Exhibit 99(b)
|
 | Press Release July 17, 2003 | |
| WACHOVIA EARNS RECORD $1.0 BILLION; 2ND QUARTER EPS UP 24% TO 77 CENTS | ||
| Strong Performance Results In 3rd Dividend Increase in 11 Months | ||
2nd QUARTER 2003 COMPARED WITH 2nd QUARTER 2002
| • | Quarterly dividend increased 21 percent to 35 cents per common share; increased 46 percent since second quarter 2002. |
| • | Total revenue rose 3 percent due to growth in both net interest income and fee income. Growth in fee income was led by record results in retail banking and improved brokerage volume, along with strenghtened trading and other corporate and investment banking income. |
| • | Credit quality continued to improve. Provision expense declined more than 50 percent and total nonperforming assets declined 13 percent. |
| • | Average low-cost core deposits increased 19 percent. |
| • | Wachovia merger conversions nearing completion, with Carolinas branch and deposit conversion successfully completed. Virginia conversion this month. |
Earnings Highlights
| Three Months Ended | ||||||||
(In millions, except per share data) | June 30, 2003 | March 31, 2003 | June 30, 2002 | |||||
Earnings | ||||||||
Net income available to common stockholders | $ | 1,031 | 1,023 | 849 | ||||
Diluted earnings per common share(a) | $ | 0.77 | 0.76 | 0.62 | ||||
Financial ratios | ||||||||
Return on average common stockholders’ equity | 12.78 | % | 12.94 | 11.52 | ||||
Net interest margin | 3.78 | 3.86 | 3.97 | |||||
Fee and other income as % of total revenue | 45.60 | % | 44.64 | 45.63 | ||||
Capital adequacy(b) | ||||||||
Tier 1 capital ratio | 8.35 | % | 8.27 | 7.83 | ||||
Total capital ratio | 11.94 | 11.99 | 11.89 | |||||
Leverage ratio | 6.78 | % | 6.71 | 6.75 | ||||
Asset quality | ||||||||
Allowance as % of nonaccrual and restructured loans | 180 | % | 169 | 163 | ||||
Allowance as % of loans, net | 1.66 | 1.67 | 1.86 | |||||
Net charge-offs as % of average loans, net | 0.43 | 0.49 | 0.97 | |||||
Nonperforming assets as % of loans, net, foreclosed properties and loans held for sale | 1.04 | % | 1.08 | 1.24 | ||||
| (a) | Reported diluted earnings per common share included $0.04 per share, $0.03 per share and $0.06 per share of merger-related and restructuring expenses in the second quarter of 2003, the first quarter of 2003 and the second quarter of 2002, respectively. |
| (b) | The second quarter of 2003 is based on estimates. |
CHARLOTTE, N.C. —Wachovia Corp. (NYSE:WB) today reported second quarter 2003 net income available to common stockholders of $1.0 billion, or 77 cents per share, compared with $849 million, or 62 cents per share, in the second quarter of 2002. Earnings in the second quarter of 2003 included after-tax net merger-related and restructuring expenses of $60 million, or 4 cents per share. In the second quarter of 2002, earnings included $89 million, or 6 cents per share, of after-tax net merger-related and restructuring expenses.
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WACHOVIA REPORTS RECORD QUARTERLY EARNINGS/Page 2
“Our second quarter performance this year was outstanding and in fact we exceeded expectations for the quarter. We are increasingly optimistic about our earnings prospects due to growing revenue momentum and improved credit quality,” said Ken Thompson, chairman and CEO. “ The potential of our balanced business model was clear in the recovery in our brokerage and capital markets businesses as the economy slowly improves. Our distribution strength was evident in record sales of consumer and small business loans, mutual funds, checking accounts and low-cost core deposits. On top of that, a continued strong showing in customer service, solid expense control and further merger savings ahead position us well for the future. In addition, we support the recent change in the tax law and are pleased to share the benefits of our improving performance by increasing our common stock dividend for the third time in 11 months.”
Wachovia Corporation
| Three Months Ended | |||||||
(In millions) | June 30, 2003 | March 31, 2003 | June 30, 2002 | ||||
Total revenue (Tax-equivalent) | $ | 4,749 | 4,656 | 4,625 | |||
Provision for loan losses | 195 | 224 | 397 | ||||
Noninterest expense | 3,004 | 2,903 | 2,926 | ||||
Net income available to common stockholders | 1,031 | 1,023 | 849 | ||||
Average loans, net | 157,735 | 157,964 | 155,348 | ||||
Average core deposits | $ | 179,417 | 172,988 | 164,510 | |||
Average loans in the second quarter of 2003 were $158 billion, a 2 percent increase from the second quarter of 2002, reflecting higher residential mortgage and other consumer installment loan balances, dampened by continued lower corporate loan demand. Average core deposits increased 9 percent from the second quarter of 2002 to $179 billion, while average low-cost core deposits increased 19 percent from the second quarter a year ago to $137 billion.
Second quarter 2003 net charge-offs declined 55 percent from the second quarter of 2002 to $169 million, or an annualized 0.43 percent of average net loans. Total nonperforming assets including loans held for sale declined 13 percent from the second quarter of 2002 to $1.8 billion in the second quarter of 2003.
Lines of Business
The following discussion covers the results for Wachovia’s four core business segments and is on a segment earnings basis, which excludes net merger-related and restructuring expenses and other intangible amortization. Segment earnings are the basis upon which Wachovia manages and allocates capital to its business segments. Pages 10 and 11 include a reconciliation of segment results to Wachovia’s consolidated net income in accordance with GAAP.
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WACHOVIA REPORTS RECORD QUARTERLY EARNINGS/Page 3
General Bank Highlights
| Three Months Ended | |||||||
(In millions) | June 30, 2003 | March 31, 2003 | June 30, 2002 | ||||
Total revenue (Tax-equivalent) | $ | 2,438 | 2,349 | 2,270 | |||
Provision for loan losses | 99 | 105 | 98 | ||||
Noninterest expense | 1,324 | 1,297 | 1,252 | ||||
Segment earnings | 644 | 602 | 583 | ||||
Average loans, net | 113,055 | 110,882 | 100,861 | ||||
Average core deposits | 151,166 | 145,496 | 139,650 | ||||
Economic capital, average | $ | 5,670 | 5,571 | 5,738 | |||
General Bank
The General Bank includes retail, small business and commercial customers. General Bank revenue increased 7 percent from the second quarter a year ago, driven by a 5 percent increase in net interest income and 14 percent growth in fee income due to strong balance sheet growth and continued strength in mortgage income. Average core deposit growth continued to be strong, up 8 percent from the second quarter of the prior year. Most significantly, average low-cost core deposits continued to grow rapidly, up 20 percent from the second quarter of 2002. Loans increased 12 percent year over year, reflecting strength in consumer and small business lending. Credit quality continued to be strong, with a modest decline in net charge-offs and a stable provision. The 6 percent increase in expenses from the second quarter of 2002 reflected technology enhancements in the financial centers as well as higher staffing. Retail sales momentum was evident, with strength in net new checking accounts, a fivefold increase from the second quarter of 2002 to 93,500.
Capital Management Highlights
| Three Months Ended | |||||||
(In millions) | June 30, 2003 | March 31, 2003 | June 30, 2002 | ||||
Total revenue (Tax-equivalent) | $ | 821 | 754 | 809 | |||
Provision for loan losses | — | — | — | ||||
Noninterest expense | 662 | 625 | 657 | ||||
Segment earnings | 100 | 83 | 97 | ||||
Average loans, net | 140 | 134 | 186 | ||||
Average core deposits | 1,338 | 1,367 | 1,269 | ||||
Economic capital, average | $ | 710 | 678 | 710 | |||
Capital Management
Capital Management includes asset management and retail brokerage services. Capital Management’s performance was its best in the past two years of unsettled equity market conditions. Second quarter 2003 revenue rose modestly from the second quarter of 2002 due primarily to growth in assets under management. Sales of fixed income products, including mutual funds and annuities, continued to be strong. The strength of Capital Management’s multi-channel distribution model was evidenced by record sales of Evergreen Fund products through both third party broker-dealers as well as our Wachovia Securities brokerage unit. Total annuity sales increased 2 percent to $1.5 billion, including bank annuity sales of $1.1 billion, which represented a 21 percent increase from the second quarter of 2002. Assets under management at June 30, 2003, increased 4 percent from June 30, 2002, to $240 billion, including a 6 percent increase in mutual fund assets to $115 billion at June 30, 2003. Brokerage client assets increased 4 percent from June 30, 2002, to $282 billion. The Wachovia Securities, LLC, and Prudential Securities, Inc. brokerage combination transaction closed on July 1, 2003. Therefore, second quarter results do not reflect this transaction.
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WACHOVIA REPORTS RECORD QUARTERLY EARNINGS/Page 4
Wealth Management Highlights
| Three Months Ended | |||||||
(In millions) | June 30, 2003 | March 31, 2003 | June 30, 2002 | ||||
Total revenue (Tax-equivalent) | $ | 239 | 237 | 239 | |||
Provision for loan losses | 5 | 4 | 7 | ||||
Noninterest expense | 175 | 170 | 164 | ||||
Segment earnings | 37 | 40 | 43 | ||||
Average loans, net | 9,558 | 9,339 | 8,632 | ||||
Average core deposits | 10,817 | 10,662 | 9,879 | ||||
Economic capital, average | $ | 384 | 373 | 360 | |||
Wealth Management
Wealth Management includes private banking, personal trust, investment advisory services, charitable services, financial planning and insurance brokerage. Revenue was the same as the second quarter of 2002, as higher net interest income and increased insurance commissions related to the Cameron M. Harris & Co. acquisition were offset by a decline in investment management fees related to lower equity valuations. Net interest income rose 6 percent from the second quarter of 2002 due to increased loan and deposit balances. Average loans grew 11 percent from the second quarter a year ago, while average core deposits, led by money market and checking account balances, rose 9 percent from the second quarter of 2002. Expenses increased 7 percent year over year largely due to the Cameron M. Harris & Co. acquisition completed in the third quarter of 2002, and to higher benefit costs.
Corporate and Investment Bank Highlights
| Three Months Ended | |||||||
(In millions) | June 30, 2003 | March 31, 2003 | June 30, 2002 | ||||
Total revenue (Tax-equivalent) | $ | 1,100 | 1,110 | 1,054 | |||
Provision for loan losses | 95 | 110 | 293 | ||||
Noninterest expense | 567 | 557 | 517 | ||||
Segment earnings | 275 | 279 | 152 | ||||
Average loans, net | 34,608 | 36,104 | 41,580 | ||||
Average core deposits | 14,815 | 14,120 | 12,207 | ||||
Economic capital, average | $ | 6,042 | 6,343 | 7,277 | |||
Corporate and Investment Bank
The Corporate and Investment Bank includes corporate lending, investment banking, treasury services and trade finance, and principal investing. Corporate and Investment Bank revenue grew 4 percent from the second quarter of 2002, driven by strong results in fixed income products that more than offset a decline in interest income due to lower loan balances in corporate lending. Provision expense declined by two-thirds from the second quarter of 2002 due to improved credit quality related to risk reduction strategies. The increase in expense was primarily related to revenue-related incentives and strategic initiative spending. Average loans declined due to weak overall demand, while average core deposits increased primarily due to growth in commercial mortgage servicing and international trade finance.
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WACHOVIA REPORTS RECORD QUARTERLY EARNINGS/Page 5
Wachovia Corporation (NYSE:WB) is one of the largest providers of financial services to retail, brokerage and corporate customers throughout the East Coast and the nation, with assets of $364 billion and stockholders’ equity of $32 billion at June 30, 2003. Its four core businesses, the General Bank, Capital Management, Wealth Management and the Corporate and Investment Bank, serve 9 million households, including 900,000 businesses, primarily in 11 East Coast states and Washington, D.C. Its broker-dealer, currently operating under the names Wachovia Securities, LLC, and Prudential Securities Division of Wachovia Securities, LLC, serves clients through 700 offices in 48 states. Global services are provided through more than 30 international offices. Online banking and brokerage products and services also are available through wachovia.com.
This news release contains 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 July 17, 2003.
Explanation of Wachovia’s Use of Certain Non-GAAP Financial Measures
In addition to results presented in accordance with GAAP, this news release includes the following non-GAAP financial measures presented on Page 7 under the captions “Earnings Excluding Merger-Related and Restructuring Expenses” and “Earnings Excluding Merger-Related and Restructuring Expenses and Other Intangible Amortization”: Return on average common stockholders’ equity, return on average assets, overhead efficiency ratio, operating leverage and dividend payout ratio on common shares. Each of these items on Page 7 has been adjusted to exclude merger-related and restructuring expenses and other intangible amortization, as noted. Included in the footnotes on Page 7 to these non-GAAP measures are the dollar amounts of these adjustments reconciling to the most directly comparable financial measures on a GAAP basis included on Page 6. In addition, in this news release certain designated net interest income amounts are presented on a tax-equivalent basis, including the calculation of the overhead efficiency ratio.
Wachovia believes these non-GAAP financial measures provide information useful to investors in understanding the underlying operational performance of the company, its business and performance trends and facilitates comparisons with the performance of others in the financial services industry. Specifically, Wachovia believes that the exclusion of merger-related and restructuring expenses permits evaluation and a comparison of results for on-going business operations, and it is on this basis that Wachovia’s management internally assesses the company’s performance. Those non-operating items are excluded from Wachovia’s segment measures used internally to evaluate segment performance in accordance with GAAP because management does not consider them particularly relevant or useful in evaluating the operating performance of our business segments. In addition, because of the significant amount of deposit base intangible amortization, Wachovia believes that the exclusion of this expense provides investors with consistent and meaningful comparisons to other financial services firms. Wachovia also believes that the presentation of net interest income on a tax-equivalent basis ensures comparability of net interest income arising from both taxable and tax-exempt sources and is consistent with industry standards. Although Wachovia believes the above non-GAAP financial measures enhance investors’ understanding of the company’s business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP.
Earnings Conference Call and Supplemental Materials
Wachovia CEO Ken Thompson and CFO Bob Kelly will review Wachovia’s second quarter 2003 results in a conference call and audio webcast beginning at 10 a.m. Eastern Time today. This review may include a discussion of certain non-GAAP financial measures. Supplemental materials relating to second quarter results, which also include a reconciliation of any non-GAAP measures to Wachovia’s reported financials, 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 Second 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 1-800-857-2613 for U.S. callers or 1-630-395-0022 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, July 17 at 1 p.m. EDT through 4 p.m. EDT on Friday, August 15. Replay telephone number is 1-402-220-3824.
***
Investors seeking further information should contact the Investor Relations team: Alice Lehman at 704-374-4139 or Ellen Taylor at 704-383-1381. Media seeking further information should contact the Corporate Media Relations team: Mary Eshet at 704-383-7777 or Christy Phillips at 704-383-8178.
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PAGE 6
WACHOVIA CORPORATION AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(Unaudited)
| 2003 | 2002 | ||||||||||||||
(Dollars in millions, except per share data) | Second Quarter | First Quarter | Fourth Quarter | Third Quarter | Second Quarter | ||||||||||
EARNINGS SUMMARY | |||||||||||||||
Net interest income | $ | 2,520 |
| 2,514 | 2,470 |
| 2,466 |
| 2,461 |
| |||||
Tax-equivalent adjustment |
| 63 |
| 64 | 59 |
| 54 |
| 54 |
| |||||
Net interest income (Tax-equivalent) |
| 2,583 |
| 2,578 | 2,529 |
| 2,520 |
| 2,515 |
| |||||
Fee and other income |
| 2,166 |
| 2,078 | 1,978 |
| 1,890 |
| 2,110 |
| |||||
Total revenue (Tax-equivalent) | 4,749 | 4,656 | 4,507 | 4,410 | 4,625 | ||||||||||
Provision for loan losses |
| 195 |
| 224 | 308 |
| 435 |
| 397 |
| |||||
Other noninterest expense |
| 2,777 |
| 2,699 | 2,750 |
| 2,686 |
| 2,622 |
| |||||
Merger-related and restructuring expenses |
| 96 |
| 64 | 145 |
| 107 |
| 143 |
| |||||
Other intangible amortization |
| 131 |
| 140 | 147 |
| 152 |
| 161 |
| |||||
Total noninterest expense | 3,004 | 2,903 | 3,042 | 2,945 | 2,926 | ||||||||||
Income before income taxes (Tax-equivalent) | 1,550 | 1,529 | 1,157 | 1,030 | 1,302 | ||||||||||
Tax-equivalent adjustment | 63 | 64 | 59 | 54 | 54 | ||||||||||
Income taxes | 455 | 438 | 203 | 60 | 393 | ||||||||||
Net income | 1,032 | 1,027 | 895 | 916 | 855 | ||||||||||
Dividends on preferred stock | 1 | 4 | 4 | 3 | 6 | ||||||||||
Net income available to common stockholders | $ | 1,031 | 1,023 | 891 | 913 | 849 | |||||||||
Diluted earnings per common share | $ | 0.77 | 0.76 | 0.66 | 0.66 | 0.62 | |||||||||
Return on average common stockholders’ equity | 12.78 | % | 12.94 | 11.07 | 11.63 | 11.52 | |||||||||
Return on average assets | 1.21 | 1.23 | 1.08 | 1.13 | 1.09 | ||||||||||
Overhead efficiency ratio | 63.27 | % | 62.35 | 67.51 | 66.77 | 63.28 | |||||||||
Operating leverage | $ | (9 | ) | 289 | (2 | ) | (232 | ) | (38 | ) | |||||
ASSET QUALITY | |||||||||||||||
Allowance as % of loans, net | 1.66 | % | 1.67 | 1.72 | 1.81 | 1.86 | |||||||||
Allowance as % of nonperforming assets | 166 | 158 | 161 | 149 | 150 | ||||||||||
Net charge-offs as % of average loans, net | 0.43 | 0.49 | 0.52 | 0.59 | 0.97 | ||||||||||
Nonperforming assets as % of loans, net, foreclosed properties and loans held for sale | 1.04 | % | 1.08 | 1.11 | 1.23 | 1.24 | |||||||||
CAPITAL ADEQUACY(a) | |||||||||||||||
Tier I capital ratio | 8.35 | % | 8.27 | 8.22 | 8.11 | 7.83 | |||||||||
Total capital ratio | 11.94 | 11.99 | 12.01 | 12.02 | 11.89 | ||||||||||
Leverage ratio | 6.78 | % | 6.71 | 6.77 | 6.82 | 6.75 | |||||||||
OTHER DATA | |||||||||||||||
Average diluted common shares (In millions) | 1,346 | 1,346 | 1,360 | 1,374 | 1,375 | ||||||||||
Actual common shares (In millions) | 1,332 | 1,345 | 1,357 | 1,373 | 1,371 | ||||||||||
Dividends paid per common share | $ | 0.29 | 0.26 | 0.26 | 0.26 | 0.24 | |||||||||
Dividends paid per preferred share | $ | 0.01 | 0.04 | 0.04 | 0.04 | 0.06 | |||||||||
Dividend payout ratio on common shares | 37.66 | % | 34.21 | 39.39 | 39.39 | 38.71 | |||||||||
Book value per common share | $ | 24.37 | 23.99 | 23.63 | 23.38 | 22.15 | |||||||||
Common stock price | 39.96 | 34.07 | 36.44 | 32.69 | 38.18 | ||||||||||
Market capitalization | $ | 53,228 | 45,828 | 49,461 | 44,887 | 52,347 | |||||||||
Common stock to book price | 164 | % | 142 | 154 | 140 | 172 | |||||||||
FTE employees | 81,316 | 81,152 | 80,778 | 80,987 | 82,686 | ||||||||||
Total financial centers/brokerage offices | 3,176 | 3,251 | 3,280 | 3,342 | 3,347 | ||||||||||
ATMs | 4,479 | 4,539 | 4,560 | 4,604 | 4,617 | ||||||||||
| (a) | The second quarter of 2003 is based on estimates. |
PAGE 7
WACHOVIA CORPORATION AND SUBSIDIARIES
OTHER FINANCIAL DATA
(Unaudited)
| 2003 | 2002 | ||||||||||||
(In millions) | Second Quarter | First Quarter | Fourth Quarter | Third Quarter | Second Quarter | ||||||||
EARNINGS EXCLUDING MERGER-RELATED AND RESTRUCTURING EXPENSES(a)(b) | |||||||||||||
Return on average common stockholders’ equity | 13.49 | % | 13.45 | 12.13 | 12.44 | 12.72 | |||||||
Return on average assets | 1.28 | 1.28 | 1.19 | 1.21 | 1.20 | ||||||||
Overhead efficiency ratio | 61.26 | % | 60.96 | 64.30 | 64.33 | 60.19 | |||||||
Operating leverage | $ | 22 | 209 | 36 | (267 | ) | 113 | ||||||
EARNINGS EXCLUDING MERGER-RELATED AND RESTRUCTURING EXPENSES AND OTHER INTANGIBLE AMORTIZATION(a)(b)(c) | |||||||||||||
Dividend payout ratio on common shares | 33.33 | % | 30.23 | 33.33 | 33.33 | 31.58 | |||||||
Return on average tangible common | 23.32 | 23.71 | 21.52 | 22.84 | 24.66 | ||||||||
Return on average tangible assets | 1.43 | 1.44 | 1.34 | 1.39 | 1.39 | ||||||||
Overhead efficiency ratio | 58.50 | % | 57.97 | 61.04 | 60.87 | 56.72 | |||||||
Operating leverage | $ | 13 | 202 | 30 | (275 | ) | 105 | ||||||
OTHER FINANCIAL DATA | |||||||||||||
Net interest margin | 3.78 | % | 3.86 | 3.86 | 3.94 | 3.97 | |||||||
Fee and other income as % of total revenue | 45.60 | 44.64 | 43.89 | 42.86 | 45.63 | ||||||||
Effective income tax rate | 30.54 | 29.94 | 18.39 | 6.20 | 31.46 | ||||||||
Tax rate (Tax-equivalent)(d) | 33.37 | % | 32.86 | 22.50 | 11.20 | 34.27 | |||||||
AVERAGE BALANCE SHEET DATA | |||||||||||||
Commercial loans, net | $ | 92,464 | 93,039 | 95,064 | 96,769 | 98,529 | |||||||
Consumer loans, net | 65,271 | 64,925 | 58,215 | 55,159 | 56,819 | ||||||||
Loans, net | 157,735 | 157,964 | 153,279 | 151,928 | 155,348 | ||||||||
Earning assets | 273,875 | 268,595 | 261,103 | 254,815 | 253,829 | ||||||||
Total assets | 341,718 | 337,281 | 329,960 | 321,511 | 314,714 | ||||||||
Core deposits | 179,417 | 172,988 | 170,738 | 167,184 | 164,510 | ||||||||
Total deposits | 193,800 | 188,948 | 187,442 | 179,809 | 177,925 | ||||||||
Interest-bearing liabilities | 239,688 | 237,149 | 230,611 | 223,176 | 223,407 | ||||||||
Stockholders’ equity | $ | 32,362 | 32,052 | 31,946 | 31,103 | 29,576 | |||||||
PERIOD-END BALANCE SHEET DATA | |||||||||||||
Commercial loans, net | $ | 97,303 | 98,800 | 98,905 | 101,931 | 102,780 | |||||||
Consumer loans, net | 65,530 | 65,422 | 64,192 | 55,611 | 56,020 | ||||||||
Loans, net | 162,833 | 164,222 | 163,097 | 157,542 | 158,800 | ||||||||
Goodwill and other intangible assets | |||||||||||||
Goodwill | 10,907 | 10,869 | 10,880 | 10,810 | 10,728 | ||||||||
Deposit base | 977 | 1,097 | 1,225 | 1,363 | 1,508 | ||||||||
Customer relationships | 254 | 258 | 239 | 222 | 229 | ||||||||
Tradename | 90 | 90 | 90 | 90 | 90 | ||||||||
Total assets | 364,285 | 348,064 | 341,839 | 333,880 | 324,679 | ||||||||
Core deposits | 187,393 | 181,234 | 175,743 | 173,697 | 166,779 | ||||||||
Total deposits | 201,292 | 195,837 | 191,518 | 187,785 | 180,663 | ||||||||
Stockholders’ equity | $ | 32,464 | 32,267 | 32,078 | 32,105 | 30,379 | |||||||
| (a) | These financial measures are calculated by excluding from GAAP computed net income presented on the preceding page of $60 million, $40 million, $92 million, $67 million and $89 million in the second and first quarters of 2003, and in the fourth, third and second quarters of 2002, respectively, in after-tax net merger-related and restructuring expenses. |
| (b) | See the preceding page for the most directly comparable GAAP financial measure. |
| (c) | These financial measures are calculated by excluding from GAAP computed net income presented on the preceding page of $81 million, $88 million, $83 million, $98 million and $103 million in the second and first quarters of 2003, and in the fourth, third and second quarters of 2002, respectively, in deposit base and other intangible amortization. |
| (d) | The tax-equivalent tax rate applies to fully tax-equivalized revenues. |
PAGE 8
WACHOVIA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| 2003 | 2002 | |||||||||||||||
(In millions, except per share data) | Second Quarter | First Quarter | Fourth Quarter | Third Quarter | Second Quarter | |||||||||||
INTEREST INCOME | ||||||||||||||||
Interest and fees on loans | $ | 2,391 | 2,407 | 2,538 | 2,558 | 2,563 | ||||||||||
Interest and dividends on securities | 900 | 939 | 978 | 935 | 906 | |||||||||||
Trading account interest | 179 | 174 | 158 | 179 | 173 | |||||||||||
Other interest income | 224 | 196 | 203 | 240 | 252 | |||||||||||
Total interest income | 3,694 | 3,716 | 3,877 | 3,912 | 3,894 | |||||||||||
INTEREST EXPENSE | ||||||||||||||||
Interest on deposits | 619 | 639 | 832 | 847 | 836 | |||||||||||
Interest on short-term borrowings | 321 | 306 | 295 | 310 | 300 | |||||||||||
Interest on long-term debt | 234 | 257 | 280 | 289 | 297 | |||||||||||
Total interest expense | 1,174 | 1,202 | 1,407 | 1,446 | 1,433 | |||||||||||
Net interest income | 2,520 | 2,514 | 2,470 | 2,466 | 2,461 | |||||||||||
Provision for loan losses | 195 | 224 | 308 | 435 | 397 | |||||||||||
Net interest income after provision for loan losses | 2,325 | 2,290 | 2,162 | 2,031 | 2,064 | |||||||||||
FEE AND OTHER INCOME | ||||||||||||||||
Service charges | 426 | 430 | 421 | 432 | 420 | |||||||||||
Other banking fees | 248 | 233 | 236 | 232 | 241 | |||||||||||
Commissions | 488 | 444 | 473 | 458 | 481 | |||||||||||
Fiduciary and asset management fees | 461 | 438 | 439 | 427 | 466 | |||||||||||
Advisory, underwriting and other investment banking fees | 208 | 137 | 182 | 143 | 192 | |||||||||||
Trading account profits (losses) | 69 | 100 | (42 | ) | (71 | ) | 33 | |||||||||
Principal investing | (57 | ) | (44 | ) | (105 | ) | (29 | ) | (42 | ) | ||||||
Securities gains | 10 | 37 | 46 | 71 | 58 | |||||||||||
Other income | 313 | 303 | 328 | 227 | 261 | |||||||||||
Total fee and other income | 2,166 | 2,078 | 1,978 | 1,890 | 2,110 | |||||||||||
NONINTEREST EXPENSE | ||||||||||||||||
Salaries and employee benefits | 1,748 | 1,699 | 1,681 | 1,588 | 1,665 | |||||||||||
Occupancy | 190 | 197 | 202 | 195 | 194 | |||||||||||
Equipment | 238 | 234 | 255 | 234 | 231 | |||||||||||
Advertising | 34 | 32 | 16 | 20 | 25 | |||||||||||
Communications and supplies | 136 | 141 | 143 | 136 | 132 | |||||||||||
Professional and consulting fees | 104 | 99 | 126 | 111 | 96 | |||||||||||
Other intangible amortization | 131 | 140 | 147 | 152 | 161 | |||||||||||
Merger-related and restructuring expenses | 96 | 64 | 145 | 107 | 143 | |||||||||||
Sundry expense | 327 | 297 | 327 | 402 | 279 | |||||||||||
Total noninterest expense | 3,004 | 2,903 | 3,042 | 2,945 | 2,926 | |||||||||||
Income before income taxes | 1,487 | 1,465 | 1,098 | 976 | 1,248 | |||||||||||
Income taxes | 455 | 438 | 203 | 60 | 393 | |||||||||||
Net income | 1,032 | 1,027 | 895 | 916 | 855 | |||||||||||
Dividends on preferred stock | 1 | 4 | 4 | 3 | 6 | |||||||||||
Net income available to common stockholders | $ | 1,031 | 1,023 | 891 | 913 | 849 | ||||||||||
PER COMMON SHARE DATA | ||||||||||||||||
Basic earnings | $ | 0.77 | 0.77 | 0.66 | 0.67 | 0.62 | ||||||||||
Diluted earnings | 0.77 | 0.76 | 0.66 | 0.66 | 0.62 | |||||||||||
Cash dividends | $ | 0.29 | 0.26 | 0.26 | 0.26 | 0.24 | ||||||||||
AVERAGE COMMON SHARES | ||||||||||||||||
Basic | 1,333 | 1,335 | 1,350 | 1,362 | 1,360 | |||||||||||
Diluted | 1,346 | 1,346 | 1,360 | 1,374 | 1,375 | |||||||||||
PAGE 9
WACHOVIA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| Six Months Ended June 30, | |||||||
(In millions, except per share data) | 2003 | 2002 | |||||
INTEREST INCOME | |||||||
Interest and fees on loans | $ | 4,798 | 5,200 | ||||
Interest and dividends on securities | 1,839 | 1,762 | |||||
Trading account interest | 353 | 328 | |||||
Other interest income | 420 | 507 | |||||
Total interest income | 7,410 | 7,797 | |||||
INTEREST EXPENSE | |||||||
Interest on deposits | 1,258 | 1,751 | |||||
Interest on short-term borrowings | 627 | 586 | |||||
Interest on long-term debt | 491 | 573 | |||||
Total interest expense | 2,376 | 2,910 | |||||
Net interest income | 5,034 | 4,887 | |||||
Provision for loan losses | 419 | 736 | |||||
Net interest income after provision for loan losses | 4,615 | 4,151 | |||||
FEE AND OTHER INCOME | |||||||
Service charges | 856 | 845 | |||||
Other banking fees | 481 | 477 | |||||
Commissions | 932 | 945 | |||||
Fiduciary and asset management fees | 899 | 943 | |||||
Advisory, underwriting and other investment banking fees | 345 | 328 | |||||
Trading account profits | 169 | 137 | |||||
Principal investing | (101 | ) | (132 | ) | |||
Securities gains | 47 | 52 | |||||
Other income | 616 | 542 | |||||
Total fee and other income | 4,244 | 4,137 | |||||
NONINTEREST EXPENSE | |||||||
Salaries and employee benefits | 3,447 | 3,328 | |||||
Occupancy | 387 | 389 | |||||
Equipment | 472 | 457 | |||||
Advertising | 66 | 44 | |||||
Communications and supplies | 277 | 266 | |||||
Professional and consulting fees | 203 | 184 | |||||
Other intangible amortization | 271 | 329 | |||||
Merger-related and restructuring expenses | 160 | 135 | |||||
Sundry expense | 624 | 563 | |||||
Total noninterest expense | 5,907 | 5,695 | |||||
Income before income taxes | 2,952 | 2,593 | |||||
Income taxes | 893 | 825 | |||||
Net income | 2,059 | 1,768 | |||||
Dividends on preferred stock | 5 | 12 | |||||
Net income available to common stockholders | $ | 2,054 | 1,756 | ||||
PER COMMON SHARE DATA | |||||||
Basic earnings | $ | 1.54 | 1.29 | ||||
Diluted earnings | 1.53 | 1.28 | |||||
Cash dividends | $ | 0.55 | 0.48 | ||||
AVERAGE COMMON SHARES | |||||||
Basic | 1,334 | 1,357 | |||||
Diluted | 1,346 | 1,370 | |||||
PAGE 10
WACHOVIA CORPORATION AND SUBSIDIARIES
BUSINESS SEGMENTS
(Unaudited)
| Three Months Ended June 30, 2003 | |||||||||||||||||||
(In millions) | General Bank | Capital Management | Wealth Management | Corporate and Investment Bank | Parent | Net Merger- Related and Restructuring Expenses(b) | Total | ||||||||||||
CONSOLIDATED | |||||||||||||||||||
Net interest income(a) | $ | 1,812 | 37 | 106 | 551 | 77 | (63 | ) | 2,520 | ||||||||||
Fee and other income | 581 | 800 | 131 | 578 | 76 | — | 2,166 | ||||||||||||
Intersegment revenue | 45 | (16 | ) | 2 | (29 | ) | (2 | ) | — | — | |||||||||
Total revenue | 2,438 | 821 | 239 | 1,100 | 151 | (63 | ) | 4,686 | |||||||||||
Provision for loan losses | 99 | — | 5 | 95 | (4 | ) | — | 195 | |||||||||||
Noninterest expense | 1,324 | 662 | 175 | 567 | 180 | 96 | 3,004 | ||||||||||||
Income taxes (benefits) | 361 | 59 | 22 | 132 | (83 | ) | (36 | ) | 455 | ||||||||||
Tax-equivalent adjustment | 10 | — | — | 31 | 22 | (63 | ) | — | |||||||||||
Net income | 644 | 100 | 37 | 275 | 36 | (60 | ) | 1,032 | |||||||||||
Dividends on preferred stock | — | — | — | — | 1 | — | 1 | ||||||||||||
Net income available to common stockholders | $ | 644 | 100 | 37 | 275 | 35 | (60 | ) | 1,031 | ||||||||||
| Three Months Ended March 31, 2003 | |||||||||||||||||||
(In millions) | General Bank | Capital Management | Wealth Management | Corporate and Investment Bank | Parent | Net Merger- Related and Restructuring Expenses(b) | Total | ||||||||||||
CONSOLIDATED | |||||||||||||||||||
Net interest income(a) | $ | 1,744 | 38 | 103 | 565 | 128 | (64 | ) | 2,514 | ||||||||||
Fee and other income | 562 | 735 | 133 | 571 | 77 | — | 2,078 | ||||||||||||
Intersegment revenue | 43 | (19 | ) | 1 | (26 | ) | 1 | — | — | ||||||||||
Total revenue | 2,349 | 754 | 237 | 1,110 | 206 | (64 | ) | 4,592 | |||||||||||
Provision for loan losses | 105 | — | 4 | 110 | 5 | — | 224 | ||||||||||||
Noninterest expense | 1,297 | 625 | 170 | 557 | 190 | 64 | 2,903 | ||||||||||||
Income taxes (benefits) | 335 | 46 | 23 | 138 | (80 | ) | (24 | ) | 438 | ||||||||||
Tax-equivalent adjustment | 10 | — | — | 26 | 28 | (64 | ) | — | |||||||||||
Net income | 602 | 83 | 40 | 279 | 63 | (40 | ) | 1,027 | |||||||||||
Dividends on preferred stock | — | — | — | — | 4 | — | 4 | ||||||||||||
Net income available to common stockholders | $ | 602 | 83 | 40 | 279 | 59 | (40 | ) | 1,023 | ||||||||||
PAGE 11
WACHOVIA CORPORATION AND SUBSIDIARIES
BUSINESS SEGMENTS
(Unaudited)
| Three Months Ended June 30, 2002 | |||||||||||||||||||
(In millions) | General Bank | Capital Management | Wealth Management | Corporate and Investment Bank | Parent | Net Merger- Related and Restructuring Expenses(b) | Total | ||||||||||||
CONSOLIDATED | |||||||||||||||||||
Net interest income(a) | $ | 1,720 | 40 | 100 | 583 | 72 | (54 | ) | 2,461 | ||||||||||
Fee and other income | 508 | 788 | 137 | 495 | 182 | — | 2,110 | ||||||||||||
Intersegment revenue | 42 | (19 | ) | 2 | (24 | ) | (1 | ) | — | — | |||||||||
Total revenue | 2,270 | 809 | 239 | 1,054 | 253 | (54 | ) | 4,571 | |||||||||||
Provision for loan losses | 98 | — | 7 | 293 | (1 | ) | — | 397 | |||||||||||
Noninterest expense | 1,252 | 657 | 164 | 517 | 193 | 143 | 2,926 | ||||||||||||
Income taxes (benefits) | 327 | 55 | 25 | 65 | (25 | ) | (54 | ) | 393 | ||||||||||
Tax-equivalent adjustment | 10 | — | — | 27 | 17 | (54 | ) | — | |||||||||||
Net income | 583 | 97 | 43 | 152 | 69 | (89 | ) | 855 | |||||||||||
Dividends on preferred stock | — | — | — | — | 6 | — | 6 | ||||||||||||
Net income available to common stockholders | $ | 583 | 97 | 43 | 152 | 63 | (89 | ) | 849 | ||||||||||
| (a) | Tax-equivalent. |
| (b) | The tax-equivalent amounts are eliminated herein in order for “Total” amounts to agree with amounts appearing in theConsolidated Statements of Income. |
PAGE 12
WACHOVIA CORPORATION AND SUBSIDIARIES
LOANS—ON-BALANCE SHEET, AND MANAGED AND SERVICING PORTFOLIOS
(Unaudited)
| 2003 | 2002 | ||||||||||
(In millions) | Second Quarter | First Quarter | Fourth Quarter | Third Quarter | Second Quarter | ||||||
ON-BALANCE SHEET LOAN PORTFOLIO | |||||||||||
COMMERCIAL | |||||||||||
Commercial, financial and agricultural | $ | 54,857 | 56,476 | 56,501 | 57,899 | 57,984 | |||||
Real estate—construction and other | 6,827 | 6,833 | 6,849 | 7,558 | 8,035 | ||||||
Real estate—mortgage | 16,153 | 16,429 | 16,655 | 16,967 | 17,349 | ||||||
Lease financing | 23,204 | 23,060 | 22,667 | 22,616 | 22,044 | ||||||
Foreign | 6,622 | 6,433 | 6,425 | 6,992 | 7,241 | ||||||
Total commercial | 107,663 | 109,231 | 109,097 | 112,032 | 112,653 | ||||||
CONSUMER | |||||||||||
Real estate—mortgage | 25,564 | 25,288 | 24,979 | 17,527 | 19,803 | ||||||
Installment loans | 39,577 | 39,748 | 38,817 | 37,889 | 35,940 | ||||||
Vehicle leasing | 13 | 35 | 80 | 43 | 168 | ||||||
Total consumer | 65,154 | 65,071 | 63,876 | 55,459 | 55,911 | ||||||
Total loans | 172,817 | 174,302 | 172,973 | 167,491 | 168,564 | ||||||
Unearned income | 9,984 | 10,080 | 9,876 | 9,949 | 9,764 | ||||||
Loans, net (On-balance sheet) | $ | 162,833 | 164,222 | 163,097 | 157,542 | 158,800 | |||||
MANAGED PORTFOLIO(a) | |||||||||||
COMMERCIAL | |||||||||||
On-balance sheet loan portfolio | $ | 107,663 | 109,231 | 109,097 | 112,032 | 112,653 | |||||
Securitized loans—off-balance sheet | 2,126 | 2,190 | 2,218 | 2,288 | 2,318 | ||||||
Loans held for sale included in other assets | 1,282 | 1,617 | 1,140 | 1,271 | 779 | ||||||
Total commercial | 111,071 | 113,038 | 112,455 | 115,591 | 115,750 | ||||||
CONSUMER | |||||||||||
Real estate—mortgage | |||||||||||
On-balance sheet loan portfolio | 25,564 | 25,288 | 24,979 | 17,527 | 19,803 | ||||||
Securitized loans—off-balance sheet | 185 | 251 | 325 | 397 | — | ||||||
Securitized loans included in securities | 3,762 | 4,971 | 6,223 | 7,268 | 5,761 | ||||||
Loans held for sale included in other assets | 2,696 | 2,154 | 2,719 | 2,474 | 1,387 | ||||||
Total real estate—mortgage | 32,207 | 32,664 | 34,246 | 27,666 | 26,951 | ||||||
Installment loans | |||||||||||
On-balance sheet loan portfolio | 39,577 | 39,748 | 38,817 | 37,889 | 35,940 | ||||||
Securitized loans—off-balance sheet | 11,706 | 13,068 | 13,217 | 13,164 | 13,379 | ||||||
Securitized loans included in securities | 9,253 | 9,842 | 11,093 | 11,695 | 8,918 | ||||||
Loans held for sale included in other assets | 6,110 | 3,690 | 2,153 | 2,512 | 6,232 | ||||||
Total installment loans | 66,646 | 66,348 | 65,280 | 65,260 | 64,469 | ||||||
Vehicle leasing—on-balance sheet loan portfolio | 13 | 35 | 80 | 43 | 168 | ||||||
Total consumer | 98,866 | 99,047 | 99,606 | 92,969 | 91,588 | ||||||
Total managed portfolio | $ | 209,937 | 212,085 | 212,061 | 208,560 | 207,338 | |||||
SERVICING PORTFOLIO(b) | |||||||||||
Commercial | $ | 73,128 | 65,076 | 59,336 | 53,611 | 50,001 | |||||
Consumer | $ | 6,581 | 2,236 | 2,272 | 2,490 | 1,773 | |||||
| (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. |
PAGE 13
WACHOVIA CORPORATION AND SUBSIDIARIES
ALLOWANCE FOR LOAN LOSSES AND NONPERFORMING ASSETS
(Unaudited)
| 2003 | 2002 | |||||||||||||||
(In millions) | Second Quarter | First Quarter | Fourth Quarter | Third Quarter | Second Quarter | |||||||||||
ALLOWANCE FOR LOAN LOSSES | ||||||||||||||||
Balance, beginning of period | $ | 2,747 | 2,798 | 2,847 | 2,951 | 2,986 | ||||||||||
Provision for loan losses relating to loans transferred to other assets or sold | 26 | 25 | 109 | 211 | 23 | |||||||||||
Provision for loan losses | 169 | 199 | 199 | 224 | 374 | |||||||||||
Allowance relating to loans acquired, transferred to other assets or sold | (69 | ) | (80 | ) | (158 | ) | (315 | ) | (58 | ) | ||||||
Net charge-offs | (169 | ) | (195 | ) | (199 | ) | (224 | ) | (374 | ) | ||||||
Balance, end of period | $ | 2,704 | 2,747 | 2,798 | 2,847 | 2,951 | ||||||||||
as % of loans, net | 1.66 | % | 1.67 | 1.72 | 1.81 | 1.86 | ||||||||||
as % of nonaccrual and restructured loans(a) | 180 | % | 169 | 177 | 163 | 163 | ||||||||||
as % of nonperforming assets(a) | 166 | % | 158 | 161 | 149 | 150 | ||||||||||
LOAN LOSSES | ||||||||||||||||
Commercial, financial and agricultural | $ | 128 | 150 | 136 | 160 | 319 | ||||||||||
Real estate—commercial construction and mortgage | 7 | 2 | 12 | 5 | 3 | |||||||||||
Real estate—residential mortgage | 2 | 2 | 1 | 3 | 1 | |||||||||||
Installment loans and vehicle leasing | 89 | 91 | 91 | 91 | 86 | |||||||||||
Total loan losses | 226 | 245 | 240 | 259 | 409 | |||||||||||
LOAN RECOVERIES | ||||||||||||||||
Commercial, financial and agricultural | 37 | 29 | 24 | 17 | 16 | |||||||||||
Real estate—commercial construction and mortgage | 1 | — | — | — | 2 | |||||||||||
Real estate—residential mortgage | 1 | — | 1 | — | — | |||||||||||
Installment loans and vehicle leasing | 18 | 21 | 16 | 18 | 17 | |||||||||||
Total loan recoveries | 57 | 50 | 41 | 35 | 35 | |||||||||||
Net charge-offs | $ | 169 | 195 | 199 | 224 | 374 | ||||||||||
Commercial loans net charge-offs as % of average commercial loans, net(b) | 0.42 | % | 0.53 | 0.53 | 0.61 | 1.24 | ||||||||||
Consumer loans net charge-offs as % of average consumer loans, net(b) | 0.44 | 0.44 | 0.52 | 0.56 | 0.48 | |||||||||||
Total net charge-offs as % of average loans, net(b) | 0.43 | % | 0.49 | 0.52 | 0.59 | 0.97 | ||||||||||
NONPERFORMING ASSETS | ||||||||||||||||
Nonaccrual loans | ||||||||||||||||
Commercial, financial and agricultural | $ | 1,153 | 1,260 | 1,269 | 1,440 | 1,456 | ||||||||||
Real estate—commercial construction and mortgage | 96 | 111 | 105 | 137 | 144 | |||||||||||
Real estate—residential mortgage | 82 | 73 | 79 | 62 | 60 | |||||||||||
Installment loans and vehicle leasing | 170 | 178 | 132 | 112 | 145 | |||||||||||
Total nonaccrual loans | 1,501 | 1,622 | 1,585 | 1,751 | 1,805 | |||||||||||
Foreclosed properties(c) | 130 | 118 | 150 | 156 | 156 | |||||||||||
Total nonperforming assets | $ | 1,631 | 1,740 | 1,735 | 1,907 | 1,961 | ||||||||||
Nonperforming loans included in loans held for sale(d) | $ | 167 | 114 | 138 | 115 | 108 | ||||||||||
Nonperforming assets included in loans and in loans held for sale | $ | 1,798 | 1,854 | 1,873 | 2,022 | 2,069 | ||||||||||
as % of loans, net, and foreclosed properties(a) | 1.00 | % | 1.06 | 1.06 | 1.21 | 1.23 | ||||||||||
as % of loans, net, foreclosed properties and loans in other assets as held for sale(d) | 1.04 | % | 1.08 | 1.11 | 1.23 | 1.24 | ||||||||||
Accruing loans past due 90 days | $ | 293 | 289 | 304 | 284 | 250 | ||||||||||
| (a) | These ratios do not include nonperforming loans held for sale. |
| (b) | Annualized. |
| (c) | Restructured loans are not significant. |
| (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 amounts shown and included in the ratios are net of the transferred allowance for loan losses and the lower of cost or market value adjustments. |
PAGE 14
WACHOVIA CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| 2003 | 2002 | |||||||||||||||
(In millions, except per share data) | Second Quarter | First Quarter | Fourth Quarter | Third Quarter | Second Quarter | |||||||||||
ASSETS | ||||||||||||||||
Cash and due from banks | $ | 13,088 | 13,161 | 12,264 | 11,930 | 10,668 | ||||||||||
Interest-bearing bank balances | 7,539 | 4,855 | 3,512 | 3,561 | 2,269 | |||||||||||
Federal funds sold and securities purchased under resale agreements | 13,854 | 11,092 | 9,160 | 7,132 | 11,541 | |||||||||||
Total cash and cash equivalents | 34,481 | 29,108 | 24,936 | 22,623 | 24,478 | |||||||||||
Trading account assets | 40,436 | 34,678 | 33,155 | 35,902 | 34,570 | |||||||||||
Securities | 73,764 | 73,339 | 75,804 | 72,071 | 60,999 | |||||||||||
Loans, net of unearned income | 162,833 | 164,222 | 163,097 | 157,542 | 158,800 | |||||||||||
Allowance for loan losses | (2,704 | ) | (2,747 | ) | (2,798 | ) | (2,847 | ) | (2,951 | ) | ||||||
Loans, net | 160,129 | 161,475 | 160,299 | 154,695 | 155,849 | |||||||||||
Premises and equipment | 4,635 | 5,118 | 4,903 | 5,422 | 5,494 | |||||||||||
Due from customers on acceptances | 1,074 | 1,485 | 1,051 | 1,080 | 1,105 | |||||||||||
Goodwill | 10,907 | 10,869 | 10,880 | 10,810 | 10,728 | |||||||||||
Other intangible assets | 1,321 | 1,445 | 1,554 | 1,675 | 1,827 | |||||||||||
Other assets | 37,538 | 30,547 | 29,257 | 29,602 | 29,629 | |||||||||||
Total assets | $ | 364,285 | 348,064 | 341,839 | 333,880 | 324,679 | ||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||
Deposits | ||||||||||||||||
Noninterest-bearing deposits | 48,081 | 46,348 | 44,640 | 44,186 | 39,558 | |||||||||||
Interest-bearing deposits | 153,211 | 149,489 | 146,878 | 143,599 | 141,105 | |||||||||||
Total deposits | 201,292 | 195,837 | 191,518 | 187,785 | 180,663 | |||||||||||
Short-term borrowings | 49,123 | 44,812 | 41,173 | 36,350 | 39,148 | |||||||||||
Bank acceptances outstanding | 1,078 | 1,492 | 1,061 | 1,093 | 1,110 | |||||||||||
Trading account liabilities | 25,141 | 20,896 | 22,900 | 22,210 | 22,445 | |||||||||||
Other liabilities | 18,136 | 13,556 | 13,447 | 14,579 | 13,003 | |||||||||||
Long-term debt | 37,051 | 39,204 | 39,662 | 39,758 | 37,931 | |||||||||||
Total liabilities | 331,821 | 315,797 | 309,761 | 301,775 | 294,300 | |||||||||||
| STOCKHOLDERS’ EQUITY | ||||||||||||||||
Dividend Equalization Preferred shares, no par value, 97 million shares issued and outstanding at June 30, 2003 | — | — | — | 2 | 5 | |||||||||||
Common stock, $3.33-1/3 par value; authorized 3 billion shares, outstanding 1.332 billion shares at June 30, 2003 | 4,440 | 4,484 | 4,524 | 4,577 | 4,570 | |||||||||||
Paid-in capital | 17,784 | 17,903 | 18,070 | 18,233 | 18,106 | |||||||||||
Retained earnings | 8,106 | 7,778 | 7,349 | 7,221 | 6,663 | |||||||||||
Accumulated other comprehensive income, net | 2,134 | 2,102 | 2,135 | 2,072 | 1,035 | |||||||||||
Total stockholders’ equity | 32,464 | 32,267 | 32,078 | 32,105 | 30,379 | |||||||||||
Total liabilities and stockholders’ equity | $ | 364,285 | 348,064 | 341,839 | 333,880 | 324,679 | ||||||||||
PAGE 15
WACHOVIA CORPORATION AND SUBSIDIARIES
NET INTEREST INCOME SUMMARIES
(Unaudited)
| Second Quarter 2003 | First Quarter 2003 | |||||||||||||||||
(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 | $ | 4,751 | 16 | 1.34 | % | $ | 3,688 | 13 | 1.43 | % | ||||||||
Federal funds sold and securities | 12,282 | 35 | 1.10 | 8,949 | 29 | 1.33 | ||||||||||||
Trading account assets | 18,254 | 200 | 4.40 | 16,298 | 196 | 4.84 | ||||||||||||
Securities | 68,994 | 977 | 5.67 | 72,116 | 1,020 | 5.66 | ||||||||||||
Loans | ||||||||||||||||||
Commercial | ||||||||||||||||||
Commercial, financial and agricultural | 55,726 | 584 | 4.20 | 56,464 | 593 | 4.26 | ||||||||||||
Real estate—construction and other | 6,901 | 61 | 3.54 | 6,800 | 60 | 3.57 | ||||||||||||
Real estate—mortgage | 16,325 | 189 | 4.66 | 16,537 | 192 | 4.69 | ||||||||||||
Lease financing | 6,885 | 187 | 10.87 | 6,777 | 184 | 10.86 | ||||||||||||
Foreign | 6,627 | 47 | 2.89 | 6,461 | 50 | 3.11 | ||||||||||||
Total commercial | 92,464 | 1,068 | 4.63 | 93,039 | 1,079 | 4.69 | ||||||||||||
Consumer | ||||||||||||||||||
Real estate—mortgage | 25,290 | 314 | 4.97 | 25,292 | 333 | 5.27 | ||||||||||||
Installment loans and vehicle leasing | 39,981 | 621 | 6.22 | 39,633 | 625 | 6.38 | ||||||||||||
Total consumer | 65,271 | 935 | 5.73 | 64,925 | 958 | 5.95 | ||||||||||||
Total loans | 157,735 | 2,003 | 5.09 | 157,964 | 2,037 | 5.21 | ||||||||||||
Other earning assets | 11,859 | 134 | 4.52 | 9,580 | 114 | 4.81 | ||||||||||||
Total earning assets excluding derivatives | 273,875 | 3,365 | 4.92 | 268,595 | 3,409 | 5.11 | ||||||||||||
Risk management derivatives(a) | — | 392 | 0.57 | — | 371 | 0.56 | ||||||||||||
Total earning assets including derivatives | 273,875 | 3,757 | 5.49 | 268,595 | 3,780 | 5.67 | ||||||||||||
Cash and due from banks | 10,845 | 10,887 | ||||||||||||||||
Other assets | 56,998 | 57,799 | ||||||||||||||||
Total assets | $ | 341,718 | $ | 337,281 | ||||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||
Interest-bearing deposits | ||||||||||||||||||
Savings and NOW accounts | 52,196 | 71 | 0.55 | 50,887 | 79 | 0.63 | ||||||||||||
Money market accounts | 53,302 | 156 | 1.18 | 47,987 | 142 | 1.20 | ||||||||||||
Other consumer time | 31,330 | 243 | 3.09 | 32,671 | 263 | 3.27 | ||||||||||||
Foreign | 6,841 | 24 | 1.44 | 7,304 | 27 | 1.47 | ||||||||||||
Other time | 7,542 | 35 | 1.88 | 8,656 | 42 | 1.97 | ||||||||||||
Total interest-bearing deposits | 151,211 | 529 | 1.40 | 147,505 | 553 | 1.52 | ||||||||||||
Federal funds purchased and securities sold under repurchase agreements | 37,957 | 149 | 1.57 | 37,392 | 147 | 1.60 | ||||||||||||
Commercial paper | 2,381 | 5 | 0.80 | 2,604 | 4 | 0.70 | ||||||||||||
Securities sold short | 8,121 | 58 | 2.84 | 6,734 | 44 | 2.67 | ||||||||||||
Other short-term borrowings | 4,267 | 15 | 1.44 | 4,170 | 18 | 1.72 | ||||||||||||
Debentures and capital notes | 35,751 | 366 | 4.10 | 38,744 | 388 | 4.01 | ||||||||||||
Total interest-bearing liabilities excluding derivatives | 239,688 | 1,122 | 1.88 | 237,149 | 1,154 | 1.97 | ||||||||||||
Risk management derivatives(a) | — | 52 | 0.08 | — | 48 | 0.08 | ||||||||||||
Total interest-bearing liabilities including derivatives | 239,688 | 1,174 | 1.96 | 237,149 | 1,202 | 2.05 | ||||||||||||
Noninterest-bearing deposits | 42,589 | 41,443 | ||||||||||||||||
Other liabilities | 27,079 | 26,637 | ||||||||||||||||
Stockholders’ equity | 32,362 | 32,052 | ||||||||||||||||
Total liabilities and stockholders’ equity | $ | 341,718 | $ | 337,281 | ||||||||||||||
Interest income and rate earned—including derivatives | $ | 3,757 | 5.49 | % | $ | 3,780 | 5.67 | % | ||||||||||
Interest expense and equivalent rate paid—including derivatives | 1,174 | 1.71 | 1,202 | 1.81 | ||||||||||||||
Net interest income and margin—including derivatives | $ | 2,583 | 3.78 | % | $ | 2,578 | 3.86 | % | ||||||||||
| (a) | The rates earned and the rates paid on risk management derivatives are based on off-balance sheet notional amounts. The fair value of these instruments is included in other assets and other liabilities. |
PAGE 16
WACHOVIA CORPORATION AND SUBSIDIARIES
NET INTEREST INCOME SUMMARIES
(Unaudited)
| Fourth Quarter 2002 | Third Quarter 2002 | Second Quarter 2002 | |||||||||||||||||||||||
Average Balances | Interest Income/Expense | Average Rates Earned/Paid | Average Balances | Interest Income/Expense | Average Rates Earned/Paid | Average Balances | Interest Income/Expense | Average Rates Earned/Paid | |||||||||||||||||
| $ | 3,416 | 14 | 1.59 | % | $ | 2,891 | 14 | 1.90 | % | $ | 2,613 | 13 | 2.02 | % | |||||||||||
| 9,507 | 39 | 1.63 | 10,474 | 49 | 1.83 | 10,835 | 52 | 1.97 | |||||||||||||||||
| 14,683 | 178 | 4.83 | 14,945 | 194 | 5.17 | 15,503 | 186 | 4.79 | |||||||||||||||||
| 71,249 | 1,045 | 5.86 | 62,806 | 999 | 6.36 | 58,169 | 967 | 6.65 | |||||||||||||||||
| 57,318 | 663 | 4.58 | 57,788 | 693 | 4.76 | 58,760 | 710 | 4.84 | |||||||||||||||||
| 7,133 | 68 | 3.80 | 7,809 | 81 | 4.10 | 8,115 | 84 | 4.19 | |||||||||||||||||
| 16,770 | 214 | 5.06 | 17,188 | 228 | 5.26 | 17,310 | 231 | 5.36 | |||||||||||||||||
| 7,112 | 187 | 10.53 | 7,105 | 189 | 10.65 | 7,286 | 193 | 10.60 | |||||||||||||||||
| 6,731 | 58 | 3.43 | 6,879 | 59 | 3.41 | 7,058 | 60 | 3.37 | |||||||||||||||||
| 95,064 | 1,190 | 4.97 | 96,769 | 1,250 | 5.13 | 98,529 | 1,278 | 5.20 | |||||||||||||||||
| 19,294 | 295 | 6.12 | 18,968 | 294 | 6.20 | 20,102 | 319 | 6.35 | |||||||||||||||||
| 38,921 | 655 | 6.69 | 36,191 | 651 | 7.15 | 36,717 | 662 | 7.22 | |||||||||||||||||
| 58,215 | 950 | 6.50 | 55,159 | 945 | 6.82 | 56,819 | 981 | 6.91 | |||||||||||||||||
| 153,279 | 2,140 | 5.55 | 151,928 | 2,195 | 5.75 | 155,348 | 2,259 | 5.83 | |||||||||||||||||
| 8,969 | 115 | 5.10 | 11,771 | 144 | 4.86 | 11,361 | 154 | 5.42 | |||||||||||||||||
| 261,103 | 3,531 | 5.39 | 254,815 | 3,595 | 5.62 | 253,829 | 3,631 | 5.73 | |||||||||||||||||
| — | 405 | 0.61 | — | 371 | 0.58 | — | 317 | 0.50 | |||||||||||||||||
| 261,103 | 3,936 | 6.00 | 254,815 | 3,966 | 6.20 | 253,829 | 3,948 | 6.23 | |||||||||||||||||
| 10,636 | 9,955 | 10,110 | |||||||||||||||||||||||
| 58,221 | 56,741 | 50,775 | |||||||||||||||||||||||
| $ | 329,960 | $ | 321,511 | $ | 314,714 | ||||||||||||||||||||
| 49,768 | 99 | 0.79 | 48,883 | 115 | 0.93 | 49,060 | 122 | 1.00 | |||||||||||||||||
| 45,618 | 156 | 1.35 | 43,495 | 167 | 1.53 | 40,035 | 171 | 1.71 | |||||||||||||||||
| 34,834 | 331 | 3.78 | 36,034 | 347 | 3.82 | 36,967 | 365 | 3.96 | |||||||||||||||||
| 8,030 | 33 | 1.59 | 6,491 | 30 | 1.84 | 7,195 | 33 | 1.88 | |||||||||||||||||
| 8,674 | 45 | 2.08 | 6,134 | 33 | 2.13 | 6,220 | 32 | 2.00 | |||||||||||||||||
| 146,924 | 664 | 1.79 | 141,037 | 692 | 1.95 | 139,477 | 723 | 2.08 | |||||||||||||||||
| 32,608 | 149 | 1.81 | 32,094 | 149 | 1.85 | 32,109 | 145 | 1.80 | |||||||||||||||||
| 2,796 | 7 | 0.87 | 3,001 | 9 | 1.19 | 3,027 | 8 | 1.18 | |||||||||||||||||
| 5,644 | 35 | 2.44 | 6,422 | 42 | 2.58 | 6,671 | 40 | 2.45 | |||||||||||||||||
| 3,881 | 15 | 1.67 | 3,082 | 18 | 2.25 | 3,368 | 22 | 2.60 | |||||||||||||||||
| 38,758 | 405 | 4.18 | 37,540 | 412 | 4.38 | 38,755 | 420 | 4.34 | |||||||||||||||||
| 230,611 | 1,275 | 2.20 | 223,176 | 1,322 | 2.35 | 223,407 | 1,358 | 2.44 | |||||||||||||||||
| — | 132 | 0.22 | — | 124 | 0.22 | — | 75 | 0.13 | |||||||||||||||||
| 230,611 | 1,407 | 2.42 | 223,176 | 1,446 | 2.57 | 223,407 | 1,433 | 2.57 | |||||||||||||||||
| 40,518 | 38,772 | 38,448 | |||||||||||||||||||||||
| 26,885 | 28,460 | 23,283 | |||||||||||||||||||||||
| 31,946 | 31,103 | 29,576 | |||||||||||||||||||||||
| $ | 329,960 | $ | 321,511 | $ | 314,714 | ||||||||||||||||||||
| $ | 3,936 | 6.00 | % | $ | 3,966 | 6.20 | % | $ | 3,948 | 6.23 | % | ||||||||||||||
| 1,407 | 2.14 | 1,446 | 2.26 | 1,433 | 2.26 | ||||||||||||||||||||
| $ | 2,529 | 3.86 | % | $ | 2,520 | 3.94 | % | $ | 2,515 | 3.97 | % | ||||||||||||||
PAGE 17
WACHOVIA CORPORATION AND SUBSIDIARIES
NET INTEREST INCOME SUMMARIES(a)
(Unaudited)
| Six Months Ended 2003 | Six Months Ended 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 | $ | 4,222 | 29 | 1.38 | % | $ | 3,472 | 35 | 2.05 | % | ||||||||
Federal funds sold and securities | 10,624 | 64 | 1.20 | 11,424 | 107 | 1.91 | ||||||||||||
Trading account assets | 17,281 | 396 | 4.61 | 14,733 | 351 | 4.78 | ||||||||||||
Securities | 70,546 | 1,997 | 5.67 | 57,177 | 1,881 | 6.58 | ||||||||||||
Loans | ||||||||||||||||||
Commercial | ||||||||||||||||||
Commercial, financial and agricultural | 56,092 | 1,177 | 4.23 | 59,451 | 1,430 | 4.85 | ||||||||||||
Real estate—construction and other | 6,851 | 121 | 3.55 | 8,120 | 170 | 4.23 | ||||||||||||
Real estate—mortgage | 16,431 | 381 | 4.68 | 17,237 | 469 | 5.49 | ||||||||||||
Lease financing | 6,831 | 371 | 10.86 | 7,364 | 386 | 10.48 | ||||||||||||
Foreign | 6,545 | 97 | 3.00 | 6,945 | 122 | 3.54 | ||||||||||||
Total commercial | 92,750 | 2,147 | 4.66 | 99,117 | 2,577 | 5.24 | ||||||||||||
Consumer | ||||||||||||||||||
Real estate—mortgage | 25,291 | 647 | 5.12 | 20,769 | 673 | 6.48 | ||||||||||||
Installment loans and vehicle leasing | 39,808 | 1,246 | 6.30 | 36,445 | 1,328 | 7.34 | ||||||||||||
Total consumer | 65,099 | 1,893 | 5.84 | 57,214 | 2,001 | 7.03 | ||||||||||||
Total loans | 157,849 | 4,040 | 5.15 | 156,331 | 4,578 | 5.89 | ||||||||||||
Other earning assets | 10,728 | 248 | 4.65 | 11,218 | 294 | 5.28 | ||||||||||||
Total earning assets excluding derivatives | 271,250 | 6,774 | 5.01 | 254,355 | 7,246 | 5.72 | ||||||||||||
Risk management derivatives(b) | — | 763 | 0.57 | — | 656 | 0.52 | ||||||||||||
Total earning assets including derivatives | 271,250 | 7,537 | 5.58 | 254,355 | 7,902 | 6.24 | ||||||||||||
Cash and due from banks | 10,866 | 10,331 | ||||||||||||||||
Other assets | 57,396 | 50,331 | ||||||||||||||||
Total assets | $ | 339,512 | $ | 315,017 | ||||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||
Interest-bearing deposits | ||||||||||||||||||
Savings and NOW accounts | 51,545 | 150 | 0.59 | 48,852 | 250 | 1.03 | ||||||||||||
Money market accounts | 50,659 | 298 | 1.19 | 38,819 | 334 | 1.73 | ||||||||||||
Other consumer time | 31,997 | 506 | 3.18 | 37,567 | 764 | 4.10 | ||||||||||||
Foreign | 7,071 | 51 | 1.46 | 7,385 | 68 | 1.87 | ||||||||||||
Other time | 8,096 | 77 | 1.93 | 7,165 | 75 | 2.11 | ||||||||||||
Total interest-bearing deposits | 149,368 | 1,082 | 1.46 | 139,788 | 1,491 | 2.15 | ||||||||||||
Federal funds purchased and securities | 37,676 | 296 | 1.58 | 32,132 | 291 | 1.82 | ||||||||||||
Commercial paper | 2,492 | 9 | 0.75 | 3,231 | 18 | 1.16 | ||||||||||||
Securities sold short | 7,431 | 102 | 2.76 | 6,616 | 78 | 2.39 | ||||||||||||
Other short-term borrowings | 4,219 | 33 | 1.58 | 3,676 | 49 | 2.69 | ||||||||||||
Debentures and capital notes | 37,240 | 754 | 4.05 | 39,669 | 850 | 4.29 | ||||||||||||
Total interest-bearing liabilities excluding derivatives | 238,426 | 2,276 | 1.92 | 225,112 | 2,777 | 2.48 | ||||||||||||
Risk management derivatives(b) | — | 100 | 0.09 | — | 133 | 0.12 | ||||||||||||
Total interest-bearing liabilities including derivatives | 238,426 | 2,376 | 2.01 | 225,112 | 2,910 | 2.60 | ||||||||||||
Noninterest-bearing deposits | 42,019 | 38,289 | ||||||||||||||||
Other liabilities | 26,859 | 22,374 | ||||||||||||||||
Stockholders’ equity | 32,208 | 29,242 | ||||||||||||||||
Total liabilities and stockholders’ equity | $ | 339,512 | $ | 315,017 | ||||||||||||||
Interest income and rate earned—including derivatives | $ | 7,537 | 5.58 | % | $ | 7,902 | 6.24 | % | ||||||||||
Interest expense and equivalent rate paid—including derivatives | 2,376 | 1.76 | 2,910 | 2.30 | ||||||||||||||
Net interest income and margin—including derivatives | $ | 5,161 | 3.82 | % | $ | 4,992 | 3.94 | % | ||||||||||
| (a) | Certain amounts presented in 2002 have been reclassified to conform to the presentation in 2003. |
| (b) | The rates earned and the rates paid on risk management derivatives are based on off-balance sheet notional amounts. The fair value of these instruments is included in other assets and other liabilities. |