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Wells Fargo Earnings Results For Q1 2018 Beat Estimates

Wells Fargo & Co (NYSE:WFC) released its Q1 2018 earnings results before opening bell this morning. Wells Fargo earnings rose to $1.12 per share on $21.9 billion in revenue, while the Street had been looking for $1.06 per share on $21.7 billion in revenue. In the year-ago quarter, Wells Fargo earnings amounted to $1.03 per share on $22.3 billion in revenue.

wells fargo earnings
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Wells Fargo earnings for Q1 2018

Wells Fargo said the Q1 2018 earnings results reported this morning are preliminary and may end up needing revisions “to reflect additional accruals for the CFPB/OCC matter,” which will be finalized in its 10-Q filing.

The firm said its net interest income ticked down by 1% year over year to $12.2 billion, missing the consensus estimate of $12.65 billion. Total average loans fell 1% year over year to $951 billion quarter over quarter. Average deposits fell $2 billion to $1.3 trillion. Net charge-offs fell $64 million to $741 million. Return on assets amounted to 1.26%, while return on equity was 12.37%.

Community banking revenue was essentially flat year over year at $11.8 billion, while wholesale banking revenue fell to $7.3 billion from $7.6 billion a year ago. Wealth and investment management revenue ticked down to $4.24 billion from $4.26 billion.

Wells Fargo had $1.6 trillion in retail client assets under management, a 4% year-over-year increase. Advisory assets were up 10% at $540 million. Client assets in the wealth management division increased 2% to $242 billion, while total assets under management in the asset management segment grew 3% to $497 billion. IRA assets increased 5% to $403 billion, while individual retirement plan assets grew 7% to $386 billion.

Wells Fargo stock jumps

The firm’s net interest margin held steady at 2.81%, but that missed the consensus, at 2.88%. Wells Fargo reported a Common Equity Tier 1 ratio of 12%. Net interest income fell $75 million quarter over quarter to $12.2 billion, as there were two fewer days in Q1 2018. Noninterest income fell $41 billion quarter over quarter to $9.7 billion.

“The efforts to build a better Wells Fargo during the quarter included continuing to improve our compliance and operational risk management programs, investing in innovative products and services that enhance the customer experience including the roll-out of our digital mortgage application and predictive banking service, and increasing the minimum hourly pay rate for U.S.- based team members,” CEO Tim Sloan said in a statement in the Wells Fargo earnings release.

Following the Wells Fargo earnings report for Q1 2018, the firm’s stock jumped by as much as 1.39% to $53.43 per share in premarket trading.