Wachovia Corporation

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Wachovia Corporation
Wachovia.jpg
Founded 1967
Headquarters Headquarters: Charlotte, North Carolina, USA
Employees 110,000
Products financial services
Website www.wachovia.com

Wachovia Corporation was a Charlotte, North Carolina-based bank holding company, incorporated in 1967 and acquired by Wells Fargo during the Credit Crisis of 2008.[1]

By fall of 2008, Wachovia faced a near collapse of its share price and weakening confidence because of its exposure to troubled mortgage assets. On Sept. 29, 2008 Citigroup agreed to a takeover of Wachovia Bank in a deal backed by regulators which gave the government a stake in one of the nation's biggest banks. On October 3, 2008, however, a battle for Wachovia erupted between Citigroup and Wells Fargo & Co., when the latter struck a $15.4 billion deal to buy Wachovia only four days after it agreed to the takeover by Citigroup Inc. at a much lower price.

These events marked another shakeup for the troubled U.S. banking sector saddled with heavy losses from the bursting of the real estate bubble.[2]

Background

The merger of the former Wachovia Corporation (NYSE:WB) and First Union Corporation was effective Sept. 1, 2001. In October of 2007, Wachovia and A.G. Edwards & Sons, Inc. (NYSE:AGE) announced an agreement under which Wachovia would acquire A.G. Edwards, which will be combined with Wachovia Securities, LLC to create a retail brokerage firm with $1.1 trillion in client assets and nearly 15,000 financial advisors. The company indicates that the combined entity has a national footprint of 3,350 brokerage locations, including 1,500 retail offices in 50 states and in Washington D.C.

Wachovia was burdened by a sagging $122 billion portfolio of option-adjustable-rate mortgages it took on with its purchase of Golden West Financial Corp. in 2006.[3]

History

The former Wachovia (founded in 1879 in Winston, NC) and First Union (founded in 1908 in Charlotte, NC) merged on Sept. 1, 2001, to create Wachovia Corporation. Wachovia (pronounced wa-KO-vee-yah) is the latinized form of the name Wachau, which was given to the tract of land in the Piedmont region of North Carolina settled by Moravians in 1753. The name honored the settlers' connections to the Wachau Valley along the Danube River. [4]

Products and Services

Wachovia Corporation provided commercial and retail banking and trust services through full-service banking offices in Alabama, Connecticut, Delaware, Florida, Georgia, Maryland, Mississippi, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, Virginia and Washington, D.C.

Wachovia Bank, National Association operated these banking offices, except those in Delaware, which were operated by Wachovia Bank of Delaware, National Association.

The company provided other financial services as well, including mortgage banking, investment banking, investment advisory, home equity lending, asset-based lending, leasing, insurance, international and securities brokerage services, through other subsidiaries.

The company's retail securities brokerage business was conducted through Wachovia Securities, LLC, and operated in 49 states. Since the 1985 Supreme Court decision allowing interstate banking expansion, the company had concentrated its efforts on building a large, financial services organization, primarily doing business in the eastern region of the United States. From 1985 until its acquisition by Wells Fargo in 2008, the company completed over 100 banking-related acquisitions. The company's business focused on generating improved core earnings growth from four key businesses, including Capital Management, the General Bank, Wealth Management, and the Corporate and Investment Bank.[5]

Key People (At the Time of Acquisition)

  • Chief Executive Officer and President, Robert K. Steel
  • Senior Executive Vice President and Head of Capital Management Group, David Carroll
  • Senior Executive Vice President and Chief Financial Officer, Tom Wurtz

References

  1. "Wells Fargo to Buy Wachovia, Trumping Citigroup Agreement". The Wall Street Journal.
  2. Citigroup To Take Over Wachovia Banking Assets, Gives US Stake. AFP.
  3. How Will Federal Plan Affect A Wachovia-Morgan Deal?. Atlanta Business Chronicle.
  4. "Company Facts”. Wachovia.
  5. "Research”. New York Times.


Resources

Wachovia Corporation Web site [1]