What happened

Shares of Wells Fargo (WFC 0.42%) are rising today, up about 3.6% as of 2:40 p.m. ET. The bank stock is flat year to date.

The market overall was down on Monday: The S&P 500 was off 7 points (-0.2%), the Dow Jones Industrial Average fell 24 points (-0.1%), and the Nasdaq Composite was down 32 points (-0.3%) as of 2:40 p.m. ET.

So what

Given the problems the industry had in March after the collapse of two banks, there was much trepidation entering earnings season. While many felt the large banks would get through it through it OK, investors were nonetheless relieved when first-quarter results proved that was indeed the case. Wells Fargo reported Q1 figures last Friday, posting gains in revenue and earnings while beating analysts' estimates.

Revenue jumped 17% to $20.7 billion, led by a 45% year-over-year increase in net interest income. Average loans rose 5.7% to $949 billion while average deposits fell about 7% to $1.36 trillion. Net income climbed 31% to $5 billion, or $1.23 per share. This includes $1.2 billion for credit losses, up from a $787 million reserve a year ago.

Liquidity improved; the common equity Tier 1 ratio went to 10.8% in the quarter from 10.5% in the prior-year period. Also, return on tangible common equity jumped to 14%, up from from 10.4%. In addition, the efficiency ratio fell to 66%, versus 78% a year ago.

"Our customers benefit from our size and the range of banking services we provide, which helps us build a full relationship with individuals and companies. Our diversified business model, strong capital position, mix of deposits, access to funding sources, and continued focus on financial and credit risk management allow us to support our customers throughout economic cycles," CEO Charlie Scharf said.

Now what

Wells Fargo did see an increase in net charge-offs and delinquencies, which is why more was set aside for credit losses. A big chunk of the provision for credit losses is for the commercial real estate space, which is struggling. On the first-quarter earnings call, Scharf said Wells Fargo is managing its exposure to commercial real estate and office loans. Currently, about 16% of its total loans are in commercial real estate.

Wells Fargo also benefited on Monday after several analysts maintained their buy ratings for the bank, with Goldman Sachs raising its price target from $46 to $49 on strong earnings and expense management, as well as the bank's guidance for both, which the analyst firm called conservative.

With macroeconomic headwinds expected, it won't be clear sailing for Wells Fargo by any stretch, but investors should be cautiously optimistic about its Q1 results.