Wells Fargo announced $5.73 billion in net income, compared to $5.52 billion from the same period one year ago. Earnings per share, which reflected the payment of its preferred dividends, were at $1.01, compared to 98 cents during the same reporting period one year ago.
Revenue slid by 1.5% to end the quarter at $21.07 billion. Analysts were expecting $1.01 earnings per share on revenue just over $20.84 billion.
While the analysts cut estimates for rival banks recently, the estimates made for Wells Fargo remained steady. Never a firm that is big on trading, Wells Fargo focused on revenue generation from its consumer and commercial lending as its rivals pulled further from some of those types of business following the financial crisis.
Wells Fargo’s interest margin on a net basis, which is a key figure for profitability by measuring the difference between the interest earned by a bank in lending and what it must pay out to its depositors, narrowed and ended the quarter at 3.15%, in comparison to 3.40% for the year before and a figure of 3.20% for the previous quarter.
The company, based in San Francisco had become a darling amongst bank investors in the stock market in part due to avoiding large losses and the biggest regulatory penalties that have plagued the industry.
Investors have valued the consistency the bank has shown. That has helped it become the largest bank in the U.S. by market capitalization.
During the most recent quarter, the bank scratched out a profit for the 16th quarter of year over year growth in profits.
Investors were not impressed, as the bottom line for Wells Fargo was padded again by its equity gains, while the expenses at the bank climbed from those of the first quarter.
The continual slowdown in the bank’s lucrative business of mortgages was offset due to stronger lending as well as lower provisions to cover sour loans.