Exhibit 99(a)
Media Contacts:
Mary Eshet 704-383-7777
Christy Phillips 704-383-8178
Wachovia
Investor Contacts:
Alice Lehman 704-374-4139
Ellen Taylor 704-383-1381
[LOGO] Press Release July 18, 2002
WACHOVIA REPORTS CONTINUED MOMENTUM IN 2/ND/ QUARTER 2002 EARNINGS
=========================================================================
2/nd/ QUARTER 2002 HIGHLIGHTS
.. Reported net income of $862 million or 63 cents per share; operating
earnings of 69 cents in line with consensus estimates, up 5 percent from
prior quarter.
.. Customer satisfaction scores improved for 13/th/ consecutive quarter.
.. Continued strong expense control; improved cash overhead efficiency ratio
to 56.3 percent.
.. General Bank average core deposits increased 3 percent from prior quarter
and investment sales were very strong.
.. Nonperforming assets, including assets held for sale, rose 1 percent in
the quarter.
.. Tier 1 capital ratio grew to 7.77 percent.
.. Brokerage, trust, mutual fund, mortgage and investment banking systems
conversions completed successfully. Merger integration continues to
progress well.
- -------------------------------------------------------------------------------------------------------------------------
Earnings Highlights
Three Months Ended
June 30, March 31, June 30,
-----------------------------------------
2002 2002 2001
(In millions, except per share data) Not restated*
- -------------------------------------------------------------------------------------------------------------------------
Earnings
Net income available to common stockholders (As reported) $ 862 907 633
Diluted earnings per common share (As reported) 0.63 0.66 0.64
Operating earnings /(a)/ 957 908 649
Diluted earnings per common share (Operating earnings) $ 0.69 0.66 0.66
- -------------------------------------------------------------------------------------------------------------------------
Financial ratios (Operating earnings)
Return on average common stockholders' equity 12.89% 12.68 16.19
Overhead efficiency ratio 59.77 61.66 64.34
Net interest margin 3.96 3.90 3.41
Fee and other income as % of total revenue 45.63% 45.00 48.32
- -------------------------------------------------------------------------------------------------------------------------
Cash operating earnings /(b)/
Net income $ 1,060 1,016 723
Diluted earnings per common share $ 0.77 0.74 0.73
Return on average tangible common stockholders' equity 24.96% 25.30 23.35
Dividend payout ratio /(c)/ 31.17 32.43 32.88
Overhead efficiency ratio 56.30% 57.93 62.06
- -------------------------------------------------------------------------------------------------------------------------
Asset quality
Allowance as % of nonaccrual and restructured loans 163% 177 144
Allowance as % of loans, net 1.86 1.84 1.44
Net charge-offs as % of average loans, net 0.97 0.83 0.52
Nonperforming assets as % of loans, net,
foreclosed properties and loans held for sale 1.24% 1.21 1.23
- -------------------------------------------------------------------------------------------------------------------------
/(a)/ Operating earnings are reported net income excluding after-tax net
merger-related, restructuring and other charges.
/(b)/ Cash operating earnings are reported net income excluding after-tax net
merger-related, restructuring and other charges, and exclude deposit base
intangible, goodwill and other intangible amortization.
/(c)/ Based on common shares.
* Periods prior to the September 1, 2001, merger of First Union and the former
Wachovia, which was accounted for as a purchase, have not been restated.
-- more --
WACHOVIA REPORTS 2/nd/ Quarter 2002 EARNINGS/Page 2
CHARLOTTE, N.C. - Wachovia Corp. (NYSE:WB) today reported second quarter 2002
net income available to common stockholders of $862 million, or 63 cents per
share; operating earnings of $957 million, or 69 cents per share; and cash
operating earnings of $1.1 billion, or 77 cents per share. Operating earnings
exclude $89 million, or 6 cents per share, of after-tax net merger-related and
restructuring charges. Cash operating earnings exclude deposit base intangible,
goodwill and other intangible amortization as well as the net merger-related and
restructuring charges.
"This was another solid quarter for our company, which reflects the hard work
and dedication of our people in serving customers in a difficult economic
environment. We're particularly proud of the 13/th/ consecutive quarter of
improved customer satisfaction ratings, even as we successfully completed the
conversions of brokerage, personal trust, mutual fund and other systems that
directly touch our customers," said Ken Thompson, Wachovia president and CEO.
"While many employees have been busy learning new policies, products and
procedures, we've continued to see outstanding growth in core deposits and, at
the same time, record sales of investment products. And we've made excellent
progress in building capital and controlling expenses. This is a real tribute to
our people and, we believe, to our momentum for the future."
Total revenue increased 3 percent from the first quarter of 2002, to $4.6
billion, reflecting an improved margin in the continuing low interest rate
environment, lower write-downs in principal investing and higher net securities
gains used to offset the impact of credit actions.
Lines of Business
General Bank
- --------------------------------------------------------------------------------
General Bank Highlights: 2Q01 not restated
---
Three Months Ended
June 30, March 31, June 30,
--------------------------------------
(In millions) 2002 2002 2001
- --------------------------------------------------------------------------------
Total revenue (Tax-equivalent) $ 2,267 2,187 1,550
Provision for loan losses 98 115 98
Noninterest expense 1,231 1,206 926
Operating earnings 596 550 347
Average loans, net 100,832 98,033 65,240
Average core deposits 139,665 136,096 98,429
Economic capital, average $ 5,554 5,439 3,590
- --------------------------------------------------------------------------------
The General Bank includes retail, small business and commercial customers.
General Bank financial results showed outstanding momentum, with a 4 percent
increase in revenue from the first quarter of 2002, and strong growth in core
deposits, consumer loan production and record investment sales through the
branch system. Average core deposits increased 3 percent from the first quarter
of 2002, and the increase in average low-cost core deposits was particularly
strong at 6 percent from the prior quarter. Good average loan growth of 3
percent from the first quarter of 2002 reflected strength in consumer real
estate-secured products and student lending. Investment production of $1.3
billion was led by $910 million in annuity sales. While strong cost control
efforts continued, expenses grew modestly due to the consolidation of Wachovia's
home equity and mortgage origination platforms, as well as increased variable
incentive expense due to strong sales production.
-- more --
WACHOVIA REPORTS 2/nd/ QUARTER 2002 EARNINGS/Page 3
Capital Management
- --------------------------------------------------------------------------------
Capital Management Highlights: 2Q01 not restated
---
Three Months Ended
June 30, March 31, June 30,
---------------------------------------
(In millions) 2002 2002 2001
- --------------------------------------------------------------------------------
Total revenue (Tax-equivalent) $ 809 805 707
Provision for loan losses - - -
Noninterest expense 669 676 583
Operating earnings 89 82 82
Average loans, net 186 166 110
Average core deposits 1,269 1,298 1,609
Economic capital, average $ 675 683 598
- --------------------------------------------------------------------------------
The Capital Management Group (CMG) includes asset management and retail
brokerage services. These businesses produced stable revenues quarter over
quarter as good sales production through multiple distribution channels offset
declining equity valuations in difficult markets. Tight expense control was
evident. CMG generated 11 percent growth in annuity sales to $1.5 billion
(including bank annuity sales of $910 million) and net mutual fund sales of $5.7
billion. Assets under management at June 30, 2002, were stable from March 31,
2002, at $230 billion, despite lower market valuations. Included in assets under
management are mutual fund assets, which increased 3 percent from March 31,
2002, to $109 billion.
Wealth Management
- --------------------------------------------------------------------------------
Wealth Management Highlights: 2Q01 not restated
---
Three Months Ended
June 30, March 31, June 30,
---------------------------------------
(In millions) 2002 2002 2001
- --------------------------------------------------------------------------------
Total revenue (Tax-equivalent) $ 244 237 129
Provision for loan losses 7 1 -
Noninterest expense 166 168 86
Operating earnings 45 43 29
Average loans, net 8,632 8,400 4,449
Average core deposits 9,879 9,896 6,367
Economic capital, average $ 338 330 148
- --------------------------------------------------------------------------------
Wealth Management, which includes private banking, personal trust, investment
advisory services, charitable services, financial planning and insurance
brokerage, generated revenue growth of 3 percent from the first quarter of 2002.
Good loan volume, along with stable spreads, contributed to higher net interest
income, while strong momentum in insurance brokerage drove an increase in fee
income. Expenses declined 1 percent from the first quarter of 2002. Wealth
Management assets under management (included in the Capital Management Group
total) declined nearly $4 billion from March 31, 2002, to $72 billion at June
30, 2002, due to lower equity market valuations, although net flows were
positive.
-- more --
WACHOVIA REPORTS 2/nd/ QUARTER 2002 EARNINGS/Page 4
Corporate and Investment Bank
- ------------------------------------------------------------------------------------------------------
Corporate and Investment Bank Highlights: 2Q01 not restated
---
Three Months Ended
June 30, March 31, June 30,
-------------------------------------
(In millions) 2002 2002 2001
- ------------------------------------------------------------------------------------------------------
Total revenue (Tax-equivalent) $ 1,067 1,077 841
Provision for loan losses 293 222 93
Noninterest expense 521 521 505
Operating earnings 159 209 162
Average loans, net 41,580 43,342 41,145
Average core deposits 12,214 12,766 10,200
Economic capital, average $ 7,569 7,997 5,981
- ------------------------------------------------------------------------------------------------------
Corporate and Investment Bank revenue declined only 1 percent despite weak
market conditions that dampened its advisory businesses and fixed income trading
results, partially offset by improved performance in loan syndications and lower
principal investing write-downs. The increased provision was driven by net
charge-offs of $225 million related to Argentina and to the telecommunications
sector. Average loans declined 4 percent due to continued portfolio management
actions and weak loan demand.
Asset Quality
Second quarter 2002 net charge-offs of $374 million, or 0.97 percent of average
net loans, included the $225 million related to continued deterioration in
Argentine credits and the telecommunications sector. The provision of $397
million included $23 million related to write-downs recorded on sales directly
out of the loan portfolio. Total nonperforming assets including loans held for
sale were $2.1 billion in the second quarter of 2002, an increase of 1 percent
from March 31, 2002. The Argentine-related and telecommunications sector loans
represented 31 percent of new commercial nonaccrual loans before write-downs.
***
Wachovia Corporation (NYSE:WB), created through the September 1, 2001, merger of
First Union and Wachovia, had assets of $325 billion and stockholders' equity of
$30 billion at June 30, 2002. Wachovia is a leading provider of financial
services to 20 million retail, brokerage and corporate customers throughout the
East Coast and the nation. The company operates full-service banking offices
under the First Union and Wachovia names in 11 East Coast states and Washington,
D.C., and offers full-service brokerage with offices in 49 states and global
services through more than 30 international offices. Online banking and
brokerage products and services are available through wachovia.com and
firstunion.com.
Earnings Conference Call and Supplemental Materials
Wachovia President and CEO Ken Thompson and CFO Bob Kelly will review Wachovia's
2nd quarter results in a conference call and audio webcast beginning at 10 a.m.
EDT today. Supplemental materials relating to the second quarter results are
available on the Internet at http://wachovia.firstunion.com, 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 http://wachovia.firstunion.com 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
1-888-566-5777 for U.S. callers or 415-228-5014 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 18, at 12 p.m. through 5 p.m. Monday, July 22. Replay
telephone number is 402-280-9997.
***
This news release may contain various forward-looking statements. A discussion
of various factors that could cause Wachovia Corporation's actual results to
differ materially from those expressed in such forward-looking statements is
included in Wachovia's filings with the Securities and Exchange Commission,
including its Current Report on Form 8-K dated July 18, 2002.
-- more --
PAGE 5
WACHOVIA CORPORATION AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(Unaudited)
- -----------------------------------------------------------------------------------------------------------------------------------
2002 2001
------------------------ --------------------------------------
Second First Fourth Third Second
(Dollars in millions, except per share data) Quarter Quarter Quarter Quarter Quarter
- -----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Operating Earnings
Net interest income (Tax-equivalent) $ 2,515 2,477 2,484 1,974 1,742
Fee and other income 2,110 2,027 2,060 1,036 1,629
- -----------------------------------------------------------------------------------------------------------------------------------
Total revenue (Tax-equivalent) 4,625 4,504 4,544 3,010 3,371
Provision for loan losses 397 339 381 244 223
Noninterest expense, excluding goodwill
and other intangible amortization 2,603 2,609 2,691 2,193 2,092
Goodwill and other intangible amortization 161 168 251 117 77
Income taxes (Tax-equivalent) 507 480 422 158 330
- -----------------------------------------------------------------------------------------------------------------------------------
Income before net merger-related,
restructuring and other charges
(Operating earnings) 957 908 799 298 649
Ater-tax net merger-related,
restructuring and other charges (89) 5 (63) (632) (16)
- -----------------------------------------------------------------------------------------------------------------------------------
Net income (loss) 868 913 736 (334) 633
Dividends on preferred stock 6 6 6 - -
- -----------------------------------------------------------------------------------------------------------------------------------
Net income (loss) available to common stockholders $ 862 907 730 (334) 633
===================================================================================================================================
DILUTED EARNINGS PER COMMON SHARE
Income before net merger-related,
restructuring and other charges $ 0.69 0.66 0.58 0.27 0.66
Net income (loss) $ 0.63 0.66 0.54 (0.31) 0.64
===================================================================================================================================
PROFITABILITY (Operating earnings)
Return on average common stockholders' equity 12.89% 12.68 10.77 5.77 16.19
Net interest margin 3.96 3.90 3.81 3.58 3.41
Fee and other income as % of total revenue 45.63 45.00 45.33 34.42 48.32
Overhead efficiency ratio 59.77 61.66 64.74 76.74 64.34
Effective income tax rate 32.10% 32.09 31.65 27.67 31.54
===================================================================================================================================
CASH OPERATING EARNINGS
Net income $ 1,060 1,016 980 395 723
Diluted earnings per common share $ 0.77 0.74 0.71 0.36 0.73
Return on average tangible common stockholders' equity 24.96% 25.30 23.56 11.36 23.35
Return on average common stockholders' equity 14.29 14.19 13.23 7.66 18.04
Overhead efficiency ratio 56.30% 57.93 59.22 72.86 62.06
Operating leverage $ 125 42 1,036 (462) 59
===================================================================================================================================
PAGE 6
WACHOVIA CORPORATION AND SUBSIDIARIES
OTHER FINANCIAL DATA
(Unaudited)
- -----------------------------------------------------------------------------------------------------------------------------------
2002 2001
------------------------ -------------------------------------
Second First Fourth Third Second
(Dollars in millions, except per share data) Quarter Quarter Quarter Quarter Quarter
- -----------------------------------------------------------------------------------------------------------------------------------
CAPITAL ADEQUACY (a)
Tier I capital ratio 7.77% 7.49 7.04 6.75 7.37
Total capital ratio 11.77 11.56 11.08 10.84 11.45
Leverage ratio 6.76% 6.51 6.19 7.22 6.00
===================================================================================================================================
ASSET QUALITY
Allowance as % of loans, net 1.86% 1.84 1.83 1.79 1.44
Allowance as % of nonperforming assets 150 162 175 186 133
Net charge-offs as % of average loans, net 0.97 0.83 0.93 0.73 0.52
Nonperforming assets as % of loans, net,
foreclosed properties and loans held for sale 1.24% 1.21 1.13 1.08 1.23
===================================================================================================================================
OTHER DATA
Employees 82,686 82,809 84,046 85,534 67,420
Financial centers 3,347 3,362 3,434 3,461 2,690
ATMs 4,617 4,618 4,675 4,698 3,419
Common shares outstanding (In millions) 1,371 1,368 1,362 1,361 979
Common stock price $ 38.18 37.08 31.36 31.00 34.94
Book value per common share $ 22.15 21.04 20.88 20.94 16.49
Common stock price to book value 172% 176 150 148 212
Market capitalization $ 52,347 50,716 42,701 42,191 34,213
Dividends paid per common share 0.24 0.24 0.24 0.24 0.24
Dividends paid per preferred share $ 0.06 0.06 0.06 - -
===================================================================================================================================
AVERAGE BALANCE SHEET DATA
Commercial loans, net $ 98,303 99,489 102,230 83,633 76,378
Consumer loans, net 56,782 57,575 60,609 49,393 42,834
Loans, net 155,085 157,064 162,839 133,026 119,212
Earning assets 254,424 255,488 259,884 219,672 204,673
Total assets 314,125 314,816 318,722 267,366 247,254
Core deposits 165,609 163,690 161,826 132,203 119,035
Total deposits 177,608 178,003 179,472 150,218 136,979
Interest-bearing liabilities 223,829 227,382 231,763 198,322 185,224
Stockholders' equity $ 29,575 28,903 28,540 20,330 16,026
===================================================================================================================================
PERIOD-END BALANCE SHEET DATA
Commercial loans, net $ 102,780 104,883 106,308 107,673 79,529
Consumer loans, net 56,020 57,411 57,493 62,007 42,963
Loans, net 158,800 162,294 163,801 169,680 122,492
Goodwill and other intangible assets
Goodwill 10,728 10,728 10,616 10,496 3,476
Deposit base 1,508 1,661 1,822 2,433 140
Customer relationships 229 237 244 8 9
Tradename 90 90 90 - -
Total assets 324,673 319,853 330,452 325,897 245,941
Core deposits 168,222 167,141 170,498 159,787 121,022
Total deposits 180,663 180,033 187,453 180,549 138,567
Stockholders' equity $ 30,372 28,785 28,455 28,506 16,144
===================================================================================================================================
(a) The second quarter of 2002 is based on estimates.
PAGE 7
WACHOVIA CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
- -----------------------------------------------------------------------------------------------------------------------------------
Three Months Ended June 30, 2002 Six Months Ended June 30, 2002
-------------------------------------- --------------------------------------
Net Merger- Net Merger-
Related, Related,
Restructuring Restructuring
Operating and Other As Operating and Other As
(In millions, except per share data) Earnings Charges Reported Earnings Charges Reported
- -----------------------------------------------------------------------------------------------------------------------------------
Net interest income $ 2,461 - 2,461 4,887 - 4,887
Provision for loan losses 397 - 397 736 - 736
- -----------------------------------------------------------------------------------------------------------------------------------
Net interest income after provision
for loan losses 2,064 - 2,064 4,151 - 4,151
- -----------------------------------------------------------------------------------------------------------------------------------
Fee and other income
Asset sales and securitization 63 - 63 156 - 156
Other fee and other income 2,047 - 2,047 3,981 - 3,981
- -----------------------------------------------------------------------------------------------------------------------------------
Total fee and other income 2,110 - 2,110 4,137 - 4,137
- -----------------------------------------------------------------------------------------------------------------------------------
Noninterest expense
Merger-related and restructuring charges
Personnel and employee termination benefits - 7 7 - 44 44
Occupancy and equipment - 62 62 - 103 103
Gain on regulatory-mandated branch sales - - - - (121) (121)
Contract cancellations and system conversions - 51 51 - 69 69
Advertising - 7 7 - 7 7
Other - 16 16 - 33 33
- -----------------------------------------------------------------------------------------------------------------------------------
Net merger-related and restructuring charges - 143 143 - 135 135
Other noninterest expense 2,764 - 2,764 5,541 - 5,541
- -----------------------------------------------------------------------------------------------------------------------------------
Total noninterest expense 2,764 143 2,907 5,541 135 5,676
- -----------------------------------------------------------------------------------------------------------------------------------
Income before income taxes (benefits) 1,410 (143) 1,267 2,747 (135) 2,612
Income taxes (benefits) 453 (54) 399 882 (51) 831
- -----------------------------------------------------------------------------------------------------------------------------------
Net income 957 (89) 868 1,865 (84) 1,781
Dividends on preferred stock 6 - 6 12 - 12
- -----------------------------------------------------------------------------------------------------------------------------------
Net income available to common stockholders $ 951 (89) 862 1,853 (84) 1,769
===================================================================================================================================
Diluted earnings per common share $ 0.69 (0.06) 0.63 1.35 (0.06) 1.29
===================================================================================================================================
PAGE 8
WACHOVIA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATING EARNINGS (a)
(Unaudited)
- ----------------------------------------------------------------------------------------------------------------------------
2002 2001
-------------------------- -----------------------------------
Second First Fourth Third Second
(In millions, except per share data) Quarter Quarter Quarter Quarter Quarter
- ----------------------------------------------------------------------------------------------------------------------------
INTEREST INCOME
Interest and fees on loans $ 2,563 2,637 2,970 2,621 2,420
Interest and dividends on securities 906 856 876 852 881
Trading account interest 173 155 166 192 198
Other interest income 252 255 299 279 321
- ----------------------------------------------------------------------------------------------------------------------------
Total interest income 3,894 3,903 4,311 3,944 3,820
- ----------------------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE
Interest on deposits 836 915 1,116 1,183 1,192
Interest on short-term borrowings 300 286 372 417 454
Interest on long-term debt 297 276 391 414 463
- ----------------------------------------------------------------------------------------------------------------------------
Total interest expense 1,433 1,477 1,879 2,014 2,109
- ----------------------------------------------------------------------------------------------------------------------------
Net interest income 2,461 2,426 2,432 1,930 1,711
Provision for loan losses 397 339 381 244 223
- ----------------------------------------------------------------------------------------------------------------------------
Net interest income after provision for loan losses 2,064 2,087 2,051 1,686 1,488
- ----------------------------------------------------------------------------------------------------------------------------
FEE AND OTHER INCOME
Service charges and fees 661 661 672 541 486
Commissions 481 464 448 356 389
Fiduciary and asset management fees 466 477 478 400 384
Advisory, underwriting and other investment banking fees 225 240 223 177 238
Principal investing (42) (90) (21) (585) (58)
Other income 319 275 260 147 190
- ----------------------------------------------------------------------------------------------------------------------------
Total fee and other income 2,110 2,027 2,060 1,036 1,629
- ----------------------------------------------------------------------------------------------------------------------------
NONINTEREST EXPENSE
Salaries and employee benefits 1,646 1,663 1,663 1,374 1,363
Occupancy 194 195 210 176 155
Equipment 231 226 247 214 198
Advertising 25 19 21 15 11
Communications and supplies 132 134 142 117 111
Professional and consulting fees 96 88 113 79 69
Goodwill and other intangible amortization 161 168 251 117 77
Sundry expense 279 284 295 218 185
- ----------------------------------------------------------------------------------------------------------------------------
Total noninterest expense 2,764 2,777 2,942 2,310 2,169
- ----------------------------------------------------------------------------------------------------------------------------
Income before income taxes 1,410 1,337 1,169 412 948
Income taxes 453 429 370 114 299
- ----------------------------------------------------------------------------------------------------------------------------
Net operating earnings $ 957 908 799 298 649
============================================================================================================================
Diluted earnings per common share $ 0.69 0.66 0.58 0.27 0.66
============================================================================================================================
(a) Operating earnings exclude net merger-related, restructuring and other
charges.
PAGE 9
WACHOVIA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATING EARNINGS (a)
(Unaudited)
- ----------------------------------------------------------------------------------------
Six Months Ended
June 30,
---------------------
(In millions, except per share data) 2002 2001
- ----------------------------------------------------------------------------------------
INTEREST INCOME
Interest and fees on loans $ 5,200 4,946
Interest and dividends on securities 1,762 1,806
Trading account interest 328 402
Other interest income 507 691
- ----------------------------------------------------------------------------------------
Total interest income 7,797 7,845
- ----------------------------------------------------------------------------------------
INTEREST EXPENSE
Interest on deposits 1,751 2,445
Interest on short-term borrowings 586 947
Interest on long-term debt 573 1,040
- ----------------------------------------------------------------------------------------
Total interest expense 2,910 4,432
- ----------------------------------------------------------------------------------------
Net interest income 4,887 3,413
Provision for loan losses 736 442
- ----------------------------------------------------------------------------------------
Net interest income after provision for loan losses 4,151 2,971
- ----------------------------------------------------------------------------------------
FEE AND OTHER INCOME
Service charges and fees 1,322 954
Commissions 945 764
Fiduciary and asset management fees 943 765
Advisory, underwriting and other investment banking fees 465 436
Principal investing (132) (101)
Other income 594 357
- ----------------------------------------------------------------------------------------
Total fee and other income 4,137 3,175
- ----------------------------------------------------------------------------------------
NONINTEREST EXPENSE
Salaries and employee benefits 3,309 2,692
Occupancy 389 318
Equipment 457 403
Advertising 44 20
Communications and supplies 266 221
Professional and consulting fees 184 142
Goodwill and other intangible amortization 329 155
Sundry expense 563 356
- ----------------------------------------------------------------------------------------
Total noninterest expense 5,541 4,307
- ----------------------------------------------------------------------------------------
Income before income taxes 2,747 1,839
Income taxes 882 580
- ----------------------------------------------------------------------------------------
Net operating earnings $ 1,865 1,259
========================================================================================
Diluted earnings per common share $ 1.35 1.28
========================================================================================
(a) Operating earnings exclude net merger-related, restructuring and other
charges.
PAGE 10
WACHOVIA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Unaudited)
- ----------------------------------------------------------------------------------------------------------------------------------
2002 2001
------------------------ -------------------------------------
Second First Fourth Third Second
(In millions, except per share data) Quarter Quarter Quarter Quarter Quarter
- ----------------------------------------------------------------------------------------------------------------------------------
INTEREST INCOME
Interest and fees on loans $ 2,563 2,637 2,970 2,621 2,420
Interest and dividends on securities 906 856 876 852 881
Trading account interest 173 155 166 192 198
Other interest income 252 255 299 279 321
- ----------------------------------------------------------------------------------------------------------------------------------
Total interest income 3,894 3,903 4,311 3,944 3,820
- ----------------------------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE
Interest on deposits 836 915 1,116 1,183 1,192
Interest on short-term borrowings 300 286 372 417 454
Interest on long-term debt 297 276 391 414 463
- ----------------------------------------------------------------------------------------------------------------------------------
Total interest expense 1,433 1,477 1,879 2,014 2,109
- ----------------------------------------------------------------------------------------------------------------------------------
Net interest income 2,461 2,426 2,432 1,930 1,711
Provision for loan losses 397 339 381 1,124 223
- ----------------------------------------------------------------------------------------------------------------------------------
Net interest income after provision for loan losses 2,064 2,087 2,051 806 1,488
- ----------------------------------------------------------------------------------------------------------------------------------
FEE AND OTHER INCOME
Service charges and fees 661 661 672 541 486
Commissions 481 464 448 356 389
Fiduciary and asset management fees 466 477 478 400 384
Advisory, underwriting and other investment banking fees 225 240 223 177 238
Principal investing (42) (90) (21) (585) (58)
Other income 319 275 260 143 191
- ----------------------------------------------------------------------------------------------------------------------------------
Total fee and other income 2,110 2,027 2,060 1,032 1,630
- ----------------------------------------------------------------------------------------------------------------------------------
NONINTEREST EXPENSE
Salaries and employee benefits 1,646 1,663 1,663 1,374 1,400
Occupancy 194 195 210 176 180
Equipment 231 226 247 214 207
Advertising 25 19 21 15 16
Communications and supplies 132 134 142 117 111
Professional and consulting fees 96 88 113 79 84
Goodwill and other intangible amortization 161 168 251 117 77
Merger-related and restructuring charges 143 (8) 88 85 (69)
Sundry expense 279 284 295 218 191
- ----------------------------------------------------------------------------------------------------------------------------------
Total noninterest expense 2,907 2,769 3,030 2,395 2,197
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) before income taxes (benefits) 1,267 1,345 1,081 (557) 921
Income taxes (benefits) 399 432 345 (223) 288
- ----------------------------------------------------------------------------------------------------------------------------------
Net income (loss) 868 913 736 (334) 633
Dividends on preferred stock 6 6 6 - -
- ----------------------------------------------------------------------------------------------------------------------------------
Net income (loss) available to common stockholders $ 862 907 730 (334) 633
==================================================================================================================================
PER COMMON SHARE DATA
Basic earnings $ 0.63 0.67 0.54 (0.31) 0.65
Diluted earnings 0.63 0.66 0.54 (0.31) 0.64
Cash dividends $ 0.24 0.24 0.24 0.24 0.24
AVERAGE COMMON SHARES
Basic 1,360 1,355 1,352 1,094 969
Diluted 1,375 1,366 1,363 1,105 978
==================================================================================================================================
Page 11
WACHOVIA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
- --------------------------------------------------------------------------------------------------
Six Months Ended
June 30,
----------------------------
(In millions, except per share data) 2002 2001
- --------------------------------------------------------------------------------------------------
INTEREST INCOME
Interest and fees on loans $ 5,200 4,946
Interest and dividends on securities 1,762 1,806
Trading account interest 328 402
Other interest income 507 691
- --------------------------------------------------------------------------------------------------
Total interest income 7,797 7,845
- --------------------------------------------------------------------------------------------------
INTEREST EXPENSE
Interest on deposits 1,751 2,445
Interest on short-term borrowings 586 947
Interest on long-term debt 573 1,040
- --------------------------------------------------------------------------------------------------
Total interest expense 2,910 4,432
- --------------------------------------------------------------------------------------------------
Net interest income 4,887 3,413
Provision for loan losses 736 442
- --------------------------------------------------------------------------------------------------
Net interest income after provision for loan losses 4,151 2,971
- --------------------------------------------------------------------------------------------------
FEE AND OTHER INCOME
Service charges and fees 1,322 954
Commissions 945 764
Fiduciary and asset management fees 943 765
Advisory, underwriting and other investment banking fees 465 436
Principal investing (132) (101)
Other income 594 386
- --------------------------------------------------------------------------------------------------
Total fee and other income 4,137 3,204
- --------------------------------------------------------------------------------------------------
NONINTEREST EXPENSE
Salaries and employee benefits 3,309 2,773
Occupancy 389 344
Equipment 457 418
Advertising 44 30
Communications and supplies 266 221
Professional and consulting fees 184 167
Goodwill and other intangible amortization 329 155
Merger-related and restructuring charges 135 (67)
Sundry expense 563 365
- --------------------------------------------------------------------------------------------------
Total noninterest expense 5,676 4,406
- --------------------------------------------------------------------------------------------------
Income before income taxes 2,612 1,769
Income taxes 831 552
- --------------------------------------------------------------------------------------------------
Net income 1,781 1,217
Dividends on preferred stock 12 -
- --------------------------------------------------------------------------------------------------
Net income available to common stockholders $ 1,769 1,217
==================================================================================================
PER COMMON SHARE DATA
Basic earnings $ 1.30 1.24
Diluted earnings 1.29 1.23
Cash dividends $ 0.48 0.48
AVERAGE COMMON SHARES
Basic 1,357 969
Diluted 1,370 977
==================================================================================================
PAGE 12
WACHOVIA CORPORATION AND SUBSIDIARIES
LOANS - ON-BALANCE SHEET, AND MANAGED AND SERVICING PORTFOLIOS
(Unaudited)
- ----------------------------------------------------------------------------------------------------------------------------
2002 2001
------------------------ -----------------------------------
Second First Fourth Third Second
(In millions) Quarter Quarter Quarter Quarter Quarter
- ----------------------------------------------------------------------------------------------------------------------------
ON-BALANCE SHEET LOAN PORTFOLIO
COMMERCIAL
Commercial, financial and agricultural $ 57,984 60,385 61,258 63,616 52,516
Real estate - construction and other 8,035 8,137 7,969 7,457 3,060
Real estate - mortgage 17,349 17,186 17,234 17,156 7,964
Lease financing 22,044 22,223 21,958 21,625 16,903
Foreign 7,241 6,920 7,653 7,572 5,920
- ----------------------------------------------------------------------------------------------------------------------------
Total commercial 112,653 114,851 116,072 117,426 86,363
- ----------------------------------------------------------------------------------------------------------------------------
CONSUMER
Real estate - mortgage 19,803 20,901 22,139 25,466 17,277
Installment loans 35,940 36,073 34,666 35,577 24,597
Vehicle leasing 168 345 618 941 1,231
- ----------------------------------------------------------------------------------------------------------------------------
Total consumer 55,911 57,319 57,423 61,984 43,105
- ----------------------------------------------------------------------------------------------------------------------------
Total loans 168,564 172,170 173,495 179,410 129,468
Unearned income 9,764 9,876 9,694 9,730 6,976
- ----------------------------------------------------------------------------------------------------------------------------
Loans, net (on-balance sheet) $ 158,800 162,294 163,801 169,680 122,492
============================================================================================================================
MANAGED PORTFOLIO (a)
- ----------------------------------------------------------------------------------------------------------------------------
COMMERCIAL
On-balance sheet loan portfolio $ 112,653 114,851 116,072 117,426 86,363
Securitized loans - off-balance sheet 2,318 5,816 5,827 6,613 6,284
Loans held for sale included in other assets 779 962 1,478 1,648 369
- ----------------------------------------------------------------------------------------------------------------------------
Total commercial 115,750 121,629 123,377 125,687 93,016
- ----------------------------------------------------------------------------------------------------------------------------
CONSUMER
Real estate - mortgage
On-balance sheet loan portfolio 19,803 20,901 22,139 25,466 17,277
Securitized loans included in securities 4,868 4,181 5,344 2,506 2,625
Loans held for sale included in other assets 1,387 1,554 2,420 1,687 2,294
- ----------------------------------------------------------------------------------------------------------------------------
Total real estate - mortgage 26,058 26,636 29,903 29,659 22,196
- ----------------------------------------------------------------------------------------------------------------------------
Installment loans
On-balance sheet loan portfolio 35,940 36,073 34,666 35,577 24,597
Securitized loans - off-balance sheet 13,379 13,989 14,095 12,746 12,909
Securitized loans included in securities 8,918 9,230 9,776 9,460 9,755
Loans held for sale included in other assets 6,232 4,615 3,865 3,502 3,300
- ----------------------------------------------------------------------------------------------------------------------------
Total installment loans 64,469 63,907 62,402 61,285 50,561
- ----------------------------------------------------------------------------------------------------------------------------
Vehicle leasing - on-balance sheet loan portfolio 168 345 618 941 1,231
- ----------------------------------------------------------------------------------------------------------------------------
Total consumer 90,695 90,888 92,923 91,885 73,988
- ----------------------------------------------------------------------------------------------------------------------------
Total managed portfolio $ 206,445 212,517 216,300 217,572 167,004
============================================================================================================================
SERVICING PORTFOLIO (b)
Commercial $ 50,001 47,657 42,210 41,394 38,943
Consumer $ 1,773 1,844 2,900 2,807 2,929
============================================================================================================================
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 manage 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)
- -----------------------------------------------------------------------------------------------------------------------------------
2002 2001
--------------------------- -------------------------------------
Second First Fourth Third Second
(In millions) Quarter Quarter Quarter Quarter Quarter
- -----------------------------------------------------------------------------------------------------------------------------------
ALLOWANCE FOR LOAN LOSSES
Balance, beginning of period $ 2,986 2,995 3,039 1,760 1,759
Provision for loan losses relating to loans
transferred to other assets or sold 23 14 3 230 36
Provision for loan losses 374 325 378 894 187
Former Wachovia balance, September 1, 2001 - - - 766 -
Allowance relating to loans acquired, transferred
to other assets or sold (58) (23) (47) (368) (65)
Loan losses, net (374) (325) (378) (243) (157)
- -----------------------------------------------------------------------------------------------------------------------------------
Balance, end of period $ 2,951 2,986 2,995 3,039 1,760
===================================================================================================================================
as % of loans, net 1.86 % 1.84 1.83 1.79 1.44
===================================================================================================================================
as % of nonaccrual and restructured loans (a) 163 % 177 195 202 144
===================================================================================================================================
as % of nonperforming assets (a) 150 % 162 175 186 133
===================================================================================================================================
LOAN LOSSES
Commercial, financial and agricultural $ 319 275 333 192 122
Real estate - commercial construction and mortgage 3 2 2 1 3
Real estate - residential mortgage 1 4 - 1 2
Installment loans and vehicle leasing 86 100 90 80 64
- -----------------------------------------------------------------------------------------------------------------------------------
Total loan losses 409 381 425 274 191
- -----------------------------------------------------------------------------------------------------------------------------------
LOAN RECOVERIES
Commercial, financial and agricultural 16 36 30 14 15
Real estate - commercial construction and mortgage 2 - 1 1 5
Real estate - residential mortgage - - - 1 -
Installment loans and vehicle leasing 17 20 16 15 14
- -----------------------------------------------------------------------------------------------------------------------------------
Total loan recoveries 35 56 47 31 34
- -----------------------------------------------------------------------------------------------------------------------------------
Loan losses, net $ 374 325 378 243 157
===================================================================================================================================
Commercial loans net charge-offs as % of
average commercial loans, net (b) 1.24 % 0.97 1.19 0.85 0.55
Consumer loans net charge-offs as % of
average consumer loans, net (b) 0.48 0.59 0.48 0.53 0.48
Total net charge-offs as % of average loans, net (b) 0.97 % 0.83 0.93 0.73 0.52
===================================================================================================================================
NONPERFORMING ASSETS
Nonaccrual loans
Commercial, financial and agricultural $ 1,456 1,371 1,294 1,253 1,069
Real estate - commercial construction and mortgage 144 128 87 63 19
Real estate - residential mortgage 60 58 60 75 45
Installment loans and vehicle leasing 145 128 93 115 90
- -----------------------------------------------------------------------------------------------------------------------------------
Total nonaccrual loans 1,805 1,685 1,534 1,506 1,223
Foreclosed properties (c) 156 159 179 126 104
- -----------------------------------------------------------------------------------------------------------------------------------
Total nonperforming assets $ 1,961 1,844 1,713 1,632 1,327
===================================================================================================================================
Nonperforming loans included in loans held for sale (d) $ 108 213 228 273 250
Nonperforming assets included in loans and in loans
held for sale $ 2,069 2,057 1,941 1,905 1,577
===================================================================================================================================
as % of loans, net, and foreclosed properties (a) 1.23 % 1.14 1.04 0.96 1.08
===================================================================================================================================
as % of loans, net, foreclosed properties and loans in
other assets as held for sale (d) 1.24 % 1.21 1.13 1.08 1.23
===================================================================================================================================
Accruing loans past due 90 days $ 250 275 288 310 213
===================================================================================================================================
(a) These ratios do not include nonperforming loans included in loans held for
sale.
(b) Annualized.
(c) Restructured loans are insignificant.
(d) These ratios reflect nonperforming loans included in loans held for sale.
Loans held for sale, which are included in other assets, are recorded at the
lower of cost or market value, and accordingly, the amount shown and included in
the ratios is net of the transferred allowance for loan losses and the lower of
cost or market value adjustments.
PAGE 14
WACHOVIA CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
2002 2001
----------------------------- --------------------------------------
Second First Fourth Third Second
(In millions, except per share data) Quarter Quarter Quarter Quarter Quarter
- ------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Cash and due from banks $ 10,668 10,038 13,917 10,051 8,665
Interest-bearing bank balances 2,269 3,356 6,875 2,128 1,666
Federal funds sold and securities purchased
under resale agreements 11,541 13,154 13,919 9,354 9,161
- ------------------------------------------------------------------------------------------------------------------------------------
Total cash and cash equivalents 24,478 26,548 34,711 21,533 19,492
- ------------------------------------------------------------------------------------------------------------------------------------
Trading account assets 34,570 28,227 25,386 26,763 23,181
Securities 60,999 57,382 58,467 56,929 48,055
Loans, net of unearned income 158,800 162,294 163,801 169,680 122,492
Allowance for loan losses (2,951) (2,986) (2,995) (3,039) (1,760)
- ------------------------------------------------------------------------------------------------------------------------------------
Loans, net 155,849 159,308 160,806 166,641 120,732
- ------------------------------------------------------------------------------------------------------------------------------------
Premises and equipment 5,494 5,596 5,719 5,775 4,852
Due from customers on acceptances 1,105 888 745 796 856
Goodwill 10,728 10,728 10,616 10,496 3,476
Intangible assets 1,827 1,988 2,156 2,441 149
Other assets 29,623 29,188 31,846 34,523 25,148
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets $ 324,673 319,853 330,452 325,897 245,941
====================================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Noninterest-bearing deposits 39,558 39,323 43,464 36,382 29,633
Interest-bearing deposits 141,105 140,710 143,989 144,167 108,934
- ------------------------------------------------------------------------------------------------------------------------------------
Total deposits 180,663 180,033 187,453 180,549 138,567
Short-term borrowings 46,109 46,559 44,385 44,303 34,754
Bank acceptances outstanding 1,110 892 762 798 859
Trading account liabilities 14,108 10,261 11,437 10,084 7,907
Other liabilities 14,380 13,387 16,227 18,424 11,650
Long-term debt 37,931 39,936 41,733 43,233 36,060
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 294,301 291,068 301,997 297,391 229,797
- ------------------------------------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
Dividend Equalization Preferred shares, no par value,
97 million shares issued and outstanding at June 30, 2002 5 11 17 - -
Common stock, $3.33-1/3 par value; authorized 3 billion
shares, outstanding 1.371 billion shares at June 30, 2002 4,570 4,559 4,539 4,537 3,264
Paid-in capital 18,086 17,989 17,911 17,835 6,345
Retained earnings 6,676 6,136 5,551 5,139 6,627
Accumulated other comprehensive income, net 1,035 90 437 995 (92)
- ------------------------------------------------------------------------------------------------------------------------------------
Total stockholders' equity 30,372 28,785 28,455 28,506 16,144
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 324,673 319,853 330,452 325,897 245,941
====================================================================================================================================
PAGE 15
WACHOVIA CORPORATION AND SUBSIDIARIES
NET INTEREST INCOME SUMMARIES
(Unaudited)
- -----------------------------------------------------------------------------------------------------------------------------------
SECOND QUARTER 2002 FIRST QUARTER 2002
-------------------------------------- --------------------------------------
Average Average
Interest Rates Interest Rates
Average Income/ Earned/ Average Income/ Earned/
(In millions) Balances Expense Paid Balances Expense Paid
- -----------------------------------------------------------------------------------------------------------------------------------
ASSETS
Interest-bearing bank balances $ 2,613 13 2.02% $ 4,341 22 2.07%
Federal funds sold and securities
purchased under resale agreements 10,835 85 3.18 12,020 93 3.13
Trading account assets 16,248 186 4.57 14,703 165 4.53
Securities 58,282 933 6.40 56,287 884 6.29
Loans
Commercial
Commercial, financial and agricultural 58,534 1,027 7.03 59,927 1,049 7.10
Real estate - construction and other 8,115 84 4.19 8,126 86 4.28
Real estate - mortgage 17,310 231 5.36 17,163 238 5.61
Lease financing 7,286 193 10.60 7,442 193 10.37
Foreign 7,058 60 3.37 6,831 62 3.71
- ----------------------------------------------------------------------- --------------------
Total commercial 98,303 1,595 6.50 99,489 1,628 6.62
- ----------------------------------------------------------------------- --------------------
Consumer
Real estate - mortgage 20,104 318 6.34 21,444 354 6.60
Installment loans and vehicle leasing 36,678 664 7.25 36,131 668 7.49
- ----------------------------------------------------------------------- --------------------
Total consumer 56,782 982 6.93 57,575 1,022 7.16
- ----------------------------------------------------------------------- --------------------
Total loans 155,085 2,577 6.66 157,064 2,650 6.82
- ----------------------------------------------------------------------- --------------------
Other earning assets 11,361 154 5.42 11,073 140 5.13
- ----------------------------------------------------------------------- --------------------
Total earning assets 254,424 3,948 6.22 255,488 3,954 6.24
============================ ==========================
Cash and due from banks 9,522 10,047
Other assets 50,179 49,281
- -------------------------------------------------------------- ---------
Total assets $ 314,125 $ 314,816
============================================================== =========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Interest-bearing deposits
Savings and NOW accounts 49,341 183 1.49 48,931 175 1.45
Money market accounts 41,451 230 2.23 38,974 271 2.82
Other consumer time 36,973 365 3.96 38,182 399 4.24
Foreign 7,195 33 1.88 7,578 35 1.85
Other time 4,804 25 1.98 6,735 35 2.17
- ----------------------------------------------------------------------- --------------------
Total interest-bearing deposits 139,764 836 2.40 140,400 915 2.64
Federal funds purchased and securities
sold under repurchase agreements 31,894 229 2.88 31,940 211 2.68
Commercial paper 3,025 8 1.17 3,435 10 1.15
Other short-term borrowings 10,039 63 2.51 10,550 65 2.51
Long-term debt 39,107 297 3.04 41,057 276 2.69
- ----------------------------------------------------------------------- --------------------
Total interest-bearing liabilities 223,829 1,433 2.57 227,382 1,477 2.63
============================ ==========================
Noninterest-bearing deposits 37,844 37,603
Other liabilities 22,877 20,928
Stockholders' equity 29,575 28,903
- -------------------------------------------------------------- ---------
Total liabilities and stockholders' equity $ 314,125 $ 314,816
============================================================== =========
Interest income and rate earned $ 3,948 6.22% $ 3,954 6.24%
Interest expense and equivalent rate paid 1,433 2.26 1,477 2.34
- ------------------------------------------------------------------------------------------- --------------------------
Net interest income and margin (a) $ 2,515 3.96% $ 2,477 3.90%
=========================================================================================== ==========================
(a) The net interest margin includes (in basis points): 39,47,27,18, and 13 in
the second and first quarters of 2002 and in the fourth, third and second
quarters of 2001, respectively, in net interest income from hedge-related
derivative transactions.
PAGE 16
WACHOVIA CORPORATION AND SUBSIDIARIES
NET INTEREST INCOME SUMMARIES
(Unaudited)
- -------------------------------------------------------------------------------------------------------------------------
FOURTH QUARTER 2001 THIRD QUARTER 2001 SECOND QUARTER 2001
---------------------------------- ------------------------------------ ---------------------------------------
Average Average Average
Interest Rates Interest Rates Interest Rates
Average Income/ Earned/ Average Income/ Earned/ Average Income/ Earned/
Balances Expense Paid Balances Expense Paid Balances Expense Paid
-----------------------------------------------------------------------------------------------------------------------
$ 3,333 21 2.50% $ 1,740 17 3.86% $ 2,529 29 4.57%
11,784 99 3.32 10,031 107 4.25 8,923 99 4.41
14,552 175 4.81 14,572 199 5.43 13,965 202 5.78
55,708 905 6.49 50,621 877 6.93 49,931 899 7.21
62,220 1,202 7.67 55,490 1,142 8.17 53,160 1,098 8.29
7,919 101 5.02 4,512 66 5.88 3,193 52 6.56
17,139 263 6.10 10,923 184 6.66 8,525 149 7.01
7,578 199 10.51 6,441 168 10.42 6,075 157 10.29
7,374 81 4.34 6,267 83 5.26 5,425 83 6.12
---------------------- ----------------------- -------------------------
102,230 1,846 7.17 83,633 1,643 7.80 76,378 1,539 8.08
---------------------- ----------------------- -------------------------
24,032 414 6.90 19,816 353 7.12 17,435 318 7.29
36,577 724 7.87 29,577 637 8.57 25,399 572 9.02
---------------------- ----------------------- -------------------------
60,609 1,138 7.49 49,393 990 7.99 42,834 890 8.32
---------------------- ----------------------- -------------------------
162,839 2,984 7.29 133,026 2,633 7.87 119,212 2,429 8.17
---------------------- ----------------------- -------------------------
11,668 179 6.11 9,682 155 6.35 10,113 193 7.68
---------------------- ----------------------- -------------------------
259,884 4,363 6.68 219,672 3,988 7.23 204,673 3,851 7.54
=================== ===================== =====================
9,814 8,357 7,568
49,024 39,337 35,013
----------- --------- ------------
$ 318,722 $ 267,366 $ 247,254
=========== ========= ============
47,527 222 1.85 41,897 259 2.46 39,640 267 2.70
36,306 289 3.16 24,904 269 4.28 18,746 225 4.81
40,951 484 4.69 35,484 474 5.30 33,268 477 5.76
8,603 56 2.58 7,441 71 3.74 6,357 73 4.62
9,043 65 2.81 10,574 110 4.13 11,587 150 5.20
---------------------- ----------------------- -------------------------
142,430 1,116 3.11 120,300 1,183 3.90 109,598 1,192 4.36
33,028 298 3.59 26,982 332 4.87 27,128 356 5.27
3,709 29 3.07 2,950 25 3.36 2,435 25 4.08
9,617 45 1.86 9,870 60 2.45 9,809 73 2.98
42,979 391 3.64 38,220 414 4.34 36,254 463 5.11
---------------------- ----------------------- -------------------------
231,763 1,879 3.22 198,322 2,014 4.04 185,224 2,109 4.57
=================== ===================== =====================
37,042 29,918 27,381
21,377 18,796 18,623
28,540 20,330 16,026
----------- --------- ------------
$ 318,722 $ 267,366 $ 247,254
=========== ========= ============
$ 4,363 6.68% $ 3,988 7.23% $ 3,851 7.54%
1,879 2.87 2,014 3.65 2,109 4.13
------------------- --------------------- ---------------------
$ 2,484 3.81% $ 1,974 3.58% $ 1,742 3.41%
=================== ===================== =====================
PAGE 17
WACHOVIA CORPORATION AND SUBSIDIARIES
NET INTEREST INCOME SUMMARIES
(Unaudited)
- -----------------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED 2002 SIX MONTHS ENDED 2001
------------------------------- -----------------------------------
Average Average
Interest Rates Interest Rates
Average Income/ Earned/ Average Income/ Earned/
(In millions) Balances Expense Paid Balances Expense Paid
- -----------------------------------------------------------------------------------------------------------------------------
ASSETS
Interest-bearing bank balances $ 3,472 35 2.05% $ 2,179 54 5.04%
Federal funds sold and securities
purchased under resale agreements 11,424 178 3.15 7,985 194 4.89
Trading account assets 15,480 351 4.55 13,642 408 6.00
Securities 57,290 1,817 6.34 50,173 1,844 7.35
Loans
Commercial
Commercial, financial and agricultural 59,227 2,076 7.07 53,286 2,228 8.43
Real estate - construction and other 8,120 170 4.23 3,212 114 7.16
Real estate - mortgage 17,237 469 5.49 8,858 329 7.50
Lease financing 7,364 386 10.48 6,080 318 10.46
Foreign 6,945 122 3.54 5,385 175 6.56
- ------------------------------------------------------------------------- -----------------------
Total commercial 98,893 3,223 6.56 76,821 3,164 8.30
- ------------------------------------------------------------------------- -----------------------
Consumer
Real estate - mortgage 20,771 672 6.47 17,522 649 7.41
Installment loans and vehicle leasing 36,405 1,332 7.37 25,186 1,152 9.22
- ------------------------------------------------------------------------- -----------------------
Total consumer 57,176 2,004 7.04 42,708 1,801 8.47
- ------------------------------------------------------------------------- -----------------------
Total loans 156,069 5,227 6.74 119,529 4,965 8.36
- ------------------------------------------------------------------------- -----------------------
Other earning assets 11,218 294 5.28 10,691 443 8.35
- ------------------------------------------------------------------------- -----------------------
Total earning assets 254,953 7,902 6.23 204,199 7,908 7.78
================== ====================
Cash and due from banks 9,783 7,658
Other assets 49,732 34,510
- -------------------------------------------------------------- ----------
Total assets $ 314,468 $ 246,367
============================================================== ==========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Interest-bearing deposits
Savings and NOW accounts 49,137 358 1.47 39,200 531 2.73
Money market accounts 40,219 501 2.51 18,346 425 4.67
Other consumer time 37,575 764 4.10 33,857 983 5.86
Foreign 7,385 68 1.87 6,603 167 5.12
Other time 5,765 60 2.09 11,911 339 5.75
- ------------------------------------------------------------------------- -----------------------
Total interest-bearing deposits 140,081 1,751 2.52 109,917 2,445 4.49
Federal funds purchased and securities
sold under repurchase agreements 31,917 440 2.78 26,072 734 5.68
Commercial paper 3,229 18 1.16 2,487 58 4.71
Other short-term borrowings 10,291 128 2.51 9,695 155 3.21
Long-term debt 40,077 573 2.86 36,442 1,040 5.71
- ------------------------------------------------------------------------- -----------------------
Total interest-bearing liabilities 225,595 2,910 2.60 184,613 4,432 4.83
================== ====================
Noninterest-bearing deposits 37,724 27,213
Other liabilities 21,908 18,604
Stockholders' equity 29,241 15,937
- -------------------------------------------------------------- ----------
Total liabilities and stockholders' equity $ 314,468 $ 246,367
============================================================== ==========
Interest income and rate earned $ 7,902 6.23% $ 7,908 7.78%
Interest expense and equivalent rate paid 2,910 2.30 4,432 4.36
- ----------------------------------------------------------------------------------- --------------------
Net interest income and margin (a) $ 4,992 3.93% $ 3,476 3.42%
=================================================================================== ====================
(a) The net interest margin includes (in basis points): 43 and 14 for the six
months ended June 30, 2002, and June 30, 2001, respectively, in net interest
income from hedge-related derivative transactions.