Wachovia posted a $24 billion net loss for the third quarter with much of the decline consisting of one-time, partially mortgage-related items, but executives from Wells Fargo say their plans to acquire Wachovia are still a go. The net loss included $18.8 billion of goodwill impairment, a $4.8 billion credit reserve and $2.5 billion of "market disruption losses." The company's total third-quarter credit loss was $6.6 billion, including charge-offs in addition to the reserve build, and $3.4 billion of the credit loss total related to pay-option ARMs. Wachovia now anticipates that its cumulative loss rate on its $119 billion option-ARM portfolio will be 22%, or $26 billion, reflecting a more severe outlook for the depth and length of the housing downturn. Wells Fargo CEO John Stumpf said in a statement that Wachovia's results "were very much in line with our expectations." And Wells Fargo's CFO, Howard Atkins, said, "We believe it was prudent for Wachovia to put these losses behind them."
Wachovia Takes $24 Billion, Partially Mortgage-Related Loss
Published October 22, 2008, 1:00 p.m. EDT
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