Wells Fargo & Co Continues Banks’ EPS Winning Streak

Wells Fargo & Co Continues Banks’ EPS Winning Streak
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Wells Fargo released its latest earnings report before opening bell this morning, posting net earnings of $1.04 per share on revenue of $21.3 billion, a 3% increase. Analysts had been looking for earnings of 98 cents per share on $21.28 billion for the first quarter. In the same quarter last year, Wells Fargo posted net earnings of $1.05 per share.

The report comes the same day JPMorgan posted better-than-expected earnings results

Key metrics from Wells Fargo’s earnings report

Net income fell from $5.9 billion last year to $5.8 billion this year. Wells Fargo reported $1.2 trillion in total deposits, which was in line with consensus estimates from FactSet and a 9% increase year over year. Net interest income missed slightly, coming in at $11 billion compared to the consensus estimate of $11.2 billion.

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Net charge-offs fell $117 million to $708 million in the first quarter. The net charge-off rate also declined, falling from 0.41% to 0.33% for the quarter. Total average loans increased $13.8 billion quarter over quarter to $863.3 billion for the first quarter. As of the end of the quarter, loan balances were down $1.3 billion to $861.2 billion.

Wells Fargo’s Community Banking segment recorded $3.665 billion in net income, while its Wholesale Banking division saw $1.797 billion. The bank’s Wealth, Brokerage and Retirement segment posted $561 million in net income for the first quarter.

“Our solid first quarter results again reflected the benefit of our diversified business model and the continued focus of our 266,000 team members on serving the needs of consumer and business customers,” Chairman and Chief Executive John Stumpf said in a statement this morning. “We continued to strengthen our customer relationships in the quarter, as reflected in strong growth in deposits and primary checking customers.

Wells Fargo updates capital levels

The bank also reported a Basel III Common Equity Tier 1 ratio of 10.53% under the Advanced Approach. The Federal Reserve approved Wells Fargo’s 2015 Capital Plan. That plan included a dividend of 37.5 cents per share for the second quarter, which is subject to the approval of the board of directors. That’s also an increase from the first quarter’s dividend of 35 cents per share.

As of this writing, shares of Wells Fargo were down 0.92% to $54.09 per share in premarket trading after this morning’s earnings report.

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