Wells Fargo (WFC) Posts Q4 EPS of $0.96, Sales Miss

(Updated - January 13, 2017 8:05 AM EST)

Wells Fargo (NYSE: WFC) reported Q4 EPS of $0.96, or $1.03 net hedge ineffectiveness accounting impact, versus the analyst estimate of $1.00. Revenue for the quarter came in at $21.6 billion versus the consensus estimate of $22.45 billion.

• Net interest income of $12.4 billion, up 7 percent.
• ROA of 1.08 percent and ROE of 10.94 percent
• Total average loans of $964.1 billion, up $51.9 billion, or 6 percent
• Total average deposits of $1.3 trillion, up $67.3 billion, or 6 percent
• Provision expense of $805 million, down $26 million, or 3%
• Nonaccrual loans of $10.4 billion, down $998 million, or 9 percent
• Common Equity Tier 1 ratio (fully phased-in) of 10.7 percent

Chief Executive Officer Tim Sloan said, "We continued to make progress in the fourth quarter in rebuilding the trust of our customers, team members and other key stakeholders. I am pleased with the progress we have made in customer remediation, the ongoing review of sales practices across the company and fulfilling our regulatory requirements for sales practices matters. As planned, we launched our new Retail Bank compensation program this month, which is based on building lifelong relationships with our customers. While we have more work to do, I am proud of the effort of our entire team to make things right for our customers and team members and to continue building a better Wells Fargo for the future.”

Chief Financial Officer John Shrewsberry said, “Wells Fargo had solid underlying performance in the fourth quarter as we continued to benefit from our diversified business model. Net interest income increased from the prior quarter, largely driven by growth in loans and investments, as well as higher interest rates. Noninterest income declined from the prior quarter due to net hedge accounting ineffectiveness associated with our hedging of long-term debt as part of our asset/liability management program, as well as lower market-sensitive revenue. Other sources of noninterest income were diversified and stable with the prior quarter. Credit quality remained solid in the quarter, and we returned $3.0 billion to shareholders in the quarter, with a full year 2016 net payout ratio2 of 61 percent."

For earnings history and earnings-related data on Wells Fargo (WFC) click here.

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