Wells Fargo reported Q1/16 net income of $5.46 billion, down from $5.8 billion for Q1/15. Total revenue for the period of $22.2 billion was up from $21.3 billion in Q1/15.

The following highlights were excerpted from the Wells Fargo news release:

• During Q1/16, Wells Fargo added $30.8 billion of loans and leases from GE Capital acquisitions, i.e., $4.1 billion from a rail car portfolio and $26.7 billion from commercial and industrial loans and leases.
• Provision for credit losses of $1,086 million in Q1/16 was up 79% from $608 million a year earlier. Wells Fargo noted a reserve build of $200 million in Q1/16 was driven by deterioration in the oil and gas portfolio. Chief Risk Officer Mike Loughlin noted, “While substantially all of the loan portfolio continues to perform well, the oil and gas portfolio remains under significant stress due to low prices and excess leverage in this industry.”
• The lease financing Q1/16 average balance was $15,047 million with a reported yield of 4.74% compared to $12,319 million with a reported yield of 4.95% in Q1/15. Interest income in Q1/16 was $178 million, up 17% from $152 million for the same quarter a year earlier.
• The net interest margin in Q1/16 of 2.90% was down five basis points from 2.95% in Q1/15.

Chairman and CEO John Stumpf said, “Wells Fargo’s first quarter results reflected the benefit our diversified business model as we managed challenges presented by a volatile operating environment for our industry. We again generated solid growth in the fundamental drivers of long-term value creation: loans, deposits and capital. We also completed two important acquisitions from GE Capital, which are great additions to our company and demonstrate the benefit of our strong financial position. We remain focused on meeting the financial needs of our consumer and business customers, and I believe we are we are well positioned for the future.