Wells Fargo Posts Record Quarterly Earnings Of $1.05

Wells Fargo & Co (NYSE:WFC) released its first quarter earnings results this morning, posting earnings of $1.05 cents per share on revenue of $20.6 billion. Analysts had been expecting earnings of 97 cents per share on revenue of $20.6 billion.

Breaking down Wells Fargo’s results

The bank’s net income of $5.9 billion was a 14% increase year over year. Revenue dipped slightly from $21.3 billion in the first quarter of last year. Wells Fargo & Co (NYSE:WFC)’s non-interest expenses were $11.9 billion, a decrease of $452 million. Its efficiency ratio was 57.9%, a 40 basis point increase. The bank posted a 1.57% return on assets—an increase of 8 basis points—and a 14.35% return on equity—a 76 basis point increase.

Wells Fargo & Co (NYSE:WFC) reported $823.8 billion in total average loans, a 3% year over year increase. The bank had $826.4 billion in loans at the end of the quarter, which is a 4% increase. Quarter-end core loans were $748.4 billion, a 6% increase. Total average core deposits were $973.8 billion, a 5% increase.

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Wells Fargo reports credit quality improvements

Wells Fargo & Co (NYSE:WFC) also reported that it continued to improve its credit quality. Net charge-offs were $825 million, a $594 million decrease year over year. The back posted a net charge-off rate of .41%, a decline from .72% in the same quarter a year ago. Non-performing assets fell $4.1 billion. The bank reported a $500 million reserve release because it continued to post strong performance in credit and also because of improving economic conditions.

The bank also strengthened its capital levels, posting a common equity Tier 1 ratio under Basel III of 11.36% at the end of March using the general approach. Under the advanced approach, this rate was 10.04%.

Wells Fargo & Co (NYSE:WFC) received a non-objection to its capital plan for this year, which included its proposed dividend of 35 cents per share for the second quarter. That dividend is still subject to board approval, and it is an increase from 30 cents a share in the first quarter. The capital plan also had an increase in share repurchasing activity. During the first quarter of the year, Wells Fargo’s board approved the bank to buy back 350 million more shares in common stock.