Big Banking Presence
Wachovia’s Bill Liginfelter says his bank’s size and structure is a plus, when it comes to customer service and community involvement. As chairman-elect of the Metro Atlanta chamber, he’ll be tackling some tough transportation probl
Bill Liginfelter, Wachovia’s State CEO for Georgia, oversees his bank’s operations throughout the state. Headquartered in Charlotte, Wachovia is the fourth-largest bank holding company in the nation. The name Wachovia entered the Georgia banking lexicon in 1985 when the company merged with First Atlanta Corporation. The bank has 326 branches in Georgia.
Liginfelter, chairman-elect of the Metro Atlanta Chamber of Commerce, was born in Macon and grew up on St. Simons. In 1991 he joined SouthTrust, which merged with Wachovia in 2004. He’s headed the 2006 Metro-Atlanta United Way Campaign and the United Negro College Fund Corporate Campaign.
Liginfelter talked to Editor Susan Percy in July. Fol-lowing are excerpts from the interview.
GT: Is this a good year for Wachovia?
Liginfelter: It’s a great year. For the whole industry it’s been very challenging. We started out the year with a flat yield curve, and that makes it difficult to margin yourself up or down properly. But our whole philosophy around providing financial services and meeting client needs and finding new business from prospects is that you start with a foundation around great service. The good thing about being in a company [this] size and structure and with the resources Wachovia has, we’ve got a broad array of products and services for consumers and for businesses.
GT: How have you been affected by the downturn in the housing industry?
Liginfelter: Nobody in this industry is immune from a national issue, whether it be mortgages or interest rates. Wachovia and Golden West’s [a California-based S&L acquired last year] underwriting were among the strongest in the industry. There has been a small uptick in delinquency or in charge-off rates, but they’re still far below industry standards. Wachovia has historically had excellent ratios around credit losses and credit delinquencies.
GT: How bad is the home mortgage industry situation likely to get?
Liginfelter: I know that’s a question on a lot of people’s minds, and I don’t think anyone truly knows the answer right now when there’s news out almost on a daily basis. From a Wachovia standpoint, compared to our industry peers, our mortgage operations are doing OK and our credit quality remains strong. Locally, some of the challenges other mortgage lenders are facing represent opportunities for us to grow mortgage market share. And, what consumers in general should know, is that high-quality, well-financed lenders such as Wachovia are still actively looking to help people with good credit become homeowners. Rates have ticked up some, but they still remain affordable and below historic averages.
GT: There’s been a proliferation of community banks in Georgia in the last couple of years. Does that concern you?
Liginfelter: The bottom line for me is just to be a myth-buster around community banking. We decided several years ago that we would have an effective model on the ground in every market we operate with that did several things, but most importantly that put decision-making in that town. So when we have a bank network as we do in Augusta or Columbus … if we have more than one branch, we’re going to have a market president in place.
GT: How does that help?
Liginfelter: That person is charged with ensuring that credit decisions are prompt, meet the needs of the community and the businesses and people in those communities and that they’re actively involved in the community. Not just with their time but with our economic advantages, too. That could be in the form of lending – not just to businesses and consumers, but to local governments, and providing donations and volunteer time within the community. Wachovia has a policy that we allow employees four hours of paid leave every month to volunteer in the community.
GT: You used the term myth-busting. What’s the myth?
Liginfelter: There’s this idea that you have to be small and that you have to be locally run to provide excellent service and to meet client needs. The banks outside of Wachovia are worthy competitors with some very fine bankers involved. But we compete very effectively with any community bank in the state … because we have a model that’s dedicated to making decisions at the point of the customer or the client.
GT: Isn’t that what many community banks consider their strength?
Liginfelter: When a person walks into our bank and they want to borrow money, that local manager and his or her staff are going to respond as quickly as any community bank out there. I’ve visited every one of the branches in greater Georgia outside of Metro Atlanta, and I’ve watched our employees call every customer who walks in the door by name. So the myth that the big bank doesn’t know who you are is just not true. We can make a credit decision and call you by name on the spot.
GT: Community banks say one of the reasons for their growth is that there is something lacking in existing banks, especially big banks.
Liginfelter: All you have to do is look at the population growth of Georgia over the last 30 years to figure why there are more banks popping up. The real question: Is that the primary reason why they want to start a bank or is there some other motive that might be there for an organizer or the executive team?
GT: You mean like selling to a larger bank? That seems to be part of the community bank explosion as well – some are sold very quickly after organizing.
Liginfelter: Clearly in the late ’70s or early ’80s the laws here around branching were so strict that [starting a bank to sell it] made sense. You could start a bank in an outlying county then turn around and sell it in five years to a bank that couldn’t branch into that county, a larger bank. And there was a good economic reason for an organizer to come up with a new bank. As those laws were relaxed, banks could branch across county lines in Georgia. The real question is not what is the value of a community bank, it’s what is the value of one more financial institution, large or small.
GT: And what’s the answer?
Liginfelter: Georgia’s population has grown to almost over 10 million people. There’s room for that expansion to some extent. What will the end game be? Will it be consolidation? Will it be a slowdown? Will it be an increase? I don’t have a crystal ball; but Georgia’s banks appear to be fairly healthy to me, and some compete better than others. We like to think our model is so strong. My personal experience from visiting around the state on a regular basis is that we have extremely happy clients.
GT: You will be the 2008 chair of the Metro Atlanta Chamber. Can you talk about some of the concerns of the business community you will be addressing?
Liginfelter: One in particular that I’ve been most involved with has been around transportation. From a business standpoint it is the number one issue for chamber members. Congestion is at an all-time high. The first step is what can we do to mitigate congestion, stop congestion. It’s tough. The money that the state has to spend on transit and roads and bicycle paths and everything else related to transportation is not where it needs to be – to even keep congestion at present levels. As you look out over the next 10, 15 or 20 years, Georgia’s population will get to 12 million and then get to 14 million. We will add in Metro Atlanta alone the equivalent of a Denver by 2025.
GT: How will the area handle that kind of growth?
Liginfelter: We just don’t have the infrastructure to support that. While we have been the fourth fastest-growing state in the country for the last decade, we have invested at the fourth lowest rate for transportation infrastructure.
GT: What’s the solution – and what’s the chamber’s role?
Liginfelter: We see our role as a facilitator or collaborator for state agencies and politicians and the business community. It culminated this year with the introduction of House Bill 434, which recommended a mechanism for funding transportation improvements beyond what the governor can do in its present funding formula. A complementary bill … came up with another idea from a funding standpoint, so the governor appointed a study group to look at this issue over the summer. Our hope is that in this next session the funding gap for transportation and transit [will be addressed] or at least a mechanism to address funding will be approved and put to voters.
GT: It’s a complex issue.
Liginfelter: The money for roads and trains and buses and bike paths isn’t going to fall out of the sky. So we either understand [and accept] the consequences of unrestrained congestion for the next 10 to 15 years – or we deal with them. I think the consequences are creeping up on us in a big way already. I’ve got to find a way to get six to seven thousand employees of Wachovia to and from work in a timely manner, so that their attitudes and their outlook on life is as good as it can be. I want clients who come in the door who aren’t irritated or aggravated because it took them 30 or 45 minutes to get to a bank branch. You’ve heard the anecdotes about businesses that have rearranged meeting times to get people across town. People who have to go across town to see clients who say, “OK, if I’m going to see this customer, I’ve got to start here and I’ve got to have two alternative routes at least.”
GT: A lot of us live that.
Liginfelter: From an economic development and quality of life standpoint, it’s the number one issue.
GT: I’m sure you hear from people who are impatient and wonder how much more studying is needed. It’s not a new problem.
Liginfelter: I would submit to you that the biggest piece is accountability. In the case of transportation, with so few dollars available to match the enormity of the projects that need to be done, you can’t afford to have too many mistakes. You’ve got a body like the Atlanta Regional Commission [that says] here are the city’s or the region’s worst traffic points. You can improve some of them with synchronized lighting, with lane changes, with some physical changes that make sense. But in reality, some of these projects are going to require additional lanes, dedicated to buses or other forms of transit, dedicated maybe to trucks, dedicated to pay-as-you-go. There are a myriad of opportunities there, but there is an independent body made up of all the governments in the metro area who say we’re going to rank these priorities. That’s their job.
GT: So that’s the starting point for implementing solutions?
Liginfelter: You want to know that someone has taken those projects and agreed that they are the top priorities and they make the most sense, that the funding for those projects then can be tracked as they go from beginning to end and that eventually that funding mechanism has a sunset – just like a SPLOST. It’s over after 10 years or 8 years. If you want to bring it back, the voters have to decide that. I think some of those pieces have been missing.
You now worry about some big issues. Like what are your costs of construction going to be and what is your methodology for handling the project and the funding for the projects. So we’re not, as a chamber, here to answer those questions, we’re here to ask them, because they make good business sense to us.
GT: Do you see a role for more mass transit?
Liginfelter: The easy reply around mass transit is that it’s so prohibitively expensive and we’re so late in the game. The cost of right-of-way to lay track or build lanes is higher here than lots of places. With trains, light rail or heavy rail, you have the costs of operating those systems which aren’t necessarily built into the funding of building them. As you hear over and over again, fares never pay for the cost of operating the bus system. So you have to address that. Regardless of what we do, we’re going to have to address the MARTA piece – and Cobb Transit and Gwinnett’s bus system and other bus systems. They’re a critical key. We’ve got to have mass transit. I don’t think anybody’s figured out the right formula for that. Mass transit plays a role. I think you start with your existing systems and see how best to operate them and how best to cover their operating costs and then you decide if there is funding available to expand them.
GT: Wachovia’s headquarters are out of state. Do you consider yourself a Georgia company?
Liginfelter: Wachovia is a huge Georgia citizen with between six and seven thousand employees. We gave over 32,000 volunteer hours to the state last year. We disbursed at least $8 million in charitable donations last year. We have a huge influence in the higher education process and institutions in this state – not just through charitable giving but through providing banking services and credit to those institutions and to the state and the cities we operate in. We are proud of our presence in Georgia.