It remains to be seen how back-office operations between Wachovia and Citigroup will be affected, particularly in places like Tampa where Wachovia has its name atop one of the largest urban office buildings and Citigroup also has a large suburban operations center. "Their house is in good order on the branch side, but the operations side is anybody's bet," Schorsch says.

Wachovia has 3,400 retail offices in 21 states, stretching from Florida to Connecticut and west to Texas and California. It also has 3,700 brokerage locations nationwide, some of which were absorbed through its acquisition of St. Louis-based A.G. Edwards & Sons that was completed at the start of this year.

Before the merger, Wachovia was already selling off excess branches, making a $53-million deal in August with New York City-based American Realty Capital for 39 bank offices in six states over the next two years. Schorsch says those locations are from prior bank mergers and likely to be purchased or leased by other banks and financial institutions.

Central to Monday's merger is Citigroup's agreement to absorb up to $42 billion of losses on a $312-billion pool of Wachovia loans. Wachovia's most recent annual report states that the bank had minimal exposure to subprime loans, totaling $6.7 billion, while its exposure to commercial mortgage-backed securities amounted to $11.5 billion in 2007.

Wachovia had been a major buyer of other banks throughout this decade, starting with First Union Corp. (also based in Charlotte) and including Oakland, CA-based Golden West Financial Corp. and Birmingham, AL-based SouthTrust Corp. But analysts point out that the bank became vulnerable to the housing market downturn, particularly after inheriting Golden West's risky ARM program called Pick A Payment that gave customers the option of skipping monthly mortgage payments.

The last straw appears to be the FDIC's seizure of Washington Mutual Inc. last week, after which Wachovia was mentioned among a growing number of banks that would tumble next. The Citigroup buyout is intended to stave off such a massive failure that would instantly affect 122,000 bank employees and many more customers.

"For Wachovia customers, today's action will ensure seamless continuity of service from their bank and full protection for all of their deposits," Bair stated. "There will be no interruption in services and bank customers should expect business as usual."

Reports over the weekend stated that Wachovia did not face any liquidity problems, with the bank's executives offering their own assurances of future existence. "We're going to do what's right for shareholders, I can promise you that," Wachovia CEO Robert Steele told CNBC in a televised interview earlier this month.