In a securities filing, the Charlotte-based bank said it was updating last month's earnings report, nearly doubling the loss in the period to $708 million, or 36 cents per share, because of a writedown related to its life insurance portfolio.

The new numbers will be recorded in the bank's quarterly filing with the Securities and Exchange Commission, which is expected soon. Changes to earnings reports happen occasionally. Last year, the bank reduced previously announced third-quarter profits because of a legal settlement.

The increased loss revealed Tuesday is the latest blow to Wachovia, which has disclosed a regulatory settlement and an expected hit to second-quarter earnings in recent weeks.

The nation's No. 4 bank by assets said it was taking an additional $315 million writedown in the first quarter after reviewing so-called "stable value agreements" provided by third-party guarantors in relation to contracts within Wachovia's bank-owned life insurance portfolio.

"Although no assurances can be given, Wachovia believes it is possible that certain circumstances might arise that would allow it to realize benefits from these (stable value agreements) which would be recognized as gains in future periods," the bank said in Tuesday's filing.

Bank spokeswoman Christy Phillips-Brown declined to identify the third-party guarantor.

Bank-owned life insurance, or BOLI, is insurance a financial institution takes out on its own employees. The insurance, which also is an investment vehicle, can provide the company a payout when employees die as well as tax benefits that can boost earnings.

Life insurance portfolio key

In its annual report, Wachovia said it had a BOLI portfolio valued at $15 billion at the end of December, up from $13.3 billion at the end of 2006. The bank had total assets of $783 billion at the end of the first quarter.

The company's life insurance portfolio helped reduce its federal taxes by $183 million in 2007, according to its annual report. That's because earnings from money invested in the insurance policies is tax free. The bank had an income tax expense of $2.5 billion last year.

In 2005, the Observer reported that Wachovia began boosting the amount of life insurance it takes out on employees. The bank said the extra income would help cover the cost of offering "competitive and comprehensive" benefits to employees.

Its investment in the insurance increased nearly six times to $1.8 billion in 2005 from 2004, according to annual reports. The investment rose to $2.5 billion in 2006 but dipped to $1.6 billion in 2007.

Life insurance earnings cover about 10 percent of the cost of benefits for all employees, Phillips-Brown said. The bank obtains the consent of all employees who are covered by the insurance, she said. Wachovia surprised investors last month when it reported a $393 million first-quarter loss in conjunction with a 41 percent dividend cut and an $8 billion capital infusion to shore up its balance sheet.

Since then, the bank has agreed to a settlement over its ties to telemarketers that could reach $144 million and announced an expected second-quarter charge of up to $1 billion because of a court ruling involving certain leasing transactions.

Even with the bigger loss, Phillips-Brown said the bank has one of the strongest capital positions in the financial services industry.