Wells Fargo earnings top estimates as it releases $1.7 billion from loan loss reserves
Wells Fargo & Co. Inc. (WFC) said Thursday it had net income of $5.122 billion, or $1.17 a share, in the third quarter, up from $3.216 billion, or 70 cents a share, in the year-earlier period. Revenue fell to $18.834 billion from $19.316 billion. The FactSet consensus was for EPS of $1.00 and revenue of $18.273 billion. The bank said it released $1.7 billion from its credit loss reserve, equal to a 30 cents bump in EPS. It also booked a charge of $250 million, or 5 cents a share, for an enforcement action taken by the Office of the Comptroller of the Currency relating to unsound practices in home lending. The bank said average loans fell to $854.0 billion from $931.7 billion a year ago. Average deposits rose to $1.451 trillion from $1.399 trillion. "Charge-offs were low, net interest income stabilized and period-end loans grew for the first time since first quarter 2020," Chief Executive Charlie Scharf said in a statement. Net interest income fell to $8.909 billion from $9.379 billion a year ago, due to lower loan balances. Noninterest income edged down to $9.925 billion from $9.937 billion, as improved results in private equity and venture capital and higher card, deposit-related and investment banking fees were offset by lower mortgage-banking revenue, lower gains on the sale of securities and lower markets revenue. In the bank's retail operations, home lending fell to $2.012 billion from $2.527 billion. "The decline in mortgage banking income was primarily due to lower gain on sale margins and lower originations, as well as a decline in servicing fees, partially offset by higher gains from the re-securitization of loans we purchased from mortgage-backed securities last year," the bank said. Shares were up 0.5% premarket and have gained 53% in the year to date, while the S&P 500 has gained 16%.
(END) Dow Jones Newswires
October 14, 2021 10:23 ET (14:23 GMT)
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