Wells Fargo On Friday, it reported first-quarter earnings and revenue that beat Wall Street expectations, despite a decline in net interest income.
Here's how the company fared compared to what Wall Street was expecting, based on a survey of analysts conducted by LSEG, formerly known as Refinitiv:
Earnings per share: $1.26 adjusted versus 1.11 cents expected Revenue: $20.86 billion versus $20.20 billion expected
Wells shares traded flat on Friday after the earnings report.
Net interest income, a key measure of what a bank makes from lending, fell 8% in the quarter, due to the impact of higher interest rates on funding costs and customers shifting to higher-yield deposit products, Wells said.
Net interest income for 2024 is expected to decline 7% to 9%, unchanged from previous guidance.
A woman walks past Wells Fargo Bank in New York City, US, March 17, 2020.
Jenna Moon | Reuters
The San Francisco-based bank saw net income decline to $4.62 billion, or $1.20 per share, from $4.99 billion, or $1.23 per share, the previous year. Excluding a Federal Deposit Insurance Corp. charge of $284 million, or 6 cents per share, related to bank failures in 2023, Wells said it earned $1.26 per share, beating analysts' estimates of $1.11 per share.
Revenues of $20.86 billion came in above estimates of $20.20 billion.
“Our strong first-quarter results demonstrate the progress we continue to make to improve and diversify our financial performance,” Wells CEO Charlie Scharf said in a statement.
Scharf added: “The investments we are making through the franchise contributed to the increase in revenues compared to the fourth quarter, as the increase in non-interest income offset the expected decrease in net interest income.”
Recently, the bank allocated $938 million as a provision for credit losses. The bank said the provision included a reduction in the provision for credit losses, driven by commercial real estate loans and auto loans.
Wells stock is up more than 15% year to date, outpacing the S&P 500's return of 9%.
The bank repurchased 112.5 million shares, or $6.1 billion, of common stock in the first quarter.
