The transaction will more than double the size of Wachovia's dealer
financial services business, making it the nation's ninth largest auto
loan originator. As a result of this transaction, Wachovia will add
about 8,500 automobile dealer clients, approximately 920,000
individual customers and 19 retail banking offices in Southern
California.
"This transaction moves our auto finance business to a new level
and gives us access to a new set of customers who can benefit from
Wachovia's broad offering of financial services," said Ben Jenkins,
president of Wachovia's General Bank. "Westcorp and WFS Financial have
demonstrated a strong track record of growing revenue and earnings
through all economic cycles. Our companies share the same strong
commitment to customer service and delivering superior products to
auto finance customers."
The combined auto finance business will be based in Irvine and run
by WFS Financial's President and Chief Executive Officer, Thomas
Wolfe, who will report to Carlos Evans, head of Wachovia's Wholesale
Banking. Following completion of the merger, David Stevens, who runs
Wachovia's Dealer Financial Services unit, will become head of East
Coast operations, overseeing national wholesale lending, specialized
lending and the Dealer Service Center in Greenville, N.C. Bill
Katafias, National Production Manager of WFS Financial, will become
head of West Coast operations and National Retail Sales Executive,
overseeing retail production. Both Stevens and Katafias will report to
Wolfe.
"Joining forces with Wachovia will benefit both our customers and
our shareholders," said Ernest S. Rady, chairman of Westcorp. Rady
will serve as chairman of Wachovia's dealer financial services
business and chairman of California banking operations, reporting to
Jenkins. "Together we'll have more to offer clients and a broader
financial base on which to grow. I am very pleased to be joining
Westcorp with Wachovia and believe our combined growth prospects will
outpace the industry."
Wachovia expects the purchase to close in the first quarter of
2006. Under the terms of the merger agreement, Westcorp shareholders
will receive 1.2749 shares of Wachovia common stock in exchange for
each share of Westcorp common stock. Additionally, WFS Financial's
public shareholders will receive 1.4661 shares of Wachovia common
stock in exchange for each share of WFS Financial common stock. The
transaction is expected to produce an internal rate of return in
excess of 15 percent and to be accretive to GAAP earnings in the
second year, exceeding Wachovia's stated acquisition criteria.
In connection with the merger agreement, Rady agreed to vote
Westcorp shares, representing approximately 40 percent ownership of
Westcorp, in favor of the proposed transaction. Rady started Westcorp
in 1972.
In connection with the execution of the merger agreement with
Wachovia, the agreement and plan of merger and reorganization entered
into as of May 23, 2004, among Westcorp, WFS Financial and Western
Financial Bank, which contemplated the merger of WFS Financial with
and into Western Financial Bank, was terminated.
About Westcorp, WFS Financial and Western Financial
Bank
Westcorp is a financial services holding company whose principal
subsidiaries are WFS Financial Inc and Western Financial Bank.
Westcorp is a publicly owned company whose common stock is traded on
the New York Stock Exchange under the symbol WES. Information about
Westcorp can be found at its Web site at
http://www.westcorpinc.com.
Westcorp, through its subsidiary WFS Financial, is one of the
nation's largest independent automobile finance companies. WFS
Financial specializes in originating, securitizing and servicing new
and pre-owned prime and non-prime credit quality automobile contracts
through its nationwide relationships with automobile dealers. WFS
Financial is a publicly owned company whose common stock is traded on
the Nasdaq Stock Market under the symbol WFSI. Information about WFS
Financial can be found at its Web site at
http://www.wfsfinancial.com.
Westcorp, through its subsidiary Western Financial Bank, operates
retail bank branches and provides commercial banking services in
Southern California. Information on the products and services offered
by the bank can be found at its Web site at http://www.wfb.com.
About Wachovia
Wachovia (NYSE: WB) is one of the largest providers of financial
services to retail, brokerage and corporate customers, with retail
operations from Connecticut to Florida and west to Texas, and retail
brokerage operations nationwide. Wachovia had assets of $511.8
billion, market capitalization of $78.2 billion and stockholders'
equity of $47.9 billion at June 30, 2005. Its four core businesses,
the General Bank, Capital Management, Wealth Management, and the
Corporate and Investment Bank, serve 13 million household and business
relationships primarily through 3,126 offices in 15 states and
Washington, D.C. Its full-service retail brokerage firm, Wachovia
Securities, LLC, also serves clients through 699 offices in 49 states
and five Latin American countries. Its Corporate and Investment Bank
serves clients primarily in 10 key industry sectors nationwide. Global
services are offered through 33 international offices. Online banking
and brokerage products and services also are available through
www.Wachovia.com.
Announcement Conference Call
Wachovia General Bank President Ben Jenkins will provide details on a
conference call and audio webcast beginning at 9 a.m. Eastern Daylight
Savings Time today. Jenkins will be joined by Wachovia Chief Risk
Officer Don Truslow and Treasurer Tom Wurtz. WFS Financial CEO Tom
Wolfe also will participate in the call.
Webcast Instructions: To gain access to the
webcast, which will be "listen-only," go to Wachovia.com/investor and
click on the webcast link. In order to listen to the webcast, you will
need to download either Real Player or Media Player.
Teleconference Instructions: The telephone number
for the conference call is 1-888-357-9787 for U.S. callers or
1-706-679-7342 for international callers. You will be asked to tell
the answering coordinator your name and the name of your firm. Mention
the conference Access Code: 9489475
Replay: Monday, September 12, at about 11 a.m. EDT
and continuing through 5 p.m. EDT Wednesday, October 12. Replay
telephone number is 1-706-645-9291; access code 9489475.
Forward-Looking Statements
This news release contains, and the webcast discussed above will
contain, certain forward-looking statements, including, without
limitation, (i) statements relating to the benefits of the proposed
merger between Wachovia and Westcorp (the "Westcorp Merger") and
Wachovia's acquisition, by merger, of the 16% interest in WFS
Financial held by the public (the "WFS Financial Merger" and, together
with the Westcorp Merger, the "Mergers"), including future financial
and operating results, cost savings, enhanced revenues and the
accretion to reported earnings that may be realized from the Mergers,
(ii) statements regarding certain of Wachovia's, Westcorp's and/or WFS
Financial's goals and expectations with respect to earnings, earnings
per share, revenue, expenses and the growth rate in such items, as
well as other measures of economic performance, including statements
relating to estimates of credit quality trends, and (iii) statements
preceded by, followed by or that include the words "may", "could",
"should", "would", "believe", "anticipate", "estimate", "expect",
"intend", "plan" or similar expressions. These statements are based
upon the current beliefs and expectations of Wachovia's, Westcorp's
and WFS Financial's management and are subject to significant risks
and uncertainties. Actual results may differ from those set forth in
the forward-looking statements.
The following factors, among others, could cause actual results to
differ materially from that expressed in such forward-looking
statements: (1) the risk that the businesses of Wachovia, Westcorp and
WFS Financial in connection with the Mergers will not be integrated
successfully or such integration may be more difficult, time-consuming
or costly than expected; (2) expected revenue synergies and cost
savings from the Mergers may not be fully realized or realized within
the expected time frame; (3) revenues following the Mergers may be
lower than expected; (4) deposit attrition, operating costs, customer
loss and business disruption following the Mergers, including, without
limitation, difficulties in maintaining relationships with employees,
may be greater than expected; (5) the ability to obtain governmental
approvals of the Mergers on the proposed terms and schedule; (6) the
failure of Westcorp's and WFS Financial's shareholders to approve the
Westcorp Merger and the WFS Financial Merger, respectively; (7) the
strength of the United States economy in general and the strength of
the local economies in which Wachovia, Westcorp and/or WFS Financial
conducts operations may be different than expected resulting in, among
other things, a deterioration in credit quality or a reduced demand
for credit, including the resultant effect on Wachovia's, Westcorp's
and/or WFS Financial's loan portfolio and allowance for loan losses;
(8) the effects of, and changes in, trade, monetary and fiscal
policies and laws, including interest rate policies of the Board of
Governors of the Federal Reserve System; (9) potential or actual
litigation; (10) inflation, interest rate, market and monetary
fluctuations; and (11) adverse conditions in the stock market, the
public debt market and other capital markets (including changes in
interest rate conditions) and the impact of such conditions on
Wachovia's capital markets and capital management activities,
including, without limitation, Wachovia's mergers and acquisition
advisory business, equity and debt underwriting activities, private
equity investment activities, derivative securities activities,
investment and wealth management advisory businesses, and brokerage
activities. Additional factors that could cause Wachovia's, Westcorp's
and WFS Financial's results to differ materially from those described
in the forward-looking statements can be found in Wachovia's,
Westcorp's and WFS Financial's Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K filed with the
SEC. All subsequent written and oral forward-looking statements
concerning the proposed Mergers or other matters and attributable to
Wachovia, Westcorp or WFS Financial or any person acting on their
behalf are expressly qualified in their entirety by the cautionary
statements above. Wachovia, Westcorp and WFS Financial do not
undertake any obligation to update any forward-looking statement,
whether written or oral, relating to the matters discussed in this
news release.
Additional Information
The proposed Mergers will be submitted to Westcorp's and WFS
Financial's shareholders for their consideration. Wachovia will file a
registration statement, which will include a proxy
statement/prospectus, Westcorp and WFS Financial will file a proxy
statement, and each of Wachovia, Westcorp and WFS Financial may file
other relevant documents concerning the proposed Mergers with the SEC.
Shareholders are urged to read the registration statement and the
proxy statement/prospectus regarding the proposed Mergers when they
become available and any other relevant documents filed with the SEC,
as well as any amendments or supplements to those documents, because
they will contain important information. You will be able to obtain a
free copy of the proxy statement/prospectus, as well as other filings
containing information about Wachovia, Westcorp and WFS Financial, at
the SEC's website (http://www.sec.gov). You will also be able to
obtain these documents, free of charge, at Wachovia's website
(http://www.wachovia.com) under the tab "Inside Wachovia –
Investor Relations" and then under the heading "Financial Reports
– SEC Filings". Copies of the proxy statement/prospectus and the
SEC filings that will be incorporated by reference in the proxy
statement/prospectus can also be obtained, free of charge, by
directing a request to Wachovia Corporation, Investor Relations, One
Wachovia Center, 301 South College Street, Charlotte, NC 28288-0206,
(704)-374-6782; or to Westcorp or WFS Financial, Attn: Investor
Relations, 23 Pasteur, Irvine, CA 92618, (949)-727-1002.
Wachovia, Westcorp and WFS Financial and their respective directors
and executive officers, may be deemed to be participants in the
solicitation of proxies from the shareholders of Westcorp and/or WFS
Financial in connection with the proposed Mergers. Information about
the directors and executive officers of Wachovia is set forth in the
proxy statement for Wachovia's 2005 annual meeting of shareholders, as
filed with the SEC on a Schedule 14A on March 14, 2005. Information
about the directors and executive officers of Westcorp is set forth in
the proxy statement for Westcorp's 2005 annual meeting of
shareholders, as filed with the SEC on a Schedule 14A on March 28,
2005, and information about the directors and executive officers of
WFS Financial is set forth in the proxy statement for WFS Financial's
2005 annual meeting of shareholders, as filed with the SEC on a
Schedule 14A on March 28, 2005. Additional information regarding the
interests of those participants and other persons who may be deemed
participants in the transaction may be obtained by reading the proxy
statement/prospectus regarding the proposed Mergers when it becomes
available. You may obtain free copies of these documents as described
in the preceding paragraph.
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