Alice Lehman - Director of Wachovia IR Robert K. Steel - CEO and President Tom Wurtz - Senior EVP and CFO Lanty L. Smith - Chairman Don Truslow - Senior EVP and Chief Risk Officer David Carroll - Senior EVP and Head of Capital Don Truslow - Senior EVP and Chief Risk Officer Benjamin Jenkins - Vice Chairman and President of the General Bank

Jefferson Harralson - Keefe, Bruyette & Woods Michael Mayo - Deutsche Bank Meredith Whitney - Oppenheimer & Co. Christopher Mutascio - Stifel Nicolaus & Company, Inc. Nancy Bush - NAB Research LLC Edward Najarian - Merrill Lynch Todd Hagerman - Credit Suisse Matthew O’Connor - UBS Brian Foran - Goldman Sachs Ron Mandel - GIC Betsy Graseck - Morgan Stanley Gerard Cassidy - RBC Capital Markets

Good morning. My name is Regina and I'll be your conference operator today. At this time I would like to welcome everyone to the Wachovia Second Quarter 2008 Earnings Release conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer period. [Operator Instructions]. As a reminder, ladies and gentlemen, this conference is being recorded today, Tuesday, July 22, 2008. I would now like to introduce Ms. Alice Lehman, Director of Wachovia Investor Relations. Ms. Lehman, you may begin your conference. Alice Lehman - Director of Wachovia Investor Relations: Thank you, operator and thanks to everyone out there for joining our call this morning. We hope you have received our earnings release by now as well as the slides we will be using in today's presentation and our supplemental quarterly earnings report. If you haven't, all of these documents are available on our Investor Relations website at wachovia.com/investor. In this call we will review the first 28 pages of the slide presentation package. In addition to this teleconference, this call is available through a listen-only live audio webcast. Replays of the teleconference will be available by about one o'clock today and will continue through 5 PM, Friday, October 17. The replay phone number is 706-645-9291, the access code is 49418191. Our CEO, Bob Steel, will kick things off. He will be followed by CFO, Tom Wurtz, and our Chief Risk Officer, Don Truslow. Also with us are, our Chairman, Lanty Smith and other members of our executive management team, all of whom are here to answer your questions as well. We will be happy to take your questions at the end. Of course, before we begin I have a few reminders. First, any forward-looking statements made during this call are subject to risk and uncertainties. Factors that could cause Wachovia's results to differ materially from any forward-looking statements are set forth in Wachovia's public reports filed with the SEC, including Wachovia's current report on Form 8-K filed today. Second, some of the discussion about our company's performance today will include references to non-GAAP financial measures. Information that reconciles those measures to GAAP measures can be found in our filings with the SEC and in the news release and the supplemental material located at wachovia.com/investor. And finally, when you do ask questions, please give your name and your firm's name. Now, let me turn this over to Bob Steel. Robert K. Steel - Chief Executive Officer and President: Thank you Alice, and thank all of you for joining. This is an important call for Wachovia and we appreciate your attention. As Alice said, the call this morning will really be in three parts. After some introductory comments by me, Tom Wurtz will talk about the facts and the financials, then Don Truslow will talk about some challenges in our credit area and what we think are very realistic assumptions for dealing with this and our strategy. And then lastly, I'll return to make some concluding comments about capital and liquidity. And thank you for your attention. As Alice said too, we have business leaders with us here in the room today. So should your questions be best answered by one of them, we will introduce them and they can speak more specifically to the issues. Now let me began by introductory comments and reference you should you be looking at the deck to page 1. Basically, the facts are outlined on this first page. There were GAAP losses of $8.9 billion, including a $4.2 billion credit reserve billed that we have previously announced, as well as the goodwill impairment we'd also [inaudible] for you earlier which totaled $6.1 billion. Excluding the goodwill impairment, we had an operating loss of about $2.7 billion, consistent with what we had announced previously on July 9. And excluding about $9 billion of what we are calling "Notable items", we generated $4 billion in pre-tax pre-provision results. This is a very important fact to us at Wachovia. The core franchises of our company are strong and in some cases getting stronger and our goal is to make them the strongest. But let me stop, our reported results today are clearly a disappointing performance for which we take responsibility. We are serious about getting on top of these issues quickly and we believe we have a good grasp of the challenges facing the economy, the industry and Wachovia. Today, we're going to discuss decisive steps that we believe we're taking to generate, protect, and preserve capital through first, a reduction in the quarterly dividend to $0.05 per common share and with the dividend reduction, and the other organic levers we have to rebuild capital, we estimate that we'll preserve or free up more than $5 billion of capital. And we look forward to discussing all of these different issues with you today. In addition to freeing up capital, we are also doing our best to remove significant credit risk by exiting the General Bank's wholesale mortgage origination channel immediately. Previously announced, we had ceased originating the negative am [ph] Pick-A-Pay mortgages, and we are working with our borrowers to assist them in avoiding foreclosures. We'll go over this in more detail in the following presentation. So now, let me turn this over to CFO Tom Wurtz for the details on the second quarter and then he will be followed as I said by Chief Risk Officer, Don Truslow to provide a deep dive on the characteristics of the portfolio, the reserve build, and particularly our view regarding stress portfolios because we are committed to increase transparency with regard to all issues of credit risk. And then I will return to cover the capital actions announced today in more detail, and then look forward to your questions. Our bottom line thoughts on this performance is their earnings engine remains intact, core businesses are strong and positioned attractively, we have done our very best to be more cautious and develop a realistic approach regarding our credit reserves in light of the severe decline in housing markets. And also our other portfolios are performing better than the industry. Clearly, challenges remain as the economy grows. We feel Wachovia is on exceptional strong footing, and let me turn it over to Tom. Tom Wurtz - Senior Executive Vice President and Chief Financial Officer: Thanks, Bob and good morning to everyone. I'd ask you to turn to page two and you can see the headline is the GAAP loss of $8.9 billion, and that corresponds to an operating loss of about $2.7 billion in the quarter. And just a reminder, all of you are well aware that the goodwill impairment is $6.1 billion is non-cash and capital neutral. One of the highlights for the quarter would be strong net interest income growth, you have seen a lot of that across the industry. We had expected it to be up strongly and absent the impact of a $975 million SILO charge that we've previously disclosed, net interest income was up 11% on a linked quarter basis. That was driven both by balance sheet growth and a nice improvement in the margin up 23 basis points before the impact of the SILO charge. Earning assets and low-cost core deposits were up about 2%, fees up 14%, you will hear more about the strength in the underlying businesses, but we had good performance in service charges, the banking fees, advisory and underwriting, and other income and market disruptions losses were reduced by about $1.4 billion and that is associated with a dramatic reduction in exposures which Don will speak to you later. Expenses up on the surface 14%, however excluding in addition to the legal reserve, they are only up about 3%, when you consider both the legal reserves and non-merger severance. And the 3% increase was driven by higher incentives based on higher revenue and annual merit increases. Turning to page three, beneath the headline GAAP loss for the quarter, there is a positive story regarding the fundamental underpinning our businesses. This quarter is laden with high-credit costs and a number of notable items, which are net reflective of the longer-term earnings potential of the company. This table is intended to help illustrate this point. We start with the pre-tax loss of $10.4 billion and then back up provision expense to get a pre-tax, pre-provision loss of about $4.9 billion. Embedded in that loss are five notable items that aggregate to nearly $9 billion of loss. They are, first, the goodwill impairment of $6.06 billion, the SILO charge of $975 million, market disruption losses of $936 million, the billed [ph] legal reserves of $590 million and the impact of discretionary plan sales of securities, which produced a $391 million loss in the quarter. Absent these items results for the quarter are modestly higher than $4 billion, which speaks to the strength of the underlying franchise. Clearly, we can't wish away any of these items and I'm not suggesting that we are collectively not responsible for these outcomes. So, I think it is useful to clear the dust to better understand how the businesses are actually performing. While we are on this page, I would like to address the goodwill impairment we recorded in the quarter. We experienced an impairment in three of our reporting sub-segments which totaled $6 billion. Those reporting sub-segments were our corporate investment bank, corporate lending segment, our investment banking segment and in our general bank, our commercial segment. I would suspect that it's not intuitive why we do not have an impairment in the retail and small business segments, which includes Legacy, Golden West business given the radical changes we are making to our lending strategy and the core earnings outlook for the now trading Pick-a-Pay portfolio. As a little bit of background following an acquisition, the assets of the acquired business are contributed to the appropriate reporting segment of the acquirer. In this case, the entire Golden West business was contributed to our retail and small business segment. The goodwill associated with Golden West has been homogenized with any pre-existing goodwill in this segment. We've recorded goodwill in the segment from the merger between Wachovia and First Union, the acquisition of South Trust and other miscellaneous small deals over the past two decades. Because of the strong organic growth of this segment over the past seven or eight years, its absolute earnings power and the market value of this franchise, it continues to be able to support the full amount of goodwill assigned to this segment and it's quite unlikely this will change. The reason for the impairment in the other segments arises from the significant disconnect between our market cap and our book value of equity. When we estimate the fair value of each reporting segment in light of our overall market cap, we are left with the three segments I mentioned earlier where the implied fair value of goodwill is less than the actual goodwill. For the CIB segment, the entire amount of the signed goodwill was written off and in the GBG commercial segment, approximately one-third of the signed goodwill was written off. We provide more detail regarding the methodology for goodwill accounting and a table detailing this on page 50 and 51. Turning to page 4, the key points to take away from this page are the Pick-a-Pay portfolio will begin to try [ph] as we have ceased originations, they are accurately working with customers for refinance and other mortgage products. Overall growth for the loan portfolio is expected to be down over the remainder of the year as we focus intently on preserving capital for our core customers and reduce credit only relationships both in consumer and wholesale portfolios. It's worth noting no loans were transferred to the loan portfolio from health or sale or trading accounts in the quarter. And, also we are not seeing any unusual line of credit utilization in either of the retail or wholesale portfolio. Turning to page 5. We focus on deposits, you see low-cost core deposits at 2% linked quarter and 7% year-over-year, we saw a nice increase in our suite product, strong commercial and treasury services sales, and solid checking acquisition with 263,000 net new accounts in the quarter. We also continue to enjoy a strong response for our Way2Save product and the associated cross-sell of checking accounts. After a few months, we are approaching nearly $0.25 billion in new checking balances associated with that account. On the CD front, we staggered originations last year so did not mature in the November to February timeframe where we're doing the branch conversions with Golden West. After those conversions were successfully completed, those CDs that we booked early in 2007 matured, and we allowed about 8 billion of those balances to run off in the quarter and those are relatively high priced CDs in the low 5% range. We then initiated a campaign to raise CDs at the end of June, which has increased balances by about $13 billion. The CDs are spreads that are anywhere from 70 to 90 basis points more attractive on a relative basis than what we allow it to try it over that timeframe. So, as you can see the average cost of CDs has come down appreciably since the end of March, is now stabilizing somewhere in around in the low 370s, and we continue to enjoy a strong positive growth on the CD portfolio. As we turn to page six, this page is simply intended to illustrate the core strength of each business. You see that on a segment basis, and this is consistent with our historic segment reporting methodology, which excludes merger-related restructuring expense, intangible amortization, goodwill impairment, and reserve build, those things are all held in apparent, you can see the General Bank produced on a segment basis over $1.1 billion of earnings, Wealth Management approximately $100 million, the Corporate and Investment Bank about $200 million, and Capital Management about $300 million. So good evidence of strength in each business. Now, turning to the General Bank on page 7. On the left-hand side you see two tables. One is the conventional view of the General Bank and the second is the General Bank excluding mortgage. And the purpose for that is in general, the General Bank is doing extraordinarily well in a relatively difficult environment, and the impact of mortgage has a pretty pronounced impact on the results. So, if I can direct you to the bottom part of the page excluding mortgage, what you would see is that our segment earnings basis excluding mortgage, it was up 6% on a linked-quarter basis, down 4% year-over-year with the drivers of that reduction being higher credit costs across other portfolios in the General Bank and mostly higher expenses reflecting western expansion and continued de novo expansion. Looking at the General Bank including mortgage, what you see is down 6% on a linked basis, down 23% on a year-over-year basis almost all attributable to the impact of higher credit costs in the mortgage portfolio. But underneath this, you see strong evidence of good solid momentum in the company, you see fees up 2%, card volume up 10%, mortgage banking fees up. Obviously, we have been very focused on expense management. You see that 53% of the expense increase is driven by a higher credit related expenses, REO disposition and management and 17% by growth initiatives so, relatively modest core expense growth. And salary is up reflecting annual merit increases, FTE is down about 416 employees. Importantly though in this difficult environment, customer satisfaction remains best-in-class. 6.65 on a 7 point scale, strong customer loyalty, customer acquisition remained very robust, our new loss ratio of 1.23. And we also provided some further details on that, our customer acquisition rate is about 15.3% and attrition a low 12.4%. Also in the commercial side, we see customer acquisition up about 28%. And importantly what you'll hear as a resounding theme is that, across our business segments, you're seeing good evidence of synergies between the businesses. Here we highlight one, investment sales up 26% year-over-year. Turning to page 8, the Wealth Management team delivered a record performance in the quarter, and that follows several previous records over the last several quarters. You see strength in net interest income, fee is down slightly based on market valuations, up 2% year-over-year as growth in fiduciary and asset management fees offset lower insurance commissions, a good expense management with most of it driven... most of the increase driven by expansion into the West. A record overhead efficiency ratio of 61% for the Wealth Management team, and great client acquisition, with acquisitions up 16% quarter-over-quarter. And again, here if you see the evidence of the strong partnership with record insurance bank cross sell up 51% year-over-year. Turning to page 9, the Corporate and Investment Bank. I think highlight here are several fold. One, there has been a significant reduction in exposures that expose us to further market disruption losses, Don will detail that later. Second, the actual losses in the quarter were trimmed by about two-thirds from the prior several quarters. And third, they continue to evidence very solid expense control in what I would characterize as generally, a fairly challenging market, you see underlying strength on the origination side with Investment Bank origination fees up 16%, with strong performance in global rates, leverage finance and equities. Principal investing is down appreciably from the prior quarter, which I'd remind you, included the implementation of FAS 157 that produced a relatively significant mark-to-market on that portfolio. You have not yet seen all the evidence of the expense discipline in the Corporate Investment Bank. You will see about 400 of the 500 previously announced FTE reductions occurring in the third quarter in associated expense space. Loans up 6% quarter-over-quarter, about a third of that is associated with the first quarter transfers of loans from trading or available-for-sale portfolios and to loan portfolio where the other two-thirds reflects on a strong international trade finance in commercial real estate businesses. We expect balance sheet to contract over the second half of 2008 as we are very disciplined on the lending side. And again, here you see evidence of strong internal partnerships with revenue on GBG referrals of investment banking products, up about 14% year-over-year. The final major segment I will address is the Capital Management area. And I think here underneath the reported results are some very strong fundamentals. What you see is, net interest income up 10% on strong growth in retail deposits out of the brokerage business. Fees down 9%, reflecting $118 million of market disruption losses and lower asset valuations. Primarily we have $89 million of securities impairments relating to liquidation of an every [ph] refund and then the further mark on assets that were taken out of money market funds since last fall, together those contribute the vast majority of the reduction in revenue in the quarter. Commissions were down 2%, driven by lower insurance commissions in our reinsurance business, and fiduciary and asset management fees down 5% quarter-over-quarter on lower market valuations despite retail brokerage managed account. I think the keys that people should take away is that we are about 40% complete with the AG Edwards integration, it is going very well, a good evidence of that would be, we have record Series 7 headcount at this point, we have client assets where we are witnessing positive net inflows, we saw $4.8 billion in the second quarter of positive net inflows, $4 billion of that within managed accounts. And despite the S&P being down 15% since consummation, client assets are only down about 7%. So, again we are doing a great job of attracting very productive brokers, retaining our core brokers and building client assets. Evidence of the strong internal partnerships would be reflected in CIB syndicate revenue, about 61% quarter-over-quarter, and General Bank referrals are up strongly with lending up 15% and deposits up 17%. So, all in all, I think there is great reason to be very accomplished that the underlying fundamentals of our business are quite strong, we're serving customers very well. Robert K. Steel - Chief Executive Officer and President: Thanks, Tom. And now what we will do is have Don comment on some of the issues I aligned earlier with regard to credit, and issues in the housing-related and market disruption exposure. Don? Don Truslow - Senior Executive Vice President and Chief Risk Officer: Thanks, Bob. As has been mentioned, credit costs were very significant for the quarter, and credit metrics showed pretty meaningful deterioration throughout the quarter, primarily through the continued slide in the housing market. We continue to confront unprecedented housing price declines in the market, especially in certain markets in California where we've got Golden West concentrations. About two-thirds of our credit costs for the quarter were related to Pick-a-Pay portfolio for both building reserves or covering charge-offs. Secondarily, but still housing-related, we continue to work through the challenges presented by the commercial real estate portfolio, tied to the housing market. Outside of those two portfolios, we have seen credit costs increase, but at a pretty manageable pace, and also I'd say, very much in line with what we have been anticipating and talking about for several quarters, and in line with what... I think one might expect to see in this part of the economic cycle and the credit cycle. If you flip over to page 12... slide 12, it provides an overview of the credit metrics for the quarter. Again, period-end loans of $488 billion, non-performing assets ended the quarter at about $12 billion, which was up $3.6 billion at the end of the first quarter. 80% of the increase was driven by the Pick-a-Pay non-performs and higher NPAs and real estate loans related to residential properties. Pick-a-Pay non-performs were up $2.4 billion, and end of the quarter it was about $7 billion. Of that $7 billion representing nearly 60% of the company's total non-performing loans. The nature of the Pick-a-Pay non-performing balances as we have discussed before, are such that we would expect they will continue to rise given this just fundamentals of the time frame [inaudible] how long it takes to get that property through foreclosure, that's where we can take quite... actually take action. So we have seen the rise in non-performs that we have been talking about for a while. And I would expect that going forward, we will continue to see some of that trend. Commercial real estate residential related NPA is worth about $500 million for the quarter ending at about $1 billion and non-performs in other loan portfolio is generally showed modest increases. Provision expense of $5.6 billion includes $1.3 billion in charge-offs that resulted in 110 basis points annualized charge-off rate for the quarter. Breaking that down a little bit, commercial charge-offs totaled $455 million, up $218 million from the first quarter. The charge-offs in the real estate Financial Services Group improved nearly three quarters of this increase. And again, most of that was tied to the residential related segment of commercial real estate. Consumer charge-offs for the quarter were $854 million, up $326 million from the end of the first quarter. This increase was driven by a $268 million increase in Pick-a-Pay charge-offs to $508 million or about 60% consumer losses. Provision expenses exceeded charge-offs in the quarter by roughly $4.2 billion resulting in an $11 billion ending allowance for loan losses which represented about 2.2% of period-end loan. The largest portion of the provision which was $3.2 billion was to bill the allowance related to the Pick-A-Pay portfolio and as we will touch on in just a minute, this action reflects our view of more negative trends in the housing market since the end of the first quarter and a higher estimation of losses in the portfolio. The ending reserve balance associated with the Pick-A-Pay portfolio at quarter end was 4.2%. You slip over to slide 13 and this provides an overview of the consumer loan portfolio in total and of the $272 billion of consumer loans at quarter end, the Pick-A-Pay portfolio represented about 45% of the total portfolio. Secondly in auto loans represented about 13% and 10% respectively and you will note there is very little unsecured consumer credit in our consumer loan portfolio. Non-performing assets totaled $8.4 billion and $7 billion of which we mentioned are tied to our Pick-A-Pay, included in the $7 billion or about $1.5 billion in loans where we have modified the loans to work with borrowers who are experiencing some form of temporary hardship. And our experience has been recently good in this regard and that roughly 50% of these modified loans remain current with their modified terms after about six months of seasoning. As I mentioned charge-offs totaled about $854 million, up $326 million from the end of the first quarter. 82% of the increase in charge-offs were increased Pick-A-Pay charge-offs and excluding the increase in Pick-A-Pay losses, all other consumer losses were up a pretty modest $58 million during the quarter, which we feel recently good about. Slide 14 provides a breakout of the consumer mortgage portfolio, which excludes the home equity products. And information concerning the home equity products is contained in the appendix on page 44 and while cost in the home equity products are up, as we have anticipated, we continue to be very pleased with how that portfolio performs relative to other portfolios in the industry. The mortgage portfolio here is really shown in three pieces. First we've got the Pick-a-Pay loan portfolio, and as mentioned in the bullet points, we continue to be aggressive in selling foreclosed properties as quickly as practical given the falling housing prices in many of our stress markets, particularly in California. And, during the quarter we sold just under 1,200 properties against an intake of about 1,400 properties. Severities linked to moving these properties, which include selling costs rose to an average of about 36% for the quarter, versus 32% for the first quarter. So our severities are up a little bit, it's we're being aggressive in [inaudible] properties. And I will cover our changed view of the outlook for losses on this portfolio in more depth in just a minute. Next is the traditional mortgage book, which consists of the legacy Wachovia portfolio. And while we have seen some modest deterioration in this portfolio it now looks quite well against the challenging housing environment with charge-offs up only 3 million from the first quarter to 32 million which represents about 20 basis points. Lastly, there is a smaller mortgage book tied to our Corporate and Investment Bank, which represents loans primarily purchased through our key wholesale channel as well as some other purchase loans, and carried as loans held for investments. And most of these loans were either purchased in a discount or mark down if they were moved from held for sale status. To drill a little deeper into the additional provision expense during the quarter for the Pick-a-Pay portfolio, you might want to turn to slide 15. This slide outlines our key changes in our outlook. One distinction, we believe in the modeling tool, which we used as a base for forecasting Pick-a-Pay losses, and therefore we use as a backdrop for setting the allowance is that housing price assumptions in our methodology not only drive the estimated severity, but also directly impact our estimated frequency up to fall. So basically as housing prices fall and as our assumptions around housing prices are such that we're looking for declining housing prices, the modeling methodology expects that borrowers will have a higher [inaudible] to fall as well as the higher severity of loss. And that makes the modeled output particularly sensitive to our housing price assumption. You can see the portfolio statistics at the end of the second quarter and the housing price scenario we are currently using compared with the scenario used in the first quarter, the change to a more negative outlook versus what we were using in the first quarter, were driven by a couple of things. First, driven by what we are experiencing in the market, and I think that has been also reflected by other market commentators as we move through the second quarter. Also influenced by our view that the consumer is now facing tougher economic headwinds, particularly in employment and energy costs, lenders have generally tightened their credit standards further and that has reduced the amount of capital available with potential buyers. And we still are very concerned about the growing overhang of foreclosed properties in the market that may continue to press [ph] values. Slide 16, all I have made is probably overly busy with data but hopefully it will provide useful information on the 25 MSC in the portfolio that it contributed to about 90% of the Pick-A-Pay losses experienced thus far. So, very quickly just a range to the page, walking across the page, first set of columns are the balances in these 25 markets as of the end of June. There is aggregation at bottom of the page and the 22 billion combined concentrated in the Central Valley and Inland Empire have both represented our biggest challenges, and actually have represented a little under 50% of all losses we've taken to date and that's where we are focusing on, much of our retention and activity. The second set of columns begins with the average original loan to value for Pick-A-Pay loans. The next column titled, current, is the actual combined loan to value for our loans using estimated valuations or AVMs, which were updated in May for the collateral underlying our loans. And then the third column in that set titled, average at trough, approximates the average loan to value at the model trough of the market by MSA for our loans implied by the housing price decline what we have now in our allowance model. So, just to back up on average, we began with 71% combined loan to value for our portfolio. Our current estimates using May AVMs are that average LTV each have gone to about 85% and the implied average LTV at trough, using the assumptions now in the allowance model would be about 99%, and of course the timing of those troughs will be different across these various MSAs. The next set of columns indicate the decline in house prices underlying our loan since origination. Again using the May AVM data, for our houses, in aggregate we've seen a decline of about 9% of our house collateral with some markets such as Riverside and Stockton being a whole lot worse than that. Taking this a step further, the next column approximates the price decline implied by the assumptions in the allowance model, from now until the model trough. So, again in short, we've experienced about 9% decline on average in our underlying house prices thus far in the housing slump. And the base model assumptions would imply another 14% to go, we're not quite half way to the decline and again with some fairly wide variations by markets. The last set of columns we've shown here are the cumulative losses calculated by the base underlying model. And total of about 11% for the portfolio and that's up from the 7% to 8% range that we talked about at the end of the first quarter, reflecting our changed outlook in housing prices. I'll also say that, in addition to the base model losses, we made several management adjustments to the output to further stress certain markets based upon a variety of factors on what we see on the ground. And so therefore, our overall total cumulative loss for the portfolio today is about 12%. The changes in our outlook for housing prices and are updating as [ph] the correlation among the model input based upon our actual experience over the last few months and further management adjustments that I have just described drive the credit costs, we currently see for the remainder of 2008 and 2009 shown on the next slide, slide17. The assumptions used for modeling purposes assume basically that housing prices stabilize somewhere around mid 2010 and that our annualized charge-offs peak in 2009 and begin to trend down in 2010 and in 2011. That's why we see anticipated presumably late in 2009. In response, we're taking very aggressive steps to manage our exposure in this portfolio and some of them have already been mentioned on slide 18. We outlined some of these actions highlight and just to reiterate, we have discontinued offering of Pick-A-Pay product and therefore eliminated new loans with negative amortization features. We'll also be discontinuing our wholesale origination channel, which relies upon mortgage brokers in the General B. But focus for our mortgage production going forward will be on our core retail wealth and securities brokerage customers and that is lending, which is traditional business for us and which has held out very well through this housing crisis. In addition, we are pursuing strategies to work closely with current Pick-A-Pay customers who craft mutually beneficial ways to reduce our overall concentration in certain markets and to the Pick-A-Pay product. And we are either refocusing or aligning over thousand of our employees to actively manage this activity. On slide 19, we've also tightened our lending standards across the mortgage platform by various markets, and this not only encompasses Pick-A-Pay but very much driven by housing price decline dynamics in those markets. We are taking out cost of the mortgage business while at the same time increasing our resources to aggressively manage our problem loans and foreclose properties and we have also dropped the prepayment penalties on Pick-A-Pay loans that may have been a varied [ph] response finance... of ours to refinance and of course discontinued our loan retention efforts for that portfolio. Switching gears and flipping over slide 20 relating to partial lending, our total commercial portfolio with $217 billion at quarter end with about $48 billion of that amount in our core commercial real estate portfolio with the rest spread across a number of industries and representing business banking, community banking, middle market and large corporate, but roughly $12 billion in residential related commercial real estate loans are included in the commercial real estate numbers and continue to be our biggest challenge in commercial lending, representing about $2 billion of the total commercial non-performing assets of $3.5 billion. Total charge-offs of $455 million included $262 million in residential related commercial real estate charge-off and if you pull out the impact of residential real estate, commercial... real estate loans from charge-offs for the quarter, commercial charge-offs would have been about 38 basis points. As Tom mentioned, flipping over to slide 21, market disruption losses for the quarter were down from the first quarter totaling a little over $900 million versus $2.3 billion in the first quarter, the decrease in losses from the first quarter primarily reflects our risk reduction activities which is focused on both... certainly, but aggressively reducing our exposure to these market sensitive assets. And just to wrap up on slide 22, this captures reduction in exposure and as you can see, in leverage finance we're down quite a bit, our exposure now stands at $3.8 billion, it actually includes $600 million of new business that we committed to you during the quarter that we think is very good new business. Commercial mortgage-backed security net exposure is now very modest $750 million, and I think compares very well with other players in the market, it reflects active selling during the quarter was about $2.5 billion sold into the market. And finally our sub-prime related market exposures were down modestly from first quarter. Now Bob has a recap of the credit numbers. Robert K. Steel - Chief Executive Officer and President: Great, thanks Don, and now what I'll do is try to move to conclude and then we can get to your questions. And I will conclude with talking about the initiatives that are already underway to protect and preserve and generate capital and ensure the right liquidity. If you turn to page 24, you can see a summary of the... on the right-hand side, a description graphically of various capital ratios and as we've announced, we are reducing the quarterly dividend to $0.05 per share and that will result in approximately $700 million of capital quarterly being preserved. Nextly, we are reducing expenses as budgeted and deferring capital consuming initiatives and we think that will preserve up to $1.5 billion of capital in the '08, '09 period. Nextly, we are also being much more disciplined about the balance sheet and risk reduction strategies which we think will affect results rather in a $20 billion reduction in loans and securities by this year-end, which should free up as much as $1.5 billion of capital. We also mentioned that Pick-a-Pay refinance, we're going to be driving towards marketable alternatives and that will be a very, very important initiative. We have the potential should we need to, to consider the sale of non-core assets. If you turn to Page 25, we drill down in this a bit more with regard to the $1.5 billion of reduction in estimated expenses. We've begun a thorough reduction, a thorough effort of expense reduction in early June and we plan to lower the full-year expenses by a $1.5 billion against budget. That will be about 40% in personal, 25% in other categories, 23% in projects and 12% in marketing and advertising. These initiatives have been identified or/and are in progress. Second half '08 expense benefit of approximately $490 million will be offset by severance and other related costs. We are reviewing additionally about 500 existing and planned capital projects and that will result in the delay or cancellation of projects to reduce 2009 CapEx by about $350 million. We believe that these expense actions should have a very modest effect on revenue. We're basically talking about reducing approximately 6,350 active employees today and 4,400 open positions and contractors. Our western retail expansion will continue but at a more deliberate pace. We expect to improve the 2009 overhead efficiency ratio by 200 to 300 basis points from the normalized level of approximately 57% and all of this should preserve $1 billion of capital. On 26... page 26, we talk about some other aspects, which I'll go through quickly with regard to $20 billon reduction as I mentioned of loans and securities. We will focus on the reinvestment of maturing securities and be quite focused there and lean towards very little reinvestment. We'll also have enhanced discipline with regard to commercial lending to be sure that we're focused on our very most important strategic relationships. We will have new return targets for renewals and new commitments to ensure that we are using our capital in the most judicious fashion. We will have active programs to further enhance the mix of our consumer loan portfolios, reducing the mortgage concentration by tightening standards, discontinuing negative am [ph] option loan originations, eliminating the General Bank wholesale channel, and eliminating the focus on Pick-A-Pay mortgage retention. We are offering opportunities also for people to refinance into confirming products, and so then we have additional measures of enhanced pricing in the auto portfolio, and continuing to review non-core assets. On page 27, we basically talk a bit about liquidity, which we realize as an important issue. We basically are proactively managing liquidity and capital, given this environment. We have significantly increased funding availability in face of the rising industry challenges. The Wachovia Holding Company continues to maintain a very prudent liquidity profile. At the holding company level, we have a cash position of $22 billion at quarter and, which equates to approximately 3.5 years of long-term debt maturities, but we have premarket disruption cash position of $14 billion as of June 30, and we have now enhanced flexibility and liquidity as a result of the aforementioned dividend reduction. Wachovia continues to be a provider of excess liquidity to the market. Our retail brokerage average deposit products increased $5.7 billion, quarter-over-quarter with expected new balances of $10 billion over the next several quarters. Balance sheet strategies and asset sales are anticipated when needed to further enhance the strong balance bank liquidity position. And now, let me turn to the last page of our presentation. I just want to make a few comments first about the environment overall. There is no question that the economy, financial markets, housings, and financial services and Wachovia are all facing challenges. Progress is being made in working through these issues, but there will be more challenges ahead. When we communicate with you, our goal is to be realistic and balanced and cautious and as Mathew Smith says prudently paranoid. Secondly, there is no question that given the cycle, and where we are that credit costs will rise as you would expect given these conditions. In summary, we at Wachovia understand our issues and challenges, we are already addressing them, and we will be taking further actions. We believe we are facing up to and are realistic with regards to the realities of housing and its expected deterioration. We are discontinuing the negative amortization product and exiting the General Bank wholesale channel. We are committed to a strong balance sheet, and protecting and creating shareholder value. We have several initiatives as we have described underway to protect, preserve, and generate capital and additional options are open to us. Our core businesses are attractive and performing well. We are committed to strengthening them, while continuing to excel and improve our operations. Just a few weeks ago Matthew Smith said that we were committed to providing to you extensive details with regard to our business performance and challenges. And we hope today that we begun to move forward in the fashion. Let me now open the line for questions. Question and Answer

Operator: [Operator Instructions]. Your first question will be from Jefferson Harralson with KBW. Jefferson Harralson - Keefe, Bruyette & Woods: Hi, thanks. I want to ask you about the call on capital that could be coming in the form of the prudential put, I've seen it written that, that it could be a $5 billion evaluation at some point in the future. What is your... what were your thoughts about the potential of a prudential put and how can you plan for that potential event? Robert K. Steel - Chief Executive Officer and President: Great, thank you. As I said earlier, we have all of our division leaders here and so I'm going to refer that to David Carroll, who is sitting here with me. Thank you. David Carroll - Senior Executive Vice President and Head of Capital: Yes thanks, Bob. First of all, I should make sure everyone is aware that the partnership with Pru has been quite a good one for both of us. And Pru has been pretty candid about their satisfaction with that partnership. As you know, in the formation agreement, which is a public document, it was revealed that they... their first put option was eligible for July 1 of this year. I would be surprised if they put it given the profitability of this venture. Also, the benefits of the AG Edwards acquisition won't be fully borne out until 2009. Edwards placed the value of their put would be significantly enhanced by the $680 million and expense efficiencies that we are on track to get. So, certainly can't speak for Prudential, but given the nature of our relationship for the past five years, the profitability of this, and the value ahead, we'd be surprised by that. Jefferson Harralson - Keefe, Bruyette & Woods: All right. If it's true that the Prudential put would be $5 billion, it kind of assumes that your value in it is $15 billion, would you guys consider selling this business, is there anything in the contract that would prevent you from selling it, and what would be... what is your basis in the investment right now? David Carroll - Senior Executive Vice President and Head of Capital: This is David Carroll again. I'll defer to Tom Wurtz on any comment on the basis that we are the majority owner of this business and the only thing that requires a super majority, both in the formation agreement would be change in ownership, that is something that we could do and I'll defer to Bob on where this fits into our overall strategy. Robert K. Steel - Chief Executive Officer and President: Tom, do you want to comment on the basis? Tom Wurtz - Senior Executive Vice President and Chief Financial Officer: All I can say Jefferson, I wish I had somebody to defer to you on that one too, because I don't know the answer to that and I'm sure the IR team can filter [ph] that back to you. Robert K. Steel - Chief Executive Officer and President: I think that in terms of... I'm giving my arms [ph] around the all the strategic questions along with my colleagues but I just think that from our perspective this is a core part of our business in our franchise model, it's worked out well, the collaboration with the Prudential has been good and we are working into that process but we're also always thinking about the what ifs or what coulds, but it is something that view as an attractive business opportunity and it also fits in well with a lot of the other aspects of Wealth Management and Asset Management where we have a great, great potential to build on these existing skills. You look at the breadth of the opportunity and that we're strong and well positioned in so many parts of asset management that [inaudible] to a great business for us to continue to drive and grow and we're quite excited about it. Jefferson Harralson - Keefe, Bruyette & Woods: All right. Thanks a lot, guys.

Your next question will be from Mike Mayo with Deutsche Bank. Michael Mayo - Deutsche Bank: Good morning. Robert K. Steel - Chief Executive Officer and President: Hi, Mike. Michael Mayo - Deutsche Bank: Bob, you are new as CEO, you've had a record in government, many years at Goldman Sachs, you have nothing to defend. What's your view about Wachovia needing to raise additional capital? Robert K. Steel - Chief Executive Officer and President: I think that we've taken what we believe are some really clear and instantly measurable steps of which were hard decisions to reduce the dividend, point one. Point two, we have outlined a series of projects and plans that are in process already that we believe will give us a substantial improvement in our capital ratios. We have other leverage should those not be enough, but I think you can hopefully hear the determination to work through this situation and to the very best of our ability, be thinking about what's best for our shareholders as we work through this. Michael Mayo - Deutsche Bank: So, do I read that to say you are not raising additional capital any time soon? Robert K. Steel - Chief Executive Officer and President: We are raising lots of capital by reducing the dividend, managing our expenses and running our businesses better, and that's the plan for now. Michael Mayo - Deutsche Bank: What about through a common stock issuance? Robert K. Steel - Chief Executive Officer and President: That's not on the plan. We recognize the different costs of capital and was... as I try to describe that we have lots of options for what we can do and while I can't tell you what will unfold, I can tell you that for now that our plans are to improve our capital position by the ways in which was outlined in this presentation. Michael Mayo - Deutsche Bank: And then when you refer to the $4 billion of pre-provision, pre-tax earnings, I guess that's $16 billion of cushion to absorb loan losses each year. Did that factor into your analysis? Robert K. Steel - Chief Executive Officer and President: Mike, absolutely. The fundamental strength of the businesses are evident by that illustration. Now we don't expect not to post a provision and we don't expect that there won't be additional market disruption losses or something else on the horizon that generally comes in a difficult operating environment. But it does give a very strong sense of the core underlying capacity to absorb losses and to build reserves over the intermediate time frame. Michael Mayo - Deutsche Bank: Then my last two related questions, you had $9 billion of notable items, how much more notable items might we see over the next quarter or two? I think we see over $1 billion of reserve bills and Pick-a-Pay based on slide 17. So that might be... when, how much more notable items might you have in the next couple of quarters. And can you reconcile your 11% cum losses on Pick-a-Pay with some of the trading values and some of the securities at like 45% losses?

On the first one Mike, it is certainly impossible to estimate what the notable losses could be in the future. What I'll say is we've taken the actions to reduce exposures which subject us to market volatility. We have addressed in a permanent way, things like the SILO, we've made very substantive additions to legal reserves, the asset security or the security sales or discretionary items. And so therefore we've certainly diminished the universe of things that could coagulate in the future, but it will be bullish for me to sit here today and suggest that we won't have or that all the industry participants won't have additional things that disappoint them. Robert K. Steel - Chief Executive Officer and President: I think Mike, with regard to your second question, I'll invite Don to comment. But I think what we've done in this middle section is described in excruciating detail, we hope in interesting detail and there is even more in the appendix that basically talks about this where we think we're describing how we're viewing this portfolio, we're trying to be forward-looking and straightforward about this and we think our description is consistent with what's appropriate. Don, would you like to add anything? Don Truslow – Senior Executive Vice President and Chief Risk Officer: Bob, just to add to that. We think we've taken a realistic view based upon our current outlook. And I'm not sure how to reconcile it with Mike what you're seeing in the market and certain securities other than the product features and just what may be very portfolio specific. But again we tried to provide lots of information here for investors have a good sense of what is in the portfolio, and how we're thinking about it. Michael Mayo - Deutsche Bank: But when you try to sell some of these assets, what is the liquidity like when you try to sell it... what's the liquidity like today versus say early '07? Robert K. Steel - Chief Executive Officer and President: Well, it is Bob. I'll start again and I will let Don comment. I think that we haven't been selling, we've looked at a variety of ways in which to extract value, manage the portfolio, focus on modifications, refinancings and things like that, and that has been our strategy. Don Truslow - Senior Executive Vice President and Chief Risk Officer: Also, it has been a very illiquid market, and so not sure it makes a whole lot of sense for us to sell portions of the portfolio right now. Robert K. Steel - Chief Executive Officer and President: And there's also the prospect in some cases of converting to conventional products. So I think we have... again a series of alternatives as opposed to just one that might be selling into a stressed illiquid environment. Michael Mayo - Deutsche Bank: Thanks.

Your next question will be from Meredith Whitney with Oppenheimer. Meredith Whitney - Oppenheimer & Co.: Questions, one is specific and one is more general. Of the roughly $315 million reduction in CapEx, can you say what that is as a percentage of total I mean what specific projects will be reduced under that umbrella? That is my first question. Don Truslow - Senior Executive Vice President and Chief Risk Officer: Meredith, just in terms of some of the things as Bob mentioned, we are going to reduce the intensity of the branch expansion. We also... there is a variety of projects that address underlying discretionary infrastructure activities that will be delayed. Just across the company, what you find is that with a company as broad as ours that there are literally hundreds of projects, it is about 500 that will be under review, and each one of those consumes a relatively modest amount of capital. And when you put those on the shelf, I mean you end up saving a very substantial amount. Meredith Whitney - Oppenheimer & Co.: Okay. And just to remind, what percentage of total is that from the CapEx budget? David Carroll - Senior Executive Vice President and Head of Capital: Meredith, this is David Carroll. I sort of oversaw this initiative over the last five weeks, and basically what we did to give a little more detail on it. We took the first six months of this year's actual run rate expenses in the company, and looked at the next 18 months forecast, we've backed out occupancy and incentives, and sought to reduce that in the way that would not impact any ongoing operations, service-quality, cycle times and those kinds of things. The $1.5 billion represents a 9% reduction to the forward spend, and as our forward view would hold it right now or have it right now, actual expenses next year would be below this year's actual... about $200 million, but it is $1.5 billion off of the forward run rate. And Bob covered the composition of that, it is 6,600 existing MTE's, it is canceling 4,400 open positions. Basically we've taken a good bit of growth initiatives that we are in our forward plan out, reflecting the current market environment that we are in. Meredith Whitney - Oppenheimer & Co.: Okay. I guess I was just trying to get in terms of the technology investments and things like that. But if we don't have specific number for CapEx budget, is that what you are saying? David Carroll - Senior Executive Vice President and Head of Capital: The technology component of that is -- Meredith Whitney - Oppenheimer & Co.: Or just more broadly... just as specific CapEx budget? David Carroll - Senior Executive Vice President and Head of Capital: I don't have the total for that, sorry. Meredith Whitney - Oppenheimer & Co.: Okay. Thanks for that. On page 5, this is sort of my broader question, and you review your growth in CD's. My broad question is you guys have a big deposit base, and access to federal home loan borrowing. Why now would you grow what is relatively more expensive, cost of borrowing or why not my point is why wouldn't you go through your core deposit base, why won't you go through Federal Home Loan, FHLB borrowing as your mortgage portfolio growth and things like that? Robert K. Steel - Chief Executive Officer and President: There is a couple of reasons Meredith. First of all, I'd point, we want to meet the needs of existing customers, you can see that 52% of these incremental CDs were sold to our existing customers. It can be useful customer acquisition strategy and you see that roughly more than a third of the CDs were sold to new customers. If you look at the raw rate that's paid you may conclude [inaudible] that's a high incremental cost. However the reality is, customers tend to renew their CDs upon maturity, customers tend to buy other products during the term of the CDs and when you blend those two things then, we think it's very compelling from a financing standpoint as well as building the franchise. So we really don't have any question about the financial attractiveness of the strategy we perceived. Meredith Whitney - Oppenheimer & Co.: So, you would you say that your growth in CDs is a marketing investment, because obviously it's relatively more expensive than your core deposit in HFLB borrowing base? Robert K. Steel - Chief Executive Officer and President: Meredith, let Ben Jenkins jump into here. He can provide some perspective. Benjamin Jenkins - Vice Chairman and President of the General Bank: Meredith, Hi. I would say a couple of things, I'd want to remind you that real deposit focuses on low cost core and we are pleased with low cost core relationship deposits and the growth we are getting there, both in money market and in checking. We see this from a customer acquisition standpoint, optimistically, there are times that we want do it... at times we've don't. As Tom mentioned early in the quarter, we did not and we let because of the pricing, FCGs run down, we thought now it was appropriate from a pricing standpoint and we are offering those CDs attracting a lot of non-customers that we would hope and work to cross sell. 80% of the CDs that we sold have been to new customers and we will work hard to sell those additional products. Meredith Whitney - Oppenheimer & Co.: Okay, fine, thank you. Robert K. Steel - Chief Executive Officer and President: Thank you.

Your next question will be from Chris Mutascio with Stifel Nicolaus. Christopher Mutascio - Stifel Nicolaus & Company, Inc.: I think, Don, I have the quick question for you I believe. If I go to page 17 in the slide, you talk about the updated reserve model for the Pick-A-Pay. If I look at the second half credit cost, I guess, the way I read that, $3.6 billion that's roughly $1.8 billion a quarter, so is it implying a $2 billion reduction in the reserve build for the Pick-A-Pay going forward on a quarterly basis? Don Truslow - Senior Executive Vice President and Chief Risk Officer: Christopher, as part of your question, we see building the reserve by $1.3 billion roughly for the second half of the year. And then as we head into '09 as I mentioned in the comments, we would expect that right now our assumptions would be that we begin to see a leveling out of housing and therefore trailing down of charge-off in 2010, 2011, which would impact the need to either reserve build...build reserves in 2009 or begin releasing reserves in 2009. Christopher Mutascio - Stifel Nicolaus & Company, Inc.: I probably didn't state that correctly, I was looking at second quarter you had about $3.8 billion in credit costs related to Pick-A-Pay, which includes the additional provision. And if we just look at the second half of the year looking at $3.6 billion and divide that by two to get a quarterly run rate, that's $1.8 billion. So it looks like the reserve building certainly will be a significant going forward off of the second quarter level? Don Truslow - Senior Executive Vice President and Chief Risk Officer: That's correct. Christopher Mutascio - Stifel Nicolaus & Company, Inc.: And then, can you also comment, and may be this is a question for Bob, but on that same slide, above model the output does not reflect the anticipated benefit of planned portfolio reduction and other mitigation strategies. Can you provide a little more color on what those strategies might be? Robert K. Steel - Chief Executive Officer and President: Sure. I'll start and then maybe invite some my colleagues, but I think that and the reality is that the news in some case good, in some case different is that we control these assets and they're subject to us doing lots of things with them and whether it's working on modification, refinancing, getting people into different products, government guaranteed, and things like that. But this is an active effort on our part to manage this portfolio for long-term value, and we're going to be doing that with a relentless focus. Anything you want to add to that? Don Truslow - Senior Executive Vice President and Chief Risk Officer: I would just add that as we look at a borrower who is undergoing stress, if that borrower is in a market that we anticipate will substitute decline, we're probably less likely to modify that loan if it isn't apparent that borrowers can have the capacity and the willingness over the immediate horizon to continue to make payments and then we begin to investigate more aggressively, is there an opportunity to encourage a short sale, is there a way to provide assistance to the borrower in terms of a refinance opportunity where we would offer concessions [ph] or offer assistance of buying down the rate on a new purse. So there is a variety of things that we can employ, we're willing to put a wholehearted effort towards it. And at this point, it's just impossible to estimate what the customer response will be to it as we have just essentially gone through them this week. Robert K. Steel - Chief Executive Officer and President: And I think that there is good news and different news and things and the fact that we control them and on our balance sheet and they are regionally concentrated, then it makes it more... it's more efficient or effective for us to think about that. And our goal is not... we are not planning to sell these assets, we're planning just do what we can to realize value over an intermediate period of time. Christopher Mutascio - Stifel Nicolaus & Company, Inc.: Fair enough. Just one follow-up question, this last one. Tom, going back to the first question on the call, if Prudential were to put back the JV to you, you can pay for that in stock rather than to come on in cash? Tom Wurtz - Senior Executive Vice President and Chief Financial Officer: That is correct. Christopher Mutascio - Stifel Nicolaus & Company, Inc.: All right. Thank you very much Tom Wurtz - Senior Executive Vice President and Chief Financial Officer: Thank you.

Your next question will be from Nancy Bush with NAB Research LLC. Nancy Bush - NAB Research LLC: Good morning. Three questions here. Number one, in several places in the slide deck, you mentioned a review and possible sale of non-core assets. Could you just give us some idea of what might be considered a non-core asset and what the timeframe is, you are going to be taking here to make that decision? Robert K. Steel - Chief Executive Officer and President: Well, let's see, I think I can... may be... it's Bob Nancy. I can give you, I think, some idea but probably not as much as you would like. I think the reality is that we are looking at everything and evaluating different activities. But there are certain things and businesses that we have that are not central to what we view as our mission. And we're going to focus on those and try to understand the various alternatives. The reality is too that we described we think a series of rolling activity, some of which are already in process of achieving capital increases by not selling assets. And we are going to focus on those, and I think we'll have more to report in the months ahead as we try to think about these different issues. Nancy Bush - NAB Research LLC: Would these be primarily commercial businesses or assets or if you could just give us some idea of which part of the balance sheet they would becoming from? Robert K. Steel - Chief Executive Officer and President: I think I would really like if you just give me a bit of pause here for me to buy a bit of time. And I think, we'll try to give more context and structure to this in the next couple of months. Nancy Bush - NAB Research LLC: Question for Tom. The ongoing impact of the SILO issue, can you just tell us what that's going to be? We just went through this exercise, the few core things unlike that your approach or your thoughts are on this? Robert K. Steel - Chief Executive Officer and President: It's really quite insignificant as we look forward to next year, I think it's in the neighborhood of the $30 million drag, something like that over the next... till 2009. So it's relatively immaterial for the next four, five years and then finally sometime in the mid-teen years like 2013, 2014, you'll begin to see the recapture of this recast right off which stands over the next 30 years, so it's pretty immaterial to earnings in the intermediate product. Nancy Bush - NAB Research LLC: So we shouldn't be building anything in the margin impact, etcetera, etcetera for the... looking forward. Robert K. Steel - Chief Executive Officer and President: $30 million or $40 million next year is probably, at least holdings. Nancy Bush - NAB Research LLC: Okay. And a question, final question for Ben. Ben, this is your [inaudible], of course, you've got the much discussed 4.25% 12 months CD out there, which seems to be the leader in the CD effort. Can you just tell us what kind of deposits and relationships you've gone on with this thus far? Benjamin Jenkins - Vice Chairman and President of the General Bank: Nancy, I made some reference to that in I think, Meredith's question, we brought in $12 billion or $13 billion in that offering and we've been able... I don't have the figures, we are pleased with our checking sales against that, and I know the number of new customer base was 36% or something like that. So there's a big new customer element there that we can... or it's 80% new customers, so there's a big element of new customers that we can work for cross sales. Already the cross sales on the checking side are good, but I don't have that percentage number. Nancy Bush - NAB Research LLC: Okay. Thank you very much. Robert K. Steel - Chief Executive Officer and President: Nancy, it is Bob again. Hopefully we can give you more information in the not too distant future and I admit to being a bit evasive with question one, but we will work hard to be more constructive and to keep you posted as things unfold. Thanks a lot for your patience.

Your next question will be from Ed Najarian with Merrill Lynch. Edward Najarian - Merrill Lynch: Nancy and Mike pretty much asked my main questions. So I guess, I just have one more question for Don. Could you give us some idea to what extent the $12 billion or the $11.9 billion in non-performing assets have been written down to fair market value? Just broadly, don't need it category by category, but just to what extent should we anticipate or think about additional losses coming from what's already on NPA status? Don Truslow - Senior Executive Vice President and Chief Risk Officer: Yes Ed, it's very good question. And on slide 42, there is a bar graph that basically outlines the non-performs related to the Pick-a-Pay portfolio. So, just under $7 billion shown here, and this wouldn't include the other real estate, and so you can see out of this portfolio, there's about $500 million or so that it's already been written down, and then of the $3 billion, $3.5 billion of commercial non-performs, roughly speaking between what we have specifically reserved and FAS 114 reserves or written down, the combination of those two things would be kind of in the 25% to 30% range roughly, where we've already basically recognized the credit costs. I don't know if that helped or not, I don't have a lot on top of my head, the... what would make up the reminder, but that would be roughly $10 billion or so of total of $12 billion. Edward Najarian - Merrill Lynch: And I guess I was a little bit confusing. What would be $10 billion of the $12 billion? Robert K. Steel - Chief Executive Officer and President: Well, the matter is that, what I've just mentioned to about Pick-a-Pay is about $7 billion and then the commercial non-performs was a little over $3 billion. The total of those two, $7 billion and $3 billion would be about $10 billion, $12 billion of the total non-performs. So I just don't know... it came at the top of my head what, how to mention the other $2 billion. Tom Wurtz - Senior Executive Vice President and Chief Financial Officer: So, [inaudible] given attribution to 10 or 12 and if you... and we can get you more detail on the other two. Edward Najarian - Merrill Lynch: Okay. So just maybe to isolate that 10 of the 12, it sounds though like there could be some fairly material additional write downs or charges may be is a better... or charges against the existing reserve related to that $10 billion. Is that a fair assessment? Robert K. Steel - Chief Executive Officer and President: Edward, we just have to see as things unfold, but obviously part of the $4.2 billion reserve bill would include our view of remaining a loss content in our non-perform portfolio. Edward Najarian - Merrill Lynch: Great. How would that go against existing reserves, but in your mind, not really come through future provisions? Robert K. Steel - Chief Executive Officer and President: That would all depend upon our evaluation of the allowance in the future periods, again our evaluation of the lost content of the portfolio at the time. Edward Najarian - Merrill Lynch: Okay, all right. Thank you. Robert K. Steel - Chief Executive Officer and President: Tom, did you want to add something? Tom Wurtz - Senior Executive Vice President and Chief Financial Officer: Ed, clearly the reserve that we have for the Pick-a-Pay portfolio reflects the losses we expect in the existing non-perform portfolio as well as the entire performing portfolio. Right now the reserves or the charge offs that have been taken against the NPAs are something less than 10% of the NPAs we've been experiencing severities in mid-30s, so with every one of those loans went through and experience something similar, and they'll be somewhere around $1 billion more to take and that was incorporated into the existing reserve delta. Edward Najarian - Merrill Lynch: Okay, okay. Yes, that's very helpful. Thank you. Robert K. Steel - Chief Executive Officer and President: Great, thank you.

Your next question will be from Todd Hagerman with Credit Suisse. Todd Hagerman - Credit Suisse: Good morning everybody. Just a couple of questions. Just in terms of deleveraging the $20 billion EBITDA identified, if you could just give us a sense of the mix between just in terms of the existing securities run off as well as how you are thinking between the consumer commercial portfolio. And specifically assuming again that there is something specifically been identified, any potential for impairment that is coming down the road? Robert K. Steel - Chief Executive Officer and President: Tom you want to start? Tom Wurtz - Senior Executive Vice President and Chief Financial Officer: When you speak of impairments, are you referring to goodwill impairment? Todd Hagerman - Credit Suisse: No, no. Just in terms of the prospects for loan sales or asset sales, if you will, presumably the $20 billion figure has something specific identified? Robert K. Steel - Chief Executive Officer and President: Yes, it doesn't anticipate sales at this point. As you can imagine starting out with the $127 billion Pick-a-Pay portfolio with no new origination, and the absence of a prepayment penalty as a disincentive. We've been experiencing prepayments of around 12% to 14% over the last several months. So you can do the math there to figure out what the impact there would be. We also think that given the core volume was related to the way the prepayment penalty that will stimulate, in at least in the near-term a higher prepayment rate. We have alluded to the fact that we're going to be very aggressively trying to interact with customers to identify refinance or short sell opportunities for them. And then, in the securities portfolio, maturities probably will be somewhere around $5.5 billion to $6 billion over the remainder of the year so that gives you a good starting point. And then across the franchise, again as we look at all our relationships and that is whether they're... a core relationship with many aspects to it or whether it's credit only we have the opportunity for non-renewals, and by uprising of incremental credits, that will also provide some relief on the inflow side. So I think we feel pretty good about the ability to achieve this over the remainder of the year. Todd Hagerman - Credit Suisse: And so, right now Tom, you don't anticipate a specific loan portfolio or package sale? Tom Wurtz - Senior Executive Vice President and Chief Financial Officer: The $20 billion does not kind of play that. Now, marketing conditions may change such that that is attractive right now that would not be something that would be on the table. Todd Hagerman - Credit Suisse: Okay. And then just secondarily going back to Don and your earlier comments you indicated that you have taken certainly a more negative view of housing since the first quarter and that's certainly reflected in the reserve methodology in your assumptions there. But I guess at this stage of the game, it's certainly it's fair to assume that this is getting worse. But why could this not very well change in the coming quarter or so, and what gives you kind of comfort at this stage that the 12% cumulative [ph] loss assumption, if you will is kind of the right number? Don Truslow - Senior Executive Vice President and Chief Risk Officer: Todd, well, it's a very dynamic market and like everybody else we will adjust as things unfold. But we think we have got what is a very realistic outlook based upon what we're seeing on the ground and from other sources and our economists and so we feel that the actions we took at the end of the second quarter were very, very appropriate and that reserve is adequate. There are some out in the market that are talking about a potentially more pessimistic view and some that are talking about more optimistic view and I think it's just a reflection of -- it's being a very dynamic market and very impressive environment. Robert K. Steel - Chief Executive Officer and President: And I think Todd, it is Bob that if you look at page 15 to 16 in the appendices, you can model off of our assumptions. And we try to take a balanced perspective given the environment, and we have also tried to be very transparent as to how we're thinking about it, and allow you to challenge the model in different ways yourself, and we will continue to do the same thing too, consistent with what we see in the market. Todd Hagerman - Credit Suisse: Terrific. Thanks for the color.

Your next question will be from Matthew O'Connor with UBS. Matthew O’Connor - UBS: Hi, guys. I might have missed this. But what is the deferred interest for the Golden West portfolio, any risk of reversals there? Robert K. Steel - Chief Executive Officer and President: And that... search for the... Tom Wurtz - Senior Executive Vice President and Chief Financial Officer: $3.8 million... $2.8 billion Matt. And when you say is there a risk of reversal, I would just say that it adds to the principal balance of a loan, it is that particular loan with a deferred interest balance and then there is no difference than any other aspect of the principal balance. Don Truslow - Senior Executive Vice President and Chief Risk Officer: And Matt this is Don, in the appendix on page 30...43 there is a schematic that outlines the breakdown of deferred interest. And deferred interest at the end of the quarter represent just a little over 3%, and that's been relatively consistent over the last few quarters. Matthew O’Connor - UBS: Okay. That's helpful. And then kind of a bigger picture question. I know it is tough to look out a few years here, as you think about the balance sheet and lot of the Golden West portfolio runs off and shrinks into other areas how would you expect to reinvest some of those assets to get freed up or should we expect $100 billion or $150 billon deleveraging, over the next few years. Robert K. Steel - Chief Executive Officer and President: It's Bob again. I just feel like... I'd like to speak to that issue after a bit more time. We're really focused here on dealing with the challenges with the credit issues that we've raised, number one, and number two making sure that these strong business franchises get managed and that we set the stage for continued growth where we have so many opportunities. And I think as we... and this is probably my fault, I just feel like I need to have a better understanding to give you a more complete answer. But in the sake, in the spirit of full disclosure, we'll be talking about that in the months ahead. But I just ask to back off a bit, so I said our key focuses are working on our balance sheet and making sure these strong business franchises get the right attention they deserve. Matthew O’Connor - UBS: Yes, fair point. Just lastly, is there any benefits to moving the Golden West portfolio to discontinued operations? Robert K. Steel - Chief Executive Officer and President: I suppose the only benefit, I would have to check to see whether that is something we could do, but the only benefit would be that it moves it away from the general bank to provide more clarity and it makes the schedule that we showed on the page with and without mortgage in the general bank unnecessary, but that's something we'll give some considerations to math. Don Truslow - Senior Executive Vice President and Chief Risk Officer: Yes, I think that where it is, is a state of mind. We are focused basically on making sure we understand it that we have the realistic expectations and that we do our very best to achieve the best outcomes from the portfolio of assets that we own on our balance sheet in a concentrated area, which gives us lots of alternatives, and that's our focus. Okay, thanks very much.

Your next question will be from Brian Foran with Goldman Sachs. Brian Foran - Goldman Sachs: Good morning. Yes, I think that's the most loss estimates for option ARMs, they partially lie on the fact that most borrowers are making the minimum payment and thus eventually will hit the LTV recast and also an assumption that most borrowers who recastle eventually fall. Do you have what percentage of Pick-a-Pay borrowers are currently making the minimum payment. And then secondly, if we just look at that Pick-a-Pay borrowers who've hit the LTV recast to date realizing it's a small piece of the overall group, what is the frequency of the fall for those borrowers? Robert K. Steel - Chief Executive Officer and President: Sure. We've got that here. Give us just a second to get to the right page and then we can refer you to it. Don Truslow - Senior Executive Vice President and Chief Risk Officer: Brian, this is Don. We are looking in the appendix, page 40 would address the pattern of recast, Brian, which I think would probably give people a fair sense of comfort in terms of what would be subject to recasts based on the 125% balance limitation. And for anyone that doesn't have the deck in front of them, basically it's $7.5 million in 2009, $20 million in 2010, $85 million in 2011 and about $650 million when we out to 2012. It's probably worth also noting that in the modeling, it assumes that when somebody loses their equity, they go to the minimum pay option. So, that is embedded in the credit modeling. Brian Foran - Goldman Sachs: And what would be the frequency you have to follow for people who hit the recast? Don Truslow - Senior Executive Vice President and Chief Risk Officer: There have been so few that have actually hit the recast... who would be measured like a hundred people in history, something that we have been evidence of. Robert K. Steel - Chief Executive Officer and President: We can check on and if you have questions feel free to follow-up with Don or Tom or myself directly. Brian Foran - Goldman Sachs: Great, thank you.

Your next question will be from Ron Mandel with GIC Ron Mandel - GIC: I was just wondering, Tom, about your comments in the outlook for the net interest margin or net interest revenue likely to be down from the adjusted first half level, and obviously, I see the decline in assets you're talking about, but I was wondering if you can talk about the margin and why the margin might not offset almost the asset run? Tom Wurtz - Senior Executive Vice President and Chief Financial Officer: Well, we're going to have the continued drag of an increase in NPAs, Ron, which gives these folks obviously, right now we're having $12 billion of assets that went up during the yield on, we still haven't fund those, and then as margin [inaudible] incrementally goes non performing, you lose the coupons on it. So that's... that's really the biggest drag. Ron Mandel - GIC: I guess, I just would have thought that you already have a lot of non performers, so then you have margin improvement this quarter. So, I guess, that's why I was asking the question. Tom Wurtz - Senior Executive Vice President and Chief Financial Officer: Well, all I can tell you this is our best guess as to what will occur, just wanted to provide now really rosy sort of expectations that we've been hit, this is what we believe. Ron Mandel - GIC: And in terms of positioning for how rates have changed and how they might change, have you changed your positioning in that regard? Tom Wurtz - Senior Executive Vice President and Chief Financial Officer: Well, we are relatively neutral through year-end, and then we would be liability sensitive in 2009, and I would say right now, the four incurs are consistently built in, relatively aggressive rate hikes, and therefore we're considerably locked in the current rates because they are just in the core markets. We think the likelihood that rates move a 100 basis points more than that to be relatively modest based on everything we see today. Ron Mandel - GIC: Okay, thanks. Tom Wurtz - Senior Executive Vice President and Chief Financial Officer: Sure.

Your next question will be from Betsy Graseck with Morgan Stanley. Betsy Graseck - Morgan Stanley: Thanks, good morning. On the page 26, when you talk about the $20 billion reduction, I guess just want to confirm that most of that reduction in long-term securities you're anticipating through roll off, is that correct? Robert K. Steel - Chief Executive Officer and President: Yes, the vast majority would be. Betsy Graseck - Morgan Stanley: Okay. And then since you're just continuing these various channels of mortgage origination, I just wanted to understand what you are expecting for your total mortgage book, I mean, I'm assuming that you're not... since you're active and trying to renegotiate and restructure some of these loans into more conventional loans. And I think that you are looking over teams some of that's for your balance sheet, I'm just trying to understand how large do you see your mortgage book being over the course of the next year or two? Robert K. Steel - Chief Executive Officer and President: I'd just offer a general observation, and that is that with respect to the existing mortgage business, it's really going to be focused, it's going to be a customer-centric model serving the needs of the general banking, wealth management, and Wachovia securities customers. Therefore I would anticipate that that would produce much growth in terms of our initiatives as we work with pick-a-pay customers, our primary objective would be to refinance them into, perhaps the government product where the vast majority of those would be securitized. And so, we may end up with some on our portfolio, but in general, I think you can probably for modeling purposes assume that whatever success we have is evidenced by the balance going away from the company. Betsy Graseck - Morgan Stanley: So you have roughly $120 billion of negative amortization loans. We would, you suggested that we should anticipate that that's primarily and roll off the entire portfolio? Robert K. Steel - Chief Executive Officer and President: Absolutely. Betsy Graseck - Morgan Stanley: Okay. So then when you're speaking about the ... have you anticipate the losses within that portfolio of migrating as the portfolio is rolling off. Robert K. Steel - Chief Executive Officer and President: Well, Jonathan [ph] a pretty good job of giving you a view as to what our future credit expectations are in terms of both charge-off as well as over provisioning through the end of 2009. What I would say is, there is nothing explicitly built in for whatever success we have in working with borrowers to refi them and tell their product. There is always the chance that as we look at a borrower, we would have anticipated a loss, that was going to occur in 2010, we take action today which incurs a credit cost that we experience today. And therefore there is some asymmetry between the reserves we had built and the current credit cost. Alternatively, it's just as likely that we've taken action with a customer that wasn't explicitly provided a foreign reserve and we favor or sell something. So I don't think it's going to be at this point something that causes people to need to model credit cost differently because of our outward actions with customers. And as we experience the customer reaction will that help let people know what it is. Betsy Graseck - Morgan Stanley: And as you think about that portfolio, rolling off overtime, I mean, how have you thought about the kind of capital requirements for that portfolio relative to a regular loan portfolio where you are building, growing that portfolio overtime? Do you think that the capital requirement as differently? Don Truslow – Senior Executive Vice President and Chief Risk Officer: Well, certainly this portfolio is more capital intensive as evidenced by the credit losses that we are experiencing. In the near-term, I think where we... what we are focused on is building our capital ratios and I think for the foreseeable horizon just growing capital ratios to the greatest extent we can is what we're focused on. And if I mentioned at some point, we will revisit whether redeploying some of the freed up capital is appropriate thing to do. But in the near term you should think of just harboring that capital as the balance sheet declines from that portfolio. Robert K. Steel - Chief Executive Officer and President: It's Bob Steel. I think too I push pause and buy a bit of time here. One of the things we spend a lot of time talking about is the right allocation of our capital in terms of the asset to support and how to think about that. And that will be a project that we focus on and we'll look forward to reporting into you [ph] in the not too distant future. But you raised a good point and it has our focus. Betsy Graseck - Morgan Stanley: Okay. And at this stage you haven't changed your capital targets, is that correct? Robert K. Steel - Chief Executive Officer and President: No. Betsy Graseck - Morgan Stanley: Okay. All right, thank you.

Ladies and gentle, we have reached the allotted time for question. Your last question will be from Gerard Cassidy with RBC Capital Markets. Gerard Cassidy - RBC Capital Markets: Thank you. Good morning. Don, can you us some color on the non-performing assets in the commercial, finance and agriculture line. Then also in the commercial real estate non-performers of 2.2 billion, what percentage were construction loans versus commercial real estate mortgages? Don Truslow - Senior Executive Vice President and Chief Risk Officer: On the commercial real estate, the vast majority of the commercial real estate non-performs would be out of that 11, $12 billion builder residential related books. So those would be in the category of loan to builders or land. So mostly you can think about it in the construction arena, but land would also be a fairly significant component as well. And then on the remainder of the commercial... of the C&I side, there is really... part of your question is there's really not an underlying pattern or theme to the credits that we have... had go non-perform from an industry standpoint. They tend to be a little more one-off, maybe a little more oriented toward credits that have some tie to real estate such has build and supply and companies that service the real estate business, but there is not really a discernible underlying kind of industry [inaudible]. Gerard Cassidy - RBC Capital Markets: And sticking with the commercial loans on the NPAs. Can you give us any color, I believe the shared national credit exam has just ended. Any color on what you're hearing from that? Don Truslow - Senior Executive Vice President and Chief Risk Officer: My sense is that the OCC and the system and the Fed have taken a very, very thorough look given just concerns that they have about the economy and where the credit cycle is unfolding and so, pretty thorough review. We are very pleased with the outcomes of our portfolio, and I guess it will be some time in the third quarter, maybe early third quarter when they typically released the overall industry portfolio statistics. So it will be interesting to see what those look like. Gerard Cassidy - RBC Capital Markets: And then finally, Bob obviously you've hit the ground running. And are you planning to do any long-term strategic planning in the next three to six months how to position Wachovia for the future and should we expect some sort of announcement regarding that at some point in the future? Robert K. Steel - Chief Executive Officer and President: Well I think you are leading me in the right direction. I think that it has been great to get here and to work with the team. And our focus as I have said near-term is to deal with the challenged assets, which we accept responsibility for and to work through those issues, and ensure that our balance sheet is strong and that we're marshalling our capital in the right way. The second issue is to make sure we focus on these very, very strong of core franchises that we have, which are doing pretty darn well. And we really want to focus on our customers, and our clients and our colleagues to make sure we continue to execute very strongly in those areas. Once we get through that stage, we are all looking forward here at Wachovia to sitting down and looking at what we have learned, and where we should position the company for the longer-term. And as I have said earlier, we'll be very open and transparent as we work those issues and look forward to speaking to you as they become more clear. Gerard Cassidy - RBC Capital Markets: Thank you. Robert K. Steel - Chief Executive Officer and President: Great. I think that's it and so again let me just say thanks to everyone for providing your time. I know how busy you are especially on a day like today with so many different calls and comments. This was an important call for Wachovia, and we appreciate you giving attention to all the things we are working so hard on. Thank you so very much.

This concludes today's conference call. Thank you for participating. You may now disconnect.