Exhibit 99(a)
[WACHOVIA
GRAPHIC]
Contacts:
Mary Eshet 704-383-7777
Christy Phillips 704-383-8178
Investor Contacts:
Alice Lehman 704-374-4139
Ellen Taylor 704-383-1381
Press Release January 16, 2003
WACHOVIA REPORTS 4th QUARTER GAAP NET INCOME OF 66 CENTS PER SHARE
Full Year 2002 Earnings Were $3.6 Billion, Or $2.60 Per Share
4th QUARTER 2002 HIGHLIGHTS
| • | | Quarterly GAAP earnings per share increased 22 percent from fourth quarter 2001. |
| • | | GAAP net income included merger-related and restructuring expenses of $92 million, or $0.06 per share, in the fourth quarter and $243 million, or $0.18, in the full year. |
| • | | Customer satisfaction scores improved for the 15th consecutive quarter. |
| • | | Florida branch and deposit conversion successfully completed. |
| • | | Average low-cost core deposits increased 16 percent from fourth quarter 2001. |
| • | | Mutual fund assets rose 9 percent to $113 billion; fund family ranks 11th in the nation compared with 19th in fourth quarter 2001. |
| • | | Nonperforming assets, including loans held for sale, declined 4 percent from the fourth quarter of 2001 and 7 percent from third quarter 2002. |
| • | | Tier 1 capital ratio improved to 8.23 percent from 7.04 percent in fourth quarter 2001. |
Earnings Highlights | | | | | | | | |
| | | Three Months Ended |
| | | December 31, | | | September 30, | | December 31, |
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(In millions, except per share data) | | 2002 | | | 2002 | | 2001 |
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Earnings | | | | | | | | |
| Net income available to common stockholders | | $ | 891 | | | 913 | | 730 |
Diluted earnings per common share(a) | | $ | 0.66 | | | 0.66 | | 0.54 |
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Financial ratios | | | | | | | | |
| Return on average common stockholders’ equity | | | 11.07 | % | | 11.63 | | 10.15 |
| Net interest margin | | | 3.86 | | | 3.95 | | 3.85 |
| Fee and other income as % of total revenue | | | 43.89 | % | | 42.86 | | 45.33 |
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Capital adequacy(b) | | | | | | | | |
| Tier 1 capital ratio | | | 8.23 | % | | 8.11 | | 7.04 |
| Total capital ratio | | | 12.04 | | | 12.02 | | 11.08 |
| Leverage ratio | | | 6.73 | % | | 6.82 | | 6.19 |
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Asset quality | | | | | | | | |
| Allowance as % of nonaccrual and restructured loans | | | 177 | % | | 163 | | 195 |
| Allowance as % of loans, net | | | 1.72 | | | 1.81 | | 1.83 |
| Net charge-offs as % of average loans, net | | | 0.52 | | | 0.59 | | 0.93 |
| Nonperforming assets as % of loans, net, foreclosed properties and loans held for sale | | | 1.11 | % | | 1.23 | | 1.13 |
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(a) Reported diluted earnings per common share included $0.06 per share of merger-related and restructuring expenses in the fourth quarter of 2002. (b) The fourth quarter of 2002 is based on estimates. | | | | | | | | |
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1
WACHOVIA REPORTS 4TH QUARTER 2002 EARNINGS
CHARLOTTE, N.C. – Wachovia Corp. (NYSE:WB) today reported fourth quarter 2002 net income available to common stockholders of $891 million, or $0.66 per share. These earnings included $92 million, or $0.06 per share, of after-tax net merger-related and restructuring expenses. Fourth quarter 2002 results also reflected a lower tax provision due primarily to the recognition of the remaining tax benefit related to the company’s loss on its investment in The Money Store. This tax benefit was fully offset by credit and legal actions initiated in the quarter as part of the company’s ongoing efforts to reduce risk.
Full year 2002 net income available to common stockholders was $3.6 billion, or $2.60 per share. Results in 2002 included $243 million, or $0.18 per share, of after-tax net merger-related and restructuring expenses.
“Our strong fourth quarter performance caps a year of superb execution on our goals. We delivered on all of our promises – we expanded distribution, reduced risk, controlled expenses and built capital, which enabled us to regain a double A (Aa3) Moody’s debt rating,” said Ken Thompson, president and CEO. “Our people have much to be proud of – their great teamwork and dedication helped us meet each merger integration milestone on time and on budget. In fact, we exceeded our merger expense efficiency goal by 23 percent. And through a year of new product rollouts, systems conversion and merger integration, our customer service rankings improved for the 15th consecutive quarter and we emerged as best-in-class among the major banks in our footprint.
“Each line of business focused on the fundamentals and showed excellent progress against strong economic headwinds,” he added. “Our balanced business model and broad distribution enabled us in 2002 to grow client assets in mutual funds 9 percent, annuities sales 22 percent, and low-cost core deposits 16 percent despite the very difficult economic environment.
“In addition, we are pleased that our improved performance enabled us to increase the dividend an annualized 8 percent. And we’re particularly proud of generating a total return to stockholders of 19.5 percent in 2002, best among the 50 largest U.S. banks.”
Wachovia Corporation | | | | | | | |
| | | Three Months Ended |
| | | December 31, | | September 30, | | December 31, |
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(In millions) | | | 2002 | | 2002 | | 2001 |
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| Total revenue (Tax-equivalent) | | $ | 4,507 | | 4,410 | | 4,544 |
| Provision for loan losses | | | 308 | | 435 | | 381 |
| Noninterest expense | | | 3,042 | | 2,945 | | 3,030 |
| Net income available to common stockholders | | | 891 | | 913 | | 730 |
| Average loans, net | | | 153,036 | | 151,676 | | 162,839 |
| Average core deposits | | $ | 171,000 | | 167,452 | | 161,043 |
Average loans in the fourth quarter of 2002 were $153 billion, up modestly from the previous quarter and down from the fourth quarter of 2001, reflecting higher consumer loan balances dampened by continued lower corporate loan demand. Average loans declined $9.8 billion from the previous year due to loan sales and securitizations, transfers to loans held for sale, and weak commercial loan demand. Average core deposits increased 2 percent from the previous quarter and 6 percent from the previous year to $171 billion, while average low-cost core deposits increased 4 percent from the previous quarter and 16 percent from the previous year to $124 billion.
2
WACHOVIA REPORTS 4TH QUARTER 2002 EARNINGS
Fourth quarter 2002 net charge-offs declined 11 percent from the third quarter of 2002 and 47 percent from the fourth quarter of 2001 to $199 million, or 0.52 percent of average net loans. Total nonperforming assets including loans held for sale declined 7 percent from the third quarter of 2002 and 4 percent from the fourth quarter of 2001 to $1.9 billion in the fourth quarter of 2002. In the full year of 2002, net charge-offs were $1.1 billion, or 0.73 percent of average net loans.
Lines of Business
General Bank
General Bank Highlights | | | | | | |
| | | Three Months Ended |
| | | December 31, | | September 30, | | December 31, |
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(In millions) | | 2002 | | 2002 | | 2001 |
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| Total revenue (Tax-equivalent) | | $ | 2,378 | | 2,288 | | 2,262 |
| Provision for loan losses | | | 144 | | 114 | | 130 |
| Noninterest expense | | | 1,318 | | 1,256 | | 1,239 |
| Segment earnings | | | 581 | | 583 | | 568 |
| Average loans, net | | | 106,081 | | 101,429 | | 97,054 |
| Average core deposits | | | 144,252 | | 141,861 | | 133,976 |
| Economic capital, average | | $ | 5,531 | | 5,520 | | 5,346 |
The General Bank includes retail, small business and commercial customers. General Bank revenue increased 4 percent from the third quarter of 2002 and 5 percent from the fourth quarter a year ago. Key factors included solid growth in core deposits and residential mortgage-related revenues, investment sales through the branch system and continued strong debit card sales volume. Expenses rose largely due to higher variable compensation, technology and infrastructure upgrades, and nonrecurring personnel expenses. Average core deposits increased 2 percent from the third quarter of 2002 and 8 percent from the prior year. The increase in average low-cost core deposits was particularly strong at 4 percent from the prior quarter and 21 percent from the prior year. Average loans grew 5 percent from the third quarter of 2002 and 9 percent from the prior year, reflecting strength in consumer real estate-secured products. The General Bank added 87,000 net new checking accounts since December 31, 2001.
Capital Management
Capital Management Highlights | | | | | | |
| | | Three Months Ended |
| | | December 31, | | September 30, | | December 31, |
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(In millions) | | 2002 | | 2002 | | 2001 |
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| Total revenue (Tax-equivalent) | | $ | 773 | | 754 | | 809 |
| Provision for loan losses | | | – | | – | | – |
| Noninterest expense | | | 627 | | 623 | | 669 |
| Segment earnings | | | 92 | | 83 | | 88 |
| Average loans, net | | | 131 | | 177 | | 337 |
| Average core deposits | | | 1,487 | | 1,314 | | 1,505 |
| Economic capital, average | | $ | 637 | | 624 | | 673 |
The Capital Management Group (CMG) includes asset management and retail brokerage services. CMG grew fourth quarter 2002 earnings 11 percent from third quarter 2002 and 5 percent from the fourth quarter of 2001 due to its broad product array, multi-distribution channels and tight expense controls despite the weak equities markets.
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WACHOVIA REPORTS 4TH QUARTER 2002 EARNINGS
Annuity sales of $1.5 billion (including record bank annuity sales of $1.1 billion) and strong net mutual fund sales of $5.4 billion in the quarter drove revenue growth. Assets under management at December 31, 2002, were a record $232 billion, up 3 percent from December 31, 2001. Included in assets under management are mutual fund assets of a record $113 billion. The acquisitions of certain assets of E-Risk Services, LLC, a leading agency provider of management liability insurance, and of J.L. Kaplan Associates, LLC, a privately held investment management firm with $3 billion in assets under management, both closed in the fourth quarter of 2002.
Wealth Management
Wealth Management Highlights | | | | | | |
| | | Three Months Ended |
| | | December 31, | | September 30, | | December 31, |
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(In millions) | | 2002 | | 2002 | | 2001 |
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| Total revenue (Tax-equivalent) | | $ | 245 | | 228 | | 230 |
| Provision for loan losses | | | 6 | | 3 | | 4 |
| Noninterest expense | | | 174 | | 163 | | 160 |
| Segment earnings | | | 41 | | 39 | | 42 |
| Average loans, net | | | 9,028 | | 8,854 | | 8,148 |
| Average core deposits | | | 10,339 | | 10,006 | | 9,431 |
| Economic capital, average | | $ | 353 | | 345 | | 318 |
Wealth Management includes private banking, personal trust, investment advisory services, charitable services, financial planning and insurance brokerage. Revenue increased 7 percent from both the third quarter of 2002 and the fourth quarter of 2001, led by strength in net interest income and insurance commissions, which offset soft investment management fees. Average loans grew 2 percent from the third quarter of 2002 and 11 percent year over year, while average core deposits, led by higher money market and checking account balances, rose 3 percent from the third quarter of 2002 and 10 percent from the fourth quarter of 2001. Expenses increased due to higher variable compensation costs and higher overhead expenses related to increased infrastructure investment. Wealth Management assets under management (included in the CMG total) declined 14 percent from December 31, 2001, to $66 billion at December 31, 2002, primarily due to lower equity market valuations year over year.
Corporate and Investment Bank
Corporate and Investment Bank Highlights | | | | | | |
| | | Three Months Ended |
| | | December 31, | | September 30, | | December 31, |
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(In millions) | | 2002 | | 2002 | | 2001 |
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| Total revenue (Tax-equivalent) | | $ | 946 | | 936 | | 1,087 |
| Provision for loan losses | | | 161 | | 317 | | 254 |
| Noninterest expense | | | 535 | | 508 | | 550 |
| Segment earnings | | | 155 | | 67 | | 177 |
| Average loans, net | | | 38,673 | | 40,250 | | 46,235 |
| Average core deposits | | | 13,491 | | 12,832 | | 12,625 |
| Economic capital, average | | $ | 6,747 | | 7,131 | | 8,288 |
While weak market conditions dampened year over year revenue growth in the Corporate and Investment Bank, revenue grew modestly in the fourth quarter of 2002 compared with the previous quarter due to improved investment banking performance that resulted in 7 percent growth in fee income. Higher net principal investing losses more than offset
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WACHOVIA REPORTS 4TH QUARTER 2002 EARNINGS
lower trading account losses in the quarter. The increase in expense from the previous quarter reflected severance expenses and higher incentive payments tied to higher revenue. The decline in expense from the fourth quarter of 2001 reflected reductions in personnel. Average loans declined due to weak overall loan demand.
Outlook
“While economic growth in 2003 may continue to be somewhat subdued, we expect some improvement over 2002,” said Thompson. “For our industry, we expect diminished credit problems and modestly better conditions in the financial markets. That bodes well for our customers, and we are well positioned to meet all of their needs. We feel very confident about our prospects in 2003.”
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Wachovia Corporation (NYSE:WB), created through the September 1, 2001, merger of First Union and Wachovia, had assets of $342 billion and stockholders’ equity of $32 billion at December 31, 2002. Wachovia is a leading provider of financial services to retail, brokerage and corporate customers throughout the East Coast and the nation. The company operates full-service banking offices under the First Union and Wachovia names in 11 East Coast states and Washington, D.C., and offers full-service brokerage with offices in 49 of the 50 states. Global services are provided through more than 30 international offices. Online banking and brokerage products and services are available through wachovia.com.
Earnings Conference Call and Supplemental Materials
Wachovia President and CEO Ken Thompson and CFO Bob Kelly will review Wachovia’s fourth quarter 2002 results in a conference call and audio webcast beginning at 11 a.m. Eastern Time today. Supplemental materials relating to fourth quarter results are available on the Internet at wachovia.com/investor, and investors are encouraged to access these materials in advance of the conference call.
Webcast Instructions: To gain access to the webcast, which will be “listen-only,” go to wachovia.com/investor and click on the link “Wachovia Fourth Quarter Earnings Audio Webcast.” In order to listen to the webcast, you will need to download either Real Player or Media Player.
Teleconference Instructions: The telephone number for the conference call is 1-888-889-1954 for U.S. callers or 212-287-1616 for international callers. You will be asked to tell the answering coordinator your name and the name of your firm. Mention the conference Access Code: Kelly.
Replay: Thursday, January 16 at 2 p.m. through 5 p.m., Friday, February 14. Replay telephone number is 402-280-9967.
***
This news release may contain various forward-looking statements. A discussion of various factors that could cause Wachovia Corporation’s actual results to differ materially from those expressed in such forward-looking statements is included in Wachovia’s filings with the Securities and Exchange Commission, including its Current Report on Form 8-K dated January 16, 2003.
5
WACHOVIA CORPORATION AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(Unaudited)
| | | 2002
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| | | Fourth | | | Third | | Second | | First | | | Fourth |
(Dollars in millions, except per share data) | | Quarter | | | Quarter | | Quarter | | Quarter | | | Quarter |
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EARNINGS SUMMARY | | | | | | | | | | | | | |
| Net interest income (Tax-equivalent) | | $ | 2,529 | | | 2,520 | | 2,515 | | 2,477 | | | 2,484 |
| Fee and other income | | | 1,978 | | | 1,890 | | 2,110 | | 2,027 | | | 2,060 |
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| Total revenue (Tax-equivalent) | | | 4,507 | | | 4,410 | | 4,625 | | 4,504 | | | 4,544 |
| Provision for loan losses | | | 308 | | | 435 | | 397 | | 339 | | | 381 |
| Other noninterest expense | | | 2,750 | | | 2,686 | | 2,622 | | 2,609 | | | 2,691 |
| Merger-related and restructuring expenses | | | 145 | | | 107 | | 143 | | (8 | ) | | 88 |
| Goodwill and other intangible amortization | | | 147 | | | 152 | | 161 | | 168 | | | 251 |
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| Total noninterest expense | | | 3,042 | | | 2,945 | | 2,926 | | 2,769 | | | 3,030 |
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| Income before income taxes (Tax-equivalent) | | | 1,157 | | | 1,030 | | 1,302 | | 1,396 | | | 1,133 |
| Income taxes (Tax-equivalent) | | | 262 | | | 114 | | 447 | | 483 | | | 397 |
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| Net income | | | 895 | | | 916 | | 855 | | 913 | | | 736 |
| Dividends on preferred stock | | | 4 | | | 3 | | 6 | | 6 | | | 6 |
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| Net income available to common stockholders | | $ | 891 | | | 913 | | 849 | | 907 | | | 730 |
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| Diluted earnings per common share | | $ | 0.66 | | | 0.66 | | 0.62 | | 0.66 | | | 0.54 |
| Return on average common stockholders' equity | | | 11.07 | % | | 11.63 | | 11.52 | | 12.74 | | | 10.15 |
| Return on average assets | | | 1.08 | % | | 1.13 | | 1.09 | | 1.17 | | | 0.91 |
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ASSET QUALITY | | | | | | | | | | | | | |
| Allowance as % of loans, net | | | 1.72 | % | | 1.81 | | 1.86 | | 1.84 | | | 1.83 |
| Allowance as % of nonperforming assets | | | 161 | | | 149 | | 150 | | 162 | | | 175 |
| Net charge-offs as % of average loans, net | | | 0.52 | | | 0.59 | | 0.97 | | 0.83 | | | 0.93 |
| Nonperforming assets as % of loans, net, foreclosed properties and loans held for sale | | | 1.11 | | | 1.23 | | 1.24 | | 1.21 | | | 1.13 |
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CAPITAL ADEQUACY (a) | | | | | | | | | | | | | |
| Tier I capital ratio | | | 8.23 | % | | 8.11 | | 7.83 | | 7.49 | | | 7.04 |
| Total capital ratio | | | 12.04 | | | 12.02 | | 11.89 | | 11.56 | | | 11.08 |
| Leverage ratio | | | 6.73 | % | | 6.82 | | 6.75 | | 6.51 | | | 6.19 |
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OTHER DATA | | | | | | | | | | | | | |
| Average diluted common shares (In millions) | | | 1,360 | | | 1,374 | | 1,375 | | 1,366 | | | 1,363 |
| Actual common shares (In millions) | | | 1,357 | | | 1,373 | | 1,371 | | 1,368 | | | 1,362 |
| Dividends paid per common share | | $ | 0.26 | | | 0.26 | | 0.24 | | 0.24 | | | 0.24 |
| Dividends paid per preferred share | | | 0.04 | | | 0.04 | | 0.06 | | 0.06 | | | 0.06 |
| Book value per common share | | | 23.63 | | | 23.38 | | 22.15 | | 21.04 | | | 20.88 |
| Common stock price | | | 36.44 | | | 32.69 | | 38.18 | | 37.08 | | | 31.36 |
| Market capitalization (In millions) | | $ | 49,461 | | | 44,887 | | 52,347 | | 50,716 | | | 42,701 |
| Common stock to book price | | | 154 | % | | 140 | | 172 | | 176 | | | 150 |
| FTE employees | | | 80,778 | | | 80,987 | | 82,686 | | 82,809 | | | 84,046 |
| Total financial centers/brokerage offices | | | 3,280 | | | 3,342 | | 3,347 | | 3,362 | | | 3,434 |
| ATMs | | | 4,560 | | | 4,604 | | 4,617 | | 4,618 | | | 4,675 |
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| (a) | | The fourth quarter of 2002 is based on estimates. |
6
WACHOVIA CORPORATION AND SUBSIDIARIES
OTHER FINANCIAL DATA
(Unaudited)
| | | 2002
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(In millions) | | Fourth Quarter | | | Third Quarter | | | Second Quarter | | First Quarter | | Fourth Quarter |
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EARNINGS EXCLUDING MERGER-RELATED AND RESTRUCTURING EXPENSES | | | | | | | | | | | | | |
| Net income | | $ | 987 | | | 983 | | | 944 | | 908 | | 799 |
| Return on average assets | | | 1.19 | % | | 1.21 | | | 1.20 | | 1.17 | | 0.99 |
| Return on average common stockholders' equity | | | 12.13 | | | 12.44 | | | 12.72 | | 12.68 | | 10.77 |
| Overhead efficiency ratio | | | 64.30 | % | | 64.33 | | | 60.19 | | 61.66 | | 64.74 |
| Operating leverage | | $ | 36 | | | (267 | ) | | 113 | | 125 | | 902 |
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EARNINGS EXCLUDING MERGER-RELATED
AND RESTRUCTURING EXPENSES, GOODWILL
AND OTHER INTANGIBLE AMORTIZATION | | | | | | | | | | | | | |
| Net income | | $ | 1,070 | | | 1,081 | | | 1,047 | | 1,016 | | 980 |
| Dividend payout ratio on common shares | | | 33.33 | % | | 33.33 | | | 31.58 | | 32.43 | | 33.80 |
| Return on average tangible assets | | | 1.34 | | | 1.39 | | | 1.39 | | 1.36 | | 1.27 |
| Return on average tangible common stockholders' equity | | | 21.52 | | | 22.84 | | | 24.66 | | 25.30 | | 23.56 |
| Overhead efficiency ratio | | | 61.04 | % | | 60.87 | | | 56.72 | | 57.93 | | 59.22 |
| Operating leverage | | $ | 30 | | | (275 | ) | | 105 | | 42 | | 1,036 |
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OTHER FINANCIAL DATA | | | | | | | | | | | | | |
| Net interest margin | | | 3.86 | % | | 3.95 | | | 3.97 | | 3.91 | | 3.85 |
| Fee and other income as % of total revenue | | | 43.89 | | | 42.86 | | | 45.63 | | 45.00 | | 45.33 |
| Effective income tax rate | | | 18.39 | | | 6.20 | | | 31.46 | | 32.12 | | 31.91 |
| Tax rate (tax-equivalent) (a) | | | 22.50 | % | | 11.20 | | | 34.27 | | 34.60 | | 35.04 |
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AVERAGE BALANCE SHEET DATA | | | | | | | | | | | | | |
| Commercial loans, net | | $ | 94,854 | | | 96,552 | | | 98,303 | | 99,489 | | 102,230 |
| Consumer loans, net | | | 58,182 | | | 55,124 | | | 56,782 | | 57,575 | | 60,609 |
| Loans, net | | | 153,036 | | | 151,676 | | | 155,085 | | 157,064 | | 162,839 |
| Earning assets | | | 260,968 | | | 254,673 | | | 253,679 | | 254,739 | | 257,577 |
| Total assets | | | 329,960 | | | 321,511 | | | 314,714 | | 315,322 | | 319,221 |
| Core deposits | | | 171,000 | | | 167,452 | | | 164,781 | | 162,812 | | 161,043 |
| Total deposits | | | 187,704 | | | 180,077 | | | 178,196 | | 178,509 | | 179,971 |
| Interest-bearing liabilities | | | 232,024 | | | 224,170 | | | 223,812 | | 227,365 | | 231,742 |
| Stockholders' equity | | $ | 31,946 | | | 31,103 | | | 29,576 | | 28,903 | | 28,540 |
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PERIOD-END BALANCE SHEET DATA | | | | | | | | | | | | | |
| Commercial loans, net | | $ | 98,905 | | | 101,931 | | | 102,780 | | 104,883 | | 106,308 |
| Consumer loans, net | | | 64,192 | | | 55,611 | | | 56,020 | | 57,411 | | 57,493 |
| Loans, net | | | 163,097 | | | 157,542 | | | 158,800 | | 162,294 | | 163,801 |
| Goodwill and other intangible assets | | | | | | | | | | | | | |
| Goodwill | | | 10,880 | | | 10,810 | | | 10,728 | | 10,728 | | 10,616 |
| Deposit base | | | 1,225 | | | 1,363 | | | 1,508 | | 1,661 | | 1,822 |
| Customer relationships | | | 239 | | | 222 | | | 229 | | 237 | | 244 |
| Tradename | | | 90 | | | 90 | | | 90 | | 90 | | 90 |
| Total assets | | | 341,839 | | | 333,880 | | | 324,679 | | 319,853 | | 330,452 |
| Core deposits | | | 175,743 | | | 173,697 | | | 166,779 | | 165,759 | | 169,310 |
| Total deposits | | | 191,518 | | | 187,785 | | | 180,663 | | 180,033 | | 187,453 |
| Stockholders' equity | | $ | 32,078 | | | 32,105 | | | 30,379 | | 28,785 | | 28,455 |
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| (a) | | The tax-equivalent tax rate applies to fully tax-equivalized revenues. |
7
WACHOVIA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| | | 2002
| | | 2001
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| | | Fourth | | | Third | | | Second | | | First | | | Fourth | |
(In millions, except per share data) | | Quarter | | | Quarter | | | Quarter | | | Quarter | | | Quarter | |
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INTEREST INCOME | | | | | | | | | | | | | | | | |
| Interest and fees on loans | | $ | 2,538 | | | 2,558 | | | 2,563 | | | 2,637 | | | 2,970 | |
| Interest and dividends on securities | | | 978 | | | 935 | | | 906 | | | 856 | | | 876 | |
| Trading account interest | | | 158 | | | 179 | | | 173 | | | 155 | | | 166 | |
| Other interest income | | | 203 | | | 240 | | | 252 | | | 255 | | | 299 | |
|
|
|
|
|
|
|
|
|
|
|
| Total interest income | | | 3,877 | | | 3,912 | | | 3,894 | | | 3,903 | | | 4,311 | |
|
|
|
|
|
|
|
|
|
|
|
INTEREST EXPENSE | | | | | | | | | | | | | | | | |
| Interest on deposits | | | 832 | | | 847 | | | 836 | | | 915 | | | 1,116 | |
| Interest on short-term borrowings | | | 295 | | | 310 | | | 300 | | | 286 | | | 372 | |
| Interest on long-term debt | | | 280 | | | 289 | | | 297 | | | 276 | | | 391 | |
|
|
|
|
|
|
|
|
|
|
|
| Total interest expense | | | 1,407 | | | 1,446 | | | 1,433 | | | 1,477 | | | 1,879 | |
|
|
|
|
|
|
|
|
|
|
|
| Net interest income | | | 2,470 | | | 2,466 | | | 2,461 | | | 2,426 | | | 2,432 | |
| Provision for loan losses | | | 308 | | | 435 | | | 397 | | | 339 | | | 381 | |
|
|
|
|
|
|
|
|
|
|
|
| Net interest income after provision for loan losses | | | 2,162 | | | 2,031 | | | 2,064 | | | 2,087 | | | 2,051 | |
|
|
|
|
|
|
|
|
|
|
|
FEE AND OTHER INCOME | | | | | | | | | | | | | | | | |
| Service charges | | | 421 | | | 432 | | | 420 | | | 425 | | | 426 | |
| Other banking fees | | | 236 | | | 232 | | | 241 | | | 236 | | | 246 | |
| Commissions | | | 473 | | | 458 | | | 481 | | | 464 | | | 448 | |
| Fiduciary and asset management fees | | | 439 | | | 427 | | | 466 | | | 477 | | | 478 | |
| Advisory, underwriting and other investment banking fees | | | 182 | | | 143 | | | 192 | | | 136 | | | 157 | |
| Trading account profits (losses) | | | (42 | ) | | (71 | ) | | 33 | | | 104 | | | 66 | |
| Principal investing | | | (105 | ) | | (29 | ) | | (42 | ) | | (90 | ) | | (21 | ) |
| Security gains (losses) | | | 46 | | | 71 | | | 58 | | | (6 | ) | | (16 | ) |
| Other income | | | 328 | | | 227 | | | 261 | | | 281 | | | 276 | |
|
|
|
|
|
|
|
|
|
|
|
| Total fee and other income | | | 1,978 | | | 1,890 | | | 2,110 | | | 2,027 | | | 2,060 | |
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST EXPENSE | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 1,681 | | | 1,588 | | | 1,665 | | | 1,663 | | | 1,663 | |
| Occupancy | | | 202 | | | 195 | | | 194 | | | 195 | | | 210 | |
| Equipment | | | 255 | | | 234 | | | 231 | | | 226 | | | 247 | |
| Advertising | | | 16 | | | 20 | | | 25 | | | 19 | | | 21 | |
| Communications and supplies | | | 143 | | | 136 | | | 132 | | | 134 | | | 142 | |
| Professional and consulting fees | | | 126 | | | 111 | | | 96 | | | 88 | | | 113 | |
| Goodwill and other intangible amortization | | | 147 | | | 152 | | | 161 | | | 168 | | | 251 | |
| Merger-related and restructuring expenses | | | 145 | | | 107 | | | 143 | | | (8 | ) | | 88 | |
| Sundry expense | | | 327 | | | 402 | | | 279 | | | 284 | | | 295 | |
|
|
|
|
|
|
|
|
|
|
|
| Total noninterest expense | | | 3,042 | | | 2,945 | | | 2,926 | | | 2,769 | | | 3,030 | |
|
|
|
|
|
|
|
|
|
|
|
| Income before income taxes | | | 1,098 | | | 976 | | | 1,248 | | | 1,345 | | | 1,081 | |
| Income taxes | | | 203 | | | 60 | | | 393 | | | 432 | | | 345 | |
|
|
|
|
|
|
|
|
|
|
|
| Net income | | | 895 | | | 916 | | | 855 | | | 913 | | | 736 | |
| Dividends on preferred stock | | | 4 | | | 3 | | | 6 | | | 6 | | | 6 | |
|
|
|
|
|
|
|
|
|
|
|
| Net income available to common stockholders | | $ | 891 | | | 913 | | | 849 | | | 907 | | | 730 | |
|
|
|
|
|
|
|
|
|
|
|
PER COMMON SHARE DATA | | | | | | | | | | | | | | | | |
| Basic earnings | | $ | 0.66 | | | 0.67 | | | 0.62 | | | 0.67 | | | 0.54 | |
| Diluted earnings | | | 0.66 | | | 0.66 | | | 0.62 | | | 0.66 | | | 0.54 | |
| Cash dividends | | $ | 0.26 | | | 0.26 | | | 0.24 | | | 0.24 | | | 0.24 | |
AVERAGE COMMON SHARES | | | | | | | | | | | | | | | | |
| Basic | | | 1,350 | | | 1,362 | | | 1,360 | | | 1,355 | | | 1,352 | |
| Diluted | | | 1,360 | | | 1,374 | | | 1,375 | | | 1,366 | | | 1,363 | |
|
|
|
|
|
|
|
|
|
|
|
8
WACHOVIA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| | | Years Ended
December 31,
| |
(In millions, except per share data) | | 2002 | | | 2001 | |
|
|
|
|
|
INTEREST INCOME | | | | | | | |
| Interest and fees on loans | | $ | 10,296 | | | 10,537 | |
| Interest and dividends on securities | | | 3,675 | | | 3,534 | |
| Trading account interest | | | 665 | | | 760 | |
| Other interest income | | | 950 | | | 1,269 | |
|
|
|
|
|
| Total interest income | | | 15,586 | | | 16,100 | |
|
|
|
|
|
INTEREST EXPENSE | | | | | | | |
| Interest on deposits | | | 3,430 | | | 4,744 | |
| Interest on short-term borrowings | | | 1,191 | | | 1,736 | |
| Interest on long-term debt | | | 1,142 | | | 1,845 | |
|
|
|
|
|
| Total interest expense | | | 5,763 | | | 8,325 | |
|
|
|
|
|
| Net interest income | | | 9,823 | | | 7,775 | |
| Provision for loan losses | | | 1,479 | | | 1,947 | |
|
|
|
|
|
| Net interest income after provision for loan losses | | | 8,344 | | | 5,828 | |
|
|
|
|
|
FEE AND OTHER INCOME | | | | | | | |
| Service charges | | | 1,698 | | | 1,361 | |
| Other banking fees | | | 945 | | | 806 | |
| Commissions | | | 1,876 | | | 1,568 | |
| Fiduciary and asset management fees | | | 1,809 | | | 1,643 | |
| Advisory, underwriting and other investment banking fees | | | 653 | | | 492 | |
| Trading account profits | | | 24 | | | 344 | |
| Principal investing | | | (266 | ) | | (707 | ) |
| Security gains (losses) | | | 169 | | | (67 | ) |
| Other income | | | 1,097 | | | 856 | |
|
|
|
|
|
| Total fee and other income | | | 8,005 | | | 6,296 | |
|
|
|
|
|
NONINTEREST EXPENSE | | | | | | | |
| Salaries and employee benefits | | | 6,597 | | | 5,810 | |
| Occupancy | | | 786 | | | 730 | |
| Equipment | | | 946 | | | 879 | |
| Advertising | | | 80 | | | 66 | |
| Communications and supplies | | | 545 | | | 480 | |
| Professional and consulting fees | | | 421 | | | 359 | |
| Goodwill and other intangible amortization | | | 628 | | | 523 | |
| Merger-related and restructuring expenses | | | 387 | | | 106 | |
| Sundry expense | | | 1,292 | | | 878 | |
|
|
|
|
|
| Total noninterest expense | | | 11,682 | | | 9,831 | |
|
|
|
|
|
| Income before income taxes | | | 4,667 | | | 2,293 | |
| Income taxes | | | 1,088 | | | 674 | |
|
|
|
|
|
| Net income | | | 3,579 | | | 1,619 | |
| Dividends on preferred stock | | | 19 | | | 6 | |
|
|
|
|
|
| Net income available to common stockholders | | $ | 3,560 | | | 1,613 | |
|
|
|
|
|
PER COMMON SHARE DATA | | | | | | | |
| Basic earnings | | $ | 2.62 | | | 1.47 | |
| Diluted earnings | | | 2.60 | | | 1.45 | |
| Cash dividends | | $ | 1.00 | | | 0.96 | |
AVERAGE COMMON SHARES | | | | | | | |
| Basic | | | 1,356 | | | 1,096 | |
| Diluted | | | 1,369 | | | 1,105 | |
|
|
|
|
|
9
WACHOVIA CORPORATION AND SUBSIDIARIES
LOANS - ON-BALANCE SHEET, AND MANAGED AND SERVICING PORTFOLIOS
(Unaudited)
| | | 2002
| | 2001
|
| | | Fourth | | Third | | Second | | First | | Fourth |
(In millions) | | Quarter | | Quarter | | Quarter | | Quarter | | Quarter |
|
|
|
|
|
|
|
|
|
|
|
ON-BALANCE SHEET LOAN PORTFOLIO | | | | | | | | | | | |
COMMERCIAL | | | | | | | | | | | |
| Commercial, financial and agricultural | | $ | 56,501 | | 57,899 | | 57,984 | | 60,385 | | 61,258 |
| Real estate—construction and other | | | 6,849 | | 7,558 | | 8,035 | | 8,137 | | 7,969 |
| Real estate—mortgage | | | 16,655 | | 16,967 | | 17,349 | | 17,186 | | 17,234 |
| Lease financing | | | 22,667 | | 22,616 | | 22,044 | | 22,223 | | 21,958 |
| Foreign | | | 6,425 | | 6,992 | | 7,241 | | 6,920 | | 7,653 |
|
|
|
|
|
|
|
|
|
|
|
| Total commercial | | | 109,097 | | 112,032 | | 112,653 | | 114,851 | | 116,072 |
|
|
|
|
|
|
|
|
|
|
|
CONSUMER | | | | | | | | | | | |
| Real estate—mortgage | | | 24,979 | | 17,527 | | 19,803 | | 20,901 | | 22,139 |
| Installment loans | | | 38,817 | | 37,889 | | 35,940 | | 36,073 | | 34,666 |
| Vehicle leasing | | | 80 | | 43 | | 168 | | 345 | | 618 |
|
|
|
|
|
|
|
|
|
|
|
| Total consumer | | | 63,876 | | 55,459 | | 55,911 | | 57,319 | | 57,423 |
|
|
|
|
|
|
|
|
|
|
|
| Total loans | | | 172,973 | | 167,491 | | 168,564 | | 172,170 | | 173,495 |
| Unearned income | | | 9,876 | | 9,949 | | 9,764 | | 9,876 | | 9,694 |
|
|
|
|
|
|
|
|
|
|
|
| Loans, net (on-balance sheet) | | $ | 163,097 | | 157,542 | | 158,800 | | 162,294 | | 163,801 |
|
|
|
|
|
|
|
|
|
|
|
|
MANAGED PORTFOLIO (a) | | | | | | | | | | | |
|
|
|
|
|
|
|
|
|
|
|
COMMERCIAL | | | | | | | | | | | |
| On-balance sheet loan portfolio | | $ | 109,097 | | 112,032 | | 112,653 | | 114,851 | | 116,072 |
| Securitized loans—off-balance sheet | | | 2,218 | | 2,288 | | 2,318 | | 5,816 | | 5,827 |
| Loans held for sale included in other assets | | | 1,140 | | 1,271 | | 779 | | 962 | | 1,478 |
|
|
|
|
|
|
|
|
|
|
|
| Total commercial | | | 112,455 | | 115,591 | | 115,750 | | 121,629 | | 123,377 |
|
|
|
|
|
|
|
|
|
|
|
CONSUMER | | | | | | | | | | | |
| Real estate—mortgage | | | | | | | | | | | |
| On-balance sheet loan portfolio | | | 24,979 | | 17,527 | | 19,803 | | 20,901 | | 22,139 |
| Securitized loans—off-balance sheet | | | 325 | | 397 | | — | | — | | — |
| Securitized loans included in securities | | | 6,223 | | 7,268 | | 5,761 | | 5,219 | | 5,344 |
| Loans held for sale included in other assets | | | 2,720 | | 2,473 | | 1,387 | | 1,554 | | 2,420 |
|
|
|
|
|
|
|
|
|
|
|
| Total real estate—mortgage | | | 34,247 | | 27,665 | | 26,951 | | 27,674 | | 29,903 |
|
|
|
|
|
|
|
|
|
|
|
| Installment loans | | | | | | | | | | | |
| On-balance sheet loan portfolio | | | 38,817 | | 37,889 | | 35,940 | | 36,073 | | 34,666 |
| Securitized loans—off-balance sheet | | | 13,217 | | 13,164 | | 13,379 | | 13,989 | | 14,095 |
| Securitized loans included in securities | | | 11,093 | | 11,695 | | 8,918 | | 9,230 | | 9,776 |
| Loans held for sale included in other assets | | | 2,152 | | 2,513 | | 6,232 | | 4,615 | | 3,865 |
|
|
|
|
|
|
|
|
|
|
|
| Total installment loans | | | 65,279 | | 65,261 | | 64,469 | | 63,907 | | 62,402 |
|
|
|
|
|
|
|
|
|
|
|
| Vehicle leasing—on-balance sheet loan portfolio | | | 80 | | 43 | | 168 | | 345 | | 618 |
|
|
|
|
|
|
|
|
|
|
|
| Total consumer | | | 99,606 | | 92,969 | | 91,588 | | 91,926 | | 92,923 |
|
|
|
|
|
|
|
|
|
|
|
| Total managed portfolio | | $ | 212,061 | | 208,560 | | 207,338 | | 213,555 | | 216,300 |
|
|
|
|
|
|
|
|
|
|
|
|
SERVICING PORTFOLIO (b) | | | | | | | | | | | |
| Commercial | | $ | 59,336 | | 53,611 | | 50,001 | | 47,657 | | 42,210 |
| Consumer | | $ | 2,272 | | 2,490 | | 1,773 | | 1,844 | | 2,900 |
|
|
|
|
|
|
|
|
|
|
|
(a) The managed portfolio includes the on-balance sheet loan portfolio, loans securitized for which the assets are classified in securities on-balance sheet, loans held for sale that are classified in other assets on-balance sheet and the off-balance sheet portfolio of securitized loans sold, where we service the loans.
(b) The servicing portfolio consists of third party commercial and consumer loans for which our sole function is that of servicing the loans for the third parties.
10
WACHOVIA CORPORATION AND SUBSIDIARIES
ALLOWANCE FOR LOAN LOSSES AND NONPERFORMING ASSETS
(Unaudited)
| | | 2002
| | | 2001
| |
| | | Fourth | | | Third | | | Second | | | First | | | Fourth | |
(In millions) | | Quarter | | | Quarter | | | Quarter | | | Quarter | | | Quarter | |
|
|
|
|
|
|
|
|
|
|
|
ALLOWANCE FOR LOAN LOSSES | | | | | | | | | | | | | | | | |
| Balance, beginning of period | | $ | 2,847 | | | 2,951 | | | 2,986 | | | 2,995 | | | 3,039 | |
| Provision for loan losses relating to loans transferred to other assets or sold | | | 109 | | | 211 | | | 23 | | | 14 | | | 3 | |
| Provision for loan losses | | | 199 | | | 224 | | | 374 | | | 325 | | | 378 | |
| Allowance relating to loans acquired, transferred to other assets or sold | | | (158 | ) | | (315 | ) | | (58 | ) | | (23 | ) | | (47 | ) |
| Net charge-offs | | | (199 | ) | | (224 | ) | | (374 | ) | | (325 | ) | | (378 | ) |
|
|
|
|
|
|
|
|
|
|
|
| Balance, end of period | | $ | 2,798 | | | 2,847 | | | 2,951 | | | 2,986 | | | 2,995 | |
|
|
|
|
|
|
|
|
|
|
|
| as % of loans, net | | | 1.72 | % | | 1.81 | | | 1.86 | | | 1.84 | | | 1.83 | |
|
|
|
|
|
|
|
|
|
|
|
| as % of nonaccrual and restructured loans (a) | | | 177 | % | | 163 | | | 163 | | | 177 | | | 195 | |
|
|
|
|
|
|
|
|
|
|
|
| as % of nonperforming assets (a) | | | 161 | % | | 149 | | | 150 | | | 162 | | | 175 | |
|
|
|
|
|
|
|
|
|
|
|
LOAN LOSSES | | | | | | | | | | | | | | | | |
| Commercial, financial and agricultural | | $ | 136 | | | 160 | | | 319 | | | 275 | | | 333 | |
| Real estate—commercial construction and mortgage | | | 12 | | | 5 | | | 3 | | | 2 | | | 2 | |
| Real estate—residential mortgage | | | 1 | | | 3 | | | 1 | | | 4 | | | – | |
| Installment loans and vehicle leasing | | | 91 | | | 91 | | | 86 | | | 100 | | | 90 | |
|
|
|
|
|
|
|
|
|
|
|
| Total loan losses | | | 240 | | | 259 | | | 409 | | | 381 | | | 425 | |
|
|
|
|
|
|
|
|
|
|
|
LOAN RECOVERIES | | | | | | | | | | | | | | | | |
| Commercial, financial and agricultural | | | 24 | | | 17 | | | 16 | | | 36 | | | 30 | |
| Real estate—commercial construction and mortgage | | | – | | | – | | | 2 | | | – | | | 1 | |
| Real estate—residential mortgage | | | 1 | | | – | | | – | | | – | | | – | |
| Installment loans and vehicle leasing | | | 16 | | | 18 | | | 17 | | | 20 | | | 16 | |
|
|
|
|
|
|
|
|
|
|
|
| Total loan recoveries | | | 41 | | | 35 | | | 35 | | | 56 | | | 47 | |
|
|
|
|
|
|
|
|
|
|
|
| Net charge-offs | | $ | 199 | | | 224 | | | 374 | | | 325 | | | 378 | |
|
|
|
|
|
|
|
|
|
|
|
| Commercial loans net charge-offs as % of average commercial loans, net (b) | | | 0.53 | % | | 0.61 | | | 1.24 | | | 0.97 | | | 1.19 | |
| Consumer loans net charge-offs as % of average consumer loans, net (b) | | | 0.52 | | | 0.56 | | | 0.48 | | | 0.59 | | | 0.48 | |
| Total net charge-offs as % of average loans, net (b) | | | 0.52 | % | | 0.59 | | | 0.97 | | | 0.83 | | | 0.93 | |
|
|
|
|
|
|
|
|
|
|
|
NONPERFORMING ASSETS | | | | | | | | | | | | | | | | |
| Nonaccrual loans | | | | | | | | | | | | | | | | |
| Commercial, financial and agricultural | | $ | 1,269 | | | 1,440 | | | 1,456 | | | 1,371 | | | 1,294 | |
| Real estate—commercial construction and mortgage | | | 105 | | | 137 | | | 144 | | | 128 | | | 87 | |
| Real estate—residential mortgage | | | 79 | | | 62 | | | 60 | | | 58 | | | 60 | |
| Installment loans and vehicle leasing | | | 132 | | | 112 | | | 145 | | | 128 | | | 93 | |
|
|
|
|
|
|
|
|
|
|
|
| Total nonaccrual loans | | | 1,585 | | | 1,751 | | | 1,805 | | | 1,685 | | | 1,534 | |
| Foreclosed properties (c) | | | 150 | | | 156 | | | 156 | | | 159 | | | 179 | |
|
|
|
|
|
|
|
|
|
|
|
| Total nonperforming assets | | $ | 1,735 | | | 1,907 | | | 1,961 | | | 1,844 | | | 1,713 | |
|
|
|
|
|
|
|
|
|
|
|
| Nonperforming loans included in loans held for sale (d) | | $ | 138 | | | 115 | | | 108 | | | 213 | | | 228 | |
| Nonperforming assets included in loans and in loans held for sale | | $ | 1,873 | | | 2,022 | | | 2,069 | | | 2,057 | | | 1,941 | |
|
|
|
|
|
|
|
|
|
|
|
| as % of loans, net, and foreclosed properties (a) | | | 1.06 | % | | 1.21 | | | 1.23 | | | 1.14 | | | 1.04 | |
|
|
|
|
|
|
|
|
|
|
|
| as % of loans, net, foreclosed properties and loans in other assets as held for sale (d) | | | 1.11 | % | | 1.23 | | | 1.24 | | | 1.21 | | | 1.13 | |
|
|
|
|
|
|
|
|
|
|
|
| Accruing loans past due 90 days | | $ | 304 | | | 284 | | | 250 | | | 275 | | | 288 | |
|
|
|
|
|
|
|
|
|
|
|
(a) These ratios do not include nonperforming loans included in loans held for sale.
(b) Annualized.
(c) Restructured loans are insignificant.
(d) These ratios reflect nonperforming loans included in loans held for sale. Loans held for sale, which are included in other assets, are recorded at the lower of cost or market value, and accordingly, the amount shown and included in the ratios is net of the transferred allowance for loan losses and the lower of cost or market value adjustments.
11
WACHOVIA CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| | | 2002
| | | 2001
| |
(In millions, except per share data) | |
| Fourth
Quarter |
| | Third Quarter | | | Second Quarter | | | First Quarter | | | Fourth Quarter | |
|
|
|
|
|
|
|
|
|
|
|
ASSETS | | | | | | | | | | | | | | | | |
| Cash and due from banks | | $ | 12,264 | | | 11,930 | | | 10,668 | | | 10,038 | | | 13,917 | |
| Interest-bearing bank balances | | | 3,512 | | | 3,561 | | | 2,269 | | | 3,356 | | | 6,875 | |
| Federal funds sold and securities purchased under resale agreements | | | 9,160 | | | 7,132 | | | 11,541 | | | 13,154 | | | 13,919 | |
|
|
|
|
|
|
|
|
|
|
|
| Total cash and cash equivalents | | | 24,936 | | | 22,623 | | | 24,478 | | | 26,548 | | | 34,711 | |
|
|
|
|
|
|
|
|
|
|
|
| Trading account assets | | | 33,155 | | | 35,902 | | | 34,570 | | | 28,227 | | | 25,386 | |
| Securities | | | 75,804 | | | 72,071 | | | 60,999 | | | 57,382 | | | 58,467 | |
| Loans, net of unearned income | | | 163,097 | | | 157,542 | | | 158,800 | | | 162,294 | | | 163,801 | |
| Allowance for loan losses | | | (2,798 | ) | | (2,847 | ) | | (2,951 | ) | | (2,986 | ) | | (2,995 | ) |
|
|
|
|
|
|
|
|
|
|
|
| Loans, net | | | 160,299 | | | 154,695 | | | 155,849 | | | 159,308 | | | 160,806 | |
|
|
|
|
|
|
|
|
|
|
|
| Premises and equipment | | | 4,903 | | | 5,422 | | | 5,494 | | | 5,596 | | | 5,719 | |
| Due from customers on acceptances | | | 1,051 | | | 1,080 | | | 1,105 | | | 888 | | | 745 | |
| Goodwill | | | 10,880 | | | 10,810 | | | 10,728 | | | 10,728 | | | 10,616 | |
| Intangible assets | | | 1,554 | | | 1,675 | | | 1,827 | | | 1,988 | | | 2,156 | |
| Other assets | | | 29,257 | | | 29,602 | | | 29,629 | | | 29,188 | | | 31,846 | |
|
|
|
|
|
|
|
|
|
|
|
| Total assets | | $ | 341,839 | | | 333,880 | | | 324,679 | | | 319,853 | | | 330,452 | |
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | | | | | | | | | |
| Deposits | | | | | | | | | | | | | | | | |
| Noninterest-bearing deposits | | | 44,640 | | | 44,186 | | | 39,558 | | | 39,323 | | | 43,464 | |
| Interest-bearing deposits | | | 146,878 | | | 143,599 | | | 141,105 | | | 140,710 | | | 143,989 | |
|
|
|
|
|
|
|
|
|
|
|
| Total deposits | | | 191,518 | | | 187,785 | | | 180,663 | | | 180,033 | | | 187,453 | |
| Short-term borrowings | | | 47,093 | | | 41,146 | | | 46,109 | | | 46,559 | | | 44,385 | |
| Bank acceptances outstanding | | | 1,061 | | | 1,093 | | | 1,110 | | | 892 | | | 762 | |
| Trading account liabilities | | | 16,983 | | | 17,760 | | | 14,108 | | | 10,261 | | | 11,437 | |
| Other liabilities | | | 13,444 | | | 14,233 | | | 14,379 | | | 13,387 | | | 16,227 | |
| Long-term debt | | | 39,662 | | | 39,758 | | | 37,931 | | | 39,936 | | | 41,733 | |
|
|
|
|
|
|
|
|
|
|
|
| Total liabilities | | | 309,761 | | | 301,775 | | | 294,300 | | | 291,068 | | | 301,997 | |
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY | | | | | | | | | | | | | | | | |
| Dividend Equalization Preferred shares, no par value, 97 million shares issued and outstanding at December 31, 2002 | | | — | | | 2 | | | 5 | | | 11 | | | 17 | |
Common stock, $3.33 1/3 par value; authorized 3 billion shares, outstanding 1.357 billion shares at December 31, 2002 | | | 4,524 | | | 4,577 | | | 4,570 | | | 4,559 | | | 4,539 | |
| Paid-in capital | | | 18,070 | | | 18,233 | | | 18,106 | | | 17,989 | | | 17,911 | |
| Retained earnings | | | 7,349 | | | 7,221 | | | 6,663 | | | 6,136 | | | 5,551 | |
| Accumulated other comprehensive income, net | | | 2,135 | | | 2,072 | | | 1,035 | | | 90 | | | 437 | |
|
|
|
|
|
|
|
|
|
|
|
| Total stockholders' equity | | | 32,078 | | | 32,105 | | | 30,379 | | | 28,785 | | | 28,455 | |
|
|
|
|
|
|
|
|
|
|
|
| Total liabilities and stockholders' equity | | $ | 341,839 | | | 333,880 | | | 324,679 | | | 319,853 | | | 330,452 | |
|
|
|
|
|
|
|
|
|
|
|
12
WACHOVIA CORPORATION AND SUBSIDIARIES
NET INTEREST INCOME SUMMARIES (a)
(Unaudited)
| | | FOURTH QUARTER 2002
| | | THIRD QUARTER 2002
| |
(In millions) | | Average Balances | | Interest Income/ Expense | | Average Rates Earned/ Paid | | | Average Balances | | Interest Income/ Expense | | Average Rates Earned/ Paid | |
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS | | | | | | | | | | | | | | | | | | |
| Interest-bearing bank balances | | $ | 3,416 | | | 14 | | 1.59 | % | | $ | 2,891 | | | 14 | | 1.90 | % |
| Federal funds sold and securities purchased under resale agreements | | | 9,507 | | | 74 | | 3.08 | | | | 10,474 | | | 82 | | 3.11 | |
| Trading account assets | | | 14,683 | | | 178 | | 4.83 | | | | 14,945 | | | 194 | | 5.17 | |
| Securities | | | 71,355 | | | 1,004 | | 5.63 | | | | 62,917 | | | 961 | | 6.11 | |
| Loans | | | | | | | | | | | | | | | | | | |
| Commercial | | | | | | | | | | | | | | | | | | |
| Commercial, financial and agricultural | | | 57,108 | | | 1,072 | | 7.45 | | | | 57,571 | | | 1,068 | | 7.36 | |
| Real estate – construction and other | | | 7,133 | | | 68 | | 3.80 | | | | 7,809 | | | 81 | | 4.10 | |
| Real estate – mortgage | | | 16,770 | | | 214 | | 5.06 | | | | 17,188 | | | 228 | | 5.26 | |
| Lease financing | | | 7,112 | | | 187 | | 10.53 | | | | 7,105 | | | 189 | | 10.65 | |
| Foreign | | | 6,731 | | | 58 | | 3.43 | | | | 6,879 | | | 59 | | 3.41 | |
|
|
|
|
| | |
|
|
|
| | |
| Total commercial | | | 94,854 | | | 1,599 | | 6.70 | | | | 96,552 | | | 1,625 | | 6.68 | |
|
|
|
|
| | |
|
|
|
| | |
| Consumer | | | | | | | | | | | | | | | | | | |
| Real estate – mortgage | | | 19,295 | | | 296 | | 6.12 | | | | 18,970 | | | 294 | | 6.20 | |
| Installment loans and vehicle leasing | | | 38,887 | | | 656 | | 6.71 | | | | 36,154 | | | 652 | | 7.17 | |
|
|
|
|
| | |
|
|
|
| | |
| Total consumer | | | 58,182 | | | 952 | | 6.51 | | | | 55,124 | | | 946 | | 6.84 | |
|
|
|
|
| | |
|
|
|
| | |
| Total loans | | | 153,036 | | | 2,551 | | 6.63 | | | | 151,676 | | | 2,571 | | 6.74 | |
|
|
|
|
| | |
|
|
|
| | |
| Other earning assets | | | 8,971 | | | 115 | | 5.11 | | | | 11,770 | | | 144 | | 4.86 | |
|
|
|
|
| | |
|
|
|
| | |
| Total earning assets | | | 260,968 | | | 3,936 | | 6.01 | | | | 254,673 | | | 3,966 | | 6.20 | |
| | | |
|
|
|
| | |
|
|
|
|
| Cash and due from banks | | | 10,636 | | | | | | | | | 9,955 | | | | | | |
| Other assets | | | 58,356 | | | | | | | | | 56,883 | | | | | | |
|
|
| | | | |
|
| | | | |
| Total assets | | $ | 329,960 | | | | | | | | $ | 321,511 | | | | | | |
|
|
| | | | |
|
| | | | |
LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | | | | | | | | | | | |
| Interest-bearing deposits | | | | | | | | | | | | | | | | | | |
| Savings and NOW accounts | | | 50,031 | | | 171 | | 1.35 | | | | 49,156 | | | 199 | | 1.61 | |
| Money market accounts | | | 45,618 | | | 252 | | 2.19 | | | | 43,495 | | | 239 | | 2.18 | |
| Other consumer time | | | 34,833 | | | 331 | | 3.78 | | | | 36,029 | | | 347 | | 3.82 | |
| Foreign | | | 8,030 | | | 33 | | 1.59 | | | | 6,491 | | | 30 | | 1.84 | |
| Other time | | | 8,674 | | | 45 | | 2.06 | | | | 6,134 | | | 32 | | 2.07 | |
|
|
|
|
| | |
|
|
|
| | |
| Total interest-bearing deposits | | | 147,186 | | | 832 | | 2.24 | | | | 141,305 | | | 847 | | 2.38 | |
| Federal funds purchased and securities sold under repurchase agreements | | | 32,404 | | | 238 | | 2.92 | | | | 31,884 | | | 241 | | 3.00 | |
| Commercial paper | | | 2,794 | | | 6 | | 0.79 | | | | 2,999 | | | 9 | | 1.18 | |
| Other short-term borrowings | | | 9,525 | | | 51 | | 2.16 | | | | 9,505 | | | 60 | | 2.49 | |
| Long-term debt | | | 40,115 | | | 280 | | 2.79 | | | | 38,477 | | | 289 | | 3.00 | |
|
|
|
|
| | |
|
|
|
| | |
| Total interest-bearing liabilities | | | 232,024 | | | 1,407 | | 2.41 | | | | 224,170 | | | 1,446 | | 2.56 | |
| | | |
|
|
|
| | |
|
|
|
|
| Noninterest-bearing deposits | | | 40,518 | | | | | | | | | 38,772 | | | | | | |
| Other liabilities | | | 25,472 | | | | | | | | | 27,466 | | | | | | |
| Stockholders' equity | | | 31,946 | | | | | | | | | 31,103 | | | | | | |
|
|
| | | | |
|
| | | | |
| Total liabilities and stockholders' equity | | $ | 329,960 | | | | | | | | $ | 321,511 | | | | | | |
|
|
| | | | |
|
| | | | |
| Interest income and rate earned | | | | | $ | 3,936 | | 6.01 | % | | | | | $ | 3,966 | | 6.20 | % |
| Interest expense and equivalent rate paid | | | | | | 1,407 | | 2.15 | | | | | | | 1,446 | | 2.25 | |
|
|
|
|
|
|
| | |
|
|
|
|
| Net interest income and margin (b) | | | | | $ | 2,529 | | 3.86 | % | | | | | $ | 2,520 | | 3.95 | % |
|
|
|
|
|
|
| | |
|
|
|
|
(a) Certain amounts presented in periods prior to the fourth quarter of 2002 have been reclassified to conform to the presentation in the fourth quarter of 2002.
(b) The net interest margin includes (in basis points): 42, 38, 39, 47 and 27 in the fourth, third, second and first quarters of 2002 and in the fourth quarter of 2001, respectively, in net interest income from hedge-related derivative transactions.
13
WACHOVIA CORPORATION AND SUBSIDIARIES
NET INTEREST INCOME SUMMARIES (a)
(Unaudited)
SECOND QUARTER 2002
| | | FIRST QUARTER 2002
| | | FOURTH QUARTER 2001
| |
| | | | | Average | | | | | | | Average | | | | | | | Average | |
| | | Interest | | Rates | | | | | Interest | | Rates | | | | | Interest | | Rates | |
Average | | Income/ | | Earned/ | | | Average | | Income/ | | Earned/ | | | Average | | Income/ | | Earned/ | |
Balances | | Expense | | Paid | | | Balances | | Expense | | Paid | | | Balances | | Expense | | Paid | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 2,613 | | | 13 | | 2.02 | % | | $ | 4,341 | | | 22 | | 2.07 | % | | $ | 3,333 | | | 21 | | 2.50 | % |
| | 10,835 | | | 85 | | 3.18 | | | | 12,020 | | | 93 | | 3.13 | | | | 11,784 | | | 99 | | 3.32 | |
| | 15,503 | | | 186 | | 4.79 | | | | 13,954 | | | 165 | | 4.77 | | | | 12,245 | | | 175 | | 5.71 | |
| | 58,282 | | | 933 | | 6.40 | | | | 56,287 | | | 884 | | 6.29 | | | | 55,708 | | | 905 | | 6.49 | |
| | 58,534 | | | 1,027 | | 7.03 | | | | 59,927 | | | 1,049 | | 7.10 | | | | 62,220 | | | 1,202 | | 7.67 | |
| | 8,115 | | | 84 | | 4.19 | | | | 8,126 | | | 86 | | 4.28 | | | | 7,919 | | | 101 | | 5.02 | |
| | 17,310 | | | 231 | | 5.36 | | | | 17,163 | | | 238 | | 5.61 | | | | 17,139 | | | 263 | | 6.10 | |
| | 7,286 | | | 193 | | 10.60 | | | | 7,442 | | | 193 | | 10.37 | | | | 7,578 | | | 199 | | 10.51 | |
| | 7,058 | | | 60 | | 3.37 | | | | 6,831 | | | 62 | | 3.71 | | | | 7,374 | | | 81 | | 4.34 | |
|
|
| | |
|
|
|
| | |
|
|
|
| | |
| | 98,303 | | | 1,595 | | 6.50 | | | | 99,489 | | | 1,628 | | 6.62 | | | | 102,230 | | | 1,846 | | 7.17 | |
|
|
| | |
|
|
|
| | |
|
|
|
| | |
| | 20,104 | | | 318 | | 6.34 | | | | 21,444 | | | 354 | | 6.60 | | | | 24,032 | | | 414 | | 6.90 | |
| | 36,678 | | | 664 | | 7.25 | | | | 36,131 | | | 668 | | 7.49 | | | | 36,577 | | | 724 | | 7.87 | |
|
|
| | |
|
|
|
| | |
|
|
|
| | |
| | 56,782 | | | 982 | | 6.93 | | | | 57,575 | | | 1,022 | | 7.16 | | | | 60,609 | | | 1,138 | | 7.49 | |
|
|
| | |
|
|
|
| | |
|
|
|
| | |
| | 155,085 | | | 2,577 | | 6.66 | | | | 157,064 | | | 2,650 | | 6.82 | | | | 162,839 | | | 2,984 | | 7.29 | |
|
|
| | |
|
|
|
| | |
|
|
|
| | |
| | 11,361 | | | 154 | | 5.42 | | | | 11,073 | | | 140 | | 5.13 | | | | 11,668 | | | 179 | | 6.11 | |
|
|
| | |
|
|
|
| | |
|
|
|
| | |
| | 253,679 | | | 3,948 | | 6.23 | | | | 254,739 | | | 3,954 | | 6.26 | | | | 257,577 | | | 4,363 | | 6.74 | |
| |
|
|
|
| | |
|
|
|
| | |
|
|
|
|
| | 10,110 | | | | | | | | | 10,553 | | | | | | | | | 10,313 | | | | | | |
| | 50,925 | | | | | | | | | 50,030 | | | | | | | | | 51,331 | | | | | | |
| | | | |
|
| | | | |
|
| | | | |
| $ | 314,714 | | | | | | | | $ | 315,322 | | | | | | | | $ | 319,221 | | | | | | |
| | | | |
|
| | | | |
|
| | | | |
| | 49,341 | | | 183 | | 1.49 | | | | 48,931 | | | 175 | | 1.45 | | | | 47,527 | | | 222 | | 1.85 | |
| | 40,035 | | | 224 | | 2.25 | | | | 37,589 | | | 265 | | 2.86 | | | | 35,023 | | | 282 | | 3.19 | |
| | 36,956 | | | 365 | | 3.96 | | | | 38,166 | | | 399 | | 4.24 | | | | 40,931 | | | 484 | | 4.70 | |
| | 7,195 | | | 33 | | 1.88 | | | | 7,578 | | | 35 | | 1.85 | | | | 8,603 | | | 56 | | 2.58 | |
| | 6,220 | | | 31 | | 1.93 | | | | 8,119 | | | 41 | | 2.09 | | | | 10,325 | | | 72 | | 2.73 | |
|
|
| | |
|
|
|
| | |
|
|
|
| | |
| | 139,747 | | | 836 | | 2.40 | | | | 140,383 | | | 915 | | 2.64 | | | | 142,409 | | | 1,116 | | 3.11 | |
| | 31,894 | | | 229 | | 2.88 | | | | 31,940 | | | 211 | | 2.68 | | | | 33,028 | | | 298 | | 3.59 | |
| | 3,025 | | | 8 | | 1.17 | | | | 3,435 | | | 10 | | 1.15 | | | | 3,709 | | | 29 | | 3.07 | |
| | 10,039 | | | 63 | | 2.51 | | | | 10,550 | | | 65 | | 2.51 | | | | 9,617 | | | 45 | | 1.86 | |
| | 39,107 | | | 297 | | 3.04 | | | | 41,057 | | | 276 | | 2.69 | | | | 42,979 | | | 391 | | 3.64 | |
|
|
| | |
|
|
|
| | |
|
|
|
| | |
| | 223,812 | | | 1,433 | | 2.57 | | | | 227,365 | | | 1,477 | | 2.63 | | | | 231,742 | | | 1,879 | | 3.22 | |
| |
|
|
|
| | |
|
|
|
| | |
|
|
|
|
| | 38,449 | | | | | | | | | 38,126 | | | | | | | | | 37,562 | | | | | | |
| | 22,877 | | | | | | | | | 20,928 | | | | | | | | | 21,377 | | | | | | |
| | 29,576 | | | | | | | | | 28,903 | | | | | | | | | 28,540 | | | | | | |
| | | | |
|
| | | | |
|
| | | | |
| $ | 314,714 | | | | | | | | $ | 315,322 | | | | | | | | $ | 319,221 | | | | | | |
| | | | |
|
| | | | |
|
| | | | |
| | | | $ | 3,948 | | 6.23 | % | | | | | $ | 3,954 | | 6.26 | % | | | | | $ | 4,363 | | 6.74 | % |
| | | | | 1,433 | | 2.26 | | | | | | | 1,477 | | 2.35 | | | | | | | 1,879 | | 2.89 | |
| |
|
|
|
| | |
|
|
|
| | |
|
|
|
|
| | | | $ | 2,515 | | 3.97 | % | | | | | $ | 2,477 | | 3.91 | % | | | | | $ | 2,484 | | 3.85 | % |
| |
|
|
|
| | |
|
|
|
| | |
|
|
|
|
14
WACHOVIA CORPORATION AND SUBSIDIARIES
NET INTEREST INCOME SUMMARIES (a)
(Unaudited)
| | | YEAR ENDED 2002
| | | YEAR ENDED 2001
| |
(In millions) | | Average Balances | | Interest Income/ Expense | | Average Rates Earned/ Paid | | | Average Balances | | Interest Income/ Expense | | Average Rates Earned/ Paid | |
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS | | | | | | | | | | | | | | | | | | |
| Interest-bearing bank balances | | $ | 3,312 | | | 63 | | 1.90 | % | | $ | 2,359 | | | 92 | | 3.92 | % |
| Federal funds sold and securities purchased under resale agreements | | | 10,702 | | | 334 | | 3.13 | | | | 9,458 | | | 400 | | 4.23 | |
| Trading account assets | | | 14,774 | | | 723 | | 4.89 | | | | 12,965 | | | 782 | | 6.03 | |
| Securities | | | 62,253 | | | 3,782 | | 6.08 | | | | 51,681 | | | 3,626 | | 7.02 | |
| Loans | | | | | | | | | | | | | | | | | | |
| Commercial | | | | | | | | | | | | | | | | | | |
| Commercial, financial and agricultural | | | 58,275 | | | 4,216 | | 7.23 | | | | 56,094 | | | 4,572 | | 8.15 | |
| Real estate—construction and other | | | 7,793 | | | 319 | | 4.10 | | | | 4,726 | | | 281 | | 5.95 | |
| Real estate—mortgage | | | 17,107 | | | 911 | | 5.33 | | | | 11,466 | | | 776 | | 6.77 | |
| Lease financing | | | 7,235 | | | 762 | | 10.54 | | | | 6,548 | | | 685 | | 10.46 | |
| Foreign | | | 6,875 | | | 239 | | 3.48 | | | | 6,109 | | | 339 | | 5.55 | |
|
|
|
|
| | |
|
|
|
| | |
| Total commercial | | | 97,285 | | | 6,447 | | 6.63 | | | | 84,943 | | | 6,653 | | 7.83 | |
|
|
|
|
| | |
|
|
|
| | |
| Consumer | | | | | | | | | | | | | | | | | | |
| Real estate—mortgage | | | 19,945 | | | 1,262 | | 6.33 | | | | 19,741 | | | 1,416 | | 7.17 | |
| Installment loans and vehicle leasing | | | 36,967 | | | 2,640 | | 7.14 | | | | 29,164 | | | 2,513 | | 8.61 | |
|
|
|
|
| | |
|
|
|
| | |
| Total consumer | | | 56,912 | | | 3,902 | | 6.86 | | | | 48,905 | | | 3,929 | | 8.03 | |
|
|
|
|
| | |
|
|
|
| | |
| Total loans | | | 154,197 | | | 10,349 | | 6.71 | | | | 133,848 | | | 10,582 | | 7.91 | |
|
|
|
|
| | |
|
|
|
| | |
| Other earning assets | | | 10,790 | | | 553 | | 5.12 | | | | 10,683 | | | 777 | | 7.28 | |
|
|
|
|
| | |
|
|
|
| | |
| Total earning assets | | | 256,028 | | | 15,804 | | 6.17 | | | | 220,994 | | | 16,259 | | 7.36 | |
| | | |
|
|
|
| | |
|
|
|
|
| Cash and due from banks | | | 10,313 | | | | | | | | | 8,784 | | | | | | |
| Other assets | | | 54,079 | | | | | | | | | 40,525 | | | | | | |
|
|
| | | | |
|
| | | | |
| Total assets | | $ | 320,420 | | | | | | | | $ | 270,303 | | | | | | |
|
|
| | | | |
|
| | | | |
LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | | | | | | | | | | | |
| Interest-bearing deposits | | | | | | | | | | | | | | | | | | |
| Savings and NOW accounts | | | 49,367 | | | 728 | | 1.47 | | | | 41,979 | | | 1,012 | | 2.41 | |
| Money market accounts | | | 41,711 | | | 980 | | 2.35 | | | | 23,461 | | | 944 | | 4.02 | |
| Other consumer time | | | 36,486 | | | 1,442 | | 3.95 | | | | 36,037 | | | 1,941 | | 5.39 | |
| Foreign | | | 7,323 | | | 131 | | 1.78 | | | | 7,318 | | | 294 | | 4.01 | |
| Other time | | | 7,285 | | | 149 | | 2.04 | | | | 11,916 | | | 553 | | 4.64 | |
|
|
|
|
| | |
|
|
|
| | |
| Total interest-bearing deposits | | | 142,172 | | | 3,430 | | 2.41 | | | | 120,711 | | | 4,744 | | 3.93 | |
Federal funds purchased and securities
sold under repurchase agreements | | | 32,031 | | | 919 | | 2.87 | | | | 28,055 | | | 1,364 | | 4.86 | |
| Commercial paper | | | 3,061 | | | 33 | | 1.08 | | | | 2,912 | | | 112 | | 3.84 | |
| Other short-term borrowings | | | 9,901 | | | 239 | | 2.42 | | | | 9,719 | | | 260 | | 2.68 | |
| Long-term debt | | | 39,683 | | | 1,142 | | 2.88 | | | | 38,538 | | | 1,845 | | 4.79 | |
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| Total interest-bearing liabilities | | | 226,848 | | | 5,763 | | 2.54 | | | | 199,935 | | | 8,325 | | 4.16 | |
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| Noninterest-bearing deposits | | | 38,972 | | | | | | | | | 30,796 | | | | | | |
| Other liabilities | | | 24,208 | | | | | | | | | 19,351 | | | | | | |
| Stockholders' equity | | | 30,392 | | | | | | | | | 20,221 | | | | | | |
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| Total liabilities and stockholders' equity | | $ | 320,420 | | | | | | | | $ | 270,303 | | | | | | |
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| Interest income and rate earned | | | | | $ | 15,804 | | 6.17 | % | | | | | $ | 16,259 | | 7.36 | % |
| Interest expense and equivalent rate paid | | | | | | 5,763 | | 2.25 | | | | | | | 8,325 | | 3.77 | |
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| Net interest income and margin (b) | | | | | $ | 10,041 | | 3.92 | % | | | | | $ | 7,934 | | 3.59 | % |
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(a) Certain amounts presented in 2001 have been reclassified to conform to the presentation in 2002.
(b) The net interest margin includes(in basis points) : 41 and 18 for the years ended 2002 and 2001, respectively, in net interest income from hedge-related derivative transactions.
15
