Estimated read time: 2-3 minutes
NEW YORK (AP) — Wells Fargo said its profit edged higher in the second quarter as the bank got a boost from rising interest rates and the planned sale of its insurance service business.
The San Francisco-based bank said its profit grew 5 percent to $5.8 billion, or $1.07 per share. That was more than the $1.01 per share expected by analysts, according to FactSet.
The Federal Reserve has raised interest rates three times since December, which lets banks charge more money for lending, and Wells Fargo said its net interest income climbed 6 percent to $12.5 billion.
The company reported a gain of 4 cents per share from the sale of the insurance business to USI Insurance Services, which Wells Fargo announced in late June. On Friday Wells Fargo said it will sell its shareholder services business to Equiniti Group for $227 million.
Wells Fargo is the largest U.S. mortgage lender, and it said originations of mortgage loans dipped to $56 billion from $63 billion one year ago.
The bank said its checking account customers increased 0.7 percent. The bank is still dealing with the fallout from a sales practices scandal that became public in September.
Regulators had fined San Francisco-based Wells Fargo $185 million in September for opening more than 2 million accounts fraudulently as employees tried to meet aggressive sales goals. The bank has been dealing with the aftermath since then, as then-CEO John Stumpf stepped down and the head of the consumer banking division moved up her retirement.
Both were ordered to forfeit promised stock awards and the bank clawed back $75 million it paid to Stumpf and former executive community bank executive Carrie Tolstedt. Wells Fargo also scrapped its sales goals and announced new compensation standards.
On Saturday Wells Fargo received preliminary approval to pay out $142 million to customers affected by the scandal.
Wells Fargo reported $22.17 billion in revenue. Analysts surveyed expected $22.47 billion.
Wells Fargo shares have risen almost 1 percent since the beginning of the year while the Standard & Poor's 500 index has climbed slightly more than 9 percent. Like other banks, the stock has surged since Donald Trump was elected president in November as investors hoped for stronger economic growth and higher interest rates.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on WFC at https://www.zacks.com/ap/WFC
Keywords: Wells Fargo, Earnings Report, Priority Earnings