On a September evening, in a large tent pitched outside his bank in downtown Lake Forest, Ed Wehmer took the microphone and addressed 350 people celebrating the 20th anniversary of what is now
The jocular 57-year-old is known in the banking industry for his plain-spoken comments.
But that evening he got nostalgic about the day when he opened the door to Lake Forest Bank & Trust in 1,200 square feet just around the corner.
"I had a briefcase and a phone the size of an old boot, and that was about it," Wehmer told the crowd, which included early investors, one of his five sisters and his dentist. "I had to call my wife and ask her to bring a card table over."
Today, Wintrust is the second-largest locally headquartered banking company, by deposit market share, after Chicago-based
It has $14.9 billion in assets.
Wintrust long downplayed its own name. Instead, it positioned Lake Forest Bank and its 14 other individual institutions — and their 50 brands — as community-style alternatives to large lenders. "Until recently, you never knew Wintrust existed," the chief executive told the gathering.
But Wintrust believes it's time for consumers to learn what it has to offer as a larger financial-services business, one of the ideas being that the heft behind the homey-sounding bank names will comfort savers worried about the safety of the banking industry.
The branding, now including billboards on Interstate 294 and radio advertisements, is "a big move for us because we don't want to lose our positioning as the local alternative to the big banks," Wehmer said in an interview. "In the long run, it's going to be walking the walk, not just talking the talk."
Balancing his bank's identity shift hasn't been his only challenge. Don't get him started on the regulatory environment.
Having numerous individual bank charters has meant that Wintrust is subject to regulatory exams for each one. Wehmer jokes that he feels like he's working "at a teaching hospital most of the time," with someone "always poking and prodding somewhere."
That's not his only metaphor: "It's like
," Wehmer said. "We have a huge compliance staff, 36 people, and they're trying to navigate the ship and monitor all the space junk flying around up there, on convoluted orbits bumping into each other."
Along with $97 billion-asset Northern Trust, Wintrust has repaid the
's Troubled Asset Relief Program. No longer subject to bank bailout rules, the banks regained more freedom to set executive pay, entertain clients and do deals as they see fit.
Since April 2010, Wintrust has acquired seven banks, including six failed ones, and has been one of the few midsize Chicago lenders to remain consistently profitable. Wehmer said he wouldn't be surprised if Wintrust emerges with $20 billion in assets, as long as bank failures continue and fatigued banks look to sell.
It feeds his "make no little plans" idea of Wintrust beating out midsize rivals
and First Midwest to become the leading locally based bank.
, R-Ill., considers Wehmer his go-to guy for feedback on banking matters, after meeting him through a Wintrust banker in
. When the economy collapsed in late 2008, Kirk asked Wehmer to head a group of about two dozen businessmen to keep him abreast, through conference calls, on how the crisis was affecting Wall Street, LaSalle Street and Main Street.
"Because of Ed's advice, I voted for the TARP legislation," Kirk said.
Kirk, then a U.S. representative, felt that vote might cost him his re-election. But the public came around to understanding its importance in possibly preventing the economy from falling off a cliff, he said.
Wehmer has misgivings about his own bank taking TARP funds. He said his bank didn't need the $250 million it got in late 2008 but felt compelled to apply: The common perception, he said, was that lenders who didn't qualify for the money must be on shaky financial ground. But when banks did receive the capital infusions from the U.S. Treasury, they found themselves under even more scrutiny, not just by the government but also by a public sensitive to any hint of excessive spending on the backs of taxpayers.
A golf tournament that Northern Trust held in California in early 2009 generated a firestorm of national criticism. Amid such tidings, Wehmer's company canceled outings to Abbey Resort in Lake Geneva, Wis.
Wintrust bankers have stayed even closer to home, hosting outings Wehmer calls "little Nippers," an homage to the company's earlier management retreats to Nippersink Resort in Wisconsin.
Wehmer was born at what was then his parents' house in Kenilworth: "My mother didn't make it to the hospital," he said. He's the fifth of sixth children and the only boy. One sister, who had
, died of a heart ailment when she was 3 and he was 7.
Wehmer's paternal grandfather and great-uncle both worked in banking in Cincinnati. His great-uncle founded the trust department for Cincinnati-based Fifth Third Bank.
His maternal grandfather got into the meatpacking business in Chicago and started local supermarket chain
. Wehmer's father eventually ran the business, which grew to more than a dozen stores in the Chicago area. But its business model went out of style, and the stores were sold to individual managers, Wehmer said.
Years later, Wintrust's third bank, North
, would put its headquarters in a Wilmette building that had once housed one of his grandfather's grocery stores.
Wehmer graduated from Loyola Academy in Wilmette and got a business degree from
After graduation, he got a job at accounting firm Ernst & Ernst, making $13,500 a year as an accountant.
"I learned a lot and gravitated to banking," Wehmer said.
An Evanston bank that was a client hired him as its chief financial officer. Then Wehmer was recruited by River Forest Bancorp chief Robert Glickman, who wanted to acquire banks. Wehmer, then about 30, was hired for about $150,000 a year. During his time working for Glickman, River Forest bought 10 banks and grew from $180 million in assets to more than $3 billion.
"Bob was a demanding guy," Wehmer recalled. He found himself working from 8 a.m. to 8 p.m., with an additional round-trip commute of two hours, barely seeing his family during the week.
Wehmer also had an entrepreneurial itch, having noticed that "if you work for someone, you can have a good life. But if you build your own business, you can do really well."
But Wehmer needed a money guy. Enter Howard Adams, a local bank investor who sold several suburban lenders to Harris Bank in the 1980s and, by 1988, had laid out a business plan to launch a chain of banks.
The pair saw an opportunity to serve wealthy communities where big banks were consolidating, leaving their rich clients with less-personalized service.
Wehmer, still at River Forest, wanted colleagues Randy Hibben and Dave Dykstra to join the startup.
Late one night at River Forest, with a case of
and what Wehmer recalls were leftover cigars given as a Christmas present by a bank customer, he, Hibben and Dykstra wrote a financial and operating plan for Lake Forest Bank. Wehmer still has the original paperwork.
Together, Adams, then chairman of the executive committee of Crabtree Capital Corp., a Loop investment firm, and Wehmer raised $6.6 million to co-found Lake Forest Bank. Hibben, now retired from Wintrust, joined them from the start. Dykstra, now Wintrust's chief operating officer, joined his former River Forest colleagues in 1995, "when the bank could afford him," Wehmer said.
Wehmer, the president, and Adams, CEO and chairman, were fighting for control of the company by 1998. Wintrust's board sided with Wehmer, who by that time had recruited many of the bank's managers. Adams was removed as CEO but remained on the board.
In 2000, Adams started Baytree National Bank, which now has a location in the same storefront where Wintrust started in 1991. Baytree, which has $208 million in assets, hit trouble in 2008.
Wehmer got a call from Adams one day in 2009. "Obviously, I was not on
card list," Wehmer said.
They got together at the Onwentsia Club in Lake Forest, sitting outside in Adirondack chairs. The notion of Wintrust helping Baytree was discussed.
"It was sad," Wehmer recalls of the meeting.
Howard Adams' son, Alan, worked at Wintrust until seven months after his father left, later joining him at Baytree. Alan Adams left the bank in July 2009 to join Lifescript, a California-based Internet company.
Alan Adams said last week that he was aware of his dad's meeting with Wehmer but doesn't know what was discussed. His father "literally got sick the very" day of the meeting, went into surgery that night and spent eight weeks on a ventilator. He was not able to communicate before he died, Alan said.
Adams died in July 2009, still Baytree's controlling shareholder. In January 2010, Hinsdale-based EB Financial bought the bank.
As for that final meeting, Wehmer said, "I look at it and say, 'We all made our peace.'"
The recession seems to have been no match for Wehmer, observers say. Ellen Stirling, owner of fashion boutique The Lake Forest Shop, started by her grandmother in 1922, has been a Lake Forest Bank director since its start.
Stirling recalls Wehmer entering a board meeting well before the financial meltdown in September 2008 and saying the bank was going to hunker down. He saw troublesome signs.
"Really? Omigosh. Are you sure?" Stirling remembered directors saying. "Ed was ahead of the curve on that."
As early as 2006, Wehmer was publicly sounding alarms about the economy.
"This is a scary market," he told analysts in an October 2006 earnings call. "Some of the deals that walk out to other financial institutions — we just won't do."
Wehmer's former employer, River Forest Bank, had become
Bank. It collapsed in 2009 under the weight of bad condominium loans in Sun Belt states.
Peter Crist, chairman of Wintrust and the founder and chairman of executive search firm Crist Kolder, said Wehmer is "extraordinarily disciplined" at doing deals — he won't overbid. He has also evolved from being a hands-on co-founder to being able to delegate to other executives, Crist said.
Besides its branding campaign, Wintrust is also making more of a statement by moving its headquarters from Lake Forest to Rosemont, where it has bought a more visible, 11-story building big enough to consolidate corporate workers now spread around the Chicago area, and to display a Wintrust sign.
Wehmer will likely bring along his "Wall of Shame" — small items of collateral that the bank has seized for loans gone bad over the years. One is a bottle of vodka from a liquor distributor.
The headquarters move to Rosemont will continue through March.
Said Wehmer: "Dave Dykstra and I will be the last to go."
Edward Joseph Wehmer
CEO, co-founder of Wintrust Financial Corp.