Wells Fargo Financial Leasing

Tim Reese President, Wells Fargo Financial Leasing

A successful career in the finance industry requires three things: tenacity, foresight and patience. But Tim Reese, president of Wells Fargo Financial Leasing, a $2.4 billion division of Wells Fargo & Company, says there’s something else involved too.

“It always pays to be lucky and being at Wells Fargo right now is about as lucky as you can get,” says Reese.

In April, Wells posted a record first-quarter profit of $3.05 billion and deposits at the bank climbed 6% to $756.2 billion following its takeover of Wachovia Corp. Last year the bank says it was forced to take $25 billion under the Troubled Asset Relief Program (TARP) even though it didn’t really need it.

An industry stalwart, Wells Fargo Financial Leasing placed #33 on this year’s Monitor 100, posting $793 million in new business volume (see Monitor, Vol. 35, No. 4).
That was down more than 10% from the prior year, but Reese says things are off to a much better start this year.

“It’s a very interesting time for us,” he says. “The last six months were just unprecedented … overall the leasing industry is down something like 30% but our business is up dramatically from last year. Because of the upheaval in the industry we’ve had large relationships come to us and seek us out — it’s the Wells Fargo name, the Wells Fargo stability and the fact that people see us as a long-term player.”

For Reese, a native of Boston, the route to Wells Fargo was anything but direct. In 1975, following his graduation from the University of Massachusetts at Amherst with a degree in finance, he joined General Electric’s Financial Management Program and went to work as a corporate auditor for the company.

Reese says the six years he spent in that role offered an essential learning experience. “The advantage of corporate audit staff is that every three months you were looking at a new business and so it was a great experience to get a flavor for what I wanted to do and what I didn’t want to do as I grew up,” he says.

In 1984, he joined GE Capital’s Mortgage Insurance Business, shifting roles from finance to operations, and finally to regional management. In 1991 he joined what was then GE Capital Vendor Financial Services and made his first foray into the leasing industry. “I can’t say that there was a well thought out strategy for this,” he says of the move, “but as I look back at it, I see I had enough information to get a flavor for what I really wanted to do.”

Reese was put in charge of operations at Vendor Financial Services after which he was tapped to run the company’s Office Technology Services group, the combination of Lease America and Chase Third Century — which GE had acquired in 1991. In 1998, he was promoted again, this time to vice president and general manager in Cedar Rapids, IA.

By 1999, Reese had been with GE for nearly 25 years. And, as is not uncommon for GE employees, he and his family relocated a number of times during his tenure with the firm. During more than two decades with the company, Reese says he moved no fewer than eight times, spending stints in Danbury, CT, Dallas and Atlanta, among other places.

All that moving took a toll on Reese; but more importantly, it was a strain on his wife and three daughters — 
all now in their twenties. What’s more, he says, the family had come to like Cedar Rapids, and so Reese put in a request with his employer to stay put. When GE balked, he decided to accept a position with Mellon Leasing — a company that had been courting him — and moved the family one last time — to Lincolnshire, IL, just north of Chicago, where they have been ever since.

His tenure with Mellon would prove brief. After two years, Reese says, the bank decided that it wanted to be more of a fee-based business than a lending business and put its leasing unit up for sale. Ironically, it was GE that decided to scoop up Mellon. In 2001, GE Capital’s Commercial Equipment Financing business acquired Mellon U.S. Leasing and GE Capital’s Vendor Financial Services business — Reese’s old unit — acquired Mellon Leasing, Manufacturer and Dealer Services.

But before GE locked into the sale, Wells Fargo took a look, and it was during the due diligence process that Reese first became friendly with the people he would one day call colleagues. “We got to know all the folks at Wells Fargo during the process and we stayed in touch with them; they are good people and we thought there may be opportunities with Wells Fargo in the future.” Though he couldn’t know it at the time, the feeling would prove prophetic.

After the sale of Mellon to GE, Reese and two colleagues — 
Lyndon Thompson and Mark Schmitt — began shopping their talents in small-ticket leasing to area banks.

“We began talking to people about setting up a business for them, and so through a twist of fate, one of my old sales managers called me and said he had a bank on the West Coast that wanted somebody to run a small-ticket business for them,” Reese says.

The bank turned out to be Greater Bay Bancorp, which in 2000 had picked up The Matsco Companies, a California-based financial services company specializing in the dental and veterinary markets. By 2001, Greater Bay was looking to get into the small-ticket space; they took Reese and his team on board, and on January 3, 2002, Greater Bay Capital began operations.

“We started that first year with eight employees, working out of our homes, working on our cell phones and actually, when we moved into our office space we didn’t even have furniture; the first conference call we had was on a board between two boxes with a phone on the floor,” Reese recalls.

Reese says that given the bank’s request for a stable portfolio with “no surprises” he decided to focus the business on “harder collaterals, like forklifts.” He explains, “We used that as the foundation for the business. It was a great way to create the kind of portfolio a bank would generally like,” he says. “You go from a commercial entity like GE that is heavily focused on income, and you go to a bank and it’s a culture change because it’s all about the quality of the portfolio.”

In October 2007, Wells Fargo announced it was acquiring Greater Bay Bancorp for about $1.5 billion in stock. By that time, Reese’s business was doing in excess of $200 million in business a year and its tiny staff of eight had grown to 60 employees. With the merger, Greater Bay Capital became Wells Fargo Financial Capital Finance, providing financing through manufacturer-sponsored programs for a variety of equipment, including materials handling and compact utility equipment, copiers and fax systems, medical equipment and mailing technology.

Reese describes the transition to Wells Fargo: “It was always a challenge for us at Greater Bay because we didn’t have a national presence; it wasn’t a name people recognized. But all of a sudden you have the Wells Fargo name behind you and it’s a whole different animal and people that might not have talked to us at Greater Bay or didn’t know us — suddenly we’re Wells Fargo. It opened a lot of doors.”

With the creation of Wells Fargo Financial Capital Finance, the bank now had three units providing some form of equipment finance: there was also Wells Fargo Financial Leasing, headquartered in Des Moines; and Wells Fargo Equipment Finance, part of the wholesale bank structure and headquartered in Minneapolis.

In September 2008, Wells Fargo decided it made sense to combine Wells Fargo Financial Leasing and Wells Fargo Financial Capital Finance into a single business unit under the Financial Leasing name. Reese was placed at the helm of the newly combined units, reporting to Greg Janasko, who heads up Wells Fargo Financial’s commercial business group.

In addition to the old capital finance business, Wells Fargo Financial Leasing services a wide variety of industries including office automation, technology, vendor and direct agriculture, and the golf and turf industry.

Since the consolidation, Reese has since settled into his new role, alternating weeks between his home base at Lincolnshire, and Wells Fargo Financial Leasing’s Des Moines headquarters.

He says the business is now in a kind of holding pattern, looking ahead to the end of the recession and the opportunities that will bring.

“You always want to grow but not in a way that’s going to cause problems down the road — a stable controlled growth is the best thing in this type of industry,” he says. “We’re already a very diverse business so it’s just a question of how we want to grow and what’s the best way to grow in this economy.”

A levelheaded manager with a talent for adapting to changing circumstances, Reese is keenly suited to the job. Having spent more than three decades in financial services — half of it in leasing — Reese, who just turned 56, says success comes from focusing on the fundamentals.

“The industry has gone through huge changes, in two areas in particular — technology and risk management. But the thing that strikes me the most is that no matter how much the business changes, it’s still a matter of taking a long-term focus and still about serving the customer and being the type of company that people want to do business with.”