Wells Fargo earnings rise in 3Q as loan book grows
DANIEL WAGNER AP Business Writer
7:52 AM, Oct 12, 2012
Wells Fargo posted record earnings in the third quarter as higher fees and trading profits boosted the bank's revenue.
Wells, the nation's biggest mortgage lender, expanded its loan portfolio by increasing loans to consumers. More homeowners refinanced at record-low mortgage rates.
Wells' net income in the quarter ended Sept. 30 rose 23 percent, to $4.72 billion from $3.84 billion in the same period last year.
That amounts to 88 cents per share, a penny higher than the average estimate of analysts surveyed by FactSet. Wells earned 72 cents per share in last year's third quarter.
Overall revenue rose 8 percent to $21.21 billion, slightly lower than analysts expected. Net interest income, which includes interest on loans, edged up 1 percent to $10.66 billion from $10.54 billion.
Loans to consumers rose 4 percent from the prior quarter, to $335.28 billion from $322.30 billion in the period ended June 30. Corporate loans shrank modestly.
More people parked their money at Wells, boosting core deposits by 7 percent from a year earlier, $895.4 billion from $836.8 billion a year earlier.
With more deposits on hand, banks have a stronger capital position and can lend more easily.
Wells, based in San Francisco, appears more confident that those loans will be repaid. It released $200 million that it had set aside earlier to cover possible loan losses.
The earnings don't include dividend payments to preferred shareholders.
The stock fell $3.16 to $34.07 in pre-market trading Friday.