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FDIC: Press Releases - PR-88-2008 9/29/2008

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Press Releases
Citigroup Inc. to Acquire Banking Operations of Wachovia
FDIC, Federal Reserve and Treasury Agree to Provide Open Bank Assistance to Protect
Depositors
Media Contact:
Andrew Gray (202) 898-7192
angray@fdic.gov

FOR IMMEDIATE RELEASE
September 29, 2008

Citigroup Inc. will acquire the banking operations of Wachovia Corporation; Charlotte, North Carolina, in
a transaction facilitated by the Federal Deposit Insurance Corporation and concurred with by the Board
of Governors of the Federal Reserve and the Secretary of the Treasury in consultation with the
President. All depositors are fully protected and there is expected to be no cost to the Deposit Insurance
Fund. Wachovia did not fail; rather, it is to be acquired by Citigroup Inc. on an open bank basis with
assistance from the FDIC.
"For Wachovia customers, today's action will ensure seamless continuity of service from their bank and
full protection for all of their deposits." said FDIC Chairman Sheila C. Bair. "There will be no interruption
in services and bank customers should expect business as usual."
Citigroup Inc. will acquire the bulk of Wachovia's assets and liabilities, including five depository
institutions and assume senior and subordinated debt of Wachovia Corp. Wachovia Corporation will
continue to own Wachovia Securities, AG Edwards and Evergreen. The FDIC has entered into a loss
sharing arrangement on a pre-identified pool of loans. Under the agreement, Citigroup Inc. will absorb
up to $42 billion of losses on a $312 billion pool of loans. The FDIC will absorb losses beyond that.
Citigroup has granted the FDIC $12 billion in preferred stock and warrants to compensate the FDIC for
bearing this risk.
In consultation with the President, the Secretary of the Treasury on the recommendation of the Federal
Reserve and FDIC determined that open bank assistance was necessary to avoid serious adverse
effects on economic conditions and financial stability.
"On the whole, the commercial banking system in the United States remains well capitalized. This
morning's decision was made under extraordinary circumstances with significant consultation among the
regulators and Treasury," Bair said. "This action was necessary to maintain confidence in the banking
industry given current financial market conditions."
Wachovia customers with questions should call their normal banking representative, service center, 1800-922-4684 or visit www.wachovia.com. The FDIC's consumer hotline is 1-877-ASK-FDIC (1-877275-3342) or visit www.fdic.gov.
###
Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the
nation's banking system. The FDIC insures deposits at the nation's 8,451 banks and savings
associations and it promotes the safety and soundness of these institutions by identifying, monitoring
and addressing risks to which they are exposed. The FDIC receives no federal tax dollars – insured
financial institutions fund its operations.
FDIC press releases and other information are available on the Internet at www.fdic.gov, by subscription
electronically (go to www.fdic.gov/about/subscriptions/index.html) and may also be obtained through the
FDIC's Public Information Center (877-275-3342 or 703-562-2200). PR-88-2008

Last Updated 9/29/2008

communications@fdic.gov

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