AP NEWS

Flagstar ready to take over

November 25, 2018

When local Wells Fargo customers opened checking and savings accounts, they didn’t expect the company : one of the nation’s largest lenders : would someday sell their business to a mid-sized Michigan bank.

But that’s what was announced in June as the scandal-plagued San Francisco-based bank executes a plan to reduce its retail bank branches to about 5,000 by the end of 2020. At one point, Wells Fargo led the nation with more than 6,300 locations.

Troy-based Flagstar Bancorp will take possession of 11 local branches Friday afternoon. The deal includes 52 total Wells Fargo locations : 33 in Indiana, 14 in Michigan’s Upper Peninsula, four in Wisconsin and one in Ohio : and almost 500 employees, who have all been offered jobs with Flagstar.

Wells Fargo is selling more than buildings. The transaction includes 130 million in loans. Wells Fargo held onto its commercial lending, wealth management, retail brokerage and home mortgage relationships in those markets, where it will have offices.

Former Wells Fargo account customers automatically become customers of Flagstar, which will use several strategies to woo them to embrace a new bank. That includes creating some account offerings that mimic those available at Wells.

“We wanted to have as little disruption as possible for the Wells Fargo customers,” said Todd McLaughlin, Flagstar’s senior vice president and director of branch banking.

Assuming Flagstar can retain the 51,000 new account holders, it will more than double its customer base.

Returning to local market

Flagstar is returning to the Fort Wayne market less than a decade after it left.

The company opened full-service branches in two local Walmart stores in 2000. It closed those in 2009, citing costs of doing business, including paying rent to Walmart.

In 2011, Flagstar sold its 22 Indiana retail branches to Cincinnati-based First Financial Bank. The locations, which included Angola and Warsaw, were primarily in Indianapolis.

Bank officials said those closures should be seen in the context of the Great Recession, an extremely challenging time for mortgage lenders.

“We chose to retrench and get healthy and solid again,” McLaughlin said, adding that the bank focused on its mortgage business.

Flagstar makes home loans nationally and services nearly 500,000 mortgages. Officials describe the financial institution as big enough to offer products and services found at a large bank but small enough to offer personalized service.

In the case of the former Wells Fargo customers, personalization will include accounts created to offer the same features and benefits they’ve become used to.

“We’ve put a lot of work into the services that we offer, making sure customers don’t see a reduction in the accounts being offered,” McLaughlin said. “So you won’t need to get a whole different kind of account to what you had.”

Those accounts won’t be available to Flagstar customers outside the newly acquired markets, however.

Flagstar is also launching a more robust website to provide former Wells customers with a similar online experience. Existing Flagstar customers will be transitioned to the new site at the beginning of next year.

Working to retain loyal customers

Attracting : and retaining : customers is a tricky business.

Wells Fargo has been reeling from numerous scandals that include employees opening credit card and other accounts for customers without customers’ knowledge so the employees could meet aggressive sales quotas.

But local customers have remained loyal.

As of June 30, more than 4 in an Allen County bank : or 30 million less than the total recorded for June 30, 2017, and the most of any bank in the local market.

Flagstar’s strategy to hold onto its new customers includes offering jobs to all the branch employees that were part of the deal, including about 120 local people.

“Customers bank with the people who work in those branches,” McLaughlin said, adding that the same staff will greet account holders on the Monday morning after the transition is complete.

Although commercial lending, investment, credit card and mortgage services weren’t part of the acquisition from Wells Fargo, Flagstar offers those services and will make them available to interested local customers.

Transitioning to new debit cards

Flagstar workers will have a packed weekend schedule.

After branches close at 3 p.m. Friday, they will remove all Wells Fargo signs and switch out equipment, computer systems, ATMs, deposit slips and interior and exterior signs.

More than 70 Michigan-based Flagstar employees are traveling to the new branches to provide support the first three to eight days, McLaughlin said. Fort Wayne will become the bank’s largest concentration of branches in one market.

Wells Fargo-issued debit cards will be active until midnight Friday. Beginning Saturday, customers must use Flagstar debit cards, which have already been mailed to account holders. Officials recommend that customers call now to activate the new cards.

ATMs at the branches won’t be available until Dec. 3, but Flagstar debit cards are accepted free by the AllPoint ATM network, which operates 56,000 machines nationwide. Locally, they are in CVS, Walgreens and Target stores.

When Flagstar customers are away from home, they also can use the Presto! network for free. Those ATMs are in Publix grocery stores in the southeast.

Answers to frequently asked questions regarding the customer transition are available at www.flagstar.com/welcomewells.

Flagstar will take over a prominent downtown location during the transition. The bank will occupy the first-floor branch and some leased offices in the downtown high-rise now associated with Wells Fargo.

Some of the Wells commercial and wealth management bankers also will work out of leased offices at the same location, 111 E. Wayne St.

McLaughlin, who has worked for four different banks during his career, said he’ll stay at Flagstar until retirement.

“I know this sounds cliché, but we really are like a big family, we really look out for each other,” he said.

Top priority, he said, is maintaining the bank’s workplace culture, even while more than doubling Flagstar’s asset size.

“We want to keep that kind of small-town banking feel,” he said. “It’s exciting, and we definitely are up to the challenge.”

sslater@jg.net

AP RADIO
Update hourly