Wells Fargo (NYSE:WFC) today reported earnings of roughly $3 billion, or $0.64 per diluted share, on total revenue of about $17.9 billion, beating analysts' estimates on profits but missing on revenue.

The quarter included a reserve release of roughly $763 million, which the bank attributed mostly to its recent sale of its student loan portfolio. After net charge-offs (debt unlikely to be collected) of $584 million, the release boosted profits by about $179 million.

For the full year 2020, Wells Fargo saw its total profits drop 83% from 2019, mainly due to struggles in the first half of the year.

Wells Fargo

Image source: Wells Fargo.

Still, the bank seems to be making progress on improving its internal risk management and controls, which it needs to do in order to be released from consent orders the bank is still operating under as a result of its phony-accounts scandal. The bank also continues to exit operations that aren't core to its main U.S. business.

"With a more consistent broad-based recovery and as we continue to press forward with our agenda, we expect you will see that this franchise is capable of much more," CEO Charlie Scharf said in a statement.

Net interest income in the quarter declined from the third quarter, mainly as the bank continues to deal with the impact from lower interest rates and lower loan demand.

But the net interest margin, the difference between what the bank makes on interest-earning assets such as loans and what it pays out on interest-bearing liabilities such as deposits, remained flat from the third quarter at 2.13%.

Total nonperforming assets including loans past due increased to 1% of total loans, up from 0.89% in the third quarter.

While expenses in the fourth quarter dropped from the third quarter (because revenue also dropped), the efficiency ratio, a measure of noninterest expenses expressed as a percentage of revenue (lower is better), climbed to 83%.

Shares of Wells Fargo were down about 1.3% in pre-market trading.

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