| Filed by Wachovia Corporation pursuant to Rule 425 under the Securities Act of 1933, as amended, and deemed filed pursuant to Rule 14a-12 under the Securities Exchange Act of 1934, as amended
Subject Company: Golden West Financial Corporation
Commission File No.: 1-4629
Date: May 16, 2006 |
This filing may contain certain forward-looking statements with respect to each of Wachovia Corporation (“Wachovia”) and Golden West Financial Corporation (“Golden West”) and the combined company following the proposed merger between Wachovia and Golden West (the “Merger”), as well as the goals, plans, objectives, intentions, expectations, financial condition, results of operations, future performance and business of Wachovia, including, without limitation, (i) statements relating to the benefits of the Merger, including future financial and operating results, cost savings, enhanced revenues and the accretion/dilution to reported earnings that may be realized from the Merger, (ii) statements relating to the benefits of the merger between Wachovia and Westcorp and Wachovia’s related acquisition of WFS Financial Inc (“WFS Financial”), a subsidiary of Westcorp, completed on March 1, 2006 (the “Westcorp Transaction”), including future financial and operating results, cost savings, enhanced revenues and the accretion/dilution to reported earnings that may be realized from the Westcorp Transaction, (iii) statements regarding certain of Wachovia’s and/or Golden West’s goals and expectations with respect to earnings, earnings per share, revenue, expenses and the growth rate in such items, as well as other measures of economic performance, including statements relating to estimates of credit quality trends, and (iv) statements preceded by, followed by or that include the words “may”, “could”, “should”, “would”, “believe”, “anticipate”, “estimate”, “expect”, “intend”, “plan”, “projects”, “outlook” or similar expressions. These statements are based upon the current beliefs and expectations of Wachovia’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. These forward-looking statements involve certain risks and uncertainties that are subject to change based on various factors (many of which are beyond Wachovia’s control).
The following factors, among others, could cause Wachovia’s financial performance to differ materially from that expressed in such forward-looking statements: (1) the risk that the businesses of Wachovia and/or Golden West in connection with the Merger or the businesses of Wachovia, Westcorp and WFS Financial in connection with the Westcorp Transaction will not be integrated successfully or such integration may be
more difficult, time-consuming or costly than expected; (2) expected revenue synergies and cost savings from the Merger or the Westcorp Transaction may not be fully realized or realized within the expected time frame; (3) revenues following the Merger or the Westcorp Transaction may be lower than expected; (4) deposit attrition, operating costs, customer loss and business disruption following the Merger or the Westcorp Transaction, including, without limitation, difficulties in maintaining relationships with employees, may be greater than expected; (5) the ability to obtain governmental approvals of the Merger on the proposed terms and schedule; (6) the failure of Wachovia’s and/or Golden West’s shareholders to approve the Merger, respectively; (7) the strength of the United States economy in general and the strength of the local economies in which Wachovia and/or Golden West conducts operations may be different than expected resulting in, among other things, a deterioration in credit quality or a reduced demand for credit, including the resultant effect on Wachovia’s and/or Golden West’s loan portfolio and allowance for loan losses; (8) the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; (9) potential or actual litigation; (10) inflation, interest rate, market and monetary fluctuations; and (11) adverse conditions in the stock market, the public debt market and other capital markets (including changes in interest rate conditions) and the impact of such conditions on Wachovia’s capital markets and capital management activities, including, without limitation, Wachovia’s mergers and acquisition advisory business, equity and debt underwriting activities, private equity investment activities, derivative securities activities, investment and wealth management advisory businesses, and brokerage activities. Additional factors that could cause Wachovia’s and Golden West’s results to differ materially from those described in the forward-looking statements can be found in Wachovia’s and Golden West’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the SEC. All subsequent written and oral forward-looking statements concerning Wachovia or the proposed Merger or other matters and attributable to Wachovia or Golden West or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements above. Wachovia and Golden West do not undertake any obligation to update any forward-looking statement, whether written or oral, relating to the matters discussed in this filing.
The proposed Merger will be submitted to Wachovia’s and Golden West’s shareholders for their consideration. Wachovia will file a registration statement, which will include a joint proxy statement/prospectus, and Golden West will file a proxy statement, and each of Wachovia and Golden West may file other relevant documents concerning the proposed Merger with the SEC. Shareholders are urged to read the registration statement and the joint proxy statement/prospectus regarding the proposed Merger when they become available and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information. You will be able to obtain a free copy of the joint proxy statement/prospectus, as well as other filings containing information about Wachovia and Golden West, at the SEC’s website (http://www.sec.gov). You will also be able to obtain these documents, free of charge, at Wachovia’s website (http://www.wachovia.com) under the tab “Inside Wachovia – Investor Relations” and then under the heading “Financial Reports - SEC Filings”. Copies of the joint proxy statement/prospectus and the SEC
filings that will be incorporated by reference in the proxy statement/prospectus can also be obtained, free of charge, by directing a request to Wachovia Corporation, Investor Relations, One Wachovia Center, 301 South College Street, Charlotte, NC 28288-0206, (704)-374-6782; or to Golden West, Attn: Investor Relations Department, 1901 Harrison Street, Oakland, CA 94612, (510) 445-3420.
Wachovia and Golden West and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Wachovia and/or Golden West in connection with the proposed Merger. Information about the directors and executive officers of Wachovia is set forth in the proxy statement for Wachovia’s 2006 annual meeting of shareholders, as filed with the SEC on a Schedule 14A on March 13, 2006. Information about the directors and executive officers of Golden West is set forth in the proxy statement for Golden West’s 2006 annual meeting of shareholders, as filed with the SEC on a Schedule 14A on March 10, 2006. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the proxy statement/prospectus regarding the proposed Merger when it becomes available. You may obtain free copies of these documents as described in the preceding paragraph.
THE FOLLOWING PRESENTATION WAS USED IN A MEETING WITH ANALYSTS AND OTHERS.
Wachovia Corporation
UBS Global Financial Services Conference
May 16, 2006
Ken Thompson
Chairman and CEO
Delivering sustainable growth
Sustainable growth driven by focus on organic growth supplemented by financially sound and strategic acquisitions
Organic growth resulted in strong momentum in 1Q06
– Record revenues on strong fee growth
– Operating EPS growth of 9%*
Organic growth sustained by reinvesting 30-50% of efficiencies
Golden West Financial provides attractive retail franchise expansion opportunities
*Represents net income available to common shareholders before merger-related and restructuring expenses, cumulative effect of a change in accounting principle, and preferred dividends.
Page 1 – #4623, UBS
Delivering sustainable growth
Disciplined execution = Strong organic earnings growth
1Q06 vs. 1Q05 Growth
General Bank
14% 21%
Capital Management
11% 24%
Wealth Management
16% -5%
Corporate and Investment Bank
11% 3%
Revenue Earnings
*Segment earnings exclude merger-related and restructuring expenses.
Page 2 – #4623, UBS
Superior customer service and loyalty drive organic growth
2005 American Customer Satisfaction Index
WB led survey for the 5th year in a row
Top 10 among all retailers
Score
2005 vs. 2000
Wachovia 79 +19.7%(#1)
All Others 78 +8.3%
Bank of America 72 +14.3%
JPM/Bank One 70 0.0%
Wells Fargo 67 0.0%
Percentage Loyal Customers*
43.2% 47.0% 49.9% 50.8% 55.0%
1Q03 1Q04 1Q05 1Q06 2006
Goal
*Data is from independent studies conducted with customers who transact in our Financial Centers. Definition of a loyal customer is a customer who rates Wachovia a 7 in all three loyalty questions – satisfaction with Wachovia, likelihood to recommend, and likelihood to repurchase – (scale of 1-7).
Page 3 – #4623, UBS
General Bank sales management practices drive organic growth
Same Store Sales Production*
($ in thousands)
Deposit Production per Branch
+23%
$3,765 $4,625
1Q05 1Q06
Loan Production per Branch
+20%
$2,951 $3,549
1Q05 1Q06
*Same store sales production defined as production generated by a branch that has been open for a minimum of three years in the legacy Wachovia franchise.
Deposits defined as FAB 5 plus CDs.
Loans defined as Big 3 loans.
Revenue* per Financial Center
($ in thousands)
+15%
$657 $706 $733 $748 $756
1Q05 2Q05 3Q05 4Q05 1Q06
*Total Retail & Small Business revenue.
1Q06 results exclude Westcorp and Card.
Page 4 – #4623, UBS
GBG leveraging a powerful sales culture drives growth
Strong sales culture drives revenue and balance sheet growth
High branch productivity as a result of best-in-class sales management and execution
Success drivers include consistent sales processes, incentives, coaching, and targeted customer data
Legacy Wachovia Loan Production as a % of Legacy FTU Branches at Merger
+72%
25% 43% 116%
Merger 1 yr post-merger (Merger*) < 4 yrs post-merger (Merger*)
*Legacy Wachovia production as a percentage of legacy First Union production at the time of the merger, 3Q01.
Legacy SouthTrust Loan Production as a % of Legacy WB Branches at Merger
+105%
22% 45%
Merger 1 yr post-merger (Merger*)
*4Q05 legacy SouthTrust production as a percentage of legacy Wachovia production at the time of the merger, 4Q04.
Page 5 – #4623, UBS
Capital Management focus on managed accounts drives organic growth
Managed Account Assets as a % of Total Client Assets
11% 13% 16% 17% 20-25%
Managed Account Assets ($ in billions)
$68 $82 $106 $120
2003 2004 2005 1Q06 2007
Goal
Recurring Revenues as a % of Total Revenues
39% 50% 55% 57% 70%
Recurring Revenues* ($ in billions)
$1.3 $2.1 $2.3 $0.7
2003 2004 2005 1Q06 2007
Goal
*Excluding referral fees
Page 6 – #4623, UBS
Wealth Management’s focus on relationship management drives organic growth
Quarterly Balances
($ in millions)
Core Deposits
+9%
$13,303 $14,557
1Q05 1Q06
Loans
+21%
$12,829 $15,526
1Q05 1Q06
Assets Under Management
($ in billions)
+6%
$64.6 $64.9 $65.6 $65.6 $68.3
1Q05 2Q05 3Q05 4Q05 1Q06
Page 7 – #4623, UBS
CIB’s focus on building corporate lead relationships drives organic growth
Net New Lead Relationships*
+79%
14 25 22 25
1Q03 1Q04 1Q05 1Q06
*Net new lead relationships that have generated fees.
Syndication Volumes* generated by net new lead relationships
($ in billions)
+250%
$3.6 $6.3 $10.4 $12.6
1Q03 1Q04 1Q05 1Q06
*Based on syndication lead deal dollar volumes.
Page 8 – #4623, UBS
CIB’s market share gains drive organic growth
Wachovia Market Share
(based on lead deal $ volumes)
1.3% 3.5% 4.0%
TOTAL
0.0% 0.7% 1.2%
Converts
0.2% 2.8% 6.8%
Equity
0.3% 5.4% 6.9%
High Grade
0.5% 2.9% 3.1%
High Yield
3.0% 6.0% 7.4%
Loan Syndications
0.2% 3.2% 3.2%
M&A
0.0% 6.7% 10.3%
Preferreds
2000 2005 1Q06
2000 market share is combined legacy First Union and legacy Wachovia.
Sources: Converts (Bloomberg), Equity (EquiDesk), High Grade excluding self issuance (Bloomberg), High Yield (Bloomberg),
Loan Syndications (Loan Pricing Corporation), completed M&A deals (Thomson Financial), Preferreds (Bloomberg).
Page 9 – #4623, UBS
Wachovia’s focus on cross-enterprise sales management drives organic growth
Wachovia Client Partnership strategy drives wealth, wholesale and retail opportunities
WCP Revenue
($ in millions)
$30 $116 $180 Goal $54 $750 Run-rate
2003 2004 2005 1Q06 2007
New Revenue Production Opportunity
Partnership Revenue Opportunity
Retail to and from Wealth
Commercial to and from Wealth
CIB to and from Wealth
Product Cross-selling Initiatives
Page 10 – #4623, UBS
Overhead efficiency* improvement allows investing for sustainable growth
63.6% 59.1% 60.6% 60.0% 58.0% 57.8% 52 - 55%
2001 2002 2003 2004 2005 1Q06 2007 Goal
*Overhead efficiency ratio excludes merger-related and restructuring charges, changes in accounting principle and intangible amortization.
2007 not a projection; results may differ from expectations for a number of reasons.
Page 11 – #4623, UBS
Investing for sustainable growth
Sustainable growth through organic growth opportunities
Credit Cards
Focused marketing to WB’s 11 million retail and small business households
– Lower marketing and credit costs; higher revenue/customer — breakeven in early-mid 2007
– Not a nationwide or mass mail model
– Expected to grow to modest size given relationship focus
Sustainable growth through financially sound and strategic acquisitions
Auto Loans
Westcorp acquisition closed March 2006
– $13 billion in owned auto loans; average life 2.8 years
– 9th largest originator; relationships with 11,000 dealers and 1.2 million indirect customers
Retail Franchise Expansion
Golden West Financial acquisition announced May 7, 2006
Page 12 – #4623, UBS
Golden West acquisition
Another combination with a best-in-class partner
Extends retail and small business distribution into high growth, high wealth markets
Complementary mortgage models produce scale and significant new revenue opportunities
Meets our financial parameters with modest cost saves and no revenue synergies
Merger integration is less complicated than typical deal of this size
Page 13 – #4623, UBS
Accelerates retail momentum in high growth markets driving sustainable growth
Strategic Rationale
Expands high growth opportunities
– Accelerates California presence and expands entry into high-growth states – become Top 5 bank in Western U.S.
– Solidifies national consumer lending presence with #7 mortgage banking market share
Diversifies Wachovia’s balance sheet into higher yielding low risk assets
– Consumer loans / total loans increases to 62%
– Reduces normalized charge-off ratio
Financially Attractive
Accelerates long-term growth rate
Accretive to cash EPS in second year
IRR of 17%
Analysis based on achievable assumptions
Compelling revenue synergies not included in financial model
Low Risk Transaction
Complementary sales and service focused model
Strong credit culture and pristine credit quality
Straight-forward and simple systems environment
Assumptions validated by recent, highly successful integration history
Page 14 – #4623, UBS
Combination strengthens Wachovia’s retail franchise, business mix and growth profile
Retail Franchise
Golden West Contribution
Combined Company
Scaled branch presence in attractive markets, particularly CA
Broader footprint with enhanced demographic profile
National mortgage origination platform
Top 10 national mortgage originator
Business Mix
Exclusive focus on retail customer
Increases General Bank contribution to Wachovia earnings
Low risk $121 billion consumer loan portfolio
Improves credit risk profile
Growth Profile
Proven business model
Ability to integrate operations selectively in best interests of customers and shareholders
12% consensus earnings growth rate
Accretive to Wachovia’s expected 10% earnings growth rate
Branch presence in Wachovia target markets
Accelerates California and Texas branch strategy
Page 15 – #4623, UBS
Combination strengthens Wachovia’s retail franchise, business mix and growth profile
WB’s 2005 Segment Earnings* $6.8 billion
57% General Bank
9% Capital Management
4% Wealth Management
25% Corporate & Investment Bank
5% Parent
Mortgage-Related Earnings
Combined Pro Forma** $8.3 billion
65% General Bank
7% Capital Management
3% Wealth Management
21% Corporate & Investment Bank
4% Parent
Mortgage-Related Earnings
Mortgage Contributes an Estimated 15%*** of Combined Pro Forma Earnings
*Represents 2005 segment earnings prepared under generally accepted accounting principles; excludes merger-related and restructuring expense which equaled $167 million after-tax over this period. (Wachovia’s 2005 GAAP net income available to common shareholders was $6,623 million.)
**Based on estimated segmentation of Golden West’s earnings for year ended 12/31/05.
***Includes estimated earnings from Wachovia’s investment mortgage portfolio.
Page 16 – #4623, UBS
Combination strengthens Wachovia’s retail franchise and growth profile
5.9% combined national market share
High growth / high wealth markets
– 8.8% projected population growth in core markets vs. 6.3% US average (1)
– $91K average household income vs. $61K US average (2)
Creates Top 5 bank in Western U.S.(3)
– # 6 pro forma rank in California
Wachovia financial centers
Wachovia Securities
Wachovia Mortgage
World Savings Bank financial centers*
World Savings Bank Mortgage*
*whose parent, Golden West Financial, has a pending agreement to merge with Wachovia
Source: SNL Financial as of 6/30/05.
1. Deposit weighted 5 year average population, county-weighted by deposits.
2. Deposit weighted income by zip codes.
3. Includes CA, NV, AZ, CO, NM, WA, OR, UT, ID, MT, WY and TX.
Page 17 – #4623, UBS
Combination strengthens Wachovia’s retail franchise, business mix and growth profile
WB Mortgage
2005 production: $55.3B*
– Predominantly East Coast retail focus
Introduce Option ARM product
– Underwriting to be handled by GDW platform
Deepen and enhance relationships with:
Wholesale brokers
Realtors
Builders
Financial planners
Retail customers
GDW Mortgage
2005 production: $51.5B
– Predominantly West Coast focus
Introduce fixed rate and conforming ARM products
– Underwriting to be driven by WB platform
Deepen and enhance relationships with:
– Wholesale brokers
– Realtors
– Builders
– Financial planners
– Retail customers
*Includes AmNet production; acquisition closed December 2005.
Page 18 – #4623, UBS
Focus on corporate priorities drives sustainable growth
Corporate Priorities
Maintaining employee engagement
Building customer loyalty
Executing revenue growth strategies
Improving cost structure and operating efficiencies
Focus on financial strength and corporate governance
Successful integrations
– Westcorp
– Golden West Financial
Page 19 – #4623, UBS
Appendix
Page 20 – #4623, UBS
Conservative acquisition assumptions drives sustainable growth
Fixed Exchange Ratio shares for each GDW
Each GDW share receives 1.051 WB shares plus $18.65 in cash (15% premium to market*)
EPS Assumptions/Growth
First Call estimates for 2007, and First Call long-term EPS growth rates of 10% for WB and 12% for GDW thereafter
Expense Efficiencies
$53 million after-tax
One-time Costs
$293 million after-tax
Revenue Enhancements
None included in model
Deposit Divestitures
None included in model
Targeted Capital Ratios
Tangible: 4.7% (estimated 4.5% at close)
Leverage:** 6.0% (estimated 5.8% at close)
*Based on May 5, 2006 closing prices.
**Tangible common equity divided by tangible assets, excluding FAS113/133.
Page 21 – #4623, UBS
Excess capital created through WB diversification effectively funds premium
Capital required to support Golden West operations is reduced through diversification provided by Wachovia’s business mix and balance sheet
Excess capital approximates premium paid to Golden West shareholders
– Reduces effective price paid to market price, P/E paid to Wachovia’s P/E
– Limits cash EPS dilution
Excess capital and market premium*
Estimated GDW excess capital released by WB
$3.7-4.1B
Market premium paid (15%)
$3.3-3.7B
Limited cash EPS dilution
Golden West 2007 P/E**
11.56x
Wachovia 2007 P/E**
11.40x
Wachovia 2007 cash EPS dilution***
(0.4%)
* Ranges depend on closing date, dilution treatment of GDW stock options.
** Based on May 5, 2006 prices and First Call consensus estimates
(GDW: $70.51, $6.10 EPS; WB: $59.39, $5.21 EPS).
***See pp. 14-15 of May 8, 2006 presentation for calculations of illustrative cash EPS dilution and accretion.
Page 22 – #4623, UBS
Cautionary statement
This investor presentation contains certain forward-looking statements, including, without limitation, (i) statements relating to the benefits of the proposed merger between Wachovia and Golden West (the “Merger”), including future financial and operating results, cost savings, enhanced revenues and the accretion / dilution to reported earnings that may be realized from the Merger, (ii) statements regarding certain of Wachovia’s and/or Golden West’s goals and expectations with respect to earnings, earnings per share, revenue, expenses and the growth rate in such items, as well as other measures of economic performance, including statements relating to estimates of credit quality trends, and (iii) statements preceded by, followed by or that include the words “may”, “could”, “should”, “would”, “believe”, “anticipate”, “estimate”, “expect”, “intend”, “plan” or similar expressions. These statements are based upon the current beliefs and expectations of Wachovia’s and/or Golden West’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements.
The following factors, among others, could cause actual results to differ materially from that expressed in such forward-looking statements: (1) the risk that the businesses of Wachovia and/or Golden West in connection with the Merger will not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected; (2) expected revenue synergies and cost savings from the Merger may not be fully realized or realized within the expected time frame; (3) revenues following the Merger may be lower than expected; (4) deposit attrition, operating costs, customer loss and business disruption following the Merger, including, without limitation, difficulties in maintaining relationships with employees, may be greater than expected; (5) the ability to obtain governmental approvals of the Merger on the proposed terms and schedule; (6) the failure of Wachovia’s and/or Golden West’s shareholders to approve the Merger, respectively; (7) the strength of the United States economy in general and the strength of the local economies in which Wachovia and/or Golden West conducts operations may be different than expected resulting in, among other things, a deterioration in credit quality or a reduced demand for credit, including the resultant effect on Wachovia’s and/or Golden West’s loan portfolio and allowance for loan losses; (8) the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; (9) potential or actual litigation; (10) inflation, interest rate, market and monetary fluctuations; and (11) adverse conditions in the stock market, the public debt market and other capital markets (including changes in interest rate conditions) and the impact of such conditions on Wachovia’s capital markets and capital management activities, including, without limitation, Wachovia’s mergers and acquisition advisory business, equity and debt underwriting activities, private equity investment activities, derivative securities activities, investment and wealth management advisory businesses, and brokerage activities. Additional factors that could cause Wachovia’s and/or Golden West’s results to differ materially from those described in the forward-looking statements can be found in Wachovia’s and Golden West’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the SEC. All subsequent written and oral forward-looking statements concerning the proposed Merger or other matters and attributable to Wachovia or Golden West or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements above. Wachovia and Golden West do not undertake any obligation to update any forward-looking statement, whether written or oral, relating to the matters discussed in this news release.
Page 23 – #4623, UBS
Additional information
The proposed Merger will be submitted to Wachovia’s and Golden West’s shareholders for their consideration. Wachovia will file a registration statement, which will include a joint proxy statement/prospectus, and Golden West will file a joint proxy statement, and each of Wachovia and Golden West may file other relevant documents concerning the proposed Merger with the SEC. Shareholders are urged to read the registration statement and the joint proxy statement/prospectus regarding the proposed Merger when they become available and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information. You will be able to obtain a free copy of the joint proxy statement/prospectus, as well as other filings containing information about Wachovia and Golden West, at the SEC’s website (http://www.sec.gov). You will also be able to obtain these documents, free of charge, at Wachovia’s website (http://www.wachovia.com) under the tab “Inside Wachovia – Investor Relations” and then under the heading “Financial Reports - SEC Filings”. Copies of the joint proxy statement/prospectus and the SEC filings that will be incorporated by reference in the joint proxy statement/prospectus can also be obtained, free of charge, by directing a request to Wachovia Corporation, Investor Relations, One Wachovia Center, 301 South College Street, Charlotte, NC 28288-0206, (704)-374-6782; or to Golden West, Investor Relations Department, 1901 Harrison Street, Oakland, CA 94612, (510) 446-3420.
Wachovia and Golden West and their respective directors and executive officers, may be deemed to be participants in the solicitation of proxies from the shareholders of Wachovia and/or Golden West in connection with the proposed Merger. Information about the directors and executive officers of Wachovia is set forth in the proxy statement for Wachovia’s 2006 annual meeting of shareholders, as filed with the SEC on a Schedule 14A on March 13, 2006. Information about the directors and executive officers of Golden West is set forth in the proxy statement for Golden West’s 2006 annual meeting of shareholders, as filed with the SEC on a Schedule 14A on March 10, 2006. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the joint proxy statement/prospectus regarding the proposed Merger when it becomes available. You may obtain free copies of these documents as described in the preceding paragraph.
Page 24 – #4623, UBS
 Welcome to Wachovia Ben Jenkins, Vice Chairman and Head of the General Bank May 2006 X X X THE FOLLOWING WAS MADE AVAILABLE TO GOLDEN WEST AND WACHOVIA EMPLOYEES. |
 Page
2 Wachovia Corporation Vision We will be the best, most trusted and admired company in the financial services industry |
 Page
3 Wachovia Corporation Core Values Integrity Respect and Value the Individual Teamwork Service Personal Excellence and Accountability Winning |
 Page
4 Head Office: Customers: Employees: Assets: Loans: Deposits: Corporate Debt Ratings: Market Cap: Charlotte, N.C. 13.4 million households and businesses 97,000 $542 billion $260 billion $323 billion Moody’s: Aa3 S&P: A+ $95 billion** #5 U.S. Wachovia in Perspective* *As of Mar. 31, 2006 **As of May 5, 2006; Ranking among U.S. banks. |
 Page
5 Wachovia in Perspective Our History Wachovia Corporation was formed by the 2001 merger of First Union Corporation and the former Wachovia Corporation. Former Wachovia formed in 1879 in the town of Winston-Salem under the name Wachovia National Bank. Merged with Wachovia Loan and Trust in 1911 to form Wachovia Corporation. First Union formed in 1908. In 1958, Union National merged with First National Bank and Trust Company of Asheville, N.C., forming First Union National Bank of North Carolina. – Through more than 90 mergers with banks and other companies evolved into diversified financial services company. |
 Page
6 Delivering sustainable growth 2005 – A year of strong performance Fourth consecutive year of double-digit earnings growth Fifth consecutive year of leading customer service Generated strong customer acquisition and market share gains Invested for the future Superior shareholder returns – #2 shareholder return over 5 years: up 123% – Increased dividend 17% from 2004, 113% since year-end 2001 |
 Page
7 Wachovia in
perspective: Diversified businesses General Bank $3,904 (60%) (Retail, small business and commercial banking) 3,159 branches, 5,179 ATMs #3 Capital Management $579 (9%) Retail Brokerage: 10,500 registered reps #3* Mutual Fund: $104 billion AUM #17* Wealth Management (Private Banking) $256 (4%) 44,500 clients, $66 billion client AUM #4** Commercial Insurance Brokerage #9 Corporate and Investment Bank $1,723 (27%) 3,800 corporate clients (2,400 institutional clients) Capital Markets Issuance Top 10 CDOs (Domestic)*** #2 Loan syndications*** #4 Cash Management #3 2005 Segment Earnings Key Business Lines ($ millions) US Rank *Retail Brokerage ranking based on client assets of $684 billion. Mutual Fund ranking
based on FRC as of 11/30/05. **Wealth Management ranking based on total
private banking assets under management of $278 billion. Source: Barron’s. ***2005 league table rankings based on lead deal dollar volumes. |
 Page
8 4 th largest bank holding company in U.S. 3 rd largest full-service U.S. brokerage firm* 97,000 employees 3,159 financial centers & 5,179 ATMs 730 retail brokerage offices Wachovia in perspective Wachovia Financial Centers Wachovia Brokerage Offices Westcorp Financial Centers *Based on client assets; All data as of Mar. 31, 2006 |
 Page
9 4 th largest bank holding company in U.S. 110,000 employees 3,442 financial centers & 5,179 ATMs Wachovia in perspective: Together with Golden West Gold Mortgage Lending Offices States Gold Financial Centers Wachovia Brokerage Offices Wachovia Financial Centers |
 Page
10 Best, most trusted & most admired financial services company Wachovia Strategic Business Priorities Employee Engagement Revenue Growth Customer Loyalty Corporate Governance Lower Operating Cost Successful Merger Integration |
 Page
11 Competitive Compensation Market-based compensation for all job classes 100% of employees eligible for cash incentives Volunteer Opportunities Time Away from Work for Community Service More than 650,000 employee volunteer hours logged Charitable Contributions More than $9 million in employee contributions matched Education Opportunities $10 million in employee tuition reimbursement 49% 58% 70% 74% Employee Engagement Financial Services Average High Performers WB* Best Employers *Excludes SouthTrust employees. Source: Hewitt Associates Employee Engagement and Best Employer Database of 1,500 companies, including Fortune 500 (1997-2001). Valuing Employees Employee Engagement |
 Page
12 Employee Engagement Sample of benefits: – Comprehensive health care benefits – Matched retirement savings plan – Education reimbursement program – 4 hours paid time/month to volunteer Wachovia is recognized for developing an inclusive workplace that values employees: – One of Working Mother magazine's 100 Best Companies for 3 rd consecutive year. – Top 50 Best Companies for Latinas in the U.S. by Latina Style for 5 th consecutive year. – Top 50 Companies for Diversity by DiversityInc magazine for 3 rd consecutive year. – Essence magazine’s Outstanding Companies for Black Women. – 100 Best Corporations in North America for Developing Human Capital in Training Magazine for 4 th consecutive year. |
 Page
13 Customer Loyalty 40.2% 45.3% 48.6% 51.1% 55.0% 4Q02 4Q03 4Q04 4Q05 2006 Percentage Loyal Customers* *Data is from independent studies conducted with customers who transact in our Financial Centers. Definition of a loyal customer is a customer who rates Wachovia a 7 in all three loyalty questions – satisfaction with Wachovia, likelihood to recommend, and likelihood to repurchase – (scale of 1-7). Goal 5.59 6.35 6.49 6.57 6.59 6.63 1Q99 4Q01 4Q02 4Q03 4Q04 4Q05 *Data is from independent studies conducted with customers who transact in our Financial Centers. Scores prior to 1Q02 for legacy First Union only. Scale of 1-7. Customer attrition is total customer attrition and includes single service credit
card, mortgage and trust households and out of footprint households. Customer Satisfaction Scores* 11% 20% |
 Page
14 Customer Loyalty Wachovia 79 +10% (#1) All Others 78 +5% Bank of America 72 +6% Wells Fargo 67 +2% Bank One/JPMC 70 6% 2005 American Customer Satisfaction Index* Score 2005 vs. 2001 #1 for 5 th consecutive year *Annual consumer satisfaction survey by the University of Michigan. USAA Federal Savings Banks 824 Commerce Bancorp 808 Downey Savings & Loan 797 ING Bank 767 Wachovia Bank 755 #1 among large banks Huntington National Bank 745 Washington Mutual Bank 744 Comerica Bank 744 Regions Bank 733 Fifth Third Bank 731 † Scores based on 1,000-point scale. Industry average was 741. J.D. Power and Associates 2006 Retail Banking Satisfaction Study sm† |
 Page
15 Customer Loyalty: The Wachovia Service Philosophy I will warmly welcome you. I will focus only on you. I will make it easy to do business with me. I will take ownership of your needs. I will be knowledgeable and professional. I will be responsive to your questions and requests. I appreciate your business. |
 Page
16 Revenue
Growth:
Investing in the business drives future growth Reinvesting 30-50% of efficiencies for future revenue growth 2006 Growth Initiatives Credit Cards – Focused marketing to WB’s 11 million retail and small business households Mortgage – Expand modest market share – Hire 500-700 mortgage bankers Auto Loans – Westcorp acquisition adds $13 billion in auto loans De novo branches – Plan to open 100+ branches annually going forward Strategically positioned hiring and investments – Hiring up to 1,000 retail brokers |
 Page
17 Yes No Senior management required to retain 75% of all stock awards until retirement Yes No Stock options expensed Yes No All stock plans approved by shareholders Yes No All directors have meaningful Wachovia stock holdings Yes No Board meets independently from management Yes No Lead Independent Director 16 26 Board Size 2006 1999 Corporate Governance Leadership |
 Page
18 Lower Operating
Costs: Improving Overhead Efficiency* 64.7% 60.6% 57.2% 64.3% 59.1% 56.2% 60.0% 2000 2001 2002 2003 2004 1Q05 2Q05 2007 Goal *Overhead efficiency ratio excludes merger-related and restructuring charges, changes
in accounting principle and intangible amortization. 2007 not a projection,
results may differ from expectations for a number of reasons. 52 -
55% |
 Page
19 Successful Merger Integration Track record of successful integrations: – First Union/Wachovia – 2003 – SouthTrust – 2005 Our Philosophy: – Goal = no customer attrition – Thoughtful, deliberate approach – Retain all frontline, customer-facing employees – Carefully plan merger transitions and conversions |
 Page
20 General Bank Overview $9B Revenue $89B Loans $170B Deposits $26B Mortgage Production Over 10MM Relationships 3,159 Financial Centers and 5,179 ATMs #3 national branch & market share #1 share in Southeast $13B Revenue $178B Loans $216B Deposits 11MM Household & Business Relationships 45,400 Employees As of 1st Quarter 2006. $3.8B Revenue $89B Loans $47B Deposits 75,000 Wholesale Relationships 7,000 Auto Finance Relationships Includes Commercial, Business Banking, Real Estate Financial Services and Wachovia Dealer Services 34% Commercial “Do Business” share #2 national market share in Real Estate Financial Services Retail & Small Business Wholesale Businesses General Bank |
 Page
21 General Bank Focus Areas Service Delivery Sales focus with industry-leading service levels Drive new customer acquisition and customer retention Relentless pursuit of customer loyalty (2005 goal of 52%) Sales Management Communication, measurement, incentives and coaching Continued focus on increasing branch productivity Generating industry leading balance sheet growth Distribution Excellence De Novo in Texas, NYC, and high growth in footprint markets Network management (refurbishment, consolidations, etc.) Extended hours in selected markets (Capital and Atlanta) Building Credit Businesses Mortgage Credit Card Auto Finance People Drive higher employee satisfaction and retention Adjust training and development to match new requirements Revenue growth 2 x expensive growth Operating Leverage |
 Page
22 -40% -20% 0% 20% 40% 60% 80% 100% 120% 140% 4Q01 4Q02 4Q03 4Q04 4Q05 Sustainable growth drives material stock outperformance S&P 500 +3% 5 year Total Return BKX +33% WB +123% (# 2 of Top 20 U.S. Banks) Wachovia’s 5 year total return performance of 123% is more than 3.5 times that of the BKX and 41 times that of the S&P 500 |
 Page
23 Marketplace Accolades Top 100 Companies for Working Mothers Top 100 Best Corporate Citizens Outstanding CRA rating Top 20 Best Corporate Reputation Outstanding Corporation for Philanthropic Efforts |
 Page
24 Cautionary statement This investor presentation contains certain forward-looking statements, including,
without limitation, (i) statements relating to the benefits of the proposed merger between Wachovia and Golden West (the “Merger”), including future
financial and operating results, cost savings, enhanced revenues and the accretion / dilution to reported earnings that may be realized from the Merger, (ii)
statements regarding certain of Wachovia’s and/or Golden West’s goals and expectations with respect to earnings, earnings per share, revenue, expenses and the
growth rate in such items, as well as other measures of economic performance, including statements relating to estimates of credit quality trends, and (iii) statements preceded by, followed by or that include the words “may”, “could”, “should”, “would”, “believe”, “anticipate”, “estimate”, “expect”, “intend”, “plan” or similar expressions. These statements are based upon the current beliefs and expectations of Wachovia’s and/or Golden West’s
management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements.
The following factors, among others, could cause actual results to differ
materially from that expressed in such forward-looking statements: (1) the risk that the businesses of Wachovia and/or Golden West in connection with the Merger will not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected; (2) expected revenue synergies
and cost savings from the Merger may not be fully realized or realized within the expected time frame; (3) revenues following the Merger may be lower than
expected; (4) deposit attrition, operating costs, customer loss and business
disruption following the Merger, including, without limitation, difficulties in maintaining relationships with employees, may be greater than expected; (5) the ability to obtain governmental approvals of the Merger on the proposed
terms and schedule; (6) the failure of Wachovia’s and/or Golden West ’s shareholders to approve the Merger, respectively; (7) the strength of the United States economy in general and the strength of the local economies in which Wachovia and/or Golden West conducts operations may be different than
expected resulting in, among other things, a deterioration in credit quality
or a reduced demand for credit, including the resultant effect on Wachovia’s and/or Golden West’s loan portfolio and allowance for loan losses; (8) the effects of, and changes in, trade, monetary and fiscal policies and
laws, including interest rate policies of the Board of Governors of the Federal Reserve System; (9) potential or actual litigation; (10) inflation, interest rate, market and monetary fluctuations; and (11) adverse conditions in the stock market, the public debt market and other capital markets (including changes in
interest rate conditions) and the impact of such conditions on Wachovia’s capital markets and capital management activities, including, without
limitation, Wachovia’s mergers and acquisition advisory business, equity and debt underwriting activities, private equity investment activities,
derivative securities activities, investment and wealth management advisory businesses, and brokerage activities. Additional factors that could cause
Wachovia’s and/or Golden West’s results to differ materially from those described in the forward-looking statements can be found in Wachovia’s and
Golden West’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the SEC. All subsequent
written and oral forward-looking statements concerning the proposed Merger or other matters and attributable to Wachovia or Golden West or any person acting on
their behalf are expressly qualified in their entirety by the cautionary
statements above. Wachovia and Golden West do not undertake any obligation to update any forward-looking statement, whether written or oral, relating to the matters discussed in this news release. |
 Page
25 Additional information The proposed Merger will be submitted to Wachovia’s and Golden West’s
shareholders for their consideration. Wachovia will file a registration statement, which will include a joint proxy statement/prospectus, and Golden West will file a joint proxy statement, and each of Wachovia and Golden West may file other relevant documents concerning the proposed Merger with the SEC. Shareholders are urged to read the registration statement and the joint proxy statement/prospectus regarding the proposed Merger when they become
available and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information. You will be able to obtain a free copy of the joint proxy statement/prospectus, as well as other filings containing information
about Wachovia and Golden West, at the SEC’s website (http://www.sec.gov). You will also be able to obtain these documents, free of charge, at Wachovia’s website (http://www.wachovia.com) under the tab “Inside Wachovia – Investor Relations” and then under the heading “Financial Reports - SEC Filings”. Copies of the joint proxy statement/prospectus and the SEC filings that will be incorporated by reference in the joint proxy
statement/prospectus can also be obtained, free of charge, by directing a request to Wachovia Corporation, Investor Relations, One Wachovia Center, 301 South College
Street, Charlotte, NC 28288-0206, (704)-374-6782; or to Golden West, Investor Relations Department, 1901 Harrison Street, Oakland, CA 94612, (510)
446-3420. Wachovia and Golden West and their respective
directors and executive officers, may be deemed to be participants in the solicitation of proxies from the shareholders of Wachovia and/or Golden West in connection with the proposed Merger. Information about the directors and executive officers of Wachovia is set forth in the proxy statement for Wachovia’s 2006 annual meeting of
shareholders, as filed with the SEC on a Schedule 14A on March 13, 2006. Information about the directors and executive officers of Golden West is set forth in
the proxy statement for Golden West’s 2006 annual meeting of shareholders, as filed with the SEC on a Schedule 14A on March 10, 2006. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the joint proxy statement/prospectus regarding the proposed Merger when it becomes available. You may obtain free copies of these documents as
described in the preceding paragraph. |
 *******************************************************************************************
*** ******************************************************************************************
**** ******************************************************************************************
**** ******************************************************************************************
**** ************************* ************************* ************************* ************************* ************************* ************************* ************************* ************************* ************************* ************************* ************************* ************************* ************************* ************************* ************************* ************************* ************************* ************************* ************************* ************************* ************************* ************************* |