Shunning any effects of a difficult residential mortgage environment, Wachovia Corp. today reported net income of $2.30 billion during the fourth quarter of 2006, compared with $1.71 billion during the fourth quarter of 2005. The nation’s fourth largest bank saw its mortgage holdings more than double during the fourth quarter of 2006, as it completed its acquisition of Calif.-based Golden West Financial. Wachovia purchased Golden West in May 2006 for $25.5 billion. “For the fifth consecutive year, Wachovia has delivered double-digit earnings per share growth,” said Ken Thompson, Wachovia chairman and chief executive officer.
“In the face of a challenging interest rate environment, we worked hard to control expenses, manage risk appropriately, create revenue synergies between our businesses, and prioritize our investments while continuing to provide industry-leading customer service. We believe our mix of businesses and the markets we serve, plus our demonstrated success in execution, will continue to position us well in any market environment.” Wachovia’s residential mortgage loan portfolio more than doubled during the fourth quarter, reaching $241.2 billion. The bank’s portfolio stood at $116.2 billion at the end of the third quarter of 2006. Wachovia CFO Tom Wurtz said in a conference call Tuesday that further expansion in the Golden West business, however, will require introducing new products to borrowers. The Calif.-based mortgage lender is well known as an option-mortgage loan specialist, and with margins flattening out in the face of the end of the Fed’s rate-hiking campaign, Wurtz said he expects mortgage conditions to slow Golden West’s growth somewhat during 2007.