Fool: All's well at Wells Fargo

All's Well at Wells Fargo

I'm confused. I'm looking at the headlines of other articles talking about Wells Fargo's (NYSE: WFC) third-quarter results, and I see: "Wells Fargo Sees Subprime Storm Ahead," "Wells Fargo Hit by Credit Woes," "Wells Fargo Takes Its Lumps," and my favorite, "Wells Fargo's Stormy Future."

Hm. I actually thought the quarter was pretty decent. Let me explain.

A step above?

Nearly every large investment bank has reported stunning multibillion-dollar charge-offs, and the stock market barely yawned when Citigroup (NYSE: C), Merrill Lynch (NYSE: MER), and Bear Stearns (NYSE: BSC) revealed multibillion-dollar charges.

However, Wells Fargo's total credit charge-offs for the quarter were $892 million, or about 1% of loans annualized. That's a step up from the $720 million charge-off in the last quarter; net income rose only 4% year over year, but we're talking about the worst credit environment since Russia defaulted on its debt nearly 10 years ago. In light of the difficult environment, it seems Wells Fargo performed admirably.

Comment: The stock took a dive this week! WFC. Contrast with Wachovia (WB):

Wachovia profit falls on write-downs

Excerpt:

Wachovia Corp (NYSE:WB - News) on Friday posted a 10 percent decline in quarterly profit, missing forecasts, as the fourth-largest U.S. bank suffered $1.3 billion of write-downs at its investment banking unit.

WB vs WFC chart