Wells Fargo profit rises 6% as credit provisions increase

Wells Fargo reported third-quarter net income of $5.95 billion Tuesday, up 6% from a year earlier. Diluted earnings per share rose 13% to $1.87, while revenue increased 2% to $21.87 billion.

Net interest income increased 5% to $12.52 billion. Average loans and deposits each grew 11%. But taxable-equivalent net interest margin narrowed to 2.43% from 2.61% a year earlier: a larger balance sheet can lift income without widening its margin.

Credit-loss provisions increased to $1.03 billion from $681 million. Wells Fargo linked reserve growth partly to higher commercial-and-industrial and auto loan balances. Net loan charge-offs were $983 million, or an annualized 0.38% of average loans, down from 0.40% a year earlier.

A provision includes changes in expected losses; net charge-offs measure realized losses after recoveries. That distinction helps readers assess growth alongside credit quality.

Noninterest expenses fell 1%. Earnings included $170 million in discrete tax benefits. The October 13 release describes the results as preliminary.