Wells Fargo falls short on revenue expectations
Wells Fargo (WFC) said earnings per share and revenue rose in the second quarter as the bank's profit met expectations but revenue fell short of estimates.
The San Francisco bank said it earned $5.72 billion, or $1.03 a share in the second-quarter. That's compared to income of $5.73 billion, or $1.01 a share, reported in the same period last year. Revenue rose 1% to $21.3 billion.
Wells Fargo's revenue fell short of analysts' expectations of $21.71 billion, according to FactSet.
The revenue miss sent shares down about 1% in early trading, but the stock quickly bounced back and posted a 0.9% gain on the day, up 51 cents to $57.25 a share.
Earnings per share results of $1.03 a share were in-line with Wall Street's expectations, according to data from FactSet.
Wells Fargo, the bank with the largest mortgage portfolio, has been dealing with historically low interest rates, which have been pressuring net interest margins, or the spread between what a bank earns on loans compared to what it pays to borrow.
In the second-quarter, net interest margins picked up slightly to 2.97% from 2.95% in the first quarter. And the banks total loan portfolio also grew by $27.2 billion over the previous quarter to $888.5 billion, including $11.5 billion in loans the bank purchased from GE Capital.
Net interest income, or income from loans, grew 4% to $11.3 billion in the three months ended June, Wells Fargo said.
Non-interest income, however, fell 2% to $10 billion from $10.3 billion last year amid a 65% drop in revenues from trading activity.
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