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CNBC TRANSCRIPT: CNBC'S ERIN BURNETT INTERVIEWS WELLS FARGO CFO HOWARD ATKINS TODAY ON CNBC'S "SQUAWK ON THE STREET" AT 9:40AM ET

WHEN: TODAY, THURSDAY, APRIL 9TH AT 9:40AM ET

WHERE: CNBC'S "SQUAWK ON THE STREET"

Following is the unofficial transcript of a First on CNBC interview with Wells Fargo CFO Howard Atkins today on CNBC's "Squawk on the Street."

All references must be sourced to CNBC

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ERIN BURNETT: MR. ATKINS THANKS VERY MUCH FOR BEING HERE TODAY. YOUR REPORT IS THE TALK OF THE TOWN, THE TALK OF THE MARKET. MANY PEOPLE, GIVEN WHAT THEY HEAR ABOUT BANKS ARE SHOCKED TO HEAR THE WORD RECORD NEXT TO PROFITS. WHY DID YOU CHOOSE TO COME OUT TODAY, A COUPLE WEEKS EARLY, AND GIVE US THE NUMBERS.

HOWARD ATKINS: WELL AS YOU KNOW ERIN, IN DECEMBER WE CLOSED THE WACHOVIA ACQUISITION, ONE OF THE LARGEST BANKING ACQUISITIONS IN US HISTORY. THIS IS THE FIRST QUARTER THAT THE TWO COMPANIES HAVE BEEN COMBINED OPERATIONALLY AND FINANCIALLY. WE FELT GIVEN THE IMPORTANCE OF THIS TRANSACTION, AND THIS BEING THE FIRST QUARTER, THE IMPORTANCE OF THIS TRANSACTION TO THE MARKETPLACE, THAT WE REALLY WANTED TO COME OUT AS EARLY AS WE COULD TO PROVIDE THAT NEWS.

BURNETT: I'VE SPOKEN TO SEVERAL ANALYSTS AND I'VE THROWN AT THEM, "IS THIS TOO GOOD TO BE TRUE?" SOME OF THEM WERE SLIGHTLY SKEPTICAL, A LOT OF THEM SAID IT'S SIMPLE, IF YOU TAKE A STEP BACK. THEY'RE GETTING A HUGE SURGE OF DEPOSITS AND THE MORTGAGE BUSINESS IS BOOMING. AND THAT'S WHERE YOU'RE GETTING THAT, FRANKLY, STUPENDOUS 4.1%, THAT INTEREST MARGIN. IS THAT BASICALLY HOW YOU WOULD SAY IT? BUSINESSES IS JUST THAT GOOD ON MORTGAGES?

ATKINS: I THINK THERE ARE A LOT OF GOOD THINGS ARE HAPPENING IN THE QUARTER. BUSINESS FLOWS WERE VERY GOOD. DEPOSIT IN-FLOWS WERE GOOD. WE'RE EXTENDING CREDIT. THE MORTGAGE BUSINESS, AS YOU KNOW, AS YOU JUST SAID, WAS VERY STRONG IN THE QUARTER. THAT'S GOOD VOLUME AND GOOD PROFITABILITY. IN ADDITION TO THAT, OUR OPERATING MARGIN - AND YOU MENTIONED THAT INTEREST MARGIN - WAS, IN FACT, BETTER THAN EVEN WE EXPECTED. HAD OVER 4%. SO, YOU KNOW, GOOD THINGS HAPPENING IN THE QUARTER.

BURNETT: WHERE DID THAT NET INTEREST MARGIN FULLY COME FROM THEN, WHERE DID THE BETTER THAN EXPECTED PART COME FROM?

ATKINS: LEGACY WELLS HAS ALWAYS HAD ONE OF THE HIGHEST, IF NOT THE HIGHEST, NET INTEREST MARGINS AMONG LARGE BANK PEERS, WITH THE COMBINATION OF WACHOVIA, WE'RE SEEING A LOT OF WACHOVIA'S HIGHER COST DEPOSITS ARE NOW MATURING. THAT'S GOOD NEWS FOR THAT INTEREST MARGIN. YOU KNOW, SPREADS GENERALLY IN BANKING HAVE BEEN A LITTLE BIT BETTER AS THERE'S BEEN MORE RATIONALITY IN THE MARKETPLACE. A LOT OF THE OLD PROVIDERS WHO WEREN'T QUITE AS RATIONAL IN PRICING BUSINESS ARE NOW NO LONGER IN BUSINESS. THAT LEAVES MORE FOR THE REST OF US TO DO. AND WE'RE TRYING TO DO OUR PART. YOU KNOW, WE'RE EXTENDING A LOT OF CREDIT, WE'RE TRYING TO KEEP CREDIT FLOWING IN THE ECONOMY. AND THAT'S HELPING PROFITABILITY RIGHT NOW.

BURNETT: AND ONE KEY QUESTION THAT PEOPLE HAVE, IS YOUR CHARGEOFFS. $3.3 BILLION. OBVIOUSLY THAT IS SIGNIFICANTLY LOWER THAN THE NUMBERS THAT THE WELLS FARGO AND LEGACY WACHOVIA HAD WAS CHARGEOFFS LAST QUARTER. THE REAL QUESTION HERE IS, ARE YOU ACTUALLY GOING TO COME OUT AND SAY YOU'RE SEEING AN IMPROVEMENT IN CREDIT QUALITY IN AN ECONOMY THAT IS IN A DEPOSITION RECESSION OR IS THIS JUST THAT WHEN YOU MERGE THE COMPANIES YOU WROTE OFF SO MUCH THAT YOU DON'T HAVE TO DO SO MUCH NOW?

ATKINS: IT'S REALLY MORE OF THE LATTER AT THIS POINT, ERIN. YOU KNOW, WHEN WE CLOSED THE ACQUISITION IN DECEMBER, WE DID WRITE OFF, ALREADY AT THAT POINT, THE LOSSES IN WACHOVIA - WACHOVIA'S LOAN PORTFOLIO, PARTICULARLY THE HIGHER RISK PORTFOLIO. SO THOSE LOSSES WERE REALLY BEHIND US AS OF DECEMBER AND AS A RESULT, WE'RE SEEING LOWER LOSSES AT THIS POINT. THAT REALLY MEANS A LOT OF THE LOSSES FROM THE WACHOVIA DEAL ARE BEHIND US. WE CAN NOW ENJOY THE BENEFIT OF THE MERGED COMPANIES IN TERMS OF CONSOLIDATION, IN TERMS OF REVENUE SYNERGIES AND THE LIKE.

DAVID FABER: MR. ATKINS, GIVEN THE SURGE IN YOUR STOCK TODAY, I'M CURIOUS AS TO WHETHER THE COMPANY WOULD CONSIDER AN EQUITY OFFERING OF SOME TYPE WHILE YOUR TCE IS IMPROVING IT IS STILL LOW AMONGST SOME OF YOUR PEER GROUP AT THIS POINT. IS IT POSSIBLE THAT WELLS WOULD CONSIDER DOING AN EQUITY OFFERING GIVEN ESPECIALLY THE STRONG PERFORMANCE OF YOUR STOCK TODAY?

ATKINS: WELL, YOU KNOW, OUR MAIN FOCUS HAS BEEN AND CONTINUES TO BE THE TO GROW EARNINGS. EARNINGS ARE REALLY KEY. EARNINGS IS THE BEST WAY OF GROWING CAPITAL. THAT'S WHAT HAPPENED IN THE FIRST QUARTER. WE DID ANNOUNCE, AS YOU REMEMBER, A COUPLE OF WEEKS AGO A CUT IN OUR DIVIDEND. EVEN THOUGH THAT WAS ANNOUNCED A COUPLE OF WEEKS AGO, THAT'S GOING TO BEGIN TO HAVE ITS FULL IMPACT ON CAPITAL GOING INTO THE SECOND QUARTER. YOU KNOW, WE'VE INDICATED THAT WILL INCREASE CAPITAL BY TEN BASIS POINTS PER QUARTER IN AND OF ITSELF. WE THINK REALLY THE BEST WAY OF GROWING CAPITAL IS TO KEEP THE EARNINGS GOING.

FABER: SPECIFIC TO THE MORTGAGE PORTFOLIO, YOU MENTIONED TAKING A LOT OF LOSSES ON WACHOVIA. A NUMBER OF PEOPLE IN THE STATE OF CALIFORNIA, SPECIFICALLY, I RELY ON TO TELL ME WHAT TRENDS LOOK LIKE, INDICATE THAT NOTICE OF DEFAULTS ARE NOW INCREASING AGAIN AND THERE'S AN EXPECTATION THAT FORECLOSURES WILL FOLLOW. A HOME EQUITY PORTFOLIO OF $129 BILLION, WHAT ARE YOUR EXPECTATIONS THERE? AND GIVE US A SENSE AS TO WHAT YOU THINK ABOUT HOUSING OVERALL AT THIS POINT AS YOU LOOK AT IT FROM YOUR VANTAGE POINT.

ATKINS: WELL, YOU KNOW, WE'RE PROBABLY NOT OUT OF THE WOODS YET IN TERMS OF THE OVERALL HOUSING MARKET. BUT WE'RE SEEING SOME GOOD SIGNS IN CALIFORNIA, ACTUALLY. YOU KNOW, THERE IS A LOT OF ACTIVITY, PARTICULARLY AT THE LOWER END OF THE MARKET. A LOT OF PROPERTY IS BEING TAKEN UP. AND PEOPLE ARE BUYING HOMES. YOU KNOW, IN OUR PARTICULAR CASE, YOU KNOW, WE HAD $190 BILLION WORTH OF MORTGAGE APPLICATIONS IN THE FIRST QUARTER. A LOT OF THAT WAS IN CALIFORNIA. SOME OF THAT IS NEW HOMES, NOT JUST RE-FI ACTIVITY. YOU KNOW, WE HELPED OVER 800,000 CUSTOMERS ACROSS THE COUNTRY AND, AGAIN, A LOT OF THAT IN CALIFORNIA. EITHER BUY A HOME OR REFINANCE A HOME IN THE QUARTER. SO THERE IS, YOU KNOW, THERE IS ACTIVITY. AND WE'RE KEEPING OUR FINGERS CROSSED IN TERMS OF HOPEFULLY GETTING A LITTLE CLOSER TO THE BOTTOM.

FABER: WITH THE UNEMPLOYMENT RATE GOING UP, YOU'VE GOT $129 BILLION OF UNSECURED CREDIT LINES TO CONSUMERS IN THE HOME EQUITY PORTFOLIO, CARRYING A VALUE OF $95 BILLION ON THE PICKER PAY. I'M WORKING OFF OF THE LAST NUMBERS, BY THE WAY, OF COURSE. DO YOU EXPECT YOU'RE GOING TO START TO SEE A SURGE IN LOSSES YOU'RE GOING TO HAVE TO TAKE OR IS IT GOING TO BE EVEN FROM HERE?

ATKINS: WELL AS I SAY, WITH UNEMPLOYMENT BEING HIGH, YOU KNOW, IT'S PREMATURE TO PREDICT THAT WE'VE SEEN THE BOTTOM OR THE TOP OF THE CREDIT CYCLE AND THAT THINGS HAVE TO IMPROVE FROM HERE. BUT LET'S KEEP IN MIND THAT EVEN WITH HIGH UNEMPLOYMENT, YOU KNOW, MOST PEOPLE IN THE COUNTRY ARE STILL WORKING AND, IN FACT, IN THE MORTGAGE BUSINESS, MOST HOMEOWNERS ARE STILL PAYING THEIR MORTGAGES FIRST AND SECONDS ON TIME. SO THAT'S - AND THE FACT THAT INTEREST RATES ARE AS LOW AS THEY ARE NOW, BOTH WITH RESPECT TO FIRST MORTGAGES AS WELL AS HOME EQUITY LINES, INTEREST RATES ARE DOWN A LOT IN THE LAST FEW MONTHS. YOU KNOW, THAT'S GOING TO HELP AS WELL.

SCOTT WAPNER: MR. ATKINS, DOES THE OUTLOOK THAT YOU GUYS GAVE TODAY MEAN THAT YOU WILL MAKE A MOVE TO PAY BACK THE T.A.R.F. AS SOON AS POSSIBLE OR HAVE YOU MADE THAT MOVE ALREADY? WHAT IS THE GOVERNMENT TELLING YOU IF YOU HAVE.

ATKINS: WE DON'T COMMENT REALLY ON ANY MATTERS WITH THE GOVERNMENT.

WAPNER: WHY WOULDN'T YOU MAKE A MOVE TO PAY BACK THE T.A.R.P. THEN IF THE RESULTS ARE THIS GOOD?

ATKINS: WE DID END INDICATE A COUPLE OF WEEKS AGO, WHEN WE TALKED ABOUT OUR DIVIDEND REDUCTION, THAT WE WOULD LIKE TO REPAY THE T.A.R.P. AS SOON AS SOON AS IS PRACTICAL. WE ARE PAYING A VERY HIGH DIVIDEND ON THE T.A.R.P. YOU KNOW, WE JUST PAID IN THIS PAST QUARTER $372 MILLION OF DIVIDENDS BACK TO U.S. TAXPAYERS ON THAT INVESTMENT. SO, YOU KNOW, WE WOULD LIKE TO REPAY IT AS QUICKLY AS WE CAN. OUR MAIN FOCUS RIGHT NOW IS EXTENDING CREDIT, GETTING CREDIT FLOWING INTO THE ECONOMY AGAIN, BEING PROFITABLE, AND GROWING THE COMPANY. AND IF WE CAN DO ALL THOSE THINGS, WE WILL NOT ONLY HELP THE ECONOMY AND HELP THE CONSUMER, BUT HELP OUR OWN BALANCE SHEET AND HELP OUR OWN EARNINGS AND CAPITAL AS WELL.

BURNETT: MR. ATKINS, QUICKLY BEFORE WE GO, THANK YOU FOR SHARING YOUR TIME WITH US. THE PUBLIC/PRIVATE PARTNERSHIPS. YOU TALK TO MANY THAT YOU DO HAVE, ACCORDING TO ALL THE ANALYSTS WE'VE SPOKEN TO. YOU'VE GOT A BIG PROBLEM, LOAN, SECURITIES PORTFOLIO. A LOT OF PEOPLE ARE TALKING ABOUT POTENTIALLY AUTO SUPPLIER DEBT AND THINGS LIKE THAT. DO YOU SEE THE PUBLIC/PRIVATE PARTNERSHIP AS PROPOSED BY THE TREASURY, SOMETHING YOU WOULD BE A SELLER INTO OR BUYER OF OTHER BANKS PROBLEM ASSETS?

ATKINS: FIRST OF ALL, WE THINK THE PUBLIC/PRIVATE PARTNERSHIP IS A REALLY GOOD IDEA. IN CONCEPT, IT SHOULD HELP PROVIDE A MECHANISM FOR INSTITUTIONS THAT WANT TO SELL TROUBLED ASSETS OFF THEIR BALANCE SHEET, DISPOSE OF THAT RISK. SO WE THINK IT'S GENERALLY A GOOD CONCEPT. IT IS SOMETHING THAT WE ARE LOOKING AT, FRANKLY BOTH AS A BUYER AND A SELLER.

BURNETT: FINAL QUESTION. HSBC DID THAT HUGE OFFERING. DAVID MENTIONED RAISING EQUITY. AT THIS POINT, IS RAISING EQUITY OFF THE TABLE OR IS THAT SOMETHING YOU THINK YOU CAN DO, TAKE THE GOVERNMENT TRAINING WHEELS OFF AND GO OUT AND DO IT QUICKLY?

ATKINS: WELL AS I SAY, WE'RE EFFECTIVELY RAISING EQUITY EVERY DAY BY EARNING MORE MONEY EVERY DAY. THAT'S THE FOCUS OF THE COMPANY RIGHT NOW.

BURNETT: MR. ATKINS, THANKS SO MUCH. WE APPRECIATE YOU TAKING THE TIME TO BE WITH US. WELLS FARGO NEWS IS WHAT'S CAUSING THE MARKET TO RISE.


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