Wells Fargo & Company has reported a record net income of $4.1 billion for the fourth quarter 2011, compared to $3.4 billion for the fourth quarter of 2010, and $4.1 billion for the third quarter of 2011. For all of 2011, Wells Fargo reported a net income of $15.9 billion, up 28 percent from 2010's full-year totals.
Mortgage banking non-interest income stood at $2.4 billion for Q4, up $531 million from third quarter 2011, on $120 billion in originations, compared to $89 billion in originations in Q3. Mortgage banking non-interest income in Q4 included a $404 million provision for mortgage loan repurchase losses, compared with $390 million in the third quarter (included in net gains from mortgage loan origination/sales activities). Net mortgage servicing rights (MSRs) results were a $201 million gain, compared to a $607 million gain in Q3 of 2011. The ratio of MSRs to related loans serviced for others was 76 basis points and the average note rate on the servicing portfolio was at 5.14 percent.
“I’m extremely pleased with Wells Fargo’s performance in 2011—including strong deposit and loan growth, record cross-sell and record earnings,” said Wells Fargo Chairman and Chief Executive Officer John Stumpf. “We achieved these results while completing the conversion of Wachovia’s retail banking stores—the largest such conversion in banking history—and now all of our 6,239 retail banking stores are on a single platform serving customers coast to coast. At the time of the merger, we said the integration of Wachovia would take three years and we are right on track. I couldn’t be prouder of how our two companies have come together as one, thanks to the important and tireless work of our more than 260,000 team members."
Wells Fargo's unclosed pipeline as of Dec. 31 was $72 billion, compared to $84 billion at Sept. 30, 2011.
Wells Fargo currently stands as the most valuable U.S. bank, even after last year's 11 percent stock decline, due to the fact that most of their rivals experienced a decline in earnings. The company's market value of $156.1 billion compares with $136.5 billion at JPMorgan, and is more than the value of Goldman Sachs Group Inc., Morgan Stanley and Bank of America combined. Just last week, JPMorgan Chase reported a net income of $3.7 billion for the fourth quarter of 2011, a drop of $1.1 billion over the fourth quarter of 2010, and a 23 percent drop in profit.
“The fourth quarter of 2011 was a very strong quarter for Wells Fargo, with record earnings, solid linked quarter growth in loans, deposits and capital, and continued strong credit quality,” said Wells Fargo Chief Financial Officer Tim Sloan. “Revenue was up five percent from the third quarter despite a full quarter’s impact of the new debit interchange rules. As expected, expenses were higher in the quarter and we are maintaining our target of $11 billion in non-interest expense in the fourth quarter of 2012."