Wachovia Posts $23.9 Billion Q3 Loss

October 22, 2008 3:24 p.m. EST

Charlotte, NC (AHN) - Wachovia announced Wednesday a $23.9 billion loss for the third quarter. The bank took a massive $18.7 billion charge for goodwill and restructuring as it prepares to be acquired by Wells Fargo.

The retail bank posted a third quarter loss of $23.89 billion or $11.18 a share, compared to a profit of $1.62 billion or 85 cents a share in the same period a year ago.

Wachovia also took a charge of $414 million for costs related to the Wells acquisition. Excluding that charge and the $18.7 billion goodwill impairment, the bank would have lost $4.76 billion or $2.23 a share.

Less the one-time charges, analysts were expecting the bank to turn a profit of 2 cents a share.

"The unprecedented, almost unimaginable, events of the third quarter and the consideration for our pending merger with Wells Fargo, created a scenario that required goodwill impairment for that and other sub-segments," said CFO David Zwiener during a recorded message reviewing the quarterly results, according to the Associated Press.

Included in the results was a $6.63 billion provision for loan losses. $1.87 billion was used to cover net-charge offs and the remaining $4.76 billion was added to reserves.

The majority of loan loss reserves are set to service the loan portfolio Wachovia received in its purchase of Golden West Corp. The bank expects to lose roughly $26.1 billion from that portfolio, which mainly consists of the "pick-a-pay" loans.

The bank did see net interest income tick up to $5 billion from $4.6 billion last year.

Shares of Wachovia are 3.6 percent lower to $5.87 a share in afternoon trading.