Earnings: Wells Fargo tops Wall Street estimates, but bank’s stock slides as its interest income declines.

Wells Fargo reported betterthanexpected earnings despite lower interest income in the second quarter, a potential concern for investors with a Fed interest rate cut on the horizon. Shares in the San Francisco consumer banking giant slid nearly 3% on the day.

Wells Fargo & Co., still under growth restrictions by regulators after years of missteps and scandals, reported net interest income for the quarter of $12.1 billion. That’s down 4% from $12.5 billion in the second quarter last year and a 2% decline from the first quarter of 2019. Analysts surveyed by FactSet were expecting $12.2 billion in net interest income for the bank.

Net interest income carries extra importance for commercial banks like Wells Fargo, who rely less heavily on fee revenue than investment banks.

But like other banks, Wells Fargo has benefited from a rise in interest rates in recent years, somewhat offsetting the restrictions placed on the bank by regulators. But the days of rising rates appear to be coming to an end for now, as the Fed has recently signaled that it could cut rates at its meeting at the end of the month.

Overall, the company reported that its secondquarter net income rose 19% to $6.21 billion ($1.30 per share) from $5.19 billion (98 cents) a year earlier.

The results topped Wall Street expectations. Analysts expected earnings per share of $1.17.

The nation’s biggest mortgage lender posted revenue of $21.58 billion, essentially the same as last year’s second quarter, but beat forecasts of $20.9 billion.

Last year, the Federal Reserve capped the size of Wells Fargo’s assets after an assortment of scandals, beginning in 2016 with the uncovering of millions of fake checking accounts its employees opened to meet sales quotas.

The Federal Reserve has not said when it will remove its restrictions on Wells’ business. Fed Chairman Jerome Powell has said that the bank has more work to do to meet the Fed’s demands.

Further complicating matters, Wells is still without a permanent CEO after Tim Sloan abruptly resigned after what many considered a poor performance defending the bank in front of Congress in March.

Interim CEO Allen Parker said during a call with analysts that the bank won’t set targets beyond this year until a permanent CEO is in place.

“We’re still at the point where the savings we’re achieving are not reaching the bottom line,” he said. “We anticipate that this could continue next year.”

Wells Fargo shares were down $1.39 to close at $45.30 Tuesday.