Wells Fargo’s first-quarter results beat Wall Street expectations, as the bank posted stronger-than-expected profits, fueled by lower loan losses and decreasing expenses.
In the first quarter, the bank said on Friday, it earned a profit of $5.9 billion, up 14 percent from the same period in 2013. That amounted to 1.05 cents a share. The results beat analyst estimates of 96 cents a share, as surveyed by Bloomberg.
Still, the bank’s revenue for the quarter fell to $20.6 billion from $21.3 billion in the same period a year ago.
Wells Fargo has been a darling of bank investors since the financial crisis. The lender easily passed the Federal Reserve’s recent stress test and its stock has soared over the past year.
Indeed, the results announced on Friday were the 17th-consecutive quarter that Wells Fargo has reported earnings growth â€" a streak that outpaces many of its peers, according to Barclays.
Wells Fargo’s latest strong results were in sharp contrast to JPMorgan’s disappointing first-quarter earnings, which were also announced on Friday morning.
As the nation’s largest mortgage lender, Wells Fargo is considered a bellwether for the United States housing market. Wells Fargo said it originated $36 billion in mortgages in the first quarter, down about 28 percent from the fourth quarter.
But Wells Fargo said that it was able to increase its overall loan portfolio to $826.4 billion, up $4.2 billion from the same period in 2013. The increase was fueled by growth in commercial real estate and auto loans.
Wells Fargo, based in San Francisco, also depends far less than its peers on fixed-income trading and other traditional Wall Street activities that are under pressure from new regulations. In contrast, JPMorgan reported a large trading slump in the quarter.
“Our solid first quarter results again demonstrated the ability of our diversified business model to perform for our shareholders,†Wells Fargo’s chief executive, John G. Stumpf, said in a statement.
Analysts are also looking at whether the bank can continue to expand its wealth management business to offset some of its diminished mortgage revenue. Brokerage advisory and commission fees at Wells Fargo increased 11.6 percent last year, according to JPMorgan analysts.
In the first quarter, client assets in Wells Fargo’s retail brokerage account increased to $1.4 trillion, up 8 percent from the same period a year ago.
Wells Fargo has a strong brokerage business in the Midwest and smaller cities, obtained through its acquisition of Wachovia in 2008. But analysts say some of the best opportunities for growth may come from Wells Fargo’s home state of California, where the bank has nearly a half-million retail customers who could be signed up for brokerage accounts.
Wells Fargo has also avoided many of the headline-making regulatory issues that have lately ensnared rivals. Citigroup faces questions about a costly fraud in its Mexico unit and JPMorgan faced an array of regulatory entanglements, but Wells Fargo has remained out of the headlines.
When Wells Fargo announced a major management change earlier this month â€" its chief financial officer, Timothy J. Sloan, was stepping down to head the wholesale banking unit â€" investors took the move largely in stride.
