Filed Under Financing, Housing Market · Tagged: Howard Atkins, Lending, mortgage banking results, Wachovia, Wells Fargo & Company · Print This Article
The markets went up Thursday before the holiday due to an announcement of expected first quarter earnings from Wells Fargo Bank. Wells Fargo expects to report a net income of $3 billion, or 55 cents per share.
Wells Fargo reported the following in a news release on April 9:
“‘Our business momentum is strong, and we expect our operating margins to remain at the top of our peer group,’ said Chief Executive Officer John Stumpf.
Expected results include:
- Total revenue of $20 billion, including another quarter of double-digit revenue growth at legacy Wells Fargo, up an estimated 16 percent.
- Strong operating results at legacy Wachovia.
- Solid operating margins with consolidated net interest margin of approximately 4.1 percent and efficiency ratio of approximately 56 percent.
- Combined net charge-offs of $3.3 billion, compared with fourth quarter net charge-offs totaling $2.8 billion at legacy Wells Fargo and $3.3 billion at legacy Wachovia.
- Provision expense of approximately $4.6 billion, including $1.3 billion credit reserve build, bringing the allowance for credit losses to $23 billion.
- Pre-tax pre-provision profit of approximately $9.2 billion.
‘Business momentum in the quarter reflected strength in our traditional banking businesses, strong capital markets activities, and exceptionally strong mortgage banking results — $100 billion in mortgage origination’s, with a 41 percent increase in the unclosed application pipeline to $100 billion at quarter end, an indication of strong second quarter mortgage origination’s,’ said Chief Financial Officer Howard Atkins.”
This gain can be attributed in part to the new mortgages coming through the system. Wells Fargo reports that they have another $100 billion in mortgages already in the pipeline, which should spill into second quarter earnings.
Wells Fargo acquired Wachovia last year, and the acquisition is exceeding expectations.
Hopefully, these are just signs of the credit markets starting to work again.
Read the news release from Wells Fargo.
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