History of Wells Fargo

This article outlines the history of Wells Fargo & Company from its merger with Norwest Corporation and beyond. The new company chose to retain the name of "Wells Fargo" and so this article is about the history after the merger.

Acquisitions in 1999–2000

Continuing the Norwest tradition of making numerous smaller acquisitions each year, Wells Fargo acquired 13 companies during 1999 with total assets of $2.4 billion. The largest of these was the February purchase of Brownsville, Texas-based Mercantile Financial Enterprises, Inc., which had $779 million in assets. The acquisition pace picked up in 2000, with Wells Fargo expanding its retail banking into two more states: Michigan, through the buyout of Michigan Financial Corporation ($975 million in assets), and Alaska, through the purchase of National Bank of Alaska, with $3 billion of assets.^[1] Wells Fargo also acquired First Commerce Bancshares, Inc. of Lincoln, Nebraska, which had $2.9 billion in assets, and a Seattle-based regional brokerage firm, Ragen MacKenzie Group Incorporated. In October 2000, Wells Fargo made its largest deal since the Norwest-Wells Fargo merger when it paid nearly $3 billion in stock for First Security Corporation, a $23 billion bank holding company based in Salt Lake City, Utah, and operating in seven western states. Wells Fargo thereby became the largest banking franchise in terms of deposits in New Mexico, Nevada, Idaho, and Utah; as well as the largest banking franchise in the West overall. Following completion of the First Security acquisition, Wells Fargo had total assets of $263 billion with some 140,000 employees.

2000–present

In 2001, Wells Fargo acquired

In January 2007, Wells Fargo acquired Placer Sierra Bank.[3] In May 2007, Wells Fargo acquired Greater Bay Bancorp, which had $7.4 billion in assets, in a $1.5 billion transaction.^[4][5] In June 2007, Wells Fargo acquired CIT's construction unit.^[6] In January 2008, Wells Fargo acquired United Bancorporation of Wyoming.^[7] In August 2008, Wells Fargo acquired Century Bancshares of Texas.^[8]

Management changes (2007)

In June 2007, John Stumpf was named

During the financial panic of September 2008, Wells Fargo made a bid to purchase the troubled Wachovia Corporation. Although at first inclined to accept a September 29 agreement brokered by the Federal Deposit Insurance Corporation to sell its banking operations to Citigroup for $2.2 billion, on October 3, Wachovia accepted Wells Fargo's offer to buy all of the financial institutions for $15.1 billion.^[10][11]

On October 4, 2008, a New York state judge issued a temporary injunction blocking the transaction from going forward while the situation was sorted out.^[12] Citigroup alleged that they had an exclusivity agreement with Wachovia that barred Wachovia from negotiating with other potential buyers. The injunction was overturned late in the evening on October 5, 2008, by New York state appeals court.^[13] Citigroup and Wells Fargo then entered into negotiations brokered by the FDIC to reach an amicable solution to the impasse. Those negotiations failed. Sources say that Citigroup was unwilling to take on more risk than the $42 billion that would have been the cap under the previous FDIC-backed deal (with the FDIC incurring all losses over $42 billion). Citigroup did not block the merger, but indicated they would seek damages of $60 billion for breach of an alleged exclusivity agreement with Wachovia.^[14]

The merger created a coast-to-coast super-bank with $1.4 trillion in assets and 48 million customers and expanded Wells Fargo's operations into nine Eastern and Southern states. There would be big overlaps in operations only in California and Texas, much less so in Nevada, Arizona, and Colorado. In contrast, the Citigroup deal would have resulted in a substantial overlap, since both banks' operations were heavily concentrated in the East and Southeast.^[15] The proposed merger was approved by the Federal Reserve as a $12.2 billion all-stock transaction on October 12 in an unusual Sunday order.^[16] The acquisition was completed on January 1, 2009.

Investment by U.S. Treasury during 2008 financial crisis

On October 28, 2008, Wells Fargo was the recipient of $25B of the Emergency Economic Stabilization Act Federal bail-out in the form of a preferred stock purchase.

Wells Fargo Securities was established in 2009 to house Wells Fargo's new capital markets group, which it obtained during the Wachovia acquisition. Prior to that point, Wells Fargo had little to no participation in investment banking activities, though Wachovia had a well-established investment banking practice which operated under the Wachovia Securities banner.

Wachovia's institutional capital markets and investment banking business arose from the merger of Wachovia and First Union. First Union had bought

Wells Fargo History Museum

The company operates the Wells Fargo History Museum at 420 Montgomery Street, San Francisco. Displays include original

• List of Wells Fargo directors
• List of Wells Fargo presidents

Notes