SAN FRANCISCO Wells Fargo & Co. said Wednesday that it would take an after-tax charge of approximately $1.13 billion, or 65 cents per share, for the second quarter.
Roughly $1.05 billion of the charges are connected to write-downs of publicly traded and private equity securities, mainly in the venture capital portfolio, the company said in a prepared statement.
Other special after-tax charges approximately $80 million include approximately $70 million from the auto finance portfolios acquired when it bought First Security Corporation in October.
The bulk of these charges, in fact, are reductions of the noncash venture capital gains recognized in late 1999 and 2000, said chief financial officer Ross Kari. Those gains resulted from the acquisition of several companies, held in our portfolio of venture capital investments, by publicly traded companies.
Examples of such investments include Cerent Corp., acquired by Cisco Systems Inc. in fourth quarter of 1999, and Siara Systems, acquired by Redback Networks in first quarter of 2000, Mr. Kari said.
Wells Fargo previously announced that the second-quarter results also will include approximately $90 million, or 5 cents per share, of after-tax charges reflecting the cost of completing the integration of First Security, other acquisitions, and other charges.
We continue to be optimistic about the fundamentals of our business, said chairman and chief executive Dick Kovacevich. Core revenue trends continue to be strong.