Exhibit (19)




---



##### 



WACHOVIA CORPORATION AND SUBSIDIARIES
QUARTERLY FINANCIAL SUPPLEMENT
SIX MONTHS ENDED JUNE 30, 2008
TABLE OF CONTENTS
 PAGEFinancial Highlights
    
    
    1Managements Discussion and Analysis
    
    
    2Explanation of Our Use of Non-GAAP Financial Measures
    
    
    42Selected Statistical Data
    
    
    43Summaries of Income, Per Common Share and Balance Sheet Data
    
    
    44Merger-Related and Restructuring Expenses
    
    
    45Business Segments
    
    
    46Net Trading Revenue  Investment Banking
    
    
    62Selected Ratios
    
    
    63Trading Account Assets and Liabilities
    
    
    64Loans  On-Balance Sheet, and Managed and Servicing Portfolios
    
    
    65Loans Held for Sale
    
    
    66Allowance for Credit Losses
    
    
    67Allowance and Charge-Off Ratios
    
    
    68Nonperforming Assets
    
    
    69Nonaccrual Loan Activity
    
    
    70Goodwill and Other Intangible Assets
    
    
    71Deposits
    
    
    72Time Deposits in Amounts of $100,000 or More
    
    
    72Long-Term Debt
    
    
    73Changes in Stockholders Equity
    
    
    74Capital Ratios
    
    
    75Net Interest Income Summaries  Five Quarters Ended June 30, 2008
    
    
    76Net Interest Income Summaries  Six Months Ended June 30, 2008 and 2007
    
    
    78Consolidated Balance Sheets  Five Quarters Ended June 30, 2008
    
    
    79Consolidated Statements of Income  Five Quarters Ended June 30, 2008
    
    
    80Wachovia Corporation and Subsidiaries  Consolidated Financial Statements
    
    
    81




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##### 



FINANCIAL HIGHLIGHTS
 Three Months Ended
    
    
    Percent
    
    
    Six Months Ended
    
    
    PercentJune 30,
    
    
    Increase
    
    
    June 30,
    
    
    Increase(Dollars in millions, except per share data)
    
    2008
    
    
    2007
    
    
    (Decrease)
    
    
    2008
    
    
    2007
    
    
    (Decrease)EARNINGS SUMMARYNet interest income (GAAP)
    
    $
    4,290
    
    
    
    4,449
    
    
    
    (4)
    %
    
    $
    9,042
    
    
    
    8,949
    
    
    
    1
    %Tax-equivalent adjustment
    
    
    54
    
    
    
    38
    
    
    
    42
    
    
    
    107
    
    
    
    75
    
    
    
    43Net interest income (Tax-equivalent)
    
    
    4,344
    
    
    
    4,487
    
    
    
    (3
    )
    
    
    9,149
    
    
    
    9,024
    
    
    
    1Fee and other income
    
    
    3,165
    
    
    
    4,240
    
    
    
    (25
    )
    
    
    5,942
    
    
    
    7,974
    
    
    
    (25
    )Total revenue (Tax-equivalent)
    
    
    7,509
    
    
    
    8,727
    
    
    
    (14
    )
    
    
    15,091
    
    
    
    16,998
    
    
    
    (11
    )Provision for credit losses
    
    
    5,567
    
    
    
    179
    
    
    
    
    
    
    
    8,398
    
    
    
    356
    
    
    
    Other noninterest expense
    
    
    6,376
    
    
    
    4,755
    
    
    
    34
    
    
    
    11,473
    
    
    
    9,248
    
    
    
    24Merger-related and restructuring expenses
    
    
    251
    
    
    
    32
    
    
    
    
    
    
    
    492
    
    
    
    42
    
    
    
    Goodwill impairment
    
    
    6,060
    
    
    
    
    
    
    
    
    
    
    
    6,060
    
    
    
    
    
    
    
    Other intangible amortization
    
    
    97
    
    
    
    103
    
    
    
    (6
    )
    
    
    200
    
    
    
    221
    
    
    
    (10
    )Total noninterest expense
    
    
    12,784
    
    
    
    4,890
    
    
    
    
    
    
    
    18,225
    
    
    
    9,511
    
    
    
    92Minority interest in income of consolidated subsidiaries
    
    
    (18
    )
    
    
    139
    
    
    
    
    
    
    
    137
    
    
    
    275
    
    
    
    (50
    )Income (loss) before income taxes (benefits) (Tax-equivalent)
    
    
    (10,824
    )
    
    
    3,519
    
    
    
    
    
    
    
    (11,669
    )
    
    
    6,856
    
    
    
    Tax-equivalent adjustment
    
    
    54
    
    
    
    38
    
    
    
    42
    
    
    
    107
    
    
    
    75
    
    
    
    43Income taxes (benefits)
    
    
    (1,963
    )
    
    
    1,140
    
    
    
    
    
    
    
    (2,197
    )
    
    
    2,138
    
    
    
    Net income (loss)
    
    
    (8,915
    )
    
    
    2,341
    
    
    
    
    
    
    
    (9,579
    )
    
    
    4,643
    
    
    
    Dividends on preferred stock
    
    
    193
    
    
    
    
    
    
    
    
    
    
    
    236
    
    
    
    
    
    
    
    Net income (loss) available to common stockholders
    
    $
    (9,108
    )
    
    
    2,341
    
    
    
    
    %
    
    $
    (9,815
    )
    
    
    4,643
    
    
    
    
    %Diluted earnings per common share (a)Net income (loss) available to common stockholders
    
    $
    (4.31
    )
    
    
    1.22
    
    
    
    
    %
    
    $
    (4.82
    )
    
    
    2.42
    
    
    
    
    %Return on average common stockholders equity
    
    
    (50.47
    )%
    
    
    13.54
    
    
    
    
    
    
    
    (26.80
    )%
    
    
    13.51
    
    
    
    Return on average assets (b)
    
    
    (4.50
    )%
    
    
    1.33
    
    
    
    
    
    
    
    (2.44
    )%
    
    
    1.34
    
    
    
    ASSET QUALITYAllowance for loan losses as % of loans, net
    
    
    2.20
    %
    
    
    0.79
    
    
    
    
    
    
    
    2.20
    %
    
    
    0.79
    
    
    
    Allowance for loan losses as % of nonperforming assets
    
    
    90
    
    
    
    157
    
    
    
    
    
    
    
    90
    
    
    
    157
    
    
    
    Allowance for credit losses as % of loans, net
    
    
    2.24
    
    
    
    0.83
    
    
    
    
    
    
    
    2.24
    
    
    
    0.83
    
    
    
    Net charge-offs as % of average loans, net
    
    
    1.10
    
    
    
    0.14
    
    
    
    
    
    
    
    0.88
    
    
    
    0.15
    
    
    
    Nonperforming assets as % of loans, net,
foreclosed properties and loans held for sale
    
    
    2.41
    %
    
    
    0.49
    
    
    
    
    
    
    
    2.41
    %
    
    
    0.49
    
    
    
    CAPITAL ADEQUACYTier I capital ratio
    
    
    8.00
    %
    
    
    7.47
    
    
    
    
    
    
    
    8.00
    %
    
    
    7.47
    
    
    
    Total capital ratio
    
    
    12.74
    
    
    
    11.46
    
    
    
    
    
    
    
    12.74
    
    
    
    11.46
    
    
    
    Leverage ratio
    
    
    6.57
    %
    
    
    6.23
    
    
    
    
    
    
    
    6.57
    %
    
    
    6.23
    
    
    
    OTHER FINANCIAL DATANet interest margin
    
    
    2.58
    %
    
    
    2.96
    
    
    
    
    
    
    
    2.74
    %
    
    
    3.01
    
    
    
    Fee and other income as % of total revenue
    
    
    42.15
    
    
    
    48.58
    
    
    
    
    
    
    
    39.37
    
    
    
    46.91
    
    
    
    Effective income tax rate
    
    
    18.06
    %
    
    
    32.78
    
    
    
    
    
    
    
    18.67
    %
    
    
    31.53
    
    
    
    BALANCE SHEET DATASecurities
    
    $
    113,461
    
    
    
    106,184
    
    
    
    7
    %
    
    $
    113,461
    
    
    
    106,184
    
    
    
    7
    %Loans, net
    
    
    488,198
    
    
    
    429,120
    
    
    
    14
    
    
    
    488,198
    
    
    
    429,120
    
    
    
    14Total assets
    
    
    812,433
    
    
    
    715,428
    
    
    
    14
    
    
    
    812,433
    
    
    
    715,428
    
    
    
    14Total deposits
    
    
    447,790
    
    
    
    410,030
    
    
    
    9
    
    
    
    447,790
    
    
    
    410,030
    
    
    
    9Long-term debt
    
    
    184,401
    
    
    
    142,047
    
    
    
    30
    
    
    
    184,401
    
    
    
    142,047
    
    
    
    30Stockholders equity
    
    $
    75,127
    
    
    
    69,266
    
    
    
    8
    %
    
    $
    75,127
    
    
    
    69,266
    
    
    
    8
    %OTHER DATAAverage basic common shares (In millions)
    
    
    2,111
    
    
    
    1,891
    
    
    
    12
    %
    
    
    2,037
    
    
    
    1,892
    
    
    
    8
    %Average diluted common shares (In millions)
    
    
    2,119
    
    
    
    1,919
    
    
    
    10
    
    
    
    2,048
    
    
    
    1,922
    
    
    
    7Actual common shares (In millions)
    
    
    2,159
    
    
    
    1,903
    
    
    
    13
    
    
    
    2,159
    
    
    
    1,903
    
    
    
    13Dividends paid per common share
    
    $
    0.38
    
    
    
    0.56
    
    
    
    (33
    )
    
    $
    1.02
    
    
    
    1.12
    
    
    
    (9
    )Dividend payout ratio on common shares
    
    
    (8.70
    )%
    
    
    45.90
    
    
    
    
    
    
    
    (21.06
    )%
    
    
    46.28
    
    
    
    Book value per common share
    
    $
    30.25
    
    
    
    36.40
    
    
    
    (17
    )
    
    $
    30.25
    
    
    
    36.40
    
    
    
    (17
    )Common stock price
    
    
    15.53
    
    
    
    51.25
    
    
    
    (70
    )
    
    
    15.53
    
    
    
    51.25
    
    
    
    (70
    )Market capitalization
    
    $
    33,527
    
    
    
    97,530
    
    
    
    (66
    )
    
    $
    33,527
    
    
    
    97,530
    
    
    
    (66
    )Common stock price to book value
    
    
    51
    %
    
    
    141
    
    
    
    (64
    )
    
    
    51
    %
    
    
    141
    
    
    
    (64
    )FTE employees
    
    
    119,952
    
    
    
    110,493
    
    
    
    9
    
    
    
    119,952
    
    
    
    110,493
    
    
    
    9Total financial centers/brokerage offices
    
    
    4,820
    
    
    
    4,135
    
    
    
    17
    
    
    
    4,820
    
    
    
    4,135
    
    
    
    17ATMs
    
    
    5,277
    
    
    
    5,099
    
    
    
    3
    %
    
    
    5,277
    
    
    
    5,099
    
    
    
    3
    %
   1




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##### 



Managements Discussion and Analysis
  Executive Summary
 Summary of Results of Operations
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(In millions, except per share data)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Net interest income (GAAP)
    
    $
    4,290
    
    
    
    4,449
    
    
    
    9,042
    
    
    
    8,949Tax-equivalent adjustment
    
    
    54
    
    
    
    38
    
    
    
    107
    
    
    
    75Net interest income (a)
    
    
    4,344
    
    
    
    4,487
    
    
    
    9,149
    
    
    
    9,024Fee and other income
    
    
    3,165
    
    
    
    4,240
    
    
    
    5,942
    
    
    
    7,974Total revenue (a)
    
    
    7,509
    
    
    
    8,727
    
    
    
    15,091
    
    
    
    16,998Provision for credit losses
    
    
    5,567
    
    
    
    179
    
    
    
    8,398
    
    
    
    356Other noninterest expense
    
    
    6,376
    
    
    
    4,755
    
    
    
    11,473
    
    
    
    9,248Goodwill impairment
    
    
    6,060
    
    
    
    -
    
    
    
    6,060
    
    
    
    -Merger-related and restructuring expenses
    
    
    251
    
    
    
    32
    
    
    
    492
    
    
    
    42Other intangible amortization
    
    
    97
    
    
    
    103
    
    
    
    200
    
    
    
    221Total noninterest expense
    
    
    12,784
    
    
    
    4,890
    
    
    
    18,225
    
    
    
    9,511Minority
interest in income (loss) of consolidated subsidiaries
    
    
    (18
    )
    
    
    139
    
    
    
    137
    
    
    
    275Income taxes (benefits)
    
    
    (1,963
    )
    
    
    1,140
    
    
    
    (2,197
    )
    
    
    2,138Tax-equivalent adjustment
    
    
    54
    
    
    
    38
    
    
    
    107
    
    
    
    75Net income (loss)
    
    
    (8,915
    )
    
    
    2,341
    
    
    
    (9,579
    )
    
    
    4,643Dividends on preferred stock
    
    
    193
    
    
    
    -
    
    
    
    236
    
    
    
    -Net income (loss) available to common stockholders
    
    
    (9,108
    )
    
    
    2,341
    
    
    
    (9,815
    )
    
    
    4,643Diluted
earnings (loss) per common share
    
    $
    (4.31
    )
    
    
    1.22
    
    
    
    (4.82
    )
    
    
    2.42
  Outlook Noninterest Expense
 
    
    An $8.4 billion loan loss provision, which increased reserves by $6.2 billion,
including $4.4 billion for the payment option mortgage portfolio
called Pick-a-Payment.
    
    A $6.1 billion noncash goodwill impairment charge in commercial-related subsegments
reflecting declining equity market valuations and underlying asset values. The goodwill
impairment charge had no impact on Wachovias tangible capital levels, regulatory capital
ratios or liquidity. More information is in the Critical
Accounting Policies and Balance Sheet Analysis: Goodwill
sections.
    
    $3.2 billion in market disruption-related losses.
    
    A $1.2 billion increase in legal reserves, $590 million of which was recorded in the second
quarter of 2008, primarily related to previously disclosed matters, and $500 million of which
was recorded after our July 22, 2008 release of second quarter 2008 results, for the effect of
recent and active settlement discussions related to auction rate securities, partially offset by
the first quarter 2008 reversal of $102 million of litigation reserves related to our ownership
interest in Visa, Inc.
 2




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##### 




    
    A $975 million noncash charge related to certain leasing transactions widely referred
to as sale in, lease out or SILO transactions.
    
    $481 million in net gains related to the adoption of new fair value accounting
standards on January 1, 2008.
    
    $391 million in losses related to planned discretionary
securities sales.
    
    A $225 million gain from our ownership in Visa, which completed its initial public
offering in March 2008.
  Actions
on Capital, Liquidity and Risk
   
    
    Reducing the quarterly dividend on our common stock by 32.5 cents to 5 cents per share,
which is estimated to preserve approximately $700 million in capital per quarter. The
dividend is payable on September 15, 2008, to shareholders of record on August 29, 2008.
In the first half of 2008, we paid common stockholders dividends of $2.1 billion, or
$1.015 per share.
    
    More aggressively managing our balance sheet, which we estimate will result in a $20
billion reduction in loans and securities by year-end 2008 and preserve an estimated $1.5
billion in capital. Proceeds from selected maturing securities will not be reinvested in
order to reduce the securities portfolio balance. To reduce capital usage in the loan
portfolio, we are implementing enhanced discipline to ensure more focus on strategic
commercial customer relationships, and instituting programs to further enhance the mix of
our consumer loan portfolio. This includes reducing mortgage concentration in our consumer
loan portfolio by tightening mortgage underwriting standards, discontinuing origination of
negative amortization loans, eliminating the General Bank wholesale mortgage origination
channel, eliminating focus on Pick-a-Payment loan retention and offering opportunities for
Pick-a-Payment borrowers to refinance mortgages into marketable products. Also, as we
focus on disciplined deployment of capital in this environment, we currently expect new
loan growth to be more modest due to increased pricing discipline and tighter underwriting
guidelines. In addition, we will also consider the possible sale of certain noncore
assets, which could preserve additional capital.
 3




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##### 




    
    Instituting a more rigorous expense discipline, which we estimate will preserve up to
$1 billion in capital. This includes an initiative to reduce planned expense growth in the
second half of this year by approximately $490 million, more than offset by restructuring
costs, and a reduction in full year 2009 planned expense growth by $1.5 billion. As part
of this initiative, we reviewed 500 existing or planned capital expenditure projects and
decided to delay or cancel $350 million of expenses related to these projects. Forty percent of the expense
savings is expected to come from lower personnel costs and will involve reductions
affecting approximately 6,950 active employees, revised upward by 600 subsequent to our
original announcement, and 4,400 open positions. These expense actions are expected to have
only a modest impact on revenue. Initiatives such as western expansion in retail,
commercial and wealth will continue but at a more deliberate pace. The Merger-Related and
Restructuring Expensessection has more information.
 Stockholders Equity
      4




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##### 



Strengthening Core Businesses
  
    
    Modestly higher net interest income, driven by our higher loans and deposits and
improved margins, somewhat offset by the effect of the $975 million SILO-related lease
charge and increasing nonaccrual loans.
    
    A 13 percent increase in average loans to $471.3 billion. Average consumer loans rose 5
percent, driven by higher traditional mortgage loans. Average commercial loan growth of 25
percent reflected strength in large corporate and middle-market commercial loans and in
commercial real estate. Increased consumer and commercial loans included the transfer of
$4.1 billion in commercial loans and $2.8 billion in consumer loans from the held-for-sale
portfolio in the first half of 2008.
    
    A 5 percent increase in average core deposits to $392.6 billion. We expect deposits to
grow further in 2008 as we continue to expand product distribution in the newly integrated
former World Savings branches, offer retail brokerage deposits in the former A.G. Edwards
franchise, increase productivity in our de novo (or new) branches and benefit from product
introductions, such as Way2Save and competitive certificate of deposit campaigns, to
attract and enhance customer relationships. We also continue to enhance the efficiency of
our financial center network and expand our presence in higher growth markets. In the
first half of 2008, we opened 46 de novo branches, consolidated 94 branches, and expanded
our commercial banking presence, all of which added $84 million to noninterest expense. As
a result of our strategic review, we currently plan to continue to open additional branches,
but at a more deliberate pace.
    
    Higher fiduciary and asset management fees and brokerage commissions largely reflecting
the A.G. Edwards acquisition.
 Corporate and Investment Bank
 5




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##### 



Other
Matters
 Leveraged
Lease Charge Note 1 Consolidated Financial Statements Note 1 Consolidated Financial Statements
  Fair Value
Implementation Fair
Value Measurements The Fair Value Option for Financial Assets and Financial
Liabilities
  6




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##### 



Market Disruption-Related Losses, Net
 2008
    
    
    20071st Half
    
    
    2nd Half
    
    
    CumulativeTrading
    
    
    Securitiesprofits
    
    
    gains
    
    
    Other(Pre-tax dollars in millions)
    
    (losses)
    
    
    (losses)
    
    
    Income
    
    
    Total
    
    
    Total
    
    
    TotalCorporate and Investment BankABS CDO and other subprime-related
    
    $
    (387
    )
    
    
    (199
    )
    
    
    9
    
    
    
    (577
    )
    
    
    (1,048
    )
    
    
    (1,625
    )Commercial mortgage (CMBS)
    
    
    (399
    )
    
    
    (2
    )
    
    
    (329
    )
    
    
    (730
    )
    
    
    (1,088
    )
    
    
    (1,818
    )Consumer mortgage
    
    
    (229
    )
    
    
    -
    
    
    
    (90
    )
    
    
    (319
    )
    
    
    (205
    )
    
    
    (524
    )Leveraged finance
    
    
    147
    
    
    
    -
    
    
    
    (354
    )
    
    
    (207
    )
    
    
    (179
    )
    
    
    (386
    )Other
    
    
    (272
    )
    
    
    (15
    )
    
    
    (9
    )
    
    
    (296
    )
    
    
    (50
    )
    
    
    (346
    )Total
    
    
    (1,140
    )
    
    
    (216
    )
    
    
    (773
    )
    
    
    (2,129
    )
    
    
    (2,570
    )
    
    
    (4,699
    )Capital ManagementImpairment losses
    
    
    (94
    )
    
    
    (24
    )
    
    
    -
    
    
    
    (118
    )
    
    
    (57
    )
    
    
    (175
    )ParentImpairment
losses / other
    
    
    -
    
    
    
    (655
    )
    
    
    (321
    )
    
    
    (976
    )
    
    
    (94
    )
    
    
    (1,070
    )Total, net
    
    
    (1,234
    )
    
    
    (895
    )
    
    
    (1,094
    )
    
    
    (3,223
    )
    
    
    (2,721
    )
    
    
    (5,944
    )Discontinued operations (Bluepoint)
    
    $
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    (330
    )
    
    
    (330
    )
 Market Disruption-Related Losses Market Disruption-Related
Losses, Net
     7




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##### 



Corporate Results
of Operations Fee Income Corporate and Investment Bank Capital Management Outlook
 Subprime-Related, CMBS and Leveraged Finance
Distribution Exposure, Net
 6/ 30/ 08Exposure6/ 30/ 08
    
    
    Hedged With
    
    
    6/ 30/ 08
    
    
    3/ 31/ 08
    
    
    12/ 31/ 07Gross
    
    
    Various
    
    
    Net
    
    
    Net
    
    
    Net($ in millions)
    
    Exposure
    
    
    Instruments
    
    
    Exposure
    
    
    Exposure
    
    
    ExposureABS CDO-related exposures:Super senior ABS CDO exposuresHigh grade
    
    $
    2,331
    
    
    
    (2,331
    )
    
    
    -
    
    
    
    -
    
    
    
    -Mezzanine
    
    
    2,022
    
    
    
    (1,603
    )
    
    
    419
    
    
    
    439
    
    
    
    613Total super senior ABS CDO exposures
    
    
    4,353
    
    
    
    (3,934
    )
    
    
    419
    
    
    
    439
    
    
    
    613Other retained ABS CDO-related exposures
    
    
    29
    
    
    
    (17
    )
    
    
    12
    
    
    
    68
    
    
    
    208Total ABS CDO-related exposures (a)
    
    
    4,382
    
    
    
    (3,951
    )
    
    
    431
    
    
    
    507
    
    
    
    821Subprime RMBS exposures:AAA rated
    
    
    1,524
    
    
    
    -
    
    
    
    1,524
    
    
    
    1,684
    
    
    
    1,948Below AAA rated (net of hedges) (b)
    
    
    (46
    )
    
    
    -
    
    
    
    (46
    )
    
    
    40
    
    
    
    (253
    )Total subprime RMBS exposures
    
    
    1,478
    
    
    
    -
    
    
    
    1,478
    
    
    
    1,724
    
    
    
    1,695Total subprime-related exposure
    
    
    5,860
    
    
    
    (3,951
    )
    
    
    1,909
    
    
    
    2,231
    
    
    
    2,516Commercial mortgage-related (CMBS)
    
    
    756
    
    
    
    -
    
    
    
    756
    
    
    
    2,954
    
    
    
    7,564Leveraged finance (net of applicable fees)
    
    $
    n.a.
    
    
    
    n.a.
    
    
    
    3,766
    
    
    
    8,157
    
    
    
    9,149
 
 Market Disruption-Related Distribution Exposure
 8




---



##### 



Outlook
   Noninterest Expense Business Segments: Capital
Management Note 1 Consolidated Financial
Statements
 9




---



##### 




    
    Net interest income will decline modestly from first half 2008 levels, excluding the
impact of the SILO lease-related charge;
    
    Fee income will remain exposed to net market disruption-related losses/gains;
    
    A continued focus on expense control;
    
    A continued challenging credit environment;
    
    A full year 2008 effective income tax rate of approximately 20.5 percent to 21.5
percent on a tax-equivalent basis; and
    
    A focus on the actions described above to increase tier 1 capital from current levels.
   Critical Accounting Policies
  Allowance for Loan Losses and Reserve for Unfunded Lending Commitments
 10




---



##### 



11




---



##### 



Goodwill Impairment Business Segments
   12




---



##### 



Goodwill Notes Consolidated Financial Statements
 13




---



##### 



Corporate Results of Operations
 Average Balance Sheets and Interest Rates
 Six Months Ended
    
    
    Six Months EndedJune 30, 2008
    
    
    June 30, 2007Average
    
    
    Interest
    
    
    Average
    
    
    Interest(In millions)
    
    Balances
    
    
    Rates
    
    
    Balances
    
    
    RatesInterest-bearing bank balances
    
    $
    4,616
    
    
    
    3.91
    %
    
    $
    2,459
    
    
    
    6.55
    %Federal funds sold
    
    
    12,470
    
    
    
    2.98
    
    
    
    13,111
    
    
    
    5.16Trading account assets
    
    
    44,115
    
    
    
    5.13
    
    
    
    32,438
    
    
    
    5.93Securities
    
    
    113,452
    
    
    
    5.55
    
    
    
    108,253
    
    
    
    5.42Commercial loans, net (a)
    
    
    202,391
    
    
    
    4.34
    
    
    
    161,423
    
    
    
    7.12Consumer loans, net
    
    
    268,944
    
    
    
    6.86
    
    
    
    256,852
    
    
    
    7.53Total loans, net
    
    
    471,335
    
    
    
    5.78
    
    
    
    418,275
    
    
    
    7.37Loans held for sale
    
    
    10,367
    
    
    
    7.03
    
    
    
    17,199
    
    
    
    6.32Other earning assets
    
    
    10,706
    
    
    
    5.30
    
    
    
    8,119
    
    
    
    7.02Risk management derivatives
    
    
    -
    
    
    
    0.05
    
    
    
    -
    
    
    
    0.03Total earning assets
    
    
    667,061
    
    
    
    5.69
    
    
    
    599,854
    
    
    
    6.88Interest-bearing deposits
    
    
    382,293
    
    
    
    2.67
    
    
    
    342,159
    
    
    
    3.66Federal funds purchased
    
    
    39,622
    
    
    
    2.95
    
    
    
    36,595
    
    
    
    4.97Commercial paper
    
    
    5,348
    
    
    
    2.19
    
    
    
    5,032
    
    
    
    4.70Securities sold short
    
    
    6,581
    
    
    
    3.53
    
    
    
    7,929
    
    
    
    3.81Other short-term borrowings
    
    
    9,722
    
    
    
    1.57
    
    
    
    7,295
    
    
    
    2.66Long-term debt
    
    
    171,506
    
    
    
    4.33
    
    
    
    142,746
    
    
    
    5.36Risk management derivatives
    
    
    -
    
    
    
    0.06
    
    
    
    -
    
    
    
    0.10Total interest-bearing liabilities
    
    
    615,072
    
    
    
    3.20
    
    
    
    541,756
    
    
    
    4.29Net interest income and margin
    
    $
    9,149
    
    
    
    2.74
    %
    
    $
    9,024
    
    
    
    3.01
    %
  Net Interest Income and Margin
   Interest Rate Risk Management
  14




---



##### 



Fee and Other Income
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(In millions)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Service charges
    
    $
    709
    
    
    
    667
    
    
    
    1,385
    
    
    
    1,281Other banking fees
    
    
    518
    
    
    
    449
    
    
    
    1,016
    
    
    
    865Commissions
    
    
    910
    
    
    
    649
    
    
    
    1,824
    
    
    
    1,308Fiduciary and asset management fees
    
    
    1,355
    
    
    
    1,015
    
    
    
    2,794
    
    
    
    1,968Advisory, underwriting and other investment banking fees
    
    
    280
    
    
    
    454
    
    
    
    541
    
    
    
    861Trading account profits (losses)
    
    
    (510
    )
    
    
    195
    
    
    
    (818
    )
    
    
    323Principal investing
    
    
    136
    
    
    
    298
    
    
    
    582
    
    
    
    346Securities gains (losses)
    
    
    (808
    )
    
    
    23
    
    
    
    (1,013
    )
    
    
    76Other income
    
    
    575
    
    
    
    490
    
    
    
    (369
    )
    
    
    946Total fee and other income
    
    $
    3,165
    
    
    
    4,240
    
    
    
    5,942
    
    
    
    7,974
 Fee and Other Income
 
    
    Service charge growth was driven by consumer service charges on higher volume and
improved pricing, while commercial service charges rose on increased volume.
    
    Other banking fees rose largely due to mortgage banking income and interchange fees.
    
    Higher commissions reflected the addition of A.G. Edwards, partially offset by lower
transactional revenue as well as lower insurance commissions.
    
    Increased fiduciary and asset management fees were driven by continued growth in retail
brokerage managed account and other asset-based fees, reflecting the addition of A.G.
Edwards and organic growth, somewhat offset by the effect of lower market valuations.
    
    Advisory and underwriting results declined from a strong first half a year ago driven
by lower origination activity in businesses affected by the market disruption.
    
    Trading account losses of $818 million compared with profits of $323 million in the
same period a year ago, with the decline driven by net market disruption-related losses of
$1.2 billion in the first half of 2008 including:
 o
    
    $387 million in subprime residential asset-backed CDOs and other
subprime-related products largely relating to losses on warehouse positions.o
    
    $399 million in commercial mortgage structured products.o
    
    $229 million in consumer mortgage structured products.o
    
    $147 million of hedging gains on economic hedges in leveraged finance.o
    
    $272 million in non-subprime collateralized debt obligations and other
structured products.o
    
    $94 million of primarily securities write-downs recorded in connection with
the liquidation of an Evergreen fund.
 15




---



##### 




    
    Principal investing results were up from the first half of 2007 largely due to the $466
million of net gains related to the adoption of new fair value accounting standards on
January 1, 2008.
    
    Net securities losses of $1.0 billion were driven by $895 million of market
disruption-related losses and $391 million of losses (of which
$343 million was in the Parent) reflecting our change in intent from holding certain securities to selling them in the near
term, partially offset by the $225 million gain related to the Visa initial public
offering. This compared with gains of $76 million in the first half a year ago.
    
    Other income was a net loss of $369 million in the first half of 2008 compared with
income of $946 million a year ago. The decline was largely attributable to $1.1 billion of
market disruption-related losses in other income in the first half of this year. The year
over year results included:
 o
    
    A $336 million loss in the commercial sales and securitization business in
the first half of 2008 largely related to the market disruption compared with $241
million of income in the same period a year ago.o
    
    A decline in results for certain corporate investments largely reflecting the
$314 million loss on certain BOLI contracts in the first quarter of 2008.o
    
    An $80 million decline in consumer loan sale and securitization results on
lower volume.o
    
    Net market disruption-related losses of $354 million in the leveraged finance
business largely related to net write-downs on unfunded commitments. The first quarter
of 2008 included $792 million of write-downs, while the second quarter results were a
net gain of $438 million reflecting recoveries of previous write-downs related to the
resolution of certain leveraged finance commitments. Related economic hedge results
are reflected in trading. Unfunded commitments are valued assuming the commitments are
fully funded under the current contractual terms.
  16




---



##### 



Noninterest Expense
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(In millions)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Salaries and employee benefits
    
    $
    3,435
    
    
    
    3,122
    
    
    
    6,695
    
    
    
    6,094Occupancy
    
    
    377
    
    
    
    331
    
    
    
    756
    
    
    
    643Equipment
    
    
    317
    
    
    
    309
    
    
    
    640
    
    
    
    616Marketing
    
    
    95
    
    
    
    78
    
    
    
    192
    
    
    
    140Communications and supplies
    
    
    184
    
    
    
    178
    
    
    
    370
    
    
    
    351Professional and consulting fees
    
    
    218
    
    
    
    205
    
    
    
    414
    
    
    
    382Sundry expense
    
    
    1,750
    
    
    
    532
    
    
    
    2,406
    
    
    
    1,022Other noninterest expense
    
    
    6,376
    
    
    
    4,755
    
    
    
    11,473
    
    
    
    9,248Merger-related and restructuring expenses
    
    
    251
    
    
    
    32
    
    
    
    492
    
    
    
    42Goodwill impairment
    
    
    6,060
    
    
    
    -
    
    
    
    6,060
    
    
    
    -Other intangible amortization
    
    
    97
    
    
    
    103
    
    
    
    200
    
    
    
    221Total noninterest expense
    
    $
    12,784
    
    
    
    4,890
    
    
    
    18,225
    
    
    
    9,511
 Noninterest Expense
    Merger-Related and Restructuring Expenses
 Executive Summary Executive Summary: Actions on Capital, Liquidity and Risk.
 17




---



##### 



Income
Taxes
 Business Segments
 Goodwill
  
    
    In the General Bank, an increase of $203 million.
    
    In Wealth Management, an increase of $26 million.
    
    In the Corporate and Investment Bank, an increase of $330 million.
    
    In Capital Management, an increase of $77 million.
    
    In the Parent, a decrease of $406 million, not including $230 million in 2007 losses
from discontinued operations excluded from core segment earnings; previously, this amount
was included in Corporate and Investment Bank segment earnings.
  18




---



##### 



General Bank
Performance Summary
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(Dollars in millions)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Income
statement dataNet interest income (Tax-equivalent)
    
    $
    3,671
    
    
    
    3,372
    
    
    
    7,116
    
    
    
    6,770Fee and other income
    
    
    1,000
    
    
    
    935
    
    
    
    1,980
    
    
    
    1,781Intersegment revenue
    
    
    57
    
    
    
    56
    
    
    
    112
    
    
    
    102Total revenue (Tax-equivalent)
    
    
    4,728
    
    
    
    4,363
    
    
    
    9,208
    
    
    
    8,653Provision for credit losses
    
    
    919
    
    
    
    154
    
    
    
    1,488
    
    
    
    301Noninterest expense
    
    
    2,050
    
    
    
    1,922
    
    
    
    4,088
    
    
    
    3,787Income taxes (Tax-equivalent)
    
    
    642
    
    
    
    834
    
    
    
    1,326
    
    
    
    1,665Segment earnings
    
    $
    1,117
    
    
    
    1,453
    
    
    
    2,306
    
    
    
    2,900Performance
and other dataEconomic profit
    
    $
    919
    
    
    
    1,124
    
    
    
    1,911
    
    
    
    2,250Risk adjusted return on capital (RAROC)
    
    
    33.02
    %
    
    
    52.66
    
    
    
    37.07
    
    
    
    53.24Economic capital, average
    
    $
    16,786
    
    
    
    10,821
    
    
    
    14,739
    
    
    
    10,744Cash overhead efficiency ratio (Tax-equivalent)
    
    
    43.35
    %
    
    
    44.05
    
    
    
    44.39
    
    
    
    43.76Lending commitments
    
    $
    133,201
    
    
    
    129,851
    
    
    
    133,201
    
    
    
    129,851Average loans, net
    
    
    319,574
    
    
    
    291,607
    
    
    
    315,565
    
    
    
    289,985Average core deposits
    
    $
    290,381
    
    
    
    290,455
    
    
    
    293,776
    
    
    
    287,263FTE employees
    
    
    54,415
    
    
    
    57,574
    
    
    
    54,415
    
    
    
    57,574
 General Bank
 
    
    Average loan growth of 9 percent, with 12 percent growth in wholesale and 8 percent
growth in retail. Retail growth included a 5 percent increase in consumer real estate
lending that primarily reflected a decline in prepayments.
    
    Significant efforts in our mortgage business to mitigate risk in the face of declining
housing markets by restructuring its operating model, including exiting the General Banks
wholesale mortgage origination channel; implementing extensive loss mitigation efforts;
tightening underwriting guidelines and undertaking initiatives such as waiving prepayment
fees on Pick-a-Payment loans and assisting Pick-a-Payment customers in refinancing their
loans, to increase the volume of marketable mortgages.
    
    Reduced home equity originations, reflecting implementation of tightened credit
standards. More than 95 percent of our home equity loans are originated through our branch
network and other direct channels.
    
    An 18 percent increase in auto originations with continued focus on higher credit
scores.
    
    Average core deposit growth of 2 percent, largely reflecting strength in wholesale
deposits, which were up 8 percent, and an increase of 1 percent in retail deposits.
 
    
    Growth in net new retail checking accounts, reflecting continued benefits from
retention and acquisition efforts resulting in an increase of 437,000 in the first half of
2008 compared with an increase of 582,000 in the first half of 2007.
    
    305,000 new checking accounts linked to the new Way2Save accounts, which launched in
mid-January 2008.
 19




---



##### 




    
    11 percent growth in fee and other income, with strength in service charges,
interchange income and mortgage banking fee income. Growth of 21 percent in interchange
income reflected a 17 percent increase in debit/credit card volume from the first half of
2007.
    
    Noninterest expense up 8 percent due to growth in credit-related sundry expense, as
well as continued strategic investment in de novo branch activity and western expansion.
During the first half of 2008, 46 de novo branches were opened and 94 branches were
consolidated. As a result of performance initiatives, operating leverage continued to
improve, which enabled continued strategic investment.
    
    An increase in the provision for credit losses to $1.5 billion largely reflecting rapid
deterioration in consumer real estate in certain housing markets and higher losses in
auto.
  Wealth Management
Performance Summary
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(Dollars in millions)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Income
statement dataNet interest income (Tax-equivalent)
    
    $
    202
    
    
    
    182
    
    
    
    384
    
    
    
    362Fee and other income
    
    
    207
    
    
    
    202
    
    
    
    418
    
    
    
    398Intersegment revenue
    
    
    3
    
    
    
    3
    
    
    
    8
    
    
    
    6Total revenue (Tax-equivalent)
    
    
    412
    
    
    
    387
    
    
    
    810
    
    
    
    766Provision for credit losses
    
    
    8
    
    
    
    2
    
    
    
    13
    
    
    
    3Noninterest expense
    
    
    253
    
    
    
    244
    
    
    
    499
    
    
    
    491Income taxes (Tax-equivalent)
    
    
    53
    
    
    
    51
    
    
    
    108
    
    
    
    99Segment earnings
    
    $
    98
    
    
    
    90
    
    
    
    190
    
    
    
    173Performance
and other data
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    

Economic profit
    
    $
    76
    
    
    
    70
    
    
    
    146
    
    
    
    133Risk adjusted return on capital (RAROC)
    
    
    52.61
    %
    
    
    56.73
    
    
    
    52.04
    
    
    
    55.46Economic capital, average
    
    $
    731
    
    
    
    612
    
    
    
    715
    
    
    
    602Cash overhead efficiency ratio (Tax-equivalent)
    
    
    61.05
    %
    
    
    62.80
    
    
    
    61.50
    
    
    
    64.00Lending commitments
    
    $
    6,915
    
    
    
    6,892
    
    
    
    6,915
    
    
    
    6,892Average loans, net
    
    
    23,151
    
    
    
    21,056
    
    
    
    22,758
    
    
    
    20,689Average core deposits
    
    $
    17,559
    
    
    
    17,466
    
    
    
    17,732
    
    
    
    17,368FTE employees
    
    
    4,665
    
    
    
    4,580
    
    
    
    4,665
    
    
    
    4,580
 Wealth Management
 
    
    6 percent growth in net interest income led by loan growth.
    
    22 percent growth in fiduciary and asset management fees as a pricing initiative
implemented in the third quarter of 2007 and other growth offset declines in equity
valuations. Insurance commissions declined largely due to a soft market for insurance
premiums and nonstrategic insurance account dispositions.
 
    
    Modest expense growth as efficiency initiatives offset the effect of private banking
and western expansion investment.
    
    An 8 percent decline in assets under management since year-end 2007 to $77.3 billion
largely due to market depreciation.
 20




---



##### 



Corporate and Investment Bank
Performance Summary
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(Dollars in millions)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Income
statement dataNet interest income (Tax-equivalent)
    
    $
    1,124
    
    
    
    773
    
    
    
    2,152
    
    
    
    1,489Fee and other income
    
    
    657
    
    
    
    1,522
    
    
    
    499
    
    
    
    2,631Intersegment revenue
    
    
    (52
    )
    
    
    (50
    )
    
    
    (102
    )
    
    
    (93
    )Total revenue (Tax-equivalent)
    
    
    1,729
    
    
    
    2,245
    
    
    
    2,549
    
    
    
    4,027Provision for credit losses
    
    
    438
    
    
    
    (2
    )
    
    
    635
    
    
    
    4Noninterest expense
    
    
    960
    
    
    
    1,020
    
    
    
    1,707
    
    
    
    1,931Income taxes (Tax-equivalent)
    
    
    122
    
    
    
    448
    
    
    
    76
    
    
    
    763Segment earnings
    
    $
    209
    
    
    
    779
    
    
    
    131
    
    
    
    1,329Performance
and other dataEconomic profit (loss)
    
    $
    4
    
    
    
    490
    
    
    
    (408
    )
    
    
    776Risk adjusted return on capital (RAROC)
    
    
    11.12
    %
    
    
    33.22
    
    
    
    4.93
    
    
    
    29.22Economic capital, average
    
    $
    13,816
    
    
    
    8,850
    
    
    
    13,525
    
    
    
    8,590Cash overhead efficiency ratio (Tax-equivalent)
    
    
    55.60
    %
    
    
    45.43
    
    
    
    67.00
    
    
    
    47.94Lending commitments
    
    $
    113,559
    
    
    
    115,430
    
    
    
    113,559
    
    
    
    115,430Average loans, net
    
    
    106,642
    
    
    
    76,744
    
    
    
    103,844
    
    
    
    75,065Average core deposits
    
    $
    31,682
    
    
    
    36,713
    
    
    
    32,652
    
    
    
    35,481FTE employees
    
    
    6,394
    
    
    
    6,872
    
    
    
    6,394
    
    
    
    6,872
 Corporate and Investment Bank
 
    
    $577 million in subprime residential asset-backed collateralized debt obligations and
other related exposures;
    
    $730 million in commercial mortgage structured products;
    
    $319 million in consumer mortgage structured products;
    
    $207 million in leveraged finance net of fees and macro credit hedges; and
    
    $296 million in non-subprime collateralized debt obligations and other structured
products.
  
    
    A 45 percent increase in net interest income, which reflected 38 percent growth in
average loans including $7.2 billion of net transfers into the loan portfolio of
certain loans originally slated for disposition, as well as loan growth in the corporate
lending and the global financial institutions businesses.
 21




---



##### 




    
    Growth in equities, global rate products and high grade, offset by lower results in
loan syndications, structured products and merger and advisory products and services.
    
    A 12 percent decline in noninterest expense primarily due to lower revenue-based
incentive compensation and reduced headcount in markets-related businesses.
    
    Provision for credit losses of $635 million largely reflecting residential-related
commercial real estate losses, compared with $4 million in the first half of 2007.
  Capital Management
Performance Summary
 
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(Dollars in millions)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Income
statement dataNet interest income (Tax-equivalent)
    
    $
    308
    
    
    
    260
    
    
    
    589
    
    
    
    519Fee and other income
    
    
    1,995
    
    
    
    1,536
    
    
    
    4,186
    
    
    
    3,013Intersegment revenue
    
    
    (8
    )
    
    
    (11
    )
    
    
    (18
    )
    
    
    (19
    )Total revenue (Tax-equivalent)
    
    
    2,295
    
    
    
    1,785
    
    
    
    4,757
    
    
    
    3,513Provision for credit losses
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Noninterest expense
    
    
    2,327
    
    
    
    1,294
    
    
    
    4,182
    
    
    
    2,531Income taxes
(benefits) (Tax-equivalent)
    
    
    (11
    )
    
    
    179
    
    
    
    210
    
    
    
    358Segment
earnings (loss)
    
    $
    (21
    )
    
    
    312
    
    
    
    365
    
    
    
    624Performance
and other dataEconomic
profit (loss)
    
    $
    (79
    )
    
    
    275
    
    
    
    248
    
    
    
    550Risk adjusted return on capital (RAROC)
    
    
    (3.97
    )%
    
    
    92.77
    
    
    
    34.49
    
    
    
    93.76Economic capital, average
    
    $
    2,105
    
    
    
    1,348
    
    
    
    2,124
    
    
    
    1,341Cash overhead efficiency ratio
(Tax-equivalent)
    
    
    101.39
    %
    
    
    72.47
    
    
    
    87.91
    
    
    
    72.04Lending commitments
    
    $
    1,544
    
    
    
    1,169
    
    
    
    1,544
    
    
    
    1,169Average loans, net
    
    
    2,881
    
    
    
    1,663
    
    
    
    2,722
    
    
    
    1,609Average core deposits
    
    $
    48,647
    
    
    
    31,221
    
    
    
    45,866
    
    
    
    31,450FTE employees
    
    
    29,680
    
    
    
    17,905
    
    
    
    29,680
    
    
    
    17,905
 Capital Management
 
    
    Growth in revenue despite declining equity markets year over year.
 o
    
    $4.3 billion in revenue from our retail brokerage businesses
reflecting transactional revenues of $1.6 billion and asset-based and other income
of $2.7 billion. Retail brokerage fee income increased 53 percent driven by the
addition of A.G. Edwards and growth in managed account and other asset-based fees,
partially offset by lower brokerage transaction activity and equity syndicate
distribution fees.
 22




---



##### 



o
    
    $484 million in revenue from our asset management businesses, down
$108 million, driven by the $118 million of market disruption-related losses.
 
    
    Retail brokerage core deposit growth of $14.4 billion, which was partially offset by
spread compression.
    
    65 percent growth in noninterest expense largely due to the effect of A.G. Edwards as well as
higher legal expense including $500 million for the effect of
recent and active settlement discussions related to
auction rate securities.
 Total Assets Under Management (AUM)
 
 2008
    
    
    2007Second Quarter
    
    
    Fourth Quarter
    
    
    Second Quarter(In billions)
    
    Amount
    
    
    Mix
    
    
    Amount
    
    
    Mix
    
    
    Amount
    
    
    MixEquity
    
    $
    73
    
    
    
    30
    %
    
    $
    84
    
    
    
    30
    %
    
    $
    85
    
    
    
    30
    %Fixed income
    
    
    108
    
    
    
    44
    
    
    
    123
    
    
    
    45
    
    
    
    135
    
    
    
    48Money market
    
    
    65
    
    
    
    26
    
    
    
    68
    
    
    
    25
    
    
    
    61
    
    
    
    22Total assets under
management (a)
    
    $
    246
    
    
    
    100
    %
    
    $
    275
    
    
    
    100
    %
    
    $
    281
    
    
    
    100
    %Securities lending
    
    
    42
    
    
    
    -
    
    
    
    52
    
    
    
    -
    
    
    
    64
    
    
    
    -Total assets under
management and
securities lending
    
    $
    288
    
    
    
    -
    
    
    $
    327
    
    
    
    -
    
    
    $
    345
    
    
    
    -
  Mutual Funds (AUM also included in the above)
 
 2008
    
    
    2007Second Quarter
    
    
    Fourth Quarter
    
    
    Second QuarterFund
    
    
    
    
    
    
    Fund
    
    
    
    
    
    
    Fund(In billions)
    
    Amount
    
    
    Mix
    
    
    Amount
    
    
    Mix
    
    
    Amount
    
    
    MixEquity
    
    $
    30
    
    
    
    29
    %
    
    $
    36
    
    
    
    32
    %
    
    $
    38
    
    
    
    35
    %Fixed income
    
    
    16
    
    
    
    16
    
    
    
    19
    
    
    
    17
    
    
    
    22
    
    
    
    20Money market
    
    
    57
    
    
    
    55
    
    
    
    58
    
    
    
    51
    
    
    
    49
    
    
    
    45Total mutual fund assets
    
    $
    103
    
    
    
    100
    %
    
    $
    113
    
    
    
    100
    %
    
    $
    109
    
    
    
    100
    %
   23




---



##### 



Parent
Performance Summary
 
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(Dollars in millions)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Income statement dataNet interest income (Tax-equivalent)
    
    $
    (961
    )
    
    
    (100
    )
    
    
    (1,092
    )
    
    
    (116
    )Fee and other income
    
    
    (694
    )
    
    
    45
    
    
    
    (1,141
    )
    
    
    151Intersegment revenue
    
    
    -
    
    
    
    2
    
    
    
    -
    
    
    
    4Total revenue (Tax-equivalent)
    
    
    (1,655
    )
    
    
    (53
    )
    
    
    (2,233
    )
    
    
    39Provision for credit losses
    
    
    4,202
    
    
    
    25
    
    
    
    6,262
    
    
    
    48Noninterest expense
    
    
    883
    
    
    
    378
    
    
    
    1,197
    
    
    
    729Minority interest
    
    
    26
    
    
    
    139
    
    
    
    224
    
    
    
    275Income taxes (benefits) (Tax-equivalent)
    
    
    (2,633
    )
    
    
    (322
    )
    
    
    (3,653
    )
    
    
    (656
    )Preferred dividends
    
    
    193
    
    
    
    -
    
    
    
    236
    
    
    
    -Segment loss
    
    $
    (4,326
    )
    
    
    (273
    )
    
    
    (6,499
    )
    
    
    (357
    )Performance and other dataEconomic loss
    
    $
    (1,623
    )
    
    
    (246
    )
    
    
    (2,463
    )
    
    
    (310
    )Risk adjusted return on capital (RAROC)
    
    
    (430.13
    )%
    
    
    (29.52
    )
    
    
    (284.89
    )
    
    
    (13.56
    )Economic capital, average
    
    $
    1,480
    
    
    
    2,436
    
    
    
    1,674
    
    
    
    2,546Cash overhead efficiency ratio
(Tax-equivalent)
    
    
    (47.55
    )%
    
    
    (496.52
    )
    
    
    (44.70
    )
    
    
    1,390.16Lending commitments
    
    $
    543
    
    
    
    569
    
    
    
    543
    
    
    
    569Average loans, net
    
    
    24,486
    
    
    
    30,187
    
    
    
    26,446
    
    
    
    30,927Average core deposits
    
    $
    2,401
    
    
    
    2,641
    
    
    
    2,565
    
    
    
    2,346FTE employees
    
    
    24,798
    
    
    
    23,562
    
    
    
    24,798
    
    
    
    23,562
 Parent
 
    
    A decline in net interest income, reflecting the SILO lease-related charge, growth in
wholesale funding as well as securitization of higher yielding real estate-secured loans
that were largely replaced by lower yielding foreign commercial loans.
    
    A $6.2 billion increase in the provision for credit losses reflecting greater credit
risk and loan growth. More information is in the Provision for Credit Lossessection.
    
    A $1.3 billion decrease in fee and other income, reflecting net securities losses of
$713 million compared with net gains of $70 million in the year ago period, as well as
$314 million of valuation losses on our BOLI portfolio in the first half of 2008. Of the
$713 million of net securities losses, $655 million of
losses were market disruption-related and
$343 million reflected our change in intent from holding
certain securities to selling them in the near term, partially offset by the
$225 million Visa gain.
    
    A 64 percent increase in noninterest expense, primarily reflecting higher legal costs.
    24




---



##### 



25




---



##### 



Balance Sheet Analysis
 Securities
 Securities Available For Sale
 
 June 30,
    
    
    December 31,(In billions)
    
    2008
    
    
    2007Market value
    
    $
    113.5
    
    
    
    115.0Net unrealized loss
    
    $
    (4.0
    )
    
    
    (1.3
    )Memoranda(Market value)Residual interests
    
    $
    0.4
    
    
    
    0.5Retained bonds
Investment grade (a)
    
    $
    16.0
    
    
    
    11.6
  Interest Rate Risk Management
 26




---



##### 



Loans  On-Balance Sheet
 
 2008
    
    
    2007Second
    
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second(In millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterCOMMERCIALCommercial, financial and agricultural
    
    $
    122,628
    
    
    
    119,193
    
    
    
    112,509
    
    
    
    109,269
    
    
    
    102,397Real estate  construction and other
    
    
    18,629
    
    
    
    18,597
    
    
    
    18,543
    
    
    
    18,167
    
    
    
    17,449Real estate  mortgage
    
    
    27,191
    
    
    
    26,370
    
    
    
    23,846
    
    
    
    21,514
    
    
    
    20,448Lease financing
    
    
    24,605
    
    
    
    23,637
    
    
    
    23,913
    
    
    
    23,966
    
    
    
    24,083Foreign
    
    
    35,168
    
    
    
    33,616
    
    
    
    29,540
    
    
    
    26,471
    
    
    
    20,959Total commercial
    
    
    228,221
    
    
    
    221,413
    
    
    
    208,351
    
    
    
    199,387
    
    
    
    185,336ConsumerReal estate secured
    
    
    230,520
    
    
    
    230,197
    
    
    
    227,719
    
    
    
    225,355
    
    
    
    220,293Student loans
    
    
    9,945
    
    
    
    9,324
    
    
    
    8,149
    
    
    
    7,742
    
    
    
    6,757Installment loans
    
    
    29,261
    
    
    
    27,437
    
    
    
    25,635
    
    
    
    24,763
    
    
    
    25,017Total consumer
    
    
    269,726
    
    
    
    266,958
    
    
    
    261,503
    
    
    
    257,860
    
    
    
    252,067Total loans
    
    
    497,947
    
    
    
    488,371
    
    
    
    469,854
    
    
    
    457,247
    
    
    
    437,403Unearned income
    
    
    (9,749
    )
    
    
    (7,889
    )
    
    
    (7,900
    )
    
    
    (8,041
    )
    
    
    (8,283
    )Loans, Net (On-balance sheet)
    
    $
    488,198
    
    
    
    480,482
    
    
    
    461,954
    
    
    
    449,206
    
    
    
    429,120
 Loans  Managed Portfolio (including on-balance sheet)
 
 2008
    
    
    2007Second
    
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second(In millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterCommercial
    
    $
    230,550
    
    
    
    224,875
    
    
    
    217,896
    
    
    
    213,434
    
    
    
    197,079Real estate secured
    
    
    255,190
    
    
    
    254,685
    
    
    
    250,520
    
    
    
    242,526
    
    
    
    238,575Student loans
    
    
    12,718
    
    
    
    12,148
    
    
    
    11,012
    
    
    
    12,618
    
    
    
    11,760Installment loans
    
    
    33,710
    
    
    
    31,571
    
    
    
    30,487
    
    
    
    29,365
    
    
    
    28,273Total managed portfolio
    
    $
    532,168
    
    
    
    523,279
    
    
    
    509,915
    
    
    
    497,943
    
    
    
    475,687
 Loans
   27




---



##### 




    
    Commercial loans represented 46 percent and consumer loans 54 percent of the loan
portfolio.
    
    73 percent of the commercial loan portfolio was secured by collateral.
 
    
    99 percent of the consumer loan portfolio was either secured by collateral or
guaranteed.
  
    
    85 percent is secured by a first lien.
    
    84 percent has an original loan-to-value ratio of 80 percent or less.
    
    95 percent has an original loan-to-value ratio of 90 percent or less.
    
    13 percent of the home equity and prime equity portfolios have an original loan-to-value
ratio greater than 90 percent; of which 43 percent are in the first lien position.
   Asset Quality
 Asset Quality
 
 2008
    
    
    2007Second
    
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second(In millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterNonperforming assetsNonaccrual loans
    
    $
    11,049
    
    
    
    7,788
    
    
    
    4,995
    
    
    
    2,715
    
    
    
    1,945Troubled debt restructurings (a)
    
    
    248
    
    
    
    48
    
    
    
    -
    
    
    
    -
    
    
    
    -Foreclosed properties
    
    
    631
    
    
    
    530
    
    
    
    389
    
    
    
    334
    
    
    
    207Total nonperforming assets
    
    $
    11,928
    
    
    
    8,366
    
    
    
    5,384
    
    
    
    3,049
    
    
    
    2,152as % of loans, net and foreclosed properties
    
    
    2.44
    %
    
    
    1.74
    
    
    
    1.16
    
    
    
    0.68
    
    
    
    0.50Nonperforming assets in loans held for sale
    
    $
    63
    
    
    
    5
    
    
    
    62
    
    
    
    59
    
    
    
    42Total nonperforming assets in loans
and in loans held for sale
    
    $
    11,991
    
    
    
    8,371
    
    
    
    5,446
    
    
    
    3,108
    
    
    
    2,194as % of loans, net, foreclosed properties and
loans held for sale
    
    
    2.41
    %
    
    
    1.70
    
    
    
    1.14
    
    
    
    0.66
    
    
    
    0.49Provision for credit losses
    
    $
    5,567
    
    
    
    2,831
    
    
    
    1,497
    
    
    
    408
    
    
    
    179Allowance for credit losses
    
    $
    10,956
    
    
    
    6,767
    
    
    
    4,717
    
    
    
    3,691
    
    
    
    3,552Allowance for loan lossesas % of loans, net
    
    
    2.20
    %
    
    
    1.37
    
    
    
    0.98
    
    
    
    0.78
    
    
    
    0.79as % of nonaccrual and restructured loans (b)
    
    
    95
    
    
    
    84
    
    
    
    90
    
    
    
    129
    
    
    
    174as % of nonperforming assets (b)
    
    
    90
    
    
    
    78
    
    
    
    84
    
    
    
    115
    
    
    
    157Allowance for credit lossesas % of loans, net
    
    
    2.24
    %
    
    
    1.41
    
    
    
    1.02
    
    
    
    0.82
    
    
    
    0.83Net charge-offs
    
    $
    1,309
    
    
    
    765
    
    
    
    461
    
    
    
    206
    
    
    
    150Commercial, as % of average commercial loans
    
    
    0.88
    %
    
    
    0.48
    
    
    
    0.34
    
    
    
    0.08
    
    
    
    0.07Consumer, as % of average consumer loans
    
    
    1.26
    
    
    
    0.79
    
    
    
    0.46
    
    
    
    0.27
    
    
    
    0.19Total, as % of average loans, net
    
    
    1.10
    %
    
    
    0.66
    
    
    
    0.41
    
    
    
    0.19
    
    
    
    0.14Past due
accruing loans, 90 days and over
    
    $
    1,181
    
    
    
    866
    
    
    
    708
    
    
    
    590
    
    
    
    562Commercial, as a % of loans, net
    
    
    0.14
    %
    
    
    0.05
    
    
    
    0.05
    
    
    
    0.04
    
    
    
    0.03Consumer, as a % of loans, net
    
    
    0.32
    %
    
    
    0.28
    
    
    
    0.23
    
    
    
    0.20
    
    
    
    0.20
   28




---



##### 



Nonperforming Assets
 Nonperforming Assets
 
 2008
    
    
    2007Second
    
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second(In millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterNonaccrual LoansCommercial:Commercial, financial and agricultural
    
    $
    1,229
    
    
    
    908
    
    
    
    602
    
    
    
    354
    
    
    
    318Commercial real estate  construction
and mortgage
    
    
    2,203
    
    
    
    1,750
    
    
    
    1,059
    
    
    
    289
    
    
    
    161Total commercial
    
    
    3,432
    
    
    
    2,658
    
    
    
    1,661
    
    
    
    643
    
    
    
    479Consumer:Real estate secured:First lien
    
    
    7,430
    
    
    
    5,015
    
    
    
    3,234
    
    
    
    1,986
    
    
    
    1,380Second lien
    
    
    147
    
    
    
    75
    
    
    
    58
    
    
    
    41
    
    
    
    44Installment and other loans (a)
    
    
    40
    
    
    
    40
    
    
    
    42
    
    
    
    45
    
    
    
    42Total consumer
    
    
    7,617
    
    
    
    5,130
    
    
    
    3,334
    
    
    
    2,072
    
    
    
    1,466Total nonaccrual loans
    
    
    11,049
    
    
    
    7,788
    
    
    
    4,995
    
    
    
    2,715
    
    
    
    1,945Troubled debt restructurings (b)
    
    
    248
    
    
    
    48
    
    
    
    -
    
    
    
    -
    
    
    
    -Foreclosed properties
    
    
    631
    
    
    
    530
    
    
    
    389
    
    
    
    334
    
    
    
    207Total nonperforming assets
    
    $
    11,928
    
    
    
    8,366
    
    
    
    5,384
    
    
    
    3,049
    
    
    
    2,152As % of loans, net, and foreclosed properties (c)
    
    
    2.44
    %
    
    
    1.74
    
    
    
    1.16
    
    
    
    0.68
    
    
    
    0.50Nonperforming assets included in
loans held for saleCommercial
    
    $
    56
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Consumer
    
    
    7
    
    
    
    5
    
    
    
    62
    
    
    
    50
    
    
    
    37Total nonaccrual loans
    
    
    63
    
    
    
    5
    
    
    
    62
    
    
    
    50
    
    
    
    37Foreclosed properties
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    9
    
    
    
    5Total nonperforming assets included in
loans held for sale
    
    
    63
    
    
    
    5
    
    
    
    62
    
    
    
    59
    
    
    
    42Nonperforming assets included in loans
and in loans held for sale
    
    $
    11,991
    
    
    
    8,371
    
    
    
    5,446
    
    
    
    3,108
    
    
    
    2,194As % of loans, net, foreclosed properties and
loans held for sale (d)
    
    
    2.41
    %
    
    
    1.70
    
    
    
    1.14
    
    
    
    0.66
    
    
    
    0.49Past due
loans, 90 days and over,
and nonaccrual loansAccruing loans past due 90 days and over
    
    $
    1,181
    
    
    
    866
    
    
    
    708
    
    
    
    590
    
    
    
    562Nonaccrual loans
    
    
    11,049
    
    
    
    7,788
    
    
    
    4,995
    
    
    
    2,715
    
    
    
    1,945Total past due loans 90 days and over,
and nonaccrual loans
    
    $
    12,230
    
    
    
    8,654
    
    
    
    5,703
    
    
    
    3,305
    
    
    
    2,507Commercial, as a % of loans, net
    
    
    1.73
    %
    
    
    1.31
    
    
    
    0.89
    
    
    
    0.38
    
    
    
    0.31Consumer, as a % of loans, net
    
    
    3.12
    %
    
    
    2.19
    
    
    
    1.49
    
    
    
    1.00
    
    
    
    0.78
     29




---



##### 



Past Due Loans
 Charge-offs
 
 2008
    
    
    2007Second
    
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second(In millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterLoan losses:Commercial, financial and agricultural
    
    $
    254
    
    
    
    171
    
    
    
    67
    
    
    
    41
    
    
    
    39Commercial real estate  construction and mortgage
    
    
    216
    
    
    
    81
    
    
    
    117
    
    
    
    5
    
    
    
    4Total commercial
    
    
    470
    
    
    
    252
    
    
    
    184
    
    
    
    46
    
    
    
    43Real estate secured
    
    
    700
    
    
    
    351
    
    
    
    156
    
    
    
    59
    
    
    
    40Student loans
    
    
    3
    
    
    
    3
    
    
    
    4
    
    
    
    5
    
    
    
    2Installment and other loans (a)
    
    
    230
    
    
    
    242
    
    
    
    225
    
    
    
    168
    
    
    
    138Total consumer
    
    
    933
    
    
    
    596
    
    
    
    385
    
    
    
    232
    
    
    
    180Total loan losses
    
    
    1,403
    
    
    
    848
    
    
    
    569
    
    
    
    278
    
    
    
    223Loan recoveries:Commercial, financial and agricultural
    
    
    15
    
    
    
    14
    
    
    
    22
    
    
    
    9
    
    
    
    15Commercial real estate  construction and mortgage
    
    
    -
    
    
    
    1
    
    
    
    -
    
    
    
    3
    
    
    
    -Total commercial
    
    
    15
    
    
    
    15
    
    
    
    22
    
    
    
    12
    
    
    
    15Real estate secured
    
    
    18
    
    
    
    10
    
    
    
    9
    
    
    
    12
    
    
    
    11Student loans
    
    
    1
    
    
    
    1
    
    
    
    2
    
    
    
    3
    
    
    
    -Installment and other loans (a)
    
    
    60
    
    
    
    57
    
    
    
    75
    
    
    
    45
    
    
    
    47Total consumer
    
    
    79
    
    
    
    68
    
    
    
    86
    
    
    
    60
    
    
    
    58Total loan recoveries
    
    
    94
    
    
    
    83
    
    
    
    108
    
    
    
    72
    
    
    
    73Net charge-offs:Commercial, financial and agricultural
    
    
    239
    
    
    
    157
    
    
    
    45
    
    
    
    32
    
    
    
    24Commercial real estate  construction and mortgage
    
    
    216
    
    
    
    80
    
    
    
    117
    
    
    
    2
    
    
    
    4Total commercial
    
    
    455
    
    
    
    237
    
    
    
    162
    
    
    
    34
    
    
    
    28Real estate secured
    
    
    682
    
    
    
    341
    
    
    
    147
    
    
    
    47
    
    
    
    29Student loans
    
    
    2
    
    
    
    2
    
    
    
    2
    
    
    
    2
    
    
    
    2Installment and other loans (a)
    
    
    170
    
    
    
    185
    
    
    
    150
    
    
    
    123
    
    
    
    91Total consumer
    
    
    854
    
    
    
    528
    
    
    
    299
    
    
    
    172
    
    
    
    122Net charge-offs
    
    $
    1,309
    
    
    
    765
    
    
    
    461
    
    
    
    206
    
    
    
    150Net
charge-offs as a % of average loans, net(b)Commercial, financial and agricultural
    
    
    0.60
    %
    
    
    0.41
    
    
    
    0.12
    
    
    
    0.10
    
    
    
    0.07Commercial real estate  construction and mortgage
    
    
    1.89
    
    
    
    0.73
    
    
    
    1.12
    
    
    
    0.02
    
    
    
    0.04Total commercial
    
    
    0.88
    
    
    
    0.48
    
    
    
    0.34
    
    
    
    0.08
    
    
    
    0.07Real estate secured
    
    
    1.18
    
    
    
    0.59
    
    
    
    0.26
    
    
    
    0.08
    
    
    
    0.05Student loans
    
    
    0.07
    
    
    
    0.08
    
    
    
    0.10
    
    
    
    0.14
    
    
    
    0.07Installment and other loans (a)
    
    
    2.36
    
    
    
    2.76
    
    
    
    2.35
    
    
    
    1.99
    
    
    
    1.47Total consumer
    
    
    1.26
    
    
    
    0.79
    
    
    
    0.46
    
    
    
    0.27
    
    
    
    0.19Total, as % of average loans, net
    
    
    1.10
    %
    
    
    0.66
    
    
    
    0.41
    
    
    
    0.19
    
    
    
    0.14Consumer real estate secured net charge-offs:First lien
    
    $
    592
    
    
    
    291
    
    
    
    122
    
    
    
    32
    
    
    
    17Second lien
    
    
    90
    
    
    
    50
    
    
    
    25
    
    
    
    15
    
    
    
    12Total consumer real estate secured net charge-offs
    
    $
    682
    
    
    
    341
    
    
    
    147
    
    
    
    47
    
    
    
    29
   Net Charge-offs
 30




---



##### 



Allowance for Credit Losses
 
 2008
    
    
    2007Second
    
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second(In millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterAllowance for credit losses(a)Allowance for loan losses, beginning of period
    
    $
    6,567
    
    
    
    4,507
    
    
    
    3,505
    
    
    
    3,390
    
    
    
    3,378Net charge-offs
    
    
    (1,309
    )
    
    
    (765
    )
    
    
    (461
    )
    
    
    (206
    )
    
    
    (150
    )Allowance relating to loans acquired, transferred
to loans held for sale or sold
    
    
    (69
    )
    
    
    (16
    )
    
    
    (10
    )
    
    
    (63
    )
    
    
    (10
    )Provision for credit losses related to loans
transferred to loans held for sale or sold (b)
    
    
    51
    
    
    
    7
    
    
    
    6
    
    
    
    3
    
    
    
    4Provision for credit losses
    
    
    5,504
    
    
    
    2,834
    
    
    
    1,467
    
    
    
    381
    
    
    
    168Allowance for loan losses, end of period
    
    
    10,744
    
    
    
    6,567
    
    
    
    4,507
    
    
    
    3,505
    
    
    
    3,390Reserve for unfunded lending commitments,
beginning of period
    
    
    200
    
    
    
    210
    
    
    
    186
    
    
    
    162
    
    
    
    155Provision for credit losses
    
    
    12
    
    
    
    (10
    )
    
    
    24
    
    
    
    24
    
    
    
    7Reserve for unfunded lending commitments,
end of period
    
    
    212
    
    
    
    200
    
    
    
    210
    
    
    
    186
    
    
    
    162Allowance for credit losses
    
    $
    10,956
    
    
    
    6,767
    
    
    
    4,717
    
    
    
    3,691
    
    
    
    3,552Allowance for loan lossesas % of loans, net
    
    
    2.20
    %
    
    
    1.37
    
    
    
    0.98
    
    
    
    0.78
    
    
    
    0.79as % of nonaccrual and restructured loans (c)
    
    
    95
    
    
    
    84
    
    
    
    90
    
    
    
    129
    
    
    
    174as % of nonperforming assets (c)
    
    
    90
    
    
    
    78
    
    
    
    84
    
    
    
    115
    
    
    
    157Allowance for credit lossesas % of loans, net
    
    
    2.24
    %
    
    
    1.41
    
    
    
    1.02
    
    
    
    0.82
    
    
    
    0.83
    Provision and Allowance for Credit Losses
 
    
    $5.7 billion due principally to higher expected loss factors for Pick-a-Payment, home equity and
traditional mortgage, and auto portfolios on significant market weakness and changing
consumer behaviors. Of this amount, $4.4 billion related to the Pick-a-Payment portfolio.
    
    $247 million on the commercial portfolio on higher loss frequency and severity
expectations.
    
    $157 million on the commercial real estate portfolio, including $127 million on
impaired loans.
    
    $165 million higher unallocated reserves due to increased credit risk uncertainty
stemming from economic and other market environmental factors.
  31




---



##### 



Table 11: Allowance for Credit Losses Corporate Results of Operations
   Loans Held for Sale
   Goodwill
  32




---



##### 



Critical Accounting Policies: Goodwill Impairment
  Goodwill Impairment
 
 General Bank
    
    
    Corporate and Investment Bank
    
    
    All Other
    
    
    June 30,Retail and
    
    
    Corporate
    
    
    Investment
    
    
    Reporting
    
    
    2008(Dollars in millions)
    
    Commercial
    
    
    Small Business
    
    
    Lending
    
    
    Banking
    
    
    Units
    
    
    TotalAssigned goodwill
    
    $
    7,083
    
    
    
    23,976
    
    
    
    2,937
    
    
    
    597
    
    
    
    8,460
    
    
    
    43,053Impairment
    
    
    (2,526
    )
    
    
    -
    
    
    
    (2,937
    )
    
    
    (597
    )
    
    
    -
    
    
    
    (6,060
    )Remaining goodwill
    
    $
    4,557
    
    
    
    23,976
    
    
    
    -
    
    
    
    -
    
    
    
    8,460
    
    
    
    36,993
  Critical Accounting Policies
 33




---



##### 



Liquidity and Capital Adequacy
 Executive Summary
 Core Deposits
 Purchased Funds
  Long-term Debt
    34




---



##### 



Stockholders Equity
     Credit Lines
 Stockholders Equity
 Dividend and Share Activity
 
 Six Months EndedJune 30,(In millions, except per share data)
    
    2008
    
    
    2007Dividends on common shares
    
    $
    2,082
    
    
    
    2,137Dividends per common share
    
    $
    1.02
    
    
    
    1.12Common shares repurchased
    
    
    1
    
    
    
    18Average diluted common
shares outstanding
    
    
    2,048
    
    
    
    1,922
   35




---



##### 



Executive
Summary
   Subsidiary Dividends
 Regulatory Capital
 Off-Balance Sheet Transactions
 Summary of Off-Balance Sheet Exposures
 Summary of Off-Balance Sheet Exposures
 
 June 30, 2008
    
    
    December 31, 2007Carrying
    
    
    
    
    
    
    Carrying(In millions)
    
    Amount
    
    
    Exposure
    
    
    Amount
    
    
    ExposureGUARANTEESSecurities and other lending indemnifications
    
    $
    -
    
    
    
    48,041
    
    
    
    -
    
    
    
    59,238Standby letters of credit
    
    
    118
    
    
    
    32,423
    
    
    
    124
    
    
    
    29,295Liquidity agreements
    
    
    360
    
    
    
    29,773
    
    
    
    14
    
    
    
    36,926Loans sold with recourse
    
    
    45
    
    
    
    6,111
    
    
    
    44
    
    
    
    6,710Residual value guarantees
    
    
    -
    
    
    
    1,315
    
    
    
    -
    
    
    
    1,220Written put options
    
    
    2,373
    
    
    
    14,892
    
    
    
    2,001
    
    
    
    15,273Total guarantees
    
    $
    2,896
    
    
    
    132,555
    
    
    
    2,183
    
    
    
    148,662
  36




---



##### 



Business Segments Parent Business Segments Capital Management
 Risk Governance and Administration
 Market Risk Management
  Interest Rate Risk Management
   37




---



##### 



38




---



##### 



Net Interest Income Sensitivity Policy Period Sensitivity Measurement
  Policy Period
Sensitivity Measurement
 
 Implied
    
    
    PercentFed Funds
    
    
    Fed Funds
    
    
    Net InterestRate at
    
    
    Rate for
    
    
    IncomeJune 30, 2008
    
    
    June 2009
    
    
    SensitivityMarket Forward Rate Scenarios(a)
    
    
    2.00
    %
    
    
    3.15
    
    
    
    -High Rate Composite
    
    
    
    
    
    
    5.15
    
    
    
    (0.90
    )Low Rate
    
    
    
    
    
    
    1.15
    
    
    
    0.50
 (a) Assumes base federal funds rate mirrors market expectations.
   Accounting and Regulatory Matters
  Business Combinations and Noncontrolling Interests Business Combinations Noncontrolling
 39




---



##### 



Interests in Consolidated
Financial Statements an amendment of ARB 51.
    Derivative Disclosure Disclosures about Derivative
Instruments and Hedging Activitiesan amendment of FASB Statement No. 133
 Hedge Accounting Accounting for Hedging Activitiesan amendment of FASB Statement
No. 133
 40




---



##### 



Transfers of Financial Assets and Consolidation Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities Consolidation of Variable
Interest Entities
   Legislative and Regulatory Matters
  41




---



##### 



Table 1
 
 EXPLANATION OF OUR USE OF NON-GAAP FINANCIAL MEASURES
 
    Loans  On-Balance Sheet, and
Managed and Servicing Portfolios
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(In millions)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Net interest income (GAAP)
    
    $
    4,290
    
    
    
    4,449
    
    
    
    9,042
    
    
    
    8,949Tax-equivalent adjustment
    
    
    54
    
    
    
    38
    
    
    
    107
    
    
    
    75Net interest income (Tax-equivalent)
    
    $
    4,344
    
    
    
    4,487
    
    
    
    9,149
    
    
    
    9,024
 42




---



##### 



Table 2
 
 SELECTED STATISTICAL DATA
 2008
    
    
    2007Second
    
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second(Dollars in millions, except per share data)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterPROFITABILITYReturn on average common stockholders equity
    
    
    (50.47
    )%
    
    
    (3.81
    )
    
    
    0.28
    
    
    
    9.19
    
    
    
    13.54Return on average total stockholders equity
    
    
    (43.86
    )
    
    
    (3.39
    )
    
    
    0.28
    
    
    
    9.19
    
    
    
    13.54Net interest margin (a)
    
    
    2.58
    
    
    
    2.92
    
    
    
    2.88
    
    
    
    2.92
    
    
    
    2.96Fee and other income as % of total revenue
    
    
    42.15
    
    
    
    36.62
    
    
    
    36.99
    
    
    
    39.02
    
    
    
    48.58Effective income tax rate
    
    
    18.06
    %
    
    
    26.02
    
    
    
    122.05
    
    
    
    27.33
    
    
    
    32.78ASSET QUALITYAllowance for loan losses as % of loans, net
    
    
    2.20
    %
    
    
    1.37
    
    
    
    0.98
    
    
    
    0.78
    
    
    
    0.79Allowance for loan losses as % of nonperforming assets (b)
    
    
    90
    
    
    
    78
    
    
    
    84
    
    
    
    115
    
    
    
    157Allowance for credit losses as % of loans, net
    
    
    2.24
    
    
    
    1.41
    
    
    
    1.02
    
    
    
    0.82
    
    
    
    0.83Net charge-offs as % of average loans, net
    
    
    1.10
    
    
    
    0.66
    
    
    
    0.41
    
    
    
    0.19
    
    
    
    0.14Nonperforming assets as % of loans, net,
foreclosed properties and loans held for sale
    
    
    2.41
    %
    
    
    1.70
    
    
    
    1.14
    
    
    
    0.66
    
    
    
    0.49CAPITAL ADEQUACYTier 1 capital ratio
    
    
    8.00
    %
    
    
    7.42
    
    
    
    7.35
    
    
    
    7.10
    
    
    
    7.47Total capital ratio
    
    
    12.74
    
    
    
    12.05
    
    
    
    11.82
    
    
    
    10.84
    
    
    
    11.46Leverage
    
    
    6.57
    
    
    
    6.18
    
    
    
    6.09
    
    
    
    6.10
    
    
    
    6.23Tangible capital ratio
    
    
    4.68
    
    
    
    4.31
    
    
    
    4.29
    
    
    
    4.19
    
    
    
    4.30Tangible capital ratio (c)
    
    
    5.07
    %
    
    
    4.59
    
    
    
    4.50
    
    
    
    4.56
    
    
    
    4.76OTHER DATAFTE employees
    
    
    119,952
    
    
    
    120,378
    
    
    
    121,890
    
    
    
    109,724
    
    
    
    110,493Total financial centers/brokerage offices
    
    
    4,820
    
    
    
    4,850
    
    
    
    4,894
    
    
    
    4,167
    
    
    
    4,135ATMs
    
    
    5,277
    
    
    
    5,308
    
    
    
    5,139
    
    
    
    5,123
    
    
    
    5,099Actual common shares (In millions) (d)
    
    
    2,159
    
    
    
    1,992
    
    
    
    1,980
    
    
    
    1,901
    
    
    
    1,903Common stock price
    
    $
    15.53
    
    
    
    27.00
    
    
    
    38.03
    
    
    
    50.15
    
    
    
    51.25Market capitalization (d)
    
    $
    33,527
    
    
    
    53,782
    
    
    
    75,302
    
    
    
    95,326
    
    
    
    97,530
     43




---



##### 



Table 3
 
 SUMMARIES OF INCOME, PER COMMON SHARE AND BALANCE SHEET DATA
 2008
    
    
    2007Second
    
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second(In millions, except per share data)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterSUMMARIES OF INCOMEInterest income
    
    $
    8,646
    
    
    
    10,179
    
    
    
    10,910
    
    
    
    10,831
    
    
    
    10,350Tax-equivalent adjustment
    
    
    54
    
    
    
    53
    
    
    
    44
    
    
    
    33
    
    
    
    38Interest income (a)
    
    
    8,700
    
    
    
    10,232
    
    
    
    10,954
    
    
    
    10,864
    
    
    
    10,388Interest expense
    
    
    4,356
    
    
    
    5,427
    
    
    
    6,280
    
    
    
    6,280
    
    
    
    5,901Net interest income (a)
    
    
    4,344
    
    
    
    4,805
    
    
    
    4,674
    
    
    
    4,584
    
    
    
    4,487Provision for credit losses
    
    
    5,567
    
    
    
    2,831
    
    
    
    1,497
    
    
    
    408
    
    
    
    179Net interest income after provision for credit losses (a)
    
    
    (1,223
    )
    
    
    1,974
    
    
    
    3,177
    
    
    
    4,176
    
    
    
    4,308Securities gains (losses)
    
    
    (808
    )
    
    
    (205
    )
    
    
    (320
    )
    
    
    (34
    )
    
    
    23Fee and other income
    
    
    3,973
    
    
    
    2,982
    
    
    
    3,064
    
    
    
    2,967
    
    
    
    4,217Merger-related and restructuring expenses
    
    
    251
    
    
    
    241
    
    
    
    187
    
    
    
    36
    
    
    
    32Goodwill impairment
    
    
    6,060
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Other noninterest expense
    
    
    6,473
    
    
    
    5,200
    
    
    
    5,599
    
    
    
    4,489
    
    
    
    4,858Minority interest in income of consolidated subsidiaries
    
    
    (18
    )
    
    
    155
    
    
    
    107
    
    
    
    189
    
    
    
    139Income (loss) from continuing operations before
income taxes (benefits) (a)
    
    
    (10,824
    )
    
    
    (845
    )
    
    
    28
    
    
    
    2,395
    
    
    
    3,519Income taxes (benefits)
    
    
    (1,963
    )
    
    
    (234
    )
    
    
    (209
    )
    
    
    656
    
    
    
    1,140Tax-equivalent adjustment
    
    
    54
    
    
    
    53
    
    
    
    44
    
    
    
    33
    
    
    
    38Income (loss) from continuing operations
    
    
    (8,915
    )
    
    
    (664
    )
    
    
    193
    
    
    
    1,706
    
    
    
    2,341Discontinued operations, net of income taxes
    
    
    -
    
    
    
    -
    
    
    
    (142
    )
    
    
    (88
    )
    
    
    -Net income (loss)
    
    
    (8,915
    )
    
    
    (664
    )
    
    
    51
    
    
    
    1,618
    
    
    
    2,341Dividends on preferred stock
    
    
    193
    
    
    
    43
    
    
    
    -
    
    
    
    -
    
    
    
    -Net income (loss) available to common stockholders
    
    $
    (9,108
    )
    
    
    (707
    )
    
    
    51
    
    
    
    1,618
    
    
    
    2,341PER COMMON SHARE DATABasic earningsIncome (loss) from continuing operations
    
    $
    (4.31
    )
    
    
    (0.36
    )
    
    
    0.10
    
    
    
    0.91
    
    
    
    1.24Net income (loss) available to common stockholders
    
    
    (4.31
    )
    
    
    (0.36
    )
    
    
    0.03
    
    
    
    0.86
    
    
    
    1.24Diluted
earnings (b)
Income (loss) from continuing operations
    
    
    (4.31
    )
    
    
    (0.36
    )
    
    
    0.10
    
    
    
    0.90
    
    
    
    1.22Net income (loss) available to common stockholders
    
    
    (4.31
    )
    
    
    (0.36
    )
    
    
    0.03
    
    
    
    0.85
    
    
    
    1.22Cash dividends
    
    $
    0.38
    
    
    
    0.64
    
    
    
    0.64
    
    
    
    0.64
    
    
    
    0.56Average common shares - Basic
    
    
    2,111
    
    
    
    1,963
    
    
    
    1,959
    
    
    
    1,885
    
    
    
    1,891Average common shares - Diluted
    
    
    2,119
    
    
    
    1,977
    
    
    
    1,983
    
    
    
    1,910
    
    
    
    1,919Average common stockholders equity

Quarter-to-date
    
    $
    72,579
    
    
    
    74,697
    
    
    
    73,599
    
    
    
    69,857
    
    
    
    69,317Year-to-date
    
    
    73,638
    
    
    
    74,697
    
    
    
    70,533
    
    
    
    69,500
    
    
    
    69,318Book value per common share (c)
    
    
    30.25
    
    
    
    36.24
    
    
    
    37.66
    
    
    
    36.90
    
    
    
    36.40Common stock price 

High
    
    
    30.08
    
    
    
    38.76
    
    
    
    51.80
    
    
    
    52.64
    
    
    
    56.81Low
    
    
    15.53
    
    
    
    25.60
    
    
    
    38.03
    
    
    
    44.94
    
    
    
    51.25Period-end
    
    $
    15.53
    
    
    
    27.00
    
    
    
    38.03
    
    
    
    50.15
    
    
    
    51.25To earnings ratio (d)
    
    
    (4.10
    )X

    
    15.52
    
    
    
    11.52
    
    
    
    11.22
    
    
    
    10.70To book value
    
    
    51
    %
    
    
    75
    
    
    
    101
    
    
    
    136
    
    
    
    141BALANCE SHEET DATAAssets
    
    $
    812,433
    
    
    
    808,575
    
    
    
    782,896
    
    
    
    754,168
    
    
    
    715,428Long-term debt
    
    $
    184,401
    
    
    
    175,653
    
    
    
    161,007
    
    
    
    158,584
    
    
    
    142,047
     44




---



##### 



Table 4
 
 MERGER-RELATED AND RESTRUCTURING EXPENSES
 
 SixMonthsEndedJune 30,(In millions)
    
    2008Wachovia/A.G. Edwards
    
    $
    411Wachovia/Golden West
    
    
    79Other
    
    
    2Total merger-related and restructuring expenses
    
    $
    492
 45




---



##### 



Table 5
 
 BUSINESS SEGMENTS (a)
 
 2008
    
    
    2007Second
    
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second(Dollars in millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterGENERAL BANK COMBINED (b)Net interest income (c)
    
    $
    3,671
    
    
    
    3,445
    
    
    
    3,401
    
    
    
    3,464
    
    
    
    3,372Fee and other income
    
    
    1,000
    
    
    
    980
    
    
    
    929
    
    
    
    936
    
    
    
    935Intersegment revenue
    
    
    57
    
    
    
    55
    
    
    
    58
    
    
    
    59
    
    
    
    56Total revenue (c)
    
    
    4,728
    
    
    
    4,480
    
    
    
    4,388
    
    
    
    4,459
    
    
    
    4,363Provision for credit losses
    
    
    919
    
    
    
    569
    
    
    
    320
    
    
    
    207
    
    
    
    154Noninterest expense
    
    
    2,050
    
    
    
    2,038
    
    
    
    2,037
    
    
    
    1,897
    
    
    
    1,922Income taxes
    
    
    632
    
    
    
    673
    
    
    
    730
    
    
    
    850
    
    
    
    824Tax-equivalent adjustment
    
    
    10
    
    
    
    11
    
    
    
    11
    
    
    
    11
    
    
    
    10Segment earnings
    
    $
    1,117
    
    
    
    1,189
    
    
    
    1,290
    
    
    
    1,494
    
    
    
    1,453Economic profit
    
    $
    919
    
    
    
    992
    
    
    
    1,043
    
    
    
    1,189
    
    
    
    1,124Risk adjusted return on capital
    
    
    33.02
    %
    
    
    42.43
    
    
    
    47.99
    
    
    
    54.28
    
    
    
    52.66Economic capital, average
    
    $
    16,786
    
    
    
    12,693
    
    
    
    11,183
    
    
    
    10,898
    
    
    
    10,821Cash overhead efficiency ratio (c)
    
    
    43.35
    %
    
    
    45.50
    
    
    
    46.42
    
    
    
    42.56
    
    
    
    44.05Lending commitments
    
    $
    133,201
    
    
    
    132,805
    
    
    
    133,733
    
    
    
    132,779
    
    
    
    129,851Average loans, net
    
    
    319,574
    
    
    
    311,556
    
    
    
    303,396
    
    
    
    294,709
    
    
    
    291,607Average core deposits
    
    $
    290,381
    
    
    
    297,171
    
    
    
    296,194
    
    
    
    290,133
    
    
    
    290,455FTE employees
    
    
    54,415
    
    
    
    54,831
    
    
    
    55,559
    
    
    
    56,519
    
    
    
    57,574COMMERCIALNet interest income (c)
    
    $
    1,013
    
    
    
    943
    
    
    
    932
    
    
    
    903
    
    
    
    865Fee and other income
    
    
    133
    
    
    
    131
    
    
    
    116
    
    
    
    114
    
    
    
    110Intersegment revenue
    
    
    46
    
    
    
    43
    
    
    
    43
    
    
    
    44
    
    
    
    42Total revenue (c)
    
    
    1,192
    
    
    
    1,117
    
    
    
    1,091
    
    
    
    1,061
    
    
    
    1,017Provision for credit losses
    
    
    180
    
    
    
    174
    
    
    
    178
    
    
    
    121
    
    
    
    96Noninterest expense
    
    
    394
    
    
    
    400
    
    
    
    389
    
    
    
    347
    
    
    
    353Income taxes
    
    
    215
    
    
    
    187
    
    
    
    181
    
    
    
    205
    
    
    
    198Tax-equivalent adjustment
    
    
    10
    
    
    
    11
    
    
    
    11
    
    
    
    11
    
    
    
    10Segment earnings
    
    $
    393
    
    
    
    345
    
    
    
    332
    
    
    
    377
    
    
    
    360Economic profit
    
    $
    224
    
    
    
    213
    
    
    
    240
    
    
    
    256
    
    
    
    230Risk adjusted return on capital
    
    
    28.20
    %
    
    
    28.09
    
    
    
    33.01
    
    
    
    35.20
    
    
    
    33.43Economic capital, average
    
    $
    5,245
    
    
    
    5,015
    
    
    
    4,333
    
    
    
    4,196
    
    
    
    4,110Cash overhead efficiency ratio (c)
    
    
    33.04
    %
    
    
    35.78
    
    
    
    35.73
    
    
    
    32.64
    
    
    
    34.79Average loans, net
    
    $
    88,272
    
    
    
    84,875
    
    
    
    82,127
    
    
    
    80,172
    
    
    
    78,178Average core deposits
    
    $
    45,396
    
    
    
    47,844
    
    
    
    46,460
    
    
    
    42,828
    
    
    
    43,145RETAIL AND SMALL BUSINESSNet interest income (c)
    
    $
    2,658
    
    
    
    2,502
    
    
    
    2,469
    
    
    
    2,561
    
    
    
    2,507Fee and other income
    
    
    867
    
    
    
    849
    
    
    
    813
    
    
    
    822
    
    
    
    825Intersegment revenue
    
    
    11
    
    
    
    12
    
    
    
    15
    
    
    
    15
    
    
    
    14Total revenue (c)
    
    
    3,536
    
    
    
    3,363
    
    
    
    3,297
    
    
    
    3,398
    
    
    
    3,346Provision for credit losses
    
    
    739
    
    
    
    395
    
    
    
    142
    
    
    
    86
    
    
    
    58Noninterest expense
    
    
    1,656
    
    
    
    1,638
    
    
    
    1,648
    
    
    
    1,550
    
    
    
    1,569Income taxes
    
    
    417
    
    
    
    486
    
    
    
    549
    
    
    
    645
    
    
    
    626Tax-equivalent adjustment
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Segment earnings
    
    $
    724
    
    
    
    844
    
    
    
    958
    
    
    
    1,117
    
    
    
    1,093Economic profit
    
    $
    695
    
    
    
    779
    
    
    
    803
    
    
    
    933
    
    
    
    894Risk adjusted return on capital
    
    
    35.21
    %
    
    
    51.79
    
    
    
    57.46
    
    
    
    66.23
    
    
    
    64.44Economic capital, average
    
    $
    11,541
    
    
    
    7,678
    
    
    
    6,850
    
    
    
    6,702
    
    
    
    6,711Cash overhead efficiency ratio (c)
    
    
    46.83
    %
    
    
    48.72
    
    
    
    49.95
    
    
    
    45.65
    
    
    
    46.86Average loans, net
    
    $
    231,302
    
    
    
    226,681
    
    
    
    221,269
    
    
    
    214,537
    
    
    
    213,429Average core deposits
    
    $
    244,985
    
    
    
    249,327
    
    
    
    249,734
    
    
    
    247,305
    
    
    
    247,310
    (Continued)
 46




---



##### 



Table 5
BUSINESS SEGMENTS
 2008
    
    
    2007Second
    
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second(Dollars in millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterWEALTH MANAGEMENTNet interest income (a)
    
    $
    202
    
    
    
    182
    
    
    
    183
    
    
    
    186
    
    
    
    182Fee and other income
    
    
    207
    
    
    
    211
    
    
    
    215
    
    
    
    185
    
    
    
    202Intersegment revenue
    
    
    3
    
    
    
    5
    
    
    
    3
    
    
    
    4
    
    
    
    3Total revenue (a)
    
    
    412
    
    
    
    398
    
    
    
    401
    
    
    
    375
    
    
    
    387Provision for credit losses
    
    
    8
    
    
    
    5
    
    
    
    7
    
    
    
    6
    
    
    
    2Noninterest expense
    
    
    253
    
    
    
    246
    
    
    
    250
    
    
    
    240
    
    
    
    244Income taxes
    
    
    53
    
    
    
    55
    
    
    
    52
    
    
    
    48
    
    
    
    51Tax-equivalent adjustment
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Segment earnings
    
    $
    98
    
    
    
    92
    
    
    
    92
    
    
    
    81
    
    
    
    90Economic profit
    
    $
    76
    
    
    
    70
    
    
    
    73
    
    
    
    62
    
    
    
    70Risk adjusted return on capital
    
    
    52.61
    %
    
    
    51.44
    
    
    
    58.46
    
    
    
    50.96
    
    
    
    56.73Economic capital, average
    
    $
    731
    
    
    
    699
    
    
    
    616
    
    
    
    616
    
    
    
    612Cash overhead efficiency ratio (a)
    
    
    61.05
    %
    
    
    61.98
    
    
    
    62.23
    
    
    
    64.36
    
    
    
    62.80Lending commitments
    
    $
    6,915
    
    
    
    7,007
    
    
    
    7,011
    
    
    
    7,007
    
    
    
    6,892Average loans, net
    
    
    23,151
    
    
    
    22,365
    
    
    
    21,727
    
    
    
    21,494
    
    
    
    21,056Average core deposits
    
    $
    17,559
    
    
    
    17,906
    
    
    
    17,132
    
    
    
    17,167
    
    
    
    17,466FTE employees
    
    
    4,665
    
    
    
    4,650
    
    
    
    4,712
    
    
    
    4,547
    
    
    
    4,580
  (Continued)
 47




---



##### 



Table 5
BUSINESS SEGMENTS
 2008
    
    
    2007Second
    
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second(Dollars in millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterCORPORATE AND INVESTMENT BANK COMBINED (a)Net interest income (b)
    
    $
    1,124
    
    
    
    1,028
    
    
    
    988
    
    
    
    839
    
    
    
    773Fee and other income
    
    
    657
    
    
    
    (158
    )
    
    
    (552
    )
    
    
    175
    
    
    
    1,522Intersegment revenue
    
    
    (52
    )
    
    
    (50
    )
    
    
    (50
    )
    
    
    (52
    )
    
    
    (50
    )Total revenue (b)
    
    
    1,729
    
    
    
    820
    
    
    
    386
    
    
    
    962
    
    
    
    2,245Provision for credit losses
    
    
    438
    
    
    
    197
    
    
    
    112
    
    
    
    1
    
    
    
    (2
    )Noninterest expense
    
    
    960
    
    
    
    747
    
    
    
    953
    
    
    
    626
    
    
    
    1,020Income taxes (benefits)
    
    
    103
    
    
    
    (67
    )
    
    
    (267
    )
    
    
    114
    
    
    
    437Tax-equivalent adjustment
    
    
    19
    
    
    
    21
    
    
    
    19
    
    
    
    9
    
    
    
    11Segment earnings (loss)
    
    $
    209
    
    
    
    (78
    )
    
    
    (431
    )
    
    
    212
    
    
    
    779Economic profit (loss)
    
    $
    4
    
    
    
    (412
    )
    
    
    (744
    )
    
    
    (114
    )
    
    
    490Risk adjusted return on capital
    
    
    11.12
    %
    
    
    (1.53
    )
    
    
    (15.22
    )
    
    
    6.39
    
    
    
    33.22Economic capital, average
    
    $
    13,816
    
    
    
    13,233
    
    
    
    11,263
    
    
    
    9,791
    
    
    
    8,850Cash overhead efficiency ratio (b)
    
    
    55.60
    %
    
    
    91.00
    
    
    
    247.26
    
    
    
    65.15
    
    
    
    45.43Lending commitments
    
    $
    113,559
    
    
    
    114,114
    
    
    
    118,734
    
    
    
    119,791
    
    
    
    115,430Average loans, net
    
    
    106,642
    
    
    
    101,046
    
    
    
    91,665
    
    
    
    82,969
    
    
    
    76,744Average core deposits
    
    $
    31,682
    
    
    
    33,623
    
    
    
    36,214
    
    
    
    37,188
    
    
    
    36,713FTE employees
    
    
    6,394
    
    
    
    6,342
    
    
    
    6,600
    
    
    
    6,730
    
    
    
    6,872CORPORATE LENDINGNet interest income (b)
    
    $
    410
    
    
    
    431
    
    
    
    417
    
    
    
    412
    
    
    
    405Fee and other income
    
    
    69
    
    
    
    154
    
    
    
    148
    
    
    
    135
    
    
    
    140Intersegment revenue
    
    
    10
    
    
    
    13
    
    
    
    18
    
    
    
    16
    
    
    
    19Total revenue (b)
    
    
    489
    
    
    
    598
    
    
    
    583
    
    
    
    563
    
    
    
    564Provision for credit losses
    
    
    350
    
    
    
    132
    
    
    
    103
    
    
    
    2
    
    
    
    (1
    )Noninterest expense
    
    
    128
    
    
    
    141
    
    
    
    137
    
    
    
    139
    
    
    
    148Income taxes
    
    
    4
    
    
    
    119
    
    
    
    126
    
    
    
    152
    
    
    
    152Tax-equivalent adjustment
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    1
    
    
    
    -Segment earnings
    
    $
    7
    
    
    
    206
    
    
    
    217
    
    
    
    269
    
    
    
    265Economic profit (loss)
    
    $

    (20
    )
    
    
    45
    
    
    
    65
    
    
    
    81
    
    
    
    97Risk adjusted return on capital
    
    
    9.82
    %
    
    
    13.74
    
    
    
    15.34
    
    
    
    17.12
    
    
    
    19.20Economic capital, average
    
    $
    6,739
    
    
    
    6,627
    
    
    
    5,922
    
    
    
    5,266
    
    
    
    4,778Cash overhead efficiency ratio (b)
    
    
    26.21
    %
    
    
    23.61
    
    
    
    23.50
    
    
    
    24.62
    
    
    
    26.22Average loans, net
    
    $
    65,451
    
    
    
    64,035
    
    
    
    62,338
    
    
    
    58,533
    
    
    
    56,083Average core deposits
    
    $
    4,429
    
    
    
    4,534
    
    
    
    4,597
    
    
    
    5,087
    
    
    
    5,054
   (Continued)
 48




---



##### 



Table 5
BUSINESS SEGMENTS
 2008
    
    
    2007Second
    
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second(Dollars in millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterTREASURY AND INTERNATIONAL TRADE FINANCENet interest income (b)
    
    $
    122
    
    
    
    112
    
    
    
    110
    
    
    
    104
    
    
    
    100Fee and other income
    
    
    226
    
    
    
    218
    
    
    
    218
    
    
    
    220
    
    
    
    213Intersegment revenue
    
    
    (52
    )
    
    
    (47
    )
    
    
    (47
    )
    
    
    (46
    )
    
    
    (49
    )Total revenue (b)
    
    
    296
    
    
    
    283
    
    
    
    281
    
    
    
    278
    
    
    
    264Provision for credit losses
    
    
    -
    
    
    
    (2
    )
    
    
    -
    
    
    
    (1
    )
    
    
    -Noninterest expense
    
    
    169
    
    
    
    175
    
    
    
    174
    
    
    
    170
    
    
    
    172Income taxes
    
    
    46
    
    
    
    40
    
    
    
    38
    
    
    
    40
    
    
    
    33Tax-equivalent adjustment
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Segment earnings
    
    $
    81
    
    
    
    70
    
    
    
    69
    
    
    
    69
    
    
    
    59Economic profit
    
    $
    68
    
    
    
    56
    
    
    
    56
    
    
    
    58
    
    
    
    47Risk adjusted return on capital
    
    
    82.71
    %
    
    
    70.21
    
    
    
    74.12
    
    
    
    77.84
    
    
    
    68.15Economic capital, average
    
    $
    382
    
    
    
    383
    
    
    
    355
    
    
    
    342
    
    
    
    335Cash overhead efficiency ratio (b)
    
    
    57.09
    %
    
    
    61.70
    
    
    
    61.78
    
    
    
    60.98
    
    
    
    65.13Average loans, net
    
    $
    13,612
    
    
    
    13,461
    
    
    
    12,309
    
    
    
    10,813
    
    
    
    9,540Average core deposits
    
    $
    18,132
    
    
    
    19,633
    
    
    
    20,858
    
    
    
    21,253
    
    
    
    21,121INVESTMENT BANKINGNet interest income (b)
    
    $
    592
    
    
    
    485
    
    
    
    461
    
    
    
    323
    
    
    
    268Fee and other income
    
    
    362
    
    
    
    (530
    )
    
    
    (918
    )
    
    
    (180
    )
    
    
    1,169Intersegment revenue
    
    
    (10
    )
    
    
    (16
    )
    
    
    (21
    )
    
    
    (22
    )
    
    
    (20
    )Total revenue (b)
    
    
    944
    
    
    
    (61
    )
    
    
    (478
    )
    
    
    121
    
    
    
    1,417Provision for credit losses
    
    
    88
    
    
    
    67
    
    
    
    9
    
    
    
    -
    
    
    
    (1
    )Noninterest expense
    
    
    663
    
    
    
    431
    
    
    
    642
    
    
    
    317
    
    
    
    700Income taxes (benefits)
    
    
    53
    
    
    
    (226
    )
    
    
    (431
    )
    
    
    (78
    )
    
    
    252Tax-equivalent adjustment
    
    
    19
    
    
    
    21
    
    
    
    19
    
    
    
    8
    
    
    
    11Segment earnings (loss)
    
    $
    121
    
    
    
    (354
    )
    
    
    (717
    )
    
    
    (126
    )
    
    
    455Economic profit (loss)
    
    $

    (44
    )
    
    
    (513
    )
    
    
    (865
    )
    
    
    (253
    )
    
    
    346Risk adjusted return on capital
    
    
    8.34
    %
    
    
    (22.21
    )
    
    
    (57.88
    )
    
    
    (12.96
    )
    
    
    48.01Economic capital, average
    
    $
    6,695
    
    
    
    6,223
    
    
    
    4,986
    
    
    
    4,183
    
    
    
    3,737Cash overhead efficiency ratio (b)
    
    
    70.37
    %
    
    
    (708.47
    )
    
    
    (134.16
    )
    
    
    265.36
    
    
    
    49.41Average loans, net
    
    $
    27,579
    
    
    
    23,550
    
    
    
    17,018
    
    
    
    13,623
    
    
    
    11,121Average core deposits
    
    $
    9,121
    
    
    
    9,456
    
    
    
    10,759
    
    
    
    10,848
    
    
    
    10,538
 (Continued)
 49




---



##### 



Table 5
BUSINESS SEGMENTS
 2008
    
    
    2007Second
    
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second(Dollars in millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterCAPITAL MANAGEMENT COMBINED (a)Net interest income (b)
    
    $
    308
    
    
    
    281
    
    
    
    320
    
    
    
    268
    
    
    
    260Fee and other income
    
    
    1,995
    
    
    
    2,191
    
    
    
    2,210
    
    
    
    1,444
    
    
    
    1,536Intersegment revenue
    
    
    (8
    )
    
    
    (10
    )
    
    
    (11
    )
    
    
    (8
    )
    
    
    (11
    )Total revenue (b)
    
    
    2,295
    
    
    
    2,462
    
    
    
    2,519
    
    
    
    1,704
    
    
    
    1,785Provision for credit losses
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Noninterest expense
    
    
    2,327
    
    
    
    1,855
    
    
    
    1,936
    
    
    
    1,241
    
    
    
    1,294Income taxes
(benefits)
    
    
    (11
    )
    
    
    220
    
    
    
    213
    
    
    
    169
    
    
    
    179Tax-equivalent adjustment
    
    
    1
    
    
    
    1
    
    
    
    1
    
    
    
    -
    
    
    
    -Segment
earnings (loss)
    
    $
    (21
    )
    
    
    386
    
    
    
    369
    
    
    
    294
    
    
    
    312Economic
profit (loss)
    
    $
    (79
    )
    
    
    327
    
    
    
    310
    
    
    
    258
    
    
    
    275Risk adjusted return on capital
    
    
    (3.97
    )%
    
    
    72.26
    
    
    
    69.14
    
    
    
    88.96
    
    
    
    92.77Economic capital, average
    
    $
    2,105
    
    
    
    2,144
    
    
    
    2,119
    
    
    
    1,310
    
    
    
    1,348Cash overhead efficiency ratio (b)
    
    
    101.39
    %
    
    
    75.34
    
    
    
    76.90
    
    
    
    72.82
    
    
    
    72.47Lending commitments
    
    $
    1,544
    
    
    
    1,348
    
    
    
    1,281
    
    
    
    1,164
    
    
    
    1,169Average loans, net
    
    
    2,881
    
    
    
    2,562
    
    
    
    2,295
    
    
    
    2,142
    
    
    
    1,663Average core deposits
    
    $
    48,647
    
    
    
    43,084
    
    
    
    38,019
    
    
    
    31,489
    
    
    
    31,221FTE employees
    
    
    29,680
    
    
    
    29,841
    
    
    
    29,891
    
    
    
    17,908
    
    
    
    17,905Assets under management
    
    $
    245,940
    
    
    
    258,691
    
    
    
    274,736
    
    
    
    285,422
    
    
    
    281,462ASSET MANAGEMENTNet interest income (b)
    
    $
    12
    
    
    
    14
    
    
    
    7
    
    
    
    6
    
    
    
    5Fee and other income
    
    
    165
    
    
    
    295
    
    
    
    279
    
    
    
    244
    
    
    
    312Intersegment revenue
    
    
    (1
    )
    
    
    (1
    )
    
    
    -
    
    
    
    (1
    )
    
    
    -Total revenue (b)
    
    
    176
    
    
    
    308
    
    
    
    286
    
    
    
    249
    
    
    
    317Provision for credit losses
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Noninterest expense
    
    
    209
    
    
    
    224
    
    
    
    217
    
    
    
    206
    
    
    
    222Income taxes
    
    
    (13
    )
    
    
    31
    
    
    
    26
    
    
    
    15
    
    
    
    35Tax-equivalent adjustment
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Segment earnings (loss)
    
    $
    (20
    )
    
    
    53
    
    
    
    43
    
    
    
    28
    
    
    
    60Economic profit (loss)
    
    $

    (25
    )
    
    
    47
    
    
    
    37
    
    
    
    22
    
    
    
    55Risk adjusted return on capital
    
    
    (39.89
    )%
    
    
    99.16
    
    
    
    82.68
    
    
    
    56.73
    
    
    
    112.79Economic capital, average
    
    $
    203
    
    
    
    216
    
    
    
    205
    
    
    
    194
    
    
    
    215Cash overhead efficiency ratio (b)
    
    
    117.97
    %
    
    
    72.81
    
    
    
    76.33
    
    
    
    82.50
    
    
    
    70.01Average loans, net
    
    $
    17
    
    
    
    41
    
    
    
    22
    
    
    
    36
    
    
    
    17Average core deposits
    
    $
    304
    
    
    
    453
    
    
    
    405
    
    
    
    418
    
    
    
    364
   (Continued)
 50




---



##### 



Table 5
BUSINESS SEGMENTS
 2008
    
    
    2007Second
    
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second(Dollars in millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterRETAIL BROKERAGE SERVICESNet interest income (b)
    
    $
    296
    
    
    
    267
    
    
    
    313
    
    
    
    262
    
    
    
    254Fee and other income
    
    
    1,832
    
    
    
    1,898
    
    
    
    1,933
    
    
    
    1,202
    
    
    
    1,227Intersegment revenue
    
    
    (7
    )
    
    
    (9
    )
    
    
    (11
    )
    
    
    (7
    )
    
    
    (11
    )Total revenue (b)
    
    
    2,121
    
    
    
    2,156
    
    
    
    2,235
    
    
    
    1,457
    
    
    
    1,470Provision for credit losses
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Noninterest expense
    
    
    2,121
    
    
    
    1,634
    
    
    
    1,723
    
    
    
    1,038
    
    
    
    1,076Income taxes
    
    
    1
    
    
    
    189
    
    
    
    186
    
    
    
    154
    
    
    
    143Tax-equivalent adjustment
    
    
    1
    
    
    
    1
    
    
    
    1
    
    
    
    -
    
    
    
    -Segment
earnings (loss)
    
    $
    (2
    )
    
    
    332
    
    
    
    325
    
    
    
    265
    
    
    
    251Economic
profit (loss)
    
    $
    (55
    )
    
    
    279
    
    
    
    272
    
    
    
    235
    
    
    
    219Risk adjusted return on capital
    
    
    (.30
    )%
    
    
    69.06
    
    
    
    67.42
    
    
    
    94.13
    
    
    
    88.54Economic capital, average
    
    $
    1,902
    
    
    
    1,928
    
    
    
    1,914
    
    
    
    1,116
    
    
    
    1,133Cash overhead efficiency ratio (b)
    
    
    100.07
    %
    
    
    75.79
    
    
    
    77.08
    
    
    
    71.33
    
    
    
    73.18Average loans, net
    
    $
    2,864
    
    
    
    2,521
    
    
    
    2,273
    
    
    
    2,106
    
    
    
    1,646Average core deposits
    
    $
    48,343
    
    
    
    42,631
    
    
    
    37,614
    
    
    
    31,071
    
    
    
    30,857OTHERNet interest income (b)
    
    $
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    1Fee and other income
    
    
    (2
    )
    
    
    (2
    )
    
    
    (2
    )
    
    
    (2
    )
    
    
    (3
    )Intersegment revenue
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Total revenue (b)
    
    
    (2
    )
    
    
    (2
    )
    
    
    (2
    )
    
    
    (2
    )
    
    
    (2
    )Provision for credit losses
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Noninterest expense
    
    
    (3
    )
    
    
    (3
    )
    
    
    (4
    )
    
    
    (3
    )
    
    
    (4
    )Income taxes
    
    
    -
    
    
    
    -
    
    
    
    1
    
    
    
    -
    
    
    
    1Tax-equivalent adjustment
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Segment earnings
    
    $
    1
    
    
    
    1
    
    
    
    1
    
    
    
    1
    
    
    
    1Economic profit
    
    $
    1
    
    
    
    1
    
    
    
    1
    
    
    
    1
    
    
    
    1Risk adjusted return on capital
    
    
    -
    %
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Economic capital, average
    
    $
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Cash overhead efficiency ratio (b)
    
    
    -
    %
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Average loans, net
    
    $
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Average core deposits
    
    $
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
 (Continued)
 51




---



##### 



Table 5
BUSINESS SEGMENTS
 2008
    
    
    2007Second
    
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second(Dollars in millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterPARENTNet interest income (a)
    
    $
    (961
    )
    
    
    (131
    )
    
    
    (218
    )
    
    
    (173
    )
    
    
    (100
    )Fee and other income
    
    
    (694
    )
    
    
    (447
    )
    
    
    (58
    )
    
    
    193
    
    
    
    45Intersegment revenue
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    (3
    )
    
    
    2Total revenue (a)
    
    
    (1,655
    )
    
    
    (578
    )
    
    
    (276
    )
    
    
    17
    
    
    
    (53
    )Provision for credit losses
    
    
    4,202
    
    
    
    2,060
    
    
    
    1,058
    
    
    
    194
    
    
    
    25Noninterest expense
    
    
    883
    
    
    
    314
    
    
    
    423
    
    
    
    485
    
    
    
    378Minority interest
    
    
    26
    
    
    
    198
    
    
    
    118
    
    
    
    189
    
    
    
    139Income tax benefits
    
    
    (2,657
    )
    
    
    (1,040
    )
    
    
    (869
    )
    
    
    (511
    )
    
    
    (339
    )Tax-equivalent adjustment
    
    
    24
    
    
    
    20
    
    
    
    13
    
    
    
    13
    
    
    
    17Dividends on preferred stock
    
    
    193
    
    
    
    43
    
    
    
    -
    
    
    
    -
    
    
    
    -Segment loss
    
    $
    (4,326
    )
    
    
    (2,173
    )
    
    
    (1,019
    )
    
    
    (353
    )
    
    
    (273
    )Economic loss
    
    $
    (1,623
    )
    
    
    (840
    )
    
    
    (481
    )
    
    
    (318
    )
    
    
    (246
    )Risk adjusted return on capital
    
    
    (430.13
    )%
    
    
    (169.74
    )
    
    
    (83.78
    )
    
    
    (41.68
    )
    
    
    (29.52
    )Economic capital, average
    
    $
    1,480
    
    
    
    1,867
    
    
    
    2,014
    
    
    
    2,395
    
    
    
    2,436Cash overhead efficiency ratio (a)
    
    
    (47.55
    )%
    
    
    (36.54
    )
    
    
    (113.98
    )
    
    
    1,988.83
    
    
    
    (496.52
    )Lending commitments
    
    $
    543
    
    
    
    538
    
    
    
    599
    
    
    
    529
    
    
    
    569Average loans, net
    
    
    24,486
    
    
    
    28,407
    
    
    
    30,722
    
    
    
    28,487
    
    
    
    30,187Average core deposits
    
    $
    2,401
    
    
    
    2,729
    
    
    
    2,484
    
    
    
    3,032
    
    
    
    2,641FTE employees
    
    
    24,798
    
    
    
    24,714
    
    
    
    25,128
    
    
    
    24,020
    
    
    
    23,562
  (Continued)
 52




---



##### 



Table 5
BUSINESS SEGMENTS
 
 Three Months Ended June 30, 2008GoodwillImpairment,Corporate
    
    
    
    
    
    
    
    
    
    
    Net Merger-and
    
    
    
    
    
    
    
    
    
    
    Related andGeneral
    
    
    Wealth
    
    
    Investment
    
    
    Capital
    
    
    
    
    
    
    Restructuring(Dollars in millions)
    
    Bank
    
    
    Management
    
    
    Bank
    
    
    Management
    
    
    Parent
    
    
    Expenses (b)
    
    
    TotalCONSOLIDATEDNet interest income (a)
    
    $
    3,671
    
    
    
    202
    
    
    
    1,124
    
    
    
    308
    
    
    
    (961
    )
    
    
    (54
    )
    
    
    4,290Fee and other income
    
    
    1,000
    
    
    
    207
    
    
    
    657
    
    
    
    1,995
    
    
    
    (694
    )
    
    
    -
    
    
    
    3,165Intersegment revenue
    
    
    57
    
    
    
    3
    
    
    
    (52
    )
    
    
    (8
    )
    
    
    -
    
    
    
    -
    
    
    
    -Total revenue (a)
    
    
    4,728
    
    
    
    412
    
    
    
    1,729
    
    
    
    2,295
    
    
    
    (1,655
    )
    
    
    (54
    )
    
    
    7,455Provision for credit losses
    
    
    919
    
    
    
    8
    
    
    
    438
    
    
    
    -
    
    
    
    4,202
    
    
    
    -
    
    
    
    5,567Noninterest expense
    
    
    2,050
    
    
    
    253
    
    
    
    960
    
    
    
    2,327
    
    
    
    883
    
    
    
    6,311
    
    
    
    12,784Minority interest
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    26
    
    
    
    (44
    )
    
    
    (18
    )Income taxes (benefits)
    
    
    632
    
    
    
    53
    
    
    
    103
    
    
    
    (12
    )
    
    
    (2,657
    )
    
    
    (82
    )
    
    
    (1,963
    )Tax-equivalent adjustment
    
    
    10
    
    
    
    -
    
    
    
    19
    
    
    
    1
    
    
    
    24
    
    
    
    (54
    )
    
    
    -Net income (loss)
    
    
    1,117
    
    
    
    98
    
    
    
    209
    
    
    
    (21
    )
    
    
    (4,133
    )
    
    
    (6,185
    )
    
    
    (8,915
    )Dividends on preferred stock
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    193
    
    
    
    -
    
    
    
    193Net income (loss) available
to 
common stockholders
    
    $
    1,117
    
    
    
    98
    
    
    
    209
    
    
    
    (21
    )
    
    
    (4,326
    )
    
    
    (6,185
    )
    
    
    (9,108
    )Economic profit (loss)
    
    $
    919
    
    
    
    76
    
    
    
    4
    
    
    
    (79
    )
    
    
    (1,623
    )
    
    
    -
    
    
    
    (703
    )Risk adjusted return on capital
    
    
    33.02
    %
    
    
    52.61
    
    
    
    11.12
    
    
    
    (3.97
    )
    
    
    (430.14
    )
    
    
    -
    
    
    
    2.90Economic capital, average
    
    $
    16,786
    
    
    
    731
    
    
    
    13,816
    
    
    
    2,105
    
    
    
    1,480
    
    
    
    -
    
    
    
    34,918Cash overhead efficiency ratio (a)
    
    
    43.35
    %
    
    
    61.05
    
    
    
    55.60
    
    
    
    101.39
    
    
    
    (47.55
    )
    
    
    -
    
    
    
    84.92Lending commitments
    
    $
    133,201
    
    
    
    6,915
    
    
    
    113,559
    
    
    
    1,544
    
    
    
    543
    
    
    
    -
    
    
    
    255,762Average loans, net
    
    
    319,574
    
    
    
    23,151
    
    
    
    106,642
    
    
    
    2,881
    
    
    
    24,486
    
    
    
    -
    
    
    
    476,734Average core deposits
    
    $
    290,381
    
    
    
    17,559
    
    
    
    31,682
    
    
    
    48,647
    
    
    
    2,401
    
    
    
    -
    
    
    
    390,670FTE employees
    
    
    54,415
    
    
    
    4,665
    
    
    
    6,394
    
    
    
    29,680
    
    
    
    24,798
    
    
    
    -
    
    
    
    119,952
 Three Months Ended June 30, 2007Net Merger-Corporate
    
    
    
    
    
    
    
    
    
    
    Relatedand
    
    
    
    
    
    
    
    
    
    
    andGeneral
    
    
    Wealth
    
    
    Investment
    
    
    Capital
    
    
    
    
    
    
    Restructuring(Dollars in millions)
    
    Bank
    
    
    Management
    
    
    Bank
    
    
    Management
    
    
    Parent
    
    
    Expenses (b)
    
    
    TotalCONSOLIDATEDNet interest income (a)
    
    $
    3,372
    
    
    
    182
    
    
    
    773
    
    
    
    260
    
    
    
    (100
    )
    
    
    (38
    )
    
    
    4,449Fee and other income
    
    
    935
    
    
    
    202
    
    
    
    1,522
    
    
    
    1,536
    
    
    
    45
    
    
    
    -
    
    
    
    4,240Intersegment revenue
    
    
    56
    
    
    
    3
    
    
    
    (50
    )
    
    
    (11
    )
    
    
    2
    
    
    
    -
    
    
    
    -Total revenue (a)
    
    
    4,363
    
    
    
    387
    
    
    
    2,245
    
    
    
    1,785
    
    
    
    (53
    )
    
    
    (38
    )
    
    
    8,689Provision for credit losses
    
    
    154
    
    
    
    2
    
    
    
    (2
    )
    
    
    -
    
    
    
    25
    
    
    
    -
    
    
    
    179Noninterest expense
    
    
    1,922
    
    
    
    244
    
    
    
    1,020
    
    
    
    1,294
    
    
    
    378
    
    
    
    32
    
    
    
    4,890Minority interest
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    139
    
    
    
    -
    
    
    
    139Income taxes (benefits)
    
    
    824
    
    
    
    51
    
    
    
    437
    
    
    
    179
    
    
    
    (339
    )
    
    
    (12
    )
    
    
    1,140Tax-equivalent adjustment
    
    
    10
    
    
    
    -
    
    
    
    11
    
    
    
    -
    
    
    
    17
    
    
    
    (38
    )
    
    
    -Net income (loss)
    
    $
    1,453
    
    
    
    90
    
    
    
    779
    
    
    
    312
    
    
    
    (273
    )
    
    
    (20
    )
    
    
    2,341Economic profit (loss)
    
    $
    1,124
    
    
    
    70
    
    
    
    490
    
    
    
    275
    
    
    
    (246
    )
    
    
    -
    
    
    
    1,713Risk adjusted return on capital
    
    
    52.66
    %
    
    
    56.73
    
    
    
    33.22
    
    
    
    92.77
    
    
    
    (29.52
    )
    
    
    -
    
    
    
    39.55Economic capital, average
    
    $
    10,821
    
    
    
    612
    
    
    
    8,850
    
    
    
    1,348
    
    
    
    2,436
    
    
    
    -
    
    
    
    24,067Cash overhead efficiency ratio (a)
    
    
    44.05
    %
    
    
    62.80
    
    
    
    45.43
    
    
    
    72.47
    
    
    
    (496.52
    )
    
    
    -
    
    
    
    54.47Lending commitments
    
    $
    129,851
    
    
    
    6,892
    
    
    
    115,430
    
    
    
    1,169
    
    
    
    569
    
    
    
    -
    
    
    
    253,911Average loans, net
    
    
    291,607
    
    
    
    21,056
    
    
    
    76,744
    
    
    
    1,663
    
    
    
    30,187
    
    
    
    -
    
    
    
    421,257Average core deposits
    
    $
    290,455
    
    
    
    17,466
    
    
    
    36,713
    
    
    
    31,221
    
    
    
    2,641
    
    
    
    -
    
    
    
    378,496FTE employees
    
    
    57,574
    
    
    
    4,580
    
    
    
    6,872
    
    
    
    17,905
    
    
    
    23,562
    
    
    
    -
    
    
    
    110,493
   (Continued)
 53




---



##### 



Table 5
BUSINESS SEGMENTS
 
 Six Months EndedJune 30,(Dollars in millions)
    
    2008
    
    
    2007GENERAL BANK COMBINED (a)Net interest income (b)
    
    $
    7,116
    
    
    
    6,770Fee and other income
    
    
    1,980
    
    
    
    1,781Intersegment revenue
    
    
    112
    
    
    
    102Total revenue (b)
    
    
    9,208
    
    
    
    8,653Provision for credit losses
    
    
    1,488
    
    
    
    301Noninterest expense
    
    
    4,088
    
    
    
    3,787Income taxes
    
    
    1,305
    
    
    
    1,644Tax-equivalent adjustment
    
    
    21
    
    
    
    21Segment earnings
    
    $
    2,306
    
    
    
    2,900Economic profit
    
    $
    1,911
    
    
    
    2,250Risk adjusted return on capital
    
    
    37.07
    %
    
    
    53.24Economic capital, average
    
    $
    14,739
    
    
    
    10,744Cash overhead efficiency ratio (b)
    
    
    44.39
    %
    
    
    43.76Lending commitments
    
    $
    133,201
    
    
    
    129,851Average loans, net
    
    
    315,565
    
    
    
    289,985Average core deposits
    
    $
    293,776
    
    
    
    287,263FTE employees
    
    
    54,415
    
    
    
    57,574COMMERCIALNet interest income (b)
    
    $
    1,956
    
    
    
    1,702Fee and other income
    
    
    264
    
    
    
    219Intersegment revenue
    
    
    89
    
    
    
    78Total revenue (b)
    
    
    2,309
    
    
    
    1,999Provision for credit losses
    
    
    354
    
    
    
    193Noninterest expense
    
    
    794
    
    
    
    711Income taxes
    
    
    402
    
    
    
    379Tax-equivalent adjustment
    
    
    21
    
    
    
    21Segment earnings
    
    $
    738
    
    
    
    695Economic profit
    
    $
    437
    
    
    
    444Risk adjusted return on capital
    
    
    28.14
    %
    
    
    33.22Economic capital, average
    
    $
    5,130
    
    
    
    4,028Cash overhead efficiency ratio (b)
    
    
    34.37
    %
    
    
    35.59Average loans, net
    
    $
    86,574
    
    
    
    77,060Average core deposits
    
    $
    46,620
    
    
    
    43,367RETAIL AND SMALL BUSINESSNet interest income (b)
    
    $
    5,160
    
    
    
    5,068Fee and other income
    
    
    1,716
    
    
    
    1,562Intersegment revenue
    
    
    23
    
    
    
    24Total revenue (b)
    
    
    6,899
    
    
    
    6,654Provision for credit losses
    
    
    1,134
    
    
    
    108Noninterest expense
    
    
    3,294
    
    
    
    3,076Income taxes
    
    
    903
    
    
    
    1,265Tax-equivalent adjustment
    
    
    -
    
    
    
    -Segment earnings
    
    $
    1,568
    
    
    
    2,205Economic profit
    
    $
    1,474
    
    
    
    1,806Risk adjusted return on capital
    
    
    41.83
    %
    
    
    65.25Economic capital, average
    
    $
    9,609
    
    
    
    6,716Cash overhead efficiency ratio (b)
    
    
    47.75
    %
    
    
    46.21Average loans, net
    
    $
    228,991
    
    
    
    212,925Average core deposits
    
    $
    247,156
    
    
    
    243,896
   (Continued)
 54




---



##### 



Table 5
BUSINESS SEGMENTS
 
 Six Months EndedJune 30,(Dollars in millions)
    
    2008
    
    
    2007WEALTH MANAGEMENTNet interest income (a)
    
    $
    384
    
    
    
    362Fee and other income
    
    
    418
    
    
    
    398Intersegment revenue
    
    
    8
    
    
    
    6Total revenue (a)
    
    
    810
    
    
    
    766Provision for credit losses
    
    
    13
    
    
    
    3Noninterest expense
    
    
    499
    
    
    
    491Income taxes
    
    
    108
    
    
    
    99Tax-equivalent adjustment
    
    
    -
    
    
    
    -Segment earnings
    
    $
    190
    
    
    
    173Economic profit
    
    $
    146
    
    
    
    133Risk adjusted return on capital
    
    
    52.04
    %
    
    
    55.46Economic capital, average
    
    $
    715
    
    
    
    602Cash overhead efficiency ratio (a)
    
    
    61.50
    %
    
    
    64.00Lending commitments
    
    $
    6,915
    
    
    
    6,892Average loans, net
    
    
    22,758
    
    
    
    20,689Average core deposits
    
    $
    17,732
    
    
    
    17,368FTE employees
    
    
    4,665
    
    
    
    4,580
  (Continued)
 55




---



##### 



Table 5
BUSINESS SEGMENTS
 
 Six Months EndedJune 30,(Dollars in millions)
    
    2008
    
    
    2007CORPORATE
AND INVESTMENT BANK COMBINED (a)Net interest income (b)
    
    $
    2,152
    
    
    
    1,489Fee and other income
    
    
    499
    
    
    
    2,631Intersegment revenue
    
    
    (102
    )
    
    
    (93
    )Total revenue (b)
    
    
    2,549
    
    
    
    4,027Provision for credit losses
    
    
    635
    
    
    
    4Noninterest expense
    
    
    1,707
    
    
    
    1,931Income taxes
    
    
    36
    
    
    
    742Tax-equivalent adjustment
    
    
    40
    
    
    
    21Segment earnings
    
    $
    131
    
    
    
    1,329Economic profit (loss)
    
    $
    (408
    )
    
    
    776Risk adjusted return on capital
    
    
    4.93
    %
    
    
    29.22Economic capital, average
    
    $
    13,525
    
    
    
    8,590Cash overhead efficiency ratio (b)
    
    
    67.00
    %
    
    
    47.94Lending commitments
    
    $
    113,559
    
    
    
    115,430Average loans, net
    
    
    103,844
    
    
    
    75,065Average core deposits
    
    $
    32,652
    
    
    
    35,481FTE employees
    
    
    6,394
    
    
    
    6,872CORPORATE LENDINGNet interest income (b)
    
    $
    841
    
    
    
    804Fee and other income
    
    
    223
    
    
    
    265Intersegment revenue
    
    
    23
    
    
    
    37Total revenue (b)
    
    
    1,087
    
    
    
    1,106Provision for credit losses
    
    
    482
    
    
    
    4Noninterest expense
    
    
    269
    
    
    
    300Income taxes
    
    
    123
    
    
    
    293Tax-equivalent adjustment
    
    
    -
    
    
    
    -Segment earnings
    
    $
    213
    
    
    
    509Economic profit
    
    $
    25
    
    
    
    186Risk adjusted return on capital
    
    
    11.77
    %
    
    
    18.99Economic capital, average
    
    $
    6,683
    
    
    
    4,696Cash overhead efficiency ratio (b)
    
    
    24.78
    %
    
    
    27.15Average loans, net
    
    $
    64,743
    
    
    
    55,593Average core deposits
    
    $
    4,481
    
    
    
    5,061
   (Continued)
 56




---



##### 



Table 5
BUSINESS SEGMENTS
 
 Six Months EndedJune 30,(Dollars in millions)
    
    2008
    
    
    2007TREASURY AND INTERNATIONAL TRADE FINANCENet interest income (b)
    
    $
    234
    
    
    
    192Fee and other income
    
    
    444
    
    
    
    422Intersegment revenue
    
    
    (99
    )
    
    
    (94
    )Total revenue (b)
    
    
    579
    
    
    
    520Provision for credit losses
    
    
    (2
    )
    
    
    -Noninterest expense
    
    
    344
    
    
    
    345Income taxes
    
    
    86
    
    
    
    64Tax-equivalent adjustment
    
    
    -
    
    
    
    -Segment earnings
    
    $
    151
    
    
    
    111Economic profit
    
    $
    124
    
    
    
    89Risk adjusted return on capital
    
    
    76.45
    %
    
    
    64.86Economic capital, average
    
    $
    382
    
    
    
    334Cash overhead efficiency ratio (b)
    
    
    59.34
    %
    
    
    66.41Average loans, net
    
    $
    13,536
    
    
    
    8,908Average core deposits
    
    $
    18,883
    
    
    
    20,533INVESTMENT BANKINGNet interest income (b)
    
    $
    1,077
    
    
    
    493Fee and other income
    
    
    (168
    )
    
    
    1,944Intersegment revenue
    
    
    (26
    )
    
    
    (36
    )Total revenue (b)
    
    
    883
    
    
    
    2,401Provision for credit losses
    
    
    155
    
    
    
    -Noninterest expense
    
    
    1,094
    
    
    
    1,286Income taxes
    
    
    (173
    )
    
    
    385Tax-equivalent adjustment
    
    
    40
    
    
    
    21Segment earnings (loss)
    
    $
    (233
    )
    
    
    709Economic profit (loss)
    
    $
    (557
    )
    
    
    501Risk adjusted return on capital
    
    
    (6.38
    ) %
    
    
    39.35Economic capital, average
    
    $
    6,460
    
    
    
    3,560Cash overhead efficiency ratio (b)
    
    
    124.00
    %
    
    
    53.52Average loans, net
    
    $
    25,565
    
    
    
    10,564Average core deposits
    
    $
    9,288
    
    
    
    9,887
 (Continued)
 57




---



##### 



Table 5
BUSINESS SEGMENTS
 
 Six Months EndedJune 30,(Dollars in millions)
    
    2008
    
    
    2007CAPITAL MANAGEMENT COMBINED (a)Net interest income (b)
    
    $
    589
    
    
    
    519Fee and other income
    
    
    4,186
    
    
    
    3,013Intersegment revenue
    
    
    (18
    )
    
    
    (19
    )Total revenue (b)
    
    
    4,757
    
    
    
    3,513Provision for credit losses
    
    
    -
    
    
    
    -Noninterest expense
    
    
    4,182
    
    
    
    2,531Income taxes
    
    
    208
    
    
    
    358Tax-equivalent adjustment
    
    
    2
    
    
    
    -Segment earnings
    
    $
    365
    
    
    
    624Economic profit
    
    $
    248
    
    
    
    550Risk adjusted return on capital
    
    
    34.49
    %
    
    
    93.76Economic capital, average
    
    $
    2,124
    
    
    
    1,341Cash overhead efficiency ratio (b)
    
    
    87.91
    %
    
    
    72.04Lending commitments
    
    $
    1,544
    
    
    
    1,169Average loans, net
    
    
    2,722
    
    
    
    1,609Average core deposits
    
    $
    45,866
    
    
    
    31,450FTE employees
    
    
    29,680
    
    
    
    17,905Assets under management
    
    $
    245,940
    
    
    
    281,462ASSET MANAGEMENTNet interest income (b)
    
    $
    26
    
    
    
    8Fee and other income
    
    
    460
    
    
    
    584Intersegment revenue
    
    
    (2
    )
    
    
    -Total revenue (b)
    
    
    484
    
    
    
    592Provision for credit losses
    
    
    -
    
    
    
    -Noninterest expense
    
    
    433
    
    
    
    442Income taxes
    
    
    18
    
    
    
    55Tax-equivalent adjustment
    
    
    -
    
    
    
    -Segment earnings
    
    $
    33
    
    
    
    95Economic profit
    
    $
    22
    
    
    
    84Risk adjusted return on capital
    
    
    31.69
    %
    
    
    91.06Economic capital, average
    
    $
    210
    
    
    
    211Cash overhead efficiency ratio (b)
    
    
    89.27
    %
    
    
    74.67Average loans, net
    
    $
    29
    
    
    
    25Average core deposits
    
    $
    378
    
    
    
    321
   (Continued)
 58




---



##### 



Table 5
BUSINESS SEGMENTS
 
 Six Months EndedJune 30,(Dollars in millions)
    
    2008
    
    
    2007RETAIL BROKERAGE SERVICESNet interest income (b)
    
    $
    563
    
    
    
    510Fee and other income
    
    
    3,730
    
    
    
    2,434Intersegment revenue
    
    
    (16
    )
    
    
    (19
    )Total revenue (b)
    
    
    4,277
    
    
    
    2,925Provision for credit losses
    
    
    -
    
    
    
    -Noninterest expense
    
    
    3,755
    
    
    
    2,098Income taxes
    
    
    190
    
    
    
    301Tax-equivalent adjustment
    
    
    2
    
    
    
    -Segment earnings
    
    $
    330
    
    
    
    526Economic profit
    
    $
    224
    
    
    
    463Risk adjusted return on capital
    
    
    34.62
    %
    
    
    93.75Economic capital, average
    
    $
    1,914
    
    
    
    1,130Cash overhead efficiency ratio (b)
    
    
    87.83
    %
    
    
    71.70Average loans, net
    
    $
    2,693
    
    
    
    1,584Average core deposits
    
    $
    45,488
    
    
    
    31,129OTHERNet interest income (b)
    
    $
    -
    
    
    
    1Fee and other income
    
    
    (4
    )
    
    
    (5
    )Intersegment revenue
    
    
    -
    
    
    
    -Total revenue (b)
    
    
    (4
    )
    
    
    (4
    )Provision for credit losses
    
    
    -
    
    
    
    -Noninterest expense
    
    
    (6
    )
    
    
    (9
    )Income taxes
    
    
    -
    
    
    
    2Tax-equivalent adjustment
    
    
    -
    
    
    
    -Segment earnings
    
    $
    2
    
    
    
    3Economic profit
    
    $
    2
    
    
    
    3Risk adjusted return on capital
    
    
    -
    %
    
    
    -Economic capital, average
    
    $
    -
    
    
    
    -Cash overhead efficiency ratio (b)
    
    
    -
    %
    
    
    -Average loans, net
    
    $
    -
    
    
    
    -Average core deposits
    
    $
    -
    
    
    
    -
 (Continued)
 59




---



##### 



Table 5
BUSINESS SEGMENTS
 
 Six Months EndedJune 30,(Dollars in millions)
    
    2008
    
    
    2007PARENTNet interest income (a)
    
    $
    (1,092
    )
    
    
    (116
    )Fee and other income
    
    
    (1,141
    )
    
    
    151Intersegment revenue
    
    
    -
    
    
    
    4Total revenue (a)
    
    
    (2,233
    )
    
    
    39Provision for credit losses
    
    
    6,262
    
    
    
    48Noninterest expense
    
    
    1,197
    
    
    
    729Minority interest
    
    
    224
    
    
    
    275Income tax benefits
    
    
    (3,697
    )
    
    
    (689
    )Tax-equivalent adjustment
    
    
    44
    
    
    
    33Dividends on preferred stock
    
    
    236
    
    
    
    -Segment loss
    
    $
    (6,499
    )
    
    
    (357
    )Economic loss
    
    $
    (2,463
    )
    
    
    (310
    )Risk adjusted return on capital
    
    
    (284.89
    )%
    
    
    (13.56
    )Economic capital, average
    
    $
    1,674
    
    
    
    2,546Cash overhead efficiency ratio (a)
    
    
    (44.70
    )%
    
    
    1,390.16Lending commitments
    
    $
    543
    
    
    
    569Average loans, net
    
    
    26,446
    
    
    
    30,927Average core deposits
    
    $
    2,565
    
    
    
    2,346FTE employees
    
    
    24,798
    
    
    
    23,562
  (Continued)
 60




---



##### 



Table 5
BUSINESS SEGMENTS
 
 Six Months Ended June 30, 2008GoodwillImpairment,Corporate
    
    
    
    
    
    
    
    
    
    
    Net Merger-and
    
    
    
    
    
    
    
    
    
    
    Related andGeneral
    
    
    Wealth
    
    
    Investment
    
    
    Capital
    
    
    
    
    
    
    Restructuring(Dollars in millions)
    
    Bank
    
    
    Management
    
    
    Bank
    
    
    Management
    
    
    Parent
    
    
    Expenses (b)
    
    
    TotalCONSOLIDATEDNet interest income (a)
    
    $
    7,116
    
    
    
    384
    
    
    
    2,152
    
    
    
    589
    
    
    
    (1,092
    )
    
    
    (107
    )
    
    
    9,042Fee and other income
    
    
    1,980
    
    
    
    418
    
    
    
    499
    
    
    
    4,186
    
    
    
    (1,141
    )
    
    
    -
    
    
    
    5,942Intersegment revenue
    
    
    112
    
    
    
    8
    
    
    
    (102
    )
    
    
    (18
    )
    
    
    -
    
    
    
    -
    
    
    
    -Total revenue (a)
    
    
    9,208
    
    
    
    810
    
    
    
    2,549
    
    
    
    4,757
    
    
    
    (2,233
    )
    
    
    (107
    )
    
    
    14,984Provision for credit losses
    
    
    1,488
    
    
    
    13
    
    
    
    635
    
    
    
    -
    
    
    
    6,262
    
    
    
    -
    
    
    
    8,398Noninterest expense
    
    
    4,088
    
    
    
    499
    
    
    
    1,707
    
    
    
    4,182
    
    
    
    1,197
    
    
    
    6,552
    
    
    
    18,225Minority interest
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    224
    
    
    
    (87
    )
    
    
    137Income taxes (benefits)
    
    
    1,305
    
    
    
    108
    
    
    
    36
    
    
    
    208
    
    
    
    (3,697
    )
    
    
    (157
    )
    
    
    (2,197
    )Tax-equivalent adjustment
    
    
    21
    
    
    
    -
    
    
    
    40
    
    
    
    2
    
    
    
    44
    
    
    
    (107
    )
    
    
    -Net income (loss)
    
    
    2,306
    
    
    
    190
    
    
    
    131
    
    
    
    365
    
    
    
    (6,263
    )
    
    
    (6,308
    )
    
    
    (9,579
    )Dividends on preferred stock
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    236
    
    
    
    -
    
    
    
    236Net income (loss) available
to 
common stockholders
    
    $
    2,306
    
    
    
    190
    
    
    
    131
    
    
    
    365
    
    
    
    (6,499
    )
    
    
    (6,308
    )
    
    
    (9,815
    )Economic profit (loss)
    
    $
    1,911
    
    
    
    146
    
    
    
    (408
    )
    
    
    248
    
    
    
    (2,463
    )
    
    
    -
    
    
    
    (566
    )Risk adjusted return on capital
    
    
    37.07
    %
    
    
    52.04
    
    
    
    4.93
    
    
    
    34.49
    
    
    
    (284.89
    )
    
    
    -
    
    
    
    7.53Economic capital, average
    
    $
    14,739
    
    
    
    715
    
    
    
    13,525
    
    
    
    2,124
    
    
    
    1,674
    
    
    
    -
    
    
    
    32,777Cash overhead efficiency ratio (a)
    
    
    44.39
    %
    
    
    61.50
    
    
    
    67.00
    
    
    
    87.91
    
    
    
    (44.70
    )
    
    
    -
    
    
    
    76.03Lending commitments
    
    $
    133,201
    
    
    
    6,915
    
    
    
    113,559
    
    
    
    1,544
    
    
    
    543
    
    
    
    -
    
    
    
    255,762Average loans, net
    
    
    315,565
    
    
    
    22,758
    
    
    
    103,844
    
    
    
    2,722
    
    
    
    26,446
    
    
    
    -
    
    
    
    471,335Average core deposits
    
    $
    293,776
    
    
    
    17,732
    
    
    
    32,652
    
    
    
    45,866
    
    
    
    2,565
    
    
    
    -
    
    
    
    392,591FTE employees
    
    
    54,415
    
    
    
    4,665
    
    
    
    6,394
    
    
    
    29,680
    
    
    
    24,798
    
    
    
    -
    
    
    
    119,952
 Six Months Ended June 30, 2007Net Merger-Corporate
    
    
    
    
    
    
    
    
    
    
    Relatedand
    
    
    
    
    
    
    
    
    
    
    andGeneral
    
    
    Wealth
    
    
    Investment
    
    
    Capital
    
    
    
    
    
    
    Restructuring(Dollars in millions)
    
    Bank
    
    
    Management
    
    
    Bank
    
    
    Management
    
    
    Parent
    
    
    Expenses (b)
    
    
    TotalCONSOLIDATEDNet interest income (a)
    
    $
    6,770
    
    
    
    362
    
    
    
    1,489
    
    
    
    519
    
    
    
    (116
    )
    
    
    (75
    )
    
    
    8,949Fee and other income
    
    
    1,781
    
    
    
    398
    
    
    
    2,631
    
    
    
    3,013
    
    
    
    151
    
    
    
    -
    
    
    
    7,974Intersegment revenue
    
    
    102
    
    
    
    6
    
    
    
    (93
    )
    
    
    (19
    )
    
    
    4
    
    
    
    -
    
    
    
    -Total revenue (a)
    
    
    8,653
    
    
    
    766
    
    
    
    4,027
    
    
    
    3,513
    
    
    
    39
    
    
    
    (75
    )
    
    
    16,923Provision for credit losses
    
    
    301
    
    
    
    3
    
    
    
    4
    
    
    
    -
    
    
    
    48
    
    
    
    -
    
    
    
    356Noninterest expense
    
    
    3,787
    
    
    
    491
    
    
    
    1,931
    
    
    
    2,531
    
    
    
    729
    
    
    
    42
    
    
    
    9,511Minority interest
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    275
    
    
    
    -
    
    
    
    275Income taxes (benefits)
    
    
    1,644
    
    
    
    99
    
    
    
    742
    
    
    
    358
    
    
    
    (689
    )
    
    
    (16
    )
    
    
    2,138Tax-equivalent adjustment
    
    
    21
    
    
    
    -
    
    
    
    21
    
    
    
    -
    
    
    
    33
    
    
    
    (75
    )
    
    
    -Net income (loss)
    
    $
    2,900
    
    
    
    173
    
    
    
    1,329
    
    
    
    624
    
    
    
    (357
    )
    
    
    (26
    )
    
    
    4,643Economic profit (loss)
    
    $
    2,250
    
    
    
    133
    
    
    
    776
    
    
    
    550
    
    
    
    (310
    )
    
    
    -
    
    
    
    3,399Risk adjusted return on capital
    
    
    53.24
    %
    
    
    55.46
    
    
    
    29.22
    
    
    
    93.76
    
    
    
    (13.56
    )
    
    
    -
    
    
    
    39.77Economic capital, average
    
    $
    10,744
    
    
    
    602
    
    
    
    8,590
    
    
    
    1,341
    
    
    
    2,546
    
    
    
    -
    
    
    
    23,823Cash overhead efficiency ratio (a)
    
    
    43.76
    %
    
    
    64.00
    
    
    
    47.94
    
    
    
    72.04
    
    
    
    1,390.16
    
    
    
    -
    
    
    
    54.40Lending commitments
    
    $
    129,851
    
    
    
    6,892
    
    
    
    115,430
    
    
    
    1,169
    
    
    
    569
    
    
    
    -
    
    
    
    253,911Average loans, net
    
    
    289,985
    
    
    
    20,689
    
    
    
    75,065
    
    
    
    1,609
    
    
    
    30,927
    
    
    
    -
    
    
    
    418,275Average core deposits
    
    $
    287,263
    
    
    
    17,368
    
    
    
    35,481
    
    
    
    31,450
    
    
    
    2,346
    
    
    
    -
    
    
    
    373,908FTE employees
    
    
    57,574
    
    
    
    4,580
    
    
    
    6,872
    
    
    
    17,905
    
    
    
    23,562
    
    
    
    -
    
    
    
    110,493
   61




---



##### 



Table 6
NET TRADING REVENUE  INVESTMENT BANKING (a)
 
 2008
    
    
    2007Second
    
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second(In millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterNet interest income (Tax-equivalent)
    
    $
    122
    
    
    
    78
    
    
    
    51
    
    
    
    34
    
    
    
    43Trading account profits (losses)
    
    
    (365
    )
    
    
    (245
    )
    
    
    (562
    )
    
    
    (381
    )
    
    
    191Other fee income
    
    
    185
    
    
    
    188
    
    
    
    181
    
    
    
    140
    
    
    
    160Total net trading revenue (Tax-equivalent)
    
    $
    (58
    )
    
    
    21
    
    
    
    (330
    )
    
    
    (207
    )
    
    
    394
  62




---



##### 



Table 7
SELECTED RATIOS
 
 Six Months EndedJune 30,
    
    
    2008
    
    
    2007Second
    
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second2008
    
    
    2007
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterPERFORMANCE RATIOS (a)Assets to stockholders equity
    
    
    9.85
    X
    
    
    10.07
    
    
    
    9.74
    
    
    
    9.95
    
    
    
    10.32
    
    
    
    10.44
    
    
    
    10.17Return on assets
    
    
    (2.44
    )%
    
    
    1.34
    
    
    
    (4.50
    )
    
    
    (0.34
    )
    
    
    0.03
    
    
    
    0.88
    
    
    
    1.33Return on common stockholders equity
    
    
    (26.80
    )
    
    
    13.51
    
    
    
    (50.47
    )
    
    
    (3.81
    )
    
    
    0.28
    
    
    
    9.19
    
    
    
    13.54Return on total stockholders equity
    
    
    (24.00
    )%
    
    
    13.51
    
    
    
    (43.86
    )
    
    
    (3.39
    )
    
    
    0.28
    
    
    
    9.19
    
    
    
    13.54DIVIDEND PAYOUT RATIOSCommon shares
    
    
    (21.06
    )%
    
    
    46.28
    
    
    
    (8.70
    )
    
    
    (177.78
    )
    
    
    2,133.33
    
    
    
    75.29
    
    
    
    45.90
  63




---



##### 



Table 8
TRADING ACCOUNT ASSETS AND LIABILITIES
 
 2008
    
    
    2007Second
    
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second(In millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterTRADING ACCOUNT ASSETSU.S. Treasury
    
    $
    1,211
    
    
    
    1,422
    
    
    
    604
    
    
    
    993
    
    
    
    2,348U.S. Government agencies
    
    
    2,674
    
    
    
    3,045
    
    
    
    2,811
    
    
    
    3,104
    
    
    
    2,865State, county and municipal
    
    
    5,557
    
    
    
    5,195
    
    
    
    3,898
    
    
    
    3,844
    
    
    
    3,551Mortgage-backed securities
    
    
    7,031
    
    
    
    8,488
    
    
    
    2,208
    
    
    
    2,332
    
    
    
    1,807Other asset-backed securities
    
    
    6,154
    
    
    
    8,376
    
    
    
    11,427
    
    
    
    11,704
    
    
    
    12,474Corporate bonds and debentures
    
    
    5,406
    
    
    
    5,143
    
    
    
    5,340
    
    
    
    5,379
    
    
    
    5,386Equity securities
    
    
    2,831
    
    
    
    4,051
    
    
    
    4,411
    
    
    
    3,918
    
    
    
    2,973Derivative financial instruments (a)
    
    
    23,487
    
    
    
    28,379
    
    
    
    19,116
    
    
    
    13,194
    
    
    
    9,707Sundry
    
    
    8,238
    
    
    
    8,493
    
    
    
    6,067
    
    
    
    10,367
    
    
    
    10,429Total trading account assets
    
    $
    62,589
    
    
    
    72,592
    
    
    
    55,882
    
    
    
    54,835
    
    
    
    51,540TRADING ACCOUNT LIABILITIESSecurities sold short
    
    
    7,378
    
    
    
    7,706
    
    
    
    6,287
    
    
    
    7,014
    
    
    
    9,564Derivative financial instruments (a)
    
    
    18,927
    
    
    
    21,181
    
    
    
    15,298
    
    
    
    10,757
    
    
    
    9,755Total trading account liabilities
    
    $
    26,305
    
    
    
    28,887
    
    
    
    21,585
    
    
    
    17,771
    
    
    
    19,319
  64




---



##### 



Table 9
LOANS  ON-BALANCE SHEET, AND MANAGED AND SERVICING PORTFOLIOS
 
 2008
    
    
    2007Second
    
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second(In millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterON-BALANCE SHEET LOAN PORTFOLIO
COMMERCIALCommercial, financial and agricultural
    
    $
    122,628
    
    
    
    119,193
    
    
    
    112,509
    
    
    
    109,269
    
    
    
    102,397Real estate  construction and other
    
    
    18,629
    
    
    
    18,597
    
    
    
    18,543
    
    
    
    18,167
    
    
    
    17,449Real estate  mortgage
    
    
    27,191
    
    
    
    26,370
    
    
    
    23,846
    
    
    
    21,514
    
    
    
    20,448Lease financing
    
    
    24,605
    
    
    
    23,637
    
    
    
    23,913
    
    
    
    23,966
    
    
    
    24,083Foreign
    
    
    35,168
    
    
    
    33,616
    
    
    
    29,540
    
    
    
    26,471
    
    
    
    20,959Total commercial
    
    
    228,221
    
    
    
    221,413
    
    
    
    208,351
    
    
    
    199,387
    
    
    
    185,336CONSUMERReal estate secured (a)
    
    
    230,520
    
    
    
    230,197
    
    
    
    227,719
    
    
    
    225,355
    
    
    
    220,293Student loans
    
    
    9,945
    
    
    
    9,324
    
    
    
    8,149
    
    
    
    7,742
    
    
    
    6,757Installment loans
    
    
    29,261
    
    
    
    27,437
    
    
    
    25,635
    
    
    
    24,763
    
    
    
    25,017Total consumer
    
    
    269,726
    
    
    
    266,958
    
    
    
    261,503
    
    
    
    257,860
    
    
    
    252,067Total loans
    
    
    497,947
    
    
    
    488,371
    
    
    
    469,854
    
    
    
    457,247
    
    
    
    437,403Unearned income
    
    
    (9,749
    )
    
    
    (7,889
    )
    
    
    (7,900
    )
    
    
    (8,041
    )
    
    
    (8,283
    )Loans, net (On-balance sheet)
    
    $
    488,198
    
    
    
    480,482
    
    
    
    461,954
    
    
    
    449,206
    
    
    
    429,120MANAGED PORTFOLIO (b) (c)COMMERCIALOn-balance sheet loan portfolio
    
    $
    228,221
    
    
    
    221,413
    
    
    
    208,351
    
    
    
    199,387
    
    
    
    185,336Securitized loans  off-balance sheet
    
    
    105
    
    
    
    120
    
    
    
    131
    
    
    
    142
    
    
    
    170Loans held for sale
    
    
    2,224
    
    
    
    3,342
    
    
    
    9,414
    
    
    
    13,905
    
    
    
    11,573Total commercial
    
    
    230,550
    
    
    
    224,875
    
    
    
    217,896
    
    
    
    213,434
    
    
    
    197,079CONSUMERReal estate securedOn-balance sheet loan portfolio
    
    
    230,520
    
    
    
    230,197
    
    
    
    227,719
    
    
    
    225,355
    
    
    
    220,293Securitized loans  off-balance sheet
    
    
    6,337
    
    
    
    6,845
    
    
    
    7,230
    
    
    
    7,625
    
    
    
    8,112Securitized loans included in securities
    
    
    14,918
    
    
    
    11,683
    
    
    
    10,755
    
    
    
    5,963
    
    
    
    6,091Loans held for sale
    
    
    3,415
    
    
    
    5,960
    
    
    
    4,816
    
    
    
    3,583
    
    
    
    4,079Total real estate secured
    
    
    255,190
    
    
    
    254,685
    
    
    
    250,520
    
    
    
    242,526
    
    
    
    238,575StudentOn-balance sheet loan portfolio
    
    
    9,945
    
    
    
    9,324
    
    
    
    8,149
    
    
    
    7,742
    
    
    
    6,757Securitized loans  off-balance sheet
    
    
    2,721
    
    
    
    2,772
    
    
    
    2,811
    
    
    
    2,856
    
    
    
    2,905Securitized loans included in securities
    
    
    52
    
    
    
    52
    
    
    
    52
    
    
    
    52
    
    
    
    52Loans held for sale
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    1,968
    
    
    
    2,046Total student
    
    
    12,718
    
    
    
    12,148
    
    
    
    11,012
    
    
    
    12,618
    
    
    
    11,760InstallmentOn-balance sheet loan portfolio
    
    
    29,261
    
    
    
    27,437
    
    
    
    25,635
    
    
    
    24,763
    
    
    
    25,017Securitized loans  off-balance sheet
    
    
    1,630
    
    
    
    1,968
    
    
    
    2,263
    
    
    
    2,572
    
    
    
    3,105Securitized loans included in securities
    
    
    28
    
    
    
    39
    
    
    
    47
    
    
    
    55
    
    
    
    116Loans held for sale
    
    
    2,791
    
    
    
    2,127
    
    
    
    2,542
    
    
    
    1,975
    
    
    
    35Total installment
    
    
    33,710
    
    
    
    31,571
    
    
    
    30,487
    
    
    
    29,365
    
    
    
    28,273Total consumer
    
    
    301,618
    
    
    
    298,404
    
    
    
    292,019
    
    
    
    284,509
    
    
    
    278,608Total managed portfolio
    
    $
    532,168
    
    
    
    523,279
    
    
    
    509,915
    
    
    
    497,943
    
    
    
    475,687SERVICING PORTFOLIO (c) (d)Commercial
    
    $
    351,277
    
    
    
    354,624
    
    
    
    353,464
    
    
    
    337,721
    
    
    
    298,374Consumer
    
    $
    29,100
    
    
    
    27,415
    
    
    
    27,523
    
    
    
    28,015
    
    
    
    26,341
     65




---



##### 



Table 10
LOANS HELD FOR SALE
 
 2008
    
    
    2007Second
    
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second(In millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterCORE BUSINESS ACTIVITY (a)Core business activity, beginning of period
    
    $
    8,406
    
    
    
    15,094
    
    
    
    17,646
    
    
    
    15,696
    
    
    
    15,030Originations and/or purchases
    
    
    8,069
    
    
    
    8,144
    
    
    
    8,160
    
    
    
    13,007
    
    
    
    22,671Transfer to (from) loans held for sale, net
    
    
    373
    
    
    
    (6,801
    )
    
    
    (1,278
    )
    
    
    2,162
    
    
    
    (71
    )Allowance for loan losses related to loans
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    (57
    )
    
    
    -Lower of cost or market value adjustments (b)
    
    
    (87
    )
    
    
    (364
    )
    
    
    (223
    )
    
    
    (249
    )
    
    
    (91
    )Market value adjustments for fair value option loans
    
    
    (47
    )
    
    
    42
    
    
    
    -
    
    
    
    -
    
    
    
    -Performing loans sold or securitized
    
    
    (8,796
    )
    
    
    (7,355
    )
    
    
    (8,992
    )
    
    
    (11,606
    )
    
    
    (20,910
    )Other, principally payments
    
    
    (94
    )
    
    
    (354
    )
    
    
    (219
    )
    
    
    (1,307
    )
    
    
    (933
    )Core business activity, end of period
    
    
    7,824
    
    
    
    8,406
    
    
    
    15,094
    
    
    
    17,646
    
    
    
    15,696PORTFOLIO MANAGEMENT ACTIVITY (a)Portfolio business activity, beginning of period
    
    
    3,023
    
    
    
    1,678
    
    
    
    3,785
    
    
    
    2,037
    
    
    
    2Originations and/or purchases
    
    
    -
    
    
    
    83
    
    
    
    -
    
    
    
    -
    
    
    
    -Transfer to (from) loans held for sale, net 
Performing loans (c)
    
    
    (19
    )
    
    
    2,317
    
    
    
    137
    
    
    
    1,831
    
    
    
    2,046Lower of cost or market value adjustments (b)
    
    
    26
    
    
    
    (31
    )
    
    
    (30
    )
    
    
    (6
    )
    
    
    (10
    )Performing loans sold or securitized
    
    
    (2,373
    )
    
    
    (990
    )
    
    
    (2,078
    )
    
    
    -
    
    
    
    -Other, principally payments
    
    
    (51
    )
    
    
    (34
    )
    
    
    (136
    )
    
    
    (77
    )
    
    
    (1
    )Portfolio management activity, end of period
    
    
    606
    
    
    
    3,023
    
    
    
    1,678
    
    
    
    3,785
    
    
    
    2,037Total loans held for sale (d)
    
    $
    8,430
    
    
    
    11,429
    
    
    
    16,772
    
    
    
    21,431
    
    
    
    17,733
     66




---



##### 



Table 11
 
 ALLOWANCE FOR CREDIT LOSSES
 
 2008
    
    
    2007Second
    
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second(In millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterALLOWANCE FOR CREDIT LOSSES (a)Balance, beginning of period
    
    $
    6,767
    
    
    
    4,717
    
    
    
    3,691
    
    
    
    3,552
    
    
    
    3,533Provision for credit losses
    
    
    5,504
    
    
    
    2,834
    
    
    
    1,467
    
    
    
    381
    
    
    
    168Provision for credit losses relating to loans
transferred to loans 
held for sale or sold
    
    
    51
    
    
    
    7
    
    
    
    6
    
    
    
    3
    
    
    
    4Provision for credit losses for unfunded
lending commitments
    
    
    12
    
    
    
    (10
    )
    
    
    24
    
    
    
    24
    
    
    
    7LOAN LOSSESCommercial, financial and agricultural
    
    
    (254
    )
    
    
    (171
    )
    
    
    (67
    )
    
    
    (41
    )
    
    
    (39
    )Commercial real estate  construction and mortgage
    
    
    (216
    )
    
    
    (81
    )
    
    
    (117
    )
    
    
    (5
    )
    
    
    (4
    )Total commercial
    
    
    (470
    )
    
    
    (252
    )
    
    
    (184
    )
    
    
    (46
    )
    
    
    (43
    )Real estate secured
    
    
    (700
    )
    
    
    (351
    )
    
    
    (156
    )
    
    
    (59
    )
    
    
    (40
    )Student loans
    
    
    (3
    )
    
    
    (3
    )
    
    
    (4
    )
    
    
    (5
    )
    
    
    (2
    )Installment and other loans (b)
    
    
    (230
    )
    
    
    (242
    )
    
    
    (225
    )
    
    
    (168
    )
    
    
    (138
    )Total consumer
    
    
    (933
    )
    
    
    (596
    )
    
    
    (385
    )
    
    
    (232
    )
    
    
    (180
    )Total loan losses
    
    
    (1,403
    )
    
    
    (848
    )
    
    
    (569
    )
    
    
    (278
    )
    
    
    (223
    )LOAN RECOVERIESCommercial, financial and agricultural
    
    
    15
    
    
    
    14
    
    
    
    22
    
    
    
    9
    
    
    
    15Commercial real estate  construction and mortgage
    
    
    -
    
    
    
    1
    
    
    
    -
    
    
    
    3
    
    
    
    -Total commercial
    
    
    15
    
    
    
    15
    
    
    
    22
    
    
    
    12
    
    
    
    15Real estate secured
    
    
    18
    
    
    
    10
    
    
    
    9
    
    
    
    12
    
    
    
    11Student loans
    
    
    1
    
    
    
    1
    
    
    
    2
    
    
    
    3
    
    
    
    -Installment and other loans (b)
    
    
    60
    
    
    
    57
    
    
    
    75
    
    
    
    45
    
    
    
    47Total consumer
    
    
    79
    
    
    
    68
    
    
    
    86
    
    
    
    60
    
    
    
    58Total loan recoveries
    
    
    94
    
    
    
    83
    
    
    
    108
    
    
    
    72
    
    
    
    73Net charge-offs
    
    
    (1,309
    )
    
    
    (765
    )
    
    
    (461
    )
    
    
    (206
    )
    
    
    (150
    )Allowance relating to loans acquired, transferred
to loans held for 
sale or sold
    
    
    (69
    )
    
    
    (16
    )
    
    
    (10
    )
    
    
    (63
    )
    
    
    (10
    )Balance, end of period
    
    $
    10,956
    
    
    
    6,767
    
    
    
    4,717
    
    
    
    3,691
    
    
    
    3,552CONSUMER REAL ESTATE SECURED NET CHARGE-OFFSFirst lien
    
    $
    (592
    )
    
    
    (291
    )
    
    
    (122
    )
    
    
    (32
    )
    
    
    (17
    )Second lien
    
    
    (90
    )
    
    
    (50
    )
    
    
    (25
    )
    
    
    (15
    )
    
    
    (12
    )Total consumer real estate secured net charge-offs
    
    $
    (682
    )
    
    
    (341
    )
    
    
    (147
    )
    
    
    (47
    )
    
    
    (29
    )ALLOWANCE FOR CREDIT LOSSESAllocation of the allowance for loan lossesCommercial
    
    $
    2,793
    
    
    
    2,645
    
    
    
    2,392
    
    
    
    2,054
    
    
    
    1,889Consumer
    
    
    7,621
    
    
    
    3,592
    
    
    
    1,950
    
    
    
    1,246
    
    
    
    1,371Unallocated
    
    
    330
    
    
    
    330
    
    
    
    165
    
    
    
    205
    
    
    
    130Total allowance for loan losses
    
    
    10,744
    
    
    
    6,567
    
    
    
    4,507
    
    
    
    3,505
    
    
    
    3,390Reserve for unfunded lending commitments
    
    
    212
    
    
    
    200
    
    
    
    210
    
    
    
    186
    
    
    
    162Total allowance for credit losses
    
    $
    10,956
    
    
    
    6,767
    
    
    
    4,717
    
    
    
    3,691
    
    
    
    3,552
   67




---



##### 



Table 12
 ALLOWANCE AND CHARGE-OFF RATIOS
 
 2008
    
    
    
    
    
    
    
    
    
    
    2007Second
    
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second(In millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterALLOWANCE FOR LOAN LOSSESas % of loans, net
    
    
    2.20
    %
    
    
    1.37
    
    
    
    0.98
    
    
    
    0.78
    
    
    
    0.79as % of nonaccrual and restructured loans (a)
    
    
    95
    
    
    
    84
    
    
    
    90
    
    
    
    129
    
    
    
    174as % of nonperforming assets (a)
    
    
    90
    
    
    
    78
    
    
    
    84
    
    
    
    115
    
    
    
    157ALLOWANCE FOR CREDIT LOSSESas % of loans, net
    
    
    2.24
    %
    
    
    1.41
    
    
    
    1.02
    
    
    
    0.82
    
    
    
    0.83NET CHARGE-OFFS AS % OF AVERAGE LOANS, NET (b)Commercial, financial and agricultural
    
    
    0.60
    %
    
    
    0.41
    
    
    
    0.12
    
    
    
    0.10
    
    
    
    0.07Commercial real estate  construction and mortgage
    
    
    1.89
    
    
    
    0.73
    
    
    
    1.12
    
    
    
    0.02
    
    
    
    0.04Total commercial
    
    
    0.88
    
    
    
    0.48
    
    
    
    0.34
    
    
    
    0.08
    
    
    
    0.07Real estate secured
    
    
    1.18
    
    
    
    0.59
    
    
    
    0.26
    
    
    
    0.08
    
    
    
    0.05Student loans
    
    
    0.07
    
    
    
    0.08
    
    
    
    0.10
    
    
    
    0.14
    
    
    
    0.07Installment and other loans (c)
    
    
    2.36
    
    
    
    2.76
    
    
    
    2.35
    
    
    
    1.99
    
    
    
    1.47Total consumer
    
    
    1.26
    
    
    
    0.79
    
    
    
    0.46
    
    
    
    0.27
    
    
    
    0.19Total as % of average loans, net
    
    
    1.10
    %
    
    
    0.66
    
    
    
    0.41
    
    
    
    0.19
    
    
    
    0.14
    68




---



##### 



Table 13
 
 NONPERFORMING ASSETS
 
 2008
    
    
    2007Second
    
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second(In millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterNONPERFORMING ASSETSNonaccrual loansCommercialCommercial, financial and agricultural
    
    $
    1,229
    
    
    
    908
    
    
    
    602
    
    
    
    354
    
    
    
    318Commercial real estate  construction and mortgage
    
    
    2,203
    
    
    
    1,750
    
    
    
    1,059
    
    
    
    289
    
    
    
    161Total commercial
    
    
    3,432
    
    
    
    2,658
    
    
    
    1,661
    
    
    
    643
    
    
    
    479ConsumerReal estate securedFirst lien
    
    
    7,430
    
    
    
    5,015
    
    
    
    3,234
    
    
    
    1,986
    
    
    
    1,380Second lien
    
    
    147
    
    
    
    75
    
    
    
    58
    
    
    
    41
    
    
    
    44Installment and other loans (a)
    
    
    40
    
    
    
    40
    
    
    
    42
    
    
    
    45
    
    
    
    42Total consumer
    
    
    7,617
    
    
    
    5,130
    
    
    
    3,334
    
    
    
    2,072
    
    
    
    1,466Total nonaccrual loans
    
    
    11,049
    
    
    
    7,788
    
    
    
    4,995
    
    
    
    2,715
    
    
    
    1,945Troubled debt restructurings (b)
    
    
    248
    
    
    
    48
    
    
    
    -
    
    
    
    -
    
    
    
    -Foreclosed properties
    
    
    631
    
    
    
    530
    
    
    
    389
    
    
    
    334
    
    
    
    207Total nonperforming assets
    
    $
    11,928
    
    
    
    8,366
    
    
    
    5,384
    
    
    
    3,049
    
    
    
    2,152as % of loans, net, and foreclosed properties (c)
    
    
    2.44
    %
    
    
    1.74
    
    
    
    1.16
    
    
    
    0.68
    
    
    
    0.50Nonperforming assets included in loans held for saleCommercial
    
    $
    56
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Consumer
    
    
    7
    
    
    
    5
    
    
    
    62
    
    
    
    50
    
    
    
    37Total nonaccrual loans
    
    
    63
    
    
    
    5
    
    
    
    62
    
    
    
    50
    
    
    
    37Foreclosed properties
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    9
    
    
    
    5Total nonperforming assets included in loans held for sale
    
    
    63
    
    
    
    5
    
    
    
    62
    
    
    
    59
    
    
    
    42Nonperforming assets included in loans and
in loans held for sale
    
    $
    11,991
    
    
    
    8,371
    
    
    
    5,446
    
    
    
    3,108
    
    
    
    2,194as % of loans, net, foreclosed properties and loans
held for sale (d)
    
    
    2.41
    %
    
    
    1.70
    
    
    
    1.14
    
    
    
    0.66
    
    
    
    0.49PAST DUE LOANS 90 DAYS AND OVER,
AND NONACCRUAL LOANS (c)Accruing loans past due 90 days and over
    
    $
    1,181
    
    
    
    866
    
    
    
    708
    
    
    
    590
    
    
    
    562Nonaccrual loans
    
    
    11,049
    
    
    
    7,788
    
    
    
    4,995
    
    
    
    2,715
    
    
    
    1,945Total past due loans 90 days and over, and
nonaccrual loans
    
    $
    12,230
    
    
    
    8,654
    
    
    
    5,703
    
    
    
    3,305
    
    
    
    2,507Commercial as % of loans, net
    
    
    1.73
    %
    
    
    1.31
    
    
    
    0.89
    
    
    
    0.38
    
    
    
    0.31Consumer as % of loans, net
    
    
    3.12
    %
    
    
    2.19
    
    
    
    1.49
    
    
    
    1.00
    
    
    
    0.78
     69




---



##### 



Table 14
 
 NONACCRUAL LOAN ACTIVITY (a)
 
 2008
    
    
    2007Second
    
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second(In millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterBalance, beginning of period
    
    $
    7,788
    
    
    
    4,995
    
    
    
    2,715
    
    
    
    1,945
    
    
    
    1,632COMMERCIAL NONACCRUAL LOAN ACTIVITYCommercial nonaccrual loans, beginning of period
    
    
    2,658
    
    
    
    1,661
    
    
    
    643
    
    
    
    479
    
    
    
    420New nonaccrual loans and advances
    
    
    1,651
    
    
    
    1,421
    
    
    
    1,303
    
    
    
    298
    
    
    
    205Gross charge-offs
    
    
    (470
    )
    
    
    (252
    )
    
    
    (184
    )
    
    
    (46
    )
    
    
    (43
    )Transfers to loans held for sale
    
    
    (88
    )
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Transfers to other real estate owned
    
    
    (7
    )
    
    
    (26
    )
    
    
    -
    
    
    
    (5
    )
    
    
    (2
    )Sales
    
    
    (68
    )
    
    
    (33
    )
    
    
    (26
    )
    
    
    (14
    )
    
    
    (15
    )Other, principally payments
    
    
    (244
    )
    
    
    (113
    )
    
    
    (75
    )
    
    
    (69
    )
    
    
    (86
    )Net commercial nonaccrual loan activity
    
    
    774
    
    
    
    997
    
    
    
    1,018
    
    
    
    164
    
    
    
    59Commercial nonaccrual loans, end of period
    
    
    3,432
    
    
    
    2,658
    
    
    
    1,661
    
    
    
    643
    
    
    
    479CONSUMER NONACCRUAL LOAN ACTIVITYConsumer nonaccrual loans, beginning of period
    
    
    5,130
    
    
    
    3,334
    
    
    
    2,072
    
    
    
    1,466
    
    
    
    1,212New nonaccrual loans, advances and other, net
    
    
    2,487
    
    
    
    1,696
    
    
    
    1,262
    
    
    
    606
    
    
    
    257Transfers from loans held for sale
    
    
    -
    
    
    
    100
    
    
    
    -
    
    
    
    -
    
    
    
    -Sales and securitizations
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    (3
    )Net consumer nonaccrual loan activity
    
    
    2,487
    
    
    
    1,796
    
    
    
    1,262
    
    
    
    606
    
    
    
    254Consumer nonaccrual loans, end of period
    
    
    7,617
    
    
    
    5,130
    
    
    
    3,334
    
    
    
    2,072
    
    
    
    1,466Balance, end of period
    
    $
    11,049
    
    
    
    7,788
    
    
    
    4,995
    
    
    
    2,715
    
    
    
    1,945
  70




---



##### 



Table 15
 
 GOODWILL AND OTHER INTANGIBLE ASSETS
 
 2008
    
    
    2007Second
    
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second(In millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterGoodwill (a)
    
    $
    36,993
    
    
    
    43,068
    
    
    
    43,122
    
    
    
    38,848
    
    
    
    38,766Deposit base
    
    
    531
    
    
    
    573
    
    
    
    619
    
    
    
    670
    
    
    
    727Customer relationships
    
    
    1,321
    
    
    
    1,375
    
    
    
    1,410
    
    
    
    620
    
    
    
    651Tradename
    
    
    90
    
    
    
    90
    
    
    
    90
    
    
    
    90
    
    
    
    90Total goodwill and other intangible assets
    
    $
    38,935
    
    
    
    45,106
    
    
    
    45,241
    
    
    
    40,228
    
    
    
    40,234
 Six Months Ended June 30, 2008Employee
    
    
    OccupancyTermination
    
    
    and(In millions)
    
    Benefits
    
    
    Equipment
    
    
    Other
    
    
    TotalEXIT COST PURCHASE ACCOUNTING ACCRUAL ACTIVITY
Wachovia/A.G. Edwards  October 1, 2007Balance, December 31, 2007
    
    $
    16
    
    
    
    -
    
    
    
    -
    
    
    
    16Purchase accounting adjustments
    
    
    36
    
    
    
    -
    
    
    
    -
    
    
    
    36Cash payments
    
    
    (14
    )
    
    
    -
    
    
    
    -
    
    
    
    (14
    )Balance, June 30, 2008
    
    $
    38
    
    
    
    -
    
    
    
    -
    
    
    
    38EXIT COST PURCHASE ACCOUNTING ACCRUAL ACTIVITY
Wachovia/Golden West  October 1, 2006Balance, December 31, 2007
    
    $
    49
    
    
    
    9
    
    
    
    -
    
    
    
    58Purchase accounting adjustments
    
    
    (6
    )
    
    
    -
    
    
    
    -
    
    
    
    (6
    )Cash payments
    
    
    (28
    )
    
    
    (16
    )
    
    
    -
    
    
    
    (44
    )Balance, June 30, 2008
    
    $
    15
    
    
    
    (7
    )
    
    
    -
    
    
    
    8EXIT COST PURCHASE ACCOUNTING ACCRUAL ACTIVITY
Wachovia/SouthTrust  November 1, 2004Balance, December 31, 2007
    
    $
    37
    
    
    
    -
    
    
    
    -
    
    
    
    37Purchase accounting adjustments
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Cash payments
    
    
    (11
    )
    
    
    -
    
    
    
    -
    
    
    
    (11
    )Balance, June 30, 2008
    
    $
    26
    
    
    
    -
    
    
    
    -
    
    
    
    26
  71




---



##### 



Table 16
 
 DEPOSITS
 
 2008
    
    
    2007Second
    
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second(In millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterCORE DEPOSITSNoninterest-bearing
    
    $
    63,393
    
    
    
    60,951
    
    
    
    60,893
    
    
    
    56,825
    
    
    
    62,112Savings and NOW accounts
    
    
    83,915
    
    
    
    87,920
    
    
    
    88,078
    
    
    
    81,037
    
    
    
    82,629Money market accounts
    
    
    139,215
    
    
    
    128,839
    
    
    
    124,651
    
    
    
    114,457
    
    
    
    111,666Other consumer time
    
    
    113,864
    
    
    
    120,852
    
    
    
    123,783
    
    
    
    125,546
    
    
    
    121,781Total core deposits
    
    
    400,387
    
    
    
    398,562
    
    
    
    397,405
    
    
    
    377,865
    
    
    
    378,188OTHER DEPOSITSForeign
    
    
    27,940
    
    
    
    27,399
    
    
    
    27,386
    
    
    
    27,226
    
    
    
    23,324Other time
    
    
    19,463
    
    
    
    19,003
    
    
    
    24,338
    
    
    
    16,846
    
    
    
    8,518Total deposits
    
    $
    447,790
    
    
    
    444,964
    
    
    
    449,129
    
    
    
    421,937
    
    
    
    410,030
 Table 17
 
 TIME DEPOSITS IN AMOUNTS OF $100,000 OR MORE
 
 (In millions)
    

June
30,2008MATURITY OF3 months or less
    
    $
    23,585Over 3 months through 6 months
    
    
    9,024Over 6 months through 12 months
    
    
    16,285Over 12 months
    
    
    11,888Total time deposits in amounts of $100,000 or more
    
    $
    60,782
 72




---



##### 



Table 18
 LONG-TERM DEBT
 
 2008
    
    
    2007Second
    
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second(In millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterNOTES AND
DEBENTURES ISSUED BY THE PARENT COMPANYNotesFloating rate, 2.483% to 4.69%, due 2008 to 2017
    
    $
    16,163
    
    
    
    15,513
    
    
    
    15,514
    
    
    
    15,401
    
    
    
    13,651Equity-linked and commodity-linked, due 2008 to 2012
    
    
    612
    
    
    
    814
    
    
    
    792
    
    
    
    1,047
    
    
    
    1,0553.50% to 5.80%, due 2008 to 2020
    
    
    14,560
    
    
    
    11,508
    
    
    
    9,011
    
    
    
    8,551
    
    
    
    8,193Floating rate, EMTN notes, due 2011 to 2014
    
    
    3,932
    
    
    
    3,955
    
    
    
    3,649
    
    
    
    3,549
    
    
    
    3,370Floating rate, Australian notes, due 2012
    
    
    864
    
    
    
    822
    
    
    
    789
    
    
    
    799
    
    
    
    7646.75%, Australian notes, due 2012
    
    
    144
    
    
    
    137
    
    
    
    131
    
    
    
    133
    
    
    
    1274.375%, EMTN notes, due 2016
    
    
    1,174
    
    
    
    1,181
    
    
    
    1,090
    
    
    
    1,060
    
    
    
    1,006Subordinated notes4.875% to 6.375%, due 2008 to 2035
    
    
    6,159
    
    
    
    6,491
    
    
    
    6,454
    
    
    
    6,452
    
    
    
    6,449Floating rate, due 2015 to 2016
    
    
    1,250
    
    
    
    1,250
    
    
    
    1,250
    
    
    
    1,250
    
    
    
    1,2504.375% to 4.875%, EMTN notes, due 2018 to 2035
    
    
    2,156
    
    
    
    2,158
    
    
    
    2,099
    
    
    
    2,112
    
    
    
    2,0556.605%, due 2025
    
    
    250
    
    
    
    250
    
    
    
    250
    
    
    
    250
    
    
    
    2506.30%
    
    
    -
    
    
    
    200
    
    
    
    200
    
    
    
    200
    
    
    
    200Floating rate, hybrid trust securities, due 2037 to 2047
    
    
    2,513
    
    
    
    2,513
    
    
    
    2,513
    
    
    
    1,675
    
    
    
    1,6755.20%, income trust securities, due 2042
    
    
    2,501
    
    
    
    2,501
    
    
    
    2,501
    
    
    
    2,501
    
    
    
    2,501Subordinated debentures6.55% to 7.574%, due 2026 to 2035
    
    
    796
    
    
    
    795
    
    
    
    795
    
    
    
    795
    
    
    
    795Hedge-related basis adjustments
    
    
    198
    
    
    
    1,073
    
    
    
    406
    
    
    
    (139
    )
    
    
    (660
    )Total notes and debentures issued by the
Parent Company
    
    
    53,272
    
    
    
    51,161
    
    
    
    47,444
    
    
    
    45,636
    
    
    
    42,681NOTES ISSUED BY SUBSIDIARIESPrimarily notes issued under global bank note programs,
varying rates and terms to 2040
    
    
    27,654
    
    
    
    29,550
    
    
    
    23,562
    
    
    
    21,226
    
    
    
    21,537Floating rate, 2.403% to 2.901%, due 2008 to 2011
    
    
    3,400
    
    
    
    5,133
    
    
    
    5,133
    
    
    
    7,133
    
    
    
    7,1334.125% to 4.75%, due 2009 to 2012
    
    
    1,691
    
    
    
    1,690
    
    
    
    2,390
    
    
    
    2,389
    
    
    
    2,689Floating rate, EMTN notes, due 2009 to 2011
    
    
    4,628
    
    
    
    4,652
    
    
    
    4,316
    
    
    
    3,907
    
    
    
    3,7106.00%, EMTN notes, due 2013
    
    
    2,363
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Subordinated notesBank, 3.076% to 9.625%, due 2008 to 2038
    
    
    12,800
    
    
    
    12,802
    
    
    
    12,955
    
    
    
    9,532
    
    
    
    9,5337.95%
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    100
    
    
    
    100Floating rate, due 2013
    
    
    417
    
    
    
    417
    
    
    
    417
    
    
    
    417
    
    
    
    4176.75%, Australian notes, due 2017
    
    
    191
    
    
    
    182
    
    
    
    175
    
    
    
    176
    
    
    
    169Floating rate, Australian notes, due 2017
    
    
    192
    
    
    
    183
    
    
    
    175
    
    
    
    177
    
    
    
    1705.25%, EMTN notes, due 2023
    
    
    1,477
    
    
    
    1,475
    
    
    
    1,477
    
    
    
    1,512
    
    
    
    1,488Total notes issued by subsidiaries
    
    
    54,813
    
    
    
    56,084
    
    
    
    50,600
    
    
    
    46,569
    
    
    
    46,946OTHER DEBTAuto secured financing, 2.50% to 7.05%, due 2008 to 2015
    
    
    6,292
    
    
    
    6,147
    
    
    
    6,679
    
    
    
    7,748
    
    
    
    8,994Collateralized notes
    
    
    -
    
    
    
    -
    
    
    
    4,300
    
    
    
    4,300
    
    
    
    4,420Junior subordinated debentures, floating rate, due 2026 to 2029
    
    
    3,110
    
    
    
    3,110
    
    
    
    3,098
    
    
    
    3,099
    
    
    
    3,100Advances from the Federal Home Loan Bank, 1.00% to 8.45%,
due 2010 to 2031
    
    
    55,611
    
    
    
    53,209
    
    
    
    41,888
    
    
    
    43,017
    
    
    
    30,542Preferred units issued by subsidiaries
    
    
    2,852
    
    
    
    2,852
    
    
    
    2,852
    
    
    
    2,852
    
    
    
    2,852Capitalized leases
    
    
    7
    
    
    
    7
    
    
    
    8
    
    
    
    9
    
    
    
    9Mortgage notes and other debt of subsidiaries, varying rates and terms
    
    
    8,323
    
    
    
    2,467
    
    
    
    3,870
    
    
    
    5,411
    
    
    
    2,809Hedge-related basis adjustments
    
    
    121
    
    
    
    616
    
    
    
    268
    
    
    
    (57
    )
    
    
    (306
    )Total other debt
    
    
    76,316
    
    
    
    68,408
    
    
    
    62,963
    
    
    
    66,379
    
    
    
    52,420Total long-term debt
    
    $
    184,401
    
    
    
    175,653
    
    
    
    161,007
    
    
    
    158,584
    
    
    
    142,047
 73




---



##### 



Table 19
 
 CHANGES IN STOCKHOLDERS EQUITY
 
 2008
    
    
    2007Second
    
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second(In millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterBalance, beginning of period, as reported
    
    $
    77,992
    
    
    
    76,872
    
    
    
    70,140
    
    
    
    69,266
    
    
    
    69,786Cumulative
effect of accounting changes, net of income taxes (a)
    
    
    -
    
    
    
    (24
    )
    
    
    -
    
    
    
    -
    
    
    
    -Balance, beginning of period
    
    
    77,992
    
    
    
    76,848
    
    
    
    70,140
    
    
    
    69,266
    
    
    
    69,786Comprehensive
income (loss)Net income (loss)
    
    
    (8,915
    )
    
    
    (664
    )
    
    
    51
    
    
    
    1,618
    
    
    
    2,341Unamortized gains and losses under employee benefit plans
    
    
    5
    
    
    
    6
    
    
    
    561
    
    
    
    16
    
    
    
    31Net unrealized gains (losses) on debt and equity securities
    
    
    (1,112
    )
    
    
    (705
    )
    
    
    459
    
    
    
    493
    
    
    
    (1,284
    )Net unrealized gains (losses) on derivative financial instruments
    
    
    132
    
    
    
    91
    
    
    
    164
    
    
    
    3
    
    
    
    (76
    )Total
comprehensive income (loss)
    
    
    (9,890
    )
    
    
    (1,272
    )
    
    
    1,235
    
    
    
    2,130
    
    
    
    1,012Purchases of common stock
    
    
    -
    
    
    
    (20
    )
    
    
    -
    
    
    
    (190
    )
    
    
    (723
    )Preferred shares issued
    
    
    3,975
    
    
    
    3,497
    
    
    
    2,263
    
    
    
    -
    
    
    
    -Common stock issued
    
    
    3,969
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Common stock issued forStock options and restricted stock
    
    
    (48
    )
    
    
    372
    
    
    
    404
    
    
    
    35
    
    
    
    132Acquisitions
    
    
    -
    
    
    
    -
    
    
    
    3,942
    
    
    
    -
    
    
    
    -Deferred compensation, net
    
    
    130
    
    
    
    (116
    )
    
    
    152
    
    
    
    114
    
    
    
    125Cash dividendsPreferred shares
    
    
    (193
    )
    
    
    (43
    )
    
    
    -
    
    
    
    -
    
    
    
    -Common shares
    
    
    (808
    )
    
    
    (1,274
    )
    
    
    (1,264
    )
    
    
    (1,215
    )
    
    
    (1,066
    )Balance, end of period
    
    $
    75,127
    
    
    
    77,992
    
    
    
    76,872
    
    
    
    70,140
    
    
    
    69,266
  74




---



##### 



Table 20
 
 CAPITAL RATIOS
 
 2008
    
    
    2007Second
    
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second(In millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterCONSOLIDATED CAPITAL RATIOS (a)Qualifying capitalTier 1 capital
    
    $
    49,473
    
    
    
    45,353
    
    
    
    43,528
    
    
    
    41,853
    
    
    
    41,516Total capital
    
    
    78,811
    
    
    
    73,684
    
    
    
    70,003
    
    
    
    63,948
    
    
    
    63,705Adjusted risk-weighted assets
    
    
    618,736
    
    
    
    611,596
    
    
    
    592,065
    
    
    
    589,844
    
    
    
    555,702Adjusted leverage ratio assets
    
    $
    753,108
    
    
    
    734,233
    
    
    
    714,633
    
    
    
    686,373
    
    
    
    666,646RatiosTier 1 capital
    
    
    8.00
    %
    
    
    7.42
    
    
    
    7.35
    
    
    
    7.10
    
    
    
    7.47Total capital
    
    
    12.74
    
    
    
    12.05
    
    
    
    11.82
    
    
    
    10.84
    
    
    
    11.46Leverage
    
    
    6.57
    
    
    
    6.18
    
    
    
    6.09
    
    
    
    6.10
    
    
    
    6.23STOCKHOLDERS EQUITY TO ASSETSQuarter-end
    
    
    9.25
    
    
    
    9.65
    
    
    
    9.82
    
    
    
    9.30
    
    
    
    9.68Average
    
    
    10.26
    %
    
    
    10.05
    
    
    
    9.69
    
    
    
    9.58
    
    
    
    9.84BANK CAPITAL RATIOSTier 1 capitalWachovia Bank, National Association
    
    
    7.25
    %
    
    
    7.50
    
    
    
    7.50
    
    
    
    7.09
    
    
    
    7.34Wachovia Bank of Delaware, National Association
    
    
    13.90
    
    
    
    15.04
    
    
    
    15.60
    
    
    
    17.14
    
    
    
    18.37Wachovia Mortgage, FSB (b)
    
    
    11.88
    
    
    
    11.92
    
    
    
    12.44
    
    
    
    13.44
    
    
    
    16.07Wachovia Bank, FSB (c)
    
    
    22.17
    
    
    
    19.66
    
    
    
    17.07
    
    
    
    15.94
    
    
    
    12.42Total capitalWachovia Bank, National Association
    
    
    11.58
    
    
    
    11.72
    
    
    
    11.45
    
    
    
    10.57
    
    
    
    10.95Wachovia Bank of Delaware, National Association
    
    
    16.02
    
    
    
    17.07
    
    
    
    17.67
    
    
    
    19.27
    
    
    
    20.29Wachovia Mortgage, FSB (b)
    
    
    13.19
    
    
    
    13.18
    
    
    
    13.70
    
    
    
    13.81
    
    
    
    16.45Wachovia Bank, FSB (c)
    
    
    23.45
    
    
    
    20.91
    
    
    
    17.95
    
    
    
    16.25
    
    
    
    12.83LeverageWachovia Bank, National Association
    
    
    6.27
    
    
    
    6.39
    
    
    
    6.71
    
    
    
    6.69
    
    
    
    6.72Wachovia Bank of Delaware, National Association
    
    
    9.48
    
    
    
    9.99
    
    
    
    9.82
    
    
    
    15.66
    
    
    
    14.33Wachovia Mortgage, FSB (b)
    
    
    6.00
    
    
    
    6.38
    
    
    
    6.56
    
    
    
    7.17
    
    
    
    8.78Wachovia Bank, FSB (c)
    
    
    6.45
    %
    
    
    6.26
    
    
    
    5.94
    
    
    
    5.50
    
    
    
    5.20
    75




---



##### 



WACHOVIA CORPORATION AND SUBSIDIARIES
 
 NET INTEREST INCOME SUMMARIES
 
 SECOND QUARTER 2008
    
    
    FIRST QUARTER 2008Average
    
    
    
    
    
    
    
    
    
    
    AverageInterest
    
    
    Rates
    
    
    
    
    
    
    Interest
    
    
    RatesAverage
    
    
    Income/
    
    
    Earned/
    
    
    Average
    
    
    Income/
    
    
    Earned/(In millions)
    
    Balances
    
    
    Expense
    
    
    Paid
    
    
    Balances
    
    
    Expense
    
    
    PaidASSETSInterest-bearing bank balances
    
    $
    4,980
    
    
    
    39
    
    
    
    3.11
    %
    
    $
    4,253
    
    
    
    51
    
    
    
    4.85
    %Federal funds sold and securities
purchased under resale agreements
    
    
    13,075
    
    
    
    81
    
    
    
    2.51
    
    
    
    11,865
    
    
    
    103
    
    
    
    3.49Trading account assets (a)
    
    
    43,575
    
    
    
    541
    
    
    
    4.97
    
    
    
    44,655
    
    
    
    589
    
    
    
    5.28Securities (a)
    
    
    116,504
    
    
    
    1,603
    
    
    
    5.51
    
    
    
    110,401
    
    
    
    1,545
    
    
    
    5.60Loans (a) (b)CommercialCommercial, financial and agricultural
    
    
    120,693
    
    
    
    1,493
    
    
    
    4.98
    
    
    
    115,377
    
    
    
    1,671
    
    
    
    5.82Real estate  construction and other
    
    
    18,849
    
    
    
    204
    
    
    
    4.35
    
    
    
    18,634
    
    
    
    251
    
    
    
    5.42Real estate  mortgage
    
    
    26,730
    
    
    
    338
    
    
    
    5.08
    
    
    
    25,291
    
    
    
    374
    
    
    
    5.95Lease financing (c)
    
    
    6,713
    
    
    
    (857
    )
    
    
    (51.02
    )
    
    
    7,167
    
    
    
    140
    
    
    
    7.79Foreign
    
    
    33,219
    
    
    
    360
    
    
    
    4.34
    
    
    
    32,109
    
    
    
    389
    
    
    
    4.86Total commercial
    
    
    206,204
    
    
    
    1,538
    
    
    
    3.01
    
    
    
    198,578
    
    
    
    2,825
    
    
    
    5.72ConsumerReal estate secured
    
    
    231,754
    
    
    
    3,715
    
    
    
    6.42
    
    
    
    231,392
    
    
    
    3,926
    
    
    
    6.79Student loans
    
    
    9,887
    
    
    
    108
    
    
    
    4.41
    
    
    
    9,155
    
    
    
    113
    
    
    
    4.96Installment loans
    
    
    28,889
    
    
    
    686
    
    
    
    9.55
    
    
    
    26,811
    
    
    
    659
    
    
    
    9.88Total consumer
    
    
    270,530
    
    
    
    4,509
    
    
    
    6.68
    
    
    
    267,358
    
    
    
    4,698
    
    
    
    7.04Total loans
    
    
    476,734
    
    
    
    6,047
    
    
    
    5.09
    
    
    
    465,936
    
    
    
    7,523
    
    
    
    6.48Loans held for sale
    
    
    9,141
    
    
    
    141
    
    
    
    6.17
    
    
    
    11,592
    
    
    
    223
    
    
    
    7.71Other earning assets
    
    
    11,080
    
    
    
    136
    
    
    
    4.94
    
    
    
    10,331
    
    
    
    146
    
    
    
    5.69Total earning assets excluding derivatives
    
    
    675,089
    
    
    
    8,588
    
    
    
    5.10
    
    
    
    659,033
    
    
    
    10,180
    
    
    
    6.19Risk management derivatives (d)
    
    
    -
    
    
    
    112
    
    
    
    0.07
    
    
    
    -
    
    
    
    52
    
    
    
    0.04Total earning assets including derivatives
    
    
    675,089
    
    
    
    8,700
    
    
    
    5.17
    
    
    
    659,033
    
    
    
    10,232
    
    
    
    6.23Cash and due from banks
    
    
    11,472
    
    
    
    
    
    
    
    
    
    
    
    11,645Other assets
    
    
    109,876
    
    
    
    
    
    
    
    
    
    
    
    112,915Total assets
    
    $
    796,437
    
    
    
    
    
    
    
    
    
    
    $
    783,593LIABILITIES AND STOCKHOLDERS EQUITYInterest-bearing depositsSavings and NOW accounts
    
    
    86,317
    
    
    
    137
    
    
    
    0.64
    
    
    
    86,452
    
    
    
    236
    
    
    
    1.10Money market accounts
    
    
    132,792
    
    
    
    504
    
    
    
    1.53
    
    
    
    128,074
    
    
    
    747
    
    
    
    2.34Other consumer time
    
    
    113,579
    
    
    
    1,145
    
    
    
    4.05
    
    
    
    123,655
    
    
    
    1,437
    
    
    
    4.68Foreign
    
    
    25,913
    
    
    
    191
    
    
    
    2.97
    
    
    
    26,197
    
    
    
    231
    
    
    
    3.55Other time
    
    
    18,965
    
    
    
    181
    
    
    
    3.83
    
    
    
    22,643
    
    
    
    265
    
    
    
    4.71Total interest-bearing deposits
    
    
    377,566
    
    
    
    2,158
    
    
    
    2.30
    
    
    
    387,021
    
    
    
    2,916
    
    
    
    3.03Federal funds purchased and securities
sold under repurchase agreements
    
    
    43,288
    
    
    
    274
    
    
    
    2.54
    
    
    
    35,956
    
    
    
    308
    
    
    
    3.45Commercial paper
    
    
    5,186
    
    
    
    20
    
    
    
    1.61
    
    
    
    5,509
    
    
    
    38
    
    
    
    2.74Securities sold short
    
    
    6,243
    
    
    
    53
    
    
    
    3.42
    
    
    
    6,919
    
    
    
    62
    
    
    
    3.63Other short-term borrowings
    
    
    9,288
    
    
    
    33
    
    
    
    1.34
    
    
    
    10,154
    
    
    
    45
    
    
    
    1.77Long-term debt
    
    
    177,473
    
    
    
    1,737
    
    
    
    3.93
    
    
    
    165,540
    
    
    
    1,961
    
    
    
    4.75Total interest-bearing liabilities excluding derivatives
    
    
    619,044
    
    
    
    4,275
    
    
    
    2.77
    
    
    
    611,099
    
    
    
    5,330
    
    
    
    3.51Risk management derivatives (d)
    
    
    -
    
    
    
    81
    
    
    
    0.06
    
    
    
    -
    
    
    
    97
    
    
    
    0.06Total interest-bearing liabilities including derivatives
    
    
    619,044
    
    
    
    4,356
    
    
    
    2.83
    
    
    
    611,099
    
    
    
    5,427
    
    
    
    3.57Noninterest-bearing deposits
    
    
    57,982
    
    
    
    
    
    
    
    
    
    
    
    56,332Other liabilities
    
    
    37,671
    
    
    
    
    
    
    
    
    
    
    
    37,415Stockholders equity
    
    
    81,740
    
    
    
    
    
    
    
    
    
    
    
    78,747Total liabilities and stockholders equity
    
    $
    796,437
    
    
    
    
    
    
    
    
    
    
    $
    783,593Interest income and rate earned  including derivatives
    
    
    
    
    
    $
    8,700
    
    
    
    5.17
    %
    
    
    
    
    
    $
    10,232
    
    
    
    6.23
    %Interest expense and equivalent rate paid  including
derivatives
    
    
    
    
    
    
    4,356
    
    
    
    2.59
    
    
    
    
    
    
    
    5,427
    
    
    
    3.31Net interest income and margin  including derivatives
    
    
    
    
    
    $
    4,344
    
    
    
    2.58
    %
    
    
    
    
    
    $
    4,805
    
    
    
    2.92
    %
   76




---



##### 



FOURTH QUARTER 2007
    
    
    THIRD QUARTER 2007
    
    
    SECOND QUARTER 2007Average
    
    
    
    
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    
    
    
    
    AverageInterest
    
    
    Rates
    
    
    
    
    
    
    Interest
    
    
    Rates
    
    
    
    
    
    
    Interest
    
    
    RatesAverage
    
    
    Income/
    
    
    Earned/
    
    
    Average
    
    
    Income/
    
    
    Earned/
    
    
    Average
    
    
    Income/
    
    
    Earned/Balances
    
    
    Expense
    
    
    Paid
    
    
    Balances
    
    
    Expense
    
    
    Paid
    
    
    Balances
    
    
    Expense
    
    
    Paid$
    5,083
    
    
    
    64
    
    
    
    5.05
    %
    
    $
    6,459
    
    
    
    93
    
    
    
    5.68
    %
    
    $
    3,384
    
    
    
    50
    
    
    
    6.00
    %12,901
    
    
    
    155
    
    
    
    4.77
    
    
    
    14,206
    
    
    
    194
    
    
    
    5.42
    
    
    
    12,110
    
    
    
    158
    
    
    
    5.2537,694
    
    
    
    569
    
    
    
    6.04
    
    
    
    38,737
    
    
    
    575
    
    
    
    5.93
    
    
    
    35,165
    
    
    
    519
    
    
    
    5.90115,436
    
    
    
    1,625
    
    
    
    5.62
    
    
    
    111,424
    
    
    
    1,522
    
    
    
    5.46
    
    
    
    108,433
    
    
    
    1,467
    
    
    
    5.41111,500
    
    
    
    1,908
    
    
    
    6.79
    
    
    
    106,263
    
    
    
    1,927
    
    
    
    7.19
    
    
    
    101,012
    
    
    
    1,805
    
    
    
    7.1618,435
    
    
    
    318
    
    
    
    6.85
    
    
    
    17,795
    
    
    
    344
    
    
    
    7.66
    
    
    
    17,334
    
    
    
    329
    
    
    
    7.6222,973
    
    
    
    426
    
    
    
    7.36
    
    
    
    20,883
    
    
    
    406
    
    
    
    7.71
    
    
    
    20,175
    
    
    
    378
    
    
    
    7.537,374
    
    
    
    145
    
    
    
    7.82
    
    
    
    7,523
    
    
    
    146
    
    
    
    7.80
    
    
    
    7,759
    
    
    
    150
    
    
    
    7.7427,882
    
    
    
    380
    
    
    
    5.42
    
    
    
    22,208
    
    
    
    308
    
    
    
    5.53
    
    
    
    19,232
    
    
    
    265
    
    
    
    5.51188,164
    
    
    
    3,177
    
    
    
    6.70
    
    
    
    174,672
    
    
    
    3,131
    
    
    
    7.12
    
    
    
    165,512
    
    
    
    2,927
    
    
    
    7.09227,893
    
    
    
    4,042
    
    
    
    7.08
    
    
    
    223,356
    
    
    
    4,070
    
    
    
    7.28
    
    
    
    222,096
    
    
    
    4,042
    
    
    
    7.288,073
    
    
    
    126
    
    
    
    6.19
    
    
    
    7,299
    
    
    
    122
    
    
    
    6.61
    
    
    
    8,850
    
    
    
    141
    
    
    
    6.4225,675
    
    
    
    651
    
    
    
    10.04
    
    
    
    24,474
    
    
    
    614
    
    
    
    9.96
    
    
    
    24,799
    
    
    
    609
    
    
    
    9.84261,641
    
    
    
    4,819
    
    
    
    7.35
    
    
    
    255,129
    
    
    
    4,806
    
    
    
    7.52
    
    
    
    255,745
    
    
    
    4,792
    
    
    
    7.50449,805
    
    
    
    7,996
    
    
    
    7.08
    
    
    
    429,801
    
    
    
    7,937
    
    
    
    7.35
    
    
    
    421,257
    
    
    
    7,719
    
    
    
    7.3418,998
    
    
    
    360
    
    
    
    7.53
    
    
    
    20,209
    
    
    
    363
    
    
    
    7.14
    
    
    
    17,644
    
    
    
    285
    
    
    
    6.4710,223
    
    
    
    166
    
    
    
    6.48
    
    
    
    7,937
    
    
    
    138
    
    
    
    6.91
    
    
    
    7,985
    
    
    
    144
    
    
    
    7.23650,140
    
    
    
    10,935
    
    
    
    6.70
    
    
    
    628,773
    
    
    
    10,822
    
    
    
    6.86
    
    
    
    605,978
    
    
    
    10,342
    
    
    
    6.84-
    
    
    
    19
    
    
    
    0.01
    
    
    
    -
    
    
    
    42
    
    
    
    0.02
    
    
    
    -
    
    
    
    46
    
    
    
    0.03650,140
    
    
    
    10,954
    
    
    
    6.71
    
    
    
    628,773
    
    
    
    10,864
    
    
    
    6.88
    
    
    
    605,978
    
    
    
    10,388
    
    
    
    6.8712,028
    
    
    
    
    
    
    
    
    
    
    
    11,134
    
    
    
    
    
    
    
    
    
    
    
    11,533101,319
    
    
    
    
    
    
    
    
    
    
    
    89,097
    
    
    
    
    
    
    
    
    
    
    
    87,262$
    763,487
    
    
    
    
    
    
    
    
    
    
    $
    729,004
    
    
    
    
    
    
    
    
    
    
    $
    704,77383,370
    
    
    
    345
    
    
    
    1.64
    
    
    
    81,851
    
    
    
    357
    
    
    
    1.73
    
    
    
    83,977
    
    
    
    367
    
    
    
    1.75121,717
    
    
    
    949
    
    
    
    3.09
    
    
    
    116,404
    
    
    
    980
    
    
    
    3.34
    
    
    
    111,562
    
    
    
    976
    
    
    
    3.51127,061
    
    
    
    1,557
    
    
    
    4.86
    
    
    
    122,474
    
    
    
    1,507
    
    
    
    4.88
    
    
    
    120,684
    
    
    
    1,455
    
    
    
    4.8427,354
    
    
    
    306
    
    
    
    4.44
    
    
    
    23,322
    
    
    
    292
    
    
    
    4.97
    
    
    
    21,871
    
    
    
    270
    
    
    
    4.9620,169
    
    
    
    263
    
    
    
    5.16
    
    
    
    13,776
    
    
    
    187
    
    
    
    5.40
    
    
    
    8,051
    
    
    
    107
    
    
    
    5.30379,671
    
    
    
    3,420
    
    
    
    3.57
    
    
    
    357,827
    
    
    
    3,323
    
    
    
    3.68
    
    
    
    346,145
    
    
    
    3,175
    
    
    
    3.6836,386
    
    
    
    413
    
    
    
    4.50
    
    
    
    44,334
    
    
    
    556
    
    
    
    4.98
    
    
    
    38,031
    
    
    
    473
    
    
    
    4.987,272
    
    
    
    78
    
    
    
    4.27
    
    
    
    5,799
    
    
    
    65
    
    
    
    4.42
    
    
    
    5,143
    
    
    
    60
    
    
    
    4.676,728
    
    
    
    61
    
    
    
    3.62
    
    
    
    7,420
    
    
    
    70
    
    
    
    3.74
    
    
    
    7,158
    
    
    
    67
    
    
    
    3.7510,369
    
    
    
    58
    
    
    
    2.24
    
    
    
    7,793
    
    
    
    55
    
    
    
    2.74
    
    
    
    7,688
    
    
    
    52
    
    
    
    2.77158,704
    
    
    
    2,129
    
    
    
    5.34
    
    
    
    151,226
    
    
    
    2,067
    
    
    
    5.44
    
    
    
    143,504
    
    
    
    1,923
    
    
    
    5.37599,130
    
    
    
    6,159
    
    
    
    4.08
    
    
    
    574,399
    
    
    
    6,136
    
    
    
    4.24
    
    
    
    547,669
    
    
    
    5,750
    
    
    
    4.21-
    
    
    
    121
    
    
    
    0.08
    
    
    
    -
    
    
    
    144
    
    
    
    0.10
    
    
    
    -
    
    
    
    151
    
    
    
    0.11599,130
    
    
    
    6,280
    
    
    
    4.16
    
    
    
    574,399
    
    
    
    6,280
    
    
    
    4.34
    
    
    
    547,669
    
    
    
    5,901
    
    
    
    4.3257,895
    
    
    
    
    
    
    
    
    
    
    
    58,280
    
    
    
    
    
    
    
    
    
    
    
    62,27332,476
    
    
    
    
    
    
    
    
    
    
    
    26,468
    
    
    
    
    
    
    
    
    
    
    
    25,51473,986
    
    
    
    
    
    
    
    
    
    
    
    69,857
    
    
    
    
    
    
    
    
    
    
    
    69,317$
    763,487
    
    
    
    
    
    
    
    
    
    
    $
    729,004
    
    
    
    
    
    
    
    
    
    
    $
    704,773$
    10,954
    
    
    
    6.71
    %
    
    
    
    
    
    $
    10,864
    
    
    
    6.88
    %
    
    
    
    
    
    $
    10,388
    
    
    
    6.87
    %6,280
    
    
    
    3.83
    
    
    
    
    
    
    
    6,280
    
    
    
    3.96
    
    
    
    
    
    
    
    5,901
    
    
    
    3.91$
    4,674
    
    
    
    2.88
    %
    
    
    
    
    
    $
    4,584
    
    
    
    2.92
    %
    
    
    
    
    
    $
    4,487
    
    
    
    2.96
    %
   77




---



##### 



WACHOVIA CORPORATION AND SUBSIDIARIES
 
 NET INTEREST INCOME SUMMARIES
 
 SIX MONTHS ENDED
    
    
    SIX MONTHS ENDEDJUNE 30, 2008
    
    
    JUNE 30, 2007Average
    
    
    
    
    
    
    
    
    
    
    AverageInterest
    
    
    Rates
    
    
    
    
    
    
    Interest
    
    
    RatesAverage
    
    
    Income/
    
    
    Earned/
    
    
    Average
    
    
    Income/
    
    
    Earned/(In millions)
    
    Balances
    
    
    Expense
    
    
    Paid
    
    
    Balances
    
    
    Expense
    
    
    PaidASSETSInterest-bearing bank balances
    
    $
    4,616
    
    
    
    90
    
    
    
    3.91
    %
    
    $
    2,459
    
    
    
    80
    
    
    
    6.55
    %Federal funds sold and securities
purchased under resale agreements
    
    
    12,470
    
    
    
    184
    
    
    
    2.98
    
    
    
    13,111
    
    
    
    335
    
    
    
    5.16Trading account assets (a)
    
    
    44,115
    
    
    
    1,130
    
    
    
    5.13
    
    
    
    32,438
    
    
    
    961
    
    
    
    5.93Securities (a)
    
    
    113,452
    
    
    
    3,148
    
    
    
    5.55
    
    
    
    108,253
    
    
    
    2,928
    
    
    
    5.42Loans (a) (b)CommercialCommercial, financial and agricultural
    
    
    118,036
    
    
    
    3,164
    
    
    
    5.39
    
    
    
    99,719
    
    
    
    3,541
    
    
    
    7.16Real estate  construction and other
    
    
    18,741
    
    
    
    455
    
    
    
    4.88
    
    
    
    16,924
    
    
    
    642
    
    
    
    7.65Real estate  mortgage
    
    
    26,010
    
    
    
    712
    
    
    
    5.51
    
    
    
    20,203
    
    
    
    758
    
    
    
    7.57Lease financing (c)
    
    
    6,940
    
    
    
    (717
    )
    
    
    (20.65
    )
    
    
    7,745
    
    
    
    300
    
    
    
    7.74Foreign
    
    
    32,664
    
    
    
    749
    
    
    
    4.60
    
    
    
    16,832
    
    
    
    461
    
    
    
    5.50Total commercial
    
    
    202,391
    
    
    
    4,363
    
    
    
    4.34
    
    
    
    161,423
    
    
    
    5,702
    
    
    
    7.12ConsumerReal estate secured
    
    
    231,573
    
    
    
    7,641
    
    
    
    6.61
    
    
    
    223,992
    
    
    
    8,190
    
    
    
    7.32Student loans
    
    
    9,521
    
    
    
    221
    
    
    
    4.68
    
    
    
    8,688
    
    
    
    277
    
    
    
    6.45Installment loans
    
    
    27,850
    
    
    
    1,345
    
    
    
    9.71
    
    
    
    24,172
    
    
    
    1,175
    
    
    
    9.80Total consumer
    
    
    268,944
    
    
    
    9,207
    
    
    
    6.86
    
    
    
    256,852
    
    
    
    9,642
    
    
    
    7.53Total loans
    
    
    471,335
    
    
    
    13,570
    
    
    
    5.78
    
    
    
    418,275
    
    
    
    15,344
    
    
    
    7.37Loans held for sale
    
    
    10,367
    
    
    
    364
    
    
    
    7.03
    
    
    
    17,199
    
    
    
    540
    
    
    
    6.32Other earning assets
    
    
    10,706
    
    
    
    282
    
    
    
    5.30
    
    
    
    8,119
    
    
    
    283
    
    
    
    7.02Total earning assets excluding derivatives
    
    
    667,061
    
    
    
    18,768
    
    
    
    5.64
    
    
    
    599,854
    
    
    
    20,471
    
    
    
    6.85Risk management derivatives (d)
    
    
    -
    
    
    
    164
    
    
    
    0.05
    
    
    
    -
    
    
    
    94
    
    
    
    0.03Total earning assets including derivatives
    
    
    667,061
    
    
    
    18,932
    
    
    
    5.69
    
    
    
    599,854
    
    
    
    20,565
    
    
    
    6.88Cash and due from banks
    
    
    11,558
    
    
    
    
    
    
    
    
    
    
    
    11,894Other assets
    
    
    111,396
    
    
    
    
    
    
    
    
    
    
    
    86,191Total assets
    
    $
    790,015
    
    
    
    
    
    
    
    
    
    
    $
    697,939LIABILITIES AND STOCKHOLDERS EQUITYInterest-bearing depositsSavings and NOW accounts
    
    
    86,385
    
    
    
    373
    
    
    
    0.87
    
    
    
    84,111
    
    
    
    740
    
    
    
    1.77Money market accounts
    
    
    130,433
    
    
    
    1,251
    
    
    
    1.93
    
    
    
    109,684
    
    
    
    1,893
    
    
    
    3.48Other consumer time
    
    
    118,616
    
    
    
    2,582
    
    
    
    4.38
    
    
    
    118,485
    
    
    
    2,824
    
    
    
    4.81Foreign
    
    
    26,055
    
    
    
    422
    
    
    
    3.26
    
    
    
    21,340
    
    
    
    519
    
    
    
    4.90Other time
    
    
    20,804
    
    
    
    446
    
    
    
    4.31
    
    
    
    8,539
    
    
    
    226
    
    
    
    5.34Total interest-bearing deposits
    
    
    382,293
    
    
    
    5,074
    
    
    
    2.67
    
    
    
    342,159
    
    
    
    6,202
    
    
    
    3.66Federal funds purchased and securities
sold under repurchase agreements
    
    
    39,622
    
    
    
    582
    
    
    
    2.95
    
    
    
    36,595
    
    
    
    903
    
    
    
    4.97Commercial paper
    
    
    5,348
    
    
    
    58
    
    
    
    2.19
    
    
    
    5,032
    
    
    
    117
    
    
    
    4.70Securities sold short
    
    
    6,581
    
    
    
    115
    
    
    
    3.53
    
    
    
    7,929
    
    
    
    150
    
    
    
    3.81Other short-term borrowings
    
    
    9,722
    
    
    
    78
    
    
    
    1.57
    
    
    
    7,295
    
    
    
    96
    
    
    
    2.66Long-term debt
    
    
    171,506
    
    
    
    3,698
    
    
    
    4.33
    
    
    
    142,746
    
    
    
    3,803
    
    
    
    5.36Total interest-bearing liabilities excluding derivatives
    
    
    615,072
    
    
    
    9,605
    
    
    
    3.14
    
    
    
    541,756
    
    
    
    11,271
    
    
    
    4.19Risk management derivatives (d)
    
    
    -
    
    
    
    178
    
    
    
    0.06
    
    
    
    -
    
    
    
    270
    
    
    
    0.10Total interest-bearing liabilities including derivatives
    
    
    615,072
    
    
    
    9,783
    
    
    
    3.20
    
    
    
    541,756
    
    
    
    11,541
    
    
    
    4.29Noninterest-bearing deposits
    
    
    57,157
    
    
    
    
    
    
    
    
    
    
    
    61,628Other liabilities
    
    
    37,542
    
    
    
    
    
    
    
    
    
    
    
    25,237Stockholders equity
    
    
    80,244
    
    
    
    
    
    
    
    
    
    
    
    69,318Total liabilities and stockholders equity
    
    $
    790,015
    
    
    
    
    
    
    
    
    
    
    $
    697,939Interest income and rate earned  including derivatives
    
    
    
    
    
    $
    18,932
    
    
    
    5.69
    %
    
    
    
    
    
    $
    20,565
    
    
    
    6.88
    %Interest expense and equivalent rate paid  including derivatives
    
    
    
    
    
    
    9,783
    
    
    
    2.95
    
    
    
    
    
    
    
    11,541
    
    
    
    3.87Net interest income and margin  including derivatives
    
    
    
    
    
    $
    9,149
    
    
    
    2.74
    %
    
    
    
    
    
    $
    9,024
    
    
    
    3.01
    %
 
 78




---



##### 



WACHOVIA CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 
 2008
    
    
    2007Second
    
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second(In millions, except per share data)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterASSETSCash and due from banks
    
    $
    15,127
    
    
    
    14,703
    
    
    
    15,124
    
    
    
    12,681
    
    
    
    12,065Interest-bearing bank balances
    
    
    10,289
    
    
    
    3,236
    
    
    
    3,057
    
    
    
    4,449
    
    
    
    2,726Federal funds sold and securities purchased under
resale agreements
    
    
    21,923
    
    
    
    10,644
    
    
    
    15,449
    
    
    
    11,995
    
    
    
    11,511Total cash and cash equivalents
    
    
    47,339
    
    
    
    28,583
    
    
    
    33,630
    
    
    
    29,125
    
    
    
    26,302Trading account assets
    
    
    62,589
    
    
    
    72,592
    
    
    
    55,882
    
    
    
    54,835
    
    
    
    51,540Securities
    
    
    113,461
    
    
    
    114,183
    
    
    
    115,037
    
    
    
    111,827
    
    
    
    106,184Loans, net of unearned income
    
    
    488,198
    
    
    
    480,482
    
    
    
    461,954
    
    
    
    449,206
    
    
    
    429,120Allowance for loan losses
    
    
    (10,744
    )
    
    
    (6,567
    )
    
    
    (4,507
    )
    
    
    (3,505
    )
    
    
    (3,390
    )Loans, net
    
    
    477,454
    
    
    
    473,915
    
    
    
    457,447
    
    
    
    445,701
    
    
    
    425,730Loans held for sale
    
    
    8,430
    
    
    
    11,429
    
    
    
    16,772
    
    
    
    21,431
    
    
    
    17,733Premises and equipment
    
    
    6,667
    
    
    
    6,733
    
    
    
    6,605
    
    
    
    6,002
    
    
    
    6,080Due from customers on acceptances
    
    
    1,302
    
    
    
    1,109
    
    
    
    1,418
    
    
    
    1,295
    
    
    
    831Goodwill
    
    
    36,993
    
    
    
    43,068
    
    
    
    43,122
    
    
    
    38,848
    
    
    
    38,766Other intangible assets
    
    
    1,942
    
    
    
    2,038
    
    
    
    2,119
    
    
    
    1,380
    
    
    
    1,468Other assets
    
    
    56,256
    
    
    
    54,925
    
    
    
    50,864
    
    
    
    43,724
    
    
    
    40,794Total assets
    
    $
    812,433
    
    
    
    808,575
    
    
    
    782,896
    
    
    
    754,168
    
    
    
    715,428LIABILITIES AND STOCKHOLDERS EQUITYDepositsNoninterest-bearing deposits
    
    
    63,393
    
    
    
    60,951
    
    
    
    60,893
    
    
    
    56,825
    
    
    
    62,112Interest-bearing deposits
    
    
    384,397
    
    
    
    384,013
    
    
    
    388,236
    
    
    
    365,112
    
    
    
    347,918Total deposits
    
    
    447,790
    
    
    
    444,964
    
    
    
    449,129
    
    
    
    421,937
    
    
    
    410,030Short-term borrowings
    
    
    55,448
    
    
    
    57,857
    
    
    
    50,393
    
    
    
    62,714
    
    
    
    52,715Bank acceptances outstanding
    
    
    1,307
    
    
    
    1,118
    
    
    
    1,424
    
    
    
    1,303
    
    
    
    840Trading account liabilities
    
    
    26,305
    
    
    
    28,887
    
    
    
    21,585
    
    
    
    17,771
    
    
    
    19,319Other liabilities
    
    
    19,023
    
    
    
    19,036
    
    
    
    19,151
    
    
    
    18,424
    
    
    
    18,080Long-term debt
    
    
    184,401
    
    
    
    175,653
    
    
    
    161,007
    
    
    
    158,584
    
    
    
    142,047Total liabilities
    
    
    734,274
    
    
    
    727,515
    
    
    
    702,689
    
    
    
    680,733
    
    
    
    643,031Minority interest in net assets of consolidated subsidiaries
    
    
    3,032
    
    
    
    3,068
    
    
    
    3,335
    
    
    
    3,295
    
    
    
    3,131STOCKHOLDERS EQUITYPreferred stock, Class A, 40 million shares, no par value;
10 million shares, no par value; none issued
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Dividend Equalization Preferred shares, no par value,
97 million shares issued and outstanding at June 30, 2008
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Non-Cumulative Perpetual Class A Preferred Stock, Series I,
$100,000 liquidation preference per share,
25,010 shares authorized
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Non-Cumulative Perpetual Class A Preferred Stock, Series J,
$1,000 liquidation preference per share, 92 million
depositary shares issued and outstanding at June 30, 2008
    
    
    2,300
    
    
    
    2,300
    
    
    
    2,300
    
    
    
    -
    
    
    
    -Non-Cumulative Perpetual Class A Preferred Stock, Series K,
$1,000 liquidation preference per share, 3.5 million
shares issued and outstanding at June 30, 2008
    
    
    3,500
    
    
    
    3,500
    
    
    
    -
    
    
    
    -
    
    
    
    -Non-Cumulative Perpetual Convertible Class A Preferred Stock,
Series L, $1,000 liquidation preference per share, 4.025 million
shares issued and outstanding at June 30, 2008
    
    
    4,025
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Common stock, $3.33-1/3 par value; authorized 3 billion
shares, outstanding 2.136 billion shares at June 30, 2008
    
    
    7,121
    
    
    
    6,551
    
    
    
    6,534
    
    
    
    6,283
    
    
    
    6,289Paid-in capital
    
    
    59,797
    
    
    
    56,367
    
    
    
    56,149
    
    
    
    51,938
    
    
    
    51,905Retained earnings
    
    
    1,534
    
    
    
    11,449
    
    
    
    13,456
    
    
    
    14,670
    
    
    
    14,335Accumulated
other comprehensive income (loss), net
    
    
    (3,150
    )
    
    
    (2,175
    )
    
    
    (1,567
    )
    
    
    (2,751
    )
    
    
    (3,263
    )Total stockholders equity
    
    
    75,127
    
    
    
    77,992
    
    
    
    76,872
    
    
    
    70,140
    
    
    
    69,266Total liabilities and stockholders equity
    
    $
    812,433
    
    
    
    808,575
    
    
    
    782,896
    
    
    
    754,168
    
    
    
    715,428
 79




---



##### 



WACHOVIA CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF INCOME
 
 2008
    
    
    2007Second
    
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second(In millions, except per share data)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterINTEREST INCOMEInterest and fees on loans
    
    $
    6,187
    
    
    
    7,577
    
    
    
    7,980
    
    
    
    7,937
    
    
    
    7,723Interest and dividends on securities
    
    
    1,530
    
    
    
    1,496
    
    
    
    1,616
    
    
    
    1,529
    
    
    
    1,474Trading account interest
    
    
    522
    
    
    
    571
    
    
    
    557
    
    
    
    566
    
    
    
    506Other interest income
    
    
    407
    
    
    
    535
    
    
    
    757
    
    
    
    799
    
    
    
    647Total interest income
    
    
    8,646
    
    
    
    10,179
    
    
    
    10,910
    
    
    
    10,831
    
    
    
    10,350INTEREST EXPENSEInterest on deposits
    
    
    2,176
    
    
    
    2,941
    
    
    
    3,433
    
    
    
    3,334
    
    
    
    3,180Interest on short-term borrowings
    
    
    418
    
    
    
    523
    
    
    
    673
    
    
    
    801
    
    
    
    706Interest on long-term debt
    
    
    1,762
    
    
    
    1,963
    
    
    
    2,174
    
    
    
    2,145
    
    
    
    2,015Total interest expense
    
    
    4,356
    
    
    
    5,427
    
    
    
    6,280
    
    
    
    6,280
    
    
    
    5,901Net interest income
    
    
    4,290
    
    
    
    4,752
    
    
    
    4,630
    
    
    
    4,551
    
    
    
    4,449Provision for credit losses
    
    
    5,567
    
    
    
    2,831
    
    
    
    1,497
    
    
    
    408
    
    
    
    179Net interest
income (loss) after provision for credit losses
    
    
    (1,277
    )
    
    
    1,921
    
    
    
    3,133
    
    
    
    4,143
    
    
    
    4,270FEE AND OTHER INCOMEService charges
    
    
    709
    
    
    
    676
    
    
    
    716
    
    
    
    689
    
    
    
    667Other banking fees
    
    
    518
    
    
    
    498
    
    
    
    497
    
    
    
    471
    
    
    
    449Commissions
    
    
    910
    
    
    
    914
    
    
    
    970
    
    
    
    600
    
    
    
    649Fiduciary and asset management fees
    
    
    1,355
    
    
    
    1,439
    
    
    
    1,436
    
    
    
    1,029
    
    
    
    1,015Advisory, underwriting and other investment banking fees
    
    
    280
    
    
    
    261
    
    
    
    249
    
    
    
    393
    
    
    
    454Trading account profits (losses)
    
    
    (510
    )
    
    
    (308
    )
    
    
    (524
    )
    
    
    (301
    )
    
    
    195Principal investing
    
    
    136
    
    
    
    446
    
    
    
    41
    
    
    
    372
    
    
    
    298Securities gains (losses)
    
    
    (808
    )
    
    
    (205
    )
    
    
    (320
    )
    
    
    (34
    )
    
    
    23Other income
    
    
    575
    
    
    
    (944
    )
    
    
    (321
    )
    
    
    (286
    )
    
    
    490Total fee and other income
    
    
    3,165
    
    
    
    2,777
    
    
    
    2,744
    
    
    
    2,933
    
    
    
    4,240NONINTEREST EXPENSESalaries and employee benefits
    
    
    3,435
    
    
    
    3,260
    
    
    
    3,468
    
    
    
    2,628
    
    
    
    3,122Occupancy
    
    
    377
    
    
    
    379
    
    
    
    375
    
    
    
    325
    
    
    
    331Equipment
    
    
    317
    
    
    
    323
    
    
    
    334
    
    
    
    283
    
    
    
    309Marketing
    
    
    95
    
    
    
    97
    
    
    
    80
    
    
    
    74
    
    
    
    78Communications and supplies
    
    
    184
    
    
    
    186
    
    
    
    191
    
    
    
    176
    
    
    
    178Professional and consulting fees
    
    
    218
    
    
    
    196
    
    
    
    271
    
    
    
    194
    
    
    
    205Goodwill impairment
    
    
    6,060
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Other intangible amortization
    
    
    97
    
    
    
    103
    
    
    
    111
    
    
    
    92
    
    
    
    103Merger-related and restructuring expenses
    
    
    251
    
    
    
    241
    
    
    
    187
    
    
    
    36
    
    
    
    32Sundry expense
    
    
    1,750
    
    
    
    656
    
    
    
    769
    
    
    
    717
    
    
    
    532Total noninterest expense
    
    
    12,784
    
    
    
    5,441
    
    
    
    5,786
    
    
    
    4,525
    
    
    
    4,890Minority
interest in income (loss) of consolidated subsidiaries
    
    
    (18
    )
    
    
    155
    
    
    
    107
    
    
    
    189
    
    
    
    139Income (loss) from continuing operations before income
taxes (benefits)
    
    
    (10,878
    )
    
    
    (898
    )
    
    
    (16
    )
    
    
    2,362
    
    
    
    3,481Income taxes (benefits)
    
    
    (1,963
    )
    
    
    (234
    )
    
    
    (209
    )
    
    
    656
    
    
    
    1,140Income (loss) from continuing operations
    
    
    (8,915
    )
    
    
    (664
    )
    
    
    193
    
    
    
    1,706
    
    
    
    2,341Discontinued operations, net of income taxes
    
    
    -
    
    
    
    -
    
    
    
    (142
    )
    
    
    (88
    )
    
    
    -Net income (loss)
    
    
    (8,915
    )
    
    
    (664
    )
    
    
    51
    
    
    
    1,618
    
    
    
    2,341Dividends on preferred stock
    
    
    193
    
    
    
    43
    
    
    
    -
    
    
    
    -
    
    
    
    -Net income (loss) available to common stockholders
    
    $
    (9,108
    )
    
    
    (707
    )
    
    
    51
    
    
    
    1,618
    
    
    
    2,341PER COMMON SHARE DATA (after preferred stock dividends)Basic earningsIncome (loss) from continuing operations
    
    $
    (4.31
    )
    
    
    (0.36
    )
    
    
    0.10
    
    
    
    0.91
    
    
    
    1.24Net income (loss) available to common stockholders
    
    
    (4.31
    )
    
    
    (0.36
    )
    
    
    0.03
    
    
    
    0.86
    
    
    
    1.24Diluted earnings (a)Income (loss) from continuing operations
    
    
    (4.31
    )
    
    
    (0.36
    )
    
    
    0.10
    
    
    
    0.90
    
    
    
    1.22Net income (loss) available to common stockholders
    
    
    (4.31
    )
    
    
    (0.36
    )
    
    
    0.03
    
    
    
    0.85
    
    
    
    1.22Cash dividends
    
    $
    0.38
    
    
    
    0.64
    
    
    
    0.64
    
    
    
    0.64
    
    
    
    0.56AVERAGE COMMON SHARESBasic
    
    
    2,111
    
    
    
    1,963
    
    
    
    1,959
    
    
    
    1,885
    
    
    
    1,891Diluted
    
    
    2,119
    
    
    
    1,977
    
    
    
    1,983
    
    
    
    1,910
    
    
    
    1,919
  80




---



##### 



WACHOVIA CORPORATION AND SUBSIDIARIES
 CONSOLIDATED FINANCIAL STATEMENTS
 Consolidated Balance Sheets  June 30, 2008 and December 31, 2007 (Unaudited)
    
    
    82Consolidated Statements of Income  Three and Six Months Ended June 30, 2008 and 2007 (Unaudited)
    
    
    83Consolidated Statements of Cash Flows  Six Months Ended June 30, 2008 and 2007 (Unaudited)
    
    
    84Notes to Consolidated Financial Statements (Unaudited)Note 1: Summary of Significant Accounting Policies and Other Matters
    
    
    85Note 2: Securities
    
    
    88Note 3: Goodwill Impairment
    
    
    90Note 4: Variable Interest Entities and Servicing Assets
    
    
    91Note 5: Share-Based Payments
    
    
    93Note
6: Comprehensive Income (Loss)
    
    
    95Note 7: Business Segments
    
    
    96Note 8: Basic and Diluted Earnings Per Common Share
    
    
    99Note 9: Income Taxes
    
    
    100Note 10: Derivatives
    
    
    101Note 11: Guarantees
    
    
    105Note 12: Fair Value Measurements and Fair Value Option
    
    
    106
 81




---



##### 



WACHOVIA CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS (Unaudited)
 June 30,
    
    
    December 31,(In millions, except per share data)
    
    2008
    
    
    2007ASSETSCash and due from banks
    
    $
    15,127
    
    
    
    15,124Interest-bearing bank balances
    
    
    10,289
    
    
    
    3,057Federal funds sold and securities purchased under
resale agreements
    
    
    21,923
    
    
    
    15,449Total cash and cash equivalents
    
    
    47,339
    
    
    
    33,630Trading account assets
    
    
    62,589
    
    
    
    55,882Securities
    
    
    113,461
    
    
    
    115,037Loans, net of unearned income (includes $18 at fair value at June 30, 2008)
    
    
    488,198
    
    
    
    461,954Allowance for loan losses
    
    
    (10,744
    )
    
    
    (4,507
    )Loans, net
    
    
    477,454
    
    
    
    457,447Loans held for sale (includes $3,350 at fair value at June 30, 2008)
    
    
    8,430
    
    
    
    16,772Premises and equipment
    
    
    6,667
    
    
    
    6,605Due from customers on acceptances
    
    
    1,302
    
    
    
    1,418Goodwill
    
    
    36,993
    
    
    
    43,122Other intangible assets
    
    
    1,942
    
    
    
    2,119Other assets
    
    
    56,256
    
    
    
    50,864Total assets
    
    $
    812,433
    
    
    
    782,896LIABILITIES AND STOCKHOLDERS EQUITYDepositsNoninterest-bearing deposits
    
    
    63,393
    
    
    
    60,893Interest-bearing deposits
    
    
    384,397
    
    
    
    388,236Total deposits
    
    
    447,790
    
    
    
    449,129Short-term borrowings
    
    
    55,448
    
    
    
    50,393Bank acceptances outstanding
    
    
    1,307
    
    
    
    1,424Trading account liabilities
    
    
    26,305
    
    
    
    21,585Other liabilities
    
    
    19,023
    
    
    
    19,151Long-term debt
    
    
    184,401
    
    
    
    161,007Total liabilities
    
    
    734,274
    
    
    
    702,689Minority interest in net assets of consolidated subsidiaries
    
    
    3,032
    
    
    
    3,335STOCKHOLDERS EQUITYPreferred stock, Class A, 40 million shares, no par value;
10 million shares, no par value; none issued
    
    
    -
    
    
    
    -Dividend Equalization Preferred shares, no par value,
97 million shares issued and outstanding at June 30, 2008
    
    
    -
    
    
    
    -Non-Cumulative Perpetual Class A Preferred Stock, Series I,
$100,000 liquidation preference per share, 25,010 shares authorized
    
    
    -
    
    
    
    -Non-Cumulative Perpetual Class A Preferred Stock, Series J,
$1,000 liquidation preference per share, 92 million
depositary shares issued and outstanding at June 30, 2008
    
    
    2,300
    
    
    
    2,300Non-Cumulative Perpetual Class A Preferred Stock, Series K,
$1,000 liquidation preference per share, 3.5 million
shares issued and outstanding at June 30, 2008
    
    
    3,500
    
    
    
    -Non-Cumulative Perpetual Convertible Class A Preferred Stock,
Series L, $1,000 liquidation preference per share, 4.025 million
shares issued and outstanding at June 30, 2008
    
    
    4,025
    
    
    
    -Common stock, $3.33-1/3 par value; authorized 3 billion
shares, outstanding 2.136 billion shares at June 30, 2008
    
    
    7,121
    
    
    
    6,534Paid-in capital
    
    
    59,797
    
    
    
    56,149Retained earnings
    
    
    1,534
    
    
    
    13,456Accumulated
other comprehensive income (loss), net
    
    
    (3,150
    )
    
    
    (1,567
    )Total stockholders equity
    
    
    75,127
    
    
    
    76,872Total liabilities and stockholders equity
    
    $
    812,433
    
    
    
    782,896
  82




---



##### 



WACHOVIA CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(In millions, except per share data)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007INTEREST INCOMEInterest and fees on loans
    
    $
    6,187
    
    
    
    7,723
    
    
    
    13,764
    
    
    
    15,341Interest and dividends on securities
    
    
    1,530
    
    
    
    1,474
    
    
    
    3,026
    
    
    
    2,952Trading account interest
    
    
    522
    
    
    
    506
    
    
    
    1,093
    
    
    
    939Other interest income
    
    
    407
    
    
    
    647
    
    
    
    942
    
    
    
    1,258Total interest income
    
    
    8,646
    
    
    
    10,350
    
    
    
    18,825
    
    
    
    20,490INTEREST EXPENSEInterest on deposits
    
    
    2,176
    
    
    
    3,180
    
    
    
    5,117
    
    
    
    6,194Interest on short-term borrowings
    
    
    418
    
    
    
    706
    
    
    
    941
    
    
    
    1,375Interest on long-term debt
    
    
    1,762
    
    
    
    2,015
    
    
    
    3,725
    
    
    
    3,972Total interest expense
    
    
    4,356
    
    
    
    5,901
    
    
    
    9,783
    
    
    
    11,541Net interest income
    
    
    4,290
    
    
    
    4,449
    
    
    
    9,042
    
    
    
    8,949Provision for credit losses
    
    
    5,567
    
    
    
    179
    
    
    
    8,398
    
    
    
    356Net interest
income (loss) after provision for credit losses
    
    
    (1,277
    )
    
    
    4,270
    
    
    
    644
    
    
    
    8,593FEE AND OTHER INCOMEService charges
    
    
    709
    
    
    
    667
    
    
    
    1,385
    
    
    
    1,281Other banking fees
    
    
    518
    
    
    
    449
    
    
    
    1,016
    
    
    
    865Commissions
    
    
    910
    
    
    
    649
    
    
    
    1,824
    
    
    
    1,308Fiduciary and asset management fees
    
    
    1,355
    
    
    
    1,015
    
    
    
    2,794
    
    
    
    1,968Advisory, underwriting and other investment banking fees
    
    
    280
    
    
    
    454
    
    
    
    541
    
    
    
    861Trading account profits (losses)
    
    
    (510
    )
    
    
    195
    
    
    
    (818
    )
    
    
    323Principal investing
    
    
    136
    
    
    
    298
    
    
    
    582
    
    
    
    346Securities gains (losses)
    
    
    (808
    )
    
    
    23
    
    
    
    (1,013
    )
    
    
    76Other income
    
    
    575
    
    
    
    490
    
    
    
    (369
    )
    
    
    946Total fee and other income
    
    
    3,165
    
    
    
    4,240
    
    
    
    5,942
    
    
    
    7,974NONINTEREST EXPENSESalaries and employee benefits
    
    
    3,435
    
    
    
    3,122
    
    
    
    6,695
    
    
    
    6,094Occupancy
    
    
    377
    
    
    
    331
    
    
    
    756
    
    
    
    643Equipment
    
    
    317
    
    
    
    309
    
    
    
    640
    
    
    
    616Marketing
    
    
    95
    
    
    
    78
    
    
    
    192
    
    
    
    140Communications and supplies
    
    
    184
    
    
    
    178
    
    
    
    370
    
    
    
    351Professional and consulting fees
    
    
    218
    
    
    
    205
    
    
    
    414
    
    
    
    382Goodwill impairment
    
    
    6,060
    
    
    
    -
    
    
    
    6,060
    
    
    
    -Other intangible amortization
    
    
    97
    
    
    
    103
    
    
    
    200
    
    
    
    221Merger-related and restructuring expenses
    
    
    251
    
    
    
    32
    
    
    
    492
    
    
    
    42Sundry expense
    
    
    1,750
    
    
    
    532
    
    
    
    2,406
    
    
    
    1,022Total noninterest expense
    
    
    12,784
    
    
    
    4,890
    
    
    
    18,225
    
    
    
    9,511Minority
interest in income (loss) of consolidated subsidiaries
    
    
    (18
    )
    
    
    139
    
    
    
    137
    
    
    
    275Income (loss) before income taxes (benefits)
    
    
    (10,878
    )
    
    
    3,481
    
    
    
    (11,776
    )
    
    
    6,781Income taxes (benefits)
    
    
    (1,963
    )
    
    
    1,140
    
    
    
    (2,197
    )
    
    
    2,138Net income (loss)
    
    
    (8,915
    )
    
    
    2,341
    
    
    
    (9,579
    )
    
    
    4,643Dividends on preferred stock
    
    
    193
    
    
    
    -
    
    
    
    236
    
    
    
    -Net income (loss) available to common stockholders
    
    $
    (9,108
    )
    
    
    2,341
    
    
    
    (9,815
    )
    
    
    4,643PER COMMON SHARE DATABasic earningsNet income (loss) available to common stockholders
    
    $
    (4.31
    )
    
    
    1.24
    
    
    
    (4.82
    )
    
    
    2.45Diluted earningsNet income (loss) available to common stockholders
    
    
    (4.31
    )
    
    
    1.22
    
    
    
    (4.82
    )
    
    
    2.42Cash dividends
    
    $
    0.38
    
    
    
    0.56
    
    
    
    1.02
    
    
    
    1.12AVERAGE COMMON SHARESBasic
    
    
    2,111
    
    
    
    1,891
    
    
    
    2,037
    
    
    
    1,892Diluted
    
    
    2,119
    
    
    
    1,919
    
    
    
    2,048
    
    
    
    1,922
  83




---



##### 



WACHOVIA CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
 Six Months EndedJune 30,(In millions)
    
    2008
    
    
    2007OPERATING ACTIVITIESNet income (loss)
    
    $
    (9,579
    )
    
    
    4,643Adjustments
to reconcile net income to net cash provided (used) by operating
activities 
Accretion and amortization of securities discounts and premiums, net
    
    
    81
    
    
    
    (34
    )Provision for credit losses
    
    
    8,398
    
    
    
    356Gain on securitization transactions
    
    
    (33
    )
    
    
    (58
    )Gain on sale of mortgage servicing rights
    
    
    (1
    )
    
    
    (3
    )Securities transactions
    
    
    1,013
    
    
    
    (76
    )Goodwill impairment
    
    
    6,060
    
    
    
    -Depreciation and other amortization
    
    
    1,034
    
    
    
    961Trading account assets, net
    
    
    100
    
    
    
    (6,799
    )Loss (gain) on sales of premises and equipment
    
    
    18
    
    
    
    (4
    )Valuation losses on bank-owned separate account life insurance
    
    
    314
    
    
    
    -Contribution to qualified pension plan
    
    
    -
    
    
    
    (270
    )Income tax shortfall (excess income tax benefit) from share-based payment arrangements
    
    
    19
    
    
    
    (61
    )Loans held for sale, net
    
    
    (3,967
    )
    
    
    (5,416
    )Deferred interest on certain loans
    
    
    (796
    )
    
    
    (722
    )Other assets, net
    
    
    (3,722
    )
    
    
    1,214Trading account liabilities, net
    
    
    4,720
    
    
    
    1,091Other liabilities, net
    
    
    (606
    )
    
    
    (1,392
    )Net cash provided (used) by operating activities
    
    
    3,053
    
    
    
    (6,570
    )INVESTING ACTIVITIESIncrease (decrease) in cash realized fromSales of securities
    
    
    13,430
    
    
    
    3,852Maturities of securities
    
    
    21,416
    
    
    
    9,882Purchases of securities
    
    
    (38,012
    )
    
    
    (11,868
    )Origination of loans, net
    
    
    (21,113
    )
    
    
    (9,370
    )Sales of premises and equipment
    
    
    132
    
    
    
    131Purchases of premises and equipment
    
    
    (754
    )
    
    
    (498
    )Goodwill and other intangible assets
    
    
    46
    
    
    
    (441
    )Purchase of bank-owned separate account life insurance, net
    
    
    (665
    )
    
    
    (499
    )Net cash used by investing activities
    
    
    (25,520
    )
    
    
    (8,811
    )FINANCING ACTIVITIESIncrease (decrease) in cash realized fromIncrease (decrease) in deposits, net
    
    
    (1,339
    )
    
    
    2,572Securities sold under repurchase agreements and other short-term borrowings, net
    
    
    5,055
    
    
    
    3,558Issuances of long-term debt
    
    
    45,162
    
    
    
    23,477Payments of long-term debt
    
    
    (21,768
    )
    
    
    (20,024
    )Issuances of preferred shares
    
    
    7,472
    
    
    
    -Issuances of common stock, net
    
    
    3,951
    
    
    
    267Purchases of common stock
    
    
    (20
    )
    
    
    (1,007
    )(Income tax shortfall) excess income tax benefit from share-based payment arrangements
    
    
    (19
    )
    
    
    61Cash dividends paid
    
    
    (2,318
    )
    
    
    (2,137
    )Net cash provided by financing activities
    
    
    36,176
    
    
    
    6,767Increase (decrease) in cash and cash equivalents
    
    
    13,709
    
    
    
    (8,614
    )Cash and cash equivalents, beginning of year
    
    
    33,630
    
    
    
    34,916Cash and cash equivalents, end of period
    
    $
    47,339
    
    
    
    26,302NONCASH ITEMSTransfer to securities from loans resulting from securitizations
    
    $
    -
    
    
    
    1,119Transfer to securities from loans held for sale resulting from securitizations
    
    
    5,881
    
    
    
    -Transfer to trading account assets from securities
    
    
    6,807
    
    
    
    -Transfer to loans from loans held for sale
    
    
    6,428
    
    
    
    251Cumulative effect of accounting changes, net of income taxes
    
    $
    (24
    )

    
    
    (1,447
    )
  84




---



##### 



WACHOVIA CORPORATION AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
 
 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER MATTERS
 GENERAL
    PERSONNEL EXPENSE AND RETIREMENT BENEFITS
   Other PostretirementQualified Pension
    
    
    Nonqualified Pension
    
    
    BenefitsSix Months Ended
    
    
    Six Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,
    
    
    June 30,(In millions)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007RETIREMENT BENEFIT COSTS (CREDITS)Service cost
    
    $
    86
    
    
    
    92
    
    
    
    -
    
    
    
    1
    
    
    
    1
    
    
    
    2Interest cost
    
    
    129
    
    
    
    132
    
    
    
    10
    
    
    
    11
    
    
    
    23
    
    
    
    22Expected return on plan assets
    
    
    (259
    )
    
    
    (246
    )
    
    
    -
    
    
    
    -
    
    
    
    (1
    )
    
    
    (1
    )Amortization of prior service cost
    
    
    (23
    )
    
    
    (13
    )
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    (4
    )Amortization of actuarial losses
    
    
    38
    
    
    
    60
    
    
    
    2
    
    
    
    4
    
    
    
    -
    
    
    
    -Net retirement benefit costs (credits)
    
    $
    (29
    )

    
    
    25
    
    
    
    12
    
    
    
    16
    
    
    
    23
    
    
    
    19
 SALE-IN, LEASE-OUT TRANSACTIONS
  85




---



##### 



GOODWILL
       OTHER
   PREFERRED STOCK
   DISCONTINUED OPERATIONS
  86




---



##### 



NEW ACCOUNTING PRONOUNCEMENTS
   RECLASSIFICATIONS
  SUBSEQUENT EVENT
  87




---



##### 



NOTE 2: SECURITIES
 June 30, 2008Average1 Year
    
    
    1-5
    
    
    5-10
    
    
    After 10
    
    
    
    
    
    
    Gross Unrealized
    
    
    Amortized
    
    
    Maturity(In millions)
    
    or Less
    
    
    Years
    
    
    Years
    
    
    Years
    
    
    Total
    
    
    Gains
    
    
    Losses
    
    
    Cost
    
    
    in YearsMARKET VALUEU.S. Treasury
    
    $
    322
    
    
    
    185
    
    
    
    170
    
    
    
    40
    
    
    
    717
    
    
    
    15
    
    
    
    -
    
    
    
    702
    
    
    
    3.06Mortgage-backed
securities
    
    
    128
    
    
    
    18,138
    
    
    
    45,779
    
    
    
    40
    
    
    
    64,085
    
    
    
    332
    
    
    
    979
    
    
    
    64,732
    
    
    
    6.40Asset-backedResidual interests
from
securitizations
    
    
    17
    
    
    
    217
    
    
    
    132
    
    
    
    8
    
    
    
    374
    
    
    
    78
    
    
    
    9
    
    
    
    305
    
    
    
    4.18Retained bonds
from
securitizations
    
    
    1,386
    
    
    
    143
    
    
    
    56
    
    
    
    -
    
    
    
    1,585
    
    
    
    1
    
    
    
    74
    
    
    
    1,658
    
    
    
    1.34Collateralized
mortgage
obligations
    
    
    650
    
    
    
    14,308
    
    
    
    4,548
    
    
    
    140
    
    
    
    19,646
    
    
    
    72
    
    
    
    1,683
    
    
    
    21,257
    
    
    
    4.26Commercial
mortgage-backed
    
    
    257
    
    
    
    1,082
    
    
    
    1,174
    
    
    
    27
    
    
    
    2,540
    
    
    
    42
    
    
    
    126
    
    
    
    2,624
    
    
    
    4.58Other
    
    
    489
    
    
    
    3,698
    
    
    
    394
    
    
    
    227
    
    
    
    4,808
    
    
    
    7
    
    
    
    679
    
    
    
    5,480
    
    
    
    3.86State, county and
municipal
    
    
    62
    
    
    
    678
    
    
    
    543
    
    
    
    2,590
    
    
    
    3,873
    
    
    
    113
    
    
    
    64
    
    
    
    3,824
    
    
    
    13.61Sundry
    
    
    1,551
    
    
    
    2,241
    
    
    
    4,942
    
    
    
    7,099
    
    
    
    15,833
    
    
    
    147
    
    
    
    1,205
    
    
    
    16,891
    
    
    
    9.36Total market
value
    
    $
    4,862
    
    
    
    40,690
    
    
    
    57,738
    
    
    
    10,171
    
    
    
    113,461
    
    
    
    807
    
    
    
    4,819
    
    
    
    117,473
    
    
    
    6.38MARKET VALUEDebt securities
    
    $
    4,862
    
    
    
    40,690
    
    
    
    57,738
    
    
    
    8,618
    
    
    
    111,908
    
    
    
    667
    
    
    
    4,791
    
    
    
    116,032Equity securities
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    1,553
    
    
    
    1,553
    
    
    
    140
    
    
    
    28
    
    
    
    1,441Total market
value
    
    $
    4,862
    
    
    
    40,690
    
    
    
    57,738
    
    
    
    10,171
    
    
    
    113,461
    
    
    
    807
    
    
    
    4,819
    
    
    
    117,473AMORTIZED COSTDebt securities
    
    $
    4,873
    
    
    
    42,439
    
    
    
    59,346
    
    
    
    9,374
    
    
    
    116,032Equity securities
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    1,441
    
    
    
    1,441Total
amortized
cost
    
    $
    4,873
    
    
    
    42,439
    
    
    
    59,346
    
    
    
    10,815
    
    
    
    117,473WEIGHTED AVERAGE
YIELDU.S. Treasury
    
    
    1.58
    %
    
    
    1.96
    
    
    
    2.70
    
    
    
    4.87
    
    
    
    2.12Mortgage-backed
securities
    
    
    3.67
    
    
    
    5.44
    
    
    
    5.34
    
    
    
    5.32
    
    
    
    5.36Asset-backedResidual interests
from
securitizations
    
    
    126.45
    
    
    
    21.55
    
    
    
    18.20
    
    
    
    -
    
    
    
    22.28Retained bonds
from
securitizations
    
    
    3.12
    
    
    
    6.02
    
    
    
    7.02
    
    
    
    -
    
    
    
    3.65Collateralized
mortgage
obligations
    
    
    4.72
    
    
    
    6.22
    
    
    
    6.09
    
    
    
    6.34
    
    
    
    6.15Commercial
mortgage-backed
    
    
    6.39
    
    
    
    7.42
    
    
    
    4.98
    
    
    
    11.37
    
    
    
    6.19Other
    
    
    4.29
    
    
    
    4.67
    
    
    
    4.96
    
    
    
    4.66
    
    
    
    4.66State, county and
municipal
    
    
    6.57
    
    
    
    5.58
    
    
    
    5.17
    
    
    
    4.87
    
    
    
    5.06Sundry
    
    
    2.88
    
    
    
    4.82
    
    
    
    4.78
    
    
    
    4.86
    
    
    
    4.64Consolidated
    
    
    3.69
    %
    
    
    5.72
    
    
    
    5.35
    
    
    
    4.89
    
    
    
    5.38
 88




---



##### 



Six Months EndedJune 30,(In millions)
    
    2008
    
    
    2007Debt securities
    
    $Gross gains
    
    
    79
    
    
    
    72Gross losses (a)
    
    
    (950
    )
    
    
    (41
    )Net gains (losses) on sales of debt securities
    
    
    (871
    )
    
    
    31Equity securitiesGross gains
    
    
    248
    
    
    
    46Gross losses (b)
    
    
    (390
    )
    
    
    (1
    )Net gains
(losses) on sales of equity securities
    
    
    (142
    )
    
    
    45Total securities gains (losses)
    
    $
    (1,013
    )
    
    
    76
   89




---



##### 



NOTE 3: GOODWILL IMPAIRMENT
  General Bank
    
    
    Corporate and Investment Bank
    
    
    All OtherRetail and
    
    
    Corporate
    
    
    Investment
    
    
    Reporting(In millions)
    
    Commercial
    
    
    Small Business
    
    
    Lending
    
    
    Banking
    
    
    Units
    
    
    TotalAssigned goodwill
    
    $
    7,083
    
    
    
    23,976
    
    
    
    2,937
    
    
    
    597
    
    
    
    8,460
    
    
    
    43,053Impairment
    
    
    (2,526
    )
    
    
    -
    
    
    
    (2,937
    )
    
    
    (597
    )
    
    
    -
    
    
    
    (6,060
    )Remaining goodwill
    
    $
    4,557
    
    
    
    23,976
    
    
    
    -
    
    
    
    -
    
    
    
    8,460
    
    
    
    36,993
  90




---



##### 



NOTE 4: VARIABLE INTEREST ENTITIES AND SERVICING ASSETS
 VARIABLE INTEREST ENTITIES
      SERVICING ASSETS
    91




---



##### 



Six Months Ended June 30, 2008Fair Value
    
    
    Amortized CostFixed RateOriginated
    
    
    CommercialResidential
    
    
    Mortgage-(In millions)
    
    Mortgages
    
    
    Backed
    
    
    Other
    
    
    TotalBalance, December 31, 2007
    
    $
    437
    
    
    
    771
    
    
    
    240
    
    
    
    1,448Fair value of servicing assets purchased, assumed or
originated, or retained from securitizations
    
    
    184
    
    
    
    21
    
    
    
    38
    
    
    
    243Servicing sold or otherwise disposed of
    
    
    (9
    )
    
    
    -
    
    
    
    -
    
    
    
    (9
    )Change in fair value due to changes in model inputs
and/or assumptions
    
    
    35
    
    
    
    -
    
    
    
    -
    
    
    
    35Other changes in fair value, primarily from fees earned
    
    
    (46
    )
    
    
    -
    
    
    
    -
    
    
    
    (46
    )Amortization of servicing assets
    
    
    -
    
    
    
    (72
    )
    
    
    (26
    )
    
    
    (98
    )Impairment
    
    
    -
    
    
    
    (1
    )
    
    
    -
    
    
    
    (1
    )Balance, June 30, 2008
    
    $
    601
    
    
    
    719
    
    
    
    252
    
    
    
    1,572FAIR VALUEJune 30, 2008
    
    $
    601
    
    
    
    949
    
    
    
    289
    
    
    
    1,839December 31, 2007
    
    $
    437
    
    
    
    991
    
    
    
    261
    
    
    
    1,689
 92




---



##### 



NOTE 5: SHARE-BASED PAYMENTS
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(In millions)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Employee stock compensation expenseRestricted stock awards
    
    $
    97
    
    
    
    93
    
    
    
    293
    
    
    
    264Stock option awards
    
    
    22
    
    
    
    27
    
    
    
    75
    
    
    
    68Total employee stock compensation expense
    
    
    119
    
    
    
    120
    
    
    
    368
    
    
    
    332Related income tax benefit
    
    
    42
    
    
    
    42
    
    
    
    129
    
    
    
    116Retirement-eligible portion of total employee stock compensation expense
    
    $
    -
    
    
    
    -
    
    
    
    109
    
    
    
    93
   June 30,(Dollars in millions)
    
    2008
    
    
    2007Unrecognized compensation costRestricted stock
    
    $
    572
    
    
    
    639Stock options
    
    $
    139
    
    
    
    196Weighted average period for cost recognition
    
    1.4
    yrs
    
    
    1.4
 Six Months EndedJune 30,(In millions)
    
    2008
    
    
    2007Fair value of restricted stock vested
    
    $
    259
    
    
    
    323Intrinsic value of stock option awards exercised
    
    
    35
    
    
    
    259Cash received from the exercise of stock options granted
    
    
    65
    
    
    
    350Income tax benefit realized from stock options exercised
    
    $
    11
    
    
    
    78
   93




---



##### 



June 30, 2008Weighted-Average(Options and shares in thousands)
    
    Number
    
    
    Price (a)STOCK OPTIONSOptions outstanding, beginning of period
    
    
    128,971
    
    
    $
    41.09Granted
    
    
    10,653
    
    
    
    35.65Exercised
    
    
    (3,003
    )
    
    
    22.10Expired
    
    
    (5,803
    )
    
    
    53.35Forfeited
    
    
    (482
    )
    
    
    43.50Options outstanding, end of period
    
    
    130,336
    
    
    $
    40.52Options vested and expected to vest, end of period
    
    
    128,484
    
    
    $
    40.46Options exercisable, end of period
    
    
    105,567
    
    
    $
    39.17RESTRICTED STOCKUnvested shares, beginning of period
    
    
    19,914
    
    
    $
    54.18Granted
    
    
    11,473
    
    
    
    34.48Vested
    
    
    (8,247
    )
    
    
    53.35Forfeited
    
    
    (539
    )
    
    
    47.10Unvested shares, end of period
    
    
    22,601
    
    
    $
    44.23
  94




---



##### 



NOTE 6:
COMPREHENSIVE INCOME (LOSS)
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(In millions)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007COMPREHENSIVE
INCOME (LOSS)Net income (loss)
    
    $
    (8,915
    )
    
    
    2,341
    
    
    
    (9,579
    )
    
    
    4,643OTHER
COMPREHENSIVE INCOME (LOSS)Unamortized gains under employee benefit plans
    
    
    5
    
    
    
    31
    
    
    
    11
    
    
    
    31Net unrealized losses on debt and equity securities
    
    
    (1,112
    )
    
    
    (1,284
    )
    
    
    (1,817
    )
    
    
    (1,183
    )Net unrealized gains (losses)
on derivative financial
instruments
    
    
    132
    
    
    
    (76
    )
    
    
    223
    
    
    
    (11
    )Total
comprehensive income (loss)
    
    $
    (9,890
    )
    
    
    1,012
    
    
    
    (11,162
    )
    
    
    3,480
 95




---



##### 



NOTE 7: BUSINESS SEGMENTS
   Three Months Ended June 30, 2008GoodwillImpairment,Corporate
    
    
    
    
    
    
    
    
    
    
    Net Merger-and
    
    
    
    
    
    
    
    
    
    
    Related andGeneral
    
    
    Wealth
    
    
    Investment
    
    
    Capital
    
    
    
    
    
    
    Restructuring(Dollars in millions)
    
    Bank
    
    
    Management
    
    
    Bank
    
    
    Management
    
    
    Parent
    
    
    Expenses (b)
    
    
    ConsolidatedCONSOLIDATEDNet interest income (a)
    
    $
    3,671
    
    
    
    202
    
    
    
    1,124
    
    
    
    308
    
    
    
    (961
    )
    
    
    (54
    )
    
    
    4,290Fee and other income
    
    
    1,000
    
    
    
    207
    
    
    
    657
    
    
    
    1,995
    
    
    
    (694
    )
    
    
    -
    
    
    
    3,165Intersegment revenue
    
    
    57
    
    
    
    3
    
    
    
    (52
    )
    
    
    (8
    )
    
    
    -
    
    
    
    -
    
    
    
    -Total revenue (a)
    
    
    4,728
    
    
    
    412
    
    
    
    1,729
    
    
    
    2,295
    
    
    
    (1,655
    )
    
    
    (54
    )
    
    
    7,455Provision for credit losses
    
    
    919
    
    
    
    8
    
    
    
    438
    
    
    
    -
    
    
    
    4,202
    
    
    
    -
    
    
    
    5,567Noninterest expense
    
    
    2,050
    
    
    
    253
    
    
    
    960
    
    
    
    2,327
    
    
    
    883
    
    
    
    6,311
    
    
    
    12,784Minority interest
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    26
    
    
    
    (44
    )
    
    
    (18
    )Income taxes (benefits)
    
    
    632
    
    
    
    53
    
    
    
    103
    
    
    
    (12
    )
    
    
    (2,657
    )
    
    
    (82
    )
    
    
    (1,963
    )Tax-equivalent adjustment
    
    
    10
    
    
    
    -
    
    
    
    19
    
    
    
    1
    
    
    
    24
    
    
    
    (54
    )
    
    
    -Net income (loss)
    
    
    1,117
    
    
    
    98
    
    
    
    209
    
    
    
    (21
    )
    
    
    (4,133
    )
    
    
    (6,185
    )
    
    
    (8,915
    )Dividends on preferred stock
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    193
    
    
    
    -
    
    
    
    193Net income (loss) available to
common stockholders
    
    $
    1,117
    
    
    
    98
    
    
    
    209
    
    
    
    (21
    )
    
    
    (4,326
    )
    
    
    (6,185
    )
    
    
    (9,108
    )Lending commitments
    
    $
    133,201
    
    
    
    6,915
    
    
    
    113,559
    
    
    
    1,544
    
    
    
    543
    
    
    
    -
    
    
    
    255,762Average loans, net
    
    
    319,574
    
    
    
    23,151
    
    
    
    106,642
    
    
    
    2,881
    
    
    
    24,486
    
    
    
    -
    
    
    
    476,734Average core deposits
    
    $
    290,381
    
    
    
    17,559
    
    
    
    31,682
    
    
    
    48,647
    
    
    
    2,401
    
    
    
    -
    
    
    
    390,670
 96




---



##### 



Three Months Ended June 30, 2007Corporate
    
    
    
    
    
    
    
    
    
    
    Net Merger-and
    
    
    
    
    
    
    
    
    
    
    Related andGeneral
    
    
    Wealth
    
    
    Investment
    
    
    Capital
    
    
    
    
    
    
    Restructuring(Dollars in millions)
    
    Bank
    
    
    Management
    
    
    Bank
    
    
    Management
    
    
    Parent
    
    
    Expenses (b)
    
    
    ConsolidatedCONSOLIDATEDNet interest income (a)
    
    $
    3,372
    
    
    
    182
    
    
    
    773
    
    
    
    260
    
    
    
    (100
    )
    
    
    (38
    )
    
    
    4,449Fee and other income
    
    
    935
    
    
    
    202
    
    
    
    1,522
    
    
    
    1,536
    
    
    
    45
    
    
    
    -
    
    
    
    4,240Intersegment revenue
    
    
    56
    
    
    
    3
    
    
    
    (50
    )
    
    
    (11
    )
    
    
    2
    
    
    
    -
    
    
    
    -Total revenue (a)
    
    
    4,363
    
    
    
    387
    
    
    
    2,245
    
    
    
    1,785
    
    
    
    (53
    )
    
    
    (38
    )
    
    
    8,689Provision for credit losses
    
    
    154
    
    
    
    2
    
    
    
    (2
    )
    
    
    -
    
    
    
    25
    
    
    
    -
    
    
    
    179Noninterest expense
    
    
    1,922
    
    
    
    244
    
    
    
    1,020
    
    
    
    1,294
    
    
    
    378
    
    
    
    32
    
    
    
    4,890Minority interest
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    139
    
    
    
    -
    
    
    
    139Income taxes (benefits)
    
    
    824
    
    
    
    51
    
    
    
    437
    
    
    
    179
    
    
    
    (339
    )
    
    
    (12
    )
    
    
    1,140Tax-equivalent adjustment
    
    
    10
    
    
    
    -
    
    
    
    11
    
    
    
    -
    
    
    
    17
    
    
    
    (38
    )
    
    
    -Net income (loss)
    
    $
    1,453
    
    
    
    90
    
    
    
    779
    
    
    
    312
    
    
    
    (273
    )
    
    
    (20
    )
    
    
    2,341Lending commitments
    
    $
    129,851
    
    
    
    6,892
    
    
    
    115,430
    
    
    
    1,169
    
    
    
    569
    
    
    
    -
    
    
    
    253,911Average loans, net
    
    
    291,607
    
    
    
    21,056
    
    
    
    76,744
    
    
    
    1,663
    
    
    
    30,187
    
    
    
    -
    
    
    
    421,257Average core deposits
    
    $
    290,455
    
    
    
    17,466
    
    
    
    36,713
    
    
    
    31,221
    
    
    
    2,641
    
    
    
    -
    
    
    
    378,496
 Six Months Ended June 30, 2008GoodwillImpairment,Corporate
    
    
    
    
    
    
    
    
    
    
    Net Merger-and
    
    
    
    
    
    
    
    
    
    
    Related andGeneral
    
    
    Wealth
    
    
    Investment
    
    
    Capital
    
    
    
    
    
    
    Restructuring(Dollars in millions)
    
    Bank
    
    
    Management
    
    
    Bank
    
    
    Management
    
    
    Parent
    
    
    Expenses (b)
    
    
    ConsolidatedCONSOLIDATEDNet interest income (a)
    
    $
    7,116
    
    
    
    384
    
    
    
    2,152
    
    
    
    589
    
    
    
    (1,092
    )
    
    
    (107
    )
    
    
    9,042Fee and other income
    
    
    1,980
    
    
    
    418
    
    
    
    499
    
    
    
    4,186
    
    
    
    (1,141
    )
    
    
    -
    
    
    
    5,942Intersegment revenue
    
    
    112
    
    
    
    8
    
    
    
    (102
    )
    
    
    (18
    )
    
    
    -
    
    
    
    -
    
    
    
    -Total revenue (a)
    
    
    9,208
    
    
    
    810
    
    
    
    2,549
    
    
    
    4,757
    
    
    
    (2,233
    )
    
    
    (107
    )
    
    
    14,984Provision for credit losses
    
    
    1,488
    
    
    
    13
    
    
    
    635
    
    
    
    -
    
    
    
    6,262
    
    
    
    -
    
    
    
    8,398Noninterest expense
    
    
    4,088
    
    
    
    499
    
    
    
    1,707
    
    
    
    4,182
    
    
    
    1,197
    
    
    
    6,552
    
    
    
    18,225Minority interest
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    224
    
    
    
    (87
    )
    
    
    137Income taxes (benefits)
    
    
    1,305
    
    
    
    108
    
    
    
    36
    
    
    
    208
    
    
    
    (3,697
    )
    
    
    (157
    )
    
    
    (2,197
    )Tax-equivalent adjustment
    
    
    21
    
    
    
    -
    
    
    
    40
    
    
    
    2
    
    
    
    44
    
    
    
    (107
    )
    
    
    -Net income (loss)
    
    
    2,306
    
    
    
    190
    
    
    
    131
    
    
    
    365
    
    
    
    (6,263
    )
    
    
    (6,308
    )
    
    
    (9,579
    )Dividends on preferred stock
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    236
    
    
    
    -
    
    
    
    236Net income
(loss) available to
common stockholders
    
    $
    2,306
    
    
    
    190
    
    
    
    131
    
    
    
    365
    
    
    
    (6,499
    )
    
    
    (6,308
    )
    
    
    (9,815
    )Lending commitments
    
    $
    133,201
    
    
    
    6,915
    
    
    
    113,559
    
    
    
    1,544
    
    
    
    543
    
    
    
    -
    
    
    
    255,762Average loans, net
    
    
    315,565
    
    
    
    22,758
    
    
    
    103,844
    
    
    
    2,722
    
    
    
    26,446
    
    
    
    -
    
    
    
    471,335Average core deposits
    
    $
    293,776
    
    
    
    17,732
    
    
    
    32,652
    
    
    
    45,866
    
    
    
    2,565
    
    
    
    -
    
    
    
    392,591
 97




---



##### 



Six Months Ended June 30, 2007Corporate
    
    
    
    
    
    
    
    
    
    
    Net Merger-and
    
    
    
    
    
    
    
    
    
    
    Related andGeneral
    
    
    Wealth
    
    
    Investment
    
    
    Capital
    
    
    
    
    
    
    Restructuring(Dollars in millions)
    
    Bank
    
    
    Management
    
    
    Bank
    
    
    Management
    
    
    Parent
    
    
    Expenses (b)
    
    
    ConsolidatedCONSOLIDATEDNet interest income (a)
    
    $
    6,770
    
    
    
    362
    
    
    
    1,489
    
    
    
    519
    
    
    
    (116
    )
    
    
    (75
    )
    
    
    8,949Fee and other income
    
    
    1,781
    
    
    
    398
    
    
    
    2,631
    
    
    
    3,013
    
    
    
    151
    
    
    
    -
    
    
    
    7,974Intersegment revenue
    
    
    102
    
    
    
    6
    
    
    
    (93
    )
    
    
    (19
    )
    
    
    4
    
    
    
    -
    
    
    
    -Total revenue (a)
    
    
    8,653
    
    
    
    766
    
    
    
    4,027
    
    
    
    3,513
    
    
    
    39
    
    
    
    (75
    )
    
    
    16,923Provision for credit losses
    
    
    301
    
    
    
    3
    
    
    
    4
    
    
    
    -
    
    
    
    48
    
    
    
    -
    
    
    
    356Noninterest expense
    
    
    3,787
    
    
    
    491
    
    
    
    1,931
    
    
    
    2,531
    
    
    
    729
    
    
    
    42
    
    
    
    9,511Minority interest
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    275
    
    
    
    -
    
    
    
    275Income taxes (benefits)
    
    
    1,644
    
    
    
    99
    
    
    
    742
    
    
    
    358
    
    
    
    (689
    )
    
    
    (16
    )
    
    
    2,138Tax-equivalent adjustment
    
    
    21
    
    
    
    -
    
    
    
    21
    
    
    
    -
    
    
    
    33
    
    
    
    (75
    )
    
    
    -Net income (loss)
    
    $
    2,900
    
    
    
    173
    
    
    
    1,329
    
    
    
    624
    
    
    
    (357
    )
    
    
    (26
    )
    
    
    4,643Lending commitments
    
    $
    129,851
    
    
    
    6,892
    
    
    
    115,430
    
    
    
    1,169
    
    
    
    569
    
    
    
    -
    
    
    
    253,911Average loans, net
    
    
    289,985
    
    
    
    20,689
    
    
    
    75,065
    
    
    
    1,609
    
    
    
    30,927
    
    
    
    -
    
    
    
    418,275Average core deposits
    
    $
    287,263
    
    
    
    17,368
    
    
    
    35,481
    
    
    
    31,450
    
    
    
    2,346
    
    
    
    -
    
    
    
    373,908
   98




---



##### 



NOTE 8: BASIC AND DILUTED EARNINGS PER COMMON SHARE
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(In millions, except per share data)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Net income (loss)
    
    $
    (8,915
    )
    
    
    2,341
    
    
    
    (9,579
    )
    
    
    4,643Dividends on preferred stock
    
    
    193
    
    
    
    -
    
    
    
    236
    
    
    
    -Net income (loss) available to common stockholders
    
    $
    (9,108
    )
    
    
    2,341
    
    
    
    (9,815
    )
    
    
    4,643Basic earnings (loss) per common share
    
    $
    (4.31
    )
    
    
    1.24
    
    
    
    (4.82
    )
    
    
    2.45Diluted earnings (loss) per common share (a)
    
    $
    (4.31
    )
    
    
    1.22
    
    
    
    (4.82
    )
    
    
    2.42Average common shares  basic
    
    
    2,111
    
    
    
    1,891
    
    
    
    2,037
    
    
    
    1,892Common share equivalents and unvested restricted stock
    
    
    8
    
    
    
    28
    
    
    
    11
    
    
    
    30Average common shares  diluted
    
    
    2,119
    
    
    
    1,919
    
    
    
    2,048
    
    
    
    1,922
  99




---



##### 



NOTE 9: INCOME TAXES
   UnrecognizedIncome TaxGross
    
    
    Deferred
    
    
    Benefits, NetFederal,
    
    
    Accrued
    
    
    Unrecognized
    
    
    Federal and
    
    
    of DeferredState and
    
    
    Interest and
    
    
    Income Tax
    
    
    State Income
    
    
    Federal and(In millions)
    
    Foreign Tax
    
    
    Penalties
    
    
    Benefits
    
    
    Tax Benefits
    
    
    State BenefitsBalance at January 1, 2008
    
    $
    2,217
    
    
    
    425
    
    
    
    2,642
    
    
    
    (257
    )
    
    
    2,385Additions for tax positions related to the current year
    
    
    32
    
    
    
    -
    
    
    
    32
    
    
    
    (11
    )
    
    
    21Additions for tax positions related to prior years
    
    
    1,622
    
    
    
    461
    
    
    
    2,083
    
    
    
    (169
    )
    
    
    1,914Reduction for tax positions related to prior years
    
    
    (3
    )
    
    
    -
    
    
    
    (3
    )
    
    
    1
    
    
    
    (2
    )Reductions for tax positions related to acquired entities
in prior years, offset to goodwill
    
    
    -
    
    
    
    (4
    )
    
    
    (4
    )
    
    
    (1
    )
    
    
    (5
    )Reductions related to settlements with taxing authorities
    
    
    (3
    )
    
    
    -
    
    
    
    (3
    )
    
    
    -
    
    
    
    (3
    )Balance at June 30, 2008
    
    
    3,865
    
    
    
    882
    
    
    
    4,747
    
    
    
    (437
    )
    
    
    4,310Less: tax attributable to timing items included above
    
    
    (3,050
    )
    
    
    -
    
    
    
    (3,050
    )
    
    
    -
    
    
    
    (3,050
    )Less: UTBs included above that relate to acquired
entities that would impact goodwill if recognized
by December 31, 2008
    
    
    (78
    )
    
    
    (9
    )
    
    
    (87
    )
    
    
    25
    
    
    
    (62
    )Total UTBs that, if recognized, would impact the
effective income tax rate as of June 30, 2008
    
    $
    737
    
    
    
    873
    
    
    
    1,610
    
    
    
    (412
    )
    
    
    1,198
     100




---



##### 



NOTE 10: DERIVATIVES
         101




---



##### 



June 30, 2008AverageNotional
    
    
    Gross Unrealized
    
    
    
    
    
    
    Maturity in(In millions)
    
    Hedged items or Transactions
    
    Amount
    
    
    Gains
    
    
    Losses (b)
    
    
    Equity (c)
    
    
    Years (d)ASSET HEDGES (a)Cash flow hedgesInterest rate swaps-receive fixed
    
    First forecasted interest receipts on commercial loansPay 1 month LIBOR swaps
    
    1 month LIBOR risk
    
    $
    2,998
    
    
    
    82
    
    
    
    -
    
    
    
    51
    
    
    
    2.62Pay 3 month LIBOR swaps
    
    1 month LIBOR risk
    
    
    11,510
    
    
    
    320
    
    
    
    -
    
    
    
    199
    
    
    
    3.61Purchased interest rate floors-3 month LIBOR
    
    First forecasted interest receipts on 1 month LIBOR commercial loans
    
    
    9,000
    
    
    
    -
    
    
    
    (56
    )
    
    
    (35
    )
    
    
    1.99Call options on Eurodollar futures
    
    First forecasted interest payments on 1 month LIBOR commercial loans
    
    
    36,250
    
    
    
    -
    
    
    
    (10
    )
    
    
    -
    
    
    
    0.25Fair value hedgesInterest rate swaps-pay fixed/ receive LIBOR
    
    Individual fixed rate debt securities classified as available for sale
    
    
    732
    
    
    
    1
    
    
    
    (18
    )
    
    
    -
    
    
    
    11.06Foreign currency forwards
    
    Currency risk associated with foreign currency denominated securities classified as available for sale
    
    
    9,714
    
    
    
    1
    
    
    
    -
    
    
    
    -
    
    
    
    0.04Total asset hedges
    
    
    
    $
    70,204
    
    
    
    404
    
    
    
    (84
    )
    
    
    215
    
    
    
    1.21LIABILITY HEDGES (a)Cash flow hedgesInterest rate swaps-pay fixed
    
    First forecasted interest payments on long-term debtReceive 1 month LIBOR swaps
    
    1 month LIBOR risk
    
    
    2,144
    
    
    
    2
    
    
    
    (187
    )
    
    
    (114
    )
    
    
    9.66Receive 3 month LIBOR swaps
    
    1 month LIBOR risk
    
    
    6,503
    
    
    
    -
    
    
    
    (174
    )
    
    
    (108
    )
    
    
    2.73Receive 3 month LIBOR swaps
    
    3 month LIBOR risk
    
    
    8,225
    
    
    
    70
    
    
    
    -
    
    
    
    43
    
    
    
    2.21Receive 6 month LIBOR swaps
    
    6 month LIBOR risk
    
    
    7
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    4.97Eurodollar futures
    
    1 day LIBOR risk associated with the proceeds from first forecasted issuance of repurchase agreements that are part of a rollover strategy

    
    
    10,000
    
    
    
    12
    
    
    
    (1
    )
    
    
    7
    
    
    
    0.25Eurodollar futures
    
    First forecasted interest payments on 3 month LIBOR long-term debt
    
    
    137,000
    
    
    
    252
    
    
    
    (15
    )
    
    
    148
    
    
    
    0.25Fair value hedgesInterest rate swaps-receive fixed/ pay floating (e)
    
    Individual fixed rate long-term debt issuances
    
    
    35,144
    
    
    
    760
    
    
    
    (511
    )
    
    
    -
    
    
    
    9.70Foreign currency forwards
    
    Currency risk associated with foreign currency denominated repurchase agreements and long-term debt
    
    
    18,369
    
    
    
    4
    
    
    
    (1
    )
    
    
    -
    
    
    
    0.13Currency swaps (e)
    
    Currency risk associated with individual foreign currency denominated long-term debt
    
    
    1,055
    
    
    
    151
    
    
    
    -
    
    
    
    -
    
    
    
    4.81Total liability hedges
    
    
    
    
    218,447
    
    
    
    1,251
    
    
    
    (889
    )
    
    
    (24
    )
    
    
    2.02Total
    
    
    
    $
    288,651
    
    
    
    1,655
    
    
    
    (973
    )
    
    
    191
    
    
    
    -
 102




---



##### 



103




---



##### 



June 30, 20081 Year
    
    
    1-2
    
    
    2-5
    
    
    5-10
    
    
    After 10(In millions)
    
    or Less
    
    
    Years
    
    
    Years
    
    
    Years
    
    
    Years
    
    
    TotalCASH FLOW ASSET HEDGESNotional amount  swapsreceive fixed
    
    $
    676
    
    
    
    93
    
    
    
    12,999
    
    
    
    740
    
    
    
    -
    
    
    
    14,508Notional amount  other
    
    $
    36,250
    
    
    
    5,000
    
    
    
    4,000
    
    
    
    -
    
    
    
    -
    
    
    
    45,250Weighted average receive rate (a)
    
    
    5.23
    %
    
    
    5.26
    
    
    
    5.11
    
    
    
    4.71
    
    
    
    -
    
    
    
    5.10Weighted average pay rate (a)
    
    
    2.65
    %
    
    
    2.48
    
    
    
    2.71
    
    
    
    2.91
    
    
    
    -
    
    
    
    2.72Unrealized gain (loss)
    
    $
    1
    
    
    
    (20
    )
    
    
    345
    
    
    
    10
    
    
    
    -
    
    
    
    336FAIR VALUE ASSET HEDGESNotional amount  swapspay fixed
    
    $
    -
    
    
    
    -
    
    
    
    215
    
    
    
    181
    
    
    
    336
    
    
    
    732Notional amount  other
    
    $
    9,704
    
    
    
    10
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    9,714Weighted average receive rate (a)
    
    
    -
    %
    
    
    -
    
    
    
    1.65
    
    
    
    1.65
    
    
    
    1.69
    
    
    
    1.67Weighted average pay rate (a)
    
    
    -
    %
    
    
    -
    
    
    
    3.39
    
    
    
    3.39
    
    
    
    3.92
    
    
    
    3.63Unrealized gain (loss)
    
    $
    -
    
    
    
    -
    
    
    
    (5
    )
    
    
    (4
    )
    
    
    (7
    )
    
    
    (16
    )CASH FLOW LIABILITY HEDGESNotional amount  swapspay fixed
    
    $
    39
    
    
    
    13,390
    
    
    
    546
    
    
    
    1,553
    
    
    
    1,351
    
    
    
    16,879Notional amount  other
    
    $
    147,000
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    147,000Weighted average receive rate (a)
    
    
    2.27
    %
    
    
    2.78
    
    
    
    2.48
    
    
    
    2.61
    
    
    
    2.53
    
    
    
    2.69Weighted average pay rate (a)
    
    
    5.84
    %
    
    
    5.27
    
    
    
    5.56
    
    
    
    5.71
    
    
    
    5.95
    
    
    
    5.47Unrealized gain (loss)
    
    $
    247
    
    
    
    (30
    )
    
    
    (27
    )
    
    
    (101
    )
    
    
    (130
    )
    
    
    (41
    )FAIR VALUE LIABILITY HEDGESNotional amount  swapsreceive fixed
    
    $
    4,925
    
    
    
    1,900
    
    
    
    6,006
    
    
    
    13,145
    
    
    
    9,168
    
    
    
    35,144Notional amount  other
    
    $
    18,369
    
    
    
    -
    
    
    
    863
    
    
    
    192
    
    
    
    -
    
    
    
    19,424Weighted average receive rate (a)
    
    
    4.27
    %
    
    
    4.78
    
    
    
    5.21
    
    
    
    4.81
    
    
    
    5.17
    
    
    
    4.89Weighted average pay rate (a)
    
    
    2.84
    %
    
    
    2.72
    
    
    
    3.58
    
    
    
    3.11
    
    
    
    3.92
    
    
    
    3.34Unrealized gain (loss)
    
    $
    38
    
    
    
    32
    
    
    
    179
    
    
    
    281
    
    
    
    (127
    )
    
    
    403
  104




---



##### 



June 30, 2008Asset
    
    
    Liability(In millions)
    
    Hedges
    
    
    Hedges
    
    
    TotalBalance, December 31, 2007
    
    $
    50,047
    
    
    
    152,993
    
    
    
    203,040Additions (a)
    
    
    97,693
    
    
    
    237,161
    
    
    
    334,854Maturities and amortizations (a)
    
    
    (25,109
    )
    
    
    (87,978
    )
    
    
    (113,087
    )Terminations
    
    
    (52,175
    )
    
    
    (80,102
    )
    
    
    (132,277
    )Redesignations and transfers to trading account assets
    
    
    (252
    )
    
    
    (3,627
    )
    
    
    (3,879
    )Balance, June 30, 2008
    
    $
    70,204
    
    
    
    218,447
    
    
    
    288,651
  
 NOTE 11: GUARANTEES
 June 30, 2008
    
    
    December 31, 2007Maximum
    
    
    
    
    
    
    MaximumCarrying
    
    
    Risk of
    
    
    Carrying
    
    
    Risk of(In millions)
    
    Amount
    
    
    Loss
    
    
    Amount
    
    
    LossSecurities and other lending indemnifications
    
    $
    -
    
    
    
    48,041
    
    
    
    -
    
    
    
    59,238Standby letters of credit
    
    
    118
    
    
    
    32,423
    
    
    
    124
    
    
    
    29,295Liquidity agreements
    
    
    360
    
    
    
    29,773
    
    
    
    14
    
    
    
    36,926Loans sold with recourse
    
    
    45
    
    
    
    6,111
    
    
    
    44
    
    
    
    6,710Residual value guarantees
    
    
    -
    
    
    
    1,315
    
    
    
    -
    
    
    
    1,220Written put options
    
    
    2,373
    
    
    
    14,892
    
    
    
    2,001
    
    
    
    15,273Contingent consideration
    
    
    -
    
    
    
    14
    
    
    
    -
    
    
    
    101Total guarantees
    
    $
    2,896
    
    
    
    132,569
    
    
    
    2,183
    
    
    
    148,763
 105




---



##### 



NOTE 12: FAIR VALUE MEASUREMENTS AND FAIR VALUE OPTION
 FAIR VALUE MEASUREMENTS
    Level
1
 Level
2
 Level
3
  DETERMINATION OF FAIR VALUE
    Derivatives
  106




---



##### 



Securities and Trading Activities
    Principal Investments
   107




---



##### 



Mortgage Servicing Rights
  Loans and Loans Held For Sale
  ITEMS MEASURED AT FAIR VALUE ON A RECURRING BASIS
  June 30, 2008(In millions)
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    Netting (b)
    
    
    TotalASSETSCash trading instruments
    
    $
    3,109
    
    
    
    29,784
    
    
    
    6,209
    
    
    
    -
    
    
    
    39,102Derivatives
    
    
    207
    
    
    
    74,461
    
    
    
    10,336
    
    
    
    (61,517
    )
    
    
    23,487Total trading account assets
    
    
    3,316
    
    
    
    104,245
    
    
    
    16,545
    
    
    
    (61,517
    )
    
    
    62,589Securities
    
    
    1,305
    
    
    
    103,979
    
    
    
    8,177
    
    
    
    -
    
    
    
    113,461Loans
    
    
    -
    
    
    
    -
    
    
    
    18
    
    
    
    -
    
    
    
    18Loans held for sale
    
    
    -
    
    
    
    3,307
    
    
    
    43
    
    
    
    -
    
    
    
    3,350Other assets (a)
    
    
    700
    
    
    
    2,154
    
    
    
    3,491
    
    
    
    (2,977
    )
    
    
    3,368Total assets at fair value
    
    $
    5,321
    
    
    
    213,685
    
    
    
    28,274
    
    
    
    (64,494
    )
    
    
    182,786LIABILITIESCash trading instruments
    
    
    4,457
    
    
    
    2,878
    
    
    
    43
    
    
    
    -
    
    
    
    7,378Derivatives
    
    
    1,113
    
    
    
    70,710
    
    
    
    11,556
    
    
    
    (64,452
    )
    
    
    18,927Total trading account liabilities
    
    
    5,570
    
    
    
    73,588
    
    
    
    11,599
    
    
    
    (64,452
    )
    
    
    26,305Other liabilities (a)
    
    
    16
    
    
    
    1,023
    
    
    
    76
    
    
    
    (2,977
    )
    
    
    (1,862
    )Total liabilities at fair value
    
    $
    5,586
    
    
    
    74,611
    
    
    
    11,675
    
    
    
    (67,429
    )
    
    
    24,443
   3 ITEMS MEASURED AT FAIR VALUE ON A RECURRING BASIS
   108




---



##### 



Three Months Ended June 30, 2008Change inunrealized gainsIncluded in
    
    
    Purchases,
    
    
    
    
    
    
    
    
    
    
    (losses) relatingother
    
    
    issuances and
    
    
    Transfers in
    
    
    
    
    
    
    to instrumentsBeginning
    
    
    Included in
    
    
    comprehensive
    
    
    settlements,
    
    
    and/or out
    
    
    Ending
    
    
    still held at the(In millions)
    
    balance
    
    
    earnings
    
    
    income (loss)
    
    
    net
    
    
    of Level 3
    
    
    balance
    
    
    reporting dateASSETSCash trading
instruments
    
    $
    6,825
    
    
    
    (180
    )
    
    
    -
    
    
    
    (392
    )
    
    
    (44
    )
    
    
    6,209
    
    
    
    (76
    )Securities
    
    
    9,038
    
    
    
    (499
    )
    
    
    (144
    )
    
    
    (243
    )
    
    
    25
    
    
    
    8,177
    
    
    
    (329
    )Loans
    
    
    3
    
    
    
    (3
    )
    
    
    -
    
    
    
    -
    
    
    
    18
    
    
    
    18
    
    
    
    (3
    )Loans held for sale
    
    
    106
    
    
    
    -
    
    
    
    -
    
    
    
    (63
    )
    
    
    -
    
    
    
    43
    
    
    
    -Other assets
    
    $
    3,324
    
    
    
    99
    
    
    
    -
    
    
    
    68
    
    
    
    -
    
    
    
    3,491
    
    
    
    144LIABILITIESCash trading
instruments
    
    $
    55
    
    
    
    2
    
    
    
    -
    
    
    
    (33
    )
    
    
    19
    
    
    
    43
    
    
    
    1Derivatives, net (a)
    
    
    974
    
    
    
    160
    
    
    
    -
    
    
    
    127
    
    
    
    (41
    )
    
    
    1,220
    
    
    
    (157
    )Other liabilities
    
    $
    61
    
    
    
    15
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    76
    
    
    
    (14
    )
  Six Months Ended June 30, 2008Change inunrealized gainsIncluded in
    
    
    Purchases,
    
    
    
    
    
    
    
    
    
    
    (losses) relatingother
    
    
    issuances and
    
    
    Transfers in
    
    
    
    
    
    
    to instrumentsBeginning
    
    
    Included in
    
    
    comprehensive
    
    
    settlements,
    
    
    and/or out
    
    
    Ending
    
    
    still held at the(In millions)
    
    balance
    
    
    earnings
    
    
    income (loss)
    
    
    net
    
    
    of Level 3
    
    
    balance
    
    
    reporting dateASSETSCash trading
instruments
    
    $
    6,494
    
    
    
    (574
    )
    
    
    -
    
    
    
    (54
    )
    
    
    343
    
    
    
    6,209
    
    
    
    (315
    )Securities
    
    
    9,575
    
    
    
    (1,043
    )
    
    
    (434
    )
    
    
    2,314
    
    
    
    (2,235
    )
    
    
    8,177
    
    
    
    (387
    )Loans
    
    
    -
    
    
    
    (3
    )
    
    
    -
    
    
    
    -
    
    
    
    21
    
    
    
    18
    
    
    
    (3
    )Loans held for sale
    
    
    106
    
    
    
    -
    
    
    
    -
    
    
    
    (63
    )
    
    
    -
    
    
    
    43
    
    
    
    (1
    )Other assets
    
    $
    2,737
    
    
    
    723
    
    
    
    -
    
    
    
    31
    
    
    
    -
    
    
    
    3,491
    
    
    
    697LIABILITIESCash trading
instruments
    
    $
    29
    
    
    
    4
    
    
    
    -
    
    
    
    (33
    )
    
    
    43
    
    
    
    43
    
    
    
    1Derivatives, net (a)
    
    
    605
    
    
    
    65
    
    
    
    -
    
    
    
    567
    
    
    
    (17
    )
    
    
    1,220
    
    
    
    (14
    )Other liabilities
    
    $
    32
    
    
    
    44
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    76
    
    
    
    (39
    )
  109




---



##### 



Three Months Ended June 30, 2008TradingNet
    
    
    Account
    
    
    
    
    
    
    SecuritiesInterest
    
    
    Profits
    
    
    Principal
    
    
    Gains
    
    
    Other(In millions)
    
    Income
    
    
    (Losses)
    
    
    Investing
    
    
    (Losses)
    
    
    IncomeTotal gains (losses)
    
    $
    7
    
    
    
    (349
    )
    
    
    73
    
    
    
    (501
    )
    
    
    10Change in unrealized gains
(losses) relating toassets still held at June 30, 2008
    
    $
    -
    
    
    
    (240
    )
    
    
    34
    
    
    
    (328
    )
    
    
    100
 Six Months Ended June 30, 2008TradingNet
    
    
    Account
    
    
    
    
    
    
    SecuritiesInterest
    
    
    Profits
    
    
    Principal
    
    
    Gains
    
    
    Other(In millions)
    
    Income
    
    
    (Losses)
    
    
    Investing
    
    
    (Losses)
    
    
    IncomeTotal gains (losses)
    
    $
    8
    
    
    
    (673
    )
    
    
    561
    
    
    
    (1,042
    )
    
    
    136Change in unrealized gains
(losses) relating toassets still held at June 30, 2008
    
    $
    -
    
    
    
    (357
    )
    
    
    422
    
    
    
    (387
    )
    
    
    261
 ITEMS MEASURED AT FAIR VALUE ON A NONRECURRING BASIS
     110




---



##### 



Total gains (losses)June 30, 2008Fair Value Measurements
    
    
    Three
    
    
    SixMonths
    
    
    Months(In millions)
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    Total
    
    
    Ended
    
    
    EndedASSETSLoans
    
    $
    -
    
    
    
    2,277
    
    
    
    1,505
    
    
    
    3,782
    
    
    
    (972
    )
    
    
    (1,385
    )Loans held for sale
    
    
    -
    
    
    
    1,409
    
    
    
    310
    
    
    
    1,719
    
    
    
    369
    
    
    
    183Goodwill
    
    
    -
    
    
    
    -
    
    
    
    4,557
    
    
    
    4,557
    
    
    
    (6,060
    )
    
    
    (6,060
    )Other assets
    
    
    3
    
    
    
    304
    
    
    
    98
    
    
    
    405
    
    
    
    (78
    )
    
    
    (192
    )LIABILITIESOther liabilities
    
    $
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
 FAIR VALUE OPTION
   As of
    
    
    
    
    
    
    As ofJanuary 1,
    
    
    
    
    
    
    January 1,2008, prior to
    
    
    Transition
    
    
    2008, afteradoption of
    
    
    adjustment
    
    
    adoption of(In millions)
    
    SFAS 159
    
    
    gain (loss)
    
    
    SFAS 159Trading account assets
    
    $
    6,807
    
    
    
    (60
    )
    
    
    6,747Loans held for sale
    
    
    16
    
    
    
    -
    
    
    
    16Pretax cumulative effect of adoption of fair value option
    
    
    
    
    
    
    (60
    )Income taxes
    
    
    
    
    
    
    22Cumulative effect of adoption of fair value option
    
    
    
    
    
    $
    (38
    )
    111




---



##### 



Three Months Ended June 30, 2008TradingProfits
    
    
    Other(In millions)
    
    (Losses)
    
    
    Income
    
    
    TotalTrading account assets
    
    $
    (67
    )
    
    
    -
    
    
    
    (67
    )Loans
    
    
    -
    
    
    
    (3
    )
    
    
    (3
    )Loans held for sale
    
    $
    -
    
    
    
    (49
    )
    
    
    (49
    )
 Six Months Ended June 30, 2008TradingProfits
    
    
    Other(In millions)
    
    (Losses)
    
    
    Income
    
    
    TotalTrading account assets
    
    $
    (14
    )
    
    
    -
    
    
    
    (14
    )Loans
    
    
    -
    
    
    
    (3
    )
    
    
    (3
    )Loans held for sale
    
    $
    -
    
    
    
    (5
    )
    
    
    (5
    )
     112