Citigroup Inc.’s takeover of Charlotte-based Wachovia Corp

Citigroup Inc.’s takeover of Charlotte-based Wachovia Corp. will make the big New York bank a retail-banking leader in South Carolina, and remove the corporate headquarters for the successor to the old South Carolina National Bank even further from the state.

When Wachovia took over South Carolina National Corp. in 1991, SCN was the largest bank based in the state, with more than $7 billion in assets and 164 offices statewide.

Today, Wachovia has 137 branches in South Carolina, with 26 of those in the tri-county region, according to the latest data available from the Federal Deposit Insurance Corp. As of June 2007, the bank had $2.4 billion in deposits from this region, claiming almost 27% of the market share, more than any other institution.

Statewide, the bank ranks second in terms of deposits, behind only Charlotte-based Bank of America.

With its headquarters in Charlotte, and a large work force on the border with South Carolina, employment will be a concern as the New York bank takes over.

Steven Mann, professor of finance at the Moore School of Business, predicted that Charlotte “is going to be a little bit diminished as a banking center” because of the merger announced today.

Jason Caskey, a CPA and chairman of Elliott Davis LLC’s banking practice, speculated that the buyout could lead to more community banks in rural areas where Wachovia is now located.

“It would be my guess that Citigroup would not be interested in remaining in those small communities,” said Caskey, whose firm conducts audits for about 50 community banks across the state.

Wachovia Corp. will remain a public company with two main operating subsidiaries: Wachovia Securities, the nation’s third-largest brokerage firm; and Evergreen Asset Management, a provider of asset management services. Under terms of the transaction, Citigroup will pay $2.1 billion to Wachovia and assume the senior and subordinated debt of Wachovia Corp., Wachovia’s statement said.

“Customers of both companies should continue banking as usual, and feel confident that their deposits are secure. Also, employees and vendors should continue to operate business as usual,” the bank said.

Wachovia Corp. said it will remain headquartered in Charlotte. Wachovia Securities will continue to be headquartered in St. Louis. Citigroup will base the retail bank in Charlotte and the investment bank in New York.