Wells Fargo on Thursday reported first-quarter earnings that topped analysts’ expectation, but revenue came in light.
The third-largest U.S. bank by assets reported essentially a flat profit, due to in part higher costs and weaker mortgage banking revenue.
The bank’s shares were down more than 2 percent in premarket trading following the announcement. In early trading the stock was down less than 1 percent.
Here’s what the Street was expecting:
- EPS: $1 versus 97 cents expected by Thomson Reuters analysts’ consensus.
- Revenue: $22 billion versus $22.32 billion expected by Thomson Reuters analysts’ consensus, a nearly 1 percent decline.
The bank earned 99 cents per share in the same period last year.
“Wells Fargo continued to make meaningful progress in the first quarter in rebuilding trust with customers and other important stakeholders, while producing solid financial results,” Wells Fargo CEO Tim Sloan said in a statement.
The bank said total average loans were $963.6 billion in the quarter, down $502 million from the fourth quarter. Mortgage banking revenue fell 23 percent to $1.23 billion.
The earnings report came three days after the bank’s independent directors decided to initiate corporate pay clawbacks, following a six-month investigation into the scrutinized institution’s retail banking sales practices.
The board review indicated that former Wells Fargo Chairman and CEO John Stumpf acknowledged that he made significant mistakes and helped create a culture at the bank that resulted in abuses.
“The findings are valuable to us and beneficial in helping to identify areas for further improvement. While we have more work to do, I am pleased with all we have accomplished thus far,” Sloan said in the earnings release Thursday.
Wells Fargo directors are likely to receive the support of Berkshire Hathaway, according to The Wall Street Journal.
Citigroup also reported earnings on Thursday, beating expectations on the top and bottom line. Earlier in the day, JPMorgan Chase reported first-quarter earnings that easily beat Wall Street’s expectations.
— CNBC’s Wilfred Frost and Reuters contributed to this report.