Wachovia's non-performing assets increase, net loan losses decrease in first quarter

By Sara Rosenberg

New York, April 18 - Wachovia Corp. announced an increase in non-performing assets (NPAs) and the improvement of net loan losses during the first quarter of 2002.

Total NPAs went up 6% or $116 million to $2.1 billion, according to a filing with the Securities and Exchange Commission. Of the total, $74 million of the increase was due to "a large retailer's" declaration of bankruptcy in the first quarter 2002 and telecom credits. Excluding the large retail credit, NPAs were up by 2%. Allowance as a percentage of loans improved to 1.84%, primarily due to lower loan balances, the filing said.

The bank's company's net loan losses improved by 14%, to $325 million or 0.83% of average net loans, Wachovia said. In the fourth quarter of 2001, net charge-offs were 0.93%. According to the filing, a total of $57 million of loan losses was a result of secured exposure to entities of "an energy services company" and over one third of the commercial losses recorded by the bank related to telecom companies.

Provision of $339 million exceeded net loan losses by $14 million due to write-downs recorded on loans sold or transferred to loans held for sale.

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