Wells Fargo released its earnings statement early Friday morning for the second quarter 2017 which showed mortgage banking income partially offset other gains in earnings.
Mortgage banking income dropped to $1.15 billion in the second quarter, down 19% from last year’s $1.41 billion. Last quarter, mortgage banking income decreased to $1.23 billion.
But this comes as no surprise to the market, which expected a drop in mortgage originations. The Mortgage Bankers Association even updated its forecast for the year to represent the dip.
Net income, however, decreased in spite of this drop to $5.81 billion. This is up 5% from the second quarter last year’s $5.56 billion, and represents a diluted earnings per share increase of 6% to $1.07, up from $1 last year.
The bank’s revenue increased only slightly, up to $22.2 billion. This is up from last quarter’s $22 billion but unchanged from last year.
“Second quarter 2017 results demonstrated the benefit of our diversified business model as we continued to generate strong financial results, invest for the future and adhere to our prudent risk discipline,” Wells Fargo CEO Tim Sloan said. “We remain committed to reducing expenses and improving the efficiency of our company, and we are very focused on our recently announced goals.”
“As we work to improve our efficiency, we will also continue to innovate for the future,” Sloan said. “We recently advanced a number of important customer-focused initiatives, such as the launch of the ZelleSM person-to-person payment platform to our 28 million digital customers.”
“We continued to make progress this quarter in our efforts to rebuild trust and build a better Wells Fargo and, while there is still more work ahead of us, we are on the right track and I am confident about our future,” he said.
The past year has been difficult for Wells Fargo as the bank has been dealing with its fake account scandal, where its employees opened more than 2 million fake accounts in order to get sales bonuses.
Back in September, the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, and the city and county of Los Angeles fined the bank $150 million.
In March, Wells Fargo announced that it agreed to a $110 million settlement in the lawsuit, before increasing the settlement proposal from $110 million to $142 million to cover anyone who had a fake account opened in their name stretching back to 2002.
Now, the scandal may finally be at an end the bank’s settlement nears final approval. This month, it received preliminary approval from the court.
(Photo credit: DW labs Incorporated / Shutterstock.com)
