VIEWPOINT: In WSFS, Delaware has its story of redemption
At the end of 2022, WSFS Financial Corp. reported $19.9 billion in assets, $64.5 billion in assets under management, and 119 offices, including 39 branches in Delaware.
Older readers know the WSFS story could just as easily be a sad footnote in Delaware banking history.
WSFS nearly joined the more than 1,600 FDIC-insured commercial and savings banks that failed between 1980 and 1994. Instead, it’s a story of survival, tenacity, and innovation.
It’s also the story of Skip Schoenhals – who likely would blush at being painted as the hero of the story. But longtime friend, retired Chrysler executive and State Chamber President Jim Wolfe told me of WSFS’s former chairman, president, and CEO: “It’s amazing he found a path to success. He devised a plan and stuck to it. He was a respected voice with deep business knowledge … and communicated in an authentic and believable way.”
WSFS teetered at the precipice of disaster four decades ago, and you can read how it survived in Schoenhals’ new book, “From Failing to Phenomenal: The Story of WSFS 1985-1996.” Former top executive Mark A. Turner is hard at work on the second part of the story in an upcoming book of his own.
At one point, WSFS was best known for its launch of the industry’s first debit card, the Plan Card, in 1972. The Plan Card deposited 2% of each purchase into a customer’s savings account, attracting banking executives from across the country to study the program. WSFS was also an early leader in reverse mortgages, which allows homeowners over age 62 to borrow money using their home as security.
By the mid-1980s, however, the picture had deteriorated to the point where significant real-estate loan write-offs led to Skip being hired in late 1990 to lead the rebound. In interviews at the time, he described his core values as “patience, perseverance, integrity, and straightforward thinking” and his biggest business influence as Walt Disney. Investors loved the “stickiness” and loyalty of WSFS’s customers. People who know him well describe him as a talented, humble leader. Faced with tough decisions, he relied on his faith and on his confidence in his team, fostering a culture that was matched by few Delaware companies at the time.
R. Ted Weschler, who joined the board as a representative of major investor Quad-C Management, says Skip “demonstrated a rare mix of harnessing diversity of thought, diversity of skills, and the ability to get everyone working together under serious pressure at both the board and bank levels.”
The book is filled with heroes too numerous to mention here. One is Wilmington Trust, led by the late Barney Taylor, which bought the Kent and Sussex branches that WSFS needed to sell to raise capital to stay alive.
You could argue that was just a strategic decision. But Wilmington Trust – a competitor, mind you – was also one of six well-known Wilmington investors – the others included John Rollins, Verino Pettinaro, Joseph Julian, and Thomas Shea – whose confidence helped convince the public that WSFS could survive and led to broader investments. They ultimately saw a return on investment of $100 for every dollar they committed.
“I bought stock in WSFS before Skip arrived but felt better after I met him,” said Verino Pettinaro, who described himself as a “self-made commercial and residential real estate developer and risk taker” who doubled his WSFS investment. “He’s a good guy. Honest. If he told you he was going to do something, he did it.”
Pettinaro said Schoenhals “talked like a banker,” which he said was a good thing.
“He used facts, and balanced risk and growth,” he recalled. “Like a lot of banks that wanted to be developers at the time, they were headed in the wrong direction before he got there. Banks like WSFS were taking risks. Banks are not supposed to take risks with other people’s money.”
The bank walked a tightrope between tense regulator meetings, board pushback, and a decision by the News Journal’s banking reporter in 1991 to hold off publishing a story that regulators were once again camped out in the Rodney Square headquarters deciding whether to close WSFS. He knew that would start a fatal run on the bank.
Thankfully, that didn’t happen. The reason why is a great Delaware business story. (The book is available at Amazon.com)
Robert Martinelli is the president of Today Media, the parent company of Delaware Business Times.
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