Wells Fargo Earns $1.04 per Share

Wells Fargo (WFC) reported Q1 earnings this morning of $1.04 per share. That was six cents better than estimates.

Wells Fargo & Co., the most valuable U.S. bank, posted profit that beat analysts’ estimates as lower interest rates spurred more borrowers to purchase homes or refinance debt.

First-quarter net income fell 1.5 percent to $5.8 billion, or $1.04 a share, from $5.89 billion, or $1.05, a year earlier, the San Francisco-based company said Tuesday in a statement. The average estimate of 24 analysts surveyed by Bloomberg was for profit of 98 cents a share. Net interest margin dropped below 3 percent for the first time since the 1990s.

“The high end of the mortgage market, the larger-balance loans, are doing better than the run-of-the-mill loans,” Jennifer Thompson, an analyst at Portales Partners LLC in New York, said in an interview before the results were released. The bank is “well positioned” for that type of lending, she said.

Chief Executive John Stumpf is searching for more revenue while trying to cap expenses as he awaits higher interest rates from the Federal Reserve, which most economists expect to act later this year. The bank’s efficiency ratio, a measure of how much it costs to bring in a dollar of revenue, has stayed at the top end of management’s 55 percent to 59 percent range.

Chief Financial Officer John Shrewsberry has highlighted one area of strength, the U.S. mortgage market. On Feb. 10 he said that volume at the nation’s largest home lender would be similar to the fourth quarter, when it made $44 billion in loans, “despite the fact that the first quarter usually reflects a slower purchase market.”

Posted by on April 14th, 2015 at 9:15 am


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