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Wells Fargo & Co (NYSE:WFC) And JPMorgan Chase & Co. (NYSE:JPM) Come Out With Contrasting Results

Written by on July 14, 2015

Wells Fargo & Co (NYSE:WFC) came out with its 2Q2015 results today which showed the Charlotte, NC-based bank had an earnings dip from $5.73 billion in 2Q2014 to $5.72 billion now. JPMorgan Chase & Co. (NYSE:JPM)‘s 2Q2015 results reported yesterday saw its earnings rise from $6 billion in 2Q2014 to $6.3 billion now.

Wells Fargo’s EPS rose to $1.03 from $1.01 a year ago while JPMorgan’s EPS rose from $1.46 a year ago to $1.54.

Wells Fargo’s revenue of $21.3 billion was 1.8 percent lower than analysts expectations of $21.7 billion. Wells Fargo’s problems have less to do with mortgage problems related to the 2008 financial crisis and more to do with a decline in the bank’s net interest margin, which was 2.97 percent in 2Q2015 compared to 3.15 percent a year earlier. However, net interest income of Wells Fargo increased $284 million from 1Q2015 to $11.3 billion in 2Q2015 and it was up 2 basis points from 1Q2015.

Total loans at Wells Fargo were $888.5 billion at June 30, 2015, up $27.2 billion from March 31, 2015. The commercial real estate loan portfolio of Wells Fargo included $11.5 billion from the GE Capital loan purchase and financing transaction announced in the first quarter. Average total deposits for 2Q2015 were $1.2 trillion, up 4 percent (annualized) from 1Q2015, with both growth both in commercial and consumer segments of the business.

Wells Fargo was the nation’s #1 SBA 7(a) small business lender in dollars and units for the first half of the 2015 federal fiscal year. Wells Fargo had 26 million active online customers, including nearly 16 million active mobile users, and the bank saw double digit growth in mobile adoption.

In the consumer home lending business, Wells Fargo saw loan originations of $62 billion, up from $49 billion in 1Q2015 and loan applications of $81 billion, down from $93 billion in 1Q2015. Wells Fargo had a home loan application pipeline of $38 billion at quarter end, down from $44 billion at March 31, 2015 and total residential mortgage servicing portfolio of $1.7 trillion.

Meanwhile, at JPMorgan, the bank’s Wall Street division saw a lot of cost cutting with expenses brought down to $5.1 billion from $6.1 billion a year ago, a reduction of 15 percent. Wall Street-based banks such as JPMorgan and Citibank have seen their lucrative investment banking side of the business decline and JPMorgan is learning to live with that reality and alter its business portfolio.

Both JPMorgan and Wells Fargo are up more than 3 percent in Wall Street trading today.