Wells Fargo & Co (NYSE:WFC) stock fell 1.81% (As on Jan 18, 11:24:06 AM UTC-4, Source: Google Finance) though the company beat analysts’ estimates for fourth-quarter profit as a rebound in U.S. economic growth encouraged more customers to take loans and the bank kept a tight lid on costs. Profit grew 86% to $5.8 billion, or $1.38 per share, flattered by a $943 million gain from the sale of some businesses and an $875 million reserve release from pandemic-related losses that did not materialize. Credit quality improved significantly as the economy improved and our customers had high levels of liquidity. The loan chargeoff ratio declined from 35 basis points in 2020 to 18 basis points in 2021, and the allowance for credit losses declined by $5.7 billion. Deposits increased $78 billion, or 6%, and loans grew 1% with declines in the first half of the year offset by a 5% increase in the second half.

WFC in the fourth quarter of FY 21 has reported the adjusted earnings per share of $1.25, beating the analysts’ estimates for the adjusted earnings per share of $1.13, according to Refinitiv estimates. The company had reported the adjusted revenue growth of 13 percent to $20.9 billion in the fourth quarter of FY 21, beating the analysts’ estimates for revenue of $18.9 billion. Nonperforming assets increased $145 million, or 2%, from the third quarter, driven by an increase in residential mortgage nonaccruals, primarily resulting from certain customers exiting COVID-related accommodation programs.

Moreover, the consumers continue to have more liquidity than prior to the pandemic, though the company do see this declining as the median balances today are 27% higher than pre-pandemic levels but are down 10% from the third quarter consumer credit card spend also continued to be strong, up 28% from the fourth quarter 2020 and up 27% from the fourth quarter 2019. Holiday sales were strong with spending up 31% in the three weeks leading up to Thanksgiving, and that momentum continued post-Thanksgiving. All spending categories were up in the fourth quarter compared to a year ago, with the largest increases in travel, fuel, entertainment and dining.

Additionally, the company returned a significant amount of capital to the shareholders, including increasing the common stock dividend from $0.10 per share to $0.20 per share in the third quarter, and the company repurchased $14.5 billion of common stock predominantly in the second half of the year