Wells Fargo & Co. recently reported a net income of $5.2 billion for second quarter 2018, compared with $5.9 billion for second quarter 2017.
“Our progress included making further improvements to our compliance and operational risk management programs,” said CEO Tim Sloan, “hiring a new chief risk officer; announcing innovative new products including a digital application for Merchant Services customers and our enhanced Propel Card … launching our ‘Re-established’ marketing effort, the largest advertising campaign in our history; announcing a new $200 billion commitment to financing sustainable businesses and projects; and continuing to move forward on our expense savings initiatives.”
Noninterest income in the second quarter was $9.0 billion, down $684 million compared with first quarter 2018. Revenue was $21.6 billion which was a decline from $22.2 billion.
Second quarter 2018 included net discrete income tax expense of $481 million mostly related to state income taxes driven by the recent U.S. Supreme Court decision in South Dakota v. Wayfair.
Provision expense of $452 million was down $103 million, or 19 percent, from second quarter 2017.
Net interest income in the second quarter was $12.5 billion, up $303 million compared with first quarter 2018, driven predominantly by a less negative impact from hedge ineffectiveness accounting, the net benefit of rate and spread movements, and one additional day in the quarter.
Net interest margin was 2.93 percent, up 9 basis points compared with first quarter 2018. The increase was driven by a reduction in the proportion of lower yielding assets, as well as a less negative impact from hedge ineffectiveness accounting and the net benefit of rate and spread movements.
