Wintrust Bank CEO Ed Wehmer recalled his dad asking him in high school, “What’re you going to do for your career? Why don’t you be a CPA and then you can go around and ask any questions you want about all sorts of businesses?”
And unlike a lot of high school students, he took his dad’s advice. When he was with accounting firm Ernst & Young in the late ‘70s, early ‘80s, he says, “I acclimated toward banking,” as part of the team helping merge banks.
“That was a lot of fun,” he said, “but I never wanted to stay in public accounting.” So, Wehmer joined a customer’s business and became the CFO at a bank where he helped acquire other community banks. And those acquisitions led him to find an opportunity.
“All those banks buying up smaller community banks left a void,” he said. Their research showed people really did want a bank that had high-touch service and was also a part of the community. In 1991 he resigned, and along with the other Wintrust founders, put together a business plan “over some beers and cigars,” and rented an 1,100-square-foot space in downtown Lake Forest, Ill.
When he showed up his first day, he quickly realized he didn’t have a place to sit. “I called my wife and she drove over with a card table and a chair, and off we went,” said Wehmer, whose accessible and jocular personality comes through, even over a phone call.
The first location was funded by a group of investors, as were the subsequent branches, each with their own holding company. The banks dotted the Chicago suburbs—different banks with different shareholder groups. In 1996, Wehmer and team brought them under one holding group, Wintrust Bank, and began to acquire other banks, as well. Today, they have 150 locations.
Along the way, “I learned what to do and what not to do,” he said. “One thing is don’t be too concentrated in one thing. You can’t just have commercial real estate. One third of our portfolio is dedicated to niche businesses.”
Enter Sandy McCraren who has been with the bank for almost 20 years. McCraren ran the Highland Park branch for years, and had a relationship with McDonald’s Corp., financing its franchisees.
“Sandy came along with the idea of financing franchised restaurants,” said Wehmer. “She had the expertise, so I said ‘Let’s give it a whirl,’ and she began to expand that business.” A few years ago, McCraren’s team purchased one of GE Capital Franchise Finance’s restaurant portfolios as GE exited the finance business, which sent Wintrust on the path to exponentially growing that business.
“We are very flat organizationally, and we like to let people be entrepreneurial,” he said. “We set up good guard rails and let people do their own thing.” Including all its businesses, Wintrust Bank has grown to $42 billion in assets today. And, it’s franchise group is considered a player in today’s restaurant finance market.
about loan deferrals due to the coronavirus, which they are accommodating. “If they ask for it, they get it,” he said. When the Monitor talked to Wehmer, Wintrust was offering 30- to 60-day deferrals, “tacking the payments to the end” of the loan.
The CARES Act in April made life for bankers extremely busy. The Act, which included the Payroll Protection Program (PPP), offered small businesses “a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. The SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities,” according to the SBA website.
Bankers across the U.S. put in long hours, seven days a week, as demand for the loans usurped the amount the government earmarked for it. Plus, PPP was confusing, as the SBA changed the rules as banks were processing the loans. “Sandy and her crew processed 227 loans, funding $214 million for their franchise customers,” he said. In total, Wintrust processed 11,000 PPP loans during the first round of the program.
Wehmer’s direct communication style made it easier for team members to take on the overwhelming task of processing that many applications, said McCraren. “Ed had calls with us every day,” she added, which helped build camaraderie throughout the bank. “He’s a problem solver. He doesn’t wait around for a solution, he creates the solution.”
His team put together a system in one week to process the loans, reported Wehmer.
“Everyone across the bank, everyone, was part of this,” said McCraren. “I’m so proud of our team.”
Wehmer believes the banking system across the U.S. is prepared to weather the crisis, including having more capital available than during the last recession. “In the last recession you had an asset class that went sideways,” he said. “In 2006, the circuit breakers were popping. This is totally different. The government is responding appropriately and the regulators are being smart about it this time.”
He agrees with economists who say the U.S. will have a U-shaped recovery: a sharp decline, a period of stagnation, and then a healthy rise back to recovery.
Wehmer is optimistic: People “felt good going into this, and I think people will get back to normal—maybe slower, but they’ll get back there.”