If you've got at least $100 million in net worth, the folks at Wells Fargo would like to put on a show for you and your heirs. To lend color to otherwise drab family financial meetings, Wells Fargo employs a former New York elementary-school history teacher who helps prepare skits featuring younger family members telling the story of how their forebears struck it rich.
"Kids will play their ancestors and tell the story of how their family migrated its way to wealth," said Arne Boudewyn, head of family dynamics and education at Wells Fargo's Abbot Downing division. "It helps us get to know the client better."
Evidently, these modest productions are getting good reception. Thanks in part to more wealthy customers parking their millions at the bank, Wells Fargo saw its deposit base grow by 8% last year. That was higher than the national average for big banks and a sharp contrast with small banks, which as a group saw deposits drained out of their vaults last year, according to the Federal Deposit Insurance Corp. More deposits meant Wells Fargo had more money to lend and helped it increase earnings by 60% last year, to nearly $22 billion, the most of any bank.
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Wells Fargo's theatrical productions may be unique, but its strong deposit growth is not, at least among the too-big-to-fail banks. Bank of America, Citigroup and JPMorgan Chase also increased their deposit bases last year at the expense of community banks. JPMorgan, for instance, boosted deposits by 8% even as it grappled with regulatory difficulties and paid billions in litigation costs.
The numbers demonstrate that even though the nation's biggest banks remain quite unpopular in certain quarters, they are drawing in more customer cash than ever. "The truth is most people don't care what size their bank is, so long as it's convenient to use," said Gary Stern, a former president of the Federal Reserve Bank of Minneapolis.
The big banks' ability to seize deposit share from their smaller competitors is a powerful trend — if it holds up. Deposit-gathering has become much more important to all banks in recent years because new regulations have curtailed the fees they can charge customers for such things as overdrafts or debit-card use. Those fees helped banks cover branch operating costs and other expenses.
Some comfort for small banks is that their profit margins are higher.
Drexel Hamilton analyst David Hilder said BofA, Citi, Chase and Wells Fargo could capture as much as half the profits generated by the nation's nearly 7,000 banks. Last year, the big four had 42%.
"We're starting to see the power of these franchises, and it is formidable," Mr. Hilder said.
Aaron Elstein is a senior reporter at sister publication Crain's New York Business