Wells Fargo & Company WFC has reported its first-quarter 2025 adjusted earnings per share of $1.27, which surpassed the Zacks Consensus Estimate by 3.3%. In the prior-year quarter, the company reported earnings per share of $1.26.

Find the latest earnings estimates and surprises on the Zacks Earnings Calendar.

Results have benefited from slight improvement in non-interest income. Declines in provisions and non-interest expenses were other positives. However, the decrease in net interest income (NII) was an undermining factor.

Results exclude net losses of 3 cents per share on debt securities related to a repositioning of the investment securities portfolio and severance expenses. It also excludes net earnings of 9 cents per share of discrete tax benefits related to the resolution of prior period matters, and net gains of 6 cents on the previously announced sale of the non-agency third-party servicing segment of commercial mortgage servicing business. After considering it, net income (GAAP basis) was $4.89 billion, which increased 6% from the prior-year quarter.

Wells Fargo’s Revenues & Expenses Decline

Quarterly total revenues were $20.15 billion, missing the Zacks Consensus Estimate of $20.79 billion. Also, the top line decreased 3.4% from the year-ago quarter.

Wells Fargo’s NII was $11.49 billion, down 6% year over year. The metric was affected by the impacts of lower interest rates on floating rate assets, deposit mix and pricing changes, lower loan balances, and one fewer day in the quarter, partially offset by lower market funding.

The net interest margin (on a taxable-equivalent basis) declined year over year to 2.67% from 2.81%.

Non-interest income grew marginally year over year to $8.65 billion. The increase included a gain on the sale of the commercial non-agency third-party servicing business, an increase in asset-based fees in Wealth and Investment Management, and higher investment banking fees. This was offset by lower results from venture capital investments, higher net losses on debt securities related to a repositioning of the investment portfolio, and lower net gains from trading in the Markets business.

Non-interest expenses of $13.89 billion declined 3.1% year over year. This was led by reduced operating losses, lower Federal Deposit Insurance Corporation (FDIC) assessments and the impacts of efficiency initiatives.

Wells Fargo's efficiency ratio of 69% was relatively stable compared with the year-ago quarter.

WFC’s Loans Balance Improves, Deposits Decline

As of March 31, 2025, total loans of $913.8 billion increased marginally on a sequential basis. Total deposits were $1.36 trillion, which declined 1% on a sequential basis.

Wells Fargo’s Credit Quality Improves

The provision for credit losses was $932 million, down 1% from the prior-year quarter.

Net loan charge-offs were $1.09 billion or 0.45% of average loans in the reported quarter, down 12.2% year over year. Non-performing assets fell 0.2% year over year to $8.22 billion.

WFC’s Capital Ratio Declines

As of March 31, 2025, the Tier 1 common equity ratio was 11.1% under the Standardized Approach, down from 11.2% in the first quarter of 2024.

Wells Fargo’s Profitability Ratio Improves

Return on assets was 1.03%, up from the prior-year quarter’s 0.97%. Return on equity of 11.5% increased from 10.5% a year ago.

WFC’s Share Repurchase Update

In the reported quarter, Wells Fargo repurchased 44.5 million shares, or $3.5 billion, of common stock in first quarter of 2025.

Our View on Wells Fargo

WFC’s fee income growth, along with a decline in expenses, is likely to support its top line in the upcoming period. Lower provisions and improving loan balances are other positives. However, a dip in NII is concerning.

Wells Fargo & Company Price, Consensus and EPS Surprise

Wells Fargo & Company price-consensus-eps-surprise-chart | Wells Fargo & Company Quote

Currently, Wells Fargo carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Dates & Expectations for Other Banks

M&T Bank Corporation MTB is slated to report first-quarter 2025 results on April 14. Over the past seven days, the Zacks Consensus Estimate for MTB’s quarterly earnings per share has been revised downward to $3.41.

Fifth Third Bancorp FITB is scheduled to release first-quarter 2025 earnings on April 17. The consensus estimate for FITB’s quarterly earnings has been unchanged at 70 cents per share over the past seven days.

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This article originally published on Zacks Investment Research (zacks.com).

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