Wells Fargo & Co. (NYSE: WFC) managed to beat earnings this morning. Warren Buffett’s favorite bank posted a gain of 19% in net income of $3.15 billion, translating to $0.60 EPS on revenues of $20.9 billion. Thomson Reuters had estimates of $0.55 EPS and revenues of $20.95 billion. As a reminder, Warren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK-A) owns roughly 325 million shares of Wells Fargo. The bank is joining Bank of America Corporation (NYSE: BAC), Citigroup, Inc. (NYSE: C) and J.P. Morgan Chase & Co. (NYSE: JPM) in beating earnings estimates. The question is whether Wells Fargo can shake the trend.
The following figures were provided:
- Checking and savings deposits up 9% from year ago and up 9% annualized on a sequential basis;
- Net loan charge-offs of $4.1 billion, down $394 million, or 9% from prior quarter, down $1.3 billion, or 24%, from fourth quarter 2009 peak;
- tier 1 capital 10.9% vs 10.5% sequentially and vs. 10.6% year ago;
- total capital 14.9% vs. 14.5% sequentially and vs. 14.7% year ago;
- Tier 1 leverage 9.0% vs. 8.7% sequentially and vs. 9.0% year ago;
- Tier 1 common equity 8.0% vs 7.6% sequentially and vs. 5.2% year ago.
Total loans were $753.7 billion at September 30, 2010 compared with $766.3 billion at June 30, 2010 and $800.0 billion at September 30, 2009.
Book value per common share was listed as $22.04 and shares closed on Tuesday at $24.55. Shares are indicated up 1.4% at $24.90 in pre-market trading.
JON C. OGG
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