Wells Fargo recently released its third quarter report for 2023, showing a reported net income of $5.8 billion, equal to $1.48 per diluted share. These results also encompassed $349 million, or $0.09 per share, in discrete tax benefits related to the resolution of prior period tax matters and the sale of approximately $2 billion worth of private equity investments, which had a minor impact on net income but raised the CET1 ratio by approximately 14 basis points.

“Our third quarter results were solid with net income of $5.8 billion and revenue of $20.9 billion,” Wells Fargo CEO Charlie Scharf said in the report. “Our revenue growth from a year ago included both higher net interest income and noninterest income as we benefited from higher rates and the investments we are making in our businesses. Expenses declined from a year ago due to lower operating losses. While the economy has continued to be resilient, we are seeing the impact of the slowing economy with loan balances declining and charge-offs continuing to deteriorate modestly.”

According to the report, in the third quarter of 2023 compared to the same period in 2022, Wells Fargo reported an 8% increase in net interest income due to higher interest rates, despite lower deposit balances. Noninterest income rose by 4%, primarily driven by increased trading revenue, investment banking fees, and asset-based fees. Noninterest expenses decreased by 8%, mainly due to efficiency initiatives.

In Q3 2023 versus Q2 2023, commercial net loan charge-offs decreased slightly, driven by lower charge-offs in the commercial and industrial portfolios. However, the consumer net loan charge-off rate increased due to higher charge-offs in the auto and credit card portfolios. Nonperforming assets increased, primarily in commercial real estate nonaccrual loans, offset partially by lower commercial and industrial nonaccrual loans, according to the report.