Wachovia's fall

On Tuesday morning clouds hung low over downtown Raleigh, obscuring the newly placed "Wachovia" lettering atop the former First Union office tower. Down in Charlotte, where even taller Wachovia buildings rise in the bank's headquarters city, the clouds were darker still. Amid the worldwide financial crisis, Wachovia has lost its independence, and Charlotte one of its twin banking giants.

Now Queen City and state leaders are trying to put the best face on the humiliating collapse and takeover Monday (by New York-based Citigroup) of a major North Carolina banking institution. But as Hugh McColl Jr., the retired Bank of America leader, put it with characteristic bluntness, "It's very, very much a body blow to the city."

It's also a testament to decades of good banking gone bad.

Wachovia, originally of Winston-Salem, prospered as a well-run, conservative institution. Early this decade it essentially sold itself to harder-charging First Union of Charlotte, which took the Wachovia name and seemed to engage in an asset race with Bank of America, Charlotte's other financial powerhouse. Then, when CEO Ken Thompson -- from the First Union side -- bought California mortgage lender Golden West Financial Corp. in 2006, he brought Wachovia nothing but trouble. Golden West was loaded with lousy loans and turned out to be a distinctly subprime acquisition. With Wachovia's stock price plummeting, Thompson got the boot in June.

At the end, the prospect of a crippling credit downgrade forced the sale to Citigroup, with a big assist from the FDIC. Now Charlotte waits to see if initial reports -- that the Wachovia consumer banking operations will remain headquartered there, and that unfinished bank buildings will be completed promptly -- are true or just standard corporate dissembling.

Here's hoping that what's left of Wachovia keeps plenty of good jobs in Charlotte, in Raleigh and in North Carolina. The employees didn't bring this on, and the state remains a good place for big banks to do business. It was imprudent ambition and bad timing that brought Wachovia's proud name to the ground.