Wells Fargo’s stocks surged by about 3.6% on Monday, April 18, after the bank posted robust first-quarter results. The bank reported revenue gains of 17% to $20.7 billion, primarily driven by a 45% YoY increase in net interest income. Wells Fargo’s net income also climbed by 31% to $5 billion, or $1.23 per share, beating analysts’ estimates. Despite the industry’s problems in March following the collapse of two banks, Wells Fargo managed to perform well due to its diversified business model, strong capital position, and continued focus on financial and credit risk management.
Although the bank saw an increase in net charge-offs and delinquencies, it managed its exposure to commercial real estate and office loans. Analysts have maintained their buy ratings for the bank and even raised their price targets due to the bank’s strong earnings and expense management, as well as its conservative guidance. While investors should be cautiously optimistic, macroeconomic headwinds are expected, and it won’t be clear sailing for Wells Fargo.