Wells Fargo shares rose on Friday after the bank posted quarterly revenue that exceeded analysts’ expectations and a significant jump in profit.

Following the earnings announcement, premarket trading saw a 2% increase in shares of the bank.

• Earnings per Share: Adjusted $1.25/share, exempting certain items. This is higher than the consensus estimate from Refinitiv of $1.13/share.
• Refinitiv estimates revenue at $20.856 billion. This is higher than the consensus estimate for 18.824 billion.
• The net income was $5.75Billion. This is an 86% increase over the previous year’s $3.09Billion.

The bank’s $875 million reserve release, which it had created during the pandemic in order to protect against loan losses of large numbers, helped the bank achieve its goals.

Charlie Scharf, CEO of Wells Fargo, stated that as the economy recovered, consumers were spending more, paying higher fees for investment banking and gaining equity in their affiliated venture capital and equity businesses.

Scharf noted also that, despite starting the year with weak lending, things picked up in 2021’s second half. The company saw a 5% increase in its commercial and consumer portfolios over the last six months.

Scharf stated that credit management was good and charge-offs were reduced to historic lows. Additionally, credit losses were lessened.

Wells Fargo has finally found its wind after struggling for many years.

Because of its extensive retail banking network as well as large deposits, the bank is fourth in U.S. assets and considered one of the most attractive plays to increase interest rates. Rise rates give banks the ability to charge greater interest on loans and increase their margins.

It is still not seeing this benefit, with net interest income in the fourth quarter dropping slightly to $9.26billion from one year earlier.

In the fourth quarter of 2021, the bank purchased 139.7 millions shares (or $7.0 billion) of common stock.

Stocks of the company grew 59% over peers in last year and have continued to rise this year with rising interest rates.

The bank stated in November that it could experience delays or issues meeting the demands of multiple U.S. regulators. The Federal Reserve’s order requiring that the bank keep its balance sheets frozen at 2017 levels is most relevant for investors.

Wells Fargo shares have risen 17% over the 11% gain of the KBW Bank Index.

— CNBC’s Hugh Son contributed reporting.