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Bank Results Season: Wells Fargo does match JP Morgan in Earnings of $5.6 Bln (Q3 2013)

Downtown Albuquerque, NM, just after sunset. F...

Downtown Albuquerque, NM, just after sunset. Features the Compass Bank building (purple), the Bank of America building, the Wells Fargo building, and the New Courthouse, plus a Carl’s Jr. restaurant. Cropped a little black sky off the top in Photoshop, but the colors are as the G9 took them. This is easily my #2 Most Viewed Pic. It reached 300 Views on Dec. 23, 2007. It is also my #3 Most Interesting Pic. Congratulations! On 4 Feb 2008, it reached 500 Views! On March 6, 600! (Photo credit: Wikipedia)

Of course, JP Morgan booked $9 Bln in expenses to settlements that eroded the profit banks for the September quarter, Wells Fargo saved up its improving credentials in profit making banking while working on other restructuring to rove the $5.6 Bln to the bottomline and its larger equity base able to move to only 92 cents in the linked quarter, edged up to 99 cents earnings per share this quarter. More importantly it is a big step up for Wells Fargo in eking the number out of the Sales of $20.5 billion with cost income ratio staying at the best in industry levels of last quarter, ROE up to 14%, even from 13.3% that beats most banks above the size of USB and PNC Financial. Efficiency (Cost/Income is down to 59 levels)

The Bank is still carrying a NPA portfolio of $20 Bln and loan loss reserves yielded higher at the bank at $900mln. The Tier I equity is $120 Bln and RWA weighed for Basel II is calculated by the bank at a still insufficient 9.54% as Net Interest Margins keep retracin g dow 8 bp on the linked quarter at 3.38%

The mix of Interest and Non Interest Income is still a near even split, but increasingly admitted by the bank as key from increasing AFS mortgages (purchased business and MBS). Refi volume dips on the other hand hit fees and charges, which went down a billion to $9.7 Bln. The dip in originations score at the bank obviously higher than the industry meant $80 Bln still came in after a $112 Bln in June

NIMs were shored up in yields on the overall loans from fees and charges

2% reduction in Effective Tax rate came from cross border revenue settlements reached this quarter

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