Daily News: July 13, 2012

Wells Fargo Reports Record Q2 Earnings

Wells Fargo reported record second-quarter net income of $4.6 billion, up from $4.2 billion sequentially and $3.9 billion for the same quarter in 2011. For the first six months of 2012, net income was $8.9 billion compared with $7.7 billion a year ago.

Revenue was $21.3 billion in the second quarter, compared with $21.6 billion in first quarter 2012. Businesses generating linked-quarter revenue growth included capital finance, capital markets, commercial banking, commercial mortgage servicing, commercial real estate, corporate banking, corporate trust, debit card, equipment finance, global remittance, government and institutional banking, home equity, international, merchant services, real estate capital markets and wealth management.

Commenting on portfolio quality, chief risk officer Mike Loughlin said, “Credit quality trends continued to show improvement in the second quarter, with reductions in net losses, non-performing assets, non-accrual loans, and loans 90 days or more past due and still accruing.”

Second quarter 2012 net charge-offs were $2.2 billion, or 1.15% (annualized) of average loans, which was the lowest charge-off rate since the third quarter 2007. The loan loss reserve release was $400 million, equal to the release in the first quarter. “Credit performance over the past two years has steadily improved and the second quarter results continued that trend. Absent significant deterioration in the economy, we expect continued but more modest improvement for the remainder of the year, and we continue to expect future reserve releases in 2012,” said Loughlin.

To read the Wells Fargo news release, click here.