Wachovia Hit By Writedown

Wachovia (WB) became the latest bank to be pulled down by the summer's credit crunch, missing third-quarter earnings after a $1.3 billion writedown.

The Charlotte, N.C., bank made $1.69 billion, or 89 cents a share, for the quarter ended Sept. 30, down from the year-ago $1.88 billion, or $1.17 a share. Excluding restructuring costs, earnings fell to 90 cents in the latest quarter from $1.19 a year ago. Analysts surveyed by Thomson Financial were looking for $1.03.

The bank took a $1.3 billion hit on what it called "valuation losses" tied to capital markets unrest.

"While the impact of the market disruption was significant, it's worth noting that the majority of the lower market valuations in the third quarter largely arose from a repricing of risk in the marketplace and do not reflect deterioration in the underlying credit quality of the assets in our leveraged finance and commercial real estate securitization businesses," CEO Ken Thompson said. "Looking ahead, we're taking the appropriate steps to ensure that as markets remain unsettled, we focus intently on actively managing our exposures and controlling costs."

The news comes at the end of a week in which Citi ( C), Bank of America ( BAC) and Washington Mutual ( WM) reported results that were hit hard by the decline of the housing market and the credit crunch, which was sparked by investor flight from souring subprime securities. Among the nation's biggest banks, only JPMorgan ( JPM) reported numbers that impressed investors.

Wachovia said it recorded a provision for credit losses of $408 million, reflecting modest deterioration in credit quality, a more uncertain credit environment and loan growth. Net charge-offs were $206 million, or an annualized 0.19% of average net loans.

More from Stocks

Danica Patrick's Final Race at 2018 Indianapolis 500: What She Thinks About Cars

Danica Patrick's Final Race at 2018 Indianapolis 500: What She Thinks About Cars

Why The FANG Stocks' Dominance May Not Be So Bad For The Market

Why The FANG Stocks' Dominance May Not Be So Bad For The Market

At End of May, Investors Signalling They May Stay Away

At End of May, Investors Signalling They May Stay Away

Inside Carnival's Mind Blowing New Horizon Cruise Ship (Video)

Inside Carnival's Mind Blowing New Horizon Cruise Ship (Video)

Neel Kashkari: The Heart of Our Financial System Is More Radioactive Than Ever

Neel Kashkari: The Heart of Our Financial System Is More Radioactive Than Ever