Wells Fargo to shut 122 branches in California
Wells Fargo & Co. said Tuesday that it would close 122 California bank branches as a result of its takeover of Wachovia Corp. last year, mostly Wachovia offices that are smaller and less prominently located than nearby Wells Fargo branches.
The closures are scheduled to occur in April as San Francisco-based Wells Fargo puts its name on the Wachovia locations in the state that are to remain open.
A casualty of decaying mortgage loans, Wachovia was teetering near collapse in October 2008 when Wells Fargo agreed to buy the Charlotte, N.C., company in a deal brokered by the Federal Deposit Insurance Corp.
California was the only state in which the two banks had significantly overlapping retail franchises.
Even after the downsizing, Wells Fargo would have more than 1,000 branches in California, reflecting how it and Bank of America Corp., which has nearly 1,000 California branches, have saturated the Golden State.
In that context, the planned closures don’t signal a loss of commitment to California by Wells Fargo, said banking analyst Bart Narter of the Celent consulting firm.
“It’s just doing what makes sense,” Narter said. “When you’ve got two branches across the street from each other, it’s natural to close one of them.”
Wells Fargo currently has 187 Wachovia offices in California. Of those, 101 will be closed, said bank spokeswoman Jennifer Langan. The company is also shutting 21 Wells Fargo locations.
All affected employees will be given jobs at other Wells Fargo branches if they want them, Langan said.
“We need all the customer-facing people we can get,” she said.
Employees were told of the branch closures Tuesday, and customers were to be notified later by mail.
Given the amount of overlap in the Wells Fargo and Wachovia branch networks in urban areas throughout the state, the closures appear to be on the light side, said Joe Morford, a San Francisco analyst who follows Western banks for RBC Capital Markets.
“This seems like a prudent, rational move,” Morford said. “I think they could have closed more. It shows how Wells Fargo values branches” as a way to establish bonds with customers.
One of the Wells Fargo branches to be closed is on Foothill Boulevard in La Cañada Flintridge, where customer Mauricio Hernandez, 37, a contract painter, took the news in stride.
Hernandez lives in Palmdale, works in Pasadena and considers the La Cañada branch the most convenient to use. He won’t have to go far, however: A bigger Wachovia branch a few blocks away will become a Wells Fargo office.
“It’s easy to come to this branch,” he said, shuffling through paperwork in a white SUV in the Wells Fargo parking lot. “I am going to talk to my banker to see what is going on.”
Hernandez said he switched to Wells Fargo eight months ago from Washington Mutual Inc., which had been taken over by JPMorgan Chase & Co. as the banking system appeared at risk of melting down.
The WaMu deal made JPMorgan’s Chase Bank unit the third-largest retail bank in California, with about 720 branches, a spokesman said. Citigroup Inc.'s Citibank unit is No. 4 with 377 branches, a spokeswoman said.