In 2009, as most big banks were retrenching in the financial crisis, Jim Kelligrew was setting up a bond trading floor for U.S. Bank in the Hearst Tower in uptown Charlotte.
Nearly five years later, the operation has grown to about 60 employees and is creeping up on Wall Street competitors. Its part of a broader expansion here by the Minneapolis-based bank, which emerged from the financial crisis largely unscathed as Charlottes big banks stumbled.
It was a true start from scratch, said Kelligrew, a veteran of both Bank of America and Wachovia. And it has been incredibly rewarding to bring on people that wanted to grow a business, that wanted to have fun again and work for a rock-solid, highly rated bank.
U.S. Banks growth shows how the nations fifth-largest commercial bank by assets is cautiously expanding into new businesses and regions outside its Midwestern and Western territory. The effort, however, still remains a small part of an institution that makes most of its money on retail banking and its payments processing business.
The hiring in Charlotte came at a turbulent time for banks here and around the world. In early 2009, Bank of America needed a government bailout to prop up its Merrill Lynch acquisition, and Wachovia had been snapped up by Wells Fargo after the bank nearly succumbed to ballooning loan losses.
U.S. Bank is very opportunistic, and I think they will stay that way, said Nancy Bush, a bank analyst with NAB Research. They have slowly expanded under the radar.
Kelligrew, head of the banks high-grade fixed income group, and former Wachovia veteran Dee ODell, who runs corporate banking in the Southeast, have spearheaded the Charlotte hiring campaign. U.S. Bank now has about 210 people here, including a corporate trust business acquired from Wachovia in 2005. Thats up from about 110 in January 2009.
The high grade bond business helps large credit-worthy companies such as the Lowes home improvement chain issue debt to investors. The operation also trades bonds for corporations and institutional investors such as pension funds.
Before Kelligrew launched the business in 2009, U.S. Bank was only conducting a handful of transactions, he said. Now its the 17th-largest issuer of U.S. investment grade corporate debt through the first eight months of this year, according to Thomson Reuters data.
While the bank is far behind giants such as JPMorgan Chase and Bank of America Merrill Lynch, Kelligrew is encouraged by a statistic that shows U.S. Bank was No. 7 when counting total deals in which it was the lead manager or co-manager of a transaction.
Over time, Kelligrew said he could gradually add more employees and products. For example, U.S. Bank recently added the ability to trade preferred stock for clients.
Growth could mean more risk for a bank that is known for its conservatism. But U.S Bank has strong controls in place, including risk executives based in Charlotte, Kelligrew said. We have very prudent conservative risk guidelines for our trading book, he said.
Talent pool in Charlotte
Meanwhile, ODell has built a business that lends to corporate clients with annual sales of more than $500 million.
As some U.S. and foreign banks scaled back lending to preserve capital, U.S. Bank has been able to land new customers, ODell said. Sixty percent of ODells clients werent with the bank four years ago, he said.
Average total loans at U.S. Bank increased 5.2 percent in the second quarter from a year ago, and the bank expects growth to continue in the third quarter. But the bank and its customers are still awaiting stronger growth in the U.S. economy, ODell said. Then businesses expand, they make acquisitions and they need more of what we offer, he said.
As U.S. Bank has built its Charlotte presence, it has added employees in areas it hadnt originally planned to locate here, such as leasing, treasury management and commercial real estate, he said.
These are jobs you could have filled in headquarters in Minneapolis, Chicago, Cincinnati, New York City, San Francisco, he said. But the talent pool was here.
Both ODell and Kelligrew said U.S. Banks solid track record has helped them attract employees and customers. The bank has remained profitable throughout the financial crisis.
Employees here in Charlotte, a lot of us have scars from what we have all been through the last five years, Kelligrew said. To join a bank that is very conservative but rock-solid, your worries about what could happen are very minimal. Staff writer Andrew Dunn contributed.
Rothacker: 704-358-5170; Twitter: @rickrothacker
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