Wells' Imploding Loan Portfolio
The fine folks over at WLMLab Bank Loan Performance have done a great job at updating FDIC loan data by various banks. Some of their conclusions:
- Total US Loans outstanding have dropped by another $110 billion QoQ
- Yet, there is an ever increasing mountain of charge offs coming in 1-4 Family First Liens
- At the same time CRE early stage delinquencies have dropped from 1.37% to 1.17%
Yet the most significant observations is the ticking time bomb that is Wells Fargo's 1-4 Family 90+ past due loans.
WFC's Construction & Development portfolio is also on the verge of implosion.
Conveniently, these loans are low on Non-Accrual rates, meaning that net interest income is not currently affected (and leading to a falsely high EPS number), yet once everything hits the fan, the bank will be forced to charge off a staggering amount of debt at much higher principal amounts. Perhaps any and all rumors about WFC's viability should be evaluated very carefully going forward.
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