Wells Fargo (WFC) credited signs of stabilization in the housing market and increases in home lending for its second-quarter profit jumping 35% over last year.

The company reported net income of $4.6 billion, or 82 cents a share, up from $3.9 billion, or 70 cents, for the second quarter of 2011. In just the first six months of 2012, net income reached $8.9 billion, or $1.57 a share, compared to $7.7 billion, or $1.37 a share, a year earlier.

Revenue hit $21.3 billion in the second quarter, down slightly from $21.6 billion in the first quarter of 2012.

The company expanded its lending business with its total loans reaching $775.2 billion on June 30, up from $766.5 billion in March. Average core deposits also hit $880.6 billion, up 9% from a year earlier and 5% from the first quarter of 2012.

Wells Fargo’s consumer lending group noted that home mortgage originations grew to $131 billion in the second from $129 billion in the first quarter . Applications reached a total value of $208 billion, compared to $188 billion in 1Q, a trend that shows growing demand.

“Credit quality trends continued to show improvement in the second quarter, with reductions in net losses, nonperforming assets, nonaccrual loans, and loans 90 days or more past due and still accruing,” said chief risk officer Mike Loughlin. “Second quarter 2012 net charge-offs were $2.2 billion, or 1.15 percent (annualized) of average loans, down from first quarter 2012 net charge-offs of $2.4 billion (1.25 percent). The loan loss reserve release was $400 million, equal to the release in the first quarter.”

The firm says credit performance overall improved over the course of the past two years and will continue to experience improvement in the second half as long as significant economic deterioration doesn’t impact the marketplace as a whole.

Loans that are 90-days or more past due hit $1.4 billion in late June, down from $1.6 billion in March.

Meanwhile, loans insured by the Federal Housing Administration and guaranteed by the Veteran’s Affairs office and Department of Education for student loans reached $21.5 billion in June, up from $20.9 billion in March of 2012. The company attributes the increase to growth in Wells Fargo’s FHA/VA program over the past two years.



Latest Articles

Mortgage applications rise to the highest level in more than a month

Despite last week’s climb in mortgage rates, the Mortgage Bankers Association indicates demand for both purchase and refinance applications held steady, as mortgage applications rose by 9.6%.

Nov 13, 2019 By