Upcoming AWS Coverage on Comerica Post-Earnings Results

LONDON, UK / ACCESSWIRE / January 18, 2017 / Active Wall St. announces its post-earnings coverage on Wells Fargo & Co. (NYSE: WFC). The Company reported its financial results for the fourth quarter fiscal 2016 (Q4 FY16) and full year 2016 (FY16) on January 13, 2017. The San Francisco, California-based bank's quarterly total revenues and net income were down on a year-over-year basis, underperforming market forecasts. Register with us now for your free membership at:

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One of Wells Fargo's competitors within the Money Center Banks space, Comerica Inc. (NYSE: CMA), is scheduled to report Q4 2016 results on January 17, 2016. AWS will be initiating a research report on Comerica in the coming days.

Today, AWS is promoting its earnings coverage on WFC; touching on CMA. Get our free coverage by signing up to

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http://www.activewallst.com/registration-3/?symbol=CMA

Earnings Reviewed

In the three months ended on December 31, 2016, Wells Fargo's total revenues came in at $21.58 billion compared to $21.59 billion in the year ago same quarter. Total revenue numbers for the reported quarter lagged behind market expectations of $22.4 billion. During Q4 FY16, Wells Fargo's net interest income was $12.40 billion versus $11.59 billion in Q4 FY15. However, total non-interest revenues fell to $9.18 billion in Q4 FY16 from $10.00 billion in the prior year's comparable quarter. Moreover, Wells Fargo's net interest margin for the reported quarter was down by 5 basis points to 2.87% from 2.92% in Q4 FY15.

The diversified financial services Company reported net income of $5.27 billion, or $0.96 per diluted share, in Q4 FY16, which came in below $5.58 billion, or $1.00 per diluted share, in Q4 FY15. Quarterly net income numbers missed analysts' expectations of $1.00 per diluted share.

For full-year FY16, the Company's total revenues were $88.27 billion compared to $86.06 billion in the last year's corresponding period. Furthermore, net income for FY16 stood at $21.94 billion, or $3.99 per diluted share, compared to $22.89 billion, or $4.12 per diluted share, in the prior year.

Performance Metrics

During Q4 FY16, Wells Fargo reported total average loans of $964.15 billion, up from $912.28 billion in Q4 FY15. Total average deposits also grew 5% y-o-y to $1.28 trillion in Q4 FY16 from $1.22 trillion in Q4 FY15.

In Q4 FY17, Wells Fargo's return on assets stood at 1.08%, compared to 1.24% in the previous year's same period. The Company's return on equity was down to 10.94% in Q4 FY16 from 11.93% reported in the year ago comparable quarter. Further, the bank's efficiency ratio rose to 61.2% in Q4 FY16 from 58.4% in Q4 FY15.

During Q4 FY16, total assets grew to $1.77 trillion from $1.62 trillion in the last year's quarter. Furthermore, yield on these assets rose to 3.24% in the Q4 FY16 from 3.18% in Q4 FY15. The Company reported non-interest expense of $13.22 billion, Q4 FY16, which came in above the $12.60 billion reported in the year ago comparable period.

As on December 31, 2016, the bank's common BASEL III equity tier 1 ratio was 10.7%, compared with 10.8% as on December 31, 2015. During Q4 FY16, non-performing assets fell to $11.36 billion, or $1.17% of total loans, from $12.81 billion, or 1.40% of total loans, in Q4 FY15. During the quarter, net loan charge-offs were $905 million or 0.37% of average loans, versus net charge-offs of $924 million, or 0.39% of average loans, in the prior year's corresponding quarter.

Segment Performance

For the reported period, Community Banking's revenues fell to $11.66 billion from $12.33 billion in the prior year's same quarter. The Company attributed this decline to lower other income (hedge ineffectiveness), mortgage banking revenue, and gains on equity investments, which was partially offset by higher net interest income and other fees. Additionally, the segment's net income had declined by $436 million, or 14% y-o-y, to $2.73 billion.

Wholesale Banking's revenue grew $594 million, or 9%, to $7.15 billion in Q4 FY16, on increased net interest income driven by strong loan growth, including the GE Capital portfolio acquisitions, and higher trading and other earning assets. Furthermore, the segment's net income also improved $147 million, or 7% y-o-y, to $2.19 billion in Q4 FY16.

Due to higher net interest income and asset-based fees, and partially offset by lower transaction revenue and deferred compensation plan investment results, the Wealth and Investment Management's segment reported total revenue of $4.07 billion, up $127 million, or 3% on y-o-y basis. However, the segment's net income was down by $24 million, or 4% y-o-y, to $653 million in Q4 FY16.

Share Repurchase

In Q4 FY16, the Company repurchased 24.9 million shares of its common stock and entered into a $750 million forward repurchase transaction, which settled on January 12, 2017, for 14.7 million shares. Furthermore, the Company has returned $12.5 billion to shareholders through common stock dividends and net share repurchases during full-year FY16.

Stock Performance

On Tuesday, the stock closed the trading session at $53.78, falling 2.77% from its previous closing price of $55.31. A total volume of 26.96 million shares have exchanged hands, which was higher than the 3-month average volume of 26.50 million shares. Wells Fargo's stock price advanced 21.29% in the last three months, 13.22% in the past six months, and 13.70% in the previous twelve months. The Company's shares are trading at a PE ratio of 13.33 and have a dividend yield of 2.83%.

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SOURCE: Active Wall Street