Wells Fargo Co. reported on Friday first quarter profit and earnings that beat Wall Street expectations despite a decline in net interest income.
Here’s how the company performed compared to Wall Street expectations, based on a survey of analysts conducted by LSEG, formerly known as Refinitiv:
- Earnings per share: adjusted 1.26 cents vs. expected 1.11 cents.
- Revenue: $20.86 billion versus expected $20.20 billion.
Wells shares were trading flat on Friday after the earnings report.
Wells said its net interest income, a key measure of how much a bank makes on lending, fell 8% in the quarter due to the impact of higher interest rates on funding costs and customers shifting to higher-yielding deposit products.
Net interest income in 2024 is expected to decline in the range of 7% to 9%, unchanged from the previous forecast.
A woman walks past a Wells Fargo bank in New York, USA, March 17, 2020.
Gina Moon | Reuters
The San Francisco-based bank’s net income fell to $4.62 billion, or $1.20 per share, from $4.99 billion, or $1.23 per share, a year earlier. Excluding Federal Deposit Insurance Corp. charges of $284 million, or 6 cents per share, related to bank failures in 2023, Wells said he earned $1.26 per share, beating analysts’ estimates of $1.11 per share.
Revenue of $20.86 billion was above estimates of $20.20 billion.
“Our strong first quarter results demonstrate the progress we continue to make in improving and diversifying our financial performance,” Wells CEO Charlie Scharf said in a statement.
“The investments we are making across the franchise contributed to higher earnings compared to the fourth quarter as the increase in non-interest income more than offset the expected decline in net interest income,” Scharf added.
During the most recent period, the bank set aside $938 million as a reserve to cover credit losses. The bank said the provision included a reduction in the allowance for credit losses caused by commercial real estate and auto loans.
Wells shares are up more than 15% year to date, outperforming the S&P 500’s 9% return.
In the first quarter, the bank repurchased 112.5 million shares, or $6.1 billion, of common stock.