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 through First Union Capital Partners, and through other subsidiaries.

In September 2001, First Union completed their acquisition of Wachovia National Bank to become Wachovia Corporation, which used to be one of the largest financial holding companies in the U.S. As of the end of 2000, First Union had over $171 billion of total assets, over 70,000 employees and 2,193 branches.[2] After their acquisition of Wachovia, they assumed the name and stock ticker symbol of the latter company.

History

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

The bank merged with First National Bank and Trust Company of Asheville in 1958 to become First Union National Bank of North Carolina.[3]

CoreStates

In April 1998, First Union acquired CoreStates Financial Corporation, headquartered in Philadelphia. At the time, this was the largest merger in U.S. banking history.[12]

CoreStates traced its history to 1781 and the Bank of North America, the first bank chartered in the United States. Once the merger finalized, First Union claimed 1781 as its founding date. It continued to operate The Bank of North America's first branch at 6th and Chestnut streets in Philadelphia, which opened in 1782. It is now the longest continuously operated branch in the nation, and is part of Wells Fargo through multiple subsequent mergers.[13]

The acquisition of CoreStates brought problems. Many of these arose when First Union attempted to integrate the CoreStates and First Union computer systems too rapidly. Initially, CoreStates’ tellers received insufficient training with the new First Union systems and the two systems were unable to communicate with each other. This led to problems with account access and payments not correctly applied to loans.

Acquisition of Wachovia

On April 16, 2001, First Union announced it would merge with Wachovia. 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 Atlanta-based SunTrust.[17]

As an important part of the deal, while First Union was the nominal survivor, the merged company would assume the Wachovia name and stock ticker symbol (though it retained First Union's pre-2001 stock price history). 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 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, home to First Union. City leaders were 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. 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.

type	Public
traded as	‡R1R‡
foundation	June 2, 1908
defunct	September 4, 2001
fate	Acquired Wachovia National Bank to become Wachovia Corporation; assuming the name of the former company
founder	H.M. Victor
successor	Wells Fargo (formerly Wachovia)
location	Charlotte, North Carolina, U.S.
areas served	2,193 branches in 11 states
industry	Banking
products	Financial services
assets	$171 billion‡R2R‡
subsid	CoreStates Financial Wachovia National Bank
homepage	www.firstunion.com
num employees	71,262‡R2R‡

History

CoreStates

Bowles Hollowell Conner

The Money Store

Acquisition of Wachovia

References