SKIP TO SITE NAVIGATION  |  SWITCH TO GRAPHICAL VERSION

Historical Financial Press Releases

April 16, 2003 Wachovia Earns Record $1 Billion; 1st Quarter EPS Up 15% To 76 Cents Supplemental Quarterly Earnings Report (PDF) Press Release with Financial Tables (PDF) Financial Tables   1ST QUARTER 2003 COMPARED WITH 1ST QUARTER 2002 GAAP quarterly earnings were a record $1 billion, or 76 cents per share, up 15 percent, and included merger-related and restructuring expenses of 3 cents per share. Customer satisfaction scores improved for the 16th consecutive quarter. Total revenue increased 3 percent due to growth in both net interest income and fee income. Lower net principal investing losses drove fee income growth. Noninterest expense increased 5 percent primarily due to merger-related and restructuring expense, revenue-based incentives and increases in nondiscretionary costs such as pension expense. Credit quality strengthened, with declining nonperforming assets, net charge-offs and provision expense from both the first and fourth quarters of 2002. Low-cost core deposits increased 19 percent. Average diluted outstanding shares of stock declined by 20 million from first quarter 2002 due to settlements of forward purchase contracts and open market share repurchases. Georgia branch and deposit conversion completed. Lines of Business Highlights: General Bank, Capital Management, Wealth Management, Corporate and Investment Banking [IMAGE: "Highlights"] CHARLOTTE, N.C. - Wachovia Corp. (NYSE:WB) today reported first quarter 2003 net income available to common stockholders of $1.0 billion, or 76 cents per share, compared with $907 million, or 66 cents per share, in the first quarter of 2002. Earnings in the first quarter of 2003 included after-tax net merger-related and restructuring expenses of $40 million, or 3 cents per share. In the first quarter of 2002, these charges were more than offset by gains on the sale of divested First Union branch offices, resulting in a net after-tax gain of $5 million, with no earnings per share impact. "We're very pleased with these strong results in a climate of continuing market volatility," said Ken Thompson, chairman and CEO. "As the rest of 2003 unfolds, the trends evident this first quarter - improved customer service, improved credit quality, expense control and further merger efficiencies -- should continue to serve us well. "We're particularly proud of the continuing success of our merger integration," he added. "The deposit and branch conversion in Georgia was virtually flawless. Preparations, technology enhancements and testing are well under way for two more conversions - the Carolinas in mid-May and Virginia in the third quarter. With all of this merger activity, we feel particularly rewarded by the 16th straight quarter of rising customer satisfaction ratings. Our competitive edge in service is leading to solid sales performance with low-cost core deposits up 19 percent and investment sales showing continued strength despite the weak equity markets." [IMAGE: "Wachovia Corporation Highlights"] Average loans in the first quarter of 2003 were $158 billion, essentially the same as the first quarter of 2002, reflecting higher consumer loan balances dampened by continued lower corporate loan demand. Average core deposits increased 6 percent from the first quarter of 2002 to $173 billion, while average low-cost core deposits increased 16 percent from the first quarter a year ago to $129 billion. First quarter 2003 net charge-offs declined by 40 percent from the first quarter of 2002 to $195 million, or an annualized 0.49 percent of average net loans. Total nonperforming assets including loans held for sale declined 11 percent from the first quarter of 2002 to $1.8 billion in the first quarter of 2003. Lines of Business The following discussion covers the results for Wachovia's four core business segments, and is on a segment earnings basis, which excludes net merger-related and restructuring expenses and other intangible amortization. Segment earnings are the basis upon which Wachovia manages and allocates capital to its business segments. [IMAGE: "General Bank Highlights"] General Bank The General Bank includes retail, small business and commercial customers. General Bank revenue increased 7 percent from the first quarter a year ago, driven by a 6 percent increase in net interest income and 13 percent growth in fee income. Average core deposit growth continued to be strong, up 7 percent from the first quarter of the prior year. Particularly notable was the increase in average low-cost core deposits of 18 percent from the first quarter of 2002. Loans increased 13 percent year over year, reflecting strength in consumer and small business lending. Credit quality continued to be strong, with a decline in charge-offs and the provision. Fee income growth was driven by mortgage income. The 5 percent increase in expenses from the first quarter of 2002 reflected higher benefit costs and incentives as well as technology enhancements in the financial centers. Retail sales momentum continued, with continued strength in debit card sales and in net new checking accounts, which increased by 82,459 in the first quarter of 2003, nearly the same as for all of 2002. [IMAGE: "Capital Management Highlights"] Capital Management The Capital Management Group (CMG) includes asset management and retail brokerage services. CMG's first quarter 2003 revenue declined 6 percent from the first quarter of 2002 due to the prolonged weakness in the equities markets and subdued investor activity. Despite this weakness, mutual fund net inflows continued to be positive. Total annuity sales increased 16 percent to more than $1.5 billion, including bank annuity sales of $1.1 billion that represented a 34 percent increase from the first quarter of 2002. Assets under management at March 31, 2003, increased 1 percent from March 31, 2002, to $233 billion, including a 6 percent increase in mutual fund assets to $113 billion at March 31, 2003. Brokerage client assets declined 7 percent from March 31, 2002, to $265 billion, due to the decline in equity market values. Expenses reflected solid cost control with a 6 percent decline from the first quarter of 2002 despite increased spending for technology infrastructure enhancements, increased sales expenses related to mutual funds, and branding campaigns for Wachovia Securities. [IMAGE: "Wealth Management Highlights"] Wealth Management Wealth Management includes private banking, personal trust, investment advisory services, charitable services, financial planning and insurance brokerage. Revenue was up modestly from the first quarter of 2002, driven by strong net interest income due to increased loans and deposits. Fee and other income declined 1 percent from the first quarter of 2002 due to market-driven declines in trust and investment management fees. Higher insurance commissions offset this decline. Average loans grew 11 percent from the first quarter a year ago, while average core deposits, led by money market and checking account balances, rose 8 percent from the first quarter of 2002. Expenses increased 5 percent year over year due to sharply higher benefit costs. [IMAGE: "Corporate and Investment Bank Highlights"] Corporate and Investment Bank The Corporate and Investment Bank (CIB) includes corporate lending, investment banking, treasury services and trade finance, and principal investing. CIB revenue grew 4 percent from the first quarter of 2002, driven by lower net principal investing losses, while interest income declined on lower loan balances in corporate lending. The increase in expense was primarily related to incentives that reflected higher revenue and reduced credit costs. Average loans declined due to weak overall demand, while average core deposits increased primarily due to growth in commercial mortgage servicing and growth in international trade finance. Wachovia Corporation (NYSE:WB) had assets of $348 billion and stockholders' equity of $32 billion at March 31, 2003. Wachovia is a leading provider of financial services to 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 48 of the 50 states. Global services are provided through more than 30 international offices. Online banking and brokerage products and services are available through wachovia.com. 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 April 16, 2003. Earnings Conference Call and Supplemental Materials Wachovia CEO Ken Thompson and CFO Bob Kelly will review Wachovia's first quarter 2003 results in a conference call and audio webcast beginning at 10 a.m. Eastern Time today. Supplemental materials relating to first quarter results 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 1-877-601-3456 for U.S. callers or 1-630-395-0022 for international callers. You will be asked to tell the answering coordinator your name and the name of your firm. Mention the conference Access Code: Kelly. Replay: Wednesday, April 16 at 12 p.m. through 6 p.m., Wednesday, May 14. Replay telephone number is 402-998-0652.

Back to List

2008 Financial Press Releases

2007 Financial Press Releases

2006 Financial Press Releases

2005 Financial Press Releases

2004 Financial Press Releases

2003 Financial Press Releases

2002 Financial Press Releases

2001 Financial Press Releases

Email this article

Related Links

•Request Publications

About Wachovia Customer Service

Navigation

About Wachovia Section Navigation

• Company Information
• News Room
• Doing Business with Wachovia
• Community Involvement
• Careers
• Investor Relations
  • Financial News and Events
    • Latest Quarterly Earnings
    • Presentations
    • Investor Calendar
    • Investor Facts
    • Email Alerts
    • Merger Kits
    • Merger and Investment History
    • Historical Financial Press Releases (current)
    • 2008 Financial News and Events
    • 2007 Financial News and Events
    • 2006 Financial News and Events
    • 2005 Financial News and Events
    • 2004 Financial News and Events
    • 2003 Financial News and Events
  • Shareholder Services
  • Stock and Dividends
  • Corporate Governance
  • Financial Reports
  • Contact Investor Relations
• Diversity at Wachovia
• Merger Information
• About Wachovia Customer Service

Main Sections of the Site

• Personal Finance
• Small Business
• Corporate & Institutional
• Wealth Management
• About Wachovia (current)
• Customer Service

Search

• Search