Wells Fargo Beats Expectations, Boosts Home Loans
Wells Fargo (NYSE: WFC) reported second-quarter results on Friday. The report suggests that the U.S. housing market may be strengthening.
The largest home mortgage lender and fourth-largest bank (by assets) beat earnings expectations by a penny a share with a 17% profit gain on a stronger mortgage loans business and lowered expenses.
Wells Fargo reported earnings of $4.62 billion, or $0.82 per share, up from $3.95 billion or $0.70 per share. Analysts had been expecting earnings of $0.81 per share.
Revenue was $21.3 billion, up 4% from a year earlier, and just short of analyst expectations of $21.4 billion.
“While the economic recovery remains uneven, we continued to meet our customers' financial needs and benefited from signs of stabilization in the housing market,” said CEO John Stumpf, in a statement.
Shares rose a little less than 1% to $33.06 in premarket trading.
Total loans rose to $775.2 billion in the quarter, up 1 percent from $766.5 billion in the first quarter ended in March. The company originated $131 billion of mortgages, up from $129 billion in the first quarter and $64 billion in the year-ago period.
Net interest margin – one of the key metrics for bank profit – was 3.91%, unchanged from the first quarter.
Wells Fargo cut about $500 billion in expenses in the quarter and improved its credit metrics.
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