Wells Fargo & Co (NYSE:WFC) Reveals Strong Third Quarter Results for 2014

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By Joseph Carducci on October 14, 2014 Consumer Staples

Tuesday proved to be a good day for Wells Fargo & Co (NYSE:WFC) who announced their third quarter results today. United States fourth largest bank revealed a profit growth by 1.7 percent for its latest third quarter. This was mainly due to the bank’s stabilized mortgage business. The results were announced before today’s stock market opened.

Some of the third quarter figures for Wells Fargo & Co (NYSE:WFC) met estimates, including net income for its shareholders that jumped to a value of $5.41 billion for the third quarter, which equals to $1.02 / share. Net income a year ago was $5.32 billion, which was equal to 99 cents / share.

The best news for Wells Fargo & Co (NYSE:WFC) during its third quarter was its stabilized Mortgage business; the bank’s mortgage lending showed an improvement by $1 Billion as compared to its second quarter results; the figures for third quarter are $48 billion. In 2013’s third quarter loans for new homes were 40% below the expected level. Wells Fargo & Co (NYSE:WFC)’s income derived from mortgage banking also saw an increment by 2% and became $1.63 billion; this was mainly due to targeting investors as purchasers for home loans.

Overall revenue for Wells Fargo & Co (NYSE:WFC) went up by 3.6% and became $21.21 billion. A 3.7% increase as compared to the same quarter of last year in the bank’s loan portfolio was also recorded in the third quarter, which is equal to $838.9 Billion. For the past few months Wells Fargo & Co (NYSE:WFC) has increased the number of loans it gives to companies, which remained the case during the bank’s third quarter as well. As a result the bank saw an increase by 12% in industrial and commercial loans. The figure rose from last year’s $189 billion to $212 billion this year. As compared to last year’s Wells Fargo & Co (NYSE:WFC) loans increased by 7%. Average deposit total was recorded at $1.1 trillion, which is an increase by 10%.

As a result of an increase in costs for foreclosure and legal costs Wells Fargo & Co (NYSE:WFC) expenses went up by 1.2%, which is equal to a value of $12.2 billion.

According to FDIC, in terms of deposits Wells Fargo & Co (NYSE:WFC) stood at number third among other banks.

According to Wells Fargo & Co (NYSE:WFC) CEO and Chairman John Stumpf the bank showed a strong deposit and loan growth for both consumer and commercial businesses. He further said that there was an increment in Capital levels despite the fact that the bank gave its shareholders more capital through share buybacks from last year and higher dividends.

Net charge-offs for Wells Fargo & Co (NYSE:WFC)’s third quarter were recorded at $668 million, which was $307 in 2013’s third quarter. The bank’s equity return was 13.1% whereas its assets return was 1.4%.

Wells Fargo & Co (NYSE:WFC) started today’s session at $49.50 and despite a strong third quarter results the stock value dipped by -1.49% to land at $49.45 at 9:59 AM EDT.