Wachovia Corp. reported a surprisingly large second-quarter loss Tuesday, deflating Wall Street’s hopes that the nation’s big banks are weathering the credit crisis well.

The nation’s fourth-largest bank by assets said it lost $8.86 billion, is slashing its dividend and eliminating 10,750 positions after losses tied to mortgages soared.

Even excluding one-time items, the results substantially missed Wall Street estimates. "These bottom-line results are disappointing and unacceptable,” Chairman Lanty Smith said in a statement. “While to some degree they reflect industry headwinds and weaker macroeconomic conditions, they also reflect performance for which we at Wachovia accept responsibility.”

Wachovia has 34 offices and $5.5 billion in deposits in Colorado, thanks to its purchase of World Savings Bank.