Lower Reserves Lead to Higher Profit for Wells Fargo

Wednesday morning, banking giant Wells Fargo WFC announced that its fourth-quarter profit increased sharply thanks to improving customer payment habits and lower reserves to cover "souring loans." During the quarter, Wells Fargo reported net income of 61 cents per share ($3.2 billion), matching the consensus estimate. A year earlier, the company earned 8 cents per share ($394 million) thanks to a large preferred dividend paid to the government (this payment was not necessary this year). The bank's CEO John Stumpf stated that the bank's business segments "contributed to earnings as the economy started to gain strength." Continue reading the article.