1996.E2.80.93present History of Wells Fargo

1 1996–present

1.1 takeover of first interstate bancorp (1996)
1.2 merger norwest (1998)
1.3 acquisitions in 1999–2001

1.3.1 internet services


1.4 acquisitions in 2007 , 2008
1.5 management changes (2007)
1.6 acquisition of wachovia (2008)
1.7 investment u.s. treasury during 2008 financial crisis
1.8 establishment of wells fargo securities

1996–present
takeover of first interstate bancorp (1996)

late in 1995, wells fargo began pursuing hostile takeover of first interstate bancorp, los angeles-based bank holding company $58 billion in assets , 1,133 offices in california , 12 other western states. wells fargo had long been interested in acquiring first interstate , made hostile bid first interstate in october 1995 valued @ $10.8 billion.

other banks came forward potential white knights , including norwest corporation, bank 1 corporation, , first bank system. latter made serious bid first interstate, 2 banks reaching formal merger agreement in november valued @ $10.3 billion. first bank ran regulatory difficulties way had structured offer , forced bow out of takeover battle in mid-january 1996. talks between wells fargo , first interstate led within days merger agreement. in january 1996, wells fargo announced acquisition of first interstate bancorp $11.6 billion. newly enlarged wells fargo had assets of $116 billion, loans of $72 billion, , deposits of $89 billion. ranked ninth largest bank in united states.

wells fargo aimed generate $800 million in annual operational savings out of combined bank within 18 months, , upon completion of takeover announced workforce reduction of 16 percent, or 7,200 positions, end of 1996. merger, however, turned disastrous efforts consolidate operations, placed on ambitious timetable, led major problems. computer system glitches led lost customer deposits , bounced checks. branch closures led long lines @ remaining branches. there culture clash between 2 banks , customers. wells fargo had been @ forefront of high-tech banking, emphasizing atms , online banking, small-staffed supermarket branches, @ expense of traditional branch banking. contrast, first interstate had emphasized personalized relationship banking, , customers used dealing tellers , bankers not machines. led mass exodus of first interstate management talent , alienation of numerous customers, many of whom took banking business elsewhere.

merger norwest (1998)

the financial performance of wells fargo, stock price, suffered botched merger, leaving bank vulnerable being taken on banking consolidation continued unabated. time, wells fargo entered friendly merger agreement norwest corporation of minneapolis, announced in june 1998. deal completed in november of year , valued @ $31.7 billion. although norwest nominal survivor, merged company retained wells fargo name because of latter s greater public recognition , former s regional connotations. merged company remained based in san francisco based on bank s $54 billion in deposits in california versus $13 billion in minnesota. head of wells fargo, paul hazen, named chairman of new company, while head of norwest, richard kovacevich, became president , ceo. however, wells fargo retains norwest s pre-1998 stock price history, , sec filings before 1998 listed under norwest, not wells fargo.

the new wells fargo started off nation s seventh largest bank $196 billion in assets, $130 billion in deposits, , 15 million retail banking, finance, , mortgage customers. banking operation included more 2,850 branches in 21 states ohio california. norwest mortgage had 824 offices in 50 states, while norwest financial had 1,350 offices in 47 states, ten provinces of canada, caribbean, latin america, , elsewhere.

the integration of norwest , wells fargo proceeded more smoothly combination of wells fargo , first interstate. key reason process allowed progress @ slower , more manageable pace of earlier merger. plan allowed 2 3 years complete integration, while cost-cutting goal more modest $650 million in annual savings within 3 years. rather mass layoffs typical of many mergers, wells fargo announced workforce reduction of 4,000 5,000 employees on two-year period.

acquisitions in 1999–2001

continuing norwest tradition of making numerous smaller acquisitions each year, wells fargo acquired 13 companies during 1999 total assets of $2.4 billion. largest of these february purchase of brownsville, texas-based mercantile financial enterprises, inc., had $779 million in assets. acquisition pace picked in 2000 wells fargo expanding retail banking 2 more states: michigan, through buyout of michigan financial corporation ($975 million in assets), , alaska, through purchase of national bank of alaska, $3 billion of assets. wells fargo acquired first commerce bancshares, inc. of lincoln, nebraska, had $2.9 billion in assets, , seattle-based regional brokerage firm, ragen mackenzie group incorporated. in october 2000, wells fargo made largest deal since norwest-wells fargo merger when paid $3 billion in stock first security corporation, $23 billion bank holding company based in salt lake city, utah, , operating in 7 western states. wells fargo thereby became largest banking franchise in terms of deposits in new mexico, nevada, idaho, , utah; largest banking franchise in west overall. following completion of first security acquisition, wells fargo had total assets of $263 billion 140,000 employees.

in 2001, wells fargo acquired h.d. vest financial services $128 million, sold in 2015 $580 million.

there speculation next stage wells fargo might involve major merger eastern bank create nationwide retail bank.

internet services

wells fargo launched personal computer banking service in 1989 , first bank introduce access banking accounts on web in may 1995.

acquisitions in 2007 , 2008

in january 2007, wells fargo acquired placer sierra bank. in may 2007, wells fargo acquired greater bay bancorp, had $7.4 billion in assets, in $1.5 billion transaction. in june 2007, wells fargo acquired cit s construction unit. in january 2008, wells fargo acquired united bancorporation of wyoming. in august 2008, wells fargo acquired century bancshares of texas.

management changes (2007)

in june 2007, john stumpf named chief executive officer of company , richard kovacevich remained chairman.

acquisition of wachovia (2008)

a former wachovia branch converted wells fargo in fall of 2011 in durham, north carolina.

during financial panic of september 2008, wells fargo made bid purchase troubled wachovia corporation. although @ first inclined accept september 29 agreement brokered federal deposit insurance corporation sell banking operations citigroup $2.2 billion, on october 3, wachovia accepted wells fargo s offer buy of financial institution $15.1 billion.

on october 4, 2008, new york state judge issued temporary injunction blocking transaction going forward while situation sorted out. citigroup alleged had exclusivity agreement wachovia barred wachovia negotiating other potential buyers. injunction overturned late in evening on october 5, 2008, new york state appeals court. citigroup , wells fargo entered negotiations brokered fdic reach amicable solution impasse. negotiations failed. sources citigroup unwilling take on more risk $42 billion have been cap under previous fdic-backed deal (with fdic incurring losses on $42 billion). citigroup did not block merger, indicated seek damages of $60 billion breach of alleged exclusivity agreement wachovia.

on october 9, citigroup ended effort block sale of wachovia wells fargo, though still threatened sue both $60 billion.

the merger created coast-to-coast super-bank $1.4 trillion in assets , 48 million customers, , expanded wells fargo s operations 9 eastern , southern states. there big overlaps in operations in california , texas, less in nevada, arizona, , colorado. in contrast, citigroup deal have resulted in substantial overlap, since both banks operations heavily concentrated in east , southeast. proposed merger approved federal reserve $12.2 billion all-stock transaction on october 12 in unusual sunday order. acquisition completed on january 1, 2009.

investment u.s. treasury during 2008 financial crisis

on october 28, 2008, wells fargo recipient of $25b of emergency economic stabilization act federal bail-out in form of preferred stock purchase. tests federal government revealed wells fargo needs additional $13.7 billion in order remain capitalized if economy deteriorate further under stress test scenarios. on may 11, 2009 wells fargo announced additional stock offering completed on may 13, 2009 raising $8.6 billion in capital. remaining $4.9 billion in capital planned raised through earnings. on december 23, 2009, wells fargo redeemed $25 billion of series d preferred stock issued u.s. treasury under troubled asset relief program’s capital purchase program. part of redemption of preferred stock, wells fargo paid accrued dividends of $131.9 million, bringing total dividends paid u.s. treasury , u.s. taxpayers $1.441 billion since preferred stock issued in october 2008.

establishment of wells fargo securities

duke energy center, home of wfs

wells fargo securities established in 2009 house wells fargo’s new capital markets group obtained during wachovia acquisition. prior point, wells fargo had little no participation in investment banking activities, though wachovia had established investment banking practice operated under wachovia securities banner.

wachovia s institutional capital markets , investment banking business arose merger of wachovia , first union. first union had bought bowles hollowell connor & co. on april 30, 1998 adding merger , acquisition, high yield, leveraged finance, equity underwriting, private placement, loan syndication, risk management, , public finance capabilities.

legacy components of wells fargo securities include wachovia securities, bowles hollowell connor & co., barrington associates, halsey, stuart & co., leopold cahn & co., bache & co. , prudential securities, , investment banking arm of citadel llc.