First Union

First Union Corporation

Company type	Public
Industry	Banking, Financial services
Predecessor	Union National Bank, First National Bank and Trust Company of Asheville
Founded	June 2, 1908 (1908-06-02) in Charlotte, North Carolina, United States
Founder	H. M. Victor
Defunct	September 4, 2001 (2001-09-04)
Fate	Acquired Wachovia National Bank; merged and renamed Wachovia Corporation
Successor	Wachovia Corporation
Headquarters	Charlotte , United States
Area served	Eastern United States (11 states)
Products	Commercial and retail banking, mortgage banking, credit card services, investment banking, investment advisory, home equity loans, asset-based financing, leasing, insurance, international and securities brokerage, private equity investments
Number of employees	70,000+ (2000)

First Union Corporation functioned as a bank holding company delivering both commercial and retail banking services throughout eleven eastern U.S. states. Its offerings extended to mortgage banking, credit card services, investment banking via First Union Securities, investment advisory, home equity loans, asset-based financing, leasing, insurance, international and securities brokerage, as well as private equity investments through First Union Capital Partners and affiliated subsidiaries.

In September 2001, First Union completed the acquisition of Wachovia National Bank, resulting in the creation of Wachovia Corporation, which became one of the largest financial holding companies in the United States at that time. By the close of 2000, First Union managed assets exceeding $171 billion, employed over 70,000 individuals, and operated 2,193 branch locations. After this merger, the company adopted the Wachovia name along with its stock ticker symbol.

History

The institution was originally established as Union National Bank on June 2, 1908 in Charlotte, North Carolina by H. M. Victor. In 1958, it merged with First National Bank and Trust Company of Asheville to form First Union National Bank of North Carolina. The bank expanded into mortgage lending and insurance sectors through its acquisition of the Cameron-Brown company in 1964.

First Union was formally incorporated in 1967 and subsequently unified its mortgage operations under First Union Mortgage Corp. in 1968 following a corporate restructuring that laid the foundation for its longstanding subsidiary framework.

After the 1985 Supreme Court ruling that endorsed regional interstate banking, First Union embarked on an aggressive expansion strategy via acquisitions—completing more than 90 transactions between 1985 and 2001, including 50 deals from 1985 to 1995. Key acquisitions featured Atlantic National Bank (Jacksonville, Florida) in 1985, South Carolina Federal Corp. in 1992—which elevated it to the third largest bank by deposits in South Carolina, and First Fidelity of Newark, New Jersey in 1995 to establish a presence in the Northeast market.

CoreStates

In April 1998, First Union acquired CoreStates Financial Corporation, headquartered in Philadelphia, representing the largest banking merger in U.S. history at that point.

CoreStates traced its origins back to the Bank of North America founded in 1781—the first bank chartered in the United States. Following this merger, First Union adopted 1781 as its official founding year and maintained operations at the original Philadelphia branch of the Bank of North America. This branch remains the longest continuously operating bank branch nationwide and became part of Wells Fargo through subsequent mergers.

Nonetheless, a rapid integration of CoreStates’ and First Union’s computer systems resulted in operational challenges such as insufficient teller training and system incompatibilities. These issues caused difficulties with customer account access and errors in loan payment applications.

Bowles Hollowell Conner

On April 30, 1998, First Union expanded its financial services capabilities by acquiring Bowles Hollowell Conner & Co., thereby strengthening its expertise in mergers and acquisitions advisory, high-yield financing, leveraged finance, equity underwriting, private placements, loan syndication, risk management solutions, and public finance activities.

The Money Store

On June 30, 1998, First Union acquired The Money Store for $2.1 billion. Known for its focus on home equity lending and celebrity endorsements, the division was shut down two years later after accumulating losses totaling $1.7 billion.

Acquisition of Wachovia

First Union revealed its merger plans with Wachovia on April 16, 2001, catching many financial experts off guard, as expectations had leaned toward an acquisition of Wachovia by Atlanta-based SunTrust. Though First Union was the legal survivor, the combined organization took on the Wachovia name and stock symbol to leverage Wachovia’s stronger brand recognition among consumers.

The transaction encountered doubts due to First Union’s earlier difficulties integrating CoreStates and concerns from Winston-Salem officials about potential job cuts and relocating the headquarters to Charlotte. To mitigate these worries, First Union retained wealth management operations and the Carolinas regional headquarters in Winston-Salem.

On May 14, 2001, SunTrust initiated a hostile takeover bid for Wachovia, proposing a higher cash offer and pledging a more seamless integration. Wachovia’s board declined SunTrust’s proposal and endorsed the merger with First Union. The competitive bidding concluded on August 3, 2001, when shareholders approved the First Union agreement, ending SunTrust’s pursuit.

Credit card holdings added complexity to the merger: in April 2001, Wachovia had agreed to sell its $8 billion credit card portfolio to Bank One, while First Union had divested its credit card business to MBNA in 2000. Following negotiations, Wachovia repurchased its portfolio from Bank One in September 2001 and subsequently sold it to MBNA, incurring a $350 million termination fee.

The acquisition was finalized on September 4, 2001, with the new entity adopting the Wachovia Corporation name. To prevent integration problems experienced previously, system conversions were implemented gradually over nearly two years, commencing in the Southeast region before expanding to the Northeast.

After the merger, several branding updates occurred: Charlotte’s One, Two, and Three First Union buildings were renamed as Wachovia Center towers; Miami’s First Union Financial Center became Wachovia Financial Center. Additionally, sports venues in Philadelphia and Wilkes-Barre adopted the Wachovia name until rebranding followed after Wachovia merged into Wells Fargo in 2010.