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Around the State- Northeast- Dec. 2001
The new Wachovia is taking a low-key approach to consummating the merger that created it.
By Chuck Day
Were it not for official statements, it would be difficult to detect that First Union and Wachovia have been a single entity since Sept. 4. That's by design and reflects a key component of Wachovia Corp.'s post-merger strategy: Retaining customers -- or, more precisely, deposits.
The merger that created the nation's fourth-largest bank was completed after a tough fight for Wachovia that saw First Union outlast a competing bid by SunTrust. Consummating the merger -- First Union will take the smaller bank's name, but it won't become visible until next year -- will be a low-key affair, as the new bank attempts to deftly leverage its $326 billion in assets to achieve its ambitious vision.
In Florida, First Union was unquestionably the dominant partner. Its $31.47 billion in deposits rank second in the state (behind Bank of America) and represent 14.4% of all Florida banking deposits. First Union's 466 branches also rank second to Bank of America.
By comparison, Wachovia, pre-merger, had only 38 Florida offices with $1.36 billion in deposits, just 0.62% of the state's total deposits.
The new Wachovia Corp. does not plan to close any branches or eliminate jobs in Florida. "For the first year there will be almost no change whatsoever, as far as customers are concerned," says Robert Helms, the bank's ranking Florida executive, who is based in Jacksonville.
Indeed, Helms, a 32-year First Union veteran, has yet to change his title: President First Union-Florida.
Taking care to iron out details and integrate systems makes sense, of course. But there's a more powerful reason, says Anthony Plath, a business professor at the University of North Carolina-Charlotte. "Wachovia wants to minimize 'runoff.' Historically, bank mergers cost the new organization a good 8% to 10% of its customers," Plath says. "Wachovia hopes that by waiting, people will adjust and decide not to move their money."
The decision is consistent with the new Wachovia's overall long-term strategy, outlined by CEO and President Ken Thompson shortly after the merger. Currently, general banking represents 50% of Wachovia's 2001 projected net income, while corporate and investment banking and wealth management and capital management each represents 20%; other activities account for the remaining 10%. Wachovia wants to grow the wealth management and capital management component to between 30% and 35% of total net income, corporate and investment banking to between 25% and 30%, and reduce general banking to between 35% and 40%.
There's one more reason to roll out the new identity campaign with care. Analysts suggest that Florida generates between 20% and 25% of Wachovia's income. "Florida is hugely important to this organization," says Helms.
In the News
Amelia Island -- BETA-1, a business and technology incubator, will spend $3 million to build a headquarters and client facility at Gateway to Amelia in Nassau County. The 30,000-sq.-ft. facility will be able to house up to 16 startups.
Baker County -- WorkSource, a regional workforce development organization that serves job seekers and businesses, has opened a center in Macclenny. One reason for the expansion beyond Duval County, officials say, is the arrival of Wal-Mart's 800,000-sq.-ft. distribution center, due to be completed this month. That will generate the need for workers.
Fernandina Beach -- Fields Atlantic paid $1.3 million for one of Waterview Development's last vacant properties. Fields plans to develop commercial and retail enterprises as well as residential units on the one-acre site.
Jacksonville -- Tire Kingdom has opened its first TK Performance auto accessory store. Besides Jacksonville, the tire retailer plans to open additional TK Performance locations in Orlando, Tampa and Miami.
The Jacksonville Seaport Authority and Airport Authority officially began doing business Oct. 1 as a separate agencies. They had been part of a single authority .
Ocala -- The average sale during the two open sessions of the fall Ocala Breeders horse sales was 20.6% below the year-ago figure. In the two preferred sessions, 408 horses sold for $4.5 million, compared to 460 horses a year ago for $8 million. First-time participants included a group of Korean breeders, who spent $330,000 in the fall sale and another $100,000 at the January mixed sale.
St. Augustine -- Tree of Life, a St. Augustine-based marketer and distributor of natural and specialty foods, has opened a $20-million, 233,600-sq.-ft. warehouse on Deer Park Boulevard and has begun consolidating operations there. Tree of Life has already moved most of its operations from its Dobbs Road warehouse and plans to sell that property.
Vestcor Cos. and Hutson Cos., both of Jacksonville, will develop the $65-million Sebastian Inland Harbor project, a 14-acre development just west of the city's historic district. The city-owned site has been vacant for 20 years. Plans for the colonial-style development include 49 condominiums along an 85-slip marina, 16 townhouses, an upscale hotel, retail, commercial and recreational space, parking decks, plus a river walk and a new western entryway to the downtown tourist area. Construction is expected to begin next month and end in 2006.
St. Johns County -- Taking a page from the Jacksonville Economic Development Commission, the St. Johns County Economic Development Committee has prepared an incentives package that would be used to attract both new and growing businesses and include rebates of property taxes and impact fees and credit for utility connection fees.
Super Bowl Front-runner?
JACKSONVILLE -- Bruce Lucker, chief operating officer of World Golf Hall of Fame and Village ["Driving for Dough, March 2001], is mentioned frequently as the front-runner to head Jacksonville's Super Bowl Host Committee.
The committee is still looking for a chairman to succeed Michael Weinstein, who leaves in February to pursue the mayor's office. Lucker has been at World Golf Village since 1999.
Rick Catlett, executive director of the Toyota Gator Bowl, has also been mentioned, but apparently isn't too interested in the three-year job that ends in early 2005 after Jacksonville hosts the Super Bowl.
