|Wells Fargo Reports 12 Percent Profit Jump|
SAN FRANCISCO (AP) - Wells Fargo & Co.'s second-quarter earnings rose more than 12 percent due to broad-based growth in revenue and improving credit quality.
The nation's fifth-largest bank by assets Tuesday reported second-quarter net income of $1.71 billion, or $1 a share, up from $1.53 billion, or 90 cents a share, in the same quarter a year earlier.
The latest quarter included charges of 14 cents a share to reposition the bank's balance sheet due to rising interest rates. The charges reflect a debt buyback and the sale of $14 billion in securities and adjustable rate mortgages.
Results also included 1 cent a share in market-sensitive income, which reflects net gains and losses on debt securities available for sale and equity investments.
A Thomson First Call survey of analysts produced an average earnings estimate of $1.04 a share.
Revenue increased 7 percent to $7.4 billion, despite a $222 million reduction for losses taken on the asset-repositioning actions. The First Call average estimate was $7.33 billion.
Wells Fargo said it had strong results in most of its businesses during the second quarter, including consumer deposits and loans, payment processing, insurance brokerage, trust and investments including private client services, small business, corporate banking, mortgage banking and consumer finance.
Second-quarter net loan charge-offs were down 6 percent, and nonperforming assets declined 8 percent. The provision for loan losses was $440 million in the latest quarter and $421 million a year earlier.
Average loans were up 30 percent to $266.2 billion, and average core deposits rose 9 percent to $224.9 billion. Wells Fargo said its average banking household now has 4.4 products with the company, a figure believed to be among the highest, if not the highest, in the country.
Commercial loan growth was broad-based in the second quarter and consumer credit demand continued to be strong, Wells Fargo said.