Wells Fargo loan balances were low in Q1; net interest income falls

By Devika Patel

Knoxville, Tenn., April 15 – Wells Fargo & Co. saw net interest income fall nearly 10% versus a year ago due to higher interest rates and dwindling loan balances, which were lower than management’s expectations.

“Net interest income declined $1.1 billion or 8% from a year ago due to the impact of higher interest rates on funding costs, including the impact of customers migrating to higher yielding deposit products as well as lower loan balances, partially offset by higher yields on earning assets,” senior executive vice president and chief financial officer Michael P. Santomassimo said on the company’s first quarter ended March 31 earnings conference call on April 12.

“First quarter results were largely as expected, with loan balances a little lower ... than our expectations.

“It is still early in the year and ultimately the amount of net interest income we earn will depend on a variety of factors, many of which are uncertain, including deposit balances, mix and pricing, the absolute level of interest rates and the shape of the yield curve and loan demand,” he said.

Liquidity is well above regulatory minimum requirements.

“Our CET-1 ratio of 11.2% continue to be well above our 8.9% regulatory minimum plus buffers,” Santomassimo said.

The financial services company is based in San Francisco.

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