out of Atlanta.

A close look at Savannah’s economy and banking landscape has led Wells Fargo to conclude beefing up here is a good idea.

That may seem puzzling in light of Georgia’s newly acquired distinction as the national leader in bank failures. But Savannah’s upside is too appealing to pass up, said Harmon.

“The economy here in Savannah might not be as strong as you’d like. But what we’re seeing is that when you look at the entire four-state market (for the Southeast region), this market has held up pretty well,” he said.

In the Savannah market, the Wachovia brand name is still in use, though a number of Wells Fargo products have already been added to serve customers, according to Harmon and Savannah City President, Jenny Gentry. The Wells Fargo brand name conversion will begin later this year, however, and will be completed in 2011.

Harmon was in town last week for the 15th Annual Southeastern Bank Management and Directors Conference, and sat down with SavannahBusinessJournal.com to discuss the merger.

Wells Fargo has no plans to close any of the 14 Wachovia branches, and in fact, may open more branches, and they will be hiring between 25 and 30 employees over the next year for the community banking division. Wells Fargo company will also be expanding other Wells Fargo divisions in the region, including insurance and mortgage divisions, and Wells Fargo Securities Advisors.

According to Gentry and Harmon, 15 new retail bankers will be hired this year, plus two to three personal bankers a month. And, Wells Fargo will maintain its 2008 and 2009 levels of financial support to non-profit organizations in 2010.

Wells Fargo’s payroll products, bank merchant accounts and its credit card system will be added during 2010, as well. New ATM’s are already coming into the region, which offer check scanning and an 8 p.m. daily banking close.

As to Wells Fargo’s philosophy in helping customers with home mortgages, nearly half a million Wells Fargo loan customers were provided with mortgage payment relief through active trial and completed loan modifications in 2009, and the bank wrote $711 billion in loans and lines of credit to help get the economy going again.

But, “banks are underwriting more prudently,” said Harmon. “We’re going to do what’s prudent to run a good bank.”

Locally, said Gentry, “we were not a big ‘A & D’ lender (acquisition and development) to neighborhood developers,” so the Savannah Wachovia division does not have the commercial real estate exposure locally that many Savannah community banks are now dealing with.

Wells Fargo/Wachovia’s commercial real estate lending is headquartered out of Jacksoville, Fl., she explained.

In 2009, Wells Fargo introduced a home mortgage conference program in the Atlanta area called “Leading the Way Home,” to help its customers with problem home mortgages, which has been very successful, said Harmon. He plans to expand the program in the Southeast.

“We worked with people on-site, at the events,” he said, adding that Wells Fargo now has 4,000 employees nationally working on home mortgages with its customers.

“What differentiates us,” Harmon said, “is a business model that is very community based, and relationship oriented. Wachovia had a similar model,” aiding the merger process, and helping the very large bank feel smaller and close to its customers at the local level. In fact, Wachovia was frequently rated as the number one bank in customer service, nationally.

While a big player nationally with 11 percent of the nation’s banking deposits and the market leader locally with 16 percent of Chatham County’s deposits, Wells Fargo’s roots are in small business and home lending, Harmon emphasized. He cited the 1998 acquisition of Wells Fargo by Minneapolis-based Norwest Bank.

“That was a bank very much in tune to small business, very much in tune with consumers, very much in tune with mortgage,” he said.

“We were not a Wall Street bank. Nor were we taking a lot of the risks that a lot of the Wall Street banks were taking.

2009 Financial Results

Wells Fargo & Company released its fourth quarter and annual results recently, reporting record revenue and strong net income of $12.3 billion for 2009.

Fourth quarter revenue was $2.8 billion, a four percent increase (annualized) from third quarter 2009, after pre-tax $500 million credit reserve build and $861 million of merger-related and incremental expenses.

The banking company completed a full repayment of its TARP preferred stock in December 2009, paying back $25 billion to the Federal government.

“The Wells Fargo model has been built to outperform our peers over time and through cycles. Clearly we have done just that again in 2009 and believe that this very same model and execution discipline will continue to outperform the industry in the years and cycles ahead,”said Chairman and CEO John Stumpf.

The merger with Wachovia essentially doubled the size of the company, and “has already generated tremendous synergies as we expand the time-tested Wells Fargo model to more customers and team members over a broader geography, including additional businesses that help customers succeed financially,” said Stumpf.

Growth in net charge-offs declined significantly in the quarter, and almost all major loan categories had relatively flat to declining losses, with the exception of commercial real estate, he said.

Editor's Note:  Ted Carter contributed to this story.