What Wells Fargo & Company (WFC) Said on Its Q3 Earnings Call

Key Points

• Strong third-quarter results: Wells Fargo’s EPS rose 13% year over year to $1.87, while return on tangible common equity improved to 16.3%, nearing its 17%–18% target range. Revenue increased 2%, with growth across all operating segments.
• Balance-sheet and business growth continued: Average loans and deposits each grew 11%, helping net interest income rise 5% year over year to approximately $11.9 billion. Wealth management, commercial banking and consumer lending posted solid revenue gains, while credit-card openings rose 61%.
• Credit remained healthy, supporting capital returns: Charge-off ratios declined overall and management reported no broad-based credit deterioration, despite risks from inflation, elevated rates, geopolitical uncertainty and commercial real estate. Wells Fargo raised its quarterly dividend to $0.50 per share and repurchased $2.5 billion of stock.

Wells Fargo & Company NYSE: WFC reported third-quarter results marked by higher earnings, broad-based revenue growth, loan and deposit expansion, and improved returns, while executives said credit conditions remained strong despite risks tied to inflation, interest rates and commercial real estate valuations.

Chief Executive Officer Charlie Scharf said earnings per share rose 13% from a year earlier to $1.87. Return on tangible common equity reached 16.3% for the quarter, compared with 14.7% for the first nine months of 2025, moving closer to the bank's 17% to 18% target range.

Revenue increased 2% year over year, with growth in each operating segment partly offset by lower venture-capital investment revenue and lower lease income following the first-quarter sale of the railcar leasing business. Non-interest expense declined modestly, as a 15% increase in revenue-related costs was more than offset by a 4% decline in non-revenue-related expenses, Scharf said.

Balance-sheet growth and net interest income

Average loans and deposits each increased 11% from a year earlier during the third quarter. Chief Financial Officer Mike Santomassimo said average loans rose $105 billion, led by commercial and industrial lending, while auto loans, securities-based lending and credit cards were the main consumer growth areas. Average deposits rose $143 billion, supported by commercial and interest-bearing deposit growth.

Net interest income increased $567 million, or 5%, from a year earlier and 2% from the second quarter. The bank said the improvement reflected higher loan and securities balances, fixed-rate asset repricing, higher rates on floating-rate assets and an additional day in the quarter.

Wells Fargo expects full-year 2026 net interest income of about $50 billion, with fourth-quarter net interest income expected to be approximately $13 billion. Santomassimo said the net interest margin is expected to remain stable sequentially in the fourth quarter. He added that the bank expects benefits from loan and deposit growth, fixed-rate asset repricing and securities balances, although higher rates can pressure net interest income in the liability-sensitive markets business.

The company said it continued to improve the efficiency of its markets balance sheet through measures including sponsored repo arrangements and other optimization tools. Santomassimo said fixed-income financing gross balances rose 18% from the second quarter while net balances declined, reflecting those efforts.

Business-line momentum

Wealth and Investment Management revenue rose 12% from a year earlier, while Commercial Banking revenue increased 6%, Consumer Banking and Lending revenue grew 5%, and Corporate and Investment Banking revenue rose 3%.

In Consumer Banking and Lending, the company recorded its 14th consecutive quarter of year-over-year growth in primary checking accounts. Scharf said business banking checking-account openings increased 9%, while credit-card account openings rose 61%. The bank opened more than 660,000 credit-card accounts during the quarter, and auto originations increased 15% from a year earlier.

Santomassimo said the bank's more recent credit-card vintages have been larger than earlier ones and should contribute more meaningfully to profitability as they mature. He said Wells Fargo expects card originations to remain in a range of roughly 600,000 to 700,000 accounts per quarter for a period.

Wealth and Investment Management client assets increased 11% to $2.5 trillion, and average loan balances in the unit rose 16%. Scharf highlighted investments in advisor technology, alternative investment offerings and an AI-powered tool for financial advisors.

Within Corporate and Investment Banking, banking revenue rose 8%, including a 10% increase in investment-banking revenue. M&A revenue rose 30%, while equity capital markets and investment-grade underwriting fees each climbed 33%. Wells Fargo said its equity capital markets market share rose 84 basis points to 3.9%, and its rank in announced U.S. M&A volume improved to sixth from ninth a year earlier.

Markets revenue was roughly stable from a year ago, however, as late-quarter interest-rate moves pressured fixed-income valuations and reduced client activity. Equities revenue increased 21%, but Santomassimo said lower volatility created a less favorable environment for the bank's equities derivatives franchise.

Credit, capital and expenses

Credit performance remained favorable. The net loan charge-off ratio was 38 basis points of average loans, down from a year earlier, while consumer net charge-offs declined to 70 basis points. Commercial net charge-offs were 18 basis points, up eight basis points from the second quarter but stable from a year earlier.

Executives said they do not currently see broad-based credit deterioration. Scharf said consumer spending remained strong, with debit-card spending up 8% and credit-card spending up 12% from a year earlier. He said early-stage delinquencies remained historically low, while commercial customers continued to show solid loan demand and credit performance.

Still, management cited persistent inflation, elevated rates, geopolitical uncertainty and potential risks associated with the financing of AI-related infrastructure. Santomassimo said higher rates would mathematically pressure commercial real estate valuations, though he did not see an acute issue developing in the immediate term. He said the bank remained comfortable with its allowance for credit losses related to commercial real estate.

Wells Fargo's common equity tier 1 ratio was 10%, above its 8.5% regulatory minimum plus buffers. During the quarter, the company raised its common dividend to $0.50 per share and repurchased $2.5 billion of stock. Management said it intends to operate within a 10% to 10.5% CET1 target range and will use buybacks as a capital-management lever after considering growth opportunities and risks.

The company reaffirmed its expectation for approximately $55.7 billion in 2026 non-interest expense. Santomassimo said revenue-related expenses are now expected to exceed the original forecast by roughly $400 million, but efficiency savings are expected to offset that increase. Scharf said the bank sees further opportunity to use AI to improve customer service and operational efficiency while maintaining a disciplined approach to risk.

About Wells Fargo & Company (NYSE:WFC)

Wells Fargo & Company NYSE: WFC is a diversified financial services company that provides banking, lending, investment, and wealth management services to individuals, businesses, institutions, and government entities. Its offerings include checking and savings accounts, credit cards, personal and commercial loans, mortgages, payment services, and other deposit and credit products.

The company also provides investment banking, capital markets, brokerage, advisory, asset management, and retirement services through its corporate and investment banking and wealth and investment management businesses.

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