Another bank shakeup hits state

Citigroup took over Wachovia, the biggest bank by deposits in the region, leaving account holders and mortgage borrowers reeling. According to FDIC data, Wachovia had the largest banking operations in South Florida, with $25.5 billion in deposits — a 16.8 percent market share — and 233 locations, as of June 30, 2007. Citibank was the fourth-largest bank operating in the region. City National Bank of Florida Chairman, CEO and President Leonard Abess says the takeover will likely eliminate the high interest rates Wachovia and Washington Mutual were offering on deposits. The government will guarantee deposits of up to $100,000, and Citigroup will assume a portion of losses on bad mortgages, particularly Wachovia’s option ARMs, also called pick-a-pay, which let borrowers pay less than the accrued monthly interest for 10 years or until the mortgage grew to 125 percent of its original value.