Wachovia provides update on expected second quarter results
CHARLOTTE, N.C., July 9 /PRNewswire-FirstCall/ -- Wachovia's Board of
Directors announced today that it has appointed Robert K. Steel, 56, who
most recently served as Under Secretary for Domestic Finance for the U.S.
Department of Treasury, as the company's new Chief Executive Officer,
President and member of the Board of Directors, effective immediately.
Lanty Smith will continue in his role as Wachovia's Chairman of the Board.
All business unit and staff functions will report to Steel.
Smith, who has been serving as interim Chief Executive Officer and who
led the Board's search committee, said, "Bob is a distinguished and widely
respected leader in the financial services sector whose vast experience and
deep knowledge make him the ideal candidate to lead Wachovia. The Board is
unanimous in its decision that Bob is the right person to provide sound
leadership to build on Wachovia's core strengths and successfully manage
the company through the current environment as a strong and independent
company. We are pleased to welcome Bob to Wachovia. I also want to thank
Ben Jenkins for his service as Interim Chief Operating Officer; I have been
very fortunate to have his counsel and support during my tenure as interim
CEO. Ben will continue to serve as Vice Chairman and President of the
General Bank and his strong leadership of this industry-leading franchise
is extremely important today and in the future."
Steel said, "I am honored to have the opportunity to lead Wachovia, one
of the nation's premier retail, brokerage, asset management and investment
banking franchises. Clearly, there are challenges ahead in our current
climate, but I am encouraged that most areas of the company continue to
perform well, and this performance is a testament to the quality of
Wachovia's employees and the longstanding excellence of service to
customers and clients. In Wachovia, I see an institution with great
strengths. Under the leadership of the Board, the management team has
recently been taking decisive actions to face current challenges head on,
and I am delighted to have an opportunity to build on that progress. I look
forward to working with a talented team companywide to restore value to
Wachovia's shareholders, promote transparency and continue delivering
outstanding service to Wachovia's customers."
Smith continued, "The Board, the entire management team and I have
conducted a thorough and candid assessment of our core businesses. As a
result, we believe we have a clear picture of both the company's
fundamental strengths and challenges. We have taken important steps to
improve Wachovia's position in the face of an increasingly difficult
environment. The Board and I are confident Bob will do an exceptional job
leading Wachovia through these tough and turbulent times."
Steel was appointed Under Secretary of the Treasury for Domestic
Finance in October 2006. In that capacity, he served as the principal
adviser to the Treasury Secretary on matters of domestic finance and led
the Treasury Department's activities with respect to the domestic financial
system, fiscal policy and operations, governmental assets and liabilities,
and related economic and financial matters.
He had a long and distinguished career at Goldman Sachs, from which he
retired as a vice chairman in February 2004. He joined Goldman Sachs in
1976 and served in the Chicago office until his transfer to London in 1986.
He became a partner in 1988. In London, he founded the firm's Equity
Capital Markets group for Europe and was extensively involved in
privatization and capital raising efforts for European corporations and
governments. He later assumed the position as head of Equities for Europe.
In 1994, he relocated to New York and served as head of the Equities
Division from 1998 to 2001. In 1999, he joined the Management Committee.
Upon his retirement from Goldman Sachs, he assumed the position of advisory
director for the firm and then senior director in December 2004. From
February 2004 to September 2006, Steel served as a senior fellow at the
Center for Business and Government at the John F. Kennedy School of
Government at Harvard University. He chairs Duke University's Board of
Trustees and he has previously served on the board of Barclays Bank.
Steel received his undergraduate degree from Duke University and his
MBA from the University of Chicago. He and his wife, Gillian, will relocate
to Charlotte.
Smith also said, "We believe that at this time it is important to
provide an update about Wachovia's expected second quarter results which we
will announce on July 22. Wachovia and the industry experienced continued
deterioration in the mortgage and credit markets. While it was a difficult
quarter, we are pleased that Wachovia's capital and liquidity provide a
solid foundation in the face of these challenges."
Wachovia's Update on Expected Second Quarter Results
Wachovia will announce its second quarter results on July 22, 2008. At
that time, based on current estimates, Wachovia expects to report an
after-tax loss available to common stockholders of $2.6 - $2.8 billion or
$1.23 - $1.33 on a per share basis for the quarter, excluding goodwill
impairment charges. Results were driven by higher provision expense,
including $4.2 billion pre- tax to build loan loss reserves, $3.3 billion
of which related to Wachovia's former Pick-a-Pay loan product, higher legal
costs related to several previously disclosed matters, the previously
announced non-cash SILO charge of $855 million after-tax and modest market
disruption losses. Wachovia currently expects to report a Tier One capital
ratio of approximately 8.0% and an allowance for loan losses as a percent
of loans of approximately 2.2%. Charge-offs for the quarter were
approximately $1.3 billion or 1.10 percent of loans on an annualized basis,
including approximately $500 million relating to the Pick-a-Pay portfolio
and approximately $280 million relating to commercial real estate. Wachovia
also currently expects to incur a goodwill impairment charge in the second
quarter, the amount of which is still being determined. Although the
goodwill impairment charge will further reduce reported GAAP earnings, it
will be non-cash in nature and will not affect Wachovia's liquidity or the
company's regulatory capital ratios. As part of its announcement of second
quarter results, the company will provide additional information about
current and future initiatives to rationalize its cost structure and
further enhance the capital efficiency of its balance sheet, including
reducing its mortgage exposure.
About Wachovia
Wachovia Corporation (NYSE: WB) is one of the nation's largest
diversified financial services companies, with assets of $808.9 billion as
of March 31, 2008. Wachovia provides a broad range of retail banking and
brokerage, asset and wealth management, and corporate and investment
banking products and services to customers through 3,300 retail financial
centers in 21 states from Connecticut to Florida and west to Texas and
California, and nationwide retail brokerage, mortgage lending and auto
finance businesses. Globally, clients are served in selected corporate and
institutional sectors and through more than 40 international offices. Our
retail brokerage operations under the Wachovia Securities brand name manage
more than $1.1 trillion in client assets through 18,600 registered
representatives in 1,500 offices nationwide. Online banking is available at
wachovia.com; online brokerage products and services at wachoviasec.com;
and investment products and services at evergreeninvestments.com.
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. In particular, we note that the
information in the paragraph headed "Wachovia's Update on Expected Second
Quarter Results" is based on current estimates and remains subject to
adjustment until Wachovia formally announces its second quarter earnings
results on July 22, 2008.
Investor Conference Call
Wachovia Chairman Lanty Smith will introduce the new CEO and President
Bob Steel in a conference call at 8:30 a.m. Eastern Daylight Savings Time
on Thursday, July 10.
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: WB Investor.
Replay: Thursday, July 10 by 12:00 Noon EDT and continuing through 5
p.m. EDT Friday, Oct. 10. Replay telephone number is 706-645-9291; access
code: 55567423.
Media Briefing Conference Call
Wachovia Chairman Lanty Smith and new CEO and President Bob Steel will
host a conference call with members of the press at 9:30 a.m. Eastern
Daylight Savings Time on Thursday, July 10.
Teleconference Instructions: The telephone number for the conference
call is 1-800-728-0415 for U.S. callers or 706-634-7975 for international
callers. You will be asked to tell the answering coordinator your name and
the name of your media outlet. Mention the conference Access Code:
55557186.
Replay: Thursday, July 10 by 10:30 a.m. EDT and continuing through 5
p.m. EDT July 24. Replay telephone number is U.S. 1-800-642-1687 or
International at 706-645-9291; access code: 55557186.
Investors seeking further information should contact the Investor
Relations team: Alice Lehman at 704-374-4139 or Ellen Taylor at
704-383-1381. Media seeking further information should contact the
Corporate Media Relations team: Mary Eshet at 704-383-7777 or Christy
Phillips-Brown at 704-383-8178.
SOURCE Wachovia Corporation
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CONTACT:
Media, Mary Eshet, +1-704-383-7777, or
Christy Phillips-Brown, +1-704-383-8178; Investors, Alice Lehman,
+1-704-374-4139, or Ellen Taylor, +1-212-214-1904; all of
Wachovia
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