Wells Posts Record $3.2bn Profit, Fewer Originations
Wells Fargo & Company (WFC) posted a record net $3.2bn income in Q309, up 98% from Q308 despite lower mortgage originations over last quarter. Year-to-date through Q3 income totals $9.45bn, an increase of 75% from the same period in 2008. Earnings per common share came to $0.56, up 14% from Q308’s $0.49 per share earnings. Wells Fargo president and CEO John Stumpf attributed much of the company’s record results to its merger with Wachovia, which was finalized at the beginning of this year. “The Wells Fargo-Wachovia merger, agreed to a year ago, is exceeding our expectations and already adding value for many of our 70 million customers across North America. Merger costs have been significantly less than originally expected,” Stumpf said the company’s quarterly report. Revenue was $22.5bn, driven by annualized growth of 11% in checking and savings, 25% growth in wholesale banking core deposits and 10% in wealth management core deposits, Wells Fargo said. Wells Fargo said loan demand remained soft during the quarter, but the bank funded $96bn in mortgage originations, down from $129bn in Q209. Mortgage banking income was $3.1bn, including $1.1bn in revenue from mortgage originations fees and sales activities. The bank’s total mortgage banking non-interest income represented less than 15% of consolidated company revenue. Wells said its refinanced 987,000 customers’ mortgages using the Making Home Affordable Refinance Program (HARP) and other standard refinance programs through Q309. It also initiated an additional 62,989 trial and completed modifications through the Making Home Affordable Modification Program (HAMP) and 292,005 through the company’s modification programs bringing the year to Q309 total to 354,994. Excluding mortgages insured by the Federal Housing Administration (FHA), Department of Veterans Affairs (VA) and Wells’ servicing agreement with Ginnie Mae for mortgage pools, Wells had $693m in residential mortgages 90 or more day delinquent at the end of Q309, down from $702m at the end of Q209. Mortgages 90 or more day delinquent in the pool of FHA and VA-backed loans and the Ginnie servicing agreement were $12.9bn in Q309, up from $10.7bn in Q209. Write to Austin Kilgore.