Wachovia Loses Another Key Exec
Wachovia isn't just losing money these days -- it's losing much of its top executive team, as well: A second senior executive in as many weeks has made plans to leave the company, Wachovia Corp. (WB) said in a statement Thursday. Chief risk officer Donald K. Truslow "plans to retire once a successor is named to the role," the bank said, noting that it would immediately begin searching for a replacement. "I want to thank Don for his many years of dedicated and tireless service to Wachovia," said Robert Steel, Wachvoia's newly-minted CEO. "Don is highly respected throughout the company and the industry for his strong leadership, his excellent collaboration and his high ethical standards." News of Truslow’s retirement follows the announcement last week that chief financial officer Thomas Wurtz is leaving the bank. Wachovia reported a loss of $8.9 billion, or $4.20 per share, during the recently-completed second quarter, and the planned elimination of 10,750 jobs. The bank also became the latest to exit the wholesale mortgage origination channel, as well. The record loss included $5.6 billion in credit costs, including a $4.2 billion loss provision covering expected future losses in the bank’s substantial mortgage holdings; earnings were also affected by a $6.1 billion impairment to goodwill. Wachovia holds $122 billion in option ARMs, a substantial part of the bank's $488.2 billion in total loans; no other U.S. bank has as much exposure to option ARMs in real-dollar terms. The North Carolina-based bank yanked its option ARM lending program earlier in the year, as mounting losses and continuing home price declines made the product unprofitable. Disclosure: The author held various put option contracts on WB when this story was published; other indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.