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Saturday, March 20, 2010   62º F

Updated 10/15/2008 07:13 PM

CEOs discuss Wachovia merger, future

By: News 14 Carolina Web Staff

Click HERE to watch the Wachovia rally from Wednesday.

CEOs discuss Wachovia merger, future
CHARLOTTE -- Wells Fargo is continuing its battle for Wachovia.

Tuesday, the company filed a complaint with the U.S. district court asking that an earlier deal between Citigroup and Wachovia be voided. Wells Fargo says Citigroup’s previous agreement is unenforceable under the government’s banking industry bailout because it is “contrary to public policy” and may have prohibited Wachovia from considering another merger option.

Officials are asking the court to bar any damages being paid to Citigroup.

Citigroup is seeking more than $60 billion in damages because Wachovia entered a deal with Wells Fargo days after agreeing to be purchased by Citigroup for $2.1 billion.

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Meanwhile, Wells Fargo CEO John Stumpf and Wachovia CEO Bob Steel met in Charlotte on Wednesday to discuss the merger and answer questions from employees and the media.

Stumpf told the crowd that he sees the banks as one team now, and looks forward to Charlotte becoming the company's East Coast headquarters.

The San Francisco-based bank has weathered the credit crisis better than others, and though profits have declined, Wells Fargo has not posted a quarterly loss during the past year.

Wednesday, Wells Fargo reported earnings per common share of $0.49 cents for the third quarter of this year. That is down from $0.53 in the second quarter.

CEOs discuss Wachovia merger, future
New income was $1.64 billion, compared to $1.75 billion in the second quarter. It’s also down from the net income of $2.17 billion in the third quarter of last year.

Officials say the merger with Wachovia is on track to be completed by the end of next quarter.

Investors are now watching for signs of trouble as the bank prepares to acquire the large portfolio and troubled loans from Wachovia. Wells Fargo is expected to take advantage of recently approved tax deductions, but will likely take a $74 billion hit on Wachovia’s $498 billion loan portfolio.

The deal could cost more if Citigroup prevails in court.