Wells Fargo & Company reported net income of $5.7 billion, or $1.03 per diluted common share, for second quarter 2015, compared with $5.7 billion, or $1.01 per share, for Q2 2014, and $5.8 billion, or $1.04 per share, for Q1 2015.
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Net interest income increased $284 million from first quarter 2015 to $11.3 billion, primarily due to broad-based asset growth including investment securities, loans, trading assets and mortgages held-for-sale. The quarter also included one additional day, accounting for approximately 25 percent of the increase in net interest income relative to the first quarter.
Net interest income also benefited from increased income from variable sources, lower deposit costs, and higher income from interest rate swaps used to convert a portion of our floating rate commercial loans to fixed rate as we continued to add duration to our balance sheet.
Noninterest income was $10.0 billion, compared with $10.3 billion in first quarter 2015, driven by higher mortgage banking revenue, equity investment gains, deposit service charges, card fees, trust and investment fees, and insurance fees. Offsetting this growth were lower gains from trading activities and debt securities, and lower other income, primarily due to variability from the accounting related to our debt hedges.
Noninterest expense declined $38 million from the prior quarter to $12.5 billion, primarily due to lower employee benefits, which were seasonally elevated in first quarter 2015. This decline was partially offset by higher operating losses, reflecting higher litigation accruals for various legal matters, as well as higher salaries, outside professional services, and advertising and promotion expense.
The efficiency ratio improved to 58.5 percent in second quarter 2015, compared with 58.8 percent in the prior quarter. The Company expects to operate within its targeted efficiency ratio range of 55 to 59 percent for full year 2015. Total loans were $888.5 billion at June 30, 2015, up $27.2 billion from March 31, 2015.
Growth was broad-based and was led by commercial and industrial, and commercial real estate, which included $11.5 billion from the GE Capital loan purchase and financing transaction announced in the first quarter. Core loan growth was $29.4 billion, as non-strategic/liquidating portfolios declined $2.2 billion in the quarter.
Total average loans were $870.4 billion in the second quarter, up $7.2 billion from the first quarter. Average total deposits for second quarter 2015 were $1.2 trillion, up 4 percent (annualized) from first quarter, driven by both commercial and consumer growth.
The average deposit cost for second quarter 2015 was 8 basis points, a reduction of 1 basis point from the prior quarter. Average core deposits were $1.1 trillion, up 9 percent from a year ago. ■