Boom Bust and Blame

Crisis A-Z


Formed by the 2001 merger of First Union Corporation and the former Wachovia Corporation, valued at $14.6 billion. First Union changed its name to Wachovia Corporation, creating the fourth-largest U.S. bank, with 19 million customers, some $321 billion in assets, and 90,000 employees.

In September 2008, Citigroup bid to acquire Wachovia for $2.2 billion in stock and assumed debt and loan losses worth a combined $95 billion. That offer was trumped by Wells Fargo in October 2008, with a $14.8 billion stock offer.In December 2008, nearly 76% of Wachovia shareholders approved of Wells Fargo's shotgun merger proposal. The deal, initially valued at $15.1 billion, was revised to $11.7 billion.

Wells Fargo got its start in 1852 in New York City with two men, Henry Wells and William Fargo, and the idea of starting a banking and transportation company.

First Union began in the Buford Hotel on Charlotte's Tryon Street not long after the turn of the 20th century. H. M. Victor raised funds to start Union National by selling 1,000 shares of stock at $100 each, then set up his office at a roll-up desk in the hotel's main lobby.

In 1958, Union National merged with First National Bank and Trust Company of Asheville, forming First Union National Bank of North Carolina. By 1964 First Union further diversified by acquiring Raleigh-based Cameron-Brown Company, a national mortgage banking and insurance firm.

First Union Bank bought the subprime lender The Money Store for $2.1 billion in July 1998, and a month later, the bottom fell out of the entire subprime market.

When William A. Lemly decided in 1879 to relocate his bank from the quiet Moravian village of Salem to the bustling county seat of Winston, he needed more than a crew of movers. On June 16, 1879, the new Wachovia National Bank opened with capital of $100,000.

On June 15, 1893, North Carolina's first trust company - Wachovia Loan and Trust Company - opened its doors for business in the rapidly growing town of Winston. In 1911, the two Wachovias merged to form Wachovia Bank and Trust Company. The consolidated bank began operations with deposits of $4 million, capital stock of $1.25 million and total resources of $7 million. It was the largest bank in the South and the largest trust operation between Baltimore and New Orleans.

"Wachovia" comes from "Wachau," the name given by Moravian settlers in 1753 to the tract of about 100,000 acres that they purchased in the North Carolina Piedmont. Wachau, from the German words "die Wach au," "Wach" was the name of a stream and "au" means "meadowland," was a part of Austria, the ancestral home of the Moravians' benefactor, Count Zinzendorf, and, likewise, an area of abundant streams and pastures along the Danube River.

The settlers named the Carolina tract bought just east of the Yadkin River Wachau as an expression of appreciation to Zinzendorf. Later, the English form Wachovia was used.

Over the years, the name Wachovia ceased to be used as a designation for the area but remained a popular name for businesses that originated in the Moravian village of Salem and the adjoining town of Winston, which merged in 1913 to form Winston-Salem.

Wagner, Ira:
since 2008, Wagner has been President, European Private Finance, a wholly-owned affiliate of American Capital, Ltd. (Formerly, American Capital Strategies Ltd.). He previously served as Chief Operating Officer from 2001 to 2008 and as a Senior Vice President in 2001, prior to becoming an Executive Vice President from 2001 to 2008. Wagner joined the firm in 1997 and has also held the positions of Principal and Senior Investment Officer. From 1993 to 1997, Wagner was a self-employed consultant and financial advisor. He served as Senior Vice President of MONY Capital Markets. Wagner was the co-founder of a business which distributed imported auto parts in western New England from 1975 through 1982.

Wagner holds an MBA at the University of North Carolina at Chapel Hill in 1985.

Wagner and his wife Marcia have three daughters and live in Maryland.

WaMu – Washington Mutual:
On September 25, 2008, the banking operations of Washington Mutual, Inc - Washington Mutual Bank, Henderson, NV and Washington Mutual Bank, FSB, Park City, Utah were sold in a transaction facilitated by the Office of Thrift Supervision aka OTS and the Federal Deposit Insurance Corporation aka FDIC. JPMorgan Chase Bank, the third-biggest U.S. bank by assets, agreed to acquire all branches, deposit accounts and all loans for $1.9 billion after regulators seized the thrift in the biggest bank failure in U.S. history.

WaMu got its start in the aftermath of a raging fire that burned in Seattle on June 6, 1889, engulfing 25 city blocks and destroying nearly everything in its 120-acre path.

The Washington National Building Loan and Investment Association filed articles of incorporation on September 25, 1889, to offer its stockholders a safe and profitable vehicle for investing and lending. This allowed the Association to help Seattle residents rebuild after the fire.

The company made the first monthly-installment home loan on the Pacific Coast on February 10, 1890. The borrower, a Norwegian-born seaman, used the $700 loan to build a house in Ballard, a neighborhood in Seattle. This creative amortized home loan proved so popular that the Association made more than 2,000 similar loans to help build 250 blocks of housing in Seattle.

On June 25, 1908, the company changed its name to Washington Savings and Loan Association. Eugene Favre, co-founder of Murphey Favre, Inc., of Spokane, became a member of the board in 1911, marking the start of a relationship between the investment firm and Washington Mutual.

JPMorgan Chase has more than $2 trillion in assets and is now the largest depository bank in America, with more than 5,400 branches and 14,000 ATMs in 23 states.

Waters, Maxine:
Representative for California's 35th congressional district and a member of the House Committee on Financial Services. Waters is also Chairwoman of the Subcommittee on Housing and Community Opportunity and has been a member of Congress since January 3, 1991.

Rep. Waters was born on August 15, 1938. She was the fifth of 13 children who were raised by a single mother in St. Louis, Missouri. Before moving to Los Angeles to attend California State University, Rep. Waters worked in various factories and segregated restaurants. She earned a Bachelor of Arts degree and worked as a teacher before starting her political career in 1976, when she entered the California State Assembly.

Rep. Waters was first elected for the House of Representatives in 1990, after August F. Hawkins retired and she received over 79 percent of the popular vote. Last elected in November 2008, Rep. Waters is serving her tenth term in the House of Representatives.

Rep. Waters is married to former U.S Ambassador to the Bahamas Sidney Williams. They have two children, Edward and Karen, and two grandchildren.

Wells Fargo:
One of the largest banks in the United States, Wells Fargo (NYSE: WFC) – as it is today – is the result of the merger between Wells Fargo & Co. and Northwest Corporation in 1998, and has grown since with the more recent acquisition of Wachovia on December 31, 2008.
Wells Fargo provides a wide array of financial services under the Wells Fargo and Wachovia brands including banking, insurance, mortgage finance, and investments. Headquartered in San Francisco, Wells Fargo has existed for over 150 years.

President and CEO John D. Baker has been at the helm of the company since January 1, 2009, and Dick Kovacevich – former CEO – has been Chairman since 2001. Wells Fargo has a market cap of $103.1 billion.

Waxman, Henry:
Representative for California's 30th congressional district and the Chairman of the House Oversight and Government Reform Committee. In 2009, Waxman became the Chairman of the House Energy and Commerce Committee. He has been a member of the House of Representatives since 1975.

Born in Los Angeles on September 12, 1939, Rep. Waxman attended UCLA and earned a degree in political science in 1961. He then received a Juris Doctor degree from UCLA's Law School in 1964.

After Congressman Chet Holifield retired in 1974, Waxman was elected for Congress. Since then, he has been re-elected 16 times, always winning by large margins. His district has changed numbers three times since he became a Representative in 1975 from 24th to the 29th in 1993; and to the 30th in 2003.

Rep. Waxman has a daughter and a son with his wife, the former Janet Kessler, and four grandchildren.

Weill, Sandy:
former Chief Executive Officer and Chairman of Citigroup Inc. He started his tenure in 1998 after the merger between Travelers Group and Citicorp. Weill served as CEO until October 2003 and as Chairman until April 2006.

Born in Brooklyn, New York on March 16, 1933, Weill went to the Peekskill Military Academy in New York to then attend Cornell University, where he earned a Bachelor of Arts degree in Government in 1955. After graduation, Weill started working at Bear Stearns as a runner and in 1956 he became a licensed broker for the firm. Four years later he and his partners launched their own firm Carter, Berlind, Potoma & Weill. In 1965, he served as Chairman and through his tenure, the firm became the second largest securities brokerage firm in the United States and was renamed to Shearson Loeb Rhoades.

Weill decided to sell the company in 1981 and found a buyer in American Express, which paid about $930 million in stock for the firm. He then went on to become CEO of Commercial Credit and under his command the company acquired different institutions until he took over as CEO of Travelers Corporation. In 1995, Travelers changed its name to Travelers Group and three years later, on October 8, 1998, Weill orchestrated the merge between Travelers Group and Citicorp -- considered the biggest merger in history—and created Citigroup.

Sandy Weill married the former Joan Mosher in 1955. They have two children and four grandchildren.

Willumstad, Robert:
former Chief Executive Officer for American International Group (AIG). He took over the position on June 15, 2008 replacing Martin Sullivan. However, he only lasted three months in the position as the U.S. government was forced to rescue the insurance company with $85 billion of taxpayer money.

Born in Brooklyn, New York in 1946, Willumstad grew up on Long Island. He attended Adelphi University and then worked at Chemical Bank, where he stayed for 20 years. He then joined Commercial Credit Co. in 1987 and worked under Sanford Weill helping with mergers and acquisitions that eventually led to the creation of Citigroup in 1998. He went on to become president of Citigroup in 2002. However, he left the firm in 2005 after failing to become CEO.

Willumstad joined AIG as Chairman of the Board a year after his departure from Citigroup. He then took over as CEO after Sullivan was ousted in June 2008 at a time when AIG's shares had fallen by half as a result of the mortgage crisis.

Willumstad and his wife, Carol, live in New York City. They have two daughters and two grandchildren.