SNL Financial Provides Additional Data on Wachovia Corporation’s $14.2 Billion Bid for SouthTrust Corporation

CHARLOTTESVILLE, VA. -- SNL Financial has released a new table of the fifty largest U.S. banks, reflecting Wachovia Corporation’s (NYSE: WB) announcement today that it will acquire SouthTrust Corporation (NASDQ: SOTR) for a reported $14.2 billion.

SNL Financial’s M&A Manager, Mike Scott, sees this as a positive step forward for the geographic extension of the WB branch network. “SouthTrust’s presence in states west of Georgia, particularly Texas, enhances the overall footprint of the combined franchise. It really beefs them up in Georgia and Florida, too.” These two states represent the majority of the overlap as 79% of SouthTrust’s branches are within 2.5 miles of Wachovia’s in Georgia and 85% in Florida, according to SNL Financial market share data. The acquisition puts Wachovia in the #1 position in the Southeast, approximately $25 billion in deposits and two percentage points ahead of the national behemoth, Bank of America.

SNL Financial’s Senior Analyst for Banks and Thrifts, Robert Clark, questions the price of the deal. Clark indicates, “ This is another example of paying too much for a bank. The market was quick to recognize the dilutive effects of the deal, as Wachovia's share price was down by 3.5% today.” Management has already indicated the deal will not be accretive to earnings until 2007, and their supporting analysis anticipates 36% cost savings from SouthTrust’s expenses.

The price can be attributed to fewer attractive targets in key markets. Scott adds, “Texas is the new Florida. There just isn’t anything left in Florida and the prices keep going up in the Southeast in general. It’s a real seller’s market right now.”

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SNL collects, standardizes and disseminates all relevant corporate, financial, market, and M&A data — plus news and analysis — for the Banking, Financial Services, Insurance, Real Estate, Energy and Media & Communications industries. For more information, visit www.SNL.com.