Wells Fargo Earns $1.03 per Share

From the WSJ:

Wells Fargo & Co. said its fourth-quarter profit was flat compared with the year-ago period, as the nation’s fourth-largest bank by assets continued to wrestle with a slump in oil prices.

The San Francisco-based bank reported a profit of $5.71 billion, or $1.03 a share. That compares with $5.71 billion, or $1.02 a share, in the same period of 2014. Analysts polled by Thomson Reuters had expected earnings of $1.02 a share.

Revenue rose to $21.6 billion from $21.4 billion. Analysts had expected $21.8 billion.

(…)

Wells Fargo’s mortgage business, the largest in the United States by volume, earned $1.66 billion in fees in the fourth quarter, up 10% from the $1.52 billion it earned in same period a year ago. The bank extended $47 billion in home loans between the end of September and the end of December, compared with $44 billion in the fourth quarter of 2014 and $55 billion in the third quarter of 2015.

Costs decreased 2% to $12.4 billion from $12.65 billion. Expenses as a share of revenue in the fourth quarter was 57.4%, within the 55%-59% range that Wells Fargo targets for its so-called “efficiency ratio.”

Loan growth remained a bright spot for Wells Fargo. Total loans at the end of the fourth quarter were $916.56 billion, a 6% increase from $862.55 billion in the same period a year ago. Commercial and industrial loans, which make up one of the largest parts of the bank’s total portfolio, were $299.89 billion, up 10% from $271.8 billion in the fourth quarter of 2014.

Despite the loan growth, Wells Fargo reported that the profitability of its lending activities continued to be challenged. Its net interest margin, a measure of how profitably it can lend out its customers’ deposits, fell to 2.92% from 2.96% at the end of September and 3.04% in the fourth quarter a year ago.

Posted by on January 15th, 2016 at 8:43 am


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