As the battle over the remains of the faltering Wachovia banking embire continues, we learn from court papers that the Federal Deposit Insurance Corp. (FDIC) was just days away from seizing the failing bank.
The latest news suggests Wells Fargo and Citibank will split Wachovia at a cost of $15 billion or more while the fate of the area’s largest bank lies in the balance.
Federal officials continued their fervent quest Wednesday to reach an agreement between Citigroup and Wells Fargo over the fate of Wachovia Corp. — which could include the splitting up of the bank.
Discussions between the Federal Reserve, Citigroup and Wells Fargo continue, said a person familiar with the situation, adding that all options are being reviewed. The person spoke on condition of anonymity because of the sensitive nature of the talks.
According to a court transcript of a teleconference between Wachovia and Citigroup lawyers and U.S. District Judge Lewis Kaplan held Wednesday, the negotiations center on "a possible grand solution." That could involve splitting Wachovia between Wells Fargo and Citigroup.
"There are negotiations between Wells Fargo and Citi about a possible grand solution that would preserve the shareholder value for Wachovia as represented by the Wells Fargo deal, but that would involve not a single choice between Citigroup and Wells Fargo," said David Boies, a lawyer for Wachovia, according to the transcript.
After the battle for the Charlotte, N.C.-based bank moved to both state and federal court over the weekend, the parties agreed Monday to a cease-fire of all litigation at the urging of Federal Reserve officials. But that agreement expired at noon Wednesday without a resolution on the fate of Wachovia. Citigroup and Wells Fargo agreed Wednesday to extend the standstill until 8 a.m. EST Friday.
In its march to bigness and failure, Charlotte-based Wachovia took over two Virginia-owned banks: Old Dominion and Central Fidelity. Amy and I banked at Central Fidelity while living in Arlington and it was a good local bank with outstanding customer service. That customer service vanished when Wachovia took over and we vanished as well.
Sometime in the near future, the Wachovia name will disappear from Roanoke’s tallest building. It won’t be the first bank name to disappear from the area and I doubt it will be the last.
When I lived in Roanoke from 1965-69, the dominant banks in the area were First National Exchange, Mountain Trust and Colonial-American National banks. All had offices on Jefferson Street. All are long gone.
In 1981, we moved from Illinois to Arlington and transferred our accounts to Virginia National Bank, which had a branch just across the street from our condo. After a few years, VNB and Farmers National Bank merged and they became Sovran Bank, then another bank took them over and they became NationsBank until Bank of America bought the whole shebang.
When First National Bank of Christiansburg began construction on its Floyd Branch, it was an area bank headquartered just down the road. Then it merged with a Charlottesville Bank and became Stellar One with corporate offices in Albermarle County.
Blue Ridge Bank merged with nine other Virginia banks to become Carter Bank & Trust with headquarters in Martinsville.
So far, The Bank of Floyd remains the county’s only locally-owned and operated bank although the bank has more branches in Roanoke County than Floyd.