Wells Fargo posted lower third-quarter profit than Wall Street expected as the bank shifted more customers to digital services while trying to restore its tarnished reputation.
Earnings of $1.13 a share compared with the $1.19 average estimate from analysts surveyed by FactSet. Net income rose 33 percent to $6 billion in the three months through September, while revenue climbed to $21.9 billion.
"We are strengthening how we manage risk and have made enhancements to our risk management framework," said Chief Executive Officer Tim Sloan, who is trying to move past several scandals that drew intense congressional attention and led to the resignation of former CEO John Stumpf. "We also continued to make progress on customer remediation, which is an important step in our efforts to rebuild trust."
Wells Fargo's stock was down slightly to $51.37 per share in New York trading.
Senate Democrats are eager to bring the bank's top executives in front of Congress to address recent developments, including a $2 billion settlement in August with the Justice Department over claims that income information was misrepresented on loan applications.
In 2016, the company admitted that employees created more than 3 million unauthorized customer accounts in an attempt to meet sales quotas, a disclosure that spurred contentious hearings in Washington. Wells Fargo paid $1 billion this April to settle a federal investigation into its automotive-and-mortgage-lending business.
Sloan told investors he was "hopeful" there would be no new issues that arise and that the company would "not only meet but exceed regulatory expectations."
During the most recent quarter, digital customers rose 4 percent to 29 million, and Wells Fargo consolidated 93 retail bank branches, which are more expensive to operate than web services and ATMs. Sloan said the quarter reflected progress in the bank's effort to "build a better Wells Fargo."
"On the ones that we've consolidated, really the game plane is to retain everything," Sloan said on the earnings call. "The intention is to keep all of the customers and all of the deposits."
At least 52 branch closures are slated to occur by the end of 2018, and Wells Fargo said in September it would cut up to 26,500 jobs over the next three years.
"This projected decline is expected to be achieved by displacement," Chief Financial Officer John Shrewsberry told investors.
Also on Thursday, PNC Bank posted higher profits than analysts expected for the quarter, driven by lending growth.
Net income at the Pittsburgh-based company rose 3 percent to $1.4 billion, or $2.82 a share, as average deposits increased to $262.5 billion and average loans rose to $223.3 billion. Analysts had predicted profit of $2.73 a share.
Profits from interest payments grew 2 percent to $2.5 billion, a surge that comes after the Federal Reserve raised interest rates to a range of 2 percent to 2.25 percent.
A national initiative to expand "middle market capabilities in faster-growing markets" helped increase profits, Chief Executive Officer Bill Demchak said in a statement.
PNC's stock was down 4.95 percent to $125.09 per share in New York trading.