Wells Fargo shares roll over after CFO’s tepid profit outlook

Wells’ deposits fell less than expected, totaling $1.3 trillion. Loans came in at $950.1 billion, roughly in line with expectations.

However, not all of Wells Fargo’s numbers were positive.

Wells Fargo’s nonperforming assets totaled $7.3 billion, well above a $6.67 billion estimate from StreetAccount. The bank’s efficiency ratio was also higher than forecast, coming in at 64.4% for the quarter. A higher efficiency ratio indicates a bank is spending more money than it is making.

The company’s report follows the departure of CEO Tim Sloan on March 28. Sloan worked at Wells for 31 years. Allen Parker, Wells Fargo’s general counsel, took over as the company’s interim CEO.

“We have more work ahead of us,” Parker said in a statement Friday. The company’s efforts “are focused on creating a first-rate organization that is characterized by a strong financial foundation, a leading presence in our chosen markets, focused growth within a responsible risk management framework, operational excellence, and highly engaged team members.”

Sloan’s departure took many by surprise because he was awarded a raise for his work in 2018. Sloan replaced John Stumpf as CEO in 2016 in the wake of a scandal in which employees created millions of fake accounts to meet sales quotas. That news also exposed flaws across the bank’s other businesses.

Sloan also had told CNBC that he, along with the Wells Fargo board and all of the company’s employees, thought he was doing a great job.

Wells Fargo shares have underperformed their competitors this year. The stock is up about 4% in 2019, while Bank of America and J.P. Morgan Chase are up more than 18% and 9%, respectively.

J.P. Morgan also reported first-quarter earnings on Friday. It showed record profits and revenue.

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