Exhibit (19)




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##### 



WACHOVIA CORPORATION AND SUBSIDIARIES  QUARTERLY FINANCIAL SUPPLEMENT  NINE MONTHS ENDED SEPTEMBER 30, 2008  TABLE OF CONTENTS
 
 PAGEFinancial Highlights
    
    
    1Managements Discussion and Analysis
    
    
    2Explanation of Our Use of Non-GAAP Financial Measures
    
    
    46Selected Statistical Data
    
    
    47Summaries of Income, Per Common Share and Balance Sheet Data
    
    
    48Business Segments
    
    
    49Net Trading Revenue  Investment Banking
    
    
    65Selected Ratios
    
    
    66Loans  On-Balance Sheet, and Managed and Servicing Portfolios
    
    
    67Loans Held for Sale
    
    
    68Allowance for Credit Losses
    
    
    69Allowance and Charge-Off Ratios
    
    
    70Nonperforming Assets
    
    
    71Nonaccrual Loan Activity
    
    
    72Deposits
    
    
    73Time Deposits in Amounts of $100,000 or More
    
    
    73Changes in Stockholders Equity
    
    
    74Capital Ratios
    
    
    75Net Interest Income Summaries  Five Quarters Ended September 30, 2008
    
    
    76Net Interest Income Summaries  Nine Months Ended September 30, 2008 and 2007
    
    
    78Consolidated Balance Sheets  Five Quarters Ended September 30, 2008
    
    
    79Consolidated Statements of Income  Five Quarters Ended September 30, 2008
    
    
    80Wachovia Corporation and Subsidiaries  Consolidated Financial Statements
    
    
    81




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##### 



FINANCIAL HIGHLIGHTS
  Three Months Ended
    
    
    Percent
    
    
    Nine Months Ended
    
    
    PercentSeptember 30,
    
    
    Increase
    
    
    September 30,
    
    
    Increase(Dollars in millions, except per share data)
    
    2008
    
    
    2007
    
    
    (Decrease)
    
    
    2008
    
    
    2007
    
    
    (Decrease)EARNINGS SUMMARYNet interest income (GAAP)
    
    $
    4,991
    
    
    
    4,551
    
    
    
    10
    %
    
    $
    14,033
    
    
    
    13,500
    
    
    
    4
    %Tax-equivalent adjustment
    
    
    48
    
    
    
    33
    
    
    
    45
    
    
    
    155
    
    
    
    108
    
    
    
    44Net interest income (Tax-equivalent)
    
    
    5,039
    
    
    
    4,584
    
    
    
    10
    
    
    
    14,188
    
    
    
    13,608
    
    
    
    4Fee and other income
    
    
    733
    
    
    
    2,933
    
    
    
    (75
    )
    
    
    6,675
    
    
    
    10,907
    
    
    
    (39
    )Total revenue (Tax-equivalent)
    
    
    5,772
    
    
    
    7,517
    
    
    
    (23
    )
    
    
    20,863
    
    
    
    24,515
    
    
    
    (15
    )Provision for credit losses
    
    
    6,629
    
    
    
    408
    
    
    
    
    
    
    
    15,027
    
    
    
    764
    
    
    
    Other noninterest expense
    
    
    5,966
    
    
    
    4,397
    
    
    
    36
    
    
    
    17,439
    
    
    
    13,645
    
    
    
    28Merger-related and restructuring expenses
    
    
    697
    
    
    
    36
    
    
    
    
    
    
    
    1,189
    
    
    
    78
    
    
    
    Goodwill impairment
    
    
    18,786
    
    
    
    
    
    
    
    
    
    
    
    24,846
    
    
    
    
    
    
    
    Other intangible amortization
    
    
    96
    
    
    
    92
    
    
    
    4
    
    
    
    296
    
    
    
    313
    
    
    
    (5
    )Total noninterest expense
    
    
    25,545
    
    
    
    4,525
    
    
    
    
    
    
    
    43,770
    
    
    
    14,036
    
    
    
    Minority interest in income (loss) of consolidated subsidiaries
    
    
    (105
    )
    
    
    189
    
    
    
    
    
    
    
    32
    
    
    
    464
    
    
    
    (93
    )Income (loss) from continuing operations before
income taxes (benefits) (Tax-equivalent)
    
    
    (26,297
    )
    
    
    2,395
    
    
    
    
    
    
    
    (37,966
    )
    
    
    9,251
    
    
    
    Tax-equivalent adjustment
    
    
    48
    
    
    
    33
    
    
    
    45
    
    
    
    155
    
    
    
    108
    
    
    
    44Income taxes (benefits)
    
    
    (2,647
    )
    
    
    656
    
    
    
    
    
    
    
    (4,844
    )
    
    
    2,794
    
    
    
    Income (loss) from continuing operations
    
    
    (23,698
    )
    
    
    1,706
    
    
    
    
    
    
    
    (33,277
    )
    
    
    6,349
    
    
    
    Discontinued operations, net of income taxes
    
    
    
    
    
    
    (88
    )
    
    
    
    
    
    
    
    
    
    
    (88
    )
    
    
    Net income (loss)
    
    
    (23,698
    )
    
    
    1,618
    
    
    
    
    
    
    
    (33,277
    )
    
    
    6,261
    
    
    
    Dividends on preferred stock
    
    
    191
    
    
    
    
    
    
    
    
    
    
    
    427
    
    
    
    
    
    
    
    Net income (loss) available to common stockholders
    
    $
    (23,889
    )
    
    
    1,618
    
    
    
    
    %
    
    $
    (33,704
    )
    
    
    6,261
    
    
    
    
    %Diluted
earnings per common share (a)Net income (loss) available to common stockholders
    
    $
    (11.18
    )
    
    
    0.85
    
    
    
    
    %
    
    $
    (16.28
    )
    
    
    3.26
    
    
    
    
    %Return on average common stockholders equity
    
    
    (157.43
    )%
    
    
    9.19
    
    
    
    
    
    
    
    (65.08
    )%
    
    
    12.04
    
    
    
    Return on average assets (b)
    
    
    (11.91
    )%
    
    
    0.88
    
    
    
    
    
    
    
    (5.62
    )%
    
    
    1.18
    
    
    
    ASSET QUALITYAllowance for loan losses as % of loans, net
    
    
    3.18
    %
    
    
    0.78
    
    
    
    
    
    
    
    3.18
    %
    
    
    0.78
    
    
    
    Allowance for loan losses as % of nonperforming assets
    
    
    102
    
    
    
    115
    
    
    
    
    
    
    
    102
    
    
    
    115
    
    
    
    Allowance for credit losses as % of loans, net
    
    
    3.24
    
    
    
    0.82
    
    
    
    
    
    
    
    3.24
    
    
    
    0.82
    
    
    
    Net charge-offs as % of average loans, net
    
    
    1.57
    
    
    
    0.19
    
    
    
    
    
    
    
    1.11
    
    
    
    0.16
    
    
    
    Nonperforming assets as % of loans, net,
foreclosed properties and loans held for sale
    
    
    3.05
    %
    
    
    0.66
    
    
    
    
    
    
    
    3.05
    %
    
    
    0.66
    
    
    
    CAPITAL ADEQUACYTier I capital ratio
    
    
    7.49
    %
    
    
    7.10
    
    
    
    
    
    
    
    7.49
    %
    
    
    7.10
    
    
    
    Total capital ratio
    
    
    12.40
    
    
    
    10.84
    
    
    
    
    
    
    
    12.40
    
    
    
    10.84
    
    
    
    Leverage ratio
    
    
    5.70
    %
    
    
    6.10
    
    
    
    
    
    
    
    5.70
    %
    
    
    6.10
    
    
    
    OTHER FINANCIAL DATANet interest margin
    
    
    2.94
    %
    
    
    2.92
    
    
    
    
    
    
    
    2.81
    %
    
    
    2.98
    
    
    
    Fee and other income as % of total revenue
    
    
    12.70
    
    
    
    39.02
    
    
    
    
    
    
    
    31.99
    
    
    
    44.49
    
    
    
    Effective income tax rate
    
    
    10.04
    %
    
    
    27.33
    
    
    
    
    
    
    
    12.71
    %
    
    
    30.49
    
    
    
    BALANCE SHEET DATASecurities
    
    $
    107,693
    
    
    
    111,827
    
    
    
    (4)
    %
    
    $
    107,693
    
    
    
    111,827
    
    
    
    (4)
    %Loans, net
    
    
    482,373
    
    
    
    449,206
    
    
    
    7
    
    
    
    482,373
    
    
    
    449,206
    
    
    
    7Total assets
    
    
    764,378
    
    
    
    754,168
    
    
    
    1
    
    
    
    764,378
    
    
    
    754,168
    
    
    
    1Total deposits
    
    
    418,840
    
    
    
    421,937
    
    
    
    (1
    )
    
    
    418,840
    
    
    
    421,937
    
    
    
    (1
    )Long-term debt
    
    
    183,350
    
    
    
    158,584
    
    
    
    16
    
    
    
    183,350
    
    
    
    158,584
    
    
    
    16Stockholders equity
    
    $
    50,003
    
    
    
    70,140
    
    
    
    (29)
    %
    
    $
    50,003
    
    
    
    70,140
    
    
    
    (29)
    %OTHER DATAAverage basic common shares (In millions)
    
    
    2,137
    
    
    
    1,885
    
    
    
    13
    %
    
    
    2,070
    
    
    
    1,890
    
    
    
    10
    %Average diluted common shares (In millions)
    
    
    2,143
    
    
    
    1,910
    
    
    
    12
    
    
    
    2,080
    
    
    
    1,918
    
    
    
    8Actual common shares (In millions)
    
    
    2,161
    
    
    
    1,901
    
    
    
    14
    
    
    
    2,161
    
    
    
    1,901
    
    
    
    14Dividends paid per common share
    
    $
    0.05
    
    
    
    0.64
    
    
    
    (92
    )
    
    $
    1.07
    
    
    
    1.76
    
    
    
    (39
    )Dividend payout ratio on common shares
    
    
    (0.45)
    %
    
    
    75.29
    
    
    
    
    
    
    
    (6.54
    )%
    
    
    53.99
    
    
    
    Book value per common share
    
    $
    18.59
    
    
    
    36.90
    
    
    
    (50
    )
    
    $
    18.59
    
    
    
    36.90
    
    
    
    (50
    )Common stock price
    
    
    3.50
    
    
    
    50.15
    
    
    
    (93
    )
    
    
    3.50
    
    
    
    50.15
    
    
    
    (93
    )Market capitalization
    
    $
    7,563
    
    
    
    95,326
    
    
    
    (92
    )
    
    $
    7,563
    
    
    
    95,326
    
    
    
    (92
    )Common stock price to book value
    
    
    19
    %
    
    
    136
    
    
    
    (86
    )
    
    
    19
    %
    
    
    136
    
    
    
    (86
    )FTE employees
    
    
    117,227
    
    
    
    109,724
    
    
    
    7
    
    
    
    117,227
    
    
    
    109,724
    
    
    
    7Total financial centers/brokerage offices
    
    
    4,820
    
    
    
    4,167
    
    
    
    16
    
    
    
    4,820
    
    
    
    4,167
    
    
    
    16ATMs
    
    
    5,303
    
    
    
    5,123
    
    
    
    4
    %
    
    
    5,303
    
    
    
    5,123
    
    
    
    4
    %
 
 (a)
    
    Calculated using average basic common shares in 2008.(b)
    
    Net income (loss) as a percentage of average assets. 1




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##### 



Managements Discussion and Analysis
  Executive Summary
 Summary of Results of Operations
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(In millions, except per share data)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Net interest income (GAAP)
    
    $
    4,991
    
    
    
    4,551
    
    
    
    14,033
    
    
    
    13,500Tax-equivalent adjustment
    
    
    48
    
    
    
    33
    
    
    
    155
    
    
    
    108Net interest income (a)
    
    
    5,039
    
    
    
    4,584
    
    
    
    14,188
    
    
    
    13,608Fee and other income
    
    
    733
    
    
    
    2,933
    
    
    
    6,675
    
    
    
    10,907Total revenue (a)
    
    
    5,772
    
    
    
    7,517
    
    
    
    20,863
    
    
    
    24,515Provision for credit losses
    
    
    6,629
    
    
    
    408
    
    
    
    15,027
    
    
    
    764Other noninterest expense
    
    
    5,966
    
    
    
    4,397
    
    
    
    17,439
    
    
    
    13,645Goodwill impairment
    
    
    18,786
    
    
    
    -
    
    
    
    24,846
    
    
    
    -Merger-related and restructuring expenses
    
    
    697
    
    
    
    36
    
    
    
    1,189
    
    
    
    78Other intangible amortization
    
    
    96
    
    
    
    92
    
    
    
    296
    
    
    
    313Total noninterest expense
    
    
    25,545
    
    
    
    4,525
    
    
    
    43,770
    
    
    
    14,036Minority interest in income (loss) of consolidated subsidiaries
    
    
    (105
    )
    
    
    189
    
    
    
    32
    
    
    
    464Income taxes (benefits)
    
    
    (2,647
    )
    
    
    656
    
    
    
    (4,844
    )
    
    
    2,794Tax-equivalent adjustment
    
    
    48
    
    
    
    33
    
    
    
    155
    
    
    
    108Net income (loss)
    
    
    (23,698
    )
    
    
    1,706
    
    
    
    (33,277
    )
    
    
    6,349Discontinued operations, net of income taxes
    
    
    -
    
    
    
    (88
    )
    
    
    -
    
    
    
    (88
    )Dividends on preferred stock
    
    
    191
    
    
    
    -
    
    
    
    427
    
    
    
    -Net income (loss) available to common stockholders
    
    
    (23,889
    )
    
    
    1,618
    
    
    
    (33,704
    )
    
    
    6,261Diluted earnings (loss) per common share from continuing operations
    
    
    (11.18
    )
    
    
    0.90
    
    
    
    (16.28
    )
    
    
    3.31Diluted earnings (loss) available to common stockholders
    
    $
    (11.18
    )
    
    
    0.85
    
    
    
    (16.28
    )
    
    
    3.26
  Wachovia-Wells
Fargo Merger
  
    
    A $24.8 billion noncash goodwill impairment charge reflecting declining equity market
valuations and the terms of the merger with Wells Fargo. The goodwill impairment charge
did not affect Wachovias tangible capital levels, regulatory capital ratios or liquidity.
More information is in the Critical Accounting Policiesand Balance Sheet Analysis:
Goodwillsections.
 2




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##### 




    
    A $15.0 billion loan loss provision, which increased reserves by $10.9 billion since
December 31, 2007, including an increase in reserves of $7.8 billion for the payment option mortgage
portfolio called Pick-a-Payment.
    
    $5.7 billion in market disruption-related losses, including $2.1 billion of securities
impairment write-downs. More information is in the Market Disruption-Related Losses
section. These losses included:
 o
    
    $3.1 billion in Corporate and Investment Bank distribution-related
losses. More information is in the Market Disruption-Related Lossessection;o
    
    $1.6 billion in the Parent, which included $1.3 billion of securities
impairments;o
    
    $1.0 billion in Capital Management, which included $766 million in
securities losses primarily related to the support of three Evergreen money market
funds.
 
    
    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.
    
    A $225 million gain from our ownership interest in Visa, Inc., which completed its
initial public offering in March 2008.
    
    A $1.7 billion addition to legal reserves, including $997 million of costs related to a
previously disclosed auction rate securities settlement ($783 million net of minority
interest).
    
    $1.2 billion of merger-related and restructuring charges, including $515 million
related to expense reductions announced in the second quarter of 2008.
 Wachovia-Wells Fargo
Merger
    3




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##### 



Other Factors in Results
  
    
    4 percent growth in net interest income, driven by 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 12 percent increase in average loans to $473.7 billion. Average consumer loans rose 5
percent, driven by higher traditional mortgage loans. Average commercial loan growth of 23
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 $2.9 billion in consumer loans from the held-for-sale
portfolio in the first nine months of 2008.
    
    A 4 percent increase in average core deposits to $392.5 billion, although period-end
core deposits of $370.0 billion were down 7 percent from year-end 2007. The Liquidity and
Capital Adequacy: Core Depositssection has more information. We continue to expand
product distribution in the recently 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. In the first nine months of 2008, we opened
59 de novo branches, consolidated 101 branches, and expanded our commercial banking
presence, all of which added $129 million to noninterest expense.
    
    Higher fiduciary and asset management fees and brokerage commissions largely reflecting
the A.G. Edwards acquisition.
  4




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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
  5




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##### 



Market
Disruption-Related Losses, Net (a)
 2008
    
    
    2007Nine Months Year-to-Date
    
    
    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
    
    $
    (434
    )
    
    
    (388
    )
    
    
    10
    
    
    
    (812
    )
    
    
    (1,048
    )
    
    
    (1,860
    )Commercial mortgage (CMBS)
    
    
    (662
    )
    
    
    (25
    )
    
    
    (390
    )
    
    
    (1,077
    )
    
    
    (1,088
    )
    
    
    (2,165
    )Consumer mortgage
    
    
    (367
    )
    
    
    -
    
    
    
    (98
    )
    
    
    (465
    )
    
    
    (205
    )
    
    
    (670
    )Leveraged finance
    
    
    189
    
    
    
    -
    
    
    
    (374
    )
    
    
    (185
    )
    
    
    (179
    )
    
    
    (364
    )Other
    
    
    (479
    )
    
    
    (49
    )
    
    
    (2
    )
    
    
    (530
    )
    
    
    (50
    )
    
    
    (580
    )Total
    
    
    (1,753
    )
    
    
    (462
    )
    
    
    (854
    )
    
    
    (3,069
    )
    
    
    (2,570
    )
    
    
    (5,639
    )Capital ManagementImpairment and trading losses
    
    
    (176
    )
    
    
    (766
    )
    
    
    (22
    )
    
    
    (964
    )
    
    
    (57
    )
    
    
    (1,021
    )Auction Rate
securities (ARS) losses
    
    
    (85
    )
    
    
    -
    
    
    
    -
    
    
    
    (85
    )
    
    
    -
    
    
    
    (85
    )ParentImpairment losses/other (b)
    
    
    -
    
    
    
    (1,274
    )
    
    
    (321
    )
    
    
    (1,595
    )
    
    
    (94
    )
    
    
    (1,689
    )Total, net
    
    
    (2,014
    )
    
    
    (2,502
    )
    
    
    (1,197
    )
    
    
    (5,713
    )
    
    
    (2,721
    )
    
    
    (8,434
    )Discontinued operations (Bluepoint)
    
    $
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    (330
    )
    
    
    (330
    )ARS Settlement costs in sundry expenseCapital Management(c)
    
    $
    -
    
    
    
    -
    
    
    
    -
    
    
    
    (932
    )
    
    
    -
    
    
    
    (932
    )Corporate and Investment Bank
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    (65
    )
    
    
    -
    
    
    
    (65
    )Total
    
    $
    -
    
    
    
    -
    
    
    
    -
    
    
    
    (997
    )
    
    
    -
    
    
    
    (997
    )
 
 Market Disruption-Related Losses Market Disruption-Related Losses, Net
    6




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##### 



Parent
  Corporate Results
of Operations: Fee Income Corporate and Investment Bank, Capital Management Parent
 Subprime-related, CMBS and Leveraged Finance
Distribution Exposure, Net (a)
 9/30/08Exposure9/30/08
    
    
    Hedged With
    
    
    9/30/08
    
    
    6/30/08
    
    
    12/31/07Gross
    
    
    Various
    
    
    Net
    
    
    Net
    
    
    Net($ in millions)
    
    Exposure
    
    
    Instruments
    
    
    Exposure
    
    
    Exposure
    
    
    ExposureABS CDO-related exposures:Super senior ABS CDO exposuresHigh grade
    
    $
    2,287
    
    
    
    (2,287
    )
    
    
    -
    
    
    
    -
    
    
    
    -Mezzanine
    
    
    1,075
    
    
    
    (726
    )
    
    
    349
    
    
    
    419
    
    
    
    613Total super senior ABS CDO exposures
    
    
    3,362
    
    
    
    (3,013
    )
    
    
    349
    
    
    
    419
    
    
    
    613Other retained ABS CDO-related exposures
    
    
    50
    
    
    
    (16
    )
    
    
    34
    
    
    
    12
    
    
    
    208Total ABS CDO-related exposures (b)
    
    
    3,412
    
    
    
    (3,029
    )
    
    
    383
    
    
    
    431
    
    
    
    821Subprime RMBS exposures:AAA rated
    
    
    1,420
    
    
    
    -
    
    
    
    1,420
    
    
    
    1,524
    
    
    
    1,948Below AAA rated (net of hedges) (c)
    
    
    144
    
    
    
    -
    
    
    
    144
    
    
    
    (46
    )
    
    
    (253
    )Total subprime RMBS exposures
    
    
    1,564
    
    
    
    -
    
    
    
    1,564
    
    
    
    1,478
    
    
    
    1,695Total subprime-related exposure
    
    
    4,976
    
    
    
    (3,029
    )
    
    
    1,947
    
    
    
    1,909
    
    
    
    2,516Commercial mortgage-related (CMBS)
    
    
    649
    
    
    
    -
    
    
    
    649
    
    
    
    756
    
    
    
    7,564Leveraged finance (net of applicable fees)
    
    $
    n.a.
    
    
    
    n.a.
    
    
    
    2,270
    
    
    
    3,766
    
    
    
    9,149
 Note 18 Consolidated Financial Statements
 7




---



##### 



Market
Disruption-Related Distribution Exposure Subprime-related, CMBS and Leveraged Finance
Distribution Exposure, Net
     Wachovia-Wells Fargo Merger
   Auction Rate Securities
 8




---



##### 



Noninterest Expense Business
Segments: Capital Management Note 1 Consolidated Financial Statements.
 Critical Accounting Policies
  Allowance for Loan Losses and Reserve for Unfunded Lending Commitments
     9




---



##### 



Provision and Allowance for Credit Losses
       10




---



##### 



Goodwill Impairment Business Segments
      11




---



##### 



Goodwill Modeling Assumptions
 Goodwill Modeling Assumptions
 2008
    
    
    2007Third
    
    
    Second
    
    
    First
    
    
    Fourth($ in billions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterEarnings multiple method
    
    $
    n/ a
    
    
    
    74.0
    
    
    
    90.8
    
    
    
    94.4Transaction premium method
    
    
    n/ a
    
    
    
    94.8
    
    
    
    116.0
    
    
    
    n/ aDiscounted cash flow method
    
    
    n/ a
    
    
    
    46.4
    
    
    
    91.3
    
    
    
    92.3Wells Fargo transaction
    
    $
    15.1
    
    
    
    n/ a
    
    
    
    n/ a
    
    
    
    n/ aDiscount rate range
    
    
    n/ a
    
    
    14.2% to 20.9%
    
    13.6% to 16.2%
    
    11.4% to 17.2%Market capitalization - 1 months average
    
    $
    29.2
    
    
    
    40.3
    
    
    
    56.0
    
    
    
    80.2Implied control premium
    
    
    n/ a
    %
    
    
    14.9
    
    
    
    63.0
    
    
    
    15.2
   Goodwill Notes to Consolidated Financial Statements
 12




---



##### 



Corporate Results of Operations
 Average Balance Sheets and Interest Rates
 Nine Months Ended
    
    
    Nine Months EndedSeptember 30, 2008
    
    
    September 30, 2007Average
    
    
    Interest
    
    
    Average
    
    
    Interest(In millions)
    
    Balances
    
    
    Rates
    
    
    Balances
    
    
    RatesInterest-bearing bank balances
    
    $
    7,179
    
    
    
    3.11
    %
    
    $
    3,807
    
    
    
    6.06
    %Federal funds sold
    
    
    14,514
    
    
    
    2.80
    
    
    
    13,480
    
    
    
    5.25Trading account assets
    
    
    41,630
    
    
    
    5.00
    
    
    
    34,561
    
    
    
    5.93Securities
    
    
    115,812
    
    
    
    5.47
    
    
    
    109,322
    
    
    
    5.43Commercial loans, net (a)
    
    
    204,579
    
    
    
    4.49
    
    
    
    165,888
    
    
    
    7.12Consumer loans, net
    
    
    269,157
    
    
    
    6.69
    
    
    
    256,272
    
    
    
    7.52Total loans, net
    
    
    473,736
    
    
    
    5.74
    
    
    
    422,160
    
    
    
    7.36Loans held for sale
    
    
    9,712
    
    
    
    7.08
    
    
    
    18,213
    
    
    
    6.62Other earning assets
    
    
    10,818
    
    
    
    5.12
    
    
    
    8,057
    
    
    
    6.98Risk management derivatives
    
    
    -
    
    
    
    0.05
    
    
    
    -
    
    
    
    0.03Total earning assets
    
    
    673,401
    
    
    
    5.62
    
    
    
    609,600
    
    
    
    6.88Interest-bearing deposits
    
    
    384,698
    
    
    
    2.53
    
    
    
    347,439
    
    
    
    3.67Federal funds purchased
    
    
    39,557
    
    
    
    2.79
    
    
    
    39,203
    
    
    
    4.98Commercial paper
    
    
    5,036
    
    
    
    1.98
    
    
    
    5,290
    
    
    
    4.60Securities sold short
    
    
    6,409
    
    
    
    3.54
    
    
    
    7,758
    
    
    
    3.79Other short-term borrowings
    
    
    9,236
    
    
    
    1.60
    
    
    
    7,463
    
    
    
    2.69Long-term debt
    
    
    175,495
    
    
    
    4.19
    
    
    
    145,604
    
    
    
    5.39Risk management derivatives
    
    
    -
    
    
    
    0.04
    
    
    
    -
    
    
    
    0.10Total interest-bearing liabilities
    
    
    620,431
    
    
    
    3.05
    
    
    
    552,757
    
    
    
    4.31Net interest income and margin
    
    $
    14,188
    
    
    
    2.81
    %
    
    $
    13,608
    
    
    
    2.98
    %
  Net Interest Income and Margin
    13




---



##### 



Fee and Other Income
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(In millions)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Service charges
    
    $
    717
    
    
    
    689
    
    
    
    2,102
    
    
    
    1,970Other banking fees
    
    
    525
    
    
    
    471
    
    
    
    1,541
    
    
    
    1,336Commissions
    
    
    799
    
    
    
    600
    
    
    
    2,623
    
    
    
    1,908Fiduciary and asset management fees
    
    
    1,291
    
    
    
    1,029
    
    
    
    4,085
    
    
    
    2,997Advisory, underwriting and other investment banking fees
    
    
    243
    
    
    
    393
    
    
    
    784
    
    
    
    1,254Trading account profits (losses)
    
    
    (701
    )
    
    
    (301
    )
    
    
    (1,519
    )
    
    
    22Principal investing
    
    
    (310
    )
    
    
    372
    
    
    
    272
    
    
    
    718Securities gains (losses)
    
    
    (1,978
    )
    
    
    (34
    )
    
    
    (2,991
    )
    
    
    42Other income
    
    
    147
    
    
    
    (286
    )
    
    
    (222
    )
    
    
    660Total fee and other income
    
    $
    733
    
    
    
    2,933
    
    
    
    6,675
    
    
    
    10,907
 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 impact of the A.G. Edwards acquisition, partially
offset by lower retail brokerage transactional revenue as well as lower insurance
commissions.
    
    Increased fiduciary and asset management fees were driven by the impact of the A.G.
Edwards acquisition, continued growth in retail brokerage managed account and other
asset-based fees reflecting organic growth, somewhat offset by the effect of lower market
valuations.
    
    Advisory and underwriting results declined 37 percent from the year ago period
driven by lower origination activity in businesses affected by the market disruption.
    
    Trading account losses of $1.5 billion compared with profits of $22 million in the same
period a year ago. Trading account losses in the first nine months of this year were
driven by net market disruption-related losses of $2.0 billion, compared with losses of $447
million in the third quarter of 2007 (there were none in the first
half of 2007), which included:
 o
    
    $434 million of losses in subprime residential asset-backed CDOs and other
subprime-related products largely relating to losses on warehouse positions compared
with $230 million of losses in the third quarter of 2007.o
    
    $662 million of losses in commercial mortgage structured products compared
with $129 million of losses in the third quarter of 2007.o
    
    $367 million of losses in consumer mortgage structured products compared with
$41 million of losses in the third quarter of 2007.o
    
    $189 million of hedging gains on economic hedges in leveraged finance
compared with hedging gains of $62 million in the third quarter of 2007.o
    
    $479 million of losses in non-subprime collateralized debt obligations and
other structured products compared with losses of $109 million in the third quarter of 2007.
 14




---



##### 



o
    
    $176 million in trading securities write-downs, substantially all of which were recorded in connection with the
liquidation of an Evergreen fund compared with no write-downs in the third
quarter of 2007.o
    
    $85 million of write-downs related to auction rate securities compared with
no write-downs in the third quarter of 2007.
 
    
    Principal investing results declined from the first nine months of 2007 despite the
$466 million of net gains related to the adoption of new fair value accounting standards
on January 1, 2008, as a result of strong results in the year ago period compared with the
current nine month period, which included $310 million of net losses in the third quarter of 2008.
    
    Net securities losses of $3.0 billion were driven by $2.5 billion of market
disruption-related losses and $788 million of losses (of which $720 million were in the
Parent) reflecting our change in intent from holding certain securities to selling them in
the near term. The $2.5 billion of market disruption-related securities losses included
$462 million of CIB distribution-related losses, $766 million of losses in Capital
Management primarily related to the support of three Evergreen money market funds, and
$1.3 billion of impairment losses in the Parent securities portfolio. These results also
included the $225 million gain related to the Visa initial public offering. The losses in
the first nine months of 2008 compared with net gains of $42 million in the year ago period,
which included a $40 million valuation loss related to the purchase of certain
asset-backed commercial paper investments from Evergreen money market funds in the third
quarter of 2007.
    
    Other income was a net loss of $222 million in the first nine months of 2008 compared
with income of $660 million in the same period a year ago. The decline was partially
attributable to $1.2 billion of market disruption-related losses in other income in the
first nine months of this year compared with $734 million of losses in the third quarter of 2007 (there
were none in the first half of 2007). The year over year results included:
 o
    
    A $394 million loss in the commercial sales and securitization business
largely related to the market disruption with a loss of $140 million in the same
period a year ago, which included $359 million of market disruption-related losses offsetting
strong results earlier in 2007.o
    
    A $420 million decline in results for certain corporate investments largely
reflecting the $314 million loss on certain BOLI contracts in the first quarter of
2008 as well as lower returns in 2008.o
    
    A $175 million decline in consumer loan sale and securitization results on
lower volume largely in real estate secured.o
    
    Leveraged finance net market disruption-related losses of $374 million
compared with $334 million in the third quarter of 2007 largely related to net
write-downs on unfunded commitments. The first quarter of 2008 included $792 million
of net write-downs; 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 and a net $20 million of write-downs in the third quarter of 2008. Related economic hedge results are reflected in trading. Unfunded
commitments are valued assuming the commitments are fully funded under the current
contractual terms.
 15




---



##### 



Noninterest Expense
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(In millions)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Salaries and employee benefits
    
    $
    3,489
    
    
    
    2,628
    
    
    
    10,184
    
    
    
    8,722Occupancy
    
    
    381
    
    
    
    325
    
    
    
    1,137
    
    
    
    968Equipment
    
    
    325
    
    
    
    283
    
    
    
    965
    
    
    
    899Marketing
    
    
    68
    
    
    
    74
    
    
    
    260
    
    
    
    214Communications and supplies
    
    
    173
    
    
    
    176
    
    
    
    543
    
    
    
    527Professional and consulting fees
    
    
    242
    
    
    
    194
    
    
    
    656
    
    
    
    576Sundry expense
    
    
    1,288
    
    
    
    717
    
    
    
    3,694
    
    
    
    1,739Other noninterest expense
    
    
    5,966
    
    
    
    4,397
    
    
    
    17,439
    
    
    
    13,645Merger-related and restructuring expenses
    
    
    697
    
    
    
    36
    
    
    
    1,189
    
    
    
    78Goodwill impairment
    
    
    18,786
    
    
    
    -
    
    
    
    24,846
    
    
    
    -Other intangible amortization
    
    
    96
    
    
    
    92
    
    
    
    296
    
    
    
    313Total noninterest expense
    
    $
    25,545
    
    
    
    4,525
    
    
    
    43,770
    
    
    
    14,036
 Noninterest Expense
   Merger-Related and Restructuring Expenses
 Income
Taxes
 16




---



##### 



Business Segments
 Goodwill
  
    
    In the General Bank, an increase of $207 million.
    
    In Wealth Management, an increase of $21 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 $405 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.
  17




---



##### 



General Bank
Performance Summary
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(Dollars in millions)
    
    2008
    
    
    2007
    
    
    2008
    
    2007Income statement dataNet interest income (Tax-equivalent)
    
    $
    3,763
    
    
    
    3,466
    
    
    
    10,922
    
    
    
    10,240Fee and other income
    
    
    1,003
    
    
    
    935
    
    
    
    2,983
    
    
    
    2,716Intersegment revenue
    
    
    50
    
    
    
    59
    
    
    
    162
    
    
    
    161Total revenue (Tax-equivalent)
    
    
    4,816
    
    
    
    4,460
    
    
    
    14,067
    
    
    
    13,117Provision for credit losses
    
    
    1,340
    
    
    
    207
    
    
    
    2,834
    
    
    
    508Noninterest expense
    
    
    2,127
    
    
    
    1,898
    
    
    
    6,236
    
    
    
    5,685Income taxes (Tax-equivalent)
    
    
    492
    
    
    
    860
    
    
    
    1,824
    
    
    
    2,527Segment earnings
    
    $
    857
    
    
    
    1,495
    
    
    
    3,173
    
    
    
    4,397Performance and other dataEconomic profit
    
    $
    699
    
    
    
    1,190
    
    
    
    2,624
    
    
    
    3,442Risk adjusted return on capital (RAROC)
    
    
    25.40
    %
    
    
    54.30
    
    
    
    32.54
    
    
    
    53.61Economic capital, average
    
    $
    19,302
    
    
    
    10,904
    
    
    
    16,273
    
    
    
    10,800Cash overhead efficiency ratio (Tax-equivalent)
    
    
    44.16
    %
    
    
    42.54
    
    
    
    44.33
    
    
    
    43.34Lending commitments
    
    $
    128,178
    
    
    
    132,779
    
    
    
    128,178
    
    
    
    132,779Average loans, net
    
    
    318,573
    
    
    
    295,188
    
    
    
    316,217
    
    
    
    292,003Average core deposits
    
    $
    292,653
    
    
    
    290,099
    
    
    
    293,361
    
    
    
    288,209FTE employees
    
    
    53,073
    
    
    
    56,427
    
    
    
    53,073
    
    
    
    56,427
 General Bank
 
    
    Average loan growth of 8 percent, led by consumer real estate secured and commercial
lending.
    
    A 4 percent increase in mortgage lending, primarily reflecting a decline in
prepayments. Significant efforts have been made in our mortgage business to mitigate risk
in the face of declining housing markets by restructuring our operating model, including
ceasing origination through 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.
    
    Reduced home equity originations, reflecting implementation of tightened credit
standards resulting in additional limitations on utilization of undrawn equity lines. More
than 95 percent of our home equity loans were originated through our branch network and
other direct channels.
    
    A 3 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 4 percent, and an increase of 1 percent in retail deposits.
    
    Growth in net new retail checking accounts, reflecting retention and acquisition
efforts resulting in a net increase of 645,000 in the first nine months of 2008 compared
with a net increase of 845,000 in the first nine months of 2007.
    
    442,000 new checking accounts linked to the new Way2Save accounts, which launched in
mid-January 2008.
    
    10 percent growth in fee and other income, with strength in service charges,
interchange income and mortgage banking fee income. Growth in interchange income reflected
a 16 percent increase in debit/credit card volume from the first nine months of 2007.
    
    Noninterest expense up 10 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 nine months of 2008, 59 de novo branches were opened and 101 branches
were consolidated.
    
    An increase in the provision for credit losses to $2.8 billion largely reflecting rapid
deterioration in consumer real estate particularly in certain housing markets and higher losses in
auto.
 18




---



##### 



Wealth Management
Performance Summary
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(Dollars in millions)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Income statement dataNet interest income (Tax-equivalent)
    
    $
    194
    
    
    
    184
    
    
    
    575
    
    
    
    542Fee and other income
    
    
    192
    
    
    
    184
    
    
    
    610
    
    
    
    582Intersegment revenue
    
    
    2
    
    
    
    4
    
    
    
    10
    
    
    
    10Total revenue (Tax-equivalent)
    
    
    388
    
    
    
    372
    
    
    
    1,195
    
    
    
    1,134Provision for credit losses
    
    
    8
    
    
    
    6
    
    
    
    15
    
    
    
    9Noninterest expense
    
    
    246
    
    
    
    240
    
    
    
    744
    
    
    
    730Income taxes (Tax-equivalent)
    
    
    50
    
    
    
    46
    
    
    
    160
    
    
    
    144Segment earnings
    
    $
    84
    
    
    
    80
    
    
    
    276
    
    
    
    251Performance and other dataEconomic profit
    
    $
    64
    
    
    
    61
    
    
    
    207
    
    
    
    192Risk adjusted return on capital (RAROC)
    
    
    46.00
    %
    
    
    50.69
    
    
    
    49.76
    
    
    
    53.68Economic capital, average
    
    $
    729
    
    
    
    609
    
    
    
    713
    
    
    
    601Cash overhead efficiency ratio (Tax-equivalent)
    
    
    63.55
    %
    
    
    64.71
    
    
    
    62.31
    
    
    
    64.40Lending commitments
    
    $
    6,376
    
    
    
    7,007
    
    
    
    6,376
    
    
    
    7,007Average loans, net
    
    
    22,765
    
    
    
    20,996
    
    
    
    22,374
    
    
    
    20,517Average core deposits
    
    $
    14,690
    
    
    
    17,180
    
    
    
    16,732
    
    
    
    17,300FTE employees
    
    
    4,516
    
    
    
    4,547
    
    
    
    4,516
    
    
    
    4,547
 Wealth Management
 
    
    6 percent growth in net interest income on 9 percent loan growth and wider deposit
spreads despite a 3 percent decline in average core deposits.
    
    16 percent growth in fiduciary and asset management fees as the benefits of a pricing
initiative implemented in the third quarter of 2007 and sales growth overcame declines in
equity valuations. Insurance commissions declined 14 percent in a soft market for
insurance premiums.
    
    2 percent expense growth driven by the effect of private banking and western expansion
investment, partially offset by expense efficiency initiatives.
    
    A 13 percent decline in assets under management since year-end 2007 to $73.2 billion
largely due to market depreciation.
  19




---



##### 



Corporate and Investment Bank
Performance Summary
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(Dollars in millions)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Income statement dataNet interest income (Tax-equivalent)
    
    $
    1,043
    
    
    
    838
    
    
    
    3,211
    
    
    
    2,328Fee and other income
    
    
    (416
    )
    
    
    176
    
    
    
    82
    
    
    
    2,806Intersegment revenue
    
    
    (57
    )
    
    
    (52
    )
    
    
    (159
    )
    
    
    (145
    )Total revenue (Tax-equivalent)
    
    
    570
    
    
    
    962
    
    
    
    3,134
    
    
    
    4,989Provision for credit losses
    
    
    525
    
    
    
    1
    
    
    
    1,160
    
    
    
    5Noninterest expense
    
    
    1,154
    
    
    
    626
    
    
    
    2,867
    
    
    
    2,556Income taxes (Tax-equivalent)
    
    
    (406
    )
    
    
    123
    
    
    
    (327
    )
    
    
    887Segment earnings
    
    $

    (703
    )

    
    
    212
    
    
    
    (566
    )
    
    
    1,541Performance and other dataEconomic profit (loss)
    
    $

    (899
    )


    
    
    (113
    )
    
    
    (1,301
    )
    
    
    663Risk adjusted return on capital (RAROC)
    
    
    (13.26
    )%
    
    
    6.40
    
    
    
    (1.47
    )
    
    
    20.85Economic capital, average
    
    $
    14,732
    
    
    
    9,791
    
    
    
    13,933
    
    
    
    8,995Cash overhead efficiency ratio (Tax-equivalent)
    
    
    202.09
    %
    
    
    65.12
    
    
    
    91.45
    
    
    
    51.24Lending commitments
    
    $
    99,489
    
    
    
    119,791
    
    
    
    99,489
    
    
    
    119,791Average loans, net
    
    
    109,323
    
    
    
    82,979
    
    
    
    105,708
    
    
    
    77,736Average core deposits
    
    $
    27,497
    
    
    
    37,208
    
    
    
    30,932
    
    
    
    36,077FTE employees
    
    
    5,718
    
    
    
    6,695
    
    
    
    5,718
    
    
    
    6,695
 Corporate and Investment Bank
 
    
    $812 million in subprime residential asset-backed CDOs and other subprime-related
products largely relating to losses on warehouse positions compared
with $230 billion of losses in
the third quarter of 2007;
    
    $1.1 billion in commercial mortgage structured products compared with $488 million of losses in
the third quarter of 2007;
    
    $465 million in consumer mortgage structured products compared with $82 million of losses in the
third quarter of 2007;
    
    $185 million in leveraged finance net of fees and macro credit hedges
compared with $272 million of losses in the third quarter of 2007; and
    
    $530 million related to monoline reserves and
breakage of certain contracts compared with $109 million of losses in the third quarter of 2007.
  
    
    A 38 percent increase in net interest income, which reflected a 36 percent increase in
average loans including $7.3 billion of net transfers into the loan portfolio of certain
loans originally slated for disposition largely in the fourth quarter of 2007 and first
quarter of 2008, as well as loan growth in the corporate lending and the global financial
institutions businesses.
 20




---



##### 




    
    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 increase in noninterest expense primarily due to higher compensation
expense including severance, and a $65 million reserve for
auction rate securities losses in our portfolio.
    
    Provision for credit losses of $1.2 billion largely reflecting residential-related
commercial real estate losses, compared with $5 million in the first nine months of 2007.
  Capital Management
Performance Summary
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(Dollars in millions)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Income statement dataNet interest income (Tax-equivalent)
    
    $
    388
    
    
    
    268
    
    
    
    977
    
    
    
    787Fee and other income
    
    
    968
    
    
    
    1,444
    
    
    
    5,155
    
    
    
    4,457Intersegment revenue
    
    
    4
    
    
    
    (8
    )
    
    
    (14
    )
    
    
    (27
    )Total revenue (Tax-equivalent)
    
    
    1,360
    
    
    
    1,704
    
    
    
    6,118
    
    
    
    5,217Provision for credit losses
    
    
    1
    
    
    
    -
    
    
    
    1
    
    
    
    -Noninterest expense
    
    
    2,145
    
    
    
    1,241
    
    
    
    6,328
    
    
    
    3,772Income taxes (benefits) (Tax-equivalent)
    
    
    (287
    )
    
    
    169
    
    
    
    (77
    )
    
    
    527Segment earnings (loss)
    
    $
    (499
    )
    
    
    294
    
    
    
    (134
    )
    
    
    918Performance and other dataEconomic profit (loss)
    
    $
    (555
    )

    
    
    258
    
    
    
    (307
    )
    
    
    808Risk adjusted return on capital (RAROC)
    
    
    (97.63
    )%
    
    
    88.96
    
    
    
    (8.56
    )
    
    
    92.17Economic capital, average
    
    $
    2,033
    
    
    
    1,310
    
    
    
    2,098
    
    
    
    1,331Cash overhead efficiency ratio (Tax-equivalent)
    
    
    157.72
    %
    
    
    72.82
    
    
    
    103.43
    
    
    
    72.29Lending commitments
    
    $
    1,657
    
    
    
    1,164
    
    
    
    1,657
    
    
    
    1,164Average loans, net
    
    
    3,223
    
    
    
    2,142
    
    
    
    2,889
    
    
    
    1,789Average core deposits
    
    $
    54,734
    
    
    
    31,489
    
    
    
    48,844
    
    
    
    31,463FTE employees
    
    
    29,301
    
    
    
    17,908
    
    
    
    29,301
    
    
    
    17,908
 Capital Management
 
    
    Revenue growth of 17 percent despite declining equity markets year over year.
 o
    
    $6.2 billion in revenue from our retail brokerage businesses reflecting transactional
revenues of $2.3 billion and asset-based and other income of $3.9 billion. Retail
brokerage fee income increased 45 percent driven by the impact of the A.G. Edwards
acquisition, as well as growth in managed account and other asset-based fees, partially
offset by lower brokerage transaction activity and equity syndicate distribution fees as
well as losses related to auction rate securities in the portfolio.o
    
    Net negative revenue of $71 million from our asset management businesses reflecting
$942 million of market disruption-related losses incurred in connection with providing
support to Evergreen funds.
 
    
    Fee and other income up 16 percent driven by the addition of A.G. Edwards and growth in
managed account and other brokerage asset-based fees, partially offset by $1.0 billion in
market disruption-related losses, including:
 21




---



##### 



o
    
    $761 million in valuation losses primarily relating to the support of three Evergreen
money market funds;o
    
    $172 million in valuation losses on the liquidation of an Evergreen fund;o
    
    $85 million in valuation losses on auction rate securities held in the securities
portfolio; ando
    
    $31 million in other securities impairment losses.
 
    
    Net interest income up 24 percent, driven by retail brokerage core deposit growth of $17.4
billion, which was partially offset by spread compression.
    
    68 percent growth in noninterest expense largely due to
the effect of the $932 million of
settlement charges related to auction rate securities, along with merger activity.
 Total Assets Under Management (AUM)
  2008
    
    
    2007Third Quarter
    
    
    Fourth Quarter
    
    
    Third Quarter(In billions)
    
    Amount
    
    
    Mix
    
    
    Amount
    
    
    Mix
    
    
    Amount
    
    
    MixEquity
    
    $
    61.7
    
    
    
    30
    %
    
    $
    83.6
    
    
    
    30
    %
    
    $
    84.6
    
    
    
    30
    %Fixed income
    
    
    92.8
    
    
    
    44
    
    
    
    123.0
    
    
    
    45
    
    
    
    137.7
    
    
    
    48Money market
    
    
    54.6
    
    
    
    26
    
    
    
    68.1
    
    
    
    25
    
    
    
    63.1
    
    
    
    22Total assets
under management
(a)
    
    $
    209.1
    
    
    
    100
    %
    
    $
    274.7
    
    
    
    100
    %
    
    $
    285.4
    
    
    
    100
    %
    22




---



##### 



Parent
Performance Summary
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(Dollars in millions)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Income statement dataNet interest income (Tax-equivalent)
    
    $
    (349
    )
    
    
    (172
    )
    
    
    (1,497
    )
    
    
    (289
    )Fee and other income
    
    
    (1,014
    )
    
    
    194
    
    
    
    (2,155
    )
    
    
    346Intersegment revenue
    
    
    1
    
    
    
    (3
    )
    
    
    1
    
    
    
    1Total revenue (Tax-equivalent)
    
    
    (1,362
    )
    
    
    19
    
    
    
    (3,651
    )
    
    
    58Provision for credit losses
    
    
    4,755
    
    
    
    194
    
    
    
    11,017
    
    
    
    242Noninterest expense
    
    
    390
    
    
    
    484
    
    
    
    1,560
    
    
    
    1,215Minority interest
    
    
    (71
    )
    
    
    139
    
    
    
    153
    
    
    
    275Income taxes (benefits) (Tax-equivalent)
    
    
    (2,128
    )
    
    
    (445
    )
    
    
    (5,792
    )
    
    
    (964
    )Dividends on preferred stock
    
    
    191
    
    
    
    -
    
    
    
    427
    
    
    
    -Segment loss
    
    $
    (4,499
    )
    
    
    (353
    )
    
    
    (11,016
    )
    
    
    (710
    )Performance and other dataEconomic loss
    
    $
    (1,414
    )
    
    
    (319
    )
    
    
    (3,895
    )
    
    
    (629
    )Risk adjusted return on capital (RAROC)
    
    
    (1,259.81
    )%
    
    
    (41.54
    )
    
    
    (400.09
    )
    
    
    (22.61
    )Economic capital, average
    
    $
    443
    
    
    
    2,403
    
    
    
    1,265
    
    
    
    2,499Cash overhead efficiency ratio (Tax-equivalent)
    
    
    (21.45
    )%
    
    
    1,976.53
    
    
    
    (34.59
    )
    
    
    1,576.74Lending commitments
    
    $
    483
    
    
    
    529
    
    
    
    483
    
    
    
    529Average loans, net
    
    
    24,601
    
    
    
    28,496
    
    
    
    26,548
    
    
    
    30,115Average core deposits
    
    $
    2,735
    
    
    
    3,033
    
    
    
    2,627
    
    
    
    2,578FTE employees
    
    
    24,619
    
    
    
    24,147
    
    
    
    24,619
    
    
    
    24,147
 Parent
 
    
    A decline in net interest income, reflecting the leveraged 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 $10.8 billion increase in the provision for credit losses reflecting greater credit
risk and loan growth. More information is in the Provision and Allowance for Credit Losses
section.
    
    A $2.5 billion decrease in fee and other income, reflecting net securities losses of
$1.7 billion compared with net gains of $72 million in the year ago period, as well as
$314 million of valuation losses on our bank-owned life
insurance portfolio (BOLI) in the first
nine months of 2008. Of the $1.7 billion of net securities losses in the first nine months
of 2008, $1.3 billion were market disruption-related and $788 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 in the first quarter of 2008.
    
    A $345 million increase in noninterest expense to $1.6 billion, primarily reflecting
higher legal costs.
    23




---



##### 



24




---



##### 



Balance Sheet Analysis
 Securities Realized Losses
 Securities Available For Sale
 September 30,
    
    
    December 31,(In billions)
    
    2008
    
    
    2007Market value
    
    $
    107.7
    
    
    
    115.0Net unrealized loss
    
    $
    (5.8
    )
    
    
    (1.3
    )Memoranda(Market value)Residual interests
    
    $
    0.3
    
    
    
    0.5Retained bonds
Investment grade (a)
    
    $
    14.3
    
    
    
    11.6
  Realized Losses   (In millions)
 Nine Months Ended September 30, 2008Category
    
    Sale
    
    
    Change of Intent
    
    
    TotalSundryPerpetual preferred securities
    
    $
    248
    
    
    
    251
    
    
    
    499Corporate notes
    
    
    12
    
    
    
    275
    
    
    
    287Total
    
    $
    260
    
    
    
    526
    
    
    
    786
   25




---



##### 



Loans  On-Balance Sheet
 2008
    
    
    2007Third
    
    
    Second
    
    
    First
    
    
    Fourth
    
    
    Third(In millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterCommercialCommercial, financial and agricultural
    
    $
    128,411
    
    
    
    122,628
    
    
    
    119,193
    
    
    
    112,509
    
    
    
    109,269Real estate  construction and other
    
    
    17,824
    
    
    
    18,629
    
    
    
    18,597
    
    
    
    18,543
    
    
    
    18,167Real estate  mortgage
    
    
    27,970
    
    
    
    27,191
    
    
    
    26,370
    
    
    
    23,846
    
    
    
    21,514Lease financing
    
    
    23,725
    
    
    
    24,605
    
    
    
    23,637
    
    
    
    23,913
    
    
    
    23,966Foreign
    
    
    32,344
    
    
    
    35,168
    
    
    
    33,616
    
    
    
    29,540
    
    
    
    26,471Total commercial
    
    
    230,274
    
    
    
    228,221
    
    
    
    221,413
    
    
    
    208,351
    
    
    
    199,387ConsumerReal estate secured
    
    
    224,842
    
    
    
    230,520
    
    
    
    230,197
    
    
    
    227,719
    
    
    
    225,355Student loans
    
    
    10,335
    
    
    
    9,945
    
    
    
    9,324
    
    
    
    8,149
    
    
    
    7,742Installment loans
    
    
    26,433
    
    
    
    29,261
    
    
    
    27,437
    
    
    
    25,635
    
    
    
    24,763Total consumer
    
    
    261,610
    
    
    
    269,726
    
    
    
    266,958
    
    
    
    261,503
    
    
    
    257,860Total loans
    
    
    491,884
    
    
    
    497,947
    
    
    
    488,371
    
    
    
    469,854
    
    
    
    457,247Unearned income
    
    
    (9,511
    )
    
    
    (9,749
    )
    
    
    (7,889
    )
    
    
    (7,900
    )
    
    
    (8,041
    )Loans, net (On-balance sheet)
    
    $
    482,373
    
    
    
    488,198
    
    
    
    480,482
    
    
    
    461,954
    
    
    
    449,206
 Loans  Managed Portfolio (Including on-balance sheet)
 2008
    
    
    2007Third
    
    
    Second
    
    
    First
    
    
    Fourth
    
    
    Third(In millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterCommercial
    
    $
    231,664
    
    
    
    230,550
    
    
    
    224,875
    
    
    
    217,896
    
    
    
    213,434Real estate secured
    
    
    246,055
    
    
    
    255,190
    
    
    
    254,685
    
    
    
    250,520
    
    
    
    242,526Student loans
    
    
    14,367
    
    
    
    12,718
    
    
    
    12,148
    
    
    
    11,012
    
    
    
    12,618Installment loans
    
    
    35,271
    
    
    
    33,710
    
    
    
    31,571
    
    
    
    30,487
    
    
    
    29,365Total managed portfolio
    
    $
    527,357
    
    
    
    532,168
    
    
    
    523,279
    
    
    
    509,915
    
    
    
    497,943
 Loans
   
    
    Commercial loans represented 47 percent and consumer loans 53 percent of the loan portfolio.
 o
    
    71 percent of the commercial loan portfolio was secured by collateral.o
    
    98 percent of the consumer loan portfolio was either secured by collateral or
guaranteed.
 26




---



##### 




    
    Of our $224.8 billion consumer real estate loan portfolio:
 o
    
    84 percent is secured by a first lien.o
    
    83 percent has an original loan-to-value ratio of 80 percent or less.o
    
    95 percent has an original loan-to-value ratio of 90 percent or less.o
    
    13 percent of the home equity and prime equity portfolios have an original
loan-to-value ratio greater than 90 percent; of which 41 percent are in the first lien
position.
 
    
    $2.8 billion were reduced documentation Alt-A loans, which includes $2.0 billion of
Corporate and Investment Bank non-branch originated mortgages.
  Pick-a-Payment Loans
    27




---



##### 



Deferred Interest by Original LTV
 Deferred Interest by Original LTV
 2008
    
    
    2007Third
    
    
    Second
    
    
    First
    
    
    Fourth(In millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterAt or below 80%60% or less
    
    $
    353
    
    
    
    343
    
    
    
    329
    
    
    
    30560.01% to 70%
    
    
    469
    
    
    
    456
    
    
    
    434
    
    
    
    40270.01% to 80%
    
    
    1,178
    
    
    
    1,149
    
    
    
    1,090
    
    
    
    991Subtotal
    
    
    2,000
    
    
    
    1,948
    
    
    
    1,853
    
    
    
    1,69880.01% to 85%
    
    
    1,071
    
    
    
    1,057
    
    
    
    1,033
    
    
    
    93585.01% to 90%
    
    
    714
    
    
    
    614
    
    
    
    466
    
    
    
    327Greater than 90%
    
    
    355
    
    
    
    266
    
    
    
    174
    
    
    
    129Subtotal
    
    
    2,140
    
    
    
    1,937
    
    
    
    1,673
    
    
    
    1,391Total deferred interest
    
    $
    4,140
    
    
    
    3,885
    
    
    
    3,526
    
    
    
    3,089
   28




---



##### 



Pick-a-Payment Outstandings Data
 Pick-a-Payment Outstandings Data   (In millions)
 September 30, 2008Current LTV -
    
    
    Original
    
    
    CurrentRegion
    
    Outstandings
    
    
    Original LTV
    
    
    AVM
    
    
    FICO
    
    
    FICOCentral Valley
    
    $
    9,833
    
    
    
    72
    
    
    
    132
    
    
    
    667
    
    
    
    646Inland Empire
    
    
    10,938
    
    
    
    71
    
    
    
    115
    
    
    
    664
    
    
    
    645Total California
    
    
    69,300
    
    
    
    70
    
    
    
    104
    
    
    
    668
    
    
    
    654Florida
    
    
    11,853
    
    
    
    71
    
    
    
    92
    
    
    
    683
    
    
    
    656New Jersey
    
    
    5,416
    
    
    
    71
    
    
    
    76
    
    
    
    691
    
    
    
    680Arizona
    
    
    2,993
    
    
    
    72
    
    
    
    100
    
    
    
    681
    
    
    
    668Texas
    
    
    2,839
    
    
    
    75
    
    
    
    62
    
    
    
    679
    
    
    
    663Other states
    
    
    26,303
    
    
    
    72
    
    
    
    79
    
    
    
    687
    
    
    
    674Total Pick-a-Payment
    
    $
    118,704
    
    
    
    71
    
    
    
    95
    
    
    
    675
    
    
    
    661
 Pick-a-Payment Asset Quality
 Pick-a-Payment Asset Quality
 2008
    
    
    2007Third
    
    
    Second
    
    
    First
    
    
    Fourth($ in millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterPeriod-end
loans, net of unearned
    
    $
    119,842
    
    
    
    123,198
    
    
    
    122,349
    
    
    
    120,816Allowance
for loan losses
    
    
    8,648
    
    
    
    5,214
    
    
    
    1,963
    
    
    
    824Nonperforming assets
    
    $
    8,989
    
    
    
    7,049
    
    
    
    4,623
    
    
    
    3,052as % of
loans, net and foreclosed properties
    
    
    7.47
    %
    
    
    5.71
    
    
    
    3.77
    
    
    
    2.52Nonperforming
loans (NPLs)
    
    $
    8,531
    
    
    
    6,743
    
    
    
    4,386
    
    
    
    2,882as % of loans
    
    
    7.12
    %
    
    
    5.47
    
    
    
    3.58
    
    
    
    2.39Net charge-offs
    
    $
    810
    
    
    
    508
    
    
    
    240
    
    
    
    93as % of average loans, net
    
    
    2.67
    %
    
    
    1.65
    
    
    
    0.78
    
    
    
    0.31Allowance as
a % of loans
    
    
    7.22
    
    
    
    4.23
    
    
    
    1.60
    
    
    
    0.68Allowance as
a % of NPLs
    
    
    101
    %
    
    
    77
    
    
    
    45
    
    
    
    2930+ days
past due
    
    
    4.99
    %
    
    
    3.92
    
    
    
    3.62
    
    
    
    3.6760+ days
past due
    
    
    1.66
    %
    
    
    1.28
    
    
    
    1.12
    
    
    
    1.02Average
original FICO
    
    
    675
    
    
    
    675
    
    
    
    674
    
    
    
    674Current
average FICO
    
    
    661
    
    
    
    662
    
    
    
    664
    
    
    
    666Average
original LTV
    
    
    71
    %
    
    
    71
    
    
    
    71
    
    
    
    71Current
average LTV
    
    
    95
    %
    
    
    85
    
    
    
    78
    
    
    
    72
   29




---



##### 



Asset Quality
 Asset Quality
 2008
    
    
    2007Third
    
    
    Second
    
    
    First
    
    
    Fourth
    
    
    Third(In millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterNonperforming assetsNonaccrual loans
    
    $
    13,476
    
    
    
    11,049
    
    
    
    7,788
    
    
    
    4,995
    
    
    
    2,715Troubled debt restructurings (a)
    
    
    646
    
    
    
    248
    
    
    
    48
    
    
    
    -
    
    
    
    -Foreclosed properties
    
    
    860
    
    
    
    631
    
    
    
    530
    
    
    
    389
    
    
    
    334Total nonperforming assets
    
    $
    14,982
    
    
    
    11,928
    
    
    
    8,366
    
    
    
    5,384
    
    
    
    3,049as % of loans, net and foreclosed properties
    
    
    3.10
    %
    
    
    2.44
    
    
    
    1.74
    
    
    
    1.16
    
    
    
    0.68Nonperforming assets in loans held for sale
    
    $
    26
    
    
    
    63
    
    
    
    5
    
    
    
    62
    
    
    
    59Total nonperforming assets in loans
and in loans held for sale
    
    $
    15,008
    
    
    
    11,991
    
    
    
    8,371
    
    
    
    5,446
    
    
    
    3,108as % of loans, net, foreclosed properties and
loans held for sale
    
    
    3.05
    %
    
    
    2.41
    
    
    
    1.70
    
    
    
    1.14
    
    
    
    0.66Provision for credit losses
    
    $
    6,629
    
    
    
    5,567
    
    
    
    2,831
    
    
    
    1,497
    
    
    
    408Allowance for credit losses
    
    $
    15,605
    
    
    
    10,956
    
    
    
    6,767
    
    
    
    4,717
    
    
    
    3,691Allowance for loan lossesas % of loans, net
    
    
    3.18
    %
    
    
    2.20
    
    
    
    1.37
    
    
    
    0.98
    
    
    
    0.78as % of nonaccrual and restructured loans (b)
    
    
    109
    
    
    
    95
    
    
    
    84
    
    
    
    90
    
    
    
    129as % of nonperforming assets (b)
    
    
    102
    
    
    
    90
    
    
    
    78
    
    
    
    84
    
    
    
    115Allowance for credit lossesas % of loans, net
    
    
    3.24
    %
    
    
    2.24
    
    
    
    1.41
    
    
    
    1.02
    
    
    
    0.82Net charge-offs
    
    $
    1,872
    
    
    
    1,309
    
    
    
    765
    
    
    
    461
    
    
    
    206Commercial, as % of average commercial loans
    
    
    1.05
    %
    
    
    0.88
    
    
    
    0.48
    
    
    
    0.34
    
    
    
    0.08Consumer, as % of average consumer loans
    
    
    1.97
    
    
    
    1.26
    
    
    
    0.79
    
    
    
    0.46
    
    
    
    0.27Total, as % of average loans, net
    
    
    1.57
    %
    
    
    1.10
    
    
    
    0.66
    
    
    
    0.41
    
    
    
    0.19Past due accruing loans, 90 days and over
    
    $
    1,119
    
    
    
    1,101
    
    
    
    866
    
    
    
    708
    
    
    
    590Commercial, as a % of loans, net
    
    
    0.07
    %
    
    
    0.11
    
    
    
    0.05
    
    
    
    0.05
    
    
    
    0.04Consumer, as a % of loans, net
    
    
    0.37
    %
    
    
    0.32
    
    
    
    0.28
    
    
    
    0.23
    
    
    
    0.20
 
 Nonperforming Assets
 30




---



##### 



Nonperforming Assets
 2008
    
    
    2007Third
    
    
    Second
    
    
    First
    
    
    Fourth
    
    
    Third(In millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterNonaccrual LoansCommercial:Commercial, financial and agricultural
    
    $
    1,298
    
    
    
    1,229
    
    
    
    908
    
    
    
    602
    
    
    
    354Commercial real estate  construction
and mortgage
    
    
    2,836
    
    
    
    2,203
    
    
    
    1,750
    
    
    
    1,059
    
    
    
    289Total commercial
    
    
    4,134
    
    
    
    3,432
    
    
    
    2,658
    
    
    
    1,661
    
    
    
    643Consumer:Real estate secured:First lien
    
    
    9,197
    
    
    
    7,430
    
    
    
    5,015
    
    
    
    3,234
    
    
    
    1,986Second lien
    
    
    110
    
    
    
    147
    
    
    
    75
    
    
    
    58
    
    
    
    41Installment and other loans (a)
    
    
    35
    
    
    
    40
    
    
    
    40
    
    
    
    42
    
    
    
    45Total consumer
    
    
    9,342
    
    
    
    7,617
    
    
    
    5,130
    
    
    
    3,334
    
    
    
    2,072Total nonaccrual loans
    
    
    13,476
    
    
    
    11,049
    
    
    
    7,788
    
    
    
    4,995
    
    
    
    2,715Troubled debt restructurings (b)
    
    
    646
    
    
    
    248
    
    
    
    48
    
    
    
    -
    
    
    
    -Foreclosed properties
    
    
    860
    
    
    
    631
    
    
    
    530
    
    
    
    389
    
    
    
    334Total nonperforming assets
    
    $
    14,982
    
    
    
    11,928
    
    
    
    8,366
    
    
    
    5,384
    
    
    
    3,049As % of loans, net, and foreclosed properties (c)
    
    
    3.10
    %
    
    
    2.44
    
    
    
    1.74
    
    
    
    1.16
    
    
    
    0.68Nonperforming assets included in
loans held for saleCommercial
    
    $
    21
    
    
    
    56
    
    
    
    -
    
    
    
    -
    
    
    
    -Consumer
    
    
    5
    
    
    
    7
    
    
    
    5
    
    
    
    62
    
    
    
    50Total nonaccrual loans
    
    
    26
    
    
    
    63
    
    
    
    5
    
    
    
    62
    
    
    
    50Foreclosed properties
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    9Total nonperforming assets included in
loans held for sale
    
    
    26
    
    
    
    63
    
    
    
    5
    
    
    
    62
    
    
    
    59Nonperforming assets included in loans
and in loans held for sale
    
    $
    15,008
    
    
    
    11,991
    
    
    
    8,371
    
    
    
    5,446
    
    
    
    3,108As % of loans, net, foreclosed properties and
loans held for sale (d)
    
    
    3.05
    %
    
    
    2.41
    
    
    
    1.70
    
    
    
    1.14
    
    
    
    0.66Past due loans, 90 days and over,
and nonaccrual loansAccruing loans past due 90 days and over
    
    $
    1,119
    
    
    
    1,101
    
    
    
    866
    
    
    
    708
    
    
    
    590Nonaccrual loans
    
    
    13,476
    
    
    
    11,049
    
    
    
    7,788
    
    
    
    4,995
    
    
    
    2,715Total past due loans 90 days and over,
and nonaccrual loans
    
    $
    14,595
    
    
    
    12,150
    
    
    
    8,654
    
    
    
    5,703
    
    
    
    3,305Commercial, as a % of loans, net
    
    
    1.96
    %
    
    
    1.69
    
    
    
    1.31
    
    
    
    0.89
    
    
    
    0.38Consumer, as a % of loans, net
    
    
    3.91
    %
    
    
    3.12
    
    
    
    2.19
    
    
    
    1.49
    
    
    
    1.00
 
  31




---



##### 



Past Due Loans
 Charge-offs
 2008
    
    
    2007Third
    
    
    Second
    
    
    First
    
    
    Fourth
    
    
    Third(In millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterLoan losses:Commercial, financial and agricultural
    
    $
    (286
    )
    
    
    (254
    )
    
    
    (171
    )
    
    
    (67
    )
    
    
    (41
    )Commercial real estate  construction and mortgage
    
    
    (279
    )
    
    
    (216
    )
    
    
    (81
    )
    
    
    (117
    )
    
    
    (5
    )Total commercial
    
    
    (565
    )
    
    
    (470
    )
    
    
    (252
    )
    
    
    (184
    )
    
    
    (46
    )Real estate secured
    
    
    (1,087
    )
    
    
    (700
    )
    
    
    (351
    )
    
    
    (156
    )
    
    
    (59
    )Student loans
    
    
    (29
    )
    
    
    (3
    )
    
    
    (3
    )
    
    
    (4
    )
    
    
    (5
    )Installment and other loans (a)
    
    
    (299
    )
    
    
    (230
    )
    
    
    (242
    )
    
    
    (225
    )
    
    
    (168
    )Total consumer
    
    
    (1,415
    )
    
    
    (933
    )
    
    
    (596
    )
    
    
    (385
    )
    
    
    (232
    )Total loan losses
    
    
    (1,980
    )
    
    
    (1,403
    )
    
    
    (848
    )
    
    
    (569
    )
    
    
    (278
    )Loan recoveries:Commercial, financial and agricultural
    
    
    16
    
    
    
    15
    
    
    
    14
    
    
    
    22
    
    
    
    9Commercial real estate  construction and mortgage
    
    
    2
    
    
    
    -
    
    
    
    1
    
    
    
    -
    
    
    
    3Total commercial
    
    
    18
    
    
    
    15
    
    
    
    15
    
    
    
    22
    
    
    
    12Real estate secured
    
    
    27
    
    
    
    18
    
    
    
    10
    
    
    
    9
    
    
    
    12Student loans
    
    
    1
    
    
    
    1
    
    
    
    1
    
    
    
    2
    
    
    
    3Installment and other loans (a)
    
    
    62
    
    
    
    60
    
    
    
    57
    
    
    
    75
    
    
    
    45Total consumer
    
    
    90
    
    
    
    79
    
    
    
    68
    
    
    
    86
    
    
    
    60Total loan recoveries
    
    
    108
    
    
    
    94
    
    
    
    83
    
    
    
    108
    
    
    
    72Net charge-offs:Commercial, financial and agricultural
    
    
    (270
    )
    
    
    (239
    )
    
    
    (157
    )
    
    
    (45
    )
    
    
    (32
    )Commercial real estate  construction and mortgage
    
    
    (277
    )
    
    
    (216
    )
    
    
    (80
    )
    
    
    (117
    )
    
    
    (2
    )Total commercial
    
    
    (547
    )
    
    
    (455
    )
    
    
    (237
    )
    
    
    (162
    )
    
    
    (34
    )Real estate secured
    
    
    (1,060
    )
    
    
    (682
    )
    
    
    (341
    )
    
    
    (147
    )
    
    
    (47
    )Student loans
    
    
    (28
    )
    
    
    (2
    )
    
    
    (2
    )
    
    
    (2
    )
    
    
    (2
    )Installment and other loans (a)
    
    
    (237
    )
    
    
    (170
    )
    
    
    (185
    )
    
    
    (150
    )
    
    
    (123
    )Total consumer
    
    
    (1,325
    )
    
    
    (854
    )
    
    
    (528
    )
    
    
    (299
    )
    
    
    (172
    )Net charge-offs
    
    $
    (1,872
    )
    
    
    (1,309
    )
    
    
    (765
    )
    
    
    (461
    )
    
    
    (206
    )Net charge-offs as a % of average loans, net(b)Commercial, financial and agricultural
    
    
    0.66
    %
    
    
    0.60
    
    
    
    0.41
    
    
    
    0.12
    
    
    
    0.10Commercial real estate  construction and mortgage
    
    
    2.41
    
    
    
    1.89
    
    
    
    0.73
    
    
    
    1.12
    
    
    
    0.02Total commercial
    
    
    1.05
    
    
    
    0.88
    
    
    
    0.48
    
    
    
    0.34
    
    
    
    0.08Real estate secured
    
    
    1.85
    
    
    
    1.18
    
    
    
    0.59
    
    
    
    0.26
    
    
    
    0.08Student loans
    
    
    1.03
    
    
    
    0.07
    
    
    
    0.08
    
    
    
    0.10
    
    
    
    0.14Installment and other loans (a)
    
    
    3.18
    
    
    
    2.36
    
    
    
    2.76
    
    
    
    2.35
    
    
    
    1.99Total consumer
    
    
    1.97
    
    
    
    1.26
    
    
    
    0.79
    
    
    
    0.46
    
    
    
    0.27Total, as % of average loans, net
    
    
    1.57
    %
    
    
    1.10
    
    
    
    0.66
    
    
    
    0.41
    
    
    
    0.19Consumer real estate secured net charge-offs:First lien
    
    $
    (952
    )
    
    
    (592
    )
    
    
    (291
    )
    
    
    (122
    )
    
    
    (32
    )Second lien
    
    
    (108
    )
    
    
    (90
    )
    
    
    (50
    )
    
    
    (25
    )
    
    
    (15
    )Total consumer real estate secured net charge-offs
    
    $
    (1,060
    )
    
    
    (682
    )
    
    
    (341
    )
    
    
    (147
    )
    
    
    (47
    )
 
 Net Charge-offs
 32




---



##### 



Allowance for Credit Losses
 
 2008
    
    
    2007Third
    
    
    Second
    
    
    First
    
    
    Fourth
    
    
    Third(In millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterAllowance for credit losses (a)Allowance for loan losses, beginning of period
    
    $
    10,744
    
    
    
    6,567
    
    
    
    4,507
    
    
    
    3,505
    
    
    
    3,390Net charge-offs
    
    
    (1,872
    )
    
    
    (1,309
    )
    
    
    (765
    )
    
    
    (461
    )
    
    
    (206
    )Allowance relating to loans acquired, transferred
to loans held for sale or sold
    
    
    (108
    )
    
    
    (69
    )
    
    
    (16
    )
    
    
    (10
    )
    
    
    (63
    )Provision for credit losses related to loans
transferred to loans held for sale or sold (b)
    
    
    17
    
    
    
    51
    
    
    
    7
    
    
    
    6
    
    
    
    3Provision for credit losses
    
    
    6,570
    
    
    
    5,504
    
    
    
    2,834
    
    
    
    1,467
    
    
    
    381Allowance for loan losses, end of period
    
    
    15,351
    
    
    
    10,744
    
    
    
    6,567
    
    
    
    4,507
    
    
    
    3,505Reserve for unfunded lending commitments,
beginning of period
    
    
    212
    
    
    
    200
    
    
    
    210
    
    
    
    186
    
    
    
    162Provision for credit losses
    
    
    42
    
    
    
    12
    
    
    
    (10
    )
    
    
    24
    
    
    
    24Reserve for unfunded lending commitments,
end of period
    
    
    254
    
    
    
    212
    
    
    
    200
    
    
    
    210
    
    
    
    186Allowance for credit losses
    
    $
    15,605
    
    
    
    10,956
    
    
    
    6,767
    
    
    
    4,717
    
    
    
    3,691Allowance for loan lossesas % of loans, net
    
    
    3.18
    %
    
    
    2.20
    
    
    
    1.37
    
    
    
    0.98
    
    
    
    0.78as % of nonaccrual and restructured loans (c)
    
    
    109
    
    
    
    95
    
    
    
    84
    
    
    
    90
    
    
    
    129as % of nonperforming assets (c)
    
    
    102
    
    
    
    90
    
    
    
    78
    
    
    
    84
    
    
    
    115Allowance for credit lossesas % of loans, net
    
    
    3.24
    %
    
    
    2.24
    
    
    
    1.41
    
    
    
    1.02
    
    
    
    0.82
 
 Provision and Allowance for Credit Losses
 
    
    A $9.8 billion higher reserve for the consumer portfolio, including Pick-a-Payment,
home equity, traditional mortgage, and auto portfolios on significant market weakness and
changing consumer behaviors. Of this amount, $7.8 billion related to the Pick-a-Payment
portfolio.
    
    $448 million higher reserve on the commercial and industrial portfolio on higher loss
frequency and severity expectations.
    
    $164 million higher reserve on the commercial real estate portfolio, including $94
million on impaired loans.
    
    $605 million higher unallocated reserves due to increased credit risk uncertainty
stemming from economic and other market environmental factors.
   33




---



##### 



Composite Home Price Indices Data
 Composite Home Price Indices Data
 
 2008Third
    
    
    Second
    
    
    FirstQuarter
    
    
    Quarter
    
    
    QuarterPortfolio-weighted peak to trough HPINationwide
    
    
    (27.6
    )%
    
    
    (20.9
    )
    
    
    (12.4
    )California
    
    
    (30.2
    )
    
    
    (23.1
    )
    
    
    (13.9
    )Florida
    
    
    (36.3
    )%
    
    
    (28.6
    )
    
    
    (16.4
    )Housing price trough occurs in
    
    Mid-2010
    
    
    Mid-2010
    
    
    Mid-2009Expected cumulative loss over remaining life
    
    
    22
    %
    
    
    12
    
    
    
    8
   Table 11: Allowance for Credit Losses Corporate Results of Operations
    Loans Held for Sale
 34




---



##### 




    
    Consumer real estate loans represented $2.1 billion of the amounts transferred. Due to
the market declines and the large liquidity discount applied to consumer real estate
assets, particularly in the subprime, Alt-A and jumbo lending markets, we determined that
the economic benefit of the loans would be maximized by holding the loans in the
portfolio.
    
    Commercial real estate loans represented $3.5 billion of the amounts transferred. These
loans were originated with the intent to sell into commercial mortgage-backed
securitizations. During the second half of 2007, liquidity in the CMBS market
deteriorated precipitously. After considering other potential exit strategies, the
forecasted length of the CMBS market disruption, and the deteriorating prices for this
asset class, we decided that the economic benefit of the loans would be maximized by
holding the loans in the portfolio indefinitely.
    
    Auto loans represented $801 million of the amounts transferred. Liquidity in the auto
loan securitization market diminished in late 2007 and accordingly, we decided that the
economic benefit of the loans would be maximized by holding the loans in the portfolio.
    
    Commercial loans from our leveraged finance business represented $644 million of the
amounts transferred. These are amounts in excess of the amount we intended to retain at
underwriting.
 35




---



##### 



Goodwill
    Critical Accounting Policies: Goodwill Impairment
    36




---



##### 



Goodwill Impairment
 Goodwill Impairment
 
 General
    
    
    General Bank
    
    
    
    
    
    
    CIB
    
    
    CIB
    
    
    
    
    
    
    All OtherBank
    
    
    Retail and Small
    
    
    Wealth
    
    
    Corporate
    
    
    Investment
    
    
    CMG Asset
    
    
    Reporting(Dollars in millions)
    
    Commercial
    
    
    Business
    
    
    Management
    
    
    Lending
    
    
    Banking
    
    
    Management
    
    
    Units (a)
    
    
    TotalSecond quarter impairment
    
    $
    2,526
    
    
    
    -
    
    
    
    -
    
    
    
    2,937
    
    
    
    597
    
    
    
    -
    
    
    
    -
    
    
    
    6,060Third quarter impairment
    
    
    4,557
    
    
    
    12,332
    
    
    
    998
    
    
    
    -
    
    
    
    -
    
    
    
    899
    
    
    
    -
    
    
    
    18,786Total impairment
    
    
    7,083
    
    
    
    12,332
    
    
    
    998
    
    
    
    2,937
    
    
    
    597
    
    
    
    899
    
    
    
    -
    
    
    
    24,846Remaining goodwill at
9/ 30/ 08
    
    $
    -
    
    
    
    11,633
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    231
    
    
    
    6,489
    
    
    
    18,353
  Liquidity and Capital Adequacy
 Executive Summary
   Core Deposits
 Purchased Funds
  37




---



##### 



Long-term Debt
   Stockholders Equity
     38




---



##### 



Credit Lines
 Stockholders Equity
 Dividend and Share Activity
 
 Nine Months EndedSeptember 30,(In millions, except per share data)
    
    2008
    
    
    2007Dividends on common shares
    
    $
    2,190
    
    
    
    3,352Dividends per common share
    
    $
    1.07
    
    
    
    1.76Common shares repurchased
    
    
    1
    
    
    
    22Average diluted common
shares outstanding
    
    
    2,080
    
    
    
    1,918
    Subsidiary Dividends
 39




---



##### 



Regulatory Capital
 Off-Balance Sheet Transactions
 Summary of Off-Balance Sheet Exposures
 
 September 30, 2008
    
    
    December 31, 2007Carrying
    
    
    
    
    
    
    Carrying(In millions)
    
    Amount
    
    
    Exposure
    
    
    Amount
    
    
    ExposureGUARANTEESSecurities and other lending indemnifications
    
    $
    -
    
    
    
    37,652
    
    
    
    -
    
    
    
    59,238Standby letters of credit
    
    
    126
    
    
    
    32,604
    
    
    
    124
    
    
    
    29,295Liquidity agreements
    
    
    643
    
    
    
    25,821
    
    
    
    14
    
    
    
    36,926Loans sold with recourse
    
    
    44
    
    
    
    6,244
    
    
    
    44
    
    
    
    6,710Residual value guarantees
    
    
    -
    
    
    
    1,372
    
    
    
    -
    
    
    
    1,220Written put options
    
    
    2,124
    
    
    
    12,900
    
    
    
    2,001
    
    
    
    15,273Total guarantees
    
    $
    2,937
    
    
    
    116,593
    
    
    
    2,183
    
    
    
    148,662
 Summary of Off-Balance Sheet
Exposures
  Business Segments Parent Business Segments Capital Management
 40




---



##### 



Risk Governance and Administration
 Market Risk Management
  Interest Rate Risk Management
    41




---



##### 



Net Interest Income Sensitivity Policy Period Sensitivity Measurement
 Policy Period
Sensitivity Measurement
 
 Implied
    
    
    PercentFed Funds
    
    
    Fed Funds
    
    
    Net InterestRate at
    
    
    Rate for
    
    
    IncomeSeptember 30, 2008
    
    
    September 2009
    
    
    SensitivityMarket Forward Rate Scenarios (a)
    
    
    2.00
    %
    
    
    1.40
    
    
    
    -High Rate Composite
    
    
    
    
    
    
    3.40
    
    
    
    (1.40
    )Low Rate
    
    
    
    
    
    
    0.90
    
    
    
    0.10
   42




---



##### 



Accounting and Regulatory Matters
  Business Combinations and Noncontrolling Interests Business Combinations Noncontrolling Interests in Consolidated
Financial Statements an amendment of ARB 51.
   43




---



##### 



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
  Transfers of Financial Assets and Consolidation Accounting for Transfers of Financial Assets  an amendment of FASB
Statement No. 140 Amendments to FASB Interpretation No. 46(R)
   Legislative and Regulatory Matters
 44




---



##### 



45




---



##### 



Table 1
 EXPLANATION OF OUR USE OF NON-GAAP FINANCIAL MEASURES
 
     Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(In millions)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Net interest income (GAAP)
    
    $
    4,991
    
    
    
    4,551
    
    
    
    14,033
    
    
    
    13,500Tax-equivalent adjustment
    
    
    48
    
    
    
    33
    
    
    
    155
    
    
    
    108Net interest income (Tax-equivalent)
    
    $
    5,039
    
    
    
    4,584
    
    
    
    14,188
    
    
    
    13,608
 46




---



##### 



Table 2
 SELECTED STATISTICAL DATA
  2008
    
    

    2007Third
    
    
    Second
    
    
    First
    
    
    Fourth
    
    
    Third(Dollars in millions, except per share data)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterPROFITABILITYReturn on average common stockholders equity
    
    
    (157.43
    )%
    
    
    (50.47
    )
    
    
    (3.81
    )
    
    
    0.28
    
    
    
    9.19Return on average total stockholders equity
    
    
    (134.31
    )
    
    
    (43.86
    )
    
    
    (3.39
    )
    
    
    0.28
    
    
    
    9.19Net interest margin (a)
    
    
    2.94
    
    
    
    2.58
    
    
    
    2.92
    
    
    
    2.88
    
    
    
    2.92Fee and other income as % of total revenue
    
    
    12.70
    
    
    
    42.15
    
    
    
    36.62
    
    
    
    36.99
    
    
    
    39.02Effective income tax rate
    
    
    10.04
    %
    
    
    18.06
    
    
    
    26.02
    
    
    
    122.05
    
    
    
    27.33ASSET QUALITYAllowance for loan losses as % of loans, net
    
    
    3.18
    %
    
    
    2.20
    
    
    
    1.37
    
    
    
    0.98
    
    
    
    0.78Allowance for loan losses as % of nonperforming assets (b)
    
    
    102
    
    
    
    90
    
    
    
    78
    
    
    
    84
    
    
    
    115Allowance for credit losses as % of loans, net
    
    
    3.24
    
    
    
    2.24
    
    
    
    1.41
    
    
    
    1.02
    
    
    
    0.82Net charge-offs as % of average loans, net
    
    
    1.57
    
    
    
    1.10
    
    
    
    0.66
    
    
    
    0.41
    
    
    
    0.19Nonperforming assets as % of loans, net,
foreclosed properties and loans held for sale
    
    
    3.05
    %
    
    
    2.41
    
    
    
    1.70
    
    
    
    1.14
    
    
    
    0.66CAPITAL ADEQUACYTier 1 capital ratio
    
    
    7.49
    %
    
    
    8.00
    
    
    
    7.42
    
    
    
    7.35
    
    
    
    7.10Total capital ratio
    
    
    12.40
    
    
    
    12.74
    
    
    
    12.05
    
    
    
    11.82
    
    
    
    10.84Leverage
    
    
    5.70
    
    
    
    6.57
    
    
    
    6.18
    
    
    
    6.09
    
    
    
    6.10Tangible capital ratio
    
    
    4.00
    
    
    
    4.68
    
    
    
    4.31
    
    
    
    4.29
    
    
    
    4.19Tangible capital ratio (c)
    
    
    4.56
    %
    
    
    5.07
    
    
    
    4.59
    
    
    
    4.50
    
    
    
    4.56OTHER DATAFTE employees
    
    
    117,227
    
    
    
    119,952
    
    
    
    120,378
    
    
    
    121,890
    
    
    
    109,724Total financial centers/brokerage offices
    
    
    4,820
    
    
    
    4,820
    
    
    
    4,850
    
    
    
    4,894
    
    
    
    4,167ATMs
    
    
    5,303
    
    
    
    5,277
    
    
    
    5,308
    
    
    
    5,139
    
    
    
    5,123Actual common shares (In millions) (d)
    
    
    2,161
    
    
    
    2,159
    
    
    
    1,992
    
    
    
    1,980
    
    
    
    1,901Common stock price
    
    $
    3.50
    
    
    
    15.53
    
    
    
    27.00
    
    
    
    38.03
    
    
    
    50.15Market capitalization (d)
    
    $
    7,563
    
    
    
    33,527
    
    
    
    53,782
    
    
    
    75,302
    
    
    
    95,326
     47




---



##### 



Table 3
 SUMMARIES OF INCOME, PER COMMON SHARE AND BALANCE SHEET DATA
 
 2008
    
    
    2007Third
    
    
    Second
    
    
    First
    
    
    Fourth
    
    
    Third(In millions, except per share data)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterSUMMARIES OF INCOMEInterest income
    
    $
    9,400
    
    
    
    8,646
    
    
    
    10,179
    
    
    
    10,910
    
    
    
    10,831Tax-equivalent adjustment
    
    
    48
    
    
    
    54
    
    
    
    53
    
    
    
    44
    
    
    
    33Interest income (a)
    
    
    9,448
    
    
    
    8,700
    
    
    
    10,232
    
    
    
    10,954
    
    
    
    10,864Interest expense
    
    
    4,409
    
    
    
    4,356
    
    
    
    5,427
    
    
    
    6,280
    
    
    
    6,280Net interest income (a)
    
    
    5,039
    
    
    
    4,344
    
    
    
    4,805
    
    
    
    4,674
    
    
    
    4,584Provision for credit losses
    
    
    6,629
    
    
    
    5,567
    
    
    
    2,831
    
    
    
    1,497
    
    
    
    408Net interest income after provision for credit losses (a)
    
    
    (1,590
    )
    
    
    (1,223
    )
    
    
    1,974
    
    
    
    3,177
    
    
    
    4,176Securities gains (losses)
    
    
    (1,978
    )
    
    
    (808
    )
    
    
    (205
    )
    
    
    (320
    )
    
    
    (34
    )Fee and other income
    
    
    2,711
    
    
    
    3,973
    
    
    
    2,982
    
    
    
    3,064
    
    
    
    2,967Merger-related and restructuring expenses
    
    
    697
    
    
    
    251
    
    
    
    241
    
    
    
    187
    
    
    
    36Goodwill impairment
    
    
    18,786
    
    
    
    6,060
    
    
    
    -
    
    
    
    -
    
    
    
    -Other noninterest expense
    
    
    6,062
    
    
    
    6,473
    
    
    
    5,200
    
    
    
    5,599
    
    
    
    4,489Minority interest in income of consolidated subsidiaries
    
    
    (105
    )
    
    
    (18
    )
    
    
    155
    
    
    
    107
    
    
    
    189Income (loss) from continuing operations before
income taxes (benefits) (a)
    
    
    (26,297
    )
    
    
    (10,824
    )
    
    
    (845
    )
    
    
    28
    
    
    
    2,395Income taxes (benefits)
    
    
    (2,647
    )
    
    
    (1,963
    )
    
    
    (234
    )
    
    
    (209
    )
    
    
    656Tax-equivalent adjustment
    
    
    48
    
    
    
    54
    
    
    
    53
    
    
    
    44
    
    
    
    33Income (loss) from continuing operations
    
    
    (23,698
    )
    
    
    (8,915
    )
    
    
    (664
    )
    
    
    193
    
    
    
    1,706Discontinued operations, net of income taxes
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    (142
    )
    
    
    (88
    )Net income (loss)
    
    
    (23,698
    )
    
    
    (8,915
    )
    
    
    (664
    )
    
    
    51
    
    
    
    1,618Dividends on preferred stock
    
    
    191
    
    
    
    193
    
    
    
    43
    
    
    
    -
    
    
    
    -Net income (loss) available to common stockholders
    
    $
    (23,889
    )
    
    
    (9,108
    )
    
    
    (707
    )
    
    
    51
    
    
    
    1,618PER COMMON SHARE DATABasic earningsIncome (loss) from continuing operations
    
    $
    (11.18
    )
    
    
    (4.31
    )
    
    
    (0.36
    )
    
    
    0.10
    
    
    
    0.91Net income (loss) available to common stockholders
    
    
    (11.18
    )
    
    
    (4.31
    )
    
    
    (0.36
    )
    
    
    0.03
    
    
    
    0.86Diluted earnings (b)Income (loss) from continuing operations
    
    
    (11.18
    )
    
    
    (4.31
    )
    
    
    (0.36
    )
    
    
    0.10
    
    
    
    0.90Net income (loss) available to common stockholders
    
    
    (11.18
    )
    
    
    (4.31
    )
    
    
    (0.36
    )
    
    
    0.03
    
    
    
    0.85Cash dividends
    
    $
    0.05
    
    
    
    0.38
    
    
    
    0.64
    
    
    
    0.64
    
    
    
    0.64Average common shares - Basic
    
    
    2,137
    
    
    
    2,111
    
    
    
    1,963
    
    
    
    1,959
    
    
    
    1,885Average common shares - Diluted
    
    
    2,143
    
    
    
    2,119
    
    
    
    1,977
    
    
    
    1,983
    
    
    
    1,910Average common stockholders equityQuarter-to-date
    
    $
    60,370
    
    
    
    72,579
    
    
    
    74,697
    
    
    
    73,599
    
    
    
    69,857Year-to-date
    
    
    69,183
    
    
    
    73,638
    
    
    
    74,697
    
    
    
    70,533
    
    
    
    69,500Book value per common share (c)
    
    
    18.59
    
    
    
    30.25
    
    
    
    36.24
    
    
    
    37.66
    
    
    
    36.90Common stock priceHigh
    
    
    19.06
    
    
    
    30.08
    
    
    
    38.76
    
    
    
    51.80
    
    
    
    52.64Low
    
    
    1.84
    
    
    
    15.53
    
    
    
    25.60
    
    
    
    38.03
    
    
    
    44.94Period-end
    
    $
    3.50
    
    
    
    15.53
    
    
    
    27.00
    
    
    
    38.03
    
    
    
    50.15To earnings ratio (d)
    
    
    (0.22
    ) X
    
    
    (4.10
    )
    
    
    15.52
    
    
    
    11.52
    
    
    
    11.22To book value
    
    
    19
    %
    
    
    51
    
    
    
    75
    
    
    
    101
    
    
    
    136BALANCE SHEET DATAAssets
    
    $
    764,378
    
    
    
    812,433
    
    
    
    808,575
    
    
    
    782,896
    
    
    
    754,168Long-term debt
    
    $
    183,350
    
    
    
    184,401
    
    
    
    175,653
    
    
    
    161,007
    
    
    
    158,584
 (a)
    
    Tax-equivalent.(b)
    
    Calculated using average basic common shares in 2008.(c)
    
    Share count in the calculation includes restricted stock for which the holder receives
dividends and has full voting rights.(d)
    
    Based on diluted earnings per common share.
 48




---



##### 



Table 4
 BUSINESS SEGMENTS (a)
 
 2008
    
    
    2007Third
    
    
    Second
    
    
    First
    
    
    Fourth
    
    
    Third(Dollars in millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterGENERAL BANK COMBINED (b)Net interest income (c)
    
    $
    3,763
    
    
    
    3,697
    
    
    
    3,462
    
    
    
    3,404
    
    
    
    3,466Fee and other income
    
    
    1,003
    
    
    
    1,000
    
    
    
    980
    
    
    
    929
    
    
    
    935Intersegment revenue
    
    
    50
    
    
    
    57
    
    
    
    55
    
    
    
    58
    
    
    
    59Total revenue (c)
    
    
    4,816
    
    
    
    4,754
    
    
    
    4,497
    
    
    
    4,391
    
    
    
    4,460Provision for credit losses
    
    
    1,340
    
    
    
    922
    
    
    
    572
    
    
    
    320
    
    
    
    207Noninterest expense
    
    
    2,127
    
    
    
    2,061
    
    
    
    2,048
    
    
    
    2,037
    
    
    
    1,898Income taxes
    
    
    482
    
    
    
    637
    
    
    
    674
    
    
    
    732
    
    
    
    849Tax-equivalent adjustment
    
    
    10
    
    
    
    10
    
    
    
    11
    
    
    
    11
    
    
    
    11Segment earnings
    
    $
    857
    
    
    
    1,124
    
    
    
    1,192
    
    
    
    1,291
    
    
    
    1,495Economic profit
    
    $
    699
    
    
    
    928
    
    
    
    997
    
    
    
    1,043
    
    
    
    1,190Risk adjusted return on capital
    
    
    25.40
    %
    
    
    33.26
    
    
    
    42.55
    
    
    
    48.00
    
    
    
    54.30Economic capital, average
    
    $
    19,302
    
    
    
    16,777
    
    
    
    12,705
    
    
    
    11,188
    
    
    
    10,904Cash overhead efficiency ratio (c)
    
    
    44.16
    %
    
    
    43.35
    
    
    
    45.55
    
    
    
    46.40
    
    
    
    42.54Lending commitments
    
    $
    128,178
    
    
    
    133,201
    
    
    
    132,805
    
    
    
    133,733
    
    
    
    132,779Average loans, net
    
    
    318,573
    
    
    
    317,969
    
    
    
    312,084
    
    
    
    303,903
    
    
    
    295,188Average core deposits
    
    $
    292,653
    
    
    
    290,313
    
    
    
    297,124
    
    
    
    296,159
    
    
    
    290,099FTE employees
    
    
    53,073
    
    
    
    54,315
    
    
    
    54,739
    
    
    
    55,469
    
    
    
    56,427COMMERCIALNet interest income (c)
    
    $
    1,025
    
    
    
    1,030
    
    
    
    954
    
    
    
    932
    
    
    
    903Fee and other income
    
    
    138
    
    
    
    134
    
    
    
    130
    
    
    
    116
    
    
    
    113Intersegment revenue
    
    
    52
    
    
    
    46
    
    
    
    43
    
    
    
    43
    
    
    
    44Total revenue (c)
    
    
    1,215
    
    
    
    1,210
    
    
    
    1,127
    
    
    
    1,091
    
    
    
    1,060Provision for credit losses
    
    
    235
    
    
    
    180
    
    
    
    174
    
    
    
    178
    
    
    
    121Noninterest expense
    
    
    408
    
    
    
    396
    
    
    
    402
    
    
    
    392
    
    
    
    347Income taxes
    
    
    199
    
    
    
    222
    
    
    
    189
    
    
    
    179
    
    
    
    205Tax-equivalent adjustment
    
    
    10
    
    
    
    10
    
    
    
    11
    
    
    
    11
    
    
    
    11Segment earnings
    
    $
    363
    
    
    
    402
    
    
    
    351
    
    
    
    331
    
    
    
    376Economic profit
    
    $
    226
    
    
    
    234
    
    
    
    218
    
    
    
    239
    
    
    
    255Risk adjusted return on capital
    
    
    27.61
    %
    
    
    28.91
    
    
    
    28.51
    
    
    
    32.92
    
    
    
    35.11Economic capital, average
    
    $
    5,406
    
    
    
    5,253
    
    
    
    5,018
    
    
    
    4,333
    
    
    
    4,197Cash overhead efficiency ratio (c)
    
    
    33.61
    %
    
    
    32.71
    
    
    
    35.65
    
    
    
    35.87
    
    
    
    32.76Average loans, net
    
    $
    89,034
    
    
    
    88,225
    
    
    
    84,829
    
    
    
    82,084
    
    
    
    80,146Average core deposits
    
    $
    40,882
    
    
    
    45,483
    
    
    
    47,904
    
    
    
    46,499
    
    
    
    42,832RETAIL AND SMALL BUSINESSNet interest income (c)
    
    $
    2,738
    
    
    
    2,667
    
    
    
    2,508
    
    
    
    2,472
    
    
    
    2,563Fee and other income
    
    
    865
    
    
    
    866
    
    
    
    850
    
    
    
    813
    
    
    
    822Intersegment revenue
    
    
    (2
    )
    
    
    11
    
    
    
    12
    
    
    
    15
    
    
    
    15Total revenue (c)
    
    
    3,601
    
    
    
    3,544
    
    
    
    3,370
    
    
    
    3,300
    
    
    
    3,400Provision for credit losses
    
    
    1,105
    
    
    
    742
    
    
    
    398
    
    
    
    142
    
    
    
    86Noninterest expense
    
    
    1,719
    
    
    
    1,665
    
    
    
    1,646
    
    
    
    1,645
    
    
    
    1,551Income taxes
    
    
    283
    
    
    
    415
    
    
    
    485
    
    
    
    553
    
    
    
    644Tax-equivalent adjustment
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Segment earnings
    
    $
    494
    
    
    
    722
    
    
    
    841
    
    
    
    960
    
    
    
    1,119Economic profit
    
    $
    473
    
    
    
    694
    
    
    
    779
    
    
    
    804
    
    
    
    935Risk adjusted return on capital
    
    
    24.54
    %
    
    
    35.24
    
    
    
    51.71
    
    
    
    57.53
    
    
    
    66.31Economic capital, average
    
    $
    13,896
    
    
    
    11,524
    
    
    
    7,687
    
    
    
    6,855
    
    
    
    6,707Cash overhead efficiency ratio (c)
    
    
    47.71
    %
    
    
    46.99
    
    
    
    48.86
    
    
    
    49.88
    
    
    
    45.59Average loans, net
    
    $
    229,539
    
    
    
    229,744
    
    
    
    227,255
    
    
    
    221,819
    
    
    
    215,042Average core deposits
    
    $
    251,771
    
    
    
    244,830
    
    
    
    249,220
    
    
    
    249,660
    
    
    
    247,267
    (Continued)
 49




---



##### 



Table 4
 BUSINESS SEGMENTS
 
 2008
    
    
    2007Third
    
    
    Second
    
    
    First
    
    
    Fourth
    
    
    Third(Dollars in millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterWEALTH MANAGEMENTNet interest income (a)
    
    $
    194
    
    
    
    201
    
    
    
    180
    
    
    
    181
    
    
    
    184Fee and other income
    
    
    192
    
    
    
    208
    
    
    
    210
    
    
    
    215
    
    
    
    184Intersegment revenue
    
    
    2
    
    
    
    3
    
    
    
    5
    
    
    
    3
    
    
    
    4Total revenue (a)
    
    
    388
    
    
    
    412
    
    
    
    395
    
    
    
    399
    
    
    
    372Provision for credit losses
    
    
    8
    
    
    
    5
    
    
    
    2
    
    
    
    7
    
    
    
    6Noninterest expense
    
    
    246
    
    
    
    252
    
    
    
    246
    
    
    
    249
    
    
    
    240Income taxes
    
    
    50
    
    
    
    57
    
    
    
    53
    
    
    
    53
    
    
    
    46Tax-equivalent adjustment
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Segment earnings
    
    $
    84
    
    
    
    98
    
    
    
    94
    
    
    
    90
    
    
    
    80Economic profit
    
    $
    64
    
    
    
    74
    
    
    
    69
    
    
    
    72
    
    
    
    61Risk adjusted return on capital
    
    
    46.00
    %
    
    
    52.48
    
    
    
    50.93
    
    
    
    58.24
    
    
    
    50.69Economic capital, average
    
    $
    729
    
    
    
    720
    
    
    
    690
    
    
    
    609
    
    
    
    609Cash overhead efficiency ratio (a)
    
    
    63.55
    %
    
    
    61.24
    
    
    
    62.21
    
    
    
    62.55
    
    
    
    64.71Lending commitments
    
    $
    6,376
    
    
    
    6,915
    
    
    
    7,007
    
    
    
    7,011
    
    
    
    7,007Average loans, net
    
    
    22,765
    
    
    
    22,557
    
    
    
    21,794
    
    
    
    21,181
    
    
    
    20,996Average core deposits
    
    $
    14,690
    
    
    
    17,609
    
    
    
    17,920
    
    
    
    17,145
    
    
    
    17,180FTE employees
    
    
    4,516
    
    
    
    4,665
    
    
    
    4,650
    
    
    
    4,712
    
    
    
    4,547
  (Continued)
 50




---



##### 



Table 4  BUSINESS SEGMENTS
 2008
    
    2007Third
    
    Second
    
    First
    
    Fourth
    
    Third(Dollars in millions)
    
    Quarter
    
    Quarter
    
    Quarter
    
    Quarter
    
    QuarterCORPORATE AND INVESTMENT
BANK COMBINED (a)Net interest income (b)
    
    $
    1,043
    
    
    
    1,132
    
    
    
    1,036
    
    
    
    988
    
    
    
    838Fee and other income
    
    
    (416
    )
    
    
    656
    
    
    
    (158
    )
    
    
    (554
    )
    
    
    176Intersegment revenue
    
    
    (57
    )
    
    
    (52
    )
    
    
    (50
    )
    
    
    (50
    )
    
    
    (52
    )Total revenue (b)
    
    
    570
    
    
    
    1,736
    
    
    
    828
    
    
    
    384
    
    
    
    962Provision for credit losses
    
    
    525
    
    
    
    438
    
    
    
    197
    
    
    
    112
    
    
    
    1Noninterest expense
    
    
    1,154
    
    
    
    963
    
    
    
    750
    
    
    
    952
    
    
    
    626Income taxes (benefits)
    
    
    (423
    )
    
    
    104
    
    
    
    (65
    )
    
    
    (268)
    
    
    
    114Tax-equivalent adjustment
    
    
    17
    
    
    
    19
    
    
    
    21
    
    
    
    19
    
    
    
    9Segment earnings (loss)
    
    $

    (703
    )
    
    
    212
    
    
    
    (75
    )
    
    
    (431
    )
    
    
    212Economic profit (loss)
    
    $
    (899
    )
    
    
    8
    
    
    
    (410
    )
    
    
    (744
    )
    
    
    (113
    )Risk adjusted return on capital
    
    
    (13.26
    )%
    
    
    11.22
    
    
    
    (1.45
    )
    
    
    (15.21
    )
    
    
    6.40Economic capital, average
    
    $
    14,732
    
    
    
    13,821
    
    
    
    13,237
    
    
    
    11,262
    
    
    
    9,791Cash overhead efficiency
ratio (b)
    
    
    202.09
    %
    
    
    55.50
    
    
    
    90.58
    
    
    
    247.26
    
    
    
    65.12Lending commitments
    
    $
    99,489
    
    
    
    113,559
    
    
    
    114,114
    
    
    
    118,734
    
    
    
    119,791Average loans, net
    
    
    109,323
    
    
    
    106,680
    
    
    
    101,081
    
    
    
    91,695
    
    
    
    82,979Average core deposits
    
    $
    27,497
    
    
    
    31,686
    
    
    
    33,651
    
    
    
    36,235
    
    
    
    37,208FTE employees
    
    
    5,718
    
    
    
    6,361
    
    
    
    6,302
    
    
    
    6,555
    
    
    
    6,695CORPORATE LENDINGNet interest income (b)
    
    $
    415
    
    
    
    414
    
    
    
    434
    
    
    
    417
    
    
    
    413Fee and other income
    
    
    312
    
    
    
    70
    
    
    
    155
    
    
    
    149
    
    
    
    136Intersegment revenue
    
    
    10
    
    
    
    10
    
    
    
    13
    
    
    
    18
    
    
    
    16Total revenue (b)
    
    
    737
    
    
    
    494
    
    
    
    602
    
    
    
    584
    
    
    
    565Provision for credit losses
    
    
    387
    
    
    
    350
    
    
    
    132
    
    
    
    103
    
    
    
    2Noninterest expense
    
    
    141
    
    
    
    128
    
    
    
    141
    
    
    
    137
    
    
    
    139Income taxes
    
    
    75
    
    
    
    7
    
    
    
    120
    
    
    
    126
    
    
    
    153Tax-equivalent adjustment
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    1Segment earnings
    
    $
    134
    
    
    
    9
    
    
    
    209
    
    
    
    218
    
    
    
    270Economic profit (loss)
    
    $
    109
    
    
    
    (18
    )
    
    
    47
    
    
    
    65
    
    
    
    82Risk adjusted return on capital
    
    
    17.02
    %
    
    
    9.95
    
    
    
    13.83
    
    
    
    15.34
    
    
    
    17.10Economic capital, average
    
    $
    7,175
    
    
    
    6,763
    
    
    
    6,653
    
    
    
    5,943
    
    
    
    5,289Cash overhead efficiency ratio (b)
    
    
    19.07
    %
    
    
    25.99
    
    
    
    23.47
    
    
    
    23.45
    
    
    
    24.56Average loans, net
    
    $
    65,659
    
    
    
    65,459
    
    
    
    64,038
    
    
    
    62,339
    
    
    
    58,528Average core deposits
    
    $
    3,891
    
    
    
    4,455
    
    
    
    4,576
    
    
    
    4,632
    
    
    
    5,120
 
 (Continued)
 51




---



##### 



Table 4  BUSINESS SEGMENTS
 2008
    
    
    2007Third
    
    
    Second
    
    
    First
    
    
    Fourth
    
    
    Third(Dollars in millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterTREASURY AND INTERNATIONAL TRADE
FINANCENet interest income (b)
    
    $
    123
    
    
    
    127
    
    
    
    117
    
    
    
    110
    
    
    
    104Fee and other income
    
    
    235
    
    
    
    224
    
    
    
    217
    
    
    
    217
    
    
    
    218Intersegment revenue
    
    
    (60
    )
    
    
    (52
    )
    
    
    (47
    )
    
    
    (47
    )
    
    
    (46
    )Total revenue (b)
    
    
    298
    
    
    
    299
    
    
    
    287
    
    
    
    280
    
    
    
    276Provision for credit losses
    
    
    1
    
    
    
    -
    
    
    
    (2
    )
    
    
    -
    
    
    
    (1
    )Noninterest expense
    
    
    172
    
    
    
    172
    
    
    
    178
    
    
    
    173
    
    
    
    170Income taxes
    
    
    46
    
    
    
    46
    
    
    
    41
    
    
    
    39
    
    
    
    39Tax-equivalent adjustment
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Segment earnings
    
    $
    79
    
    
    
    81
    
    
    
    70
    
    
    
    68
    
    
    
    68Economic profit
    
    $
    69
    
    
    
    69
    
    
    
    57
    
    
    
    56
    
    
    
    58Risk adjusted return on capital
    
    
    90.88
    %
    
    
    87.60
    
    
    
    74.59
    
    
    
    78.25
    
    
    
    82.99Economic capital, average
    
    $
    340
    
    
    
    363
    
    
    
    361
    
    
    
    334
    
    
    
    318Cash overhead efficiency ratio (b)
    
    
    57.83
    %
    
    
    57.44
    
    
    
    62.20
    
    
    
    62.02
    
    
    
    61.24Average loans, net
    
    $
    14,701
    
    
    
    13,606
    
    
    
    13,461
    
    
    
    12,309
    
    
    
    10,811Average core deposits
    
    $
    14,045
    
    
    
    18,111
    
    
    
    19,619
    
    
    
    20,844
    
    
    
    21,240INVESTMENT BANKINGNet interest income (b)
    
    $
    505
    
    
    
    591
    
    
    
    485
    
    
    
    461
    
    
    
    321Fee and other income
    
    
    (963
    )
    
    
    362
    
    
    
    (530
    )
    
    
    (920
    )
    
    
    (178
    )Intersegment revenue
    
    
    (7
    )
    
    
    (10
    )
    
    
    (16
    )
    
    
    (21
    )
    
    
    (22
    )Total revenue (b)
    
    
    (465
    )
    
    
    943
    
    
    
    (61
    )
    
    
    (480
    )
    
    
    121Provision for credit losses
    
    
    137
    
    
    
    88
    
    
    
    67
    
    
    
    9
    
    
    
    -Noninterest expense
    
    
    841
    
    
    
    663
    
    
    
    431
    
    
    
    642
    
    
    
    317Income taxes (benefits)
    
    
    (544
    )
    
    
    51
    
    
    
    (226
    )
    
    
    (433
    )
    
    
    (78
    )Tax-equivalent adjustment
    
    
    17
    
    
    
    19
    
    
    
    21
    
    
    
    19
    
    
    
    8Segment earnings (loss)
    
    $
    (916
    )
    
    
    122
    
    
    
    (354
    )
    
    
    (717
    )
    
    
    (126
    )Economic profit (loss)
    
    $
    (1,077
    )
    
    
    (43
    )
    
    
    (514
    )
    
    
    (865
    )
    
    
    (253
    )Risk adjusted return on capital
    
    
    (48.27
    )%
    
    
    8.36
    
    
    
    (22.20
    )
    
    
    (57.87
    )
    
    
    (12.95
    )Economic capital, average
    
    $
    7,217
    
    
    
    6,695
    
    
    
    6,223
    
    
    
    4,985
    
    
    
    4,184Cash overhead efficiency ratio (b)
    
    
    (180.56
    )%
    
    
    70.33
    
    
    
    (706.35
    )
    
    
    (133.99
    )
    
    
    265.05Average loans, net
    
    $
    28,963
    
    
    
    27,615
    
    
    
    23,582
    
    
    
    17,047
    
    
    
    13,640Average core deposits
    
    $
    9,561
    
    
    
    9,120
    
    
    
    9,456
    
    
    
    10,759
    
    
    
    10,848
 (Continued)
 52




---



##### 



Table 4  BUSINESS SEGMENTS
 2008
    
    2007Third
    
    Second
    
    First
    
    Fourth
    
    Third(Dollars in millions)
    
    Quarter
    
    Quarter
    
    Quarter
    
    Quarter
    
    QuarterCAPITAL MANAGEMENT COMBINED (a)Net interest income (b)
    
    $
    388
    
    
    
    308
    
    
    
    281
    
    
    
    320
    
    
    
    268Fee and other income
    
    
    968
    
    
    
    1,995
    
    
    
    2,192
    
    
    
    2,210
    
    
    
    1,444Intersegment revenue
    
    
    4
    
    
    
    (8
    )
    
    
    (10
    )
    
    
    (11
    )
    
    
    (8
    )Total revenue (b)
    
    
    1,360
    
    
    
    2,295
    
    
    
    2,463
    
    
    
    2,519
    
    
    
    1,704Provision for credit losses
    
    
    1
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Noninterest expense
    
    
    2,145
    
    
    
    2,328
    
    
    
    1,855
    
    
    
    1,937
    
    
    
    1,241Income taxes (benefits)
    
    
    (287
    )
    
    
    (13
    )
    
    
    221
    
    
    
    212
    
    
    
    169Tax-equivalent adjustment
    
    
    -
    
    
    
    1
    
    
    
    1
    
    
    
    1
    
    
    
    -Segment earnings (loss)
    
    $
    (499
    )
    
    
    (21
    )
    
    
    386
    
    
    
    369
    
    
    
    294Economic profit (loss)
    
    $
    (555
    )
    
    
    (79
    )
    
    
    327
    
    
    
    310
    
    
    
    258Risk adjusted return on capital
    
    
    (97.63)
    %
    
    
    (3.95
    )
    
    
    72.25
    
    
    
    69.09
    
    
    
    88.96Economic capital, average
    
    $
    2,033
    
    
    
    2,118
    
    
    
    2,145
    
    
    
    2,120
    
    
    
    1,310Cash overhead efficiency ratio (b)
    
    
    157.72
    %
    
    
    101.39
    
    
    
    75.34
    
    
    
    76.91
    
    
    
    72.82Lending commitments
    
    $
    1,657
    
    
    
    1,544
    
    
    
    1,348
    
    
    
    1,281
    
    
    
    1,164Average loans, net
    
    
    3,223
    
    
    
    2,878
    
    
    
    2,562
    
    
    
    2,295
    
    
    
    2,142Average core deposits
    
    $
    54,734
    
    
    
    48,647
    
    
    
    43,084
    
    
    
    38,019
    
    
    
    31,489FTE employees
    
    
    29,301
    
    
    
    29,658
    
    
    
    29,824
    
    
    
    29,880
    
    
    
    17,908Assets under management
    
    $
    209,097
    
    
    
    245,940
    
    
    
    258,691
    
    
    
    274,697
    
    
    
    285,422ASSET MANAGEMENTNet interest income (b)
    
    $
    17
    
    
    
    12
    
    
    
    14
    
    
    
    7
    
    
    
    6Fee and other income
    
    
    (572
    )
    
    
    165
    
    
    
    295
    
    
    
    279
    
    
    
    244Intersegment revenue
    
    
    -
    
    
    
    (1
    )
    
    
    (1
    )
    
    
    -
    
    
    
    (1
    )Total revenue (b)
    
    
    (555
    )
    
    
    176
    
    
    
    308
    
    
    
    286
    
    
    
    249Provision for credit losses
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Noninterest expense
    
    
    224
    
    
    
    209
    
    
    
    224
    
    
    
    217
    
    
    
    206Income taxes
    
    
    (284
    )
    
    
    (13
    )
    
    
    31
    
    
    
    26
    
    
    
    15Tax-equivalent adjustment
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Segment earnings (loss)
    
    $
    (495
    )
    
    
    (20
    )
    
    
    53
    
    
    
    43
    
    
    
    28Economic profit (loss)
    
    $
    (501
    )
    
    
    (26
    )
    
    
    47
    
    
    
    37
    
    
    
    22Risk adjusted return on capital
    
    
    (898.80)
    %
    
    
    (37.28
    )
    
    
    99.16
    
    
    
    82.68
    
    
    
    56.73Economic capital, average
    
    $
    219
    
    
    
    217
    
    
    
    216
    
    
    
    205
    
    
    
    194Cash overhead efficiency ratio (b)
    
    
    (40.26)
    %
    
    
    117.86
    
    
    
    72.81
    
    
    
    76.33
    
    
    
    82.50Average loans, net
    
    $
    29
    
    
    
    17
    
    
    
    41
    
    
    
    22
    
    
    
    36Average core deposits
    
    $
    309
    
    
    
    304
    
    
    
    453
    
    
    
    405
    
    
    
    418
 
 (Continued)
 53




---



##### 



Table 4  BUSINESS SEGMENTS
 2008
    
    2007Third
    
    Second
    
    First
    
    Fourth
    
    Third(Dollars in millions)
    
    Quarter
    
    Quarter
    
    Quarter
    
    Quarter
    
    QuarterRETAIL BROKERAGE SERVICESNet interest income (b)
    
    $
    370
    
    
    
    296
    
    
    
    267
    
    
    
    313
    
    
    
    262Fee and other income
    
    
    1,542
    
    
    
    1,832
    
    
    
    1,899
    
    
    
    1,933
    
    
    
    1,202Intersegment revenue
    
    
    4
    
    
    
    (7
    )
    
    
    (9
    )
    
    
    (11
    )
    
    
    (7
    )Total revenue (b)
    
    
    1,916
    
    
    
    2,121
    
    
    
    2,157
    
    
    
    2,235
    
    
    
    1,457Provision for credit losses
    
    
    1
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Noninterest expense
    
    
    1,924
    
    
    
    2,122
    
    
    
    1,634
    
    
    
    1,724
    
    
    
    1,038Income taxes
    
    
    (4
    )
    
    
    -
    
    
    
    190
    
    
    
    185
    
    
    
    154Tax-equivalent adjustment
    
    
    -
    
    
    
    1
    
    
    
    1
    
    
    
    1
    
    
    
    -Segment earnings (loss)
    
    $
    (5
    )
    
    
    (2
    )
    
    
    332
    
    
    
    325
    
    
    
    265Economic profit (loss)
    
    $
    (55
    )
    
    
    (54
    )
    
    
    279
    
    
    
    272
    
    
    
    235Risk adjusted return on capital
    
    
    (0.91
    )%
    
    
    (0.33
    )
    
    
    69.04
    
    
    
    67.36
    
    
    
    94.13Economic capital, average
    
    $
    1,814
    
    
    
    1,901
    
    
    
    1,929
    
    
    
    1,915
    
    
    
    1,116Cash overhead efficiency ratio (b)
    
    
    100.31
    %
    
    
    100.08
    
    
    
    75.79
    
    
    
    77.09
    
    
    
    71.33Average loans, net
    
    $
    3,194
    
    
    
    2,861
    
    
    
    2,521
    
    
    
    2,273
    
    
    
    2,106Average core deposits
    
    $
    54,425
    
    
    
    48,343
    
    
    
    42,631
    
    
    
    37,614
    
    
    
    31,071OTHERNet interest income (b)
    
    $
    1
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Fee and other income
    
    
    (2
    )
    
    
    (2
    )
    
    
    (2
    )
    
    
    (2
    )
    
    
    (2
    )Intersegment revenue
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Total revenue (b)
    
    
    (1
    )
    
    
    (2
    )
    
    
    (2
    )
    
    
    (2
    )
    
    
    (2
    )Provision for credit losses
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Noninterest expense
    
    
    (3
    )
    
    
    (3
    )
    
    
    (3
    )
    
    
    (4
    )
    
    
    (3
    )Income taxes
    
    
    1
    
    
    
    -
    
    
    
    -
    
    
    
    1
    
    
    
    -Tax-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)
 54




---



##### 



Table 4  BUSINESS SEGMENTS
 2008
    
    2007Third
    
    
    Second
    
    
    First
    
    
    Fourth
    
    
    Third(Dollars in millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterPARENTNet interest income (a)
    
    $
    (349
    )
    
    
    (994
    )
    
    
    (154
    )
    
    
    (219
    )
    
    
    (172
    )Fee and other income
    
    
    (1,014
    )
    
    
    (694
    )
    
    
    (447
    )
    
    
    (56
    )
    
    
    194Intersegment revenue
    
    
    1
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    (3
    )Total revenue (a)
    
    
    (1,362
    )
    
    
    (1,688
    )
    
    
    (601
    )
    
    
    (275
    )
    
    
    19Provision for credit losses
    
    
    4,755
    
    
    
    4,202
    
    
    
    2,060
    
    
    
    1,058
    
    
    
    194Noninterest expense
    
    
    390
    
    
    
    869
    
    
    
    301
    
    
    
    424
    
    
    
    484Minority interest
    
    
    (71
    )
    
    
    26
    
    
    
    198
    
    
    
    118
    
    
    
    189Income tax benefits
    
    
    (2,149
    )
    
    
    (2,666
    )
    
    
    (1,042
    )
    
    
    (870
    )
    
    
    (508
    )Tax-equivalent adjustment
    
    
    21
    
    
    
    24
    
    
    
    20
    
    
    
    13
    
    
    
    13Dividends on preferred stock
    
    
    191
    
    
    
    193
    
    
    
    43
    
    
    
    -
    
    
    
    -Segment loss
    
    $
    (4,499
    )
    
    
    (4,336
    )
    
    
    (2,181
    )
    
    
    (1,018
    )
    
    
    (353
    )Economic loss
    
    $
    (1,414
    )
    
    
    (1,635
    )
    
    
    (846
    )
    
    
    (480
    )
    
    
    (319
    )Risk adjusted return on capital
    
    
    (1,259.81
    )%
    
    
    (432.84
    )
    
    
    (169.71
    )
    
    
    (83.56
    )
    
    
    (41.54
    )Economic capital, average
    
    $
    443
    
    
    
    1,482
    
    
    
    1,881
    
    
    
    2,020
    
    
    
    2,403Cash overhead efficiency ratio (a)
    
    
    (21.45
    )%
    
    
    (45.78
    )
    
    
    (32.99
    )
    
    
    (114.15
    )
    
    
    1,976.53Lending commitments
    
    $
    483
    
    
    
    543
    
    
    
    538
    
    
    
    599
    
    
    
    529Average loans, net
    
    
    24,601
    
    
    
    26,650
    
    
    
    28,415
    
    
    
    30,731
    
    
    
    28,496Average core deposits
    
    $
    2,735
    
    
    
    2,415
    
    
    
    2,734
    
    
    
    2,485
    
    
    
    3,033FTE employees
    
    
    24,619
    
    
    
    24,953
    
    
    
    24,863
    
    
    
    25,274
    
    
    
    24,147
  (Continued)
 55




---



##### 



Table 5  BUSINESS SEGMENTS
 Three Months Ended September 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)
    
    $
    3,763
    
    
    
    194
    
    
    
    1,043
    
    
    
    388
    
    
    
    (349
    )
    
    
    (48
    )
    
    
    4,991Fee and other income
    
    
    1,003
    
    
    
    192
    
    
    
    (416
    )
    
    
    968
    
    
    
    (1,014
    )
    
    
    -
    
    
    
    733Intersegment revenue
    
    
    50
    
    
    
    2
    
    
    
    (57
    )
    
    
    4
    
    
    
    1
    
    
    
    -
    
    
    
    -Total revenue (a)
    
    
    4,816
    
    
    
    388
    
    
    
    570
    
    
    
    1,360
    
    
    
    (1,362
    )
    
    
    (48
    )
    
    
    5,724Provision for credit losses
    
    
    1,340
    
    
    
    8
    
    
    
    525
    
    
    
    1
    
    
    
    4,755
    
    
    
    -
    
    
    
    6,629Noninterest expense
    
    
    2,127
    
    
    
    246
    
    
    
    1,154
    
    
    
    2,145
    
    
    
    390
    
    
    
    19,483
    
    
    
    25,545Minority interest
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    (71
    )
    
    
    (34
    )
    
    
    (105
    )Income taxes (benefits)
    
    
    482
    
    
    
    50
    
    
    
    (423
    )
    
    
    (287
    )
    
    
    (2,149
    )
    
    
    (320
    )
    
    
    (2,647
    )Tax-equivalent adjustment
    
    
    10
    
    
    
    -
    
    
    
    17
    
    
    
    -
    
    
    
    21
    
    
    
    (48
    )
    
    
    -Net income (loss)
    
    
    857
    
    
    
    84
    
    
    
    (703
    )
    
    
    (499
    )
    
    
    (4,308
    )
    
    
    (19,129
    )
    
    
    (23,698
    )Dividends on preferred stock
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    191
    
    
    
    -
    
    
    
    191Net income (loss) available
to common stockholders
    
    $
    857
    
    
    
    84
    
    
    
    (703
    )
    
    
    (499
    )
    
    
    (4,499
    )
    
    
    (19,129
    )
    
    
    (23,889
    )Economic profit (loss)
    
    $
    699
    
    
    
    64
    
    
    
    (899
    )
    
    
    (555
    )
    
    
    (1,414
    )
    
    
    -
    
    
    
    (2,105
    )Risk adjusted return on capital
    
    
    25.40
    %
    
    
    46.00
    
    
    
    (13.26
    )
    
    
    (97.63
    )
    
    
    (1,259.81
    )
    
    
    -
    
    
    
    (11.49
    )Economic capital, average
    
    $
    19,302
    
    
    
    729
    
    
    
    14,732
    
    
    
    2,033
    
    
    
    443
    
    
    
    -
    
    
    
    37,239Cash overhead efficiency ratio (a)
    
    
    44.16
    %
    
    
    63.55
    
    
    
    202.09
    
    
    
    157.72
    
    
    
    (21.45
    )
    
    
    -
    
    
    
    103.34Lending commitments
    
    $
    128,178
    
    
    
    6,376
    
    
    
    99,489
    
    
    
    1,657
    
    
    
    483
    
    
    
    -
    
    
    
    236,183Average loans, net
    
    
    318,573
    
    
    
    22,765
    
    
    
    109,323
    
    
    
    3,223
    
    
    
    24,601
    
    
    
    -
    
    
    
    478,485Average core deposits
    
    $
    292,653
    
    
    
    14,690
    
    
    
    27,497
    
    
    
    54,734
    
    
    
    2,735
    
    
    
    -
    
    
    
    392,309FTE employees
    
    
    53,073
    
    
    
    4,516
    
    
    
    5,718
    
    
    
    29,301
    
    
    
    24,619
    
    
    
    -
    
    
    
    117,227
 Three Months Ended September 30, 2007Net Merger-Corporate
    
    
    
    
    
    
    
    
    
    
    Relatedand
    
    
    
    
    
    
    
    
    
    
    andGeneral
    
    
    Wealth
    
    
    Investment
    
    
    Capital
    
    
    
    
    
    
    Restructuring(Dollars in millions)
    
    Bank
    
    
    Management
    
    
    Bank
    
    
    Management
    
    
    Parent
    
    
    Expenses (b)
    
    
    TotalCONSOLIDATEDNet interest income (a)
    
    $
    3,466
    
    
    
    184
    
    
    
    838
    
    
    
    268
    
    
    
    (172
    )
    
    
    (33
    )
    
    
    4,551Fee and other income
    
    
    935
    
    
    
    184
    
    
    
    176
    
    
    
    1,444
    
    
    
    194
    
    
    
    -
    
    
    
    2,933Intersegment revenue
    
    
    59
    
    
    
    4
    
    
    
    (52
    )
    
    
    (8
    )
    
    
    (3
    )
    
    
    -
    
    
    
    -Total revenue (a)
    
    
    4,460
    
    
    
    372
    
    
    
    962
    
    
    
    1,704
    
    
    
    19
    
    
    
    (33
    )
    
    
    7,484Provision for credit losses
    
    
    207
    
    
    
    6
    
    
    
    1
    
    
    
    -
    
    
    
    194
    
    
    
    -
    
    
    
    408Noninterest expense
    
    
    1,898
    
    
    
    240
    
    
    
    626
    
    
    
    1,241
    
    
    
    484
    
    
    
    36
    
    
    
    4,525Minority interest
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    189
    
    
    
    -
    
    
    
    189Income taxes (benefits)
    
    
    849
    
    
    
    46
    
    
    
    114
    
    
    
    169
    
    
    
    (508
    )
    
    
    (14
    )
    
    
    656Tax-equivalent adjustment
    
    
    11
    
    
    
    -
    
    
    
    9
    
    
    
    -
    
    
    
    13
    
    
    
    (33
    )
    
    
    -Net income (loss) from
continuing operations
    
    
    1,495
    
    
    
    80
    
    
    
    212
    
    
    
    294
    
    
    
    (353
    )
    
    
    (22
    )
    
    
    1,706Discontinued operations,
net of income taxes
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    (88
    )
    
    
    -
    
    
    
    (88
    )Net income (loss)
    
    $
    1,495
    
    
    
    80
    
    
    
    212
    
    
    
    294
    
    
    
    (441
    )
    
    
    (22
    )
    
    
    1,618Economic profit (loss)
    
    $
    1,190
    
    
    
    61
    
    
    
    (113
    )
    
    
    258
    
    
    
    (319
    )
    
    
    -
    
    
    
    1,077Risk adjusted return on capital
    
    
    54.30
    %
    
    
    50.69
    
    
    
    6.40
    
    
    
    88.96
    
    
    
    (41.54
    )
    
    
    -
    
    
    
    28.07Economic capital, average
    
    $
    10,904
    
    
    
    609
    
    
    
    9,791
    
    
    
    1,310
    
    
    
    2,403
    
    
    
    -
    
    
    
    25,017Cash overhead efficiency ratio (a)
    
    
    42.54
    %
    
    
    64.71
    
    
    
    65.12
    
    
    
    72.82
    
    
    
    1,976.53
    
    
    
    -
    
    
    
    58.51Lending commitments
    
    $
    132,779
    
    
    
    7,007
    
    
    
    119,791
    
    
    
    1,164
    
    
    
    529
    
    
    
    -
    
    
    
    261,270Average loans, net
    
    
    295,188
    
    
    
    20,996
    
    
    
    82,979
    
    
    
    2,142
    
    
    
    28,496
    
    
    
    -
    
    
    
    429,801Average core deposits
    
    $
    290,099
    
    
    
    17,180
    
    
    
    37,208
    
    
    
    31,489
    
    
    
    3,033
    
    
    
    -
    
    
    
    379,009FTE employees
    
    
    56,427
    
    
    
    4,547
    
    
    
    6,695
    
    
    
    17,908
    
    
    
    24,147
    
    
    
    -
    
    
    
    109,724
 
 (Continued)
 56




---



##### 



Table 4
BUSINESS SEGMENTS
 Nine Months EndedSeptember 30,(Dollars in millions)
    
    2008
    
    
    2007GENERAL BANK COMBINED (a)Net interest income (b)
    
    $
    10,922
    
    
    
    10,240Fee and other income
    
    
    2,983
    
    
    
    2,716Intersegment revenue
    
    
    162
    
    
    
    161Total revenue (b)
    
    
    14,067
    
    
    
    13,117Provision for credit losses
    
    
    2,834
    
    
    
    508Noninterest expense
    
    
    6,236
    
    
    
    5,685Income taxes
    
    
    1,793
    
    
    
    2,495Tax-equivalent adjustment
    
    
    31
    
    
    
    32Segment earnings
    
    $
    3,173
    
    
    
    4,397Economic profit
    
    $
    2,624
    
    
    
    3,442Risk adjusted return on capital
    
    
    32.54
    %
    
    
    53.61Economic capital, average
    
    $
    16,273
    
    
    
    10,800Cash overhead efficiency ratio (b)
    
    
    44.33
    %
    
    
    43.34Lending commitments
    
    $
    128,178
    
    
    
    132,779Average loans, net
    
    
    316,217
    
    
    
    292,003Average core deposits
    
    $
    293,361
    
    
    
    288,209FTE employees
    
    
    53,073
    
    
    
    56,427COMMERCIALNet interest income (b)
    
    $
    3,009
    
    
    
    2,605Fee and other income
    
    
    402
    
    
    
    332Intersegment revenue
    
    
    141
    
    
    
    122Total revenue (b)
    
    
    3,552
    
    
    
    3,059Provision for credit losses
    
    
    589
    
    
    
    314Noninterest expense
    
    
    1,206
    
    
    
    1,061Income taxes
    
    
    610
    
    
    
    583Tax-equivalent adjustment
    
    
    31
    
    
    
    32Segment earnings
    
    $
    1,116
    
    
    
    1,069Economic profit
    
    $
    678
    
    
    
    697Risk adjusted return on capital
    
    
    28.33
    %
    
    
    33.81Economic capital, average
    
    $
    5,226
    
    
    
    4,084Cash overhead efficiency ratio (b)
    
    
    33.95
    %
    
    
    34.70Average loans, net
    
    $
    87,369
    
    
    
    78,086Average core deposits
    
    $
    44,742
    
    
    
    43,187RETAIL AND SMALL BUSINESSNet interest income (b)
    
    $
    7,913
    
    
    
    7,635Fee and other income
    
    
    2,581
    
    
    
    2,384Intersegment revenue
    
    
    21
    
    
    
    39Total revenue (b)
    
    
    10,515
    
    
    
    10,058Provision for credit losses
    
    
    2,245
    
    
    
    194Noninterest expense
    
    
    5,030
    
    
    
    4,624Income taxes
    
    
    1,183
    
    
    
    1,912Tax-equivalent adjustment
    
    
    -
    
    
    
    -Segment earnings
    
    $
    2,057
    
    
    
    3,328Economic profit
    
    $
    1,946
    
    
    
    2,745Risk adjusted return on capital
    
    
    34.53
    %
    
    
    65.65Economic capital, average
    
    $
    11,047
    
    
    
    6,716Cash overhead efficiency ratio (b)
    
    
    47.84
    %
    
    
    45.96Average loans, net
    
    $
    228,848
    
    
    
    213,917Average core deposits
    
    $
    248,619
    
    
    
    245,022
   (Continued)
 57




---



##### 



Table 4
BUSINESS SEGMENTS
  Nine Months EndedSeptember 30,(Dollars in millions)
    
    2008
    
    
    2007WEALTH MANAGEMENTNet interest income (a)
    
    $
    575
    
    
    
    542Fee and other income
    
    
    610
    
    
    
    582Intersegment revenue
    
    
    10
    
    
    
    10Total revenue (a)
    
    
    1,195
    
    
    
    1,134Provision for credit losses
    
    
    15
    
    
    
    9Noninterest expense
    
    
    744
    
    
    
    730Income taxes
    
    
    160
    
    
    
    144Tax-equivalent adjustment
    
    
    -
    
    
    
    -Segment earnings
    
    $
    276
    
    
    
    251Economic profit
    
    $
    207
    
    
    
    192Risk adjusted return on capital
    
    
    49.76
    %
    
    
    53.68Economic capital, average
    
    $
    713
    
    
    
    601Cash overhead efficiency ratio (a)
    
    
    62.31
    %
    
    
    64.40Lending commitments
    
    $
    6,376
    
    
    
    7,007Average loans, net
    
    
    22,374
    
    
    
    20,517Average core deposits
    
    $
    16,732
    
    
    
    17,300FTE employees
    
    
    4,516
    
    
    
    4,547
  (Continued)
 58




---



##### 



Table 4
BUSINESS SEGMENTS
  Nine Months EndedSeptember 30,(Dollars in millions)
    
    2008
    
    
    2007CORPORATE AND INVESTMENT BANK COMBINED (a)Net interest income (b)
    
    $
    3,211
    
    
    
    2,328Fee and other income
    
    
    82
    
    
    
    2,806Intersegment revenue
    
    
    (159
    )
    
    
    (145
    )Total revenue (b)
    
    
    3,134
    
    
    
    4,989Provision for credit losses
    
    
    1,160
    
    
    
    5Noninterest expense
    
    
    2,867
    
    
    
    2,556Income taxes
    
    
    (384
    )
    
    
    857Tax-equivalent adjustment
    
    
    57
    
    
    
    30Segment earnings
    
    $
    (566
    )
    
    
    1,541Economic profit (loss)
    
    $
    (1,301
    )
    
    
    663Risk adjusted return on capital
    
    
    (1.47
    )%
    
    
    20.85Economic capital, average
    
    $
    13,933
    
    
    
    8,995Cash overhead efficiency ratio (b)
    
    
    91.45
    %
    
    
    51.24Lending commitments
    
    $
    99,489
    
    
    
    119,791Average loans, net
    
    
    105,708
    
    
    
    77,736Average core deposits
    
    $
    30,932
    
    
    
    36,077FTE employees
    
    
    5,718
    
    
    
    6,695CORPORATE LENDINGNet interest income (b)
    
    $
    1,263
    
    
    
    1,218Fee and other income
    
    
    537
    
    
    
    403Intersegment revenue
    
    
    33
    
    
    
    53Total revenue (b)
    
    
    1,833
    
    
    
    1,674Provision for credit losses
    
    
    869
    
    
    
    6Noninterest expense
    
    
    410
    
    
    
    439Income taxes
    
    
    202
    
    
    
    447Tax-equivalent adjustment
    
    
    -
    
    
    
    1Segment earnings
    
    $
    352
    
    
    
    781Economic profit
    
    $
    138
    
    
    
    268Risk adjusted return on capital
    
    
    13.68
    %
    
    
    18.29Economic capital, average
    
    $
    6,865
    
    
    
    4,911Cash overhead efficiency ratio (b)
    
    
    22.37
    %
    
    
    26.23Average loans, net
    
    $
    65,054
    
    
    
    56,575Average core deposits
    
    $
    4,306
    
    
    
    5,104
   (Continued)
 59




---



##### 



Table 4
BUSINESS SEGMENTS
  Nine Months EndedSeptember 30,(Dollars in millions)
    
    2008
    
    
    2007TREASURY AND INTERNATIONAL TRADE FINANCENet interest income (b)
    
    $
    367
    
    
    
    295Fee and other income
    
    
    676
    
    
    
    637Intersegment revenue
    
    
    (159
    )
    
    
    (140
    )Total revenue (b)
    
    
    884
    
    
    
    792Provision for credit losses
    
    
    (1
    )
    
    
    (1
    )Noninterest expense
    
    
    522
    
    
    
    514Income taxes
    
    
    133
    
    
    
    102Tax-equivalent adjustment
    
    
    -
    
    
    
    -Segment earnings
    
    $
    230
    
    
    
    177Economic profit
    
    $
    195
    
    
    
    147Risk adjusted return on capital
    
    
    84.26
    %
    
    
    73.81Economic capital, average
    
    $
    355
    
    
    
    313Cash overhead efficiency ratio (b)
    
    
    59.11
    %
    
    
    64.83Average loans, net
    
    $
    13,925
    
    
    
    9,549Average core deposits
    
    $
    17,246
    
    
    
    20,763INVESTMENT BANKINGNet interest income (b)
    
    $
    1,581
    
    
    
    815Fee and other income
    
    
    (1,131
    )
    
    
    1,766Intersegment revenue
    
    
    (33
    )
    
    
    (58
    )Total revenue (b)
    
    
    417
    
    
    
    2,523Provision for credit losses
    
    
    292
    
    
    
    -Noninterest expense
    
    
    1,935
    
    
    
    1,603Income taxes
    
    
    (719
    )
    
    
    308Tax-equivalent adjustment
    
    
    57
    
    
    
    29Segment earnings (loss)
    
    $
    (1,148
    )
    
    
    583Economic profit (loss)
    
    $
    (1,634
    )
    
    
    248Risk adjusted return on capital
    
    
    (21.49
    )%
    
    
    19.79Economic capital, average
    
    $
    6,713
    
    
    
    3,771Cash overhead efficiency ratio (b)
    
    
    463.65
    %
    
    
    63.58Average loans, net
    
    $
    26,729
    
    
    
    11,612Average core deposits
    
    $
    9,380
    
    
    
    10,210
 (Continued)
 60




---



##### 



Table 4
BUSINESS SEGMENTS
  Nine Months EndedSeptember 30,(Dollars in millions)
    
    2008
    
    
    2007CAPITAL MANAGEMENT COMBINED (a)Net interest income (b)
    
    $
    977
    
    
    
    787Fee and other income
    
    
    5,155
    
    
    
    4,457Intersegment revenue
    
    
    (14
    )
    
    
    (27
    )Total revenue (b)
    
    
    6,118
    
    
    
    5,217Provision for credit losses
    
    
    1
    
    
    
    -Noninterest expense
    
    
    6,328
    
    
    
    3,772Income taxes
    
    
    (79
    )
    
    
    527Tax-equivalent adjustment
    
    
    2
    
    
    
    -Segment earnings
    
    $
    (134
    )
    
    
    918Economic profit
    
    $
    (307
    )
    
    
    808Risk adjusted return on capital
    
    
    (8.56
    )%
    
    
    92.17Economic capital, average
    
    $
    2,098
    
    
    
    1,331Cash overhead efficiency ratio (b)
    
    
    103.43
    %
    
    
    72.29Lending commitments
    
    $
    1,657
    
    
    
    1,164Average loans, net
    
    
    2,889
    
    
    
    1,789Average core deposits
    
    $
    48,844
    
    
    
    31,463FTE employees
    
    
    29,301
    
    
    
    17,908Assets under management
    
    $
    209,097
    
    
    
    285,422ASSET MANAGEMENTNet interest income (b)
    
    $
    43
    
    
    
    14Fee and other income
    
    
    (112
    )
    
    
    828Intersegment revenue
    
    
    (2
    )
    
    
    (1
    )Total revenue (b)
    
    
    (71
    )
    
    
    841Provision for credit losses
    
    
    -
    
    
    
    -Noninterest expense
    
    
    657
    
    
    
    648Income taxes
    
    
    (266
    )
    
    
    70Tax-equivalent adjustment
    
    
    -
    
    
    
    -Segment earnings
    
    $
    (462
    )
    
    
    123Economic profit
    
    $
    (480
    )
    
    
    106Risk adjusted return on capital
    
    
    (284.28
    )%
    
    
    80.13Economic capital, average
    
    $
    217
    
    
    
    205Cash overhead efficiency ratio (b)
    
    
    (923.80
    )%
    
    
    76.99Average loans, net
    
    $
    29
    
    
    
    29Average core deposits
    
    $
    355
    
    
    
    354
   (Continued)
 61




---



##### 



Table 4  BUSINESS SEGMENTS
  Nine Months EndedSeptember 30,(Dollars in millions)
    
    2008
    
    
    2007RETAIL BROKERAGE SERVICESNet interest income (b)
    
    $
    933
    
    
    
    772Fee and other income
    
    
    5,273
    
    
    
    3,636Intersegment revenue
    
    
    (12
    )
    
    
    (26
    )Total revenue (b)
    
    
    6,194
    
    
    
    4,382Provision for credit losses
    
    
    1
    
    
    
    -Noninterest expense
    
    
    5,680
    
    
    
    3,136Income taxes
    
    
    186
    
    
    
    455Tax-equivalent adjustment
    
    
    2
    
    
    
    -Segment earnings
    
    $
    325
    
    
    
    791Economic profit
    
    $
    170
    
    
    
    698Risk adjusted return on capital
    
    
    23.11
    %
    
    
    93.88Economic capital, average
    
    $
    1,881
    
    
    
    1,126Cash overhead efficiency ratio (b)
    
    
    91.70
    %
    
    
    71.58Average loans, net
    
    $
    2,860
    
    
    
    1,760Average core deposits
    
    $
    48,489
    
    
    
    31,109OTHERNet interest income (b)
    
    $
    1
    
    
    
    1Fee and other income
    
    
    (6
    )
    
    
    (7
    )Intersegment revenue
    
    
    -
    
    
    
    -Total revenue (b)
    
    
    (5
    )
    
    
    (6
    )Provision for credit losses
    
    
    -
    
    
    
    -Noninterest expense
    
    
    (9
    )
    
    
    (12
    )Income taxes
    
    
    1
    
    
    
    2Tax-equivalent adjustment
    
    
    -
    
    
    
    -Segment earnings
    
    $
    3
    
    
    
    4Economic profit
    
    $
    3
    
    
    
    4Risk adjusted return on capital
    
    
    -
    %
    
    
    -Economic capital, average
    
    $
    -
    
    
    
    -Cash overhead efficiency ratio (b)
    
    
    -
    %
    
    
    -Average loans, net
    
    $
    -
    
    
    
    -Average core deposits
    
    $
    -
    
    
    
    -
 (Continued)
 62




---



##### 



Table 4
BUSINESS SEGMENTS
  Nine Months EndedSeptember 30,(Dollars in millions)
    
    2008
    
    
    2007PARENTNet interest income (a)
    
    $
    (1,497
    )
    
    
    (289
    )Fee and other income
    
    
    (2,155
    )
    
    
    346Intersegment revenue
    
    
    1
    
    
    
    1Total revenue (a)
    
    
    (3,651
    )
    
    
    58Provision for credit losses
    
    
    11,017
    
    
    
    242Noninterest expense
    
    
    1,560
    
    
    
    1,215Minority interest
    
    
    153
    
    
    
    464Income tax benefits
    
    
    (5,857
    )
    
    
    (1,199
    )Tax-equivalent adjustment
    
    
    65
    
    
    
    46Dividends on preferred stock
    
    
    427
    
    
    
    -Segment loss
    
    $
    (11,016
    )
    
    
    (710
    )Economic loss
    
    $
    (3,895
    )
    
    
    (629
    )Risk adjusted return on capital
    
    
    (400.09
    )%
    
    
    (22.61
    )Economic capital, average
    
    $
    1,265
    
    
    
    2,499Cash overhead efficiency ratio (a)
    
    
    (34.59
    )%
    
    
    1,576.74Lending commitments
    
    $
    483
    
    
    
    529Average loans, net
    
    
    26,548
    
    
    
    30,115Average core deposits
    
    $
    2,627
    
    
    
    2,578FTE employees
    
    
    24,619
    
    
    
    24,147
 (a) Tax-equivalent.
 (Continued)
 63




---



##### 



Table 4
BUSINESS SEGMENTS
 Nine Months Ended September 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)
    
    $
    10,922
    
    
    
    575
    
    
    
    3,211
    
    
    
    977
    
    
    
    (1,497
    )
    
    
    (155
    )
    
    
    14,033Fee and other income
    
    
    2,983
    
    
    
    610
    
    
    
    82
    
    
    
    5,155
    
    
    
    (2,155
    )
    
    
    -
    
    
    
    6,675Intersegment revenue
    
    
    162
    
    
    
    10
    
    
    
    (159
    )
    
    
    (14
    )
    
    
    1
    
    
    
    -
    
    
    
    -Total revenue (a)
    
    
    14,067
    
    
    
    1,195
    
    
    
    3,134
    
    
    
    6,118
    
    
    
    (3,651
    )
    
    
    (155
    )
    
    
    20,708Provision for credit losses
    
    
    2,834
    
    
    
    15
    
    
    
    1,160
    
    
    
    1
    
    
    
    11,017
    
    
    
    -
    
    
    
    15,027Noninterest expense
    
    
    6,236
    
    
    
    744
    
    
    
    2,867
    
    
    
    6,328
    
    
    
    1,560
    
    
    
    26,035
    
    
    
    43,770Minority interest
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    153
    
    
    
    (121
    )
    
    
    32Income taxes (benefits)
    
    
    1,793
    
    
    
    160
    
    
    
    (384
    )
    
    
    (79
    )
    
    
    (5,857
    )
    
    
    (477
    )
    
    
    (4,844
    )Tax-equivalent adjustment
    
    
    31
    
    
    
    -
    
    
    
    57
    
    
    
    2
    
    
    
    65
    
    
    
    (155
    )
    
    
    -Net income (loss)
    
    
    3,173
    
    
    
    276
    
    
    
    (566
    )
    
    
    (134
    )
    
    
    (10,589
    )
    
    
    (25,437
    )
    
    
    (33,277
    )Dividends on preferred stock
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    427
    
    
    
    -
    
    
    
    427Net income (loss) available
to common stockholders
    
    $
    3,173
    
    
    
    276
    
    
    
    (566
    )
    
    
    (134
    )
    
    
    (11,016
    )
    
    
    (25,437
    )
    
    
    (33,704
    )Economic profit (loss)
    
    $
    2,624
    
    
    
    207
    
    
    
    (1,301
    )
    
    
    (307
    )
    
    
    (3,895
    )
    
    
    -
    
    
    
    (2,672
    )Risk adjusted return on capital
    
    
    32.54
    %
    
    
    49.76
    
    
    
    (1.47
    )
    
    
    (8.56
    )
    
    
    (400.09
    )
    
    
    -
    
    
    
    0.59Economic capital, average
    
    $
    16,273
    
    
    
    713
    
    
    
    13,933
    
    
    
    2,098
    
    
    
    1,265
    
    
    
    -
    
    
    
    34,282Cash overhead efficiency ratio (a)
    
    
    44.33
    %
    
    
    62.31
    
    
    
    91.45
    
    
    
    103.43
    
    
    
    (34.59
    )
    
    
    -
    
    
    
    83.58Lending commitments
    
    $
    128,178
    
    
    
    6,376
    
    
    
    99,489
    
    
    
    1,657
    
    
    
    483
    
    
    
    -
    
    
    
    236,183Average loans, net
    
    
    316,217
    
    
    
    22,374
    
    
    
    105,708
    
    
    
    2,889
    
    
    
    26,548
    
    
    
    -
    
    
    
    473,736Average core deposits
    
    $
    293,361
    
    
    
    16,732
    
    
    
    30,932
    
    
    
    48,844
    
    
    
    2,627
    
    
    
    -
    
    
    
    392,496FTE employees
    
    
    53,073
    
    
    
    4,516
    
    
    
    5,718
    
    
    
    29,301
    
    
    
    24,619
    
    
    
    -
    
    
    
    117,227
 Nine Months Ended September 30, 2007Net Merger-Corporate
    
    
    
    
    
    
    
    
    
    
    Relatedand
    
    
    
    
    
    
    
    
    
    
    andGeneral
    
    
    Wealth
    
    
    Investment
    
    
    Capital
    
    
    
    
    
    
    Restructuring(Dollars in millions)
    
    Bank
    
    
    Management
    
    
    Bank
    
    
    Management
    
    
    Parent
    
    
    Expenses (b)
    
    
    TotalCONSOLIDATEDNet interest income (a)
    
    $
    10,240
    
    
    
    542
    
    
    
    2,328
    
    
    
    787
    
    
    
    (289
    )
    
    
    (108
    )
    
    
    13,500Fee and other income
    
    
    2,716
    
    
    
    582
    
    
    
    2,806
    
    
    
    4,457
    
    
    
    346
    
    
    
    -
    
    
    
    10,907Intersegment revenue
    
    
    161
    
    
    
    10
    
    
    
    (145
    )
    
    
    (27
    )
    
    
    1
    
    
    
    -
    
    
    
    -Total revenue (a)
    
    
    13,117
    
    
    
    1,134
    
    
    
    4,989
    
    
    
    5,217
    
    
    
    58
    
    
    
    (108
    )
    
    
    24,407Provision for credit losses
    
    
    508
    
    
    
    9
    
    
    
    5
    
    
    
    -
    
    
    
    242
    
    
    
    -
    
    
    
    764Noninterest expense
    
    
    5,685
    
    
    
    730
    
    
    
    2,556
    
    
    
    3,772
    
    
    
    1,215
    
    
    
    78
    
    
    
    14,036Minority interest
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    464
    
    
    
    -
    
    
    
    464Income taxes (benefits)
    
    
    2,495
    
    
    
    144
    
    
    
    857
    
    
    
    527
    
    
    
    (1,199
    )
    
    
    (30
    )
    
    
    2,794Tax-equivalent adjustment
    
    
    32
    
    
    
    -
    
    
    
    30
    
    
    
    -
    
    
    
    46
    
    
    
    (108
    )
    
    
    -Net income (loss) from
continuing operations
    
    
    4,397
    
    
    
    251
    
    
    
    1,541
    
    
    
    918
    
    
    
    (710
    )
    
    
    (48
    )
    
    
    6,349Discontinued operations,
net of income taxes
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    (88
    )
    
    
    -
    
    
    
    (88
    )Net income (loss)
    
    $
    4,397
    
    
    
    251
    
    
    
    1,541
    
    
    
    918
    
    
    
    (798
    )
    
    
    (48
    )
    
    
    6,261Economic profit (loss)
    
    $
    3,442
    
    
    
    192
    
    
    
    663
    
    
    
    808
    
    
    
    (629
    )
    
    
    -
    
    
    
    4,476Risk adjusted return on capital
    
    
    53.61
    %
    
    
    53.68
    
    
    
    20.85
    
    
    
    92.17
    
    
    
    (22.61
    )
    
    
    -
    
    
    
    35.70Economic capital, average
    
    $
    10,800
    
    
    
    601
    
    
    
    8,995
    
    
    
    1,331
    
    
    
    2,499
    
    
    
    -
    
    
    
    24,226Cash overhead efficiency ratio (a)
    
    
    43.34
    %
    
    
    64.40
    
    
    
    51.24
    
    
    
    72.29
    
    
    
    1,576.74
    
    
    
    -
    
    
    
    55.66Lending commitments
    
    $
    132,779
    
    
    
    7,007
    
    
    
    119,791
    
    
    
    1,164
    
    
    
    529
    
    
    
    -
    
    
    
    261,270Average loans, net
    
    
    292,003
    
    
    
    20,517
    
    
    
    77,736
    
    
    
    1,789
    
    
    
    30,115
    
    
    
    -
    
    
    
    422,160Average core deposits
    
    $
    288,209
    
    
    
    17,300
    
    
    
    36,077
    
    
    
    31,463
    
    
    
    2,578
    
    
    
    -
    
    
    
    375,627FTE employees
    
    
    56,427
    
    
    
    4,547
    
    
    
    6,695
    
    
    
    17,908
    
    
    
    24,147
    
    
    
    -
    
    
    
    109,724
 
 64




---



##### 



Table 5
NET TRADING REVENUE  INVESTMENT BANKING (a)
 2008
    
    
    2007Third
    
    
    Second
    
    
    First
    
    
    Fourth
    
    
    Third(In millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterNet interest income (Tax-equivalent)
    
    $
    64
    
    
    
    122
    
    
    
    78
    
    
    
    51
    
    
    
    34Trading account profits (losses)
    
    
    (633
    )
    
    
    (365
    )
    
    
    (245
    )
    
    
    (562
    )
    
    
    (381
    )Other fee income
    
    
    123
    
    
    
    187
    
    
    
    187
    
    
    
    181
    
    
    
    140Total net trading revenue (Tax-equivalent)
    
    $
    (446
    )
    
    
    (56
    )
    
    
    20
    
    
    
    (330
    )
    
    
    (207
    )
  65




---



##### 



Table 6
SELECTED RATIOS
 Nine Months EndedSeptember 30,
    
    
    2008
    
    
    2007Third
    
    
    Second
    
    
    First
    
    
    Fourth
    
    
    Third2008
    
    
    2007
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterPERFORMANCE RATIOS (a)Assets to stockholders equity
    
    
    10.29
    X
    
    
    10.19
    
    
    
    11.28
    
    
    
    9.74
    
    
    
    9.95
    
    
    
    10.32
    
    
    
    10.44Return on assets
    
    
    (5.62
    )%
    
    
    1.18
    
    
    
    (11.91
    )
    
    
    (4.50
    )
    
    
    (0.34
    )
    
    
    0.03
    
    
    
    0.88Return on common stockholders equity
    
    
    (65.08
    )
    
    
    12.04
    
    
    
    (157.43
    )
    
    
    (50.47
    )
    
    
    (3.81
    )
    
    
    0.28
    
    
    
    9.19Return on total stockholders equity
    
    
    (57.83
    )%
    
    
    12.04
    
    
    
    (134.31
    )
    
    
    (43.86
    )
    
    
    (3.39
    )
    
    
    0.28
    
    
    
    9.19DIVIDEND PAYOUT RATIOSCommon shares
    
    
    (6.54
    )%
    
    
    53.99
    
    
    
    (0.45
    )
    
    
    (8.70
    )
    
    
    (177.78
    )
    
    
    2,133.33
    
    
    
    75.29Preferred and common shares
    
    
    (7.87
    )%
    
    
    53.99
    
    
    
    (1.26
    )
    
    
    (11.24
    )
    
    
    (198.30
    )
    
    
    2,133.33
    
    
    
    75.29
  66




---



##### 



Table 7
LOANS  ON-BALANCE SHEET, AND MANAGED AND SERVICING PORTFOLIOS
 2008
    
    
    2007Third
    
    
    Second
    
    
    First
    
    
    Fourth
    
    
    Third(In millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterON-BALANCE SHEET LOAN PORTFOLIO
COMMERCIALCommercial, financial and agricultural
    
    $
    128,411
    
    
    
    122,628
    
    
    
    119,193
    
    
    
    112,509
    
    
    
    109,269Real estate  construction and other
    
    
    17,824
    
    
    
    18,629
    
    
    
    18,597
    
    
    
    18,543
    
    
    
    18,167Real estate  mortgage
    
    
    27,970
    
    
    
    27,191
    
    
    
    26,370
    
    
    
    23,846
    
    
    
    21,514Lease financing
    
    
    23,725
    
    
    
    24,605
    
    
    
    23,637
    
    
    
    23,913
    
    
    
    23,966Foreign
    
    
    32,344
    
    
    
    35,168
    
    
    
    33,616
    
    
    
    29,540
    
    
    
    26,471Total commercial
    
    
    230,274
    
    
    
    228,221
    
    
    
    221,413
    
    
    
    208,351
    
    
    
    199,387CONSUMERReal estate secured (a)
    
    
    224,842
    
    
    
    230,520
    
    
    
    230,197
    
    
    
    227,719
    
    
    
    225,355Student loans
    
    
    10,335
    
    
    
    9,945
    
    
    
    9,324
    
    
    
    8,149
    
    
    
    7,742Installment loans
    
    
    26,433
    
    
    
    29,261
    
    
    
    27,437
    
    
    
    25,635
    
    
    
    24,763Total consumer
    
    
    261,610
    
    
    
    269,726
    
    
    
    266,958
    
    
    
    261,503
    
    
    
    257,860Total loans
    
    
    491,884
    
    
    
    497,947
    
    
    
    488,371
    
    
    
    469,854
    
    
    
    457,247Unearned income
    
    
    (9,511
    )
    
    
    (9,749
    )
    
    
    (7,889
    )
    
    
    (7,900
    )
    
    
    (8,041
    )Loans, net (On-balance sheet)
    
    $
    482,373
    
    
    
    488,198
    
    
    
    480,482
    
    
    
    461,954
    
    
    
    449,206MANAGED PORTFOLIO (b) (c)COMMERCIALOn-balance sheet loan portfolio
    
    $
    230,274
    
    
    
    228,221
    
    
    
    221,413
    
    
    
    208,351
    
    
    
    199,387Securitized loans  off-balance sheet
    
    
    100
    
    
    
    105
    
    
    
    120
    
    
    
    131
    
    
    
    142Loans held for sale
    
    
    1,290
    
    
    
    2,224
    
    
    
    3,342
    
    
    
    9,414
    
    
    
    13,905Total commercial
    
    
    231,664
    
    
    
    230,550
    
    
    
    224,875
    
    
    
    217,896
    
    
    
    213,434CONSUMERReal estate securedOn-balance sheet loan portfolio
    
    
    224,842
    
    
    
    230,520
    
    
    
    230,197
    
    
    
    227,719
    
    
    
    225,355Securitized loans  off-balance sheet
    
    
    5,641
    
    
    
    6,337
    
    
    
    6,845
    
    
    
    7,230
    
    
    
    7,625Securitized loans included in securities
    
    
    13,081
    
    
    
    14,918
    
    
    
    11,683
    
    
    
    10,755
    
    
    
    5,963Loans held for sale
    
    
    2,491
    
    
    
    3,415
    
    
    
    5,960
    
    
    
    4,816
    
    
    
    3,583Total real estate secured
    
    
    246,055
    
    
    
    255,190
    
    
    
    254,685
    
    
    
    250,520
    
    
    
    242,526StudentOn-balance sheet loan portfolio
    
    
    10,335
    
    
    
    9,945
    
    
    
    9,324
    
    
    
    8,149
    
    
    
    7,742Securitized loans  off-balance sheet
    
    
    2,700
    
    
    
    2,721
    
    
    
    2,772
    
    
    
    2,811
    
    
    
    2,856Securitized loans included in securities
    
    
    52
    
    
    
    52
    
    
    
    52
    
    
    
    52
    
    
    
    52Loans held for sale
    
    
    1,280
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    1,968Total student
    
    
    14,367
    
    
    
    12,718
    
    
    
    12,148
    
    
    
    11,012
    
    
    
    12,618InstallmentOn-balance sheet loan portfolio
    
    
    26,433
    
    
    
    29,261
    
    
    
    27,437
    
    
    
    25,635
    
    
    
    24,763Securitized loans  off-balance sheet
    
    
    4,629
    
    
    
    1,630
    
    
    
    1,968
    
    
    
    2,263
    
    
    
    2,572Securitized loans included in securities
    
    
    23
    
    
    
    28
    
    
    
    39
    
    
    
    47
    
    
    
    55Loans held for sale
    
    
    4,186
    
    
    
    2,791
    
    
    
    2,127
    
    
    
    2,542
    
    
    
    1,975Total installment
    
    
    35,271
    
    
    
    33,710
    
    
    
    31,571
    
    
    
    30,487
    
    
    
    29,365Total consumer
    
    
    295,693
    
    
    
    301,618
    
    
    
    298,404
    
    
    
    292,019
    
    
    
    284,509Total managed portfolio
    
    $
    527,357
    
    
    
    532,168
    
    
    
    523,279
    
    
    
    509,915
    
    
    
    497,943SERVICING PORTFOLIO (c) (d)Commercial
    
    $
    339,790
    
    
    
    351,277
    
    
    
    354,624
    
    
    
    353,464
    
    
    
    337,721Consumer
    
    $
    33,732
    
    
    
    29,100
    
    
    
    27,415
    
    
    
    27,523
    
    
    
    28,015
     67




---



##### 



Table 8
LOANS HELD FOR SALE
 2008
    
    
    2007Third
    
    
    Second
    
    
    First
    
    
    Fourth
    
    
    Third(In millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterCORE BUSINESS ACTIVITY (a) (b)Core business activity, beginning of period
    
    $
    7,824
    
    
    
    10,670
    
    
    
    15,094
    
    
    
    19,599
    
    
    
    17,732Originations and/or purchases
    
    
    6,955
    
    
    
    8,069
    
    
    
    8,144
    
    
    
    8,160
    
    
    
    13,007Transfer to loans held for sale
    
    
    3,439
    
    
    
    377
    
    
    
    2,314
    
    
    
    511
    
    
    
    2,411Transfer from loans held for sale
    
    
    (51
    )
    
    
    (79
    )
    
    
    (6,926
    )
    
    
    (1,799
    )
    
    
    (249
    )Lower of cost or market value adjustments (c)
    
    
    (41
    )
    
    
    (87
    )
    
    
    (364
    )
    
    
    (223
    )
    
    
    (255
    )Market value adjustments for fair value option loans
    
    
    12
    
    
    
    (47
    )
    
    
    42
    
    
    
    -
    
    
    
    -Performing loans sold or securitized
    
    
    (8,920
    )
    
    
    (10,957
    )
    
    
    (7,355
    )
    
    
    (10,913
    )
    
    
    (11,606
    )Other, principally payments
    
    
    (437
    )
    
    
    (122
    )
    
    
    (279
    )
    
    
    (241
    )
    
    
    (1,441
    )Core business activity, end of period
    
    
    8,781
    
    
    
    7,824
    
    
    
    10,670
    
    
    
    15,094
    
    
    
    19,599PORTFOLIO MANAGEMENT ACTIVITY (a) (b)Portfolio business activity, beginning of period
    
    
    606
    
    
    
    759
    
    
    
    1,678
    
    
    
    1,832
    
    
    
    1Originations and/or purchases
    
    
    -
    
    
    
    -
    
    
    
    83
    
    
    
    -
    
    
    
    -Transfer to loans held for sale (d)
    
    
    -
    
    
    
    56
    
    
    
    54
    
    
    
    339
    
    
    
    1,831Transfer from loans held for sale
    
    
    (2
    )
    
    
    -
    
    
    
    -
    
    
    
    (191
    )
    
    
    -Lower of cost or market value adjustments (c)
    
    
    (40
    )
    
    
    26
    
    
    
    (31
    )
    
    
    (30
    )
    
    
    -Performing loans sold or securitized
    
    
    (59
    )
    
    
    (212
    )
    
    
    (990
    )
    
    
    (157
    )
    
    
    -Nonperforming loans sold
    
    
    (25
    )
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Other, principally payments
    
    
    (14
    )
    
    
    (23
    )
    
    
    (35
    )
    
    
    (115
    )
    
    
    -Portfolio management activity, end of period
    
    
    466
    
    
    
    606
    
    
    
    759
    
    
    
    1,678
    
    
    
    1,832Total loans held for sale (e)
    
    $
    9,247
    
    
    
    8,430
    
    
    
    11,429
    
    
    
    16,772
    
    
    
    21,431
      68




---



##### 



Table 9
ALLOWANCE FOR CREDIT LOSSES
 2008
    
    
    2007Third
    
    
    Second
    
    
    First
    
    
    Fourth
    
    
    Third(In millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterALLOWANCE FOR CREDIT LOSSES (a)Balance, beginning of period
    
    $
    10,956
    
    
    
    6,767
    
    
    
    4,717
    
    
    
    3,691
    
    
    
    3,552Provision for credit losses
    
    
    6,570
    
    
    
    5,504
    
    
    
    2,834
    
    
    
    1,467
    
    
    
    381Provision for credit losses relating to loans
transferred to loans held for sale or sold
    
    
    17
    
    
    
    51
    
    
    
    7
    
    
    
    6
    
    
    
    3Provision for credit losses for unfunded
lending commitments
    
    
    42
    
    
    
    12
    
    
    
    (10
    )
    
    
    24
    
    
    
    24LOAN LOSSESCommercial, financial and agricultural
    
    
    (286
    )
    
    
    (254
    )
    
    
    (171
    )
    
    
    (67
    )
    
    
    (41
    )Commercial real estate  construction and mortgage
    
    
    (279
    )
    
    
    (216
    )
    
    
    (81
    )
    
    
    (117
    )
    
    
    (5
    )Total commercial
    
    
    (565
    )
    
    
    (470
    )
    
    
    (252
    )
    
    
    (184
    )
    
    
    (46
    )Real estate secured
    
    
    (1,087
    )
    
    
    (700
    )
    
    
    (351
    )
    
    
    (156
    )
    
    
    (59
    )Student loans
    
    
    (29
    )
    
    
    (3
    )
    
    
    (3
    )
    
    
    (4
    )
    
    
    (5
    )Installment and other loans (b)
    
    
    (299
    )
    
    
    (230
    )
    
    
    (242
    )
    
    
    (225
    )
    
    
    (168
    )Total consumer
    
    
    (1,415
    )
    
    
    (933
    )
    
    
    (596
    )
    
    
    (385
    )
    
    
    (232
    )Total loan losses
    
    
    (1,980
    )
    
    
    (1,403
    )
    
    
    (848
    )
    
    
    (569
    )
    
    
    (278
    )LOAN RECOVERIESCommercial, financial and agricultural
    
    
    16
    
    
    
    15
    
    
    
    14
    
    
    
    22
    
    
    
    9Commercial real estate  construction and mortgage
    
    
    2
    
    
    
    -
    
    
    
    1
    
    
    
    -
    
    
    
    3Total commercial
    
    
    18
    
    
    
    15
    
    
    
    15
    
    
    
    22
    
    
    
    12Real estate secured
    
    
    27
    
    
    
    18
    
    
    
    10
    
    
    
    9
    
    
    
    12Student loans
    
    
    1
    
    
    
    1
    
    
    
    1
    
    
    
    2
    
    
    
    3Installment and other loans (b)
    
    
    62
    
    
    
    60
    
    
    
    57
    
    
    
    75
    
    
    
    45Total consumer
    
    
    90
    
    
    
    79
    
    
    
    68
    
    
    
    86
    
    
    
    60Total loan recoveries
    
    
    108
    
    
    
    94
    
    
    
    83
    
    
    
    108
    
    
    
    72Net charge-offs
    
    
    (1,872
    )
    
    
    (1,309
    )
    
    
    (765
    )
    
    
    (461
    )
    
    
    (206
    )Allowance relating to loans acquired, transferred
to loans held for sale or sold
    
    
    (108
    )
    
    
    (69
    )
    
    
    (16
    )
    
    
    (10
    )
    
    
    (63
    )Balance, end of period
    
    $
    15,605
    
    
    
    10,956
    
    
    
    6,767
    
    
    
    4,717
    
    
    
    3,691CONSUMER REAL ESTATE SECURED NET CHARGE-OFFSFirst lien
    
    $
    (952
    )
    
    
    (592
    )
    
    
    (291
    )
    
    
    (122
    )
    
    
    (32
    )Second lien
    
    
    (108
    )
    
    
    (90
    )
    
    
    (50
    )
    
    
    (25
    )
    
    
    (15
    )Total consumer real estate secured net charge-offs
    
    $
    (1,060
    )
    
    
    (682
    )
    
    
    (341
    )
    
    
    (147
    )
    
    
    (47
    )ALLOWANCE FOR CREDIT LOSSESAllocation of the allowance for loan lossesCommercial
    
    $
    2,959
    
    
    
    2,793
    
    
    
    2,645
    
    
    
    2,392
    
    
    
    2,054Consumer
    
    
    11,622
    
    
    
    7,621
    
    
    
    3,592
    
    
    
    1,950
    
    
    
    1,246Unallocated
    
    
    770
    
    
    
    330
    
    
    
    330
    
    
    
    165
    
    
    
    205Total allowance for loan losses
    
    
    15,351
    
    
    
    10,744
    
    
    
    6,567
    
    
    
    4,507
    
    
    
    3,505Reserve for unfunded lending commitments
    
    
    254
    
    
    
    212
    
    
    
    200
    
    
    
    210
    
    
    
    186Total allowance for credit losses
    
    $
    15,605
    
    
    
    10,956
    
    
    
    6,767
    
    
    
    4,717
    
    
    
    3,691
   69




---



##### 



Table 10
ALLOWANCE AND CHARGE-OFF RATIOS
 2008
    
    
    2007Third
    
    
    Second
    
    
    First
    
    
    Fourth
    
    
    Third(In millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterALLOWANCE FOR LOAN LOSSESas % of loans, net
    
    
    3.18
    %
    
    
    2.20
    
    
    
    1.37
    
    
    
    0.98
    
    
    
    0.78as % of nonaccrual and restructured loans (a)
    
    
    109
    
    
    
    95
    
    
    
    84
    
    
    
    90
    
    
    
    129as % of nonperforming assets (a)
    
    
    102
    
    
    
    90
    
    
    
    78
    
    
    
    84
    
    
    
    115ALLOWANCE FOR CREDIT LOSSESas % of loans, net
    
    
    3.24
    %
    
    
    2.24
    
    
    
    1.41
    
    
    
    1.02
    
    
    
    0.82NET CHARGE-OFFS AS % OF AVERAGE LOANS, NET (b)Commercial, financial and agricultural
    
    
    0.66
    %
    
    
    0.60
    
    
    
    0.41
    
    
    
    0.12
    
    
    
    0.10Commercial real estate  construction and mortgage
    
    
    2.41
    
    
    
    1.89
    
    
    
    0.73
    
    
    
    1.12
    
    
    
    0.02Total commercial
    
    
    1.05
    
    
    
    0.88
    
    
    
    0.48
    
    
    
    0.34
    
    
    
    0.08Real estate secured
    
    
    1.85
    
    
    
    1.18
    
    
    
    0.59
    
    
    
    0.26
    
    
    
    0.08Student loans
    
    
    1.03
    
    
    
    0.07
    
    
    
    0.08
    
    
    
    0.10
    
    
    
    0.14Installment and other loans (c)
    
    
    3.18
    
    
    
    2.36
    
    
    
    2.76
    
    
    
    2.35
    
    
    
    1.99Total consumer
    
    
    1.97
    
    
    
    1.26
    
    
    
    0.79
    
    
    
    0.46
    
    
    
    0.27Total as % of average loans, net
    
    
    1.57
    %
    
    
    1.10
    
    
    
    0.66
    
    
    
    0.41
    
    
    
    0.19
    70




---



##### 



Table 11
NONPERFORMING ASSETS
 2008
    
    
    2007Third
    
    
    Second
    
    
    First
    
    
    Fourth
    
    
    Third(In millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterNONPERFORMING ASSETSNonaccrual loansCommercialCommercial, financial and agricultural
    
    $
    1,298
    
    
    
    1,229
    
    
    
    908
    
    
    
    602
    
    
    
    354Commercial real estate  construction and mortgage
    
    
    2,836
    
    
    
    2,203
    
    
    
    1,750
    
    
    
    1,059
    
    
    
    289Total commercial
    
    
    4,134
    
    
    
    3,432
    
    
    
    2,658
    
    
    
    1,661
    
    
    
    643ConsumerReal estate securedFirst lien
    
    
    9,197
    
    
    
    7,430
    
    
    
    5,015
    
    
    
    3,234
    
    
    
    1,986Second lien
    
    
    110
    
    
    
    147
    
    
    
    75
    
    
    
    58
    
    
    
    41Installment and other loans (a)
    
    
    35
    
    
    
    40
    
    
    
    40
    
    
    
    42
    
    
    
    45Total consumer
    
    
    9,342
    
    
    
    7,617
    
    
    
    5,130
    
    
    
    3,334
    
    
    
    2,072Total nonaccrual loans
    
    
    13,476
    
    
    
    11,049
    
    
    
    7,788
    
    
    
    4,995
    
    
    
    2,715Troubled debt restructurings (b)
    
    
    646
    
    
    
    248
    
    
    
    48
    
    
    
    -
    
    
    
    -Foreclosed properties
    
    
    860
    
    
    
    631
    
    
    
    530
    
    
    
    389
    
    
    
    334Total nonperforming assets
    
    $
    14,982
    
    
    
    11,928
    
    
    
    8,366
    
    
    
    5,384
    
    
    
    3,049as % of loans, net, and foreclosed properties (c)
    
    
    3.10
    %
    
    
    2.44
    
    
    
    1.74
    
    
    
    1.16
    
    
    
    0.68Nonperforming assets included in loans held for saleCommercial
    
    $
    21
    
    
    
    56
    
    
    
    -
    
    
    
    -
    
    
    
    -Consumer
    
    
    5
    
    
    
    7
    
    
    
    5
    
    
    
    62
    
    
    
    50Total nonaccrual loans
    
    
    26
    
    
    
    63
    
    
    
    5
    
    
    
    62
    
    
    
    50Foreclosed properties
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    9Total nonperforming assets included in loans held for sale
    
    
    26
    
    
    
    63
    
    
    
    5
    
    
    
    62
    
    
    
    59Nonperforming assets included in loans and
in loans held for sale
    
    $
    15,008
    
    
    
    11,991
    
    
    
    8,371
    
    
    
    5,446
    
    
    
    3,108as % of loans, net, foreclosed properties and loans
held for sale (d)
    
    
    3.05
    %
    
    
    2.41
    
    
    
    1.70
    
    
    
    1.14
    
    
    
    0.66PAST DUE LOANS 90 DAYS AND OVER,
AND NONACCRUAL LOANS (c)Accruing loans past due 90 days and over
    
    $
    1,119
    
    
    
    1,101
    
    
    
    866
    
    
    
    708
    
    
    
    590Nonaccrual loans
    
    
    13,476
    
    
    
    11,049
    
    
    
    7,788
    
    
    
    4,995
    
    
    
    2,715Total past due loans 90 days and over, and
nonaccrual loans
    
    $
    14,595
    
    
    
    12,150
    
    
    
    8,654
    
    
    
    5,703
    
    
    
    3,305Commercial as % of loans, net
    
    
    1.96
    %
    
    
    1.69
    
    
    
    1.31
    
    
    
    0.89
    
    
    
    0.38Consumer as % of loans, net
    
    
    3.91
    %
    
    
    3.12
    
    
    
    2.19
    
    
    
    1.49
    
    
    
    1.00
     71




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##### 



Table 12
NONACCRUAL LOAN ACTIVITY (a)
 2008
    
    
    2007Third
    
    
    Second
    
    
    First
    
    
    Fourth
    
    
    Third(In millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterBalance, beginning of period
    
    $
    11,049
    
    
    
    7,788
    
    
    
    4,995
    
    
    
    2,715
    
    
    
    1,945COMMERCIAL NONACCRUAL LOAN ACTIVITYCommercial nonaccrual loans, beginning of period
    
    
    3,432
    
    
    
    2,658
    
    
    
    1,661
    
    
    
    643
    
    
    
    479New nonaccrual loans and advances
    
    
    1,689
    
    
    
    1,651
    
    
    
    1,421
    
    
    
    1,303
    
    
    
    298Gross charge-offs
    
    
    (566
    )
    
    
    (470
    )
    
    
    (252
    )
    
    
    (184
    )
    
    
    (46
    )Transfers to loans held for sale
    
    
    -
    
    
    
    (88
    )
    
    
    -
    
    
    
    -
    
    
    
    -Transfers to other real estate owned
    
    
    (53
    )
    
    
    (7
    )
    
    
    (26
    )
    
    
    -
    
    
    
    (5
    )Sales
    
    
    (88
    )
    
    
    (68
    )
    
    
    (33
    )
    
    
    (26
    )
    
    
    (14
    )Other, principally payments
    
    
    (280
    )
    
    
    (244
    )
    
    
    (113
    )
    
    
    (75
    )
    
    
    (69
    )Net commercial nonaccrual loan activity
    
    
    702
    
    
    
    774
    
    
    
    997
    
    
    
    1,018
    
    
    
    164Commercial nonaccrual loans, end of period
    
    
    4,134
    
    
    
    3,432
    
    
    
    2,658
    
    
    
    1,661
    
    
    
    643CONSUMER NONACCRUAL LOAN ACTIVITYConsumer nonaccrual loans, beginning of period
    
    
    7,617
    
    
    
    5,130
    
    
    
    3,334
    
    
    
    2,072
    
    
    
    1,466New nonaccrual loans, advances and other, net
    
    
    1,729
    
    
    
    2,487
    
    
    
    1,696
    
    
    
    1,262
    
    
    
    606Transfers from (to) loans held for sale
    
    
    (4
    )
    
    
    -
    
    
    
    100
    
    
    
    -
    
    
    
    -Net consumer nonaccrual loan activity
    
    
    1,725
    
    
    
    2,487
    
    
    
    1,796
    
    
    
    1,262
    
    
    
    606Consumer nonaccrual loans, end of period
    
    
    9,342
    
    
    
    7,617
    
    
    
    5,130
    
    
    
    3,334
    
    
    
    2,072Balance, end of period
    
    $
    13,476
    
    
    
    11,049
    
    
    
    7,788
    
    
    
    4,995
    
    
    
    2,715
  72




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##### 



Table 13
DEPOSITS
 2008
    
    
    2007Third
    
    
    Second
    
    
    First
    
    
    Fourth
    
    
    Third(In millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterCORE DEPOSITSNoninterest-bearing
    
    $
    55,752
    
    
    
    63,393
    
    
    
    60,951
    
    
    
    60,893
    
    
    
    56,825Savings and NOW accounts
    
    
    72,335
    
    
    
    83,915
    
    
    
    87,920
    
    
    
    88,078
    
    
    
    81,037Money market accounts
    
    
    108,870
    
    
    
    139,215
    
    
    
    128,839
    
    
    
    124,651
    
    
    
    114,457Other consumer time
    
    
    133,097
    
    
    
    113,864
    
    
    
    120,852
    
    
    
    123,783
    
    
    
    125,546Total core deposits
    
    
    370,054
    
    
    
    400,387
    
    
    
    398,562
    
    
    
    397,405
    
    
    
    377,865OTHER DEPOSITSForeign
    
    
    15,126
    
    
    
    27,940
    
    
    
    27,399
    
    
    
    27,386
    
    
    
    27,226Other time
    
    
    33,660
    
    
    
    19,463
    
    
    
    19,003
    
    
    
    24,338
    
    
    
    16,846Total deposits
    
    $
    418,840
    
    
    
    447,790
    
    
    
    444,964
    
    
    
    449,129
    
    
    
    421,937
 Table 14
TIME DEPOSITS IN AMOUNTS OF $100,000 OR MORE
 (In millions)
    
    September 30, 2008MATURITY OF3 months or less
    
    $
    19,843Over 3 months through 6 months
    
    
    17,963Over 6 months through 12 months
    
    
    23,738Over 12 months
    
    
    17,908Total time deposits in amounts of $100,000 or more
    
    $
    79,452
 73




---



##### 



Table 15
CHANGES IN STOCKHOLDERS EQUITY
 2008
    
    
    2007Third
    
    
    Second
    
    
    First
    
    
    Fourth
    
    
    Third(In millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterBalance, beginning of period, as reported
    
    $
    75,127
    
    
    
    77,992
    
    
    
    76,872
    
    
    
    70,140
    
    
    
    69,266Cumulative effect of accounting
changes, net of income taxes (a)
    
    
    -
    
    
    
    -
    
    
    
    (24
    )
    
    
    -
    
    
    
    -Balance, beginning of period
    
    
    75,127
    
    
    
    77,992
    
    
    
    76,848
    
    
    
    70,140
    
    
    
    69,266Comprehensive income (loss)Net income (loss)
    
    
    (23,698
    )
    
    
    (8,915
    )
    
    
    (664
    )
    
    
    51
    
    
    
    1,618Unamortized gains and losses under employee benefit plans
    
    
    6
    
    
    
    5
    
    
    
    6
    
    
    
    561
    
    
    
    16Net unrealized gains (losses) on debt and equity securities
    
    
    (1,151
    )
    
    
    (1,112
    )
    
    
    (705
    )
    
    
    459
    
    
    
    493Net unrealized gains (losses) on derivative financial
instruments
    
    
    (69
    )
    
    
    132
    
    
    
    91
    
    
    
    164
    
    
    
    3Total comprehensive income (loss)
    
    
    (24,912
    )
    
    
    (9,890
    )
    
    
    (1,272
    )
    
    
    1,235
    
    
    
    2,130Purchases of common stock
    
    
    -
    
    
    
    -
    
    
    
    (20
    )
    
    
    -
    
    
    
    (190
    )Preferred shares issued
    
    
    -
    
    
    
    3,975
    
    
    
    3,497
    
    
    
    2,263
    
    
    
    -Common stock issued
    
    
    -
    
    
    
    3,969
    
    
    
    -
    
    
    
    -
    
    
    
    -Common stock issued for
Stock options and restricted stock
    
    
    (21
    )
    
    
    (48
    )
    
    
    372
    
    
    
    404
    
    
    
    35Acquisitions
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    3,942
    
    
    
    -Deferred compensation, net
    
    
    108
    
    
    
    130
    
    
    
    (116
    )
    
    
    152
    
    
    
    114Cash dividends
Preferred shares
    
    
    (191
    )
    
    
    (193
    )
    
    
    (43
    )
    
    
    -
    
    
    
    -Common shares
    
    
    (108
    )
    
    
    (808
    )
    
    
    (1,274
    )
    
    
    (1,264
    )
    
    
    (1,215
    )Balance, end of period
    
    $
    50,003
    
    
    
    75,127
    
    
    
    77,992
    
    
    
    76,872
    
    
    
    70,140
  74




---



##### 



Table 16  CAPITAL RATIOS
 2008
    
    
    2007Third
    
    
    Second
    
    
    First
    
    
    Fourth
    
    
    Third(In millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterCONSOLIDATED CAPITAL RATIOS (a)Qualifying capitalTier 1 capital
    
    $
    43,804
    
    
    
    49,473
    
    
    
    45,353
    
    
    
    43,528
    
    
    
    41,853Total capital
    
    
    72,549
    
    
    
    78,811
    
    
    
    73,684
    
    
    
    70,003
    
    
    
    63,948Adjusted risk-weighted assets
    
    
    585,065
    
    
    
    618,736
    
    
    
    611,596
    
    
    
    592,065
    
    
    
    589,844Adjusted leverage ratio assets
    
    $
    768,469
    
    
    
    753,108
    
    
    
    734,233
    
    
    
    714,633
    
    
    
    686,373RatiosTier 1 capital
    
    
    7.49
    %
    
    
    8.00
    
    
    
    7.42
    
    
    
    7.35
    
    
    
    7.10Total capital
    
    
    12.40
    
    
    
    12.74
    
    
    
    12.05
    
    
    
    11.82
    
    
    
    10.84Leverage
    
    
    5.70
    
    
    
    6.57
    
    
    
    6.18
    
    
    
    6.09
    
    
    
    6.10STOCKHOLDERS EQUITY TO ASSETSQuarter-end
    
    
    6.54
    
    
    
    9.25
    
    
    
    9.65
    
    
    
    9.82
    
    
    
    9.30Average
    
    
    8.86
    %
    
    
    10.26
    
    
    
    10.05
    
    
    
    9.69
    
    
    
    9.58BANK CAPITAL RATIOSTier 1 capitalWachovia Bank, National Association
    
    
    7.30
    %
    
    
    7.25
    
    
    
    7.50
    
    
    
    7.50
    
    
    
    7.09Wachovia Bank of Delaware, National Association
    
    
    13.76
    
    
    
    13.90
    
    
    
    15.04
    
    
    
    15.60
    
    
    
    17.14Wachovia Mortgage, FSB (b)
    
    
    10.47
    
    
    
    11.88
    
    
    
    11.92
    
    
    
    12.44
    
    
    
    13.44Wachovia Bank, FSB (c)
    
    
    20.61
    
    
    
    22.17
    
    
    
    19.66
    
    
    
    17.07
    
    
    
    15.94Total capitalWachovia Bank, National Association
    
    
    11.64
    
    
    
    11.58
    
    
    
    11.72
    
    
    
    11.45
    
    
    
    10.57Wachovia Bank of Delaware, National Association
    
    
    15.78
    
    
    
    16.02
    
    
    
    17.07
    
    
    
    17.67
    
    
    
    19.27Wachovia Mortgage, FSB (b)
    
    
    11.85
    
    
    
    13.19
    
    
    
    13.18
    
    
    
    13.70
    
    
    
    13.81Wachovia Bank, FSB (c)
    
    
    21.91
    
    
    
    23.45
    
    
    
    20.91
    
    
    
    17.95
    
    
    
    16.25LeverageWachovia Bank, National Association
    
    
    6.02
    
    
    
    6.27
    
    
    
    6.39
    
    
    
    6.71
    
    
    
    6.69Wachovia Bank of Delaware, National Association
    
    
    10.41
    
    
    
    9.48
    
    
    
    9.99
    
    
    
    9.82
    
    
    
    15.66Wachovia Mortgage, FSB (b)
    
    
    5.66
    
    
    
    6.00
    
    
    
    6.38
    
    
    
    6.56
    
    
    
    7.17Wachovia Bank, FSB (c)
    
    
    5.69
    %
    
    
    6.45
    
    
    
    6.26
    
    
    
    5.94
    
    
    
    5.50
 (a) Risk-based capital ratio guidelines require a minimum ratio of tier 1 capital to risk-weighted
assets of 4.00 percent and a minimum ratio of capital to risk-weighted assets of 8.00
percent. The minimum leverage ratio of tier 1 capital to adjusted average quarterly assets is from
3.00 percent to 4.00 percent.
(b) Formerly World Savings Bank, FSB, prior to December 31, 2007.
(c) Formerly World Savings Bank, FSB (Texas) prior to December 31, 2007, which was a subsidiary of
Wachovia Mortgage, FSB (formerly World Savings Bank, FSB) prior to April 1, 2007. 75




---



##### 



WACHOVIA CORPORATION AND SUBSIDIARIES  NET INTEREST INCOME SUMMARIES
 THIRD QUARTER 2008
    
    
    SECOND QUARTER 2008Average
    
    
    
    
    
    
    
    
    
    
    AverageInterest
    
    
    Rates
    
    
    
    
    
    
    Interest
    
    
    RatesAverage
    
    
    Income/
    
    
    Earned/
    
    
    Average
    
    
    Income/
    
    
    Earned/(In millions)
    
    Balances
    
    
    Expense
    
    
    Paid
    
    
    Balances
    
    
    Expense
    
    
    PaidASSETSInterest-bearing bank balances
    
    $
    12,247
    
    
    
    77
    
    
    
    2.51
    %
    
    $
    4,980
    
    
    
    39
    
    
    
    3.11
    %Federal funds sold and securities
purchased under resale agreements
    
    
    18,556
    
    
    
    120
    
    
    
    2.57
    
    
    
    13,075
    
    
    
    81
    
    
    
    2.51Trading account assets (a)
    
    
    36,715
    
    
    
    431
    
    
    
    4.70
    
    
    
    43,575
    
    
    
    541
    
    
    
    4.97Securities (a)
    
    
    120,481
    
    
    
    1,598
    
    
    
    5.30
    
    
    
    116,504
    
    
    
    1,603
    
    
    
    5.51Loans (a) (b)CommercialCommercial, financial and agricultural
    
    
    122,576
    
    
    
    1,525
    
    
    
    4.95
    
    
    
    120,693
    
    
    
    1,493
    
    
    
    4.98Real estate  construction and other
    
    
    18,438
    
    
    
    189
    
    
    
    4.09
    
    
    
    18,849
    
    
    
    204
    
    
    
    4.35Real estate  mortgage
    
    
    27,577
    
    
    
    347
    
    
    
    5.00
    
    
    
    26,730
    
    
    
    338
    
    
    
    5.08Lease financing (c)
    
    
    6,368
    
    
    
    108
    
    
    
    6.74
    
    
    
    6,713
    
    
    
    (857
    )
    
    
    (51.02
    )Foreign
    
    
    33,947
    
    
    
    351
    
    
    
    4.12
    
    
    
    33,219
    
    
    
    360
    
    
    
    4.34Total commercial
    
    
    208,906
    
    
    
    2,520
    
    
    
    4.80
    
    
    
    206,204
    
    
    
    1,538
    
    
    
    3.01ConsumerReal estate secured
    
    
    228,736
    
    
    
    3,479
    
    
    
    6.08
    
    
    
    231,754
    
    
    
    3,715
    
    
    
    6.42Student loans
    
    
    10,880
    
    
    
    106
    
    
    
    3.87
    
    
    
    9,887
    
    
    
    108
    
    
    
    4.41Installment loans
    
    
    29,963
    
    
    
    710
    
    
    
    9.43
    
    
    
    28,889
    
    
    
    686
    
    
    
    9.55Total consumer
    
    
    269,579
    
    
    
    4,295
    
    
    
    6.36
    
    
    
    270,530
    
    
    
    4,509
    
    
    
    6.68Total loans
    
    
    478,485
    
    
    
    6,815
    
    
    
    5.68
    
    
    
    476,734
    
    
    
    6,047
    
    
    
    5.09Loans held for sale
    
    
    8,416
    
    
    
    152
    
    
    
    7.22
    
    
    
    9,141
    
    
    
    141
    
    
    
    6.17Other earning assets
    
    
    11,044
    
    
    
    133
    
    
    
    4.78
    
    
    
    11,080
    
    
    
    136
    
    
    
    4.94Total earning assets excluding derivatives
    
    
    685,944
    
    
    
    9,326
    
    
    
    5.43
    
    
    
    675,089
    
    
    
    8,588
    
    
    
    5.10Risk management derivatives (d)
    
    
    
    
    
    
    122
    
    
    
    0.07
    
    
    
    
    
    
    
    112
    
    
    
    0.07Total earning assets including derivatives
    
    
    685,944
    
    
    
    9,448
    
    
    
    5.50
    
    
    
    675,089
    
    
    
    8,700
    
    
    
    5.17Cash and due from banks
    
    
    12,250
    
    
    
    
    
    
    
    
    
    
    
    11,472Other assets
    
    
    93,713
    
    
    
    
    
    
    
    
    
    
    
    109,876Total assets
    
    $
    791,907
    
    
    
    
    
    
    
    
    
    
    $
    796,437LIABILITIES AND STOCKHOLDERS EQUITYInterest-bearing depositsSavings and NOW accounts
    
    
    79,077
    
    
    
    124
    
    
    
    0.63
    
    
    
    86,317
    
    
    
    137
    
    
    
    0.64Money market accounts
    
    
    127,097
    
    
    
    450
    
    
    
    1.41
    
    
    
    132,792
    
    
    
    504
    
    
    
    1.53Other consumer time
    
    
    128,595
    
    
    
    1,187
    
    
    
    3.67
    
    
    
    113,579
    
    
    
    1,145
    
    
    
    4.05Foreign
    
    
    24,654
    
    
    
    190
    
    
    
    3.06
    
    
    
    25,913
    
    
    
    191
    
    
    
    2.97Other time
    
    
    30,029
    
    
    
    256
    
    
    
    3.40
    
    
    
    18,965
    
    
    
    181
    
    
    
    3.83Total interest-bearing deposits
    
    
    389,452
    
    
    
    2,207
    
    
    
    2.25
    
    
    
    377,566
    
    
    
    2,158
    
    
    
    2.30Federal funds purchased and securities
sold under repurchase agreements
    
    
    39,429
    
    
    
    245
    
    
    
    2.47
    
    
    
    43,288
    
    
    
    274
    
    
    
    2.54Commercial paper
    
    
    4,421
    
    
    
    17
    
    
    
    1.46
    
    
    
    5,186
    
    
    
    20
    
    
    
    1.61Securities sold short
    
    
    6,068
    
    
    
    55
    
    
    
    3.56
    
    
    
    6,243
    
    
    
    53
    
    
    
    3.42Other short-term borrowings
    
    
    8,280
    
    
    
    32
    
    
    
    1.68
    
    
    
    9,288
    
    
    
    33
    
    
    
    1.34Long-term debt
    
    
    183,384
    
    
    
    1,810
    
    
    
    3.94
    
    
    
    177,473
    
    
    
    1,737
    
    
    
    3.93Total interest-bearing liabilities excluding derivatives
    
    
    631,034
    
    
    
    4,366
    
    
    
    2.76
    
    
    
    619,044
    
    
    
    4,275
    
    
    
    2.77Risk management derivatives (d)
    
    
    
    
    
    
    43
    
    
    
    0.02
    
    
    
    
    
    
    
    81
    
    
    
    0.06Total interest-bearing liabilities including derivatives
    
    
    631,034
    
    
    
    4,409
    
    
    
    2.78
    
    
    
    619,044
    
    
    
    4,356
    
    
    
    2.83Noninterest-bearing deposits
    
    
    57,540
    
    
    
    
    
    
    
    
    
    
    
    57,982Other liabilities
    
    
    33,138
    
    
    
    
    
    
    
    
    
    
    
    37,671Stockholders equity
    
    
    70,195
    
    
    
    
    
    
    
    
    
    
    
    81,740Total liabilities and stockholders equity
    
    $
    791,907
    
    
    
    
    
    
    
    
    
    
    $
    796,437Interest income and rate earned  including derivatives
    
    
    
    
    
    $
    9,448
    
    
    
    5.50
    %
    
    
    
    
    
    $
    8,700
    
    
    
    5.17
    %Interest expense and equivalent rate paid  including derivatives
    
    
    
    
    
    
    4,409
    
    
    
    2.56
    
    
    
    
    
    
    
    4,356
    
    
    
    2.59Net interest income and margin  including derivatives
    
    
    
    
    
    $
    5,039
    
    
    
    2.94
    %
    
    
    
    
    
    $
    4,344
    
    
    
    2.58
    %
 
 76




---



##### 



FIRST QUARTER 2008
    
    
    FOURTH QUARTER 2007
    
    
    THIRD 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$
    4,253
    
    
    51
    
    
    
    4.85
    %
    
    $
    5,083
    
    
    
    64
    
    
    
    5.05
    %
    
    $
    6,459
    
    
    
    93
    
    
    
    5.68
    %11,865
    
    
    103
    
    
    
    3.49
    
    
    
    12,901
    
    
    
    155
    
    
    
    4.77
    
    
    
    14,206
    
    
    
    194
    
    
    
    5.4244,655
    
    
    589
    
    
    
    5.28
    
    
    
    37,694
    
    
    
    569
    
    
    
    6.04
    
    
    
    38,737
    
    
    
    575
    
    
    
    5.93110,401
    
    
    1,545
    
    
    
    5.60
    
    
    
    115,436
    
    
    
    1,625
    
    
    
    5.62
    
    
    
    111,424
    
    
    
    1,522
    
    
    
    5.46115,377
    
    
    1,671
    
    
    
    5.82
    
    
    
    111,500
    
    
    
    1,908
    
    
    
    6.79
    
    
    
    106,263
    
    
    
    1,927
    
    
    
    7.1918,634
    
    
    251
    
    
    
    5.42
    
    
    
    18,435
    
    
    
    318
    
    
    
    6.85
    
    
    
    17,795
    
    
    
    344
    
    
    
    7.6625,291
    
    
    374
    
    
    
    5.95
    
    
    
    22,973
    
    
    
    426
    
    
    
    7.36
    
    
    
    20,883
    
    
    
    406
    
    
    
    7.717,167
    
    
    140
    
    
    
    7.79
    
    
    
    7,374
    
    
    
    145
    
    
    
    7.82
    
    
    
    7,523
    
    
    
    146
    
    
    
    7.8032,109
    
    
    389
    
    
    
    4.86
    
    
    
    27,882
    
    
    
    380
    
    
    
    5.42
    
    
    
    22,208
    
    
    
    308
    
    
    
    5.53198,578
    
    
    2,825
    
    
    
    5.72
    
    
    
    188,164
    
    
    
    3,177
    
    
    
    6.70
    
    
    
    174,672
    
    
    
    3,131
    
    
    
    7.12231,392
    
    
    3,926
    
    
    
    6.79
    
    
    
    227,893
    
    
    
    4,042
    
    
    
    7.08
    
    
    
    223,356
    
    
    
    4,070
    
    
    
    7.289,155
    
    
    113
    
    
    
    4.96
    
    
    
    8,073
    
    
    
    126
    
    
    
    6.19
    
    
    
    7,299
    
    
    
    122
    
    
    
    6.6126,811
    
    
    659
    
    
    
    9.88
    
    
    
    25,675
    
    
    
    651
    
    
    
    10.04
    
    
    
    24,474
    
    
    
    614
    
    
    
    9.96267,358
    
    
    4,698
    
    
    
    7.04
    
    
    
    261,641
    
    
    
    4,819
    
    
    
    7.35
    
    
    
    255,129
    
    
    
    4,806
    
    
    
    7.52465,936
    
    
    7,523
    
    
    
    6.48
    
    
    
    449,805
    
    
    
    7,996
    
    
    
    7.08
    
    
    
    429,801
    
    
    
    7,937
    
    
    
    7.3511,592
    
    
    223
    
    
    
    7.71
    
    
    
    18,998
    
    
    
    360
    
    
    
    7.53
    
    
    
    20,209
    
    
    
    363
    
    
    
    7.1410,331
    
    
    146
    
    
    
    5.69
    
    
    
    10,223
    
    
    
    166
    
    
    
    6.48
    
    
    
    7,937
    
    
    
    138
    
    
    
    6.91659,033
    
    
    10,180
    
    
    
    6.19
    
    
    
    650,140
    
    
    
    10,935
    
    
    
    6.70
    
    
    
    628,773
    
    
    
    10,822
    
    
    
    6.86
    
    
    52
    
    
    
    0.04
    
    
    
    
    
    
    
    19
    
    
    
    0.01
    
    
    
    
    
    
    
    42
    
    
    
    0.02659,033
    
    
    10,232
    
    
    
    6.23
    
    
    
    650,140
    
    
    
    10,954
    
    
    
    6.71
    
    
    
    628,773
    
    
    
    10,864
    
    
    
    6.8811,645
    
    
    
    
    
    
    
    
    
    
    12,028
    
    
    
    
    
    
    
    
    
    
    
    11,134112,915
    
    
    
    
    
    
    
    
    
    
    101,319
    
    
    
    
    
    
    
    
    
    
    
    89,097$
    783,593
    
    
    
    
    
    
    
    
    
    $
    763,487
    
    
    
    
    
    
    
    
    
    
    $
    729,00486,452
    
    
    236
    
    
    
    1.10
    
    
    
    83,370
    
    
    
    345
    
    
    
    1.64
    
    
    
    81,851
    
    
    
    357
    
    
    
    1.73128,074
    
    
    747
    
    
    
    2.34
    
    
    
    121,717
    
    
    
    949
    
    
    
    3.09
    
    
    
    116,404
    
    
    
    980
    
    
    
    3.34123,655
    
    
    1,437
    
    
    
    4.68
    
    
    
    127,061
    
    
    
    1,557
    
    
    
    4.86
    
    
    
    122,474
    
    
    
    1,507
    
    
    
    4.8826,197
    
    
    231
    
    
    
    3.55
    
    
    
    27,354
    
    
    
    306
    
    
    
    4.44
    
    
    
    23,322
    
    
    
    292
    
    
    
    4.9722,643
    
    
    265
    
    
    
    4.71
    
    
    
    20,169
    
    
    
    263
    
    
    
    5.16
    
    
    
    13,776
    
    
    
    187
    
    
    
    5.40387,021
    
    
    2,916
    
    
    
    3.03
    
    
    
    379,671
    
    
    
    3,420
    
    
    
    3.57
    
    
    
    357,827
    
    
    
    3,323
    
    
    
    3.6835,956
    
    
    308
    
    
    
    3.45
    
    
    
    36,386
    
    
    
    413
    
    
    
    4.50
    
    
    
    44,334
    
    
    
    556
    
    
    
    4.985,509
    
    
    38
    
    
    
    2.74
    
    
    
    7,272
    
    
    
    78
    
    
    
    4.27
    
    
    
    5,799
    
    
    
    65
    
    
    
    4.426,919
    
    
    62
    
    
    
    3.63
    
    
    
    6,728
    
    
    
    61
    
    
    
    3.62
    
    
    
    7,420
    
    
    
    70
    
    
    
    3.7410,154
    
    
    45
    
    
    
    1.77
    
    
    
    10,369
    
    
    
    58
    
    
    
    2.24
    
    
    
    7,793
    
    
    
    55
    
    
    
    2.74165,540
    
    
    1,961
    
    
    
    4.75
    
    
    
    158,704
    
    
    
    2,129
    
    
    
    5.34
    
    
    
    151,226
    
    
    
    2,067
    
    
    
    5.44611,099
    
    
    5,330
    
    
    
    3.51
    
    
    
    599,130
    
    
    
    6,159
    
    
    
    4.08
    
    
    
    574,399
    
    
    
    6,136
    
    
    
    4.24
    
    
    97
    
    
    
    0.06
    
    
    
    
    
    
    
    121
    
    
    
    0.08
    
    
    
    
    
    
    
    144
    
    
    
    0.10611,099
    
    
    5,427
    
    
    
    3.57
    
    
    
    599,130
    
    
    
    6,280
    
    
    
    4.16
    
    
    
    574,399
    
    
    
    6,280
    
    
    
    4.3456,332
    
    
    
    
    
    
    
    
    
    
    57,895
    
    
    
    
    
    
    
    
    
    
    
    58,28037,415
    
    
    
    
    
    
    
    
    
    
    32,476
    
    
    
    
    
    
    
    
    
    
    
    26,46878,747
    
    
    
    
    
    
    
    
    
    
    73,986
    
    
    
    
    
    
    
    
    
    
    
    69,857$
    783,593
    
    
    
    
    
    
    
    
    
    $
    763,487
    
    
    
    
    
    
    
    
    
    
    $
    729,004$
    10,232
    
    
    
    6.23
    %
    
    
    
    
    
    $
    10,954
    
    
    
    6.71
    %
    
    
    
    
    
    $
    10,864
    
    
    
    6.88
    %5,427
    
    
    
    3.31
    
    
    
    
    
    
    
    6,280
    
    
    
    3.83
    
    
    
    
    
    
    
    6,280
    
    
    
    3.96$
    4,805
    
    
    
    2.92
    %
    
    
    
    
    
    $
    4,674
    
    
    
    2.88
    %
    
    
    
    
    
    $
    4,584
    
    
    
    2.92
    %
 
 77




---



##### 



WACHOVIA CORPORATION AND SUBSIDIARIES
NET INTEREST INCOME SUMMARIES
 NINE MONTHS ENDED
    
    
    NINE MONTHS ENDEDSEPTEMBER 30, 2008
    
    
    SEPTEMBER 30, 2007Average
    
    
    
    
    
    
    
    
    
    
    AverageInterest
    
    
    Rates
    
    
    
    
    
    
    Interest
    
    
    RatesAverage
    
    
    Income/
    
    
    Earned/
    
    
    Average
    
    
    Income/
    
    
    Earned/(In millions)
    
    Balances
    
    
    Expense
    
    
    Paid
    
    
    Balances
    
    
    Expense
    
    
    PaidASSETSInterest-bearing bank balances
    
    $
    7,179
    
    
    
    167
    
    
    
    3.11
    %
    
    $
    3,807
    
    
    
    173
    
    
    
    6.06
    %Federal funds sold and securities
purchased under resale agreements
    
    
    14,514
    
    
    
    304
    
    
    
    2.80
    
    
    
    13,480
    
    
    
    529
    
    
    
    5.25Trading account assets (a)
    
    
    41,630
    
    
    
    1,561
    
    
    
    5.00
    
    
    
    34,561
    
    
    
    1,536
    
    
    
    5.93Securities (a)
    
    
    115,812
    
    
    
    4,746
    
    
    
    5.47
    
    
    
    109,322
    
    
    
    4,450
    
    
    
    5.43Loans (a) (b)CommercialCommercial, financial and agricultural
    
    
    119,560
    
    
    
    4,689
    
    
    
    5.24
    
    
    
    101,925
    
    
    
    5,468
    
    
    
    7.17Real estate  construction and other
    
    
    18,640
    
    
    
    644
    
    
    
    4.62
    
    
    
    17,217
    
    
    
    986
    
    
    
    7.66Real estate  mortgage
    
    
    26,536
    
    
    
    1,059
    
    
    
    5.33
    
    
    
    20,432
    
    
    
    1,164
    
    
    
    7.62Lease financing (c)
    
    
    6,748
    
    
    
    (609
    )
    
    
    (12.04
    )
    
    
    7,670
    
    
    
    446
    
    
    
    7.76Foreign
    
    
    33,095
    
    
    
    1,100
    
    
    
    4.44
    
    
    
    18,644
    
    
    
    769
    
    
    
    5.51Total commercial
    
    
    204,579
    
    
    
    6,883
    
    
    
    4.49
    
    
    
    165,888
    
    
    
    8,833
    
    
    
    7.12ConsumerReal estate secured
    
    
    230,620
    
    
    
    11,120
    
    
    
    6.43
    
    
    
    223,778
    
    
    
    12,260
    
    
    
    7.31Student loans
    
    
    9,977
    
    
    
    327
    
    
    
    4.38
    
    
    
    8,220
    
    
    
    399
    
    
    
    6.49Installment loans
    
    
    28,560
    
    
    
    2,055
    
    
    
    9.61
    
    
    
    24,274
    
    
    
    1,789
    
    
    
    9.85Total consumer
    
    
    269,157
    
    
    
    13,502
    
    
    
    6.69
    
    
    
    256,272
    
    
    
    14,448
    
    
    
    7.52Total loans
    
    
    473,736
    
    
    
    20,385
    
    
    
    5.74
    
    
    
    422,160
    
    
    
    23,281
    
    
    
    7.36Loans held for sale
    
    
    9,712
    
    
    
    516
    
    
    
    7.08
    
    
    
    18,213
    
    
    
    903
    
    
    
    6.62Other earning assets
    
    
    10,818
    
    
    
    415
    
    
    
    5.12
    
    
    
    8,057
    
    
    
    421
    
    
    
    6.98Total earning assets excluding derivatives
    
    
    673,401
    
    
    
    28,094
    
    
    
    5.57
    
    
    
    609,600
    
    
    
    31,293
    
    
    
    6.85Risk management derivatives (d)
    
    
    -
    
    
    
    286
    
    
    
    0.05
    
    
    
    -
    
    
    
    136
    
    
    
    0.03Total earning assets including derivatives
    
    
    673,401
    
    
    
    28,380
    
    
    
    5.62
    
    
    
    609,600
    
    
    
    31,429
    
    
    
    6.88Cash and due from banks
    
    
    11,791
    
    
    
    
    
    
    
    
    
    
    
    11,638Other assets
    
    
    105,458
    
    
    
    
    
    
    
    
    
    
    
    87,170Total assets
    
    $
    790,650
    
    
    
    
    
    
    
    
    
    
    $
    708,408LIABILITIES AND STOCKHOLDERS EQUITYInterest-bearing depositsSavings and NOW accounts
    
    
    83,931
    
    
    
    497
    
    
    
    0.79
    
    
    
    83,350
    
    
    
    1,097
    
    
    
    1.76Money market accounts
    
    
    129,313
    
    
    
    1,701
    
    
    
    1.76
    
    
    
    111,949
    
    
    
    2,873
    
    
    
    3.43Other consumer time
    
    
    121,967
    
    
    
    3,769
    
    
    
    4.13
    
    
    
    119,828
    
    
    
    4,331
    
    
    
    4.83Foreign
    
    
    25,585
    
    
    
    612
    
    
    
    3.20
    
    
    
    22,008
    
    
    
    811
    
    
    
    4.93Other time
    
    
    23,902
    
    
    
    702
    
    
    
    3.92
    
    
    
    10,304
    
    
    
    413
    
    
    
    5.36Total interest-bearing deposits
    
    
    384,698
    
    
    
    7,281
    
    
    
    2.53
    
    
    
    347,439
    
    
    
    9,525
    
    
    
    3.67Federal funds purchased and securities
sold under repurchase agreements
    
    
    39,557
    
    
    
    827
    
    
    
    2.79
    
    
    
    39,203
    
    
    
    1,459
    
    
    
    4.98Commercial paper
    
    
    5,036
    
    
    
    75
    
    
    
    1.98
    
    
    
    5,290
    
    
    
    182
    
    
    
    4.60Securities sold short
    
    
    6,409
    
    
    
    170
    
    
    
    3.54
    
    
    
    7,758
    
    
    
    220
    
    
    
    3.79Other short-term borrowings
    
    
    9,236
    
    
    
    110
    
    
    
    1.60
    
    
    
    7,463
    
    
    
    151
    
    
    
    2.69Long-term debt
    
    
    175,495
    
    
    
    5,508
    
    
    
    4.19
    
    
    
    145,604
    
    
    
    5,870
    
    
    
    5.39Total interest-bearing liabilities excluding derivatives
    
    
    620,431
    
    
    
    13,971
    
    
    
    3.01
    
    
    
    552,757
    
    
    
    17,407
    
    
    
    4.21Risk management derivatives (d)
    
    
    -
    
    
    
    221
    
    
    
    0.04
    
    
    
    -
    
    
    
    414
    
    
    
    0.10Total interest-bearing liabilities including derivatives
    
    
    620,431
    
    
    
    14,192
    
    
    
    3.05
    
    
    
    552,757
    
    
    
    17,821
    
    
    
    4.31Noninterest-bearing deposits
    
    
    57,285
    
    
    
    
    
    
    
    
    
    
    
    60,500Other liabilities
    
    
    36,064
    
    
    
    
    
    
    
    
    
    
    
    25,651Stockholders equity
    
    
    76,870
    
    
    
    
    
    
    
    
    
    
    
    69,500Total liabilities and stockholders equity
    
    $
    790,650
    
    
    
    
    
    
    
    
    
    
    $
    708,408Interest income and rate earned  including derivatives
    
    
    
    
    
    $
    28,380
    
    
    
    5.62
    %
    
    
    
    
    
    $
    31,429
    
    
    
    6.88
    %Interest expense and equivalent rate paid  including derivatives
    
    
    
    
    
    
    14,192
    
    
    
    2.81
    
    
    
    
    
    
    
    17,821
    
    
    
    3.90Net interest income and margin  including derivatives
    
    
    
    
    
    $
    14,188
    
    
    
    2.81
    %
    
    
    
    
    
    $
    13,608
    
    
    
    2.98
    %
     78




---



##### 



WACHOVIA CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 2008
    
    
    2007Third
    
    
    Second
    
    
    First
    
    
    Fourth
    
    
    Third(In millions, except per share data)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterASSETSCash and due from banks
    
    $
    22,233
    
    
    
    15,127
    
    
    
    14,703
    
    
    
    15,124
    
    
    
    12,681Interest-bearing bank balances
    
    
    2,287
    
    
    
    10,289
    
    
    
    3,236
    
    
    
    3,057
    
    
    
    4,449Federal funds sold and securities purchased under
resale agreements
    
    
    9,900
    
    
    
    21,923
    
    
    
    10,644
    
    
    
    15,449
    
    
    
    11,995Total cash and cash equivalents
    
    
    34,420
    
    
    
    47,339
    
    
    
    28,583
    
    
    
    33,630
    
    
    
    29,125Trading account assets
    
    
    56,000
    
    
    
    62,589
    
    
    
    72,592
    
    
    
    55,882
    
    
    
    54,835Securities
    
    
    107,693
    
    
    
    113,461
    
    
    
    114,183
    
    
    
    115,037
    
    
    
    111,827Loans, net of unearned income
    
    
    482,373
    
    
    
    488,198
    
    
    
    480,482
    
    
    
    461,954
    
    
    
    449,206Allowance for loan losses
    
    
    (15,351
    )
    
    
    (10,744
    )
    
    
    (6,567
    )
    
    
    (4,507
    )
    
    
    (3,505
    )Loans, net
    
    
    467,022
    
    
    
    477,454
    
    
    
    473,915
    
    
    
    457,447
    
    
    
    445,701Loans held for sale
    
    
    9,247
    
    
    
    8,430
    
    
    
    11,429
    
    
    
    16,772
    
    
    
    21,431Premises and equipment
    
    
    7,031
    
    
    
    6,667
    
    
    
    6,733
    
    
    
    6,605
    
    
    
    6,002Due from customers on acceptances
    
    
    664
    
    
    
    1,302
    
    
    
    1,109
    
    
    
    1,418
    
    
    
    1,295Goodwill
    
    
    18,353
    
    
    
    36,993
    
    
    
    43,068
    
    
    
    43,122
    
    
    
    38,848Other intangible assets
    
    
    1,858
    
    
    
    1,942
    
    
    
    2,038
    
    
    
    2,119
    
    
    
    1,380Other assets
    
    
    62,090
    
    
    
    56,256
    
    
    
    54,925
    
    
    
    50,864
    
    
    
    43,724Total assets
    
    $
    764,378
    
    
    
    812,433
    
    
    
    808,575
    
    
    
    782,896
    
    
    
    754,168LIABILITIES AND STOCKHOLDERS EQUITYDepositsNoninterest-bearing deposits
    
    
    55,752
    
    
    
    63,393
    
    
    
    60,951
    
    
    
    60,893
    
    
    
    56,825Interest-bearing deposits
    
    
    363,088
    
    
    
    384,397
    
    
    
    384,013
    
    
    
    388,236
    
    
    
    365,112Total deposits
    
    
    418,840
    
    
    
    447,790
    
    
    
    444,964
    
    
    
    449,129
    
    
    
    421,937Short-term borrowings
    
    
    67,867
    
    
    
    55,448
    
    
    
    57,857
    
    
    
    50,393
    
    
    
    62,714Bank acceptances outstanding
    
    
    673
    
    
    
    1,307
    
    
    
    1,118
    
    
    
    1,424
    
    
    
    1,303Trading account liabilities
    
    
    18,388
    
    
    
    26,305
    
    
    
    28,887
    
    
    
    21,585
    
    
    
    17,771Other liabilities
    
    
    22,274
    
    
    
    19,023
    
    
    
    19,036
    
    
    
    19,151
    
    
    
    18,424Long-term debt
    
    
    183,350
    
    
    
    184,401
    
    
    
    175,653
    
    
    
    161,007
    
    
    
    158,584Total liabilities
    
    
    711,392
    
    
    
    734,274
    
    
    
    727,515
    
    
    
    702,689
    
    
    
    680,733Minority interest in net assets of consolidated subsidiaries
    
    
    2,983
    
    
    
    3,032
    
    
    
    3,068
    
    
    
    3,335
    
    
    
    3,295STOCKHOLDERS 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 September 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 September 30, 2008
    
    
    2,300
    
    
    
    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 September 30, 2008
    
    
    3,500
    
    
    
    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 September 30, 2008
    
    
    4,025
    
    
    
    4,025
    
    
    
    -
    
    
    
    -
    
    
    
    -Common stock, $3.33-1/3 par value; authorized 3 billion
shares, outstanding 2.137 billion shares at September 30, 2008
    
    
    7,124
    
    
    
    7,121
    
    
    
    6,551
    
    
    
    6,534
    
    
    
    6,283Paid-in capital
    
    
    59,883
    
    
    
    59,797
    
    
    
    56,367
    
    
    
    56,149
    
    
    
    51,938Retained earnings (accumulated deficit)
    
    
    (22,465
    )
    
    
    1,534
    
    
    
    11,449
    
    
    
    13,456
    
    
    
    14,670Accumulated other comprehensive income (loss), net
    
    
    (4,364
    )
    
    
    (3,150
    )
    
    
    (2,175
    )
    
    
    (1,567
    )
    
    
    (2,751
    )Total stockholders equity
    
    
    50,003
    
    
    
    75,127
    
    
    
    77,992
    
    
    
    76,872
    
    
    
    70,140Total liabilities and stockholders equity
    
    $
    764,378
    
    
    
    812,433
    
    
    
    808,575
    
    
    
    782,896
    
    
    
    754,168
 79




---



##### 



WACHOVIA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
 2008
    
    
    2007Third
    
    
    Second
    
    
    First
    
    
    Fourth
    
    
    Third(In millions, except per share data)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterINTEREST INCOMEInterest and fees on loans
    
    $
    6,972
    
    
    
    6,187
    
    
    
    7,577
    
    
    
    7,980
    
    
    
    7,937Interest and dividends on securities
    
    
    1,521
    
    
    
    1,530
    
    
    
    1,496
    
    
    
    1,616
    
    
    
    1,529Trading account interest
    
    
    415
    
    
    
    522
    
    
    
    571
    
    
    
    557
    
    
    
    566Other interest income
    
    
    492
    
    
    
    407
    
    
    
    535
    
    
    
    757
    
    
    
    799Total interest income
    
    
    9,400
    
    
    
    8,646
    
    
    
    10,179
    
    
    
    10,910
    
    
    
    10,831INTEREST EXPENSEInterest on deposits
    
    
    2,231
    
    
    
    2,176
    
    
    
    2,941
    
    
    
    3,433
    
    
    
    3,334Interest on short-term borrowings
    
    
    389
    
    
    
    418
    
    
    
    523
    
    
    
    673
    
    
    
    801Interest on long-term debt
    
    
    1,789
    
    
    
    1,762
    
    
    
    1,963
    
    
    
    2,174
    
    
    
    2,145Total interest expense
    
    
    4,409
    
    
    
    4,356
    
    
    
    5,427
    
    
    
    6,280
    
    
    
    6,280Net interest income
    
    
    4,991
    
    
    
    4,290
    
    
    
    4,752
    
    
    
    4,630
    
    
    
    4,551Provision for credit losses
    
    
    6,629
    
    
    
    5,567
    
    
    
    2,831
    
    
    
    1,497
    
    
    
    408Net interest income (loss) after provision for credit losses
    
    
    (1,638
    )
    
    
    (1,277
    )
    
    
    1,921
    
    
    
    3,133
    
    
    
    4,143FEE AND OTHER INCOMEService charges
    
    
    717
    
    
    
    709
    
    
    
    676
    
    
    
    716
    
    
    
    689Other banking fees
    
    
    525
    
    
    
    518
    
    
    
    498
    
    
    
    497
    
    
    
    471Commissions
    
    
    799
    
    
    
    910
    
    
    
    914
    
    
    
    970
    
    
    
    600Fiduciary and asset management fees
    
    
    1,291
    
    
    
    1,355
    
    
    
    1,439
    
    
    
    1,436
    
    
    
    1,029Advisory, underwriting and other investment banking fees
    
    
    243
    
    
    
    280
    
    
    
    261
    
    
    
    249
    
    
    
    393Trading account profits (losses)
    
    
    (701
    )
    
    
    (510
    )
    
    
    (308
    )
    
    
    (524
    )
    
    
    (301
    )Principal investing
    
    
    (310
    )
    
    
    136
    
    
    
    446
    
    
    
    41
    
    
    
    372Securities gains (losses)
    
    
    (1,978
    )
    
    
    (808
    )
    
    
    (205
    )
    
    
    (320
    )
    
    
    (34
    )Other income
    
    
    147
    
    
    
    575
    
    
    
    (944
    )
    
    
    (321
    )
    
    
    (286
    )Total fee and other income
    
    
    733
    
    
    
    3,165
    
    
    
    2,777
    
    
    
    2,744
    
    
    
    2,933NONINTEREST EXPENSESalaries and employee benefits
    
    
    3,489
    
    
    
    3,435
    
    
    
    3,260
    
    
    
    3,468
    
    
    
    2,628Occupancy
    
    
    381
    
    
    
    377
    
    
    
    379
    
    
    
    375
    
    
    
    325Equipment
    
    
    325
    
    
    
    317
    
    
    
    323
    
    
    
    334
    
    
    
    283Marketing
    
    
    68
    
    
    
    95
    
    
    
    97
    
    
    
    80
    
    
    
    74Communications and supplies
    
    
    173
    
    
    
    184
    
    
    
    186
    
    
    
    191
    
    
    
    176Professional and consulting fees
    
    
    242
    
    
    
    218
    
    
    
    196
    
    
    
    271
    
    
    
    194Goodwill impairment
    
    
    18,786
    
    
    
    6,060
    
    
    
    -
    
    
    
    -
    
    
    
    -Other intangible amortization
    
    
    96
    
    
    
    97
    
    
    
    103
    
    
    
    111
    
    
    
    92Merger-related and restructuring expenses
    
    
    697
    
    
    
    251
    
    
    
    241
    
    
    
    187
    
    
    
    36Sundry expense
    
    
    1,288
    
    
    
    1,750
    
    
    
    656
    
    
    
    769
    
    
    
    717Total noninterest expense
    
    
    25,545
    
    
    
    12,784
    
    
    
    5,441
    
    
    
    5,786
    
    
    
    4,525Minority interest in income (loss) of consolidated subsidiaries
    
    
    (105
    )
    
    
    (18
    )
    
    
    155
    
    
    
    107
    
    
    
    189Income (loss) from continuing operations before income taxes
(benefits)
    
    
    (26,345
    )
    
    
    (10,878
    )
    
    
    (898
    )
    
    
    (16
    )
    
    
    2,362Income taxes (benefits)
    
    
    (2,647
    )
    
    
    (1,963
    )
    
    
    (234
    )
    
    
    (209
    )
    
    
    656Income (loss) from continuing operations
    
    
    (23,698
    )
    
    
    (8,915
    )
    
    
    (664
    )
    
    
    193
    
    
    
    1,706Discontinued operations, net of income taxes
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    (142
    )
    
    
    (88
    )Net income (loss)
    
    
    (23,698
    )
    
    
    (8,915
    )
    
    
    (664
    )
    
    
    51
    
    
    
    1,618Dividends on preferred stock
    
    
    191
    
    
    
    193
    
    
    
    43
    
    
    
    -
    
    
    
    -Net income (loss) available to common stockholders
    
    $
    (23,889
    )
    
    
    (9,108
    )
    
    
    (707
    )
    
    
    51
    
    
    
    1,618PER COMMON SHARE DATA (after preferred stock dividends)Basic earningsIncome (loss) from continuing operations
    
    $
    (11.18
    )
    
    
    (4.31
    )
    
    
    (0.36
    )
    
    
    0.10
    
    
    
    0.91Net income (loss) available to common stockholders
    
    
    (11.18
    )
    
    
    (4.31
    )
    
    
    (0.36
    )
    
    
    0.03
    
    
    
    0.86Diluted earnings (a)Income (loss) from continuing operations
    
    
    (11.18
    )
    
    
    (4.31
    )
    
    
    (0.36
    )
    
    
    0.10
    
    
    
    0.90Net income (loss) available to common stockholders
    
    
    (11.18
    )
    
    
    (4.31
    )
    
    
    (0.36
    )
    
    
    0.03
    
    
    
    0.85Cash dividends
    
    $
    0.05
    
    
    
    0.38
    
    
    
    0.64
    
    
    
    0.64
    
    
    
    0.64AVERAGE COMMON SHARESBasic
    
    
    2,137
    
    
    
    2,111
    
    
    
    1,963
    
    
    
    1,959
    
    
    
    1,885Diluted
    
    
    2,143
    
    
    
    2,119
    
    
    
    1,977
    
    
    
    1,983
    
    
    
    1,910
  80




---



##### 



WACHOVIA CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
 
 Consolidated Balance Sheets  September 30, 2008 and December 31, 2007 (Unaudited)
    
    82Consolidated Statements of Income  Three and Nine Months Ended September 30, 2008 and 2007 (Unaudited)
    
    83Consolidated Statements of Cash Flows  Nine Months Ended September 30, 2008 and 2007 (Unaudited)
    
    84Notes to Consolidated Financial Statements (Unaudited)Note 1: Summary of Significant Accounting Policies and Other Matters
    
    85Note 2: Trading Account Assets and Liabilities
    
    88Note 3: Securities
    
    89Note 4: Variable Interest Entities and Servicing Assets
    
    92Note 5: Loans, Net of Unearned Income
    
    94Note 6: Allowance for Loan Losses and Reserve for Unfunded Lending Commitments
    
    95Note 7: Goodwill and Other Intangible Assets
    
    96Note 8: Long-Term Debt
    
    97Note 9: Share-Based Payments
    
    98Note 10: Comprehensive Income (Loss)
    
    99Note 11: Business Segments
    
    100Note 12: Basic and Diluted Earnings Per Common Share
    
    103Note 13: Merger-Related and Restructuring Expenses
    
    104Note 14: Income Taxes
    
    105Note 15: Derivatives
    
    107Note 16: Guarantees
    
    111Note 17: Litigation
    
    112Note 18: Fair Value Measurements and Fair Value Option
    
    114
 81




---



##### 



WACHOVIA CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Unaudited)
 
 September 30,
    
    
    December 31,(In millions, except per share data)
    
    2008
    
    
    2007ASSETSCash and due from banks
    
    $
    22,233
    
    
    
    15,124Interest-bearing bank balances
    
    
    2,287
    
    
    
    3,057Federal funds sold and securities purchased under
resale agreements
    
    
    9,900
    
    
    
    15,449Total cash and cash equivalents
    
    
    34,420
    
    
    
    33,630Trading account assets
    
    
    56,000
    
    
    
    55,882Securities
    
    
    107,693
    
    
    
    115,037Loans, net of unearned income (includes $22 at fair value at September 30, 2008)
    
    
    482,373
    
    
    
    461,954Allowance for loan losses
    
    
    (15,351
    )
    
    
    (4,507
    )Loans, net
    
    
    467,022
    
    
    
    457,447Loans held for sale (includes $1,516 at fair value at September 30, 2008)
    
    
    9,247
    
    
    
    16,772Premises and equipment
    
    
    7,031
    
    
    
    6,605Due from customers on acceptances
    
    
    664
    
    
    
    1,418Goodwill
    
    
    18,353
    
    
    
    43,122Other intangible assets
    
    
    1,858
    
    
    
    2,119Other assets
    
    
    62,090
    
    
    
    50,864Total assets
    
    $
    764,378
    
    
    
    782,896LIABILITIES AND STOCKHOLDERS EQUITYDepositsNoninterest-bearing deposits
    
    
    55,752
    
    
    
    60,893Interest-bearing deposits
    
    
    363,088
    
    
    
    388,236Total deposits
    
    
    418,840
    
    
    
    449,129Short-term borrowings
    
    
    67,867
    
    
    
    50,393Bank acceptances outstanding
    
    
    673
    
    
    
    1,424Trading account liabilities
    
    
    18,388
    
    
    
    21,585Other liabilities
    
    
    22,274
    
    
    
    19,151Long-term debt
    
    
    183,350
    
    
    
    161,007Total liabilities
    
    
    711,392
    
    
    
    702,689Minority interest in net assets of consolidated subsidiaries
    
    
    2,983
    
    
    
    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 September 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 September 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 September 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 September 30, 2008
    
    
    4,025
    
    
    
    -Common stock, $3.33-1/3 par value; authorized 3 billion
shares, outstanding 2.137 billion shares at September 30, 2008
    
    
    7,124
    
    
    
    6,534Paid-in capital
    
    
    59,883
    
    
    
    56,149Retained earnings (accumulated deficit)
    
    
    (22,465
    )
    
    
    13,456Accumulated other comprehensive income (loss), net
    
    
    (4,364
    )
    
    
    (1,567
    )Total stockholders equity
    
    
    50,003
    
    
    
    76,872Total liabilities and stockholders equity
    
    $
    764,378
    
    
    
    782,896
  82




---



##### 



WACHOVIA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
 
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(In millions, except per share data)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007INTEREST INCOMEInterest and fees on loans
    
    $
    6,972
    
    
    
    7,937
    
    
    
    20,736
    
    
    
    23,278Interest and dividends on securities
    
    
    1,521
    
    
    
    1,529
    
    
    
    4,547
    
    
    
    4,481Trading account interest
    
    
    415
    
    
    
    566
    
    
    
    1,508
    
    
    
    1,505Other interest income
    
    
    492
    
    
    
    799
    
    
    
    1,434
    
    
    
    2,057Total interest income
    
    
    9,400
    
    
    
    10,831
    
    
    
    28,225
    
    
    
    31,321INTEREST EXPENSEInterest on deposits
    
    
    2,231
    
    
    
    3,334
    
    
    
    7,348
    
    
    
    9,528Interest on short-term borrowings
    
    
    389
    
    
    
    801
    
    
    
    1,330
    
    
    
    2,176Interest on long-term debt
    
    
    1,789
    
    
    
    2,145
    
    
    
    5,514
    
    
    
    6,117Total interest expense
    
    
    4,409
    
    
    
    6,280
    
    
    
    14,192
    
    
    
    17,821Net interest income
    
    
    4,991
    
    
    
    4,551
    
    
    
    14,033
    
    
    
    13,500Provision for credit losses
    
    
    6,629
    
    
    
    408
    
    
    
    15,027
    
    
    
    764Net interest income (loss) after provision for credit losses
    
    
    (1,638
    )
    
    
    4,143
    
    
    
    (994
    )
    
    
    12,736FEE AND OTHER INCOMEService charges
    
    
    717
    
    
    
    689
    
    
    
    2,102
    
    
    
    1,970Other banking fees
    
    
    525
    
    
    
    471
    
    
    
    1,541
    
    
    
    1,336Commissions
    
    
    799
    
    
    
    600
    
    
    
    2,623
    
    
    
    1,908Fiduciary and asset management fees
    
    
    1,291
    
    
    
    1,029
    
    
    
    4,085
    
    
    
    2,997Advisory, underwriting and other investment banking fees
    
    
    243
    
    
    
    393
    
    
    
    784
    
    
    
    1,254Trading account profits (losses)
    
    
    (701
    )
    
    
    (301
    )
    
    
    (1,519
    )
    
    
    22Principal investing
    
    
    (310
    )
    
    
    372
    
    
    
    272
    
    
    
    718Securities gains (losses)
    
    
    (1,978
    )
    
    
    (34
    )
    
    
    (2,991
    )
    
    
    42Other income
    
    
    147
    
    
    
    (286
    )
    
    
    (222
    )
    
    
    660Total fee and other income
    
    
    733
    
    
    
    2,933
    
    
    
    6,675
    
    
    
    10,907NONINTEREST EXPENSESalaries and employee benefits
    
    
    3,489
    
    
    
    2,628
    
    
    
    10,184
    
    
    
    8,722Occupancy
    
    
    381
    
    
    
    325
    
    
    
    1,137
    
    
    
    968Equipment
    
    
    325
    
    
    
    283
    
    
    
    965
    
    
    
    899Marketing
    
    
    68
    
    
    
    74
    
    
    
    260
    
    
    
    214Communications and supplies
    
    
    173
    
    
    
    176
    
    
    
    543
    
    
    
    527Professional and consulting fees
    
    
    242
    
    
    
    194
    
    
    
    656
    
    
    
    576Goodwill impairment
    
    
    18,786
    
    
    
    -
    
    
    
    24,846
    
    
    
    -Other intangible amortization
    
    
    96
    
    
    
    92
    
    
    
    296
    
    
    
    313Merger-related and restructuring expenses
    
    
    697
    
    
    
    36
    
    
    
    1,189
    
    
    
    78Sundry expense
    
    
    1,288
    
    
    
    717
    
    
    
    3,694
    
    
    
    1,739Total noninterest expense
    
    
    25,545
    
    
    
    4,525
    
    
    
    43,770
    
    
    
    14,036Minority interest in income (loss) of consolidated subsidiaries
    
    
    (105
    )
    
    
    189
    
    
    
    32
    
    
    
    464Income (loss) from continuing operations before income taxes (benefits)
    
    
    (26,345
    )
    
    
    2,362
    
    
    
    (38,121
    )
    
    
    9,143Income taxes (benefits)
    
    
    (2,647
    )
    
    
    656
    
    
    
    (4,844
    )
    
    
    2,794Income (loss) from continuing operations
    
    
    (23,698
    )
    
    
    1,706
    
    
    
    (33,277
    )
    
    
    6,349Discontinued operations, net of income taxes
    
    
    -
    
    
    
    (88
    )
    
    
    -
    
    
    
    (88
    )Net income (loss)
    
    
    (23,698
    )
    
    
    1,618
    
    
    
    (33,277
    )
    
    
    6,261Dividends on preferred stock
    
    
    191
    
    
    
    -
    
    
    
    427
    
    
    
    -Net income (loss) available to common stockholders
    
    $
    (23,889
    )
    
    
    1,618
    
    
    
    (33,704
    )
    
    
    6,261PER COMMON SHARE DATABasic earningsIncome (loss) from continuing operations
    
    $
    (11.18
    )
    
    
    0.91
    
    
    
    (16.28
    )
    
    
    3.36Net income (loss) available to common stockholders
    
    
    (11.18
    )
    
    
    0.86
    
    
    
    (16.28
    )
    
    
    3.31Diluted earningsIncome (loss) from continuing operations
    
    
    (11.18
    )
    
    
    0.90
    
    
    
    (16.28
    )
    
    
    3.31Net income (loss) available to common stockholders
    
    
    (11.18
    )
    
    
    0.85
    
    
    
    (16.28
    )
    
    
    3.26Cash dividends
    
    $
    0.05
    
    
    
    0.64
    
    
    
    1.07
    
    
    
    1.76AVERAGE COMMON SHARESBasic
    
    
    2,137
    
    
    
    1,885
    
    
    
    2,070
    
    
    
    1,890Diluted
    
    
    2,143
    
    
    
    1,910
    
    
    
    2,080
    
    
    
    1,918
  83




---



##### 



WACHOVIA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
 
 Nine Months EndedSeptember 30,(In millions)
    
    2008
    
    
    2007OPERATING ACTIVITIESNet income (loss)
    
    $
    (33,277
    )
    
    
    6,261Adjustments to reconcile net income to net cash provided (used) by operating activitiesAccretion and amortization of securities discounts and premiums, net
    
    
    (17
    )
    
    
    (65
    )Provision for credit losses
    
    
    15,027
    
    
    
    764Gain on securitization transactions
    
    
    57
    
    
    
    (97
    )Gain on sale of mortgage servicing rights
    
    
    (3
    )
    
    
    (4
    )Securities transactions
    
    
    2,991
    
    
    
    (42
    )Goodwill impairment
    
    
    24,846
    
    
    
    -Depreciation and other amortization
    
    
    1,468
    
    
    
    1,369Trading account assets, net
    
    
    6,689
    
    
    
    (10,094
    )Loss (gain) on sales of premises and equipment
    
    
    21
    
    
    
    1Valuation 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
    
    
    29
    
    
    
    (43
    )Loans held for sale, net
    
    
    1,792
    
    
    
    (6,952
    )Deferred interest on certain loans
    
    
    (1,051
    )
    
    
    (1,087
    )Other assets, net
    
    
    (8,933
    )
    
    
    (1,494
    )Trading account liabilities, net
    
    
    (3,197
    )
    
    
    (457
    )Other liabilities, net
    
    
    2,463
    
    
    
    (1,293
    )Net cash provided (used) by operating activities
    
    
    9,219
    
    
    
    (13,503
    )INVESTING ACTIVITIESIncrease (decrease) in cash realized fromSales of securities
    
    
    20,796
    
    
    
    9,365Maturities of securities
    
    
    76,286
    
    
    
    33,504Purchases of securities
    
    
    (99,208
    )
    
    
    (45,876
    )Origination of loans, net
    
    
    (22,526
    )
    
    
    (31,488
    )Sales of premises and equipment
    
    
    334
    
    
    
    218Purchases of premises and equipment
    
    
    (1,558
    )
    
    
    (720
    )Goodwill and other intangible assets
    
    
    (112
    )
    
    
    (527
    )Purchase of bank-owned separate account life insurance, net
    
    
    (708
    )
    
    
    (607
    )Net cash used by investing activities
    
    
    (26,696
    )
    
    
    (36,131
    )FINANCING ACTIVITIESIncrease (decrease) in cash realized fromIncrease (decrease) in deposits, net
    
    
    (30,289
    )
    
    
    14,479Securities sold under repurchase agreements and other short-term borrowings, net
    
    
    17,474
    
    
    
    13,557Issuances of long-term debt
    
    
    61,172
    
    
    
    48,267Payments of long-term debt
    
    
    (38,829
    )
    
    
    (28,277
    )Issuances of preferred shares
    
    
    7,472
    
    
    
    -Issuances of common stock, net
    
    
    3,933
    
    
    
    323Purchases of common stock
    
    
    (20
    )
    
    
    (1,197
    )(Income tax shortfall) excess income tax benefit from share-based payment arrangements
    
    
    (29
    )
    
    
    43Cash dividends paid
    
    
    (2,617
    )
    
    
    (3,352
    )Net cash provided by financing activities
    
    
    18,267
    
    
    
    43,843Increase (decrease) in cash and cash equivalents
    
    
    790
    
    
    
    (5,791
    )Cash and cash equivalents, beginning of year
    
    
    33,630
    
    
    
    34,916Cash and cash equivalents, end of period
    
    $
    34,420
    
    
    
    29,125NONCASH ITEMSTransfer to securities from loans resulting from securitizations
    
    $
    -
    
    
    
    1,119Transfer to securities from loans held for sale resulting from securitizations
    
    
    4,781
    
    
    
    -Transfer to trading account assets from securities
    
    
    6,807
    
    
    
    -Transfer to loans from loans held for sale
    
    
    926
    
    
    
    (1,911
    )Cumulative 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
    MERGER
  LIQUIDITY
  PERSONNEL EXPENSE AND RETIREMENT BENEFITS
   85




---



##### 



Other PostretirementQualified Pension
    
    
    Nonqualified Pension
    
    
    BenefitsNine Months Ended
    
    
    Nine Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,(In millions)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007RETIREMENT BENEFIT COSTS (CREDITS)Service cost
    
    $
    128
    
    
    
    138
    
    
    
    -
    
    
    
    2
    
    
    
    2
    
    
    
    3Interest cost
    
    
    193
    
    
    
    197
    
    
    
    16
    
    
    
    16
    
    
    
    34
    
    
    
    33Expected return on plan assets
    
    
    (389
    )
    
    
    (369
    )
    
    
    -
    
    
    
    -
    
    
    
    (2
    )
    
    
    (2
    )Amortization of prior service cost
    
    
    (34
    )
    
    
    (20
    )
    
    
    (1
    )
    
    
    -
    
    
    
    -
    
    
    
    (6
    )Amortization of actuarial losses
    
    
    58
    
    
    
    91
    
    
    
    3
    
    
    
    6
    
    
    
    -
    
    
    
    -Net retirement benefit costs (credits)
    
    $

    (44
    )
    
    
    37
    
    
    
    18
    
    
    
    24
    
    
    
    34
    
    
    
    28
 
 EXIT COST PURCHASE ACCOUNTING ACCRUAL ACTIVITY
 Nine Months Ended September 30, 2008Employee
    
    
    OccupancyTermination
    
    
    and(In millions)
    
    Benefits
    
    
    Equipment
    
    
    TotalWachovia/A.G. Edwards  October 1, 2007Balance, December 31, 2007
    
    $
    16
    
    
    
    -
    
    
    
    16Purchase accounting adjustments
    
    
    33
    
    
    
    42
    
    
    
    75Cash payments
    
    
    (27
    )
    
    
    -
    
    
    
    (27
    )Balance, September 30, 2008
    
    $
    22
    
    
    
    42
    
    
    
    64Wachovia/Golden West  October 1, 2006Balance, December 31, 2007
    
    $
    49
    
    
    
    9
    
    
    
    58Purchase accounting adjustments
    
    
    (6
    )
    
    
    -
    
    
    
    (6
    )Cash payments
    
    
    (41
    )
    
    
    (9
    )
    
    
    (50
    )Balance, September 30, 2008
    
    $
    2
    
    
    
    -
    
    
    
    2Wachovia/SouthTrust  November 1, 2004Balance, December 31, 2007, as restated
    
    $
    37
    
    
    
    -
    
    
    
    37Purchase accounting adjustments
    
    
    -
    
    
    
    -
    
    
    
    -Cash payments
    
    
    (16
    )
    
    
    -
    
    
    
    (16
    )Balance, September 30, 2008
    
    $
    21
    
    
    
    -
    
    
    
    21
 SALE-IN, LEASE-OUT TRANSACTIONS
  GOODWILL
    86




---



##### 



AUCTION RATE SECURITIES
  PREFERRED STOCK
   OTHER
   DISCONTINUED OPERATIONS
   NEW ACCOUNTING PRONOUNCEMENTS
  RECLASSIFICATIONS
  87




---



##### 



NOTE 2: TRADING ACCOUNT ASSETS AND LIABILITIES
 September 30,
    
    
    December 31,(In millions)
    
    2008
    
    
    2007TRADING ACCOUNT ASSETSU.S. Treasury
    
    $
    469
    
    
    
    604U.S. Government agencies
    
    
    3,169
    
    
    
    2,811State, county and municipal
    
    
    12,741
    
    
    
    3,898Mortgage-backed securities
    
    
    2,853
    
    
    
    2,208Other asset-backed securities
    
    
    5,244
    
    
    
    11,427Corporate bonds and debentures
    
    
    4,472
    
    
    
    5,340Equity securities
    
    
    1,990
    
    
    
    4,411Derivative financial instruments (a)
    
    
    21,019
    
    
    
    19,116Sundry
    
    
    4,043
    
    
    
    6,067Total trading account assets
    
    $
    56,000
    
    
    
    55,882TRADING ACCOUNT LIABILITIESSecurities sold short
    
    
    4,966
    
    
    
    6,287Derivative financial instruments (a)
    
    
    13,422
    
    
    
    15,298Total trading account liabilities
    
    $
    18,388
    
    
    
    21,585
 (a)
    
    Derivative financial instruments are reported net of cash collateral received and paid. 88




---



##### 



NOTE 3: SECURITIES
 September 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
    
    $
    6,037
    
    
    
    171
    
    
    
    123
    
    
    
    -
    
    
    
    6,331
    
    
    
    11
    
    
    
    2
    
    
    
    6,322
    
    
    
    0.33Mortgage-backed securities
    
    
    380
    
    
    
    16,366
    
    
    
    42,498
    
    
    
    5
    
    
    
    59,249
    
    
    
    352
    
    
    
    569
    
    
    
    59,466
    
    
    
    6.28Asset-backedResidual interests
from securitizations
    
    
    4
    
    
    
    215
    
    
    
    77
    
    
    
    21
    
    
    
    317
    
    
    
    76
    
    
    
    17
    
    
    
    258
    
    
    
    4.01Retained bonds
from securitizations
    
    
    1,279
    
    
    
    100
    
    
    
    93
    
    
    
    -
    
    
    
    1,472
    
    
    
    1
    
    
    
    49
    
    
    
    1,520
    
    
    
    1.47Collateralized mortgage
obligations
    
    
    468
    
    
    
    5,940
    
    
    
    9,144
    
    
    
    1,348
    
    
    
    16,900
    
    
    
    58
    
    
    
    3,358
    
    
    
    20,200
    
    
    
    5.81Commercial mortgage-backed
    
    
    300
    
    
    
    779
    
    
    
    985
    
    
    
    26
    
    
    
    2,090
    
    
    
    35
    
    
    
    270
    
    
    
    2,325
    
    
    
    4.77Other
    
    
    718
    
    
    
    2,488
    
    
    
    512
    
    
    
    218
    
    
    
    3,936
    
    
    
    20
    
    
    
    625
    
    
    
    4,541
    
    
    
    3.23State, county and municipal
    
    
    128
    
    
    
    694
    
    
    
    452
    
    
    
    2,805
    
    
    
    4,079
    
    
    
    92
    
    
    
    199
    
    
    
    4,186
    
    
    
    13.87Sundry
    
    
    2,009
    
    
    
    1,822
    
    
    
    4,100
    
    
    
    5,388
    
    
    
    13,319
    
    
    
    72
    
    
    
    1,388
    
    
    
    14,635
    
    
    
    8.61Total market value
    
    $
    11,323
    
    
    
    28,575
    
    
    
    57,984
    
    
    
    9,811
    
    
    
    107,693
    
    
    
    717
    
    
    
    6,477
    
    
    
    113,453
    
    
    
    6.21MARKET VALUEDebt securities
    
    $
    11,323
    
    
    
    28,575
    
    
    
    57,984
    
    
    
    9,222
    
    
    
    107,104
    
    
    
    648
    
    
    
    6,440
    
    
    
    112,896Equity securities
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    589
    
    
    
    589
    
    
    
    69
    
    
    
    37
    
    
    
    557Total market value
    
    $
    11,323
    
    
    
    28,575
    
    
    
    57,984
    
    
    
    9,811
    
    
    
    107,693
    
    
    
    717
    
    
    
    6,477
    
    
    
    113,453AMORTIZED COSTDebt securities
    
    $
    11,482
    
    
    
    30,045
    
    
    
    61,105
    
    
    
    10,264
    
    
    
    112,896Equity securities
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    557
    
    
    
    557Total amortized cost
    
    $
    11,482
    
    
    
    30,045
    
    
    
    61,105
    
    
    
    10,821
    
    
    
    113,453WEIGHTED AVERAGE YIELDU.S. Treasury
    
    
    1.69
    %
    
    
    1.90
    
    
    
    2.21
    
    
    
    -
    
    
    
    1.71Mortgage-backed securities
    
    
    2.91
    
    
    
    5.31
    
    
    
    5.41
    
    
    
    5.99
    
    
    
    5.36Asset-backedResidual interests
from securitizations
    
    
    -
    
    
    
    21.51
    
    
    
    23.89
    
    
    
    15.88
    
    
    
    21.67Retained bonds
from securitizations
    
    
    4.56
    
    
    
    7.56
    
    
    
    6.27
    
    
    
    -
    
    
    
    4.93Collateralized mortgage
obligations
    
    
    4.71
    
    
    
    5.98
    
    
    
    6.25
    
    
    
    6.08
    
    
    
    6.11Commercial mortgage-backed
    
    
    6.28
    
    
    
    7.61
    
    
    
    5.16
    
    
    
    1.40
    
    
    
    6.13Other
    
    
    4.07
    
    
    
    4.77
    
    
    
    4.96
    
    
    
    6.24
    
    
    
    4.75State, county and municipal
    
    
    7.58
    
    
    
    7.24
    
    
    
    6.77
    
    
    
    6.29
    
    
    
    6.53Sundry
    
    
    4.81
    
    
    
    5.18
    
    
    
    4.43
    
    
    
    4.49
    
    
    
    4.61Consolidated
    
    
    3.11
    %
    
    
    5.60
    
    
    
    5.50
    
    
    
    5.27
    
    
    
    5.26
 89




---



##### 



Nine Months EndedSeptember 30,(In millions)
    
    2008
    
    
    2007Debt securitiesGross gains
    
    $
    130
    
    
    
    108Gross losses (a)
    
    
    (2,693
    )
    
    
    (114
    )Net gains (losses) on sales of debt securities
    
    
    (2,563
    )
    
    
    (6
    )Equity securitiesGross gains
    
    
    273
    
    
    
    49Gross losses (b)
    
    
    (701
    )
    
    
    (1
    )Net gains (losses) on sales of equity securities
    
    
    (428
    )
    
    
    48Total securities gains (losses)
    
    $
    (2,991
    )
    
    
    42
   90




---



##### 



September 30, 2008Less Than 1 Year
    
    
    1 Year or More
    
    
    TotalMarket
    
    
    Unrealized
    
    
    Market
    
    
    Unrealized
    
    
    Market
    
    
    Unrealized(In millions)
    
    Value
    
    
    Loss
    
    
    Value
    
    
    Loss
    
    
    Value
    
    
    LossAAA/AA-RATED SECURITIESU.S. Treasury
    
    $
    293
    
    
    
    (2
    )
    
    
    -
    
    
    
    -
    
    
    
    293
    
    
    
    (2
    )U.S. Government agencies
and sponsored entities
    
    
    29,618
    
    
    
    (328
    )
    
    
    8,948
    
    
    
    (241
    )
    
    
    38,566
    
    
    
    (569
    )Asset-backed
    
    
    14,385
    
    
    
    (3,148
    )
    
    
    4,955
    
    
    
    (848
    )
    
    
    19,340
    
    
    
    (3,996
    )State, county and municipal
    
    
    1,173
    
    
    
    (83
    )
    
    
    254
    
    
    
    (46
    )
    
    
    1,427
    
    
    
    (129
    )Sundry
    
    
    4,025
    
    
    
    (362
    )
    
    
    2,963
    
    
    
    (337
    )
    
    
    6,988
    
    
    
    (699
    )Total AAA/AA-rated securities
    
    
    49,494
    
    
    
    (3,923
    )
    
    
    17,120
    
    
    
    (1,472
    )
    
    
    66,614
    
    
    
    (5,395
    )A/BBB-RATED SECURITIESAsset-backed
    
    
    472
    
    
    
    (172
    )
    
    
    250
    
    
    
    (117
    )
    
    
    722
    
    
    
    (289
    )State, county and municipal
    
    
    637
    
    
    
    (62
    )
    
    
    63
    
    
    
    (8
    )
    
    
    700
    
    
    
    (70
    )Sundry
    
    
    2,833
    
    
    
    (566
    )
    
    
    60
    
    
    
    (19
    )
    
    
    2,893
    
    
    
    (585
    )Total A/BBB-rated securities
    
    
    3,942
    
    
    
    (800
    )
    
    
    373
    
    
    
    (144
    )
    
    
    4,315
    
    
    
    (944
    )BELOW INVESTMENT GRADEOR NON-RATED SECURITIESAsset-backed
    
    
    137
    
    
    
    (34
    )
    
    
    8
    
    
    
    -
    
    
    
    145
    
    
    
    (34
    )State, county and municipal
    
    
    19
    
    
    
    -
    
    
    
    2
    
    
    
    -
    
    
    
    21
    
    
    
    -Sundry
    
    
    621
    
    
    
    (90
    )
    
    
    102
    
    
    
    (14
    )
    
    
    723
    
    
    
    (104
    )Total below investment grade or
non-rated securities
    
    
    777
    
    
    
    (124
    )
    
    
    112
    
    
    
    (14
    )
    
    
    889
    
    
    
    (138
    )Total
    
    $
    54,213
    
    
    
    (4,847
    )
    
    
    17,605
    
    
    
    (1,630
    )
    
    
    71,818
    
    
    
    (6,477
    )
 91




---



##### 



NOTE 4: VARIABLE INTEREST ENTITIES AND SERVICING ASSETS
 VARIABLE INTEREST ENTITIES
      SERVICING ASSETS
   92




---



##### 



Nine Months Ended September 30, 2008Servicing AssetsFair 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
    
    
    259
    
    
    
    22
    
    
    
    54
    
    
    
    335Servicing sold or otherwise disposed of
    
    
    (14
    )
    
    
    -
    
    
    
    -
    
    
    
    (14
    )Change in fair value due to changes in model inputs
and/or assumptions
    
    
    18
    
    
    
    -
    
    
    
    -
    
    
    
    18Other changes in fair value, primarily from fees earned
    
    
    (72
    )
    
    
    -
    
    
    
    -
    
    
    
    (72
    )Amortization of servicing assets
    
    
    -
    
    
    
    (109
    )
    
    
    (39
    )
    
    
    (148
    )Impairment
    
    
    -
    
    
    
    (1
    )
    
    
    -
    
    
    
    (1
    )Balance, September 30, 2008
    
    $
    628
    
    
    
    683
    
    
    
    255
    
    
    
    1,566FAIR VALUESeptember 30, 2008
    
    $
    628
    
    
    
    925
    
    
    
    293
    
    
    
    1,846December 31, 2007
    
    $
    437
    
    
    
    991
    
    
    
    261
    
    
    
    1,689
 93




---



##### 



NOTE 5: LOANS, NET OF UNEARNED INCOME
 September 30,
    
    
    December 31,(In millions)
    
    2008
    
    
    2007COMMERCIALCommercial, financial and agricultural
    
    $
    128,411
    
    
    
    112,509Real estate  construction and other
    
    
    17,824
    
    
    
    18,543Real estate  mortgage
    
    
    27,970
    
    
    
    23,846Lease financing
    
    
    23,725
    
    
    
    23,913Foreign
    
    
    32,344
    
    
    
    29,540Total commercial
    
    
    230,274
    
    
    
    208,351CONSUMERReal estate secured (a)
    
    
    224,842
    
    
    
    227,719Student loans
    
    
    10,335
    
    
    
    8,149Installment loans
    
    
    26,433
    
    
    
    25,635Total consumer
    
    
    261,610
    
    
    
    261,503Total loans
    
    
    491,884
    
    
    
    469,854UNEARNED INCOME
    
    
    (9,511
    )
    
    
    (7,900
    )Loans, net of unearned income
    
    $
    482,373
    
    
    
    461,954
  94




---



##### 



NOTE 6: ALLOWANCE FOR LOAN LOSSES AND RESERVE FOR UNFUNDED LENDING COMMITMENTS
  Nine Months EndedSeptember 30,(In millions)
    
    2008
    
    
    2007ALLOWANCE FOR LOAN LOSSESBalance, beginning of period
    
    $
    4,507
    
    
    
    3,360Provision for credit losses
    
    
    14,908
    
    
    
    724Provision for credit losses relating to loans
transferred to loans held for sale or sold
    
    
    75
    
    
    
    8Allowance relating to loans acquired, transferred
to loans held for sale or sold
    
    
    (193
    )
    
    
    (76
    )Total
    
    
    19,297
    
    
    
    4,016Loan losses
    
    
    (4,231
    )
    
    
    (719
    )Loan recoveries
    
    
    285
    
    
    
    208Net charge-offs
    
    
    (3,946
    )
    
    
    (511
    )Balance, end of period
    
    $
    15,351
    
    
    
    3,505
 Nine Months EndedSeptember 30,(In millions)
    
    2008
    
    
    2007RESERVE FOR UNFUNDED LENDING COMMITMENTS (a)Balance, beginning of period
    
    $
    210
    
    
    
    154Provision for credit losses
    
    
    44
    
    
    
    32Balance, end of period
    
    $
    254
    
    
    
    186
  95




---



##### 



NOTE 7: GOODWILL AND OTHER INTANGIBLE ASSETS
 September 30,
    
    
    December 31,(In millions)
    
    2008
    
    
    2007Goodwill
    
    $
    18,353
    
    
    
    43,122Deposit base
    
    
    492
    
    
    
    619Customer relationships
    
    
    1,276
    
    
    
    1,410Tradename
    
    
    90
    
    
    
    90Total goodwill and other intangible assets
    
    $
    20,211
    
    
    
    45,241
   Corporate and
    
    
    CapitalGeneral Bank
    
    
    
    
    
    

    Investment Bank
    
    
    Management
    
    
    All OtherRetail and
    
    
    Wealth
    
    
    Corporate
    
    
    Investment
    
    
    Asset
    
    
    Reporting(In millions)
    
    Commercial
    
    
    Small Business
    
    
    Management
    
    
    Lending
    
    
    Banking
    
    
    Management
    
    
    Units
    
    
    TotalImpairmentSecond quarter
    
    $
    (2,526
    )
    
    
    -
    
    
    
    -
    
    
    
    (2,937
    )
    
    
    (597
    )
    
    
    -
    
    
    
    -
    
    
    
    (6,060
    )Third quarter
    
    
    (4,557
    )
    
    
    (12,332
    )
    
    
    (998
    )
    
    
    -
    
    
    
    -
    
    
    
    (899
    )
    
    
    -
    
    
    
    (18,786
    )Total
    
    $
    (7,083
    )
    
    
    (12,332
    )
    
    
    (998
    )
    
    
    (2,937
    )
    
    
    (597
    )
    
    
    (899
    )
    
    
    -
    
    
    
    (24,846
    )Remaining goodwill
    
    $
    -
    
    
    
    11,633
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    231
    
    
    
    6,489
    
    
    
    18,353
   96




---



##### 



NOTE 8: LONG-TERM DEBT
 September 30,
    
    
    December 31,(In millions)
    
    2008
    
    
    2007NOTES AND DEBENTURES ISSUED BYTHE PARENT COMPANYNotesFloating
rate, 0.67% to 4.571%, due 2008 to 2017
    
    $
    16,163
    
    
    
    15,514Equity-linked and commodity-linked, due 2008 to 2012
    
    
    548
    
    
    
    7923.625% to
5.80%, due 2009 to 2020
    
    
    13,819
    
    
    
    9,011Floating rate, EMTN notes, due 2011 to 2014
    
    
    3,508
    
    
    
    3,649Floating rate, Australian notes, due 2012
    
    
    710
    
    
    
    7896.75%, Australian notes, due 2012
    
    
    118
    
    
    
    1314.375%, EMTN notes, due 2016
    
    
    1,048
    
    
    
    1,090Subordinated notes4.875% to 6.375%, due 2008 to 2035
    
    
    5,811
    
    
    
    6,454Floating rate, due 2015 to 2016
    
    
    1,250
    
    
    
    1,2504.375% to 4.875%, EMTN notes, due 2018 to 2035
    
    
    1,928
    
    
    
    2,0996.605%, due 2025
    
    
    250
    
    
    
    2506.30%
    
    
    -
    
    
    
    200Floating rate, hybrid trust securities, due 2037 to 2047
    
    
    2,513
    
    
    
    2,5135.20%, income trust securities, due 2042
    
    
    2,501
    
    
    
    2,501Subordinated debentures6.55% to 7.574%, due 2026 to 2035
    
    
    796
    
    
    
    795Hedge-related basis adjustments
    
    
    543
    
    
    
    406Total notes and debentures issued by the
Parent Company
    
    
    51,506
    
    
    
    47,444NOTES ISSUED BY SUBSIDIARIESPrimarily notes issued under global bank note programs,
varying rates and terms to 2040
    
    
    26,155
    
    
    
    23,562Floating
rate, 2.843% to 3.304%, due 2009 to 2011
    
    
    2,650
    
    
    
    5,1334.125% to 4.75%, due 2009 to 2012
    
    
    1,691
    
    
    
    2,390Floating rate, EMTN notes, due 2009 to 2011
    
    
    4,127
    
    
    
    4,3166.00%, EMTN notes, due 2013
    
    
    2,106
    
    
    
    -Subordinated notesBank, 3.149% to 9.625%, due 2008 to 2038
    
    
    12,800
    
    
    
    12,955Floating rate, due 2013
    
    
    417
    
    
    
    4176.75%, Australian notes, due 2017
    
    
    157
    
    
    
    175Floating rate, Australian notes, due 2017
    
    
    158
    
    
    
    1755.25%, EMTN notes, due 2023
    
    
    1,323
    
    
    
    1,477Total notes issued by subsidiaries
    
    
    51,584
    
    
    
    50,600OTHER DEBTAuto secured
financing, 2.98% to 9.05%, due 2008 to 2015
    
    
    2,310
    
    
    
    6,679Collateralized notes
    
    
    -
    
    
    
    4,300Junior subordinated debentures, floating rate, due 2026
to 2029
    
    
    3,110
    
    
    
    3,098Advances from the Federal Home Loan Bank, 1.00% to 8.45%,
due 2008 to 2031
    
    
    64,942
    
    
    
    41,888Preferred units issued by subsidiaries
    
    
    1,153
    
    
    
    2,852Capitalized leases
    
    
    7
    
    
    
    8Mortgage notes and other debt of
subsidiaries, varying rates and terms
    
    
    8,348
    
    
    
    3,870Hedge-related basis adjustments
    
    
    390
    
    
    
    268Total other debt
    
    
    80,260
    
    
    
    62,963Total long-term debt
    
    $
    183,350
    
    
    
    161,007
 97




---



##### 



NOTE 9: SHARE-BASED PAYMENTS
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(In millions)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Employee stock compensation expenseRestricted stock awards
    
    $
    93
    
    
    
    84
    
    
    
    386
    
    
    
    348Stock option awards
    
    
    21
    
    
    
    26
    
    
    
    96
    
    
    
    94Total employee stock compensation expense
    
    
    114
    
    
    
    110
    
    
    
    482
    
    
    
    442Related income tax benefit
    
    
    40
    
    
    
    39
    
    
    
    169
    
    
    
    155Retirement-eligible portion of total employee stock compensation expense
    
    $
    -
    
    
    
    1
    
    
    
    109
    
    
    
    94
   September 30,(Dollars in millions)
    
    2008
    
    
    2007Unrecognized compensation costRestricted stock
    
    $
    486
    
    
    
    551Stock options
    
    $
    124
    
    
    
    168Weighted average period for cost recognition
    
    1.3

    yrs
    
    
    1.3
 Nine Months EndedSeptember 30,(In millions)
    
    2008
    
    
    2007Fair value of restricted stock vested
    
    $
    272
    
    
    
    341Intrinsic value of stock option awards exercised
    
    
    36
    
    
    
    294Cash received from the exercise of stock options granted
    
    
    69
    
    
    
    410Income tax benefit realized from stock options exercised
    
    $
    11
    
    
    
    89
  98




---



##### 



September 30, 2008Weighted-Average(Options and shares in thousands)
    
    Number
    
    
    Price (a)STOCK OPTIONSOptions outstanding, beginning of period
    
    
    128,971
    
    
    $
    41.09Granted
    
    
    12,268
    
    
    
    32.20Exercised
    
    
    (3,259
    )
    
    
    21.44Expired
    
    
    (6,678
    )
    
    
    51.92Forfeited
    
    
    (838
    )
    
    
    44.31Options outstanding, end of period
    
    
    130,464
    
    
    $
    40.17Options vested and expected to vest, end of period
    
    
    128,862
    
    
    $
    40.15Options exercisable, end of period
    
    
    105,330
    
    
    $
    39.27RESTRICTED STOCKUnvested shares, beginning of period
    
    
    19,914
    
    
    $
    54.18Granted
    
    
    13,876
    
    
    
    30.20Vested
    
    
    (9,143
    )
    
    
    52.77Forfeited
    
    
    (860
    )
    
    
    46.31Unvested shares, end of period
    
    
    23,787
    
    
    $
    40.61
  NOTE 10: COMPREHENSIVE INCOME (LOSS)
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(In millions)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007COMPREHENSIVE INCOME (LOSS)Net income (loss)
    
    $
    (23,698
    )
    
    
    1,618
    
    
    
    (33,277
    )
    
    
    6,261OTHER COMPREHENSIVE INCOME (LOSS)Unamortized gains under employee benefit plans
    
    
    6
    
    
    
    16
    
    
    
    17
    
    
    
    47Net unrealized gains (losses) on debt and equity securities
    
    
    (1,151
    )
    
    
    493
    
    
    
    (2,968
    )
    
    
    (690
    )Net unrealized gains (losses) on derivative financial instruments
    
    
    (69
    )
    
    
    3
    
    
    
    154
    
    
    
    (8
    )Total comprehensive income (loss)
    
    $
    (24,912
    )
    
    
    2,130
    
    
    
    (36,074
    )
    
    
    5,610
 99




---



##### 



NOTE 11: BUSINESS SEGMENTS
   Three Months Ended September 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)
    
    $
    3,763
    
    
    
    194
    
    
    
    1,043
    
    
    
    388
    
    
    
    (349
    )
    
    
    (48
    )
    
    
    4,991Fee and other income
    
    
    1,003
    
    
    
    192
    
    
    
    (416
    )
    
    
    968
    
    
    
    (1,014
    )
    
    
    -
    
    
    
    733Intersegment revenue
    
    
    50
    
    
    
    2
    
    
    
    (57
    )
    
    
    4
    
    
    
    1
    
    
    
    -
    
    
    
    -Total revenue (a)
    
    
    4,816
    
    
    
    388
    
    
    
    570
    
    
    
    1,360
    
    
    
    (1,362
    )
    
    
    (48
    )
    
    
    5,724Provision for credit losses
    
    
    1,340
    
    
    
    8
    
    
    
    525
    
    
    
    1
    
    
    
    4,755
    
    
    
    -
    
    
    
    6,629Noninterest expense
    
    
    2,127
    
    
    
    246
    
    
    
    1,154
    
    
    
    2,145
    
    
    
    390
    
    
    
    19,483
    
    
    
    25,545Minority interest
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    (71
    )
    
    
    (34
    )
    
    
    (105
    )Income taxes (benefits)
    
    
    482
    
    
    
    50
    
    
    
    (423
    )
    
    
    (287
    )
    
    
    (2,149
    )
    
    
    (320
    )
    
    
    (2,647
    )Tax-equivalent adjustment
    
    
    10
    
    
    
    -
    
    
    
    17
    
    
    
    -
    
    
    
    21
    
    
    
    (48
    )
    
    
    -Net income (loss)
    
    
    857
    
    
    
    84
    
    
    
    (703
    )
    
    
    (499
    )
    
    
    (4,308
    )
    
    
    (19,129
    )
    
    
    (23,698
    )Dividends on preferred stock
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    191
    
    
    
    -
    
    
    
    191Net income (loss) available to
common stockholders
    
    $
    857
    
    
    
    84
    
    
    
    (703
    )
    
    
    (499
    )
    
    
    (4,499
    )
    
    
    (19,129
    )
    
    
    (23,889
    )Lending commitments
    
    $
    128,178
    
    
    
    6,376
    
    
    
    99,489
    
    
    
    1,657
    
    
    
    483
    
    
    
    -
    
    
    
    236,183Average loans, net
    
    
    318,573
    
    
    
    22,765
    
    
    
    109,323
    
    
    
    3,223
    
    
    
    24,601
    
    
    
    -
    
    
    
    478,485Average core deposits
    
    $
    292,653
    
    
    
    14,690
    
    
    
    27,497
    
    
    
    54,734
    
    
    
    2,735
    
    
    
    -
    
    
    
    392,309
 100




---



##### 



Three Months Ended September 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)
    
    $
    3,466
    
    
    
    184
    
    
    
    838
    
    
    
    268
    
    
    
    (172
    )
    
    
    (33
    )
    
    
    4,551Fee and other income
    
    
    935
    
    
    
    184
    
    
    
    176
    
    
    
    1,444
    
    
    
    194
    
    
    
    -
    
    
    
    2,933Intersegment revenue
    
    
    59
    
    
    
    4
    
    
    
    (52
    )
    
    
    (8
    )
    
    
    (3
    )
    
    
    -
    
    
    
    -Total revenue (a)
    
    
    4,460
    
    
    
    372
    
    
    
    962
    
    
    
    1,704
    
    
    
    19
    
    
    
    (33
    )
    
    
    7,484Provision for credit losses
    
    
    207
    
    
    
    6
    
    
    
    1
    
    
    
    -
    
    
    
    194
    
    
    
    -
    
    
    
    408Noninterest expense
    
    
    1,898
    
    
    
    240
    
    
    
    626
    
    
    
    1,241
    
    
    
    484
    
    
    
    36
    
    
    
    4,525Minority interest
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    189
    
    
    
    -
    
    
    
    189Income taxes (benefits)
    
    
    849
    
    
    
    46
    
    
    
    114
    
    
    
    169
    
    
    
    (508
    )
    
    
    (14
    )
    
    
    656Tax-equivalent adjustment
    
    
    11
    
    
    
    -
    
    
    
    9
    
    
    
    -
    
    
    
    13
    
    
    
    (33
    )
    
    
    -Net income (loss) from
continuing operations
    
    
    1,495
    
    
    
    80
    
    
    
    212
    
    
    
    294
    
    
    
    (353
    )
    
    
    (22
    )
    
    
    1,706Discontinued operations,
net of income taxes
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    (88
    )
    
    
    -
    
    
    
    (88
    )Net income (loss)
    
    $
    1,495
    
    
    
    80
    
    
    
    212
    
    
    
    294
    
    
    
    (441
    )
    
    
    (22
    )
    
    
    1,618Lending commitments
    
    $
    132,779
    
    
    
    7,007
    
    
    
    119,791
    
    
    
    1,164
    
    
    
    529
    
    
    
    -
    
    
    
    261,270Average loans, net
    
    
    295,188
    
    
    
    20,996
    
    
    
    82,979
    
    
    
    2,142
    
    
    
    28,496
    
    
    
    -
    
    
    
    429,801Average core deposits
    
    $
    290,099
    
    
    
    17,180
    
    
    
    37,208
    
    
    
    31,489
    
    
    
    3,033
    
    
    
    -
    
    
    
    379,009
 Nine Months Ended September 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)
    
    $
    10,922
    
    
    
    575
    
    
    
    3,211
    
    
    
    977
    
    
    
    (1,497
    )
    
    
    (155
    )
    
    
    14,033Fee and other income
    
    
    2,983
    
    
    
    610
    
    
    
    82
    
    
    
    5,155
    
    
    
    (2,155
    )
    
    
    -
    
    
    
    6,675Intersegment revenue
    
    
    162
    
    
    
    10
    
    
    
    (159
    )
    
    
    (14
    )
    
    
    1
    
    
    
    -
    
    
    
    -Total revenue (a)
    
    
    14,067
    
    
    
    1,195
    
    
    
    3,134
    
    
    
    6,118
    
    
    
    (3,651
    )
    
    
    (155
    )
    
    
    20,708Provision for credit losses
    
    
    2,834
    
    
    
    15
    
    
    
    1,160
    
    
    
    1
    
    
    
    11,017
    
    
    
    -
    
    
    
    15,027Noninterest expense
    
    
    6,236
    
    
    
    744
    
    
    
    2,867
    
    
    
    6,328
    
    
    
    1,560
    
    
    
    26,035
    
    
    
    43,770Minority interest
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    153
    
    
    
    (121
    )
    
    
    32Income taxes (benefits)
    
    
    1,793
    
    
    
    160
    
    
    
    (384
    )
    
    
    (79
    )
    
    
    (5,857
    )
    
    
    (477
    )
    
    
    (4,844
    )Tax-equivalent adjustment
    
    
    31
    
    
    
    -
    
    
    
    57
    
    
    
    2
    
    
    
    65
    
    
    
    (155
    )
    
    
    -Net income (loss)
    
    
    3,173
    
    
    
    276
    
    
    
    (566
    )
    
    
    (134
    )
    
    
    (10,589
    )
    
    
    (25,437
    )
    
    
    (33,277
    )Dividends on preferred stock
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    427
    
    
    
    -
    
    
    
    427Net income (loss) available to
common stockholders
    
    $
    3,173
    
    
    
    276
    
    
    
    (566
    )
    
    
    (134
    )
    
    
    (11,016
    )
    
    
    (25,437
    )
    
    
    (33,704
    )Lending commitments
    
    $
    128,178
    
    
    
    6,376
    
    
    
    99,489
    
    
    
    1,657
    
    
    
    483
    
    
    
    -
    
    
    
    236,183Average loans, net
    
    
    316,217
    
    
    
    22,374
    
    
    
    105,708
    
    
    
    2,889
    
    
    
    26,548
    
    
    
    -
    
    
    
    473,736Average core deposits
    
    $
    293,361
    
    
    
    16,732
    
    
    
    30,932
    
    
    
    48,844
    
    
    
    2,627
    
    
    
    -
    
    
    
    392,496
 101




---



##### 



Nine Months Ended September 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)
    
    $
    10,240
    
    
    
    542
    
    
    
    2,328
    
    
    
    787
    
    
    
    (289
    )
    
    
    (108
    )
    
    
    13,500Fee and other income
    
    
    2,716
    
    
    
    582
    
    
    
    2,806
    
    
    
    4,457
    
    
    
    346
    
    
    
    -
    
    
    
    10,907Intersegment revenue
    
    
    161
    
    
    
    10
    
    
    
    (145
    )
    
    
    (27
    )
    
    
    1
    
    
    
    -
    
    
    
    -Total revenue (a)
    
    
    13,117
    
    
    
    1,134
    
    
    
    4,989
    
    
    
    5,217
    
    
    
    58
    
    
    
    (108
    )
    
    
    24,407Provision for credit losses
    
    
    508
    
    
    
    9
    
    
    
    5
    
    
    
    -
    
    
    
    242
    
    
    
    -
    
    
    
    764Noninterest expense
    
    
    5,685
    
    
    
    730
    
    
    
    2,556
    
    
    
    3,772
    
    
    
    1,215
    
    
    
    78
    
    
    
    14,036Minority interest
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    464
    
    
    
    -
    
    
    
    464Income taxes (benefits)
    
    
    2,495
    
    
    
    144
    
    
    
    857
    
    
    
    527
    
    
    
    (1,199
    )
    
    
    (30
    )
    
    
    2,794Tax-equivalent adjustment
    
    
    32
    
    
    
    -
    
    
    
    30
    
    
    
    -
    
    
    
    46
    
    
    
    (108
    )
    
    
    -Net income (loss)
    
    $
    4,397
    
    
    
    251
    
    
    
    1,541
    
    
    
    918
    
    
    
    (710
    )
    
    
    (48
    )
    
    
    6,349Lending commitments
    
    $
    132,779
    
    
    
    7,007
    
    
    
    119,791
    
    
    
    1,164
    
    
    
    529
    
    
    
    -
    
    
    
    261,270Average loans, net
    
    
    292,003
    
    
    
    20,517
    
    
    
    77,736
    
    
    
    1,789
    
    
    
    30,115
    
    
    
    -
    
    
    
    422,160Average core deposits
    
    $
    288,209
    
    
    
    17,300
    
    
    
    36,077
    
    
    
    31,463
    
    
    
    2,578
    
    
    
    -
    
    
    
    375,627
   102




---



##### 



NOTE 12: BASIC AND DILUTED EARNINGS PER COMMON SHARE
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(In millions, except per share data)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Net income (loss)
    
    $
    (23,698
    )
    
    
    1,618
    
    
    
    (33,277
    )
    
    
    6,261Dividends on preferred stock
    
    
    191
    
    
    
    -
    
    
    
    427
    
    
    
    -Net income (loss) available to common stockholders
    
    $
    (23,889
    )
    
    
    1,618
    
    
    
    (33,704
    )
    
    
    6,261Basic earnings (loss) per common share
    
    $
    (11.18
    )
    
    
    0.86
    
    
    
    (16.28
    )
    
    
    3.31Diluted earnings (loss) per common share (a)
    
    $
    (11.18
    )
    
    
    0.85
    
    
    
    (16.28
    )
    
    
    3.26Average common shares  basic
    
    
    2,137
    
    
    
    1,885
    
    
    
    2,070
    
    
    
    1,890Common share equivalents and unvested restricted stock
    
    
    6
    
    
    
    25
    
    
    
    10
    
    
    
    28Average common shares  diluted
    
    
    2,143
    
    
    
    1,910
    
    
    
    2,080
    
    
    
    1,918
  103




---



##### 



NOTE 13: MERGER-RELATED AND RESTRUCTURING EXPENSES
 Nine Months EndedSeptember 30,(In millions)
    
    2008
    
    
    2007RESTRUCTURING EXPENSES  PROJECT RIGHT SIZE (a)Personnel costs
    
    $
    513
    
    
    
    -Occupancy and equipment
    
    
    2
    
    
    
    -Total restructuring expenses  Project Right Size
    
    
    515
    
    
    
    -MERGER-RELATED AND RESTRUCTURING EXPENSES  A.G. EDWARDSPersonnel costs
    
    
    321
    
    
    
    -Occupancy and equipment
    
    
    10
    
    
    
    -Advertising
    
    
    24
    
    
    
    -System conversion costs
    
    
    57
    
    
    
    -Other
    
    
    165
    
    
    
    3Total merger-related and restructuring expenses  A.G. Edwards
    
    
    577
    
    
    
    3MERGER-RELATED AND RESTRUCTURING EXPENSES  GOLDEN WESTPersonnel costs
    
    
    4
    
    
    
    (2
    )Occupancy and equipment
    
    
    27
    
    
    
    2Advertising
    
    
    8
    
    
    
    1System conversion costs
    
    
    25
    
    
    
    20Other
    
    
    31
    
    
    
    33Total merger-related and restructuring expenses  Golden West
    
    
    95
    
    
    
    54OTHER MERGER-RELATED AND RESTRUCTURING EXPENSESMerger-related and restructuring expenses from other mergers, net
    
    
    2
    
    
    
    21Total merger-related and restructuring expenses
    
    $
    1,189
    
    
    
    78
  104




---



##### 



NOTE 14: 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
    
    
    38
    
    
    
    -
    
    
    
    38
    
    
    
    (13
    )
    
    
    25Additions for tax positions related to prior years
    
    
    1,386
    
    
    
    523
    
    
    
    1,909
    
    
    
    (194
    )
    
    
    1,715Reduction for tax positions related to prior years
    
    
    (249
    )
    
    
    (10
    )
    
    
    (259
    )
    
    
    13
    
    
    
    (246
    )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
    
    
    (7
    )
    
    
    (1
    )
    
    
    (8
    )
    
    
    1
    
    
    
    (7
    )Balance at September 30, 2008
    
    
    3,385
    
    
    
    933
    
    
    
    4,318
    
    
    
    (451
    )
    
    
    3,867Less: tax attributable to timing items included above
    
    
    (2,582
    )
    
    
    -
    
    
    
    (2,582
    )
    
    
    -
    
    
    
    (2,582
    )Less: UTBs included above that relate to acquired
entities that would impact goodwill if recognized
by December 31, 2008
    
    
    (77
    )
    
    
    (9
    )
    
    
    (86
    )
    
    
    25
    
    
    
    (61
    )Total UTBs that, if recognized, would impact the
effective income tax rate as of September 30, 2008
    
    $
    726
    
    
    
    924
    
    
    
    1,650
    
    
    
    (426
    )
    
    
    1,224
       105




---



##### 



Nine Months Ended September 30,2008
    
    
    2007Percent of
    
    
    
    
    
    
    Percent ofPre-tax
    
    
    
    
    
    
    Pre-tax(In millions)
    
    Amount
    
    
    Income
    
    
    Amount
    
    
    IncomeIncome
(loss) from continuing operations before
income taxes (benefits)
    
    $
    (38,121
    )
    
    
    
    
    
    $
    9,143Tax at federal income tax rate
    
    $
    (13,342
    )
    
    
    35.0
    %
    
    $
    3,200
    
    
    
    35.0
    %Reasons for difference in federal income
tax rate and effective income tax rateTax-exempt interest, net of cost to carry
    
    
    (81
    )
    
    
    0.2
    
    
    
    (61
    )
    
    
    (0.7
    )State income taxes, net of federal tax benefit
    
    
    (309
    )
    
    
    0.8
    
    
    
    85
    
    
    
    0.9Goodwill impairment
    
    
    8,597
    
    
    
    (22.6
    )
    
    
    -
    
    
    
    -Life insurance, increase in cash
surrender value
    
    
    (6
    )
    
    
    -
    
    
    
    (154
    )
    
    
    (1.6
    )Tax credits, net of related basis adjustments
    
    
    (203
    )
    
    
    0.5
    
    
    
    (112
    )
    
    
    (1.2
    )Change in the beginning-of-the-year
deferred tax assets valuation allowance
    
    
    896
    
    
    
    (2.3
    )
    
    
    -
    
    
    
    -Foreign income tax rate differential
    
    
    (144
    )
    
    
    0.4
    
    
    
    (175
    )
    
    
    (1.9
    )Other items, net
    
    
    (252
    )
    
    
    0.7
    
    
    
    11
    
    
    
    0.1Total income
taxes (benefits)
    
    $
    (4,844
    )
    
    
    12.7
    %
    
    $
    2,794
    
    
    
    30.6
    %
 106




---



##### 



NOTE 15: DERIVATIVES
         107




---



##### 



September 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
    
    $
    2,983
    
    
    
    97
    
    
    
    -
    
    
    
    59
    
    
    
    2.38Pay 3 month LIBOR swaps
    
    1 month LIBOR risk
    
    
    17,910
    
    
    
    346
    
    
    
    (86
    )
    
    
    157
    
    
    
    3.82Purchased interest rate floors-3 month LIBOR
    
    First forecasted interest receipts on 1 month LIBOR commercial loans
    
    
    9,000
    
    
    
    -
    
    
    
    (34
    )
    
    
    (21
    )
    
    
    1.85Call options on Eurodollar futures
    
    First forecasted interest receipts on 1 month LIBOR commercial loans
    
    
    12,000
    
    
    
    -
    
    
    
    (5
    )
    
    
    -
    
    
    
    0.25Fair value hedgesInterest rate swaps-pay fixed/ receive LIBOR
    
    Individual fixed rate debt securities
    
    
    691
    
    
    
    3
    
    
    
    (19
    )
    
    
    -
    
    
    
    10.67Forward sale commitments
    
    Individual fixed rate debt securities
    
    
    2,800
    
    
    
    38
    
    
    
    -
    
    
    
    -
    
    
    
    0.10Foreign currency forwards
    
    Currency risk associated with foreign currency denominated securities classified as available for sale
    
    
    8,919
    
    
    
    4
    
    
    
    (8
    )
    
    
    -
    
    
    
    0.02Total asset hedges
    
    
    
    $
    54,303
    
    
    
    488
    
    
    
    (152
    )
    
    
    195
    
    
    
    1.90LIABILITY 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
    
    
    2,056
    
    
    
    2
    
    
    
    (199
    )
    
    
    (122
    )
    
    
    9.40Receive 3 month LIBOR swaps
    
    1 month LIBOR risk
    
    
    6,488
    
    
    
    -
    
    
    
    (183
    )
    
    
    (113
    )
    
    
    2.47Receive 3 month LIBOR swaps
    
    3 month LIBOR risk
    
    
    8,225
    
    
    
    2
    
    
    
    (21
    )
    
    
    (10
    )
    
    
    2.20Receive 6 month LIBOR swaps
    
    6 month LIBOR risk
    
    
    7
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    4.72Eurodollar futures
    
    1 day LIBOR risk associated with the proceeds from first forecasted issuance of repurchase agreements that are part of a rollover strategy
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    0.25Eurodollar futures
    
    First forecasted interest payments on 3 month LIBOR long-term debt
    
    
    82,375
    
    
    
    73
    
    
    
    (30
    )
    
    
    19
    
    
    
    0.25Fair value hedgesInterest rate swaps-receive fixed/ pay floating (e)
    
    Individual fixed rate long-term debt issuances
    
    
    31,341
    
    
    
    953
    
    
    
    (219
    )
    
    
    -
    
    
    
    10.27Foreign currency forwards
    
    Currency risk associated with foreign currency denominated repurchase agreements and long-term debt
    
    
    21,147
    
    
    
    16
    
    
    
    (110
    )
    
    
    -
    
    
    
    0.13Currency swaps (e)
    
    Currency risk associated with individual foreign currency denominated long-term debt
    
    
    870
    
    
    
    -
    
    
    
    (33
    )
    
    
    -
    
    
    
    4.56Total liability hedges
    
    
    
    
    152,509
    
    
    
    1,046
    
    
    
    (795
    )
    
    
    (226
    )
    
    
    2.64Total
    
    
    
    $
    206,812
    
    
    
    1,534
    
    
    
    (947
    )
    
    
    (31
    )
    
    
    -
 108




---



##### 



109




---



##### 



September 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
    
    $
    672
    
    
    
    311
    
    
    
    19,170
    
    
    
    740
    
    
    
    -
    
    
    
    20,893Notional amount  other
    
    $
    12,000
    
    
    
    5,000
    
    
    
    4,000
    
    
    
    -
    
    
    
    -
    
    
    
    21,000Weighted average receive rate (a)
    
    
    2.95
    %
    
    
    4.72
    
    
    
    4.63
    
    
    
    4.02
    
    
    
    -
    
    
    
    4.56Weighted average pay rate (a)
    
    
    2.75
    %
    
    
    2.71
    
    
    
    2.85
    
    
    
    2.60
    
    
    
    -
    
    
    
    2.84Unrealized gain (loss)
    
    $
    (5
    )
    
    
    (9
    )
    
    
    342
    
    
    
    (10
    )
    
    
    -
    
    
    
    318FAIR VALUE ASSET HEDGESNotional amount  swapspay fixed
    
    $
    -
    
    
    
    -
    
    
    
    305
    
    
    
    70
    
    
    
    316
    
    
    
    691Notional amount  other
    
    $
    11,719
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    11,719Weighted average receive rate (a)
    
    
    -
    %
    
    
    -
    
    
    
    1.66
    
    
    
    1.66
    
    
    
    1.67
    
    
    
    1.66Weighted average pay rate (a)
    
    
    -
    %
    
    
    -
    
    
    
    3.26
    
    
    
    3.30
    
    
    
    3.76
    
    
    
    3.49Unrealized gain (loss)
    
    $
    33
    
    
    
    1
    
    
    
    (7
    )
    
    
    (2
    )
    
    
    (7
    )
    
    
    18CASH FLOW LIABILITY HEDGESNotional amount  swapspay fixed
    
    $
    5,061
    
    
    
    8,364
    
    
    
    532
    
    
    
    1,584
    
    
    
    1,235
    
    
    
    16,776Notional amount  other
    
    $
    82,375
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    82,375Weighted average receive rate (a)
    
    
    2.80
    %
    
    
    2.82
    
    
    
    2.88
    
    
    
    3.26
    
    
    
    3.12
    
    
    
    2.94Weighted average pay rate (a)
    
    
    5.15
    %
    
    
    7.40
    
    
    
    5.61
    
    
    
    5.69
    
    
    
    5.98
    
    
    
    5.48Unrealized gain (loss)
    
    $
    (33
    )
    
    
    (35
    )
    
    
    (28
    )
    
    
    (121
    )
    
    
    (139
    )
    
    
    (356
    )FAIR VALUE LIABILITY HEDGESNotional amount  swapsreceive fixed
    
    $
    1,950
    
    
    
    2,900
    
    
    
    5,330
    
    
    
    12,387
    
    
    
    8,774
    
    
    
    31,341Notional amount  other
    
    $
    21,147
    
    
    
    -
    
    
    
    712
    
    
    
    158
    
    
    
    -
    
    
    
    22,017Weighted average receive rate (a)
    
    
    5.00
    %
    
    
    5.56
    
    
    
    4.94
    
    
    
    4.71
    
    
    
    5.20
    
    
    
    4.98Weighted average pay rate (a)
    
    
    2.82
    %
    
    
    2.77
    
    
    
    3.63
    
    
    
    3.11
    
    
    
    3.91
    
    
    
    3.37Unrealized gain (loss)
    
    $
    (82
    )
    
    
    75
    
    
    
    87
    
    
    
    305
    
    
    
    222
    
    
    
    607
  110




---



##### 



September 30, 2008Asset
    
    
    Liability(In millions)
    
    Hedges
    
    
    Hedges
    
    
    TotalBalance, December 31, 2007
    
    $
    50,047
    
    
    
    152,993
    
    
    
    203,040Additions (a)
    
    
    109,990
    
    
    
    280,943
    
    
    
    390,933Maturities and amortizations (a)
    
    
    (50,250
    )
    
    
    (142,689
    )
    
    
    (192,939
    )Terminations
    
    
    (55,232
    )
    
    
    (133,636
    )
    
    
    (188,868
    )Redesignations and transfers to trading account assets
    
    
    (252
    )
    
    
    (5,102
    )
    
    
    (5,354
    )Balance, September 30, 2008
    
    $
    54,303
    
    
    
    152,509
    
    
    
    206,812
  NOTE 16: GUARANTEES
 September 30, 2008
    
    
    December 31, 2007Maximum
    
    
    
    
    
    
    MaximumCarrying
    
    
    Risk of
    
    
    Carrying
    
    
    Risk of(In millions)
    
    Amount
    
    
    Loss
    
    
    Amount
    
    
    LossSecurities and other lending indemnifications
    
    $
    -
    
    
    
    37,652
    
    
    
    -
    
    
    
    59,238Standby letters of credit
    
    
    126
    
    
    
    32,604
    
    
    
    124
    
    
    
    29,295Liquidity agreements
    
    
    643
    
    
    
    25,821
    
    
    
    14
    
    
    
    36,926Loans sold with recourse
    
    
    44
    
    
    
    6,244
    
    
    
    44
    
    
    
    6,710Residual value guarantees
    
    
    -
    
    
    
    1,372
    
    
    
    -
    
    
    
    1,220Written put options
    
    
    2,124
    
    
    
    12,900
    
    
    
    2,001
    
    
    
    15,273Contingent consideration
    
    
    -
    
    
    
    11
    
    
    
    -
    
    
    
    101Total guarantees
    
    $
    2,937
    
    
    
    116,604
    
    
    
    2,183
    
    
    
    148,763
 111




---



##### 



NOTE 17: LITIGATION
  Le Natures, Inc.
 Interchange Litigation.
 Payment Processing Center.
 Municipal Derivatives Bid Practices Investigation.
 Auction Rate Securities. Baytide Petroleum
v. Wachovia Securities, LLC, et al. Mayfield v. Wachovia Securities, LLC, et al. Mayor and City of Baltimore
v. Wachovia Securities, LLC, et al.,
 Golden West and Related Litigation. Arace v. Wachovia Corporation, et al.,
 Evergreen Ultra Short Opportunities Fund (the Fund) Investigation. Keefe v. EIMCO, et al.; Krantzberg v. Evergreen Fixed Income Trust, et
al.; Mierzwinski v. EIMCO, et al.,
 112




---



##### 



Merger Related Litigation. Citigroup, Inc. v.
Wachovia Corp., et al.,
 Wachovia Corp. v. Citigroup, Inc. Wells Fargo v. Citigroup, Inc.
 Irving Ehrenhaus v. John D.
Baker, et al.,
 Data Treasury Litigation.
 Outlook.
 113




---



##### 



NOTE 18: FAIR VALUE MEASUREMENTS AND FAIR VALUE OPTION
 FAIR VALUE MEASUREMENTS
     Level 1
 Level 2
 Level 3
  DETERMINATION
OF FAIR VALUE
    114




---



##### 



Derivatives
    Securities
and Trading Activities
    Principal
Investments
  115




---



##### 



Mortgage
Servicing Rights
  Loans
and Loans Held For Sale
  ITEMS
MEASURED AT FAIR VALUE ON A RECURRING BASIS
  September 30, 2008(In millions)
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    Netting (b)
    
    
    TotalASSETSCash trading instruments
    
    $
    1,367
    
    
    
    28,534
    
    
    
    5,080
    
    
    
    -
    
    
    
    34,981Derivatives
    
    
    805
    
    
    
    76,236
    
    
    
    8,487
    
    
    
    (64,509
    )
    
    
    21,019Total trading account assets
    
    
    2,172
    
    
    
    104,770
    
    
    
    13,567
    
    
    
    (64,509
    )
    
    
    56,000Securities
    
    
    6,684
    
    
    
    92,754
    
    
    
    8,255
    
    
    
    -
    
    
    
    107,693Loans
    
    
    -
    
    
    
    -
    
    
    
    22
    
    
    
    -
    
    
    
    22Loans held for sale
    
    
    -
    
    
    
    1,448
    
    
    
    68
    
    
    
    -
    
    
    
    1,516Other assets (a)
    
    
    277
    
    
    
    1,380
    
    
    
    3,284
    
    
    
    (3,001
    )
    
    
    1,940Total assets at fair value
    
    $
    9,133
    
    
    
    200,352
    
    
    
    25,196
    
    
    
    (67,510
    )
    
    
    167,171LIABILITIESCash trading instruments
    
    
    2,067
    
    
    
    2,888
    
    
    
    11
    
    
    
    -
    
    
    
    4,966Derivatives
    
    
    633
    
    
    
    72,386
    
    
    
    9,002
    
    
    
    (68,599
    )
    
    
    13,422Total trading account liabilities
    
    
    2,700
    
    
    
    75,274
    
    
    
    9,013
    
    
    
    (68,599
    )
    
    
    18,388Other liabilities (a)
    
    
    30
    
    
    
    1,186
    
    
    
    32
    
    
    
    (3,001
    )
    
    
    (1,753
    )Total liabilities at fair value
    
    $
    2,730
    
    
    
    76,460
    
    
    
    9,045
    
    
    
    (71,600
    )
    
    
    16,635
   116




---



##### 



LEVEL
3 ITEMS MEASURED AT FAIR VALUE ON A RECURRING BASIS
     Three Months Ended September 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
    
    $
    6,209
    
    
    
    (474
    )
    
    
    -
    
    
    
    (663
    )
    
    
    8
    
    
    
    5,080
    
    
    
    (500
    )Securities
    
    
    8,177
    
    
    
    (1,258
    )
    
    
    188
    
    
    
    (446
    )
    
    
    1,594
    
    
    
    8,255
    
    
    
    (1,137
    )Loans
    
    
    18
    
    
    
    (4
    )
    
    
    -
    
    
    
    (1
    )
    
    
    9
    
    
    
    22
    
    
    
    (4
    )Loans held for sale
    
    
    43
    
    
    
    -
    
    
    
    -
    
    
    
    (22
    )
    
    
    47
    
    
    
    68
    
    
    
    (14
    )Other assets
    
    $
    3,491
    
    
    
    (163
    )
    
    
    -
    
    
    
    (44
    )
    
    
    -
    
    
    
    3,284
    
    
    
    (117
    )LIABILITIESCash trading instruments
    
    $
    43
    
    
    
    -
    
    
    
    -
    
    
    
    (32
    )
    
    
    -
    
    
    
    11
    
    
    
    -Derivatives, net (a)
    
    
    1,220
    
    
    
    60
    
    
    
    -
    
    
    
    (755
    )
    
    
    (10
    )
    
    
    515
    
    
    
    3Other liabilities
    
    $
    76
    
    
    
    13
    
    
    
    -
    
    
    
    (57
    )
    
    
    -
    
    
    
    32
    
    
    
    8
  117




---



##### 



Nine Months Ended September 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
    
    
    
    (1,048
    )
    
    
    -
    
    
    
    (716
    )
    
    
    350
    
    
    
    5,080
    
    
    
    (863
    )Securities
    
    
    9,575
    
    
    
    (2,301
    )
    
    
    (246
    )
    
    
    1,868
    
    
    
    (641
    )
    
    
    8,255
    
    
    
    (1,523
    )Loans
    
    
    -
    
    
    
    (7
    )
    
    
    -
    
    
    
    (2
    )
    
    
    31
    
    
    
    22
    
    
    
    (7
    )Loans held for sale
    
    
    106
    
    
    
    -
    
    
    
    -
    
    
    
    (85
    )
    
    
    47
    
    
    
    68
    
    
    
    (15
    )Other assets
    
    $
    2,737
    
    
    
    560
    
    
    
    -
    
    
    
    (13
    )
    
    
    -
    
    
    
    3,284
    
    
    
    464LIABILITIESCash trading instruments
    
    $
    29
    
    
    
    4
    
    
    
    -
    
    
    
    (65
    )
    
    
    43
    
    
    
    11
    
    
    
    -Derivatives, net (a)
    
    
    605
    
    
    
    125
    
    
    
    -
    
    
    
    (188
    )
    
    
    (27
    )
    
    
    515
    
    
    
    246Other liabilities
    
    $
    32
    
    
    
    57
    
    
    
    -
    
    
    
    (57
    )
    
    
    -
    
    
    
    32
    
    
    
    (31
    )
   Three Months Ended September 30, 2008TradingNet
    
    
    Account
    
    
    
    
    
    
    SecuritiesInterest
    
    
    Profits
    
    
    Principal
    
    
    Gains
    
    
    Other(In millions)
    
    Income
    
    
    (Losses)
    
    
    Investing
    
    
    (Losses)
    
    
    IncomeTotal gains (losses)
    
    $
    7
    
    
    
    (534
    )
    
    
    (307
    )
    
    
    (1,258
    )
    
    
    120Change in unrealized gains (losses) relating toassets still held at September 30, 2008
    
    $
    -
    
    
    
    (508
    )
    
    
    (355
    )
    
    
    (1,137
    )
    
    
    239
 Nine Months Ended September 30, 2008TradingNet
    
    
    Account
    
    
    
    
    
    
    SecuritiesInterest
    
    
    Profits
    
    
    Principal
    
    
    Gains
    
    
    Other(In millions)
    
    Income
    
    
    (Losses)
    
    
    Investing
    
    
    (Losses)
    
    
    IncomeTotal gains (losses)
    
    $
    14
    
    
    
    (1,207
    )
    
    
    255
    
    
    
    (2,300
    )
    
    
    256Change in unrealized gains (losses) relating toassets still held at September 30, 2008
    
    $
    -
    
    
    
    (657
    )
    
    
    67
    
    
    
    (1,522
    )
    
    
    383
 ITEMS MEASURED AT FAIR VALUE ON A NONRECURRING BASIS
   118




---



##### 



Total gains (losses)September 30, 2008Fair Value Measurements
    
    
    Three
    
    
    NineMonths
    
    
    Months(In millions)
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    Total
    
    
    Ended
    
    
    EndedASSETSLoans
    
    $
    -
    
    
    
    4,738
    
    
    
    1,819
    
    
    
    6,557
    
    
    
    (1,231
    )
    
    
    (2,335
    )Loans held for sale
    
    
    -
    
    
    
    1,114
    
    
    
    74
    
    
    
    1,188
    
    
    
    (63
    )
    
    
    (469
    )Goodwill
    
    
    -
    
    
    
    -
    
    
    
    11,864
    
    
    
    11,864
    
    
    
    (18,786
    )
    
    
    (24,846
    )Other assets
    
    
    -
    
    
    
    416
    
    
    
    55
    
    
    
    471
    
    
    
    (174
    )
    
    
    (240
    )LIABILITIESOther liabilities
    
    $
    -
    
    
    
    -
    
    
    
    4
    
    
    
    4
    
    
    
    (4
    )
    
    
    (4
    )
 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
    )
  119




---



##### 



Three Months Ended September 30, 2008TradingProfits
    
    
    Other(In millions)
    
    (Losses)
    
    
    Income
    
    
    TotalTrading account assets
    
    $
    (21
    )

    
    
    -
    
    
    
    (21
    )Loans
    
    
    -
    
    
    
    (4
    )
    
    
    (4
    )Loans held for sale
    
    $
    -
    
    
    
    10
    
    
    
    10
 Nine Months Ended September 30, 2008TradingProfits
    
    
    Other(In millions)
    
    (Losses)
    
    
    Income
    
    
    TotalTrading account assets
    
    $
    (36
    )

    
    
    -
    
    
    
    (36
    )Loans
    
    
    -
    
    
    
    (7
    )
    
    
    (7
    )Loans held for sale
    
    $
    -
    
    
    
    3
    
    
    
    3
     120