Wells Fargo & Company (WFC, Financial) filed Quarterly Report for the period ended 2010-09-30.
Wells Fargo & Company has a market cap of $145.89 billion; its shares were traded at around $27.46 with a P/E ratio of 16.1 and P/S ratio of 1.5. The dividend yield of Wells Fargo & Company stocks is 0.8%. Wells Fargo & Company had an annual average earning growth of 5.1% over the past 10 years.WFC is in the portfolios of Warren Buffett of Berkshire Hathaway, Prem Watsa of Fairfax Financial Holdings, Inc., Stanley Druckenmiller of Duquesne Capital Management, LLC, David Tepper of APPALOOSA MANAGEMENT LP, Tom Russo of Gardner Russo & Gardner, Chris Davis of Davis Selected Advisers, Mohnish Pabrai of Pabrai Mohnish, HOTCHKIS & WILEY of HOTCHKIS & WILEY Capital Management LLC, Bill Frels of Mairs & Power Inc. , Dodge & Cox, Richard Snow of Snow Capital Management, L.P., James Barrow of Barrow, Hanley, Mewhinney & Strauss, Arnold Schneider of Schneider Capital Management, Arnold Van Den Berg of Century Management, Diamond Hill Capital of Diamond Hill Capital Management Inc, NWQ Managers of NWQ Investment Management Co, John Paulson of Paulson & Co., Bill Nygren of Oak Mark Fund, Brian Rogers of T Rowe Price Equity Income Fund, Charles Brandes of Brandes Investment, Eric Mindich of Eton Park Capital Management, L.P., Kenneth Fisher of Fisher Asset Management, LLC, David Dreman of Dreman Value Management, Pioneer Investments, Chris Shumway of Shumway Capital Partners LLC, Bruce Kovner of Caxton Associates, Richard Aster Jr of Meridian Fund, John Buckingham of Al Frank Asset Management, Inc., Mario Gabelli of GAMCO Investors, Murray Stahl of Horizon Asset Management, Steven Cohen of SAC Capital Advisors, George Soros of Soros Fund Management LLC, Ron Baron of Baron Funds, PRIMECAP Management, Jeremy Grantham of GMO LLC, Donald Yacktman of Yacktman Asset Management Co., Ruane Cunniff of Ruane & Cunniff & Goldfarb Inc.
We continued taking actions to build capital and further strengthen our balance sheet, including reducing previously identified non-strategic and liquidating loan portfolios, which declined by $46.8 billion since the Wachovia acquisition and $6.2 billion in third quarter 2010 to $119.1 billion at September 30, 2010. Our capital ratios grew significantly in third quarter 2010, driven by strong internal capital generation, with Tier 1 common equity reaching 8.01%, up 40 basis points from second quarter 2010, and Tier 1 capital at 10.90%. The Tier 1 leverage ratio increased to 9.01%. Our capital ratios at September 30, 2010, were higher than they were prior to the Wachovia acquisition. While Basel III requirements are still not final, we expect to be above a 7% Tier 1 common equity ratio under the proposed rules, as we currently understand them, within the next few quarters. See the Capital Management section in this Report for more information regarding Tier 1 common equity.
Credit quality improved for the third consecutive quarter, with net charge-offs declining to $4.1 billion, down $394 million, or 9%, from second quarter 2010 and down 24% from last years fourth quarter peak. Reflecting improved portfolio performance, we released $650 million in loan loss reserves (net charge-
The improvement in credit quality was also evident in the portfolio of PCI loans, which consists of loans acquired through the Wachovia merger that were deemed to have probable loss and therefore written down at acquisition. Overall this portfolio has continued to perform better than original expectations. The commercial, CRE, foreign and other consumer portfolios continued to have positive performance trends, resulting in a combined $639 million transfer from nonaccretable difference to accretable yield in third quarter 2010. This increase in the accretable yield is expected to be recognized as a yield adjustment to income over the remaining life of these loans. In addition, for commercial PCI loans, due to increased payoffs and dispositions, we reduced the associated nonaccretable difference by $202 million (reflected in income in the third quarter).
In working with our customers, foreclosure is always a last resort, and we work hard to find other solutions through multiple discussions with customers over many months before proceeding to foreclosure. Since January 2009 we have helped over 556,000 borrowers avoid foreclosure through active and trial modifications, and have forgiven $3.5 billion of principal. Over the same period, we completed fewer than 230,000 owner-occupied foreclosure sales. We believe we have a high quality residential mortgage servicing portfolio and that our repurchase exposure related to mortgage securitizations is manageable and that our liability for mortgage loan repurchase losses of $1.3 billion at September 30, 2010, is adequate. Repurchase demands in third quarter 2010 were down linked quarter in both number and balance. See the Risk Management Credit Risk Management Nonaccrual Loans and Other Nonperforming Assets, Liability for Mortgage Loan Repurchase Losses and Risks Relating to Servicing Activities sections and Note 1 (Summary of Significant Accounting Changes Subsequent Events) to Financial Statements in this Report for additional information regarding our foreclosure processes, mortgage repurchase exposure and servicing activities.
Revenue was $20.9 billion in third quarter 2010 compared with $22.5 billion in third quarter 2009. Revenue for the first nine months of 2010 was $63.7 billi
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Wells Fargo & Company has a market cap of $145.89 billion; its shares were traded at around $27.46 with a P/E ratio of 16.1 and P/S ratio of 1.5. The dividend yield of Wells Fargo & Company stocks is 0.8%. Wells Fargo & Company had an annual average earning growth of 5.1% over the past 10 years.WFC is in the portfolios of Warren Buffett of Berkshire Hathaway, Prem Watsa of Fairfax Financial Holdings, Inc., Stanley Druckenmiller of Duquesne Capital Management, LLC, David Tepper of APPALOOSA MANAGEMENT LP, Tom Russo of Gardner Russo & Gardner, Chris Davis of Davis Selected Advisers, Mohnish Pabrai of Pabrai Mohnish, HOTCHKIS & WILEY of HOTCHKIS & WILEY Capital Management LLC, Bill Frels of Mairs & Power Inc. , Dodge & Cox, Richard Snow of Snow Capital Management, L.P., James Barrow of Barrow, Hanley, Mewhinney & Strauss, Arnold Schneider of Schneider Capital Management, Arnold Van Den Berg of Century Management, Diamond Hill Capital of Diamond Hill Capital Management Inc, NWQ Managers of NWQ Investment Management Co, John Paulson of Paulson & Co., Bill Nygren of Oak Mark Fund, Brian Rogers of T Rowe Price Equity Income Fund, Charles Brandes of Brandes Investment, Eric Mindich of Eton Park Capital Management, L.P., Kenneth Fisher of Fisher Asset Management, LLC, David Dreman of Dreman Value Management, Pioneer Investments, Chris Shumway of Shumway Capital Partners LLC, Bruce Kovner of Caxton Associates, Richard Aster Jr of Meridian Fund, John Buckingham of Al Frank Asset Management, Inc., Mario Gabelli of GAMCO Investors, Murray Stahl of Horizon Asset Management, Steven Cohen of SAC Capital Advisors, George Soros of Soros Fund Management LLC, Ron Baron of Baron Funds, PRIMECAP Management, Jeremy Grantham of GMO LLC, Donald Yacktman of Yacktman Asset Management Co., Ruane Cunniff of Ruane & Cunniff & Goldfarb Inc.
Highlight of Business Operations:
Our company earned $3.3 billion in third quarter 2010, our highest quarterly net income ever, with $0.60 diluted earnings per common share, compared with $3.2 billion ($0.56 diluted earnings per common share) in third quarter 2009. Net income for the nine months ended September 30, 2010 was $8.9 billion ($1.60 diluted earnings per common share), compared with $9.5 billion ($1.69 diluted earnings per common share) in the same period of 2009. Total revenue of $20.9 billion in third quarter 2010 was down 7% from third quarter 2009, reflecting lower net interest income, the impact of changes to Regulation E and related overdraft policy changes, and lower mortgage banking results. Net interest income of $11.1 billion was down 5% from third quarter 2009 driven primarily by the continued reduction of our non-strategic loan portfolios. Third quarter 2010 earnings reflected the success of the Wachovia merger and the benefits of our steady commitment to our core business of helping customersWe continued taking actions to build capital and further strengthen our balance sheet, including reducing previously identified non-strategic and liquidating loan portfolios, which declined by $46.8 billion since the Wachovia acquisition and $6.2 billion in third quarter 2010 to $119.1 billion at September 30, 2010. Our capital ratios grew significantly in third quarter 2010, driven by strong internal capital generation, with Tier 1 common equity reaching 8.01%, up 40 basis points from second quarter 2010, and Tier 1 capital at 10.90%. The Tier 1 leverage ratio increased to 9.01%. Our capital ratios at September 30, 2010, were higher than they were prior to the Wachovia acquisition. While Basel III requirements are still not final, we expect to be above a 7% Tier 1 common equity ratio under the proposed rules, as we currently understand them, within the next few quarters. See the Capital Management section in this Report for more information regarding Tier 1 common equity.
Credit quality improved for the third consecutive quarter, with net charge-offs declining to $4.1 billion, down $394 million, or 9%, from second quarter 2010 and down 24% from last years fourth quarter peak. Reflecting improved portfolio performance, we released $650 million in loan loss reserves (net charge-
The improvement in credit quality was also evident in the portfolio of PCI loans, which consists of loans acquired through the Wachovia merger that were deemed to have probable loss and therefore written down at acquisition. Overall this portfolio has continued to perform better than original expectations. The commercial, CRE, foreign and other consumer portfolios continued to have positive performance trends, resulting in a combined $639 million transfer from nonaccretable difference to accretable yield in third quarter 2010. This increase in the accretable yield is expected to be recognized as a yield adjustment to income over the remaining life of these loans. In addition, for commercial PCI loans, due to increased payoffs and dispositions, we reduced the associated nonaccretable difference by $202 million (reflected in income in the third quarter).
In working with our customers, foreclosure is always a last resort, and we work hard to find other solutions through multiple discussions with customers over many months before proceeding to foreclosure. Since January 2009 we have helped over 556,000 borrowers avoid foreclosure through active and trial modifications, and have forgiven $3.5 billion of principal. Over the same period, we completed fewer than 230,000 owner-occupied foreclosure sales. We believe we have a high quality residential mortgage servicing portfolio and that our repurchase exposure related to mortgage securitizations is manageable and that our liability for mortgage loan repurchase losses of $1.3 billion at September 30, 2010, is adequate. Repurchase demands in third quarter 2010 were down linked quarter in both number and balance. See the Risk Management Credit Risk Management Nonaccrual Loans and Other Nonperforming Assets, Liability for Mortgage Loan Repurchase Losses and Risks Relating to Servicing Activities sections and Note 1 (Summary of Significant Accounting Changes Subsequent Events) to Financial Statements in this Report for additional information regarding our foreclosure processes, mortgage repurchase exposure and servicing activities.
Revenue was $20.9 billion in third quarter 2010 compared with $22.5 billion in third quarter 2009. Revenue for the first nine months of 2010 was $63.7 billi
Read the The complete Report
