Wells Fargo WFC Q3 2024 Earnings

Wells Fargo on Friday reported third-quarter earnings that exceeded Wall Street expectations, sending its shares higher.

Here’s what the bank reported compared to what Wall Street expected, according to a survey of analysts by LSEG:

• Adjusted earnings per share: $1.52 vs. $1.28 expected
• Revenue: $20.37 billion vs. $20.42 billion expected

The bank’s shares rose more than 4% in morning trading after the results. The better-than-expected earnings came even with a sharp decline in net interest income, a key measure of how much a bank earns from lending.

The San Francisco-based lender posted $11.69 billion in net interest income, down 11% from the same quarter last year and less than FactSet’s estimate of $11.9 billion. Wells said the drop was due to higher funding costs amid customers’ migration to higher-yielding deposit products.

“Our earnings profile is very different than five years ago, as we have been making strategic investments in many of our businesses and downgrading or selling others,” CEO Charles Scharf said in a statement. “Our revenue streams are more diverse and fee-based income grew 16% during the first nine months of the year, largely offsetting headwinds in net interest income.”

Wells saw its net income fall to $5.11 billion, or $1.42 per share, in the third quarter, from $5.77 billion, or $1.48 per share, during the same quarter a year earlier. Net income included $447 million, or 10 cents per share, in losses on debt securities, the company said. Revenue fell to $20.37 billion from $20.86 billion a year ago.

The bank set aside $1.07 billion as a provision for credit losses, compared with $1.2 billion last year.

Wells repurchased $3.5 billion in common stock in the third quarter, bringing its nine-month total to more than $15 billion, or a 60% increase from a year earlier.

The bank’s shares have gained 17% in 2024, lagging the S&P 500.