Wachovia Reports $24 billion Loss in Third Quarter

Charlotte, N.C.-based Wachovia Corp. (NYSE: WB) Wednesday reported a loss of $23.9 billion, or $11.18 per share, for the third quarter of 2008.

Pretax losses include: $18.8 billion in goodwill impairment; $4.8 billion credit reserve build to a 3.24 percent reserve-to-loan ratio; $2.5 billion of market disruption losses including $1.2 billion of securities impairments; $414 million net merger expense; and $310 million principal investing.

Excluding the goodwill impairment and net merger expense, Wachovia lost $4.76 billion, $2.23 per share.

Net charge-offs for the bank totaled $1.9 billion, an annualized rate of 1.57 percent of average net loans. Nonperforming assets including loans were $15 billion.

Losses also included a $6.6 billion credit loss provision – $3.4 billion to build reserves for the Pick-a-Pay mortgage portfolio and $1.4 billion to build other loan loss reserves.  

The bank’s all-stock merger with Wells Fargo, worth $14 billion, is still expected to close in the fourth quarter.

Wells Fargo President and Chief Executive John Stumpf told the Associated Press, “Wachovia’s third-quarter results were very much in line with our expectations. We’re more encouraged than ever by what we’ve seen in their franchise, and we’re pleased that Wachovia’s team continues to focus on serving customers."