Posted on Thursday, October 21, 2010
BY: JOY LEOPOLD
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Wells Fargo & Co. released its third quarter profits on Wednesday, with earnings per share of 60 cents, an increase of seven percent from the 55 cents earned in Q3 2009 and an increase of nine percent from the 56 cents reported for Q2.
Net income for the company was $3.35 billion in the third quarter of 2010, higher than both the $3.06 billion for Q2 and the $3.24 billion for Q3 2009. Net income for the year was reported as $8.95 billion, which was lower than the $9.45 billion net income for the same period of the eight months ending September 30, 2009.
The San Francisco, California-based company reported that it extended $176 billion in credit to customers and businesses during the quarter, attributing the 17 percent growth to increased mortgage originations, commercial loans and lines of credit, home equity lines, and credit card lines.
The company also reported that this past quarter was the second highest quarter for mortgage applications ever, earning $101 billion in mortgage originations, up from Q2’s $81 billion.
The report stated that more than 2.3 million homeowners benefited from home payment relief through the company’s modifications and refinances from the period of January 2009 to August 31, 2010.
During that time the company approved 532,600 mortgage loan modifications and refinanced 1.8 million mortgage loans. The company says it owned a residential mortgage servicing portfolio of $1.8 trillion at the end of Q3.
John Stumpf, Chairman and CEO of Wells Fargo, released a statement within the report touting the credibility and practices of the company and explaining the company’s decision not to partake in a foreclosure freeze like many of the top lenders.
“With respect to recent industry-wide foreclosure issues, there are several important facts to know about Wells Fargo,” said Stumpf. “Foreclosure is always a last resort, and we work hard to find other solutions through multiple discussions with customers over many months before proceeding to foreclosure.”
Stumpf continued, “We are confident that our practices, procedures and documentation for both foreclosures and mortgage securitizations are sound and accurate. For those reasons, we did not, and have no plans to, initiate a moratorium on foreclosures.”
Despite higher-than-expected earnings per share and a large amount of mortgage originations, revenue for the company was down, coming in at $20.9 billion compared with $21.4 billion in Q2 2010 and $22.5 billion in Q3 2009.
The company blamed the $520 million decline in total revenue on net debt and equity security gains, PCI loan resolution income, and the impact from changes to Regulation E and related overdraft policy changes.