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Wells Fargo reported second-quarter earnings that came in right in line with expectations.
The bank reported earnings per share of $1.01 on revenue of $22.2 billion.
Analysts were expecting earnings per share of $1.01 on revenue of $22.21 billion, according to Bloomberg.
In the same quarter last year, Wells beat expectations, reporting earnings per share of $1.04 ($1.03 expected) on revenue of $24.3 billion.
Total profit declined from the same quarter a year ago, falling to $5.56 billion from $5.72 billion in 2015.
Net interest margin came in at 2.86%, against expectations of 2.90%.
“Wells Fargo’s second quarter results demonstrated our ability to generate consistent performance during periods of economic, capital markets and interest rate uncertainty,” said CEO John Stumpf in a release accompanying the earnings.
The firm reported growing income from loans, which make up the bulk of Wells’ business, but reported a $99 million decline for income not from loan interest. The decline was largely driven by a drop in mortgage banking and insurance income.
Total loans for the bank grew $9.9 billion over the second quarter to $957.2 billion. Loans of all types grew according to the release, the year-over-year growth from the second quarter of 2015 was:
- Commercial real-estate loans up $10.7 billion, or 8%Commercial and industrial loans up $39.0 billion, or 14%Mortgages up $9.3 billion, or 3% Automobile up $4.1 billion, or 7% Credit card up $3.0 billion, or 10%
Additionally, the firm reported a 0.39% charge-off rate, which measures what percentage of loans the bank took a loss on.
“The loan portfolio continued to perform well, led by further improvement in consumer real estate,” said Chief Risk Officer Mike Loughlin in the earnings release.
“Oil and gas portfolio performance during the quarter was generally consistent with our expectations. Results in the oil and gas portfolio remained under pressure with higher credit losses and non-accrual loans, while our allowance coverage ratio for the portfolio remained stable at 9.2 percent at quarter-end.”
- Wells Fargo
After calling out the weakness of the energy sector in the first quarter, the bank said that in the past three months the charge-offs from oil and gas increased by $263 million driven by “deterioration in borrower financial performance.”
In the first quarter, Wells beat on the top and bottom lines, reporting earnings of $0.99 a share ($0.97 expected) on revenue of $22.2 billion, beating estimates of $21.61 billion.
The big story during the second quarter was the UK’s decision in June to leave the European Union, which sent shockwaves through markets.
Brexit was less of a big deal for Wells than for other major US banks, as Wells has less exposure to the UK. However, Wells has a larger portfolio of home mortgages, and tumbling bond rates due to the Brexit have led to near all-time lows in mortgage rates that may have impacted the bank’s net interest margins.
JPMorgan reported Q2 earnings on Thursday, beating expectations. Citi also reported Friday morning, also matching expectations. Bank of America Merrill Lynch will report Monday, Goldman Sachs Tuesday, and Morgan Stanley Wednesday.