Thursday Media Contact:
January 18, 2001 Ginny Mackin 704-383-3715
Mary Eshet 704-383-7777
Investor Contact:
Alice Lehman 704-374-4139
FIRST UNION REPORTS OPERATING EARNINGS OF $2.9 BILLION FOR 2000
AND 69 CENTS PER SHARE FOR THE 4TH QUARTER OF 2000
----------------------------------------------------------------
2000 OVERVIEW
-------------
o Operating earnings of $2.9 billion, down 16 percent from prior year
primarily due to the strategic repositioning of the company announced on
June 26, 2000. Operating earnings per share of $2.97, down 18 percent.
Operating earnings in the fourth quarter of 2000 were 69 cents per share,
in line with the company's previous estimates.
o Operating return on stockholders' equity (ROE) of 17.2 percent.
o Net income of $92 million, down 97 percent, after $2.8 billion net
restructuring and other charges.
o Record $3.2 billion in operating fee and other income from the Capital
Management Group.
o Underlying period-end loan growth was a solid 9 percent, excluding
divestitures of branches and the credit card portfolio, securitization
activities and indirect auto business runoff. Including these factors,
loans declined 7 percent.
o Similarly solid growth, excluding divestitures, in period-end core
deposits, up 2 percent.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
Full Year Fourth Quarter
------------------------------------------------------------------------
% Change % Change
From From
2000 1999 2000 1999
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Earnings (in millions)
Net income $ 92 (97)% $599 (29)%
Operating* 2,935 (16) 681 (20)
Cash operating** 3,270 (14) 753 (20)
--------------------------------------------------------------------------------------------------------
Earnings per share
Net income $ 0.07 (98)% $0.60 (30)%
Operating* 2.97 (18) 0.69 (20)
Cash operating** 3.30 (16) 0.76 (20)
--------------------------------------------------------------------------------------------------------
Return on stockholders' equity
Net income 0.6% __ 16.2% __
Operating* 17.2 __ 15.4 __
Cash operating** 26.3 __ 21.6 __
--------------------------------------------------------------------------------------------------------
Efficiency ratio
Net income 86.2% __ 67.7% __
Operating* 64.2 __ 63.9 __
Cash operating** 61.7 __ 61.5 __
--------------------------------------------------------------------------------------------------------
* Income before net merger-related, restructuring and other charges
and the cumulative effect of a change in accounting principle.
** Cash operating earnings exclude goodwill and other intangible
amortization.
</TABLE>
-- more --
<PAGE>
FIRST UNION'S 2000 OPERATING EARNINGS/Page 2
--------------------------------------------
CHARLOTTE, N.C. - First Union (NYSE:FTU) today reported 2000 operating earnings
of $2.9 billion, or $2.97 per share, before merger-related charges and the
previously announced net restructuring and other charges amounting to $2.8
billion, or $2.85 per share, in conjunction with the company's strategic
repositioning. After the restructuring charges and net after-tax gains on the
sale of certain businesses related to the restructuring, full year 2000 earnings
were $138 million (12 cents per share) and $92 million (seven cents per share)
after recording an after-tax $46 million charge for the cumulative effect of a
change in the accounting for beneficial interests. This compares with $3.2
billion, or $3.33, in 1999, which included 20 cents per share from the sale of
businesses.
In the fourth quarter of 2000, operating earnings were $681 million, or 69 cents
per share, before $36 million in net merger-related, restructuring and other
charges. After these charges, fourth quarter 2000 earnings were $645 million (65
cents per share) and $599 million (60 cents per share) after the accounting
change. This compares with $842 million (86 cents per share) in the fourth
quarter of 1999.
Based on full year 2000 operating earnings, First Union's return on average
stockholders' equity (ROE) was 17.23 percent in 2000 compared with 21.60 percent
in 1999.
Diluted cash earnings before net merger-related, restructuring and other charges
and the accounting change were 76 cents per share in the fourth quarter of 2000
and $3.30 per share in the full year of 2000, down 20 percent from the fourth
quarter of 1999 and 16 percent from the full year of 1999. On the same basis,
the cash return on average tangible stockholders' equity was 21.55 percent in
the fourth quarter of 2000 and 26.33 percent in the full year 2000. Cash
earnings are earnings before goodwill and other intangible amortization.
"We believe that 2000 was a defining year for First Union as we restructured and
reset our company's strategic path to prepare us well for the future. It was a
year of intensive work at all levels of First Union as we sharpened our focus
and streamlined the company for greater efficiency and increased
competitiveness," said Ken Thompson, First Union president and CEO. "We now have
a growing banking operation, an asset management powerhouse and a tightly
focused capital markets business - and our strengths are going to become even
more apparent as we move beyond the restructuring and transition years of 2000
and 2001. All of these actions, including the recent decision to reduce the
dividend to build capital ratios and to provide strategic flexibility, place us
in the best possible position to face a more challenging economic and
competitive environment. We will continue to fine-tune and make appropriate
capital allocation decisions going forward as we focus our resources more
strategically on our three core growth businesses."
First Union's new chief financial officer, Bob Kelly, who joined the company's
management team on November 13, 2000, commented, "First Union's financial
results for the fourth quarter and the full year of 2000 were in line with
expectations and give us a good basis for growth. Our underlying fundamentals
are good - period-end core deposits were up 2 percent and period-end loans were
up 9 percent from the fourth quarter of 1999, excluding divestitures. While
revenues were negatively affected by divestitures and difficult financial
markets, we had record performance in Capital Management fee and other income.
We began to see positive results in the fourth quarter of 2000 from our expense
control initiatives of the past year. In addition, the strong efforts of our
risk management team to monitor and actively manage the loan portfolio help us
limit the deterioration of credit quality in our portfolio even as the entire
industry experiences rising nonperforming assets and loan losses. In short, we
are enthusiastic that with the restructuring nearing completion, we should begin
to see renewed momentum by the end of 2001."
Net Interest Income
Net interest income on a tax equivalent basis was $1.8 billion in the fourth
quarter of 2000, a decline of $214 million from the fourth quarter of 1999,
largely due to the impact of divestitures. In full year 2000, net interest
income on the same basis was $7.5 billion, flat with full year 1999. The net
interest margin was 3.46 percent in the fourth quarter of 2000 and 3.55 percent
in the full year of 2000, compared with 3.72 percent and 3.79 percent in the
same respective periods of 1999.
Fee and Other Income
On an operating basis, fee and other income in the fourth quarter of 2000 was
$1.6 billion, down 14 percent from the fourth quarter of 1999, excluding
securities transactions. In full year 2000, fee and other income was $6.8
billion, down 2 percent from full year 1999 largely due to lower principal
investing revenues. Despite the difficult financial markets, asset management
and brokerage businesses performed well. These results also reflect the impact
of the acquisition of EVEREN Capital Corporation, which was completed in the
fourth quarter of 1999. On an operating basis, fee and other income as a
percentage of total revenue, excluding securities transactions, was 48 percent
in 2000 and in 1999.
-- more --
<PAGE>
FIRST UNION'S 2000 OPERATING EARNINGS/Page 3
Noninterest Expense
On an operating basis, noninterest expense was $2.1 billion in the fourth
quarter of 2000, down 9 percent from the same quarter of 1999, reflecting solid
expense control, lower variable compensation and employee benefit expense. In
full year 2000, noninterest expense was $9.2 billion, an increase of 9 percent
from full year 1999. The full year increase primarily reflects the addition of
expenses related to EVEREN, which was included in all 12 months of 2000 and only
three months of 1999 after this purchase acquisition was closed on October 1,
1999.
Divestitures Update
In the fourth quarter of 2000, 58 branch locations were sold and 26 additional
branches are under contract for sale in the first quarter of 2001. In the third
quarter of 2000, the $35 billion residential mortgage servicing portfolio and
$5.7 billion credit card portfolio were sold. The sale of $13 billion of
securities was complete by mid-October.
Restructuring and Other Charges and Gains
The restructuring and other charges/gains in the fourth quarter amounted to a
pre-tax charge of $74 million ($36 million after-tax) or 4 cents per share. This
included charges of $431 million, which were offset by $357 million in gains on
branch sales mentioned above. Included in these charges are merger-related
charges primarily composed of $34 million in system conversion expenses related
to the EVEREN and other acquisitions, $212 million in noninterest expense,
mostly personnel expenses, $118 million in additional writedowns of the portion
of the large problem loan previously moved to assets held for sale as part of
the restructuring announced in June 2000 and $74 million in losses on sales of
the remaining $3 billion of the $13 billion of securities referenced above.
Net Charge-offs, Loan Loss Provision and Nonperforming Assets
Net charge-offs amounted to $192 million in the fourth quarter of 2000, an
increase of $50 million from the third quarter of 2000 and $23 million from the
fourth quarter of 1999. This represented 0.64 percent of average net loans, an
increase of 18 basis points from the third quarter of 2000 and 12 basis points
from the fourth quarter of 1999. In full year 2000, the charge-off ratio was
0.59 percent, in line with First Union's previous guidance. These numbers
include $93 million in charge-offs taken in the fourth quarter related to a
previously disclosed single large problem loan.
The loan loss provision was $192 million in the fourth quarter of 2000, a
decrease of $10 million from the third quarter of 2000 and an increase of $19
million from the fourth quarter a year ago. In 2000, the loan loss provision was
$1.1 billion, an increase of $387 million from 1999. The 2000 provision included
a $325 million incremental provision. At December 31, 2000, the allowance to net
loans increased to 1.39 percent from 1.32 percent at December 31, 1999.
At December 31, 2000, nonperforming assets were $1.6 billion, or 1.22 percent of
net loans, foreclosed properties and loans held for sale, an increase of $533
million from December 31, 1999. Excluding the single, large problem loan,
nonperforming assets increased $320 million. Fourth quarter 2000 nonperforming
assets included $334 million of nonperforming assets in the held for sale
category, down $15 million from the third quarter.
"Our experience in rising nonperforming assets is similar to the rest of the
industry at this point in the credit cycle, with a 24 percent increase since
September 30. The majority of this increase was related to a large commercial
credit to a single borrower. This syndicated credit is an anomaly compared with
the rest of the loan portfolio. The next largest nonperforming loan was $33
million," said Rob Nimmo, First Union's chief risk officer. "Excluding the
single large nonperforming loan, nonperforming assets - including those held for
sale - rose 8 percent from September 30, 2000. We continue to believe that 2001
will be a more challenging economic environment than the previous two years, and
for some time we have incorporated into our budgeting process our view that
nonperforming assets and loan losses will rise in 2001."
Selected Lines of Business
Capital Management encompasses brokerage and asset and wealth management
businesses. Despite turbulent markets, a diverse product set and multiple
distribution capabilities enabled Capital Management to generate $792 million in
fee and other income in the fourth quarter of 2000, an increase of 2 percent
from the fourth quarter of 1999. In full year 2000, Capital Management fee and
other income was a record $3.2 billion, up 39 percent from 1999. The increase
from 1999 reflects strong internal growth of 16 percent and also includes $564
million of revenue growth related to EVEREN. Revenue growth was propelled by
strong performances in brokerage, insurance and asset management fees.
Assets under management rose to $171 billion at December 31, 2000, up
$1.0 billion from December 31, 1999. This includes growth in mutual
fund assets under management of 6 percent in 2000 to $85 billion,
reflecting strong investment performance coupled with a diversified
portfolio. This performance compares favorably against market indices,
with the S&P 500 down 10 percent, the Dow Jones Industrial Average down
6 percent and the NASDAQ composite down 39 percent in 2000.
-- more --
<PAGE>
FIRST UNION'S 2000 OPERATING EARNINGS/Page 4
Evergreen Capital Growth Fund A was cited as a "category king" by The
Wall Street Journal in the large cap value Lipper category, ranking
among the top 10 funds in its peer group. The Evergreen Health Care
Fund also was the top performing fund in its Lipper peer group at
year-end 2000.
Evergreen Funds recognized as a service leader in the mutual fund
industry in 2000, ranking among the highest tier in highly regarded
DALBAR customer service rankings.
Nationwide network of 7,400 registered representatives at December 31,
2000, which increased by more than 400 with the closing of the
JWGenesis acquisition on January 1, 2001.
The Capital Management Group conducted two major systems conversion in
2000. Brokerage completed conversion to one common system in the fall
of 2000, while systems upgrades in the 401(k) business enabled
state-of-the-art record-keeping and Internet processing in this product
area that helped fuel a 95 percent increase in asset sales from the
fourth quarter of 1999.
Wealth management business was restructured in 2000 to better meet
client needs. Fee and other income related to Wealth and Trust Services
increased 5 percent in 2000 from 1999.
Capital Markets, which encompasses investment banking and corporate banking
activities, streamlined and exited a number of businesses in 2000 that did not
fit strategic or growth needs. With its major buildup phase essentially
complete, the Capital Markets Group developed integrated strategies aimed at
serving middle market, growth companies. The impact of the restructuring and a
$243 million decline in principal investing gains led to a 30 percent decrease
in revenues to $608 million in the fourth quarter of 2000 from the fourth
quarter of 1999. Excluding principal investing gains, Capital Markets revenues
were down 2 percent from the fourth quarter of 1999. Only modest principal
investing gains are anticipated in 2001.
The General Bank, which encompasses First Union's commercial, small business and
consumer lending and deposit activities, experienced solid growth, with deposit
unit sales up 5 percent and Big 3 loans (direct consumer, prime equity lines and
small business lines/loans) up 7 percent from the fourth quarter of 1999. Branch
divestitures in the fourth quarter of 2000 included $2.1 billion in deposits and
$482 million in loans.
Overall customer satisfaction scores as measured by Gallup improved
for the seventh consecutive quarter.
Customer retention continued to improve, remaining in the 96 to 97
percent range throughout 2000.
Focused strategies resulted in growth in both commercial and consumer
loans, net of securitizations and transfers. Sales of consumer prime
equity lines were up 20 percent from the fourth quarter of 1999.
Core deposits, adjusted for divestitures, grew significantly from
year-end 1999, reversing the negative growth trend experienced in 1999.
In First Union's e-commerce business, enrollments for Internet services grew by
approximately 100,000 a month in 2000, reaching 2.4 million enrollments at
December 31, 2000, including 59,000 online brokerage enrollments and 88,000
online wholesale enrollments.
The nation's 3rd largest and fastest growing online banking channel for
the past 2 years.
Recent Forrester survey ranked First Union first in online customer
service, second in online features and fourth overall in online
services.
Named top Internet cash management information reporting provider in
Ernst & Young, L.L.P., national survey.
-- more --
<PAGE>
FIRST UNION'S 2000 OPERATING EARNINGS/Page 5
Earnings Conference Call
First Union CEO Ken Thompson and CFO Bob Kelly will review First Union's fourth
quarter results at 10 a.m. on Thursday, January 18, in a teleconference and live
audio webcast. During the call, Kelly will review information presented in
handouts that are available through ftuinvestor.com. Participants are encouraged
to access the handouts before the teleconference begins.
Webcast Instructions: To gain access to the webcast, which will be
"listen-only," go to www.ftuinvestor.com and click on the link First Union
Fourth Quarter Earnings Audio Webcast. In order to listen to the webcast, you
will need to download Real Player Basic 8 in advance of the event. A replay of
the webcast also will be available beginning about noon on Thursday, January 18.
Teleconference Instructions: On January 18, the telephone number to participate
in the teleconference is 888-603-7029 for U.S. callers (or 712-271-3895 for
international callers). You will be asked to tell the answering coordinator your
name and the name of your firm. Mention the conference Access Code: 33345.
A continuous telephone replay will be available beginning at noon on Thursday,
January 18, and continuing through 5 p.m. on Wednesday, January 24. The replay
telephone number is 402-998-0561.
***
First Union (NYSE:FTU), with $254 billion in assets and stockholders' equity of
$15 billion at December 31, 2000, is a leading provider of financial services to
15 million retail and corporate customers throughout the East Coast and the
nation. The company operates full-service banking offices in 11 East Coast
states and Washington, D.C., and full-service brokerage offices in 46 states.
Online banking products and services can be accessed through www.firstunion.com.
This news release and earnings conference call may contain certain
forward-looking statements with respect to the goals, plans, objectives,
intentions, expectations, financial condition, results of operations, future
performance and business of First Union, including, without limitation, (i)
statements relating to certain of First Union's goals and expectations with
respect to earnings, revenue, expenses, and the growth rate in such items, as
well as other measures of economic performance, including statements relating to
estimates of credit quality trends, and (ii) statements preceded by, followed by
or that include the words "may", "could", "would", "should", "believes",
"expects", "anticipates", "estimates", "intends", "plans", "targets" or similar
expressions. These forward-looking statements involve certain risks and
uncertainties that are subject to change based on various factors (many of which
are beyond First Union's control). A discussion of various factors that could
cause First Union's actual results or conditions to differ materially from the
goals, plans, objectives, intentions, and expectations expressed in such
forward-looking statements is included in First Union's most recent annual,
quarterly and current reports filed with the Securities and Exchange Commission.
Some of the factors described in those reports, include, without limitation,
factors relating to (1) the strength of the U.S. economy in general and the
strength of the local economies in which First Union conducts operations, which
may be different than expected resulting in, among other things, a deterioration
in credit quality or a reduced demand for credit, including the resultant effect
on First Union's loan portfolio and allowance for loan losses; (2) the effects
of, and changes in, trade, monetary and fiscal policies and laws, including
interest rate policies of the Board of Governors of the Federal Reserve System;
(3) adverse conditions in the stock market, the public debt market and other
capital markets and the impact of such conditions on First Union's capital
markets and capital management activities; (4) the impact of changes in
financial services' laws and regulations (including laws concerning taxes,
banking, securities and insurance); and (5) the effect of corporate
restructuring, acquisitions and/or dispositions on First Union.
Forward-looking statements speak only as of the date they are made. First Union
does not intend to update any forward-looking statement to reflect circumstances
or events that occur after the date the forward-looking statements are made.
-- more --
<PAGE>
<TABLE>
<CAPTION>
PAGE 6
FIRST UNION CORPORATION
EARNINGS DATA
(Unaudited)
------------------------------------------------------------------------------------------------------------------------------------
Three Months Ended Years Ended
December 31, 4 Q 00 December 31, 12 M 00
-------------------------- -------------------------
vs vs
(Dollars in millions, except per share data) 2000 1999 4 Q 99 2000 1999 12 M 99
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
Income before merger-related, restructuring and
other charges and cumulative effect of a change
in accounting principle (Operating earnings) $ 681 846 (20)% $ 2,935 3,486 (16)%
After-tax merger-related, restructuring
and other charges (36) (4) - (2,797) (263) -
-------------------------------------------------------------------------------- ------------------------
Income before cumulative effect of a change
in accounting principle 645 842 (23) 138 3,223 (96)
Cumulative effect of a change in accounting
for beneficial interests, net of tax (46) - - (46) - -
-------------------------------------------------------------------------------- ------------------------
Net income $ 599 842 (29)% $ 92 3,223 (97)%
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Diluted
Income before merger-related, restructuring
and other charges and cumulative effect
of a change in accounting principle $ 0.69 0.86 (20)% $ 2.97 3.60 (18)%
Income before cumulative effect of
a change in accounting principle 0.65 0.86 (24) 0.12 3.33 (96)
Net income 0.60 0.86 (30) 0.07 3.33 (98)
Basic
Income before merger-related, restructuring
and other charges and cumulative effect
of a change in accounting principle 0.70 0.87 (20) 3.00 3.63 (17)
Income before cumulative effect of
a change in accounting principle 0.66 0.86 (23) 0.12 3.35 (96)
Net income 0.61 0.86 (29) 0.07 3.35 (98)
Cash dividends 0.48 0.47 2 1.92 1.88 2
Book value 15.66 16.91 (7) 15.66 16.91 (7)
Period-end price $ 27.81 32.94 (16) $ 27.81 32.94 (16)
Dividend payout ratio
(Based on operating earnings) 69.57 % 54.65 27 64.75 % 52.22 24
Average shares (In thousands)
Diluted 990,445 984,537 - 974,172 966,863 1
Basic 969,097 976,377 (1) 970,608 959,390 1
Actual shares (In thousands) 979,963 988,315 (1)% 979,963 988,315 (1)%
------------------------------------------------------------------------------------------------------------------------------------
PERFORMANCE HIGHLIGHTS
Before merger-related, restructuring and
other charges and cumulative effect of
a change in accounting principle
Return on average assets (a) 1.12 % 1.38 - 1.18 % 1.51 -
Return on average stockholders' equity (a) 15.36 19.78 - 17.23 21.60 -
Overhead efficiency ratio (b) 63.85 61.82 - 64.20 58.32 -
Net charge-offs as a percentage of
average loans, net (a) 0.64 0.52 - 0.59 0.53 -
Nonperforming assets to loans, net, and
foreclosed properties 1.03 0.80 - 1.03 0.80 -
Net interest margin (a) 3.46 % 3.72 - 3.55 % 3.79 -
------------------------------------------------------------------------------------------------------------------------------------
CASH EARNINGS (Excluding goodwill
and other intangible amortization)
Before merger-related, restructuring and
other charges and cumulative effect of
a change in accounting principle
Net income $ 753 937 (20)% $ 3,270 3,817 (14)%
Diluted earnings per share $ 0.76 0.95 (20) $ 3.30 3.94 (16)
Return on average tangible assets (a) 1.26 % 1.56 - 1.34 % 1.69 -
Return on average tangible stockholders'
equity (a) 21.55 32.93 - 26.33 34.67 -
Overhead efficiency ratio (b) 61.46 % 59.06 - % 61.68 % 55.62 - %
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Annualized.
(b) The overhead efficiency ratio is equal to noninterest expense dividend by
the sum of tax-equivalent net interest income and fee and other income.
<PAGE>
<TABLE>
<CAPTION>
PAGE 7
FIRST UNION CORPORATION
EARNINGS DATA (a)
(Unaudited)
------------------------------------------------------------------------------------------------------------------------------------
Three Months Ended Years Ended
December 31, 4 Q 00 December 31, 12 M 00
--------------------- -------------------------
vs vs
(Dollars in millions, except per share data) 2000 1999 4 Q 99 2000 1999 12 M 99
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EARNINGS SUMMARY
Net interest income (b) $ 1,757 1,971 (11)% $ 7,536 7,570 - %
Provision for loan losses 192 173 11 1,079 692 56
-------------------------------------------------------------------------- --------------------------
Net interest income after provision for
loan losses (b) 1,565 1,798 (13) 6,457 6,878 (6)
Securities transactions - portfolio (76) (7) - (1,134) (63) -
Fee and other income 1,829 1,844 (1) 7,189 6,996 3
Merger-related and restructuring
charges 33 6 - 2,190 404 -
Other noninterest expense 2,344 2,354 - 9,520 8,458 13
-------------------------------------------------------------------------- --------------------------
Income before income taxes and
cumulative effect of a change in
accounting principle (b) 941 1,275 (26) 802 4,949 (84)
Income taxes 271 407 (33) 565 1,608 (65)
Tax-equivalent adjustment 25 26 (4) 99 118 (16)
-------------------------------------------------------------------------- --------------------------
Income before cumulative effect
of a change in accounting
principle 645 842 (23) 138 3,223 (96)
Cumulative effect of a change in the
accounting for beneficial interests,
net of tax (46) - - (46) - -
-------------------------------------------------------------------------- --------------------------
Net income $ 599 842 (29)% $ 92 3,223 (97)%
------------------------------------------------------------------------------------------------------------------------------------
AVERAGE BALANCE SHEET DATA
Loans, net of unearned income $ 120,093 131,219 (8)% $ 126,888 129,791 (2)%
Earning assets 202,606 211,684 (4) 212,347 199,936 6
Total assets 239,375 243,540 (2) 247,492 230,319 7
Noninterest-bearing deposits 27,875 29,559 (6) 28,491 30,995 (8)
Interest-bearing deposits 110,454 107,421 3 112,275 104,117 8
Stockholders' equity $ 14,753 16,686 (12)% $ 15,541 15,932 (2)%
------------------------------------------------------------------------------------------------------------------------------------
(a) See the Consolidated Condensed Statements of Income for information related to operating earnings.
(b) Tax-equivalent.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PAGE 8
FIRST UNION CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
-----------------------------------------------------------------------------------------------------
Three Months Ended December 31, 2000
---------------------------------------------
Restructuring
Operating and Other As
(In millions) Earnings Charges/Gains Reported
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net interest income $ 1,732 - 1,732
Provision for loan losses 192 - 192
-----------------------------------------------------------------------------------------------------
Net interest income after provision for loan losses 1,540 - 1,540
-----------------------------------------------------------------------------------------------------
Fee and other income
Service charges and fees 481 - 481
Advisory, underwriting and other Capital Markets fees 187 (5) 182
Other income
Security transactions - portfolio (2) (74) (76)
Asset sales and securitization 69 1 70
Gain on sale of credit card portfolio - - -
Gain on sale of mortgage servicing portfolio - - -
Gain on sale of branches - 357 357
Other income 847 (108) 739
----------------------------------------------------------------------------------------------------
Total fee and other income 1,582 171 1,753
----------------------------------------------------------------------------------------------------
Noninterest expense
Restructuring charges - 33 33
Other noninterest expense 2,132 212 2,344
----------------------------------------------------------------------------------------------------
Total noninterest expense 2,132 245 2,377
----------------------------------------------------------------------------------------------------
Income before income taxes (benefits) and
cumulative effect of a change in accounting principle 990 (74) 916
Income taxes (benefits) 309 (38) 271
---------------------------------------------------------------------------------------------------
Income before cumulative effect of a change
in accounting principle 681 (36) 645
Cumulative effect of a change in the accounting for
beneficial interests, net of tax (46) - (46)
---------------------------------------------------------------------------------------------------
Net income $ 635 (36) 599
---------------------------------------------------------------------------------------------------
Diluted earnings per share
Income before a change in accounting principle $ 0.69 (0.04) 0.65
Net income $ 0.64 (0.04) 0.60
---------------------------------------------------------------------------------------------------
<CAPTION>
Year Ended December 31, 2000
----------------------------------------------
Restructuring
Operating and Other As
Earnings Charges/Gains Reported
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net interest income 7,437 - 7,437
Provision for loan losses 754 325 1,079
--------------------------------------------------------------------------------------------------------
Net interest income after provision for loan losses 6,683 (325) 6,358
--------------------------------------------------------------------------------------------------------
Fee and other income
Service charges and fees 1,966 (46) 1,920
Advisory, underwriting and other Capital Markets fees 724 (8) 716
Other income
Security transactions - portfolio (15) (1,119) (1,134)
Asset sales and securitization 263 (387) (124)
Gain on sale of credit card portfolio - 937 937
Gain on sale of mortgage servicing portfolio - 71 71
Gain on sale of branches - 357 357
Other income 3,877 (565) 3,312
--------------------------------------------------------------------------------------------------------
Total fee and other income 6,815 (760) 6,055
--------------------------------------------------------------------------------------------------------
Noninterest expense
Restructuring charges - 2,190 2,190
Other noninterest expense 9,213 307 9,520
--------------------------------------------------------------------------------------------------------
Total noninterest expense 9,213 2,497 11,710
--------------------------------------------------------------------------------------------------------
Income before income taxes (benefits) and
cumulative effect of a change in accounting principle 4,285 (3,582) 703
Income taxes (benefits) 1,350 (785) 565
--------------------------------------------------------------------------------------------------------
Income before cumulative effect of a change
in accounting principle 2,935 (2,797) 138
Cumulative effect of a change in the accounting for
beneficial interests, net of tax (46) - (46)
--------------------------------------------------------------------------------------------------------
Net income 2,889 (2,797) 92
--------------------------------------------------------------------------------------------------------
Diluted earnings per share
Income before a change in accounting principle 2.97 (2.85) 0.12
Net income 2.92 (2.85) 0.07
--------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
FIRST UNION CORPORATION
RESTRUCTURING AND OTHER CHARGES/GAINS
(Unaudited)
------------------------------------------------------------------------------------------------------------------------
Three
Months Year
Ended Ended
December 31, December 31,
(In millions) 2000 2000
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
RESTRUCTURING CHARGES (Includes merger-related charges)
Employee termination benefits $ 10 172
Occupancy - 108
Goodwill and other intangible impairments (noncash) - 1,754
Other asset impairments (1) 18
Contract cancellations (10) 74
Other - (14)
------------------------------------------------------------------------------------------------------------------------
Total (1) 2,112
EVEREN and other merger-related charges 34 78
------------------------------------------------------------------------------------------------------------------------
Total 33 2,190
------------------------------------------------------------------------------------------------------------------------
OTHER CHARGES/GAINS
Provision for loan losses - 325
Service charges and fees - 46
Advisory, underwriting and other Capital Markets fees 5 8
Other income (176) 706
Other noninterest expense 212 307
------------------------------------------------------------------------------------------------------------------------
Total other charges/gains 41 1,392
------------------------------------------------------------------------------------------------------------------------
Total restructuring and other charges/gains (74) (3,582)
Income taxes (benefits) (38) (785)
------------------------------------------------------------------------------------------------------------------------
After-tax restructuring and other charges/gains $ (36) (2,797)
------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PAGE 9
FIRST UNION CORPORATION
QUARTERLY FINANCIAL HIGHLIGHTS
(Unaudited)
-----------------------------------------------------------------------------------------------------------------------------------
2000 1999
------------------------------------------------------- -------------
Fourth Third Second First Fourth
(Dollars in millions, except common stock prices) Quarter Quarter Quarter Quarter Quarter
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CAPITAL MARKETS (a)
Net interest income $ 392 383 366 407 389
-----------------------------------------------------------------------------------------------------------------------------------
Fee and other income
Principal investing (33) 37 185 203 210
Risk management (b) 65 61 74 63 41
Investment banking (b) 168 87 123 120 157
Corporate banking 52 56 66 53 49
International 57 60 56 53 52
Fixed income and other (b) 35 43 14 39 41
-----------------------------------------------------------------------------------------------------------------------------------
Total 344 344 518 531 550
Eliminations (128) (32) (32) (31) (72)
-----------------------------------------------------------------------------------------------------------------------------------
Total fee and other income - Capital Markets 216 312 486 500 478
-----------------------------------------------------------------------------------------------------------------------------------
Total Capital Markets $ 608 695 852 907 867
-----------------------------------------------------------------------------------------------------------------------------------
CAPITAL MANAGEMENT
Wealth and trust services $ 186 181 177 183 188
Mutual funds 135 137 130 130 125
CAP account 43 42 41 38 34
Retail brokerage services 451 442 448 546 452
-----------------------------------------------------------------------------------------------------------------------------------
Total 815 802 796 897 799
Eliminations (23) (23) (23) (25) (26)
-----------------------------------------------------------------------------------------------------------------------------------
Total Capital Management $ 792 779 773 872 773
-----------------------------------------------------------------------------------------------------------------------------------
PERIOD-END BALANCE SHEET DATA
Securities available for sale $ 47,603 50,392 53,491 50,421 51,277
Investment securities 1,643 1,673 1,712 1,668 1,758
Loans, net of unearned income 123,760 123,419 128,359 135,803 133,177
Total assets 254,170 246,640 257,994 253,648 253,024
Noninterest-bearing deposits 30,315 28,501 30,229 29,885 31,375
Interest-bearing deposits 112,353 110,369 114,635 110,005 109,672
Long-term debt 35,809 36,258 33,140 33,043 31,975
Stockholders' equity $ 15,347 14,795 13,951 16,884 16,709
-----------------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED CAPITAL RATIOS (c)
Tier 1 capital 6.89 % 7.00 6.65 6.94 7.08
Total capital 11.00 11.32 10.57 10.67 10.87
Leverage 5.92 5.73 5.34 5.94 5.97
STOCKHOLDERS' EQUITY TO ASSETS
Quarter-end 6.04 6.00 5.41 6.66 6.60
Average 6.16 % 5.77 6.50 6.68 6.85
-----------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK PRICE
High $ 34.13 32.63 38.88 37.94 43.63
Low 24.00 25.00 25.00 28.44 32.44
Period-end $ 27.81 32.19 25.00 37.25 32.94
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) The fourth, third and second quarters of 2000 are based on operating
earnings.
(b) The aggregate amounts of trading account profits included in this table in
fourth, third, second and first quarters of 2000 and in the fourth quarter of
1999 were $63 million, $70 million, $73 million, $99 million and $72 million,
respectively. This includes risk management and proprietary trading as well as
amounts included in investment banking and fixed income and other trading.
(c) The fourth quarter of 2000 is based on estimates.
<PAGE>
<TABLE>
<CAPTION>
PAGE 10
FIRST UNION CORPORATION
CONSOLIDATED STATEMENTS OF OPERATING EARNINGS (a)
(Unaudited)
--------------------------------------------------------------------------------------------------------------------------------
2000 1999
---------------------------------------------------- -----------
Fourth Third Second First Fourth
(In millions, except per share data) Quarter Quarter Quarter Quarter Quarter
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $ 2,701 2,768 2,929 2,848 2,792
Interest and dividends on securities available for sale 910 945 993 936 895
Interest and dividends on investment securities 29 30 30 30 31
Trading account interest 199 212 218 191 182
Other interest income 425 510 322 308 243
--------------------------------------------------------------------------------------------------------------------------------
Total interest income 4,264 4,465 4,492 4,313 4,143
--------------------------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE
Interest on deposits 1,367 1,422 1,285 1,195 1,102
Interest on short-term borrowings 538 609 750 639 606
Interest on long-term debt 627 600 552 513 490
--------------------------------------------------------------------------------------------------------------------------------
Total interest expense 2,532 2,631 2,587 2,347 2,198
--------------------------------------------------------------------------------------------------------------------------------
Net interest income 1,732 1,834 1,905 1,966 1,945
Provision for loan losses 192 142 228 192 173
--------------------------------------------------------------------------------------------------------------------------------
Net interest income after provision for loan losses 1,540 1,692 1,677 1,774 1,772
--------------------------------------------------------------------------------------------------------------------------------
FEE AND OTHER INCOME
Service charges and fees 481 508 491 486 513
Commissions 383 365 375 468 398
Fiduciary and asset management fees 387 384 374 366 353
Advisory, underwriting and other Capital Markets fees 187 146 182 209 205
Principal investing (33) 37 185 203 210
Other income 177 205 139 110 158
--------------------------------------------------------------------------------------------------------------------------------
Total fee and other income 1,582 1,645 1,746 1,842 1,837
--------------------------------------------------------------------------------------------------------------------------------
NONINTEREST EXPENSE
Salaries and employee benefits 1,243 1,381 1,396 1,429 1,310
Occupancy 150 157 155 157 148
Equipment 221 213 210 214 215
Advertising 16 14 31 30 48
Communications and supplies 123 117 122 125 135
Professional and consulting fees 97 87 82 71 79
Goodwill and other intangible amortization 80 79 100 102 105
Sundry expense 202 280 270 259 314
--------------------------------------------------------------------------------------------------------------------------------
Total noninterest expense 2,132 2,328 2,366 2,387 2,354
--------------------------------------------------------------------------------------------------------------------------------
Income before income taxes 990 1,009 1,057 1,229 1,255
Income taxes 309 307 343 391 409
--------------------------------------------------------------------------------------------------------------------------------
Net operating earnings $ 681 702 714 838 846
--------------------------------------------------------------------------------------------------------------------------------
Diluted earnings per share $ 0.69 0.71 0.73 0.85 0.86
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Operating earnings exclude merger-related, restructuring and other charges
and cumulative effect of a change in accounting principle.
<PAGE>
<TABLE>
<CAPTION>
PAGE 11
FIRST UNION CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Unaudited)
-------------------------------------------------------------------------------------------------------------------------------
2000 1999
--------------------------------------------------- ----------
Fourth Third Second First Fourth
(In millions, except per share data) Quarter Quarter Quarter Quarter Quarter
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $ 2,701 2,768 2,929 2,848 2,792
Interest and dividends on securities available for sale 910 945 993 936 895
Interest and dividends on investment securities 29 30 30 30 31
Trading account interest 199 212 218 191 182
Other interest income 425 510 322 308 243
-------------------------------------------------------------------------------------------------------------------------------
Total interest income 4,264 4,465 4,492 4,313 4,143
-------------------------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE
Interest on deposits 1,367 1,422 1,285 1,195 1,102
Interest on short-term borrowings 538 609 750 639 606
Interest on long-term debt 627 600 552 513 490
-------------------------------------------------------------------------------------------------------------------------------
Total interest expense 2,532 2,631 2,587 2,347 2,198
-------------------------------------------------------------------------------------------------------------------------------
Net interest income 1,732 1,834 1,905 1,966 1,945
Provision for loan losses 192 202 493 192 173
-------------------------------------------------------------------------------------------------------------------------------
Net interest income after provision for loan losses 1,540 1,632 1,412 1,774 1,772
-------------------------------------------------------------------------------------------------------------------------------
FEE AND OTHER INCOME
Service charges and fees 481 506 447 486 513
Commissions 383 365 375 468 398
Fiduciary and asset management fees 387 384 374 366 353
Advisory, underwriting and other Capital Markets fees 182 143 182 209 205
Principal investing (33) 37 185 203 210
Other income 353 628 (1,166) 110 158
-------------------------------------------------------------------------------------------------------------------------------
Total fee and other income 1,753 2,063 397 1,842 1,837
-------------------------------------------------------------------------------------------------------------------------------
NONINTEREST EXPENSE
Salaries and employee benefits 1,407 1,427 1,396 1,429 1,310
Occupancy 150 160 155 157 148
Equipment 233 213 210 214 215
Advertising 35 18 31 30 48
Communications and supplies 130 125 123 125 135
Professional and consulting fees 104 91 82 71 79
Goodwill and other intangible amortization 80 79 100 102 105
Merger-related and restructuring charges 33 52 2,110 (5) 6
Sundry expense 205 283 296 259 314
-------------------------------------------------------------------------------------------------------------------------------
Total noninterest expense 2,377 2,448 4,503 2,382 2,360
-------------------------------------------------------------------------------------------------------------------------------
Income (loss) before income taxes (benefits) and
cumulative effect of a change in accounting principle 916 1,247 (2,694) 1,234 1,249
Income taxes (benefits) 271 395 (495) 394 407
-------------------------------------------------------------------------------------------------------------------------------
Income (loss) before cumulative effect of a change
in accounting principle 645 852 (2,199) 840 842
Cumulative effect of a change in the accounting for
beneficial interests, net of tax (46) - - - -
-------------------------------------------------------------------------------------------------------------------------------
Net income (loss) $ 599 852 (2,199) 840 842
-------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Basic
Income (loss) before change in accounting principle $ 0.66 0.87 (2.27) 0.86 0.86
Net income (loss) 0.61 0.87 (2.27) 0.86 0.86
Diluted
Income (loss) before change in accounting principle 0.65 0.86 (2.27) 0.85 0.86
Net income (loss) 0.60 0.86 (2.27) 0.85 0.86
Cash dividends $ 0.48 0.48 0.48 0.48 0.47
AVERAGE SHARES (In thousands)
Basic 969,097 971,453 969,707 972,174 976,377
Diluted 990,445 986,763 981,940 984,095 984,537
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PAGE 12
FIRST UNION CORPORATION
CONSOLIDATED STATEMENTS OF OPERATING EARNINGS (a)
(Unaudited)
-------------------------------------------------------------------------------------------------------------------------------
Years Ended
December 31,
--------------------------
(In millions, except per share data) 2000 1999
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INTEREST INCOME
Interest and fees on loans $ 11,246 10,629
Interest and dividends on securities available for sale 3,784 2,969
Interest and dividends on investment securities 119 129
Trading account interest 820 600
Other interest income 1,565 824
-------------------------------------------------------------------------------------------------------------------------------
Total interest income 17,534 15,151
-------------------------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE
Interest on deposits 5,269 4,054
Interest on short-term borrowings 2,536 2,019
Interest on long-term debt 2,292 1,626
-------------------------------------------------------------------------------------------------------------------------------
Total interest expense 10,097 7,699
-------------------------------------------------------------------------------------------------------------------------------
Net interest income 7,437 7,452
Provision for loan losses 754 692
-------------------------------------------------------------------------------------------------------------------------------
Net interest income after provision for loan losses 6,683 6,760
-------------------------------------------------------------------------------------------------------------------------------
FEE AND OTHER INCOME
Service charges and fees 1,966 1,987
Commissions 1,591 1,014
Fiduciary and asset management fees 1,511 1,238
Advisory, underwriting and other Capital Markets fees 724 702
Principal investing 392 592
Other income 631 1,400
-------------------------------------------------------------------------------------------------------------------------------
Total fee and other income 6,815 6,933
-------------------------------------------------------------------------------------------------------------------------------
NONINTEREST EXPENSE
Salaries and employee benefits 5,449 4,716
Occupancy 619 546
Equipment 858 793
Advertising 91 234
Communications and supplies 487 481
Professional and consulting fees 337 287
Goodwill and other intangible amortization 361 391
Sundry expense 1,011 1,010
-------------------------------------------------------------------------------------------------------------------------------
Total noninterest expense 9,213 8,458
-------------------------------------------------------------------------------------------------------------------------------
Income before income taxes 4,285 5,235
Income taxes 1,350 1,749
-------------------------------------------------------------------------------------------------------------------------------
Net operating earnings $ 2,935 3,486
-------------------------------------------------------------------------------------------------------------------------------
Diluted earnings per share $ 2.97 3.60
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Operating earnings exclude merger-related, restructuring and other charges
and cumulative effect of a change in accounting principle.
<PAGE>
PAGE 13
FIRST UNION CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
(Unaudited)
------------------------------------------------------------------------------------------------------------------------------------
Years Ended
December 31,
---------------------------------
(In millions, except per share data) 2000 1999
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INTEREST INCOME
Interest and fees on loans $ 11,246 10,629
Interest and dividends on securities available for sale 3,784 2,969
Interest and dividends on investment securities 119 129
Trading account interest 820 600
Other interest income 1,565 824
------------------------------------------------------------------------------------------------------------------------------------
Total interest income 17,534 15,151
------------------------------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE
Interest on deposits 5,269 4,054
Interest on short-term borrowings 2,536 2,019
Interest on long-term debt 2,292 1,626
------------------------------------------------------------------------------------------------------------------------------------
Total interest expense 10,097 7,699
------------------------------------------------------------------------------------------------------------------------------------
Net interest income 7,437 7,452
Provision for loan losses 1,079 692
------------------------------------------------------------------------------------------------------------------------------------
Net interest income after provision for loan losses 6,358 6,760
------------------------------------------------------------------------------------------------------------------------------------
FEE AND OTHER INCOME
Service charges and fees 1,920 1,987
Commissions 1,591 1,014
Fiduciary and asset management fees 1,511 1,238
Advisory, underwriting and other Capital Markets fees 716 702
Principal investing 392 592
Other income (75) 1,400
------------------------------------------------------------------------------------------------------------------------------------
Total fee and other income 6,055 6,933
------------------------------------------------------------------------------------------------------------------------------------
NONINTEREST EXPENSE
Salaries and employee benefits 5,659 4,716
Occupancy 622 546
Equipment 870 793
Advertising 114 234
Communications and supplies 503 481
Professional and consulting fees 348 287
Goodwill and other intangible amortization 361 391
Merger-related and restructuring charges 2,190 404
Sundry expense 1,043 1,010
------------------------------------------------------------------------------------------------------------------------------------
Total noninterest expense 11,710 8,862
------------------------------------------------------------------------------------------------------------------------------------
Income before income taxes and cumulative
effect of a change in accounting principle 703 4,831
Income taxes 565 1,608
------------------------------------------------------------------------------------------------------------------------------------
Income before cumulative effect of a change in accounting principle 138 3,223
Cumulative effect of a change in the accounting for beneficial interests, net of tax (46) -
------------------------------------------------------------------------------------------------------------------------------------
Net income $ 92 3,223
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Basic
Income before change in accounting principle $ 0.12 3.35
Net income 0.07 3.35
Diluted
Income before change in accounting principle 0.12 3.33
Net income 0.07 3.33
Cash dividends $ 1.92 1.88
AVERAGE SHARES (In thousands)
Basic 970,608 959,390
Diluted 974,172 966,863
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
PAGE 14
FIRST UNION CORPORATION
LOANS - ON-BALANCE SHEET AND MANAGED PORTFOLIOS
<TABLE>
<CAPTION>
(Unaudited)
------------------------------------------------------------------------------------------------------------------------------------
2000 1999
--------------------------------------------------------- -------------
Fourth Third Second First Fourth
(In millions) Quarter Quarter Quarter Quarter Quarter
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ON-BALANCE SHEET LOAN PORTFOLIO
COMMERCIAL
Commercial, financial and agricultural $ 54,207 53,325 53,870 54,082 51,683
Real estate - construction and other 3,104 2,751 2,600 2,344 2,435
Real estate - mortgage 9,218 9,286 9,239 9,275 8,768
Lease financing 15,465 13,997 13,181 12,511 12,742
Foreign 5,453 5,548 4,956 4,587 4,991
------------------------------------------------------------------------------------------------------------------------------------
Total commercial 87,447 84,907 83,846 82,799 80,619
------------------------------------------------------------------------------------------------------------------------------------
RETAIL
Real estate - mortgage 17,708 19,108 25,204 27,528 27,793
Installment loans (a) 22,972 22,634 21,797 26,897 25,795
Vehicle leasing 2,115 2,600 3,112 3,822 4,483
------------------------------------------------------------------------------------------------------------------------------------
Total retail 42,795 44,342 50,113 58,247 58,071
------------------------------------------------------------------------------------------------------------------------------------
Total loans 130,242 129,249 133,959 141,046 138,690
Unearned income 6,482 5,830 5,600 5,243 5,513
------------------------------------------------------------------------------------------------------------------------------------
Loans, net (on-balance sheet) $ 123,760 123,419 128,359 135,803 133,177
------------------------------------------------------------------------------------------------------------------------------------
MANAGED PORTFOLIO (b)
------------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL
On-balance sheet loan portfolio $ 87,447 84,907 83,846 82,799 80,619
Securitized loans 1,281 1,117 1,139 1,173 1,223
Loans held for sale included in other assets 953 1,994 2,378 2,195 2,465
------------------------------------------------------------------------------------------------------------------------------------
Total commercial 89,681 88,018 87,363 86,167 84,307
------------------------------------------------------------------------------------------------------------------------------------
RETAIL
Real estate - mortgage
On-balance sheet loan portfolio 17,708 19,108 25,204 27,528 27,793
Securitized loans included in
securities available for sale 3,455 3,711 408 492 -
Loans held for sale included in other assets 1,111 802 782 1,341 1,503
------------------------------------------------------------------------------------------------------------------------------------
Total real estate - mortgage 22,274 23,621 26,394 29,361 29,296
------------------------------------------------------------------------------------------------------------------------------------
Installment loans (a)
On-balance sheet loan portfolio 22,972 22,634 21,797 26,897 25,795
Securitized loans 11,862 11,883 16,342 17,259 18,146
Securitized loans included in
securities available for sale 9,292 9,735 9,200 8,584 8,112
Loans held for sale included in other assets 6,082 6,295 7,476 1,339 898
------------------------------------------------------------------------------------------------------------------------------------
Total installment loans 50,208 50,547 54,815 54,079 52,951
------------------------------------------------------------------------------------------------------------------------------------
Vehicle leasing - on-balance sheet loan portfolio 2,115 2,600 3,112 3,822 4,483
------------------------------------------------------------------------------------------------------------------------------------
Total retail 74,597 76,768 84,321 87,262 86,730
------------------------------------------------------------------------------------------------------------------------------------
Total managed portfolio $ 164,278 164,786 171,684 173,429 171,037
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Installment loans include credit card, instant cash reserve, signature and
First Choice.
(b) The managed portfolio includes the on-balance sheet loan portfolio, loans
held for sale that are classified in other assets, loans securitized for which
the securities are classified in securities available for sale and the
off-balance sheet portfolio of securitized loans.
<PAGE>
PAGE 15
FIRST UNION CORPORATION
LOANS HELD FOR SALE
<TABLE>
<CAPTION>
(Unaudited)
---------------------------------------------------------------------------------------------------------------------------------
2000
------------------------------------------------------
Fourth Third Second First
(In millions) Quarter Quarter Quarter Quarter
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
2000 STRATEGIC REPOSITIONING
Balance, beginning of period $ 4,983 6,326 - -
Loans transferred to assets held for sale - 719 7,182 -
Allowance for loan losses related to loans transferred
to assets held for sale - (46) (319) -
Lower of cost or market valuation allowance related
to loans transferred to assets held for sale (106) (120) (537) -
Loans sold (289) (1,756) - -
Other, net (a) (325) (140) - -
---------------------------------------------------------------------------------------------------------------------------------
Balance, end of period 4,263 4,983 6,326 -
---------------------------------------------------------------------------------------------------------------------------------
OTHER (b)
Balance, beginning of period 4,108 4,310 4,875 4,866
Originations 2,701 2,505 1,568 1,781
Loans transferred from assets held for sale, net (556) (24) (515) (298)
Loans sold (2,204) (2,587) (1,408) (1,397)
Other, net (a) (166) (96) (210) (77)
---------------------------------------------------------------------------------------------------------------------------------
Balance, end of period 3,883 4,108 4,310 4,875
---------------------------------------------------------------------------------------------------------------------------------
Total loans held for sale, end of period $ 8,146 9,091 10,636 4,875
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Other, net represents primarily loan payments.
(b) Other includes primarily student, mortgage warehouse, home equity and
syndication loans.
<PAGE>
PAGE 16
FIRST UNION CORPORATION
ALLOWANCE FOR LOAN LOSSES AND NONPERFORMING ASSETS
<TABLE>
<CAPTION>
(Unaudited)
------------------------------------------------------------------------------------------------------------------------------------
2000 1999
---------------------------------------------------- ------------
Fourth Third Second First Fourth
(In millions) Quarter Quarter Quarter Quarter Quarter
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ALLOWANCE FOR LOAN LOSSES
Balance, beginning of period $ 1,720 1,706 1,760 1,757 1,759
Provision for loan losses 192 202 493 192 173
Allowance relating to loans acquired, transferred to
other assets or sold 2 (46) (319) - (6)
Loan losses, net (192) (142) (228) (189) (169)
-----------------------------------------------------------------------------------------------------------------------------------
Balance, end of period $ 1,722 1,720 1,706 1,760 1,757
-----------------------------------------------------------------------------------------------------------------------------------
as % of loans, net 1.39 % 1.39 1.33 1.30 1.32
-----------------------------------------------------------------------------------------------------------------------------------
as % of nonaccrual and restructured loans (a) 146 % 202 215 150 181
-----------------------------------------------------------------------------------------------------------------------------------
as % of nonperforming assets (a) 135 % 181 193 139 165
-----------------------------------------------------------------------------------------------------------------------------------
LOAN LOSSES
Commercial, financial and agricultural $ 159 108 157 107 93
Real estate - commercial construction and mortgage 7 3 1 2 9
Real estate - residential mortgage 3 1 5 4 5
Installment loans and vehicle leasing (b) 52 53 101 104 101
-----------------------------------------------------------------------------------------------------------------------------------
Total 221 165 264 217 208
-----------------------------------------------------------------------------------------------------------------------------------
LOAN RECOVERIES
Commercial, financial and agricultural 12 10 21 10 21
Real estate - commercial construction and mortgage 1 1 - 1 3
Real estate - residential mortgage - 1 1 - 1
Installment loans and vehicle leasing (b) 16 11 14 17 14
-----------------------------------------------------------------------------------------------------------------------------------
Total 29 23 36 28 39
-----------------------------------------------------------------------------------------------------------------------------------
Loan losses, net $ 192 142 228 189 169
-----------------------------------------------------------------------------------------------------------------------------------
Commercial loans net charge-offs as %
of average commercial loans, net (c) 0.80 % 0.53 0.73 0.53 0.42
Retail loans net charge-offs as %
of average retail loans, net (c) 0.36 0.35 0.63 0.64 0.64
Total net charge-offs as % of average loans, net (c) 0.64 % 0.46 0.69 0.57 0.52
-----------------------------------------------------------------------------------------------------------------------------------
NONPERFORMING ASSETS
Nonaccrual loans
Commercial, financial and agricultural $ 884 596 562 729 551
Real estate - commercial construction and mortgage 55 58 59 62 55
Real estate - residential mortgage 63 52 28 148 150
Installment loans and vehicle leasing (b) 174 148 142 236 212
-----------------------------------------------------------------------------------------------------------------------------------
Total nonaccrual loans 1,176 854 791 1,175 968
Foreclosed properties (d) 103 97 93 95 98
-----------------------------------------------------------------------------------------------------------------------------------
Total nonperforming assets $ 1,279 951 884 1,270 1,066
-----------------------------------------------------------------------------------------------------------------------------------
Nonperforming loans included in assets
held for sale (e) $ 334 349 331 30 14
Nonperforming assets included in loans and in
assets held for sale $ 1,613 1,300 1,215 1,300 1,080
-----------------------------------------------------------------------------------------------------------------------------------
as % of loans, net, and foreclosed properties (a) 1.03 % 0.77 0.69 0.93 0.80
-----------------------------------------------------------------------------------------------------------------------------------
as % of loans, net, foreclosed properties and
loans in other assets as held for sale (e) $ 1.22 % 0.98 0.87 0.92 0.78
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) These ratios do not include nonperforming loans included in other assets as
held for sale.
(b)Installment loans and vehicle leasing include loan losses, loan recoveries
and nonperforming assets related to credit card, instant cash reserve, signature
and First Choice.
(c) Annualized.
(d) Restructured loans are insignificant.
(e) These ratios reflect nonperforming loans included in other assets as held
for sale. Assets held for sale are recorded at the lower of cost or market
value, and accordingly, the amount shown and included in the ratios is net of
the transferred allowance for loan losses and the lower of cost or market
valuation.
<PAGE>
PAGE 17
FIRST UNION CORPORATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(Unaudited)
------------------------------------------------------------------------------------------------------------------------------------
2000 1999
---------------------------------------------------------- ------------
Fourth Third Second First Fourth
(In millions, except per share data) Quarter Quarter Quarter Quarter Quarter
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash and due from banks $ 9,906 7,063 8,028 7,854 10,081
Interest-bearing bank balances 3,239 4,585 1,913 1,037 1,073
Federal funds sold and securities purchased
under resale agreements 11,240 5,395 9,054 8,206 11,523
------------------------------------------------------------------------------------------------------------------------------------
Total cash and cash equivalents 24,385 17,043 18,995 17,097 22,677
------------------------------------------------------------------------------------------------------------------------------------
Trading account assets 21,630 17,417 18,237 17,076 14,946
Securities available for sale 47,603 50,392 53,491 50,421 51,277
Investment securities 1,643 1,673 1,712 1,668 1,758
Loans, net of unearned income 123,760 123,419 128,359 135,803 133,177
Allowance for loan losses (1,722) (1,720) (1,706) (1,760) (1,757)
------------------------------------------------------------------------------------------------------------------------------------
Loans, net 122,038 121,699 126,653 134,043 131,420
------------------------------------------------------------------------------------------------------------------------------------
Premises and equipment 5,024 5,090 5,211 5,171 5,180
Due from customers on acceptances 874 968 839 842 995
Goodwill and other intangible assets 3,664 3,756 3,736 5,581 5,626
Other assets 27,309 28,602 29,120 21,749 19,145
------------------------------------------------------------------------------------------------------------------------------------
Total assets $ 254,170 246,640 257,994 253,648 253,024
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Noninterest-bearing deposits 30,315 28,501 30,229 29,885 31,375
Interest-bearing deposits 112,353 110,369 114,635 110,005 109,672
------------------------------------------------------------------------------------------------------------------------------------
Total deposits 142,668 138,870 144,864 139,890 141,047
Short-term borrowings 39,446 39,388 50,883 49,389 50,107
Bank acceptances outstanding 880 976 847 847 995
Other liabilities 20,020 16,353 14,309 13,595 12,191
Long-term debt 35,809 36,258 33,140 33,043 31,975
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 238,823 231,845 244,043 236,764 236,315
------------------------------------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
Preferred stock - - - - -
Common stock, $3.33-1/3 par value;
authorized 2 billion shares 3,267 3,287 3,288 3,280 3,294
Paid-in capital 6,272 6,211 6,066 6,021 5,980
Retained earnings 6,021 6,135 5,783 8,557 8,365
Accumulated other comprehensive income, net (213) (838) (1,186) (974) (930)
------------------------------------------------------------------------------------------------------------------------------------
Total stockholders' equity 15,347 14,795 13,951 16,884 16,709
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 254,170 246,640 257,994 253,648 253,024
------------------------------------------------------------------------------------------------------------------------------------
MEMORANDA
Securities available for sale - amortized cost $ 47,930 51,731 55,392 51,980 52,708
Investment securities - market value $ 1,728 1,734 1,760 1,714 1,809
Shares outstanding (In thousands) 979,963 986,004 986,394 984,148 988,315
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
PAGE 18
FIRST UNION CORPORATION
CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
(Unaudited)
----------------------------------------------------------------------------------------------------------------------------------
2000 1999
---------------------------------------------------------- ------------
Fourth Third Second First Fourth
(In millions) Quarter Quarter Quarter Quarter Quarter
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance, beginning of period $ 14,795 13,951 16,884 16,709 15,513
----------------------------------------------------------------------------------------------------------------------------------
Comprehensive income
Net income (loss) 599 852 (2,199) 840 842
Net unrealized gain (loss) on debt and
equity securities 625 348 (212) (44) (388)
----------------------------------------------------------------------------------------------------------------------------------
Total comprehensive income 1,224 1,200 (2,411) 796 454
Purchases of common stock (294) (43) (132) (221) (83)
Common stock issued for
Stock options and restricted stock (2) 33 76 47 66
Dividend reinvestment plan 19 19 19 20 20
Acquisitions - 34 - - 1,251
Deferred compensation, net 75 70 (14) 11 (48)
Cash dividends paid (470) (469) (471) (478) (464)
----------------------------------------------------------------------------------------------------------------------------------
Balance, end of period $ 15,347 14,795 13,951 16,884 16,709
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CAPITAL RATIOS
(Unaudited)
----------------------------------------------------------------------------------------------------------------------------
2000 1999
-------------------------------------------------------------- ------------
Fourth Third Second First Fourth
(In millions) Quarter Quarter Quarter Quarter Quarter
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CONSOLIDATED CAPITAL RATIOS (a)
Qualifying capital
Tier 1 capital $ 13,952 13,933 13,452 14,422 14,204
Total capital 22,253 22,528 21,385 22,191 21,810
Adjusted risk-weighted assets 202,366 199,078 202,391 207,955 200,704
Adjusted leverage ratio assets $ 235,749 243,106 251,895 242,869 238,082
Ratios
Tier 1 capital 6.89 % 7.00 6.65 6.94 7.08
Total capital 11.00 11.32 10.57 10.67 10.87
Leverage 5.92 5.73 5.34 5.94 5.97
STOCKHOLDERS' EQUITY TO ASSETS
Quarter-end 6.04 6.00 5.41 6.66 6.60
Average 6.16 % 5.77 6.50 6.68 6.85
----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) The fourth quarter of 2000 is based on estimates.
<PAGE>
PAGE 19
FIRST UNION CORPORATION
NET INTEREST INCOME SUMMARIES
<TABLE>
(Unaudited)
--------------------------------------------------------------------------------------------------------
FOURTH QUARTER 2000
---------------------------------------------
Average
Interest Rates
Average Income/ Earned/
(In millions) Balances Expense Paid
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Interest-bearing bank balances $ 1,266 14 4.34 %
Federal funds sold and securities
purchased under resale agreements 5,994 89 5.86
Trading account assets 11,569 201 6.95
Securities available for sale 48,912 919 7.51
Investment securities
U.S. Government and other 1,084 19 6.97
State, county and municipal 558 14 10.61
---------------------------------------------------------------------------------------
Total investment securities 1,642 33 8.21
---------------------------------------------------------------------------------------
Loans
Commercial
Commercial, financial and agricultural 53,554 1,233 9.17
Real estate - construction and other 3,011 65 8.69
Real estate - mortgage 9,130 198 8.63
Lease financing 5,272 150 11.37
Foreign 5,286 97 7.29
---------------------------------------------------------------------------------------
Total commercial 76,253 1,743 9.11
---------------------------------------------------------------------------------------
Retail
Real estate - mortgage 18,805 362 7.70
Installment loans and vehicle leasing 25,035 606 9.63
---------------------------------------------------------------------------------------
Total retail 43,840 968 8.80
---------------------------------------------------------------------------------------
Total loans 120,093 2,711 8.99
---------------------------------------------------------------------------------------
Other earning assets 13,130 322 9.76
---------------------------------------------------------------------------------------
Total earning assets 202,606 4,289 8.44
-------------------------
Cash and due from banks 7,653
Other assets 29,116
-------------------------------------------------------------------------
Total assets $ 239,375
-------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS'
EQUITY
Interest-bearing deposits
Savings and NOW accounts 37,640 301 3.17
Money market accounts 17,008 202 4.74
Other consumer time 36,421 541 5.91
Foreign 7,483 110 5.85
Other time 11,902 213 7.13
---------------------------------------------------------------------------------------
Total interest-bearing deposits 110,454 1,367 4.92
Federal funds purchased and securities
sold under repurchase agreements 23,686 400 6.72
Commercial paper 2,639 42 6.19
Other short-term borrowings 9,345 96 4.09
Long-term debt 35,708 627 7.03
---------------------------------------------------------------------------------------
Total interest-bearing liabilities 181,832 2,532 5.55
-------------------------
Noninterest-bearing deposits 27,875
Other liabilities 14,915
Stockholders' equity 14,753
-------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 239,375
-------------------------------------------------------------------------
Interest income and rate earned $ 4,289 8.44 %
Interest expense and equivalent rate paid 2,532 4.98
----------------------------------------------------------------------------------------------------
Net interest income and margin (a) $ 1,757 3.46 %
----------------------------------------------------------------------------------------------------
<CAPTION>
---------------------------------------
THIRD QUARTER 2000
-------------------------------------
Average
Interest Rates
Average Income/ Earned/
(In millions) Balances Expense Paid
---------------------------------------------------- ---------------------------------------
<S> <C> <C> <C>
ASSETS
Interest-bearing bank balances $ 1,465 20 5.28 %
Federal funds sold and securities
purchased under resale agreements 6,367 97 6.11
Trading account assets 12,204 214 6.99
Securities available for sale 51,109 954 7.46
Investment securities
U.S. Government and other 1,100 19 6.92
State, county and municipal 571 15 10.59
---------------------------------------------------- ------------------------
Total investment securities 1,671 34 8.17
---------------------------------------------------- ------------------------
Loans
Commercial
Commercial, financial and agricultural 53,226 1,250 9.34
Real estate - construction and other 2,676 59 8.65
Real estate - mortgage 9,294 203 8.70
Lease financing 5,168 148 11.45
Foreign 5,016 91 7.17
---------------------------------------------------- ------------------------
Total commercial 75,380 1,751 9.24
---------------------------------------------------- ------------------------
Retail
Real estate - mortgage 23,163 432 7.47
Installment loans and vehicle leasing 24,932 596 9.51
---------------------------------------------------- ------------------------
Total retail 48,095 1,028 8.53
---------------------------------------------------- ------------------------
Total loans 123,475 2,779 8.96
---------------------------------------------------- ------------------------
Other earning assets 14,798 393 10.63
---------------------------------------------------- ------------------------
Total earning assets 211,089 4,491 8.48
-----------------------
Cash and due from banks 7,446
Other assets 28,283
---------------------------------------------------- ------------
Total assets $ 246,818
---------------------------------------------------- ------------
LIABILITIES AND STOCKHOLDERS'
EQUITY
Interest-bearing deposits
Savings and NOW accounts 37,680 296 3.13
Money market accounts 15,629 175 4.46
Other consumer time 36,328 524 5.74
Foreign 9,721 151 6.18
Other time 15,317 276 7.16
---------------------------------------------------- ------------------------
Total interest-bearing deposits 114,675 1,422 4.93
Federal funds purchased and securities
sold under repurchase agreements 28,363 459 6.43
Commercial paper 2,588 40 6.25
Other short-term borrowings 9,257 110 4.74
Long-term debt 35,263 600 6.80
---------------------------------------------------- ------------------------
Total interest-bearing liabilities 190,146 2,631 5.51
-----------------------
Noninterest-bearing deposits 28,437
Other liabilities 13,999
Stockholders' equity 14,236
---------------------------------------------------- ------------
Total liabilities and stockholders' equity $ 246,818
---------------------------------------------------- ------------
Interest income and rate earned $ 4,491 8.48 %
Interest expense and equivalent rate paid 2,631 4.96
---------------------------------------------------- -----------------------
Net interest income and margin (a) $ 1,860 3.52 %
---------------------------------------------------- -----------------------
</TABLE>
(a) The net interest margin includes (in basis points): 15, 22, 27 and 23 for
the quarters ended December 31, 2000, September 30, 2000, June 30, 2000,
March 31, 2000, and December 31, 1999, respectively, related to net interest
income from off-balance sheet derivative transactions.
<PAGE>
PAGE 20
FIRST UNION CORPORATION
NET INTEREST INCOME SUMMARIES
<TABLE>
<CAPTION>
(Unaudited)
----------------------------------------------------------------------------------------------------------------------------------
SECOND QUARTER 2000 FIRST QUARTER 2000 FOURTH QUARTER 1999
---------------------------------------------------------------------------------------- ----------------------------------------
Average Average Average
Interest Rates Interest Rates Interest Rates
Average Income/ Earned/ Average Income/ Earned/ Average Income/ Earned/
Balances Expense Paid Balances Expense Paid Balances Expense Paid
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 977 13 5.52 % $ 666 7 4.40 % $ 859 8 3.62 %
9,318 132 5.72 9,555 129 5.40 10,260 136 5.24
12,950 220 6.83 11,326 193 6.84 11,201 185 6.58
54,340 1,000 7.37 52,682 943 7.16 51,024 902 7.07
1,095 19 6.90 1,100 19 6.92 1,121 19 6.82
592 16 10.56 607 16 10.57 654 18 10.72
---------------------------- -------------------------- --------------------------
1,687 35 8.18 1,707 35 8.22 1,775 37 8.26
---------------------------- -------------------------- --------------------------
54,486 1,251 9.22 52,809 1,174 8.95 53,395 1,152 8.57
2,458 52 8.49 2,406 48 8.08 2,655 53 7.88
9,302 195 8.44 8,979 183 8.19 8,472 171 8.00
5,123 153 11.90 5,213 160 12.29 5,214 164 12.53
4,582 80 7.08 4,532 74 6.56 4,684 75 6.37
---------------------------- -------------------------- --------------------------
75,951 1,731 9.15 73,939 1,639 8.92 74,420 1,615 8.62
---------------------------- -------------------------- --------------------------
25,760 469 7.28 27,551 499 7.24 27,253 483 7.09
30,903 740 9.61 29,991 719 9.63 29,546 704 9.47
---------------------------- -------------------------- --------------------------
56,663 1,209 8.55 57,542 1,218 8.49 56,799 1,187 8.33
---------------------------- -------------------------- --------------------------
132,614 2,940 8.90 131,481 2,857 8.73 131,219 2,802 8.49
---------------------------- -------------------------- --------------------------
8,175 177 8.66 8,337 172 8.29 5,346 99 7.43
---------------------------- -------------------------- --------------------------
220,061 4,517 8.24 215,754 4,336 8.06 211,684 4,169 7.84
---------------------- ----------------------- -----------------------
7,830 8,078 8,584
27,692 24,458 23,272
---------------- ------------- -------------
$ 255,583 $ 248,290 $ 243,540
---------------- ------------- -------------
38,940 283 2.92 39,830 289 2.92 36,761 283 3.07
14,959 154 4.13 15,564 151 3.89 19,493 162 3.29
35,386 478 5.43 33,991 423 5.00 33,047 399 4.79
8,795 130 5.92 9,125 123 5.44 6,446 79 4.83
14,153 240 6.82 13,224 209 6.37 11,674 179 6.10
---------------------------- -------------------------- --------------------------
112,233 1,285 4.60 111,734 1,195 4.30 107,421 1,102 4.07
36,762 552 6.04 35,286 482 5.50 34,689 454 5.19
3,308 49 6.03 2,996 42 5.56 2,532 33 5.19
11,096 149 5.37 9,100 115 5.09 9,414 119 5.00
33,555 552 6.58 32,564 513 6.30 32,623 490 6.00
---------------------------- -------------------------- --------------------------
196,954 2,587 5.28 191,680 2,347 4.92 186,679 2,198 4.68
---------------------- ----------------------- -----------------------
28,971 28,687 29,559
13,044 11,340 10,616
16,614 16,583 16,686
---------------- ------------- -------------
$ 255,583 $ 248,290 $ 243,540
---------------- ------------- -------------
$ 4,517 8.24 % $ 4,336 8.06 % $ 4,169 7.84 %
2,587 4.73 2,347 4.37 2,198 4.12
---------------------- ----------------------- -----------------------
$ 1,930 3.51 % $ 1,989 3.69 % $ 1,971 3.72 %
---------------------- ----------------------- -----------------------
</TABLE>
<PAGE>
PAGE 21
FIRST UNION CORPORATION
NET INTEREST INCOME SUMMARIES
<TABLE>
(Unaudited)
----------------------------------------------------------------------------------------------------------
YEAR ENDED 2000
-------------------------------------------------
Average
Interest Rates
Average Income/ Earned/
(In millions) Balances Expense Paid
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Interest-bearing bank balances $ 1,095 54 4.93 %
Federal funds sold and securities
purchased under resale agreements 7,800 447 5.73
Trading account assets 12,011 828 6.90
Securities available for sale 51,751 3,816 7.37
Investment securities
U.S. Government and other 1,095 76 6.93
State, county and municipal 582 61 10.58
------------------------------------------------------------------------------------------
Total investment securities 1,677 137 8.20
------------------------------------------------------------------------------------------
Loans
Commercial
Commercial, financial and agricultural 53,518 4,908 9.17
Real estate - construction and other 2,639 224 8.49
Real estate - mortgage 9,176 779 8.49
Lease financing 5,194 611 11.75
Foreign 4,856 342 7.04
------------------------------------------------------------------------------------------
Total commercial 75,383 6,864 9.11
------------------------------------------------------------------------------------------
Retail
Real estate - mortgage 23,804 1,762 7.40
Installment loans and vehicle leasing 27,701 2,661 9.60
------------------------------------------------------------------------------------------
Total retail 51,505 4,423 8.59
------------------------------------------------------------------------------------------
Total loans 126,888 11,287 8.89
------------------------------------------------------------------------------------------
Other earning assets 11,125 1,064 9.56
------------------------------------------------------------------------------------------
Total earning assets 212,347 17,633 8.30
---------------------------
Cash and due from banks 7,751
Other assets 27,394
--------------------------------------------------------------------------
Total assets $ 247,492
--------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS'
EQUITY
Interest-bearing deposits
Savings and NOW accounts 38,518 1,169 3.03
Money market accounts 15,793 682 4.32
Other consumer time 35,536 1,966 5.53
Foreign 8,780 514 5.85
Other time 13,648 938 6.87
------------------------------------------------------------------------------------------
Total interest-bearing deposits 112,275 5,269 4.69
Federal funds purchased and securities
sold under repurchase agreements 30,997 1,893 6.11
Commercial paper 2,882 173 6.00
Other short-term borrowings 9,697 470 4.85
Long-term debt 34,279 2,292 6.69
------------------------------------------------------------------------------------------
Total interest-bearing liabilities 190,130 10,097 5.31
---------------------------
Noninterest-bearing deposits 28,491
Other liabilities 13,330
Stockholders' equity 15,541
--------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 247,492
--------------------------------------------------------------------------
Interest income and rate earned $ 17,633 8.30 %
Interest expense and equivalent rate paid 10,097 4.75
-------------------------------------------------------------------------------------------------------
Net interest income and margin (a) $ 7,536 3.55 %
-------------------------------------------------------------------------------------------------------
<CAPTION>
--------------------------------------
YEAR ENDED 1999
--------------------------------------
Average
Interest Rates
Average Income/ Earned/
(In millions) Balances Expense Paid
----------------------------------------------------- --------------------------------------
ASSETS
Interest-bearing bank balances $ 835 39 4.58 %
Federal funds sold and securities
purchased under resale agreements 9,526 459 4.82
Trading account assets 9,638 609 6.32
Securities available for sale 43,767 2,989 6.83
Investment securities
U.S. Government and other 1,163 78 6.73
State, county and municipal 700 75 10.62
----------------------------------------------------- -------------------------
Total investment securities 1,863 153 8.19
----------------------------------------------------- -------------------------
Loans
Commercial
Commercial, financial and agricultural 52,710 4,197 7.96
Real estate - construction and other 2,648 202 7.63
Real estate - mortgage 8,468 663 7.82
Lease financing 4,967 629 12.65
Foreign 4,500 273 6.08
----------------------------------------------------- -------------------------
Total commercial 73,293 5,964 8.14
----------------------------------------------------- -------------------------
Retail
Real estate - mortgage 23,435 1,661 7.09
Installment loans and vehicle leasing 33,063 3,069 9.28
----------------------------------------------------- -------------------------
Total retail 56,498 4,730 8.37
----------------------------------------------------- -------------------------
Total loans 129,791 10,694 8.24
----------------------------------------------------- -------------------------
Other earning assets 4,516 326 7.23
----------------------------------------------------- -------------------------
Total earning assets 199,936 15,269 7.64
----------------------
Cash and due from banks 9,178
Other assets 21,205
----------------------------------------------------- -------------
Total assets $ 230,319
----------------------------------------------------- -------------
LIABILITIES AND STOCKHOLDERS'
EQUITY
Interest-bearing deposits
Savings and NOW accounts 37,448 1,035 2.77
Money market accounts 20,031 631 3.15
Other consumer time 33,557 1,675 4.99
Foreign 5,553 259 4.66
Other time 7,528 454 6.03
----------------------------------------------------- -------------------------
Total interest-bearing deposits 104,117 4,054 3.89
Federal funds purchased and securities
sold under repurchase agreements 30,046 1,452 4.83
Commercial paper 2,224 107 4.81
Other short-term borrowings 9,188 460 5.01
Long-term debt 28,738 1,626 5.66
----------------------------------------------------- -------------------------
Total interest-bearing liabilities 174,313 7,699 4.42
----------------------
Noninterest-bearing deposits 30,995
Other liabilities 9,079
Stockholders' equity 15,932
----------------------------------------------------- -------------
Total liabilities and stockholders' equity $ 230,319
----------------------------------------------------- -------------
Interest income and rate earned $ 15,269 7.64 %
Interest expense and equivalent rate paid 7,699 3.85
----------------------------------------------------- ----------------------
Net interest income and margin (a) $ 7,570 3.79 %
----------------------------------------------------- ----------------------
</TABLE>
(a) The net interest margin includes (in basis points): 23 and 21 for the years
ended December 31, 2000, and December 31, 1999, respectively, related to net
interest income from off-balance sheet derivative transactions.
