“This is a kitchen sink quarter for the new CEO,” Kyle Sanders, an analyst at Edward Jones, said Tuesday in an interview.

Excluding the legal costs, net income totaled 93 cents a share in the fourth quarter, less than the $1.14-a-share average estimate of 11 analysts in a Bloomberg survey.

“Fundamentals are still pretty weak compared to the other banks,” Sanders said, citing JPMorgan Chase & Co.’s and Citigroup Inc.’s strong results Tuesday. Wells Fargo is “lagging peers in terms of execution.”

JPMorgan and Citigroup both beat estimates, partly on the strength of their consumer units. Wells Fargo’s consumer-banking revenue fell 8% from a year earlier, while JPMorgan’s rose 3%. Revenue also fell 5% in Wells Fargo’s wholesale bank, while gaining 3% in its wealth-management unit.

Also in Wells Fargo’s fourth-quarter results:

• The bank’s efficiency ratio, a measure of profitability, worsened to 78.6% from 69.1% in the third quarter. The firm had been targeting 55% to 59% in the long term, excluding litigation costs, though Scharf may set a different goal.

• Period-end loans and deposits both increased from a year ago, and the number of primary consumer checking customers rose for the ninth consecutive quarter.

This article was provided by Bloomberg News. 

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