December 2, 2009
Nearly a year after purchasing Wachovia, Wells Fargo may be prepared to consolidate the operations of the two banks.
The Los Angeles Times reports Wells Fargo will close 122 branches in California, as part of that consolidation. The paper quotes a bank official as saying that it will mostly be current Wachovia branches -- smaller and located near larger Wells Fargo branches -- that will be closed.
Even with the downsizing, Wells Fargo will remain one of the larger banks in California, with more than 1,000 branches in the state.
Wells Fargo brokered a deal to purchase Wachovia in the wake of last year's banking sector meltdown, when it suddenly became evident that a number of institutions were insolvent, because of their investment in mortgage backed securities.
In October 2008, The Charlotte Observer reported Wachovia experienced a "silent run" as large customers closed out their accounts, fearful of a collapse. As a result, there were real concerns the bank wouldn't be able to remain open.
The situation became urgent after Wachovia executives noticed an unusual number of withdrawals the day after the Washington Mutual failure. Many of the withdrawals were made by large corporate depositors, who had more than $100,000 in the bank. As a result, the bank's operating capital fell to dangerously low levels.
