First Union Corporation is the parent company of banks providing commercial and retail banking services in eleven states in the US The first part of the United States also provides a variety of other financial services, including banking mortgages, credit cards, investment banking (First Union Securities), investment advisers, home equity loans, asset-based loans, leasing, insurance, international brokerage and securities services, and private equity (First Union Capital Partners), through other subsidiaries. In September 2001, First Union completed the merger with Wachovia National Bank to become Wachovia Corporation, one of the largest financial holding companies in the US. By the end of 2000, First Union had over $ 170 billion in total assets, more than 70,000 employees and nearly 2,200 branches.
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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 joined the First National Bank and the Trust Company of Asheville in 1958 to become the First Union National Bank of North Carolina. In 1964, the bank added the Cameron-Brown company, a mortgage and insurance banking company.
First Union Corporation was founded in 1967. In February 1968, Cameron-Brown Co., a $ 10 billion mortgage banker created in 1955 from the merger of Fidelity Bond & Mortgage Co. (starting in 1946 in Raleigh) and Brown-Hamel Mortgage Co. from Greensboro, changed its name to First Union Mortgage Corp. to rival its parent company. As part of the reorganization of the company in 1968, the forerunner of First Union National Bank and First Union Mortgage Corporation, a mortgage banking company acquired in 1964 became a subsidiary of First Union Corp. which created the structure of the bank used until the 2001 merger.
Beginning in 1985, with the Supreme Court decision enforcing regional banking laws between countries, First Union focused on aggressive growth strategies and from 1985 through merger with Wachovia in 2001, First Union completed more than 90 banking-related acquisitions, of which 50 were resolved between 1985 and 1995. Atlantic National Bank of Jacksonville, Florida, joined First Union in 1985.
In an agreement announced in June 1992, First Union acquired South Carolina Federal Corp., making First Union the third largest bank in South Carolina by deposit, but also giving North Carolina-based banks most of the assets of financial institutions in South Carolina , something that has not happened in any country since regional banking began in 1986.
In 1995, First Union acquired First Fidelity of Newark, New Jersey to expand to the Northeast.
CoreStates
In April 1998, First Union acquired CoreStates Financial Corporation, headquartered in Philadelphia. At that time, this was the biggest merger in US banking history.
CoreStates traces its history to 1781 and Bank of North America, the first bank to be hired in the United States. After the merger was completed, First Union claimed 1781 as the date of its founding. It continues to operate the first branch of Bank of North America at Sixth and Chestnut in Philadelphia which opened in 1782. It is now the longest branch operated continuously in America and through the next merger is now part of Wells Fargo.
CoreStates acquisition brings problems. Much of this arose when First Union sought to integrate the computer systems of CoreStates and First Union too quickly. Initially, CoreStates tellers received inadequate training with the new First Union system and the two systems were unable to communicate with each other. This causes issues with account access and payments are not applied correctly for the loan.
Bowles Hollowell
First Union acquired Bowles Hollowell Connor & amp; Co on April 30, 1998 add mergers and acquisitions, high yields, leveraged financing, equity pledge, personal placement, loan syndication, risk management, and public finance capabilities.
Money Store
On June 30, 1998, First Union paid $ 2.1 billion for The Money Store, a specialist in home equity loans known for its commercials featuring Baseball Hall of Fame shorts Phil Rizutto and Jim Palmer pitcher. Two years later, he closed the unit, writing a $ 1.7 billion loss.
Acquisition of Wachovia
On April 16, 2001, First Union announced it would join Wachovia. This is seen with great surprise by the financial press and security analysts. While Wachovia has been seen as an acquisition candidate after experiencing problems with earnings and credit quality in 2000, applicants surprised analysts as many speculated that Wachovia would be sold to SunTrust.
As an important part of the deal, while First Union is a nominal victim, the combined company will assume the symbols of Wachovia and stock symbols (despite maintaining the history of the stock price of the pre-2001 First Union). Analysts say the move is likely to help First Union gain a new identity, as Wachovia's reputation is much better with consumers than First Union. At the same time, Wachovia's name and corporate identity will survive.
The deal met with skepticism and criticism. Analysts, given the problem with the acquisition of CoreStates, feared the ability of First Union to join other large companies. Winston-Salem residents and politicians suffered a blow to the pride of their citizens because the combined company will be based in Charlotte, home to First Union. City leaders are worried about job losses and losing the status of losing company headquarters. First Union worried about the potential decline in deposits and loss of customers in the city. First Union responded to this concern by placing wealth management and regional headquarters Carolinas in Winston-Salem.
On May 14, 2001, Atlanta-based SunTrust announced a rival takeover bid for Wachovia, the first unlawful takeover attempt in the banking sector for many years. In an effort to make an attractive deal for investors, SunTrust argues that it will provide a smoother transition from First Union and offers a higher cash price for Wachovia shares than First Union.
The board of directors of Wachovia rejected SunTrust's offer and supported the merger with First Union. SunTrust continues its hostile takeover attempt, which led to a fierce summer battle between SunTrust and First Union. The two banks increased their offer for Wachovia, picked up newspaper ads, sent letters to shareholders, and started court battles to challenge their respective takeover bids. On August 3, 2001, Wachovia shareholders approved the First Union agreement, rejected SunTrust's attempt to elect a new board of directors for Wachovia and end the hostile takeover attempt of SunTrust.
Another issue concerns the credit card division of each bank. In April 2001, Wachovia agreed to sell her $ 8 billion credit card portfolio to Bank One. The cards, which will still be labeled as Wachovia, will be issued through First Bank First Bank division. First Union sold its credit card portfolio to MBNA in August 2000. Upon entering the negotiations, Wachovia only agreed to buy back its portfolio from Bank One in September 2000 and resell it to MBNA. Wachovia paid Bank One a termination fee of $ 350 million.
On September 4, 2001, First Union and Wachovia formally joined to form the new Wachovia Corporation. To prevent a recurrence of the CoreStates problem, the new Wachovia gradually transformed Wachovia's computer system into a First Union system. The company first began to change the system in the southeastern United States, where both banks had branches, before moving to the Northeast, where the First Union branch only had to change their mark to reflect the new company name and logo. This process ended on August 18, 2003, almost two years after the merger took place.
When Wachovia and First Union join, the One, Two and Three First Union Charlotte buildings are One, Two, and Three Wachovia Centers (respectively), and the 55-storey First Union Finance Center in downtown Miami becomes the Wachovia Financial Center. The merger also affects the names of indoor indoor sports arenas in Philadelphia and Wilkes-Barre, Pennsylvania. Formerly known as First Union Center and First Union Spectrum (both Philadelphia) and First Union Arena (Wilkes-Barre), they became Wachovia Center, Wachovia Spectrum, and Wachovia Arena in Casey Plaza, respectively. In 2010, after the merger of Wachovia to Wells Fargo, Spectrum was destroyed and other places became Wells Fargo Center and Mohegan Sun Arena in Casey Plaza.
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References
Source of the article : Wikipedia
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