Wauwatosa Savings Bank, established as a savings bank in 1921, is transforming itself into a full-service financial institution. By late February, the bank will offer commercial lending services and will employ several commercial lenders.
The bank is moving into the highly competitive and crowded commercial lending market after its October 2005 conversion from a mutual savings and loans institution to a mutual holding company, a move Wauwatosa Savings Bank president Doug Gordon likens to an initial public offering. During that conversion, the bank sold 31 percent of its stock to the public.
The stock of Wauwatosa Holdings Inc., the parent company of Wauwatosa Savings Bank, is now traded on the NASDAQ index under the symbol “WAUW.”
The conversion raised about $100 million in equity, Gordon said, which should enable the bank to grow its assets by an additional $1 billion. The bank currently has more than $1.64 billion in assets.
“It gave the institution the ability to expand its product lines, open new branches and expand its other lines,” he said. “With the offering, we knew that we needed to expand. My job is to set the foundation to offer full service products.”
Gordon was hired out of retirement in late 2005 to lead the changing course of Wauwatosa Savings Bank. He previously led Security Bank, prior to its acquisition by Marshall & Ilsley Bank. Gordon eventually rose to lead the commercial real estate operations at M&I Bank until he retired in 2000.
Within the next few weeks, Gordon will hire two commercial lenders. One of those lenders will be the new head of commercial lending who will oversee those operations, he said.
Because the commercial lending market is so competitive, Gordon said, the bank wants to enter the market with a small number of experienced lenders with their own books of business and extensive contacts in the business community.
“Those are going to be more senior lenders with their own books of business and relationships,” Gordon said. “The lenders themselves will be well-known in their communities.”
Wauwatosa Savings Bank has eight branches now, and it will open a ninth in West Allis in March. It opened new branches last year in Germantown and Franklin.
The bank’s commercial lenders will work from a branch in Waukesha, but will spend most of their time out of the office, Gordon said, traveling throughout southeastern Wisconsin.
The bank’s new commercial lending department will focus on commercial and industrial real estate development, Gordon said. Most loans will be $20 million or less, but the bank is able to make loans of up to $30 million.
“Our niche will be relationships with qualified lenders, responsiveness and access to decision makers,” Gordon said. “We’ll be able to make loans of up to $30 million within 48 hours.”
Many other banks with similar lending capabilities aren’t headquartered locally, and decisions on large loans are made out of state, Gordon said. And those decisions often take time.
“We can send an e-mail, and meetings can be called very quickly,” he said. “We’re small enough to be responsive but large enough to handle their needs.”
The commercial lending division will have a minimum of four employees and at least $100 million in its portfolio within three years, Gordon said.
On Feb. 19, the bank will complete its conversion to a new third-party vendor software system, said Gordon. Once that conversion is completed, the bank will offer all of its services at all of its locations, he said.
The bank’s previous computer and software system was not able to support commercial lending-related products.
The new computer system will enable Wauwatosa Savings Bank to operate outside its current footprint of southeastern Wisconsin, Gordon said.
Once the bank completes its Feb. 19 conversion, its new Web site will offer more extensive secure online banking. As it develops more customers, the bank will gradually add services like remote check imaging as those customers want them, Gordon said.
“We have a lot of bells and whistles that will be added on later,” he said. “As we get customers and needs we can turn the switches for those on.”
In February 2006, Wauwatosa Savings Bank purchased Waterstone Mortgage Corp., a Pewaukee-based mortgage lender that has offices in Madison, Sheboygan, Lake Geneva and Livonia, Mich. Once the new computer system is installed, the bank could place commercial lenders in those offices, allowing it to compete for commercial loans in areas where it doesn’t have traditional bank branches, Gordon said.
“That’s the cheapest and most effective way to do it, and we can still do the back-room (operations) regionally,” he said.
Even though its technology conversion has not been completed yet, Wauwatosa Savings Bank has already made a few commercial loans, Gordon said.
The bank will begin advertising its new services and update its Web site in February.
Wauwatosa Savings Bank recently hired Jon McGlocklin, president of Milwaukee Athletes Against Childhood Cancer (MACC) Fund, former Milwaukee Bucks player and current Bucks television commentator, as its spokesman.
Commercial lending isn’t the only area in which Wauwatosa Savings Bank is looking to expand.
In March, the bank will roll out its full line of mortgage products, Gordon said. The bank only has one residential mortgage product now. It will also introduce home equity loans in March.
“This year isn’t a year of substantial growth, but we’d like to double in size in as quick a time as we could,” Gordon said. “It could happen in two years or it could happen in six years. We have to position ourselves to grab our share of the market when it’s there. Having the people in place for that – that’s the key.”
In recent years, there have been numerous personnel changes at Wauwatosa Savings Bank. Among them have been the departures of cousins John and Robert Perry. John Perry left the bank in November 2006 and has retired from banking, while Robert Perry retired in April 2004. In December, 2004, Robert Perry founded Main Street Financial Group LLC, a Brookfield home mortgage lender.
John Perry’s father, Charles, and his uncle, Ray, worked at Wauwatosa Savings Bank for about 40 years starting in the mid 1950’s. Their uncle, Edward Geske, was one of the founding partners of Wauwatosa Building & Loan (the former name of Wauwatosa Savings Bank) when it was founded in 1921.
John Perry has been using his new free time to travel with his wife and spend time with his three sons, he said.
“After (more than) 26 years as a savings and loan businessman, the timing was right for me to retire from the banking business, both personally and professionally,” John Perry said. “I feel WSB will continue to live up to its tagline – ‘It’s all here for you.’”
