Wells Fargo WFC Results Q1 2024

Wells Fargo reported on Friday profit for the first quarter and revenues that exceeded Wall Street expectations despite a decline in net interest income.

Here’s how the company performed compared to what Wall Street expected, based on a survey of analysts by LSEG, formerly known as Refinitiv:

• Earnings per share: $1.26 cents 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.

Wells said 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 a shift by customers to higher-yielding deposit products.

Net interest income for 2024 is expected to decline between 7% and 9%, unchanged from previous expectations.

The San Francisco-based bank saw net income fall to $4.62 billion, or $1.20 per share, from $4.99 billion, or $1.23 per share, a year earlier. Excludes a charge from the Federal Deposit Insurance Corp. of $284 million, or 6 cents per share, tied to 2023 bank failures, Wells said it earned $1.26 per share, higher than analyst estimates of $1.11 per share.

Revenue of $20.86 billion topped the estimate of $20.20 billion.

“Our solid 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.

“The investments we are making across the franchise contributed to increased revenue versus the fourth quarter as an increase in non-interest income more than offset the expected decrease in net interest income,” Scharf added.

For the latest period, the bank has set aside $938 million as a provision for credit losses. The bank said the provision includes a reduction in the provision for credit losses caused by commercial real estate and auto loans.

Wells’ shares are up more than 15% year to date, beating the S&P 500’s 9% return.

The bank repurchased 112.5 million shares, or $6.1 billion, of common stock in the first quarter.