Wells Fargo (NYSE:WFC) stock is dipping 3.2% in premarket trading after the bank’s Q1 revenue, reported on Thursday, missed analysts’ consensus estimate as noninterest revenue fell 28% from Q4 and 14% from a year ago.
“We had broad-based loan growth, growing both consumer and commercial loans from the fourth quarter,” said CEO Charlie Scharf. “Credit quality remained strong and our results included a $1.1B pre-tax reduction in the allowance for credit losses.”
Looking ahead, Scharf sees the Fed’s pivot to tighter policy slowing the economy. “While we will likely see an increase in credit losses from historical lows, we should be a net beneficiary as we will benefit from rising rates, we have a strong capital position, and our lower expense base creates greater margins from which to invest,” he said.
Q1 EPS of $0.88 topped the consensus estimate of $0.80; That compared with $1.38 (including an $0.18 gain) in Q4 2021 and $1.02 in the year-ago quarter.
Total revenue of $17.6B missed the $17.8B consensus and fell from $20.9B in Q4 2021 and $18.5B in Q1 2021.
Q1 noninterest income of $8.37B fell from $11.6B in Q4 2021 and from $9.72B in Q1 2021.
Non-interest expense of $13.9B vs. $13.2B in Q4 and $14.0B in Q1 2021.
Loans of $898.0B vs. $875.0B in Q4; deposits of $1.46T vs. $1.47T at Q4-end.
Net interest margin on a taxable equivalent basis of 2.16% vs. 2.11% in the prior quarter and 2.05% in the year-ago quarter.
Provision for credit losses was a benefit of $787M vs. $875M in Q4 and $1.05B in Q1 2021.
Conference call at 10:00 AM ET.
Earlier, Wells Fargo GAAP EPS of $0.88 beats by $0.07, revenue of $17.59B misses by $230M.