A woman walks past Wells Fargo bank in New York City, USA, March 17, 2020.
Jeenah Moon | Reuters
Wells Fargo Shares fell on Friday after the bank reported first quarter earnings shows a decrease in interest income.
Wells said its net interest income 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.
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: Adjusted 1.26 cents vs. 1.11 cents expected
- Revenue: $20.86 billion vs. $20.20 billion expected
The company 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. Excluding a Federal Deposit Insurance Corp. charge of $284 million, or 6 cents per share, related to the bank’s 2023 bankruptcy, Wells said it earned $1.26 per share. shares, beating analyst estimates of $1.11 per share.
Revenue of $20.86 billion was above estimates of $20.20 billion.
In the most recent period, the bank set aside 938 million USD to reserve for credit risks. The bank said the provision included a reduction in the provision for credit losses, due to commercial real estate and auto loans.
Wells shares fell 1% in early marketing trading Friday morning. Year to date, the stock is still up more than 15%, surpassing the S&P 500’s 9% return.
“Our solid first quarter results demonstrate the progress we continue to make to improve and diversify our financial operations,” Wells CEO Charlie Scharf said in a statement. ”.
“The investments we are making across the franchise contributed to higher revenue compared to the fourth quarter as the increase in non-interest income more than offset the expected decline,” Scharf added. on net interest income”.
The bank repurchased 112.5 million shares, or $6.1 billion, of common stock in the first quarter.
