Wells Fargo & Co (NYSE:WFC) released its third quarter earnings report before opening bell this morning, posting diluted earnings of $1.02 per share on $21.2 billion in revenue. Analysts had been expecting those numbers exactly.
Breaking down Wells Fargo’s earnings results
The bank’s net income rose 3% year over year to $5.7 billion. Wells Fargo saw a pretax pre-provision profit of $9 billion, a 7% increase. The firm’s efficiency ratio improved by 140 basis points, rising to 57.7%. It recorded a 1.4% return on assets and 13.1 % return on equity. Wells Fargo reported $833.2 billion in total average loans and $1.1 trillion in total average deposits.
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It also saw more improvements in credit quality, as net charge-offs fell $307 million year over year to $668 million. Non-performing assets fell 15% or $3 billion, while the bank saw a $300 million reserve release because of its credit quality improvement. Allowance for credit losses was $13.5 billion as of Sept. 30.
Total loans rose $9.9 billion from the previous quarter to $838.9 billion. The main drivers of the growth were credit cards, revolving credit, installment loans, industrial, real estate construction, automobile and 1-4 family first mortgages. Wells Fargo reported $289 billion in investment securities.
The bank’s Wealth, Brokerage and Retirement segment saw $550 million in net income and $3.6 billion in revenue. The firm reported client assets of $219 billion and IRA assets of $354 billion, In retail brokerage, Wells Fargo saw $1.4 trillion in client assets.
In Wholesale Banking, net income was $1.9 billion, while revenue was $5.9 billion. Community Banking saw $3.5 billion in net income and revenue of $12.8 billion for the quarter.
Wells Fargo continues to see strong capital levels
The bank reported a Basel III Common Equity Tier 1 ratio of 11.6% as of the end of September. The Advanced Basel III Tier 1 ratio was 10.46% at the end of the quarter.
Wells Fargo reported that the number of its common shares fell 34.9 million during the third quarter as it bought back 48.7 million shares.