Charlotte Eddings has heard all her life not to get emotionally involved with her investments. But consider how she came to own 4,000 shares of Wachovia:
In 1929, the story goes, her grandfather invested $200 to help stop a run on Citizens Bank in this secluded mountain town north of Asheville. The bank survived, and so did the stock. In time, both became part of Wachovia.
Now, after two weeks of fear and uncertainty, the Charlotte bank is selling itself to an even larger company, San Francisco-based Wells Fargo.
“It had been so steady and so regular we took it for granted,” said Eddings, 58, who grew up outside Marshall and now lives in Gastonia. “At least now we know there's a chance there'll be something to hand down to our children and grandchildren from this.”
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Just as Marshall is a small dot on a map, holdings such as Eddings' are a tiny portion of the 2.2 billion Wachovia shares. Mutual funds and pension plans own the largest financial stakes in Wachovia and other large banks like it.
Yet longtime stockholders' ties are often far more personal. The small towns that have seen their local banks swallowed up, sometimes repeatedly, by ever-larger companies still feel deeply connected to and concerned for the branches that remain.
Shares that began in Yanceyville, Wilkesboro, Marion and Siler City became part of large banks in Charlotte and Winston-Salem. As laws changed to allow it, those banks used that experience to grow across the country, buying other regional banks that had grown the same way.
Now, the current Wachovia, formed in 2001 from the merger of N.C. banking giants Wachovia and First Union, is itself poised to become part of a company in San Francisco.
And so, shares that started in towns like Marshall will now be tied to a coast-to-coast banking behemoth with headquarters 2,500 miles away.
A changing town
Marshall sits 150 miles northwest of Charlotte, between Asheville and the Tennessee border. Its Main Street is a real street, not the figurative kind pundits have so fondly invoked lately, with several blocks of brick and stone buildings sandwiched between the mountains, the railroad track and the French Broad River.
The town of about 850 is the seat and longtime commercial hub of Madison County, population around 20,000, the same number as Wachovia employs in Charlotte. It has been changing more in the past couple of years than it had in the decades before that, residents say.
A past built on tobacco has given way to a more mixed present, as out-of-towners discover the mountain beauty and slower pace of life that natives have long cherished. The stone building that once housed the bus depot and a restaurant is now a bistro, the old high school has been converted into artists' studios and organic farms have sprung up nearby.
Yet amid that change, one business sits just where it did when it opened 98 years ago this month, open 8 a.m. to 4 p.m.: the bank.
The sign in front says Wachovia, and before 1975 it said Citizens Bank. Other than that, the bank is pretty much the same as it's been for decades.
Just a block away, on the other side of the street, is a brick building that once housed the other bank in town, the Bank of French Broad, which was founded in 1903 and also has ties to the modern Wachovia: In 1970, the bank was bought by First Union, which operated the branch until 1996. The structure is now home to a credit union.
Everyone in town, it seems, banked with one or the other, and often both. In 1920s advertisements, the Bank of French Broad billed itself as “Your Financial Friend” and touted its conservative lending practices, while Citizens was “The Bank That Service Built.”
Though no longer operating as Citizens, the Marshall Wachovia operates under the same philosophy today, customers say, with veteran hometown employees and friendly service residents know and trust. And even with the uncertainty surrounding Wachovia, they say they wouldn't switch unless the bank left them, as First Union did.
“My grandparents banked there, my parents banked there and it was not really a choice,” said Peggy Goforth, 46, who lives outside Marshall and grew up in the area. “So it would be hard for me to take everything I have and move it somewhere.… It's more than Wachovia being bought out by somebody else. It's personal.”
Worrying with friends
Wachovia's recent ups and downs have been scary for Marshall branch employees, who have coped with humor, cracking jokes about putting a line down the center of the branch to divide it between warring suitors Wells Fargo and Citigroup. However, they've had plenty of support from customers, who have been more concerned about how the employees are faring than about their own accounts.
Most in town see the Wells deal as a positive, including Howard Riddle, 72, the co-owner of Coal, Feed & Lumber, which doesn't have a computer, but does sell weed trimmers, light fixtures and jars of local honey. The store was founded in 1925 by Craig Rudisill, who bought the Bank of French Broad and whose son later became president. Today, a black-and-white portrait of Rudisill hangs behind the front counter.
Over the years, Riddle has banked with Citizens, then French Broad, then First Union. He returned to Citizens – by that point Wachovia – once First Union closed. He also owns 800 Wachovia shares because of an earlier investment in brokerage firm A.G. Edwards, which Wachovia acquired in 2007. He believes Wachovia was poorly run on a corporate level.
“(Wells) will be OK by me, as long as they keep the same people and do a good job,” he said Friday. “Ain't nothing going back to the way it used to be, unless all the big ones go broke.”
Still, some said they were sad to see Wachovia go.
“You'd be so proud to see it everywhere,” Marshall native Ann Thomason said as she helped out at Ain't That Cuticle, a friend's downtown store and nail salon.
Thomason, 61, banked with both institutions in town until First Union left, and has known the manager of the Marshall Wachovia since the manager was born. She believes Wells is a good company, but still finds it hard to believe Wachovia crumbled so rapidly.
“I just thought Wachovia was top of the line, so secure,” she said. “I had no idea it was in trouble.”
Across the street, Barbara Penland, 70, runs Penland's Department Store, a business once owned by E.R. Tweed, who was also president of Citizens Bank. A Wachovia customer, she says only the ATM and awning are much different from the bank she remembers when she moved to town in 1958.
“I'll stick with it,” she said, sitting at a counter at the front of store filled with shirts, quilts, jars of canned goods. “What else can I do? It's very inconvenient to have to go to Weaverville. I just hope, regardless of who buys it, it stays here.”
Though modern highways have made the town much more accessible than it was in the past, it is still miles from any other commercial center and surrounded by winding mountain roads that can be treacherous in the winter, especially for senior citizens.
That distance can mean the difference between keeping and losing a customer.
Photographer Jim Climo, 57, who lives outside Marshall, did not stay with First Union when it closed its Marshall branch and tried to transfer customers to Weaverville, 20 minutes away. Not only did he not want to make what would be an hour round trip to do his banking, he had also become dissatisfied with the company's customer service and changes to his account. He switched to Wachovia.
“When First Union closed, Wachovia picked up the pieces,” he said. “But when First Union went and poisoned themselves up north, they came back and put the same poison into Wachovia.”
It's unclear exactly how many people in Madison County still hold some piece of the banks founded here a century ago. But residents can easily rattle off names of some longtime stockholders.
In the hills outside Marshall, cattle farmer Hall Bruce's shares stretch back to the very beginning. His grandfather, Milton Bruce, was one of 10 men who put up $10,000 to start Citizens Bank. In return, he received 10 shares, worth $1,000 each.
Citizens was the only bank Hall Bruce knew until he was a grown man. He still has an old Citizens checkbook and a gleaming little silver barrel bank he received as a boy in the 1940s. “Citizens Bank,” it says. “It pays to save every day.”
After Bruce, 67, graduated from high school, he began buying his father's siblings' shares, and succeeded at getting all but eight. He also inherited his father's portion. He now has 17,000 shares of Wachovia, which he still hopes to give to his daughter and granddaughters.
Over the years, the shares' reliable dividends helped Bruce, who farmed and sold tobacco, when times were hard. They paid for tractors and land, helped build his house and sent his daughter to college.
“Every time you'd get a little bit of that dividend money, you couldn't help but think of how much my grandfather sacrificed to put that $10,000 up,” he said.
Until Wachovia “blew up,” he said, his shares made him a millionaire – on paper.
He didn't worry about his holdings until the bank's ill-fated 2006 purchase of California mortgage lender Golden West Financial. The timing was poor, the price too high and Golden West's condition suspect, he said. He voted against the deal.
When Wachovia cut its dividend earlier this year, he said, he knew the company was in trouble. Every day, he'd look at the stock market, and every day, he saw “down, down, down.”
Wachovia shares closed at $5.15 Friday, down from over $50 a year ago.
Though Bruce likes CEO Bob Steel, he says his father and grandfather would have been angry about the bank's collapse.
Even so, Bruce plans to hold onto his shares no matter what, unless a family emergency arises. Though he no longer feels allegiance to the Wachovia brand, he will keep banking at his local branch and says the Wells deal made him feel “a hell of a sight better” than Citigroup's offer.
When his grandfather arrived in Madison County in 1856 from South Carolina, he came in a covered wagon – the symbol of Wells Fargo. He became a successful businessman, owning a country store, a three-story corn mill, a sawmill, 100 acres of land and also running a post office. Now Bruce, whose only previous Wells experience comes from watching the company's armored trucks haul money into and out of Marshall, will watch as its nameplate comes to town in a different fashion.
“The name really doesn't matter,” he said. “You don't desert your friends and run up out the door. Everyone needs to have a certain amount of loyalty.”