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Friday, January 15, 2016

Wells Fargo (WFC) reported 4Q earnings on Fri 15 Jan 2016 (before open)

** charts before earnings **






** charts after earnings **







Wells Fargo reports EPS in-line, revs in-line :
  • Reports Q4 (Dec) earnings of $1.03 per share, in-line with the Capital IQ Consensus of $1.03; revenues rose 0.7% year/year to $21.59 bln vs the $21.75 bln Capital IQ Consensus. 
  • Total loans were $916.6 bln at Dec 31, 2015, up $13.3 bln from Sept 30, 2015. Q4 loan growth was broad-based across all portfolios (other than real estate 1-4 family junior lien mortgages) and did not include any loan portfolio acquisitions. Core loan growth was $15.4 bln, or 2%, as non-strategic/liquidating portfolios declined $2.1 bln in the quarter. Total average loans of $912.3 bln, up $62.9 bln, or 7%
  • During Q4, residential mortgage loan originations were $47 bln, down $8 bln linked quarter on seasonality. The production margin on residential held-for-sale mortgage loan originations5 was 1.83%, compared with 1.88% in third quarter. Net mortgage servicing rights (MSRs) results were $417 mln, compared with $253 mln in third quarter 2015.
  • Net interest income in Q4 increased $131 mln from Q3 to $11.6 bln, largely driven by growth in earning assets. Net interest margin was 2.92%, down 4 bps QoQ.
  • Credit quality: "The quarterly loss rate (annualized) remained low at 0.36% and nonperforming assets declined by $497 mln, or 15% (annualized), from the prior quarter. The allowance for credit losses in the fourth quarter was stable (no reserve build or release) as continued credit quality improvements in the residential real estate portfolio were offset by higher commercial reserves reflecting continued deterioration within the energy sector. Future allowance levels may increase or decrease based on a variety of factors, including loan growth, portfolio performance and general economic conditions." Book value +0.4% QoQ to $33.81/share.

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