Wells Fargo Tops Profit Expectations
Wells Fargo & Co., the nation’s largest mortgage lender, saw a 3.8 percent increase in second quarter profits, which executives attributed to positive signs in the housing market. The bank has been targeting originations in the home-purchase market.
Wells Fargo net income rose to $5.73 billion in the second quarter compared to $5.52 billion a year earlier, beating many forecasters’ expectations.
Wells Fargo dropped its losses on loans by 52 percent to $717 million in the second quarter, down from $1.2 billion a year prior. The situation was “driven by an improved economy, especially the housing market,” says John Stumpf, Wells Fargo chairman and chief executive.
In last year’s second quarter, Wells Fargo originated $112 billion in mortgages, but that was during the refinancing boom. Now that the refinancing boom has faded due to higher interest rates, the bank is focused on the home-purchase market. In the first quarter of 2014, the bank issued only $36 billion in new home loans, but that number rose to $47 billion in the second quarter, higher than most analysts’ projected.