Wells Fargo & Co. (WFC) Edges Ahead Of Earnings Estimates

wells fargo
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Wells Fargo & Co. (NYSE:WFC) released its second quarter earnings this morning, just edging out consensus estimates. The company reported earnings of 98 cents on revenue of $21.4 billion. Analysts were expecting the bank to report earnings of 92 cents per share on $21.2 billion in revenue.

Wells Fargo & Co. (WFC) Edges Ahead Of Earnings Estimates

Wells Fargo’s Second Quarter Performance

The bank set a new record net income at $5.5 billion, a 19 percent increase from the same quarter a year ago. Its diluted earnings per share grew for the 14th quarter in a row. Noninterest expenses fell $142 million to $12.3 billion during the quarter. Pre-tax pre-provision profits were $9.1 billion, a 3 percent increase. Return on average assets was 1.55 percent, a 14 basis point increase. Return on equity was reported to be 14.02 percent, a 116 basis point increase.

Wells Fargo Sees Continued Growth

Wells Fargo & Co. (NYSE:WFC) reported total average loans worth $800.2 billion, an increase of $32 billion from the same quarter a year ago. Quarter-end loans were $802 billion, an increase of $26.8 billion. Also quarter-end core loans were $714.4 billion, a $42.3 billion increase.

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Total average core deposits were recorded to be $936.1 billion, a $55.5 billion increase from the same quarter a year ago.

Credit Quality At Wells Fargo

Like JPMorgan Chase & Co. (NYSE:JPM), Wells Fargo also noted major improvements in credit quality. The bank’s net charge-offs were $1.2 billion during the second quarter of the year, a decrease of $1 billion from the same quarter a year ago. The annualized net charge-off rate was .58 percent, which was the lowest rate since the second quarter of 2006.

Wells Fargo & Co. (NYSE:WFC) noted non-performing assets worth $21.1 billion, a decrease of $3.8 billion in the same quarter a year ago. Also it saw a $500 million pre-tax reserve release because of continued strong credit performance.

Wells Fargo’s Capital Levels

The bank’s capital levels strengthened as well during the quarter. Its Tier 1 common equity under Basel I rose $15.9 billion from the same quarter a year ago. Tier 1 common equity ratio was 10.73 percent under Basel I at the end of June.

Wells Fargo & Co. (NYSE:WFC) said it was increasing its quarterly common stock dividend to 30 cents per share in the second quarter. It also purchased 26.7 million shares of its common stock during the quarter plus about 13 million more shares through a forward repurchase transaction that the bank believes will settle in the current quarter.