Rick Willetts, former CEO of Cooperative Bank, does not look like a man who is carrying a lot of baggage. Although he could.

Last June, Cooperative Bank failed – the same bank his grandfather shepherded through the Great Depression, and he and his father grew to 23 branches from Kill Devil Hills to Myrtle Beach.

Willetts lost a fortune and the good will of many in the community. He’s being sued.

Unable to discuss the details of Cooperative’s closure because of ongoing litigation, Willetts said the failure was not his fault, and that it hurt when people he thought had been his friends sued him.

“Don’t they know I lost more than anyone else?” he asked.

Perhaps the love of his family and a wry sense of humor are responsible for his equanimity. Willetts has lost 30 pounds since the FDIC closed Cooperative’s doors. While he said he feels healthier, he wouldn’t recommend the stress “diet” he had been on.

FDIC blamed risky lending

When the FDIC issued its final report last December, it stated that Cooperative failed because the board of directors and management “did not adequately manage the risk associated with its aggressive real estate lending, particularly in the area of residential acquisition, development, and construction (ADC) loans.” The federal agency noted that when the economy deteriorated in 2008, Cooperative’s “weak loan underwriting, credit administration, and related monitoring practices resulted in a significant decline in the quality of the institution’s loan portfolio, especially its ADC loans.”

The bank, which had been a Wilmington fixture since the late 1890s, was shuttered by the Commissioner of Banks “because it lacked sufficient capital and liquidity to support its operations.”

The report found that Cooperative’s lending activities focused almost exclusively on real estate. Between the end of 2004 and the spring of 2009, the bank had increased its loan portfolio from about $463 million to $850 million, fueled in large part by ADC lending for residential properties in Eastern North Carolina.

New job with Copley

Many in Wilmington continue to stand by a man they call a friend.

Ron Copley, a financial manager for 25 years, approached Willetts last fall and invited him to join the team. Copley, principal of Copley Investment Management (CIM) said, “I’ve known Rick for a long time
and I’ve known his family for a long time. I think Rick is a man of great integrity.”

Before offering Willetts a position with CIM, Copley said he vetted Willetts thoroughly and was not
surprised to find that “everyone I spoke with was 100 percent absolutely complimentary about the integrity of Rick Willets.”

It’s not fair to blame Willetts for Cooperative’s failure, Copley said.

“The real estate problems were a whole lot bigger than Rick, a whole lot bigger than Cooperative. Across the world ‘everyone’ knew real estate prices do not decline. ‘It’s a fact of life.’” Well, Copley said, ‘everyone’ was wrong.

Willetts has an impressive resume with 37 years of banking experience, having served as chairman of the North Carolina Bankers Association, Vice Chairman of the American Bankers Association as well as an advisor to the Federal Reserve Board.

That was then, this is now. Willetts said, “I’ve gone from being comfortable to starting over at the age of 61.”

When Copley approached him last fall, even though Willetts had decades of money management experience, he needed to take and pass a licensing exam which allows him to represent and sell mutual funds, variable annuities and insurance.

Working with Copley appealed to Willetts on several levels, he said. “I’ve handled other people’s money all my life, it’s a shared responsibility.”

Initially, Willetts will act as a rainmaker, meeting with friends made over a lifetime of living and working in Wilmington, including chairing the Chamber of Commerce and as President of the Azalea Festival. Willetts said he is gratified by the positive response he’s received.

Copley, an academician, said he is analytical and knowledgeable about the technical side of managing money. He likes to do the research, constructing portfolios and interacting one on one with clients. What’s missing is someone who has experience marketing the firm. Willetts, he said, will do the marketing and together the two make a strong team.

“It’s a great opportunity for me,” Copley said.

In addition to meeting with prospective clients, Willetts said he is ready to be “hands on” with all clients which will assist the team since Copley, who has many international clients, travels a good deal.

As a money manager, Willetts believes that it is a good time to prepare for a rainy day, letting clients decide on the type of risk they are comfortable with.

CIM, Willetts said, is not like some boutique money management firms with headquarters in New York and cookie cutter plans. The Wilmington firm works with individuals and has a brokerage make the actual trades.

As for clients, particularly older clients who are or have to be more risk adverse, these are difficult financial times Willetts said.

“I’m not going to argue whether health care is good or not good,” but Americans can’t have the government do everything they want it to do without running up huge deficits, he said, with the current deficit works out to $40,000 for every person in this country. The risk of inflation hovers on the horizon regardless of which party wins in the November election and Willetts said he worries about the possibility of stagflation similar to what Americans experienced in the late 1970s.

“It would be devastating,” he said.

Today, Willetts no longer supervises a staff of more than 200, nor does he work in a building that has been a downtown Wilmington fixture for decades. Nor does he have to dress like a banker. Like many southern banks in an earlier time, Cooperative Bank employees wore the same color suits on certain days of the week, which were supplied by the bank. Today the former CEO is content to work in a slacks and a plaid shirt. His new office on Wrightsville Avenue does not have any of the grandeur of a century-old bank, but it fits his life supported by his family and his friends.