(Bloomberg) -- Wells Fargo & Co. missed estimates for net interest income in the first quarter, a sign that muted loan growth and increased pressure to pay out more for deposits are eating into the benefit of higher rates. 

The firm earned $12.2 billion in NII in the first three months of the year, according to a statement Friday, down 8.3% from a year earlier and slightly less than the $12.3 billion analysts expected. Still, overall revenue topped estimates, aided by an increase in investment advisory fees and brokerage commissions.

“The investments we are making across the franchise contributed to higher revenue versus the fourth quarter as an increase in noninterest income more than offset an expected decline in net interest income,” Chief Executive Officer Charlie Scharf said in the statement.

Big banks’ first-quarter results offer the latest window into how the US economy is faring amid an interest-rate trajectory muddied by persistent inflation. Rivals JPMorgan Chase & Co. and Citigroup Inc. are also reporting quarterly results Friday, with Goldman Sachs Group Inc., Bank of America Corp. and Morgan Stanley set to follow next week. Like Wells Fargo, JPMorgan reported NII that slightly missed estimates. 

Read More: JPMorgan Shares Fall After NII Miss, Higher Expense Guidance

Shares of Wells Fargo, up 15% this year through Thursday, were down 1.3% at 9:38 a.m. in New York trading.

Wells Fargo attributed the decline in first-quarter NII to the impact of higher interest rates on funding costs, including customers moving their money to higher-yielding accounts, as well as lower loan balances. The company still expects NII for all of this year to be down 7% to 9% from $52.4 billion in 2023, reiterating an earlier forecast it gave in January. 

Total deposits inched up slightly in the first quarter compared with the same period a year earlier, buoyed by a surge in interest-bearing deposits. Funds that bore no interest sank 18% over that period. 

“We expected to see some deposit migration, and that’s exactly what you see in the quarter,” Chief Financial Officer Mike Santomassimo said on a conference call with reporters. “We’re continuing to see that migration in some of the businesses, particularly in consumer.”

The San Francisco-based bank reported $1.15 billion in net charge-offs, including $187 million tied to commercial real estate. Santomassimo said in February that the firm’s commercial-property portfolio “looks pretty good in most cases,” but warned that issues in the space will take time to play out. 

Expenses, a key component of Scharf’s planned turnaround of the lender, came in at $14.3 billion, worse than analysts expected. That included a $284 million charge for an additional Federal Deposit Insurance Corp. special assessment stemming from last year’s regional-bank failures. 

(Updates with share price in the fifth paragraph)

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