Sat. May 25th, 2019

Wells Fargo Shares Edge Higher on Quarterly Beat

Wells Fargo & Company (NYSE: WFC) reported its first quarter financials during Friday’s pre-market hours and topped analysts’ estimates. The better-than-expected quarter sent shares 2.1% higher after the opening bell.

For the first quarter, Wells Fargo reported earnings of USD 1.20 per share on revenue of USD 21.61 Billion. Analysts projected earnings of USD 1.09 per share on revenue of USD 21.01 Billion for the quarter.

Although Wells Fargo topped revenue estimates, the bank’s revenue still declined year-over-year from USD 21.9 Billion. The decrease from a year prior was due to a decline in the bank’s noninterest income, which fell to USD 9.3 Billion.

Average deposits fell by 3% to USD 1.3 Trillion. Average loans also decreased to USD 950.1 Billion, falling by USD 876 Million a year prior. Despite the decline, average loans fell in-line with estimates.

Non-Performing assets totaled USD 7.3 Billion, above estimates of USD 6.67 Billion. The bank’s efficiency ratio was also 64.4% for the quarter, also above estimates. The higher efficiency ratio indicates that the bank is spending more money than it is making, according to CNBC.

Return on assets (ROA) was 1.26% in the quarter, while return on equity (ROE) was 12.71%. Additionally, return on average tangible common equity (ROTCE) was 15.16%.

Wells Fargo reported that credit-card transactions totaled USD 18.3 Billion the quarter, increasing by 5% year-over-year, Debit-card purchases increased as well by 6% to USD 86.6 Billion.

CFO John Shrewsberry stated, “Wells Fargo revealed USD 5.9 Billion of net gain in the primary quarter. Our monetary outcomes included preceded with solid credit execution and large amounts of liquidity. What’s more, our proceeded with de-gambling of the accounting report and predictable dimension of benefit have brought about capital dimensions well over our administrative least. Accordingly, we returned USD 6.0 Billion to investors through normal stock profits and net offer repurchases in the primary quarter, up 49% from a year prior. Returning overabundance money to investors remains a need. While our costs in the principal quarter included normally higher faculty cost, we stay focused on, and are on track to accomplishing our 2019 cost target.”