Fourth-quarter results at Wells Fargo were a mixed bag, as it topped earnings estimates but fell short on revenues. Its advisor headcount dropped again, and CEO Tim Sloan says the bank will operate under Federal Reserve-imposed growth restrictions through year-end.
Meanwhile, another San Francisco wealth manager is telling a much rosier story. First Republic Bank — which, like rivals, is recruiting advisors away from Wells Fargo — beat both earnings and sales estimates. Plus, its wealth management revenues jumped 15%.
In the fourth quarter, Wells Fargo’s net income fell about 1.5% to $6.06 billion, or $1.21 per share, vs. $6.15 billion, or $1.16 per share, a year ago. Revenue dropped 5% to $21 billion.
“To have enough time to incorporate this feedback in our plans in a thoughtful manner and adopt and implement the final plans as accepted by the Federal Reserve and complete the third-party reviews, we’re now planning to operate under the asset cap through the end of 2019,” Sloan said on an earnings call with analysts Tuesday, according to Bloomberg.
Wealth Management Woes
As of Dec. 30, 2018, Wells Fargo has 13,968 advisors, down nearly 600 from a year ago and over 100 from the prior quarter. Since the bank’s fake-accounts scandal erupted in fall 2016, when it had 15,086 registered reps, the bank’s wealth unit has lost 1,118 advisors.
Total assets also are declining. They stand at $1.7 trillion, down 10% from last year due to lower market valuations and net outflows, the bank says.
The unit’s net income was $689 million for the quarter, though, which is up 2% from the year-ago period but down 6% from the third quarter.