April 2002

I want to thank Mac Everett for the time, effort and energy he has invested over the years with great groups like the NCCBI. In many ways, Mac Everett has set an important example for the rest of us at Wachovia. He has made community involvement a huge part of his professional career. He believes fervently in investing time and effort our in communities and he always manages to support worthwhile initiatives.

The members of NCCBI no doubt recognize the important contributions he has made to Charlotte, our region and this statewide organization, and that is the sort of thing that has marked his career for as long as I have known him.

I want to start by saying how pleased I am to be here this afternoon as CEO of the fourth-largest banking company in the U.S. -- the new Wachovia.

Actually, that bears repeating. Given that another company, a Georgia-based competitor, had a very different idea about how last year's proposed Wachovia-First Union merger ought to turn out. I want to start by saying how ecstatic I am to be here this afternoon as CEO of the fourth-largest banking company in the U.S. -- the new Wachovia.

We were successful in completing that merger -- and a lot of people in this room deserve credit for helping make that happen. And one of the things that impressed me is that our supporters were able to be so helpful on such extremely short notice.

For those of you who may not know, all of that happened last summer, after SunTrust Bank made a hostile bid for Wachovia. We identified a small but strategically vital point in the state laws governing public companies and shareholder rights that - if made - would be very helpful in fending off SunTrust.

In fact, the state legislature was very receptive to our point of view and adopted the change very quickly and overwhelmingly, which wound up being a key factor in our successfully completing the merger.

There's a larger point to all that. Every time we successfully recruit a company to North Carolina – or persuade one that is already here to pick our state for a major expansion - one of the factors always cited is North Carolina's very positive business environment.

The receptive hearing we got in Raleigh last summer, and the efforts of the NCCBI over the years, are the kinds of things that make our business environment such an important asset to our state. So when I say to this group how much appreciative I am, it is not just rhetoric, but rather a conviction born of first-hand experience.

Earlier this month, The Charlotte Observer in a major story on its Sunday Business page talked about the surprising development that two of the country's largest mutual fund companies are based just a few blocks apart in Center City Charlotte.

The story went on to point out how the two companies, Wachovia and Bank of America, through a combination of acquisitions and organic growth, each become ranked among the 20 largest mutual fund companies in the U.S. That's a fairly impressive accomplishment, especially when you stop to consider that less than 20 years ago, neither bank was in the Mutual Funds business at all!

As much as anything else, that fact speaks to what has happened to the banking industry, and, more broadly, what has happened to the economy, in the past two decades. Today's Wachovia for instance is a vastly different company from the one that grew up in North Carolina over the last century taking deposits, making loans and generating income off the interest-rate spread between those two activities. Compared to that traditional institution, today's Wachovia has almost unimaginable size and scale and scope.

We have 20 million customers, $330 Billion of assets, a quarter of a trillion dollars in assets under management. Nationally, today's Wachovia ranks as a top-five securities brokerage firm, a la Merrill Lynch. A top-two small business lender. A top-five loan syndicator. A top-three international correspondent bank. A top-l0 equity underwriter. A top- 15 insurance broker. And, yes, a top-20 mutual fund company.

Now, what do all those numbers mean? Well, obviously, they mean that Wachovia is a big company -- a very big company. But you already knew that.

To me, the real message of those numbers is that we are big enough to matter, big enough to make a difference for our customers, big enough to deliver for them no matter what kind of financial needs they have.

I'll tell you something else those numbers mean, and they say this to me loudly and clearly. They mean that at Wachovia we have a huge responsibility. Think about it this way. If you look closely at all those large numbers, you will find that they are rooted in our strong market position in hundreds of communities - towns and cities across our franchise. As a major financial institution in those communities - in many cases, THE major financial institution - it is incumbent upon us to be responsible corporate citizens.

And, we must take that word "community" and define it as broadly as we possibly can.

Historically, that is not something any of us have done very well in North Carolina. We have plenty of examples of cities in North Carolina that - looked at broadly - are obviously part of what has come to be called the Miracle of the New South.

From Wilmington to Raleigh to Charlotte to Ashville, we have cities that have grown and thrived and prospered. But get outside those cities, and it is much harder to find evidence of the prosperity that most of us enjoyed throughout the last half of the 20th century. And even within those burgeoning cities, the prosperity has been distributed far too unevenly.

So it becomes one of Wachovia's 5 major responsibilities to be the vehicle through which economic opportunity is extended to all segments of our communities, and to all corners of our state.

It is a responsibility I take very seriously, and I am determined to get it right.

Less than a week ago, Wachovia unveiled our new corporate flag - the logo of our new company.

Prior to that unveiling, there had been quite a bit of media speculation about which color would prevail. The two leading candidates were generally described as "First Union Green" and its counterpart, "Wachovia Blue."

Now, I am almost positive that those terms do not appear on the color chart at the Sherwin-Williams store, but nevertheless, that's how they were labeled. It turns out that we delivered a new logo that is not "either-or." Rather, it is "and", and I am ecstatic at the compatibility of our blue-green insignia. But there's a not-so-subtle message behind that logo that is important to us, and that I think should matter to all North Carolinians. Here's why.

I mentioned early on the healthy pro-business climate that is such an asset in North Carolina. Within the proud tradition of that environment, the "First Union" and "Wachovia" names are two of the stalwarts.

When I look at our new brandmark I see two cultures, two traditions, two histories coming together and moving ahead together, and I see the best elements of both predecessor cultures being preserved and incorporated as important attributes of our new company.

That's critical. Neither of these proud, long-standing members of North Carolina's business community has vanished. Instead, they have come together in a new, and better, company that will carry on the best traditions of each.

I want to talk about one specific piece of that. But to get there, I need to give you some context by sharing with you some general thoughts about where our economy is and where it is likely headed near-term.

North Carolina today is predominantly a service economy. Transportation services, health-care services, tourist services, communications services and, of course, financial services are the cornerstones.

That economy has really has developed over the last three decades or so. Prior to that, we had been a pure manufacturing economy.

My view of our manufacturing economy is we have been in a deep recession for sometime. But in service-based economy we have experienced a fairly shallow recession that is coming to an end.

I look for that to be followed by a very solid economic recovery that is already becoming visible.

In my Econ class years ago at Chapel Hill, that would be described as the Micro view. Here's the Macro version.

Computer and telephone networks have created an integrated world economy from which no local market is insulated. This integration and its effects will only grow going forward.

Specifically, a great many of the low-skill, moderate-wage jobs that traditionally have sustained North Carolina families have moved elsewhere. That job migration will continue. And the jobs are not coming back.

Therefore, we must retrain workers whose jobs are being eliminated in this ever-evolving process. And we must give everyone in our next generation of workers the opportunity to prepare for the high-tech jobs and the knowledge jobs of the future.

Intellectual capital will increasingly be the currency in this world economy. And the only source of that capital is our educational system.

In a recent episode of "The West Wing" a couple of weeks ago, the Sam Seaborn character -- played by Rob Lowe -was twisting the arm of a Senator who was holding up funding for construction of a research facility whose output would have no immediate, practical application.

In making his case, Sam said, "When the electron was discovered in 1897, there was no use for it. Now we have a whole world run by electronics."

The point, of course, was that there is demonstrable value in discovery - and the surest path to discovery is by way of education.

Sometimes we may not know where an increased investment in our education system might lead us... or when it might lead us there... but surely we must recognize that wherever an improved educational system leads us will be a better place.

I said earlier that we are determined to preserve the best of our two predecessor companies in the new Wachovia we are creating.

One of the traditions we are committed to maintaining -and even enhancing -- is the deep involvement both companies historically had in our schools.

The Macro Economic situation I just outlined underscores how critically important it is that we invest aggressively in educational improvements.

So Wachovia will continue the Education First initiative that encourages employees to volunteer in schools... matches financial contributions to educational institutions... awards scholarships to children of employees... provides educational tools to parents of young children... and recognizes outstanding achievements by superintendents, principals and teachers. We will continue the Time Away from Work for Education policy that allows every employee four hours of paid time off each month to volunteer in schools or other educational programs.

We will maintain our Reading First program that promotes early childhood literacy.

In my view, that sort of commitment simply goes with the territory. Those of us in the Private Sector have to be supportive and more importantly, involved ... we must play a role in helping raise educational standards.

In the context of the changing nature of the jobs our state's economy is producing, there are at least two broad reasons why there is no alternative to meaningful involvement in public education.

First, if we are managing a company, the sustain ability of our effort comes down to one factor: The quality of the labor force - which really means the quality of education.

Second, if we are involved in any way in economic-development initiatives, that same issue - work-force quality - inevitably becomes the make-or-break agenda item.

So, literally, there is nothing more important than contributing to a constant effort to improve the quality of our public education.

At this meeting NCCBI honors 4 former governors. Each of them recognized the need to move North Carolina's public education system ahead. Our current governor continues that tradition and we, in the private sector, need to support his efforts.

Certainly, in these economic times, government must be extremely efficient. But no, when every state is looking for every available dollar, North Carolina has a chance to move ahead of less forward looking states in public education. The private sector needs to support this. It's in our best interest.

I thank you for inviting me to share my thoughts with you today. I thank you all for the support you gave us last summer. And I thank you very sincerely for allowing Wachovia to serve your financial needs.

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