Wells Fargo reported third-quarter earnings on Monday of 72 cents a share on net income of $4.1 billion, missing analysts’ estimates by a penny but beating last year’s earnings of 60 cents a share on net income $3.3 billion by 20%. The San Francisco-bank also revealed that its advisor headcount and asset levels have fallen slightly since the second quarter of 2011.
Overall revenues for Wells Fargo declined 6% to $19.63 billion in the most recent period from $20.87 billion in the year-ago quarter.
“We can’t change the economic environment, yet we have worked hard to control the variables we can,” said Chairman and CEO John Stumpf in a statement. “The economic recovery has been more sluggish and uneven than anyone anticipated.”
Average bank loans fell to $745.5 billion as of Sept. 30, from $759.5 billion in the third quarter of 2001. In addition, the bank’s net-interest margin declined to 3.84% from 4.25% in the year-ago period.
“While our industry continued to face challenges due to economic conditions during this quarter, Wells Fargo’s diversified model was again able to produce solid results for our shareholders, ” said CFO Tim Sloan in a statement.
Wells Fargo’s wealth, brokerage and retirement (WBR) unit reported net income of $291 million, up 14% from $256 million a year ago but down 13%, or $42 million, from $333 million in the second quarter of 2011.
Revenue dropped 6% sequentially to $2.9 billion, “primarily due to losses on deferred compensation plan investments (offset in expense), as well as lower securities gains in the brokerage business and reduced brokerage transaction revenue,” the company said in a statement.
Year-over-year revenue fell 1% due to “losses on deferred compensation plan investments (offset in expense) and lower brokerage transaction revenue, partially offset by higher asset-based revenues,” according to the company.