However, it was Wells Fargo, America's former mortgage powerhouse, that showed just how ugly the hit to bank net interest income would be, or rather already is, as long-term rates continue to slide.
Wells Reported Q2 EPS of $1.30, beating expectations of $1.15, on revenue of $21.6BN, up 0.1% Y/Y also above the $20.93BN expected.
This revenue was made up of the two traditional components: Noninterest Income and, of course, Net Interest Income. Looking at the former first, revealed no major surprises: Noninterest income up $191 million to $1.206 billion due to the following:
Trust and investment fees up $195 million on higher asset-based fees and investment banking fees
Card fees up $81 million on higher debit and credit card purchase volumes from a seasonally low 1Q
Other fees up $30 million largely driven by higher commercial real estate brokerage commissions
Mortgage banking up $50 million: i) Servicing income down $87 million due to the impact of lower interest rates including higher loan payoffs; ii) Net gains on mortgage loan originations up $137 million on higher origination volumes reflecting seasonality, as well as lower mortgage loan interest rates;
Trading gains down $128 million driven by lower credit products trading results
Net gains on debt securities down $105 million from a 1Q19 which included the sale of non-agency residential mortgage-backed securities (RMBS)
Net gains from equity securities down $192 million and included $258 million lower deferred compensation gains