This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Wells Fargo Releases $1B in Reserves

Stocks in this article: WFCCBACJPM

SAN FRANCISCO ( TheStreet) - Wells Fargo's (WFC) continued credit quality improvement enabled the company to release $1 billion in reserves during the first quarter, boosting earnings and following the trend for the largest U.S. banks that had already reported earnings.

The company's net charge-offs -- loan losses less recoveries -- fell for the fifth-straight quarter to $3.2 billion, a 16% decline from the previous quarter and a 40% decline from a year earlier. The company's annualized ratio of net charge-offs to average loans was 1.73%, improving from 2.02% in the fourth quarter and 2.71% in the first quarter of 2010. With loan loss reserves covering 2.98% of total loans as of March 31, it appeared the company was well-positioned for further reserve releases in coming quarters, which would continue to boost earnings.

Wells Fargo CEO John Stumpf

Wells Fargo's reserve release was in line with the other "big four" U.S. banks, including

Citigroup (C), Bank of America (BAC), which saw its allowance for loan losses decline by $2 billion, and JPMorgan Chase (JPM).

Citigroup released $3.3 billion in credit reserves during the first quarter, while JPMorgan's allowance for loan losses declined by $2.5 billion. Bank of America's loan loss reserves declined by $2 billion during the quarter.

The company also reported a decline in mortgage repurchase losses to $249 million in the first quarter from $464 million in the fourth quarter and $402 million in the first quarter of 2010. Total liability for mortgage repurchases was $1.2 billion as of March 31, declining from $1.3 billion the previous quarter and $1.3 billion a year earlier.

Wells Fargo's nonperforming assets -- including nonaccrual loans and repossessed assets -- totaled $30.6 billion as of March 31, declining 5% from the previous quarter and 11% from a year earlier. The ratio of nonperforming assets to total assets was 2.46% as of March 31, improving from 2.57% in December and 2.83 % in March 2010.

Earlier-stage loan delinquencies also declined, with "6% of the retail loan portfolio was 30 days or more past due, down 15% from the previous quarter," according to Mike Koughlin, chief risk officer.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,461.32 -153.49 -0.92%
S&P 500 1,927.11 -14.17 -0.73%
NASDAQ 4,382.8470 -36.6310 -0.83%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs