Press Releases

"Wachovia achieved solid earnings growth for the third quarter and nine months of the year," said L. M. Baker Jr., chairman and chief executive officer. "Revenue growth is driving earnings expansion, while expense management remains disciplined. Revenues generated from sales efforts, a broader product offering and larger customer base rose 16.1 percent for the three months and 13.2 percent year to date. The recent additions of Interstate/Johnson Lane, OFFITBANK Holdings, and Barry, Evans, Josephs & Snipes strengthen Wachovia’s wealth advisory capabilities and are contributing to strong fee growth and a richer revenue mix."

Operating earnings exclude merger-related expenses on a pretax basis of $5.3 million for the third quarter of 1999 and $13.6 million year to date compared with $11.9 million and $78.4 million, respectively, for 1998. Reported net income was $257.5 million or $1.25 per diluted share including merger-related expenses for the three months and $748.3 million or $3.62 per diluted share for the first nine months versus $227.4 million or $1.09 per share and $632.6 million or $3.01 per share, respectively, in 1998.

Taxable equivalent net interest income increased $25 million or 4.2 percent for the quarter and $94.5 million or 5.3 percent year to date, reflecting good loan growth and a more favorable earning asset mix. Average loans grew $3.109 billion or 7.1 percent for the three months and $2.888 billion or 6.6 percent for the nine months. Total other operating revenue, which excludes securities sales, rose $122.3 million or 39.4 percent for the third period and $261.3 million or 28.7 percent year to date, reflecting business expansion in addition to the impact of purchase acquisitions. Investment fees, credit card income, deposit account services and trust fees led the increases. Total other operating revenue included gains of $17.5 million in the quarter from a credit card securitization and branch sales. The corporation securitized and sold $500 million of credit card receivables in late September.

The provision for loan losses was $76.8 million for the quarter and $231.9 million year to date, up $4 million or 5.4 percent and $16.6 million or 7.7 percent, respectively, from a year earlier. Net loan losses were $71.4 million or .61 percent of average loans for the three months, down $1.3 million or 1.8 percent from a year earlier, and $226.1 million or .64 percent for the first nine months, higher by $11 million or 5.1 percent from the same period in 1998. Excluding credit cards, net loan losses totaled $25.5 million or .24 percent of loans for the quarter and $52.1 million or .17 percent of loans year to date.

Noninterest expense, excluding merger-related charges, was up $91.4 million or 19 percent and $211.1 million or 14.8 percent for the three and nine months, respectively. Increases reflected a higher expense base from the addition of recent acquisitions, as well as greater expenditures for revenue-generating businesses. Excluding acquisitions in 1999, noninterest expense rose approximately 5 percent both for the quarter and year to date. Year 2000 expenses totaled $4.7 million in the third quarter for customer communication and preparation refinements. As of June 30, 1999, the corporation completed Year 2000 testing and implementation and is directing resources for the remainder of the year to customer communication, preparation rehearsals and maintenance of systems’ readiness status.