Wells Fargo Reports Record Q3 Earnings
Wells Fargo reported record net income of $5.6 billion for third quarter 2013, up 13% $4.9 billion for third quarter 2012. The bank noted credit losses of $975 million compared with $2.4 billion a year earlier represented a 59% year/year improvement. For the first nine months of 2013, net income was a record $16.3 billion compared with $13.8 billion for the same period in 2012.
The bank said revenue was $20.5 billion, compared with $21.4 billion in second quarter 2013. With net interest income stable, revenue declined primarily from lower mortgage banking revenue and trust and investment fees, partially offset by higher market sensitive revenue and other income.
“Wells Fargo continued to demonstrate strong and consistent financial performance in the third quarter,” said chairman and CEO John Stumpf. “As our economy continues to transition to higher interest rates, our diversified business model and strong risk discipline contributed to record earnings per share along with continued strength in return on assets, return on equity and capital. The improvement in the housing market has been beneficial to our customers and significantly contributed to our broad-based credit improvement in the quarter.”
Total loans were $812.3 billion, up $10.4 billion sequentially. Total average loans were $804.8 billion, up $4.5 billion from the prior quarter. The bank said the asset-backed finance, corporate banking, credit card, equipment finance, government and institutional banking, mortgage portfolios, personal credit management, retail brokerage, and retail sales finance portfolios all experienced year-over-year double-digit growth.
“Credit performance continued to be very strong in the third quarter. Loss levels improved from the second quarter and were at historically low levels,” said chief risk officer Mike Loughlin. “Credit losses were $975 million in third quarter 2013, compared with $2.4 billion in third quarter 2012, representing a 59% year-over-year improvement. The quarterly loss rate fell to 0.48% with commercial losses of only 2 basis points and consumer losses of 0.86%. Nonperforming assets declined by $360 million, or 7% (annualized) from last quarter. We released $900 million from the allowance for credit losses in the third quarter, reflecting improvement in home prices and credit performance. Given these favorable conditions, we continue to expect future reserve releases absent a significant deterioration in the economic environment.”
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