LONDON, UK / ACCESSWIRE / July 18, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Wells Fargo & Co. (NYSE: WFC) (“WFC”), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=WFC, following the Company’s release of its financial results on July 14, 2017, for second quarter fiscal 2017. The Company’s net interest income rose 6%, while average deposits increased 5% on a y-o-y basis. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member’s account at:
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For three months ended June 30, 2017, WFC’s total revenue remained at $22.2 billion compared to $22.2 billion in Q2 FY16. The Company’s revenue numbers fell short of market estimates of $22.5 billion.
For the reported quarter, WFC’s net interest income increased 6% on a y-o-y basis. During Q2 FY17, net interest income increased 1% to $12.48 billion from $12.30 billion in Q1 FY17. The increase reflected the benefit of the repricing of earning assets due to higher short-term interest rates. During Q2 FY17, the net interest margin increased 3 basis points to 2.9% from 2.87% in Q1 FY17. The increase was driven by higher short-term interest rates, disciplined deposit pricing and a reduction in long-term debt, and was partially offset by the impacts from lower loan and investment securities balances.
During Q2 FY17, WFC’s non-interest income declined 7% on a y-o-y basis. The decrease was attributable to lower market-sensitive and mortgage banking revenue. The Company’s mortgage banking noninterest income was $1.1 billion in the reported quarter compared with $1.2 billion in the previous quarter. WFC’s residential mortgage loan originations increased in Q2 FY17 to $56 billion from $44 billion in Q1 2017. The Bank’s Mortgage servicing income was $400 million in the reported quarter, down from $456 million in the previous quarter, primarily due to lower net hedge results and higher prepayments.
WFC’s market sensitive revenue was $545 million in Q2 FY17 compared with $878 million in Q1 2017, as lower net gains from equity investments and trading activities were partially offset by higher gains on debt securities.
For the reported quarter, the Company’s non-interest expense was $13.54 billion compared to $13.79 billion in Q1 FY17. The decrease was due to the seasonal decline in compensation-related expense. For the reported quarter, the Company’s efficiency ratio was 61.1% compared to 58.1% in Q2 FY16.
During Q2 FY17, WFC’s net income increased 4.5% to $5.81 billion from $5.56 billion in Q2 FY16. The Company’s diluted EPS for the reported quarter was $1.07, exceeding analysts’ expectations of $1.02 compared to $1.01 in Q2 FY16.
During Q2 FY17, WFC paid a common stock dividend of $0.38 per share and repurchased 43 million common shares.
As on June 30, 2017, WFC’s nonperforming assets decreased 25% on a y-o-y basis, or decreased 8.4%, to $9.8 billion from $10.7 billion in Q1 FY17. The decline reflected improvements across all commercial portfolios and consumer real estate portfolios as well as lower foreclosed assets.
During Q2 FY17, the Company’s average deposit increased 5% on a y-o-y basis to $1.3 trillion. For the reported quarter, WFC’s common equity tier 1 ratio was 11.6% compared to 11.2% in Q1 FY17. WFC’s total average loans were $956.9 billion in Q2 FY17, down $6.8 billion from Q1 FY17. The Company’s period-end loan balances were $957.4 billion at June 30, 2017, down $982 million from March 31, 2017, reflecting an expected decline in auto loans.
As of June 30, 2017, WFC’s investment securities were $409.6 billion, up $2.0 billion on a q-o-q basis, as approximately $37.1 billion of purchases, primarily federal agency mortgage-backed securities in the available-for-sale portfolio, were partially offset by sales and run-off.
For the reported quarter, WFC’s return on assets ratio was 1.21% compared to 1.20% in Q2 FY16. During Q2 FY17, the Company’s return on equity ratio was 11.95% compared to 11.70% in the same quarter last year. During Q2 FY17, WFC’s return on average tangible common shareholders’ equity ratio was 14.26%.
On Monday, July 17, 2017, the stock closed the trading session at $54.71, marginally falling 0.51% from its previous closing price of $54.99. A total volume of 14.93 million shares has exchanged hands. Wells Fargo’s stock price surged 1.50% in the last one month, 3.77% in the past three months, and 14.67% in the previous twelve months. The stock is trading at a PE ratio of 13.69 and has a dividend yield of 2.78%. The stock currently has a market cap of $276.44 billion.
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