Wells Fargo Beats, JPM Misses

Today is a big day for bank earnings. Our former Buy List stock, JPMorgan Chase ($JPM), missed earnings. For Q1, JPM earned $1.28 per share which was 12 cents below consensus. They earned $1.59 in last year’s Q1.

The good news is that our current Buy Lister, Wells Fargo ($WFC), beat earnings. Wells earned $1.05 per share which beat estimates by eight cents per share. For last year’s Q1, Wells earned 92 cents per share.

Wells Fargo’s mortgage business, which provides nearly one in five U.S. home loans, continued to suffer from a drop in refinancing. Income from mortgage banking fell to $1.5 billion from $2.8 billion in the first quarter of 2013.

For the week ending April 4, applications for refinancing fell to their lowest share of total mortgage applications since July 2009, according to the Mortgage Bankers Association.

Wells Fargo’s new home loans fell to $36 billion in the quarter from $109 billion a year earlier and $50 billion in the fourth quarter.

February was the worst month for new home loans since at least 2000, according to Black Knight Financial Services.

Wells Fargo had $27 billion of mortgage applications in the pipeline at the end of the quarter, down from $65 billion at the end of the fourth quarter.

In the pre-market, JPM is looking to fall about 3% while WFC is up a few pennies.

Posted by on April 11th, 2014 at 8:50 am


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