Four Degrees of Separation

In my 30-plus years as a financial journalist, the best banker I’ve ever known was Carl Reichardt, who was CEO at Wells Fargo & Co. from 1983 to 1994. By “best” I mean someone who knew how to make money. Reichardt did it by focusing on a few core businesses, controlling costs and getting his employees to perform through financial incentives and the blunt force of his own personality. I’m sure Carl had an affable side, but he was a tough old cuss when it came to running his bank.

fishes.jpgTwo other bankers who are pretty much in the same category were Jack Grundhofer and his younger brother Jerry. Jack and Jerry once worked for Carl and Jerry once worked for Jack, and they all practiced what became known as the “Wells Way.”

And a guy who might end up being just as good as all three of them is U.S. Bancorp CEO Richard Davis, the subject of our cover story in the current issue of Bank Director magazine. Richard never worked for Carl, but he did work for Jerry and is an apple off of the same Wells tree, even though he never spent any time there.

These tangled connections are fascinating, and here’s how they all fit together.

Jack was a vice chairman and head of corporate banking at Wells when he was recruited to run First Bank System in 1990 after the Minneapolis-based company experienced severe lending problems. Jack turned the bank around nicely using pretty much the same strategy that Reichardt used at Wells. He was a demanding manager who preferred to focus on a few core businesses, but he also believed in the importance of incentive compensation. In 1997, Jack celebrated First Bank’s revival by acquiring Portland, Oregon-based U.S. Bancorp and taking that company’s name.

Jerry Grundhofer, who is six years younger than Jack, began his banking career at Union Bank in Los Angeles (where Reichardt had once worked many years before), was later recruited by Jack to join Wells,  where he stayed for a few years before leaving to join Security Pacific Corp., eventually becoming president and COO. The nomadic Jerry eventually left Security Pacific to become CEO of Star Banc Corp., a struggling Cincinnati-based bank that he quickly turned into a Midwestern powerhouse through a string of well-conceived and skillfully executed acquisitions.

Jerry’s best deal was probably his last one. In 2001, his bank (which had assumed the Firstar Corp. name after one of his early deals) acquired Jack’s bank – U.S. Bancorp – and assumed the latter’s name. For the next few years Jerry worked for Jack and then succeeded his older brother as U.S. Bancorp’s CEO.

Honestly, you can’t make this stuff up.

Richard Davis, who succeeded Jerry as U.S. Bancorp’s CEO in 2006, began his banking career as a teller at Security Pacific, while getting his college degree at night. Richard’s career took off when Jerry arrived at Security Pacific to run its retail banking operation and gave him his big opportunity. Richard followed Jerry to Star Banc and eventually built his own reputation as an outstanding retail banker. Since taking over at U.S. Bancorp, Richard has put the company on a solid growth path and turned it into one of the top performing big banks in the country.

I’ve had the pleasure of meeting all four men, and wrote separate profiles of Reichardt and each of the Grundhofers. They’re all a little different. Carl and Jack seemed tougher, Jerry and Richard more motivational. (Richard was a keynote speaker at our Acquire or Be Acquired conference a few years ago and had 500 community bank CEOs and directors so fired up, I thought I was at a Mary Kay convention.)

But they also have similar backgrounds. Carl grew up in Houston where his father managed a motel. The Grundhofers grew up in Los Angeles where their father was a bartender and their mother a housekeeper. Richard also hails from LA, where his dad drove a truck and his mom was a secretary. They are self-made men who attained their professional success through hard work and ambition.

And while they are different men, I think they share two traits that have defined them as bankers: A strong preference for strategic simplicity, and a passion for execution. They keep things simple, and make things happen. These were central tenants of the Wells Way. Richard never worked for Carl, but I bet Carl would have loved him.


Jack Milligan


Jack Milligan is editor-at-large of Bank Director magazine, a position to which he brings over 40 years of experience in financial journalism organizations. Mr. Milligan directs Bank Director’s editorial coverage and leads its director training efforts. He has a master’s degree in Journalism from The Ohio State University.