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Wells Fargo reports 46% QOQ spike in criticized commercial loans

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Wells Fargo reports 46% QOQ spike in criticized commercial loans

Oiland gas troubles drove a 46.42% linked-quarter increase in criticizedcommercial loans for Wells Fargo& Co., while the consumer portfolio remained relativelypristine.

Inits regulatory filing, the bank reported $38.32 billion of criticizedcommercial loans, or 7.88% of the book, excluding purchased credit-impairedloans. By product type, the increases came in commercial and industrial loansand lease financing, while real estate mortgage criticized loans actuallydecreased from the 2015 fourth quarter. The bank stated the increase incriticized C&I and lease financing loans was "predominantly" inits oil and gas portfolio.

Nonaccrualloans also spiked in the same product types, with nonaccrual C&I loans morethan doubling from the previous quarter to $2.91 billion, or 0.91% of theportfolio, also excluding PCI loans. Lease financing nonaccrual loans nearlyquadrupled from a lower base to $99 million, or 0.52% of the portfolio.

Onthe upside, the consumer loan portfolio continued to show strength, with loans30 days late or more declining 13.26% from the previous quarter to $9.53billion, or 2.16% of the portfolio. Further out on the delinquency timeline,the figures still improved, with loans at least 90 days late dropping to 1.10%of the portfolio in the first quarter from 1.25% in the 2015 fourth quarter.