As part of its integration of Wachovia, Wells Fargo & Company (WFC) has completed the conversion of more than 250 Wachovia Community Banking locations into Wells Fargo outlets across Mid-Atlantic and South Carolina.
In July, WFC completed the conversion of 300 Wachovia Community Banking locations into WFC outlets across the southern half of Florida. Moreover, in June, the company completed the conversion of Wachovia Community Banking operations in 363 Stores across north and central Florida and the greater Tampa.
As a result of latest Wachovia branch conversions, more than 1.5 million customers can now access nearly 250 stores and more than 480 ATMs of WFC.
In May, Wells Fargo announced that it would wrap up the transition of the remaining Wachovia signs and systems into Wells Fargo by mid-October 2011. Specifically, North Carolina will be converted in October, completing the transition finally.
To give more benefits to customers at Maryland, South Carolina, and Washington, D.C., WFC has increased jobs and provided customers with more choices in checking, savings, and other products. The choices range from renters insurance to auto insurance to prevent theft and the ExpressSend remittance service is also provided.
Previously, WFC also converted Wachovia’s banking locations in Connecticut, New York, and Pennsylvania, coupled with stores in Alabama, Arizona, California, Colorado, Delaware, Georgia, Illinois, Kansas, Mississippi, Nevada, New Jersey, Tennessee and Texas.
WFC purchased Wachovia in December 2008, in a $12.7 billion all-stock deal, after Wachovia suffered trouble due to its exposure to bad mortgages just before the housing bubble burst.
With the completion of the merger, Wachovia’s transition to WFC began. Therefore, the company hired hundreds of added tellers and bankers across the Carolinas and Mid-Atlantic. WFC has given assurance to customers for delivering services as before with the smooth completion of the transition.
Strategic acquisitions have been part of WFC’s endeavor to strengthen its business model, expand its capabilities and diversify its footprint. Recently, Wells Fargo Insurance Services, a division of WFC, disclosed the completion of the acquisition of New Jersey-based Procomp Benefit Resources Inc. in early September. The financial terms of the deal were not disclosed.
Earlier in September, WFC also announced its plan to acquire LaCrosse Global Fund Services from Cargill Inc. LaCrosse is an independent hedge-fund administration and middle-office service provider company of Cargill. The deal is subject to certain regulatory approval in several jurisdictions.
Therefore, its growth plans have historically included several acquisitions, Wachovia being the largest addition in December 2008. The company has demonstrated its ability to assimilate local franchises, offering a wider range of products compared with the acquired company, thus increasing the number of options for its customers. This has been the driving force behind its growth in the recent years.
With cross-selling as its key strength, WFC has a diverse geographic and business mix that enables it to sustain consistent earnings growth. Opportunistic acquisition and the demise of some smaller players helped the company to garner a larger share in the market. Yet, top-line headwinds and regulatory issues remain a cause of concern.
WFC currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. Also, considering the fundamentals, we maintain a Neutral recommendation on the stock. The company’s closest peer – SunTrust Banks, Inc. (STI) also retains a Zacks #3 Rank.
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