Walking into the local branch of Wachovia Bank at the intersection of N. West and W. Broad Streets in Falls Church this week, you couldn’t tell from looking around that anything had happened.
The massive fire sale on Wall Street Monday morning to avert the collapse of the gigantic Wachovia organization, the fourth-largest bank holding company in the U.S, requiring emergency action by both Citibank and the Federal Deposit Insurance Corporation (FDIC), did not result in a visible beehive of frenzy on Broad Street in Falls Church.
On the contrary, there was an almost-eerie mood of calm in the popular Falls Church branch. Wachovia, nationally, experienced a run on its retail accounts last week, precipitated by depositor fears, driving it near bankruptcy over the weekend.
However, as one regular customer noted, “there was no panic here.” He attributed it to the fact that personal relationships had been cultivated with many customers over the years. “I, for one, came to them with my concerns, and I was advised in detail on appropriate actions, and my fears were allayed.”
In particular, he credited the affable financial specialist Carolina Vasquez, who has been at the branch for a decade. He noted that she went through the savings and loan crisis as a banker in Texas in the late 1980s, and has been able to hold the hands of a lot of her customers as news of Wachovia’s problems began to mount earlier this year. Branch manager Jamin Olney, who has been there for two years, was also credited.
In fact, because the Falls Church branch has reportedly been a strong performer in the region, its lobby was just enhanced with a modest, more user-friendly renovation.
Asked Monday, a branch employee told a customer that all branch employees were informed of the sale of the bank to Citibank by e-mail shortly after the news broke at about 8:30 a.m. Monday.
Everyone was told it is “business as usual,” he told the customer, and by mid-afternoon, calm continued to prevail and only a small trickle of customers was meandering into the bank.
According to wire reports, Wachovia is selling its retail bank, corporate and investment bank, and wealth management businesses to Citigroup, pending shareholder and regulatory approval.
The terms of the transaction were enhanced by deft moves on the part of the FDIC to help guarantee the coverage of bad debt losses.
The FDIC entered into a loss-sharing arrangement on a pre-identified pool of loans. Citigroup will absorb up to $42 billion of losses of the $312 billion pool, and the FDIC will absorb any losses beyond that. In return, Citibank has granted the FDIC $12 billion in preferred stock and warrants to compensate it for the risk.
Despite initial reports that Wachovia would retain its name under the new arrangement, this is now uncertain, according to sources, and whatever major shifts in name and personnel matters probably won’t become evident before January.
The purchase of the securities division of Wachovia was not offered by Citibank because of its size, having processed $250 billion in revenues in retail brokerage services in the last year, with operations in the U.S. and six Latin American countries.
Everyone, however, concedes that most issues remain up in the air, concerning the details of Wachovia’s open banking activities and new corporate arrangements. The goal, according to one news report, is to have no perceptible changes for Wachovia customers.
Name changes, however, are not new to the Falls Church branch of Wachovia. It was originally Dominion Bank, located in the small shopping center adjacent to the Amigo Market a half-block away until the corner location was acquired, and the new drive-through bank constructed. The name was then changed to the First Union National Bank when that bank bought Dominion, before First Union was acquired by Wachovia.
Susanna Ojeda, had been a beloved and legendary teller for a whopping 30 years at the branch, and a big hoopla attended her retirement two years ago. Tellers now reflect the language and ethnic diversity in the region.
Vasquez, who is now among the most tenured bankers in Falls Church, hails from Texas and is fluent in Spanish. Her empathy and “bedside manner” was hailed by customers for calming many through the recent troubled times.
