Wachovia bank will disappear in the state in the coming year as its 75 offices are rebranded as Wells Fargo branches.
Among Connecticut’s banking behemoths for most of the last decade, its brand will fade away nearly two years after California-based Wells Fargo acquired Wachovia bank amid financial difficulties it faced at the height of the nation’s financial crisis.
Fran Durst, a spokeswoman for Wachovia, said the transition should be seamless and that customers will continue to bank in the same locations with the same people.
“If minor changes are anticipated, customers will be notified well in advance,” she said.
Durst said there will be no job losses during the conversion, and that Wells Fargo may actually beef up staffing at some of the branches “since the Wells Fargo model calls for 20 percent more staff than the Wachovia model.”
Durst said Wells Fargo sees Connecticut as a “good market,” and that it will continue to look for growth opportunities.
Wells Fargo also has appointed several Wachovia executives to leadership positions in Connecticut during the past year as it transitions to its community banking model, including long-time Wachovia executive Joe Kirk, who was named regional president for New York and Connecticut, Durst said.
The company also opened two new branches in Greater Hartford last year, in Rocky Hill and Avon.
Banking Behemoth
Wachovia is the fourth largest bank in Connecticut, with 75 offices and $6.9 billion in deposits, according to the Federal Deposit Insurance Corp.
The bank owns 7.7 percent of the Connecticut market, ranked behind Bank of America, Webster Bank and People’s United Bank.
Wachovia originally gained its large presence in Connecticut in 2001, when it acquired Charlotte-based First Union Corp., also the fourth largest bank in Connecticut at the time.
The Wachovia-Wells Fargo deal in October 2008 came at a time when Wachovia was experiencing heavy losses in its loan portfolio due to its exposure to subprime loans. In the second quarter of 2008, Wachovia reported an $8.9 billion loss.
Reeling from those bad bets, Wachovia searched for a financially stable partner, and was involved in FDIC-brokered talks with both Citigroup and Wells Fargo.
At one point, it was reported that Citigroup reached an agreement in principle to buy Wachovia’s banking operations with a guarantee from the government that it would absorb most of the losses on Wachovia’s loan portfolio.
In an abrupt change, however, Wachovia agreed to be acquired by Wells Fargo in a $15.1 billion deal that avoided government assistance.
Positive Potential
Advertising and marketing experts agree that the name change will be a positive move for Wells Fargo as it looks to maintain the dominant footing held by Wachovia.
“Wachovia has a lot of negative brand tarnish that is eliminated when Wells Fargo takes over,” said Bill Field, president of Mintz & Hoke Communications Group in Avon. “Wells Fargo is a brand new name to our region. Plus, it has the long-term equity of Wells Fargo from a historical standpoint. I see nothing but upside potential.”
Brand Equity
Field said it is common practice in acquisitions that the company with the least amount of brand equity is the name that disappears.
“The pervasive negative halo of Wachovia makes this a no-brainer,” he added.
Steve Wolfberg, partner and president of Cronin and Co., a marketing communications firm in Glastonbury, said the move likely won’t sway customer’s perceptions of the bank either.
“It seems like bank customers have become desensitized to bank mergers. They’ve come to expect it,” Wolfberg said.
Wells Fargo’s customer service will ultimately determine if Wachovia customers stick with the company or deposit their funds elsewhere, marketing experts agreed.
Customer Service
Wells Fargo hopes to improve customer service by installing new ATMs that accept stacks of cash and checks, eliminating the need to feed bills or checks individually.
The machines are considered “green” because they count money automatically for customers and eliminate the need to put cash or checks in a deposit envelope, Durst said.
“Wells Fargo has to establish a presence in the region. It has to be genuine and backed by real actions,” Field said. “Otherwise, Rockville Bank, Connecticut Bank & Trust, and others will profit from customer migration away from the unknown Wells Fargo brand entity.”
