Wells Fargo & Company (NYSE:WFC), the fourth largest bank in the United States reported $5.6 billion net income or $0.99 earnings per share in the third quarter, an increase of 13% from its financial results in the same period a year ago.
The net income of the bank is higher than the consensus estimate of Wall Street analysts at $0.97 per share.
In a statement, Wells Fargo Chairman and CEO, John Stumpf said, “As our economy continues to transition to higher interest rates, our diversified business model and strong risk discipline contributed to record earnings per share. The improvement in the housing market has been beneficial to our customers and significantly contributed to our broad-based credit improvement in the quarter.”
He added that Wells Fargo is well-positioned to meet the needs of its customers and to perform for its shareholders.
Wells Fargo’s revenue declined from $21.2 billion to $20.5 billion during the quarter. Tim Sloan, chief financial officer of the bank said it mortgage-banking revenue was lower due to the recent increases in interest rates and reduced volume of refinance transactions. According to him, improved credit and lower expenses slightly offset the negative impact.
The bank reported that its non-interest expense declined by $153 million to $12.1 billion and its efficiency ratio was 59.1% during the period. Its credit losses fell by $1.4 billion to $975 million, which represents a 59% improvement on credit quality.
“Credit performance continued to be very strong in the third quarter. Loss levels improved from the second quarter and were at historically low levels,” said Mike Loughlin, chief risk officer at Wells Fargo.
Wells Fargo said its total loans were $812.3 billion as of September 30, 2013. The figure was higher by $10.4 billion from its total loans recorded in the June quarter. According to the bank its total average deposits increased 8% from a year ago to $1.0 trillion. Its effective tax rate was 31.9% compared with 33.4% in the third quarter of 2012.
The bank said its capital remained strong with Tier 1 common equity of $120.3 billion under Basel 1 or 10.64% of risk-weighted assets in the third quarter.
During the quarter, Wells Fargo bought 50.9 million of its common stock, and additional 9.8 million shares through a forward repurchase transaction expected to be completed in the fourth quarter of 2013. The company distributed a quarterly dividend of $0.30 a share.