Wells Fargo beats by $0.02, beats on revs; mortgage originations in line with guidance
- Reports Q3 (Sep) earnings of $1.03 per share, $0.02 better than the Capital IQ Consensus of $1.01.
- Residential mortgage loan originations were $70 billion in the third quarter, up from $63 billion in the second quarter (in line with guidance of 'somewhat higher' originations QoQ).
- Net interest income in third quarter 2016 increased $219 million from second quarter 2016 to $12.0 billion, primarily due to growth in investment securities, loans, trading assets and mortgages held-for-sale.
- The provision for credit losses decreased $228 million from the prior quarter on lower oil and gas related net charge-offs.
- Net interest margin was 2.82 percent, down 4 basis points from second quarter 2016 primarily due to growth in long-term debt and deposits, partially offset by the benefit of earning asset growth. Net interest income in third quarter 2016 increased $219 million from second quarter 2016 to $12.0 billion.
- Total loans were $961.3 billion at September 30, 2016, up $4.2 billion from June 30, 2016.
- The efficiency ratio was 59.4 percent in third quarter 2016, compared with 58.1 percent in the prior quarter. The Company expects the efficiency ratio to remain at an elevated level (prior efficiency ratio guidance range was 55-59%).
- On September 8, 2016, WFC reached agreements with the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, and the Office of the Los Angeles City Attorney, regarding allegations that some of its retail customers received products and services they did not request. The amount of the settlements, which the Company had fully accrued for as of June 30, 2016, totaled $185 million, plus $5 million in customer remediation.