If you’re in any way connected to commercial or business banking, I highly recommend Ally of the Entrepreneur by Carlos Evans, the former head of commercial banking at Wachovia Bank after its merger with First Union. Carlos worked for banks of all sizes, having started his career at Bankers Trust, a community bank in South Carolina. You can order the book on Amazon here.
Carlos’ no-holds-barred autobiography of his life and career details dozens of commercial banking deals, play by play. The stories are intriguing and educational at the same time. While the book mostly has a positive tone, he tells it like it is. Carlos even details the reasons behind his grudge with Bank of America’s then-CEO Ken Lewis and how they eventually reconciled. Carlos also portrays his relationships with several well-known bank executives such as former CEOs Hugh McColl and Ken Thompson from Bank of America and Wachovia, respectively.
Carlos’ easy-to-follow, entertaining stories teach how he built relationships with business customers. For example, one of the keys to his success was his ability to expeditiously commit to loans. If Carlos was confident before the first meeting with a prospect, he wasn’t afraid to ask for the business’s financials, quickly review them at the meeting — and then provide the business with a pre-written term sheet on the spot! Another best practice: When transferred to a different city, the first thing he’d do was thoroughly read each customer’s credit file, cover to cover.
His stories also teach how politics often work within banks. The book’s lessons are like a step-by-step guide for bankers aspiring to move up an org ladder themselves. For example, right out of college, Carlos’ lending career was delayed when he was asked to help the bank with a building up-fit. In the end, doing so was a good move but didn’t feel like it at the time.
From 1993 to 1999, I was a commercial banker at NationsBank (now Bank of America). During much of that time, Carlos was my boss’s boss’s boss when he was running the bank’s Carolinas commercial banking business. He had a stellar reputation: fair, wicked-smart, and a can-do attitude.
In 1999, right after I left the bank and started my first industry research firm, few former colleagues supported my venture … but Carlos did! I vividly recall the meeting when I pitched him my new product. Carlos would ask me a question, and about 30 seconds into my answer, he would interrupt me and ask another totally different question. He quickly trained me to be concise. Within 15 minutes, Carlos had learned more about my firm’s approach to industry research than most prospects would have after three meetings! And he did become one of our early adopter customers!
Ok, back to Ally of the Entrepreneur. Just to whet your appetite, here are some highlights from this great book:
- The first few chapters tell of Carlos’ life growing up in a small town in South Carolina. This section reads easily and is quite fascinating.
- Carlos explains how the cultures at each bank are strikingly different. Oftentimes, a bank’s long-time CEO creates an iconic culture. However, when he or she retires or moves on, the next CEO is not likely to be able to extend the same culture, which is a difficult transition to overcome.
- Carlos gets into the nitty-gritty of loan structures — how he would creatively structure loans to protect the bank from risks but still unleash the entrepreneur to leverage capital to grow. For example, when other banks turned down a particular loan deal, he often made it work by requiring a letter of credit payable to the bank to shore up the equity needed.
- Carlos discusses the importance of partnership between “sales” and “credit” at a well-run bank. He points out how his chief risk officer at Wachovia, Mike Carlin, was “all over the details and very conservative but also fair and reasonable. I don’t mean to imply that Mike was easy because he was not. However, that is what you want from credit people. The best are tough in granting approval but also willing to change their minds if the circumstances warrant.”
- Carlos offers lots of context about credit underwriting and loan losses. For example, he explains that despite banks needing to return 99.75% of their loan portfolios, they still need to take some risk. “As bankers, we used to like to say that if a portfolio had no charge offs, the bank wasn’t making enough loans. A bank with too many charge offs was making too many.” While he was an aggressive lender, Carlos states that he remained within the average charge off rates. One story tells of his making a loan to a large rubber glove manufacturer that went bankrupt due to foreign competition from cheaper labor and factories closer to the raw material source. His mistake was assuming the future would continue to look exactly like the past.
- Carlos eloquently explains how getting involved in the community teaches the leadership skills needed to move up at a bank. “My feelings then and now are that aside from just doing the right thing, community service is a great way to sharpen and improve one’s leadership skills. As I have explained many times to up-and-coming management talent, at work, people follow you because they have to… In the community, they don’t have to follow… You have to build fellowship on your own merit.”
- Carlos was a stickler for diligently reading credit approval reports before meetings. When loan approvals would ask several questions already covered in the report, for him, this was like fingernails on a chalkboard. He notes that the reports take a lot of time and energy to write, and not to have read them is disrespectful.
- Bonus content! Carlos accounts the demise of Wachovia Bank during the 2008-2010 financial crisis. While Wachovia’s deal with Golden West instigated the forced sale of the bank to Wells Fargo, I gathered from Carlos’ account that Wachovia could have — and maybe should have — survived.
- More bonus content! Carlos offers details of what he witnessed when, in 2016, Wells Fargo got into its cross-selling scandal.
Carlos points out that being a commercial banker is “the greatest job on the planet.” As a former commercial banker myself, I have to say that the gift of being able to meet one-on-one with so many business owners is about as good as it gets. Don’t miss out on reading this gift Carlos has provided us!