Spekulatius, I was looking up references regarding those terms “Tier 1” and “TCE” ratios (I’m not that familiar with them).
I came across the following at “www.theasianbanker.com” web site.
Thought it may be of interest.
It was entitled ...
“WELLS FARGO EARNS RECORD $3.05 BILLION, $0.56 EPS”
“(1) Record profits reflected business momentum across the newly combined Wells Fargo-Wachovia :-
a) Record Wells Fargo net income of $3.05 billion
b) Record net income applicable to common stock of $2.38 billion
c) Earnings per common share of $0.56, after merger-related and restructuring expense of $206 million ($0.03 per common share) and $1.3 billion credit reserve build ($0.19 per common share)
d) Preferred dividends of $661 million included $372 million paid to U.S. taxpayers on the U.S. Treasury’s Capital Purchase Program investment
e) Record pre-tax pre-provision profit of $9.2 billion
(2) Revenue of $21.0 billion reflected growth in both net interest income and fee income resulting from diversified business model :-
a) Record legacy Wells Fargo revenue of $12.3 billion, up 16 percent from prior year
b) Best mortgage origination quarter since 2003
c) Net interest margin of 4.16 percent, highest among large bank peers
d) Total core deposits of $756.2 billion at March 31, 2009, up 6 percent (annualized) from $745.4 billion at December 31, 2008, despite maturity of $34 billion of higher-rate Wachovia certificates of deposit (CDs)
e) Consumer checking and savings deposits up 31 percent (annualized) from December 31, 2008
(3) Significant credit extended to U.S. taxpayers :-
a) $175 billion in loan commitments, mortgage originations and mortgage securities purchases
b) $190 billion in mortgage applications, including record $83 billion in applications in March
c) $101 billion in mortgage originations, helping over 450,000 homeowners purchase a home or refinance
d) More than $225 billion of credit extended to U.S. taxpayers since last October, nine times the amount received from U.S. taxpayers through the U.S. Treasury’s Capital Purchase Program investment
(4) Wachovia merger on track and profit contribution exceeded expectations in first quarter :-
a) 41 percent of combined revenue from Wachovia
b) Loan, deposit and business activity has resumed and customers have returned
c) Reconfirmed $5 billion of expected annual merger-related savings, which will begin emerging in second quarter and are expected to be fully realized when the integration is completed
d) Purchase accounting adjustments overall remain in line with December 31, 2008, marks
(5) Strengthened capital position :-
a) Tangible common equity (TCE) of $41.1 billion at quarter end, an increase of $4.5 billion to TCE during the quarter
b) TCE ratio of 3.28 percent, up from 2.86 percent at December 31, 2008 (see page 24)
c) TCE of 3.83 percent of estimated risk-weighted assets
d) Tier 1 capital of $88.9 billion, Tier 1 capital ratio of 8.28 percent, up from 7.84 percent at December 31, 2008
e) The $40 billion of SOP 03-3 non-accretable difference (credit write-downs) from the Wachovia acquisition is the equivalent of approximately 190 basis points of additional TCE
(6) Balance sheet well-positioned for economic environment :-
a) Allowance for credit losses of $22.8 billion; at March 31, 2009, allowance adequate to cover expected consumer losses for at least the next 12 months and to provide approximately 24 months of anticipated commercial loss coverage
b) Allowance for credit losses covers 2.7 percent of total loans, 2.9 percent of non-SOP 03-3 loans, and 2.2 times nonperforming loans
c) Reduced risk in balance sheet and future earnings stream through write-downs already taken at December 31, 2008, on Wachovia’s higher-risk loan and securities portfolios; combined nonperforming loans were 1.25 percent of total loans at March 31, 2009, lowest ratio among large bank peers
d) Securities portfolio written down by $516 million of other-than-temporary impairment
e) Reduced the ratio of capitalized mortgage servicing rights (MSRs) to owned servicing to 74 basis points; lowest ratio since 2003
f) Higher-risk loan portfolios reduced by $4.5 billion (indirect home equity, Pick-a-Pay and indirect auto at legacy Wells Fargo) and Trading Assets reduced by $8.4 billion.”
-------------------------------------------------------------
It seems we have WFC’s Tier 1 at 8.28% and its TCE at 3.28%.
I looked up JPM’s numbers and found its Tier 1 at 9.2%, excluding TARP Capital, and its TCE at 3.80%.
I’ve read on several SI threads that JPM is in “better condition” than WCF.
However, those ratios don’t seem too far apart.
What do you think ? |
