Local Wachovia branches remain open despite takeover

Wachovia branches in Kinston - and the rest of the country- remained open Monday despite news that another banking conglomerate has taken over the company to save it drowning in a sea of bad mortgage debt.

"We're really focused on talking to our customers and helping to ease their concerns," spokeswoman Christine Shaw said. "It's business as usual in our financial centers (branches)."

The Charlotte-based company is the latest high-profile financial institution to fall victim to the continuing subprime mortgage crisis. The federal government seized the assets of Washington Mutual last week and sold much of the company to JP Morgan, which has also taken over Bear Stearns.

Several other major banks and investment firms have been taken over by either larger firms or the government in recent months, including Lehman Brothers, Merrill Lynch, Fannie Mae and Freddie Mac.

New York-based Citigroup Inc. will purchase Wachovia Corporation's banking operations for just over $2 billion and take on $53 billion of its debt, according to a Citigroup press release.

The deal was brokered by the Federal Deposit Insurance Corp., which will cover Wachovia customers' deposits.

"For Wachovia customers, today's action will ensure seamless continuity of service from their bank and full protection for all of their deposits," FDIC Chairman Sheila C. Bair said in a statement.

Carrie Witter of Kinston breathed a sigh of relief late Monday afternoon when she learned that her deposits would be safe.

"It's a little sad," Witter said as she stood outside Wachovia's Vernon Avenue branch. "I don't think banks should have made so many loans to people who couldn't pay them back."

The firm's subprime troubles began after it acquired Golden West Financial Corp., a California lending firm, two years ago. Billions of dollars worth of adjustable-rate mortgages has gone bad since then.

"I like it when banks take a responsible approach (to lending)," Witter said.

She also uses Wachovia's separate entity, Wachovia Securities, to make investments. Citigroup did not purchase that part of its operations and it will remain its own company.

A Kinston man who did not want to be identified said branch employees still provided quality customer service Monday, but the mood inside was "sullen; very somber."

"They've still been very courteous," the man said. "I think they were as blindsided as everyone else was. As far as I can tell, it's business as usual in there."

Shaw stated: "We'll be open tomorrow and have the same hours, and they can access their accounts if they want. It's again, business as usual."

David Anderson can be reached at (252) 559-1077 or danderson@freedomenc.com.