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Wells Fargo's net income slips, NCOs increase

on April 14reported first-quarter net income applicable to common stock of $5.09 billion, or99 cents per share, and total revenue of $22.20 billion. For the year-agoperiod, the company reported net income applicable to common stock of $5.46 billion,or $1.04 per share, and total revenue of $21.28 billion.

The S&PCapital IQ consensus estimate for normalized EPS for the recent quarter was 97 cents.

"Whilechallenges in the energy industry and persistent low rates impacted our bottom line,our diversified business model was again beneficial to our results," CFO JohnShrewsberry said in the earnings release.

Net interestmargin, on a taxable-equivalent basis, was 2.90% in the first quarter, comparedto 2.92% in the linked quarter and 2.95% in the first quarter of 2015.

Nonperformingassets totaled $13.51 billion, or 1.43% of total loans, as of March 31, 2016, comparedto $12.81 billion, or 1.40%, as of Dec. 31, 2015, and $14.84 billion, or 1.72%,as of March 31, 2015.

The company'sprovision for credit losses was $1.09 billion in the first quarter, compared to$831 million in the previous quarter and $608 million in the first quarter of 2015.Net loan charge-offs totaled $886 million, or 0.38% of average total loans (annualized),in the first quarter, compared to $831 million, or 0.36%, in the previous quarter,and $708 million, or 0.33%, in the first quarter of 2015. Total loans were $947.26billion at March 31, 2016, compared to $916.56 billion at Dec. 31, 2015, and $861.23billion at March 31, 2015.

Creditlosses were $886 million in first quarter, compared to $831 million in fourth quarterof 2015, due to higher oil and gas portfolio losses, according to the news release.

The quarterlyloss rate remained low at 0.38% (annualized), according to Chief Risk Officer MikeLoughlin. He added that that "the allowance for credit losses in the firstquarter reflected a reserve build of $200 million as higher commercial reservesreflecting continued deterioration within the oil and gas portfolio were partiallyoffset by continued credit quality improvements in the residential real estate portfolio."