Wachovia Historical Financial Press Releases

April 17, 2006
Wachovia Earns $1.73 Billion, or $1.09 Per Share in 1st Quarter 2006
Strong sales production, top-notch customer service and market share gains drive results

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1ST QUARTER 2006 COMPARED WITH 1ST QUARTER 2005

Results reflect record revenue and disciplined expense control.
Results also include a $100 million fee received in relation to the credit card business, as well as the impact of acquisitions, including Westcorp on March 1, 2006.
Noninterest expense up 9 percent, largely reflecting $98 million of increased employee stock compensation expense related to implementation of a new share-based payment accounting standard as well as the effect of acquisitions.
Average loans up 18 percent and average core deposits up 7 percent.
Stellar credit quality, with net charge-offs of 0.09 percent of average loans and total nonperforming assets of 0.28 percent of loans, foreclosed properties and loans held for sale.
Solid sales activity and top-notch customer satisfaction, loyalty and record acquisition.

Lines of Business Highlights: General Bank, Capital Management, Wealth Management, Corporate and Investment Bank

CHARLOTTE, N.C. - Wachovia Corp. (NYSE:WB) today reported net income of $1.73 billion, or $1.09 per share, in the first quarter of 2006 compared with $1.62 billion, or $1.01 per share, in the first quarter of 2005.

Excluding after-tax net merger-related expenses of 3 cents per share in the first quarter of 2006 and 2 cents per share in the first quarter of 2005, earnings were $1.77 billion, or $1.12 per share, in the first quarter of 2006 compared with $1.65 billion, or $1.03 per share, in the first quarter of 2005.

"I'm very proud of our employees' ability to continue to generate record revenue, fueled by strong results in both our traditional banking and market-sensitive businesses," said Ken Thompson, Wachovia chairman and chief executive officer. "We continued to see excellent sales production, top-notch customer service and market share gains throughout our businesses. We continued to gain leverage from improving our efficiency, while at the same time investing significantly for future revenue growth."

Results include the impact of the acquisition of Westcorp and WFS Financial Inc on March 1, 2006, and a $100 million termination payment received in relation to the Bank of America/MBNA merger. In the first quarter of 2006 compared with the first quarter of 2005, Wachovia:

Grew revenue 9 percent, reflecting strong capital markets-related income, improved equity markets and strong balance sheet growth overcoming modest margin compression resulting from the effects of a persistently flat yield curve.
- Increased net interest income 2 percent, driven by strength in loans and deposits. Commercial loan growth was led by middle-market lending, while consumer loans rose due to higher real estate-secured loans, which included the transfer of $12.5 billion of consumer real estate-related secured loans from held for sale at year-end 2005. Core deposit growth continued to be solid, with average core deposits up 7 percent and average low-cost core deposits up 4 percent.
- Generated a 17 percent increase in fee and other income virtually across-the-board. Results reflected core strength in interchange income and consumer service charges, while market-sensitive businesses rebounded, highlighted by strength in trading profits, investment banking fees and commissions. In addition, other income included the $100 million credit card-related fee. Results also included securities losses of $48 million.
Noninterest expense rose 9 percent on higher personnel expense, including the $98 million of increased employee stock compensation expense related to implementation of the new accounting standard, the effect of acquisitions, and higher revenue-related incentive expense.
Recorded a provision for credit losses of $61 million. Net charge-offs were $59 million, or an annualized 0.09 percent of average net loans. Total nonperforming assets including loans held for sale were $804 million, representing a stable 0.28 percent of loans, foreclosed properties and loans held for sale.

Lines of Business

The following discussion covers the results for Wachovia's four core business segments and is on a segment earnings basis, which excludes net merger-related and restructuring expenses, other intangible amortization and discontinued operations. Segment earnings are the basis on which Wachovia manages and allocates capital to its business segments. Pages 12 and 13 include a reconciliation of segment results to Wachovia's consolidated results of operations in accordance with GAAP. Lines of business results reflect their respective amounts of stock compensation expense related to implementation of a new share-based payment accounting standard.

General Bank

The General Bank includes retail, small business and commercial customers. The first quarter of 2006 compared with the first quarter of 2005 included:

Earnings of $1.1 billion on record revenue, including exceptionally strong fee and other income.
14 percent revenue growth to a record $3.5 billion, driven by strengthening production in commercial, mortgage and home equity loans and deposits, partially offset by margin compression and slowing growth in home equity lines. Revenue also included the $100 million fee related to the credit card business and the contribution from acquisitions.
- Strength in low-cost core deposits and higher commercial and consumer loans drove a 10 percent increase in net interest income. Net new retail checking accounts increased by 187,000 in the first quarter of 2006, compared with an increase of 129,000 in the prior year first quarter.
- 27 percent growth in fee and other income included, in addition to the credit card-related fee and acquisition impact, strong debit card interchange income and growth in service charges. In addition, a larger mortgage servicing portfolio and higher mortgage originations contributed to growth.
9 percent growth in noninterest expense included higher personnel costs related to increased revenue-based incentive expense and employee stock compensation expense, as well as the impact of the acquisitions and costs related to reentering the credit card business.

Capital Management

Capital Management includes retail brokerage services and asset management. The first quarter of 2006 compared with the first quarter of 2005 included:

Record earnings of $181 million on strong revenue growth.
11 percent revenue growth driven by strength in retail brokerage managed account fees on 42 percent growth in managed assets to $119.8 billion. Momentum in building recurring revenue streams continued as this growth reflected strong client demand for managed accounts.
- 30 percent growth in net interest income largely due to improved deposit spreads.
8 percent growth in noninterest expense included higher incentives and increased employee stock compensation expense.
Total assets under management of $238.3 billion at March 31, 2006, increased 4 percent from December 31, 2005. Equity assets reached $87.3 billion, led by solid net equity sales and market appreciation. Total brokerage client assets grew 5 percent from year-end 2005, excluding the impact of $30 billion in assets lost when a clearing client was acquired by another firm.

Wealth Management

Wealth Management includes private banking, personal trust, investment advisory services, charitable services, financial planning and insurance brokerage. The first quarter of 2006 compared with the first quarter of 2005 included:

A 5 percent decline in earnings as higher expenses outpaced revenue growth.
Revenue growth driven by a 26 percent increase in fee and other income and a 6 percent increase in net interest income.
- Net interest income growth fueled by a 21 percent increase in average loans, largely in commercial and consumer mortgage and a 9 percent increase in average core deposits.
- Higher fee and other income reflecting increased commissions due to the May 2005 acquisition of Palmer & Cay and modest growth in trust and investment management fees.
28 percent growth in noninterest expense included the impact of the Palmer & Cay acquisition, higher revenue-based incentives and increased employee stock compensation expense, and higher personnel expense related to a new investment platform.

Corporate and Investment Bank

The Corporate and Investment Bank includes corporate lending, investment banking, and treasury and international trade finance. First quarter 2006 results compared with the first quarter of 2005 included:

Earnings of $519 million on record revenue.
11 percent revenue growth reflecting a 27 percent increase in fee and other income offsetting a 14 percent decline in net interest income.
- Net interest income declined primarily due to lower dividend income in equity trading and lower loan warehouse balances.
- The growth in fee income reflected strong investment banking results, primarily in trading, advisory and underwriting fees, and principal investing. Fee income also included revenue from the issuance of corporate securities, which is offset in the Parent, and a gain related to the Archipelago/New York Stock Exchange merger.
A 21 percent increase in noninterest expense due primarily to higher variable compensation, investment in both revenue and efficiency projects, and increased employee stock compensation expense.
Strong core deposit growth primarily from higher commercial mortgage servicing and international correspondent banking, and increased loans primarily reflecting higher large corporate loans and the acquisition of Union Bank of California's international correspondent banking business.

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Wachovia Corporation (NYSE:WB) is one of the nation's largest diversified financial services companies, providing 13.4 million household and business relationships with a broad range of banking, asset management, wealth management and corporate and investment banking products and services. Wachovia operates as Wachovia Bank through 3,159 offices in 16 states from Connecticut to Florida and west to Texas, and, until merger integration activity is completed, will continue to be known as Western Financial Bank in California. Two core businesses operate under the Wachovia Securities brand name: retail brokerage in 49 states and in Latin America, and corporate and investment banking in selected industries nationwide. Globally, Wachovia serves clients through more than 40 international offices. Online banking is available at wachovia.com; online brokerage products and services at wachoviasec.com, and investment products and services at evergreeninvestments.com. Wachovia had assets of $541.8 billion, market capitalization of $90.2 billion and stockholders' equity of $49.8 billion at March 31, 2006.

Forward-Looking Statements
This news release contains various forward-looking statements. A discussion of various factors that could cause Wachovia Corporation's actual results to differ materially from those expressed in such forward-looking statements is included in Wachovia's filings with the Securities and Exchange Commission, including its Current Report on Form 8-K dated April 17, 2006.

Explanation of Wachovia's Use of Certain Non-GAAP Financial Measures
In addition to results presented in accordance with GAAP, this news release includes certain non-GAAP financial measures, including those presented on page 1 and on page 10 under the captions "Earnings Excluding Merger-Related and Restructuring Expenses", "Earnings Excluding Merger-Related and Restructuring Expenses, and Discontinued Operations" and "Earnings Excluding Merger-Related and Restructuring Expenses, Other Intangible Amortization and Discontinued Operations", and which are reconciled to GAAP financial measures on pages 19 and 20. In addition, in this news release certain designated net interest income amounts are presented on a tax-equivalent basis, including the calculation of the overhead efficiency ratio.

Wachovia believes these non-GAAP financial measures provide information useful to investors in understanding the underlying operational performance of the company, its business and performance trends and facilitates comparisons with the performance of others in the financial services industry. Specifically, Wachovia believes the exclusion of merger-related and restructuring expenses, discontinued operations and the cumulative effect of a change in accounting principle permits evaluation and a comparison of results for on-going business operations, and it is on this basis that Wachovia's management internally assesses the company's performance. Those non-operating items are excluded from Wachovia's segment measures used internally to evaluate segment performance in accordance with GAAP because management does not consider them particularly relevant or useful in evaluating the operating performance of our business segments. In addition, because of the significant amount of deposit base intangible amortization, Wachovia believes the exclusion of this expense provides investors with consistent and meaningful comparisons to other financial services firms. Wachovia's management makes recommendations to its board of directors about dividend payments based on reported earnings excluding merger-related and restructuring expenses, other intangible amortization, discontinued operations and the cumulative effect of a change in accounting principle, and has communicated certain dividend payout ratio goals to investors on this basis. Management believes this payout ratio is useful to investors because it provides investors with a better understanding of and permits investors to monitor Wachovia's dividend payout policy. Wachovia also believes the presentation of net interest income on a tax-equivalent basis ensures comparability of net interest income arising from both taxable and tax-exempt sources and is consistent with industry standards. Wachovia operates one of the largest retail brokerage businesses in our industry, and we have presented an overhead efficiency ratio excluding these brokerage services, which management believes is useful to investors in comparing the performance of our banking business with other banking companies.

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

Earnings Conference Call and Supplemental Materials
Wachovia CEO Ken Thompson and CFO Tom Wurtz will review Wachovia's first quarter 2006 results in a conference call and audio webcast beginning at 10 a.m. Eastern Time today. This review may include a discussion of certain non-GAAP financial measures. Supplemental materials relating to first quarter results, which also include a reconciliation of any non-GAAP measures to Wachovia's reported financials, are available on the Internet at Wachovia.com/investor, and investors are encouraged to access these materials in advance of the conference call.

Webcast Instructions: To gain access to the webcast, which will be "listen-only," go to Wachovia.com/investor and click on the link "Wachovia First 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 888-357-9787 for U.S. callers or 706-679-7342 for international callers. You will be asked to tell the answering coordinator your name and the name of your firm. Mention the conference Access Code: Wachovia.

Replay: Monday, April 17, at 1p.m. ET and continuing through 5 p.m. ET Friday, May 19. Replay telephone number is 706-645-9291; access code: 6168187.

***

Investors seeking further information should contact the Investor Relations team: Alice Lehman at 704-374-4139, Ellen Taylor at 704-383-1381 or Jeff Richardson at 704-383-8250. Media seeking further information should contact the Corporate Media Relations team: Mary Eshet at 704-383-7777 or Christy Phillips at 704-383-8178.

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Wachovia common stock trades on the New York Stock Exchange (NYSE) under the ticker symbol WB. Before the September 1, 2001, merger of First Union and the former Wachovia, the common stock traded on the NYSE as FTU.

Information on this site dated after September 1, 2001, is provided under the Wachovia name, while historical information dated before September 1, 2001, is provided under the First Union name. Please note that historical information may have become out of date and should not be considered current. Wachovia does not undertake any obligation to update the information as a result of new information or subsequent developments. In addition, any forward-looking information is subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Factors that could cause results to differ from expectations may be found in Wachovia's reports filed with the SEC.

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