Wachovia Releases First Quarter Financial Results Operating Earnings Per Share of $1.22

Apr 18, 2001, 01:00 ET from Wachovia Corporation

     WINSTON-SALEM, N.C., April 18 /PRNewswire/ -- Wachovia Corporation's
 (NYSE:   WB) first quarter operating earnings were $1.22 per diluted share
 compared with $1.30 per diluted share a year earlier.  Operating net income,
 which excludes nonrecurring charges, was $252.5 million compared with
 $264.5 million for the first quarter of 2000.  Revenues rose from the first
 quarter of 2000 despite the slowing economy.  Expenses remained substantially
 unchanged from a year ago and were down excluding acquisitions.  Nonperforming
 loans declined 18 percent during the period.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/20000711/WACHLOGO )
     "We are pleased to report steady earnings in a period of slowing economic
 conditions," said L.M. Baker Jr., chairman and chief executive officer.  "The
 decrease in nonperforming loans reflects aggressive steps taken to manage
 credit risk.  Expense control initiatives have been successful and will have
 ongoing benefit to future earnings."
 
       Wachovia Corporation (WB)                    First Quarter
       Financial Summary *                          2001      2000
       Operating net income ($ millions)           $252.5    $264.5
       Operating earnings per diluted share         $1.22     $1.30
       Total revenue ($ millions) **             $1,130.1  $1,099.6
       Return on equity                             15.69%    18.60%
       Return on assets                              1.37%     1.56%
 
        *  excludes nonrecurring charges
        ** includes taxable equivalent net interest income and other
           operating revenue
 
     Reported net income was $242.1 million or $1.17 per diluted share for the
 first quarter compared with $244.7 million or $1.20 per diluted share a year
 ago.  Included in first quarter 2001 reported pretax earnings were
 $13.2 million for the final restructuring charge associated with Wachovia's
 resource realignment project.  First quarter 2000 reported pretax earnings
 included $28.2 million in nonrecurring charges.
     Total revenues, excluding securities gains, rose $30.5 million from the
 first quarter of 2000 and were up $24.8 million from the fourth quarter.  The
 net yield on interest earning assets was 3.93 percent as compared with
 4.20 percent in the first quarter of 2000 and 3.94 percent in the fourth
 quarter.  Net interest income was up from both periods of 2000 despite the
 decline in the net yield.  Average loans rose $5.1 billion or 10.1 percent
 from the first quarter of 2000, with good growth in commercial and residential
 real estate and in other retail loans.  Growth occurred in most categories of
 other operating revenue except investment fees, due to softer market
 conditions, and credit card income.
     The provision for loan losses was $121.5 million for the first quarter
 compared with $73.7 million a year ago and $117.5 million for the prior
 quarter.  At March 31, 2001, the allowance for loan losses represented
 1.50 percent of outstanding loans, compared with 1.17 percent a year earlier
 and 1.50 percent at the end of 2000.  Nonperforming loans were down
 $90 million from December 31, 2000, to $410 million at March 31, 2001.  As
 expected, net loan losses at $118.7 million for the first quarter were above
 the $73.3 million reported a year ago and the $94.4 million reported in the
 fourth quarter.  As a percentage of average loans outstanding, net loan losses
 were .85 percent for the first quarter 2001 compared with .58 percent a year
 earlier and .70 percent in the fourth quarter.
     Operating expense, excluding nonrecurring charges, increased 1.4 percent
 from the first quarter of 2000.  Adjusting for acquisitions, operating expense
 decreased approximately 2 percent compared with first quarter 2000.  The
 decrease for the quarter primarily reflects lower incentive compensation and
 management's ongoing efforts to control costs.
     On Monday, Wachovia announced a definitive agreement for a proposed merger
 of equals with First Union Corporation.  The transaction is expected to close
 in the third quarter.  The combined company will be the largest financial
 holding company in the Southeast/East Coast region and the fourth largest
 nationwide.
     Earlier this month, Wachovia announced an agreement to sell its consumer
 credit card business after carefully considering several strategic
 alternatives.  The transaction is expected to close in the second quarter,
 subject to regulatory approval.
 
     Wachovia will hold a conference call to discuss these results on
 April 18, 2001, at 9:30 a.m. (Eastern Time).  The call will be available via
 the Internet at www.wachovia.com/investor/conference.asp or by calling
 913-981-5592.  Replays of the conference call will be available from 12:30
 p.m. April 18 until midnight April 22 at the same Internet address or by phone
 (719-457-0820, access code 797962).
 
     This news release contains forward-looking statements regarding Wachovia
 Corporation.  All forward-looking statements involve risk and uncertainty and
 actual results could differ materially from the anticipated results or other
 expectations expressed in the forward-looking statements.  A discussion of
 factors that could cause actual results to differ materially from those
 expressed in the forward-looking statements is included in Wachovia's filings
 with the Securities and Exchange Commission.
 
     Additional information can be found in the Investor Relations section of
 Wachovia's Web site at www.wachovia.com/investor
 
 
     W A C H O V I A  C O R P O R A T I O N  A N D  S U B S I D I A R I E S
     FINANCIAL SUMMARY
 
                                                  Three Months Ended
                                                       March 31
                                                                      Percent
                                                  2001          2000 Variance
     SUMMARY OF OPERATIONS
     (thousands, except per share data)
     Interest income -
       taxable equivalent                 $  1,358,859  $  1,254,658     8.3
     Interest expense                          720,355       625,861    15.1
     Net interest income -
       taxable equivalent                      638,504       628,797     1.5
     Taxable equivalent adjustment               8,663         9,301    (6.9)
     Net interest income                       629,841       619,496     1.7
     Provision for loan losses                 121,500        73,666    64.9
     Net interest income after
       provision for loan losses               508,341       545,830    (6.9)
     Other operating revenue                   491,586       470,799     4.4
     Securities gains (losses)                   9,076           167
     Total other income                        500,662       470,966     6.3
     Personnel expense                         334,673       343,881    (2.7)
     Merger-related charges                         --         8,158
     Litigation settlement charge                   --        20,000
     Restructuring charge                       13,152            --
     Other expense                             283,897       265,939     6.8
     Total other expense                       631,722       637,978    (1.0)
     Income before income taxes                377,281       378,818    (0.4)
     Applicable income taxes                   135,189       134,111     0.8
     Net income                           $    242,092  $    244,707    (1.1)
 
     Net income per common share:
       Basic                              $       1.17  $       1.21    (3.3)
       Diluted                            $       1.17  $       1.20    (2.5)
     Cash dividends paid per
        common share                      $        .60  $        .54    11.1
     Average basic shares outstanding          206,061       202,464     1.8
     Average diluted shares outstanding        207,569       204,213     1.6
 
     PERFORMANCE RATIOS
     (averages)
     Annualized net yield on
       interest-earning assets                    3.93 %        4.20 %
     Annualized return on assets                  1.31          1.44
     Annualized return on
       shareholders' equity                      15.04         17.21
     Overhead ratio                              55.90         58.02
 
     OPERATING PERFORMANCE (1)
     Net income                           $    252,541  $    264,510    (4.5)
     Net income per diluted
       common share                       $       1.22  $       1.30    (6.2)
     Annualized return on assets                  1.37 %        1.56 %
     Annualized return on
       shareholders' equity                      15.69         18.60
     Overhead ratio                              54.74         55.46
 
     CASH-BASIS FINANCIAL INFORMATION (1), (2)
     Net income                           $    272,826  $    281,589    (3.1)
     Net income per diluted common share  $       1.31  $       1.38    (5.1)
     Annualized return on assets                  1.51 %        1.69 %
     Annualized return on
       shareholders' equity                      20.94         24.27
     Overhead ratio                              52.52         53.57
 
     (1)  Excludes the effects of merger-related, litigation settlement and
           restructuring charges
     (2)  Excludes the effects of purchase accounting-related intangibles
 
 
     W A C H O V I A  C O R P O R A T I O N  A N D  S U B S I D I A R I E S
     FINANCIAL SUMMARY
 
                                                Three Months Ended
                                                     March 31
                                                                      Percent
                                                2001          2000   Variance
     SELECTED AVERAGE
     BALANCES
     (millions)
     Total assets                         $   73,800    $   67,755       8.9
     Loans - net of unearned income           55,659        50,550      10.1
     Loans (managed) (2)                      59,109        53,435      10.6
     Securities                                8,987         8,395       7.1
     Other interest-earning assets             1,224         1,245      (1.7)
     Total interest-earning assets            65,870        60,190       9.4
     Interest-bearing deposits                35,727        34,873       2.4
     Short-term borrowed funds                10,196         8,920      14.3
     Long-term debt                           10,721         8,081      32.7
     Total interest-bearing liabilities       56,644        51,874       9.2
     Noninterest-bearing deposits              8,264         8,319      (0.7)
     Total deposits                           43,991        43,192       1.8
     Shareholders' equity                      6,439         5,688      13.2
 
     CREDIT QUALITY DATA
     (thousands)
     Nonperforming assets                 $  436,964    $  246,107      77.6
     Nonperforming loans                     410,064       226,176      81.3
     Loans past due 90 days or
       more and still accruing               158,623       126,318      25.6
     Net loan losses                         118,717        73,325      61.9
     Net loan losses (managed) (2)           166,288       107,611      54.5
     Net loan losses excluding credit
       cards                                  60,938        20,571     196.2
     Allowance for loan losses               851,082       595,655      42.9
     Nonperforming assets to total
       loans and foreclosed property             .77  %        .48 %
     Annualized net loan losses to
       average loans                             .85           .58
     Annualized net loan losses to
       average loans (managed) (2)              1.13           .81
     Annualized net loan losses to
       average loans excluding
       credit cards                              .48           .18
     Allowance for loans losses to
       total loans                              1.50          1.17
     Allowance for loan losses times
       nonperforming loans                      2.08  x       2.63 x
 
     SELECTED FINANCIAL DATA AT PERIOD-END
     (millions, except per share data)
     Total assets                         $   75,606    $   68,817       9.9
     Interest-earning assets                  67,467        61,137      10.4
     Loans - net of unearned income           56,703        51,125      10.9
     Loans (managed) (2)                      59,977        54,521      10.0
     Deposits                                 45,617        43,716       4.3
     Shareholders' equity                      6,865         5,846      17.4
     Shareholders' equity to total assets       9.08  %       8.50 %
     Risk-based capital ratios:
       Tier I capital                            7.8 (1)       7.4
       Total capital                            11.8 (1)      11.2
     Per share:
       Book value                         $    32.64    $    28.88      13.0
       Common stock closing price (NYSE)  $    60.25    $    67.56     (10.8)
     Common shares outstanding (thousands)   210,335       202,456
 
     (1)  Estimated
     (2)  Includes securitized credit card receivables
 
 

SOURCE Wachovia Corporation
     WINSTON-SALEM, N.C., April 18 /PRNewswire/ -- Wachovia Corporation's
 (NYSE:   WB) first quarter operating earnings were $1.22 per diluted share
 compared with $1.30 per diluted share a year earlier.  Operating net income,
 which excludes nonrecurring charges, was $252.5 million compared with
 $264.5 million for the first quarter of 2000.  Revenues rose from the first
 quarter of 2000 despite the slowing economy.  Expenses remained substantially
 unchanged from a year ago and were down excluding acquisitions.  Nonperforming
 loans declined 18 percent during the period.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/20000711/WACHLOGO )
     "We are pleased to report steady earnings in a period of slowing economic
 conditions," said L.M. Baker Jr., chairman and chief executive officer.  "The
 decrease in nonperforming loans reflects aggressive steps taken to manage
 credit risk.  Expense control initiatives have been successful and will have
 ongoing benefit to future earnings."
 
       Wachovia Corporation (WB)                    First Quarter
       Financial Summary *                          2001      2000
       Operating net income ($ millions)           $252.5    $264.5
       Operating earnings per diluted share         $1.22     $1.30
       Total revenue ($ millions) **             $1,130.1  $1,099.6
       Return on equity                             15.69%    18.60%
       Return on assets                              1.37%     1.56%
 
        *  excludes nonrecurring charges
        ** includes taxable equivalent net interest income and other
           operating revenue
 
     Reported net income was $242.1 million or $1.17 per diluted share for the
 first quarter compared with $244.7 million or $1.20 per diluted share a year
 ago.  Included in first quarter 2001 reported pretax earnings were
 $13.2 million for the final restructuring charge associated with Wachovia's
 resource realignment project.  First quarter 2000 reported pretax earnings
 included $28.2 million in nonrecurring charges.
     Total revenues, excluding securities gains, rose $30.5 million from the
 first quarter of 2000 and were up $24.8 million from the fourth quarter.  The
 net yield on interest earning assets was 3.93 percent as compared with
 4.20 percent in the first quarter of 2000 and 3.94 percent in the fourth
 quarter.  Net interest income was up from both periods of 2000 despite the
 decline in the net yield.  Average loans rose $5.1 billion or 10.1 percent
 from the first quarter of 2000, with good growth in commercial and residential
 real estate and in other retail loans.  Growth occurred in most categories of
 other operating revenue except investment fees, due to softer market
 conditions, and credit card income.
     The provision for loan losses was $121.5 million for the first quarter
 compared with $73.7 million a year ago and $117.5 million for the prior
 quarter.  At March 31, 2001, the allowance for loan losses represented
 1.50 percent of outstanding loans, compared with 1.17 percent a year earlier
 and 1.50 percent at the end of 2000.  Nonperforming loans were down
 $90 million from December 31, 2000, to $410 million at March 31, 2001.  As
 expected, net loan losses at $118.7 million for the first quarter were above
 the $73.3 million reported a year ago and the $94.4 million reported in the
 fourth quarter.  As a percentage of average loans outstanding, net loan losses
 were .85 percent for the first quarter 2001 compared with .58 percent a year
 earlier and .70 percent in the fourth quarter.
     Operating expense, excluding nonrecurring charges, increased 1.4 percent
 from the first quarter of 2000.  Adjusting for acquisitions, operating expense
 decreased approximately 2 percent compared with first quarter 2000.  The
 decrease for the quarter primarily reflects lower incentive compensation and
 management's ongoing efforts to control costs.
     On Monday, Wachovia announced a definitive agreement for a proposed merger
 of equals with First Union Corporation.  The transaction is expected to close
 in the third quarter.  The combined company will be the largest financial
 holding company in the Southeast/East Coast region and the fourth largest
 nationwide.
     Earlier this month, Wachovia announced an agreement to sell its consumer
 credit card business after carefully considering several strategic
 alternatives.  The transaction is expected to close in the second quarter,
 subject to regulatory approval.
 
     Wachovia will hold a conference call to discuss these results on
 April 18, 2001, at 9:30 a.m. (Eastern Time).  The call will be available via
 the Internet at www.wachovia.com/investor/conference.asp or by calling
 913-981-5592.  Replays of the conference call will be available from 12:30
 p.m. April 18 until midnight April 22 at the same Internet address or by phone
 (719-457-0820, access code 797962).
 
     This news release contains forward-looking statements regarding Wachovia
 Corporation.  All forward-looking statements involve risk and uncertainty and
 actual results could differ materially from the anticipated results or other
 expectations expressed in the forward-looking statements.  A discussion of
 factors that could cause actual results to differ materially from those
 expressed in the forward-looking statements is included in Wachovia's filings
 with the Securities and Exchange Commission.
 
     Additional information can be found in the Investor Relations section of
 Wachovia's Web site at www.wachovia.com/investor
 
 
     W A C H O V I A  C O R P O R A T I O N  A N D  S U B S I D I A R I E S
     FINANCIAL SUMMARY
 
                                                  Three Months Ended
                                                       March 31
                                                                      Percent
                                                  2001          2000 Variance
     SUMMARY OF OPERATIONS
     (thousands, except per share data)
     Interest income -
       taxable equivalent                 $  1,358,859  $  1,254,658     8.3
     Interest expense                          720,355       625,861    15.1
     Net interest income -
       taxable equivalent                      638,504       628,797     1.5
     Taxable equivalent adjustment               8,663         9,301    (6.9)
     Net interest income                       629,841       619,496     1.7
     Provision for loan losses                 121,500        73,666    64.9
     Net interest income after
       provision for loan losses               508,341       545,830    (6.9)
     Other operating revenue                   491,586       470,799     4.4
     Securities gains (losses)                   9,076           167
     Total other income                        500,662       470,966     6.3
     Personnel expense                         334,673       343,881    (2.7)
     Merger-related charges                         --         8,158
     Litigation settlement charge                   --        20,000
     Restructuring charge                       13,152            --
     Other expense                             283,897       265,939     6.8
     Total other expense                       631,722       637,978    (1.0)
     Income before income taxes                377,281       378,818    (0.4)
     Applicable income taxes                   135,189       134,111     0.8
     Net income                           $    242,092  $    244,707    (1.1)
 
     Net income per common share:
       Basic                              $       1.17  $       1.21    (3.3)
       Diluted                            $       1.17  $       1.20    (2.5)
     Cash dividends paid per
        common share                      $        .60  $        .54    11.1
     Average basic shares outstanding          206,061       202,464     1.8
     Average diluted shares outstanding        207,569       204,213     1.6
 
     PERFORMANCE RATIOS
     (averages)
     Annualized net yield on
       interest-earning assets                    3.93 %        4.20 %
     Annualized return on assets                  1.31          1.44
     Annualized return on
       shareholders' equity                      15.04         17.21
     Overhead ratio                              55.90         58.02
 
     OPERATING PERFORMANCE (1)
     Net income                           $    252,541  $    264,510    (4.5)
     Net income per diluted
       common share                       $       1.22  $       1.30    (6.2)
     Annualized return on assets                  1.37 %        1.56 %
     Annualized return on
       shareholders' equity                      15.69         18.60
     Overhead ratio                              54.74         55.46
 
     CASH-BASIS FINANCIAL INFORMATION (1), (2)
     Net income                           $    272,826  $    281,589    (3.1)
     Net income per diluted common share  $       1.31  $       1.38    (5.1)
     Annualized return on assets                  1.51 %        1.69 %
     Annualized return on
       shareholders' equity                      20.94         24.27
     Overhead ratio                              52.52         53.57
 
     (1)  Excludes the effects of merger-related, litigation settlement and
           restructuring charges
     (2)  Excludes the effects of purchase accounting-related intangibles
 
 
     W A C H O V I A  C O R P O R A T I O N  A N D  S U B S I D I A R I E S
     FINANCIAL SUMMARY
 
                                                Three Months Ended
                                                     March 31
                                                                      Percent
                                                2001          2000   Variance
     SELECTED AVERAGE
     BALANCES
     (millions)
     Total assets                         $   73,800    $   67,755       8.9
     Loans - net of unearned income           55,659        50,550      10.1
     Loans (managed) (2)                      59,109        53,435      10.6
     Securities                                8,987         8,395       7.1
     Other interest-earning assets             1,224         1,245      (1.7)
     Total interest-earning assets            65,870        60,190       9.4
     Interest-bearing deposits                35,727        34,873       2.4
     Short-term borrowed funds                10,196         8,920      14.3
     Long-term debt                           10,721         8,081      32.7
     Total interest-bearing liabilities       56,644        51,874       9.2
     Noninterest-bearing deposits              8,264         8,319      (0.7)
     Total deposits                           43,991        43,192       1.8
     Shareholders' equity                      6,439         5,688      13.2
 
     CREDIT QUALITY DATA
     (thousands)
     Nonperforming assets                 $  436,964    $  246,107      77.6
     Nonperforming loans                     410,064       226,176      81.3
     Loans past due 90 days or
       more and still accruing               158,623       126,318      25.6
     Net loan losses                         118,717        73,325      61.9
     Net loan losses (managed) (2)           166,288       107,611      54.5
     Net loan losses excluding credit
       cards                                  60,938        20,571     196.2
     Allowance for loan losses               851,082       595,655      42.9
     Nonperforming assets to total
       loans and foreclosed property             .77  %        .48 %
     Annualized net loan losses to
       average loans                             .85           .58
     Annualized net loan losses to
       average loans (managed) (2)              1.13           .81
     Annualized net loan losses to
       average loans excluding
       credit cards                              .48           .18
     Allowance for loans losses to
       total loans                              1.50          1.17
     Allowance for loan losses times
       nonperforming loans                      2.08  x       2.63 x
 
     SELECTED FINANCIAL DATA AT PERIOD-END
     (millions, except per share data)
     Total assets                         $   75,606    $   68,817       9.9
     Interest-earning assets                  67,467        61,137      10.4
     Loans - net of unearned income           56,703        51,125      10.9
     Loans (managed) (2)                      59,977        54,521      10.0
     Deposits                                 45,617        43,716       4.3
     Shareholders' equity                      6,865         5,846      17.4
     Shareholders' equity to total assets       9.08  %       8.50 %
     Risk-based capital ratios:
       Tier I capital                            7.8 (1)       7.4
       Total capital                            11.8 (1)      11.2
     Per share:
       Book value                         $    32.64    $    28.88      13.0
       Common stock closing price (NYSE)  $    60.25    $    67.56     (10.8)
     Common shares outstanding (thousands)   210,335       202,456
 
     (1)  Estimated
     (2)  Includes securitized credit card receivables
 
 SOURCE  Wachovia Corporation