The nation’s top mega banks reported their earnings last week, painting the beginning picture of how housing and the economy fared during the second quarter of 2015.
“With 97% of its revenue coming from the U.S., WFC is viewed as a great read on the pulse of the American economy," said an earnings preview note from Briefing.com. "Investors will be paying close attention to the banks mortgage business as the second quarter is usually the start of the home buying season. In addition loan growth metrics will be watched."
Here is how each bank finished in the second quarter of 2015 as the first week of earnings wraps up.
Wells Fargo (WFC) reported net income of $5.7 billion, or $1.03 per diluted common share, for second quarter 2015, compared with $5.7 billion, or $1.01 per share, for second quarter 2014, and $5.8 billion, or $1.04 per share, for first quarter 2015.
Mortgage originations came in at $62 billion, up from $49 billion in prior quarter. Applications were at $81 billion, down from $93 billion in prior quarter.
JPMorgan Chase (JPM) beat analyst expectations in the second quarter, delivering second-quarter earnings of $1.54 per share, up from $1.46 a share in the year-earlier period, despite revenue falling to $24.5 billion from $25.35 billion a year ago.
Mortgage banking net income was $584 million, a decrease of 20%. Net revenue was $1.8 billion, a decrease of 21%, driven by lower net servicing revenue and lower repurchase benefit.
The company originated $16 billion in first-lien residential mortgage loans and $3.2 billion in home equity loans in the second quarter of 2015, compared to $11.1 billion and $2.6 billion, respectively, in the year-ago quarter. This is a 40% jump from Q214.
Citigroup (C) posted net income for the second quarter 2015 of $4.8 billion, or $1.51 per diluted share, on revenue of $19.5 billion. This is compared to net income of $181 million, or $0.03 per diluted share, on revenue of $19.4 billion for the second quarter 2014.
Citigroup's loans were $632 billion as of quarter end, down 5% from the prior year period, and down 1% on a constant dollar basis. In constant dollars, 4% growth in Citicorp loans was more than offset by continued declines in Citi Holdings, driven primarily by reductions in the North America mortgage portfolio and the reclassification of loans to held-for-sale in connection with previously-announced agreements to sell OneMain Financial and Citi's retail banking and credit card businesses in Japan.
Goldman Sachs stated that this is its highest first-half net revenue in five years, reflecting record first-half results in investment banking and investment management.
However, during the quarter, the firm recorded $1.45 billion in net provisions for mortgage-related litigation and regulatory matters.