Wells Fargo & Co. today said its fourth-quarter loss was bigger than previously reported because of a change in how it accounts for the value of certain securities it holds.
The San Francisco bank said it recorded a non-cash, pretax charge of $328 million in the quarter, boosting its reported net loss to $2.73 billion, or 84 cents a share, from $2.55 billion, or 79 cents.
Wells said it took an "other-than-temporary impairment" charge against certain so-called perpetual preferred securities in its portfolio. The charge was triggered by "credit events" that occurred after Wells announced its results Jan. 28, the bank said.
That could mean that the issuer of the preferred securities had its credit rating downgraded. Wells didn't provide additional details.
The charge just reflects a change in how Wells accounts for the securities on its books; the drop in the value of the securities had been previously recorded as "unrealized."
Still, the stock took a hit in after-hours trading, dropping to $16.25 following the announcement. Wells’ shares had fallen as low as $15.27 during regular trading, then rebounded with the rest of the market to close at $16.80, off 70 cents.
The stock has tumbled 43% year to date, reflecting some investors’ concerns that Wells will need to raise more capital to bolster its finances against rising loan losses. Wells has insisted that its balance sheet is strong.
-- Tom Petruno
"Wall Street"Not Michael Douglas, But Michael Moore
Moore, known as much for his baseball cap as for his trenchant and at times controversial documentaries, is beseeching workers on Wall Street to “come forward and share†what they know on his web site.
“I am humbly asking you for a moment of courage, to be a hero and help me expose the biggest swindle in American history,†he writes, before turning to patriotism. “The important thing here is for you to step up as an American and do your duty of shedding some light on this financial collapse.â€
During a hearing on Capitol Hill Wednesday in which CEOs from eight of the largest banks were grilled about how they are using billions of taxpayer dollars, John Stumpf, president and CEO of Wells Fargo, said, “We're Americans first and bankers second.â€
Highly doubtful he’ll “spill the beans†to Moore.
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