Wells Fargo reported preliminary Q1/18 net income was $5.9 billion, up from $5.6 billion in Q1/17. Revenue of $21.9 billion was down from $22.3 billion for the same quarter a year earlier. Wells Fargo noted financial results may need to be revised to reflect additional accruals for a CFPB/OCC matter.
In a supplement to its earnings release, Wells Fargo said the results are subject to change due to ongoing discussions with the Consumer Financial Protection Bureau (CFPB) and Office of the Controller (OCC) to resolve matters regarding its compliance risk management program and past practices involving certain automobile collateral protection insurance policies and cert mortgage interest rate lock extensions, which the CFPB and OCC have collectively offered to resolve for an aggregate of $1 billion in civil money penalties.
The following highlights were excerpted from the release on Q1/18 earnings with regard to lease financing assets:
3.59% in Q1/17. Non-U.S. average C&I loans were $60.2 billion, up from $55.3 billion in Q1/17. The average yield for non-U.S. C&I loans was 3.23% compared to 2.73% in 2017.
Wells Fargo CEO Tim Sloan said, “I’m confident that our outstanding team will continue to transform Wells Fargo into a better, stronger company; however, we recognize that it will take time to put all of our challenges behind us. During the first quarter our team members continued to focus on our vision of satisfying our customers’ financial needs and helping them succeed financially. We also made progress on our priority of rebuilding trust with our customers, team members, communities, regulators and shareholders. The efforts to build a better Wells Fargo during the quarter included continuing to improve our compliance and operational risk management programs, investing in innovative products and services that enhance the customer experience including the roll-out of our digital mortgage application and predictive banking service, and increasing the minimum hourly pay rate for U.S.-based team members. We also began executing on our goal to increase donations to nonprofit and community organizations by approximately 40% percent in 2018, and we’re proud that Wells Fargo was recently named No. 1 in U.S. workplace giving for the ninth consecutive year by United Way Worldwide. In addition, we continued to make progress on our expense savings initiatives and remain on track to achieve our target of $4 billion in expense reductions by the end of 2019.”
Wells Fargo CFO John Shrewsberry said, “Wells Fargo preliminarily reported $5.9 billion of net income in the first quarter, subject to the resolution of the CFPB/OCC matter noted in our earnings release. Our financial results included continued strong credit performance, liquidity and capital levels. We returned $4.0 billion to shareholders through common stock dividends and net share repurchases in the first quarter, up 30% from a year ago. Our capital remained well above our internal target, and returning more capital to shareholders remains a priority. Our expenses in the first quarter included typically higher personnel expense; however, our noninterest expense dollar target range for full year 2018 remains unchanged.”
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