Wachovia restates, nearly doubles loss : US Business

NEW YORK (Reuters) - Wachovia Corp , the fourth-largest U.S. bank, on Tuesday nearly doubled its previously reported first-quarter loss because of a write-down on three contracts in a bank-owned life insurance portfolio.

The bank is now reporting a net loss available to common stockholders of $708 million, or 36 cents per share. On April 14, it reported a loss of $393 million, or 20 cents per share.

Wachovia said it increased the loss by $315 million after reviewing $360 million of stable value agreements provided by a third-party guarantor. It said it may realize benefits from these agreements as gains in future quarters.

Bank-owned life insurance can insure against the lives of employees and directors. Proceeds help offset the cost of providing employee benefits, and help banks manage risk.

Wachovia disclosed the increased loss in a U.S. Securities and Exchange Commission filing.

The loss is the latest blow for the Charlotte, North Carolina-based bank.

On April 30, Wachovia said it may take a $800 million to $1 billion second-quarter charge because of a federal appeals court decision concerning taxation of leveraged lease transactions.

It is also struggling with mounting credit losses, including a quintupling of losses from a $121.2 billion portfolio of "option" adjustable-rate mortgages that has deteriorated because of the deepening U.S. housing slump.

Wachovia became a major provider of option ARMs, which let borrowers pay less than the interest due, when it paid $24.2 billion for Golden West Financial Corp in October 2006.

Shares of Wachovia fell 56 cents to $29.22 in morning trading on the New York Stock Exchange.

(Reporting by Jonathan Stempel; Additional reporting by Emily Chasan; editing by Dave Zimmerman)

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