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WELLS FARGO 'A' SENIOR, OTHER DEBT OFF FITCHALERT AFTER PROVISION -- FITCH FINANCIAL WIRE --

 WELLS FARGO 'A' SENIOR, OTHER DEBT OFF FITCHALERT AFTER PROVISION
 -- FITCH FINANCIAL WIRE --
 NEW YORK, Dec. 18 /PRNewswire/ -- Wells Fargo & Co. ratings are affirmed after the announcement of a $700 million fourth quarter loan loss provision. All Wells ratings are removed from FitchAlert, where they were placed with negative implications on Nov. 11. The action applies to the corporation's 'A' senior debt rating, 'A-' subordinated debt, 'BBB+' preferred stock, and 'F-1' commercial paper. The 'A/F-1' long and short term ratings for certificates of deposit of Wells Bank, N.A., and the 'A/F-1' ratings for the bank's letters of credit are also affirmed.
 With its $700 million fourth quarter provision, Wells's asset quality measurements and reserve coverage ratios fall within parameters outlined in the FitchAlert. The provision followed the completion of a federal banking examination which concentrated on commercial real estate exposure. While this will create a net loss for the fourth quarter, the corporation is expected to post annual net income in the range of $20-25 million.
 The loan loss provision will have boost Wells's loan loss reserve to $1.65 billion, equal to approximately 80 percent of the $2.025 billion of nonperforming loans that Fitch expects Wells to report at year-end 1991. The problem loan reserve coverage stood at 63 percent as of Sept. 30. Total nonperforming assets are projected to be up less than 10 percent from the end of 1991's third quarter. The modest increase is a result of $200 million in charge-offs as well as the sale of nonperforming highly leveraged transactions which will amount to about $230 million in carrying value.
 Both the parent company and the Wells Fargo Bank have materially bolstered liquidity during 1991. Also, double leverage at the parent holding company has been eliminated. Capital ratios will be aided by the 50 percent reduction in common share dividends. Wells's leverage ratio as of Dec. 31, 1991 is expected to remain above 5 percent
 The outlook for California's economic environment is not positive. Economic activity levels are declining and unemployment, already above national averages, is trending higher. The coupling of a weak economy with Fitch's view of Wells Fargo's commercial real estate exposure suggests that pressure on profitability will continue through 1992 and the possibility of another sizable special provision cannot be ignored. Wells Fargo's credit trend is declining.
 -0- 12/18/91
 /CONTACT: Fred W. DeBussey of Fitch, 212-908-0521/
 (WFC) CO: Wells Fargo & Co. ST: California IN: FIN SU: RTG


JT -- NY027 -- 3353 12/18/91 11:00 EST
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Publication:PR Newswire
Date:Dec 18, 1991
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