Wachovia Bank

It is one of the largest providers of financial services in the United States, operating financial centers in 21 states and Washington, D.C., with locations from Connecticut to Florida and west to California. It also serves retail brokerage clients under the name Wachovia Securities nationwide as well as in six Latin American countries, and investment banking clients in selected industries nationwide. Wachovia provides global services through more than 40 offices around the world.
On September 26th, 2008 it was reported that Wachovia has entered into preliminary merger talks with a handful of suitors including Citigroup, Wellsfargo and Banco Santander SA.

Corporate information
Wachovia is divided into four divisions: General Bank, Wealth Management, Capital Management, and Corporate and Investment Banking.
The general bank services retail, small business and commercial customers. Wealth management serves the high net worth, personal trust, and insurance business.

While the transaction was billed as a merger of equals, the transaction was actually a purchase of the legacy Wachovia by Charlotte-based First Union. First Union then took the Wachovia name.
Wachovia National Bank


Legacy Wachovia logo

Legacy Wachovia Corporation traced its history to 1879, when it was established as the Wachovia National Bank in Winston-Salem, North Carolina.

The bank merged with Wachovia Loan and Trust (founded 1893) in 1911 and remained located in Winston-Salem. Founded as Atlanta National Bank on September 14, 1865, and later renamed to First National Bank of Atlanta, this institution was the oldest national bank in Atlanta.

This purchase made legacy Wachovia one of the few companies with dual headquarters: one in Winston-Salem and one in Atlanta. In 1998, legacy Wachovia acquired two Virginia-based banks, Jefferson National Bank and Central Fidelity Bank.In 1997, Wachovia acquired both 1st United Bancorp and American Bankshares Inc, giving its first entry into Florida. In 2000, legacy Wachovia made its final purchase, which was Republic Security Bank.
First Union
First Union Corporation had its beginning as Union National Bank on June 2, 1908.

The bank merged with First National Bank and Trust Company of Asheville in 1958 to become the First Union National Bank of North Carolina. Over subsequent decades, but particularly during the 1990s, First Union purchased over 80 other banks before purchasing Wachovia. The company traces its history to 1781, when the first bank in the United States was chartered as Bank of North America. Wachovia continues to run a branch in Philadelphia that has operated since its inception in 1781, making it the longest continuously operated branch in America.

CoreStates Financial purchase
CoreStates Financial Corporation, headquartered in Philadelphia, was acquired by First Union in April 1998. Many of these problems arose when First Union attempted to rapidly integrate CoreStates' systems into First Union's.

This led to such problems as account access issues and payments not being correctly applied to loans.
The Money Store
On June 30, 1998, First Union paid $2.1 billion for The Money Store. This was viewed with great surprise by the financial press and security analysts.

While Wachovia had been viewed as an acquisition candidate after running into problems with earnings and credit quality in 2000, the suitor shocked analysts as many speculated that Wachovia would be sold to SunTrust.
As an important part of the deal, First Union would shed its name and assumed the Wachovia identity and stock ticker. Analysts said this move was most likely to help First Union acquire a new identity, as Wachovia's reputation was far better with consumers than First Union.At the same time, Wachovia's name and corporate identity would survive.
The deal was met with criticism and doubt by several groups. Analysts were concerned of First Union's ability to merge with another large company because of the CoreStates deal.

Citizens and politicians of Winston-Salem suffered from a hurt of their civic pride because the city would lose Wachovia's corporate headquarters to Charlotte, partly because Winston-Salem is a much smaller city than Charlotte. The city of Winston-Salem was concerned both by job losses by the move and the loss of stature from losing a corporation.

First Union was alarmed by the potential deposit attrition and customer loss in the city. First Union responded to these concerns by placing the wealth management and Carolinas-region headquarters in Winston-Salem.


The Wachovia Center in Winston-Salem

On May 14, 2001, Atlanta-based SunTrust announced a rival takeover bid for Wachovia, the first hostile takeover attempt in the banking sector in many years. In its effort to make the deal appeal to investors, SunTrust argued that it would provide a smoother transition than First Union and offered a higher cash price for Wachovia stock than First Union.
Wachovia's board of directors rejected SunTrust's offer and pledged to continue its merger with First Union.

SunTrust continued its hostile takeover attempt, and a bitter battle between SunTrust and First Union took place over the summer. Both banks increased their offers for Wachovia, took out newspaper ads, mailed letters to shareholders, and initiated court battles to challenge each other's takeover bids.
On August 3, 2001, Wachovia shareholders approved the First Union deal.

They rejected SunTrust's attempts to elect a new board of directors for Wachovia, and thus, ended SunTrust's hostile takeover attempt.
Another problem concerned each bank's credit card division. In April 2001, Wachovia agreed to sell its $8 billion credit card portfolio to Bank One.The cards, which would have still been branded as Wachovia, would have been issued through Bank One's First USA division. First Union had sold its credit card portfolio to MBNA in August 2000.

After entering into negotiations, the new Wachovia agreed to buy back its portfolio from Bank One in September 2001 and resell it to MBNA. In order to prevent a repeat of the CoreStates fiasco, the new Wachovia took a deliberately long period of time to combine the banking operations of the new company.

The company first began converting systems in the southeast United States (where both banks had branches) before moving to the Northeast, where First Union branches only had to change their signs to reflect the new company name and logo. This process officially ended on August 18, 2003, almost 2 years after the merger took place.
In comparison to the CoreStates purchase, the merger of First Union and Wachovia has been a success.

The merger also affected the names of the indoor professional sports arenas in Philadelphia and Wilkes-Barre, Pennsylvania. Formerly known as the First Union Center and the First Union Spectrum (both Philadelphia) and First Union Arena (Wilkes-Barre), they are now known as the Wachovia Center, Wachovia Spectrum, and Wachovia Arena at Casey Plaza.
Acquisitions since 2001
Prudential Securities
Wachovia Securities and the Prudential Securities Division of Prudential Financial, Inc.

Wachovia owns 62% of this entity, while Prudential Financial owns 38%. At the time, the new firm had client assets of $532.1 billion, making it the nation's third largest full service retail brokerage firm based on assets.
Metropolitan West Securities
On October 22, 2003, Wachovia announced it would acquire Metropolitan West Securities, an affiliate company of Metropolitan West Financial. This acquisition added a portfolio of over $50 billion of securities on loan to the Wachovia Global Securities Lending division.
SouthTrust
On November 1, 2004, Wachovia completed the acquisition of Birmingham, Alabama-based banking competitor SouthTrust Corporation, a transaction valued at $14.3 billion. The merger created the largest bank in the southeast United States, and the fourth largest bank in terms of holdings, and the second largest in terms of number of branches.Integration was completed by the end of 2005.
Westcorp
Westcorp, Western Financial Bank's parent company, WFS Financial Inc. auto finance market and provided Wachovia with a small retail and commercial banking presence in southern California. On February 12th, 2007, the former 19 Western Financial Bank branches opened under the Wachovia name.

These branches became the launching point for a much larger Wachovia presence in California with the acquisition and integration of World Savings Bank in 2007.
Golden West Financial
Wachovia agreed to purchase Golden West Financial for a little under $25.5 billion on May 7, 2006. This acquisition gave Wachovia an additional 285-branch network spanning 10 states. Edwards for $6.8 billion to create the United States' second largest retail brokerage firm. The acquisition closed on October 1, 2007.

Wachovia also has an asset management division, operating as Evergreen Investments in the United States and as Wachovia Global Asset Management abroad.
In 2005, Wachovia was among 53 entities that contributed the maximum of $250,000 to the second inauguration of President George W. Bush.
In June 2005, Wachovia negotiated to purchase monoline credit card company MBNA.

However, the deal fell through when Wachovia balked at MBNA's purchase price. Wachovia received $100 million out of this deal, the result of an agreement Wachovia predecessor First Union made in 2000 when it sold its credit card portfolio to MBNA.

Upon an attempt to deposit them at a Bank of America, 10 of them were found to be counterfeit. The investigation of the alleged laundering also included other large U.S.