Wachovia Projects $2.6-$2.8B 2Q Loss

Wachovia has announced that it expects to lose between $2.6 billion and $2.8 billion in the second quarter, after reporting a $350 million loss in the first quarter. The company took a $4.2 billion loan-loss reserve provision, of which $3.3 billion is related to its now-discontinued negative amortization, payment-option, adjustable-rate "Pick-a-Pay" product. Chargeoffs for the second quarter include $500 million related to the neg-am portfolio and $280 million related to commercial real estate. The company said it expects to record a goodwill impairment charge during the quarter, but the amount is yet to be determined. (The goodwill losses are not included in the projected loss.) Wachovia added the Pick-a-Pay product when it purchased Golden West Financial Corp. The bank, which is based in Charlotte, N.C., can be found on the Web at http://www.wachovia.com.