Before the market opened this morning, Wells Fargo (
WFC) reported that second-quarter 2009 diluted earnings were 57 cents per common share, compared with 56 cents in the first-quarter 2009. Net income came in at $3.17 billion, compared with $3.05 billion in the prior quarter. The results were ahead of the consensus estimate of 34 cents per share.
Large banks, including WFC, Bank of America (BAC), Citigroup (C) and JP Morgan (JPM), have benefitted from the surge in mortgage refinancing during the last two quarters. However, this revenue source is expected to taper off as the rates are creeping up now. WFC reported mortgage banking income of $3.0 billion.
Credit quality deteriorated further and losses rose sharply during the quarter. The bank expects credit losses and nonperforming assets to increase further, though some moderation was visible. Net charge-offs rose to $4.4 billion (2.1% of average loans) from $3.3
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