Wells Fargo profit jumps 19% as delinquent loans decline
Mega bank Wells Fargo posted a second-quarter profit of $5.5 billion, or 98 cents a share, up 19% from year ago levels.
Meanwhile, revenue hit $21.4 billion, an increase of $89 million, from $21.3 billion in the first quarter of 2013.
Overall, the bank saw improvements in loan delinquencies and non-performing assets. During the period, Wells Fargo (WFC) recorded $21.1 billion in nonperforming assets, down $3.8 billion from year ago levels.
Loans 90 days or more past due – excluding government insured loans – hit $1.2 billion in June, down from $1.4 billion at the end of March.
Meanwhile, seriously delinquent loans with repayments insured by the Federal Housing Administration, the Department of Veterans Affairs and the U.S. Department of Education reached $21 billion, a drop from $21.7 billion at the end of March.
Well’s net interest income in the second quarter also edged up by $251 million to $10.8 billion on higher interest income from the sale of its available-for-sale securities portfolio. This occurred as the firm acquired $21.1 billion in securities, comprised mostly of mortgage-backed securities.
"The portfolio yield improved as prepayments of existing MBS slowed," Wells Fargo said.
"In addition, we benefitted modestly from organic growth in consumer and commercial loans and income from purchased credit-impaired (PCI) loan resolutions which mitigated the impact of loan portfolio repricing."
Net loan charge-offs also fell to $1.2 billion in the second quarter, down from $1.4 billion in the first quarter of 2013.