Wells Fargo & Co. said its fourth-quarter profit rose as one of the nation's largest banks continues to seek growth while trying to move past its regulatory problems.
Shares fell 1% in premarket trading to $62.35 after the results were announced.
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The bank reported a profit of $6.15 billion, or $1.16 a share, which included a $3.35 billion benefit from the tax overhaul, a gain from the sale of an insurance business and costs from litigation accruals.
Analysts polled by Thomson Reuters had expected earnings of $1.07 a share.
Wells Fargo is somewhat unique among big banks in that the tax law caused it to record one-time gains to profits. Most other big banks are expected to post one-time charges.
This is because Wells Fargo has a net deferred tax liability -- it was about $7 billion at the end of 2016 -- rather than a deferred tax asset. Because of the fall in the U.S. corporate tax rate, other banks will likely have to write down the value of some of their deferred tax assets. Wells Fargo, however, wrote down part of its tax liability -- taxes payable in the future -- which resulted in a gain that boosts reported results.
Investors are expected to look past such one-time changes, however. For Wells Fargo, led by Chief Executive Timothy Sloan, the more immediate concerns are around growth and costs.
Wells Fargo had been one of the most consistent big banks at growing earnings and revenue. But its shares have struggled since the bank in September 2016 agreed to a $185 million settlement over opening as many as 3.5 million accounts with fictitious or unauthorized information.
Since then, the bank has disclosed consumer-lending problems around auto insurance charges and mortgage fees that regulators are probing. Wells Fargo has said it plans to refund more than $100 million to consumers.
Wells Fargo also continues to face a spate of state and federal investigations that the bank has said it is cooperating with.
Investors have so far given Mr. Sloan time to clean up the problems, although the stock has underperformed big rivals over the past year.
Write to Peter Rudegeair at Peter.Rudegeair@wsj.com and Emily Glazer at email@example.com
(END) Dow Jones Newswires
January 12, 2018 08:27 ET (13:27 GMT)