Wells Fargo Beats Earnings, But Weak Net Interest Income Weighs on Shares

Wells Fargo & Company (NYSE:WFC) reported stronger-than-expected second-quarter earnings and revenue, but a shortfall in net interest income (NII) tempered the market’s response, sending shares 5% lower intra-day today.

The bank posted earnings of $1.60 per share, outpacing the consensus estimate of $1.40. Revenue for the quarter reached $20.82 billion, narrowly beating expectations of $20.76 billion. Despite the solid top and bottom line, net interest income—a critical measure for banks—fell short, coming in at $11.71 billion compared to the $11.83 billion estimate. Net interest margin also missed forecasts, reported at 2.68% versus the anticipated 2.7%.

Consumer banking and lending remained a key revenue driver, generating $9.23 billion for the quarter. The bank’s provision for credit losses was $1.01 billion, coming in below the expected $1.16 billion, indicating stable credit quality.

Operating expenses stayed in line with forecasts, with non-interest expenses at $13.38 billion. Investment banking fees totaled $696 million, slightly under the $703.1 million estimate.

While the overall report showed strength in core operations, the NII miss highlights the ongoing pressure from a challenging rate environment, leaving investors cautious despite the earnings beat.