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Shares of Wells Fargo & Company WFC jumped 4.6% in the pre-market trading session today as the company reported its fourth-quarter 2024 adjusted earnings per share of $1.42, which surpassed the Zacks Consensus Estimate of $1.34. In the prior-year quarter, the company reported earnings per share of $1.29.
Find the latest earnings estimates and surprises on the Zacks Earnings Calendar.
Results have benefited from higher non-interest income. An improvement in capital ratios, a decline in provisions and non-interest expenses were other positives. However, the decrease in net interest income (NII) was the undermining factor.
Results exclude net losses of 25 cents per share on debt securities related to a repositioning of the investment securities portfolio and severance expenses, and net earnings of 26 cents per share of discrete tax benefits related to the resolution of prior period matters. After considering it, net income (GAAP basis) was $5.08 billion, which increased 47% from the prior-year quarter.
In 2024, earnings of $5.37 per share surpassed the consensus estimate of $5.29 and rose from $4.83 in 2023. Net income was $19.72 billion, up 3% from the prior-year quarter.
Wells Fargo’s Revenues & Expenses Decline
Quarterly total revenues were $20.38 billion, missing the Zacks Consensus Estimate of $20.55 billion. Also, the top line decreased 0.5% from the year-ago quarter.
For 2024, total revenues were $82.29 billion, which missed the Zacks Consensus Estimate of $82.62 billion. Also, the top line declined 0.4% year over year.
Wells Fargo’s NII was $11.83 billion, down 7% year over year. The metric was affected by deposit mix and pricing changes, the impacts of lower rates on floating rate assets, and lower loan balances, partially offset by lower market funding.
The net interest margin (on a taxable-equivalent basis) declined year over year to 2.70% from 2.92%.
Non-interest income grew 11% year over year to $8.54 billion. The uptick was driven by improved results from the company’s venture capital investments, an increase in asset-based fees in Wealth and Investment Management on higher market valuations, and higher investment banking fees, as well as increases in most other fee categories, partially offset by 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 $13.9 billion declined 12% year over year. This was mainly due to lower Federal Deposit Insurance Corporation assessments and severance expenses, and the impacts of efficiency initiatives. These decreases were partially offset by higher revenue-related compensation expenses, predominantly in Wealth and Investment Management, an increase in benefits expenses, and higher technology and equipment expenses.