Wells Fargo Earnings Beat Expectations
Wells Fargo also saw a decline in revenue in the quarter to $21.4 billion, down from 2009's second quarter of $22.51 billion, but flat compared to 2010's first quarter. Revenue figures were in line with estimates. All business segments contributed to earnings, with Community Banking up 21% and Wholesale Banking up 18% from the prior quarter, the company said.
Net charge-offs declined $841 million, or 16%, from the first quarter to $4.5 billion. Tier 1 capital ratio improved to 10.4% in the second quarter, from 9.9% in the first quarter and 9.8% in second quarter of 2009.
Wells Fargo also said the Wachovia integration is proceeding as planned
A Corner Turned?
CFO Howard Atkins added that Wells Fargo is "very pleased" with its financial performance. "While economic recovery in the U.S. and abroad remained uneven, Wells Fargo earned record net income," he said, adding, "We believe credit quality has indeed turned the corner."
While Chairman and CEO John Stumpf also said the bank supports the "general principles inherent in the financial reform bill, as they are consistent with how Wells Fargo operates," he also said, "We remain concerned that some aspects of regulatory reform may have unintended negative impacts for America's financial system, consumers and businesses."
WFC shares jumped over 5% in premarket trading to $27.25.