Wells Fargo’s profit nearly doubles in the third quarter

Wells Fargo reported a 98% increase in its third quarter earnings. This is even with a increase in credit losses.

The numbers came out to a $2.6 billion third quarter profit, which is up from $1.6 billion in the same quarter last year. It totaled out to 56 cents per diluted share. If you exclude retired debt from the TARP funds as well as additional preferred dividends, Wells Fargo actually earned just over $3 billion in the latest quarter.

While the earnings were up that much, revenue for the company more than doubled and actually topped analysts’ predictions. The third quarter revenue for the company was $22.5 billion and analysts were only expecting $21.64 billion. In the third quarter 2008, revenue for the company was $10.38 billion and fueled by the merger with Wachovia Securities. Even CEO John Stumpf seemed surprised by the cost of Wachovia, in a statement he said that the costs related to absorbing Wachovia is “significantly less” than he or anyone else at the company had anticipated.

There wasn’t all good news for Wells Fargo. It said that its credit loss provisions increased to $6.11 billion which is more than double last years numbers and charge offs also jumped to $5.1 billion. That is 2.5% of the loans from the company, it was only 1.96% last year.

The company’s chief financial officer, Howard Atkins said in the earnings release, “While the level of nonperforming assets and losses is expected to remain elevated for a period of time, we currently expect total credit losses to peak in 2010.”

Last year, Wells Fargo did buy out Wachovia Securities. It was a merger that happened at a time when a lot of huge banks (the same ones that were too big to fail) were buying out medium sized banks that were going to fail. It seems like when this happened all it did was create a bigger issue where the banks that were too big to fail are now even bigger. At least Wells Fargo is seeing a positive in the way of revenues…

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