Wells Fargo little-changed after inline quarter

Net income of $5.7B up 4% Y/Y. EPS of $1.01 up 3%.

ROA of 1.47% slips from 1.57% in Q1, 1.55% a year ago.

ROE of 13.4% slips from 14.35% in Q1, 14.02% a year ago.

Net interest income of $10.8B gains $176M from Q1, with NIM of 3.15% down five basis points thanks to strong deposit growth, but not enough to do with the money.

Noninterest income of $10.3B up $300M from Q1, with mortgage banking income halting its steep decline - it rose to $1.7B, up $213M from Q1. One would expect a gain thanks to seasonality though - on a Y/Y basis, mortgage banking income fell 39%. Overall noninterest income fell 3% Y/Y.

Noninterest expense of $12.2B up $246M from Q1 and essentially flat from a year ago.

Common Equity Tier 1 ratio of 11.31% vs. 11.36% in Q1, 10.71% a year ago. 39.4M shares were repurchased during Q2, plus an estimated 19.4M shares through a forward repurchase deal expected to settle in Q3.

Credit losses of $717M in Q2 vs. $1.2B a year ago. Bank releases $500M for its credit loss allowance (vs. total income of $5.7B), but expects lower level of releases going forward.

Conference call begins at 10 ET.

Previously: Wells Fargo EPS in-line, beats on revenue

WFC -0.3% premarket

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Comments (14)
  • Deja Vu
    , contributor
    Comments (1817) | Send Message
    I can't believe this company still exists on the earth. My experience with them on my home mortgage was so painful (sneaking in a floating rate on the day of closing after charging me points for a fixed rate lock, lots of hidden fees and gotcha clauses hidden in fine print on page 132 of the contract, charging me sky high floating interest rates, working as slow as possible when I tried to refinance with another company. Arrogant customer service. I could go on. I, an MBA from University of Chicago, was taken for tens of thousands of $$ by this company.


    If ever a company deserved to have no repeat customers Wells Fargo would be it. DO they really have such a endless supply of suckers because I'm pretty sure no one will voluntarily deal with them a second time? The fact that that old confidence trickster crony capitalist Buffett is a major shareholder should be sufficient warning I guess.
    11 Jul 2014, 08:41 AM Reply Like
  • VelcroWonderCat
    , contributor
    Comments (44) | Send Message
    Sounds like you have the basis for a lawsuit there, but your personal bad experience is not a reason not to invest in WFC since they're easily the best run and most financially stable of the mega banks.


    And if you think WFC customer service is horrid -- and I respect your opinion on that point even if I don't necessarily agree or disagree with it -- try doing business with BAC. Now, that's an experience I wouldn't wish upon my worst enemy.
    11 Jul 2014, 09:00 AM Reply Like
  • JohnBinTN
    , contributor
    Comments (4428) | Send Message
    Ick. You had to initial that fine print, though... Buyers can take as long as they want to read the contract... In fact, you can (and sometimes should) have a RE attorney present at close to avoid any nasty surprises hidden in legalese...
    11 Jul 2014, 09:18 AM Reply Like
  • CassandraSees
    , contributor
    Comments (657) | Send Message
    I am sorry for your personal experience, but I have had three mortgages, over the years, with Wells Fargo and had absolutely no problems when refinancing for a lower interest rate and then finally to a credit union to finish the final mortgage note (they had one of the lowest rates in the market at that time) ...was always treated fairly .... given options and made my decisions on what was available to me in the open market ...


    The changing of your contract at the last minute does bring up questionable legal points (132 pages??? Yours perhaps was a foreclosure???) I hope you had a lawyer to represent you at closing.
    11 Jul 2014, 09:53 AM Reply Like
  • moseharper
    , contributor
    Comments (663) | Send Message
    If it was a refi, why did you not rescind?
    11 Jul 2014, 10:14 AM Reply Like
  • jj1937
    , contributor
    Comments (5638) | Send Message
    On a Y/Y basis, mortgage banking income fell 39%!!!


    I thought they were better than Chase. Thanks for the tip. Won't go there.
    12 Jul 2014, 11:56 PM Reply Like
  • 8747S1115R
    , contributor
    Comments (275) | Send Message
    Why is the University of Chicago giving MBAs to suckers? Please take this elsewhere. You made a mistake, its ultimately the consumers fault for signing and understanding and doing any type of business with any bank. Yes mostly all the banks were doing shady lending at some point, this is free market capitalism remember. We ride it until the wheels fall off.
    13 Jul 2014, 06:24 PM Reply Like
  • Phr3d
    , contributor
    Comments (457) | Send Message
    Deja Vu, reading a bit of your comment history, I'll take your bad experience with a grain of salt? nice friend like though..
    is there anything that you Do like, ya know, not just noting their accidental positive impression to you, against your inevitable realization of their ghastliness.. but actually like?


    hint: retail cross sell of 6.17 products per household -- not only do they Not subscribe to your rant, on average WFC customers buy/use SIX MORE of Wells products after using ONE.


    good luck with your rant, MBA announcage and Buffet hatage will definitely help.


    back to investor information:
    Many ouches this quarter.. many irons (horses) awaiting economy, but 2014 is starting to look.. flat.
    11 Jul 2014, 09:06 AM Reply Like
  • crazty4tennis
    , contributor
    Comments (1231) | Send Message
    Long on WFC.
    11 Jul 2014, 09:14 AM Reply Like
  • jstratt
    , contributor
    Comments (3982) | Send Message
    So lower Revenue, lower ROA, lower ROE, lower NIM, lower Tier I capital and earnings aided by a 500MM release of loss reserve.


    Well run bank but this is a quarter where banks are facing a headwind.
    11 Jul 2014, 10:32 AM Reply Like
  • psychological-dividends
    , contributor
    Comments (820) | Send Message
    Right, this was a harder quarter.


    Do you think the fact that interest rates are nudging higher and the decrease in refinancing is hurting NIM? I'm trying to educate myself on these core savings/loan metrics.
    11 Jul 2014, 12:15 PM Reply Like
  • jstratt
    , contributor
    Comments (3982) | Send Message
    I am not sure interest rates are heading higher. That is the problem as they have headed lower, when everyone expected them to be higher.


    Longer term I do expect higher rates and higher NIM. Refi is more of a fee based income stream than a NIM issue.


    The positive for WFC is that they did grow their deposit base significantly and they did generate reasonable new loan volume. I wouldnt be surprised if WFC is the best report of the mega banks.
    11 Jul 2014, 11:10 PM Reply Like
  • mountaintop
    , contributor
    Comments (74) | Send Message
    Deja, Worked for butffett and company as a employee, we got treated 10x better by Ken Lay and Jeff Skilling than WB's hatchet men who are expected to get blood out of rocks. Ends justify the means for these boys. Thanks for the info another reason and reminder to boycott any company associated with WB.
    13 Jul 2014, 04:34 PM Reply Like
  • jdhawk
    , contributor
    Comments (47) | Send Message
    When you compare the revenue and earnings that came out this morning for C and that stock went UP on the news you have to wonder what investors are thinking.


    WFC outperformed C in every respect and it hasn't suffered from constant lawsuit bombardment by DOJ, et al.


    WFC is the best of the mega banks. Although off of it ~$53 dollar high, I am still long.
    14 Jul 2014, 11:45 PM Reply Like
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