When U.S. Bancorp CEO Richard Davis visited Charlotte in 2009, he could only check out the Sheetrock shell of his bank’s planned new trading floor in uptown’s Hearst Tower.
Now the operation hums with the sound of computer monitors and the chatter of traders working the phones, just one piece of the Minneapolis-based bank’s growing presence in a city better known for rivals Bank of America and Wells Fargo.
Since buying Wachovia’s corporate trust business in 2005, U.S. Bancorp, better known as U.S. Bank, has expanded in Charlotte to about 300 employees. The nation’s fifth-largest bank has added traders, corporate bankers and increasingly compliance officials to keep up with new regulations.
It’s a small slice of a financial institution with $390 billion in assets and more than 67,000 employees, but one that Davis expects to continue growing.
“I don’t see any limit on how big we can get,” he said in an interview last week.
During his one-day stop, Davis, 56, met with employees, lunched with clients at the Duke Mansion and hosted a reception for more customers at the Ritz-Carlton hotel. He also took time to talk to the Observer about the company’s Charlotte presence, retail banking plans and cybersecurity issues.
One surprising revelation: He talks every week with Bank of America counterpart Brian Moynihan. Davis is the chairman of the The Clearing House, a payments company and banking association; Moynihan is vice chairman.
“He’s very easy to get along with,” said Davis.
In Charlotte, the bank’s growth areas include the corporate trust business, which includes escrow, document handling and other transaction services for corporate clients. The fee-generating business, which has hubs in Boston, New York, Charlotte and Minneapolis, has grown through acquisitions over the years, and Davis said he is eying more deals overseas as European banks slim operations.
U.S. Bank is also adding compliance personnel in Charlotte, a growing need for most banks. The bank has about 25 people working in Charlotte in this area now, but he expects that to grow to 60 quickly.
“We’re moving swiftly to bring on more compliance skill,” he said.
One business he doesn’t plan to transport to Charlotte is retail banking. Davis said he is happy with the 25 Midwestern and Western states where he currently operates.
It doesn’t make sense to get so big that U.S. Bank bumps up against additional capital requirements and regulations for super-sized banks, he said.
“For the first time in my life, bigger is not only not better it might actually be worse,” he said, noting the company will still increase to about $500 billion in assets in a few years through internal growth and some acquisitions.
In one of his industry roles, Davis has been on point for cybersecurity issues for the Financial Services Roundtable trade group, along with BB&T CEO Kelly King.
Banks have worked to share information with each other on attacks and to coordinate their response with the U.S. government.
“You can do an earthquake drill a hundred times, but when the real earthquake comes did the drill really prepare you or did everyone go back to their old behaviors?” Davis asks. “We want to make sure that it’s the former.”
JPMorgan Chase has gained attention recently for an attack this summer that compromised the accounts of 76 million households, raising questions about whether other banks had been infiltrated.
Davis said the FBI hasn’t indicated that U.S. Bank was a target.
Like other banks, U.S. Bank is adding chips to credit cards, which aim to make it harder to steal information.
But Davis sees more potential in a “cloud-based” technology called “tokenization” that will encrypt individual transactions.
Davis said he worries that pervasive news about breaches will make customers less on guard for ID theft. He noted his bank no longer immediately sends new cards to customers after breaches.
“Our customers are willing to wait until there is some of form of potential fraud on their account because they don’t want to change their number again,” he said.