Tim Wennes
Title:
President
Company:
Countrywide Bank
Born:
1967; Great Falls, Montana
Education:
B.S., business administration, USC; M.B.A., California State University, Fullerton
Career Turning Point:
Joining Countrywide Bank in 2003
Most Influential Person:
Father, Howard Wennes
Personal:
Lives in Westlake Village with his wife, Stefanie, and their three sons
Hobbies:
Golf, playing with his sons
Countrywide Financial Corp. has just about become synonymous with the mortgage industry meltdown. The nation’s top home lender, Countrywide was forced last month to get a $2 billion capital infusion from Bank of America and tap an $11.5 billion line of credit to continue operations. And yet last week there was still talk that the Calabasas company after announcing 12,000 layoffs and with its stock trading at a four-year low was running out of money. But you might not know that by talking to Tim Wennes, president of Countrywide Bank, which was chartered in 2001 and has quickly grown to $107 billion in assets with more than 100 locations spanning 15 states. Indeed, as the commercial paper market has dried up, Countrywide Financial has announced plans to rely on the bank, which receives consumer and commercial deposits, to fund its mortgages. Still, just belonging to the Countrywide family has given Wennes’ plenty to deal with. Last month, there was a short run on the bank, as customers worried their deposits were at risk. Those concerns have eased and Wennes, a 17-year banking veteran, likes to talk about the bank’s opportunities. Wennes recently sat down with the Business Journal to discuss the company’s crisis and his career as a banker.
Question: With the collapse of the housing market and all the negative press coverage the company has received, what is the mood like inside Countrywide these days?
Answer:
The last month has certainly been intense and there’ve been some significant challenges more than I anticipated as the environment has changed quickly and dramatically. When facing difficult circumstances, you can see people’s true colors come out. And it’s really been positive to see people working so hard for a common cause and to work so hard for customers and for the benefit of the company.
Q: What specific challenges has the bank faced?
A:
Adapting to a rapidly changing business environment, accelerating or modifying some of our previously laid business plans. One of the efforts undertaken this month as the market conditions changed was an acceleration of the integration between the banking and some of our mortgage funding and our mortgage operations.
Q: Chief Executive Angelo Mozilo announced that the Countrywide would start funding all of its mortgages through the bank. Can you manage that?
A:
Up through July the bank was funding approximately 50 percent of Countrywide’s mortgage origination volumes. We had a business plan in 2008 to move to 100 percent funding. With some of the changes in the marketplace and some of the liquidity challenges with the commercial paper market we accelerated those plans to move additional funding volume through the bank.
Q: Did it take long for the company to grasp the severity of the problems in the market?
A:
As this global event continued to unfold, I think we were alert and focused on watching these events unfold and making sure that we had the appropriate plans in place to properly react to them. So I think that we are always on the watch as market conditions change. We had heightened awareness and were very focused on them and as it continued to unfold we remained very vigilant and wanted to make sure that we put into place the plans.
Q: There was a small run on the bank last month. What have you been doing to reassure Countrywide Bank customers?
A:
I’d say one of the things that’s important to understand is that the bank is a distinct legal entity and the bank has its own sources of liquidity and capital, and much of that capital has been generated as part of the family of Countrywide, but the bank is well-capitalized. That’s one of the things I’ve been out with a message on. We’re $107 billion strong in terms of assets.
Q: Have things calmed down lately?
A:
In mid-August, with the heightened media attention, we had heightened levels of customer questions and concerns about their deposits. We had, I’d say, heightened activity, heightened questions, heightened withdrawal activity. We’ve seen that activity normalize over the past few weeks. We anticipate that we will continue to have strong deposit production in September going forward. The last month of August was actually our strongest week for new deposits of the year 2007.
Q: What do you anticipate will be the long-term effects on the bank?
A:
This environment will cause the bank to likely grow faster as we take on more of Countrywide’s loan origination funding. That will cause our assets to grow.
Q: How have the recent events impacted you and those you work with?
A:
We’ve spent additional time with folks like the Business Journal. As the mortgage market experiences challenges, Countrywide, as the largest mortgage originator, is frequently mentioned.
Q: Have you made a conscious effort to be more accessible to the media?
A:
I’ve always been very accessible. But what we’ve found is the media has been more interested given some of the other activities in the marketplace.
Q: What is your typical day like?
A:
I’d say that what is typical is that I usually start early and end late. Being a part of a dynamic and rapidly growing business is invigorating but also challenging. In terms of the kind of activities, those activities vary from here in the office, spending time with various constituents or stakeholders, communicating with team members. We’ve got significant operations in Arizona and in Texas, so periodically I’m traveling to those places to visit those operations.
Q: How has that changed recently, given this crisis?
A:
We’ve always had a fast-paced culture at Countrywide Bank, but I think the tempo has certainly increased given the fact that we’re having to move and react to a rapidly changing marketplace. Staying ahead of the curve requires us to meet, strategize and process more information much faster.
Q: What made you want to get into banking?
A:
Initially I wanted to go out and start my own business but I recognized that there were a couple of things that I was lacking as I was out writing my business plan my senior year in college. One was experience and the other one was capital. So I went into banking, primarily doing business lending, figuring that I could learn a lot about various businesses and determine which business it was that I wanted to go start.
Q: Do you still have entrepreneurial aspirations?
A:
Being a key stakeholder and component of building a very successful business I feel a lot like I’ve been able to do that here at Countrywide.
Q: What did you do before joining Countrywide?
A:
I was at Wells Fargo for 14 years. I held various management and leadership positions there. I spent eight of those years in Southern California and six years in Arizona. My final position there was as regional president, managing a group of bank branches in the Phoenix area.
Q: What made you want to come to Countrywide?
A:
We represent a significant story in banking in that we’ve grown organically to one of the 20 largest banks in the country and have done so in a relatively short period of time five and a half years. And that was one of the motivations in joining Countrywide when I left Wells Fargo. Wells Fargo is a great bank, it’s a tremendous place. But the opportunity here was to come be a part of a Fortune 150 company that wanted to organically grow a bank and do so in a dramatic fashion.
Q: So how did you attract new deposits so quickly?
A:
Having a low-cost model allows us to offer an attractive rate of interest for consumers and businesses to bring their deposits to us. When we talk about our business model, it’s kind of a hybrid model between an Internet bank and a traditional bricks-and-mortar regional bank.
Q: What is it like working with Angelo Mozilo, especially given the kind of pressure he is under?
A:
Angelo’s great. He has the unique benefit of having incredible historical perspective, tremendous passion, as well as a great vision for the future.
