By Dave Price
Commercial Record Correspondent

Citigroup’s agreement today to acquire the banking operations of Wachovia Corp., in a deal coordinated by the Federal Deposit Insurance Corp., will more than triple Citi’s presence in the state.

The acquisition will provide Citi with a total of 103 branches in Connecticut and nearly $8.8 billion in combined deposits.

Citi's market share also will grow sharply, rising to slightly less than 11 percent of Connecticut deposits. That would put the New York-based bank holding company within a quarter point of People's Bank for third place in the state, according to FDIC deposit data.

Bank of America and Webster Bank still hold the top two spots, respectively, based on their share of deposits statewide. Nationwide, Citigroup will become the largest retail bank in the country with more than $1.3 trillion in total assets and nearly 10 percent of all U.S. bank deposits.

FDIC officials emphasized that Wachovia did not fail but instead was acquired on an open bank basis with assistance from the agency.

“There will be no interruption in services, and (Wachovia) customers should expect business as usual,” FDIC Chairman Sheila C. Bair said in a statement.

Charlotte, N.C.-based Wachovia currently has 78 branches in Connecticut.

Under the deal, Citi will pay Wachovia shareholders $2.16 billion in stock and will assume up to $42 billion of potential losses on Wachovia’s $312 billion pool of loans. Beyond those levels, the FDIC will provide loss protection guarantees in exchange for $12 billion in Citigroup preferred stock and warrants.

Because of relatively little overlap between the two, Citigroup officials said they anticipate closing fewer than 5 percent – or about 200 – of the companies’ 4,300 U.S. branches once the deal closes by the end of the year.