Wells Fargo records double-digit earnings growth
Posts $5.6 billion 4Q net income
[Update 1: The original article states Wells Fargo made record quarterly profits, at $21.9 billion. $21.9 billion is, in fact, the annual profit. The correct quarterly numbers are now updated.]
Wells Fargo (WFC) posted record earnings once again, reporting a fourth-quarter net income of $5.6 billion, or $3.89 a share, for 2013.
The strong profit beat industry estimates of 98 cents.
But despite the surge in profit, mortgage banking noninterest income hit $1.6 billion, down $38 million from the third quarter of 2013.
In addition, fourth-quarter residential mortgage originations reached $50 billion, down from $80 billion in third quarter, while the gain on sale margin strengthened to 1.77% in the fourth quarter, compared to 1.42% in the third quarter.
Overall, the mega bank provided $26 million for mortgage loan repurchase losses, compared with $28 million in the third quarter of 2013.
The strong earnings results come shortly after the lender’s agreement with Fannie Mae on Dec. 30, 2013, which was fully covered through previously established mortgage repurchase accruals, that resolved substantially all repurchase liabilities related to loans sold to Fannie Mae that were originated prior to Jan. 1, 2009.
"Wells Fargo had another outstanding year in 2013, including strong growth in loans and deposits, and double-digit growth in earnings," said chairman and CEO John Stumpf.
"Strong earnings power and capital levels, and an improving economic outlook are major reasons why we look ahead to 2014 with optimism," Stumpf added.
"The fourth quarter of 2013 was very strong for Wells Fargo, with record earnings, solid growth in loans, deposits and capital, and strong credit quality. We also grew both net interest income and noninterest income during the quarter, despite a challenging rate environment and the expected decline in mortgage originations. Wells Fargo’s diversified model was again able to produce solid results for our shareholders," said Chief Financial Officer Tim Sloan.