Michelle Davies | The Journal Gazette Wells Fargo's bank branches in Indiana, including this one at West State and Sherman boulevards, will become Flagstar branches, the bank announced Tuesday.
Wednesday, June 06, 2018 1:00 am
Wells Fargo sells Indiana branches
To Flagstar Bancorp of Michigan; none expected to close
SHERRY SLATER | The Journal Gazette
Less than a decade after exiting the Fort Wayne market, a mid-sized Michigan bank is coming back with a bang. And its return will significantly reduce the local presence of one of the nation's largest lenders.
Flagstar Bancorp is buying 52 Wells Fargo locations – 33 in Indiana, 14 in Michigan's Upper Peninsula, four in Wisconsin and one in Ohio, bank officials announced today.
The deal, which includes $2.3 billion in deposits and $130 million in loans, more than doubles Troy, Michigan-based Flagstar's customer base.
Branches will be given the Flagstar Bank name, and the almost 500 bank employees will be asked to stay in their jobs, according to a news release. All of the branches will remain open.
“There is no action required for customers of these branches at this time, and Wells Fargo and Flagstar will communicate in advance of any changes as we work together to care for customers and team members,” Wells Fargo said in a statement.
Wells Fargo will continue to have a presence in the local market, where it will offer commercial lending, wealth management, retail brokerage and home lending products and services.
Employees working in those divisions are not part of the transition, Wells Fargo spokesman Steve Carlson said. He estimated about 80 of Wells Fargo's 240 local employees will remain with the company. The rest will be offered jobs with Flagstar.
Andy Veenstra, Wells Fargo's business banking manager for Indiana, confirmed he will remain with Wells Fargo. Mary Bell, Indiana-Ohio regional president for Wells Fargo, will stay with the bank through the transition and then look for other opportunities, according to a statement.
At least some of the bankers who remain with Wells Fargo will continue to work in the downtown location at 111 E. Wayne St., where the bank now leases space. Some portions of the space there will be taken on by Flagstar, Carlson said.
As of June 30, 2017, more than $1 of every $4 in an Allen County bank – or $1.86 billion – was on deposit at Wells Fargo, according to FDIC data.
The transaction comprises about $2.3 billion in deposits and is expected to close before the end of the year, subject to regulatory approvals.
Mary Mack, Wells Fargo's head of Community Banking and Consumer Lending, said the sale is part of the bank's strategic plan.
Wells Fargo previously announced plans to reduce its retail bank branches to about 5,000 by the end of 2020 by consolidating some locations and selling others.
The San Francisco-based bank is reeling from numerous scandals that include employees opening credit card and other accounts for customers without the customers' knowledge so that the bank employee could meet overly aggressive sales quotas.
“We are very pleased to reach this agreement with Flagstar, as they are committed to providing excellent service to our customers and providing a great workplace for our team members,” Mack said in a statement.
“As we continue to reduce our branch network, we believe this sale to Flagstar will result in the best outcome for customers, team members and other stakeholders in these markets,” she said.
Flagstar is a mid-sized bank that makes home loans nationally. Officials describe it as big enough to offer the lineup of products and services found at a large bank but small enough to offer personalized service.
When the acquisition closes, Flagstar will have 151 branches in the Midwest and eight in California. It services 470,000 mortgage loans.
If the name sounds familiar, that's because this isn't the bank's first appearance in northeast Indiana.
Flagstar opened full-service branches in two local Walmart stores in 2000. It closed those locations 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.
Drew Ottaway, Flagstar's Michigan market president and managing director of lending, said the previous closures should be seen in the context of the Great Recession, an extremely challenging time for mortgage lenders.
Flagstar retrenched during the meltdown, which allowed it to diversify and emerge stronger than before, Ottaway said. He brushed off any suggestion that the company can't decide whether it wants to do business in Indiana.
“We're committed for the long haul,” he said. “And we're anything but flaky.”
Ottaway sees growth opportunity with the deal.
“Our relationship-based approach is really going to resonate with those customers,” he said, adding that Flagstar can customize products to customers' needs.
Ottaway also expects that Flagstar will become known locally as a good corporate citizen by volunteering employee time and making donations to nonprofits. “We'll take that role very, very seriously,” he said.