Wachovia

Wachovia was a diversified financial services company based in Charlotte, North Carolina. Before its acquisition by Wells Fargo and Company in 2008, Wachovia was the fourth-largest bank holding company in the United States, based on total assets.[1] Wachovia provided a broad range of banking, asset management, wealth management, and corporate and investment banking products and services. At its height, it was 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.[2] Wachovia provided global services through more than 40 offices around the world.

The acquisition of Wachovia by Wells Fargo was completed on December 31, 2008, after a government-forced sale to avoid Wachovia's failure. The Wachovia brand was absorbed into the Wells Fargo brand in a process that lasted three years:[3] on October 15, 2011, the last Wachovia branches in North Carolina were converted to Wells Fargo.[4]

Wachovia
Public
Traded asNYSE: WB
IndustryFinancial Services
FateAcquired by Wells Fargo
FoundedJune 16, 1879
Defunct2008 (as an independent corporation)
2011 (as a brand)
HeadquartersCharlotte, North Carolina
ProductsBanking, Investments
OwnerWells Fargo
WebsiteArchived official website at the Wayback Machine (archive index)

Business lines

Wachoviahq
One Wells Fargo Center, formerly One Wachovia Center. The former corporate headquarters of Wachovia in Charlotte, North Carolina.

Wachovia was the product of a 2001 merger between the original Wachovia Corporation, based in Winston-Salem, North Carolina; and Charlotte-based First Union Corporation.

The company was organized into four divisions: General Bank (retail, small business, and commercial customers), Wealth Management (high-net-worth, personal trust, and insurance business), Capital Management (asset management, retirement, and retail brokerage services), and Corporate and Investment Bank (capital markets, investment banking, and financial advisory).

It served 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.[5] In 2009, Wachovia Securities was the first Wachovia business to be converted to the Wells Fargo brand, when the business became Wells Fargo Advisors. Calibre was an independent consultant that was hired by Wachovia for the Family Wealth Group to research managers. The group no longer uses Calibre.[6]

The company's corporate and institutional capital markets and investment banking groups operated under the Wachovia Securities brand, while its asset management group operated under the Evergreen Investments brand until 2010, when the Evergreen fund family merged with Wells Fargo Advantage Funds, and institutional and high-net-worth products merged with Wells Capital Management and its affiliates.

Wachovia's private equity arm operated as Wachovia Capital Partners.[7] Additionally, the asset-based lending group operated as Wachovia Capital Finance.[8]

Origin of corporate name

Wachovia (/wɑːˈkoʊviə/ wah-KOH-vee-ə) has its origins in the Latin form of the Austrian name Wachau.[2] When Moravian settlers arrived in Bethabara, North Carolina, in 1753, they gave this name to the land they acquired, because it resembled the Wachau valley along the Danube River.[2] The area formerly known as Wachovia now makes up most of Forsyth County, and the largest city is now Winston-Salem.

First Union

FirstUnionLogo
First Union logo.

First Union was founded as Union National Bank on June 2, 1908, a small banking desk in the lobby of a Charlotte hotel by H.M. Victor.

The bank merged with First National Bank and Trust Company of Asheville, North Carolina, in 1958 to become First Union National Bank of North Carolina. First Union Corporation was incorporated in 1967.

By the 1990s, it had grown into a Southern regional powerhouse in a strategy mirroring its longtime rival on Tryon Street in Charlotte, NCNB (later NationsBank and now Bank of America). In 1995, however, it acquired First Fidelity Bancorporation of Newark, New Jersey; at one stroke becoming a major player in the Northeast. Its Northeastern footprint grew even larger in 1998, when it acquired CoreStates Financial Corporation of Philadelphia. One of CoreStates' predecessors, the Bank of North America, had been the first bank proposed, chartered and incorporated in America on December 31, 1781. A former Bank of North America branch in Philadelphia remains in operation today as a Wells Fargo branch

Wachovia

Legacy wachovia
The 1986–2002 Legacy Wachovia Logo
Wachovia Loan And Trust Company Building
The first Wachovia Loan And Trust Company Building, located in Winston-Salem.

Wachovia Corporation began on June 16, 1879 in Winston-Salem, North Carolina as the Wachovia National Bank. The bank was co-founded by James Alexander Gray and William Lemly.[9] In 1911, the bank merged with Wachovia Loan and Trust Company, "the largest trust company between Baltimore and New Orleans",[10] which had been founded on June 15, 1893. Wachovia grew to become one of the largest banks in the Southeast partly on the strength of its accounts from the R.J. Reynolds Tobacco Company, which was also headquartered in Winston-Salem.[11] On December 12, 1986, Wachovia purchased First Atlanta. 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 Wachovia one of the few companies with dual headquarters: one in Winston-Salem and one in Atlanta. In 1991, Wachovia entered the South Carolina market by acquiring South Carolina National Corporation,[12] founded as the Bank of Charleston in 1834. In 1998, 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, Wachovia made its final purchase, which was Republic Security Bank.

Merger of First Union and Wachovia

On April 16, 2001, First Union announced it would acquire Wachovia, through the exchange of approximately $13.4 billion in First Union stock. First Union offered two of its shares for each Wachovia share outstanding. The announcement was made by Wachovia chairman L.M. "Bud" Baker Jr. and First Union chairman Ken Thompson. Baker would become chairman of the merged bank, while Thompson would become president and CEO.[13] First Union was the nominal survivor, and the merged bank was based in Charlotte and adopted First Union's corporate structure and retained First Union's pre-2001 stock price history. However, as an important part of the merger, the merged bank took Wachovia's name and stock ticker symbol.

This merger was viewed with great surprise by the financial press and security analysts.[14] 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 Atlanta-based SunTrust.[15]

The deal met with skepticism and criticism. Analysts, remembering the problems with the CoreStates acquisition, were concerned about First Union's ability to merge with another large company. Winston-Salem's citizens and politicians suffered a blow to their civic pride because the merged company would be based in Charlotte. The city of Winston-Salem was concerned both by job losses and the loss of stature from losing a major corporate headquarters. First Union was concerned by the potential deposit attrition and customer loss in the city.[16] First Union responded to these concerns by placing the wealth management and Carolinas-region headquarters in Winston-Salem.

On May 14, 2001, 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.[17]

Wachovia's board of directors rejected SunTrust's offer and supported the merger with First Union. SunTrust continued its hostile takeover attempt, leading to a bitter battle over the summer between SunTrust and First Union.[18] 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.[19] On August 3, 2001, Wachovia shareholders approved the First Union deal, rejecting SunTrust's attempts to elect a new board of directors for Wachovia and ending SunTrust's hostile takeover attempt.[20]

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.[21] After entering into negotiations, the new Wachovia agreed to buy back its portfolio from Bank One in September 2001 and resell it to MBNA. Wachovia paid Bank One a $350 million termination fee.

On September 4, 2001, First Union and Wachovia officially merged. In order to prevent a repeat of the CoreStates problems, the new Wachovia took its time phasing-in the conversion of legacy Wachovia computer systems to First Union systems. The company first began converting systems in the southeast United States (where both banks had branches), before moving to First Union's branches in the Northeast, which only had to change their signs to reflect the new company name and logo. This process ended on August 18, 2003, almost 2 years after the merger took place.[22]

In comparison to the CoreStates purchase, the merger of First Union and Wachovia was billed as a success by analysts. The company's deliberate pace of conversion seems to have prevented any large-scale customer attrition. In fact, Wachovia was ranked number one in customer satisfaction among major banks by the University of Michigan's annual American Customer Satisfaction Index for every year after the merger.[23]

When Wachovia and First Union merged, Charlotte's One, Two, and Three First Union buildings became One, Two, and Three Wachovia Center (respectively), and the 55-story First Union Financial Center in downtown Miami became the Wachovia Financial Center. 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 were renamed the Wachovia Center (now known as Wells Fargo Center), Wachovia Spectrum, and Wachovia Arena at Casey Plaza (now known as Mohegan Sun Arena at Casey Plaza), respectively.

Merger and acquisition history

The following is an illustration of the company's major mergers and acquisitions and historical predecessors (up to the Wachovia and First Union merger of 2001). The list is not comprehensive.

Wachovia logo Wachovia  (merged 2001)
First Union logo First Union Corp.  (est. 1908)
First Union Corporation  (Formerly: First Union National Bank)  (est. 1958)

Union National Bank (est. 1908)

First National   Bank & Trust

CoreStates Financial (dates to 1781)

Legacy Wachovia logo Wachovia Corporation (merged 1986)
Wachovia Bank & Trust (merged 1911)

Wachovia National Bank (Formerly: Bank of Salem) (est. 1879)

Wachovia Loan & Trust  (est. 1893)

First Atlanta (Formerly Atlanta National Bank) (est. 1865)

Acquisitions

Between 2001 and 2006, Wachovia bought several other financial services companies in an attempt to become a national bank and comprehensive financial services company.

Prudential Securities

Wachovia Securities and the Prudential Securities Division of Prudential Financial, Inc. combined to form Wachovia Securities LLC on July 1, 2003. Wachovia owned a controlling 62% stake, while Prudential Financial retained the remaining 38%.[24] 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.[24]

Metropolitan West Securities

On October 22, 2003, Wachovia announced it would acquire Metropolitan West Securities, an affiliate company of Metropolitan West Financial.[25] 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 SouthTrust Corporation, a transaction valued at $14.3 billion. The merger created the largest bank in the southeast United States, 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.[26]

Failed MBNA purchase

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. Within a week of the deal's collapse, MBNA entered into an agreement to be purchased by Wachovia's chief rival, Bank of America. 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. This agreement required MBNA to pay this sum if it were ever sold to a competitor. In late 2005 Wachovia announced that it would end its relationship with MBNA and start up its own credit card division so that the bank could issue its own Visa cards.

Westcorp

Westcorp logo

Westcorp, Western Financial Bank's parent company, WFS Financial Inc. and Wachovia announced a proposed acquisition by Wachovia in September 2005. Westcorp and WFS Financial Inc. shareholders approved the acquisition on Jan. 6, 2006 and on March 1, 2006, the merger was complete. This acquisition made Wachovia the ninth largest auto finance lender in the competitive U.S. auto finance market and provided Wachovia with a small retail and commercial banking presence in Southern California.[27] On February 12, 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/World Savings Bank

Wachovia agreed to purchase Golden West Financial for a little under $25.5 billion on May 7, 2006.[28][29] This acquisition gave Wachovia an additional 285-branch network spanning 10 states. Wachovia greatly raised its profile in California, where Golden West held $32 billion in deposits and operated 123 branches.[28]

Golden West, which operated branches under the name World Savings Bank, was the second largest savings and loan in the United States. The business was a small savings and loan in the San Francisco Bay area when it was purchased in 1963 for $4 million by Herbert and Marion Sandler. Golden West specialized in option ARMs loans, marketed under the name "Pick-A-Pay." These loans gave the borrower a choice of payment plans, including the option to defer paying a part of the interest owed, which was then added onto the balance of the loan. In 2006, Golden West Financial was named the "Most Admired Company" in the mortgage services business by Fortune magazine.[30] By the time Wachovia announced its acquisition, Golden West had over $125 billion in assets and 11,600 employees. By October 2, 2006 Wachovia had closed the acquisition of Golden West Financial Corporation. The Sandlers agreed to remain on the board at Wachovia.[28]

The Sandlers sold their firm at the top of the market, saying that they were growing older and wanted to devote themselves to philanthropy. A year earlier, in 2005, World Savings lending had started to slow, after more than quadrupling since 1998. Some current and former Wachovia officials say that the merger was agreed to in days and that it was impossible to conduct a thorough vetting of World Savings' loans. They noted that the creditworthiness of World Savings borrowers edged down from 2004 to 2006, while Pick-A-Pay borrowers had credit scores well below the industry average for traditional loans. World Savings lending volume dipped again in 2006 shortly after the sale to Wachovia was initiated. In 2007, after the merger, World Savings, now known as Wachovia Mortgage began to attract more borrowers by taking a step that some regulators were starting to frown upon, and which the former World Savings management had been resisting for years: it allowed borrowers to make monthly payments based on an annual interest rate of just 1 percent. While Wachovia Mortgage continued to scrutinize borrowers' ability to manage increased payments, the move to rock-bottom rates lured customers whose financial reliability was harder to verify.[31] More than 70% of the Pick-A-Pay loans were made in California, Florida and Arizona, where home prices have declined severely. New York Times reporter Floyd Norris has called World Savings a "ticking timebomb" that created "zombie homeowners".[32]

While Wachovia Chairman and CEO G. Kennedy "Ken" Thompson had described Golden West as a "crown jewel",[33] investors did not react positively to the deal at the time. Analysts have since said that Wachovia purchased Golden West at the peak of the US housing boom. Wachovia Mortgage's mortgage-related problems led to Wachovia suffering writedowns and losses that far exceeded the price paid in the acquisition, ending up in the fire-sale of Wachovia to Wells Fargo.[34]

A. G. Edwards

AGEdwardnewlogo

On May 31, 2007, Wachovia announced plans to purchase A. G. Edwards for $6.8 billion to create the United States' second largest retail brokerage firm.[35] The acquisition closed on October 1, 2007. In early March 2008 Wachovia began to phase out the AG Edwards brand in favor of a unified Wachovia Securities.

Historical data (2000–2008)

Wachovia al

Asset & Liability

Wachovia al ratio

Asset/Liability

Wachovia income

Net Income

[36]

Wachovia, excluding subsidiaries, was the fourth largest bank at the end of 2008.

2007–2009 financial crisis

Exposed to risky loans, such as adjustable rate mortgages acquired during the acquisition of Golden West Financial in 2006, Wachovia began to experience heavy losses in its loan portfolios during the subprime mortgage crisis.[37][38]

In the first quarter of 2007, Wachovia reported $2.3 billion in earnings, including acquisitions and divestitures.[39] However, in the second quarter of 2008, Wachovia reported a much larger than anticipated $8.9 billion loss.[40]

On June 2, 2008, Wachovia chief executive officer Ken Thompson was forced to retire. He'd been head of Wachovia since 2000, while it was still known as First Union.[41] The board replaced him on an interim basis with Chairman Lanty Smith. Smith had already replaced Thompson as chairman a month earlier.

On July 9, 2008, Wachovia hired Treasury Undersecretary Bob Steel as chief executive in hopes that his experience would lead the company out of its difficulties.[42]

Government intervention

After Steel took over, he insisted that Wachovia would stay independent. However, its stock price plunged 27 percent on September 26 due to the seizure of Washington Mutual the previous night. On the same day, several businesses and institutional depositors withdrew money from their accounts in order to drop their balances below the $100,000 insured by the Federal Deposit Insurance Corporation (FDIC) – an event known in banking circles as a "silent run." Ultimately, Wachovia lost a total of $5 billion in deposits that day—about one percent of the bank's total deposits.[43] The large outflow of deposits attracted the attention of the Office of the Comptroller of the Currency, which regulates national banks. Federal regulators pressured Wachovia to put itself up for sale over the weekend. Had Wachovia failed, it would have been a severe drain on the FDIC's insurance fund due to its size (it operated one of the largest branch networks on the East Coast).[44][45]

As business halted for the weekend, Wachovia was already in FDIC-brokered talks with Citigroup and Wells Fargo. Wells Fargo initially emerged as the frontrunner to acquire the ailing Wachovia's banking operations, but backed out due to concerns over Wachovia's commercial loans. With no deal in place as September 28 dawned, regulators were concerned that Wachovia wouldn't have enough short-term funding to open for business the next day. In order to obtain enough liquidity to do business, banks usually depend on short-term loans to each other. However, the markets had been so battered by a credit crisis related to the housing bubble that banks were skittish about making such loans. Under the circumstances, regulators feared that if customers pulled out more money, Wachovia wouldn't have enough liquidity to meet its obligations. This would have resulted in a failure dwarfing that of WaMu.[45]

When FDIC Chairwoman Sheila Bair got word of Wachovia's situation, she initially decided to handle the situation like she'd handled WaMu a day earlier. Under this scenario, the Comptroller of the Currency would have seized Wachovia's banking assets (Wachovia Bank, N.A. and Wachovia Bank of Delaware, N.A.) and placed them under the receivership of the FDIC. The FDIC would have then sold the banking assets to the highest bidder. Bair called Steel on September 28 and told him that the FDIC would be auctioning off Wachovia's banking assets. Bair felt this would best protect the small banks. However, several Federal regulators, led by New York Fed President Tim Geithner, felt such a course would be politically unjustifiable so soon after WaMu's seizure.[46]

After a round of mediation between Geithner and Bair, the FDIC declared that Wachovia was "systemically important" to the health of the economy, and thus could not be allowed to fail. It was the first time the FDIC had made such a determination since the passage of a 1991 law allowing the FDIC to handle large bank failures on short notice.[46] Later that night, in an FDIC-brokered deal, Citigroup agreed to buy Wachovia's retail banking operations in an "open bank" transfer of ownership. The transaction would have been facilitated by the FDIC, with the concurrence of the Board of Governors of the Federal Reserve and the Secretary of the Treasury in consultation with the President. The FDIC's open bank assistance procedures normally require the FDIC to find the cheapest way to rescue a failing bank. However, when a bank is deemed "systemically important," the FDIC is allowed to bypass this requirement. Steel had little choice but to agree, and the decision was announced on the morning of September 29, roughly 45 minutes before the markets opened.[45][47][48][49] From this point on, Citigroup became the source of liquidity allowing Wachovia to continue to operate until the acquisition was complete.

In its announcement, the FDIC stressed that Wachovia did not fail and was not placed into receivership. In addition, the FDIC said that the agency would absorb Citigroup's losses above $42 billion; Wachovia's loan portfolio was valued at $312 billion. In exchange for assuming this risk, the FDIC would receive $12 billion in preferred stock and warrants from Citigroup.[47][50][51] The transaction would have been an all-stock transfer, with Wachovia Corporation stockholders to have received stock from Citigroup, valuing Wachovia stock at about one dollar per share for a total transaction value of about $2.16 billion. Citigroup would have also assumed Wachovia's senior and subordinated debt.[50][52] Citigroup intended to sell ten billion dollars of new stock on the open market to recapitalize its purchased banking operations.[50] The proposed closing date for the Wachovia purchase was by the end of the year, 2008.[53]

Wachovia expected to continue as a publicly traded company, retaining its retail brokerage arm, Wachovia Securities and Evergreen mutual funds.[52] At the time, Wachovia Securities had 14,600 financial advisers and managed more than $1 trillion, third in the U.S. after Merrill Lynch and Citigroup's Smith Barney.[50]

The announcement drew some criticism from Wachovia stockholders who felt the dollar-per-share price was too cheap. Some of them planned to try to defeat the deal when it came up for shareholder approval. However, institutional investors such as mutual funds and pension funds controlled 73 percent of Wachovia's stock; individual stockholders would have had to garner a significant amount of support from institutional shareholders to derail the sale. Also, several experts in corporate dealmaking told The Charlotte Observer that such a strategy is very risky since federal regulators helped broker the deal. One financial expert told the Observer that if Wachovia's shareholders voted the deal down, the OCC could have simply seized Wachovia and placed it into the receivership of the FDIC, which would then sell it to Citigroup. Had this happened, Wachovia's shareholders risked being completely wiped out.[54]

Acquisition by Wells Fargo

2011-11-22 Wells Fargo ATMs lit at night
A Wells Fargo branch in Durham, North Carolina; previously a Wachovia branch until 2011.

Though Citigroup was providing the liquidity that allowed Wachovia to continue to operate, Wells Fargo and Wachovia announced on October 3, 2008, that they had agreed to merge in an all-stock transaction requiring no government involvement. Wells Fargo announced it had agreed to acquire all of Wachovia for $15.1 billion in stock. Wachovia preferred the Wells Fargo deal because it would be worth more than the Citigroup deal and keep all of its businesses intact. Also, there is far less overlap between the banks, as Wells Fargo is dominant in the West and Midwest compared to the redundant footprint of Wachovia and Citibank along the East Coast. Both companies' boards unanimously approved the merger on the night of October 2.[55]

Citigroup explored its legal options and demanded that Wachovia and Wells Fargo cease discussions, claiming that Wells Fargo engaged in "tortious interference" with an exclusivity agreement between Citigroup and Wachovia. That agreement states in part that until October 6, 2008 "Wachovia shall not, and shall not permit any of its subsidiaries or any of its or their respective officers, directors, [...] to [...] take any action to facilitate or encourage the submission of any Acquisition Proposal.".[56][57]

Citigroup convinced Judge Charles E. Ramos of the Supreme Court of the State of New York, New York County to grant a preliminary injunction temporarily blocking the Wells Fargo deal.[58] This ruling was later overturned by Judge James M. McGuire of the Supreme Court of the State of New York, Appellate Division, First Department, partly because he believed Ramos did not have the right to rule on the case in Connecticut.[59]

On October 9, 2008, Citigroup abandoned its attempt to purchase Wachovia's banking assets, allowing the Wachovia-Wells Fargo merger to go through. However, Citigroup pursued $60 billion in claims, $20 billion in compensatory and $40 billion in punitive damages, against Wachovia and Wells Fargo for alleged violations of the exclusivity agreement.[60] Wells Fargo settled this dispute with Citigroup Inc. for $100 Million on November 19, 2010.[61] Citigroup may have been pressured by regulators to back out of the deal; Bair endorsed Wells Fargo's bid because it removed the FDIC from the picture. Geithner was furious, claiming that the FDIC's reversal would undermine the government's ability to quickly rescue failing banks. However, Geithner's colleagues at the Fed were not willing to take responsibility for selling Wachovia.[46]

The Federal Reserve unanimously approved the merger with Wells Fargo on October 12, 2008.[62]

The combined company retained the Wells Fargo name, and was based in San Francisco. However, Charlotte remained as the headquarters for the combined company's East Coast banking operations, and Wachovia Securities remained in Charlotte. Three members of the Wachovia board joined the Wells Fargo board. The merger created the largest branch network in the United States.

In filings unsealed two days before the merger approval in a New York federal court, Citigroup argued that its own deal was better for U.S taxpayers and Wachovia shareholders. It said that it had exposed itself to "substantial economic risk" by stating its intent to rescue Wachovia after less than 72 hours of due diligence. Citigroup had obtained an exclusive agreement in order to protect itself.[63] Wachovia suffered a $23.9 billion loss in the third quarter.[64]

In September 2008, the Internal Revenue Service issued a notice providing tax breaks to companies that acquire troubled banks. According to analysts, these tax breaks were worth billions of dollars to Wells Fargo. Vice Chairman Bill Thomas of the Financial Crisis Inquiry Commission indicated that these tax breaks may have been a factor in Wells Fargo's decision to purchase Wachovia.[65]

Wells Fargo's purchase of Wachovia closed on December 31, 2008. By the time Wells Fargo completed the acquisition of Wachovia, the byline "A Wells Fargo company" was added to the logo.

Controversies

Identity theft negligence

A May 2007 New York Times article described Wachovia's negligence in screening and taking action against companies linked with identity theft. With stolen identities, the companies used unsigned checks to remove funds from personal Wachovia bank accounts. In total, Wachovia accepted $142 million in unsigned checks from "companies that made unauthorized withdrawals from thousands of accounts", collecting millions of dollars in fees from them. According to Pat Meehan, a U.S. attorney for Eastern District of Pennsylvania, Wachovia received "thousands of warnings that it was processing fraudulent checks, but ignored them".[66]

On April 25, 2008, Wachovia agreed to pay up to $144 million to end the investigation without admitting wrongdoing. The investigation found that Wachovia had failed to conduct suitable due diligence, and that it would have discovered the thefts if it had followed normal procedures. The penalty is one of the largest ever demanded by the Office of the Comptroller of the Currency.[67]

Latin drug cartel money laundering

In April 2008, the Wall Street Journal reported that federal prosecutors had initiated a probe into Wachovia and other U.S. banks for aiding drug money laundering by Mexican and Colombian money-transfer companies, also known as casas de cambio. These companies help Mexican immigrants in the United States send remittances back to family in Mexico, but it is widely known that they also present a significant money-laundering risk. However, not only is it a "lucrative industry" that is able to charge high fees, but Wachovia also viewed it as a way to gain a foothold in the Hispanic banking market.[68]

In March 2010, Wachovia admitted "serious and systemic" violations of the Bank Secrecy Act that allowed Mexican and Colombian drug cartels[69] to launder $378.4 billion between 2004 and 2007, the "largest violation of the Bank Secrecy Act".[70] It negotiated a deferred prosecution agreement with the Justice Department to resolve criminal charges for willfully failing to set up an effective anti-money-laundering program. It agreed to forfeit $110 million and pay a $50 million fine to the U.S. Treasury.

Reports in Bloomberg Businessweek in June 2010[71] and The Observer in April 2011 shed light on the extent to which Wachovia went to turn a blind eye, including by ignoring the warnings and suspicious activity reports (SARs) of its London-based director of anti-money-laundering.[72]

Chief executive officers

See also

References

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External links

2008–09 Philadelphia 76ers season

The 2008–09 Philadelphia 76ers season was the 70th season of the franchise, 60th in the National Basketball Association (NBA). The team finished with a .500 record.

The only two things memorable about the season is that the team went back to the classic uniform style the team wore in the 1980s, and the Sixers defeated the Chicago Bulls in a game played at The Spectrum, the teams home from 1967–1996.

The team signed Elton Brand to a 5-year $79 million dollar contract.

2009–10 Philadelphia 76ers season

The 2009–10 Philadelphia 76ers season was the 71st season of the franchise, 61st in the National Basketball Association (NBA). The season was memorable on December 2 when Allen Iverson returned to the team for his second stint with the Sixers. However, it was short lived as he left the team in February to attend to his then 4-year-old daughter Messiah's health issues. Although Iverson was selected to play in what could have been his 11th consecutive All-Star Game, he backed out due to personal reasons. In March, it was announced that Iverson would not return to the 76ers for the rest of the season. The Sixers season ended with a disappointing 27-55 record. After the season, Eddie Jordan was fired, replacing him with former Sixer Doug Collins for the next season. Iverson would later on play overseas following the season.

Duke Energy Center

The Duke Energy Center is a 786-foot (240 m) tall, 48-floor (54 floors including mechanical floors) skyscraper in Charlotte, North Carolina. When completed in 2010, it was the largest building in Charlotte (in square footage), second tallest building in Charlotte, 63rd tallest building in the United States, and the tallest in the world to use precast double tees. The building is named for its anchor tenant, Duke Energy, and both the tower and the adjacent cultural arts campus are owned by Wells Fargo.

Sonnenschein will use 35,000 square feet (3,300 m2) on the 34th and 35th floors and Deloitte will use 82,000 square feet (7,600 m2).Originally, the building was to be known as the Wachovia Corporate Center. It was to replace One Wachovia Center as the headquarters of Wachovia. Wachovia was to occupy 450,000 square feet (42,000 m2) of the 1,500,000 square feet (140,000 m2) tower. Wells Fargo plans to use five of its 14 floors.

First Union

First Union Corporation was a bank holding company that provided commercial and retail banking services in eleven states in the eastern U.S. First Union also provided various other financial services, including mortgage banking, credit card, investment banking (First Union Securities), investment advisory, home equity lending, asset-based lending, leasing, insurance, international and securities brokerage services and private equity (First Union Capital Partners), through other subsidiaries.

In September 2001, First Union completed a merger with Wachovia National Bank to become Wachovia Corporation, one of the largest financial holding companies in the US. As of the end of 2000, First Union had over $170 billion of total assets, over 70,000 employees and nearly 2,200 branches.

List of investment banks

The following list catalogues the largest, most profitable, and otherwise notable investment banks. This list of investment banks notes full-service banks, financial conglomerates, independent investment banks, private placement firms and notable acquired, merged, or bankrupt investment banks. As an industry it is broken up into the Bulge Bracket (upper tier), Middle Market (mid-level businesses), and boutique market (specialized businesses).

Mohegan Sun Arena at Casey Plaza

Mohegan Sun Arena at Casey Plaza (originally Northeastern Pennsylvania Civic Arena and Convention Center, formerly First Union Arena at Casey Plaza and Wachovia Arena at Casey Plaza) is an 8,050-seat multi-purpose arena located in Wilkes-Barre Township, Luzerne County, Pennsylvania, just south of the city of Wilkes-Barre, managed by SMG.

One Wells Fargo Center

One Wells Fargo Center is a skyscraper in Charlotte, North Carolina. It is the headquarters for Wells Fargo's east coast division. At 588 feet (179 m) tall and 42 stories, it is the fourth tallest building in Charlotte. When it was opened on September 14, 1988, it was the tallest building in North Carolina. In 1992, One Wells Fargo Center was surpassed by the Bank of America Corporate Center, and again in 2002 by Hearst Tower, another Bank of America building. It is considered Charlotte's first postmodern high-rise.

Pamlico Capital

Pamlico Capital, formerly Wachovia Capital Partners and previously First Union Capital Partners, is an independent private equity firm focused on growth capital and leveraged buyout investments in middle-market companies in the business services, technology services, telecommunications and healthcare industries.

The firm, which is based in Charlotte, North Carolina, was founded in 1988 as the private equity investment arm of First Union Corporation. The firm has invested approximately $3.8 billion in more than 200 companies since inception across two funds.

The firm is named for the Pamlico Sound, which is located in North Carolina.

Prudential Securities

Prudential Securities, also formerly known as Prudential Securities Incorporated (PSI), was the financial services arm of the insurer, Prudential Financial. In 2003, Prudential Securities was merged into Wachovia Securities, a division of Wachovia Bank.

Riverplace Tower

The Riverplace Tower is a 28-floor office building on the south bank of the St. Johns River in Jacksonville, Florida. At the time of its construction, it was the tallest building in the state of Florida and was the defining landmark in Jacksonville's skyline. On April 18, 2012, the American Institute of Architects's Florida Chapter placed the building on its list of Florida Architecture: 100 Years. 100 Places as the Riverplace Tower / Formerly Gulf Life Tower.

Southeast Financial Center

Southeast Financial Center is a two-acre development in Miami, Florida, United States. It consists of a 765 feet (233 m) tall office skyscraper and its 15-story parking garage. It was previously known as the Southeast Financial Center (1984–1992), the First Union Financial Center (1992–2003), and the Wachovia Financial Center (2003-2011). In 2011, it retook its old name of Southeast Financial Center as Wachovia became Wells Fargo and moved into its new headquarters, the nearby Wells Fargo Center building.

When topped-off in August 1983, it was the tallest building south of New York City and east of the Mississippi River, taking away the same title from the Westin Peachtree Plaza Hotel, in Atlanta, Georgia. It remained the tallest building in the southeastern U.S. until 1987, when it was surpassed by One Atlantic Center in Atlanta and the tallest in Florida until October 1, 2003, when it was surpassed by the Four Seasons Hotel and Tower, also in Miami. It remains the tallest office tower in Florida and the third tallest building in Miami.

Spectrum (arena)

The Spectrum (later known as CoreStates Spectrum, First Union Spectrum and Wachovia Spectrum) was an indoor arena in Philadelphia, Pennsylvania, United States. Opened in the fall of 1967 as part of what is now known as the South Philadelphia Sports Complex, after several expansions of its seating capacity it accommodated 18,168 for basketball and 17,380 for ice hockey, arena football, indoor soccer, and box lacrosse.

The last event at the Spectrum was a Pearl Jam concert on October 31, 2009. The arena was demolished between November 2010 and May 2011.

State of Georgia Building

The State of Georgia Building, alternately referenced as 2 Peachtree Street, is a 44-story, 566 feet (173 m) skyscraper located in downtown Atlanta, Georgia, U.S.. Built in 1966, the building was the tallest building in the Southeast at the time. It was Atlanta's tallest until 1976, when the Westin Peachtree Plaza surpassed it. It was built on the site of the Peachtree Arcade, A. Ten Eyck Brown's 1917 covered shopping arcade which connected Peachtree and Broad streets. 2 Peachtree Street was originally constructed as the new headquarters building for First National Bank of Atlanta, also known as First Atlanta, replacing its older (1905) headquarters building next door (the lower half of which remains today as Georgia State's Andrew Young School of Policy Studies). It was designed by a partnership of Atlanta architectural firm FABRAP and New York firm Emery Roth & Sons. First Atlanta was acquired by the holding company for Wachovia Bank in 1985, but continued to operate under its own charter until 1991. In 1991, under new liberalized banking laws, First Atlanta was merged into the charter of Wachovia Bank of Georgia. Shortly thereafter, Wachovia moved its Georgia offices to 191 Peachtree and 2 Peachtree Street was acquired by the state of Georgia for government offices.

Wachovia LPGA Classic

The Wachovia LPGA Classic was an annual golf tournament for professional female golfers on the LPGA Tour that took place at the Berkleigh Country Club in Kutztown, Pennsylvania from 1996 through 2004. Betsy King, LPGA Tour player and native of nearby Reading, served as the tournament host.

Tournament names through the years:

1996-1997: CoreStates Betsy King Classic

1998-2002: First Union Betsy King Classic

2003-2004: Wachovia LPGA Classic Hosted by Betsy King

Wachovia Securities

Wachovia Securities was the trade name of Wachovia's retail brokerage and institutional capital markets and investment banking subsidiaries. Following Wachovia's merger with Wells Fargo and Company on December 31, 2008, the retail brokerage became Wells Fargo Advisors on May 1, 2009 and the institutional capital markets and investment banking group became Wells Fargo Securities on July 6, 2009.

Waterman-Smith Building (Mobile)

The Waterman-Smith Building, previously known as the Waterman Building, the Southtrust Bank Building, the Wells-Fargo Building, and the Wachovia Building is a high-rise in the U.S. city of Mobile, Alabama. Completed in 1947, the building rises 230 feet (70 m) and 18 stories. The Waterman-Smith Building is the 7th-tallest building in Mobile, and is an example of early modern architecture.Completed in 1947, the Waterman-Smith Building was the only high-rise to be constructed in Mobile from the 1929 completion of the Regions Bank Building to 1965, when the GM Building was completed. The Waterman-Smith Buildingwe was constructed on the site of the Bienville Hotel, a low-rise seven-story hotel. The structure was the former home of the Waterman Globe, a 12-foot (4 m) diameter sphere created by Rand McNally that depicts the world with the political boundaries of the 1940s. The globe was a local attraction but was removed from the building in 1973 and deconstructed. It was later restored to its original state and moved to the University of South Alabama's Mitchell Center in 1999.

Wells Fargo

Wells Fargo & Company is an American multinational financial services company headquartered in San Francisco, California, with central offices throughout the United States. It is the world's fourth-largest bank by market capitalization and the third largest bank in the US by total assets. Wells Fargo is ranked #26 on the 2018 Fortune 500 rankings of the largest US corporations by total revenue. In July 2015, Wells Fargo became the world's largest bank by market capitalization, edging past ICBC, before slipping behind JPMorgan Chase in September 2016, in the wake of a scandal involving the creation of over 2 million fake bank accounts by Wells Fargo employees. Wells Fargo fell behind Bank of America to third by bank deposits in 2017 and behind Citigroup to fourth by total assets in 2018.The firm's primary operating subsidiary is national bank Wells Fargo Bank, N.A., which designates its main office as Sioux Falls, South Dakota. Wells Fargo in its present form is a result of a merger between San Francisco–based Wells Fargo & Company and Minneapolis-based Norwest Corporation in 1998 and the subsequent 2008 acquisition of Charlotte-based Wachovia. Following the mergers, the company transferred its headquarters to Wells Fargo's headquarters in San Francisco and merged its operating subsidiary with Wells Fargo's operating subsidiary in Sioux Falls. Along with JPMorgan Chase, Bank of America, and Citigroup, Wells Fargo is one of the "Big Four Banks" of the United States. As of June 2018, it had 8,050 branches and 13,000 ATMs. In 2018 the company had operations in 35 countries with over 70 million customers globally.In February 2014, Wells Fargo was named the world's most valuable bank brand for the second consecutive year in The Banker and Brand Finance study of the top 500 banking brands. In 2016, Wells Fargo ranked 7th on the Forbes Magazine Global 2000 list of largest public companies in the world and ranked 27th on the Fortune 500 list of the largest companies in the US. In 2015, the company was ranked the 22nd most admired company in the world, and the 7th most respected company in the world. As of December 2018, the company had a Standard & Poors credit rating of A−. However, for a brief period in 2007, the company was the only AAA‑rated bank, reflecting the highest credit rating from two firms.On February 2, 2018, the US Federal Reserve Bank barred Wells Fargo from growing its nearly US$2 trillion-asset base any further, based upon years of misconduct, until Wells Fargo fixes its internal problems to the satisfaction of the Federal Reserve. In April 2018, The Wall Street Journal reported that the US Department of Labor had launched a probe into whether Wells Fargo was pushing its customers into more expensive retirement plans as well as into retirement funds managed by Wells Fargo itself. Subsequently in May 2018, The Wall Street Journal reported that Wells Fargo's business banking group had improperly altered documents about business clients in 2017 and early 2018. In June 2018, Wells Fargo began retreating from retail banking in the Midwestern United States by announcing the sale of all its physical bank branch locations in Indiana, Michigan, and Ohio to Flagstar Bank.

Wells Fargo Center (Philadelphia)

The Wells Fargo Center is a multi-purpose indoor arena located in Philadelphia. It is the home arena of the Philadelphia Flyers of the National Hockey League (NHL), the Philadelphia 76ers of the National Basketball Association (NBA), the Philadelphia Soul of the Arena Football League (AFL) and the Philadelphia Wings of the National Lacrosse League (NLL). The arena lies at the southwest corner of the South Philadelphia Sports Complex, which includes Lincoln Financial Field, Citizens Bank Park, and Xfinity Live!.

The Wells Fargo Center, originally called Spectrum II, was completed in 1996 to replace the Spectrum as the home arena of the 76ers and Flyers, on the former site of John F. Kennedy Stadium at a cost of $210 million, largely privately financed (though the city and state helped to pay for the local infrastructure). It is owned by Comcast Spectacor, which also owns the Flyers, and is operated by its arena-management subsidiary, Global Spectrum. Since opening, it has been known by a number of different names through naming rights deals and bank mergers, including CoreStates Center from 1996 to 1998, First Union Center from 1998 to 2003, and Wachovia Center from 2003 to 2010. Since 2010, naming rights have been held by financial services company Wells Fargo, after their merger with Wachovia.

In addition to hosting home games for its main tenants, the arena has been the site of a number of other notable athletic events including Games 1 and 2 from the 1997 and Games 3, 4 and 6 of the 2010 Stanley Cup Finals, Games 3, 4 and 5 of the 2001 NBA Finals, and various collegiate events for the National Collegiate Athletic Association (NCAA). Wells Fargo Center has hosted two political conventions, hosting the 2000 Republican National Convention and 2016 Democratic National Convention. The arena is a regular venue for concerts and WWE events. The arena has a concert seating capacity of 21,000 seated and at least 21,500 standing.

Wells Fargo Championship

The Wells Fargo Championship is a professional golf tournament in North Carolina on the PGA Tour. Held in early May at the Quail Hollow Club in Charlotte, it has attracted some of the top players on the tour. It debuted in 2003 as the Wachovia Championship and was known in 2009 and 2010 as the Quail Hollow Championship. In 2017, the tournament offered a $7.5 million purse with a winner's share of $1.35 million.

From 2004–06 and 2011–13, the tournament ended in a playoff. Additionally, the event is known to have one of the tougher finishes on tour with 16, 17, and 18, commonly known as the "Green Mile," often ranked among the PGA Tour's toughest holes. The majority of the charitable proceeds from the tournament benefit Teach for America. The tournament is organized by Champions for Education, Inc.In 2017, the tournament was held on the coast in Wilmington at Eagle Point Golf Club, as Quail Hollow hosted the PGA Championship in mid-August. Wilmington hosted the Azalea Open on tour in the 1950s and 1960s at the Donald Ross-designed Cape Fear Country Club; it was a tune-up event for The Masters through 1965, part of the city's Azalea Festival. Quail Hollow will host again in 2018 after a one year absence.

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