Wachovia Corp. and SouthTrust Corp. said Thursday that they would make $75 billion in community loans and investments in nine southeastern states over five years after they merge later this year.
The goal fell short of what some community investment activists had wanted and was far smaller than the 10-year pledges announced in other recent megabank mergers.
But it offered one concession activists have been pressing for: a state-by-state breakdown of commitments for investments and small-business, mortgage, and consumer loans in low-income areas.
On June 21 the $418 billion-asset Wachovia, of Charlotte, said it was buying the $53 billion-asset SouthTrust, of Birmingham, for $14.3 billion. The deal is expected to close in the fourth quarter.
“This plan builds on our legacy of community excellence and extends the reach of our community development program into new markets,” Wachovia chairman and chief executive G. Kennedy Thompson said in a press release.
Wachovia’s pledge is a fraction as large as those made before two recent mergers. J.P. Morgan Chase & Co. and Bank One Corp. made an $800 billion, 10-year pledge before their much larger July 1 merger. from Bank of America Corp. and FleetBoston Financial Corp., which merged April 1, pledged $750 billion.
Those big commitments have become a yardstick for advocacy groups, including the Greenlining Institute. In a letter to the Fed in June, the Berkeley, Calif., group recommended that Wachovia and SouthTrust offer a $450 billion commitment over 10 years.
Though the announced plan falls well short of that, it is more than double the goal set three years ago when Wachovia, then called First Union Corp., was seeking to acquire the old Wachovia Corp. of Winston-Salem, N.C. That deal closed in September 2001.
A Wachovia spokeswoman said Thursday that the new pledge incorporates about $9 billion in unfulfilled commitments from the Wachovia-First Union pledge. The company also promised $100 million in charitable donations over five years.
The largest portion, about $20 billion, is allocated to Florida, which would become Wachovia’s largest market after the deal.
“That comes into line with what we were thinking,” said Al Pina, the chairman of the Florida Minority Community Reinvestment Coalition. The coalition, which includes 52 organizations, is among a handful of groups nationwide that have filed objections to the merger with federal officials.
