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Wells Fargo (WFC) Misses Q2 EPS by 46c, to Cut Dividend to $0.10/sh

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July 14, 2020 7:49 AM EDT

Wells Fargo (NYSE: WFC) reported Q2 EPS of ($0.66), $0.46 worse than the analyst estimate of ($0.20). Revenue for the quarter came in at $17.8 billion versus the consensus estimate of $18.4 billion.

  • The Company also announced that it expects to reduce its third quarter 2020 common stock dividend to $0.10 per share from $0.51 per share, subject to approval by the Company's Board of Directors at the customary time at the end of July.

Financial results:
◦
Net loss of $2.4 billion and diluted loss per share of $0.66
◦
Revenue of $17.8 billion, down from $21.6 billion in second quarter 2019
▪
Net interest income of $9.9 billion, down $2.2 billion
▪
Noninterest income of $8.0 billion, down $1.5 billion
◦
Noninterest expense of $14.6 billion, up $1.1 billion from second quarter 2019
▪
Second quarter 2020 included:
•
Operating losses of $1.2 billion, primarily due to customer remediation accruals
•
Personnel, occupancy, and technology expense of $382 million related to the COVID-19 pandemic
◦
Average loans of $971.3 billion, up $23.8 billion, or 3%, from second quarter 2019; period-end loans of $935.2 billion, down $74.7 billion, or 7%, from first quarter 2020
◦
Average deposits of $1.4 trillion, up $117.7 billion, or 9%, from second quarter 2019; period-end deposits of $1.4 trillion, up $34.2 billion, or 2%, from first quarter 2020
•
Credit quality:
◦
Provision expense of $9.5 billion, up $9.0 billion from second quarter 2019
▪
Net charge-offs of $1.1 billion, up $462 million
•
Net loan charge-offs of 0.46% of average loans (annualized), up from 0.28%
▪
Increase in the allowance for credit losses of $8.4 billion
◦
Nonaccrual loans of $7.6 billion, up $1.7 billion, or 28%
•
Strong liquidity and capital positions:
◦
Liquidity coverage ratio1 (LCR) of 129%, which continued to exceed the regulatory minimum of 100%
◦
Common Equity Tier 1 (CET1) ratio of 10.9%2, up from 10.7% in first quarter 2020; the CET1 ratio continued to exceed both the regulatory minimum of 9% and our current internal target of 10%

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


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