Wells Fargo Makes Numbers, Up?
Wells Fargo, #5 US Bank by assets; #2 US Mortgage lender; #1 West Coast Bank, beat the number and posted record annual and quarterly revenue numbers. Sound good?
Mike Loughlin, chief credit officer:
"Given the weakness in housing and the overall state of the U.S. economy, it is likely that net charge offs will be higher in 2008.''
Sniff, sniff, I smell a truffle, lets dig further... From Wells Earnings Release:
Under the sheets... Q4 YOY net income -38%, full year -4%, the 1st decrease in profit since 2001.
Net interest margin full year -2%, Q4 YOY -6%; Diluted EPS Full year -4%; Q4 EPS YOY -36%; shares down 27% in the last year.
WF Financial: net income 07 $481 vs 06 $852 million, a 44% decline; Q407 $78 vs Q406 $158 million, a 51% decline.
WF Community Banking: net income 07 $5,293 vs 06 $5,550 million, a 5% decline; Q407 $693 vs Q406 $1,532 million, a 55% decline
Mortgage originations YTD -7%; YOY Q4 -20% to $56 billion; mortgage application pipeline -$5 billion at $43 billion.
For CEO Stumpf's sake, what is going up at Wells? Provisions for credit losses, charge offs and non performing assets...
Provisions for credit losses: $5.52 billion a 37% increase from Q3!!! Wholesale banking full year +331%; Q4 +44%.
Community banking 07 $3,187 vs 06 $887 million + 259%; Q407 $2,082 vs Q406 $275 million +657%!!!
Net charge offs full year +57% $3.54 vs $2.25 billion; home equity charge offs +440% $595 vs $110 million;
auto loan charge offs +19% $1.02 billion vs $857 million. Consumer loan charge offs +34% to $955 million
Net charge offs Q4 +36% to $1.2 billion plus credit reserve build to $1.4 billion = Q4 bad credit provisions +300% to $2.6 billion!!! Net charge offs as a % of average total loans full year +41%.
Non performing loans as a % of total loans full year & Q4YOY +35%; Loans 90 days past due +26%...
$6.39 vs $5.07 billion and vs Q3 $5.53 billion an increase of 15% and vs Q306 $3.664 billion an increase of 74.3%!!!!
Excluding the GNMA insured loans: 90 days past due $1.559 vs $1.160 billion or +34%; vs Q3 $1.263 billion or +23% in Q4!!!
Non performing assets +21% $3.87 vs $3.18 billion vs Q306 $2.1 billion or an increase of 84%!!!
Well, things certainly are going up at Wells, in smoke, and CEO Stumpf is doing one hell of a job, eh? It gets better...
Wells Home Equity Portfolio $84.2 billion; 86% or $72.3 billion in the "retained" portfolio. 14% or $11.9 billion in the "liquidating" portfolio.
In the liquidating portfolio: loss rate 4.8%; $ in 2nd lien behind a WF 1st $3.4 billion; $ in 2nd lien behind another lender $8.1 billion.
In the retained portfolio: loss rate 0.86%; $ in 2nd lien behind a WF 1st $38.1 billion; $ in 2nd lien behind another lender $22.8 billion
Thats 36.6% of the total Home Equity Portfolio or $30.9 billion in subordinated home equity loans that get ZERO in the event of default and REO.
Remember folks, the last earnings release from Wells was less than "honest" and the 10Q won't get filed for another week.
So just like last time, things could change. We will be rootin around when the actual 10Q does get filed for more juicy truffles on this PIG wearing lipstick.
Refer to our previous analysis of the Wells Q3 10Q here and here and here.
Mike Loughlin, chief credit officer:
"Given the weakness in housing and the overall state of the U.S. economy, it is likely that net charge offs will be higher in 2008.''
Sniff, sniff, I smell a truffle, lets dig further... From Wells Earnings Release:
Under the sheets... Q4 YOY net income -38%, full year -4%, the 1st decrease in profit since 2001.
Net interest margin full year -2%, Q4 YOY -6%; Diluted EPS Full year -4%; Q4 EPS YOY -36%; shares down 27% in the last year.
WF Financial: net income 07 $481 vs 06 $852 million, a 44% decline; Q407 $78 vs Q406 $158 million, a 51% decline.
WF Community Banking: net income 07 $5,293 vs 06 $5,550 million, a 5% decline; Q407 $693 vs Q406 $1,532 million, a 55% decline
Mortgage originations YTD -7%; YOY Q4 -20% to $56 billion; mortgage application pipeline -$5 billion at $43 billion.
For CEO Stumpf's sake, what is going up at Wells? Provisions for credit losses, charge offs and non performing assets...
Provisions for credit losses: $5.52 billion a 37% increase from Q3!!! Wholesale banking full year +331%; Q4 +44%.
Community banking 07 $3,187 vs 06 $887 million + 259%; Q407 $2,082 vs Q406 $275 million +657%!!!
Net charge offs full year +57% $3.54 vs $2.25 billion; home equity charge offs +440% $595 vs $110 million;
auto loan charge offs +19% $1.02 billion vs $857 million. Consumer loan charge offs +34% to $955 million
Net charge offs Q4 +36% to $1.2 billion plus credit reserve build to $1.4 billion = Q4 bad credit provisions +300% to $2.6 billion!!! Net charge offs as a % of average total loans full year +41%.
Non performing loans as a % of total loans full year & Q4YOY +35%; Loans 90 days past due +26%...
$6.39 vs $5.07 billion and vs Q3 $5.53 billion an increase of 15% and vs Q306 $3.664 billion an increase of 74.3%!!!!
Excluding the GNMA insured loans: 90 days past due $1.559 vs $1.160 billion or +34%; vs Q3 $1.263 billion or +23% in Q4!!!
Non performing assets +21% $3.87 vs $3.18 billion vs Q306 $2.1 billion or an increase of 84%!!!
Well, things certainly are going up at Wells, in smoke, and CEO Stumpf is doing one hell of a job, eh? It gets better...
Wells Home Equity Portfolio $84.2 billion; 86% or $72.3 billion in the "retained" portfolio. 14% or $11.9 billion in the "liquidating" portfolio.
In the liquidating portfolio: loss rate 4.8%; $ in 2nd lien behind a WF 1st $3.4 billion; $ in 2nd lien behind another lender $8.1 billion.
In the retained portfolio: loss rate 0.86%; $ in 2nd lien behind a WF 1st $38.1 billion; $ in 2nd lien behind another lender $22.8 billion
Thats 36.6% of the total Home Equity Portfolio or $30.9 billion in subordinated home equity loans that get ZERO in the event of default and REO.
Remember folks, the last earnings release from Wells was less than "honest" and the 10Q won't get filed for another week.
So just like last time, things could change. We will be rootin around when the actual 10Q does get filed for more juicy truffles on this PIG wearing lipstick.
Refer to our previous analysis of the Wells Q3 10Q here and here and here.
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