Wells Fargo Nikko
| Company type | Public |
|---|---|
| Industry | Banking, Financial services |
| Headquarters | San Francisco , United States |
Key people | John Stumpf (CEO 2007), Richard Kovacevich (Chairman 2007) |
| Products | Retail banking, Investment banking, Brokerage services |
Number of employees | 140,000 (circa 2000) |
Acquisitions in 1999–2000
Continuing Norwest's approach of frequent purchases, Wells Fargo acquired 13 firms in 1999, collectively holding $2.4 billion in assets. The most significant acquisition was Mercantile Financial Enterprises, Inc., based in Brownsville, Texas, with assets totaling $779 million. In 2000, Wells Fargo extended its retail banking presence into Michigan by obtaining Michigan Financial Corporation, which had $975 million in assets, and entered Alaska through the acquisition of National Bank of Alaska, possessing $3 billion in assets. Additional purchases included First Commerce Bancshares from Lincoln, Nebraska, with $2.9 billion in assets, and the Seattle-based brokerage firm Ragen MacKenzie Group Incorporated. The largest transaction since the Norwest merger occurred in October 2000 when Wells Fargo acquired First Security Corporation—a Salt Lake City-based bank holding company managing $23 billion in assets across seven western states—for nearly $3 billion in stock. This deal positioned Wells Fargo as the leading banking institution by deposits across New Mexico, Nevada, Idaho, Utah, and the broader Western United States, boosting total assets to $263 billion and expanding its workforce to around 140,000 employees.
2000–present
In 2001, Wells Fargo purchased H.D. Vest Financial Services for $128 million and later divested it in 2015 for $580 million.
Acquisitions in 2007 and early 2008
Wells Fargo acquired Placer Sierra Bank in January 2007. Subsequently, in May 2007, it bought Greater Bay Bancorp, which held $7.4 billion in assets, for $1.5 billion. In June of the same year, Wells Fargo took over CIT Group's construction division. Early in 2008, specifically January, United Bancorporation of Wyoming was acquired by Wells Fargo, followed by the August purchase of Century Bancshares based in Texas.
Management changes (2007)
In June 2007, John Stumpf was named chief executive officer of Wells Fargo while Richard Kovacevich maintained his position as chairman.
Acquisition of Wachovia (2008)
During the financial crisis of 2008, Wells Fargo sought to acquire Wachovia Corporation. Initially, on September 29, Wachovia agreed to sell its banking operations to Citigroup for $2.2 billion under an FDIC-facilitated arrangement. However, on October 3, Wachovia accepted a more attractive offer from Wells Fargo to purchase all its financial institutions for $15.1 billion.
On October 4, a New York state judge issued a temporary injunction blocking the deal after Citigroup asserted an exclusivity agreement with Wachovia. This ruling was reversed by an appeals court on October 5. Subsequent FDIC-led discussions between Citigroup and Wells Fargo did not result in an agreement; Citigroup was unwilling to accept risk beyond a $42 billion limit under the prior contract and demanded $60 billion in damages for breach of exclusivity.
The merger established a nationwide super-bank with $1.4 trillion in assets and a customer base of 48 million, extending Wells Fargo’s footprint into nine Eastern and Southern states. Unlike the Citigroup deal—which would have created significant overlap in the East and Southeast—the operational redundancies were mostly confined to California and Texas. The Federal Reserve approved the $12.2 billion all-stock transaction on October 12 through an uncommon Sunday order. The acquisition was completed on January 1, 2009.
U.S. Treasury Investment amid 2008 Financial Crisis
On October 28, 2008, Wells Fargo secured $25 billion through preferred stock purchases as part of the federal bailout authorized by the Emergency Economic Stabilization Act. Federal stress tests revealed that Wells Fargo required an additional $13.7 billion to maintain strong capitalization under challenging economic conditions. Subsequently, on May 11, 2009, the company announced a stock issuance that generated $8.6 billion, with intentions to accumulate the remaining $4.9 billion through operational earnings. By December 23, 2009, Wells Fargo repurchased the $25 billion in preferred shares issued under the Troubled Asset Relief Program, having paid $131.9 million in accrued dividends at that time and totaling $1.441 billion in dividends to the U.S. Treasury since the initial issuance.
Formation of Wells Fargo Securities
Wells Fargo Securities was established in 2009 to unify the capital markets functions acquired through the Wachovia merger. Prior to this consolidation, Wells Fargo had a limited footprint in investment banking, whereas Wachovia maintained a robust investment banking division operating as Wachovia Securities.
The institutional capital markets and investment banking expertise of Wachovia stemmed from its merger with First Union, which had previously expanded its capabilities by acquiring Bowles Hollowell Connor & Co. in 1998. This acquisition enhanced services in areas such as mergers and acquisitions, high-yield debt, leveraged finance, equity underwriting, private placements, loan syndication, risk management, and public finance.
Wells Fargo Securities combines legacy entities including Wachovia Securities, Bowles Hollowell Connor & Co., Barrington Associates, Halsey Stuart & Co., Leopold Cahn & Co., Bache & Co., Prudential Securities, along with investment banking units from Citadel LLC.
Wells Fargo Cross-Selling Controversy
The 2016 Wells Fargo cross-selling scandal resulted in CEO John Stumpf stepping down and the imposition of $185 million in penalties by the Consumer Financial Protection Bureau.
Wells Fargo History Museum
Located at 420 Montgomery Street in San Francisco, the Wells Fargo History Museum showcases original stagecoaches, historic photographs, gold nuggets, mining relics, Pony Express memorabilia, telegraph apparatus, and antique banking artifacts. The museum also features a gift shop for visitors. In January 2015, armed thieves broke into the museum by smashing glass doors and stole gold nuggets. While Wells Fargo previously managed additional museums, those have since ceased operations.
See also
Bibliography
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- Beebe, Lucius Morris, and Charles Clegg. US West, the saga of Wells Fargo (1949).
- Chandler, Robert J. "Integrity amid Tumult: Wells, Fargo & Co.'s Gold Rush Banking." California History 70#3 (1991): 258–277.
- Fradkin, Philip L. Stagecoach: Wells Fargo and the American West (2002).
- Hungerford, Edward. Wells Fargo: advancing the American frontier (1949).
- Jackson, W. Turrentine. "Wells Fargo: Symbol of the Wild West?." Western Historical Quarterly 3#2 (1972): 179–196.
- Jackson, W. Turrentine. "Wells Fargo Stagecoaching in Montana Trials and Triumphs." Montana: The Magazine of Western History 29#2 (1979): 38–53.
- Jackson, W. Turrentine. "A New Look at Wells Fargo, Stage-Coaches and the Pony Express." California Historical Society Quarterly 45#4 (1966): 291–324.
- Loomis, Noel M. Wells Fargo. New York: Clarkson N. Potter, Inc., 1968.
- Moody, Ralph. Stagecoach West. New York: Thomas Y. Crowell Company, 1967.
- Nevin, David. The Expressmen. New York: Time-Life Books, 1974.