Wachovia Corp New (WBPS) 8-K Results of Operations and Financial Condition

Exhibit (99)(a)

Press Release July 22, 2008

WACHOVIA DETAILS 2ND QUARTER LOSS; OUTLINES INITIATIVES TO PRESERVE AND

GENERATE CAPITAL, PROTECT STRONG LIQUIDITY AND REDUCE RISK

Actions Include Quarterly Common Stock Dividend Reduction to 5 Cents per Share

$8.9 Billion Net Loss Includes $6.1 Billion Noncash Goodwill Impairment and $4.2

Billion Credit Reserve Build; Strength Apparent in Underlying Results

CHARLOTTE, N.C. – Consistent with previously announced expectations, Wachovia today reported a net loss in the second quarter of 2008 of $8.9 billion, or a net loss of $4.20 per share, including a $6.1 billion noncash goodwill impairment charge in commercial-related subsegments reflecting declining market valuations and asset values. The goodwill impairment charge has no impact on Wachovia’s tangible capital levels, regulatory capital ratios or on liquidity.

Wachovia added $5.6 billion to its loan loss reserve to cover net charge-offs and increase the reserve by $4.2 billion.

Excluding goodwill impairment and other notable items that drove the quarter’s loss, Wachovia generated solid underlying growth on $7.5 billion in revenue. Revenue was driven by higher loans and deposits and strength in traditional banking fees, while strong fiduciary and asset management fees and brokerage commissions largely reflected the A.G. Edwards acquisition.

“These bottom-line results are disappointing and unacceptable,” said Lanty L. Smith, Wachovia’s board chairman, who served as interim chief executive officer beginning June 1. “While to some degree they reflect industry headwinds and weaker macroeconomic conditions, they also reflect performance for which we at Wachovia accept responsibility. Our company is facing up to these issues, is addressing the challenges head-on and has redirected near-term strategic priorities.”

Two immediate actions were announced: First, reducing the quarterly common stock dividend to five cents per share, which will conserve approximately $700 million of capital per quarter. The dividend is payable on September 15, 2008, to shareholders of record on August 29, 2008. The second immediate action is exiting the General Bank wholesale mortgage origination channel. Earlier the company ceased offering the negative amortization option for the Pick-a-Pay mortgage product and committed to work with customers to refinance existing Pick-a-Pay mortgages into conventional mortgage products. Approximately 1,000 Wachovia mortgage origination personnel are being redeployed in the company’s efforts to assist customers to refinance and restructure Pick-a-Pay mortgages. The objective is to assist customers in avoiding foreclosures and meaningfully reduce the company’s risks in the mortgage area.

Robert K. Steel, CEO and president said, “In the short term, the entire organization is focused on protecting, preserving and generating capital; reinforcing Wachovia’s strong liquidity position; and reducing risk.” Steel, who was named to his new post on July 9, further commented that, even as the company focuses on and addresses its credit-related challenges, Wachovia’s underlying businesses are performing well: “Wachovia has an exceptionally attractive franchise, footprint and set of businesses. Revenue in our general banking business grew 8 percent over last year and we maintained industry-leading customer satisfaction. The securities brokerage business continues its excellent performance, with increases in both the number and quality of brokers and with industry-leading margins. Our corporate and investment bank has reduced its exposure to further market disruption charges. We had a record quarter in our Wealth Management business.”

Wachovia outlined additional initiatives that are under way, ranging from reducing expense growth and capital expenditures, reducing earning assets, repositioning the certificate of deposit book and generating further growth in low-cost core deposits and other deposits. Also, the company is taking actions to reduce the number of credit-only commercial borrowers and to sell selected noncore assets.

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Steel summarized by saying: “Our balance sheet and liquidity position are strong, and we are committed to keeping them that way. The actions taken and initiatives under way are expected to generate or preserve more than $5 billion of capital. We ended the quarter with approximately $50 billion in regulatory capital and a tier 1 ratio of 8 percent, and we will be intensely focused on improving that level between now and the end of 2009.”

Steel said, “As we consider the company’s position, it is clearly prudent and necessary to further reduce our common dividend. While this is a difficult decision, it is the best course for our shareholders over the long term. I am confident of the commitment of the Wachovia team to manage successfully through this period as we continue to diligently serve our customers and communities. I am impressed by the work the Wachovia leadership group has undertaken, the clarity around the issues we face and the direction Wachovia is headed as we focus on being good stewards of the company.”

The second quarter 2008 net loss compared with earnings of $2.34 billion or $1.22 per share in the second quarter of 2007. Excluding goodwill impairment of $6.1 billion and net merger-related and restructuring expense of $128 million, results in the second quarter of 2008 were a net loss available to common stockholders of $2.67 billion, or a net loss of $1.27 per share. Results included the A.G. Edwards, Inc., acquisition from October 1, 2007.

Earnings Highlights

	Three Months Ended
	June 30, 2008					March 31, 2008				June 30, 2007
(In millions, except per share data)	Amount			EPS		Amount		EPS		Amount	EPS
Earnings
Net income (loss)	$	(8,662	)	(4.11	)	(664	)	(0.34	)	2,341	1.22
Dividends on preferred stock		(193	)	(0.09	)	(43	)	(0.02	)	—	—
Net income (loss) available to common stockholders	$	(8,855	)	(4.20	)	(707	)	(0.36	)	2,341	1.22
Net goodwill impairment		6,056		2.87		—		—		—	—
Net merger-related and restructuring expenses		128		0.06		123		0.06		20	0.01
Earnings (loss) excluding goodwill impairment, and merger-related and restructuring expenses	$	(2,671	)	(1.27	)	(584	)	(0.30	)	2,361	1.23
Financial ratios
Return on average common stockholders’ equity		(49.07	) %			(3.81	)			13.54
Net interest margin (a)		2.58	(d)			2.92				2.96
Fee and other income as % of total revenue (a)		42.15				36.62				48.58
Overhead efficiency ratio (a)		163.58	%			71.76				56.02
Capital adequacy (b)
Tier 1 capital ratio		8.0	%			7.4				7.5
Total capital ratio		12.7				12.1				11.5
Leverage ratio		6.6	%			6.2				6.2
Asset quality
Allowance for loan losses as % of nonaccrual and restructured loans		95	%			84				174
Allowance for loan losses as % of loans, net		2.20				1.37				0.79
Allowance for credit losses as % of loans, net (c)		2.24				1.41				0.83
Net charge-offs as % of average loans, net		1.10				0.66				0.14
Nonperforming assets as % of loans, net, foreclosed properties and loans held for sale		2.41	%			1.70				0.49

(a) Tax-equivalent.

(b) The second quarter of 2008 is based on estimates.

(c) The allowance for credit losses is the sum of the allowance for loan losses and the reserve for unfunded lending commitments.

(d) Includes the SILO charge of $975 million pre-tax; without that charge, the net interest margin would have been 3.15%.

The pre-tax loss stemmed from:

• The $6.1 billion in noncash goodwill impairment reflecting declining market valuations and the resulting effect on commercial, corporate lending and investment banking subsegments. The goodwill impairment charge has no impact on Wachovia’s tangible capital levels or

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WACHOVIA REPORTS 2ND QUARTER LOSS AMID TOUGH ENVIRONMENT/page 3

regulatory capital ratios, because goodwill is deducted when computing those ratios.

• A $5.6 billion loan loss provision, which increased reserves by $4.2 billion, including $3.3 billion for the payment option mortgage portfolio;

• A $975 million noncash charge announced previously related to the tax treatment of certain leasing transactions widely referred to as “sale in, lease out” or SILO transactions;

• $936 million in market disruption-related losses;

• $590 million in legal reserves primarily related to previously disclosed matters; and

• $391 million in losses related to planned discretionary securities sales.

Wachovia Corporation

	Three Months Ended
(In millions)	June 30, 2008			March 31, 2008		June 30, 2007
Net interest income(Tax-equivalent)	$	4,344		4,805		4,487
Fee and other income		3,165		2,777		4,240
Total revenue(Tax-equivalent)		7,509		7,582		8,727
Provision for credit losses		5,567		2,831		179
Noninterest expense		12,284		5,441		4,890
Income (loss) from continuing operations before income taxes (benefits)(Tax-equivalent)		(10,439	)	(845	)	3,519
Income taxes (benefits)(Tax-equivalent)		(1,777	)	(181	)	1,178
Net income (loss) available to common stockholders		(8,855	)	(707	)	2,341
Average loans, net		476,734		465,936		421,257
Average core deposits	$	390,670		394,513		378,496

Other key trends in the second quarter of 2008 compared with the second quarter of 2007 included:

• A decline in fee and other income due to net market disruption-related valuation losses, which overshadowed strength in traditional banking. Fiduciary and asset management fees and brokerage commissions reflected the A.G. Edwards acquisition.

• A net interest margin of 2.58 percent, or 3.15 percent excluding the effect of the SILO charge. The SILO charge diminished net interest income, offset by growth in average commercial loans, up 25 percent, and average consumer loans, up 6 percent, as well as solid core deposit growth, up 3 percent. Average loan growth included the impact of the first quarter 2008 transfer of $6.9 billion of commercial and consumer loans to the loan portfolio from held-for-sale as well as strength in commercial, commercial real estate and traditional conforming mortgage loans. Deposit growth was led by strength in IRAs and money market accounts.

• An increase in noninterest expense largely reflecting the impact of A.G. Edwards, as well as growth in credit-related sundry expense and legal reserves. A renewed expense reduction initiative is under way throughout the company.

• Provision for credit losses of $5.6 billion, which included a reserve build of $4.2 billion. The provision largely reflected current and anticipated severe deterioration in the residential housing market, particularly in specific markets in California and Florida. Net charge-offs were $1.3 billion, or an annualized 1.10 percent of average net loans. Total nonperforming assets including loans held for sale were $12.0 billion, or 2.41 percent of loans, foreclosed properties and loans held for sale, largely reflecting increases in consumer real estate-related nonperforming assets due to the effects of the weakened housing industry.

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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, goodwill impairment charges, other intangible amortization, excess provision and discontinued operations. Segment earnings are the basis on which Wachovia manages and allocates capital to its business segments. In accordance with Wachovia’s business segment methodology, goodwill impairment of $6.1 billion and provision expense in excess of charge-offs and other credit losses, which amounted to $4.2 billion in the second quarter of 2008, are not allocated to business segments.

Pages 14 and 15 include a reconciliation of segment results to Wachovia’s consolidated results of operations in accordance with GAAP.

General Bank Highlights

	Three Months Ended
(In millions)	June 30, 2008			March 31, 2008	June 30, 2007
Net interest income(Tax-equivalent)	$	3,671		3,445	3,372
Fee and other income		1,000		980	935
Total revenue(Tax-equivalent)		4,728		4,480	4,363
Provision for credit losses		919		569	154
Noninterest expense		2,050		2,038	1,922
Segment earnings	$	1,117		1,189	1,453
Cash overhead efficiency ratio(Tax-equivalent)		43.35	%	45.50	44.05
Average loans, net	$	319,574		311,556	291,607
Average core deposits		290,381		297,171	290,455
Economic capital, average	$	16,786		12,693	10,821

General Bank

The General Bank includes retail, small business and commercial customers. The second quarter of 2008 compared with the second quarter of 2007 included:

• Earnings of $1.1 billion, down $336 million, driven by rising credit costs and related expenses, primarily in the mortgage business, which overshadowed continued strong sales momentum elsewhere as reflected in total revenue of $4.7 billion, up 8 percent.

• Average loan growth of 10 percent, with double digit growth in wholesale and retail businesses. Mortgage lending through our largely branch-originated mortgage and home equity channels was up 6 percent, primarily reflecting a decline in prepayments, and home equity lending was up 5 percent. Auto loan originations rose 12 percent.

• Relatively stable average core deposits.

• Growth in net new retail checking accounts slowed, but still increased by 263,000 in the second quarter of 2008 compared with an increase of 314,000 in the second quarter of 2007.

• 305,000 new retail checking accounts were tied to the Way2Save campaign; this product launched in mid-January 2008.

• 7 percent growth in fee and other income, with strength in service charges, interchange income and mortgage banking fee income. Strong interchange income reflected a 14 percent increase in debit/credit card volume from the second quarter of 2007.

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• Noninterest expense up 7 percent due to growth in credit-related sundry expense and severance expense, as well as continued strategic investment in de novo branch activity and Western expansion. During the second quarter of 2008, 23 de novo branches were opened and 38 branches were consolidated. As a result of performance initiatives, operating leverage continued to improve, which enabled continued strategic investment.

• A $765 million increase in the provision for credit losses to $919 million, largely reflecting higher net charge-offs in the Pick-a-Pay portfolio.

Wealth Management Highlights

	Three Months Ended
(In millions)	June 30, 2008			March 31, 2008	June 30, 2007
Net interest income(Tax-equivalent)	$	202		182	182
Fee and other income		207		211	202
Total revenue(Tax-equivalent)		412		398	387
Provision for credit losses		8		5	2
Noninterest expense		253		246	244
Segment earnings	$	98		92	90
Cash overhead efficiency ratio(Tax-equivalent)		61.05	%	61.98	62.80
Average loans, net	$	23,151		22,365	21,056
Average core deposits		17,559		17,906	17,466
Economic capital, average	$	731		699	612

Wealth Management

Wealth Management includes private banking, personal trust, investment advisory services, charitable services, financial planning and insurance brokerage. The second quarter of 2008 compared with the second quarter of 2007 included:

• 9 percent earnings growth to $98 million on 6 percent revenue growth in challenging markets.

• 11 percent growth in net interest income on 10 percent loan growth and improved deposit spreads.

• 16 percent growth in fiduciary and asset management fees as a pricing initiative implemented in the third quarter of 2007 and other growth offset declines in equity valuations. Insurance commissions declined largely due to a soft market for insurance premiums and nonstrategic insurance account dispositions.

• A 4 percent increase in noninterest expense driven by continued investment in private banking and Western expansion.

• A 3 percent decline in assets under management to $77.3 billion largely due to market depreciation.

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Corporate and Investment Bank Highlights

	Three Months Ended
(In millions)	June 30, 2008			March 31, 2008		June 30, 2007
Net interest income(Tax-equivalent)	$	1,124		1,028		773
Fee and other income		657		(158	)	1,522
Total revenue(Tax-equivalent)		1,729		820		2,245
Provision for credit losses		438		197		(2	)
Noninterest expense		960		747		1,020
Segment earnings (loss)	$	209		(78	)	779
Cash overhead efficiency ratio(Tax-equivalent)		55.60	%	91.00		45.43
Average loans, net	$	106,642		101,046		76,744
Average core deposits		31,682		33,623		36,713
Economic capital, average	$	13,816		13,233		8,850

Corporate and Investment Bank

The Corporate and Investment Bank includes corporate lending, investment banking, and treasury and international trade finance. Unless otherwise noted, second quarter 2008 results are compared with the second quarter of 2007. These results included:

• Earnings of $209 million, down $570 million, due to continued net valuation losses related to disruption in the capital markets, and increased provision for credit losses.

• Investment bank origination fees down 4 percent year over year, although these fees rose 16 percent from the first quarter of 2008.

• Market share of 4.3 percent at June 30, 2008, up from 3.8 percent at June 30, 2007.

• Market valuation losses of $565 million, including a recovery on certain losses on leveraged finance commitments, compared with market valuation losses of $1.6 billion in the first quarter of 2008. Market valuation losses, net of applicable hedges, were:

• $238 million in subprime residential asset-backed collateralized debt obligations and other related exposures, compared with $339 million in first quarter 2008;

• $209 million in commercial mortgage structured products, compared with $521 million in first quarter 2008;

• $68 million in consumer mortgage structured products, compared with $251 million in first quarter 2008;

• $102 million gain in leveraged finance net of fees, compared with a net $309 million loss in first quarter 2008; and

• $152 million in non-subprime collateralized debt obligations and other structured products, compared with $144 million in first quarter 2008.

• A 45 percent increase in net interest income, which reflected 39 percent growth in average loans including the first quarter 2008 transfer into the loan portfolio at fair value of certain loans originally slated for disposition, as well as loan growth in the corporate lending and global financial institutions businesses.

• Principal investing revenue of $115 million, down from $300 million in the second quarter of 2007 on lower gains in the public and private direct investment portfolios.

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WACHOVIA REPORTS 2ND QUARTER LOSS AMID TOUGH ENVIRONMENT/page 7

• A 6 percent decline in noninterest expense primarily due to lower variable compensation and reduced headcount in investment banking.

• Provision of $438 million largely reflecting residential-related commercial real estate and other corporate lending losses.

Capital Management Highlights

	Three Months Ended
(In millions)	June 30, 2008			March 31, 2008	June 30, 2007
Net interest income(Tax-equivalent)	$	308		281	260
Fee and other income		1,995		2,191	1,536
Total revenue(Tax-equivalent)		2,295		2,462	1,785
Provision for credit losses		—		—	—
Noninterest expense		1,827		1,855	1,294
Segment earnings	$	297		386	312
Cash overhead efficiency ratio(Tax-equivalent)		79.61	%	75.34	72.47
Average loans, net	$	2,881		2,562	1,663
Average core deposits		48,647		43,084	31,221
Economic capital, average	$	2,105		2,144	1,348

Capital Management

Capital Management includes retail brokerage services and asset management. The second quarter of 2008 compared with the second quarter of 2007 included:

• Earnings of $297 million on 29 percent revenue growth, with net market disruption-related losses of $118 million, including $89 million of securities impairments relating to the liquidation of an Evergreen fund.

• An 18 percent increase in net interest income driven by retail brokerage deposit growth of $17.5 billion primarily due to the A.G. Edwards acquisition as well as solid growth since the acquisition, partially offset by spread compression.

• Continued solid momentum in retail brokerage managed account fees and the impact of the A.G. Edwards acquisition.

• 41 percent growth in noninterest expense largely due to the effect of A.G. Edwards, as well as higher legal expense.

Total assets under management of $245.9 billion at June 30, 2008, decreased 10 percent from December 31, 2007, driven by net outflows of $17.6 billion as well as $11.2 billion in lower market valuations.

***

Wachovia Corporation (NYSE:WB) is one of the nation’s largest diversified financial services companies, with assets of $812.4 billion and market capitalization of $33.5 billion at June 30, 2008. Wachovia provides a broad range of retail banking and brokerage, asset and wealth management, and corporate and investment banking products and services to customers through 3,300 retail financial centers in 21 states from Connecticut to Florida and west to Texas and California, and nationwide retail brokerage, mortgage lending and auto finance businesses. Globally, clients are served in selected corporate and institutional sectors and through more than 40 international offices. Our retail brokerage operations under the Wachovia Securities brand name manage more than $1.1 trillion in client assets through 14,600 financial advisors in 1,500 offices nationwide. Online banking is available at wachovia.com; online brokerage products and services at wachoviasec.com; and investment products and services at evergreeninvestments.com.

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Forward-Looking Statements

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 22, 2008.

Explanation of Wachovia’s Use of Certain Non-GAAP Financial Measures

In addition to results presented in accordance with GAAP, this news release includes certain non-GAAP financial measures, including those presented on page 2 and on page 11 under the captions “Earnings Excluding Merger-Related and Restructuring Expenses, Goodwill Impairment and Discontinued Operations” and “Earnings Excluding Merger-Related and Restructuring Expenses, Goodwill Impairment, Other Intangible Amortization and Discontinued Operations”, and which are reconciled to GAAP financial measures on pages 23 through 25. 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 the exclusion of merger-related and restructuring expenses, goodwill impairment and discontinued operations 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 the exclusion of this expense provides investors with consistent and meaningful comparisons to other financial services firms. Wachovia also believes 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. Wachovia operates one of the largest retail brokerage businesses in our industry, and we have presented an overhead efficiency ratio excluding these brokerage services, which management believes is useful to investors in comparing the performance of our banking business with other banking companies.

Although Wachovia believes the above non-GAAP financial measures enhance investors’ understanding of its business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP basis financial measures.

Earnings Conference Call and Supplemental Materials

Wachovia CEO Bob Steel and CFO Tom Wurtz will review Wachovia’s second quarter 2008 results in a conference call and audio web cast beginning at 10:00 a.m. Eastern Daylight Saving 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.

Web cast Instructions: To gain access to the web cast, which will be “listen-only,” go to Wachovia.com/investor and click on the link “Wachovia Second Quarter Earnings Audio Web cast.” In order to listen to the web cast, you will need to download either Real Player or Media Player.

Teleconference Instructions: The telephone number for the conference call is 888-357-9787 for U.S. callers or 706-679-7342 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: WB Investor.

Replay:Tuesday, July 22, by 1:00 p.m. EDT and continuing through 5 p.m. EDT Friday, October 17. Replay telephone number is 706-645-9291; access code: 49418191.

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-Brown at 704-383-8178.

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WACHOVIA CORPORATION AND SUBSIDIARIES

FINANCIAL TABLES

TABLE OF CONTENTS

	PAGE
Financial Highlights—Five Quarters Ended June 30, 2008	10
Other Financial Data—Five Quarters Ended June 30, 2008	11
Consolidated Statements of Income—Five Quarters Ended June 30, 2008	12
Consolidated Statements of Income—Six Months Ended June 30, 2008 and 2007	13
Business Segments—Three Months Ended June 30, 2008 and March 31, 2008	14
Business Segments—Three Months Ended June 30, 2007	15
Loans—On-Balance Sheet, and Managed and Servicing Portfolios—Five Quarters Ended June 30, 2008	16
Allowance for Credit Losses—Five Quarters Ended June 30, 2008	17
Nonperforming Assets—Five Quarters Ended June 30, 2008	18
Consolidated Balance Sheets—Five Quarters Ended June 30, 2008	19
Net Interest Income Summaries—Five Quarters Ended June 30, 2008	20 - 21
Net Interest Income Summaries—Six Months Ended June 30, 2008 and 2007	22
Reconciliation of Certain Non-GAAP Financial Measures—Five Quarters Ended June 30, 2008	23 - 25

PAGE 10

WACHOVIA CORPORATION AND SUBSIDIARIES

FINANCIAL HIGHLIGHTS

(Unaudited)

	2008					2007
(Dollars in millions, except per share data)	Second Quarter			First Quarter		Fourth Quarter		Third Quarter		Second Quarter
EARNINGS SUMMARY
Net interest income(GAAP)	$	4,290		4,752		4,630		4,551		4,449
Tax-equivalent adjustment		54		53		44		33		38
Net interest income(Tax-equivalent)		4,344		4,805		4,674		4,584		4,487
Fee and other income		3,165		2,777		2,744		2,933		4,240
Total revenue(Tax-equivalent)		7,509		7,582		7,418		7,517		8,727
Provision for credit losses		5,567		2,831		1,497		408		179
Other noninterest expense		5,876		5,097		5,488		4,397		4,755
Merger-related and restructuring expenses		251		241		187		36		32
Goodwill impairment		6,060		—		—		—		—
Other intangible amortization		97		103		111		92		103
Total noninterest expense		12,284		5,441		5,786		4,525		4,890
Minority interest in income of consolidated subsidiaries		97		155		107		189		139
Income (loss) from continuing operations before income taxes (benefits)(Tax-equivalent)		(10,439	)	(845	)	28		2,395		3,519
Income taxes (benefits)		(1,831	)	(234	)	(209	)	656		1,140
Tax-equivalent adjustment		54		53		44		33		38
Income (loss) from continuing operations		(8,662	)	(664	)	193		1,706		2,341
Discontinued operations, net of income taxes		—		—		(142	)	(88	)	—
Net income (loss)		(8,662	)	(664	)	51		1,618		2,341
Dividends on preferred stock		193		43		—		—		—
Net income (loss) available to common stockholders	$	(8,855	)	(707	)	51		1,618		2,341
Diluted earnings per common share (a)	$	(4.20	)	(0.36	)	0.03		0.85		1.22
Return on average common stockholders’ equity		(49.07	)%	(3.81	)	0.28		9.19		13.54
Return on average assets		(4.37	)	(0.34	)	0.03		0.88		1.33
Overhead efficiency ratio		163.58	%	71.76		78.00		60.20		56.02
Operating leverage	$	(6,916	)	509		(1,359	)	(847	)	189
ASSET QUALITY
Allowance for loan losses as % of loans, net		2.20	%	1.37		0.98		0.78		0.79
Allowance for loan losses as % of nonperforming assets		90		78		84		115		157
Allowance for credit losses as % of loans, net		2.24		1.41		1.02		0.82		0.83
Net charge-offs as % of average loans, net		1.10		0.66		0.41		0.19		0.14
Nonperforming assets as % of loans, net, foreclosed properties and loans held for sale		2.41	%	1.70		1.14		0.66		0.49
CAPITAL ADEQUACY (b)
Tier I capital ratio		8.0	%	7.4		7.4		7.1		7.5
Total capital ratio		12.7		12.1		11.8		10.8		11.5
Leverage ratio		6.6	%	6.2		6.1		6.1		6.2
OTHER DATA
Average basic common shares(In millions)		2,111		1,963		1,959		1,885		1,891
Average diluted common shares(In millions)		2,119		1,977		1,983		1,910		1,919
Actual common shares (In millions)(c)		2,159		1,992		1,980		1,901		1,903
Dividends paid per common share	$	0.38		0.64		0.64		0.64		0.56
Dividend payout ratio on common shares		(8.93	) %	(177.78	)	2133.33		75.29		45.90
Book value per common share (c)	$	30.37		36.24		37.66		36.90		36.40
Common stock price		15.53		27.00		38.03		50.15		51.25
Market capitalization (c)	$	33,527		53,782		75,302		95,326		97,530
Common stock price to book value (c)		51	%	75		101		136		141
FTE employees		119,952		120,378		121,890		109,724		110,493
Total financial centers/brokerage offices		4,820		4,850		4,894		4,167		4,135
ATMs		5,277		5,308		5,139		5,123		5,099

(a) Calculated using average basic common shares in 2008.

(b) The second quarter of 2008 is based on estimates.

(c) Includes restricted stock for which the holder receives dividends and has full voting rights.

PAGE 11

WACHOVIA CORPORATION AND SUBSIDIARIES

OTHER FINANCIAL DATA

(Unaudited)

	2008					2007
(In millions)	Second Quarter			First Quarter		Fourth Quarter		Third Quarter		Second Quarter
EARNINGS EXCLUDING MERGER-RELATED AND RESTRUCTURING EXPENSES, GOODWILL IMPAIRMENT AND DISCONTINUED OPERATIONS (a) (b)
Return on average common stockholders’ equity		(14.56	)%	(3.14	)	1.62		9.81		13.66
Return on average assets		(1.25	)	(0.28	)	0.16		0.94		1.34
Overhead efficiency ratio		79.55		68.58		75.48		59.73		55.65
Overhead efficiency ratio excluding brokerage		80.33	%	65.48		74.54		56.82		52.04
Operating leverage	$	(847	)	563		(1,208	)	(843	)	210
EARNINGS EXCLUDING MERGER-RELATED AND RESTRUCTURING EXPENSES, GOODWILL IMPAIRMENT, OTHER INTANGIBLE AMORTIZATION AND DISCONTINUED OPERATIONS (a) (b) (c)
Dividend payout ratio on common shares		(30.49	)%	(246.15	)	355.56		68.09		44.09
Return on average tangible common stockholders’ equity		(36.42	)	(7.07	)	5.05		23.88		33.57
Return on average tangible assets		(1.29	)	(0.26	)	0.20		1.03		1.47
Overhead efficiency ratio		78.26		67.22		73.97		58.51		54.47
Overhead efficiency ratio excluding brokerage		78.55	%	63.59		72.43		55.32		50.61
Operating leverage	$	(853	)	554		(1,187	)	(855	)	197
OTHER FINANCIAL DATA
Net interest margin		2.58	%	2.92		2.88		2.92		2.96
Fee and other income as % of total revenue		42.15		36.62		36.99		39.02		48.58
Effective income tax rate (d)		17.46		26.02		122.05		27.33		32.78
Effective tax rate (Tax-equivalent) (d) (e)		17.03	%	21.38		127.17		28.38		33.51
AVERAGE BALANCE SHEET DATA
Commercial loans, net	$	206,204		198,578		188,164		174,672		165,512
Consumer loans, net		270,530		267,358		261,641		255,129		255,745
Loans, net		476,734		465,936		449,805		429,801		421,257
Earning assets		675,089		659,033		650,140		628,773		605,978
Total assets		796,437		783,593		763,487		729,004		704,773
Core deposits		390,670		394,513		390,043		379,009		378,496
Total deposits		435,548		443,353		437,566		416,107		408,418
Interest-bearing liabilities		619,044		611,099		599,130		574,399		547,669
Stockholders’ equity	$	81,740		78,747		73,986		69,857		69,317
PERIOD-END BALANCE SHEET DATA
Commercial loans, net	$	216,620		211,700		198,566		189,545		175,369
Consumer loans, net		271,578		268,782		263,388		259,661		253,751
Loans, net		488,198		480,482		461,954		449,206		429,120
Goodwill and other intangible assets
Goodwill		36,993		43,068		43,122		38,848		38,766
Deposit base		531		573		619		670		727
Customer relationships		1,321		1,375		1,410		620		651
Tradename		90		90		90		90		90
Total assets		812,433		808,575		782,896		754,168		715,428
Core deposits		400,387		398,562		397,405		377,865		378,188
Total deposits		447,790		444,964		449,129		421,937		410,030
Stockholders’ equity	$	75,379		77,992		76,872		70,140		69,266

(a) These financial measures are calculated by excluding from GAAP net income (loss) presented on page 10, $128 million, $123 million, $108 million, $22 million and $20 million in the second and first quarters of 2008 and the fourth, third and second quarters of 2007, respectively, of after-tax net merger-related and restructuring expenses, $6.1 billion in the second quarter of 2008 of after-tax goodwill impairment, and $142 million and $88 million after tax in the fourth and third quarters of 2007, respectively, of discontinued operations.

(b) See page 10 for the most directly comparable GAAP financial measure and pages 23 through 25 for a more detailed reconciliation.

(c) These financial measures are calculated by excluding from GAAP net income (loss) presented on page 10, $66 million, $64 million, $65 million, $59 million and $66 million in the second and first quarters of 2008 and the fourth, third and second quarters of 2007, respectively, of deposit base and other intangible amortization.

(d) The fourth and third quarters of 2007 include taxes on discontinued operations.

(e) The tax-equivalent tax rate applies to fully tax-equivalized revenues.

PAGE 12

WACHOVIA CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	2008					2007
(In millions, except per share data)	Second Quarter			First Quarter		Fourth Quarter		Third Quarter		Second Quarter
INTEREST INCOME
Interest and fees on loans	$	6,187		7,577		7,980		7,937		7,723
Interest and dividends on securities		1,530		1,496		1,616		1,529		1,474
Trading account interest		522		571		557		566		506
Other interest income		407		535		757		799		647
Total interest income		8,646		10,179		10,910		10,831		10,350
INTEREST EXPENSE
Interest on deposits		2,176		2,941		3,433		3,334		3,180
Interest on short-term borrowings		418		523		673		801		706
Interest on long-term debt		1,762		1,963		2,174		2,145		2,015
Total interest expense		4,356		5,427		6,280		6,280		5,901
Net interest income		4,290		4,752		4,630		4,551		4,449
Provision for credit losses		5,567		2,831		1,497		408		179
Net interest income after provision for credit losses		(1,277	)	1,921		3,133		4,143		4,270
FEE AND OTHER INCOME
Service charges		709		676		716		689		667
Other banking fees		518		498		497		471		449
Commissions		910		914		970		600		649
Fiduciary and asset management fees		1,355		1,439		1,436		1,029		1,015
Advisory, underwriting and other investment banking fees		280		261		249		393		454
Trading account profits (losses)		(510	)	(308	)	(524	)	(301	)	195
Principal investing		136		446		41		372		298
Securities gains (losses)		(808	)	(205	)	(320	)	(34	)	23
Other income		575		(944	)	(321	)	(286	)	490
Total fee and other income		3,165		2,777		2,744		2,933		4,240
NONINTEREST EXPENSE
Salaries and employee benefits		3,435		3,260		3,468		2,628		3,122
Occupancy		377		379		375		325		331
Equipment		317		323		334		283		309
Marketing		95		97		80		74		78
Communications and supplies		184		186		191		176		178
Professional and consulting fees		218		196		271		194		205
Goodwill impairment		6,060		—		—		—		—
Other intangible amortization		97		103		111		92		103
Merger-related and restructuring expenses		251		241		187		36		32
Sundry expense		1,250		656		769		717		532
Total noninterest expense		12,284		5,441		5,786		4,525		4,890
Minority interest in income of consolidated subsidiaries		97		155		107		189		139
Income (loss) from continuing operations before income taxes (benefits)		(10,493	)	(898	)	(16	)	2,362		3,481
Income taxes (benefits)		(1,831	)	(234	)	(209	)	656		1,140
Income (loss) from continuing operations		(8,662	)	(664	)	193		1,706		2,341
Discontinued operations, net of income taxes		—		—		(142	)	(88	)	—
Net income (loss)		(8,662	)	(664	)	51		1,618		2,341
Dividends on preferred stock		193		43		—		—		—
Net income (loss) available to common stockholders	$	(8,855	)	(707	)	51		1,618		2,341
PER COMMON SHARE DATA (after preferred stock dividends)
Basic earnings
Income (loss) from continuing operations	$	(4.20	)	(0.36	)	0.10		0.91		1.24
Net income (loss) available to common stockholders		(4.20	)	(0.36	)	0.03		0.86		1.24
Diluted earnings (a)
Income (loss) from continuing operations		(4.20	)	(0.36	)	0.10		0.90		1.22
Net income (loss) available to common stockholders		(4.20	)	(0.36	)	0.03		0.85		1.22
Cash dividends	$	0.38		0.64		0.64		0.64		0.56
AVERAGE COMMON SHARES
Basic		2,111		1,963		1,959		1,885		1,891
Diluted		2,119		1,977		1,983		1,910		1,919

(a) Calculated using average basic common shares in 2008.

PAGE 13

WACHOVIA CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Six Months Ended June 30,
(In millions, except per share data)	2008			2007
INTEREST INCOME
Interest and fees on loans	$	13,764		15,341
Interest and dividends on securities		3,026		2,952
Trading account interest		1,093		939
Other interest income		942		1,258
Total interest income		18,825		20,490
INTEREST EXPENSE
Interest on deposits		5,117		6,194
Interest on short-term borrowings		941		1,375
Interest on long-term debt		3,725		3,972
Total interest expense		9,783		11,541
Net interest income		9,042		8,949
Provision for credit losses		8,398		356
Net interest income after provision for credit losses		644		8,593
FEE AND OTHER INCOME
Service charges		1,385		1,281
Other banking fees		1,016		865
Commissions		1,824		1,308
Fiduciary and asset management fees		2,794		1,968
Advisory, underwriting and other investment banking fees		541		861
Trading account profits (losses)		(818	)	323
Principal investing		582		346
Securities gains (losses)		(1,013	)	76
Other income		(369	)	946
Total fee and other income		5,942		7,974
NONINTEREST EXPENSE
Salaries and employee benefits		6,695		6,094
Occupancy		756		643
Equipment		640		616
Marketing		192		140
Communications and supplies		370		351
Professional and consulting fees		414		382
Goodwill impairment		6,060		—
Other intangible amortization		200		221
Merger-related and restructuring expenses		492		42
Sundry expense		1,906		1,022
Total noninterest expense		17,725		9,511
Minority interest in income of consolidated subsidiaries		252		275
Income (loss) before income taxes		(11,391	)	6,781
Income taxes (benefits)		(2,065	)	2,138
Net income (loss)		(9,326	)	4,643
Dividends on preferred stock		236		—
Net income (loss) available to common stockholders	$	(9,562	)	4,643
PER COMMON SHARE DATA (after preferred stock dividends)
Basic earnings
Net income (loss) available to common stockholders	$	(4.69	)	2.45
Diluted earnings (a)
Net income (loss) available to common stockholders		(4.69	)	2.42
Cash dividends	$	1.02		1.12
AVERAGE COMMON SHARES
Basic		2,037		1,892
Diluted		2,048		1,922

(a) Calculated using average basic common shares in 2008.

PAGE 14

WACHOVIA CORPORATION AND SUBSIDIARIES

BUSINESS SEGMENTS

(Unaudited)

	Three Months Ended June 30, 2008
(In millions)	General Bank		Wealth Management	Corporate and Investment Bank		Capital Management		Parent		Goodwill Impairment, Net Merger- Related and Restructuring Expenses (b)		Total
CONSOLIDATED
Net interest income (a)	$	3,671	202	1,124		308		(961	)	(54	)	4,290
Fee and other income		1,000	207	657		1,995		(694	)	—		3,165
Intersegment revenue		57	3	(52	)	(8	)	—		—		—
Total revenue (a)		4,728	412	1,729		2,295		(1,655	)	(54	)	7,455
Provision for credit losses		919	8	438		—		4,202		—		5,567
Noninterest expense		2,050	253	960		1,827		883		6,311		12,284
Minority interest		—	—	—		—		141		(44	)	97
Income taxes (benefits)		632	53	103		170		(2,706	)	(83	)	(1,831	)
Tax-equivalent adjustment		10	—	19		1		24		(54	)	—
Net income (loss)		1,117	98	209		297		(4,199	)	(6,184	)	(8,662	)
Dividends on preferred stock		—	—	—		—		193		—		193
Net income (loss) available to common stockholders	$	1,117	98	209		297		(4,392	)	(6,184	)	(8,855	)
	Three Months Ended March 31, 2008
(In millions)	General Bank		Wealth Management	Corporate and Investment Bank		Capital Management		Parent		Net Merger- Related and Restructuring Expenses (b)		Total
CONSOLIDATED
Net interest income (a)	$	3,445	182	1,028		281		(131	)	(53	)	4,752
Fee and other income		980	211	(158	)	2,191		(447	)	—		2,777
Intersegment revenue		55	5	(50	)	(10	)	—		—		—
Total revenue (a)		4,480	398	820		2,462		(578	)	(53	)	7,529
Provision for credit losses		569	5	197		—		2,060		—		2,831
Noninterest expense		2,038	246	747		1,855		314		241		5,441
Minority interest		—	—	—		—		198		(43	)	155
Income taxes (benefits)		673	55	(67	)	220		(1,083	)	(32	)	(234	)
Tax-equivalent adjustment		11	—	21		1		20		(53	)	—
Net income (loss)		1,189	92	(78	)	386		(2,087	)	(166	)	(664	)
Dividends on preferred stock		—	—	—		—		43		—		43
Net income (loss) available to common stockholders	$	1,189	92	(78	)	386		(2,130	)	(166	)	(707	)

PAGE 15

WACHOVIA CORPORATION AND SUBSIDIARIES

BUSINESS SEGMENTS

(Unaudited)

	Three Months Ended June 30, 2007
(In millions)	General Bank		Wealth Management	Corporate and Investment Bank		Capital Management		Parent		Net Merger- Related and Restructuring Expenses (b)		Total
CONSOLIDATED
Net interest income (a)	$	3,372	182	773		260		(100	)	(38	)	4,449
Fee and other income		935	202	1,522		1,536		45		—		4,240
Intersegment revenue		56	3	(50	)	(11	)	2		—		—
Total revenue (a)		4,363	387	2,245		1,785		(53	)	(38	)	8,689
Provision for credit losses		154	2	(2	)	—		25		—		179
Noninterest expense		1,922	244	1,020		1,294		378		32		4,890
Minority interest		—	—	—		—		139		—		139
Income taxes (benefits)		824	51	437		179		(339	)	(12	)	1,140
Tax-equivalent adjustment		10	—	11		—		17		(38	)	—
Net income (loss)	$	1,453	90	779		312		(273	)	(20	)	2,341

(a) Tax-equivalent.

(b) The tax-equivalent amounts are eliminated herein in order for “Total” amounts to agree with amounts appearing in the Consolidated Statements of Income.

PAGE 16

WACHOVIA CORPORATION AND SUBSIDIARIES

LOANS—ON-BALANCE SHEET, AND MANAGED AND SERVICING PORTFOLIOS

(Unaudited)

	2008					2007
(In millions)	Second Quarter			First Quarter		Fourth Quarter		Third Quarter		Second Quarter
ON-BALANCE SHEET LOAN PORTFOLIO
COMMERCIAL
Commercial, financial and agricultural	$	122,628		119,193		112,509		109,269		102,397
Real estate—construction and other		18,629		18,597		18,543		18,167		17,449
Real estate—mortgage		27,191		26,370		23,846		21,514		20,448
Lease financing		24,605		23,637		23,913		23,966		24,083
Foreign		35,168		33,616		29,540		26,471		20,959
Total commercial		228,221		221,413		208,351		199,387		185,336
CONSUMER
Real estate secured		230,520		230,197		227,719		225,355		220,293
Student loans		9,945		9,324		8,149		7,742		6,757
Installment loans		29,261		27,437		25,635		24,763		25,017
Total consumer		269,726		266,958		261,503		257,860		252,067
Total loans		497,947		488,371		469,854		457,247		437,403
Unearned income		(9,749	)	(7,889	)	(7,900	)	(8,041	)	(8,283	)
Loans, net(On-balance sheet)	$	488,198		480,482		461,954		449,206		429,120
MANAGED PORTFOLIO (a) (b)
COMMERCIAL
On-balance sheet loan portfolio	$	228,221		221,413		208,351		199,387		185,336
Securitized loans—off-balance sheet		105		120		131		142		170
Loans held for sale		2,224		3,342		9,414		13,905		11,573
Total commercial		230,550		224,875		217,896		213,434		197,079
CONSUMER
Real estate secured
On-balance sheet loan portfolio		230,520		230,197		227,719		225,355		220,293
Securitized loans—off-balance sheet		6,337		6,845		7,230		7,625		8,112
Securitized loans included in securities		14,918		11,683		10,755		5,963		6,091
Loans held for sale		3,415		5,960		4,816		3,583		4,079
Total real estate secured		255,190		254,685		250,520		242,526		238,575
Student
On-balance sheet loan portfolio		9,945		9,324		8,149		7,742		6,757
Securitized loans—off-balance sheet		2,721		2,772		2,811		2,856		2,905
Securitized loans included in securities		52		52		52		52		52
Loans held for sale		—		—		—		1,968		2,046
Total student		12,718		12,148		11,012		12,618		11,760
Installment
On-balance sheet loan portfolio		29,261		27,437		25,635		24,763		25,017
Securitized loans—off-balance sheet		1,630		1,968		2,263		2,572		3,105
Securitized loans included in securities		28		39		47		55		116
Loans held for sale		2,791		2,127		2,542		1,975		35
Total installment		33,710		31,571		30,487		29,365		28,273
Total consumer		301,618		298,404		292,019		284,509		278,608
Total managed portfolio	$	532,168		523,279		509,915		497,943		475,687
SERVICING PORTFOLIO (b) (c)
Commercial	$	351,277		354,624		353,464		337,721		298,374
Consumer	$	29,100		27,415		27,523		28,015		26,341

(a) The managed portfolio includes the on-balance sheet loan portfolio, loans securitized for which the retained interests are classified in securities on-balance sheet, loans held for sale on-balance sheet and the off-balance sheet portfolio of securitized loans sold, where we service the loans.

(b) Certain amounts presented in periods prior to the second quarter of 2008 have been reclassified to conform to the presentation in the second quarter of 2008.

(c) 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 17

WACHOVIA CORPORATION AND SUBSIDIARIES

ALLOWANCE FOR CREDIT LOSSES

(Unaudited)

	2008					2007
(In millions)	Second Quarter			First Quarter		Fourth Quarter		Third Quarter		Second Quarter
ALLOWANCE FOR CREDIT LOSSES (a)
Balance, beginning of period	$	6,767		4,717		3,691		3,552		3,533
Provision for credit losses		5,504		2,834		1,467		381		168
Provision for credit losses relating to loans transferred to loans held for sale or sold		51		7		6		3		4
Provision for credit losses for unfunded lending commitments		12		(10	)	24		24		7
LOAN LOSSES
Commercial, financial and agricultural		(254	)	(171	)	(67	)	(41	)	(39	)
Commercial real estate—construction and mortgage		(216	)	(81	)	(117	)	(5	)	(4	)
Total commercial		(470	)	(252	)	(184	)	(46	)	(43	)
Real estate secured		(700	)	(351	)	(156	)	(59	)	(40	)
Student loans		(3	)	(3	)	(4	)	(5	)	(2	)
Installment and other loans (b)		(230	)	(242	)	(225	)	(168	)	(138	)
Total consumer		(933	)	(596	)	(385	)	(232	)	(180	)
Total loan losses		(1,403	)	(848	)	(569	)	(278	)	(223	)
LOAN RECOVERIES
Commercial, financial and agricultural		15		14		22		9		15
Commercial real estate—construction and mortgage		—		1		—		3		—
Total commercial		15		15		22		12		15
Real estate secured		18		10		9		12		11
Student loans		1		1		2		3		—
Installment and other loans (b)		60		57		75		45		47
Total consumer		79		68		86		60		58
Total loan recoveries		94		83		108		72		73
Net charge-offs		(1,309	)	(765	)	(461	)	(206	)	(150	)
Allowance relating to loans acquired, transferred to loans held for sale or sold		(69	)	(16	)	(10	)	(63	)	(10	)
Balance, end of period	$	10,956		6,767		4,717		3,691		3,552
ALLOWANCE FOR CREDIT LOSSES
Allowance for loan losses	$	10,744		6,567		4,507		3,505		3,390
Reserve for unfunded lending commitments		212		200		210		186		162
Total allowance for credit losses	$	10,956		6,767		4,717		3,691		3,552
ALLOWANCE FOR LOAN LOSSES
as % of loans, net		2.20	%	1.37		0.98		0.78		0.79
as % of nonaccrual and restructured loans (c)		95		84		90		129		174
as % of nonperforming assets (c)		90		78		84		115		157
ALLOWANCE FOR CREDIT LOSSES
as % of loans, net		2.24	%	1.41		1.02		0.82		0.83
NET CHARGE-OFFS AS % OF AVERAGE LOANS, NET (d)
Commercial, financial and agricultural		0.60	%	0.41		0.12		0.10		0.07
Commercial real estate—construction and mortgage		1.89		0.73		1.12		0.02		0.04
Total commercial		0.88		0.48		0.34		0.08		0.07
Real estate secured		1.18		0.59		0.26		0.08		0.05
Student loans		0.07		0.08		0.10		0.14		0.07
Installment and other loans (b)		2.36		2.76		2.35		1.99		1.47
Total consumer		1.26		0.79		0.46		0.27		0.19
Total as % of average loans, net		1.10	%	0.66		0.41		0.19		0.14
CONSUMER REAL ESTATE SECURED NET CHARGE-OFFS
First lien	$	(592	)	(291	)	(122	)	(32	)	(17	)
Second lien		(90	)	(50	)	(25	)	(15	)	(12	)
Total consumer real estate secured net charge-offs	$	(682	)	(341	)	(147	)	(47	)	(29	)

(a) The allowance for credit losses is the sum of the allowance for loan losses and the reserve for unfunded lending commitments.

(b) Principally auto loans.

(c) These ratios do not include nonperforming assets included in loans held for sale.

(d) Annualized.

PAGE 18

WACHOVIA CORPORATION AND SUBSIDIARIES

NONPERFORMING ASSETS

(Unaudited)

	2008				2007
(In millions)	Second Quarter			First Quarter	Fourth Quarter	Third Quarter	Second Quarter
NONPERFORMING ASSETS
Nonaccrual loans
Commercial
Commercial, financial and agricultural	$	1,229		908	602	354	318
Commercial real estate - construction and mortgage		2,203		1,750	1,059	289	161
Total commercial		3,432		2,658	1,661	643	479
Consumer
Real estate secured
First lien		7,430		5,015	3,234	1,986	1,380
Second lien		147		75	58	41	44
Installment and other loans (a)		40		40	42	45	42
Total consumer		7,617		5,130	3,334	2,072	1,466
Total nonaccrual loans		11,049		7,788	4,995	2,715	1,945
Troubled debt restructurings (b)		248		48	—	—	—
Foreclosed properties		631		530	389	334	207
Total nonperforming assets	$	11,928		8,366	5,384	3,049	2,152
as % of loans, net, and foreclosed properties (c)		2.44	%	1.74	1.16	0.68	0.50
Nonperforming assets included in loans held for sale
Commercial	$	56		—	—	—	—
Consumer		7		5	62	50	37
Total nonaccrual loans		63		5	62	50	37
Foreclosed properties		—		—	—	9	5
Total nonperforming assets included in loans held for sale		63		5	62	59	42
Nonperforming assets included in loans and in loans held for sale	$	11,991		8,371	5,446	3,108	2,194
as % of loans, net, foreclosed properties and loans held for sale (d)		2.41	%	1.70	1.14	0.66	0.49
PAST DUE LOANS 90 DAYS AND OVER, AND NONACCRUAL LOANS (c)
Accruing loans past due 90 days and over	$	1,181		866	708	590	562
Nonaccrual loans		11,049		7,788	4,995	2,715	1,945
Total past due loans 90 days and over, and nonaccrual loans	$	12,230		8,654	5,703	3,305	2,507
Commercial as % of loans, net		1.73	%	1.31	0.89	0.38	0.31
Consumer as % of loans, net		3.12	%	2.19	1.49	1.00	0.78

(a) Principally auto loans; nonaccrual status does not apply to student loans.

(b) Troubled debt restructurings were not significant prior to the first quarter of 2008.

(c) These ratios do not include nonperforming assets included in loans held for sale.

(d) These ratios reflect nonperforming loans included in loans held for sale. Loans held for sale 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 19

WACHOVIA CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	2008					2007
(In millions, except per share data)	Second Quarter			First Quarter		Fourth Quarter		Third Quarter		Second Quarter
ASSETS
Cash and due from banks	$	15,127		14,703		15,124		12,681		12,065
Interest-bearing bank balances		10,289		3,236		3,057		4,449		2,726
Federal funds sold and securities purchased under resale agreements		21,923		10,644		15,449		11,995		11,511
Total cash and cash equivalents		47,339		28,583		33,630		29,125		26,302
Trading account assets		62,589		72,592		55,882		54,835		51,540
Securities		113,461		114,183		115,037		111,827		106,184
Loans, net of unearned income		488,198		480,482		461,954		449,206		429,120
Allowance for loan losses		(10,744	)	(6,567	)	(4,507	)	(3,505	)	(3,390	)
Loans, net		477,454		473,915		457,447		445,701		425,730
Loans held for sale		8,430		11,429		16,772		21,431		17,733
Premises and equipment		6,667		6,733		6,605		6,002		6,080
Due from customers on acceptances		1,302		1,109		1,418		1,295		831
Goodwill		36,993		43,068		43,122		38,848		38,766
Other intangible assets		1,942		2,038		2,119		1,380		1,468
Other assets		56,256		54,925		50,864		43,724		40,794
Total assets	$	812,433		808,575		782,896		754,168		715,428
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits
Noninterest-bearing deposits		63,393		60,951		60,893		56,825		62,112
Interest-bearing deposits		384,397		384,013		388,236		365,112		347,918
Total deposits		447,790		444,964		449,129		421,937		410,030
Short-term borrowings		55,448		57,857		50,393		62,714		52,715
Bank acceptances outstanding		1,307		1,118		1,424		1,303		840
Trading account liabilities		26,305		28,887		21,585		17,771		19,319
Other liabilities		18,656		19,036		19,151		18,424		18,080
Long-term debt		184,401		175,653		161,007		158,584		142,047
Total liabilities		733,907		727,515		702,689		680,733		643,031
Minority interest in net assets of consolidated subsidiaries		3,147		3,068		3,335		3,295		3,131
STOCKHOLDERS’ EQUITY
Preferred stock, Class A, 40 million shares, no par value; 10 million shares, no par value; none issued		—		—		—		—		—
Dividend Equalization Preferred shares, no par value, 97 million shares issued and outstanding at June 30, 2008		—		—		—		—		—
Non-Cumulative Perpetual Class A Preferred Stock, Series I, $100,000 liquidation preference per share, 25,010 shares authorized		—		—		—		—		—
Non-Cumulative Perpetual Class A Preferred Stock, Series J, $1,000 liquidation preference per share, 92 million depositary shares issued and outstanding at June 30, 2008		2,300		2,300		2,300		—		—
Non-Cumulative Perpetual Class A Preferred Stock, Series K, $1,000 liquidation preference per share, 3.5 million shares issued and outstanding at June 30, 2008		3,500		3,500		—		—		—
Non-Cumulative Perpetual Convertible Class A Preferred Stock, Series L, $1,000 liquidation preference per share, 4.025 million shares issued and outstanding at June 30, 2008		4,025		—		—		—		—
Common stock, $3.33-1/3 par value, authorized 3 billion shares, outstanding 2.136 billion shares at June 30, 2008		7,121		6,551		6,534		6,283		6,289
Paid-in capital		59,797		56,367		56,149		51,938		51,905
Retained earnings		1,786		11,449		13,456		14,670		14,335
Accumulated other comprehensive income, net		(3,150	)	(2,175	)	(1,567	)	(2,751	)	(3,263	)
Total stockholders’ equity		75,379		77,992		76,872		70,140		69,266
Total liabilities and stockholders’ equity	$	812,433		808,575		782,896		754,168		715,428

PAGE 20

WACHOVIA CORPORATION AND SUBSIDIARIES

NET INTEREST INCOME SUMMARIES

(Unaudited)

	SECOND QUARTER 2008							FIRST QUARTER 2008
(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	$	4,980		39		3.11	%	$	4,253		51	4.85	%
Federal funds sold and securities purchased under resale agreements		13,075		81		2.51			11,865		103	3.49
Trading account assets		43,575		541		4.97			44,655		589	5.28
Securities		116,504		1,603		5.51			110,401		1,545	5.60
Loans
Commercial
Commercial, financial and agricultural		120,693		1,493		4.98			115,377		1,671	5.82
Real estate—construction and other		18,849		204		4.35			18,634		251	5.42
Real estate—mortgage		26,730		338		5.08			25,291		374	5.95
Lease financing (a)		6,713		(857	)	(51.02	)		7,167		140	7.79
Foreign		33,219		360		4.34			32,109		389	4.86
Total commercial		206,204		1,538		3.01			198,578		2,825	5.72
Consumer
Real estate secured		231,754		3,715		6.42			231,392		3,926	6.79
Student loans		9,887		108		4.41			9,155		113	4.96
Installment loans		28,889		686		9.55			26,811		659	9.88
Total consumer		270,530		4,509		6.68			267,358		4,698	7.04
Total loans		476,734		6,047		5.09			465,936		7,523	6.48
Loans held for sale		9,141		141		6.17			11,592		223	7.71
Other earning assets		11,080		136		4.94			10,331		146	5.69
Total earning assets excluding derivatives		675,089		8,588		5.10			659,033		10,180	6.19
Risk management derivatives (b)		—		112		0.07			—		52	0.04
Total earning assets including derivatives		675,089		8,700		5.17			659,033		10,232	6.23
Cash and due from banks		11,472							11,645
Other assets		109,876							112,915
Total assets	$	796,437						$	783,593
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest-bearing deposits
Savings and NOW accounts		86,317		137		0.64			86,452		236	1.10
Money market accounts		132,792		504		1.53			128,074		747	2.34
Other consumer time		113,579		1,145		4.05			123,655		1,437	4.68
Foreign		25,913		191		2.97			26,197		231	3.55
Other time		18,965		181		3.83			22,643		265	4.71
Total interest-bearing deposits		377,566		2,158		2.30			387,021		2,916	3.03
Federal funds purchased and securities sold under repurchase      agreements		43,288		274		2.54			35,956		308	3.45
Commercial paper		5,186		20		1.61			5,509		38	2.74
Securities sold short		6,243		53		3.42			6,919		62	3.63
Other short-term borrowings		9,288		33		1.34			10,154		45	1.77
Long-term debt		177,473		1,737		3.93			165,540		1,961	4.75
Total interest-bearing liabilities excluding derivatives		619,044		4,275		2.77			611,099		5,330	3.51
Risk management derivatives (b)		—		81		0.06			—		97	0.06
Total interest-bearing liabilities including derivatives		619,044		4,356		2.83			611,099		5,427	3.57
Noninterest-bearing deposits		57,982							56,332
Other liabilities		37,671							37,415
Stockholders’ equity		81,740							78,747
Total liabilities and stockholders’ equity	$	796,437						$	783,593
Interest income and rate earned—including derivatives			$	8,700		5.17	%			$	10,232	6.23	%
Interest expense and equivalent rate paid—including derivatives				4,356		2.59					5,427	3.31
Net interest income and margin—including derivatives			$	4,344		2.58	%			$	4,805	2.92	%

(a) Includes the effect of the $975 million leverage lease recalculation in the second quarter of 2008.

(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.

PAGE 21

WACHOVIA CORPORATION AND SUBSIDIARIES

NET INTEREST INCOME SUMMARIES

(Unaudited)

	FOURTH QUARTER 2007						THIRD QUARTER 2007						SECOND QUARTER 2007
(In millions)	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
ASSETS
Interest-bearing bank balances	$	5,083		64	5.05	%	$	6,459		93	5.68	%	$	3,384		50	6.00	%
Federal funds sold and securities purchased under resale agreements		12,901		155	4.77			14,206		194	5.42			12,110		158	5.25
Trading account assets		37,694		569	6.04			38,737		575	5.93			35,165		519	5.90
Securities		115,436		1,625	5.62			111,424		1,522	5.46			108,433		1,467	5.41
Loans
Commercial
Commercial, financial and agricultural		111,500		1,908	6.79			106,263		1,927	7.19			101,012		1,805	7.16
Real estate—construction and other		18,435		318	6.85			17,795		344	7.66			17,334		329	7.62
Real estate—mortgage		22,973		426	7.36			20,883		406	7.71			20,175		378	7.53
Lease financing (a)		7,374		145	7.82			7,523		146	7.80			7,759		150	7.74
Foreign		27,882		380	5.42			22,208		308	5.53			19,232		265	5.51
Total commercial		188,164		3,177	6.70			174,672		3,131	7.12			165,512		2,927	7.09
Consumer
Real estate secured		227,893		4,042	7.08			223,356		4,070	7.28			222,096		4,042	7.28
Student loans		8,073		126	6.19			7,299		122	6.61			8,850		141	6.42
Installment loans		25,675		651	10.04			24,474		614	9.96			24,799		609	9.84
Total consumer		261,641		4,819	7.35			255,129		4,806	7.52			255,745		4,792	7.50
Total loans		449,805		7,996	7.08			429,801		7,937	7.35			421,257		7,719	7.34
Loans held for sale		18,998		360	7.53			20,209		363	7.14			17,644		285	6.47
Other earning assets		10,223		166	6.48			7,937		138	6.91			7,985		144	7.23
Total earning assets excluding derivatives		650,140		10,935	6.70			628,773		10,822	6.86			605,978		10,342	6.84
Risk management derivatives (b)		—		19	0.01			—		42	0.02			—		46	0.03
Total earning assets including derivatives		650,140		10,954	6.71			628,773		10,864	6.88			605,978		10,388	6.87
Cash and due from banks		12,028						11,134						11,533
Other assets		101,319						89,097						87,262
Total assets	$	763,487					$	729,004					$	704,773
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest-bearing deposits
Savings and NOW accounts		83,370		345	1.64			81,851		357	1.73			83,977		367	1.75
Money market accounts		121,717		949	3.09			116,404		980	3.34			111,562		976	3.51
Other consumer time		127,061		1,557	4.86			122,474		1,507	4.88			120,684		1,455	4.84
Foreign		27,354		306	4.44			23,322		292	4.97			21,871		270	4.96
Other time		20,169		263	5.16			13,776		187	5.40			8,051		107	5.30
Total interest-bearing deposits		379,671		3,420	3.57			357,827		3,323	3.68			346,145		3,175	3.68
Federal funds purchased and securities sold under repurchase agreements		36,386		413	4.50			44,334		556	4.98			38,031		473	4.98
Commercial paper		7,272		78	4.27			5,799		65	4.42			5,143		60	4.67
Securities sold short		6,728		61	3.62			7,420		70	3.74			7,158		67	3.75
Other short-term borrowings		10,369		58	2.24			7,793		55	2.74			7,688		52	2.77
Long-term debt		158,704		2,129	5.34			151,226		2,067	5.44			143,504		1,923	5.37
Total interest-bearing liabilities excluding derivatives		599,130		6,159	4.08			574,399		6,136	4.24			547,669		5,750	4.21
Risk management derivatives (b)		—		121	0.08			—		144	0.10			—		151	0.11
Total interest-bearing liabilities including derivatives		599,130		6,280	4.16			574,399		6,280	4.34			547,669		5,901	4.32
Noninterest-bearing deposits		57,895						58,280						62,273
Other liabilities		32,476						26,468						25,514
Stockholders’ equity		73,986						69,857						69,317
Total liabilities and stockholders’ equity	$	763,487					$	729,004					$	704,773
Interest income and rate earned—including derivatives			$	10,954	6.71	%			$	10,864	6.88	%			$	10,388	6.87	%
Interest expense and equivalent rate paid—including derivatives				6,280	3.83					6,280	3.96					5,901	3.91
Net interest income and margin—including derivatives			$	4,674	2.88	%			$	4,584	2.92	%			$	4,487	2.96	%

PAGE 22

WACHOVIA CORPORATION AND SUBSIDIARIES

NET INTEREST INCOME SUMMARIES

(Unaudited)

	SIX MONTHS ENDED June 30, 2008							SIX MONTHS ENDED June 30, 2007
(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	$	4,616		90		3.91	%	$	2,459		80	6.55	%
Federal funds sold and securities purchased under resale agreements		12,470		184		2.98			13,111		335	5.16
Trading account assets		44,115		1,130		5.13			32,438		961	5.93
Securities		113,452		3,148		5.55			108,253		2,928	5.42
Loans
Commercial
Commercial, financial and agricultural		118,036		3,164		5.39			99,719		3,541	7.16
Real estate—construction and other		18,741		455		4.88			16,924		642	7.65
Real estate—mortgage		26,010		712		5.51			20,203		758	7.57
Lease financing (a)		6,940		(717	)	(20.65	)		7,745		300	7.74
Foreign		32,664		749		4.60			16,832		461	5.50
Total commercial		202,391		4,363		4.34			161,423		5,702	7.12
Consumer
Real estate secured		231,573		7,641		6.61			223,992		8,190	7.32
Student loans		9,521		221		4.68			8,688		277	6.45
Installment loans		27,850		1,345		9.71			24,172		1,175	9.80
Total consumer		268,944		9,207		6.86			256,852		9,642	7.53
Total loans		471,335		13,570		5.78			418,275		15,344	7.37
Loans held for sale		10,367		364		7.03			17,199		540	6.32
Other earning assets		10,706		282		5.30			8,119		283	7.02
Total earning assets excluding derivatives		667,061		18,768		5.64			599,854		20,471	6.85
Risk management derivatives (b)		—		164		0.05			—		94	0.03
Total earning assets including derivatives		667,061		18,932		5.69			599,854		20,565	6.88
Cash and due from banks		11,558							11,894
Other assets		111,396							86,191
Total assets	$	790,015						$	697,939
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest-bearing deposits
Savings and NOW accounts		86,385		373		0.87			84,111		740	1.77
Money market accounts		130,433		1,251		1.93			109,684		1,893	3.48
Other consumer time		118,616		2,582		4.38			118,485		2,824	4.81
Foreign		26,055		422		3.26			21,340		519	4.90
Other time		20,804		446		4.31			8,539		226	5.34
Total interest-bearing deposits		382,293		5,074		2.67			342,159		6,202	3.66
Federal funds purchased and securities sold under repurchase agreements		39,622		582		2.95			36,595		903	4.97
Commercial paper		5,348		58		2.19			5,032		117	4.70
Securities sold short		6,581		115		3.53			7,929		150	3.81
Other short-term borrowings		9,722		78		1.57			7,295		96	2.66
Long-term debt		171,506		3,698		4.33			142,746		3,803	5.36
Total interest-bearing liabilities excluding derivatives		615,072		9,605		3.14			541,756		11,271	4.19
Risk management derivatives (b)		—		178		0.06			—		270	0.10
Total interest-bearing liabilities including derivatives		615,072		9,783		3.20			541,756		11,541	4.29
Noninterest-bearing deposits		57,157							61,628
Other liabilities		37,542							25,237
Stockholders’ equity		80,244							69,318
Total liabilities and stockholders’ equity	$	790,015						$	697,939
Interest income and rate earned—including derivatives			$	18,932		5.69	%			$	20,565	6.88	%
Interest expense and equivalent rate paid—including derivatives				9,783		2.95					11,541	3.87
Net interest income and margin—including derivatives			$	9,149		2.74	%			$	9,024	3.01	%

(a) Includes the effect of the $975 million leverage lease recalculation in the second quarter of 2008.

(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.

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RECONCILIATION OF CERTAIN NON-GAAP FINANCIAL MEASURES

(Unaudited)

		2008					2007
(In millions, except per share data)	*	Second Quarter			First Quarter		Fourth Quarter		Third Quarter		Second Quarter
INCOME (LOSS) FROM CONTINUING OPERATIONS
Net income (loss)(GAAP)	A	$	(8,662	)	(664	)	51		1,618		2,341
Discontinued operations, net of income taxes(GAAP)			—		—		142		88		—
Income (loss) from continuing operations(GAAP)			(8,662	)	(664	)	193		1,706		2,341
Merger-related and restructuring expenses(GAAP)			128		123		108		22		20
Goodwill impairment(GAAP)			6,056		—		—		—		—
Earnings excluding merger-related and restructuring expenses, goodwill impairment and discontinued operations	B		(2,478	)	(541	)	301		1,728		2,361
Other intangible amortization(GAAP)			66		64		65		59		66
Earnings excluding merger-related and restructuring expenses, goodwill impairment, other intangible amortization and discontinued operations	C	$	(2,412	)	(477	)	366		1,787		2,427
INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS
Net income (loss) available to common stockholders(GAAP)	D	$	(8,855	)	(707	)	51		1,618		2,341
Discontinued operations, net of income taxes(GAAP)			—		—		142		88		—
Income (loss) from continuing operations available to common stockholders(GAAP)			(8,855	)	(707	)	193		1,706		2,341
Merger-related and restructuring expenses(GAAP)			128		123		108		22		20
Goodwill impairment(GAAP)			6,056		—		—		—		—
Earnings excluding merger-related and restructuring expenses, goodwill impairment and discontinued operations	E		(2,671	)	(584	)	301		1,728		2,361
Other intangible amortization(GAAP)			66		64		65		59		66
Net income (loss) available to common stockholders, excluding merger-related and restructuring expenses, goodwill impairment, other intangible amortization and discontinued operations	F	$	(2,605	)	(520	)	366		1,787		2,427
RETURN ON AVERAGE COMMON STOCKHOLDERS’ EQUITY
Average common stockholders’ equity(GAAP)	G	$	72,579		74,697		73,599		69,857		69,317
Merger-related and restructuring expenses(GAAP)			191		110		242		124		14
Goodwill impairment(GAAP)			998		—		—		—		—
Discontinued operations(GAAP)			—		—		(142	)	(88	)	—
Average common stockholders’ equity, excluding merger-related and restructuring expenses, goodwill impairment and discontinued operations	H		73,768		74,807		73,699		69,893		69,331
Average intangible assets(GAAP)	I		(44,998	)	(45,211	)	(44,941	)	(40,198	)	(40,328	)
Average tangible common stockholders’ equity, excluding merger-related and restructuring expenses, goodwill impairment and discontinued operations	J	$	28,770		29,596		28,758		29,695		29,003
Return on average common stockholders’ equity
GAAP	D/G		(49.07	)%	(3.81	)	0.28		9.19		13.54
Excluding merger-related and restructuring expenses, goodwill impairment and discontinued operations	E/H		(14.56	)	(3.14	)	1.62		9.81		13.66
Return on average tangible common stockholders’ equity
GAAP	D/G+I		(129.14	)	(9.64	)	0.71		21.64		32.38
Excluding merger-related and restructuring expenses, goodwill impairment, other intangible amortization and discontinued operations	F/J		(36.42	)%	(7.07	)	5.05		23.88		33.57

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RECONCILIATION OF CERTAIN NON-GAAP FINANCIAL MEASURES

(Unaudited)

		2008					2007
(In millions, except per share data)	*	Second Quarter			First Quarter		Fourth Quarter		Third Quarter		Second Quarter
RETURN ON AVERAGE ASSETS
Average assets(GAAP)	K	$	796,437		783,593		763,487		729,004		704,773
Average intangible assets(GAAP)			(44,998	)	(45,211	)	(44,941	)	(40,198	)	(40,328	)
Average tangible assets(GAAP)	L		751,439		738,382		718,546		688,806		664,445
Average assets(GAAP)			796,437		783,593		763,487		729,004		704,773
Merger-related and restructuring expenses(GAAP)			191		110		242		124		14
Goodwill impairment(GAAP)			998		—		—		—		—
Discontinued operations(GAAP)			—		—		(142	)	(88	)	—
Average assets, excluding merger-related and restructuring expenses, goodwill impairment and discontinued operations	M		797,626		783,703		763,587		729,040		704,787
Average intangible assets(GAAP)			(44,998	)	(45,211	)	(44,941	)	(40,198	)	(40,328	)
Average tangible assets, excluding merger-related and restructuring expenses, goodwill impairment and discontinued operations	N	$	752,628		738,492		718,646		688,842		664,459
Return on average assets
GAAP	A/K		(4.37	) %	(0.34	)	0.03		0.88		1.33
Excluding merger-related and restructuring expenses, goodwill impairment and discontinued operations	B/M		(1.25	)	(0.28	)	0.16		0.94		1.34
Return on average tangible assets
GAAP	A/L		(4.64	)	(0.36	)	0.03		0.93		1.41
Excluding merger-related and restructuring expenses, goodwill impairment, other intangible amortization and discontinued operations	C/N		(1.29	) %	(0.26	)	0.20		1.03		1.47
OVERHEAD EFFICIENCY RATIOS
Noninterest expense(GAAP)	O	$	12,284		5,441		5,786		4,525		4,890
Merger-related and restructuring expenses(GAAP)			(251	)	(241	)	(187	)	(36	)	(32	)
Goodwill impairment(GAAP)			(6,060	)	—		—		—		—
Noninterest expense excluding merger-related and restructuring expenses and goodwill impairment	P		5,973		5,200		5,599		4,489		4,858
Other intangible amortization(GAAP)			(97	)	(103	)	(111	)	(92	)	(103	)
Noninterest expense excluding merger-related and restructuring expenses, goodwill impairment and other intangible amortization	Q	$	5,876		5,097		5,488		4,397		4,755
Net interest income(GAAP)		$	4,290		4,752		4,630		4,551		4,449
Tax-equivalent adjustment			54		53		44		33		38
Net interest income(Tax-equivalent)			4,344		4,805		4,674		4,584		4,487
Fee and other income(GAAP)			3,165		2,777		2,744		2,933		4,240
Total	R	$	7,509		7,582		7,418		7,517		8,727
Retail Brokerage Services, excluding insurance
Noninterest expense(GAAP)	S	$	1,582		1,628		1,718		1,033		1,070
Net interest income(GAAP)		$	223		260		305		255		248
Tax-equivalent adjustment			1		1		1		—		—
Net interest income(Tax-equivalent)			224		261		306		255		248
Fee and other income(GAAP)			1,819		1,866		1,907		1,180		1,202
Total	T	$	2,043		2,127		2,213		1,435		1,450
Overhead efficiency ratios GAAP	O/R		163.58	%	71.76		78.00		60.20		56.02
Excluding merger-related and restructuring expenses, and goodwill impairment	P/R		79.55		68.58		75.48		59.73		55.65
Excluding merger-related and restructuring expenses, goodwill impairment and brokerage	P-S/R-T		80.33		65.48		74.54		56.82		52.04
Excluding merger-related and restructuring expenses, goodwill impairment and other intangible amortization	Q/R		78.26		67.22		73.97		58.51		54.47
Excluding merger-related and restructuring expenses, goodwill impairment, other intangible amortization and brokerage	Q-S/R-T		78.55	%	63.59		72.43		55.32		50.61

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RECONCILIATION OF CERTAIN NON-GAAP FINANCIAL MEASURES

(Unaudited)

		2008					2007
(In millions, except per share data)	*	Second Quarter			First Quarter		Fourth Quarter		Third Quarter		Second Quarter
OPERATING LEVERAGE
Operating leverage(GAAP)		$	(6,916	)	509		(1,359	)	(847	)	189
Merger-related and restructuring expenses(GAAP)			9		54		151		4		21
Goodwill impairment(GAAP)			6,060		—		—		—		—
Operating leverage, excluding merger-related and restructuring expenses, and goodwill impairment			(847	)	563		(1,208	)	(843	)	210
Other intangible amortization(GAAP)			(6	)	(9	)	21		(12	)	(13	)
Operating leverage, excluding merger-related and restructuring expenses, goodwill impairment and other intangible amortization		$	(853	)	554		(1,187	)	(855	)	197
DIVIDEND PAYOUT RATIOS ON COMMON SHARES
Dividends paid per common share	U	$	0.38		0.64		0.64		0.64		0.56
Diluted earnings per common share(GAAP)(a)	V	$	(4.20	)	(0.36	)	0.03		0.85		1.22
Merger-related and restructuring expenses(GAAP)			0.06		0.06		0.05		—		0.01
Goodwill impairment(GAAP)			2.87		—		—		—		—
Other intangible amortization(GAAP)			0.04		0.04		0.03		0.04		0.04
Discontinued operations(GAAP)			—		—		0.07		0.05		—
Diluted earnings per common share, excluding merger-related and restructuring expenses, goodwill impairment, other intangible amortization and discontinued operations (a)	W	$	(1.23	)	(0.26	)	0.18		0.94		1.27
Dividend payout ratios
GAAP	U/V		(8.93	)%	(177.78	)	2,133.33		75.29		45.90
Excluding merger-related and restructuring expenses, goodwill impairment, other intangible amortization and discontinued operations	U/W		(30.49	)%	(246.15	)	355.56		68.09		44.09

* The letters included in the columns are provided to show how the various ratios presented in the tables on pages 23 through 25 are calculated. For example, return on average assets on a GAAP basis is calculated by dividing income (GAAP) by average assets (GAAP) (i.e., A/K) and annualized where appropriate.

(a) Calculated using average basic common shares in 2008.