PhillyDeals: PhillyDeals: Former CEO big winner in Wachovia deal

Chief executive

officers Edward E. Crutchfield Jr.

and his successor,

G. Kennedy Thompson

, spent 10 years and $85 billion of other peoples' money buying banks.

They built

First Union National Bank

in provincial Charlotte, N.C., into giant

Wachovia Corp.

, one of the Big Four U.S. banks, one takeover at a time, complete with layoffs, branch closings and customer dislocations.

(They spent a few billion more buying investment firms, but we're not counting those.)

Yesterday,

Citigroup Inc.

agreed to buy Wachovia's branches, loans and deposits for just $2.16 billion, and to write down the rest as loss.

Wachovia gets to keep the investment firms, plus naming rights to the

Wachovia Center

, where the

Sixers

and

Flyers

play, if they still want that. Citi, Wachovia and building owner

Comcast-Spectacor

say they're still figuring out what the place will be called next year.

Buying banks may have been a poor investment for Wachovia's owners. But it worked out all right for the bosses.

For example, among other benefits, Crutchfield earned a $1.78-million-a-year special executive retirement pension in 2000, when he left the bank.

He chose to take that money as cash up front, in a lump-sum payment. Some other executives turned it into stock. Kennedy took some of both, cash and stock.

First Union's stock price collapsed from $30 that year to below $10 on the eve of the Citi deal. So Crutchfield gets the smart-investor award.

I called Crutchfield at his retirement place in North Carolina after Citi confirmed its purchase, to ask how he felt about the way things turned out.

"I have nothing to say," the ex-CEO said cheerfully.

Veteran bank analyst

Richard X. Bove

, currently laboring at

Ladenburg Thalmann Financial Services Inc

. in Florida, says Congress' failure to pass yesterday's bank-bailout package will make debt markets "more volatile," but it won't change the bottom line: Strong banks will come through this period "in more dominant positions."

Bove is recommending investors buy

Bank of America Corp.

,

Citigroup

,

Wells Fargo & Co.

, and Pennsylvania's own

PNC Financial Services Group

at recent prices.

People keep asking us, here on The Inquirer business desk (and at home, and on the train), if they should pull their money out of their bank because of all those problems banks are having these days.

Is your money

FDIC

-insured? we ask. And, do you have less than $100,000 in that bank? If yes, and yes, you're probably OK, we tell them. Because if the FDIC blows up, we'll have worse problems than our bank accounts. Such as digging enough edible roots to keep from starving.

But

Frank Mayer 3d,

bank attorney at

Buchanan, Ingersoll & Rooney P.C

., reminds me that a lot of business people routinely keep more than $100,000 in their bank accounts, to meet weekly payroll and other expenses.

Mayer's worked on FDIC and

Resolution Trust Co.

blow-ups, and he's seen sad things happen to hard-working people.

"Let's say they have a $900,000 weekly payroll," Mayer said. "If the bank fails on Friday, they only have $100,000 on account." And paychecks go boing.

What to do? "Smart companies structure their accounts so they're buying U.S. Government securities" and using them as collateral for bank payments, Mayer said. "So the assets aren't on the balance sheet if it fails."

With some bank or another failing each weekend lately, this would be a good time, Mayer added, for small-business owners to make sure their deposit and payment records are in order, "so the FDIC can see who gets insured" if your bank happens to make the list.

"

Comcast

is far from immune as consumers 'tighten their belts,' " warns

Oppenheimer & Co. Inc.

telecom analyst

Timothy Horan

and his team in a 60-page report.

He says Comcast's three main consumer businesses are becoming less profitable: "Broadband and video have reached saturation," he said, while "competition is fiercer" for phone services and a "market-share war" is heating up, eating into profits.

Wachovia Deal Has a Winner

Buying up banks may have not been good for Wachovia owners, but it helped one CEO.

PhillyDeals, C3

.

Expanded coverage of financial crisis, A1.