Summary
Wells Fargo & Company (WFC) has filed an 8-K report on February 12, 2009, to disclose an adjustment to its previously reported fourth quarter and full-year 2008 financial results. The company announced it will record an other-than-temporary impairment charge of $328.4 million (pre-tax) related to investments in certain perpetual preferred securities. This charge stems from credit events that occurred after its initial year-end 2008 results press release on January 28, 2009, and prior to the filing of its 2008 Form 10-K. The impact of this impairment charge is a reduction in reported full-year 2008 net income to $2,655 million, or $0.70 per common share, down from the previously reported $2,842 million, or $0.75 per share. For the fourth quarter of 2008 specifically, the charge increases the net loss to $(2,734) million, or $(0.84) per share, from the previously reported $(2,547) million, or $(0.79) per share. These securities were already marked to fair value, with losses previously recognized as unrealized within other comprehensive income.
Key Highlights
- 1Wells Fargo recorded a $328.4 million pre-tax charge for other-than-temporary impairment on preferred securities.
- 2The charge impacts Q4 2008 and full-year 2008 results.
- 3Full-year 2008 net income is revised downward to $2,655 million ($0.70/share) from $2,842 million ($0.75/share).
- 4Q4 2008 net loss is revised to $(2,734) million ($(0.84)/share) from $(2,547) million ($(0.79)/share).
- 5The impairment relates to credit events occurring after the initial Q4 2008 earnings release.
- 6The affected securities were already reported at fair value, with losses previously classified as unrealized.