Wells Fargo & Company (WFC) stated net income of $6.2B, or $1.30 per diluted ordinary share, for second quarter 2k19, contrast with $5.2B, or $0.98 per share, for second quarter 2k18, and $5.9B, or $1.20 per share, for first quarter 2k19.
Chief Financial Officer John Shrewsberry stated, “Wells Fargo stated $6.2B of net income in the second quarter and diluted earnings per share of $1.30. We grew period-end loans and deposits, as well as pre-tax pre-provision profit, contrast with the first quarter and a year ago. Our credit quality remained solid with net charge-offs near historic lows. Additionally, our strong capital position was reflected in our 2k19 Capital Plan, which includes an raise in our quarterly ordinary stock dividend rate in third quarter 2k19 to $0.51 per share from $0.45 per share, subject to board authorization , as well as up to $23.1B of gross ordinary stock repurchases during the four-quarter period startning in third quarter 2k19. ”
Net Interest Income
Net interest income in the second quarter was $12.1B, down $216M from first quarter 2k19, driven by balance sheet mix and repricing, including the impacts of higher deposit costs and the lower interest rate environment, as well as higher mortgage-backed securities (MBS) premium amortization, partially offset by the benefit of one additional day in the quarter.
The net interest margin was 2.82%, down 9 basis points from the previous quarter Because of balance sheet mix and repricing, including the impacts of higher deposit costs and the lower interest rate environment, as well as higher MBS premium amortization.
Non interest Expense
Non interest expense in the second quarter declined $467M from the previous quarter to $13.4B, predominantly Because of a decline in employee benefits expense and incentive compensation expense, which were seasonally elevated in the first quarter, as well as a $243M decrease in deferred compensation expense (largely offset by lower net gains from equity securities). These decreases were partially offset by higher outside professional and contract services, salary, and advertising and promotion expense. The efficiency ratio was 62.3% in second quarter 2k19, contrast with 64.4% in the first quarter.
Debt and Equity Securities
Debt securities include available-for-sale and held-to-maturity debt securities, as well as debt securities held for trading. Period-end debt securities were $482.1B at June 30, 2k19, down $1.4B from the first quarter, predominantly Because of a net decrease in available-for-sale debt securities. Debt securities purchases of about $15.9B, predominantly federal agency MBS in the available-for-sale portfolio, were over offset by runoff and sales.
Net unrealized gains on available-for-sale debt securities were $2.5B at June 30, 2k19, contrast with $853M at March 31, 2k19, primarily Because of lower long-term interest rates in the second quarter.
Period-end equity securities, which include marketable and non-marketable equity securities, as well as equity securities held for trading, were $61.5B at June 30, 2k19, up $3.1B from the first quarter.
EPS growth for this year is 19.20% and EPS growth for next year is expected to reach at 6.01%. EPS growth in past five years was 2.10% while EPS growth in next five years is projected to arrive at 8.63%. Sales growth past 5 years was measured at 6.50%.
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